Frequent thinker, occasional writer, constant smart-arse

Tag: Business (Page 1 of 4)

Advertising on the Internet needs innovation

On the weekend, I caught up with Cameron Reilly of the Podcast network , and he was telling me about his views on monetising podcasts. It got me thinking again about those things I like to think about: how content can be monetised. Despite the growth in online advertising which is tipped to be $80 billion, I think we still have a lot more innovation to go with revenue models, especially ones that help content creators.

Advertising is a revenue stream that has traditionally enabled content-creators to monetise their products, in the absence of people paying a fee or subscription. With the Internet, content has undergone a radical changing of what it is – digital, abundant, easily copied – whilst the Internet has offered new opportunities for how advertising is done. However, the Internet has identified the fundamental weaknesses of advertising , as consumers can now control their content consumption, which allows them to ignore embedded advertising altogether. Content on the other hand, still remains in demand, but means of monetising it are slipping into a free economy which is not sustainable. I make that point to illustrate not that professional content creation is a sunset industry – but rather there’s a big market opportunity as this massive industry needs better options.

time mag

"Hey man, there’s this new thing called the Internet. Sounds pretty cool"

One of the biggest innovations in advertising (and enabled by the Internet) is of contextual search advertising. This has been popularised by Google, which now makes 98% of its $17 billion revenue from these units. This advertising dominates online advertising (40% of total) because of its pull nature, whereby key-words stated by a consumer in effect state their intention of what they are interested or would like to purchase. Whilst this is a highly efficient form of advertising, it also has its weaknesses – for example, it is not as effective outside of the search engine environment. Google makes 35% of its revenue from the adSense network , where these contextual ads are placed on peoples personal websites. Evidence from high traffic bloggers suggests they barely make enough money through this type of advertising. Another point to consider is that aspects of the Google network include significant partnership agreements like the one with AOL which accounts for 10% of Googles revenue (this is a 2005 figure which has likely changed, but Google does state in their 2007 report "Our agreements with a few of the largest Google Network members account for a significant portion of revenues derived from our AdSense program. If our relationship with one or more large Google Network members were terminated or renegotiated on terms less favorable to us, our business could be adversely affected.". AOL most recently reported for Q1 2008 half a billion dollars largely from search advertising ).

Other attempts at creating more efficient advertising which have existed for over a decade, have come in the form of profiling or behavioural tracking. However, these forms of advertising has also highlighted the growing awareness of consumer privacy being eroded, and is under heavy scrutiny by activist groups and government. Facebook is a company that is best posed to deliver new forms of advertising because of the rich profiling data it has, but it itself has faced massive backlash .

My view is that the majority of online advertising for successful individual publishers at least, has largely come from traditional approaches to advertising – a masthead blog with a sales team that uses display advertising. How effective this display advertising is is debateable with widespread banner blindness and consumer control over their content, but it would appear that this is more a case of advertisers seeing this as the least bad on the overall scale of opportunities. The fact it replicates the mass media approach of number of unique consumers viewing the content, and not the types of users, means this isn’t anything new other than being done in a digital environment.

Digital content is in need of a better monetisation system.
Targeted advertising is the most efficient form, yet consumer privacy is a growing force preventing this. What we need, is not a new advertising technology, but a new way of thinking about advertising – in a way that can help the content economy rather than riding on it without giving benefit. Contextual advertising sounds great in theory as it calculates key-word frequency of words on a website, to match it to a key word ad – but it’s proving in practice these ads are not very relevant. Yet trying to think of a smarter way to advertise, may be the wrong question – perhaps half the problem itself is advertising as a concept?

perspective

Are we running down a tunnel, only to find there is nothing there?

Content which comes in the form of news (historical and breaking), analysis, and entertainment can be monetised via a persons attention or through a transaction (ie, subscription, fee, etc). Both this approaches have different barriers.

– Attention: The key driver is increased dollars per unique person, over a period of time. The barriers to this approach is the challenge of identifying the individual in a way that gives advertising that is highly relevant and will result in a conversion. In other words, privacy privacy privacy.

– Alternative payment: Requiring consumers to pay for content is a barrier due to the paid wall. What is more problematic for digital content, is that the ability to replicate it freely makes it not just easy to do for the masses but has created a culture of if it’s not free, it’s not worth purchasing unless its really necessary. There needs to be a strong value proposition for a consumer to purchase content, and in the absense of a brand and marketing, the restriction of what value the content offers is a barrier for consumer demand as they don’t know what they are missing out on.

So as you see above, content creators are in a difficult position. Charging people reduces their opportunity unless they are really established, but even then, due to the digital environment they don’t have any control over subsequent distribution (with rampant piracy). Yet advertising is fraught with being irrelevant and hence not effective (so advertisers go to other forms) and any attempts to make it more relevant, gets held back by the concerns of privacy advocates (and rightly so). Whilst the Internet parades itself as an advertising growth machine, it’s growing in new areas but not the old areas that have traditionally been the medium for advertisers.

This advertising growth is largely being driven through utility computing products that aim to make information retrieval more efficient (ie, search). However, the growth for the content creators, is not happening. As Cam was telling me, in a market like Australia – small content organisations like TPN and Bronwen Clune ‘s Norgs , don’t have access to the big end of town for a sales team. And he didn’t have to tell me, those Google ads for the smaller guys, are not enough to pay the bills. That small to middle end is not being really catered for.

But before you jump on the phone and create some mid-tier advertising network that caters for a niche, think about the real problem: content creators need a better solution to monetise their content. But advertisers also need a better way of selling, other than some slick-talking sales person who can sell ads on pageviews (a broken model with weak alternatives ) They need advertising that is suited for their product, but the market now includes other products media outlets never had to compete with like marketplaces now happening online and utility computing products. Whilst the technology community obsesses about search , let’s also remember we have yet to see a new way to monetise content that is superior to the old world. Contextual advertising of text is the latest new thing area, but that technique is nearly a decade old. As I prove above, outside of the search environment, it is showing to not be that effective.

Where is the innovation going to come from? Not through technology but with a new paradigm shift like how content creators operate . New ways of thinking about the way we ‘sell’ like what the VRM Project is challenging. But perhaps more fundamentally, is an understanding that the holy grail of targeted advertising has got a speed hump called privacy – and that may actually be a sign of not going faster towards better targeting, but changing the vehicle all together.

Emerging trends? Nope – its been a long time coming

When I read the technology news, concepts about cloud computing still seem to be debated . I think to myself: you are kidding me right? I take a step back and think maybe the future won’t be like the current mantra, but then again, trends take time to materialise.

Scanning through my hard-disk, I could not help but laugh after I found a document I wrote to a friend in February 2006 – and as I said in the document "Those six points, as rough as they are, form core elements in my thinking on how I approach business on the Internet …[I’ve been thinking about it] since November 2003"

So below, is literally a copy and paste of that document that has seeds from way back in 2003 when I submitted a grant application for a business idea (ahem, no response obviously…). The fact that nearly half a decade has passed since I first synthesised these ideas (and no doubt, from reading of the thinkers of the day not just me being imaginative) means they are not flake predictions: they are real. Ready?

1. Digital future. All information – news reports, television shows, educational text books, radio shows – are being digitalised, coexisting with their analogue versions. Whether the digital replicas replace their analogue counterparts is pure speculation. But one fact we cannot ignore is that the possibility is there – all content is now digital. And consumers will switch to the digital version if the value of the content consumed is better realised in digital form

  • Quick case study. Many pundits believe newspapers will not exist in 15 years. I know they won‚Äôt exist in 15 years, and I have spent three years thinking about this very point. At first I used to think digital replicas, as shown by http://www.newsstand.com, was what was going to transform the newspaper business. What I didn‚Äôt realise, is that the current newspaper experience far exceeds the digital replica (I was hung up on the idea of electronic paper [www.eink.com] ‚Äì which still remains a big possibility). But I knew the digital future was going to make the current newspaper business obsolete ‚Äì there is more value out of digitial. It only just hit me recently by observing my own behaviour‚Äì traditional newspapers are not going to be replaced by digital versions ‚Äì rather, the method¬¨ that people receive their news is going to change. And this fact is embodied by the recent acknowledgment of the world‚Äôs great newspapers of not being in the newspaper business anymore, but in the information business now. I used to read every single major newspaper, and several international newspapers, as I was a debater ‚Äì I was a heavy news consumer, and I still am. Today, I still follow the news very closely ‚Äì but I have not read a newspaper all year. Why? I receive all my information needs through websites, RSS feeds and blogs. A new method, made possible by the digital future. People means of consuming content will change because of digital.

2. Internet as infrastructure. It doesn’t take a genius to realise that the internet will be the core infrastructure of anything to do with information and communications. The power of the internet as infrastructure to communications and information unlocks opportunities that are transforming the world. Radio, TV, phone calls – you name it – can be done via the internet protocol now.


3. Content is king, distribution is queen – but advertising is what pays for the cost of that sting. Google now makes more revenue than the three prime time television stations in the USA. In monetary terms, that’s about $10 billion a year. And yet, 99% of that revenue comes from one thing – Google’s click-through advertising (about 45% from Google results, the rest from the Google network of publishers through adsense). HarperCollins announced last week that they are trialling a new business model of providing books for free but supported by advertising – the consumer book business up until then was literally the only segment of media not reliant on advertising as a revenue model. Whilst broadcasting organisations make money from several sources, advertising is literally the backbone of their revenue. To make money out of any content, you place a huge reliance on advertising.
In short, if you want to make money out of content, you need to understand advertising

4. One-to-one advertising is the superior form of advertising. Partly due to technological factors, the mass media could only advertise through a one-to-many medium ‚Äì meaning one message to many. The digital-internet future has transformed that ability, by customising content on a one-to-one basis. If advertising, and content can be targeted to an individual‚Äôs personality profile and preferences, it allows for the value of the content to be maximised, with 1-to-1 advertising returning a higher return on campaigns – far superior than any other form of advertising. Superior because it can make advertising more relvant for consumers (ie, higher response rate), it can increase advertising inventory (mass media advertising is a bit like throwing pamphlets out of a plane, hoping the right people catch them – 1-to-1 means the right people get it at minimal cost and best of all, it creates better accountability which is what advertisers now demand.

5. The best business practice for one-to-one advertising is not there yet. The internet is the platform that enables one-to-one advertising, and yet, this opportunity has still not been fully exploited. There is a massive need in the market, for a means of providing personalised advertising far superior to the current technologies and methods. Google populised an innovative form of advertising through click-throughs. However internet click-throughs, despite providing more accountable and better targeted advertising, still lacks the ability to unleash the real power of one-to-one advertising. The power of the internet as a one-to-one advertising platform is still in its infancy

6. Privacy matters. Privacy is the right to determine what information is available about you, when you want it to be available, and to whom you want it available to. Current practices of companies who gain as much information about you through your sales history, your activity on the web, and the like – are often doing so without the full knowledge of the consumer. It is information collected by spying on a consumer, and whilst some people retaliate by various measures (ie, fake information, anonymous proxies), there is great mistrust by the public in providing personal information, or rather, too much to one organisation. If information is to be used about people, there needs to be proper approval – both for legal reasons (a business model cannot rely on consumer stupidity) but also for the integrity of the data (ie, a cooperative consumer will provide more reliable data)

  • Companies like Double Click who would collect your surfing history relied on placing a cookie on your computer ‚Äì what happens if you delete that cookie? And what happens if your dad, mum, and cousin from Brazil, use the same computer as you? That creates a fairly inconsistent ‚Äúprofile‚Äù of a person that is to be targeted

I had totally forgotten I had written that. And reading it now it’s a bit lame and I could probably extend on things a little bit – actually there are things I have actually written in blog posts this last year. Better still, I can provide actual evidence that validate these trends as advancing like the existence of the VRM project for advertising, the big clash with Facebook and privacy (and lets not forget the first time ), and Microsoft’s recent announcement about moving away from software (to pick but a few examples).

If this is what I was seeing in November 2003 as a naive university student absorbing what the industry trends were back then; February 2006 when I wrote to my friend what I thought he needed to consider about the future; and the fact I still agree with it in May 2008 – I think things are beyond speculation: these are long-term trends that are entrenched.

Analysing the user experience from two social networking sites

Yet again, MySpace has e-mailed me a useless e-mail that frustrates me more than it gives me value . But what I noticed recently, was another social networking site, taking a different approach.

geni

Whereas MySpace is simply alerting me, which is forcing me to painfully log into their service, Geni is actually alerting me the information without me having to take another action.

A few points of reflection on this:
1) Using my business analysis on the consumer Internet , MySpace is offering a content model (hypermedia is how I referred to this in my post) whereas Geni is offering a Utility computing product. Both these businesses consider themselves "social networking" sites and yet both offer a different product model.
2) This also highlights two different business models: MySpace is a platform whilst Geni is working on a network model. Meaning, MySpace’s business model is premised on you visiting them for you to get value; Geni’s isn’t. To be perfectly honest, both MySpace and Geni are irrelevant for me. However platforms can come and go, but network models always stick around. As irrelevant Geni is to me, I still value it – a network business strategy (meaning you follow the user, rather than expecting them to come) builds a long term relationship.
3) Social networking sites when it’s the core product, work best as utility services and not a content business. Look at what a different user experience it is for me, because I can get benefit from my Geni account despite not having to log in. Although I am not giving them pageviews, I am giving them my attention which is translating into greater brand equity for them. When you treat social networking as a content business, this distorts the service offered to users, as misaligned business views on generating revenue drive strategy in a way that is harmful to the consumer ie, I feel like saying "f**k off" whenever I see those e-mails for MySpace . But "thank-you" to Geni.

The main point I want to get at though, is that the user experience is just as important when the user is not on the site as it is when they are on the site. People shy away from the recently-recognised network model of business, because they don’t get the same traffic. I say embrace it, because the market will eventually correct itself to recognise this is a superior type of strategy.

It’s all still alpha in my eyes

The invention of hypertext has been the most revolutionary thing since two previous technologies before: the printing press and the alphabet. Combined with computing and the Internet, we have seen a new world represented by the World Wide Web that has transformed entire industries in its mere 19 15 year existence.

The web caught our imagination in the nineties, which became the Dot-Com bubble. Several years after the bust, optimism reawakened when the Google machine listed on the stock exchange – heralding a new era dubbed “web2.0”. This era has now been recognised in the mainstream, elevated by the mass adoption of the social computing services, and has once again seen the web transform traditional ideas and generate excitement.

davewiner
The web2.0 era is far from over – the recent global recession however has flagged though that the pioneers of the industry are looking for something new. As the mainstream is rejuvenated by web2.0 like the Valley was not that long ago, it’s time to now look for what the next big thing will be. Innovation on the web is apparently flattening. Perhaps it has – but the seeds of the next generation of innovation on the web are already here.

Controversy of the meaning of web2.0 – and what its successor will be – should not distract us. We are seeing the web and associated technologies evolve to new heights. So the question is not when web2.0 ends, but what are we seeing now, that will dominate in the future?

My view:
• The mobile web. The mobile phone is now evolving into a generic entertainment device, becoming a new computing device that extends the reach of the internet. First with the desktop computer, and then with the laptop computer – new opportunities presented themselves in the way we could use computers. The use of this new computing platform will create new opportunities that we have only scratched the surface.
• The 3D web. Visit second life, the virtual world, as you quickly note the main driver of activity is sex and that it’s just a game. However, porn and games have spearheaded a lot of the innovation of technology in the past. The 3D web is now emerging with four separate but related trends: virtual worlds, mirror worlds, augmented reality and lifelogging.
• The data web. Data has now become a focus in the industry. The semantic web, eventually, will allow a weak form of artificial intelligence that will allow computer agents to work in an automated fashion. Vendor Relationship Management is changing the fundamental assumptions of advertising, with a new way of how we transact in our world. Those trends, when combined with the drive for portability of peoples data, is having us see the web in a new light with new potential. Not as a collection of documents, and not as a platform for computing, but as a database that can be queried.

So to get some discussion, I thought I might ping some smart people I know in the industry on what they think: Chris Saad, Daniela Barbosa, Ben Metcalfe, Ross Dawson, Mick Liubinskas, Randal Leeb-du Toit, Stewart Mader, Tim Bull, Seth Yates, Richard Giles as well as you reading this now.
What do you think is currently in the landscape that will dominate the next generation of the web?

Information overload: we need a supply side solution

About a month ago, I went to a conference filled with journalists and I couldn’t help but ask them what they thought about blogs and its impact on their profession. Predictably, they weren’t too happy about it. Unpredictably however, were the reasons for it. It wasn’t just a rant, but a genuine care about journalism as a concept – and how the blogging “news industry” is digging a hole for everyone.

Bloggers and social media are replacing the newspaper industry as a source of breaking news. What they still lack, is quality – as there have been multiple examples of blogs breaking news that in the rush to publish it, turns out it was in fact fallacious . Personally, I think as blogging evolves (as a form of journalism) the checks and balances will be developed – such as big names blogs with their brands, effectively acting like a traditional masthead. And when a brand is developed, more care is put into quality.

Regardless, the infancy of blogging highlights the broader concern of “quality”. With the freedom for anyone to create, the Information Age has seen us overload with information despite our finite ability to take it all in. The relationship between the producer of news and consumer of news, not only is blurring – but it’s also radically transforming the dynamics that is impacting even the offline world.

Traditionally, the concept of “information overload” has been relegated as a simple analysis of lower costs to entry as a producer of content (anyone can create a blog on wordpress.com and away you go). However what I am starting to realise, is the issue isn’t so much the technological ability for anyone to create their own media empire, but instead, the incentive system we’ve inherited from the offline world.

Whilst there have been numerous companies trying to solve the problem from the demand side with “personalisation” of content (on the desktop , as an aggregator , and about another 1000 different spins), what we really need are attempts on the supply side, from the actual content creators themselves.

info overload

Too much signal, can make it all look like noise

Information overload: we need a supply side solution
Marshall Kirkpatrick , along with his boss Richard McManus , are some of the best thinkers in the industry. The fact they can write, makes them not journalists in the traditional sense, but analysts with the ability to clearly communicate their thoughts. Add to the mix Techcrunch don Michael Arrington , and his amazing team – they are analysts that give us amazing insight into the industry. I value what they write; but when they feel the stress of their industry to write more, they are not only doing a disservice to themselves, but also to the humble reader they write to. Quality is not something you can automate – there’s a fixed amount a writer can do not because of their typing skills but because quality is a factor of self-reflection and research.

The problem is that whilst they want, can and do write analysis – their incentive system is biased towards a numbers system driven by popularity. The more people that read and the more content created (which creates more potential to get readers) means more pageviews and therefore money in the bank as advertisers pay on number of impressions. The conflict of the leading blogs churning out content , is that their incentive system is based on a flawed system in the pre-digital world, which is known as circulation offline, and is now known as pageviews online.

A newspaper primarily makes money through their circulation: the amount of physical newspapers they sell, but also the audited figures of how many people read their newspaper (readership can have a factor of up to three times the physical circulation ). With the latter, a newspaper can sell space based on their proven circulation: the higher the readership, the higher the premium. The reason for this is that in the mass media world, the concept of advertising was about hitting as many people as possible. I liken it to the image of flying a plane over a piece of land, and dropping leaflets with the blind faith that of those 100,000 pamphlets, at least 1000 people catch them.

It sounds stupid why an advertiser would blindly drop pamphlets, but they had to: it was the only way they could effectively advertise. For them to make sales, they need the ability to target buyers and create exposure of the product. The only mechanism available for this was the mass media as it was a captured audience, and at best, an advertiser could places ads on specialist publications hoping to getter better return on their investment (dropping pamphlets about water bottles over a desert, makes more sense than over a group of people in a tropical rainforest). Nevertheless, this advertising was done on mass – the technology limited the ability to target.

catch the advert

Advertising in the mass media: dropping messages, hoping the right person catches them

On the Internet, it is a completely new way to publish. The technology enables a relationship with a consumer of content, a vendor, a producer of content unlike anything else previously in the world. The end goal of a vendor advertising is about sales and they no longer need to drop pamphlets – they can now build a one on one relationship with that consumer. They can now knock on your door (after you’ve flagged you want them to), sit down with you, and have a meaningful conversion on buying the product.

“Pageviews” are pamphlets being dropped – a flawed system that we used purely due to technological limitations. We now have the opportunity for a new way of doing advertising, but we fail to recognise it – and so our new media content creators are being driven by an old media revenue model.

It’s not technology that holds us back, but perception
Vendor Relationship Management or (VRM) is a fascinating new way of looking at advertising, where the above scenario is possible. A person can contain this bank of personal information about themselves, as well as flagging their intention of what products they want to buy – and vendors don’t need to resort to advertising to sell their product, but by building a relationship with these potential buyers one on one. If an advertiser knows you are a potential customer (by virtue of knowing your personal information – which might I add under VRM, is something the consumer controls), they can focus their efforts on you rather than blindly advertising on the other 80% of people that would never buy their product). In a world like this, advertising as we know it is dead because we know longer need it.

VRM requires a cultural change in our world of understanding a future like this. Key to this is the ability for companies to recognise the value of a user controlling their personal data is in fact allowing us new opportunities for advertising. Companies currently believe by accumulating data about a user, they are builder a richer profile of someone and therefore can better ‘target’ advertising. But companies succeeding technologically on this front, are being booed down in a big way from privacy advocates and the mainstream public. The cost of holding this rich data is too much. Privacy by obscurity is no longer possible, and people demand the right of privacy due to an electronic age where disparate pieces of their life can be linked online

One of the biggest things the DataPortability Project is doing, is transforming the notion that a company somehow has a competitive advantage by controlling a users data. The political pressure, education, and advocacy of this group is going to allow things like VRM. When I spoke to a room of Australia’s leading technologists at BarCamp Sydney about DataPortability, what I realised is that they failed to recognise what we are doing is not a technological transformation (we are advocating existing open standards that already exist, not new ones) but a cultural transformation of a users relationship with their data. We are changing perceptions, not building new technology.

money on the plate

To fix a problem, you need to look at the source that feeds the beast

How the content business will change with VRM
One day, when users control their data and have data portability, and we can have VRM – the content-generating business will find a light to the hole currently being dug. Advertising on a “hits” model will no longer be relevant. The page view will be dead.

Instead, what we may see is an evolution to a subscription model. Rather than content producers measuring success based on how many people viewed their content, they can now focus less on hits and more on quality as their incentive system will not be driven by the pageview. Instead, consumers can build up ‘credits’ under a VRM system for participating (my independent view, not a VRM idea), and can then use those credits to purchase access to content they come across online. Such a model allows content creators to be rewarded for quality, not numbers. They will need to focus on their brand managing their audiences expectations of what they create, and in return, a user can subscribe with regular payments of credits they earned in the VRM system.

Content producers can then follow whatever content strategy they want (news, analysis, entertainment ) and will no longer be held captive by the legacy world system that drives reward for number of people not types of people.

Will this happen any time soon? With DataPortability, yes – but once we all realise we need to work together towards a new future. But until we get that broad recognition, I’m just going to have to keep hitting “read all” in my feed reader because I can’t keep up with the amount of content being generated; whilst the poor content creators strain their lives, in the hope of working in a flawed system that doesn’t reward their brilliance.

The most important lesson in business

Over the weekend, I attended a conference (I was even quoted in the press, despite disclaiming before one of my presentations I was scattered from a terrible hangover!). In one of the sessions, where the brilliant guys at Australian start-up company Good Barry shared some of their lessons, an audience member asked the question of when should they get lawyers and accountants to help them out.

I think this was a very good question and one I will answer here. Why can I? Because I am (nearly) a chartered accountant ; an experienced external auditor; and an employee in one of the biggest firms in the world that makes money from guys like me doing services for people like you.

There are four areas accountants help a business:

1) Reporting & compliance. Whether you run a business and want to know what’s happening (ie, measurement on your employees output so you can track how big their bonus will be) – or you need to create some type of reporting to external stakeholders (like investors, banks, shareholders) – accountants have the skills to ensure you create the appropriate reports. Reports can vary from custom internal ones to help assess things, to government mandated ones like financial reports to statutory authority’s or the tax office

2) Tax. It wasn’t until I studied tax, that I realised how valuable tax accountants are. Tax is the biggest expense of anyone – individual or company – and there are plenty of legal tricks to avoid paying. Specialist accountants can help you structure your business in a way, where you minimise this expense. People can spend an entire life understanding just one aspect of the tax code. It’s massive. Trust me, a good tax adviser is worth their weight in gold.

3) Assurance. If you produce financial reports, you need to get audited by special types of accountants, who will verify your numbers to make sure you are not talking crap. However auditors are also very experienced in understanding how businesses should be run (so would you if you visited dozens of companies every year analysing them inside out), so they can also add a lot of value by helping assess your business during the audit and making recommendations on improving how you run. They do this, because during an audit they see everything and often have a more complete view of a business than management. A very useful thing accountants can help with, is by developing your internal control framework. What this means, is helping set up systems so that it runs like a proper business. For example, making sure two people sign a cheque is a ‘control’ – and a very important one, because without it, people can be signing cheques to themselves and running away with your money (it happens more frequently than you think).

4) Decision making. These types of accountants are called management accountants, and they can help analyse the numbers of a business to assist strategic decisions. For example, should you buy a company? A management accountant has the skillset to provide the analysis on whether it will be worth while. Management accountants help interpret information, to make important decisions for the business.

What help does a start-up company need from an accountant

The most important thing you need to know, is CASHFLOW. You need to maximise the amount of working capital – cash you’ve got on hand – at any one time. It’s seems simple enough that you need to make sure you make more money than you spend, but you will be surprised how easily people overlook this. Possibly in the Internet startup culture funded by vulture venture capitalists, people forget that the money they are spending is not real money.

Accountants can help maximise your cashflow. They can help with cash strategies like for example all that money sitting in the bank, why not put it somewhere and earn interest on it? They can help with cash management to maximise your working capital: smart ideas like pay your creditors as late as possible (people you owe); chase your debtors every day (people that owe you). However you don’t need an accountant to watch your cashflow. You just need you to recognise its importance. Get that? Accountants can do a lot. But if you are a startup, cashfow is all you need to know.

Do you need an accountant for fix up your controls? This only matters when you have hundreds of people in an organisation and things get complex. Controls are the difference between a small company run like a family business, and a big business. Matured startups like Atlassian that make $30million a year, need to consider controls. You? No.

Do you need an accountant for your tax strategies? Well hey buddy, if you aren’t making money, you haven’t got any tax to pay, right?

Do you need an accountant to help make management decisions? Sure you do – but if you have common sense, you can to. Accountants can give you a better analysis of your business from your untrained mind, but you need cash to pay them to do that.

Do you need an accountant for financial reporting? In Australia, unless your gross operating revenue is over $10 million a year; and you have over 50 employees or $5 million in assets, you are considered a small private company that is not required to lodge reports. So stop dreaming about your goal to list your company on the stock exchange, and get back to thinking about the cashflow.

So going back to the question of when does a start-up need an accountant. Well look, if you hire me I can whack some sense into you. But if you have half a brain, you will take this lesson in understanding that cashflow in king. Focus on that first, and then you can worry about the rest if the cashflow is there.

How business is done on the Internet

Day in and day out, the Internet continues to show innovations from people all around the world. Yet for all these innovations, it all comes down to the very core of trying to do business in a new way.

I’ve been doing some research recently for an internal publication my firm produces on the future of the entertainment and media industries, and I wondered what exactly does it mean to do business on the Internet. Whilst there are some brilliant thoughts on what business models on the Net are, I think we lack a proper analysis of what it means to do business.

Below is a summary of my understanding from a consumer perspective of doing business (enterprise is a different beast), but which I think will help people better understand how it all works.

First of all, we need to split the three key factors about business:

  1. Business models: What the structure of a business is.
  2. Revenue models: How the business generates cash from customers to fund its operations.
  3. Product models: What the product is that you provide to your customers to generate the cash

Too often, these three components are mixed as one or the same. Another thing that happens, is we struggle to classify the Internet because it contains so many different types of business. Breaking it down gives us more complete view.

Business models

The first thing to understand, is how a business is structured of which there are three varieties:

  1. Destination: driving consumers to a point ie, a website that you try to drive usage by consumers. This was very much what the early Internet was in the manifestation of the world wide web; websites attempting to get ‘eyeballs’. Your business model is based on the premise of getting people to visit your destination.
  2. Platform: a service that you try to build usage by creating an ecosystem for. Arguably, the web is the platform but in reality we are seeing a different type of platform akin to the Microsoft Windows approach of creating a core service that others can build on. You could classify the web2.0 view that websites are communities in this, whereas there are companies trying to create operating systems on the web for widgets that are a similar thing. Your business model, is built on the premise that people interact on your service or use your platform.
  3. Network: a service that people use regardless of where they are on the Internet. This type of business is about attaching to a user as they use the Internet. It’s almost like the flipside of the above two models: instead of having everyone come to you, this is about following everyone wherever they are. Your business model is built on the premise that people use your service in a decentralised manner.

Revenue models
Revenue models are a key factor to understand as they are what sustain long term changes to an industry that is currently been pushed by venture money and acquisitions from the dominant players. There are four types of monetisation models that I can observe:

  1. Fees: Payment of a fixed amount for access or usage of goods and services over the internet
  2. Subscription: Payment of a fixed amount on a periodic basis for access or usage of goods and services
  3. Commission: Payment of a percentage fee of a transaction
  4. Attention: Consumer gives their time, such as viewing an advertisement, in exchange of goods and services

Product models
There are three types of product models:

  1. Markets is the term I am using to explain when businesses use the Internet as a way to allow others to transact goods and services. The product offered by these companies is effectively a mechanism to do commerce. For example, eBay offers a product model that gives the ability for people to auction goods. Their product is to offer the facility for vendors and consumers to transact. They are like a shopping centre, giving space for vendors to sell and centralising the space so that consumers know where they can buy from these vendors. Markets offer the ability to perform trade of some sort with other parties
  2. Hypermedia is the term I am using to describe any type of content offering to people. Philosophically, it falls under the “new media” category that I have previously linked to and I use the term coined by Ted Nelson which is the broader term coined at the same time as “hypertext”. Effectively, you are offering content to a consumer in an Internet environment. Formally defined, it is access or supply of content via visual, audio and/or text over the Internet
  3. Utility computing is what you can call search engines, web applications, and the software as a service variety, which essentially is about providing computing services for information. Maybe a better way to define the concept is that they are computing services that allow for productivity through information retrieval, creation or management.

It is important to note that a business doesn’t have to restrict itself to just one of the above sub-categories. A business must have at least one business model, one revenue model, and one product model (or rather, they should – web2.0 startups seem to forget the revenue model bit). But within those groupings, it doesn’t have to be just one.

Take for example Facebook, which was initially a destination business – people logged in, viewed peoples profiles and their news feed, and the company generated value for the user by them ‘visiting’. With the launch of the applications platform, Facebook became a platform, because it allowed other entities to build on top of its core service. In this regard, Facebook generated value by creating an ecosystem of applications within its confines. As for a network model, Facebook is yet to to this, but imagine if they created an ad network like Google’s – whereby information about you in Facebook is used to determine what advertising to see across the entire internet. Here the value is that Facebook helps add to your experience across the entire Internet (despite being off the actual site)

So as a concept, below is my matrix of doing business on the Internet (I’m graphically inept, but I want to illustrate the three dimensions conceptually). What do you think?

business on the net

If you can draw better than me (not hard), I’ll credit you on this post!

Update May 27 2010: Rethinking this two years on, I think this still stands as a rough analytical framework. But I now believe that business model makes sense for the overall discussion above (ie, the combination of all the components), and what I term as ‘business model’ in the post is actually more like the ‘operating model’ of a web business.

How to piss your customers off – a lesson courtesy from eBay

I get e-mails from companies. Sometimes I request it; but on the whole I always tick the option “please do NOT send me promotional material”. So when I receive e-mails from companies, I give them the benefit of the doubt that it was my error, although this is being extremely generous because I know I never allow them to send communications above what I need. The fact I am getting an e-mail from them already has me tense.

So if a company is going to send me promotional e-mails, I expect courtesy because they are taking up my time. Note to companies about how not to do it:

ebay

“…to change your communication preferences, log into eBay…” and click through the barrage of poor usability options to find that hidden box that allows you to stop being spammed. After all, a one click unsubscribe option or even a link of where you need to go makes it more likely that you would unsubscribe so we adopt of model of trying to discourage you, because we know most people haven’t got the effort to action and would rather delete it than remove the sending from the source. Hey, marking us as ‘spam’ or deleting each incoming e-mail is a better option because the more numbers we have on our mailing list as ‘receiving’ the more it makes the marketing director feel all warm and fuzzy that we have distribution outlets for campaigns, even though we know you don’t read them.

“Please note it may take us up to 10 business days to process your request” because it takes 10 microseconds to technologically do so but we are a bunch of losers who are going to hope you forgot you tried un-subscribing and will send follow up e-mails in that time hoping to win you back, because we refuse to accept we screwed up and have ruined our relationship with you”.

DataPortability is about user value, fool!

In a recent interview, VentureBeat asks Facebook creator and CEO Mark Zuckerberg the following:

VB: Facebook has recently joined DataPortability.org, a working group among web companies, that intends to develop common standards so users can access their data across sites. Is Facebook going to let users — and other companies — take Facebook data completely off Facebook?

MZ: I think that trend is worth watching.

It disappoints me to see that, because it seems like a quick journalists hit at a contentious issue. On the other hand, we have seen amazing news today which are examples of exactly the type of thing we should be expecting in a data portability enabled world: the Google contacts API which has been a thing we have highlighted for months now as an issue for data security and Google analytics allowing benchmarking which is a clear example of a company that understands by linking different types of data you generate more information and therefore value for the user. The DataPortability project is about trying to advocate new ways of thinking, and indeed, we don’t have to formally produce a product in as much maintain the agenda in the industry.

However the reason I write this is that it worries me a bit that we are throwing around the term “data portability” despite the fact the DataPortability Project has yet to formally define what that means. I can say this because as a member of the policy action group and the steering action group which are responsible for making this distinction, we have yet to formally decide.

Today, I offer an analysis of what the industry needs to be talking about, because the term is being thrown around like buggery. Whilst it may be weeks or months before we finalise this, it’s starting to bother me that people seem to think the concept means solving the rest of the world’s problems or to disrupt the status quo. It’s time for some focus!

Value creation
First of all, we need to determine why the hell we want data portability. DataPortability (note the distinction of the term with that of ‚Äòdata portability‚Äô – the latter represents the philosophy whilst the former is the implementation of that philosophy by DataPortability.org) is not a new utopian ideal; it‚Äôs a new way of thinking about things that will generate value in the entire Information sector. So to genuinely want to create value for consumers and businesses alike, we need to apply thinking that we use in the rest of the business world.

A company should be centered on generating value for its customers. Whilst they may have obligations to generate returns for their shareholders, and may attempt different things to meet those obligations; they also have an obligation to generate shareholder value. To generate shareholder value, means to fund the growth of their business ultimately through increased customer utility which is the only long term way of doing so (taking out acquisitions and operational efficiency which are other ways companies generate more value but which are short term measures however). Therefore an analysis of what value DataPortability creates should be done with the customer in mind.

The economic value of a user having some sort of control over their data is that they can generate more value through their transactions within the Information economy. This means better insights (ie, greater interoperability allowing the connection of data to create more information), less redundancy (being able to use the same data), and more security (which includes better privacy which can compromise a consumers existence if not managed).

Secondly, what does it mean for a consumer to have data portability? Since we have realised that the purpose of such an exercise is to generate value, questions about data like “control”, “access” and “ownership” need to be reevaluated because on face value, the way they are applied may have either beneficial or detrimental effects for new business models. The international accounting standards state that you can legally “own” an asset but not necessarily receive the economics benefits associated with that asset. The concept of ownership to achieve benefit is something we really need to clarify, because quite frankly, ownership does not translate into economic benefit which is what we are at stake to achieve.

Privacy is a concept that has legal implications, and regardless of what we discuss with DataPortability, it still needs to be considered because business operates within the frameworks of law. Specifically, the human rights of an individual (who are consumers) need to be given greater priority than any other factor. So although we should be focused on how we can generate value, we also need to be mindful that certain types of data, like personally identifiable data, needs to be considered in adifferent light as there are social implications in addition to the economic aspects.

The use cases
The technical action group within the DataPortability project has been attempting to create a list of scenarios that constitute use cases for DataPortability enablement. This is crucial because to develop the blueprint, we also need to know what exactly the blueprint applies to.

I think it’s time however we recognise, that this isn’t merely a technical issue, but an industry issue. So now that we have begun the research phase of the DataPortability Project, I ask you and everyone else to join me as we discuss what exactly is the economic benefit that DataPortability creates. Rather than asking if Facebook is going to give up its users data to other applications, we need to be thinking on what is the end value that we strive to achieve by having DataPortability.

Portability in context, not location
When the media discuss DataPortability, please understand that a user simply being able to export their data is quite irrelevant to the discussion, as I have outlined in my previous posting. What truly matters is “access”. The ability for a user to command the economic benefits of their data, is the ability to determine who else can access their data. Companies need to be thinking that value creation comes from generating information – which is simply relationships between different data ‘objects’. If a user is to get the economic benefits of using their data from other repositories, companies simply need to allow the ability for a user to delegate permission for others to access that data. Such a thing does not compromise a company’s competitive advantage as they won’t necessarily have to delete data they have of a user; rather it requires them to try to to realise that holding in custody a users data or parts of it gives them a better advantage as hosting a users data gives them complete access, to try to come up with innovative new information products for the user.

So what’s my point? When discussing DataPortability, let’s focus on the value to the user. And the next time the top tech blogs confront the companies that are supporting the movement with a simplistic “when are you going to let users take their data completely off ” I am going to burn my bra in protest.

Disclosure: I’m a hetrosexual male that doesn’t cross-dress

Update: I didn’t mean to scapegoat Eric from VentureBeat who is a brilliant writer. However I used him to give an example of the language being used in the entire community which now needs to change. With the DP research phase now officially underway for the next few months, the questions we should be asking should be more open-ended as we at the DataPortability project have realised these issues are complex, and we need to get the entire community to come to a consensus. DataPortability is no longer just about exporting your social graph – it’s an entirely new approach to how we will be doing business on the net, and as such, requires us to fundamentally reexamine a lot more than we originally thought.

Don’t cry for me, Argentina!

Hola!

Apologies for the lack of activity, as in December I was preparing for an exam, and a day later, I flew to South America for a month – with these last few weeks my freetime has been eaten by creating some order at DataPortability. Despite the fact I knew one month wasn’t enough, and I visited too many countries that the travel was tiring and expensive, it still has been an amazing experience and I figure I might as well share my experience, as this blog did start as a travel blog.

From Tango in Buenos Airies to anaconda hunting in Bolivia, partying in Cuzco to experiencing the misunderstood Columbia – its been an amazing trip, where the people I’ve met on the way have made it just as rewarding as the places I visited. But if you have read my travel writing before, I am not going to bore you with “and then I did this and then I did that and oh my god, we then did that and it was so cool…”. Just some quick observations that may help you see what I saw.

“Self service toilets” – as oppossed to?….

The cities
First stop was Buenos Aires, where I spent close to week doing, um, not quite sure what I did. Buenos Aires is one of the stand out cities in the world, as I was told, but what I wasn’t told was why it’s a stand out city. And the answer is, is because it’s a cultural city. Meaning, there is sweet FA to do there as a tourist. But it’s a funky city to live in: densely urbanised with the town layout following the grid layout that is common across all the Spanish colonial cities, helping structure the urban jungle.

Coming into BA from the airport, I felt like I was driving into Athens: the heat, the run down buildings, and most of all the dirty roads which leave cars with a constant dirt on their sides and belly. Yet that was only the beginning of my comparisons with other cities, as BA’s 48 neighbourhoods each have a unique character and identity – from the slums of La Boca home of the famous Boca Juniors stadium, to the upmarket Riccoletta which had me thinking I was in Greenwich Village New York (the New York you see when watching sitcoms like Friends). Finally, two Melbournians pointed out to me that the city reminds them of Melbourne. One said the harbour is why, whilst my own observation was the grid-like structure of the city found in other great cities like New York, Thessaloniki and Melbourne was more the cause. (Yes, alright, I love the grid layout.)

Bogota (Columbia)

I lost my photos for Argentina so you are going to have to settle with the urban sprawl of Bogota.

The consequence of a grid layout however is a cramped urban look, which I love about in cities, and which is what I believe is a common characteristic of cities with high culture. Whilst Argentina’s population density is 14 inhabitants per square kilometre, the city of Buenos Aires has a population density of over 14,000 inhab./km¬?. With so many people on the one area, no wonder this is a city that radiates culture. It is also no surprise why walking and getting lost in the neighbourhoods is one of the most enjoyable things to do.

Contrast that with La Paz in Bolivia, where I flew to next. Cities of the world tend to be compared to – for example, Buenos Aires, is called the “Paris of the South”, drawing comparison to one of the most beautiful cities I have ever seen. However with La Paz, I believe comparisons do not do it justice: it deserves to be a pin-up city that other cities can be compared to. And so therefore, whenever I say a city is the “La Paz of the …”, take that to mean, that that city is a shit hole that comes close to the biggest shit hole in the world.

Having said that though, I like shit holes. From the airport looking down, the city built on a mountains crest, certainly is spectacular – a geography it shares with Sarajevo, except about 4,000 metres above sea level and without any Serbs snipers. But whatever it is that makes it special, it certainly isn’t the ridiculous car pollution that I can’t help but claim is one of the landmarks of this third world country. I met a couple saying it’s been two weeks and they were still recovering from the altitude sickness which most people tend to get (including me): they didn’t realise those cars with engines from the 1930s probably are the cause. Getting out of the city was better than any pill you could take.

This is typical: the exhaust fumes are ridiculous on some cars

See that exhaust fume? Now times that by about 1000 and you get the idea what La Paz is like

The poverty is astounding, which is evident in the public works (or lack of). But one thing that strikes me, is that it just works. The overflowing markets in the city centre’s streets (I don’t use the word overflow lightly either) and the crazy amount of cars, give a chaotic feel – but like I said, it just works. It’s kind of cool (in the parts that don’t stink at least).

The other major cities I visited where Cusco in Peru, which is a pretty colonial city ruined by American package tourists, although to be fair, I was barely sober so didn’t get to see much as I was partying with some friends. I also went to Bogota in Columbia, a pleasant city, as well as Cali in the south which is one of the largest cities and centre of the cocaine industry. They also claim it is the salsa capital of Columbia (and the world) as well as having the most beautiful women. They do ok on both counts – going to a Salsa club, although expensive for a tourist, is certainly an experience; as for the latter, the reason why the guidebooks claim this as an attraction (other than because there is no much else to do in Cali but party and watch the homeless on crack cocaine) is because when you get a Latin Woman in a skimpy outfit due to the tropical weather (and that’s skimpy for all ages), no doubt men are going to rate this city highly. Sex will always beat high culture!

How to make cocaine stage 2

Coke, anyone?

The people
Argentineans and Columbians are some of the friendliest people I have ever come across. For example, standing on the Buenos Airies metro with my camera out like a stupid tourist – a lady approached me, urging me to hide my camera, due to theft which is so common in the city. (A big bloke from Sao Paolo who has never been robbed in his home city, an unusual occurrence, managed to get rolled here.) Other incidents and just the way people talk to you, is how I am basing my opinion of the friendliness of people. It’s the little things, but it shocked me particularly in Buenos Airies and Bogota as they are a big cities, which typically means everyone is a prick.

Bolivians I would have to say, whilst not exactly the least friendly, I was just shocked at how sloppy they were. The concept of hospitality is all but lost in Bolivia, it’s so ridiculous I couldn’t help but laugh. For example, at a restaurant on the way to Rubbenareque (where I did my Amazon trip), the way the waiter cleaned the food scraps on the table, was by wiping it to the floor, which was then cleaned by the resident dog.

Lake Tititaca

Lake Tititaca – it’s big

Their attitude to the environment is a conservationists nightmare. I remember asking a lady where the bin was for my chips packet which I had finished, and she just pointed on the ground. I was confused, thinking what did she mean by that, and she just laughed and took the packet off me, throwing it to the ground. As you can imagine, our Amazon trip was very scenic later that week – monkeys, dolphins, and floating garbage.

An interesting thing about South America was the policing presence. For example in Bolivia, there seemed to be a military officer or at least a police officer at every store. Columbia’s roads are full of checkpoints, although then again, with a civil war in that country, don’t think I’m complaining. Unfortunately, I’ve lost my pictures of Argentina, but one of the funniest pictures I took was just off the city centre. You had the presidents palace – an ugly pink building, flanked by the Mayor’s building, the Cathedral, and on the same street as the courts and legislature. However directly behind the Presidents house, about 100 metres south-west, is the Ministry of Defence – a towering building many times bigger. Given the history of the region, the fact that there is a much grander defence building watching the presidents house, is not to be lost as a metaphor.

Another thing that shocked me was how much of a presence the indigenous people have. Whilst it would vary across the countries, with Argentina predominantly European and Columbia European and African; Peru and Bolivia were very much dominated by the dark skinned, sometimes Asiatic looking indigenous people, who draw from a variety of ethnic groups, and who all are descendants of sorts of the Incan empire that ruled the continent just before the Spanish. The colourful dresses of the Amyran women in the streets of La Paz is certainly a sight.

The politics
Unlike my previous nine-month trip in Europe, where I thought I was some traveling journalist reporting to the world, I got over I am not writing a guidebook, and realised this was a holiday to fix me up from getting burnt out after two years of fulltime study and work. However despite a monthy of literally switching off, I couldn’t help myself and went into reporter mode, questioning any South American I came across.

World's most dangerous road

Doing our tour along the worlds most dangerous road

The over-arching theme that I took, was that this was a continent with amazing wealth, but overwhelming poverty and terrible government. Poverty is something that stares in your face – and I am told it is even more pronounced in Brazil. Whilst Brazil is the richest country because of its size, Argentina is regarded as the only developed country. Developed in that there is a stable government and economy, with a key difference being they have a vibrant middle class. Every other country, you notice there are the rich – who spend money in clubs like rich westerners – and there are the poor, which at times would distress me.

Our flight from Rubbeneraque to return to La Paz was delayed, which is an interesting example. The problem with Bolivia is that it has no infrastructure: something like 20-30% of the country’s roads are paved (I would love to be a tyre manufacturer there). The regional airports, like this one we were flying out from, was literally a grass field – with customs like some abandoned bus shelter. Actually, the plane couldn’t land due to the rain, and so they transported us to a neighbouring neglected military airport/grassfield about 40 minutes away, because the pilots managed to land it there. However as it rained, we had to wait for the water to drain as the plane couldn’t take off. This experience was an interesting insight into the poverty of Bolivia in particular, as it spurred a long discussion with a Austrian-born pilot now living in Bolivia.

Electrical wires in La Paz, Bolivia

Health and safety is clearly an issue in Bolivia

This man was one of the 70 pilots of the airline company Amaszonas, who was also one of the 23 owners and the National Operations manager of the company. There are four main airlines in Bolivia – three of them have struck an agreement to work together starting March 2008, with AeroSur doing internal flights, Amazonas doing domestic (going forward), and Aerocon doing the regional jobs like our flight today. The fourth airline, is TAM – a military transportation company, and one which our pilot friend claims is the governments attempt to kill local industry. He explain the Left-wing government has got a nationalistic, almost communist, drive. Rather than encouraging local industry, they are competing against it, trying to drive out these business so the government can have a state monopoly.

La Paz, Bolivia

The streets of La Paz – worlds biggest shit-hole

He was moaning how it took 23 minutes to get into radio contact of the guy that was on duty at this neglected airport, which is a lot of burnt fuel and a good example of how there isn’t a supporting infrastructure for business to do things efficiently. On the point of getting the airport paved, which would mean these planes could land in any weather, at 120metres by 60 it would cost 12million USD – a price the industry could not subsidise, and one the government is not willing. And that’s why 37% of the December flights – and December is on the start of rainy season – had been cancelled. Our flight from La Paz got cancelled as we were checking in, which is why we opted for a jeep ride (and that was an experience). If it wasn’t for this landing at the neighbouring airport, and the last minute response from the on-duty airport controller, the flight would have had to have turned back to La Paz. The economic cost of this infrastructure problem, as you can see, is massive.

Talking to this pilot you have to be careful on his views, as he was in the top echelon of society – married to a Channel Nine newsreader with strong connections to politicians, and the owner of an airline – his bashings of the government is a very different perspective of the poor. But as he talked, it made me realise how much of a no hope the Bolivian’s have despite his optimism when President Morales was out. For example, despite rich in natural resources, the government has forbidden foreign corporations from extracting it. Arguably, these corporations abused the country and its population, hence this stance, but as our right wing friend claims, it’s because the government wants to do it itself to capture all the profits. The problem with that approach however, is you need foreign investment to build the infrastructure & transfer expertise that can’t be done by the Bolivians. And so you have this nasty poverty trap – where the government refuses to support foreign investment despite a clear need for it, and investors can’t invest because of the unstable political situation, which on the inside, isn’t really that unstable (according to him), but which to the outside, looks like another South American bananas republic about to collapse again.

With the poor, and this was especially evident in La Paz, you would see women and children sitting by the streets begging for money. However as I was told later by the pilot, you shouldn’t feel sorry for these people because they deliberately do this. He shared a story how he offered a woman a job as a cleaner in his house, but she turned it down, because apparently she would make more money begging. I don’t buy that as an explanation for all the beggers, but certainly an interesting insight.

Bolivian Amazon tour

The resident crocodile on our Amazon tour

And the rest

  • Apparently, Venezuelan military planes fly in Bolivia! Hugo Chavez of Venezuela appears to be developing a confederate of allied nations, that look like another bloc of defiance against North America, taking on the leading role now that Cuba has its aged leader out of action.
  • I lost my ATM card a few days into my trip! I found this out when I had about two dollars on me, and without another credit card, you can pretty much understand the situation I was in…along with my counterfeit money issue in Iran, I think the only travelers worst nightmare I haven’t experienced, is losing my passport! I managed to get an emergency visa sent to my employers Bolivia office, but turns out that didn’t work – so I was reliant on about $2000 in wire transfers from family via the god send Western Union (thank God South America is cheap). Western Union is literally available anywhere – there are branches within post offices in Argentina, chemists in Peru, as well as banks and their own banks. At a $70 transfer fee, this is one of the travellers best resources when they are in trouble. On the flip side, I HATE YOU ST GEORGE BANK. It took me 20 minutes to try and call an after hours emergency number, and I ended up having to get my folks at home to call directory assistance, because their website is full of marketing crap. Don’t get me started on the rest.
  • I did a three day Amazon tour on the pampas, and I feel like I need to share my research with the other poor travellers trying to prepare.
    • Bolivia has apparently the cheapest Amazon tours with the most to see. All the tour agencies pretty much have cabins off the same river, and cost the same. Indigena has the cheapest; Inca tours the most expensive with mine middle of the range (Fluvial tours) – and for the same product
    • Flights to Rubbenareque can get cancelled at the last minute, which is the best way to travel and takes an hour (about 70USD); a 4×4 “jeep” takes 12 hours (about 55USD if you can get five people to share the ride); and the bus 20 hours (something like 10USD). Although the bus is cheaper – I’ve seen and heard from others why you shouldn’t; the jeep is a good experience to see the countryside but the bumpy roads can get very tiring, and make sure you leave early in the morning, because our driver post 12am starting getting very tired and was just trying to get there ASAP – which made the ride even more uncomfortable (at around 3 am, I felt he was purposely trying to hit the holes in the road, to keep himself awake!). The entire road to Rubbenareque can best be described as a wide goat track alongside a mountain cliff that drops 100 metres at times. The fact you have industrial trucks and buses traveling on a road that a car barely fits on, adds to the problem – if you are on the bus, to make way for other cars, there is a constant reversing and adjusting ON CLIFFS!! So that’s the reason the bus takes so much longer, and passengers fear for their lives. Actually, just ahead of us we witnessed a truck that fell off the road and crashed to the bottom – accidents are common.
    • As for contacting tour agencies, they all have websites that suck – it’s best to just turn up to La Paz or Rubbenareque and book there – they have tours running every day (we had one over Christmas).
      • The details for Indigena tours in La Paz, which you won’t find anywhere on the net, is the following:

      SAGARNAGA STREET (which is on the main tourist street filled with tours, at the very top of the road) NEAR TO ILLAMPU STREET N?Ǭ? 380 PHONE NUMBER 2110749. E-mail is indigenabolivia at hotmail dot com

      • They are the best because they are the cheapest, and the lady in La Paz is very helpful

And that’s all! Plenty more to say, but message me if I can help anyone trying to plan a trip; as for the wisdom I have acquired, lets do that over a beer 🙂

Bolivian Amazon tour

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