Search Is Caveman Speak… And How Our Speech Is Evolving

If you had a log of all the search terms you’ve ever keyed into a search engine, you would laugh in recognizing that each term employs a caveman’s degree of sophistication to express your needs, wants, interests and desires. Now think for a moment who that primal utterance is being communicated to. It’s not Google or Bing, but rather advertisers. The search engines are merely conduits for that conversation. As a consumer, I type my search term and the advertiser responds with an offering (albeit sometimes in optimized rankings as opposed to a paid ad). For as much as I appreciate simplicity, that dialogue is undoubtedly bound to become more sophisticated in the future.

Last week I Tumbl’d about media/tech investment bank LUMA Partners’ depiction of the ad tech landscape. In an effort to further promote this infographic marketing tool, LUMA’s founder, Terrence Kawaja, recorded a webinar titled the Science-ification of Media. It was from the webinar that I pulled this slide which gives a glimpse of what a more sophisticated dialogue between the advertiser and the consumer will look like in the online ecosystem.

purchase funnel

Essentially what he says is that the advertiser won’t need me, as the consumer, to utter my caveman needs via search terms (as much) since the medium of display advertising will be driven by much more intelligent targeting. I will navigate to a page and based on more advanced behavioral and contextual data, the advertiser will know I’m in the market for a motorcycle (a 2001 Triumph Bonneville just in case anyone is brainstorming any gift ideas). As an aside, Kawaja makes the point during the webinar that display is experiencing a shift from art to science which this screen shot doesn’t capture, hence the graph’s key including art and science.

Of course, there arises concerns of privacy issues but above and beyond behavioral and contextual data is opt-in data which immediately mitigates privacy concerns from the get go. There is nothing private about what I’ve made transparent. Though I suppose how long data firms or advertisers could keep this data is up for debate. Nevertheless, this approach of targeting based on interest and preference is already taking place. The best illustration of this exists within the Facebook environment. Not too long ago I indicated that I ‘like’ the Triumph motorcycle brand on Facebook and low and behold, Facebook ads from Triumph and other bike brands began to appear. In my view, this is a great evolution of advertising. I’m not just a demographically ideal target buyer for Triumph, but I’ve actively indicated that I am interested in what they have for sale.

This notion of making my personal interests transparent to advertisers is an exciting one that promises growth and opportunity. This opportunity will be particularly relevant once the information I’ve provided can be utilized across many media destinations. The other component to seizing this opportunity will be gaining wider adoption. I’d gander to say I’m probably an early adopter here and more liberal with the information I share on the web as I understand and believe that more often than not, it makes my web browsing experience a better one. But I have an inkling that just in the way online dating’s stigma has dissipated, so too can the aversion to providing relevant information about oneself indicating their interests. Because in the end, the advertiser really wishes to deliver a more pleasant experience to the consumer anyway. So with that level of mutual understanding, it would seem that ‘conversation’ could evolve from caveman grunts to a sophisticated language with a fluent exchange.

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What Startup America Means For Boston

I’ve spent this Saturday morning catching up on some of the news and analysis of the Startup America announcement from this week. It’s an exciting initiative and it is a great follow up to President Obama’s State of the Union address. I first caught wind of it from my Facebook feed where I watched this video description of the program:

At a high level, it helps to bring national attention to this crucially important component to our economy. Also, its great to see that those working in Obama’s administration are making the distinction between ‘mom & pop’ small businesses and potentially high-impact, scalable small businesses. But what does this mean for the startup community here in Boston?

To add a little context to the question, there is a great piece by Daniel Isenberg in the Harvard Business Review in which he both praises the things that were handled well but also offers some critical suggestions for improving Startup America.  Amongst the suggestions, a key piece in how this all relates to Boston’s community is this quote:

Entrepreneurship is hyper-local in that all “species” of entrepreneurs gather around extremely small “watering holes” to draw from the resources (people, ideas, capital, customers) they need to launch and grow.

The thing is, the watering hole is well stocked here. We see leadership from individuals like David Cancel, Jeremy Allaire, Roy Rodenstein, Dharmesh Shah, Simeon Simeonov, Dave Balter, John Prendergast, Brian Shin (CEO of Visible Measures which is where I work), Jeff Bussgang and many others. We have a culture of innovation that dates back to the fifties with the evolution of the 128 loop. There are tons of success stories such as TripAdvisor, A123 Systems, and EnerNOC as just a few off the top of my head. There are countless venture capital firms in the region and a plethora of angel investors to provide the capital necessary for growing startups. In fact, there was $2.12 billion that was dished out to startups in Boston last year alone which probably doesn’t even account for most of the seed rounds. As for education, well… it’s Boston. I don’t think that needs any further explanation. There is MassChallenge, Tech Stars, Y Combinator, and Dog Patch Labs to name a few of the region’s incubators which is a big component to the Startup America initiative. I’ve seen a great host of events taking place in the past couple years fostering new relationships and entrepreneurial support lead by members of the community like DART Boston and the folks at Microsoft NERD. And I think that focused media coverage from Xconomy Boston, BostInnovation, Scott Kirsner’s Innovation Economy blog on Boston.com and Mass High Tech is another important piece to the ecosystem by documenting the goings on and events that take place so that progress and shifts can be noted.

So I return to the original question of what Startup America means for Boston. From my perspective, I don’t think it will mean a whole lot. Perhaps the most impactful piece will be tax breaks and incentives for entrepreneurs but most of what the program is attempting to do are things that are already established here. There’s always room for improvement in the startup scene, don’t get me wrong but a lot of infrastructure already exists. That’s part of the reason why the MassChallenge was involved in the formation of the White House’s program.

So to expand slightly more on Daniel’s critiques, it would seem that one of the further measures of Startup America’s success will be the ability to truly foster innovation and entrepreneurship in areas of the country that do not have this type of infrastructure already in place.

I do want to end this on a positive note and reiterate that I am very excited and encouraged to see this type of attention from the top levels of our government paid to this sector of industry. And instead of simply patting ourselves on the back for a job already well done here in Boston, I’d love to hear in the comments if there are ways you think we can a) improve things here in Boston further and b) essentially teach, share, or export some of our capabilities or lessons learned to regions that are still fostering their own local innovation economies.

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The ‘Me-Too’ Business Checklist

Who remembers WebCrawler, Lycos, AltaVista, Ask Jeeves (now Ask.com), Hotbot, or Dogpile? For those of you early web users, the names will recall slowly loading pages and web 1.0 graphics. These companies make up a list of search engines that predated Google.  Not to mention Yahoo! which doesn’t require distant recollection. For WebCrawler (the world’s first text based search engine) and Lycos, we’re talking a solid four years of in-market activity before Google entered the scene. People generally scoff at the little companies that hop onto the bandwagon of whatever shiny new market opportunities arise, dismissing them as “me-too” companies. But Google is also a me-too company, and it has certainly proven that me-too companies may not always be a bad idea. Especially given its current 66% search market share and $190.2 billion valuation. So it got me thinking; when do you shelve your business idea in the face of strong market competitors or jump into the fray of a market opportunity as another ‘me-too’ company?

By my way of thinking, it really comes down to a handful of factors. I’ve made a checklist of considerations to mull over before taking the entrepreneurial plunge.

  1. Distinctive Offering – I’ve heard claims that the distinguishing factor to Google’s success was the simplicity of its interface; the stripped down, bare search bar. But looking at the early designs between Google and the other early search competitors, there’s not that much of a difference. The most distinctive component of Google’s offering was PageRank. PageRank along with an incredibly talented crew of engineers made Google’s search experience the best on the web. There’s a lot more to add here which contributed to Google’s success, but I’m going to leave it at that for now.
  2. Capital – If you’ve got more luchini than the next guy,  be prudent but use it to your advantage.
  3. Focus – Yahoo! was in the search business since March of ’95 but hadn’t focused on that aspect of their operation with the laser precision in the way Google did. Moreover, if you’re observing a lack of focus in a market, dive in and apply that laser edge.
  4. Cost – This one is pretty obvious but determine how much it costs the competition to acquire new customers/deliver their services/manufacture their products and figure out if you can do the same thing for less… sustainably.
  5. Timing – If you have an idea in which you’re going to create a micro-blogging platform in which users can shoot off quick bursts of text based information, you’re a little late to the game. You’re probably even late to the social photo-sharing app game already. On the other hand, you might want to hold off if you see competitors jumping in too early like B2B online marketplace Ariba did back in 2000.
  6. Blood In The Water – This is a sexier way of saying ‘if you see poor execution, counter, and attack with great execution.’ Friendster is an example that comes to mind here. Myspace sensed blood in the water as Friendster couldn’t deliver a service that loaded profile pages within forty seconds time which is shameful (and to say it was 2003 is no excuse). Needless to say, Myspace out-executed Friendster at the simple task of processing along with a list of another feature add-ons, etc. [For a good, detailed breakdown of events, this is a good read from the Times]. Then, of course we all know the story of how Myspace got Facebooked which hardly needs further analysis. Another example here would be Plurk aka the Twitter clone. Some of you may recall Twitter’s fail whale which represented essentially the same problem that Friendster experienced. Plurk launched right at the point in which many Twitter users were becoming increasingly frustrated with the amount of down time and were open to switching to a new medium. I personally recall experimenting with both. But this story plays out differently in the end (obviously) as Twitter was able to scale their processing requirements. Tech readers back me up here, but I believe they restructured their database architecture to a sharding design?
  7. Location – For non-web based companies, location will certainly play a roll in sizing up your market opportunity. But how about for web based businesses? I suppose if your zip code is 94301 you would likely have a better chance at success than starting your me-too company in the Yukon.  I’d love to hear further thoughts on this.

A friend of mine recently described a concept he has for a LBS app which was the real catalyst for this post. I thought it was a really interesting idea, and a unique spin on what already exists in the market. Given LBS is one of the newer (but getting old in internet years) ‘shiny market opportunities,’ the major events have yet to play out. Foursquare, Gowalla, SCVNGR, and now Facebook are all active players in the space making for stiff competition. I should know better than to pose questions to my readership base of three visitors, but I’ll pose the question anyway to see if I can drum up some dialogue here. The question is two fold:

  1. Is there anything you would add/remove/refine in the me-too checklist?
  2. Based on this checklist, how would you size up the LBS market opportunity right now?
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