Wednesday, 30 April 2014

The curious case of the broadcasters suing Aereo; when all parties actually benefit!



Consumers benefit with better tv viewing experience.

Consumers gain by having another choice, for better tv viewing experience.  Yes they do pay for it but it is a choice.

With Aereo, tv broadcast reaches wider audiences.

Over-the-air tv does not reach all locales with the same quality, some not at all.  With Aereo, they do which means a wider reach of viewers.

And that makes the advertisers happier.

Which ought to delight the broadcasters.

Instead they pull a long face!

Strange when customer service is actually improved for their clients

Without the broadcasters paying a dime

The internet is simply another delivery channel.  With Aereo, the broadcasters are ‘actually’ improving customer service without spending a dime.  Aereo builds it, takes all the risk so anything wrong with them trying to make money out of that?

Actually it’s a brilliant business ‘arrangement’, just that the broadcasters don’t know it yet!  And have you seen better symbiosis?

So is it really about power, control, fear of change or moaning feeling small for not being the one to innovate?  If it’s your kids showing such traits, you’ll surely send them to their room without supper!


p/s: Should the broadcasters keep to their threat to terminate over-the-air transmissions if Aereo win the Supreme Court’s judgement, there’s yet another benefit – the freed wireless spectrum.  It ought to be turned over to broadband providers anyway.  In time, all media (tv, radio, text, video, voice] will flow through broadband including over-the-air transmission.


Wednesday, 23 April 2014

The simple model; a digital strategy



Not a business model but much used by tech companies, notice the clean uncluttered look (websites)?  There are reasons.

It didn’t start this way.  Dot.com’ers treated their website as valuable real estate, plastered with as much content as possible.  With no reference, they looked to newspapers for inspiration, thus the sated complex look.  But this wasn’t the way the internet model worked.  Simplicity is at the heart.

This has to do with the innately competitive nature of the global internet.  As the internet took off circa 2005 meaning number of users increased and internet commerce took root, the borderless environment meant your competitors are only a click away.

This changed everything.

Customer service became paramount and in internet commerce, redefined.  In traditional business, it has always been important, that’s what they say but in reality it’s the last item on the list while for tech firms, it’s near the top.

Customer or user experience now provides a competitive edge.  It is the quality of users’ interactions on a website and how quickly an act can be completed.  Speed, how easy and pleasing it is to use is now a digital strategy.  Simplifying it is crucial.

You probably have clicked to another site because it was cumbersome or slow.  To reduce such disasters, reduce friction. 

One is speed.  Google search is already fast but according to the product manager in an interview, he has an annual multi-million budget to shave micro-seconds off it.  Market-speak?  In fact it was Google’s search site that first got me thinking about the minimalist search box-and-nothing-else model.

Such a look is intentioned so a user goes in, execute and get out quickly. No distractions.  Bland quickens.  Clicks are minimised.  Obviously for media sites it’s different but new-gen news sites such as qz.com have a streamlined look.  Quite a contrast from the tiring first generation sites that makes you click through as many pages as possible to increase hit rates and expose us to more opportunities for ads.

This simple approach has also shaped recent startups.  Browse AirBnB, Indeed.com, Trulia, Flipboard.  It has entered the realm of business.

The business of digital

“First, because they've amassed so much data, Y-Combinator partners can, for some critical early decisions, tell you that one option is much more closely correlated with success than another. One example -- at my last company, a sizable contingent of people believed that the way to move more quickly is to be more deliberative, more careful, more judicious with precious engineering resources, and plan in more detail before building something so that we could be sure we were building the "right" thing -- IE, "measure twice & cut once." Not an unreasonable position, but one that always sat not-quite-right with me. The YC partners make it pretty clear that their data suggests the opposite: you're much more likely to succeed if you get something -- anything -- even if it's the wrong thing -- built as quickly as possible. That gave me the confidence to embrace that strategy wholeheartedly.”

Conventional wisdom says business plans must be carefully completed, in detail.  But it seems with internet commerce this may not be so.  Fascinatingly but this was first observed in the beginnings of the internet.

Just as the nascent internet showed promise, several jumped in vying to become THE global network.  IBM had their SNA (1974).  The International Telecommunications Union developed the OSI (1978).  They intended to design better technology (they did) and this meant a more complex design.  In contrast, the internet is simpler.  Today, just about all networks are based on internet tech; in homes, offices, telcos.  Simple won.

Simplicity continued in the software that runs the internet.  You will hear this among programmers ‘Rough consensus and running code’.  It’s what I call the reverse 80/20 rule, get 20% of the specification done and get it going.  It doesn’t mean the software is only ever 20% complete but to start.  This became a philosophy, even to tech entrepreneurs.  That’s why the new gen online companies start as though they are an experiment!

Translated

With complexity versus simple, err towards simple to get it going.  Isn’t this part of agile and lean startup, the latest management techniques?  Be mindful that we were brought up in an age of complexity. 

Use the 20/80 rule as a guide.  When designing a digital platform, specify it less completely then launch it.  Let the market add other features.  Never wait till it’s 80% complete.

With websites, streamline the user experience.  Apply what I call the 2-click principle.  It’s not possible most of the time but this is a way of saying - minimise the number of clicks when designing digital processes.  But getting to within 2 clicks is great.  No clutter, no distraction.  Move everything that’s not connected to the task elsewhere.  Company information shouldn’t be on the homepage.

Use personalisation.  When applied to website design, it is the ability to capture a user’s browsing habits in order to use that information to improve his experience by reducing his site navigation effort.  If a customer usually navigates 4 levels down to a specific brand of lipstick, let her do it in 2 clicks the next time.  And really, websites should be the domain of business development or sales, not IT.

Many sites and digital stratagems can be made more effective.  The simple model is one guide.


 




- - - -  first version below for posterity - - - 

Not a business model but it’s much used by New Economy companies, noticed the clean uncluttered look (websites) of the newer digital start-ups?  There are reasons for this.

The early dot.com’ers didn’t  adopt the simple design, rather they seem to treat their website as valuable real estate, plastered with as much content as possible.  With no reference, they looked to newspapers for inspiration, thus the sated complex look.  But it wasn’t the way the internet model worked.  Simplicity is at the heart of internet culture.

Perhaps this has something to do with the innately competitive nature of the global internet.

As the internet took off meaning number of users increased and internet commerce took root, the borderless environment meant your competitors are only a click away.

This changed everything.

Customer service became paramount and in internet commerce, it is redefined.  In traditional business, customer service is always important, at least that’s what they all say but in reality it’s about the last item on the list while in the New Economy, it’s near the top. 

User or customer experience now provides a competitive edge - it is how quickly an act can be completed, how easy and how pleasing it is to use - in a digital strategy.  Simplifying it is crucial.

As I, you probably have clicked to another site because it was cumbersome or slow.

To reduce such disasters, they continually reduce friction.  The first is speed and I’m not even referring to access which obviously must be fast.

Google search is already speedy but according to the product manager in an interview, he has an annual multi-million budget to shave micro-seconds off it.  Market-speak?  In fact it was Google’s search that first got me thinking about the search box-and-nothing-else model.

Such a bland look is intentioned so a user goes in, execute, get out, the quicker the better. No distractions.  Bland quickens.  These days they don’t hope for ads on the website, even for ad-based Google unlike the dot.com’ers.  Clicks are minimised.  Obviously for media sites it’s different but again new-gen news sites such as qz.com have a streamlined look.  Quite a contrast from the tiring first gen sites that makes you click through as many pages as possible to increase hit rates and expose us to more opportunities to ads.

This simple approach has also shaped recent startups.  Browse AirBnB, Indeed.com, Trulia, Flipboard.  It has entered the realm of business.

“First, because they've amassed so much data, Y-Combinator partners can, for some critical early decisions, tell you that one option is much more closely correlated with success than another. One example -- at my last company, a sizable contingent of people believed that the way to move more quickly is to be more deliberative, more careful, more judicious with precious engineering resources, and plan in more detail before building something so that we could be sure we were building the "right" thing -- IE, "measure twice & cut once." Not an unreasonable position, but one that always sat not-quite-right with me. The YC partners make it pretty clear that their data suggests the opposite: you're much more likely to succeed if you get something -- anything -- even if it's the wrong thing -- built as quickly as possible. That gave me the confidence to embrace that strategy wholeheartedly.”

Conventional wisdom says business plans must be carefully completed, in detail.  But it seems in internet commerce it may not be so.  This is fascinatingly but first observed in the beginnings of the internet.

Not many are aware but in the early days, just as the nascent internet showed promise, there were several initiatives vying to become THE global network.  IBM had their proprietary SNA (1974) while the International Telecommunications Union developed the OSI (1978).  They intended to design better technology (they did) and traditionally this meant a more complete design.  In contrast, the internet’s is simpler.  Today, just about all networks are based on internet tech; in your homes, offices, the telcos’.  Simple won.

Simplicity continued extending to the software ecosystem that powers the early internet and now most internet software.  You will hear this among programmers ‘Rough consensus and running code’.  It’s what I call the reverse 80/20 rule, get 20% of the specification done and get it going.  It doesn’t mean the software is only ever 20% complete.  This became a philosophy, even to entrepreneurs in the internet economy.

Otherwise your competitors will be upon you in a flash.

And perhaps this is one reason many new gen online companies start as though they are an experiment!

Translated

Complex versus simple...be mindful that we were brought up in an age of complexity but has now entered another that thrives on simplicity.  In the complex versus simple argument, err towards simple to get it going.

20/80 rule...use as a guide.  If you are designing an open platform to engage clients for your site for example, specify it less completely then launch it.  Let the market add other features.  Never wait till it’s 80% complete.

“A website is not the face of a company, it is the company”

Websites...streamline the user experience.  Apply what I call the 2-click principle.  It’s not possible most of the time but this is a way of saying - minimise the number of clicks when designing processes.  But getting within 2 clicks is great.  No clutter, no distraction.  Move everything that’s not connected to the task elsewhere.  As example, company information shouldn’t be on the homepage.  Use personalisation.  If a user usually goes to a particular section, bring that into his ‘homepage’.  If she usually navigates 4 levels down to a specific brand of lipstick, let her do it in 2 clicks the next time.  There is so much one can do.  And really, websites should be the domain of business development or sales, not IT.

Many sites and digital stratagems can be made more effective.  The simple model is one guide.



©Thet Ngian Chen, internetbusinessmodelasia.blogspot.com (2014)

Thursday, 10 April 2014

Marketing & sales without a budget; 4 cases



This sound like hype but it is being used.

Going viral is much-talked about but it requires a huge dose of luck and mostly it comes unexpectedly.  There are more reliable ways to use the internet for marketing.

We already know about Craiglist, YouTube, Pinterest. And social media has oft been discussed so they won’t be included here.  Instead the four cases show uncommon methods.

To reach the crowd, use the crowd. 

Threadless use the crowd extremely effectively in its business model.  It started by inviting online submission of T-shirt designs which are then voted by everyone.  The most popular designs are manufactured and sold.  No marketing or sales budget, it is carried out by word-of-mouth and the internet.  No middleman so margins are high, prices lower.  No design cost.  No market research cost.  It is also precise, capturing market trends innately.

     Crowdsourcing; why it works

Nakedwines.com is another.  According to the CEO, most winemakers make very little with 90% of the cost of wines going into marketing and the middlemen in an interview on Bloomberg West in April 2014.  It uses crowdfunding to finance winemakers who in turn supply the wines, typically at 25% to 50% off retail prices directly to consumers.  Marketing and sales is through the funders and word-of-mouth removing layers of middlemen.  The winemakers make more, the consumers pays less.

A small-ish local software house (Asia) I know that used to serve mainly clients in its home market started using the open source model to reach a global market.  It previously burnt millions on a US office.  The CEO tells me he gets 1% conversion from the thousands of downloads of his free software but that’s good enough for sales in the millions.  He pays nothing for global marketing and sales, no overseas office.  The open source model is not limited to software firms and has been used by
‘Liter of light’, a social enterprise to spread adoption and even car makers.

TED created a free license for others to host local conferences, called TEDx.  Now TEDx events are held every day somewhere in the world.  These events add lustre to the main conference rather than dilute them.  This made the TED name a global brand at no cost.  It attracts as speakers tech’s top founders.

All of them rely on the crowd.  Obviously, the use of the crowd (and its various methods) depends on the type of business.  And it takes effort to conceptualise and build the mechanism, business processes and engagement platforms to do that.

But it’s worth the effort, it can be used on many aspects of a business; branding, logistics, market surveys, R&D, logistics, etc.  Somehow, a very small portion of the crowd, perhaps 0.001% is willing to do things gratis or for social currency instead of cash.  Tap them.

I’ll end with an example to illustrate even simple methods.  Messaging apps like WeChat and WhatsApp have a short message in the profile that is really used to introduce oneself but one can use it to advertise.  I see it used mostly by agents selling property, cars and insurance.  But it must be specific eg. selling Peugeot cars.  With WeChat which has a proximity-based function (‘People Nearby’ list users within the vicinity of the phone user), eatery or retail shops within a mall could use it, say with discounts to try to pull them in.

There are other examples.  I’ll start working on a fuller treatment of this ‘commentary’.  I hope to hear of cases from you that I could use in that future post...tommi.chen@yahoo.com.


See also the-value-of-free, a generic treatment of ‘free’ in the internet economy: