Dotcom Deja Vu

Dotcom Deja Vu

I remember going for drinks with colleagues after work and talking with a bartender who sketched out on a napkin for me the startup he was planning to launch and take public. But he wasn’t looking to launch the next “Airbnb of x” or “Uber of y” – for this was back in March 2000. This is the opening line of the first chapter in my upcoming book “UBERNOMICS: The Next Generation of Business Strategy”. And just like the e-commerce model didn’t translate for most of the dotcom startups, I am becoming increasingly skeptical the marketplace model will translate for most startups. But just like it is rare today to come across a company that doesn’t sell its goods or services online, I predict a decade from now, it will be rare to come across a company that has not incorporated the form of collaborative commerce I call Ubernomics into its business model. In my April 5th article “Capital Hacking – Time to Look Beyond VCs”, I recommended startups look to bring on strategic investors – which could provide them with access to not only the financial capital they need to survive – but more importantly, to the supplier capital, customer capital, or structural capital they need in order to thrive. Only days later, the on-demand valet company, Luxe, which was launched in June 2013 “to change how we park forever”, announced it had raised $50 million and brought Hertz on board as a strategic investor. As John Tague, the CEO of Hertz, stated “Our investment will support Luxe’s ability to scale its successful service to other major urban...
Capital Hacking – Time to Look Beyond VCs

Capital Hacking – Time to Look Beyond VCs

I am skeptical about most On-Demand start-ups as I see most of them as tech-enabled convenience that treats human capital as just a commodity. But this did not keep me from meeting up for coffee last week with my friend Ryan Spong, who is the Co-Founder and CEO of Foodee, a Vancouver-based Goods Delivery company.  For Ryan’s company is different as it is more about the Sharing Economy than the On-Demand Economy. His delivery force is made up of employees, not contractors, and he is building a long tail of under-utilized restaurant capacity to bring “the food culture to the work culture” and make high-quality food accessible to time-deprived office workers. I congratulated Ryan on his Series A round of $6 million, which is pretty impressive given venture capital is becoming more scarce. In fact, only 4 of the 75 Sharing/On-Demand Economy companies in my database raised capital in 1Q16, versus 18 companies in 1Q15. I also confided in him how disheartened I was to discover that Storefront, a commercial retail space Corporate Asset Sharing company founded in January 2012 with the social mission “to make retail space more accessible, empower store owners/merchants, and foster local economies”, had just closed its doors. With rumors of unicorns at risk of turning into “unicorpses” and “donkeys”, I told him I was becoming increasingly skeptical that the marketplace model will translate for most start-ups. The low barriers to entry, attractive economics, and recent flood of capital to these start-ups has led to the perfect storm in terms of Porter’s five forces. Due to the unique dynamics of a marketplace, the heightened competitive...
SaaS: The Next Chapter for Marketplaces

SaaS: The Next Chapter for Marketplaces

The reality is the book publishing world is broken. The only value – beyond credibility – of having a publisher is distribution (although that doesn’t matter nearly as much as it used to given Amazon) and editing (and you can hire someone to do that). Wow! When I received this dose of reality a few months ago from a highly successful published business strategy author, it crystallized for me how the combined democratization of content and influence has wreaked havoc on the traditional publisher model. No worries, I thought to myself – I’ll just finish writing my book and then figure out how to self-publish it. Dread. Fear. Panic. Last week I finished writing the first draft of my book but then I realized I had absolutely no clue what to do next… I wasn’t worried about finding a distribution partner as companies like Amazon have democratized the publishing process by empowering authors to sell e-books directly to their reader through their Kindle Direct Publishing (KDP) platform. But what about the in-between part – how do I magically transform my rough first draft into a polished piece of art that I can download to KDP? I decided to do some due diligence and Googled “self-publishing” – but I was bewildered when it returned 7.3 million search results. Where to start? Then I remembered I had joined a LinkedIn Group a few weeks ago called “How to Self-Publish a Book”. And that’s where I discovered Reedsy. I felt my excitement build as I read the February 16th LinkedIn article published by Emmanuel Nataf, the co-Founder of Reedsy, titled “Today, Reedsy...
Hyatt Launches Airbnb for Boutique Hotels

Hyatt Launches Airbnb for Boutique Hotels

Yesterday, Hyatt became the latest company to embrace UBER-nomics, joining the growing ranks of forward-thinking companies like Amazon, Expedia, LinkedIn, GM, and Ford. As Mark Hoplamazian, the President and CEO of Hyatt Hotels Corporation, stated in the company’s press release, “The Unbound Collection by Hyatt provides us with a myriad of opportunities to grow, not only in new markets, but also in places we know our guests want to go.” Instead of acting from a scarcity mindset of acquiring independent boutique hotels as it may have done in the past, Hyatt is embracing a mindset of abundance by accessing the new social value driver of collaboration. The new Unbound Collection is a brilliant strategic move, as it will enable Hyatt to create a Corporate Asset Sharing marketplace that leverages its strong brand equity, customer capital, proprietary data, and the strength of its marketing/loyalty program. As Hyatt generated $4.3 billion of revenue last year, I am guessing this will not have a material impact on its top-line. However, it will enable it to start to defy traditional economic principles of scarcity in terms of both supply and demand: Long Tail of Supply – Hyatt’s inventory growth for its Unbound Collection is not limited by traditional time or capital constraints, as it is able to access a long tail of under-utilized rooms at independent boutique hotels Blue Ocean of Demand – Hyatt’s revenue growth is not constrained by existing demand, as it will be able to market these hotels to Millennials as well as customers that have switched or are looking to switch to Airbnb. This will enable it to access...
Ford No Longer Sees Its Future as Just an Auto Company

Ford No Longer Sees Its Future as Just an Auto Company

On January 11th at the North American International Auto Show in Detroit, Mark Fields, the CEO of Ford Motor Company, declared that he no longer sees its future as just an auto company, but as an auto and mobility company. And with this, he announced the upcoming launch in April of FordPass, Ford’s new digital and physical marketplace platform inspired by the company’s desire to create true authentic long-term relationships with its customers and continue to improve its products and services. When I listened to Mark Fields discuss how FordPass was inspired by the company’s desire to emulate the successful customer-centric strategy of companies like Apple, Nike, Nespresso, IKEA, and Disney, I couldn’t help but smile. As you may or may not know, I launched Brady Capital Research six years ago to focus on companies making a positive difference in the world and the foundation of my UBER-nomics thesis is based on the two years of research I did into how customer advocacy would drive abundance of demand as influence becomes democratized in the new Social Era. Interestingly, Ford’s announcement came only weeks after General Motors (GM), announced it would be making a $500 million strategic investment in Lyft and only a week prior to GM’s acquisition of recently shuttered car-sharing platform Sidecar. Back on November 16th, when I wrote the article “A Wake-Up Call for CEOs from Amazon, LinkedIn, and Expedia” discussing how those three tech companies had made recent strategic moves into the Sharing/On-Demand Economy, I never imagined that they would be joined so quickly by century-old Industrial Age stalwarts like GM and Ford. This is making...