Companies already make billions because they know our online habits. What if we could take a cut? ..... Today, people have no choice but to give away their personal information—sometimes in exchange for free networking on Twitter or searching on Google, but other times to third-party data-aggregation firms without realizing it at all...... something akin to a New York Stock Exchange for personal data. A trusted market operator could take a small cut of each transaction and help arrive at a realistic price for a sale. ..... fresh ideas and business models that promise users control over their privacy are gaining momentum. Startups like Personal and Singly are working on these challenges already. The World Economic Forum recently called an individual's data an emerging "asset class." .... Giving people control on a trustworthy market could encourage more and new kinds of data to be shared
I am a huge proponent of collecting and selling this data to make gigabit broadband free for every human being on the planet.
music listening is going to move into the cloud and that the dominant model will be streaming via free ad supported Internet Radio and paid subscription services.
The internet as a technology is best suited for the creation, distribution, and consumption of mindfood: books, movies, music. But we have to get rid of out of date business models first.
For all our emphasis on techies, I think what we need more of is business innovators. We need MBA dropouts who will offer us better business models.
Image by paulamarttila via FlickrYou can waste time as an entrepreneur knocking the doors of the wrong venture capitalists. VCs tend to have sectors they are knowledgeable about and are interested in. If you are not a fit, you are not a fit. You might have a brilliant idea, a brilliant team, a brilliant product, but if you approached the wrong VC, you will still get a no.
Venture Capital Investment Thesis Myths For venture capitalists, an investment thesis states the main idea of their fund–essentially, why your venture fund exists, and what it proposes to invest in ..... does the company mesh well with our macro-economic analysis? Are they operating in a market we understand? What are the future expectations of the sector? .... many venture capital firms don’t have investment theses. Those firms also tend to not last. .... Like writing a presentation/business plan/executive summary, there’s no set procedure for creating an investment thesis. ..... investment theses only last a couple years ... investment thesis will most likely be constantly tinkered with
I just finished watching one of my favorite movies by my favorite actor on the planet, Amitabh Bachchan. It is a full length movie that you can watch legitimately on YouTube. I think they made me watch three 30-second ads along the way. And I was happy to watch those ads. This is the comment I left with the video.
"Amazing business model. I hope your library size grows by a factor of 1,000. Hollywood should also follow this business model. Don't fight the technology. Instead come up with better business models. Great lesson that I hope more people learn."
This particular movie has had almost a half million views to date on YouTube.
I love it that the movie has Englishsubtitles. I understand perfect Hindi, but the subtitles allow me to share the movie with those who don't. I have always believed Amitabh has global appeal. He is the most recognized face on the planet.
I grew up watching Amitabh.
And, by the way, the ads were served by Google. So all movie producers have to do is agree to use the YouTube platform to serve full length movies. After a movie has been out in the theater one summer, put it up on YouTube. What about one year? You keep making money ad infinitum, pun intended.
....finally answering the question of how the company expects to turn its exponential growth into revenue.....Promoted Tweets....in the stream of Twitter posts, based on how relevant they might be to a particular user.....Twitter.com had 22.3 million unique visitors in March, up from 524,000 a year ago.... the first significant step toward a businessmodel..... and when someone rolls over a promoted post with a cursor, it turns yellow. .... chatter on Twitter can forecast box-office revenue for movies ....“Media like Twitter and Facebook are so enormous that it’s very hard to imagine it would be easy to manipulate the conversation.” ...... Twitter will measure what it calls resonance, which takes into account nine factors, including the number of people who saw the post, the number of people who replied to it or passed it on to their followers, and the number of people who clicked on links......Once Twitter figures out how to measure the number of people who read posts other than on Twitter.com, it will also allow third-party developers to show ads and share revenue.
"....and when someone rolls over a promoted post with a cursor, it turns yellow...."
That color coding was an idea I had promoted at my blog. The tweet ads have to look different from the regular tweets, obviously different. And color coding is the best way to achieve that.
Google did not do banner ads like Yahoo. Similary Facebook could not do Google ads. And Twitter ads have to be specific to the Twitter platform. Tweets are it.
Resonance. I like the term.
Twitter has taken its first big step in the monetization department. This might be the only step necessary. They could spend a few years just getting this one right and scaling it. Ultimately the process has to be automated just like for the Google ads. Most of the money will come from small businesses targeting locals.
Now I am going to bug Twitter a little less about going IPO, just a little less. It could now take its sweet time.
I came out defending the freemium space. But I, under no circumstance, am suggesting that is the only business model. Your hamburger stand better charge. Your coffee shop better charge for coffee. Walmart would not be the most successful company in the history of humanity if it did not charge. Your house should cost money. Food is not free. They pay you to work. You are not free.
It is just that the freemium kind is my favorite business model for online ideas. There are companies that charge. MeetUp charges the Organizers who go ahead and sometimes charge those who attend. I am going to the NY Tech MeetUp tomorrow evening for a cost of 10 bucks and I am happy. There are 700 others like me.
When you succeed with Free, you are going to die by FreeThey will be Facebook to your Myspace, or Myspace to your Friendster or Google to your Yahoo. ....... For Google, who lives and dies by free, we dont know who their BlackSwan company will be. But we all know it will happen don’t we ? The only question is when..... The same will happen to Facebook, Twitter, pick any company who lives off of free. ...... Their better choice would be to run the company as profitably as possible, focusing only on those things that generate revenue and put cash in the bank. ........ ecognizing that they have a better chance of beating Facebook by investing in a company they think can pre empt Facebook than by trying to reconfigure MySpace to be that company. Free vs Freely Distributed
First, there is no free. When you make money from ads, you are still making money. TV shows are free, but they run ads and make money. Is that free? I don't think so. If you are making money without directly charging your users, I think that is a tremendous business model.
And then there is free as in free but in the process you help build a brand. Step one, build a brand. Step two, monetize. Later. That is not free. As in, it is not business stupid. You don't make money on day one. But you make gobbles of money later.
Free is good. You get to cast your net wider.
People pay with their time, their attention. They give you mindspace. They pay, just not with money.
Google Search is free, but last I checked they were making ridiculous amounts of money. Are they stupid to not charge me two cents for every time I conduct a search?
Free is smart. But free is also the future. Free will win. The best offerings online will be ad-based. New forms of ads will emerge. For example, I take it for granted that Twitter will some day go public and will have a market valuation in the billions. You can bet it is not going to run banner ads like Yahoo in 1998.
And as a user I have no desire to pay for Twitter. Go figure.
Free is how Google beat Microsoft. Free is for winners. Free is smart, free is good, free is for the ages.
Free makes for a lean and thin business machine. It is a hassle to have to collect money from millions of people. It makes so much more sense to collect money from a few (or many) advertisers.
Or you can offer something for free, get a lot of people to use it, and sell it to someone else who might attempt monetization. You still made money when you sold. Why are you complaining?
Free also means you can go global, instantaneously. That is what the web is all about. The Internet is not America online. It is the humanity online, it is the World Wide Web. Pay attention to the first word: World.
Free means you don't have to deal with many currencies. Free means you don't have to worry if a user might have a credit card or not. As long as they come online and use your service is all that matters. Free is sweet.
There is free and then there is super cheap, and then there is below cost price, and then there of course is free free. You should be able to sell something below cost price for the same reasons you can offer stuff for free.
Mindfood - books, movies, music - is best served free, I think. Run ads, but offer them for free. And the web is the best distribution mechanism ever for mindfood. Technology has run leaps and bounds ahead of business models. You can't fight free, but you can make truckloads of money going along with it.
i’m a big fan of free, freemium, and business models based on some form of free access to web services.
i agree with you that technology is a fast moving industry and there is always a company around the corner who is going to take you down.
but i don’t think that free makes you more vulnerable.
in fact, i think paid makes you more vulnerable.
craigslist hasn’t done much in the history of the company on its platform and UI and yet it continues to beat all comers in internet classifieds. why? because its mostly free.
if it was mostly a paid service, i think it would be way more vulnerable to new entrants.
i’m a big clayton christensen fan and he talks about how the companies that are going to take you down always come up from below. there isn’t much below free
Big fan of your blog Fred. I agree there isnt much below free. And that Craigslist, for now, is a stellar example of free working. On the flipside, MicroSoft and Oracle are longer term examples of companies who have battled free software for the ages. If you remember, MicroSoft Office, was all but free whenit was first introduced. You could upgrade from competitor products for nothing and buy the whole suite for 99 dollars. Then they evolved to paid and have survived. This of course could fall into your category of firms that live off of paid upgrades. Which IMHO, is the best model.
Im a big fan of give them a free taste, then make them pay for upgrades. It is why I am still involved in a nicely profitable company, Filesanywhere.com, which competes with a company I used to be involved with, Box.net. Both offer online backups. One charges and uses that revenue to differentiate with upgraded services and customized services. The other used to charge (which is why i got involved), but now is facing the challenges of being primarily free.
There are companies on both side of the argument, but I would rather be invested in a company that can afford to continue to invest in their products without depending on advertising, incredible volumes of traffic or raising more money.
This is nothing less than Michael Dell trying to reinvent his company. It is as if he were launching another startup. Making the Titanic do a 180 degree turn is not easy. And there will be plenty to watch.
If you are going to ditch the idea of direct selling, and if you are going to no longer try to keep inventory low, then that is Dell 2.0.
Dell is now going to be more like the other PC companies. That perhaps should have been coming, because other companies have become more like Dell and have brought the prices down substantially.
There is this synergistic competition going on. PC companies are busy eating into each others' turfs. But the new move is still for Dell to prove.
The real news might be the mention of the four BRIC countries, Brazil, Russia, India, China, and the mention of the phrase "next billion." Those countries have much less in terms of internet penetration, and so ordering computers online is not exactly a concept. And if you are going to stock up stores with your machines, it is not exactly build to sell. The direct way has been to take the order and then build. Now you build and then go sell.
Michael Dell is a legendary entrepreneur. The CEO Rollins before him could not have made a move like this one. This is too unorthodox. He would have felt like he were undoing Dell. Can you imagine a Microsoft that is about to ditch Windows? In the late 90s, some Microsoft engineers actually did suggest to Gates that the browser instead of the operating system should be made the gateway to the computing experience. Gates suggested those engineers quit Microsoft and go join the Peace Corps.
Michael Dell's memorandum to Dell staff:
To: Dell Employees Worldwide
From: Michael & the Executive Leadership Team
Dell Confidential -- For Internal Use Only
One Dell, One Focus -- Simplifying IT for Our Customers
We met as a complete Executive Leadership Team for most of last week to discuss Dell's future. We left the week with a great deal of confidence about our plans for the next generation of Dell customers. Throughout our history we have worked as a team -- as One Dell -- and we have made quality PCs affordable. Now Dell plans to make information technology affordable for millions of customers around the world. We will do this by simplifying IT where others perpetuate complexity and innovating beyond hardware into solutions. This is one of the most exciting periods in our history but it requires all of us to stand together as One Dell to make profound changes and take well thought-out risks.
Here are some of the steps we will take to get there:
• Fix our Core Business to be competitive. The Direct Model has been a revolution, but is not a religion. We will continue to improve our businessmodel, and go beyond it, to give our customers what they need. We will simplify our organization to make it easier to hear customers and respond to them. We've already streamlined our executive leadership structure. We need to streamline our management structure to speed decisions and remove bureaucracy. We're making improvements in pricing, product development and fulfillment, and customer experience. We reorganized the product group to more effectively listen to our customers and develop end-to-end customer solutions. We are now revisiting our entire design process to improve our speed-to-market and focus on what customers truly value. Our new Global Operations organization, led by Mike Cannon, is working to take our supply chain and manufacturing to the next level of efficiency and quality. This group is also partnering with the regions and the product group to pursue new manufacturing and distribution models to address the unique needs of our customers in all markets. More broadly, we plan to eliminate overlaps in our organization and activities to enable us to deliver even more value to our customers. We also need to improve sales productivity. These won't be merely exercises in cost-cutting. We will re-invest those resources in the customer solutions that will build Dell for the future.
• Re-ignite Growth in our Core Business to reach more customers. We are taking some concrete steps to get growth back into our core business. We released the EC280 in March for first-time computer users in China. We will open a new factory in Brazil in May and a new factory in India in July to be closer to those huge customer bases. In June, we'll launch our new Inspiron models with personalized color options and improved mobile broadband. We will launch products and services for small and medium business customers later this summer. And our new Dell Data Center Solutions Division is addressing the unique needs of hyper-scale data centers for customers whose business relies on enterprise computing solutions. We plan to take our improved cost structure to acquire new customers and sell existing customers more products and services. We are accelerating down the path to be a truly global company giving customers around the world the best products, the easiest solutions and most choices.
• Build For the Long term to provide more customer solutions. Ron Garriques' Global Consumer team is re-inventing how we address the evolving needs of our consumers around the world and the unique needs of the next billion consumers in the large and emerging markets of Brazil, Russia, India and China (BRIC). With strong share position in markets such as Japan, the U.K. and Canada, now we are going to make a mark in the rest of the world. Ron and team are also tackling how Dell's consumer business should evolve in the long term in mature markets. Stay tuned for more here.
We are also embarking on a bold, long term initiative to radically simplify IT for our commercial customers. Simply put, the philosophy comes down to a set of core beliefs:
• You should spend less on maintaining I/T and more on innovation.
• Every IT project should not require an army of consultants.
• Computing should have minimal environmental impact.
• Superior information drives efficiency in your IT environment.
We are already taking steps to fulfill this vision, but we have a long way to go. For those of us who have worked for a while in this industry, we know our competitors drive complexity and needless cost into customers' environments. These so-called "service divisions" create a never-ending cycle of activity with unclear return on investment. We intend to break this cycle. We will build different kinds of services and offer key technologies that will help customers escape this complexity trap and unlock the true potential of technology. And, as we re-invent Dell to deliver on this promise for our customers, we will rely on Mark Jarvis, our new chief marketing officer, to ensure we properly position our new systems and solutions capabilities in the global marketplace.
We won't hesitate to use our company's assets to build or buy the capabilities and technologies we need to deliver on our initiatives. Our transformation will take time to accomplish. We need your help to identify how we can become more efficient and effective for our customers across all areas of our business. We want you to take action with your team and bring your ideas forward. On June 20, we'll launch the internal version of IdeaStorm called "Inside IdeaStorm" for employees so that you can tell us where you think we have opportunities to improve as a company and how we can streamline our work to eliminate low value activities. We will listen and we will respond.
This is a defining moment in our history and in our relationships with our customers. Just as we re-invented the way consumers and organizations buy hardware, we are going to re-invent the way the world gets access to IT. We are excited about what we will achieve for our customers as we make information technology more affordable for them and what that will enable them to do.
The future looks great for Dell and we are up to the challenges that we'll face on our journey -- challenges that will test, teach and ultimately strengthen us as a company and as a team -- as One Dell.
Thank you for transforming Dell with the customer in mind every day. Be sure to let us know your thoughts on this on One Dell Way.
In The News Dell Losing Its Religion, But The Devil Is In The Details iT News The last time Dell entered the retail space, it was a move made out of "panic" that bombed because the company strayed from its core strength: so explained Dell in his book, Direct From Dell, which he wrote eight years ago as a guide to good business strategy. ....... Dell's three Golden Rules, "Never sell indirect." (The other two Dell Golden Rules are "disdain inventory" and "always listen to the customer.") ..... To make its way into the retail channel or commercial reseller channel this time, the company may need to re-think its second golden rule of disdaining inventory. As of last 3 November, Dell reported that it had five days of inventory. ...... To make a go of an indirect sales strategy, Dell may need to ensure that its pipeline has enough PCs, notebooks, peripherals and parts in stock so channel partners can keep their customers happy. To build that inventory may take an investment so large it could eat into the company's already-declining profits. ..... the difference between Dell and other companies is that while all companies make mistakes, Dell never makes the same mistake twice HP on the riseAustin American-Statesman (subscription) Hewlett-Packard comes back fightingFinancial Times (subscription) Strictly PC – the new king of IT Times Online Hewlett-Packard – the archetypal Silicon Valley company that recently overtook IBM to become the world’s biggest-selling technology company. ..... HP employs more than 150,000 people in 179 countries, and last year generated $94 billion (£47 billion) from selling computers, printers, cameras, consul-tancy, IT services and much else besides. ....... One of the central themes of Tough Choices is HP’s “dysfunc-tional” board, and the infighting among directors that went on for years before Fiorina’s sacking in February 2005......... HP – famously founded in a Palo Alto garage ...... the board was made up of people who were individually very good. As a group they struggled ....... HP has more than doubled in value, its shares rising from about $20 to $42. ...... HP almost doubled its operating profits last year, to $6.6 billion. ...... the $30-billion-a-year PC business. ..... Dell has stumbled, exposing the limitations of its direct-selling model ........ continuing fall in computer prices, which causes more damage to the manufacturers of cheaper, unbranded PCs. ...... HP invests about $4 billion in research and development. An old joke has it that most of the group’s investment in innovation is in creating expensive new printer cartridges ........ the continuing increase in the number of documents and photos people are printing, increasingly from the internet. ...... Hurd has spent more than $5 billion on acquisitions, the biggest of which was last year’s $4.5 billion purchase of Mercury Interactive, a company that sells quality-assurance and monitoring software. ....... The company estimates its technology is used by 1 billion people and claims it is addressing markets worth a total of $1,100 billion. ...... He tends to talk in broad generalisations. “We’ve got to develop innovative products,” he said at one point, “products that are well-designed and strongly featured, and get them to market with speed at the right price.”
There is plenty left to be desired on the hardware and software fronts, but the real bottleneck in getting all 6 billion potential surfers online is neither, but connectivity. What business models could emerge to bridge up the digital divide?
Internetaccess is fast becoming a basic need. What do you need to survive? Food and water are obvious. After that free internet access might be pretty close. I am serious.
The word "free" is important there. You don't pay for television shows. You don't pay to search on Google. The ad-model works just fine. The same could apply to internet access.
Say a company (or two, or three) comes forth, and they beam internet access to all corners of the planet. The catch being, when you go online with them, they, not you decide what the homepage will look like. And for that first webpage, they bring you online for "free." Heck, they might even get you to use only their browser, in which case, they could keep a toolbar that will always be with you no matter where you go online.
A click is a click is a click. I am sure a company like Coke/Pepsi does not care who the human being is. They will want people everywhere to see their ads.
And such a democratizing force that universal internet access will be too. Nothing like that to empower the individual. How will autocracies - those that remain - sustain themselves in the aftermath? They plain can't. Social transformation will be quickened. Universal education will become a reality, and it will be seamless from one level to another. A student in Bhutan could be following lectures at MIT.
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_vARSnS1gl8dIf0IZxo0LG67VbhOhhhahvsXtH8Sj2J5cjQdzDwO-Rc2mGxB3AmiOu1aEVJBhP9_FRxzi9l5wP8kocZXSvqwdW9uLKZa6nu86Le9YQB_GHbFAnvSkfIHfUftxpnH23LYeG_Oo9B7PA=s0-d)
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uztNXQbcTfQZYVQibuxQRo9wQlqwiNwZqkls2ZgQ3SHp4vqWL8r4Wg_7khyANIwzOny8fs9VQ7-fgrskV4AREZYmR0_3P0NdQ4rapSmCPiV3TpREvAQghvD69dStqdXW1Fr3ZmXYJ3YAK8zTa9SY3f=s0-d)
![Reblog this post [with Zemanta]](https://lh3.googleusercontent.com/blogger_img_proxy/AEn0k_uUyIeqStdYhLWgz09aqBZK1VkfrtVpuPR-7pJQcgo0PMJsW6jJ7TesN8V772O5oapJnhRCW_8Kx8nyR1xYYDlRpfpVeFOK3kKRDIBwvbANOWFxLVV6Hsp1ajxpwUObC9BmxlbnVA0LQ9bRfUUyUqSJ=s0-d)
mark
i’ve been writing a lot about this topic over the years and posted my thoughts on gladwell and anderson’s recent efforts yesterday
http://www.avc.com/a_vc/2009/07/freemium-and-freeconomics.html
i’m a big fan of free, freemium, and business models based on some form of free access to web services.
i agree with you that technology is a fast moving industry and there is always a company around the corner who is going to take you down.
but i don’t think that free makes you more vulnerable.
in fact, i think paid makes you more vulnerable.
craigslist hasn’t done much in the history of the company on its platform and UI and yet it continues to beat all comers in internet classifieds. why? because its mostly free.
if it was mostly a paid service, i think it would be way more vulnerable to new entrants.
i’m a big clayton christensen fan and he talks about how the companies that are going to take you down always come up from below. there isn’t much below free
fred
Comment by fredwilson — July 5, 2009 @ 8:37 pm
Big fan of your blog Fred. I agree there isnt much below free. And that Craigslist, for now, is a stellar example of free working. On the flipside, MicroSoft and Oracle are longer term examples of companies who have battled free software for the ages. If you remember, MicroSoft Office, was all but free whenit was first introduced. You could upgrade from competitor products for nothing and buy the whole suite for 99 dollars. Then they evolved to paid and have survived. This of course could fall into your category of firms that live off of paid upgrades. Which IMHO, is the best model.
Im a big fan of give them a free taste, then make them pay for upgrades. It is why I am still involved in a nicely profitable company, Filesanywhere.com, which competes with a company I used to be involved with, Box.net. Both offer online backups. One charges and uses that revenue to differentiate with upgraded services and customized services. The other used to charge (which is why i got involved), but now is facing the challenges of being primarily free.
There are companies on both side of the argument, but I would rather be invested in a company that can afford to continue to invest in their products without depending on advertising, incredible volumes of traffic or raising more money.
m
Comment by markcuban — July 5, 2009 @ 9:28 pm