I don't think these particular examples are that exciting. Rich people can already get this type of concierge service from existing places, like a personal assistant, virtual personal assistant [1], or a credit card concierge (you probably have one [2]). If you are spending enough money, getting somebody to help you isn't hard.
I still don't understand how the service would apply to the average person, or how it could apply enough to make lots of money. Average people really try to be efficient with their money, and don't pay money for that many things they can do themselves. With annoying tasks like laundry, there are economies of scale so you can actually provide consumers with better service for less money, which is a win/win. But with a concierge, you are always going to have to pay the concierge money, and will they really be able to provide enough expertise to be worth it? I'm skeptical.
As a person who grew up poor-ish [1] but is now reasonably well off [2], I have developed a little theory on why the market of make-your-life-slightly-easier-by-hiring-a-human-through-an-app services is booming so much right now. Everything from Uber to Washio, Handy, and Task Rabbit falls into this market for the purposes of my theory.
We are lazy. Very lazy. We think we're busy, and to an extent we are. We've been brought up by frugal parents.[3]
As a result, we don't know how to get things done for us. We feel bad hiring somebody to do something for us. We don't know how to handle the idea that we can afford to have people working for us.
Using an app makes this easier. It reduces the emotional impact of it all. You're just using an app after all, you're paying a company to hire a person to do something. You're offloading your bad feelings onto a company.
To top it off, we don't even know where to get someone to do things for us. We didn't grow up with an infrastructure of hired help, we grew up with an infrastructure and worldview of working for others. The idea of having people work for us is fundamentally alien.
Apps help.
[1] low middle class single parent kind of poor where you'd rather spend two days painting your own apartment poorly than pay a professional to do it. And by poorly I mean, have your high school age son do it (me).
[2] software engineer in San Francisco
[3] either because we used to be poor, or because we weren't the rich kind of middle class (here I'm making the distinction that upper class are people who don't need cashflow to support their lifestyle)
Maybe you value the relaxation of painting higher than having professionally painted walls. Maybe you don't value your time higher than what a professional in LA charges. Maybe you're just one of those people who would drive 5 minutes out of their way to save 10 cents on gas. (https://xkcd.com/951/)
My point was in the general idea, not in the specifics of my examples.
And it just felt more interesting to mention the wall painting bit rather than the bit about my mum shuffling money around various credit cards so we could afford groceries without having any cards canceled. shrug
Read the beginning of the article, was mildly interested. Kept reading about how he arbitrarily decided to book a helicopter ride and buy an expensive motorcycle through a texting service just to test it out, and was no longer sure if it was honestly a troll or not. Came here to see the comments, apparently was not a troll. Wow.
So the question I have here is, was he aware of how outrageously douchey this article comes off with the examples being off the cuff entirely over-the-top money blowing that he apparently regularly indulges in, or are rich people so in their own world that they don't even realize how normal people live and that writing something like this comes off as absurd to most people?
And another question that comes to mind too. He tried to make a startup that solved a similar problem a while ago, and mentioned this in the article. Are rich people seeking further conveniences for their already rather convenient lives entirely blind to the range of problems middle or lower class people deal with? Do they not care about these types of people and their problems because it simply not relevant to them?
I know this sounds very accusing of rich people, and while I am always personally a little shocked to see money squandered carelessly while so much suffering happens in the world, I honestly do not have anything against these people at all. Everyone has their own path in life and can and should make their own choices as they see fit. I am just honestly curious how it is rationalized, and the thought process surrounding it for people like this.
Edit: Did some googling and turned up these two quora answers:
The answers given are essentially "they make excuses for themselves and set up situations that rationalize it, such as 'I deserve this' and 'I could never make enough of a difference', etc." I don't quite feel satisfied with this. I would like to hear an answer from a legitimately very rich person still just out of curiosity!
I do not know Justin and I can't speak for him, but it seems to me that he has earned every penny that he has.
> So the question I have here is, was he aware of how outrageously douchey this article comes off with the examples being off the cuff entirely over-the-top money blowing that he apparently regularly indulges in, or are rich people so in their own world that they don't even realize how normal people live and that writing something like this comes off as absurd to most people?
Your comment is more absurd than his spending habits. You are suggesting that he should be socially restrained in one form or the other from spending his hard earned money. From exercising his financial freedom (yes, the ability to spend money without worry is a hard won freedom) because of your own perceptions of class narratives.
To apply your logic to you, do you sacrifice 100% of your disposable income because some children somewhere are starving? Do you go out? Do you drink when you go out? Do you believe that those dollars couldn't save the life of someone dying from AIDS in a developing country? If yes, then why don't you work to give away every single penny you have to that cause? Why do you buy that beer and by doing so condemn that person to death?
Clearly you can see the fallacy over here. Not only are these problems something that can't be solved by throwing money at them - people have tried and failed at that, but there isn't a fixed pie or some upper limit of the gross value that can exist in this world. That Harley he bought paid for engine research in one form and the creation of a supply chain that could be used to build engines that can be adapted to the conditions of rural Zimbabwe.
However, beyond those fallacies lies the idea of freedom I initially talked about. It is important for us to make our own choices. In other words, what Justin does or does not do to solve broader social problems is his and his decision alone. He pays his taxes. You pay yours. What he does or he doesn't do with his dimes is quite simply none of your business.
I don't think this answers the quoted question at all. the question isn't about whether the money was earned or not, or even how it should be spent. Rather it's about the doucheyness of writing about it.
It answers the core of the questions he raised and linked to: is it wrong for the rich to have luxuries?
> I don't think this answers the quoted question at all. the question isn't about whether the money was earned or not, or even how it should be spent. Rather it's about the doucheyness of writing about it.
So you're telling me that someone writing about how they bought a motorcycle and a chopper trip is so offensive that they need to self-censor or be censored?
He has the right to write this piece and you have the right to not read it.
Just jumping in here to back you up jpmoral. In fact, I said in my original comment that I am not trying to tell anyone how to spend money and its these peoples' own lives and they can do what they want, right in the last paragraph. So I hope nobody was offended here.
On the other hand, the first reply above actually answers the question. Notice that, while cloaked as a rebuttal to my initial comment, it was actually a string of defenses as to how the author rationalizes spending money for himself, others, or both, which was precisely what I asked for. Let's take a look at the points made:
- I earned this money so I can spend it how I want
- I should not hold back on spending money because it's my personal freedom
- Do you give away 100% of your money? If not, you are no better than me so who are you to suggest this?
- We have tried to solve worldwide poverty problems and failed many times, so it won't make a difference if I donate
- The money I spend on luxurious things is helping society as it creates jobs and trickles down the supply chain, so anything I spend is actually good for the world
- It's none of your business how I spend my money
Pretty decent answer actually, when it comes down to it. The answer is simply that people come up with a relatively consistent number of ways that they can rationalize themselves spending excessively, and from these rationalizations build their psychological defense. In fact, many of the points in his answer are exactly the same as the ones from the quora threads linked in my edit above.
Now, my next question is whether any of these defenses are valid. My preliminary research indicates that a resounding "no" is the answer, however, I'm going to continue researching and do a separate writeup on this topic, as it's fairly extensive. If anyone from here is interested at all let me know on twitter or something (@jescalan) and I'll link you when it's done. This thread is fairly buried by now though so I assume not.
So, Justin Kan has done well for himself financially, and used Magic for a bit of fun. But don't write Magic off as just a concierge for the rich.
Things in the past month I've used Magic for:
* Was in a city without Uber; Magic called a taxi to my location (and took care of payment)
* Got my car re-keyed with a locksmith
* Called a few restaurants/bars to try to find my lost wallet
* Called my doctor's office to figure out what the best insurance for me to get was.
* Delivered custom-drilled 2x4s at 9pm within an hour
* Removed a bunch of garbage (since we moved and had lots of boxes)
* Delivered an Apple Express within an hour
* I said "find me a nice restaurant within half a mile for 3 people available in the next hour", and they found and made me a reservation.
* Checked what time my parking garage closed (the hours weren't listed online)
* Called my upcoming hotel and arranged for a package to be delivered to my room.
There's a bunch more I've had them do. It's been amazing for things that aren't hard, but that I don't have time for.
I'm still trying to figure out what to use Magic for, but every time I do, it really is magical.
How much are you paying though? The service is undoubtably being heavily subsidized by VC money. This is the classic silicon valley model, a model I love, but there has to be a light at the end of the tunnel.
As noted in the OP, this also reminds me a lot of Exec, and Exec didn't work. In the post-mortem, JK makes a very interesting point:
> if a job request came in and there were no Execs available to run them ... we sent someone from the office to run the jobs ourselves. Unfortunately, this gave us a false sense that the quality of service for our customers was better than it was, as the average competence of our employees was higher than our average recruitable errand runners. [1]
This is a critical problem that any service business like Magic will run into. Training and quality becomes much harder at scale, and the more you have to pay for "Magicians", the more you have to charge. And if it costs too much money, it isn't "Magical" anymore. Yes, they have advantages over Exec because they can arbitrage less expensive labor overseas, but quality at an efficient price is still going to be a huge issue.
Everything on my list was either free, or would have cost me significantly more than the markup to Uber there and back (and that's not even including the cost of my time).
I thought these were great examples. He demonstrated that he was able to solve reasonably challenging, atypical problems with Magic, and that the service brought a lot of value to the table by being thoughtful (knowing to provide KBB reference values without having to be asked, being able to negotiate prices down on behalf of the buyer, having paperwork sent over by a driver etc). It's true that a lot of back and forth was involved, but they facilitated a process which would have taken days of effort on behalf of the buyer (buying the bike) via a few text messages. I personally was both highly amused and very impressed.
I wonder how the people handling the requests deal with the issue of whether inquiries are real or jokes (if customers ask for something extremely unusual or extremely expensive).
You have to hook up your credit card and pay for things as they're ordered and before they're delivered.
So the only real risk is the someone uses a stolen credit card when they first sign up.
Between some sensible prudence on Magic's part (limit transaction size for new users) and the banks' own fraud detection systems, the risk seems quite manageable.
I guess I'm also wondering whether they have to worry about offending or angering the user by misjudging whether the user is joking -- not just about the financial risk to the company.
I don't really understand why magic is that innovative. If you are a guy like Justin Kan you can pay(already have) an assistant to do all of these things for you with a higher degree of accountability and a lower threshold of friction. It was fun wading through Kan's experience spending an average Americans salary simply to test drive a new iphone app, and that illustrates why magic probably won't appeal to the average American.
Sure, I think magic is pretty cool. It is just a rather obvious startup idea and exists in various forms already. I don't think it can work for a few reasons:
1. There are already great sites like amazon, instacart, uber, lyft, eat24, doordash etc. They all have specialties and there is very little friction to use them, therefore there is very little value-add for most mundane things.
2.
> It's completely free to chat with Magic. When you order something, we'll let you know the total price so you can confirm it before you are billed. There are no hidden fees, and tip is included.
There could be a large amount of inquiries that do not result in purchase, however a real person will be looped in. Initially people will troll them or experiment and this will cost money for the company even when no purchase is made.
3. Doordash, Uber etc have the infrastructure to do this idea, do it better and achieve synergy. There are virtually no barriers to enter this space
4. Like many things in the sharing/on-demand economy margins are thin.
5. Naming your company Magic was stupid. Besides Magic the gathering, this word is way to generic. They are not at the top on SEO and I am sure there are many apps with variations of Magic in the app store.
6. Appeal. They need a lot of customers using the app a lot. I think many people in SV and NYC who are upper-middle - upperclass may use this app, but as I said before they will compete indirectly with many substitute products.
Things competing with Magic
1. Saving money calling a service directly.
2. Other concierges a person has for free such as with major credit cards, hotels, or through their professional affiliations. Many premium CC come with these.
3. Anyone who already has an assistant or employee that works for them directly.
4. Other companies invading the space (mentioned above)
They do need some better SEO or at least a better worded page title and description, but they are consistently in the top 4 results for "magic" on Google no matter what device/browser/profile I use.
Your whole thing is equivalent of someone walking into a museum, looking at something, then saying out loud to no one in particular... why is this here?
I am afraid I don't really understand what you mean. This is a start-up-centric community, discussing a companies viability and challenges seems reasonable. Admittedly my comment wasn't well researched or extremely cohesive, but I think I was able to get across some of the obvious problems the company will face. In my opinion those problems are likely insurmountable long term for magic.
edit: A museum often archives or displays a certain curiosity simply for the sake of preservation, and for its own sake. The market does not keep companies around with the same compunction.
I used Magic to have them find me a moving company that could move me from Mountain View to Palo Alto the next day and they delivered pretty much flawlessly. The movers they found me were skilled, cheaper, and available immediately as opposed to the ones I found myself. All in all, I was pretty impressed with the experience.
Meh. That's a lot of input that the author had to provide. It is responding to unstructured/unpredictable messages as well, which takes quite a bit of thinking by the author.
If I had to change a flight, I would guess I could do it faster on Virgin's website rather than through Magic. Same with the helicopter.
That was seriously cool. Many tech companies could learn much from them in terms of customer support. I understand that for these guys this is the product, but still, if you have awesome customer support, it will get you more business.
Around $2,460, at least[0]. Also, I suspect you pay for fuel and time although I have never rented a helicopter. There is also a fee from Magic for booking through them.
edit:
> All additional expenses will be passed on at cost landings, parking, late operations, overnight expenses or other charges directly incidental to the flight requested.
> Charter prices are one-way and don’t include Landing Fees from the Manhattan Heliports.
Outside of the Internet, every single time I have every seen "begs the question" used, it means "raises the question". TV, newspapers, magazines, radio, common speech. Every single time. Therefore, that's what the phrase means.
I have no idea where this American obsession with tying it to a technical term for a fallacy comes from, but I wish it would stop. It's as though every time someone referred to a ram, whether a male sheep or a battering ram, they were informed that "RAM means Random Access Memory. You're using it wrong."
Lots of undue whining in these comments... they can do plain boring stuff too, and a lot of the tasks are free from what I see if there's no purchase involved. Even purchases seem to be a low margin so it might be worth it if you're short on time/effort.
Instead of just proclaiming the future demise of the company why not actually try it out? I'm sure there are plenty of average people getting value out of it. Besides there are also several companies that are successful catering just to the rich. The only way we'll know if this company will work out is by using it and seeing what happens. And if they indeed are unsustainable, might as well get the free help while it's available.
I still don't understand how the service would apply to the average person, or how it could apply enough to make lots of money. Average people really try to be efficient with their money, and don't pay money for that many things they can do themselves. With annoying tasks like laundry, there are economies of scale so you can actually provide consumers with better service for less money, which is a win/win. But with a concierge, you are always going to have to pay the concierge money, and will they really be able to provide enough expertise to be worth it? I'm skeptical.
1: https://www.zirtual.com/
2: http://www.creditcards.com/credit-card-news/putting-concierg...