Thanks for this super interesting post, Curtis. While I agree that ancestry.com has a powerful database, do you think they are doing enough analytics on it to create value? The real value of genetic information comes from how that information is used to predict future possibilities, as 23andMe does by evaluating disease predisposition (as you have so insightfully pointed out as well). In such an environment, ancestry.com’s value proposition seems a bit weak, doesn’t it? As a user, I would prefer to know more about what diseases I could be predisposed to and how I can prevent them, as opposed to which region of the world were my ancestors from or what my ethnicity comprises of. That could just be my preference, but I imagine it would resonate with many people from our generation. Ancestry.com has a real asset in the form its database, but it needs to find creative ways to leverage it, otherwise it may find itself being overtaken by its competitors.
Thank you for your insightful post! I completely agree that Ginger.io is creating tremendous value for patients, and likely for pharmaceutical companies, providers, and insurers as well – especially given the lack of technological interventions in the mental health space. However, I would add to the list of challenges you have mentioned a key factor that I believe could derail Ginger.io’s business model – reimbursement. Reimbursement in healthcare in the US is incredibly complex and depends on 3 key factors – a decision by the CMS / private insurers to pay for the indication, a code that is created to represent the scope of that payment, and finally the decision of how much payment should that code represent. These decisions take into account cost of current therapy, expected clinical benefit to the patient, and potential economic value created with a better quality of life that the patient will enjoy. Therefore, as you can imagine, getting a positive reimbursement decision is quite hard because of all the hoops one has to jump through and for Ginger.io it will be even tougher because I imagine it will be challenging to quantify the clinical and economic benefit of a preventative technological intervention. No doubt it will create value for patients but quantifying that value and getting the CMS to agree to it is another ballgame altogether. The founders should very carefully think about how they will capture the value they will create – using the data and doing analytics on it could be useful because pharma companies would like that data but the real value capture can only happen if they get reimbursed for it through insurance.
Thank you for your insightful post! I am keenly interested in healthcare and DeepMind has always been a poster child for using AI in healthcare, especially after its high profile acquisition by Google. Your post correctly states how much AI and machine learning can add value to providers and patients, and how companies like DeepMind are building such capabilities. While I am super hopeful that such companies succeed, I have found that those companies with more limited a scope of what they’re solving are more likely to succeed. For example, BenevolentAI (another UK company that uses AI for drug discovery) has achieved much more traction in making drug R&D cheaper. Science 37, which leverages AI and ML for clinical trials only, has had a lot of traction with multiple pharma clients to lower clinical trial costs. Flatiron Health, which leverages data analytics to solve for cancer research, just got sold for $2B to Roche and has a powerful database that multiple healthcare players can leverage. In this ecosystem, DeepMind seems to be trying to solve for everything or rather, they seem to attempting to use what they have learned in previous AI applications to healthcare. I doubt if such a broad approach can succeed – it is like trying to find a needle in a haystack. I realize that this is another one of Google’s forays into healthcare but I wonder it the resources of DeepMind are being spent wisely. Nonetheless, I truly hope DeepMind succeeds in applying AI to healthcare – the world desperately needs it!
This sounds like a fantastic company, thanks for sharing Julia! I wonder if the incentive for the chefs is more about the additional income they will earn or the recognition they will get that they can use in the future to become more attractive to restaurants? This is an important question that CookUnity must figure out an answer to because the strategic direction that it takes will depend on it. For example, if it is more about how much the chefs will earn, then CookUnity should allow for variances in dishes that different chefs can prepare and users can opt to pay different chefs different prices for certain dishes because they like them so much etc. This will incentivize chefs to experiment more and produce interesting dishes. On the other hand, if the chefs care more about recognition, then CookUnity should develop partnerships with restaurants that allow restaurants to see the review data for each chef and customer testimonials so that these chefs can get better deals with restaurants.
Thank you for sharing such an interesting company. While the idea of leveraging collective intelligence to solve homework sounds perfect for the current generation of K-12 students, I wonder if they are truly learning if they are just posting questions online? I understand that you need a certain amount of points to be allowed to post online but if simple things such as logging onto the platform gets you points, then I can imagine people using Brainly as a simple way to get their homework done. This is obviously a pessimistic view and while I am hopeful that K-12 students would use this platform for actual learning (even if the underlying reason is peer recognition), chances are that parents might not approve of their children spending time on a platform where their kids can get their homework done for free. And as for payment, I highly doubt that parents will be willing to spend money to allow their kids to get their homework done – this is tantamount to saying that parents are paying an external third party to do their kids homework.
Thank you for your interesting post. I love the idea behind GoFundMe but always wondered how the platform could charge those in need (especially for things like medical conditions or school tuition). It would be totally understandable if it were a bank giving a loan for say school tuition but for P2P lending / donation, it leaves a bad taste in the mouth. I think the fact that they have now eliminated that fee reflects that they’re in trouble. Competition from established networks and new entrants and the increase in other ways in which people can help those in need means that GoFundMe is losing its customer base. The switching costs for users are so low when another P2P lending / donation platform emerges because GoFundMe doesn’t really offer something super differentiated. If it had, say offered an option where the funders could track how the money was used and facilitated structured interactions with who the donation was given to, I think that could have made the platform more sticky. I think GoFundMe should now sell to a larger established network such as a Facebook that may be looking to enter / expand within this space.
Completely agree with you! It will be very interesting to see how ZocDoc competes with the newer players and what barriers to entry is it able to build to prevent multi-homing. I think partnerships with other players in the healthcare ecosystem who can make the patient experience better and more depth and coverage of doctors in specific geographies may be a good starting point. Thank you for your comment!
Super interesting, thank you, Laura! Had no clue about this and it seems ridiculous! Why would you not allow text reviews for <= 2 stars! They should enable it for sure. You're totally right – not allowing it makes the platform seemed rigged somehow to be biased towards a good NPS. I am truly surprised by this and can' think of any reason why they would not allow negative text reviews. In fact, if I were ZocDoc I would eliminate doctors from my platform regularly if they fell below a particular rating!
Thank you for your comment! Fully agree that it can feel sketchy but I think it may not be as bad as you think. For example, just because a drug is advertised on TV doesn’t mean that everyone will think that it is not as good, right? Having said that, I fully agree that clinicians shouldn’t market too much – though creating awareness about their services is fine. Where that line is drawn though is will make a for a good debate between clinicians and ZocDoc! One way to do it might be customer segments – only do sponsored adverts for new customers on the platform, perhaps? Maybe that will feel less icky as new customers may appreciate sponsored results as they are learning how to navigate the platform?
That’s an interesting point! I agree that continuity of care is important, which is why patients are typically loyal to their providers. But don’t you think that you could use ZocDoc to easily check when your preferred provider is free as well? I’m sure checking whether your preferred provider was free or not at a particular time before ZocDoc was more cumbersome. Moreover, ZocDoc is not forcing anyone to choose one provider over another. Having said that, the worse overall experience you faced, while not ZocDoc’s full responsibility, will be attributed to ZocDoc, just as you did! Which basically means that they need to figure out a way to help patients ideally be routed to their preferred providers or suggest providers which are similar in nature perhaps to them. Thanks for your thoughtful comment!
That’s an interesting thought! Totally agree with you that ZocDoc could (and should!) form partnerships with payers. It would be value creating for insurers and patients because patients would get an added tool using which they can easily find in-network providers, which is often a painstaking task initially, and thus be more sticky with the payer. Additionally, ZocDoc would become more sticky for patients too!
Thank you for the interesting read, Shiv!
I know you have mentioned ITC as one of the players offer digital services to farmers but what do you think about their eChoupal initiative? Don’t you think that it disintermediates the need for a mandi completely? Clearly, the mandis capture a ton of value from the farmers for themselves and the services they provide can easily be done by someone else, especially someone like an ITC which is trying to be more vertically integrated and save its own costs and price fluctuations. I would imagine, as Hans has pointed out too, the digital solutions will emerge from downstream CPG / F&B players that will disintermediate mandis. It will take time but it will happen for sure. In fact, I know of several companies that provide specific vegetables / organic produce to restaurants that directly contract with farmers / farmer groups. With clear visibility on price on demand, these farmers don’t need to visit mandis anymore. Additionally, the emergence of tools like the NCDX and other agri-exchanges in India are revamping how farmers sell their produce downstream, essentially disintermediating mandis again. It is a good thing for both farmers and end consumers so I hope this trend continues 🙂
Thank you for such an interesting post!
Like one of the comments above, I had the same thought about how much is Netflix really a “platform”, especially given its increasing number of original productions? New productions are high capex, strategic, and will be distributed over multiple channels eventually. I understand that one may think of creating unique shows and movies as a means to reduce multi-homing but who is that really helping? Won’t Netflix benefit more by distributing its content over a large set of platforms over the longer term? Won’t the users (who multi-home a lot) benefit from being able to access content wherever they want? I think of Netflix more as a production house with a technology driven distribution channel, whereas a platform is a place that facilitates exchanges between buyers and sellers. If Netflix becomes the largest seller on its own “platform” and users buy directly from Netflix, then does it really remain a platform? I’m not so sure…
Thanks for your post – it was super interesting!
Do you think that the presence of Amazon may allow both users and liquor stores to multi-home or do you believe that this is a winner take all market? You seemed to suggest the latter with one of your recommendations being Drizly should consider being acquired but I think the former option could be a reality as well. For example, if somehow Drizly were to build a competitive advantage through some means – such as say, giving access to hard to find brands – it could build defensible barriers? I know the more likely option is Amazon steamrolling Drizly with its logistics capabilities and WF acquisition though. But given that the liquor stores will likely run the risk of being disintermediated by Amazon if they sell on its platform (like the X Fire Paintball case), I think it is in the liquor stores interest to not go with Amazon from a long-term perspective. But someone should make them aware of that – I hope its Drizly!
You raise an interesting point, Sairah. My assumption is that the indications for which these drug discovery companies will all be key areas for biopharma and biotech – cancer, cardiology, MS, ALS, Alzheimer’s etc – because these are the illnesses for which ‘blockbuster’ molecules have the highest probability of being created (market size, demand, lack of alternatives etc.). Therefore, the incentives are aligned. The only question is when will a drug get launched in the market, whose origins were in silico and not in vivo.
That’s the million dollar question, Ting. BSSE theories suggest that ideally these startups should someday be able to produce drugs themselves. Having said that, I personally believe that they will either give drug discovery services to big pharma / biotech or be bought by them. Either way, I hope the technology develops and better and cheaper drugs are produced!
You’re right, Carl, but it is still early days. The 24 drug candidates that BenevolentAI has apparently developed will first need to be clinically tested and after the trials are done their efficacy will need to be checked. The jury is still out on whether it has established good economics. However, it has certainly created value and seems to be beginning to capture some of that through its partnerships with big pharma and the $800M deal etc. Time will tell as to whether it (and its peers) can capture more of the value that will hopefully be created in the field of drug discovery.
Interesting point! So DeepMind will hopefully go on to do big things and really impact healthcare. If it does, it will be better for all of us. But if and when that happens, companies like BenevolentAI can still succeed side by side. There are many applications of AI / ML to healthcare and drug discovery is just one of them. I don’t think DeepMind has focused on drug discovery just yet but I hope it does because ultimately it will help the entire ecosystem, and eventually us consumers (patients). I would be very happy if Big Tech was able to disrupt healthcare and make it cheaper and better! But for now, BenevolentAI is focusing on a specific part of healthcare and has made great strides, whereas DeepMind is still searching for specific problems to solve.
BTW, DeepMind was acquired for around 500-600M in 2016 and Benevolent AI is around $2B by now – so perhaps the latter is not so small and nimble compared to it 😉
Hi Rachel, thank you for bringing this up. Once the drugs are “discovered” by companies like BenevolentAI, they still need to be tested in clinical trials, after which the FDA will review them. So, the overall process will be shortened (and therefore, cheaper) but the FDA’s role will still remain the same.
So IBM Watson is brought up all the time as a comparison. While no one really knows whether it actually has better AI capabilities for drug discovery than Benevolent or others, what we do know is that IBM Watson’s main use cases have been big data analytics and image recognition in healthcare so far. Nothing about drug discovery just yet. I would imagine it could be trained to do the same work as Benevolent than others but perhaps the folks at IBM have other uses in mind.
I think the answer lies in traditional scientists joining hands with computer scientists and doing the drug discovery work together. If each operates alone, faster drug discovery will not happen. Btw, this (joining hands) is indeed starting to happen at many large pharma companies now! Why else would big pharma be investing in these startups? 🙂
Thanks for your comment, Kat. BenevolentAI’s only source of competitive advantage as of now according to me is that they moved in early and they already have 24 drug candidates for testing, apart from partnerships with other pharma companies. Other companies like Insilico Medicine and Recursion also have drug candidates and pharma partnerships but BenevolentAI is the only unicorn with actual products (that are being tested). Who knows though, its peers may beat it eventually. But even if that happens, as consumers, we’d all still benefit!
Thank you for this interesting post! I own a Fitbit and like Carl above, stopped using it after a few months. My reasons were different from his though. Fitbit stopped feeling interesting to me – sure I could track my heartbeat, pulse, steps etc. but there was no “what next” from all that tracking. So what if I did 15,000 steps in a day? How had it impacted my chances of getting cardiovascular disease? So what if I completed my goals for a full week consistently? Did it materially change some relevant measurable medical parameter for me? I feel that Fitbit did not create an ecosystem around it, which made it lose its shine for many of its initial users, who could capture the same value from cheaper devices of Xiaomi or more fashionable ones of Jawbone. If Fitbit could have partnered with digital health companies, innovative payors who incentivize # of steps taken per day etc., then we’d perhaps be seeing a more successful Fitbit today because Fitbit would then actually be in a position of giving people insights, not just data.
Thank you for raising this interesting topic. I am a big movie buff and love going to the theater. However, as an international student, I have found most theaters in Boston to be sub-par, compared to the movie watching experience in many developing countries. As an example, a ticket to a good movie in Regal Fenway in Boston costs around $15-20, whereas the same movie in a similarly located and quality theater in Mexico City or New Delhi will cost ~$3-4. Even if you adjust for purchasing power parity, it still costs way more to watch the same movie with a similar experience in Boston. That’s where the battle has been lost by chains such as AMC. I fully agree that netflix and amazon video is perhaps the biggest source of threat; however, I would like to believe that movie lovers will still enjoy going to theaters, even if not as frequently as before, because the experience of watching a movie on the large screen is different. But currently that experience is average / bad in a theater such as AMC Loews – the theater seems way more run-down than any comparable theater in an urban area of India! AMC and other theater chains should first focus on improving the movie watching experience – back to basics – and then think of combating the threat of Netlfix and AR/VR.
Interesting post, thank you! I would agree with you that Roboadvisors are winners. They are clearly both creating and capturing value for ordinary retail investors, a space which has been long dominated by fund managers who charge a sizeable percentage of AUM. While I agree with some of our classmates above that the unit economics for robo advisors are currently in question because of high CACs, I believe that this is only because this concept hasn’t caught the awareness of retail investors at large yet. And I feel that is so because passive investing has only started to become more popular than active investing amongst retail investors in the last few years. After all, passive investing is the foundation on which robo advisors’ algorithms work. I would imagine that the day is not far when the bulk of the market moves towards robo advisors for retail investors (maybe institutional too some day but that day is much farther). After all, which retail investor would want to receive 6% through an active fund manager (actually only 4% after the fund manager’s fees have been deducted) but stand to gain 6% or more through robo investing? Once it becomes well known that passive investing through ETFs and index tracking funds are over the long term yielding similar or better results than active fund managers, robo investing will be the hottest form of retail investing.
Thank you for your post! I found this story very interesting and hadn’t actually heard about it, unlike most of our classmates. What strikes me as the most surprising is the initial price tag of $700 and lack of product testing with consumers, which ultimately resulted in this fiasco. I would imagine that founders thought they are catering to a certain segment of society who were ok paying that much money for something that perhaps wasn’t as valuable, when they first put the price tag. Their way of capturing “value” I guess. But, did they realize that they weren’t creating that much value in the first place? I would imagine the juice from a NutriBullet to be equally nutritious as their juicer. Did they bother to do a comparison? A big takeaway from this is how every entrepreneur should clearly articulate additional (consumer) value created from his or her own product vs competitors’. A second takeaway is a reinforcement from what we learned in TEM – do consumer testing iteratively until you have found your product-market fit.