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Reflections on location-based services

23 Sep

Why do or why should consumers value location-based or “check-in” services?

  1. It’s a quick and easy way to meet up with your friends.
  2. The game aspect of it is fun.
  3. Love knowing what friends are up to and where they are.
  4. It’s yet another piece of context for us to use when talking to our friends.  If I know that you were at a great Mexican place yesterday, I can ask you about it and you don’t even have to tell me that you were there.
  5. Tangentially, eliminates the “what have you been up to question” so that we can get straight to what is your opinion of X, Y, Z place.  It’s a good place to begin a conversation.
  6. Love knowing what complete strangers think of a place.  Plus its cool to know how recent their opinion actually is.  For example, I love telling Gowalla what my favorite food at a restaurant was.
  7. Rewards.  There’s little reason why you can’t set up a system that allows restaurants to give rewards to peopel that actually spend money at an establishment.  But its not clear why any electronic rewards program is better than the paper stamp card.  Sure electronic is two-way, so now the business can actually keep up with their customers and vice versa, but seems like a lot of transaction cost.

So, let’s ask a tougher question, why do or why should local businesses love location-based services?  What’s in it for them?

  1. Customer feedback.  This is available through Yelp alone but maybe you can learn something about your business if the last 20 people to have been there have raved about the chocolate mousse or complained about the lemon bar.
  2. Know your most frequent customers.   Maybe give them rewards based on what they spend, but this requires linking up their purchase history with every specific store.
  3. Lure in addiitonal customers with discounts or just by letting them know what you have to offer.
  4. Lure in additional customers based on what friends think about your establishment.
  5. Lure in additional customers and the friends they have with them, this is what is aiming to do.
  6. It could help them build community by advertising events to people that are around the physical location.

Alternatives to the “paperback Kindle”

10 Jun

Seth Godin proposed that Amazon introduce a basic and no frills $49 Kindle.  I’ve got a better idea–sell me an e-reader that allows me to electronically access the books I already own.  Give me the benefits of the Kindle–one device that holds 300 books, wireless access, bookmarking, ability to take notes, search notes–but make it extend to every book I already own.

I have a massive library of books that I love and don’t want to have to buy again.  I want Kindle benefits without paying $5000 to rebuy all these books.  You can even make me verify the fact by having me send in books that I want to digitize.  This should satisfy publishers that I’m not getting a free ride or that I won’t go sell my hardcopies later.

If I can convert all my CDs to MP3s, shouldn’t I be able to do the same thing for all of my books? Imagine if every Kindle came with the opportunity to electronically access the books you already have hard copies of? It would be a massive undertaking to negotiate with the various rights-holders but Amazon already has the relationships to do this.  If they did this for me, I would even pay a little extra for the privilege.  I’d also own just one reading device and that would be a great thing for whoever sold me that device.

Is Google the ultimate social venture?

8 Mar

Social venture (n): an organization with a mission and history of providing social services to the public, at a free or discounted rate, while still providing a positive return on investment to its stakeholders.

I made that definition up but its consistent with the most buzz worthy social ventures / enterprises.  Public mission with profit making potential.  Google has contributed to the social good in every major area and they’ve made a healthy profit in the process.  As most people know, they’ve done this by way of massive cross subsidy–using advertisers to foot the bill for simple life improvements like streamlined mail, search and calendaring, all the way to more complex social goods like public data visualization, energy management, and auto captioning for videos so that those with impaired hearing can enjoy and understand all online video.

Find a profitable business model and redirect some portion of the profits to social good, with the hope that one day even those services will become profitable.

Take aways from “Design Thinking”

3 Jun

I have a long running fascination with IDEO, the design consultancy behind many of the world’s most inspiring and functional products/services.  As a business junkie, I consume lots of literature on the processes used by companies to innovate.  If you share my interests, I suggest “Design Thinking” by Tim Brown, CEO of IDEO, and the recently appointed head of the Stanford Design School.  My creative license, analysis, and interpretation of his work appears below:

  1. The role of design has evolved.  It is not or at least should not be an aftethought to conception of a new product or solution.  Failure to adhere to this rule creates GM vehicles like the Pontiac Aztek.  Indeed, designers should be intimately involved with the creation of the solution and not merely the boxing/packaging/marketing.
  2. Frequent prototyping is critical.  Whether you write legal briefs or design boxer briefs, it behooves you to “learn about the strengths and weaknesses of the idea and to identify new directions that further prototypes might take.”
  3. You can reduce costs, increase revenues, and do a better job of pleasing your customers if you pay attention to process innovations.  I would credit much of Target’s success to improving the experience of shopping.  Paying attention to the procedure, whether formal or informal, used by your customers and your employees can give you much insight into how to improve experience.
  4. Speaking of performance, experience, and innovation, you might do well by looking to how other industries have solved the problems you are trying to solve.  A Professor of mine, Bernard Black, has referenced the airline industry as a model for how to reduce physician error and consequently the costs of our medical care system.  In order to look effectively to other industries, you’ll have to take a more abstract view of the problem you are trying to solve.
  5. Creative genius can be boiled down to “hard work augmented by a creative human-centered discovery process and followed by iterative cycles of prototyping, testing, and refinement.”
  6. Sometimes the best place to look is outside your core customer.  Instead of asking why people buy your products or services, you might learn more by asking why they don’t.  Insights into the thought process of your customer will no doubt be generated.  See Shimano Bike Company and how they discovered and some might argue created a new market for their very 19th century product, the bicycle.
  7. What innovations do your constraints as a company or the constraints of your customers demand?  This is an especially important question for philanthropies or organizations looking to deliver aid.  If your “customer”, the poor individual in sub-saharan Africa, cannot afford medicine, this constraint of COST might require you to develop a product or solution to work around or reduce the impact fo this constraint.
  8. Think about what abundance has wrought.  In a world of excess, how can you provide something that is lacking.  Might you help people save time?  Might you create products or services that enhance their relationships or allow them to find new ones?  Might you appeal to the parts of our humanity that know no bounds, the search for meaning perhaps?  Knowing that people find meaning in experiences and relationships should help you innovate.
  9. The most successful products are not the ones that got to market first but rather the ones that created an “emotional and functional appeal.”  See iPod.
  10. Do you have the opportunity to engender a massive cultural or behavioral shift?  Have you even asked yourself this question?  The world of profit and non profit is filled with problems begging for a solution.  The answer most commonly given is “so many things would have to change in order for this to be solved…”  Instead of simply saying that, list what must be changed and figure out if there isn’t a way you can design for the problem.
  11. Problems and solutions have people at their heart.  Are you creating for people or are you creating for the abstract set of statistics provided by your marketing department?

I think I may write more on this topic.  Perhaps on process innovations and the approach suggested by Dr. Atul Gawande.

An Update on Scarcity

27 Dec

The low cost of production of everything has created a situation where anyone can produce anything. Limitations of capital exist today but this is a recent phenomenon. Technology is still cheap and readily available. The cost of raw materials has even dropped.  The proliferation of production has left us with too much of everything.

Several years ago, Seth Godin wrote a post arguing that there was a scarcity shortage. As an example, he cited the problems faced by mortgage brokers.

“Twenty years ago, most mortgages were written by the local bank. Those banks planted the seeds of their obsolescence when they eliminated judgment from the writing of mortgages….Today, there are an infinite number of brokers to choose from, all offering essentially the same service. The result is that there is no scarcity, and no profit.

The true scarcity in this industry and in most others, as Seth noted, is good judgment. We were once able to measure good judgment by profits or stock performance or sales numbers. Those metrics, at least for now, are out the window.

How do we measure good judgment to make sure that it’s not as scarce as it has been? Do we change the way we reward ourselves, our employees, and our managers? I think in order to do any of these things we must realize that profits are not as easily created or as easily replaced as the $30 DVD player we buy on Black Friday.

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