In Part 1 of the post, we saw three “solution approaches” that new businesses use to solve customer needs and jobs-to-be-done. We see three more in this post.
4. Image and Video based solutions
You may have heard about Moore’s law given by Gordon Moore of Intel – the number of transistors per square inch on integrated circuits doubles approximately every two years. This sort of exponential growth will yield a linear graph on Logarithmic scale.
Barry Hendy, an employee of Kodak’s (yes, the company which filed for bankruptcy) Australian division, documented a similar exponential growth in Pixels per dollar.
This along with highly improved connectivity, inexpensive smartphones with cameras in hundreds of millions of pockets and access to the digital ‘distribution channel’ of social media have caused an explosion in the number of photos and videos being captured and shared.
Many businesses have democratized photography and videography with interesting innovations. Instagram which allows users to use digital filters on their photographs. Vine which enables users to upload short videos. Snapchat which has images that disappear after a set period of time. GoPro, a camera hardware company has found a great market in extreme action video photography. Youtube lets people upload their videos easily and presents a monetization and a ‘reputation’ opportunity.
Some have leveraged images and videos as an important part of their businesses. Twitch, a spin-off of Justin.tv is a popular site among video gamers who can broadcast live their own plays of video games. MOOCs (Massive open online courses) are largely present because of the videos from stalwart professors from universities like Harvard. Pinterest allows users to pin beautiful pictures. Photos are an important part of discovery services like Yelp, Tripadvisor and Zomato.
Some recent innovations are live video streaming sites like Periscope and Meerkat which broadcast live events to Twitter followers. Phind allows you to snap a photo and based on that pull in all information and can even book appointments or reservations. Some companies have built marketplaces to buy and sell images.
We can expect image and video based solutions in a lot more industries like in Healthcare, Education, News Media, Consulting, Philanthropy, Sports etc. Current solutions barely scratch the surface of the potential of billions of images and videos in the public domain.
5. Peer-to-Peer Models
Peer-to-Peer models have come to the limelight because of companies like Uber and Airbnb. Peer-to-Peer businesses allow members of the ‘crowd’ to offer and receive services from other members of the ‘crowd’ without any traditional intermediary.
Uber and Lyft allow users to offer rides to other users. It enables users who receive rides to do so faster than the highly regulated and often unionized taxi operators. Airbnb enables people to stay at other people’s homes and makes the traditional hotels irrelevant. Kickstarter allows founders and performers to receive seed capital from other members of the crowd. Lending Club enables members of the crowd to lend and receive from other members of the crowd.
Peer-to-Peer models in other words overturn traditional assumptions as in ‘who is the service provider?’. Peer-to-Peer models are possible and successful due to the following reasons:
1. Members of the crowd have ‘underutilized assets’. For example, a Morgan Stanley research indicates that cars (assets that depreciate and are expensive to maintain) are utilized only 4% every year. Owners of underutilized assets therefore might be willing to turn them into revenue opportunities by renting or ‘sharing’ them with other members of the crowd and often for lesser margins than traditional service providers.
2. Due to digital technologies, transaction costs have dramatically decreased in finding sellers or buyers of these services. Complex software can crunch the data to match the right seller with the right buyer. For example, TaskRabbit has decreased the transaction costs of finding the right employees online instead of having to hire them.
3. Since an incredible number of potential customers are online, successful peer-to-peer platforms can scale rapidly experiencing strong network effects.
Underutilized assets can be anything ranging from vehicles, living space, time, skills, money, books etc. Looking at the utilization rates of the assets we own, Peer-to-Peer models are going to have tremendous growth and can transform many Industries. Let us consider few examples.
In India the desire for home cooked food is great. There are a lot of women who are housewives and who cook great food. Food shows on the Television is something that is watched by a lot of housewives. But their skills are incredulously underutilized – most don’t earn any money for their cooking skills. Peer-to-Peer models can make these housewives as ‘micro-entrepreneurs’ – they will be able to sell their tasty home cooked food to discerning customers.
Or consider another example. Unwittingly, the internet is filled with blog posts on all kinds of topics. Even if 1% of these blog posts are useful, they are a treasure trove of information that is yet to be mined. Technology can piece together several of these blog posts and can probably even disrupt the consulting Industry. Ditto, for all those journals lying on shelves in libraries gathering dust. They are grossly underutilized.
Peer-to-Peer models will continue to attract a lot of attention and may drastically change multiple Industries. For example, Uber will affect sales of automobiles permanently and as a consequence may reduce the revenues of Auto Insurance companies.
6. DIY (Do-It-Yourself) Models
DIY models empower people to create their own products/solutions. DIY models perform one or more of the following functions:
1. They make sure customers get products that are customized to their preferences.
2. They make sure the skill required to create their own solutions is very low.
3. They often reduce the costs when the alternative is to hire ‘experts’.
4. They empower customers who had to previously rely on intermediaries to accomplish a job-to-be-done.
Want to publish a book? Why should you go through a publisher who more probably will never respond to your requests? Amazon’s Createspace lets you access online tools that will enable you to design, print and publish your books by leveraging Amazon’s vast distribution channel.
Threadless and Teespring let you design your own T-shirts and get it printed and shipped back to you. You also may have an option of selling them to others. Vistaprint lets you design your own business cards, mugs and other merchandise.
Want to ‘create’ your own chocolate? Chocri runs a website called createmychocolate.com that lets you choose the base and toppings or choose from crowd recommended creations. You can order it to be shipped to you or to surprise your loved ones.
Companies like Wix and Weebly let you create your own beautiful websites without the need to know a single line of programming. WordPress also has grown to contain hundreds of plugins that any ordinary user can use to create good enough sites.
Shapeways is the world’s largest online 3D printing service and marketplace where you can design, prototype, buy and sell custom products.
Even large companies are employing this approach increasingly. Starbucks for example allows you to customize your own Frappuccino blended beverage. Coca-Cola Freestyle allows you to create a mix of your favorite soft drinks.
DIY models will continue to increase because of two obvious reasons: the need for custom products and because experts are expensive.
Note that companies may use more than one of the approaches. All the six solution approaches may have a huge impact on our future and are definitely being increasingly used by new businesses.