Mark Kolier’s Blog

Archive for the ‘Innovation’ Category

The news last week was that Zynga has planned an IPO filing for $1 billion (it hopes to raise $1.5 to $2 billion with an overall company valuation as much as $20 billion). The move http://bit.ly/qq9yzv took nobody by surprise. ”’Tis the season of IPO company over-valuation after all.” Full disclosure – I have never played Farmville, Mafia Wars, Frontierville, or Cityville, or any other of Zynga’s free online games for that matter. I’ve also not had occasion to play AngryBirds (from Rovio) either.

It appears Zynga is counting on growth in the mobile marketing channel to further fuel its meteoric rise to prominence. I think that is a smart thing since I can’t help but feel that the backbone of Zynga’s past growth – Facebook users, will ultimately tire of the popular online game. And when people tire the user number fall will be fast and steep. But there are several interesting reasons that suggest Zynga might be undervalued http://bit.ly/oaFCqu.

A mobile Zynga platform offers more value since when a user is in a waiting room or stuck someplace he or she can jump on to kill some time populating a farm, frontier or whatever it is that people like to do while playing those time-killing games. And that’s what they are, time killing games right? Is there any other possible redeeming factor or benefit to playing a Zynga based game? C’mon people, this is your chance to give me reasons as to what I am missing!

I never was tempted to even sign up for a trial of any of the games although I received a multitude of invitations to join in Mafia Wars and Farmville. I pass quite a bit of my day already staring at a computer terminal and I haven’t the time or desire to play virtual games especially when I don’t have enough time to play the real ones I’d like to play more often.

The interesting part of Zynga’s development in the mobile space will be the uncoupling from Facebook. I champion Zynga’s realization that in order to stand more firmly on its own they will have to develop game delivery platforms outside of Facebook (or Google+ for that matter should it become a true competitor to Facebook).

Mobile payments are poised to become ubiquitous and the sale of virtual items in games is already gaining serious traction. So a future revenue model is there but a $1 billion kick start surely would help get things going.

$1 billion is still a lot of money (to me at least). Do you think Zynga has legs to stand for the long haul?

I read Wednesday morning that 75% of all Foursquare activity is performed by 5% of its members. So it’s safe to say that Foursquare has a long way to go to attain the type of regular usage it desires. Since its launch I have been a somewhat regular user of the check-in feature on Foursquare. I have remained interested in how people might use the platform.

What I have noticed recently is that Foursquare has enhanced the platform by offering specials (25 often) in the general area in which you are checking in. I think this is a potentially game changing asset and just may be the launching pad for a meteoric rise in use of the Foursquare platform. On Thursday Foursquare Labs Dennis Crowley announced a partnership http://nyti.ms/iHp6WX with American Express http://bit.ly/mDmbiW to further offer value to Foursquare users.

Up until this point Foursquare has not done much more than offer the ability to show friends within the network a person’s actual location, (or close to your actual location) when you check-in. If you check-in to a particular place multiple times each future check-in brings you closer and closer to being named ‘Mayor’ of that particular place. Being a ‘Mayor’ could possibly bring you some free drinks/gifts/offers so there is some possible intrinsic value. Overall the entire Foursquare platform was not very compelling.

The growth of nearby deal offers once you check in on Foursquare provides some of the missing ingredients for a more robust and compelling reason for people to take a new look at Foursquare. I wish I could say the same for the daily deal sites led by Groupon.com and Living Social.

A very interesting research paper written by Utpal M. Dholakia an associate professor of management at the Jones Graduate School of Business at Rice University focuses on a survey of 324 business that conducted a daily deal promotion between August 2009 and March 2011 http://bit.ly/jTsEj1. Nearly half of the business polled indicated that they would run another daily deal promotion which means more than half the businesses would not.

I’ve questioned (as have many) the effectiveness in driving positive transactional customer behavior through daily deal promotions. The unknown metric is the increase in consumer awareness (branding) via the use of daily deal promotions. As with any advertising campaign a certain amount of immeasurable faith has to be considered to be part of the equation (see broadcast television).

There are other reasons a business might continue to use daily deal promotions such as keeping its staff busy during slow periods rather than risk losing them to other establishments. Professor Dholakia further points out that 5 sites – Groupon, LivingSocial, OpenTable (which I would not have considered a daily deal type site), Travelzoo, and BuyWithMe (I was not familiar with this one), that have the largest market share show no real statistically significant differences in incidence of profitable and unprofitable daily deal promotions. While the sample is smaller than one would like to see the data appears to be pretty rock solid.

Groupon.com and other daily deal sites will end up merely being another advertising vehicle and there’s nothing wrong with that. But if you are like me you might want to question the legs of a prospective $15 billion valuation in its upcoming IPO. Meanwhile Foursquare is sort of under the radar a bit while it builds its platform on what I feel is a better value proposition.

Last month on Kara Swishers excellent AllthingsD blog http://www.AllthingsD.com Liz Gannes reported that Foursquare and Groupon were planning a distribution deal – http://bit.ly/kjuUIA – but no further word has been heard about it. The longer it takes for a deal to happen I think the less likely Foursquare would have interest.

What do you think? Is Groupon a darling or a dud-to-be? How about Foursquare?

I had read about the long overdue M8 rail cars and heard about them from some NY area commuters but until last night on the 9:37 New Haven line train I had only been able to wonder what the fancy new MTA rail cars were really like.

First of all there is a lot of red. Red faux-leather seats, a red floor. Since the New Haven line has red as its base color scheme that would make sense and I imagine any new M-7 rail cars on Metro-North line trains would be correspondingly blue. The train aisles are wider (good) and the seats a bit wider as well. The cars are built by Kawasaki and will replace the current fleet of over 200 M-2 rail cars some of which are nearly 40 years old.

The air conditioning worked well (I have been on a few regular trains recently where there was little or no A/C) and the restrooms (I had to see for myself) were clean. Outside the restrooms there was a little indicator to show whether or not they were occupied or not. I noticed the restrooms received a lot more traffic than is normally the case. I guess people were curious and more comfortable with the new facilities as opposed to waiting to avoid using the train restroom.

While the M-8 trains can reach speeds of 90 MPH my journey took exactly the same amount of time that it always does. On the ancient New Haven line at least I will never expect the trains to approach 90 MPH. There are storage hooks for bicycles in the disabled rider area of each rail car.

There was no Wi-Fi availability. I was somewhat aware of that but held out faint hope that there might be a few cars testing Wi-Fi access. After all on airplanes the Wi-Fi units are relatively heavyweight and thus cause an increased use of fuel. But the airlines are soldiering on offering more and more Wi-Fi connections while flying. I cannot understand why new train rail cars would be built without Wi-Fi access – can you?

There are no power outlets either. How difficult would it have been to install a half dozen power outlets in each car?

There’s no doubt the new M-8 cars are a much needed improvement over the 1970’s and 1980’s cars currently in use. But I cannot help thinking there were a few things left on the drawing board that could have been implemented but were not.

How long will it take before the aura of newness wears off?

If you had not yet heard starting in January of 2012, light bulbs have to be at least 25% more efficient than the ones we’ve been using for years invented by Thomas Edison way back in 1879. Bulbs that have been inexpensive and disposable will be disappearing by 2014. An excellent article last week by Gwendolyn Bounds of the Wall Street Journal http://on.wsj.com/lpUdSB outlines the features and benefits of the new and old bulb technologies.

In our discussions with Chinese companies we’ve explored the idea of helping them bring LED light bulbs into the United States. So far there has been a great deal of hesitancy on the part of the Chinese companies we have met with to lead with LED light bulbs to be marketed to American consumers. Part of the reason is that sales of building-wide lighting systems are substantially larger and easier than selling individual light bulbs to individual American consumers. However we firmly believe (as the article supports) Americans will be VERY receptive to LED light bulbs once the prices come down which they are predicted to do in a relatively short time. It is our belief that direct-to-consumer marketing of LED light bulbs would allow for lower pricing to happen even more quickly.

Compact Fluorescent Bulbs (CFL’s) have been a step in the right direction but as I have noted before (link to your previous blog post) the trace amounts of mercury found in them is of great concern and for the most part they are not dimmable which is a major drawback. That they are odd-looking unless housed in an outer bulb is more of a minor issue.

The current pricing for LED light bulbs are $20-$55 each. This is in stark contrast to traditional incandescent bulbs which are priced at 25-50 cents each or even CFL’s which average $2 to $5. We are talking 100 times the cost here! The life spans of LED are not 100 times as long as traditional incandescent – more like 25-30 times. The annual operating costs of LED bulbs however are less than 25% per bulb as compared to traditional incandescent bulbs.

Once prices for LED bulbs come down into the $10/bulb or less range the idea that they last 25 times longer and use less energy will have people clamoring to buy them. And they will have to come down in price since I wonder about how people will feel when they drop and break a $20 or even $50 bulb. Dropping and breaking a $ 0.50 bulb is mess. Dropping a $ 20 or even $ 50 bulb is a catastrophe!

What would it take for you to ‘switch’ over to an LED bulb? Is there a price threshold? Would you miss 132-year old technology?

They’re everywhere – iPads. On the train to New York City, on planes, all over the globe I see people using them more and more. As yet I have not succumbed to Apple or any other tablet maker.

Part of my hesitancy in general has to do with the monthly charges that come with tablets when not using Wi-Fi. It appears to range from $ 15 – $ 25/month depending on usage. I am well aware of iPad’s Wi-Fi connectivity. I am also aware of the geographic limitations of that same connectivity. Having used an iPad a few times it is an impressive piece of technology.

There are alternatives. The most recent effort is from RIM (maker of Blackberry) called ‘Playbook’. The website ‘Digital trends’ has listed a number of them and reviews have been lukewarm. And the cost for a supplemental data plan from Sprint can be $ 30 per month. PC magazine recently did a review of iPad alternatives – http://bit.ly/l2R0yB, There are indeed a number of options but none really that have been deemed a worthy competitor to the iPad as yet.

At Computex in Taipei Tuesday, some new models were introduced. A company called Asustek offered the ‘Padfone’ to be released in time for Christmas. Already there are countless tablets currently on the market – Dell has a ‘Mini 5’, HP the ‘Slate’, Lenovo the ‘U1’, Archos (I had not heard of this) the ‘Archos 9’, Asustek the ‘Eee Pad Transformer’, Acer the ‘Iconia Tab A500’, Gateway has the ‘EC18T’, HTC the ‘Flyer’, Motorola the ‘Xoom’, Samsung has the ‘Galaxy Tab’, and of course Barnes and Noble has been making noise with the ‘Nook’ which is not really a tablet as it only has WiFi connectivity Many of the newer tablets are running on Google’s Android platform. As for other tablets there are more and I could go on but won’t.
Since I still read newspapers (3 of them daily) the idea that I could get them delivered on my tablet is interesting but then I remember that my wife and I both like to share and read the newspaper in the morning (at least when I am not traveling) and tablets are not really ‘sharable’. And subscriptions to iPad content while less expensive than print content are not all that less expensive.

I don’t see myself watching many movies on a tablet – I simply do not have the time nor interest. It could be useful when traveling and a downloaded movie could be played on the hotel television but I am guessing that hotels are on to that idea and will disallow Fire Wire or connection to the television so as not to cannibalize their usurious charges for in-room movies (really – $ 14.99 for a movie in a small hotel room?).

I’ve seen my associates use the iPad to deliver PowerPoint and other presentations and that’s kind of cool as tablets are much lighter and more portable. But I remain on the fence. Will I really use a tablet? Will it be a replacement for a laptop (you can purchase a foldout keyboard for a tablet so there is a way to not have to type on the screen which seems like a big pain in the neck to me)? Or will a tablet purchase add to the technology I lug around – mobile phone, laptop, extra batteries, cords and such?

I think I am getting closer to purchasing a tablet and at this point the iPad still is the clear front runner. It still bugs me that Apple does not support Flash and HTML5 is still not ready for prime time. But until a clear alternative emerges I am likely to watch the tablet game from the sidelines.

Ok all you iPad and other tablet owners – let me know what I am missing.