Tech-enabled Brick-and-Mortar Business

As I said in my previous post, it seems like the highest returns are going to be in technology-enabled business models that aren’t necessarily in the super-crowded Web/mobile app spaces.  Of course, this might be difficult – the death of retail is pretty obvious at this point, but successes are still very much possible.
The real archetypes for these are Apple Retail and Redbox, though from totally different directions.  Apple Retail is pretty simple to explain – it’s just the best “destination” store there is, and an incredibly awesome shopping experience heavily mediated by technology.  It blows Best Buy out of the water.  Redbox is however, much more interesting!  It’s basically a real-world hack – McDonald’s came up with it while trying to figure out how to monetize some of their dead floor space.  Their kiosks are compact and built with more-or-less hacked-together technology, and are AWESOME.  The service is super-simple and the user experience is great.  Unfortunately, they’re working on selling the dying category of physical-format media, but it’s still a brilliant new application of technology to something (renting videos) that had seemed more or less solved.  Furthermore, through use of credit cards they capture a ton of data that they are apparently very smart about using.
This is the type of market opportunity that the current frenzy of web & mobile investment has totally passed by.  Furthermore, this type of thing will only get easier as general-purpose computers continue to get smaller and cheaper.  Yes, an iPhone is a cheap and wonderful general-purpose computer…but have you seen Raspberry Pi?  It’s a full-featured Linux computer, with all the hookups, that retails for $25 and could probably be ordered even cheaper in bulk once they get up to speed.  Building a small and powerful machine that can do more or less whatever you want is very feasible, as is building that small and powerful machine into lots of things.  As a side note, 3D printers are shockingly cheap – it’d cost under $2K to buy a machine that could build enclosures for an RP board and/or other ways to “consumerize” the naked board.   
One obvious win on this is remaking POS systems, but I think Square is on that already.  Of course, you could easily take a Raspberry Pi, a USB CC reader, and a screen/keyboard and build a fully configurable POS system for CHEAP with off-the-shelf components that would beat the pants off of existing POS systems. Which are terrible.  Even if POS is already being attacked, it might be worthwhile to look around and figure out where the opportunities are to replace crappy, expensive, custom-made legacy electronics with off-the-shelf general-purpose components hacked together.

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