Thought Starters: venture capital’s global hubs, blockchains and Facebook’s ups and downs and Amazon as more than just a retailer (and we’re not talking about AWS)

Thought Starters provides me with a chance to look through the articles, research and opinion pieces I’ve read, highlighting interesting trends, developments and changes in the world you and I live in. This edition looks at the global hubs for venture capital, blockchains ups and downs, Facebook’s success and challenges and Amazon’s move from retailer to service provider among other trends and insights.

A profile of Martin Prosperity Institute points to the dominance the US has in venture capital with London ranking 7th among metropolitan centres:

Venture capital investment by metropolitan area

There’s been a lot of talk of the potential for blockchain technologies to upend the incumbents in the financial services sector, but the major banks are beginning to make themselves known. Tanaya Macheel profiles different blockchain based initiatives by some of the major American banks which includes attempts to patent innovations in a sector previously associated closely with open source technology:

Blocking off the Blockchain

Keeping on the blockchain theme, Timothy B. Lee profiles the growing pains that Bitcoin is experiencing as growing demand challenges the infrastructure of the technology as it currently stands:

The Bitcoin community is currently locked in a debate about whether to follow that same trajectory: whether to grow quickly at the cost of possibly becoming more centralized. The difference is that the way the Bitcoin network works means that early adopters have an effective veto over further growth. If a critical mass of Bitcoin stakeholders refuse to accept larger blocks, the Bitcoin network could be stuck with its current, limited capacity for years to come.

WhatsApp has done a great job of expanding its reach which has seen it recently pass the 1 billion user maker despite having only 57 engineers. What the mobile messaging platform has been less successful in doing is monetising its user base compared to Line and WeChat as Terence Lee reports although there are indications this is likely to change:

WhatsApp Statistics

Amazon is one organisation that has done a great job of monetising its platform, moving from a bare bones online retailer to a dominant player in retail providing a range of ecommerce related services to third parties (see illustration below). This ties in nicely with a recent Jan Dawson blog post where he stresses the need for providers to absorb as many activities as possible (eg Facebook) or alternatively be on as many domains as possible (eg Uber):

Amazon ecommerce value chain

An interesting recent development in Amazon’s strategy is its experiment with the opening of a physical store in Seattle with reports that they plan on rolling out 300 to 400 stores across the US in the future.

Tal Shachar with Liam Boluk point to the growing glut of content that consumers face across a range of media and with this comes the growing issue of discovery and opportunities for content curation. Sentiments further echoed in a recent post by Benedict Evans:

WeAreSocial have recently published the Digital in 2016 report, providing a range of digital benchmark statistics including internet, mobile internet, social media and mobile app usage along with a range of other indicators. Well worth bookmarking for future use:

It’s financial results season in the US with recent announcements from Apple, Alphabet and Facebook. One of the interesting points to emerge from Facebook’s results is how well the company has transitioned to a mobile first company since 2010 as Alice Truong reports:

Facebook's mobile users as percentage of all active users

Where Facebook has been less successful is in the launch of its Free Basics offering in India. The service looks to offer free access to limited selection of mobile optimised content to mobile users but has come into fierce opposition from net neutrality campaigners in India according to Lauren Smiley’s report:

Free Basics only serves a tiny Facebook-endorsed portion of the Internet to users for free — a “walled garden” as opponents call it — while users must pay to access anything else on the web. As Backchannel has been chronicling for some time, they see it as a violation of the principle of net neutrality, that all things on the internet should be treated the same to preserve competition: no faster data connection for deep-pocketed companies, no charging consumers for some sites but not others, no cordoning off slices of the internet by private companies.

Sometimes the internet doesn’t prove quite as virtual as you’d imagine. Dan Wang profiles the physical delivery of data to servers around the world by content delivery networks (CDNs) as a means of speeding up the delivery of content to internet users in a curious mix of the physical and the virtual:

So instead of using the Internet to transfer big pieces of data, companies have turned to the global freight network. High-traffic websites copy data onto hard drives (which are no bigger than what you’d use to back up your laptop), pack them into cardboard boxes, and then fly them around the world. They can be in a box in the belly of a passenger plane, right beside cartons full of iPhones.

Business Insider profiles the digital habits of American teens. Whilst the sample size of 60 is a far from representative sample, it does provide some interesting insights into the habits of younger consumers:

Most Important Social Networks Among Teens

Alexander J. Motyl warns of a Russian collapse, fueled by an economy hamstrung by its dependence on a declining petroleum market and a political system resistant to change and reform:

The problem for Putin—and for Russia—is that the political–economic system is resistant to change. Such a dysfunctional economy is sustainable only if it is controlled by a self-serving bureaucratic caste that places its own interests above those of the country. In turn, a deeply corrupt authoritarian system needs to have a dictator at its core, one who coordinates and balances elite interests and appetites. Putin’s innovation is to have transformed himself into a cult-like figure whose legitimacy depends on his seemingly boundless youth and vigor. Such leaders, though, eventually become victims of their own personality cult and, like Stalin, Hitler, Mao, and Mussolini, do not leave office voluntarily. Russia is thus trapped between the Scylla of systemic decay and the Charybdis of systemic stasis. Under such conditions, Putin will draw increasingly on Russian chauvinism, imperialism, and ethnocentrism for legitimacy.

Ben Judah recently published This is London: Life and Death in the World Citytaking the approach of a foreign correspondent to reporting on the experience of immigrants in his home city.  His interview in London School of Economics’ lecture series is well worth a listen for anyone interested in the experience and impact of London’s many immigrant communities:

The featured image is a CT mural from Torino published in ekosystem.

Thought Starters

A mixed collection of materials looking at societal trends and the impact of technology on the way we live.

The European Commission has released the Sixth Report on Economic, Social and Territorial Cohesion. The title might not roll off the tongue but it provides a broad range of European statistics including health outcomes, the environment, human development, demographics, crime, the economy and education among other things:

Change in Population The Economist has created an index of where the best country to be born is by looking at a range of quality of life indicators. Care to move to Switzerland?

Where to be born

Retale have pulled together an interactive infographic using U.S. Bureau of Labor Statistics data to providers users with the opportunity to see how the activities of different audiences vary by demographic in the US:

Time Survey

JWTIntelligence has pulled together a report looking at changing family structures in the US. Among the trends highlighted is the evolving nature of the nuclear family, growth in solo living, multigenerational and silver families and the rise of friends as part of family type networks:

The Internet of Things has been getting a lot of attention from the technology sector. The Wall Street Journal looks to pour some cold water on things by pointing out the failure to institute common standards as providing devices interacting that aren’t from the same brand:

Without a common software standard, devices will remain locked into what the German industry experts calls “island solutions”– brands that have a portfolio of products that can talk with each other but won’t be compatible with other brands.

The number of apps available to smartphone and tablet consumers keeps on expanding, but the average consumer only users four according to research from Nielsen:

App Usage

The GlobalWebIndex continues to infographics providing a window into global consumers use of digital.  Recent releases have looked at where WhatsApp, Vine and Pinterest are making an impact:

WhatsApp

Zeynep Tufekci gives an impassioned defence of Twitter in its current form, pointing to the advantages of surfacing content by the human flock rather than an algorithm:

I honestly doubt that there is an algorithm in the world that can reliably surface such unexpected content, so well. An algorithm can perhaps surface guaranteed content, but it cannot surface unexpected, diverse and sometimes weird content exactly because of how algorithms work: they know what they already know. Yet, there is a vast amount of judgement and knowledge that is in the heads of Twitter users that the algorithm will inevitably flatten as it works from the data it has: past user behavior and metrics.

As Twitter broadens its offering to partners by integrating ecommerce functionality with consumers’ Twitter stream with the  trialling of a Buy now button. Whilst the trial is relatively limited in scope at this stage, we can presumably expect to see it rolling out more widely soon:

Research from AOL Platforms points to Youtube as having an important role in introducing products and closing the sale when compared to other social media:

Purchase Funnel

Facebook’s quarterly earning figures released in July pointed to the company as doing a good job of growing its revenues. Analysis from Neustar suggests this position may well continue given that Facebook’s network offering is proving a leader in terms of reach efficiency and average cost although its position is trumped by ad exchanges in the quality of its audience:

Cost Index Online Advertising

Facebook is looking to be more sensitive to consumers’ privacy concerns with the  launch of its  Privacy Checkup to help users better manage their privacy settings:

A report from PageFair points to a 69% increase in the number of consumers using adblock software in the US, raising concerns that online media may be increasingly threatened by declining ad revenues.

Adobe recently released its U.S. Mobile Benchmark Report providing a range of charts shedding light on how users and marketers are taking advantage of mobile. Among the interesting statistics is the use of GPS location data and use of beacon technology:

Location Data

Another interesting data point to emerge from the Adobe presentation is the flatlining of tablet’s share of page views. This provides further ammunition to some commentators’ arguments that tablets are getting squeezed between phablets (smartphones with screen size between 5.01 to 6.9 inches diagonally) and PCs:

Tablet vs Mobile Usage

The growing importance of phablets is given further credence by Flurry’s recently released figures which point to growing market share and TECHnalysis Research’s forecast for forecasted sales in the coming years:

Unit Forecast by Sales notebooks desktops tablets smartphones phablets
Unit Forecast by Sales notebooks desktops tablets smartphones phablets

Apple’s launch of the iPhone 6 and 6 Plus is likely to provide a boost to its smartphone marketshare.  Samsung on the other hand is likely to find itself increasingly squeezed between Apple above and a growing array of Chinese based manufacturers (Xiaomi, Lenovo, Huawei, Coolpad etc) at the mid to lower end:

Smartphone Market Share

Amazon’s Fire Phone was released with much fanfare in late July but the fact that it’s now dropped the price by $200 suggests it hasn’t been a winner among consumers.

Putting this all in perspective is Benedict Evans’ valuable blog post looking at Amazon’s failure to post a substantial profit despite its large revenues:

Amazon Revenue vs Income

Evans points to Amazon’s willingness to reinvest any potential profits back into the business. Some of these investments aren’t going to be an immediate success, but others such as the Kindle have enabled Amazon to gain a market leading position:

Amazon Profit Model

Reddit gets strongly criticised by T.C. Sottek following its failure to take action on the release of nude celebrity photos:

Reddit, he wrote, is “not just a company running a website where one can post links and discuss them, but the government of a new type of community.” So, then, what type of government is Reddit? It’s the kind any reasonable person would want to overthrow.

Tim Harford looks at how we can improve our forecasting, pointing to better understanding probabilistic reasoning, working collaboratively and being open minded as key contributors:

Masha Gessen looks at how the Russian population is being squeezed between declining birth rates and falling mortality rates, pointing towards a loss of hope as a key contributor:

If this is true—if Russians are dying for lack of hope, as they seem to be—then the question that is still looking for its researcher is, Why haven’t Russians experienced hope in the last quarter century? Or, more precisely in light of the grim continuity of Russian death, What happened to Russians over the course of the Soviet century that has rendered them incapable of hope?

The featured image at the top of the page is a PARKER by GoddoG and DelwooD in Biarritz and found on GoddoG’s Flickr stream.

THOUGHT STARTERS: CONTENT THAT HAS GOT ME THINKING 10

The following provides a roundup of some of the articles, thought pieces and content which have got me thinking recently.

I still require some convincing on whether Facebook’s acquisition of WhatsApp makes financial sense. There has been a lot of talk of how WhatsApp will retain much of its management independence and will honour existing privacy arrangements including not collecting user data for advertising. These restrictions will hamstring the service’s utility for Facebook, but the service’s astonishing growth may make the question moot as these figures from Om Malik suggest.

mau-vs-age-final

The Flurry Blog looks at the growth of Android personalisation apps such as Facebook Home and Yahoo’s Aviate as being the next mobile battleground. Rapid growth, albeit off a small base and an interesting counterpoint to the growing attention to mobile messaging.

Growth in Peronalization Apps for Android-resized-600

Casey Research takes a critical view on Bitcoin, pointing out that the system is only as strong as its weakest link with a shortage of security and trust likely to encumber the currency  for the  time being.

Marc Andreessen provides some of the more intelligent commentary on the technology sector and his forecast for the media sector definitely provides food for thought.  As a counterpoint, the Columbia Journalism Review takes a less rosy view of the disruption technology is bringing to the sector.

The Wall Street Journal points to the continuing dominance of bricks and mortar in America’s retail sector – Amazon (and other eCommerce operators) still has plenty of opportunity to take a greater share of the pie.

Bricks and Mortar Retail

Microco.sm has publicly launched its online forum offering,  providing some much needed competition to Vanilla, vBulletin and Invision PB. It’s worth adding that despite all the talk of social media channels such as Twitter and Facebook, forums retain an important role in enabling conversations with customers as profiled in research published in the Journal of Marketing Research and profiled in Convince & Convert.

The Government Digital Service (GDS) has done some great work making Britain’s public services more available online. The GDS‘ dashboard provides a valuable window into what devices consumers are using in the UK.

Activity on GOV>UK

The Financial Times looks at how automation is making growing inroads into white collar employment as software increasingly eats the world.

Technology- Rise of the replicants

Satellites are continuing to make images of Earth more and more available so its intriguing to see video now coming into play as Skybox’s offering comes online.

Most societies at least play lip service to the issue of social mobility, so its interesting to read Professor Gregory Clark’s research which points to mobility as being comparatively unaffected by social policy. We are better off addressing the results of inequality rather than expecting social reforms to enable the move from barrow boy to banker.

Evan Selinger in Wired looks critically at the launch of BroApp and suggests we might be outsourcing our humanity by relying on such tools.

The Wellcome Trust looks through its Mosaic website looks at the health benefits of cycling and what different cities are doing (or not doing) to encourage it.

Southwark Bridge, London by Sarah Maycock/Handsome Frank
Southwark Bridge, London by Sarah Maycock/Handsome Frank

The featured image is Caffarena 86 by Nelio from La Boca, Buenos Aires.

 

Thought Starters: Content that has got me thinking 7

The following provides a roundup of some of the articles and thought pieces which have got me thinking recently.

Pratik Dholakiya profiles different scientific studies into social media, highlighting some important findings. Among the conclusions are the following: consumer to consumer interactions on Facebook assets that are particularly important in influencing sales; the development of viral content should be framed in terms of retaining as well as expanding your audience; and community activities (eg forums) have a crucial role in contributing to sales when compared to traditional media.

GlobalWebIndex have produced a short report looking at the global penetration of different social networks, which are growing fastest, with regional and age breakdowns.

GWI Social Summary January 2014, Global Web Index

Epidemiological methods are used to predict the future decline of Facebook (apparently significant between 2015 and 2017) by researchers from Princeton University. More information on the research over at AllFacebook although there are some dissenting views.

David Meyer points to over eager social marketers as handicapping the newly launched social network Jelly before its even had a chance to build up a decent audience.

asda-jelly-tiger-bread-250-201_250

Joy of Tech provides a wry take on Google’s recent acquisition of the Nest Labs home automation company.

Joy of Tech

Matt Cutts looks at the demise of guest blogging as it becomes more and more associated with spammy SEO.

Marc Andreessen wrote an essay in the New York Times which gives a welcome introduction into the wider potential of Bitcoins particularly in terms of payments. Glenn Fleishman who has already written an article on Bitcoins for the Economist, wrote a response in Medium to Andreessen’s essay calling out various inaccuracies and/0r inconsistencies. Both are well worth a read.

Whilst there’s been a lot of attention on the monetisation strategies of Line, WeChat and other mobile messaging platforms, WhatsApp continues to grow at a rapid rate according to the latest Mashable report.

WhatsApp Doubles Active Users in 10 Months

GigaOm looks at the case of a business person who was outed as transgender in a investigative report in Grantland which may have contributed to her committing suicide. Aside from the ethics of disclosing someone’s gender, it also points to the ability for stories published online to have a much greater reach and impact than the print equivalent. Christina Kahrl has written a follow on piece in Grantland looking at the mistakes made in the publication of the piece vis-a-vis which is similarly worth a read.

Chris McKinlay took an extraordinarily analytical approach to finding a match on OkCupid. The Wired story makes for an interesting analysis of how big data can be used in a more personal setting.

For those of you who have caught Spike Jonze’s new film Her (which I thoroughly recommend), New York magazine has had a look at how far off we are from having a Samantha like virtual assistant.

 

What does 2014 hold? Questions I’m looking to see answered this coming year

There’s been lots of talk about trends and technologies that are likely to affect us in the coming years. The following are some of the questions I’m interested to have answered come this time next year.

Mobile Ecosystem

Will we see Samsung fork its Android offering in 2014? Samsung is developing an increasingly comprehensive selection of alternative mobile apps and services but Google is doing everything it can to raise the price of those who go it alone with Android.

Will we see Xiaomi develop a tangible presence in Western Markets? The company has a strong selection of handsets at competitive prices with growing interest in the brand abroad. Whether this is enough to see it stand out among other players Android (Samsung, HTC, Sony Mobile, LG, Nexus, Huawei, ASUS etc) remains to be seen.

Will CyanogenMod’s open source model enables it to grow beyond its tech savvy Android user base? The mobile operating system recently received funding from Andreessen Horowitz, Benchmark, Redpoint Ventures and Tencent but also faced a setback with Google’s removal of the software installer from the Play Store. CyanogenMod will need to make it as easy and safe as possible for users as the majority of people will be content with the status quo.

What wearable computing forms will break out of the current niche of early adopters? Google Glass and the Samsung Galaxy Gear have received mixed reviews from various commentators but there is a huge opportunity here with a wide selection of potential uses — something that is likely to see a range of form factors rather than a Swiss army knife approach where one tool solves all problems.

Mobile Messaging

Will we see Kik, Line or KakaoTalk make a substantial inroads in Western Europe? WhatsApp has carved out a strong position but the mobile messaging sector is not a category where winner necessarily takes all.

WhatsApp has stated that they’re not looking to diversify beyond mobile messaging, but it will be interesting to see if this changes given the success of Kik, Line and KakaoTalk in developing alternative revenue streams?

Will Snapchat manage to capture the public imagination in a similar manner to the way it has for teens over the course of the next year?

Social Media

Will Facebook’s changes to the News Feed see the demise of virality mills (Upworthy, Buzzfeed et al)?

Will Foursquare’s adoption of push notifications see wider adoption of the location based social network? Manually checking in is a clunky solution and it will be interesting to see whether this change of tack will be enough to gain mass appeal.

Gaming

Will the Steam Machine and Oculus Rift manage to break the stranglehold of Playstation and Xbox have in the gaming console market? Question will be moot if Steam (and their hardware partners) and Oculus VR don’t meet their target of a 2014 consumer release.

Internet and Society

Does the UK public care enough about what they see online to raise a fuss about ISP’s adoption of porn filtering? There’s been plenty of evidence pointing to the systems questionable effectiveness but the general public doesn’t seem to be up in arms about it.

Instore

Will retail brands be willing to invest in the relatively untested Bluetooth 4.0 (iBeacon, Paypal Beacon etc) technologies or will it be a case of wait and see?

Will Apple’s adoption of iBeacon in iOS7 permanently stall the introduction of NFC indefinitely?

Digital Currencies

Will we see Bitcoin become adopted as a method of payment outside the black economy? The recent erratic shifts in value of the currency make it a risky proposition for retailers without the infrastructure to adjust to changing prices.