Chinwag arranged an interesting event called Freeconomics with the following tagline: ‘Free’ rules supreme in the online world, but is Free sustainable?
This was an interesting event and the panel was very good – more of their points and comment later in the post.
My takes is that we, the users, are going to have to start paying for the services that we use sooner or later. The two main questions facing these services are;
1. When should we start charging the users?
2. How much should we charge?
This is not easy to give general answers. But there are few things that businesses should do and consider. First is to keep the user informed when major changes are coming and not surprise the futures customers – never a good start. Another important thing is to do a business case why your user should pay for your service. What will they get for the money? What are future features are the site thinking to implement? And where do you think your business are heading in general? By charging the users, your site need to become more professional and are you ready for that?
The panel at the Freeconomics event was really good and represented different points of views.
* Nic Brisbourne – Partner, DFJ Esprit
* Azeem Azhar – Managing Partner, Open Capital Partners
* Victor Keegan – Technology Columnist, Guardian
* Charlie Blake Thomas – Commercial Director, Huddle
* Alan Patrick – Consultant, Broadsight
Here are some of the highlights but this does not represent all that was said.
Internet lowers the distribution costs and also competition costs. It also has low entry cost barriers. However there are still costs (for instance employment, rent, utilities, hardware, internet connections) involved with a internet business as there are with a non-internet business. The non-internet business can charge its customers and cover these costs and make a profit. These costs for an internet business are paid for somewhere else be it VCs, equity funding or 2nd jobs.
The user should bare in mind that even if the service is free, that does not mean it is free to operate.
One question raised from the panel was, does it make sense that gmail, hotmail to be free? The guy from YouTube (sorry I did not catch his name) pointed out that gmail is making a profit.
Email creates huge value for all its users and it is is free. Would you pay for your email? Well, I am glad to be gmail user! I want to be with an email service provider that is going to be there for the long term. With all the personal information and history stored on the email, it is a major commitment for me to put so much information in one place.
Google search engine (indexing) is not allowed to access the Guardian or New York Times backlog of published articles and hence they are loosing out in getting higher traffic volumes.
While writing this, I am wondering why can’t the online newspapers reach a similar agreement that Google has with Firefox re search?
YouTube takes approximately 10% of internet bandwidths and that is expensive. User experience goes before anything else within Google. The difficult ahead is to serve the right ads to the right users – but they are close to achieving it.
I would probably be more inclined to click on ads if there was a better targeting. But as it is today, I rarely-to-never click on ads.
The problem with free service is that the users do not understand the value points. Salesforce.com are so successful because they understand what their users will pay for.
This is one of the most interesting points that was brought up during this event by Charles Blake Thomas. However, I do think it needs to be joint responsibility from both the business and its user to understand the value points are not and not be one-sided. For the business to know where it creates value, is to know its users very well. This is a crucial point that applies to any business. But for an non-internet business it is easier to pin-point as a value transaction takes place and also being able to analysis the competition value transactions. It is more difficult for an internet business that is operating in a free-economy to get an understanding of the value it creates and to analysis its competitors. However the advantage is if you are doing business on the internet you are much closer to reach your users as it is ‘only’ an email / blog post/ tweet away from getting in touch with them and start the ever-so-important conversation with your users.
There was no micropayment system when the internet business got going and this is how the free-economy developed so strongly. But to say that today’s generation will not pay for anything is completely wrong as they are happy to pay £3.50 for a ringtone. The mobile phone is now becoming a tool for micro payments. With The Kindle, iPhone and Android and coming Nokia devices, a new micropayment system could arise from that.
For a payment system to work there has to be trust between all the different parties. This is one of the problem in today’s financial crises as the banks do not trust each other nor their customers. I am not sure that I would trust my mobile phone operator to run my micropayment system and also that relationship is of a more short term nature then for instance my email service provider. I would rather have Google run the micropayment system since they already have a trusted system with the ads sell. However if they were to go down the route of Paypal with too many & high charges then no.
Free attracts Freeloaders. For instance, who has not tried the interest free credit card deal? And how many today have a interest free credit card? Freeconomics carries its own death warrant as it destroys its value base.
Time will tell. I think there will be a symbiosis with a free and payment model. This route forwards makes more sense to me. This is still a very young business model and environment but the foundation has been laid. Expectations have been set. Innovation on the internet is progressing in fast pace and it is too much to ask for payment models to be implemented before the user knows what the service will be and what the value of it is. The new business has to prove itself before start charging for the services it provides.
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Barclay credit card company impressed me today.
I am actually quite new customer with Barclay as I ended up with them via my old Morgan Stanley card. Barclay took over Goldfish who took over Morgan Stanley credit cards. I am a firm believer in having credit card that gives me cash back. Amex Blue is another card that I have used since 2001.
Today has been an admin day where I changed over my credit card details with Superline and also signed up for Bethere as BT finally has sorted out my phone line.
Only a few hours later I got this automated call from Barclay asking me to confirm 3 outstanding transactions but before I could hear I had verify some personal information. The voice listed 3 charges and one was something that I didn’t expected so when the option to talk to someone in Fraud dept came up I choose that.
I had to answer a few security questions and after that we could discuss the charges. Superline had put through a charge of £10 and that is unexpected to me as they deduct the money after the invoice has been raised. This is the first in many years that I have had any payment issue with them and I have already sent them an email asking for my money back.
Update: Superline wrote back and said “The only way for us to validate that a payment card is valid is to apply a ‘test’ transaction to that account.To achieve this, we apply what is known as a ‘Pre-Authorisation’ charge of £10.00 against the account. This is not an actual charge against the account and unless that transaction were confirmed by us, no money will ever leave your account.” All good!
Barclay’s Fraud dept said that there is a lot of online fraud going on now and that is why they put a block on my card. It is so important to regular check you debit + credit card statements. My set-up is the the following and this something that works very well for me and perhaps you help you too.
I have online statements rather then paper statements for several reasons;
1. When you are opening your mail coming home from work or the pub you are most likely not be in the right frame of mind to review it properly. You are hungry, want to hang out with your friends or your significant other. You are mostly likely to put that statement away and only pick it up when it is time to pay the bill.
2. When you review your online statement it is because you decided to do so and is more likely to pick up any odd charges. If you think ‘ah I will never get around doing that’, set a reminder in your online calender to email you. Every second Sunday for a 30 minute slot and then hit re-occurring.
3. You can also check your recent transactions rather then to wait for the statement to be issued. That keeps a good tab of your current spending.
4. Storage. The company stores it for you and you do not have in the draw. It is too much in there already, isn’t it? And how often do you really go back and check that draw?
5. It saves the credit card company money and in a perfect world, maybe some of that savings get passed on to you. Just maybe.
Since there is a high volume of online fraud going on at the moment – please check your accounts to make sure it is only your charges going through.
We all have our favorite places that is such a treat to go to.
For the last week, I had family visiting and helping me with some ‘after the move’ things that always occur. It was a great help and I am so appreciative that they came and visited. I needed help with carrying up my 4 moving boxes that arrived from San Francisco – a total of 150 kg. They got a dose of real London life, like with my struggles with BT and understood my frustrations when my order got canceled for the 3rd time. I took them walking around the neighborhood for them to see how quickly a place go from good to bad and back to good again. I also took them to Asda – they had a car and I need to stock up on bulky & heavy items.
Naturally I have showed some of my gems when it comes to good food. In fact I had taken them there a few years back and one of the first things they said when they arrived: We must make a reservation at that great steak place we went to last time.
The place we went to was Buen Ayre in Broadway Market, Hackney.
Buen Ayre is the best place to find a great steak in London that I am aware of. It is a slightly pricey place but this time I ordered a 8oz sirloin steak for £11.50 which is reasonable. The quality of the meat is superb and I was so full afterwards. This place is always full so call ahead to make a reservation. The restaurant is fairly small and has a relaxed atmosphere. I also wrote a Yelp review.
@65hefalumps asked for the details and I felt a tweet would not do this place justice hence the blog post. Since I am back in London and have been gone for a few years, if you have any recommenations please send them my way!
Seesmic lanuches a Facebook app
Posted by Sofia in start-ups
Disclaimer: I have indirect ties with Seesmic
Seesmic launched a Air Adobe application for Facebook like their excellent Twhirl application for Twitter. I have just downloaded and starting using it – too short time to review it. If you want it here is the link:
The Seesmic app is what the Homepage looks like. I think it would be nice if Facebook could revert back to the old layout. I still believe that Facebook is not about status updates and more about sharing information and spending longer periods of time on the site rather then the short snippets of status updates. Twitter is for the better place for status updates.
Facebook; change because of … ?
Posted by Sofia in NOT happy with
Facebook changed their Homepage tonight (my time GMT) – just in time for SXSW conference. They must be lining up some sort of announcement, I am sure. This change feels like change for the sake of it. I can’t see what benefits this brings me, the user. I miss the clear overview of the fun videos, uploaded photos, comments on other people’s submitted things and all of that. It has been pushed away to somewhere else. The new layout feels every so clumsy.
For status updates and snippets of information, I use Twitter. Twitter has cornered this part in the market, they have the users, the ease of adding interesting people and is the market leader. The updates move quickly and they have the twitter search facility which is superb to catch up what is going on.
Facebook is good on other things such as sharing more personal information and also provides more in depth takes on things. I really like to read the links with comments from others. They are moving away from what they are good at and seems to have Twitter-envy blinding them.
I am sure there is a Facebook group against change formed already but I suspect that they will not take a step back from this change.
I landed in London end of last week and it took some days before I could get some internet juice.
I tried the FON network but that was very flaky. And for some reason no coverage in the mornings. I don’t recommend it. They were happy to charge £15 for 5 day passes but there is no guarantees that you will get internet access all day.
My dear neighbor K kindly let me use her wifi until I get things sorted with BT and Bethere.
Sadly I missed the part where the experts were on the stand on The Pirate Bay #spectrial. After listening to today’s feed, I definitely want to catch up with what Professor Wallis testimony.
Today was the defense turn to making the closing arguments. I tweeted:
The defense team were focused, referred to the law and even handed out source material for the Court’s reference. The lawyer who was the best in a certain area spoke for all 4. The plaintiff’s lawyers were all over the place. The one who mostly got a free ride was Monique Wadsted – in my view all she added was confusion and fried sparrows analogizes.
Yesterday she said an statement that I offended me greatly. In her closing statement she showed her irritation that The Pirate Bay had continued their service despite she and her clients had filed a report at the police. She also she pointed out that there were Court cases in other countries had been against bit torrent sites.
She implied that just because of these two actions The Pirate Bay should have stopped and how dared they defy this?
Never mind that they have not been found guilty of anything in a Swedish Court yet. The best reason I can come up with is that she is saying this because she got paid to do so. Even so, it is an awful statement and those kind of practices does not belong in a democracy.
Only Lundstrom’s lawyer broke rank and pointed the finger at Gottfrid Svartholm Varg as he (allegedly) is one responsible for The Pirate Bay site if one had to be found. It is an conflict when you have more then person as defended in trial. Each lawyer needs to look after his client. In this case, I strongly believe that if they stand *united* the stronger they are. I have mentioned this before, this is a marathon and nothing is going to get won or lost at the first trial. This is where the parties put their cards on the table.
Set the date 17 April 09 at 11am, the Court will publish their judgment.
The trial is scheduled to resume 24 Feb 13.00 #spectrial
Posted by Sofia in The Pirate Bay
The first week of The Pirate Bay trial showed us where both parties stand and it is miles apart. They can not even agree on which law should be applicable, the have or have not for the e-commerce law. This law, which as I understand it is based on EU directive, states the service provider is not liable for the information and goods transferred though its infrastructure. In short, it is like UPS cannot be held responsible if someone sends illegal drugs through their service. Another issue this merge of criminal and civil law for this trial which the defense is not happy with. One on the back ground comments from the defense lawyers when the lawyer Peter Danowsky (Ifpi) did his a la American style trial attempt with introducing new evidence during the trial was something like:
I warned the Court this would happened and I was right.
This indicates that there has been pre-trial discussion about this issue and there are a disagreement.
The upcoming week of the trial is even more important then last week. It is now the Prosecutor is going to present us the evidence through his witnesses. He has stated his case and is now going to attempt to back it up his charges.
During this critical cal part of the trial, I am moving back to London next week. This means I am going to have face this very awkward period of being without internet *shudders* I can’t promise that I can do live tweeting. Even though GMT is much better time zone to be in compared to PST to be in sync with the Trial, little good that does if I don’t have internet access. However (it is a good however) my great neighbor K has let me use her wifi before and I might be able to have some access.
But how this great group works, there is no dependence on just one person. There are a lot of great peeps on #spectrial covering this trial. I want to highlight a few but if you think I should add someone, please email me at blog {at} sofiak dot com !
spectrial on twitter is great on keeping you up to day of all of the #spectrial
Here are some good blogs to keep an eye on: xthree and Don’t Panic and projO’s blog (Swedish but I think I read English translation too)
Update: It is now 82 countries. w00t!!
This trial has a worldwide interest and is an issue for many. For the last couple of days, visitors from 79 different countries came to my blog.
Thank you all for coming by!
Ok so the editing for this pictures is not the prettiest, but I have been up all night and it is 6am for me. Plus I have had to listen to that boring Prosecutor 😉 Please forgive me.
Proving intent leads to a political trial?
Posted by Sofia in The Pirate Bay
This has never occurred to me before, in the Prosecutors attempt of proving intent it opens up to a person’s political views. Should really one person have to declare his or hers personal political views in a Court? The answer is no. Frankly, this is so un-Swedish!
Where does one draw the line? For me, I rather be conservative and not allow too much of political view to be talked about in the Court room to be on the safe side. After all, it is ones actions not belief that is on trial.
It is a very slippery slope – and totally unacceptable – to have someone’s political views on trial. I felt very uncomfortable with that Peter Sunde was pushed to declare his views, he was very strong and could resist. But what if someone else is not as strong and much more nervous? I now understand why Fredik Neij was so adamant of saying his interest was purely technological.
When it was mentioned before that this would be a political trial, I thought it was more national politics. Sweden vs US / Powerful Media companies and organisations.
Swedish Courts does not work like US Courts
Posted by Sofia in The Pirate Bay
I am 99% sure this is the way it works. Swedish Courts have their own way of doing things.
On the last day of this Pirate Bay Trial, the Court will say thanks and good-bye for now. No judgment will be delivered in the Court room at the final day.
Instead, the Court will deliberate away from all parties and the public. The Court will publish their judgment and have paper copies ready in 3 weeks time. Tons of journalists – and bloggers I hope – will hurdle around the Courts admin office when the judgment is made public.
Just so you know and don’t have too high expectation for a grand finale of a Not Guilty verdict on the last day of the trial.