In a tech-saturated region like ours, one can be tricked into thinking startup tropes like “fail fast” and “iterate often” are applicable to all businesses. But a challenge facing Boeing illustrates that in some industries, the decision-making process needs to be a bit more calculated.
At issue is the success of Airbus’ A321neo, a single-aisle jet that’s larger than Boeing’s 737 line. To compete with the A321, Boeing has a big decision to make: Does it make a bigger 737 MAX, or does it build a brand new plane, the 797, from scratch?
Rolling out a new plane isn’t like rolling out a new update to Windows 10. “These are questions that involve multibillion-dollar decisions, they involve questions about where you build this airplane,” Steven Udvar-Hazy, CEO of Air Lease Corp., told The Seattle Times.
If Boeing goes with a bigger 737, that would be a coup for the Eastside, as that plane would likely be built in Renton. But if Boeing starts a new production line for a brand-new plane, then it could be another opportunity for the company to diversify its operations beyond the Puget Sound. Production of the 797 could be another incentive the company dangles in front of South Carolina to keep workers there from unionizing, or it could be a foray into China on the heels of the 737 completion center Boeing is building there.
Either way, Boeing is about to make a decision with billions at stake over a yearslong period. “Fail fast” isn’t an option — with Airbus’ momentum and missing out on an $80 billion bomber contract, Boeing has to get this call right.
An e-commerce case for Costco
A year ago, Costco CFO Richard Galanti told me about his company’s wait-and-see approach to millennials. The logic is that, while some millennials have eschewed traditional retail mores, generations typically mimic those that came before them as they age.
But Galanti seems a bit more worried now about the rise of e-commerce and delivery services, and Bloomberg’s Shelly Banjo argues it’s time for the company to take a more serious look at Web-based sales. To be fair, Costco is a big online retailer — its website pulls in about $5 billion annually — but the vast majority of its sales take place in warehouses, most of which are in suburban locales that require a car trip. Banjo writes that Costco needs to be considering other sales avenues because growth in membership sales — the company’s bread and butter — is slowing, and Costco soon will be giving its low-level employees a raise.
Consider Costco a demographic bellwether. If the company is able to continue business as usual, that means millennials weren’t as disruptive as some hyperbolic marketers made them out to be. But if the generation does decide to ditch cars and spend most of their lives in urban areas far from Costco warehouses, then the Issaquah firm will have to make some major changes to its business plan.
Microsoft: Everything’s a gaming device
For the better part of the last two decades, consoles were the go-to devices for gaming. Sony’s PlayStation and Microsoft’s Xbox (sorry, Nintendo) emerged as the dominant players in that space, and PlayStation (sorry, Microsoft) reigns supreme.
But with Windows 10 being the backbone for all Microsoft devices, Xbox chief Phil Spencer is now telling gamers and game developers to think of Microsoft as maker of a gaming ecosystem, not just the Xbox console.
In the near term, this might mean more games designed for the PC. With Windows 10, certain games can be streamed across devices, and Spencer’s declaration is one way to show off Windows 10’s broader capabilities.
But PlayStation is right on Microsoft’s heels. Just days after Spencer’s comments, PlayStation announced its next firmware update will allow PC streaming. And both companies will be entering the virtual-reality gaming market this year.
Elsewhere on the Web
A Chinese developer is planning four towers in downtown Bellevue.
Boeing built a lavatory that zaps germs with UV light.
Many are touting the support Apple is receiving from Microsoft, Google, Facebook, and other tech companies in its fight with the FBI, but did anybody really expect them to support the FBI?
I’ll leave you with Steve Ballmer, elite athlete: