Quick Reads – Mobile Fix – Feb 28

Mobile Money isn’t the easy path many think. Simple was supposed to disrupt but has been bought relatively cheaply by a big bank.

As Messaging apps become central to people mobile experience, the influence of Asia becomes stronger. So this comprehensive look at social in China is worth studying.

Want proof of how big messaging is – this Chinese man hand drew instructions for WeChat so he could message his elderly parents

A great resource on design and UX from London studio UsTwo – there is even a Japanese translation.

The first big deal between a Music company and Shazam – interesting

Finally……Net Neutrality can seem a little dry and, for those in Europe, a little distant. This piece argues we need to take it really seriously.

 

 

 

Mobile Fix – February Feb 21

 Whatsapp 

When a tech acquisition is all over the newspapers and TV, you know that tech, mobile and social are truly mainstream. Ben puts it very well in his tweet.

Spending $19bn on anything will get you a lot of attention. Spending it on a service that most people don’t know that well- because its 450m users tend to be young and in emerging markets – invites some skepticism

But Facebook have the cash – they are giving away around 10% of their value to buy WhatsApp – and have a highly successful means of monetizing eyeballs, so getting a big chunk of extra eyeballs makes sense.

They also have ambitions to grow in emerging markets and this deal certainly helps there;

55 percent of those surveyed by Jana in India said they used WhatsApp the most among mobile apps; less than 1 percent said Facebook was their primary app. And it was a similar story in Brazil (63 percent favored WhatsApp versus 5.6 percent for Facebook) and Mexico (76 percent versus 5 percent).

And when Wall Street values FB at around $140 for each user, getting that extra chunk at just $35 per user make sense too.

But how is Facebook going to make the money that justifies this buy? Advertising is something that WhatsApp have never done and their ‘manifesto’ suggests they don’t want to. And blending ads with messages it less easy than mixing them into people newsfeeds.

Weve and others have shown you can monetise messaging, but WhatsApp don’t have much info on their users – but one imagines that Facebook will be using their customer audience technology to work out just how many people use both services. Linking a Facebook profile to a WhatsApp user instantly makes them more valuable –  if advertising is an option. ( You can use your Facebook profile on WhatsApp but it only uses the basic profile)

But maybe WhatsApp will become the FB lab for learning about the new business models – like stickers – that other Messaging apps are pioneering.

http://wattsjones.org.uk/post/61010619439/messagingappmonetisation

VC firm Sequoia talk of 4 numbers that explain the deal; 450m users, 32 employees, the $1 a year they charge users and the 0 marketing spend. Equally impressive is the return Sequoia are thought to make on the $60m they invested – $3.4bn

As well as being a billionaire, one of the funders will be feeling good about being bought by the firm that turned him down for a job back in 2009.

Wired have some good background on the firm and the team. And Ben Evans – now working with Facebook board member Marc Andreessen  – shares typically smart thinking.

GAFA

This deal supports our view that Google, Apple, Facebook and Amazon essentially control the tech world. They have the power and the cash to ensure future innovations get snapped up, rather than become a significant competitor. Google have done more deals than any one else over the past 3 years and whilst they have bought Waze, Nest and Robot companies, WPP – in second place – have spent a lot less buying agencies.

Twitter, Yahoo and Microsoft are all players but don’t shape the ecology like GAFA do

StartUps

Given a business with just 32 people can grow into a global leader in just 5 years and command a value of $19bn, perhaps we should retire the idea of a bubble? Marc Andreessen talked at this weeks Goldman Sachs conference about tech still being in a depression;

He argued that advances in mobile and chip-making technology signaled exponential expansion of the market. He said tech isn’t overhyped and could have “decades” of growth ahead of it. Echoing economist Carlota Perez’s research, he said world-changing technologies like the web usually settle into a more mature deployment phase after an initial period of hype and investor frenzy.

Thomas Friedman, the author of the hugely influential The World is Flat, is equally bullish on startups – suggesting they are the best hope for the US economy.

And here in London, Mobile Monday held an interesting event looking at startups finance and acceleration, which we wrote up here. Our view is that the big funding investments tend to overshadow the real innovation;

Our take is that too many people focus on the quick win of an accelerator place and funding. The reality is that these are lottery wins – great when they happen, but not something to rely on.

Smart entrepreneurs get their team right and build a business around solving a problem. Getting people to pay for your solution validates your idea and demonstrates you have the grit and persistence to make a success of your business. And that story could well open the doors to the accelerators and the funding.

Quick reads 

Really interesting look at Social & Content from @revilopark Helping Celebs to Embrace Fans in the Social Sphere

Interesting look at a UK business building a YouTube channels for brands and rights owners.

eBay have published  a fascinating report on omnichannel retail. Essential reading. 

Netflix & HBO in  “an arms race in programming.

Smart thinking on Cards from @avc Fred Wilson

Madison Avenue cool on Apple and Amazon ad opportunities

We are finding the Yahoo Aviate app a good way to manage our Android homescreen. Well worth trying.

Japanese ecommerce giant Rakuten have been busy; buying messaging app Vyber for $900m and opening a R&D centre in Paris – seeking the next big thing in ecommerce.

MIT have published a report on the 50 smartest companies. Well worth studying.

Finally….. the new Spike Jonze movie Her is about a man that falls in love with his Mobile OS – sort of Siri version 79. Who better to review it than the father of Artificial Intelligence Ray Kurzwell. He finds the whole construct quite feasible – except he sees it as more 2029 than 2025 as the film predicts.

As we started Fix with today, tech is changing things on a huge scale. And it’s not going to stop anytime soon.

 

 

Accelerators, Finance and Good advice

(Update – Mobile  Monday now has this review along with the slide decks and some videos on their blog)

Mobile Monday  had a fascinating event in London last night (February 17). Titled Acceleration and Finance the team put together a great panel representing accelerators, VCs, entrepreneurs and Nesta (see below for the full list)

Now when you mention money to the mobile community, you get their attention and the event at Centre Point was packed.

The Chair John Spindler kicked off with a whirlwind look at the overall VC and accelerator space, and a blizzard of stats and links to resources and more information. Even with 40 slides in 10 minutes, he got a lot about the shape of the market over, making the point there is no shortage of people/ organisations that want to help. His full deck is available from Momo and deserves some close reading.

The key point we took away was that across the US there are around 69000 seed findings on $100k each year. In the UK last year there was probably only around 1500. So there is a way to go yet.

Next up Jessica Stacy from Nesta took us on a little less frenetic tour of the ecology, summarisng the accelerator space and drawing upon some of the research Nesta has done in the space. Again a clear message that there is no shortage of resources.

She had a neat summary that we liked, suggesting there are essential three types of accelerator  - ecosystem, matchmaker and investor. Again Jessica is sharing her charts and they are well worth a read.

We then moved to the panel and this session opened with each of the panelists introducing themselves and their organization.

Jon Bradford of Techstars went first and whilst the Techstars model is pretty well understood he also talked about their partnerships with corporates and how important he thought that was. They are currently doing programmes with Barclays and Disney, whilst there is no investment a clear focus on the appropriate vertical is ideal for some startups.

Building on the corporate venturing theme Simon Devonshire of Telefonicas’ Wayra went next. With bases in numerous cities the Wayra initiative is proving a success in terms of number of applicants and the progress of the teams accepted.

Rather newer is the Microsoft accelerator and Diane Perlman spoke about their experience in other markets and their ambitions for the new programmes across Europe. Jon Bradford suggested – tongue in cheek – that they had stolen the idea after Techstars ran a programme for Microsoft.

Both Simon and Diane were at pains to point out that teams were not locked into the sponsoring corporate; Simon said they would and had facilitated deals with Vodafone etc and Diane stressed that the teams on the Microsoft programme could build on any tech platform they liked – although clearly links with xBox were a huge advantage for gaming start ups.

But what is it like for an entrepreneur? The next panelist was Brian Taylor who has a start up called PixelPin and is currently navigating the world of accelerators and funding. He talked about the benefits of grants and match funding but emphasized the need for persistence – a point that kept coming up. His view on the key advantage of accelerator programmes? The connections that they open up – he mentioned that he has met 10 banks in then last few weeks  – something that would have taken years without the contacts of his accelerator.

Last up was Simon Cook of DFJ Esprirt – the European arm of legendary valley VC Draper Fisher. The track record of both the US and Europe is amazing and he talked from the viewpoint of later stage investing.  He thinks the key role of accelerators is to teach entrepreneurship – giving people the skills to build a business.

His general view probably resonated most with us – he believes there is too much focus in fundraising as a measure of success; there are 10 million SMEs across Europe that people have started and made a success of – compelling evidence of entrepreneurship.

All the panelists spoke of the intense competition to get into their programmes and when asked what were the factors that differentiated the chosen few there was some consensus; it’s all about the team. Jon put it best when he shared his 5 criteria for selecting someone into Techstars;

Team, Team, Team, Opportunity & Team

The questions dug a little deeper into these issues and Simon Cook made an interesting point – despite the rapid expansion of accelerators and the buzz around start ups the actual number of a Series A fundings has stayed really constant at around 1000.

The best advice from the panel? Probably Jons’ advice to find the 3 smartest people you know and go buy them a coffee and ask them to tear your idea apart. Then ask them to suggest another 3 people to do the same with. This way you quickly start to find the issues you need to address.

And Simon Cook ended by pointing out that even the biggest successes gave been through tough times. He talked of board meetings where it was feared the next salaries could not be paid – yet these companies had gone on to huge success.

Our take is that too many people focus on the quick win of an accelerator place and funding. The reality is that these are lottery wins – great when they happen, but not something to rely on.

Smart entrepreneurs get their team right and build a business around solving a problem. Getting people to pay for your solution validates your idea and demonstrates you have the grit and persistence to make a success of your business. And that story could well open the doors to the accelerators and the funding. 

Good luck.

 

The Panel

John Spindler, CEO of Capital Enterprise (@CapEnt), will be in the chair. Before we get into the discussion, John will be giving us an updated lightning tour of funding options and Jessica Stacey from NESTA will be giving us some insights into NESTA’s research into acceleration. For a flavour of the event, check out last year’s event roundup

Jessica Stacey - @JessStacey – Programme and Research Manager, Accelerators and Early Stage Businesses, NESTA

Jessica has been working on an update to NESTA’s report on start-up acceleration and will be sharing some of their conclusions.

Simon Cook - @venturejedi, CEO and Co-founder DFJ Esprit

DFJ Esprit are leading VC investors on the London scene. Simon, who has been described by Esquire as “A rock ‘n’ roll figure with a blonde faux-hawk and some billion-dollar swagger” will hopefully share with us what they look for and how they view acceleration.

Brian Taylor - @Brian_PixelPin, CEO & Inventor PixelPin

PixelPin goes from strength to strength – a graduate from the Wayra London Academy, PixelPin has now gone on the the Fintech Innovation Lab and has interesting stories to tell about raising finance on the way. Not to mention that we’re proud that Brian is a graduate of The Mobile Academy.

Diane Perlman - @Diane_Perlman, Microsoft Ventures, Start-ups Lead

Microsoft’s own London acceleration programme has just started at Central Working. Diane will undoubtedly have lots of say about selection of candidates and differentiation of programmes.

Simon Devonshire - @simondevonshire, Director, Wayra Europe (Telefonica)

Simon has been responsible for setting up Wayra Academies across Europe, you might call him a serial accelerator creator. He’s certainly in a good position to comment on the value created.

Jon Bradford - @jd, MD, Techstars London

To say that Jon has been on the inside track of the start-up, acceleration and investment scene here in the UK and else where would be to miss the point. Jon has promised that his contribution will be “fun and lively” …

Wearable or Peripherals?

After a year or so our Nike Fuelband is being retired. Why? It’s getting slightly battered but the key thing is that – without the sync with ones phone – it doesn’t do that much. And given they still don’t have an Android app we have given up.

But we get all that the Fuelband did and more from Moves. This app uses the smartphone GPS to work out how far you have walked, ran or cycled – and the iPhone version lets you measure much more. And the data can be shared with 30 complimentary apps.

And the Nike+ app on an iPhone 5 is arguably better than a Fuelband.

All this supports our thinking that wearables would be better termed peripherals – unless you have a smartphone in close proximity the functionality tends to be limited. And there isn’t a problem with this – using a watch or band as a sensor makes sense. And for glancing at a text or email the small screen makes sense too.

Once this small peripheral becomes common, we suspect that the smartphone could get bigger so the screens are suited for different use cases. Could the mini tablets become the norm – with watches and Glass used for calls etc? Or is the Phablet the form factor of the future?

The biggest advocate for Glass has voiced his concerns – suggesting Glass won’t be a success – in the short term. Scoble remains bullish in the longer term though.

It’s worth remembering how other ‘tech’ has gone from freakish to fashionable. Back in the 1930s Dark Glasses were a new Fad, but sunglasses are now everywhere. And until 1980 the idea of walking the streets listening to music on headphones seemed alien.

But equally some tech can give off the wrong signal – the stigma of Bluetooth headsets is best demonstrated by Ken from an early episode of Breaking Bad.

This is a good round up of predictions on wearables but for the key challenge is a marketing one. And we would put our money on Apple – if they can position their watch with the same genius as their white headphones they have a chance.

Tracking

The old John Wanamaker quote* “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” has never been more relevant.

With the avalanche of data from digital media it should be getting easier to see what works and what doesn’t.  Talk with any C level Client and they tend to be frustrated that such a major piece of expenditure still lacks the rigour of other major investments.

We were hugely influenced by a McKinsey paper from 2005 called Boosting Returns on Marketing Investment and it’s sort of depressing that so much of that thinking still feels novel for so many businesses.

But research on the desktop web is getting better. A new partnership between Comscore and Googles Doubleclick means that advertisers can now be more certain the ads they are buying are actually being seen  – and by the right audience. And the metrics so familiar from TV – like reach and frequency – are now possible on digital.

A significant improvement is the ability to integrate brand lift surveys with campaigns, so core brand metrics like awareness and favorability can be measure in close to real time, enabling ongoing tweaking of the campaign to improve performance.  We have advocated that digital creative should be pre tested with a limited media buy before the full spend kicks in and these tools would help in that pretotyping.

This research is available in the US later this year with eventual plans to expand the service for mobile and cross-platform.

Eventual plans highlights a problem; in mobile even some of the things that gave digital a degree of accountability don’t work that well; Cookies are now just as endangered as Flash intros

These tiny bits of data (stored in the users web browser allow marketers to track clicks, return visits, basket content and to store passwords etc) have been controversial but hugely useful. Yet just as EU regulations mean that every visit to a website requires navigating past a cookie policy popup, the industry is searching for an alternative.

Why? Because most people now use multiple devices to access the web –and cookies can’t effectively track across devices unless someone is signed in. And for the majority of mobile web cookies don’t work because Apple doesn’t support them.

One salvation in mobile was the UDID (Universal Device ID)  – but Apple stopped apps from accessing that last year. But the IDFA (Identifier for Advertising) introduced by Apple was more usable and didn’t have the same security worries.  But now the usefulness of that is reduced as Apple no longer allow apps to use this info unless they sell advertising. Which means that these apps can’t track where a download came from.

This may sounds a little niche but Facebook use the IDFA to demonstrate the effectiveness of their app download advertising, so a huge proportion of mobile revenue just lost it’s key KPI.

Even within the current tracking frameworks there are issues – Facebook have just dropped two mobile ad partners as they were holding onto user data for too long.  Balancing user privacy with advertising tracking is a tricky issue.

There are lots of people conjuring up new and novel ways to track mobile advertising but unless/ until we have a better understanding of what is working, this instability could jeopardize the rising investment in mobile.

The sooner Google and Comscore can find a way to bring their new tools to mobile the better.

*Actually half the time this is quoted, it’s misattributed. We just don’t know which half is right

Chromecast – the future of TV

It looks like an official UK release of Chromecast in imminent. Oddly it has been withdrawn from Amazon in the UK and you can no longer have it shipped from Amazon.com. And it’s disappeared from the UK Google Play store.

Hopefully the release of the SDK means that someone is working on making iPlayer, Lovefilm, Blinkbox etc work with Chromecast. In the meantime it is proving great for YouTube, Netflix etc. With almost 12k reviews on Amazon, Chromecast is a game changer and if Google put some marketing muscle behind it we expect it have a big effect.

As small screen video makes it onto the big screen, its clear that quality is of paramount importance. A good example of newTV content that is good enough for old TV are the wonderful films from Chipotle. This is branded content at its best –highly entertaining and a strong brand message.

This case study on how Jamie Oliver uses YouTube is also worth a look.

Mobile Fix – Feb 14 Quick Reads

To make it easier to share Fix we are breaking the content into separate posts.

You can reads todays Fix here;

http://www.addictivemobile.com/blog/2014/02/13/wearable-or-peripherals.html

http://www.addictivemobile.com/blog/2014/02/14/chromecast-the-future-of-tv.html ‎

http://www.addictivemobile.com/blog/2014/02/14/tracking.html ‎

Quick Reads

Apples Tim Cook talks about the huge pile of cash and drops hints about new products.

Net Neutrality may be a US issue but big Mobile Networks seem to like the idea of charging the over the top players. Vodafone claim Facebook asked for their service to be made free – ie users aren’t charged any data when using Facebook.

They were turned down but the Vodafone CEO is interested in sponsored or paid-for data that would not count towards a subscriber’s monthly data plan.

This used to be quite common a few years ago – the first Apple video ads on 3 were zero rated so users didn’t pay for the data – Apple did.

Mobile coupons aren’t quite ready for prime time

Controversially someone suggests our love affair with the tablet could be over. We don’t agree but use cases suggest the tablet doesn’t move far from home for many people.

Finally …..Kevin Kelly is one of the best thinkers about digital – he started Wired and has been a constant source of inspiration. This longish interview is a good look at how he sees the future of tech

 

 

Mobile Coupons – not quite ready for primetime?

We are fascinated by mobile coupons and have spent a lot of time looking at the UK possibilities. One really interesting opportunity is the network of independent corner shop retailers that work with PayPoint and PayZone.

With over 30k outlets these stores are already an active part of the digital economy with their crucial role in returns for ASOS,Amazon and lots of other ecommerce businesses through Collect+. Rather than post a parcel back, you simply print a label, stick it on the package and take it one of these stores where the barcode is scanned – and you’ve returned it.

i-movo are the key players in using these stores for couponing and have some good case studies.

But the current Guardian voucher campaign shows up some of the issues. It’s easy to get a £1 voucher for the weekend papers onto your phone and I went off today to buy the Observer, with the excellent Tech supplement.

But the first store listed on the app tells me they don’t take vouchers. The second looks at my phone and says yes they take vouchers and that  I just need to go print it off. After some gentle persuasion he agrees to try scanning my phone and is fascinated to see that it works. But he tells me that the paperwork for these vouchers is complicated and they’re not keen on them. (Oh, and he short changes me). All this is in early adopting Hackney.

Until stores are ready to embrace this technology, consumers won’t bother with it.

Search Wars

One part of adtech that people think works just fine is search. Google have won the war on desktop with over 85% market share – despite some growth for Bing over the past couple of years.

But a combination of Microsoft and some of their major users have been lobbying the EU to make Google change the way they work. Their has been some tension between Google and Brussels for some time – at one time the EU funded their own search engine Quaero. Now an agreement has been reached which means that Google avoid a $5bn fine and we should see some significant changes to how shopping results are shown.

But Microsoft continues to invest in their search and a new investment in Foursquare suggests their ambitions lie in local.  We have covered Foursquare a lot and seen that their key asset is their huge dataset on peoples movements.

As the search war migrates to mobile, having Foursquare on side seems a good move for Microsoft and how they integrate this data and service into Bing will be interesting. Foursquare say the deal isn’t exclusive and they can work with others but there is some speculation that this investment is the first step to an acquisition by Microsoft.

Their new CEO needs to make a splash and has the cash to do so. In his all staff email he paraphrases Oscar Wilde (something you cant imagine Balmer ever doing)

we need to believe in the impossible and remove the improbable.

Could his next move be persuading Apple to rescind the default position for Google as the search engine for Safari?

We are convinced this will happen – eventually. A simple move for Apple that weakens Google and clears the air over the privacy breach. And it’s highly likely that Bing would pay a lot more for the right to replace their nemesis, whilst catapulting Bing back to being a major player.

Watch this space.

Read the rest of this weeks Mobile Fix here

Mo’ Mobile Money

Another week, another mobile payments launch. But the new initiative from Mastercard for contactless payments is in partnership with Weve, so they have a chance to get consumer adoption.

But the wrinkles around contactless and NFC continue to be an issue. Our friend Sam pointed us to CardClash – the need to keep your Oyster card separate from your contactless card in case the TFL card reader gets confused. You will need to keep your smartphone separate too.

One slightly older mobile payment method did impress this week. Paying for a spotify account we were offered the option to pay by mobile – and simply typing in your phone number, then the confirmation code texted to you immediately and the charge is added to your mobile bill. Very simple, very secure and used by some big brands.

Read the rest of this weeks Mobile Fix here