Thanks for this – I thought your analysis was great! I’m always getting bombarded by instagram ads for MasterClass (although never converted myself), so interesting to learn more. I had similar thoughts to Megan – who are MasterClass’ true competitors? To me, it seems like anything that people might do to “better” or entertain themselves. You mentioned streaming services, but I imagine even things like yoga classes, the gym, books, or dinner with friends could be competitors/substitutes for this platform. While I do agree with you that they are a differentiated platform in their content and high production value, I wonder if a way to create more value is a way to better certify the students that complete courses. Maybe this isn’t possible in the arts, and maybe this would make the platform look a lot more like its direct competitors, but some kind of innovation might be necessary to sustain the platform by keeping users on it for longer. I also like Megan’s point above around having celebrities/talent sign agreements that limit them to MasterClass’ platform only – although unclear if they would be on board with this, and they would definitely have the leverage in this negotiation!
Thanks for this – super interesting and thought your analysis was spot on! This space sounds incredibly nuanced – it actually reminded me a lot of dating platforms like Hinge and Bumble, and how they could face similar problems in their scaling. Specifically with highly clustered/local markets, and the realization that a successful use of the platform takes users off of it for good, in theory. Because of the nuances and challenges you outlined above, I think this might make for a slightly more defensible business. Because it’s challenging, it could deter many entrants (hopefully!). That being said, I do worry about their scalability – creating value by taking photos of the therapists and helping them to write personalized bios sounds manually intensive. Although, these efforts to make the platform stickier do seem to be in the right trajectory to better defend their business and reduce risks associated with disintermediation, multi-homing, and clustering. Looking forward to see how they scale & sustain!
Interesting article on Upwork! I think you hit the nail on the head in your last paragraph around sustainability – I worry that their platform is at high risk of disintermediation as well. It feels like they’ve tried to discourage it through their pricing model to freelancers, encouraging them to be stickier on the platform by charging less commission for the larger/more numerous transactions. Although, I agree with you that this will likely have the opposite intended effect. If I were a freelancer working over and over again with the same employer, it would be really easy to move off the platform and instead have no commission charged. I agree with your assessment that Upwork will need to fine tune how they provide value to both sides of the platform to better defend their business.
Wow – I didn’t know about this company but it sounds like a massive success story! This kind of digitization seems incredibly relevant in a world where people want full transparency in their supply chains – how are the products I order online or buy in store getting to me? I wonder if there is some opportunity for Flexport to ever offer digital solutions to other areas of supply chains. I’m thinking further upstream than shipping – more towards the manufacturing side of unfinished goods. One example of an industry that’s incredibly opaque and in need of transparency is the textiles industry. As Flexport iterates on their technology, maybe the next step for them is to disrupt other parts of the supply chain through digitization.
Building on Megan’s comment above, I wonder as more sports leagues and events partner with SMT, will they continue to sustain a competitive advantage as their product is no longer a differentiation point for their customers? I’m thinking of Clay Christensen’s theory of commoditization and decommoditization cycles. As SMT’s tech becomes commoditized, value is likely to move into other area’s of the supply chain – should SMT begin to invest R&D dollars in spaces they think the value will be in the future? And where would that be in this scenario? As well, tying themselves to the incumbent rocket ship is beneficial for scaling in the short term, but what happens when those incumbents are disrupted? I’ll be curious to see how SMT continues to reinvent itself and if it ends up a winner or loser for the long term.
Really good point!
Really cool, Megan! I saw that IKEA is also testing out a furniture leasing model in 2020 (for as little as $33/month for an apartment’s worth of furniture – crazy). It seems like this would fit nicely in with their new microstore “Planning Studios” for highly urban environments. I agree that their upfront investment in rethinking the user experience and digital supply chain will allow them to be much more agile when continuously innovating in their business.