Software is eating the cultures!

Culture

By now you’d have read or heard that ‘Software is eating the world’ — a famous observation and the truth revealed by Marc Andreessen. And the speed at which technology is moving, it doesn’t look like a cliché anymore. But I have always found myself standing at the intersection of Software and humans. How it impacts our life patterns and creates new behaviors.

Software and Humans Intersection

Prior to MySpace, Friendster, Linkedin and Facebook era, we used to have teachers, uncles, mentors, guides, colleagues, managers, bosses and the list goes on. Today everyone is a ‘Friend’. I meet a senior gentleman at a conference, I send him a friend request. You found your class teacher, the Miss Femina, started using Facebook, you send her a friend request. A recruiter came to your class, you send him/her a friend request. It doesn’t matter which country, age-group, or culture you belong to, people behave all the way same. The casual culture in Silicon Valley has slowly engulfed the cultures all around the world.

I think ‘Software is eating the cultures’.

At the subconscious level, we have probably stopped caring about this culture conundrum anymore. As long as we can keep up with each other’s life’s events, the software tools serve their purpose. It is solid and clear that these software platforms help us manage our existing and well developed relationships much better than we could manage ourselves otherwise.

However, we seem to be struggling around managing not-so-well-developed relationships. Do you accept stranger’s friend requests on Facebook or Linkedin?

Face Requests from Unknown People

As soon as we try to manage not-so-well-developed relationships or transient relationships using the same tools, tension starts to creep in. The problem is not only limited to extremely personal network on Facebook but also visible on professional network on Linkedin.

Linkedin Requests

Mark Suster, a well respected VC in the valley at Upfront Ventures, touched upon the real-world relationship conundrum in his recent blog post “Understanding your true character as an entrepreneur”. I’m highlighting an excerpt from his blog post below

“… My 20s and 30s were about meeting lots of new people and always willing and wanting to engage in new relationships and dialogs. Call it the “wedding party years” when you constantly met groups of people and friends. My 40s are more guarded. I care a lot more about the time I have with my true friends than superficial openings of new ones. Don’t get me wrong — I open the door to new relationships all the time. But I’ve become more adept at filtering out who will likely be a lifelong friend and who is likely to be transactional. It turns out that most people in life are transactional for you — and that’s ok ….”

I couldn’t agree with him more. If most people in life are transactional to us and since we do not have social platforms designed to help us manage these relationships well, this means all of us should have our portion of tensions managing these relationships online.

Think of last time when you received a random ‘friend request’ and you wondered how do I even respond to the person? or why did he send the request in the first place? And sometimes when you reach out to someone you don’t know, you wonder whether you will ever hear back. Few days later you even question, “why Can’t people be courteous enough to even acknowledge the message?”

It is definitely not because of the lack of time. It’s difficult to buy this argument. The fact that busiest people through my definition find time to answer questions on Quora, share content on Twitter, or post on their blog regularly tells me that the reason is something else. Something that needs attention.

It is pretty loud and clear to me that human connection for 2nd dgree and beyond is experiencing tension with existing tools. In the next post I’ll share my thoughts on why the human connection experience is broken. Stay tuned.

People Connection experience is broken!

Roughly a year ago, I was evaluating relocating to Silicon Valley to start another venture. I decided to pursue the education path to plug myself into an environment where I ’d have higher flexibility to take a step back and think about what would be the problem I’d love to solve for the rest of my life. I discovered Software Management program @ Carnegie Mellon University Silicon valley campus and began evaluating whether it would be a good choice for me. I din’t know that this evaluation experience will take me deep down the very basics of Social Networks. The “Friend Request” culture that we live in today and how it has slowly become the only way to connect with people.

As obvious by now, I found it terribly difficult to connect with people to leverage their experience in order to explore perspectives of different people specific to my interest. I spent lot of time browsing LinkedIn and Facebook to explore relevant folks who were either studying or graduated recently and reached out to them. Here is what was the outcome!

1. Sent friend requests to 5 students. No response ever. I totally understood.
2. Subscribed to a premium plan and sent 10 InMails. One response ever. I didn’t totally understand.

Wasn’t I supposed to have gotten better conversion here?

Anyway, that one conversation helped me discover valuable insights and I chose the program on that basis. Guess what! My decision was half baked! It’s got nothing to do with the person who guided me but my limitation in asking all the relevant questions to that person. The point is because it is so difficult to connect with people we do not know, we have no choice but to jump at conclusions much faster for small or big decisions alike.

The experience was so painful that I ended up pursuing a raw idea addressing this pain point in one of our classes. It occurred to me that 100s of thousands of students must be trying the same way every year, while the social networking tools that exist today are actually not designed to serve this specific need. After 8 months of research and toying around with many ways to address the challenge, my appreciation for the problem statement increased tremendously.

Eventually, I concluded that the Person-to-Person connection experience on web is completely broken. None of the famous social platforms like Facebook, Twitter, LinkedIn, or Quora is designed to serve a very simple human need, which is the “Right to Request”. Internet seems to have completely missed the opportunity to create a platform that would give people their Right to Request anyone in this world beyond the complexity of degrees of connection. I discovered meaningful insights, developed interesting theories, and conceptualized few ideas. I’ve just begun to develop a platform to use it for myself and hopefully it will be a fun journey.

Meantime, anyone who wants to connect with me to discuss about the SM Program (or the ideas) is welcome! If you intend to start a company during or after the program, I may be able to add much more value to the conversation.

Why Silicon Valley?

The screenshot below has all the elements that one needs to begin the research and to decide why Silicon Valley!

Deep Dive into Virality & Network Effect

I recently delivered a talk “Deep Dive into Virality and Network Effect” at ProductCamp Silicon Valley held at Santa Clara University. My presentation is now available on Slideshare (enabled for download too). I had Excel models too but that would be too complicated for someone without a discussion.

It was the 8th year for ProductCamp Silicon Valley, which is biggest of all the ProductCamps anywhere in the world. It was fantastic to see dozens of people at the sight as early as 8AM on Saturday.

Tom Gilheany introduced the event to the audience in a very interesting way including an exercise to demonstrate how regular practice leads to a habit. Out of 27 on-the-fly suggested topics, my session managed to gather 19 votes to stand 9th and get a place in the second round of sessions. The entire list of sessions can be seen here. The topics were extremely interesting, diverse, and delivered by extremely well rounded Product Management professionals in the valley.

The top voted topics in the first session were

1. How Product Managers Decide What to Build (7 Ways to Prioritize)
2. What Directors and VPs of Product Management do?
3. WTF is HDFS? – Big Data for PMs
4. Beyond the Tech Cube: the 7 steps to building a thriving marketing consulting practice
5. Our Product Managers Are Not Strategic & Other Complaints
6. The Lean Product Playbook

As I looked at the choice of top topics closely, it revealed some interesting facts about the audience

1. The confusion of PMs around what to build can only be appreciated by PMs. Other professionals wouldn’t probably relate that well. Indicates that hardcore Product Managers were present at the event.
2. The second most voted event attracted double the capacity of the room. It was obvious that most participants were ambitious mid-level PM folks looking for career promotion.
3. Big Data is the current Mega trend in valley and the pace at which the space is evolving and the startups are getting funded, PMs definitely need to upgrade themselves about it. The seen on HDFS was definitely an important one and voted rightly so.
4. 4th and 5th sessions confirmed my belief that the large audience was mid level PM community. This is the obvious stage when PMs get frustrated with the status quo at their company and start evaluating options for self practice, freedom, and larger opportunity portfolio.

It was delight to see that some participants pulled bigger audience with even ad-hoc sessions in the open area. The feel of event was pretty addictive and reminded me of Barcamps. There were quite a few Job postings on the wall. Silicon Valley is definitely a great Product ecosystem and this event reflects it so well.

UBER – The best designed product of mobile era

It is exciting to see products that change people’s behavior at the mass scale. Products like facebook, instagram, and whatsapp are undoubtedly some of the change leaders but people take time to appreciate these products. However, there are products that take our breath away the first time we use them. UBER is one such product that is inspirational for its design, purpose, and nearly flawless implementation. I am deeply influenced by UBER and end up discussing it invariably in most product related discussions with fellow friends. Before I dive into describing why I truly admire about UBER, let me share some experiences that helped me build the perspective.

First Experience

In June 2014, I used UBER in Gurgaon (India) for the first time, primarily because it extended an opportunity to travel in high-end cars like BMW 7 series, which I could not afford otherwise. It was a premium experience; I loved to talk about it within my network, and observed how I opened up from being cost conscious to experience conscious customer. Multiple WhatsApp groups were abuzz with discussions every time someone used the service. The community around me, which I believed would find it expensive, proved me wrong. People were open to shell out a few extra bucks for the UBER experience. The zero barrier trial with the first-two free rides and word-of-mouth virality were driving people crazy. Entire experience from onboarding to payment was redefined and was incredibly seamless.

Second Experience

In August 2014, I relocated to California. At San Francisco Airport, I wanted to use UBER to drive down to Sunnyvale. Unfortunately, I did not have a US number activated, so I was forced to take a traditional taxi. I wondered why the hell do they not have a web interface or let alone a counter at SFO airport; it could drive so much business after all. I paid $127 to the taxi driver and later discovered that I overpaid at least $40 for not using UBER. This experience drove me crazy to try UBER even more. The first thing I wanted after having a local number activated was to use UBER for my routine travel between home and NASA campus.

Regular Experiences

Until I bought my car, I used UBER for over 30 trips between Sunnyvale and NASA Research center and conversed with almost every driver out of curiosity to discover how do they feel post UBER era. Taxi drivers ranged from 25-year-old professionals upto 60 years old retired men and women. What I discovered was truly transformational. Particularly, a recent immigrant from east coast, who joined a real-estate agency, used UBER to familiarize herself with the new geography in addition to making a few extra bucks. An Asian retired person admired the sophisticated and yet easy-to-use technology interface that empowered him to make upto $2500 a month easily, a sum that helped him fulfill his family needs in the growing cost structures of bay area. Every driver had a unique and exciting story to share. I could closely feel the inclusive social impact that UBER was driving.

Macro View

At the macro level, it is a clean unification of three heterogeneous infrastructures

1. Physical Layer – Drivers and Personal cars
2. Data Layer – Advanced Geographical Information System
3. Application Layer – Intelligent dispatching software system

The resulting infrastructure is the classic two-sided marketplace of car drivers (the producers) and the end consumers with a trustworthy distribution network that is really hard to replicate.

Product Design

From the design standpoint, I think following decisions were crucial to deliver the optimal and consistent experience

1. Native smartphone application not HTML5 web application. It is easy to fall trap for the opportunity loss due to SEO driven traffic, but web could actually not deliver the connected and engaging experience that native application can. It is a hard choice but an immaculate decision to deliver superlative experience.
2. Leverage existing physical infrastructure in developed countries, but create own infrastructure (UBER leased a fleet in India) in developing countries. This is a very capital-intensive decision but went long way in ensuring the consistency in experience.
3. Most applications ignore the importance of last-mile information delivery. UBER does a fantastic job of providing visibility into the last-mile dispatching of car in real-time. This is the disruptive UX and certainly requires heavy engineering investment. The only place you witness such an experience is in the international flights.
4. While every transactional business was trying to bring the payments experience down to a single click, it was probably the first time I experienced a zero click payment interface. Having worked closely with payments industry, I can vouch that UBER’s payment experience is absolutely stunning. I believe that the absence of the explicit act-of-payment will become the de-facto standard going forward.

Growth View

UBER’s success depends not only upon how soon can it attract both sides on its platform, the drivers and the travelers but also on the levels of participation of both the sides. A higher participation from drivers is useful only if it results in higher availability, and consequently, lower waiting time for travelers. Similarly, a higher participation from passengers is useful to drivers only when it means lower down time and, potentially, the ability to charge higher prices, thanks to Uber’s much-maligned surge pricing. (Surge pricing increases rates as demand overtakes supply)

Each driver is unique and different and therefore is the weakest link in spoiling the entire experience for the customers. Therefore, driver’s onboarding is crucial to enforcing compliance, uniformity, and customer delight. A few challenges I can think of are

1. Background verification of each driver to establish trustworthiness
2. Training of each driver to deliver the same level of experience
3. Compliance enforcement at each node for every transaction
4. Quick turnaround for onboarding
5. Sophisticated commission computation and disbursal system
6. Transaction analysis to detect patterns for unfair practices
7. Fraud detection and resolution mechanisms

I have not signed up as a driver but understand that the driver’s onboarding process is entirely automated, seamless, and quick. Considering the complexity and current scale, I think the driver’s onboarding process is designed remarkably, which in my opinion is very crucial for leveraging the network effect.

From the customer onboarding standpoint it is important to lower down the barrier for trial and hence adoption. Assuming that the product is well designed and delivers aspirational experience, customers actually end up spreading the word-of-mouth leading to huge virality. Four important metrics that are crucial to understand the user acquisition story are

1. Virality coefficient
2. Virality Decay
3. Virality Cycle Time

I wouldn’t be surprised to know if the virality coefficient ranges from 0.5 to 0.7. Two schemes in my opinion would lead to such a high value

1. First ride free – This lowers the barriers for new users to try the service and talk about it.
2. Referral Bonus to both the parties – Both the referrer and referee receive $20 bonus credits on the first ride ensuring that each person invites at least one person.

Considering the virality decay is 50% overall, The Virality Coefficient above 0.5 would lead to a hockey stick curve growth, which looks pretty likely. My wild guess is that the decay would be more than 80% within 2-3 days for infrequent travelers.

The virality cycle time would be really low because the probability of newly acquired customer experiencing the service immediately would be low. I would imagine that the average cycle time could range between 5-10 days.

Renting a taxi is transactional in nature. As the need is fulfilled, users tend to move out of engagement loop. But the length of the transaction in this particular case is large, which works in favor as the customer spends more time thinking about the service. Traditional taxi renting experience clearly needed improvement both on customer onboarding and offloading. UBER’s entire transaction experience flow is single purpose and designed to engage customers extensively.

Customer Focus

UBER somehow makes you believe that it is in a constant pursuit of driving the travel costs down to zero eventually some day. The launch of UBERX signaled the effort and the launch of UBERPOOL was even more convincing. From the user retention standpoint, it gained the trust of busy professionals who demand great user experience along with a dependable service.

On the New Year eve, I received an email around how prices will be shot up around the peak load time. This proactive pursuit of informing the users goes a long way in winning the trust further.

Suggestions

I’d recommend two features that I believe would go a long way in retaining the customers

1. Onboarding duration accuracy – As soon as the nearest taxi driver accepts the request, the application flashes the approximate duration (t1) within which the taxi is expected to reach the customer. But that duration is not reliable as the net duration (t2) taken by the taxi driver could be X times higher than it first flashed on the screen. Because of this I don’t trust UBER in critical situations. Let’s say the application also flashes a static timer that computes the net duration to onboard the customer, and the driver is incentivized for reaching earlier than approximate expected time, it will significantly enhance overall onboarding duration accuracy. For the delay of more than 2 minutes over expected time, the customer should be compensated suitably.
2. People Discovery – It would be great to get the application social. If I can discover who else travels the same route within the half-mile of both the source and the destination, I may be willing to work around my travel time to leverage the UBER POOL benefits. This service can lock the users from going to any other similar service provider and shall hugely contribute to retention of existing customers.