I’ve always wondered why software platforms like Netflix and Spotify don’t use their skills at AB testing to actually improve content. Imagine a scenario in which a production company releases two versions of a show premiere to a small audience. The show’s performance metrics could be analyzed can be analyzed to determine which version was more effective in capturing user engagement. Netflix has the ability to determine where users dropped the show (if at all), where users paused, fast forwarded, etc…Imagine being able to test where your shows weaknesses are, allowing the production company to make changes before the show’s actual public premier.
The same can be done (with less work) for songs on Spotify. Spotify knows when users skip the song, trends in listening pattern, etc..and can help artists improve their content.
Hi Britt. In the long term, Uber is working on their own mapping software. In the short term, Uber is actually integrating their platform with WAZE. WAZE has proven to be a better and more reliable platform than Uber’s proprietary technology. Uber recently hired one of Google’s top engineers who developed google maps – an indication that they intend to compete head on with WAZE in the medium/long term.
It’s a good question. However, the data that the other companies collect is not necessarily relevant to Uber’s role as a taxi business. Regarding your second point, Uber will shortly integrate their map application with WAZE, but I think it would be hard for a map program to compete with Uber. However, Google is competing with Uber for control of autonomous vehicles.
Thanks for the comment. While I agree that acting as a transportation company may be interesting to Uber, I disagree with your first point about attracting top talent. Having worked there, I see the conflict and inner strife that is caused by the inability to progress upwards. As soon as the outside world catches on to this, they will have a problem attracting talent. In the short term they’ll continue to attract top talent. In the medium term, they’ll see their current employees switching jobs once they’ve been working at the same position for 2 years without any room for growth.
Interesting article! I didn’t realize how much they had paid for house of cards, nor the way in which data was used to determine success of the series. I wonder if Netflix could utilize this software advantage to start their own film financing studio. Relatively Media was started about 10 years ago – they were successful in choosing and financing profitable movies. They determined the probability of a movies success using in depth data analysis. They were one of the first companies to utilize this predictive algorithm, as opposed to just a “gut feeling.” Netflix has much more data than Relatively, so they’re in a position to accomplish the same task – but better.
Interesting article. You bring up two interesting points when it comes to value capture – online store and ads. I wonder how much revenue they are actually generating in both of these segments. It seems that as long users exist, ad revenue can be sustained. However, how sustainable is an online store when it’s so easy to compare prices on products online? They’d have to offer unique products unavailable on any other platforms. This would require a unique skillset of food52 managers – sourcing unique food related equipment.
There’s also the challenge of developing two separate skillsets to maintain the food52 platoform. On one end, managers need to be proficient in encouraging new people to sign up for the platform. On the other hand, the organization needs to develop the capability to properly motivate and encourage top chefs from staying on the platform. I’d assume that some of the motivation will be monetary. Also what’s to say that a top chef will not leave the platform and start their own?
Interesting article. I’ve been using product hunt for quite some time, and love the website. I’ve discovered many interesting products that I’ve used for my business and in my personal life.
I found product hunt’s series A funding incredibly interesting because I would have never expected that a company would need millions of dollars to create an upvoting platform as simple as the one they operate. On the surface, I’d expect a minimal investment in the technology behind the website. However, the high price tag shed’s light on the difficultly of creating, and monetizing, a crowdsourcing platform.
I’m interested to see how product hunt will begin monetizing their content while maintaining the same level of user loyalty.
Interesting article. I’ve been using HooteSuite but did not realize that they crowdsourced their customer service.
There’s clearly a tension between crowdsourcing and control. The more your crowdsource, the less control you have over the indiviudals who are the face of your company. With employees, you can better control what they say, how they work, their tone, etc..
There’s also an entirely different set of skills required to motivate crowdsourced ambassadors than full-time employees. E.G. creating Hootups is not a skillset I’d have learned as a professional manager at P&G.
The option of crowdsourcing or not will come down to cost, control, and your organizations managerial skills.
JI, I think the point AK is trying to make is that the network effects require trust in the platform. In this case, vendors are not always confident that BITCOIN is a trustworthy network. Just a couple years ago, there was a big scandal in which one of the main bitcoin players stole millions of dollars out of the system because he had inside information. Vendors are the ones required to use their own capital to potential reap the benefits from the users. If at some points bitcoin decided to “close shop” or if the founder decides to take all the wealth out of the system and into his own bank account, these vendors will have lost a lot of time and money. Platforms such as amazon, apple, or outlook have an inherent trust because of their transparency, something that bitcoin completely lacks.
Thank’s for the post.
I agree with you that clever has done a great job so for. In the future, Clever may break into other services such as providing education material for schools. Many of the poorer schools struggle providing learning plans for their students due to the high cost of development. A program like clever might attract content providers, which allows schools to “plug and play” learning plans depending on the students. Imagine being able to adjust your learning plan every year with the click of a few buttons. Having “vendors” in math, science, engineering, etc… that sell their services for a small fee (but to many users) would benefit both the school and the content creators. This would also allow for rapid innovation in lesson plans – think videos, digital content, interactive content, etc… – without the school needing to make the large investments.
The difference between a winner takes all market, and a market in which two companies can exist, depends on the type of service being provided. In the case of Periscope vs. Meekrat, there is little differentiation between the two products. They provide the same service, to the same type of customer. Some might say that Uber and Lyft provide the same service to the same customer, but they co-exist. However, the main reasons that users multi-home between Uber and Lyft is either surge price or driver availability. In the case of Periscope / Meekrat, there are no limiting factors such as price or supply of drivers. Hence, there is no reason to switch from one service to the other, except for direct network effects. Users will pick one platform, and stay on it. Direct effects are the only reason keeping users on one platform versus the other, and that’s why in this battle there will only be one victor. The only way Meekrat can survive is if they serve a different niche customer that refuses to go to another service.
This article reminded me of a piece I read about Snapchat’s massive growth. Both companies started as niche players, targeting a specific group of people. Snapchat for questionable photos, and buzzfeed for highly social content. Snapchat has now become a source of city information with their “stories” feature, and have expanded their regular chat capability. Buzzfeed has also increased their offering as their user base grew. It’s interesting to see the parallels of companies which start narrow and need to expand in order to monetize their network. As an entrepreneur we can learn from these companies and predict some of the challenges we will face if we follow this same model.
Interesting read Angela.
At the outset, it seems that this technology can have a lot of positive impact for corporations. The sentence that struck me the most was “The idea is that the information provided by the software will allow the customer support agent to rapidly change their style to match with the customer’s preferences.” What worries me is that employees will need to be really well versed in the technology and in human interaction to be able to match their customers preferences on the fly. Considering the pay that customer support employees receive, I think it would be hard to motivate the employees to become experts in human interaction. I see this as more of a skill a trained interrogator or detective would have.
I do think that this technology has some great potential, especially on the national security side.
I agree with everything you’ve written, and have used Venmo at least 5 times today. How do you think Venmo can maintain it’s competitive advantage in the long run if their competitive advantage is only it’s user interface. If there is no advantage in the underlying technology, in theory, a competitor with a large subscription base (Chase/CitiBank) can replicate the application.
Venmo will need to be smart about monetizing their application in a way that doesn’t turn of the Millenials they’ve managed to attract by not imposing any fees. It will be interesting to see what they come up with.