If You Suspect It Could Be The Ground Floor, Just Get In

There is an obvious pattern to success that most of us just think of as common knowledge – getting in on the ground floor. Most of us think it is so obvious, we just don’t do it most of the times. There are tonnes of examples – remember, Bitcoin traded at $1 in Feb 2011. Hell, we spotted it here in May 2011.

The basic idea is to increase the surface area for positive black swans. Because, like Taleb says, the necessary condition for winning the lottery is to buy a ticket. Do it. Multiple signals will hit you every other day that you suspect could be the ground floor of something huge. And these days, you could get in easily if you want to.

If you suspect it could be the ground floor of something big, just get in. Because, like Taleb says, the necessary condition for winning the lottery is to buy a ticket. Do it.

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Will Google.com Become Irrelevant?

Some Indian E-Commerce firms are going app-only – there are some details that you just cannot miss in these decisions. For instance, this:

“Myntra and its parent Flipkart both shut their mobile websites in their first big move towards becoming mobile app-only shopping platforms, Mint reported on 20 March. Myntra already generates more than 90% of its traffic and 70% of its orders from its mobile app.”

and this:

“The moves by Myntra and Flipkart toward mobile app-only stores are intended to accelerate a consumer shift towards using smartphones as the preferred medium of shopping online, save costs and reduce dependence on the likes of Google Inc for luring new customers.” Source

We had noted some stats before, about India jumping the PC Internet phase and moving directly into the mobile internet phase – these app-only moves from big e-commerce (m-commerce?) players is more validation of the same.

As commerce moves to apps, and consumer acquisition strategies (and hence marketing dollars) move to individual branding rather than Google.com (which has started happening in the developing world in a big way) – Google.com might have challenges in staying relevant.

This is the same question as “Where is the Google.com for apps?”, but with an m-commerce and developing countries flavour. Will Google.com become irrelevant?

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Run Away From The Cost-Plus Model

There are multiple ways every single customer views at a price tag. Here are the common ways (Pricing is a very complex topic, so obviously we are generalizing a lot here) :

In a cost-plus model, the customer understands the product quite well, and can calculate in his mind, with reasonable accuracy, the cost of producing it. He is willing to pay a premium, but only by so much. This is a very common purchasing behavior, and is applicable for most everyday things in our lives.

In a value based model, the customer tries to calculate the value that the product or service brings to his life, and pays accordingly. This is applicable to products that are a little too difficult for cost calculations – consumer electronics for example. Not many people buy a smartphone knowing how much it costs to make – they buy it because they think that the product adds some value to their lives overall.

The third model is a simple ‘best alternative’ model – the consumer will pay based on what his alternatives will cost him. There is no reasonable way for him to calculate the cost, and there is no point in trying to come up with a value calculation because there are so many ways a benefit number could be arrived at. Software products are a great example here.

The real genius of the software business is this: if you have a product or service out there in the market, the customer has ABSOLUTELY NO WAY to understand the price – he will basically pay any number, as long as it is less than his current solution / workaround, or it is priced less than the alternatives he can find in the market, for the feature set he needs. Generally speaking, he does not know how many employees you have, he does not know if you are located in SFO or in Shanghai, he does not know if you use google docs or Microsoft live – he basically only knows that he is currently paying 29.99 per month for a competing product, and as long as you offer him all the features he needs at a lower price and similar quality, he has no questions on the price.

Run away from the cost-plus model. It will get you nowhere.

(Also Read: The Real Genius of The Software Business)

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‘As You Measure, So Shall You Reap’

What you choose to measure is probably the most important decision you make in the early stages of your product / startup. It influences your strategy, direction and product decisions directly and indirectly. The tricky part is that subtle changes in what you choose to measure could place you on a path that is very different from your original vision. This is not bad – it could even benefit you in many scenarios, but it is important to be aware of this impact.

The best part is this – you can use this impact to your benefit, if you could translate your vision into a clear set of parameters. Ensuring that you measure those parameters is the simplest thing you can do to ensure that you are on the right path. Obvious, but easy to miss sometimes.

File this in the same folder as ‘Don’t Listen To What Your Customers Say, Look At What They Do’. Choose what you measure very carefully. As You Measure, So Shall You Reap.

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Capitalism Rewards The Best

Capitalism is designed to reward the best. The best lawyers get to charge the most. The best players get the most lucrative contracts. The best actors make the most money.

There are many good lawyers, good players and good actors. They would survive, but probably not flourish. In any field, the best always make orders of magnitude more than the good. You could be good at many things – but you are playing against the very design of capitalism if you are not the best in any one. Capitalism acknowledges the good – but rewards the best. Really, it is as simple as that.

If you are the best search engine, you get to become Google. If you are the best online retailer, you get to become Amazon.

Do one thing really well. You will succeed for one simple reason – Capitalism Rewards The Best.

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Don’t Let Complexity Stop You

The title is from Bill Gates’ Harvard Commencement address (2007) – different context, but strong message. If you are searching for Google-scale problems to solve, here is the one thing you need to remember – the subconscious has a natural tendency to be scared of complexities. Complexity clouds the Hope Vs Fear equation. The mind needs to be trained carefully to not exhibit its default behavior when faced with complexity.

Don’t let complexity stop you. If you succeed in that, you just need to Run Upstairs.

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Why Isn’t Someone Building This Service?

Sometimes, you will see that users of some popular product/service are “inventing” new uses for existing features, to help them achieve something that they need. When that happens, it is a clear indication that a product/service that does just that “newly invented” piece potentially has a solid number of users right off the gate.

Let us take some examples: real time status updates – users were trying to use offline messages in messenger services – “stepping out for lunch” – an indication that a real time status update service was needed (the company that solved that would be worth a cool 10 billion dollars tomorrow). Foursquare and check-ins are another example.

We do have two examples that are open right now – Reddit’s AMA (Ask Me Anything) is probably a good standalone service. And the fact that Pinterest is used to pin things that are not really pinnable – there are many services waiting to be tapped there.

The Reddit AMA piece for sure is a startup waiting to happen. Why isn’t someone building this?

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Data-Driven ‘Everyday’ Decisions

Here is a trend we cannot run away from – very soon most of our decisions would be data driven. If you think that is already the case, you are mistaken. Today, data plays an important role in our decisions, but does not drive our decisions. And most data is incomplete in multiple ways and our gut feel fills in for all the inaccuracies and gaps. But that is changing – and very rapidly as well.

Fairly soon, the smartphone and the data that it could bring up would drive our decisions. That famous example of deciding between which route to pick on the way back from office – decisions like that would soon be decided by “what is the probability that if I pick Route A, I would reach faster” rather than by your gut feel, or incomplete traffic data. That’s the new world. Get used to it.

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What The World Did Not Learn From Twitter

140 characters. Enforcing a limit like that on what you can say, enforces thought, efficiency and better communication for a much stronger impact than a verbose equivalent. That is one thing we did not learn from Twitter – why can’t we apply that to so many other communications and domains? For example, reviews, feedbacks, sales calls, marketing messages, product overviews …. why have we not shortened all these things?

Constraints breed innovation. That it applies to communication is (now) a no-brainer. We had written about this before – The One Understated Benefit Of Twitter’s 140-Characters Limit.

And yes, we could have said all of this in 140 characters :-)

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Wait A Minute. Apple Has No Data

We spotted this statement today (we could not locate the link – apologies) – ‘Apple Has No Data’ and it registered immediately. Partly because in the relative scheme of things, this statement is so true. In a world that tracks what you see, click, like and buy, being the tech giant it is, Apple has no data. Not even in Music – Spotify knows your music preferences more than Apple does, probably.

Data is the currency of the future. If that is true, it is time for Apple to maybe move some of its resources into some huge data collection effort (disguised, like everyone else, as some social stuff or something like that). Crucial junctures demand big decisions. Remember Why Calling Steve Jobs ‘Lucky’ Would Be A Sin?

Wake Up, Apple. People are using your devices to send data to everyone else’s servers. Those bits are the dollars of the future. Maybe that is what Wall Street is telling you: “Wait A Minute. Apple Has No Data”

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