Welcome to aaron chua make money blog

Hi, welcome to my blog. In this part of my world, I talked about how to achieve financial freedom by learning how to make money online through creating sites and earning from them.

Below are some current and past make money projects that details my learning journey.

My current experiment in making 50 amazon site niches. If you have not been following this challenge, best place to start is this resource page for the amazon challenge, that lists all the articles that I have written so far.

My experiment in making 1000 a month through adsense in 9 months.

If you came here looking for low cost startup ideas, here are 140 startup ideas that you can browse through.

Monday, 30 March 2009

A different paradigm for assessing contextual information on mobile

It is funny but when a couple of your trusted filters talk about the same thing in different context and time, you tend to sit up and pay attention. This is what has happened.

JP Rangaswami blogged about a Shazam for image in the context of a bird recognizing application. This was echoed by Fred Wilson a couple of months back when he suggested a similar application for tourists. Finally, Tomi Ahonen also talks about a interesting mobile service in Japan that 'uses the camera on the phone.... to read words (and) ..does a dictionary look-up and displays the word in Japanese on the screen.

All these suggested a big opportunity: creating a different paradigm for assessing contextual information:

-What happens when you can now assess the contextual information embedded in things around you?
-Can we see who else has retrieved the same information?
-How can we add more information to the image, wikipedia style?
-Will we see a big debate over privacy if I can now assess your information by snapping a picture of you?
-Can we now tell better stories or leave deeper memories if our images comes with the relevant information?

Sunday, 29 March 2009

Pull platforms need powerful coordination mechanisms

Pull platforms are a great way to build your businesses upon. It will be highly disruptive to whatever industries you are in. Building it however requires lots of experimentations on the right form and shape.

One of the challenges is resolving the coordination problem. With so many partners and resources available in a pull platform, how do you make it easy for any party to find, retrieve and use the resources that he needs? It was hinted in the paper that I linked to that Li & Fung uses a low tech solution of calling and faxing to pull in the necessary resources:

Li & Fung would be challenged without basic telephone and fax communication networks.

How can we make it easier than this? Tagging might one solution. This new perspective makes it clearer to me that we are not done with tagging yet. Maybe we have been looking in the wrong area i.e. search. Maybe the potential of tagging lies in its coordination power i.e to pull in resources multi-dimensionally.

Any mechanisms that help us to sort through the proliferation of options and find the resources that are truly useful to us will have great value. Mechanisms that capture and build on the insights and experience of others will be even more valuable because they will create a classic increasing returns opportunity. That's the potential of tagging - if it can scale.

Saturday, 28 March 2009

Startups ideas from comments, tweets and more

Why is conversations important? One of the things they are giving me are plenty of ideas. Here is a couple I have collected the past week.

Russell Beattie
If online shops were smart, they'd give a 5-10% discount for your Twitter ID/Password, and then tweet your purchase with a link.

My comment: I am thinking of a service that combines the social graph with the affiliate model that is described above. Let the service tell the vendor how 'influential' the user is and set the discounts accordingly. Will this become a market for cashing in your social capital?

Taylor Davidson

Or perhaps it could help me find gifts for people by feeding in their public data; I know I could use the help picking out gifts :)

My comment
: Gifts are bounded by their context: to whom, for what, for when and how much. If there is one industry that needs a contextual engine, this is it. Great opportunity for someone to create such an engine for Etsy's products. Simple example: I need to buy stuff for my wife who like blah, blah, blah (to whom) to celebrate our 5th anniversary (for what) by 2 weeks (when) within a budget for $XX (how much).

Dave Winer

why doesn't digg have a way to vote up or down ads. companies would pay to be added to the mix, users decide how much play each ad gets. (and his follow up post here).

My comment
: Very very different economics from Adpinion, which I think is what most people would compare this idea to. One is about attention market while another is simply about targeted advertising.

Friday, 27 March 2009

Business models for public goods (continued)

It has been 2 months since I last posted on this topic. One reason is my inability to find the relevant discussions on the Web (if there is any) that relates to the topic. Without external stimulus, it is hard to contribute anything further than what I have.

The drought has ended with Doc Searls post on his PayChoice project, which is an innovation in demand-based pricing.

PayChoice will create a “buy button”-simple payment system to allow readers, listeners and viewers to pay whatever they like, at their discretion, for whatever media products they use.

One of the interesting concept he talks about is to:

Provide ways for individuals to look back through their media usage histories, inform themselves about what they have been enjoying, and to determine how much it is worth to them and..... to Stigmatize non-payment for worthwhile media goods.

This is a great innovation and for someplace like US , it definitely make sense. I have suspicions however of it working in this part of the world. We are so used to actively seeking free stuff that I wonder how many of us will pay for it. In fact, we might be stigmatized for paying :).

I think for digital goods including media, converting them into service models make more sense. Something that is scare and creates unique experiences, like being able to communicate directly with your favorite bands etc. That is why startups like TopSpinMedia are very exciting as they have the potential to become the infrastructure for the goods-to-service model.

However, having so much power in the hands of one company is always unnerving. What if topspin becomes the next publisher, exerting monopolic power over its artists? I would prefer a more open and loosely couple model. One where anybody can become a topspinmedia: a wordpress for topspin.

Twitter as social VRM: a big idea

I love this idea of Twitter as a social VRM. For those uninitiated, VRM stands for vendor relationship management and is the converse of CRM. It is a powerful way of business engagement that levels the playing field for the customer. Check out the links if you want to find out more.

To prove that this is viable, I did a simple experiment on Twitter Search using the phase: I am looking for. The results are pretty interesting. This simple search alone has revealed the intentions of many people that ranges from dating, to products, to jobs etc. The opportunity then is to build tools that allow vendors to respond and for the user to control these responses.

This is a great opportunity and I want to spend more time thinking about it. What are your thoughts?

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Wednesday, 25 March 2009

Mobile Pearls Vol III

I have fallen behind in my mobile pearls series as very few innovative mobile services/products have come across my way. After weeks of collecting, here is the latest on mobile pearls:

iPhone apps for connecting musicians and fans
The free apps include video content from the artists’ Kyte channels, as well as branding and advertising, click-through links to buy music and merchandise, a built-in RSS reader to pull in news updates, and community features like chat, comments and sharing.
(Very similar to the previous mobile pearl on adva mobile)

Pet Shop Boys introduce fans to QR code in their new music video

The new video for their recent single, Integral, has QR codes interspersed within urban settings and pixelated images. The website also encourages fans to remix their own versions of the video, and embed their own QR codes into them.

(There are 2 cool things going on in this mobile pearl. First it is a great use of QR codes in music, and is something that the mobile uniquely has. Second, it encourages fans to use QR codes in their remix of the video as well, a great example of community branding.)

QR code as accessories

Kanno has created a line-up of accessories branded with a unique QR code that can link to an original, user-created photograph or video.
(Not only is this a cool innovation of using QR code, it is also a fantastic to bring physical and virtual.)

Street lighting by phone
The town of Germany’s Morgenröthe-Rautenkranz has recently reduced its streetlighting energy costs by a quarter, simply by switching all lighting off by default and allowing citizens of the town to light individual units with a phone call.
(Leveraging on mobile's attribute of machine-to-machine communication, this is a wonderful service that caters to mobile's benefit of being a personal device. Doesn't hurt that this also contributes to energy efficiency for the city.)

Mobile apps as next generation billboards

And the best way to get that promotion on people’s phones? Make them want to install it themselves.
(A wonderful example of how advertisements can be content. Who is going to make it easy for independent film makers to DIY such applications themselves?)

Engagement campaign with frozen food brand Birds Eye
They printed a unique code to each package of the foods and gave a chance to win cash prizes every day via SMS participation.
(Mobile advertising will be more effective than what we have seen on the Web. Because it is personalised, there is potential for advertisers to provide targeted useful advertisements on the individual level.)

Note: see rest of the series here.

Tuesday, 24 March 2009

A scorecard for building businesses on platforms

I came across an interesting article today that talks about how startups have to decide on which platforms to develop for, given the many open platforms available now and the scare resources that startups have.

“A lot of startups are wrestling with prioritizing their relatively scarce resources,” said Jim Hornthal, a partner at CMEA Capital and chairman of Triporati

This reminds me of an earlier post I wrote about the benefits of building your business on third party platforms.
From that post came a good comment by Taylor on the different factors that one needs to consider when deciding on which platform to develop for. This leads to my pondering on whether a scorecard can be useful to provide a first level analysis on what is/are the right platform/platforms for your business.

So, this my first attempt at such a scorecard:

Ease of development: How open is the platform? Does it have an open API? What does the API enabled? Do you need to pass through gatekeepers before getting the developer keys?

Demographics and audience size: How relevant are the users on the platform to your businesses? If not everyone, what proportion of the platform's user base is relevant? What size is that? Can the platform enable you to reach them efficiently?

Route to market: Can the platform provide a clear route to revenue? Is is a market or a platform? The latter such as App store provides more value than a platform like Facebook.

Flow of value between platforms: This is the most important strategic consideration. What value can you create when you enable flow to happen between 2 platforms?

(i) At the simplest level, the value can be uilitarian. TwitchBoard for example saves your Twitter links to your Delicious account.

(ii) Can you enable new ways of organising resources through enabling the flow? For example, Disqus is attempting to organise your conversations by aggregating your flow of comments while Zynga is organising your gaming social graph by enabling the flow of your game buddies on different network. What other stuff can you organise if you enable flow to happen?

This is just a first draft of my scorecard, which I hope to evolve into some sort of investment guide for startups that want to build businesses on platforms. Comments and feedback are definitely welcomed and encouraged.

Monday, 23 March 2009

What did you learn from your startup failures?

It is common saying that failed entrepreneurs make better entrepreneurs because they have seen it once and know what doesn't work. However, a recent Harvard paper says that such thinking is a myth. An NYtimes article provided the reporting:

In other words, trying and failing bought the entrepreneurs nothing — it was as if they never tried. Or, as Professor Gompers puts it, “for the average entrepreneur who failed, no learning happened.”

At first, this seem quite shocking to me. Upon reflecting further, including on my own failures, I think the paper may be correct. When you fail as a startup, what did you actually learn? For me, it can be many things, from project management to a wrong business model or even wrong market. However, there are so many failure points that learning from some doesn't gurantee that you will not fail from others. More importantly, failing doesn't mean you have found a path to achieve success and that is a key missing ingredient.

There are so many paths that a startup can take. It takes experience, from achieving past successes, to know which path has the highest chance of getting you to where you want to go. That is why the study shows that the only reliable predictor of startup success is past achievements. Nothing else is as important in the final analysis.

So, does that mean you shouldn't do a startup if you have not done it before? No. It means you have to be smart about it. Get a mentor or a partner who knows how successful paths are created. Learn from them. Learn not only the pitfalls but the way to achieve success.

Sunday, 22 March 2009

More thoughts on education

Sorry about the ramblings on education for the past few posts but it is something that is deeply exciting to me. I have watched the TED video from Sir Kent for about a million times but I still learn something new everytime I watched it. I realise however that I have not put down the things that are thought provoking to me. So, this is the post that I am going to do it:

Education is meant to take us to the future we can't grasp
This is an important reason why education is so important. As we move into a world where there are constant disruptions, we need our education to prepare us to handle these rapid changes. How many of the schools are preparing students in this way? How many schools are preparing us to be relentlessly resourceful so as to handle any new situations that come up?

In that scenario, I find a lot of commonalities between an entrepreneur and being resourceful. Perhaps education can learn from entrepreneurship? Perhaps using Ycombinator as a model for structuring education?

All kids have tremendous talent and we squander them
Learning how to unleash the hidden talent of children is where most value is unlocked. How do we use of all of our understanding of online discovery and apply them to talent discovery? In the digital world, we use all sort of algorithms, relationship connections, human filtering etc to help us discover new stuff to consumer. Can we then collect data of our children and use the same methodologies or processes to understand what all these data can tell us?

Do our children behave in certain ways that is similar to talented people during their childhoold days? Do they exhibit behavior that would indicate they are future athletics rather than lawyers? Do they behave more like writers than doctors?

Creativity is as important to education as literary
I think we are focusing on the latter, even for new startups like Teachstreet and Edufire. Creativity is a very difficult concept to grasp, let alone be educated on it. Obviously, the old system of staying in a classroom and listening to lectures wouldn't work. What we need are new environments, modules and interfaces for the equvialent of 'music sampling' in education. More importantly, we need the equvialent of top 'DJs' that help children discover their hidden creativity and talent.

We have lots of opportunities here to remake education. As Sir Kent mentioned, only by providing the right education will we have hope to remake our world into a better place.

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Saturday, 21 March 2009

A crisis in human resources

A crisis in human resources.

That is a brilliant statement from the Sir Kent video that I posted earlier. It describes exactly the problems we have in education. For many years, our education system has prevented individuals exploring and exploiting their passion and talent to the fullest. At this time when we need diversity and talent to innovate ourselves out of institutional decay, we might find ourselves lacking the means to do so.

One of the key ideas that stuck me from the video is the non-linear path that our education must evolves around. It is easier to be linear when you know what your passions are and how you can further evolve around it. However, our passion and talent typically are not obvious. They lie beneath the surface, waiting for the right environment where they can be brought to life.

Our current system unfortunately is built for linear progression, typically with the aim of entering universities or collages. To achieve organic learning, we need a big change in how we organise our learning processes and institutions. Specifically, how can we evolve our system to a more organic form, with multiple touch points and paths for individuals with diverse talent? How do we bring about serendipity in education?

The biggest problem with an organic approach is the continuous flux that current institutions are woefully inadequate to handle. This brings me to the pull systems that John Hagel has been advocating. How can we build pull systems for education? It is an area that has big potential and the recent articles in the Big Shift blog have been a rich learning source.

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Another brilliant video by Sir Ken Robinson

I couldn't get enough of his TED video. It was both highly entertaining and brillantly direct in pointing out our problems in education. This is a follow up video which I have highly enjoyed.

Here is the TED video in case you have not seen it

Friday, 20 March 2009

A summary of what our startups have achieved for 08

Through the i.JAM programme (a 50k pre-seed grant), we have already funded 120 projects in a 1.25 year period. I thought that this is a good time to share the progress programme and how the startups doing.

The entire objective of our programme was to create an easy (minimal transaction costs) way for entrepreneurs to experiment with ideas. I think we have achieved quite successfully. Over the period, we have received more than 800 applications, which is quite remarkable given that Singapore only has a population of 4 million.

One common complaint however from some startups is that 50k is not enough to build a business. To this, I reply that it was never intend to do so. This was a grant for you to experiment, to see if your idea actually works. For scaling into a real business, you will still need to raise further funding.

During this period, about 25 projects have been completed. Out of these, we are encourage to see 9 of them managing to raise some form of angel funding. This 36% rate is a bit higher than what we expect, which implies either our incubators have an exceptional talent-spotting ability or we are too risk-averse, picking ideas that have obivous market potential. The problem with the latter is that very little breakthroughs will emerge since disruptions are always unrecognisable in the initial phase.

One of my personal disappointments with this current batch of startups is that very few are attempting to renew some of our broken industries. Quite a number in fact are too focus on money making right from the start without the corresponding need to create real value. I hope I can see more radical startups as we begin our second wave of funding.

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Thursday, 19 March 2009

In this crisis, do you choose innovation over revenue?

One of our greatest fear for our startups is that many of them will turn to a service model in their attempts to keep the operations afloat. From a startup point of view, I fully appreciate their intentions of doing so. Personally however, I will not choose such a path.

Don't get be wrong, a service model is not a bad revenue model. What troubles me is when a startup switches from a product focus company to become a service company. That indicates a couple of worrying signs to me:

The different nature of product and service companies
A product company works very differently from a service company. The kind of business processes and the type of capabilities are vastly different. As John Hagel wrote, a service company 'builds building deep relationships with a target set of customers' while a product company focuses on 'developing, introducing and accelerating the adoption of innovative new products and services'. For a startup to go through such changes is almost impossible and inevitably will lead to the startup becoming a zombie company i.e. just struggling along.

Losing of your passion
A startup wants to do something because they are passionate about it (hopefully). It is that original passionate that can help you overcome challenges and achieve your goals. When you switch models because of credit crisis, you are inevitably sacrificing your passion to earn a few bucks. I don't think that will ever help anybody to become successful.

In times of crisis, it is to your advantage to focus on innovation

When you are not focus on building your innovations, you are losing out on a great opportunity to create competitive advantage at a time when competition is at its lowest. Instead of earning revenue, you should focus on hiring the best talent, thinking about strategic innovations etc so that when the economy becomes better, you are in a stronger position to take a market lead. Crisis is the best time to be innovative.

Despite all I have said, I understand that funding is still essential. Hence, we are doing all we can to gather pockets of available financing that is still available and making it easy for startups to assess them. If you building something innovative and needs that extra liquidity to keep you focus on completing it, do drop us a line and we are happy to help.

Wednesday, 18 March 2009

Thoughts on hacking business schools

Hacking education has been gathering momentum with people like Fred Wilson and Jeff Javier actively arguing for a reinvention of our education system. I have very little to add to their excellent description of the sector's problems and opportunities. However, I want to focus on an area that is not as widely discussed: the failure of our business schools and hence the need to hack it.

There was a terrific article in the NYtimes that says
the way business students are taught may have contributed to the most serious economic crisis in decades. I think there are some truth in that statement. Think about it: when we are in b-schools, all we are taught is that "the new logic of shareholder primacy absolved management of any responsibility for anything other than financial results.” Is it any surprise then that we go into the real world focusing on shifting value around in attempts to maxmise shareholders' value while ignoring any real value creation?

One of the reasons that b-schools will not want to change the status quote is the profits they are getting out of running the same broken programme over and over again:

For universities, business education is a kind of cash cow. Business schools are less expensive to operate than graduate schools with elaborate labs and research facilities, and alumni tend to be generous with donations.

How then can we hack the business school system to make it better?

Create transparency

Transparency is almost always the cure of any closed system. Business schools are no exception. One of the interesting idea mentioned in the article is creating an index that ranks schools based on"how well they integrate social and environmental issues into curriculums". This is a great start but given the resistance faced by the survey, we need more grassroots actions. A RateMyProfessor equvialent to rate the programmes of business schools can be interesting.

Create diversity
Outside of the b-schools systems, there are acutally excellent resources on the new economics of businesses. One great example is of course Umair Haque. However, we need to create ways to magnify their voices so that diversed thinking can be encouraged. We all need to think beyond shareholders' value.

(Note: Ethan Burley tweeted a similar thought here)

Create new ways of verification
One of 'benefits' of MBAs is not the course content but the networks and branding that the certificate brings. However, the economics of interactions has now diluted the power of such signaling. The fact that we can now blog, comment, tweet, chat, contribute etc on the Web means we need less certificates to inform the market of our true value. What is more important going forward is to think of ways to measure and capture our social capital that online interactions have bought us.

A powerful last quote from the article as a departing note:

Instead of being viewed as long-term economic stewards,.... managers came to be seen as mainly as the agents of the owners — the shareholders — and responsible for maximizing shareholder wealth

Thoughts on hacking legal
Thoughts on hacking finance

Monday, 16 March 2009

Thoughts on hacking legal

I have been thinking a lot of the legal industry lately as one of my friends has the unfortunate experience of being retrenched. When we were talking about the industry in general, it occurs to me how deeply out of sync it is with the way our economy is going. I decided to post some of our conversations and my thinking here for further sharing and discussions.

Legal practice
The practice itself will become more consumer oriented, with greater emphasis on personalised and affordable services made possible by web technologies. We will see virtual lawyers and a pull platform that gathers the necessary expertise across the network to help the consumer. All these means taking down the walls that have make lawyers immune to the restructuring of the economy.

Legal research
Legal research is now costly and time consuming. The entire industry needs to learn from Google Print. We need services that index all the legal case materials, make them searchable and allow any users to tap into legal materials as easily as a Google search. Fastcase is one approach to tackling this problem. There will be room for many more.

Related to research is the area of legal publishing. We know now that publishing (in particular newspapaers) is on its last legs. The same will happen to legal publishing, which suffers from even more price discrimination. A new model will be needed for legal publishing.

Legal education
Like the rest of the education sector, there is a disconnect between what was taught and what students eventually find when entering the legal workforce. In order words, legal education don't prepare students to practice law. Add to this the high cost of a law degree and you can see how ripe this area is for disruption.

One area that might be interesting to think about is micro law schools. We have seen the success of micro breweries and micro lending, why not micro schools? In fact, I am starting to see early steps being taken right now...

Electronic legal documents
Many legal transactions can actually be made without lawyers. That is the reason why elawyering will start to replace lawyers that don't provide much value beyond preparing templated documents. This is a great example of how electronic legal documents is more efficient than costly lawyers.

Refining economics of contracts
The biggest opportunity may be to eliminate the cost of contracting all together by reinventing less costly contracts. This may inevitably means creating market exchanges in areas where contracts are the most costly, where information is made artificially scare. This is a big big opportunity...

Thoughts on hacking finance

Sunday, 15 March 2009

Best reads for the weekend of 15th March 2009

Another week, another great set of articles and blogs posts to share. There is so much wisdom, insights, knowledge etc in the Web that we need to seriously rethink how to better harness them.

Newspapers and thinking the unthinkable
Clay Shirky on how we need to experiment relentlessly to create new forms of organisations that better serve the new economy. The current crop of news organizations are built for the industrial era and it is time we let go of them to truly invent the future of news.

Related: Old growth media and the future of news
Steven Johnson expanding on the Clay Shirky perspective and giving a detailed interpretation of how future of news would look like. Worth a read as well!

Uncorporating the Large Firm
A academic paper examining how different structures, beyond the standard corporate form, can better alleviate agency costs. A stimulating paper on how different organisation forms can look like.

In hard times, free lancers turn to the Web
Crisis forces everyone to think of alternates, to create more effective forms of conducting business. Beyond free lancers, the Web can enable musicians, lawyers, doctors etc to be more effective than what the current institutions dicate.

Dimensionalizing the Web
A old post by John borthwick on how we can think about the Web experience. Rereading it still makes a hell lot of sense. If you look between the lines, there are serious ideas there waiting for smart web startups to experiment with.

Predictive analysis on new data (continued)

I have blogged about how the availability of cheap data is transforming job functions. Today, I just read a BusinessWeek article that talks, interestingly, about how HR is using data mining to determine the value of each employee.

I think this is just an early use of abundant data to change how HR is done. It is a very crude way and I don't think that is the direction it will go. What I hope to see is companies facilitating the flow of such information both within the company and to the edge as well. We know now that leveraging on edge competencies
is key to next generation businesses. The use of data should enhance the building of such competencies.

Here are some thoughts:

How do I leverage on data to identify and recruit key person outside your organisation: the equivalent of hiring in traditional HR

How do I reward outside innovation adequately: the equivalent of compensation in traditional HR? How do we calculate marginal wages and pay in the network economy?

How do I upgrade the skills of my entire network: the equivalent of training in traditional HR? Scalable learning is how we can think about it.

How do I ensure quality in the network: the equivalent of firing in traditional HR?

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Saturday, 14 March 2009

5 filters I used to detect people not suited for entrepreneurship

It is great feeling every time you come across a driven entrepreneur. He/she typically has such commitment, passion and drive in how they carry themselves that it is easy to spot them. The reverse also holds true. It is easy to tell if someone is not suited for entrepreneurship by noticing some characteristics. Below is my personal filters:

They are swore to secrecy like their life depend on it
I always believe in this: if your only competitive advantage is your idea, it is not something worth supporting. I have came across entrepreneurs who refuses to send me any information about their ideas and yet expect me to fund them. They are afraid of so many things that it becomes a pain just communicating to them. This is a clear signal that I am wasting my time.

They have not change their business models since day 1
It is a fine line between being persistent and being stubborn. We have seen successful startups adapting their business plans as new insights are gained. However, some of the people I talk to have refused to change even when it is quite clear that their ideas cannot work. Some models for example can easily be validated by crunching some numbers. If the numbers doesn't make sense, it is time for you to rethink your plans.

They talk about markets all the time
As a startup, your compettive advantage is not in spotting undertapped markets. What I want to hear is your approach: what kind of institutional or even product innovations you are building to tap into these markets. Unfortunately, some entrepreneurs I talk to only tell me how big the potential market is, how they have to move quickly and why I need to fund them because of this. All these are fine as long as you are also able to say why you are the one that can succeed. There is a big difference between spotting a market and having the capability to tap into them.

They don't treat their customers with respect
Slightly related to the above point is that most entrepreneurs treat their customers like commodities. They treat customer like numbers, rather than real human beings with needs and wants. I think that in this new economy, paying respect to your customers might be the biggest source of advantage. The Web has given us personal voices. Nobody wants to be treated like anybody else anymore.

They try to do too many things and have too many ideas.
This is a slightly tricker filter. Many times, startups who are successful have laser like focus on their products and their customers. They don't think much about anything else. On the other hand, I have seen some entrepreneurs wanting to do this and that, without realising these are totally separate businesses and each requires different business processes.

The above are alarm bells that have been built within me over the years. They are not definite. Some of the alarms might turn out to be false alarms. However, in general, they work pretty well for me so far.

Building businesses on platforms

I recently saw a comment by Fred Wilson saying 8 out of 25 of his portfolio are building on platforms. It is a rather high number and I wonder about the risk on riding on a single platform. On close inspection though, you will realise these 8 businesses tend to span across platforms. This implies that the value may lie, not only in leveraging on platforms, but in bridging the different platforms.

This goes in line with what Tim O'Reilly was saying about building your software above a single device. In this case, it is building your businesses above a singel platform. The benefits of doing so are obvious.

First, building across platforms achieves network effects faster.

Second, servicing multiple platforms allows aggregation. Disqus is a great example. Now, I can see my comments whether they are in blogger or wordpress.

Third, it spares you the problem of being dependent on one source of success. If you are dependent on Twitter and it goes down in service, your business will be badly affected as well.

Fourth, bridging platforms has the potential to unlock new value. This is the most important. Advantage in this network economy comes from the flow of information. By building bridges across different platforms, you are allowing information to flow more smoother. That is a big strategic advantage.

So, if you are building a startup on top of a platform, is it better to build on one or across different platforms?

Wednesday, 11 March 2009

Thoughts on hacking finance

Finance has almost been part of my life. My education was in financial economics as in my first job. However, I have a great distaste for the industry and therefore left it to pursue my current interest in digital or new media. Now that Wall Street has self exploded, and we can see clearly how rotten the system is, it is time for startups and entrepreneurs to start reimagining how finance can be made better.

A light weight and responsive investment banking model

Traditional investment banks thrive on information arbitrage and limited disclosure, not to mention exploiting customers to the fullest. Next generation investment banks will use technology to empower the customer; giving the customer as much information as possible as well as the tools for them to easily determine and manage his/her investment portfolio or risk. Case example: WeatherBill.

New models of financing
Traditional financing has shown to be unable to adapt to new models of lending. That is why we are seeing stuff like microfinancing coming up from places that are far away from where traditional banks are. Social lending, debt exchanges, community currencies are all new approaches where financing can be raised.

Serving the under-served
We need better ways to provide financing to those who need it: students, low income groups, creatives, people with poor credits. These are all markets that needs disruption. There are lots of opportunities to provide easy to use, low cost alternatives to what traditional banks are failing to offer.

Peer to peer
financial advice
It is clear that the centralised way of managing the financial industry will not be sustainable. We have seen how industry after industry has been disrupted through empowering the individuals: blogs disrupting publishing, social music disrupting labels, SaaS disrupting entreprise software etc. Very soon, financial advice will be sought from your peers rather than from investment or personal bankers. There will be tools that help 'amateurs' and peers become 'professional' investment bankers and wealth advisors. Covestor is the leading example.

Financial research will be bottoms-up
StockTwit is a manifestation of an idea expressed by Umair Haque two years old. By unleashing the information bottleneck created by private networks, Stocktwits will make the market more inefficient and levels the playing level for everyone. The bigger picture is to recognise that financial information and research will be distributed. That creates opportunities for intelligent aggregation and filtering.

Advances in risk quarks
Through technology, we will be able to identify risks and make them plastic. We can then better manage them to reduce our exposure and limit financial damages. This article gives great examples of how these risk managment tools can look like.

Rating agencies will be replaced
The crisis has shown us that our current rating agencies are inadequate. Why do we need centralised authorities to tell us what is investment worthy and what is not? At Etech2009, there is an interesting startup that attempts to decentralise the rating process. It wants to give everyone the ability to assess risks using open source tools. More can be done in this area.

Financial literacy needs to be improved
I have blogged about the need for financial literacy before, reflecting on this Economist article that states the inadequacy of how we teach finance to the masses. I continue to think that this is an area that desperately needs our attention to make it better.

Making banking service more human and personalsied

Customer service in finance is not the most enjoyable experience. With the Web and some clever software, I wonder if a new kind of retail financial services experience can be created that would beat the pants off most of the mainstream high street banks.

Are we done with tagging?

My interest in tagging started way back when Umair Haque was talking about them and how transformative tagging would be.

Instead, people tag things they prefer, and ignore things they think don't prefer. In this way, preferences get implicitly aggregated, and then coordinated. That is, if 400 people tag bubblegen with technology, you might also reasonably suspect a significant proportion of them think it was cool enough to tag, which goes on to coordinate your preferences about bubblegen.

One immediate area when tagging can exert powerful influence is in the area of search. Tags represents an alternate way to find stuff.

At some point, tagging becomes more efficient than search. This point is reached when the number of Google clicks is greater than the number of related tag clicks (or similar proxy). When this happens, tagging becomes a perfect substitute for search.

Creating an alternate search paradigm was also the primary reason why Fred Wilson invested in Delicious. However, that vision was never realised. Delicious was sold to Yahoo and tagging became left by the sideway. I wonder if Delicious had continued, will it have reinvented search, like what Twitter is threatening now? It had the potential. For example, if you look at for tags, it is actually very similar to how the @ function works in Twitter. That in iself is quite a remarkable way of sharing.

Now, the only person I heard rallying about tagging is Marc Canter, who have said that:

We’ve certainly (collectively) dropped the ball on tagging

So, my big question is: are we done with tagging? Does our current services already provide what tagging has to offer or is that unexplored opportunity left by the early acqusition of Delicious?

Tuesday, 10 March 2009

What are the insitutional innovations needed for government?

People always talk about how difficult business strategies are to develop and implement. I think doing it on a national level, to an entire industry is even harder. In a company, there are already many moving parts but for a country, that number just shoots up exponentially.

Recently, I was drafted into a working committee that is part of a bigger agenda of conducting an economic review of Singapore. The challenge to my committee was to review the entire creative industries, including digital media and to make policy recommendations on what need to be done to this sector. Where do we start?

The initial thought was to suggest streamlining the operations of different agencies under the creative umbrella. To me however, that feels unsatisfactory. Efficiency only means releasing more resources but how we manage these resources in new and creative ways are left unexplored.

To move on, we need to start answering tough questions:

-Is the current agency structure the best way to organise funding?
-How do we turn our resources into a pull platform where companies can pull whatever resources they need to build their businesses more effectively?
-What are the under lying changes taking place in our sectors? Are these changes permanent? If not, how do we prepare for continuous disruption?
-How we turn our processes into a real democracy?

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Exploring attention markets

I blogged about Digg clones before and how they failed to understand the true economics behind services like Digg: attention markets.

Here is a new startup from the Ycombinator (Wintor 09) that begins to explore different market structures for attention markets.

The voting on thesixtyone is combined with some concepts learned from video games. Listeners cannot just indiscriminately heart up any song they want. They are given a limited number of heart points on a daily basis. More points can be earned for identifying good music early or recruiting friends to the service. Songs can only be given positive heart points, however. They can’t be demoted for being really bad. But the fact that the number of points are limited means in theory that only the most deserving songs will get enough to make it to the home page or the top of any given category.

Their experiments will be interesting to watch: to learn about different market incentives, to see what strategic variables will truly matter in attention markets. I think learning from games is a great start. Games have always been about managing scare resources (which is what attention is): how they create artificial scarity, how they link resources to encouraged actions et al. Hence, applying games mechanisms to attention markets is a good start for experimentations.

A related post also talks about how the lack of down voting distorts incentives for attention markets. This is again another learning in how attention markets and their efficiencies are shaped by market structures. If attention markets are going to be important in the coming age of abundance in content, we need to pay attention to how these markets work.

Next step: self correcting markets.

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Monday, 9 March 2009

Best reads for the weekend of 8th March 2009

This past week has been interesting, with lots of discussions and ideas on next generation businesses. Here are some of my personal favorites:

Hacking education
A great post with some powerful comments. With open course ware, and the myriad of social service models, it is much easier now to experiment on what education can be. The potential to create value in this broken education value chain is just too irresistible. To follow the discussions on this topic. this is a good place to start.

Related: P2p marketplace for learning

Shifting search from static to real time
This is post that is a couple of months ago but the opportunity it highlights is still relevant. Real time search however is a sub set of a bigger trend: real time interactions. Real time is not new in the area of distribution or delivery, but what real time interactions can bring about is still an open question. Search is an area where the direction is pretty clear. What about areas such as collaboration, customer service, media et al? Where will real time lead to?

Related: Twitter is a real time web value chain.

A billion Twitters
A great post by Dave Winer on how Twitter will become pervasive, rather than remaining a centralised service. It is not hard to imagine where conversations, in a Twitter like format, will be embedded into every community and even into every software. If that is the future we are going to, what opportunities will open up now?

The great restructuring
It is amazing what kind of changes we are going through and what opportunities are opening up as a result. Jeff Javier summarise it well in this post. If you are looking for ideas, this is a great post to begin.

Sunday, 8 March 2009

How do we create better conversations?

My last post on local startups not leveraging on R&D generate zero comments on this blog. However, over at my facebook profile, lots of people commented on that post, or more specifically, the title of that post. That incident alone generated a few pondering thoughts that I wanted to share here.

The first thought I have was about the portability of conversations. Despite the fact that the comments on my Facebook might be relevant to this blog, there is no way (that I know of) to carry that conversation over here. This reminds me of the discussions on the portability of the social graph a few months back, which is resolved with Friends Connect. I think the same thing needs to happen but this time on our conversation graph.

Secondly, I was using Twitter like tags to address my comments to different people. This again brings me back to the same point that we need such tags across all services that have a communication component. It will make targeted conversation more convenient and reduce attention costs for the rest of the people for which the comment is irrelevant. Such costs are not trivial. I am beginning to see some smart people talking about the conversation attention costs and what can be done to reduce it.

Finally, beyond sharing conversations, the more important point is how do I then turn the conversation to action? My post has brought me my readers' attention. How then do I turn attention to collective action? That step, to me is a big glaring gap. (VenTwits is a good start)

Conversations and the conversation graph is becomming more important. I think it is worth to spend more time thinking about where this is going.

Saturday, 7 March 2009

Why are local startups not interested in R&D

We have now supported a couple of international research centres that are doing interested things in digital and social media. Most of these R&D will be made available for startups to exploit and commercialise. Thing is, I have not seen any interest from the startup community at all.

R&D is interesting to me because they are solving very hard problems. Problems that startups might not have the resources or capabilities to solve. The resulting solutions might unlock value that startups can capitalise on.

Let's look at one concrete example. There has been talks about Twitter being a real time search engine. However, real time search is tough, especially if you think of non text data streams such as live video streams provided by 12seconds.

One of the labs we are forming is a combination of TsingHua University from China and NUS from Singapore. The problem they are set up to crack is doing search in real time, multi-sensory data. To me, this is exciting research. What solutions they create can have lots of business implications.

I think that going forward, we need to reduce the transaction costs that make it easier for startups to start thinking of leveraging on the R&D we are funding.

Thursday, 5 March 2009

The ebook market is picking up pace

Ebooks have been picking up pace in recent months and I want to take this post to summarise what has been happening so far.

The most easy way to start is to see some numbers. O'reiliy's blog mentions that the fastest growing category in itune is book. The interesting thing, beyond the growth, is the fact that iphone is becoming the next ebook reader, something that a lot of people didn't expect to happen. With Google and Amazon now making their ebooks available in Apple's platform, it is emerging as one of the leading ebook device.

Despite the growth, I feel that the potential of the ebook is far from realised ( have blogged about such potential before). This has been echoed by debates on whether are we having the wrong conversations about ebook pricing, instead of focusing them on new creative forms that ebooks can bring. We have seen how tv has created its own genres of content such as reality shows and music videos that are not possible other mediums like radio, cinema etc. The ebook format can potentially bring such creative innovation as well.

Beyond the creative potential, ebooks also unlocks new opportunities for the book publishing industry. Specifically, ebooks can become marketing tools for authors. If employed correctly, more conversations and connections can happen between authors and readers.

I really think this is an exciting time for the book publishing industry. I think we are about to witness another great shift as what we have seen for iTunes.

Wednesday, 4 March 2009

Simple idea: creating financial app on iPhone for this part of the world

I came across this interesting post about Google engineers making a finance app for android.

we added more features with the aim of allowing users to get stock quotes, market data, and news as fast as possible. If you are following the markets throughout the day, check out the real-time streaming quotes in your portfolio, fast stock look-ups with search auto-suggestion, and 'recent quotes' to make it even easier receive quotes on-the-go. For each stock, you can see detailed quotes, charts and news, and any change you make to your portfolio automatically syncs up with the Google Finance website.

It was something I think will be useful and went about looking for a iPhone version. Unfortunately, I couldn't find one that covers this part of the world. I think this is something that people will find value in.

What is interesting is the things you can build upon this financial app. Since you can track your portfolio, why not allow users to share their trading results and build a Covestor equivalent for the mobile to disrupt the asset management industry?

Alternatively, why not combine the financial app with the StockTwits idea and let the community talk about news related to companies. I think this is something very useful, especially in this part of the world where financial coverage is poor.

Any developers want to build this with me? : )

Tuesday, 3 March 2009

Organising conversations

'Markets are conversations'

In my view, that is the most powerful line in the Cluetrain manifesto. Markets have always been about conversations. People talk about stuff and exchange ideas. Traditionally however, these conversations are perishable i.e. once spoken, the conversation is gone. They are also restricted to face to face meeting.

Now with the web and the proliferation of services such as Twitter, Disqus, Backtype, the Facebook Status API etc, we are now able to do much more with our conversations. Ideas can now be stored and referred. Interactions can be searched. Questions can be answered regardless of time. Useful exchanges can be forwarded and shared. This simple fact changes the whole dynamics of conversations and in the process, of markets.

Conversations however creates attention problems i.e. too many people talking about too many things. Structured conversations on the other hand will unleash tons of value. Currently, StockTwit is the forerunner in creating value from organising conversations but that is only the tip of the iceberg:

- When will we go beyond merely aggregating conversations to actively seeding conversations, to alert people to relevant conversations taking place across the Web?

- When we will see the Twitter tags such as @, #, $$ etc being applied to the rest of the Web? When I can be alerted once people has tagged me?

- What other areas of conversations desparately needs organisation? Do we need StockTwits for health, sales, education, entertainment, dating etc?

- How can we better measure the impact of conversations? How can we see the velocity of conversations and the most affluence conversationalists?

There are many more areas left to explore and that is what makes organising conversations such a fertile area for startups.

Monday, 2 March 2009

5 ways to make a better mobile ebook reader

Inspired by Seth Godin's post on reinventing the Kindle, here are my ramblings on how to make a better mobile ebook reader:

Focus on sharing
for non friction books
Travel guides, receipt books, open source textbooks, self-help references, business books etc can be more enjoyable when you can share notes and highlights. Think that a business idea is great? Highlight it for your friends to read. Have questions on a particular topic? Share your queries with those who bought the same book. Want to suggest improvements on a particular receipt? Annotate your improvements for your fellow readers to see.

Imagine a feature where you can use a digital marker to highlight paragraphs of ebooks and that portion becomes a social object. This can be then be posted to your blogging platforms or be rated/voted to create attention markets for ebooks. Beyond this, I am sure there are more ways for sharing. Make use of that to create a more social ebook reader.

Enabling scalable intimacy between authors and readers
Ebooks are just the start of a relationship between an author and a reader. Why not create a feature that automatically presents a news feed based on the blogs and tweets of all the authors that the reader has favourited? Why not also allow readers to directly comment via their mobile and enable them to start a real conversation with the authors. Creating this easy way to achieve scalable intimacy is a next generation media play.

Allowing authors to become trusted filters

With so mcuh choices in ebook selections, helping readers to surface relevant and interesting reads is a great value proposition. Authors are in a great position to be that trustworth filter. A reader has already spent sufficient time in reading a book, understanding the author's perspective and establishing whether that perspective is a relevant filter for him. Next step is simply giving permissions for authors to become a trusted filter by recommending the relevant stuff including articles, books, conferences etc.

Use multimedia

Why must ebooks be just text? While words are great at flashing out details of ideas and concepts, embedding other forms of media will add richness and a more immersive experience.

Link to the rest of the Web
The ebooks are the beginning of knowledge acqusition. Use that as a starting point to link to other sources of knowledge. Read about a new term that interests you? Highlight it to search in Wikipedia and find the relevant articles for your reading at a later time. Want to know the more about the author? Highlight it to bring up other books by the same author in Amazon. Don't leave your ebook reader in isolation. Instead, use that as a starting point to better filter and explore the Web.

I think the ebooks market is finally breaking out. It is a good place to be in.

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Sunday, 1 March 2009

Best reads for the weekend of 28th Feb 2009

Here are what I found to be the most interesting reads during the weekend:

Example of how online communities works for traditional industry:
Very good case studies to understand how the power of online communities can be applied in non-digital industries.

Book publishers to commit the same mistake as music labels

History always repeat itself. A startup will ask what opportunities have been created by the iTune marketplace and what can he/she do to participate in the new opportunities created by the ebook market.

Why do companies exist?
A powerful piece on rethinking organisation models to unlock scalable connections and learning capabilities.

Reinventing the Kindle
Seth Godin's take on how to make a bettwe Kindle with implications for the ebook market.