Category Archives: mobile

…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.

…Aggregating Everything (Including Labour)…

Several years ago, when I lived in Los Angeles’ Hollywood Hills, I had a house deep in the bowels of Laurel Canyon. Set into the canyon wall at the bottom of Lookout Mountain, my driveway lay twenty meters and many steps below the house itself. Shopping day always meant hauling bags of groceries up the steps in relay fashion – from car to door, from door to kitchen – a good bit of exercise.

When I purchased a new refrigerator those steps became more problematic. The business which sold me the appliance happily got a workman to bring my new refrigerator up those steps, but, as I was not handing over my old refrigerator for recycling and resale, they left that one alone. I had two big refrigerators in my tiny kitchen, and needed to get the old icebox into my garage, but couldn’t move it myself, lacking both the equipment and the finesse to transport it without sending it crashing down the steps and into my driveway.

I decided to advertise my need on Craigslist, the web-based classified advertisements that since the mid-1990s have been connecting people in need to those who can fill those needs. About a day after I posted my request, I received an email from a Hollywood ‘best boy’ with a pickup truck, dolly, and the requisite training to guide my refrigerator into the garage. We agreed on a time, and I paid him fifty dollars for his trouble. Problem solved.

Before CraigsList, I could have put a classified ad in the local newspaper – the Los Angeles Times – but that would have taken so long it’s likely I would have just found another way around the problem. Only when it became easy to connect someone with a need to someone capable of fulfilling that need did this market appear. The need was always there, but it had been too difficult to bring the parties together. Craigslist created a common meeting point, aggregating people with needs, and people to meet those needs. Fostering that simple relationship had been practically impossible before the web. In retrospect, it appears completely obvious.

Now that markets are everywhere, everyone has the capacity to make a deal, but capacity is in itself insufficient for business. People need both capacity and a reason – they have to share some common interest, and they need some way to connect around that shared interest. Craigslist city-based websites and manifold categories provide that framework; the rest happens naturally, as people seek each other out.

At its core, every hyperbusiness defines a framework which creates a marketplace — often where none existed before. Craigslist creates the kinds of markets that upscale urban Americans need – reflecting its San Francisco origins. Every market has its own needs, and each requires a specific framework.

In Kenya, a vast number of people survive as casual labourers, going from one short-term job to another, always keeping their eyes open for the next opportunity. Although many employers need casual labour, that labour – especially when it requires some skills – has never been easy to find. To solve this problem, NGO Mobile4Good created Kazi560. ‘Kazi’ means work in Kiswahili, and 560 is the SMS short code for the mobile-based service. A labourer looking for work registers with Kazi560, advertising their interest in specific categories of jobs, such as cooking or nursing. Employers advertise their labour needs on Kazi560, and the service then sends a text message to labourers who have indicated their interest in fulfilling that need. If the labourer chooses to respond to the text message, they’re given the information necessary to apply for the job.

More than two-thirds of Kenyans own mobiles, so Kazi560 can effectively reach the majority of the nation’s labourers. Connecting employer to labourer around the framework of job categories, Kazi560 has created a fast, frictionless marketplace for temporary labour in Kenya where none had existed before. Aggregated, these labourers become attractive to employers, who turn to Kazi560 to fulfil their short-term labour needs. Kenyan businesses can now plan around the availability of short-term labour – something they couldn’t do before Kazi560, because the labourers were not connected to employers. It’s a true win-win: labourers get jobs, and businesses get the labour they need when they need it.

Two startups – one in America, the other in Australia – show how the pervasive market produced by the mobile can aggregate demand and supply. Zaarly and Airtasker have both released smartphone apps that allow anyone to post requests for labour – someone to pick up the dry cleaning, paint a fence, clean a garden, etc. That request goes out to every person in the locale who has advertised their availability to do some work. A negotiation follows, as the prospective employer gets a number of inquiries, vets candidates, and agrees to a price. All of this activity happens through these apps, so it transpires quickly – anywhere from minutes to a few hours.

Both Zaarly and Airtasker have transformed the mobile into an employment platform – providing labour or a job, depending on the intention of the individual. These tools could even be used in both modes simultaneously, allowing an labourer to bid on a job, then ‘subcontract’ parts of the task to other labourers. Everyone walking around with a smartphone is now a potential employer or employee – all they need is the right reason to connect.

Airtasker has stated the biggest problem confronting new users is decision paralysis: with so much potential, people get bewildered with choices. They’ve decided to produce some guided categories – simple errands and the like – that allow users to experience the value of their service, and help them to become accustomed to this new and very powerful market in aggregated labour. Soon, people won’t need any guidance to use the always-available pool of connected labor. We’ll think of it as an on-tap resource, like electricity.

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.

Markets Are Everywhere…

photo: v1ctor

Coconuts can be good business. In the southern Indian state of Kerala, families have planted coconut trees for countless generations, always keeping a close watch on them — as coconuts fall from ten meters high, they become dangerous projectiles. At some point someone decides something must be done, and someone gets dispatched to find the coconut picker. A village might have a few coconut pickers – wiry men with good balance who can scale the heights, snip the branch, and catch the coconut before it falls – but pickers can be very hard to reach. A good coconut picker will be up in the trees most of the day. Since he depends on customers coming to him, he has to hope his customers hear through the village grapevine who’s tree he’s climbing that day.

One day, in one village somewhere in Kerala, one of the coconut pickers bought a mobile. This wasn’t particularly unusual – India has nearly a billion mobile subscriptions – but it led to something completely unexpected. Now that his customers could reach him all the time – mobile reception is particularly good at the top of a coconut palm – he got a lot more work. Within a few days all of the other coconut pickers in the village were going wanting for work, because it was just too easy to make a call to the picker with a mobile, and too hard to search through the village looking for any of his competitors.

In a case of adapt-or-starve, within a few days all of the other coconut pickers in that village had their own mobiles. Now villagers could reach any of the pickers at any time, arrange a mutually convenient time for the picking, perhaps even engage in a little friendly negotiation – when your competitors are no more than a few digits away, your customers are more likely to shop around.

Now that almost everyone, everywhere has a mobile, everyone, everywhere is able to trade anywhere, at any time. The market has always been a place and time where people came together to do business. The mobile has made taken the market and amplified it, made it pervasive and ubiquitous. You don’t have to install a market app onto your smartphone, because we are the market makers. Teach a man to fish, and you’ve fed him for the rest of his life. Sell someone a mobile, and you’ve turned them into an entrepreneur.

Once a whole nation has mobiles, and everyone can do business, all sorts of businesses become possible.

In present-day India there’s a shortage of coconut pickers – the job lacks prestige, and a new generation of better-educated Keralans prefer to find their opportunities closer to the ground. But the demand for coconuts has continued to grow. Marico, an Indian manufacturer of health and beauty products, struggled to source a supply of coconuts – either they had to deal with unreliable middlemen, or establish relationships with hundreds of thousands of individual pickers. Neither alternative gave the company any sense of security regarding its supply chain.

Marico asked coconut pickers to register their mobile numbers with them; in return, each morning Marico sends those pickers a text message with the price it’s willing to pay for coconuts, and the pickers decide for themselves whether it’s in their financial interest to fulfill Marico’s order. Working directly with the pickers, Marico modulates the supply of coconuts harvested to meet its demand with small variations price it offers pickers. No middlemen, no supply chain headaches, and no infrastructure – Marico treats each picker as an entrepreneur, and everything else just happens, almost magically.

This capacity for self-organization is one of the benefits of pervasive markets. Marico advertises its need to the people capable of meeting that need, and the web of communication and connections does the rest. It’s an ‘invisible hand’, of sorts, hard to distort or disrupt, and easy to duplicate. Marico’s competitors for coconuts will need to make sure they get the numbers of those pickers, so they can make their own offer – on some days, a competitor would want to wait until after Marico’s sent their offer out, so they could better it. On other days, you might see price wars breaking out, as the competitors overbid each other into a market bubble, or price collapses, as competitors underbid one another in a search for the bottom. After such a collapse, you might even see a network of pickers band together in a syndicate, setting their prices and establishing long-term production contracts with coconut-consuming businesses. All of this is now possible – even easy – because markets are everywhere, even in the tops of trees.