The one about boundaries
Onto the next letter
Friends,
I hope that all is well with you and yours, and that this e-mail finds you on a boat with shoddy connection, in the tropics, three months after I sent it.
In today’s newsletter, we linger slightly on A before moving on to B: strategic boundaries. Also, a health update, Korean TV, eggs, coffee, chocolate, AI, tariffs, inflation, and… …checks notes… …Skynet?
Now accepting keynotes for 25Q2-25Q4
Every year for the last decade or so, I have created three main presentation decks. For 2025, however, I have (for the first time) added a fourth due to popular demand. They are:
What to Do When You Don’t Know What to Do: How to turn change into a competitive advantage. (Based on the new book by the same name.)
Leadership in a Time of Change: How to steer an organization through a sea of uncertainty.
Resilient Retail: How to build a profitable retail business in the modern marketplace. (Based on the 2025 follow-up to the highly praised 2022 white paper The Gravity of e-Commerce.)
Artificial Intelligence in Practice: How to establish the real-world relevance of a new technology.
If you want to book me for your event, corporate speaking slot, or workshop, merely send me an email. To make sure I am available, please do so at your earliest convenience; my availability is limited and the schedule tends to fill up fast. More information may be found here.
A couple of updates before we go-go
Oof. What a week. My luck is hardly the stuff of legends at the moment.
After a(nother) couple of weeks of colds, the wife and I had at long last fully recovered. The gym finally beckoned. And then, on Sunday, we both got food poisoning.
I mean, for the sweet love of f…
Without going into details none wishes to read, having a cold with two small children is bad. Having a stomach bug with two small children is worse by orders of magnitude.
Thankfully, none of them got sick, but doing all the usual family stuff while suffering from cramps and a complete lack of energy due to not being able to keep anything down is not something I would wish upon anyone.
As an independent consultant, sick days are kind of a no-go, but this time I had no choice. I spent Monday mostly sleeping, Tuesday mostly sleeping, and Wednesday half sleeping, half watching Netflix.
I am currently watching a lot of Korean shows, and got stuck on Culinary Class Wars. Odd choice for someone suffering from food poisoning, perhaps, but there we go.
Best thing in it was American-Korean chef Edward Lee (Lee Kyun) whose personal journey, as someone of two cultures but without a full sense of belonging in either, was rather touching. Without going into spoiler territory, its eventual climax was beautiful and handled with far more dignity than most any Western show would have.
Squid Game season 2, by the way, was… …alright.
Moving on to markets.
The market vitals
A quick bullet point list of random thoughts this week, as my brain was too foggy to properly process financial news for most of it.
Inflation has once more picked up speed across global economies, much as we had predicted it would.
Food has increased broadly. Eggs, for instance, have risen more than 50% YoY due to bird flu scares, and that obviously carries into all sorts of other edible goods. However, it also plays into pricing and inventory. Grocers often sell eggs as a loss leader (i.e., they sell them at such a low price that they incur a loss but attract customers to purchase other products that make up for it). Simple maths follow.
Related: coffee is up 112% due to droughts and bad harvests; cocoa 85% for the same reason. The list goes on.
While annual factors play into the inflation equation (e.g., minimum wage increases, annual price hikes, etc.), things are not as good as many still, for some reason, appear to believe. I mean, the tariffs have not even kicked in yet.
Speaking of Trump’s tariffs, not only are they daft at the best of times, but may also end up having a direct (negative) effect on his country’s chances of AI supremacy. In a recent speech, The Orange One declared that he “would impose tariffs of 25%, 50%, or even 100% on chip imports to increase domestic semiconductor manufacturing”. While that perhaps sounds great for the jolly old folks without even the most basic understanding of the relevant processes, the reality, to quote Tae Kim, is that advanced chip factories cannot be created out of thin air.
According to industry estimates, it takes roughly four years to build a new production facility, at a cost somewhere between $10B-$20B. And even that relies on the assumption that one has, or is able to secure, the required technical expertise. As we know from previous newsletters, the only firm that has really proven able to pull it off thus far is Taiwan Semiconductor Manufacturing; it is for this reason that the firm owns around 90% of the world market in advanced chips and produces 100% of the most advanced ones. To expect a dramatic competence shift more or less overnight is not even naïve. It is profoundly stupid.
Adding tariffs to the current equation will, in other words, have one obvious consequence: the short-term costs will go up accordingly. And given the size of the increases and the already astronomical capex demands, well, let us just say that the Stargate Project might just blow up before it gets off the ground.
If the tariffs indeed materialize, which of course is not a given.
Jerome Powell spoke to Congress and delivered an expected message: the US economy is doing well, which means the Fed can take its time to decide when and whether to lower interest rates. Given inflation, it is a sensible approach. But it does also go against Trump’s wishes. Stay tuned.
Very quietly, Google declared that its AI policies no longer prevent it from working on weapons. Make of that what you will.
Moving on.
From A to B
Drawing lines in the sand
Last week, we discussed strategic aspirations and broke down how they are different to missions, visions, and organizational goals. Today, we are going to start digging into how we might constrain them and begin to go from something generic to something specific.