Uber, Surge Pricing, Halloween and Analytics

If you want to, we can supply you / Got enough work to feed the whole town - Akon

Uber is an advantageous service for anyone that lives in a major metropolitan city. Everyone has been there; downpour, no cabs, need to get to x as soon as possible. And as it turns out there actually is a reason beyond perception that there seems to be a lack of cabs during periods of high demand. Behavioral economists have concluded at least part of the reason for the seemingly irrational mismatch of supply with taxis in periods of high demand is that cab drivers hit their target daily income quicker and in turn cut their days shorter. It doesn't just seem that there are less cabs, there actually are less cabs.

Uber (and recently launched Groundlink ) through both apps and SMS allow you to request a blackcar to your current location and automatically be billed to your credit card. "Uber takes GPS data from your ride and charges for distance or time depending on your speed. When your Uber is traveling over 11mph, we charge a distance fee. When your Uber is traveling at or below 11mph, we charge a time fee."

Problem solved? Mostly. Anyone that has been through Halloween in New York City has a seen a few things that are indelibly imprinted in their brain and has also experienced how painful of an experience moving around is. Like a diet New Years Eve, people seem to come out of the woodwork, jam the streets and take every cab imaginable. Uber is attempting to solve this issue on Saturday night.

Uber will be using "Surge Pricing" from the hours of 7 PM on Saturday 10/29 to 3 AM. The company will use real time analytics to measure customer demand with pricing increasing up to 2x at points of high demand. Their goal is "more drivers will come out and stay on Uber with higher prices and [they] keep those cars full by adapting to changes in demand throughout the night."

Ultimately its a variable pricing model that uses real time analytics, allowing for (hopefully) an evening out of supply and demand. A really smart usage of data if done properly and not simply turned on for all 8 hours.

Uber should walk away from Saturday night with a. more satisfied customers b. more money c. more information about their users spending habits. Look for this to not just become an isolated Halloween occurrence  but instead expand to include various situations, from bar closings to weather issues all with the added benefit of more data for the company to mine.

BuyWithMe, please?

A post by BeatBeat today reflects an inevitable outcome that has been a long time coming for many of the companies receiving funding at tremendous valuations over the last few years. There have been a host of extremely scalable companies raising money at great valuations but distinguishing themselves only slightly. Some of the companies with potential to grow will never reach that potential and will ultimately stagnate, consolidate or simply die off.

BuyWithMe, a company in what was a red hot, daily deal industry, appears to not just have hit a speed bump but instead a wall at full speed. The company, which had acquired 6 companies in 6 months, has laid off a large portion of its work force (rumored at 75%) with scathing postings from disgruntled employees.

BuyWithMe had raised $21.5mm from Bain Capital Ventures and Matrix Partners and appears to be guilty of both mismanagement as well as being boxed out by the leaders in the space, but the point remains. The daily deals space will have few broad winners that emerge victorious, and a bunch of companies that fail to meet expectations. Similarly scalable industries will feature a similar landscape; broad success, niche players and failed companies.

Groupon just went out for their IPO roadshow after a few snags along the way, and ultimately the company will have their success. Differentiate or die is an old marketing phrase that translates quite nicely to companies failing to distinguish themselves enough from the market leaders. Competition breeds quality for consumers, but the right horse, not the right race ultimately wins the day.

Updated 10/21/2011: Trend continues with TheLadders laying off 30 people

Wahooly: Invest in startups for free

Launch posted on this earlier today, but Wahooly is a Minnesota based startup that allows you to invest in companies without actually providing capital. Founder Dana Serverson hopes to leverage users feedback to provide guidance to startups in exchange for equity. The hope is that the guidance will help the startups, and that the testers will be more likely to promote the companies they have ownership in.

140 characters vs. Sean Parker

bitly (formerly bit.ly) was the default URL shortening service for Twitter. The company:

- Received its Seed in January 2008 from betaworks
- Raised a Series A from a host of big name angels in March of 2009 (Ron Conway, Chris Sacca, Roger Ehrenberg to name a few)
- Issued debt in February 2010
- Raised $10mm in Series B in October 2010 from RRE Ventures, SV Angels, Mitch Kapor and AOL Ventures among others

Some big names in the venture space to say the least. And the company was going along great with one inherent issue: it was directly tied to Twitter. Then one day it wasn't. Inevitably Twitter created its own automatic shortener. It developed t.co to automatically shorten links. And then companies began to develop their own customizable shortened links. es.pn. goo.gl. huff.po.

And now link shortening has drawn the ire of he of Napster, he of Facebook, he of Justin Timberlake. Sean Parker would like to see it done away with altogther

sparker 7 Oct
The need for link shortening is idiotic, @jack -- links should be meta-data attachments to each tweet, not part of 140 char limit

Parker  joined Twitter and waited 4 days to start a campaign against link shortening. What will happen? Probably nothing and Parker is hardly the first to suggest this, maybe the most influential, but not the first. If @jack wakes up one morning and decides Sean Parker is right, will an industry vanish as quickly as it rose? 

Conversely, link shortening companies were able to successfully tie themselves to a growing giant in the industry. Tinyurl had won. Then bitly. Now who knows? But if Parker has his way it will be no one.

The interdependence rings similar to Zynga, online social gaming and Facebook. Although Zynga continues to work on Project Z, they and similar companies are at the alter with Facebook. If the marriage works, like it appears to have for Zynga, your prenup expires and are sitting pretty. Barnacles attach themselves to whales and do just fine.

bitly and other link shortening platforms cost virtually nothing and angels and VCs will have vastly different risk profiles. Some will want to spray singles and doubles all over the infield. The Ichiros. The three yards and a cloud of dust. And others will swing for the fences every time. Jason Heyward. The Raiders' vertical passing. And ultimately anyone that invested in the industry knew the risks involved in being a complimentary service to Twitter.

Even if they didn't count Sean Parker among them.



As I wrote this bitly released a predictive social search for their premium users

Thanks to Monster for help

Sooooo Netflix and Qwikster

Netflix (September 20) continued its string of missteps and corrections today, announcing that it will not be splitting off its two core businesses. The market has actually received the news fairly well with NFLX trading up 6.76% (with overall market up 2.55% so far today). This is the second time in the last month that CEO Reed Hastings has had to alter course/explain a decision he made previously, and both have been received fairly well by the market as a whole. As a public company your missteps are obviously magnified with a herd mentality often compounding losses. Hastings has been reactionary, which appears to have played out favorably in the short term but is concerning for the long term direction of the company.

If the eulogies and writings over the last week about the passing of Steve Jobs have had one consistent message, it's that often times people have no idea what they want (and analysts have no idea what's best for a company). It takes a visionary CEO to have the courage to trust their intuition and do things that go against public sentiment. Chris Dixon had a post the Michael Arrington just dug up about Jobs and Akio Morita and how they each led their companies above and around different focus groups. Each of these CEOs saw where they were going and created their own path to get there ('I drove by the fork in the road and went straight' - Jay-Z), something that Hastings has failed to do.

It takes a courageous person to admit their mistakes. It takes an even more courageous person to trust their gut when everyone else is telling them they are wrong. I spent 6 seasons of my life watching the television show Lost. It was revolutionary and through 3 of those seasons I thought it might end up being on a short list for the greatest show of all time. I realized this would not be the case when two characters, Nikki and Paulo, were written off the show due to fan backlash. It's admirable that the Lost writers heard their fans' voices and catered the show to them, but it ultimately showed the lack of a vision that the great TV shows, the great companies, the great CEOs have. David Simon had a vision for the Wire and its conclusion just like Steve Jobs had a vision for Apple. Neither would have ever compromised the path they were on because of the short term reaction of the masses. Hastings is giving the analyst and business community what they think they want, but appears to lack the vision to trust his intuition and tell them what they need.

Think Different

A few years back the prevalent term was the "Jobs' premium" when discussing Apple's valuation, referring to the extra value placed in Apple's stock with Steve Jobs leading the company. Rumors of cancer's remission or reemergence would cause the stock price to fluctuate violently. Investors were constantly wondering aloud what would happen when Jobs ultimately had to step away from the company for good.

Well that day came and passed on August 24 when Jobs announced he could "no longer meet [his] duties and expectations as Apple's CEO." He stepped away from Apple for the final time in August and passed away yesterday afternoon. The stock price moved a little then and a little today but the imprint of Jobs' vision for the company appear to have withstood the Jobs' premium.

Tim Cook has handled the responsibilities intermittently throughout Jobs' battle and should be more than capable going forward. The iPhone 5 will likely be released next year with Jobs' fingerprints all over it. The iPad 3 will also be released next year, likely the exact extension of what existed in Jobs' mind. And the culture he created will continue to manifest itself not just in Apple, but in all the companies and leaders he helped to inspire. There's a company and country full of Jobs' disciples; influenced by his vision and they will continue use his blueprint. They will continue to find the products we need but don't yet know we want.

Jobs' legacy is undoubtedly partially the products he created, but also the way he approached solutions for problems others could not see. Over the last 18 hours, he's been compared to Edison and Ford and other great minds of generations past. I've struggled with whether this is appropriate or if it is over (or under) stating his influence and it will take decades to fully comprehend his scope.

But beyond the product and the physical legacy, as a visionary, Edison and Ford feel about right as his peers. There certainly aren't any around today.


credit: Arik Hesseldahl for ideas incorporated

1955 - 2011

 

 

Few start ups

RelayRides allows customers without cars to borrow vehicles from neighbors. GM today announced that they would be partnering with RelayRides to allow access to OnStar. All peer to peer rentals, it differs from several of its nearest competitors. 15% of the fee goes to RelayRide, 20% go to car insurance and 65% go to the car owner.

Leaky is a new insurance search site that makes it easy and simple to compare auto-insurance prices. You input your information one time and then retrieve insurance prices for every major car insurance company. Y Combinator funded.

Breezy allows you to print and fax while on the go. Breezy has a mobile app that allows customers to print to printers around various cities around the globe (currently over 1,000 printers). Partners with copy stores and hotels to allow easy printing at various locations. Funded by Accel Partners among others.

It’s Good to Be Michael Lewis - New Yorker by Jessica Pressler

Collins Tuohy has told this story before, and by now her delivery is spot on. It was Thanksgiving morning, and her family were on their way to pick up breakfast. “Because in our household,” she says in her Memphis drawl, and pauses for emphasis. “My mother thinks that if we go and get food.” Dramatic pause. “And bring it back to our house.” Another pause. “Then it counts as home cooking.” Continued

Unintentionally funny music videos

The modern concept of the music video really began in 1964 with the Beatles' "feature film" A Hard Day's Night but began to appear in different forms throughout the 1970s with full length movies (like Tommy and The Wall) and various others. Music videos cemented their standing in popular culture with the launch of MTV in 1981and the iconic Thriller video a little over two years later. Thriller single handedly revolutionized the way music videos were thought of both by artists and by the general public. The video became more iconic than the song itself and videos became a new way to market and position songs for artist.

Music videos can be a very personal undertaking for an artist or it can be a slapped together product by a record company. Thriller cost half a million dollars in 1983, while some videos today appear to be shot on the Zapruder camera. Some have stood the test of time, while others come across as completely dated. But allowing musicians artistic freedom to produce a video, something nearly all are entirely unqualified to do, has left some relics of unintentional comedy over the years. Videos that appear to be nearly satirical now, but at the time weren't made in jest at all. Videos that probably were bad when made, and have come full circle to simply humorous now. 

Top 5 unintentionally funny videos

5. Tommy Seebach - Apache

 

Tough to beat the 22 second mark in this one. I had to search to make sure this wasn't meant to be as funny as it is. Tommy Seebach was in fact Danish which nearly disqualified him for the unintentionally funny category but was ultimately allowed to hang around because of the sheer absurdity of the video

4. Culture Club - Karma Chameleon

The video opens letting you know that this is Mississippi in 1870. It proceeds to show Boy George sitting on a mount of some sort wearing Rag Doll material in his hair surrounded by a host of dancing Mississippians.

3. 50 Cent feat. Justin Timberlake - Ayo Technology

 

Justin Timberlake and 50 Cent are in some futuristic world with spying technology fixed in on different girls. It proceeds to alternate between a night vision and a black room with Timberlake and 50 Cent dancing. They have some future technology that allows the protagonists to be 'with' the girls without being with them. It then pans to Timbaland doing his best Minority Report presentation, shifting screens around and shows blurred out images of naked women. Not sure who thought this was a good idea for a music video but the budget was clearly high, and was clearly wasted.

2. Johnny Cougar Mellencamp - Hurt So Good

It just needs to be watched. Mellencamp at his best

1. DMX - Ruff Ryders' Anthem

 

Dogs chained to tires. Shirtless lifting. The bar is set pretty high when the first shot is a motorcycle wheelie but DMX and the rest of Ruff Ryders are able to keep it going for the entirety of the video.