[Photo by www.shopblocks.com, under Creative Commons]
Note: This is a special edition of the This Week in Disruptive Tech column as part of our week of learning on the Future of Platforms for the Founding Fuel community.
The column brings to you interesting stories that highlight a new development or offer an interesting perspective on technology and society. Plus, a curated set of links to understand how technology is shaping the future, here in India and across the world. If you want to get it delivered to your inbox every week, subscribe here.
When your magic doesn’t have a market
If you can build a platform to transport people from Place A to Place B in ‘the right now’ economy, you can transport food with the same speed and precision, and if you can transport food, you can transport other stuff too. It all adds up to a huge, huge market. This narrative is one of the factors that is pushing the valuation of a number of startups.
Sometimes, this cross-selling (or cross-domain offering) can give it an advantage. Back in 2015, Uber launched a food delivery service in the US that was uniquely Uber. Instead of waiting for a customer to place an order with a restaurant, which then gets prepared, picked up and delivered, Uber offered a limited menu that its drivers carried around in temperature-controlled packages. When a customer placed an order, the nearest driver delivered it—within 10 minutes. “We thought, ‘What can Uber bring to this field that’s special and magical? and our delivery time is pretty magical,” an Uber executive, Jason Droege, said at that time. (His title, not surprisingly, is VP, Uber Everything.)
But such magic might have a limited market. In other places, the company might have to compete in the traditional way with its competitors. In India, UberEats was launched in 2017, and has been having some trouble keeping up with its bigger rivals Zomato and Swiggy. This year, its growth in India pulled global growth down a bit. And there are reports that Uber might sell UberEats India off, perhaps to Zomato.
Zomato’s rival Swiggy, which is threatening to eat Dunzo’s lunch, has said that it’s aiming to get 30% of its revenues from outside food delivery in a couple of years.
Dig Deeper
- How Data Helps Deliver Your Dinner On Time—and Warm | Wired
- Sandeep Murthy, Lightbox and Dale Vaz, Swiggy: Anticipating Consumer Needs with Data | Watch on YouTube
The publisher’s dilemma
One of the biggest dilemmas executives in big businesses face is whether to treat technology companies as partners who will help their businesses grow or as competitors who will bite into their markets. When social media companies started getting bigger, many media executives saw them as technology platforms giving them access to a larger pool of audience. There was optimism. A new report—Platforms and Publishers: The End of an Era—a part of a multiyear study on the relationship between media and tech platforms, by the Tow Center for Digital Journalism at Columbia Journalism School, has found that much of the optimism is gone.
“The most discernible difference between past findings and those of our most recent interviews is that any hope that scale-based platform products might deliver meaningful or consistent revenue for publishers has disappeared. This does not mean, however, that publishers will no longer work with platforms—an impossible scenario, as the latter are the gatekeepers of the online information ecosystem—but rather that any optimism about the ability of ad-based products to sustain journalism seems all but gone.”
Some media companies spent time and resources to create content for social media, hoping it will pay back—that it can cross-sell itself on other platforms. It looks like they are having a rethink. Now, they focus more on their own properties, take their loyal readers more seriously, and think twice before taking money from ‘ethically compromised’ platforms.
Dig Deeper
- Facebook and the “Free Speech” Excuse | The New Yorker
- Facebook’s New Approach to Journalism Is a Well-Timed Distraction from Antitrust Scrutiny | CNBC
The bumpy road to profits?
Sweden-based Truecaller, which entered India's digital payments market in 2017 with the acquisition of Chillr app, plans to enter the credit business next year.
Truecaller started as an app that helped smartphone users identify and block spam calls. In that, it was a bit like Facebook (Peter Thiel, one of Facebook’s early investors, says it’s in the ‘real identity’ business.) But unlike Facebook, it didn’t find much success with advertisements. There weren’t enough takers for its premium service either.
Then, it spotted a road to profitability in the fin-tech space in its biggest market by launching Truecaller Pay. (Of the approximately 150 million active users globally, 100 million Truecaller daily active app users are in India,) (Facebook is betting big on payments too, through WhatsApp.) However, Truecaller has faced too many bumps in the road. It has hardly made a dent in the market—with just about 10 million users. Worse, earlier this year, it hit the headlines thanks to a bug that automatically registered some of its users for UPI. It came under intense scrutiny. Abhay Rana, a software developer, found that the app's SDKs (software development kits) allowed data access to credit scoring services, MessAI (now a part of Truecaller) and Walnut app. Truecaller was running a credit pilot. So, the news didn’t really come as a surprise. The big question is whether providing a credit option will convert more customers to its payment app.
Dig Deeper
- Truecaller: Scaling in the Next Billion Markets | Watch on YouTube
- What’s Bugging Truecaller | The Ken
Also read
- Making sense of the New Capitalists: Your smartphone is the gateway for platform businesses to drive their hooks deep into your psyche and pockets, edge out traditional businesses, and reset markets. In doing so, they are becoming monopolies, the likes of which we’ve never seen before. What is fair play in this new world? (By Haresh Chawla)
- How platforms really work: A reading list: A curated list of articles, videos and a podcast (By NS Ramnath)
- Understanding platform power—disruption or destruction? Founding Fuel Masterclass: Platforms, data, analytics are not going to go away. The good news for incumbents: they do have strengths they can play to. The bad news: They will need a different mindset and rethink customer experience.
