Tag Archives: Zaarly

…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’.

…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.