Analyzing the Twitter-Jaiku-Pownce Business Model and Issues
Micro- or Nano-blogging, Presence Messengers and ways to share or send stuff are part of the same ecosystem: services that operate with a slightly different or overlapping focus. Tumblr, Dodgeball, Jaiku, Plaxo, Twitter, Pownce, … are the relevant examples, of which I touched upon Twitter, Jaiku and Pownce. Let us now analyze these services with some simple questions.
Are they useful?
I think such services are partly useful to a segment of the market but only for a short period of time. They can be addictive but that does not increase their usefulness. Of course, there is potential in such services. In many parts of the world, the mobile phone will be the first computer people will be using and so the reach is tremendous only if the mobile component is part of the picture.
Services should fulfill a genuine need and also make the customer perceive that they are useful. Companies use Technology to meet the first requirement and Marketing for the second. Getting a text message that your salary has been credited to your bank account is an example for this. Companies have to work hard to bridge the need and the perception: Say, you ‘Twitter’ that you want to brush your teeth but are out of toothpaste, and P&G pipes in with a discount coupon to help you save on any of their toothpaste brands; you use it when you shop the next time. Such a transaction could be beneficial to all parties (Twitter pockets a tiny commission).
Is there a Business Model?
This is the weakest spot. Companies like Pownce or Twitter have temporary ‘eyeballs’. Revenue models are questionable. On paper, Pownce has advertising and the premium subscription. Twitter does not even have that. In my opinion, even without competition, they will not last because of technology-shifts. What they offer are not break-throughs in technology, but utilities. So, it is easy for competition to catch up or buy them out for low valuation. As we can see, there are already lots of players on the same turf.
Can they get customers? It may seem easy to get customers since the thresholds are lower in such simple utilities. It is much easier to text out your micro-blog than labor out a regular blog. The UI is much better and Personalization is in. Multiple mobile devices are supported so you don’t need a computer to micro-blog; your cell phone will do. But, all this is just not enough for the customers to switch. Om Malik’s reaction is typical of most customers. Grabbing their attention is the challenge. Unless you generate enough ‘buzz’ at that time, making it seem like a prize to join the latest community, it will be impossible to differentiate. Focusing on a niche segment is one way to go.
Can they keep customers? Here, keeping their attention is the challenge. George Colony, the CEO of Forrester Research puts it beautifully: you have to re-earn your customer’s loyalty every day. Consumers are fickle because a new toy will grab their next fifteen seconds of attention. Factors like ‘blog fatigue’, ‘connected fatigue‘ also play a role. The advantage of such services is that the customer can define his/her audience and share opinions and stuff without worrying about acceptance among friends. Facebook and Myspace have so far been successful in retaining majority of users, but how long they can continue to do that remains to be seen. Most of the people stay because their friends and contacts are there. Sooner or later there are bound to be tools which will allow you export out your contacts and content from one social network to another. Plaxo Pulse is one such initiative, and if Pulse delivers what it promises, it will break the lock-in of social networking sites on the users. Such sites could offer a better value proposition for users to stay on.
“People will bring this into work eventually and so businesses will use such services” - Jyri (of Jaiku) said in interview with Scoble. Enterprises are taking a cautious approach to social-networking in the office space. Even CIA is launching a social networking site for its spies. On one hand is the need to keep the professional separate from personal and on the other hand, to encourage the social and interaction aspects to harness the full-potential. However, there are already many reports of businesses blocking access to Facebook and schools blocking access to MySpace. Have to keep an eye on the emerging trends.
Is it all Fluff and No Substance?
Such offerings are accused of having only fluff and no substance. I see nothing wrong about it. Twitter or Jaiku do not claim their services will change the course of human history. They just enable you to Lifecast or share stuff with others. Yes, this is about Attention Economy and people have just a few seconds to dash off a text message to share or broadcast. Likewise as a receiver, you have just a few seconds to be confirm that your wife picked up the kids or that this is the right time to call Tom because he is having a coffee-break. Lee Gomes provides this relevant tidbit in his well-written post:
Some folks may lament the vaunted Information Superhighway being used to transport banalities such as what someone is eating. If it’s any consolation, the same thing happened with the telephone, says Claude S. Fischer, the UC Berkeley sociologist whose book, “America Calling,” is a social history of telephones in the U.S. “The telephone was initially conceived of for very serious purposes,” Prof. Fischer says. “But sometime during the 1920s, AT&T decided that ‘idle chatter’ would be a good way to make money. It started to encourage people to pick up the phone for any purpose they want.”
Prof. Fischer says he is as astounded as anyone, certainly as any older person, by the humdrum nature of many Internet communications. “If you look at the content, you’d have to say, ‘What is the point of them?’ But a psychologist might say that the point isn’t the content, it’s the connection.”
What about Privacy?
Usually a lot of fuss is made about Privacy issues. It is important to understand that what exactly constitutes private information can vary depending on the context. There ought to be proper tools and mechanisms to handle privacy issues appropriately. This is where most of the debate should focus. The products and services put out should be flexible enough for the consumer to define and control what he/she is willing to share. In the end, it is an act of negotiation where the consumer is willing to share a part of his private information in return for some benefit.
