Thanks for this insightful piece. While I am thrilled by the fact that pragmatic advertising increase market efficiency and creates value on both the supply and the demand side, I wonder if this is enough to “disintermediate” ad agencies completely. I would imagine that they could still create value with their experience and human “intuitions,” especially with the larger and more strategic assignments. I am hopeful that eventually even these more nuanced judggement calls could be automated as technologies develop, but I have a fear that ad agencies may be eliminated too early and certain advertisers may suffer as a result.
Thank you for posting this interesting piece. I very much agree with you that in the face of digital innovations, traditional businesses should not forget that their core value creation is still valid, at least in most cases. The key question should be how to adapt to and embrace technologies to continue to deliver their core value. Domino clearly exemplifies this principle.
In the case of Pizza Hut, there could be two potential explanations for its failure: 1) it failed to deliver its core value – make and serve good pizza; 2) it simply failed to successful leverage technology to enhance its value creation. My guess is that it is a combination of both. Apart from failing to digitize, Pizza Hut may also have failed in operations, marketing, franchise management, etc.
In addition, there might have been a secular trend towards take-out from dine-in. Pizza Hut, which is more skewed towards dine-in, suffered as a result. This is not necessarily a fault on Pizza Hut’s part, but definitely raises a bigger strategic question as Pizza Hut considers future store distribution, store distribution and etc.
Thank you for sharing your insights on Rappi.
This is interesting model that focuses on the logistics piece of a wide range of business activities rather than focusing on specific verticals (e.g. ecommerce) and providing a full suite of services.
I am curious as to the stickiness of the merchants on the platform. Is there risk that the service becomes commoditized and makes room for new entrants? In addition, logistics has traditionally been a labor-intensive and low margin business. Will this be Rappi’s fate as well? If Rappi were to counter this trend, perhaps it could consider expanding further into the transactions by providing services such as payments and digital marketing. Companies such as Grab and GoJek in Southeast Asia have taken similar routes, although the potential is yet to be seen.
From the consumers’ perspective, this is a very compelling offering. Who would say no to having someone always on call to run errands? However, this is conditioned upon having ample supply of cheap labor. Will it be sustainable in the long run?
Thanks for writing this interesting article on Via. A few thoughts about the business model and value proposition.
Scalability: I echo Li’s point on scalability for a slightly different reason. Via differentiates itself almost as a larger version of Uber pool, with the goal of filling vans/minivans with passengers travelling the same route. Cities such as New York City are perfect markets for Via because of large population densities, dense road networks, abundant walkways, all of which make it easier to match passengers travelling similar routes. This, however, is a very rare combination. In fact, most cities in the US but for a few do not have these attributes. As a result, Via would have a hard time expanding into new cities and still manage to fill minivans. If occupancy is low, the large vehicles Via operates would become a significant disadvantage. If Via uses smaller vehicles, it would lose its differentiation from Uber and Lyft.
Alternative models: A potential opportunity for Via could be o offer commuter shuttle services on popular routes during rush hours. A similar services is being piloted by Didi Chuxing in large cities in China (link below). Under this model, Via only needs most of its vehicles during rush hours. To maximize utilization, Via ca rent buses from existing bus owners such as tour companies, or rent its fleet out during downtime.
Thank you for this interesting article. Twitch’s strong user engagement always fascinated me.
The question that comes to mind is whether Twitch will be able to successfully expand beyond gaming.
Gaming and general videos / livestreaming have significantly different user bases – gaming targets a small set of users with very high levels of engagement, while general videos and live streaming caters to a much larger audience base who, on average, are less engaged.
Twitch also needs to accomplish this in the face of severe competition. As a three-sided platforms connecting viewers, content creators and advertisers, Twitch will be especially difficult to scale. The good news is that it has Amazon’s support. Amazon provides not only deep pockets, technical expertise, but most importantly, the need to compete with Google at all costs.
The final question is what Twitch aspires to be eventually. Does it want to copy YouTube and become what Bing is to Google Search, or should it develop a differentiated experience and be what Alexa is to Google Search.