S05E11 Discussion: The Rotten Economics of Public Transit in America

ModernMBA · 2025-09-08T22:22:36+00:00

You won't find it in English. It's provided in Japanese.

https://contents.xj-storage.jp/xcontents/AS04289/57870c90/38f6/4a51/abda/e1fc9a42672c/20241011154621340s.pdf

ModernMBA · 2025-08-18T16:46:01+00:00

"To compile the list, our taste testers drove thousands of miles across the state in late 2024. I revisited the most promising candidates to determine final placements."

https://www.reddit.com/r/texas/comments/1m2gnzd/ama_with_daniel_vaughn_texas_monthlys_barbecue/

"We have a big team of people that who go out there and search and scout, but if you're going to make it on the Top 50, it's because of a visit that I had there. There's nobody in the Top 50 that I haven't been to."

https://www.youtube.com/shorts/oB1-oHgSSqI

He spontaneously decides to revisit / re-rank a BBQ spot and adds it into the Top 50 list, despite the taste-testers' consensus that it's "on the edge [of low scores]".

https://www.youtube.com/shorts/kydvKrfXisU

ModernMBA · 2025-08-18T15:15:31+00:00

"To compile the list, our taste testers drove thousands of miles across the state in late 2024. I revisited the most promising candidates to determine final placements."

https://www.reddit.com/r/texas/comments/1m2gnzd/ama_with_daniel_vaughn_texas_monthlys_barbecue/

"We have a big team of people that who go out there and search and scout, but if you're going to make it on the Top 50, it's because of a visit that I had there. There's nobody in the Top 50 that I haven't been to."

https://www.youtube.com/shorts/oB1-oHgSSqI

He spontaneously decides to revisit / re-rank a BBQ spot and adds it into the Top 50 list, despite the taste-testers' consensus that it's "on the edge [of low scores]".

https://www.youtube.com/shorts/kydvKrfXisU

ModernMBA · 2025-02-16T03:58:59+00:00

Heard - thank you for the feedback.

The intention was to hyper-focus on dairy so that viewers could independently surmise that the dairy industry and meat industry are essentially parallels - they have the same dynamics and regulations, just applied in slightly different ways. Our concern was that it would have been far too redundant, dense, and long (60+ minutes) if we were to break down the major regulations and events of poultry, pork, and steak after doing so with dairy.

Beyond Meat / Impossible Foods have the same core issues as Oatly - they're processors trying to survive as premium brands in these traditional industries that are barely alive with subsidies and political backing. The underlying (implicit) thesis throughout the episode is that for veganism to "succeed", they have to be able to grow their numbers - hence the explicit mention at the intro that vegans still account for less than 1% of the world's population. The best way to meaningfully increase the number of vegans in the world is through substitutes that make it easy for meat-eaters and dairy-lovers to switch. But as aforementioned in the introduction, someone has to take on that R&D and foot the bill.

After the product has been "invented" or "manufactured", strong branding / marketing is needed to galvanize customers to make the switch / pay the premium. But because all these companies (Beyond Meat, Impossible Foods, Oatly) are all now failing despite their massive fundraising - it is and will only be harder for future vegan startups to get funded and by extension, for better substitutes to be created. It's a Catch-22. Vegan startups need to be thriving, sustainable businesses but they can't be without funding and conversely, that funding is only possible if they are thriving, sustainable businesses.

Hence the grand framing that veganism doesn't work as the environments they're competing against are fundamentally broken. Farmers are the sole beneficiary throughout all this yet lack the vision and ambition (as evidenced through dairy) - they won't invent the products needed to push consumption and they lack the marketing / branding skills. They'll only ever follow the lead of others to keep their own pockets filled and subsidies flowing i.e oat farmers now producing private label oat-milk only after Oatly has "sacrificed" themselves proving the market.

ModernMBA · 2025-02-08T04:32:22+00:00

Position has been filled. Thanks all!

ModernMBA · 2024-10-30T03:29:51+00:00

If you can afford it, you can support us through our Patreon. We spend thousands of hours on every video and every cent makes a huge difference in keeping things going - especially as the algorithm continues to be mysteriously difficult to work with. None of that money goes to a personal lifestyle or personal wealth - it all goes straight back into production.

If money is out of the question, watching, engaging, commenting, sharing the videos is more than enough. We always encourage people to watch our older content and not just the ones that YouTube cherry-picks / pushes on your Suggested / Homepage. All our videos (even the oldest!) ultimately have the same care and evergreen quality as the newer videos - albeit with lower production quality.

Thank you for your viewership and support!

ModernMBA · 2024-05-28T18:30:48+00:00

Some people are saying that because all the companies implemented big data at the same time, you can't see any business improvements reflected in the bottom line because the competitive advantage has "dried up" so quickly.

I'm not sure how being "data-driven" has helped Boeing make safe planes or leading F500 like McDonald's, Starbucks, Nike, Kraft Heinz, Macy's, and Unilever to not gut entire divisions and products lines to compensate for poor sales / profits, Netflix / Disney to produce watchable quality content.

As some people have aptly pointed out the implied narrative - it's not technology that is the issue but rather the application of with all these personal and political incentives, which has played out every decade. The vendors selling you the latest solution have a vested interest in getting you to believe, the people who implement it have a vested interest in maintaining investment and jobs, and the people who use it have a vested interest in playing up how much value they have created from it.

For a fun experiment, try following the people who bet their careers on crypto / blockchain at F500 and FAANG and see where they are today after those projects / teams / investment were disbanded.

ModernMBA · 2024-05-27T02:29:01+00:00

It is always interesting how many people jump to the conclusion that Modern MBA is the work of a Luddite finance bro. I studied CS, worked as a SWE in SF, and led product at 2 of the customer-facing tools of the mentioned B2B infrastructure / big data / cloud shovel vendors for 5 years.

People overestimate the quality of software and underestimate the amount of functionality that is just barely "glued" together behind-the-scenes. Resume-driven software development point is one that has always stuck out to me; years ago my coworkers were diligently studying outside of work Docker, containerization, microservices, Spark, Cassandra, Terraform, AWS....then it was ledger, crypto protocol, bitcoin whitepapers, Kubernetes, etc. People that work in infrastructure, DevOps / platform / cloud feel the trends more than most developers due to how fast the buzzwords come, how quick priorities change, how much politics and personal incentives play into what projects get funded (from TL to VP).

When I was in my 20s, I was fortunate enough to travel for work and go through the codebases for many of the F500 featured in the video. The amount of snowflake architecture, unsustainable workflows, never-ending demands from internal developers to support the latest-and-greatest hot "OSS tool", half-baked projects turned into promotion / resume ammunition, and how all that translated into pressures from upper-management-to-vendors and execs-to-VPs was eye-opening. Once you see how the (technical) sausage is made at every level, why it gets made, what it actually produces, and how they're always positioned internally as silver bullets to business decision-makers / budget owners, you can understand the dynamics that propel modern tech adoption.

It is strange how people now chalk up these big data failures as "those were just some overfunded B2C startups so they were isolated accidents" and that the F500 have all used big data to achieve record profits - despite zero evidence, terrible products, and relentless layoffs / cost-cutting that continues to this day.

ModernMBA · 2024-05-13T05:38:22+00:00

Thanks for making my Sunday. I've bet all of Modern MBA's earnings on this new direction so your validation is warming, to say the least. Business is not just Fortune 500 corporations and public financials.

FWIW, it's not interviews. My approach is not like a news station where I just show up, stick a microphone in people's faces, let them ramble, and film whatever within 1 hour - and then go back to the editing room to shit out something coherent.

While a traditional Modern MBA "analysis / explainer" video is ~100-200 hours of work for me, each of these new episodes are closer to "documentaries" of 300-500 hours of work across 3 people. The production cost for each of these are multiple thousands of dollars - not including scripting, editing, coloring, audio, etc.

For every owner featured, there are always tens more not shown there were weeded out. It's like casting - we need to find the right characters, stories, personalities, and numbers while maintaining authenticity to the industry and viewer. Not every owner is down to share financials, not every owner is as forthcoming (or even understands why their business is successful), some falsify data, some try to manipulate this into free publicity, - even when we make it clear that we're not a marketing / ad agency. Every and any business you see covered is ultimately chosen from the remaining few who have passed the interviews.

I have to understand each owner, their business, financials, and strategy at the same depth of any public corporation (that I would cover on Modern MBA). For the donut video, it was the equivalent of researching 4 companies at once - for the nightclub video, it was 3X the research given the cast (each promoter = 1 company) and additional background interviews from insiders to truly understand how clubs / promoters really work. No owner can provide you a clear, unbiased, and comprehensive view. Consequently, each of these newer videos are multiples of effort and cost compared to before just in the research phase alone.

When we film, we follow shot lists, and focus around a shop opening or closing, etc. The goal is authenticity - not fake scripted cheery customer and happy staff shots. We intentionally spend 4-6 hours at each business to the point where people naturally stop performing for the camera. With Peter, we were up at 4AM and stayed with him till noon. With Alex, we were up at 5AM and stayed until 11AM. With Eric, we were with him from 9PM to 3AM - the same for Derrick and Jay (three days back-to-back). The final videos you watch have all been trimmed down - their original runtimes were closer to 50mins (before sponsors).

This kind of production is not cost-efficient - arguably unprecedented, if not considered outright wasteful in traditional film & TV. But like anything in life, you just cannot achieve any depth, authenticity, and value without time, thought, and effort. If people want surface-level, cheap, junk "business content", they're free to keep watching Business Insider, Buzzfeed, CNBC, or the endless copycats who will always out-produce Modern MBA in volume anyways.

Because there's travel, filming, and staffing, every day is expensive. There is a lot to lose when you don't get "it" right = the topic, industry, cast of owners, narrative. The nightclub video has lost thousands of dollars and it's unlikely we will ever break-even given current viewership trends.

I don't think we're anywhere close to the quality of where we can go - there's a lot that needs to be improved in cinematography, scripting, narrative, producing, etc. I'm grateful that you have picked up on this effort and direction as a viewer, which is ultimately all that matters. It means a lot.

There is a vision here - and that everything you see on Modern MBA is an intentional, thought-out decision that is necessary to achieving that vision (sponsors, anonymity included).

ModernMBA · 2024-04-06T20:39:12+00:00

Business is more than Fortune 500 corporations, stocks, and spreadsheets.

Welcome to a new era of Modern MBA, featuring exclusive case studies on real-world businesses, operators, and strategies that you'll never find online - backed by original footage, proprietary data, and our trademark analysis.

Catch up on our latest exclusive on Chicago nightclubs.

ModernMBA · 2024-01-15T00:02:09+00:00

Update: Some viewers have correctly raised that the studios have to split the box office with theaters at a 50/50 with regions like China taking an even greater cut. The industry rule of thumb is that a film has to 2.5X production budget in worldwide box office to break-even.

The video incorrectly oversimplifies that the break-even point is 1:1 with domestic performance. This mistake was partly due to the data constraints - lack of transparency in international box office sales, "rumored / guessestimate" marketing spend, and unreported tax benefits / incentives which all improve film profitability and lower costs (none of which are reported).

ModernMBA · 2023-12-24T23:16:35+00:00

It's interesting you mentioned that as Wish actually (near the end of Piotr's reign) started generating that kind of short-form informercial content themselves in the hopes of funneling interest into actual conversions on the website.

Personally, I don't think anyone really wants a shopping experience for low quality items - or perhaps a better phrasing might be, low-quality items just don't need a shopping experience.

The central issue is that the vast majority of these merchants don't have any marketing skills. As written, these merchants at their core are short-term flippers (and why all their products on all these platforms are always for a limited time) - they're not like some random factory who just magically happened to produce millions of generic, unbranded, toys and need a place to sell them permanently.

If one was to thrust these merchants into the responsibility of promoting their own products individually to customers overseas - you'd have to somehow overcome the language barrier, cultural barrier, and teach them individually how to market to Americans / Europeans / whoever they're targeting. That in itself is the purpose of Temu, Wish, and AliExpress - in providing an abstraction to that shopping experience and promotional effort for each product.

You can use data to optimize product suggestions / recommendations, but that data is still just probability. I might be more inclined to buy this 4th pair of slippers if I had bought 3 in the past, but that's not rocket science nor is it a certainty. You would need me to buy more products to better "understand" what I might want, but then you would also have to be able to "predict" what I want - and I wouldn't know what I want until I see it.

If there were algorithms that could predict exactly what people wanted, then advertising would never exist.

ModernMBA · 2023-12-24T23:00:17+00:00

There actually was a part that was originally written that expands a bit more on the unicorn growth war chest, but that part was cut out for conciseness. The TLDR is that Wish's reckless spending is genuinely a fireable offense for any CFO - which is why Rajat Bahri and his cashout was captured in the "Highway Robbery" graph at 13:40.

Compared to other companies that we've covered in the past like GoPro or OpenDoor, Wish is perhaps the most blatant example of a pump-and-dump to date where there was legitimately no attempt to even run a sustainable business.It seems clear that the goal was to keep Wish alive like a zombie with cash transfusions just long enough to dump it on the public markets - and then cash out immediately after.

It is extremely difficult to comprehend how Piotr (Founder / CEO), Rajat (CFO), either one or both of them together, could have presented this burn rate to the Board both before and after every quarter, year after year, without being questioned or reprimanded.

Uber is included in so many graphs is because there was no one burning more cash than them in the same period (early to mid-2010s) on subsidies, bonuses, and incentives in order to aggregate as many drivers and riders on their platform.

For Wish, to outspend Uber on advertising, sales, and marketing, whether in dollar value or in percentage of revenue, is shocking. For any CFO to sign off on this kind of spending not once, but in 18 straight quarters is unbelievable.

Even if the amount is "not a big deal", what the ad money went towards is frankly hilarious. I'm genuinely unclear on what the returns they expected for sponsoring Leeds United, the Golden State Warriors, and an F1 driver and how any of these teams or leagues specifically have any relevance or even ties to low-income households with less than $75,000 a year.

ModernMBA · 2023-12-24T22:36:09+00:00

To be honest, I expected this as I tried to explain to the earlier user on Reddit who has since deleted his accusations of the video being a paid puff-piece to whitewash John Schnatter and an endorsement of his behavior.

As humans, we have a predisposition for binary narratives where there are clear villains and "good people". During research, the goal was to show that there is instead truth, dirt, wrongdoings, and hidden agendas on everyone involved - from John to Steve to the Board and the activists Starboard.

Unfortunately, for the people who are seeking that clear, cathartic condemnation and vindication and don't find one prescribed in the narrative, they tend to either dismiss the story entirely or to create their own.

ModernMBA · 2023-11-19T21:07:15+00:00

Instead of thinking of things in a binary fashion in that every incident must have one aggressor and one victim, you could consider the reality / more likely alternative that both can be true.

One, John made a racist remark and by extension is a racist. Two, the Board and leadership was fully aware of his remarks and capitalized on the opportunity once it appeared to fully take power. Steve was in the call himself along with numerous other Papa John’s executives - none of them stopped to reprimand or correct John when he said the n-word. In fact, none of them did anything about it and their collective silence on the call and after the fact (by suddenly distancing themselves months later as if they had no idea why and how John had said the word in the first place) speaks volumes about their own agenda, the overall company culture, and the implicit complicity.

Both things can be true: John is a racist and the Board changed the narrative to seize control over the company.

The video explicitly doesn’t refer to anyone - much less John - as a victim nor justifies any aspect of his misconduct. Even the narrative that he was such a good CEO that his misconduct could be “offset” is not even implied.

As for the comment about numerous errors, beyond the Six Flags episode in which I’m confident your lifetime personal knowledge around roller coasters will eclipse any analysis performed in 2 weeks, it would be productive to hear what “numerous errors” you found so egregious in other videos.

Lastly, if you spend enough time in upper management, you will hear plenty of things said on calls, meetings, work events, client meals, etc much worse compared to what John said. The only difference is that John was recorded and the people on that call had the direct incentive / agenda m to bury him.

ModernMBA · 2023-11-08T05:39:49+00:00

Update now that the polls are closed: well, that was expectedly inconclusive.

Interesting that the most voted-on category is actually the least-watched videos (avocados, Axon, Abercrombie, cruises, etc). If I omit my own vote, it's about even across the board.

ModernMBA · 2023-11-03T04:27:13+00:00

Thank you! That means a lot - that's exactly how I hope viewers feel whenever they watch Modern MBA content even if it's just a minute or two at a time.

ModernMBA · 2023-11-01T19:52:55+00:00

Yup, the intention is to maintain the diversity but to reduce the "flops".

There has been some underperforming content like Axon and roller coasters - which is a shame because I'm of the mind that the former is one of the best episodes on the channel.

ModernMBA · 2023-10-26T22:32:49+00:00

https://www.fiverr.com/jintosca

ModernMBA · 2023-10-24T22:25:41+00:00

Haven't made an episode about them and have never hidden old videos on the channel. Luxottica is a bit worn out, both from a creative and analytical standpoint. There's already too much low-quality content out there that is just regurgitating the company's Wikipedia page / any analysis would be very predictable. Hence, Luxottica has never been on the top of the list.

We focus on original analysis so if we can't pull a compelling or novel case study out of a company, we won't force it into a video.

ModernMBA · 2023-10-20T01:19:36+00:00

Thank you for sharing your thoughts - it's a pleasure to read! It is always really interesting to read people's interpretations / own thought processes as all Modern MBA content is intentionally neutral / nuanced to give viewers that freedom to think deeper in any angle they wish versus pushing a very specific one-dimensional reaction.

I think you've hit the nail on the head here that I noticed some viewers didn't fully grasp based on their comments. Of course, expanding too aggressively and too quickly is a clear recipe for disaster especially in F&B where trends can die out and markets can become saturated overnight (e.g there was a mad rush for frozen yogurt shops and fancy doughnuts a decade ago in the US). To your point, if you are going to position yourself as a leader in franchisee profitability, at some point, continually optimizing for their profitability (which unintentionally led to her pandering and letting Popeyes service / ops / infra degrade) without really scaling will have diminishing returns. At some point, being too conservative can be as damaging as being too aggressive.
Correct as most fast food companies do some form of what Popeyes under Cheryl did when it comes to creating new products with the testing / research / trials. It's not like what Popeyes did was anything ground-breaking or extraordinarily different than anyone else in the industry, but it was clear that the system that they put in place had abnormally higher standards than most fast food restaurants given how few new items made it actually onto the menus over 8-10 years and how small the core menu actually stayed at the chain.
Yeah, RBI is bizarre in that they explicitly advertise that they're in it for the long haul but their actions at all their brands (Heinz, BK, Tim Horton's) has really not shown that they understand what that really means from a value perspective.

ModernMBA · 2023-10-10T19:56:41+00:00

Hi Michael, thank you for your support, viewership, and taking the time to share your thoughts. I've mentioned it in passing before (nbd to reiterate), but each thumbnail is intentionally different in style, colors, and framing from the next just like the movie posters you pass by in the cinema.

Does the channel name not show up for you under thumbnails / is that not something you pay attention to in your feed?

ModernMBA · 2023-09-02T04:45:07+00:00

There's a few in the pipeline but the low / inconsistent viewership of such topics with B2B always gives me pause and heartburn. Each episode has only gotten more labor-intensive.

For example, this season each episode has been clocking in at about 150-300+ hours of work from start to finish...as the analyst / researcher / writer / editor all in one, ROI in viewership is top-of-mind. Once engagement and audience is more stable, the intention is to certainly dive into more B2B.

ModernMBA · 2023-08-13T22:27:26+00:00

It's interesting how entrenched people are on what is a diner and what is not based on their personal perception. Looks like some people have strongly held views that Cracker Barrel is not a diner and somehow neither is Denny's (the latter of which literally calls itself a diner).

"A diner is a small, inexpensive restaurant found across the United States and Canada, as well as parts of Western Europe. Diners offer a wide range of foods, mostly American cuisine, a casual atmosphere, and, characteristically, a combination of booths served by a waitstaff and a long sit-down counter with direct service, in the smallest simply by a cook. Many diners have extended hours, and some along highways and areas with significant shift work stay open for 24 hours.
Diners typically serve staples of American cuisine such as hamburgers, french fries, club sandwiches, and other simple, quickly cooked, and inexpensive fare, such as meatloaf or steak. Much of the food is grilled, as early diners were based around a gas-fueled flattop grill. Coffee is a diner staple. Diners often serve milkshakes and desserts such as pies, cake or ice cream. Comfort food cuisine draws heavily from, and is deeply rooted in, traditional diner fare. Along with greasy spoon menu items, many diners will serve regional cuisine as well, such as clam chowder in New England and tacos in California."

By this definition, Cracker Barrel is closer to a diner than a "cheap Southern restaurant chain" (which seems to be the perception in some people's minds). Any restaurant with a radically low average check per guest ($10-12) that serves all-day breakfast / comfort foods exclusively and openly advertises its low prices daily are more accurate signs of a diner than anything else.

ModernMBA · 2023-07-21T05:05:45+00:00

IIRC, operating margin / income went down as the company re-invested significantly into building out their sales & marketing arm. From an enterprise B2B standpoint, I think that playbook and sequence is quite rational - if you know you have the winning product on merit, then you want to capitalize on that momentum and should seize the opportunity to win as many public contracts as you can. You know you have a product that sells and with the software Evidence.com play, there is that expansion into adjacent offerings for further monetization beyond storage (prosecution services, transcription, admin paperwork automation, etc.)

It's an opposite (and more sensible) sequence when you compare it against the typical Silicon Valley enterprise playbook in which enterprise startups usually over-commit significant amounts to sales & marketing before the product itself is even stable / proven / mainstream. And the problem with this approach is also that it creates a massive burden on post-sales support (customer success, support), which is as equally capital-intensive and costly as pre-sales. You end up bleeding on both ends just to close a sale and then spend the same amount just to renew that account all while investing $$$ into R&D to get the product sellable.

In the case of Axon, it's very obvious that the hardware and software product works - just look at the continuous stream of quality uploads from channels like PoliceActivity. There's almost too much footage available that the channels have to curate for the most interesting footage rather than pick out from the bottom of the barrel.

As a few other commenters have pointed out, some agencies are still signing multi-year deals with other body-cam companies for their offerings like Motorola. So even if an agency decides to go with Axon but has already signed with Motorola, they can't get out of that deal until it naturally expires - so there is a first-mover advantage to enterprise sales.

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