18 Mar 11 Missed Opportunity for OpenTable
Last Friday night, I used OpenTable for Android. It’s so easy and very helpful, especially when you’re in an area you don’t know well. Later in the weekend, at #SXSW in Austin (which, sadly, I did not attend), senior folks from StumbleUpon, YouTube and Pandora got on stage for a panel called, “Recommendation Engines: Going Beyond the Social Graph.”
What a missed opportunity for OpenTable.
I don’t mean the event itself. I mean to build out a robust and trustworthy recommendation algorithm of their own.
OpenTable should have one of the best recommendation engines out there. They have insight into not only search and browse behaviors for restaurants but more importantly, they know when you’ve actually eaten there.
Amazon’s reviews are so powerful not just because of their numbers, but because you can verify which reviewers have actually bought the product. We know it because Amazon can verify the purchase and the shipment.
Likewise, OpenTable can verify that someone sat down for their meal. (Note: Yelp tries to do this, too, by incorporating its check-ins. But all that really proves is that I was close by. OpenTable can say for sure that I ate there). It would be really cool if they could reconcile table orders with their reservations to verify even further that I did in fact try the lamb chop, but it’s not that OpenTable suffers from a reputation problem. They suffer simply from a lack-of-effort problem. Perhaps the problem is the incomplete feedback loop with the post-dining experience. OpenTable doesn’t need specific reviews of the restaurant by me, they have all the data that they need.
Moreover, OpenTable knows all about my habits: my price sensitivity, my proclivity to certain neighborhoods or preference of dining time. They can guess what genres of food I like and they can predict even things like where to eat based on where I might be at the time I’m booking for — maybe when booking last minute I prefer one type of restaurant, while planned meals a week out are different to me. There are all sorts of things.
I hope that all these things are on the team’s roadmap — perhaps they are. Think Foursquare but with data you don’t have any reason to question. I think OpenTable is sitting on a lot of really interesting data and they can do a lot in the future with it.
But for now, it’s a big missed opportunity for them.
Tags: algorithms, Android, opentable, recommendation engine, tuscan milk
15 Mar 11 How much is your time worth? NBC gives you a price.
Quick: how much is an hour of your time worth?
NBC thinks you’re about $240 an hour.
To promote their upcoming show “America’s Next Great Restaurant” (which, incidentally, sounded like a cool concept to me), NBC recently ran a very interesting video campaign. NBC partnered with LivingSocial — the Amazon-invested Groupon clone.
After consumers completed their order they were given an option: ”Take 30 seconds to watch the trailer for NBC’s newest show and receive $2 off right now on the deal just purchased!”
Thus, NBC values your time at $2/:30seconds –> $4/minute –> $240/hour. That’s pretty good.
What’s interesting to me is not only their “valuation” of you and your time. What I like about it is the novel and creative way to spend online media dollars.
I can’t be sure, but as I see it there are two ways that LivingSocial and NBC priced this out:
- LivingSocial charged NBC a flat CPM of, say, $15 and then the $2 savings to the consumer was essentially a pass-through. (NBC did a similar promotion last month for buy-one-get-one-free burritos at Chipotle).
- LivingSocial considered NBC like any other vendor/client and charged them a $4 CPC and then took 50%, thus preserving their external-facing pricing model (to either advertisers or merchants), and in turn providing the viewer with a $2 savings.
Either way, looking at other forms of digital video, how does it compare? The best comparison to me would be YouTube’s TrueView model, with the payment method being a Cost Per View (CPV) metric, equivalent to the click-to-play that LivingSocial offered.
In both cases, you pay only for opted-in, engaged views. But CPVs on YouTube are much lower than $4. Despite/because of auction pricing, YouTube paid views are generally an order of magnitude or so lower. And with the LivingSocial deal, the advertiser does not benefit from targeting or reach/scale beyond the sales LivingSocial was able to put together that day. While not a raw deal for NBC, I think there are other, more efficient ways to spend those ad dollars. Granted, not all of them are as splashy (or as I said, as creative).
One question remains about intrinsic and extrinsic motivators — would you be moved to watch the video to save $2? Let me know in the comments. Ultimately, I think the psychological benefits are big here: at the end of the day, I’m getting paid to watch that video.
Tags: amazon, america's next great restaurant, bj fogg, chipotle, cost per view, CPC, CPM, CPV, daniel pink, deals, extrinsic, groupon, intrinsic, livingsocial, nbc, trueview, YouTube
13 Dec 09 On Disrupting Your Own Technology
I don’t like shopping, but the one kind I will tolerate is hunting for tech goodies. Couple that with Black Friday deals from the comfort of my own laptop, and I’m all over it. This year, my little bro and I bought my dad a beautiful 42″ Sharp LCD 1080p TV. This of course necessitated discussions of replacing the current disc player in our family room, which, believe it or not, is actually a dual DVD/VHS player.
We were looking around at Blu-ray players, comparing and contrasting their up-converting abilities, cost, etc. One thing we talked about as a feature was WiFi/Internet-enabled Blu-ray players. This struck me as a strange idea. The advantage is, as advertised, the ability to stream content directly to the device from Amazon, NetFlix and other services. The attraction from the consumer’s standpoint is obvious (more media, in more ways) but it is a counter-intuitively strong move by manufacturers.
It is, in short, a great example of disrupting your own tech advantage, a message hammered home to me this summer by David S. Rose at Singularity University. He gave the example of Amazon disrupting big-box physical book stores like Barnes & Noble, and then even further disrupting their own very successful model (and margins) with e-book delivery via the Kindle.
But I’d say that the Blu-ray example could prove to be even more lucrative. By positioning themselves directly between the consumer and the content regardless if the data is coming from a disc or streamed off the Web, Sony et al. are ensuring that when the tipping point in data delivery arrives, they’ll be there.
There is a story in today’s New York Times about falling Blu-ray prices which touches upon the tension:
…Blu-ray manufacturers have placed themselves in a seemingly awkward position: They are selling a device that relies on people to continue to buy discs, but the same device gives them a way to download videos — bypassing the discs the machines were built to play.
But, as the article goes on the point out, this is not all bad. In fact, in my opinion, it is the kind of long-sighted planning which despite being rather rare nowadays, should pay dividends.
Compare this move to the current player in our house: it is tempting to say these are parallel examples, of devices simply looking to bridge the gap as the world moves from one standard (VHS) to another (DVD) — and now to a third (Blu-ray).
But that overlooks something very basic and very crucial: the VHS/DVD combo player was reactionary. It was something which grew out of the need to give people a way to watch both their home movies stored on VHS as well as their newest releases coming out on DVD.
The Web-enabled Blu-ray player is an entirely different set-up: it is an attempt to jump the gun (and to disrupt the Blu-ray market) just as the market itself is maturing. Only now are prices falling near the “impulse purchase” range of $100, according to the president of the Blu-ray trade group. And the mainstream switch to streamed delivery is not due for a number of years. But there it is, right now, the WiFi Blu-ray player, available at your local Best Buy, and for cheaper now than ever.
Tags: amazon, black friday, blu-ray, disruption, disruptive technology, dvd, netflix, new york times, nytimes, sharp, shopping, singularityu, sony, stream, streaming, streaming content, tv, vhs, video
