Is Online Dating A True Match, Or Another Digital Dilemma?
My friend Alex is classically beautiful. She also has a really grown up, important job at one of those big, firm-y type places. Basically, she’s smart. Real smart. And has a real nice apartment. And she makes everyone laugh and has lots of real nice friends. That’s Alex.
But all of this is neither here nor there, because Alex is on a quest to find love. Isn’t that what we’re all essentially doing? Looking for that connection with someone, whether it’s a boyfriend, spouse, new drinking buddy or, at the very least, someone just to watch “Dexter” and order Domino’s with?!
Electronic enchantment?
You can all guess where this is going. The missing piece of the puzzle in this coming-of-age story is Alex’s Prince “I’m Ready For a Commitment and Will Bring You Diet Cokes When You’re Thirsty” Charming. So, what did this accomplished, intelligent, attractive woman do? Like millions of folks in this country, Alex shelled out $113.94 and joined Match.com for six months. Five years ago we both would have cringed at this, but now her posse of friends (myself included) and co-workers couldn’t tell her to sign up fast enough.
Several weeks of awkward dates (the guy who wouldn’t take a hint – or a straight-up “no”, the guy who lived with this parents, the guy who worked at The Cheesecake factory) and hundreds of “winks” and other online digital mating calls later, I couldn’t help but wonder: Is this REALLY what things have come to? We field hundreds of e-mails a day, obsessively track Facebook photos, and Tweet about a food cart selling crepes, so it seems only natural we attempt to find a potential life mate this way, right? I’m not convinced.
It is estimated that between 40 and 50 million people use online dating sites and nearly 1,000 NEW sites are launched every year. Point being, A LOT of us are using the Internet to date. This multi-million dollar industry includes everything from the old standbys like Match, Chemistry.com and JDate.com to SeniorPeopleMeet.com and ILoveYourAccent.com – there’s a site and “questionnaire” for every walk of life and it’s not slowing down. Even my beloved Liz Lemon joined K-Date.com (the fictional Kraft Foods dating site) on a recent “30 Rock” episode. Sigh.
There’s nothing new about the fact that we live in a digital age where virtually all communication can be done without actually MEETING the person. Not to sound all George Clooney from “Up in the Air”, but have we completely forgotten about the actual face-to-face chemistry that gets lost in digital connection?
Eternal, or Ethereal?
All that aside, maybe I’m not that relatable for the sake of this argument – I’m lucky enough to have a life partner and still old-fashioned enough to write handwritten thank you notes. And sometimes I can’t help but think about that (actually pretty good looking) couple on the eHarmony commercials. They own a store together, seem pretty in love and found this all through e-mails and “connecting” digitally. We’re led to believe they’re now married and still run their little boutique hand-in-hand, all while wearing matching denim. It’s not a bad image to shoot for.
So what ended up happening to Alex? After a final nail-in-the-coffin email from a spelling-challenged man named “Bobola” followed by a six week dating hiatus, Alex finally re-entered the world of online dating and accepted her first Match.com date a few weeks ago.
She had a really great time and will be going on a second date.
Apple iPad: Revolutionary, or Shiny Paperweight?
Corey is a life-long Mac enthusiast who started his computing life on a Macintosh 512K, and has been in love with Apple products – until the iPad. Ben has sworn by Apple products for the past seven years, and early Saturday morning made a last minute decision to stand in line for the first time at the W. 14th Street Apple Store for the iPad launch. These two LaunchSquadders discuss the iPad.
Apple’s Microsoft-like control over the platform and the apps the iPad can run is increasingly disturbing.
Corey: I love Apple’s products. I’m a lifetime Mac user, I own an iPod, and would own an iPhone if they weren’t married to AT&T. But, as a corporate entity, Apple has – to me – been rapidly backsliding in to territory once occupied by late-1990s Microsoft: controlling to the point where it’s willing to hurt its products in order to not cede its grip over its platform (see Flash below). This is especially true with iPhone and iPad apps. Apple’s stringent – and sometimes bizarre – approval process for apps, and its refusal to adopt outside platforms are means to that same end. Think about it: In order for any Web service to work on the iPad, it has to develop an app (think Hulu), and Apple tightly polices what apps it allows and doesn’t allow. What’s left is monopolistic authority over what gets seen and used on the iPad and iPhone. That’s never good. Apple has a right to make sure only good stuff is available on its platform, but it shouldn’t think solely about its larger business interests under to guise of doing so.
Ben: Since launching the App Store in the summer of 2008, Apple has built an entirely new economy around developers and their applications. Last month, the App Store topped 3 billion downloads, with over 150,000 applications available. One can only imagine how many applications are submitted every day, and Apple’s review process is ultimately necessary to weed out applications with inappropriate content, and malicious intent. Still, I have to agree that in some cases, Apple’s authority was exerted beyond boundaries, especially in their blocking of a native Google Voice application because it “duplicates functionality.” Google was quick to introduce a Web-based application, and in all reality, business is business. All in all, Apple has been working hard to better the App Store approval process, and we’ve seen more, and more applications that were originally denied entry, getting accepted. I don’t personally see Apple letting users download applications outside of the App Store any time in the future. They should however, focus on opening up more core APIs so developers can leverage all of the devices’ features.
There’s no Flash.
Corey: The fact that the No. 1 complaint about the iPhone (well, beyond AT&T) – that it doesn’t run Flash – wasn’t addressed in the iPad is just strange. Even worst is the reason: Apple’s corporate pissing match with Adobe. And, we have no idea why it’s even happening! As I talked about above, the beef most likely comes down to control, something Jobs is loathe to give up. Regardless, 75 percent of videos and 70 percent of games on the Web are powered by Flash, so that’s a pretty arrogant starting bargaining position from Apple. Shadiness aside, the iPad’s top two uses are supposed to be viewing media and playing games … yet, you can’t view or play three-quarters of the games and media on the Web. It makes no sense.
Ben: No one outside of Apple knows the full story on the exclusion of Flash from their mobile products. What it most likely comes down to is a deep-seated business rivalry. However, it’s true that in many cases, Flash is extremely resource heavy and unreliable on devices – even across desktop browsers on a Mac, Flash video and games tends to be slower. Instead of complaining about the Flash issue, companies like Brightcove are quickly adapting to offer iPad compatible H.264 video. Apple has even gone as far as to post an “iPad Ready” page on their site, with a list of major name Web sites like The New York Times, Reuters, ESPN and even Nike, all of which support H.264 video with the HTML5 tag.
The iPad’s form factor and interface make for the best possible Web browsing and reading experience.
Ben: I’m typing this post right now from my iPad. Straight out of the box, it takes some time getting used to; mostly the issue is with figuring out exactly how to hold it, or prop it up on your lap. In landscape mode, the virtual keyboard is wide, and spacious. After 48 hours of using it to catch up on news on The New York Times, and Techmeme, as well as reading books in both Apple’s iBooks and the Kindle apps, I am completely sold. Since the iPhone launched, Mobile Safari has provided the absolute best browsing experience in a pocket device. The iPad’s large, vivid touchscreen takes it to an entirely new level, where human interaction meets computing almost seamlessly. Hey, it’s so easy a 2-year-old can use it! Sure the iPad has some UX flaws here and there, but it’s paving the way to a keyboard-less future.
Corey: It’s hard to disagree with that. Tablet computing is going to be the way a lot of use the Web in five years. The iPad itself is a sleek device that’s built well for its main purpose – viewing media and the Web. But again, the problem is how it gets there. The Web is the primary destination for 95 percent of computer users, and probably 100 percent of iPad owners, so it’s baffling that the device treats the Web like a necessary evil. The Web should be at the forefront of these devices, and the browser should be the primary app that enables it. Apple is taking this notion and putting it on its head by requiring that a lot of the content on the Web be sliced out and put in to apps (available in the iTunes Store for a nominal fee!). It just seems counter to where the rest of the computing world is going, and incredibly self-interested. Google, on the other hand, has taken an open, Web-centric approach with Android that I would love to see adapted to a tablet, which I’m sure is coming soon. I’m not naive enough to say that Google is completely altruistic with its more open approach to the Web on its OS, it’s better than how Apple sees it.
As publishers adapt to the iPad, print version of their publications, as we know them, will soon become a relic of the past.
Ben: Conde Nast, The New York Times, Wall Street Journal, and other media houses have made it very clear that they are devoting time and resources to developing for the iPad. But will iPad applications necessarily save these publications? I don’t think so. It begins with the price point; Time Magazine is offering a weekly iPad version for exactly the same price as the print copy, $5. The Wall Street Journal is charging $17.99 a month for their touchscreen version. The fundamental flaw here, is that consumers aren’t so willing to pay for content that they can mostly find on the Web, which they have direct access to in Safari on the iPad. For example, The New York Times’ Web site in my opinion is vastly superior to their Editors’ Choice iPad application. It’s the high priced, archaic subscription model that has publishers beat, and it’s about time they learn it. I’m also skeptical that the iPad alone will provide enough revenue to stay afloat, publishers will need to innovate and accommodate the slew of tablet devices to come.
Corey: I largely agree with this, and think you’re absolutely right that publishers’ blockheaded devotion to paywalls. If these dinosaurs couldn’t adapt to Internet, even as we started taking our laptops with us everywhere we went, and began using mobile phones to surf the Web, then they surely aren’t going to be able to adapt to tablet computing simply because of a shiny new device. I also doubt that, beyond our little tech world bubble, the iPad is going to have enough mainstream adoption to make it cost-effective enough for publishers to rearrange their strategy around it. That’s the main problem with the “iPad will revolutionize X” meme – only 300,000 people own these things. That will grow, but they’re not as useful as an iPhone or a laptop to everyday consumers, and they have a high barrier of entry ($500) for the 98 percent of people who don’t geek out over new tech. While tech people can blather on for hours about its many uses, most consumers’ reactions after picking one up would go something like this: “Huh. Cool. I have no idea what I’d use this for.” The iPad is the first generation of a set of devices that will change personal computing in 3 to 5 years when they can properly access the Web. Until then, it’s a really expensive newspaper.
Global Entrepreneurship: A Cross-Generational Effort
At LaunchSquad, we encourage our team to not only be outstanding representatives and ideators for our clients, but also in our community. Part of this is supporting non-profit organizations to help them achieve great results for the services they provide.
Recently, we partnered with the Kairos Society, a student organization uniting the nation’s brightest student entrepreneurs from prestigious schools like MIT, Harvard, Stanford and others, with international student innovators representing nine countries, including China, Israel and the UK. Encompassing industries like green energy, high technology and global philanthropy, the organization connects the up-and-coming generation of leaders with many of the world’s most influential business leaders from organizations like DuPont, the Bill and Melinda Gates Foundation, Boeing and the Kauffman Foundation.
Now it its second year, the Kairos Society will host their Second Annual Summit in New York City on April 16-17, connecting 500 student innovators with 100 business leaders to foster relationships, discuss the future global economy and best practices for ensuring healthy international relationships, all while providing insight and about how to grow their company and – like the conference theme states – “do well by doing good.”
The two day event will be hosted by the New York Stock Exchange and the Intrepid Air, Sea and Space Museum, showcasing 100 of the world’s most cutting edge student companies and technologies, breakout sessions led by VIPs with selected students to discuss particular industries or opportunities and a women’s lunch, bringing together many of today’s most impactful women leaders to meet and mentor the women leaders of tomorrow.
We are thrilled to be supporting such a unique and necessary organization. Many of the student companies are developing breakthrough technologies, services and philanthropic efforts, from building schools in third-world countries to energy solutions for the military and travel industry. With the theme of “Doing well by doing good,” it’s reassuring to know that the next generation of economic leaders is proactively collaborating with those who have paved the way in their respective industries.
Check out two videos from Bill Clinton and William Gates Sr. in support of the organization, as well as highlights and insight from last year’s summit in New York.
Advertising Right Now: Stuart Ewen Should Be Proud
2010 is already proving to be an explosive year in the innovation and growth surrounding advertising. Just last week, Google announced its ‘remarketing’ feature for AdWords, an app called CrowdZone introduced its plans to monetize the ability for people to join real-time sports-fan communities, and self-service mobile-ad startup Zeep was snapped up by Vibes Media. Emphasis on just last week.
Here in the Bay Area, it’s not necessarily breaking news that advertising in all of its innovative forms is one of the hottest industries right now, and it seems that every startup is racing toward that monetizing finish line faster than their VCs are pedaling down Sand Hill Road. But as this year is looking to be a breakthrough one in how ads are served, I can’t help but remember amidst all of the flitter and flutter of the mobilegeotargetedrichgroupon excitement, the classic book from a time when advertising was less thoughtful, more forceful, and therefore, less relevant: Stuart Ewen‘s Captains of Consciousness – Advertising and the Social Roots of Consumer Culture.
Ewen’s main premise in his 1976 seminal work – which today seems like a Donald Draper one-liner after the end of a Don/Midge tryst – is still worth remembering: the Industrial Revolution led to mass production, which led to the need for mass distribution, which led the need for people to want stuff because all the stuff had to go somewhere. The ‘captains of consciousness’ – the Ad Men – created this need/want through messages that plucked at psychological and emotional heartstrings and created our wants. Essentially they constructed our modern consumer culture.
Well, here we sit as by-products of that era and having accepted our reality that people will try to get us to buy stuff, we actually have the upper hand. And the Ad Men are listening, which is why we are seeing such massive innovation around the simple idea of relevant messaging. They are now working on a completely opposite premise: that our wants are less controllable, they can’t take us for granted, and they have to come at us where we already are – both in thought and place. And I, for one, find that quite flattering.
So if a Google ad-bot follows me around the Web and tells me about a bike-gear sale three months later, I’m cool with that. Chances are my chain needs replacing at that point. If I share an article I find interesting via ShareThis, I’m OK with that publisher storing my information and showing me better stuff next time I visit their site. It’s totally fine with me when a small business keeps in touch via regular email marketing until the time is right and I need their services. And if I’m in a new neighborhood looking for a good happy hour and a free-drink coupon pops up on my Village Voice Happy Hours app for the watering hole that’s literally across the street – well, that’s way better than if it didn’t pop up, right? The mobile-marketing push is indeed fascinating and relevant, led by companies like Placecast and Admob.
Ewen might be disappointed that the Captains succeeded in creating our current culture of consumerism and to be fair, there are many reasons to question what we’re doing and buying (questioning not necessarily being a bad thing). But if we’re going to have certain advertising realities in place, I’d rather they cater to me and not waste my time.
Will Your Next Car Stereo Help Save Radio Advertising?
On the heels of a 10 hour holiday road trip, I’m a big believer that one of the innovations yet to hit the market is a way for people to tag stuff when they’re listening to their car radios.
A few weeks ago, Apple took an important first step in making this a reality when it teamed with Alpine to bring a set of car stereos to market that allow listeners to tag songs for later download via the iTunes Music store.
I like this move, but it’s not that big of a breakthrough – after all, Shazam recently eclipsed 50 million users (who are primarily tagging when driving) and closed a round of funding from A-list VC firm Kleiner Perkins–putting them in a nice position to own the music discovery market.
The bigger opportunity – and one that has Google written all over it – lies in an easy way to tag commercials, talk show segments, news and other information while driving. This is underscored by the fact that most songs that get radio play these days are on the pop charts, are in regular circulation and can easily be found of iTunes with a click or two.
But, when you’re in your car, you usually don’t hear the same piece of information twice. News bits are regularly updated, ads are timed to optimize reach and frequency and conversations happen only once.
For marketers, giving consumers that are interested in content or promotional messages but have their hands tied when it comes to taking action, an integrated radio/Web tagging system could be just what it takes to make radio more actionable and most importantly, more measurable.
For terrestrial radio stations, this type of system creates new value for listeners and aligns radio with the important trends that have led to ad dollars moving to digital mediums.
And for everyone involved in the radio ecosystem – advertisers, stations and consumers – it combines the real-time nature of radio (which podcasting can’t deliver) with the direct response nature of the web and could help save this dying medium.
Here’s a prediction – not for 2010 – but for 2012 or beyond. Like Apple, Google will align with car stereo OEMs (or hybrid GPS/car stereo systems as they are doing with Google Earth and the upcoming Audi A8) and integrate tagging capabilities into their devices. In a few clicks, you’ll be able to “tag this segment” or “tag this ad.” These tags will then be queued locally on your stereo and eventually surfaced to iGoogle or some soon-to-be-launched dashboard that aggregates your tags from Gmail, Google Reader, Google Docs and the like.
Then, you’ll be able to listen to the content again using Google Voice (transcribed for reading via Gmail, of course) and with embedded calls to action (call this merchant, comment on this story, etc.), so that stations and their advertising partners extend the relationship with readers beyond drive time. Google could also roll out a “switch pitch” bidding system to allow advertisers to deliver offers and promotions against tagged content.
Right now, the infrastructure isn’t there to make it happen. But as Google rolls out more free wi-fi the US and as current connectivity solutions already in cars, including bluetooth, satellite radio, etc. bring the Web to our cars, it will be. And a new term, “driving the Web” will be coined.
Maybe by then, I’ll need a new mattress.
The Changing Way We Read
Media consumption has always changed over time as new technologies are developed, from fireside storytelling shifting to printed novels, or radio to the evening news on television. For years now, we have adjusted to reading on screens, but today, we are at the brink of a fundamental shift in the way we read.
Earlier this year, Rupert Murdoch suggested that News Corp would restrict all its content within paid walls, perhaps going so far as to remove their content from search engines. With Google responding by very publicly stating how they can help newspapers and adjusting to allow publishers to limit users to view five pages a day without registering, it would seem that media giants still hold power. But this is less a complete collapse of media channels and more a merging of media with new reading platforms – desktop, browser, e-reader, mobile, tablet, etc. Publishers are just now starting to innovate on these mediums, developing new experiences and new ways to read.
The e-reader market has been picking up a lot of steam recently – Kindle just had their biggest sales month since launching and Barnes & Noble’s Nook joining the market, which, despite recent reviews, has continued to pique consumer curiosity. Apple is rumored to be releasing a tablet early next year, and companies such as Vook (a LaunchSquad client), are creating new reading formats. Just in the past few weeks, we’ve seen publishers left and right announce new initiatives that respond to this e-reader and tablet excitement.
Condé Nast announced last month its Digital Magazine Initiative starting with an e-reader version of Wired magazine, and the publisher has also been experimenting with iPhone app formats for its content, in the form of GQ’s Men of the Year issue. Early this month, Time Inc. released a demo of a new digital version of Sports Illustrated, complete with photo libraries, video and interactive ads. While its own physical tablet prototype has been developed, like Condé Nast, they’re not committed to any one particular platform yet. Hearst, just last week, announced a partnership with Sprint to launch Skiff, an e-reader platform and digital store focused on connecting publishers with marketers, in 2010. To top it all off, the five major periodical publishers – Condé Nast, Meredith, Time Inc., Hearst and News Corp – are coming together to create a “Hulu for magazines,” a digital news stand where readers can purchase and manage their subscriptions. The main challenge will be to develop digital standards and formats, so that their varied content can be viewed equally on a wide variety of devices – soon-to-come color e-readers or more multi-media friendly tablet computers.
Similar to the changing way we approach reading novels and longer-form magazine pieces, the way we consume the news is still taking shape. Customization is the new way to take in news – whether it’s your Tumblr community or your Facebook feed, we are hearing about and reading news in an instant and curated way. Twitter, for some, has come to replace RSS, news sites and even search as a main source for breaking news, and with its newest lists feature, it’s even easier to filter the stream and be selective about how you skim and read. PubSubHubbub is working with blog and social networking platforms to bring these updates and posts instantaneously to your networks and companies like ShareThis (client) are helping media fit into this new “sharing economy,” allowing them to capitalize on the virality and engagement of forwarding, retweeting, liking and voting. Even Google is trying to adjust old-world media to find a place in the online way of reading, with Living Stories, which is a new project in collaboration with the New York Times and The Washington Post that presents on-going, evolving stories in a new online format. All these means are helping us stay informed of content through a closer social circle or curated set of sources.
Mobile devices, and especially iPhone and Android platform, take real-time and personalization to another level by putting the content in your hand wherever you are. Apps from local news sources like Fwix (a LaunchSquad client), Outside.in or Topix show what’s happening in your neighborhood, and Fwix’s even allows users to “report news” in real time, directly from their phones. In addition to news and e-reading, there are also many apps that are useful for saving, noting or commenting on what you read. Instapaper is an iPhone app and bookmarklet that allows users to save articles and blog post to read later, a task that it invaluable for anyone that is keeping track of news during their busy work day. Evernote (another LaunchSquad client) is another great app to save and organize not only your own notes and photos, but Web pages and text from articles. This mobile reading is a shift beyond your typical browser reading – it’s not passive reading and goes beyond the conversation, it’s also personalized, localized and relevant to what we are doing in the physical world.
Technology is changing the way humans are interacting with text, with content. There’s no standard yet as ubiquitous as unfolding the morning paper, but it’s not for lack of trying. Give it some time though, and a few platforms will start to emerge as front-runner in this nascent market. Whatever does emerge as the new way we read, it’s going to be a whole lot different than unfolding that paper.
Working Together For A Better Web
Tim O’Reilly kicked off the Web 2.0 Expo in New York last week with words of caution, an extension of his recent blog post “The War For The Web.” The Web visionary that coined the term “Web 2.0″ and defined the Internet as an “operating system” sees a battle brewing that is very reminiscent of one that took place over a decade ago. In the mid-1990s a browser war started between Netscape and Microsoft as the two fought for desktop penetration, eventually leading to incompatibility across the Web, as some sites were best viewed with a certain browser.
Today, things aren’t so different, as behemoths like Apple, Google, Facebook and Amazon are building their own platforms which are often accused of being “walled gardens,” rather than building upon the Internet as a free, and open platform. Examples include the strict review process for the iTunes App Store, Rupert Murdoch’s recent mention of removing News Corp. sites out of Google’s search index, and the inability to take your personal data with you from sites like Facebook and Twitter. To say these companies are evil is taking things too far, but O’Reilly stressed that more emphasis must be put on creating benefit for the user, instead of solely focusing on building competitive advantage.
O’Reilly sees two sides of the Internet operating system, and in a nod to Lord of the Rings, named them “One Ring To Rule Them All” and “Small Pieces Loosely Jointed.” The path we’re currently headed on is reflective of the former – a no-holds-barred death match between the platform owners, while the latter describes a world that has fewer controls and helps to foster creativity and innovation. Concluding with a quote from Jeff Jarvis, O’Reilly urged businesses to, “Do what you do best, and link to the rest.”
At Web 2.0 Expo NY, several new businesses are doing just that – innovating while also building on what others have successfully created, and opening up further development to even more people. Here are a few examples from the conference:
Boxee
Although Boxee technically didn’t announce anything new (the beta unveiling is on December 7th), CEO Avner Ronen hosted a panel on customers acting as brand evangelists. If you aren’t familiar with Boxee, consider it a social media center for your TV. Not only does it pull in your personal content like videos and photos, but you can also stream content from the MLB, Last.FM, Netflix, Pandora, and more. Since Boxee allows developers to create their own “channel,” more than 150 great applications are available to enhance your living room experience. One of our favorites is Cliqset (a LaunchSquad client), which allows you to have a real-time conversation with friends while watching your favorite video.
Foodspotting
Described as a “foodie-powered field guide,” Foodspotting was born after founder Alexa Andrzejewski realized it was difficult to search for specific dishes on existing city guide services. The Web site (a mobile app is coming soon) allows “food spotters” to post photos and descriptions of dishes they’ve eaten. “Food seekers” can then search through these dishes, and vote them up, which awards credibility points to the original spotter. The service hopes to eventually tie into different products like Foursquare, where foodspottings would be incorporated into location check-ins. Now I won’t be scratching my head when I’m trying to find the best banh mi.
EarthAid
Think of it as a dashboard for all of your utilities, the power meter of the future. Currently compatible with 106 utility companies, EarthAid empowers users by allowing them to monitor and effectively reduce energy consumption. Incentives in the form of points redeemable towards discounts, and offers from partners, and the ability to share data with friends, makes conserving energy fun.
I encourage you to explore the great videos and presentations given at Web 2.0 Expo NY to learn more about how the Web is evolving.
Why Facebook and Twitter Should Start Charging Users
What if Facebook and Twitter started charging users for their services? It’s something I’ve been thinking about for a while and have wondered why at least one of them, especially Facebook, have not experimented with in any way.
Let’s look at Facebook in particular. Over the past few years, the service has evolved into a daily utility for tens of millions of users in the U.S. alone. I’m talking about people who essentially cannot – or at least prefer not to – live without it, whether it’s for the fun, games, social interactions, photo sharing, or like me, as just a virtual and dynamic database of your personal and/or professional contacts. For many of these users, Facebook is probably as important (and for some more so) as having cable TV, a smart phone, satellite radio, or a host of other paid monthly, subscription-based services.
If Facebook was able to get a hearty set of these users to pay a nominal monthly fee for unmitigated access to its services, the company could quickly become a legitimate multi-billion dollar business (instead of an on-paper one). Let’s look at some [admittedly arbitrary] math. Facebook says publicly they have 300 million active users, 50% of which access the site in any given day. Let’s divide that number by half again and say there are 75 million fairly loyal and passionate users that would be significantly affected by not being able to use the site. How much would those people be willing to pay to continue to use the service at the level they currently are? How about $2 per month (or the price of one over-priced coffee)? Voila: that’s a whopping $1.8 billion dollars in pure profit-based revenue. And it’s more than FIVE times the estimated total revenues the company generated in 2008.
How about Twitter? There were 23 million users during the month of September (this excludes those who are consuming content from or through Twitter, which is soon to be just about everybody, knowingly or not). We know there are a lot of people who experiment unsuccessfully with Twitter, or do not use it very often. But there’s also a growing group of daily die-hards, including a good chunk of the 40 or so folks at LaunchSquad. Let’s conservatively peg this number today at one million people who are habitual Twitter users. Would those folks pay the cost of a coffee every month to keep using it in an unlimited fashion as they are today? If they did, Twitter’s suddenly generating $24 million in annual, subscription-based revenue for itself. For the record, that’s about $24 million more than they are currently taking in, give or take a few thousand bucks.
Obviously there are some good reasons why Twitter and Facebook have chosen to not go down this path. They are in high-growth mode and, unlike most startups, they have enough leverage with their investors to keep the “path to profitability” mantra at bay. Anything that might curtail registrations and usage is a big no-no.
Of course, any movement to try and develop this business model would have to be done with great care and deliberation to mitigate the backlash.But I think it may be a mistake though for them to not add this to the short-term plan, and begin experimenting with the most loyal users and seeing what the appetite may be and where the price points are that begin to truly hurt free usage growth. Even if Facebook charged those 75 million users only $5 per year, that potentially doubles their revenues right off the bat.
Update: Given the past comments below, I want to more clearly note here that under these hypothetical scenarios, Facebook is still free for the vast majority of users.
Bigger picture, there is a potentially huge domino effect that could happen here. If a company like Facebook or Twitter, or some other big name trendsetter, could ultimately prove that the Internet does not necessarily have to be free, it could have a profound effect on the entire universe of innovation, startups, venture capital, M&A and even the IPO market. It could even hasten and ignite the economic recovery.
Think of all of the companies out there currently pursuing free service models and relying on the combustible and unpredictable advertising market as their path to success. Not to mention the set of “freemium”-model companies, such as Evernote, TimeBridge, SugarSync, Anchorfree (disclosure: all are LaunchSquad clients) and countless others who have to deal with financial markets that question their long term potential despite having innovative, valuable technology and loads of very happy users.
This could also significantly impact media companies who are trying to come up with ways to charge for the content lest they crumble and die. If Twitter and Facebook are no longer free for loyal users, Rupert Murdoch & Co. have a much clearer path to creating pay walls and generating revenue for access to content. Admittedly a lofty thought, but this could be the savior the newspaper industry has been waiting for too.
I may be overstating things here, but a world in which people more readily accept that services like Facebook are not eternally free is a very interesting one to ponder.
We Accept Mastercard, VISA and … Your Mobile Phone
As someone who’s constantly trying to downsize baggage, I’m always looking for ways to consolidate devices and accessories. One of the first reasons I chose to buy an iPhone was to consolidate my iPod with my cellphone. Of course, with the iPhone’s newer models and App store, a mobile phone can hold more than just a handful of devices: everything from video camera and game player to personal assistant and running trainer. Now, with new mobile payment companies launching left and right, the phone is taking over yet another accessory: the wallet.
The U.S. has been waiting a long time for mobile payments. When I was in high school in Japan, I remember mobile technologies being second nature to metropolitan lifestyle. It wasn’t unusual for student, businessman, and housewife on the train to be immersed in a text message, novel, or game on their mobile phones. It’s not surprising that telecommunications companies replicated Japan’s Suica smartcard technologies to work with mobile phones, allowing consumers to pay for train rides, convenient store purchases and more, with a simple swipe of their phones. A Forrester Research survey found that 15 percent of Japanese mobile phone users make payments and purchase products in stores with their phones, and most Japanese cell phones today include the standard FeliCa wallet phone chip that makes this possible.
Phone payments have also been successful in countries like Kenya or India, where ATMs and credit cards aren’t as accessible as mobile phones. Some have speculated that the U.S. hasn’t adopted mobile payment technologies as fast as these developing countries because the adoption of mobile devices isn’t growing at the same exponential rate. Although a recent Nielsen report showed that only a quarter of mobile users accessed the Web via their phones in July, that’s a 34 percent increase over last year. Mobile seems to be ramping up in the U.S., and it shows, now that several new startups are coming out of the woodwork to promise the convenience of using your phone as your wallet:
Within the social networks and gaming space, two companies that have been competing mobile micro-payments are Boku, which charges your monthly cell phone bill instead of requiring a credit card or bank account, and Zong, which partnered with Facebook this summer to allow mobile payments for its virtual currency, Facebook Credits, and was selected by LaunchSquad client Mochi Media last week as its mobile payment platform.
For small businesses and merchants, Seattle-based start-up Billing Revolution just announced last month a partnership with credit card processor Authorize.net, which will allow its more than 200,000 retailer partners to offer “one click” mobile purchasing. Freeddom, a company that just launched at DEMO last month, has already built a business in Brazil helping retailers, telecommunications companies and banks turn consumers’ phones into their own private label credit cards. Sellers simply enter the purchase on their phone or Point-of-Sale device and customers enter in their personal identification numbers (PINs) to pay. If you think about all of the street vendors and food trucks around, especially in NYC, it’s obvious that there’s a need for a better, wireless payment system.
There’s even a solution for the average Craigslist or IOU transaction. A few weeks ago, while at nextNY’s @shakeshack II, event (which LaunchSquad sponsored), Megan Soto and I got a chance to demo a new mobile payments solution, Venmo. In under 5 minutes, founders Iqram Magson-Ismail and Andrew Kortina helped us set up accounts, transfered us each $1, and showed us how to transfer funds to each other through SMS texts. Venmo, based in NYC and Philadelphia, has a set of helpful how-to guides on their sites around practical use cases – like how to use Venmo for Craigslist transactions or how to sell music at a gig. I can think of a dozen more examples where I’d text-to-pay micro-payments to friends, and as someone that occasionally sells and buys on Craigslist, I’d appreciate the ability to skip the “CASH ONLY” on every post.
Obopay is 4-year-old company that’s partnering with big players to bring mobile payments to consumers and merchants. In 2010, Obopay and Nokia will launch Nokia Money in undisclosed markets, allowing users to send money to other mobile users, pay merchants and utility bills, or top up prepaid cellphone minutes. Obopay is also working with MasterCard on a person-to-person mobile payment service called MoneySend.
There’s also been talk that Twitter co-founder and chairman Jack Dorsey is working on a mobile payment gadget (hardware) start-up code-named “Square.”
So what does this recent bevy of mobile payment companies mean? Several smart people thinking about and betting on (investing in) this technology means that we’re likely to see a major shift in the way we pay, in the same way that PayPal and Amazon have done online. Speaking of PayPal …
On November 3, PayPal is holding an event, PayPal X Innovate 2009, where it’s going to open its API to third party developers, allowing others to innovate and find new ways to pay and get paid online. TwitPay is an early example of this, combining Twitter and PayPal accounts to essentially allow you to update your status to pay someone instantly. PayPal already has a mobile application, but perhaps its open API will encourage more innovation into new forms of online and mobile payment solutions.
It’s hard to tell if consumer behavior change to support these new forms of payment. Even if it does, mass adoption will probably take a long time (Gartner predicts only 3 percent in North America will make mobile payments in 2012). Nonetheless, it’s certainly impressive to see all of the companies tackling this space, and I look forward to someday lightening my purse of a wallet, its cash, cards, checkbook and all.
The Internet Makes Kids Write More – LOL!
We’ve touched on this issue a bit before, but given that we here at LaunchSquad work in an industry almost entirely based on the written word, its worth revisiting. A major pet peeve of mine is hearing people talk about social technologies as narcissistic or meaningless babble. This – sadly – often comes from traditional media folk who are often scared at how the Internet is revolutionizing their profession, and it’s an irritating and incredibly disingenuous thing to say.
So, Clive Thompson’s piece in Wired, “Clive Thompson on the New Literacy” was a breath of fresh air. In it, Thompson analyzes a study done by a Stanford professor that claims that we in general, and kids specifically, are writing more now than ever, and amazingly, 38 percent of that writing is so-called “life writing,” or personal writing.
This is remarkable if you think back to the pre-Internet and e-mail proliferated 1990s. People simply didn’t write back then unless it was for class or work. I remember when I got my e-mail account in 1997 during college, I used this mysterious new creature primarily for sending assignments and occasionally writing cute little notes to my girlfriend, which still felt oddly impersonal. But think how much that has changed. We now use the written word for interpersonal communication more than any time in history. Yes, some of those conversations are, “OMG, u r the gr8est person I no. LMFAO!!1!” – but it’s still transmission of thought through the written word, something that was dying in the pre-Internet era.
That idea of the Internet killing off writing is beyond irritating and is simply not true. For all the “LOL” and trite abbreviations we see online, there is also a ton of useful stuff that kids – and adults – read and write. People simple read and write a ton more than they did 10-15 years ago. And to all the fuddy duddies who complain about the “death of prose” – please, shut up. More reading and writing is a good thing, be it in the long-winded, haughty pages of the New Yorker, or the adolescent ramblings of MySpace.