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The rise of the sharing economy
The document discusses the rise of the sharing economy, defining it as the temporary access to underutilized assets through digital platforms, which offers access over ownership. It outlines the benefits, challenges, and potential for significant growth in this sector, while cautioning about examples of companies that struggled with the model. Additionally, it emphasizes the importance of trust and adaptability for companies to thrive in this evolving landscape.
The rise of the sharing economy
- 1. The rise ofthe sharing economy 29/9/2017 Ivan Ivanković, Operations & Logistics Manager, Uber
- 2. The most boring presentationabout sharing economy you'll ever hear 29/9/2017 Ivan Ivanković, Operations & Logistics Manager, Uber
- 3. Hi Operations & LogisticsManager @Uber Previously worked as a consultant (Munich Partners), startup-founder (Squee, Prosper Consulting), corporate new business developer (Hrvatski Telekom). [email protected] @jokica125 “Where there's a will, there's a way”
- 4. Agenda ➔ What’s sharingeconomy? ➔ Good, bad and ugly - examples ➔ Impact on society ➔ The future of sharing economy ➔ Conclusion ➔ Q&A
- 5. Agenda ➔ What’s sharingeconomy? - Definition - Prerequisites - Why now? ➔ Good, bad and ugly - examples ➔ Impact on society ➔ The future of sharing economy ➔ Conclusion ➔ Q&A
- 6. Granting temporary access tounderutilized assets in ways that bypass traditional ownership and pricing models Definition - Prerequisites - Why now?
- 7. What can be considered sharing economy? Definition -Prerequisites - Why now?
- 8. What can be considered sharing economy? Business modelis hosted through digital platforms Definition - Prerequisites - Why now?
- 9. What can be considered sharing economy? Business modelis hosted through digital platforms Transactions are completed through a variety of methods that offer access over ownership Definition - Prerequisites - Why now?
- 10. What can be considered sharing economy? Deeper social interactions comparedto traditional methods of exchange Business model is hosted through digital platforms Transactions are completed through a variety of methods that offer access over ownership Definition - Prerequisites - Why now?
- 11. What can be considered sharing economy? Deeper social interactions comparedto traditional methods of exchange Business model is hosted through digital platforms Transactions are completed through a variety of methods that offer access over ownership Definition - Prerequisites - Why now? Product becomes more valuable as more users use it - network effect
- 12. Why did ithappened? Definition - Prerequisites - Why now?
- 13. Why did ithappened? Definition - Prerequisites - Why now? Purchasing power reduced during recession
- 14. Why did ithappened? Definition - Prerequisites - Why now? Purchasing power reduced during recession Saturation of crappy products
- 15. Why did ithappened? Definition - Prerequisites - Why now? Purchasing power reduced during recession Saturation of crappy products Social - local - mobile revolution
- 16. Why did ithappened? Definition - Prerequisites - Why now? Purchasing power reduced during recession Saturation of crappy products Technology enabled peer - review systems to build trust/quality Social - local - mobile revolution
- 17. Why did ithappened? Definition - Prerequisites - Why now? Purchasing power reduced during recession Saturation of crappy products Technology enabled peer - review systems to build trust/quality New consumer mindset Social - local - mobile revolution
- 19. Agenda ➔ What’s sharingeconomy? ➔ Good, bad and ugly - examples - Key sectors - Uberisation - Cautionary tale ➔ Impact on society ➔ The future of sharing economy ➔ Conclusion ➔ Q&A
- 20. Who’s next? Key sectors- Uberisation - Cautionary tale
- 21. Who’s next? Key sectors- Uberisation - Cautionary tale - Lending Club - Transfer Wise - Zopa - Kickstarter - Indiegogo - Lending Club - Bitcoin Financial services
- 22. Who’s next? Key sectors- Uberisation - Cautionary tale - Lending Club - Transfer Wise - Zopa - Kickstarter - Indiegogo - Lending Club - Bitcoin - Post Mates - Task Rabbit - InstaCart - Elance - Odesk - Freelancer.com - Chefly Financial services People/skills
- 23. Who’s next? Key sectors- Uberisation - Cautionary tale - Lending Club - Transfer Wise - Zopa - Kickstarter - Indiegogo - Lending Club - Bitcoin - Post Mates - Task Rabbit - InstaCart - Elance - Odesk - Freelancer.com - Chefly - AirBnB - Roomates.com - Home Away - Couch Surfing - We Work - 9flats.com - Sharedesk Financial services People/skills Accommodation
- 24. Who’s next? Key sectors- Uberisation - Cautionary tale - Lending Club - Transfer Wise - Zopa - Kickstarter - Indiegogo - Lending Club - Bitcoin - Post Mates - Task Rabbit - InstaCart - Elance - Odesk - Freelancer.com - Chefly - AirBnB - Roomates.com - Home Away - Couch Surfing - We Work - 9flats.com - Sharedesk - Uber - ZipCar - BlaBlaCar - Turo - SideCar - Just park - Getaround Financial services People/skills Accommodation Mobility
- 25. Who’s next? Key sectors- Uberisation - Cautionary tale - Lending Club - Transfer Wise - Zopa - Kickstarter - Indiegogo - Lending Club - Bitcoin - Post Mates - Task Rabbit - InstaCart - Elance - Odesk - Freelancer.com - Chefly - AirBnB - Roomates.com - Home Away - Couch Surfing - We Work - 9flats.com - Sharedesk - Uber - ZipCar - BlaBlaCar - Turo - SideCar - Just park - Getaround - Uber Freight - Cargomatic - Convoy - Teleroute - Locodels - ShareMyStorage - Keycafe Financial services People/skills Accommodation Mobility Logistics
- 26. Who’s next? Key sectors- Uberisation - Cautionary tale - Lending Club - Transfer Wise - Zopa - Kickstarter - Indiegogo - Lending Club - Bitcoin - Post Mates - Task Rabbit - InstaCart - Elance - Odesk - Freelancer.com - Chefly - AirBnB - Roomates.com - Home Away - Couch Surfing - We Work - 9flats.com - Sharedesk - Uber - ZipCar - BlaBlaCar - Turo - SideCar - Just park - Getaround - Uber Freight - Cargomatic - Convoy - Teleroute - Locodels - ShareMyStorage -Keycafe - Khan Academy - Quora - Teachers Pay Teachers - Cottage Class - Wikipedia - OpenIDEO Financial services People/skills Accommodation Mobility Logistics Education
- 27. Who’s next? Key sectors- Uberisation - Cautionary tale - Lending Club - Transfer Wise - Zopa - Kickstarter - Indiegogo - Lending Club - Bitcoin - Post Mates - Task Rabbit - InstaCart - Elance - Odesk - Freelancer.com - Chefly - AirBnB - Roomates.com - Home Away - Couch Surfing - We Work - 9flats.com - Sharedesk - Uber - ZipCar - BlaBlaCar - Turo - SideCar - Just park - Getaround - Uber Freight - Cargomatic - Convoy - Teleroute - Locodels - ShareMyStorage - Keycafe - Khan Academy - Quora - Teachers Pay Teachers - Cottage Class - Wikipedia - OpenIDEO - Belle - Clineeds - Heal - Cohealo - MedZed - True North - PatientGrade Financial services People/skills Accommodation Mobility Logistics Education Health industry
- 28. Who’s next? Key sectors- Uberisation - Cautionary tale - Lending Club - Transfer Wise - Zopa - Kickstarter - Indiegogo - Lending Club - Bitcoin - Post Mates - Task Rabbit - InstaCart - Elance - Odesk - Freelancer.com - Chefly - AirBnB - Roomates.com - Home Away - Couch Surfing - We Work - 9flats.com - Sharedesk - Uber - ZipCar - BlaBlaCar - Turo - SideCar - Just park - Getaround - Uber Freight - Cargomatic - Convoy - Teleroute - Locodels - ShareMyStorage - Keycafe - Khan Academy - Quora - Teachers Pay Teachers - Cottage Class - Wikipedia - OpenIDEO - Belle - Clineeds - Heal - Cohealo - MedZed - True North - PatientGrade - Growington - Cookening - Feastly - Foodsharing - Kitchensurfing - GrowUp - Casserole Club Financial services People/skills Accommodation Mobility Logistics Education Health industry Household goods
- 29. Who’s next? Key sectors- Uberisation - Cautionary tale - Lending Club - Transfer Wise - Zopa - Kickstarter - Indiegogo - Lending Club - Bitcoin - Post Mates - Task Rabbit - InstaCart - Elance - Odesk - Freelancer.com - Chefly - AirBnB - Roomates.com - Home Away - Couch Surfing - We Work - 9flats.com - Sharedesk - Uber - ZipCar - BlaBlaCar - Turo - SideCar - Just park - Getaround - Uber Freight - Cargomatic - Convoy - Teleroute - Locodels - ShareMyStorage - Keycafe - Khan Academy - Quora - Teachers Pay Teachers - Cottage Class - Wikipedia - OpenIDEO - Belle - Clineeds - Heal - Cohealo - MedZed - True North - PatientGrade - Growington - Cookening - Feastly - Foodsharing - Kitchensurfing - GrowUp - Casserole Club - Swap.com - Popcorn Time - Humbolt - Groupmuse - Periscope - Instagram - Wikitribune Financial services People/skills Accommodation Mobility Logistics Education Health industry Household goods Multimedia
- 30. On AngelList 526 COMPANIESinclude “Uber for X” in their listings Key sectors - Uberisation - Cautionary tale
- 31. Homejoy A home-cleaning marketplacecompany who provide cleaning services by using independent contractors. - Customers only used the initial promotional offer. - Expansion to other markets happen too fast - Not allowed to train the independent contractors Key sectors - Uberisation - Cautionary tale Source
- 32. Exec Exec was meantto provide errand runners to do any kind of random jobs. - Serve all possible jobs and had to hire errand runners for different skills which proved costly in the end - Unit Economics gone wrong, service fee couldn’t cover customer acquisition, customer service, and recruiting sufficient supply, refunds Key sectors - Uberisation - Cautionary tale Source
- 33. Cherry An on-demand carwash service, allows customers to park anywhere, check in online, and have their car washed where they left it. - Inability to maximize revenue as people are not washing car that often - Scaling in the real world turned out to be much harder, more expensive, and time-consuming Key sectors - Uberisation - Cautionary tale Source
- 34. Agenda ➔ What’s sharingeconomy? ➔ Good, bad and ugly - examples ➔ Impact on society - Benefits - Regulatory, legal & tax - Consumer challenges ➔ The future of sharing economy ➔ Conclusion ➔ Q&A
- 35. Benefits of sharing economy on society Benefits- Regulatory, Legal, Tax - Consumer challenges Source
- 36. Technology advances fasterthan regulation Benefits - Regulatory, Legal, Tax - Consumer challenges Source
- 37. Technology advances fasterthan regulation Regulatory considerations Benefits - Regulatory, Legal, Tax - Consumer challenges Source
- 38. Technology advances fasterthan regulation Regulatory considerations Management of unconventional workforce Benefits - Regulatory, Legal, Tax - Consumer challenges Source
- 39. Technology advances fasterthan regulation Tax complianceRegulatory considerations Management of unconventional workforce Benefits - Regulatory, Legal, Tax - Consumer challenges Source
- 40. Trust is oneof main enablers of sharing economy Benefits - Regulatory, Legal, Tax - Consumer challenges Source
- 41. Trust is oneof main enablers of sharing economy Consumer trust and safety Benefits - Regulatory, Legal, Tax - Consumer challenges Source
- 42. Trust is oneof main enablers of sharing economy Consumer trust and safety Consistency in service quality Benefits - Regulatory, Legal, Tax - Consumer challenges Source
- 43. Trust is oneof main enablers of sharing economy Security and risk mitigation Consumer trust and safety Consistency in service quality Benefits - Regulatory, Legal, Tax - Consumer challenges Source
- 45. Agenda ➔ What’s sharingeconomy? ➔ Good, bad and ugly - examples ➔ Impact on society ➔ The future of sharing economy - 10-20x growth - What with the incumbents? - Not too distant future ➔ Conclusion ➔ Q&A
- 46. Sharing economy sectors Traditionalindustry sectors 5% 95% 50% 50% 2013 2025 Source In 2013 sharing economy was $15bn and can grow to $335bn in 2025 10-20x GROWTH OF THE SHARING ECONOMY IS POSSIBLE AND HIGHLY LIKELY 10-20x growth - Incumbents - Future
- 47. Who is disrupting yourindustry behind your back? Become antifragile or die Source 10-20x growth - Incumbents - Future
- 48. What are the unexpected benefitsof self-driving vehicles? 10-20x growth - Incumbents - Future
- 49. 10-20x growth -Incumbents - Future Centralised
- 50. 10-20x growth -Incumbents - Future Centralised Decentralised
- 51. 10-20x growth -Incumbents - Future Centralised Decentralised Bitcoin
- 52. 10-20x growth -Incumbents - Future Centralised Decentralised Bitcoin Is the blockchain future of sharing economy?
- 53. Agenda ➔ What’s sharingeconomy? ➔ Good, bad and ugly - examples ➔ Impact on society ➔ The future of sharing economy ➔ Conclusion ➔ Q&A
- 54. TL;DR - Sharing economyis built around trust and underutilized assets - Ownership over things becomes burden in today's life - Uberisation is happening across all sectors - We are all responsible for sharing economy to be net positive - Companies have to become antifragile or else they’ll be displaced
- 55. Agenda ➔ What’s sharingeconomy? ➔ Good, bad and ugly - examples ➔ Impact on society ➔ The future of sharing economy ➔ Conclusion ➔ Q&A
- 56.
- 57.
Editor's Notes
- #7 Definition of ‘sharing economy’ - Consumers granting each other temporary access to under-utilised physical assets The sharing economy can be defined as the preference to pay for assets or services by consumption or on-demand, rather than owning assets permanently or signing long-term contracts for services. Pricing models could be lending, swapping, sharing, etc
- #14 Purchasing power reduced during recession
- #15 Saturation of crappy products too much waste too much stuff we don’t use too much choice and disconect with happinessPu
- #16 Social - local - mobile revolution or- connected digital devices that makes matching demand and supply easier than ever before (pwc) versatility of mobile phone (a16z, slide 50) technology enables growth, mobile and local enable new types of sharing services
- #17 Peer-review systems to build trust and regulate quality trust - consumers become more comfortable sourcing trust
- #18 New consumers mindset Life pace - its not cool to do only one thing, to have only one job re-thinking value of ownership - young people embrace the idea that individual ownership bears higher costs
- #21 Financial services Lending Club – An online financial community that brings together creditworthy borrowers and savvy investors so that both can benefit financially. Transfer Wise - TransferWise harnesses the power of peer-to-peer technology allowing people to send money abroad at a fraction of the price. Zopa (UK) – Where people get together to lend and borrow money directly with each other, sidestepping the banks for a better deal. Kickstarter – A crowd-funding site powered by a unique all-or-nothing funding method where projects must be fully-funded or no money changes hands. Indiegogo - crowd funding site Lending club - p2p lending Bitcoin - p2p currency Pople/skills Post Mates - people are delivering someting for you Task Rabbit - other people doing errands for you Insta Cart - people are buying stuff and delivering for you Elance - freelance site Odesk - freelance site Freelancer.com - freelance site Chefly - people who will cook food for you Accommodation AirBnB - p2p rooms Roomates.com – A roomate finder and roomates search service which covers thousands of cities nationwide. Home Away - vacation rental housing Couch surfing - rent other peoples couch We work - shared workspace 9flats.com - vacation rentals Sharedesk - rent office space Mobility Uber ZipCar BlaBlaCar Turo SideCar Just park Getaround Logistics Uber Freight Cargomatic - connecting shipppers with local carriers Convoy - uber for trucks Teleroute - exchange loads Locodels - small local deliveries ShareMyStorage - On sharemystorage.com people are brought together to provide a common sense self-storage solution – using space such as the attic, garage, basement, or spare room in the back-office. On the website you can either find or add storage space. Keycafe - Store your keys securely at the local cafe and exchange them remotely with your home-rental guests via the app. Keycafe is not classic ‘storage’ but about managing access to your home remotely. Education Khan Academy Quora TeachersPayTeachers.com, which are gaining popularity as marketplaces for teachers to buy and sell lesson plans. CottageClass, you can find the ideal school for your unique child or customize their education with specialty classes. CottageClass is reinventing education at a grassroots level through an open source marketplace for micro-schools. Wikipedia OpenIDEO - A social learning platform that connects students, teachers, schools and crowd sourced content providers. Health industry Belle is a marketplace that allows people to engage with beauty & health services on their terms. Vetted Professionals provide a range of on-demand services, (massages, manicures, makeup, hairstyling, haircuts, skin care, fitness & more) wherever Clients may be, including their homes, offices, event spaces & hotels. Clineeds - a service that allows healthcare professionals to advertise and network with other doctors who have office space to rent. Heal - on demand doctors at your home Cohealo - Cohealo offers a software package allowing hospitals to list operating room items. If doctors need something for an upcoming scheduled procedure, they can look up the equipment and schedule it for delivery i.e. drills etc MedZed, which sends a nurse to do the exam, but brings the doctor’s advice along electronically through a laptop. TrueNorth - reducing the need for paramedic calls for nonemergency medical issues that ended up being costly for all parties involved. PatientGrades - site for doctors to rate their patients Household goods Growington - This is a self-sustaining food network. Through an online platform, home fruit and vegetable growers can share with others the produce that they don’t need or are happy to offer. Cookening - Founded in France, this start up connects people and cultures worldwide through food. Diners can share home-cooked meals Feastyl - marketplace to connect adventurous eaters with passionate cooks, amateur or professional chefs. Cooks can publish lists of food that they plan to cook on Feastly’s website and invite diners looking for a meal to buy a seat at their table Foodsharing - sharing food that they are not going to use before it becomes damaged. Reducing food waste Kitchensurfing - connecting chefs with restaurants GrowUp - shared local urban farms Casserole club - connects people to share extra portions of home cooked food Multimedia Swap.com – The leading online swap marketplace for books, movies, music and games. Amazing selection. Update: now swapping everything. Humbolt - connecting music artists and fans. Fans are encouraged to reward artists directly in exchange for exclusive content Groupmuse - matches Groupmuse users looking to host a concert with willing musicians needing a venue to perform Wikitribune - paid journalists and volunteers are creating and editing news
- #22 Financial services Lending Club – An online financial community that brings together creditworthy borrowers and savvy investors so that both can benefit financially. Transfer Wise - TransferWise harnesses the power of peer-to-peer technology allowing people to send money abroad at a fraction of the price. Zopa (UK) – Where people get together to lend and borrow money directly with each other, sidestepping the banks for a better deal. Kickstarter – A crowd-funding site powered by a unique all-or-nothing funding method where projects must be fully-funded or no money changes hands. Indiegogo - crowd funding site Lending club - p2p lending Bitcoin - p2p currency
- #23 Pople/skills Post Mates - people are delivering something for you Task Rabbit - other people doing errands for you Insta Cart - people are buying stuff and delivering for you Elance - freelance site Odesk - freelance site Freelancer.com - freelance site Chefly - people who will cook food for you
- #24 Accommodation AirBnB - p2p rooms Roomates.com – A roomate finder and roomates search service which covers thousands of cities nationwide. Home Away - vacation rental housing Couch surfing - rent other peoples couch We work - shared workspace 9flats.com - vacation rentals Sharedesk - rent office space
- #25 Mobility Uber ZipCar BlaBlaCar Turo SideCar Just park Getaround
- #26 Logistics Uber Freight Cargomatic - connecting shipppers with local carriers Convoy - uber for trucks Teleroute - exchange loads Locodels - small local deliveries ShareMyStorage - On sharemystorage.com people are brought together to provide a common sense self-storage solution – using space such as the attic, garage, basement, or spare room in the back-office. On the website you can either find or add storage space. Keycafe - Store your keys securely at the local cafe and exchange them remotely with your home-rental guests via the app. Keycafe is not classic ‘storage’ but about managing access to your home remotely.
- #27 Education Khan Academy Quora TeachersPayTeachers.com, which are gaining popularity as marketplaces for teachers to buy and sell lesson plans. CottageClass, you can find the ideal school for your unique child or customize their education with specialty classes. CottageClass is reinventing education at a grassroots level through an open source marketplace for micro-schools. Wikipedia OpenIDEO - A social learning platform that connects students, teachers, schools and crowd sourced content providers.
- #28 Health industry Belle is a marketplace that allows people to engage with beauty & health services on their terms. Vetted Professionals provide a range of on-demand services, (massages, manicures, makeup, hairstyling, haircuts, skin care, fitness & more) wherever Clients may be, including their homes, offices, event spaces & hotels. Clineeds - a service that allows healthcare professionals to advertise and network with other doctors who have office space to rent. Heal - on demand doctors at your home Cohealo - Cohealo offers a software package allowing hospitals to list operating room items. If doctors need something for an upcoming scheduled procedure, they can look up the equipment and schedule it for delivery i.e. drills etc MedZed, which sends a nurse to do the exam, but brings the doctor’s advice along electronically through a laptop. TrueNorth - reducing the need for paramedic calls for nonemergency medical issues that ended up being costly for all parties involved. PatientGrades - site for doctors to rate their patients
- #29 Household goods Growington - This is a self-sustaining food network. Through an online platform, home fruit and vegetable growers can share with others the produce that they don’t need or are happy to offer. Cookening - Founded in France, this start up connects people and cultures worldwide through food. Diners can share home-cooked meals Feastyl - marketplace to connect adventurous eaters with passionate cooks, amateur or professional chefs. Cooks can publish lists of food that they plan to cook on Feastly’s website and invite diners looking for a meal to buy a seat at their table Foodsharing - sharing food that they are not going to use before it becomes damaged. Reducing food waste Kitchensurfing - connecting chefs with restaurants GrowUp - shared local urban farms Casserole club - connects people to share extra portions of home cooked food
- #30 Multimedia Swap.com – The leading online swap marketplace for books, movies, music and games. Amazing selection. Update: now swapping everything. Humbolt - connecting music artists and fans. Fans are encouraged to reward artists directly in exchange for exclusive content Groupmuse - matches Groupmuse users looking to host a concert with willing musicians needing a venue to perform Wikitribune - paid journalists and volunteers are creating and editing news
- #31 Sharing economy is not for all the companies Many companies just want to be trendy and ride on waves Similar is happening today with blockchain for everything Uber was successful because it solved real problem for people in the 10x better way
- #32 Homejoy: Could not retain their customersHomejoy Uber for X startup fail Concept: A home-cleaning marketplace company who provide cleaning services by using independent contractors. Fatal problem 1: Customers only used the initial promotional offer. Homejoy relied heavily on deal sites like Groupon to gain new customers. After the initial promotion offer had been used, very few customers made another booking. Only about 15-20% of the customers booked again within a month, compared the larger rival Handy who states that 35% of their customers booked again within the same time period. Advice: using promotional offers is a good way to start acquire customers. However, to gain new customers you also can use other channels such as social media, paid marketing, word-of-mouth etc. Fatal problem 2: Expansion to other markets happen too fast. Homejoy received a funding of $38 million in 2013 and with this large amount the investors expect an equally large growth. To meet these expectations, Homejoy expanded quickly- At one point opening in 30 cities in six months. The expansions was costly as Homejoy customer acquisitions was through discounted deals. Advice: Studies have shown that “Premature scaling” is killing startups. One aspect of this concept is putting too much money on customer acquisition before the product is ready. To start in a smaller scale could had helped Homejoy. Fatal problem 3: Not allowed to train the independent contractors. Homejoy’s cleaners were independent contractors which meant they were banned from giving them any basic training of how to clean a house. Even though they had never cleaned professionally before. This restrain lead to an uneven quality of the service. Advice: The New York based on-demand cleaning service MyClean used a contractor model at start. However, as they received bad reviews they changed their approach to an employee model. Homejoy could had considered changing their approach and hired employees instead to easier control the quality of their service. Result: Shut down
- #33 Concept: Exec was meant to provide errand runners to do any kind of random jobs. Fatal Problem 1: Serve all possible jobs. The company adopted a model to provide errands for all possible jobs. This made them hire errand runners for different skills which proved costly in the end. Moreover the demand was spiky and maximum transactions took place on weekends. Due to unavailability of errand runners on weekend’s employees had to be sent to serve the customers. Advice: Focus majorly on niche jobs before expanding to serve other jobs. Amazon, Ebay, Etsy and almost every huge marketplace started by servicing a niche, reached the critical mass and expanded thereafter. Fatal Problem 2: Unit Economics gone wrong. “Actual COGs (bandwidth and servers) were only 30% of our gross revenue – most of our expenses were software engineers working on improving the product. With Exec Errands, we paid out 80% of the $25 / hour that we billed for errand runner time on job. That means that all marginal customer acquisition, customer service, and recruiting sufficient supply of errand runners had to be paid for out of that remaining 20%. Paying for mistakes (workers messing up a job) or customer refunds quickly ate up any profits “. Advice: Although it’s difficult to accurately predict the unit economics to begin with, but a rough analysis of where the cut from every transaction is going to go before hitting the critical mass and after hitting the critical mass helps to decide the viability of the model. Result: Acquired by HandyBook in Jan 2014.
- #34 Concept:Cherry, an on-demand car wash service, allows customers to park anywhere, check in online, and have their car washed where they left it. Fatal Problem 1: Inability to maximize revenue. “Cherry customers did not need a car wash every day, at best once a week. Therefore, to maximize revenue in the Bay Area, where they started, Cherry would have had to either begin to up-sell other car-related services to be delivered at the time of a car wash and/or to maximize the number of bookings made through its service”. Advice: Cherry needed to provide some other car related services so that it could earn higher revenue from a single transaction. In comparison Uber’s transaction volume is high on two dimensions: repetitive use and high-ticket sales. Companies like Cherry which are looking at venture-scale opportunities will most-likely need to show robust figures in at least one of these two dimensions. Fatal Problem 2: Scaling in the real world. “Suppose Cherry worked so well in the Bay Area that they began a plan to expand to other cities. My sense is that in the SF Bay Area right now, and for the past year or so, many folks around here have a tendency to assume “scaling offline” is complex but as controllable as “scaling online.” While scaling an infrastructure and system online is certainly difficult, I would say right now it’s much harder, more expensive, and more time-consuming to scale these types of business offline and into new locations”. Advice: Each company in these categories would need to build their own playbook in their test market (usually the Bay Area) and then execute against that plan to expand their reach while maintaining quality. And, even if these conditions are met, a VC may be reluctant to invest given the minefield of operational risks any team will surely endure. Pulling of a business like this takes serious time and effort. Result: Shut Dow
- #36 Consumers On-demand services Convenience Lower prices Shared experiences Personalized/ customized product/service Choice of multiple options Marketplaces Increased efficiencies Brand creation Better supplier prices Lower capital intensity Suppliers Increased business due to wider market reach Digital literacy Social mobility Skill development Brand creation
- #37 regulators are used to operate in b2b and b2c markets, but c2c economy is new and uncharted theritory. technology advances faster than legislation. airbnb for violating tax and health and safety codes uber employement and taxi policy makers want to be sure that sharing economy is a net benefit of society each company has responsibility for its impact on communities
- #38 regulators are used to operate in b2b and b2c markets, but c2c economy is new and uncharted theritory. technology advances faster than legislation. airbnb for violating tax and health and safety codes uber employement and taxi policy makers want to be sure that sharing economy is a net benefit of society each company has responsibility for its impact on communities
- #39 In the last 20 years people are used to have stable jobs, going to work from 9-5 and bring home similar paycheck every month In the sharing economy, things are changing fast. People are not anymore employees, they are becoming independant operators. They are self-employed or freelancers. What can platforms do? Can they train them, how are they considured,
- #40 regulators are used to operate in b2b and b2c markets, but c2c economy is new and uncharted theritory. technology advances faster than legislation. airbnb for violating tax and health and safety codes uber employement and taxi policy makers want to be sure that sharing economy is a net benefit of society each company has responsibility for its impact on communities
- #48 identify potential disruptions in their sector Failure to react equals disaster mitigation strategy -partnering, acquisition (ikea bought task rabbit), investments Big companies sometimes operate with false sense of security. They think that they are safe because their customers need the services and because disruption always happens to others but never to them. When Blockbuster was a still a dominant $5b company in their sector they didn’t take Netflix seriously. They even missed the chance to acquire Netflix for just $50m! Blockbuster’s board woke up too late when, just a couple of years later, Netflix was the $5b player and Blockbuster was going bankrupt. The moral of the case of Netflix and Blockbuster is that the companies that react to the way customers want things done nowadays, not yesterdays, will run away with the market share.