 In the past decade and a half, I have seen entire industries being disrupted by upstarts using absolutely none of the traditional resources businesses needed in the past to keep growing. Examples: Uber vs. Taxis, Twitter vs. the Press, Netflix vs. Cable. Uber doesn’t own a single car, Twitter doesn’t have a newsroom, Netflix doesn’t own a content distribution network. How are they doing it? They’re all platforms, they use technology to connect and manage supply and demand in real time. Platforms are powerful because they eliminate gatekeepers and create community feedback loops called network effects. Example: more demand attracts more drivers, more drivers increases geographic coverage, more coverage gets faster pickups, fast pickers means more users join the platform, and so on. In turn, driver downtime goes down, which reduces prices, which leads to more scale. In the past, dominance was achieved through supply economies of scale via increased production efficiencies. Today, it’s all about creating demand economies of scale using technology on the demand side to create ever larger networks of value and scale. Building a platform: This isn’t about creating a good or service and channeling it to customers! First, a platform starts with enabling a direct interaction and the exchange of value between participants – producers and consumers. The platform also enables the quantification of value by creating a sort of value unit between participants. Example: for AirBnb the value unit is the listing information created by the seller that is served to buyers based on their search criteria. Second, platforms are really good at attracting users and encouraging interactions. The most difficult is to generate pull because it’s pretty much a chicken-and-egg-type problem: users won’t come to a platform unless it has value and a platform won’t have value unless it has users. The solution to that is called the feedback loop. Example: Facebook realized it had no value unless users had a meaningful number of connections. So instead of trying to get more people to the platform, they focused on getting the existing users find their friends and help them connect. Third, platforms use the data they collect about producers, consumers, the value units created and the goods or services exchanged in order to get the best matching between supply and demand possible, and most importantly, in real time: the more data a platform has and the more effective it becomes to use this data to foster more effective matching and more interaction the more successful it will become. That’s the feedback loop. Iterate to remain: Once a platform has established its core interactions, it’s time to iterate by layering more peripheral interactions on top of them. Let’s by the way take this with a grain of salt, as we need to remember that platforms aren’t entirely planned – most of the activity is controlled by the users which means platform builders must allow themselves to expect serendipitous discoveries by closely monitoring usage behavioral data to unlock new value … Uber X and Uber Pool are great examples, cloud kitchens and Doordash are also coming up to change the way we eat (see my note about cloud kitchens here). Let me know what you think! DM me @philippemora
My name's phil mora and I blog about the things I love: fitness, hacking work, tech and anything holistic. Head of Product and VP Engineering. thinker, doer, designer, coder, leader.
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 We’re already 6 weeks into 2019 and we’ve been super busy working on changing the way you see healthcare at Sikka – meanwhile I have not found the time. Here’s what I am tracking in 2019 besides digital health and ai --- passionate about food tech and autonomous vehicles, especially the secondary disruptions they’re going to foster (example – autonomous vehicles and real estate values, food tech and home/apartment design) Cloud Kitchens Cloud Kitchens and its sister company Cloud Retail are the two arms of the new venture from Uber co-founder and former chief executive, Travis Kalanick, which was formed with a $150 million investment. Cloud Kitchens are commercial kitchens designed for on-demand food prep only: they don’t have dining rooms and thus not only avoid the costs associated with them but also are able to focus on their food assembly lines and methodologies to maximize yield. Cloud Kitchens distribute their foods on platforms like DoorDash, Uber Eats or Postmates. That’s the obvious but the real disruption isn’t there – its inside the cloud restaurants’ digital storefronts and the user data they generate: in near real-time they can A/B the menu items and adapt to user tastes and preferences. We’ve already seen that with startups like Stitchfix, here the data is applied to food tastes and demand. Basically the menu product is evolving as you know what your customers want to order. Right now we see 10100 (Kalanick’s investment firm) building a network of these cloud kitchens to service the supply-side of the delivery platforms such as Uber Eats. The goal is to build the infrastructure and platform software to enable them to open delivery-only location in minimal capex and time. This is doing two brilliant things: first, we can imagine that the role of the Chef can evolve from one-kitchen one-menu location, to one-cloud, multi-kitchen locations. In a way we’re evolving from theme-based dine-in chains to customer-centric, taste, quality and creativity-based food choices, all of this available at the tap of a mobile button. Whereas we saw for the past 5 years delivery platforms getting their food items by begging established brick-and-mortar, dine-in locations in order to seed the funnel and establish demand, more and more today we see the same locations now begging for real-estate on the very same platforms as demand is shifting to the cloud. As Cloud Kitchen networks develop we are going to see further vertical integration thus reducing the need for dine-in facilities (those are going the way retail is going today) – and once established they’ll invest in Chefs and will complete the full redefinition/disruption of the category. Driverless Cars The autonomy ecosystem: we know that autonomous vehicles, whether it’s trucks or cars are set to disrupt the auto/trucking industry (and directly associated like insurance cos) as we are going to see a shift from individual ownership to fleets of driverless cars. I am pretty sure that people who are born today will never have to learn to drive. This creates massive new opportunities. So let’s have a quick look at the secondary disruptions. (and if you want more info about all the other stuff that will change beyond the car… from public infrastructure, the automotive value chain, and energy, to finance (including insurance), the justice system, and shopping too – and most importantly when do we think this will actually happen: check here. By Frank Chen (@withfries2) is awesome.
Let me know what you think! DM me @philippemora
My name's phil mora and I blog about the things I love: fitness, hacking work, tech and anything holistic. Head of Product and VP Engineering. thinker, doer, designer, coder, leader. |
Product Builder in Colorado. travel 🚀 work 🌵 weights 🍔 music 💪🏻 rocky mountains, tech and dogs 🐾
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