Data War Intensifies with Google’s Memory Hole and Facebook’s Sentiment Research

Big data war

Data is next oil very prevalent thought in an advertising and marketing industry. It seems that recent controversies around ECJs verdict on Google’s ‘right to forget’ feature (memory hole) and Facebook’s sentiment research have also confirmed that the stage is set for a data war.

Some might disagree with my observation and categorize both issues under ethical code to protect the privacy rights of online users, but looking at following points, I think this is a tussle among authorities, data companies and users to control or own data.

There’s no such thing as a free lunch

Online users with a strong appetite for free services are struggling to control data and however unethical it may sound, users will remain on back foot. And reason is how can we avail ourselves of a free service and not expect Google, Facebook and Twitter to utilize our social interaction data, emotions or gestures to monetize their offerings. The truth is, as soon as we subscribe to a free service, we kind of surrender our fundamental right to control data related to us.

There are ongoing attempts from governing bodies to secure user privacy rights, such as limitation around tracking cookies or strict privacy settings, but there are always stories out there that one way or another users’ data is accessed and used for monetization.

Data ownership and processing have gone beyond legal authorities

For authorities, controlling the flow of information or data is a high priority task and rightly so. The main reasons are ensuring national security, protecting users’ privacy and human rights etc., but the days are gone where government and authorities had big budget, highly advanced surveillance programs to ensure data flow was in their control. Now open source, crowd-sourcing data hosting platforms have made it literally impossible for them to monitor information flow without the support of things like Facebook. For example, Facebook likely to be better than FBI at facial recognition due to its larger photo database. So now authorities are left with no option but to take the legal route and force companies to surrender their data, like the NSA program, or restrict their data, like Google right to reject (Memory hole) or Turkish and Egyptian governments’ stopping Twitter access on their territories etc., but it’s not that easy as here the government might themselves violate data protection laws.

Facebook+ have no option other than manipulating sentiments

Despite unprecedented popularity, social media sites like Facebook, Twitter and Google+ are coming under severe pressure for not driving enough traffic or revenue for businesses, plus users’ appetite for continuous use of free services has forced companies to look beyond display advertising models, doing things such as monetizing users’ interests, sentiments or social graphs.

As a result, in my opinion to appease marketers and show them that they are on top of their game, Facebook recently released results of a sentiment research which they have conducted along with PMAC, to analyze the viral effect of people’s sentiments on their platform, and the results unsurprisingly confirmed that sentiments are contagious, especially when they are negative i.e. if a friend posted a depressing update on Facebook, it might make you feel upset too.

But it all seems to have backfired, as the research has drawn loads of flak from digital rights and privacy experts concerning privacy violation. As a result, Facebook apologized publicly and might be involved in some legal proceedings with concerned parties.

Conclusion: The Data War will intensify from now on

Overall, however you look at it, owning and controlling data is vital but a constant struggle, and in my opinion this stems from users, who have become accustomed to free services and have shown no inclination towards paying for services. Therefore content hosting and providing companies have no option but to use or manipulate users’ data to monetize their services. The authorities can only warn users about data abuse and try to curtail data companies by introducing new laws, but when the buck stops at data, there will always a way for companies to monetize that, and therefore the data war will not slow down. Rather it will intensify from now on.

Advertisements

Agile product development for Startups – Part one – First steps

Agile Product Development

So you think you have a brilliant idea that will become a hugely successful product or service. Congratulations!

But how do you turn that idea into a well considered, structured game plan for how you will turn your concept into reality?

Traditionally, you’d do a bunch of stuff around market research, business plans, big project plans and a whole heap of things before you get anywhere near building the thing. But you’re an Agile startup right?

In these short posts, I’ll be referring to the great work of Roman Pichler. I consider Roman to be at the top of the tree when it comes to Agile Product Management specialists. His site has loads of detailed background and resources on the areas I will just skim over.

So how do you quickly get from a concept to an initial Product Backlog you can start working with? Here’s a high level of the first steps you probably want to take.

Step 1 – Understand your users. You should create personas for the different types of user your concept is aimed at. A persona is a fictitious person who represents as closely as possible a typical type of user of your product or service. Personas are important because they remind you that you are developing a product for people, not generic user types like “Author”, “Editor”, “Administrator”, “System User” etc. In most cases, you’ll have multiple personas to represent the different types of people your product is for. Make your personas visible in your team space to remind you everyday whom you are designing for. You don’t have to define loads of detail up front. Your personas will evolve as you learn more about them through user testing and other forms of feedback. Here’s a short definition from the Agile Alliance.

Step 2 – Develop the Product Vision. In short, you need to define who are your users, what of their needs are you going to address, a super high level view of the capabilities your product or service will provide to meet those user needs, and finally, what’s in it for you? You should also define a one sentence “vision statement” to encompass the whole concept. A vision statement for YouTube might be “A free online video hosting, sharing and streaming service funded by advertising”.

The Product Vision is important because it provides scope boundaries. We know that things move in and out of backlogs as we gather insights and inspiration.

We may define a Product Vision for a new car, and as we learn more about our users and our needs, an initial view that they want four seats may change. They may want six seats, because in our target market, people often travel with the whole family. But it’s still a car.

However, if our Product Owner explains that we need to provide 50 more seats, spread over two decks, that’s not a car any more. It’s a bus, and that doesn’t fit within the overall Product Vision.

That’s not a bad thing. It doesn’t mean we say “No, we’re building a car, so we won’t do that”. If our users really need a bus, we should reset the product vision and the steps that follow it. What we have discovered is that the car is not the right product to build.

The Product Vision is also very important to align understanding and expectations early from stakeholders. If you are going out to angel investors or other routes to seed funding, the PV and other artefacts will be absolutely vital to get your concept across concisely and professionally.

Roman Pichler’s Product Vision board is a fantastic resource that I have introduced to many teams. I wholeheartedly recommend it. Here’s a link to Roman’s site.

Once you have your Personas and Product Vision established, you have a solid foundation to work from. The PV is vitally important, but it lacks a critical dimension – time. In my next post, I’ll explain how you build on the Product Vision to move towards creating that Initial Product Backlog.

JustDial and InMobi are Leading the Indian Startup Scene

Indian startup scene

More continent than country, India is home to 17.5% of the world’s population. One of the emerging economies, it has no shortage of traditional entrepreneurs who have been part of the family business for ages, but the new wave of startups is still at a nascent stage.

The hottest sectors for startups seem to be E-commerce and Online Travel, with many companies having a valuation of about 1 billion dollars. Native companies like Flipkart, Jabong and Snapdeal are giving strong competition to Amazon, which is such a success story in the US.

India has its own Silicon Valley – Bangalore. About 41% of the startups are in Bangalore and 33% of them are ecommerce businesses.

The biggest advantage of starting up here is the sheer number of young people with access to online opportunities. Also, in a developing country, an organization that can develop unique solutions for its problems will be a sure success. For example, JustDial, a company that gives information to people having no internet access by sending it via SMS or InMobi, a startup creating waves in the Mobile Advertising sector.

There are an equal number of challenges to overcome too. The major cause for the slow growth is poor infrastructure, although much improvement has been made in recent years. Government regulations, risk-averse consumers and an overall lack in basic facilities are hampering further growth. It is said, that any organization that can take on the complexities of India may well be equipped to tackle the world!

In recent years, there has been just one Tech IPO (JustDial), while other startups have gone through successive rounds of funding. At the end of 2013, Zomato, a restaurant recommendations app, successfully raised funding from Sequoia Capital India and entered the 1,000 crore club (approximately 160 Million dollars).

India is attracting a steady flow of foreign investment because of its immense potential and fewer market entry barriers in comparison to China. With no dearth of talent and a passion to excel, India’s ‘Startup Age’ is just beginning.

Just because you build it doesn’t mean they will come!

Before we start, and to prevent you wasting time if you don’t like what I am about to say, I am not a techie. Not in any way shape or form. I barely manage to operate my Mac let alone advise on the finer points of the dark magic worked by you technocrats out there. However, I have always followed my good friend Shashank’s blog with interest and love to read different views on events out there.

So when he asked me to pen a follow up to his informative and interesting article Seven ways for start-ups to monetize business about how start-ups might scale their businesses once they have established their revenue model, well how could I refuse. So here are my 5 key thoughts, and perhaps (hopefully) they are not what you might expect:

1. Oh, let’s go back to the start

Shashank’s piece identified many, if not perhaps all, of the revenue models available to tech start-ups in a very easy to read and useful manner. What I don’t think he stressed enough is that in my view every single start-up must identify what the applicable revenue stream(s) for their business is (are).

One of my roles (I like to keep it plural) is with the Jenson Seed EIS Fund which made 35 investments in early stage businesses during 2013 and has made 7 so far in 2014. To do that we have seen a lot of business plans during to get to these investments and one of the key failures we have seen is that the entrepreneur involved focuses too heavily on the operations and totally ignores the end customer. Worst still this is most common with pure tech companies who often appear to think that the benefits of their product are so obvious people will find them.

So my advice is look at the most applicable revenue model for your business and make it integral to your vision and business. It can change, and develop, but there are plenty of case studies out there you can learn from. I know you are a disruptive new business and there is nothing else like you out there (raises eyebrow and asks quizzically….”really?”) but if you don’t have revenue you are either a charity, a project or bust.

2. Know your enemy

Most start-ups, whether in tech or old world, fail because they run out of cash. In my experience they run out of cash largely because their revenue predictions fail to materialise as they predicted or at all.

So my advice is get to understand your prospective customers. Spend time with them if possible. LISTEN to what they are telling you and sometimes stop evangelising about your product long enough to take it on board.

Is your product a nice to have? A must have? How does it compare to the completion? Accept there is always an alternative and clearly those alternatives are competitors. Understand the different buying cycles and timings particularly in the B2B environment. Be clear about how difficult it will be to break through in the B2C environment. Being “disruptive” might not be enough.

In short, just as you would in a military campaign, understand your customers as intimately as possible because to know them makes it easier to reach and convert them.

3. Let’s stay together

Once you understand your customer you need to test, test and retest different ways of monetising him. Your original vision might change, as might your revenue model, you might have to pivot (shudder because this word is often misused and I have tried to ban it in our investment panel meetings) but by testing different ways of reaching customers and getting money from them, once you have them make sure you stick with that model.

Too many start-ups assume that their revenue model will work based on no data. As an investor we tend not to support this, and as a business owner I think it is commercial suicide. You need to know how your customer wants to deal with you or how you are going to monetise him most efficiently and then you can stick with that, and them.

4. Do[n’t] stop believing

I was once asked if I loved my products. The question was asked when I co-founded and grew a giftware company (teddy bears, photo frames, key rings etc) to become one of the largest in the sector. My answer was a categorical no. I love my business. I only love my products if customers are buying them and they are making money for my business.

It appears to me that too many entrepreneurs these days love their businesses or products a little too much. Sometimes it is worth taking a step back and considering if what you are doing really has a future or if it needs to change. Whilst persistence beats resistance, blindly banging your head against a brick wall will only lead to a bad headache (often characterised by the phrase “we need to educate the customer”).

5. Bring the noise

If you have identified your revenue model(s), understood your customer and constantly tested and evaluated the data you have received objectively then you should be ready to go. If that is the case, go and go hard. Put all your resource and effort behind supporting this and grab as much scale as you can manage as quickly as you can manage it before somebody else does.

As a final observation, the tech revolution has brought many great and wondrous things and appears set to deliver for a lot longer. One darker side that I have witnessed is a certain complacency in the tech sector, which gave this blog post’s title. However, in my experience in business you might build it, but it rarely makes them come. You have to drag them (metaphorically) kicking and screaming.

For those of you that might have been wondering I decided to use song lyrics for each of the headings. To stop you all going nuts the answers are:

1. Coldplay – The Scientist
2. Green Day – Know Your Enemy
3. Al Green – Let’s stay together
4. Journey – Don’t Stop Believing
5. Public Enemy & Anthrax – Bring the noise

Sorry if they are a little tenuous…but it amused me!

About An Author:
Martin Spiller describes himself on Twitter as an entrepreneur, consultant, lecturer, investor, accountant, barrister (non-practising) and is fuelled mostly by caffeine and nicotine. Martin can be reached on Twitter @MartinRSpiller