Either watch the video for “pure” listening practice, or go through the questions / information below to develop ideas prior to watching.

Why is it important to target what innovation is?

How many types of innovations do you think there are?

How can an innovation create net growth / jobs?

What kind of innovation can help prevent your margins from falling?

What innovations eliminate jobs and create free cash flow?

Do you carefully husband the use of all your business inputs?

Which of the following are most relevant to you in your company?

  • Return on net assets
  • return on capital employed
  • internal rate of return
  • earnings per share
  • gross margin percentage
  • economic value added
  • marginal cost / revenue
  • debt / equity
  • net value present
  • revenue per employee

How long does it usually take your company’s investments to pay off?

What jobs does a modern online newspaper like the New York Times try and help a customer get done?

Why is the New York Times losing salience / going off a cliff?

Read this example of the “Law of Conservation” then look at the pictoral examples and answer the question: How can your company modularize or reap rewards from the modularization of integrated segments in your sphere?

For example, inside the bank there is the actual financial management system. In front of it are let’s say, ATMs. The relationship between them is interdependent meaning, no other ATMs can communicate with that banks financial system (except for the networks like STAR which is an abstraction and comes with a fee). The interface between the customer and the ATM is modular meaning, all ATMs pretty much work the same way. A bank customer comfortable using “an” ATM is probably comfortable using “any” ATM and would feel at ease moving their money to another bank and using their ATM (or teller, loan officer, etc.). What companies like Paypal have done, using them as representative of an online ATM, is flip the model around. In their world, the interface between customer and Paypal is interdependent (proprietary) and the interface between Paypal and the banks, representing the financial management system, is modular meaning Paypal can interact with many banks in the same way.

pictures below from https://stratechery.com/2015/netflix-and-the-conservation-of-attractive-profits/

https://stratechery.com/2015/netflix-and-the-conservation-of-attractive-profits/