Re: [projectvrm] VRM and Uber

[Anandan Jayaraman < >]

Uber is a marketplace that connects professional cab drivers with consumers. 

So is Grubhub that connects restaurants with consumers looking for delivery / pick-up of food. 

The marketplaces that get liquid are wildly successful and make a lot of money. But the ones that do not get liquid fail miserably. And there are many many unsung and unknown failures for every Uber. 

The secret sauce here is not the technology. The availability of elastic clouds and smartphone development platforms have made it possible for any one with seed capital to build cool stuff. 

However, it is incredibly hard to get distribution. Breaking the chicken-egg aspect of a marketplace is difficult and requires your stars to be in optimal alignment.

Benchmark has been investing heavily in digital marketplaces and Bill Gurley, an iconic investor put out this amazing post a few months back on what makes marketplaces work.

http://abovethecrowd.com/2012/11/13/all-markets-are-not-created-equal-10-factors-to-consider-when-evaluating-digital-marketplaces/

It is important to recognize that marketplaces may have elements of VRM but in order to work, they need to be tightly aligned to supply and if anything, most of these marketplaces have indeed become pseudo suppliers themselves by aggregating supply. They are transactional and control the end-to-end experience. 

I don't know if it is possible or even viable to have a generic VRM service that is a concierge for the customer and can be an open standard. May be it can be done, but that path seems to contain land mines at every turn. 

What is more viable is to disrupt specific markets where new technologies (smart phone in the hands of all of supply and demand) creates new possibilities for exchanging signals AND consummating transactions.

regards, AJ

On Fri, Sep 6, 2013 at 2:40 PM, Peter Cranstone < " target="_blank"> > wrote:

Some interesting observations…

Lets look at what makes Uber to VRM'ish:

• Simple - open the app, it locates you and gives you a time for a car to arrive - 25 minutes to 'instant gratification'
  • Click on the Person or settings navicon to change your profile and or payment method

That's it. Probably one of the easiest mobile apps to build. Even the back end web service would be straight forward. This service incorporates three key things that apply to VRM:

1. Simple - no login after the first time and then only uses username and password. No OAuth or any fancy smancy stuff
2. Agile - instant gratification, instant cashectomy, all totally frictionless
3. Adoption - items 1 & 2 drive adoption

And there you have it. You could build this entire system for less than $500k. What you CANNOT do is scale the system - for that you need serious bucks. Also where things will get really interesting is what happens when you want to add other 'services' - that mobile app is going to get complicated very quickly and will probably multiply into multiple apps. From talking with the health care provider that's pretty much a non starter. He wants the app to be agile enough to support 'multiple' services under the same User Interface. Supporting multiple apps is of no interest to him as its expensive and slows down adoption. When I chatted with him he wanted 98% adoption rate within 6 months - why? So he can drive revenues and optimize his services.

Uber has a market cap of $3.5 billion dollars based on the technology you see below - that should tell you a lot. They figured out how to fill in the empty mobile sketch I talk about, and do so in a way that keeps things really simple.  

And one other really important note (this one's for you Britt) note the marriage of context and the ability to share (social) - it acts as it's own distribution channel. Everyone who has a great experience will simply share that experience with their friends. VRM will need to support the share option for sure.

Peter Cranstone