Drop it like it’s hot – Zipline’s innovative last-mile delivery

11

October

2022

No ratings yet.

Picture this: you wake up in the morning, your head is aching and your muscles feel sore. “Oh no, I must have the flu” you think, pull out your phone and call up your doctor. The doctor prescribes you flu medicine and orders you to stay at home, after all, the flu is highly contagious. You go online, order the medicine at the closest pharmacy, and an hour later a bike courier delivers it on your doorstep. 

So what’s so special about that? Nothing really, at least in most urban areas. Living in Rotterdam, the next supermarket or pharmacy is probably just a 10-minute walk away from your apartment, and the scenario above probably sounds like a reality rather than a futuristic invention. But now imagine you wake up in Ghana, the middle of Australia, or any other underdeveloped rural area instead. The next pharmacy might be hours away, the streets are too rough for a bike courier, and thus urgent delivery of drugs is extremely expensive. Approximately half of the world’s population live in such rural conditions and, even though telemedicine is changing the quality and reach of healthcare services, they are unable to enjoy instant drug delivery. The WHO (2020) estimates that 5 million children die per year of preventable and treatable causes due to the lack and untimely delivery of medical supplies.

Enter Zipline, a last-mile logistics company that employs autonomous aircraft to bring instant delivery even to the most rural parts of the world. Patients and healthcare centers can order a vast variety of medical supplies online, or simply by sending a text to the Zipline team. The order is then prepared at a fulfillment center, packaged, and loaded onto one of the autonomous ‘planes’. The electric aircraft is then placed onto a ramp and catapulted into the air (see the picture below). After that, it autonomously flies to the designated drop-off zone, where it opens a hatch and drops the package equipped with a small parachute. Upon returning, the aircraft is caught by a ‘landing net’, picked up by an employee, and prepared for the next delivery. 

© 2022 Zipline International Inc

This innovative mode of delivery enables Zipline to serve more than 1,600 health facilities from their testing site in Ghana and deliver urgent supplies ten times faster and with 40% fewer costs compared to traditional transport methods (Freethink, 2022). In doing so, they revolutionize healthcare services in the region and enable timely access to medical supplies for roughly 25 million people. The beauty of the technology is its scalability. While traditional delivery methods such as cars and trucks are limited to existing infrastructure, over-the-air delivery can operate under (almost) any conditions for a fraction of the cost. The concept is so promising that Zipline entered a cooperation with Walmart to implement instant delivery in rural parts of the United States. 

While the positive impact of Zipline is clear in the rural testing areas, I’m curious about what you think about the impact the technology could have on your life. Make sure to leave a comment! 

(Also, if you want to find out more about Zipline, make sure to check out the video below)

References 

WHO. (2020, September 9). Children: Improving Survival and Well-being. Retrieved October 11, 2022, from https://www.who.int/news-room/fact-sheets/detail/children-reducing-mortality

Freethink. (2022, February 25). Instant Delivery for Everyone on Earth. Retrieved October 11, 2022, from https://www.freethink.com/technology/last-mile-logistics

Please rate this

A disruptor in distress – Why Netflix has to innovate to stay ahead

27

September

2022

No ratings yet.

Netflix has enjoyed astonishing growth over the past years, challenging traditional television companies since the launch of its streaming platform in 2007. The company is considered a textbook example of a digital disruptor, confronting traditional industries by employing technology and innovative business models. However, being the first to create a new industry does not guarantee long-term success. In the first two quarters of 2022, Netflix’s subscriber count decreased for the first time in the company’s history. Even though this decrease was anticipated by analysts, the announcement sent shock waves through the stock market, causing Netflix shares to fall 60% compared to the beginning of 2022.

Netflix’s cumulative subscriber count

The loss in subscribers is hardly the cause for this reaction, but rather the underlying problems that were revealed during the earnings call. Facing increased competition from Disney, HBO, Hulu, and the likes, Netflix has to invest heavily in content creation and customer acquisition. In 2018, Netflix recorded a negative free cash flow of $3 billion, followed by a negative free cash flow of $3.3 billion in 2019. Over the same time, the subscriber count increased by around 57 million. Dividing the total cash spent by the number of subscribers gained, we can find the “cost of acquisition” for each new subscriber is around $110. 

So, why do these numbers matter? The simplicity of the subscriber-based business model that enabled Netflix to scale so quickly now poses a serious threat to its ability to grow further. Acquiring new customers by producing and adding new content, running marketing campaigns, etc., effectively costs Netflix more than they gain in extra revenue from these new subscribers. Raising subscription fees will likely deter customers, especially since there are plenty of competing streaming services to choose from. It seems the only way to solve this conundrum is to create new revenue streams by adjusting the business model. 

In November of 2021, Netflix announced the launch of a mobile gaming platform integrated in the Netflix app, featuring a small number of games centred around popular titles such as “Stranger Things”. However, these games are currently included in the subscription fee and feature no ads or in-game payments. In the future, Netflix could lift these restrictions and create additional revenue streams, building on their strong portfolio of original movies and TV shows. Another strategy the streaming platform currently explores is the addition of a cheaper, ad-supported subscription tier that appeals to more price sensitive consumers. 

Only time can tell whether these attempts will be effective in helping Netflix overcome its growth issues, but it goes to show that even industry disruptors have to keep innovating to stay ahead of the competition. 

Sources:

https://www.forbes.com/sites/jimcollins/2020/01/22/netflixs-business-model-does-not-work/?sh=7dfc4d3c22cc

https://www.fool.com/investing/2022/04/24/the-netflix-growth-problem/

https://www.bbc.com/news/technology-59136945

Please rate this