I only became aware of Steam recently, and am deeply impressed. I was interested in downloading “Rome: Total War”, a game I had loved as a kid. I was disappointed to find that the only way I could buy it was buy downloading some strange platform called steam, which I didn’t particularly want on my computer. In any case, I downloaded it, and bought the game. After that, every time I went to play the game, I had to go through Steam. This got me thinking. What about “Rome: Total War II”? What about expansion packs? What about other games I had loved as a kid? Suddenly, these were all at my finger tips, and available at pretty reasonable prices (think the original Rome cost $10). For someone who games a lot I’m sure this wouldn’t have been news, but it was impressive to me. Where I might not have bought the game at all ($0), now I was worth $50-100 as a customer. All be cause of a smart platform…
Sidharth–a timely question! I was wondering the same thing, and have been reading about this company R3 that is doing just such test. I’ve dropped a link below about a recent one. The firm’s approach is to put together a consortium of banks, get them to agree to allow R3 to run tests where they move their ledgers from traditional systems to blockchain systems (in this case, using Ethereum!) and see how it goes. From a technological perspective, this seems to be a wonderful development: business practitioners are hearing the calls of technologists, and taking advantage of innovation for practical and creative applications. I wonder if it should worry us, however, that firms like R3 could stand to capture all the value from implementation of these types of innovations. If, for example, R3 can save Morgan Stanely $10M per year, surely R3 can claim $1M (just making up numbers). Ethereum will capture none.
Love this discussion! Question: Isn’t there a limit to how much better an algorithm can get? I’d think that at a certain point, throwing more data in doesn’t yield significant improvements in yields. I realize the question is probably a matter of “well yes, but at what point?” So, for instance, if after 10 years in 50 cities Uber is still improving its algorithm, then I think I’d agree with you that only a few winners are likely to emerge. If, on the other hand, Fasten can offer an algorithm with data from just one city, for just a few years, which offers a comparable experience for drivers and riders, then I would argue that the “returns to data-scale” are actually quite low. In that case, Uber’s algorithm won’t provide a barrier to entry to protect it from upstarts. In sum, my concern is that a 10X better algorithm isn’t really possible. If not, I’m not sure what barriers exist to keep Uber from suffering the airlines fate. Am I thinking about it the right way?
There has been a lot of heat on the FinTech sector in the last decade. Sometimes I wonder if it is only because of the number of bankers who wanted to get out, and viewed it as the most logical bridge. In any event, the progress you’ve described is really striking. What I appreciate most is that Betterment (and their competition) and come to see the value their customers put on human interaction. The truth is there are plenty of tools out there that help us keep track of data and run analysis. Often what people crave most isn’t another tool, but judgement. Just as we defer to doctors and lawyers, it is reliving to defer to a financial adviser; even if you suspect you could do a better job yourself. Pure software plays miss this insight into human behavior. Often, it isn’t that we don’t know how to make good decisions, its that we need someone to help make the decisions for us. Great blog!
I’m with DK_22. NYT’s problems appear temporary to me. The last few decades have been difficult, yes, but NYT’s challenges have been all form and no function. What is really critical to NYT’s ability to create value hasn’t been the format, whether paper or print, interactive or static, but its credibility. It took decades to build the NYTs reputation, and despite President Trump’s claims, that reputation does not appear to have waned much. The bottom line is that for millions of readers, a national story isn’t news until the NYT features it. When you have power like that, there are many ways to monetize. The real trick is monetizing without damaging your credibility. While this has been a challenge, so long as their core asset–credibility–remains intact, the NYT will have plenty of time to play with revenue models. I, for one, would like to see a little more price discrimination. There ought to be a way to charge wealthier folks higher rates. Love your blog!
There’s been a lot of press around Trump’s digital efforts. There seems to be less clarity on the tactics the Clinton campaign was employing on the web, or at least there has been less reporting. Do we know, for instance, that the Clinton Campaign didn’t have a database similar to Project Alamo? The impression I’ve gotten when speaking to Clinton people is that they were employing all the same tools. Dollars invested aside (since this figure is somewhat unclear), can we say for sure that Brad and his team were doing something entirely novel, AND that this delivered Trump the election?