Posted by Bipul Sinha in business models, Consumer internet, social media, social networks, Uncategorized.
Tags: commerce, entrepreneurship, social
The fabric that underlies the social Internet is essentially a new web where people are the nodes, connected through a social graph. This ubiquitous people to people connection with real identities has significant implications for commerce and how we transact in the real world. The reduction in information asymmetry in the marketplace and the ability to mobilize people, through the social graph messaging and data, have the potential to unleash peer to peer commerce in a way we have never seen before.
The Rediscovery of Direct Selling Businesses
Everyone has heard stories of Tupperware parties where a group of people gathered in someone’s home for product demonstration, buying and socializing. The social media is giving a new boost to this old business model by enabling the entrepreneurial hosts to invite friends and friends of friends, and gather offline to socialize and transact, using online tools such as Facebook and Twitter. The online and offline recommendation, feedback and validation
reduce the social approval anxiety and the friction in the buying decision. The social graph-enabled direct selling business model is especially interesting for highly demonstrable products such as handbags, jewelries, shoes, home accessories, etc. These products tend to be discretionary and highly correlated with emotions, impulsive buying and discovery orientation. The innovators in this space would foster entrepreneurship by enabling individuals to participate in the value creation and get the rewards.
The Overcapacity Marketplaces
The social Internet is enabling new kinds of peer to peer marketplaces where people can transact on overcapacity. The overcapacity can be in their belongings or skills. Since the articles involved in transactions tend to be
personal in nature, the social graph acts as a lubricant to reduce the friction and cost of transaction. The living space sharing marketplaces such as Airbnb, personal car sharing marketplaces such as RelayRides, meals marketplaces from local chefs such as Gobble, etc. are some of the examples of the overcapacity marketplaces. In each of these, participants are leveraging overcapacity, be it in their homes, cars or skills utilization to create value. These marketplaces empower individuals to run their own business models and make profits accordingly. We will witness the rise of the overcapacity marketplaces as the peer to peer commerce takes off on the back of the social Internet. The unleashing of entrepreneurial imagination and the resulting innovations would help usher in an era of collaborative consumption.
Posted by Bipul Sinha in advertising, Consumer internet, social media, social networks, startups.
Tags: commerce, internet, media, mobile, social, TV
Some observations from Bipul Sinha about the internet and media industry in 2011.
1. Year of Social Utilities
With over half a billion users and open graph integration, Facebook is the Internet with social graph at its core. This is as much of a game-changer (due to a new distribution model based on the social graph) as going from offline to the Internet was in the 90s. A number of startup companies, I call them social utilities, are leveraging the social graph to potentially disrupt traditional online businesses such as dating, e-commerce, travel and recruitment. Yardsellr, Branchout, and Mertado are examples of such companies and we will witness a few scale companies emerging out of this space in 2011.
2. Display Advertising Enters a Golden Era
Innovations in media transaction platforms along with a better understanding of target audience have brought an amazing level of scale and efficiency in display advertising market. The use of data and technology will disrupt the premium, guaranteed media buying segment in the coming year resulting in an open, transparent marketplace for audience-based transactions. This marketplace will help bring price equilibrium to media supply and demand thereby further increasing the marketing budget spent on this medium. Startups to watch in this space are Legolas Media, Krux Digital, and BrightTag, among others.
3. Social Media based Discovery Traffic Breaks Out
In the traditional marketing parlance, Google directed web traffic represents bottom-of-the-funnel users who are ready to take an action now. The aggregation of such high-intent traffic is what makes Google a formidable force on the Internet. However, the emergence of social media in the past few years has created a new web where people are the nodes, connected through the social graph. The traditional advertising formats such as display lack both context and intent to be effective in the social media environments. New advertising platforms are emerging to enable advertisers to leverage engaged followings and connections on social media for brand and discovery advertising. The resulting web traffic represents top-of-the-funnel users who are interested in learning more about the products/services, but not ready to commit just yet. This discovery/intent web traffic will grow fast in the coming year to become a significant source of users/customers.
4. TV Goes Social via Mobile Devices
Since the advent of the Internet, media has been abuzz about web-connected living room. There have been several unsuccessful attempts to bring the web to TV, but the user experience hasn’t matched the lean-back, simple remote controlled TV watching. The new-generation mobile devices such as iPhones and iPads could bridge the gap between the web and the TV, and make TV watching a truly social experience. A number of startups including Peel, Umee, and Miso are attempting to turn this vision into reality and the implications are huge since the winner would essentially influence the content promotion and consumption. I believe that TV will finally go social in the coming year and we will witness a breakout company in this space.
5. Online-Offline Commerce Accelerates
The astronomical growth of Groupon and LivingSocial* in the past two years heralded the integration of local businesses into the efficient marketing machine of the Internet. This online-offline commerce trend will accelerate in the coming year as more startup companies figure ways to leverage location capabilities of the smart phones to drive foot traffic to the local businesses. This acceleration would largely be driven by discovery via location based social experience sharing. The explosive growth of Instagram is an early sign of the experience sharing trend and we will witness a whole lot more in the coming year.
The New Year will create tons of opportunities. Are you ready?
*A Lightspeed Portfolio company
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