Internet was conceptualized with a dream.

The dream of equalizing everyone and democratizing all content.

A student could drink the potion called ‘Internet’ and serve at the same platform as an MNC, perhaps better!

The promise of internet was so strong that many young men left comfortable jobs and followed their dreams. Many succeeded!

It happened with Google, Facebook, Flipkart, Craigslist, Slideshare, Dropbox ….the list goes on.

Internet as a medium also very clearly pushed a fact that you can’t spend money and buy consumers-that was a very powerful phenomenon! The leading internet companies in the world grew users and traffic organically and naturally over a few years. Hence the users that they acquired were not ephemeral. That, money can buy users, but cannot sustain and retain was truly imbibed in the thought-process.

If that was not true, Yahoo, Microsoft, ebay, MySpace etc. would have ruled the world always by virtue of the power of money.

None of the world’s largest and most admired internet companies started with huge advertising investment to buy consumers. It simply doesn’t work!

Did anyone ever see a TV ad of Google or facebook or Amazon in their first 5 years? Did Google, facebook, craigslist win the customers by buying insane volume of time on TV?

These companies did invest in consumer acquisition and brand building after a certain duration; but very clearly never started with it. They invested most of the money in product development, user experience, logistics, payments, infrastructure and achieving consistency in everything.

Then why do we see almost insane pumping of a large proportion of VC money in advertising & marketing initiatives, in ventures where the product still needs strengthening, where organic traffic still needs to be relevant & consistent, where traction is still definitely not recorded in its entirety and perhaps is far from where it should be.

Who is hijacking the promise of internet? Who believes that one can win the game by splurging money on buying consumers faster than the other? Who is fooling the VCs? And Why the hell VCs don’t see this? Where and when will the race to spend more stop?

It’s becoming a game of ‘teen patti’; where if you have a poker face, you can show confidence and you have enough money to outlast your competition-you win!

I hope people who spend this insane amount of money on advertising (especially TV) for their fledgling online portal have their logic in place, because else it’s like a crime against internet, which the users may forget but not forgive.

Yesterday while discussing on org structure with a colleague, I came across a topic which propelled me to write this post.

While the discussion hovered around social media and viral/ word of mouth marketing-this led to an interesting thought- is viral different than word of mouth and also if viral marketing is a superset of social media marketing.

I very clear understand that social media is not just about distributing content but goes further towards, listening, engagement and collaboration, and that with the leverage of social objects one has an opportunity to make the content interactive and shareable- which implies that viral marketimg is not a superset, infact it just might be the opposite. If you ask me I would rather not compare both.

Anyways this also led to an interesting after thought and I decided to illustrate my thoughts on how WoM, Viral and Social are 3 different phenomenons –with overlaps.

Communication continuum for social platforms

Word of Mouth- When content gets shared from one to few to few and in the process the impact tapers down and eventually dies. So word of mouth never has a mass appeal and has a short life span. It’s like you hear about a good salon from someone and you try it out and further share with a couple of your friends. So word of mouth appears to be –limited in terms of mass appeal, geography/coverage and lifespan.

Viral- When content gets share from few to many. Has a larger appeal/base and has a larger life. The content needs to be interesting and relevant enough to be shared, but it also dies a natural death as the ‘x’ factor dies.

Social- Many to many sharing- very large base/appeal,  long life. And the unique differntiator is that in order for a content to become social the control of content needs to be relinquished or the content should be allowed to remixed, re-purposed. This implies that if an intersting content is open for collaboration in such a way that the content undergoes a change and shared-then it becomes social and has the largest impact and longevity.

Look at the example of the hit song KolaveriD. How various artists and common people re-purposed or remixed or recreated their versions and how in the end it became a global phenomenon and how the popularity of customised versions eventually helped the ‘original’ content become even more popular.

This also implies that we should look at this as a communication continuum wherein a content piece can grow from just being a WoM phenomenon to a Social phenomenon

I thought I should share this thought-process with all the readers and it will be great to have your thoughts as well on this.

It’s easy to describe a market as ‘Winner Takes All’. It’s easy because it gives one an easy way out of many questions.

When the market is ‘winner takes all’- then you only have one option and that is to grow largest in the quickest possible time-leveraging network effect to the fullest.

However, somewhere I am not convinced with this and thought of discussing this aloud on atomthought with you all:

So here are the thoughts, and then let’s discuss and decide if this is indeed a winner takes all market!

Firstly there are various examples in India and abroad that signify that multiple players can operate with significant market shares in classifieds market:

1. If you observe the ‘Vertical Classifieds’ market in India you can see that very clearly there are 2-3 big players in each vertical:

Jobs: Naukri, Monster and Times

Naukri despite being in the market since 15 years and despite being a very dominant player, is still under pressure by the other 2 players.

Matrimony: shadi.com and bharatmatrimony.com Both players very strong.

Real Estate: 99 acres, Makaan and Magicbricks.

Observe the Print classifieds market- there is no single winner. Despite ToI being the largest English newspaper, and Dainik Bhaskar perhaps being the largest newspaper
None of them is a clear winner.

Net. net, in all the above examples the winner doesn’t takes all.

2. Even in Europe we have leboncoin, ebay.fr and a couple more horizontal classifieds portals competing and sustaining successfully.

3. In the US of A you have ebay classifieds and craigslist.

4. In order to become a winner takes all player- there needs to be a very strong network effect- for example look at facebook- more the users join > larger the value for each user> thereby attracting even more users> even more value for users …and so on.

The effort required in creating and maintaining our network on a 2nd social platform is so high that we restrict ourselves to 1 social platform.

Now that’s then a winner takes all market. Read Social Networks & Their Strategy for India here

However we don’t see such a strong network effect in classifieds space.

The sellers, in a classifieds space, can post their listings in 2-3 portals (because it’s free, and it takes a minute to post); the buyers on the other hand like to explore hence they don’t mind surfing 2 -3 portals, and more importantly buyers search on Google initially and then go to 2-3 classifieds portals for further search and purchase.

The question can be asked that if a classifieds portal amasses huge volumes of listings quickly can it not easily kill other players, by demonstrating strong network effect?

The answer is ‘no’. More listings per day means that a particular listing will get less time on first page, thereby attracting less number of views and responses thereby dissatisfying users.

Hence more volumes will not build network effect-infact after a threshold it can break whatever little network effect was created.

So In classifieds space- there is a network effect; however it breaks up before becoming strong enough, thereby allowing more than 1 player to operate with a significant market share.

Infact people will use more than one classifieds portal, also because some portals will be very efficient in certain categories or geographies-hence it looks like that Online Classifieds space is not a winner takes all market. We will continue to see 2-3 major players across the world and in India in this space.

But these are my thoughts, what’s your take?

ebay realises that to win this battle, it has to play the end-to-end game; meaning ebay wants to control, payments, logistics & supply chain, multichannel customer experience & transaction,
enabling hosted shopfronts, and providing scale & targetd reach to SMBs, large enterprises or C2C merchants

I tried creating an infographic to show the ebay strategy based on my understanding and you can understand how the recent buy-outs by ebay are starting to make sense.

Let’s look at the buy outs first:

1. Where.com – Over 1.2 lac retailers onboard. Location based ad-network + local deals. (USD135M)

2. Milo.com-local ecommerce player (USD 75M)

3. Magento.com- Open sourced ecom platform-alongwith mcommerce and hosted shopfront options. Over 90,000 retailers onboard. (ebay bought 49% stake last year @ USD22.5M, the rest 51% was bought this year)

4. GSI- Complete logistics, order management and CRM platform. ((USD 1.96B)

5. PayPal: mobile and web payments (USD1.5B)

6. FigCard- Point of purchase payments (figures not available)

7. Red Laser- barcode reading app (bought in 2010)

At the centre of the ebay nervous system is the Open Sourced Web & Mobile Platform- Magento-this platform can enable anyone to start a shop, and enables customers to transact
from a web or mobile platform. This platform also enables developers to develop applications and solutions which can be bought by both buyers and sellers

On this platform ebay plugged in PayPal for payment integration, and GSI for logistics, supply chain, and customer care.

This kind of closes the loop for everyone.

The services range from free to a few thousand dollars a year for merchants.

But the story is not over yet, ebay understands the merit of local shopping, local search, and offline payments. If these could be
brought in the ebay ecosystem then ebay will indeed control the real end-to-end of shopping.

And that’s how Milo, Figo and Red Laser make sense.
Milo is a local ecommerce platform- that allows users to search and buy products within a specific geography. This will also be integrated with the Open Source Platform.

Red Laser- allows users with smartphone to do comparison shopping offline, and then buy online near their location (courstey Milo), through barcode readers. (ebay had sold USD 600M of products through mobile phones in 2009, and tosay 10% of all ebay sales are on Mobile phones in UK)

See how Red Laser works here

‘Where’ allows users to search intersting deals locally, and also allows advertisers and merchants to target users by geography.

Figcard is another interesting acquisition, given that it enables offline transactions via mobile. Watch this very interesting video on how Fig Card works here:

An interesting read on Mobile Payments is also here

The question, after having read the above, is Are Indian eCommerce companies thinking on these lines yet? And more importantly- have Indian eCommerce players missed the bus already?

xcommerce bus image courstey: https://plus.google.com/108257742736725504517/posts

You can also access this interesting presentation on slideshare-by clicking here

I shall be putting up an audio link for the same soon.

www.atomthought.com

Google attempting to buy Groupon at USD6B is just one sign that signifies the importance of a local strategy/portal.

Equally important is the online user behaviour which is tilting in favor of local. (There were deals sites before Groupon also, but the hyperlocal strategy made it a winner)

Look at the fact that 70% of searches on Google have a ‘local’ intent. Which means that users are increasingly using search with ‘local’ keywords.

If Google is on it’s way to earn USD30b next year- then the local potential for Google is more than USD21b!  That’s huge.

Another interesting fact -In US 70% of all sex traffic business is done online, up from 40% a few years ago. The spike is contributed to one single local-classifieds portal- Craig’slist!

Very clearly local portals/strategy not only greatly influence user behavior but also have the potential to mold the internet direction.

Sometime back, a friend wondered that it will be tough for local classifieds site in India to survive- the logic being that it’s so challenging to educate and bring people on ecommerce site (due to trust issues)
that on local classifieds site it will be even more difficult- given that largely there will be used products with no warranties etc.

My thinking is that -becuase local classifiess site will show content around a local neighbourhood-trust will not be an issue.

People can themselves surf and visit the person to see the products listed and take a call.

So in a way, in India, local/classifieds sites can be a precursor to ecommerce usage.

Looking at this scenario from another perspective:

Worldwide Classifieds Revenues have declined from about USD19b to USD6b between the years 2000 and 2009.  (Source: Newspaper Association of America (2009 includes Q1�Q3 data and an estimate for Q4)

And Online classifieds revenues have increased from less than USD1b to about USD3b between 2000 and 2008. (Source, IAB, 2008-09)

Very clearly users are looking at online local/classifieds portals as a more pertinent medium owing to their characteristics like immediacy and economy.

So both in terms of Global companies looking at expanding and monetising better and Indian companies looking at building trust and creating funnel of users-Locals is a great strategy to follow.

Social Media Outsource

As owner of a blog, a facebook page, a twitter account and a linkedin group I take out extra time to give adequate attention to each one of them.

I have been a firm believer of the fact that one needs to segment audience and engage them with customized content thorugh different social media channels platforms and this requires serious efforts.

The above, however is easier said than done. My learning, is that it’s immensely difficult for one peron to wear so many hats, and it’s even more difficult to motivate people/users to discuss or particpate in engagement process, especially in India.

The reality is that for the corporates it’s even more difficult and challenging to maintain such a granular level of engagement.

So, while it’s good to say that the corporates should not outsource their social media efforts-the fact of the matter is-corporates should focus on creating policies, processes and KPIs, and leave the actual engagement wherever possible to outside agencies.

Having said that, a regular agency-client relationship will not work in this case. The agency will have to commit dedicated resources and the organisation/client needs to train them fully and commit investments over long term.

This is especially true for SMBs, who cannot afford to hire permanent experts right from the begining.

I posted this topic on Linkedin and received responses FROM OVER 15 EXPERTS- some of them are really insightful and present a comprehensive and holistic solution.

If you too have a few thoughts on the above, do share them herefor everyone’s benefit!

Image Source: http://www.seo.com/wp-content/uploads/2010/10/7-social-media-activities.jpg

But this also triggered a couple of questions in my mind:

1. Just because befriending is easy on online social networks- what value can having endless count of friends bring?

2. The law of diminishing returns will hit this spree one day-when the novelty factor eases out! What happens then?

Not sure if you agree- but how many of your 500 fans on facebook are you regularly in touch with? What kind of relationship-value are you able to create with a long-lost school friend who you found on facebook? How has the ability to have thousands of friends changed your life?

At my end - I am still enjoying the countless and daily postings of food, restaurants and vacation pics by my friends on facebook-but am sure the law of diminishing returns will hit one day! What happens then?

Also, are social networks becoming a platform to show-off? Would you agree that most people show-off their acquisitions and especially the food that they are eating!

Social networks need to focus on enhancing the value of relationships and this can happen if people use the platform as a particpatory medium rather than a show-off medium!

This brings us to a new question- Will we eventually see a quicker fall of facebook and that there will be rise of a  new social network-that focuses on quality of engagement and relationships rather than quantity of friends?

Will be glad to hear your take on this!

Here’s what people are talking about this topic on twitter. Please join the conversation below:

image courtesy: http://www.bergmangroup.com/news/wp-content/uploads/2010/04/facebook.jpg

Linkedin premium job seeker

Did you notice the premium Job Seeker service that Linkedin has launched recently?

Apart from being expensive , I think Linkedin is missing a point somewhere.

Linkedin is a great platform where as a professional one can network and create a great professional reputation over time.

Linkedin in that sense is an open platform where professionals openly expose themselves to their peers about their feats and expertise.

Unlike Naukri or Monster-which are closed platforms because people do not expose themselves to their peers. The whole idea about Naukri is privacy, blocking your current company from viewing your profile and so on.

Why would Linkedin introduce a feature wherein it would motivate someone to put up a tag ‘Job Seeker’ on his/her profile?

Beats me! Because the environment of Naukri and Linkedin are different, people go at these places with different objectives and mindsets, even if the objective is to hunt for a job- it’s done differently on a naukri and on a linkedin.

I am not sure why would a professional openly put up a tag ‘Job Seeker’ and appear desperate in front of his peers and other professionals on Linkedin?

Either I am missing the whole big picture or is it Linkedin which is not understanding the power of their open platform and the fact that they seem to be in a hurry to moentize the wrong way.

My take on LinkedIn Monetsiation is this:

For me, Linkedin is a great platform for:

1. People Search

2. People Connect

3. Reputation Build-up

1)Large B2B companies, 2) SMBs and 3) Talent Search are 3 monetisation activities here apart from 4) targeted advertising.

If I were Linkedin and if I wanted to focus on creating traction between job-seekers and recruiters (resulting in money for me) I would do the following:

1. Help Job Seekers create reputation for themselves- How can they get more recommendations, how can they answer questions across the ecosystem around their expertise? How can these recommendations and answers be highlighted?

Can we have a search system in which people with higher reputations come on the top of results? How can these recommendations and answers are plugged out of linkedin system?

2. Help create traction between job-seeker and employer- how can we have advanced modes of contacts (videoconf via linkedin), automatic update of job-seeker profile with relevant openings, and alert on which employer is searching for a specific type of talent. (so that even when employers do not post an opening, their search is recorded and thrown at rlevant profile-resulting in more job-seekers automatically connecting with employers proactively)

Can employers similalry get alerted on candidates who are answering specific type of questions, this way they can be sure of finding relevant and fit candidates easily.

Can employers, instead of just posting jobs, ask questions and check expertise via answers on specific issues? Can they get a complete package of questions, job postings, candidate alerts, reference check, referrals etc. to cover their entire lifecycle?

There are many such things that can be intelligently done to create traction in an innovative way that compliments Linkedin fabric.

As of now, it looks very mundane, half-hearted, un-innovative approach by linkedin to crack job-seekers market!

(I have not experienced the premium job seeker package from LinkedIn and the above post is my understanding basis Linkedin’s ads and their description page for the service.)