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McDonald's Acquires Machine-Learning Startup Dynamic Yield for $300M
- JohnFen 8y agoThat's scary stuff. If I ate at McDonald's, that would be enough to make me stop.
- homero 8y agoChikfila is doing similar things in house. So is everyone else. See https://www.forbes.com/sites/bernardmarr/2018/05/28/starbucks-using-big-data-analytics-and-artificial-intelligence-to-boost-performance/ https://www.forbes.com/sites/bernardmarr/2018/05/28/starbuck...
- JohnFen 8y agoWell, not everyone. This is mostly limited to the major chains. But by "scary", I refer mostly to the outright purchase of a data mining company, and they're already talking about intrusive surveillance such as using license plate readers. They're also being pretty up-front about wanting to use this to straight-up manipulate people. I don't know whether to give them credit for honesty or not (since all the cool kids are manipulating people these days), but it makes me recoil nonetheless.
- joezydeco 8y agothey're already talking about intrusive surveillance such as using license plate readers. If you drive onto their property, and McDonald's Corporation is almost always the landlord of a franchised store, are they really intruding on your privacy?
- JohnFen 8y agoYes, clearly. The question I think you're really getting at is "have I given consent to that?" And the answer to that is, assuming that I have been notified of the practice before I enter their property, yes. Which is precisely why these systems will mean that I won't go onto their property.
- robertAngst 8y agoThat having a fat dude in a fan usually means they should put in another order of fries? And as a result, everyone gets hotter fries? I don't see why having Math help make better decisions is a bad thing.
- JohnFen 8y ago> I don't see why having Math help make better decisions is a bad thing It isn't. But collecting unnecessary data and using it to manipulate people certainly is.
- nullandvoid 8y agoAn AI driven menu scares you more than the contents of the food does?
- JohnFen 8y agoI don't like the food, and I don't like the surveillance and manipulation about equally as much.
- ams6110 8y agoI think customers will find this very annoying. There's already way too many options on the menu. And their in store self service ordering kiosks are horrendously complicated already. They should eliminate about 60% of the menu and focus on speed and quality for the remainder.
- robertAngst 8y agoI don't think you understand how AI works. If I know facebook, they are going to make McDonalds addicting AF
- ams6110 8y agoWhen I go to McDonald's, if they suggest anything that I didn't ask for it pisses me off. Their food is pretty shit at best. The only reason I go there is to get something quick without any ceremony. If they can't do that, there's no reason for me to even go.
- joezydeco 8y agofocus on speed and quality That's the idea. Part of what they're trying to do is speed up drive-thru service, since that's now where the majority of customers visit. Humans can't predict what to make in the minutes before a customer pulls up to the speaker, but an ML tied into a number of systems and inputs might be able to do a better job. It's not really anything new, to be honest. Back in the days where restaurants cooked and wrapped the burgers ahead of time and held them in a warming bin for 10 minutes at a time (at least that's what the spec dictated) the managers would keep detailed records on customer count, weather, cars in the lot, local events, etc and try to make predictions based on historical data. Wasn't the most effective, but it helped. This is just a modernization of that idea.
- toast0 8y agoMan was it fast when you could come in and they had burgers in the bin waiting. They got shamed into cooking to order, and the downside is waiting; I'm never ordering a quarter pounder again since they changed those recently to take forever to cook.
- nostromo 8y agoIt seems like when your company's revenue has been flat for over a decade, you should focus on improving your core offering of, you know, food quality, and not find new ways to annoy customers with data mining and extreme personalization. In 2009 Dominos realized their food sucked, committed to improving it, and have since been doing very well. (Their stock has more than quadrupled.) At some point McDonalds will need to do the same.
- blang 8y agoDominos has been huge on technology for years: https://www.forbes.com/sites/aliciakelso/2018/04/30/delivery-digital-provide-dominos-with-game-changing-advantages/#73caeadd7771 https://www.forbes.com/sites/aliciakelso/2018/04/30/delivery...
- tedivm 8y agoThey were the first delivery place with an API as far as I know.
- tomnipotent 8y agoI remember the World of Warcraft add-on that made news headlines because it allowed you to order a pizza in-game, during a time when we were seeing constant stories about someone dying (or causing others to die) thanks to gaming addiction and forgetting to sleep/eat/feed children.
- berbec 8y agoIIRC it was Everquest that had /pizza and it brought you to the Pizza Hut website. Yup, I remembered correctly! https://boingboing.net/2005/02/18/everquest-now-with-p.html https://boingboing.net/2005/02/18/everquest-now-with-p.html
- bitwize 8y agoAnd they were the first pizza app to feature Hatsune Miku!
- ineedasername 8y agoInteresting that they decided to acquire the company rather than just become a customer. Perhaps they saw strategic value of depriving other potential customers? In any case, the article was light on specific insights McDonalds has received and instead gave hypotheticals, so I thought I'd share this from Dynamic Yield-- it's a case study with more specifics so it gave me a much better idea of what they do: https://www.dynamicyield.com/case-studies/hellofresh/ https://www.dynamicyield.com/case-studies/hellofresh/
- ineedasername 8y agoDynamic Yield (reasonably) seems to focus initial efforts on associating a unique id with customers. Given that, it's not much of a leap at all to think that McDonald's will start capturing license plates in the drive through and associating them with the correct order. (Heck, they might do it already) With Dyanamic Yield they then offer custom recommendations the next time that plate number is detected. I'm not sure if that creeps me out, or if the data geek in me likes the elegant solution to a problem. Why choose? It can be both.
- chrischen 8y agoWell, at mom and pop shops it already happens via the human worker recognizing and tracking you, without consent.
- ineedasername 8y agoHey, you're right. And my bartender always knows I want "the usual"! Just because the cookie exists in his neural structure doesn't make it any less of a violation of the GDPR :)
- barbecue_sauce 8y agoStill creeps me out.
- ovi256 8y agoJust say loudly as you enter the establishment: "I do not consent to being tracked, except as necessary to fulfill the service under GDPR"
- nabnob 8y agoI don't think you can really compare the implicit "tracking" that occurs with face-to-face interaction with tracking through technology - there's a huge difference in scale. It would be like saying there's no difference between mom and pop shops and Walmart because they both just sell commodities.
- YeahSureWhyNot 8y ago"If someone orders two Happy Meals at 5 o’clock, for instance, that’s probably a parent ordering for their kids; highlight a coffee or snack for them, and they might decide to treat themselves to a pick-me-up. And as with any machine-learning system, the real benefits will likely come from the unexpected." It looks like 'machine learning', 'data mining', etc. gets thrown around a lot even when irrelevant. That machine was never going to find out that it was a parent in there ordering 2 happy meals for their kids. Its more like 'if 2 an item tagged for_kids sold then suggest item tagged for_adults, if weather_temp > 40 degreea then suggest ice coffee otherwise hot coffee' where is machine learning in that? I honestly would prefer they showed me my recent orders based on my cars license plate just like dominos.com does when I go back on their website
- perfmode 8y agoMachine learning isn’t magic. It’s just math. Feature: for_kids, for_adults Machine learning allows you to generalize inference across a large number of features. Instead of hardcodong control flow, you train to maximize an objective function. The belief is that once trained, you can infer cheaply and scalably.
- tpetry 8y agoBut you can optimize these rule sets with machine learning.
- crazygringo 8y agoTwo things most surprising about this: - Presumably you can get 90% of the value for 5% of the price. McDonald's isn't Amazon. They have 100 (?) menu items, not 1,000,000 products. Why are they spending $300M instead of hiring a few data scientists? Or just be a customer of the company? - Dynamic Yield has many other clients, and it sounds like they'll continue to serve those. Is McDonald's the right owner for a high-tech customer intelligence product? It just feels like such a bizarre cultural and core-competency fit. Maybe invest partly in it, but buy it outright? I don't get it. Seems like you'd rather share the board with other experts?
- tomnipotent 8y agoI think you are drastically underestimating McDonald's - they have 36k+ stores in almost every country on the planet serving 69MM+ customers daily with a brand recognition in line with Apple, Coca Cola, and Nike. They also spend money on advertising across every conceivable channel. Number of SKUs has nothing to do with it (which likely numbers in the many hundreds across the globe considering regional & seasonal specialities). McDonald's has everything to gain by infusing this kind of DNA into their operations.
- badestrand 8y ago> McDonald's has everything to gain by infusing this kind of DNA into their operations. That seems logical but how much will it infuse Machine Learning into McD's DNA if the acquired startup sits in Israel? It seems to me the employees will not even interact much with each other, how can there be much of incorporating thinking, methods or practices?
- tomnipotent 8y ago> It seems to me the employees will not even interact much with each other, how can there be much of incorporating thinking, methods or practices? What does physical proximity have to do with anything? McDonalds does $20B+ in revenues, has 210k direct employees and 1.9M when you include franchises. At this scale, the only people that need to interface is senior management.
- agumonkey 8y agoYou need at least machine learning to fix the touchscreen centered restaurants absurdity
- jason_slack 8y agoI do worry about the loss of jobs at this level though. Is it right to think that $300M investment + time to turn it into usable product for the restaurants == Loss of many minimum wage (or slightly more) jobs to make back that $300M My local Wal*Mart now has 25 self checkouts and only 2 people manned registers.
- lexapro 8y agoWhy, that would be great news! Or do you think anyone enjoys doing this type of work? Now it's time for the governments of the world to catch up and introduce a basic income.
- jason_slack 8y agoIt might be great news on some level, but that many jobs still effects the GDP and more importantly people's lives until they find other work, if they can, and it may bot be easy for them. Enjoy it or not. Putting food on the table and the next day not being able to is hard on anyone. Multiply this my potentially millions of jobs.
- mn3m 8y agoThe beginning of the robotic takeover according to Manna :) https://marshallbrain.com/manna1.htm https://marshallbrain.com/manna1.htm
- gowld 8y agoDo you think "Australia" is real, or a cover name for a prison or worse?
- godzillabrennus 8y agoTravis from UBER is starting a kitchen sharing company. McDonalds has been in the real estate game within hospitality larger and longer than anyone. This move makes a lot of sense and hopefully they move smartly to compete as the industry evolves. McDonald’s can’t scale ethically raised food to their restaurants at the price points that matter to their customers but they can bring operational and supply chain expertise to startup restaurants. Maybe this is part of a bigger transition.
- theNJR 8y agoThis acquisition is a prime example of what the future of food is going to look like. It’s interesting how food has been one of the last major consumer categories to be eaten by software. But it’s finally happening! Three simultaneous changes are happening related to the availability, personalization, and niche focus of food. I’ve done a deep dive on this (1) if you want to read more. (1) https://news.ycombinator.com/item?id=19521655 https://news.ycombinator.com/item?id=19521655