Uber All
Tomorrow’s Vertex of Value in On-Demand,
Premium, Dynamic Pricing and Personal Services
FutureView 2015 LIVE
J. Walker Smith
Executive Chairman
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# UberAllEconomy
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1
FutureView LIVE
Uber All Economy
The digital reengineering of business models …
Into on-demand personal services …
That are more affordable for most …
While unlocking hidden niches of …
Premium demand and value-added pricing.
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FutureView LIVE
Uber All Economy
Today’s Agenda
Rough ride economy
Liftoff Uber All
Switching over
Tight fit
Facing forward
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FutureView LIVE
Uber All Economy
Today’s Agenda
Rough ride economy
Liftoff Uber All
Switching over
Tight fit
Facing forward
www.thefuturescompany.com/FutureView2015
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Rough ride economy
First things first … Global economy running slow
“Despite setbacks, an uneven global recovery continues. Largely due
to weaker-than-expected global activity in the first half of 2014, the
growth forecast for the world economy has been revised downward to
3.3 percent for this year, 0.4 percentage point lower than in the April
2014 World Economic Outlook (WEO). The global growth projection for
2015 was lowered to 3.8 percent.
“Downside risks have increased since the spring. Short-term risks
include a worsening of geopolitical tensions and a reversal of recent
risk spread and volatility compression in financial markets. Mediumterm risks include stagnation and low potential growth in advanced
economies and a decline in potential growth in emerging markets.”
http://www.imf.org/external/pubs/ft/weo/2014/02/
IMF
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Rough ride economy
First things first … Global economy running slow
We project global growth in 2015 at 3.4%, marking the
fourth consecutive year of disappointing performance.
Jobs, investment and productivity continue to be weak.
Add geopolitical tensions and you get real pessimism.
We may see a mere 3% average annual growth between
now and 2025.
https://www.youtube.com/watch?v=DB5MAiFrmhg
While the world economy is not about to fall off the cliff,
3% will likely not satisfy the increased health, housing
and safety needs of growing middle classes in emerging
economies or service the world’s aging populations.
Bart van Ark, Conference Board Chief Economist
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Conference Board
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Rough ride economy
First things first … U.S. economy also running slow
Range of annual real GDP growth forecasts during 2014 FOMC
meetings among Federal Reserve Bank Presidents and Board Members
2014
2015
Longer run
Sept
June
March
Sept
June
March
Sept
June
March
2.0% to 2.2%
2.1% to 2.3%
2.8% to 3.0%
2.6% to 3.0%
3.0% to 3.2%
3.0% to 3.2%
2.0% to 2.3%
2.1% to 2.3%
2.2% to 2.3%
http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20140917.pdf
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Federal Reserve
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Rough ride economy
A sizable output gap in U.S. economic performance
Potential GDP
$868
billion
below
potential
Real GDP
http://stateofworkingamerica.org/charts/output-gap-real-gdp-compared-to-potential-gdp-2000-11/
BEA/CBO
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Rough ride economy
Closing the output gap is going to take time
http://www.washingtonpost.com/wp-srv/business/the-output-gap/
BEA/CBO
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Rough ride economy
What about the record-setting November jobs report?
The question is not whether it was a great jobs report.
It’s whether it foreshadows a change in economic trajectory.
The answer is that it was a great but not a game-changing report.
Michael Strain
Deputy Director, Economic Policy Studies
American Enterprise Institute
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Rough ride economy
It takes more than jobs – wages must grow, too
http://www.pbs.org/newshour/making-sense/whats-the-most-reliable-indicator-of-monthly-job-gains/
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Rough ride economy
Macroeconomy mirrored in consumer economy
http://www.tradingeconomics.com/united-states/retail-sales-annual
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Rough ride economy
Macroeconomy mirrored in consumer economy
P&G Profit Up Slightly; Sales Growth Remains Sluggish
Company Tries to Get More Consumers to 'Trade Up' to Pricier Products
(WSJ, April 23, 2014)
Unilever reports slowest sales growth in 5 years
(FT, October 23, 2014)
'Urgent' Walmart Memo Lays Out Strategy To Boost Grocery
Sales
(HuffPost Business, November 12, 2014)
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Rough ride economy
Key takeaways
• The old models of doing business face powerful headwinds
• Strong revenue growth is becoming much more challenging
• Consumers are struggling to stay even, much less spend freely
• A new business model will be better suited to these circumstances
• There is big growth potential in a better match of model to situation
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FutureView LIVE
Uber All Economy
Today’s Agenda
Rough ride economy
Liftoff Uber All
Switching over
Tight fit
Facing forward
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15
Liftoff Uber All
In a lukewarm economy, Uber is red hot
Its recent investment round of $1.2B
that closed in early December puts
Uber’s current market cap over 2X
its June valuation of $17B.
http://www.latimes.com/business/la-fi-uber-funding-20141205-story.html
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Liftoff Uber All
It’s about Uber-like business models for everything
$4.8B+
invested to date in
on-demand start-ups
including $2.2B+
in past 12 months
http://www.businessinsider.com/th
e-on-demand-economy-2014-7
http://www.slideshare.net/schlaf/on-demand-everything
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Liftoff Uber All
Go ahead, pick a category, any category
Laundry detergent
“An Uber for
dry cleaning
and laundry”
http://yrcovers.tumblr.com/post/90356300370/gentlemen-start-your-boxer-shorts
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Liftoff Uber All
Go ahead, pick a category, any category
Laundry detergent
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Liftoff Uber All
Every consumer category is going to be affected
The 'On-Demand Economy' Is Revolutionizing Consumer
Behavior — Here's How
“Aided by the playbook of GrubHub/Seamless, Uber, and Airbnb
[restaurants, transportation, hospitality], service providers in
Mike Jaconi, CEO of Button
July 13, 2014
newer categories are anticipated to reach scale rapidly.
“In a survey conducted by The On-Demand Economy of 18 highprofile industry “influencers,” grocery, home services, and
local events were the most likely to experience explosive growth
over the next three years.”
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Liftoff Uber All
Established companies putting a toe in the water
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Liftoff Uber All
But the future demands a more aggressive posture
Monthly average price for an individual (nonfleet) medallion:
$871,667
$840,000
Nov.
http://www.nytimes.com/2014/11/28/upshot/under-pressure-from-uber-taxi-medallion-prices-are-plummeting.html
http://www.nytimes.com/2014/12/03/upshot/new-york-taxi-medallion-prices-fall-again.html
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22
Liftoff Uber All
“A lot to learn” from the Uber business model
What happened when Boloco founder
John Pepper became an Uber driver
(Boston.com, February 7, 2014)
“Last October, Boloco co-founder and CEO John Pepper resigned his job after a tussle with
directors about the (regional burritos) restaurant chain's direction.
“In that situation, lots of other entrepreneurs might take time off to travel, or become an
‘entrepreneur in residence’ at a college or investment firm.
“Pepper decided to become a part-time Uber driver.”
Q. Did you sign up because you wanted to learn about Uber?
A. Whatever business I do next, there's a lot to learn from their model … I think they could
really affect the world of restaurant and retail.
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23
Liftoff Uber All
Key takeaways
• Uber All is the new motive force in the marketplace
• It is the path to explosive value growth even in the current economy
• This new model is being rapidly pioneered by well-funded start-ups
• At the very least, this is a huge new competitive threat
• But established companies should tap into this opportunity, too
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24
FutureView LIVE
Uber All Economy
Today’s Agenda
Rough ride economy
Liftoff Uber All
Switching over
Tight fit
Facing forward
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25
Switching over
Uber business model
Personal service …
… available on demand …
… and priced by usage.
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26
Switching over
Uber business model
Idle assets
Products-plus
Substitution
Personal service …
… available on demand …
… and priced by usage.
From one use to another
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Switching over
Uber business model
Idle assets
Mobile
Products-plus
Apps
Substitution
Fulfillment
Personal service …
From one use to another
… available on demand …
… and priced by usage.
From “go to” to “come to”
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Switching over
Uber business model
Idle assets
Mobile
By the slice
Products-plus
Apps
Occasions
Substitution
Fulfillment
Premium
Personal service …
From one use to another
… available on demand …
… and priced by usage.
From “go to” to “come to”
From flat rate to tiered
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Switching over
Places and head spaces
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Switching over
Blooms and Bouquets
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Switching over
Grocery retail
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Switching over
The Pivot to Passive will power Uber All
Pizza Hut menu picks toppings
for you by tracking eye
movements
http://mashable.com/2014/12/02/piz
za-hut-eye-menu/
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Switching over
The three-legged stool of Uber-ization
The driver’s seat
Proposition
Anchor value
in a service
Performance
Execute with
immediacy
Pricing
Charge by
usage
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34
FutureView LIVE
Uber All Economy
Today’s Agenda
Rough ride economy
Liftoff Uber All
Switching over
Tight fit
Facing forward
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35
Tight fit
1.
Service is where the action is
%
72
If I am getting bad
service, I will walk out
of a store even if they
have exactly what I
am looking for
Source: U.S. MONITOR 2014
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Tight fit
1.
Service is where the action is
62%
Russia
76%
84%
Turkey
China
86%
68%
85%
India
Mexico
Thailand
77%
91%
Colombia
Nigeria
Somewhat/very likely in
next 12 months to pay for
a service that provides
extra convenience in your life
(Source: Global MONITOR 2014)
71%
Kenya
74%
Indonesia
70%
Brazil
59%
64%
South
Africa
Argentina
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Tight fit
2.
The future of service is immediacy
Amazon has led the way in retail with a relentless focus on speed
1997
2005
2007
2009
2011
2013
2014
http://i.imgur.com/NoFuF8T.png
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Tight fit
2.
The future of service is immediacy
Uber is budget
or premium.
Both are fast.
Cheap
There is no price
or quality at which
there is any such
thing as ‘slow Uber.’
UberX
UberXL
Fast
Uber Uber
Black SUV
Quality
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Adapted from … http://www.web-strategist.com/blog/2014/02/12/ubers-business-model/
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Tight fit
3.
Perfect analogue to future labor markets
Software and robotics are fundamentally upending employment
Computers put “47% of
total US employment at
risk … [in] perhaps a
decade or two.”
http://www.oxfordmartin.ox.ac.uk/downloads/academic/The_Future_of_Employment.pdf
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Tight fit
3.
Perfect analogue to future labor markets
A bifurcation of work into those who manage technology and those
who provide various personal services for those who manage technology
“As workers are displaced by smart machines in
manufacturing and other areas, more individuals will be
employed as personal trainers, valets, private tutors,
drivers, babysitters, interior designers, carpenters, and
other forms of direct personal services … The middle of
the distribution is thinning out and this process appears
to have a long ways to run.”
“We can expect a lot of job growth in personal services …
The more that the high earners pull in, the more people
will compete to service them, sometimes for high wages
and sometimes for low wages.”
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41
Tight fit
3.
Perfect analogue to future labor markets
Uber is exactly this – the intersection of tech and personal services
Uber is run by people who manage the technology
Uber employs people selling a personal service
Similarly, Uber-like business models will thrive by
virtue of being structured appropriately to tap directly
into the labor and skills pools of the future job market
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Tight fit
3.
Perfect analogue to future labor markets
Woman opens professional cuddling shop – gets
10,000 customers in first week
November 19, 2014
Professional cuddler Samantha Hess has opened
a pro cuddling shop, where for $60 customers
can get an hour's worth of spooning and "the
level of human contact that we want or need in
order to be our optimal selves."
Located in Portland, Oregon, the shop is called
Cuddle Up To Me and is already very busy.
Hair strokes, hand-holding, caressing and conversation is also available
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42A
Tight fit
4.
Right match for household resources
Household finances are being squeezed
-$5,500
Groceries
Housing
Clothing
College savings
Phone
Health care
Emergencies
Child care
Retirement
https://www.americanprogress.org/issues/economy/report/2014/09/24/96903/the-middle-class-squeeze/
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Tight fit
4.
Right match for household resources
Payment on demand is already widespread – and spreading rapidly
Foundation Capital associate Zach Noorani and early Uber investor Shirven Pishevar
http://www.slideshare.net/ZachNoorani/ondemand-economy-report?related=1
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Tight fit
4.
Right match for household resources
Unlocks value-plus pricing opportunities
Not targeting people willing
and able to pay a premium
Targeting occasions in which people
of all means are price indifferent
Fewer and farther between
Service on demand worth it
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FutureView LIVE
Uber All Economy
Today’s Agenda
Rough ride economy
Liftoff Uber All
Switching over
Tight fit
Facing forward
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47
Facing forward
The imperative … Figuring out how to Uber-ize
Services
The future of service, service types and formats
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Facing forward
The imperative … Figuring out how to Uber-ize
Services
Immediacy
The future of service, service types and formats
Benchmarking against trends shaping expectations
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49
Facing forward
The imperative … Figuring out how to Uber-ize
Services
Immediacy
Occasions
The future of service, service types and formats
Benchmarking against trends shaping expectations
Super-sale and Superstar
Segmentation
of Now®
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50
Uber All
Tomorrow’s Vertex of Value in On-Demand,
Premium, Dynamic Pricing and Personal Services
FutureView 2015 LIVE
J. Walker Smith
Thank you!
Executive Chairman
www.thefuturescompany.com/FutureView2015
© The Futures Company 2015
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