Yi-Chen Lu's Newsletter No. 5

The Best Investing Writing of 2020, The Law of Focus, Writing During Quarantine

Hi everyone,

Greetings from Taipei! Welcome my new subscribers and thank you all so much for reading.

Flew back home for the first time this year. Very excited to see my family!

But...I haven't seen them yet. I am currently on day 10 of quarantine, which means I haven't gone outside for ten days straight. (except the balcony)

Check out this view from my quarantine place. You can see Taiwan's iconic building: Taipei 101. 

The first few days, I went from being thrilled to be back home to the feeling of time passing by very slowly. Day 3 was when I hit my lowest point. Now, it's gradually coming back up since I have exciting things to work on. I am still working for another week and writing this newsletter. Both keep me motivated.

Question for you: How would you spend 14 days at home by yourself?

Here's a snapshot of everything in store for this issue:

  • The Best Investing Writing of 2020

  • The Law of Focus

  • Writing During Quarantine

  • Amazon Pharmacy

The Best Investing Writing of 2020

This article in my newsletter subscription inbox caught my attention. The prolific personal finance writer, Nick Maggiulli, compiled a list of his favorite investment writing of 2020.

I can't wait to read all of them. The first one has already shown that this is going to be a great list.

The first one by Morgan Housel left me speechless. A life-changing event demonstrates the three sides of risks (in investing):

  • The odds that the event will occur.

  • The average consequences of the event occurring.

  • The tail-end consequences of the event occurring.

As Morgan wrote, The first two are easy to grasp. It’s the third that’s hardest to learn, and can often only be learned through experience.

The truth is only the tail-end consequences matter.

The Law of Focus

A company can be super successful if it can own a word in the mind of the prospect. This concept goes back to the law of leadership I mentioned in my second issue, a company should try to be the first to own a word in a prospect's mind. Note that you shouldn't use a term that is working for another company.

The word should be simple and easy to remember.

No matter how complicated the product, no matter how complicated the needs of the market, it's always better to focus on one word or benefit rather than two or three or four.

The importance of marketing is narrowing the focus.

You become more potent when you reduce your operations’ scope and focus on being the best at one thing. It's simple: you can't stand for something if you go after everything.

But while narrowing the focus, make sure not to own a word that is too bland.

You can't narrow the focus with the quality or any other idea that doesn't have proponents for the opposite perspective.

For example, in the book, The 22 Immutable Laws of Marketing, the authors mentioned that there is no such thing as an honest politician. Still, there can be a pro-business candidate or a pro-labor candidate.

That is the kind of word a company should own. Be bold and take a position.

Writing During Quarantine

Due to Taiwan's regulation, I have to spend the first 14 days at home, quarantining. I am not allowed to go outside. If I do, the police will track me down, and I will be subjected to a hefty fine. This approach is to ensure that I won't be carrying any virus into the community. It has been working pretty effectively as Taiwan has very few community transmission since the outbreak.

However, 14-day isolation does feel like ages. For the first few days, days go by so slow.

To get through these 14 days, I decided to write more short articles. These posts will be no longer than 300 words and will be about any topic I feel like writing about.

Here are some posts I've written up to this day:

Amazon Pharmacy

Did you solve the last digital health trivia?

Which tech giant recently announced the move into the foray of pharmacy and prescription benefits and could become a disruptor to other well-established companies in the space like GoodRx? 

A. Google 

B. Facebook 

C. Microsoft 

D. Amazon

The answer is D. Amazon.

The big tech giant Amazon recently announced its foray into the pharmacy space. They acquired PillPack last year to show the world their plan and strategy in the trillion-dollar healthcare space. Recently, the plan became more apparent as Amazon announced its Amazon pharmacy, a mail pharmacy that will accept insurance and be in PBM pharmacy networks.

But something interesting that no one saw coming is this. 

Amazon Prime members can access lower prescription prices only when paying without their insurance. What’s more, you can even use the Amazon Prime discount card at a retail pharmacy.

This strategy is straight-up copying the GoodRx discount card model—including GoodRx’s partnership with Express Scripts. That could be worrisome.

As you can see in the graphic below, the market reacts by a sudden drop in GoodRx stock price on the day of Amazon's press announcement.

Source: Bloomberg

Adam Fein, an industry leader well-versed in the drug benefits space, wrote a very thought-provoking analysis here.

  • GoodRx doesn't operate a dispensing pharmacy, so it isn't trying to compete with the pharmacies that accept its discount card.

  • Amazon's website is clunky and requires substantial personal information. People couldn't quickly check prices.

  • Amazon’s move also validates GoodRx’s business model.

But on the flip side:

  • Amazon can catch up by bringing in more PBMs partners and improving the consumer experience.

  • With Amazon's customer-obsessed mentality, GoodRx could take a hit in its moat.

Do you think Amazon will become a significant threat to GoodRx? Share your thoughts with me in the comments below or reply to this email.

Digital Health Trivia

  • This company sells at-home medical testing. 

  • This company was founded by a woman.

  • The company recently raised $175 million Series D Round.

Do you know which company this is?  Hint: the company starts with an E

I will reveal the answer in the next issue. Stay tuned!

Thanks again for reading.

Talk soon,

Yi-Chen (Jenny)

P.S. I love to hear from you. Feel free to hit reply and let me know what you think about this issue.