Wednesday 17 October 2018  12:31 PM  -  AM 55°F  - PM 59°F    5-Day Forecast   







Hello Egy
A new business model for a new generation of consumers

By:Sarah Lacy

There’s a reason that healthcare and public education are the least functional parts of our economy. In neither is the person receiving the treatment the one actually paying the bill.

First off — calm down, crazy Libertarians — I’m not suggesting we abolish either. But it’s certainly a problem that in both healthcare and public education there’s inherent confusion over who the customer actually is.

Think about how much the battle over public education doesn’t revolve around the students. The fact that teachers aren’t able to be fired for poor performance, for instance. That has to do with political officials allocating money and making rules, and basing those rules on what messages well to parents and the unions that support their campaigns. The kids themselves literally and figuratively don’t get a vote.

Healthcare is even more convoluted. We have a system where the doctors sell treatments to patients who don’t pay for them. For people with generous insurance, doctors are economically incentivized to order excess tests and treatments a patient doesn’t need, and the patients have no economic incentive to push back. For those with lousy insurance, they frequently can’t get the care they need, because the system is priced for a deep pocketing third party to pay steep medical fees that few individuals can absorb and avoid bankruptcy.

This even affects drug discovery. Only things that insurance will pay for — and pay for en masse — get green lit on the long, expensive track of human trials and FDA testing.

These may be two of the most egregious cases of a weird triangle of people who provide a product or service, those who pay for it, and those who should be the customer being somewhere weirdly in the middle. And in both health and education there are convoluted social safety-net reasons why things can’t be simplified.

But many other industries display a similarly weird disconnect between provider and customer, with far less justification beyond a vestige of a pre-Web era when sales channels were rooted in a brick-and-mortar, physical distribution system. Media is a big one: The end customer — the reader — doesn’t pay the bills in most media. Think about music: The transaction is really between the label and the artist, which is why many individuals felt fine about piracy.

Slowly but surely the Internet is smashing down a lot of these bizarre triangle-economies into flat, straight lines between the company providing a good or service and the person consuming it. Or at least straighter lines. There will still be ad-supported media businesses, but other methods of “tip jars” and Kickstarters are springing up alongside them.

We saw this flattening of the supplier-customer early on with some things like travel agents, but mobile is pushing it aggressively in many industries because now the Internet goes with us everywhere.

I got into a fascinating conversation about this last week with Dan Rosensweig, and I haven’t quite been able to look at the world the same way since. Rosensweig — once a senior executive at Yahoo, private equity partner, and head of Activision’s “Guitar Hero” franchise — has been quietly building text book rental company Chegg into a juggernaut that aims to solve every pain point college students have.

Think of it like AngelList. The way AngelList seeks to help entrepreneurs solve the hassles of funding, electronic term sheets, and hiring, Chegg wants to help students pick their schools, rent students textbooks cheaper and easier, and help get them homework help. Rosensweig has been aggressively acquiring companies and building a professional management team as it builds this big vision out.

But at the core of every reason that Chegg works is one thing, says Rosensweig: It’s totally reinvented who the customer actually is in this transaction. “Textbooks used to be for professors, not students,” he says. Books were bought and sold a certain way, because it was convenient for the book stores and teachers and publishers, but never the students. Chegg has changed all of that in both small and dramatically large ways.

Chegg’s textbooks are not only cheaper, but more convenient. They will send students a new textbook if they complain for any reason about the one they’ve received. They’ll take any textbook back within 21 days for any reason. If a students waits until the last minute to order one, they’ll make the material available online until the book arrives. If you just need the damn first chapter for that week’s class, they make it possible to just get the damn first chapter. It’s all about need it now, not buy it forever.

I remember in college cramming for an exam and looking furiously for one sheet of paper with one day’s lecture notes on it. It was the only sheet of paper that mattered to me in the world at that moment, and I couldn’t find it. As a turned over my dorm room, it occurred to me that at that time I would have paid any amount of money for that sheet of paper — the same one I would happily throw away the day after the exam.

This insight is why Chegg’s business is up, and Barnes & Noble’s college publishing division is down 7 percent this year, Rosensweig says.

Beyond textbooks, schools recruit students over Chegg, and it connects them with other people taking their course for free and paid homework help and note-sourcing. It helps them plan their course schedule, telling them what their school requires and who else is taking each class. Rosensweig wants Chegg to be a third “graph” of the Web — similar to LinkedIn’s professional graph and Facebook’s social graph. It’s the education graph.

I should note a lot of people want their company to be the third graph of the Web. MyHeritage and other genealogy sites want to be your family graph; many companies want to be a “taste graph.” The utilities of all of these are still up for debate.

Clearly everyone doesn’t need an education graph. But every year there is a huge number of incoming freshman who do. And it just so happens, they’re people a lot of businesses want to market to. “You’ve found the perpetual fountain of youth,” a marketing executive looking to sell stuff through Chegg recently said to Rosensweig.

In that sense, Chegg will start to become less about the classroom as it dominates everything connected with the classroom. Earlier this year, it did a promotion with Taylor Swift’s new album to pick a college for her to do a televised concert. Students voted — and rallied votes for their schools — on Chegg. Swift’s people knew Rosensweig from his “Guitar Hero” days, but they came to him for the promotion, because they wanted to reach exactly that college demographic. Few places have it. Facebook gave up that concentration long ago.

Rosensweig sees this trend not just at Chegg but everywhere. He sees three big trends playing out in the digital world right now. One is about the end of ownership. The second has to do with location. But this third trend — a radical reshaping of the relationship between companies and their real customers — is the biggest he sees and the biggest he has ever seen. “I am 51 years old and have been in the industry since 1983, and this is the biggest change I’ve seen yet,” he says. “We are selling to a whole generation that has never gone a day without the Internet. They want to pay what they expect to pay, and they don’t understand why they can’t.”

You may call it millennial entitlement — the very same generation that wonders why HBO can’t just put “Game of Thrones” episodes online ignores the realities of what that may do to legacy businesses. This is the generation who stole music rampantly. This is the generation that will likely never buy a newspaper. But love them or hate them, this is the growing consuming class in this country. And as my kids’ generation grows up with the Internet in their pockets, the trend will become more extreme. The good news is this: In many cases they are happy to pay — and even pay more on a per transaction basis — to get what they want in a more convenient and per-slice way.

Done right, this is an entirely new way to make money online. A lot of money, in many cases.

It’s not simply about taking a middleman out of the equation; sometimes it’s about inserting a new middleman. Spotify, Apple, and Pandora inserted themselves as additional middlemen when it came to music. Similarly, Uber connected drivers directly with passengers, whereas in the past town cars used to deal with corporate accounts. But it made itself the conduit in every transaction at the same time.

Cloud computing has allowed individuals to pick the software they want to use, making the worker bee the customer, not the IT manager. But they stay in the transaction, they don’t ship the software and let consultants worry about the rest. Consumer software has had a similar revolution with less and less of it appearing shrink wrapped on a shelf at BestBuy. The focus is 100 percent on whether someone wants to play your game, not on the shelf space it may get.

This one in particular has not been lost on Rosensweig. The reason he left Activision was that he wanted to expand “Guitar Hero” into online versions, and the company was resistant to it. They knew how to sell through retail channels; that’s what they were optimized for, and that’s what they were good at. But Rosensweig wanted to design products for all those would-be thrashers out there, not constantly worry about what BestBuy and Wal-Mart wanted. He wanted to price the software at what he wanted people to pay, not leave it up to the retailer to discount it heavily to get people in the store. He wanted to put out a new version with explicit lyrics if that’s what users wanted, without Christian groups boycotting Wal-Mart, and Wal-Mart telling him what his customers want.

There’s danger of this trend making a generation of spoiled brats even more spoiled by giving them exactly what they want at that moment in the way they want it. But there’s also a beauty to using the Web and mobile devices to make our daily lives so much better.

Imagine if Starbucks knew my order as I was pulling into the parking lot, and it was ready the second I walked in. Or better yet, if a barista could automatically run it out to my car the exact second I pulled up. I may not pay more for that everyday, but I sure as hell would if I were late to a meeting with a screaming baby in the car. A lot more. Imagine if my neighborhood restaurants knew my local, big-tipping self was the one who wanted a reservation at 8 pm, not just an anonymous user on OpenTable. They might find some room. And odds are, I’d tip much bigger to make sure I got the preferential treatment the next time. This is why Uber’s surge pricing is genius when it’s not gouging victims of a natural disaster. There are select times when I’ll pay double for a cab. Simply allowing me to do so makes everyone happy.

In a world where the computer knows where we are and who we are and can seamlessly charge us, the world might get more expensive. But it could also get a whole lot less annoying. ”This is what big data means to me,” Rosensweig says.


Reuters

By: manager Date Added: 2012-12-13 Comment: 0 Views :1857

  Related Links
Guardiola should run a mile if Abramovich comes knocking
Negotiating change in the Islamic religious establishment
A Plea for Caution From Russia
What Angelina Jolie forgot to mention
Egypt The Arabism ... Iraq The Ajam


Name :
Email :
Comment :


Egypt to issue certificates to finance Suez Canal on Monday
Egypt to issue certificates to finance Suez Canal on Monday
The “Beard Girl” wins The Eurovision
The “Beard Girl” wins The Eurovision
Egypt: Detained Al Jazeera journalists and others face criminal trial
 Egypt: Detained Al Jazeera journalists and others face criminal trial
Yemeni Nobel Peace Prize winner barred from entering Egypt
  Yemeni Nobel Peace Prize winner barred from entering Egypt
Egypt condemns Iranian "interference" after army ousts Mursi
 Egypt condemns Iranian  interference  after army ousts Mursi
Egypt orders arrest of Brotherhood leaders
Egypt orders arrest of Brotherhood leaders
How to oust a president, Egyptian-style: Part Two
 How to oust a president, Egyptian-style: Part Two
Four Egyptian Shi'ites killed in attack by Sunni Muslims
 Four Egyptian Shi'ites killed in attack by Sunni Muslims
Egypt parliament ruled illegal, but to stay on
Egypt parliament ruled illegal, but to stay on
Ethiopia diverts Nile for huge $4.7 bln hydro dam
 Ethiopia diverts Nile for huge $4.7 bln hydro dam
Militants release seven Egyptians kidnapped in Sinai
Militants release seven Egyptians kidnapped in Sinai
Egypt's army blocks roads in Sinai in hunt for kidnappers
 Egypt's army blocks roads in Sinai in hunt for kidnappers
Protesting Egyptian police block Israel border crossing
 Protesting Egyptian police block Israel border crossing
Gunmen storm Egyptian security post in lawless Sinai Peninsula
Gunmen storm Egyptian security post in lawless Sinai Peninsula
Gunmen kill alcohol seller in Egypt's Sinai
 Gunmen kill alcohol seller in Egypt's Sinai
Egypt condemns Israeli attack on Syria
 Egypt condemns Israeli attack on Syria

  Most Read
Story harem Al- Sultan from top to prevention
Story harem Al- Sultan from top to prevention
An interview with Mohamed ElBaradei, who hopes for reconciliation in Egypt
An interview with Mohamed ElBaradei, who hopes for reconciliation in Egypt
Gaddafi… Secret Room to Check Girls before Raping
Gaddafi… Secret Room to Check Girls before Raping
Brave English bulldog Hugo adopts a Bengal tiger, a white lion and ALL thei
Brave English bulldog Hugo adopts a Bengal tiger, a white lion and ALL their tiger cubs in experiment by South Africa vet
Egypt tourist arrivals rise, not back to pre-revolt levels
 Egypt tourist arrivals rise, not back to pre-revolt levels
Four Egyptian Shi'ites killed in attack by Sunni Muslims
 Four Egyptian Shi'ites killed in attack by Sunni Muslims
Millions flood Egypt's streets to demand Mursi quit
Millions flood Egypt's streets to demand Mursi quit
Immigration bill backers thwart conservative amendments
Immigration bill backers thwart conservative amendments
Malala: 'I'm feeling better' after skull surgery
Malala: 'I'm feeling better' after skull surgery
Egypt militants planned to hit US and French embassies -MENA
 Egypt militants planned to hit US and French embassies -MENA
How to get the best deals on Cyber Monday
How to get the best deals on Cyber Monday
Turkey rules out early polls, thousands defy call to end protest
 Turkey rules out early polls, thousands defy call to end protest
Angelina Jolie stunt double sues News Corp over hacking
Angelina Jolie stunt double sues News Corp over hacking
Samantha Cameron Wears A Red Wig And Bakes Cakes For Comic Relief
Samantha Cameron Wears A Red Wig And Bakes Cakes For Comic Relief
'No Nile, no Egypt', Cairo warns over Ethiopia dam
 'No Nile, no Egypt', Cairo warns over Ethiopia dam
Google's long-awaited 'smart' glasses will go on sale THIS year for $1,500
Google's long-awaited 'smart' glasses will go on sale THIS year for $1,500

American, Italian hostages inadvertently killed in U.S. operation- Obama
 American, Italian hostages inadvertently killed in U.S. operation- Obama
Egyptian government faces blame in mob sectarian killing
 Egyptian government faces blame in mob sectarian killing
Egypt suspends tourist flights with Iran until June amid outcry by Sunni M
Egypt suspends tourist flights with Iran until June amid outcry by  Sunni Muslims
First commercial flight between Egypt and Iran for 34 years
First commercial flight between Egypt and Iran for 34 years
Shiv Sena knives: At the sharp end of Indian politics
Shiv Sena knives: At the sharp end of Indian politics
Cradle of Arab Spring goes up in flames as protesters fire-bomb Egyptian pr
Cradle of Arab Spring goes up in flames as protesters fire-bomb Egyptian presidential palace and youths torch cars at funeral of Tunisian leader
Malala: 'I'm feeling better' after skull surgery
Malala: 'I'm feeling better' after skull surgery
Egypt Army said to defy Morsi on use of live fire
Egypt Army said to defy Morsi on use of live fire
Third time lucky: Kate Winslet marries Ned Rocknroll in secret ceremony in
Third time lucky: Kate Winslet marries Ned Rocknroll in secret ceremony in New York and Leonardo DiCaprio gives her away
Fears of further violence in Egypt after opposition claims widespread fraud
Fears of further violence in Egypt after opposition claims widespread fraud in referendum that approved Islamist-backed constitution
'My daughters think Gangnam Style is cheesy': How the President does infamo
'My daughters think Gangnam Style is cheesy': How the President does infamous dance around the White House JUST to embarrass daughters Malia and Sasha
The future's bright for Victoria Beckham as she switches things up in a sty
The future's bright for Victoria Beckham as she switches things up in a stylish orange skirt suit for fashion talk
Cracks show in Republican unity on tax rates
Cracks show in Republican unity on tax rates
How exercise can help you get pregnant - and is especially important for I
 How exercise can help you get pregnant - and is especially important for IVF

A message of peace and compassion at Prophet Mohammad’s birth
 A message of peace and compassion at Prophet Mohammad’s birth
Egypt The Arabism ... Iraq The Ajam
 Egypt The Arabism ... Iraq The Ajam
Egypt charts a path toward growth and fiscal discipline
Egypt charts a path toward growth and fiscal discipline
The Autumn of the Islamist Preacher
The Autumn of the Islamist Preacher
Morsi trial: If a court can exemplify the divisions of a nation, this
Morsi trial: If a court can exemplify the divisions of a nation, this one did for Egypt
A Plea for Caution From Russia
A Plea for Caution From Russia
Egypt’s Three Revolutions
Egypt’s Three Revolutions
Egypt's repeat search for democracy
Egypt's repeat search for democracy
Turkey can't afford to spurn democracy
Turkey can't afford to spurn democracy
Empowered women make nations strong
Empowered women make nations strong
What Angelina Jolie forgot to mention
What Angelina Jolie forgot to mention
My Take: Don't lump evildoers with Muslims
My Take: Don't lump evildoers with Muslims
Negotiating change in the Islamic religious establishment
Negotiating change in the Islamic religious establishment
How We’ve Wasted Our Timeout
How We’ve Wasted Our Timeout


Egypt Exposes BBC “British Prostitution Corporation”
Egypt Exposes BBC “British Prostitution Corporation”
Medical Operational Status to Save the Fattest Kid in the World
Medical Operational Status to Save the Fattest Kid in the World
The prison sentence for the man who holed condom to force his girlfrie
The prison sentence for the man who holed condom to force his girlfriend to be pregnant
Sex .. Robbery .. Drugs .. The Most Famous Stars’ Lies
Sex .. Robbery .. Drugs .. The Most Famous Stars’ Lies
Signed Muhammad Ali rarities to hit U.S. auction block
 Signed Muhammad Ali rarities to hit U.S. auction block
Brave English bulldog Hugo adopts a Bengal tiger, a white lion and ALL
Brave English bulldog Hugo adopts a Bengal tiger, a white lion and ALL their tiger cubs in experiment by South Africa vet
Daredevil Saudi Arabian craze of 'sidewalk skiing' brings new meaning
Daredevil Saudi Arabian craze of 'sidewalk skiing' brings new meaning to the term 'off-road' as drivers flip car onto just two wheels as passengers cling on outside
The real-life 'Popeye' who has the world's biggest biceps... but is al
The real-life 'Popeye' who has the world's biggest biceps... but is allergic to spinach
Egypt's prosecutor general orders arrest of well-known satirist
Egypt's prosecutor general orders arrest of well-known satirist
The tunnel of love: Egyptian bride smuggled into Gaza via undergound p
The tunnel of love: Egyptian bride smuggled into Gaza via undergound passageway to marry her Palestinian groom
Child bridegroom: Eight-year-old boy marries 61-year-old woman after '
Child bridegroom: Eight-year-old boy marries 61-year-old woman after 'dead ancestors told him to tie the knot'
Case of N.Y. cop accused of cannibalism plot goes to jury
Case of N.Y. cop accused of cannibalism plot goes to jury
China imprisons four men for 'ghost marriage' corpse bride trafficking
China imprisons four men for 'ghost marriage' corpse bride trafficking
A loud crash, then nothing: Sinkhole swallows Florida man
A loud crash, then nothing: Sinkhole swallows Florida man

Syrian refugees top 3 million, half of all Syrians displaced - UN
Syrian refugees top 3 million, half of all Syrians displaced - UN
Chemical weapons watchdog wins Nobel Peace Prize for Syrian mission
Chemical weapons watchdog wins Nobel Peace Prize for Syrian mission
Events in Egypt may influence, won't define Syria war
Events in Egypt may influence, won't define Syria war
Syria says rebels would take years to match army's strength
Syria says rebels would take years to match army's strength
Syria's Islamists seize control as moderates dither
Syria's Islamists seize control as moderates dither
Syrian rebels launch attack to block northern highway
 Syrian rebels launch attack to block northern highway
Syrian jets strike, rebels await U.S. weapons
 Syrian jets strike, rebels await U.S. weapons
If U.S. does not arm Syria's rebels, Arabs, Europeans may
 If U.S. does not arm Syria's rebels, Arabs, Europeans may
France says Syrian war at "turning point", mulls arming rebels
 France says Syrian war at  turning point , mulls arming rebels
Syrian forces capture final rebel stronghold in Qusair region
Syrian forces capture final rebel stronghold in Qusair region
Syrian army captures strategic border town of Qusair
 Syrian army captures strategic border town of Qusair
No safe way out as Syrian forces grind down besieged Qusair
 No safe way out as Syrian forces grind down besieged Qusair
Red Cross still pushing for access to besieged Qusair in Syria
 Red Cross still pushing for access to besieged Qusair in Syria
Russian fighter jets headed to Syria, which asks for more
 Russian fighter jets headed to Syria, which asks for more

Meet the Man Who Sold a Month-Old App to Dropbox for $100M
Thought Experiment: Build a Supercomputer Replica of the Human Brain
The Rise of the Term \'Glasshole,\' Explained by Linguists
Forks Up! What It\'s Like To Dine At Disneyland\'s Super-Exclusive Restaurant
CityScan: the dystopian technology that could make breaking the law impossible
Real-life Houses That Look Like They Belong in the Shire
Heeeelp! Nigerian model has her own Naomi Campbell moment as she goes flying on catwalk
Victims in Boston Face a Difficult Path to Recovery
In Search of Terroir, His Ear to the Ground
Living With Cancer: Living Without Hair
One photographer\'s journey inside Iran
The Most Dangerous Countries for Tourists, in Maps
How the Chess Set Got Its Look and Feel
Why silly speculation about the 2016 presidential race can do some real good.
The Nocebo Effect: How We Worry Ourselves Sick
The 25 Best-Paying Companies For Software Engineers
The Secret World of \'Garbagemen\'
So Today I Learned that France built a Replica of Paris in WWI

  Find us on Facebook

  Find us on twitter

Scroll through for the most amazing stories from around the globe
Nancy Comes Back to Zero
“The Watermelon Queen”
Terrifying adventure of
bing the tallest buildin
Our little pony! Miniatu
orse Mr P lives in house
Police visited Kidnapper
house in 2004
NRA seeks to highlight
armed women
Chechnya country fear
Britney Spears jets out
New Orleans in Daisy
inmate stashes phone in
tum
Commuters leave their t
ers at home
Doctors treating patient
at addiction
More men fatter lose hal
ight
The tallest girl : my Bo
end like my son
top site