Fitbit – keeping (f)it simple
Interesting little device I saw today (that am not affiliated with), which sits on the cusp of mobile, healthcare / wellness and data-as-a-consumer-service trend, and does it as a combined device+service, rather than just an app: Fitbit. It has an inbuilt accelerometer to measure your steps, or your sleep patterns, and spits it out to a dedicated web service to track your progress.
The CPU, tech features and storage are no doubt fairly trivial - most smart phones wouldn't get out of bed for that (and a bunch already do similar things), but Fitbit are betting on simplicity. This removes many of the intimidating tech obstacles that put most people off ever trying to push their mobile limits - downloading apps, navigating a UI and syncing with a computer / web service.
Single use devices win on simplicity, but have a big downside: they make up for the lack of redundancy at the software level with wasted packaging. I hope they minimize this, making the charger compatible with other home electronics for example. More electronics enviro-waste is a big turn off for these gadgets.
Waste aside, these focused devices are here to stay. I don't see Nokia's decision to go for free navigation as necessarily being the end for TomTom and Garmin, or that the iPad will necessarily blitz Kindle. Single use devices (can) do one thing very well, rather than lots of things passably. If enough people care about that difference, both the focused device and the swiss army knives will continue to co-exist.
To get value out of the real-time web, thinks stock tips rather than Starbucks
The Real-Time Web is fairly frothy right now, with numerous startups either feeding the Twitter beast or extending the status update idea, witness the Facebook redesign, FriendFeed or the buzzy event-focused HotPotato. This is going to be an ever bigger story that needs to be better understood - Gartner points out that most firms lack a real time web strategy.
The rtw is more of a New York story than most web memes. Normally laggards on the Interwebs compared to our West Coast cousins, its emergence has finally given the Big Apple's speed-crazed denizens something they can get their teeth into. New Yorkers love instant; they turn email into instant messaging, and they (we) think people care about what we're doing every minute of the day. Perfect.
Leading the charge for the East Coast team are two exceptionally well positioned firms Betaworks (Bit.ly, Twitter, Tumblr, Tweetdeck...) and Union Square Ventures (Twitter, Tumblr, Outside.in, FourSquare...). Twitter singlehandedly created and now dominates this space. But in recent months I think it's headed off in a direction that takes us away from where the value will be. It started off with a simple question that was context (What are you doing?), but has since shifted to content, as celebrities have joined the bandwagon. Anything a celebrity says, even if a dull 3-word "I'm at Starbucks" update, is content. This has resulted in most people seeing the real-time web as nothing but a tidal wave of fairly low quality drivel, with no relevance to anyone but OCDs and stalkers.
But this misses the point. Twitter's original mission was bang on - context, not content is king, and this seems to me to be the real source of value likely to emerge from the real-time web. 140 characters is not enough for a novel, but it is enough to signal information that can be used elsewhere.
Blackberry-toting financial analysts, the meat and potatoes of this city, have an insatiable appetite for speed, and live their life in a blur of real-time data-driven decision making. These stand to be big winners here. One example I heard from ThomsonReuters recently - if a number of geo-tagged Tweets talk of a fire, powercuts or a bomb going off somewhere, it won't take much to connect that to the local businesses, and short the stock of companies relying on them as suppliers.
This is really a semantic web story, and one that needs machine readable structured data. The obvious ones that come to mind are location, direction, keywords, links and communication history. And the source of much of this - overlooked in most discussions and startups so far - is the mobile.
People designing tomorrow's real-time web plays should keep in mind the highest business value for the output of their services may not be celebrity-spotters looking for trivia, but analysts looking for semantically readable, mobile-sourced data to help inform and speed up business decisions.
So, good times ahead for those who can figure out how to connect the real-time web with the mobile - and not just at the creamy, mocha-flavored superficial level.
AdMob reaps the benefits of simplicity
I don't know Omar, but I've known employee number 2 at Admob Russell Buckley (one half of the MobHappy gang) - for a number of years. Wonderful result for him and the team, and a lesson for me. I've spent a lot of time thinking up fancy-schmancy new mobile advertising paradigms, most of which are gathering dust in powerpoint archives, whereas these guys "just" went out and built something that is simple to describe (banner and text ads on mobile websites) and they crucially, executed well, with smart advisors. Seven hundred and fifty million proof points that execution matters sooo much more than ideas.
So if I ever find myself going down the startup route, and i) what I do can't be described in 7 words or less and ii) executing to those 7 words is not what every employee spends all their time doing, someone please shoot me.
Mary Meeker finally gives mobile the thumbs up
Morgan Stanley Internet guru Mary Meeker presented her much-anticipated annual Internet trends talk at the Web2.0 Summit yesterday. This is the first time (she's been at this about a decade) that she's finally seen this to be the year of the mobile Internet, and spends most of the slides on that.
Couldn't agree more, in particular with these:
- Social networking on the mobile driving major changes in communication and providing new commerce opportunities.
- Mobile internet will create big material winners and losers in shareholder value.
Interesting, data-rich and worth a read, though I thought there could have been more about the explosion of mobile as the first Internet device for the next 1bn Internet users in developing countries.
The birth of mainstream 3D screens that don’t suck
There must have been a bunch of garage-dwelling coders being roused today with a poke in the ribs and an urgent "Dude wake up, you gotta see this!".
As they groggily clear away the pizza boxes and gather round their PC screen, I imagine there's a collective intake of breath and murmured profanities as they watch the very telegenic Johnny Lee describe how he can help anyone with a Wii and a pair of cheap looking infra-red glasses experience an awesomely-cool 3D experience from the comfort of their couch. This is not your father's colored-specs wearing, blurry and not that convincing 3D of yore, this really is the business, culled straight from a game developers' dreams.
Come on coders, inhale that coffee and start banging out the next rev of games, navigation aids and real-estate software and just about any other image-centric service you can imagine. The future for consumer-screen interaction just arrived and is banging on the door.
The new Picasa – Big brother with a friendly face
One of my favorite (and somewhat underrated) services from Google is their photo management sofatware Picasa. They bought this from IdeaLab in 2004, but unlike numerous other Big Co acquisitions, it's kept improving. It has a very smooth PC photo management client that is good at handling large numbers of pictures (though navigation is sometimes a little random) and seamless synchronization with the web version - 10GB of Google storage available for $20/yr. It also plugs into a bunch of partners' online photo services, which we've used to print out hard copies and create photo books.
They just released version 3.5 and it has come with some powerful additional features, most notably in the area of metadata management - ie improving the ability to add people's names, places and tags to the pictures you take. I think this will be a key battleground in the coming years as content creation is democratized and every device worth its salt can create and distribute content. As pictures get smarter and tagged with machine readable information of what is happening in the picture, which namespaces will they be using? Will this be a way that Google can unseat the defacto address book of the world, Facebook?
Taking a leaf out of Facebook's stunningly successful social tagging feature allowing people to name the subjects of their pics, Google goes one step further - it learns who your friends are and then automatically populates their names as suggestions. You train it first by linking some names to faces, then like a well trained hound it churns through thousands of pictures, suggesting matches which in most cases are uncannily accurate.
Sometimes it grabs rather indiscriminately - heaven help you if you have one of those class photographs in the background of a shot - it will pop up another few hundred faces for naming, while you scratch your head wondering where they came from. One of the best matches was correctly identifying the portrait sitting on the piano in the background of one shot as being of my wife's sister - the portrait was taken 25 years ago.
Face matching on the web doesn't seem to have learnt from the PC app, so there's some duplication, and I am told I have 10,500 faces to tag (this is not my current priority in life though). The open question is what happens next to all this data. There's a vibrant social graph being populated everyday by users that links Google's massive distributed contacts lists with faces around the world. Unlike Facebook it doesn't send a message to everybody who you tag, as that would be truly scary. It's up to you whether or not your name tags are displayed on your public albums, and there is a "report this" option if you find a tag on someone else's album that you want changed.
This is a feature that will be successful because it provides immediate benefit to the user - it's great to be able to create collages of your favorite nephew with one-click for example. However, there is something akin to driving SUVs here - it's fun and relatively costless in the short term, but is likely to be creating problems for people down the line. I suspect it won't be long before the first subpoena is issued to Google to support or deny someone's story in court. So if your conscience is free, happy tagging!
Nokia buys Plum, acquires low hanging fruit
Happy to report more progress in Nokia Service's business development - today we announce the acquisition of Plum. This is a relatively small acquisition (not quite the market-mover that an acquisition of another fruit company would have), but I'm excited about it for a number of reasons.
First, these guys are working on an area that I think is going to become increasingly important - private group social networking. As the mainstream social networks (e.g. Facebook) race to scale, people end up with hundreds or thousands of friends. Posting pictures - or your location - to hundreds of people is basically like doing it publicly, and that's not that interesting for many people. But making a horizontal sharing network also do good small group management is hard, and this is a problem that Plum has been addressing from day 1.
The other main reason I'm delighted is that this is a stellar team that's going to boost our Social Location group. CEO Hans Peter Brondmo is a tech rockstar (and with his black t-shirts and ripped jeans he looks the part too), having founded and sold a number of communications companies, and even written a book. He teamed up with Margaret Olson former CTO of Constant Contact and they put together a very solid team in Boston.
Welcome to Nokia guys!
Magic pills and the $290bn missing medicine opportunity
The WSJ reports on some fascinating new wireless apps that both improve patient care and lower costs. An industry report talks about annual savings from remote monitoring at "$10.1 billion for U.S. sufferers of congestive heart failure, $6.1 billion for diabetes and $4.9 billion for chronic obstructive pulmonary disease." Partly based on this promise, there was more VC investment in venture health-care in Q1 ($2.23bn) than tech companies ($1.88) - the first time this has happened.
Related to this, Mobihealth calls out the opportunity for better medicine management.
A new report conducted by the New England Healthcare Institute (NEHI) found that not taking medications as prescribed leads to poorer health, more frequent hospitalization, a higher risk of death and as much as $290 billion annually in increased medical costs. Anywhere from one-third to one-half of patients in the U.S. do not take their medications as instructed.
I suspect this number dramatically overstates reality, based on the breahtless overprescription of medicines and procedures in this country, and the fact that the drugs people forget to take are most probably the ones that are not helping them get better. But anyway, even if the number was one third of that, that's still an opportunity worth sharpening a pencil for.
When you have a hammer, everything looks like a nail, so I immediately think of text-based and mobile applications to do this. However, Mobihealth points to a next generation pill made by Proteus that contains a chip made of food (sic) that transmits info to the doctors by a pill ("Ouch, I was eaten at 12pm", "Ooh, this guy's colon is pretty messy"). It's facing regulatory hurdles currently, but as long as they can make the "it's food products, it's safe" idea at the top of mind, and get costs down below a penny a pill, this could be big. (The fact that the CEO is also a Brit transplant to US and studied at my university in the UK gives me extra cause for optimism.)
These type of Magic Pills will compliment not substitute the phone as the personal health solution. Once the data on pill consumption and their internal investigations has been surfaced, it will be trivial to create really interesting and useful consumer-targeted web and mobile applications that provide helpful pointers to the patient to keep them fit, and take some of the low-level grunt work away from doctors.
Want to charge for content online? Make it three dimensional
Trying to save the consumer content industry (in particular newspapers and the record industry) by charging for digital content faces all sorts of problems. Distributing content today is trivial, so charging for it is like trying to eat soup with a fork - you won't end up with a satisfying meal. What’s needed is to change the product into something new. This could be as simple as a bundle with another product, or a more ambitious exercise to create new services. Either way, the right products – three dimensional ones, not flat digital ones - may make people happy to pay.
First, a confession. I'm a newspaper junkie. Have been ever since Matt got me hooked on the innovative-sounding Daily Telegraph. I then graduated to the pink pages and would consider this one of life's essential luxuries (not least, because it would act as a great sun hat if I was stuck on a desert island).
One of my first and least rewarding jobs was selling advertising door to door to small businesses for the since defunct Staffordshire and East Yorkshire Tattler (no URL available, surprisingly). I was 17 and not much of a salesman - I lasted about a week. However, a more effective sales campaign by me probably would not have saved this magazine. The content was pictorial reports of garden parties and point-to-points, with some copy to support the advertisers of the day. Circulation a thousand, tops. Later in my journalistic “career” I worked as a cub reporter on the Leicester Mercury and before University did a work experience stint at the Economist, trailing the witty political editor Andrew Marr, sitting in on editorial meetings where Smart People discussed Big Topics. College and business school saw me dabble with a pen - for fun, not profit. I enjoyed hanging out with hacks, and liked being the master of my own product with no need for focus groups, and a release cycle of days, not years.
So, as a committed consumer, and occasional dabbler, I'd like to see newspapers and what they stand for survive. However, as a futurist in my early life at Nokia I've plotted enough trends to see where 30% declines in ad revenues lead. The Internet has pretty well solved the main problems newspapers are known for – disseminating information about what’s going on, and saying smart things about it. And they do this better on many levels. A Twitter page can show the collected insights of 15 different people I respect on a particular topic, not just one jaded Editorial writer. Or as Jason Jones points out on the Daily Show, they actually have news about today, not yesterday. The web has taken over the many of the easy jobs that newspapers had. As Clay Shirky points out, “Society doesn’t need newspapers. What we need is journalism. For a century, the imperatives to strengthen journalism and to strengthen newspapers have been so tightly wound as to be indistinguishable.”
Search engines index online newspaper sites and use that to answer consumers’ problems. They deliver a boat load of value to the user, keep a bit for services rendered and may arguably deliver some to the content source itself. Unfortunately search engines deliver eyeballs, but the newspaper industry hasn’t figured out how to monetize them successfully. Google does not make people buy more newspapers – the publishers’ choice of business model is not their concern. Rupert Murdoch recently lashed out at Google, complaining they are stealing their copyright. This strikes me rather like a horse complaining that it’s been led to water, but has not been forced to drink. Rather than figure out how to do something with the hordes of people search engines are delivering, industry veterans are running in the other direction. A variety of pay wall concepts are emerging (both micropayments and subscriptions) - many have been tried before, none have worked. In addition to Rupert Murdoch vowing to charge for content, Steven Brill’s Journalism Online has just signed up 500 newspapers for their subscription model and my very own FT has been encouraging others to put walls up.
While subscription models will work for a time with differentiated content that is difficult to share, removing great swathes of mass market content from the web is a reactionary move to hold onto a base of declining value. Google is not the enemy, they are simply better at playing the new digital game in which newspapers now find themselves competing for their life. Regardless of how it’s done (subscription, micropayments etc) creating pay walls won’t work for two main reasons. First, basic economics says price of a product will tend to its marginal cost – this is, in the case of digital information, zero. Consumer demand will route around these roadblocks and drive the price down. Second, the web is the new reality here, and it is based on the idea of stupid, simple links that do not have an authentication mechanism or a smart tollbooth built in. No single pay scheme will aggregate all “content”, which now ranges from high journalism to your buddies’ baby pictures. If it did, there’d be demand for someone to operate outside it.
Advertising and newspapers have existed for ever, but online ads have so far failed to move the needle in terms of revenues. Some suggest hyper-targeting the ads is the answer. There’s something here, but current ‘contextually relevant’ adverts that push their products based on keywords are not compelling - a knife company was recently horrified to see its products presented online next to a story about a stabbing. The other danger is if they work too well they’ll face consumer pushback. (“Honey, why is our online newspaper constantly showing us adverts for divorce lawyers?)”. Ads that are increasingly targeted on the reader’s every move will become as suffocating as being wrapped in Clingfilm (I had that done once in a Spa in France, and trust me, it’s suffocating).
Instead of trying in vain to charge for a product that prefers to be free or ever more vigorously push ads that people don’t want, content owners may be better off changing the product that they’re selling.
One way to do this is to make a bundle with other more robust business models. This is the logic for Nokia's Comes With Music – providing buyers of certain devices with unlimited song downloads to keep. This extracts some of the margin from the device sales to give to the content owners.
iTunes got there first, and has spent more time building additional value on top of content. They now sell a quarter of all songs in the US, but really it is not a digital music store. It is a seller of ‘instant gratification so you can play that song your girlfriend has just mentioned’ and of ‘the ability to take your music with you on your run to inspire a new personal best’, and more recently it is kicking the tires with smart recommender services that help you more easily navigate your collection. These experiences are what people pay for, not “content”.
This seems to point to a fruitful direction for content companies. Take a step back and ask what user problems are you being paid to solve. Think for a minute about a newspaper. Its value is not just in the printed words it carries, no, it is far more nuanced. It does the difficult job of filtering 10bn pages of the web into a manageable chunk (It is personalized). It is totally portable with a ‘screen size’ that can be changed instantly (It is contextually relevant). It is instant on. It conveys self expression – oh, you also read the WSJ? Good chap. It can be used as a note pad, a fly swat, a door stop, fish and chip wrapper or even, as mentioned above, a hat. (It can be combined with other products). These are implicit sources of value that I suspect have helped newspapers stay relevant, more so than the words on their pages, which if good enough, will be instantly distributed, regardless of the height of the pay wall.
Turning “dumb” products into three dimensional services could involve many things, but a place to start experimentation could be adding i) personalized and ii) contextually relevant information and services to the content, and iii) working with other companies to make your product work even better in conjunction with theirs.
This will involve many of the mostly-content companies transforming themselves into mostly-services companies. Certain commodity elements – dare I say it – even that Kabul reporter – will need to be outsourced to people who specialized in those areas. The challenge that many small newspaper companies will face is to build the infrastructure themselves. An individual subscription to the FT or WSJ is just about manageable, but a better model, especially for the small guys, may like the one proposed by a new startup called Kachingle. Here you start with a (Big) assumption that a large number of people will be willing to pay a small monthly amount, say $5 into a pot that is administered centrally. This cash pile is then shared out among participating content providers who have signed up to the system, and then doled out according to the actual traffic (which can be measured by cookies or manually clicking an icon on the site). So if the FT signed up for this, they would leave most of the content open to the web, but recognize when one of the participating members was visiting, and the system would register them a share of the cash. If readers consistantly read more FT than the Wisconsin Gazette then the FT will get more of the cash.
As my friend Jim Griffin, who is running a similar scheme for the record labels, points out, you need a fair way to split up the cash. The digital trails we leave around the web can be just that - as that is our attention. As long as we know we are benefitting the sites we visit, and can have some control about who gets our cash, this scheme has legs. All sorts of questions about whether such a scheme could ever reach critical mass, or whether this could be federated etc. But unlike the pay wall ideas above, it is based on having content available to the web for free, and providing additional services on top for people who pay. So a reader who does not pay sees the content, but when they are a payer, they see the content rendered in three dimensions – personalized, contextual and useful. The kinds of services that we’ll see are up to the imagination of the content companies, and we’re only now scratching the surface of what we could do with a new mountain of data. Whether its personalized alerts about stories of interest, delivery to your car of phone, offers from companies that you actually want or some angle of social networking (these people like the articles you read…). Who knows, we’re still early in the transformation, but we need to start coming up with ways to create positive, not negative, lockin.