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& thanks for reading ツ

Would love to see WP take this one step further and simplify the process/inconvenience/cost of getting an eye exam through software or mobile peripherals to be used in their stores. I think the hybrid model will emerge as a way to force price makers to make formerly costly products better and cheaper by allowing others to break into tight-knit industries (e.g., mattresses + Casper, luggage + AWAY).

I agree that the next part of truly mastering this model is figuring out how to remove the inconvenience – and added expense – of having to go elsewhere for an eye exam. I met someone who founded a pop-up dental exam company. His team sets up two hygienists in a conference room inside an office and they can take back-to-back appointments. The part of the exam where the dentist needs to be present for the exam is completed via a proprietary software using a pen-like camera that the hygienist can put into a patient’s mouth. Could this remote exam model work for WP?

For WP, technology could become the answer to the question about exams: are there ways to conduct legit basic eye examinations with licensed doctors remotely via some kind of software? Mini mobile phone peripherals exist today for conducting eye exams on the go, but they are still costly. WP’s founders have said they are optimistic about the opportunity for technology to revolutionize the way that we get our eyes examined and I tend to agree that things will trend in this direction – and hopefully WP can be at the forefront so that VisionSpring can indeed continue to grow!

Your point about America’s Best is spot-on. People who are mostly focused on value could also go to one of Wal-Mart’s Optical Centers or Costco Optical for an eye exam and low-cost frames/lenses, too (Consumer Reports rates America’s Best, Wal-Mart, Sam’s Club, and Costco as a consumers’ best bet for low eyeglass prices). I think that WP’s fashion-forward design, customer service, and the word-of-mouth culture that they’ve created certainly sets it apart. If we’re talking about true scale, I do wonder if value trumps design for the vast majority of consumers – my hypothesis is that it probably does. Since WP keeps design in-house but manufactures at a low cost in China, I wonder if there is a way for them to consider offering an even lower cost baseline frame that is still stylish yet makes up for the margin cut in anticipated volume gains to more directly compete in the value space.

On December 10, 2015, Libby commented on Catch Surf: A Surfboard Company with an Apparel Problem? :

This is cool. I love fanny packs. They should model their apparel after JAMS.

On December 7, 2015, Libby commented on Instacart :

I love Instacart and use it all the time, but am really surprised that they have a $2b valuation without any signs of profitability in a business with historically thin margins that is really tough to scale.

On December 5, 2015, Libby commented on Missed Opportunities at Coin :

I really wanted Coin to work. As you point out, it doesn’t.

On December 5, 2015, Libby commented on ClassPass: Shaking up the traditional workout regimen :

Do you think that this model makes it hard for ClassPass to scale since they have to negotiate w each studio for rates, terms, etc. to bring this on the platform? Separately, what do you think about the potential for ClassPass to consider investing in or buying a franchise of studios and operating both the studios and their platform to have full ownership of the booking, class, and post-class follow-up? Helpful, harmful, unnecessary…?

I think the barriers to entry are quite high in most consumer goods categories, especially since they typically lack defensible IP – and in most areas there are few things stopping other entrants from developing their own unique value proposition for a core competing product. My hypothesis is that people care first about price, second about style/attractiveness, and third some combination of company attributes including brand perception, word-of-mouth, and social commitments. So, a competitor could easily design a more attractive pair of glasses, find a lower-cost manufacturer/supplier in China, put up a website with some viral hooks, and be in business. I see Warby Parker’s strong brand equity as its core strength and competitive advantage in today’s market. I’m not a believer that people are buying from Warby Parker, for example, because of their commitment to social good.

My sense is that the Warby Parker model can be repeatable as long as there are long-standing industries whose market leaders are failing to innovate and who haven’t yet pulled their businesses along to make the evaluation and buying processes more convenient (online). Casper is a good example of this. Why hasn’t anybody fixed the inconvenient, expensive, and cumbersome process of trying to get better sleep? Why is this industry so underserved by existing online options?

There are some big risks associated with this model. Can you really disintermediate or defeat the entrenched market leader? That’s a big task to take on. The model also relies heavily on the ability to build a brand, which is very difficult. The industry structure itself seems to be the advantage that any of these companies has to exploit first and then figure out a way to offer convenience, ease of purchase, and superior products which most modern consumers have come to expect. It seems to me that the model remains compelling as long as new entrants have something to offer that solve existing/remaining problems, some kind of powerful unique brand value, and the structural advantage of categories that lend itself well to this type of innovation.

On December 5, 2015, Libby commented on Flatiron Health: Finding the Cure for Cancer :

Great choice for the TOM Challenge – Flatiron is tackling something really important in healthcare. Beyond the most important work Flatiron takes on, does the OncologyCloud platform have applications to other parts of an oncologist’s practice beyond trial-related data collection, organization, and synthesis? You highlighted OncoBilling above; I wonder if there are ways that these tools can also assist with understanding more about patient costs, drug, and treatment reimbursements – maybe even identify trends between certain kinds of cancer treatments and “lost costs” for individual practices?

I love Postmates and am so glad you wrote about it. Even though we’re not in the same section, I wanted to ask a couple quick questions! 🙂

– Following up on the first question, do you see the Postmates model as flexible enough to be able to be repeated across other business models/industries — and if you do, which are most obvious?
– I wonder about the growth model for Postmates or any other on-demand delivery services companies outside of densely populated cities like NYC, San Francisco, Chicago, etc. Can this business scale without eventually establishing some kind of central shared infrastructure? Reminds me a little of the early days of Munchery, where chefs would just make food in their homes independently and work out their own drop-offs to customers’ homes. They’ve sense pivoted to a model where they have a central “kitchen” where chefs pull together daily menus and the food comes out of one hub as a more scalable growth tactic. I wonder if this is something Postmates would have to do to truly take their business to the next level.

How hard do you think it is to turnaround your reputation as the “meanest airline in the sky”? Does it even matter? Our FIELD 2 team is working with LATAM Air (LAN) in Peru on a project around creating more loyal customers and in our survey work, the single most important thing that people cared about far and away – even when we weighed it next to customer service, perks (e.g., drink coupons, snack on-board, free WiFi) – was always ticket price. Are there any risks for other entrants or loss of market share if they just keep ops low-cost and keep giving value back to customers in the form of low ticket prices (and just keep everything else as-is)?

On December 3, 2015, Libby commented on Ocado’s ‘Sci-Fi Ballet’ :

Interesting piece. I hadn’t heard of Ocado before, but find the points you list on its operational sophistication to be really interesting. You mentioned Instacart (which I use here in the US) and Amazon, which launched Amazon Pantry in the UK in mid-November. Do you think that Amazon Fresh is replicable (as “Pantry”) in the UK market and could their size force Ocado to start thinking about competing on price earlier than expected? Separately, I read some commentary on Amazon Pantry that mentioned that UK consumers are particularly loyal to supermarket label products. How does this impact Ocado in the long-run? Do you think other online grocer services grow the market for all players or do you think that Ocado’s operational efficiencies actually make it harder for others to enter?

On December 2, 2015, Libby commented on Southwest Airlines: A Recovering Innovator :

I love flying Southwest for all the reasons you mentioned: fast boarding, quick takeoff from the time I sit down, and efficient deplaning versus other airlines I fly like United or even Virgin America. I am also a big fan of their standard policies that feel like value-added services compared to the other discount airlines now (e.g., JetBlue, Spirit) — no checked baggage or flight change/cancel fees. With Southwest I really feel like I know what I’m getting and their pricing model seems very clear to me. I agree with you that Southwest will remain one to watch as customers demand more from airlines over time. Whenever people tell me they dislike flying Southwest, I am always shocked. They seem to be able to get me from Point A to Point B faster, cheaper, and friendlier than the rest of the airlines out there today.

On December 2, 2015, Libby commented on Panera: Winners in Fast Casual :

Adam, great post. Thx for sharing.

I read an article about Panera where Shaich talked about Panera’s inability to meet lunchtime demand and customers were leaving the lunch line to seek out other options. He said that ~6 customers/cafe/day walking out of the store = 1% transaction growth. How well do you think “Panera 2.0” will do in successfully mitigating or eliminating these types of issues altogether? Panera surveyed customers on the reasons why they would leave the line and the top response was the lack of a true in-cafe experience. Could automation and ‘rapid pick-up’ further diminish the “oasis” ambiance?

On December 2, 2015, Libby commented on Munchery – Delicious, delivered :

Munchery is a great company — I’ve been using them in San Francisco since they launched in 2010. In the old days of Munchery they just had a bunch of different chefs posting their own menus and cooking meals independently, listing them for sale on Munchery’s website… so obviously they have come a long way 🙂

I would love to know what you think about this on-demand meal market in terms of 1) saturation and 2) whether or not Munchery can move fast enough to capture new customers in other big cities, or if they will be blocked by an UberEats-type competitor that already has the infrastructure and service in-place to expand quickly. There are a few other Bay Area competitors like Sprig and it seems like Plated and Blue Apron are also indirect competition through they provide meals in different stages of “readiness”.

What features of Munchery’s model do you think set them apart from other direct and indirect competitors — and, importantly, what is the top risk in your mind associated with correctly scaling this business?

On December 2, 2015, Libby commented on Have you ever tried to become a Uber Driver? :

I am a long-time UBER rider and learned a lot from your overview. I’m curious to hear your perspective, though, on the quality of UBER drivers who are effectively brand stewards for the company. Given that the business and operating models are aligned — making it possible for UBER to quickly scale its workforce of drivers — how does UBER mitigate the natural risks associated with vetting, training, and deploying so many new drivers? How do they maintain quality control over the UBER brand experience? Or, alternatively, does the model actually hand over too much control to UBER, allowing them to lower fares on a whim to please riders, in turn punishing drivers who become reliant on the service?