beyond the tip of the iceberg

Typically only one-tenth of the volume of an iceberg is above water. The shape of the underwater portion can be difficult to judge by looking at the portion above the surface. This has led to the expression "tip of the iceberg", for a problem or difficulty that is only a small manifestation of a larger problem.

One of my colleagues at Redpoint, Mahesh Vellanki, recently posted a great article on key elements of good consumer marketplaces. In addition to these things, I think great marketplace companies build great products that solve the problems below the surface.

The consumers of on-demand startups usually use only the consumer-facing app. Unless they are part of the supply chain or work at the company, people aren't aware of the products that serve the supply side or the ones that employees use to manage the company. However, these products are equally, if not more important, because they connect all the actors in the marketplace and drive all the vectors of the company. 

Building great supply side and marketplace products face a number of challenges, including:

  • lack of good product and design patterns
    • Unlike consumer apps, these products aren't easily downloadable. You might need paid accounts to sign up, and people generally aren't posting screenshots of these products on the internet. Also, if these are internal products for employees, they contain sensitive information and would need to be thoroughly scrubbed before someone could even consider posting them. Fundamentally though, these products are a competitive advantage for the business so sharing them broadly isn't what companies are likely to encourage. 
  • lack of user knowledge
    • A key part of being a good PM is walking a mile in the user's shoes. It's hard to be a true test user of these products and their flows without immersing yourself in the role for some period of time. Given the demands and constraints of a PM's time, making the time to do this, critical as it is, often gets pushed to the wayside. As a result, the people developing these products don't always have the strongest understanding of how these products can be most effectively used.
  • catering to all levels of expertise
    • These products have users who are just starting out and must quickly get up to speed (first day on the supply side, first day as a new employee) as well as extremely experienced users who have been on the system for years. Intelligent products will understand the level of experience of the user and adapt themselves appropriately, using wizard interfaces and quick templates or advanced controls depending on the person. In creating these products, the PMs and designers need to have a deep understanding of what tasks need to be accomplished and how much guidance needs to be provided by the product to finish those tasks quickly and accurately.

Despite these challenges, great marketplace companies have built great products behind the scenes. So, when looking at marketplace companies that aim to scale big, it's critical to look at the products beyond the tip of the iceberg. Because even the sexiest consumer mobile app in the world can't make up for a disorganized supply chain and chaotic operations. 

mobile commerce musings

Most (if not all) on-demand companies would never have existed were it not for smartphones. Mobile phones allow us to satisfy the need for instant gratification and on-demand applications because they're always with us. Sometimes, it's for the better (check in for your Southwest flight exactly 24 hours before) and sometimes it's for the worse (checking work email when out at dinner with your partner).

Of course, a big part of the power of mobile is being able to pay with your phone, not necessarily directly with Apple Pay but even just to be able to store mobile card credentials and then easily access/add/change them in apps. That's what makes the Uber experience feel so frictionless - get in, ride and get out. However, again with the notable exception of Apple Pay on the iPhone and Apple Watch, I'm not aware of how people are using some of the unique features of a smartphone to enable commerce. These include:

  • ubiquity
    • it's always on you (except of course when the battery is dead)
    • it's always on others (battery exception as above)
    • US smartphone penetration was 76.6% in early 2015 according to Comscore
  • camera
  • contacts
  • location

You could argue that some of these features can also be accessed on the web, which is true, but in no way are all these features as accessible and accurate as they are on mobile. Also, you're hardly going to whip out your laptop at an in-person retail experience. Given that, here's a first pass at some products that I think could make for interesting mobile commerce ideas:

  1. pay with friends
    • You pay the full cost of an item and then add friends who are supposed to chip in for the item from your contact list. The cost gets automatically split and you get refunded back to your bank account directly through ACH. I could even see this turning into a reverse credit card lottery game for credit card reward optimizers. Among a group of friends, everyone's vying to get their credit card to be the one that "wins" because they'll earn all the rewards, whether cash back, travel miles, etc. It can be an ongoing game that tracks stats among friend groups and amplifies engagement through other features. 
  2. pay by picture
    • Snap a picture of a receipt with your camera, which then OCRs the info and allows you to tip and confirm payment. This would be nice at busy restaurants or bars because you wouldn't have to wait for a server or bartender who's slammed with requests from other customers, especially if you're in a rush. There are some problems here in that it's now on an honor system. That might be solved by also having you manage the order through an app (a la Coaster or Open Table pay), guaranteeing that the venue has your card info and authorization for some specified period of time. If you walk away without paying, the card can still automatically be charged. This is a tricky thing to get right from a UI and experience perspective though.
  3. pay at a location
    • At major venues like stadiums or arenas, people tend to get spendy because of food, beverage and merchandise. They also often buy these tickets online. Detecting your availability at a specific location for an event could automatically launch a catalogue specifically for you and for that event and allow you to buy those items from the comfort of your seat. At an appropriate moment for a break/whenever you get a ready notification, you go to a separate area where you can just scan your phone and unlock a locker with all of your purchases inside. No waiting in lines, no receipts and it gets automatically charged to your card. This one clearly requires the most operational work but if it leads to greater and more frequent spend, it might still be worth it. It could also be considered a premium feature that's only unlockable by people with elite credit cards such as an AmEx Platinum.

If any of you are aware of companies that are doing similar things or have other interesting plays in this mobile commerce world, I'd love to hear about them so please send my way.

coming back to what you love

I recently got back from an amazing summer vacation in Europe. While there, I indulged in visiting many art museums including the Uffizi Gallery, which has long been on my bucket list of places to go. Also on that list was the Van Gogh Museum in Amsterdam, which inspired me to write this post.

When I was younger, Van Gogh was my favourite artist. Being young and callow, I thought Van Gogh was the epitome of fine art and that having the IKEA-framed posters of his art in my room was oh-so-sophisticated decor. As I actually learned more about art and studied history, my perspective changed to "Van Gogh is so pedestrian" and I was embarrassed to admit otherwise. And now, it feels like I've come full circle. Being at the Van Gogh museum knowing about his life and the story behind his art led me to appreciate the vividness and beauty of his art anew. It wasn't just about his tragic story anymore, but about his passion for art, his method of learning how to paint and the personal growth in his craft. Perhaps there's also a level of maturity (hooray for growing older!) in that my enjoyment of the art doesn't come from some external desire to display knowledge or gain acceptance; it's just that I like it and I know why I like it.

Today, as I work with startups and listen in on pitch meetings, the companies and entrepreneurs that stand out for me the most are the ones that have absorbed this particular feeling. Just because something is popular, it doesn't mean that it's pedestrian. And just because something is unusual, it doesn't mean that it's great. For me, what it really comes down to is whether the founder is somebody who has a deep appreciation of the space in which she or he works, consciously and methodically improves in the craft and demonstrates that growth in the product.

I know it's everywhere but it's still my favourite. :) 

I know it's everywhere but it's still my favourite. :)