I really enjoyed listening to the podcast below from McKinsey on the future of air travel.
There’s a balance in the airline industry between sustainability, profit and convenience.
There’s always a tension between safety and future technology. We have so much data about current materials and designs to help keep safety records extremely low. Should aircraft manufacturers design an entirely new, super efficient aircraft design but the safety data is less mature?
Will the future of air travel be electric (unlikely) or pilot-less (more likely)?
The two McKinsey partners on the podcast provide insight from their previous careers as airline pilots, and now advising airlines.
There are some good “Tips from pilots” at the end (at about 28 minutes), where they describe jet lag, packing less, whether to get a window or aisle seat, and eating on board (or not).
Packing lightly reduces your carbon footprint. Every kilogram removed from personal luggage reduces the aircraft’s carbon footprint.
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Premier Inn Check In email – a good example of customer self-service
One of the features of “a digital project”, is that the end user can become self-sufficient without needing to call the organisation offering the service or product. We call this self-service.
The first Internet services had a thin veil of self-service features, enabling companies to experience the cost savings of letting users perform common tasks.
Once this Return On Investment was proven, one of two things happened. Many organisations left the systems alone, stopped any further investment and patted themselves on the back.
Other companies redesigned the service to allow the maximum possible self-service touch points to maximise the future return on investment. They redesigned the self-service experience from the start. Continue reading Designing Self-Service From the Start→
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Agile London – worth attending if you work in software development
This evening I went to the latest Agile London event, hosted at Thomas Cook, at a supremely convenient location about quarter of a mile away from the Endava office.
Our host for the evening was Jesus Fernandez, the Development Manager at Thomas Cook. In a concise introduction he described how Thomas Cook has been consolidation pretty much everything – from its management team to the brands it was selling, to its technology platforms.
Don’t expect any creative thinking time from this environment. (Credit: John Seb Barber)
When we present our innovation process or new ideas for clients, one of the most common first questions is “How do you think like that?”
This applies to all companies, from small start-ups to very large financial services organisations.
When the question is asked, the rest of the audience often pick up their pens as though we’re going to answer with a poignant, silver bullet answer. But as soon as we do answer, you can see the disappointment in everyone’s eyes.
I’m sorry, but the answer is much simpler than they expected.
Uber – an example of how mobile apps are transforming industries that the web couldn’t reach
I’ve started using Uber in the last few days, and it’s transformative to the taxi industry. It’s one of those concepts which makes you think “I wish I thought of that first”. But not everyone agrees, and unfortunately for them, that resistance is probably one of the success factors in any consumer digital transformation offering.
In essence, Uber is a mobile app to call a taxi. It replaces the call to the minicab/ taxi office, and provides more functionality than the old model, because as soon as you call a car, you can literally watch that car drive towards you on a map. Continue reading Isn’t Uber super?→
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I’m writing this article at 35,000ft above sea-level, on a flight from London Heathrow to Atlanta. Before taking off, I sat in the marvel of Heathrow’s Terminal 5 building watching MotoGP on my smartphone, in what looked like an immaculate resolution.
My daughter on Ben Nevis during the summer – with a view like that, who else would prefer to check their phone?
At the start of the summer, I took most of the family and some friends to Fort William to climb Ben Nevis, the UK’s highest peak. Whilst the 2001 census reported that Fort William has only 10,000 people living in the town, I suspect there is regularly the same number again in tourists and visitors. Whilst in Fort William, my phone hardly had any reception. In fact, my mobile hardly worked north of Glasgow. Other members of the journey were on different networks, and coverage was also patchy across the group. Continue reading The digital divide in the UK→
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Airbnb’s investors have reportedly pushed the company’s valuation to over $10bn, leading some industry commentators to claim that this type of valuation proves we are in a second dotcom bubble.
Remember, the first dotcom bubble had many weak business models where pretty much any company that had a domain name was worth billions.
This time round, there are some sound business models, which are disrupting industries not rebadging it. Airbnb is a disruptor, and needs to be examined before we come back to the question whether we’re in another bubble.
There was a time when I thought that the Internet spelt the end for intermediaries, or third-party agents. Surely, I imagined, users would go and transact direct with brands – from flights to banks, from insurance to mobile phones.
Agents have comparison engines to thank for averting disaster. Comparison engines finally showed the added value that agents offer.
Until comparison engines, third parties had been purely introductory agents. Think of a recruitment consultant – they are pairing together, or introducing – a candidate with their potential future employer. Estate agents do a similar role. And the Internet looked like it would disintermediate the middle man by offering a direct service.
Along came comparison engines and aggregators (on the Internet there isn’t much of a difference). Here we could see more choice, price comparisons, and feedback from other users.
Travel agents are still having a tough time economically. In the travel sector, the real winners have been startups and companies which have completely transformed themselves into a digital company.
We’re seeing the same story across many other industries – in retail (think of Amazon!), recruitment, real estate and finance. Finance is particularly interesting because financial services organisations could become “utilities” where customers go to a third party agency for a financial product (e.g. a loan), the cheapest one is shown and the user goes through to complete the transaction.
This is already happening with the insurance market – Compare the Market and other comparison engines have bigger brand recognition and fundamentally, loyalty, than the insurance companies it passes business through to.
Today’s question is whether insurance and financial companies want to be, or mind being, seen as utilities or value-add services. To answer this, it would be interesting to see the transactional statistics of insurance aggregators – to compare (forgive the pun) whether customers compare insurance companies and then click on the companies that they recognise.
If users are selecting the insurance companies which aren’t easily recognisable, it’s a signal that the industry has already turned into a utility model, and agents are here to stay for a while longer.
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My view of the future of the Internet is that many free apps and sites we currently take for granted will soon charge small amounts (nanopayments). I was discussing Facebook with a friend recently who said they won’t join Facebook until Facebook pay people to join. His point of view is that Facebook make their revenue from user generated content (UGC), so they should pay users for that content. It’s an interesting point.
One of my favourite user generated content websites is TripAdvisor. In fact, when I go away from home both with the family and on business travel, I almost always review the place I’ve just been to. And just as importantly, I usually review the place I’m going to on TripAdvisor before I book.
Financially, TripAdvisor is doing well – in revenue growth, profitability and cash flow. According to Yahoo!, the financial highlights are as follows:
Financial Highlights
Fiscal Year
Fiscal Year Ends:
31 Dec
Most Recent Quarter (mrq):
31 Mar 2013
Profitability
Profit Margin (ttm):
25.74%
Operating Margin (ttm):
38.46%
Management Effectiveness
Return on Assets (ttm):
17.24%
Return on Equity (ttm):
36.14%
Income Statement
Revenue (ttm):
809.17m
Revenue Per Share (ttm):
5.71
Qtrly Revenue Growth (yoy):
25.10%
Gross Profit (ttm):
750.89m
EBITDA (ttm)6:
324.35m
Net Income Avl to Common (ttm):
208.26m
Diluted EPS (ttm):
1.45
Qtrly Earnings Growth (yoy):
29.50%
Balance Sheet
Total Cash (mrq):
406.14m
Total Cash Per Share (mrq):
2.83
Total Debt (mrq):
391.31m
Total Debt/Equity (mrq):
48.90
Current Ratio (mrq):
3.35
Book Value Per Share (mrq):
5.58
Cash Flow Statement
Operating Cash Flow (ttm):
253.01m
Levered Free Cash Flow (ttm):
193.45m
TripAdvisor’s business model, which should be called UGBM (User Generate Business Model – I just made this up), demonstrates what my friend was describing – users such as me, providing reviews of where to stay, and earning TripAdvisor literally a couple of million dollars per day.
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