madness is key

By about forty-five thousand years ago, modern humans had already reached Australia, a journey that, even mid-ice age, meant crossing open water. Archaic humans like Homo Erectus "spread like many other mammals in the Old World", Pääbo told me. "They never came to Madagascar, never to Australia. Neither did Neanderthals. It's only fully modern humans who start this thing of venturing out on the ocean where you don't see land. Part of that is technology, of course; you have to have ships to do it. But there is also, I like to think or say, some madness there. You know? How many people must have sailed out and vanished on the Pacific before you found Easter Island? I mean, it's ridiculous. And why do you do that? Is it for the glory? For immortality? For curiosity? And now we go to Mars. We never stop."

"We are crazy in some way. What drives it? That would be really cool to know."

(From a New Yorker story about research to find the genetic mutation that makes us different from our ancestors)

convince or confuse pricing

If your pricing model cannot convince prospective customers, do you go ahead and confuse them? It is odd that payment products, of all products, do this.

The back-story to this post is that my television refused to power on and I called in a local mechanic to take a look. While paying him in cash, I started chatting with him about his business, payments in particular. It turns out that most of his revenue is from house visits, and he only accepts cash. No customer has problem paying in cash. And he doesn't use any of the new technology to swipe credit cards on a phone to accept payments because they are very expensive.

So I went and checked out some payment products for credit cards, and their pricing:

1. Intuit's Payment Terminal

2. Intuit's Go Payment for Mobiles

3. Square for iPhone* (they recently eliminated all fees)

Now, I'm sure these companies have some really smart people to include all their intrinsic and extrinsic costs and model fraud risk into their pricing. But this is overly complex for a small business owner trying to figure out if he/she should pay for the product. At the very least you need to give your customers a pricing calculator and some example scenarios to get them started.

The best thing is to eliminate multiple layers in this pricing structure.

If your customer is another business, you want their costs to be variable. Charge them a flat rate (a percentage is best, but a fixed amount might suffice) per transaction, for all transactions. Get your smart pricing team to figure out the optimum rate to charge based on your costs and to maximize your revenue, but DO NOT offload the calculation to the customers.

If your customer is an end consumer, a fee per transaction leads to a decision point at every such transaction: "Do I want to conduct this transaction using Intuit Go Payment and thus pay an additional fee again?" kind of questions. An up-front charge might be too large an investment. In this case, a periodic fee would work best. The consumer's total cost is spread across time, and yet, not too frequent or dependent on any other event (the transaction, in this case). Every time a customer has to take out his wallet and pay, is a hurdle that the Product Marketer needs to cross.

It may not be easy to come up with a single fee structure for all customers, so product marketers often sell "bundles" where different amounts of the same thing are priced differently. This is a slippery slope and it is best to avoid differential pricing unless there is a difference in the value-add provided by different bundles. A completely variable price model (e.g. fee per transaction) would be more preferable in that case.

A last thing to keep in mind while pricing - what other comparative models exist? Customers are sure to compare your prices with someone else's, and that should be easy to do. If your pricing model is radically different, give your customers tools to easily work out a comparison.

* Since my chat with the TV repair man and drafting up this post, Square has removed all fees for transactions. This is the most customer friendly, but may not always be viable. In this case, they are definitely changing the game, and I hope their model wins.

I'd love to hear your thoughts. If you have anything to say, please leave a comment.

the true story of Christmas

A very interesting documentary on how the tradition of Christmas evolved over thousands of years into what it is now.

Even more interesting is that financial analysts say the retail industry has picked up this shopping season primarily because people are tired of being in an economic recession and have a deep need to celebrate something. Perhaps it is our annual coming full circle, more so this year, to the real origins of this winter-time festival.

Watch it on YouTube:

facebook and twitter analytics

I wonder why neither Facebook nor Twitter is sharing analytics data for a Facebook Page or Twitter Page - they have become destinations in themselves and brands would surely be willing to pay to see user behavior on these pages.

One reason to not share this data could be that brands would start asking for more freedom with page layout and content. A way around this would be define and provide new "social media metrics" centered around the structure of the Facebook or Twitter page rather than providing either basic clickstream data or standard web analytics metrics.

Some data I would like to see:

1. Max/Average reach of my tweets - number of hops in my network the tweet percolates to.


2. Content (tweets or facebook posts) that leads to people following me or liking my page.


3. Content that gets re-tweeted, replied to, liked or re-shared the most.


4. What %-age and section of my network interacts with me the most. Which of my immediate network connects me to the rest of them? How does this change over time?


5. Interest churn period: average length of time people follow me for.


6. Interest churn: ratio of number of new followers to number of lost followers in a given period.


7. Conversion data for the new funnel where you are trying to convert: people outside your network to followers/fans to clicking on your links to "liking" your content to replying/commenting to re-tweeting/re-sharing.


8. Distribution of number of people followed by those who follow you - the ideal would be a bell curve - users following too few people or too many people are either not going to be listening at all or listening to too much noise.

Next up might be allowing A/B testing on FB/TW pages and updates. But that seems a little distant at the moment. :)

where you are

Some food for thought about ad targeting:

I'm vising MissionLocal.org, which is a local website about events/food/news in the Mission district in San Francisco, from Seattle. Groupon shows me a Seattle ad.

In this case, should the ad have been targeted based on where I'm coming from, or based on the page context, given the strong location signal present in the context?

Targeting systems do wrong in not considering geo-location as a signal derived from different sources of information present across behavior and context (and device GPS), but only using it as a simple IP-based filter.

for retargeting

It takes The New York Times one article to set the world abuzz (and a-twitter!) with how creepy re-targeting is and how it freaks people out and how advertising is evil.

The fire was started by a story on Ad Age about how one person saw the same pair of pants being advertised on every website they visited, leading to claims of being "stalked by advertising".

Interestingly enough, in both stories the only examples being mentioned are ads by Zappos. Which makes me to suspect someone helping Zappos with their advertising didn't get their Frequency Capping right. And that leads me right to my main point: what re-targeting has got going for itself:

1. Frequency Capping

Frequency Capping is a maximum limit to how many times a user may be shown a particular ad. Even when ads are not re-targeted, it is a well-known (and measured) fact that user interest - and hence the effectiveness of an ad - drops considerably if a user is shown the same ad over and over again. Typically, the same ad is not shown to a user more than 3 to 5 times in a 24-hour period. There is more ROI in showing another relevant ad to the user.

With re-targeting, frequency capping is in effect across websites. So users will see the same ad even fewer number of times - because the same frequency cap is in effect across multiple sites that the user is browsing to, rather than allowing a max of 3 ad views on every individual site. Similar to Frequency Capping is another concept called Recency where users are not shown the same ad in quick succession. For the same reasons.

So the Zappos ad that has everyone cringing should never have been so frequent or so pervasive had their advertising partners got their frequency caps right (but that's my guess).

2. Behavioral Targeting

Re-targeting is a kind of behavioral targeting, different from using the context of the webpage you are browsing to determine what you might be interested in. It enables advertisers to push content to me that is relevant to me. Wouldn't you rather see ads for the kind of clothing you were browsing yesterday than for weight loss pills or home loans that you don't want? Also, contrary to popular misconception, instead of generating ads for the same product you have been looking at, re-targeting typically works at a product-category level where you would see ads for a variety of athletic shoes after having viewed a pair of ASICS Gel Kayano. Which certainly adds to the informational quality of advertising.

Think of re-targeting as being smarter about remembering some of the contextual information that was thus far being used only once to generate ads for you.

3. Nascent technology

Re-targeting and other kinds of behavioral targeting is pretty nascent and advertisers and advertising networks are experimenting to find out what works and what doesn't. Given the what is at stake - billions of advertising dollars as well as user experience - the only option is to find a win-win for both advertisers and users. Ads will only get more useful.

Regulation isn't required here; freedom to innovate is.

gmail telephony

It is nice to be able to call a telephone from your browser, without any special application or having to register with a SIP service. This is what GMail/Google Chat now allows you to do. "Nice" adequately describes this feature.

The transformation from "nice" to "wow" would happen if I could call someone on their phones using their email address without knowing or caring about their phone numbers, if I could turn off receiving calls when I wasn't online, if I could conference in other people while on a call with someone by just dragging and dropping contacts in my browser....

language and thought

I've always wondered what language I think in, having been bilingual from a very early age, but much as I tried to "observe" my thought, I never could figure that out. I suspect I don't think in a language as much as in abstract concepts I am familiar with.

But here is something that says even those concepts could be influenced by my mother tongue: www.nytimes.com/2010/08/29/magazine/29language-t.html

Can you see how english (and even hindi) refers to my native language as "mother tongue", thus imparting a greater, nurturing quality to a language, making the concept of language more than just a means of communication?

innovation at nike

I'm reading about Nike's CEO Mark Parker and how he created the Nike Air line of shoes, saving the company and the brand: http://www.fastcompany.com/magazine/148/artist-athlete-ceo.html.

I remember Nike Air shoes were really big (in terms of ads - not many could afford them) in India in the early 90s, and I remember longing for those Rs. 2000 worth shoes when the average Nike sneaker probably came for a fourth or a third of that. It is nice to understand, years later, what went into those shoes and what they meant for one of the largest innovators in the world.

somethings about search

Web search has been a game changer in many ways. One of those ways is making users habituated to finding what they need, when they need it. Search has obviated the need to keep track of stuff on the internet anymore. What's more, users have come to expect search to work really, really well.

So when it doesn't, and people can't find what they thought was there, it becomes a matter of trust. That just the search part might be broken is not the first thing that they think: is the website just losing data?

If the internet were to be considered information organized as a tree, it would be two levels deep, with a search function as the root node.

Besides being a gateway to information, search is also the most natural way (as yet) users interact with computers - they type exactly what they are looking for. This is valuable information to gain insight about your users' intent.

If you are a website, are you letting users search? And, more importantly, search well?