1. Child care in
the on-demand
economy
Current Topics in Marketing
October 27, 2015
Rishi Dean
Sittercity.com

2. Case Readings
§ HBR Article: Strategies for Two-Sided Markets (Oct 2006)
§ Steve Schlafman (RRE Ventures): Uberification of the US
Service Economy
§ MIT Sloan Management Review: Strategic Decisions for
Multi-sided Platforms (2014)

3. Today’s Objectives

4. 1) Underlying market dynamics

5. 2) Practical framework

6. 3) How to think like a pirate

7. Class Agenda
1. Market dynamics & case preview
2. Academic underpinnings
3. Practical frameworks
4. Case deep dive
5. Presentations & Feedback
6. Epilogue & Closing thoughts
3:05-3:15
3:15-3:30
3:30-3:45
3:45-3:55
4:15-5:15
5:15-5:30

8. The disruption of the
global service economy

9. How many of you have heard of Uber?

10. How many of you have heard of Uber?
…has anyone not used Uber?

11. Let’s rewind 4 years (almost) today

12. Well, it was actually more like this…

13. 63 countries, 300+ cities
Market creation vs. market share
5 years to $60-70B valuation*

14. Playbook for next generation businesses
§ Collision of underlying tech trends
§ Integrated consumer experience
§ Labor force changes

15. Welcome to the new, “uber” inspired economy
§ Mobile apps that
aggregate consumer
demand, then fulfill
via offline services
§ Delivering a “closed
loop”, end-to-end
experience

16. Incumbents innovate via incremental improvements
Focus on improving
existing (premium)
products
TIME
QUALITY
minimum
customer
need
sustaining innovations

17. The “next big thing”, looks like a toy at first
Initially, “cheaper”, “low quality”,
“just a feature”, or “unattractive
market”
TIME
QUALITY
minimum
customer
need
sustaining innovations
disruptive
innovations

18. “Good-enough” is the tipping point
Eventually reach a flashpoint
where they begin eroding share–
focus and depth accelerates this
TIME
QUALITY
minimum
customer
need
sustaining innovations
disruptive
innovations

19. Meanwhile, in Chicago…

21. Sittercity invented the online child care category
6MM caregivers
“Demand-side” subscription model
“Matchmaking” vs. “transactional”
3MM parents

22. …but also created a competitor in the process

23. …who was about to get bigger

24. Can we “uber-ify” the child care vertical?
On-demand mobile
services to
“professionalize” the
supply and to participate
in the transactional
market
$50B annually
5MM “entrepreneurial
sitters”

25. Marketplaces are the
foundation of the
internet

27. The internet makes markets efficient
§ Aggregate long-tail supply and demand
where offline would be inefficient
§ Tools to seamlessly communicate
§ Platform-mediated payments /
transactions

28. Dominant Offline
“Create & push”
B2B / B2C
Dominant Online
“Facilitate interactions”
P2P / B2B
Enables “Platform” vs. “Pipe” business models

29. Examples of Platform businesses
Strategies for Two-Sided Markets, HBR ARTICLES | Thomas R. Eisenmann, Geoffrey Parker, Marshall W. Van Alstyne | Oct 1, 2006

30. …almost every massively
successful tech business is
a platform, many of those
are marketplaces

31. And the market has proven this
§ ~20 years of consumer internet
§ 24 public companies >$1B x 2 for
acquisitions
§ 140+ private “unicorn” companies
§ 2/3 are “platform” businesses
Source: James Slavet, Greylock

32. Academic
Underpinnings

33. 2-sided market incentives
Demand Supply
1) Initial Adoption 1) Initial Adoption
2) Same-
side
Effects
2) Same-
side
Effects
3) Cross-Network Effects
o Increase in liquidity Cross-side Effects o Increased liquidity
Platform
Strategies for Two-Sided Markets, HBR ARTICLES | Thomas R. Eisenmann, Geoffrey Parker, Marshall W. Van Alstyne | Oct 1, 2006
o Why do seekers initially adopt? Initial Adoption o Why do providers initially adopt?
o How do more seekers help one
another? Same-side Effects o How do more providers help
one another?

34. Keys to building
P2P marketplaces

35. I) Select an attractive industry
i) Big transaction potential
ii) Ripe for disruption
iii) Inherent network effects

36. 2) Catalyze the network
iv) Providing instant utility
v) Liquidity: finding what you need
vi) Capturing commensurate value

37. 3) Protect & grow the platform
vii) Control the customer lifecycle
viii) Cost-effective expansion
ix) Cultivate competitive lockout

38. x) Leverage emerging dynamics

39. Marketplace Design
Patterns

40. Not all marketplaces are created equally
Transaction initiator § Buy-side, sell-side, hybrid
Transacted Item
§ Product or service
§ Commodity or high-consideration
Market scope § Horizontal vs. vertical
Revenue Model § Subscription vs. transaction

41. Commodity Regular Low
Service Type
Frequency
Consideration
http://rdean.me/marketplacematrix
Type 1:
“Uber for X”
Commodity Ad-hoc LowType 2:
“Long-tail commerce”
Experiential Regular LowType 3:
“Recurring Relationships”
Experiential Ad-hoc LowType 4:
“Delegation & Indulgences”
Commodity Ad-hoc HighType 5:
“Big-ticket commerce”
Experiential Ad-hoc HighType 6:
“Episodic significance”
Experiential Regular HighType 7:
“Trusted Advisors”

42. Initial Search
Trust barrier
Liquidity / Supply-side curation
Ongoing Management
Reuse incentive
Disintermediation
2 keys in platform design and management

43. Your Turn…

44. Describe how you (Sittercity) will disrupt the child care
vertical, by leading it into the on-demand economy
Provide a brief outline of the key dynamics of two-sided platforms (HBR article) you would
leverage to ensure initial adoption (overcoming chicken & egg dynamics of establishing trust),
and to ensure long-term sustainability through network effects (e.g. staying on platform)?
ALL
COMPETITION: Discuss why your offering will win, and guard against imitation from
competitors (Care & UrbanSitter)?
4
1
ADOPTION: How would you help consumers overcome the initial “trust hurdle” to adopt
Chime at-scale?
2
RETENTION: What tactics would you use to keep consumers using Chime, and avoid
“disintermediation” – to the point where users would recruit their personal networks?
3
GROWTH: How might Sittercity “unlock” non-vetted supply, in order to scale Chime more
quickly and reach new geographies, while balancing the need for quality & safety.
PRODUCT: What relationship should the new “Chime” product have with the core Sittercity
business line?
5

46. Epilogue

47. Disrupting yourself is hard
1. Core revenue streams
2. Comfort & complacency
3. Cost of doing business
4. Controls over operations
5. Culture / lack of precedent

49. Say hello to…

50. What do you need?

51. Choose one of our
amazing sitters…

52. Easy payments…

53. Stay connected
while you’re away…

54. Rebook your
favorites…

56. P2P marketplaces can reduce “economic
slackness” (i.e. unemployment)
§ Change lives for parents and children
§ Provide meaningful economic opportunity
and empowerment to sitters

57. Child care is a national problem
§ 71% of moms work
outside the home
§ Only 1 in 5 U.S. kids live in
a house with a married
stay-at-home mom
§ 61% of kids 0-5 yrs are
cared for by adults other
than their parents

58. Not Affordable
More or
less
Affordable
Easily Affordable
25% of
households
<5% of households
Who we can serve today

59. Not Affordable
More or
less
Affordable
Easily Affordable
Who we can serve today

60. Tomorrow: “Everyone’s Private Nanny”?
More or less
Affordable
Easily Affordable

61. Current Topics in Marketing
October 27, 2015
Rishi Dean
Sittercity.com
Child care in
the on-demand
economy