Greek Complexity

Nuance

Someone on my FB feed shared this post today:

I had two reactions to this. Interestingly, they are contradictory to each other.

My first reaction was a head-slap, face-palm, eye-roll at the lack of nuance in the post. One, none of the incumbents except for Blockbuster is dead. So stop saying they were each "killed" by a tech firm. And two, is lack of customer-centricity the only reason for the troubles faced by the incumbents? Really? And three, is it a foregone conclusion that Uber is a long-term viable business (in its current incarnation)? I'm not so sure.

My second reaction was, "That's just silly. All five arguments as stated here are about price. Not customer-centricity." Which of course replaces the author's single-cause "analysis" with one of my own. Make of that what you will.

Things that make me puke

Yesterday I read, The World’s Longest Recruiting Process: Josh McFarland is Joining Greylock as a Partner. My pukoradar began to boot up at the sight of that headline but I ignored it. Then I came to:

TellApart applied cutting edge data analytics and predictive modeling to the field of marketing. In the time it takes you to blink — literally 100 milliseconds — TellApart’s technology can respond to an impression in an ad exchange, crunch thousands of model features and serve the right ad at the right place and the right time. And it does this hundreds of thousands of times per second, with great insight and accuracy.

Really? This is the best you can do? I'm by no means the first person to point out the inanity and insanity of absurdly smart people reduced to doing this. I also freely admit that I used to be one of the flock myself, being fascinated by the potential for algorithmic ad placement, trading, optimisation, and so on (and I still am fascinated in some ways). The parallels with, say, high-frequency trading are obvious and have already been seized upon.

Then today I read, Methbot: a $3M-$5M/day video ad-tech fraud:

White Ops, a security firm, has published a detailed report on a crime-ring they call "Methbot" that generated $3M-$5M by creating 6,000 fake websites to embed videos in, then generating convincing bots that that appeared to watch 300,000,000 videos/day -- running virtual instances of various browsers (mostly Chrome) on virtual machines running MacOS X, from a huge pool of IP addresses that they fraudulently had assigned to US locations, deploying clever grace-notes like limiting access to "daylight" hours in their notional locations; simulating mouse-movements and clicks and more.

It's bad enough that prodigious brains and huge amounts of capital are being deployed towards optimising digital ads. But what stories like this second one tell me is that even the fundamental premise of digital ads is invalid (let alone trying to optimise it).

Page views? That's so 20th century.

Clicks? Meh.

Click farms? Old hat.

Automated click farms? Yawn.

Measurement "errors" and over-billing? Surely. Not.

And so we arrive at purely simulated, never-even-existed views and clicks. Ah, yes, let's do that.

A race to the bottom.

Surely we can come up with something better than this? A system that actually creates real value? We're missing the woods for the trees.

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I'm sure Josh is a perfectly wonderful human being – and the Greylock blog post goes on to tell you so in nauseating detail – but that's not really what set my pukoradar off.

Why RedMart's sale to Lazada/Alibaba matters

I'm cheering Lazada's acquisition of RedMart – but probably not for the reason you think.

A couple of years ago, I wrote about the need for more soft landings. Why? To enable more risk-taking. Set up as many incubators as you want but that isn't going to incentivise new venture creation as much as a culture that, if even if it doesn't quite applaud risk-taking, at least provides the chance of a safety net for those who don't quite make it to the big time.

The South-East Asian entrepreneurship scene has grown leaps and bounds over the last few years. The number of entrepreneurs and people aspiring to join start-ups has definitely hit critical mass. Whereas I might have been at most two degrees of separation away from every single person in tech start-up circles a few years ago, I'm not sure I can make that claim now. There is also a vastly greater amount of sectoral and functional depth in the market now.

The one thing we don't yet have enough of is soft landings. And that's where the Lazada-RedMart news is so encouraging.

No one said it would be easy.

By all accounts, RedMart had been struggling for a while. Singapore is not an easy market to operate in. Consumers are sophisticated (read: informed and hard to please) while also being price-sensitive (read: informed and hard to please). On the back-end, costs are high. Large rounds of later-stage start-up financing are still not easy to come by in South-East Asia and RedMart was certainly one of our few trailblazers in this regard. Which is why, when the company's investors threw up their hands this year, it was imperative for the health of the community overall that RedMart find a buyer.

Now, does this mean that this was a profitable sale for investors? Not likely. The earliest angels may have made money if all investors had pari passu status (very unlikely) or the latest investors may have got their money back if they had LIFO liquidation preference rights (but that doesn't mean they would make a profit). Either way, few if any are going home happy.

But again, that's not the point: the entrepreneurial community, the broader matter of consumer choice and investors all reap the benefits when entrepreneurs try new things, staff join them, and the market funds them. Even if the company doesn't eventually get to the promised land.

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The twist in all this, of course, is that Lazada was itself the beneficiary of a white knight in the form of Alibaba swooping in to rescue the company. I didn't comment on that deal when it happened because Lazada wasn't a traditional start-up in the sense we really think of one. The spillover benefits to the overall community in terms of providing encouragement to other founders weren't great, because Lazada (and other Rocket Group companies) although run by people with stellar backgrounds don't really fit the image of traditional founder-driven start-ups.

A version of this post first appeared on e27.

Why short-term fixes won't help with your long-term goals

Those who know me know that I have a visceral distaste for the concept of jugaad, which means "making do". Jugaad is usually spoken about in India in positive light -- often for good reasons -- but I think it's worth aiming higher. Read this and this for reasons why I think using jugaad as a guiding principle sets yourself up for mediocrity.

I'm not the only contrarian in this respect.

Amit Saberwal is a senior hotelier-turned-entrepreneur who has deep insights into the travel industry. In a blog post he wrote a few months ago, he gets into the guts of why optimizing for the short term can have a negative impact in the long term. Said differently, optimizing for local maxima can sometimes mean entirely missing the longer path to a global maximum.

Photo by Robin Benad

Specifically, Amit points out why hotels shouldn't pass on OTA commissions to online customers and shouldn't offer preferential prices to customers who call them directly even if this looks like the easiest way to compete.

An independent hotel is tough business to run. The lack of differentiation in the brand and product means that hoteliers have lower bargaining power with third party distributors.  I have been speaking to scores of hoteliers and one common operating procedure they employ is to simply increase the price of the hotel by the amount of commission they need to pay Online Travel Agents. 

Example if a hotel generally sells at US$100 and the market manager for Expedia insists on a 25% commission, they start selling the hotel online at USD 125 on all online channels, including their own websites.  They then track the Average Daily Rates AFTER paying commissions. Should any customers search on an OTA and call the property directly they promptly discount the rate by 10-15%.  It is a win-win situation for all in their mind - the customer gets a discount, the hotel gets revenue that is over and above  their Average Daily Rates and the OTA is cut out. 

Makes perfect sense? Except that this is a terrible idea!

Read the rest here to see what Amit recommends hotels do instead.

Bizarre job interview -- my most successful Quora post ever

An answer I wrote to someone's question on Quora is currently racking up about 1,000 new views per day. Completely unexpected!

The question was: What is the most bizarre job interview you have ever been party to?

You're not a member of Quora yet? Ok, here's what I wrote:

Neither as interviewer nor as interviewee but thought I'd share a friend's experience.

My friend's office is small-ish and easily accessible, not a big office tower with security guards and receptionists.

So my friend, who was the CEO and founder of his company, was trying to fill a mid-level position and had a bunch of interviews set up one after another. Just as he was ushering in his next candidate, a golden retriever that had a collar but no leash walked in alongside the candidate.

He was naturally quite bemused but rolled with the punches like a true entrepreneur. Interview begins, dog saunters around, doesn't really bother anyone, lies down under the table for a bit and then leaves the room out the same door it entered.

The interview isn't over yet.

My friend can't take it any more. He likes the candidate and the interview was otherwise normal so now he bursts out, not angrily but very curiously, with, "Why did you think it was normal to bring your dog to an interview?"

The candidate's reply was, "My dog? I thought it was your dog! I wanted to ask you the same question!"

Turns out the dog had just been out for a loiter and decided on a whim to traipse in an opening door.

Some people liked the answer so much that they used their own Quora credits to promote the answer to others. It was even featured by the BBC last month!

One of my favourite things about the post was this really funny response: "I like that they were so courteous as to await the dog's exit before addressing his presence in the room."

:)

WPP leads Series B In Percolate

The size of the investment was under $5M according to one source. Content-related businesses have started to become ever more popular in recent times. Witness Buzzfeed and the like.

More: http://www.mediapost.com/publications/article/220359/wpp-takes-stake-in-percolate-expands-social-marke.html

A few other tidbits from Mediapost:

WPP was also recently rumored to be eyeing social media analytics startup Simplify360. The Bangalore-based firm already boasts about 100 clients, including Revlon, Target and Yamaha.

The social-marketing business is bigger than ever. This year, advertisers are expected to pump nearly $12 billion into social networks around the world, according to eMarketer. That’s 25% more than marketers spent on social last year.

Analysts, however, say the social management market is ripe for consolidation. In fact, over the next 24 months, the number of social-leaning vendors and agencies will shrink from roughly 200 to less than 24, according to Mukul Krishna, digital media industry analyst at Frost & Sullivan.

“Consolidation is definitely needed -- and definitely happening,” Krishna recently told Social Media & Marketing Daily. “The market is extremely fragmented, and filled with vendors and agencies promising to manage everything, which is B.S.”

China’s online funds come under fresh fire

Snip: "Funds launched by the likes of Alibaba have been lambasted as parasites that are endangering China’s economic health by a prominent commentator, the latest salvo in a battle that pits new online funds against the traditional banking system they are shaking up. The war of words over the weekend is a sign of the growing controversy over the online investment funds, which were launched less than a year ago but have already upended traditional business models in China’s banking system."



More: http://ift.tt/1pgEAew

This is an auto-generated post from my reading list.

Resolving the contradictions between web services, clouds, and open source

Snip: "Predicting trends in computer technology is an easy way to get into trouble, but two developments have been hyped so much over the past decade that there's little risk in jumping on their bandwagons: free software and cloud computing. What's odd is that both are so beloved of crystal-gazers, because on the surface they seem incompatible. The first trend promises freedom, the second convenience."

More: http://ift.tt/1kqgnT4

This is an auto-generated post from my reading list.

How Real-Time Bidding Will Influence The 2016 Election — And Change Don Draper's Job

Snip: "Real-time bidding (RTB), a method of selling and buying online display advertising in real time, is one of the fastest growing areas of digital marketing. According to the International Data Corporation, worldwide real-time bidding-based spending is expected to reach $20.8 billion in 2017 — which is a big jump from the $3.2 billion spent in 2013. Jeff Green recently talked to us about how programmatic buying and RTB are influencing the industry, from the 2016 elections to print ads — and how Don Draper's job is about to change."

More: http://ift.tt/1hmMv5o

This is an auto-generated post from my reading list.

I have too many mobile web browsers

How many web browsers do you run on your computer? Two? Three? Four at most? I have three on mine. IE (because it's there), Firefox (because I like the add-ons) and Chrome (because I can do without Firefox's add-on bloat sometimes).

Now how many web browsers do you have installed on your phone? Two at most, I imagine.

I have five.

• Opera Mini
• Dolphin
• Dolphin Mini
• The built-in Android browser
• Firefox Mobile (which I've decided recently to uninstall)

I also used to have Opera Mobile until I uninstalled it out of sheer confusion, and some of my apps have built-in browsers too, such as Pocket and my password manager.

It sounds crazy and it is. So why do I have so many? Because I actually need each of them for a slightly different purpose! I haven't even listed other browsers built into apps which I don't use very much.

Dolphin is good when you want to be able to switch between device profiles easily and do other somewhat fancy things, but it's not always necessary. I like Opera because it's fast. I absolutely hate it sometimes for the way it clears its cache when I come back to it from another app. I use the built-in Android browser only to log on to (some) wi-fi hotspots. And Firefox Mobile is (was) nice but too bloaty for my poor obsolete-after-two-years phone.

So, yes, it really is crazy to have this problem. Essentially good enough browsers (except, um, one) have existed for PCs for a long time. Why not the mobile too?