This is super interesting – I hadn’t heard of Glovo before! It seems to me that it’s a classic example of a clustered network (meaning they only get network effects within local markets/cities and don’t benefit from global scale).
While in London this winter break, I visited the Deliveroo offices and it was interesting to hear one of their head strategists say that their expansion strategy was to “be the UberEats of the UK”. Basically, they knew they could copy the business model of other food-delivery platform businesses succeeding in the US, scale up faster in London/Manchester markets, and gain a network-size advantage over their US-based rivals. I wonder if Glovo can sustain itself more successfully by only focusing on 1-2 markets where it has reached critical mass locally, so it isn’t forced to wage battle in so many different markets at once (to James’ point about Rappi in Colombia).
Cool post, Rocio!
When I was reading your assessment of MasterClass, I was wondering who its true competitors are and whether theplatform could eventually become commoditized. MOOCs are an obvious type of competition, but other potential competitors include TEDx, YouTube, and subscription streaming services like Hulu and Netflix since they also compete for viewer’s attention and media spend.
While I agree that most MOOCs are not as successful/value creating as MasterClass, I wonder if a platform with larger user-base scale like YouTube could crush MasterClass if it took a step in this direction. They could easily afford to pay a high-profile creator $100k plus 30% ad revenue sharing, and potentially offer celebrities a higher revenue given how big their user bases are. Is MasterClass considering making their contracts exclusive to prevent multihoming?
I agree with PZ’s comment about multi-homing risk and private label concerns. I see clearly how ASOS creates value for shoppers, but I’m not convinced it truly creates value for vendors in the current business model… And the move to private label makes them a direct competitor to their vendors.
In my opinoion, ASOS still seems to function largely like a traditional retailer (curating a collection of merchandise across brands). What makes a fashion brand more likely to sell via ASOS than via its own e-commerce site? This concern is particularly relevant since setting up an e-commerce presence can be done in a low-investment way, using third-party platforms like Shopify and fulfillment solutions like FBA (Fulfillment by Amazon).
Very interesting company, Lill!
I agree with you that SMT has been wise in not trying to attack traditional broadcasters, but rather to slowly make themselves indispensable partners to these powerful networks. Their tech creates value for the entire system, and it seems like they’ve been able to capture that in profitability (certainly not always the case with disruptive media start-ups!).
That said, I wonder if they will still sustain an advantage in a context where more people watch sports via YouTube TV or Amazon Prime. Do you think SMT’s tech will be as valuable to players like Google, whose engineers could surely replicate SMT’s graphics no sweat? Particularly as the world gets more excited about e-sports, I worry that Twitch (owned by Amazon) already has much more advanced capabilities. Let’s see if SMT can keep up the pace of innovation to stay relevant.
I loved this post, Leah! (Not just because I’m a Starbucks junkie and heavy user of the app.)
One thing that I think about whenever I use mobile ordering is the way my experience has changed in the store – I spend less time on the transaction, keep my headphones in, and don’t have to interact with anyone behind the counter. This is a huge positive for me (e.g., when I’m in a rush) and probably makes me lower cost-to-serve for Starbucks, but I wonder does the presence of in-and-out customers like me make non-mobile users’ experience worse? Are they served more slowly? Do they no longer enjoy lingering over a book in Sbux’s “third place” when there’s a constant stream of mobile customers with headphones in, coming and going? Maybe this is why Starbucks is doubling down on its Reserve Roastery high-end concept, to segment out the grab-and-go types like me from the coffee shop experience-seekers.
To generalize, it seems that greater investment in/growth of digital channels can negatively impact traditional channels if not addressed proactively.