Revolutionary Measures

Virtual Reality – the new mobile?

Oculus Rift

Acquisitions by large companies can be a bit of a mystery, forcing people to ponder why they are spending their money on unrelated markets or technologies. Is it a stroke of brilliant foresight, PR by association or just bailing out a mate with an interesting idea?

Facebook’s purchase of virtual reality company Oculus VR is the latest purchase that has led to a lot of head scratching. How does the company’s immersive headset for video gaming fit into Mark Zuckerberg’s vision for the future of the social media giant? Will every Facebook user be issued with a headset so that they can see their friends and ‘like’ things in a virtual world?

Zuckerberg himself has said that he sees virtual reality as the next stage of computing, after mobile, and the company is planning to expand the use of Oculus technologies to include “communications, media and entertainment, education and other areas”. Some of the original KickStarter backers of Oculus, which initially raised £1.5m on the crowd funding site, are unhappy that they won’t see any of the $2bn purchase price, but their reaction seems to ignore the basic site premise of providing funding for zero equity.

Having been to a demonstration of virtual and augmented reality technology a few months ago, I think there are three main reasons that Facebook has shelled out for Oculus VR.

Firstly, bear in mind they are actually ‘only’ paying $400m in cash (the rest is in Facebook shares), so they are not betting the farm. And as an internet company that started with essentially one product, they have been diversifying rapidly into neighbouring markets, with the purchase of WhatsApp and Instagram. This mitigates the risk of having all your eggs in one basket and provides the chance to diversify and sell other things to your enormous user base. The perfect case in point is Google. While it began in search it now offers everything from mobile and desktop operating systems, robotic cars, smart thermostats and cloud-based office applications.  And that’s the stuff we know about. In an industry as fast-moving as the internet, clever companies realise that they can’t stand still – better to take a punt on a variety of new technologies, see what works and learn as you go.

In my opinion, the second reason is based more on a desire to be taken seriously. Google has Glass, Microsoft has Kinect and Amazon wants to deliver your parcels through drones. All bold statements that lift the company from being about mundane bits and bytes to being part of the real world. Facebook has a shedload of money and is essentially aiming to compete with its older, more established neighbours.

But the third reason, is that Zuckerberg might just be right and VR could be the next wave of computing. The fact is that companies, brands and marketers are continually trying to get closer to consumers, and bridge the gap between the digital world (where everything can be measured) and the messy, chaotic real world. From Google Glass headsets to augmented reality and even QR codes, companies want us to use our mobile devices to interact with brands. The businesses that manage to own this intersection will be extremely powerful gatekeepers, in the same way that Google is the start point for the vast majority of internet browsing or searches.

Time will tell whether Oculus becomes central to Facebook or withers away in a corner of the campus. It does mark a step change in Facebook’s growth, since, while the product is about virtual reality, the headset is a physical device, rather than an app or social media network. What it does show is that the Facebook of 10 years time will be radically different to the network we see today.

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April 9, 2014 Posted by | Creative, Social Media, Startup | , , , , , , , , , , , | Leave a comment

Generating a network effect – why WhatsApp is worth $19 billion

As I’ve said before, the technical side of creating a new social network is relatively easy – and nowadays with cloud computing you have fast, cost-effective access to the resources you need to scale it in line with demand.

Diagram showing the network effect in a few si...

But how do you create the demand – for your social network or any other service in today’s complex and fast-moving world? Essentially you rely on the network effect – the fact that the more people use a service, the more valuable it becomes to each user. A classic example is the telephone. If one person is connected, it is worthless, but add more users and the positive effects increase dramatically – you actually have someone to call. It can also drive lock-in – if 80% of businesses use Microsoft Office there are compatibility issues for those that don’t, but who want to share documents with them.

Social networks are a classic example of the network effect in action – the bigger Facebook gets, the more people are on it who you know and supposedly want to communicate with. WhatsApp is another. It has built a base of 450 million users – 70% of whom are active on a daily basis. And as it allows free texts to be sent between users (and doesn’t cost to join for the first year), why wouldn’t you sign up to message your friends? No wonder it is predicted to hit the billion user mark in the relatively near future.

So how do you create the network effect and catapult your startup into the $19 billion bracket? There are six things I think are necessary

1              Word of Mouth
Obviously people have to know about your network or service, but traditional PR and marketing can only take you so far. What you need is people to recommend it to their friends, so start by researching and targeting the nodes of networks (i.e. those with lots of connections). If they join then their followers will as well. Approach these people and maybe even make them brand ambassadors to get them onside.

2              It has to be different
In open markets there is no point trying to simply copy what is already out there – if people are already using a service, the alternative has to be different or substantially better, if they are going to join. What issues/problems do people have that you can solve? In the case of WhatsApp it is removing the cost of sending text messages, so there is a clear advantage of moving to the service.

3              Make it easy to use (and free)
An obvious one, but if people log on and have to navigate through a maze of functions when they join, they are going to be put off. From registration to ongoing use, make things simple for people. And you have to understand and appeal to a mainstream audience – test it out on real people, rather than early adopters and fellow geeks. An intuitive user experience and comprehensive online support, including video and how to guides are a must if you are to grow. Put it where people will use it – on their mobile devices as well as PCs. And the basic package has to be free if you want to recruit major numbers of people.

4              Make it compelling
Just getting people to join is the easy part – network effect relies on them actively using the service. LinkedIn had this problem a few years back. Everyone had joined, but no-one was logging on, unless they were actively looking for a job. It changed this by adding in compelling content that aims to drive you back to the site – from the thoughts of business leaders to seeing what your peers are doing. You need to create reasons that drive people back to your site on a daily or even more frequent basis if you are going to build a solid user base. 

5              Think global from the start
When it comes to tech and the web, you need to think global. Does your proposition work in Delhi as well as Derby? The wider the target market, the bigger the potential user base, provided you make it appealing to a worldwide audience. Even if your site is initially just in English, the user experience has to be understandable by non-native speakers. As things grow you should quickly add other languages, dependent on demand.

6              Keep evolving
Nothing stands still – since its acquisition, CEO Jan Koum has announced that WhatsApp will offer voice calls on its platform, putting it in direct competition with Skype and traditional telecoms companies. You need to add new services and functions to both keep momentum going, ensure users return regularly and to recruit new ones.

The success of WhatsApp demonstrates it is less about the technology, and more about generating network effect if you want to attract a lucrative exit. Is it worth $19 billion? If it can continue its growth, introduce new paying services and bolster Facebook’s own platform it might just be.

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February 26, 2014 Posted by | Marketing, PR, Social Media, Startup | , , , , , , , , , | Leave a comment

10 changes that Facebook has made in ten years

This month Facebook celebrates its tenth birthday, having come a long way from Mark Zuckerberg’s Harvard dorm room in 2004. Hitting 1.23 billion active users and 2013 revenues of $7.87bn points to an astonishing growth in just a decade – though several researchers have tried to spoil the party by pointing out that teenagers have been deserting the social network in favour of cooler locations such as WhatsApp and SnapChat. On the flipside there’s been an 80% growth in those over 55 joining up – and from an advertiser’s point of view, which is the demographic with most money?

Facebook logo Español: Logotipo de Facebook Fr...

As the parent of a ten year old, albeit one that hasn’t delivered any revenues yet, it is amazing to see the impact that the social network has brought, not just online, but to the world around us. This is particularly true when it comes to marketing – ten years ago digital marketing essentially meant creating a website, SEO or sending out emails, rather than the relatively sophisticated profiling that is now possible through Facebook.

So here’s my top ten things that Facebook has changed:

1              Our language has evolved
Ten years ago we liked things. Now we Like them, and friend and unfriend people in the real world, as well as online. Poking publically is still frowned upon though. The language of Facebook has added and amended written and spoken English, and made it into the Oxford English Dictionary.

2              Marketers have traded control for access
If you told a marketer ten years ago that they’d move from investing their budget in their own websites to fitting their content inside the constraints of a presence on a third party network they’d have laughed at you. But essentially that is what Facebook has done – consumer marketers feel they have to follow their target audiences onto the site and interact with them, if they are to drive engagement.

3              Consumers are now in charge
The relationship between companies and consumers used to be one way and top down. The very word consumer conjured up a vision of passive purchasers lapping up whatever was marketed to them without complaint. Social networks have turned this on its head. Got a complaint? Disagree with what a company is doing? Facebook (and, of course, Twitter) provides you with a megaphone for your comments and can reach a global audience within seconds. Brands no longer have total control – as my ex-colleagues Steve Earl and Stephen Waddington have pointed out we’re now in an era of #brandvandals, that have the means and inclination to undermine corporate reputations overnight.

4              Everything happens faster
This isn’t just because I’m old, but we’ve moved from 24 hour rolling news to second by second and minute by minute activity. Move away from your computer for a tea break and you’ll be behind the curve and out of the loop. The constant need to update your status, post what you are doing and react to other people doing the same does give immediate insight, but is it at the expense of longer term perspective?

5              You cast a longer digital shadow
Ten years ago there wouldn’t be much information available online on most people. Now people live on Facebook, sharing their most intimate moments without a second thought. But unlike the offline world, this information doesn’t disappear but remains available forever. So be careful what you post as a teenager, as it may come back to haunt you when you’re Prime Minister

6              News has changed
How we consume news – and how it is collected and disseminated – has evolved beyond all recognition. Facebook profiles are the first place that journalists look for information or reaction to events. Much of our news is shared or recommended by friends rather than genuinely found through our own efforts. Consequently bite-size stories have risen up the agenda, along with a focus on cute kittens and addictive but unprovable gossip.


7              Distance is less important
It used to be that your closest friends were those you saw every day, even if the main thing you had in common was location. But now you can hang out with people you share interests with, wherever they are scattered across the globe. For many people the main focus of their social lives is Facebook, not the telephone or face to face communication any more.

8              Celebrity hasn’t gone away
Social media has allowed celebrities, from the Queen to Justin Bieber, to share their lives and build a direct relationship with an audience, unconstrained by the press. But this comes as a price – you need to actually talk to your fans and engage, rather than shutting yourself away, surrounded by minders.

9              We’re more open
Perhaps too open judging by what many people post. But the stereotype of shy and retiring, emotionally awkward Britons has been completely destroyed by the advent of Facebook. There’s no limit to what people think is shareable or that they believe their friends will find interesting………….

10           We’re beginning to grow up
Our attitude to how our private data is mined and used is changing. When Facebook began, few were bothered about what happened to their personal information – but that has changed as we’ve grown savvier about what it is worth. The next decade will see a fascinating struggle between Facebook (and marketers) and users, as each side tries to shift the needle on privacy.

 

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February 5, 2014 Posted by | Creative, Marketing, Social Media | , , , , , , , , , | Leave a comment

The all-seeing eye

People are still coming to terms with the lack of privacy that social media and the online world have brought. Some are happy with the fact that ‘privacy is no longer the social norm’ (to quote Mark Zuckerberg). However for many more of us the fact that our every online move is tracked (whether by large companies or the NSA) is a big worry. But at the moment, the usefulness of free online services, such as search and social media, outweigh the intrusion. After all, it is confined to the virtual world and provided you don’t do anything stupid, like give out your house number on Facebook, you can keep your real life separate from the web.google-glass

But the shrinking size of cameras, and the forthcoming launch of Google Glass, promise to merge the offline and online worlds like never before. Whether deliberately or by accident you can photograph and share images, video and audio in real time, without the knowledge of those around you. Combining this with the vast store of digital information on the web enables people and places to be easily identified, tagged and shared. So far Google Glass has privacy safeguards built in – it bans facial recognition apps and requires either a voice command or tapping the top of the glasses to take a photo. However given that there is already a hack to take photos by winking, I can see developers getting round this all too easily.

Should we be scared? The normal argument trotted out by those in favour of increased surveillance is that only the guilty or those with something to hide should be worried. And obviously the ability for the police to identify criminals and terrorists is a major positive of ubiquitous cameras. But what about the person who happens to be snapped where he or she isn’t expected to be – on their way back from a secret rendezvous with a lover, or a job interview that they don’t want their existing employer to know about? The difference between official surveillance, where access to the pictures is tightly controlled, and the world of personal photo sharing, is that everyone can see everything, without safeguards to limit access. There’s already issues with unauthorised photos taken upskirt or down blouse by low lifes with camera phones. Add in facial recognition to these, enabling the victims to be identified, and it makes the whole practice much more sinister.

For me the even more disturbing thought is what businesses can do with this data. Advertisers already have access to your location, your past browsing history and what you have previously bought. Add in what you are looking at, and your reaction to it, and it gives a 360 degree view of your behaviour. Spend five minutes idly staring at a poster at a bus stop? Look at a pair of jeans in a shop window? Expect it to be noted and used to sell to you.

Don’t get me wrong, the proliferation of personal cameras can be a good thing. They can be used to provide information on the world around us – want to know what that plant is or what bird is singing nearby? Google Glass can help. They benefit dementia patients, enabling them to fill in the gaps in their worsening memory. Personal cameras provide a tamper-proof record of conversations that can prevent litigation against doctors, couriers or the police. But in my opinion, the negatives outweigh the positives.

What is needed is a fundamental review of privacy and how it is enforced. And that needs to happen now, before Google Glass and its competitors hit the streets and become mass-market. Social media failed to do this – there privacy was an add on rather than built in from the start and this has had a major impact on how our personal data is shared. When it comes to something even more personal, what we see and what we hear, governments and businesses must act now to guarantee privacy before it is too late.

November 20, 2013 Posted by | Marketing, Social Media | , , , , , , , , , | Leave a comment

Million pound dropped

English: Harrison's chronometer on display at ...

On the face of it, David Cameron’s announcement of a £1m prize for solving a ‘grand innovation challenge’ is good news for UK science and industry. The competition will look at the biggest issue of our time (as selected by the public) and then be judged by an illustrious panel, chaired by Lord Rees, the English Astronomer Royal. The Prime Minister likened the competition to the 1714 Longitude Prize which was created to solve the problem of navigation at sea, and which spurred unknown Yorkshire clockmaker John Harrison to develop much more accurate marine timepieces.

All well and good – anything that stimulates debate on pressing problems for mankind and supports scientists and engineers is obviously welcome. Even Cameron’s idea of a ‘Britain’s got talent’-style show to identify the key issue that scientists have to solve is an attempt to put engineering and research back into the mainstream.

But there’s three main problems I can see – and unfortunately they run through a lot of the coalition’s thinking on science, engineering, technology and entrepreneurship.

Firstly, £1m is a pitifully small amount of money for an idea that will solve ‘the biggest problem of our time’. The annual Breakthrough Prize in Life Sciences (bankrolled by Mark Zuckerberg, Google co-founder Sergey Brin and tech investor Yuri Milner) has distributed $33m to 11 winners. And that’s just in one year. The new Longitude Prize is being funded by the Technology Strategy Board (TSB) and it appears (from what I’ve read) that the £1m is not new money, but is from the TSB’s existing budget. Hardly an expansion of government investment in science and engineering.

Secondly, like all politicians Cameron is driven by short timescales. Solving the problems the world faces can’t be accomplished in a single term in office. Research simply does not move that fast. If the Prime Minister checked his historical facts (perhaps he needs to speak to Michael Gove), this has always been the case. The original Longitude competition began in 1714 but Harrison’s clock was not successfully operational until the 1760s. And even then he was judged not to have won the official prize itself (though he was awarded multiple grants during his lifetime to recognise his achievements).

Thirdly, modern research is a global undertaking. Scientists work with their peers across the world, collaborating to solve problems across disciplines and countries. Look at the Human Genome Project – while the Wellcome Sanger Institute in Cambridge made an enormous contribution to sequence human DNA, it was a truly global effort, involving scientists from across the world. So if Cameron expects his prize to be won by a 100% British entry, he’s likely to be proved mistaken.

I really hope that the new Longitude Prize takes off and increases interest in science, engineering and technology. But, like investment in championing Tech City, it smacks of a short term, PR-led approach by the Prime Minister – aiming for headlines, not the lasting breakthroughs that take decades to unlock.

June 26, 2013 Posted by | Cambridge, PR, Startup | , , , , , , , , , , , , , | Leave a comment

When to give up

failure

It used to be that failing in business was a potentially catastrophic black mark in the UK – essentially the end of your career. But over the last decade attitudes have changed, driven by a more American view that it is better to have tried and not succeeded than to not to have bothered at all. There are a thousand and one reasons that a venture might fail, many outside your control, and as long as you learn lessons you can bounce back stronger.

This more relaxed attitude to failure is reflected in the growth of startups in the UK. Rather than leave university and go and work in corporate Britain, setting up on your own is a viable choice – if it doesn’t work you can always try the 9 to 5 in a few years time. And as the Seth Godin quote goes, “If failure isn’t an option, neither is success.”

But if the stigma of failure has been removed it brings another big question – when do you give up on your idea/business? Do you shut up shop at the first signs of trouble or soldier on when all chances of success are gone? That was the topic of an entertaining discussion at last week’s Pitch and Mix in Cambridge, which got me thinking about the whole topic.

It is easy to look at businesses or individuals where it would have been easy to give up when they hit the first roadblock. Harvard made Mark Zuckerberg take down the first version of Facebook and nearly expelled him – but he learnt from the experience and moved on. In Cambridge, ARM was essentially created within Acorn as Intel wouldn’t sell the computer manufacturer the chips they needed. The business pivoted and is now a multi-billion dollar world leader.

What came out from the discussion were two main ways of helping you to know when you’ve really failed and it is time to give up.

Firstly, set realistic objectives and goals for your company/project, with a timeframe attached. It shouldn’t be a hundred page business plan that controls your life but an idea of what success looks like and the time it should take to get there. Whether as simple as “we need to have made our first sale in 18 months” or more complex, use it as a guide to when to stop. If you get to 18 months and there’s no sign of a customer then you should probably give up, but if you’re negotiating with a couple, then extend your timeframe. Build a plan to get to your objectives – what needs to happen for you to make that sale/launch the project within your timeframe.

Secondly, get independent advice. Everyone involved in startups must have passion – if you aren’t enthusiastic about the idea you won’t put in the hours to make it work. However perspective is more difficult – you are simply too close to the coalface to provide an objective view of reality. So find yourself an independent mentor, who understands your business and what you are trying to do and give you advice and perspective on the way forward.

More businesses fail than succeed, but don’t take it personally, learn and move on. And marry passion with perspective to work out when to throw in the towel and start again.

 

April 24, 2013 Posted by | Cambridge, Startup | , , , , , , , , , , , | 1 Comment

Lucky vs hard working

What brings success? Is it hard graft or can you short circuit the years of work by just being a bit lucky?

Roulette wheel

That was the topic of a recent CfEL Enterprise Tuesday, where entrepreneurs Rahul Vohra and Shamus Husheer discussed what makes some businesses succeed when others fail. For the lazy amongst us, the unfortunate conclusion was that you need hard work as well as opportunity if you’re going to make it big. But you do need both – as Shamus pointed out, if hard work led to success, every woman in Africa would be a millionaire, and unfortunately they’re not.

Essentially you need to put yourself in the position to be lucky – so make sure that you are in the right place at the right time, and then grab the opportunity. For me the perfect example is Mark Zuckerberg and Facebook. He took an existing idea (a paper directory of students) and wrote an initially simple computer program to put it online solely for Harvard University students. As any programmer will tell you, Facebook itself isn’t the world’s most complicated piece of code, but it attracted users and the rest is history.

But look a bit deeper and there’s more hard work involved – Facemash, the first version of Facebook, was closed down by university authorities for breaching security, copyright and individual privacy and Zuckerberg was lucky not to be expelled. So he persisted, refined his idea and tried again. From Rahul and Shamus’s experience iteration is a key part of success – things aren’t necessarily going to work first time, but that doesn’t mean your idea is worthless. Other people came up with Facebook-like services but through hard work Zuckerberg’s got the users it needed to take off.

So, while it is an easy response to describe someone successful as ‘lucky’ you make your own luck in this world. Aspiring entrepreneurs need to make sure they are looking for opportunities, making intelligent guesses about what might be a success and then working hard to develop a product or service that customers actually want. Like a swan, ‘lucky’ people may look calm, but underneath the surface their legs are paddling very hard………

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December 5, 2012 Posted by | Cambridge, Startup | , , , , , , , , , | 1 Comment

Farcebook and internet bubbles

Mark Zuckerberg, founder and CEO of Facebook

Mark Zuckerberg, founder and CEO of Facebook (Photo credit: Wikipedia)

I’ve found it difficult to watch the recent Facebook flotation, subsequent drop in share price and clamour of litigation without shouting “I TOLD YOU SO” at the top of my voice. Way before the flotation many analysts queried Facebook’s $100bn+ valuation given its relative lack of revenues but their voices were drowned in the hype. Just look at the number – with 1 billion users that’s a hefty premium per subscriber.

Obviously the growth statistics behind Facebook are impressive and there is still potential for it to grow in different areas around the world and by offering new services. But this is all potential rather than actual. A good comparison is Google – when it IPO’d in 2004 it had a valuation of $23 billion. Most of the services we now know Google for simply hadn’t been introduced, and the stock was priced according. Google has since increased its share value six-fold, giving it a market value of  $196 billion, helped by annual revenue of $39 billion.

There’s a decent chance that Facebook can ‘do a Google’ and monetise its users, probably through services that Mark Zuckerberg hasn’t even thought of yet. But equally it could languish in limbo in the same way as LinkedIn post-IPO without really demonstrating a vision for charging customers without losing them.

The bigger worry for me is that Facebook is continually held up by the likes of David Cameron as a posterboy for what British tech businesses should aspire to. And consequently we have a move to create frothy, social media driven businesses without clear business models, inevitably HQ’d in Tech City. It reminds me a lot of first generation dotcoms and the bandwagon that became. While some of these businesses may succeed, we need to look at what will create real value in the UK tech scene (the likes of ARM, CSR and Sage all spring to mind) and focus the best minds on solving real business problems rather than simply another cute network without any revenues.

So if the Farcebook float can change people’s perceptions that user numbers are good, revenues are not essential, then I think that’s a price that the gullible should have to pay. As the old saying goes, if it looks too good to be true, then it probably is.

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May 24, 2012 Posted by | Marketing, Social Media, Startup | , , , , , , , , , , | 3 Comments

Facebook+

Quel ricco sfondato di Mark Zuckerberg, founde...

Image via Wikipedia

Your biggest competitor is launching a new product that attacks your dominant market leader head-on. What do you do? You don’t want to look desperate but equally you can’t ignore it.

If you are Facebook responding to the launch of Google+ the answer is simple – infiltrate it. Founder and CEO Mark Zuckerberg allegedly joined the fledgling social network on launch and is now the most popular user, with more followers than Google founders Sergey Brin and Larry Page.

Of course, the account may be fake but I’d like to hope not given this is a brilliant PR tactic that means Facebook wins whatever happens. If Google had blocked Zuckerberg he could have complained to the media about a lack of openness. And as they’ve let him in he can ensure Facebook is central to the story. I’d imagine that Google execs are frantically drumming up followers for Brin and Page to unseat Zuckerberg from the Google+ throne as I write………..

 

 

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July 7, 2011 Posted by | PR, Social Media | , , , , , , | 1 Comment

   

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