Archive for November, 2006

Start-Up Dilemma: Ads vs. User Experience

Thursday, November 30th, 2006

From a recent debate came the following question: should an advertising-dependent start-up incorporate ads into the initial product or wait until the site has reached a critical mass before introducing this model, thereby creating a more enjoyable, initial user experience? Phew. That was a mouthful.

In simpler terms, here’s the dilemma:

  • ads + medicore experience; or
  • no ads + more enjoyable user experience

Both strategies have their positives and negatives. The former helps prove out your business model, especially for potential investors. This process may help VCs and angels visualize an ad model, especially with ads already in place. The downside is that the user experience may not be optimal. In addition, with such low levels of initial traffic, minimal revenues will be generated from the get-go.

The latter stratgy may help in developing a more solid, loyal userbase in the early days. Because no ads are lingering and distracting the user, a more enjoyable visit is experienced. And as mentioned above, with low traffic levels, revenues are negligible - thereby making the opportunity cost low. The downside of this strategy is the inability to initially produce a revenue model.

Now, I am extremely biased here as I come from a marketing background. I definitely think that the latter solution is by far the best. Build up a solid, loyal group. Then eventually, when traffic levels hit a critical mass, slowly integrate ads into the appropriate areas without disrupting product use and taking away from the experience. Furthermore, if direct ad sales can be accomplished, this is optimal as well. Direct ad sales not only drive much higher CPMs, but usually provide targeted, relevant ads that the user may want to click on and explore further.

For these very reasons, I would choose to sidestep ads initially, provide a quality user experience, and build a strong following… then crank out an ad model later on. If investors or VCs don’t agree with this model or see value, then I would move on to someone who does.

MappingTheWeb Adds Embedded Chat

Thursday, November 30th, 2006

In order for me to have closer communications with readers, I have added an embedded chat box in the right-hand column (just scroll down a bit and you will see it). In addition, it will also allows readers to interact and chat about new web trends, technologies, start-ups, or perhaps an MTW article.

The embedded chat widget is provided by InCircles, a cool new web app company. I highly InCircles logosuggest checking them out and embedding a chat box wherever you feel a stimulating chat may erupt.

I am going to leave the chat box on the site as long as it is being put to use and people are engaging in conversations. Expect to see me online often enough. Type me a message and I’ll do my best to reply.

Just type in your name followed by the “Enter” key and start chatting.

Talk to you all soon, literally.

Working Hard? Hardly Working…

Wednesday, November 29th, 2006

Have you ever been so bored at work that you wanted to poke yourself in the eye with a pen? Did slamming your head into a desk seem like an attractive option? Well then, you may be thanking me by the end of this post.

Now, put down that pen and stop staring at that desk…

With such lame job duties and a vast ocean of Internet information goodness at your fingertips, it seems very easy and seductive to slip into ‘the trap’. Once you hit Digg, Wikipedia, or other such shiny objects (also known as websites), it is very easy to lose track of time and eclipse 0% productivity levels. Then, along comes your boss, and KAPOW… you get chewed out.

Sound familiar? I bet it does. It’s never happened to me though… well… there was this one time…

The problem here is that your boss can easily spot such obvious websites from over shoulder.

Now what if you could browse all your favourite websites, in text, in a Microsoft Word document… or a look-alike document.

The solution is workFRIENDLY. Just visit the site, type in the URL of your favourite site, WorkFriendly logoand the system spits out a text version in what looks like a Word document. Then you can read up on the latest news, info, and posts from your favourite sites without putting your ass on the line.

Try it out. Then use it at work.

This brought me to a lucrative potential business idea. What if someone created a similar interface, but for an embedded IM client like MSN Messenger or AIM? I bet millions of people would exploit this service and chat from within their ‘Word’ document. These chats would maintain worker morale and keep the boss seemingly happy. Say goodbye to productivity. Slap on Google AdSense and there is a business model to be had.

I can’t wait to get hate mail from bosses and managers. Let the games begin.

Skype Killer?

Tuesday, November 28th, 2006

Jajah logoWhen most people think free VOIP service on the Internet, they think Skype. This telephony service has taken the world by storm. Kazaa co-founder, Niklaus Zennstrom, started the company which sold to eBay for billions – in a very short period of time. The company has a stranglehold on the market. Can anyone possibly bust into this monopoly? If so, Jajah may very well be the David to take on this Goliath.

This start-up has been around for some time, but is starting to gain much deserved acclaim. The concept is very simple, but amazing. Here’s how the service works:

  1. Visit Jajah.com.
  2. Type in your phone number.
  3. Type in your friend’s phone number.
  4. Your phone will ring.
  5. When you pick up, your friend’s phone will ring.
  6. Talk.

Extremely cool. A free phone-to-phone telephone call with no downloads or installations. The idea is so mind-bogglingly simple and useful.

Free landline and mobile calls can be made anywhere in the US, Canada, China, Hong Kong, Singapore, and Taiwan. The free service also applies to landline calls to most European nations.

For a list of low-cost rates to other destination, click here: Jajah rates. The company also plans to monetize by offering premium paid features.

Can it compete with Skype? Definitely. Will it be tough to convince people to switch services? Most likely. The network effect plays into Skype’s hands. But if Jajah can offer a more robust suite of free services and features, it may be able to dethrone the king – or at least take a bite out of the pie.

Do I use Skype? Absolutely. Will I always? Probably… at least for the IM portion. But once Skype-to-phone calls start to cost money in January, I may very well be switching to this free, easy, new service.

Widget Marketing

Monday, November 27th, 2006

The term ‘widget’ has historically been used by university business professors to describe Widgetsa generic item or product to be manufactured and/or marketed by a given company. Today, the term has been given a whole new meaning and a life of its own. As defined by Wikipedia, a widget “is a portable chunk of code that can be installed and executed within any separate html-based web page by an end user without requiring additional compilation. They are akin to plugins or extensions in desktop applications”.

Companies such as YouTube, Slide, and MyBlogLog are several examples of start-ups that have taken advantage of the concept and leveraged the traffic of other sites to drive traffic to their own properties. Many other successful examples exist and continue to appear on a daily basis. I see this as an ongoing trend.

Why is it so effective and widespread within the new web landscape?

  1. This form of viral marketing provides an extremely good ROI based on the resources available. Your ’embedders’ become your marketing team.
  2. Widgets may take time and manpower to develop, but the deployment and embedding cost nothing.

Essentially, widgets are an extremely effective, low cost way of driving qualified traffic and creating brand exposure.

The value proposition for publishers is clear as well: added functionality for websites with no technical expertise needed.

So what are the downsides of such a tactic?

  1. The cost of bandwidth may be siginificant if the widget provides a multimedia experience, as is the case with YouTube and Slide.
  2. The placement of a widget may not always be favourable or provide the best brand presence (i.e. embedding a widget within a porno site).
  3. The level of conversion from widget-use to website traffic may be low. The same can also be said for brand exposure. In other words, if everyone is simply using your widget and exploiting the embedded experience, then this technique may not be so suitable. Website traffic and brand exposure must constantly be improving.

Nonetheless, if your model leapfrog beyond the downsides (which I consider minimal), then this strategy may very well be your Holy Grail. A fit is absolutely necessary – widgets do not work with every business model. But if this fit can be found, serious upside may be just be embedded around the corner.