Archive for September, 2011

Daily Deals Sites due to go out of business soon

Today I was going through some articles online and came through on of them in which somebody stated that the daily-deals business has turned into an “arms race,” with competitors spending money to attract subscribers and hundreds of employees and making it more difficult for other sites to keep up.

This article immediately reminded me of similar proposition by one of my friends recently saying that since so many sites are coming up, funding is happening and thus we should also jump into this business. I was not convinced much though as sitting in US, he was just knowing the superficial aspects of the business which were : At the heart of the setting up a daily-deals site (in which the site takes a cut of the online coupons it offers consumers) — requires just a website, some emails and local merchants willing to offer a discount. But in my view as well, as the industry has started maturing, the costs of running such a business have soared.

In particular, the cost of acquiring subscribers who redeem a daily deal has skyrocketed during the past two years, said executives at daily-deal websites. While snagging early adopters who were curious about daily deals initially required little marketing, it now takes more spending to get to remaining consumers and to cut through the noise created by so many competitors.

For example, Groupon, the daily-deals market leader that filed to go public in June, spent about $7.99 to acquire each subscriber who actually redeemed a daily deal in the first quarter of 2010, according to regulatory filings. By the second quarter of 2011, that figure had nearly tripled to $23.46.

Overall, Groupon spent $378.7 million in marketing initiatives in the first half of 2011, up from $35.5 million in the same period a year earlier, according to regulatory filings. Many smaller websites don’t have the war chest to compete.

At the same time, daily-deal sites also increasingly have to hire more salespeople to line up coupon offers from local merchants. Groupon has 990 sales employees in North America, up from 201 a year earlier, according to its regulatory filings. LivingSocial, the No. 2 player in the space, has beefed up its sales force to 700 employees from 191 a year ago, said a company spokesman.

In India too, I have seen quite a few companies come up with similar models in hoards, some even starting sites just to garner funding…phew. I was wondering when I met some such company founders as to how can they even imagine of starting companies just to be able to get funding and they were willing to connect with me as I know some well known Venture Capitalists. These people asked straight on face if I would be able to connect them with VCs. Astonishing indeed. I always wonder, how can they do this and expect me to help them in such endeavors.

Even large websites have run into similar issues. Facebook said it would test its own daily-deals service in April. But it kept its internal daily-deals sales staff small before moving ahead with a bigger launch, said a Facebook spokeswoman. The company had 11 partner sites such as Gilt Groupe Inc.’s Gilt City offering deals through the social network. Yet it wasn’t enough of an investment and Facebook last month said it was ending its daily-deals business.

(Source: Excerpted from WSJ article)

September 23rd, 2011

Advanced technology usage by Govt. authorities

World is going techy day in and day out where as Indian systems and government has been running and continue to run at the same pace with same backward technologies or no technology at all promoting rampant corruption all over.

Recently, while I was waiting for updates on my seat allocated to me before I boarded the train, TC in train was busy updating on his device about people who have not turned up on their seats. I was worried that I may not get a
seat on the train but as I reached the station, I got a message on my mobile about the seat confirmation. I took it as a delay on server level but when I boarded the train and TC came to my seat for checking, I was astonished
to see him carrying the handheld device. I immediately congratulated him to have got advanced but to my surprise, his face expression had a sad smile. At first, I did’nt understand but then in a few moments I realised that now,
he had no option but to give away empty seats for free to waiting standing passengers. Whereas earlier, he was able to earn handsome amounts sometimes even upto more than Rs.2500 ($55 approx.)/ to and fro trip even on small route of 200kms. But, I was already wondering how Indians would feel once systems advanced with such handheld devices.

However, to everybody’s dismay, those hand-held devices were never seen again with TCs after a few days of trial. I am sure TCs must have created a union against the use of the same and thus the devices were discountinued. Such is the plight of Indian systems. Where as two days back (19/09/11), I read a news where US Federal Police would soon be using devices for Face Recognition. God only knows when such systems or any advanced technology at all would be used by Indian authorities.

September 22nd, 2011

Reputation and influence matters — not names

Twitter doesn’t care what your name is because it has realized that you and your activity are just as valuable to advertisers with or without a real name. That’s because advertisers want to target their messages based on interests, demographics, reputation and influence — things that have little or nothing to do with what name you use. You could argue that people who use real names are more likely to tell the truth about their age, marital status etc., but even those aren’t the real goal.

The reason why services like Klout have been gaining steam is that advertisers and marketers are looking to build a “reputation graph” that they can tie to the interest graph they get from watching behavior on social networks. They need to know not just what is being talked about but who is saying it, and whether they are influential. Does their real name matter? Not really. Did anyone care that Perez Hilton used a fake name as he built a small media empire under the noses of the mainstream media? No. Advertisers certainly didn’t care, because he had influence in the markets that they were interested in.

In a recent open house at the company, Twitter CEO Dick Costolo talked about how the service doesn’t really care what your real name is — all it wants to do is connect you to the information that you care about. And if that information happens to come from a “real” person, then so be it; but if it comes from a pseudonym, then that’s fine too. Twitter isn’t necessarily married to the idea of users having pseudonyms, Costolo said — it’s simply “wedded to people being able to use the service as they see fit.”

(Ref: Gigaom)

September 21st, 2011

Can you open doors with Phones?

Yes, you read it right, can you open doors with phones?

For a group of students at Arizona State University, smartphones are opening up doors in a more literal sense. Last month, residential advisors serving an engineering dorm on the ASU campus were provided with Smartphones rather than the usual smartcards to enter the building. To open door locks, the students hold their phones to a newly installed door reader. In addition, some students were provided with a unique digital key and PIN to open individual room doors.

The pilot program was the result of a partnership with HID Global, a purveyor of secure identification technology technology—including smartcards, the readers, the locking mechanisms—on ASU’s campus. ASU’s Laura Plough, the director of business applications who led campus efforts on the program, told Digits that students are responding favorably. “They want this to become ubiquitous,” she said, adding that the sample group has not only expressed an interest in using their phones to access doors, but pay for tickets to games, start meal plans and pay for on-campus laundry, to name a few.

(This news first appeared in WSJ’s Digit)

September 20th, 2011

Why brands need mobile apps & mobile wap sites

Over time, the mobile has gotten the keen capability of being a personal device that delivers relevant and premium material to its user, while keeping them connected and conversant. Mobile phones also got smarter, faster and more capable. Today, Smartphones can stand neck to neck with PCs for content consumption and basic content creation. Which is making the digital world about being mobile instead of being plugged in. This opens up a huge opportunity for brands, as the relentless march of mobiles over take PC and broadband users the world over.

We’re now in an era where it’s a given that phones connect brands to their consumers. The imperative question is of how they connect them and how that connect is maximised in its yield for the brand. Above all, mobile phones by design captivate the audience for a longer duration both in length of experience and quality of attention than any other medium available today.

Thus, many companies ask themselves whether it makes sense to set up a mobile app or mobile wap. The answer is you need to have both. One of the advantages of an app is that you can charge for it, while the wap site needs to be free.  Consider this, not all consumers have smart phones but most of them have gprs activated on their mobiles. Total internet penetration in Indian is in the vicinity of 7-8% while mobile penetration in 60%+ and further mobile internet user penetration is about 12%. Thus, just a few with smart phones would be able to download apps but most if not all will be able to browse the mobile site. This means if you just have an app, you are losing exposure to your content to a large audience which just have mobile internet but not necessarily a smart phone. Now, often customers may ask themselves if their needs or the business interest of the company is the main driver for this decision. One thing is for sure: Mobile Apps and the mobile web, not just because of the iPad hype, are getting more and more attention from a business perspective – from companies and brands as well as from prosumers.

With hundreds of stronger, smarter phones entering the markets every day, a brand today has a new method of engaging with their customer. And by engaging, what brands are doing is increasing their capability to deliver value to their consumers on their mobile phones. So, there are 4 objectives with which brands build apps:

1. Reach: To be able to extend a campaign, concept, ideology or service to a larger audience
2. Experience: To provide a rich and immersive method of user engagement
3. Sales: To fulfil a part of their consumer’s purchase decision making process
4. Delivery: To provide a part of all of its brand message or service to a consumer’s mobile phone

Strategically, there are 5 other reasons why companies should produce an app for their brand (besides of course a mobile wap site), product or service as an important tactic for customer engagement:

1. Trendsetter

Innovation is the quicksand for the future of a brand. If a company’s strategic orientation going in the direction of an outstanding position for market development, the mobile app is expected internal and external. If the external perception by customers is similar, no company will miss the permanent access opportunity to communicate with their customers. Especially when the brand can offer all news to the customer any time, any place, anywhere in short and essential information flow – without any possibility of distraction that the web 2.0 offers. And, only customers that see themselves as trendsetters follow the news of a brand in real-time.

2. Brandsetter

Being the first and best brand was, is and will always be a competitive advantage – not only in the real-time web. It generates powerful PR and the wonderful buzz effect of the social web community. In a competitive market landscape brands need to have a closer look at their presence and sustainability. The omni-presence and power of a brand can be optimized with a mobile app. especially, in a consumer engagement driven economy, marketers often ask: “What’s the latest cool app?” As soon as you show it to them, the app is being downloaded, tested and gets (in most cases) feedback by reviews. It climbs up in the app ranking and gets the desired brand attention from the app economy.

3. Fansetter

As brands are becoming more and more exchangeable, the prosumer is more likely to swap from brand to brand. What Facebook offers with their Facebook ad strategy (including fan pages), is the app for the mobile user. It is a closed surrounding for interaction between customers and brands, in which brands can concentrate in the customer dialogue. Customers who “like” their brands will take time for it (even flyers and catalogues are used as cross-selling products and get their awareness) and want to be the first to know. In the past, Nokia and the symbian system owned the market. The iPhone has revolutionized this market. Android followed and offers some good alternative for the future. The choice for a mobile is changing quickly. Brands who want to keep their fans need to offer an app for all systems.

4. Standard setter

Brands that want to keep their market leading position should set a standard. They can set up “rules” (standards) for industry sector processes, or may be offer those to the market. Often these lead to common sense standards which support convergent markets and boost the brand. This applies for communication, product development and customer service. And although companies might learn from the mistakes of the competitors, the question is: Why not set the standards for the competition? This is the idea of the web 2.0 ideology. Nothing is perfect from the beginning. if something is missing, it can be optimized, adjusted or set up anew – from the brand itself or from the community of the prosumer.

5. Service setter

24/7 service and support is a set standard for the modern customer. The more mobile the human beings become – not only in terms of web usage – the more it is awaiting the ‘always-on’ access to brand service. And the quicker the prosumer finds relevant data like hotlines, the happier he/ she will be.

However, all said and done, merely creating an app for presence or show won’t help brands beyond what gimmickry would help. Brands must also understand in what cases a mobile app would NOT make sense for their brand’s objectives. Audiences have millions of apps and content pieces to consume on their mobile phones. They will only be constant users of an app if a brand provides consistent benefits in using their app. The right channel for distribution and the right strategy for mobile engagement is what will make a brand app a true success.

September 19th, 2011

Freemium Games, the Most revenue generating apps

2 days back I was going through my wireless bills after a long time and I was surprised to see many Rs.135 (US$ 2.99 approx.) entries there. When I inquired at home, I found out many games have been downloaded and often upgraded too, many a times in ignorance by kids and wife at home. And today, I came across this study by Flurry. So, here I am writing some of it’s findings.

Freemium games on iOS and Android continue to dominate the app economy, now accounting for over 65% of all revenue generated among the Top 100 grossing apps in the App Store alone.

It differenciates between those who play and those who spend money in mobile freemium games.  This study uses data from a sample of iOS and Android freemium games with over 20 million users across more than 1.4 billion sessions gathered from Flurry Analytics, which tracks over 110,000 apps across the major smartphone platforms.  Let’s take a look at the results.

Broadly, observations are that heavy users of freemium games are younger, while spenders in freemium games are older.  The half that uses these games most, 13 – 24 year olds (55% of time spent), deliver only 21% of the revenue.  And the half that spends heavily, 25 – 34 year olds (49% of money spent), represent just 29% of usage.  We believe much of this has to do with play patterns, disposable income and relative available time.

In social games, consumers can advance in the game through “the grind,” the core set of gameplay activities that allows the user to level up, earn in-game currency and progress.  But to progress via “the grind” takes time and patience.  For consumers that have more time (or less money), they can afford (or must be) more patient.  Younger gamers, presumably high school and college-aged, likely have more time but less money.  So the grind is something they’re willing or must commit to, in order to progress.   And with more total available time throughout their days, they can play more frequently.   Simply put, they become your loyal users, but it’s harder to extract money from them.

On the other hand, 24 – 35 year olds presumably have more disposal income, but less time, due to work and family demands.  This combination makes them less tolerant to engaging in “the grind,” but also better positioned to buy their way out of it.  They play less often, but make quicker progress by simply spending. Further, when we expand the age range to 24 – 54, this older group generates nearly four-fifths of all revenue in freemium games.  In short, your whales may be older than you think.

hence the conclusion: Gen Y plays, but Gen X pays.

September 15th, 2011

How much does a basic e-commerce store set-up cost in India

On 250811, there was a post: “How much does it cost to startup a basic eCommerce company in India?” on Pluggd. Though the author has given the distribution correctly, but I differ to a great extent on the costs that have been mentioned. If someone actually takes these costs seriously, most people would never be able to start an e-commerce company at least as a side business by sparing Rs.4-5 lacs/ mth.

Besides the legal and accounting costs (which are also available in India at lower prices), only about Rs.15000 are required to have a basic online store, with payment gateway integrated along with many other facilities like integrated short code, Mobile QR code, mobile wap site and last but not the least back end for adding/ updating products in a jiffy. All this comes as part of a basic package. This platform is provided by Mobivite.net and a store can be launched in merely half a day i.e. no need of waiting for months to start your store. If people would like more facilities, upgrades to this package are also available at low annual costs. But, required services can also be opted for by paying for them extra as standalone items outside of the package.

Many of our customers in India and abroad use their services right from basic package to enterprise packages ranging from Rs.15000 to Rs.55000 annually with varying levels of services and promotional features available. Even the annual enterprise package is almost 1/8th. of Rs.4 lacs/ month cost given by the author on pluggd.in

September 8th, 2011

Wellness & Spirituality meets the mobile…

A major phenomenon that I see converging with the mobile world is that of wellness. With rising stress levels (24×7 lifestyles and work-life out of sync) the desire for harmonious living / a balanced well-being is getting increasing important. Here I foresee a disruptive innovation in the making where mobile devices will utilize all 5senses (taking them to a new dimension) and go beyond that with the integration potential from the healthcare/fitness-sports domain and also involving subtler spiritual aspects. And where more can this be led from other than India – the home of Ayurveda, Spirituality, Yoga, Meditation, Art of Living, Naturopathy, Aromatherapy, etc. How will a device enable Relaxation, creating a personal bubble, ‘my space’ or take one ‘back to basics’ will be perspectives such a concept will address. Mega-trends of simplifying one’s life with meaningful ‘holistic’ luxury and what really matters will be pivots. Imagine how lives could be transformed with a ‘spa’ in people’s hands that will greatly enrich their well-being. Wirelessly enabled sensors of various types will take on the form to create whole new products and experiences. In this case networked heart rate, pulse, glucometer, mind sensors will assist with measuring stress and other health variables so that we can proactive manage well-being. In fact there is a potential to use camera phones (via optical detection) to check blood pressure and heart health (e.g. pulse, respiration, blood-oxygen levels) that has been proven by Harvard-MIT Health Sciences and Technology program.

A glimpse of the above is already visible via the multitude of apps available mostly for iOS and Android platforms e.g. Yogalite, Medicine Buddha, iRelax, Fitness Trainer, iZen. With the worlds of AR (Augmented Reality), 3D, Holography coming together along with embedded sensors very interesting mashups of apps and content would be coming about.

This idea via project called ‘Shunya’ (alias project ‘Om’) was presented to H.H. Dalai Lama who provided very positive feedback and interest to take it further.

With the rat race phenomena taking on the world (specially in the ‘concrete jungles’) there will be an increasing need to escape from the stress and ‘wellness temples’ will take on an important role. So imagine you controlling your own ‘destiny’ in mankind’s eternal quest and ‘pursuit for happiness’ from the palm of your hand! With ‘Simplexity’* springing right out of the box it is all about providing the most pleasing and relevant experience.

by Anuraj Gambhir (Strategic Advisor & Innovation Evangelist; Ex – Director – Strategy & Innovation, Ericsson; Ex – Group Chief Innovation Officer & President – Strategic Business Development & Innovation, Spice Corp)

*Simplexity: a term coined by Anuraj (over a decade ago, refer to: http://en.wikipedia.org/wiki/Simplexity) depicting the need for simplicity in an increasing complex ecosystem – another way to put it is enabling simplicity on the front-end for the end use

September 6th, 2011


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