DigiCrypt

Product, Web3, Crypto and Digital Analysis

[hoista]

The Evolution of the DEX (Decentralised Exchange)

Whilst the news has been around the collapse of FTX, a centralised exchange (CEX). In the DeFi world, decentralised exchanges (DEX) have been humming along and are a core component in making DeFi continue to work. 

Orderbook 

The very first DEX’s were order book based and designed to behave similarly to how traders use CEX. The process usually required users to transfer their tokens into a smart contract of the DEX platform, then they could create buy or sell orders on the chain.

The main issues where high fees and latency. Every transaction needed to pay Ethereum gas fees; depositing tokens, creating orders, cancelling orders and withdrawing tokens back to your wallet.

Since every transaction was reliant on the Ethereum network, it meant waiting for the transaction to be mined.. this could mean seconds. If the network was congested it could mean waiting minutes or paying much higher gas fees.

AMM (Automated Market Maker)

Uniswap launched the first version of the AMM towards the backend of 2018. This method removed the use of an order book using a constant product formula (linked for more details)

No matching is required,  the transaction is all on chain and it is easy to understand from a UX view. You input how many tokens you want to sell, what token you wish to receive and received a quote. The actual trade only takes one transaction (providing permission for the smart contract to use the tokens has been granted).

In terms of liquidity, users could become market makers by providing both tokens to the trading pool of relative value of each asset and receive fees for every single trade made. Balancer expanded this scope so that multi token pools could be used.

The biggest drawback to the first iteration of AMM’s is impermanent loss (IL). This is where the value of the tokens you supplied to the liquidity pool as a market maker, is worth less in total than if you had just held the tokens in your wallet after price fluctuations. This can happen if the fees generated as a market maker do not overcome the price changes.

Another drawback is because of the constant product formula, the trading liquidity is spread out across the entire possible price range of the tokens, which is inefficient in terms of price discovery and slippage (the difference between the expected price of a trade vs the actual price at execution)

Concentrated liquidity AMM

To overcome some of the drawbacks of the first iteration of AMM’s. Uniswap introduced concentrated liquidity in March 2021.

This allows users to provide liquidity within a concentrated price range, as opposed to the full range. This improves capital efficiency and enables more market making strategies, for example, in low volatility markets, concentrating liquidity in a small price range could maximise fees. However this can expose users to larger IL.

There have been iterations to this model, Kyberswap incorporates earned fees into the liquidity provision which acts as a form of autocompounding, and in Nov 2022, TraderJoe have launched their liquidity book which increases fees automatically at times of high price volatility, and enables users to concentrate liquidity using different patterns of token distribution across the price range.

What’s Next?

The biggest drawback for market makers is currently volatility which can create large IL. We are seeing the initial development of Gamma (rate of volatility) liquidity pools which potentially can be used to offset and hedge IL. Projects working in this space are still in development, with Gammaswap one of the projects working in this space.

[hoista]

Web3 Wallet adoption issues

The web3 wallet adoption is a big UX challenge. Access to accounts, metaverses, social networks, gaming could rely on a web3 wallet in the future and there are plenty of risks and issues for anyone wanting to create and maintain their account. Account creation can be complicated requiring multiple steps; remembering a wallet address, storing a secret seed phrase or private key to keep it safe so even if you are using different web3 apps, you may need these details at hand to access or ‘import’ these addresses and phrases into different wallets which raises many security and trust concerns and potentially loss of access.

This acts as a gate keeping issue that adds friction due to the high maintenance and security issues since many people would like a way to recover their account or have safeguards around hacked accounts. So what are the potential ways this can be resolved? We should look at what users are familiar with first.

What users are used to in Web2 

There are 2 common account creation patterns - Email and Password - Typical for ecommerce, gaming and platforms  Username and Phone number - Messaging These methods usually contain verification such as email confirmation, or sms confirmation as part of the onboarding journey, but also provide ways for people to recover their accounts. Forgot password emails, or re-verification via SMS being the 2 most common ways to recover an account. This does rely on the platform/service holding and storing access credentials so users do not necessarily own the account or can have access removed.

Account Abstraction (AA) & MPC (Multi-Party Computation)

These 2 wallet methods help to provide potentially increased security and retrieval of accounts.

Put simply AA makes the wallet programmable which means account recovery can be coded in, transaction controls (how funds can be transferred), permission controls (how many people need to sign for a transaction, the levels of permission), which removes the need for private keys.

MPC splits the the private key into multiple parts allowing users to manage their assets without a single party accessing it. If the user loses their part of the private key, it can be recovered through backup and authentication, for example stored in a cloud service or linked to a social login.

You can read more on how MPC works here and on AA here.

Does this allow the service provider to control and gain access?

Yes and No. In terms of accessing the wallet, because the user will always control access because they hold a part of the key (MPC) or is required to sign (AA), it means no third party can access the wallet without the user. In terms of accessing the wallet, there is some reliance on third parties (e.g if a service provider is providing the co-signing capability), so it’s dependent on the implementation, for example, it could be friends or family, a custodial solution, or any potential service that acts as a cosigner.

What does this mean in terms of wallet creation?

The process can be as simple as create account and combining the access to your biometrics on your mobile device, using traditional Web2 methods for account creation, or extra security and controls if someone wants to use a provider that offers more protection (e.g a custodian could provide services behind a KYC account creation flow, link it up with 2FA access controls with requisite recovery controls).

It would eliminate the need to remember private keys, and store seed phrases and adds recovery options and security whilst also reducing the friction of wallet creation to familiar user patterns. The wallet can act as the ‘login credential’ for multiple services, social networks, gaming, finance etc.under the control of the user.

[hoista]

Product Management Skills Matrix

After many years of experience working in product management across different industries, I’ve broken down the core skill areas into different groups that I’ve found useful and transferable. These skills are useful to help product managers focus on areas to grow their careers and specialise in if they have a key area of interest, . The matrix doesn’t specify industry knowledge since every company will want people will have understanding of how their domain works, so is focused on fundamental product management hard skill areas. There will be some skills which are more applicable to some industries more than others and core soft skills such as communication, collaboration, leadership are a general requirement across the board and discussed in articles such as this breakdown It’s important to note that product managers come in different shapes and sizes and that its is extremely rare for them to be experts across the entire matrix. Usually a product manager will develop general capability across all areas and specialise in an area or 2 throughout their career. When building a product management team, it’s good to have a complementary team with people who can support each other in each product management area who can work with the domain specialist (Developer, Marketing etc.) to communicate the product impact.

To see the full size slide click here

 Analysis

Product managers need to be able to analyse the information they procure from both internal and external sources.

UI/UX - Understanding pain points in user journey designs and generating ideas to improve the experience

Competitor Analysis - Evaluating and comparing competitor products to understand target segments, strengths and weaknesses to improve your own product that aligns with the product vision.

Critical Path Analysis - Planning how, when and what order things are built can be crucial in product operational efficiency and to reduce de-duplication of effort and throwaway code. This needs to be aligned with delivery timelines

Optimisation / Split testing - Whilst it is possible to have a good analysis of what needs to be built to increase user retention and conversion rates, it’s good to test out these assumptions with solid optimisation skills

Customer research - Working with research specialists, product managers can use these focus groups and surveys to provide qualitative data alongside the quantitative data to understand why someone may need your solution and if the solution fits their needs.

Usability - Testing users on prototypes helps to make the usage of the product more intuitive, it also helps to understand whether a design addresses the needs for different types of users, whether they are new to the product or an advanced expert user.

Data

Data skills are fundamental to product managers. Whilst it is tied deeply with analysis being able to work directly with data can reduce the time it takes to generate insights and make future product decisions by reducing turn around time if their is over-reliance on data specialists.

Data Extraction - Knowing where and how to import data whether from a 3rd party API can help to collect data quickly and whether to add a new option or feature.

Analytics - Creating dashboards from available datasets reduces the reliance on data analysts who can then focus their time on deeper dives

Business Intelligence - Understanding the business critical metrics, how to measure them, and what to measure are key skills in understanding how the product is working

Insight Generation - Working with data to use the differences between lagging and leading indicators and generating hypothesis for product improvements based on the data procured.

Data modelling - Useful when building data as a product, to understand how to build requirements for a product that require scalability and extensibility.

Technology

This section is much more relevant for Technical Product Managers, but still useful from a general knowledge perspective as it helps to understand planned tech debt and areas that need refactoring or if the product is technical such as APIs.

Solution Architecture - What the overall tech stack looks like, whilst the product manager won’t be designing the architecture, they will be working closely with the experts in this area so need to be able to understand the pros and cons of the architectural design

Technology Evaluation - Being able to compare and contract different vendors, solutions and whether they fit the product requirements  

Infrastructure - This refers to the tooling that is used, from tracking and workflow management tools, source control, code quality tools and application performance. For specific products, there may need to be a more technical hands on approach for product managers.

Product Development Lifecycle - Understanding the different stages of the cycle helps product managers to know what tasks they need to focus on whether that is PRD’s, analysis, feedback for solutioning and operation related activities.

Testing - Product managers will be involved in testing particularly in reviewing any test specs that have been written to evaluate test coverage and help Test experts with their specifications.

Information Architecture - This relates to how information is presented to the user and how it is built, so there is a lot of crossover with UI/UX and can cover areas such as layout, response times, pagination, lazy loading and extensibility.

Business

Business modelling - Understanding the building blocks of the products from value proposition, customers, cost structure, suppliers and revenue streams

User retention - What makes the product sticky, how to use the stickiness to promote growth, or how to re-engage lapsed customers. What are the costs of retaining customers

Monetisation / Pricing - What are users willing to pay for, or are there other ways to generate revenues indirectly and how to promote the benefits of the product to encourage revenue generation and the correct price points

Partnerships - Ecosystem building relies on outreach and working on mutual benefits with potential partners to grow the product

P & L (Profit & Loss) - Product managers should know the drivers and costs in how their product works and the potential impact adjusting the variables would have on the bottom line

Hiring - Building the right team that complements the existing team to ensure best in class product management.

Customer Lifecycle Management - Typically, users come in to the product as new users, as they use the product more, they evolve in their behaviours. This also applies to lifestages, where a product can fit the users stages of life. 

Marketing

Go to Market - Define how the product will reach its target customers and market the product benefits and value proposition, which channels to reach customers.

Growth Strategy - The plan for how the product increase revenues or users through marketing activities, product expansion, geography expansion and product iteration

User Acquisition - Growing the user base through product features that encourage referral or organic user marketing,  through external marketing strategy, or via cross-product promotion.

[hoista]

The 4 stages of Blockchain evolution for mass adoption

Are people really using blockchain yet, is it still hype and what does it take for them to use it?  It’s all over the news, blockchain, cryptocurrency, rocketing prices, massive dips. In forums we hear a lot about partnerships, companies working on using blockchain but are they really? Most people still don’t know what blockchain is, or how it works.. but do they even need to know? Most of the news is mostly discussing price and speculation, or parodies on the cryptocurrency sub-culture.

For real world adoption it will need to go through 4 stages, we have already reached stage 1 and gathering steam in stage 2. The 4 stages are -

1. Working proof of concept

2. Developer adoption

3. Enterprise adoption

4. Seamless user experiences.

1. Working Proof of Concept.

This is bitcoin, followed closely by Ethereum. Bitcoin had an estimated number of users between 3M and 5M from a March 2017 research estimate. This doesn’t include the 13M coinbase users who would be using Bitcoin wallets too. Even if we discount traders from the count and look at it from a retail perspetcive there are a few retailers across different industries who accept bitcoin including Bloomberg, Dish network, Microsoft (xbox content and windows store). Whilst the list is small, it does show that there is a working proof of concept. Bitcoin has shown that this is something that people will use to purchase goods.

Proof of concept is needed to drive the next stage of evolution. When there is enough evidence that blockchain is a technology with a valid usecase it opens the door to build on top and expand out the use cases. This is where Ethereum,  with its smart contracts and Distributed App capability evolved.

2. Developer Adoption.

The explosive growth of projects based on blockchain in the past few years is a clear demonstration of developer adoption and increased interest in building products on top of blockchain as we can see from the listings on coinmarketcap.

January 2014 - 67 listings

January 2015 - 491 listings

January 2016 - 551 listings

January 2017 - 617 listings

January 2018 - 1355 listings

These are the publically traded projects, that have reached a daily trade volume of $100K USD.

The amount of projects indicates the maturing of the ecosystem as more and more people pour resources into building on top of blockchain. It is comparable to developer adoption of the world wide web. Although it resulted in the dotcom bubble, it also created some of the largest comapnies in the world today. Quite possibly, a similar pattern will emerge where a large number of projects will fail and leave a few with mass user adoption.

3. Enterprise Adoption.

It is still early for the enterprise adoption. Whilst there are some consortium's, such as R3, working on proof of concept blockchain implementation; enterprise adoption is a key part to blockchain mass usage. Existing enterprises are the gateway and key access points to customers and end users, and without adoption from some of these companies, mass use is unlikely.

Although a key use case is decentralisation, there is a key difference between distributed and decentralised. Enterprise blockchains can still be valid if a group of companies became the main nodes for some of the services that would benefit from blockchain. Moreover, enterprise adoption would validate its use as a scalable solution. 

Enterprise adoption could come in different forms. Whether that is from acquisitions, becoming a party to an existing project or building their own. Secondarily, is because a B2B marketplace is a use case that enterprises could adopt, for example, purchasing processing power, arbitraging future energy needs, or delivery and enforcement of royalty payments.

4. Seamless user experiences.

Most people when using a service are doing so to address a pain point, whether that is booking a holiday easily, making a payment, buying property, paying a friend. The technology that the service is built on is not front of mind.

For blockchain solutions to reach mass adoption, the user experience needs to be seamless to the point where the user doesn’t even know that they are using blockchain. A good example is cloud hosting, when someone uses a website, they don’t know if it’s hosted in the cloud or not, they only know that the website is serving their need. This is the same principle for blockchain mass adoption. It is an enabler to address pain points for the customer. This could be in reducing fees, or controlling their personal data.

When we reach this stage, mass adoption will have occurred with the user knowing it has happened.

[hoista]

Cryptocurrency and altcoins - categorised by industry.

Link to Google Sheet with the list - http://bit.ly/AltcoinCategory

Many people are aware of the main digital currencies and blockchain solutions such as bitcoin, ethereum, ripple, however on coinmarketcap alone there are over 1400 different coins and tokens. 

Most of the coins are attempting to solve a problem but it’s hard to identify what the problem they are trying to solve is. I went through the top 250 (as of End January 2018) and tried to categorise them into different industries and categories to give an overall picture of what they are trying to solve or disrupt.

Going through all the websites was painful, many of the sites reminded me of pharmaceutical adverts where medical terms were thrown in to obfuscate what they were trying to do. Lot’s of techno buzzwords used, but not many use cases or customer journeys for their practical application.

The purpose of this list is to help people to see where the trends of disruption may occur and also to be able to easily compare projects in related areas. The list below currently, does not contain blockchain projects that do not have an associated cryptocurrency or token.

This is a high level, quick effort attempt at categorisation of the main use of some of the altcoins. There will be errors and i will correct the information over time. Some coins/tokens will have multiple purposes, however for simplicity they have been grouped under a main category.

Feedback is welcome in the comments to correct errors, or add new categories.

A brief description of the categories-

Categorisation types:

Currency

Coins who predominant use is as a digital currency

Platform

Projects where the intention is to allow other developers to build applications on top of some of which will also enable the capability for developers to create their  tokens on the blockchain

Finance

Projects working with on collaboration witht he finance industry, or providing financial services such as loans, remittances etc.

Asset Management

Storage of assets and management of assorted assets.

IOT

Tracking or interoperability with Internet of things technology

Privacy

Digital currencies focused on anonymity and privacy.

Content

This includes music, articles, documentation, reviews, Virtual Reality and Actual Reality focused applications.

Interoperability

Projects working on connecting blockhains or integration with non blockhain solutions

Supply Chain

Tracking of producer goods and supply chain management

Payments

Projects working on payment requests, payment gateways and transaction processing

Storage

Using blockchain as a method for distributed storage

Exhange/Funding

Exchanges, decentralised exchanges and crowdfunding projects.

Data

Data exchange, and the transfer or trade of data

Governance/ID

KYC projects, identity projects, voting and methods of governing communities and projects including quality control.

Advertising

Digital marketing, marketing attribution or advertising revenue generating alternatives

Cloud

Cloud computing services

Health / Insurance

Health and insurance focused projects

Gaming

Revenue generating, virtual currency replacements and gambling projects.

Energy

Power and energy trading

Telecoms

Mobile and wireless technologies including wireless data, data plans and mobile hardware

Loyalty/Rewards

Loyalty programs, interchange of rewards and loyalty

Marketplace

Platforms that provide a buyer and seller exchange for goods and services

AI/Prediction

Prediction and artifical intelligence focused projects

Adult

Adult related projects

Education

Education, teaching and learning related projects

Image credit : btc keychain

[hoista]

Mobile User Acquisition Strategy Basics

There are over 1.5 million apps out there, so how do you compete to get more users for your app? Here are a few basic primers for how mobile app user acquisition works. Mobile App marketing is predominantly driven by the Cost per Install model (CPI). You pay for every user that downloads and installs your app, but it can be expensive as this chart from Chartboost shows.

Incentivized vs. Non Incentivized

Incentivized campaigns are ads that give a reward when a user installs an app or completes an action in the newly downloaded app. For example, free virtual coins/gems, coupons or credit for existing retail or ecommerce stores. Non-Incentivized campaigns, are adverts that try to convince you to install an app based on the quality of the advert and content. The users who install apps from these campaigns are usually referred to as low quality users (Incent) vs. Quality users (Non-Incent). This is because typically, incent users are usually not interested in the app they just installed and are downloading it to earn the incentives, whereas quality users have downloaded the app because there have some interest in it, therefore they are more likely to use, refer people and spend money on the app.

So what is the purpose of getting incent users?

Burst Campaigns

It's an app marketing technique used to boost your app rankings in the store. The reason is that by ranking high in the charts, you would gain more organic downloads of the app from people who are browsing the charts. People typically do not scroll down to the lower ranks; therefore a higher placement increases the visibility of your app.

App ranking formulas are quite secret, but in general, the larger number of downloads you receive in a smaller time frame will boost your app ranking higher. Therefore it is important to spend the marketing money quickly to gain the rank boost, otherwise you are wasting money. Burst campaigns are usually performed with a sustain campaign afterwards to try and maintain a high ranking for as long as possible.

Burst Strategies

Usually it makes sense to go with multiple ad networks when performing a burst campaign. This is because, firstly, an ad network will have access to a different number of apps, which increase the overall reach you may have. Secondly, the CPI increases as you attempt to gain more installs from a single network. For example a pricing framework (not real numbers) :-

More downloads = more cost due to the way the bidding algorithms work. By using multiple ad networks, you can increase the total volume of installs whilst maintaining a low CPI, therefore driving down the overall cost of CPI. For example, using 4 networks to get 5,000 downlaods each, you would pay $20,000 vs. using 1 network and paying $40,000.

Consider the timing of the burst campaign. You want to be near the high ranks of the charts when there is more organic traffic available, e.g. weekends and seasonal holidays. This means you need to start your campaign when you are competing against less organic traffic for installs so that you need a lower total volume of incent installs to gain a higher ranking. This should reduce your overall cost for burst campaigns and provide you with a greater upside in organic installs.

Burst Measurement

There are a couple of ways to measure the effectiveness of your burst campaigns. If we discount the value of the incent installs and split the cost amongst the organic and referral based installs, we can determine an effective CPI for those users. You'd want to measure this against the Lifetime Value (CLV) of your app users to determine the ROI if you have that data at hand.

App ranking - Since the main objective is to rank high, keeping track of the app's rank in your target category can help to evaluate the performance. In particular an estimation of the spend required for the day and hour to achieve or maintain the rank can be useful for planning future burst campaign budgets. One thing I did when tracking was looking at the lag in reporting to changes in spend and the number of installs. Understanding this lag and your position will help you to modify your spending to obtain higher ROIs.

Quality Campaigns

These campaigns are focused on attracting high Lifetime Value (LTV) users. People who download apps from high quality campaigns have no other motive other than that they are attracted by the title, advertisement, app description, screenshots and reviews. Therefore they are more likely to stick around play the game, spend money or bring in more players if the app is designed in a way that makes is socially viable in a non-intrusive way for sharing, or has mechanics in the app that are conducive and acceptable to the user to share. The target for these types of ads is that the average LTV of these users (and the users they bring in) is higher than the CPI. This is why the App Store Optimization (ASO) is important because all the marketing materials are part of the conversion criteria for the user.

Video vs. Image

In the past year (2015-2016) as bandwidth and connectivity has improved, there has been a shift in advertising from images to video. Video is considered to attract higher quality users. It also acts as the first interaction between user and app because the video acts as a tutorial. Potential users do not want to go through manuals, or read lots of text. Traditional tutorials can also create high dropout rates, so video has moved upstream in the education process of getting users started. By understanding what they need to do, how to operate, and what value they get from the app, they can "hook" into the app a lot quicker via video. This is the main reason video has become an increasingly large driving force for user acquisition campaigns.

Burst and Quality Combined

It's quite an effective strategy to kick off an app with a burst campaign to get high in the charts, start attracting organic downloads and switch to quality campaigns to sustain the position and drive revenues and profits this way. Since each country is different, it's important that to ensure that the performance for each country is tracked and monitored.

Tracking

Tracking can be quite straight forward. Every phone has an advertiser ID (which can be deleted by the user). This means that it is possible to track users across an ad network/vendor, and to see which games they are acquired from. There are variety of tools out there such as adjust, mobileapptracking, appsflyer, ad-x, tapstream etc. The objective is a platform where you can install one SDK and use this to attribute installs to individual ad networks and even to the individual apps. This allows for deeper analysis such as which type of apps are providing higher quality users for your app allowing you to adjust bidding criteria for particular target segments are even down to the individual app level.

What's still needs to be done

As far as I'm aware, most mobile app marketing is still based on last click attribution. This means the last ad that the user saw before they downloaded an app, gets all the credit for the install. It's quite possible for someone to see your ad in multiple apps and then download it directly from the app store, rather than a link. This is an area that needs further development to correctly attribute value across the different apps and app ad networks. Likewise, remarketing is still a little immature in the mobile world and targeting users with intent is still a little tricky to detect.

[hoista]

Pt 4: Ad Platforms and Content Distribution: Digital Disruption in TV, Video and Media.

Pt3 and links to other parts here 

Ad Platforms

Traditionally, ad sales are performed via media agencies or via direct sales teams within companies. Digital Ad platforms such as freewheel and adapt.tv based of programmatic sales are pushing into this market. This works by creating a marketplace for advertisers to select where they want to sell and for publishers (content packaging companies) to insert ads automatically and to set prices automatically based on demand and viewing figures.

This method works efficiently for online/digital video advertising and there is movement to move this technology into traditional viewing platforms, as well as diverting linear TV ad spend onto digital ad spend. Both Facebook and Google are actively targeting this revenue stream and YouTube are offering audience guarantees for advanced commitments in attempt to lure a bigger share of TV advertising dollars to their digital platform.

In particular business models such as Google Trueview where advertisers only pay for ads watched (because users can skip ads) results in better economics for the advertiser and better user behavior data to improve the ad experience for Google.

Comcast are one of the companies to have identified this space and acquired Freewheel. AOL acquired adapt.tv looking to expand into this space. TV ad spending will remain high and will continue to grow, but the opportunity in digital ad spend will grow at a faster rate. Programmatic buying is quickly becoming a method to maximize revenue and to potentially shave incremental income from competitors in the content space if the main ad platforms can be owned. This way Comcast can still earn revenue from rivals who utilize Freewheel for their ad servicing needs.

As TV viewing changes, the distinction between linear TV and other forms of content viewing will become less obvious, for example TV everywhere, where a live linear stream is accessible via an alternative screen would house the same ads as on the linear stream which muddies the allocation of revenue in the projections as show above.

Programmatic ad spending in emerging markets are growing fast, for example, Magna Global forecast total spending to reach $500M in Emerging Asian countries alone.

“The report shows that North America is by far the leading programmatic market, accounting for more than half of the world’s total programmatic spend. This is followed by other big players such as Australia, Japan, China and the UK. However, the growth rate of less mature markets shows a rapid acceleration in the industry; while the top 10 programmatic markets are growing by 39 per cent this year, the medium and smaller markets will grow between 57 per cent and 66 per cent in 2014.”

  Magna also predict that programmatic ads will grow from $12 billion in 2013 to more than $32 billion in 2017.

Growth in digital ad spend ($42.8B in the US) is forecast to increase and has already overtaken broadcast TV ad revenues. Therefore, acquisitions in digital ad platforms become a strategic asset.

Ad Platform Strategy

Advertisers are the 3rd relationship in the ecosystem and ownership of this relationship is Key Avenue to revenue. By controlling this ecosystem, it is possible to use this as part of content negotiations (amount of rev share can be modified for select partners), and is also an incremental revenue stream since partners using the ad platform will generate revenue for the platform owner.

Owning the ad platform provides the owner with understanding the true market price of advertisements and gives them ownership of this data. For non-ad platform owners, it is in their interest to use ad-platforms which do not directly compete with them in any other parts of the value chain and it’s also to mitigate monopoly risk by using multiple ad platforms to ensure there is no dominant ad platform who would have greater control over ad inventory and pricing knowledge.

Content Distribution

There’s not much value in owning content if there is no way to get this to the end user. This is where partnering or owning content distributers becomes a key part of the value chain to access consumers. Traditionally this has been either been through the airways, via cable or satellite. OTT is the main development that is disrupting the traditional methods of content distribution. This includes both mobile and wired distribution, particularly in the developing world where cabled infrastructure rollout is a major investment to deliver high-speed data networks. For example, in Indonesia 44% of households go online via mobile only, vs. a total penetration of 4% for high-speed wired data networks.

Data from the OECD shows that wireless internet access is already outgrowing fixed broadband access and this will influence how people will receive their content as wired broadband spreads and as OTT services mature.

Internet traffic continues to grow and as bandwidth increases, it will increasingly become the main medium for content delivery because the delivery mechanism already exists and does not require any extra cabling or installation to provide access to content. Mobile delivery will become a key factor as people increasingly use mobile devices to consume content and increases delivery options for people on the move. Mobilization of content will increase ‘on demand’ viewing as scheduled linear programming and windowing increasingly come under pressure. In fact HBO Asia, recently shortened their window to less than 24 hours . Broadcasters are under increasing pressure to shorten their windows to combat the on demand availability that OTT services (including piracy) provide and the demand from consumers to view content immediately.

Ownership of the customer relationship is a key strategic benefit for any company in the media value chain , and this is why there has been plenty of activity in this field because this provides the data to understand fast changing user behaviours, and buying habits. This has led to consolidation and activity in the content distribution space such as Comcast’s merger with Time Warner Cable, Google Fiber rollout in Kansas. Owning the content distribution pipeline enables flow of traffic to end users which enabled Comcast’s and Verizon’s deal with Netflix to effectively pay for access to users

Expect to see more mobile operators and delivery networks making strategic moves into the content space either by directly creating content services or via partnerships/licensing with existing players. Also expect content platforms to offload their distribution to peer to peer technology, this is one of the main traffic distribution methods for video services in China, and one that Netflix is actively researching to remove the content distributor as a gatekeeper. Traditionally, files were shared by downloading a copy from one central server, P2P works by enabling the downloader to grab parts of the same file from anyone who may have the part they are looking for. This prevents the owner of the distribution network from having a large impact on data speeds because limiting the amount of data to the central server will have less impact since the movie subscriber will be receiving the files from other people who are also consuming the content.

Another technology that is disrupting broadcast delivery is cloud technology. Aereo owns thousands of tiny digital antennas, which subscribers rent out. Each digital antenna is connected to the cloud to which can be delivered to the subscriber to watch on any device they wish, thus disrupting the retransmission fee business model a free to air company would usually pay.

Video platform companies such as Brightcove, Movideo, Kaltura and Ooyala are also lowering the cost of content distribution by providing a white-label service that allows you to create shows and distribute it to audiences without having to invest on developing the services required to broadcast content.

Distribution Strategy

Since owning the distribution pipe provides access to paying users it enables bundling strategies where distribution owners can bundle internet access with pay TV and telephone lines. With the growth of mobile, this could lead to quadruple play (mobile connection) or the replacement of wired telephone lines. By bundling these services, and providing content packaging, distribution owners can bump up their subscriber numbers for content licensing purposes. Reducing the cost of content licensing increases the portfolio of content they can provide to their subscriber base to attract more subscribers.

Controlling access to the user base for OTT services provides an element of control and this can be done by throttling and managing traffic through the network and providing preferential treatment to your own data. Currently, Facebook, Google , Amazon and Twitter have written to the US telecom regulators to oppose a new net neutrality plan to oppose a potential pay to play scenario where ISPs could potentially charge companies to receive ‘preferential’ treatment over how fast their data moves through their network.

Capping data limits can also provide preferential treatment to your own video platform if you own the distribution network, for example subscribers using Comcasts Xfinity platform would be watching video without it counting towards their data cap, but if they were to use a competitor platform, it would add up towards their data cap. This provides a cost advantage to the consumer to subscribe to the content distribution owners platform.

Growing through acquisition (Comcast &Time Warner Cable) is a key strategy for increasing control on access and growing users, therefore to prevent one company from dominating too much, investment in alternative delivery methods, or ways to circumvent current controls are needed for content packaging or OTT service providers such as peer to peer technology or creating/acquiring your own networks.

This is also a defensive strategy to prevent competitors from complementary industries (Hardware/Technology etc.) from gaining a foothold by maintaining control over existing users and preventing them from moving by controlling as much content as possible, or access to content if the content is not licensed.

Due to the changing habits of millennials, content distribution ownership becomes increasingly important over time.

[hoista]

Pt 3: Content Packaging: Digital Disruption in TV, Video and Media.

Part 1 is here

Part 2 discussing Content Creation is here

Content packaging

Packaging of content occurs to present content together to create branded experiences. This can be in the form of channels, genre lists, and recommendation engines. Technological advances have modified how content discovery occurs, in particular social platforms and recommendation engines are larger parts of how the millennial generation choose and watch new content vs discovering content via following a dedicated channels. Recommendation engines provide users with a list of recommendations through collaboration or content filtering (or both). For example, voting for content would increase the likelihood that something is recommended in a collaboration based system, whereas observing what other content people who viewed one particular piece of content creates a recommendation system from user behavior data.

 Channels have also evolved in the digital world; traditionally, you would tune into a channel and watch a variety of shows based on a schedule, but with ‘on demand’ and online platforms such as YouTube, it has created different methodologies to package content.

The increase of subscription-based video on demand, products such as Amazon prime and Netflix have enabled ‘binge’ viewing. An entire season can be released at once which affects traditional business models, in particular, advertising.

Data has driven content discovery - Digital platforms provide a richer base of data allowing companies to understand what shows are being watched, paused, abandoned, and how they correlate to reduce cost of servicing. By using statistical methods, it is possible to build recommendation engines based off user viewing habits vs traditional TV schedules. This provides a personalized experience in content discovery where retention can be measured which further refines these algorithms. It also provides useful data to understand what types of original content to produce, and which shows to acquire. Netflix states that 75% of movie selections are based off recommendations, and because they can estimate the size of an audience for any new show acquisition, it is possible to control costs and reduce marketing spend to existing customers.

As Carlos Gomex-Uribe from Netflix explains - “Testing has shown that the predicted ratings aren’t actually super-useful, while what you’re actually playing is. We’re going from focusing exclusively on ratings and rating predictions to depending on a more complex ecosystem of algorithms.” It was these algorithms that enabled big decisions such as outbidding AMC and HBO for the US Version of House of Cards because the data showed that a lot of their users watched The Social Network directed by David Fincher, the UK original of House of Cards was well watched, and that those users who watched the UK version, also watched Kevin Spacey films and/or movies directed by David Fincher.

Snackable content, which are typically distributed through ‘on demand’ platforms such as YouTube, Vimeo etc., make it easier to utilize data driven recommendation engines that have helped to drive usage of these platforms, and the cost of packaging this content has spawned multi-channel networks, particularly because these free via revenue share, online platforms eliminates the cost of distributing content, lowering the barrier to entry for new content creators and content packaging companies.

Content distribution companies such as Comcast, AT&T are creating competing packaging services to ensure that packaging companies do not gain a strong bargaining position over them by controlling content, with AT&T creating a $500M joint venture to create a Netflix style service. This is occurring all over the world with Alibaba investing $1.22B in digital content packaging service Youku/Tudou and Singtel’s Mio TV launching an OTT service.

Content Packaging is also evolving on mobile platforms where Linear TV channels are increasingly becoming on-demand apps

In particular, messaging companies who see their platform as a potentially disruptive force in content packaging and distribution since they hold vasts numbers of active users.  Examples such as Line’s mobile app for kids’ movies and their partnership with Avex entertainment a music and video production company to promote its content on the Line messaging platform. Taiwan based Chocolabs are creating TV drama streaming apps for the Indonesian market, and DeNA and Mugenup are launching a real time animated broadcasting service app. Although early to launch, these are prime examples of companies looking to explore new ways of content packaging and consumption and going directly to the consumer by going OTT.

Packaging Strategy

Recommendation engines and UI/UX are key areas for strategic differentiation to drive users to new content that a service maybe developing. Acquiring the right content based off the data that digital services provides builds retention of acquired users and plugging this into social media can allow existing customers to bring in their networks. The data provided from users selecting, pausing and abandoning content improves the algorithms that recommend content improving retention.

Since the data relies on quality content, possible moves in this area are to acquire companies that provide this information, by acquiring video platforms, or acquiring companies that already have some of this data (hence why we are seeing acquisition activity in the YouTube MCN sector as they will have both active user bases and user behavior data. Companies which do not already have a video player, or a video player company could acquire TV services companies such as Kaltura’s acquisition of Tvinci.

Large user bases are a key factor to acquiring content so M&A activity would be expected to consolidate subscription numbers to create leverage against existing content owners. Such as AT&T’s $50B USD merger proposal with DirectTV. It is also another reason for YouTube MCN acquisitions as this acquires users (although not paid subscribers), content and data.

Finally, bidding up content prices will push smaller players out of the market and could make them future acquisition targets. This is something that Amazon appears to be doing in launching their video services and is the possible cause of Netflix’s subscription price increase as they look to create content and acquire the content they need based on their data.

One thing that is not working is more of the same. Nielsen reported that even though the number of cable channels received by users increased by 46% between 2008 and 2013, the number of channels viewed only increased 1 percent, suggesting that users either adopted new channels and dropped old ones or never bothered to look at new channels.

[hoista]

Pt 2: Content Creation Digital Disruption in TV, Video and Media.

This is the continuation of the strategic battleground in the media industry the lines of battle are drawn here.

If your ead the earlier post, this post focuses on the strategy in the content creation aspect of the value chain - 

Content is a hits-based business and is a key driver to user acquisition. Owning strong content brands creates demands from consumers and can create complementary revenue models from consumer goods. This provides a stronger negotiating position for the content owner. However, it is also be a huge cost to discover new shows that attracts large audiences. According to Film LA, pilot production costs have been increasing.

The number of pilots produced reached 186 during the 2012/13 cycle, the objective is to discover popular content since this is the biggest leverage that content owners have when negotiating with content packaging and content distribution companies. Likewise, for companies that provide the connected device, whether that be decoders, set top boxes or direct to TV broadcasters, popular content drives sales and subscriptions. This is one of the main factors that have driven new companies into content production such as Amazon, Microsoft, Netflix etc. because existing content creators may not be willing to provide the rights to their content to these new companies due to reasons such as exclusive digital deals, or bundled digital rights in different territories, or simply because these new digital services are competing with their own. For Amazon, Microsoft and Netflix to acquire larger subscription bases, they need to both license existing popular content and produce enough unique popular content to attract consumers.

Viewing behavior has also changed. Short form content on mobile devices occupies the most time used, and with mobile usage increasing, the demand for short form content increases. This has resulted in new content production companies focused on user generated content such as Maker studios  (recently under acquisition by Disney) and Awesomeness TV (acquired by dreamworks). Maker Studios house 50,000 channels on YouTube which makes this method much more scalable and cost efficient in terms of content acquisition.

Services such as YouTube have spawned a new generation of video consumption habits particularly with the millennial generation. Millennials are increasingly moving over to online and mobile video content and on more ‘snackable’ content.

(source: Reuters)

User-generated snackable content has become a main driver of video viewing for the millennial generation and is a direct competitor to non-hero shows. Since production of snackable content can be cost efficient, start-ups are looking to move into this space, from individuals creating YouTube channels to multi-network companies that are packaging them up.

Snackable content isn’t purely focused on TV, but also on digital platforms, in particular the rise of mobile has grown the relative audience for short-form video, and since traditional TV has never focused its strategy on short-form digital content, it left an opportunity for new companies to develop this space.

Since owning content is a key asset in negotiation and user acquisition, we are seeing vertical integration from platforms and distributors moving into this space in an attempt to attract more consumers, alongside new players looking to build a foothold in this field. Yahoo! recently announced 2 original comedies,  along with Sony in support of it Playstation, and Amazon studios have been running for a few years [8]. In particular, Yahoo have subscribed to Nielsens’ Netratings service to measure internet audience as a method to attract more advertisers to their video products.

Content Creation Strategy

For content creators having a vast library of popular content, this enables them to strategically choose whom to license their content to. It is in their interest to maintain as much competition further up the value chain since that will provide them with more options to monetize as competing platforms/services look to license the best portfolio of content to drive users. A prime example is House of Cards, they licensed the content to Netflix for exclusive rights to stream the content online first, afterwhich the content owners were able to license further rights to other buyers such as Comcast, ensuring that they can try to maximize value from their content whilst maintaining competition for the content.

For companies that exist in the other parts of the value chain, there are a few reasons to expand into content creation. If your platform is servicing a growing and evolving segment of the market such as mobile, snackable content or adapting to changing user viewer habits; new content may need to be created to service the platform. If exclusive or original content is seen as a driving factor for user acquisition, it also makes sense to create content to ensure there is a unique offering to potential users.

[hoista]

Why it makes sense to go iOS first when developing apps

Android is a clear market winner (as of August 2014) when it comes to units sold... so why do many developers make their apps iPhone first? 

Wow, Android has over 80%.. Let's dig into the data a bit more. What happens if we blow up the data and look at it from a country by country basis. -

Certain countries are more Android dominant than others, but places like China skews the data, since there are 450M unique smartphone users there, and with a 80% Android share. It's the same picture for many developing countries where budget Android smartphones are selling a lot. How are these smartphones used? Let's look at traffic share -

For less than 20% in shipments, iOS still commands 44.19% of traffic at a global level. If we were to isolate this to developed countries, and countries with a much more mature mobile data infrastructure, the numbers are more telling. iOS still rules the roost when it comes to usage. If your app is targeting Android dominated economies  (e.g. developing countries, S.Korea etc.) then you would go Android first, but if you're targeting more mature markets with well developed mobile data networks, it makes more sense to go iOS first and follow up with Android later. It's better to test with a likely high use market first, than to waste effort and split resources working on 2 platforms when the product is not proven, hence reducing potentially wasted effort.

Get it right first, before scaling, and the optimal way to test is by reaching out to users who are more likely to test it out.

[hoista]

Digital Disruption in TV, Video and Media and the strategic battleground.

This will be the first in a series of articles that looks at how mobile and the internet is disrupting traditional TV services and what TV companies are doing to battle back against this onslaught. Companies such as Netflix, YouTube are both complementing traditional TV and slowly migrating long-term TV viewers away from the likes of Comcast etc. This has cause big movements such as Netflix paying Comcast, Verizon et al, as well as the Time Warner Cable acquisition by Comcast.

The current landscape:

With the growth of digital media, consumers are increasingly influential in controlling their content consumption habits so that they can view the content they want, wherever they are, whenever it is convenient for them, and on their own choice of device whether that is a tablet, smartphone, TV or some other device. This puts enormous pressure on the existing Media value chain. Incumbents and new digital companies are undergoing change to both keep their position in the media chain, or in an attempt to wrestle control across the value chain to exert ownership over the changing landscape that is user viewing habits by providing new business models, service and availability options.

The disruption occurs across content creation, packaging, ad platforms, content distribution, connected devices and user experience displays, which are the main components of the media value chain.

Each part of the chain is currently undergoing disruption from within via incumbents who are radically modifying their business models, digital strategies and technologies to control a singular component in the value chain; or by expanding vertically across the whole value chain to control customer experience; or to control the gateways that access the customer. In many ways the landscape is replicating what happened in the game console industry and the mobile phone industry where traction was picked up via subsidized sales of hardware with licensed content on exclusive terms. Gatekeepers are the distributors of content who have existing business models such as re-transmission and subscriber fees. Drivers of audience to a platform or a service is still driven by popular content, however consumers are increasingly frustrated by access hurdles such as windowing and regional rights restrictions.

Existing digital subscription services across multiple platforms such as music (Spotify/Pandora) as well as mobile app markets (iTunes / Google Play) is leading towards an expectation from consumers that video content should comply to similar models. This is shifting the way people are viewing video where availability and service is becoming a driving factor and causing the shifts in the current media and entertainment business, as the average time spent on digital content is set to surpass TV. 

This isn't to say that TV is in decline, rather that digital will outgrow TV, in fact in many cases, TV and digital are complementary as multi-screen use is growing.

Each major player is attempting to exert control in their area of the value chain, or moving across to supply more power to the areas in which they are seeking growth to leverage as much influence as possible with consumers. This has come in the form of creating strong content brands, strong services brands, or directly owning access to the users via subscription bases.

New technology has led to disruption in viewer behavior providing a new set of opportunities that companies are either positioning themselves to move into, or attempting to defend themselves by building positions that give them leverage in their part of the value chain. This has led to vertical integration as new entrants to the market attempt to provide a compelling service that meets consumer needs whilst moving against traditional business models. Conversely, incumbents are adapting to these new behaviors and moving vertically to ensure they maintain influence in their core competences.

We'll look more closely at each part of the value chain in the next article.

[hoista]

The rise of Trojan Horse Platforms, KakaoTalk, Wechat, Line

UPDATE 20th Feb 2014: Since this article was written, Rakuten acquired Viber and Facebook acquired Whatsapp

They start off as apps, apps that we use daily. They add service after service as they slowly evolve into an ecosystem of their own and before we know it. It becomes one of the de-facto places we visit on a daily basis to get all the things we need. 

Conquering Asia

You may have heard of KakaoTalk, Line and Wechat. Kakao dominates Korea, Wechat is the de-facto chat app in China and Line is massively popular in Japan, and most of the rest of Asia. You may be mistaken in thinking they are messaging apps, similar to whatsapp and Viber, but you'll be mistaken. They have evolved past that point and are now platforms in themselves.

I'll look at each app to see what they are providing and to see where they are potentially heading.

KakaoTalk

Kakao is dominating the South Korean landscape, 130 Million users, topping the revenues and download charts. Starting off as a messaging service, it is also a game platform and will begin rolling out a content platform. With an expected $200M in revenues for 2013. With its game publishing platform, it is dominating the games section and becoming one of the main places to go to find new games (in Korea) which gives them a huge element of control over their userbase.

Line

Line has around 280 Million users worldwide, with hugely impressive revenue figures, 31.3 Billion Yen  2013 revenue numbers up to Q3. That's around $300M USD for 3 quarters last year.

Besides all the games they release, Line services include sticker shops, birthday cards, even extending out to create their own episodes of content - Line Town. 

WeChat

Wechat have approx 270M monthly active users, with their main growth in Q3 last year increasing when they started to focus on revenues by adding games and payments services into their messaging app. Raking in $82M USD in revenues on singles day alone, Wechat have been adding multiple services such as a taxi service which reported 100,000 rides in 9 days, investment services accruing $130M in its first day. You can blog on wechat and use it store articles to read.

Becoming a Platform

The evolution of these messaging apps into full fledged discovery, content, games platforms makes these apps into a platform ontop of a platform. Effectively a Trojan Horse Platform. They work because

Sharing and network effects are built into the app from the start, it's designed so that recommendation are easy to send, particularly because people generally do not ignore messages as it is to blank out news feeds from social media. It's a lot more personal.

Messaging apps is something that people will look at multiple times a day, adding additional services gives immediate access and more reasons to visit the app making it a de-facto location as these services complement your daily usage.

As an app, you can be cross platform, Line exist on iOS, Android, Blackberry, Mac OS and Windows, it doesn't tie you down to a specific OS or to a 'higher tier' platform. 

Control over the userbase, since many people tie their network (contacts) it becomes a switching cost to move to a competitor messaging app... but not hardware device or OS. This gives the trojan horse platform direct access to the user. Especially given that (wechat for example) own some of the payment and financial aspects of the user.

Ecosystem development, wechat are working hard to integrate services from many providers such as LinkedIn. Kakao publish games from other developers. They are creating their own ecosystems on top of their platforms and are becoming a gatekeeper to their userbase whilst adding these complementary services.

For now whatsapp and Viber are still messaging apps, but they will have seen the developments in asia and are likely looking at a way to assume this type of control as a Trojan horse platform in the markets where they are dominant,.

What does this mean to everyone else?

For everyone making apps or services, it means there is now another channel to tap into users and means that there is another layer of controllers in the mobile ecosystem as a new set of gatekeepers emerge to plant themselves into the value chain and control access to users.

It's all about owning the wallet of the end user.

[hoista]

Kissmetrics vs Mixpanel : Start-Up Metrics

You've tried Google Analytics (GA) and now you're looking for a tool which provides you with other ways to provide more actionable insights. Mixpanel and Kissmetrics are the tools you'll likely come across. Both have a free version based on the number of events you'll likely use, so they are ideal to test out, but which one is best suited for you?

2 of the main reasons that you'd want to try Mixpanel or Kissmetrics are because you want to perform Cohort Analysis and/or you want to track individual behaviours. There are a couple of articles out there that already cover some of the differences. This one from March 2011, and this more recent one from November 2012. In brief the first article rates the tools based on -

Documentation

Live Data

Interface

People Tracking

API

Personally, although useful to some extent, they don't really explain to me how to get the types of answers that I'm asking. For example, If I want to know how long on average it takes for people to hit a certain event, and I want to compile a cohort analysis to see if the actions I'm making are improving this goal, which tool is better?

On that basis, I'll use Dave McClure's Startup Metrics for Pirates AARRR and see how Mixpanel and Kissmetrics can be used to extract the metrics you want. These are all personal opinions and you may have a different preference based off how you apply your metrics.

vs

Acquisition

Both Mixpanel and Kissmetrics allow you to plug in campaign data into your pages.

For Kissmetrics, when looking at funnel reports, you can select the campaign properties as check the effectiveness of each campaign source to see which channel/websites are the most effective at  bringing in traffic that is most efficient toward achieving your goals. This means that if you were to put marketing dollars into a particular channel/website to acquire users, you should know where to place your bets.

For Mixpanel its pretty much the same, set up a person property called campaign or use utm configurations and when you pull up your funnel reports you get the same display as in Kissmetrics.

Activation

Both tools are pretty much equal here, using funnels, you select which events you expect people to perform to go down your activation funnel and you get your conversion and see at which events do people drop out.The main differences between the two is what other data is available in from the funnel report.

In Kissmetrics, you can hover over an event and "view people in this step". This provides you with a list of people who reached this point in the funnel, allowing you to individually click in and see what events and properties you've recorded for them

For Mixpanel, you are provided with trend charts, you can see what percentage of people passed this part of the funnel in a day to day map (or week or month if you so choose).

Which one is more useful? For me, Kissmetrics provides an easier way to see who has performed this part of the funnel which lets you dig down into the behaviors of individual users.

Retention

Retention graphs by both tools are similar but have enough differences for you to be able to pick a preference. 

Kissmetrics power is the ability to create retention tables beyond grouping by date. You can select advanced options, and group people by their properties or events they have performed, this can provide some powerful insights, such as figuring out which campaigns provide higher retention. Kissmetrics also let you see the absolute figure when you hover over the retention chart, this can make processing the data easier to digest.

Mixpanel's power is the ability to segment. After selecting an event, you can choose which properties that an individual can possess and the retention chart is filtered this way. In some ways similar to Kissmetric's advanced options, but a bit fiddlier because you would have to create a report for each segment to be able to compare.

For me, in terms of the retention tables, Kissmetrics is better than Mixpanel, But Mixpanel also provides a retention tool via their engagement mailing tools, this is useful creating retention actions. Intercom.io is a better solution for this at the time of writing.

Referral

Configuration will allow you to track referral. One way would be to set up a persons property to have a referral variable and if they are referred by another user, attach their id to this property.

Kissmetrics provide a dashboard where you can compile different metrics to see how things are going. You can use this to determine how 'viral' your app is. A way to do this is to create a referral event, so when someone signs up to your app through a referral, the event is created and attached to the referring user. You can then track how many times a single user has successfully referred someone and use the "Average Number of Times Event Happened Per Person" metric

You can use the same technique for mixpanel. To display the data, use formulas where you can select the number of times the event has been and divide it by the number of people who visited the site and see how viral your app is. 

Both metrics are slightly different, but as long as you understand what you are measuring and create actions to drive these numbers there shouldn't be a problem.

Revenue

Both tools have dedicated revenue functions. 

Mixpanel has this embedded in their people section, you can segment revenue by sources, and other properties and figure out where the revenue come from.

Kissmetrics uses events which you can map to their standardized revenue events, after which you can then see your revenue reports y referrer, lifetime values and other customer data such as churn rates.

Other

One useful function that Mixpanel provides that Kissmetrics doesn't is the ability to increment properties. This means you can keep track of variable for users such as credits, if someone spends or buys credits you can increment/decrement that variable. This can be really useful, but unfortunately, where it would provide most value is if you could use these properties easily in a cohort table. Thus this feature is most useful when combined with Kissmetrics cohort table which can be grouped by property. Unfortunately, It's not possible to combine the tools .

It's important to remember that both tools are still iterating and developing so this is merely a current state of the play.

Photo Credit: Double Faced Matter Horn by Gabriel Zech

[hoista]

The Evolution of the First Waterproof Phones

Sony recently announced the Xperia Z, a phone that can be used in the shower and recoverable even when dropped in the toilet. But is it the first waterproof phone? No... is it even the first waterproof smartphone? No.. the first waterproff smartphone was made in 2006 but previous waterproof phones needed extra bulk to keep the water off, did this make them undesirable?

So above we have the Sony Xperia Z, but waterproof phonesa are not new to Sony, they've tried waterproof phones before, in fact most of these phones were made for the Japanese market.

2005 saw the first major wave with the Casio Canu 502S / GZ'One with a 1.3MP camera and 256MB RAM.

2006 saw the arrival of the Sony Ericsson SO902iWP+. It sported a QVGA display and a memory stick duo slot.

Nokia first dabbled with water resistant phones in 2006 with the Nokia 5500 Sport. This ran on Symbian, so is the first ever waterproof smartphone.

Japan continued to lead the way and Fujitsu created a whole series of phones from 2007 onwards, the Fujitsu F703i, F704i and F705i 

By 2008, US company,.Sonim released the XP3 Enduro, not content with water resistance, they tried to make this phone as shock proof as possible.

But by now, underwater photography and the megapixel race was heating up. Back in the japanese market, Casio released the W61CA, a 5.1MP water proof phone camera

Samsung's first dabble into waterproof phones came with their Marine B2100 in 2009 with 7MB of memory, it's still in the dumb phone territory.

and so waterproof phones continue such as the Fujitsu F01B, a 3.4 inchtouchscreen devices with a 12.2MP camera.

The first water resistant Android phone is released by Motorola, the Motorola Defy, a 3.7inch Touchscreen and 5MP Camera

We're still waiting for the nanotech super-hyrdophobic layers that companies such as Nokia are working on. Then waterproof p[hones will really be at the stage where they are fully waterproof and don;t require extra bulk.

[hoista]

How Football Manager Can Get You a Real Career

That's right, a computer game about football management can help you to develop skills that are useful for your career.. and I don't mean getting a job as a Football Manager. For those who don't know what it is, Football Manager (FM) is a simulation game, developed by Sports Interactive (SI), that puts you into the hot-seat of managing a football club.

So how can you weave 'Playing FM' into an interview? What is the skill that FM can help you to develop? It's Analytics, that's why it fits in this blog. If we look at what skills are currently in demand in the workplace it's Big data. Companies, everywhere, are looking for people who can analyze the data that they generate.

Marketing companies are increasingly analytical about their campaigns

Product companies need deep analytics to improve and iterate their products, 

Retailers have all sorts of data that can help them to optimize things from the positioning of their products on their shelves through to the data on all those loyalty reward cards.

Web Design is much more metrics driven to increase results.

So how does Football Manager help you develop valuable career skills?

I started playing FM under its previous carnation (Championship Manager), One of the common complaints were that after playing the game over many seasons, some of the newly generated players looked odd and the game appeared unbalanced, e.g (defenders were no longer brave). So I built a tool in my spare time that analyzed player attributes to see if there were differences in how players evolved over time to check for big differences. This taught me to code a little and how to analyze data.

It's a simple tool that spat out a text file that showed you the differences between the data at 2 different points in time (e.g. do all defenders lose the ability to be aggressive in 20 years time?). SI used it at the time, however, I eventually became too busy to be able to do this, and I'm pretty sure SI developed their own tools to do this much much better than the buggy code I created.

The later versions of FM makes it possible for anyone to develop analytical skills - I've purposely selected some screenshots below that show you what Football Manager is all about.

This screen shot shows you how well a player has improved.

This one shows you their training regime.

One aspect of improving any product is testing. This means changing variables and checking the results. For example, in a web page you may want to improve the % of people who sign up. You usually do this by split testing, or A/B testing. Then you analyze the data set afterwards. 

Look at those 2 screens... it's the same principal. You tweak the training program, you assign different players to each program and then you compare the results to see which is more effective. There are a lot of people who are doing this already and unaware about the skills they are developing and how transferable they are to the real world. Take a look at the Tactics and Training Forum and you'll find a lot of deep analytical talk where people discuss how to tweak training programs to improve players the most. It's a hotbed of statistical analysis, A/B testing, spllit testing, metrics, measurement... no different to a professional analytics group on LinkedIn.

If you're looking to develop your skills using FM, I recommend you use FM Genie Scout... some people may call it cheating... but it's the ability to use it for data analysis that makes it so useful. Look at this screenshot - 

It could be Google Analytics. The history function let's record multiple data points. Here's how you would perform a split test playing the game and using this tool -

Create 2 training programs, 

Split your players up into those 2 program 

Play the game over several seasons,

Periodically saving a history point. 

Analyze the data to see which program was more effective.

Tune your programs and repeat.

It makes it easier to discover what changes are more effective for which player attribute, not much difference to optimizing a website or product... the fundamental skills are the same. For those who are more advanced, you can spit the data out into a spreadsheet. Once you've done this over several data points, you can plot any graph or create pivot tables to analyze player progression.

And that is how Football Manager can help you to develop real skills that are needed today.

[hoista]

Why it doesn't make sense for Google to be a carrier

In 2008, Google bid in spectrum auctions in the US prompting speculation that they wanted to become a carrier, actually this was focused to unlock open-access rules which allows any device or application to connect to the spectrum used by the carrier, effectively enabling OTT applications (Google voice, Skype, Whatsapp etc. However, rumours and speculation have continued to be persistent about Google becoming a carrier. Here are some reasons why it doesn't make sense for Google to be a carrier

1) Current Carriers Hate Competition

The idea that Google might enter the carrier ring would make current carriers think twice about subsidizing Android devices, why subsidize the competition's devices? You don't see vodafone branded devices on other carriers. Carriers won't take kindly to Google encroaching on their turf. Carriers still have some power in making or breaking devices. One of the reasons for the fall of Nokia could arguably be because carriers refused to take their devices and promote them because they remain one of the main sales distribution channels for phones.

2) International view

If Google were to successfully gain spectrum in the US, the rest of the world would instantly stand up and notice. Will Google try something similar in the future in different countries? This would lead to an Android 'backlash' as more and more carriers restrict sales channels

3) Hardware sales is not Google core

Google would have to sell their Android devices through their own stores. Google just don;t have the DNA to do this. It would take time before they can do this effectively. They could try online sales, but the failure of the original Nexus when it was boycotted by most of the carriers demonstrated how physical sales channels still dominate when it comes to phones. Android has gained traction now, so there may be more success via online only sales, but most people still like to physically compare phones unless they have already have made their purchasing decision. This would still affect effectiveness of sales.

4) Customer Support

Ever tried getting customer support from Google? There's no easy direct way to contact them. Support for the Nexus was terrible, providing only email and forums. Supporting customers with their carrier issues is on another scale, and something that Google has never experienced.

5) Infrastructure

Owning spectrum is one thing, building out the infrastructure to support an entire country is another, and it would take a lot of money and time to build out a decent network. Sure, they could be a MVNO to begin with, but i wouldn't bet on many other carriers wanting to help Google unless they were required to by the FCC. Secondarily, Google is a software company and not experience in the rollout and upgrades of network infrastructure to the scale that AT&T, Verizon and T-Mobile have.

6) What are the advantages?

There are very few benefits for Google. The main one is the customer relationship. Rather than sharing that with the carrier, it would give google direct ownership of the customer, which means they can better lock people into their ecosystem creating hurdles for people to switch out, effectively creating a switching cost that many people won't bother with. However, the costs and lack of expertise is likely to cost them more than the benefit gained from running this type of strategy.

Given the above, it just doesn't make sense for Google to traverse down the carrier route. They would be better off utilising their market power with Android as a negotiating tool with carriers.

(Photo credit wallshq.com)

[hoista]

4 Ways That AT&T Screwed All Carriers with the iPhone

The iPhone was a 'great success' for AT&T initially, but they made a couple of crucial mistakes that changed how all carriers are perceived and all the carriers negotiating power. Pre-iPhone, carriers were in control, they could accept and reject any phone, push out requirements to manufacturers and control the whole process.

Want VoIP in your phone? AT&T the carrier could ask for custom software.

Want WiFi enabled on your phone, the carrier can ask for it to be disabled.

An App Store? No Thanks, the carriers were trying to build their own app stores following the successful Docomo model in Japan. 

Update your phone software... sorry, that's controlled by the carrier too.

In fact, if the manufacturer wanted a phone to be subsidised by a carrier they usually had to customise the phone software in some way, otherwise a Vanilla version meant the customer would have to pay full price. If a phone was 'in demand' negotiations over customisations may be easier. Effectively, the carrier wanted to own the customer, afterall, they held the customers billing details, and importantly their phone number.

So what did AT&T do wrong?

Mistake 1 is the well documented unlimited data at $30. This effectively anchored a whole industry to a price point that was not sustainable. Before this offer came about, it was not possible to get an unlimited data plan. It caused an 'arms' race between carriers which meant increased capital expenditure costs in building up enough bandwidth to cater for unlimited data usage and half opened the door to over the top services.

Mistake 2 is subsidising the iPhone too much. The subsidy for the iPhone ate into their profits and their profits increased after sales of iPhone decreased from 4.3M to 3.7M units from Q1 to Q2 2012. The subsidy and corresponding price that AT&T agreed with Apple, and the success of the iPhone anchored the expected price customers would pay for the iPhone. This affected all carriers.

Mistake 3 was giving control of software updates to Apple. Previously, all software updates were controlled by the carrier. AT&T gave this control over to Apple. The original iPhone did not have an App Store, "Web Apps would have done". But Apple could upgrade all iPhones and push an App Store that they controlled. All carriers who were trying to build their own app ecosystems were pushed out of the way in one fell swoop. AT&T gave away app store control and made that decision for all carriers. Over the top services (such as whatsapp, Line, Wechat) took advantage of this because no carrier owned App Store would ever approve these type of apps. 

Mistake 4 was ceding activations to Apple and ownership of the user. Previous to this, who "owned" the user? The carriers effectively controlled the user because they had their phone number, and they had the billing relationship. Activations and the App Store ecosystem ensured Apple could move in and take ownership of the customer away from carriers.

One of AT&T's requirements for the iPhone was am attempt to control media sharing by locking down Bluetooth. Ring tones were big profit earners and they didn't want people to be able to easily share music files and make them into ringtones. With control of iTunes, this was not important for Apple.

These main strategic errors by AT&T affected all carriers and led to, price anchoring for unlimited data, over the top services, profit reducing subsidies and the battle of ecosystems that is all about who owns the relationship with the end user.