Tag Archives: business

Paying pharmaceutical firms for capacity is problematic

Castillo et al. 2021 (doi:10.1126/science.abg0889) make many valid points, e.g., vaccine production should be greatly expanded using taxpayer money because the quicker recovery from the pandemic more than pays for the expansion. Castillo et al. also suggest paying pharmaceutical manufacturers for the capacity they install instead of the quantity they produce. The reasoning of the authors is that producers are delaying installing capacity and the delivery of their promised vaccine quantities to save costs and to supply higher-paying buyers first, because the penalties for delaying are small. Producers refuse to sign contracts with larger penalties.

What the authors do not mention is that the same problems occur when paying for capacity. In addition, the capacity needs to be monitored, which is more difficult than checking the delivered quantity. Before large-scale production, how to detect the „Potemkin capacity” of installing cheap production lines unsuitable for large quantities? The manufacturer may later simply claim technical glitches when the production line does not work. Effective penalties are needed, which in turn requires motivating the producer to sign a contract containing these, just like for a quantity contract.

Paying in advance for capacity before the vaccine is proven to work insures firms against the risk of failure, as Castillo et al. say. The problem is that such advance payment also attracts swindlers who promise a miracle cure and then run with the money – there is adverse selection in who enters the government’s capacity contract scheme. Thus capacity contracts should be restricted to firms with a good established reputation. However, vaccines from innovative entrants may also be needed, which suggests continuing to use quantity contracts at least for some firms. If the law requires treating firms equally, then they should all be offered a similar contract.

Clock and ads projected on the ceiling

At a public swimming pool, the clocks on the wall are usually small, far and hard to see through droplet-covered goggles. The clock is relevant for planning to finish by a certain time and for tracking one’s speed (lap time). A solution is to use a projector to show a large clock on the ceiling, or to draw the numbers on the ceiling with a laser – essentially a programmed pointer.

The ceiling is also an untapped advertising display space, not just at swimming pools and gyms, but in any building. Ceiling ads are more valuable in swimming pools, gyms and yoga studios than in most other structures, because people doing backstroke, bench press or fish pose are facing the ceiling, which is not the case in a majority of buildings.

The floor is also mostly unused ad space. Projecting ads on the floor is not as useful as the ceiling, because people walking through the projector beam block the display.

Mugs, pens and USB sticks as advertisements

Several universities I have visited give free mugs to seminar speakers as advertisements for themselves. Similar branded objects (pens, USB sticks, T-shirts, baseball caps) are handed out by firms and political campaigns as part of their marketing.

The idea of giving people practical objects instead of flyers, junk mail or banners is to make the recipients use these objects (as opposed to throwing these away or storing them at the back of a closet), preferably in a public setting, and thus increase the visibility of the advertiser. For this, the more usable the handout, the better.

Unfortunately, the people ordering these objects in bulk and paying for the brand logo to be printed on these are busy administrators who do not connect the overall purpose the marketing campaign to the properties of the objects. Specifically, the mugs should have a large handle that lets more than two fingers hold it, the mug should be short with a wide mouth for easy filling and washing, and should not be too fragile.

Pens should write well and be ergonomical, not angular or too narrow. I have seen branded pens violating all these suggestions. For example, the Australian National University pens are of flimsy plastic, create ink splotches and the ink runs out quickly.

The USB sticks handed out by the University of Queensland had a metal cover which increased the USB drive’s bulk and scratchiness. Also, the USB was wide and thick, making it impossible to plug in side by side with another USB. The small capacity of the USB was also behind the times.

To advertise with an object, it would make sense to print the advertiser’s name and other relevant information in large readable font on the object. The logo is not useful unless it is already widely known by the target audience and associated with the advertiser. The readability suggestion is violated by the Singapore Management University’s mug, which has SMU written on it in complicated calligraphic script that is difficult to decipher even for someone who knows what the abbreviation SMU means.

For people to develop a positive view of the advertiser, the object should not seem too cheap or bad quality. By contrast, most free T-shirts are the cheapest ones that could be bought wholesale, made of the most threadbare and transparent cotton, which discourages their use.

Ventilation switch that detects odours

Many homes in the US have a switch to turn on the ventilation in a toilet or bathroom. Also, all kitchen range hoods and laboratory fume hoods I have seen must be manually switched on and off. Of course the ventilation could be run continuously, but this would be noisy, waste electricity and remove warm air (or cool air-conditioned air in hot weather) from the building. For toilets, bathrooms and kitchens, the main reason to ventilate the room is only temporary – removing odour or humidity.

An untapped business opportunity is to produce a switch that detects odours or humidity and turns on the ventilation just long enough to remove these. Humidity detection is easiest – just connect a hygrometer to the switch. Detecting smelly gases such as grease vapour in the kitchen, hydrogen sulfide, methanethiol and dimethyl sulfide in the toilet may require spectrometry or a chemical reaction. Laboratory gases are probably the most difficult to automatically detect due to their variety.

Parking space availability detection from the air

Much fuel and time is wasted by drivers zigzagging through a parking lot looking for an empty spot. Some parking garages have automated systems for detecting which spaces are empty and directing drivers to these using electronic displays or coloured lights on the ceiling. Drivers of course prefer to spend less time looking for a space and to find places closer to the exit, so providing availability information gives a commercial parking building a competitive advantage and reduces traffic and pollution inside it. The same availability information would be helpful for outdoor parking lots, including the tops of garages that are open to the sky.

A business opportunity is to develop an app that uses either satellite images or cameras on drones or surrounding structures (highrises or streetlights) to detect empty parking spaces and direct the drivers to these. The cheapest black and white security camera is sufficient to distinguish a car from an empty rectangle of asphalt. Even at the busiest times, such as the peak shopping hours on Saturday afternoon, the parking availability info only needs to be updated about once every 30 seconds to be maximally useful. The only hurdle for this system is the placement of the cameras, because buying two satellite photos per minute for every parking lot may be expensive for the app provider. Drones may not be permitted over urban areas. The owners of the structures surrounding the parking lot may ask for payment to allow camera installation on their property. Of course, permissions should not be a problem if the surrounding buildings are retail establishments who profit from more customers parking closer to them, but the upper floors of tall buildings are typically offices or residential spaces.

Restaurant learning what food people like

A restaurant chain can collect data on what food people like by examining the plates collected from the tables – the more leftovers given the size of the dish, the less popular the food. However, looking at the plates and entering the data takes time. It would be much faster to automate the process. For example, there could be a small conveyor belt for dirty dishes brought back from the eating area. The dishes would be weighed to record the amount of leftovers before scraping and washing. To detect which food was left over, one option is that a camera above the belt photographs the leftovers and then a computer tries to identify the food. This is a complicated machine vision and machine learning problem. A simpler option is to serve different dishes on plates with different shapes, or patterns such as lines and circles that are easily distinguished by computer. Then the plate identifies the dish for the camera, similarly to colour-coded plates identifying the price at sushi-train restaurants.
Even less costly in terms of computation (and without any camera requirement) would be to put RFID tags or other remote-id technology in plates. Each dish would have to be served on a plate with a dish-specific RFID, so the returned plates can be exactly matched to the food served on them. Each plate becomes more costly, but not by much, because RFID tags are cheap.
A single restaurant could also collect data on leftovers, but a chain of restaurants would get a larger dataset faster, thus useful information sooner on which dishes to keep and which to discontinue.

App to measure road quality

The accelerometers in phones can detect vibrations, such as when the car that the phone is in drives through a pothole. The GPS in the phone can detect the location and speed of the car. An app that connects the jolt, location and speed (and detects whether the phone is in a moving car based on its past speed and location) can automatically measure the quality of the road. The resulting data can be automatically uploaded to a database to create an almost real-time map of road quality. The same detection and reporting would work for bike paths.
Perhaps such an app has already been created, but if not, then it would complement map software nicely. Drivers and cyclists are interested in the quality of the roads as well as the route, time and distance of getting to the destination. Map software already provides congestion data and takes traffic density into account when predicting arrival time at a destination. Road quality data would help drivers select routes to minimise damage to vehicles (and the resulting maintenance cost) and to sensitive cargo. This would be useful to trucking and delivery companies, and ambulances.
A less direct use of data on road quality collected by the app is in evaluating the level of local public services provided (one aspect of the quality of local government). Municipalities with the same climate, soil and traffic density with worse roads are probably less well run. For developing countries where data on governance quality and spending is difficult to get, road quality may be a useful proxy. The public services are correlated with the wealth of a region, so road quality is also a proxy for poverty.

A residential bike shop business model

There is an empty market niche for a neighbourhood mechanic who accepts a bike in the evening and returns it in the morning. The demand is concentrated almost entirely outside business hours – evening, early morning, weekend. Opening the residential neighbourhood shop at those times would target cyclists whose bike breaks down on the commute from work to home. An overnight fix means they would not miss their next morning’s ride and would not have to haul the bike to a city shop by some other transportation.

Currently the neighbourhood shops I have seen are open during regular business hours, perhaps close a little later and open also on the weekend. I have not checked, but they must be almost customerless in the daytime on weekdays. People go to work or school. I doubt there are enough stay-at-homes who bike enough to require a mechanic’s services frequently. People in the city may visit a city bike shop at lunch, but not a residential neighbourhood one. The local shops seem to be open exactly when the customers are not there.

Fixing a bike takes time, so cyclists leave it in the shop and come back later. It is important which time of the day the bike spends at the mechanic’s. Customers who use their bike a lot and thus need frequent service want the bike available and working mainly during rush hours, because many of them commute with it. A city bike shop open during business hours can accept a bike in the morning, fix it and give it back by the end of the workday. For the commuter, the bike is available both morning and evening. The shop does not need to store the bike overnight, so does not need to rent a large space, saving costs. In a suburban shop, customers could leave their bike one evening and pick it up the next evening, but they could not use their bike for one day’s commute then.

Load sharing between city and suburban bike shops is possible. Mechanics can work in several shops at different times. They can shift to accommodate peak demand, the timing of which differs by shop. The residential neighbourhood shop would get the most customers on the weekend or outside business hours. The city centre would get more on weekdays in the daytime (the cyclists whose bike breaks down on the way to work).