Don’t Raise Money. Make Money!
by Aner Ravon
Monday April 28th 2008, 6:53 am
Filed under:
web 2.0The unanimous ‘word on the street’ is that recession is ahead and the social media is filled with ‘advice’ for web 2.0 start-up-ists on how to get through the storm. The most common (some would say irritating) advice is “Raise a lot of quickly! The gate is about to close!”.
Err…Great advice! Duh! Do you personally know any company that would say no to a big financial infusion right now? Web start ups that measure themselves in terms of ‘traction’ and ‘growth’ need venture money for survival. But the current problem is not with the desire for money but with the state of the feeding hand. When bull turns to bear the hand tightens and the ’Raise now’ chant becomes totally obsolete. As a matter of fact, it may even divert attention towards an endless street, causing more harm than good.
So what can you do? Well, to start with there’s an easy way to avoid dependence on VC money and that is to simply not need it. When you actually earn money your dependence on external financial sources is no longer vital for your survival. However when you do need survival money you’ll find it to be the most expensive money on earth. The logical conclusion is to become profitable at the earliest possible stage. Simple, isn’t it?
I know, it’s pretty difficult for a 3 person start up to become profitable as a result of a decision, before having developed groundbreaking technology o a critical mass of eyeballs. Still, the foundation of every business is with its ability to create value that can be measured in hard currency. Many web companies managed to postpone that part and to raise significant funding based on some promise for traffic that would eventually be monetized. Others banked on some innovative technology that would eventually be worth a lot to someone. Most of these companies are slightly more comfortable at this very moment, but will realize the meaning of life at a later stage and will have a very tough time adjusting. Earlier is better.
So how can you turn your web 2.0 business to a profitable one?
First, you need to stop thinking in terms of raising VC money. As a matter of fact, imagine you have already raised the last penny you would ever raise. Once you get over the panic stage, start working your brain towards getting out of such a mess. Does this mean the end of the road for you? If so, quit now. If you find this new curve ball motivating then you’re probably made of the right stuff.
The next step is to let go of your start up ego. Yeah, your service is groundbreaking, your technology is superb, your user experience is flawless, but chances are you’ll profit from the most unexpected angles of your efforts. Some unique piece of knowledge here and a bit of cunning technology there, everything someone would pay for should get priority. Don’t fear diversion from your roadmap. The sad truth is that nobody cares about your roadmap but yourselves. Most of your innovation will never be used regardless of your success, so why not stick to what makes money at the very beginning?
Last but not least, stop thinking in terms of an exit. Don’t pretend to be a venture capitalist, you’re not. You read about exits everyday and you tend to forget that this type of success is mostly random. The excitement from growing user bases is wearing off and web technologies were never considered big assets anyway. A profitable company, on the other hand, is always attractive. Sequoia asked you to come back with a billion dollar market opportunity? Let it go, there isn’t any, they should look someplace else. Don’t worry, as founders of a profitable company you’ll have no problem raising, not even at times of recession.
Aner Ravon
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Led Zeppelin Live? Boo-Freakin-Hoo
by Aner Ravon
Wednesday December 12th 2007, 2:37 pm
Filed under:
web 2.0,
musicYeah yeah, Led Zeppelin performed live….
The race for a ticket a ticket became such a reality show. Weddings rescheduled, funerals postponed, births put on hold. 20 lucky Israelis managed to get a chance to squeeze in between 20,000 lucky fans. The big prize? 4 old geezers (sorry, 3 and a decedent) recycling old records from the 70s.
I haven’t been to the show and it might as well have been a great show. I, too, grew up listening to Led Zep. I, too, felt the enlightenment when I was kicked out of a guitar store for playing Stairway to Heaven. But with all due respect, Led Zep were not a romantic band but a commercialized organization. I would have been happy to have seen them playing again, mostly for pure curiosity, but to me this specific concert is a big joke.
So what point am I trying to make?
Jimmy Page and Robert Plant are aging musicians with more money than they will ever need. Their legacy was sort of ok just the way it was. Young teenagers still play ‘Stairway’, People in my age group still listen to ’Kashmir’ and ‘All of My Love’ and Baby Boomers can still name every track that was published on Led Zep I-IV.
Their new addition to that legacy is a single VIP concert followed by a DVD collection. Wow.
Led Zep is one of a few groups that can actually do whatever the hell they wish to do. They could have broadcasted the concert for free on the internet and to 180 countries on live TV. Why not? They could have released the DVD on the official website. Make a wide impact on the industry. Why not?
But they chose more money instead. Whatever.
Aner Ravon
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Baseball Model? Gimme a Break!
by Aner Ravon
Baseball is my favorite sport. I was fortunate to be living in NY during the later half of the 1980s. I was even more fortunate to have witnessed Game 6 of the 1986 world series with my own eyes. I also played baseball in high school. I was a mediocre hitter, to be honest, not really disciplined and with some technique flaws. My batting average was ok, but I had too many strikeouts (patience!) and too little home runs (technique!). However, I was a great fielder. I played a mean shortstop (great glove) and was often used in center field as well (good sped and arm). Not a trivial combination. At 36, I still reminisce on the few home runs I managed to pull 20 years ago. I follow the game closely, I have written about it and I still get heartbroken every time the Mets collapse.
Which is why I almost get angry when I see baseball being abused.
Shai Tsur, in his recent posts, has taken a brave swing at explaining the VC model. While Shai has done well explaining the rational of VCs, he has brought to my attention a Marc Andreessen’s post in which he compared the VC model to the game of baseball:
“The whole structure of how the technology industry gets funded — by venture capitalists, angel investors, and Wall Street — is predicated on the baseball model. Out of ten swings at the bat, you get maybe seven strikeouts, two base hits, and if you are lucky, one home run. The base hits and the home runs pay for all the strikeouts.”
In other words, it’s about slugging percentage.
Yeah well.
That’s the only similarity I can find. The differences, however, are more striking. the game is so fundamentally different I don’t really know where to start.
First of all, a baseball hitter doesn’t choose his at at bats. When you’re up to the plate you have got to face the pitcher, be it Johan Santana or Roger Clemens. You can choose your hitting strategy - wait off some pitches and see if you can get ahead in the count, or be aggressive and jump on the first pitch - but in each case you HAVE to perform. VC’s choose their pitchers, pitches, teams, fields, leagues, arenas. Imagine what kind of batting average a decent Major League would pile up if he had such privilege.
The second difference is even more fundamental. In baseball, your goal is to win as many games as possible during the season. Not a single game or a single at bat, but a pennant. This is the source of terms such as pitching rotation, sacrifice, intentional walk, middle relief, etc. Slugging percentage is nice, but it doesn’t really say that much. Barry Bonds had a great slugging percentage but San Francisco hasn’t won anything in who knows how many years.
The third difference is with the true meaning of stats. Baseball is all about stats. If you hit .320 with 35 home runs this season, chances are you’ll hit more or less the same next season. In the start up industry your last at bat doesn’t mean much. In baseball terms, you can have an MVP season and then follow up with a sub mandoza line season. You can find yourself with seed stock at Google and be considered a genius. You can pass on the opportunity to have invested in Facebook and go down as a fool. It’s much more about the guts than about the stats.
VC’s are not baseball teams. A typical VC is a group of talented individuals who work at a firm whose sole purpose is to wisely invest other people’s money. Everybody likes hitting home runs, but striking out in this case could mean hurting someone else’s pension fund. It’s different than waiting for your next at bat. It’s different than losing today and winning tomorrow. In this case, sadly perhaps, every loss counts. You could argue that the law of averages takes care of that, but in reality when it comes to making decisions about investments VCs are much more risk averse than baseball players. The think many times before they swing, a privilege a 95 MPH fastball doesn’t grant.
I’m not saying the models don’t count. They do. VCs do try to make intelligent investments and earn the highest returns they can. But human factors count just as much, which is why people tend to invest in entrepreneurs they already know from past experiences. Images count, which is why VCs look to invest in big names. Job security counts, which is you need to be safe when its time to explaining killing a portfolio company. Nobody knows which company is the next Google and honestly, very few people trust their own judgment when it comes to making such predictions. In the end, the system works its way to its own optimum. It’s only natural, but don’t compare that to baseball.
Aner Ravon
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How Big Should You Let Your Ego Get?
by Aner Ravon
One factor that as a startupist you can’t help escaping is dealing with the size of your ego. It’s not that your ego wasn’t around before, but starting up is definitely a catalyst for its surfacing. There are plenty of reasons for it. You need to make many judgment calls during a single day. You need to fight off inferiority complexes triggered by watching the bigger players and their success. You need to motivate your team (and yourself) continuously and you have got to sell your vision to everyone almost every single minute.
No matter how successful you become, every time something happens to others your ego gets involved. You envy your friend next door for having raised $10M and when YOU get the $10M investment you envy your other friends’ big contract, or exit. You get pissed with a swift move from a bigger competitor that just blew off your business pitch. You feel sour after seeing the VC that turned you down 3 months ago investing in another company in your space. As romantic as it may sometimes seem, starting up involves dealing with rejection, a lot of rejection, much more than in any ordinary job.
It is commonly believed that for an entrepreneur, a big ego is not only a plus but a virtue. One of my friends who is also a partner in a leading Israeli VC has even admitted that they are somewhat looking for a big ego when they scout new ventures. A founder with a big ego (and big balls) can fight this rejection off while claiming an ability to beat Microsoft or Google - all with a confident face. You can’t become big if you don’t think you’re huge, right?
Wrong. As a matter of fact, the more I grow the more my belief is strengthened. The more you let go of you ego the better your chances are to succeed. Big balls have very little to do with big ego. Big balls mean you have faith in your ability to succeed. Big ego means you need an artificial layer to protect you from your own fears.
It’s safe to say every executive I have worked for had an above average ego. Some were good executives and some were bad executives, but none of them benefited from their big ego. It often caused them to never admit an obvious mistake or from taking good advice from people of lower rank but better judgment. When I look at my own career, my ego failed me much more than it helped me for the exact same reasons. It contributed to a wrong perception of reality and to Hubris. Any friction I ever had with a former boss had my ego involved. Professional and personal integrity are great points of character, but we very often disguise our big ass ego by abusing them.
I work with a group of talented individuals at Hooqs.com. All my colleagues are better than I am in at least one aspect of the start up game. The more I tuck in ego in the better I get. The more I listen to my ego, the more I have to regret. Straight and simple.
Getting a start up to a point of success involves a lot of faith, leadership, good perception of reality, resilience, setting personal example and a lot of self hyped confidence. This is called leadership, which in my book does not carry a big ego. You can tell everyone that you can beat Microsoft and that Bill Gates will work for you as a product manager, but it’s a load of crap. The only big shot names you will be able to hire at an early stage for the sake of their name are big shot egos with an agenda you don’t need. Chances are you’ll develop a great gallery of names, a bag of contradicting philosophies and a shitload of political issues to deal with. This doesn’t mean you shouldn’t hire supreme talent, you should, but here again your key to hiring real talent is with your ability to tuck in your ego and to let that talent contribute.
How does that blend with building billion dollar companies? My philosophy is that you can’t plan a billion dollar company. If you build a fantastic company it may eventually become one, but you need to build an excellent company before you even dream of it. The desire to foresee and fore-plan billion dollar companies is an original sin. It’s like trying to predict the future at the expense of decisions in the present. In the early stage, you need to focus on building a good product that people will be happy to use and pay for. You need to execute on a good marketing plan that encapsulates a good perception of reality. You need to make difficult compromises everyday and you mustn’t be deterred. If you do all that well you’ll build a good growing company.
My ego is not going anywhere, but I am going to do my best to confine it. Confidence, faith, devotion - absolutely. But the border line with just plain ego is very easy to miss.
Aner Ravon
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So Whose Fault Is It?
by Aner Ravon
Wednesday October 31st 2007, 6:56 am
Filed under:
web 2.0The Israeli high tech scene is going through an interesting shaping debate. A lot has been argued about why Israel has not been producing “a Nokia” or “a new CheckPoint” during the past 15 years. I have put most of the blame on the financial structure of the Israeli start up scene, Shai Tsur and Daniel Cohen wrote their own pieces and have argued that the overall atmosphere and entrepreneurial motivation contribute to early exits even more. The bottom line, though, is unanimous - Israel is underselling its high tech potential and this is a very dangerous trend.
As much as I’d like to blame the overall atmosphere, geography, management and personal greed, I just can’t. These criteria are not new. As a matter of fact, Israel’s situation has never been better in terms of ease of global reach and of management maturity. The “get rich fast” motivation of Israeli entrepreneurs is not different than anyone else’s. What has gone to extreme is the dependency on VCs.
Here’s a fact - a typical Israeli start up must get VC money and usually at an early stage. In order to satisfy the VC benchmark for the definition of potential, the typical Israeli entrepreneur must come up with a ridiculously ambitious dream - one that usually contradicts every bit of operational and marketing common sense. A dream that factors exponential year by year growth, global market reach, horizontal AND vertical relevance and most importantly - unique and patentable technology. She needs to present as many “$250M+” exit scenarios even if the company has yet to produce a single dollar or customer. Now, everyone knows a company can’t discuss billion dollar dreams before having created hundred dollar realities, but If the dream is too small, it’s not a VC company and if it’s not a VC company, there ain’t no start up. So instead of focusing on the future one can actually see, the debate shifts to whether the company can break the glass ceiling of a “$50M exit bracket”. This is, well, stupid. Nobody, not a single person on earth, has any idea of what company will be a billion dollar company in 5 years. Your guess is as good as anyone’s.
In reality, the entrepreneur doesn’t care about the grand scheme at the moment of marriage to a VC. She cares about getting through the first year so she doesn’t have to fire anyone and go back to moon-shining. So she is pushed to producing a plan of very little merit hoping that things somehow work out. The plan, needless to say, never materializes. The entrepreneur busts her ass and, if lucky talented, gets a few big customers which create growing revenue. Then, all of a sudden, it becomes evident that sales and delivery cycles are much longer than expected, that costs are much higher than planned and that the actual niche is really, really smaller than envisioned. The entrepreneur starts feeling the pressure of having failed to deliver and is developing hypertension. After all, the mortgage may not be paid in full after all and if “only the VCs would understand that this takes time”. Friction is imminent and when an exit becomes the only way out and the focus shifts to ”getting a $200M exit as long as we can”. An effort that usually ends up resulting with a $80M- $120M exit at best, after which everyone happy its over.
Sounds familiar? While this is schematic, shallow, cynical view with a lot of exceptions, I’ve been seeing this happening time and time again, like foretold chronicles. I have many entrepreneur friends and as may friends in the VC circle - all of them are usually very smart - why does this keep happening?
The missing piece, in my humble opinion, is with two elements. One is the creation of growth funds. A fund that invest in growing businesses and not in developing an exit. A fund that looks to solve mezzanine type stages when companies reach the stage of having real, not virtual, potential.
The other piece is with rewarding entrepreneurs so they can be personally calm. Here’s a big secret: if the founders get comfortable when the company is already half successful, chances of real success grows dramatically. They won’t be tempted to dump their shares before it’s too late and they won’t be facing all or nothing situations. Need an example? Take a look at Mark Zuckerberg. He’s a rich a guy but he ain’t going anywhere soon.
Aner Ravon
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Israeli High Tech On The Way to An Exit
by Aner Ravon
Sunday October 14th 2007, 9:42 am
Filed under:
web 2.0This is a pessimistic post.
Last week Traiana made a fantastic exit. Interwise was sold a week before for about par value. Saifun was dumped roughly around that time for the cash register and change. 3 Israeli stories, different IRR, similar long term outcome. Founders walk out with money, companies merging with American entities to slowly fade out.
The Israeli high tech scene fails to produce sustainable, ongoingly growing, companies. The problem is not the Israeli landscape, the problem is probably with having a wrong dream.
When it’s all about the Exit, focus shifts from succeeding as a company to succeeding as investors, speculators. From creating to trading. Operational record is overlooked for dream weaving. This is why Boaz Eitan walks out with $100M for having successfully sold a multi billion dollar balloon to investors despite having no operational evidence at any point.
This is no news, but the big question is why. Why do so few Israeli High Tech companies stick to the gold old business of producing goods and generating a profit. Why do so many high tech companies think of nothing but the exit to a large, fat, rich, American uncle. Did we forget how Nokia started? how Samsung came about? Can’t we see how inspiring CheckPoint and Amdocs can be? Or more importantly, do we not understand that this exit frenzy will vert quickly dry out the Israeli high tech mud pool?
As a start-up-ist I’ve been thinking a lot about that issue. I find the major cause to be the financial structure of the Israeli start up scene. Most Israeli startups are funded by VCs, Israeli and American, who in turn get most of their funding from out of Israel investors. This is good and bad. The VC model is based on selling their share for the highest amount in the shortest time. The fundamental focus of a “business” is to create a profit. Unfortunately, these two foci’s correlate less often then they do. An IPO may mean such correlation, as the VC can sell it’s share and the company can grow. However, very few companies fit the IPO model, and most companies are forced to think about their “business” in different terms. Terms such as “comparables”, “size of the (exit) opportunity”, “exit strategy” and “fitting the investment portfolio” take precedence and management attention away from real business decisions. Innovation becomes more important than operations because ideas can be sold earlier in the lifecycle. This means the company must be sold to a company who believes it can turn innovation to operations. Sold to, not become one.
A Solid, profitable, growing business has many advantages. For one, it can finance itself. It can organically grow. It can always be sold. Maybe not always for $250M at a minimum (as if), but the opportunity is continuous. Anywhere else, most investors would fancy investments in such companies.
Contrary to popular belief, it is possible to grow a company without thinking about the Exit. It is possible to grow the business and to develop good operational practices. It is possible to compete for real customers and win. It is possible to grow a Nokia in Israel. The Israeli high tech ground will not stay fertile without a few of those. If you’re unsure, take a look and India and China and see why it is only a question of time. As a startupist, this means you need to scrutinize your investors and not just “take money when you can from whoever you can”. easier said then done, I know. In away, this is contrary to the old text book approach. I just hope we all gather to update the text book before it’s too late.
Aner Ravon
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Mobile AdSense? Yes!
by Aner Ravon
Google’s mobile version of AdSense is finally in beta. After months of second hand rumors, these news now seem substantiated as Google has put together a mobile ad FAQ page. Ads are available in 13 countries: the United States, the United Kingdom, Japan, Germany, France, Italy, the Netherlands, Spain, China, Ireland, India, Russia and Australia. Advertisers can choose between 12 and 18 characters per ad.
The pricing and clearance processes are similar to the ones already established on the web with one major exception. In the mobile version, the user can actually place a call to the published business. If this doesn’t drive mobile click through price up then I find it hard to know what will.
Will this work? Absolutely! I believe this is exactly what the industry needs to kick-back. Banners are limited and the collective user patience for them is exhausted. Useful, contextual information on the mobile phone can actually add value to the browsing session.
Aner Ravon
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Live Earth Is All About Awareness
by Aner Ravon
Thursday July 05th 2007, 6:07 pm
Filed under:
web 2.0As we all know live earth is all about creating awareness. I probably don’t need to preach any of you on the importance of getting our act together.
We believe it is the duty of every internet and media company to help push awareness further. Now and not later. Our modest contribution is the following
HooQ. It contains Hey You, the new Madonna clip created officially for live earth, as well as other awareness creating short video clips. All clips can be downloaded to your phone - just click on “send to mobile” at the bottom left and send to your phone or to any phone you desire.
I encourage you not only to view and forward, but to create your own flavor using your own given talent, company, product or blog.
It may look a bit cynical at first. After all, I am promoting a product of our own service and you may classify it as a spin. Still , I genuinely and honestly believe that anyone, everyone, who can help create awareness should probably start doing so, now.
I appreciate your time and patience!
Aner Ravon
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iPhone - Would You Stand In Line for a Laptop with Dial-up Only?
by Aner Ravon
OK, so the hysteria has somewhat calmed down. The reviewers are indeed mostly raving, but I can’t help being puzzled. The iPhone is supposed to change the industry, yet it uses yesterday’s technology.
1. EDGE is a different name for horrible browsing experience. The only equivalent I can think of is a scooter engine trying to pull a Rolls Royce.
2. Side-loading only? you mean I need to connect my phone to the PC again? wasn’t it all about mobility?
3. Camera without zooming? Are we back in 2003 and nobody told me?
Hats off the Apple and Jobs. Their marketing strategy belongs in the MBA hall of fame. I am sure the iPhone will be a great phone, eventually. Right now it’s a good looking iPod that gets you stuck with one mobile operator for 2 years.
Aner Ravon
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Groove Mobile Taking Full Track Music Direct to Consumers
by Aner Ravon
Stuart O’brien reports that Groove Mobile is launching a direct D2C full track download service. The service will be based on the technology Groove has developed for SonyBMG and Vodafone UK will be the first to offer the service as a channel. Groove is busy recruiting additional labels and operator channels. From what I understand, Groove licenses the music and the operator agrees to put the service “on deck”, meaning that data charges will not be added to the full track purchase price.
This business model is significant in a number of ways.
From a user perspective the new service eliminates the hated hidden costs. As O’Brien reports, “Groove’s agreement with Vodafone means it can wrap the cost of the data up into the price of a £1.29 or £1.50 track, charged using premium SMS.” This is a key parameter; Evidence shows users won’t pay twice - for data and for content - it’s either one or the other.
The second significant factor is the fact Groove is moving up in value chain. From an enabler (Sprint, 3) to a service provider. In a perfect world, this is where companies like Groove should be - between the content provider and the operator, but as a service. This structure is key to user satisfaction, content richness and competitive pricing. Let’s hope other operators follow in the footsteps of Vodafone UK.
Aner Ravon
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Mobile YouTube - Are we There Yet? Jury is Still Out
by Aner Ravon
Ok, so the hot news are cooliing off and we all had a chance to check out Mobile YouTube by now. It’s time to call the Jury back in and get an interim verdict. My first impression of the service was awesome. It looked good, worked well on my 3G Nokia E61. Sure, the content is handpicked and handicapped, but it’s still a good start. The main issue I had with it was with the fact it’s still not working well on too many operators and devices.
Itay Gissin discussed Mobile YouTube in our HooQs blog this morning and tried to understand whether it’s just a mobile version of the “Internet YouTube” or the other way around - a new “YouTube approach” to mobile media. His conclusion, with which I agree, is that it’s a bit of both.
Starting with the good news. The most refreshing element of the new service is that it is Internet based and operator independent. In other words, it gives on deck portals a well deserved kick in the butt:
“Good news - No client needed, just come and get it with any Internet 3G phone! That’s exactly what this industry needed for a long time - an Internet giant meaning business & leveraging the Web’s open model on the mobile industry. Most other Internet content players view the operators as the “plug number” in their broken revenue model, trying to sell OPC (Other People’s Content) in traditional content models, overlooking the end-consumer reluctance to pay premium for content mobility.“
These are indeed great news and such that will help drive the industry much faster. After all, everyone looks at Google and YouTube when it comes to taking risks these days. Operators have realized by now they need to channel Internet content and not reinvent it, and such a move from such a significant player definetely helps drive the point. There are a couple of hard core issues though.
The first one is availability. Mobile YouTube is streaming based, a decision that can be probably attributed to legal caution. The video files are transcoded to 3GP format which means no iPhone, Windows Mobile or Blackberry. Streaming video is not a trivial end user feature and is still dependent on operator practices, proper device configuration and overall device support. Sticking to streaming video means that roughly 2 out of 3 potential 3G users are out of the game, without them even understanding why. The 3GP format is less of an issue and I expect YouTube to cover those other formats soon enough.
The second issue is the content itself. On the Internet, YouTube is a key media website, fitting well in the rich user environment. On mobile, users need better reasons to enter, not to say stick to a mobile portal. Mobile video is a different experience than Internet video. It involves more difficult navigation and has a price tag associated with it. The secret sauce of a successful mobile portal is made up of easy access and versatile content - variable sources, credible news, mobile use cases and so forth. YouTube is a part of that, but cannot cover the basic need by itself. As Itay summarizes:
“When I am on my mobile, I normally have a minute. Maybe two. The only way I will choose to go on the internet is if I know I am 2-3 clicks away from something that will Hook me up, and will be unique & forward-worthy. For that to happen, content sources will have to be much more varied than a YouTube. A community system will have to be working for me - Scouring the web, fetching content, filtering it for mobile consumption, connecting me with peers’ content, and more.”
Couldn’t agree more.
Aner Ravon
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HooQs Blog is Launched
by Aner Ravon
Remember I promised that I would keep DeGardener clean from work stuff?
I lied.
The official HooQs blog is up. Take a look! My latest post is about the LG Prada and the iPhone going head to head. Try getting it on your mobile and tell me what you think.
Aner Ravon
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PayPal Officially Releases Mobile Checkout APIs
by Aner Ravon
In March DeGardener broke out the scoop about PayPal intentions to launch Mobile Checkout. Now it’s finally formal. Matt Weathers, Moile Group Product Manager in PayPal tells us that PayPal will be formally announcing the availability of PayPal Mobile Checkout at the PayPal Developers Conference in Boston today. This is good news for any provider as premium SMS is complicated, sloppy and somewhat overly expensive. Our own web to mobile service, HooQs, will now be able to offer content providers a new monetizing route.
According to Weathers, the PayPal Mobile Checkout flow is a two page WAP buyer checkout which is managed by APIs. A buyer can pay by logging in with user name and password or phone and PIN. There’s no need for credit card info or bank info as the APIs are simplified versions of the existing Express Checkout APIs. PayPal expects to drive selling of a range of products via mobile phone (tickets, services, hardgoods, donations, transportation cards, etc).
“PayPal put a lot emphasis on reaching buyers and on solving the discovery challenges and have partnered with a set of design partners for that purpose. The APIs were designed to maximize merchant and developer control over the buyer experience. Checkout can be plugged into the process regardless of bearer - SMS marketing, search, WAP sites or client. The merchant sends the product details via the API and then gets a WAP link that can be delivered or displayed in SMS or WAP. It can also be triggered by J2ME client (on most modern phones), which can present an almost unique option for game and mobile application developers outside the operator deck.”
PayPal is very well positioned to take leadership of WAP based billing in the United States. This ecosystem takes a lot of presence and committed partners, and a player like PayPal holds a great position for obvious reasons. In Europe, however, PayPal will face quite some competition from quick runner Bango. [correction: Bango works with PayPal as a channel and therefore they do not compete but collaborate - Thank Matt and Ray for correcting] In any case, these recent development is very good news for all service providers who wish to monetize the mobile channel.
A demonstration of the mobile search is now on PayPal’s WAP home page (https://mobile.paypal.com/) under the link “Buy something”. Weather stresses that PayPal is definitely not getting into the search business, “The search demonstration is purely designed to show the potential for mobile commerce”.
Aner Ravon
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MEM2007 Insights - Kids Know Better
by Aner Ravon
Saturday June 09th 2007, 1:19 pm
Filed under:
web 2.0,
Aner Bio,
mobile,
user experience,
walled garden,
3G,
google,
nokia,
advertising,
MEM2007
I spent the week in Monaco at MEM2007. From the personal perspective it was a very exciting show, after all, first time HOOQs was on display. From that perspective we had an excellent show - great feedback and lots of users and leads. We have work cut out for us, but the good news is that the market is HOT! The need for personalized, open, operator independent web to mobile services is all over the place and is welcomed by users, operators, content providers, analysts and bloggers.
MEM2007 is not really a classic exhibition, it’s more of a conference. Participation is nearly exclusive to industry insiders and the tracks, therefore, are very professional. To a start-up-ist, these represent rare opportunities to take a 30,000 feet view and collect some insights that extend beyond the daily challenges. My own personal climax was not a single industry lecture or panel, even though all were very interesting at their own merit. To me, the most insightful session was a focus group with 10 different teenagers. These young adults were gathered from different countries - Australia, England, France, Italy, Finland, Germany - and were all surveyed about their digital lives. Here is some of what they told us:
1. The key elements teenagers look for in their mobile phones is appearance. Then come ability to play music, quality of camera and feature richness.
2. Nokia is the most popular handset brand. Out of the 10 participants, 5 had Nokias, 2 had Samsungs, 2 had LGs (Chocolate) and 1 had a Sony Ericsson. 7 out of 10 devices were 3G.
3. They don’t do mobile clients - only 1 participant ever downloaded a mobile application. A game. Used it a couple of times and ditched it.
4. Teenagers are smart shoppers. They don’t mind paying for Internet content, but hate buying stuff they can easily find for free. In other words, they will not buy songs for 3 Euros a pop. Contrary to popular belief, they buy a lot of CDs in addition to downloading free music. They know how to manage their music collection and how to get their favorite music on their mobile device.
5. On they other hand, all participants testified they would gladly buy new content if only they could find it easily. All participants agreed that the mobile operator portals are close to impossible to navigate through.
6. On top, the differences between operators and handsets make it impossible for users to share experiences. Not tracks or clips - pure information about where and how to find them!
7. They things they on their handsets are better Internet browsing and memory. They really don’t get why MP3 and Video enabled phones come with such little memory.
8. They don’t mind advertising if it makes content free. They are already used to online ant TV advertising, why object to mobile ads?
9. They all tried Google on their mobile and didn’t like it. The mobile experience does not provide anything close to the internet experience.
10. They don’t do MMS. All of them tried and all of them claim that “it doesn’t work”.
11. If they had to give up their TV, Mobile Phone or PC, 9 out of 10 would give up their TV (the only other answer was PC). None would let go of their mobile phone.
These young adults were not screaming in a vacuum. It was great to hear executives from operators presenting plans to further breakdown their walled gardens and push flat data rates. It seems like it’s only a question of price points now. This is music to the ears of user centric service providers. To me, however, getting the bartenders in front of our booth excited and HooQed was most rewarding than anything!
Aner Ravon
Track with:
HooQs is in Beta!
by Aner Ravon
My day job has become my all-around-the-day job lately as you can tell from the lack of recent writing. Well, the reason why is now out in beta!
HooQs is a user centric web to mobile service. You can search, create, save and share internet media with mobile phones. Your personal media is aggregated in channels which we call HooQs. HooQs can be saved, managed, sent to mobile phones around the world and of course, enjoyed. Registration is optional, however as a user you get your own internet rich media portal tailored to your own personal taste.
Since the whole idea is to get personal, my own favorite HooQs at the moment are Paris Hilton in Jail, Vintage TV Commercials, Best of Monty Python and Computer Game Nostalgia. My full HooQ board can be found here.
So get HooQed but be gentle, Beta means Beta! We do promise to do our best to continuously improve and personally I would more than welcome your feedback and comments!
HooQs is best used on a 3G phone.
Aner Ravon
Track with:
Sportingo and FIBA Integrate Basketball Content
by Aner Ravon
As a die hard Basketball fan and as a novice sports writer I was thrilled to hear the news from Sportingo and FIBA. Together FIBA and Sportingo will collaborate on extending Basketball stories, news and commentaries to Basketball fans around the world.
The deal is yet another case study for the quick evolution of neo-journalism. Sportingo is a highly growing user generated content platform dedicated to sports fans around the world. FIBA is a heavyweight basketball mainstream media player. Both need each other and can help each other reach new markets and depth. Sportingo will now be enabling people that are interested in basketball from around the world get their content properly integrated. This way the reader gets to encounter off topic stories such as basketball in Jordan as well as cover story materials such as Kobe wanting out of the Lakers.
To me Sportingo is proving that “user generated” content can actually mean better quality. There is a near infinite pool of talented sports fans who can write out there, that is if you know how to find and recruit them. At the end of the day, however, user generated content must integrate with mainstream sports media - where the intimate information is and where the large reader base already spends time and attention. Such integration is a must if you look to compete for being the sports fan choice for sports media.
The deal with FIBA is the third such deal Sportingo has put together, following similar deals with the Davis Cup and the New Zealand Rugby Team.
Aner Ravon
Track with:
Handsets Are Anything but Subsidized
by Aner Ravon
Monday May 14th 2007, 5:25 pm
Filed under:
web 2.0Sorry for disappearing on you. Workload has become quite significant (we are nearing launch) and frankly I just ran a little dry. Then today I stumbled upon a good blog which sparked me again. Hopefully this is what the doctor ordered.
In Why handsets should be subsidized and are not today, Ram Fish makes a good case for an idea I have long been subscribing to. I strongly recommend reading the post (or better yet, adding Brief Comments to your RSS feeds).
The short brief goes as follows:
“we are looking at a serious case of the misleading rhetoric shaping the discussion….Handset are not subsidized today. Consumers are paying an arm and a leg for their handsets. And we don’t even know how much we pay for the service and how much for handset. The remedy… is to have operators comply with Carterfone and have a “service only” no handset bundled monthly plan. Then we will know how much we really pay for handsets..”
“Moreover, I advise that the genocide in Darfur must be stopped”
Aner Ravon
Track with:
Moreover, The Genocide in Darfur Must be Stopped
by Aner Ravon
My friend Shahar has decided to sign off every post from now on with the following:
“Moreover, I advise that the genocide in Darfur must be stopped”
This is a paraphrase on Cato the Elder, who used to sign off every speech with a pledge to destroy Carthage (”Ceterum censeo Carthaginem esse”).
Israel and the whole Jewish people have commemorated the victims of Holocaust last week. We are very good in remembering what happened to us, we suck at preventing it from happening to others. We seem to have an infinite repository of excuses. Once it gets out of our immediate scope we simply do not care. I am not sure which one is worse.
I am very ashamed of the fact we have not taken a proactive stand in the Darfur situation. I am more ashamed of myself for having done nothing to date.
I am going to take Shahar up on his initiative and sign off every post with a pledge. The thought of generating a lot of noise from the blogosphere is not far fetched.
Moreover, I advise that the genocide in Darfur must be stopped
Aner Ravon
Track with:
Threadless and Tailless
by Aner Ravon
This post was contributed to Degardener by Shahar Even Dar. I strongly encourage you to visit Shahar’s writing here and here (in Hebrew). Shahar is a long time friend and thinker.
This is the first in a series of posts in which I try to look at the long tail theory from a critical angle and check it limits. It seems nearly impossible to overestimate the impact of Chris Anderson’s long tail theory, and it is surely inadvisable to underestimate it. And yet, one can find examples for both types of wrong reactions. I am not worried, in any sense, about old media corporations trying to dismiss the new reality and I will not shed a tear while watching them drain millions before waking up. It is the over estimators, Chris Anderson naturally being the most prominent one, that worry me.
It seems nearly impossible to overestimate the impact of ’s long tail theory, and it is surely inadvisable to underestimate it. And yet, one can find examples for both types of wrong reactions. I am not worried, in any sense, about old media corporations trying to dismiss the new reality and I will not shed a tear while watching them drain millions before waking up. It is the over estimators, Chris Anderson naturally being the most prominent one, that worry me.The long tail theory was quickly adopted by many people who found it to be the perfect tool for analyzing the new emerging online economy. Those people now tend to look at the long tail as the only possible model for online commerce, and strongly object to any contradicting evidence. In a recent post in Anderson’s blog, for example, he was startled by the claim in a NYT article, that the DVD market is hit-oriented. For Anderson, the mere thought that a niche market does not follow his famous model is a blasphemy. Furthermore, if you are looking at online success, you must think in long tail terms. You either try to become a long tail supplier like amazon or try to carve yourself a respectable niche somewhere along the tail of an existing market by using SEM and SEO. While these two approaches are viable, one should remember that other options still exist.
The most striking example for a success that does not comply with Anderson’s theory is the online T-shirt vendor, Threadless. Threadless, for those who don’t know it yet, is a niche store aimed at T-shirt aficionados. Aspiring designers are invited to submit designs for the open contest (as well as for periodic topical contests), submitted designs are uploaded to the site, to be scored by Threadless registered users. Winning designs are printed in rather low quantities and announced twice per month. Many of the designs get sold out rapidly, leaving users with the option to call for a reprint. In other words, Threadless artificially and on purpose chooses a path which Anderson would regard as crazy; it cuts its own tail. And yet, this is the exact reason for the success story that drives Threadless. This is why there is such a buzz in the blogosphere about Threadless, why people rush to buy the new designs as soon as they get the biweekly newsletter, and why people get emotionally involved with a T-shirt store. Many times artificial scarcity works!
The Threadless success could only happen on the internet, of course, it is based almost only on viral marketing through blog reactions, its customers are T-shirt fans scattered all over the globe, and the online voting process has a major part in creating the customers’ emotional involvement. But all those factors do not make Threadless a long tail company, as I said earlier, quite the opposite is true.
Some people might argue that Threadless simply found a respectable niche within the overall long tail market of T-shirts, in which Gap, for example, is located at the hits end, and Threadless, as well as others is located somewhere along the tail. I beg to differ. Anderson’s model is based on the idea that the availability of information lets each buyer find exactly what he or she was looking for instead of settling for some default hit. Threadless uses the availability of information to create an almost opposite effect, to generate a will for something you did not know you wanted. Instead of relying on infinite shelf space and back catalog, Threadless forces its customers to be aware of the very limited shelf space, and the merely nonexistent back catalog, and manages to do it successfully.
The lesson to be taken from this example is that as powerful as the long tail is, there are still many other paths to success and to exploit the advantages of the online economy, as long as you keep an open mind.
Full disclosure: This post was written while wearing a Threadless “Technology Ruins Nature” shirt.
Aner Ravon
Track with:
SuTree Takes Discovery Seriously
by Aner Ravon
Scott Karp wrote a great post last week about video needing discovery more than distribution. In case you’re lazy, here’s the bottom line:
“Whoever figures out a scalable, networked, distributed, Web 2.0-compliant solution to the online video discovery problem may find themselves in the rare position to compete with Google.”
No more, no less. And I totally agree.
SuTree seems to agree with well. Their video based, end user e-learning service is based on discovery. While many video sharing verticals (Aniboom, 5Min.com) create their own stock and while YouTube and MetaCafe manage huge horizontal repositories, SuTree takes a different approach - it searches, filters and aggregates instructional content from across the big web. This way, they believe, true vertical value can be provided to the user without compromising the content itself.
I tried it and it works. The results are rich, diversified and fetch content from good sources that I would never have known about otherwise. I ended up discovering not only content but great websites (check out VideoJug). it is clear the SuTree team are onto a good formula and that they build a good blend of technology, editorial work and collaborative filtering. I was very impressed with the depth of content I found. Quite a few categories and subcategories filled with plenty of high quality content. I also liked the “random lesson” which is offered on almost every page an that is very sticky in this case.
It’s not the service is free of flaws. The categories are too “serious” for my taste for example. I would appreciate some lightening up with more fun categories, such that would get me to both explore and contribute more often. I also found the site way too crowded with advertising. Finally, I found the free search very limited at this point. The service needs a lot more time and depth before the “long tail” can be effectively addressed with free search.
in the long run, one is tempted to ask the “why not YouTube?” inevitable question. I am a big believer in verticals and this is no exception. Yes, YouTube can ‘do it tomorrow’ but users will not look to e-learn on YouTube. The bigger challenge would come from the independent e-learning repositories which can expand to search. SuTree may develop a unique position of an ultimate search partner when that happens.
Aner Ravon
Track with:
WorkLight Leading Enterprise 2.0 Renaissance
by Aner Ravon
Serendipity Technologies is a unique web 2.0 company. It has earned a poll position within the Enterprise 2.0 space for a few good reasons.
Serendipity goes for for the big prize. Its Flagship solution, WorkLight™, is already helping global 500 and other enterprise customers catch up with web 2.0. The solution is a secure server-based software product that provides workers and consumers with “Web 2.0-style” access to corporate data stored in enterprise information systems and applications. Timely information is delivered using technologies such as RSS, Ajax, desktop and web-based gadgets and widgets, personalized homepages, social bookmarks, application mashups and instant messaging.
In other words, it ports “traditional” IT systems to the latest and greatest of web 2.0, making it more manageable, natural to use and yes, sexier. Early stage execution was impressive and Serendipity have secured significant early stage funding. This created a working environment that is anything but common in web 2.0 start-ups. Being an Enterprise solution provider makes it even more impressive. The Enterprise software market, while naturally more promising in the long run, is naturally much more complicated and cautious when it comes to embracing web 2.0 technologies.
I sat down with Shahar Kaminitz, Founder and CEO of WorkLight for a holiday eve Q and A session which is hereby brought to you.
Could you tell us a bit about WorkLight, how old is the company, where are you on the corporate and product life cycle?
Shahar: The company was established in the beginning of 2006 by Yuval Tarsi and myself, at which time we also raised our first round of financing, totaling over $5M. We are backed by leading venture capital funds – Genesis Partners and Index Ventures – and Shlomo Kramer, co-Founder of Checkpoint and Imperva’s CEO. We have officially released our product, called WorkLight, in January 2007 at the DEMO conference, and it is now generally available. WorkLight is currently implemented and being used at several Global 500 corporations. We operate from our offices in Boston, MA and Yakum, Israel.
What is your vision as the founder?
Shahar: For the last 18 years, I have been involved in different aspects of enterprise software as an engineer, manager and Venture Capital investor. The general direction enterprise software took during these years is towards more functionality but also great complexity. Information systems have become extremely complex to implement and offer a very poor user experience. In striking contrast to that, on the consumer side of the internet, things have gone drastically towards simplicity, as far as the end-user is concerned. Google, for example, has taught us all a lesson about the power of simplicity, which hides a lot of complexity “under the hood”. My vision is that employees will be able to enjoy the fun and productivity associated with all the new “web 2.0″ tools and services in their work environment. We introduce new ways of access to enterprise data, which are taken from the consumer world. For example, sales, inventory, orders and financial information will be accessible to employees in a personalized and convenient way, just like getting blog updates through RSS, building a Personalized Google page or creating a Yahoo widget.
What is the biggest challenge a modern organization needs to face in terms of information management today? How does WorkLight help solve it?
Shahar: Employees increasingly rely on information to do their job. This information is available from multiple enterprise applications, each one coming with its own proprietary, and often cumbersome, user interface. Workers need to login to each relevant application, search for the appropriate data record, and only then use it in the context of the business task at hand. The typical result is that employees either are not using the applications altogether, or suffer from what IDC calls “death by navigation”: a deadly effect on worker morale and productivity. Finding and consuming information is exactly what the Internet does so well for us as consumers. With WorkLight, people at work use the same services familiar to them at home to access enterprise data. WorkLight harnesses web 2.0 technologies to solve the information access problem. Enterprise application data become just like web content; accessible in the same form as web content and by means of the same web technologies. Furthermore, application data and web content can be freely mixed. We constantly add more web 2.0 interfaces to enterprise data to our current collection, which includes RSS, gadgets and widgets, popular personalized homepages, Instant Messaging and Social Bookmarking.
There is heavy debate regarding the maturity of enterprise 2.0. WorkLight is a Marquis company in that respect and one of the first to have raised significant early stage funding. Would you define WorkLight as an enterprise 2.0 company? Was it hard to rally quality investors behind the vision?
Shahar: There is indeed a lot of debate what is scope and definition of Enterprise 2.0, and I’m not sure that I have a clear position on that subject. Our customers are mostly unaware of the Enterprise 2.0 theme, but are very much aware of the widening gap between the “at work” and “at home” computing experience. What is important for WorkLight is that we solve a known and substantial business problem, and as result have a solid business model. This made things quite easy for us on the fund-raising front, not our association with a hot trend.
The borders between personal and corporate information are getting shadier. For example, you see personal blogs by executives becoming a legitimate part of the corporate and marketing strategy. But it also redefines information flow and security requirements inside the organization. What is your view on the expected evolution in that area?
Shahar: I am a big believer in blurring these boarders and eventually eliminating them completely. There is no reason why the employee needs to go back into the “dark ages” when at work. The corporation needs to take care of the infrastructure to enable this consumer-like experience in a secure and scalable way, and let the users do the rest.
Who do you believe you would eventually be “selling to”? The CIO? IT? Marketing? HR?
Shahar: Even from our first few sales an interesting picture arises: we are selling to the business units, where the business problem is painful. Often, end-users themselves are the drivers for change and incorporation of web 2.0 technologies in their workplace, facilitating a “grass-roots” process. This can be the sales, marketing, HR or finance department. IT is then engaged in the process to verify that the product adheres to corporate policies, mainly security.
At the personal level, as a start-up-ist, what are the most fulfilling moments you have? most challenging?
Shahar: The most fulfilling moments are when you see that something so young and fragile as a start-up company is able to impact people. This can be your customers, for whom you are able to generate real value and change the way they work. It can be industry analysts or potential business partners that positively react to your new technology. And it is certainly your employees who get engaged in something adventurous and innovative. Challenging moments are mostly related to the lonely feeling of a small company with limited resources “fighting” against the whole world.
How do you deal with the “chicken and egg” situation of the early stage - getting the product ready for the customers in parallel to getting the customers who define the product?
Shahar: We did not really suffer from this problem. We were able to get enough customers engaged in a very early stage, before the product was ready, just based on their need for a solution and the innovative nature of our technology. There are organizations, notably in the financial services sector, that have a strategic goal to identify and incorporate new technologies, and these people are great partners for a company in its first year.
What would make 2007 a successful year for WorkLight and for you?
Shahar: 2006 was the year of company setup and initial product development. We were delighted to be able to implement the product at several huge organizations and garner a lot of interest in our offering. 2007 is dedicated to extending our reach into more customer organizations in more markets and enriching the product with more “web 2.0″ capabilities. If at the end of the year our solution will be used by tens-of-thousand of people and will significantly impact their work experience, I will regard it a success.
Aner Ravon
Track with:
5Min.com - Great Use of Your Time!
by Aner Ravon
Always had the urge to spread the word on how to draw a perfect Superman? Or perhaps you’re looking to make your first steps as a DJ? If you love teaching or if you simply want to learn something new everyday without breaking a sweat then 5min.com is the place for you.
5Min.com is a new place for sharing short user generated video tutorials. The concept is stunningly simple and powerful; Video sharing networks have not captured that vital niche and expert networks are limited mostly to text. 5min.com jumps on that gap and covers it with style.
The destination itself is well categorized and designed. It is populated with pretty high quality content despite launching only a few days ago. The features demonstrate good depth as well. The tutorial creator lets “tutors” add textual storyboards and the Smart Player (really shique!) offers “students” the ability to view parts in slow motion, frame by frame and so forth. It’s very easy to envision quick spillover to YouTube and MetaCafe channels and to personal blogs and websites. It is also a great place for guerrilla marketers to pitch their goods. Clearly huge potential.
The founding team is comprised of Ran Harnevo, Hanan Lashover and Tal Siman-Tov. Ran also serves as CEO.
Who said fun cannot be serious? Enough said, go check it out!
Aner Ravon
Track with:
Payoneer Changing the World of ePayments
by Aner Ravon
Wednesday April 04th 2007, 7:13 am
Filed under:
web 2.0,
Aner Bio,
paypal,
venture capital,
payoneer,
mastercard,
payout,
odesk,
greylock,
moshe mor
I was aware of the fact that ePayments were going through the most significant revolution since the invention of the credit card, but Payoneer managed to blow me away. It’s one thing to solve a real problem. Managing to simultaneously address an array of real problems, on and off the web, is a totally different story. Payoneer mastered a way to put sticking glue on both.
Payoneer’s offering is for businesses, but it is an end user product - a prepaid rechargeable debit card. The card (by MasterCard), is connected to a personal, secure, web based “checking account”. Card holders can use the card on and off the internet, collect and make payments, withdraw cash at ATMs, transfer funds in and out at their will and so forth.
Businesses, on the other hand, can use the cards to avoid the huge headache involved in managing payments. Instead of paper checks, eChecks and wire-transfers, which altogether are complicated to manage, expensive and insufficient, they can opt for a much simpler solution – issue a debit card to each payee and just credit it.
Payoneer offers the solution as a one stop shop, including issuance, management and support and all for a very cost effective price. The company has announced this week that it has raised $4M led by Greylock Partners. It’s customer and early adopter base already includes names such as MetaCafe, oDesk, ROI Rocket and Plimus. I sat down with Moshe Mor of Greylock Partners and with Yuval Tal of Payoneer for a discussion that turned truly inspiring.
Can you pinpoint your target market?
Tal: “The sweet spot is clearly with web related companies who need to pay both companies and individuals. These companies can now put together an effective business environment. Managing payments to a global array of individuals is close to impossible. eChecks and direct deposits are not a popular payout method even in the US and then there are all sorts of international banking and currency issues which just kill the whole thing. The result is a market that remains mostly paper based. The web 2.0 economy is dependent on the need to manage payment relationships with people all over the world. Think about paying bloggers for their journalism, for example, or about experts offering their services at expert networks. They all need a pay-out solution as a fundamental component of any business environment. Our customers have a very simple solution – they issue debit cards and then reload it on an ongoing basis without worrying about anything else”
What about the end user?
Tal: “For the individual the situation is even more painful. Take user generated content, for example. Think about what it takes to actually benefit from it as an individual. Cashing international checks is a very complicated matter for many people in many countries. Very few publishers would transfer money to personal bank accounts. This whole situation sets the bar at a point which is not cost effective or time worthy for most people and therefore withholds the huge economic potential”.
So how can another card solve a complicated issue?
Tal: “The card is the best mechanism because it’s simple and universally accepted. MasterCard cards can be used at any store, website or ATM, worldwide. Unlike pure online solutions like PayPal, you don’t need to worry about how to withdraw your earnings. The global economy has created a dire need for fluent payments from US publishers to international contributors, for example, a need that presents a huge and limiting challenge and that is easily addressed by us.”
Mor: “Let’s take a look at the big picture for a minute. The web economy started mostly as a one-directional payment flow; people paying for stuff they buy online. Over the last few years, the web economy has developed to encompass many more payment flows: people paying people (which gave rise to PayPal), people getting paid for directing traffic to web sites (affiliate networks) and more recently, for generating content. While the pay-in flow has been around for a years and therefore has been addressed by multiple solutions, the pay-out flow hasn’t. The globalization of the web added a layer of complexity that required innovative solutions like prepaid cards. So we have an underserved and a growing need”
How can you compete with better established solutions like PayPal?
Tal: “I get this question a lot but you need to understand that Payoneer does not compete with PayPal. It is the credit card companies’ strategic interest to establish position in the pay-out market and they do it with partners like us. PayPal is a great solution but it is also limited. It is much more dominant in the US domestic market and with US bank account holders. You can’t use your PayPal account to get an ATM in India, for example, but you can easily use your MasterCard card and get an ATM card there. Our solution is good for individuals that are practically “unbanked” and for people who prefer not to use their day to day back account to get paid”
This seems like an opportunity for new entrants. What is Payoneer’s secret sauce?
Mor: “Payoneer is coming into this opportunity with what we believe is the first easy-to-use and comprehensive solution. I believe that the main barrier to entry is credibility and domain expertise. Very few teams have the breadth of experience that this unique space requires. It took Payoneer almost two years to develop a platform that can provide a reliable and credible solution and they started with a team that already knew what they were doing! “
Tal: “We needed to rally a major bank behind us, then get through MasterCard and this is before addressing any “regular” start up issues. Both needed to feel very comfortable with our ability to manage this type of operation. Our deep experience with online banking was necessary just to get started. This isn’t a space you simply walk into”
What is your longer term vision?
Tal: “I believe the real benefit businesses begin to realize is the upgraded relationship they will have built with their users. An ongoing billing relationship with an individual is a very meaningful asset. It means your customer carriers your logo in her pocket, literally and metaphorically. It means your customer pay regular visits to your website. Transforming any engagement to a sustainable billing relationship carries much deeper potential for brand attachment and for additional business.
Evidence shows that people tend to spend on the web what they earn from the web. This sets the stage for much bigger economics and our customers already begin to realize that. Check out Plimus, for example. A market place for user generated software that has integrated our solution. A classic example of a web 2.0 service provider that gets it”
Look, this market will clearly happen, the only question is whether it’s going to be us that get to lead it”
I remembered it was not too long ago that PayPal was a young, promising start up too. I have a strong feeling I will sit back and reflect on this post in a few years when Payoneer will long be a household name.
Aner Ravon
Track with:
Israeli Games 2007
by Aner Ravon
The Israeli Games 2007 event will take place on April 11th, at Kfar Hamakabya form 8 am to 6 PM. It will include 2 tracks and keynotes from Erel Margalit, JVP and Ofer Leidner from Oberon Media. Other speakers include Steve Weiss from Sony Online, Alexander Fernandez from Streamline Studios, Jessica Tams from the Casual Games Association, Shaul Olmert from Nickelodeon, Michael Eisenberg from Benchmark and other who will share different aspects about the market from the US, Europe and Israel. At the end of the event a unique round table about Metaverses will take place.
This event is a first in Israel in terms of size and focus. Its aim is to expose the games market, a $30 Billion in size, to local developers, talents and investors. Accordingly, the event’s management expects over 300 attendees. Over 100 job vacancies will be introduced.
The sponsors of this event this year are AMD ATI, JVP, Decima, Revolver, Nisha HR, Quick Soft, Lucid, 3DV and Vollee.
Aner Ravon
Track with:
Nokia, Google and Yahoo Square Off Over Mobile Killer App
by Aner Ravon
Saturday March 31st 2007, 11:11 am
Filed under:
web 2.0,
Convergence,
mobile,
user experience,
ctia,
walled garden,
3G,
search,
google,
nokia,
yahoo,
lgCTIA fueled some significant mobile news this week as Google, Nokia and Yahoo are about to crash helmets over the next mobile killer app.
Google has made a couple of significant steps this week. The more significant announcement came on Monday, as a strategic deal with LG was announced. Mike Evant reports that Google and LG will preinstall Google Maps, Gmail and Blogger on a wide variety of LG phones, making it a no brainer for carriers to ship and for users to try.
In addition, YouTube will be launching a mobile site as soon as the exclusivity period with Verizon Wireless expires. Unlike the Verizon version which is client based, the mobile YouTube will be WAP based. It will be interesting to see how YouTube deals with video streaming issues across different carriers, networks and devices. All in all a “two punch strategy”, Google for text and YouTube for video, could end up being very effective.
Nokia has not kept quiet. Unwired view is telling us about Nokia’s patent bound semantic visual search engine, screen shots and further explanation of the search process is provided. Katie Fehrenbacher speculates about the natural synergy with Nokia’s camera phones and if half the rumors are true, Google will soon have to go back to protecting home turf, at least when it comes to search innovation.
Yahoo has not kept silent and may very well be making the most concrete steps to date. The introduction of Mobile OneSearch is a promising mass market step, taking search to every internet enabled phone. Yahoo already offers Yahoo Go, the full blown Yahoo experience, to the high end, and together with OneSearch a comprehensive strategy seems to be forming.
These seemingly little steps are very significant for a number of reasons. Such proactive steps by handset manufacturers and web titans take the carriers further out of the “next killer app” equation. In addition, these provide indication that search, rich content discovery and messaging are the areas where the leading players look for the next killer app. Search has never been carrier territory and carriers have struggled with putting together winning propositions around content. On the other hand carriers do make a lot of money from content and tons of money from messaging. The battle over who owns what asset is definitely not over, but this time, I believe, the space is mature enough to focus on the criteria for splitting the larger pie rather than fighting over who gets to burn it.
Aner Ravon
Track with:
