Matthew VB

People have been trying to figure out how to turn my cell phone into my next credit card. I had the opportunity to read a write up by HBS on Nippon Telegraph and Telephone (NTT) and their spin-off company, NTT DoCoMo. DoCoMo is focused on bringing mobile payments into reality via their partnership with FeliCa. FeliCa has the ‘chip’ technology while DoCoMo knows the phone market. Good partnership, but huge social hurdle to overcome.

Credit card companies were nervous to jump in to the RFID-type of cards. Speedway had a speedpass (not sure if they still do) that allowed customers to pay for gas with a key-token-type-device-thing. Chase has a “blink” technology that utilizes an RFID-like chip in the card so you can tap your card on equipped payment terminals and you don’t have to swipe. DoCoMo is looking to do something like Chase, but with a cell phone.

People are a nervous bunch and don’t like to change financial habits. Mint adoption was slow out of fears of giving a company access to all your financial information in efforts to help you better understand where your money is going. The biggest question facing DoCoMo is: what happens when X. X, in this case, is everything! My phone gets lost, or worse, is stolen. Someone starts walking around with a payment terminal and it taps my bag and steals my money. Am I going to need to still sign? What’s the point then if I do? I have no signature on the back of my phone. What’s my verification number for online orders? What? Can’t do online orders – so I still need a credit card then.

I’m all about advances in technology, but this is a big hurdle and needs to replace the credit card and needs to be secure. Oh, and unless you can get Apple to put it in their phones (or RIM), good luck! Cause you need major phone adoption in addition to major retailer adoption so I could actually pay for something with my phone.

Sell the technology – or license it out. Let someone else figure it out; then come back and do it ten times better.

Reed Hastings knew what he was doing when he started Netflix – and he’s still got it. Netflix was really the first-mover when it comes to making DVDs accessible and available within homes within 1 business day. Netflix can reach 90% of people within 1 day, and in the past months they’re reaching everyone via digital downloads/streaming. One of the challenges in the digital space has come from movie industries wanting people to still buy DVDs rather than just get them via Netflix. Working with Warner Bros, Netflix announced a partnership last month that they’ll stream movies for the first 28 days, and then ship DVDs; promoting people to buy the DVD instead of just renting it via Netflix. Brian Beckowski captures the thoughts of many with his words:

If there is one thing in my life that I would not trade, it is my Netflix subscription.

So, what’s the question to answer here? Not sure to be honest. Reed is doing great and my advice to him is – keep going. Keep pushing forward in the download options – reach out to more studios and get more videos available on demand. This is going to be a growing area as bandwidth and connectivity improves across the USA. Additionally, this allows Netflix to reach that 10% who aren’t able to get movies in 1 day with instant movies. Netflix being able to tap into the long tail should propel them forward with downloads that hit those non-top 10,000 videos. That will enable them to continue their reach into the random niche markets and build on their ability to leverage the market that gets neglected at BlockBuster or other movie stores.

I’d argue that Netflix business is in statistics and user recommendations. Their recommendation engine is the powerhouse that keeps them going and drives them forward. The announcement of the Netflix Prize made things even more exciting for customers, as recommendations will improve and the desire to rent even more movies will continue to grow.

This week’s eComm study looks at the write up by Bagley and Martin regarding BitTorrent and Warner Bros‘ partnership in P2P video distribution (circa 2005). I have to be honest here, Bagley and Martin leave something to be desired in their write-up. So, in efforts to make this somewhat enjoyable, let’s take a different angle and actually ask a question to respond to the BitTorrent v. and Warner Bros. partnership.

First, the RIAA and MPAA are all over this area. Kudos to Cohen and Navin for wanting to make a business out of P2P file sharing. I given them credit – in 2005 the lawsuits were really just starting. Our BFFs were handing out take-down notices left and right by time BT & WB started getting cozy. For notable suits, check out my friends at TWIL for some podcasts; and for some reading: Grokster or Jammie Thomas. (The Thomas case is very interesting and is still ongoing – interesting stuff.) Cohen and company did the right thing by saying they’d do what they can and be pro-active, helping remove illegal files on the BT trackers they manage. This was the selling point to WB in my view. But what money is to be made?

Huge players have entered the market around this time: Netflix, Hulu, and others. WB has been getting around, meeting up with a few players in the field, including Arvato Mobile. I think WB is spreading the wealth of movie disto in hopes one of the networks takes off, is successful, and avoids their day in court. (Grokster did lend a bit of protection in this case, and we know YouTube takes-down all kinds of stuff (seriously check out that link – YouTomb is cool stats). What does BT have to gain from all this? A partnership with one of the big six. If they can get in with one, they can slowly get in with the rest.

Fast forward a few years, and just a few weeks ago Netflix announced they have a deal to allow downloaded content 28 days before DVD availability from…yup, WB. Sorry BT, you’re about to leave us. With major ISPs throttling bandwidth…opps, allegedly throttling bandwidth, the open source tech is going to continue to struggle. Major trackers have already been hit hard by lawsuits and BT as a company is about to face their own.

So, at the end of the day, how does BT make money? Fair question. I suggest they don’t, but for the sake of argument, here’s what I’d do:

1. Join forces with the BT community to leverage the BT platform as a way to do more than illegal downloading.
2. Brand, brand, and brand. Need to brand BT as what it can be – not what the media makes it out to be. Put some money behind a campaign to show how BT can be used for good and not evil.
3. Continue to be pro-active in the legal community in your take-downs of illegal content. If you don’t, our BFF’s will be after you.
4. Once you’ve done the above, use the community to tap into the growing markets as you were trying to do. Build partnerships with movie AND music distributors. Tap into people like Netflix (or even better, the dying Blockbuster) and get them to use you as a “faster way to stream.” I’d go one-step further and tap into something like RedBox which is all disc right now, and see if you can be a premium provider to them as a way to get content to people in their homes. Stick with the $1/day, but save me the 2 trips to the store.
5. Rise and repeat.

Or, you could license the technology to one of those listed in #4 and see what they can do with it. You won’t be the next CDN, but you could be a CDN alternative.

Oh, one last thing – don’t be evil and turn in people who break the law. While ignorance isn’t an excuse (not knowing the law or what’s happening on one’s computer), privacy violations just aren’t cool. If you go down this road, do it the right way and just tell people they’re doing wrong and pull the plug on that file. BT can be used for good, promote that. If you become the snitch (or aid the snitch), you’ll lose the people instantly.

This week I take a look at what Stanford (or HBS) in 2005 called ezboard, but today is known as Yoku. Yoku is an online discussion board platform, no different than Ning, Yahoo! Message Boards, or even (a stretch perhaps) Google Groups. The question posed is: how does Yoku make money? Many discussion boards, like those above, are free – and now even more open source technologies exist that hosts can install themselves (Vanilla, BBPress, etc.).

Yoku makes money in two ways: ad-based revenue shown in headers and footers, and subscriptions via their Gold Ad-Free Community. For communities with less than 50,000 page views / month, the gold plan at $6/month removes the ads from the screen – allowing users to browse without distraction. I’ll tell you one thing – this company is headed for the deadpool. Why? Simple: too many outlets provide this service for free and the ad revenue alone can’t support what Yoku wants to do. Sure, chat, photo galleries, and other widgets are great – but other online communities <cough> Facebook </cough> allow you to do that for free — and they have a far wider reach.

I think the only thing stopping a current community member of Yoku from moving on is that their discussions and history are tied up in the platform. It’s an instant death if Yoku allows you to export your discussions – and even faster if another platform could find out how to import Yoku data. All of the features they’re providing are at a commodity level for Internet users. If you don’t have email on your site – forget it. No profiles? Don’t waste my time.

The days of paid bulletin boards are over. Clean up shop and over something innovative. Yah, yah. You can provide my community with a ’secure and closed area so people won’t bug us,’ but that’s not what online communities of today want. People want to be found so others join their communities. Take Ning – a great platform. It’s universal login allows me to join one community, and use that login across multitudes of communities that are all free! Sure, Yoku does this too, but Ning isn’t going to bother me with pop-ups or pointless ads (they do have one on the side – but I’ve never noticed it until now when I’ve intentionally looked for it.).

I really hope for the shareholders that Yoku was a company that bought ezboard and not just the name of their latest creation. Online reports that Yoku was the name of their beta software from 2005 that took 3 years (yes, 3 years!) to finalize once it was first unveiled. (Seriously – what took so long? I’m sure you spent at least 2 more years before that working on it, regardless of what’s admitted in public or not. I mean, really? 5 years for Web site development?) It’s time to pack up shop, close down, call it a day, sell the networks off, migrate them over, and join Geocities. Follow Yahoo!’s move…do it quietly.

Update: 1.23.10@7:18p: I figure I should add a bit of the case to this. The question the author poses is: what should ezboard do in 2005 to increase revenues and to roll out a new subscription service. At the time the gold program existed, but had low-enrollment. The migration to the new plan also required the answer to: do all customers at once, or do a slow roll-out. Google is known for slow roll-outs of new features, but giving all users at once makes the system universal and leaves little question to new users. I stand by my notes above that the CEO (Robert Labatt) should work on a sale rather than pushing forward with trying to revise revenue streams.

Update: 1.26.10@9:30p: Just a point of clarification – Yoku was named in 2005, but wasn’t released until 2008 – that was the 3 year development lag I was referencing.

It will have been six months this Friday since my last post and I have a new source of motivation for blogging – so “Hello World.” Over the course of the next 15 weeks I’ll be finishing my second (yes, second) master’s degree. I’m wrapping up my MBA from George Mason. As a part of my final classes, I’m doing my first official, academic study of eCommerce. The course is going to look at about a dozen companies in the online world (all still online at the writing of this post – I think…) and how they formulate their business, approach their customers, and perhaps, just perhaps make money (looking at you Twitter – yup, looking right at you). I’ve followed the best sites out there to this point, but now it’s time to put the theory behind the practice. What sticks, and what doesn’t? How did Twitter actually make money last year?!? I mean – they have like one ad…and a ton of data.

So, for the next 15 weeks, I welcome you on my official academic venture into the world of eComm. I welcome your thoughts as (nearly) every week I’ll tackle another company and see what makes them tick (or not tick), who’s running the shop (or trying to at least), and give my two-cents (it’s worth just about that) on the biz at hand. For my fellow classmates – enjoy blogging. It’s not too scary, trust me.

And for those looking for my tutorials, start-up plans, etc…they’re still here – buried in the archives.

Oh! Almost forgot. I’m planning on launching/re-launching a site in the next few months, so I’ll probably share some of the progress/saga about that.

I’ve finally decided on and added the “ShareThis” button to all posts. Enjoy the sharing.

More to come as I continue to update the site, integrate some social media within the blog, and do a bit more in the ‘exciting features’ realm.

Welcome to the new site. Yah…looks like the old one. We’ll work on that.

In the meantime, all the old posts are here and the stuff people have enjoyed (tutorials, etc.).

More to come in the future – as well as updates on the redesign of matthewvb.com and the launch of a site in stealth right now (shhhh, it’s a secret!).

For those who know my history, this blog started at webtomic.com. The time has come to move it back to its home to make way for a new site in the upcoming month here at matthewvb.com.

In the next few weeks you’ll find all the blog posts, tutorials, and info over at webtomic. I’ll post here once it’s all updated, but don’t be confused if you start seeing double.

I recently had a chance to try out Balsamiq Mockups; an easy to use mockup/prototyping tool for Web sites and software developers. Balsamiq allows users to quickly and easily create mockups of screenshots and applications using a simple user interface. I think this is a great tool for those inexperienced and experienced to mock-up new projects (i.e. Web sites, iPhone apps, software apps, etc.).

To put the product to the test, I tried creating a home page for a new Web site. The great thing about Balsamiq is that I didn’t have to worry about colors (though it does do colors) or being exact — I can just throw pre-fabbed elements on the page, drag and resize, and be done! Overall, I found almost everything I would want to put on a Web site in the elements pool. It’s really great that they came pre-made with random text (like the tag cloud in the screenshot). I put a video player in the middle, a little audio player below that, and an aggregrate of Twitter posts. On the right I put a tag cloud, calendar, and some icon/links for contacting me (email, phone, etc). I left the left side open for some text, maybe blog posts or announcements.

I’d really recommend this product for someone who’s looking to do mockups and not have to worry about the detailed design of the product. Balsamiq is great for a quick and dirty shot at what you want a page or application to look like (including iPhone apps – they have various iPhone elements to use). At the end of the process, you could easily take a Balsamiq mockup (exported easily as a png) to a graphic designer to have them build a PSD with colors and graphics or take a copy the Balsamiq mockup to a developer to begin to build out the features required for the page. Check out their other examples of how to use Balsamiq.

One area I think Balsamiq can use some more work on is to continue to diversify their element pool. Once and a while I was looking for a certain icon or element and couldn’t find what I wanted (e.g. YouTube or TV logo.) To Balsamiq’s defense, they do offer Mockups To Go, a place where users can upload new elements and UI designs for people to use. Some are just groupings of new elements while others are full mockups ready to download and adjust as needed.

Balsamiq Mockups provide a great launching point for designing and developing Web sites and applications. Balsamiq runs on Adobe AIR and you can try it out online for free. You can purchase a copy for $79, but Balsamiq offers MANY free licenses. (Full disclosure: I received a copy in exchange for a review). Try it out and post in the comments your thoughts.

I read today over at RWW that FOX News covered a story, “Facebook Users Get Worse Grades in College.” The report follows an Ohio State Study that surveyed ~200 students (just over half grad-students) showing that Facebook usage is correlated to lower GPA.

I’m a bit frustrated for two main reason:

1) This isn’t breaking news. I reported in my research 3 years ago about the relationship between Facebook and GPA. I would not say conclusively that prolonged usage of Facebook results in lower GPAs, just that a relationship exists there (same as the researcher said from Ohio State). As I suggested, more research needs to be done in this field. Now, perhaps that’s what Aryn Karpinski of Ohio State did, but I’m not sure – haven’t seen the full dissertation yet. I’m assuming the research was a bit more qualitative than mine was, but it sounds like Fox is taking this a bit far with their overly suggestive title. It’s more than complex than simple usage drives down GPA.

2) I’m just a bit stunned that it took 3 years from the publication of my research and the spike in Facebook traffic last fall to get the news to realize something is going on here. There are tons of things on social networks that are impacting college students (and society) that need to be examined. Yes, there is a relationship between lower GPAs and increased Facebook usage, but why didn’t you cover the relationship between students of color using Facebook as a medium to connect with people on a college campus – when they felt unable to connect in person? Or about the way it allows for non-heterosexuals to connect to other students on a college campus? These are just a few of the golden nuggets that lie in the usage of Facebook.

If you ask me from the perspective of a person with a master’s degree in counseling and student development, I’d rather have a student spend an extra hour on Facebook and feel connected to campus and suffer a few tenths of a point drop in GPA, then to have a student feel disconnected from their campus for a mere few tenths of a point. The goal of a college is to educate first, but that includes social education. Connecting students is critical to students feeling accepted and able to succeed.

If you want to really learn about students and their life online, check out what Kevin Guidry is doing. Now this is where colleges (and news agencies) need to focus — understanding the online world, how we can live within it, and how we can use it to enhance society.

We need more research – more data. If you have some, please share it! We need to educate society about social networks and the impacts they have on…well, the rest of society.

Aryn: I look forward to reading your work. I hope you would send me a copy once it’s completed. And if you’re interested, I’d love to share my data that I’ve collected and collaborate on some future research with you.

(Danah Boyd is another great researcher on the topic – please check her out and read her great work.)

Update 4/14@9:38a: I just discovered that USA Today (via CNET), Time, and MSNBC have all posted similar stories about the research. Time and USA Today seem to provide a bit more than the FOX story,  but MSNBC is using the same article that FOX used. Still more needs to be said than just the same story — let’s see the other research people! I know there’s some people in Indiana doing this research as well.