Category: Social Page 2 of 5

Big Data is Awesome. Or it is Not.

Only a few quick thoughts after inspiring days…

Big data has opened a lot of channels (and, no, not only to the NSA). The computation of vast amounts of information has incredible opportunities – quite literally the stuff movies are made of, right? And, of course, this means that there are both insanely awesome as well as insanely scary opportunities out there. Oh, and then there are insanely boring ones, too.

The difference between the first two and the last is in the ability to, well, compute it cleverly, i.e. use adaptive techniques. Because – as I never tire harping on about – it all doesn’t matter unless you can provide context. Context, however, is a fickle beast. Because it tends to shift; it is not a steady target. So the true magic lies in the ability to adapt, to vary your responses to an analysis depending how a specific data set develops and changes. And, no, that is unfortunately not mundane. Emerging data sets have the terrible instinct to multiply in options (think of the rice corns on a chess board example). So to tackle that process procures a very pure form of awesome. And that, my friends, is what we need to strive for!

If you have been following, it is not news to you that I am immensely intrigued by these dynamics. But for tonight, that is all.

Game Horizon 2012 / Slides

This week, I had the privilege to attend and speak at the truly fabulous Game Horizon conference in Newcastle (which is rather pretty as you will see in the picture). There was a plethora of inspiring and insightful talent that taught me a lot, including Torsten Reil (CEO, Natural Motion), Ian Livingstone (Life President Eidos and Founder of Games Workshop), David Helgason (CEO Unity), Mark Rein (Co-Founder Epic Games), Oscar Clark (Evangelist Papaya Mobile), Michael Pachter (Analyst Wedbush), Gareth Edmonson (CEO Thumbstar) and too many more to mention, all chaired by the formidable Charles Cecil (he of Broken Sword fame).

I gave a talk looking out on what we are trying to achieve for BlackBerry 10 on the gaming front, and here are the slides to it (some of which may only make sense if you actually attended…).

 

Facebook’s IPO with no mobile revenues

So here’s the mother of all IPOs then, and it was coming a long way. The web was buzzing, today analysts of any couleur are commenting and reading through the fine print of Facebook’s registration statement (known as the S-1) in order to find valuable nuggets of information that they had not had before and myriads of bloggers and journalists drool over the new wave of young wealthy people in the Valley.

No mobile revenue

Whilst I’d love to join into this frenzy, I want to focus on one point in the S-1 that caught my eye, and which might pose some interesting challenges for the social networking giant going forward, namely the large abyss between mobile use of the site and revenues derived from it. You will likely have read about the huge amount of Facebook users regularly using the site from mobile devices. According to the company itself, 425m active users (out of a user base of 845m) accessed the site using mobile devices; that’s more than 50%. And yet, Facebook does not derive “any meaningful revenue” (quote from their S-1) from it.

Why (these) ads don’t work as well

This is, of course, because it – thus far – did not find a good way to display ads in their various guises to mobile users. The screen real estate is scarce and it would be easy to destroy the user experience by doing so. However, with that growth in usage, they may have to review this approach. The challenge is then to successfully marry user experience on a small(er) screen with revenue-generating activities. And, alas, the latter are so far mainly display ads of various sorts. How successful will those be? My guess is not very much. It is likely one reason why Facebook so far has shied away from using them: it might just destroy the user experience to an extent that its users would be seriously upset.

And yet, it is only the latest case of highlighting one of the common fallacies of migration from web to mobile (and I am not even saying they are wrong to move that way; their user growth and occuption of that space will likely counter-balance that; I think it was Accel’s Rich Wong who said that it is easier to find revenue streams once you have 100’s of millions of users than to find 100’s of millions of users with a (pre-)defined revenue stream). Nevertheless, none of us would watch a TV commercial showing you a static picture and someone reading something out from the off (this is exactly how TV advertising kicked off). We were not overly thrilled by early attempts of online advertising; they were merely an attempt to convert billboards and printed circulars to the digital realm. It was not until Google’s AdWords that online advertising really hit it off. So why would we now be content with a mere port from another form of media?

The Japanese way?

Japan has shown that there are other ways. Japan’s GREE reportedly records similar revenues from about 5% the user base than Facebook does. It does so mainly with virtual currencies and goods (and, yes,  it has moved to a slightly different target market); users can customize their experiences within that social network by buying “stuff” to embellish their avatars, play, use, customize content, etc. Japan has always been something of the Galapagos Islands when it comes to mobile usage: what worked there didn’t often work elsewhere (anyone remember i-mode?). However, we are seeing a similar effect on smartphone applications: 65% of the top-grossing apps these days use some sort of “freemium” feature. This approach might be too late for Facebook now though. Its users would be up in arms would they start charging for features that users have come to see as free.

I am fairly confident that the good folks of Facebook are here to stay but I am still thrilled to see if, when and how they will begin to adapt. With all the very smart people in the company, we may just see the next wave of mobile monetization, and I wonder what it might be…

So social lost its sizzle, huh?

Happy new year, everyone! (that is, if you are inclined to follow that particular calendar…)

Have you, like me, been reading some of the predictions on what is and what is not going to happen this year? What buzzwords to remember, which ones to avoid? What to focus at, where to “pivot” to, what to ignore?

One of the predictions I read was that social media has lost its sizzle. Markets saturated with products, failed to live up to the lofty ideas of monetising it, done, begone… Now that is, of course, the prediction of either someone who looks only what seems investable by Sandhill Road this quarter (and by that notion, he is probably correct) and/or someone who forgets that one actually doesn’t create social but would need to seek to use and aid existing sociality. People are social, you know…

To be fair let it be known that the author of this prediction, Vivek Wadhwa (@wadhwa), a man with impressive job titles and scholarly assignments, did in fact mean it in the former sense (see his comment to a reply on RWW here). However, are we declaring anything dead upon hype-deflation only?

“Social” battles with the challenge at the moment that lots of me-too-business tried and failed to harness its power and make money from that at the same time. Now, I wonder whether that means it’s dead though…

On the “Facebook for rabbit breeders” side of things, I would just say that there can only ever be so many useful things for so many people. Get on with it. However, a lot of businesses think they have tried out “social” and have largely failed at it. That is a little more substantial perhaps but there are a number of reasons for this (and these are only the very few I could cook up on the last calm day before the office beckons again, so feel free to add any number you can think of!):

Reason 1: Categorizing “social media” as a marketing tool

Organizations tend to try and categorize certain “functions” or “verticals”. Social media? Ah, that’s marketing. Ooops. There are still tons of companies out there whose marketing departments conscientiously update their corporate Twitter accounts and Facebook pages twice daily, whilst blocking access to such services by their employees at the same time. If you are an engineer or product manager in such an organization, you won’t even get near anything that even smells remotely social. Now, what will your products, services, overall perception of the world take that into account?

Reason 2: Accounting for social media impact by “analysing” links, etc.

The “power” or “impact” of social media often is attempted to be measured for instance by how many leads were created (and converted into hard sales) by that link that was at the centre of last week’s social media campaign. This approach is merely mistakenly trying to press analysis of social dynamics in known measurement parameters whilst disregarding that it is an entirely different creature all together: social dynamics cannot be measured by counting the number of clicks on a link tweeted by the marketing folks (and I thought that should be pretty obvious to anyone even remotely familiar with the space by now).

Because these numbers will then be used by senior management (who are all too often not digitally native in the present-day sense of the word; doing e-mail and knowing what an IM is, is NOT where digital is at!), and, alas, social will again be relegated to the back benches of, well, marketing (because, you know, we are reading so much about this; we do have to have a report about our social media activity for our next AGM).

Reason 3: Social is a business of its own

“Social” is not offer walls, new ad-placement algorythms, check-ins, likes or otherwise. These are only fairly cruel (though effective) tools to harvest some of the fallout from social interaction: you can coerce people in using offer walls because competetiveness, peer pressure or any other familiar trait might make it desirable enough. You can put “Volker likes Brand X” bits next to your banner ads and hope you can borrow some of my (presumed) credibility with friends (although: what tells you that the fact that I like Jazz would make me buy T-shirts…) but all of these are merely utilising perfectly “normal” behavioural patterns of people: they like to socialize with those who are close to them (friends, family, colleagues, neighbours, supporters of your favourite club, you name it). It is not in itself a new business at all and, most important of all, it is not a business in its own right (I grant it to Facebook and the likes [how generous of me, huh?] that they invented a new way to make social interaction in certain contexts easier actionable (and those might indeed be difficult to replicate though if you take, say, Group On, there would seem to be tons of businesses out there that still cry out for some sophisticated new take on the models). But, again, their business is not “social”, they “only” use the combination of social behavioural patterns and unpredented scalability (and filtering abilities) of digital platforms to make what was always there easier and more accessible.

Social is witin us

The trouble then is that “social” lives with and within us. Humans cannot (normally) survive without social interaction. Outside investor presentations and elevator pitches,

social refers to the interaction of organisms with other organisms and to their collective co-existence.

(and, yes admittedly, if you have ever heard me speak, you will be familiar with this one). Does that sound like marketing? Does it sound like a check-in app? Does it sound like an online network with digital pinboards and such? No, not in itself. The real trouble is then of course that this definition misses the all-important commercial angle. You see, social interaction does, per se, not really care for gross margins, ROI and such.

Social business = aid interaction

The answer to what comprises a social business is then really is quite simple: make sure you create products or services (or indeed tweak or expand your existing products and services) to aid interaction between organisms. Period. Zappos shows it so well. Not by tweeting lots. But by interacting with their customers, by allowing the normal human to be seen, heard, recognized and appropriately responded to with whatever their question, concern, inquiry, problem at the time is. The commercial results are well-known but Tony Hsieh is still being seen as one daring bugger – I mean: how can you possibly offer people free returns without even asking? How can you possibly allow your telesales folks chat with a granny for an hour; the examples are plentiful (btw: make sure to read his book “Delivering Happiness”; it’s good!). Well, you can because it creates the social glue. It makes sure you interact with people in the way they seek to interact, and that is not normally a link-clicking way.

But they’re not a social media company, you say? They are only selling shoes by mail order after all (and tons of other stuff by now). But the way they sell them added the social fairy dust that made for this great business success. And good business it is. Just ask Amazon (who acquired them for a ton of money). But, more importantly, ask their customers! They are humans, you know…

The Internet Business is a People Business

Business on the Internet, social or not, is – as all businesses – a people business: if you do not find people to who you can add value, there is no business for you. Given how little of it has been “socialized” in the VC-speak sense, I do struggle to see why the sizzle should be gone. If you look to raise a ton of money and then flip your loss-making business on the back of a couple of buzzwords, yes, it might be over, but perhaps you should then not have been able to do it in the first place… For everyone out there seeking to create true value (and that value needs to be with your customers as they will otherwise feel horrendously ripped off the very moment they see through your tactics), then I would predict social in its current state only being the crisp morning of a bright fresh day.

To quote the legendary Buzz Lightyear: to infinity and beyond! 🙂

Image credit: http://heidicohen.com

Technology & Transparency: Still need Ethics

Here’s a Confucius quote (which I unearthed via my good friend Jonathan MacDonald):

When you see a man of worth, think of how you may emulate him. When you see one who is unworthy, examine yourself.

And then there was the next chapter in the phone-hacking scandal (cf. here if it really did escape your attention): a newspaper (allegedly) breaking the privacy of an individual – this time amplified by the shocking fact that that individual had actually been murdered at the time of the (hacking) crime. The news brought about harsh reactions, not only from amongst the people but also from venerable bloggers and journalists. There’s even a Facebook Group asking people to boycott the publication.

The outcry bemoaned the failing of technology (hackable) almost as much as the futile attempts to cover the tracks of the wrongdoer.

So what’s new? Nothing!

Technology Facilitates Transparency

I have long been making the case that technology facilitates transparency, and that that is a good thing. I maintain that.

You may have heard the story of the elimination of different pricing for fish around Lake Victoria when the fishermen finally got their hands onto mobile phones, so they could call the merchants at other ports rather than relying on whatever the merchant in their home port told them the price was. Transparency facilitated by technology: win. The above is a fairly straight forward case of the reduction of transaction cost (here: the cost of information) leading to the eradication of previously existing inefficiencies.

There are countless anecdotes (and scientific studies) supporting this notion and providing powerful proof for its validity (which, again, is so simple: reduce the cost of information and you shall harvest).

And then comes someone who uses technology to pervert elementary rights of individuals. And all goes over board. Or does it?

Murdoch is irrelevant

I posit that the latest (as all of the previous) NOTW phone-hacking scandal is not actually turning the above into one big question; it is a mere distortion that has not actually anything to do with the merits: invading someone’s privacy is wrong (NB: whether it’s legal or not is another question). With or without technology. The principle of what constitutes an invasion is usually (there may be exceptions for public figures) dictated from the perspective of the “victim”. Or, in the words of any good anti-harassment memo: If you feel harassed, you are being harassed. If you feel your privacy is invaded, it is invaded.

However, the act as well as the debate following it highlight one crucial piece that is often overlooked. And it has nothing to do with neither the technology nor the morality of those using technology to breach laws, rights, feelings. It has to do with orientation.

Transparency Reduces Friction; It Does Replace Neither Judgment Nor Ethics!

Be it Wikileaks, Murdoch’s papers’ conduct or super-injunctions (and their factual lift by the freedom of speech in the Commons), transparency facilitated by technology (as the main tool to reduce cost of balanced information to meaningful levels for each [connected] individual) is merely a tool, albeit a very, very powerful one. It aids the exposure of partisan interests and hence helps eradicate inefficiencies (partisan interests almost always add cost). And it works: apparently advertisers review their ads in Murdoch papers (cf. here).

BUT it does not replace good judgment or makes a call on the ethics of an action or inaction. This is why I called it an issue of orientation. People are – perhaps more than ever – required to judge and apply ethical standards to the information they receive.

This means that every single on of us is required to query, ask, debate; no easy answers anymore. This makes the world a better but also an inherently more complicated place. And it makes it even more prone to manipulation (arguably the reason why some try it on…) since the imbalance of access to information (i.e. the anti-thema to transparency) provides a lever to uproot that newly won freedom. If, however, every single one of us applies the beliefs and convictions we know to be true (and, yes, your truth may be different to mine), and keep the lines open, I firmly believe that discourse will guide us to a result that is “right”. But you have to have the guts and courage to apply your own thoughts, query those arguments and render judgment – for as long as you are not presented with a better case.

Technology is the Great Equaliser

Access to information is the biggest asset in an information economy. Technology aids this. And mobile is the single biggest medium in the history of mankind to facilitate this. I can provide you with tons of examples (but I reckon it is probably undisputed).

Technology also enables every single one of us to use it in order to get to sound judgment, to debate, ponder and ultimately assess of what we deem ethical. It puts all of us into the drivers seat of opinion-forming, which is something that has never been there before. There had always been powerful intermediaries (the media in its various forms through the centuries; market criers, preachers, scribes, authors, newspaper editors, radio and TV producers all had the cost of dissemination of information on their side: it was inconceivable that anyone from outside these circles could invade and publicly query. Now we can. But: we also have to! If we choose to stay silent, we should not bemoan that others form and disseminate the opinions we believe to be wrong.

Confucius is still right. Technology does not allow you to be an immoral, unethical knobhead. And, no, no one said it was easy!

Namaste!

Conference: Social Gaming Summit, London

Sometimes, the good things come quickly and without much fanfare. Tomorrow (that’s 11 November), the Social Gaming Summit will open its doors at the Stamford Bridge home of Chelsea Football Club in London. And  I will talk about how to bring the social element into the mobile sphere (and, yes, regular readers of this blog will be rather familiar with my stance on this).

So if you fancy a trip to Fulham to hear from the social games gurus from Playfish, Facebook, Playdom, RockYou, PopCap, etc, etc, please come along (a full speaker list is here). It is a tremendous line-up and should be tons of fun!

The conference programme is here and you can sign up here.

Virtual Goods Boom in 2010!

I stumbled across an interesting piece of intelligence today, which looked at the development of virtual goods in the market place. According to this, median spend on virtual goods by users in North America has climbed a whopping 67% year-on-year to $50 p.a.

Equally interestingly, males are the largest spenders and, broken down by ethnics, Asians (26%) lead Hispanics (20%) by some margin over whites (11%).

So far (sic!), most virtual goods (how many? I don’t know) are purchased from stand-alone web-based games (World of Warcraft anyone?) but 31% had bought items in social networks (that would be the Zyngas and Playfishs of this world) with 29% in “network-based games” (what are they, I wonder). Facebook credits were used by 16% of buyers. Mobile? No word. It’s coming though: do bear in mind that there are 3x more mobile subscribers in the world than Internet users! And, yes, that’s true…

Page 2 of 5

Powered by WordPress & Theme by Anders Norén