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On December 13, 2015, Charlotte commented on Grindr: The Original Location-Based Dating App :

Wow I didn’t know that Nina – that’s interesting because I feel like one of the big value adds of Grindr is its location-based feature… as Tulio pointed out. I feel like what you pointed out is kind of a double-edged sword because on the one hand, if people want to be able to change their location for them that’s fine, but how do you counter-filter for people who want to maintain that location-based aspect?

Really interesting to learn more about their business and operating models! I went to Alinea (as you know) once last year and I found the ticketing system to be a tradeoff for the consumer… on the one hand you have to commit to paying upfront and know that you will be able to make it, so it requires more significantly higher commitment than any other reservation. On the other hand, it was really nice to not have to worry about paying a bill and just enjoy your meal… it kind of reminds me of the convenience of getting out of your uber and not having to worry about paying 🙂

On December 13, 2015, Charlotte commented on Brooks: A Laser Focus on Running :

Ryan – what a great comeback story! They really took a risk in that big shift to focus on just running, but clearly it paid off! The alignment is just so crystal clear through this shift as well as their innovative partnership with Rock ‘n Roll… a great way to target exactly who they’re going after. They clearly saw and capitalized on a great opportunity to be the serious running shoe brand by making very deliberate, tough calls (like scrapping Amazon!). I’m curious if/how powerhouses like Nike and Asics responded?

Also I’m curious if you know… were they founded in Seattle? I’m also fascinated that Adidas chose to move to Portland (near where Nike was always HQ-ed in Beaverton)… the pacific northwest seems to attract fitness apparel industry leaders!

PS – interesting to see that you sport Nikes day-to-day for lifestyle wear, but you are a Brooks devotee when it comes to running… I’ll have to pick your brain about that! 🙂

On December 13, 2015, Charlotte commented on ClassPass: Shaking up the traditional workout regimen :

Laura – I’m so glad you wrote on ClassPass! As someone who used it briefly and as a total workout nerd when it comes to NYC’s boutique fitness scene, I’ve always been more curious to learn about their model and how/whether they’ve been able to turn a profit. I’m glad you prefaced your post with the question of sustainability as this is a question I have too. It seems from reading your article that you see them as an winner now because of innovation and first mover advantage but are skeptical of the future? I have a few thoughts on this and wonder how you would respond:

1) You made the great point about how the studios that chose to be on ClassPass are newbies on the scene and CP creates lots of value for these new studios as they try to build up their brand in competitive metropolitan markets. That being said and to your point, I really worry that it’s such a survival-of-the-fittest market and for most studios, the value that CP provides early on becomes dispensable at some point as the value add of CP just doesn’t outweigh the benefits of studios being able to maximize margins. I think I’m a skeptic long term of the “margin squeezing” you mentioned, unfortunately!

2) I think to make a bet on their sustainability long term, there’s an important assumption to weigh in on which is: how confident are we that there will always be new and emerging players in the boutique fitness space? If we assume that there are always new guys popping up for whom CP adds a lot of value, then I think they definitely have a shot, but if we think that this growth of new studios will begin to flatten out, they may be in trouble!

Thanks for sharing!

On December 13, 2015, Charlotte commented on Palantir: The Hottest Startup You’ve Never Heard Of :

Nate – thanks so much for writing on a lesser-known but just-as-important and equally fascinating company. Their valuation and war chest of government clients is incredible. What a great video as well to explain how Plantair creates value in this growing age of “Big Data” and I think your point about their stickiness is an important one… from their talent acquisition (which reminded me a bit of Valve!) to their ability to customize much needed data solutions for clients, I would certainly bet on them as a TOM winner!

Rahkeem – I’m so glad that you chose to do Linkedin. I’ve found more and more value in it in recent years and I often now turn to it to make connections and search for people before any other social network platform (even before facebook for both professional and social purposes). I’m not surprised that its managed to grow to have ~20% of facebook’s users and I’m sure it will continue to grow, to your points! It just creates so much value for so many users, to your great points. I’m curious what you think the drawbacks are for HR departments and recruiters using LinkedIn vs. other widely/typically used sources… do you think LinkedIn could ever be more than a supplement in this respect for larger, more established companies?

I found your breakdown of their revenue streams very helpful in terms of understanding their BM and how they make money. Do you think they can improve upon their 3% operating margins as they grow?

On December 13, 2015, Charlotte commented on Ferrari: Innovation on the Road and Track :

Raj – thanks for sharing! I really didn’t know anything about Ferrari’s racing heritage and the fact that they spend almost nothing on marketing beyond the Formula 1 infusion is fascinating. In terms of value creation, it’s just so clear that quality stands behind the luxury brand, which seems to have been essential to their success all these years. I also think you really hit the nail on the head with your points about the “rapid refresh” 4-5 life cycle… if I’m someone considering buying a Ferrari, I don’t want a bunch of other people out there driving the same thing. Do you see this as counter to what Porsche has done? By iterating on the same models year after year? (I could be totally wrong on that, but it’s my understanding they have released the same models: Carrera, Boxster, etc. since their beginning).

On December 13, 2015, Charlotte commented on Victoria’s Secret to Success :

I think it’s so impressive that VS has been able to remain a market leader and relevant all these years, and thanks to your post I have a better understanding of how! Interesting and logical strategy on their part that “no supplier provides more than 10% of Victoria’s Secret’s purchases” and also I really like your analysis of push and pull marketing in terms of their merchandising.

On a personal note, I’m curious how you see their strategy in terms of target customer… is to obtain and retain loyal customers over the years (for instance keeping one shopper who makes her first purchase at age 16 keep coming back until she’s 26, 36, etc) or are they more focused on always targeting the largest proportion possible of their best performing customers (e.g.16-25 year olds, for instance)? I’m curious because I used to shop at VS until probably the age of 22 but I’ve turned to other sources such as department stores (Saks or Bloomingdales), Journelle, Natori, Hanky Panky, to make these apparel purchases. Maybe because my WTP increased, but also I think I have a perception of VS as a “younger” brand. That being said, I still tune into the VSFS every year, buy bathing suits from there occasionally, and will always feel a certain nostalgia for the brand!

Really interesting post… I am totally out of the loop and had no idea about VICE… I will certainly be checking it out. Their penetration across several sectors and markets is really intriguing and it seems like they have some serious untapped potential in multiple areas for growth and innovation!

On December 13, 2015, Charlotte commented on 5-hour Energy: Get your boost for the day :

Hi Rahul – thanks for sharing the story of 5 Hour Energy! I’ve used it sporadically over the years and to your point of the packaging, I think another value proposition of the 2-oz. size (for me at least) is that I don’t like the taste of red bull, so the fact that I can drink the bottle (or half) in just several sips is huge! Other key value drivers for me personally: its portability (I used to keep it in my squash bag when I played in college) and the penetration: I can always rely on finding it at almost any grocery store, check out counter (to the CEO’s point in the video at Walmart), & gas station. Thanks for sharing!

On December 13, 2015, Charlotte commented on Airbnb and The Sharing Economy: Creating Value for Everyone :

Michael – very interesting post & informative graphics! As an AirBnB user, I loved learning more about the details of their operating and business models. A few things that I find particularly interesting:

1) That there is variability in the % fee charged to guests (6 to 12%) but the 3% host fee is fixed… I’m curious if you have any idea what drives this variability?
2) Their growth just stuns me, especially in their ability to raise capital. From $20,000 in January ’09 to $7.2 million in November ’10… unbelievable!
3) I think to your point, this is just the ultimate example of a network effect… not just in terms of value for customers & partners but AirBnB has successfully raised the barrier so high for potential competitors!
4) I’m really glad that you finished the post by highlighting the risks that AirBnb recognizes and is getting ahead of from a strategy perspective, because this is top of mind for me. It’s really a tradeoff… for instance I used VRBO this year and it was way more work in terms of providing financial information, faxing contracts, etc., but then again, I’m likely less skeptical of their platform because I know they make everyone jump through these hoops to ensure a quality, trusted, regulatory-proof experience.

Thanks for sharing!

On December 13, 2015, Charlotte commented on ARTSY: Finding Art at the Intersection of Science and Technology :

Michelle – great post! I had a good friend (who you know too!) who worked at Artsy but this gave me an even clearer picture of their operating and business models. The way that they leveraged community innovation to create & capture value kind of reminds me our Threadless case… definitely some potential for network effects? It’s also interesting how they have capitalized on this opportunity to savvily help usher members of a more old world art community into the digital age through technology… just creating more value to be captured by multiple parties: the company, the artist, the gallery, community members/customers, etc.. The switch from a commission- to subscription- based monetization model is really interesting… clearly has been a key driver of their success. I’m curious if/how they’ll adjust this as they grow and continue to create value for all beneficiaries of the site.

Thanks for sharing!

On December 13, 2015, Charlotte commented on Chick-fil-A: Recipe for Success :

Doug – what a great company to highlight! When I think of Chick-fil-a, I think of 1) Quality, Quality, Quality! (it’s just so darn tasty!) and 2) my dad’s southern roots… we always go to CFA in North Carolina and it’s always been a staple for him, his brothers, and my cousins who live in the south, yet growing up in the Northeast, I just didn’t really get it… and having only been a handful of times, I’m still learning! For starters, I’ve always gotten it on the go (drive through, my sisters ran in while I waited in the car), so I had no idea that the customer service element was such a strategic focus for them…. but makes total sense in light of your fact about them far out pacing McDonald’s in sales per store… they’ve clearly been able to develop a hugely loyal customer base. I had no idea they they relied on a unique and innovative franchising model to be so successful! Seems like they really make it win-win for the company and the operator… that <3% franchise turnover rate is so impressive!

I'm curious if you have any thoughts on their strategy in terms of locations & expansion as it relates to approving franchises? I think of Chick-fil-A as a very southern thing that people in the northeast & pacific northwest are still discovering (my dad emailed us all last year about NYC's first location opening)… out of curiosity I looked at their location map and saw that they are in fact very national, but still stores are more densely located in the midwest, south, etc. and they are slowly creeping their way through PA, NYC, etc… would love to hear your thoughts on or offline 🙂

Thanks for writing such an interesting & informative post!

Thanks Megan! I found the same thing. We had a Peloton in Evanston, IL last year because moving from New York where we had access to all these great boutique classes, living in a suburb of Chicago we got a lot of use out the machine and could find time to fit in high-quality workouts without compromising a lot of time and effort 🙂

On December 13, 2015, Charlotte commented on Fast fashion? Faster distribution! :

Nina – as someone who knows very little about the fashion industry, I found your post both informative and fascinating! You really highlighted how Inditex’s innovation in supply chain management has allowed it to differentiate itself as an industry leader. One thing your post made me think further on: another way that their operating model creates value for their customers is by minimizing the feeling that your clothes from Zara are too “mainstream”. Because Zara is such a widely worn fashion brand, this could be a concern but the fast turnover in stores lowers the likelihood that you’ll see other people or your friends wearing the same clothing, and therefore increases customer loyalty to the Zara brand and keeps shoppers coming back to find fashionable pieces. Would you agree? Would love to hear your thoughts! Thanks again for writing about this great example!