Description: Mr. Rosedale, 43, is back with a new business called Coffee and Power, where people buy and sell most any kind of task, like making Halloween costumes or writing sophisticated software.
Source: www.nytimes.com/
Date: Nov 6, 2011
To prove his point that a work exchange could function, Mr. Rosedale built the software for his new company by hiring programmers from around the world and dividing up the work into about 1,600 individual tasks, from setting up databases to fixing bugs.
“We think it’s the new model for how software will be written,” he said. “It worked so well that we decided to extend it to all sorts of work.”
Coffee and Power has storefront space in a nondescript part of San Francisco’s Market Street where people can drop in and offer to do jobs or hire people for tasks. They can even start working together on the spot. Mr. Rosedale works upstairs, along with a handful of full-time staff members. READ REST OF STORY
Questions for discussion:
- What is the business model and revenue model for Coffee and Power?
2. Do you see this business model giving any company a long term competitive advantage? Explain
Andrew Douglas
Coffee and Power is an intermediary that allows buyers and sellers to come together, with a twist. It is used to buy and sell small tasks rather than products or services. Larger jobs are broken up into smaller individual aspects of the job and people pay for these to be done, rather than paying someone to do the entire job. These transactions are done with a virtual currency and Coffee and Power charges 15% to convert this back into real money for you.
I do not think that this can provide anyone with a competitive advantage because it is easy to duplicate either the business model of the site itself, or another company using this service to reduce its costs. Anyone can make a website like this, and if it starts to become a huge success, many people will. The entire site is completely transparent, allowing people to see what everyone else is working on. Not only that, but if a company discovers that a competitor is uses this service to outsource a certain aspect of its operations at a reduced cost, not only could they use these services too, they could also hire the same person to do it and receive the exact same level of quality as their competition.
Enoch Dugbatey
I think it is a smart and unique business. Doing almost all the selling and buying task online will help save people the money and the time to commute from one place to another to do small task like buying a Halloween costume.
Jian Li
Business like Coffee and Power is a third party business which provides a platform for other business that offered a task and people who can work on it. It has many advantages and disadvantages. The advantages are: first, this type of online service makes the world smaller by simply typing and clicking, it makes connection between people from different continent of the world. Therefore, there is no distance barrier between the job offers and the workers. Second, this platform gathers numerous information which gives more opportunities to both of the offeror and job needers, by having large amount of information, both sides can make better compare ration and make the best choice. Besides the large quantities, timeliness and sophisticated programming increase the quality and the efficiency. However, there are some disadvantages: first, this platform only works well when it is well known and has a large amount of users, otherwise, both the offeror and the workers won’t get want they want. Second, since it is a virtual world, more issues may rise unless there is a highly secured rules and standard. The sophistication of the platform becomes crucial. Third, the idea of this type of service is not easy to copy; there will be more competition in the future. Moreover, as the development of technology, it is possible that substitute will exists soon.
Brad Zhang
The Coffee and Power is an intermediary which is just like Task Rabbit, it allows customers to exchange jobs online. So it is a customer to customer (or C2C) business model. The difference between Task Rabbit and Coffee and Power is the way of payment. Task Rabbit, as far as I know, is free; the money transaction is only between customers. But Coffee and ower actually charge customers to use its platform to do business, which is appropriate. Because Mr. Rosedale did spend a lot money on building it.
I do not think this kind of websites give pressure to any big companies. They just offer a platform to customers for doing one-shortterm-contract jobs. Big companies usually do business that has large number of money or long term contract. Their fields are different. Moreover, I think big companies can even cooperate with these small companies whenever they need to hire some temperory employees to do some simple and short work.