business, law, and innovation class exercise: creative destruction lecture 2 spring 2014 professor...
TRANSCRIPT
Business, Law, and Innovation
Class Exercise:
Creative Destruction
Lecture 2Spring 2014
Professor Adam Dell
The University of Texas School of Law
3
Types of Creative Destruction
3
There are numerous types of innovation-generating creative destruction in an industry:
New markets or products
New equipment
New sources of labor and raw materials
New methods of organization or management
New methods of inventory management
New methods of transportation
New methods of communication
New methods of advertising and marketing
New financial instruments
4
That are getting destroyed / re-invented
Personal transportation
Delivery Services
Point of Sale
Food Systems
4
Let’s look at some industries
Personal Transportation
Uber
How many of you are customers?
Prefer the experience to typical car service?
Would recommend it to a friend?
Found it price competitive?
Uber – Value Proposition
Value Proposition:
To the consumer?
To the driver?
To the dispatch companies?
Uber - Economics
Black car is a $11b market in the US. Uber is already in India.
Uber takes 20% of the total.Pays drivers immediately.Less expensive than a traditional car service.Spends $0.00 on marketing. Doesn’t have one of these:
Uber: Regulation
Willie Brown, former mayor of SF, got a condo at the St. Regis from the taxi commission…
And Uber:
Regulations Prompt New Fight Between D.C. Taxicab Commission ...wamu.org/.../new_regulations_prompt_new_fight_between_dc_taxicab_...Aug 21, 2013 - But the D.C. Taxicab Commission has passed regulations ... Linton insists the commission is not picking another fight with Uber, which fought ...D.C. Has Already Outlawed Uber's New Taxi Service - WNYCwww.wnyc.org/story/313837-dc-outlaws-ubers-new-taxi-service/Aug 21, 2013 - Linton insists the commission is not picking another fight with Uber, which ... "The D.C. Taxicab Commission does not fight with the people it ...Stakes in Uber vs. taxi fight are higher than most people realize ...www.dallasnews.com › Opinion › Sunday PointsAug 30, 2013 - In Washington, D.C., the Taxicab Commission is trying to stop Uber from offering cheap rides in small cars. In New York City, it took a massive ...Taxi Commission Passes New Regulations To Block UberX, Uber ...dcist.com/2013/08/dctc_passes_new_regulations_to_bloc.phpAug 20, 2013 - Yesterday, the D.C. Taxicab Commission passed new regulations that will ... it work: "Consumers want Uber in D.C. We're going to fight for that.FTC sides with Uber in DC taxi fight | TheHillthehill.com/blogs/hillicon.../305161-ftc-sides-with-uber-in-dc-taxi-fight
Uber – Expanded and Expanding to
Taxis, Rental Cars, Delivery, Helicopters, Planes.
What’s next?
If you were the head of product?
Point of Sale
Square / Shop Keep / Bread Crumb
How many of you are customers?
Prefer the experience to typical point of sale system?
Would recommend it to a friend?
Found it price competitive?
Square – Value Proposition
Value Proposition:
To the consumer?
To the merchant?
To the credit card companies?
Delivery Services
Task Rabbit
How many of you are customers?
Prefer the experience to typical messenger service?
Would recommend it to a friend?
Found it price competitive?
Task Rabbit – Value Proposition
Value Proposition:
To the consumer?
To the rabbit?
To the messenger companies?
Task Rabbit- Economics
Delivery Industry is a $15b market in the US. Task Rabbit takes 15% - 20% of the total. Pays rabbits immediately.Less expensive than a traditional messenger service.Spends $0.00 on traditional marketing. Doesn’t have one of these:
Task Rabbit– Expanded and Expanding to
Delivery, Cleaning, Odd Jobs, Handy Man, Virtual Tasks,
What’s next?
If you were the head of product?
Task Rabbit– Competition
Favor (here in Austin)
HomeJoy (just raised $38mm)
Zeel (massage)
GetMaid (cleaning)
Cherry (car wash)
Food Systems
Good Eggs
How many of you are customers?
Prefer the experience to typical grocery store?
Would recommend it to a friend?
Found it price competitive?
Good Eggs- Economics
Grocery industry is a $650b market in the US. Traditional operaters live on tiny margins, 3-4% points.
A few outliers: Whole Foods.