Navigating The First 90 Days in a Chief of Staff Role

Roger KuoLeave a comment

As a Chief of Staff, I thought I would begin sharing my knowledge in a series of posts on how to be most impactful and best serve the principal (the person to whom the Chief of Staff reports) and the company you work for. (FYI, this is from my experience working in early-stage startups, and not everyone will be best served by this approach as every organization and staff are different.)

This first post will be about how to best approach the first 90 days in the CoS role. This period is important to begin on the right foot, not only with the principal but also with the executive level team (ELT) and the organization as a whole. (Particularly since many who operate alongside a CoS may not know exactly what the role is about.)

These are some of the processes and initiatives you can introduce in your first 90 days as a Chief of Staff. For simplicity’s sake, I’ve broken this down into “the 3 R’s” – Role, Relationships, and Reputation.

Role

1. The first thing to do is articulate your roles and responsibilities and write them down on a single piece of paper. (This should have been laid out in the job description and your interview process).
2. Then work with your principal to rank and prioritize them so you both know the core bullseye of your responsibilities.
3. It should be considered a “living” document and will likely change over time, but at least you both have a basis to point to and work from.

Relationships

1. Make it a point to introduce yourself to the rest of the executive team to form productive relationships with them. While your title may be “Chief of Staff to the _____ (insert principal title here)”, your job is to make the entire executive team more productive and successful.
2. You should also familiarize yourself with the work of the executive team and vice versa (sharing your “one-pager” with them) so they understand your role, your background, and who you are as a person; and you should do the same for them as well, learning about each of them in turn.
3. You should ask them what they think are improvement areas for the company and what is going well, and get their recommendations on who else on their teams you should be talking to and forming relationships with.
4. You should have a 1×1 meeting with your principal’s EA at least once a week to figure out and plan how to best support the principal.
5. Then you should have a 1×1 meeting with your principal at least once a week to get aligned on the projects and key priorities to focus on for that week (I like Monday mornings for at least 30 minutes to make sure we are completely in sync for the week ahead).

Reputation

1. In the first 30 days, all eyes will be on you. So it is crucial to over-communicate and over-deliver.
2. You should generate small, early wins that you and your principal can celebrate. The more you both can point to these, the more others will understand your role and the impact that you can have in the organization.

What is your opinion? Feel free to contribute in the comments below.

Keywords: #chiefofstaff #cos #first90days

Please feel free to share/repost/retweet. Also posted on LinkedIn.

How Blockchain Will Disrupt E-commerce

Roger KuoLeave a comment

As blockchain technology grows in popularity and usage, e-commerce businesses are realizing just how revolutionary the technology is, and how it can solve many of the problems the industry is currently facing.

1. Growth

Decentralized transactions allow merchants to expand their reach across borders and simultaneously grow their businesses to levels that were previously constrained by central authorities. Blockchain technology also allows third-world countries to trade online more easily, as consumers and merchants no longer need a payment intermediary thanks to peer-to-peer technology enabled by the blockchain. This will result in massive growth for existing online stores (and new ones coming in), thanks to their increased reach. 

2. Security 

The pure decentralized nature of the blockchain is also such that it is impossible to alter the data, thus removing the possibility of any fraudulent transactions. Additionally, due to self-executed smart contracts, business partnerships will strengthen and efficiency will increase. Thus, it will create a “trustless” environment where users will not need not know or trust each other to enter into an agreement since any manipulation of the data will be rejected by other members in the network. 


3. Counterfeit Products

E-commerce companies are facing a huge problem of counterfeit and substandard products due to difficulty in regulation and selection of vendors, which leads to increased returns and customer dissatisfaction. Blockchain technology solves this problem by enabling the verification of all information and claims associated with a product, allowing consumers to quickly and easily be able to check the purity, quality, or origin of a product, and thereby building more trust and loyalty.


4. Supply Chain Management

For certain products, ethical sourcing and/or sustainability is the key to its ethos and potentially success in the marketplace. But until now, that was always one of the most difficult things to get insight on. However, blockchain technology allows both customers and organizations the insight and ability to track complex variables related to both sustainability and ethical sourcing. This helps procurement organizations in all industries lower their costs and improve performance while driving greater value for their companies.


5. Payment

Paying vendors is not always as easy or straightforward as it may seem. But now with the blockchain, the entire payment process has been simplified and been made more efficient as the payment intermediary or central authorizing body has been eliminated. As a result, transactions can take place in real-time and also lowers operational costs. 

6. Exchange Rates

With cryptocurrency, we now truly have universal currencies – which allows consumers and businesses to transact all over the globe without needing to worry about exchange rates. 


7. Digital Identity 

Passwords and authentication requests have proven to be limited in their effectiveness in protecting data, and stealing a user’s credit card information has become easier for thieves. Blockchain technology helps to prevent this from happening with a digital identity that is safer and easier for users to manage with digital identities that are based on a uniquely random set of numbers assigned to each user on the blockchain network. 


8. Customer Experience

In addition to all the issues listed above, there are also problems in the customer experience. For instance, customer loyalty programs are seeing low redemption rates and are badly in need of a more modern upgrade; there are too few incentives for customers to join them; and data breaches happen with regularity compromising customers’ data. However, using blockchain technology, users can receive loyalty tokens that are interoperable across many programs, and they never expire or lose value unlike traditional reward points. 

9. Proof of Ownership

Additionally, blockchain technology allows businesses and consumers to prove ownership and save product invoices and warranties. Often times consumers get frustrated when they can’t find their paper receipt to substantiate ownership and therefore, the warranty coverage for their product. (I mean let’s be honest – how many people really save all their product warranties?) But with blockchain technology and NFTs specifically, buyers and sellers will be able to conveniently save receipts and warranty data and authenticate evidence of ownership.


Conclusion

In summary, blockchain technology can and will continue to be used to improve e-commerce and solve the problems that currently face it – including providing added security, fixing the issue of counterfeit products, proof of ownership and digital identity, supply chain management, and improving the customer experience.


What is your opinion? Feel free to contribute in the comments below.


Keywords: #blockchain #blockchaintechnology #emergingtech #emergingtechpredictions #e-commerce #ecommerce #ecommercetechnology #techdisruption #supplychain

Please feel free to share/repost/retweet

Emerging Tech Predictions & Promising Companies To Watch For In 2021

Roger KuoLeave a comment
Getty

2020 was a strange year in many ways. We experienced social unrest, a global pandemic, and a recession…all in one year. Disparate groups, regions, and ideas stretched the country in different directions, sometimes nearly to the breaking point. And in the midst of all this – we also saw record-breaking equity markets, some rich getting richer, and an ever-widening income gap disparity.

You want some examples? Here you go…

Look For These Emerging Technologies and Companies in 2021

Despite all of these negative things, there are some bright spots in the future. We are forging ahead with emerging technologies that improve our lives, many of which have seen record adoption this year due to the pandemic (such as food delivery apps, e-commerce, tools for working from home, and others). Here is a list of the tech trends and corresponding companies that I’m watching in 2021 and beyond:

Digital Health and Telehealth

Considering the damage the pandemic has done, one good thing that has come out of it is the acceleration of digital health and telehealth.

In terms of funding, this year is the largest on record for the sector. For VC investment, the median deal size through Q3 2020 is $39 million—up from $25 million in 2019 and $18.9 million in 2018, signaling “industry maturity,” according to Kaia Colban, an emerging tech analyst at PitchBook.

The pandemic also drove research in diseases and drug discovery, as companies focused on studying and/or developing a vaccine for Covid-19 – particularly in the use of AI for those purposes. Mike Paylor, VP of engineering and product for Upwork, says he’s seen a lot more demand for healthcare apps and, in particular, AI for healthcare. In addition, researchers put many of their existing research and clinical trials on hold to focus their attention on a Covid vaccine. And the record speed with which the Covid vaccines by Pfizer, Moderna, and AstraZeneca were tested, trialed, and brought to market will likely have a lasting impact on the pharmaceutical industry. Remote clinical trials, performing consultations online, and collecting data remotely may also be a permanent part of future pharmaceutical trials long-term.

We’ve also seen a rise in telehealth, allowing patients and caregivers to communicate remotely. There was a 154% increase in telehealth visits during the last week of March 2020, compared with the same period in 2019, according to the CDC.

Abacus Insights, Amwell, Kaia Health, LetsGetChecked, Mindstrong, and Plushcare are all startups that have raised Series A, B, or C rounds during the pandemic and “decentralize medicine away from hospitals and empower patients as consumers”, according to Bond Capital’s Mary Meeker.

And speaking of AI…

Artificial Intelligence, Machine Language, and Robotics

In 2020, artificial intelligence (AI) and machine language (ML) made big strides in technology.

Businesses have access to more data than ever on their customers, competitors, and the market as a whole. AI tools have helped them to do that, and there doesn’t seem to be any looking back.

  • A recent McKinsey survey found that half of organizations worldwide have adopted AI in at least one function. 
  • But another global survey found that less than half of adopters say they’re highly skilled at integrating AI into their existing environments. 

What this means that the demand for skilled AI specialists and more standardized, user-friendly AI tools will only increase in the coming years. And the fast-growing field of ML operations (MLOps) is helping to provide some of those tools. Specialists trained in ML Ops are the ones that help deploy, train, and run those AI models. 

In 2021, expect to see huge demand and rapid growth of AI and industrial automation technology. As manufacturing and supply chains return to full operation, manpower shortages will become a serious issue. Automation, with the help of AI, robotics, and the internet of things, will be a key alternative solution to operate manufacturing. 

Some of the top technology-providing companies enabling industry automation with A.I. and robotics integration include: 

UBTech Robotics (China), CloudMinds (U.S.), Bright Machines (U.S.), Roobo (China), Vicarious (U.S.), Preferred Networks (Japan), Fetch Robotics (U.S.), Covariant (U.S.), Locus Robotics (U.S.), Built Robotics (U.S.), Kindred Systems (Canada), and XYZ Robotics (China). 

Last-Mile Delivery Tech

Due to the pandemic, more people are ordering food deliveries and shopping online. “No contact” delivery is now the “new normal”. This created a huge demand for last-mile delivery tech companies and autonomous delivery capabilities. Startups like Arrival have partnered with UPS, and Rivian which partnered with Amazon to deliver your goods in electric vans. Amazon and Walmart are still locked in a never-ending episode of “Battle of Delivery Drones”. And shipping giants like FedEx are rolling out autonomous same-day delivery bots.

What’s spurred this activity on? Several things really.

Edtech, Online Learning, and Future of Work

Edtech had already been growing pre-Covid, but Covid just accelerated that growth even faster. It also put “online learning” at the forefront of many educators. During the pandemic, 190 countries enforced nationwide school closures at some point, affecting 1.6 billion students (91% of all students worldwide). 

17zuoye, Yuanfudao, iTutorGroup, and Hujiang in China, Udacity, Coursera, Age of Learning, and Outschool in the U.S., and Byju’s in India are some of the online learning platforms that have benefitted from the pandemic and will continue to experience tremendous growth even after we go back to a “normal life”.

And of course, most of us are familiar with Future of Work apps like Zoom, Slack, Airtable, Calendly, and others. But there are others that may be less well-known but equally as promising: Deel (payroll from remote teams), Guru (a better knowledge database), Notion (an “OS” for startups), and Zapier (a way to synchronize information across apps).

Many of these new behaviors driven by pandemic will outlast the virus and continue to accelerate in 2021 and beyond. This will help drive future technological innovation in these areas and help the adoption of what may become our new “normal”.

#emergingtechnology #emergingtech #emergingtechpredictions #Covid-19 #digitalhealth #telehealth #artificialintelligence #AI #robotics #deliverytech #lastmiletech #edtech #onlinelearning #futureofwork

What is your opinion? Feel free to contribute in the comments below.

Please feel free to share/repost/retweet

Is China the next post-cold war threat?

Roger KuoLeave a comment

Conflict between USA and China - male fists

I just read this article in Morning Brew’s “Emerging Tech” newsletter,  Facebook Execs Contrast U.S. and Chinese Tech Projects

Then, I read the link in that article to Peter Thiel’s op-ed in the New York Times, Good for Google, Bad for America

Both articles point to the growing concern over China’s overwhelming desire to dominate everything tech-related: 5G, artificial intelligence, autonomous vehicles, etc. And I have to say, I’m in that camp.

As Mark Zuckerberg so plainly stated in the Emerging Tech article, China has created its own internet fiefdom completely separate from the West. And this exclusive domain is closed to outsiders (including Facebook, Google, and the like). Also known as “The Great Firewall”, China is controlling its citizens and censoring free speech by banning outside apps/platforms.

Of course, most of you know this already. But what you may not know is how deep the rabbit hole goes…

China is competing with the West in everything – and winning in many areas. They are taking the lead in blockchain and cryptocurrency, NLP, edge and quantum computing, virtual reality, and many others. But one area that is of particular concern is artificial intelligence (AI). As Peter Thiel notes in the NYT article, “artificial intelligence is a military technology. Why is Google sharing it with a rival?”

He goes on to describe how the moment that Deep Mind (the crown jewel of Google’s AI effort) defeated the world champion of the ancient game Go, China stood up and took notice. Go is an ancient strategy game that was invented in China and still popular to this day. The objective is to surround more territory than your opponent. Does this seem familiar? It sounds like military warfare to me. And that is exactly what China regards this tech race as…warfare.

Peter Thiel also mentions that “the first users of the machine learning tools being created today will be generals rather than board game strategists”. With the ability to enhance computer vision and data analysis multiple-fold, military commanders will be able to gain advantages in intelligence, reconnaissance, deploying troops, or many other potential applications.

This isn’t even mentioning cyber warfare, which is so common now that countries have allocated huge resources to entire departments set up for this purpose. North Korea has a secret cyber warfare department with an ominous name, “Bureau 121” which is run directly by the military and supposedly has approx 1800 hackers, who are picked from the cream of the crop in North Korean universities. Even the US has allocated $15 billion for cyberwarfare – It’s even clearly stated in the White House 2019 Budget, “The FY 2019 President’s Budget includes $15 billion of budget authority for cybersecurity-related activities”. And don’t be fooled by the phrase “cybersecurity-related activities” – it’s cyber warfare, plain and simple.

But back to China – since 2017, the Communist party has written into their constitution the policy of “civil-military fusion”, which mandates that all research that is done in China be shared with the military.

If this isn’t a clear warning sign about the dangers of sharing technology with China, I don’t know what is.

Of course, the reason why companies continue to do so is purely for profit’s sake. Tech companies and their investors don’t want to upset the status quo, in which they’ve been making huge profits. Essentially, they are choosing profit over national security.

#artificialintelligence #AI #China #US #nationalsecurity #cyberwarfare #geopolitics #technology

What is your opinion? Feel free to contribute in the comments below.

Please feel free to share/repost/retweet

Is Uber Eats the new savior? (Part 3)

Roger KuoLeave a comment

ubereats-alternatives-1587x500Let’s dive a little deeper

Due to the Coronavirus pandemic and corresponding stay-at-home orders, it should be obvious to anyone that ridesharing has pretty much halted the past few months. Going forward, unless Uber incorporates a physical barrier/screen between the driver and passenger (in the backseat), the minimum recommended distancing of 6 feet apart isn’t going to be met in a rideshare situation. And forget about Uber Pools for the time being. It will likely be a while before most people are comfortable sitting in a vehicle in close proximity to 3 other people. (I would venture that the ridership numbers for Uber Pools will suffer worse than Uber X rides during the Covid period.) Basically, the pandemic has effectively cratered Uber’s rideshare business for the foreseeable future.

The ride-share segment was down 80% and reported a $2.9 billion loss in Q1 2020, it’s largest loss in three quarters.

Uber net income

Other Issues

During the pandemic, Uber laid off 3700 full-time employees (14% of its workforce) and another 400 employees from its bike and scooter division, Jump, as part of an investment deal offloading that business to Lime.

And Uber is also dealing with a new lawsuit in California that claims Uber wrongfully classified drivers as contractors rather than employees to avoid paying for overtime, reimbursement for business-related expenses, access to unemployment and disability insurance, paid sick leave, and other benefits.

Given the massive losses that Uber has sustained since its inception from its ride-sharing segment and the promising growth of the food-delivery segment as discussed in part 1 of this post, pushing its food delivery business might seem like the logical way forward to eventual profitability. After all, Uber Eats reported adjusted net revenue of $1.4 billion in 2019, an increase of 82% over the previous year.

However, those numbers don’t accurately reflect the real impact of the business’s growth on Uber, and when you take a deeper look into the food delivery business, you see that the economics make it difficult to see a long term path to profitability.

During the same period that Uber reported the adjusted net revenue of $1.4 billion, it also reported EBITDA of -$461 million​. Much of this loss came from “increased investments in key markets that delivered category position improvement.” You’re probably asking, what does that mean exactly? It means that Uber spent 45% of its revenues ($1.13 billion) on “excess driver incentives”. Again, you’re probably wondering, well what does that mean?

“Excess driver incentives” is the term Uber uses to describe two things, either paid new driver referrals (usually from an existing driver) or financial losses on rides and deliveries. Also mentioned in part 1 of this post, Uber has been very aggressive in grabbing market share in some areas, much to the detriment of its bottom line. In order to get drivers on board and lower prices as much as possible, Uber essentially loses money on every ride. And since it pays the driver more than it collects in revenue, it chalks it up to a cost of doing business to gaining dominant market share. While this has worked well to some degree so far, it is unsustainable in the long run.

This is why Uber purposely breaks out what it pays drivers in excess incentives so that it can easily show investors what the impact on profit would be if it eliminated these incentives. And if it’s not clear by now, the plan is to certainly eliminate this expense as much as possible in order to become profitable.

So about that “Uber Eats savior thing” again…

Even as Uber Eats seems to be a path forward for Uber to gain profitability, it is a road littered with obstacles and fraught with dangers. Food delivery companies basically earn money from delivery fees and revenue share with restaurants. And to sign up some bigger restaurant chains, the food delivery companies have had to lower their commissions. On top of that, several cities have now started capping the fees they can charge restaurants. Seattle, San Francisco, Washington D.C., and Jersey City have all instituted some sort of cap on delivery fees with other cities expected to follow suit. Other cities such as Chicago have forced the companies to reveal what exactly constitutes the total delivery fee by itemizing everything including the actual delivery costs, taxes, food costs, and the commissions and service fees restaurants pay.

All of these factors contribute to a murky outlook for Uber’s future. While it still continues growing, its profitability will continue to be a big question mark.

But, there are solutions

Recent polling data suggests that somewhere between 13 and 20 percent of folks in the U.S. say that they’ll start venturing back out once their regional shutdowns are lifted, and about half, CBS News reports, say they won’t resume normal social activity until it’s clear the outbreak is over. If those numbers are accurate, Uber’s Rides’ business is likely down for the long haul, Eats will continue to shine, and Uber will be best served by going where the money is: food delivery.

Consolidation is the way forward in the food-delivery business, and Uber understands that very clearly. As part of the quote mentioned in part 2 of this post, Uber stated “like ridesharing, the food delivery industry will need consolidation in order to reach its full potential for consumers and restaurants”. I’m just wondering if they just lost their best potential partner (Grubhub) and may now have to settle for the leftovers (Postmates). Despite that, look for a merger with Postmates in the coming months.

In my opinion, Uber Eats might just be the new savior…and possibly the only one for Uber.

#uber #ubereats #coronavirus #covid19 #ridesharing #businessstrategy #justeattakeaway #mergersandacquisitions #doordash #grubhub #postmates

What is your opinion? Feel free to contribute in the comments below.

Please feel free to share/repost/retweet

Is Uber Eats the new savior? (Part 2)

Roger Kuo1 Comment

Uber eats-Grubhub-Doordash imageIn my last post, I discussed how Uber Eats and its potential acquisition of Grubhub might just be Uber’s savior. Well, this is just off the presses…Uber has failed in its takeover attempt of Grubhub. Just this morning, Just Eat Takeaway, a Dutch company, has agreed to acquire Grubhub for $7.3 billion.

The deal values Grubhub at $75.15 per share, a 27% premium to Grubhub’s closing price of $59.05. Apparently, this was one of the major roadblocks to Uber’s attempted acquisition of Grubhub. Uber was unwilling to pay the high price, and ultimately the two sides could not make a deal. Uber’s offer was closer to $70 per share, which would have valued Grubhub at about $5.9 billion.

The other major issue concerned regulatory risk, as I mentioned in part 1 of this post. Since Uber and Grubhub combined would have accounted for approx 50% of the US market, there were strong reservations about if the merger would get approval from antitrust regulators.

In a statement, an Uber spokesman said the company would continue looking for deals in the food delivery business, but would not engage in “any deal, at any price, with any player.” This begs the question, “what is the right deal, the right price, and the right player”? At the time of this writing, Doordash has 45% of the US market, followed by Uber Eats with approx 30%, Grubhub with approx 20%, and Postmates with approx 8%. Since Grubhub is no longer an option and a merger with Doordash seems improbable, the only remaining likely option is Postmates – probably not the ideal partner that Uber was looking for. Now instead of owning 50% of the market and being in a pole position, Uber would at best be looking at an equal footing with Doordash (see graph below).

Another equally troubling thing is that Doordash is backed by the “Bank of Softbank” which has poured huge amounts of capital that helped Doordash achieve its current market share. (Ironically, Softbank is also an investor in Uber; and investing in two competing food delivery companies is questionable strategy)

As we can see from the graph below, Uber Eats has not significantly increased its market share over the past two years, while Doordash has. And that increase coincided with Softbank’s investment in the company in 2018. As the graph also shows, Postmates’ market share decreased during the pandemic, which is troubling. At a time when food delivery businesses are doing a booming business, Postmates has lost market share. Granted, Grubhub also lost market share during this period (which may have contributed to their desire for a merger). And as you can also see from the graph, both of their losses equal Doordash’s gain.

market share of food delivery companies

In Uber’s Defense

In Uber’s defense, Just Eat Takeaway did pay a high price for the opportunity to expand to the US market. Normally, a 27% premium to the existing share price doesn’t seem too outrageous (most premiums fall within the 20-30% range). However, considering Grubhub’s declining market share (during the pandemic nonetheless), 27% does seem a bit high. Equally, if not more troubling would be the difficulty of getting the deal past the anti-trust regulators. So I can understand Uber’s not giving in and trying to negotiate a better deal.

However, Uber has been working on this year for one year, and it has to sting a little that they couldn’t get it done. For their sake, let’s hope it doesn’t turn out to be an even bigger failure and possibly even their demise in the long run.

#uber #ubereats #coronavirus #covid19 #ridesharing #businessstrategy #justeattakeaway #mergersandacquisitions #doordash #grubhub #postmates

What is your opinion? Feel free to contribute in the comments below.

Please feel free to share/repost/retweet

Is Uber Eats the new savior? (Part 1)

Roger Kuo1 Comment

Uber Eats bicyclist

Remember when Uber was hailed as “the next Facebook”? Everybody was talking about it and how rich they were going to get from it. The TV pundits and stock market experts hyped it beyond belief, and everybody believed it.

Well, things didn’t exactly turn out that way, did they? Sure, everyone uses Uber and the company has disrupted the taxi industry and changed transportation as we know it. But honestly, Uber is a terrible business model and even worse investment.

Ever since the company went public in 2019, the share price has rarely gone above the IPO price and to say the stock has been “underperforming” is an understatement. And its business model in its current form is simply unsustainable. Due to its obsession with grabbing market share over profits, Uber is still highly unprofitable after 10 years.

Worse than that, its losses are growing at astronomical rates. In Q2 2019, Uber suffered a record $5.2 billion quarterly loss. And while $4.2 billion of that was related to expenses from its 2019 IPO, the remaining $1 billion in losses is still a 14% increase from the $878 million it lost in Q2 2018. And, while its revenues are increasing, they are not even close to catching up to its expenses. In fact, Uber loses 25 cents on every dollar it brings in and an average of $1.20 on every ride.

Even before coronavirus, Uber experienced its lowest-ever quarterly revenue growth in Q2 2019


Uber Eats to the Rescue

But, while it all may look like “doom and gloom” for Uber, there is a savior coming. In fact, it’s been here for awhile already – and it’s called Uber Eats.

Uber has had many “saviors” before:

First, it was Dara Khosrowshahi, who took over in 2017 after the scandal-ridden previous leadership left the company

Then, it was Softbank, leveraging their huge resources to pump $125 billion of new capital into the company later the same year

While Uber’s ride-hailing business is stuck in neutral, Uber Eats is in overdrive. Although Uber’s ride-sharing segment was hemorrhaging money in 2018 and 2019, Uber Eats saw a big jump during the same period. Actually, Uber Eats was the one lone bright spot in the company profile, growing 53% YoY and accounted for $337 million in adjusted net revenue, a record high for the segment.

Uber Eats accounted for almost 12% of Uber’s total adjusted net revenue in Q2 2019, up from just over 8% in Q2 2018

Uber Eats share of total revenue

And though still a small part of Uber’s total revenue, Uber Eats has the potential to enter more markets that its ride-hailing counterpart. Uber currently offers ride hailing in more markets than Uber Eats (71 for the former vs 47 for the latter). But Uber Eats is likely to outgrow its ride-hailing counterpart, as the food delivery segment represents a stronger long-term revenue opportunity for the company. 

Some countries and localities have strict regulations surrounding their taxi market, which prevents or limits competition from ride-hailing services. However, these regulations don’t lock out food delivery services like Uber Eats, enabling the company to generate revenue in markets where their core platform is restricted – a tactic the company is pursuing in Japan.

The Bigger Picture

Uber Eats is poised to become a bigger part of Uber’s business than its ride-hailing segment, but it will need to continue leveraging the popularity of its mobility service.

Uber’s ride-hailing app has a growing user base, and direct integration will give its Uber Eats business more exposure. In June 2019, Uber began to embed Uber Eats directly into its core app in select markets. Embedding Uber Eats in the app instead of requiring a separate app raises its profile significantly, as it places it in front of more of the company’s growing base of monthly active platform consumers (MPACs) — in Q2 2019, the number of MPACs grew to 99 million, up 30% YoY, and the company stated it surpassed 100 million in July 2019. 

While Uber Eats faces stiff competition in the food delivery market, the wide proliferation of its core ride-hailing app could help it increase its share of sales. With Uber’s trip requests in Apr 2020 down about 80% from the previous year, it might take awhile for Uber recover on the ride hailing side. Meanwhile, the surge in food-delivery orders at Uber Eats recorded in Q1 2020 showed no signs of slowing in May, easing concerns of investors who thought it could be a one-off trend during the pandemic. And Uber Eats revenue grew 230.1 percent over the past year, with the average person spending $220.37 per year on the service. The only other company of the five major online food-delivery apps — Doordash, GrubHub, Postmates, Seamless, and Uber Eats — to see growth double year-over-year was Doordash, which grew by 106.4 percent. Postmates, with 41 percent growth, rounds out the top three.

Q2 2016 – Q1 2018 Revenue and User Growth Among Food Delivery Competitors

Beyond leveraging the app, Uber could also strengthen its product via an acquisition.Last week, CEO Dara Khosrowshahi revealed the company had considered buying rival food delivery service Caviar — which was ultimately acquired by DoorDash — signaling the company was exploring ways to quickly grow its business.

While Khosrowshahi said Uber is unlikely to make an acquisition, we think it could become a necessity for the company, especially as the market further consolidates around it and rivals quickly gain market share.

https://www.businessinsider.com/uber-earnings-show-eats-could-be-core-business-2019-8

Fast Forward to Present Day

Although the deal with Caviar never came to fruition last year, Uber is currently negotiating an acquisition of one of its main competitors, Grubhub. Although margins are currently low in the food-delivery business, combining these two companies would cut costs and increase profitability. It would also make it the largest US food delivery service with 55% of the market, surpassing current leader Doordash. However, this proposed merger would definitely draw the intense scrutiny of anti-trust regulators.

And since news broke of Uber’s interest in Grubhub, other food-delivery companies have also been sniffing around Grubhub for a possible acquisition. Ironically, two of the publicly revealed companies (Delivery Hero and Just Eat Takeaway) are both from Europe, which may have a greater chance of consummating a deal with Grubhub due to the reduced regulatory risk. But it also drives up the bidding for Grubhub, increasing the price Uber would have to pay if it is successful. But, it seems that might be the price that Uber must pay in order to survive.

#uber #ubereats #coronavirus #covid19 #ridesharing #businessstrategy

What is your opinion? Feel free to contribute in the comments below.

Please feel free to share/repost/retweet

I’m proud to be accepted to GoingVC’s Cohort 6

Roger KuoLeave a comment

Proud to be part of GoingVC’s Cohort 6, and grateful for the opportunity to make a positive impact in venture capital.

*One of the most amazing things about this group of people is the diverse backgrounds we all come from. I look forward to learning and sharing knowledge with all of them.

View at Medium.com

#venturecapital #goingvc #cohort #venture #vc #venturecapitalists

Why Are Targeted Ads So Effective? It’s Probably Not What You Think

Roger KuoLeave a comment

behavioral targeting

Based on an article in the Harvard Business Review, studies show that targeted ads are effective not only because they are targeted, but because they also influence the target’s perception of themselves. What this means is that if the ad has been corrected targeted, the viewer is subconsciously influenced to perceive themselves as belonging to that target market segment, even if they are not fully inclusive of that segment. Studies show that they accept the fact that they have been targeted for this particular type of product as validation that they belong to the subgroup; and that this validation subsequently increased interest in the product.

Rather than target demographically, advertisers have learned that targeting behaviorally can often be more effective. However, what most advertisers don’t know is why it is more effective. They may just see that it is better at generating clicks and conversions or has higher ROI than non-behaviorally targeted ads.

We exposed students to an ad that they believed to be either behaviorally targeted or non-targeted for a high-end watch brand. Then we asked them to rate how sophisticated they perceived themselves to be. The data show that participants evaluated themselves as more sophisticated after receiving an ad that they thought was individually targeted to them, compared to when they thought the same ad was not targeted. In other words, participants saw the targeted ad as reflective of their own characteristics. The ad told them that, based on their browsing history, they had sophisticated tastes. They accepted this information, saw themselves as more sophisticated consumers, and this shift in how they saw themselves increased their interest in the sophisticated product.

Behaviorally targeted ads can also impact behaviors beyond just purchasing products. Another study was conducted in which students rated themselves as “more green” after receiving a behaviorally targeted ad for an environmentally friendly product. This resulted not only in purchases of the product, but a measured increase in the student’s willingness to donate to a pro-environmental charity, which they were prompted about at the end of the same lab session.

However, the most important part of this is that the behaviorally targeted ad must be at least somewhat plausible or accurate – meaning that the targeted individual must at least share some of the characteristics of the target segment. If the targeted individual shares none of the characteristics of the target segment, then the likelihood of a conversion is low.

*It’s important to note that the effects on self-perceptions we observed are contingent on consumers being aware that a given ad was or was not tied to their past behavior. Across all of our studies we provided participants with an explanation of behavioral targeting, so that those in the behaviorally targeted ad condition believed that they received the ad as a result of their own online behavior.

Given that the ads in our studies were not actually matched to participants’ behavior — we merely created the perception that they were — we expect that effects may be even stronger in the real world when behaviorally targeted ads are more accurate. If consumers are not aware that an ad has been behaviorally targeted, though, even if it is actually matched to their online actions, they likely won’t perceive the ad as a reflection of the self.

Finally, and perhaps most importantly, our results suggest that transparency benefits consumers and firms. These effects of behaviorally targeted ads only occur when consumers know that an ad has been behaviorally targeted, so it behooves advertisers to include the AdChoices icon to clearly label behaviorally targeted ads as such. Additionally, identifying ads as behaviorally targeted gives consumers greater control over the use of their data and may help alleviate many of the privacy concerns cited by the FTC in relation to disclosure of the use of consumer data in delivering online ads.

This brings me to the point of this blog post. There is an additional method of online advertising that often incorporates behaviorally targeted ads – and that is “retargeting” (retargeting ads follow potential customers around the internet and show them targeted ads based on their previous browsing history). With retargeting ads becoming more popular with advertisers, any somewhat perceptive viewer will have noticed the same ads following them around the internet as they browse from website to website. The way retargeting works is when a visitor lands on a webpage, a javascript tag hidden in the webpage code places anonymous retargeting cookies in the visitor’s browser. This code allows advertisers who typically contract with a third-party retargeting company (such as Adroll, ReTargeter, and Criteo) to display retargeted ads to visitors as they browse other websites. The large social media platforms and browsers, such as Facebook, Google, Twitter, and Instagram even have their own retargeting services. This repeated exposure has proven to be effective not only in increasing conversions but promoting brands as well. And, when used in combination with behaviorally targeted ads, retargeting makes those ads even more effective. This combination can be a powerful 1-2 punch in the advertiser’s arsenal. For most websites, only 2% of web traffic converts on the first visit. Retargeting can multiply that conversion rate significantly, which allows advertisers to optimize their ad spend, and simultaneously increase their marketing ROI.

What is your opinion? Feel free to contribute in the comments below.

source: Harvard Business Review article

Please feel free to share/repost/retweet

Instagram vs Pinterest – Which is Better For Advertisers?

Roger KuoLeave a comment

instagram vs pinterestUnless you’ve been living under a rock the past few years, you’ve probably heard of Instagram and Pinterest. Instagram is the popular image and video sharing website used by people and companies ranging from Kim Kardashian, Kylie Jenner, and Cristiano Ronaldo to Nike, NASA, and the NBA. Pinterest is another popular image sharing (and on a smaller scale, GIFs and videos) website that users typically curate into collections around a common theme. Its three most popular users are lesser known celebrities; Joy Cho, Maryann Rizzo, and Bekka Palmer.

As of this blog post, Instagram has approximately 1 billion monthly active users (MAU) and 500 million daily active users (DAU). It’s popularity places it well ahead of other well-known social media channels, Twitter (326 million active users), Snapchat (150 million active users), and Pinterest (250 million active users). And, Instagram, which is owned by Facebook, currently accounts for approximately 25% of revenues of its parent company (next year it is projected to account for 30%).

Pinterest’s 250 million active users is approx 1/4 of Instagram’s. However, if your specific market is women aged 25-54, then Pinterest may be a gold mine for you. 83% of women in that age bracket in the US are on Pinterest. And, since women are often the controllers of household finances (women control 80% of household spending in the US), Pinterest has a special importance for advertisers of household products. But, that doesn’t mean men are left out either. 50% of new signups in 2018 were men. If your product has a strong international appeal, 80% of new Pinterest signups are from outside the US. High-income and educated US households are also well represented on Pinterest, and twice as likely to use the platform as low-income and less educated US households (39% of people in households worth $75k or more per year use Pinterest).

For business looking to advertise on Pinterest, the statistics reveal a powerful tool to capture sales and market share:

  • Pinterest users are twice as likely to report that they feel their time on the website was well spent (compared to other social media platforms).
  • 67% look at saved content while in stores
  • 55% use Instagram to shop
  • 98% of Pinterest users go out and try the ideas they find on the platform (compared to the average of 71% on other social media platforms)
  • 90% of weekly users use Pinterest to make purchasing decisions
  • 55% of Pinterest users are looking specifically for products
  • 85% of female users use Pinterest to plan for “life moments”

In general, Instagram tends to be more personal, with the poster sharing images and video that show the real side of your product/service and company and allow personal interaction with potential customers. Instagram users tend to add images that foster feelings of FOMO (otherwise known as the “fear of missing out”); which often includes the amazing food they are eating, the fabulous parties they attending, and the exotic destinations they are traveling to.

Conversely, Pinterest users often add images of future aspirations; including the clothes they want to buy, the makeup they want to test, and the kitchen remodeling projects they want to do. Pinterest users seem to be always searching for that perfect _____ (fill in the blank). Whether it’s a perfect duvet cover, kitchen accessory, wedding dress, or cufflinks, people flock to Pinterest to find it. As such, Pinterest seems to fulfill one of the basic emotional needs we all have…shopping.

Simply put, Instagram is generally more about “who you are, or what you’re doing (right now)”, whereas Pinterest is generally more about “who you want to be, or what your plans are (in the future)”.

What this means for advertisers is that Pinterest may be the better choice for marketing products or services that don’t have a built-in FOMO feature. If your product or service is something that customers have to save for, plan for, or is long-term oriented, Pinterest is probably the marketing platform for you. However, if your product or service is more short-term, perishable (in terms of longevity, not spoilage), or an impulse or emotional purchase, then Instagram may be the better platform for you.

In terms of branding, Instagram is a great tool for that purpose. It’s “in the moment” snapshots of time can be a powerful technique to reach out and connect with new audiences, or reshape a brand’s image. Instagram followers tend to seek more personal interaction and engagement with the brands they follow. If used correctly, Instagram can be very effective in promoting goods and products to potential customers. Therefore, brands must be careful to be authentic in their representation. Doing this will engender trust with users, who can also be potential advocates of the brand as influencers. In fact, some brands also choose to pay popular Instagram influencers to show their products and services in a way that feels more genuine than traditional advertising. And, some influencers get handsomely paid for doing so. In Kylie Jenner’s case, she reportedly receives $1 million per paid Instagram post. This has helped Jenner become the youngest self-made billionaire in history, coincidentally unseating the founder of Facebook, Mark Zuckerberg, for the honor. And, the paid influencer market is not going away any time soon. The total “paid influencer” market reached $1 billion in 2018, and is expected to double in 2019. 

Pinterest, on the other hand, seems to be the opposite of Instagram: it comes across as more natural, genuine, humble. Words that have often been used to describe Pinterest include “inspiring” and “uplifting”. This genuineness helps to create an authenticity that allows Pinterest to connect on a deeper level than most social media platforms out there. And, like Instagram, Pinterest is also a great place to get brand exposure. 97% of Pinterest searches are unbranded, and 51% of women have been exposed to new brands on Pinterest. In addition, 78% of users say content from brands on Pinterest is useful.

Whichever platform you choose depends on your advertising goals, target market, and type of product/service. Ultimately, the final decision of which one to choose should always be which generates the most traffic that produces sales, and in the end, ROI.

(all statistics from Hubspot and Pinterest)

Please feel free to share/repost/retweet