Peter Thiel is one of Silicon valley’s most successful investors and one of the first outside investors in Facebook in 2004 and co founder of Pay Pal in his new book Zero to One, created from lectures he gave in Stanford to aspiring entrepreneurs.
In the book Thiel says if you want to create a new company you should look at “What valuable company is nobody building?” If you don’t have an answer, you should do something else.
Thiel does not invest in companies that want to beat the competition he reckons that this is what every company should avoid.
Thiel says “The true goal of every start-up is to become a monopoly, a company so dominant in its technological arena that it can give investors enormous financial returns with cash to spare for the intensive R&D that can ensure its long-term viability”
For example a good friend of mine Niall Mckeown has created the world’s most advanced digital strategy platform called Direction. Direction helps companies disrupt instead of becoming the disrupted within their industry.
Ryanair disrupted the aviation industry by not trying to compete with its competitors “legacy carriers” but by offering something new and revolutionary low cost A to B air travel in the early 90’s.
The gap in the market exploited by Ryanair in the early days is now becoming more competitive. What should Ryanair do? Innovate again.
I was previously head of Digital Marketing for Ryanair reporting directly to Michael O’ Leary and part of my brief was to look at the market and see what new technologies were out there and what other companies were doing well and report back with ideas.
One light bulb moment I had was while attending a lecture in UCD on Subscription Models in March 2014. I thought Ryanair could create a model like this. I presented the below idea to Michael in April 2014.
“The best marketing strategy is the one your competitor is unwilling or unable to follow”
Example based on family of 4, couple and single flying 2 a year (4 sectors)
- Predictable monthly cost
- Spreads cost over 12 months
- Fly anywhere in Europe
- Cheaper than traditional booking
- Simple Website/App
- Simple sign up form
- Ease of Booking – Dates/destination/passengers
- Slide scale up and down for number of sectors required each month
How it would work
- First month free
- Fly twice a year to anywhere in Europe (4 sectors)
- Minimum 12 month sign up (rolling contract)
- Flights must be booked 21 days in advance
- 30 day cancelation
- Revolutionary Idea
- Make money on unused sectors (similar to gym model)
- 20% margin on break even
- First mover advantage
- Potential to gain critical mass at the right price point
- People are use to subscription models
- Wipe out other airlines as they cannot compete with model
- Wipe out scrappers & compassion sites as price is longer issue
- Predict revenues 12 months in advance
- Build brand loyalty
- Model could be used for business traveller also
- Still generate revenue from in-flight retail, allocated seating etc
- Offset seasonality of earnings
- Potential to lose revenue from peak summer season
- People who join could fly and then cancel
- Risk we initially get breakeven point wrong
- Risk people only fly high cost routes
- Short, medium and long haul model could be used to counter this but makes offering complex
I also previously worked for a healthcare company in Dublin with the largest GP network in Ireland.
The GP model in Ireland is still very much a cottage industry with GP’s often using the side of houses as surgery’s. It was also illegal to advertise a practice up until 2009.
My idea here was to create the first brand of GP’s in Ireland similar to the Smiles dental model and focus on preventative medicine as well as the traditional reactive model.
I proposed to the CEO that we do a complete overhaul of the brand and the practices themselves automate appointments and payments and introduce Face Time/Skype appointments and use 21st century technology to treat patients.
Gamification of the news
According to Gartner by 2015, 40 percent of Global 1000 organizations will use gamification as the primary mechanism to transform business operations.
How Independent.ie could use gamification mechanics:
Upon log in users could be given a badge/rank and limited virtual currency “Gems” users could achieve higher rank and earn more badges and gems by completing certain tasks engaging with the news, submitting stories, comments/likes or social shares or by following other users.
Users could use gems to create and build their own blog or micro sites, budding journalists/bloggers or business owners can use gems to purchase parts of their blogs and build them up over time but once their gems run out they will have to buy more or carry out certain tasks to earn more.
Users could purchase Gems to:
- Submit news stories/articles
- Purchase advertising/traffic from main site
- Purchase blog upgrades
- Purchase e-papers
Benefits of Gamification for users:
- Social Connectedness
Benefits for Independent.ie:
- Increased time on site
- Increased visits
- New revenue streams
- First mover advantage
To date none of these models have been implemented and just last week Air Asia has announced a yearly subscription model.
When Steve Jobs was asked how will you continue the success of Apple into the future he summed it up by saying “ we intend to never stop innovating”
I now run my own agency and face similar problems on how do I differentiate myself from the other hundreds of companies offering similar services all claiming to be the best. I have narrowed the field somewhat by focusing on healthcare and travel but more needs to be done.
If you want to earn a living offer a service many already do, if you want to be rich create a company nobody is building.