Simplicity = Relevance = $$$ (Great products reduce the overload of choice)

All products and businesses serve people. Successful products and businesses create relevance for the people they serve.

I’ve often said that you know you have created relevance when your customer cannot sleep after hearing or reading about your product or service — the impact on his or her life is too important for that person to ignore, because of how relevant the offering is.

One of the easiest and best way of creating this relevance to help reduce the confusion in a person’s massively overloaded lives.

Today, people are massively overloaded — with information, with news, with ads (Aur Sunao anyone!?), and with options! Just remove those nuisances, and you’re relevant to someone!

Here is a great way, then, of identifying successful product opportunities:

1- Recognizing the said overload is simple enough — how many times can each of us tolerate the Aur Sunao ad before adding a todo list item that says “Switch cellphone carriers away from Mobilink — tell friends to do the same”

2- Reducing the said overload is simple enough as well — just remove the pains!

3- Launch, highlight, and trumpet your simplicity.

The first law of media states that if you reduce the total set of media, the attention to any specific media would increase — from competitive economics it implicitly says that the fewer choices of media will also be higher quality choices, and thus there will be a high probability that they will be relevant to the segment at large.

This is a fairly common approach of creating relevance through simplicity. One way of controlling the scope — and hence quality — of media presented is by creating niche-content, such as AAG TV.

This is the approach used to simplify the overload of news and media.

But what about the overload of Choice?!

Take a look at your desktops after a few months of use, and if you’re like me they will look like a war zone. Take a look at many plugin-enabled software products (such as Firefox or MS Word) with all of their options open (a problem called Feature Creep — see the Wikipedia entry on it).

Beyond software, look at Starbucks — which now boasts over 35 different ways of getting coffee! Or, perhaps, even down to Subway, with a lengthy exam to go through to make your sub.

Finally, take a look at ANY remote control being manufactured today, and try not to wonder why God decided to put you through that experience.

We live with WAY too many options, and this can more than overwhelm the typical person. Honestly, the choices we struggle through in day-to-day life makes the Office Clippy look like a refined gentleman in comparison.

The excessive options stop us from doing what we actually set out to do, and constantly give us moments to think and measure options and make decisions. Anyone, then, who can help us sift through the options and can allow us to actually do what it was that we wanted to do, will create successful products, and if nothing else allows you to build a successful niche set of customers.

Examples?

- Quiznos Subs VS Subway — If I’m going in to have a sandwich, dont put me through an exam that makes me lose my appetite — Quiznos menu structure is a clear winner.

- ANY TV remote control VS the Apple TV Remote — This is even on the CDF Engineering test for all applicants — a 6 button remote can do everything a 50 button one can, AND looks nicer too

- ANY CRM software VS 37Signal’s HighRise — When all we want to do is keep track of our company’s interactions with our customers, why have the sales team spend more than half the day filling up forms?

- MS Project Server + MS Sharepoint Server + MS Project Client VS BaseCamp or GoPlan – Ugh… dont even get me started on Project server series…

So… short answer to a long answer to a short question: Simplicity = Relevance = $$$

What is the Digg Effect?

Well, my humble attempt at creating some activity on digg for a recent post didn’t quite pan out.

On a side note: I believe that is because the total effort required for a new person to get digging is too much.

Today I talk about another basic term Evangelists and System Admins
should be aware of today (granted: it has been around for more than a
year now).

I’m talking about www.digg.com. Digg is a “social newspaper” — a news site where the people (YOU) decide which story on the internet is worth being on the front page of the virtual newspaper.

It is a fantastic demonstration of the effects of collective wisdom, and a great way to find news from the fringes that mainstream newspapers wont cover.

So what happens if your website lands on the front page? This article describes it well, but basically you get a sudden spike in web traffic that often your servers will not be able to handle. Digg users are proud of this “Digg Effect”.

What is so special anyway?

So earlier we talked about the Network Effect, which was a pull in interest and leads for your products / brand because of purely social or relationship-based effects. Marketing people specialized in word-of-mouth marketing spend the better half of their lives studying this.

The Digg Effect, on the other hand, is much more interesting. It is based on the idea of “collective wisdom” (cannot remember who coined the term) — that often people in a large enough number analyzing something collectively can yield better results than seasoned analysts.

The interesting thing is that this creates the same sense of insurance about a product than the Network Effect can. Even though anonymous strangers will vote on what they feel is a relevant story, collectively, new strangers looking at that will be compelled (perhaps out of curiosity) to explore other strangers recommendations.

Hmm…. maybe this is the virtual version of how all Pakistani people will gather immediately at the site of an accident?

Maybe. Or maybe it is part of general human nature to feel more secure with being one element of the greater opinions of masses, rather than the person on the fringe. It would be interesting to measure the correlation between Digg users and Social outcasts.

What do you guys think? Do you agree with peoples’ votes on www.digg.com ?

What is The Network Effect?

Understanding the Network Effect is almost critical to the life of a marketer focusing on long tail / edge-centric models.

Here is a live example of the effect in progress.

Yesterday I wrote a somewhat controversial post on this blog. Here is the traffic that resulted:

Just to be sure, yes, it’s all traffic for one post (seen below)

The thing is — almost all of these people have never visited Green & White before. So how did they hear about the blog? Why did they choose to come?

The evidence is here:

Notice all of the gmail, yahoo, and lums squirrelmail accounts.

So what does this example have to do with marketing?

Doesn’t controversy sell? Ok seriously.

Everyone who read the post proabably forwarded it to their friends and their friends and their friends.

If this was a product, I would just have to market this to one person — and the news would spread across the social networks to where people will be diving over each other to buy the product.

Provided ofcourse, that the product is actually valuable. Scratch that .. that the story around the product is valuable.

So, the product is a blog post, but maybe the story in these emails was “This raving madman is shunning lums — all students: organize yourself in groups to march out and burn buildings until he stops because we will be destroyed unless we defend our university”

That’s a good story, and it certainly drove people here in hordes with pitchforks and silver stakes.

A good actual physical product can do the same thing: A good product will automatically create a good story around it that people would want to

• explore for themselves to make their own opinions about
• give them an incentive to participate in the story of the product (by either sharing with others, or refining it for themselves)

Did anyone hear about or use this software Napster? Did you know they only ever marketed that product to 50 people?

They called up 50 students in 50 fraternities in 50 universities in America. “Hey man, there’s a cool new software which lets you share music files with your buddies”. That was their total marketing cost.

How many users did they have when the illegal version was shut down — 5M? 50M?

So now you know what a network effect is — the challenge: How to make one for something not controversial.

Is there really a market for the iRecord?

I wrote about this curious product iRecord a little while ago and was cautiously encouraging to the effort.

Recently in the comments I was told that they received some fair response at the recent CES (Consumer Electronics Show) show held in early January in Vegas.

The device is basically a small gadget that you can connect to your TV or DVD player, and record a live stream directly to your iPod Video or PSP at H.264 CIF.

The types of uses that could appeal consumers (off of the top of my head) include
(1) the MySpace / YouTube crowd that wants to quickly burn *cough*steal*cough* content from their TVs to their iPods, from there to their PC to upload to their fav sites and
(2) as a companion to Tivo where you can not only record the shows you miss, but also take them along in your daily subway commute.
(3) Some other fringe uses can include carrying clips of home videos that your burn right off of your camera, and taking this to your graphic designer friend’s place to burn out some of his footage. Sharing “Gaming Footage” (as the website suggests) is also good.

Now, as far as I know (pls correct me) Tivo lets you store the content for playback, but does not let people download it to their PCs. This is also one of the reasons AppleTV may not support that — there are significant DRM legal issues with a device whose sole purpose is to burn content from your TV, and I am not sure how iRecord is handling this.

My concern with iRecord is that they are a one-trick pony. While they may boast greater compatibility, the iRec product provides a simpler user interface and similar price point for the same basic function. Add to this the fact that all Apple has to do is negotiate deals with the networks to allow direct AppleTV to iPod recording and the money vested into this product goes to naught.

It is encouraging to hear that they have sold more than 5K units before initial shipments arrived, but I dont know if that unit quantity will be enough to maintain their price point of $200 and sustain all the mainstream marketing required to hit their target demographics.

At the least (again) I would encourage them to change their website. It (1) has WAY too much irrelevant details that distract me (the average consumer who is curious about the device) to find out what I am actually looking for and (2) seems built for business visitors in mind, although the “tell a friend” feature is a nice touch.

All that said and done, as a Technical Demo I think both the product and website serve the purpose well — Streaming Networks could gain by using this as technical demo and gaining distribution by licensing their technology into other products willing to integrate it (e.g. Tivo), or at most a Gaming Console accessory. I just dont see this sustaining in the mainstream market on its own, but then I could be corrected.

Last note: Abdul, you guys should keep up the good work and make a solid name
out of Pakistani products, but I do have to disagree on the “0$ in sales and marketing” — a website that has been live for 5 months, travel (and registration?) to CES etc counts as pretty serious marketing expense, but luckily it has paid off for you guys. Good luck with the rampup.

The Dot-Boom that never will… and innovations that say otherwise

I meant to write about this a few months ago.

For a few years now everyone from local startups to the government have been trumpeting the hopes of a dot-com revolution starting in Pakistan. Most of the time it is considered a simple cause-effect relationship between lower bandwidth rates and dot-com success.

I always advocate local startups to think global — be the next YouTube or Ebay or Yahoo. There are some operational hiccups in doing that but those can easily be overcome by connecting to a business-support network in the US, such as ex-pats.

But will a dot-com effort creating local solutions see success? In a word: no. In a few words: not with traditional solutions.

In fact, I would likely label what can happen in Pakistan as a Dot-Puff.

Read the rest of the post for reasons.

 

Local Company goes head-on against Apple?

Well ok, it’s not exactly a local company, and its not precisely taking on Apple, but its certainly worth discussing over coffee.

Streaming Networks is one of the few offshore development arms in Pakistan of companies focusing on Embedded System Software. They just recently announced the iRecord, a curious device that lets you record your TV directly into your iPod or PSP device. They are pricing it at $200 and seems to be positioned fairly directly against Apple’s own product line in the area.

Right now, the device only lets you record directly to the flash-based media storage devices, and has no internal storage. Some 100GB of flash-based internal storage and basic application software could have made this a decent PVR device. As it is, it doesn’t quite excite me.

So what about Apple? Well Steve Jobs had announced a very similar Apple product called iTV in August. That device, however, does the reverse path — it can take iTunes / iPod media and shifts it over to your TV. Apple announced this in their development conference and clearly that was meant to generate third-party applications for the platform before the January launch.

So although the two products differ in functionality, on paper they do look quite similar. It would be really interesting when the next revisions of both products each add the missing features and become practically the same thing.

I do see problems with SN’s product and their positioning strategy (SN : Please lighten up your website so it doesn’t feel like Spock giving an orientation to the Enterprise), but I wont discuss them here (call me if you really need to know). For now, it’s a good thing that a local development team built a product that was featured on Gizmodo.

I just hope that it doesn’t become another classic case study where “the engineers made something for which there was no consumer need”. I fear it may be so, but remain cautiously encouraging.

Kudos Series - 4: Mobilink PCO — Excellent business and market strategy by telecom operator

Now here is something that I can happily extend kudos to. This is a small lesson in good strategy.

Telecom companies are running commoditized businesses these days. So locking in the most volumes in the shortest amount of time is the key to success.

So, what do you do if you are a telecom operator and you find that some upcoming competitors have technology that can help them roll out networks faster and cheaper than you?

If your target market for rollout is the vast rural landscape of the country, what do you do if you know that the total cost of implementing your technology for network rollout is higher than the competition, and will probably take longer to actually do so with a traditional approach? What do you do considering also that in your target markets, the comparative value of your brand is only nominal

Answer : You focus on the edge (well atleast to a basic extent)

1. Take out all traditional costs from your rollout plan, by engaging the people at the very edge of the network. Considering the market is rural people, give them a direct financial incentive to consider your products.

In case of Mobilink, convince the people at the edges of the network to operate their own self-serving calling facility.

Results: Your total spend on marketing and sales for the edge would be next to nothing compared to returns. You could get a free slew of micro-franchises with people constantly promoting the usage of your services within communities of trust

2. Adopt a “minimum deterrance” strategy for technology roadmap to make the rollout costs comparable with competitors.

Rather than marketing micro-service plans (i.e. individual cell-phones), offer single products for communities themselves. If a village of 15 houses can share a single connection, so be it.

In case of Mobilink, positioning the product as a PCO rather than an individual connection.

Results: They only need to support one-to-two channels per 15 or so houses. This requires a lot less infrastructure to cover large areas, and the network can be rolled out very rapidly

3. Open up the revenue model based on the value of the money at the edge

Rs.1000-2000 may not mean much at all in cities, but it is significant money elsewhere.

People within the rural target market will be willing to pay premium for phone facilities, but their premium will still be insignificant perhaps to the telecom operator itself.

However, it will still be significant to the people at the edge.

So, you open up your revenue model and make the people part of your risks / rewards structure. They promote and sell your services, and operate your products responsibly. They are able to keep the small premium that the other people in those micro-communities are wiling to pay.

Sharing revenue with these people could perhaps be the best marketing tool for the target customers.

4. Take the right message to customers

Take time and care to understand exactly what would actually peak the interest of your customers from an advertisement.

It is not a jingle, not some silly demonstration of heroics or dominance — it is a human-to-human message about a better life.

The story should clearly describe the business case to the edge. The story should touch on the emotional undertones of a better life. The store should be clear and straight — in fact, it would be more of a sales call than a marketing one.

In short, you would do what Mobilink did. Its a great ad for the product and strategy.

Xbox360 in India - Great Ad

I was waging a war against sleep with coffee yesterday when I came across this Ad on TV, and I think its fantastic (couldn’t find a better quality one tho):

Watch it here

The ad’s great because it makes their indian target customers proud of their own heritage while embracing the new, which from what I’ve observed is a good way to sell something in India. The key messages are:

• So what if you think we’re (i.e. indians) all farmers and people in huts? We can be cool too
• We (i.e. indians) aren’t so far off from all the fun and excitement in the world… with the xbox we’re just as good as anyone else.
• The xbox360 can complete transform your life and fill it with all the joys of the world you can imagine

The right message for the audience, resulting from good local market knowledge.

Now, what is stopping PK ads to be as original as this one? Please, someone from the industry tell me.

Two great avenues for entreprenuers to become global supply partners

I mentioned earlier that it is important for Pakistan to become a part of the global supply business.

Disclaimer: China and other countries already have a significant head-start in what I am about to say here — the good thing is, that these avenues do not depend on who’s first.

Let’s get some facts out of the way :

Fact : we will face a greater set of resistance initially from international customers in convincing them to take their businesses to PK.

Fact : Part of this is an image problem of the country.

Fact : Most of it is a quality issue.

But here are two ideas for entrpreneurs and dynamic companies alike to think about.

As always, a long coffee-session follows. Refill your mugs before diving in.