Rise of the App Economy

As a technical architect and a start-up enthusiast, part of my work is consulting organizations on how to go about implementing and monetizing their ideas. The past decade’s experience of working in this field, as well as having successfully built the product and development teams of two start-ups (which secured VC fundings) ensures that a lot of people are willing to share their ideas so that I can advise them on the implementation.

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Rackspace: The Case of Core Values

In the last days of September 2014, Rackspace customers were faced with multiple issues regarding service uptime, security concerns and network outages. The worst hit were the ones who were using Rackspace’s Chicago datacenter.

I happened to be one of those customers. This is my story.

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The difference between a Good vendor and a Great vendor

9 months into this business, here’s a gem of a lesson that I have learnt. It’s good to have vendor’s guilt (you need to be clued in on Amit’s blog for this term, he is going to has shed more light on this – Vendor’s Guilt). It keeps you on the edge, it makes you deliver on time. However, it’s great to learn how to control this feeling and not get overwhelmed by the same. On a more personal note –

One of the primary reasons for starting a services firm was to beat the run of the mill service providers that I see in the Indian IT Services market. Service providers need to be value adding rather than extracting value from the organization.

Being steered by this value, the focus has always been on adding value. Getting recognition and paid for providing this value is the differentiation between a good and a great vendor.

A month without Ad Block

As a person who literally lives off the internet, one of the first things I do when I get a new machine is install Chromium or Chrome and then go and install the Ad Block Plus plug-in. Fortunately, I am well past Windows, so I do not have to go to the trouble of removing IE!

Having said that, I thought, it would be interesting to see the world from the eyes of a non-power user and see the internet with it’s full glory … yes without an Ad Blocker!

How to Get Ad Blockers

For those of you who are new to this term – Ad Blockers, these are small plug-ins within your browser that stop Ads from displaying on any of the sites you visit. Those elements are not rendered at all! I strongly recommend Ad Block for this purpose.

Just follow the simple instructions on the link provided, and voila! No Ads … you can thank me later .. the web will be a different place for you. But enough of that, this is about seeing those Ads.

A World with Ads

As someone who runs Ads on his blog, I still do not bother to see Ads .. why? Because a lot of these Ads are poorly made … very few Ads these days are awesome enough to catch your eye or even better make you click! Why do we require Ads? Well to pay for all this cost of content creation of course!

Mainstream Media does it all the time! Why cannot the Internet follow suit? Put up Ads, write content, generate traffic … the simplest formula in the series of crazy get rich schemes :-)

What Prompted me to do this?

Sheer curiosity of checking how the Media agencies of the world are creating Ads was one. Some of the clients I was working with wanted to run Ads and I wanted to see how the Ads are going with the design of the site was another.

The third reason was the most important. I believe that users (yes, that’s you and me!) develop a certain immunity towards unpleasant experiences over time. Ads are generally ignored .. users learn to ignore them as time goes by, click through rates (CTRs) drop … that’s why it’s so important to keep changing your creatives!

The month starts!

I did this experiment in the month of February and ran it through till the middle of March. A little over 40 days. What did I observe? Well there are beautiful ads (naah, not Cilory ;-)), and the blockers are removing a bit more of the mark-up. Quite a lot of times an otherwise empty page suddenly looks fuller due to these display ads.

For e.g the Facebook layout looks marginally better with Ads. However, with Ads such as these, I’d still start running the blocker.

Ads on Facebook
I do not see how this creative is adding to building a list of leads!

Social Media networks were fine, the worst places I experienced without an Ad Blocker were surprisingly not Pr0n sites, but gaming sites! The sheer amount of wtf-ery in Ads that I saw on gaming sites was outstanding.

What took the cake was an Ad by Gurudas Kamat on my own blog asking for support in elections. Ughhh … one quick shift to Adsense and I blocked the entire category out. That Ad shook me :-) … I prompty turned out the Ad Blocker.

Conclusion

Before I experienced the internet without an Ad Blocker, I was happily running multiple Ads on my own site. After those 40 days, I trimmed down the number of Ads (I believe there are two simple Ads in the sidebar and thats that).

Setting up advertising to bear the cost of content creation is good, but if it is destroying the user experience (HBR are you listening?), is a no-no.

Information markets in Third World Economies

One of the great things that attracts investor capital is the ability of third world countries to show double digit growth. This story of almost all developing nations mean a scope for investments for other organizations present world-wide. Various countries have different economic policies, such as the open policy by China to attract huge FDI, and the partially open economy by India which invites FDI but limits the amount which can be withdrawn.

Why is this story selling for the past 5 or so years?

The answer is simple. Third World nations represent an inefficient market. A place where the buyers and sellers do not have access to complete information about the transaction. Since there is hardly any organized sector in such markets, there is virtually no analysis done on the varied types of transactions. This absence of information creates an inefficiency in the market … the simple act of saving each and every market transaction and making it available to the public creates the huge value of wealth maximization for both the buyer and the seller.

Wealth Creation by Information Symmetry

Imagine a scenario where a seller wants to sell a book for five dollars, it’s slightly used but the book is not easily available in the market. But the seller does not know that … the seller implicitly assigns a value of 5 dollars and expects the same amount in return. Now if a buyer who values the book a lot more than that were to find about the book, then he will finish the transaction at five dollars (even if he were ready to pay more). So what just happened back there? A book was exchanged for a lesser amount than what it would have fetched. Had the seller known that it could have fetched more (if he had access to that information), then the seller would have generated more wealth by selling at a higher price.

Information Markets

So in developing countries such as Brazil, Tanzania and India, the one sure shot formula for wealth creation is by creating an information market and making it available to the general public. We can also refer to information markets as Free online Classifieds, a site where people can post information about their buying and selling requirements.

We wanted to sell our six year old car and used a similar service to get the highest price for a used car. Access to such an information market not only ensured that we got the highest bidder, but also reduced the transaction hassles for us.

Conclusion

Any information market (such as an online classified) brings the buyer and the seller on the same platform and ensures that the seller gets a higher price and the buyer gets a chance to purchase the same price at a lower cost.

An information market is hugely successful wherever the market is fragmented and does not have any organized player.

An information market also increases the reach of local organizations.

Rise of Social Media in E-commerce

Rise of Social Media in E-Commerce

If you have an e-commerce start-up and are just starting your marketing outreach program, then this is a great infographic which can be of help.

Social Media can be used by organizations for ATL activities such as branding and for BTL activities such as promotions. The visual and witty element inherent in social media helps brands to sell well. The infographic above shares some stats which are quite high and make a marketing manager relook at Social as one of their channels.

For some sites such as Pinterest where the look of the product on display really matters, e-commerce becomes a natural extension. Go to any of the boards on the site and you will find atleast a series of photos which turn the social media site into a catalog of retail products.

Add to this, people love posing for pictures on the new products they have. There’s a whole element of showing off the latest purchase through unboxing videos, through product reviews.