My first thought to this is: How is it going to scale? This requires human labor to be behind every service requests!
And then I was reminded of Uber. Isn't Uber in the same sort of service model that requires a human driver for every request, but is doing super successful? (let's not talk about regulation.)
The more I think about it, the more it appears a good business model. It definitely helps users save time and worry, and as demand is growing, it can simply hire more trained service men, and creates huge job opportunities.
This is a platform that enables/accelerates service to people by people. I'm optimistic of its future.
There are a few differences but basically yes, physical ops execution to scale the business profitably (or with the promise of profitability some day) is key to a business like this. Physical ops (e.g. running a call center, which is a comparable model) is a LOT harder than it sounds.
Unlike Uber, this service doesn't require any physical presence in a city, just knowledge of services available in that city. So in theory they could launch in Mongolia next week. But, so could a competitor. Unlike Uber's (contracted) fleet of physical cars which provide a material barrier to competition, all you need here is knowledge and a Twilio account and you're in business.
There is a risk here that whatever they (and other startups) do in this space, the gorillas just come along and clone them - e.g. Amex, Visa/MC, etc - but offer the service for free. They can run their concierge services at a loss since they are attached to a profitable card services business. This is similar to robo advisory financial services where Wealthfront etc now face margin squeezing, maybe even life threatening competition from Vanguard and Fidelity.
I've used services like this for years and this exact business model (sms concierge) pops up every few months. I've worked out the per unit economics and it's a tough business. At some point due to automation of background services it will become possible. Maybe these guys will raise a huge round and take that gamble. Maybe the timing is right and they will succeed (along with many competitors rushing into a new industry), or maybe it's still too early by a decade and they will fail. But some day with AI and automation I think this model will work.
Eventually Uber will fire all drivers and replace them with self-driving cars. In many ways Uber is currently doing things that don't scale with regard to relying on humans to drive customers. Eventually the cost-intensive humans won't be needed and Uber will grow massively.
I could see this happening in many business models. Obviously Magic may fail entirely (it appears to be pretty much just an idea currently) but I could see AI replacing the human components.
And then I was reminded of Uber. Isn't Uber in the same sort of service model that requires a human driver for every request, but is doing super successful? (let's not talk about regulation.)
The more I think about it, the more it appears a good business model. It definitely helps users save time and worry, and as demand is growing, it can simply hire more trained service men, and creates huge job opportunities.
This is a platform that enables/accelerates service to people by people. I'm optimistic of its future.