When I’m at a restaurant and say: “We’ll have a bottle of your Italian Merlot, please,” I actually mean: “Give me a bottle of your second cheapest wine, please.”
Many months ago at Pizza Express I fell into a well laid trap and assumed the second cheapest bottle of wine would be the second one on the list – below the house wine. I was wrong: The second and third cheapest bottles had switched places.
Now, check out the signup page for 37Signals’s Highrise shown below.
When I first saw this page I thought the Highrise house wine would be on the far right. It’s not. The solo and basic accounts are positioned the same as the Italian Merlot I ordered.
There’s certainly nothing wrong with this. It’s logical for businesses to try and draw attention to their higher margin products. The Guardian recently did a piece on “how restaurants entice us into choosing expensive meals“. The short answer is menu layout. The same as the Merlot and 37signals.
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Yesterday London’s main daily newspaper, The Evening Standard, reduced its price from 50p to zero. Libby Purves, who hosts Radio 4’s excellent Midweek, used the opportunity to weigh in on the Free debate in yesterday’s Times:
Content is not cost free. Writing is work. Musicianship involves cost and labour, art is not innately free, nor the infrastructure of news reporting. Until food, clothes, housing and transport are doled out free, content-makers need to be paid. The theory that advertising revenues will cover that, in any medium, is tosh.
Full article: If the future’s worth having, it won’t be free
This is very much in the same vein as Malcolm Gladwell’s book review in the New Yorker (where the illustration is from) of Chris Anderson’s book, Free.
Both Purves and Gladwell maintain that the advertising industry simply isn’t big enough to support expensive content such as investigative journalism. Anderson on the other hand maintains that in the future, most things will be free for the consumer and funded by advertising.
On both sides of the argument, the debate seems to be based more on dogma than data. Where is the emperical data that shows whether the ad industry can or cannot support a future of free? It would be refreshing if the debate would become more rigorous and scientific rather than being based on gut instict.
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Posted October 1, 2009, under
Wajapi
Today I can announce that Wajapi has become a Facebook application.
This means you can:
- Log on to Wajapi with your Facebook details by clicking one button
- Sign up for Wajapi by clicking one button
- Connect your current Wajapi account to your Facebook account
- Automatically share Wajapi books with your Facebook friends
Below is a screenshot of a book added on Wajapi appearing in a Facebook news feed:
Wajapi is not a Facebook-only application. It’s still a standalone website you can use to keep track of books whether you are on Facebook or not.
If you are on Facebook however, we recommend you give the Wajapi and Facebook connection a spin.
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Way back in January 2006 I blogged about the crazy model the Independent was using to charge for online content. At the time, for someone who wanted to follow, for example, Simon Carr’s columns online, there were three options:
- Subscribe to the column online for a year for £50,
- subscribe for a month for £10 or,
- buy a single column for £1.
At the time you could buy the whole paper for 60p, 40% cheaper than a single online column. Unsurprisingly, the columns didn’t exactly fly off the digital shelves and eventually they started giving them away for free.
In all likelihood, this is not a good long-term solution. An annual survey run by Pew Research Center showed that in 2008, the Internet had become more popular than newspapers as the primary news source for US consumers. So, it hardly makes sense to use digital content as a loss leader to increase sales of the print edition. Soon enough, there will be no print edition. It also seems that banners, as effective as they actually are, aren’t enough to support proper journalism.
Enter: Google. It seems that they might start helping news outlets charge for their content by adding micropayments to Checkout, their payment platform. Surely, this is the way forward.
If Simon Carr’s column takes 2% of the real estate of one Independent issue, charge 3% of the newsstand price for it. Or give the columns away for free and charge for the investigative journalism.
Micropayments might actually end up saving journalism. And Google will take a cut. They seem to be taking a cut from a lot of business models these days.
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The NY Times is running a piece called The Cloud Hanging Over Skype on the recent $2 billion aquisition:
Why were the winning bidders willing to pay so a high price for a company whose very existence could be threatened by this lawsuit? One possibility is that they have nerves of steel. The other is that they know something nobody else does.
It’s an interesting question. With the lawsuit from the Skype founders, Zennstrom and Friis, hanging over the company like a dark cloud, it seems like a colossal gamble. Even more so given the current economic climate. Following this story is going to be very intesreting.
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One of our products at Transmit is Smelltu (an english version is on its way), a web-app that measures banner pageviews, clicks and ROI. According to Doubleclick, the average clickthrough rate (CTR) on their network is ca. 0.1%. Our findings are similar although the CTR we measure can vary greatly according to size and placement. Furthermore, banners with high CTRs don’t always offer the highest return on investment. Sometimes a banner with a low CTR can bring in more clicks for less cash.
Anyway, let’s say I’m the average use and my personal CTR is around 0.1%, i.e. I click on one out of every 1,000 banners I’m exposed to. I clicked on this one from IndieClick:
It’s a beautiful banner with an interesting message. It’s not animated and still got my click. So, if you’re from IndieClick and you’re reading this, what kind of clickthrough rate is this banner of yours getting?
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Yesterday it was announced that Skype was being bought from eBay and would once more become an independent company. For Skype fans such as myself, this could be good news. Although the desktop client has been improving steadily over the past few years, the business model hasn’t.
Skype has more than 400 million registered users. It has a de-facto monopoly on VOIP. So why aren’t there donzens of desktop and web applications being built on top of the Skype technology? Why hasn’t Skype become a platform?
As a platform, Skype could solidify its hold on the market and it could make more money on SkypeIn, i.e. charging Skype users for calls to landlines. If it’s technically feasible, it seems obvious.
One answer might be that when eBay bought Skype, the underlying technology wasn’t included (which makes you wonder what eBay was smoking when they signed the $4 billion deal). Is that why the desktop client has been moving forward without any sign of development on the underlying technology?
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In a meeting Microsoft held for Wall Street analysts, Steve Ballmer noticed that a lot of them had Apple laptops. “Don’t bother to hide them. I’ve already counted them. And it’s okay—feel free [to use the Macs], so long as you’re running Office.”
Office doesn’t get much attention from commentators but it is one of Microsoft’s most important products. A few weeks ago, Business Week published an interesting article called “Microsoft Defends its Empire” where they discuss this importance and outline some changes that are being made for Office 2010.
The core problem with Office is that it has completely dominated its market for more than 10 years. Back when MS was launching Internet Explorer 7, I was at a conference where the lead developer was speaking. When he was asked where MS had been for the past 5 years the jist of his reply was, “it’s hard to innovate when you have 95% market share”. That’s why Internet Explorer was innovation free until Firefox started round two of the browser wars.
When you dominate:
- It’s hard to justify a big budget
- Innovation slows down because the development team doesn’t have “the fear”
- The innovator’s dilemma means that existing fat-margin markets get all the attention at the expense of emerging technologies
So now, in a classic case of innovator’s dilemma, Google docs might slowly be getting “good enough” to undermine MS’s dominance in the word processor and spreadsheet market.
With each new episode of the browser wars, the blogosphere becomes very excited. And for a good reason: Each iteration means the technology moves forwards.
I’m not sure bloggers will become as excited about innovation in the word processor market, but innovation – and competition – certainly is due.
Here come the barbarians.
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Posted July 17, 2009, under
Design
In episode 60 of Stackoverflow, Jeff and Joel discussed three logo contests they held for various sites they’ve built and when having users vote on a logo works and when not.
This reminded me when Doug Bowman left Google for Twitter and blogged about why:
[Google reduces] each decision to a simple logic problem. Remove all subjectivity and just look at the data. Data in your favor? Ok, launch it. Data shows negative effects? Back to the drawing board.
…
a team at Google couldn’t decide between two blues, so they’re testing 41 shades between each blue to see which one performs better. I had a recent debate over whether a border should be 3, 4 or 5 pixels wide, and was asked to prove my case. I can’t operate in an environment like that.
Honestly, I love Google’s approach. But then, I’m not a designer.
Markus Frind had a similar take on design in a Inc Magazine interview when he talked about aspects of his site that didn’t seem very user friendly:
Fixing the [site's] wonky images, for instance, might actually hurt Plenty of Fish. Right now, users are compelled to click on people’s profiles in order to get to the next screen and view proper headshots. That causes people to view more profiles and allows Frind, who gets paid by the page view, to serve more ads. “The site works,” he says. “Why should I change what works?”
The counter argument of course, was made by Gerald Ford: “If I’d asked my customers what they wanted, they’d have said a faster horse.” If we ask the audience on every design decision made, we might end up with a fairly ugly looking web. Just ask MySpace.
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Peter Day has been spending some time in Iceland and has produced two excellent episodes of his In Business radio show from “the island that went bust” as he puts it. The first episode was Iceland feels the chill and the second one was Iceland: Women.
Strangely, both episodes somehow sound optimistic. There’s light at the end of the tunnel.
In the first episode Halldór Eyjólfsson, former fisherman and CEO of 66 Degrees North, says that his company’s ads, shown above, explain the Icelandic character: “Some people say they are sad, but they’re not sad. They are fighting. They are survivors. They are living on the edge of where it’s feasible to live and they are surviving.” In fact, I know that facial expression very well. It’s how you look when the wind chill is -20° celcius.
The second episode is about the investment fund Auður Capital. It was founded by two female heavy-weights from the Icelandic investment community, Halla Tómasdóttir and Kristín Jónsdóttir, and it has feminine oriented approach to investing. “We’re prepared to use our logical intelligence as well as our emotional intelligence when it comes to investing,” they say. Their main point is that any business that is either too male or female dominated loses out on the benifits of diversity.
The situation may be bleak at the moment, but there is optimism in the entrepreneurial circles. Various Icelandic start-ups are using the sudden availability of a vast talent pool to do some very interesting things. The country will without a doubt rise from the ashes stronger than it was before, with a more diverse source of income than previously when it relied so heavily on one sector, be it aluminum, banking or cod.
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