Will Facebook Kill Micropayment Sites?

Simple it is - You post a link or write a note and people liking it on Facebook. Now extend this simple use case - You get credit points from Facebook for each like on your wall and similarly credit points deducted for each like you make on other's wall. After the netting process, you are left with a lumpsum credit say at the end of a month which you can convert for a real purchase online or say a coupon. Will this be the next level of social interactions? One Click Monetization of our social life on the web? The number of 'likes' will decrease perhaps on the fear of we losing out our points but will the inhibitions and quandary be still there while supporting a cause strong enough for an adrenaline rush within.

The case of Flattr

I remember signing for Amazon , putting my credit card details and then carry on with whatever i want to purchase. Unlike the other online buying sites (say Makemytrip.com or irctc.in) , i need not give my card details after the first purchase; they pick the predefined address and card details. Now think of a restaurant with no price list. Its totally left to the discretion of the customers as to how much they want to pay - basically extending the tipping etiquette to a full swing. Now what if it happens for the loads of online contents - articles,  blog posts, videos et all. This is what Flattr tries to do - providing a quick one-click easy way of paying to online contents. 

The image shows what put them to popularity chart. After Visa, MasterCard and Paypal closed their channels, Flattr was one of the few remaining medium through which people could donate to wikileaks. You just need to create an account and start embedding within their blog the flattr button like the one below.

Anyone else having the flattr account can use this button to like and pay/donate.Flattr makes revenue by cutting 10% of the money made by the content provider as their fee.

Cultural Catch: In simple words, voluntary payments are still like the tip we pay in restaurants, an etiquette that has survived years to become a collective habit amongst the masses.But do micropayments site such as this one have this time to catch. By the time they will do, a Facebook or a Google is sure to catch on this trend.

Angry Birds - Online & Offline Time Killer

Just tried my hands on Prezi. Check out how Angry Bird , the gesture-based simple game, has caught up with the current gaming wave , its monetization model , future and the challenges ahead.

PS: Flash should be enabled in your browser to see this presentation.

Social Network Size : How many can You Handle?

When i walk through the lanes of my hometown , i know everyone around knows me there. The people at smaller places are much more familiar and friendlier with each other than those living in big cities(Who has time?). Why so? Is it the time factor only?

In the earlier post on What is Your Online Social Limit? , a question was raised on the Bounded Rationality while we maintain our Social Relationships. Has our Social Network changed with the emergence of New Media? Has the technology expanded it?

Our 'actual' and 'real' friends still are very few limited by our own human nature and capabilities rather than technology. Social media is allowing us to 'maintain' our friends (who otherwise would move on slowly) in the rapidly changing world. As the old saying goes 'Out of Sight means Out of Mind', these sites ensure that friends are never out of sight and hence mind. They help us integrate our networks and rebuild (virtually) our old and many new communities. But where to stop? As we have seen in the drawbacks of Network Effects , after one point any new addition leads to congestion and slowly the value of the product/network/connections starts diminishing.

One School of thought says irrespective of the limits provided by these sites , most of human beings can maintain , nurture and sustain around 150 meaningful relationships at a time , online or offline it doesn't matter. This 150 is what we call as Dunbar's Number. It is considered the basic building block for human organizations (from many traditional corporates to Roman Army - are organized around this one Dunbar Number). Groups less than 150 members can function without any formal hierarchy and structure and hence minimal level of bureaucracy. Everyone knows everyone else and how they are related to each other in such groups.But with increase in level of social complexity in our relationships, this number seems to be getting reduced to a lower level. The average number of friends a Facebook account is currently 120 and (try/check yourself) the number of such friends whom we frequently interact is quite small and STABLE.

Here is this Social Networking Site which is trying to leverage on this phenomenon and restrict the number of friends we can have to 50.

They position themselves as 'The Personal Network' allowing anyone to share the moment (Photo Sharing) with his/her close friends (maximum 50). Hence , while you form your high quality network and share with only those who matter the most , the upper limit ensure that your network is not cluttered with just anyone and everyone.

Beyond 150?

Do we really socialize in big networks? Do we really so called 'network' at all then? We are merely broadcasting (advertising?) our lives to a layer built of acquaintances. Our real intimate friends are still the same - consistent and stable. One way to make meaningful networks is to divide your online friend-list into smaller units (functional , regional , etc) - That is the whole purpose of Tags and Labels for our contacts which we ignore most of the time. Such filters aligns the network's relevance towards the particular need at hand.

So is Big the new Small?

I have been living away from my home since more than 10 years now. From high school to undergrad to work to post graduation , one thing i have noticed that most of the time it is not advisable to have your best friend around as your roomie or as your flat mate or as your working group partner. The magic just wanes away slowly. The strong ties are an expensive bet.

Social Networking sites has given us the ability to build big networks comprising of weak ties which requires less time , dedication , inhibitions and commitment from both end and most of the time very valuable (getting new job or new projects or new client or a recommendation , idea or advise) in harnessing the true value of our network. And the bigger your social network is , the more are the chances that you wont be 'out of sight' of many of your connections. There will always be stream of updates , status changes of yours reaching out to your connections and vice versa and All Live. This is where Allen curve comes - which says that there is an exponential drop in the frequency of communication as the distance between engineers increases which implies the more closer we are , there are more chances that we will communicate. Online Social Networks bridge the gap and the distance and increases our chances of having a future communication with our connections.

10 Reasons why GroupOn will struggle

Yes please don't get carried away with its US $ 15 Billion of IPO valuation ,  they are into an Easy to imitate , Difficult to Sustain business:

1. Location Based Services will be able to provide instantaneous on the move deals.
2. Easily imitable: Comparable services: StealTheDeal, 8coupons, BuyWithMe, Coupang (S. Korea), Half Off Depot, Jasmere.com, LivingSocial,  Thrillist, Woot, OfficeArrow , Groupilicious, CouponYou, My Little Deuce Coupon, CouponDeville, Grouper With A Squeeze of Lemon , Valpak
3. It cannot be a niche player while others can be. Travelzoo launched a Groupon-like daily deals Clone and is now valued at $400 Million after just 4 months
4. With more players, the margins/cuts/commissions will go down.
5. Groupon.cn – .How will you beat this Chinese copycat mastery?
6. Deals will get commoditized : As a user, it doesn't matter from where the email come from whether Groupon or LivingSocial or from anywhere else. With the large number of deals offered, they can just use a daily deal aggregator such as http://www.shopway.com to check the available deals in one go. 
7. At the end what it does is just lead generation, a new customer acquisition channel like non-deal CRM platforms such as  Facebook and Twitter. It can be alternatively done by Google Adwords , yellow pages. There are ample substitutes once the price convergence of the deals will occur.
8. There are more empowering models coming up -Dealo, which plans to allow merchants to post their deals, is a free service and allows the merchant to handle the deal completely from managing the discount amount to setting their own caps and the duration the deal will last (unlike Groupon).
9. The cat will be out soon ! Majority of deals are marked up higher and then discounted. So they are never a big deal in any way.
10. Groupon makes public the amount of money saved by its customer but ask it how many of the merchants are actually making money out of it. Majority of them are just aggressively trying to acquire 'lost leaders' buyers through the hot-credit-card-ready leads generated by Groupon. The challenge is to lock-in these acquired customers.

What Groupon can do?

• Deal Personalization: Extension of contextual advertising.
• Regional sites, rapid market penetration to get the first mover advantage.
• Evolve as Social CRM provider through Groupon Stores.

Groupon Business Model

Groupon started as a Wordpress Blog and is now a full fledged jewel in the Social Shopping arena. It is one the recent example of Lean startups which uses Customer Development process having more frequent contacts with end users and hence avoiding incorrect market needs and assumptions at the earliest.Such startups minimizes the work and time required to help the business to find the what attracts the market. Its always better to test the market first before scaling your product offering and that is what Groupon did.

Google in its bid to catch up with the lost social web space had reportedly bid for the Groupon acquisition offering it around $6 Billion at the start of this month but the offer got rejected. Groupon has now gone for a fresh round of funding which have valued it around $4.75 Billion currently.

With social media on rise , online collective action and fundraising activities is picking up the pace. Groupon bargains for huge discounts with businesses in local cities by guaranteeing them a certain minimum number of takers and send the deals to its subscribers. If the required number of takers are achieved then everyone gets the deal otherwise none gets it. Its a quick win for all - Groupon gives the businesses large number of customers in quick time and users pass the deal to many others enabling them to reach the minimum guarantee numbers. The best part is that the overall process is very fair and democratic. If the numbers are not reached then Groupon don't charge any penny from anyone. And even after the purchase , if the customer feels that he/she has been let down by the offer, a refund is done without any questions being asked. And they were smart to go local rather than offering national products such as a software or TV as Amazons, Tescos and Walmarts of the world are already providing deals on such items and they have ample muscle power to drive volume-based discounts. And you cannot see the deals rightaway on landing their page. The first thing which they do is to get people sign-up and subscribe to their mailing list for the daily deals. The current count is about 10 million subscribers and this small pie of the social media space has made the company almost touch the billion dollar sales.The game seems to have just begun.

There are pitfalls too. Firstly , there is an uncertainty on the actual number of people turning up for the deal, so if the number exceeds to what the respective business can cater to then it impacts the overall delivery and service. Secondly, the shoppers fall into the deal trap, thereby at times buying stuffs which they normally wont do and wont use. Third problem is that the overall model can be easily imitated. Amazon has been already funding the current biggest competitor of the Groupon - 'Living Social' and will surely acquire(to integrate with itself) it once the things scale up for good. In fact , the model is so simple that Groupon.com domain name was already bought by one individual based in UK for same objectives/plans and he twice denied the sale offer from the Groupon founders who finally got the trademark for Groupon which extended to UK as well and hence were able to buy the domain in third attempt for around $250,000.

By the way , will you call the model as a click and mortar one?