David Kirkpatrick writes in Fortune about what one can learn from Stelios Haji-Ioannou’s EasyGroup [via Anand Patwardhan]:
Look for services with high fixed costs, price elasticity–meaning that consumers will typically buy more if prices drop–and the ability to be ordered over the Internet. Then create a frill-free offering that gives consumers few if any choices. EasyJet has only one class of service; EasyInternetcafe ditched its printers because they demanded too much maintenance; EasyCar rents only one class of car and requires that it be returned, clean, to the same location. Says EasyGroup chief technology officer Phil Jones: “We don’t aspire to be all things to all people. We do one thing very well at low cost.”
At lunch recently Stelios bubbled over with new ideas. Consumers today are even more interested in low-price services, he says, and the technology that makes it all possible has never been cheaper. He hopes to open the first EasyCinema outside London shortly. It will have few employees; customers will print out tickets at home or from lobby terminals and will be admitted by a bar-code scanner. Pricing will vary not by age but by showtime and how far in advance viewers purchase. Holding him up is the resistance of the movie studios; Stelios says he anticipates a legal battle. Other new ideas include a low-cost hotel chain called EasyDorm, an EasyBus service, and EasyCruise. “It’s a great time to have a clean sheet of paper and some know-how rather than a lot of infrastructure already in place,” he says. That was a common theme in the late ’90s; it’s truer than ever now.
Some good ideas for our thinking at Emergic.