Platform Innovation // Blog

Uber Eats’ Saber Rattling and Snapchat 2.0 FTW

The past week has seen a lot of activity from social media platforms: Twitter, Instagram and Snapchat all rolled out significant product updates. However, Snapchat scored the largest victory. Over the past couple years, Snapchat has not been afraid to take big leaps with their product. Their rate of iteration is much greater than that of their social media competitors. They have certainly had failures like Snapcash, but Snapchat 2.0 will propel them into the social media platform to watch in 2016.

Snapchat is two platforms: a chat communication platform AND a content platform. When Snapchat first started, it was just a messaging app with disappearing messages. When they launched stories, they added a 1:many consumption model instead of just 1:1 in messaging. This marked their evolution into a content platform. A content platform has different measures of success than a messaging platform. Content platforms want to create stars and the main success of a star is fame. When people build a following and become famous on your content platform, you’ve reached a significant milestone.

Within Snapchat 2.0, the auto-advance feature addition to the stories side of the platform is particularly key. The user experience of consuming stories has been substantially improved. Before the update, users would click on a specific person’s story one-by-one. Since producers can see who watches their stories, consumers have an implicit hesitation to view certain peoples’ stories. Furthermore, consumers would have to wait for stories to load and the process took time to consume a large variety of peoples’ stories.

Post the update, Snapchat has effectively product hacked the news feed. Instead of scrolling through multiple posts like on Instagram of Twitter, consumers have an “endless” feed of content from the moment they enter the first story. This will most definitely result in additional consumption. And, as a result, should motivate producers to create more content! That’s some positive network effects folks.

Let’s transition to service marketplaces. Last week, Uber Eats shed its “beta” and launched its own full-fledged app. Uber handles the delivery of the food unlike Seamless Web/Grubhub. But, Uber has gone the extra mile to ruffle the feathers of its competitors like Caviar and Postmates: free delivery and no fees. Is this sustainable? No. Is it awesome and making me eat too much? 100% yes.

Postmates just launched its Plus Unlimited program this week. $10/month and you get free delivery on orders over $30 at select stores. And, no material changes out of Caviar or Doordash (even though Doordash just raised $127 million last week).

It’s going to be an exciting time in the on-demand food delivery space. Eventually, a modern monopoly will arise from the dust. However, in the meantime, consumers and producers will benefit with subsidization from platforms looking to gain an edge.

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