We've always been pretty transparent about our experiments in the media space here at ArcticStartup. This is because we fundamentally don't believe in one absolute truth nor just a few correct ways to go about creating content and value to our readers. This summer we're going to be experimenting with something new as well. Until the end of July, we're going to be dropping our publishing frequency to just one article a day.
To anyone working in a media company they understand that this is voluntary surrender regarding the race for more pageviews. Then again, we've never been after pageviews, but more people who really engage with our content and our site (and partly, that's calculated by the amount of repeat readers we have and how that increases over time). While many news organisations publish tens of articles a day to keep those pageviews up, we're willing to test this summer how we're going to do with just one quality article a day.
Last week PayPal announced that it has opened its micropayments solution to the public globally. In essence, it's a better way for developers, content creators and publishers to charge for small amounts of content quickly. PayPal has designed this new service to be more useful for small, quick payments instead of the traditional way of purchasing and paying for services with PayPal where you have to leave the original website you were on.
Since the dawn of man, when we first started walking upright, humans have been curious about the world around them. This desire to understand, to learn, drove explorers to visit new lands, the invention of novel ways to communicate across vast distances, and more recently, during the past few centuries, it gave birth to the news industry. Before the internet the only way to find out about what was going on in your little town was to ask around or pick up a copy of the local newspaper. Then radio and television came along, and that too helped people make better use of the city that they called home. With the internet however, we broke all that. The "global village" was created, was then hyped in the late 90s, crashed miserably, and from the ashes rose the "web 2.0" culture where everyone was told that what they have to say is important, critical in fact, to the future success of the medium. That unhealthy attitude ruined the way we consume and create news.
For those of us who grew up in the 80s and 90s, watching how new technologies enabled us to do things that people only dreamed about half a century ago, and then having a front row seat to the transformation that the web has gone through during the 00s, we're now beginning to witness a regression in progress that isn't brought about by what the machines and infrastructure of today are capable of achieving, but instead by the increasing complexity of doing business on the internet and defining what actually has value and what's painfully worthless.
Datamarket is a new Icelandic startup that has just launched their service - a website that gives people access to structured data from private and public data sources. At the moment, they have data only available from Iceland, but they are looking to expand to other countries and areas as well. They have 6 employees and the company was founded in June 2008. The service took 18 months of development before they were able to launch.
As I was looking at through the companies presenting tonight at the ArcticEvening Copenhagen (it's going to be a very good event by the way!), I noticed that almost, if not all of them are business-to-business companies. This is an interesting trend in my opinion as Finland and Sweden are in my opinion more oriented towards the consumer market.
Finland, which I know best, is very oriented towards the consumer market in terms of internet oriented startups. We have our share of b2b startups as well and if we go back a bit we can remember that SteelTeam acquired Christoffer Landtman's CompanyCube operating in the steel industry. Then again we need to remember that Jaiku was acquired by Google so there are acquisitions on both fronts. Unfortunately there aren't many more cases that could be given as examples.
Dopplr has finally found its gold mine, the aggregate user travel date. Dopplr plans to anonymize and aggregate all the recommendations that have been added to Dopplr over time and selling the information to those who want to know where the worlds most frequent travelers are visiting.
This will effectively be big part of their business model in addition to the lead generation that has been in place already for a while (see video below). Dopplr aggregates the travel advice and recommendations in what it calls a Social Atlas. Marko Ahtisaari, Dopplr CEO, calls the Social Atlas "pops chart for the cities of the world", which it really is. In effect Dopplr monetizes recommendations made by friends and like-minded people. Not very much unlike Finnish startup TripSay (see our story here). Dopplr's model is still easier to see working, because it does not depend on sharing individuals' insights, just the locations and the times they were visited.
(video via Informilo)
The iPhone craze is hot as ever, with over 50,000 developers reportedly registered, 800 million apps downloaded, and VC investments being made to pure-play iPhone firms. Some have commented that cream really rises to the top from the hundreds of new apps daily published in the App Store, but there have been even bigger amount of complaints that lots of great apps or games go unnoticed. A big fuss has also been the pricing competition, reducing prices to 0,99 or even below in order get visibility on the Top lists and drive downloads that way. In my opinion, lots of the aspiring developers should look in the mirror rather than criticize Apple or others for their poor performance.
As sexy a business as iPhone and for example games is, it does not mean that normal business rules would not apply -- you cannot just build a product, make it available to the world and expect a huge success. iPhone has been great in that it gives the developers direct access to consumers world-wide. But along with the access comes also a big bunch of responsibilities and headaches. You need to do marketing as well just as in any other business. And that is what most small developers are poor at.
Travellerspoint is a Norwegian community based travel website that both combines wiki-style guides and a personal plaform for content sharing. Travellerspoint offers a relatively good source of information on numerous cities as well as a place to host your travel photos as well as blog about your travels. The site is by all means popular - their tour states they have over 178 000 travellers registered as members.
Despite the success with the site (it gathers about 50-60k uniques a month), they have not managed to integrate the different parts of the site very well. I guess this is something that still lacks in many ways across the industry. I have to say that TripSay is perhaps a step closer to this (then again - they do lack the large community TravellersPoint has). By integrating the services I mean the issue of combining them closer instead of having each service in its own "silo" and not cross-linking for example. I'm sure there is a ton of interesting data to be found from the travel stories of people in the blogs - but the link between these and the wiki-style guides is still missing.
TravellersPoint's business model at the moment is advertising and commissions from hotel and hostel bookings, as one might guess. The interesting question to ask is will these sites gain more traffic as people search deeper online for that best deal on hotels in a certain city or will they suffer from the downturn in the same way as the travel industry in general?
I had an excellent lunch today with Antti Akonniemi, the CEO and founder of Kisko Labs and Ville Vesterinen. Among other things, we discussed business models and how stuck up companies are in their methods of innovation. I mean think about it, at least we've come across a ton of different companies with a ton of consumer internet applications for all sorts of needs. But when we discuss what their business model is - it is usually limited to advertising, freemium, subscription, premium or some sort of mix of these.
However, I had a talk with an anonymous for now, but very successful entrepreneur earlier on this week and we discussed his new business idea about a service concept where the innovation was in the business model for the consumer. The service concept usually would cost around 1500e and nobody in their right mind would pay such money - looking at the current market and the way things are done. However, when you package it with a financial company and a monthly payment plan of 49e the whole scheme is beginning to look a lot more appealing, extremely appealing actually. The beauty of the idea is that my friend's company does not have to take any of the financial risk as it's "sold" to the financial organisation partnering in the business plan. I'm sorry I can't disclose more here, but what I wanted to tell with this example is that with a simple business innovation you can create a lot more value for the consumer and thus create a lot better chance for the concept to fly.
Nevertheless, back to Kisko Labs - they've come up with an interesting concept for enabling new innovation in the Nordics. What Kisko Labs is trying is that they're taking a pro active approach to web development for start-ups. They're willing to do an equity swap in return for web development for start-ups with a great business idea. Kisko Labs has of course a healthy consulting and development business to support this cash flow-less venture. I believe this could prove a killer approach for startups with great ideas in a time when venture money is tight.
If you look at this from a larger scale - the last great business innovation (that flew big time in the consumer market) I saw, was the iTunes 0,99 USD/EUR for a track. You take the existing business and package it differently, economically. But seriously speaking - where are all the business innovations? Shouldn't times like these be good drivers for new packaging of existing and already proven business cases?
Disclosure: We have some small scale innovation going on with Kisko Labs, which we will disclose just before Le Web.
Image by Vermin Inc. (CC: by-nc-sa)
Despite the difficult times, Blyk and Xtract are promoting advertising (at least in a sense) as a revenue model. Blyk's business model is built around advertising as a source of revenue. Blyk confirmed they are going full steam ahead with internationalisation in a recent blog post about entering the Dutch markets in the first quarter of 2009.
In the blog post Blyk refers to an IAB research which states that consumers are sceptical about receiving ads on their mobile but become strongly willing to accept ads on their mobiles when they are incentified. Furthermore the willingness is increased by relevant ads. Something that shouldn't really be all too shocking when you use common sense.
This thinking is confirmed by Xtract in their most recent white paper titled Brands Need People and People Need Brands. Xtract argues that when ads are positioned correctly at the right touch points - they work, and people actually want to see them.
The problem with business models based on advertising usually is that the companies don't understand the difficulties the advertisers face. In SIME Helsinki, organised in September, I had multiple talks with advertisers that all these new innovative startups don't really understand the needs of the advertiser and thus only bringing about banner advertising - is not very appealing. What do you think, are the advertisers up tight or is their discontent acceptable?
Photo by trialsanderrors (CC:BY).
Serial entrepreneur Martin Varsavsky of FON talked to me in London about why he's so excited about Dopplr, the business model (or lack of thereof) and traveling in general. Here's a recent blog post on Dopplr's new set of investors from yesterday.
The mystery Espoo based startup RunToShop that we've covered a few times before has set for launch in September. The core of the company is also coming out in their newly designed website - social shopping through personal recommendations and reviews. RunToShop states themselves as the place to find stuff people really love.
These are of course guessese, but I have heard from a trusted source that RunToShop is not launching in Finland in September. One easy giveaway is the language - it's all in English and they speak English in ...? You guessed it.