Natalie, great post! Love the topic. Quick question: how long do you think Wayfair has before Amazon takes over the market? Jk jk! 😛
Seriously though, I think AR in the furniture market will have a phenomenal impact. I do believe not being able to picture how furniture actually looks is the biggest barrier to online purchase. Wouldn’t it also be amazing if you could combine haptic feedback so that customers could virtually test how the furniture feels?
Thanks, Alex! Glad it was educational 🙂
I imagine a situation where FB says to app developers: anyone is free to utilise the technology but in exchange your users have to either link it to a FB account or create a MindReader™ account. If they go the MindReader™ account option, that account can still be linked across apps (it just won’t have their FB data).
It can be a problem if customers are sceptical of giving FB access to this information. The question is whether that scepticism outweighs their desire to use the functionality/apps that the technology enables. Lots of us hate how much access FB has to our personal information and yet we still use it. So, who knows?
Thanks for your comment, Ellen! You pose an excellent question. I personally think this is progress that can’t be stopped. It seems like the next logical step in the evolution of technology and doesn’t cause enough immediate harm to justify halting its development.
There is another question that comes to mind of ‘how do we control it’? Do we need to establish laws that govern what information organisations can read from our minds and how they use that information? And will there be an element in which corporations ‘self regulate’ and protect users’ rights to privacy because otherwise their customers would flee?
It may also be the case that humanity gets more comfortable with living in a constant mode of surveillance. Perhaps the next generations won’t find the actions of the NSA at all surprising or offensive. Maybe with this evolution, our understanding of what is ethical or not will evolve too?
Thanks, Mohit! I haven’t heard of anything along these lines. It’s a possibility though probably not a huge priority (currently, customers complete the first-mile, no?)
Thanks, Hao! Hmm…this circularity is an interesting question. I suppose the mitigating factor is that the market clears where supply equals demand. Hence, even if the model is a bit circular, as long as the market can clear at that price (i.e. the demand from buyers still exist), the business model still works?
Hi Oyku, thanks for your comment! You’re right there is a certain labour-intesiveness to their model but I think that’s something that can’t be completely avoided in the real estate space. At a minimum you’ll still need inspectors to go out and check that the place is structurally sound! Maybe one day, the technology will have developed enough such that, per Andrew’s suggestion, a few photos is all it will take to gather than information.
Thanks, Amy! Yea, one of the things that isn’t quite clear to me is how this model fits in with a cycle of rising/declining house prices. We’ll have to wait and see!
Thanks, Meredyth! I imagine some of the elements of heterogeneity that they might struggle with in cities like SF and NYC are things like use of the property (many individual properties are rented out to multiple tenants), the nature of the housing (standalone vs condo vs townhouse), the impact of neighbourhood (one block can be priced significantly differently from the one right over – particularly in SF).
Great questions, Natalie! First, OpenDoor does a physical home inspection to verify the inputs in the model. Second, they allow potential buyers to schedule self-led showings (i.e. no agent takes them to the house). Because the houses are empty, buyers can basically schedule showings to suit their schedule (cf. when you need to make sure the tenant or homeowner is available). However, a lot of negative OpenDoor reviews on Yelp are related to the buying side. Seems like they’re still working kinks out there. Third, haha it is not.
Thanks for the comment, Felix. It’s mostly the fact that they can give a seller an offer straight away and close whenever they want to (between 3-60 days). There’s also no financing contingency so the seller gets a LOT more certainty than they would if the market.
Thanks for the post, Cameron! I think Friendly Score’s idea is a great one, considering how difficult it can be for people to build and access credit. I’m curious, are there other companies that have adopted Friendly Score’s approach in the same field but been more successful?
AC, thanks for the post! The capital letters thing kinda intuitively makes sense haha. I’m curious as to what some of these other alternative variables are.
Julia – I love this company! Your blog post reminds me of a video I watched about how inaccurate calorie counts are (https://www.youtube.com/watch?v=HGunZpKLb5o). There are legal requirements for companies to label the nutritional content of their food but there’s no verification around the numbers they come up with – how crazy is that?!
I wonder if one day, all food companies will be required to use a Clear Labs or similar to verify their numbers. This would certainly bring a lot more data into the space and hopefully bring down the costs and further improve accuracy of the Clear Labs process.
With regards to the art vs science conflict – I can certainly see why that would apply in the creative aspects of movie making. It’s interesting though that that sort of conflict would also carry over to the marketing side of things…
Thanks Chun! Absolutely agree that there’s a huge emotional component to real estate – particularly family homes. We can certainly see the more scientific approach being very useful for more standard housing stock though. OpenDoor definitely doesn’t try to ‘low ball’ people, but they do price slightly lower than market – it’s up to the seller to decide whether getting a few extra % is worth waiting…
Thanks David! Only being active in homogenous housing markets is actually part of the second tenant of focusing in on where the model is most effective – I touched on it briefly above 😉 Interestingly, you guessed exactly the two of the three locations they’re operating in!
I wonder if SpotAngels will really be able to transition to crowdsourcing parking availability. If its user base is broad enough, parking availability might turn into an efficient market – as soon as I see the free parking space on my app, someone else will already be there?
Thanks for the post, Tomo! Sometimes the pressure to be the biggest platform the quickest can really take its toll. It’s also interesting that you can run a good crowd-sourced reference website if you pay people nothing (e.g., Wikipedia) but adding a small financial incentive may do more harm than good.
Great post, Micah! I think this serves as another salient reminder of the power of internet trolls. (It brings to mind the time when a public poll resulted in a $300M research ship being named ‘Boaty McBoatface’ http://www.cbsnews.com/news/uk-asks-public-to-name-boat-boaty-mcboatface-leads/). The crowd may be wise but it’s also a wise-ass.
Thanks, Gil! Yes, this is a good point. Drivers have an option to choose between whether they want to deliver for short-term services (Prime Now, etc.) or regular deliveries
As a very strong ‘J’ in the Myers-Briggs test, the idea of travelling anywhere without a hotel booked terrifies me. Nonetheless, I like the idea of something like HotelTonight for people willing and able to face that fear. But, hang on, now they’re letting users create advanced bookings? Doesn’t this make Hotel Tonight the same as Expedia, Trivago, Hotels.com, Hipmunk, TripAdvisor, Kayak, Booking.com, Priceline, Hotwire, Orbitz, Agoda…Travelocity… …Hotels Combined… … …Booking Buddy… … …Hotelwiz… … … … … …
I like the idea of CarBnb (oops, I mean, AirCar) but I’m sceptical. I’ve used Turo once and the hand-off process was incredibly time-consuming as you had to wait for the owner to show up. Moreover, the cost was really high compared to rental cars (I had a similar problem with Zipcar…where are they today, anyway?) It’s also funny how the conversation centers around car utilisation – true, cars are heavy assets with fixed costs, but the marginal cost of driving the car out isn’t zero. The more miles on your car, the less it’s worth. Are drivers sufficiently taking this into consideration when Turoing their cars?
Interesting post Adam! The interaction between Zillow and real estate agents is particularly fascinating. On the one hand, concepts like Zillow are slowly making real estate agents redundant. On the other hand, Zillow relies on real estate agents for their revenue. I think this is a funny relationship in contrast to websites such as RedFin.com which very clearly come out as saying ‘the old real estate agent model is dead’. Zillow seems to be very cautiously biting the hand that’s feeding it…
Thanks for your comment, Micah! This is a really good question and one that I’m really struggling to get my head around. I suppose we can try breaking it out into two parts and see what factors influence each:
1) Will one player dominate all ‘last mile’ deliveries?
My opinion is that there will still exist multiple platforms for delivery, for two particular reasons:
First, the job to be done is slightly different for package delivery vs passenger deliver. Passenger delivery is inherently a very ‘on demand’ job where passengers can’t/won’t book cars in advance. On the other hand, package delivery is typically scheduled ahead of time (and should be to maximise delivery efficiency). Attempting to integrate the two types of service is possible but difficult and would probably be quite inefficient.
Second, I don’t believe delivery platforms is a winner-take-all market. Whether or not it is depends on the strength of network effects and multi-homing, right? Currently, multi-homing is incredibly pervasive in the market both on the driver and the passenger side. Moreover, network effects appear to reach diminishing returns quite quickly. Once you can get a driver in 3 minutes, the incremental benefit in having him arrive in 2 minutes is minimal. (To put a little nuance on it, this network saturation applies to big cities such as New York and Boston where there are far more drivers than would ever be needed to sustain a delivery platform. However in smaller towns, the network of drivers may only be large enough to sustain one platform at critical scale.)
2) Will delivery players also control the purchasing process?
I guess answering this requires thinking about the fundamental strategy question: are there sufficient synergies in vertically integrating? Optimistic me sees a version of the world where the answer is ‘yes’. Perhaps one day, Amazon’s data processes will be so sophisticated that they can use information on purchase patterns to route packages at a cost/efficiency that no one can compete with. More realistic me thinks that world is probably quite far away. Moreover, if you think about a company like UberRush that doesn’t have a large retail platform, the synergies aren’t strong enough to justify building a retail platform for the sake of the logistics platform.
Hi Felix, this is an interesting question. I see where you’re coming from. From Flex’s perspective, however, if these smaller cities don’t have a big ride-sharing base already, Flex would need to cultivate drivers from scratch. Furthermore, I believe Amazon pays fixed prices per package to the 3PLs. Consequently, it’s advantageous for Amazon to leave the 3PLs with the higher-cost-to-serve areas and start cherry-picking denser locations for their own internal logistics operations. In the long-run, this might leave the 3PLs with higher costs and cause them to increase their prices. But in the long-run, well, who knows what the state of Amazon deliveries will look like?
Ahaha thanks, Yun – glad it was educational 😀
Haha, that’s great James! Professor Lakhani couldn’t have said it better himself 😀
Great post! It’s hard to find a city in the world these days that TripAdvisor doesn’t cover. It’s unfortunate though that there’s a lot of stagnation with review sites as highly rated places continue to get more ratings. Consequently, almost ironically, I’m starting to seek out review websites with a SMALLER network.
I love the idea, but I’m always sceptical about selling software to the government given how slow it is to change. How does Mark43 think about this problem of how to sell the product? Have they had any success after the MA Special Projects Team?
That’s a good question Yuval. So they have been doing some integration (see: https://www.bloomberg.com/news/videos/b/134a9a0a-8924-43a6-8d81-46b4699cba9c), but it’s been quite slow. My suspicion is that 1) it’s quite difficult, 2) they don’t want to risk losing the Waze users (who are very highly engaged as A2017 points out above), and 3) the urgency is not there since the risk of a competitor acquiring Waze is off the table.