bwagy, the blog of Ben Young

But it can also be the best thing to do.

Suck it up. Take a breath. And do nothing.

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Inspired by Antifragile.

I will admit I’m not a primary user of Pinterest, but I do use it for a couple of things.

1) Travel planning / inspiration -> the best way to figure where/what you want to do next is from images from that place. Anytime I’m traveling I do a quick search on that area to see what we could do.

2) Design Inspiration -> soaking up design inspiration to apply at home and at work.

With Nudge we actually see, if you’re targeting females Pinterest performs exceedingly well, even if you don’t optimize for it.

In fact Pinterest is a key driver of the top 10% of the content we analyze.

So, if you haven’t yet had a dabble with it you should. And then secondly they’re slowly opening up their ad product, promoted pins, so you can get visuals in front of your key demographic. It’s worth a look, I’m gonna have a play.

Tesla is going to launch a at home battery pack, for storing electricity from solar.

Wherever you go the electricity market is quite convoluted. It’s not easy generating electricity, feeding it in to a leaky grid, then collecting payments for that grid from everyone. It’s almost like a tax system.

For example, how is the price decided? Often it’s the cost of the most expensive contributor to the network. Such that if there is a expensive coal generator, the price is set to that.

For those that are generating solar power, and are feeding in to the grid, the challenge is how do you fairly compensate for that? Of course you would want the most expensive option but the power company doesn’t want that as they lose money on it.

And those that generate electricity at the moment use the grid more as they treat the grid as a battery, feeding in to it on low consumption then drawing at high consumption.

The battery pack helps alleviate a lot of this, you don’t need to feed in to the grid, you can store it for later. And then when you need electricity you can top it up – ideally if at all.

SolarCity has already begun installing Tesla batteries, mostly on commercial buildings like Walmart stores, which have to pay higher rates when they use lots of power during peak hours. Tesla’s batteries let them store up solar power when they don’t need it, then use it when rates are high, shaving 20-30 percent off their energy bills, according to Ravi Manghani, an analyst at GTM Research.

“When batteries are optimized across the grid, they can direct clean solar electricity where (and when) it is needed most,

Source: TheVerge

I suspect, this little innovation will be the catalyst for a lot of disruption in the industry.

And who knows what will happen if electricity becomes as cheap as internet. When kilowatts are consumed like megabits.

Wearable technology would provide a seamless, invisible, like utility.

Disney has invested $1b in to just this and visiting Disneyland is almost like a little incubator for what it could be like.

This piece by Cliff Kuang over on Wired about it is excellent, give it a read or a instapaper.

I’ve yet to go but need to go check it out.

I’ve been watching Netflix and how they tackle the challenges in front of them for a while, my earlier post explored what would happen if Netflix was free.

There are a few driving forces here:

1) Netflix itself says it thinks going global will drop piracy. Read.

Their argument is that people are using VPNs and torrents to download anyway, as someone from New Zealand, people simply just download shows when they’re not available. However like Spotify I imagine a monthly model would have an impact on piracy.

2) There is brand demand for more digital video content.

Everyone I talk to is screaming for more video inventory, they want more people to watch more ads. Netflix in some respects has potential attention to monetize. If you’ve read my earlier post, I do think they will retain the paid model but they are positioned to earn more revenue from offering a free option.

3) If you think Netflix is more like YouTube than it is like HBO.

YouTube is a global platform of content, that is open and shared but not the best experience for lean back viewing. People go to YouTube for a purpose, as such ads seem more of a barrier. Netflix in essence has the same platform, just with more control on getting the content in. This is almost a Apple vs Microsoft dichotomy.

I think these will position Netflix in that way, with a global database, powered by digital video ads.

And under that view I think their growth potential is seemingly infinite.

You knew it was coming.

1) Is it a sustainable form factor?

If watch behaviour is any example yes.

2) Imagine how good it’ll be in five years

A real robocop kind of future.

3) The real question is, when will you buy into it, today or tomorrow.

I’ve been wrong before but the app marketplace is what will make it sticky. Like swapping tv subscriptions, 2 or 3 compelling apps will make you switch. They might be at launch, or they might be next year.

I’m a fan of Medium, I’m also a fan of Tumblr.

A few weeks back Tumblr made some changes to be more like Medium, and now Medium has done the same.

It’s a dangerous game once you start looking sideways rather than looking ahead.

One of my personal goals each year the last few years has been to upskill in how I invest, in particular my personal long term investments. I’ve always had the philosophy that it is something that keeps me sharp, but allows me to explore other businesses and through that better understand my own.

This year on the list is to better understand Options Trading, having been a skeptic, I’m beginning to scrape the surface. The best explanation I’ve heard is, it’s options are about directionality, you’re buying an option on a direction of a company.

So, I’ve started with a few hypothesis, I believe this company is going in this direction, then found information to stack up and against that hypothesis. Then you buy an option on that.

I like that ethos, when you’re building a business you have to make lots of decisions on directionality, it’s not that you know precisely (although you probably have a gut feel, it’s that you think things are heading that way, and you need to adjust. Of course as the future becomes nearer you can get more predictable.

Then you can band your team around that, we’re going this way.

I was in a meeting yesterday, sharing the story of how a client of ours was frothing over Average Attention Minutes. I think even I have been surprised at how instructive it has been.

This one metric allowed them to understand, where across their campaigns, their content was best at changing the view of their target market. Now it’s not telling all of the story of each component but provided a filter whereby they could begin to understand.

Funnily enough, this morning, I was browsing my old delicious account and found an old post of mine, on Time Marketing, back in 2008.

Time is even more scarce than it was then,  in the last 6 years media options have only proliferated. What I’m seeing is (finally) a trend towards higher quality story telling, whereby it’s not designed for everyone, it’s for you. I’m even more curious to see how the likes of Netflix, Amazon Prime and Apple play in this.

I still think it’s a long way off, true benchmarking of time between mediums, but in a digital eating all communications world it’s not as far away as you think.

I’m a Netflix customer, I pay the $7.99/month for the service, it’s great. In particular I feel like I’m recreating the Discovery channel experience when I was younger, watching documentaries and then movies/tv shows as I want.

I think they are over hyped a bit, their recommendations recommend things Netflix knows I’ve watched, they could do with a social component (ala Spotify) or at least a way to recommend to friends.

But that aside I was thinking the other day, what if they opened up a free ad supported version?

1) I think most current customers would keep paying

The price is incidental really.

BUT

2) It would open up a big market

Those that don’t want to pay that extra part, would suddenly have access. Now, in reverse this is what Hulu tried to do, go ad supported first then add premium. But I think the Netflix model (partly due to their dvd revenue business) has allowed them to build their loyal customer base.

3) It would generate equivalent revenue

The video advertising market has progress a lot in the last few years, with even AOL saying last year they were selling out their inventory. So what is different now is that brands want to buy more video ads online, they love the targeting and it’s a great supplement to the rest of their mix. Lets say Netflix could sell it at $0.10 CPV, half of what you’d pay on YouTube. That means a customer would only have to watch 80 ads/month to make the revenue.

The average american watches 5 hours/day, if Netflix was getting 30% of that viewing time, that’s one 30 second ad every 20-30 minutes over the month.

Update: And it actually turns out the current subscriber averages exactly that.

4) It could even produce upside

Depending on how well the ads are targeted, they could even ask for more. In this scenario below I’ve given a ranges of CPVs to figure out the ads per hour needed to match it.

You can download my excel here if you want to have a play: NetFlix Calculation. But it shows at the higher end you wouldn’t need an ad every hour.

5) Hang on, why isn’t TV already doing this?

Quite simply, their model is sold on reach & frequency, they make more by selling more (natural) but at an incremental discount they have lost value in the long tail. Viewer 1,000,008 is less valuable than viewer 500,000 in the tv selling model. In digital, they are as valuable. TVB have an example here of a cost of $1.98 per 1000 homes.

See this, Price vs Audience size.

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For the sake of this post I haven’t gone into, TV production costs (as Netflix needs this in the eco-system to provide), change in acquisition and/or change in product. My view is Netflix has the potential to grow in the eco-system, not replace the eco-system. In that change it would also have to pick up components that broadcaster provide.

As HBO cuts the cord this coming March, Netflix sits on a goldmine really, what are they going to do?

I’m an avid Instacart user, why? Because it means I eat out less, it’s easy to do and who doesn’t like convenience. This simple app lets you order items from your local supermarket, then select when you’d like them delivered.

Yesterday whilst preparing an order, I realized a few things. Instacart because it isn’t a supermarket but has all the data a supermarket should be able (but doesn’t really) utilise, they could do some amazing things to innovate in bringing digital thinking to food shopping.

Here’s a few thoughts:

1) They can do specials.

Discounts off food, and like the supermarket these will be paid for by the brands.

2) They can target these offers

They know my address, general profile information by zip but also what I spend and categories of shopping.

3) They can optimize against performance

Imagine as a brand, optimizing per basket add. You only serve the offer up to people in a limited area, customize your offer and optimize against basket adds. You can then roll that out national or by zip code.

4) They know (and can affect) loyalty

Or going a step further, you could incentivize or pay for loyalty. Pay more for someone that adds your product to their basket four times in a row.

5) Drop off campaigns

Target people who used to buy your product but haven’t in the last three shops.

And that’s just the start, I look forward to seeing Instacart opening this up to brands, I imagine at the right time this will be massive for them.

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PS

This is also a potential Amazon Direct play. They already have the ad engine and recommendation engine just not targeted at this area.

I’ve been absorbed in product literature of recent, one thing that stuck out to me was this Drucker quote:

“The customer rarely buys what the company thinks it sells him. One reason for this is, of course, that nobody pays for a ‘product.’ What is paid for is satisfaction.” Companies think they are selling products and services, but in reality people hire those products and services to get jobs done in their lives. via FastCodeDesign

Products and services slot into these jobs, if you can:

1) Capture people naturally as they complete the wider jobs you assist with

2) Acknowledge & inform the steps before/after

3) Ensure successful & seamless completion of that job.

You become an essential tool.

This is something early on, we realised at Y&S, in those days people didn’t know what digital marketing was/is/how it could help. So we built a strategy around capturing the person who would be researching, to figure out how to solve their digital problem and make them look good. That then got us in front of more businesses… and in turn more business.

With Nudge, we’re optimising towards this a lot, how can we make our role in the campaign seamless. How can we tick the three boxes above. Lots to do.

If you’re like me, you like to do as much electronic transactions as possible, it means carrying less cash and also being able to study your behaviour.

Living in the US that’s not as easy as it was in NZ, the banking system is very outdated, for example when I pay my rent I log into TD Bank, hit bill pay, they then print a cheque and send it to my landlord. Nuts!

That aside, I’ve been playing with Acorns, which is a little app that pulls in your transaction data and rounds up each transaction to the nearest dollar, then once it hits $5 it will scoop that up and put it in savings.

Now it is automatically invested, in a fund of your choice. I’ve been doing it for around 6 weeks give or take and saved about $66. Not the most amazing amount but it is an automatic behaviour which happens in the background. It’s like scooping up a small amount here and there which isn’t noticed and then over a year will add up.

Very cool.

My current strategy is to build that up, then at regular intervals I’ll scoop the money out and put into my other long term investments. As whilst it’s nice you earn interest on it the options aren’t that great.

Nonetheless a great little app and a way to build more automated savings into your life.

In a joint Q&A with Bill Gates at Washington University in the 90s – Warren shared some of his great wisdom to the students. Here are my top takeaways:

1) Developing great habits
He says  “the chains of habit are too light to be felt till they’re too heavy to be broken”. Re-iterating that it’s vitally important to develop productive habits when you’re young, as when you’re old they’re much harder to change.

2) Focus on moving forward

You should “never look back, don’t worry about anything”, you can’t change that, focus on where you’re going. Don’t be wed to the past – it’s already the past.

3) Play the hand you get

“You play the hand you get, play it as well as you can and be thankful enough”.

4) Turning horsepower into output

He talks about converting all your horsepower into output, that is spending your time meaningfully, on the things you’re good at, Bill Gates chimes in about how he gets Ballmer to look at his calendar and critique as to whether he’s doing that.

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I’ve included the full interview below.

httpv://www.youtube.com/watch?v=ldPh0_zEykU

I enjoyed this article Bringing the dumb pipe metaphor to email: Why Google wants to replace Gmail, talking about how email is a blunt service. As in it is a delivery mechanism.

The term dumb pipe analogy comes from networking lingo, it’s where someone provides a connection from A to B but don’t layer any services on top. The telcos that power our iPhones make a great example, as Apple controls that device whereby the telcos are restricted to just providing the data & connectivity for it to work.

The problem is email’s over-used and misused everyday. From transactional data, to communication to collaboration, so Google is working on putting a layer on top to make it more actionable. A Facebook newsfeed for email.

It’s a good framework to think of, in any industry the first challenge is building the pipes, it’s what we’re doing with Nudge building out the measurement, the second challenge once the pipes are in and well used is layering the intelligence on top for heavy users.

The third layer? Opening up an eco-system so others can build on top of that.