Business Unusual

The businesses that boomed and went bust on Business Unusual

There have been 150 editions of Business Unusual now, so it makes sense to see which unusual companies went on to become normal ones and which ones failed to dent the universe.

Uber

The first episode looked at Uber. Back in 2015, the company was a shining example of disruption, innovation and the gig economy. It spawned countless comparisons to other services calling themselves "the Uber of…".

Since then, they have faced significant resistance from regulators, incumbents, competitors and even customers.

Issues both internal and external have seen the founding CEO step down and press coverage reflect failures as often as successes.

The gig economy has shown itself to have serious drawbacks even though it has resulted in changes to how labour can be contracted and engaged.

Uber's expansion and valuation have been incredible but ultimately it is still not profitable. It has risen to over $70 billion but is trading at about $62 billion now. The battle to be the dominant player in China resulted in an agreement to withdraw from the country but take a stake in the local competitor Didi Chuxing. They sold their stake in South East Asia to local rival Grab and a merged with its Russian competitor Yandex Taxi.

Despite all the issues, hailing a taxi will never be the same again thanks to their achievements in just nine years.

Google & Facebook

Facebook remains unrivalled for size and not only has more users than any single nation on Earth, but it also generates more ad revenue than any other media company. It is only eclipsed by the other ad giant Google which celebrates its 20th anniversary this month.

20% of all advertising goes to these two companies displacing print, radio and TV as the principal destination for ad sales with the largest share now firmly spent online.

Both have seen some significant challenges. Even as the episode on Facebook in February 2016 described the incredible success of Facebook, the seeds of its most significant scandals were playing out with false stories being posted and paid to be distributed on the network. It did not take enough care to avoid user data from being scooped up and sold. Cambridge Analytica would boast of its ability to influence people via the platform and win elections. US authorities have charged a Russian company that tried to affect the outcome of the US election in November 2016.

Since then there have been promises to improve and tackle false information on the platform. The CEO Mark Zuckerburg has appeared before US and European regulators wanting to know what Facebook will do to fix the situation. The question is a fair one but does not have a simple answer.

Facebook is built to allow people to post and share what they want. No surprise that within the 2 billion users some would want to push the boundary or use the platform for their own agenda.

Facebook is planning to use as many as 20 000 moderators to respond to the over 2 billion pieces of content posted daily. In time, it is hoped machines will do more of the detections automatically and hide content and suspend users that abuse the system.

Balancing open communication with controls for abuse, bullying, scams and propaganda will not be easy, but should they manage it, it could be considered as significant as anti-biotics was to treating bacterial infections.

Facebook's other bets on free internet access and the use of flying base stations have not progressed as planned. The Oculus, a virtual reality goggle was to be the next killer project but has not delivered yet while competitors are releasing similar if not better options.

Google’s issues related more to it being able to grow beyond the reliance on search as its primary revenue. It happens to be worth almost $80 billion, so not the worst problem to have, but its other bets on driverless cars and even cloud storage and processing have not come close to competing with the ad business.

Driverless Cars

Uber and Google have long-running projects with Tesla and most of the major car manufacturers working on commercial versions. The episode on the future of driving in April 2017 predicted that children born after 2012 may not even be allowed to drive once they turn 18.

The ability to get a car 95% autonomous appears to have been the easy part, the challenge in the last 5% relates to the weather conditions where fog, snow and even heavy rain can stop a driverless car in its tracks. One study using self-driving electric vehicles were stumped by arrogant seagulls standing on the road and not being afraid of the silent vehicles.

Being hacked and remotely controlled remains a risk as does the ethics for how a robot car should react when it can’t avoid a collision. Should it protect the most humans or just the driver?

As with most innovation, the incremental advances appear small and move slowly, but when considered over the scale of a decade it is remarkable how quickly it actually does advance. The latest developments will rely on 5G for speed and accuracy, new scanning models that can look beneath the road surface and the ability to not only use cars but buses, trucks, ships and even farm vehicles.

The blowouts

Two, Bitcoin and Theranos, in particular, were subject to the worst of the Hype Cycle.

The Hype Cycle is a model by Gartner that tracks how new products are received and mature. If the product appears to be more like magic than technology then the hype around expectations may exceed reality. When reality bites, the products are destined for a roller coaster ride that may end in disaster.

Theranos promised to do something quite normal - test blood. The magic appeared to be that a portable machine could run a battery of test with just a pinprick's worth of blood.

It propelled the founder Elizabeth Holmes to be regarded as the youngest self-made female billionaire. Investors and companies were eager to see more of this modern day miracle, unfortunately, what it promised has only been seen on an episode of Star Trek. The bad news began to pile up, and earlier this year she and the company were ruined.

Bitcoin is down, although hoddlers will say it is not out. Hoddlers are the fans that believe in the long-term value of the token and are not planning to sell despite it having lost 75% of its value since its high in December 2017 when it was worth almost $20 000 each.

Since then over two-thirds of the funds invested have been withdrawn or lost.

Had you bought it when it was first covered on the show on 27 January 2016 though, your investment would still be up over 1500%.

In the end, Bitcoin is not solving a big enough problem and has major drawbacks for speed, volume and energy consumption. Despite the drawbacks, there are over 1000 cryptocurrencies claiming to solve all manner of financial problems. While the currency element may not be the big winner now, the ability to log anything in a robust, public and transparent way will lead to significant changes in the future.

There are many more that cover everything from Elon Musk’s SpaceX to the world’s richest CEO Jeff Bezos and Amazon. There are episodes of how our phones continue to not only become more powerful but personable even as we struggle to maintain human contact or look as good as our selfies.

For many of us, these innovations are no longer business unusual, but that does not mean there is still lots of disruption ahead, but now at least the disruption is the new normal.

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This article first appeared on 702 : The businesses that boomed and went bust on Business Unusual


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