Coincidences

•May 18, 2010 • 2 Comments

I have to write about these coincidences before I forget. Far too many of them these days…

  1. The ‘economy’ car that we rented on our Vegas trip a few days back, set me thinking. The rental rate was $15 per day. The car had no floor mats, no cruise control, no power locks etc. Regular ‘non-economy’ cars, that had all the aforementioned features, were priced at over $30 per day. Seriously, do these features warrant such a huge difference (in this case 100% over the basic product bundle)? ‘Price customization’ was what sprang to my mind. Obviously, these extra attributes don’t make a huge difference to Alamo (cost). More likely that they would have removed some of these to be able to price differentiate to two segments of customers, was my guess. Yesterday, while going through the chapter on price customization in Dolan’s ‘Power Pricing’, I was reminded of this. Lo and behold, just as I stopped thinking about the vegas car rental, the book quoted a similar example – How Ford introduced two different models of the Taurus, with a substantial price difference (Difference that was definitely higher than what the feature differences – i.e. No power locks, floor mats or cruise control – warranted).
  2. Now for a non-business example. These days, with not much to do, a substantial portion of my waking hours is spent watching sit-com episodes, movies etc. Big John Cleese + Monty Python fan that I am, I wanted to watch a Terry Gilliam movie, but could not decide what to pick. Leonard and Sheldon (From ‘Big Bang Theory’) helped me narrow it down to ‘Time Bandits’. While channel surfing that afternoon, I found ‘The Titanic’ playing on some channel. Watched it for a few minutes and thought about a few high school friends that I’d met in the movie theatre years ago, during a screening of The Titanic. In the evening, I reconnected (On facebook) with one of those high school classmates, after over a decade. I also read about the ‘S.S.Titanic’ somewhere (Don’t remember whether it was a blog post, internet article, or a book). Lastly, in the movie Time Bandits, the title characters end up on the S.S. Titanic from one of them time holes during their time travels, and are promptly thrown overboard. So, in the course of twelve hours, I was independently reminded of the Titanic, 4 times (TV channel, article reference, high school friend and Time Bandits)!

I remember trying to maintain a dream diary years ago, per Freud’s recommendation in ‘The Interpretation of Dreams’ (The first step in interpreting dreams is to remember them, and a dream diary aids dream recall). Thought I should start maintaining a diary to record these coincidences/déjà vu’s (Somehow, I can’t help feeling that these are also handiworks of the subconscious – Almost like ‘dreams in the conscious state’) before I start forgetting them. Guess, I need to start thinking of better topics to write about :-(

Normalcy returns…

•November 18, 2009 • 3 Comments

When I started the MBA program last fall, little did I realize the amount of stress and trauma that I’d have to endure over the course of the next 15-18 months (Reminds me of the title of one of Wodehouse’s short stories featuring Pongo Twistleton,”tried in the furnace”). It all began well – especially academics – A string of ‘excellent’ grades in the first term and I thought it was a path strewn with roses. Come october 08, it all hit the ceiling (Or fan), as they say. Companies cut down their interview slots, borderline-case companies suddenly started closing their doors to international students, some pulled out of campus interviews and some even rescinded offers. At the end of Feb 09, three on-campus interviews later, I had the none too familiar feeling of staring down a barrel. After that, I did a couple of telephonic interviews (Let’s face it….I am not a phone interview person…I am at my best when interacting with people face-to-face;). I worked part-summer with a silicon valley start up, and the second half, with a well established Health care IT firm.

Fast forward to Oct – 09: Full time on campus placement season – I dreaded the prospect of going through the whole song and dance once more. At the same time, I wanted to avoid the ‘self-directed job search’ ordeal. The first half of the on-campus recruitment season sprung up a few unexpected successes, in terms of obtaining interviews. I was close-listed by a couple of consulting firms. Unfortunately, I had lost all interest in consulting by then (First off, the lifestyle was going to be a challenge; secondly, based on my interactions with consultants during the internship recruitment process, I realized that consulting was not for me). Add to that the fact that I really enjoyed my summer stints with the start-up and the health care IT firm, my heart was no longer in consulting. So, while other consulting hopefuls in my class case-in-point’d till the cows came home, I whiled away my time reading mashable, techcrunch, gigaom, etc. I still could not just ignore these consulting interviews – after all close-lists were like free interviews, and when they were so hard to come by, there was no sense in giving up without a fight. So I ended up investing some time in preparing for these interviews; but the ROI was 0 (As with so many things in life) – one thing that MBA teaches you is to learn to tag such wasted investments as ‘Sunk costs’ and move on.

The good news about those close-lists (Or at least I thought so – Only later did I realize that I had never been wronger), was that ‘if consulting firms found my hi-tech internship experiences attractive, then the hi-tech firms would too, most probably’.But when tech companies started coming out with their close-lists (And my name was conspicuous by its absence from every single list) the sinking feeling started coming over me once again. So, Two weeks before the major ‘hi-tech interview week’ – I had zero close-lists from tech companies (Which meant that I would have to wager all my points on one of the 4 major hi-tech companies which recruited internationals)! The options were – Microsoft, Amazon, Intel and NVidia. There was no point in bidding for Intel or NVidia (There was competition from people with strong semi-conductor and other h/w backgrounds). MS and Amazon are both great companies to work for, and I would have loved to interview with both of them (Ideally, I was hoping at least one of them would close list me, and that I could bid for the other – But that was not to be). Eventually I decided to go with Amazon (The number of interview slots from the two companies was an indication of how many they were likely to recruit, and the hence the competitiveness).

I did fairly well in the first round (Comprising two interviews). I thought I tried my best to demonstrate some of the traits that Amazon is known to expect from prospective employees – a. Exhaustiveness (In terms of – factors to consider in making a decision, solutions to problems and the implications of such solutions). b. Taking a firm stand and not backing down under pressure.

Having gone through so many interviews in the last few months, I guess I’ve lost my ability to gauge my performance – There were times when I thought I’d done very well, but the interviewers did not think so, and vice versa. So, I wasn’t really sure about the result of this i/v (And then, history was against me – At least statistics from the past couple of years indicated that most people who eventually received offers from Amazon were the ones who were close-listed; very few people, if any, had managed to bid their way into the company). The suspense ended at 6 in the evening, when I received the dreaded phone call (My hands trembled mildly as I picked up my cell phone and saw the area code 206)

Other end of the line: “Hi this is xxx, from Amazon. Am I speaking with Jyothiprakash”

Me: (In a weak voice) “Yes, this is Jyothi. Hi”

xxx: “This is about the second round interviews…..(Something about the venue, which I hardly paid attention to; I was expecting either a “congratulations, we’re happy to invite you to the second round”, or “Thank you for taking time to interview with us…”; a matter-of-fact ‘here’s the second round i/v schedule’ was the last thing that I expected)…….OK. I’ll see you at 9:30 AM tomorrow”.

Me: (Still in a weak voice) “Sure. Thanks a lot. Bye.”

I don’t know what I was thinking, but since finishing the first round, I’d watched a couple of episodes of Blackadder and worked on an assignment….Which meant that I had very little time to prepare for the second round!!! In my first round interviews, I claimed that I wanted to work in AWS (Which incidentally, I really do!) but hadn’t done a whole lot of research on AWS or cloud computing in general (People who’d interviewed in the past said that the first round questions were not likely to be division specific). Ended up spending another sleepless night. (The only silver lining on an otherwise dark cloud of first and second rounds on back-to-back days is that, you probably don’t need to shave again for the second round – or at least, not if you’re someone like me, whose facial hair usually requires 3-4 days to regrow)

The first interview in the second round was fairly intense (A combination of business and technology questions – Some things about products, some about target segments, etc.). I thought I did a good job of asking questions at the end. Since I knew from the phone call that my interviewer was from AWS, I prepared a couple of business questions on AWS. A few words of advice (I’m sure, a lot of you would have done something like this already):

a. If you cannot think of good questions to ask about a business/company, read a couple of Gartner/Forrester reports, and you’ll have enough fodder for thought. One of my questions was around something mentioned in one such report. My interviewer’s initial response made me regret having mentioned the analyst report at all. He said that most analysts didn’t like Amazon, and that they usually tried to downplay Amazon’s achievements/strengths; but then, because he was so passionate about AWS, he almost relished the opportunity to counter the analysts claims, and justify why Amazon did what they did. So that was OK.

b. Try to think of stuff that you have learned in class and apply those principles to this company/business. Does anything seem out of place? If so, you have your question. Thanks to Prof. Ahuja’s ‘six pointed star’ (Sources of competitive advantage), I could think of at least two reasonably good questions to ask about their AWS strategies. In addition, Prof. Ahuja’s repeated hammering of feedback loops, network effects and n-sided markets, had left me with enough stuff to talk about, in response to some other specific questions that could be expected during the interview.

The second interview – with a senior director – was much more relaxed. The customary, “why do you want to work for Amazon?”, followed by “A challenging problem solved by you” , and then the case. The interviewer’s body language and facial expressions were encouraging – As I went through each point in my analysis, I could note a nod of approval (Followed by some quick note-taking). Then came the bomb “If I were to ask your previous supervisors for three areas of improvement for you, what would they be”? One, I could think of, two maybe, but three? I blurted out two of them (Which were not substantial, but could be passed off for weaknesses) and thought I could get away. But my interviewer gently reminded me – “So that makes it two. Can you talk about another one…”? After this it was time for questions from me. Again, I’d done my homework. The interviewer worked in the Kindle division, and I had a couple of high level strategy questions on this product. I also got a chance to express my passion for e-books (Given that I was an early adopter of ebooks – The desktop variety, not kindle though – I could wax eloquent about how I was the only one among my friends, who had embraced desktop e-books as far back as the late 90’s; and that, even back then I believed in the business potential of e-books, when most of my peers scoffed at the idea. Their argument was – “I can never read a chapter on the desktop, let alone a book; So this concept will never take off”. My line of reasoning was the diametrically opposite POV – “I can read (And have read) multiple books on the desktop; There are likely to be others like me; So there is a market”. During the interview, I even went so far as to say – ‘So when Amazon announced the Kindle, I said to my friends – “See, I was right” ‘. The interviewer seemed amused and said “Isn’t that a lovely feeling – To be able to say that?”. The best part about this conversation was that it was totally impromptu – None of this was rehearsed (At least the kindle part).
I came off with the feeling that I did really well in the two interviews with the people up top: The above mentioned 4th i/v with a director and my first round i/v, with a VP – What helped me in the first i/v was structured approach – The interviewer, in fact complemented me on how clearly I had written down whatever I was saying – and a little bit of creativity:When he asked me for examples to illustrate some of my arguments and claims, I brought in Indiana Jones, Harry Potter and a bunch of other things that are bound to touch a chord with anyone working in book/movie retailing. However, there were nagging doubts, especially about the grilling AWS interview. Anyway, what was done was done. The wait for the final results seemed almost interminable. I spent the next few evenings staring at the laptop screen, and continuously refreshing my outlook mailbox – Hoping NOT to see an email from them (In the past, the convention was this – If you were selected, you were usually informed via a phone call; in case of a reject, it was an email). On day five, I finally received the much awaited email from the recruiter. One look at the subject line (“Amazon full time offer information”), and I started dancing (Not physically, but mentally).

I owe a lot to my house-mate (Who fittingly enough, received an offer too) – For it was he who suggested that we prepare together (Two heads, they say, are always better than one) and took the initiative to start the discussions. So, the last couple of nights leading up to the interviews, we brainstormed for hours on possible questions, responses, and experiences of people who’d interviewed in the past.

In Blackadder’s words, ‘while fortune constantly farted in my face, and vomited down my eiderdown during internship recruitment, lady luck decided to smile on me, this time around’. All of a sudden, things were back to normal again (And I was no longer ruing my decision to do the MBA, every other waking instant)

“Net-working capital” story

•September 19, 2009 • 3 Comments

[I Know…My posts have started sounding increasingly like entries from an intern dairy/journal. This is the last in a series of essays that I’ve had to write as part of my “Holiday homework”…Boy does that term bring back memories….The kind of excuses that I used to give for not completing holiday h/w’s…In fact, I once went so far as to say that “There was a fire at my grandparents house which consumed all my material possessions, including my books and clothes”…Now wait, that did happen, didn’t it ?.…except that the extent of the loss was slightly exaggerated…while there was some damage, all my books were intact (And I heaped a shower of abuses on the blasted fire for sparing em).
How about this….I promise you that if you sit through this one last boring post about “networking” and my internship networking story, I’ll start writing about other general topics, in subsequent posts.]

I realized the importance of networking a little late in the game, and that hurt me in my on campus recruiting efforts. All the same, it was a lesson well learned. Prior to the on-campus recruitment season, I concentrated my networking efforts primarily on companies that recruited on campus (Microsoft, Amazon and a few consulting firms). After the on-campus debacle (That lasted all of 3-4 weeks, at the end of which some of my more fortunate batch mates ended up with more job offers, than the number of interviews that I (and some of my other, less fortunate “international” compatriots) were shortlisted for :-( ), I had to “cast a wider net” (As they say) and start looking at companies that did not traditionally recruit on campus. The following stories highlight a few positives that came out of these self-directed networking efforts of mine:
a. SVPMA: I casually mentioned to one of my alum-mentors, that I was travelling to the San Francisco Bay Area to spend a few weeks with my family. This gentleman, who was extremely passionate about product management, recommended that I take a dekko (I love the way Wodehouse uses this word….and am always on the lookout for opportunities where I can use it…But then of course we are lesser mortals) at ‘Silicon Valley Product Management Association’ (http://www.svpma.org/), while in the Bay Area. Upon reaching Sunnyvale, I reached out to the VP, Networking, of SVPMA, who invited me to the SVPMA quarterly networking meet (Drinks + food + structured networking). It was a case of Veni, Vidi & IWI (I went, I saw and I Was Impressed). The structured networking event in particular, was a revelation. I decided to become a paid member ($75 a year for students; Benefits include – Access to the SVPMA linked-in network; free entry to the monthly SVPMA meetings ($25 per meeting for non-members) with the following typical agenda: Food + 1 hour of networking + talk on various aspects of Product Management, by expert speakers). I managed to attend three such monthly meetings over the summer.
b. More SVPMA: The expert speaker during one such event happened to be a U-Mich alum (Not Ross though – he was from the Engineering school) – Mr. Brent Lang (COO of Vocera communications). I was amazed by how down to earth he was, despite his amazing achievements (Which included a Gold medal in the 88 Olympics). After the talk, I went up to him (It was a scene reminiscent of after-corporate presentations at the school, when about fifty people in the room, mob the hapless recruiter). The moment I introduced myself and said “I am so and so, MBA student at UoM”, his face lit up and the first words out of his mouth were “Go Blue”. We chatted for 10 minutes. He had some really interesting views on Product Management (A discussion that we continued over the phone, subsequently).
c. The ‘Ross’ brand: My strategy (Notice that the word “strategy” is being used very loosely here…Tactic would be more appropriate) during the SVPMA networking events was this – To write “MICHIGAN” and “MBA” in bold, on my name tag. This not only made it easy for Ross alums (I met a couple of them) to find me (Needless to say, they were surprised to see a Ross MBA at a SV event), but also helped attract attention of some of the other people in the room. Again, the amount of respect that the UM and Ross brands command in the bay area was a revelation (It’s a pity though, that it has not translated into more Hi-tech companies visiting the Ross campus for recruitment). During one such meeting, I ran into a Columbia MBA and serial entrepreneur (Among other things, he started the hugely successful non-profit social network ‘couchsurfing.org’). Before I had a chance to introduce myself, he started the conversation with how much respect he had for Ross MBA’s (One of his super-smart ex-bosses was a Ross alum). I took up his offer to represent his new community for startups, ‘MBAngels’ (A connection platform for the startup ecosystem) as Michigan representative / chapter leader.
d. Ross bay area alum events – The Ross bay area alum association is extremely active, thanks to the efforts of highly enthusiastic board members such as Dan Mclean, John Neeley, Jonathan Charles and a few others. During my Bay area stint, I attended three Ross alum networking events (That my internship was in downtown SF, made it easy for me to pop in and out of these meetings). I received valuable advice from a sizable number of bay area alums, and established relationships (Hopefully long-lasting) with some of them.
e. Internship – Last but not least, my networking efforts also paid off with an internship offer (that I received, through a kind-hearted alum). I crossed seven seas (metaphorically speaking, of course) in moving to the west coast in search of an internship. But fate willed otherwise, and brought me back to good ole AA for the second part of the summer. I had reached out to a senior VP at Thomson Reuters Healthcare & Science, Ann Arbor, earlier during the summer, and he said that he would let me know should something come up; and when it did, he promptly informed me. It was a short (6 week) assignment, with their operations group, and I worked on a costing/pricing exercise. While at Thomson Reuters, I was fortunate to connect with some wonderful people (One particularly touching gesture was made by a senior director of product management – who went out of her way in volunteering to mentor me on various aspects of Product management, during my internship). I also enjoyed connecting with a few other Ross alums at Thomson Reuters, including executive VP’s who generously offered to advise me on career related issues and provide references for positions within Thomson Reuters, should the need arise. Interestingly, I also had an opportunity to work with someone closely related to Seth Godin, one of the biggest names in marketing, today.
In summary, if you are passionate about technology, come fall break/winter break, your mantra should be “Westward ho”. Connect with the Ross Bay area alums, if you are sure about interning in the bay area, think about joining SVPMA. That’s a great way to network with professionals in the technology industry. When I started the process, I had a very materialistic view of networking – Will my connections help me get a job, come April? I don’t know (In a better economy, I am pretty sure they would have). At times like these, (their hands are tied) and it is more important to forge long lasting relationships, without worrying about short term benefits. Also think about what you can contribute to such forums/communities. During the SVPMA networking events, I offered to review resumes, and provide contacts at certain companies to people who were exploring opportunities with those firms.
One last word of advice – Make sure that you not only keep your linked-in profiles up-to date and clean, but also get as many recommendations and endorsements as you can, well in advance. Some companies post jobs on linked-in; they usually shortlist only those applicants who have at least a few recommendations on linked-in.

A Social Summer

•August 26, 2009 • Leave a Comment

Prof. Gautam Ahuja, in his introductory lecture (that was part of the Ross international student orientation) emphasized the importance of learning to ‘ignore the hype’. He went on to give an excellent example to corroborate his views – how Walmart reacted to the internet/E-Commerce revolution: When most other retailers panicked and acted as if brick and mortar retailing was about to die overnight, WalMart did their bit by creating walmart.com, but nothing beyond that. Here they are, a decade later, going strong at $400+ B a year (Year 2009, fortune 2 company). Prof. Ahuja’s lecture had a profound impact on me, because those were my views too (but I never dared voice them, out of fear of being ridiculed). Subsequent to this, I started passing every piece of news/development from the world of business through an internal ‘Hype’ filter (before deciding whether it deserved any attention)
So, imagine my response to the overnight celebrity status and adulation that ‘Social Media’ started receiving, one fine day. For my part, I had dabbled in social media – An orkut account here, a yahoo group there, but I was not crazy about them (But with Facebook, it was different a different story. It was a case of love at first sight – I cannot explain what it is/was about facebook that attracted me to it, but there it was). So facebook is great, agreed; but were facebook and twitter the real new game changers, as was coming to be widely accepted? And was facebook the new google (and what of their plans for world domination?). “No way”, I said to myself, “Too much is being made of what is at best a passing fad – Something that people will enjoy for a while before moving on to something else”. With these thoughts in mind, I headed out to the big bad world of technology (San Francisco Bay Area/Silicon Valley), in search of the ever elusive summer internship.
Thanks to Doostang.com, I became aware of a few of the gazillion high tech start-ups that hoped to cash in on the storm brewed up by Social Media. “Involver” was one such company. One visit to the Involver web page convinced me that this was one of the few high-tech start-ups that had a compelling business model and excellent early monetization prospects that set them apart from the rest. Involver is the first (And at present, only) complete brand marketing platform for facebook. Like all things web 2.0, the mantra for success (At least initially) had to be “Freemium”. So, while the Involver platform was being developed and enhanced, they let facebook fan page owners install the Involver fan page application suite for free! Over the course of a year, thousands of fan pages started using Involver – These included both popular brands such as Reader’s Digest, US Weekly etc. and smaller establishments such as independent restaurants and Indie artists that formed the long tail of their respective businesses. Like all good things, the free Involver subscription had to come to an end, and back in June’09, they decided to start charging for their premium applications/services (But they still did offer two fan page tabs for free – Remember, one of the commandments of the ‘freemium’ model is – “Thou shalt continue to offer some of thine products for free”). The challenge was to determine ways to convert their free subscribers into paid customers. Among other things, they decided to augment their business workforce with a business/marketing intern, and advertized on Doostang.
A cover letter and a couple of interviews later, the folks at Involver invited me to work with them as a summer intern. At Involver, learning for me, began before day one – starting with the interviews conducted by the marketing director and CEO – Both of which involved insightful discussions around pricing strategies, marketing to companies that constituted the tail and my honest opinion about social media and its potential as a marketing platform. By this time, I had realized that social media was not all hype – When people no longer read news papers and magazines, and no longer watched TV, where did they spend their free time? Stats from Comscore screamed : “Social Media”. In this case, “social media” had come unscathed through my “Hype filter”.
At Involver I was fortunate to work on a variety of projects – To start with, I started identifying potential new fan page tabs/applications that could be added to the Involver suite in order to enhance its appeal to marketers (Fan page owners). This involved a bit of brainstorming (With self, and then with the marketing director/CEO), a detailed analysis of the industry verticals that constituted the Involver clientele (Here I made an assumption that the existing client base was representative of their future customers – in terms of industry mix), an in-depth study of some of the most popular brand fan pages (Such as Pringles, Adidas, Coca Cola etc.) and some smart search! Eventually I ended up identifying a handful of applications with open API (Fully developed by third party developers, with interfaces that supported embedding those applications in other web pages) – This list included some of the usual suspects such as Slideshare, Tripit, flickr etc.
My next task was to identify means of tracking web page visits and conversions (Purchase), and ways in which to enhance conversion rates. The answer to this problem (as is the case with a number of other problems in life), lie with Google – Google analytics to be precise. What aided me immensely in this task was the detailed documentation from Google, together with awesome blog posts by Avinash Kaushik (Widely acknowledged Web analytics guru and the author of “Web Analytics: An Hour a Day”) – http://www.kaushik.net/avinash/.
And now for something fun! The Involver internship gave me an opportunity to work on something related to Woodstock’69! The Woodstock’69 40th anniversary facebook fan page management had been outsourced to Involver by one of their premium customers. I was assigned the task of managing the facebook campaign for this client. As part of this exercise, I designed facebook ads (Messaging and imagery) that helped attract users to the Woodstock fan page and participate in a viral campaign that afforded fans a chance to win Woodstock branded electric guitars for spreading word about the fan page, dabbled in the CPC/CPM esoteric and was responsible for measuring/tracking advertising ROI, and identifying ways of improving the same.
Over the next few weeks, I worked on a number of other marketing and business development projects. Among other things, I developed compelling responses to RFPs, conducted research on facebook tools (Such as the facebook lexicon and how marketers can benefit from such tools), identified reasons for slow adoption of Involver premium by certain categories of businesses (Via market research/surveys that I sent out to representative free subscribers). All in all, the wide variety of projects at Involver, made my west coast sojourn a memorable one. The icing on the cake, however, was the experience of working at a start-up, in a super-fast paced environment, where almost everyone wore multiple hats!

R.I.P. tr.im

•August 10, 2009 • 9 Comments

Tr.im, a popular URL shortening service announced via a message on their website (http://tr.im) and blog, that they are in the process of discontinuing service (with immediate effect). And the reason? Inability to monetize (With particular emphasis on the fact that, with twitter’s patronage of bit.ly, the battle is all but lost).

I just began reading ‘Crossing the chasm’ by Jeffery Moore, and in the introduction to this book, the author quotes this from the Bible, in an attempt to draw parallels with what is going on in the world of entrepreneurship/VC today – “While many are called, few are chosen”. i.e. how millions of dollars are lost every year, in failed attempts at entrepreneurial (venture) success. I had heard stories of failed ventures in the past, and had reacted philosophically; and what I had been reading should have prepared me for something like this and worse (Especially, given how the Social Media revolution has given rise to a whole new set of startups, most of which have not had their revenue models figured out). Despite all this, I could not help but feel sorry for tr.im, considering how they had impacted the lives of millions of internet users (tweeps in particular). Although I use bit.ly for most of my shortening needs (Primarily because of the stats – which act as periodic ego boosters, the bookmarklet and the firefox extension!), I definitely have visited my fair share of URLS redirected by tr.im (And posted by some of the best in the business too!)
After the initial mourning, I began to think about what this meant for me, and the online world (Social media in particular). This development raises a number of questions. What happens to the millions of tr.im links out there on twitter, linked-in, etc.? What about other companies which provide this service today – Would they be discouraged, or would they continue with the freemium offering for a while longer (And use the extra time to figure out how best to monetize)? Has any company in this space hit upon a winning plan that would allow them to operate sustainably (And make profits)? Would other shorteners start charging for their services?

I had my doubts about the monetization potential of URL shorteners from the very beginning. When I first came across these on the linked-in statuses of some of my contacts (Before my foray into twitterverse), I wondered who would provide such a service, and what would they get out of it. My first guess was that the website (linked-in) enabled users to shorten verifiable/known external links or that this was a subscription service of some sort, where users paid a small monthly/annual fee, in return for an unlimited number of short links. As it turned out, it was neither. This was another of those ideas that the initiators hoped they’d be able to cash in on, once they had a sizeable base of regular (loyal) users. But what premium services could URL shorteners hope to sell to internet users? Would users be willing, at any point, to pay for such a service? Many, if not most of them would probably stop using shorteners, if they were asked to pay. One major fall out of such an occurrence would be deterioration in the quality of tweets, fewer links posted on twitter, and eventually a drastic reduction in the twitter user base. Twitter would need to step in very soon and do one of two things – a. consider the possibility of reducing the 140 character tweet limit (But then of course, tweeps would then get used to typing longer messages, leaving just as much space as before, for the poor URL).
b. provide the shortening service themselves?? (Acquire bit.ly?).

I am curious to see how twitter would react. Twitter already has enough on its plate – What with the recent DDoS attacks, and the questions being raised about twitter’s robustness and ability (or lack of it) to cope with such attacks – and the last thing that it would want is for users’ faith in URL shorteners to be shaken.

And now for something completely different – What’s the deal with Outlook add-ins? (I know, this is totally unrelated to the message, and tone of this post, but could not help rant about it here. I am borrowing this idea from my friend and ex-colleague, Salman Ansari, who rants via his blog http://daretorant.com). My Outlook started consuming ~50% of CPU, all of a sudden. And a google/bing (I am trying to get used to the idea of bing as a verb, or even popularizing said usage, by conscious repeated usage) for solutions resulted in a bunch of links (Couldn’t think of a better collective noun for internet links; there should be one by now, I am sure) all of which said, disable add-ins. I mean, what’s the bleeding point (One might very well say “Is this what we fought for, Mr. Rumbold”) ?!? Why develop add-ins, and make provisions for installing them in the first place, if your support engineers recommend that users disable add-ins. A few MB’s of extra memory, a percentage point or two of CPU is understandable, but 50%? Are we supposed to run an OS or what? And is it easy to disable add-ins? When I tried doing that from within outlook, I received a hideous message box that said “The connected state of Official Add-ins registered in HKEY_LOCAL_MACHINE cannot be changed”, which meant that I had to knock the doors of a higher power, the registry (And ruthlessly delete all entries under the outlook add-ins key-After backing them up, of course).

Promising new business models

•July 30, 2009 • Leave a Comment

The world of business (online business, in particular) has been (And continues to be) revolutionized by a plethora of new business models that have evolved in the recent past. Quite a few have shown tremendous promise in their short life span. I was particularly intrigued by two such models (Which are by no means new – Just that I came across these only recently): ‘Trial Pay’ and ‘Groupon’. While Trial Pay is a well-established name, with a client list that includes a number of blue-chip advertisers such as Sony, Starbucks and Apple, ‘Groupon’ is an idea with immense potential, but has had limited exposure, so far.

Three websites that I happened to visit in the last two days – Webroot, Lavasoft and one other “EndPoint Protection Program” as Gartner prefers to call them – offered products for free using the trial pay model. Traditional businesses (Non-online) have, since time immemorial enticed customers through “Free” offerings (Using “free” both for acquisition and retention). Before the emergence of the “Freemium” model on the web, mostly brick and mortar retailers (And other businesses in the B2C space), promoted products through BOGO offers, free samples of newly launched products and in some cases even free samples with no strings attached (to get word of mouth publicity), like the recent ‘Starbucks free ice cream’ facebook campaign (I m hoping to pen my thoughts about this campaign, contrasting it with the “free pastry with beverage” campaign, in a subsequent blog post in the near future – As to why the former was a good idea, and  the latter, not). ‘Trial Pay’ while not fundamentally different from the traditional “Free” offers, is unique in a few ways:

  1. First, the roles of paid-for product and freebie are reversed. i.e. in traditional offers of this kind, a customer decides to purchase something out of necessity and is offered a freebie with the purchase. Whereas with trial pay, what the customer wants is offered for free, and he/she has to pay for the bundled product (For eg. An ad from webroot says “Download and install webroot spysweeper for free, if you complete an offer from one of our trial partners – Netflix, Sony, Apple, etc).
  2. Unlike most traditional offers where the paid for product and freebie are from the same company, trial pay bundles a variety of unrelated products & services from different companies, together.
  3. While most traditional promotions offer limited flexibility in terms of what is given away, Trial Pay lets you choose among a number of products and services that you can choose to pay for.

Let us take a look at the economics of this model. As long as customers can find trial partner products that they have a genuine need/use for, this model can benefit most if not all parties in this N-sided market. Consider the Webroot Spysweeper example. An Anti-spyware is indispensable in today’s high risk web environment, where new threats emerge at an alarming frequency. According to the “State of the Net” report (consumerreports.org), expected total loss from virus and spyware this year is likely to $7.5Bn (Split between $5.8 Bn from virus attacks and $1.7 Bn from spyware attacks). Among those surveyed, 1 out of 7 had experienced serious virus problems and the incidence of spyware problems was 1 in 12. Assuming the average internet penetration in the US over the last year at 200 million users, and assuming the above incidence rates, approximately 28 million users would lose $207 on average due to virus attacks and 17 million spyware attack victims would be poorer by $100 each. So the expected value of loss from attacks is $207*(1/7) + $100*(1/12) = $38 (Expected loss, or the willingness to pay). Some users (If not all) would be willing to pay this amount for a decent anti-spyware product. But then for every user who is willing to pay for software, there are many who wouldn’t pay for software to please a dying grand m (Especially in countries where anti-piracy laws are lax – India for e.g. where you can get every piece of software worth installing  ever written, in the grey market for between $5 and $10). Trial Pay is a great way to coax at least some users of pirated/cracked software into helping the authors of the software in some way (In most cases – by signing up for a partner offer). While most partner offers require payment of some kind, there are some that require only a trial signup –

  1. Businesses that are not well established enough (or those that are in such dire need of publicity) that they feel that it is worth paying webroot for any free signups that can be thrown their way. With freemium success stories such as facebook, businesses have realized the importance of building a solid user base (And are willing to pay to do so).
  2. Companies that are confident in their products’/services’ ability to make trial users lives difficult without their product/service (subsequently resulting in a paid subscription). Eg. Netflix. I cannot recount from my experience how difficult it was to stop subscribing after the the trial period expired – because I did not try to!  But I am sure lots of trial subscribers would have been faced with this dilemma and would have made the right choice – to continue the subscription.

In essence, a small portion of the marketing budget of the big brands like Apple, Sony and Netflix ends up subsidizing buyers of legal software (Consider it a reward for, at least thinking about paying for software).

As for the software vendor, they stand to gain on two counts:

  1. With most costs (R&D, development & testing) sunk, what do they have to lose? Even if the partner company pays them a fraction of the standalone price of the software for every completed offer, it would only add to their bottom line (With near zero marginal cost of software deployment on the web).
  2. At least some users, who would otherwise have used cracked/pirated version of the software, end up contributing in some way to the company’s profits. I don’t expect piracy to reduce drastically because of this (The inherent unwillingness to pay for software is an innate tendency that cannot be expected to disappear overnight!), but, this is definitely a step in the right direction.

We need more such models, especially in times such as these, when software has to compete with other more basic needs, for the share of consumers’ wallet – In my case (As in the case of most students – international, in particular) , the annual subscription fee for a decent anti-spyware software can buy 2 weeks or more of groceries!

 
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