Social networking and old media

I’m currently attending the Online Social Networking and Business Collaboration World Conference.

There’s some interesting perspectives on where social networking is going and how people are going to make money from it.

Personally, I think too many of the big players like Bebo and MySpace are too fixated on the old broadcast media model of top down content where they control everything.

Particularly fascinating is how dismissive many of the attendees are of YouTube and Facebook. The funny thing is there were five people around me with laptops on and all of them visited their Facebook pages during the morning seminar.

The icing on the cake was on the bus home. The girl in front of me had her MacBook open and she was editing her Facebook page.

It seems to me the big established media companies are struggling with their investments in the social media space. 

More on this later.

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Sweet point for iPhone apps

Thanks to Techmeme, I came across an Venture Beat article that illustrates some of the points in my earlier post.

The $9.99 iPhone app is exactly these price points at work. The price isn’t too much to discourage buyers but equally allows the developer to turn a profit from the application.

It’s interesting how the price points settled so quickly in the App Store and how a similar thing happened with the 99c price point in iTunes.

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Where does your business sit

One thing that’s been in my mind recently is how businesses will survive the downturn.

The way I see it is there are three broad segments we can put business and products into; essential, deferrable and discretionary. These are going to need different strategies to survive.

Discretionary

Stuff we don’t really need.
Examples: Expensive travel, cafes, TV’s, spa baths, gourmet food, farmer’s markets, designer shoes, branded bottled water, 90% of what’s on sale at the typical suburban shopping mall.

If your business is in this category then you have a problem. You’re going to have to demonstrate some sort of need or value to the customer. 

To survive in this category it’s going to take innovative thinking in marketing and production along with some radical revisions of pricing and cost structures.

We see some of this with fast food chains offering things like 99c and $1.99 meals. I expect we’ll see many cafes offering 99c coffees and restaurants offering $19.99 “recession buster” meals.

To make money on these deals business owners are going to have to keep a canny eye on their costs, the prices customers want to pay and be very innovative in their marketing.

Deferrable

Things that can be put off for the moment
Examples: Computer repairs, mechanics, homewares, mobile phones, motor vehicles

As a former computer tech, this one’s close to my heart and there’s no doubt the tech sector’s already being crunched by this as people put off purchases and maintenance.

The key to surviving here is in motivating customers not to defer purchases. It’s going to be a matter of cutting costs and reviewing product range and price points.

This means more marketing that emphases the benefits of your product (eg cleaning up your computer extends its life and saves you money) or making the service more affordable (eg 30 point inspection service for $29.95).

Essentials

Stuff we can’t do without.
Examples: Basic groceries, energy, telecoms, shelter

Strangely I think this sector will see the most blood on the floor. For the simple reason too many business owners believe their products are essentials.

A good example is the belief if you are in food and groceries you should be fine. That’s only true if you sell food and groceries people need and can afford.

For instance many of those stall holders at your local farmer’s market might sell food, but people don’t need cold pressed, extra virgin olive oil at $20 a litre or ash rolled goat’s cheese at $40 a kilo.

Even if you are selling basics, you’re going to have to watch your costs and your competitors. You need to be able to meet the price point savvy consumers will demand in the next few years.

If you’re selling tomatoes a $7.99 a kilo when the guy around the corner is getting them out the door for $4.99 then you need to look at your suppliers and your costs.

The overriding themes through this post are “price points” and “marketing”.

We are going to have to let them know we can deliver what they want at the price they want.

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How the ACMA blacklist works

One of the comments to my Smart Company column took me to task on how the Australian Communications and Media Authority compiles the website blacklist. I’ve put the comment and my reply which explains the process below.

I should also add the blacklist only applies to sites hosted outside Australia. ACMA will direct an Australian hosting serivce to take down any site rated X18+ or refused classification .

Paul, you incorrectly write that it is up the classification board to decide what is blacked out. That is incorrect as they only have jurisdiction on what is published within Australia. The blacklist is currently maintained by ACMA, so which minor public servant gets the job of surfing the web looking for something they can add (as well as responding to any ministerial hints about “unwanted” material).

If it was a transparent process, the material had been vetted against Australian standards then maybe. Or rules by a court. But not a secret list. No way.

Thanks for your comment, Richard. One of the big concerns about filtering is exactly how an appeals process or independent oversight of a blacklist will work.

ACMA refers any complaint about a website to the Classification Board. The board then classifies the site under the same system used for computer games and movies. If the board refuses classification or gives the site an X18+ rating then ACMA adds the site to the blacklist. The details are on the ACMA and Classification Board websites.

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Why Internet filtering is bad for business

The proposals for an internet filter risk hurting innocent businesses by blocking websites.

This article orginally appeared in SmartCompany on the 14th November 2008

As reported in SmartCompany last week the Federal Government is proceeding with trials of internet filters that will restrict Australian access to the world wide web.

The aim of internet filtering is to block child abuse sites from Australian web surfers. While the idea is well meaning, the proposal will be an additional burden on business and won’t fix the problem.

There certainly is a problem – a study by the University of California, Berkeley, found around 1% of websites contain pornographic material. With over a billion websites indexed by Google, this translates to around 10 million sites containing things you’d rather not be seen in your workplace or by your kids.

To deal with this problem, most computer operating systems, browsers and search engines have built-in adult filters, and the Federal Government provides free software for home computer users on its NetAlert website.

The new filter will go a number of steps further, with it being compulsory for internet providers to deny access to around 10,000 sites, a number that falls dramatically short of the 10 million estimated pornographic sites and who knows how many terrorist, gambling and euthanasia sites that will probably be added to the list.

The task of deciding which of the billion websites to be blacked out will fall upon the Classification Board. In 2005-6, their 65 staff considered 9425 movies, video games and websites. To say the board will require a massive injection of resources is an understatement.

Under the current proposals, the banned list would be secret, and it’s uncertain if your business inadvertently found itself on the list how an appeal mechanism would work.

One serious risk for business is that many of the people who post illegal and inappropriate material do so on others’ computers to avoid detection. Hacked personal computers and corporate servers are frequently used by criminal gangs for exactly this purpose.

There is also the risk of sites being blocked for political reasons. Canberra has form on this, with the Federal Police using spurious copyright reasons to close down Richard Neville’s spoof John Howard site in 2006.

Recently, a staffer of the present Federal Government indirectly pressured a prominent critic of the filtering proposal through his industry association.

So there are real risks to your website if someone in your company does something illegal, messes up a security setting, or simply upsets the wrong person in a minister’s office.

However it’s not the censorship aspects of filtering that should be the main concern for businesses. The indirect consequences will be deep and far reaching for Australian commerce.

The immediate effect is filtering will increase internet costs. Given 98% of businesses use the internet, the increased ISP charges will be a tax on almost every Australian enterprise.

Business relies upon fast, reliable communications. Trials to date of the filtering systems show a decrease of speed between 2% and 84%. The filters will also add another level of complexity to the system, which in turn reduces reliability.

Those additional costs will become another barrier to entry. At the very time the Federal Government is struggling with competition in the communications industry, this proposal will eliminate many smaller operators and favour the larger incumbent providers.

Overall, this proposal will add costs and reduce the reliability of one of the modern economy’s critical business tools. The real tragedy is the filters simply won’t work.

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Global Entrepreneurship Week

I went along to the Sydney launch for Global Entrepreneurship Week tonight.

What an absolutely interesting evening! There really are a lot of great ideas out there and plenty of talented people making them a reality (many of them 20 years younger than me).

More on this when I’ve had some sleep (in three days times).

I also learned about the Kauffman Foundation. More on that later too.

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AVG anti virus problems

I’ve long recommended AVG for home users. But since the release of version 7.5 there’s been a slow decline in the quality of both the support and the product itself.

Flagging a critical Windows dll file as a virus is a real worry. If that had happened to me, my first thought would have been that I’d stupidly infected myself with something.

The lesson when a result like this comes from the blue is to treat it with suspicion. If one virus checker flags a problem like this, hit it with a couple of others to confirm the problem.

I think I’ll have to change the free anti virus recommendation on the PC Rescue and IT Queries websites. It looks like Avast! is the best choice and I’ll keep AVG and Anti Vir as the alternatives.

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