Posted by Jeff Lu on April 12, 2010
According to Mary Meeker’s report issued today, the mobile Internet usage will overtake desktop usage in 5 years. It caught me off guard when I read it but after thinking about the speed of innovation and adoption that’s occurred in IT the last 50 years, 5 years sounds reasonable. Knowing that mobile is the next boom cycle for technology, what are the implications?
Mobile eCommerce
Josh Kopelman of FRC has recently written some thoughts about innovation in eCommerce. In summary, Josh talked about how 10 years ago, most of the most highly trafficked Internet sites did not exist, however, of the top 15 most highly trafficked eCommerce sites, only 1 of them (NewEgg) is a new comer.
There has been a lot of interest in companies like Gilt and Groupon changing the eCommerce ecosystem by discovering alternative high growth eCommerce business models. I think there are even larger opportunities for companies like them to use the mobile platform to drive a higher adoption and purchase rate.
The report goes into greater detail than I care with this post but I’d like to review some of the main inherant advantages of mobile eCommerce.
- Push notification – with smart phones, there is no longer a moment in my life where I am not connected, which is the way I like it. The Push-notification feature allows for incumbent companies like eBay, Gilt, Amazon of offers I may be interested in or tracking. I’ve also blogged extensively on the potential for new companies to use this feature, combined with Location-based services to push relevant, location-based offline offers.
- Location-based services – Don’t want to be redundant here so in a nutshell, convergence of digital and offline identities and offers.
- Content delivery – With the MLB.tv iPhone app, I will now never miss a Red Sox game. With slingbox I can watch all my favorite TV shows on my mobile phone while in transit. It’s going to be real interesting to see how the content game will change as people consume more and more media on their phones. Will the industry be more open to allowing people to pay, a-la cart to consume content on their mobile devices? It will be interesting to see how it will force the hardware of our phones and infrastructure of the carriers to innovate to keep up.
Increase Transparency – This could really crush brick and mortar retailers but consumers can now check prices real time to see how offline retailers compare with eRetailers.
Mobile Apps
Right now, mobile apps are all the rage and it seems like the winner of the app store battle will win the mobile platform war. I do have to wonder though, the mobile browser still has a lot of room to grow. As mobile standards improve and innovation occurs with browsers and language, will we still need/want to download apps in the future? I could be wrong about this but I have to believe in the trend of democratization on the Internet platform. I think that mobile apps will be come less important as our mobile Internet browsing platforms become more sophisticated and UI friendly.
Mobile Enterprise
There’s a huge opportunity here for a SaaS cloud player to develop some game changing mobile applications. The iPad provides a great platform to test this opportunity, giving developers more to work with. Not sure what verticals to address or what the real life application is but one area I have in mind is the medical field; replacing paper charts with interactive iPads that can retrieve a lot more patient information.
As mobile devices become a more frequent and efficient access point to cloud based services, consumers will be more able to work on the go, further freeing them from their desk and desktop. SalesForce has already developed mobile tools to address this premise and I’ll be interested in following their product development.
Gaming
Mobile gaming is one of the areas where I’m most excited about. The business model has been proven with companies like Zynga using the Facebook platform to build highly profitable and addicting games. The same principles can be applied to mobile only apps. The potential for the iPad to become a game changing game delivery platform is all but certain in my mind. The inherent advantages of the mobile platform can be leveraged to increase engagement for Internet games (push notification, constant connection). Online gaming is not really my domain expertise but is an area where I am actively learning more about.
Posted by Jeff Lu on March 23, 2010
I was talking to a VC associate in NYC around this time last year. He asked me about a few businesses or trends that I liked. The Kindle just recently released a month before and I had gotten my hands on it 2 months before that because a buddy of mine at Amazon was working on the project. I told him that I thought the Kindle really changed my perception of what mobile computing could be and would be an indicator for where mobile computing was headed (probably not as eloquently). He said he didn’t see it because he has so many device to carry around, the last thing he wants to do is carrying around another.
In 2009, Amazon sold somewhere around 550K Kindles and analysts predict that they will sell another 2 million units in 2010. The iPad sold 120K units the FIRST DAY of presale and is expected to sell a few million units this year. I’m excited to see what type of new applications will grow on these new mobile computing platforms and how the they will disrupt the current antiquated book publishing business model. I think that iPad like devices will be a huge opportunity for the gaming and advertising industries.
After Todd shot down the first trend I was passionate about, I mentioned Location Based Services (LBS). He said it was interesting and something that Firstmark looked into but thought it was still too nascent and didn’t see an investment opportunity there. A year later, I see foursquare making headlines with 500,000 users who collectively check in 300,000 times a day. I see companies like yelp and facebook entering this arena as well. I think mobile location based services will be HUGE in the future as mobile hardware catches up with what we would love to do with the software. I mean… I did blog about it a year ago.
It’s easy to say “I told you so” a year later so I’ll expand on my LBS thesis to go into what it will become next year. A year from now, we will see location based services move beyond twitter like updates and data collection to actual monetizing the user using performance marketing techniques we already use on the Internet.
One idea I have for converging LBS and performance marketing is to push location-based special offers from local vendors to consumers. Here’s the use case:
As a consumer, I download the app on my iphone and sign up to receive offers from food and beverage vendors (one could conceivably receive offers from retail vendors, auto services, beauty service, etc.). I can choose to receive pushed offers from within a distance… so for this example, within 5 blocks from my GPS location. Now on weekends, when I walk along Lincoln Road on South Beach, I can see which restaurants are offering the most attractive deals.
From the advertiser’s point of view, they can create an advertising account online and in real time push offers to highly targeted audiences to drive offline traffic and sales. A compelling example might be that from 3-5pm, I have to staff my restaurant as if it’s 11am-1pm but business is not as busy as during the lunch time rush. These employees represent a fixed cost that I could offset by placing an offer for the next 2 hours that will generate incremental sales for my restaurant. Advertisers could pay on a cost per “click” or cost per transaction basis. The proper allocation of advertising dollars to the platform might be tricky but it’s something that can be worked out with enough thought.
Google is already doing location-based PPC ads on their maps. I saw this when searching for the location of a retailer and saw the location for American Apparel along with my search results. I’m not saying that example will be exactly where mobile performance marketing will go but I use it as an example of what I think can be possible in the coming year as this category explodes.
*EDIT
I started this entry Sunday night. I swear I didn’t see this news till just now
Placecast, a platform for location-based marketing, just announced that it has added $3 million to its recent series B funding, bringing the round to a total of $8 million.The funds come from existing investors Quatrex Capital, ONSET Ventures, and Voyager Capital, and will be used to expand the company’s network.
Placecast’s service pushes offers from participating brands to users who venture close enough to a relevant retail outlet. The company’s clients include The North Face, SONIC Drive-in, and American Eagle.
Posted by Jeff Lu on March 6, 2009
“I’m Jim Heising and I’m with Sortuv a company.”
A well rehearsed line from the co-founder of Sortuv which was mildly amusing but was probably a bigger hit with the (unfortunately under-represented) female crowd at our a weekly Seattle start-up happy hour (Hops and Chops) table last night. Hops and Chops occurs every Thursday at Linda’s Tavern in Capitol Hill and it has become pretty well known around the community as a great place to meet people from the local start up community in a low-key setting.
Last Thursday evening was the first time I was able to escape my cubicle and head over to the weekly networking event. My favorite part about my job is meeting new people and companies and being blown away by their new ideas. I didn’t suspect it right away but I was about to be blown away by Jim and Sortuv.
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Posted by Jeff Lu on March 5, 2009
Nokia is teaming up with Sense Networks to collect people's offline behavior data
In the world of digital advertising, data is king. As each year passes and as technology and digital content improves, people spend more and more of their time engaged with their computers. In turn, Internet companies like Google have become more adept at collecting data from us, tracking our demographics and predicting our behaviors.
Despite the undeniable fact that we are spending more and more time online, we still spend a significant portion away from our computers. We travel, go shopping, go to bars, we exercise, etc. There are lots of things that we still do offline, thus there’s lots of data that companies cannot capture. This is where Sense Networks comes in.
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