Venture Hacks Is A Cool Venture Capital Related Blog

I stumbled across a pretty cool US centric venture capital blog VentureHacks.

I recommend checking out this post “The Entrepreneurial Age”.

Physics, information, hardware, software, marketing, press, business development, recruiting, training and every damn thing a business needs to do is quickly becoming available as a service. And innovations by one company are quickly made available to its competitors by other entrepreneurs.

It is no longer effective to rely on any type of differentiation—organizations must focus on delivering the best product in the world to as many people as possible. All other activities just help them on their way.

 

It is an interesting perspective. A lot of money is being left on the table by New Zealand firms that don’t have websites or think that the government should impose costs on everyone else to prop up poorly thought through business models.

Stuff Nation Sucks But Will Slow Fairfax Death Spiral

Stuff Nation sucks because it is simply depressing content to consume. The submissions to the assignments posted by Stuff Nation editors are a fascinating insight into how the median voter thinks. The comments are even worse. But I think that Stuff Nation will eventually make Fairfax a fortune, relative to the decline of the dinosaur print industry.

One of the differences between Stuff Nation and the blogosphere is that bloggers seem to post more interactive content. We link to data, journal articles, opinion pieces and even source material like interviews if we’re that advanced in our blogging. But we are content production and content consumption outliers – political nerds, news nerds, sports nerds, finance nerds. We are not the target market for advertisers paying the bills of sites like Stuff.

Fairfax have been very clever in getting social media accounts linked to Stuff Nation accounts. Why? Because every time someone gets a submission received, they’ll boost their traffic slightly. It is easier to get thousands of people sending an extra couple of dozen pageviews – we have to remember that not everyone consumes content at the level or frequency of the blogosphere bubble.

There is evidence that when people read a newspaper, they tend to look for something that confirms what they already believe. What executives at Fairfax probably realised is that even though their journalists and columnists were producing content that many people liked, they had nowhere near the level of engagement that 17 Hottest Puppy Outfits would get on BuzzFeed.

Giving ordinary Kiwis a platform to share their opinion is like a self-reinforcing traffic machine. There is also a higher likelihood that the whole process can be manipulated by trolls or astroturfing operations. Considering how lobbyists can get hundreds or thousands of select committee submissions that use the same phrases, it’s possible to get thousands of submissions to things like Stuff Nation past the editors who are unlikely to be paid enough to care.

Stuff Nation and the Stuff website itself are stuck in “post and forget” mode. Other news organisations like Reuters, Quartz and even USA Today have made the move towards “flow” content where there are constant updates throughout the day for different content streams.

Because Fairfax needs to make money from online advertising somehow, anything that increases the amount of content they produce is a good thing. Stuff Nation is a cheap way of getting enormous amounts of additional content available at almost $0 save the additional server and data expenses. It is easily to hide an advertorial when there are 100 posts a day as opposed to 10.

I am sure that Fairfax will eventually ditch the old school Stuff website and integrate everything with Stuff Nation. Sprinkled amongst the assignments and the editorial content from a very small number of Fairfax journalists will be “sponsored assignments”.

Because most people have adblock installed and the constant increase in banner ad supply driving prices down to really cheap levels per CPM, sponsored content – like advertorials – is the only way for them to monetise that content.

How does this fit in with trends in journalism? Well, algorithms can produce stories indistinguishable from what an entry level journalist would produce with the same inputs. There is no need to pay someone $30,000 a year when an upfront investment in IT enables you to get rid of most of your newsroom.

If you are a content producer – journalist, reporter, columnist, editor, whatever – being inside the matrix is likely to be a net negative for your lifetime earnings. Having your own domain name and your own self-publishing projects is likely to be more profitable than locking up all of your content with Fairfax or APN or whoever you want to work for.

Stuff Nation sucks, but it is sadly the way of the future. The economics of online advertising dictate pandering to the lowest common denominator if you are targeting the mass market. The low entry costs for competitors mean that there is no guarantee that Stuff will be one of the top news websites in 2 years time let alone 10 years time.

Fortunately, the economics of the internet permit the long tail – the niche content producers – to earn a decent living. The value of journalism has been determined for 99% of the world’s journalists – it’s worthless unless you are the winner in the market like the NBR, Financial Times, Bloomberg or the Wall Street Journal.

Does Google Reader’s Death Mean Big Data Can’t Be Monetized?

Google Reader is shutting down for good next month, according to a popup window when I logged into Google Reader a few days ago and the absolute fury of everyone who matters on the internet.

I have been using Google Reader for years and it is basically a repository of every blog I’ve read since about 2007. If you could run data analysis on that information you would be able to deliver the most targeted advertising any marketer could dream of.

But here’s the rub: despite the obvious enormous insights into personal information consumption (which obviously informs purchasing decisions, voting decisions and software selection decisions), Google did not think Google Reader justified being maintained while they try and move everything to Google+.

This throws up an interesting conundrum – if big data is so wonderful, and Google, being the big data natural monopoly due to how many free services it has years of usage history on, doesn’t want to let content live outside of the Google+ ecosystem, why would you dump a service almost everyone who matters on the internet uses daily.

I think the truth is somewhere between wanting everyone to migrate their writing to Google+ and not being able to make money off people likely to have installed AdBlock in Chrome or Firefox.

We all know the trope – if you’re not paying for a product, you are the product. Google is in an innovation death spiral, and fancy glasses that most people would never wear because they look retarded will not save the company from the relentless competition in the technology marketplace.

If you are subscribing to my blog in Google Reader or by email, I recommend switching to Feedly. They’ll automatically import your OPML data (all of the blogs you subscribe to) and you can extricate yourself from the Google ecosystem at least with respect to your intellectual diet!

Xero Reaches $1 Billion Market Capitalisation

The sharemarket darling Xero exceeded $1 billion dollars in market capitalisation yesterday.

Rod Drury says that the focus is on growth, not profit at this early stage of the company’s life.

It’s been operating since 2007.

It has chewed through tens of millions of dollars in capital.

It has not earned a profit.

Therefore, it is not a business. It is a misallocation of capital.

Xero might make beautiful accounting software, but it makes ugly financial statements.

It is farming for capital gains, but with Ministry of Science & Innovation grants to help it along.

It is creating jobs – just over 200 – at a cost that makes Russel Norman’s “green jobs” look like a bargain.

Before even turning a profit, it has started to act like a big corporate with its hiring policies.

Rod Drury is the best marketer in New Zealand history.

I have no idea how he does what he does, but it is the ultimate symbol of value transference as long as Xero never goes below its 1.1 million future customer valuation.

When that happens, will the grants taxpayers gave Xero ever be repaid from the millions of dollars Rod Drury & Co have received in selldowns?

2 Dumb Things Advertisers Do Online

We live in the age of permission marketing. If I haven’t indicated I want to hear from your business, your attempts to get in my face don’t work in your favour.

When you have auto-playing flash ads I have to switch off. Nothing is more annoying than if you’re listening to a cloudcast and suddenly something gets around your ad blocker and screams at you.

If you are an advertising executive reading this, you are alienating a whole generation of consumers. You are flushing any brand equity you have down the drain. Auto-playing flash ads are so morally repugnant you’d have to be an idiot to think they will do anything to save your flailing corporate clients.

When you follow up via e-mail or phone when I’m not interested in your product anymore. It’s hard to convince desperate people that I’m not interested. I don’t answer phone calls, rarely return emails and get frustrated when sales people think that because you gave them your email they have license to send you personalised fluff pieces that will be marked spam.

There is a place for email marketing. It requires personalisation, clear explanation of the potential benefits and cost savings. One paragraph telling me you want to chat? You’re doing it wrong.

This is just 2 dumb things advertisers do. They’ve failed to realise that the internet requires a completely different approach to advertising.

Interruption marketing – radio ads, TV ads – might have worked for baby boomers and Gen X. But even non-techie people have ad blockers now.

They grew up downloading so you have to overcome a massive education gap to end up with a willing consumer. Alternatively, you can provide a lot of value and see your product go viral quickly.

Resorting to spammy email marketing with no personalisation save the correct name you put in a form yourself isn’t smart strategy. Nor is paying dying media companies a fortune for auto-playing flash ads or even worse the ones that steal your screen. (APN you do this too often).