As it might not be the “average” business model transformation we have witnessed over the past years, I firmly believe that this concept deserves a spot on a website that calls itself; Consumer Value Creation. I am not talking about another application that helps us find hedonic goods or that makes our life just a bit more easier. I am talking about a system that can shape our future by providing an incentive to transact and use green energy. I am talking about SolarCoin.

What is it?

The SolarCoin is based on the same concept as its older brother the BitCoin, namely blockchain technologies. After having experienced a difficult phase in the Gartners’ hype cycle, the potential of the Bitcoin has been higher than ever, and that is not only because of the growing demand from China. And yes I am aware of the recent plunge of the BitCoin. However, this is only a matter of growing pains (BusinesInsider, 2017).

Since it is evident that the middle class is not putting up longer with third party (political) power, the potential of these blockchain driven concepts are enormous. In case of the SolarCoin, anyone that produces solar energy could claim one SolarCoin per megawatt. Since the coin is currently worth around €0,11 it does not seems that attractive. However, it is expected that the coin will hit the €30 in the next couple of years which will provide people an incentive to start producing green energy (MO, 2016). Figure 1 shows the grant process of the solar coin.

 

Efficiency Criteria

When assessing the current energy market, several problems come to mind. Of course, the major problem is the hunt for clean renewable energy, but also issues like third-party seizure, taxes, tracking, transaction costs, risks and theft should not be underestimated (Stanford, 2010). As these issues are widely acknowledged, the number of start-ups in energy land, which are using the SolarCoins as a currency, is booming. Power Ledger, for instance, is a Perth start-up that eliminates the current difficulties with one single solution. According to its CEO, this company aims to enable producers and consumers to trade their (green) energy directly, saving money, hassle and maximizing the use of rooftop solar. Carros (a village in southern-France) is another example of the use of blockchain in renewable energy. Note here that (1) not a single energy company is involved, (2) since it is private generated energy, initially no taxes will be paid, (3) there are no transaction costs, (4) risks and thefts are minimized and finally (5) because of this, people get stimulated to use and generate rather green energy instead of traditional energy (Cleantechnica, 2016) (GE, 2017) Figure 2 shows the village of Carros as an example and provides a simple overview of how this system could be designed.

Peer-to-Peer

Despite the fact that this could be a silver bullet for our energy problem, I believe that the traditional incubents will keep on playing a role in the market. It is likely that companies like Power Ledger and currencies like SolarCoin will not replace anything. Where the blockchain technologies cover the transaction part of energy, it will remain unknown how questions like “Did those people deliver the power they promised they’d deliver?” and “Did they consume the power they promised they’d deliver?” would be answered (Microgridknowledge, 2016). The utilities industry is conservative for a reason; people are desperately relying on it.

Agencies like SolarCoin, Power Ledger and Carros are changing the way we deal with energy. Emphasis will mainly be put on the rich and middle-class communities since this is another form of peer-to-peer trading. In that perspective, the growing middle class in Asia and Latin America might provide us with a solution in terms of climate change instead of a problem.

References

https://microgridknowledge.com/blockchain-energy-trading/

http://cs.stanford.edu/people/eroberts/cs201/projects/2010-11/DigitalCurrencies/advantages/index.html

https://cleantechnica.com/2016/08/13/blockchain-based-peer-peer-solar-energy-trading-trialed-perth/

http://www.mo.be/nieuws/betrouwbaar-geld-voor-zonne-energie

https://www.businessinsider.nl/bitcoin-price-plunges-suddenly-and-sharply-march-8-2017-2017-3/?international=true&r=US

http://www.geenergyconnections.com/inspire/blockchain-how-renewable-energy-taking-page-bitcoin

 

 

Sometimes the human connection is the best form of advertising, all it takes is a study like this to prove it.

Word of Mouth

Customers are increasingly using social media when making purchasing decisions, and this paper seeks to explore in the influence that traditional word of mouth (WOM) and various forms of electronic word of mouth (eWOM) can have respectively. Meuter, Brown McCabe & Curran (2013), define WOM as, “any unpaid interpersonal communication between people, that affects attitude and purchase behaviour.” WOM recommendations come from personal connections and is therefore a key driver of success. Meuter, Brown McCabe & Curran (2013), define eWOM as, “any statement made by customers about a company that is available to many via the internet.” Social networking sites are aiding consumers in strengthening their networks, which means they have a wider audience (Meuter, Brown McCabe & Curran, 2013). This study was developed to investigate whether WOM is more influential then eWOM.

The Study

The study began with a qualitative phase, in which interviews were conducted with a small set of university students, who are desirable subjects due to their exposure to WOM and eWOM. Insights were taken from this step, such as the commonly used types of eWOM, and the key outcome variables were identified. The types of eWOM to be used in the study are Facebook, Yelp, and reviews on the businesses website. As well, the outcome variables to be used in the study are purchase intention, trust in WOM and attitude towards the firm.

Next they move onto the qualitative phase where students were the sample. The context of the survey scenario given was a restaurant located in a city that the respondent had never been. The only information given was from the four types of WOM. In order to compare the influence of each form of WOM, there were also different numbers of positive recommendations included. They outcome variables were each measured on a seven-point scale.

Interesting Findings

Overall, the study found that traditional WOM is more influential than eWOM. WOM was found to lead to customers having higher intentions of eating at the restaurant, higher levels of trust in WOM and more positive attitudes towards the restaurant. However, there was a difference in the impact that eWOM had. Facebook and Yelp were more influential than reviews on the company’s website. However, there was little difference between Facebook’s and Yelp’s outcomes which was interesting because of the personal connection that Facebook has. It proven that Facebook and Yelp were merely seen are unbiased sources of information. As well, it was found that the number of positive reviews from each WOM channel had little impact, which further proves that the platform is the influential component.

Real World Implications and Further Research

An interesting application of this study is how firms spend their marketing budgets. Companies spend a lot of time and energy on things like Facebook pages, but it was proven that interpersonal connections have the biggest overall impact. Firms can take this insight and apply it by encouraging more traditional WOM amongst consumers instead of focusing their entire effort on online tactics. Firms should especially not pursue new eWOM strategies at the expense of encouraging interpersonal eWOM. It is not that eWOM is completely ineffective, and eWOM strategies should still be maintained, but it is suggested that the focus merely be shifted to traditional WOM. A successful example of this is Bell, a Canadian telecommunications company, who through their Bell Let’s Talk campaign encourage customers to speak to each other about mental health, and by extension Bell (Quigley, 2016).

For further research it would be interesting to see if providing negative instead of positive WOM would have the same pattern that was shown in this study or if the results would be entirely different because consumers would be viewing the information from a different perspective.

By Noa Zaifman

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Sources

Matthew L. Meuter , Deborah Brown McCabe & James M. Curran (2013) Electronic Word-of-Mouth Versus Interpersonal Word-of-Mouth: Are All Forms of Word-of-Mouth Equally Influential?, Services Marketing Quarterly, 34:3, 240-256

Quigley, J. (2016, January, 27). Bell Let’s Talk Day lifted ‘cloak of secrecy’ around mental illness, say advocates. CBC News.

Retrieved from:

http://www.cbc.ca/news/health/bell-let-s-talk-day-mental-health-1.3419194

 

In the United States – a wave of community sentiment is developing among millennials, one in which many of the inconveniences of life can be, in part, alleviated by our fellow neighbor.  One such inconvenience is picking up a bite to eat or grabbing extra toiletries from the local pharmacist.  As a result, we get a new service / network platform that looks to address this common hassle – JoyRun.

JoyRun is a new service that allows all community users to set up “runs” to any location in a given area.  Once a run has been posted, everyone in the community can see it, request an item be purchased on their behalf and then have it delivered to their home.  In exchange for this service, the person making the trip, can charge a nominal fee of $2 or $3 per person.  The result is that within an hour’s time or less, student’s working furiously on their assignments can get food, toiletries or any other important item delivered to their home for a nominal fee.  Those making the run, often can make $15 to $20 a trip that can span less than an hour.  Better yet, all the money is exchanged via the app, so you won’t have to deal with change at all.

JoyRun is primarily focusing on college campuses to establish its core consumer base.  To join the JoyRun movement – individuals must possess a valid student email address to join their college’s community.  Once confirmed, users are asked to create a profile and update their payment information – and the runs can now begin.  Once assigned to a community, individuals can request to opt-in to a “run”, ordering items from a predetermined menu for a given restaurant, they can start their own run to either a specific location or to an unspecified location, or they can request a run be made on their behalf to a specific location – offering a set compensation for the favor.  In all, it’s another example of crowd-solutions to a common life hassle.  After delivery and payment of your items, community users can rate their experience, thus quickly separating the good “runners” from the mediocre ones.

In terms of monetization, the developers of the app are currently allowing transactions to occur without a fee, however, as the community matures, that is likely to change, and one can expect to pay a transaction fee to JoyRun directly.  Another form of monetization is advertising, as well as featuring certain restaurants and small business to a given community – either through specials or premium prominence within the app. 

Overall, I think the app has a very strong chance of becoming successful – however, it must be cognizant that continued and consistent community involvement will be crucial.  In order for users to want to use JoyRun, they must have users who will conduct runs during peak times on a college campus – and college students can be flaky to say the least.  Furthermore, JoyRun will become even more successful if it gets major support from local business who will be the major driver of product diversification and convenience to the end consumer. 

 

It looks like JoyRun will have a bright future and I look forward to using it more myself.

 

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