Carts without horses | Hacker News Reader

Carts without horses

aaronkharris.com

120 pointssctb26 comments

Having lived in Japan for quite some time, it is sort of amazing how often companies come here and blow not insignificant amounts of time and money simply because they assumed their business model could cross the border without being detained and thoroughly questioned.

For example, a personal-transportation company pitched up in Japan offering better alternative to the traditional taxi, because they are "safe", "clean", and "convenient".

While this offering makes complete sense in most of the US -- where very different adjectives would be required to describe the average taxi experience -- it doesn't really fly in Tokyo.

Taxi drivers in Japan wear white gloves, which should give some idea just how clean the taxis are. The doors open automatically so that you don't have to touch the door handles. The same goes for safety and convenience, but more importantly, the taxi companies here do a solid job of serving the local population.

There is no adversarial relationship to exploit, and a slightly better app experience isn't going to turn the market on its head.

It honestly doesn't take much to be successful in Japan -- Fastly looks to be a great example of Doing It Right -- but you do need to start with the idea that it's a foreign market, and that the business model is going to be different than Back Home.

I think a niche approach could work in Japan. The two issues I've seen with taxis over there are price and supply/demand imbalances during off hours.

Payments is an especially interesting example to take in emerging markets. The delta between developed and emerging is often especially huge in payments and banking.

I was part of the founding team of a mobile payments startup SnapScan (http://www.snapscan.co.za/) in South Africa. We had to flip the "US" models around completely. Informal merchants often had no bank accounts and only feature phones, but many consumers had credit cards and smartphones.

We ended up giving QR stickers to merchants, notifying of payment success via SMS and depositing payments in an "instant" bank account that they could withdraw cash from ATMs without a card (just their feature phone).

Looking at how people pay in the US, I would think that our approach wouldn't have made any sense to someone who hadn't seen South Africa (or a similar country) first hand.

Isn't good design always specific to the environment in which it functions, though? Or is that something contested?

"Looking at how people pay on Venus, I would think that our approach wouldn't have made any sense to someone who hadn't seen Earth (or a similar planet) first hand." (sorry ;)

I think it's a spectrum.

"Looking at how people pay in Massachusetts, I would think that our approach wouldn't have made any sense to someone who hadn't seen California first hand." (practically identical)

"Looking at how people pay in the US, I would think that our approach wouldn't have made any sense to someone who hadn't seen Germany first hand." (probably mostly the same, but I haven't been to Germany recently)

"Looking at how people pay in the US, I would think that our approach wouldn't have made any sense to someone who hadn't seen New Zealand first hand." (Looks mostly the same on the surface, but NZ relies heavily on a system called EFTPOS)

"Looking at how people pay in South Africa, I would think that our approach wouldn't have made any sense to someone who hadn't seen Kenya first hand." (probably very similar, but from what I gather there are some differences. I haven't been to South Africa)

"Looking at how people pay in the US, I would think that our approach wouldn't have made any sense to someone who hadn't seen Kenya first hand." (very different. M-Pesa is king in Kenya)

"Looking at how people pay on Venus, I would think that our approach wouldn't have made any sense to someone who hadn't seen Earth first hand." (theoretical maximum difference)

Fun fact: Germany is very reliant on cash, because Germans have been traumatized by hyperinflation and depression etc., and their cash money is a symbol of stability.

I'm German and I don't even have a credit card, which is only occasionally a problem when 1. trying to book a hotel or 2. when buying stuff in US online shops. Number 2 is solved by Paypal, however.

You do have a debit (EC) card though, right? At least in Berlin you can pay with a debit card everywhere, on- and offline.

One also saw this in the developing world where many countries, lacking the existing telecommunications infrastructure based on landlines, skipped a step and jumped straight to mobile infrastructure. For a while some developing countries had mobile infrastructure and coverage that surpassed developed nations (one could argue that some still do, with no equivalent to M-PESA in developed countries.)

Well, in Norway Vipps (https://www.vipps.no/) is rapidly replacing cash for second-hand purchases, which were a stronghold of cash.

The main take-away from this piece is that applying the wisdom of developed world tech to developing world tech doesn't work. This seems to be a special case of the mistake that always seems to happen when dealing with the developing world. That is, applying our models to their problems, instead of understanding the problems from the bottom up (which just so happens to be the solution Aaron proposes.)

Thanks Aaron for writing this, it is a boon to society when people share their hard earned wisdom.

I hadn't even thought about it from the perspective of how the developed world relates to the developing across other problem spaces. That's a great way to think about it.

There's an interesting case to be made that we should look at when the rich countries used to be as poor as the developing world is today for inspiration of what can work.

Obviously, that's harder to apply to modern technology; but perhaps useful for governance issues.

Should be noted that M-Pesa wasn't a brilliant idea, it was the formalization of an already existing behavior in the market. That behavior was to pay for small things (like a drink at a bar) with cellphone minutes because cellphone minutes had an established value and were easily transferable between people. People were doing this already before M-Pesa.

That's actually true of almost every good business -- there is always a worse version already available, even if only through the "abuse" of an existing system.

> That behavior was to pay for small things (like a drink at a bar) with cellphone minutes

What would the bar manager do with 1 million minutes of talk time? [serious]

Presumably, the same things everyone else uses money for: buying groceries, rent, the necessities of life.

Sell them to other people.

You're not surprised that a bar manager manages to find something to do with more alcohol than he could possibly drink, right?

I'm not Kenyan, but South African, but have been to Kenya to look at mobile payments there. Are you sure about this?

My understanding was that M-Pesa started as a domestic remittance solution. Kenya doesn't have a well developed ATM network, so there was a great need for simple and secure domestic remittances (send money home to your family every week type use-cases).

The remittance solution replaced existing methods like sending physical cash with an "agent" (e.g. taxi driver) at high cost/risk or driving/walking very far to a bank branch.

Once the remittance use-case was established, payments was an easy addition, as there was already value flowing through the system.

Perhaps you mean to say that the "brilliant idea" was to make cellphone minutes easily transferable. This had to have happened for the first time somewhere, and it certainly wasn't in USA.

An inferior version of that is to trade the codes that come on the prepaid scratch cards before they are turned into `minutes'.

Though, the only benefit they have compared to cash is that you can transmit the numbers over the phone.

"Developing markets are a kind of mirror of the future" - this is why companies like Zipline (http://flyzipline.com/product/) are starting up in Rwanda, instead of trying to deliver tacos in the Mission.

This is so cool! Thanks for sharing!

That, or a lack of FAA regulations.

Well, and infrastructure. Very few places in the US are difficult or impossible to deliver to via roads.

As with anything, it's important to understand the consumer. You can't build a payment company for sub-Sahara Africa from your SF highrise.

I've been following the work of researcher Ignacio Mas on financial management in developing countries. He has a really interesting research and model on how people in developing countries (some of the research applies to unbanked/underbanked in US) view and handle money.

See here: www.ignaciomas.com

There is a naivete here that seems odd, especially if one is investing.

Cellular and wireless communications make more sense in the developing world than running copper/land lines (as well as in places like the former eastern block).

Part of the big allure of WhatsApp was it worked with SMS and was popular in regions where smartphones were the exception

Paying attention to markets, their restrictions and challenges, seems like something one should do before diving into making assumptions about investing.

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