Category Archives: app

Hyperbusiness Opportunity #3

The town of Wilcannia, at the edge of Australia’s Outback, has never been big enough to attract the attention of Australia’s supermarket oligopoly. There is a single market in the town center, privately owned, and frequently accused of price-gouging. As the nearest supermarket is 200 km away in Broken Hill, unless Wilcannians favour a four-hour round-trip drive, they have had to make do with what was on offer.

On the 8th of August, ABC News reported that Wilcannia’s grocer had locked its doors – without any warning, or any explanation. Suddenly, townspeople were unable to buy over-the-counter medicines (including insulin, a real worry), to say nothing of fresh produce. No one had any idea when or even if the grocer would reopen, a blow from which Wilcannia could not easily recover.

Australia’s gigantic supermarket chains – Coles and Woolworths – both offer online shopping experiences: select your items, go through checkout, and arrange a convenient delivery time. Unfortunately, neither company’s delivery area covers Wilcannia, but that’s a problem easily solved by aggregating individual purchases into a single delivery (perhaps one delivery every other day) which would easily cover the transportation costs.

The biggest issue overall would be one of access. Wilcannia’s residents are generally not well-to-do, and many don’t have smartphones. The town may not even have 3G mobile broadband. The number of Internet-connected computers would be low. Here, there’s room for a service that used human power to aggregate the order-taking; order-takers could travel from household to household, helping each household place and pay for an order, in return receiving a payment for this work. Between the distributed order-taking and the additional transportation costs, purchases would be a bit more expensive than if made directly in Broken Hill, but when time and petrol are factored in, it would probably be a bit less expensive than an individual trip to Broken Hill – and far less expensive than the now-closed town grocery store.

This is the kind of vertical specialization that can thrive in connected markets. Everyone needs food, making it possible to create a framework to aggregate and fulfil that need. In this case, it doesn’t even require that everyone have a mobile, or the latest mobile, or access to high-speed networking. Human networks can fill in where telecommunications do not yet (and may never) reach.

This co-operative model could work for any community in rural Australia which wants the benefits of big-city markets within the comfort and community of a small town, bringing jobs to those areas, providing needed competition to monopoly vendors. It would take a bit of groundwork to bring such a system to Wilcannia, but once perfected there, it could quickly be replicated across the nation. It’s the appification of the supermarket.

…Into Vertical Specializations…

Fly into an airport in Australia or the United States, and you’ll see a number of well-dressed men loitering near the luggage carousels. Some of them will approach you, offering you a ride to wherever you need to go. Given that this isn’t strictly legal, most often they wait for you to approach them and open negotiations. After you’ve agreed a price, they lead you out to the parking lot, where a newish black limousine (generally a Lincoln Town Car) awaits. You pop in, and head out. Although neither the airport authorities nor taxi drivers care for this practice, it is widespread. Wherever passengers congregate, you will find drivers.

Informal and only quasi-legal, this transaction carries some risks. The driver might not be insured – what if there’s an accident? Pick the wrong driver, and problems could follow. These fears (which very rarely eventuate) have become the ammunition in a terror campaign by taxi companies as they fight to keep these ‘unlicensed’ drivers away from a reliable and profitable stream of passengers. Yet these limousine drivers do work for legitimate agencies; it’s quite easy to make a call and book a pickup. Once there’s a booking, the transaction has become wholly legal, and no taxi company can do a thing to block it.

The booking serves as a legal fig-leaf. You could be staring at a driver – conveniently holding a sign with a phone number printed on it – call the number on your mobile, and get the driver’s services, right there on the spot. That would be perfectly legal, even though the real-world differences between making the call and a personal approach are barely more than semantic.

Toward the end of 2010, a group of San Francisco-based entrepreneurs recognized the potential of an on-the-fly connection between limousine drivers and passengers. Rather than establishing a centralized switchboard and dispatching center, they developed two applications for Apple’s iPhone. One app uses the handset’s onboard GPS capability to automatically locate a passenger, transmitting those coordinates to any drivers who have marked themselves as available to carry passengers. Limousine drivers run another app, allowing them to review and accept pickup requests.

With little more than two smartphone apps, this firm – Uber – has created a powerful new competitor in taxi markets across North America. Limousine drivers use Uber to add jobs to their schedule, filling their downtime and doubling their income. Some drivers cannily run the passenger app as well, so they can see all the other limousines around them, avoiding areas oversupplied by available cars. Passengers, no longer at the mercy of undependable taxi companies, have flocked to the service, even though Uber charges a 40% premium over an equivalent taxi fare.

Uber did all this without building a fleet of vehicles. Capitalization requirements were minimal. Uber takes an existing resource – limousine drivers – and deploys that resource with the efficiencies available because everyone is directly connected. Aggregating connected drivers creates a virtual fleet. Aggregating passengers creates market demand. Marrying the two creates a new market, and a business model that has no expensive infrastructure, no overhead, and very low scaling costs. Bringing Uber to another city is almost as simple as distributing the two smartphone apps to drivers and passengers.

Working within a transportation framework, Uber found it easy to aggregate drivers and passengers into a marketplace; Zaarly and AirTasker, which aggregate generic labour for generic tasks, have found it much tougher going – because they lack Uber’s specificity. This doesn’t meant that either company will fail, simply that they need to be all things to all people. This has bad and good aspects. It can be bad, because trying to create so many markets means that the same approach must be taken with all of them. The AirTasker app could get you someone willing to drive you around town – but it’s not well suited for it. It’s not well-suited for anything in particular, and that’s its essential weakness.

Yet going wide creates unique opportunities. Careful analysis of the kinds of labour sought can lead to insights which can form the frameworks for new vertical specializations. If a lot of people want their dry cleaning dropped off or picked up, that means there’s room for a service to fulfil that need – a service that both Zaarly and AirTasker could easily offer. It would be as simple as writing a custom app.

If these hyperbusinesses develop the correct listening and analysis skills, they will become ‘app factories’, spinning out a continuing series of apps, each with its own framework creating its own market. Every task that is sufficiently common that it can benefit from this type of app-based-aggregation will find a home in its own market.

This process is not limited to labour aggregation. It extends across the entire business ecosystem. Just as employers and labourers can aggregate and create a market, the same can now happen with buyers and sellers. eBay became a success because it provided connected market aggregation, but eBay suffers from the same breadth-over-depth issues as Zaarly and AirTasker, and has not taken the opportunity to create vertical specializations. That’s the reason eBay has lost the craft crowd to Etsy, a business that could have been theirs, had they been watching their users. Horizontal hyperbusinesses are difficult and often unrewarding, unless they’re regularly harvested for vertical opportunities.

eBay could be ten thousand verticals, each with its own app, its own marketplace, its own highly loyal buyers and sellers. Instead – by its own actions – it will be progressively locked out of every vertical, as competitors leap into the gap created by the auction site’s diffidence. The future is vertical, because markets are everywhere, buyers and sellers are everywhere, and they all want a framework that enables them to connect and do business.

Everything we buy and sell in large quantities – cars, light bulbs, even things like electricity and petrol – will spin into its own vertical specialization, as the thousands-to-billions who want to trade find a framework that allows them to form a market. The economy as a whole is becoming an ‘app economy’.

Hyperbusiness Opportunity #2

I have a housecleaner who visits every fortnight. Due to the variability in our schedules, I send her a text message with a proposed time, which often leads to a bit of negotiation and consultation of our respective schedules before we come to agreement on the specifics of a visit. Although I’ve made it sound a bit complicated, it’s practically frictionless, and possible only because both of us carry our mobiles all the time.

With aggregated labour available on demand, there’s no real reason for me to negotiate with my housecleaner. I should simply be able to put a request into a pool of available labour – housecleaning being the kind of ‘guided category’ perfect for an Airtasker – working my way through the cleaners bidding for my work job. If I were truly lazy or too busy, I could let the app handle the whole thing, giving it a price range, a window of time, and a rating for the cleaner. (I do want a highly-rated cleaner, someone I can trust will do a good job, and will take great care with my possessions.) In that situation, my mobile would simply inform me with a notification that a housecleaning had been scheduled for such and such a time, with such and such a person.

This solves my problem nicely, but does it leave my housecleaner high and dry? Having established a relationship with her, and being very satisfied with her cleaning, I’d preferentially use her services. She could be advertising her availability on Airtasker, specifically looking for me (and her other clients) so she can sweep in and make the first bid – if it works for her. This might lead to even more work for her, as she could aggressively fill her schedule with cleaning jobs that were relatively close together, limiting the travel time between each job – in fact, the app could probably do that for her.

In the end, you have housecleaning-as-a-service, appified, available at the poke of a finger. More and more of the services we use – domestic and commercial – will come to us through such apps. Hyperbusiness is the appification of business.

Hyperbusiness Opportunity #1

On a recent trip to Singapore with my friend Nicola, I poked through an iPhone app named ‘ieat Hawker’, named after the famed ‘hawker’ food halls that dot the city-state. Nicola wanted to sample Char Kway Teow – a delicious Chinese fried noodle dish – at one of the hawker centers. I went through the list provided by my app, diligently checking its location on the map with our location. Each of them involved a hefty trek in a taxi or on the subway – and we were too hot, humid and hungry to embark on that kind of quest.

In a moment of exasperation, Nicola asked me, “Why can’t I tell my phone that I want some good Char Kway Teow – and then have it tell me when I’m near a hawker who can cook some up for me?” And indeed, location-based apps like Foursquare should work this way – you should be able to advertise your interest in something, and let the app find it for you. Instead, the apps work the other way around – they advertise to you all sorts of things that you’re never interested in, which is why none of them have been very successful for businesses.

Now that the market is everywhere, hyperbusinesses listen to what the market wants. Every individual can now advertise their needs in a way that allows the hyperbusiness to offer just what any individual needs, just when they need it.

The model of advertising that grew up in the era of mass media (even all the way to Google) has been turned inside-out by the presence of the pervasive market. Now we each advertise our needs as consumers, and businesses offer to fulfil those needs. This is just what Marico does when it sends its daily text message to coconut pickers. It’s vastly more efficient than a shotgun approach – or even targeted advertising, because rather than trying to gin up demand, a business is always satisfying an advertised need.