As I was reading this WSJ article on Facebook marketing, I kept wondering about what would the the title and job description of people who will engage community members online in near real-time.
In the Web 2.0 world, communities have become more dynamic and especially for the always on crowd the expectations for speed & quality of engagement have gone up. This requires rethinking what it means for a company to “manage” a community.
I’m on a plane to SF (for a third week in a row) re-reading parts of John Maeda‘s The Laws of Simplicity. It’s the kind of book you get more out of the second time around.
One of the observations is that saving time & effort by eliminating the need to choose is a powerful way to simplify an experience (third law). For example, I’ve switched to using an iPod Shuffle on flights because it offers the shortest path to music in my ears. I’m saving the time looking through thousands of albums and dozens of playlists. I’m also saving the potential frustration of picking which few dozen out of 40,000+ songs I’ll listen on the six hour flight.
In the physical world, consumption choices have steadily increased. In the digital world, they have skyrocketed. Despite search engines and a plethora of vertical portals, is has become increasingly more time-consuming to find exactly what we are looking for. Hence is it no surprise that businesses are spending increasingly on technology and marketing to convince us that we don’t need to think about choices. From personal shopping to online product recommendations to “automatic” content generation for our social network profile to auto-generated entertainment channels, we are letting software decide what we like.
On the flip side, eliminating the need to choose can get dangerously close to eliminating the need to think. The pleasure of simplicity can lead to a reduction in critical thinking (we complain about the masses being led by the media) then grow into apathy (few people are excited about voting in dictatorships) and in extreme cases can be downright dehumanizing as proven time and time again by atrocities committed by people who later claim they didn’t have a choice.
I’m certainly not suggesting that Amazon’s recommendation engine will dehumanize Internet shoppers. The trick is in the balancing of choice (complexity) with lack of choice (simplicity). This, not surprisingly, is another law in Maeda’s book.
Who does the balancing when it comes to online consumption? I see a somewhat unsettling shift where consumers increasingly cede this right to recommendation software whose ultimate goal is to optimize the P&L of online businesses. On average a business profits when its customers are happy but at the margin ad targeting systems, recommendation engines and services such as Loomia and Aggregate Knowledge (both of which I know well and respect much) are focused on the short-term P&L goals of their customers and not on your personal satisfaction because you are not their customer.
Which brings an interesting question: is there an opportunity for a personalization/recommendation service whose true customer (not user!) is the consumer? I believe so and have started talking with entrepreneurs about this.
An entrepreneur and I were talking about startup opportunities in the social advertising space. We ended up wondering about market size, which is an impossible question to answer on Net scale so instead we talked about Facebook’s SocialAds network. We made a guess that if it works it can be a greater than $100M revenue opportunity. I did some checking. It turns out we could be right.Here is a summary report from the data kitchen.SocialAds impressions are restricted per user on a daily basis. So you need an estimate of the number of unique users per day. Not easy to get. ValleyWag got the FB rate card from June. There the numbers are 27M registered users 54% of which return every day. comScore data puts current monthly uniques at over $30M though, which gives a guess of about 16.5M uniques/day.There is some uncertainty in how SocialAd impressions are restricted but the most conservative reading is a cap of two impressions/user/day.Next comes guessing the CPM. According to ValleyWag and the FB rate card deck they got, untargeted sponsored homepage stories have $10 CPM. SocialAds are targeted and recommended. Also, their supply is artificially restricted, which will likely push CPMs up. On the other hand, newsfeed content is engaging and there is an inverse relationship between how engaging an area is and clickthroughs from that area. So, let’s stick with $10 CPM.Doing some basic multiplication yields a potential revenue opportunity of about $120M.Now, before you start laughing at this swag, let me remind you that I sit on the opposite side of the table listening to these types of market analyses all week long. At some point, the desire to try one becomes irresistible. 😉
A holiday is a good chance to reflect on the contrast between life with family + friends and life with high tech startups + friends, including the often strange mashups between the two. Like in the picture below, which has become my new desktop wallpaper.
Free Rice is another good non-profit money-for-time site. I like it. The experience is clean. The game is mildly addictive. The vocabulary is pretty tough–I haven’t been able to go much above the low-mid 40s.
At this point, people have donated 1,330,639,890 grains of rice, which is roughly equivalent to nearly 27 tons.
Although some love to throw MySpace and Facebook in the same bucket, the two companies continue to evolve in different directions to the point where it is probably better to talk about meta-competition than direct rivalry.
The latest example is how they approached targeted advertising. Jeremiah has a solid analysis of what the near-term will likely hold for both companies.
MySpace’s approach–allowing brands to target across more than 300 affinities is more traditional and bound to lead to improved ROI given their scale in both users and inventory.
Facebook’s approach is novel, using the built-in viral loop to spread “trusted” brand endorsements. The trust comes from users choosing to endorse a brand. The message is controlled by the brand. In other words, Facebook users opt-in to become distribution channels for brands. It would be very interesting to see what incentives brands put in place to buy endorsement and the extent to which Facebook will provide tools for that. Also, Facebook has a strong incentive to impose some constraints on the system–I’m not sure this is the type of environment where unchecked market forces will yield an optimum outcome for any party (FB, users or brands). I guess I’ll have to find some time to play with the system, although from early reports such as Fred Wilson’s experience it seems there should be no rush.
Not quite the coolest tech gadget for millionaires, the SiCortex SC072 Catapult probably qualifies as the one for committed geeks on the way to their fortunes.
SC072 is a (no surprise) 72-processor Linux cluster that can fit under your desk and double up as a gentle foot warmer. Despite its many Gflops, 48Gb of RAM and 2Gbps of network I/O it burns less than 200W.
A beauty like this will set you back less than $15K and will impress the right date much more than your original Star Wars memorabilia.
Now, for the fun part–what apps would you want to run on this? Drop me a comment.
I sure hope so. Well timed for CTIA is his Free My Phone blog post on the mobile space. Walt wishes for an opening of the US mobile industry.
That’s why I refer to the big cellphone carriers as the “Soviet ministries.” Like the old bureaucracies of communism, they sit athwart the market, breaking the link between the producers of goods and services and the people who use them.
Walt does not, unfortunately, offer any great reasons for mobile operators to change their ways in the short run. After all, they did spend hundreds of millions building expensive networks and have the right to explore and exploit them as they see fit.
Walt’s reference to mobile operators as communist-era bureaucrats makes me think about the painful transition to market economies the Soc block went through. Not sure why any of the pre-transition governments would have signed up for the pain that followed… Wait, they didn’t. The benefits of a market economy in the future couldn’t justify the short-term pain.
China has really been the only country where the pain of not doing something radical–a likely peasant revolt–outweighed the costs of moving towards a more flexible and free economy. The Chinese model for managing the economy may be appealing to mobile operators. It is not a free market jungle but it is also far from central planning. It is a managed ecosystem. Could the threat of consumer revolt prompt mobile operators to move towards more openness?
Here is another great example of a company trying to walk the fine line between an open and a closed value chain ecosystem. From a Steve Jobs letter:
Let me just say it: We want native third party applications on the iPhone, and we plan to have an SDK in developers’ hands in February. We are excited about creating a vibrant third party developer community around the iPhone and enabling hundreds of new applications for our users.
This is obviously good news for consumers who’ll get more choice and more innovation. It is also good news for the mobile industry which needs more examples of (hopefully lightly) managed ecosystems that tap into the Internet innovation/experimentation vein. I do hope what Apple has in mind passes my ecosystem test. The company does have a chance to be a leader in enabling great mobile user experiences and their initial approach to openness was well-aligned with what makes sense in the mobile software space.
According the the letter, security is the big reason for the delay.
It will take until February to release an SDK because we’re trying to do two diametrically opposed things at once—provide an advanced and open platform to developers while at the same time protect iPhone users from viruses, malware, privacy attacks, etc. This is no easy task. Some claim that viruses and malware are not a problem on mobile phones—this is simply not true. There have been serious viruses on other mobile phones already, including some that silently spread from phone to phone over the cell network. As our phones become more powerful, these malicious programs will become more dangerous. And since the iPhone is the most advanced phone ever, it will be a highly visible target.
I hope security does not become the excuse for putting a number of artificial controls in the ecosystem. As hackers have already shown, one hardly needs a malicious third party app that a user downloads to break into an iPhone.
If I sold stock earlier during Bubble 1.0 and if my house had a basement I’d get an SC5832. SC stands for SiCortext, a Polaris portfolio company I’m involved with. 5832 is the number of processors in this dense Linux supercluster. Not only is the performance breathtaking but the machine is as green as it gets–optimizing power consumption is the secret behind the performance of SiCortex machines. Lower power means you can have more processors closer together so that the interconnects paths between them are very short => very fast CPU-CPU communications & better parallelism. If you are into this stuff, go through the SiCortext architecture tour.
The SC5832 is finally shipping. Argonne National Lab just bought the first machine. Lucky them. The open panels remind me of Lamborghini doors.
The most amazing thing was that it took less than two hours to get from a bunch of boxes to a running Linux supercluster with nearly 6,000 processors. The IT guys at Polaris working on our Exchange servers must be envious. Kudos to the SiCortex team. Now if they only made the machine easy to sit on like those old Crays. 😉
