Luke Janssen

Jumping off stuff

Mint.com rocks

I saw this video by the guy who started Mint.com, which I use and think is excellent. What I love about Mint is that it is simple, it does what you want it to, but no more, and it looks pretty and just works well…

The speech is quite good too if you are interested in starting up a company like he did. see it here: http://vimeo.com/6960507

What I found quite interesting is the VC / money raising opportunities in the USA. We just didn’t have that in Australia when we first started out, which is good and bad. Good because we still own and control the whole company, but bad because we did have, and still do have some personal hardship.

Aaron Patzer talks about how he had to ‘barely survive’ on US$30k a year in SF. I know that Olly, Dean and I would have loved $30k a year in the first year (or two!); as it was we each went almost $30k in credit card debt (Thanks KPMG for giving me a good enough rating to sustain that amount!).

Haha thats sounding like a ‘you never had it as hard as me’ story!… but I do tip my hat to Aaron, who built and sold Mint for $170m within 3 years! half the time we have been around, which is very impressive considering he did nothing new or innovative. Just executed really well with really good usability!

Part of me wishes he had continued and taken on the big guys and beaten them. I reckon he could have!

Magazine iPhone apps

Magazines!… grow some balls and charge for your iPhone and Blackberry apps. I hear so much whining about ‘oh the BBC is stealing all my eyeballs‘ or ‘boo-hoo the advertising revenues are down‘, well here is your chance to make some subscription revenue and you are squandering it!

iPhone 3.0 can handle subscriptions….  nice ongoing subscription revenue. Even $1 a month would help. I read the telegraph every day on iPhone and I would gladly pay that, and people will gladly pay as long as that becomes the norm. But they won’ t pay if people like Business week are pulling their pants down and destroying the model early.

Business week bringing out a free iPhone app is the WRONG approach. You don’t give away business week for free at the newsstands do you? I hear alot of back pedaling by publishers lead my Murdoch who is now trying to charge for on-line content when it was free before. This is the right idea, but its like closing the gate (10 years) after the horse has bolted.

Now we have a new horse and are thinking of putting him in a pen with no gate again!… why?.  Magazines have a price, and also advertising revenues. Why change the business model just because the medium changes? Sure you don’t have printing costs, but you still have to pay journalists, who are being laid off faster than something very fast that I can’t think of right now.. And it doesn’t seem bad now, but believe me, we don’t want to wake up in 10 years to find out that we live in a world where journalists have been replaced by bedroom bloggers and Twitter!

So like I said – grow some balls, and charge for your valuable content (unless you think it isn’t valuable) AND get advertising revenue too – just like you do for the actual magazine. You never know you might actually make some money!… and as a bonus, you could save journalism too!

Farmville

It used to be the ‘what cupcake flavor are you’ quizzes that pissed me off, but it was soon replaced with my Facebook wall being filled with the latest updates from people’s virtual farms. Brad has bought 10 more chickens!

Then I saw this article in the telegraph about it being the most popular Facebook app out there. There is a top 10 list (below) which is interesting. With that many daily users these apps get more attention than most media companies…

1. Farmville, 13.4 million daily users

2. Farm Town, 6.0 million daily users

3. Mafia Wars, 5.8 million daily users

4. Facebook for iPhone, 5.7 million daily users

5. Facebook for BlackBerry, 5.2 million daily users

6. Pet Society, 4.4 million daily users

7. Texas HoldEm Poker, 3.8 million daily users

8. Restaurant City, 3.7 million daily users

9. Facebook Mobile, 2.7 million daily users

10. YoVille, 2.6 million daily users

Aussies punching above their weight

A while ago I was wondering which country had the highest number of iPhones per capita because I suspected it was Australaia. I was wrong it was the USA, but Australia was 2nd, so I was almost right.

iphone by country

Because of Australia’s mini population, they are not that far behind the USA for number of iPhones per capita.

I think that Australia is punching above its weight in many areas. Take a look at the Olympic medals per capita from the Beijing Oympics. Australia is really the most impressive in that list. Truly winning things rather than just having a small population (Australia has more than double the next most poulous country in that list)

gold per country

I think that because Australia is pretty far away and isolated,  they are overcompensating in areas like sports and innovation.

We have looked the usual suspects for cheap technical development teams all over the world – India, China, Canada, Eastern Europe, and to be honest, the best value development in the world is in Australia. Like they are in sports they are innovative, creative, smart, good attitude… etc… they aren’t as cheap as some of those other places, but for what you get they are the best value.

I would even say they are at least as good if not better than the best dev in the USA, but probably cost half as much.

iPhone 3G, or 3GS?

The name reminds me of the Porsche Boxter S or the Aston Martin DBS. Not sure if that was what they were going for. Anyway the new phone was announced on 8th June at WWDC.

Details are here

The main points:

  • 16GM and 32GB versions will cost US$199 and $299 respectively. Old iPhone 3G will now be US$99.
  • Faster than the 3G version due to more RAM etc
  • Better camera (3 Megapix – which is all you need) and it takes video (which is big. More significant than people think it will be due to the ease of taking and uploading video – we will see a big increase in UGC activity. It’s the key reason for me buying it).

SUMMARY

Apart from that, the 3G iPhone with 3.0 software does pretty much the same things that the iPhone 3GS does, but a little slower and with not as good a camera.

So the choice is do you pay $100 extra for a good camera and for it to be faster (and don’t forget bragging rights for having it early). I would pay the extra for the extra camera, but if you don’t take and upload alot of video, I would go for the 3G at $99.

Apple – 3 main predictions (and what sells phones)

Ok since it isn’t out yet, here are my three main predictions for what Apple will do, since everyone seems to be making predictions one of these will be announced at WWDC, and the others over the coming year:

iPod Nano phone

Cheap version maybe on Verizon / for Walmart. Also a Nano sized phone would look awesome and girls would love it. Especially if it is pink. Yep, that does sound sexist, but look what happened with the Pink Motorola V3. Unfortunately for the geeks, the fact is that design sells way more than features. There is a whole section of the market who don’t care about features at all as long as the phone looks cute, and feels nice in their pocket / handbag.

New iPhone 3G

Even though I firmly believe that features don’t sell phones, there will be a new iPhone 3G in response to the Palm Pre / others, with head to head competing features. The one area where a feature does sell is megapixels with cameras. Which is utterly ridiculous because all it means is that my mum sends me images that are way too big. With the age of sharing images on Facebook you don’t need or want high megapixels, and actually end turning on the ‘for web’ setting. Where Apple wins is usability. Usability trumps features.


Medium sized tablet

My Sony Vaio is excellent. You can’t travel with a PC that is bigger. But it is still too big. Often I use my iPhone (which I use alot, and haven’t made one call on it yet) instead, but it is still too small. So these two need to converge. And this is the Apple tablet, which will be less than half the size of my Vaio, and more than twice the size of my iPhone. Maybe an iPhone that you flip open with touch screens on both bits.

While I am at it, this is what sells handsets (in order)

  • Design (external design – does it look and feel pretty, and not seem to plasticky. Also important here is what is cool. What does Paris Hilton have?)
  • Usability (is it easy to use and not frustrating. In particular texting. For business users, this is important too, how to read, organise, search email easily. Better to have 3 features that are simple and usable, than 20 that are not usable)
  • Price (what can you afford on what plan – what is being offered free. All manufacturers will need a low priced entry level handset to grab market and then move them through the range later)
  • Features (the least important factor in my opinion. They have to have value and most importantly be easy to use. If I were in charge I would have as few features as you can get away with, but make them uber usable)

iPhone 3.0 Software

I decided to write this document because I did some reading and watched the iPhone 3.0 video (which you can too here, but who has time to sit through over an hour of video these days, so below are the highlights and some analysis of what this means to you, with some time segments of the video referenced so you can go straight there without having to see the whole thing. Summary is here [01:22:10].

There are some also insights into iPhone too and why you should care about it more than you think you should.

The short answer is that the new improvements in 3.0 make an already great product even better. There really is no excuse for brands not to have a presence in the app store.

Key Statistics

  • 30 million iPhones and iPod touches and growing
  • In 80 countries. They excluded China, our man on the ground there tells me there are so many (All cracked of course)
  • 45,000 apps and over 1 Billion downloads from the app store so far
  • iPhone 3.0 SDK was released for the developers on St Patricks day 2009, and will be pushed out to everyone’s phones this summer
  • iPhone apps are now being approved within 2 weeks
  • I could go on, but the short answer is that the iPhone really needs to be the centrepiece of your digital strategy. It is the quickest way to start doing something that works

For me this graph is the most important

iPhone usage

The blue bars are how many handsets are out there, and the red is how much traffic they generate as a % of all traffic. See if you can guess which one the iPhone is! What this means is that despite having a small number of total devices, iPhones do the most searching of the mobile web. Almost HALF of all traffic is generated by 8% of devices.

This is because:

  • Design of the iPhone is way nicer than all others at the moment, so you want to interact with it
  • The usability of the iPhone is way better  than all other phones. They just spent more time getting it right

I know people who switched from a high end Nokia perfectly capable of web browsing, but only started when they got their iPhone. This may not be the case for ever, but it is the case now.

Apps are a similar story. The Blackberry app store is a very poor cousin to the iPhone store. No comparison really, and Nokia Ovi will take a while to gain traction, although both have potential.

Summary of 3.0 new features

This section will loosely follow the video, and if you want to see more you can go straight to the time listed.

In app purchase [00:11:00]

This means you can buy extra stuff without leaving the app. You set the price, get 70% of it back and Apple pay you monthly . Apart from extra game levels, the big winners here are magazines, and in particular magazine groups.

For two reasons:

  • You only create one app, and then sell each edition of the magazine. You can get revenue straight away and so don’t need to rely on mobile advertising, which won’t bear fruit until 2010/2011 in my opinion. If you want that route, go for Sponsorship for 6 to 12 months with one of your best advertisers
  • This spring, The Audit Bureau of Circulations (in the USA) has recently allowed non replica versions of magazines to count towards paid digital circulation. This means your iPhone magazines can boost your circulation numbers (and therefore your ad rates).

For city guides, or groups with many titles, check out [00:12:00]. Having one main app means revenue potential is way higher than for individual apps per issue. AND you get to cross promote.

Any magazine or magazine group that isn’t taking advantage of the 30m people and the easy payment mechanism that this new channel gives needs their head examining.

Push notification [00:22:00]

This is one of the best features of the 3.0 software. It allows the application to send you an alert which you can then click on to go into the application (either on a pop up screen, or in the SMS inbox). If you pushlook at usage patterns of applications, people stop using them fairly quickly. These reminders are good ways to reduce this.

Check out how ESPN are sending over 50m push notifications a month  for sports [00:39:15]. Very cool. If you do alerts, have a look at how ESPN are doing it and copy them!

Another cool thing is that you get to assign your own sound to the push notification.

Accessories [00:18:00]

This lets developers design for accessories. This new API lets you control the accessory from the iPhone. For example a graphic equaliser to control a spreaker that you plug your iPhone into it.

The main winners here are the medical devices companies. There is a good example of what Johnson and Johnson are doing at [00:43:30]

But so what you can do the same for other devices? The thing is that iPhone is way easier to use, and looks good. For older people this is what they need. Until the iPhone, high end devices perplexed the older generation (and when I say older generation, I of course mean anyone over 30! :)

Maps [00:19:05]

mapsWE can now use Google maps within iPhone applications, including location based information (with GPS, Wifi and cell tower triangulation for non 3G devices). The maps are free:  You don’t need to buy or license your own maps, you use Google’s. Which are the standard these days.

Knowing where you are opens up one of THE key values of mobile, so the Big winners here are any applicaitons that direct you somewhere. Restaurants, Hotels, Shops, events, parties etc… Finding out wher eyou are now, and whee you need to get to is way easier now.

Palm Pre has full turn by turn directions with their GPS, which 3.0 does allow IF you bring yourown maps. Great news for people like Tom Tom and NavMan as they have 30m potential new customers. And in app purchasing means that they can make their money on the additional maps needed.

Peer to Peer [00:14:50]

This is great for games where you want to play against other gamers near you. But it is also great for business.

The great thing here is that it connects over bluetooth with automatic discovery and no pairing. So it is easy. I don’t care what anyone says, Bluetooth up until now has just not worked. We have been working with it for 6 years.

So the big winner here in my opinion is brand sponsored games or business applications where the main areas of business are in big cities like London, or New York (or anywhere where there will be more than one iPhone out there). I ride the subway from Brooklyn to Manhatten every morning, and see at least 3 other iPhones, but you do need this.

Other cool customer features [01:03:00]

  • In app email – will mean that viral spreading of apps or content from apps becomes way easier
  • Streaming audio and video – iPhones now become radios. All radio stations must build fron ends
  • iPod access – so you can access the songs from within your app. Great for personalised applications [00:34:00]. In SIMS3, you can buy a stereo in game and play your own songs through it!
  • Landscape keyboard – a big criticism of the iPhone compared to Blackberry was the keyboard. JD power recently rated the iPhone number one in customer satisfaction among business users so don’t be surprised to see Blackberry overtaken soon for this demographic [01:11:50]
  • MMS – this is now supported allowing sending of video and multiple images. Great for news for companies who want to do UGC campaigns [01:12:20]
  • Universal search –lets you type in a search word, find it within emails, notes, songs, apps…  everything  [01:17:32]. Probably a reaction to Palm Pre’s similar functiaonloity but pretty good nontheless.
  • Copy and Paste – you can now do this from anywhere to anywhere [01:09:22]

What not to do

Don’t go cheap. To quote my Singaporean camera sales guy “you want cheap?, is no good… you want good? Is no cheap”. We have seen a few times where clients have gone for the cheap option. One had to completely rebuild their app, and the other is still waiting forit to deliver 3 months later. Don’t pinch pennies on this, you wouldn’t with your corporate website, and you shouldn’t with your iPhone app.

Use professionals. If you can find an independent iPhone developer who is good and professional, then great. If he or she is a good designer even better. But from our experience the best iPhone freelance guys are working for themselves, becoming rich enough by building their own games, and if they mess it up, you are left with no redress.

Put together a Financial model for when the project will break even. If you use US$50k+ as a ballpark for a reasonably good app, and you sell it at $1.99, you know that you need to sell 34,000 apps to break even. Throw in sponsorship, and you can be making a profit before you even start the build. This is absolutely possible, we have seen it work a number of times.

Consider other applications. If you are building an iPhone, keep the wireframes, walkthorughs, designs etc.. for Android / Blackberry / J2ME apps. Don’t pay for separate builds where you don’t have to. Technically since iPhone is written in C and the rest based on Java you will need separate builds, but many elements will be the same.

Security best practice is making things less secure

When I worked in KPMG, I used to do IT general controls reviews (pretty much the entry level for companies that wanted to use our department – Information Risk Management). Basically we would review the general IT control environment and then give feedback on how to make it stronger.

There was a passwords section for which we said:

  • make sure passwords are over 6 characters in length
  • make sure passwords have numbers as well as letters
  • make sure passwords are changed every 60 days

Well that is all BULLSHIT!… I am so sick of logging into a website where you share pictures of your dog only to be told during the sign up process “your password needs to have 6 characters in it” WHY? just in case someone hacks my account and maliciously sends out pictures of someone else’s dog? 

Remembering all the passwords is so hard for anyone to do, that you end up writing them down. Same with bank account PINs. I have them in my phone. In short the security is weakened by best practice for strengthening it. Apart from writing it down, people use the same password for their god sharing site, as well as their banks.

Something needs to be done? but what?

  • Don’t require passwords for stuff that no one gives a shit about, like dog sharing. Or allow weak ones. Don’t force people to change them.
  • People can do a few things: a) have lower level security passwords for dog sharing, and higher for banks, oer b) derive the password from the name of the site you are signing in to.
  • Work out biometrics. It has to work. Eyes, fingers, face recognition… its not that hard, surely.
  • Use your mobile phone as an RFID device with your digital signature on it, and one 4 to 8 digit code that you put in 

Anyway that is enough of the rant, I’m off home to Brooklyn to eat!

Whistling from London to Louisburg

Just thought that I would write about a trip that I took recently to Louisburg, since I seem to have gotten a load of hits from winning the whistling competition recently. My whistling related blog that I just set up is here.

In short it was excellent, and not just because I managed to win the overall “international grand champion” prize, but because everyone there were cool people, I went down with my cousin, girlfriend and her friend and stayed in a really nice place. Geert Chatrou – who is still the best classical whistler in my opinion – is excellent, so edging him out was a bit of luck – it must have been very close… he is dutch too. Must be something in our genes!

This is actually my work related blog, so may not be as interesting as non work ones. There is some stuff about me and about Steak that is non work related. But now that I am on the topic of work - I spoke to a guy (one of the other whistling funalists as it happens – Eric) who is doing some great experimental work with Augmented Reality…. very cool we will hopefully do some work together soon. I also noticed that lack of coverage that I had, losing coverage many times…. I suppose I was out in the country!

Integrated consolidated groups are not the way forward

I knew when these groups were being put together that they weren’t necessarily a good idea. We talked to a number of them in Australia and overseas initially, and recently (with the exception of Photon) have seen all of them struggling with falling share prices, layoffs and a lack of clear direction. Here are the reasons why I think they are not the way forward: 

Most mergers / acquisitions don’t deliver

I learnt this long before TigerSpike when I worked on them at KPMG. Any management degree will also tell you that mergers and acquisitions are more about egos than exploiting synergies and driving value (which should be the only reason for them).

If you look at many of the consolidated groups, they are a combination of many companies. So how can this work? When one is hard enough, how can you get value from many?

Motive is wrong

If ego or only money is the motive for these groups then that is not right. If you are not sure if it is, I’ll give you a clue – it is if it is being driven by VCs and bankers then it probably is. The Finance guys of course need to be involved, but not the ones driving it. Blue Freeway was a good example of a company that was being run to look sweet to VCs and investors without thinking about adding value to clients. They have since changed their model, but still seem to be suffering.

Some examples of reasons for mergers or acquisitions are a good idea are:

  • A company with many publishing clients buying a company with a cool piece of technology and selling that through their client network
  • Two companies with complimentary geographic footprints merging to become global and sell to clients who need a truly global footprint
  • An old media company buying a new media company to infuse the new technology, innovation and thinking into their company
  • A traditional advertising agency with many clients asking for digital services buying a company who provides these services to expand their offering to these clients
  • Two similar companies merging and saving costs by centralising support functions (if they can harmonise their processes so that the central admin guys are not just working twice as hard on each individual company’s processes) 
  • There are more, but you get the idea

The motive for these things need to be that the combined group can add value to their cleints, while either cutting costs or increasing revenues, or both. Put simply, 2 + 2 has to equal more than 4.

Technology is underestimated

Originally BlueFreeway was going to combine the platforms of all the member companies into one “Blue platform”. This sounds good (to the VCs as it builds their IP), but in practice it is never going to happen. If the tech guys in each company are anything like our tech guys, they all have their theories on the direction of tech and they are all right about those (NB: we actually are right!).

Now imaging putting them all together and trying to form a consensus on:

  1. which technology direction to take (people like Joost got it wrong initially, and paid for that) 
  2. which base technology to use – I know that half the Blue Freeway companies used .Net, and the others Java, and others
  3. how much time each tech team has to spend on the central project (our tech are fully utilised for 6 months on our own client projects. If we were part of a group, spending time on a big central project would mean that revenues would fall)

I.e its NEVER going to happen. Going back to my days overseeing technical integrations at KPMG, the banks had a really hard time integrating two of their own internal systems, and they had ten times the budget and resources that these groups do.

Building from scratch is more viable, but that takes a long time. We are on version 3 of our Phoenix platform which has been continually updated over the last 5 years. We have guys assigned to it full time. Building a new one that meets the needs of all the group companies is very very hard, and each new company purchased becomes a new complex integration project. 

People forget technology. Especially the money men or the wide boy entrepreneurs. Technology buried Boo.com. If you get it wrong you are fucked no matter how good your marketing / PR spin is.

Heart is ripped out

Most of the companies that are bought by these groups are medium sized start-ups. They are being run on the passion of the founders and every ones hearts are in it. It is “us against the world!”. When the founder cashes out, or takes orders from someone with a different direction in mind, then things change. 

When the motivation leaves these companies performance falls. Also with a larger group behind them, the long suffering underpaid staff who were doing it for the love now start to ask for more money. This is inevitable: if you are not motivated by other things, then money becomes more important, and that increases the biggest cost that these companies have. Again, performance suffers. 

Advertising is changing

But there are many groups out there. Photon is doing well, or look at WPP or any of the other big advertising groups. Why are they working?

I think that the reason is that they give the individual companies autonomy and feed them work through the other companies in the group. But to be honest, we work with many of these groups and they often don’t like each other, and often pitch against each other and try to nick work from each other’s clients. We are often engaged to help with mobile work despite the existence of a mobile company within the group.

The theory is that big global brands can go to one advertising network like WPP and get everything they need. Problem is that is not the case. The one relationship to rule them all’ doesn’t happen because the companies are not that close, and specialisms like mobile and social media are just not good enough within the agencies. We have seen many larger advertising agencies put their hand up for mobile work that they just can’t deliver, and they end up doing something stupid like QR codes when only 5% of handsets have the reader installed (creating an extra unnecessary step for consumers).

Brands are starting to go outside these big groups for 2 main reasons: 

  1. the skills they need are not within the group. No matter what the bigger guys say, the smaller agile independent digital companies will always outshine the big agencies for innovative and cool work. Which is what the brands want
  2. the big brands can exert power over the smaller companies. For example Brand X will get more personal attention from a medium sized agency for whom they are one of their largest clients, rather than from someone like Publicis for whom they are one of their smaller clients. This trend is also being seen in tech companies, where big dollars are flowing away from guys like IBM and towards medium sized technology outfits for this reason.

The risk in smaller companies

Ok, so before I get too down on them, bigger companies and groups do have some advantages over smaller companies. Smaller companies if they are good, are likely to grow. Smaller companies who grow fast may well be very profitable, but they will go bust if they are not careful. You don’t want them to go bust in the middle of your project.

They may seem cool, and exciting, but many smaller companies lack the controls and processes that larger companies have (that said, I am constantly surprised how many many larger companies are weak in this area). If you are their biggest client running their biggest project, then this is uncharted territory for them.

In summary

  • Only merge or acquire if 2+2 really does equal more than 4. Do it for the right reasons
  • If you are a brand, shop around for cool services that you want. These may well be within a group, but don’t assume that just because one group company is cool and easy to work with and do good work that the others will too
  • Make sure if you go for someone smaller that they can deliver what you need. What you don’t want to do is work with a small company who goes bust or gets so busy they can’t deliver for you
  • Go to a cool independent medium sized company like us (Oh jesus christ!.. don’t tell me that whole email was one big sales pitch for TigerSpike… haha…)
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