The challenges you mentioned were the ones I also thought of when thinking about the viability of a tech business that has an army of sales people and consultant like people to deliver on a relatively simple product. Yes their platform can decipher unstructured data and assess sentiment of customers towards a brand, but it did not seem like anything a company couldn’t really do on their own if they cared about customer service (i.e. Caesar’s Entertainment has a team of statisticians to figure out logistics and customer service aspects, so nothing a good old regression could not do.) Also, once a customer learns the techniques of data analysis (i.e. what your software looks at), the value they get out of the product is likely to decrease. This would only work in companies that assess very methodically and rigorously the customer feedback, and for the vast majority of companies this is not a monthly task. I am sort of bearish on their ability to prove and get compensated for their value add.
I also was one of the early adopters of Mint hoping it would help me get a hold of my finances but then the app’s inability to categorize all my purchases made me grow cold of it (literally a big chunk of my expenses were in the “uncategorized” area, which defeats the purpose of the “analytics value add”). I still don’t see how they would be able to make money, because the customer who uses the services of Mint most probably doesn’t need yet another credit card. Whereas a company like Nerdwallet, to which customers go to seek specific information about what credit card is best of them, is much more successful because the analytics they run fir the needs of the customers. I see a case of mismatch of product vs. value cretion vs. customer needs.
Great post Chang! I love that this system ensures equitable participation from all students, thereby enhancing student engagement and bringing people to the same level, at least in terms of quantity of participation, also eliminating the “teacher’s favorite” problem! It is also great for students who are able to get real time feedback and do not have to wait until mid semester to see how they really perform. The technology is far from eliminating people but enhances their abilities and makes the product better.
Great post, it’s good to see the company has responded to the crowds’ worries and has kept its relevancy with the users / almost became a household name. I think the local aspect of the platform is an asset so people can focus on what is relevant and spend less time selecting the right person for the job. I wonder how TaskRabbit will protect its marketplace or relevance with competitor services such as Thumbtack pecking directly at the local services market and allows people to get quotes from professionals (no 3 person limitation). Thumbtack still has the bid based approach and at this stage it’s not very clear which is preferable to which party. As long as hourly rate is a reflection of efficacy, professionalism etc Task Rabbit’s model should work just fine. Thumbtack’s “pay for introduction model” is I believe a superior measure of ensuring the customers get quality bids, similar to Upwork’s model. Future will tell how Task Rabbit will respond to the aggressive move of Thumbtack and other services.
Interesting post – I also had an experience of places that got really good reviews and I was underwhelmed when I actually went. Yes, there is a “standards” problem, but I’m not sure how Urbandaddy solves this problem. First of all, who is behind Urbandaddy’s reviews? This looks like curated content, which is arguably more prone to “biased” reviews. If the argument is to add Urbandaddy’s functionality to Yelp, we are still stuck with the same crowd providing reviews, and I don’t see how Yelp would be able to segment the users by tiers of “high/medium/low standards”. We may just have to live with the fact that the average on Yelp is an average of average tastes that are supposed to please the majority of people, not necessarily the 1% 🙂 That being said, there can def be another app to cater to the people who have high standards and a fine palate, Yelp just was never meant to be that.
I like the consumers are made part of the creation process and given ownership (perhaps not in the form of equity upside but they are given a product that they wanted and did not exist in the marketplace), that is what I had recommended for Lime Crime, the company I wrote about, in order to increase the engagement of the crowds even more and create more loyalty. That would however be more in the realm of “what shades in what product category should i create next”. In Julep’s case I wonder if the products that get created are too niche-y and don’t have any further sale potential that that core group that helped create it (aka will they ever make money with this strategy). My guess would be that they will have to come across some sort of “Pebble Watch” of the beauty industry to win big with a couple blockbusters but the majority of the products will probably be too niche-y. Which may be not a bad strategy after all 🙂
Great topic! Another way the value of the network these schools provide is at threat is that many very successful people who come up with ideas that their current environments cannot support go ahead and drop out. There are even some high net worth individuals out there who are willing to give great sums of money to college entrepreneurs to drop out and pursue their venture. Then there is this new breed of people who have figured the real life education they need is not the course material at any university yet and they turn to other solutions such as the MOOCs or other sources that cover more topics than any university possibly can. When push comes to shove, I believe the current value of the old school network becomes a “nice to have”, and now there are new models of universities that are disrupting the space (i.e. Minerva Project that is co-founded by a Harvard professor http://about.minervaproject.com/) and cut to the chase by promising their students nothing more than a truly valuable education. We shall see in the coming years whether the universities as we know them will be able to disrupt themselves and see what more they can offer to keep up with the requirements of our age.
Very interesting read Chang! I was left with more questions than answers after we both visited the company headquarters last December and met the founder. Since you had the first-hand experience, I’d be curious to know more about the following: 1) On the “active learning model”, how tried and true do you think this is? Having also worked at an educational startup this past summer, I am struggling with the concept of getting acceptance on an industry-wide basis and validating the concept if the sample size is super small, the students are hand-picked, and standardized test comparisons are relatively non-existent. 2) You mentioned that acceptance rate is very low, and definitely much lower than any Ivy League, but does this also not imply that this education is not for everybody? Given the founder’s ambition is to completely revolutionize the higher ed space, the uber-selectivity seems to be a force working against it. 3) You mention that currently each class is limited to a dozen students. I am guessing that student:teacher ratio to be pretty crucial in determining whether this model is scalable. But then you also hit a ceiling in terms of quality of education if you increase the student number a lot.
Enterprise “productivity” at the very onset of your post made me chuckle, because based on my only experience using Slack this past summer at a startup of 150 people, it was mostly a way of distraction than anything else! I initially tried to “kill the email” and ask questions to people on business matters via private message, but then I realized those people slowly but surely took themselves off Slack claiming “they could not get any work done” while people thought they were online and available to answer questions. Now that describes a one way use case rather than collaboration, but I haven’t seen a case where people using it for serious stuff either. Most people used it to vent and talk about interest topics that were most of the time unrelated to work. And in most cases, because of the sheer volume of posts in channels you are included in, it’s easy to feel as if your friends posted all night when you were sleeping in a group message setting and you wake up to 1,254 unread messages! And if there was any important things you had to follow up on, good luck! By the end of summer a bunch of our employees gave up on it. But hey, this was one company in one specific time frame, I bet the usage pattern very much depends on the culture of the company. I guess we used Slack mostly to slack off 🙂
I love this company as many of my friends have office spaces there and I have visited the premises a bunch of times. The point about the downturn affecting their revenue stream is a real one, but it seems like not many of these companies are necessarily VC-funded aka if VC funding were to dry up they are unlikely to disappear. Classic case of disruptor (as we learn in BSSE 🙂 with their vanilla offering that is convenient, cheap and does not lock you down long term. It’s the SMB’s dream! It is also true that they don’t own the space but they still enter into long term lease agreements and pay a ton of money into renovating the whole space. Given they only are in big cities now also means that rising real estate costs are probably affecting them more than they budgeted for.
One interesting thing about the community aspect is that now they have an in-house incubator-like formation dubbed “WeWork Labs” that select companies on their growth potentials (you have to apply to get in). Similar to the benefits that iLab provides to HBS entrepreneurs, industry experts and investors are made available. Not sure yet exactly what the value add of this service is for the Labs community, but it will be interesting to see whether this will become a hot bed of activity that could attract real attention from the investor community and in turn increase the attractiveness of the offering.
Great comments, definitely thought about that when I was writing this post. Perhaps I should have also mentioned that right after this ruling Instacart gave their shoppers part time employee status, which does not obligate to give them health insurance, but will force them to withhold payroll taxes and account for workers comp insurance. I like that instead of fighting the law on this like Uber and Lyft, they are embracing it and even claim this is going to improve their customer service. See this article for more detail! http://consumerist.com/2015/06/22/instacart-gives-shoppers-employee-status-says-its-to-improve-customer-experience/