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Are You Ready for the New Peer-to-Peer Economy?

Posted in Board Of Intellectual Capital, tagged , , , , , , , , , , , , on March 12, 2011| Leave a Comment »

Article from GigaOm.

“Unless you really don’t give two hoots about the world of technology, it’s highly unlikely you would have missed the big brouhaha between San Francisco-based startup Square and VeriFone, a payment processing services provider. VeriFone accused Jack Dorsey’s product of not being secure and being easily hackable. Dorsey denied.

This week’s dust-up makes me wonder if VeriFone quite understands its own business. To me, they are a company that provides payment-processing services to big retail outlets, fast food chains and other large transaction volume establishments. That’s what really makes them a good company. Square isn’t going after those customers. It’s going after people who would rather not be VeriFone’s customers. Earlier this year, in a conversation, Square COO Keith Rabois told me that

“Most of our competitors (including the likes of VeriFone and Intuit) focused on 7 million merchants who have the ability to get merchant accounts from say Visa or MasterCard. We are going after 26 million folks who are not merchants in a classic sense.”

When I look at Square, I see a company that’s all about helping payment processing for a different class of customers: you, me and the guy selling apricots at Sunday’s Farmer’s Market. Square is about transactions that are more peer-to-peer in nature. These kinds of transactions are mere crumbs on trail to a much bigger economic trend.

The New Peer-to-Peer Economy

For the lack of a better term, let’s call this trend a peer-to-peer economy. Here, transactions happen between individuals or a group of individuals and not between corporations and individuals.

Just look at AirBnB, a perfect example of a peer-to-peer economy company. It offers a platform for folks to rent rooms (or villas) from other folks. The company takes a piece of the action for making the connection between the buyer and seller — who more often than not, are individuals. Typically, this would be an economic transaction between a traveller and an hotelier. Several other iterations of this basic idea have emerged; for instance, OneFineStay is doing peer-to-peer vacation rentals. RelayRides is another startup that allows you to share cars.

One of the companies I am absolutely fascinated by is New York-based Kickstarter, which I think is less a company and more a socio-economic movement.

KickStarter is a simple site that marries patronage and commerce. Artists come and list their projects and get in touch with friends and supporters, who pledge their money. If the money needed by a project is pledged, the artists get to work. If not, it’s back to the drawing board for them.

In less than two years, Kickstarter has come out of nowhere and is now helping projects raise as much a million dollars a week — from individuals like you and me. It helped raise a lot of money for open-source Facebook rival Diaspora and the iPod watchbands TikTok and LunaTik.

The Network Is the Dollar

This peer-to-peer economy is a throwback to an older way of life, where folks used to barter for goods. It was a different kind of economic transaction, but still it was an economic transaction.

The onset of industrialization brought in mass production and mass consumption into our societies. The Internet and by extension, mobile is going to help change that.

One of the things the Internet enables is our ability to connect with each other very quickly. These connections can go beyond sharing of tweets, photos and links.

The network is a springboard for services and platforms that enable one-on-one (or one-to-many) interactions. The easy to use tools — web and mobile — make it easier for like-minded people to congregate and engage in commerce.

I wouldn’t be surprised if we see more companies try to tap into the shift to the peer-to-peer economy. The winners will be those with big platforms and the likes of Square who provide enablement services. Perhaps next time, VeriFone needs to remember that.”

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Apple, Google’s mobile rivals must play catch-up

Posted in Board Of Intellectual Capital, Business models, FaceBook, google, internet, Investments, Java, Market research, Microsoft, Mobile, mobile 2.0, Mobile Phone Usage, Social Networks, Strategy, Technology, Venture Capital, Web 2.0, Wireless, tagged , , , , , , , , , , , , , , , , , , , , , , , , on February 27, 2011| Leave a Comment »

Article from SFGate.

“It’s been a big couple of weeks in mobile. Verizon Wireless finally got the iPhone. Hewlett-Packard unveiled the first fruits of its Palm purchase last year. Nokia, the world’s biggest maker of handsets, abandoned its once-dominant Symbian mobile software system and demoted itself to a kind of glorified contract manufacturer of Microsoft-powered devices.

The struggle for mobile dominance has entered a new phase. Why would Nokia throw out Symbian, with its 37 percent market share, in favor of software with less than one-seventh of that? Because recently hired Chief Executive Officer Stephen Elop is convinced that Microsoft has better odds of going up against the four other mobile powers – Apple, Google, Research In Motion, and HP – and making its new Windows Phone 7 software a center of gravity for the world’s programmers, manufacturers, and consumers.

“The game has changed from a battle of devices to a war of ecosystems,” Elop told investors at a recent London news conference.

Actually, it’s the same game that created the most valuable franchises in tech history, from IBM to Microsoft to Facebook. All successfully established themselves as “platforms,” in which countless entrepreneurs and programmers developed products and applications that gave value to customers and profitability to shareholders – sucking oxygen away from rivals all the while.

Platform leaders

In the 1960s, IBM trounced Sperry and other mainframe manufacturers by creating a soup-to-nuts stack of hardware, software and services.

In PCs, Microsoft erased Apple’s early lead by signing up hardwaremakers to create cheap machines, and software companies to develop Windows versions of everything from word processors to Tetris.

Facebook vanquished social networks such as MySpace by repositioning itself as a platform – a decision that led to the creation of gamemaker Zynga and other app companies that keep Facebook’s 500 million users hanging around.

What’s different this time is scale.

“Mobile is the biggest platform war ever,” said Bill Whyman, an analyst with International Strategy & Investment. More smart phones were sold than PCs in the fourth quarter, and sales should reach $120 billion this year. That doesn’t count billions more in mobile services, ads, and e-commerce.

This war will probably last for some time, too. Unlike with PCs, where the unquestioned victor – Microsoft – quickly emerged and enjoyed years of near monopoly, no one has a divine right to dominance in mobile. Microsoft crushed its competition by forcing people to make a choice. There were far more software applications for PCs, and most didn’t work on Macs. The more Microsoft-powered machines out there, the more people wrote software for them, the more people bought them, and the bigger the whole system became. Economists have a name for that phenomenon: “network effects.”

Appealing products

All cell phones can talk to each other and handle the same websites and e-mail systems, so winning means making products that function more effectively and appealingly. That sums up Apple’s success.

Steve Jobs figured out long ago that when people spend their own money, they’ll pay for something a lot nicer than the unsexy gear the cheapskates in corporate procurement choose. While others competed on price, Apple focused on making its products reliable and easy to use. Once customers buy an iPhone and start investing in iTunes songs and apps, they tend to stick with the system and keep buying – even though there’s no proprietary lock on the proverbial door.

Apple’s huge sales volume makes carriers and suppliers more likely to agree to its terms. The software that powers everything Apple makes – all variations of the Mac operating system OS X – is as intuitive to developers as Angry Birds is to app shoppers.

The result is economic leverage of staggering power. To create a blockbuster, Apple doesn’t need to spend billions on a start-from-scratch moon-shot of a development project. It just needs to tweak a previous hit.

Take the iPad, which is in many ways a large iPod touch. Apple won’t say how much the iPad cost to develop. Consider these numbers, though: In the year that ended Sept. 30, during which Apple introduced the iPad and the iPhone 4, the company spent $1.8 billion on research and development. Over the same period, Apple’s revenue increased by $22.3 billion. Nokia spent three times as much as Apple on R&D – $5.86 billion – and increased revenue by just $1.5 billion. No wonder that Apple, whose share of total global mobile-phone sales is only 4.2 percent, gets more than half the profit generated by the industry, according to research firm Asymco.

Fast-growing Android

Even Google, Apple’s mightiest rival, got only a $5 billion increase in sales on its $3.4 billion R&D budget. It does have plenty to show for its efforts, though: Its Android platform is growing at a blistering pace. In the fourth quarter, according to research firm Canalys, twice as many Android devices shipped as iPhones.

“Google is being far more aggressive in building its platform than Microsoft ever was,” says Bill Gurley, a partner at Benchmark Capital.

Barring big surprises, the other contenders – RIM, HP, and Microsoft – are in for a slog: too dependent on mobile devices to give up, yet lacking the tools to make much progress. All lost market share in 2010 and have far fewer apps available for their devices.”

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How Google Can Beat Facebook: No, Its Not on the Web

Posted in Board Of Intellectual Capital, Business models, FaceBook, google, Investments, Market research, Strategy, Technology, Web 2.0, Wireless 2.0, tagged , , , , , , , , , , , , , on February 21, 2011| Leave a Comment »

Article from GigaOm.

“A few years ago, Jeff Jarvis, a good friend of mine, published a book called What Would Google Do? When he wrote that book, Google had an aura of invincibility. Fast forward to today: Thanks to Facebook, it doesn’t seem so invincible. The new social web has passed it by. So, the question today is: What should Google do?

I’ve always maintained Google has to play to its strengths – that is, tap into its DNA of being an engineering-driven culture that can leverage its immense infrastructure. It also needs to leverage its existing assets even more, instead of chasing rainbows. In other words, it needs to look at Android and see if it can build a layer of services that get to the very essence of social experience: communication.

However, instead of getting bogged down by the old-fashioned notion of communication – phone calls, emails, instant messages and text messages – it needs to think about interactions. In other words, Google needs to think of a world beyond Google Talk, Google Chat and Google Voice.

To me, interactions are synchronous, are highly personal, are location-aware and allow the sharing of experiences, whether it’s photographs, video streams or simply smiley faces. Interactions are supposed to mimic the feeling of actually being there. Interactions are about enmeshing the virtual with the physical.

In a post earlier, I outlined that with the introduction of its unified Inbox, the constantly changing Facebook had shifted its core value proposition from being a plain vanilla social network to a communication company. Here’s a relevant bit from that post.

Facebook imagined email only as a subset of what is in reality communication. SMS, Chat, Facebook messages, status updates and email is how Zuckerberg sees the world. With the address book under its control, Facebook is now looking to become the “interaction hub” of our post-broadband, always-on lives. Having trained nearly 350 million people to use its stream-based, simple inbox, Facebook has reinvented the “communication” experience. …. Facebook as a service is amazingly effective when it focuses all its attention on what is the second order of friends – people you would like to stay in touch with, but just don’t have enough bandwidth (time) to stay in touch with. Those who matter to you the most are infinitely intimate, and as a result you communicate with them via SMS, IM Chat and voice. So far, this intimate communication has eluded Facebook. The launch of the new social inbox is a first step by Facebook to get a grip on this real world intimacy.

In 2007, I had argued that the real social network in our lives was the address book on our mobile phone. Google has access to real-world intimacy – the mobile phone address book – thanks to Android OS. All it has to do is use that as a lever to facilitate interactions.

In order to understand Google’s interaction-driven social future, one doesn’t have to look far: no further than Apple’s iTunes app store.  As you know, I have switched from BlackBerry to the iPhone, and as a result, I’ve been looking for a BBM replacement, and have been playing around with a score of apps.

In the process of searching for this app, I came across an app called Beluga, which essentially allows me to connect to my friends. And then I can create Pods (essentially Groups) with one or more of my friends. Sort of like what I did on BBM. Except, there’s more to Beluga.

It taps into my social graph (Facebook); it leverages my location, and it allows me to share photos as part of the messaging process. It’s a beautifully designed application that’s very inviting – and the experience is less communication, more interaction.

What’s beautiful about Beluga is it’s as personal and private as you want it to be. It’s just ironic that Beluga was co-founded by three Google engineers — Ben Davenport, Lucy Zhang and Jonathan Perlow — and if you see their bios, it is hardly a surprise that they ended up with an interaction-centric product like Beluga.

Yesterday, I was introduced to a new app called Yobongo, and it comes from a San Francisco startup co-founded by alumni of Justin.tv. It’s a good-looking application that leverages your location, allowing you to find people around you and to chat with them. It is at the extreme opposite of Beluga: It’s open, and you can chat with anyone. It is very real-time in nature. Of course, there are other apps like Yobongo: MessageParty, for example!

What’s common between these two apps is their ability for synchronous messaging. This messaging can, in turn, become the under-pinning of what I earlier called interactions.

Ability to interact on an ongoing basis anywhere, any time and sharing everything, from moments to emotions – is what social is all about. From my vantage point, this is what Google should focus on. If not — you know it very well — Facebook will.”

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Meet the New Mobile Network: It’s a Cloud

Posted in Board Of Intellectual Capital, tagged , , , , , , , , , on February 7, 2011| Leave a Comment »

Article from GigaOm.

“The crush of smartphones, tablets and laptops all vying for ever more bandwidth intense content, has forced mobile operators to beef up their backhaul, rally for more spectrum and implement new network technologies. It’s also reshaping the way they think and build out their networks. Or it will. Last week, I had outlined the the demand for data combined with more people wanting access to the mobile web are forcing operators to add more diverse network technologies, such as Wi-Fi, picocells and femtocells and of course more base stations, which are all of their effort to build more creative pricing plans.

Essentially the current networks and airwaves are unable to meet the demands of millions of consumers trying to download YouTube ( s goog) videos and Posting pictures to their Facebook profiles. Carriers have already embraced Wi-Fi offload but the thought is even that won’t be enough. Plus adding Wi-Fi, and even smaller base stations such as pico cells or even femtocells adds complexity to the network.

As I said in my previous article: “But multiple networks and more base stations, as well as more demand, are forcing operators to undergo a shift similar to what the data center saw as the demand for computing began to overwhelm the profits and abilities of systems administrators to handle it. For example, when it took one person to manage 10 servers, owning 500 was an investment, but now with corporations owning tens of thousands, such a ratio would constrain demand. So places that required a lot of computing adapted and came up with new architectures and software that helped become the redundant, autonomic and cloud-based computing centers familiar today.That same shift will have to happen in the mobile networks, and Intucell is just one company that will help make this shift a reality.”

My previous article focused on Intucell, a startup that’s pushing a technology to help operators reconfigure their networks in real time. There are other startups aiming to address this space, whether it’s with an all-in-one chip design that can work on multiple radio frequencies inside a base station or companies trying to deliver real-time pricing and billing information to operators. But the big gear makers aren’t oblivious to this trend, and today Alcatel-Lucent announced its lightRadio suite of products that answers many of the needs mobile operators have.

With this launch, Alcatel-Lucent has fundamentally rethought the way cellular networks are built. Instead of the traditional model of multiple radios and antennas cluttering up a large cellular tower with cabinets of electronics connected back to the web via a fiber or hardwired backhaul pipe, it has built smaller antennas attached to a single radio that can send and receive Wireless signals using multiple radio technologies including 4G 3G and some 2G technologies. These are then connected back to the network via microwave backhaul and the processing required to separate and route signals occurs deeper inside the network rather than at the base station.”

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Facebook raises $1.5 billion in investments so far

Posted in boic, Business models, tagged , , , , , on January 23, 2011| Leave a Comment »

Article from SFGate.

“In the company’s most revealing disclosure of its financial plans to date, Facebook Inc. said Friday that it has raised $1.5 billion in investments and planned to start reporting its finances publicly by April 2012.

The Palo Alto social networking powerhouse remains private, but a news release issued 15 minutes after the close of the stock markets signals that Facebook is moving closer to an initial public offering.

Facebook officials had previously remained mum on published reports that surfaced as the new year dawned about a deal that would bring a $450 million investment from New York’s Goldman Sachs Group Inc. and an additional $50 million from Digital Sky Technologies Inc. of Russia.

But the news release was Facebook’s first public statement on those reports, and it confirmed the investments were based on a company valuation of $50 billion.

Facebook also said it had the option to accept between $375 million and $1.5 billion from Goldman Sachs, which planned to raise that money by selling shares of a special Facebook fund to select clients.”

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