Really interesting post, Alon. I didn’t realize the extent to which they were utilizing the loyalty cards to extract additional data about members’ stays etc. Feels a little big brother to me. I’d wonder how successful this would be as a competitive differentiation given the high turnover of customers in this industry and the ability for other casinos to replicated.
Another threat would be disintermediation. I could imagine that many of the biggest clients would want to hire their own sophisticated talent if they think the utilization of those data scientists makes sense. That way, particularly sensitive clients like intelligence agencies would maintain control over the process.
Interesting post. There are many in the creative industries that say that content production is a “gut feel” and not driven by empirical data. I think this is a great case to challenge that. Data analytics could be used in a number of ways – primarily to make the filter for content production and delivery more efficient and effective.
Appreciate your perspective on the competitive landscape for Wikipedia. Seems like their value creation will really be called into question with other major players. I particularly think Google results presents a threat, since it often displays summary content directly from Wikipedia and greatly reduces click through to Wikipedia if a user only needs a high level overview. Perhaps if they had a more robust value capture model all along, they would have thought about ways to make the platform more sticky…
Shame that this application was so abused since it clearly has value to users. I really liked your assessment of the downfall of unmoderated crowdsourced data. Clearly, similar applications to SketchFactor that utilize reliable data (i.e. police reports) are more successful, if not as entertaining.
To improve the application, SketchFactor could have stolen another product feature from Waze: self-moderation. In Waze, other users are able to “clean up” the data as time goes on — e.g. indicate that there is no longer a cop on the side of the road. In SketchFactor, there could have been a Useful/Not Useful indicator to remove useless notes, or perhaps indicate if a “sketchy” incident (graffiti, abandoned buildings etc.) had been remediated.
I really appreciated your assessment of M&M’s strategy – In crowdsourcing campaigns, companies often make a tradeoff of control by relinquishing choice to the crowd. In M&M’s instance, they limited the choices and thus maintained a good deal of control in this market. That seems like a really good option for something like an incremental product change / promotion tactic. However, companies that want to truly innovate or adapt to consumer demands may need to open up their development more… perhaps not to Biscuit and Gravy Lays though – gross.
Great post – particularly your assessment of both the direct and indirect network effects in play.
You hinted at “natural attrition” in your post, but I thought this was worth highlighting as a really big concern for the company. Disintermediation would seem like the company’s greatest retention issue, where high quality care givers build a sufficient book of business and no longer return to the platform. It would seem that the many strategic moves that they’ve made recently, like HomePay, are actually to increase stickiness of the system – not just value capture tools.
Great post and interesting company! I’d be very interested to understand how (if at all) the company’s operating model has been adjusted due to network effects. Specifically, as it scales in a geographic market, do they offer discounts, reduced transaction fees, etc. to encourage the best trainers and coaches to sign up? The current model seems particularly steep… especially compared to other, relatively frictionless options, in different markets like training centers, gyms, youth leagues, etc.
Agreed with Jon. It is clear that network effects are in play in the relationship between borrowers and lenders – i.e. borrows are better off as new lenders are added to the platform – but less clear between the addition of borrowers with new borrowers. In fact, I could see diminishing value in adding additional borrowers for a few reasons: 1) I, as a borrower, need to compete for the attention and funding of limited lenders; 2) the proliferation of too many users (potentially SMEs turned away from other traditional financing) could undermine the lending quality that exists on the platform, in turn dissuading lenders from coming to P2P lending platforms.
This is a great assessment of the ClassPass value creation on both sides of the funnel. I particularly appreciated that you didn’t shy away from the potential downside: class seat cannibalization. This has been a big hurdle for ClassPass and its competitors in establishing partnerships across cities.
You also touched on new customers as an avenue for customer acquisition, but I’d just open that a bit further because I think it’s a huge source of additional value creation. I would imagine that as the ClassPass user base grows, the (albeit harder to quantify) marketing exposure on the ClassPass platform is well worth the margin shave on early ClassPass partnership for smaller, niche studios. It’s such a low-risk way for users to come to your studio and give it a try. Even if you don’t have many spots available, the brand awareness could be invaluable as the studio grows.
I also agree that LinkedIn is a true winner in this space… so much so that I also wrote my blog post about LinkedIn. However, it seems like we both see different value creation within this company: whereas you’ve emphasized more of the value creation for professionals, I’d assert that value creation for recruiters/employers is equally if not more valuable. It is with this constituency that LinkedIn has been able to capture the most value (>60% of revenue last quarter from “Talent Solutions” not user subscriptions). Both sides are obviously important in a platform with reinforcing value loops, but it seems that we’ve brought two different perspectives to the table. Really interesting to see your thoughts!
One concern I have with the Kickstarter value loop lies in value creation you identified for entrepreneurs: “And the best thing? the money pledged comes with practically no strings attached – your contributors get no equity (moreover, it’s in fact unclear whether you even owe them the service/product you offered in exchange for their contribution).” This is potentially very negative for many contributors who are so integral to this feedback loop.
With stories of so many Kickstarter campaigns that never return the promised goods, I could see potential for devaluation of the network. In fact, I’d be very interested to see metrics on the ratio of multi-campaign contributors are and the retention over time…
There is an interesting article from last year on the Verge (see link below) that talks about possible disintermediation of Kickstarter by equity-backed crowd-funding campaigns made possible by changes in investing regulation. Could spell out trouble for Kickstarter.