Anders Lindh writes: “The challenges in service innovation will all be about relevance and context. Sure, social bookmarking is a great thing on my desktop, but its not a killer mobile service. Google does a great job in finding millions on entries for some particular query, but in a mobile context Im interested in one often very specific answer. Online maps and real-world-service-location become interesting only when my actual physical location is taken into account, even when moving around at greater speeds. I prefer to write blog entries from my desktop, but reading them while on the move will become more common. This leads to a great dependance on relevance, as the small screen greatly puts a limit on the amount of information that I want to be exposed to.”
Month: March 2006
Software Venture Capital
[via Sadagopan] Matt Miller writes:
The mood among VCs remains hesitant about enterprise software startups. Competing against today’s megavendors is tough. The last investment “bubble” funded plenty of strong small and mid-sized vendors who are still waiting to be acquired with many stagnating. Perpetual license models are a slowly dying business model, but the much-hyped Software as a Service (SaaS) model is still more conjecture than reality in the core software sectors.
Yet software companies received $4.7 billion in venture capital investment during 2006. That’s more than biotech, alternative energy, or any other sector.
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2006 looks like it will be a solid year for software investment for two reasons. One, we aren’t yet seeing a bubble that is funding a lot of unworthy companies. And two, we aren’t yet overfunding hot categories.
Economist China Survey
The Economist writes in the introduction of its survey on China:
There is no other important country whose likely trajectory over the next 20 years is more uncertain than China’s. Possibilities include:
An economy that continues to boom as the political system gradually becomes more liberal and China becomes an increasingly positive force in the world; A fast-growing economy, a surge of vengeful nationalism and an attempt by China to displace American power in Asia, regain Taiwan and challenge Japan; A country in disarray, engulfed by social and political crises as its economy slumps. All are plausible. Much will depend on choices made by China itself and by other powers, especially America.
TECH TALK: The MySpace Story: Founder Talk
In an interview with Forbes in January 2006, the MySpace founders talked about their marketing strategy:
How do you get 46 million people to find out about your product without buying advertising?
DeWolfe: It was really key to create a set of functions that were compelling to our users and an efficient way to use them. Users socialize to figure out what theyre going to do on the weekend. They use MySpace to discover new music and post events. Musicians upload their music. People use it for entertainment purposes or to sell goods in the classified area. MySpace makes what they do in the offline world a) more efficient or b) more interesting.
Anderson: We didnt do traditional marketing, but we did try to find photographers and creative people because we thought that would make the site more interesting. In the beginning, it was all Los Angeles–actors, photographers and musicians. That made for an interesting community, and brought in a lot of people. A lot of the early growth, however, had to do with the features and what our competitors were not allowing people to do.
Music has become particularly important to MySpace. How did you attract over 660,000 artists and bands to the site?
DeWolfe: Tom has a deep passion and understanding for what emerging musicians go through. He understands the frustration. I understood the macro trends of the music business. Labels were signing fewer acts, giving them less time to prove themselves and spending less money on marketing. We saw a need to develop a community for artists to get their music out to the masses. With MySpace, when they went out on tour, they could actually tour nationally. The band might have 20,000 friends on their list and send out a bulletin saying, Im going to be in Austin on Tuesday night. Come see our show. It has allowed bands to make money on music without having a deal.
Here are excerpts from a Buzztone interview Tom Anderson:
MZ: Social networking sites have become a phenomenon, what do you think is the fascination behind these sites? Why are they so popular?
Tom: Well there’s something old here and something new. The old is that it’s simply socializing. Most everyone loves to socialize, and that’s what MySpace and other sites let you do. What’s new, of course, is the way you socialize, via the computer. I’m well-suited for MySpace, because I’m the sort of person who grew up socializing online – from the time I was 12 I was using a modem to talk to people via message boards and various forms of chat. For me, it’s perfectly naturally, and actually preferable in many ways to make friends online. Even today some of my best friends are people I met as a teenager in my room with my 300 bps modem. It’s preferable for a few reasons – I can meet different people then I’d meet in real life, and I can meet people while I’m doing something else. I’m not the sort of person to go a party or a club and mill about looking for new people. But I could be doing my homework, working, or anything on the computer and come across people that I can message and IM when I have a spare moment, and real friendships are formed that way. So these sites are becoming popular, I think, because the mainstream is realizing that socializing online is not just for “computer nerds.” Its mainstream enough that we’ve got a development deal to do a reality TV show based on MySpace. That’s about as mainstream as it gets I suppose.
MZ: One of the fascinating things about social networking sites is that theyve been able to attract and keep the fickle young (18-35 yr. old) users. Why do you think these people are especially attracted to social networking sites?
Tom: One thing I’ve noticed is how rapidly attitudes are changing about meeting people online. Before MySpace began, I thought most people under 25 were really not interested in meeting people from the Internet. I think it was going on, but I didn’t necessarily see it. Under 25 meetings was going on with computer geeks, smaller subcultures, or ethnic sites. I think that was true to a large degree, because most of the mainstream sites that provide a forum for people to meet were dating sites. That was the only option for a mainstream audience. Why would a 22 year old pay for or even use a dating site? Most won’t. But a 22 year old, who grew up with ICQ, AIM & the Internet is also much less concerned about privacy. The Internet is not scary to a younger person. Putting their picture up is not a “dangerous” proposition like it is for a 35 year old. And its not scary to me because I was ‘online’ when I was 12 years old. So my perspective is a lot closer to people who are 21 and younger–people who’ve grown up “online.” Most of our users are 30 and under. I think 24 is the average age. For these people who grew up online, its not “geeky” to use the Internet to meet other people. There just wasnt a lot of it going on because there was no place for it in the mainstream.
Tomorrow: The Popularity
IPTV’s Impact
Ramesh Jain writes:
IPTV is the convergence of communication, computing, and content. People commonly talk about the convergence of communication and computing. In terms of content, people are accustomed to thinking mostly in terms of text and blobs (where a blob could be any media item but it was considered an atomic entity for the information system). Even VoD considers Video to be a blob, not content like pages on the Web. So a three-hour video could be played as a three-hour video but there was no indexing or content-based access possible. In the new world, this wont be acceptable. Video content will also be stored and accessed at different levels of granularities based on its structure as well as semantics.
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The major change required isnt really the infrastructure, however. Its making the tools robust yet easy to use. Internet culture will result in people starting to produce lots of video content for many different applications. The long tail effect will dominate this area also. People will start producing and placing videos on the Internet that they know will be used by only a limited number of other peoplein some cases maybe only five other people. This will happen, however, only if the production tools for editing video will allow people to capture and prepare video to put on the Internet as easily as they author Web pages.
Single-Chip Smartphones
Michael Mace writes:
To run on a single chip, the smartphone OS must have what’s called “hard real-time” capabilities. That means the operating system manages its own activities rigorously, so it can get out of the way when the phone needs to do something time-critical, like transmitting your voice or answering a call. If the smartphone OS doesn’t support hard real-time, it might accidentally cause a call to drop, or generate sputters in voice coverage.
Symbian OS was re-architected in version 8 to have hard real-time capabilities. Currently Palm OS doesn’t, and The Register reports that Windows Mobile can’t yet run on single processor phones either. If hard real-time is so useful, you might ask, why doesn’t every mobile OS have it? One answer is battery life.
The Real Personal Computer
Tom Foremski writes:
I’ve noticed lately that I feel more “personal” about my cell phone PDA and its data, than I do about my “personal computer.”
I’m quite comfortable to have my email and basic applications such as wordprocessing and publishing reside on my web host’s server somewhere out there, or on someone else’s server. But I want to keep my cell phone/PDA close to hand, which is not the way I used to feel about my PC and my cell phone–two of the most useful technologies ever created.
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For example, Google will soon be able to offer integrated email, calendar, web publishing, news sources, wordprocessor, maps, search. . . with other services in the pipeline. That’s a compelling mix because it will be all pre-mashed, and drag-and-drop/share-or-not (DAD/SON).And it all lives out in the cloud, and I can access it all from any computer–which makes any PC less of a “personal” computer. But my cell phone/PDA increasingly feels more personal–it is with me 24/7–and I can’t simply use someone else’s cell phone/PDA and access my phone’s data.
As I move more and more of my digital activities out onto the web, my cell phone/PDA grows more personal–but not my computer.
Mobile Data Pricing
Ajit Jaokar links to an open letter to Vodafone by Rudy De Waele and carries a couple of comments which shed light on operator data pricing policies. An excerpt from a comment by Jonathan Crooks:
There are some fundamental differences between how GPRS and UMTS data services are delivered over that most scarce of resources, the radio (and I include the cost of the relevant infrastructure here as well).
In short GPRS access effectively competes for voice access in the 2G network – so any attempt to offer a flat fee model has to consider the potential lost revenues from those voice calls that cannot now be made due to lack of bandwidth. In the case of VF Live! there are alternate revenue opportunities for VF other than the pure per MB charge and clearly they believe they can recoup their lost revenue this way (or at least swap it for some branding advantage).
For UMTS – this is largely unused spectrum at this time and there is plenty spare for devoting to data services – such as the 3G data card package. 3G is not a service but a network capability and at the moment the voice services on offer over 3G are not very compelling – thus there is very little take up in the consumer market. However data services (mobile web browing from a PC, corporate VPN etc) is quite compelling at up to 384KBps and this is a differentiated service – hence the offer of flat rate packages. Granted sometimes there is no 3G coverage and they use GPRS (thus getting back into that lost voice revenue issue)- this is just something VF has to live with in order to promote 3G services.
For the longer term, as 3G handsets are now almost indistinguishable from 2G handsets there will be much more uptake of 3G voice (albeit unknown to the user) and you could imagine this issue (voice vs data revenue) will raise its head again in a few years.
Social Computing and Real Estate
Charlene Li writes about various online tools and sites:
I believe all of these tools are still in their infancy. Realtors have by and large embraced using technologies like email and digital photography to update their business practices. But the central premise of realtors and also of the MLS is that they control the data, and hence, the process and the power. But as tools like Zillow tap into public databases and more importantly, into the information that consumers themselves enter, that power will pass into the hands of the real estate consumer communities. This is yet another example of social computing taking its toll on traditional business models.
The impact: Realtor.com will have to do a major overhaul of its services if it hopes to compete against upstarts like movoto.com. The irony is that with IDX, Realtor.com may have to be reeling in its own members that can tap into the MLS with a better interface. Realtors themselves will to rethink how they earn their living the traditional commission has already been under fire and these services will accelerate that trend.
TECH TALK: The MySpace Story: The Early Days
One of the biggest success stories in the past few years has been MySpace. It has blended personal home pages, social networking and user-generated content in a unique way to win the hearts of tens of millions people. MySpace was bought by Rupert Murdochs News Corp for $580 million last year. Recently, there have also been some privacy and other concerns raised around MySpace. But we are getting ahead of ourselves. Lets first dig deeper into the MySpace story and the MySpace Generation, and try to understand what has made MySpace one of the most popular destinations on the Web.
Here is what Wikipedia has to say about MySpace: MySpace is an social networking website offering an interactive network of photos, blogs, user profiles, groups, and an internal e-mail system. As of March 2006 it is the world’s fifth most popular English-language website (according to Alexa Internet[1]). MySpace has outstripped competitors such as Friendster and LiveJournal to become the most popular English-language social networking website with higher traffic and over 64 million users. It is synonymous with teenage culture.
Wired wrote about MySpaces early days in its November 2005 issue:
When [Tom] Anderson laid out his ideas for [Chris] DeWolfe in the spring of 2003, he described an online service unlike anything on the Web. It would, he said, be the ultimate social hub: part Friendster, part Blogger, part MP3.com, part craigslist. “The idea was that if it was a cool thing to do online, you should be able to do it on MySpace,” he says. That summer, he and DeWolfe pitched the idea to eUniverse (later renamed Intermix Media), which agreed to provide startup capital in exchange for majority interest. The pair hired a team of five programmers and set to work.
DeWolfe, who had a lot of connections to the Los Angeles creative community, solicited suggestions from bands, artists, and other creative types. At first, growth was slow. A small but fervent community of musicians and club kids, many from the LA area, latched onto the site as a way to promote their music and stay in touch with fans. The site encouraged creativity to the point of chaos. For MySpace’s mostly young demographic, their pages were multimedia outgrowths of their jackets, lockers, and notebooks – a place for band stickers, poems, personality quizzes, R-rated photos, and anything else HTML allows.
In September, around the time Hawthorne Heights was sending its demo to Victory, MySpace exploded.
The magnitude of the growth hit Anderson when he flew to San Francisco to see a late-season baseball game. The night before, Anderson had indulged in his obsessive habit of checking the rankings for MySpace. “Over the course of just a few days we’d gone from the 30,000th most popular site to the 3,000th,” he says. Sitting in SBC Park watching the Giants beat the Dodgers, he looked around the stadium, taking in the 40,000 cheering fans. It struck him that approximately that many people were now signed up on MySpace. “Until then, we were getting maybe 500 new users a day,” he says. By October they were getting 10,000 new users a day.
This is what the New York Times wrote last August:
Created in the fall of 2003 as a looser, music-driven version of http://www.friendster.com, MySpace quickly caught on with millions of teenagers and young adults as a place to maintain their home pages, which they often decorate with garish artwork, intimate snapshots and blogs filled with frank and often ribald commentary on their lives, all linked to the home pages of friends.
Even with many users in their 20’s MySpace has the personality of an online version of a teenager’s bedroom, a place where the walls are papered with posters and photographs, the music is loud, and grownups are an alien species.
Business Week wrote in a cover story on the MySpace Generation in late 2005: Not so long ago, behemoth MySpace was this tiny. Tom Anderson, a Santa Monica (Calif.) musician with a film degree, partnered with former Xdrive Inc. marketer Chris DeWolfe to create a Web site where musicians could post their music and fans could chat about it. Anderson knew music and film; De Wolfe knew the Internet business. Anderson cajoled Hollywood friends — musicians, models, actors — to join his online community, and soon the news spread. A year later, everyone from Hollywood teen queen Hilary Duff to Plano (Tex.) teen queen Adams has an account.
Tomorrow: Founder Talk
Continue reading TECH TALK: The MySpace Story: The Early Days
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