Tesla Powerwall: you and me can live off the utility grid


Last week, Tesla announced the so-called Powerwall. The Powerwall is a home battery that can be charged via solar panels or via the grid when utility is low. By using the Powerwall, electricity can be stored when the sun is out and it can be used when electricity demand is the highest. Furthermore, the battery can be used as an emergency backup in a power failure as well. [1] Tesla also announced the Powerpack, which “is designed to scale infinitely”[2] and is targeted to (large) businesses. However this article will focus on the Powerwall to see whether it’s you and me can that can add value to a more sustainable world.

So, how is the electricity demand distributed? First, in the morning there is a peak in the amount of electricity used. You are not having breakfast in the dark, right? Then, during the day the electricity demand is decreasing rapidly. For instance, less light is being used and devices are using their batteries (thing about mobile phones). Last, the electricity demand is going sky high in the evening. Think about your own evenings: you are using your oven to prepare your meal, then you’re switching on your TV to watch a movie and then you put on multiple lamps to brighten your living room. Tesla’s Powerwall can store electricity produced during the day, to meet the electricity demand peak in the evening hours.

Electricity Demand Distribution. Source: http://www.teslamotors.com/powerwall?utm_campaign=&utm_source=direct-ts.la&utm_medium=ts.la-twitter&utm_content=awesm-inlinelinkcreator
Electricity Demand Distribution. Source: http://www.teslamotors.com/powerwall?utm_campaign=&utm_source=direct-ts.la&utm_medium=ts.la-twitter&utm_content=awesm-inlinelinkcreator

By using Tesla’s brand new product in combination with solar panels, consumers can become fully independent from the utility grid. Consumers can start adding value to the world’s energy efficiency usage themselves! There is no need to point fingers at the big energy providers; you can take action yourself. But does the Powerwall provide the perfect solution for all of us? No, not yet. In an article about the Powerwall, Christopher Helman (Forbes) describes that Tesla’s latest innovation doesn’t make economic sense unless your house is solar panelled and entirely of the grid.[3]

Although the Powerwall isn’t economically feasible yet, the US government announced 30% federal tax credits of the battery price. Furthermore, California has a 60% be-a-fool-to-not-try-this rebate.[4] These rebates will increase the adoption of the Powerwall among people who can afford it and who are willing to live more sustainable. The income generated via the early adaptors can be used for further development of the batteries, which then will lead to decreasing prices. Besides, prices for solar panels are decreasing as quickly as batteries nowadays. Therefore, there is a huge potential market for Tesla: more and more consumers can start adding value to the worlds energy efficiency.

Battery and Solar costs. Source: http://www.bloomberg.com/news/articles/2015-05-01/tesla-s-powerwall-event-the-11-most-important-facts
Battery and Solar costs. Source: http://www.bloomberg.com/news/articles/2015-05-01/tesla-s-powerwall-event-the-11-most-important-facts

To conclude, the introduction of Tesla’s Powerwall allows consumers to start living completely off the grid. Although it’s not economically feasible for the entire world yet, it’s a great first step. Early adaptors and innovation will lead to decreasing prices and more Powerwall users. So from today, let’s start adding value to a more sustainable world together!

[1] http://www.teslamotors.com/powerwall?utm_campaign=&utm_source=direct-ts.la&utm_medium=ts.la-twitter&utm_content=awesm-inlinelinkcreator

[2] Elon Musk during the Tesla Powerwall launch event in Los Angeles on April 30th, 2015: http://www.teslamotors.com/powerwall?utm_campaign=&utm_source=direct-ts.la&utm_medium=ts.la-twitter&utm_content=awesm-inlinelinkcreator

[3] http://www.forbes.com/sites/christopherhelman/2015/05/01/why-teslas-powerwall-is-just-another-toy-for-rich-green-people/

[4] http://www.extremetech.com/extreme/204702-what-the-tesla-powerwall-home-battery-means-inexpensive-time-shifting-for-solar-energy

Customers-first philosophy: Success of e-commerce giant Alibaba


The chairman and CEO of Chinese e-commerce giant Alibaba has a deep appreciation for the role of consumers in navigating a business. Alibaba’s social responsibility includes providing 0.3% of their revenue to environmental protection. His priority list, even surpassing social responsibility, includes businesses concentrating on Alibaba’s beliefs and hopes, the reasons as to why they got into this business and their approach in satisfying consumers, in contrast to focusing solely on profits and margins.

There are vital lessons that other businesses can learn from Alibaba’s customers-first philosophy:

  1. Businesses need to think like their customers.

Many technology innovators accentuate technology and place products above everything else, thus loosing sight of the target audience. Alibaba states that they look at technology through the eyes of their consumers. The great achievement of Alibaba thus far has been achieved through placing consumers first. This can be seen by their acquired knowledge and understanding of the Chinese Market, which has had an effect on their approach to even their product variety. They help small businesses and are adamant about caring more about them than caring for yourself.

“Focus first on customer satisfaction and second on teamwork. Shareholders’ interests come third because they are outcomes, not inputs.”

-Jack Ma, Alibaba chairman and CEO

Alibaba makes it effortless for small businesses to use their website as they have constructed a customer-oriented design that makes it more easy for consumers to seek and buy items on this website.

  1. Businesses should treat their consumers like a crystal ball.

Alibaba is dedicated on having a long-term vision for their business. The company has previously stated that this long-term vision requires them to not be sidetracked by transitory of the economy as it will have its ups and downs.

Alibaba achieves this by being focused on the consumer and watching their actions as they have also predicted the rise of customer-to-business (C2B) corporate strategies for the near future, and predict that consumers will be empowered resulting in fully commanding their needs to companies.

age+of+the+customer

  1. Businesses must create value for their consumers.

Alibaba acknowledges that consumers are more then customer who buy products. The consumer of today is a member of society that is concerned with their environment and social outcomes.

“Your business model, it should create value and be good to society.”

– Jack Ma, Alibaba chairman and CEO

Companies must have this wider lens perspective when it comes to consumers. In this new era of empowered consumers, they select the brands that demonstrate the same ideals that support theirs, making them the values-driven consumers.

References:

Najberg, A. (October 20, 2011) “Jack Ma: Business Model ‘Should Be Good to Society’” The Wall Street Journal (WSJ Blog) Web. http://blogs.wsj.com/digits/2011/10/20/jack-ma-business-model-should-be-good-to-society/

Claveria, K. (December 8, 2014) “What CMOs and CEOs can learn from Alibaba’s Jack Ma” Visioncritical.com Web. https://www.visioncritical.com/jack-ma-customer-centric/

Photo credit:

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<https://communities.intel.com/servlet/JiveServlet/showImage/38-16958-235873/age+of+the+customer.png&gt;

True digitization: ‘Board’ Games 2.0


What should result in quality time for the family or for friends, will most of the times end in crying, quitting, a tense situation after playing and certainly no clear winner: Board games

Uno, Monopoly, Risk, Settlers of Catan are all examples of popular board games that most of the people have heard about or at least played once in their lives. Although, the social aspect of playing it ‘offline’ is very valuable for the users, there is always one scare resource that limits the availability of the players that are needed to start up a game: time. Nowadays people are busier than ever and multitasking is a pre to keep yourself going and being successful. App developers have tried to bring these games to the electronic devices, which differs on success. One of the heard problems is that games are becoming dull over time and after the ‘novelty ‘and ‘introduction’ phase of the app it is very hard to keep interesting for users, especially when the users start to getting annoyed by advertisements, bugs or keep getting the same question every time. Every company wants to earn some money, every app has some bugs, but the problem of keep getting the same question every time has found his remedy: consumer co-creation.

The solution

There is a fairly new application that is called Trivia Crack which makes it possible to play and compete with friends online. The game that is played is a spin-off of the very popular Trivial Pursuit and is available as app on the most popular operating systems or platforms: iOS, Android, Windows Phone, Facebook and the Amazon App Store. The app is currently available in 10 different languages. Trivia Crack has been downloaded more than 130 million times and has been for 66 successive days been the most popular free download in Apple’s App store. However, what differentiates Trivia Crack from similar applications, especially when you realise that there were a lot applications who already tried to penetrate the app market, but failed due to various reasons.

trivia-crack-factory-220x330

Users function as active co-creators with beneficiary effect for themselves as well as for others. In Trivia Crack a large portion of all the questions that are available in the game are created by the users themselves through the’Trivia Crack Question Factory’. Users can create their own questions that are revised by others or by employees of Trivia Crack. However, only the questions that are positively rated by at least 100 other users will get into the final set of questions that are available in Trivia Crack. Since the app is available in 10 different languages, the questions that are added to Trivia Crack’s Question Factory are only submitted in one language. Therefore users can also contribute when they operate as translator for an already existing question in another language. Users should be mostly motivated by intrinsic motivation to become part of the Trivia Crack community. What Trivia Crack did very well is that each co-creator gets extra extrinsically motivation by receiving some recognition/glory and in-game rewards such as power-ups. After each question the original creator and the translator are mentioned by the user that is currently playing his/her game. Since it is possible to link the application with Facebook, the co-creators are featured with their full name and current profile picture when another users answers a question.

Overall, I am very positive about the current application of Trivia Crack. It is very fun to play, the content is increasing in size and novelty each day and the Trivia Crack community adds an extra element to the total experience of the game. However, the extensive review process can also backfire and becomes a negative functionality of Trivia Crack. If your submissions repeatedly get rejected and not end up in the final set, your motivation of playing Trivia Crack and especially being a co-creator will diminish. Next to that, the application should keep innovating and changing to keep the game challenging and interesting. Especially since the company is using the freemium revenue model, the benefits of playing the game for free should outweigh the repetitive advertisements shown after each round or buying the game to have it advertisements free. ($2.99 at the AppStore)

References

*http://androidworld.nl/games/trivia-crack-spel/

*www.triviacrack.com

* https://itunes.apple.com/nl/app/trivia-crack/id651510680?mt=8

Dynamics that affect consumers’ online product opinions


Have you ever given your opinion online? Most likely, your answer will be no, even though current developments in technologies have made it easier to share your thoughts online. The 90-9-1 rule entails that in any group of 100 people, there is on average one person that produces 90% of the content, nine persons that provide 10% of the content, and the remaining 90% never contributes to anything online. That is why the last group is better known as ‘the lurkers’ – they merely observe and follow the contributions of the first 10%. Much research has been going on to study the reasons for being a lurker and how these lurkers can be delurked (e.g. Xia et al., 2012).  Furthermore, the applicability of the 90-9-1 rule is subject to debate and consequently changes to this rule such as 70-20-10 or 80-19.99-0.01 have been proposed. The fact remains that there are still many more people that do not contribute their thoughts online.

What drives this small number of people to publish their thoughts online and how do the previously posted reviews affect their contributions? Moe and Schweidel (2012) studied how previously posted ratings can influence someone’s posting behavior in terms of whether to contribute and what to contribute. They focused on consumers’ posting behavior after they have used the product and formed their post-purchase product assessment. The dataset used consists of 3,681 contributions of 2,436 customers of an online retailer of bath, fragrance, and home products over the course of six months. A sample of 200 products was taken, which included 100 most rated products and 100 additional products which were chosen at random. The online contributions included both a score on a five-star scale and a review text.

The results of their study are the following. In general, Moe and Schweidel (2012) observed that the tendency to post was different across individuals and individuals preferred different posting environments. Individuals who were not used to post product opinions were more positive and exhibited bandwagon behavior. Frequent posters (activists) were controlling the online product rating environment by contributing more negative and differentiated opinions compared to the opinions that were expressed before. Activists increasingly participated over time, whereas the involvement of other group decreased over time. Positive environments led to more contributed opinions, and negative environments decreased the amount of opinions contributed. Additionally, Moe and Schweidel (2012) found that the contributed content was subject to adjustment effects, which entails that the contributed thoughts affect the content of future postings. Furthermore, they found that the posting decision was subject to selection effects that can affect the composition of the posting population (Moe & Schweidel, 2012).

Who we hear onlinePreviously private conversations about products have become publicly available to potential customers and the firm. Before, firms have never been able to get so close to their customers and engage them in such a relevant manner. Increasing customer insight and engagement is highly important in influencing the success or failure of a product. Knowledge gained on customer experiences can aid the firm in driving benefits throughout the value chain by forecasting demand and creating product promotions, among other benefits. Therefore, the previous results are important for consumers and firms. Consumers and firms should take into consideration that online product reviews do not always reflect the opinion of the whole customer base, but rather the opinion of the vocal and more negative activists. In addition, firms should not overreact to negative feedback because there is a high chance that the more positive majority may have chosen not to participate in the online forum. In order to deal with negative feedback, the firms could provide the most silent customers with incentives for posting reviews.

Sources:

Xia, Huang, Duan & Whinston (2012). To Continue Sharing or Not to Continenue Sharing? An Empirical Analysis of User Decision in Peer-to-Peer Sharing Networks. Information Systems Research, 23(1):247-259.

Moe, W.W. & Schweidel, D.A. (2012). Online Product Opinions: Incidence, Evaluation, and Evolution. Marketing Science, 31(3):372-386.

“Style your Smart”: How a not so successful car brand learned us how to successfully generate ideas.


Five years ago, when consumer co-creation was not yet the hot topic it is today, Smart launched a very successful co-creation contest. Do you still remember Smart? The little city-cars, which eventually were not the success that the company had hoped for. In 2010 they launched a co-creation contest in which consumers could participate and make a design for the Smart car. They did not only engage their consumers in making the best design, but also engaged their consumers in a little game so they could help decide which design was the best. This approach of gamification did not only help Smart to engage more customers in this co-creation process, but also led to high quality designs and have strengthen the bond between consumers and the brand Smart.

Schermafbeelding 2015-05-03 om 13.21.27

For companies co-creation has a lot of advantages.  Consumers create value for companies and products. Consumers express their needs, they help the company with (creative) ideas and companies can engage their consumers in deciding which product to launch next.  In February 2010, Smart launched the co-creation contest in which consumers could upload their design for the Smart car. The winner could win a monetary reward of $5000. They made an internet platform with a design tool so that even consumers with no experience in designing cars could participate. Besides that, they directly involved customers with the platform by allowing participants to comment on designs and rate different designs.  In only a few months, 10.000 members uploaded 50.000 designs to the website. There were 600.000 design evaluations and 27.000 comments.

Schermafbeelding 2015-05-03 om 13.23.46

Smart did not only engage their consumers in designing the Smart, but they also thought: Why not let our consumers choose which design they like the most? Unfortunately, these decision-making processes are often perceived as boring by the public. Therefore Smart decided to gamify this contest. Gamification is a way to make things like an idea generating contest more appealing for the public. Games are often perceived as fun so they are a good way to get more engagement from consumers.

After the expert jury filtered out most of the designs, Smart opened the Matching game. If a participant entered the matching game he/she was connected to a different participant. When the game started they were both shown a few designs. The players were then asked to click on the design of which they thought that their co-player would consider it as the best design. If they both choose the same design, they had a Match and they received points. Despite the fact that Smart never promised any reward for the amount of points a player received, in total 2000 games have been played. This led to the following winning design:

Schermafbeelding 2015-05-03 om 13.27.57

If we look at the statistics we can conclude that Smart launched a very successful co-creation contest which had a monetary reward of only $5000. Is the only trick they used to include gamification of the process? Or do you think that gamification is absolutely not a guarantee for succes?

References:
http://mercedes-benz-blog.blogspot.nl/2010/01/open-innovation-smart-launches-design.html
http://media.daimler.com/dcmedia/0-921-658944-1-1278743-1-0-1-0-0-0-0-0-0-1-0-0-0-0-0.html
http://www.smart-design-contest.com
http://www.autoblog.com/2010/01/06/daimler-encourages-you-to-design-your-own-smart-results-vary/

Be My Eyes – A whole cornucopia of crowdsourcing mechanisms


In my last blog post, I already wrote about a new application that smartly makes use of crowdsourcing to benefit all participating users creating a win-win situation combined with a nice touch of gamification. Nevertheless, in that previously described model, the main motivation for users is to convert spare time they have into cash – thus, the motivation behind using the app is clearly extrinsic.

Several scholars have investigated the different kinds of motivation behind participating in crowdsourcing communities. Rogstadius et al. (2011) find that increasing extrinsic motivation such as pay leads to a higher speed of responding and willingness to respond but not to a higher quality of the output while increasing the intrinsic motivation of doing a task (e.g. by framing it as a task where you can help others) can succeed in improving the response quality. Similarly, Pilz and Gewald (2013) compare motivating factors to join for-profit or non-profit (for-fun) crowdsourcing communities and find that extrinsic motivations are much more important to incentivize the contribution to for-profit communities.

One particularly recent example of a new business model that – in my opinion – masters the art of framing to intrinsically motivate users as well as the art of combining different crowdsourcing mechanisms to fully exploit the potential of the crowd to help, design, fix codes and fund an idea, is BeMyEyes.

BeMyEyes is a Copenhagen-based, non-profit start-up and the respective mobile application has just been launched on 15th January 2015. The idea is simple, yet powerful and simply described by the slogan: “Lend your eyes to the blind” (1). More specifically, on the two-sided platform, there are blind or visually impaired people on the one hand who need help to cope with small everyday tasks, and people who can see on the other hand who want to help.

The situation of use for the application is any everyday situation where the remaining four senses that are left to blind people are not enough to master small challenges. Popular examples are reading the expiry date on grocery items, baking a cake, or choosing the right item in the store when the form of the packages is identical. Whenever a blind person faces such a challenge where “a pair of eyes” would come in handy (2), he/ she can easily request help through the application and is connected with one of the over 200,000 helpers registered (1). The technology used is simple as well – the two users described are connected via normal video chat where the blind person directs his/ her camera towards the item in question so that the helper can describe what he/ she sees. That this idea works can be seen in a lot of praise as well as a prize the founding team has won for the most innovative idea (3,4).

What I find particularly interesting about this business model – except that it purely aims to motivate people intrinsically, which seems to work as there are considerably more helpers registered than help-seeking people at the moment (5) – is that it seems to be a toolbox of crowdsourcing mechanisms, leaving me with the impression that the founder of BeMyEyes must have taken this course (Customer-Centric Digital Commerce) at RSM before.

First of all, crowdsourcing is not only used to actually fulfill the business need of helping blind people. Instead, two other instances can be found where crowdsourcing is used at BeMyEyes: (a) the application is based on open source code and programmers around the world are kindly asked to help fixing bugs and improving the code, and (b) the app aims at helping blind people globally, thus it is possible for volunteering people around the world to help translating the app to other languages (2).

Second, looking at the initial funding of the application, we see another aspect of using the crowd – next to official funding by the Velux Foundation and the Blind Foundation in Denmark, BeMyEyes obtained additional funding through crowdfunding on IndiGoGo. As mentioned by Argawal et al. (2013), similar to crowdsourcing as explained above, funders in crowdfunding are motivated by a community feeling and by supporting ideas that they think are good and have a potential to help others. Thus, BeMyEyes not only manages to intrinsically motivate people to use the platform but also to fund it so that the idea could be transformed into a working and helping application.

Since the money of the initial funding will only last until September 2015 (2), BeMyEyes is currently thinking about a future business/ revenue model that will help to sustain the application. Currently, options under discussion are to implement a subscription-based model or to base the app on donations, which would essentially make BeMyEyes an implementer of Pay-What-You-Want (Schröder, Lüer and Sadrieh, 2015).

A final aspect that I found striking because it seems like it has been taken out of a university textbook is how BeMyEyes has also implemented a point system, where users get points for using the platform and helping others to gain reputation. Additional points can be obtained by sharing the application on different media (2), thus creating electronic Word-of-Mouth, which has the potential to reach a high number of people and thus can help the application to grow (King, Racherla and Bush, 2014).

All in all, I really like this business idea because it is exclusively non-profit and has the candid intention to help people and to make their lives easier on a daily basis. For helpers, this application offers the opportunity to help and feel useful without needing to invest a lot of effort. This way, a win-win situation is created without the need to pay anyone for it. What do you think about this business model? Would you like to be a part of this community and help others or if not, why not?

Academic References:

Agrawal, A.K., Catalini, C., & Goldfarb, A. (2013). Some simple economics of crowdfunding (No. w19133). National Bureau of Economic Research.

King, R.A., Racherla, P., & Bush, V.D. (2014). What We Know and Don’t Know About Online Word-of-Mouth: A Review and Synthesis of the Literature. Journal of Interactive Marketing, 28(3), 167-183.

Pilz, D., & Gewald, H. (2013). Does Money Matter? Motivational Factors for Participation in Paid-and Non-Profit-Crowdsourcing Communities. In Wirtschaftsinformatik (p. 37).

Rogstadius, J., Kostakos, V., Kittur, A., Smus, B., Laredo, J., & Vukovic, M. (2011). An Assessment of Intrinsic and Extrinsic Motivation on Task Performance in Crowdsourcing Markets. In ICWSM.

Schröder, M., Lüer, A., & Sadrieh, A. (2015). Pay-what-you-want or mark-off-your-own-price–A framing effect in customer-selected pricing. Journal of Behavioral and Experimental Economics.

Online References:

  1. BeMyEyes Homepage
  2. BeMyEyes FAQ
  3. Article Today.com
  4. BeMyEyes Press
  5. Article TechCrunch

Featured Image:

Screenshot from http://bemyeyes.org/

You do the chic, we do the geek


(1) Concept/brainstorm, (2) design, (3) sketch, (4) mould making, (5) polishing, (6) stone setting, (7) casting, (8) production, (9) quality control, (10) packaging, (11) shipping. That is how jewellery making is supposed to be. But, if it is to Zazzy: That is how jewellery making used to be…

Zazzy removes step 3 to 7 and 9. Besides, they have already taken care of step 1 by setting up templates. So, after designing your own (custom made) jewellery, it is only production, packaging and shipping. I think you already have an idea how they do it… right… 3D-printing.

They describe themselves as the Instagram for jewellery: Instagram is about editing photo’s in a simple and fun way, without the knowledge of photoshop. Zazzy is doing the same within jewellery making, creating “cool stuff” without the knowledge of (1) jewellery making and (2) 3d-printing software: One is able to choose between different kinds of jewellery types/templates, which he/she can fully edit, remix and customize. It is not possible (yet) to fully create a specific bracelet yourself, it needs to fit one of those templates. However, you can change a lot, including the material.

“We’re waving a middle finger at the current pre-designed and impersonal jewellery scene”

Based on the production price, Zazzy charges a 60% fee. However, the production itself has been outsourced to Shapeways.com, “The World’s Leading 3D Printing Service & Marketplace” (Dutch company). In this way they do not own materials and a 3d-printer, they only use “manpower”.

Beginning of this month, Zazzy launched their new platform: zazzy.co. On zazzy.co you are able to upload your own 3d-created jewellery and share it, integrate it in your site/blog and sell it. What is so special about that? The most powerful aspect of this platform is that you don’t need to contract manufacturers, with specific order sizes etc. Zazzy will create the products on demand, so there are no costs for setting up your own brand anymore. Selling your first product = making profit. That is something special, don’t you think?

“Zazzy invites you to new way of designing, thinking and creating on zazzy.co

Zazzy charges the normal 60% production fee within this new business model and a 25% platform fee based on the product-margin, which the creator determined himself. So, Zazzy was already based on co-creation by selling customizable products. However, with zazzy.co the marketing is transferred to the customers as well.

Already 60,000 users designed a product on zazzy.me. I’m very curious about the outcome of zazzy.co. Customizable/personal products are trendy in a lot of different branches, so why not in jewellery? However, Zazzy is not that groundbreaking because you have to fit your design in specific templates. When browsing through the platform (zazzy.co) it all looks the same to me. So, one cannot really differentiate. For personal use, changing text, figures and icons is maybe enough to make it special and personal to oneself. But for brands these options are far from enough to differentiate in the jewellery market: There are so many brands out there….

Screen Shot 2015-05-03 at 13.48.46

So my question is: has the time come for niche markets and dummies within 3d-printing, or do we need to wait for some more innovation, in both production price and possibilities?


http://www.rockstart.com/blog/zazzy-launches-new-platform-to-create-and-sell-3d-printed-jewelry/

http://www.shapeways.com

http://www.sprout.nl/artikel/zo-zet-3d-ontwerpplatform-zazzy-de-massa-aan-het-werk

http://www.sprout.nl/artikel/startup-van-de-week/zazzy-sieraden-uit-de-3d-printer

http://zazzy.me/about-us/

Loyalty through Social Networks


Due to the drastic transformation in the media landscape Social Media has surfaced and has become widespread as it is growing rapidly in the last couple of years, totaling the number of active social media as of January 2015 to account for 2.08 billion worldwide according to Statista.com. Businesses’ accelerating investments in Social Media, especially in in Facebook, is the status quo right now. Yet, a lot of firms still do not perceive social networks to be a vehicle for gaining customer loyalty. These companies perceive social networks to be a source for generating brand awareness.

A different view was added to this discussion of Social Media by researchers Gamboa & Goncalves (2014), who did a case study on Zara and their use of Social Media as a source towards building and enhancing customer relations. On the social network site Facebook, Zara classes in their respective category of fashion brands, as having one of the largest number and most valuable fans. This study showed that companies could increase customer loyalty through building upon important factors such as trust, customer satisfaction, perceived value, and commitment. Fans as well as non-fans of brand on Facebook were used in this research and it showed that relations are more improved for Facebook fans of the brand compared to the non-Facebook fans, showing that the most important cause of loyalty is customer satisfaction, as seen in Table 1 below.

Untitled

(Table 1: Gamboa & Goncalves , 2012, p.714)

Personal Relationship Focus

For businesses, the greatest task is forming a personal relationship with the consumer, similar to the interaction of them with their friends on Facebook. A company’s Facebook brand page must be a “place” where consumers can dialogue with the brand as well as be part of a community. The old-school era of only focusing on commercial goals has ended, as the important of a relational context is a definite requisite for companies to survive in Web 2.0.

Customer satisfaction is crucial

Businesses that desire to attain customer loyalty must have a priority in seeking customer satisfaction. Customer satisfaction is the most important driver with the most positive (direct and indirect) effect on fans’ loyalty. The social network site, Facebook is a communication channel that can increase consumers being more satisfied, and as a result of this, can create deeper client-brand relationships. However, as customer satisfaction is an outcome of the consumer being fulfilled of created expectations, brands on the social networking site should be quick and transparant in answering their Facebook fans’ questions. The most crucial element is frequent interaction as well as maintaining an active and dynamic presence on this platform.

Tools and practices

Being dynamic and interactive with fans are essentials in making consumers come back, trust a brand, and be satisfied. Creating content (such as quizzes or poll questions) that encourages fans’ active behavior is also essential, and it can also serve as a mean to gaining knowledge about customers’ opinions regarding the brand.

  • Facebook to serve as a stand-alone tool. Customer questions or critiques should receive answers very quickly. When consumers are forced to use other methods to come in contact with the company, it will increase customer dissatisfaction.
  • Content relevance of the brand page is important. Only sharing brand advertisements or internal information not be effective. Content sharing such as news, funny updates, suggestions suggestions for the weekend or holidays are great ways to achieve engagement.
  • Identify target group and their interests. Specifically targeting consumers while sharing content will increase customer satisfaction, trust, and commitment.
  • Create exclusive content. Such as games or applications for Facebook fans. Consumers love campaigns that propose advantages to them and posting exclusive content via Facebook will create alertness of the Facebook Fans to the brand page and as a result they will become loyal.
  • Always be professional, yet never boring. Brans will lose fans if they consistently post advertisements, post too much, too few or post irrelevant information.

Brands can communicate with consumers by by integrating Facebook into their marketing strategy. The expectancy is that Facebook will maintain and even increase its effect by 26%. In this current landscape of web 2.0 and social media with substantial growth margins, businesses should start being very active on Facebook by maximizing the benefits of it and by captivating brand loyalty in the online world.

Reference: Gamboa, A. M., & Gonçalves, H. M. (2014). Customer loyalty through social networks: Lessons from Zara on Facebook. Business Horizons57(6), 709-717.

What should companies use Reddit for?


Most companies are now widely available on social media, specifically on the most popular ones such as Facebook and Twitter. Business management generally trusts the (hopefully strategic) step towards these websites because it is becoming quite the standard. Also, it is rather easy to control content as the administrator of a business page on these social media. However, this does not necessarily seem to be the case with Reddit. What is going on there and why may companies be reluctant to join?

Reddit can act as a high risk, high reward asset that can pay huge dividends for your business when used correctly.” Austin Paley for Blue Fountain Media

What is Reddit?

Reddit is a popular website where users can generate “news” posts in the community and others can up- and down vote these such that the trending topics are shown to all visitors. They proclaim themselves to be “The Front Page of the Internet” where users will miss no Internet trend as long as they are connected to the Reddit community.

Subreddit

Within Reddit, people are allowed to create any sort of subcommunity based on a common interest or to ask for help (the popular “AMA” subreddit, standing for “Ask Me Anything”, check it out). This also means that so-called Redditors can create a subreddit about a brand, which can either be positive or negative. This means that there can be several brand communities on Reddit and if the brand is not aware, it is missing out.

The Community Trademarks

Yesterday (May 2nd 2015), Reddit powered over 9000 communities consisting of over 3.4 million logged in Redditors. Besides being an active community, all members on Reddit can choose to be anonymous. Unlike with Facebook and Twitter, it is actually very likely that the user remains completely undercover. This has certain implications for the content of Reddit as Patrick Hong (Momentology) mentions there is a certain “rawness of user-generated comments”. Raw comments, however, can also be seen as uncensored and real depending on how you look at it. Either way, it is useful for a business to know whether their brand is loved or hated. And on Facebook, they might be less likely to find out because users may adjust their comments based on what they want their social circle to see. The community is open, raw, skeptical, and bold.

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Source: The Columbian

Business Example

As one of the first luxury brands, Nordstrom made the risky move of creating its own Reddit community page in 2014. Reddit allows Nordstrom to have more of a conversation with customers that other social media. Twitter, for example, is often used for pre-planned discussions where customers can use a hashtag to post questions. However, Reddit is more of a real-time conversation facilitator. Nordstrom recognizes the value of this and has been actively replying to comments and is even holding AMA (Ask Me Anything) discussions.

My Concluding Remarks

The key, it seems, to be successful on Reddit is to not just promote your product and post material and information. The Reddit community will actually shun you, as they are skeptical towards promotional material. What they value more is room for discussing your brand and products. And that should also be a valuable source of information for companies. Once brand communities are established and consumers find that the company actually responds to their comments and requests, they can help you promote without you even trying. Now wouldn’t that be perfect?

Of course I recognize that Reddit is not the “Utopia” new method to a company’s social media strategy or the one ultimate solution to gaining benefits from your brand community. I am merely stating that companies should be aware of the potential value Reddit brings and how it may be unique from other social channels.

Sources: 

http://www.momentology.com/4359-10-exceptional-examples-of-brand-communities/

http://www.luxurydaily.com/nordstrom-creates-reddit-community-for-consumer-conversations/

http://socialmediarevolver.com/step-step-guide-how-to-use-reddit-business/

http://www.bluefountainmedia.com/blog/reddit-marketing-the-complete-guide-to-using-reddit/

Make the world a better place while gaming!


That video games are no longer toys for geeks is a development we have seen all around us. Especially in the mobile market we see casual games targeted at all demographics, where the real popular ones can go viral within moments. Trivia Crack is such an example for me, it may have only been weeks ago that only a handful of people were enjoying trivia games in their spare time. Now, the last time I checked my Trivia Crack account, 178 of my Facebook friends had already been using the app! Mobile gaming is apparently hot, and a little surprisingly, so are trivia games.

An interesting concept making smart use of this trend is the newly launched Givling, a mobile game with a broader vision than your average Angry Birds or Candy Crush. A company daring to ask a rather atypical question. What if actual real-world problems could be tackled by playing a simple online trivia game?

Student debt in the US have topped 1.2 trillion dollars and there is little hope for improvement anytime soon. This is the problem the California based start-up Givling now tries to address with its neat little concept. Players of the Givling game are matched up with two other random team mates to form a ‘Funding team’ of three. For 50 cents a round, players gain various trivia questions and can accumulate points doing so. Every day at noon, a daily cash payout will be done to the best performing team. The rest of the accumulated funds will be saved and used to help US students pay off their student loans. Students may apply online to get their student debt paid off through Givling, after which they will be randomly placed somewhere in the ‘Givling Queue’. When the top of the queue is reached, their loan is to be paid off next.

Combining gaming with crowdfunding to tackle a nationwide and growing problem? I must admit, an ambitious and creative endeavor! We must however note that the game has just freshly launched and admit that so far, only 10.000 dollar in total has been collected. Whether or not Givling may actually help solve problems on a large scale, we should give praise to them for approaching online gaming in a new way. Integrating the social aspect of helping out other students while at the same time offering a shot on making some cash, brings greater purpose as well as meaningful competition to the platform. Will enough funders join the project? Well, Agrawal et al. (2013) note how funders in crowdfunding initiatives are not only driven by personal gain, but also by a sense of community participation and, surprisingly, a sense of philanthropy. If Givling manages to successfully tap into these two motivational drivers, the app could really start to make an impact.

So what do you think.. Could social crowdfunding through means of online gaming actually turn out to be the next big thing? And would you participate in such a competition? Why (not)?

https://givling.com/givling/ [accessed: 2-5-2015]

http://www.wired.com/2015/03/online-game-thatll-help-pay-off-student-debt/ [accessed: 2-5-2015]

http://www.bigfishgames.com/blog/2014-android-iphone-ipad-tablet-mobile-video-game-stats/ [accessed: 2-5-2015]

http://www.techtimes.com/articles/37150/20150305/want-to-pay-off-your-student-loans-givling-online-trivia-game-might-help.htm [accessed: 2-5-2015]

Agrawal et al. (2013) “Some Simple Economics of Crowdfunding,” National Bureau of Economic Research

Complaining About Your City? Do Something About It


Changify: A New Way for People to Improve Their Cities

Most people are never satisfied, and complaining is a way to express it. We keep complaining about our job, study, city, country, and the list goes on. While some might take action upon their dissatisfactions and make changes, some don’t even know where to begin with. Have something you don’t like about your city or neighbourhood? Well, there is a platform for you to share it and actually do something about it, called Changify. An article in Network World by McNamara (2014) discussed the fact that there had been a trend of using the –ify suffix in company names for several years, including Changify. This trend was thought as the result of Spotify’s success which some startups wanted to follow. According to its Facebook page, Changify was created in November 2012 by a social impact business called D4SC (Design for Social Change). It’s a place to share things you would like to change or love in your cities. These shared posts are called reports and users are able to rate others’ reports. It’s not just about sharing, it’s also about bringing people together to solve the issues. Once people have an idea to make a change, they will pitch it to local business to get the funding. Hence, it allows people to be actively involved in making a difference, starting from where they live. This platform is currently available in Zurich, Barcelona, Hamburg, and London. So, how do you Changify? Here’s an example of a few steps to do it:

Source: www.vimeo.com

Changify is Business + Crowdpower + Fun = Better Cities

Based on the example steps in the video, Changify adopts crowdsourcing in identifying issues in the cities as well as in creating a solution for it. The term crowdsourcing itself is quite a recent concept, thus it has various definitions. Estellés-Arolas and Gonzalez-Ladron-de-Guerva (2012) analysed the existing definitions and defined it as a type of participative online activity in which an individual, an institution, a non-profit organization, or company proposes to a group of individuals of varying knowledge, heterogeneity, and number, via a flexible open call, the voluntary undertaking of a task which always entails mutual benefit. The paper also provides more details definition of this concept.

The idea of encouraging citizens to care more about their cities and taking action to improve it instead of just complaining is quite fascinating. However, only a few reports and ideas are posted on the website. There is a video of making changes in La Boqueria market in Barcelona, but it was not clear whether the changes are going to be implemented or not. And if it was, when it was going to happen was also unclear. In my opinion, the platform might lack of users which made it inactive. That being said, word of mouth would play an important role in bringing this platform to “life”. Changify should expands its users database and encourage them to spread the words about the platform to their friends and family. Would you be a Changifyer?

References

Estellés-Arolas, E., Gonzalez-Ladron-de-Guerva, F., 2012. ‘Towards an integrated crowdsourcing definition.’ Journal of Information Science, 38 (2), 189–200

McNamara, P. (2012). ‘Namifying has gotten out of controlify’, Network World, 17 October [Online]. Available at: http://www.networkworld.com/article/2835011/data-center/namifying-has-gotten-out-of-controlify.html (Accessed: 2 May 2015).

http://www.changify.org/#

https://www.facebook.com/pages/Changify/371713959591153?sk=timeline

Yeloha- Meet the Airbnb of Solar Power


In the past few years, we having been moving towards a sharing economy- a place where IT allows people and companies to distribute and share goods and services that are in excess capacity (Hamari et al, 2015). Multisided market platforms like Airbnb and Uber have led this trend, creating quickly growing businesses that have other parties provide the product or service and are disrupting existing industries. One industry that has not yet been affected by this growing movement is the energy industry-until now. Enter Yeloha, an Israeli startup that is looking to shake up the US energy market.

Yeloha, has been described as being “like Airbnb, but for solar power.” The company hopes to rapidly expand thanks to a peer-to-peer model. Yeloha’s business model relies on two groups of customers, Yeloha ‘hosts’ and ‘partners’. Hosts are people who have suitable roofs and can apply to have Yeloha install solar panels free-of-charge and who will receive one-third of the energy output free. Partners are customers who would like to benefit from solar energy but do not have a suitable premises to do so and thus can buy energy from Yeloha hosts. Those who opt for long-term contracts can benefit from greater discounts. Yehola is entering the market when at a time where its business model makes a lot of sense. A recent poll revealed that 79% of Americans want the US to develop more solar power. Last year, the US generated a whopping 4.093 billion kWh, however only 7% came from renewable energy and only pitiful 0.4% came from solar. The company is looking to change that and launched its invite-only programme in the solar power-friendly state of Massachusetts just last month, backed by millions of Dollars in venture capital funding.

Yeloha’s business model addresses some of the major issues that hinder the expansion of solar power by reducing these barriers and transaction costs for the customer. One of the biggest barriers is the upfront cost of installing solar panels. By offering them free-of-charge along with free energy, the company hopes to attract a large number of interested customers who would otherwise unwilling or unable to do so themselves. These incentives should help the company quickly grow a large network of hosts by not having to purchase property to hosts solar panels but have customers host them instead. This model has allowed businesses in the sharing economy to grow at astronomical rates. For those who are unable to host solar panels but would like a way to reduce their energy bill or be more environmentally conscious, they can simply buy energy from nearby hosts.

Yehola’s business model, although promising, will have to overcome some potential hurdles, particularly legal ones. Other sharing economy platforms like Airbnb and Uber have recently run into lawsuits, which have cost the firms enormous sums of money as well as negative PR. Some observers are sceptic on the legal arrangements of Yehola’s planned solar installations on apartment buildings and rented premises. Others have noted that it only makes sense in markets where electricity from the grid is very expensive like Hawaii. Nevertheless, the market conditions and timing seem to be in the company’s favour to disrupt an industry that has remained unchanged for too long. 

Sources:

Chernova, Y. (2015) “Peer-to-Peer Solar Network Yeloha Gets $3.5 Million to Launch in U.S.”, April 8, Wall Street Journal, (online) available at: http://blogs.wsj.com/venturecapital/2015/04/08/peer-to-peer-solar-network-yeloha-gets-3-5-million-to-launch-in-u-s/

Hamari, J., Sjöklint, M., & Ukkonen, A. (2015) The Sharing Economy: Why People Participate in Collaborative Consumption”. Journal of the Association for Information Science and Technology

Whitford, D. (2015) “Here Comes the Airbnb of the Solar Industry”, April 7, Inc., (online) available at: http://www.inc.com/david-whitford/built-from-passion-yeloha.html

Two sides of the same coin: Co-creation in the videogame industry


Value co-creation has started to spread more and more across various industries during the last decade. Media consumers have taken up the role of media producers, as firms give them the opportunity to design, produce or market content. And the game industry is no exception to this phenomenon.

Examples of games such as Spore and Little Big Planet, that rely heavily on user generated content, have introduced a new era for videogames, where the role of co-creative gamer is born (Banks & Potts, 2010). While many benefits may potentially be derived from this new trend, there are also dangers that might lead to utter failure. Two opposite case studies prove that it is not easy to find the keys to success.

Fury was an online game that was released in October 2007. During its development phase, the game looked quite promising. There were a lot of expert gamers that spent hours playing the open beta version, providing the designer company, Auran, with valuable feedback for improvement (Banks & Potts, 2010). In addition, since the game was used by some highly-ranked members of the online gaming community, many players were intrigued to try it out resulting in a form of online word-of-mouth marketing. The developers changed Fury quite a lot, always according to user feedback they were getting. However, in the end this advantage backfired. Upon the game’s release, the reviews were disappointing to say the least. Hardcore gamers, who spent hours providing input to improve the game, accused Auran that they released the game too early and did not take enough time to carefully implement most things discussed in the feedback. As a result, the gaming community turned its back on the project and Fury was shut down shortly after its release.

FuryGameLogo

Co-creation can indeed backfire…

Auran underestimated the consumers’ needs. As many expert gamers pointed out, they did not change some of the key aspects of the game simply because they did not want to. Introducing consumer value creation can disrupt some of the traditional models on which production in a certain industry is based (Banks & Potts, 2010). In this case, the expert producers disregarded the customers’ opinions and insisted on something that turned out to be unacceptable for the market. Nevertheless, there is always a way to find the right balance between company and consumer value creation. And the case of World of Warcraft makes a perfect example of this balance.

Blizzard is one of the largest gaming companies in the world. One of its biggest successes came with the release of the online game World of Warcraft, which is still the largest online game 10 years after its release with more than 10 million subscribers. But how did Blizzard use value co-creation effectively? Apart from the open beta version that was made available prior to the game’s release, the company made available, along with the full version of the game, a free API through which users could customize their user interface (Davidovici-Nora, 2009). Therefore, Blizzard put minimal effort in designing a simple and easy to use UI for casual gamers, while giving the opportunity to more hardcore consumers to enrich that UI according to their specific needs. They achieved this by creating add-ons that provided the original UI with additional functionalities. Users were also able to share their add-ons through the game’s online community. What Blizzard achieved, apart from minimum effort costs in interface design, was to keep the core of the game intact as the developers wanted it (Davidovici-Nora, 2009). But on the other hand, they empowered gamers by allowing them to create tools that would make their experience better.

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The opposite side of the coin: co-creation at its best!

The two case studies represent two different models of co-creation. On the one hand there is the use of open beta versions, which give the consumer the role of game tester and provide valuable feedback to the companies. In this more traditional model, co-creation happens before the marketing of the game (Davidovici-Nora, 2009). On the other hand, Blizzard used the API to allow gamers to create value even after the game’s marketing and to “pass on” to them the role of game developer, even to a certain extent. However, it was not this difference that determined the success or failure of the projects. Both cases show that value co-creation can be a powerful ally, but as companies give customers more power over their products, they need to take these newly forged relationships into account more seriously.

Hence, the gaming industry has reached an era where gamers are more useful than ever, as they do not purely consume but they are actively involved in game development. The lesson to be learned is that, as consumers gain more power over product creation, firms need to be ready to abandon some of the more traditional business models in order to make a successful transition into this new era of co-creation.

References:

Banks, John, and Jason Potts. “Co-creating games: a co-evolutionary analysis.” New Media & Society (2010).

Davidovici-Nora, Myriam. “The dynamics of co-creation in the video game industry: The case of world of warcraft.” Communications & Strategies 73 (2009): 43.

Jenkins, Henry. “Why Co-Creation Matters: An Interview with John Banks.” Henryjenkins.org (2014)

“Boss, I’ll work from home this morning”


When you turn off your alarm on your smartphone at 6:30 in the morning, it is straightaway clear that it is a better plan to work from home this morning instead of at the office. There are traffic jams everywhere and even the trains are delayed. It is advised that you leave two hours later instead. In case you do not want to follow this advice, because you have a meeting at 9:00 in the morning, then your smartphone gives the fastest route straightaway, considering going by car or by public transport. Later that day, you have to be at the dentist at a specific time, whereby your smartphone notifies you when you have to get in your car.

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People get busier every day and the personal and digital demands are increasing. Systems get integrated more and more, which leads to an optimal ease of use. Those trends can be applied on the travel and traffic industry too. A lot of problem solving traffic applications have been developed, which led to an online overload (Tsekouras, 2015) of applications that can help you on the road. In this blog I provide you with the mechanisms in those traffic applications, and I will provide an analysis of the different applications which are currently popular in the Dutch market.

Travel & Traffic Applications

The aim of travel & traffic applications is to give and advice about how to get from A to B fastest. Nowadays, a lot more functions are possible such as a personal navigation (to avoid traffic jams), a price advice, a sustainable advice etc. To optimize and customize this for each individual, the user needs to put in information in exchange. With this, the users deliver an input for the actual result.

Data Use

Since everyone has different destinations, different travel times, a different budget, and different resources, those traffic applications cannot give a generic travel advice to everyone. The key point of those applications is that travel advices are based on personal data, such as one’s car, one’s agenda, the amount of traffic jams on the highway, and one’s preferred budget. With this, everyone receives an optimal, personal travel advice. Since the user types in the data him/herself, optimal advices are given, instead of a ‘guess’ based on the most likely information. The downside of typing in one’s exact data is that it requires effort, whereas minimal effort is desired. To lower the impact of this downside, most applications can be fully integrated with one’s smartphone and agenda, which decreases effort in turn. However, this raised privacy concerns at the same time (Tsekouras, 2015).

Possibilities

There are endless possibilities that can be integrated in traffic applications. Most traffic applications integrate the following elements:

  • Navigation
  • Real-time traffic notifications
  • Personal schedule
  • Prices (of fuel or public transport)
  • Available parking spots
  • CO2 saving
  • The amount of stop overs
  • Parking

Revenue Models

Most applications have different revenue models, varying from paying for the download to advertisement based. Noteworthy is the fact that a lot of applications are run by the government and some applications are highly subsidized due to the benefit for the whole community.

Market Analysis

In the following table, an analysis of popular traffic applications in the Dutch market is given.

Capture

Sources:

https://vid.nl/app.html

http://www.anwb.nl/mobiel/onderweg-app

http://www.kenneymyers.com/blog/10-iphone-apps-to-help-you-avoid-traffic-on-your-commute/

https://www.waze.com/

http://www.reiskostenblog.nl/blogs/10-handige-apps-die-je-helpen-slimmer-te-reizen/

Tsekouras, D. (2015). Lecture 1: Introduction to Value Co-Creation. Customer Centric Digital Commerce, 18 March, 2015.

Tsekouras, D. (2015). Lecture 2: Information Search & Product Recommendations. Customer Centric Digital Commerce, 25 March, 2015

The Perils of User-generated Content and Incomplete Institutional Arrangements


Valve Corporation, the company that touts itself to be “boss-free since 1996” when it was founded may have just found its boss. After an announcement to allow creators of user generated content for the game Skyrim to charge for content on their Steam platform, they were met with great backlash from the community on the platform. A petition on Change.org gathered 133,000 signatures in a week and according to CEO Gabe Newell the mods have generated only ten thousand dollars in revenue compared to the million and more it costs for them to address the negative feedback. Users, both players and creators, had their concerns about the dynamics of such a model, leading to removing the feature from Skyrim, refunding purchases, and reconsideration of the whole concept on Valve’s part.

Creative gamers have for long formed a subgroup of “modders”, players and/or developers who design modifications or “mods” to existing games ranging from visual design elements to totally changing the nature of the gameplay. Steam has helped to bring their designs accessible to users on the platform in their Steam Workshop and wanted to extend this relationship to where both could profit.

To roll out the feature they partnered with Bethesda, the company behind the Elder Scrolls series of games and the latest release Skyrim. Skyrim mods placed in the Steam Workshop, could now be available either for free as it has been before, for a price or sold with a pay what you want model. The economics of the model for the parties involved is described by Bethesda to follow industry standards. Valve receives 30% much like iTunes and Google Play Store would. The rest Bethesda split by looking at the earnings of both developers in-house and the external creators. They settled for a 25% cut for the creator and 45% to Bethesda. After all they provide the original game and most of the tools used to create the modifications for the game they argued.

Both Valve’s and Bethesda’s intention according to their statements was to increase the quality of the mods released. If looked at from the perspective of the marketing value system used in the article by Carson et al. the change to a paid model was successful in adapting to a new judiciary environment and political elements involved. The intellectual property rights of derivative content needed to be thought through in a process that took Valve three years.

The social norms involved with purchasing products, compared to using content someone has created for free are quite different. Paying for a product comes with the expectation that it is supported and works according to the description. Valve and Bethesda expected the content to become better as the creators would work to this arrangement. Modders and players disagreed and pointed to many of the institutional arrangements that would not support this. Bad product would be brought to the market as there is a financial incentive rather than an incentive to provide a positive contribution to the community. If anyone could push content to the market, it would be hard to determine the quality of the products within the 24 hour return period Steam allows. Mods can also be downloaded from a multitude of websites, so there is potential for someone to download a mod and sell it as their own on the platform.

Looking at the remediable efficiency criteria, the modders did not find the joint profit allocation of the new model to be fair based on their effort and time utilized. The interdependence of many mods could lead to great user dissatisfaction, although pushing the new model forward to users efficiently. Players would be required to purchase mods that the mod they intended to download for free for was based on.

The backlash did not only bring about negative comments, but potential arrangements Valve could implement to ensure only good quality user generated content is sold. Many favoured a tiered rating and review system to be implemented, so that only modders whose content has been downloaded often and reviewed positively could sell their mods.

The institutional arrangements Valve attempted to implement were not detailed enough to cover for situations the users had thought of. Now that they have a dump truck of emails to go through, hopefully in that pile they will find the right mix of arrangements to cover the concerns of the community.

http://steamcommunity.com/workshop/aboutpaidcontent
https://www.change.org/p/valve-remove-the-paid-content-of-the-steam-workshop
http://venturebeat.com/2015/04/25/valve-boss-gabe-newell-paid-mods-have-only-made-10k-thats-not-stupidly-greedy/
http://www.bethblog.com/2015/04/27/why-were-trying-paid-skyrim-mods-on-steam/
http://techcrunch.com/2015/04/24/valves-launch-of-paid-mods-faces-backlash-from-community/
http://steamcommunity.com/games/SteamWorkshop/announcements/detail/208632365253244218
http://www.wired.com/2015/04/steam-skyrim-paid-mods/
http://www.forbes.com/sites/insertcoin/2015/04/25/is-there-a-way-to-make-a-paid-skyrim-mod-store-work-for-everyone/
https://steamcommunity.com/app/72850/discussions/0/611704531887404252/#c611704730327857036
https://www.reddit.com/r/gaming/comments/33uplp/mods_and_steam/

Stephen J. Carson, Timothy M. Devinney, Grahame R. Dowling and George John Source: Journal of Marketing,Vol. 63, Fundamental Issues and Directions for Marketing (1999)

Screenshot from Steam’s announcement.

Sustaining success: Lessons from South Korea’s OhmyNews


CCoDEt7WMAAjHMc.png largeIf you are one of the billions of people who use social media regularly, then it is most likely that you are familiar with the image on the left. It was diffused very fast throughout the internet, simply because it describes something strange, yet very real. These, and many other companies simply endorse the exchange between customer groups, while they just play the role of coordinator-facilitator. Companies with similar business models, realize that people hold in their hands valuable tangible or intangible property and that they just need the appropriate incentive in order to share it and create value, both for the company and for other people.

Eastern countries have surprised repeatedly the western business world with their creativity. OhmyNews is a company that comes from South Korea and it is an example of customer empowerment. OhmyNews is an online newspaper that was established by Oh Yeon Ho on February 22, 2000, while in 2004 an international website was created. Similarly to the companies of the image, OhmyNews has just 70 Journalists who produce less than 20% of the content, simply because this is a citizens’ job. As one of the most influential news websites in South Korea, the company operates on the principle “every citizen in the world is a reporter”. They allow the citizens to play the role of news hunters by promoting direct democracy at the same time. Specifically, company’s editors screen citizens’ articles before posting them on the website to ensure content integrity without exercising censorship. Consequently, OhmyNews is a representative example of a company that crowdsource almost 80% of its content.

Large news providers hire thousands of journalists around the world in order to support timely and effective news capturing. On the other hand, costs rise along with employees, something that forces them to introduce multiple revenue sources. For OhmyNews this should not represent a dilemma since its model allows access to the most specialized and diversified news with minor costs. However, there is another part of the story that is far from a fairytale.

The international site is inactive since 2010 because 70 employees were overloaded with information from around the world that they could not manage. The company was also struggling financially for a long period, with revenues that were falling dramatically month by month. The founder stated that the website was not a profit seeking move at the beginning, but like every organization, the company had to find a way to finance its expenses. It was clear to the executives that the existing model leads to failure with rapid pace. Thus, in 2009 OhmyNews started to make plans for a new and sustainable business model. The transformation was a great challenge. Back in the days most of their revenues (70%) were generated by advertisements. Now many local portals entered the game and absorb more than 90% of the advertisement revenues, something that does not leave room for fast growth towards this direction to OhmyNews. They introduced two new models that account about 50% of their revenues. The first is the “tip” model which allows readers to donate a tip for a story they like, while the biggest portion of the “tip” is given as reward to news contributors. The second is called “100,000 club” and consists of 100,000 members that pay €7 per month to attend live or recorded lectures organized by the company itself. Thanks to its passionate supporters the South Korean site is still running, but this time more sustainable.

What prevented the company leaders from taking advantage of the huge success of their business? Obviously, innovation and customer involvement do not guarantee success. OhmyNews-international experienced firsthand what a tremendous customer involvement means when you are unprepared. Furthermore, when your service is free, it is necessary to find other sources of income that could be sustainable in the long run. The lesson: Innovation does not last forever, it needs to be continuous. Even disrupters can be disrupted when they do not find new ways to adapt their business model into new situations.

References
Joyce, Mary, (2007). The Citizen Journalism Web Site ‘OhmyNews’ and the 2002 South Korean Presidential Election. Berkman Center Research Publication No. 2007-15

http://www.bloomberg.com/bw/stories/2006-11-01/ohmynews-oh-my-biz-problembusinessweek-business-news-stock-market-and-financial-advice (Last accessed: 2/5/2015)

http://www.businessweek.com/globalbiz/content/jul2009/gb20090714_537389.htm (Last accessed: 2/5/2015)

http://www.forbes.com/forbes/2009/0330/050-oh-my-revenues.html (Last accessed: 2/5/2015)

https://vimeo.com/17184251 (Last accessed: 2/5/2015)

Increasing sales? Focus on word of mouth marketing is not enough!


Coolblue is an online retailer in the Netherlands and Belgium. They started in 1999 and now have 332 specialized webshops and 7 physical shops in the Benelux. This makes Coolblue one of Netherlands biggest webshops. And they are doing quite good when looking at their awards: Best webshop in the Netherlands in 2011, 2012, 2013, 2015 and second place in 2014. Looking at their social media platforms they are performing well with an online fan base of more than 204.000 fans. In 2013, Coolblue was the highest entering company in the Best Social Media Award with a 3th place. In 2014 they even came closer with becoming NL’s best social media with a second place. On social media they perform outstanding, having great word of mouth marketing and looking at their growth in revenue with last year growth of 45% a TV campaign is an interesting step. In January 2015, Coolblue launched their first TV campaign. But why does Coolblue need a TV campaign while they have such good functioning social media platforms and became huge with word of mouth marketing?

In today’s world it is almost impossible to think about living without social media. Everybody knows or at least has some vague idea about what social media are, and at the same time almost everybody is involved in it daily. Facebook, Twitter, Instagram and so on are examples that will most likely ring a bell for practically everybody. If we look at Coolblue, they use their Facebook page in such a way that we can all watch and follow the company. Mostly it is used at keeping customers up to date and informed about new product, but they also use it to amuse their audience with entertaining content. With people who liked Coolblue’s social media content they want to use e-Word of mouth marketing to create more brand recognition. Brand recognition is a problem for Coolblue, which they can’t solve with word of mouth behavior only. Coolblue’s CEO Pieter said:’’ Untill now we have been growing for years with word of mouth marketing, but now it’s time to grow even faster with our new tv campaign. Then they can experience our service and products, and most of the time our customers are so impressed word of mouth behavior will follow automatically.’’ Also when we take a look at Google trend with Coolblue (blue) and their biggest competitors, Bol.com (red) & Wehkamp (yellow), we see that Coolblue is still way less popular.

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If we look at their social media strategy nowadays their focus on social media platforms are on (professional) fans, and sometimes even a focus group within this fan base (Example: People who love cats). These fans are people who know Coolblue, already bought a product at Coolblue and experienced their service & delivery propositions. These fans show word of mouth behavior, but clearly it is not enough to become as big as their competitors if we look at brand recognition. Looking at this Coolblue case, word of mouth marketing (online & offline combined) can grow a company with cheap marketing. But if you want to become de biggest, you still have to invest in old fashioned marketing to increase brand recognition at the mass.

References
http://www.coolblue.nl
http://nieuws.coolblue.nl/coolblue-start-tv-campagne
http://www.facebook.com/coolblue- http://www.google.nl/trends/explore#q=coolblue

Will Popcorn Time survive the war?


In one of my previous post I elaborated on the success of user-generated products/ services and concluded that user-generated products outperform designer generated products on almost every performance metric within the first 3 years (Nishikawa et al., 2012).

Popcorn Time is a good example of such success stories. This platform is an illegal video streaming service that gained allots popularity in a really short time. By the end of 2014 it was known that approximately 1.3 million devices in the Netherlands had the software installed and that this amount was rising by around 15000 on a daily basis. It’s a software on which you can search for the film or series that you want and thereafter stream it while it’s downloading. As it appears, the team behind Popcorn Time consists of a set of developers who work partly together on developing the software.
Another success criterion of this application is that they are trying to guarantee the security and privacy issues of the customers. This is also one of the main discussed topics we had during the lectures. They use the so called “Kebrum”, which ensures that their users can stream videos anonymous without being tracked. They claim that they are constantly working on updates to keep their identity and the identity of the users private.
Additional features as chrome cast are also part of the things that Popcorn Time offers. Moreover, almost all the series and movies have optional subtitles.

Popcorn Time places great emphasis on the value co-creation of their system. This last is seen on every description and facts that has to do with the platform. The next picture is just an example of how they describe themselves on the “about” section of the software. popcorn time about They want to make it very clear that they are an open source project.

They are still having massive competition with streaming services like Netflix, but it’s clear that the huge supply from the illegal platform are way above the legal streaming service. The interface is considered as almost identical of the one from Netflix. The next picture shows their interface and how they integrated the ratings from IMDb into their platform. screen tracers

Although this goods point, there are still many risks, for example that the software is taken out  from the net or that the Kebrum leaks all the ip-address from the users. The original Popcorn Time couldn’t handle the amount of risk they were facing and closed the application and then made it an open source in 2014. Since then there are different versions of the application f which the most popular is the Popcorn Time. There is also the Time4Popcorn, Flixtor and Zona: the Russian version. There are people in Germany who received penalties for using the software. The legal (property right) organizations in the Netherlands are not so advanced yet and to our known are not following the users (community). Mostly they are doing research behind the “big boys”, the Popcorn Team.

Now that we have read how good and how bad the Popcorn Time is and what are its potentials. Do you think that this platform will survive the war against the law? Do you think that competition from example Netflix will be able to keep on the track with the Popcorn Time platform?

References

Nishikawa, H., Schreier, M., & Ogawa, S. (2012). User-generated versus designer-generated products: A performance assessment at Muji, International Journal of Research in Marketing, 30, 160–167.

http://www.volkskrant.nl/tech/waarom-netflix-hollywood-en-hilversum-bibberen-voor-popcorn-time~a3838504/

http://www.androidplanet.nl/nieuws/popcorn-time-populair/

http://www.nu.nl/internet/3797052/vijf-vragen-illegale-streamingdienst-popcorn-time.html

http://www.nu.nl/internet/3726691/illegale-videostreamingdienst-popcorn-time-sluit-deuren.html

Fair share for all musicians.


The music industry is constantly changing and in need of new business models. This is due to several factors including disruptive technology. For example, the format on which music has been delivered to the consumer over the last few decades we went from mixtapes, to CDs, to MP3s, and more recently music is also delivered in the form of streaming. Popular streaming services include Pandora, Spotify, and Beats. Beats has been bought by Apple and is expected to be re-released in summer 2015.

However, with the digitization of musical content and the internet, it has also become easier for consumers to get music without paying for it. For, example in the form of illegal album downloads and illegally copying and sharing such content. Hence, it has become increasingly difficult for new musicians to make a living based on record sales. Nowadays, as music is more often offered nearly for free, the majority of a musician’s income is from touring, endorsements, and merchandise.

Major record labels, such as Warner Music Group recognized this trend now requires all new artists to sign “360 Deals” contract. In such a contract, record labels receive a percentage of all earnings, and not just earnings from record sales. In return record labels will commit more managing every aspect of a musicians career. For example, record labels are now allowed to give away music for promotional purposes.

Over the years, many artists have voiced their opinion about the services through which they deliver their content. Rapper Nipsey Hussle believed that Apple’s iTunes did not give him a big enough cut for every download of his song and decided to sell his Mixtapes for $100 each. The 1000 copies that he printed sold out. Also, singer Taylor swift was not happy about how much she and artists earn for each song stream on Spotify. In 2014 she decided to remove her music content from Spotify which lead to a lot of media attention.

“The future is Tidal.” according to rapper Jay-Z. Tidal a streaming business bought by Jay-Z for $50 million and looks to redistribute the wealth among musicians. It promises to offer all artists on the streaming service a higher percentage of pay per stream than its competitors. The subscription fee for consumers is also higher than that of competitors, while the differentiation of the service, which  is higher audio quality that requires special equipment to hear, is negligent to most users who listen to their music on their phone. It is still early to judge Tidal’s success, but the company is already valued $250 million since the artist bought the company.

Another way to support artists is through funding the artists on a crowdfunding platform, such as Patreon. Patreon lets fans become patrons of their favorite artists and content creators. It’s different from other crowdfunding platforms such as Kickstarter. Whereas, on Kickstarter you fund specific projects, on Patreon you fund artists.

Patreon seeks to empower content creators by allowing patrons to donate money to their artists. This could be in the form of a one time “tip” donation, or a monthly contribution, or an amount for every time the content creator releases new content, such as a new song, video or recipe. Content creators can set what patrons will get in return for the monetary support. For example, meeting monthly on google hangouts, production tutorials, pre-sale concert tickets, or any other way to show their gratitude.

Grooveshark, a platform where consumers could upload copyrighted content, recently shut down with the following statement: “If you love music and respect the artists, songwriters and everyone else ho makes great music possible, use a licensed service that compensates artists and other rights holders.”

Based on recent developments such as the shutdown of GrooveShark and the continuous deletion of copyrighted content that is uploaded on youtube, I expect that as time continues, the regulation on music increases. Hence, I expect that in the future, paying for music will be the norm again, just like it was before the era of illegally downloading mp3s.

But what will be the best way to support an artist? To subscribe to a streaming service, funding through Patreon, or somehow donating to the artists directly?

References:

https://consumervaluecreation.wordpress.com/2012/01/28/music-industry-in-need-of-new-business-models/

https://consumervaluecreation.wordpress.com/2014/04/27/grooveshark-search-play-discover/

http://time.com/3554468/why-taylor-swift-spotify/

http://www.forbes.com/sites/natalierobehmed/2013/11/06/rapper-nipsey-hussle-and-the-100-mixtape/

http://musicians.about.com/od/ah/g/360deals.htm

http://www.engadget.com/2015/05/01/rip-grooveshark/

grooveshark-shutdown-letter.jpg

There are two kinds of people, which one are you?


Do you prefer Coke or Pepsi? Do you eat your burger with cheese or without? And what about coffee, Americano or espresso? Zomato ensures that every meal, for users with all kinds of preferences, is a great experience.

Zomato is an India-based restaurant directory startup, that provides detailed information regarding restaurants nearby, including scanned menus, and also user’s reviews and photos of their gastronomic experiences. Zomato also includes real-time information about the restaurant and lets users book tables through its iOS and Android apps.

The image bellow summarizes Zomato’s key features:

Source: zomato.com/portugal
Source: zomato.com/portugal

Zomato has 1,398,900 listed restaurants in 22 countries. With the recent acquisition of Urbanspoon, Zomato will break into the US market, competing against services like Foursquare and Yelp.

The business model is quite simple, Zomato hires people to visit restaurants and to send the data to the team, including up to date information on new openings and scanned copies of menus. Users can then share photos of their dishes and evaluate restaurants in order to help other users decide where to eat.

The detailed informations available for each restaurant is then a result of the combined inputs of both the Zomato’s team and the users.

Example of a restaurant in Lisbon. Source: zomato.com/portugal
Layout of the information available for each restaurant.  Source: zomato.com/portugal

At Zomato, user’s evaluation takes the form of both a rating, using a 5-points scale and a review. Given that consumers with more extreme opinions (very satisfied or dissatisfied) are more likely to rate (Li and Hitt, 2008), most restaurants have a score of either close to 1 or higher than 4, as  the image bellow exemplifies.

Results of restaurantes for breakfast in Lisbon. Source: zomato.com/portugal
Results of restaurants in Lisbon. Source: zomato.com/portugal

Product rating is crucial for Zomato given that it is an integral element of online businesses especially for experience goods (Tsekouras, 2015) and because they are a reflection of product quality (Hu et al., 2009). Also, consumers tend to trust more opinions derived from others customers than information provided by the vendors themselves (Chevalier and Mayzlin, 2006), which is why having a high number of reviews is a key success factor for Zomato.

Social surroundings are then of crucial importance given that the success of Zomato relies on the degree to which there is interaction between users, through comments, ratings and a community creation of “foodies”, and the degree to which network effects take place i.e. where a good or service becomes more valuable because more people use it (Katz and Shapiro, 1994).  As according to Grönroos and Voima (2013), the customer’s well-being of Zomato is increased through the process, as more user’s feedback is available for each restaurant.

As a startup, Zomato relies in eWOM in order to attract new users and generate brand awareness. Unlike traditional WOM, eWOM has much broader effects, in part because there is no need to have a pre existing connection between the sender and the receiver. As so, eWOM applies to Zomato since it operates in an online context whereas traditional WOM typically happens in a face-to-face context (King et al., 2014).

Zomato is providing value for the consumers whilst the consumers are also creating value for each other, through their evaluations and photos. This reflects a finding in the article by Saarijarvi et al (2013), which states that it is important to evaluate what kind of value is co-created and for whom, meaning that value can have a different meaning for different actors in the co-creation process.

Zomato also generates great value for restaurants. In fact it is one of the most cost-effective high-impact marketing platform for dining establishments.

Hungry?

Check out the best place for you at https://www.zomato.com/!

REFERENCES

https://www.zomato.com/portugal

http://www.forbes.com/sites/anuraghunathan/2015/03/24/indian-restaurant-search-service-zomato-is-expanding-across-the-globe/

http://articles.economictimes.indiatimes.com/2015-03-17/news/60211899_1_foodpanda-countries-bank-account

http://blogs.ft.com/beyond-brics/2014/10/20/zomatos-special-sauce-coming-to-a-server-near-you/

Chevalier, J. A. and D. Mayzlin (2006). “The Effect of Word of Mouth on Sales: Online Book Re- views.” Journal of Marketing Research 43(3), 345–354.

Grönroos, C., & Voima, P. (2013). Critical service logic: making sense of value creation and co-creation. Journal of the Academy of Marketing Science, 41(2), 133-150

Katz, M.L. & Shapiro, C. (1994). Systems Competition and Network Effects, The Journal of Economic Perspectives, 8(2), 93-115.

King, R.A., Racherla, P., & Bush, V.D. (2014). What We Know and Don’t Know About Online Word-of-Mouth: A Review and Synthesis of the Literature. Journal of Interactive Marketing, 28(3), 167-183

Li, X., & Hitt, L. M. (2008). Self-selection and information role of online product reviews. Infor- mation Systems Research, 19(4), 456-474.

Saarijärvi, H., Kannan, P.K., & Kuusela, H. (2013). Value co-creation: theoretical approaches and practical implications. European Business Review, 25(1), 6-19.

Tsekouras, D. (2015) Variations On A Rating Scale: The Effect On Extreme Response Tendency In Product Ratings, working paper.