“Operated by NYC Bike Share LLC”
As I looked for an answer, I stumbled upon mini-revelation after mini-revelation, and as I write this post I hold a new appreciation for the business model design behind Citi Bike.
My curiosity regarding the proprietorship of Citi Bike stems from my personal experience with the service. Anyone who has crossed paths with me over the past three months knows that I am obsessed with my Citi Bike membership. With 23 bikes docked at the end of my block, I have used my $149 annual membership for a variety of reasons: quick pedals down to the L train, half hour commutes to and from work in Midtown, gentle Sunday rides through Williamsburg and Greenpoint, and even for 45 minute cardio workouts. My online stats show I have taken 73 trips averaging 12 minutes, traveling over 100 miles. I love Citi Bike.
So with a personal interest in bike sharing generally, and Citi Bike specifically, I started researching, and after a morning’s worth of Googling it turns out NYC Bike Share LLC is a small subsidiary of The Related Companies, the massive Real Estate firm founded and majority owned by Stephen M. Ross, the billionaire mogul who owns the Miami Dolphins. The organizational structure which led me to uncover this connection, however, is rather complex.
It saddens me that the first I heard about Campus was news of its closure. On June 18th, the housing startup founded by Thiel Fellow Tom Currier closed its virtual doors, ending a two year experiment in co-living at 34 properties in SF and NYC.
Campus acted as a psuedo-property manager, signing large properties on long-term leases and renting either single or shared rooms to Campus members. Its mission was to build communities within its properties by grouping tenants with similar interests in the same house and allowing relationships to flourish in communal kitchens and lounges. It also provided services to take care of residents’ needs, from basics (toilet paper) to premiums (professional cleaning service), all in exchange for a monthly fee on top of the regular rent. Fast Company reporter Sarah Kessler spent six months in a Campus residence in NYC and wrote a great piece about the experience, concluding, “while Campus, the business, was a failure, Campus, the living situation, was a success.”
Campus CEO, Tom Currier, agrees with Kessler. On the company homepage he says “Despite continued attempts to alter the company’s current business model and explore alternative ones, we were unable to make Campus into an economically viable business… while we are deeply saddened by this situation, we are so proud of the community that has burgeoned over the past two years.”
It is a shame to see such a promising venture fold, as the value built in the community has been widely acknowledged by its residents, many of whom have mourned its loss on social media. The business model rests on being able to charge members a premium to the market rate for living in the community, and Campus clearly struggled to find the right strategy for monetizing its community.
Regardless, I think co-living has a bright future. As urban millenials increasingly value life-enriching experiences and lifestyles that prioritize flexibility and quality, co-living can offer instant access to a community of like-minded individuals and the promise of authentic experiences that are tailored to an individual’s identity. For recent graduates who face the daunting prospect of social isolation in a new neighborhood, this is particularly appealing. Read More
Britain is simply too reliant on its service sector. According to the World Bank, Britain’s service sector as a percentage of total GDP, at 79.6%, is the highest of any developed country in the world. A report released yesterday by the British Chamber of Commerce suggests that this number is only going to increase, as its service sector grows while manufacturing is stagnant. This dependency on services (especially Financial Services) leaves Britain exposed to sector specific shocks capable of deteriorating its entire economy.
Fortunately, Britain is home to a number of innovative firms and nascent non-service sectors which, if allowed to flourish, could form the basis of a true 21st century manufacturing sector, the growth of which could balance the U.K.’s service bloat.
I believe that Britain has the ability to develop competitive advantages in the following three areas: commercialized space technology, renewable energy innovation, and large scale urban agriculture & cultured meat development. It may sound like a sci-fi vision, but it is much closer to reality than you might think.
The concept of the UK being a pioneer in space exploration sounds like a laughable concept to most Brits, but a small company in Surrey has been quietly launching low-cost nano satellites into low-orbit for nearly three decades, and today is a world leader in the industry. As this Economist profile illustrates, Surrey Satellite Technology (SST) is building the infrastructure that will power man’s ultimate ascent to the moon, Mars and beyond. Despite being owned by French aerospace giant Airbus, SST employs over 500 engineers in South East England, and is set to grow as the industry develops and companies like SpaceX make space flight affordable. Tax incentives for aerospace investment, such as those suggested by trade body ADS, could help Britain’s aerospace sector as a whole flourish and cement it’s competitive advantage in an industry with a growth trajectory that is taking off (pun intended).
Renewable Energy Innovation & Materials R&D
The UK is over-flowing with innovations that emerge from its world class research universities. Two researchers at the University of Manchester were awarded the 2010 Nobel Prize in Physics for their discover of graphene, a super-material that could revolutionize everything from computer chips and battery life to tennis racquets and food packaging; at Oxford University, professors are experimenting with perovskites to create transparent solar cells that could ultimately be used in windows to help cars and buildings generate their own electricity. Unfortunately, Britain often fails to turn these innovations into Billion dollar industries, instead allowing American and Asian tech giants to reap the rewards of our research. Britain is beginning to embrace more of an entrepreneurial culture with Fintech startups emerging out of London – now we need to see more of our own innovations being spun off into businesses that can bring millions of high tech manufacturing jobs to the British isles.
Urban Agriculture and Cultured Meat Development
This is the sector in which the UK does not currently hold a competitive advantage, and actually lags behind other countries in the world, but the UK does possess all the requisite geographic and cultural factors to see urban agriculture thrive. Commercial urban agriculture makes economic sense in areas where cheap, arable land is scarce and there is a population who is willing to pay more for the locally sourced, sustainable produce urban agriculture can provide. London is a perfect market for urban agriculture producers, and young startups such as GrowUp Box should be encouraged to scale as rapidly as possible in order to provide commercial quantities of hydroponic produce; innovations to emerge from R&D facilities such as the Centre for Urban Agriculture at the University of Nottingham should be spun off into companies that can benefit Urban Agriculture around the world.
Cultured meat development took a huge leap forward with the culturing of the world’s first synthetic hamburger that was cooked and eaten in London in 2013. The research is centered at Maastricht University in the Netherlands, but developed with British researchers alongside their Dutch counterparts. Cultured meat promises to be a multi-billion pound industry if it can be produced economically – lets make that research happen in Britain.
Building a 21st century Britain
If Britain is to thrive in the 21st century on a global stage, it needs to invest in the industries that promise millions of skilled jobs, capitalizing upon its existing competitive advantages (especially in the form of our research powerhouses). This growth will ultimately be the result of entrepreneurial individuals, but it can be nudged along with through state incentives.
Until next time!
I was supposed to start work last week. Unfortunately, a delay in the processing of my visa has left me with two weeks of complete freedom. “If I’m not working, I better spend this time usefully!” I told myself.
The truth is that I have spent the past ten days exploring the many coffee shops of Williamsburg, reading fiction, watching great TV and going on walks down to the bank of the East River.
This is a far cry from the worker-bee persona I was prepared to embrace at work, and on an almost daily basis I have suffered from guilty couch potato syndrome — ashamed that I am not being more productive, but too lazy to do anything about it.
The Productivity Paradox
I suffer from a need to feel productive. I regret time that I “squander” on relaxation, and I am constantly afraid that my ability to make an impact in the world will be grievously wounded unless I keep moving forward. Throughout my time at University I challenged myself to undertake projects which could bring me closer towards something big. I started a business, I ran charity fundraisers and I organized conferences.
I don’t think my experience is unique. The Millenial generation believes it has the power to enact real change on an individual level, without needing to climb the rungs of a corporate ladder. We believe in the ability to amplify our voices and leverage the power of our actions through technology. We believe in our ability to eradicate extreme poverty and solve global warming if we are resolute in our commitment.
But there is a disconnect between what we believe, and what we actually do. Read More
On Wednesday, the California Labor Commission ruled that a former Uber driver had in fact been an employee at the company, rather than a contractor, and ordered Uber to reimburse her for costs incurred while an employee at the company. This is a big deal that could put a dampener on the hockey-stick growth currently enjoyed by on-demand companies such as Uber, Lyft, Homejoy, Taskrabbit and Washio, that rely on the contract-worker model to lower their cost base and allow for business model that can scale rapidly. In order to understand why there are opportunities to be found in our new, on-demand economy, a little background is required.
I have an addiction to Coffee Shops. Coffee shops and cafes, not coffee itself. At a good coffee shop I arrive at a magical intersection of productivity and creativity. It is the “third place”, as coined by Starbucks CEO Howard Shultz, that I spend the most amount of time at after my home and my office. I wake up and head to the coffee shop; I meet and have meetings with friends and colleagues at the coffee shop; I blog, I read and I browse at the coffee shop. In fact, I’m writing this post at my new local coffee shop/bar hybrid, Freehold.
I love the environment of a coffee shop so much that I have often dreamed of owning my own, but a quick look into the economics of the industry have convinced me that the business is not nearly as comfortable for the owners as the coffee shop environment is for their patrons.
Nevertheless, I have made a number of observations about the industry that I feel are worthy of sharing.
Coffee is a leading indicator of Consumer Trends
Coffee has always been a highly visible industry for studying changes in consumer preferences. In the 80’s and 90’s, the shift from coffee as a commodity drink brewed at home or in the office, to an on-the-go pickup purchase from Starbucks or Dunkin Donuts preempted the ongoing shift in consumer focus from price-consciousness to convenience and quality of experience. In the late 90’s and early 00’s, consumers began to step up and take notice of where their food, drink and clothes were coming from. The coffee industry led the way in embracing Fair Trade ethical sourcing standards, beating the subsequent explosion of organic supermarkets and socially conscious apparel manufacturers.
Today, the consumer trend being led by coffee producers is not the quality of the experience or the ethicality of a product’s supply chain, but rather the rise of products that are purchased as a reflection of a consumer’s individual personality. As perfectly articulated in this Mashable article, today’s Young Urban Creatives “define ourselves by our purchases…[but] how much they cost is immaterial if the materials bought validate our intellect”. The rise of Third Wave coffee producers such as Stumptown Coffee, Intelligentsia and Blue Bottle has been well documented; producing small batch, lightly roasted coffees with a wide variety of flavor profiles that are the antithesis of the consistent, dark roasted coffee consumers can expect from Starbucks.
This surge in creativity and variety in coffee can find a parallel in the craft beer movement, which has successfully taken on the multinational brewers by offering locally produced, creative varieties of beer. People want to be able to purchase products that reflect their individuality and their taste; third wave coffee and craft beer are on the bleeding edge of providing these expressive products to their customers.
Increased experimentation in the typical Coffee Shop model
For coffee shops themselves, I believe we are witnessing the early stages in experimentation of the traditional coffee + pastry business model. Capitalizing on the coffee-shop-as-an-office trend, certain locations are distinguishing themselves by developing a model based on monetizing a consumer’s time or a coffee shop’s own space, rather than the coffee they brew. Ziferblat caused a stir in London when it launched in 2014 with a pay-by-the-minute business model, and has since opened a second location in Manchester. Workshop Cafe in San Francisco has built a model by allowing customers to reserve a seat or a mini-office for as little as $2/hr, providing outlets, blazingly fast wifi and “concierge” services to those who arrive at the same intersection of productivity and creativity as I do in the cafe environment. Other iterations on the business model see locations staying open into the evening hours, serving beers and wines and hosting evening events, from Poetry readings to political debates. Housing Works in Manhattan is a particularly good example of this model.
I love this experimentation and hope to see these new models thrive; a broader spectrum of offerings allows consumers to find exactly the type of “third place” they are looking for, and the increased diversification in revenue streams may ultimately improve the economics of the coffee shop model.
Opportunities in Supplementary Services to the Coffee Industry
Despite some big bets made by the VC community in coffee shop chains like Blue Bottle, the biggest opportunities in coffee may ultimately lie in ancillary products and services. CUPS is a great example: an app that allows consumers to pre-buy discounted cups of coffee to be redeemed at scores of participating independent coffee shops throughout NYC. Their cash-flow positive model benefits from a powerful network effect, and I can see CUPS or something similar scaling rapidly in the near future. Subscription-based Third Wave coffee distributors Craft Coffee and Joyride are finding success building the logistical infrastructure for bringing good coffee to corporate clients, rather than in the coffee itself.
Coffee shops have played an indispensable role in fostering community for centuries, and in an increasingly nomadic society I believe their influence will grow further still. I’ll be keeping an eye out for growing opportunities in the supplementary services side, as well as any business model tweaks that seem to be able to scale successfully, but in the meantime I’ll just enjoy my Stumptown Cold Brew!
Last week I won Fordham’s Business Ethics Case Competition!! Here’s the video of our winning entry (10 minute presentation + 8 minutes of Q&A):
I will now be representing Fordham at IBECC in New Orleans in April, alongside teammates KC Schmitz, Lauren Teske and Gabi Cinkova!
Our winning entry was focused around what type of ethical framework should be designed into the emergency reaction system of the car, or in other words: In the event of an incident where death is inevitable to one or more parties, how should the car react, and which parties should it prioritize first?\
As you will see from our presentation and our deck, we ultimately rested on a solution in which a self-driving car prioritizes the passenger of the car first. Our argument rested on two main points:
- A passenger in a car with flawless technology is always innocent – they have no control over the vehicle, and if the car is technologically perfect then the cause of any accident must be due to external factors.
- Given the immense benefits of bringing self-driving cars onto the road (and the fact that the benefits increase exponentially – a result of the network effect of autonomous vehicles), the framework that is the most marketable to consumers is the most ethical framework
We have a lot more to say about this case, but fitting as much as possible into a 10 minute presentation was tough!
Here’s the deck we used:
What do you think?
Until next time!
View the Original version of this post on Medium here: https://medium.com/@rossyg92/privacy-inequality-is-coming-and-it-does-not-look-pretty
Today we are on a technological precipice. Falling off the edge will lead us on a collision course to a new dimension of social inequality, a world in which access to privacy is out of reach for a large segment of society. Article 12 of the U.N. Universal Declaration of Human Rights states, “No one shall be subjected to arbitrary interference with his privacy, family, home or correspondence, nor to attacks upon his honour and reputation.” Over the past decade, however, society has been willingly sacrificing this right, embracing technologies that encroach on its access to privacy.
The rising value of our personal data, the proliferation of sensors monitoring our every step and breath, and the perfecting of Artificially Intelligent data analysis tools are fueling a surge in surveillance akin to the world portrayed in Minority Report. Read More