Connecting Offline with Online using Mobile

One of the great lessons I have learned about Mobile is that it is not Web. Behind that simple learning is an appreciation for the unique capabilities of the phone and what kind of Mobile naive services it can enable.

If you want to read more about the uniqueness of Mobile, I refer you to the following articles by Tomi Ahnon. They are quite worth your time:

• Deeper insights into the 7th Mass Media channel, mobile is to the internet, what TV is to radio

• 7th Mass Medium in context of 6 legacy mass media - about time to set facts straight about mobile

• The internet, the mobile internet, and nothing but the internet? No. Actually..

One of the unique capabilities of the phone is that it can act as a connector between your offline and online activities. This is something that the Web has difficulties with because it is not as portable, as personalised, as contextually aware as the phone. This great deck of slides shows powerful examples of how this is done in the context of enhancing your offline shopping experiences:

An Internet Watered Down

View more Microsoft Word documents from John Pettengill.

For those who don't have the time to click through the slides, the main thesis of the deck is that we are now using the phone for playing sudoku and reading NYtimes. That is what we called filling in 'dead times'. This is the lowest denominator for the phone and is not unexpected as we always export current content and services to new media and platforms. The bigger opportunity however is to find pain points outside of these 'dead times' and create truly mobile naive service/products that solve these pain points.

The phone can be a powerful hyperlink to connect the physical and online world. As stated in the slides, it is a tool that can reveal hidden information, context and relationships in the physical world and connect them to the online environment. Such connections can potentially create real value that improves our lives physically.

So, if you need inspirations on how Mobile can connect offline and online, check out these mobile pearls that are featured in the slides :

• Mobile Pearl #1: Paying for your groceries through the phone instead of waiting in long queues. Through the same application, you can now help the users to take care of their grocery budgeting and maybe even include digital coupons as well as other reward programmes.

• Mobile Pearl #2: Searching for a book through your phone while you are physically in the store. The location aware phone will then guide you to the right shelf where your desired book is located.

• Mobile Pearl #3: Using your phone to sample music, be it in Starbucks or Barnes and Noble, and have the ability to instantly purchase and listen to it. If we push this further, we can use the music as a form of social objects to connect real people or friends around us physically.

• Mobile Pearl #4: Paying for your 2nd cup of starbucks coffee through your phone so that you don't have to get out of your seat.

Even all these pearls are just early attempts at connecting the physical and online spaces. As we learn how to better leverage on the phone, I am sure we will see much more innovative and useful applications and services.

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Path to disruption: from centralisation to decentralisation

If you are familiar with Clayton Christensen's disruption theory, one of the useful way to think about disruption is to identify institutions or technologies that are centralised. As technology progresses, we often see decentralisation replacing what was once centralised. The most common example is computers. When computing started out as mainframes, they were expensive and had to be centralised to maximise economics of scale. People who want to use the computers had to travel to where the mainframes are. However, technologies and innovations soon came that decentralised computing. Mainframes become desktop, desktops become laptops and very soon, laptops might become mobiles.

Disruption will come from new entrants
From centralisation to decentralisation, there are two points to note. First, disruption will seldom come from existing players. One of the reasons is that the emerging new market often appears to be small. Hence, using their internal ROI metrics, these new markets will often failed the company's market viability tests. As a company becomes bigger and bigger, their internal ROI for new markets become higher and higher, resulting in ignorance of new markets and the threat of new players.

Beyond that, emerging innovations are often messy. Compared that with the structured processes that incumbents typically possess, and it is not difficult to see why they typically dismissed such innovations as trivial. Incumbents are locked in by their current interaction rules that prevent them from experimenting and living with messiness.

Disruption will unlock bigger markets
The second point to note about the move to decentralisation is that it will unlock much bigger markets. Again, going back to the computing example, we can see that the market for desktop dwarfs the market for mainframes. Similarly, laptops will outpace desktops. Hence, disruption not only replaces the incumbents but also creates a much bigger market for everyone else.

This is not difficult to appreciate as decentralisation often bring more convenience and lower price points to the market. This in turn attracts new users who, otherwise would not have the incentives to use these products/services. So, in a sense, decentralisation focuses on non-customers, rather than current users.

Opportunities
Using this framework of thinking, we can see opportunities in many institutions/technologies that are currently centralised. Take healthcare for example. Hospitals are currently centralised instutitions for patients seeking their services. Hence, the path to disrupting healthcare is decentralising either the services or health equipments that are being housed within hospitals (See Mayo Clinic, Hello Health for examples) This is why I am so interested in mobile healthcare (see related posts here and here) because it is a powerful decentralised form of healthcare delivery.

Overall, this framework provides a powerful shortcut for me to evaluate projects. It allows me to see how centralisation-based industries like education, energy, manufacturing, legal etc can be disrupted.

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The rise of the network economy

In 1998, Kelvin Kelly wrote about the network economy in one of my favourite books: New Rules for the New Economy. The central thesis of the books describes how the economy is transforming into a network-like structure, where different strategies and business models are needed to thrive. This is exactly what we are seeing today, across different verticals and industries.

Network of Farmsa Bay Area startup has launched a service to make it easier and cheaper for restaurants to buy food from small, local farms. With a suite of mobile apps for use in restaurants and on farms, FarmsReach wants to create an online food marketplace that would directly connect farms with restaurants.

Car InfrastructureHis vision of building networks of battery-exchange stations in North America, Europe, Japan and Australia to increase the driving range of electric cars.

Patient Care Medical Network
by creating a marketplace for health service transactions to occur, I believe that Carol now becomes a new style of provider network. As a consumer, Carol becomes my new provider network of preferred practitioners who are willing to bundle their services, display relevant differentiating aspects of how these bundled services are delivered, and transparently post their prices.

Talent Network
To fully realize the potential for talent development in broad, cross-enterprise networks, companies will need to deploy even more ambitious pull platforms that scale easily to large numbers of companies.

It is a testatment to the author's intelligence that much of what he says is still thought provoking and relevant, 11 years after the book was published. What other networks have you seen developing?

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Community interactions as business models for the Consumer Web

We are still struggling for business models in the consumer Web. NYtimes has an article that says how Web startups are looking beyond advertising for revenue streams:

Now advertisers have cut back their online spending. So Web start-ups are searching for new ways to make money, like selling real, or virtual, goods or asking customers to buy subscriptions.

Related to it is another article that describes how a TV network is failing to monetise the Susan Boyle's web fame:

FremantleMedia Enterprises, a production company that owns the international digital rights to the talent show, hastily uploaded video clips to YouTube in the wake of Ms. Boyle’s debut, but the clips do not appear to be generating any advertising revenue for the company. The most popular videos of Ms. Boyle were not the official versions but rather copies of the TV show posted by individual users.

While both articles pointed to the difficulties in generating revenue through advertising alone, they also hinted at a much bigger opportunity: business models that focus on community interactions.

In the first NYtimes article quoted above, it talks about how a startup in online gaming is earning revenue by enhancing the community interactions:

When YuChiang Cheng co-founded World Golf Tour, an online golf game with high-definition graphics, he wanted to make money from every player. Only 5 percent of World Golf Tour’s 250,000 players pay for things like $1 putters in the virtual pro shop or an $18 tournament entry fee, but it gets two-thirds of its revenue from such purchases. The other third comes from ads, including banner ads and tournament sponsorships.

Another example of a business model build on community interaction is Nico Nico Douga:

Japan’s second largest online video portal - Nico Nico Douga - has succeeded in engaging its target audience of young Japanese consumers.
Nico Nico Douga - a homegrown video-sharing community - grew to 7 million registered members between its January 2007 launch and July of 2008.

I have written about this before and here is what I said:

They have also show that it is possible to build a business if you give people the ability to converse, to personalise their conversations and to integrate the conversations around social objects.

So, in summary, are community interactions the path to substainability and profitability for consumer facing applications? What are your views? If you have startup in this space, does this make sense for you?

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Southeast Asia: Untapped potential

I am always of the view that Southeast Asia is an unpolished diamond in terms of market opportunities for startups. Scott Rafer articulated the same view beautifully and I encourage readers to read his entire post if you are interested in this area.
As always, I’m going to look for opportunities where there’s a good-sized market that’s not super fashionable and therefore not overcrowded. Southeast Asia fits that profile a lot better for me than South Asia or Greater China.

To add to his commendatory, I would like to share my views on what are some key opportunities in this region. Things that might be dull but has the potentially to create lots of value and in the process make lots of $ : )
Mobile services
Mobile is definitely an important area to focus on. Many of the users here are likely to use mobile than the pc and it is logical to cater to this market. I mention FrenClub before but it is worth repeating. They are a mobile social networking service that is based on simple SMS technology. They have only 2 million users but are aleady grossing US$2.3 million in revenue. Imagine if you can create a more popular service that brings in, say 10 million users. How much would you be earning?

As additional facts, consider Philippines in its use of mobile services:
In the Philippines it is for example not unusual to receive your whole paycheck paid to your mobile phone account. And you can then make various payments and money transfers via SMS. The various TV show interactivity that we see with American Idol for example and the politicians using SMS in their voter drives - these have been staples of the Philippine market for this whole decade. The Philippines is definitely the most advanced country among the developing world by far, when it comes to mobile telecoms.

So mobile applications and services definitely have potential in Southeast Asia.
Digital advertising
When I say digital advertising, I am referring to online or mobile advertising. By references, digital advertising only constitute a small percentage (less than 5-10%)of the overall advertising spent in many Southeast Asian countries. This a huge opportunity. Ad networks, Ad exchanges, Brand monitoring, Services that help companies listen. All these are wide open areas for startups to take a crack at it.
Online classified
Related to advertising is online classified. In the US, craglist is the dominat player but we have no such companies in SouthEast Asia. This is good news for startups as it implies the availability of markets opportunities. To give you a sense of the market size, let's look at JobsStreet, which is the key player in the Job classified markets for Malaysia and Singapore and maybe part of Philippines. Within one vertical and a couple of countries, they are already a 100M ringgit company. What about other verticals such as car, property, dating, education/tution in other countries? How much are these untapped market worth?

SME market
Many SMES are relatively unsophisticated in their usage of technology. In Singapore alone, only about 20% of SMEs have a basic website. That implies untapped markets in terms of entreprise software. In terms of areas, basic company needs like payroll, accounting, inventory, CRM etc are all good areas to pick on. Alternatively, you can also analyse indiviudal sectors and see what kind of software can deliver value to the SMEs within that sector.

There are many more opportunities than the ones I listed here. I shall go deeper into these in future posts. In the meantime, what other big areas do you see?

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Publishing profitably rather than just publishing

One of my most talked about topic at this blog is enabling creatives or artists to do their own thing and earn a living while doing so. Examples of what I have written include the following:

• How startups can help the comic industry
• Empowering creative talent in next generation media
• 4 ideas for empowering fans
• Is it possible to create a Rockband equvialent for photos?

Seth Godin sumed it up well when he says that:
In a world in which just about everyone is a writer and just about every writer wouldn’t mind benefiting from their work, there’s a huge need for people who can help us publish profitably. Or, failing that, figuring out a way to get your own words published profitably. Some people will happily remain amateurs, but history shows us that the real explosion in content happens after people figure out how to make money.

Is it time for us to start moving forward with our publishing platforms? Is it time to think of them as markets for creatives or artists, rather than mechanisms to create content. What should such a new platform look like? What are its components?
Built in payment
We need a platform that can enable creatives to collect money. Witness how Scribd has easily turn itself from a platform to a market by simply enabling authors to price their works and collect payment. Similarly, many mobile services have become viable revenue sources for creatives because they have built in payment systems.

Build in revenue mechanisms
Related to payment is the issue of revenue generation. Paying for stuff is just one option to collect revenue. How can we build in other revenue mechanisms that cater to each creative industries? For photographers for example, why can't they organise a photography tour from theirs blogs and charge people for it? For bands, why can't they create and sell their merchandise on their blogs through a zazzle-like interface? For authors, why can't they allow their fans to engage them for public speaking through their blogs?

Some of these services might already exists. However, the point is that why can't they be integrated into a publishing platform like a blog? Let creatives focus on their works and forget about adding a widget here or creating a service there.
Community tools
Andrew Chen articulated a problem that is becoming clearer to me. We don't have good community tools in our publishing platforms. Take blogs for example. We don't have ways to store contacts of readers so that we might contact them personally. We don't have an easy way to check out the profiles of our readers so that we can understand them better and know how we can be more useful to them (many commentors for example don't have a Disqus account). Without all these, it will be challenging for publishers to connect meaningfully to their community.

Network tools
An artist or creative can generate only limited exposure. However, if they can cross promote each other, the network effects will be much greater. Today, I don't see that happening. There are no simple ways that an artist can encourage his/her fans to take a look at other people's works. More importantly, there are no viral revenue mechanisms to encourage artists to cross promote each other.

I think there is much we can do to enable creatives to publish profitably (Bandcamp is an early example). We went into creating publishing platforms without due considerations for the incentives, the models, and the business processes of enabling people to thrive. This is ok during the early days of the technology but I think we are a stage where these things are becoming important.

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Admin note: carnival of mobilists #175

Carnival of mobilists #175 is up.

One of the interesting post to me is about the use of mobile technology in education. Of course, there are other topics that might arouse your interest if you are into mobile.

Go take a look. You never know where serendipity might lead you to.

http://blog.mobify.me/2009/05/25/carnival-of-the-mobilists-175/

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What I have learned from Twitter Tees

There is a lot to learn about Twitter Tees by Threadless (hat tip to Howard Lindzon). It is a powerful (and rare) example of how social media can go beyond communication and reshape production and consumption. Twitte Tees does it beautifully and elegantly.

Here are a couple of quick thoughts of what I have learned from it so far:

Fully leverage on the new medium
Twitter Tees isn't about fanciful grahpics. It is about witty text. They have widely exploit the medium for what it is. That is thoughtful and smart.

Let the cream rises to the top
The normal tweets lacks the mechanisms for the cream to rise to the top. Twitter Tees, by simply adding a voting mechanism, allows the community to decide what is the best tagline for a T-shirt. This filtering mechanism is the key to unlocking viral feedback so that only the coolest stuff are being surfaced.

Microblogging can affect consumption and production
When we talked about micro blogging, we typically focused on the conversational aspect of the service. Twitter Tee has shown us that it has the capacity to do so much more, like affecting how production and consumption. By coordinating user preferences, Twitter Tees can now produce the best stuff that the community desires.

Opportunities in other industries
There are still other industries to apply this model. Take greeting cards for example. Why not create cards with witty comments that are created and nominated by the community?

In summary, I am really impressed by what the Threadless guys did. Once again, they have shown true understanding of next generational businesses.

Related articles by Zemanta

• Clothing as Conversation (Twitter Tees on Threadless) (4cloudcomputing.blogspot.com)
• Threadless - twitter tees with user voted tweets (twi5.com)
• Twitter is our id, Facebook is our Ego (informationarbitrage.com)

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Mobile Pearls Vol V

Continuing from my mobile pearls vol 4, I will be highlighting innovative or interesting mobile serivces/applications that I have come across.

GlucoboyWhat is it: The Glucoboy is the first blood glucose meter that has been designed specially for kids, adolescents and the young at heart. When used with the Nintendo Game Boy® Advance System or the GRiP incentive-based web community, Glucoboy becomes part of an entire network that rewards testing compliance and good health management.

Why it is cool: Combining gaming, mobile and health into a complete package is not only smart, but has real tangible benefits to the users.


New health monitoring phones
What is it: With the F884iES, users can place their fingers over the camera lens, which can determine their heart rate simply by scanning minute movements. This information, along with that from the built-in pedometer, can be input into a personal “health diary”.


PePiCo - instant personalized mobile content creation
What is it: a platform developed by Cybermedia Japan that allows users to take photos and create personalized content. Visitors to PePiCo can make e-cards, wallpapers, and games that feature the subject of the uploaded photo in a funny story/scene that can then be passed along to friends.

Why is it cool: Taking full advantage that phones are very personalized devices, this service enables users to fully express themselves and have fun at the same time. What a clever and simple service.


12Pixels - Mobile Social Drawing
What is it: 12Pixels, an application created by Karl D.D. Willis and Dr. Ivan Poupyrev of the Sony Computer Science Lab, is a mobile drawing application entering the emerging market of “social drawing”. Instead of relying on touch screens which are still rare for most mobile users, the application utilizes the standard keypad to draw.


Nokia's Shoot to Translate Service
What is it: After you have the photo of the text you want to translate, your mobile identifies the text in the photo and translates it for you.

Why is it cool: Nice example of a different paradigm for information retrival on the mobile. For more examples, check out my previous post.


Shufoo! Digital Coupons for Housewives
Members (registration free) can sign up to receive such notices from their favorite stores or brands delivered directly to their inboxes. Alternatively, one can browse by neighborhood or by category to check for (and compare) special promotional campaigns.

Why is it cool: Mobile advertising at its very best. Relevant and personalised. A very cool example of advertisements as content.


New mobile blogging platform that reads users' emotions
What is it: NEC is working on a new “smart” blogging system called the “Listen, Look, Fun Blog” that will be able to “read” the mood of writers. Based on the words entered onto the screen, the system is able to judge the writer’s feelings and then insert appropriate text decorations or voice expressions into the post. Text decorations include font styles/size,color, and inserting icons such as emoticons.

Why is it cool: One of the mobile's unique benefit is its availability at the point of creative impulse. This service makes it more fun for the user to create stuff when he is in a creative mood. Imagine Zemanta being applied to mobile and in a fun way.


FrenClub: Mobile social network success in Malaysia
What is it: A mobile social network here in Asia (that) work on.... basic SMS. They have over 2 million subscribers and they are earning over 8 milllion Malaysian Ringgit in revenues this year (about 2.3 million USD).

Why is it cool: More examples that mobile social networks have valid business models. Not only that, FrenClub is one of the rare data points for SouthEast Asia that show mobile social networks do work here!


Tourism and mobile services fuse in Vietnam, with SIM card aimed at visitors
What is it: Vietnamese mobile operator Viettel Telecom announced a SIM card that is targeted directly at tourists. The pre-paid Tourist Sim service combines decent prices with a heavy focus on information search services. The aim of this service is to provide tourists with all the information they need via SMS.

Why is it cool: A very simple and clever idea that recognises that information retrieval works very differently on mobile than on the Web. Bonus points for creating a valid business model around this idea. Anybody in the mobile travel space should just copy it in your city and/or country.


Selling music with 2D Barcodes, old school - yes as in rap music
What is it: Rhymelibrary which is an old school rap service, has now introduced Hip Hop QR Codes to help promote old school rap songs that are sold via iTunes. You don't have to do any typing of a web address, you just point your cameraphone at the 2D barcode, and within a second, the long web address appears on your phone screen, as if by magic.

Why is it cool: Using 2D barcode as an information retrial and commerce mechanism. Very unique to mobile and why it is likely to succeed.

Related
You can read more Mobile Pearls here

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Nuggets of wisdom from kids

Got this video from Fred Wilson's site. Although it is really short, the points articulated by the kids are really awesome.



A couple of things that I pick up from the video:

- The TV broadcast industry is in for a rude awakening. When kids as young as these think that the business is in trouble, there are real issues in the industry. Having said that, TV seems to be the most adaptive to the changes bought about by the Web. There are more experiments being tested in the industry and we shall see what it all leads to.

- Kids want their content anywhere, from computer to their mobile services. How easy have we made it for them to do so? Why doesn't every video site comes with a download-to-mobile option that compresses the video to the right resolution for their mobile devices? Whoever that makes it easy for kids to move their content around will be a clear winner.

- When kids like these grow up and join the workforce, are our companies ready for it? What kind of expectations do these kids have of work? Will they expect everything to function as easily as their Web experiences? How can companies prepare for this future?

What insights have you gained from this video? Is this representative of your experiences with kids? I look forward to your comments.

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Is it possible to create a Rockband equvialent for photos?

Rockband has been a runaway success, not only in terms of game sales but also bringing about a powerful new model for music consumption:

The success of the video game Rock Band is drumming up revenue for the music industry.

Virtual rockers downloaded roughly 2.5 million songs in the eight weeks since the game launched on the Microsoft Xbox 360 and Sony PlayStation 3 systems.

The reason for this is simple. Games make music more interactive, more entertaining, more fun:

"Hopefully it helps evolve music to not just a linear art form but a more interactive art form," says Van Toffler of MTV Networks. MTV Games publishes Rock Band, along with Electronic Arts. "You look at a lot of 20-year-olds who are reticent to plop down $20 for a CD, yet they don't mind paying $25 for a DVD or $50 for a video game

Can we apply the same principles to images/photographers?

For the past few weeks, I saw my wife addicted to this simple iPhone game of 'spotting a difference'. The game was simple: 2 images were shown and the player has to spot the difference.

Today, I saw a similar Facebook game called Spotmania:

Is it possible then to apply the Rockband's music marketplace concept to these spot-a-difference games using photographs? Will the popularity of such games open up demand for unique or interesting photographs? Will such games create viable ancillary revenue streams for photographers?

Or am I just being silly?

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Great follow up on my post about the economics of the $9.99 ebook

I have no trackbacks here (I know my blog template sucks. I am working on a new one).

However, there is blog post at zerobeta that talks about why prices of books (and in general arts) will face pressures to decline.

Below is an excerpt:

When certain types of art such as music and literature/books become digital, the cost to produce such a work rests mostly on the artist. In addition, the Internet has made it easier to discover new artists and for artists themselves to market their work. The result is that the economics of the publishing is dead and the economics of art takes over. To the dismay of the publisher, the economics of art is much different.

The one argument you keep hearing is, “If the artists don’t get paid, how do you expect them to produce the art?”. Art is something that is timeless and will be produced for the sake of art itself. The artist effectively bootstraps him/herself in order to produce it the same way a web publisher with an art for programming can cheaply and quickly make a website or application. Thus the supply of art is much larger than the demand will ever be. An artist just wants to be heard, not bought. Heck, some of the greatest artists that ever existed produced art in their lifetime that they unfortunately never got to “cash out” on. Art will always be mass produced by the masses who wish to express themselves artistically. People find art entertaining and are willing to pay a market price for that. When the production costs rest solely on the artist, the market should clear at a much lower price, and there is nothing to say that this price isn’t “free”.


Do read the entire post here. I find it thought provoking.

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A reply to my post on the economics of the $9.99 ebook

A great comment by one of the Hacker news community. A perspective from the publisher. I wonder if it strengthens my argument or weakens it.

************

This is such an uninformed argument, publishing has a narrow profit margin. These companies aren't trying to extort you at 2000% profit like other companies.
The entire publishing process is designed to filter out the chaff. First you need an agent (this is undeniable when some publishing houses won't accept a submission without one) whose job it is to first find publishers that are interested and then to make them pay every penny they're willing for it. When a first time author like Stephanie Mayer gets handed $750,000 for a series, that's because their agent just got handed 75,000-112,000. If you go it alone you'd probably get less than what your agent alone would get.


After the books in the publishing house, it is usually reviewed by like up to 5 editors who give their opinion before it's handed over to one editor who they believe is the best for it. You then get an editor, who through multiple revisions helps the author get the book to a better standard and quite often to more closely resemble the authors original idea.


I've worked with editors, and they're very passionate and put a lot of themselves into the work. This isn't something you're going to get at some slapped together organization. The argument that they're being replaced by digg (in the disaggregate link) is completely laughable, I'm sorry but digg and HN link mostly to articles at websites that all have editors. Just because people aren't committed to one information source and choose their own news (hence why some people get several news papers in the morning) doesn't mean the editors job is done.


Then he argues that it's help authors by allowing them to produce more books... Some authors release a book every few years and some release one nearly every 3 months (Stephen King). This isn't an efficiency model that can simply be stepped up by a new technology. It's an entirely ignorant argument.


This article is just plain bad. No one should sell their work at $9.99 a copy if it isn't going to cover the costs. In the publishing world especially, you should never release a copy for such a low price when the majority of books make most of their money in the first few months to a year when the book is priced the highest.


I hate these articles, because they're always written by people who are so uninformed on the issues. They're by people who assume the end is nigh for corporate publishing, despite the fact that there's been little to no effect on traditional publishing media, in fact global book sales have been on an increase over the past years.

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The economics of the $9.99 ebook

The NYtimes wrote about the issues of the downward price pressure faced by the book industry as a result of the rising popularity of ebooks:

“I love Baldacci’s writing,” wrote one reader, who decided not to buy. “Sorry Mr. B — price comes down or you lose a lot or readers. I’ll skip your books and move on!”

Publishers, of course, object to the lower pricing, citing the reason that printing and shipping are not the main components of a book's costs.

publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. What’s more, the costs of writing, editing and marketing remain the same.

Within that paragraph lies the reason why traditional publishers will not survive the digital disruption. They have not change their operating structure to leverage on the new economics brought on by the Web. Each of the functions cited (writing, editing, marketing) should not be bundled within the same organisation. They should be replaced by light weight services that are loosely connected to each other. Only with such a structure can the $9.99 price point be sustain.

Beyond new structures, we will also see new genres or formats of books that are more light weight and easier to produce. These will enable authors to produce more books. The volume sales will potentially offset the decline in prices. This is what we are seeing in music and mobile applications.

Finally, book sales will likely be only part of an author's revenue. More and more, ancillary revenue sources will reduce the reliance on book sales. This BillBoard article, for example, examines what types of revenue are replacing the loss in CD sales.

The answer is a piecemeal collection of marketing and pricing strategies, multi-rights contracts and performance royalties paid to the owners of sound recordings. Also on the horizon are revenues from multi-rights contracts (currently immaterial but expected to be of consequence in a few years), in-house artist services, and acquisitions or market share gains in music publishing.

I suspect we will begin to see similar situation happening in the book industry, although it is too clear at the moment what are the ancillary revenues accruing to books.

$9.99 might be the new price point that authors have to contend with. The way forward is not be to fight this new price but to reinvent book publishing's value chain to align with this new economics.

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Problem assessing Fred Wilson's blog

I have been having this problem for a while.

I used to be able to assess Fred Wilson's blog freely, like other Web sites. Recently however, I always get a page load error whenever I tried to visit the blog. I wonder if anything is wrong. Help anyone?

Btw, I am using a Mac and firefox.

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The downside of being in public

There is some negative publicity in the Singapore blogsphere right now about the programme that I am part of. I will not debate about the merits of the blog post that started it. Rather, I want to spend a moment to reflect on this incident.

Like it or not, government is a public figure. Like all public figures, your actions will be scrutinize. This is not a bad thing as we need transparency to make sure things are in order. Unfortunately, not all reporting are factually correct, especially in blog posts where it is easy to publish without the relevant fact checking.

The problem with inaccurate blog posts, especially when it is negative is its impact. Many senior folks in the government take things at the surface. A sensational title is all it takes to undo all the hard work the officers are making to help the community.

I also find it difficult to respond to these blog posts. On one hand, you can't be defensive because that will only worsen the perception that you are defensive. On the other hand, you can't just do nothing as your boss will demand some actions. What is a good response? For me, it is engagement. It is to communicate sincerely to see if there are some things that can be done to address any potential problems, issues, situations that spurred the negativity. It is the best solution I can think of.

Anyway, from this, I learn how the costs of being 'evil' will outweigh its benefits. However, what happens when the perception is not representative of the reality and the so call 'evilness' is an empty claim? What can we do?

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Why @tags will not be the next email

I am still thinking about using @tags as a web wide communication tool. As I was discussing this concept with a VC, the immediate reaction from him was: 'so, this is just like email, but done with @tags rather than email address'.

I didn't gave him a satisfactory reply then but after thinking it through, @tags are definitely different from email.

Distributed vs centralisedEmail communication is confined to a destination. If you think about it, that is like the web portal strategy of the 90s. Since everything is going distributed, why can't targeted communication like email be so? @tags may have the highest chance of becoming the default standard to point to people if Twitter continues to become grow.
Open vs Closed
If @tags are distributed, it also means they are more open. This leaves room for third party to start building useful interfaces that helps us organise our soical conversations. Email innovations are few and far in between because it is closed. Innovations cannot happen freely. If @tags opens up the targeted communication channel, we might see more experiments to solve our problems in communication overload (although distributed systems themselves have a tendency to attract more spam and irrelevant comments).

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3 powerful opportunities in next generation media

For those who have not seen it, go to Betaworks's site and view their PowerPoint. It is simultaneously an investment ideal and a manifesto on areas of opportunities in the Web space. It is powered by prezi as well so it is also damm fun to play with.

Betaworks has really nailed it in terms of what a next generation media company is about. It is not about content. It is about using data to create powerful context for users in a distributed manner.

Next generation media will be about creating contextual platforms, data services and auxiliary revenue to let the users do their thing. Media will no longer be centralised. Rather, it will be massively distributed. There will be big rewards for anybody that enables this to happen.

Contextual platforms
Content platforms are as varied as they come. More often that not, content and context are bundled together in the platforms (see Twitter: tweets are content but the timing, the retweets, the @, the favourite etc are all context). Going forward, with content APIs becoming more open, I see pure contextual platforms being the next value drivers. StockTwits and Outside.In are 2 great examples. These service don't produce any content. They take what is out there and layer powerful context on top on it to value add to the content. This is how future aggregation should play.

Data services
I have blogged about the importance of data to media. Increasing, filtering data to uncover new business models and opportunities for individual media producers will be a real gold mine. Real time data analytics will also be where the action is. Services that analyses the data but presents only the nuggets of wisdom will be the winners.

Auxiliary revenueAs media become distributed, so will the services that enable the content producers to get paid. There will be specialised services that focuses on one particular way of revenue generation. Music for example might have services that focus on band tours, some on music merchandise, some on selling of music etc. The important thing is that these services will be open. Content producers will have the choice of mixing different revenue streams to suport themselves. There are opportunities to become the default provider for all the different sources of revenue.

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There may not be a Google for real time search

Comscore released an interesting report about search ad coverage. One key point was that people were using more and more search terms in their queries:

An analysis of comScore data shows that search queries are actually getting longer and that as searchers become more experienced they are using more words per search query.

Based on ths report, John Battelle hypothsised that search query is becoming more and more like natural language, implying that searches are becoming conversations:

In short, our queries are getting closer to real conversation, real natural language, and Google's algorithms are having a harder time keeping up - matching advertiser demand to our increasingly complex queries.

Mark Cuban was pointing to the same path as he writes that search queries can now be framed as Twitter questions, with answers recommended by your social network.

If we assume that social Q&A or real time search will be a revolution in information retrival, will we see a Google equvialent? That seems to be the common perception and Twitter seems to be the most promising candidate.

However, I don't think there will be a monopoly in search as what we have seen in Google. The decentralised nature of conversations may lead to a loose network of recommenders and gurus. Anybody who has a query will be answered by a recommender who in turn will reference a recognised guru. It will a complex web of answers and questions, with the best recommenders and gurus rising to the top.

If that happens, we will not see a Google in real time search. That might be a good thing.

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I just got my first comment spam

Well, it is bound to happen but here it is: my first comment spam.

http://ac-idealog.blogspot.com/2009/04/singapores-online-classified-sector.html#comment-9400432

I guess I should be happy in a way since that implies my blog is significant enough for people to bother spamming.

This got me thinking about how to deal with such issues. This is new for me so I am not sure what to do. How about you? How do you deal with comment spam?

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Opportunities in structuring data for music artists

Data driven business is one of my earlier interest (see my earlier posts here). Exploring how structuring data can open up new business models and opportunities for artists is a natural next step. I keep on coming back to this comment by Taylor Davidson because it struck me as something that is not fully explored:

Data, data, data: TuneCore has realized the opportunity is in creating, facilitating, managing and delivering data. Ethan and Jeff’s discussion of TuneCore’s geographic trending reports highlights the vast, untouched opportunity for professionals to use data to create new business and economic models......

What are these untouched opportunities that come from leveraging data? Here are my thoughts:

Social interactionsUnderstanding and harnessing the flow of social interactions can unlock the many layer of possible relationships. On a basic level, it helps artists to better understand who their true fans are. This can then allow them to structure different incentives for different types of fans. The alpha fans for example should be given the best packages and rewards so that they continue to help spread the content.

The possibilities don't stop there. How about empowering alpha fans to sell concert tickets? How about giving friends group discounts if they all attend the concerts? All these possible if you know the social interactions between your fans.

Collaboration opportunities
With so much data, you can now identify collaboration opportunities based on what your fans prefer. Which other artists do they like, what kind of music they listen to, what is the group size that likes both artist A and B? All these allows artists to create more collaboration opportunities among themselves. Maybe a joint concert, or cross selling each other's music and products, or music collaborations etc.

Cross sell opportunities
Beyond collaboration within music, how about collaboration between musicians and other content types. What if there is data on what other types of mediums do your fans consume? If your data shows that your fans are also game lovers, doesn't it make sense to upsell them a music game? If your fans like to read, why not an emagazine?

I am sure there are more but my brain is dead. What other areas can structured data help the artists?

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• How startups can help the comic industry (ac-idealog.blogspot.com)
• Taylor Davidson: Relationship "contracts" need to be based on our inability to predict the future. (via Unstructured Thoughts by Taylor Davidson) (unstructuredventures.com)

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How do we overcome obscurity in this age of abundance?

Continuing from my post on piracy, I wanted to think more about the problem of obscurity. How do creative folks (musicians, artists, photographers, writers etc) overcome it in a way that gives a better return on people's attention? Are the current tools sufficient or are they the next generation equivalent of spammers? How else can a creative do to connect to the right people?

The following is more of my unstructured thoughts. Looking forward for someone to structure it and make them more useful.

Build a more adaptive product
When everything is abundant, the only way to stand out is to be the best in your niche. That doesn't mean having the best product from day one. It implies you need to have a process for constantly adapting to the needs of your niche. That means better feedback system and a more responsive way of production.

Connect to a network of talent
Related to the point of a better product is the issue of renewing talent. As a creative talent, you need to constantly refresh your skills and the best way to do it is to be part of a talent network. A good talent network has good diversity to encourage serendipitous learning that is cross industries.

Better communication tools
Current tools of communications such as Twitter and Facebook are becoming platforms for shouting contests. If some creative folks want to communicate their new works to people, their only hope is essentially to be as loud as they can. This, to me, is a signal that these tools are failing. They don't help to connect the right people together.

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Admin note: feedback needed on new design

Dear readers,

I know my current template does not give the most pleasant reading experience. Hence, I am now working on a new design. You can preview it here:

http://ac-testing.blogspot.com/

Would appreciate if you have any comments/feedback on the new design as well as suggestions on what would you like to see.

Thanks in advance.

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Can Amazon be the default payment API for the Web?

The Web badly needs a default payment mechanism. Victor Keegan of the Guardian made a very good point about the importance of payment to a health economic system:

Lots of economists argue that the digital economy - in which the cost of producing extra units is zero - is forcing prices towards zero. Poppycock. If you look at the three main arms of the digital world, it is only the web that has trouble making prices stick. The other two - mobile phones and virtual worlds (where all goods are digital) - have flourishing economies. Why?

Because the internet arrived in this world without a micropayment system, whereas the other two have them built in. This is why kids who don't pay for music online will pay £2.50 for a ringtone, why emails are free but text messages can cost 25p. It's why SeeMeTV pays users for uploading their videos to phones while YouTube doesn't. Flirtomatic sold nearly $1.5m (£1m) of virtual roses in 2007 and Second Life expects virtual transactions to soar from $350m last year to $450m in 2009.

One thing about payment is making it easy. On the iPhone, once you have entered your credit card number, you are good to go. Buying is then as simple as touching the purchase button. If we take this to the Web, which company has our credit card and our trust? Amazon. It is much easier to buy from Amazon than to go to a bookstore.

Mark Cuban made the same point when he says that newspapers need to get the credit card numbers of their readers in their database. But newspaper are already late into the game. Amazon has the best chance of scaling their payment across the Web. They have done so for the rest of their infrastructure. Why not payment?

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Piracy means failure in business models

A NYtimes article reports on how piracy is coming to books. The popularity of digital reading devices have inevitably created a demand for free ebooks, which in turn has spawn a market in illegal book scans. To counter this problem, publishers are now resorting to suing their users.

All these sound too familiar. We have seen it happening to music, films, games and now books. However, nobody in traditional media seems to learn anything despite the painful lessons that history is showing us.

Piracy implies latent demand. People want these goods but are unwilling to purchase them at the current price. This is a huge opportunity. It points to the need to radically reinvent our business models to fulfill these latent demand in a way that brings value to the entire ecosystem. It is not simply making money. It is about finding ways to make everyone better off.

In this age of abundance, piracy is actually not the worst problem facing the creatives. It is obscurity. With so many competing factors for our attention, it is getting increasing difficult for any new act to stand out. That is the most challenging problem creatives have to handle.

Currently, the most sensible model is to set your content free to win attention from fans. With sufficient fans, we can then talk about value capture which will increasingly be based on ancillary revenue streams. This NYtimes article describes how American Idol is learning from sports league to increase their revenue in times of falling ratings. There are many lessons in there that is worth noting.

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How startups can help the comic industry

I have been a big comic fan for the longest time. In my room sits boxes of comics, including classics from the Silver age era. Needless to say, I am a big comic geek.

Like all media, the comic industry is undergoing drastic changes. The traditional comic books, for example, are now experiencing problems. In January, the Diamond Book Distributors raised its minimum advance orders from comic stores to $2,500 (from $1,500) before willing to distribute a title. This means independent artists will find it harder to break into traditional channels, which are gearing towards block busters. Sounds like a familiar problem?

Comic strip artists don't have it any better. Traditionally, they depend on syndication models from newspapers as their sole revenue sources. However, with newspapers in trouble, many artists are finding their only income becoming less and less dependable.

Fortunately, the comic industry has seen more business model innovations than the other media sectors. Online syndication models like comics.com are becoming a network play, where content is aggregated and reverse syndicate to other places. The only weakness is that they have not found a revenue model to reward the artists.

We are also starting to see different examples of artists diversifying their income streams, like what we are seeing in music. This NYtimes article hints at these diverse examples. The common element is that the content is given away for free but earning back through the following:

- Fans can purchase books, calendars and other items featuring characters from the comics

-Garfield.com allows fans of Jim Davis’s strip to send cards via e-mail, play online games and download screen savers

-Visitors to Dilbert.com can download widgets for their Web pages or replace the punch lines of the strip’s creator, Scott Adams, with their own

-The creators of the comic strip “Zits,” which is syndicated by King Features, are working with Jantze Studios in San Anselmo, Calif. , to develop “audio comics,” in which a camera pans over a strip while actors read the text

All these are examples of how artists are creating new revenue streams. However, they are mostly unique instances rather than common practices. As startups, how can we help?

- Create services to help bring these new revenue streams to all artists. Each of the above examples can be made into a real businesses. We need startups to bring about all these new ways of earning money.

- Create mobile services that can monetise user generated comics. Let the artists' works be the base and allow users to remix and resell them on the phone. As I mentioned before, mobile has a proven model in generating revenue for user generated content. We should leverage on that to create new income for artists.

- Enabled comic artists to build their fans base easily. This means they need tools like those from TopSpinMedia, BandMetrics etc but for comics. As Taylor Davidson said: the vast, untouched opportunity for professionals (is) to use data to create new business and economic models for the music (comics) industry.

- Finally, look at the process for a self publishing comic artist. How can startups value add to this process? It is beyond efficiency. How do we create different forms of organisational structures like markets, networks or communities to power the next generation of comic creation, distribution and consumption?

I really do love comics and I hope that startups can help to revitalize this industry that means so much to me (and I am sure many others). If you know of any startups creating new innovative services, do cite them in the comments section.


Related articles
Selling Grows Rougher for Small Comics Publishers
Comic Titans Are in the Grips of the Dreaded Inflationist
The Comics Are Feeling the Pain of Print
A Self-Publishing Comics Primer

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Admin note: carnival of mobilists #173

Carnival of the Mobilists #173 is up at Radvision

http://blog.radvision.com/voipsurvivor/2009/05/11/welcome-to-the-carnival-of-the-mobilists-173/

One cool section are the posts on data. As mobile services shifted from voice to data, we will seeing lots of innovations in this area. If you are interested to know more about this shift, do check out the carnival.

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Different examples of Shazam for image

Via the 7th Mass Media Blog, I came across this impressive set of revenue numbers for the service Shazam:
Shazam now has 35 million users in 60 countries and they get 1 million "tags" (music identifiation requests) per day. ..... Even if we say their global average cost is 30 US cents per tag, that works out to a very impressive 109 million dollars in annual revenues.

Shazam represents a different paradigm for mobile search. It is what I called 'point, snap and retrieve'. On the mobile, a user doesn't want to see a list of results, they want answers to what they are looking for. They also doesn't want to enter long search terms, they want to click a button (like snapping a picture) and get the results.

As I wrote about it here, the concept of Shazam is applicable many niche areas. If we look at how search in Internet has splintered into many forms of specialized search like vertical search, real time search, people search etc, I believe the same trend will happen to mobile information retrieval.

Here are the some of the examples currently in the market. They are the forerunners of what I believe to be a very big opportunity in the future.

Product Search for CDs, Books and Games
When you see a book, CD, DVD, or game at a friend's house you want to look up and bookmark instantly, fire up SnapTell Explorer on your iPhone and take a photo of it..... SnapTell automatically looks up your item and gives you links to Amazon, Barnes and Noble, Wikipedia, and straight-up search engines so you can compare prices and find out more about it.

Logo search
When a brand-specific SnapTag with a call to action is placed on an advertisement, consumers can use their mobile camera phones to access branded content, timely information, promotional opportunities, discounts, retail location finders, sales opportunities and other branded interactions.

Font Search
Ever seen a great font in a magazine ad, poster, or on the web and wondered what font it is? Whip out your iPhone and snap a photo, and WhatTheFont for iPhone will identify that font in seconds!

Bird/Tree/Nature Search (idea)
That’s what I want to be able to do. Identify a tree or a flower simply by pointing a phone at it and tapping “tag”. Identify a bird simply by letting the phone hear its call and tapping “tag”.


What other services or ideas have you come across that users the concept of Shazam for image?

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The era of API driven startup

I read an interesting article that outlines how APIs are changing the face of all businesses, not only that of web companies:
These are Fortune 500 companies in retail, travel, media, telcos and even healthcare. Their level of understanding ranges broadly from those who know what they hope to achieve by creating an API program and have established measurable goals, to those who aren’t quite sure what they will achieve, but know there is something out there happening and they want to be a part of it. They all know they need to do something new, different, and big to change their business. And APIs are going to play a role.

As I think about this, I begin to outline how does an API driven startup looks like. Are APIs the means to achieve edge competencies? How will it affect product development, marketing and business models etc?

Product Development
Product development start at the API level. Charlie O'donnell, in 2007, has already stated that an API driven product is the most appropriate model for a world of small pieces loosely joined, aggregated, remixed, mashed up. If you build it correctly, your product frontend should be created by your backend API. In that way, your service can exist in as many platforms as needed.

Related articles
"Excuse Me" APIs: Why most Facebook apps disappoint
API-First Design


Marketing
An API business designs its marketing around different principles. It focuses on cultivating the edge, empowering them with know-how, with clear roads to financial success, with ways to improve their skills. It also means measuring how APIs contribute to key metrics such as lower customer aquisition costs and higher revenue. Don't ever treat API as a cost centre.

Related articles
APIs Are The Next Marketing Platform
Netflix App Gallery puts API enabled innovations all in one place
Open for Business: Best Buy’s Social Technology Strategy
Nokia Cuts Staff, Refocuses Its Services Push


Business Models
Like product development, business models for API are build within the company from day 1. What will be your business model? Will it be Pay Per Call, Flat Monthly Fee, Open Source Support Model, Ad Placement, Syndication Partnerships or Free? Will you separate between commercial and non-commerical use? Let the latter encourage experimentations while using the former to capture the resulting value.

Related articles
How do you monetise your API


As we move to the API economy, there will be many changes to how businesses operate. If you have experiences to share, do leave them in the comments.

Thanks for reading!

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Where will open financial data lead us to?

Freerisk is really a cool startup, attempting to liberate financial data for all to reuse easily. I have not tinker with it but I can imagine the kind of value it can potentially release.

I can imagine the power finally being taken from rating agencies. People who are capable of producing better risk models will surfaced and be celebrated as rockstars. We will see covestor type of models emerging that reward superstar financial modellers.

I can imagine many interfaces/clients being developed. Clients that lets users better understand what financial data means, alert them to risk factors, and highlight potential investments. Hopefully, all these will give people better ideas on how to invest in stock market.

I can imagine new forms of institutional funds created around new risk models that are proven by the community. Maybe we will see funds having voting mechanisms that let their investors vote on which risk model to follow, rather than blindly following what the current rating agencies recommend.

I can imagine different communities forming around the new knowledge unleashed by the open financial data. Communities that specialize in uncovering hidden handshakes, communities that voice out how green companies are, communities that want to know how well employee benefits are. Once we make it easy for communities to form around these new social objects, there is no telling what kind of groups will rise up and shed more light on things we need to know.

I can imagine metadata being added, remixed, combined etc with financial data to let us understand more. There will tons of mashups being done. Some smart folks will create light weight publishing platforms to support research analysts doing independent research.

I can imagine much more things.

What can you imagine?

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Surprising results about ebooks from Google Trends

I have blogged about the rising interest of ebooks and even suggested a few startup ideas. As part of my ongoing research, I wanted to know which geographic area has the most interest in ebooks. As a proxy, I dig into Google Trends to see where ebook searches are coming from.

The first obvious thing is that there are more searches now on ebooks. This is not surprising given the proliferation of devices like Kindle and the iPhone that enable mobile reading.

What surprises me is the next chart that ranks the regional interest in ebooks. Unexpectedly, the countries with the highest interest all came from Southeast Asia. I had initially thought that US and Europe would have stronger interest but the data has shown me otherwise.

As I dig deeper, most of the interest in ebooks were coming from the desire to find free ebooks. This is not unexpected given that most of the countries in this part of the world desire free stuff. However, it also signals that there is a demand for ebooks in this region. It is just that nobody has figured out the right business model for it. That is a huge opportunity.


My next step was to explore the demand for ebooks on different devices and whether that demand is evenly distributed across the world. I first look at kindle ebooks and found that most of the interest came from US and Europe. Asia, on the other hand, doesn't seem to have strong demand for ebooks on Kindle.

I then look at the demand for ebooks on iPhone. Surprise, surprise. The regions with the most interest comes from Asia, not US or Europe. The top 5 for example are mostly countries in Southeast Asia. This caught me off guard as I didn't think there was such strong interest here. This also gives me comfort as I am currently developing a service that attempts to do for authors what TopSpinMedia is doing for musicians, but on the iPhone platform.

These are just rough findings but they have taught me something new. What I want to find out next are the categories of ebooks that are most read. If there is any information you want to share, do leave them in the comments.

Thanks for reading!

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