Auf nach Railey und ein bisschen auf den Spuren von James Bond wandeln. Aber zurück zum Anfang. Der Holländer Peter und seine mylove hatten mir also ein Hotel gebucht- schön gelegen und mit Spa. Auf eine Massage hatte ich mich nämlich seit 3 Tagen – aber spätestens seit meiner Mangroventour - wirklich gefreut.

Holländer Peter war also mit seiner mylove Thaifrau verheiratetet. Hat zwei Töchter Jasmine (4) und Alisa (2) – wohnt seit 4 Jahren auf Krabi und vermisst manchmal die Heimat. Ist man Holländer, sollte man auf jeden Fall im Reisebüro am Busbahnhof von Krabi vorbeischauen. Er und seine Frau freuen sich.

Die Frage, ob Scooter fahren könne (wir würden wohl dazu Moped, Mofa oder ne 80ziger sagen) musste ich verneinen. Bekam aber eine Geschichte erzählt, dass er hier in Thailand Scooter fahren gelernt hätte und nach einer Woche mit seiner schwangeren Frau verunglückt wäre. Im tut auch heute noch die Schulter und der Ellenbogen davon weh. Seine Frau wüsste ja, wie man sich hinfallen lassen muss, um nicht verletzt zu werden. Ahja… ich bin immer noch nicht ermutigt Scooter fahren zu lernen. 

Dafür vergaß er meine Bitte an einer ATM vorbei zu fahren, brachte mich aber dafür heil zu einem Pier. Nein, ich hatte keine Steine in meinen Koffer gepackt. Aber 20 Kilo wiegen nunmal 20 Kilo und sie werden gefühlt jeden Tag schwerer. Ich liebe meine 4 Rollen. Die ganzen Rucksacktouristen – und davon gibt´s reichlich - tun mir echt leid.

Ein Ticket nach Railey zu bekommen, ist das einfachste der Welt. Man geht einfach an den Schalter und fragt danach. Für 80 Bat bekommt man einen Boot-Transfer. Allerdings keinen, der einem das Gepäckt trägt. Da stand ich also mit meinem 4-Rollen- Koffer und einer großen Handtasche. Nur über Sand und Wasser rollt es sich so schlecht. Es sollte ein Longtail-Boot sein, dass einfach so am Strand halt macht.

Dafür kam mir ein sehr netter Japaner zur Hilfe. Die restlichen Mitfahrer waren zwar Deutsche, aber die hatten damit zu tun, den besten Platz zu sichern. Ich hatte sie echt nicht vermisst. Diese spießigen kleinbürgenlichern Postbeamten, die im Thailandurlaub mal auf dicke Hose machen… Ich gab nicht zu erkennen, dass ich auch aus der Bundesrepublik komme.

Railay Bay

Der Japaner war für eine Woche mal schnell nach Thailand gekommen, um ein bisschen Urlaub zu machen und sich Railey Island anzuschauen. Flog aber morgen schon wieder zurück. Ich bedankte mich sehr herzlich bei ihm und nach einem viel Spaß noch, machte ich mich auf zur Rezeption, um in Railay Bay einzuchecken.

Gloymar’s, I am with you..  When we were asked for our thoughts about social media so far, I gave pause to the many terms, tools, and discoveries that we have learned over the course of the semester.

Before social media class, I am not sure how I would have defined the term “long-tail”. 

I am certain that I would not have thought of it as a retailing concept describing the niche strategy of selling a large number of unique items in relatively small quantities, but now thanks to social media class and Chris Anderson, its people like me who continue to give credence and validity to the long tail concept.  Thus, I am not a shopaholic.  From here on out, I am going to affectionately refer to myself as a constant connoisseur of online vendors like Ebay.com, Amazon.com, Netflix.com, and more. 

Can we talk about Google Reader?  The thought of knowing all of the websites that I visit on a daily basis are being streamed into one big database, and none of  my nosy colleagues can see what I am looking at–talk about online heaven. 

Let’s not forget about blogs. There is something really liberating about writing a blog.   While sort of like a diary, to me a blog is a less restrictive and a lot more inviting.  A traditional diary is usually kept under lock and key for your eyes only, but a blog provides a platform to let it all hangout.  Moreover, it invites comments.  Not that I really want to go back and forth with someone in the blogosphere, but there is sense of community so why not?  I just have to remember to link, link, and link some more if I want to drive traffic.

Now, my social media favorite is Wikipedia.  Wikipedia is the online encyclopedia where I can learn everything about almost anything.  Yes, I have to remember that it’s a crowd-sourced tool and that everyone has access it, and I can’t refer to it as the gospel truth, but it’s informative and feeds my curiosity. 

Ahh, good old social media.  Glorymar, what did we do before it?

Just thought I’d add a quick note about a few new tutorial links on the Tutorials, Tips and Techniques page.

New links today:

1. “How long does the tail for long-tail cast-on have to be?”
2. Backwards knitting (great for short spurts like knitting bobbles or very short rows)

A couple of other resources that have been added the last few weeks:

1. I-cord cast-on
2. Norwegian purl

Während in der westlichen Welt Allerseelen und Allerheiligen begangen wird, findet in Thailand, das seine Feste nach dem Mondkalender ausrichtet, das Thot Kraton statt. Es ist das Ende der Regenzeit und die Mönche bekommen neue Gewänder und die Kinder werden wie Operndiven herausgeputzt. Nach dem Sonnenuntergang schwimmen auf den Teichanlagen der Tempel oder an den Ufern des Meeres tausende blumen- und kerzengeschmückte Schiffchen, die, wenn kein Wind sie vorher ausbläst, ein langes Leben versprechen, – oder religiös gedeutet -   ein Sühneritual für all das darstellen, was man in diesem Jahr dem Wasser als Lebensspender angetan hat. Heißluftballons werden gestartet und Leuchtrakten in den Vollmondhimmel gejagt, die wie Fallschirme aufgehen und blumenartige Bukets in allen Farben entfalten.

Ich kaufe auch 2 Schiffchen, das Kratonfest zur Allerseelenfeier umwidmend, indem ich meiner verstorbenen Tochter und meines Vaters gedenke.

Die zahlreichen und gut erschlossenen Inseln, bizarren Felsformationen, unberührten Tauchgründe und wunderschönen Sandstrände vor und entlang der 2000 km langen Küste sind das Hauptreiseziel der Touristen aus aller Welt mit allen durch den Massentourismus ausgelösten negativen Begleiterscheinungen.

Am nächsten Morgen nehme ich eine Fähre nach Kho Laan und flüchte mich bald unter Deck, da meterhohe Brecher mich sonst beinahe über Bord gespült hätten.  Ein Longtail – Langboot mit Außenbordmotor und einem langen Steuerwedel wie die Barken in Venedíg – bringt mich ans Ufer. Dort komme ich mit einem Einheimischen ins Gespräch, einem Muslim aus Südthailand, der den Touristen Lederwaren anpreist.

Er erzählt mir von seinen ständigen Geldsorgen, seiner Frau, die durch einen Autounfall ums Leben gekommen ist, und von seiner Tochter, für die er sich ein besseres Leben wünscht. Ich kaufe ihm eine Geldbörse ab und bekomme noch einen eingefassten Stein dazugeschenkt, der aus dem selben Steinbruch sei wie der, welcher angeblich bei einem Überfall auf einen Bus in Bangkok dem das Leben gerettet hat, der in den Kugelhagel der Räuber geriet.

Leider ist der Stein zu schwer. Sicherheit hin oder her: Ich möchte kein Gewicht  um den Hals hängen haben.

The longtail – Chris Anderson.

Anderson legt in vijf webpagina’s uit wat volgens hem het begrip longtail inhoud en hoe dit terug te vinden is op het internet. Ik zal dit in één alinea herhalen. Doordat de consument op het internet veel meer keuze krijgt aangeboden dan in de gemiddelde winkel is zijn koopgedrag ook anders. Webwinkels verkopen namelijk van veel producten kleine aantallen. Waar in de winkels meestal veel van populaire producten wordt verkocht, Je kunt dus beter heel veel minder populaire producten verkopen voor een lagere prijs, dan een handje vol populaire producten. Dit is in het kort the longtail.

Het internet laat zich perfect lenen voor the longtail. In een cd-winkel met 400,000 cd’s zou je nooit kunnen vinden wat je zoekt. Op een website werkt dit wel. Eigenlijk bestaat dit principe al langer alleen wordt het nu online toegepast. Niks nieuws onder de zon eigenlijk. De rest van de vijf webpagina’s bestaan vooral uit herhaling en uitleg over drie belangrijke principes van the longtail. Anderson heeft een interessant artikel geschreven maar heeft naar mijn mening teveel woorden nodig om zijn verhaal te doen. Maar na Keen en Mason zijn we dat wel gewent.

Free –Chris Anderson.

Gillette is groot geworden door hun scheermesje goedkoop of gratis weg te geven. Hun geld verdienen ze door de mesjes los met veel marge te verkopen. Eerst creëren ze dus vraag naar een product om vervolgens een goedkoop product met veel winst aan de man te brengen. Veel bedrijven zouden deze strategie gaan volgen. Gameconsoles worden zonder winst verkocht maar de games zijn dan weer erg duur.

Volgens Anderson zit er een ander soort gratis aan te komen. En aanleiding voor deze vorm van gratis is… inderdaad het internet. Op het internet is het mogelijk om kwaliteit diensten aan te bieden voor 0 euro. Kijk maar naar google of youtube. Doordat de technologie steeds goedkoper wordt gaat de prijs ook omlaag. Totdat de prijs ze laag is dat je het product net zo goed gratis kunt maken. En dan is er een gratis product geboren. Maar hoe kan je dan geld verdienen als iets gratis is? Door er via een derde partij geld aan te verdienen. Je kan zoals google doet, het gedrag van google gebruikers door verkopen aan marketeers. Het komt erop neer dat er altijd ergens geld verdient moet worden. Alleen hangt er nu niet altijd een prijskaartje aan een product.

Wat betekent dit voor ons? Het betekent dat gratis de norm gaat worden. En als iets gratis is gaan mensen er slordig mee om. Je kan eindeloos consumeren en er niks voor betalen. Of we hier dan ook blij mee moeten zijn is nog maar de vraag.

Mattijs Besters

Ausführlich wurde heute schon über die Kulturflatrate geredet – leider in der Session “Neue Erlösmodelle für die Musikindustrie”. Dieses Thema hat natürlich noch viel mehr zu bieten. Statt flacher “früher war alles besser”-Rhetorik möchten wir darüber diskutieren wie man die ständig wandelnden Bedingungen nutzt und auf die Zukunft vorbereitet ist.

- Zeitvorschlag: 10:45, raum 1 - #WSMusik

Dabei soll aufbauend auf Konzepten wie

• 360°-Modell
• Long-Tail
• Blue Ocean
• Groundswell
• N=1
• Netzwerk
• Co-Creation

konkrete Anwendungsmöglicheiten für Musiker, Labels und Musikbegeisterte aufgezeigt und produktiv diskutiert werden. Wir möchten zusammen Erfahrungen, Entdeckungen und Strategien austauschen, die der Musik eine Zukunft sichern.

Wir freuen uns auf  Teilnehmer aus den verschiedensten Bereichen!

André Luce & Daniel Reinke

danke fürs Bild: Doublep1

We are blessed with two working cars which are completely paid off. One is gas-powered, the other diesel-powered. We run biodiesel through our VW Passat, which is the primary family vehicle. Great gas mileage and can haul quite a bit of gear + kids. And yes, I’m aware that biodiesel is not a long-term solution as an alternative fuel.

But what to do about our other vehicle, a Subaru Outback? It’s a terrific car, but dependent on gas. And it is primarily used by me for work meetings and errands alone. That’s a single person driving around a wagon capable of hauling quite a bit of stuff. And it is unloaded 90% of the time. Not a good use of resources; both ours and the earth’s. Time to fix this.

THE EXPERIMENT

I’m going to try an experiment of not driving a car by myself for one year.

A few caveats: note this experiment is “by myself”. I’ll still drive when needing to take the kids to school, which is not often. I can always purchase a kid trailer later; for now, I am transporting myself for work meetings and hauling cargo only. Second caveat: I commuted by bicycle for years and still have all that apparel and gear. Third caveat: for the vast majority of my current driving, it is local to our town which measures roughly 4 x 8 miles. That’s a relatively small geography to cover.

But this will be attempting to use a bicycle as a true car replacement, rather than just a commute vehicle replacement. The conditions and scenarios I’ll be riding in:

• Ride on 5% trails, 15% gravel, 80% road (live on a 1/2 mile gravel road).
• Weekly trips to town for meetings and light chores (UPS Store; book, drug, and hardware stores).
• Heavy hauling monthly chores (grocery store; garden supply compost and chicken feed).
• Four miles one way for all trips.

What am I hauling around town?

• 100 lbs of chicken feed (two 50 lb. bags).
• Dojo gear (long thin sticks) and soccer gear (e.g. balls, cleats, cones).
• Groceries (4-8 bags).
• Small miscellaneous errand stuff (book, drug, and hardware stores).
• Medium sized packages for work to/from UPS Store.

THE RIDE

There are several bicycle setups that could handle my needs and the above conditions:

1. Normal bike + electric assist + trailer.
2. Electric bike + trailer.
3. Cargo bike + electric assist.

I eliminated option #1 because I will tend to leave the trailer at home unless I have a specific chore in mind for it, which means I wouldn’t bea able to do any ad hoc cargo pickups. And a good two wheeled trailer is an added $500+ expense.

I eliminated option #2 because electric bikes are not geared for steep hills nor hauling 100 lbs. in a trailer.

Which leaves option #3, a longtail cargo bike. As a lifelong bicyclist, I had never heard of cargo bikes until I began researching them two months ago. Cargo bikes in various forms have been around Europe, but North American bike companies are now seeing the market open up for the longtail version. I like this option best as it moves me very far away from car dependence.

And I get to call myself a cargonista, which is a nifty term a fellow named DL Byron created. Still working on how to effectively combine that term with my recent label “Green Hawk“. In general, I am less concerned about the bike weight and more concerned about pedaling efficiency (especially for hills) and comfort (e.g. not sweating as much).

I ordered my option #3 cargo bike last week. I should receive my new 2010 Kona Ute (pictured here) sometime in October/November. Why a new bike rather than used? I could not find a way to build up my own longtail cargo bike for less than the $900 Kona Ute price tag, especially with front/rear disc brakes.

The primary “new bike” alternatives (both great alternatives, BTW) were the Surly Big Dummy ($2500 for a complete bike, before you add electric assist), a Yuba Munda (no disc brakes and I’m not crazy about a one-size-fits-all bike), or one of several hip Xtracycle-equipped options.

Given that I commuted by bicycle for years, I’ve still got all the apparel/gear, so outfitting the bike itself will be my only expense. I should earn all that money back within one year of not incurring the normal driving expenses (gas, oil changes, repairs, etc).

ELECTRIC ASSIST

“Not sweating”? “Electric assist”? What am I, you might be thinking, a wimp?

Well, no. So why does an in-shape bicyclist need electric assist? To conquer these hills while hauling 100 lb loads, and so that I can arrive at work meetings not too sweaty (no shower facilities).

So what exactly is “electric assist” (EA) for bicycles? EA is offers you assistance when pedaling (no pedal, no assistance) so you can ride longer, haul heavier loads, and tackle steeper hills. There are several different mechanisms for adding electric assist to your bicycle. Chris Martenson offers a good summary.

Given that I want front and rear disc brakes (imagine a rainy winter day, loaded with 100 lbs of cargo, going down a steep hill – you want disc brakes), that eliminates the Nine Continent system. And given that I want the dynamo hub on the front wheel for better traction when fully loaded, that eliminates the BionX system. That leaves the systems from Amped Bikes and eZee. Amped’s system is less expensive than eZee’s and gets good ratings. I’ll order their system this week, too.

REPLACING A CAR WITH A CAR?

The two other options my wife and I have discussed for replacing the Outback (but ultimately dismissed) were:

Yeah, that’s me… I have one of those big long bikes most people have only heard about. It’s called a Surly Big Dummy. I bought it as a frameset and built it up with Shimano Deore bits to keep the cost down. The rear section is the LongTail Kit from Xtracycle, which I bolted some modified Bell kids seats to the SnapDeck. The LongTail Kit is what makes the magic happen. I’ve got room to carry 6 bags of groceries and two kids. I’ve actually carried about 60lbs of stuff using my Xtracycle WideLoaders plus two kids ( another 70lbs ) and it rolls right along without any issues. This bike is the bomb!

People crack up at the name, but they sure do love the bike. Everywhere I go someone will inevitably ask, “Did you make that…”, or “where can I get one…”

I’ve had my Dummy since January 2009 and I’m still waiting for someone to drive/ride/walk by and yell, “Hey you Big Dummy..”

I use it to pick-up my boys from school as seen below, grocery store runs, running the dog, beach trips and occasionally commuting to work. It’s a killer SUB ( sports utility bike ) that can do pretty much anything were speed is not required. I’ve done some mild mountain biking on local horse trails/fire roads and it climbs amazingly well for a 50+lbs bike.

Dada, two boys and a Big Dummy

If you Facebook there is a group called “I love my Surly Big Dummy” with lots of Big Dummy pictures doing all kinds of stuff and hauling crazy looking loads.

In todays rapidly changing  world people says future lies in ecommerce. So, here i am listing one idea involving Online renting and hiring service using web 2.0 platform. this idea focuses on logtail which lacks depth but  width is enormous. I welcome any suggestion and remarks.

Executive Summary

Rental Services has been in operation for a long time. This sector has catered to different needs of users of the product as when there has been a demand for the same. It has become convenient for people to take items for different occasions such as parties, sports, business use etc. With the passage of time and increase in the number of product for rent, a need was felt by the consumers to know the past experience of the people who have already used the product and also to discuss about it. Erento.com was the first website launched in Germany who provided users with a Web 2.0 platform where the users could see the availability of products, their price, the ratings given by past users etc. The scope of this service is huge and it is only expected to grow in the future.  

When we look at the rental sector, some of the key trends are Value added services like highlighting an item, SMS about enquiry of a product, earning through advertisements, tie up with social networking sites to check the authenticity of the users.

When we looked at the Indian market and the presence of players in this sector in the country, we decided that our target group will consist of renters (persons who put up certain equipment on the site for rent) and hirers (refers to all members who take an item for rent on the site), which in effect meant owners and renters of almost anything.

As there are no players who are offering rental services in the country, we found out that this was because of competition faced from two factors-

ª  Traditional way of renting

Where people want to go to a shop near their homes and want to touch and feel the     product before taking them on rent

ª  Online buying and selling companies

Like vazoom.com, erenthub.com and also ebay.com who have established them in the country.

RentNHire.com will provide users with a number of services such as connecting users and allowing them to give feedback and ratings for a particular product used and of course, renting and hiring of products.

For the purpose of marketing our website we will use newspapers which will form the bulk of our marketing expenditure, a video of what we do on You Tube, tie up with social networking sites, banners, mail pop ups etc.

RentNHire.com will allow users to post their listings free of cost. Whenever a transaction of Rs.100 is made it will charge the owner of the product a commission of Rs.10 and for transactions above Rs. 100, a charge of Rs.10 + 5%.

For our financial model, we have taken number of listings as a basis of forming our model. Thus we have created different scenarios in which we have taken different combination of listings across categories of listing price and rate of conversion across different categories. We have taken a conservative approach in determining the no. of listings. Initially we are operating in India where this service has not started yet. Our main source of income would come from commission and the value added services that we provide to users. We took one of the scenarios as our basis of calculation and thus arrived at our income. In first two years we are having losses. At the end of 5 years the value of our company stands at Rs. 390.8 million.  

Table of Contents 

1.     Introduction..

2.     Company Description.

2.1       Company Overview.

2.2       Mission and Vision.

2.3       The Positioning Statement.

3.     Market and Competition..

3.1       Market Analysis.

3.1.1          Trends in the Market.

3.1.2          Market Development in India.

3.1.3          Market Size.

3.2       Competitive Scenario.

3.2.1.         Pioneer in this sector.

3.2.2.         Competition.

3.2.3.         Barriers to entry.

4.     Products and Services.

4.1       Product.

4.2       Services.

4.2.1          Renting.

4.2.2          Hirer.

4.2.3          Connecting People.

4.2.4          Feedback and Ratings.

4.2.5          Legal Agreement.

4.3       Value Added Services.

4.3.1          Highlight item..

4.3.2          SMS about enquiry directly to mobile phone.

4.3.3          Project Enquiry.

4.4      Pricing strategy followed by RentNHire.com

5.     Marketing and Sales.

6.     Financial Information.. 

1.  Introduction 

 “Rental Services” has been in operation for a long time. During its existence, the sector has catered to the requirements of consumer’s by lending products for parties, sports, equipment for business use etc. When consumers had to take any item on rent they had to go to the websites of the companies (who provided these services) and take any product they wanted on rent. But with the passage of time and increase in the number of product for rent, a need was felt by the consumers to know the past experience of the people who have already used the product and also to discuss about it.

Now this could happen by providing a Web 2.0 platform for the consumers, so that they can come to the website and see the availability of products, their price, the ratings given by past users etc.  Erento.com was first such website providing consumers a Web 2.0 experience, launched in Germany in 2003. From 2003 to date, the number of players offering a Web 2.0 platform to consumers has increased with players like Rentoid.com, Zilok.us.com, and the Hire hub coming into the market. The scope of this service is huge and it is only expected to grow in the future.  

Renting 

Company allows anyone, whether individuals or professionals, to rent or offer for rent anything in a few clicks. Company provides the platform for both individuals and professionals to offer in seconds any item for rent, so people have a quick and convenient access to anything they need on rent.

2.  Company Description 

2.1      Company Overview

Our company RentNHire.com is a centralized online rental market place. RentNHire allows anyone, be it an individual or professionals, to rent or offer for rent anything in just a few clicks. It provides a platform for both the owners of the asset and the hirer to come and meet, check the products- their features, availability, price etc- and even talk to other users of the products so as to get a review of what they will be using in the future.

2.2      Mission and Vision

RentNHire.com, with a desire to stay on the cutting edge of technology, wants to provide consumers with an access to luxury goods and aims to provide so through an experience of renting rather than ownership of the same. We state our mission statement as-

“Our Mission is to provide an alternative to individuals for the classic buy or sell option.”

Instead of looking to purchase a product which may be of one time use, it can very easily be rented out through our website at a nominal price.

We state our vision statement as-

“Our Vision is to become a household name in the hire and rental industry in India.”

2.3      The Positioning Statement

ª  RentNHire.com is a trust based market place that connects asset owners and renters and facilitates rental transactions of any products between them.

ª  RentNHire.com leverages the power of social networks, enabling members to refer friends and friends of friends to their communities.

3.  Market and Competition 

3.1      Market Analysis

3.1.1      Trends in the Market

ª  Value Added Services

• Like SMS about enquiry of a product
• Highlighting an Item – where one can highlight an item for a small amount

                            (These services are explained later in the report)

ª  Earning through advertisement

In the initial phase of their existence, companies are not using advertising as a source of their income. But with the passage of time and new players coming in, some of these sites have started using this mode for generating revenues.

ª  Identification check through social networking site (Face book, Linked in etc)

Websites all over the world have come up with this feature wherein they tie up with social networking sites in order to check the authenticity of a particular individual who wants to become a member of their website.

ª  From C2C to B2C

There is a huge challenge in a C2C environment to meet the demand and supply gap. Say for example, when a listing is available there may not be a hirer to take that product and when there is a demand for any product it might not be available for rent. So to bridge this gap, we have to stabilize at least one side- either the demand or the supply side. It’s difficult to keep a tab on the demand side as it is the consumer who decides upon it. We will concentrate on the supply side so that we can minimize this gap as far as possible.

To cover this demand supply gap companies are taking initiatives to bring renting companies (so that they list their items) on their website.     

3.1.2     Market Development in India

Last few years forecasts about rise of Internet consumer base and broadband penetration in India have been too bullish to project according to Market trends and research analysts reports. However continued Government support with de-licensing of this sector and liberal policies have given regular boost to this industry achieving good YOY growth.

Internet and broadband penetration levels were low in initial years, but increased significantly from 0.1% in 1998 to 4.5% in 2005 in India. At the end of 2006, Internet subscriptions rose to 8.5 million, of which two million were broadband showing a phenomenal increase (at the rate of 128% between December 2005 and December 2006).

However the number of actual Internet users in India is much larger, approximately fourfold in comparison to the number of subscriptions mentioned above (estimated to be 33 million Internet users in Sept 2006, of which 25 million can be regarded as active users) The country with inhabitants around 1.1 billion throws prospects of cumulative growth in front of Industrial conglomerates. The Internet population which was estimated 100mn internet users in India by year-end 2006, representing a penetration rate of just below 10%, is expected to grow close to 300 million by Y2009.

The following points are of importance-

ª  E-Commerce activities within India has exceeded USD 125M during FY2004-05

ª  The number of credit cards in India has shot up from 6.5mn in 2002 to 9 mn in 2003 and expected to reach 35mn by Y2010

ª  Online shoppers like ‘Home delivery’ about online shopping, and ‘Time saving’, also ‘24×7’ thing, they also like the ‘Ease of use’ and product comparison features

3.1.3     Market Size

                                         Source: IMRB’s syndicated research product – Internet in India (I-Cube) 

India has seen a number of players in online buying and selling of products in the Web 2.0 platform. Some of the names are erenthub.com, vazoom.com etc. But these websites are limited in the sense they only provide users with an option to either buy or sell products. Now if someone wants to use a product for a small period of time (say a week or fortnight) without acquiring the ownership of the same, it’s not possible to approach these sites. This is an area of opportunity for players like us to help consumers take products on rent for any period of time they want to. Surprisingly, our research showed that there are no players in India who are offering rental services. So we decided to take this opportunity and excel ourself in this field.

When we decided to enter in this sector we were not sure who our target audience would be. After analyzing the market and the presence of players in this sector, we decided that our target group will consist of-

ª  Renters- persons who put up certain equipment on the site for rent, and

ª  Hirers – refers to all members who take an item for rent on the site

This in effect means owners and renters of almost anything.

3.2      Competitive Scenario

3.2.1.   Pioneer in this sector

Web 2.0 is an absolute new platform to explore. The players who provide such services have emerged only a few years back in 2003 with erento.com (a USA based company) offering such service for the first time. Now in 2008 we have a few players who have emerged as Web 2.0 platforms, some names being rentoid.com, Irent2u etc. These websites act as mediators between consumers who put their products up for rent and those who come to the site to take them on rent.

Web 2.0 is a new concept in online renting of products. There are players who are Web 2.0 enabled but they are not huge in number compared to other sectors like online gaming etc. The players in this sector are operating in specific countries at this moment. With the concept still in its nascent stage it will take time to make a comparison between the players.

3.2.2.   Competition

There is no online rental services website in the country. The competition to RentNHire.com is generally from two factors-

ª  Traditional way of renting

Where people want to go to a shop near their homes and want to touch and feel the     product before taking them on rent

ª  Online buying and selling companies

Like vazoom.com, erenthub.com and also ebay.com who have established them in the country.

3.2.3.   Barriers to entry

 The entry barriers for RentNHire.com are the following

ª  Mounting Competitive Pressure

This is from players who are doing online buying and selling in the country, like ebay.com who sells 1 product a minute in the country

ª  Fraud

Lots of cases for fraud have occurred in the country and so the people of India are fearful giving their personal details online. This acts as an entry barrier for online rental companies.

4.  Products and Services

4.1           Product

We will be providing the users with an online platform where they can come list their products as well as take them on rent.

4.2           Services

4.2.1     Renting

Company allows anyone, whether individuals or professionals, to rent or offer for rent anything in a few clicks. Company provides the platform for both individuals and professionals to offer in seconds any item for rent, so people have a quick and convenient access to anything they need on occasion.

4.2.2     Hirer

A hirer can post a request for hiring a particular product.

4.2.3     Connecting People

Company provides the platform for communication between the hirer and the renter. For example, hirer is allowed to ask questions to renter about the products and they can also network with each other. There are Forums and Blogs where the customers can discuss about the products with each other.

4.2.4     Feedback and Ratings

Company allows the hirer to give feedback and ratings for the products they have used and also for the renter who has rented the product. An individual can also ask the question to owner about the product.

4.2.5     Legal Agreement

Standard Rental Agreement

The rental agreement is the default contract suggested whenever an individual will rent an item. One can also upload one’s own rental agreement, as long as it is a legal contract and reflects the terms fixed by the individual and the potential renters.

Company Responsibilities

This rental agreement is offered as an optional and free download from company’s website. Under no circumstances is company to be considered a direct or indirect party to this agreement. The agreement is strictly between the owner and the renter as dependent upon their mutual agreement.

4.3           Value Added Services

4.3.1      Highlight item

ª  With the additional option “highlight item” an item will be color highlighted in the list of items and is then very conspicuous

ª  It can be canceled at any time

ª  Highlighting only costs Rs.20 per month highlight item

4.3.2     SMS about enquiry directly to mobile phone

ª  Receive an SMS after making an enquiry

ª  Receive all the contact details

ª  You can switch this option on and off as you wish.

ª  Each text message costs Rs.5

4.3.3     Project Enquiry

A project enquiry (by the hirer) for a particular requirement can be made and an owner can bid for the same

ª  Example 1: For our management meeting we need 250 bar stools including delivery and pickup service

ª  Example 2: Need stage with 10 x 4 meter area plus lighting and sound equipment, for about 500 people

4.4  Pricing strategy followed by RentNHire.com

We do not charge members for listing their items on the website. We generally operate on a commission per transaction basis

ª  No listing fees

ª  Transaction fee

All the charging schemes that RentNHire.com has in its revenue model are chargeable on the owner of the product and the Company is not responsible for the delivery of any product.

5.  Marketing and Sales

Everyone seems to want an answer to the question “When will Web 2.0 startups start making money?” The implication is that unless we can answer the question, the “bubble” of Web 2.0 will burst and all of us who believe in this stuff will be revealed as fantasists. The fact is- it’s incredibly hard to make money as a Web 2.0 startup aimed at consumers. Google transformed the online world by first generating huge traffic, then finding a business model. Its success was based on a fantastically clever advertising mechanism that was automated, attracted new advertisers, and served searchers nearly as well as it served advertisers.

For a new start up like ours we will focus on the following to market our website-

ª  Newspaper

This will contribute to maximum amount as our marketing expenditure.  We are focusing on this mode of advertising because we are trying to get classified advertisement on newspaper to advertise online.

ª  YouTube

Advertise through YouTube by creating a small description of our business- what we are and what will we offer to customers.

ª  Social Networking Sites

We will use social networking sites like Linked in, Face book, Orkut to increase the visibility of RentNHire.com.

ª  Banners

We will put up banners in different places in the cities to make people aware of our website

ª  SEO

We will use Search Engine Optimization to increase the visibility of our website

ª  Mail pop ups

We will tie up with email services providers so that once a mail is send to a particular user it will show a pop up regarding our website.

6.  Financial Information

The whole aim of starting a new venture is to make money out of it. When a venture is about to start, owners are faced with a situation to decide the sources from where they can get funds and the appropriate use of the same.

When we decided to start RentNHire.com, we were faced with some similar thoughts. We then decided to develop our business model, the details of which are given below

Assumptions

We have taken different assumption to build our model.  In the first year we will limit our operations in three cities and in second year we will further expand to two more cities, where we will be having our company offices. So in the second year we will be having five offices across five cities covering North, West, South and Eastern part of India.  In the fourth year of our operations, we will move out to two more Indian cities and we will also start operating in two Asian countries. We have chosen to expand overseas in the fourth year as we will be able to fund all these expansions through internally generated funds.

For the purpose of developing our financial model, we have taken number of listings as a basis of forming the model. All further assumptions are based on the number of listings. We have also done a Scenario Analysis for different possible combinations of assumptions.

Our basis of number of listings is taken by taking websites like Zilok.com and erento.com as the benchmark which are in this domain for the past few years. So, on the basis of the number of listings on these sites, we have taken an estimated figure of the number of listings on our site. In first year we have taken a little conservative approach considering the situation in India and hence have taken number of listings to be 35,000 as compared to Zilok’s 1, 95,000 within 10 months of its launch.

On the basis of number of listings, we have created five different scenarios in which we have taken different combination of listings across categories of listing price and rate of conversion across different categories. By playing with different combinations we get an overall conversion rate, ticket size and commission per ticket corresponding to each scenario.

Under these four different scenarios, the conversion rate, average ticket size and commission per ticket are 

 Under these Scenarios the revenues that we are able to generate are

 (Calculations corresponding to all these scenarios are given in the excel sheet)

Revenue from value added services is calculated by taking the following assumptions

On the basis of these assumptions and corresponding to above described scenarios we will be able to generate revenue from value added services as following

Here we have seen that in all scenarios revenue from value added services are almost stable. This shows revenue from value added services are not getting affected by change in our assumptions.

 All the expenses pertaining to generation of these revenues are also given is expense sheet of excel file attached.

Breakup of revenue expenses in proportionate basis is as follows

               (Details of all these expenses are given in expense sheet)

Taking a conservative view on the revenues we carry forward with the assumptions of Scenario 0 to calculate the profit & loss of corresponding years. So profit after tax figures for Scenario  is

 Funds required for the purpose of business is

photo by TheTruthAbout, via Flickr

“Guaranteed to drive thousands of visitors to your site a month!”

“First place Google placement – guaranteed!”

I see advertisements like this every day. And I hate to be a killjoy, but this sort of program is NOT going to help you bring in qualified leads for your team. If you want sheer volume of site visitors, great. If you want traffic that will convert to customers, then this isn’t for you.

I know the law of large numbers says that the more people you can get through your doors (or in this case, your website) the more people will buy/become customers. While this, in theory, is true, you’re wasting marketing dollars on an advertising campaign that won’t produce qualified leads. Since most of us in the real world have to work within budgetary constraints, throwing good money after bad trying to get any Tom, Dick and Harry to visit your site is poor strategy.  Buying generic keywords that may or may not draw people interested in your services to your site just won’t convert well. Personally, I’d rather see a smaller volume of site visitors with a higher conversion rate.

A great way to ensure qualified leads are driven to your site is to bid on longtail keywords. Longtail keywords don’t drive a lot of traffic, but the traffic that is generated has a much higher conversion rate: these are people specifically looking for what you have to offer. For example, someone searching for “2007 Honda Civic Columbus Ohio” is a whole lot more likely to convert than someone looking for “Honda Columbus”. Since demand for these specific, longtail keywords is relatively low, so is the price. Don’t get discouraged by a lower site traffic report – instead, pay attention to your conversion rate. Remember it’s not just about big traffic numbers, it’s about SALES.

One thing’s for sure, people are passionate about free stuff. Free opens up availability to anyone, but also can devalue the product. In preparation of Chris Anderson’s new book “Free: the Future of a Radical Price” I’ve taken a moment to review some of the commentary regarding this controversial idea. Anderson feels certain that a ”downward pressure on prices represents an iron law of the digital economy.” According to him, “give a product away, and it can go viral. Charge a single cent for it and you’re in an entirely different business. . . . The truth is that zero is one market and any other price is another.”

There’s a trend that with advancement and exposure things get cheaper; then consumers expect this cost to continue declining or never raise. An example that contradicts this downward trend is Malcolm Gladwell’s response to Anderson’s book. He argues not all people expect things to get cheaper, the quality of the product makes people open their wallets. Today with anyone being a content producer, the difference between mediocre and good content is huge. For example, consumers are happy with catching their favorite show online for free, but alternatively feel okay paying a premium for ‘better’ content on HBO. It’s true what Malcolm implies: the only thing that’s certain is uncertainty.

I agree with Anderson that free generates a unique type of demand and we’re trending on a “downward pressure of prices,” although there is still a place for fee based subscription services alongside their free alternatives. If the trend of free continues, what value can we place on items to tell them apart? Typically a high price tag insinuates better quality, and without some type of price the content publisher’s brand recognition will determine the value. The content creation bubble has popped allowing many other contributors to enter this space, this causes a drastic change in the type of content available. Regarding Malcom’s argument about people paying for specialized content, Seth Godin enters the conversation by saying it’s not just specialized content, it’s uniquely specialized content that people will pay for.

Anderson remarks about the changing state of business models; with content being free, businesses need to find away to still make money. But how does this conversation of free impact web-based storytelling? First, this conversation is being heard by content creators, making them aware they might not make a cent. This could have a honest and profound affect on the content they produce. Motivation through money is quite strong, but motivation for peer acceptance seems to be increasingly more important.

Mark Cuban also looks at this discussion and says “what we are experiencing right now is “Better Than Free,” but what does he mean by this? According to Mark, items we’ve paid for in the past, like the newspaper or TV, but now get for free fall in this category. This helps define who content creators are; people looking to get paid the big bucks are passed over because of changing business models. Cuban notes, “you take on the role of identifying the best in breed for your business and use your resources to help those talented people figure out how to make money for themselves and for you.”

So, is Anderson right thinking that giving things away for free will make companies more profitable? I think so, but only if there’s a hard look at business models, the importance of brand identity and peer recognition, as well an understanding that content given away in a fashion that maximizes revenue and exposure is best, and not just “being distributed Freely” as Cuban says.

Tempo di Biennale a Venezia. I miei riccioluti capelli diventano dritti tutte le volte che m’informo sul prezzo dell’ingresso alle mostre d’arte contemporanea. L’effetto di drizzatura innaturale della chioma rivela fuor di dubbio la reale intenzione dei curatori delle mostre, che è quella di educare l’ ingenuo visitatore iniziandolo all’arte attraverso un forte choc.

Ebbene, prima di pagare il salato pedaggio per accedere al cuore dell’esposizione della Biennale, che si dipana tra i giardini e l’arsenale, ho deciso di girovagare per i padiglioni periferici, disseminati un po’ ovunque in città. Mi sento bendisposta nei confronti di questi eventi collaterali, e non soltanto perché l’ingresso è gratuito, ma perché mi incuriosisce tutto ciò che qualcuno ha deciso al posto mio di mettere un po’ ai margini, di presentare in tono minore, in base a chissà quali criteri. E allora via a zonzo, alla ricerca dei “padiglioncini”…

Un fidato amico mi porta diritto al padiglione tailandese, nella sede di Santa Croce 556. Il progetto allestito, Gondola al Paradiso Co., Ltd., è una presa in giro del turismo di massa in una Tailandia ridotta a stereotipo: la sala è organizzata come un’agenzia di viaggi, dove ogni immagine evoca paesaggi paradisiaci, incontri erotici facili e per tutti i gusti, il tutto condito da colorate orchidee, mango e pseudo-divinità orientali. Lo slogan “Let us show you the Paradise!”  è ripreso nell’opuscolo, infarcito di messaggi turistici ammiccanti redatti in un inglese approssimativo.

Il logo del padiglione gioca sulla commistione tra il longtail, tipica imbarcazione tailandese, e la gondola, simbolo della Venezia da cartolina. D’altra parte, in tema di turismo di massa non potevano mancare frecce avvelenate verso la città lagunare…   Altra felice invenzione è la dea Wantanocchio, a metà strada tra l’oriente sacro e il nostrano Pinocchio, che aiuta i lavoratori del turismo a raccontare splendide bugie ai clienti.

la dea Wantanocchio

L’idea di questo spazio espositivo è semplice, senza troppe pretese, a suo modo efficace. Proprio pochi giorni fa, navigando in internet mi sono imbattuta per caso nel titolo dell’intervento ad una conferenza di una giornalista, il quale recitava: In viaggio tra le righe: perché il giornalismo di viaggio racconta bugie. Certo, le informazioni ad uso turistico sono sempre menzognere, anche quando partono da dati reali, perché sono volutamente deformanti. Penso esista un’enorme sottovalutazione dell’ignoranza cui è condannato un turista occidentale quando se ne va in giro per il mondo. Anche il viaggiatore culturalmente più aperto riuscirà difficilmente a scostarsi da alcune idee preconcette che si è formato chissà come prima di partire. Ognuno vede quello che vuole vedere.

Quanto al padiglione, a sorpresa e in controtendenza rispetto alla più remunerativa “arte del turbamento”, che punta a disturbare la sensibilità dello spettatore con provocazioni a volte vecchie, sciocche e scontate, gli artisti hanno qui scelto la linea dell’ironia e della beffa sottile. In realtà, il tema del turismo tailandese offriva di per sé molti spunti per scandalizzare lo spettatore; penso ovviamente all’obbrobrio del turismo pedofilo. In questo specifico caso, forse, un più coraggioso accenno alla crudezza dei viaggi criminali verso la Tailandia – senza necessariamente ricorrere ad opere urtanti – sarebbe stato in questo caso giustificato e avrebbe dato un diverso spessore all’esposizione.

Pretty much difficult to live in the era of abundance… where you have unlimited choices. Article from GigaOm about iPhone Apps extra Long Tail, few weeks ago, kind of got me thinking how… (random thoughts…)

The article in short presents the situation of an extreme long tail in Apple App Store, based on AdMob data (read: interpret this carefully, as the data might be skewed a bit [or a lot], but since there is not really hard data being published by Apple, it’s probably the best proxy). According to AdMob, many of AppStore applications are not picking any users. It’s 50k world of apps over there, so understandable.

It also mentioned that your app should be: 1) tied to big brands/user-base [Twitter, AOL/AIM, ESPN, ...], 2) really-really good and got a viral campaign, 3) boosted by promotion from Apple – put on the front page.

True. Marketing plays a important role here. But brute force marketing is not enough lah. Can a new developer compete with the big giants in launching his/her apps to receive enough spotlight?

Time to play smart? Collaborate with the giants… deal with brands to help them achieve something through your apps, collaborate with Telco to enhance their services, work with them during iPhone launches (and re-launches), link to successful web services, bundle with devices (err… in case of other handset brands ya).

Address a specific niche is always another choice. If the niche is size-able enough for survival.

Or just go solo and bold and ready to accept the fact that our app is only downloaded (and bought) by tens of users. Time to find another business model (rather than expecting users to buy/pay for our apps).

Anyway, it’s a life in long tail, where there is seldom big megahits anymore… Killer apps, anyone, ever?

Escutei o álbum “Grand” da dupla Matt & Kim umas 4 vezes hoje. Lamentei ter perdido eles na passagem pelo Brasil (SP only, of course). Adoro a simplicidade e o alto astral da power dupla formada pelos dois. Teclado e bateria, quem diria!

Mas ao ler mais sobre eles, vejo que já se “venderam” e uma das músicas mais legais do CD, “Daylight”, foi vendida para um comercial de Bacardi. Nada de errado em “se vender”. Todo mundo tem que sobreviver, mas a velocidade com a qual bandas indies assinam com multinacionais é assustadora.

José Gonzalez com a Sony foi outro exemplo. Ele mesmo em um dos shows (eu fui!) tocou todas as suas músicas e no final veio com o “hit” Heartbeats, linkado aqui em cima, observando: “esta é a que vocês conhecem do YouTube”.

Tudo bem usar a exposição enorme que uma marca mundial lhe dá para crescer, mas fico pensando o quanto isso é perigoso. Uma banda que vem se defendendo só com shows e venda de mp3s, surfando na longtail, tem como chegar ao mainstream e se manter lá? Na verdade este pico de popularidade pode ser visto como as bandas tentando brincar de “half pipe”, mas elas não enxergam que não há a outra subida.

Exit stage right

News: Justin Kallu is shot. Bigger news: girl rocks the media with faux testimony.

What’s the real news here? Those who should be centre-stage are often now relegated to waiting in the wings. And vice versa. Which sparks the thought that Tom Stoppard’s play-then-film Rosencrantz and Guildenstern are dead was the precurser to realityTV – where we all watch the erstwhile insignificant people become the protagonists.

Lots of grandmothers across the globe have lamented the demise of the Silver Screen, stating that there are no more Fred Astaires, Frank Sinatras nor Marcello Mastrianis; so too can we lament the dearth (and death) of real news in the mass media: the long tail is wagging the dog. All those little media outlets – or weblogs, as we used to call them – are creating enough noise to get the broadsheets worked up. Or maybe the broadsheets are becoming niche players through their web coverage of events as has happened with Clare Werbeloff this week. Much to poor Justin Kallu’s dismay. Nice synopsis of the spin offs at Mumbrella. 

The shooting victim, Justin Kallu, 27, was reported on news.com as saying: “I’m just a bit upset about the fact that I’ve been shot and that I almost lost my life and there’s this girl all over the news getting popular all because she has no brains.” Ahh, bless. Will the real Justin Kallu please stand up.

Selama beberapa hari terakhir kebetulan Bingkarungan menyempatkan diri untuk mengamati berbagai kontes seo yang sedang berlangsung baik di Tanah Air maupun Mancanegara demi memperebutkan posisi pertama di mesin pencari, uniknya saya tertarik pada dua kata yang cukup menyita perhatian saya.

Dua kata tadi adalah Ngeping dan Seo, memang antar Ngeping dan Seo tidak bisa dipisahkan, Seo mutlak memerlukan ping tapi perlu dicatat ngeping gimana yang bagus untuk Seo? Apakah asal ngeping sampe pingsan atau ping pong dengan berbagai anchor yang tidak jelas? Bagi saya tentu saja jawabnya adalah “tidak” karena ngeping itu sendiri tidak bisa dong semau hati apalagi dengan target yang tidak jelas.

Untuk jenis ngeping dalam seo, menurut seorang pemula seperti saya jenisnya ada 2 macam tipe ngeping yang utama yakni tipe ngeping untuk seo harian atau tipe ngeping untuk sebuah kontes seo.

Bagaimana penjabarannya? Ok.. si Bingkarungan mulai menuturkan kata demi  kata yang akan terangkai di blog ini.. hihihi

1. Tipe ngeping untuk seo harian : Gunakanlah keyword berekor panjang atau istilah kerennya longtail keyword sehingga saat melakukan ping atau saat kita ngeping, kombinasi atau variasi keyword dapat lebih beragam dan tentunya tembakan keyword dari masing-masing variasi kata akan memiliki pangsa pasar tersendiri (contoh belum saya tampilkan di sini)
2. Tipe ngeping untuk seo kontes : Optimasikan On Page Seo semaksimal mungkin di artikel atau blog utama lalu berburulah sebanyak-banyaknya backlink dan maksimalkan dummy anda sebagai senjata untuk ngeping pada keyword target

Itu aja deh ulasan sederhana dari Bingkarungan, bingung? wajar…. jadi jangan ditanya ya wong saya cuma sekedar update postingan aja buat persiapan menaklukkan sebuah kontes seo, kalo proses ini berhasil pasti saya share lebih jauh di tulisan berikutnya

Marketing is in the midst of a C change. The old marketing model was to broadcast ideas and the message in hopes that your target customer was listening and would act on it. It’s TV thinking mentality- where the power of marketing was seen in the maxim that the more dollars you spent the further your message spread. It didn’t matter when or where or how the message was received. It was OK to interrupt anyone; anytime. Not so anymore. The system is broken. It was hurt by all the clutter and too many choices. The shift in power is to what experts are calling permission marketing. It’s a power shift away from the marketer to the gatekeeper-the consumer . The internet has brought all this about. TV, radio and direct mail are the traditional channels of communication invented by marketers for markets. They exist to sell ads. The internet doesn’t care. Marketers are no longer in charge. They can’t control the customer anymore- what they see, read or especially what they say.
So what will the future bring for marketing? Seth Godin recently looked in his crystal ball to identify these  fourteen future marketing trends:
1. Direct communication between the people who make it and people who buy it. Create a community of your customers and engage them, cutting out the middle man in the relationship. Be prepared to take the bumps and bruises that might come along with it.
2. Amplification of the consumer Every person is a designer or reviewer and has the power to reach others. They are the new gatekeepers; embrace them and invest in their experience. Seth says instead of selling stuff; spend your days creating joy.
3. Authentic stories mean people do not buy facts; so you must sell the story. Is it about the location; is it about being green; is it about ownership, is it about why and how we make it? Facts are not important; it’s about creating opportunity. So craft a story that resonates with your view of the world and then live the story. You must do both- the customer can always spot if you are telling the truth or not.
4. Speed or let’s be honest- hyper speed. It’s about no waiting, it’s about reorganizing your business and building your processes around speed.
5. Longtail has proven that if you give people a choice they will take it. Over half of books that Amazon carries aren’t available in book stores. Offer your customer a chance to have a choice. Look for the small profitable niche.
6. Outsourcing products and services that were inconceivable five years ago .
 Google has diced the world into bytes. Social media and the internet are now the marketing platform. Your website needs to be friendly to the visitor. But you also need to realize that they are treat searches have become sophisticated; they are landing deep into you site more often than on your home page.

Check back tomorrow for the the rest of trend list

Pieter Peach sent me this email yesterday. He’s just a great bloke who thinks about others. In doing so he shared some valuable insights he took from a web 2.0 conference. It was such a succinct and insightful email that I thought I’d share it here verbatim. Enjoy & digest. Steve Sammartino

Just came across an email I sent to myself from a session in W2.0NY last year.  Straightforward stuff, but a good reminder for me, thought I’d pass it along.

“Sitting here listening to a great speaker on developing next gen web 2.0 apps, will email stuff as I I hear it.

Just quickly

Requisites for successful 2.0 service
1.    Network effect
2.    Collective intelligence
3.    Lightweight business models
4.    Longtail (maybe)
5.    Encourage unintended uses
6.    Platform vs application
7.    End of the software release cycle
8.    Rich user experiences
9.    Innovation in assembly

Race to dominate remaining data classes.
Its hard to compete with those who have a head start in developing the network effect in a particular data class. “

Pieter

Starbucks

I will admit that I’m addicted to Starbucks.  Well, I was addicted to the once-upon-a-time Wall Street darling.  Starbucks, at one point, was one of America’s great growth stories from the late 90’s to as recently as the early 2000’s.   In less than 20 years, Starbucks grew from 100 coffee shops to over 12,000, and a record 2,000 stores opening in 2006 alone.  At one point, Starbucks had the brand equity most companies would die for. 

Typically, a company’s growth is a good thing.  However, many in the business community have quietly implied it was this explosive growth that has led to Starbucks’ demise.  Even the company’s CEO, Howard Schultz, himself admitted in a leaked internal document that for Starbucks, there are limits to growth.  Schultz pointed out that the company’s own growth strategy had posed problems.

“Stores no longer have the soul of the past and reflect a chain of stores vs. the warm feeling of a neighborhood store.”  – Howard Schultz

My, have times changed.  It seems the wheels started to fall off around the time of Schultz’ comments in 2007, following closely by the company’s announcement in mid-2008 that it was closing 600 stores and cutting 7% of its workforce.   Given its sales slump, Starbucks attempted countless efforts to diversify beyond the coffee cup - in an effort to lure new customers with ideas of grandeur.  Starbucks launched initiatives into pop culture, breakfast options, and most recently, VIA instant coffee.  Excuse me…instant coffee?  What happened to the “Starbucks Experience,” Mr. Schultz?

Which leads me to my final point – the customer service.  I remember around the time when my infatuation with Starbucks began in 2003, the customer service, or “experience” was impeccable.  Today, I’m greeted by grumpy “barista’s” who act as if they’re doing ME a favor, long lines with no sense of urgency from the barista, and my personal favorite – running out of coffee.  A coffee shop running out of coffee?  And, I’m not talking about running out during peak business hours!  And, I’m also not talking about this happening every once in awhile, but multiple times in 1 week.  This isn’t how the “Starbucks Experience” used to be…

Recognizing this, Starbucks closed all stores nationwide for several hours in 2008 to “re-train” their staff to guarantee complete customer satisfaction.   What a great marketing ploy that was, since in my opinion, they will need more of these “training sessions” to fix the broken business model.  If Dunkin’ Donuts, McDonalds or Caribou don’t give Starbucks its death sentence, Starbucks itself will with this “improved” customer service just might. 

I’m not quite at the point to sign up for the “I Hate Starbucks” blog, but I am a regular of this nifty little website giving me non-Starbucks alternatives.  Chris Anderson would certainly love this site – the mom and pop’s not hoping for the big hit, but rather working to thrive in a niche market.  Certainly, not the strategy of Starbucks.

I just finished reading Clay Shirky’s *phenomenal* (if comprehensive — i.e. long) post on the future of newspapers journalism that everyone was talking about at SXSW a couple weeks ago. Anyone interested in journalism as a social utility (which should be everyone IMHO) should make the time to read this piece in full.

But the reason I’m writing about it here is to highlight how many of the lessons Shirky has drawn from the plight of the newspaper industry in the Internet age can be equally applied to the entertainment industry (i.e. studios, labels, networks, and publishers). Here is my Readers’ Digest version of Shirky’s post with notes added to emphasize the analogies to the entertainment industry:

The problem newspapers face isn’t that they didn’t see the internet coming. They not only saw it miles off, they figured out early on that they needed a plan to deal with it, and during the early 90s they came up with not just one plan but several…As these ideas were articulated, there was intense debate about the merits of various scenarios…In all this conversation, there was one scenario that was widely regarded as unthinkable, a scenario that didn’t get much discussion in the nation’s newsrooms, for the obvious reason.

The unthinkable scenario unfolded something like this: The ability to share content wouldn’t shrink, it would grow…People would resist being educated to act against their own desires. Old habits of advertisers and readers would not transfer online. Even ferocious litigation would be inadequate to constrain massive, sustained law-breaking. (Prohibition redux.)…DRM’s requirement that the attacker be allowed to decode the content would be an insuperable flaw. And, per Thompson, suing people who love something so much they want to share it would piss them off.

Revolutions create a curious inversion of perception. In ordinary times, people who do no more than describe the world around them are seen as pragmatists, while those who imagine fabulous alternative futures are viewed as radicals. The last couple of decades haven’t been ordinary, however. Inside the papers, the pragmatists were the ones simply looking out the window and noticing that the real world was increasingly resembling the unthinkable scenario. These people were treated as if they were barking mad. Meanwhile the people spinning visions of popular walled gardens and enthusiastic micropayment adoption, visions unsupported by reality, were regarded not as charlatans but saviors.

When reality is labeled unthinkable, it creates a kind of sickness in an industry. Leadership becomes faith-based, while employees who have the temerity to suggest that what seems to be happening is in fact happening are herded into Innovation Departments, where they can be ignored en masse. This shunting aside of the realists in favor of the fabulists has different effects on different industries at different times. One of the effects on the newspapers is that many of their most passionate defenders are unable, even now, to plan for a world in which the industry they knew is visibly going away.

This is a classic example of Clayton Christensen’s Innovator’s Dilemma theory in which entrenched incumbents (the newspapers in this case, but equally the labels and studios) see disruptive or even revolutionary innovations coming often before anyone else but still fail to adapt. Christensen’s explanation is consistent with if a bit drier than Shirky’s above. Entrenched incumbents are organizationally predisposed to choose sustaining innovations over disruptive innovations because of the phenomenon of middle-management. Middle-management is meant to act as a filter for senior management, and their incentive structures are generally set-up to reward passing up ideas that win the approval of their superiors. And of course the ideas most likely to win approval from senior management are those most similar to ideas that have been approved in the past. So, the system is inherently set-up to promote sustaining innovations and filter out disruptive ones — or as Shirky puts it, create “Innovation Departments, where they can be ignored en masse.”

Round and round this goes, with the people committed to saving newspapers demanding to know “If the old model is broken, what will work in its place?” To which the answer is: Nothing. Nothing will work. There is no general model for newspapers to replace the one the internet just broke.

With the old economics destroyed, organizational forms perfected for industrial production have to be replaced with structures optimized for digital data. It makes increasingly less sense even to talk about a publishing industry, because the core problem publishing solves — the incredible difficulty, complexity, and expense of making something available to the public — has stopped being a problem.

In his original Long Tail article for Wired (4.5 years ago!!!), Chris Anderson declared an end to the “tyranny of physical space.” What that meant was the Internet fundamentally undermines any business model based on technologically inferior distribution. As content has no inherent physical requirements for consumption (and thus distribution), any model reliant on that is technologically inferior and thus ripe for disruption. The effect of this disruption is to eliminate the market inefficiencies and redistribute any value that was artificially aggregated by exploiting them. In other words, the margins that the content distribution gatekeepers were able to extract from the old system do not exist in the new system without gatekeepers.

That is what real revolutions are like. The old stuff gets broken faster than the new stuff is put in its place. The importance of any given experiment isn’t apparent at the moment it appears; big changes stall, small changes spread. Even the revolutionaries can’t predict what will happen…And so it is today. When someone demands to know how we are going to replace newspapers, they are really demanding to be told that we are not living through a revolution. They are demanding to be told that old systems won’t break before new systems are in place. They are demanding to be told that ancient social bargains aren’t in peril, that core institutions will be spared, that new methods of spreading information will improve previous practice rather than upending it. They are demanding to be lied to.

People invested in the old model don’t want to switch to the new model because, while it may be better overall, it’s less appealing to *them*. Would you ask the buggy-whip industry to pioneer automotive technology?!

Experiments are only revealed in retrospect to be turning points [my emphasis]…[T]here is one possible answer to the question “If the old model is broken, what will work in its place?” The answer is: Nothing will work, but everything might. Now is the time for experiments, lots and lots of experiments, each of which will seem as minor at launch as craigslist did, as Wikipedia did, as octavo volumes did.

Society doesn’t need newspapers. What we need is journalism. For a century, the imperatives to strengthen journalism and to strengthen newspapers have been so tightly wound as to be indistinguishable. That’s been a fine accident to have, but when that accident stops, as it is stopping before our eyes, we’re going to need lots of other ways to strengthen journalism instead.

We don’t really want movies or tv shows or CDs either, what we want is entertainment. By moving us beyond the “tyranny of physical space” the Internet is also freeing entertainment from the packaged goods business model that is required for physical distribution and opening up the possibility of real models for entertainment-as-a-service. And just because there isn’t an immediately clear answer to what the successful new models will look like doesn’t mean they won’t come in time or that they haven’t already.

Though I don’t buy the whole thesis as laid out, I do appreciate the revolutionary nature of what Don Tapscott and Anthony Williams describe early on in their book, Wikinomics.

If we could fast forward and catapult ourselves into the year 2029 – I suspect their assertion would be right and that indeed “twenty years from now, we will look back at this period of the early 21st century as a critical turning point in economic and social history. We will understand that we entered a new age, one based on new principles, worldviews, and business models where the nature of the game was changed.”

To what do they attribute the difference? – to; 4 principles on which wikinomics is based; openness, peering, sharing and acting globally; and to the roar of a collaborative culture embodied in what Don Tapscott has described as ‘the Net Generation”.

From a humanitarian/development/human rights point of view — I can’t help but hope they’re right. I suppose, my final paper is an exploration to find out if they are. Could this world of collaborative culture, through social media, spell seismic change for social capital or social advocacy?

I have toyed in previous posts with their idea of the culture of community this cyber community creates, and tiptoed around the potential for change in spheres like diplomacy, or negotiation – concerned with my own polyanna-ish tones. But between Wikinomics and the Long Tail – I hope we’re onto something. (Tapscott claims this period we’re in rivals the 15th century renaissance!)

Could the “collaborate or perish” ethos extend to international relations? Labour relations? Gender relations? Could that ethos replace the Cold War, zero sum, dynamics that remain fundamental to the way so much of the world is run today?

Having grown up as a child in a bipolar world, the framework for my  worldview is one of; two giants/empires going head to head, or challenging each other through proxies. If one wins, the other loses. Zero sum. The economic parallel was (especially after the fall of the Berlin Wall on Nov.9, 1989) market forces would dictate the winners and losers of capitalism — again, win-loss, zero-sum.

But I ensconced myself in a world of like-minded ‘do gooders’ (as one ex colleague from my journalism days called us), where the collective thinking is enshrined in a framework of universal rights, typified by elements of the collaborative behaviour Tapscott describes.

Will the Net Generation organically grow with such a worldview?

Will the world post economic crisis of 2008/9 fundamentally change, based on a model that didn’t fully work and rewrite itself including collaborative (not to be mistaken for – socialist) elements?

Lots of questions. Let me finish this segment with one more – a fundamental one that Tapscott and Williams only partially address – what happens when the culture of generosity on which so much of this rests, tires? Or, demands a share in the spoils? The collaborators that fuel this culture of collaboration have other jobs that provide a source of income, which allows them the time to ‘play’, to ‘peer’, to ‘people’ – is that a sustainable model on which to build a new generation?

Let me just say it – cause it’ll be obvious through all the fawning in this review…I loved Chris Anderson’s book, the Long Tail *– a bright light, among several, on our reading list.
WHY? (Nicco’s favourite question…!)

The theory of the long tail captures some of the ideas I’ve been struggling to put into words, about the potential impact of the democratization of tools, offered by access to internet and the open source culture.

He has several ways of describing this impact; the era of one-size fits all is replaced by one of a multitude of niches, 20th century being about hits and 21st century about nichs, top down messaging giving way to bottom up community of thought, shifting from the information age to the recommendation age, the end of spoon fed orthodoxy gives way to the rise of messy mosaics, the world of infinite variety. More directly, he talks about the long tail being an ‘infinite aisle’, or ‘culture unfiltered by economic scarcity’.

I find all of the juxtapositions or characterizations thought provoking (not only because they debunk classical economic theory and models which resonates with the revolutionary in me).

More seriously it resonates with my fundamental belief that we are indeed in the middle of something revolutionary.  Again he puts this quite succinctly in his troika of forces; the democratization of the tools of production, distribution and the connection between supply and demand.

WHY?

Because even though I’ve struggled in previous posts, in aptly verbalizing how this is true for the culture the internet is creating – I KNOW Chris’ comments on the impact of fragmentation are absolutely accurate, when I think of two ways my professional world has radically changed because of fragmentation.

Two LONG TAIL cases in point;

-    fragmentation and TV news and my career with the CBC – though the implosion of the newspaper industry is causing the headlines today, I lived the implosion of traditional TV news with the digital era and the fragmentation it caused via the cable explosion. Gone were the days of (for the US) the three major players – NBC, ABC, CBS — as the only ones on the field. In came CNN, with a vengeance and Peter Arnett during Gulf War I. In Canada, the cable networks scooped up many of the young promising journalists from the public broadcaster (CBC) and built a world of infinite choice and channels. At some point in the 90s, working at CBC was no longer a badge of honour, it was that you were either too scared to leave or part of the dead wood that even a budding cable channel wasn’t interested in.

-    fragmention in the development landscape – During the 1970s, 70% of resource flows from the US to developing countries originated from the US government, as ODA. Today, private capital (from civil society and the private sector) account for more than 80% of such flows. Welcome to the Long Tail as it applies to the development landscape. Today the head would still have the US government, as a single source of sizable contributions. But it is joined by mega foundations (Bill and Melinda Gates among the first in line), and followed by a veritable long long long tail of large, medium and tiny NGOs. Think local cub scout chapter for the micro version. Think Boy Scouts of America, for the macro version. Think church groups on missions of peace and friendship and proselytizing overseas – and you have a snapshot of today’s development landscape.

The Long Tail – it’s real…on the internet and beyond. The message is as simple as it is stark — adapt or die. It was true for the CBC and the TV news biggies, it is true now of the newspaper industry, and it is true of the development world…did someone say UN reform?

*To read the article that started all this…click!

And as evidence that I can do critical fawning — here is a critical take on the LongTail, published in Slate.

The quetzal is a brilliantly plumed bird of Mexico and Central America, and sacred bird of the Aztec.  The quetzal is pronounced ket SAHL.  The male, hardly larger than a dove, has glittering, emerald green-and-crimson feathers, with graceful tail streamers over three feet long.  

This inactive bird sits quietly for long periods on a perch in the dense forest, darling off only to capture insects.  The ancient Mayas and Aztecs found the quetzal so impressive that no one was allowed to harm it.   

They used the long tail feathers (plucked without harm to the living bird) as symbol of authority and religion.  Only chiefs and priests were allowed to wear them.  Today the quetzal is the national bird of Guatemala, where it appears on postage stamps, coins and on the state seal.  Guatemala is sometimes called the “Land of the Quetzal.”