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I foresee regulatory problems down the road, including FCRA-type requirements to allow credit applicants to know what these 10,000 data points are so that they can challenge false information. And get ready for tremendous blowback if ZestFinance is using any metrics with disparate impact across racial groups - which it almost certainly is - and can't demonstrate why that particular metric is needed for credit evaluation.
4 months, 1 week ago on Flush with $20M from Peter Thiel, ZestFinance is measuring credit risk through non-traditional big data
The problem with this pricing comparison is that it is highly dependent on the price that Netflix and others are paying for 3rd party, non-exclusive content. Netflix et al don't own pipes into consumers' homes, and they own a tiny fraction of the content that they stream. They only license it at the prices that they do because the content creators have covered their costs with first-run theatrical and/or cable showings and view streaming as add-on revenue.
I think that streaming in some fashion is likely to be the future. I also think, though, that content owners and owners of the broadband connection (whether that is wireless or wired - so telecom and cable operators in some fashion) will capture almost all of the profit from this business model.
6 months, 1 week ago on Streaming video killed the cable star
Greenling is actually a pretty different model from these 2 examples. It offers a weekly delivery of a box of local/organic produce, with either customization or pre-selected options available. They have some other grocery items also, but the selection is focused on produce. It's not a meal delivery service like these. I'd categorize Greenling more as a replacement for produce shopping at a farmer's market or grocery store.
8 months, 1 week ago on Are meal delivery services the future of groceries? PandoDaily finds out
@ThumbsUp17 Building on your idea, I'd think that Whole Foods or another grocery store could profitably offer similar meals for pick-up at a much lower cost than these delivery services. (Perhaps that's your idea, but I read it to still be delivery.) That gets rid of delivery cost and should allow for less packaging. Plenty of grocery stores already have the logistics in place to offer the customer either individual ingredients or a fully-cooked meal. This offering splits the difference between those 2 options, so they should be able to leverage existing inventory and distribution costs.
Pick up is a somewhat different convenience proposition, but the trade-off has some benefits. Offers the chance to pick something up with limited planning - maybe a quick call-ahead so that the meal is packaged and ready to go when you arrive - rather than being tied to a weekly delivery schedule. Offers a chance to pick up a few other items while stopping at the store. No need to worry about food sitting outside your door all day.
The downside is obviously the need to stop by a store. That's generally less of an issue for someone who commutes to work by car, though, which is most of the population. The pick-up idea may not work as well in NYC or San Francisco, but I think it will be more successful than delivery in the markets where Fresh Dish operates (southern California, Arizona, Nevada).
@jckhewitt I'd be interested to know the names of these examples because I haven't experienced these issues with the Saks, Neiman Marcus, Nordstrom, and Barney's websites or fulfillment operations. I think of names like those as competitors for Amazon in this arena, as they have well-established designer relationships, buyers who are used to providing what Ms. Lacy calls an "editorial, curatorial stance", and opportunities to coordinate with their store locations - e..g., offering the option of in-store returns for people who wish to do so.
8 months, 2 weeks ago on Amazon’s confused foray into fashion tries to please too many women. Will it please any?
@williamle83000I agree. Amazon is a classic case of a company that I like as a consumer but hate as an investor. Amazon has over $60 billion in revenue but makes no money. That should be more than enough scale to invest in growth while also turning a profit. There's no way that Amazon should be a $120 billion market cap company. Bezos is no Steve Jobs - Jobs knew how to develop products that mint money. Bezos may someday have a massive online retailer with margins and return on invested capital at or below the level of big discount chains like Wal-Mart and Target
When I see Ms. Lacy write "No margins? No problem!" when describing Amazon, it makes me question if she has any understanding of business as an activity that should generate a profit, in the future if not now. It's like going back to 1999.
Sarah, I'm curious to hear more about how the "Pay Later" feature worked. I assume that actual processing of the gift and notification of the recipient was delayed until you paid? How did it remind you to pay - just a notification from the app, or send an email, or send a series of emails?
Just interested to know, as it sounds like a neat feature, so I'm initially inclined to give Facebook the benefit of the doubt and assume that Pay Later was dropped because of some problem - poor conversion rate of people actually paying later, perhaps? Though, if Facebook is struggling to get even the basic Gifts functionality to work properly on mobile apps, I probably shouldn't be so generous - maybe they just pulled the Pay Later feature to simplify Gifts while they work through problems.
10 months, 2 weeks ago on Facebook Gifts has had a rocky debut, say multiple sources
@Ohhhjohnny @eringriffith @MarinPerez Yes, at $110 per day featuring only Audi A4's, it sounds like a niche product. There could well be a market for it in larger cities but, to your point, for a frequent renter who is a Gold or Preferred member with a particular rental car company, renting is already a pretty good experience. You already bypass lines and counters at lots of larger airports - not very good fact-checking by Ms. Griffith to say that's a unique new innovation - or move to the front of the line at some airports where that's not an option. You have pre-set preferences that avoid most if not all of the BS about insurance and loss damage waivers (though not, at least in my experience, dealing with the annoyance of getting a bad deal on any fuel option other than stopping at a gas station near the airport and returning the car full).
So, it's an interesting idea, and I can see how service ends up better because Silvercar focuses only on a relatively high-end market. I don't see it dramatically changing or driving out of business the current rental car companies, though, any more than Saks or Nordstrom changes or drives out of business Target or a mid-range department store. It seems like a market segmentation play to me. Silvercar is targeting a lucrative and demanding part of the market, so it could work. Flip-side is that these are also good customers for the incumbents, and they've got some potent weapons to use in fighting back: corporate account relationships/pricing and established relationships with airline frequent flyer programs are a couple that come to mind.
11 months, 1 week ago on Silvercar goes live with airport car rentals in Dallas
@markrogo I agree with your point - there seem to be a lot of people (Ms. Lacy is far from the only one) who idealize certain business models and are upset when change comes in the form of a price increase, or advertising, or something else, without understanding that the prior business model really didn't work.
A similar second complaint that I have, by the way, is people who want to exempt these business models from established laws or taxes basically just because they like them. If someone is paying me to drive my car, why shouldn't I owe rental car tax? Same question on hotel/motel tax if I start using Airbnb to run a series of short-term rentals. Or, for that matter, those who are firm believers of strict zoning in their neighborhoods, except when it starts to impact their ability to make money using Airbnb.
11 months, 1 week ago on There are just so many reasons to hate the Zipcar/Avis deal
@BaluChandrasekaran @gelt The offer from Avis is a 49% premium to where the stock was trading before the deal, so they are paying a substantial premium.
Color me dubious that users will prefer these ads to display ads. As the author notes, there's a tension between user experience and native ads on most platforms. Left unsaid: display ads may not be especially effective, but users tolerate them in part because they are relatively easy to ignore, which is why those who sell advertising are trying to find alternatives. On the platform and advertiser side, however, will the response rate to native ads increase sufficiently to justify higher costs for creation and customization - especially when the advertisements are limited so that they don't intrude on user experience?
1 year, 2 months ago on Native Advertising Will Save Us All. Maybe.
I have to chuckle at Amazon as a model for what could go right for Facebook, since Amazon appears insanely overvalued in the public markets today. Amazon has a $118 billion market cap, and net income of less than $500 million, despite over $50 billion of annual revenue. Trailing P/E is 318x, and even the forward P/E is 109x. Apparently some investors have bought into the idea that Amazon would be or will be extremely profitable once its "investments" pay off, but I have a tough time seeing why that's the case. If it doesn't have the scale to be profitable at over $50 billion of revenue, when will it? Year-over-year revenue growth was 30% in the latest quarter. That's nice growth, but a level at which a business ought to be able to invest for growth and still be solidly profitable. I'm not saying that Amazon doesn't have a viable business, just that it is insanely overvalued at the current stock price.
Expanding Ms. Lacy's point regarding a core of "believers". The best estimate that I've seen is that on SecondMarket a total of roughly $1.75 billion of Facebook shares over a period of 4+ years - http://blogs.reuters.com/felix-salmon/2012/05/18/how-to-make-250-million-trading-facebook-shares/ . Even as recently as the first quarter of 2012, only about $200 million to $300 million per quarter of transactions occurred. So people extrapolating from these trades to assign Facebook a private market valuation of greater than $100 billion was always something of a canard - that figure was based on the sale of an incredibly small number of shares and gave no idea if there was any depth to demand at those valuations. To compare - as a public company, even with a significant number of shares in the hands of large holders who don't trade (e.g., Zuckerberg), about 50 million to 100 million Facebook shares trade per day - roughly $1 billion to $2 billion in dollar terms. Again, that's $1 billion to $2 billion per day now, versus private market transactions totaling only $100 million to $200 million per quarter.
1 year, 2 months ago on Why Silicon Valley and Wall Street See Facebook So Differently