Month: August 2009

Unf*cking car rental

The oldest case for VRM is one that has hardly improved in decades: car rental. Few business categories do a worse job of matching specific customer needs. Or a worse job of doing even the very limited range of services to which they limit themselves.

For example, Enterprise. I had a car booked for this evening in Santa Barbara that I would drive for the next week and return to the same airport. Price: $205 for an economyh car.  Nice deal. But, thanks to the common difficulty of getting from Airport A to Airport B, I’m arriving at 11:45 this evening, after Enterprise is closed.  So I called the company from the airport in Denver, where I’m sitting now.

The robot asked if I’d like to answer a one-question survey if I stayed on line after the call. I pressed 1 for yes. The reservations agent explained that I couldn’t change the reservation for pick-up tomorrow morning, but would need a new reservation. This one would be $245. Why? The short answer: because that’s what The System says.

So the survey robot asked me to say whether I was satisfied with the agent’s service (not the company’s, meaning the agent gets penalized, I would guess). On a scale of 1 to 5 (where 5 is most satisfied), I punched in 2. The robot expressed electronic unhappiness with my dissatisfaction, and told me to leave a detailed message. When the promt for that came, I started to talk and the robot instantly interrupted with a “Thank you,” and hung up the line. Is there a better way to compound customer unhappiness than that?

So I want to take this opportunity to appeal to anybody in a responsible position anywhere in the car rental business to work together with us at on a customer-based solution to this kind of automated lameness. It can’t be done from the inside alone. That’s been tried and proven inadequate for way too long. Leave a message below or write me at dsearls at cyber dot law dot harvard dot edu.

Let’s build The Intention Economy — based on real, existing, money-in-hand intentions of real customers, rather than the broken attention-seeking and customer-screwing system we have now.

[Later...] Just booked a Budget compact car through United for $196.86. Got miles with it. By the way, I am a long-standing member of Budget’s FastBreak club. There was nowhere on the reservation I just made to note that. Makes no difference. Just pointing out how lame “loyalty” programs are too. I have minimal loyalty to Budget (which, over the years, has generally been okay). As of now, I have antipathy toward Enterprise.

Appreciating TipJoy

It’s shocking and sad to read Jason Kincaid‘s  Tipjoy Heads To The Deadpool story this morning in TechCrunch. Ivan and Abby Kirigin were neighbors just up the road from Cambridge (I understand they’ve recently moved back to California), and kindred spirits to the VRM community as well. Keith Hopper and I had a nice get-acquainted lunch with them a couple months back, and talked often in conversations about how EmanciPay might use the excellent TipJoy API, among other possibilities. The key paragraph from their final blog post:

When we evaluate why there’s been so much hype about payments on Twitter, and yet so little traction for us (and even far less for our competitors) it is clear to us that the reason is that a 3rd party payment service doesn’t add enough value. We strongly believe that social payments will work on a social network, provided that they’re done within the platform and not as a 3rd party. “Simple, social payments” is *the* philosophy needed to do digital payments right, but once a service groks that, they need only to implement it on their own. We’ve been the thought leaders in this space, we see the hype and excitement, and yet we know very intimately the difficulties in gaining actual traction. The only way to get around this is for the platforms themselves to control payments – then all people wanting to operate on that platform would have to play along. We believe that a payments system directly and officially integrated into social networks such as Twitter and Facebook will be a huge success.

This is consistent with our thinking as well. It’s why we’re designing EmanciPay not as a payment system but rather as a lightweight customer-native and -controlled set of methods (rather than a “system,” which implies something big, heavy and central) for choosing not only how much to pay, but when, where and under what terms — and leaving payment itself up to the Twitters, Facebooks, PayPals and Google Checkouts of the world.

EmanciPay is also not a business in itself. When it’s done it will be a set of specifications (data types, protocols, logic) rather than a commercial venture. It will add to the still-small portfolio of native customer capabilities as independent actors in the marketplace.

To leverage what Dave said long ago, Ask not what the marketplace can do for you. Ask what you can do for the marketplace. VRM is about answering that second question.

Meanwhile, we salute the pioneers. TipJoy did much for the marketplace. I just hope that the marketplace will repay Abby, Ivan and their colleagues generously. In fact, I have faith that it will.

Testing the all-tip system

Arlington cafe serves gourmet food and lets customers pay what they want, by Shane Stephens in the Dallas Morning News, probes some of our assumptions with EmanciPay—a customer-controlled way to choose how much to pay for online goods that cost nothing but are worth more than that. The financial end of the story:

The no-set-price concept is intriguing, especially in this economy. Chippindale says it was inspired by One World Cafe in Salt Lake City, a pay-what-you-want community kitchen founded by her friend Denise Cerreta. But while One World Cafe is nonprofit, Chippindale intends to make money. “I definitely do not turn away from a profit,” she says.

So far, she’s not getting rich; in fact, she’s not even breaking even. Customers have been leaving an average of about $7 per person in the envelopes, and Potager’s food costs are running about $8 per person, she says.

That’s two small tests in a trial that needs many more. Think payment levels might change if the restaurants’ costs were fully exposed?

Dawn of the Living Infrastructure

So how do we get out of this place?

infrastructure_of_living_dead

Let’s face it. Mike Arrington’s problem with the iPhone, Om Malik’s problem with AT&T, the FCC’s problem with Apple + AT&T together, my own problems with Cox, Dish Network and Sprint, David Pogue’s problem with the whole freaking cell phone industry … all of these are a great big WAAAH! in the wilderness of industrial oblivity to what customers want. We’re in the graveyard of what Umair Haque calls the zombieconomy. We’re living in Night of the Living Dead and complaining that the zombies want to eat us alive.

What they really want is to strap us down while they bleed us for small change—tiny amounts of ARPU. They do this, for example, by forcing us to sit through “The … number … you … have … dialed … eight … zero … five … seven …” until a small ka-ching happens somewhere deep in their billing system, so you get bled whether or not you’ve left (or received) a message. David Pogue:

Is 15 seconds here and there that big a deal? Well, Verizon has 70 million customers. If each customer leaves one message and checks voicemail once a day, Verizon rakes in — are you sitting down? — $850 million a year. That’s right: $850 million, just from making us sit through those 15-second airtime-eating instructions.

It was JP Rangaswami (disclosure: I consult JP and his company, BT) who first pointed out to me that the primary competence of phone companies isn’t technical. It’s financial. They’re billing machines. That’s their core competency. And it was r0ml who pointed out, way back when he was with AT&T Wireless (before it became Cingular, and then the AT&T we all know and hate today), that phone companies arrived at the holy grail of micropayments decades ago. They don’t charge small amounts, but they know how to add them up, and round piles of microminutes into billions of dollars.

A better movie metaphor is The Matrix. We’re all wet cell batteries inside giant phone company billing systems. The machines took over a long time ago, and they’re still running the world.

Not that acting like machines does them much good in the long run. Umair Haque:

Profit through economic harm to others results in what I’ve termed “thin value.” Thin value is an economic illusion: profit that is economically meaningless, because it leaves others worse off, or, at best, no one better off. When you have to spend an extra 30 seconds for no reason, mobile operators win — but you lose time, money, and productivity. Mobile networks’ marginal profits are simply counterbalanced by your marginal losses. That marginal profit doesn’t reflect, often, the creation of authentic, meaningful value.

He adds,

The fundamental challenge for 21st Century businesses — and economies — is learning to create thick value. We’re seeing the endgame of a global economy built to create thin value: collapse. Why? Simple: thin value is a mirage — and like all mirages, it ultimately evaporates. In the 21st Century, we’ve got to reconceive value creation.

Constructive Capitalists are disrupting their rivals by creating thicker value. Thick value is sustainable, meaningful value — and a new generation of radical innovators is wielding it like a strategic superweapon.

Rick Segal thinks Mike Arrington‘s CrunchPad is one of those superweapons. Here’s what the Crunchies say will look like:

crunchpad-near-final-design

Sez Rick,

No, this probably isn’t the next Apple or Motion Computing, but here’s the secret.

Let’s assume there are just 1000 people out of all the TechCrunch people in the world that want this device.  If this device gets made and sold to 1000 happy people and the result is a manufacturing world and process which can now do these “one off” type devices, the game changes.

That’s why I want this device to get made. It begins a high profile (and positive) disruption at the point of manufacture and that can mean exciting things to you.

One way to blow up silos and walled gardens is de-verticalize industry itself. Not by making it horizontal (that’s too abstract), but by making it personal. Rick’s angle here is to go all the way to the source, and make manufacturing personal.

That’s what Rick thinks Mike & Co. are doing here. I also think the Crunchpad is compliant with what Dave says in this post here:

I’ve been through this loop many times, this is Mike’s first. The only platform that really works is a platform with no platform vendor, and that’s the Internet.

Right. The Crunchpad, as I understand it (and the Crunchies have explained it) is a Net-native device. Standards-based. Commodity parts. Full of open source stuff. The platform is the Net. The vendor is TechCrunch, but trapping users isn’t their game. They’d rather have thick value than thin.

So how do we contribute, besides paying cash for goods? By being constructive customers, rather than passive consumers. That’s what Rick is calling for here, and why we, as free and independent customers, can choose to support something that uses the Net as the platform, and is built to be user-driven.

Think about it. Is the Crunchpad crippled by any deals with a major vendor of any kind? Is it locked into any phone company’s billing and application approval systems? Is it locked into any one industry’s Business-as-Usual? No.

So who is in the best position to contribute to its continued improvement, besides the Crunchies themselves?

You. Me. Users. Customers.

We can drive this thing. Even if what Dan Frommer says is right, and Apple comes out with the world’s most beautiful pad ever, and pwns the whole category, there’s more vroom for improvement in the Crunchpad, because Apple’s device will be closed and the Crunchpad will be open. Or should be.

You listening, Mike?

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