This is an excellent example of how the niche travel industry market is leaveraging the longtail. Well worth a read.
via Brian J. Perkins
Gone are the days of an organisation having total control over the marketing information that is placed on websites. What if I told you that the majority of your companies marketing was done by people outside of the organisation. Scared?
With the dot.com bust a number of start up companies went under. This forced IT professionals to develop new models to making the internet profitable. A new revolution of how users would engage the internet was born. The era of Web 2.0 had arrived. Web 2.0 applications provided a platform that enabled collaboration and empowerment to its users.
This paradigm has been coined Harnessing the Collective Intelligence by Tim O’Reilly. There are two key principles that allow this process to prosper. The first key principle is that the users add value. Through the users participation on the web 2.0 platform by creating content, uploading and sharing their ideas and thoughts they are can both directly and indirectly add value.
The second principle is that network effects magnify this value.
Web 2.0 thrives on network effects: databases that get richer the more people interact with them, applications that are smarter the more people use them, marketing that is driven by user stories and experiences, and applications that interact with each other to form a broader computing platform.
By involving users both implicitly and explicitly the interaction will become more meaningful and enjoyable. Web 2.0 technologies should facilitate emergence by allowing the particular application to transform to suit the users needs. The ability for the application to be fluid and less structured will enhance the experience by the users. Web 2.0 applications have been developed to allow users to create web pages and content with little or no understanding of HTML.
Foursquare is a location-based social networking service which is avaliable on smart phones to allow its users to “check-in” to venues they are currently at. This allows users to share their current location with other users they are connected with their foursquare account. There is also a game aspect to the service which allows users to receive reward points and “badges” for each check-in they do. For users check-in the most to a venue, become the “mayor” of that location. Users are also able to leave comments on a particular location they have check-in at. Some businesses have embrassed this social networking service by providing specials and discounts to the “mayor” or other users of foursquare.
Businesses have seen the advantages of customers using foursquare as it shares their business name with other users of the platform and lets them know if they frequent a particular location (eg: coffee shop) which in turn may attract further foursquare members to visit, especially if a positive comment is left
The face of buisness marketing has changed with the use of social media. The inaugural Nielsen-Community Engine 2010 Social Media Business Benchmarking Study found that 70 per cent of all Australian businesses intend conducting some form of social media activity this year, compared with just 40 per cent in 2008. (read more here).
Users that connect on platforms such as foursquare can read people’s personal opinions on a particular business which could influence a customer’s decision more than having that customer exposed to a traditional marketing campaign.
Businesses need to use platforms such as foursquare to connect with these niche markets to discover what the perception is of their buisness. It is a great source of information and is another way that businesses can market to a specific customer base.
Start up costs for an online business no longer require massive capital outlay as they once did. Lessons learned from the dot.com bust as well as the commoditization of hardware, bandwidth, and software have driven prices lower. The introduction of enterprise cloud computing and shift of data storage into the cloud has provided a viable alternative which is both efficient and cost effective.
Companies can now operate in a more cost effective way which helps to support lightweight and scalable business models. By choosing open source software as an alternative to commercial products along with cost effective marketing (network effect) and hardware means that there no longer needs to be big expenditure into large development teams.
Open source software such as LAMP which stands for;
* Linux (operating system),
* Apache (HTTP Server),
* MySQL (database software) and,
have allowed businesses to create application servers at virtually no cost.
What businesses need to do is start out and test their business concepts in a way that gets them to market fast, with a proof of concept. It’s what some people call ‘fail fast’. If you have an idea that sucks, find out that it sucks fast. That is what the LAMP stack lets you do (Lohr, 2005).
By Livingstone providing his own material free for download it created a massive interest with web designers. Some of these designers began uploading images of their own. Livingstone then polled the growing iStock community to find out if people would support paying for images.
In 2002, iStock began selling credits. Now you could get a high-quality image for under a dollar, and the artist who contributed it got paid a royalty.
It was an entirely new way of doing things. Some people called it the birth of ‘microstock‘.
By maintaining reasonable user costs Livingstone encouraged participation, which in turn helped foster growth, community, and ultimately user generated data as part of an ‘Intel Inside’ data strategy. iStockphoto was designed with strategic and tactical choices which enabled future scaling as the business grew.
By creating a diversified revenue model, including subscription and premium services, companies can build long-term growth and stability as proven with iStockPhoto.
Thinking of running a business online? Well what if I told you that focusing your sales on a small number of products was not the way to go? What if I told you that to gain your advantage over a bricks and mortar competitor you would need to sell less of more! No I am not crazy, I am referring to the theory of leveraging the longtail which was coined by Chris Anderson, the editor in chief of Wired Magazine.
The first graph is an example of the Pareto principle which is also known as the 80-20 rule. In a business context it suggests that 80% of your sales comes from 20% of your your products. Chris Anderson argues that as demand shifts down the tail, the effect would diminish.
The next below is a visualisation of the effect of leveraging the longtail. According to Anderson’s long tail blog, over the course of time if you grow the tail portion of graph,
the potential aggregate size of the many small markets in goods that don’t individually sell well enough for traditional retail and broadcast distribution may someday rival that of the existing large market in goods that do cross that economic bar.
The Long Tail theory suggests that, as the Internet makes distribution easier and technology systems allow consumers to become aware of more obscure products, demand will shift from the most popular products at the “head” of a demand curve to the aggregate power of a long “tail” made up of demand for many different niche products (Wharton, 2009).
Online companies are already identifiying the power of leveraging the longtail and have based their buisness models on this exact theory. Within the music industry platforms such as Garageband and iLike have provided the avenue for smaller bands and musicians to market their product to a specific audience which may not be catered for by the larger commerical music stores such as Sanity Music.
By selling and advertising online through platforms such as Garageband low distribution and inventory costs can allow businesses to realise a significant profit by selling a small volume of hard-to-find items to many customers, instead of only selling larger volumes of a reduced number of popular items (Anderson, 2004). By making their music available online and market it through online communities musicians have the ability to profit from the Long Tail and overcome the limitations of geography and scale. By employing web 2.0 tools to its fullest potential musicians now have the opportunity to discover new markets and expand existing ones, and ultimately expand their fan base.
There is plenty of discussion and debate around online applications versus desktop applications and where the advantages lay.
One of the core concepts discussed with web 2.0 applications is their architecture being in a constant state of “perpetual beta“. Tim O’Reilly discusses this concept saying: “Users must be treated as co-developers, in a reflection of open source development practices… The perpetual beta, in which the product is developed in the open, with new features slipstreamed in on a monthly, weekly, or even daily basis. It’s no accident that services such as Gmail, Google Maps, Flickr, del.icio.us, and the like may be expected to bear a “Beta” logo for years at a time.”
Unlike the release of new versions of products every few years by commercial giants such as Microsoft products that operate in perpetual beta have “come to be associated with the development and release of a service in which constant updates are the foundation for the habitability/usability of a service.” Wikipedia
This means that products operating in a perpetual beta have features introduced almost on a daily basis rather than commercial product where the user must wait for the release of each version for added features and functionality.
Francesco Mapelli believes because users can provide important feedbacks and feature requests, and companies should add and remove tools and services depending on the feedback and their interests. What can (and should) be in perpetual beta is the way small pieces link together, not the small pieces itself.
“Web 2.0 is like LEGO. You have small, simple and colorful pieces, and you build platforms and services with this pieces. You can build something that changes every day, but the small pieces you use must be solid.”
Facebook is an example of a web 2.0 application that is operating in a perpetual beta. Since its inception in February, 2004 the social networking leader has constantly provided updated functionality to its service. In 2010, it released an enhancement to its popular photo feature being high resolution photo uploads and an in-line photo viewer to the News Feed. These features came about as a result of Facebook listening to its customer base on what features they were looking for.
A further enhancement that came about in October 2010, was the drag-and-drop organising. Demonstrated in the video below, drag-and-drop organising is exactly as it sounds; users can now drag and drop albums and photos into any order they desire.
Amazon.com identifed that moving developers closer to both operations and customers creates a feedback loop that improves both quality of technology and service. This same principle was employed by Facebook which has resulted in an enhanced product brought on by the feedback of its customers.
Data, its control and how users will access it will be a driving force in the future. The shift from a single point of access to multiple access points means that users will want to have access to their data at all times regardless of their location.
Look at the shift from watching television through an analog signal, then to digital and now streaming through the internet through devices such as a TiVo and smartphones. Enhancements in networking technology and infrastructure have allowed for this process to happen.
Similarly, using internet banking as an example, the ability for users to conduct banking transactions from anywhere in the world at anytime provided flexibility of service. Users want that flexibility with any interaction online whether it is watching their favourite TV Show, accessing their Facebook page or updating their personal blog.
With the enhancements in technology such as mobile handsets, smart phones, laptops, portable media, gaming consoles and media centers a framework to build and run applications has been created that has the potential to connect users to their data and applications at all times.
Users now and into the future will want this flexibility and have applications that operate above the level of a single device. Tim O’Rielly has referred to this as software no longer being limited to the PC as its only platform. O’Reilly refers to smart phones having the capability to interact with the cloud so that applications on the smart phone such as your personal contacts are able to be accessed from a PC along with other personal data. The devices will interact with other applications online such as Google Maps to provide a richer user experience.
Webinos is an online open source platform currently under development which aims to enable web applications and services to be used and shared consistently and securely over a broad spectrum of converged and connected devices, including mobile, PC, home media (TV) and in-car units.
webinos is an initiative of 22 project partners from across Europe, spanning academic institutions, industry research firms, software firms, handset manufacturers and automotive manufacturers. The project has funding for 14 million Euro and is due to finish in 08/2013.
The video below is a great example of how webinos will allow applications to operate across a variety of devices.
The webinos platform has many key features that will guarantee its success in being future proof.
Firstly, it is an open source platform that offers a common set of API’s. This allows greater collaboration and interaction through the development and enhancement of applications on the wininos platform. The common set of APIs will allow applications easy access to cross-user cross-service cross-device functionality in an open yet secure manner.
Secondly, webinos provides security for its users as part of its quality of service.
Context and security are intimately intertwined: rich context is valuable but without user empowered security it becomes a liability. This dual approach is a hallmark of the webinos approach.
According to webinos, the platform will enable secure access private and nonprivate data and services on the cloud, social web, as well as data on the user terminal.
Finally, the webinos platform will make use of the specific capabilities and resources of the underlying hardware platform. This means that the webinos application servers will provide all the back end processing. This will offload the heavy lifting from edge devices to servers and only return lightweight results to the end user devices to provide a more enjoyable experience for the user.
The webinos platform is an excellent example of where the future of applications will need to be. An interaction of applications across multiple devices that offers flexability, functionality and security. Allowing users to access their data and applications from anywhere in the world at anytime across a multitude of devices will ensure that webinos are prepared well into the future.
Programming languages such as AJAX and HTML5 that help to build our online applications are constantly advancing. As networking speeds develop and the ability for fast data transfer becomes a reality, the door has opened for coders to create software that has increased functionality. Applications that are built using AJAX have increased capability. Tim O’Reilly of O’Reilly Media states that AJAX is a key component of Web 2.0 which incorporates several technologies all flourishing in their own right, coming together in powerful new ways.
* standards-based presentation using XHTML and CSS;
* dynamic display and interaction using the Document Object Model;
* data interchange and manipulation using XML and XSLT;
* asynchronous data retrieval using XMLHttpRequest;
AJAX applications can retrieve data from the server asynchronously in the background without interfering with the display and behavior of the existing page.
These features are designed to make it easy to include and handle multimedia and graphical content on the web without having to resort to proprietary plugins and APIs.
MindMeister is one of the most authoritative and open collaborative mind mapping tools available on the web. MindMeister brings the concept of mind mapping to the web, using its facilities for real-time collaboration to allow truly global brainstorming sessions. Users can create, manage and share mind maps online and access them anytime, from anywhere. In brainstorming mode, fellow MindMeisters from around the world (or just in different rooms) can simultaneously work on the same mind map and see each other’s changes as they happen.
Real-time collaboration is also possible using Skype, if needed. Like most web apps, documents can be readily shared with others. Export options include .rtf, .pdf, .jpg, .gif, .png, .mm, .mmap, and .mind, the default MindMeister file format. Programmers can extend this application through the MindMeister API. Currently there are apps avaliable for download for the Apple iPhone and iPad.
MindMeister allows users to sign up for free but is limited to storing three mind maps at a time. There are two types of paid accounts a business account starting at $9 per month and a premium account that is $59 per year. The business account is more expensive but provides the extra functionality.
Using MindMeister as an alternative enterprise soloution makes sense with the cost and infrastrure to run the software virtually free. This relates to a great Return on Investment (ROI) in using the product.
MindMeister is a multi award winning product that contains plenty of features tailored not only to business but also to students and individuals.
A review conducted by Celine Roque an avid user of mind mapping tools provides a great insight into the capabilities of MindMeister as an alternative to the desktop clients that are avalabile in this space.
Despite the limitations of the free account, MindMeister is a good way to start learning about mind mapping for the curious.
MindMeister is an excellent mind mapping tool alternative to desktop clients. It provides collaboration, sharing, mobility, low cost and plenty of features that enhance the user experience. This is a prime example of where the future of applications will be heading. With programming languages such as AJAX being able to provide such amazing functionality to the online user the gap between desktop clients and online applications is constantly becoming closer.