Tag: transportation

The All You Can Eat Option

On May 9, 2012

The proverbial “all-you-can-eat” business model works great for some products and not-so great for others. The opportunity, of course, is to be able to transform non-viable business methods into viable one’s using social media tools and data. In this article, we explore how the AYCE model can be improved.

Netflix for the Sky

The Netflix model for movies has been touted as one of the greatest business innovations in the modern era of technology – not because it is new, but because it works. Now, consider that the AYCE model has been applied to transportation, club membership, and telecommunication (cell phone data plans), etc. Some work better than others….

I found this recent article about American Airlines experience with the AYCE model – which became their worst nightmare. In 1981, you could buy a lifetime all access pass to first class travel on United Airlines for 250,000 dollars. While touted as a good way for AA to raise a lot of quick money, it proved to have long term liabilities that far outstripped the performance of the fund raising. Today, a small carrier called Surf Air is now trying to use a subscription based system on a limited circuit using executive turboprop aircraft.

What is the comparable human behavior?

AYCE models impact human behavior in often unpredictable (read “unprofitable”) ways. We’ve seen the unlimited plan for cell phones becoming a thing of the past. Taxi drivers have not yet introduced the subscription travel plan but certain bus routes and commuter modes lend themselves to unlimited passes where an alternate single use rate and behavior record can be used as a price comparison.

I recall a wise and successful colleague in the insurance business revealed the dark truth about unlimited subscriptions. “They are like extended warranties, the only people who should actually buy extended warrantee are those who fully intend to beat the crap out of the item that they are covering”. Like gym subscriptions, low use members are needed to subsidize high use members.

Simulated Economy

Another way to simulate the effect of an unlimited prescription without leaving the business with an unmanageable long-term liability is to create an option-like instrument. The buyer would hold the right without the obligation to purchase the service at a discount during a specific period of time where behavior will be regulated by market forces.

Holding the option would be priced relatively cheap so that the buyer does not feel a deep loss for not exercising the option, yet sufficient to subsidize the activity of those who do exercise the option for discounted service. Another feature is that the option can be traded allowing holders to build a proto-economy around the asset that they possess. This would decrease the marketing costs of the provider as the price of the options floats to meet the needs of the market.

These strategies are commonplace on Wall Street but a statistical construct for their deployment on Main Street may be emerging. New “platforms” will arise which produce and aggregate data in the right format to support an options type of instrument for the trade or exchange of any number of goods and services in a non-cash environment.

Maybe the all-you-can-eat buffet of the future will resemble a cornucopia of options for assets that everyone shares. Bon Apetite.

Can Advertisers Curate Themselves?

By Admin

On March 18, 2011

In General Information

Get Real by Playing for Real

At the end of the day, any ad campaign needs to get real people to take real and tangible action. Ideally, the advertiser wants to see the real effectiveness of a campaign in real numbers.

The Value Game is applied to a new jet charter start-up called Social Flights and offers an opportunity for advertisers to become part of the experience of the traveller, rather than a distraction to everybody. Instead of paying a website for click throughs, the vendor can pay the traveler directly to “click through” a catalog of products. As long as your product is relevant to the travel experience, the traveller will be interested and engaged.

The Game is to be relevant and this is where Social Flights helps create the playing field.

Social Flights will collect data about a travelers intentions in a fully open agreement. Travelers submit this data to the game with the explicit understanding that vendors will compensate them with relevant discount coupons. Data are normalized so that the traveller is anonymous in every respect while still providing very rich intentions to the vendor. Vendors can now target their value proposition with great precision.

What’s a Travel Trader Game?

This sets up a game where the traveler, when presented with many options, will plan their trip and influence their friends based on the perceived value of the options presented to them – it’s like holding properties on a Monopoly(TM) Board. As the travelers play the game, the vendor is being discussed, researched, and propagated all across the web in real time and in real context with a tangible experience as the travelers decide what activities to pursue.

Win twice: Let People Game the Game

When someone “clicks” on the vendor proposition from their “experience environment” of travel, their intention to be interested, informed, entertained, and fulfilled by your product is much higher than in a off-experience “forced” impression. When they compare, and even trade, coupons with their friends, a negotiation happens which influences a group of people. These negotiations lead to discussions all across the Internet. These discussions mean different things to different people so a fresh pool of customers is always on tap for the next round of play.

Why let Facebook own YOUR game when you can own it yourself?

Social Flights allows travelers to sell their data to vendors who, in effect, compensate the traveler with discount “option” that can only be exercised if the traveller (and their friends) makes a purchase. Advertising is essentially FREE until the traveler exercises their discount option. Even then, the advertiser has all the information that they need to determine the quality of the effectiveness their campaign and the effectiveness of a competitor’s campaign. No matter whether you are the traveler or the vendor, how you play the game becomes YOUR intellectual property. Patent that Facebook!

Social Media Frequent Flyer Miles

By Admin

On December 22, 2008

In General Information

The Internet is a lot like a commercial airplane – it is very useful in transporting us to distant lands but the real work must happen on the ground. The organization of society at both ends of an Internet destination must be developed if real wealth is to be created. Social Media needs to develop this component at this critical juncture of human history when vast amounts of social capital, creative capital, and intellectual capital are being sent to the shores of despair upon Unemployment Air Line.

Computer enabled society:

The great opportunity of our generation in the fair, sustainable, and equitable creation of wealth through innovation in a computer-enabled, open-sourced, and democratic society that can organize its own knowledge in the form of a financial instrument. The great danger, of course, is if we miss our flight and engender a computer simulated society where it is easier to interact with online community than our own neighbors. It’s like getting on an airplane for the fine view, good food, and interesting conversation. Social capital is by far the most powerful force of change and social media must now touch the ground in a meaningful, systemic, repeatable, and scalable manner.

The analogy continues:

The earliest days of aviation were a novelty at best. Some commercial enterprise emerged in the form of barnstorming, carrying the mail, light cargo, aerial photography, and warfare. Likewise, the evolution of the internet brought us on-line gaming, e-mail, e-commerce, assorted photography, and hacking, etc. It was not until the invention of municipal airports that the airplane became a true time machine by increasing human productivity and allowing us to see history that would otherwise be unavailable traveling by sea. The true value of both commercial aviation and social media over “sail mail” is precisely through the increase in human productivity to transfer information to the ground.

Three Web Applications:

First, social media needs to develop a knowledge inventory system by geographic areas. Second, Social Media needs a search engine at a local level that combines knowledge assets to form “strategic” social networks that can execute a specific business plan at reduced risk; cooking the “secret sauce”. Third; an Innovation Bank must “pull” knowledge surplus and “pull” knowledge deficits together from diverse communities. These three applications will provide everyone with the tools needed to create wealth in their communities.

Social Media has the potential to become the airport of the Internet Transportation System. Nothing meaningful can happen until the rubber meets the tarmac. So, let’s start building runways.

The Next Economic Paradigm

Tag: transportation

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