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Thanks Sijia! I love the idea of adding a “like” feature to the VR experience. Similar to my responses to Tyler and Sidharth above, integrating with these platforms where consumers spend most of their time will be very important if VR sports is going to be a successful viewing experience. I hadn’t thought about the content generation piece but awesome point – it could provide either the NBA or NextVR to capture more value beyond the so far tiny VR consumers market.

Thanks for the note, Sidharth! I think you have a great point (see my comment to Tyler above). While I think Facebook is an unlikely acquiror, I could see a tech giant acquiring NextVR if they continue to be a leader in live events and VR shows more sustained momentum than 3D TVs.

Great points, Tyler – thanks for sharing. I think we are on the same page in thinking that the tech still has a long way to go until it is fully functional for an average fan to watch a game – but hopefully it is in our near future! Regarding multi-tasking, I agree that consumers nowadays (including myself) are guilty of multi-screening all the time. I think integration with other top apps (primarily the social media networks, as Sijia and Sidharth mention below) will be critical to make the VR offering compelling. If there is a way to see your phone screen or PC screen in a “window” of the VR display, it would eliminate the need to keep switching between devices.

Great post, Megan! Similar to Oyku, I have another partnership idea. I’m wondering what you think about partnering with another retailer – specifically Wayfair. I know Wayfair is also embracing AR in a similar way to Lowes by allowing customers to drop a virtual piece of furniture into their space to test whether it would work. Given that Lowes is trying to help customers visualize an end product, adding furniture to its offering could be more compelling for customers. I think there is very little overlap between Wayfair and Lowes products so there likely wouldn’t be a competitive issue. Furthermore, given that Wayfair is largely e-commerce vs. brick and mortar, there could be synergies in co-promoting in-store visits.

Great post, Anish! I’m wondering how STRIVR plans to enhance their sports content moving forward. It seems like they currently focus on simulating a football experience. Will they eventually record events to use real plays from the past? Maybe there is even the opportunity to use machine learning to collect game data on opponents and use it to predict what plays they would call in certain scenarios. Besides the meaningful player training value proposition you already mentioned, I would think this is an attractive avenue to explore.

Interesting read, Adam – thanks for sharing. One thing I wonder is why Virtual Rehab is pigeon-holing itself strictly to the prison market. While it certainly has potential based on your market summary, it seems to me that its capabilities would be easily translatable to other markets like trade schools, corporate employee training programs, and even something like self-defense training. While we have seen via some DIG-IT cases like Aspiring Minds that it is important to focus on one top-priority strategy, given the challenges you mention in the prison market (regulations, long sales cycle, etc.), it may be shrewd to test out other markets as well.

Thanks Yezi! I think your intuition is right regarding trying to maintain a community aspect of event experiences. That’s why I recommended that NBA/NextVR try to build in a chat or community feature similar to some group video games or apps. I also think that the NBA’s primary goal should be to target non-consumption – i.e. fans in other countries or areas – such that product is improving a previously deficient offering versus being compared to a premium experience.

thanks for the comment, Lidiya. No, I don’t think they should continue to grow human capital at the pace of new users. I think they idea is that their algorithms improve enough such that less stylists are needed to refine the results. On your second question, I think letting people wear the clothes definitely increases the chance that they keep them but I’m not certain how their branded partners would feel about this. Since Stitch Fix doesn’t own the inventory it would be a complicated task for them to get collective agreement on this policy.

Thanks for sharing, Anish! This would have been a great post for the crowd-sourcing assignment also as one other data source that drives Google Map’s high barriers to competition is the “local guides” function (https://www.google.com/local/guides/benefits/). To supplement its data-centric offerings, local guides provide photos, comments, and recommendations that increase the utility for users by adding the human element to Google Maps. As we have seen in several other scenarios, keeping the “art” in data-driven businesses is still important at this stage (i.e. scouts in football, buyers in Flashion) in technology development.

Thanks Noops – great read! I’m curious about how Netflix models value capture as it relates to acquisition and usage. I get that knowing data such as political dramas are popular is useful but how does Netflix know that a political drama is powerful enough to drive new subscribers or keep current subs? In other words, the Nielsen equivalent data is extremely useful to cable companies because (as you mention) they sell ads. The math is very linear; more eyeballs = higher price for ads and this informs what they can spend on the content. But Netflix has neither ads nor dynamic pricing (i.e. you don’t pay more for House of Cards), so how does it really know the ROI on any show? Do a user’s subscription dollars get prorated to each program they watch based on time spent? But what if only one show is motivating their subscription and the others are just “nice to have”?

Thanks for sharing, Megan. As many other comments mention, I agree that predictive analytics will only gain in popularity and customer acceptance moving forward. Following up on Meghana’s comment, I wonder whether there is an ethical way to monetize this data beyond Target. For example, other non-competitor third parties selling things that Target doesn’t carry (i.e. daycare companies) would be very interested in targeting new or expectant mothers. Maybe in the future, there is a way to anonymously target customer segments with useful third party ads/promotions. Or perhaps that’s a bridge too far for a B&M retailer.

Great point! I definitely agree that Dinner Lab got too big too fast. While more cities perhaps helps grow the brand, it offers no additional value to current users and is arguably not useful to chefs either as they can only open their first restaurant in one market. Focusing solely on one robust market like NYC could have allowed them to achieve a more efficient cost structure – for example, signing a deal with a real estate company to rent out 10 vacant spaces in order to drive down rental cost or bulk ordering from local food providers to secure volume discounts. Dinner Lab’s success in gaining paying users clearly demonstrates demand for a test kitchen concept. The tricky part is building a business model that effectively leverages the crowd feedback and efficiently creates the premium experience.

Thanks for commenting – I agree with your points. I think in high-end, creative businesses (fine dining, fashion, art, etc.), data is much less useful as (1) many consumers may not know what they want and (2) consumers are highly influenced by unscientific sources. Perhaps if Dinner Lab had focused on a more functional dining experience – for example, attempting to crowdsource the next QSR restaurant chain concept – the data would have been more meaningful and useful.

Thanks for the comment! I think your proposal would certainly be more efficient from a business model perspective but I’m not exactly sure how they would capture value in this scenario. I strongly doubt members would pay for this experience but perhaps Dinner Lab would be able to amass enough data that could be more successfully monetized via third parties. Regarding fixed vs. variable costs, my view is that Dinner Lab didn’t fail in attempting to spread costs over a a group of users (once an event was scheduled, one additional meal would only require marginal cost), but the fixed costs were simply too high for each event.

Great post, Meghana! Like you, I am an Infatuation loyalist but rely on TripAdvisor and Yelp when searching outside the Infatuation network. I know you mentioned restaurants can offer promos via Yelp but I’m curious about your thoughts on why Yelp doesn’t appear to be partnering with other adjacent businesses in the space to better serve its user network. For example, when I search for the local restaurant Island Creek Oyster Bar on Yelp and TripAdvisor respectively, TripAdvisor offers the option to book a table via OpenTable. Yelp, on the other hand, only offers links to the business website. My take is that this is a mistake but perhaps there is a strategic reason for this that I’m missing.

Great post, Mohit! I happen to be a frequent Wikipedia reader despite remembering my high school teachers always scolding that it’s “not a credible source.” I think it’s a difficult balance to have user generated content yet attempt to be consistently accurate. I have seen countless viral links of Wikipedia pages fraudulently edited with a “funny” change (https://www.buzzfeed.com/alanwhite/spectacular-acts-of-wikipedia-vandalism?utm_term=.vgzLLKQ67#.hnpMM5q6K). While most of these instances are, in fact, funny and probably harmless, I’m wondering whether you think Wikipedia will make add any additional layers of oversight given the recent attention being paid to “fake news.” I imagine as serious issues continue to be researched and discussed online, more malicious players may attempt to make more significant changes.

Great write-up, Michelle! I’m curious whether you think Reddit’s business model is sustainable. It sounds like targeted ads are the only current value capture but as you astutely point out, the core community has been resistant to being served paid content. Given that these are largely programmers and the site itself doesn’t appear to have a huge investment in UX/design, could a “grassroots” ad-free replica challenge Reddit if users decide to rebel? Or do you think the network effects of the built out subreddits are strong enough to dissuade switching?

Great post, Lidiya! What troubles me, as you nicely highlighted, is that there is so much competition in this space! Not only are the tech players involved but retailers also view it as a growth avenue. Under Armour, for example, bought three digital fitness products in the past couple of years and appears to be hyper-focused on building out its platform and extending the “wearables” label beyond wristbands to performance gear embedding with tracking technology. It seems to me that consolidation has to occur to some degree but I don’t know who will emerge as the power player. Do you have a view on whether healthcare, tech, or sports/fitness companies are best positioned to succeed?

I really enjoyed your post, Ali! This seems to be a traditional case of first-mover advantage and commitment to sustaining improvements propelling network effects. I’m glad you pointed out the introduction of “next generation” of local search ads. I think this is going to be critical for large and small retailers, alike, moving forward. As you mentioned, brick and mortar still dominates retail despite the high growth of e-commerce. However, it is very difficult to ascertain intent when a consumer searches for a brand of product online. For example, I could be searching for Walmart because I’m writing a blog post about them (and thus am not a potential customer in this instance). Walmart doesn’t want to waste a bid on me and Google hypothetically doesn’t want me to click and not buy because it will make Google’s conversion numbers look bad. Searching for Walmart on GoogleMaps, however, is perhaps the strongest indicator of intent across platforms and retailers will likely pay up for ads to this audience.

This was a great read, Sonali! Apart from some of the great observations noted in the comments already, I wonder how Craigslist has been able to remain simply a facilitator platform while likely the same users require a higher standard of service from other platforms (i.e. Uber, Amazon, Stubhub). Is it just because it’s free for users? Or because the user interface is so bad that users expect minimal guarantees? Or because the company has remained so private that people don’t feel like they’re interacting with a “big, bad” corporate? It seems that while Craigslist certainly forfeits revenue and some users in its current model, it avoids a lot of headaches in the meantime.

Thanks Ian- it’s great to get some feedback from a HotelTonight user! Here’s my take. Your intuition was right that online competitors may offer last minute rates to compete in the space. That has already happened and is certainly a threat for HotelTonight. I think this is slightly ameliorated by the pre-vetting that I mentioned in my response to Meili. Similarly, as you mentioned, HotelTonight is optimized for mobile, on-the-go researching and booking which further differentiates it from the online-first competitors. Finally, I do believe that Aces and, more importantly, HT Perks are designed to increase switching costs for current users. However, I think they will have to potentially forego some commission percentage if they want to maintain the best last minute deals. As HotelTonight is obviously not the only game in town, it probably cannot pull an Amazon and apologetically maintain commission rates.

I don’t have a great answer for your second question. While I would argue they HT still has ample room to scale before oversaturation, there is a risk that the app is training users to wait for discounts (similar to problems some retailers have). Still, innovations like the app’s dynamic, geo-based pricing can potentially address this. I guess only time will tell!

Thanks, Meili! Great question. I read a few articles that shared your same skepticism. While it certainly is a valid concern, my view is that week-out bookings still maintain a focus on spontaneous travel but broaden their market beyond the hyper-procrastinators (I, too, would be nervous to arrive in a city without a booking). Additionally, it’s up to the hotels whether they choose to offer week-out rates or not so clearly these players don’t feel adequately served by the current online sites. Finally, I think the players you mentioned don’t have a focus in terms of types of hotel (they offer everything from a motel to huge branded chains like Hilton). I think HotelTonight has shrewdly conveyed that they vet their hotel list to ensure quality and reliability which further differentiates from the other players and saves you the time of having to research each hotel (core to HotelTonight’s initial value proposition).

🙂 thanks Sonali!

Thanks Hao! You certainly make a good point that Starbucks benefits from a lack of digital alternatives to its core products. I don’t think this eliminates the fact that Starbucks has built and leveraged mobile assets to continually increase the value proposition to customers to win in the (competitive) restaurant space. With the digital revolution, customers are becoming more impatient and high maintenance as it relates to convenience and personalization. Restaurants who have lagged in utilizing digital to respond to this are facing problems with customers that can drop to the bottom line (for example, see some of the low performers here: https://arc.applause.com/2016/06/22/best-restaurant-apps-2016/). In my view, by making value-add digital innovations, Starbucks is protecting against the risk of defection.

Thanks Megan! I’m contemplating investing in a smart home device and this was a great overview of Alexa! Your mention of consumers slowly shifting to a fully-integrated smart home made me think of the GE Internet of Things case. Similar to GE wanting to win the race in providing a universal software system that gains value as it become pervasive throughout an industry, it seems that Amazon is attempting to capture the network effects from being the common digital assistant standard. As a follow up to Bipul’s point on the competition (namely in Google), I wonder if Amazon is doing anything more aggressive than allowing for an open system and pursuing partnerships. I agree that they are currently well-positioned with 7,000 partnerships but wonder if a Nest-like product, email/calendar functionality, or other Amazon initiative is on the way, given the high stakes in this market.

Thanks for sharing – I didn’t even recall that Amazon had attempted to enter the mobile game! Your post and some of the above comments provide solid reasons for the 2014 failure (an Amazon phone was not compatible with other consumer technology, app developers didn’t want to work on a new OS, etc.) but I wonder whether Amazon was also just a couple years too early. The success of Alexa proves the company can execute an integrated hardware/software product. Further, the combination of Alexa, Amazon Studios, and Prime create a pretty compelling consumer ecosystem which is only likely to grow as Amazon competes for share of wallet and time. While it would still be a very challenging feat, I think Amazon would have had a higher probably of success had it waited until it was more than just an e-commerce retailer in the eyes of customers.

Thanks for sharing, Ian! I enjoyed your take. While it certainly seems that our new President’s digital strategy was simply more effective than Clinton’s, it begs the question why the media was so out of touch. If Trump could reach these voters with digital ads, how could they be entirely absent from digital polling? I’ve heard the theory on hesitant Trump supporters being afraid to voice their thoughts, but intuition says the anonymity of an online poll should alleviate some of this. I don’t think anyone has an answer to this now and I’m sure experts will spend several years further diagnosing this election but what does seem clear to me is that the media needs to be as digitally savvy as the campaigns to better reflect the nation’s collective sentiment.