Softbank-backed Dingdong and Tencent-backed Missfresh have both gone public, to minimal investor enthusiasm. Both companies were launched: To solve the difficulties of selling perishable and difficult to transport groceries online. To tackle some of the pain points for both Chinese families and farmers. To capture a massive opportunity. And to get to operating profitability. They […]
In Podcast 89 (Truck Alliance’s Fight for Complicated Network Effects), I laid out some of the basic information about the company – and why it is a “next level” marketplace. If selling books was simple ecommerce and selling groceries was advanced, then Didi is simple mobility and Truck Alliance is advanced. It’s just a much […]
In 2009, Brian Acton and Jan Koum founded WhatsApp to ride the wave of mobile apps kicked off by the launch of the iPhone. The original purpose of WhatsApp was to put a status notification next to your name, to let people know “what’s up”. But the small team noticed three important things that would launch their […]
In this podcast, Jeffrey Towson discusses the challenges of building network effects in complicated services, such as freight and cargo. He explores the different types of network effects, the factors that impact their growth, and the strategies that companies can use to succeed in these markets. For example, he discusses how companies can use on-demand pricing to match supply and demand, and how they can use route-specific network effects to balance supply and demand on each route.
In the past weeks, I have sent you multiple emails with various types of competitive advantages. Such as switching costs, network effects, purchasing economies and location and transportation cost advantages. The links are below: Walmart, JD and Purchasing Economies at Traditional and Online Retailers (Asia Tech Strategy – Daily Lesson / Update) Beer, Southwest and […]
In this podcast, Jeffrey Towson discusses the rise of “digital sin stocks” such as Skillz and Electronic Arts. He explores the factors that have contributed to their success, such as the growth of mobile gaming and the increasing popularity of esports. He also discusses the risks that investors face when investing in these types of companies, such as the potential for regulation and the addictive nature of their products.
When you look for big competitive advantages on the cost side, it is usually about economies of scale – when a company with a larger volume has a lower per unit cost. Or, to be more precise, when a company has… …lower per unit costs based on a higher volume of production or throughput being […]
The Didi financials are finally out. And they are an interesting mix of good and bad. Didi has market dominance and tech leadership in the largest market for shared mobility. But it is also chronically unprofitable. For investors, this could be a fantastic opportunity. Because Didi’s ongoing losses will scare off investors and likely lower […]
In this podcast, Jeffrey Towson discusses why Didi Chuxing, the dominant ride-hailing company in China, is still unprofitable. He explores the factors that have contributed to its dominance, such as its scale and its network effects, and he discusses the challenges that it faces in becoming profitable. For example, he discusses how Didi has to invest heavily in research and development, and how it has to compete with other ride-hailing companies that are also losing money.
Digital transformation and disruption are usually about attacking the cost structures of established business models. Software companies have long used digital economics to devastate traditional companies. When Marc Andreesen says “software eats the world”, he is mostly talking about costs. But as soon as you talk costs, everyone jumps to “economies of scale”. These are […]