Three Rules of Free

Tom Evslin writes:

Todays three rules are for those who want to be in the business of establishing a new category by providing free goods or services via the Internet. This is an exponential-curve hit business. The vast majority who try it will fail. The success of the few is spectacular.

The twin lessons of Internet Bubble One are that the free strategy CAN work spectacularly because of friction-free distribution via the Internet AND that the free strategy USUALLY fails.

The winners have three things in common:

1. They lead their category;
2. There is almost no incremental cost to them of providing another unit of whatever it is they give away free;
3. They change the way their users do something which is significant to the users.

The losers fail one or more of these three tests.

Future of Mobiles

[via Telepocalypse] Tomi Ahonen looks to the future of mobiles:

I argued that in very rough terms and considering the performance and specifications, a mobile phone of today will be like a laptop computer 5 years ago; a desktop PC 10 years ago; a mainframe computer 15 years ago; and a supercomputer 20 years ago. With Moore’s Law we can expect those trends to roughly hold true into the next 20 years. So to see roughly what kind of processing power we can expect from top-end “smart phones” of 2025, we can look at a supercomputer today – such as the IBM BlueGene/L, which as 16 Terabytes (=16,000 Gigabytes = 16 million megabytes) of memory and which runs at 70,000 Teraflops (=70 Trillion floating point operations per second) of speed.

But such numbers are rather meaningless without context. I gave trends in the form factor of a typical “fashion phone” ie a small pocketable or smaller phone; and what kind of services and applications will become possible in those technical environments. Here are snippets into the future I imagined:

In 2010 the typical mainstream mobile phone will be 3.5G phone with a 5 Megapixel optical zoom cameraphone with WiFi type speeds and built-in TV tuners, and a gigabyte size hard drive (like today’s i-Pods). The smallest phones are the size of a thick credit card. Credit cards merge with the mobile phone. Music and videgaming industries earn more from direct downloads to mobile phones that from sales of CD/DVD/gaming CDs in record stores/video stores. Mobile payments are commonplace for parking, vending machines, public transportation, lotteries, movies.

Google as Longtailer

Chris Anderson quotes Eric Schmidt, CEO of Google:

We took a look at our market last year and asked ourselves: how are we doing? If you look at the advertiser, the market we’re in, how do we do from the largest companies – Wal-Mart – in the world, all the way down to the smallest companies in the world, the single individual. We call this The Long Tail. A lot of people have been talking about it–it’s a very interesting idea.

We looked at this and we said, we’ve been doing really well up until now in the middle part of this. Well-run, mid-sized businesses, smart people solving interesting problems. But how well do we do against the problems of the very largest customers? So last year we brought out a whole suite of tools for very large advertisers who can use our services in all of their divisions to generate lots and lots of revenues because, of course, in our model the advertising drives predictability, it drives conversions, and so forth.

And what about the individual contributor, the small business, the company where Joe or Bob is the CEO, the CIO, the CFO and the worker and the support person–a one person company, a two-person company, a three-person company? We built a whole bunch of small, self-service tools which allowed them to almost automatically use this service.

So [we went] in both directions last year. By going all the way to the top, we were able to capture very large and historically underserved businesses as well as a whole new area that never had access to these kinds of online services.

Innovative RSS Usage

Charlene Li asked: “Im doing a research project on how marketers can/should use RSS and am looking for any non-blog related uses of RSS. For example, Purina has RSS feeds for updated Web content (e.g. dog and cat care advice), and coupon or bargain sites like Slick Deals and TechBargains also have RSS feeds of their sites content. Ideally, Id like to find examples of marketers using RSS as a substitute/alternative to email newsletters, or using RSS as a way to ensure deliverability of information or promotions.”

She got quite a few in the comments section of the blog post.

Blogging Software as Website Platforms

Fred Wilson suggests:”Most people still think of Typepad and Moveable Type as blogging platforms. But I think they are the future of websites.”

Jeff Jarvis adds in a comment:

I think it’s half the platform. The other is RSS. In the job I left yesterday, one of my undone projects was to convert the architecture of local news sites entirely to RSS: Everything is a feed. So a home page is a feed of latest and biggest stories. A town page is a feed of newspaper headlines, blog headlines, classified ads with the latest listings in the town, forum thread headlines, weather, and so on. Looked at that way, there are two kinds of content in the world: reference (fed by wiki) and feed (rss, fed by blog software).

Then the overarching thing one needs is an architecture for finding things. That was navigation and taxonomy. It may — emphasize may — shift to search and tags.

Michael Parekh also has a commentary.

TECH TALK: Disruptions: Info Access, Publishing

Info Access: HTML, Search to RSS, Subscriptions

The last decade has seen the rise of the HTML Web. To navigate this web, we first used a mix of our memory and bookmarks. Then, we migrated to Yahoos directory as the number of websites exploded. Then, we had a brief love affair with the first-generation of search engines, followed by disillusionment. And finally, we found our true love with Google, so much so that we have ditched everything else! Search has become our interface to the HTML Web. But this is about to change.

The new kid on the block is RSS, an XML format that makes subscriptions easy. Microsoft embraced support for RSS across its forthcoming Longhorn OS and browser effectively making subscribing, via RSS, join browsing and searching as the third leg of its information-access triangle, as eWeek put it. RSS is a format that lends itself easily for display on mobiles also.

The holy grail lies in connecting information seekers to information providers. Today’s solution to the problem of information overload is Search (just like it was a Directory during 1995-1997). Search is good on PCs but suffers from spam. Also, destination sites are HTML pages. Business model for the reference web on PCs is contextual advertising. Search cannot be easily transplanted on mobiles and is also not good for the incremental web. Subscriptions are user-defined filters on the web. So, they are spam-free. Subscriptions equate to Personalisation. Everyone becomes a publisher and subscriber. Content owners will need to focus on permission marketing. As such, there will be no advertisers. Users can, of course, continue to search for information (on PCs) but when they find a website/source with useful and relevant information, they will subscribe to that source.

Publishing: Top-down, Broadcast to Bottom-up, Narrowcast

Business Week called it The Power of Us. Umair Haque calls it Peer Production. Whatever term we use, publishing is going mass-market with the rise of blogs, podcasts and the like. All one has to do is to look at Wikipedia and the rise of open-source software to get a feel for the power of the sharing economy.

Yochai Benkler puts this in perspective [in an interview to Business Week]: With the steam engine, the archetype of the Industrial Revolution, we moved to industries where the physical capital was relatively concentrated. You had to have financial capital in order to enable effective collaboration between individualsWhat we’re seeing now is cheap processors, which put computation on our desktops and in our laps, cheap storage, and ubiquitous communications. It’s this combination of a low-cost personal computer and the Internet…that allows this aggregation of behavior. Things that would normally just dissipate in the air as social gestures come to have some persistence as economic products. This departs radically from everything we’ve seen since the Industrial Revolution.

Tomorrow: Software, First Markets, Putting It Together

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