Meili – this is fascinating and terrifying (!) at the same time. I think you outline effectively if they build it, how this platform should be integrated to capture value.
One question I’d like to pose is whether or not you think this technology _should_ exist just because it can. Of course, there are obviously huge use cases for mindreader when it comes to things like disabilities, advancing a social mission as well. But are there problematic interpretations of this kind of technology such that maybe it crosses ethical boundaries that should not be crossed? Furthermore, I know it’s only a small step from how advertising works now, but are you comfortable being targeted for ads based on some of your deepest thoughts? I find myself thinking about Dave Eggers’s book called The Circle, and the perils of what happens when we take technology like this just a notch too far.
Andrew – super interesting post. I find myself feeling as though Next has figured out half of the equation, but there is something left to be desired. One of my main questions is a chicken-and-egg issue: it’s great that better live content is being developed for VR because any content added to the ecosystem makes it appealing for consumers to participate in the “market” (indirect network effects, etc). But how much VR adoption is currently taking place at home? I wonder how many people actually have headsets today that they would use to buy into this content.
Also – how does this change some of the more fundamental human elements of sharing a concert or viewing experience with friends? I’m _sure_ someone made the same case when the TV was first released, and every other piece of media technology preceding it, but intrigued to know how this age old problem plays out in the 21st century with VR.
Great post, Yezi! I actually just worked on a BAV paper on PTC, and you definitely picked up on some of the most interesting aspects of this company from a business lens.
One thing to reflect on is what you mentioned about the shift in value capture from PTC’s legacy CAD software business, which sold perpetual licenses, to its VR/AR and IoT businesses, which are a more traditional SaaS model. This transition can be very painful for a company’s resources, priorities and bottom line, and indeed PTC has had some struggles over the last few years with just that. I am intrigued by the question of whether or not to enter the VR/AR space through acquisition makes the most sense, or whether trying to built it organically yields the best results. Obviously in the case of PTC, they needed to do it this way, but if AR and VR are not in the DNA of the company, I wonder how successful they’ll be at it.
I totally agree. I think Silver would do well to actually start his own polling company to generate his own data. Relying on third-party information for complex data models can be comprehensive, but risky. It’s an interesting business proposition for ESPN, but very much worth exploring if I were Silver.
Nupur – Netflix’s data machine has continued to blow my mind. Your mention of House of Cards and some of their other original content, produced with certainty, is clearly a game-changer for the industry. Do you happen to know if Netflix only uses its own proprietary data to make these assessments? Or is it possible that they also ingest information from rating agencies, coupled with reaction feeds on Facebook and Twitter? I wonder how accurate a single data source is for making these sorts of predictions, but in this case it makes sense.
Furthermore – do you see a world in which Netflix spins out an arm to compete with the likes of Neilsen? Or do you foresee them always holding this data close to their chests? It could be lucrative for them in two ways: 1) for data licensing, but 2) for third-party producers to create content people will like, which in turn can be shown on Netflix, attracting more subscribers.
Julia – this is a great article! As someone conscious of what goes into my food, I would personally be a fan of using something like this frequently. You mention in your post that they aren’t interested in going DTC right now, and I’m curious to know whether you think there is merit to doing a B2C strategy? For example, I wonder if, by going DTC, they can begin to collect more data and conduct pattern recognition so that they can glean insights on food consumption in certain areas or among certain groups. It feels like that data in turn could be pretty powerful for food companies, who might see them as more of a partner than a detractor. Either way, I love that this product exists and hope it brings up food standards for us all!
Daniella – this is an awesome find. It makes complete sense that like baseball, the music industry and its subjectivity for selecting talent can be “disrupted” with data. One thing I wonder is the level of subjectivity that comes with promoting and pushing that talent to the top. Unlike baseball – in which once players are on the field it is relatively meritocratic to value them based on performance – a lot of times in the music industry shows and albums are sold out based on marketing and promotion done by the labels. I would be curious to know how that, coupled with an overhaul of the music label industry in general (Chance the Rapper, for example), changes whether or not being data-driven in talent selection even matters.
Rahul – I really enjoyed reading your post and learning about the genesis of the platform. To echo Alice’s sentiments, my worry about crowdsourcing content is always quality. Alice makes a good point that they have created best-in-class content, and I fear that if the quality of that content gets diluted based on crowdsourced inputs, it brings down the entire average, and diminishes all of the effort they’ve put into their own content. I see your point about how they screen for quality, but this obviously becomes time consuming and enables more mistakes to slip through the cracks. Do you think this ultimately causes brand damage, or can they maneuver this problem successfully?
I am fascinated by this concept. Great post, James! One “secret sauce” that investment banks tout (and is probably unwarranted) is that they have direct access to management teams, which make their predictions more valuable. They are able to ask questions about future earnings directly to the company’s leaders on earnings calls. While I agree that the crowd can probably pick stocks better than an individual analyst, this does seem to be a competitive advantage that can’t be replicated. As you say, this model is problematic for several reasons, and I wonder if this additional complexity adds to that list.
Great post, Libby! I remember hearing about Lulu many years ago, and wondered what happened to it.
I think part of the problem with crowdsourced platforms that let users openly talk about other users is that they devolve into gossip-fests and slander quickly. I think of platforms like Yik Yak and its predecessor, Juicy Campus, which were meant with the most innocent intentions, fell prey to the tendency of crowds to get mean quickly.
Putting aside the very interesting debate about allowing men, do you think it makes sense to have a moderator in crowdsourced initiatives like Lulu? Or even still, do you think there is a generalizable way to prevent this kind of crowdsourcing from getting out of hand? Does the “crowd’ sometimes need to be “reigned in” in order to maximize value creation for both sides?
Libby – this is a fascinating take on Facebook messenger’s value-add, especially in the developer ecosystem of bots. We all benefit from smarter and more comprehensive responses to customer service, etc, so I completely get the B2C and B2B value FB messenger provides!
I am wondering what Facebook’s strategy is around its simultaneous development of WhatsApp and messenger. It’s interesting to me that the two don’t have many discernible differences in their products (other than UI, and a few other things). And yet, I haven’t heard much about bot development, AI, e-commerce, etc happening on WhatsApp versus a clearly active strategy for messenger to go after those markets. Does Facebook assume that multihoming will be taking place on both of those platforms anyway, and so they are hoping for product differentiation? Or do you see a world in which one gets folded into the other and they try to combine forces on 1 platform in order to be everything to everyone? I am a personal user of both, but could see either scenario unfolding.
Andrew – great take on the car sharing industry! I think Turo is at a really interesting crossroads at the moment. You rightly point out that the localized indirect network effects make scaling challenging. I’m wondering whether some day, a developer will come in an invent the Kayak (or Hipmunk) for car sharing platforms to help renters find the best deals, and if that will help or hurt Turo in its quest for scale.
Furthermore, I wonder if/how/when regulators will begin to knock on Turo’s door. I don’t know if Turo, Getaround, or any other car-sharing platforms have yet faced these issues, but much like Uber, I imagine that this is something regulators would be interested in streamlining and ensuring fairness. Would they have the desire to combat that head on? It will be interesting to see. I’m rooting for Turo to succeed!
David – I’m fascinated by the fact that Github has been able to capture so much value despite its inability to truly stop multihoming or really capture much value. Although the network effects of being able to use everyone’s source code is obvious, it’s unclear to me why there isn’t more of a prisoner’s dilemma dynamic in the computer engineering world. If a company is building revolutionary software, why would they want it out there for everyone to see? I wouldn’t be surprised if large companies built their own Github-like repositories that only benefit engineers within one company, so that the network effects cover a specific group rather than the entire market.
With that in mind, do you think companies will want to pay for Github in the long run? The gamification is a crafty way to attract users, but is it sustainable? Or is it possible that the market could fall out from under them?
I’m surprised that the NFL comes up as a loser in this space. They are among the first trailblazers to explore streaming their content on less conventional services, like Twitter and Facebook, and were the first to dabble in livestreaming their games on some of the realtime, livestreaming platforms. In addition, they’ve made a lot of advertising revenue from these platforms. Although Netflix might not be the best place for the NFL to take their content, do you think they could use other unsuspecting distribution platforms (Snapchat? Slack?) for their content and capture an even broader audience as a result?
Hey Meili – the short answer is yes! They are very under-the-radar (pun intended!) about their partnerships given the sensitive nature of of their product, but they are currently installed in 3 major US cities’ police forces, and they have many other partnerships in other parts of the nation.
Something that I think helps with the sales process is word of mouth from other police departments. It turns out that these cities are interested in having the best tools and resources, and selling them on a holistic system that can save them time and money is very appealing. Once they sold their first one, the validation from that implementation helped catalyze their future sales.
I think your assessment that Siri floundered because of Apple’s closed-mindedness toward third party development makes sense, especially given what we learned about companies like Nokia. It’s surprising to me that Apple didn’t learn this lesson the first time with the App store, when it finally decided to open up the software to any developer and saw a proliferation of Apps and App usage.
I also wonder whether or not this is an instance of wrong place, wrong time. It’s kind of like the early social networks – it seems like an interesting piece of technology in theory, but the average consumer doesn’t exactly know what to do with it, and therefore ignores it. Not until the second or third player comes on the scene do mainstream adopters start to see the value proposition of the service. Sadly, Apple might have taken the hit here in order to make voice AI more widely understood.
Ian – I really enjoyed reading this assessment. Although on the surface it seemed their campaign was flying blind, they did have a digital strategy in place. I’m wondering how this continues after the campaign, especially given Trump’s erratic remarks on social media. Do you think his digital targeting strategy can or should change now that he’s president, especially given that the content has remained relatively similar?
Musical.ly has blown it out of the water in terms to user growth, and has done a spectacular job of riding the wave of their virality to launch new products and expand to paid advertising. How do you think they should combat the tendency of “fadishness” among teen apps and keep users engaged on the platform as both they and it grow up. For example, Yik Yak had similar growth metrics in its first year, and took advantage of network effects and virality to launch massive marketing campaigns. But less than 2 years later, they’ve announced they are laying off most of their staff. How can Musical.ly avoid this fate?