Quick Thought: Promoted Posts in Spotify

It’s common knowledge that Spotify isn’t exactly profitable. As avid user, I’ve really liked their latest product introductions: Discover (suggested content from Spotify), Activity (what your friends are listening to), & Direct Artist Following.  With those features and Spotify’s financial struggles in mind, one revenue generating product seems obvious: sponsored content and placements. As we’ve seen with Facebook, it’s much easier to sell advertising inside an algorithmically generated content feed. And with Discover, Spotify has built just that.

Spotify builds a complex profile of your music tastes.  They get the data for that profile from a combination of places: what you listen to, what you add to playlists, what you “like” on Spotify Radio, what your friends and people you follow listen to, etc. So, let’s say I “follow” Justin Timberlake. And listen to his music. And add him to playlists. And on and on. Why doesn’t Spotify sell a placement in my Discover or Activity feed to a similar artist? Preferably, it would be an artist that Spotify’s data shows I will probably like. Or, like Facebook, Spotify should start charging Justin Timberlake to alert me inside Spotify and by email when he releases a new album. That kind of targeted email marketing is incredibly valuable to artists of any stature.

The cherry on top: if done in a clean enough way, promoted/suggested wouldn’t even intrude on user experience. In fact, it could be a genuine value add.

Seems like a layup to me….

P.S. This ad product also allow Spotify to further monetize premium subscribers. It wouldn’t be limited to “free” users.

*** Apologies for grammar, it was a quick thought. I’ll clean it up later***

I hate to admit it, but I totally get Snapchat

I’ve been thinking a lot about Snapchat lately. I just got an Iphone 5, and have begun messing around with Snapchat. My friends have raved about how fun Snapchat is for several months but I’ve resisted, mostly due to the “creepiness” factor.

My Snapchat Inbox

My Snapchat Inbox

After using the app, I have quickly reversed my opinion of it. Today, online presences are tightly curated (facebook, twitter, instagram). We only want to show the world things that reflect well upon us. This inhibition is quite limiting when it comes to social interaction. As there are countless horror stories with inappropriate texts or emails going viral, I share many peoples nerves when employing digital communication tools. They are permanent. That’s exactly what makes Snapchat beautiful. Because no communication on Snapchat is permanent, it allows for much fuller expression.

 

Yes, Snapchat is used for sexting. However, it’s potential as an impermanent communication tool is vast. It allows users to express themselves freely, unafraid of the now commonplace repercussions for rash decision online.

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Snapchat recently raised over $20 million in venture funding. I’m excited to see what’s next.

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Interesting? 

Jeff Bezos on Charlie Rose

Just watched the Charlie Rose interview with Jeff Bezos. Twas very interesting. Bezos is an extremely passionate guy, a trait I find fascinating after running Amazon for 18 years. The interview left me with several thoughts I wanted to share:

  • Inventors, Not Disruptors: Bezos kept harping on how Amazon focuses on inventing, not necessarily disrupting. He views disruption as a byproduct, even a consequence of great invention.
  • Customer Focus Above All Else: The other central component of Amazon’s identity is being customer focused. They are constantly asking themselves “What do the customers want?” “What will they love?” “What do customers need and how can we make getting it easier/cheaper/better?”
  • The Internet is still in its infancy: Bezos believes that the societal reinvention brought on by the Internet is very young. he believes we are still in Day 1, as things are moving faster than ever. When it begins to slow, he says, we are in Day 2.
  • Brick and Mortar is not in Amazon’s immediate plans: Again, Bezos is focused on invention. He is only interested in getting in brick and mortar if Amazon can bring something new to the table. He is not interested in a “me to” approach to retail. All about invention.
  • He’s an optimist, and has a hearty laugh.

Watching the interview gives two clues as to why Amazon has persisted and flourished for so long. First, as Bezos states, there was an incredible demand for such a company. They filled a clear gap in the market. Bezos says that the hardest times for Amazon was the process of raising money to found it. Success was almost instantaneous.

The other clue is Bezos himself. He has an incredibly impressive eagle’s view of the Internet/Ecommerce/Technology industry, and approaches every decision through the lenses of customer focus, invention, and teamwork. Listening to Jeff makes the staying power of Amazon much less mysterious. He has incredible vision.

What a fascinating guy.

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Interesting? 

Startup School Recap Part 2: Joel Spolsky, StackExchange

Joel Spolsky reassured me.

As a student very interested in technical entrepreneurship, most of what I read about are the companies getting tons of press. These “hot” companies are the ones most people know. This isn’t unreasonable, as it makes sense that Facebook appears on TechCrunch more often than KissMetrics. However, as I want to work for a startup (and perhaps one day found my own) this is very intimidating. There can only be so many billion dollar ideas, and the smaller successes tend to get lost in the clutter of Silicon Valley reporting/analysis.

There is a sense that the only successes an entrepreneur can have is to build an enormous company (billions of dollars of value), or sell your smaller company to one of those larger firms. Joel Spolsky directly addressed this apprehension of mine.

In relating the details of his two major entrepreneurial endeavors (Fog Creek and Stack Exchange), Joel spoke about how there IS still opportunity for small bootstrapped businesses to find success. Specifically, he encourages entrepreneurs to figure out the market for your company EARLY.

1) The “Land Grab” Scenario: Get Big Fast

  • Network Effects- The more users you have, the more valuable the network is. Think Facebook, its value lies in the # of users. I want to be on Facebook because everyone I know is on Facebook.
  • Scale Quickly- Network Effects create Lock In. No one is going to leave Facebook for a social network that is 50% or even 100% better, as all of their friends are already on Facebook. That value cannot be as easily replicated as product features.
  • Make lots of Mistakes- Iterate quickly. Move fast and learn as you go. Mistakes can be covered up through VC money that you raise externally. Mistakes won’t cost customers like in bootstrapped business.
  • Take VC Money- Don’t fret about profitability from the start. Instead, focus on growth.
  • For Joel, Stack Exchange is an example of this type of scenario (well built question and answer sites). Network Effects are HUGE in this space.

2) The “Organic Growth” Model: Grow Slowly With Paying Customers

  • Bootstrap- Live very cheaply. Build a product that you can begin to sell immediately. Reinvest everything in company.
  • Market Fit- Unlike “Land Grab,” where there is probably an open market, the marketplace is going to be crowded with competitors in an Org Growth model.
  • Don’t Make Mistakes- You need to retain paying customers to survive! Mistakes can KILL your business.
  • Growth- Slow and steady. You are trying to steal customers, one by one, from your competitors. You must be in it for the long hall.
  • End Goal- It isn’t to sell the company or be acquired. It is to build a long term, sustainable business.
  • For Joel, Fog Creek Software took an Organic Growth model.

This was my take on his speech, and it really put me at ease. There is still hope for entrepreneurs who just want to build a viable business; companies don’t need 25 Million users to be successful.

You can watch Joel’s speech here.

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Interesting? 

A Necessary Partnership: Spotify & Shazam

School has started, and I’ve never been so busy. In the first week of class I’ve spent more time in the library than any week previously in College (including finals). Even so, I’m having a ton of fun! I love my classes for the first time in a long time. They are demanding AND fulfilling. I have good teachers. Damn, does that make all the difference.

Despite being quite overwhelmed in school, I wanted to share some thoughts I’ve had about Shazam, an app that I love use a ton. In fact, as a cheap, poor college student, it’s one of three apps I’ve ever purchased (The others were KCRWs Radio App and Call Recorder, which I use to record interviews). There’s nothing new about Shazam, it’s been out and successful for years now. It seems to work like magic :), which is the best kind of app.

However, there is a major disconnect when it comes to Shazam’s interface with music listening services.

Shazam

I am constantly using Shazam to gather information about new songs I want to listen to, but to do that listening I must go back into Shazam once I am home, and individually search for the songs on Spotify/Grooveshark/Whatever. That is a lot of work!

The missing, essential function of Shazam is an automated “deposit” tool, that creates a playlist in my Shazam playlist in my Spotify account and automatically creates a playlist based off of my tags. This would cut out an enormous amount of work for the user. It would make also the entire music discovery/listening experience much more circular.

Just some food for thought.

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Interesting? 

Disruption Abound: The Future is Siloed Excellence

This picture gets my blood racing (NERD ALERT):

Goodbye Conglomerate Service, Hello Siloed Excellence

The above picture breaks down all the services currently competing with Craigslist. However, each of the above firms are only competing with Craigslist in one (maybe two) area(s). Essentially, what’s happening is that for a long time now, Craigslist has provided a very solid platform for personalized transactions online. However, it assumes the same basic format is applicable for all these different types of transactions. That is simply not the case.

An interface optimized for selling homemade crafts is going to be different than one optimized for job posting/searching. The reason for this is quite simple: different transactions/postings require different designs and attract different audiences.

Craigslist has provided a very successful, free, and profitable platform. I’ve used it countless times. However, the core product is too broad. Craigslist’s inability to customize its service for different sectors, along with an outdated and hassle-ridden design could well lead to its downfall. That fact, along with the flattened access and distribution platform of the modern Internet, means that Craigslist is being disrupted by many niche services (check out the linked Dave Mcclure post on the power of niche) which are custom built to excel at delivering a single, narrow product.

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The reason this picture “gets my blood racing,” is because LOOK AT ALL THAT OPPORTUNITY. There is so much space for narrow, excellent vision and product execution in todays marketplace. The evolution of the Internet has led our society to a place that is so ripe with opportunity for innovation and disruption. But, what is truly beautiful is that those opportunities will/can be successful because THEY SOLVE A PROBLEM FOR PEOPLE.  They do genuine good because their products help people live more efficiently. They add value to lives. And that is just plain awesome.

 

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Update: This was recently published in the NY Times about what could happen to Craigslist. Interesting Read!

Respect The Consumer: Building For An Intelligent User

“Users think they’re up against a machine that thinks it is smarter than they are, and that is keeping them from doing what they want. Some could argue this is a design feature, that adding friction is a way of controlling the amount of interaction with customer service agents. But, the net result is frustration for the consumer.”

-DJ Patil, Describing the user experience of an IVR system (interactive voice response system) like the one that answers the phone when you can an airline

I am currently reading Data Jujitsu, a short and informative (and free!!) read on the Kindle. It’s by DJ Patil, a data scientist at Greylock, and explores many fundamental principles of data application in the startup/internet space. So far it has been a fascinating read that I highly recommend. However, when I read the quote above, I was compelled to stop reading and write this post.

I’ve been watching The Newsroom lately. As a moderately informed 21-year-old, never have I been so intellectually challenged by a TV show. Despite the events The Newsroom references taking place within the last few years, I am often lost and overwhelmed by the depth of content and analysis. I find myself constantly pausing episodes to open Wikipedia tabs, just to read up on these events, so I can be on Sorkin’s level of understanding.

The Newsroom challenges me, the audience. It assumes I am intelligent. It panders to no one. Because of this, I respect it. The Newsroom does not assume an unsophisticated viewer (or user). Rather, the show is made for a highly intelligent, informed one.

Many user interfaces, unlike The Newsroom, do not assume an intelligent user. Instead, they pander. They pander like an ABC Comedy.  The pander to conserve resources. They pander because they are profitable, so why care? The pander because their customers do not have alternatives.

If the user interface is like the IVR system referenced by DJ Patil, which seemingly tries its hardest to hide customer service agents from callers, than why even provide the contact number? The reason someone is engaging in such a service is to speak with an agent, not struggle with an automated service!

Build for an intelligent user. Always. Even if doing so requires additional resources (having more customer service agents, spending more money on design, etc.) or slight compromises to the simplicity of your interface design. Allow the user to find the route that works best for their specific needs, and do nothing to inhibit them.  Whatever your service, don’t inhibit the user. Assume they are smarter than you.

When a product is built that respects the consumer’s intelligence and time, they will in turn respect the service. This is vital!

I realize this comparison is a little abstract, but….I respect The Newsroom because it assumes my intelligence. The show is very smart, but the writing and depth back it up. An IVR system like the one DJ Patil describes comes off as wise and intelligent. However, anyone who has spent any time battling automated phone services know they are poorly designed and hardly ever yield any value. There is no depth of build to back up it’s automated functions.

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