Discover more from Learning by Proxy with Vivek Srinivasan
Positive Externality and CoronaVirus
Positive Externality is a concept of economics which describes an unintended positive outcome of an action. For example, the Singapore government wanted to reduce pollution and started charging a fee to drive in the CBD. This resulted in the CBD becoming safer for older people wishing to walk there, which was a positive externality.
I am sure none of you would have heard positive and Corona mentioned together in the same sentence, but I dare.
I think a lot of time and effort has been spent talking about the negative consequences of this lockdown. There are areas of Positive Externality and one need not look too far to find them.
What would have been thought impossible or far out in the future is happening today! I want to illustrate these through examples. There are broadly two themes that I am seeing which can represent opportunities for startups.
Trends that were considered 5 -10-15 years out might get accelerated.
Zomato getting into grocery - Under normal circumstances, I do not believe Zomato would have planned to get into grocery in 2020. In fact, given that the company was planning to shore up profitability and move towards an IPO, I doubt they would have for the foreseeable future. They were razor-focused on growth and profits. But then the spanner was thrown into the works. Eventually maybe in 7-10 years as growth slowed they would have been forced into the grocery segment to use their fleet and generate more income. This was certainly accelerated by the current circumstances. There was an opportunity and also a need because food delivery volumes took a beating.
Disney+ user growth - When Disney+ was launched in February 2020, the executives making presentations said that they expected the steaming service to garner 60 - 90 Million users by 2024. They just released figures last week. The company already had over 50 Million users. Being imprisoned at home has no doubt helped the cause of the service and expedited what looked like it was a half a decade away to being just two quarters away. Can you find a product-market fit like this at this time which can drive you?
Uber going from a taxi company to a logistics company - Right from the day that the Uber app was built to accommodate ‘Contractors’, Travis Kalanik always viewed Uber as a logistics company. In all of his interviews, he spoke of the fact that Uber could be used to move anything, not just people. Maybe Uber was not thinking of delivering grocery in the immediate future but the current circumstances have forced the company to move into the market and partner company and support them.
Habits and thinking that are considered too entrenched to change.
Telemedicine takes-off - Would you consult the doctor from your living room just over a phone or a laptop? It might be possible, but people would not want to do that. This was the entrenched thought process which caused clinics to be set up and for doctors to run around the city going from clinic to clinic - to consult patients. Changed in a heartbeat. The moment the shutdown was announced, the Medical Council of India issued a circular and now suddenly everyone is getting into telemedicine.
Amazon and Apple working together on Amazon Prime Video on Apple TV - You cannot buy an e-book using the Amazon app on iPhone (even today). The reason - Apple takes a 30% cut on any digital goods sold through any iOS device. For the foreseeable future, they will not change this. But they blinked when it came to Amazon app on Apple TV. They allowed Amazon to integrate their payment gateway and collect payments. With people sitting at home it made sense to allow amazon this leeway so people remain on Apple TV.
Apple and Google working together on an OS level for features - Last week Apple and Google announced that they have been developing an OS-level solution that can allow both OS to communicate with each other. Apple refers to Google as those other guys in their presentation, so this is unthinkable. They came together because they needed a cohesive solution if the proximity detection was to be used to let you know if you had been around someone who is diagnosed as infected.
Some things that have been considered impossible are happening now and happening fast. We hosted a talk session last week over Zoom where we had over 100 people join in for the webinar. Never had we seen such a turnout for a webinar, it is happening now.
So what opportunity are you not looking at? What behaviour did you wish to desperately change? Here is the window to experiment. Try that thing that was considered impossible. If you have value to deliver, you might just find a new way to do it.