Super interesting post and discussion.
These are valid points that question the efficacy of campaign spending on electoral outcomes (and therefore the premise of the misalignment). That said, the same Green and Gerber research suggests that door-to-door canvassing can have up to a 7% increase on a person’s likelihood to vote. The more funding a candidate has, the more he is ably to deploy campaign workers to organize grassroots, get out the vote efforts. So there is some tie between campaign funding and actual outcomes (though the research here is certainly mixed).
Beyond that, I think there are two strong arguments here. One is that elected officials are chosen by the people who paid for the campaigns. The other is that the people paying for the campaigns are influencing policy (because they are choosing which politicians can run and win). I think another overarching idea that wasn’t explicitly mentioned is that the in flux of spending on campaigns pushes candidates to adopt extreme views and makes political parties increasingly polarized. While the founders of the United States supported the formation of special interest groups and their ability to influence or sway elections, they did not anticipate how much money would be spent on them hundreds of years laters. (The Constitution was a living, breathing document so it was assumed the ideas would evolve over time.) Politicians are now so beholden to special interest groups in order to win a party’s primary and then the general election. The pressure to keep certain donors around changes a candidate’s platform and later the policies they choose to endorse. Perhaps this too is causing the misalignment between the business and operating model — regardless of whether financing influences the actual winner in an election.
I worked in the online education space and Lynda and Pluralsight were our biggest competitors. Lynda started out as an in-person course (taught by Lynda) and she started putting videos online to complement it. It’s interesting to think about how well she evolved her operating model to fulfill her initial business model — get people to pay for courses on career skills. I think the success going forward is contingent on the ability to expand the library and remain relevant/fresh and to figure out how to quantify the learning. Online education providers are currently competing to figure out who can establish the best credential for the skills learned online (Coursera/Udacity have certificates, General Assembly has its own form of accreditation). I think the LinkedIn acquisition is an interesting way for both companies (LinkedIn and Coursera) to tie their products to a larger goal. For LinkedIn, it’s making education and skills acquisition part of its ecosystem. For Lynda, it’s helping employers learn how to understand the value of the skills gained by using online learning videos.
I wonder why WME wants the technology to be proprietary. It sounds like Salesforce doesn’t actually translate into the process of managing agency business and deal but that some other technology solution could. Is the WME solution so specific to the WME business that it only works there or could this kind of tech process work with agencies in any other industry as well? It definitely seems like a wise competitive advantage for the agency to have their own talent for development and building technology project to improve their business operations. The livelihood on the business relies on people connecting other people to opportunities. I also think it would be interesting for WME to consider how someone could disrupt it (for lack of a better world) given that a lot of the operating model is still fairly similar to how it was in the 90s, 00s.
I agree with Marissa here. There are elements of the operating model and the business model that are aligned, such as being asset and labor lite. However, a big value proposition that the product is also calorie lite. One assumption is that the market for fro yo is growing as fast or faster than other dessert speciality places. A lot of health research shows that fake sugar or calorie lite desserts aren’t actually healthy and potentially cause weight gain in the long-term. If this is true, the model for fro yo will break down. Some of the 16 Handles’ locations in NYC are closing down because the repeat customer base is starting to disappear. While they are labor lite (and usually only need 1 or 2 service professionals at the checkout counter), they do rely on having prime real estate where there is a lot of foot traffic. If they can’t sustain those high rents, their assets will become more burdensome. I wonder if they really need as much inside space for seating. Instead, perhaps they’d be better off investing less capital into each store and more into continued marketing for the product.
I agree with the overall thesis of this piece — GitHub has certainly revolutionized the software development process. But I question the underlying assumption that GitHub is a traditional freemium model. GitHub has two separate products and separate revenue streams. It has public repositories that are free and open for anyone to access. But it also has a paid subscription product for teams to use private repositories. Unlike traditional freemium models (where this basic plan is free and the upgrade would come at a cost), GitHub has entirely separate product line for its free and paid service. By offering the free service to all engineers, GitHub uses a brilliant user growth strategy. Winning enterprise accounts, which is core to their B2B business, happens organically through the existing product line. To think about how the business model aligns with operating model I think requires considering these different value capture strategies. It will be interesting to see how they continue to monetize going forward (using GitHub education, gists, etc).