Thanks for sharing your thoughts on the Instacart model, I really enjoyed reading your article as I think that online grocery shopping is one of the most promising field in which technology will play a crucial role in the near future.
In a world moving faster and faster, where time management has become a main concern for most people and where women are no more dedicated full time to the house and to the family as years ago, it is crucial to help customers to reduce the time spend on food shopping and delivery. Me myself, despite loving the ritual of going to the supermarket and carefully choosing all the items to put in my cart, started to shop on Instacart and loved the efficiency and convenience in terms of time that I can save using this service.
I found interesting that you focused your analysis not in the threat that online platforms such as Instacart constitute for traditional retailers, but how even newer technologies can affect Instacart business model itself!
I think though that the main threat for Instacart and similar platforms will not come from new technologies, but indeed from the traditional retailers and large established technology firms.
Large traditional retailer have the scale and can acquire capabilities to develop such platforms in house, as for example Wal Mart is doing with its ewallmart platform and through the recent acquisition of Jet.com, as well as both the giant Amazon and Google have entered this market with Amazon fresh and Google express services.
Will Instacart be able to face the challenge of large Tech companies and large retailers? Superior customer experience and customer loyalty is the key, and I think it will be crucial for Instacart to lock-in the largest number of customers in these years lowering the subscription fees while the large companies are sill trying to catch up.
Very interesting post Deepa and great choice of a sector that at first sight could be seen as safe from technology disruption!
I found especially interesting that this case in one of the (unfortunately few) examples of a win-win solution, as also Sjain commented in her reply. Indeed in many circumstances we have seen technological innovation disrupting and damaging the traditional business, often thanks to lower prices driven by these new companies acting on the fence of regulations if not explicitly against the rules as in the Uber case.
I found instead particularly interesting that Google is working in collaboration with the Art galleries and museums worldwide to grant a win-win solution, or even better a win-win-win solution for Google, the Museums owners and the final “customer” i.e. the museum goers.
My first hand enthusiasm in seeing that is possible to transform a business still granting benefits for the incumbent traditional model is then faced by the question whether this would be true also in the for-profit sector. It seems to me that Google has given up to gain profit from this model, basically acting as a free marketing platform for the Museums who choose to collaborate, in light of its mission to share knowledge and gaining mainly reputation benefits out of this project.
Would still be a win-win solution if Google would decide to make an economic profit out of this model? Would final consumers pay to access the Art platform and pay again to enter in the Museum they found on the platform or would this model fail when pushed to create additional profits? Happy to hear more thoughts about it and thanks again for sharing!
As we all assist to the progresses of our friends on Facebook posting their recent running achievements as measured via various apps, I think it is important to consider the fitness sector as one of the most impacted by technology disruption. Thanks for sharing your thoughts about this app which I didn’t know and for opening the conversation about this business sector!
I agree with you that in this model the customer value proposition is extremely solid, and respond to a clear need of customers to exercise according to a flexible schedule, with the support of a personal trainer but in a cheaper way. So the main elements could be summarized as: cheaper, everywhere, shareable, flexible.
I agree also that from the business and operating model side, this proposition is not solid enough to prevent other apps or other major players to enter the market and replicate exactly the same features.
If we look at the overall benefits for the customers, I do believe that this model is very valuable and lots of other fitness providers will expand their offer to this type of digital training platform services.
From the point of view of a small app providing this service, I see as the only way to survive to leverage on the social medial component and expand as much as possible the customer base, maybe offering a free tier service with basic features and pushing customers to upgrade to the paid subscription model as in the Spotify model. Also partnerships with other famous apps – as Spotify itself – could be valuable in driving the brand knowledge of this app and boosting momentum. What do you think? What would you recommend them to do in order to survive in the market and beat the competition?
Thanks again for sharing your thoughts!
Great article and very interesting field to consider how technology is disrupting a current business and operating model!
By reading your article I am left with few major doubts or concerns:
– How is Khan Academy making money? It is a no-profit organization, but to maintain the platform itself and to continue enhance the study material must require lots of investments and recurring expenses. Can you tell us more about the business model and how does this business create revenues? My concern would be that revenues come from advertising, which could make the students distracted by the many adds popping up and the learning experience less introspective and valuable
– How does Khan Academy grant the highest standard of content delivered? Are there competent bodies who can certify the quality of the study material? I am a bit worried about a totally open and free learning platform, where the control on the content provided can be low
– How will be next generations of young people affected if they will interact with each other just through online platforms, social and interactive but still digital and not physical?
As final thought, I can see a large potential in this form of education as well as a very high risk of poor content delivery and lack of personal interaction during the learning process, and I think that regulators and education competent bodies will have to play a crucial role in defining standards and limits of this new methods.
Legislation can’t be static by definition, and many examples in history show us the benefits of adapting policies and labor laws in response to change in the business landscape, from the industrial revolution to women labor laws.
At the same time, while technology can be disruptive itself, rules are there to make sure that this disruption takes place in a competitively fare and socially responsible way.
I totally agree with Bernardita and my answer to her questions on whether laws should be adapted to business changes or vice versa is indeed both – none of them should be static or passively adapting to the changes in the others, as this tension is crucial to ensure sustainable progress.
And we have to be careful when assuming that if workers are willing to do a certain job, this means that the job conditions are favorable and fare. Workers can be simply desperate for a job and rules must be set to prevent speculation on people despair.
I agree that flexible types of job could be regulated and taken into account, but still allowing workers to have a minimum set of protection like minimum hourly wages and minimum health benefits. My concern indeed is that these “flexible” type of jobs without any benefits for workers will spread out, disrupting many existing businesses due to significant overhead cost reduction, and lower the overall work conditions for an increasing number of workers. This may result in a short term gain for the employer and the final customer, but in an overall damage in the long term to the whole society.
Bad news for us indeed, as I am one of those who would not be able to start a day without a cup of coffee!
Many seems the hurdles that Juan, as the other 500.000 small coffee producers, will have to cope with: unpredictable and increasingly hostile weather conditions, increased risk of suffering from a devastating plague, lack of infrastructure and very low individual negotiation power.
Definitely too big for Juan are the investments needed to face those hurdles, for example as you suggested investments in plague or heat resistant varieties of coffee.
Yes, Juan could subscribe an insurance policy and survive a few more years, but will this action allow me to still have my cup of coffee in the morning? Will an insurance policy keep the Colombian coffee business alive?
I agree with your conclusion that Juan himself will not be able to face these challenges and the only way for the “Juans” to survive is to operate as an orchestra and play a symphony together. Harder to do it than to say it, though.
How can the Colombian Coffee Growers Federation (FNC) help them to achieve this result? Which rules and infrastructures need to be put in place to allow them to operate as an orchestra? Is there any large player in the industry which can consolidate Juan businesses and help them with the initial R&D investments required to maintain the Colombian coffee business alive?
It would be great to have more thoughts from you on the topic, thanks for starting such an interesting discussion!
Very interesting choice the automotive industry when considering climate change and business impacts for two main reasons: being one of the largest contributors to CO2 emissions worldwide the automotive industry has been one of the main causes of global warming and could potentially be one of the main contributor to its solution.
As you pointed out, the potential improvements in this sector are tremendous and technology can play a key role in many aspects, both in terms of initiatives in the traditional automotive sector as in the new electric car sector.
It has been very interesting to learn how also a giant traditional company as Ford is developing electrical engine technologies and it would be also important to analyse the impact on oil and gas companies, as I believe they constitute the main obstacle in the mass-market roll out of these technologies.
Finally, I found remarkable that Ford is approaching the problem of GHG emissions from a 360 degrees point of view, not only considering vehicle and fuel improvements but also initiatives devoted to driver education, once again leveraging new technologies and apps.
This third aspect maybe not have the same large scale impact as the other two, but I do agree that constitutes a fundamental piece in the picture. It will require very small investments compared to vehicle and fuel related initiatives and can be also a driver of brand image and reputation for Ford, in an era when more and more people is conscious and sensitive about sustainability initiatives.
I am not a skier, but I come from a country with some of the most amazing ski locations worldwide and where the ski business is crucial to our economy, and the fact that this sector is in serious danger is a topic that matters to me personally.
To even make it even a more personal interest, a close friend of mine owns a ski resort business and is facing serious financial losses.
I found your article extremely interesting and I agree with your analysis that the impact of climate change will be so substantial that the only solution is to develop a comprehensive action plan to address it: invest in snow-making technologies, add additional ski resorts at higher elevations, diversify the business with non-snow related activities, improve efficiency and reduce costs with sustainable initiatives (e.g. reduce wastes). It seems evident to me as you also pointed out that all this actions can be undertaken only buy the main players in the industry, and that consolidation will be the only solution for smaller players to survive. A few big players will take the whole business, but hopefully thanks to increased investment capabilities they will be able to keep it alive.
Very interesting analysis, first of all to shed light on a business like the web service business that could wrongly be considered “clean by definition”, and secondly to understand which actions such an impactful industry is undertaking to face the customer demand for sustainability.
I was personally shocked to learn that in the US the electricity sector is the single largest source of carbon emissions and would be curious to know if and how other players in the electricity sector are considering reducing their carbon emissions. I agree with you that ASW levers are a good start and I do hope that these levers will represent an example to be followed by other players in the industry.
You mentioned that AWS announced a goal to be 100% powered by renewable sources, but I would be curious to know which is the time frame they gave to themselves to reach this goal. This is related to one of my main concern about their strategy that is how fast it will be. I agree with your analysis that owning wind and solar farms reduces AWS exposure to electricity pricing but I wonder how long it will take to AWS to build the infrastructure and capabilities to be 100% powered by renewable sources if they aim to own their own sources. Shouldn’t they consider to complement their strategy by acquiring wind and solar power by third party providers while developing their own plants?