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
As a 13 year old I abandoned my dreams of managing Manchester United, instead aspiring to emulate my parents by entering the world of business. In October 2014, I signed a three year contract to work at J.P.Morgan’s Investment Bank in New York City.
2014 has been a year of big, life-changing choices, but in many ways it feels as though the decisions made were predestined. Ironically bookended by two amazing tech startup events, my year has been dominated by the decision to start my career in the world of Finance over the startup world. I could not be more excited.
The year’s main events can be broadly categorized into four categories, each of which I recall fondly for varying reasons: Finance, Startups, The Bronx and Travel & mind-broadening experiences.
This post is my call to action for anyone and everyone to donate to the most worthy cause I can think of: Green Bronx Machine’s Indiegogo fundraiser.
For two weeks I have been spamming all of my friends on Facebook and in person about an Indiegogo campaign organized by The Green Bronx Machine (GBM). I don’t regret it. We have raised more than $1,000 in 10 days, $1,000 that is going towards one of the most worthy causes I can think of.
But it is not enough.
I won’t give up until I help GBM reach their $10,000 goal and equip PS 55 in Claremont Village with the high-tech Biodiversity Center that will help to change the lives of hundreds of children in the Bronx, giving them opportunities to better their own lives.
I am more confident than most that the arrestingly beautiful country that sits at the head of the United Kingdom will vote with their heads and reject independence next week; however, the current levels of animosity and cynicism to the notion of a prosperous union of four great peoples leaves me wondering if our proud nation has forgotten what makes Britain “Great”.
The 307 year English-Scottish Union has presided over some of the most significant and impactful developments in the history of mankind, economically, scientifically and politically. The British Empire, perhaps the greatest empire to ever rule the world, has spread the concepts of globalised trade, freedom of speech and public education which have undoubtedly made the world a better place.
This grand union that served as the birthplace of modern economics and the Industrial revolution has always punched above its weight in terms of innovation and performance. Today we continue to influence global culture with our literature (from John Stuart Mill to J.K. Rowling), our music (from The Beatles to Adele), our scientific breakthroughs (from the splitting of the atom to the discovery of Graphene) and through the globally revered media outlet that is the BBC. I would consider many of our social policies to be morally courageous, as do many nations to whom Great Britain is a role model: the notion that every citizen deserves a right to healthcare access, regardless of their background; our commitment to foreign aid even in tough times, acting as a stabilizer for countries and people whose tough times are often much worse than those in the UK; our willingness to pursue controversial but often life-changing medical policies such as In-Vitro Fertilization.
This moral leadership is necessary in today’s uncertain world, and I think on these questions the citizens of the United Kingdom are truly in unison. We have much to be proud about our defining characteristics, and it would be a travesty if we let politics divide us and break up the world’s oldest continuous democracy.
I have problems with the British government, and don’t feel that my vote necessarily allows for representation of my views in parliament: I detest the euro-skepticsm of the Conservatives, the Union affiliation of Labor, the proposed financial regulation of the Green Party, the handouts of the Lib Dems and everything about UKIP. But it doesn’t detract from our shared characteristics that have remained a beacon of light to people in developing countries, from China to Rwanda.
Scotland, don’t let politics destroy this truly remarkable Kingdom. We truly are #BetterTogether.