What happened to Pippin / Rent the Backyard

In 2018 I co-founded Pippin, a housing factory startup, and our backyard home (ADU) brand Rent the Backyard. Our goal was to use California’s new ADU laws to build a lot of homes quickly by helping homeowners make the most of their unused land. After 4 years, 10 homes built, and a $10m+ contracted revenue annual run rate, we announced that we’re shutting down.

When I founded this startup, I thought my co-founder and the rest of our team could do anything. This carried us through all sorts of obstacles — finding the first few customers who trusted us to build them a new home, convincing our first few employees to leave stable work for a shot at greater impact, and opening our own factory to deliver those first homes.

Starting a company means you have to believe in yourself to the extent that you can solve any problem. This belief carries you through a lot of challenges — expected and unexpected. You fall, you learn, you grow, and you fix what you can. But sometimes, you can’t fix things fast enough to keep yourself alive.

I learned many difficult lessons from this startup, and shutting it down has been painful. I hope these reflections can help if you’re creating something similar.

Rent the Backyard was made up of me, my co-founder Brian, and many other people. This post is my perspective on what transpired with the business. I may refer to “we” or “our” in a company sense, but these are my personal reflections.

How we died.

Our company died from not reaching a profitable scale and having a fragile cash cycle. Below, I’ll share the lessons I learned from navigating these two issues.

Not reaching profitable scale.

Our company’s main costs were to run an ADU factory and invest in research and development. The factory had high fixed costs it struggled to cover with ADU production. This meant that nearly all research and development costs increased our burn.

Lesson 1: Do many repetitions to improve quickly.

While we saw continuous improvements at the factory, our rate of improvement was limited by our small size. Since our assembly line had only six stations, each worker had to learn how to build 1/6 of a home. Since a lot of work was done at each step, homes did not move down the production line very often. Workers were not very specialized and did not get the chance to practice each step very often to help them improve. This meant a lot of the wages we paid were for on-the-job training. We anticipated specialization and its benefits would come as we increased in size but the lack of specialization and sufficiently skilled labor limited the rate we could expand profitable production.

Lesson 2: Pay for the right expertise when you start.

We made a very active choice to hire labor that was much less skilled than the typical construction site. That was a mistake. We believed that on an assembly line, workers with limited skills could be quickly trained and perform just as well as workers who would cost twice as much to employ. In hindsight, we should have taken the short-term more painful and expensive path of hiring experienced leaders for each trade or station. Building our assembly line by starting with more experienced tradespeople would have helped us more quickly reach the scale required to be profitable and would have helped us grow into our long-term vision for more cost-effective labor.

Lesson 3: Consider existing frameworks. But don’t be dogmatic.

Many companies starting in the physical world like to follow what worked for Tesla:

1. Build [luxury] sports car
2. Use that money to build an affordable car
3. Use that money to build an even more affordable car …

This is an appealing and tested path. Focusing on a luxury product with higher margins decreases the scale needed to operate profitably, keeps you focused on building the best possible product, and confers a halo of quality and desirability when you build into a more accessible market.

Unfortunately, we believed (still do) that this wouldn’t work for homebuilding because “luxury” homes are generally defined by the level everything can be customized.

Since factories that produce “luxury homes” build to and are designed to accommodate a broad range of customizations, we believed this path would lead to a local optimization — making custom homes accessible to more people. This wasn’t very compelling to us. We wanted to make a quality home accessible to everyone.

Along with these concerns, we also worried about the cyclical nature of custom homebuilding (amplified by both its extreme cost and the bespoke nature of the product). Many smart, ambitious, and well-funded companies have tried to create homebuilding factories since before the Second World War. While many of these attempts were aimed at the luxury market, the companies that have survived the longest — among them Berkshire Hathaway’s Clayton Homes — have been aimed at the lowest end of the market building mobile homes.

We compromised in the middle of the market selling to cash-flow-focused buyers who would let us build the same type of simple, quality home very efficiently over and over. With a much simpler manufacturing process, we traded higher margins for a clear path to higher production rates. This worked pretty well — our customers were very easy to service relative to the size of their purchases.

Fragile cash cycle.

Our sales were far greater than the money we raised from investors. It was exciting that we were selling units so fast but it became very difficult to order items with long lead times without credit facilities or more equity financing. We began to make large purchases of materials to ensure production wouldn’t stop and to limit the effect inflation had on our margins. This pulled cash out of the company and destabilized our financial position.

Lesson 4: Selling something you can’t deliver for a while is dangerous.

We worked hard to maintain a backlog of orders for the factory to fulfill. Having a lot of sales and accompanying customer deadlines to meet was exciting and motivating for the whole company. Unfortunately, selling so many homes in advance began to compress our margins as the price of materials increased between the time we sold a home and built a home. While we were able to collect some money from customers when they purchased a home, most customers took months to finalize the financing that enabled them to make such a large purchase.

Some materials like cross-laminated timber panels, rigid-board insulation, and appliances increased by as much as 30% and our unit labor costs increased by nearly 50% over the two years we ran our factory.

Lesson 5: Overcapitalize companies that move atoms instead of bits. Budget as if you will never raise money (even debt) again.

When we raised our Seed Round, we projected that we would need much less money than we actually did. Raising too little money led to a low margin for error and an extremely high hurdle rate for investments and experiments. We weren’t able to afford many of the most promising ideas like buying an overhead crane or hiring specialists for each building trade because we undercapitalized the company.

Once we realized this, we repeatedly sought and were turned down for venture debt, inventory financing, accounts receivable financing, and other debt facilities. We also spent considerable time raising equity financing but were far from most investors’ typical focus.

Lesson 5a: Be mindful of where the money you have needs to go.

As we became more concerned about the company’s financial situation, we started to model what a shutdown would cost and what our obligations to return customers’ progress payments would be. We quickly realized that it is very expensive to close a factory and that most of the money we had in our account would need to be returned to our customers. Our customers’ nearly always borrowed money against the value of their homes to pay us. If we were unable to deliver them a home, they would lose all of the money they borrowed and entrusted to our company.

Knowing our “shutdown cost” helped us to better understand our cash position and to make a more informed decision to shut down. I am proud to share that all of Rent the Backyard’s customers either received their home from us or received a 100% refund.

Some shutdown costs you may have:

• customers: refunds, ongoing customer service costs
• your team: severance, paying a small team to run a tidy shutdown process
• anything the founders or other employees have personally guaranteed: leases, credit cards, etc
• anything the corporate veil can be pierced to collect on: unpaid wages, tax liabilities, etc

The amount you would need to shut down will probably be much more than you would guess.

Lesson 6: Planning is often the highest leverage work.

These points of failure were exacerbated by not having a more specific plan for how we would open and run a profitable factory.

We were very eager to “move fast and break things” by starting to build as quickly as possible. We soon learned that opening a factory is not as iterative as building a software product.

We spent significant time discovering industry best practices from first principles (instead of just paying a specialized consultant) on our way to inventing new ones that had the opportunity to change the way housing is built.

When designing something to be built multiple times, any complexity eliminated during the planning phase will result in a compounding advantage. The same applies to organizing a factory to reduce unnecessary work.

I have a lot more thoughts on this — if you’re planning to open a homebuilding factory I’m happy to talk :)

Goodbye, and thank you.

It’s been an incredible journey to get to this point. We saw a giant problem, iterated for a way to approach it, found one of the most interesting and underdeveloped markets in the world, and built a business with an annual run rate of over $10 million, with the opportunity to bring that to tens of millions in the years ahead.

While the homes we built around the San Francisco Bay Area are a legacy smaller than what we hoped it would be, they are a legacy others can follow, and the impact they have on their owners, tenants, and communities will last for generations.

We are so grateful to have had so many people believe in us: family who hosted us, friends who shared our dreams over dinner, customers who believed that our product would change their lives, the team who poured themselves into our collective work, and the amazing investors who saw our vision for the future and put their hard-earned money behind it.

Thank you all. I am forever grateful.

Spencer

Inspired by:

Jason Crawford @ Fieldbook
Abhi & Rashid @ Hutsy
Countless others in the YC and greater startup community who contributed the lessons they learned from their companys’ failures.

Thanks to Bret Burleigh, Brian Bakerman, and Phoebe Yao for reading drafts of this.

Gramps

My great-grandfather died last week. He was just shy of 100 years old. Gramps lived up in Otis Maine — a few miles from Acadia National Park. When I was growing up, Gramps would often stay a few days with my family on trips to visit his sister. We’d walk down into the creek near my house and while my brother and I fished, Gramps would tell us stories about growing up in not-so-rural anymore Connecticut and carve us bows and arrows from saplings.

I wrote a piece back in high school that I planned to share on Gramps’ 100th birthday. He didn’t quite make it but he was ready to go.

I feel lucky to have met four of my great-grandparents and to have known one of them well.

I’ll miss you Gramps.

—

Gramps’ black leather loafers step silently across the old asphalt of the road, and the end of his checkered red scarf wraps itself further around his deep coffee overcoat in the light breeze. His thin white hair whips in the breeze that blows down the hilly half plowed road occasionally covering his whiskey rectangular glasses. He’s on his daily walk, but today it’s a little different.

It’s Christmas time and Gramps is spending some time with his granddaughter and great-grandchildren. He may be two hundred miles south of his home in Otis, Maine but that won’t stop him from taking his daily walk to take in the fresh air and the sunshine.

With family dog in tow, Gramps and his great-granddaughter set out. They move briskly, the dog stopping often to absorb some incredible stimulant of the olefactory that to us is just dirt. At one of these spots, the foolish dog stops abruptly in front of Gramps, and he nearly trips and falls onto the cold asphalt the dog is so enamored of. Gramps catches himself; he’s fast on his feet. Casually leaning over, Gramps pats the dog on the head and takes one of her ears between his worn forefinger and thumb.

“Get along then.”

Gramps pats her once more on her head and they’re off, dog’s tail wagging as she runs ahead. Gramps likes dogs, he’s had one most of his life, starting with the first springer spaniel he bought alongside his first shotgun when he was twelve.

“The sporting good store didn’t want to sell me the gun because they said I was too young, so my older sister went in there and bought it for me.”

Spending a good part of his boyhood in the forest outside his boyhood home in Danbury Connecticut, Charles Malarik—or as the family calls him, Gramps—had collies and springer spaniels for both hunting and companionship.

“I like them as a companion first of all, and I always like springers because they always stay right close with you … I’ve had eight or ten [dogs] maybe [over my life].”

Gramps bends over and frees the dog from her leash as they enter the house. She bounds up the stairs after Gramps’ great-granddaughter. Gramps walks up the short flight of stairs to the kitchen and settles into a dark upholstered chair. Sometimes he likes to just sit and watch his world—the family—move. Today he’s taking it in with black tea—his favorite drink. He doesn’t seem to be bothered by the houses’ chaotic din and the constant movement of the family from one room to the next.

After all, chaos was something Gramps became accustomed to early in life. As a Jeep driver in the Second World War, he became intimately connected to chaos.

Drafted into the Army after the bombing of Pearl Harbor, Gramps and forty or so other young men from Danbury were loaded onto a school bus and shipped to Fort Devens in Massachusetts for a physical and to be assigned to a particular branch. Sent to Europe to fight the Nazis as an infantryman, Gramps disliked the heavy pack associated with the job and applied to be a Jeep driver after seeing an ad. Scoring well on a written exam, he was reassigned and deployed to Cherbourg, France where he ferried platoon commanders between headquarters and the line. Advancing all the way to the Elb River on the outskirts of Berlin, Gramps was on his third Jeep at the end of the war after the previous two were destroyed.

“I would be driving along and then I’d get caught in a [barrage of]… artillery, you could hear it whistling a little, but the mortars, you don’t hear them. All of a sudden they’re exploding. I would dive out of the Jeep and it’d roll in a ditch or roll down the road a little ways and when [the artillery barrage] stopped I would get back in and get out of there.”

The intersections were the most dangerous.

“The Germans would target [those] as there’d be more traffic there. When I would get through one of them, I always felt relieved.”

Gramps’ granddaughter chops tomatoes on the kitchen’s cool granite island. His great-granddaughter throws a toy for the dog near where Gramps sits in the living room, sipping his tea, absorbing the family’s lives from his relaxing coffee armchair. The great-granddaughter, looking for new amusement, pulls a Parcheesi board from a tall oak shelf and sets it up on the long maple kitchen table. She calls her mother, her brother and Gramps to the table as she sets the bright tiger, elephant, oxen and camel pieces in their home spaces. Gramps listens as his great-grandson explains the rules. The game begins, and the pieces start their journey around the board. Gramps just watches and takes the suggestions his great-grandchildren offer him. It isn’t too bad of a strategy as Gramps finishes second, but he’s rather indifferent to this. His granddaughter offers him another cup of tea but he’s “good” for now.

Gramps is always “fine” or “good”—he’s a very agreeable man. He enjoys eating out and being with his family but goes along with most whatever else his family does. That’s what brought him north after the war. That’s how he came to work for Mr. L. L. Bean.
After his time in the service, Gramps, tired of Connecticut’s cold winters, decided to move west to California. Taking a southerly route, Gramps stopped in Dallas to stay with a friend.
“I never left there, I liked the place. It was a fun town.”

Having only been previously employed as a tree surgeon and wanting to try something new, Gramps enrolled in electronics school.

That’s where he met his wife, Elizabeth (known by everyone as Ted).

“…I met her [while I was] going to electronics school at nights. I made friends with another one of the men that was going there, and his wife worked in a restaurant as a waitress and [Ted] was a hostess there. She knew that [Ted] didn’t have any boyfriend or anything, so she introduced us. That’s how we got together.”

It was she who brought Gramps to Maine and to work for Mr. L.L. Bean.

“[Her best characteristic] was her personality. She could get mad, but she would laugh quite easily. She was easy to get along with.” Others would say differently, including her granddaughter and several employers.

“We were living in Texas, [I was working at Love Field rewiring airplanes] and she wanted to move, so she wrote to [Mr.] L.L. Bean, [and] they hired us. It didn’t amount to much at the beginning, but Ted was a smart person and they hired her as a housekeeper. I was his chauffeur, and I worked up there in the store as a clerk.”

Gramps and Mr. Bean quickly became friends as they bonded over their love of the outdoors. Mr. Bean showed Gramps brooks where he could fish, and they went hunting together in northern Maine. Each year when Mr. Bean went to Florida during the winter, he would rent a boat and Gramps would accompany him deep sea fishing. After a couple of years, Mr. Bean gave Gramps a Smith and Wesson .22 that he had carried with him to shoot partridges when he had been hunting.

“[Mr. Bean] had a two car garage, and there was a storage area up above there, and that’s where the gun was. When he was done with hunting, he had someone put it [along with all his other hunting stuff] up there.”

“[When he gave it to me,] he told me one time he was deer hunting with his brother and two other friends and there was one of those Canadian Jays up in the top of the tree, and they bet he couldn’t hit it with his pistol and he proved them wrong.” Gramps’ good natured laugh fills the room.

Gramps carried the gun with him for many years after it was given to him, and it still functions today.

“I carried it around; I used it. I did some target practicing with it and I might of shot a couple of birds with it, but I didn’t see too many when I carried it with me.”

After four years of working with Mrs. Bean, Gramps’ wife moved on to an office management position to earn more money. Gramps followed soon after to a job as a pattern cutter at the same factory.

The next day, the family bundles up and heads out to lunch. The cold wind whips the heat from their bodies as they walk, but Gramps doesn’t seem to be bothered by the cold as he has a heavy wool overcoat and red plaid scarf. On his feet, Gramps dons a worn pair of L.L. Bean boots.

“I wear them all through the winter. They’re insulated and the rubber bottoms keeps your feet dry, so yes, I wear them right through the wintertime.”

Japan - So Many Nuggets

I spent a bit of the holiday season in Japan visiting friends and riding the Shinkansen (bullet train). There is a lot to like. From clean, sprawling, dense, and affordable cites, to strangers offering to help an oftentimes extremely lost Gaijin (foreigner).

Yet, I leave the Land of the Rising Sun with more conflicted thoughts than I have for my own home. Things are so familiar and so different. There is so much peace and so much chaos. There is so much hope and so much despair.

I am also accumulating quotes about things far faster than I am writing about them so I thought I’d grab ones about Japan and smoosh them all together in the hope I can simulate the same conflict I feel as I depart.

The Economist recently published a special on housing in the west. One of the articles details how housing policies have increasingly caused wealth to be transferred from the poor, young, and members of ethnic minorities to those who are richer, older, and in the ethnic majority but calls out Japan for largely escaping this trap.

In Japan, zoning limitations (height, “setbacks” from other properties, density, etc) are much less restrictive than in the United States and other Western nations. Building projects (often at a massive scale) continue with limited challenge¹, and though Japanese culture is generally more communitarian which probably explains some of the permissiveness, Japan also lacks the explosive growth in property values see in centers of the West’s housing crisis such as the San Francisco Bay Area.

The Nikkei closed 2019 at 23,566.72, ~40% below 1989’s all-time high. It has been 31 years since 1989.

Japanese equities often swing wildly from year to year. This is surprising given that Japan is the world’s third largest economy (and second largest stock market), the index is dominated by large multinationals who don’t seem to be facing much local disruption, and the country has a strong institutions, rule of law, and general stability.

Last 30 Years Change in the Nikkei:

The government has tried many things to encourage the economy to grow, Prime Minister Shinzo Abe’s “Abenomics” efforts with quantitative easing, fiscal stimulus, and structural reforms to make the country more competitive abroad have been a key push that started in 2012.

As a Wikipedia Article about Japan’s world-high national debt to GDP ratio explains:

Capital staying within a large developed economy makes plenty of sense but Japan still exports a far greater share of its goods than the United States² and has remained consistently competitive in the automotive, electronics, electrical machinery, and medical device spaces.

Japan builds particularly good cars, and the gap between Japan and the rest of the world was even wider in the 80s. Things were so bad at GM’s Fremont plant they shut it down until they started working with Toyota on their “New United Motor Manufacturing, Inc” (NUMMI) joint venture.³

With relations between labor and management portrayed so positively, I wasn’t super surprised to hear that in the 50 years of the Shinkansen bullet train’s operation, none of the network’s 10+ billion passengers have died in a train accident. All of this in a system whose average delay was 0.9 minutes which include delays caused by the earthquakes and typhoons which often strike Japan. While the dueling mandate of safety and punctuality hasn’t resulted in a tragedy on the Shinkansen, a speed related derailment of a commuter line outside of Osaka in 2005 brought scrutiny to the punctuality standards enforced upon train drivers.

A similar severity is brought in the criminal justice system. After the 1995 sarin-gassing of the Tokyo Subway by a doomsday cult, the response was more severe than the United States’ response to the Boston Marathon Bombing 18 years later.

At the same time, institutions like the police are almost always remarkably personable in everyday interactions.

Wherever I travel somewhere, I ask myself if I would live there, and if I would raise children there.⁴ Here too I struggle to make a decision. One of my favorite bloggers — Patrick McKenzie — lives in Japan and offers this anecdote:

There are so many things I like about Japan. The streets are clean and safe, public transit is often faster than a car, employees take pride in their work and are extremely helpful. At the same time, I struggle to think about what it would mean to live in an economy that doesn’t really grow, and with a social structure much more rigid than the one I am used to.

Since I am still young and trying to grow and learn as much as possible, I worry how these things might change and limit me. But, as a place to live with a family unit — especially with young children - I think Japan offers most of the world stiff competition.

Let’s stay in touch - I’d love to hear your thoughts on this and other posts! Email me at spence dot burleigh at gmail and sign up to get the next post in your inbox.

1: Though the construction of Tokyo’s Narita Airport was extremely hard fought — protestors built a 200 foot tower at the end of a runway)

2: 16.1% vs 11.9% — though both are far below the world average of 28.5%

3: (This American Life)[https://www.thisamericanlife.org/403/nummi-2010] did a story about the plant when it was closed in 2010. It later sold to Tesla — becoming that company’s first factory.

4: I ignore a good deal of practical things (language, proximity to family, mostly what I would do for work) and be somewhat flexible with my (Western) values when I think about this. I try to make asking myself if I would live somewhere a more micro than macro question about the livability of a place and the way I feel about it. Asking yourself if you’d raise kids somewhere is much more of a macro and culture question since environment will define a big part of who a kid becomes (though I’d also assume they would be in an international school…)

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Related reading:

This is honestly just more quotes about Japan with some interjected thoughts that has less flow than above :/

Everyone loves cross laminated timber!

It has been interesting to contrast Japan with much more familiar Germany. Japanese War Crimes during the Second World War were exhaustive and the country has responded very differently from Germany and continues to be a sore point with its neighbors.

Denial and revisionist accounts of the Nanjing Massacre where 50,000 to 300,000 people were murdered by Japanese troops at the start of the Second World War is a “staple of Japanese Nationalism.” The Chinese took to calling their invaders “Japanese Devils” during the war and the phrase seems to still see occational use.

Similar issues with Korea where Japan ruled from effectively 1895 when assassins snuck into the palace, killed the empress and burned her body.

In 2017, Japan recalled its ambassador from South Korea in protest of a statue to honor the “comfort women” sex slaves taken by the Japanese army across from the embassy. Tensions have even run high in the United States when San Francisco approved a statue of a comfort woman and the mayor of Osaka (Japan’s second largest city) threatened to dissolve the “sister city” relationship the two cities had shared for over 50 years. Unfortunately it does’t seem like this will be figured out anytime soon.

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Let’s stay in touch - I’d love to hear your thoughts on this and other posts! Email me: spencer burleigh at gmail and sign up to get the next post in your inbox.

My Blog - Now Blocked in China ://

I just finished a half semester class where we focused on Tiananmen Square as a focal point of protest and social movements in China over the last 100 years. One of the largest plazas in the world, Tiananmen sits adjacent to the former imperial palace and in the last hundred years has hosted the May 4th Movement of 1919, Mao’s proclamation of the PRC in 1949, a massive rally of Red Guards in 1966 that began the implementation of the Cultural Revolution, protests after the death of the PRC’s first Premier Zhou Enlai in 1976, further protests in 1989 after the death of former CCP General Secretary Hu Yaobang, and countless PLA demonstrations.

For our final paper in the class we were asked to reflect on protest in China. I choose to write about my doubts in the effectiveness of the CCP’s “Great Firewall” and its policy of censoring content it deems sensitive. With the 30th anniversary of June 4th 1989 having just passed, I thought it appropriate to post that essay here.

Dear Mr/Mrs Chinese Visa official, I would very much like to be approved for my visa and to visit your country. I hope you can appreciate that this essay is very much in the spirit of Dengism and trying to seek truth from facts. Hopefully it doesn’t matter if the cat is white or black; if it catches mice, it’s a good cat.

1.4 Billion Ambassadors - An Argument for Soft Power over Censorship in the PRC

Techopedia defines a copypasta to be “a block of text that has been copied and pasted multiple times. This often leads to a kind of generic or stilted result, or something that is slightly jumbled or disjointed” (Copypasta, Techopedia). More innocuous than chain letters sent in analog and early digital times in the hopes of avoiding bad luck or finding riches, copypasta such as the “Navy Seal” copypasta and the script of the Bee Movie spreads virally across the internet because senders think they are funny. In the West, copypasta and their cousins, memes, serve as a way for people to express themselves on the internet. Chinese so called “netizens” also enjoy using the internet as a new medium for expression, but its levels of censorship lead Freedom House to denote it “the worst abuser of internet freedom in 2018” (Freedom on the Net 2018, Freedom House). While China’s government has become increasingly aggressive in the content they limit and the degree to which they suppress any mention of the Tiananmen Incident, it is fighting a battle it cannot win as its citizens become more globalized. The Chinese government would be better served conveying a convincing story to its citizens rather than censoring content and having a limited voice when its citizens inevitably learn about the things it seeks to hide.

There are many ways to elicit censorship from the what has become known as the “Great Firewall of China.” From puns that turned a viral musical homage to President Xi Jinping and his wife Peng Liyuan (Daddy Xi loves Mama Peng) that have come to elicit references to marijuana (daddy - 大 + mama - 媽 is similar in pronunciation to 大麻 - marijuana), to images of Winnie the Pooh also deemed to be a mockery of Xi, censors and their increasingly sophisticated algorithms remain busy (Why China is Banning Puns, Quartz). If one wishes to have their entire website censored for an indefinite time, users on the popular forum site Reddit recommend the following copypasta:

动态网自由门 天安門 天安门 法輪功 李洪志 Free Tibet 六四天安門事件 The Tiananmen Square protests of 1989 天安門大屠殺 The Tiananmen Square Massacre 反右派鬥爭 The Anti-Rightist Struggle 大躍進政策 The Great Leap Forward 文化大革命 The Great Proletarian Cultural Revolution 人權 Human Rights 民運 Democratization 自由 Freedom 獨立 Independence 多黨制 Multi-party system 台灣 臺灣 Taiwan Formosa 中華民國 Republic of China 西藏 土伯特 唐古特 Tibet 達賴喇嘛 Dalai Lama 法輪功 Falun Dafa 新疆維吾爾自治區 The Xinjiang Uyghur Autonomous Region 諾貝爾和平獎 Nobel Peace Prize 劉暁波 Liu Xiaobo 民主 言論 思想 反共 反革命 抗議 運動 騷亂 暴亂 騷擾 擾亂 抗暴 平反 維權 示威游行 李洪志 法輪大法 大法弟子 強制斷種 強制堕胎 民族淨化 人體實驗 肅清 胡耀邦 趙紫陽 魏京生 王丹 還政於民 和平演變 激流中國 北京之春 大紀元時報 九評論共産黨 獨裁 專制 壓制 統一 監視 鎮壓 迫害 侵略 掠奪 破壞 拷問 屠殺 活摘器官 誘拐 買賣人口 遊進 走私 毒品 賣淫 春畫 賭博 六合彩 天安門 天安门 法輪功 李洪志 Winnie the Pooh 劉曉波动态网自由门 

(r/China, Reddit) 

Each of these topics comes with their own sensitivities — and all use the traditional script the Chinese Communist Party has worked to replace — but the copypasta highlights well just how many things are limited in public discourse within China. While many of these items such as the The Xinjiang Uyghur Autonomous Region, and Liu Xiaobo’s Nobel Peace Prize remain in recent public consciousness, others such as the Cultural Revolution are not so personal to most (People’s Republic of Amnesia, Lim).

The disconnect between issues relevant to the youth and what is relevant to China’s leadership is perhaps something the CCP has missed as the age gap between them grows ever wider. Deng Xiaoping, China’s leader for two decades and the most influential man in China until his death in 1997 joined the communist party in 1923 (Deng Xiaoping, Biography.com). Mao — whose portrait remains on all denomination of the Renminbi and hangs in Tiananmen Square — is known to have been fond of Nikita Khrushchev’s declaration that “revolutionaries never retire,” and this has manifested itself in the leadership of the CCP (79-218, Weiner; We Revolutionaries Never Retire, Armageddon Letters). Xi Jinping — whose father Xi Zhongxun participated in the “Long March” of the 1930s — assumed the position of China’s Paramount Leader at the age of 58 — younger still than several of the previous Paramount Leaders (The CCP’s Age Problem, The Atlantic).

Beyond the Great Firewall, China has grown the state’s soft power strategy to perhaps the largest in the world (Gaining Face, The Economist). Between CGTN, China Daily, People’s Daily, Xinhua, and the Global Times, have perhaps 300 million followers on Facebook — representing five of the top six global new site. With an order of magnitude more engagement than Russian trolls during the 2016 US Election, and a $10 billion capital annual expenditure on soft power like this, China has built itself a bullhorn able to reach nearly 10% of Facebook users in Africa, and nearly 20% of Mexican and other Latin American users (Gaining Face, The Economist). Largely innocuous, these channels seem to follow the state owned Russian broadcaster — RT’s — strategy wherein sensational stories are seeded amongst real news (Agents of Doubt, Washington Post). The strategy appears to be working. As The Economist notes, “most popular posts [on Chinese media pages] are Orwellian titles such as China human rights report notes violations in us and “Why is Tibet a target for Western countries to pick on China?” (Gaining Face, The Economist). From hosting the 2008 and 2022 Olympics, the sponsorship of 500 “Confucius Institutes” at schools and 2,000 Chinese New Year celebrations both across 140 countries, the Chinese government is deeply focused on its image abroad (Subtleties of Soft Power, The Economist). This too appears to be working. Surveys find younger audiences across counties to have more favorable views of China than their elders — especially in countries like the United States and Japan (ibid).

Chinese youth may too follow the trend of approving more highly of the CCP than their parents. While the government has a hard time discussing sensitivities within its border and defaults to censorship, when asked to answer for troublesome periods outside the Great Firewall, it has answers that many accept. Leveraging its enormous populations to be messengers of its narratives would be an effective way to build national cohesion, pride, and further endear it to its citizens. With the events of 1989 nearing 30 years in age and a population that is increasingly realpolitik and removed from the events of June 4, China could stand to loosen its censorship of events — even as significant as this one. The social credit system, facial recognition technology, and monitoring of WeChat will persist.

Related reading:

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Active at major tourist spots around the world they call Truth Sites across the world, the Tuidang movement seems to exploit the PRC’s suppression of news by talking to visiting Chinese about incidents they don’t hear about on the mainland. Tuidang has helped over 300 million people quit the CCP.

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Delta - Be Better

Airlines and their routes are fun because the decision to fly a plane from one city to another can be made from more than just an immediate profit seeking perspective.

Air Canada flies from Seattle (SEA) to Vancouver (YYZ) — a distance of 126 miles — to feed its Asian and domestic Canadian flights. Delta and Alaska fly the same route to feed their domestic US flights.

American Airlines started flying from Dalles (DFW) to the airport near Reykjavik Iceland (KEF) when WOW Air (now defunct) and Icelandair already flew the route to protect their dominance in the Dallas market.

And Qatar Airways flies from Doha (DOH) to Atlanta (ATL) “in order to rub salt into the wounds of Delta” according to its colorful CEO Akbar Al Baker.

Delta has long alleged the three largest Middle Eastern carriers — Emirates of Dubai, UAE, Qatar Airways of Doha, Qatar, and Etihad of Abu Dhabi, UAE — collectively ME3 are in violation of the treaty that allows the airlines to fly to the United States because of the money they (do almost certainly receive) from their respective governments, but I’m not very concerned.

ME3 have collective orders for hundreds of American manufactured planes - directly providing American jobs. Delta has four outstanding orders for planes manufactured by American companies.

What’s more, American Airlines, directly partners with Qatar Airways as part of the One World Alliance, giving it a share of revenue on passengers traveling to destinations it doesn’t serve (India, Africa, etc). JetBlue and its minimal international route network benefits even more — connecting passengers to all of ME3.

Delta too has only picks convent times to complain — throwing a regulatory fit at Qatar Airways’ investment in tiny (15 plane fleet — only five of which can fly across the Atlantic) Air Italy while standing aside as Etihad invested billions into Delta partner Alitalia.

Delta is widely known to the be the best mainline carrier in the United States. They should focus on expanding that excellence beyond an airline that makes no money flying passengers and one that drags doctors off overbooked flights.

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Related reading:

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Dallas (DFW) is what is known as a fortress hub — which arguably do more to hurt the traveling public than anything else.

Travelers often prefer nonstop flights — which airlines are increasingly able to offer with aircraft like the Boeing 787 and A350. Singapore Airlines flies nearly 20 hours from New York to Singapore, Qantas flies a similar distance from Perth to London, and even Pittsburgh, Pennsylvania now has a non-stop to London. As routes like these only grow in scope, airlines of the newly connected city pairs will have a material advantage over airlines that require a connection — lessening the impact of ME3 on their passengers even further. Indeed, the Middle East is not a particularly efficient place to connect passengers traveling from the United States to Europe, South America, or (north) Asia.

(It is worth noting here that so-called “fifth freedom” flights like the one Emirates operates from New York to Milan, Cathay Pacific has from New York to Vancouver, or Singapore Airlines offers from New York to Frankfurt are not particularly common).

Also worth noting that while Delta has orders for foreign designed planes like the Airbus A220 and A320, these planes will most likely be manufactured at Airbus’ facility in Mobile, Alabama.

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