Category: Business Strategy

Topics that have to do with business management such as how to position a product or service, mergers, partnerships, acquisitions, marketing or sales, reports about market size, anything having to do with money (investments or making money)

Categories
3D Information Business Strategy

Disrupting How People Collaborate

I've recently co-founded with Ignacio Mondine a new company, Two Way View. Two Way View will develop, manufacture and sell new products that enable "Transparent Collaboration."

Transparent Collaboration is what people do when they use Two Way View products to share, annotate and modify data, co-surf or otherwise have an experience that combines the digital and physical worlds. You might think that I’m talking about Augmented Reality, and there are related concepts, but Transparent Collaboration products don’t overlay digital data on the physical world. They allow me to use the physical world, directly, by way of a light pen or my fingertips on the touch-sensitive screen, to modify the digital world in real time.

The crucial difference and where we are disruptive, as you can see in this video, is how Two Way View products also allow the two people who are sharing and collaborating to see one another in real size, see where the other is looking, and to work together only an arm's length away, just as if they were on opposite sides of the same sheet of glass.

It's the fusion of a digital white board and telepresence system.

No one has proven that people will change their behaviors to use it, but I'm really excited about the highly disruptive technology this company is bringing to market. We might be in the position described by Clayton Christensen in his now classic book, the Innovator's Dilemna.  The giant companies that currently provide telepresence–Cisco and Polycom–are feeling the slow down in sales but, more importantly, they may have neglected to continue innovating within their markets; an upstart with a different approach and higher value comes in.

What lessons can we use from Christensen's masterpiece? I found this short essay on TechCrunch and it helped me to formulate Two Way View's answers with respect to Christensen's four key takeaways:

  1. Understand what is the source of your disruption. Is it a new product or a new way to distribute an existing product? Two Way View will use, to the best of its ability, the existing IT and telecommunication products distribution channels to introduce at least one new product.
  2. Pay attention to opportunities in new distribution channels. Two Way View could also distribute its products outside the traditional telepresence channels and, as an OEM, go through vertical market distribution channels. We will explore it.
  3. Start by marketing to the group of customers for which the incumbent in your industry has the lowest margin or the lowest interest to defend. Two Way View is keen to explore the markets in which large, complex 3D models are common place. The "traditional" data collaboration systems may be inappropriate in these use cases and lack the human element of collaboration between creative professionals.
  4. Remember these lessons when you are at the top. Stay tuned!

We are going to make an impact in 2013!

Categories
Business Strategy Events

The Horsemen from Above

As I prepare for CES2013, I have themes with which to search for companies I'll visit and to organize what I'll learn there. One of these filters I use when thinking about a company's relative importance is its size. Another is the value proposition (to me and to the world).

A third way to think of companies is their culture. This one goes in many dimensions (East/West, Open/Proprietary, Off the books R&D vs. InHouse, etc), and is the topic of this post because I read a piece posted yesterday on TechCrunch about the importance of Samsung Electronics.

It's no surprise that business culture is very closely tied to the culture in which the company's employees work and live. For most people who have not lived and worked there, Korean business culture is very difficult to decode. This summary, on a website for Danes working in Korea, really seems to capture the essence:

The Confucian mind-set is a fundamental part of Korean culture. In accordance with Confucian principles, people of higher rank or age are treated with an explicit respect, both socially and in business matters. Employees of Korean companies have a strong sense of loyalty towards their employer and in any situation of conflict they are expected to seek confirmation or take the side of the employer regardless of the logic behind the arguments.

Confucian emphasis on education can be felt throughout Korean society. Koreans are in general very well educated and attach much importance to academic excellence and degrees obtained. The admission examinations for Korean universities are important events as the result of the examinations determine the future of thousands of young Koreans. Networks established during the high-school and college years often play a big role in the following career and throughout life.

It seems that spirituality is a theme in this post!

In the New Testament, the four horsemen of the apocalypse ride white, red, black, and pale horses. They represent Conquest, War, Famine, and Death, respectively. In 2011, as some predicted the Apocalypse in 2012, the metaphor was used in the business and financial press to analyze the impacts of businesses on the future of technology.

The TechCrunch post suggests that Samsung Electronics is reaching the same level of importance in terms of influencing emerging technology  trends and developments as are Google, Apple, Amazon and Facebook (some analysts I read on this topic do not include Facebook on the list and, in its place, have found IBM to be a top technology influencer in 2013). Hence, Samsung would be the fifth horseman. If the goal is to emphasize how important a company is on mobile platforms, then Samsung is more important than Amazon and this list could be kept to four. And, in terms of size, they hit the mark. The New York Times reports that Samsung will reach $8.3B in profits in the quarter that ended December 31, 2012.

The problem that Western analysts face in deciding where to position Samsung is that they have low insights into how the company has achieved its success to date, and what Samsung is planning. Given the difference in corporate culture, it is difficult, as difficult as predicting how spirituality impacts other domains, for those surveyed for these rankings to calibrate how Samsung will shape mobile platforms in the next 12 to 18 months.

While at CES, I will be spending a lot of time in the Samsung Electronics booth, as well as those of many other Asian companies, and will continue my quest to better understand how they, despite their business cultures being very different from American and European, are going to impact mobile business opportunities, particularly in Augmented Reality fields, in the next year.

Categories
Augmented Reality Business Strategy

Get Quantitative

Models developed by industry analysts frequently predict astronomically large growth for Augmented Reality. A good report has to have a lot of illustrative examples, describing the richness that AR is capable of delivering and forecasting how this will evolve over the years in the forecast period.

I don't intend to publish a full market research report about AR because, at the speed the business is evolving, it will be out-of-date before it is completed. This is primarily because market and trend forecasting aren't the only services I provide and my projects don't all need the quantitative proof to be successful.  That said, regularly and reliably measuring the growth of AR and sharing those metrics with the world are very much on my list of goals for the near future.

In May 2012 I began the process of getting quantitative about mobile AR by inviting a half-dozen of my friends in AR companies to share a little of what they are doing. In a survey I asked questions about:

  • What AR metrics are available?
  • When did you begin capturing mobile AR metrics?
  • How are these metrics captured?
  • Who uses (what is the purpose of gathering) these metrics?
  • Who has access to them?
  • How long are they stored?
  • What are the conditions or agreements with the users or content publishers?

I learned that there is no consistency in how metrics are collected or used in 2012. Maybe that's good news because it permits us to develop new methods and avoid having to re-engineer systems.

In preparation for a new campaign on mobile AR metrics, their importance and methods for acquiring and comparing them, I've been gathering my own examples of how metrics are gathered and communicated.

I like the infographics approach. The one I provide here was issued by Blippar about the campaign they did with Shortlist magazine but I learned about it when it was published in this post by Onno Hansen the author of the IDentifEYE blog about AR and Education.

The fact that nearly 10% of the audited circulation (over 51K out of 529K) actually used the application/features, is not all that surprising when you understand that the target audience of this publication, "high class city-dwelling men," is highly technology-centric. They also like a good deal. The weekly print media publication is distributed free at newsstands in UK.

One more indicator that these guys like a good deal is click through rate of 13.4%. This is phenomenal for a magazine, I think. If you have other examples of high CTR for print media, I'd love to hear about them.

Categories
Augmented Reality Business Strategy Standards

Three Giants (and the Hobbit)

In Greek Mythology, the Hekatonkheires were children of Gaia (Earth) and Uranus (sky). They were three incredibly strong giants, each had 100 hands and 50 heads, and their ferocity surpassed that of all the Titans.

In today's information universe, at least in this version of the story, they are reincarnated and will have the option of doing good, defeating evil and helping the planet to become a better, richer place for human beings. There are many beautiful analogies between Greek Mythology and my current thinking, but I will limit myself to only the Giants. The three can be none other than Apple, Microsoft and Google.

For years we've heard rumors and seen signs in the patent filings (first in Feb 2010, then here, and more recently, here and here) that at least a few people within Apple are working on displays that would provide users the ability to view 3D without glasses or to wear displays on their heads at eye level, otherwise known (in my lingo) as "hands-free displays." Of course, these could be useful for a variety of applications not limited to Augmented Reality, but depending on their features, and how/when the content provided to them appeared, we can assume that these devices would (will) at least be suitable for certain mobile AR applications.

A year ago, when rumors began to circulate about Google's now widely acknowledged and publicized eyewear project (Project Glass), my anxiety about Apple coming out with a new product that would once again transform the form factor of mobile computing (a good thing), as well as further (bad news) its closed and proprietary, and very valuable, useful developer ecosystem, lessened.

At least the end users, I told myself, will have a choice: an Android alternative to iOS-based hands-free displays and, instead of one proprietary platform controlling the universe, we will have two. Google will provide Android-friendly and Android-based eyewear for content and experiences that are published in what will probably begin as a Google proprietary format, while Apple will provide different (or some similar) content and experiences published only in its proprietary format.

At least with two Giants there's no doubt there will be a war! My fear remained that one of the two would win and we would not benefit from the future of open and interoperable AR content and experiences, based on open interfaces, standards and wild flashes of innovation emerging out of nowhere but catching on (one can suppose this will happen more easily in open ecosystems that in closed ones).

My hopes were boosted when on November 13 Vuzix finally disclosed its answer to ProjectGlass, the M100. The announcement that the M100 won the CES 2013 Design and Engineering award (in the Wireless Handset Accessory Category) got picked up by some big bloggers here, here and here as well as hundreds of smaller readership sites. I think of Vuzix as the Hobbit in this case. Don't worry, there were few giants in Tolkein mythology so I'm not going to go far here!

When, earlier this week the news broke (see Guardian's article and the Slate.com piece) that Microsoft has been granted a patent on its own development project (no doubt with the help and support of Nokia) resembling those of Apple and Google, I shrieked with delight!

A third giant entering the ring has two impacts for all end users, for all the content in existence already and to come, and for our AR Standards Community activity.

First, and most directly, it puts content publishers, the likes of Goliaths like CondeNast (as well as the micro-publishers) in a position of having to support–in their future AR-ready content catalogs–multiple display platforms which is (I hope) prohibitively expensive. The content publishers will be able to unite and encourage the display providers to open at least some interfaces to common code and over time maybe even have full interoperability. In an ideal scenario, the owners of content around the world, beyond the three giants themselves, will simply ignore the three competing platforms until a set of simple tags and functionality are agreed upon and implemented across them.

Second, the work our community began in summer of 2012 on the requirements Hands-free AR devices will have the benefit of more open minds, people who are working on their own hardware and software that want to be heard and express their vision of an open world while the war of the Titans is raging. The parallel, I believe, is that today's innovators and entrepreneurs who want to develop totally new information experiences in the real world, unlike anything we've had or seen before and for the benefit mankind, are like the Olympians of Greek mythology. Perhaps, by having the three Giants agree on some level, if not completely, about open Augmented Reality, the doors for the future of AR for the "rest of us" will open.

And, there another reason for mentioning the Greek Mythology and my hope the myth of the Giants is not entirely re-enacted in our days. In my modern version, the three giants are allowed to come out and play nice with Cronus. If your Greek Mythology is as rusty as mine, I will share with you that during the War of the Titans, the Giants helped the Olympians overthrow the Titans, of whom Cronus was king. In modern day, Khronos Group is a strong supporter of open AR through open, royalty-free specifications of interfaces for hardware in most of our mobile devices.

Categories
Business Strategy Research & Development

Who is Leading Us Indoors?

Financial analysts' blogs are not on my list of top reads this summer so I was surprised to find myself reading this fresh post on SeekingAlpha. It is a thorough research study on the potential revenue to be generated from Nokia's patent portfolio. After describing how much Nokia has invested in R&D in the past 10+ years, the headline "Location Based Mapping Patents Are Hidden Jewel of Nokia Patent Portfolio" appears and the analyst jumped directly to the topic of indoor positioning.

Indoor positioning has been an increasingly important topic for my research. I'm not alone in discovering that there will be a large value stream to come on the basis of positioning users more accurately indoor (as well as outdoor) so the potential for innovation in this space is going to be huge. Well, that is if there are not already patents protecting such innovations and their future use. 

I found this post on Forbes to shed a lot of insights into the thoughts I had when I saw the Nokia and Groupon deal, creating Groupon Now! Of course, the Forbes post is more in depth and valuable. Here are a few points that this blogger extracted from the Grizzly Analytics report published in December 2011:

Of the five leading companies (Google, Apple, Microsoft, Nokia and RIM), Krulwich sees Microsoft and Nokia as the most likely to challenge Google in indoor positioning. He expects Microsoft and Nokia to launch a service sometime in 2012, perhaps tagged to Microsoft’s “Tango” Windows Phone update. Both companies have significant experience in indoor positioning. Microsoft has researched how to determine location using special radio beacons as well as by analyzing Wi-Fi signal strength. It has also experimented with what Krulwich calls movement tracking. That involves tracking a device as it moves away from a known location, such as a door to a building (which can be pinpointed via GPS because it is outdoors).

Beyond its research, Microsoft holds granted patents in indoor positioning. Krulwich counted at least five Microsoft patents related to determining phone location using wireless access points, radio beacons, device movements and other radio signals.

Nokia’s indoor positioning work is equally sophisticated with patents going back to at least 2006. In September 2006, Nokia filed a patent on “Direction of Arrival” detection. That strategy leverages ultra-wideband (UWB) radio technology to estimate location. In fall 2007, Nokia also filed three patents related to determining location via Wi-Fi signal strength.

Although Krulwich's prediction that Microsoft and Nokia would launch an indoor positioning service in 2012 has not yet been disproven, it's clear that Google has continued to make more noise around indoor than any of the other potential leaders. If Microsoft and Nokia are going to be battling out the indoor future with the likes of Apple, Google/Motorola, Qualcomm, Research in Motion, among others who have also written or read the writing on the walls, Microsoft and Nokia will need to acquire or partner with those who have a much higher rate of success in the mobile market.

Where does all this interest in the indoor mobile positioning space lead us? To finding and working with small innovative companies that have the potential to either implement well on the patents of others, or to generate new intellectual property for indoor positioning and, in either case, be acquired by one of the five major companies leading users of mobile services indoors.

Who are you and how can I help?

Categories
3D Information Business Strategy

Business Models for Indoor Positioning

Given its low penetration in today's smartphone-focused world (16% of 2011 smartphone sales, down from 33% in 2010, according to IDC) and its recent difficulties, Nokia is not frequently listed as a technology leader in 2012. But it is too soon to dismiss the company entirely.

Its deal with Groupon is worthy of note as an alternative to relying on device sales as a future revenue model.  Though it's not the first company to think of advertising as a business model, and advertising is my least preferred business model, having a robust indoor and close-proximity-to-point-of-sale technology will be highly strategic and might change advertising into something less distasteful.

The "Groupon Now!" service for Nokia Lumina smartphones (currently only available in the United States) works outdoor as well as indoor. The really big potential is to use the device's precise location to target highly appropriate messages to its owner/user. When I say "highly appropriate" I mean to target a notification based on so many factors about the user's current situation, that the advertising becomes an anticipatory service.

An "anticipatory service" is basically anything that is provided to a user just prior to their needing it in daily work or personal life in a way that it provides unprecedented levels of benefit. An existing anticipatory service is a routing service on GPS devices that takes a user around a traffic jam before you arrive in the traffic itself. Another is an alert when you are approaching the expiration date of your contract with an important merchant or service provider. As simple and common place as anticipatory services may seem today, they are not (often) based on user location and they rarely alert a user at the point of sale (i.e., a location).

Nokia's CTO office had its eye on Indoor Positioning-based services many years ago. When Nokia acquired Gate5 and Navteq it significantly increased its assets in the location and positioning technology space. Here's a 2009 video of Brett Murray talking about anticipatory services driven by indoor positioning.

If there's a company that needs to adopt a new business model, it has to be Nokia. I hope that this company's indoor positioning technology portfolio will help it either directly, through relationships directly with the providers of anticipatory services, like Groupon, or indirectly by licensing its patents to others who will be leveraging indoor position as one of the key triggers for notifications.

It will just need to do it quickly in order to beat Apple and Google to the punch line.

Categories
Business Strategy Innovation

Life is too short to be busy

In the past two months, there has been little time for idle thoughts about Spime Wrangling. The expression "Dawn-to-Dusk" to describe how hard a peasant worked in the fields in the middle ages or a worker in a South Asian sweatshop doesn't do justice to how fully engaged I've felt during the 2nd quarter of 2012. I've had to devote myself to my other (non-blogging) duties because I've been wrangling new spimes, while traveling. At least, that's what I've told myself.

I'm back. I'm still wrangling, and traveling, but I've readjusted my perspective on the "madness," the feeling of anxiety that something important might be slipping away. What order I may have been (or will be) able to impose on the world as we know it cannot be measured. Can't be done. It's like trying to quantify the size of the ocean or the impact that our sensor-izing the world (putting sensors everywhere) will have on society.

Don't try! The way spimes work (continuously producing, automatically, effortlessly) we are guaranteed that there's not just "something" that is escaping our attention while our attention is focused elsewhere, we are sleeping or otherwise relaxing, but rather, there's more that's escaping us than we will ever know.

Sounds like I'm heading into another of those "accelerating pace of change" pieces but I'm actually going the other way. Tim Kreider's June 30 New York Times essay, The 'Busy' Trap summarizes beautifully the point that I, and I think many other people, feel. The essay ends with the short sentence that I've used as the title of this post. Stop reading this post. Take a minute to absorb Kreider's suggestion that a break is in order.

Despite cool temperatures, overcast skies, it's summer in Western Europe. Time for holidays. Millions of people are, whether they choose or not, going to feel their output, perhaps even their productivity, drop sharply. Either by choice, precisely as Kreider has done, or by default, because so many others have gone for some idle time on the beach, we are entering the slow period of the year. And it is overdue! I will be using it to digest and to summarize the trends I've seen in the first 6 months of this year.

Categories
Business Strategy True Stories

Searching for a Viable Business Model

Customers value what they pay for and (usually) pay for what they value. If customers do not pay for value, is the business model at fault?

This basic question is at the root of a current polemic facing Facebook. Companies in other markets as well, for example AR, must answer the question or die. I feel that the business model is not always the root of the problem. The take home message of this post is that just because a business model doesn't work for one company the first time its tried doesn't mean the same or a similar system will fail for another company in a different geographic context, or at another point in time, after users have been through an educational process.

Three years ago, around 2 PM in the afternoon of February 11, 2009, I sat in the audience of a session on social networking at the Mobile World Congress. I had already been focusing on mobile social networking for several years (since mid-2006) and remember its "birth" as a mobile Web site and an iPhone application that made it easier to upload photos and notes, and to exchange messages on the site, and a look-up function for phone numbers.

Facebook mobile was a year "old" and I had been following along since its birth in 2008. I wasn't alone. The rest of the world read about Facebook's rapid mobile growth in a mashable blog post, Gigaom blog post and an article on BusinessWeek.com.

At that time, Facebook operated these mobile services worldwide:

The number of users and the options for accessing the social network were quite similar in size and approach to where the mobile AR industry is today.

In the nine months that followed from January 2009, when there were a mere 20M mobile Facebook users, to September 2009 when the network had reached 65M mobile users, Facebook implemented what it called the "Facebook Credits" platform. It is now available using 80 payment methods in over 50 countries.

Facebook was alert to the fact that it was not monetizing user traffic and open to experimenting with business models. The PaymentsViews post on August 25, 2009 (which I've preserved below in case of catastrophic melt down), shows just how hard it was to use on mobile and how creatively Facebook pushed its Credits program.

For a variety of reasons, Facebook failed in its first attempts to monetize the mobile platform. First, there was and there remains friction in the mobile payments system. We've learned since the introduction of smartphone applications that even if it is phenomenally easier on a smartphone than on a feature phone, users don't want to take time to click through multiple screens to authorize a payment. There are dozens of companies that are working to make payments easier on mobile.

Then there was just a lack of creativity in the goods which were offered. In Japan, precisely the same business model worked relatively well and mobile social networks flourished where Facebook could not break in because the Japanese youth culture was more mobile saavy and the digital goods were far more innovative, dynamic and valuable to the customers. Other reasons for abandoning the Facebook Credits system include that the desktop business model is so lucrative.

in February 2012, a piece in the New York Times reminded us that although it now has more than half of its 845 million members logging into Facebook daily via a mobile device, it is still not monetizing its mobile assets.

If a company with an estimated pre-IPO valuation of $104 Billion is unable to figure out a strong business model for mobile social media, where are AR companies going to look for their cash cow?

I predict that the answer will include something very close to Facebook's original mobile Facebook Credits concept.

The reasons I feel strongly in the future of a mobile commerce for information model are that the presentation of the digital asset will be more refined and the timing for the business model will be completely different. When companies will offer their information assets in a contextually-sensitive AR-assisted package for a fixed increment of time and in a limited location, the users will know what they're getting and only purchase what they need.

In addition, users will have been through several generations of commercial "education" on mobile platforms. in the months and years prior to digital assets (information, games, content) being sold in small increments, users will have learned that they can purchase their transportation fares with their devices, their movie tickets and even their beverages in a night club.

While it will certainly not be the only business model on which the mobile AR services and content providers will need to rely, the tight relationship between the user's willingness to pay for an experience and the value provided will bring about repeat usage and, eventually, widespread adoption.

———————————————————-

In case of meltdown of this company's site, I have taken the liberty of putting the full text of PaymentsViews post below:

Purchasing Facebook Credits with Zong Mobile Payments

by Erin McCune on August 25, 2009

At Glenbrook we believe that social eCommerce and virtual currencies are the new frontier of payments. Person-to-person transfers, charity donations, and micropayments for virtual goods (e.g. games, music, e-books, etc.) are exploding within social networks and as the 800-pound-gorilla in the social networking space, all eyes are on Facebook. Estimates vary, but $300-500 million in transactions may happen within Facebook in 2009 (note 1), although thus far precious few of those transactions are funded by a native Facebook payment mechanism.

A couple days ago I decided to send my colleague Bryan a birthday gift on Facebook and was startled to discover that Facebook now as an option to buy Facebook Credits, Facebook’s fledgling virtual currency, via mobile phone using Zong (more from Payments Views on Zong here).  Developers on Facebook have accepted mobile payments for some time now, from Zong as well as other mobile payment providers, but the Facebook Gift Shop and Facebook Credits are Facebook services, not a developer product. And up until now (note 2) Facebook has only accepted credit card payments.

Being the payment geek that I am, I opted for the mobile phone payment option and took screen prints of the process flow. And then I wanted to compare the check out process via phone to the credit card check out process, so I bought Bryan a second gift (lucky Bryan) and took more screen prints. Continue reading to see a comparison of the check out process for the two payment methods.

But first, a little background…

The (Continuing) Evolution of Facebook Payments

  • There has been a long standing Facebook Gift Shop where users can purchase virtual gifts for one another for $1 each. (Some sponsored gifts are free.) Users purchase “gifts” with a credit card: MasterCard, Visa, AmEx.
  • December 2007:  Rumored that beta test of payments system for applications was imminent. Developers were instructed to sign up to participate (and had to sign an NDA).
  • November 2008: Converted gift shop dollars to “credits.” Each $1 buys 100 credits, so gifts that used to cost $1 are now priced at 100 credits. Still pay for Facebook Credits with a credit card.
  • March 2009: Facebook claims to be “looking at” a virtual currency system.
  • April 2009: Facebook introduces a limited pilot program whereby users can give credit to one another. If one user “likes” content that one of their friends has posted, the user can give them a virtual tip, using Facebook Credits. The only thing you can do with the credits is buy Gifts or give them to your other friends.
  • May 2009: Facebook announces “Pay With Facebook” a new feature that will enable users to make purchases from Facebook application developers. Funding is via Facebook Credits, which can be purchased only via credit card.
  • June 2009: Facebook began testing payment for virtual goods within Facebook using Pay With Facebooka nd Facebook Credits, starting with the GroupCard, Birthday Calendar, and MouseHunt applications.
  • August 2009: Facebook announces that the Gift Store is conducting an “alpha test” of non-Facebook gifts in the Facebook Gift Shop, including some physical goods (e.g. flowers, candy).
  • August 2009: It is now possible to purchase Facebook Credits with your mobile phone, via Zong.

Purchasing Facebook Credits via Mobile Phone

(Note: click on individual images to see larger version)

When I clicked on Bryan’s Facebook profile I was reminded to wish him Happy Birthday, and optionally, buy him a “gift”

Picture1

Up until now, Facebook has only accepted payment via Credit Card for Gift Credits. But now it is possible to pay with your mobile phone. Note that the “pay with mobile” option is listed first.

Picture2

I could select whether to purchase 15 ($2.99), 25 ($6.99), or 50 ($9.99) Facebook Credits and then prompted to enter my mobile phone number.

FB Payments Picture3

Meanwhile, I received a SMS text message from Zong providing a PIN number, confirming a payment of $2.99 to Facebook, and instructions on how to stop the payment or get help:

Zong Text Msg 1

I entered the PIN number provided, waited a few moments, and then got a confirmation screen.

FB Payments Picture4

Finally, I received two confirmation SMS text messages from Zong (not from Facebook):

Zong Text Msg 2

Zong Text Msg 3

Purchasing Facebook Credits with a Credit Card

For Bryan’s second gift (a virtual beer, I am sure he would have preferred a real one!) I opted to pay with a credit card. Note the difference in price per Facebook Credit (more on that in a minute).

FB CC Payment Picture1

Next I entered my card details and was immediately presented with a confirmation screen. The process is definitely quicker (and cheaper) if you purchase via credit card.

FB CC Payment Picture2

Finally, when I purchased via credit card I received a confirmation email directly from Facebook (whereas with the mobile phone payment I received the confirmation via SMS text from Zong, rather than Facebook).

FB CC Payment Picture3

Pricing Varies by Payment Method

When I paid with my mobile phone the price per Facebook Credit was twenty cents. I only paid ten cents per Facebook Credit when I made my purchase with a credit card. Zong charges the merchant (in this case Facebook) a higher processing fee than the credit card companies do. This is not uncommon. Payments via mobile phone are typically for virtual goods (ring tones, avatar super powers, games, etc.) with relatively low cost of goods, thus merchants are less price sensitive. Once they’ve done the coding, every incremental sale above and beyond development costs is profit. Mobile payments for virtual goods cost between 20-50% of the transaction amount, with most of the fee being passed on to mobile phone carriers. Given this pricing structure, it is not surprising that Facebook charges more per Facebook Credit when you buy with your mobile phone. It is unclear how much of the net fee application developers receive and how much Facebook retains, and if the split varies depending on payment method.

Other Forms of Payment Within Facebook

Keep in mind that Facebook Credits are just one way of purchasing goods within Facebook. Today, Facebook application developers monetize their games and other applications by accepting payment directly using PayPal, Google, Amazon FPS, or SocialGold. Or developers may opt to receive direct payment via mobile phone via Zong, Boku, or another mobile payment provider. Virtual currencies that can be used across a variety of social networks and game sites include Spare Change and SocialGold. It is also possible to earn virtual currency credit by taking surveys and participating in trials offered via Super Rewards, OfferPal Media, Peanut Labs and many others. And finally, game developers in particular, often accept payment via a prepaid card sold in retail establishments, such as the Ultimate Game Card. The social and gaming web is exploding with virtual currency offerings, yet thus far no one model or payment brand dominates.

We’ll continue to monitor Facebook’s payment evolution and track the development of social eCommerce here at Payments Views. In the meantime, you might enjoy these related Payments Views posts:

Notes

  1. Facebook transaction value estimates here.
  2. Caveat: I am not quite sure when Facebook started accepting Zong – sometime after June, as that was when I last checked in. I suspect, but haven’t confirmed, that the change was made in conjunction with last week’s announcement that the Gift Store is conducting an “alpha test” of non-Facebook gifts in the Facebook Gift Shop, including some physical goods (e.g. flowers, candy). If anyone out there knows for sure, please let us know in the comments.

end of full text here.

Categories
Augmented Reality Business Strategy

Augmented Real(ity) Estate

I would like to live in a world in which the real estate agent [information finder (an "explorer" that uses AR)] and the transaction platform are all (or nearly all) digital.

Funda Real Estate, one of the largest real estate firms in the Netherlands, was (to the best of my knowledge) the first Layar customer (and partner). Initially developed in collaboration with our friend Howard Ogden 3 years ago, the Funda layer in the Layar browser permits people to "see" the properties for sale or rent around them, to get more information and contact an agent to schedule a visit.

A few hours ago, Jacob Mullins a self-proclaimed futurist at Shasta Ventures, shared with the world on TechCrunch how he came to the conclusion that real estate and Augmented Reality go together! Bravo, Jacob! I think the saying is "In real estate there are three things that matter: Location. Location. Location." Unfortunately, none of the companies he cites as having "lighthouse" examples are in the real estate industry.

Despite the lack of proper research in his contribution, property searching with AR is definitely one of the best AR use cases in terms of tangible results for the agent and the user. It's not exclusively an urban AR use case (you could do it in an agricultural area as well) but a property in city-center will certainly have greater visibility on an AR service than one in the country. The problem with doing this in most European countries is that properties are represented privately by the seller's agent and there are thousands of seller agents, few of whom have the time or motivation to provide new technology alternatives (read "opportunity").

In the United States, most properties appear (are "listed") in a nationwide Multiple Listing Service and a buyer's agent does most of the work. Has a company focused and developed an easy to use application on top of one of the AR browsers (or an AR SDK) using the Multiple Listing Service in the US?

My hypothesis is that at about the time the mobile location-based AR platforms were introduced (mid-2099), the US real estate market was on its way or had already imploded. People were looking to sell, but not purchase property. 

This brings up the most important question neither raised or answered in Jacob's opinion piece on TechCrunch: what's the value proposition for the provider of the AR feature? Until there are strong business models that incentivise technology providers to share in the benefits (most likely through transactions) there's not going to be a lot of innovation in this segment.

Are there examples in which the provider of an AR-assisted experience for Real Estate is actually receiving a financial benefit for accelerating a sale or otherwise being part of the sales process? Remember, Jacob, until there are real incentives, there's not likely to be real innovation. Maybe, if there's a really sharp company out there, they will remove the agents entirely from the system.

Looking for property is an experience beginning at a location (remember the three rules of real estate?), the information parts of which are delivered using AR. Help the buyer find the property of their dreams, then help seller component, and YOU are the agents.

Categories
Augmented Reality Business Strategy

Augmented Reality SDK Confusion

I don't feel confused about AR SDKs but I wonder if some of those who are releasing new so-called AR SDKs have neglected to study the AR ecosystem. In my depiction of the Augmented Reality ecosystem, the "Packaging" segment is at the center, between delivery and three other important segments. 

Packaging companies are those that provide tools and services to produce AR-enriched experiences. Think of it this way: when content has been "processed" through the packaging segment, a user who has the right sensors detecting its context receives ("experiences") that content in context, or more specifically, in "camera view" (i.e., visually inserted over the physical world), as an "auditory" enrichment (i.e., a sound is produced for the user at a specific location or context) or "haptic" enrichment (i.e., the user feels something on their body when a sensor connects with some published augmentation that sends a signal to the user). That's all AR in a nutshell.

In the packaging segment we find many sub-segments. This includes at least the AR SDK and toolkit providers, the Web-hosted content publishing platforms and the developers that provide professional services to content owners, brands and merchants (often represented by their appointed agencies).

Everyone, regardless of the segment, is searching for a business model that will work for Augmented Reality in the long run. In order for value (defined for the moment as "something for which you either pay attention to or pay money for use") to flow through an ecosystem segment it's simple: you must have those that are buying-with their time or their money-and those who sell to the buyers. With the packaging segment in the middle, the likelihood is high that things that matter in the long run, that generate revenues, will involve this segment.

The providers of software development tools for producing AR-enriched experiences (aka AR SDKs) all have the same goal (whether they announce it or not). The "game" today, while exploring all possible revenue streams, is get the maximum number of developers on your platform. If you have more developers, you might get the maximum number of projects executed on/with your platform. It's the number of projects (or augmentations) that's the real metric that matters most. The SDK providers reach for this goal by attracting developers to their tools (directly or indirectly, using contests and other strategies) and/or by doing projects with content providers themselves (and thus competing with the developers). Cutting the developer segment out is not scalable and cannibalizing your buyers is not recommended either, but those are separate subjects.

For some purposes, and since it drives the use of their products, packaging companies rely on and frequently partner with the providers of enabling technologies, the segment represented in the lower left corner of the figure. More about that below.

Since we are in the early days and no one is confident about what will work, virtually all the packaging segment players have multiple products or a mix of products and services to offer. They use/trade technologies among themselves and are generally searching for new business models. And the enabling technology providers get in the mix as well.

The assumption is that if a company is using an SDK, they are somehow "locked in" and the provider will be able to charge for something in the future, or that, if you are a hardware provider, your chips will have an advantage accelerating experiences developed with your SDK. If manufacturers of devices learn that experiences produced using a very popular SDK are always accelerated with a certain chipset, they might sell more devices, hence order more of these chips, or pay a premium for them. This logic probably holds true as long as there aren't standards or open source alternatives to a proprietary SDK.

Let's step back to a few years ago when AR SDKs were licensed on an annual or project basis to developers. The revenue from licensing SDKs to third party developers on a project basis is the business model that was a primary revenue generator for computer vision-based SDK provider AR Toolworks, and annual licensing was relatively successful for the two largest companies (in terms of AR-driven revenues pre-2010), Total Immersion and metaio.  These were also the largest revenue generating models for over a dozen other less well-known companies until mid-2011. That's approximately when a "simple" annual or per-project licensing model was washed away, primarily by Qualcomm.

Although it is first an enabling technology provider (blue segment), Qualcomm released its computer vision-based SDK, Vuforia, with a royalty- and cost-free license in last days of 2010 and more widely in early 2011. To compound the issue, Aurasma (an activity of Hewlett Packard since the Q32011 HP acquisition of Autonomy) came out in April 2011 with their no-cost SDK. Qualcomm and Aurasma aren't the first ones to do this. No one ever talks about it any more, but Nokia Point & Find (officially launched in April 2009 after a long closed beta) was the pre-smartphone era (Symbian) version. It contained and exposed via APIs all the various (visual) search capabilities within Nokia and was released as a service platform/SDK. This didn't catch on for a variety of reasons.

So, where are we? Still unclear on why there are so many AR SDKs, or companies that say they offer them.

AR SDKs are easily and frequently confused with Visual Search SDKs. Visual Search SDKs permit a developer to use algorithms that match what's in the camera's view with images on which the algorithm was "trained," a machine learning term for processing an image or a frame of video and extracting/storing natural features in a unique arrangement (a pattern) which, when detected again in the same or a similar arrangement will produce a match. A Visual Search SDK leaves what happens after the match up to the developer. A match could bring up a Web page, like a match in a QR code scanner does. Or it could produce an AR-enriched experience.

Therefore, Visual Search can be used by and is frequently part of an AR SDK. Many small companies are providing "just" the Visual Search SDKs: kooaba, Mobile Acuity, String Labs, Olaworks, milpix, eVision among others. And apparently there's still room for innovation here. Catchoom, a Telefonica I&D spin-off that's going to launch at ARE2012, is providing the Visual Search for junaio and Layar's Vision experiences.

Another newcomer that sounds like it is aiming for the same space that Catchoom has in its cross hairs (provides "visual search for brands") is Serge Media Corporation, a company founded (according to its press release) by three tech industry veterans and funded by a Luxembourg-based consortium. The company introduced the SergeSDK. Here's where the use of language is fuzzy and the confusion is clear. The SergeSDK Web page says that Aurasma is a partner. Well, maybe HP is where they are getting the deep pockets for the $1M prize for the best application developed using their SDK! If Aurasma is the provider of the visual search engine, then the SergeSDK is actually only a search "carousel" that appears at the top of the application. Sounds like a case where Aurasma is going to get more developers using its engine.

Hard to say how well this will work in the long run, or over just the next year. There are few pockets deeper than those of Google and Apple when it comes to Visual Search (and AR). These companies have repeatedly demonstrated that they have been incubating the technologies and big plans are in store for us.

All right. Let's summarize. By comparison with other segments, the packaging segment of the AR ecosystem is a high risk zone. It will either completely disappear or explode. That's why there are so many players and everyone wants to get in the action!

Stayed tuned as in the next 6 months this segment undergoes the most rapid and unpredictable changes when Google and Apple make their entries.

Categories
2020 Business Strategy

When the Title Fits, Wear It

A GigaOM blog post that Gene Becker tweeted about today reminded me that many of those who were "traditionally employed" in past years are setting up their web sites, starting their blogs, joining the ranks and giving the "independent" way of life a try. According to MBO Partners there are over 16 million freelancers, consultants and other independently employed people in America today. By 2020, the number is expected to quadruple to approximately 65 million.

Who are these people, I ask myself? The CEO of MBO Partners (quoted in the GigaOM blog) reports that seven out of ten of those interviewed in a survey believe they are "experts in their field" and have advanced skills and education. Unfortunately, this statement is not supported with hard data or a report.

In my opinion, only clients (i.e., those who hire consultants) are in a position to decide if a consultant is an expert worthy of their fee. Are these people who MBO Partners interviewed successful? To be a successful consultant requires a lot of focus on clients while, at the same time, being vigilant, reading the tea leaves, to detect emerging trends and to explore new directions.

After 21 years working as an independent, it's a topic about which I am qualified to have opinions.

The most important qualifications of an independent in any field are to be passionate about a domain, to pay attention to detail, to be discrete about what is said (and what is omitted) and, for a consultant, to have a strong desire for the client to succeed. The last of these, to prioritize the client's success, is an essential component of a consultant's character that carries risk. Often clients can describe what they need and, together, the goal can be reached, the product shipped, the service proven valuable. But sometimes the client fails for reasons outside a consultant's control, regardless of the consultant's contribution to a company or project. Sometimes the client succeeds but doesn't recognize or feel the need to acknowledge the role of the consultant. Few of the other consultants who I've helped get started and with whom I've worked can live with these and other risks of being independent. 

Having grown accustomed to managing risk (and balancing other aspects of professional independence that I won't go into here), the title of "consultant" no longer reflects how I feel, who I am. To me, the title of "Spime Wrangler" captures better the element of uncertainty with which I am comfortable and the strong desire to pursue the unknown, to tackle or wrestle with the Spimes.

How many of those who decide to hang out their shingle between now and 2020 will share the sense of adventure that makes me leap out of bed each morning? I hope that those who do, whoever they are, will assume the title of Spime Wrangler as well.

Categories
Augmented Reality Business Strategy

Between Page, Screen, Lake and Life

In my post entitled Pop-up Poetry I wrote about the book/experience Between Page and Screen. Print, art and AR technology mix in very interesting ways, including this one, but I point out (with three brilliant examples) that this project is not the first case of a "magic book."

Like many similar works of its genre, Between Page and Screen uses FLARToolKit to project (display) images over a live video coming from the camera that is pointed at the book's pages. Other tools used in Between Page and Screen include the Robot Legs framework, Papervision for 3D effects, BetweenAS3 for animation and JibLib Flash. Any computer (whose user has first downloaded the application) with a webcam can play the book, which will be published in April. Ah ha! I thought it was available immediately, but now learn that one can only pre-order it from SiglioPress.com.

And, as suggests Joann Pan in her post about the book on Mashable, "combining the physicality of a printed book with the technology of Adobe Flash to create a virtual love story" is different. Pan interviewed the author and writer of the AR code. She writes, "Borsuk, whose background is in book art and writing, and Bouse, developing his own startup, were mesmerized by the technology. The married duo combined their separate love of writing and technology to create this augmented reality art project that would explore the relationship between handmade books and digital spaces."

The more I've thought about this project and read various posts about Between Page and Screen, in recent days, the more confident I am that I might experience a magic book once or twice, but my preferred reading experience is to hold a well-written, traditional book. I decided to come back to this topic after I read about another type of "interactive" book on TechCrunch.

First thing that caught my eye was the title. Fallen Lake. Fallen Leaf Lake! Of course! I used to live in the Sierra Nevada mountains, where the action in this novel is set, and Fallen Leaf Lake is an exceptionally beautiful body of water. But the post by John Biggs points out that the author of Fallen Lake, Laird Harrison, is going to be posting clues and "extra features" about the characters in the book by way of a password protected blog.

All these technology embellishments on books seem complicated. They're purpose, Biggs believes, is to differentiate the work in order to get some tech blogger to write about the book and then, maybe, sell more copies.

Finally, Biggs points out that what he really wants in a book, what we all want and what will "save publishing," is good (excellent) writing. Gimmicks like AR and blog posts might add value, but first let's make sure the content is well worth the effort.