> “if Grover’s subscription model becomes compelling enough, it’s hoped that purchasing many tech products will become so unattractive as to create Netflix-level changes in consumption behaviour. Or, at least, that’s the aim. In my case, that would mean spending far less time recycling things like smartphones and music technology gear on eBay as I tread a well-trodden and perpetual upgrade path.“
Questions to consider:
1) This business requires upfront capex into depreciating hardware with the hope that users are sticky. And users would be sticky partially because they would succeed in changing general attitudes towards ownership. Does this seem plausible?
2) If this works, there is going to be a gold-rush style copycats (since TAM is big). How could they fend off copycats? ie another company giving iPhone X at $x/mo, where x is 50-cents lower than Grover.
3) Out of General curiousity, does an average person have this problem? (Of wanting consumer electronics on $x/mo, so they can upgrade?).
4) All leasing businesses have an end of life value problem — I always thought that consumer electronics has a big EOL problem (worse than cars, say) in that they don’t have a second-hand market. It’s either recyclers or landfill. In that scenario, isn’t consumer electronics the worst place to start a leasing business. (They mention laptops for businesses; that makes more sense, because first, it’s B2B (TCO and cash flow matters) and there is some secondary market). What am I missing?