About Sy

Innovation Lead in the Payments Processing Market. Looking for fun in all the right places :)

Would you buy stuff on Facebook?

Posted on October 12, 2011 by Sy

A subset of marketers now have it between their teeth that the next big thing is buying things using Facebook. This article at econsultancy gives the example of ASOS being the first to launch a fully fledged store front on their Facebook Page. Is this the future of commerce? – I think not, and it shows a misunderstanding of Facebook’s strategy.

When marketers look at Facebook they see

A big online marketing portal where customer interact with your brand
A proxy web page where you can interact with a customer without having to put them through a long winded sign up process
Flavour of the week.

To be fair to the marketers, Facebook is all those things, but if Social Commerce isn’t making ASOS any money then how should Facebook and Commerce go together? To answer that, we need to look at how Facebook see themselves.

What do Facebook see themselves as?

Facebook see themselves as internet infrastructure. The would like to own identity, meaning that you won’t have to sign up for another service again if you have a Facebook account. To Facebook it makes perfect sense that anyone starting a business today, would simply allow you to log in using your existing Facebook identity.

This gives Facebook a lot of data.

Facebook use their data to define the relationship between entities. So for example

Person likes Brand
Person listens to song
Person attends event
Person watches movie

Using verbs is the big thing I took from the #f8 conference. Going beyond like to “listened to”, “watched”, “attended”. As a brand, this is the next logical evolution of using Facebook. Not only can you engage your customers, you can see which customer interacted with which marketing activity or product. This is what Facebook call the “Open Graph”. It’s a word you’re going to hear a lot more of in the coming decade.

Where does this leave Facebook Commerce?

What’s missing from the list of entity relationships earlier?

Person buys thing.

“Person bought ASOS Black Shoes” is something I can see other people clicking like and commenting on. It happens today, it’s just not automated. Yet your developers can build that, right now. If you already have that data in your database, it needs to be in the open graph.

This changes Edgerank significantly, because there are a ton of activities that customers were unsure about clicking “like” or “share” with. This new lower friction brand interaction is where the money is.

What’s next for Facebook and Retail?

Brands get lost in the Facebook page and think of it as a landing page. Contrast this with the new Nike running mobile app which updates a customer’s timeline with each run.

Applying that to online, or bricks and motar commerce; I’d consider

What actions (verbs) to your customers do with your brand?
Which of those brand interactions can you capture via the open graph?
Which product interactions can you capture?
How can you use mobile and facebook to add value?
How can you use location and facebook to add value?

Imagination is the key. What are your thoughts for how to move someone from “viewed” to “bought”?

Mobile Payments – Will they change your day?

Posted on October 11, 2011 by Sy

You know that big search giant? Google, that’s the one. Their Mobile phone operating system Android is doing pretty well. I happen to think their next big thing is payments. Want to know why? Read on…

Since Google announced their Google Wallet, mobile payments went mainstream. You as a customer probably think, why do I need my credit card on my phone, I’ve got a card in my pocket right?

I have a lot of sympathy with that view. If you want to pay your credit and debit cards work pretty well. You know where you stand with a bit of plastic. Check out the video above for a quick demonstration of what Google propose replaces your plastic

Why put payments on your phone?

Because it’s just downright handy that’s why. It fits into your pocket better than a wallet stuffed with everything and you’re more likely to have your phone with you, even when you don’t have your wallet. You already prefer your phone to your wallet, payments are just catching up with you.

That’s nice, but why do banks care?

Whenever banks care about something, it raises an eyebrow. They’re not known as an altruistic bunch. The banks care about keeping you as a customer. You are valuable to them in that sense. With Mobile Network Operators, Visa and now Technology companies launching a wallet, the threat of losing you looms over the horizon.

Banks may not make much money from being involved in wallets, in some cases they actually lose a little money because the fee’s they make are a bit less on contactless or mobile payment transactions

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The business case for banks

The problem is until it makes money, banks won’t run towards mobile payments. As much pressure as they’re under to improve customer service now that tax payers are a major investor the pressure to survive and not go under is greater. So banks have to figure out how to make money out of Mobile Payments. The Math goes a little something like this.

Cost Reduction

Customers who have more than one card – reduced – less plastic cost
Cards never need replacing – less plastic cost (as adoption grows)
Drive customers to self serve on mobile – less branch / contact centre cost

Opportunities

Coupons / deals using mobile device – unknown benefit
Context sensitive advertisements (buy it now) – unknown benefit
Value added services such as Personal Finance Management

It’s clear adoption is going to be crucial to getting any benefit from Mobile Payments. Without regulation or a mandate from Visa / Mastercard this could get messy. The opportunities require banks to provide you with offers for things you are likely to buy and use their card to buy with. Look for offers in your mobile wallet to become common place towards the end of the decade.

The long road to adoption

When it comes to adoption, the Merchants are crucial. From Tesco and Walmart right down to Papa Joe’s little ice cream place. In the next 5 years, the big names where you do your weekly shop, will change the devices you use at their checkout. When this happens, there is a good chance they will put a contactless device there.

The temptation to merge their mobile marketing and payments capability will lead to increased adoption.

What happens next

One thing is for sure; Google will seed the market at a loss, and make money from the advertising. That will be tough and near impossible for anyone to compete with, without closing them out through regulation or lawsuits.

Your data will be the price of all these free new services. So don’t worry about new charges.

What are your thoughts about how Mobile will play out?
Will banks invest to work with Mobile Payments?
Who will win the Mobile Payment race?

Big Data = Big Brother??

Posted on May 30, 2011 by Sy

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Big Data can make your life simpler, profit for businesses and at a lower cost than traditional business intelligence solutions. Sound too good to be true??! Read on…

What’s the problem with Little Data?
When you call a bank, they essentially validate who you are, against the information you gave on an application form. The way they make sure that is you, is by validating that against a credit agency (like Experian or Call Credit) to make sure you are who you say you are, and that you can afford what you are buying.

Now as you well know, a lot can change between the day you opened a current account and today. Not least your mobile number, email address and importantly things like your lifestyle and buying habits. What you buy and wanted 10 years ago, are very different to today I imagine!

What is Big Data?
Many modern businesses are made up of products that have been bolted on over the years. These systems rarely talk to each other, and if they do, it’s even less likely the business is linking the data to be valuable for them, and valuable for you.

Big Data describes the patterns that emerge from analyzing trends across systems inside and outside the company.

Companies like Cloudera & Datameer specialize in very quickly doing what business management have dreamed about for at least a decade, without the expense of a data warehouse, and in real time. They have the tools to connect to all of your data sources, then provide very visual, actionable analysis.

Where does Big Data come from?
As you go about your life, you leave behind data, like a trail of crumbs. Every time you correspond with a company, government department or make a purchase – all of that data is logged. What’s more that has been standard procedure for many years.

On it’s own in a dark corner data about what you bought for lunch isn’t very valuable. When that data is linked to data in other dark corners it becomes tremendously valuable.

What can you do with Big Data?

Predict when you might be coming into financial trouble (because your MOT and car insurance is due) – and offer you a temporary credit limit increase (That’s helpful banking!!)
Send you offers or deals from Burger King if you eat and McDonalds a lot – saving you money, and making money for the bank by selling that data. (That data might also be of interest to a health insurance company!!)
Check your driving record against the DVLA, instead of relying on you to inform them of speeding offenses etc.
Offer an appointment with your bank branch manager when you are looking for a new house and asking friends for advice on social networks.

I’m sure you get the idea, and there are plenty more too. The Big Data revolution has the potential to make your life a whole lot simpler, whilst giving struggling companies another way to make money if sales are down.

What about my privacy?
Always the big worry. The key will be to make all of these services opt in. Under the Data Protection Act and Freedom of Information Act, no entity can store information without your express permission.

As I find myself saying often lately… your data is the cost of free

Will you take advantage of Big Data?
Companies are heading this way, very slowly. Centralized contact data bases, improved cross business data sharing, and developments like data.gov show even the UK Government endorses a Big Data future. Big Data doesn’t have to mean big brother, and doesn’t have to be feared. For most of us it will mean less painful interaction with companies that have the data they need to actually be helpful. Some further reading on how Big Data is different from Business Analytics

What do you think of Big Data?

Will it be profitable for business?
Will it struggle against privacy laws?
Do you trust it?

Hey Techrunch: This is What’s really happening in Payments in 2011

Posted on April 10, 2011 by Sy

So Techrunch have been spending a lot longer looking at Payments lately. Their high level overviews suggests that they just don’t get it yet.

The article suggests the 5 or flavors of the month in Payments (Facebook, Square, Apple, Google and PayPal) respectively, all have a viable play at the wallet. Which is fair, but misses the big picture. They’re not playing in whitespace. Payments already happen.

What’s really happening

Let’s skip right past the hyperbole and make a bold prediction.

2011 isn’t the year for payments at all, because nobody quite see’s all the parts of the puzzle. Bricks and Motar retail is a $4 Trillion industry. Online Commerce is a $400 billion industry. Mobile, Social and Virtual Currency payments combine to about $4 Billion in 2011 (US based figures, do some googling…).

Defining the Change

The likely outcome is that these will all converge. They can only converge by working with the infrastructure that already exists within western markets (emerging markets are a much more open play for startups). Try as they might in the West the start up brigade cannot circumvent financial institutions or the schemes.

By the same token: Try as they might, financial institutions can’t ignore the fact that a large percentage their customers are on Facebook.

What financial institutions need to do

So your customer is on Facebook, and everyone is gunning after payments, outsourcing CRM and your brand is losing value. Whether it’s PayPal, the Mobile operators or the startups, the squeeze has started. Your branch network and existing customer base is a great asset, but consumers are changing.

If I were a financial institution I would:

Develop a strong presence on facebook
Build your e-portal into the page on facebook
Talk to customers via the web chat / page
Help them with the e-banking portal
Speak to facebook about a revenue share on virtual currency payments funded via ACH / Direct Debit

What the startups need to do

Google are interesting, they’re making a more direct play at sitting on top of Mastercard, and working with verifone to win the physical card sales, and bring those into the searchable world. Selling advertising revenue to reduce interchange is smart. Facebook, Square and Apple all have some way to go to reach that point, with segmentation strategies. Amazon too have a horse in this race.

If I were a startup I would:

Work with schemes (Visa / Mastercard) under a revenue share
Develop an e-wallet capability
Sell that to financial institutions as a whitelabel, brandable product

The dream would be if you knew a company who already works with financial institutions for technology, that was able to do all of this for you. In my opinion there is a killing to be made, helping banks go social. Consultancies will spring up in this gap in the next couple of years. Although having seen a recent KPMG presentation on the subject. 2011 isn’t the year for payments.

I have my eye on 2014.

Your thoughts.

Who’s going to win the start up race?
Which banks are embracing social well?
Does anyone in the market have a holistic view?

Why Our Society Needs Balance

Posted on March 29, 2011 by Sy

I was struck by an interesting if somewhat sideways observation from Ceasar Milan… ‘The Dog Whisperer’ when reading Scott Gould’s blog on Productivity vs Creativity

“Mother Nature always wants to be balanced. So there’s no age where they don’t want to return back to normal. I have worked with dogs that are 11 years old, 13 years old, which you witness in the show. I worked with a dog that was 13 years old that was extremely territorial to her food. And I was able to accomplish a calm, submissive state, which is allowing for you to create rules, boundaries and limitations. The mind backs away from the food. So in their world, they are always ready to balance. It’s the human who fights it.”

Finding Balance
It is in our nature to find balance, but our social conditioning has made us seek social reward, which is given for adhering to the norm. The ‘Overworked’ – work hard – play hard attitude prevails. Although there are nuances, based on social groupings, in the Western Capitalist societies this is the norm.

Social Conditioning
The nature of corporate driven consumer based capitalism, sucks value into monopolies and rewards hoarding. Capitalism needs balance. Democracy and the judicial system alone have failed to provide that balance, since political parties and judicial review is blinded by the status quo.

The very measure of success being more money = more rewarding is causing the problem.

The Hoarding of Value
The act of making money alone isn’t the problem. The systemic ability to hoard, capture, and suck that money up the wealth chain is. There has to be a reward for building, maintaining & improving. However, the current economic system needs to sell a consumable product, in order to improve next quarters revenue figures also has to socially condition you with advertising to want to buy that product.

Punishing sustainability
We don’t build sustainable products because they generate less reward in our current economic system. That mechanism is the flaw, not the idea of capitalism all together.

Instead of rewarding quality, we reward the ability to make money.

I don’t believe for a second there was ever a master plan to get to this point, it just happened because we believed making money could only come from quality. Time has proven this naive.

Real Growth you can believe in
The problem is, growth alone has been attributed to improved living standards. Growth = better life has been the economist’s, politician’s and business man’s Modus Operandi for decades, without clear evidence of that being the case. Growth = Better life FOR SOME.

The Right Kind of Rewards
Growth needs balance. Human’s are a creative species and will invent. This invention needs reward. A well timed reward reinforces good behavior. Yet our rewards system is geared towards hoarding finance. You can earn twice as much by knowing how others will do, than by doing.

Our Academic education system, has produced adults who have not been rewarded for doing regularly enough. Our social reward system (pay) is geared towards hoarding that pay towards those who can predict and engineer business reality.

How can you help?
The recent ‘Start Up Britain’ initiative is nice, but what we really need to do is re-dress this imbalance in society. I’d argue Game Theory and rewards in education have a role to play here, as well as rewards outside of money.

Your thoughts

What other measurements of success can we bring?
Can we bring balance to capitalism?
What role does education play?
Are you striving for what you need, or what you want?

A Framework for Relationship Capital

Posted on March 20, 2011 by Sy

I’m willing to bet you can name a few products that you’d never buy, but think the advertisement’s are great right? (I’m looking at you citroen advert). Finding great marketing that speaks to your customer’s persona & values is the end game.

That shared values relationship with your customer is everything, and keeps you in business. The major problem with large corporates is somewhere along the line this was forgotten in the name of cost cutting. In the never ending search for efficiency the customer lost out. (Press 4 to be put on hold for another 20 minutes…)

Word of Mouth is the Marketing you know
Thinking with your customer hat on, you know when a restaurant waiter has been exceptional. There is a social code for it. We tip them, and think highly of the restaurant. We may even recommend it to friends. This is Word of Mouth, and it’s the oldest and most well known type of marketing. The equation used to be simple.

First Class Service = Repeat Business.

With larger organisations this still applies… but when a call centre worker has a script and a customer has a problem not on that script. The picture breaks down. Your employee isn’t empowered and neither is your customer. Enter Relationship capital.

Happier employees = Happier customer
The way to deliver emotional integrity is by empowering your employee’s to make decisions. This is something that can’t be taught in a class room & requires the right kind of hire. Zappos call it “Delivering Happiness”.

Moving from the script to giving more power to your staff can seem like a scary idea. It is much harder to measure quality than quantity after all. Yet corporates are waking up to the concept. Just look at how the banks are bending over backwards to be helpful to customers. I wonder if this will continue to be token marketing, or involve deep, culture level changes within business?

Your thoughts

How can you deliver more emotional integrity in your day job?
Have we all become too corporate?
Are you one of those frustrated employees not given enough autonomy?
Do targets and KPIs confuse the real picture of what your customer thinks of you?

Qwiki is the Coolest Innovation Ever – Here’s Why

Posted on January 26, 2011 by Sy

The fact that you can embed this thing, and have an instantly searchable – self generating, user curated information experience is just so FREAKIN cool! This can and will change how education works. Imagine how this could beef up your presentations? Sales? Ability to learn on the go. This is the kind of thing the internet was invented for! Will you use it?

Is Facebook overvalued? Will it fail?

Posted on January 16, 2011 by Sy

This question has popped up a lot since their recent $50 Billion valuation (albeit, speculators on secondmarket.com are trading Facebook ‘shares’ at a Market Cap of $70+ Billion). For those who lived through the .com bubble, alarm bells are no doubt ringing.

Does the massive growth they have experienced mean they will go the way of so many .com companies in the 90s?

Lessons from history
Facebook has avoided acquisitions, and is being advised by Sillicon Valley’s experienced heads. Peter Theil (PayPal founder), Reid Hoffman (LinkedIn founder), Sean Parker (Napster co-founder) have all been there.

Mark Zuckerberg is benefiting from their experience, and picks the brains of Steve Jobs, Tim O’Reilly and his trusted leuitennant Sheryl Sandberg (who build the Google Revenue model) regularly.

Yahoo, Google & Microsoft have all tried to buy Facebook, as has Time Warner and News Corp. If anything Facebook appears to have learned the lessons of what not to do from the .com bubble, very well.

Workable Revenue Model
The major difference is Sheryl Sandberg’s ability to build revenue from advertising. Facebook have figured out how to drive demand with advertising, as opposed to fulfilling a need like Google does. A young father with very few pictures will get an advert for a digital camera. In Google you have to know what’s missing, and Sandberg did a pretty good job with revenue there.

Facebook has nearly 600 million users, and they haven’t really focussed on anything other than growth yet. What happen’s when their core focus shifts from growth in terms of users, to growth in terms of revenue?

Challenges
In order to reach that point they will have to successfully

Break China
Complete an IPO
Become a part of internet infrastructure

Those are some big challenges, and I await with baited breath to see how Facebook tackle them. Facebook can still gradually fail, but it would likely be a steady decline rather than the rapid nose dive Myspace experienced.

NewsCorp’s takeover of Myspace was a revenue buy. Buying revenue so early in a company’s life before it has matured stunts it’s growth.

If building such a massive service didn’t make or cost money, I’m pretty certain Mark Zuckerberg would still be building it. He’s not in it for the money, and in a strange way, that commitment to quality is what drives their continued success.

Economic Impact
Facebook grew in size, and took on massive investments throughout the worst financial crisis since the great depression. To me that suggests we’re dealing with a very different type of organisation.

Expecting Facebook to become a sustainable business while it is still growing is missing the point. For now revenue isn’t their key goal, they want to change the internet, make it more open and useful. I doubt they will IPO until they get much closer to that goal.

Success Factors
If something far better than Facebook comes along then sure it could go the way of the old AOL, but it would have to:

Compete on products quality (Photos, News Feed, Events)
Compete on ease of use (Parents can use it)
Compete on network size (Network effect)
Build a successful revenue model
Gain massive investment from VCs and existing tech companies

In short, the competition has a mountain to climb. The one remaining huge hole in facebook is the differentiation between relationships. It assumes everyone is a ‘friend’. If a service could plug that gap, and grow at a similar ‘Moore’s law like’ pace they’d be set.

Google tried and failed. Myspace tried and failed. Twitter serves a different purpose. Facebook’s main competition is geographic (Russia and China). It’s going to take something very special indeed to dislodge Facebook. Building a successful social network isn’t easy!

How do you compete with Facebook?

In my view you don’t compete. You work with. Facebook has the social graph, and likely will for some years to come in the western world.

Do you think Facebook is overvalued?
Do you think it will fail?
How can Facebook sustain their growth?
What big challenges does it face?

How interfaces are changing retail experience

Posted on January 9, 2011 by Sy

It is said that the internet will kill the in store retail experience. Do you think this could change talking with someone in your bank about a new loan products? How about trying out new kitchen designs before buying?

How would you use this surface?
Do you think business will embrace it?
Would your company use it?
Could this revitalise the bricks and motar experience

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