The Everything Sunday Digest

Hello and happy Sunday! 

We’re trying something new this week with the Sunday Digest, with a more streamlined design and generous summaries of each post. That way even if you don’t have time to read the full essays, you can still get something valuable out of it!

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What we published this week

We published four new articles this week totaling ~8,000 words. We dove into sugar ads from the ‘70s, new critiques of disruption theory, the end of accounting, and the financials of the New York Times.

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Divinations

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🔮 Oatly: The New Coke

In a guest post, Nat Eliason dives into Oatly’s deceptive marketing, which plays on increasing consumer awareness of health and the environmental impact of industrial animal agriculture. Although the company suggests that oat milk is healthier and “made for humans,” unlike cow’s milk, the addition of sugar and vegetable oil actually makes it worse than whole milk.

Nat compares Oatly’s marketing to historical examples like sugar and tobacco to emphasize the similarity in obfuscation strategies:

1. Obscure the Truth: Make vague claims that make consumers feel good.
2. Create Confusion: Fund research showing the harmful ingredients are healthy, or at least not provably harmful.
3. Strawman the Disagreements: When people criticize the ingredients or health claims, strawman their arguments by focusing on the most easily dismissed criticisms, or by pointing the finger elsewhere. (2,774 words)

From the Divinations archives — “PepsiCo goes DTC.”🔒 Nathan and Adam assess Pepsi’s new DTC strategy for snacks, a pivot accelerated by the pandemic. They suggest that executing well on marketing, user experience, and customer service as well as building on existing brand loyalty will allow PepsiCo to compete with existing online retailers. (1,504 words)

🔮 Disrupting Disruption: Alex Danco

Nathan’s series on challenges to Clay Christensen’s theory of disruption continues! This week, he focuses on Alex Danco, former VC and current executive at Shopify, who has written two essays critiquing the theory.

The first is more compelling, and argues that Apple has avoided disruption because they systematically and strategically raise customer expectations. Remember, you can only get disrupted when your product’s performance exceeds what customers require. Apple causes their customers to require more by expanding their concept of what is possible. Their first versions barely meet the expectations they create, but this actually gives them room to improve over time.

The second is less compelling, and argues that Clay Christensen failed to predict the success of the iPhone because he was more focused on individual companies that look sustaining, rather than ecosystems of companies that collectively are disruptive, even if the individual members of the ecosystem themselves look sustaining. The example Danco gives for this is the mobile photography ecosystem, which was disruptive to stand-alone cameras and photo printing. But the idea of disruptive ecosystems of companies is already contained in disruption theory, and Christensen even coined the term “value network” to describe it. And, to be clear, the iPhone really was a sustaining innovation relative to previous smartphones. So how did they succeed? Perhaps Apple’s strengths as a consumer PC company gave them more incumbency advantages than RIM and Nokia had, even though they were already in the smartphone market and Apple was not. (2,178 words)

🔮 Means of Creation #5: Nathan Barry

Nathan and Li Jin spoke with Nathan Barry, co-founder of ConvertKit, an email marketing platform for creators. The three discussed ConvertKit’s growth to 56 employees and whether newsletters, books, or courses are the fastest way for creators to turn their passions into a livelihood. Video coming soon!