Idea: Smart USB
IT is changing how we do so many things so quickly, that I have decided to start posting some of the ideas that I think can be developed into commercial products to take advantage of these advancements.
Today, I will start the series with an idea for a “Smart USB”
Problem: Many services hold valuable information we treasure and wouldn’t want to lose. For example, all of our Facebook pictures, our files at cloud storage services like Google Drive, Dropbox, iCloud. Flickr. Then there are SMS messages, contacts, local pictures, you name it.
Solution: Imagine a USB that when plugged, connected automatically to all your services and did a backup of all files. Of course, the first time you plug it in, the system would ask you to synchronize your accounts and select which folders you would like to backup. Once it has been configured, you would then plug it in any computer and the USB would run a software in the background connecting to all your services and syncing your files. It would be a local, portable backup of your online backups.
Re: Riches in Mobile Ads, Just No Profits – The Wall Street Journal
Action Ads
Instead of branding, the most valuable ad experience in the mobile space will most likely be a combination of demographic and geo data aimed at inducing a desired action at the moment the ad is shown.
This is all possible by integrating the social sign up (log in via facebook), identifying the location of the person via triangulation, gps or other methods, and remembering their behavioral history. This mixture would allow for highly targeted ads that request an action, such as increasing a sale amount at the checkout lane.
Take for example someone waiting in line to pay at Walmart. The phone can identify the user through the background running walmart app, which knows who the user is, what has he purchased before, what matches his interests, current specials, current store inventory, etc. The union of these variables can be used to determine convinient action ads, which can automatically generate a personal coupon or suggest to the user an item to buy.
Another example would be from a third party app. In this case, the same user at walmart is not running the walmart app in the background. Instead, a user is reading the news via an app like wavii, which both uses facebook login and maintains personal information of the user. That user within the wavii app can also be shown an action ad from walmart, suggesting the purchase of an ideal product match or coupon.
It needs no explanation that an action ad’s impact can be measured almost instantly. This allows marketers a more direct understanding of their ad performance and cost analysis. From an app owner perspective, action ads can serve as higher revenue sources than CPMs or CPC arrangements, given that an action ad can be tied to a commission on the sale.
An Internet of Things
The whole action ad strategy gets even better with the introduction of RFIDs into products. With this “Internet of things”, mobile business becomes the center stage of a large chunk of commerce. In this scenario, a person’s smartphone can identify the products in a household in realtime and keep a history of typically available products. An app can determine when there is a shortage of a product or whether there are special sales on the internet or nearby stores of commonly purchased products. Again, action ads can trigger the purchase of these items, like generating an online order with delivery.
Action Ads can also be beneficial for the travel industry. When arriving to an airport, action ads can display nearby hotel rates for booking, available taxi and drivers (ubercab), individual housing (airbnb), or available dining seats at the hottest restaurants (opentable) targeted to a user’s preference.
BTW: this response was written using a smartphone and the WordPress app after having used the WSJ app to read this article – Riches in Mobile Ads, Just No Profits
The Value of a DOT US
It is of common knowledge in the domain investment community that .us domain names are not the default choice for United States companies seeking to have an online presence. It is also of common knowledge, that as a result of american’s preference for .com as their national domain extension, .us domain names are assigned a value far below their ccTLD counterparts, such as Germany’s .de (Aktien.de $725,000), UK’s .co.uk (Beds.co.uk $130,000) or Australia’s .com.au (Deals.com.au $100,000).
This week, the DNJournal will most likely announce the purchase of a .us for mid four figures. The amount of the sale is almost insignificant, but I was the buyer, and in this post I will explain my reasons for believing that the .us is highly undervalued and carries a potential for companies seeking to develop an online presence with a prime generic name.
There are two main factors for which I think the .us ccTLD has lagged in value. First, as I said above, americans prefer .com – they associate it with their national extension. Even if a .com weren’t available, it is fair to assume that there will be a preference to choose another gTLD such as .net or .org, over the official ccTLD for the US, .us. This assumption can be easily corroborated by the number of sales and dollar amount per sale for gTLDs vis a vis .us.
The second factor is the restriction for .us ownership. Only American citizens or permanent residents are allowed to own a .us, and this is exactly the population that rejects .us domain names. If a european citizen saw value in a .us, there couldn’t be a way for that person to acquire such a domain name without much hassle and risk. Thus, the small population that can purchase the extension is its worst customer.
But then, why do I think a .us carries much more value than the market is currently assigning it?
The answer lies in the fact that there is a global perception on ccTLDs, which extends the relationship of any ccTLD to one not circumscribed to the specific ccTLD population, but rather as a geographic presence towards the global community. In other words, when a portal from Russia opens with their ccTLD .ru, like Mail.ru, they are not just communicating to the Russian community about their presence. Rather, Mail.ru becomes a portal for all global citizens searching for contact with Russia. All of the world -not just russians, will recognize and seek mail.ru when wanting to communicate with the russian community.
Outside of the US, it is evident from all the local media that ccTLDs are the default choice for companies to communicate with users. Thus, all internet users outside of the US have a psychological tendency, reinforced by local media, to see the web through ccTLDs. It is only americans who predominantly only experience the web through gTLDs, primarily .com. And so, therein lies the opportunity.
First, it can be speculated either way on the adoption of the American community on a .us. One can argue that american users will be confused and tempted to type in the keyword and then .com. Others can argue that branding will be harder and carry less prestige than the .com. I, on the other hand, have confidence in the ease of branding that carries a prime keyword .us. It further resonates on the prevalent patriotism that distinguishes americans.
However, there is another way of looking at the opportunity, and that is as a portal for the rest of the global community. It is much easier for a foreign citizen to understand and to recognize a portal using the .us extension as an american portal. Therefore, foreigners will want to participate in a .us portal with the understanding that they are participating in an american environment. The .us is easily perceived as American soil by the rest of the world. And that is where the value of a .us rises. If we consider the .us extension as a window to the US for the rest of the world, where our customers are not just Americans, but the global population seeking contact with Americans, we find that a .us can hold a huge market outside of its borders.
Groupon IPO
It is 12:30PM, November 4, 2011 and the Wall Street Journal reports “Groupon Opens Up 40%” The current price gives Groupon a market cap of around $13 billion. However, the company is still hemorrhaging money. There are probably a few reasons why the stock is up – 1.) the size of the offering is a very small percentage of the company, 2.) there is plenty of hype, 3.) internet IPO’s usually get strong demand.
Now, what is important about this is to stick to the fundamentals. As I wrote before,
Nothing has changed since my last post, and given the current trajectory, I am sticking to my position. Time (and I suspect a very short time) will tell.
*This article is not financial advice, nor is intended to recommend the purchase or sale of any stock or investment. Please consult your financial advisor for investment guidance.
Ignorance is the Highest Cost in IT Deployments for Small and Medium Sized Businesses
As I become aware of efforts to create technological platforms or to mechanize operations, the dominant theme across the board seems to be the lack of understanding of the evolution in IT resources and the dramatic cost reductions it offers to enterprises looking to create or manage their IT departments. One possible explanation for this is the chasm that exists between management (business educated), IT engineers (university educated), and current technology. Management appears to have been taught that IT is expensive, complicated, and incomprehensible to all except IT engineers. College educated IT engineers, on the other hand, appear to have been trained and polished in programming languages that were hot five to ten years ago. Current technology, however, has migrated mostly to the cloud and developed the tools and solutions necessary for most small and medium sized organizations, in order to allow them to create their projects on top of the cloud for a fraction of the original cost.
As such, the current modus operandi of small to medium businesses seems to be circumscribed to the acquisition of local technology consulting resources, oftentimes headed by IT engineers who hold on to the retrograde assumption that IT platforms must still be programmed from scratch and deployed in local (and oftentimes expensive) server farms. This presents three mayor costs – 1. Time from conception to deployment rises by a factor exponentially higher, relative to current pre-packaged cloud solutions; 2. As a result, monetary cost of the project also increases drastically; 3. And third, because the solution is custom programmed on the spot, operational and security bugs pose a continuous inconvenience, risk, and recurring cost and dependency on patches, which can render the IT project obsolete in a short period of time or exorbitantly costlier across time.
To visualize this conundrum, let us see an example of a real project currently being launched for a medium sized business, whose name I will not mention for obvious reasons. They are in the service industry and currently run a proprietary software solution that has been customized to serve their HR, CRM, and accounting needs. The solution runs in a local server farm, hosted at company headquarters, managed by the company’s IT office and assisted by the external consulting expert. Apart from being highly sophisticated, making it impossible for most users to make any use of most of the features the software has, the software is in continuous needs of interventions by the external consultant and of periodic upgrades. To get an idea of cost, the price tag on the next upgrade is a little over $1 million.
It is unquestionable that such software was the obvious and right choice at the time of its deployment, nearly ten years ago; but to continue investing in that solution now is pure economic madness and an evident example of complete ignorance in the current state of technology. For one, there is an enormous cost in the daily operation of maintaining the servers up-to-date. Then, there is the huge upgrade price tag, which usually comes around every two years. And to top it off, the software still requires constant support from outside consultants. A modest estimate in dollar costs for this project is around $1 million per year.
The Cloud is here to Stay
Cloud solutions are real, they have been with us for several years now, and they are not just the future of IT – they are the present. Similar HR, CRM and accounting solutions are already available through SaaS and PaaS solutions. Such alternatives represent clear benefits that outmatch those of local IT deployments in almost all of the times. Companies like Salesforce.com, one of the pioneers in this industry, revolutionized the software industry years ago, yet very few recognize it. Many IT engineers are trained in programming locally and have turned a blind eye in the reality of current IT solutions. And it is perhaps because they have failed to learn the single most important lesson in IT, and that is that a year in technology is equal to 10 years in any other industry in terms of change. Ferociously fast change is the only constant in technology. This means, that whatever you thought was best five years ago, it is most likely obsolete or highly inefficient by now.
And so, going back to the million dollar yearly operation of the midsized business IT department, that same operation can be ran on Saas and Paas solutions for less than $250,000. Aside from the economic benefits, there are the benefits of generally higher uptimes and lower costs in IT equipment purchases and maintenance, since users can run on thin clients.
To sum it all off, if you are a medium or small business, you should push your IT consultant to find a ready-made, cloud-based solution that fits your needs, rather than spending the time and money having a custom program developed for you. The cloud solution will upgrade itself without your business having to invest any further resources, and you can increase or migrate into larger or different solutions as your needs change, only paying fractionally more as you grow.
In the end, I like to compare the current change in IT to that of a car. Asking for someone to build you a platform and program you custom software to meet your IT needs is like asking an engineer to build you a car, because you need to get from point A to point B, when instead you should be shopping around to buy the best car that fits your needs.
Internet Investment Considerations: Groupon and Facebook
As new investment opportunities arise in the internet sector, several factors must be considered in the proper evaluation of these companies. Many parallels from the Internet bubble can be drawn, with slight differences. On the one hand, some companies are attempting to disguise their numbers with new fancy terms, in order to divert attention from the fundamentals. Yet, on the other hand we have a more mature internet than back in 2000, which can significantly influence the leader position strength in these current companies.
Groupon
No, ACSOI is not the new EBITDA circa 1999 Amazon. The reality is that businesses have to make money and Groupon has become an expert at burning cash, at a rate of $100 million last quarter. Despite being touted as the fastest growing company ever, there are serious flaws which make Groupon an extremely risky proposition.
First of all, their model requires a massive number of salespeople. Thus, in order to grow, Groupon has been hiring thousands of employees, pushing Groupon’s numbers further in the red. Then there’s the issue with entry barriers for competitors – there are none. Groupon’s service can be, and is being replicated by thousands of competitors eating away from Groupon’s market. Then there is Google and Facebook, which both are in more intimate positions with potential customers, which can serve as an incentive for these giants to enter Groupon’s turf. The lack of an entry barrier for competitors, and the astronomical valuation that the company currently has, makes Groupon a poor choice for an acquisition.
At this point, only a secret, innovative approach can save Groupon – and that is highly speculative. Even an alliance with one of the Internet giants is not enough to reverse the downward spiral that Groupon appears to be following. An alliance might just delay the process of failure, as was the case of MySpace when it signed with Google. It ultimately went under, once the Google contract had expired.
All in all, I see Groupon as a poor investment.
With Facebook, there is something powerful that goes beyond any rational analysis that one could make – and that is their vast pool of talent. Back in the 90’s, Bill Gates was asked which competitor he was most afraid of. He said, Goldman Sachs. His logic was that there is a competition for talent and whoever attracts the most talent will be in a position for success. Facebook shines in their aggressive history of attracting talent from all the top companies.
Talent together with the enormous power held from their network effect is a combination which could yield many good results. Unlike MySpace, which was the first social network to capture mainstream, Facebook is growing roots, deep roots within the Internet fiber, which places the company in a unique and monopolistic position of controlling the social layer of the internet.
This control of the social layer is the single most valuable asset the company currently has, and much consideration must be given to their capacity to retain control of it. In order to determine whether Facebook is a good long term investment, there must be an understanding of how well and for how long Facebook can control the social layer. There are various ways to see the evolution of the web, which can draw some possible outcomes. In a recent paper, I proposed one possible outcome which predicts that control of the social layer will cease, and an open format will come as a replacement:
“Facebook has done the job of transitioning the social layer element of the Internet and as history shows, we will eventually come out into the open web again. Instead of logging into Facebook, the social layer will permeate throughout the whole web – think “like” buttons. Instead of a singular social place, the entire web will be social and the social intelligence will be distributed – think Diaspora. The social component will feel natural to the average user because of their experience with the closed Facebook system, and the user will easily navigate and interact with this new integrated component.”
It is my opinion that a transition to an open format will occur. However, it is too early to predict when this will happen. Attempts like Diaspora have gained little traction and Google+, despite its stellar opening is losing steam as well. Thus, the timing for Facebook might be just right.
Given the uncertainty of the above, there is still relative calm in the medium term future for Facebook’s control. Facebook still has the talent, and they are still growing at a healthy rate. In terms of monetization, they have much room for growth and their Facebook Credits can be a formidable source of revenue. Ad targeting is generating significant revenue, and I see room for improving and expanding on this segment also.
Finally, there is the basic consideration of psychology. Never in the world has a company touched so closely the lives of so many people. Facebook has connected the world, and many individuals will certainly be very interested in buying a piece of stock. Average Joe’s won’t think twice about Facebook’s market cap, rather they will just buy. In this frenzy, I cannot help but think that those who entered early through SecondMarket will stand to reap many profits from their investments. Facebook’s valuation at their IPO will most likely be comparative to Palm’s IPO launch.
Facebook stock at current $80 billion appears to be a good investment, given the quick pop potential it has on its IPO mania. Obviously, more consideration must be given on the long term viability once their numbers are out. However, given that Google extracts much of its revenue from a very similar model (contextual advertising), and Facebook has captured much of the web’s traffic, it can be reasonable to assume that Facebook could sustain a valuation close to Google’s current $160 billion.
*This article is not financial advice, nor is intended to recommend the purchase or sale of any stock or investment. Please consult your financial advisor for investment guidance.
Twitter as a Personal Productivity Tool
When people think of Twitter, many associate it as a place to post just about every meaningless thing you are doing, as well as reading the latest gossip straight from your favorite celebrities, but Twitter can be something completely different – a productivity tool. In this small article, I will try to explain how you can use Twitter to gain insight into the world’s trends and the minds of great leaders as well as to use it as a source for managing your most important data consumption.
Twitter as a Knowledge Exchange Tool
Your Twitter account can be your window to the rest of the world on what you find interesting and valuable to share. Your “tweet” becomes a vote towards a stream of information flowing through all of the web users, where your tweet becomes an influence in that stream. In other words, the more tweets there are about a specific subject, the more likely that it will reach a broader audience. Twitter can also be very narrow and specific. You can use it to follow professionals concerned with particular interests. These professionals will likely share valuable information on those topics as soon as they discover them.
When was the last time you spoke to a Nobel laureate, world leader, or a successful business man? With Twitter, you can “follow” these people and gain the knowledge of the valuable pieces of information they share. Sometimes, it will be small thoughts, and other times they will direct you to a wealth of knowledge sources. You can comment back to them on what they have shared by using the format “@username” and this will reach their account.
So how can you incorporate yourself into this knowledge stream aside from commenting? First, integrate your current information consumption applications with your Twitter account. Many applications and web services allow you to integrate your Twitter account so that you can share content with a single mouse click. When you are reading an article or when you stumble into something of value then you can just click on the Twitter share button and the content will be shared. This form of sharing is an automated way that consumes about 1% of one second of your time each time you share content. Other people will be able to see what you have shared and comment back to you. And this is only a very simple way of sharing knowledge, Twitter is highly flexible in allowing how you decide to share information.
Twitter as your Information Consumption Tool
Once you are comfortable with Twitter, you could switch to the service as an information consumption tool. If you are familiar with RSS and RSS Readers, you will understand this part (if not, look for an article to learn about RSS first). Many of us use RSS Readers for information consumption. However, Twitter offers a more “submersive” way. First, you can identify the places which you have RSS subscriptions for. Many of them will also have Twitter accounts. For those that don’t, there is a very usefull service called TwitterFeed. That free service creates an instruction that sends the RSS feed postings as tweets to your account. You can have more than one Twitter account if you want to segregate the topics.
Once you have integrated all of the information streams so that they all run through Twitter, you have created a highly efficient consumption tool. With Twitter, you can even specify accounts that are of so much importance to you, that you get an SMS in your cellphone with the “tweet”. This is very valuable for people that need to be notified of information changes instantly, like for example when a site goes down or has been penetrated by a spammer, or when a stock goes down or up to a particular price level. Any information change can be programmed so that you are sent an SMS immediately.
These examples serve as a general introduction to the practicalities of Twitter and are aimed at people who care about time and efficiency. As you can see, Twitter can serve as a gateway of valuable and timely information that you can consume and share. You have access to influential leaders and what they are working on. You can reach the content, or the content can reach you through instant notifications to your mobile. You can reach millions of people and millions of people can reach you.
So what’s gonna happen next…
People have a tendency to see the future as a linear function of today’s trends. In the case of the Facebook era, most people see Facebook becoming the principal source of information consumption. To many people, Facebook is the main reason they go online. The rest of the Internet does not exist to many.
Let us rewind a bit; back in the days, in the 1990s there was the browser. It was really confusing to most and so it was mostly adopted by tech savvy people, and then came along America Online (AOL). AOL simplified things to a point where the Internet made sense to the average Joe. For almost all, AOL was the Internet. In fact, domain names were almost irrelevant. In substitution, people new AOL Keywords. Businesses would advertise their AOL keywords so that customers could reach their internet content. AOL became so big, so quick, that coming from nothing, they went on to have such a high market capitalization to the point where they managed to lead the astronomic AOL Time Warner Merger, estimated to have an aggregate value of $350 billion at that time. It would not surprise me that Facebook achieved three digit billion dollar valuations also. Now we all know the fate of AOL.
Facebook is the new AOL. In the evolution of the web, we have gone through cycles of open products and closed products. Mozilla browser – open, AOL – closed, Internet Explorer – open, Facebook – closed. A quick glimpse to the past 20 years of history will show you a cyclical pattern, and there is no sign of this changing. So what’s happening?
We are going through an evolutionary process where when a new technology is introduced, consumers must first go through a comfort period – a closed period. Thus, when Mozilla came out, it was open, but it was too complicated for regular folks and as a result came AOL. Once people felt comfortable browsing, internet browsers took over the experience, open. As we now add a social layer to the Internet fiber, we must take the masses once more through a closed system, while the incorporation of the social layer gets deeply rooted. Through this 20 year period, smaller cycles of other internet technologies have gone through the same process, but we need not get into those details.
So, what’s gonna happen next…
Facebook has done the job of transitioning the social layer element of the Internet and as history shows, we will eventually come out into the open web again. Instead of logging into Facebook, the social layer will permeate throughout the whole web – think “like” buttons. Instead of a singular social place, the entire web will be social and the social intelligence will be distributed – think Diaspora. The social component will feel natural to the average user because of their experience with the closed Facebook system, and the user will easily navigate and interact with this new integrated component.
The lesson being here, that in order for the masses to adopt a new technology, it is most likely that the most effective way of achieving adoption is by having a single standard, where the user interacts in the comfort of uniformity. Uniformity stifles freedom and creativity, thus uniformity will be replaced once the user obtains mastery of the new technology and the comfort isn’t needed anymore.
So can you guess what’s going to happen with the iPhone’s closed iOS? Yes, Android will eventually replace it.
Nueva red para Abogados, Abogadas y Estudiantes de Derecho en Puerto Rico
Nuevo espacio cibernético para estudiantes y profesionales del derecho en Puerto Rico
Un grupo de estudiantes de tercer año de nuestra Escuela de Derecho de la Universidad de Puerto Rico acaba de lanzar DerechoPR.org, una plataforma multimediática dirigida a concentrar en un solo lugar discusiones e informaciones gestadas por abogados y abogadas, así como estudiantes de derecho.
Un centro de informaciones jurídicas
“La idea es poder acentuar las características comunitarias de esa comunidad jurídica puertorriqueña, concentrando las discusiones, dinámicas y proyectos que se han estado gestando de manera aislada en un solo punto accesible a todos los profesionales y estudiantes de derecho”, explicó Rafael Sosa Arvelo, co-fundador del proyecto, quien lleva diez años desarrollando proyectos en la web.
DerechoPR.org tendrá en un solo lugar todas las convocatorias de actividades jurídicas alrededor de la isla, así como foros de discusión, plataformas de blogs, una recopilación de vídeos jurídicos, y una colección de resúmenes de jurisprudencia. La Red será de membresía gratuita y exclusiva para abogados, abogadas y estudiantes de derecho, pero sus contenidos serán accesibles a todas las personas, lo cual ofrecerá la ventaja de poder publicar dentro de un portal bien posicionado en los principales motores de búsqueda, evitando que las aportaciones individuales sean enterradas en la inaccesibilidad al tener que competir con los contenidos de portales mejor posicionados.
Oportunidades para hacer “networking”
El proyecto también tiene como propósito ser otro espacio para la creación y desarrollo de relaciones profesionales tipo “networking”, tanto entre colegas abogados y abogadas, como entre estudiantes de derecho, y entre estudiantes de derecho y profesionales del derecho. Cada aportación –ya sea, en los foros, en los anuncios de eventos o en los blogs– estará identificada con el nombre de la persona, el cual contendrá un enlace a su página de perfil que permitirá que miembros con intereses comunes sepan de la existencia del autor o autora y logren desarrollar iniciativas en conjunto. “A veces las personas indicadas y las oportunidades están ahí, pero no sabemos que existen, no hay un punto de conexión”, comentó Sosa.
Otro tipo de “networking” posible será entre profesionales y futuros profesionales con potenciales futuros clientes. “Cada vez más las personas buscan satisfacer sus necesidades de información a través de Internet, por lo que ir desarrollando una presencia cibernética a través de plataformas bien posicionadas y accesibles debe ser parte de todo plan de desarrollo profesional”, señaló Eugenio Martínez, otro de los estudiantes involucrados en DerechoPR.org
Rafael Sosa's Weblog 