Understanding adoption difficulty

The most difficult challenge for a consumer focused product lies in its adoption. Even on the enterprise side, the biggest challenge post purchase is adoption. But exactly how difficult is it?

An answer is available if one rephrases the question to: how long does it take for a habit to form or in other words complete adoption to happen. A team of psychologists at University College of London have answered the question for simple tasks and it stands at a staggering 66 repetitions. This is an average across several kinds of activities and thus only an indicative number when it comes to a specific activity. Furthermore, its for complete adoption – most of us would settle for partial adoption to a level that repeat usage happens.

The most interesting bit is that we now have a number to look at whenever we look at a product or service that forces a change in the user’s routine. We need to ask ourselves – what should we do that the user would use our product 66 times. Most products and service wouldn’t be able to come up to this benchmark and that explains why products requiring deep changes in habits almost always fail.

Read the paper here or a more layman description here.

Jack Ma of Alibaba on Entrepreneurship

Jack Ma speaks during The Future of the Global...
Image via Wikipedia

Indian internet entrepreneurs usually follow the US market and are usually very well acquainted with the key players. However, Chinese market is seldom followed and rarely understood. Its a pity given that it is the single largest market on Internet. Its also a market where the US majors have failed to make inroads and the indigenous companies dominate. Initially it had to do with language difficulties but now it seems more and more about understanding of the market. I am very interested in the Chinese market for two reasons. First, in terms of stage of evolution and historical background, China has similarities with the Indian market. Thus, there are perhaps lessons one can learn. Second, its a large market and therefore offers opportunities.

One of the greatest successful internet entrepreneurs from China is Jack Ma who founded Alibaba. Alibaba started out as a B2B exchange but today includes online retailer Taobao (190 Million users) and online payment service Alipay (300 million users compared to PayPal’s 223 million accounts) amongst other businesses. In spite of such success, very little is known about Alibaba or Jack Ma outside of China.

Here are some interesting quotes form Jack’s interview by Charlie Rose. I’ve selected the ones which show a marked difference in opinion. Do watch/read the whole interview. Quite instructive for Indian entrepreneurs.

(Our core competence is) culture.  It’s not the technology.  I think technology is a tool.

We believe customer number one, employee number two, shareholder three.

it still takes a long time for China to catch up (with US) — the technology is easy, but to catch up with the culture, the innovation, the system takes some time.

We have a couple of million, you’re a rich guy.  We have 10 to 20 million, it’s a capital.  We have over a hundred million, that’s the social resources.

Its also interesting that he characterizes the China opportunity as new solutions and not as just the sheer size of consumer class. I think the same holds true for the Indian opportunity too. Yet another remarkable aspect is that he wants to use his wealth to create 200 Million more jobs and “create hope”. This is quite different from the stance taken by people such as Bill Gates and Warren Buffet. Jack says that he can do a better job of it than the Chinese Govt. If an entrepreneur can say that in China, why not India!

Interesting Reads – 25 June 2010

Reading at Seattle Library on Tetris Chairs

Economics and Finance

The Long Now of Finance update. An ongoing attempt to see what the world of finance be in 10,000 years from now.

Making it fun to save. A very interesting idea to enable savings products on top of the usual no frills account that financial inclusion typically provides.

The average credit rating for corporation has fallen in last 30 years. This mirrors the rise of Private equity, Hedge funds and LBOs. This also means that premium for a higher credit rating should be higher than before. In other words, while the average has worsened, the standards for good vs bad haven’t.

IT

Bank in a Box. A very good summary of the business and operations models on offer in today’s core banking software market

Startup

Celent’s selection of Financial Technology Start ups.

Start ups from the Mobile Breakfast event

Mobile

Apple’s people centric design

Social Media

How many times should one tweet one’s post. Good post and discussion

Science

A more reliable invisibility cloak. Remember Harry Potter?

Research shows that memory improves while walking.

Mobile App opportunity on Nokia Phones

Image from http://www.flickr.com/photos/catmachine/3826156707/

There are new Mobile apps coming out every day but inexplicably almost all of them skip the Nokia platform. This could be an interesting opportunity for other developers who could fill in these gaps for Nokia/Symbian platform which arguably is bigger than iPhone, Android or Blackberry.

Foursquare is a good example of a popular and growing service that doesn’t have a Nokia/Symbian play. Evernote promises to connect “all the computers and phones you use daily” but still skips Nokia/Symbian platform. Just yesterday, Amplify launched a new mobile bookmarklet which again is not available on Nokia/Symbian. These are just examples of many products that are focusing on iPhone, Android, Blackberry, Palm and Windows Mobile (in that order) and skipping Nokia/Symbian.

Surely, Nokia and other Symbian based handset users look at these apps and wonder why they are being left out. Some of them may switch to a iPhone or Android or Blackberry but a large number stays with their device. If you look at the data, what jumps out is that forget abandoning Nokia, more users than ever are buying Nokia Smartphones. As per data from IDC, Nokia shipped 39.3% of the smartphones worldwide in Q1, 2010 which is ahead of Blackberry’s 19.4% and Apple’s 16.1%. Android, Palm etc are not large enough to be mentioned by name and are clubbed under Others. Nokia has maintained its market share while Apple has gained at the cost of Blackberyy. The absolute numbers also tell an interesting story. Nokia shipped 21,500,000 phones in Q1 of 2010 which is 50% higher than their own sales. In other words, if the same growth rate continues for another three quarters, Nokia would sell over 100,000,000 smartphones in 2010 alone! Combine this with the already installed base of Nokia and the number is truly staggering.

This begs the question of why so many apps are ignoring potentially the largest market for apps. Some reasons are:

  1. On the demand side, no of users doesn’t translate to dollars earned. Some users pay more for the app than other users or their click thrus are more valuable. Once segmented this way the US market comes at the top. US market has a far higher penetration of iPhone, Blackberry and Android devices than the rest of the world and therefore, its no surprise that more US focused companies are developing for these platform. Focusing on US makes sense for an early mover as its a huge market by itself. Even Apple focussed its iPhone in US for quite some time.
  2. On the intersection of demand and supply, something interesting has been happening. Apple and now others have promoted the app store heavily. This has led to more iPhone users trying out apps and more developers developing apps for iPhone. Its a virtuous cycle where Apple is ahead and will stay ahead.
  3. On the supply side, Nokia hasn’t made it easy for developers to develop apps. First there is a challenge of multiplicity of devices and multiplicity of OS flavors. Second, Nokia has not painted a clear picture for developers and has also failed to deliver on some of its promises. Third, re-orgs within Nokia doesn’t give confidence to developers about Nokia staying the course or its future directions. Having said all these, these are probably less true now than they were a year ago. Nokia is showing signs of resurgence by launch of new models and platforms

The upshot is that large markets are being ignored because the overall market is huge. A blue ocean if you like. But it will take a lot of effort to own the blue ocean and I think justifiably so. So what are the opportunities for developers looking at this space? I think the following could be some themes:

  1. Meta Apps which put together several of the web services like Evernote, Amplify etc in one app. A good case study is what Nimbuzz has done in social networking services. Such apps would meet the latent demand of Nokia users who do not have such web services on their mobile as an app.
  2. Derivative Apps which build additional layer of functionality on top of another service like Foursquare. These apps would have a better take off in the current scenario as Foursquare itself is not a mobile app on Nokia.
  3. New Apps which are inspired by what is happening elsewhere but are made for unique needs of the target segment. For example, Indian urban users have longer commute times than their global peers and mobile serves multiple needs in these long lonely hours. A good example of an earlier opportunity of similar nature is the Chinese Internet market. Global players were slow in moving in as it was not the first priority and had language challenges. It gave ample time for local innovators to localise what they saw elsewhere and to ramp up. Today Chinese Internet is bigger than English Internet in volume and maybe in some time in value too and is dominated by local players.

Arbitrage Apps, apps that provide the same functionality as another one on another platform, in my opinion is not an opportunity most of the time. First, the original one is always ahead in learning curve due to greater adoption and feedback. Second, in copying the original the developer surrenders mentally and never recovers from that mindset. Third, once the arbitrage app shows traction, the original can start competing by launching on the skipped platform. So, no there isn’t an arbitrage app opportunity.

Image Courtesy: The Mobile Phone 1974 by catmachine

What is your name?

I was recently looking at the business cards that I had collected at the recently concluded NASSCOM Product Conclave and I was struck by the utter confusion that is written on many of them. It seems that many haven’t really thought through the reasons for having a card.

To begin with the name itself has problems. First they have a logo – the brand name of the product they have created – with a nice TM next to it. Second they have the company name which is different from the brand name! Now if you’re a startup and are trying to create awareness of your name, why are you confusing people by giving a second name? Think about it, a business card is not a legal document that requires you to have the name of the company on it. The best, of course, is to have the brand and the company name as the same – say Apple. But let’s say that RoC didn’t give you the name you wanted and you like the brand name more. So, why not just promote that one name that you’ve chosen as your brand?

Another related problem is to not have a tagline or description of the product/offering. Fewer people make this mistake than the ones making the dual name one. But this is as serious. A business card is what you leave behind and should have all the information needed to get its holder remember you. If they need to go to your website to remember who you are then you probably lost a large chunk who decide not to. A few lines on the card helps them save the effort and remember you better. These few lines should cover what your product promises to do. That promise is what hooks people and gets them to call you.

Still another one is to not understand the relative importance of the address. Its probably the least important piece of information on the card and yet it occupies most space. Think about it – first, people want to know who you are (Name and designation) and then what you do (Product Name and product’s promise). When they need to get in touch with you, they would either call you (Telphone no or Mobile no) or send you an email. It is very unlikely that they would turn up at your address unannounced. So why is it taking so much space on the card? Its probably a legacy of an earlier time when email and mobiles didn’t exist. In my book, its the least important bit that can go at the back of the card. The email and phone numbers need to be emphasised leaving enough room for you product name and product promise.

While we are on the subject of business cards, here is another thing which is easy to do but I haven’t seen many do. The next time someone says they’ve run out of their cards, ask them for their email IDs and mobile if they put it on their business card. Note it down or enter into your phone right away.