The Trader Joe's book is the most savage business book I've read. Paraphrasing:

"Our customers were over-educated and underpaid professionals"

"We cater to the newly educated masses. They may lose part (or all) of their income but they will retain their new tastes"
"We attracted health food nuts as employees, who believed more in what we were doing than what we did"

"You don’t need college graduates at any level, it is easy to train people"

"There is no such thing as an employee in charge of leasing that is both low paid and honest"
and finally, in the last chapter:

"I regret selling Trader Joe's"…
The book also makes clear how much of groceries is (regulatory) arbitrage:

"We couldn't call whey butter (a cheese by-product) 'butter', so we called it 'beurre', put it next to regular butter and discounted it"

"When they de-regulated milk, we lost 20% of our gross margins"
"Wisconsin had protectionist laws for all local cheeses except for brie. We imported as much brie as we could."

"As the dollar regained strength, we could buy wine for cheap in France and introduce it to our newly educated audience"
As he lists their best innovations, most of them are rooted in some form of rule change or regulatory arbitrage. Really eye-opening to read, especially the first chapter.

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More from @sebasbensu

Jan 4
Conditional probability represents the probability of B, once A has happened, defined as:

P(B|A) = P(A ∩ B) / P(A)

The formula never made sense to me because P(B|A) is not in the standard Venn diagram (my go to for probability) but it is there once you *zoom into* it Image

Alice comes to work with probability P(A), independently of Bob

Bob comes to work with probability P(B), independently of Alice

A and B come to work simultaneously with probability P(A ∩ B)

The universe is everything that could happen, represented by the grey box Image
To "condition on A", is to assume that A has happened: Alice came to work.

In this new universe, Alice is always in the office. So, our new universe is the blue box, which always has Alice.

We *zoom into* the blue box Image
Read 4 tweets

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