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The NYT published an article about barcodes for cellphones in yesterday’s Sunday Times. The article does a good job summarizing many of the benefits of using your cell phone as a barcode scanner that can translate specialized two-dimensional barcodes from print or other offline media into some piece of digital information – a URL, a coupon, a ticket, etc. We think the concept is long overdue – barcodes and cellphones can bridge the offline world with the online world in many compelling ways. But frankly, we were surprised to even see an article in reference to barcode use in the US, as we believe the structural nature of the wireless industry here will keep us from enjoying the benefits of cellphone barcodes for a long time to come.

It will be difficult, as the article points out, for barcodes to enjoy widespread use if a client download is required to make things work. This is where the carriers can significantly accelerate adoption, by getting their handset vendors to pre-load the software onto phones so that barcode functionality comes by default. But alas, what’s in it for the carriers? More data traffic? A cut of advertising revenue?

Surely there are multiple business models that could make sense for carriers to offer barcode services, but that’s where the coordination issue comes in. Today, there are multiple standards for barcode technologies and multiple ways to implement those solutions on handsets. Would Canon want to run a magazine ad for its latest camcorder featuring a “for more information” barcode that could only be read by Sprint subscribers? Maybe, but that’s not nearly as compelling as if they could use a single barcode that would be accessible to any mobile subscriber, regardless of carrier. Think of it like a URL. Imagine if each website had to have a different URL depending on which ISP its users were coming through. At this point in the US, there is no equivalent of ICANN for barcodes, so there is no standardization and no coordination around this concept, which means, in our opinion, that US mobile subscribers will be cheated out of a very compelling and convenient user experience for quite awhile.

It’s a shame, really, but contrast this to China, where we think barcodes have a much better shot of making it to prime time. Lightspeed invested in a cellphone barcode company based in Beijing called Gmedia. We think the China market has a few key ingredients for the success of barcodes. First, China Mobile accounts for roughly 80% of the 400M+ wireless subscribers in the country. If you can strike a relationship with China Mobile, as Gmedia has for the “DM Code” flavor of barcodes, much of the coordination issue gets solved – China Mobile’s choice becomes the de facto standard. Advertisers can rest assured that if they go to the trouble of putting barcodes in their ads, most cellphone users will be able to use them. Second, China has almost 3x as many cellphone subscribers as broadband users, and the handset is the communications and internet device of choice for most people. Gmedia’s solution makes surfing the mobile web a heck of a lot more convenient than keying in URLs on a number pad. See an ad with a barcode, scan it, and your phone’s browser automatically takes you to the right destination on the web – no keying required. Finally, if China Mobile gets behind barcodes, it can exert alot of pressure on handset makers to pre-load the barcode software on handsets, which will be a pre-requisite for getting advertisers excited about incorporating barcodes into their ad campaigns. Nothing like the potential to reach 400M new customers with a new hook to motivate some experimentation.  China Mobile is poised to start exerting that pressure this year, so hopefully the barcode flywheel will start spinning in China very soon.

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Jay Gould (President and co-founder of Bolt.com) recently commented on one of my posts and posted himself about Amy Jo Kim‘s fantastic work on game mechanics and how they apply to social networks and user generated content. I was first exposed to her thinking during her presentation at the 2006 Etech conference last year (I’m currently at the 2007 Etech conference). Its truly thought leadership work and I urge you to think about how it might apply to your business.

Kim outlines the “five key mechanics of game design”;collecting things, earning points, providing feedback, exchanges, and customization; and then thinks about how these can apply in other consumer applications, especially those with a user generated component.

I’d leave it to you to read her specific material, but I think the broader idea of applying best practices of game mechanics to shape behaviour on social media sites is very interesting. Basically, the key question you’re trying to answer for a first time visitor is “what am I supposed to do here?”

One often repeated game design adage is “easy to learn, hard to master“. This is true of the best social media sites. At Myspace you quickly learn that the game is to get the most friends. At Piczo you quickly learn that the game is to have the coolest pages. At Stylehive it is to submit cool and fashionable clothing and furniture. At Yelp it’s to write useful, funny or cool reviews.

New users understand the game because of the smart application of Kim’s mechanics of game design. They see what you “score points” for (i.e. what metrics are measured on each page), what is “collected” (i.e. what badges and other icons are displayed on each page), what actions or things prompted “positive feedback” from other members of the community (what is “celebrated” through comments and for what users are thanked), and they look to the sites navigation and design as to cues as to what they should be doing.

This argues for an “application specific” approach to building social media, rather than a “platform” approach. If you have a platform that can and is used for many different purposes, a new user doesn’t necessarily know what to do when they get there. An “application specific” approach makes the game “easier to learn” because the cues all point in one direction.

Stylehive, a Lightspeed Portfolio company, and ThisNext, are great examples. At their base, they are social bookmarking products, similar to Kaboodle or eSnips, that can be used to bookmark anything on the web. But a casual visitor to the site quickly learns that this site is about clothing, accessories, furniture and fashion, and as a result other items (new stories, clever photographs etc) don’t get added to the hive.

Similarly, Digg as a platform can support any form of media being submitted. But it started out mostly technology news based, and it has controlled its growth by means of its navigational taxonomy. As the user base grows and clamors for more nodes to be added to the taxonomy (or adds new material regardless), Digg expands its scope, with pictures likely to be added in the future judging from user demand.

If you’re running a social media site, ask yourself if a new user will quickly “get the game” and then want to “get into the game”.

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I missed two posts earlier this month with the same general theme, that the best way to come up with a new web company is to take an old idea that works, and recycle it.

Marc Hedlund (founder of Wesabe) says to create a new company, take a UNIX command and webify it:

…find an old UNIX command that hasn’t yet been implemented on the web, and fix that. talk and finger became ICQ, LISTSERV became Yahoo! Groups, ls became (the original) Yahoo!, find and grep became Google, rn became Bloglines, pine became Gmail, mount is becoming S3, and bash is becoming Yahoo! Pipes. I didn’t get until tonight that Twitter is wall for the web.

The comments to his post are worth reading if you are into UNIX humor – it mostly went over my head. (I also skip the Ubuntu posts of Digg!)

Jason Kottke says (excerpting – go to his post for the full text):

…take something that everyone does with their friends and make it public and permanent. (Permanent as in permalinked.) Examples:

* Blogger, 1999. Blog posts = public email messages.
* Twitter, 2006. Twitter = public IM.
* Flickr, 2004. Flickr = public photo sharing.
* YouTube, 2005. YouTube = public home videos.

Both Jason and Marc are essentially advocating “High Concept” Startups.
In addition to curent online and software/OS behaviour, another good place to mine for new “high concept” ideas is the offline world.

“High concept” movies are movies that can be summarized in one sentence, often referencing another well known movie or book e.g. “Superfriends in 19th Century London“, “Schindler’s list in Rwanda“, “Jaws in space“, or “Heart of Darkness during the Vietnam War“.
[rockyou id=61482296&w=400&h=300]

Hence by analogy the “High Concept” startup (e.g. “List serv on the web“, “Public IM“, “Flickr for Video“, “Myspace for Baby Boomers“, “Bumper stickers for the web” etc.).

There is a lot to like about this approach to building a new company. The first is that you know that you’re targeting a large user base because you can observe an existing large market. The second is that adoption can be very rapid because you’re taking advantage of behavioural metaphors that people are already used to – they “know what to do”. (The importance of this concept can’t be overemphasized. I’ll blog more about this later). The third is that monetization models can often be predicted by analogy – a low CPM massive scale advertising business in client form will likely be a low CPM massive scale advertising business on the web. Past can be looked to as prologue.

The challenge of the “high concept startup” is that it is often not all that novel. There may well be multiple other companies targeting the same idea. There is nothing wrong with competition, but this creates a greater level of murkiness in the water so that often the “best” product is not the winner. Sites with early adoption – whether due to Distribution, Virality or just plain luck, can end up pulling away from the others. In all startups, execution is at least as important as the idea itself, but this is even more true for the “High Concept” startup.

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Today’s release of Google’s Cost-Per-Action (CPA) beta has generated a lot of attention. Most are focusing on the impact on affiliate networks such as Commission Junction or Link Share as the test is currently confined to Adsense ads that …

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Broadly speaking, there are two types of internet users, Time Rich (more time than money) and Time Poor (more money than time). I’d speculate that many of the readers of this blog fall into the Time Poor category, but …

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Since my earlier post on “Three ways to build an online media business to $50m in revenues” was well received, I thought I’d examine the e-commerce industry as well.

The margin structure in most (physical) ecommerce businesses is …

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As my previous post indicated, it is not easy to build an online media company to $50m in revenue. Depending on whether you’re broad reach, demographically focused, or can support endemic advertisers, you need to get to top 10, top …

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I’m speaking at the Web 2.0 Expo in April. Its a “how to” conference for people who are starting in or working at web 2.0 companies and companies that aspire to be “web 2.0″. The organizers have lined up a …

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Josh Kopelman has a good post this weekend about the friction between free and one penny when charging consumers for goods that can be delivered digitally (e.g. articles, video, music, information etc). As he points out, price elasticity is not …

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Thanks to a glitch in my Netvibes reader, I got exposed to an old but very useful post by David Cowan on “How to NOT write a business plan“. It sparked me to post on how to get …

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