The purpose of this document is to explore plausible business models we can pursue as a company.

<aside> 💡 Keep in mind that this is an exploration of a hypothetical future, not a specific proposal for a change in business model.

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It's critical to set up the company's business model with the right incentives. Any entity that has misaligned incentives will fail in the long-run — or at the very least, operates in a way that is antagonistic towards its customers.

We need to find a business model that aligns our incentives with the health and happiness of our members.

Additional Resources

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Greg Greeley x JM

Aligning Incentives

We want to make sure we avoid developing a business model that sets us up for failure — not just financially, but also in our commitment to our members. When business models are misaligned with the interests of customers, it encourages dark patterns and shady business practices.

https://www.youtube.com/watch?v=kxkrdLI6e6M

https://www.youtube.com/watch?v=e8r47hZX2G8

There are many industries where this happens. We'll go through just a few of them below:

  1. Auto Repair - The incentive is to sell more stuff and to trick people into thinking they need more services than they need. There is also an inherent information asymmetry that makes it even more unfair. If an expert says, "You need to replace your brake fluid," who are you to disagree? I can tell you from first hand experience from my time at CarDash that the vast majority of automotive services are purely upsells and are totally unnecessary. The "service advisors" are almost always compensated with commission (and are often given bonuses based on the percentage of upsells that are high margin, like fluids) and they're strongly encouraged to advise people get unnecessary services to increase revenue.
  2. Lawyers - Lawyers bill by the hour, so they're incentivized to drag their feet and make things take as long as possible. They're incentivized to "get on a call to discuss" so they can bill those hours, and ideally "let's loop a couple other partners in on this to get their opinion" so they can also bill hours. Doing things faster means they make less money.
  3. Insurance - Once you've signed up for insurance, if you use the insurance product, the company loses money. So insurance companies are inherently antagonistic to their customers because after a customer signs up, any interaction with them can only be a bad thing. So they add friction to using insurance and try do to everything in their power to avoid taking responsibility for things.