On the outcomes of my 2009 predictions

How did I do?

1. Kiva will break $100m in loans

Yes, Kiva broke $100m in November.
2. Microsoft will buy Facebook

No, FB went to the Russians and seems to have plenty of venture cash in the bank despite making relatively small amounts per user.

3. Google will buy Delicious

No. Would be cheap to pick up and they have Schachter on board and social search is their weakness. Nevertheless they opted for deals with Twitter and FB.

4. Microsoft will buy what’s left of Yahoo

No. Is there any point? Will they pick up AOL instead? Why they would want either is a mystery to me but they seem to want it. Maybe search is the attraction.

5. Jerry Yang will leave Yahoo for good

No. He’s still there.

6. Steve Jobs will step down as Apple CEO

No – very glad to be wrong here.

7. Social networking will crack its business model

No. As I said in 1 FB is still making about $2/3 per user per year and having to raise more venture money. More interestingly the insiders are selling their stock.

8. Google’s share of online advertising dollars will fall

No. This is a guess as I don’t have the time to do a reliable analysis.

So, one for eight overall which is pretty bad. In my defence I went for some fairly bold predictions, plus I predicted things which could not be fudged. Stay tuned for my 2010 predictions.

1. Microsoft will buy Facebook
2. Google will buy Delicious
3. Microsoft will buy what’s left of Yahoo
4. Jerry Yang will leave Yahoo for good
5. Steve Jobs will step down as Apple CEO
6. Social networking will crack its business model
7. Google’s share of online advertising dollars will fall

On launching

We launched. It took longer than expected to get things ironed out but we now have a fully working product. So what is it?

Looking for a film to watch

I came up with the idea when I was looking for a film to watch but had no idea what I wanted to see. I ended up browsing my friends’ profile pages on facebook looking for a recommendation. When I saw one of my friends liked Office Space I went and bought the film. This triggered the thought that advertising alongside a list of friend recommendations would be extremely powerful. So we built a facebook application which does that.

It is very simple. You make lists of your favourite films, books, music, TV, gadgets and travel destinations. These are collected together in a way which is easy to browse and when you click on a specific term, a related ad shows for that recommendation. So if you click on my recommendation of the book Disgrace by JM Coetzee, an ad for that book will show.

It takes a step back in the search process from Google. If you have something specific in mind then Google is great. However if you know you are looking for a holiday but don’t know where to go Google doesn’t really help. What you really need is to see where your friends recommend.

Choose Our Cause

Our app is called Choose Our Cause because when we have enough users to start selling ads we will split the revenue with the users who can donate it to a cause they support. I am doing this to support the charity my Dad set up, HiCEP (www.hicep.org.uk). HiCEP is a small charity which runs a school and library in my Dad’s home town of Beled Weyne in Somalia. I wanted to come up with a new way of fundraising for small causes like HiCEP and Choose Our Cause is what we have built.

I could not have done it without my co-founder Paul and our developers Coublis. They are the technical ones and Choose Our Cause would not exist without them. That it works is entirely down to them and the process of building it made me realise how long the distance is between an idea and the working product. It was hard work so please take a look:

http://apps.facebook.com/chooseourcause/

On the decade

Alan Rusbridger, Guardian Editor, has written a column about the 10 most influential technologies in the last decade. I agree with some (Google, Wikipedia) but not others (Spotify, iPlayer) so I thought I would do my own:

Blogger. Out of loyalty to my chosen platform I should say WordPress but I have chosen Blogger. Evan Williams got there first, he had the flexibility of mind to ditch a failing startup to focus on what was getting traction. Unfortunately the bust came along but Williams soldiered through and sold to Google just before the float. Blogger made blogging easy and took it mainstream, it gave a huge number of people the chance to try their hand at writing without the usual gatekeepers. The emergence of blogs has been revolutionary and Blogger played a huge part in that.

Delicious. The great lost opportunity but no less important for that. Delicious showed a completely different way of indexing the web and had the potential to be as big as Google. I have said many times before the sheer beauty of Delicious is that it knows what links I am interested in and who else saved the same links. It is a nascent form of indexing built not on links between pages but links between people. Google is the index built by the web’s authors and Delicious had the potential to be the index built by the web’s users. In fact it was bought by Yahoo who showed a tremendous lack of vision for the company, Joshua Schachter left for Google and it now looks like it could be sold off. Lucky the person who has a bit of insight and picks it up on the cheap. It is still potentially revolutionary after all these years.

Napster. Not the pale music sub service which now bears the name but the original peer to peer network built by Shawn Fanning. Brought a giant industry to its knees and showed the future of media distribution. P2p is not so popular these days but the elegance of the technology and the lack of infrastructure investment mean that it will be relevant for years to come. All it needs is the right business model and someone with the vision to exploit the technology properly.

iPod. Again not the iPhone or the iPod touch, but the original 5gb music player. After Napster came along all people needed was an easy to use, elegant device which could store and play MP3s easily. The iPod wasn’t the first but Steve Jobs spotted a gap where other players were terrible devices and had the vision and boldness to drive his entire company through it.

Freindster. The cautionary tale for Facebook. First mover in social networking but just showed that having users locked up is no defence against new intruders, poor management lost its pre-eminent position but Friendster showed the way early in the decade.

phpBB forums. A true invention of the decade having first been released by James Atkinson on June 17, 2000. In my view this is the most compelling social software out there and I believe this concept will be at the heart of the next generation of social networks. The problem with them at present is that there is no common space. Human beings love to meet and talk on common ground, from the caveman’s camp fire to the local pub. The company to recreate this atmosphere on the web will be huge.

On Courier

Gizmodo reports that Microsoft is working on a super secret new project called the Courier. It is a device comprised of two folding screens, about the size of a book. It looks very cool and people are excited. As this is not a working device yet there are some sceptics who wonder whether it will ever come into existence

The basic idea, a book like device with two folding screens, is a good one. For all the speculation about an Apple tablet being a giant iPod Touch I have serious doubts whether that is what is planned. That would make it something akin to a CrunchPad and I don’t think a tablet like device works at that size. The stated purpose of the CrunchPad is to surf while you are on the couch, but that would be pretty awkward with a large, flat device. A book type orientation with two screens works far better because it mimics an action people are already familiar with. It also has the advantage that you can turn it sideways and use it like a conventional laptop with one of the screens converted to a virtual keyboard, iPhone style.

The success of the Kindle has also shown that there is a nascent market for eBooks. Again I think we are in the book equivalent of the pre-iPod days when there were clunky HD based music players which made it possible to see the future direction but the breakthrough device has not yet come. The Kindle has the same problem as the CrunchPad in that it is a flat, rigid device which is too great a leap from the traditional book reading experience to catch on. I’m going to boldly state now that Apple has no intention of producing a tablet like device and will come out with something far more similar to the Courier. If that happens we will see the stage set for a battle royal between Apple and MS. It will be the first time they have squared off in the same market without one or the other having built up a huge lead.

The advent of these devices has great potential to change the way people access information via the Internet. While you get broadly the same news on the internet it is not as satisfying as reading a newspaper. The design is far worse online, the pages seem cramped and hedged in with ads. This is partly to the size and orientation of computer screens which do not approximate well to the dimensions of a book or newspaper which leads to a lot of redundant space and bad design. Now, with the advent of devices which are further away from a traditional computer and closer to a book or a newspaper there is the opportunity for eBooks and genuine digital newspapers to really take off. It’s as big a shift as the emergence of the iPod was for music, the only difference is that in this case the breakthrough device may come from, whisper it, Microsoft.

On mobile applications

A lot of people have been burnt predicting a big future for mobile applications. The last one to really break out was SMS in the mid-nineties. Since then there have been various stabs at other useful applications but none of them have really stuck. I remember using an early version of mobile internet access in about 2000 and it was terrible. Since then I have stuck to very simple mobiles which do calls and text without having to be recharged every five minutes.

The problem is that the breakthrough of mobile is much trumpeted but has never really delivered. Now, along came the iPhone and forced everyone to raise their game and now we are just beginning to see the start of what is possible. But where we are really seeing useful mobile applications is in the developing world. Mobiles are everything there, because there is no alternative. No landlines and, for most people, no personal web access.

The applications they create have to be simple because the devices have not got the power to support anything more. Despite this restriction mobile banking has taken off in the developing world far better than in the West. Again, this is partly due to people not having access to traditional banking which has meant skipping an intermediate stage of development just as had happened with telephony.

One current hindrance to better mobile applications in the developed world is poor battery life but once that is solved, iPhone levels of usefulness will become more widespread. At the moment smartphones are still a niche pursuit with most people using their phones primarily for voice and text. People do use their phones for photos and music but both are just ported from other devices rather than a new communications technology as SMS was. This is not to say that these functions don’t have potential to do more, just that nothing has yet.

The primary advantage of smartphones is location awareness. The types of services which take advantage of this are still restricted to enthusiasts. A friend of mine added Google Latitude when it came out and found nobody else he knew used it. It will need smartphones to become as ubiquitous as phones before we see things take off but the increasing power and decreasing cost of new devices means that the future of mobile applications is around the corner after a few false dawns.

On browsers

When I first read about the EU’s plans to force Microsoft to ship Windows 7 without a browser I though it was a) idiotic and b) thirteen years too late to save Netscape. It seemed doubly odd in that these days everyone recognises there is actually no money in browsers and Netscape was built on sand. Proof positive that just because something is popular it doesn’t mean that it will make a lot of money. Hotmail, YouTube and ICQ are all examples of this.

That said, browsers remain an important strategic asset as they are the major means by which people access services on the Internet. Obviously this case was brought by Opera so they must have thought there was some benefit in doing it. Unfortunately for them I think the main beneficiary is likely to be Google. Inertia is powerful and when people see the ’select browser’ screen on W7 they are likely to go with what they know. In this case the two most well known brands online are ‘the blue e’ and Google.

So more and more people will become familiar with the Chrome brand which may boost Google’s netbook OS when it finally surfaces. However all the people being given the choice have, by definition, just bought a new PC so it remains to be seen what the long term effect will be. It’s a start though and it will be interesting to see where it goes.

I have the feeling, in any event, that the browser is going to become less important. At the moment it is the application of choice for doing all sorts of things from reading text to watching video but that does not mean that it is the best way to do so. Native applications on specialised devices are the future. An internet enabled set top box would need a peer to peer application for transferring content and a video player for showing it, but a browser?

On Chrome OS

Mike Arrington is patting himself on the back pretty hard for predicting a Google OS when Chrome came out in September 2008. Here’s my post from June 2008:

Google has a consumer brand people know and generally trust. So long as they delivered a clean Linux OS and didn’t do anything daft like invading privacy they would be onto a winrar.

From the official Google blog:

Google Chrome OS will run on both x86 as well as ARM chips and we are working with multiple OEMs to bring a number of netbooks to market next year. The software architecture is simple — Google Chrome running within a new windowing system on top of a Linux kernel.

On microfinance and subprime

There are rare days when you glimpse the World beginning to change. When you see something that only previously existed in your
imagination become reality. Yesterday Kiva began lending in the US and microfinance came to the West.

This is not the first time an innovation had debuted in the developing world only for the West to follow later. The idea for flash memory based low-power PCs began with One Laptop Per Child trying to come up with a computer for poor children. Someone at ASUS realised it was a good idea for everyone and the Eee PC was born.

We are now seeing something similar in finance. The credit crunch has led to the drying up of finance and has particularly affected small businesses. Governments have tried to help but the tools at the state’s disposal are macroeconomic and as such relatively blunt. Interest rate cuts and quantitative easing get money to the right people by flooding the economy with money. This seems to me rather haphazard, by contrast microfinance relies on the judgment of people to get money to the right people.

Kiva is using the same model as it does for entrepreneurs in the developing world. Relatively small amounts are lent through a field partner at 0% interest. Their bios go up on the Kiva website and lenders decide who to lend to. My choice was a cobbler in Manhattan. But Kiva is not the only innovator, Zopa is a commercial p2p lending site based in the UK. It is a great service and slightly different from Kiva in that interest is charged and it is a for profit commercial entity. Zopa is also more focused on personal loans.

What makes microfinance great is not just the money but the thought people give it. In the Kiva model there is a field partner who will deal face to face with the borrower and after that each individual lender is given enough information to exercise their own judgment on who to lend to. This approach is the opposite to the subprime model in which a salesman pushed loans on behalf of a distant monolithic lender who then packaged up the loans with disastrous consequences. The essential problem was that nobody really paid much attention or cared, the loans were cranked out and sold on without any judgment being exercised. For all the pain that has been caused it may be worth it if that model is cleared away so something better can take its place.

On posting from email

I’m posting this via email just to see if the new wordpress feature is working. Who knows? This may get me blogging again.

On a year on

I missed my one year anniversary on 8 May. It is just over a year since I wrote my first blog post On Yahoo. My blogging has waned in recent weeks, primarily down to the amount of things I have had on since the start of the year. Now however my flat is finally redecorated after the flood and our startup is edging towards launch.

It may be that I don’t have the time to blog as much or at all after we launch. What I found interesting about blogging was that it allowed me to think about areas outside what we were then working on (music and p2p). It was the early posts I wrote a year ago which led me to think more about advertising and what was wrong with it online.

My basic thesis was, Google apart, nobody was doing anything different from old media. Grab enough attention then try to cram ads in as many nooks and crannies as possible. Nobody really seemed to be thinking differently about showing people advertising when they found it useful and in a useful context. Everything was geared towards a bait and switch with he who had the most traffic winning.

What is interesting to me is not how many impressions you can show but showing people commercial information in a helpful way. Volume becomes far less important if you can show ads in a way that people actually find helpful. I always thought why interrupt someone when they are trying to do something else? Far better to capture their attention in the moment when they are looking for something. That is what Google does he best and the reason it is so successful.

Even though we were initially not interested in advertising at all blogging allowed me to pursue some interesting thoughts and ultimately led me to the idea which we are now working on as our main project. So, even if I never write another post, writing this blog has been hugely important for me.