June 8, 2015
Masters of one of the world’s most revered forms of analog craftsmanship take on the smartwatch. ... Swiss watchmaking emerged from a radically different background, one rooted in meticulous manual labor. The industry got its start in the 16th century after John Calvin persuaded the City Council in Geneva to impose sumptuary laws banning jewelry, and the city’s skilled jewelers joined forces with the makers of pocket watches instead. Later, French Catholics chased Protestant Huguenots out of their country; many of these French exiles happened to be watchmakers, and they settled in Switzerland. In the mountains of the Jura region, they encountered local farmers who spent half the year indoors and idle and who turned out to be extremely patient and detail-oriented. The émigrés hired them to spend their winters hand-polishing tiny metal components for the “movements,” the watch’s spring-driven inner workings. ... By the 20th century, Swiss watches had become famous for their reliability and complexity. They are also marvels of energy efficiency, because dozens or even hundreds of components depend on tiny wound springs for power. Each new “complication” — say, a calendar that advances the date with a satisfying snap at midnight — demanded a new set of gears and more energy, thus requiring ever more clever compensations. A mechanical watch is both a dance with and a fight against physics.
The index fund pioneer’s low fees have driven down costs but is its success a cyclical phenomenon? ... It passed the $3tn mark in assets under management globally last year, as international growth spurted alongside the US; today the total is $3.4tn. ... if there are vulnerabilities, they are in three areas: the shift to passive investing may prove to be partly a cyclical phenomenon; Vanguard’s move into giving financial advice could cause friction; and regulators could decide to step in to stop the firm becoming too big to fail. ... Instead of having outside shareholders, Vanguard is owned by its funds, which means that instead of having to charge fees high enough to generate a profit for shareholders, it operates “at cost” and charges only enough to cover expenses and business investment. ... The Financial Stability Board, based in Basel, Switzerland, has suggested designating every fund with over $100bn in assets as a “systemically important” organisation and subjecting them to tougher oversight and perhaps other requirements, all of which would raise costs.
Major packaged-food companies lost $4 billion in market share alone last year, as shoppers swerved to fresh and organic alternatives. Can the supermarket giants win you back? ... While consumers have long associated the stuff on the labels they can’t pronounce with Big Food’s products—the endless strip of cans and boxes that primarily populate the center aisles of the grocery store—they now have somewhere else to turn (more on that in a bit). And that has brought the entire colossal, $1-trillion-a-year food retail business to a tipping point. ... Shoppers are still shopping, but they’re often turning to brands they believe can give them less of the ingredients they don’t want—and for the first time, they can find them in their local Safeway, Wegmans, or Wal-Mart. Rather than carry traditional products with stagnant sales, chains like Target are actively giving increasing space on their shelves to a slew of New Age players like yogurt-maker Chobani, Hampton Creek (which sells a popular plant-based mayo), Nature’s Path, Amy’s Kitchen, and Lifeway Foods, which makes a yogurt-like drink called kefir. Retailers are creating their own brands too.
So what is Jay Z thinking? He turned 45 in December. The onetime street hustler is now a husband and a father and hobnobs with world leaders such as President Obama and Nicolas Sarkozy, the former president of France. Some say he has grander ambitions in middle age. “He’d like to be a billionaire,” says Rob Stone, co-founder of the Fader, a magazine that extensively covers the rap world. “He’s talked openly about that. But I think in his mind, it’s no longer just about how much money he’s making. It’s about his legacy and what the name Shawn Carter will mean after he’s gone.” He wants to save the music industry from the brutal economics of streaming—and make himself a fortune in the process. So far he’s doing neither. ... For Jay Z the entrepreneur, the challenge was plain: Find a way to capitalize on the technology industry’s takeover of the music business beyond being a high-priced shill. ... The losses didn’t frighten Jay Z. He offered a 60 percent premium over Aspiro’s market value, according to a filing, and repositioned it as an artist-friendly alternative to Spotify that would pay higher royalties to record labels and artists. ... You can still listen to the catalogs of virtually every Tidal owner on Spotify. ... It’s too early to write off Tidal. But if the company does fail, it may be because Jay Z didn’t anticipate the skeptical response to his claim that he was working for some greater good of all musicians.
Inside the strange world of kidnap and ransom survival schools. ... Wilson, a 43-year-old British Army veteran who once served in Northern Ireland, picks me up on a swampy morning at a Motel 6 in Dania Beach, a suburb of Miami. He is the founder of Risks Incorporated, a private security firm that offers a three-day kidnap and ransom course in which I’m enrolled. A skeptical man with a dark sense of humor who has worked in the security industry for two decades, Wilson moved to South Florida 13 years ago with his then-wife and never left. ... Wilson briefs me on the bourgeoning business of international kidnapping. The White House’s recent acknowledgment of the accidental killing of two al-Qaida hostages in Pakistan in January, as well as the dark news from Syria in recent months, both overshadows and underscores the fact that kidnappings are a global scourge. As incidents have increased worldwide, a parallel industry has emerged, one that includes insurance companies, negotiators, lawyers, and security firms like Risks Inc. In a 2010 investigation, London’s Independent newspaper dubbed this the “hostage industry,” and estimated its worth at about $1.6 billion a year. ... Costs range from about $600 to a couple thousand dollars. Some are entirely in a classroom; others include role-playing. ... Wilson’s course is somewhere in between: part tutorial, part field exercise, tailored to the needs of the client. The company’s website promises to “take you into the real world of terrorism and kidnap and ransom!”