Monthly Archive for February, 2010

A billion dollar opportunity with video

When Google made an offer for On2, I was dumbfounded. I wrote to a friend working at Google the following:

Phat. But I’m confused. How does Google benefit by making the codec free? I understand Google’s open culture, but for 100million, really? They help the world, but what’s the incentive for Google? (Other than of course, controlling it).

The reply: “incentive = greater adoption of HTML 5 = apps are written for HTML 5 = apps can be monetized using Adsense”.

Interesting perspective from a smart Googler who had no real insider information. But no cigar.

Newsteevee posted a follow up article today on what Google is going to do with this technology, quoting the Free Software Foundation. What really made me get thinking was this (emphasis mine:

Google’s Open Source Programs Manager Chris DiBona had previously argued that Ogg Theora would need codec quality and encoding efficiency improvements before a site as big as YouTube could use it as its default video codec. The FSF now writes in its letter that it never agreed with these positions, but that Google must have faith in VP8 being a better codec if it invested its money in it (Google spent a total of about $133 million on ON2).

The open source advocacy group apparently realized that Google wouldn’t switch codecs from one day to another, which is why it suggests a number of smaller steps to make VP8 mainstream. “You could interest users with HD videos in free formats, for example, or aggressively invite users to upgrade their browsers (instead of upgrading Flash),” the letter reads, adding that this would eventually lead to users not bothering to install Flash on their computers.

Think about that for a second: video on the web finally becomes free for real and open, becoming a core infrastructure to the online world – but the default is crappy. Don’t like crappy? Well Mr and Ms consumer, if you want High Definition, you need to pay for a subscription to a premium codec by the already dominate Adobe or another rising star. Assuming you get the whole word watching video and only 1% convert – holy crap, isn’t that a brilliant business model?

Bono, the lead singer of the band U2 wrote in an op-ed piece in the New York Times the following recently:

The only thing protecting the movie and TV industries from the fate that has befallen music and indeed the newspaper business is the size of the files”

Simple but profound insight from the famed entertainer. So with this fairly obvious logic, why isn’t the movie industry (backed by Google and Apple) innovating business models in this area? Value comes from scarcity – and quality is the best way of doing it. The reason why box office sales and Blu-ray broke a record in 2009, is because the quality is worth the premium for consumers.

What’s the incentive for Google, to answer my own question? The return on investment to be associated with a default open technology that you give the option to upgrade to users, is a billion dollar business waiting to happen. Doing no evil to the world and securing future growth at the same time sounds like a Google business in the making,

Ubiquity – it’s coming

I applied to do a panel to SXSW on a topic I deeply believe in and want the world to get excited about: I call it ubiquity. My topic was rejected because it’s too broad a topic (fair point), but with The Startup Bus (that thing llaunched last week), I’m going to make it a live example testing the limits of ubiquity and a barometer of that progress.

Ubiquity relates to some long term trends in our society that are now converging: the fact we can access information and computing resources wherever and whenever we are. We can see it now with the changes to how we get the news. But here is a more dramatic example, as it’s the examples – not the rhetoric explaining it – that get me excited.

a) Contact lenses that contain a computer chip in them

b) Wireless electricity: it’s happening.

c) Google translate integrated into Google googles

a +b + c = awesome. We’re not there yet, but the future of our world is damn exciting.

The Startup Bus

Well, I guess it’s happening now! TechCrunch just wrote about my latest crazy idea which is still only days old in my organisation. It’s a bus from San Francisco that travels to Austin with 12 strangers. The catch? Those 12 people need to conceive, build and launch three startups by the time they arrive, to a packed audience of real tech entrepreneurs.

The concept is to put a remarkable amount of constraints (moving bus, strangers, 48 hours, crappy connectivity, sleep deprivation) among a group of smart people (and the people so far asking to join, include people who have built million dollar businesses). In my experience with these things, real startups can emerge from these efforts (like OpenOnDemand.com/ or BinaryPlex.com, which is where the founders met), but the real motivation is to give a learning experience – and so I am structuring the program so that it maximises that as the experience. I guess you could say it’s like training, or as my friends Bart Jellema and Kim Chen coined for the Australian startup camps, “excercise for entrepreneurs”.

Leena Rao from TechCrunch makes an argument that these efforts can stir up emotions and controversy. But that’s exactly the point – in building a startup, you face obstacles. And if don’t deal with them – which include infighting, things breaking, and crazy pressure – then chances are, you’re not made for the startup world. Which is why these experiences are so valuable – you give people practice and exposure to these issues, and you end up developing better entrepreneurs.

As they say: good judgment comes from experience, but to get experience, you need to have made bad judgment. Here’s to developing entrepreneurs, so that they have better judgment with their real startups one day.

Huge opportunities for exposure for sponsors, which will fund this experience. Contact me for more.

One word explains the Google superbowl ad: Bing

Google, a company that used to pride itself on the fact it never had to advertise, put an ad in the mother-of-all advertising slots: during the Superbowl, the most expensive time you can advertise in television. And this was posted on the official Google blog by the CEO Eric Schmidt, a man that doesn’t all that often post to the company blog.

Why did it break tradition, with this cute emotional-brand-building ad? Because Google now has for the first time a real competitor, in the rising Bing – Microsoft’s rebranded search engine boosted by the $100 million Powerset acquisition. Bing’s search technology may still lag far behind, but it’s certainly ringing a bell on the marketing side and growing quite healthily as a result. And as well all know, the reason we search is less because we think it’s better technology, but more so because of the importance we place on the brand that we feel comfort in.

Google’s ad was cute. But capitalism is all about self-interest, and for the few million Google had to spend on this seemingly non-informative ad, what management are thinking is quite clear to me. That being, Google’s trying to revamp the emotional attachment we have with the world’s most loved brand. But more tellingly, from the very top, Google’s scared as hell and is now protecting what they know matters the most in the search engine wars: the emotional connection to a brand.

The best feature Facebook didn’t invent that it should invent now

Around 9.15pm last night after my first rugby training for the year (and in America), I sat down at the bus stop right by the football field, to catch a bus home. Playing on my iPhone, I noticed a woman walk past me and then run back. That’s weird I thought and it raised my awareness levels. Then, I noticed a hooded black kid approach the bus shelter from the back and entering from the left. I watched him turn and saw his arm raise with his jacket covering his hand. A second later, he pointed a gun right into the left temple of my head and mumbled: “ok man, hand it over”.

Luckily, I got away with my wallet, phone – and life – in tact. (I stood up, roared abuse at him, and he ran away – don’t ask why I did what I did, but it worked!) Minutes later, I shared the news on my Facebook account:

Gun pulled to my head - status.

And I received a flood of comments, phone-calls and text messages over the next 24 hours. No ‘likes’ however.

The like feature
Friendfeed, a startup Facebook acquired last year, pioneered social media in the way people could collaborate and share information. One of its most brilliant innovations was the ‘like’ feature – the ability for a user reading something, to acknowledge the content being shared by another user. Rating systems are a hard thing to get right, and its been said by YouTube that the standard five-star rating systems are actually not quite five stars. Friendfeed’s simple but elegant approach took a life of its own as a rating mechanism and more. Facebook implemented the feature, and I’ve been observing how my social circle have reacted to it – and I’ve been startled at the way its been used. Just like the unique culture Friendfeed built, encouraged by this simple ‘liking’ activity, so to has Facebook’s users developed a unique kinds of behaviour. I’d argue its become one of the key forms of activity on the site.

Australia trip like

So congrats Facebook – you copied a feature and your users love it. Now how about you evolve this remarkably simple form of communication, which has become a powerful way to have people share information (as it flags value, quantifies a kind of engagement and adds an additional level of communication to the originating message). How about a dislike feature? Do you think people would use that?

My friend Marty responded to my gun incident with the following:

Facebook | dislike button

And he wasn’t the only one. My Friend Kyle, who responded first, said:

Facebook | dislike by kyle

Despite being an engaging piece of content and popping up on my friend’s homescreens, there were no ‘likes’. It just didn’t seem appropriate. But just like when you can’t speak a foreign language fluently but want to communicate a message, the lack of this feature prevented additional communication.

Facebook | dislike button placed here

Social media is here to stay and is having a remarkable impact on our word. If by definition its about connecting people and communicating with each other, let’s evolve the way they can express their thoughts beyond simply text. It’s going to lead to a more interactive, engaging, and a far richer experience. This post may seem trivial because it’s like advocating we create a new word to communicate a frivolous concept, but like language, we gain a type of richness in the diversity we have to express ourselves.