How to compete with Google and Facebook

This is a really tough time if you are attempting to build a start-up that dreams of competing with Google and Facebook.

I think there 3 reasons for this

  • There’s very little white space to build an app that will get traction. The list of top 10 apps has been virtually unchanged for the past few years.
  • Even if you do — against the odds — Google and Facebook will know (Facebook tracks app activity via Onavo – a security app it owns while Google has Android and search) and either buy you out or copy you.
  • And, even if you manage to survive that, you have to compete against an incredibly sophisticated suite of advertising products.

So, I argue that there are only 2 ways to compete –

  1. Bet on the future (e.g. augmented reality)
  2. Focus on a niche

It is hard to be everything to everybody. So, the best bet is probably focusing on a niche that involves high usage or high  value. That is what most of their successful competitors do.

All in all, I don’t believe this is the time to be building a technology company that seeks to compete with Google and Facebook. As is generally the case with such dominance, it is hard to predict an end to it. It looks certain that we’re going to move toward a world with mixed reality and the existing giants seem to have a strong advantage going in.

But, then again, history reminds us that technology waves don’t play out as we expect. We are currently in an age with an incredibly centralized communications architecture and it is hard to imagine a decentralized world in the near future.

Maybe that’s why the blockchain revolution is one to keep an eye on.

More on my bi-weekly “Notes by Ada project” note on Medium or LinkedIn.

The dark side of engagement | Thinking Product

Today’s post, on retention, was supposed to be the final one in the “building blocks” series where we bring together the various aspects of great technology products and the questions that can guide our thinking through this process.

But, before I spent time on retention, I thought I’d take a detour and share a few notes on the dark side of engagement from the author of a book on the subject, Nir Eyal. Nir Eyal had a thought provoking post on this in which he called out the dark side of aiming for engagement – unfortunately, making things more engaging also makes them more potentially addictive. 

We’ve all experienced this with some of our favorite technology products. They are engaging to the point where we can’t really access them without experiencing that daily hit. His suggestion is to build in safeguards within our products. Here are a few examples –

For example, instead of auto-starting the next episode on Netflix or Amazon Video, the binge-inducing video streaming services could ask users if they’d like to limit the number of hours they watch in a given weekend.

Online games could offer players who cancel their accounts the option of blacklisting their credit cards to prevent future relapses.

Facebook could let users turn off their newsfeeds during certain times of the day.

And rather than making it so fiendishly difficult to figure out how to turn off notifications from particularly addictive apps, Apple and Android could proactively ask certain users if they’d like to turn off or limit these triggers.

We saw real life examples of these issues recently when a 13 year old in China jumped off a building after being denied access to the very addictive “Honor of Kings” game by Tencent. Then, a 17 year old nearly died of cerebral infraction after 40 hours of continuous playing. So, Tencent responded with time limits for anyone upto 18 years of age. Of course, one would hope that companies won’t wait for a tragedy before creating such safeguards.

These examples aside, there have been studies on the negative effects of social networks on teenagers’ self worth and body image. And, we’ve all likely experienced meals where we wished there was a sign like this.

Nir Eyal concludes his post with this –

Of course, tech companies won’t be able to “cure” addictions, nor should they attempt to do so. Nor should they act paternalistically, turning off access after arbitrarily determining that a user has had enough. Rather, tech companies owe it to their users simply to reach out and ask if they can be helpful, just as a concerned friend might do. If the user indicates they need assistance cutting back, the company should offer a helping hand.

With the data these companies collect, identifying and reaching out to potential addicts is a relatively easy step. A harder one, it seems, is caring enough to do the right thing.

For anyone part of a team or company that’s involved in building technology products, this responsibility to care is on us.

Onboarding – Converting new users to power users | Thinking Product

The best definition I’ve come across for the purpose of a great onboarding flow is – onboarding converts new users to power users.

Connecting aspects of great products to strategy again, the growth portion of the strategy targets users who would hire your product to get a job done. The purpose of the onboarding flow is to make it very clear how to do so.

This is the piece of the strategy where great design shines because the onboarding flow answers the two important design questions – i) does the user know what it takes to “win” in the product? and ii) how easy is it for the user to win?

I think it is critical to get onboarding right because it transitions people from interest in your product to your core value props. Fail to this and people leave without giving you a shot.

So, what are the principles behind great onboarding experiences? As I’m a fan of boiling things down to at-most 3 things, my sense would be that great onboarding experiences do the following –

  1. Structure/set expectations and show progress/celebrate success
  2. Ask them for just enough information to get them to value (the aha moment!)
  3. Show them what’s important

Let’s work through each of these with an example.

1. Structure/set expectations and show progress/celebrate success

It is incredibly annoying when you have to keep clicking yes to set things up as a user. While the simple answer is to keep sign up processes as short as possible (and we should all do that), different products have different needs. And, a great way to help users along the way is to set clear expectations.

I love how Etsy does this. You know exactly where you are in the process and what you need to do to make progress. It nails this principle.

2. Ask them for just enough information to get them to value (the aha moment!)

Onboarding doesn’t need to give you 100% of the data you need to deliver on your core value prop. The question is – how can you ask just enough to take them to value? Quora does a great job of this. When you go through the Quora onboarding process, there are 2 key steps – a quick selection of topics that you’d like to follow and also friends you’d like to follow.

Interestingly, they use a modal with what looks like a live feed to show you what success would look like. That’s smart.

They also add a touch of suspense before they deliver the “aha” moment (annotated in the image below by Samuel at useronboard.com).

3. Show them what’s important

Most products collect a bunch of information and just leave their users on their own. Apps that do a great job with onboarding, however, do a fantastic job contextually helping users.

And, slack is a great example of the best practice via its slack bot.

One last thing – these principles focus on what happens once a user gets into your product. But, what about the connection between growth and onboarding, i.e., what happens when a user shows up?

I think good onboarding flows do a good job with the education process right when you sign up. Here’s an example of the sign up process on “Personal Capital.”

The app has 6 nice looking screens that tell you what it does. But, at the same time, you can skip it to sign in, join or ask for a demo. Again, that’s smart.

To summarize –

  • Great onboarding converts new users to power users
  • Great onboarding experiences i) set expectations and celebrate users moving through it, ii) ask for just enough information to take users to value, and iii) contextually show users what’s important as they navigate through the product for the first time
  • Finally, you can lay the groundwork for good on boarding even before a user signs up

From Daimler to Didi

The Daimler internal combustion engine first made its appearance in a 1902 race for horseless vehicles in Paris and looked like this.

It won. It also went on to change the world.

But, it’s time has come. I predict that we’ll see roads dominated by electric vehicles in a decade. And, we’re likely to see roads dominated by global autonomous car fleets owned by leading ride sharing companies after that. Of course, we’re all going to be touched by all this change in ways we can hardly imagine. How we own and drive cars has shaped how we live and how our cities have been built.

That’s the topic of my bi-weekly essay on the car revolution. More on Medium or LinkedIn.

CPG giants and the new e-commerce formula

In May 1913, five San Francisco entrepreneurs (a banker, a wood and coal dealer, a bookkeeper, a lawyer and a miner) invested $100 each to set up the first commercial-scale liquid bleach factory in the United States, on the east side of the San Francisco Bay. The firm was first called the Electro-Alkaline Company and ran into difficult times during the first 3 years.

So, investor William Murray took over the company as General Manager. His wife, Annie Murray, saw the potential in a less-concentrated liquid bleach for home use. She built customer demand by giving away 15-ounce sample bottles at the family’s grocery store in downtown Oakland. The product was called Clorox and the rest, as they say, is history.

The birth of Clorox marked a century of dominance by consumer packaged goods companies. They made their way into our houses by selling us their soaps, tissues and the like, and sponsoring serials in our living room (“soap” operas). Their formula was –

  1. Invest heavily in advertising to build the product’s brand and make customers want to buy it
  2. Invest in retailer relationships so customers can find the product easily when they go shopping

In last week’s “Notes by Ada” note (/essay?), I argue, that we’re reaching the point where these giants are beginning to unravel. The signs are out there – multiple reports about their struggles, disappointing earnings and attempts to buy each other and consolidate. It is no surprise. The formula, if there was one, for succeeding in e-commerce is –

  1. Sell direct to consumers online and cut out all middle-people and costs
  2. Choose to either build a brand using smart digital advertising or build a subscription based relationship

This is another example of “old world” companies facing the chasm and finding the gap between them and technology firms (they’re stuck trying to figure out the cloud while tech firms are implementing machine learning) harder and harder to bridge.

If this piques your interest, the longer version is on Medium or LinkedIn.

Rewarding humane-ness

For centuries, we rewarded prowess of the human physique. Our notion of “work” involved hard physical labor. Then, we began rewarding the sort of intelligence that we came to represent as “IQ.” This was left brained and logical and focused on memory and processing power. Over the past couple of decades, we’ve begun rewarding the right brain — creativity is seen as a powerful asset in today’s information based economy.

What happens in a world where artificial intelligence takes over our most valuable jobs? Aeon has an interesting essay on how the future could reward emotional jobs that are currently grossly underpaid — think teachers and geriatric care workers. It is a compelling read and here are the last three paragraphs —

“There’s an enormous opportunity before us, as robots and algorithms push humans out of cognitive work. As a society, we could choose to put more resources into providing better staffing, higher pay and more time off for care workers who perform the most emotionally demanding work for the smallest wages. At the same time, we could transform other parts of the economy, helping police officers, post-office workers and the rest of us learn to really engage with the people in front of us.

This isn’t something our economic system, which judges the quality of jobs by their contribution to GDP, is set up to do. In fact, some economists worry that we haven’t done enough to improve the ‘productivity’ of service jobs such as caring for the elderly the way that we have in sectors such as car manufacturing. Emotional work will probably never be a good way to make money more efficiently. The real question is whether our society is willing to direct more resources toward it regardless.

Technology-driven efficiency has achieved wonderful things. It has brought people in developed countries an astonishingly rich standard of living, and freed most of us from the work of growing the food we eat or making the products we use. But applying the metric of efficiency to the expanding field of emotional labour misses a key promise offered by technological progress — that, with routine physical and cognitive work out of the way, the jobs of the future could be opportunities for people to genuinely care for each other.”

Being humane is defined as having or showing compassion or benevolence. Previous technology waves have never managed to align wealth and success with being humane. In fact, you could argue that being humane actually worked against you — as a warrior, a property owner, a businessman in the nineteenth and the twentieth century, or a stock market investor.

By having machines do the many things we considered uniquely human, it is possible that the AI wave will force us to reward being “humane.”

It is an outcome I’m rooting for.

(This is an excerpt from a longer post on artificial intelligence on the Notes by Ada project. I’m going to switching the cadence of the Notes by Ada posts from weekly to bi-weekly. More on that later.)

Why you should care about Net Neutrality

The internet is a thing of beauty. And, the regulation that the FCC has planned to roll back Net Neutrality threatens to destroy the foundations of the internet.

This image does a good job illustrating what the net neutrality discussion is all about (thanks to Software Engineering daily).

I have a longer note up on the “Notes by Ada” project on Medium and LinkedIn.

If you only have 3 minutes, here is the summary

  • Freedom of expression isn’t a function of the values of a place but the structure of the information infrastructure. Oppressive regimes led by the likes of Adolf Hitler and Joseph Stalin understood this and used the power of centralized/consolidated information systems to spread propaganda.
  • The 1960s were famous for the rejection of these centralized systems (in this case, the Bell/AT&T monopoly). And, the internet was explicitly designed to be network neutral as a way to fight consolidation. Side note: the internet’s design is a work of art.
  • This network neutrality or net neutrality means that every service on the internet competes on a level playing field and it is users (i.e. us) that choose which internet service wins. This system brings its own set of issues with it but it is better than the alternative.
  • Net neutrality principles are closely aligned with the principles behind the freedom of expression. So, the real question underlying the net neutrality discussion is — how much do you care about freedom of expression?

If you are a user of the internet, you benefit from the many innovations that led to the creation of this incredible connection engine. Like all great human tools, the internet has got its downsides. But, when you put it in perspective, it is hard not to appreciate how miraculous it is.

So, if you care about the internet or the freedom of expression or both, net neutrality should be important to you. If you are wondering what you can do, here are 2 ways you can help –

  • Join the protest starting Wednesday, July 12. Many of the leading websites that you use will share ways for you to lend your voice. Do participate!
  • If you don’t want to wait, no worry — John Oliver has you covered. Just go to “www.gofccyourself.com” and click on “Express” to share your support for Net Neutrality. Even better, check out his excellent episode on Net Neutrality

A final note — thanks to an FCC chairman who is determined to roll this back combined with an all Republican Senate and House, the odds are stacked against us. But, we’ve been here before with SOPA. So, here’s hoping we can reverse this one as well.