Competing vs Enabling

In recent years, eBay and Amazon are competing with one another more and more. As consumers, we experience the two online marketplaces quite differently. EBay is the place to hunt for a deal in an auction format, while Amazon is the site of choice for a hassle-free transaction. When John Donahoe joined eBay in 2008 as CEO, the company was struggling. EBay had stagnated. However, they have since engineered a major turnaround. EBay has reinvented itself away from the auction-based personal marketplace that made them famous. Instead, eBay is flourishing with a newfound emphasis on mobile retail and payments (PayPal).

One specific aspect of eBay’s strategy caught my eye. Unlike Amazon, who competes directly with traditional retailers, eBay is partnering with physical retailers, using their mobile platforms to help bring brands online. Traditional retailers are looking at eBay as a partner and at Amazon as a threat. This strategy fits with eBay’s history, as eBay has always been more about enabling individual sellers and facilitating transactions than developing eBay as an independent retailer.

With all their dominance and success, it is hard to doubt Amazon’s strategy. However, with <10% of worldwide consumer spending occurring online, there remains an enormous amount of value in aiding physical retail brands, rather than attacking them.

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This was inspired by a NYTimes Article.

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Interesting? 

Curation is the Future

Lately I’ve been thinking a lot about the need for curation services online. The amount of content we are exposed to daily is out of control. Outside of personal communication content (email, text, photos, instagrams, facebook posts and messages, etc) we consume an amazing amount of content daily online. Sorting through all the content at our fingertips is at worst impossible and at best overwhelming.

The amount of content served to us online is ridiculous!

The amount of content served to us online is ridiculous!

One set of curation tools is our personal network. Links are recommended via email. Videos are posted to facebook. Articles are tweeted. Some content is specifically recommended for us, and some is blasted out indiscriminately. These are all sources for content, but what truly excites me is the emergence of standalone curation services. By that, I mean services that are built for curation, not a friend emailing you a link to a funny video.

Several standalone content curation services already impress me. The first is the app Prismatic, an outstanding app that surfaces content (mostly print articles) based off your social presence online. I check in with Prismatic a few times a day and am ALWAYS met with interesting articles. Another tool I love is Devour, which hand picks the best new video content. Devour’s content is edgy, and shows how human led curation remains far better than algorithms. These two services use very different strategies to successfully recommend content. While Prismatic bases their recommendations off my tastes, Devour’s curation is based of their tastes.

Some content farms have in-house curation tools. My NYTimes digital front page is different from yours, tailored to my past clicks and interests. The same can be said for my youtube homepage. However, the intention of any in-house curation tools is to keep you in-network, maximizing your time spent on THEIR site. That is why I love content curation services that are unaffiliated from content farms. They are selfless. They are exciting. They serve me with personalized content, which I sure do love to consume.

Everyone loves to consumer online

Everyone loves to consumer online

The emergence of these tools will have a variety of effects. For the consumer, it offers a promise of premium content. However, as these tools further democratize the net, curation services will put additional pressure on established producers to create GREAT content. With so much noise, good just won’t cut through anymore.

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Interesting? 

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? 

The Death of Banner Ads

As long as I’ve been online, the Internet has been packed with advertisements. The majority of these ads are banner advertisements, the simple display ads that populate every site from ESPN to Gmail. Thankfully, the old, boring banner advertisement is slowly dying. In the past, everyone who visited a webpage in a set period of time was served the same banner advertisement.  Since their inception, banner ads have employed very basic, unimpressive technology that does little to optimize the dollars spent on the ad. This is changing as ads become tailored to the unique visitor. The evolution of online advertising from the basic banner ad benefits all parties: users (who probably prefer consuming higher quality advertisements), the advertising party (who is producing more effective advertising), and the company selling the ad space (with higher conversion rates come larger revenues).

Everything in red is advertisements. These panels take up most of the screen!!

One of the more exciting advertising innovations can be found in social. Because social media and search firms have enormous amounts of data regarding users’ individual interests, they tailor advertisements to the specific user (social or local optimization: i.e., what a users friends like, and what is geographically relevant to the user). More recently however, even tailored advertising seems flawed, as smaller screens (mobile) do not have the space to waste on additional panels. In response, both Facebook and Twitter have introduced native ads, which are placed directly into their users’ respective feeds. By placing native ads directly into a stream, there isn’t any wasted screen space, which must be used sparingly on mobile devices.

Banner ads are generally considered a waste of screen space.  However, as native ads have emerged, firms have begun producing advertisements more appropriate to online consumption. Funny videos or deals that can be easily shared and spread through the social web are becoming commonplace. Essentially, online ads aren’t total crap anymore, and when tailored for a specific audience, they can be much more effective.

Last year, Hulu made a fascinating change to their advertising policy. Going forward, Hulu only charges advertisers for ads watched in their entirety. If a viewer does not watch an entire ad, the advertiser doesn’t pay. First, I doubt there has been much financial fallout from this, as on Hulu, ads are shown between segments of a show. Viewers either close out of a tab before advertisements begin or they wait until the show restarts, as in most cases they have already decided whether to continue watching.  In addition, Hulu must have had lots of data before making this policy change and deemed it worthy. Second, this generous policy allows Hulu to enforce a higher standard for ads on their platform. Premium ads stand out online, so the higher standard may in turn make users happier to consumer ads. Personally, I find the ad content on Hulu to be much better than Youtube, and 100x better than a basic banner advertisement. Hulu delivers outstanding content to me for free, so watching a few premium ads is hardly bothersome.I understand the necessity, and don’t feel taken advantage of.

There had been very little innovation in Internet advertising, but that has changed drastically over the past few years. Tablets and high-definition screens create opportunities for more immersive, full-page ads. Social and local optimization generates more useful content for users. As conversion rates improve, so will the economic strength of the entire digital media ecosystem who depend on advertising for revenues. It’s an exciting prospect.

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? 

Hands Free Mobile Devices

“Startups should be solving for a world where the device in our hand is more useful than the device on our desk.”

-Aaron Levie, Founder of Box.com

Ray Kurzweil wrote in 2001 about the accelerating returns in technology. Essentially, the technological progress of society to time ratio is exponentially increasing. Whether or not you think Kurzweil is a joke, the fact remains that in modern society, the half life for technologies is shrinking. Vinyl Albums, Tapes, CDs, and Ipods all lost relevance with a decreasing shelf life. Now Ipods are dying as our music players and phones have converged into one device.

I find Aaron Levie’s quote to have a lot of relevance. He is an extremely accomplished individual, and we both have distaste for our alma mater (he dropped out of USC, I am a still suffering student). However, I can’t help but think that it is only a matter of time until having a device in our hands is no longer relevant. Look at Google Glass, look at the current state of nanotechnology. Shit, there are working prototypes of bionic eyes which can cure blindness.

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Within 10 years, I bet that all our devices will be hands free. Maybe all our computing will be done in front of our eyes through glasses. Maybe chips will be implanted and interfaced directly into our brains. Does it seem ludicrous? New technologies often do. When the automobile first become popular, the President of Michigan Savings Bank declared, “The horse is here to stay, but the automobile is only a novelty- a fad.”

By his statement, I believe Aaron Levie is saying that mobile computing is the future, not that all mobile devices will be hands-based. BUT, it is still interesting to wonder… how much longer until we are truly hands free? Never underestimate the desire of humans to be lazy; people love to avoid work. No matter how little work it requires to use a smart phone compared to a desktop computer, people will continue to strive to reduce the amount of work required to accomplish tasks.

 

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Mobile Add Ons

I love the concept and execution of Square. A free, convenient, physical add-on to smartphones that provides a mobile payment SOLUTION FOR CONSUMERS.  The true genius of Square is that consumers can attain it for free. The reason for this is that as a mobile payment solution, Square inc. can (and does) simply charge a percentage off the transactions they process. By doing this, they have removed the barrier of an initial payment for their service.

So slick. So great. SOLVE A PROBLEM AND THE PUBLIC WILL EMBRACE

This leads to the question: what other physical add-ons are coming for smartphones? And, will they too be able to come up with the alternative business model required for free distribution of the physical product?