Economics and Finance

The Long Now of Finance update. An ongoing attempt to see what the world of finance be in 10,000 years from now.

Making it fun to save. A very interesting idea to enable savings products on top of the usual no frills account that financial inclusion typically provides.

The average credit rating for corporation has fallen in last 30 years. This mirrors the rise of Private equity, Hedge funds and LBOs. This also means that premium for a higher credit rating should be higher than before. In other words, while the average has worsened, the standards for good vs bad haven’t.

IT

Bank in a Box. A very good summary of the business and operations models on offer in today’s core banking software market

Startup

Celent’s selection of Financial Technology Start ups.

Start ups from the Mobile Breakfast event

Mobile

Apple’s people centric design

Social Media

How many times should one tweet one’s post. Good post and discussion

Science

A more reliable invisibility cloak. Remember Harry Potter?

Research shows that memory improves while walking.

There are new Mobile apps coming out every day but inexplicably almost all of them skip the Nokia platform. This could be an interesting opportunity for other developers who could fill in these gaps for Nokia/Symbian platform which arguably is bigger than iPhone, Android or Blackberry.

Foursquare is a good example of a popular and growing service that doesn’t have a Nokia/Symbian play. Evernote promises to connect “all the computers and phones you use daily” but still skips Nokia/Symbian platform. Just yesterday, Amplify launched a new mobile bookmarklet which again is not available on Nokia/Symbian. These are just examples of many products that are focusing on iPhone, Android, Blackberry, Palm and Windows Mobile (in that order) and skipping Nokia/Symbian.

Surely, Nokia and other Symbian based handset users look at these apps and wonder why they are being left out. Some of them may switch to a iPhone or Android or Blackberry but a large number stays with their device. If you look at the data, what jumps out is that forget abandoning Nokia, more users than ever are buying Nokia Smartphones. As per data from IDC, Nokia shipped 39.3% of the smartphones worldwide in Q1, 2010 which is ahead of Blackberry’s 19.4% and Apple’s 16.1%. Android, Palm etc are not large enough to be mentioned by name and are clubbed under Others. Nokia has maintained its market share while Apple has gained at the cost of Blackberyy. The absolute numbers also tell an interesting story. Nokia shipped 21,500,000 phones in Q1 of 2010 which is 50% higher than their own sales. In other words, if the same growth rate continues for another three quarters, Nokia would sell over 100,000,000 smartphones in 2010 alone! Combine this with the already installed base of Nokia and the number is truly staggering.

This begs the question of why so many apps are ignoring potentially the largest market for apps. Some reasons are:

1. On the demand side, no of users doesn’t translate to dollars earned. Some users pay more for the app than other users or their click thrus are more valuable. Once segmented this way the US market comes at the top. US market has a far higher penetration of iPhone, Blackberry and Android devices than the rest of the world and therefore, its no surprise that more US focused companies are developing for these platform. Focusing on US makes sense for an early mover as its a huge market by itself. Even Apple focussed its iPhone in US for quite some time.
2. On the intersection of demand and supply, something interesting has been happening. Apple and now others have promoted the app store heavily. This has led to more iPhone users trying out apps and more developers developing apps for iPhone. Its a virtuous cycle where Apple is ahead and will stay ahead.
3. On the supply side, Nokia hasn’t made it easy for developers to develop apps. First there is a challenge of multiplicity of devices and multiplicity of OS flavors. Second, Nokia has not painted a clear picture for developers and has also failed to deliver on some of its promises. Third, re-orgs within Nokia doesn’t give confidence to developers about Nokia staying the course or its future directions. Having said all these, these are probably less true now than they were a year ago. Nokia is showing signs of resurgence by launch of new models and platforms

The upshot is that large markets are being ignored because the overall market is huge. A blue ocean if you like. But it will take a lot of effort to own the blue ocean and I think justifiably so. So what are the opportunities for developers looking at this space? I think the following could be some themes:

1. Meta Apps which put together several of the web services like Evernote, Amplify etc in one app. A good case study is what Nimbuzz has done in social networking services. Such apps would meet the latent demand of Nokia users who do not have such web services on their mobile as an app.
2. Derivative Apps which build additional layer of functionality on top of another service like Foursquare. These apps would have a better take off in the current scenario as Foursquare itself is not a mobile app on Nokia.
3. New Apps which are inspired by what is happening elsewhere but are made for unique needs of the target segment. For example, Indian urban users have longer commute times than their global peers and mobile serves multiple needs in these long lonely hours. A good example of an earlier opportunity of similar nature is the Chinese Internet market. Global players were slow in moving in as it was not the first priority and had language challenges. It gave ample time for local innovators to localise what they saw elsewhere and to ramp up. Today Chinese Internet is bigger than English Internet in volume and maybe in some time in value too and is dominated by local players.

Arbitrage Apps, apps that provide the same functionality as another one on another platform, in my opinion is not an opportunity most of the time. First, the original one is always ahead in learning curve due to greater adoption and feedback. Second, in copying the original the developer surrenders mentally and never recovers from that mindset. Third, once the arbitrage app shows traction, the original can start competing by launching on the skipped platform. So, no there isn’t an arbitrage app opportunity.

Image Courtesy: The Mobile Phone 1974 by catmachine

I was recently looking at the business cards that I had collected at the recently concluded NASSCOM Product Conclave and I was struck by the utter confusion that is written on many of them. It seems that many haven’t really thought through the reasons for having a card.

To begin with the name itself has problems. First they have a logo – the brand name of the product they have created – with a nice TM next to it. Second they have the company name which is different from the brand name! Now if you’re a startup and are trying to create awareness of your name, why are you confusing people by giving a second name? Think about it, a business card is not a legal document that requires you to have the name of the company on it. The best, of course, is to have the brand and the company name as the same – say Apple. But let’s say that RoC didn’t give you the name you wanted and you like the brand name more. So, why not just promote that one name that you’ve chosen as your brand?

Another related problem is to not have a tagline or description of the product/offering. Fewer people make this mistake than the ones making the dual name one. But this is as serious. A business card is what you leave behind and should have all the information needed to get its holder remember you. If they need to go to your website to remember who you are then you probably lost a large chunk who decide not to. A few lines on the card helps them save the effort and remember you better. These few lines should cover what your product promises to do. That promise is what hooks people and gets them to call you.

Still another one is to not understand the relative importance of the address. Its probably the least important piece of information on the card and yet it occupies most space. Think about it – first, people want to know who you are (Name and designation) and then what you do (Product Name and product’s promise). When they need to get in touch with you, they would either call you (Telphone no or Mobile no) or send you an email. It is very unlikely that they would turn up at your address unannounced. So why is it taking so much space on the card? Its probably a legacy of an earlier time when email and mobiles didn’t exist. In my book, its the least important bit that can go at the back of the card. The email and phone numbers need to be emphasised leaving enough room for you product name and product promise.

While we are on the subject of business cards, here is another thing which is easy to do but I haven’t seen many do. The next time someone says they’ve run out of their cards, ask them for their email IDs and mobile if they put it on their business card. Note it down or enter into your phone right away.

Let’s say you have an idea for a new business that you want to validate. Maybe its well developed to the extent of a prototype. What do you do? A number of things but there are some you shouldn’t do. Here are 5 mistakes that I’ve made or seen others make.

1. Ask an expert: The first mistake that many people make is to ask an expert to save time and effort. Usually the expert gives a general answer because there is little more than he can do. Sometimes the expert points out earlier similar ideas and their outcomes. A slightly better situation is when a senior industry executive has been asked. In the least, the answer is better informed. However none of them are a good outcome. Consider that all of these experts know the world as it is; not what it can be with your idea in operation. Also they may not be intimate with the particular small part that you’re looking at since they are seniors overlooking large areas. A better way is to approach the users directly. It will cost time and effort but will cut out any ambiguities. The users will tell you all that you need to do and in detail. You would certainly uncover many things that you didn’t know or didn’t consider. So cut the switchboard in between and get to the source.

2: Only Listening to users: The second mistake is to only listen to the users. Many times users give misleading answers to look good to the interviewer. Many times they are just unable to express what they need or lack as they have constructed their lives to be satisfactory without it. If there is a focus group, users tend to converge on a few points though separatly they wouldn’t agree on the same points! The way out is to go and observe the users in their natural environment. Allow them to settle in their routine if you’re an intrusion and then only record the observations.

3: Ignoring Price: The third mistake is to not ask about price but only performance. Yes people buy for a the performance/features but at a particular price. Its a very obvious point that many forget. So please ask the users how much would they pay. A related mistake is to ask if they like the product and not ask if they would buy the product. Again makes a big difference.

4. Treating all users as same: The fourth mistake is to treat all users as the same. There are different kinds of users and they have different needs. This means that you need to meet a large number of users to arrive at any meaningful conclusions. In a large data set clusters would emerge that would help you decide which users need your idea more than others. Imagine meeting only a handful of users and not coming across many of this cluster and abandoning the idea. Conversely imagine not meeting the needs of this user set well enough.

5: Treating all parts as equally valuable: The fifth mistake is to consider all parts of the idea as equally valuable. This is seldom the case. Sometimes there are parts that the user is indifferent about as long as the core part is delivered. Now if you knew that then you may not waste time and effort on those aspects. So do ask the users what you can cut out and they would still buy.

These are the 5 mistakes on top of my mind. They apply differently in different businesses, teams, idea stage etc. Consider that when using these in your context. Also there are many more so please do share them here.

I wrote this originally for folks who were doing demos at Headstart 2009. Cross posted from Headstart.

Headstart is a tremendous opportunity to connect with early users who can give you feedback and also buy. In order to make the most of this opportunity, its important to be ready with a very good demo. Also, the way of doing the demo differs when you’re in a presentation mode vs a stall talk mode. We’ve put together a few pointers below to help you with these. These are based on our own experiences of making demos and of being on the receiving end of hundreds of demos.

Before we get started, some links to great stuff on the web:

Guy Kawasaki

Jason Calacanis

Luc Richard