Tag Archive for 'Australia'

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Service Seeking – new aussie eBay for services

I came across news that a new Aussie start-up, called Service Seeking, are launching today. Below is a summary:

The business is called Service Seeking (www.serviceseeking.com.au ). It’s an online market where people bid to do work for other people.

If you’ve got anything that needs to be done at home or around the office (eg a new website, some brochures or hire your next contractor), don’t waste time with the Yellow Pages. Post your project with Service Seeking.

It’ll cost you nothing, there’s no obligation to hire, providers chase you and bid against each other. Could be worth a try?

If you provide a service, then register. It will give you free access to new job leads. You only pay 5% for work which you win!

I’ve had a quick look of their site, and the interface seems pretty intuitive. They obviously haven’t got any activity yet, but their sample listings give an indication of the type of people they expect to use it: “I?¢‚Ǩ‚Ñ¢m moving: I need a cleaner“, “Business Cards & Stationary Print” (sic), “Furniture Removal“, “I want to get fit for Summer“, and “Legals for Property Sale“. The fact they are advertising on the domain.com.au network is a good indication that?Ç? they are targeting the housing market.
Similar to eBay’s reputation system there is also a mechanism to rate providors of services. Uniquely, it’s a score out of 100 and it is derived by people assessing them on quality of work, ability to keep to budget, ability to keep to schedule, communication style, and overall professionalism. This scoring system seems to be an important part of their business model, as they repeatedly make the case that its a way of getting business “without wasting time & money on marketing”.

The revenue model appears to be commission: service providers pay a 5% success fee on payments made.

It seems like a good idea. The Australian economy is 80% services, and the marketplace concept seemed to work for thousands of years as a way of commerce – I could certainly see myself using this service. However as a business model based on the network effect, they will thrive or flop depending on how they engage with the masses.

Making it free for the ‘demand side’ (the buyers) – you just place a request and someone approaches you for work – could be extended in a variety of ways and will be a key thing for it to take off. For example, partnership deals with major websites where people can post a request easily. Like any market, the demand side is is crucial – not enough people using it will make this a ghost town.

On the supply side, only charging when a payment is made means this is an outlet for free advertising, and should alone be a good incentive. However as I mention above, the key is engaging with the demand side – which they obvioualy are trying to do with their advertising campaign launching today.

The fact they are targetting the Australian market with a .au domain is both smart and stupid: smart because it plays on a competitive advantage that nationals of a country will use a business that is homegrown; stupid because it limits their business to the small Australian market. Nevertheless, for a small startup struggling for success, focusing on a niche market first is more important than playing for world domination. (And its not like service marketplaces is a totally new thing). But hey, with an Aussie economy worth?Ç? in exceed of?Ç? US$700 billion – if they can capture even only one percent of that, then that’s going to be happy days for them.

Climate change: forget the science, it’s real for the market

I recently sat through a two hour presentation on climate change at work. My employer this year (a big four firm) has been mobilising to respond to the market with a climate change solution for our clients – and the things happening are amazing. They want to be first-movers in what is a huge business opportunity. Even through I have had dealings with people on the climate change team, it wasn’t until I sat through this presentation that a few things clicked for me: climate change is real. And I am not talking about the science – it’s real for the market economy.

I wouldn’t be doing any justice if I attempted to explain what I learned, however I will explain something that was a big realisation for me. This guy that spoke is a world expert, and he reckons more has happened in the last eight months of his career regarding climate change than it has in 25 years of his career. To understand why, is to understand the realisation of the markets.

Increasing shareholder value

If it’s one phrase that sums up corporations working within the framework of capitalism, it’s about “increasing shareholder value”. It’s a term that is mocked because we are sick of hearing it, but it essentially explains the market: investors make money by putting their money where they can generate more value for their buck. Value creation is the centre of everything – a start-up company generates value through innovative new products that people buy; a tax agent generates value by reducing your tax expense; a real estate agent generates value because they can sell your property at a higher valuation. In the context of corporations, people make money in companies through returns: a higher share price means a higher value of that share or piece of property. Companies are judged on their profits because more profits reflect a higher return an investor gets from that entity; just like a home being sold, it reflects the additional value they can generate from that piece of property they own.

Profits reflect shareholder returns, which come in two forms.

1) dividends, which are cash payouts from profit distributions to shareholders. An investor wants higher profits, because it means more cash for them on their existing shareholding – it reflects a better return on their investment.

2) retained earnings, which is when a company doesn’t pay the dividend but holds it so they can fund future growth. More profits, means extra cash to invest to generate more growth in the entity, which ultimately means more value. If you buy a share for $1, and the company grows and your share is now $2 – you are a happy chappy because you’ve effectively doubled your money.

How climate change now has a price

Lets say we generate x amount of carbon tons a year. The objective of climate change, is that we can reduce the amount of x with time, and then get to the stage where we can grow sustainably, which means for every x we generate, we can offset that bit of carbon so as to to generate a net of zero on the environment. That’s called sustainable economic growth.

Lets say y is the amount it costs to remove a ton of carbon dioxide. Meaning y represents the expense of generating carbon. So if you times x with y – that equals the amount it will costs to remove the carbon dioxide we generate so that we have a net impact of zero on the environment (or at least, the cost to reduce emissions). If the government forces you to reduce your emissions, like they force you to pay taxes, that expense has now become very real.

How much a ton of Carbon Dioxide will cost is a big issue yet to be settled, but as you can tell y is an important number because it determines how much it costs for you to reduce your carbon footprint. A very conservative estimate is that it costs 25 US dollars to remove 1,000 tonnes of carbon. The reason I say conservative is because more recent evidence suggests it is actually a lot more than that (I think he quoted 40 euros). Using the $25 figure, he said that it will cost us $15 trillion to remove carbon dioxide. There is so much pressure on governments from voters, lobby groups and the like, that governments (like here in Australia) are going to mandate that you offset your carbon emissions each year. The Kyoto agreement is saying a 60% reduction from 1990 levels by 2050 for example.

Now as an investor, I am thinking my investments have a share of the pie of a $15 trillion expense that they have to pay each year. That’s expensive. Expensive stuff reduces my profit. Reducing my profit means lower returns for my investments (ie, lower dividends, lower retained earnings to fund growth). Holy crap – this climate change thing is eroding shareholder value. Crap crap crap – I want to start knowing what my investments are doing to tackle this future expense. I want more accountability, alongside the financial reports that companies are mandated to provide (and which tells us about profit).

And that is exactly what the investors that control $41 trillion dollars – one third of the worlds money -are currently saying.

So much more to say, but I just want to share that point: climate is real economically and the environmental cost is being built into the market mechanism. There are a lot of issues that are yet to be resolved, but you’d be stupid to start ignoring the massive developments occuring, because its getting nearer to an agreement where it will affect every transaction we make in our economies.

Understanding the Facebook poll feature

A little while ago, I was lucky to catch a Facebook poll, as a way of advertising its new poll feature. As a follow up from that experience, I thought I might purchase my own poll to validate its effectiveness. Here are a few of my observations:

1) Answers appear to be clustered

One of the interesting things about the poll feature, is that it is real time. You are getting answers as people vote. You select what type of people you want to target, and Facebook will then quiz users of that criteria by putting the poll on their homescreen. Something I noticed however, was that answers seemed to come in together followed by a gap. I also noticed that these answers that come in groups, usually have similar responses.
clustered yes

I appears that users are highly responsive to a poll. If it appears on their survey, a lot of people appear to answer it. I know this because I specifically targeted my poll to Australians, in the middle of the day when I wouldn’t expect people to be using facebook.
The placing of the options seems to affect the results. I suppose anyone that has studied polling before, would probably know the order of a ballot heavily influences the poll. This appears evident here. Usefully however, Facebook allows you to randomise the poll so that different users see a different order. However as is demonstrated above, with this clustering, its groups of users that see a different order, not individuals

2) Facebook users appear to be more male, and younger
Something I noticed in my previous blog posting on the poll feature, was that there appeared to be more males answering. This seems to have happened occur with this poll as well, and indicates to me that Facebook’s population of users have a higher male base – which is unusual given that women generally outnumber men in society.

fcfb2

It should also be noted that there is no age groups option for people above 50 years old.

3) Takers of the poll appear to be a genuinely random population
The reason I picked 200 people, was that that is the minimum amount a poll needs to be before it can statistically be considered accurate to represent a population. However as I was able to obtain data as the poll was running, it gave me insight into how random (and representative) the population that took the test was.

Below is a screenshot half way through, as well as the final result

results half wayb

fcfb1b

The results for the poll are almost identical. Without reading too much into it, that tells me the conditions of the test were genuinely random.

There are a few other things I noticed, but this isn’t me trying to promote a Facebook service, and will leave to make your own analysis in combination with the other Facebook poll I blogged about. I just want to highlight that for absolutely nothing, you can get an insight into a market in literally hours.

IBM recently released a report saying that the Internet has overtaken TV, changing the dynamics of the advertising industry, and that they see the role of advertising agencies in the future to go “beyond traditional creative roles to become brokers of consumer insight

Facebook is an amazing company because of the amount of data it holds about the population in various societies. And for a fee – the rest of the world can take advantage of this as well. Welcome Facebook – the world’s most competitive agency for consumer insight.

BarCampSydney2

Things I learned at this BarCamp

  • It was a very different crowd from the first one.
  • It’s so easy to network – it was as difficult as breathing in, breathing out! I gave a presentation, and as a consequence, I had people throughout the day approach me and introduce themselves.
  • In the morning, collaboration was a bit of a hot theme. John Rotenstein from Atlassian asked the question of how do people define collaboration: “when two or more people work together on a business purpose”, was my answer. We agreed. Everyone else, kind of didn’t.
  • How to raise money – was the afternoon’s theme. Great points were brought up by Marty Wells, Mike Canon-Brookes and Dean McEvoy who led the discussion.
  • Some things mentioned:
  1. Aussie VC’s lead you on. “Nice idea- let’s keep in touch” is their way of not burning bridges
  2. VC’s work in a cycle that are in five or so year cycles – raise money at the beginning of the cycle
  3. Rule of thumb: give 30% away on the first round, 30% on the second round
  4. Advisor’s that give out Comet grants work on a 2% commission of future venture capital that you raise.
  5. No one understands the advertising market – everyone in the room wanted something they could read to learn more (check back here soon – I promise!). For example, Google’s adwords programme is largely supported by the property market – the mortgage lending market that is affected by the current credit crisis, is going to affect start-ups relying on adsense as the money drops out of these ads.
  • I met Jan Devos, who randomly approached me and blew me away with what he has done in his life. Basically (and from the age of 17), he created an implementation of the MPEG4 compression technology (for non-tech readers – MP4 as opposed to the older MP3) and he licenses out the technology to major consumer appliance companies like Samsung, who incorporate the technology into their products.
  • I met Dave O’Flynn – self-described as a “tall Irish red-head” developer; Matt June – a former Major in the Australian military, and now pursuing a project based around social innovation; I discovered Rai of Tangler is a commitmentphobe; Mick thinks he can skip most of BarCamp because he thinks organising a wedding is so hard; Mike Canon-Brookes over beer revealed he is a Mark Zuckerberg wannabe; and Christy Dena one of the lead (un)organisers of the conference looks completely different from the person I thought she was!

I got a positive reaction to my half hour session on five lessons I have learned on successful intrapreneurship due to a large internal project I started at my employer, with people throughout the day getting into a chat with me about it. Richard Pendergast, who is starting a online parenting site, said he was going to write a blog on one the points with his own personal battle of creating credibility. Glad I helped! I said to him I was going to blog what I talked about it so we could turn it into a discussion, but I have decided, this exam I have to sit in 12 8 days might need to start getting my attention. Anyway, here were the five points I made, however given the discussion during the session by everyone, is a very rough framework as people brought up some great points when talking:

1) It is a lot easier to seek forgiveness, than permission when doing something in an organisation. Or in other words, just do it.

2) Be proactive, never reactive. By pushing the agenda, you are framing the agenda for something that works for your project. Once you start reacting to others, your idea will die.

3) The more you let go – the bigger your idea will get. Use other people to achieve your vision. Give other people a sense of ownership in it. Let them take credit.

4) It’s all about perception. It’s amazing how much credibility you can build by simply associating your idea to other things – and which in the process, builds your own personal brand to push through with more later on.

5) Hype build hype. Get people excited, and they will carry your idea forward. People get excited when you communicate the potential, and have them realise it.

Thank you to all those involved – both the organisers and the contributors – and I look forward to the next one.

You need to be persistently adaptable

Tim Bull has recently written an interesting discussion point on when is the right time to innovate. In a post titled “Steam engine time“, he asks:

If innovation is a process of the right idea, in the right place and at the right time, how do we judge what the right time is and measure what is going on around us to hit the right spot?

Some would say luck has something to do with it, although I believe that is the perception from an outsiders point of view. In my eyes, a core set of attributes are required for innovation.

Consider this quote from Calvin Coolidge, 30th president of USA:

Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On’ has solved and always will solve the problems of the human race.

I think Tim is wrong to ask when is the right time, because innovators understand their environment, adapt to it – and then push until they get there. Persistence and adaptability, in my eyes, are two crucial aspects needed in a person or even a country or company, for it to successfully move forward. However whilst persistence is key – you need determination to push forward despite the barriers you are going to encounter – adaptability is the real secret to successfully innovating.

A case-study: multiculturalism in a flat world
Although I was born and bred in Australia, I have been brought up under a very strong Greek influence. With an Australian-born father, and a fresh-off-the-boat Greek mother – I have lived a life straddled in two cultures. Going to an Anglo-Saxon school, yet at the same time doing Greek classes at 9am Saturday (but leaving early for my schools footy games) – I grew to resent Australia’s multiculturalism policy. Without going into too much detail because this will turn it into a political discussion and detract from the point I wish to make – I disliked the fact that Greeks in Australia refused to integrate into the local culture. The Australian government’s stance of officially supporting Multiculturalism, which does things like pay for that Saturday morning tuition, was to me a stupid policy.

Fast forward to 2005, when I visited the Balkans as part of my nine months traveling around Europe. Serbia’s story is one of the saddest stories in Europe. Walking around the city of Belgrade, interacting with its inhabitants, and just generally experiencing Serbia – you realise you have come across a hidden gem in Europe. Yet once you look at the statistics and talk to some of the educated, you understand otherwise: a basket case situation that has little hope.

Serbia, like a lot of other countries I discovered in my travels, have a cultural problem: they can’t let go of the past. Millions of people have died over differing interpretations of history. The Republic of Macedonia’s identity is entirely staked on the fact they are situated on the lands of Alexander the Great. Identity to the nation states of Europe, is in history. And challenges to that history, and their identity, has led to some stupid wars affecting millions of innocent lives.

So guess what? I now think multiculturalism is the best thing my country could ever do, for the simple fact we can never have a fixed identity – what it meant to be Australian 50 years ago looks very different from what it looks like now. In Europe, identity is based on ethnicity with a fixed identity tied to history, language and a religion. In Australia, our identity isn’t allowed to be based on a certain ethnicity, and forces us to find common ground on what really matters like our way of life. If it wasn’t for the policy of Multiculturalism, we would be turning into one of these static nation states within Europe who become fixed as a certain point of time. The Greeks are still mourning over the Turks capturing the Great City of Constantinople from them in 1453 (which is why Tuesday is the unlucky day of the week for them). Yet for the countries like Australia, who don’t have much of a history – they are not locked – and consequently look forward, rather than back. Multiculturalism is a crucial ingredient to our success, because with all that diversity, it means we are constantly evolving our culture to the times without any one group fixing it. And with a globalised word, Australia’s ability to adapt to circumstances will be a key competitive advantage we have over countries.

If you don’t agree with me, have a read of Thomas Friedman’s The World is Flat – a book a entrepreneur/intrapreneur suggested I read. This guy who told me about the book was a German from Argentina, working for an Indian company to set up the company’s presence in Turkey! He told me that after he read that book, he quit his job and got himself into his current role. He faced the facts, and adapted his career.

Adaptability as success
You’re probably wondering what I am trying to get at, but to tie it back to my point about adaptability, successfully innovators need to constantly adapt to their environment. What happens with people once they get an idea, is that they spend all their time trying to fit it into a world that once existed, only for the world to be a entirely new place. Successful innovators need to constantly evolve their ideas, to the changing circumstances.

In October last year, I made a proposal at my firm to implement a new technology. For the months leading up to that point, people had to some extent talked down my idea and some even flat out rejected it. October however had me find the right person to hear my idea. And yet if I look at what I originally had thought, and what it is now – it is almost a completely different thing. Because when I pitched my idea, I was asked “why” it works and “how” is it different from anything else. It was that ‘why’ question that had me spend countless hours researching and understanding – adapting – my idea to the scenario being presented to me. I successfully made my business case, because I was given the opportunity to reframe my idea and adapt it to the circumstrances I was presented. Had I not adapted my original idea and vision, I wouldn’t be doing what I am doing now.

Of course, I could have summed up the above by mentioning Charles Darwin’s theory of evolution. Survival of the fittest, right? Adapt to the Green forest like that Green lizard that looks like a leaf, and you’ll find some food (rather than being the food yourself). Adaptability in life is a key critical success factor; and with innovation, it is the hidden factor that on the outside and in retrospect by others, gets attributed as luck.

Update 20/6/07: Catching up on some reading, I just came across a great posting by Marc Andreessen, an internet pioneer, who talks about the four types of luck and which nicely complements my thoughts above.

Half the problem has been solved with time spent

On Thursday, I attended the internal launch of the Australian Entertainment & Media Outlook for 2007-2011. It was an hour packed with interesting analysis, trends, and statistics across a dozen industry segments. You can leave a comment on my blog if you are interested in purchasing the report and I’ll see if I can arrange it for you.

One valuable thing briefly mentioned, was the irony of online advertising.
Continue reading ‘Half the problem has been solved with time spent’

Facebook poll: how many friends do you have?

One of Facebook‘s new features is the ability to create surveys, targeted to certain groups of people within the community site. One caught my eye today, which asked 1,000 random people “How many friends do you have?”. Although I am not sure of the conditions this poll was conducted under (ie, did only Australian’s see it?), 1,000 random people should theoretically be a fairly representative sample of the entire population.

Whilst the results immediately show some interesting information on the typical size of a person’s network (which is a discussion in itself), I am equally fascinated by the specific genders and age breakdown of people who answered the poll and the correlation with their network size. One theory I have of why people spend so much time on the site, is because people ‘collect’ friends. They are constantly discovering old friends through mutual friends – a friend’s list leads a person to another profile where they may discover someone they have lost touch with. Check the results first, before I continue:

Poll on

Facebook poll breakdown

Facebook poll breakdown by age

Some of my interpretations of the results

  • Despite being open to anyone since late last year, university students still dominate the site as over half the survey was answered by people in the 18-24 age bracket
  • About 46% of males and 49% of females have over 200+ people. It’s impossible to have 200 ‘friends’ – no one can physically see 200 friends on a regular basis This tells me Facebook is now more about ‘contacts’ and keeping in touch with people you know. This makes it more than just a closed network of your close friends and more of a networking tool – validating what some commentators have been saying of late. I could spend a whole blog post explaining the implications of this, but basically, this means facebook is ‘the’ social networking site now and it’s only going to get more entrenched due to the law of cumulative advantage.
  • Of people aged 35 and above, 70% have under 99 friends – which is only the case of 41% of people aged 25-34, and 19% of 18-24. This is interesting, because the people in the 24+ age group didn’t have facebook when they were at university (which is why 18-24 is so dominant in this regard). Over time, you would expect the age groups to be fairly synchronised – in fact older people would have much larger networks. This tells me despite all the hype, Facebook is still not mainstream – there is a heck of a lot more growth to occur.
  • …and leading off where I started the blog posting: the fact that more males answered the poll (53%) – despite women generally outnumbering men in Western countries – implies men are more interested in knowing how many friends people have. So if you tie that with my ‘friend collector’ theory means more men spend time ‘collecting’…in other words, men stalk more!

Australia as Silicon Beach

In January, David Bolliger coined the term “Sillicon Beach” to refer to a bunch of Sydney based start-ups – continuing an international trend of regionalising hotspots of tech innovation that aspire to be like Sillicon Valley (my other favourite is New York as Sillicon Alley). Although it’s not the first time the term has been used, everyone from Perth, Melbourne, Newscastle, Brisbane, and the rest are claiming they are the real silicon beach.

So seeing as our population is only 20 million, and we are one big island continent anyway – I think I am going to settle with calling Australia’s tech industry as a whole as “Silicon Beach”.

Tangler

This is the second post in a series – wizards of oz – which is to highlight the innovation we have down under, and how the business community needs to wake up and realise the opportunities. I review Tangler, a Sydney-based start-up that has recently released their application to the world as a public beta.

Tangler is a web-service that enables discussions over a network. Think of discussions with the immediacy of Instant Messaging (it’s easy), but with the persistency of a forum (messages are permanently stored). Discussions are arranged into communities of interest (groups), which are further broken down into topic areas. Click here to see a video overview.

Value

1) It’s a network application. Although it’s got a great design, and looks like a funky website, the real power of this web service is what it’s working towards: discussions over a network. Imagine a little widget with the topic “What do you think of Elias Bizannes?” placed on my (external) personal blog, my internal work blog, my myspace/facebook/social networking page, as well as it’s own dedicated forum on the Tangler site. A centralised discussion, in a decentralised manner. That’s big.

2) It’s community has great DNA. Communities are not easy things to build – my own experience on a getting-bigger-by-the-day internal project has shown that it is a complex science, touching everything from understand motivational theory to encouraging the right kind of behaviours (policing without policing). My usage on the site has shown to me that the active community building currently occuring, is on the right track. Anyone can hire a code monkey, wack on some flashy front-end, and say they have a great product. But not anyone can build a strong community – even Google struggles on this (the acquisition of YouTube happened largely because of community, because the YouTube community beat Google’s own service). Tangler’s community is already turning into a powerful asset – the DNA is there – now it just needs exposure, and the law of cumulative advantage will kick in.

3) The founder and staff are responsive to its community. I posted a question on the feedback forum, to prove this point: I got a response in an hour, on a Saturday. The staff at Tangler are super responsive – which in part, is due to the real-time discussion ability of the software – but also because of their commitment. As I state above – the value of Tangler is the community of users it builds – this type of responsiveness is crucial to keep its users satisfied to come back, because it makes them feel valued. Additionally, the community is driving the evolution of the application, and that’s the most powerful way to create something (adapting to where there is a need by the people that use it)

4) It’s a platform. What makes Tangler powerful, is that it encourages discussions around niche content areas. Make that niche content, being created for free. Low cost to produce + highly targeted content = an advertisers dream. Link it with a distributed network across the entire Internet (see 1 above), and you’ve got something special.

Conclusion

Social networks, which is what Tangler is, are characterised by:
1) the existence of a repository of user-generated content and
2) the need of members to communicate.

Tangler’s user-generated content and communications web make them an interesting fit for both media conglomerates and telecommunication companies (but for different reasons). I see a Tangler acquisition as a no-brainer for the big Telco’s. Integrating a social network like Tangler into Telstra, builds on the synergy between the communication needs of social network users and the communications expertise and service infrastructure of the communication companies. Unlike voice calls that are a commodity now, the Telco’s need to take advantage of their network infrastructure and accommodate for text-based discussions, which can be monetised for as long as the content exists (with advertising).

The challenge for Tangler however – as with any other Internet property – is that the scale of the audience of social networks determines the nature of the relationship with a communications company. Micro-sized social networks are not interesting to communication companies. Massive social networks are, but history has shown they would rather be partners than be acquired. To be attractive to the big end of town, Tangler needs to show to have a scale large enough to grow as a business but not too large to dictate the terms of the business.

My observations conclude me to think that they will be a hit once they open up their application to external developers, which will relieve the development bottleneck faced by their resource and time constrained team. However they shouldn’t rush this, as I still think their performance issues are not completely ironed out yet. An open API would be taken up by its enthusiastic community who are technologically orientated. Not too mention the strong relationships the CEO and CMO have forged with the local web entrepreneurial and development community in Australia.

My boss is currently doing a secondment as acting Finance Director at Sensis, Telstra’s media arm. Maybe I need to organise a catch-up with him, before these guys get snatched up by some US conglomerate!