Love the post Mark. I am a huge fan of Buzzfeed’s model given how they manage to acquire repeat users inspite of not having a strong enough call to action. As a reader, I will go to the CNN website to keep myself updated with current events. There is no specific reason for me to browse Buzzfeed and this makes repeat user visits very difficult to achieve in the conventional manner. What is great about Buzzfeed is that users share the content to bring in more users. I used to wonder if this were a fad and expected it to be another trend that would die down. However, Buzzfeed has managed to have sustainable traffic by adopting a great content strategy. I am not too sure about their revenue model though – as a reader, I don’t like to realize after having read an article that it was an advertisement in disguise. It creates a negative sentiment. Do you think it is a sustainable revenue model for them to pursue?
Great post Brandon. Elon Musk is a genius. Using first principles to build a rocket is basically like going to the drawing board and solving a problem from scratch. It is what a child, who just learnt a new concept, would do if she wasn’t aware of the solutions already out there.
I wonder if they patent their technology to keep their competitive advantage or they plan to make it open source like they did with Tesla (http://www.forbes.com/sites/briansolomon/2014/06/12/tesla-goes-open-source-elon-musk-releases-patents-to-good-faith-use/) ? Either way, they are disrupting the industry in a way that no one has before!
Love the post Natasha. The ‘Cube’ facility is mind blowing. Keeping manufacturing centralized seems to be the main competitive advantage in their operating model. I wonder what prevents other big retailers from following the same process to reduce inventory and turnaround time. Scale could be one issue but then there are quite a few retailers that have the scale to make this model work!
They have been able to have a 99.6% success rate with deliveries (Reference 2). As a result, late deliveries don’t eat too much into the bottom line of the stores. As I noted to Carolina, they adopt measures to ensure that the delivery boys drive safely. However I agree that as they expand going forward, they will need to be more stringent in ensuring that delivery persons adhere to the speed limits. One small incident could lead to bad press and legal issues, which is essentially what happened in the US.
Compliance with speed limits is always a problem Carolina – especially in developing markets. The company has made it a part of their operating model by adopting measures like: 1. Calling the delivery boys SDPs (Safe delivery persons) 2. Modifying the bikes to ensure that they cannot go past a certain speed (Reference 1). 3. Refusing to service any customer who lives outside the identified serviceable area for any outlet.
Measures like these make adherence to speed and safety regulations a part of the company culture.
Great question Peter! Motorbikes work beautifully to navigate the infamous traffic in India – moving swiftly between cars in the absence of a lane driving system.
Given the standardization in the baking and delivery process (23 min + 7 min buffer), what needs to be done to manage increasing demand is to ensure that there are enough ovens and delivery boys to meet the demand.
Delivery boys can be increased per outlet (part time human capital) until the oven capacity is maxed out. If the outlet doesn’t have enough capacity to churn out Pizzas as orders come in, the company can open multiple outlets in the same locality. This is already happening in densely populated areas of major cities. The unit economics of the business model work out at a standalone restaurant level – the individual outlets operate profitably. Hence opening new stores is not a problem, given that one store is unable to manage the demand. I draw a parallel to the ubiquitous Starbucks outlets in the US, many of co exist in the same vicinity.