Dating Apps: Blessing or Curse?

6

October

2020

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Back in 2010, Japan was facing a demographic crisis caused by an alarming decline of birthrates, which were among the lowest in the world. As a response to the crisis, almost all local governments in the country concluded that the best way to bring more babies into the world was to “Play Cupid”. By implementing taxpayer-financed dating programs where young people would get together to speed date, the Japanese authorities were hoping to pair up couples who would later get married and start a family together. However, Fukui – a small town in Western Japan – decided to take it one step further and created an online dating service, becoming the pioneer in government-supported online matchmaking.

Fast forward to today, online dating as become somewhat part of our daily routine and Statista predicts that the online dating market will reach 37.5 million people by 2023 in the US alone. Online platforms such as Tinder, Match.com, e-Harmony, Plenty of Fish or OkCupid, among others; have revolutionized dating by having algorithms search for patterns on how we talk about ourselves and interact with others in order to find “the perfect match” among the enormous pool of users. The advantages of these platforms are several: convenience, approachability, user’s diversity and versatility of formats (some platforms focus on people who are looking for a long-term relationship whereas others cater to an audience looking for short-term arrangements, for example), just to name a few.

Despite the clear benefits, “dating apps fatigue” is increasingly common, especially on people who went on many dates but still haven’t managed to find “the one”. As such, it is important to ask ourselves the question: are dating platforms (and the limitless pool of lovers associated to it) a blessing or a curse?

In order to assess this topic, it important to consider the setbacks of these type of platforms.

First of all, having a really large number of potential partners to choose from is not necessarily optimal. In fact, it can lead to the famous Paradox Of Choice, which states that if we are presented with too many options to choose from, we might get overwhelmed and consequently become less satisfied with the decision -because we keep thinking about the options we missed out on. This was exactly what happened to Barney Stinson, the hopeless womanizer from the famous show “How I met your mother”. In one episode, Barney is seen at a football game with a sign urging women to call him and surprisingly, a lot of them eventually did. At first he is thrilled with the possibilities arising from his phone, but as the episode goes on he gets increasingly irritated because he can’t make up his mind regarding which potential lover to call, ending up throwing his phone in the garbage.

Secondly, modern dating can be described as a marketplace where supply and demand forces interact. With the emergence of online dating platforms, dating turned into a digital market where information is abundant, and the realm of possibilities is gigantic. Additionally, it is possible to filter out characteristics that we do and don’t want in a partner, with matching algorithms taking into account variables as diverse as “hair color” and “interest in medieval history”. Overall, we can say that looking for a partner online is not very different from shopping for a new vacuum cleaner.

Nonetheless, this filtering might not actually be working in our favor because as mathematician Hannah Fry states in her famous TedTalk Mathematics of Love, “Human emotion isn’t neatly ordered and rational and easily predictable”. What this means is that feelings towards another person cannot be explained simply by a set of variables – not to mention that more often than not, our preferences aren’t exactly what we believe them to be.

Thirdly, this digital market for dating brings another problem: potential partners can be considered a commodity. If a date doesn’t go well, it’s alright – there are 20 other possible partners just a swipe away! This particular feature of dating platforms makes it more difficult to users to commit to a particular match, as they know that there might be other matches out there which are even better (again, back to the vacuum cleaner example).

All in all, love (as every human interaction) is complex and it would be foolish to think that it can be boiled down to a secret formula – although algorithms can definitely help! It’s obvious that having more than 3 people your own age to date, like it happened in villages in 16th century Germany, is great. But having so many potential lovers that it’s difficult to choose from probably doesn’t help either.

Will dating apps lead to “Happily Ever After”? Only time will tell!

 

Sources:

Tiffany, K. and Fetters, A., 2020. The ‘Dating Market’ Is Getting Worse. [online] The Atlantic. Available at: www.theatlantic.com[Accessed 6 October 2020].

Yan, S., 2016. The Japanese Government Is Trying To Find Your Perfect Match. [online] CNNMoney. Available at: www.money.cnn.com [Accessed 6 October 2020].

Hanks, V., 2019. How Dating Apps Are Revolutionizing Relationships Today?. [online] Thriveglobal.com. Available at: www.thriveglobal.com [Accessed 6 October 2020].

Fry, H., 2014. The Mathematics Of Love. [online] Ted.com. Available at: www.ted.com/ [Accessed 6 October 2020].

Statista, 2020. Topic: Online Dating In The United States. [online] Statista. Available at: <https://www.statista.com/topics/2158/online-dating/> [Accessed 6 October 2020].

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How blockchain could disrupt the education system

17

October

2019

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In 2017, it was highly possible that even your local baker or butcher advised you to invest in cryptocurrencies. The hype seems over and the dust seem to have relatively settled. Now that most people do not only see the technology as a medium of exchange, it is time to bring the real potential of blockchain to the mass. The founder of Ethereum describes blockchain as “a decentralized system that contains shared memory” (Buterin, 2017). Therefore, the technology offers a solution to any environment that wishes decentralization and transparency. Due to the peer-to-peer nature of the technology, the middleman is redundant. The first industry that comes to mind to most people is the banking industry, while thinking about Bitcoin in the back of their mind. However, it offers a solution to many more industries and markets.

An interesting affair that blockchain could possibly disrupt is the education system. The way we have been facilitating learning has been around since the 19th century (Rose, 2012). In most countries, there is a four-year university degree model where the education often fails to calibrate the needs of students and employers. Students learn different skills during their curriculum and are therefore not prepared for the job market. Therefore, many employers offer traineeships to acquire additional skills. Additionally, at average there are five intermediaries between the education and the students that all take a percentage of the tuition fee (Raffo, 2018). This is one of the big reasons why the tuition fees in the US are so high.

A platform with professors, students and employers can be created to solve these two problems. With blockchain, educators are no longer chained to these old institutions and can instead offer their curriculum that fits the wishes of employers directly to students. Students can communicate directly with the professors, so that both parties get what they want. This makes education more affordable as it removes expensive intermediaries. Certificates received on the public blockchain after taking the class are accepted by employers within the network. To disrupt an old invariable model that has been around for centuries like the education system, bootstrapping and expanding the community of the platform is pivotal. However, once the community matures, it could potentially overrule the current education system. Could it be just an utopic idea or reality in the next few decades?

Sources:
Buterin, V. (2017, September 18). Decentralizing Everything. Personal Interview with N. Ravikant.
Raffo, E. (2018, February 15). BlockchainTalks – Decentralized Education Marketplace.
Rose, J. (2012). How to Break Free of Our 19th-Century Factory-Model Education System, The Atlantic.

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Happy birthday, Instagram!

6

October

2018

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Happy birthday, Instagram! Today, it is Instagram’s eighth birthday. In the past eight years, many has changed about the app. It has transformed itself to become one of the biggest, most popular social media platforms in the world. What has made the app so significantly big?

On the 6thof October 2010, Instagram was launched, solely being available in the App Store yet. One and a half year later, it became available for Android as well. Its initial purpose was allowing users to share pictures with family and friends, and its competitive edge was the ability to professionally adjust photos by giving filters and frames. (Otto, 2018)

Ever since, Instagram has grown significantly, due to its network effects. Being a platform, Instagram gained great value by its community, i.e. the users of the app. The positive same-sided network effects came at play when an increased number of users attracted an ever-growing number of users. When one did not have Instagram yet, he or she would become very curious what kind of pictures, and later on also videos, users of Instagram shared. Soon, they would start using the app as well.

Currently, Instagram has become a platform where ‘normal’ people can become famous and a role model for many; they become so-called ‘influencers’ and have numerous followers. However, this had led to much critique as well: the lives of influencers seem ever-perfect. They seem to travel nonstop, are always very good-looking, are extremely fashionable, and experience many cool events. One may wonder how ‘true’ this depiction of reality is. Despite their many followers, many users of Instagram may also become annoyed because of the ‘overload’ of Instagram influencers. This, in turn, may lead to negative same-sided network effects: users may stop using the app, because they feel annoyed by those influencers.

What do you think? May the overload of Instagram influencers lead to negative same-sided network effects? Or do you believe the option to ‘unfollow’ those influencers will diminish the negative same-sided network effects sufficiently?

References:

Otto, R., 2018. Acht jaar Instagram: ‘Normale mensen kunnen rolmodellen worden. Nu.nl. Retrieved from: https://www.nu.nl/apps/5498408/acht-jaar-instagram-normale-mensen-kunnen-rolmodellen-worden.html

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Is Airbnb a Disruptive Innovation?

18

October

2017

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The theory of disruptive innovation, introduced by Clayton M. Christensen, has long been a guiding start to so many companies such as Intel or Salesforce.com. However, nowadays the core concepts of this theory is misunderstood. Many leaders, researchers and entrepreneurs use the term of disruptive innovation wrongly. They tend to use to describe any innovation, which has shaken up the current state of the market, or any business model (Christensen, 2015). In this post I am trying to answer the question, whether Airbnb could be considered as a disruptive innovation.

Airbnb is a platform and hospitality service, which on the one hand allows owners to lease their houses, apartments, etc. and on the other hand enables renters or tourists to rent those properties for long- and short-term as well. Important attribute is, that Airbnb does not own any building, accommodation or house, but provides the platform, which enables the owners and the renters to connect with each other. Airbnb was founded in 2008, and started growing rapidly. This new internet-based business model and its rapid growth make Airbnb a to be examine through the lens of disruptive innovation theory (Guttentag, 2013).

Disruptive innovation theory describes innovations, which underperforms in primary dimensions – the most important attributes of a product or service – however, outperform in any other attributes compered to incumbents. (Sood, and Tellis, 2011) In other words, disruption happens when a small company with fewer resources is able to win the incumbent’s customers. Answering three main questions can help to understand if an innovation could be considered as disruptive, according to this theory.

First question what needs to be answered is, if the innovation is targeting fringe market. This means that sometimes incumbent tend to overlook segments, due to their high profit orientation. If an innovation is disruptive, it targets one of those segments and provides less good product or service, for example weaker quality and lower price. In case of Airbnb it did not happen. Airbnb has never targeted low-end market or new markets, but instead try to attract the mass market’s customers. Secondly, as mentioned above, the disruptive innovation needs to underperform on the attributes that mainstream customers value, but overperform in other attributes. (Taracki PPT, 2017) If we consider Airbnb, the company offered and still offers high quality service. It enables users to find easier and faster accommodations. Every user is able to find the perfect place, which satisfies he/her needs in a more convenient way. Therefore, it does not fit to Airbnb that it offered a service, which was considered inferior by the mass market and later improved the quality to satisfy the needs of that segment. Finally, if we consider an innovation as disruptive, according to Christensen, it has a huge potential to improve in those main attributes. However, Airbnb’s website and service is working very well. Of course, there are always opportunities, and parts that can be improved, but overall the quality is catches up the mainstream market’s standards as well.

Overall, it is easy to say that innovation’s, which grow fast and changed the whole completion and the industry with a new business model, for example are disruptive innovation. However, there is strict definition and attributes that describe what innovations could be considered as disruptive. According to those, Airbnb is not a disruptive innovation.

 

Sources:

  • Daniel Guttentag (2013), Airbnb: disruptive innovation and the rise of an informal tourism accommodation sector
  • Clayton M. Christensen, Michael E. Raynor, and Rory McDonald (2015), What Is Disruptive Innovation?
  • Murat Tarakci (2017), Strategy of Innovation – Session 3 presentation 

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Author: Evelin Gyenes

486999eg@eur.nl

Clash of the Giants: Will UberEats shake up the Dutch online food ordering market?

5

October

2016

5/5 (2)

In a bold move, Uber announced the launch of “UberEats” on September 29th 2016, just one day before online food ordering market leader Takeaway.com had its IPO on the Amsterdam Stock Exchange (Reuters, 2016). The Dutch Food Service Institute (FSIN) estimates that the Dutch online food ordering market will grow from 695 million euros this year to 1.5 billion euros in 2025 (Boogert, 2016). Considering that Takeaway.com, which operates in the Netherlands under the name Thuisbezorgd.nl, holds 80% of the market (Couzy, 2016), will UberEats actually stand a chance?

Online food ordering platforms take the role of a marketplace, matching consumers to restaurants that either have their own couriers or can make use of the courier service of the platform. The consumers can view the menu and complete their order on the platform. The platform then takes a % fee from the transaction. In terms of market dynamics, most restaurants choose to join one or two platforms with the most users, in order to limit the number of technologies they need to integrate with their systems. At the same time, consumers often opt for the platforms with the most restaurant coverage. This gives rise to a ‘winner-takes-most’ market (Financial Times, 2016).

UberEats is already active in 33 cities in 6 different countries, and Amsterdam is the first city in the Netherlands that it is currently providing its services to. Its key value proposition? UberEats does not charge delivery costs, there is no minimum order amount, and it offers a tracking option (RetailNews.nl, 2016). Sound familiar? It’s the same way you can track your assigned driver in the Uber app! You can even order a sandwich from a restaurant from the other side of town – but in this case, it will not always be delivered within the normally guaranteed 20 minute time frame. By letting go of these conditions, that are generally the norm in this market, UberEats could be in a good position to threaten its competitors: Thuisbezorgd.nl, Deliveroo and Foodora. Furthermore, the company also aims to leverage on the thousands of consumers who already have the Uber app on their phones, who can be redirected to UberEats within the app (Couzy, 2016).

However, it is yet to be seen if consumers that are loyal and satisfied with one platform are willing to switch to a new one. Deliveroo and Foodora are currently the two fastest growing delivery businesses in Amsterdam. Both charge 2.50 euros for delivery and set a minimum order value of 12.50 euros. However, both have set up platform exclusivity agreements with several restaurants, which may pose a challenge for UberEats. Furthermore, Thuisbezorgd.nl’s delivery service does not charge any delivery costs; however, this only makes up 1% of its total order revenue. For the other 99% of its orders, where the restaurants deliver the food themselves, it is tied to the delivery costs and minimum orders the restaurants set themselves (Couzy, 2016).

UberEats’ business model could stand out in this ‘winner-takes-most’ market by leveraging Uber’s overall competitive advantage: its high level of efficiency, which may allow the business to deliver the food more quickly and at a lower cost. This could have a significant impact on the current industry model. For example, it could give rise to new restaurants that cater purely to the delivery market. Restaurants wishing to make use of UberEats’ service could locate themselves in locations with lower rent, enabling them to lower their consumer prices. In the future, UberEats could even consider extending its services with Uber’s UberX cabs to deliver food to customers.

What do you think about UberEats entering the online food ordering market in the Netherlands? Do you think it will be able to disrupt the current market, and perhaps even envelop its competitors’ platforms?

Comparing Thuisbezorgd.nl, Deliveroo, Foodora and UberEats
Comparing Thuisbezorgd.nl, Deliveroo, Foodora and UberEats

 

Sources:

  • Boogert, E. (2016). Markt thuisbezorging voedsel verdubbelt. [online] Emerce.nl. Available at: http://www.emerce.nl/nieuws/markt-thuisbezorging-voedsel-verdubbelt [Accessed 4 Oct. 2016].
  • Couzy, F. (2016). UberEats is vastbesloten de bezorgmarkt op te schudden. [online] Financieele Dagblad. Available at: https://fd.nl/ondernemen/1169051/ubereats-is-vastbesloten-de-bezorgmarkt-op-te-schudden [Accessed 4 Oct. 2016].
  • FD.nl, (2016). Aandeel Takeaway stijgt fors bij beursdebuut. [online] Financieele Dagblad. Available at: http://2F%2Ffd.nl%2Fbeurs%2F1169584%2Ftakeaway-com-voor-23-per-aandeel-naar-de-beurs [Accessed 4 Oct. 2016].
  • Financial Times, (2016). Just Eat, Delivery Hero and Takeaway.com fight for dominance. [online] Ft.com. Available at: https://www.ft.com/content/cfa6d3d8-a285-11e5-8d70-42b68cfae6e4?siteedition=intl&_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fcfa6d3d8-a285-11e5-8d70-42b68cfae6e4.html%3Fsiteedition%3Dintl&_i_referer=&classification=conditional_standard&iab=barrier-app [Accessed 4 Oct. 2016].
  • Fortune, (2016). Job Ads Show Uber Expanding Meal Deliveries in 24 Countries. [online] Fortune. Available at: http://fortune.com/2016/09/26/uber-meal-delivery-international/ [Accessed 4 Oct. 2016].
  • RetailNews.nl, (2016). Uber bezorgt eten per fiets in Amsterdam. [online] RetailNews. Available at: http://www.retailnews.nl/nieuws/9IQrmDbkRCCHCZAp1HFowg-0/uber-bezorgt-eten-per-fiets-in-amsterdam.html [Accessed 4 Oct. 2016].
  • Reuters, (2016). Takeaway.com valued at 993 million euros in IPO. [online] Reuters Technology News. Available at: http://www.reuters.com/article/us-takeaway-ipo-idUSKCN1200KJ?il=0 [Accessed 4 Oct. 2016].

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