Fritz Charles

My passion is all things mobile. From mobile payments to mobile advertising to mobile games, I keep a hand and interest in all. I hope to share a great deal of my mobile research and drive conversation on this page. My day job is as the Data Scientist at iROKO Partners, where I lead the analytics strategy for iROKOtv, the Netflix of Africa. In my past life, I was an equity derivative trader at Lehman Brothers and Barclays Capital. I hold a Bachelors of Business Administration in Finance from Baruch College and a Master in Business Administration from The Wharton School of Business. I spent a lot of time learning how to "administer" business. No, I'm not sure what that means either. I love discussing entrepreneurship, tech, geopolitics, hip-hop, and sports. Send me a Tweet or reach out to me on Linkedin.

[fritzcharles]

"This is the birth certificate of the Haiti we all want to live in" -  Patrick Sagna COO of Surtab

Amazing story about the first tablet manufacturer out of Haiti. Hopefully this ushers a new wave of innovation and job creation out of the Port au Prince. 

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Fritz Charles: ‘Lehman Built My Foundation’ (by WSJ Live)

I was fortunate to be included in the Wall Street Journal's piece as part of their article commemorating the 5th anniversary since the Lehman Brothers bankruptcy. Wow Time flies. 

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It's been a while

It's been a crazy year. My goal is to blog more often going forward.

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Why I Never Review My Kindle Books

When it comes to recommendation engines, Netflix and Amazon are industry leaders.  They do a great job of studying a person's search and purchase history and suggesting new products that the user may enjoy. Amazon takes it a step further by sending suggestions simply based on what you search.  For instance, I went to amazon.com the other day and was logged into my amazon account.  I searched for "Machine Learning" books, I checked out some books but didn't buy any. The next day, I got this email: 

This is excellent, I can say that this would increase the probability of purchases.  (One note I would make is that my name is clearly not "Amazon.com customer", if Amazon knows my email and can connect that to my search activity, they surely can connect my name to my email address. Small detail, but personal touches matter.) 

Strategies like the one above are well implemented to help me come back to the website. But once I am on the website, how do I decide which books to buy? Like most shoppers, I read the reviews. I read the reviews but never leave any, even though I have purchased numerous amazon books. I blame Amazon for the fact that I never review, they can do a better job of encouraging me to leave reviews. It is their job to make leaving reviews as seamless as possible.  More reviews lead to more ratings.  Their recommendation engine can use my previous reviews to suggest books that are not only similar to the ones I read before, but similar to the ones I read and liked. 

Here are some suggestions that would lead to more reviews: 

1.  Make Reviews Timely and Easy

When is the best time to review a book?  When I just finished reading it.  When I read a book on my Kindle application, there is nothing on the last page that tells me or encourages me to leave a review.  Adding a quick note and field at the end of the book would make it easy for folks to leave thoughtful reviews. 

2.  Reminders/Notifications

When I log into Spotify, I am notified of people who have subscribed to my playlist or have recently joined Spotify. Why not have something similar on amazon.com?  Why not have a notification button that would remind me to leave reviews on books I read? 

Alternatively, this can be done on my kindle application. My kindle application shows all of the books I've read: 

Why not remind me to leave reviews on them? Highlight the books that I need to leave reviews for and allow me to do so in-app. 

These quick fixes would increase the number of reviews, improve the recommendation engine, and will help convert more users into buyers. 

[fritzcharles]

Facebook Integration in Mobile Gaming

Mobile gaming is a very competitive space. Many mobile gaming studios feature very similar games and go after the same audiences.  Pockets Gems and TinyCo are no different. While these studios have similar games, they have much different strategies when it comes to incorporating facebook into their games. Both have games in the social zoo category, Pocketgems has Tap Zoo and TinyCo has Tiny Zoo. 

Tap Zoo > Tiny Zoo in terms of MAU.

This data is flawed in that it is extracted from Appdata’s Facebook numbers, which  by definition depend on the % of users who link their account to FB. 

Interpolating from the app store ranks & the respective numbers of ratings, it appears Tiny Zoo > Tap Zoo (in the current period).

Assuming the current period is indicative of the respective lives of both games, then Tap Zoo is doing a better job of getting users to connect to Facebook (which overall can improve virality)

Conclusion: Tap Zoo has stronger mechanisms for getting users to connect to Facebook, & benefits from the entire knock on effects of that relative to Tiny Zoo, despite Tiny Zoo having significantly better mobile distribution. 

A good measure of retention is the DAU/MAU ratio, which measures the stickiness of the application.

According to AppData, the average DAU/MAU ratio for Tiny Zoo is about 4.3.  Tap Zoo has a figure of 13.87, which is 4x Tiny Zoo.  

Extrapolating this to the broader user base (non FB connected), this implies Tap Zoo users are more engaged, & Tiny Zoo isn’t maximizing the opportunity to keep users coming back, telling their friends and buying virtual goods.

Recommendations for TinyCo:

There are many points where I should be encouraged to share with my Facebook network but the flow could be improved.

For example, there is a social button on the bottom of the screen which is pretty clear, once I click it, I am brought to the Tiny Social page where I see a big Facebook button where I can go and invite my friends with a generic Facebook post.                       

A much more powerful Facebook sharing mechanism would be to allow the user to share a screenshot of their zoo.  This functionality exists but it is under the main menu rather than the Tiny Social Menu, which is counterintuitive. 

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Mobile Ad Model Comparison Chart

While doing some research on the different mobile ad models out there, I created a quick reference chart that I thought I would share:

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Eastern European Mobile Ad Spending Data

Not only does Eastern Europe have some of the fastest mobile speeds in the world, the region also features some of the fastest growing rates in mobile ad spending.  Ex-Russia, Mobile ad spending grew 302.5% and 148.9% in 2010 and 2011, respectively. When it comes to mobile, Eastern Europe is a region to keep an eye on. 

Mobile Ad Spending:

Mobile Ad Spending Growth: 

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Mobile Internet Speeds fastest in Greece and Ukraine

While reading Ooyala's Video Index White Paper, I came across an interesting infographic that outlines internet connection speeds around the would. I was surprised to see that Greece and Ukraine have the highest mobile and tablet connection speeds, respectively:

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He who is not courageous enough to take risks will accomplish nothing in life. - Muhammad Ali

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Foursquare Business Development in Action

Every new year, most people have a new year resolution of going to the gym more.  I am no different. Like most people, I decided to act on this resolution in the summer. To track my gym time, I used foursquare checkins. 

Foursquare has badges that reward certain achievements. Since I frequented the gym a bunch of times in July, I unlocked the "Gym Rat"  badge. 

After I was awarded this "Gym Rat" badge, I got these tweets:

I thought, why is GE tweeting me? How did they know I went to the gym?  First I wondered how they knew I went to the gym, then I remembered my Foursquare badge.  I then wondered if it was a spam message. I figured I would take my chances and followed the @generalelectric account as they requested. I then got this:

Whoa. My name and address?  I figured I would give it a shot and dm'd @generalelectric my information. A few weeks later, I got this in the mail: 

Pretty cool.  I never tied General Electric to fitness but I will definitely do that now. Although there are some friction points, excellent execution. 

[fritzcharles]

Flipboard + bitly

My father is a news junkie. As a kid, my dad would watch the news with me in the morning and come home after work with two newspapers for me to read. It was a trait that I inherited and carried into adulthood. Being a trader, it was easy to maintain my news fix, as I had a dedicated Bloomberg terminal, so I was always up to date on not only events in finance, but politics and sports as well.

When I left finance and my beloved Bloomberg terminal, I struggled to find a consistent and easy source of news. Digg and Reddit never did it for me. Google Reader was a decent solution until I became an avid Twitter user. Twitter now provides the bulk of my news. I follow industry leaders as well as different news twitter feeds, so I get a constant stream of articles and news posts. Not only do I consume on twitter, I share a lot of articles. I used to just post links into a black hole, so I would only know if someone read my article via a retweet or reply.That gave me inaccurate data as I would miss out on the majority of people who checked out my link. Thats why bitly is the perfect solution. Opening a bitly account allowed me to see which articles people enjoyed.

Since I mostly used Tweetdeck to view twitter, it was easy to connect my bitly account and obtain more data around my twitter posts: 

But here is the problem, I don't always consume news on my desktop.  I love to read news on my IPad using FlipBoard. Flipboard is an amazing application that turns your favorite social media accounts and rss feeds into digital magazines. They also make it quite easy to share what you read with your social networks:

Flipboard has its own shortening mechanism. As you can see, my techcrunch link was shortened to flpbd.it, which is great but where are the analytics behind that link? Why can't I connect my bitly account to my Flipboard application?  If there is a way to connect my bitly account to flipboard, it is not clear. Flipboard meet bitly, bitly meet Flipboard, you two would be perfect together. 

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Mobile Bull

I’m often asked why I am so bullish on mobile, this blog post will outline why.

It is no secret that tech industry leaders are struggling on the mobile platform. A huge reason why the facebook IPO did not meet expectations is because of their inability to monetize on mobile. Facebook is well aware of this issue and isn't sitting idle, out of the eight acquisitions they made this year, seven were mobile companies: Acrylic Software,  Instagram,  Spool,  Karma, Lightbox, Tagtile, and Glancee.

Mary Meeker’s 2012 Internet Trends report delves deeper into the mobile monetization issue:

Mobile eCPM and Average Revenue Per User is 5x lower on mobile than on desktop.

Zynga makes makes 80% less per mobile customer as compared to desktop customer, with ARPU at $5 on mobile versus $25 on desktop.

There is also confusion on platform. Just like the early PCs days, where the prominent battle was between Mac and PC, today we are having a battle between Android and iOS. Which platform monetizes better? Opera says that iOS monetizes way better than Android, but TinyCo claims that Android can monetize well if developers focus on it as much as they do iOS. Let's argue that this evidence is enough proof that you should develop on Android, you then have to worry about development. How do you account for the numerous Android devices? For example, Animonica has to test their application on over 400 devices before they ship. With so much conflicting data and advice, mobile is a confusing place. I truly believe that where there is confusion, there is opportunity.

We are still early, the prevailing thought is that mobile is where the Internet was 7 years ago. When the monetization and platform issues are figured out, there will still be tremendous opportunity, particularly globally.

This chart breaks down mobile phone, Internet, and iOS/Android penetration as a percentage of the world’s population:

Data Source: Flurry

Meeker's report also highlights the room for growth: In just 3 years, Mobile Traffic as a % of Total Internet Traffic grew from 1% to 10%. There are 1.1 billion 3G mobile subscribers globally, which represents only 18% of the world's population.

If all of the aforementioned points are not enough to convince you that mobile is an amazing opportunity, let me highlight the amount of mobile innovation in the emerging markets, particularly in Africa. In many ways, mobile innovation in Africa has leapfrogged that in the developed markets:

Mobile Money

M-PESA, the mobile banking platform in Kenya, has a user base of 15mm and over $400mm is transferred each month. Despite many attempts, no mobile money business in the developing world has come even close to achieving a percentage of the success that M-Pesa has in Kenya. Even the FT is calling on European leaders to look at Kenya’s M-Pesa as a model to improve the velocity of the euro.

Mobile Health

Africa has also seen huge growth in mHealth, in Uganda, a doctor or clinic can be verified and HIV diagnosies can be communicated via SMS.

Hattery Labs’s Wash 2.0 white paper outlines how mobile technology can improve sanitation and reduce the prevalence of disease in Africa and South Asia. Hattery Labs worked with the Gates Foundation to explore how mobile gaming has the potential to change hygiene practices and stop the spread of infectious disease. Two games profiled are:

Soap Wars makes hand-washing an entertaining challenge where players use the soap dispenser as a weapon against dangerous germs.

Sanitation Heroes engages players in the process of sanitation maintenance from capturing, transporting, and disposing of feces to reusing it as fertilizer. It features different scenarios in a memory game that prompts the player to match the solution to each different stage of capturing and treating waste.

This level of mobile innovation is done using a combination of J2ME and SMS technology. Imagine when Androids and IPhones become affordable enough for these markets?

WASH 2.0

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Bo Jackson, Finance, and Tech

  Bo Jackson was a legend in two sports: football and baseball. He was able to do this because he focused on the similarities between the two sports. In his case, he focused on sprinting. In football a running back's job revolves around taking the handoff from the quarterback and sprinting for yards. In baseball, Bo Jackson was an outfielder, where his role consisted of sprinting towards flyballs.

Conventional wisdom says that one cannot excel in both sports, but in Bo's case he did:

According to Wikipedia, Bo Knows Football:

"Joining the Raiders midway through the 1987 season, Jackson rushed for 554 yards on 81 carries in just seven games. Over the next three seasons, Bo Jackson would rush for 2,228 more yards and 12 touchdowns: a remarkable achievement, in light of the fact that he was a "second string" player behind Marcus Allen."

According to Wikipedia, Bo Knows Baseball as well:

"On June 5, 1989, Jackson ran down a long line-drive deep to left field on a hit-and-run play against the Seattle Mariners. With speedy Harold Reynolds running from first base on the play, Scott Bradley's hit would have been deep enough to score him against most outfielders. But Jackson, from the warning track, turned flat footed and fired a strike to catcher Bob Boone, who tagged the sliding Reynolds out. Jackson's throw reached Boone on the fly"

One of the reasons why Bo Jackson excelled at both sports is because he focused on the similarities that played to his strengths. As I am in the process of making the transition between two (business) sports: finance and tech, I have found it much easier to focus on the similarities. While from a qualitative perspective, finance and tech are dissimilar; from a quantitative approach they are pretty similar. Whether I'm buying a company or a stock, or I'm trying to market the newest mobile app, I am obsessed with ROI.

From an outsider’s perspective, finance seems to be nothing more than gambling. Unless you have worked in the industry it is hard to understand how traders make certain trades. In finance, the ROI is based on the cost of acquiring an asset or financial instrument (stock or bond). It all boils down to the present value of future cash flows in comparison to the costs of acquiring the asset. The future cash flows can come from interest payments (in the case of a bond) or dividends (in the case of a stock). You then discount the cash flows to come up with a Present Value. This is highly sensitive to the amount of time you plan to hold the stock. If the Present Value of the future cash flows exceed the price of the stock or bond on the open market, then this is a good stock.

In tech, particularly consumer tech (mobile applications or social media), it all boils down to ROI. In this case the asset is the user. In this case you look at the lifetime value of the customer. This is derived from the ARPU (Average Revenue per User) which comes from the amount of ad impressions the user will see and/or the amount of money the user will spend on your mobile application or website. This, just like a stock, is highly sensitive to the amount of time each employee spends on your site/app. If the LTV (life time value) of the customer exceeds the costs of acquiring the customer, then this is a good customer.

The equation for a stock is the following:

Price = Dividend/(required rate - growth rate)

and for a mobile app customer is the following:

CLV (Customer Lifetime Value) = ARPU/(1-retention rate)

I used simplified equations for illustrative purposes, but you can see that they are similar concepts. Once I discovered this similarity, my path from finance to tech became a lot clearer.

For those making the transition between industries, think Bo Jackson:

[fritzcharles]

Sans-Souci Palace, Milot, Haiti

The impressiveness of Sans-Souci was part of Henri Christophe's program to demonstrate to foreigners, particularly Europeans and Americans, the power and capability of the black race. The African pride in the construction of the king's palace was captured by the comment of his advisor, Baron Valentin de Vastey, who said that the palace and its nearby church, "erected by descendants of Africans, show that we have not lost the architectural taste and genius of our ancestors who covered Ethiopia, Egypt, Carthage, and old Spain with their superb monuments."

http://en.wikipedia.org/wiki/Sans-Souci_Palace

[fritzcharles]

View more presentations from Tara Hunt

A truer presentation has never been created. It's important to understand that the stories on TechCrunch represent a small minority of startups. Most startups fail. You will fail. You will fail a few times. Entrepreneurship sucks. What drives entrepreneurs is that small probability that they will find an idea that will take off, no matter how small that probability.

"No more romanticizing about how cool it is to be an entrepreneur. It's a stuggle to save your company's life - and your own skin - everyday of the week." -Spencer Fry

"Running a startup is like being punched in the face repeatedly, but working for a large company is like being waterboarded" - Paul Graham

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Street Freaks, Lehman Brothers, and Haitian Entrepreneurs

I just finished reading “Street Freak” by Jared Dillian, my former colleague at Lehman Brothers. This book is an awesome read and takes you into what it was like to be a trader at Lehman Brothers from 9/11/01 until the firm went bankrupt on 9/15/2008. 

I worked closely with Jared and traded a similar derivative product. In fact, my boss was previously his boss, therefore reading this book was somewhat introspective. As I read about how hard Jared worked to get to Wall Street; how no one wanted to give him a shot because he went to the University of San Francisco, a school that is not Wall Street’s radar, I remembered how hard it was for me to become a trader coming from Baruch College. I also remembered exactly why I loved that job. The fact that at age 22, I was immediately put in charge of billions of dollars worth of trades. The pride I felt when I put on successful trades. The fact that I could lose my job at any minute due to the market moving against me. The fact that my performance was transparent.  I remembered making or losing upwards of a half million dollars of the firm’s money in manner of minutes. That excitement is unmatched. On the flip-side, I also remembered why I hated that job. The malicious clients who run you over and force you to lose money daily. The misaligned incentives within the same firm which forced you to deal with these clients despite these facts. The stresses of having the right trade but putting the trade on at the wrong time. The fact that as an employee you can be forced to work in certain investment products that may or may not be in vogue or even exist in a few years. [See RMBS] The way that your entire self worth is defined by one day: bonus day.

In short, I remembered just how crazy you have to be to be a trader. Funny enough, my next career choice, entrepreneurship, is just as crazy, if not crazier. Go figure, I must be wired wrong. Being a Haitian American former Lehmanite turned entrepreneur, I would be remiss not to share an excerpt from the book that hit home.

In this excerpt, Jared is describing Dick Fuld’s stubbornness as Lehman Brothers receives a generous acquisition offer from a Korean Bank:

“I once had a friend who was in the Coast Guard who used to make frequent trips to Haiti. One time, a Haitian entrepreneur set up shop on the pier selling mahogany figurines, accosting sailors as they went by. ‘You buy something? You buy something today?’ Nobody gave a rat’s ass about mahogany fugurines.

The following day he was still out there. ‘You buy something?’ He had sold precisely zero mahogany figurines.

As the ship was leaving, and the nonrates were casting off the lines, the Haitian figurines retailer was jumping up and down on the pier in a fit of rage. ‘Next time the price will be even higher!’ he shouted after them.

That was Dick Fuld.”

Street Freak is on sale on Amazon.

[fritzcharles]

Subscription Commerce: Fad or Emerging Status Quo?

Subscription commerce has been around forever. I remember my mother getting marketing material for subscription programs ranging from cassette tapes to romance novels. Nowadays with music and books being consumed electronically, services like Spotify are the evolution of music consumption. Same goes for movies, anddespite it’s misstep with Qwikster, Netflix knows that sending DVDs by mail will die, whether its customers what to admit it or not. Outside of entertainment, no matter how advanced technology gets, people will need to consume things physically and are always looking for more convenient ways to do so. This has led to this new influx of new start-ups in the subscription commerce space, attacking a variety of products from vitamins to jewelry to men’s underwear. This info-graphic from KissMetrics and Sean Percival shows just how saturated this space is:

++ Click Image to Enlarge ++ Source: Box It Up – The Rise of Subscription Commerce

Naturally, the venture world has been buzzing with this new wave of subscription based startups.

Venture capital data by CB Insights

One VC that is a huge fan is First Round Capital. They have invested in three startups in the space: Birchbox, Foodzie, and now Kiwi Crate. From the First Round Capital Blog:

“One of the areas that First Round Capital has spent a lot of time looking at is subscription commerce. We've seen that consumers crave curation -- and are willing to pay for a monthly subscription to receive items (sight unseen) that are curated by trusted experts/brands. Two companies in our portfolio, Birchbox and Foodzie, are pioneers of this model...delivering a "wow experience" on a monthly basis to tens of thousands of happy customers.”

Calling Birchbox a pioneer in this space is an understatement. Launched in 2010, Birchbox’s Birchbox’s subscriber base has reached 45,000. At $10 month, Birchbox is making $450,000 a month gross, enough to close a $10.5MM Series A.

With all of these startups in the space it is natural to ask whether there is still room. Right now we have subscription based commerce in the following verticals: Clothes, Fashion, Health, Beauty, Baby, Parenting, Food, Art, Literature, and other verticals that I am sure I am unaware of. So if you are in the process of brainstorming a new idea, is it worth looking at subscription commerce? The answer is yes. Despite the saturation, there is still room to grow. According to Chris Dixon; “92% of commerce is still offline and actually Amazon only has 6% of the online.”

For the most part, services like BirchBox and KiwiCrate focus on curation and helping consumers discover things that they did not know they needed. What about things that consumers know they need but are difficult to get? What consumers that suffer from certain ailments and need certain products for treatment? Most of these subscription commerce models are B2C, how about B2B? The possibilities are endless. I’m sure we hear about more startups in this space. I’d love to hear your ideas and what things you would love to receive in a more efficient and regular manner.