July 03, 2008

The challenge of our real-time, multi-tasking world

I was sitting at my PC today, drafting my blog whilst skirting over the news headlines on my iGoogle homepage.

There were a few other windows open on my PC.

One for Wimbledon live on the BBC, which I can now watch through live streaming video. I like to listen to the radio commentary, so I also had BBC Radio 5 Live on my internet radio player, rather than listening to the BBC TV commentators.

I have a TV in my office as well and, as usual, I had that tuned into Bloomberg News to track the business and stock markets, with the sound on mute.

Anyway, I was happily clicking between iGoogle news, Internet TV-Radio and TV News whilst clattering away on the keyboard drafting this blog when my Skype phone went off.

Read more ...

July 01, 2008

Spain win Euro 2008 thanks to Twitter

Actually, it's the other way round: Germany lose Euro 2008 thanks to Twitter, according to CNet News.

If you're not familiar with Twitter,  it's a great way to communicate short messages and links and views, using SMS texting on mobile, blackberry, as well as short updates via Facebook or the internet to Twitter.

It's an aggregation of thought streams for the great and the good.

CNet take it a step further with the idea of Angela Merkel providing advice to the German team during the game in real-time, such as "Tell Torres, he's a girl".

Unfortunately, Twitter's reply service was down at the time, so the team got confused about why they should call him a girl and that allowed him to get past Lahm and dink the ball over Lehmann to score the only goal in the game.  The winning goal that is.

They take this on to illustrate other ideas, such as Gordon Brown twittering to our Olmpic racers that they should "imagine they are being chased by Margaret Thatcher".  That'll make them run faster.

I'm just wondering what Alan Sugar of The Apprentice: You're fired would Twitter to Gordon Brown?

The Long Tail of Banking

Aneace Haddad has asked me to explain more about my idea of a Long Tail in Banking.

 

The Long Tail in banking would be a mass market of niche microgroups that incur no cost overheads to manage but, for each transaction, creates a small profit. As the mass of niche transactions build, the small profits become big profits. This is not far off what banking does anyway – processes massive volumes of small transactions – but, right now, we focus upon making money out of account management.


Account management involves staff to deal with the customer onboarding process, KYC and AML requirements, service on the telephone and in branch, as well as transaction processing and account maintenance.


However, in the case of the long tail of banking, there are no accounts. You want to reach people who were previously underserved, because it would not be profitable. Using technologies such as the internet means that, today, you can serve them. You can serve them because there are no people involved, no account onboarding process, no branches or telephone support services, and no account maintenance costs.


So, are we talking about the unbanked?


Yes, but a whole lot more.


We are talking about children, students, the unbanked, the underbanked, the grey market, the welfare market, the pensioners, the migrant workers and more. And we are talking about social lending and saving, PayPal, prepaid and mobile.


Social lending sites, such as Zopa and Prosper, are connecting the long tail of savers and borrowers.  This is best demonstrated by Kiva, where anyone can invest a few dollars in microfinancing people globally.  A global connection of niche players.  I've blogged about these sites before, but they show one aspect of internet financing that is based around a long tail model.


PayPal is an even better example of showing a great way to create profits out of the Long Tail, although its reach goes far beyond the long tail.


As mentioned yesterday, PayPal provides a method of moving money between people globally in multicurrency at low cost. PayPal claim to reach out to over 160 million registered users, with one in three requested at least one payments transaction every quarter. PayPal make their profits and revenues by charging a $0.30 flat fee per transaction as well as a variable percentage of 4.9%, reducing to 1.9% or 2.9% for Premier and Business Accounts respectively. There are also fees for cross-border transactions.


The real secret of PayPal’s operation is that:


(a) it builds on the existing bank network, as you have to have a bank account to use PayPal; and

(b) an email saying “you’ve got money” makes people open accounts.


The overall result is that PayPal’s model has increased reach and breadth immensely by linking people to money using viral networking. They do reach the long tail through this structure but, in terms of the long tail, they also have a major restriction. You have to have a bank account and proof of identity to move monies around with PayPal.


So there’s a barrier for some of the children, students, unbanked, underbanked, grey market, welfare market, pensioners and migrant workers.


So we need to look at prepaid and mobile for these folks.


Prepaid provides a great way to reach the unbanked and underbanked, as mentioned last week.


In one of the best examples of a prepaid programme, migrant workers in the United Arab Emirates, working on their massive construction projects, are receiving their weekly and monthly wages on prepaid cards.


They can get cash and pay for stuff around Dubai without a bank account, and the beauty of this card programme is that it comes preloaded with one cross-border money transfer per payment period for free.

Migrant workers can receive their monies and send money home painlessly.


Prepaid for kids as gift cards, or for students as a budgeting method due to weekly restrictions on balance limits of usage, or for government welfare and company benefits is seen as one of the strongest markets for reaching the long tail of finance.


However, there is still a restriction here.


To get cash, you have a habitual movement of people that creates a criminal focus.


I only discovered this one recently, and it was the idea of moving monies around on cards that highlighted an issue.


The issue is that in countries where the criminal fraternity are represented typically by gentlemen with large muscles or big guns, receiving money on a card is a problem. The problem is that you have to go somewhere to get the card, and then convert the card into cash.


Apparently, for example, many people would know that they were getting a prepaid card on a Friday morning from their offspring overseas. So they would toddle down to the Post Office on a Friday morning, pick up their post with their prepaid card, and then go straight to the cash machine and convert the card into cash. As they walk out of their Post Office with their lovely lolly, the men with big muscles and large guns jump out from behind the nearest lamppost and nick the dosh off them.


Whoops. I apologise as I’m getting a little colloquial here.


The point, I am told, is that card payments create physical movements that can be tracked and targeted by criminals.


And so we come to mobile. 


Mobile overcomes the issue because you do not have to go and physically get a card and then translate that card into money.  You can receive a mobile payment anytime, day or night, and then use the money flexibly either on your mobile account or as cash, but not by always going to the same place at the same time, every week or month.


Mobile overcomes these issues because:


  • almost everyone has one, or can get access to one,
  • you do not need to have a bank account to have a mobile,
  • mobile technology is cheap to access and easy to use,
  • mobile builds upon internet technologies to become even cheaper to access through VOIP
  • you can move monies wirelessly, silently and easily between people
  • the money movements do not create physical movements that are necessarily habitual and tracked by criminals
  • mobile is global 


... one could go on and on.


Whether you prefer mobile or prepaid as your focus, they combine to create the real long-tail of banking. Mobile and prepaid can reach one and all, with micropayments that do not add overhead to the bank infrastructure, but can build volume for small transaction fees on each transaction.


Suddenly, the billions of unbanked and underbanked, the long tail of society, can be served through the financial system at virtually zero cost overhead, with margins that are attractive enough through micropercentage fees on microtransactions.  Billions and zillions of microtransactions.


Think about it.


If Amazon and iTunes can make 40% of their profits from the zero overheads of stocking the zillionth book and song, then banks can make profits from the zero overheads of processing payments transactions through internet, prepaid and mobile on the banking network.


That’s something that rings of the long tail of banking isn’t it?

June 30, 2008

PayPal’s Tenth Anniversary

I wrote an indepth analysis eighteen months ago about PayPal’s 100 months birthday and now they’re celebrating their official tenth anniversary, so I thought I would add a small addendum. Although I say it’s a small addendum, it’s quite an interesting one.

Basically, I was updating some old slides about PayPal and thought that I should track their number of users over the years, as they do publish these numbers. First of all, I looked up the last published quarterly results from PayPal on the eBay website.

In their latest company presentation, published June 16th, they have these figures:

  • PayPal operates in 190 markets using 17 currencies
  • A third of people in the UK have a PayPal account
  • Over 100,000 websites accept PayPal in Europe

Read more ...

June 29, 2008

Arguing about the Head and the Tail

Anita Elberse has created a great discussion in the Harvard Business Review this week about the Long Tail, the theory expounded by Chris Anderson, editor of Wired Magazine. 

The theory goes that you can make as much money as an online retailer from the 80% of specialised products that sell occasionally, the tail, as retail merchants make from focusing upon the limited best-sellers in the head of the sales line.

Anita states:

"In 2006 just 20% of Grand Central’s (book publisher) titles accounted for roughly 80% of its sales and an even larger share of its profits."

She also goes on to look at Rhapsody, the online music store, and finds:

"The top 10% of titles accounted for 78% of all plays, and the top 1% of titles for 32% of all plays."

As a result, she concludes that:

"For Chris Anderson, the strategic implications of the digital environment seem clear. 'The companies that will prosper,' he declares, 'will be those that switch out of lowest-common-denominator mode and figure out how to address niches.' But my research indicates otherwise."

Chris Anderson has already posted a response on his blog:

"She finds the top 10% of titles (out of more than a million in that data sample) accounted for 78% of all plays, and the top 1% account for 32% of all plays. That sounds pretty concentrated around the head, until you reflect, as she notes, that 'one percent of a million is still 10,000--[...]equal to the entire music inventory of a typical Wal-Mart store.' 

"This is a good moment to remind everyone of the normal definition of 'head' and 'tail' in entertainment markets such as music. 'Head' is the selection available in the largest bricks-and-mortar retailer in the market (that would be Wal-Mart in this case). 'Tail' is everything else, most of which is only available online, where there is unlimited shelf space. 

"So in the data she cites, the head of the online music market represents 32% of the all plays, and the tail represents 68%.  That's certainly no challenge to the Long Tail theory; indeed, it's even more tail-heavy than the data I cited in my book (probably because I used a more generous estimate of 50,000 tracks for Wal-Mart's inventory)."

Nothing like a good argument is there?

Why am I bothered?

First, because the Long Tail is an important theory about modern retailing.

Second, because it plays to the heart of online channels and why we virally network socially through blogs and virals in a networked world.

Third, and most important for readers in banks, is that there is a Long Tail in banking that's emerging through prepaid cards and mobile telephones.  Take note of the views of both Anita and Chris, as they are crticial discussions in how to make money in these markets.

June 24, 2008

You can’t hide anything anymore

A year ago, Wired magazine had the front page headline: Get Naked. It made me buy the magazine and turned out to be a fascinating article all about how the world is now transparent. Nothing can be controlled or hidden anymore. You cannot keep anything secret. It will all get out there somehow, some way.

Since this article, I’ve noticed how true this is. Embarrassed politicians, corrupt traders, covert chief executives and their cohorts should all be afraid. Very afraid.

You cannot hide anything anymore. Information will out, whether it be through Facebook, blogs, emails, instant messaging, chatrooms, text messages … you name it. Information will out.

Here are a few examples of how disruptive these trends are proving to be.

Read more ...

April 11, 2008

Where Trading and the Internet combine for Liquidity

I saw this blog from a VC in NYC today.  It's entitled: "We Need A New Path To Liquidity" and I had to read that as I thought it would be all about how to trade out of recession or something.  But no.  It's about Microsoft, Yahoo!, Google, AOL, News Corp/MySpace and all these other players dickeying about with the internet as though it was a toy.

The problem our VC friend is grappling with is the fact that internet entrepreneurs spend years building their platforms.  If they take off, they then "need a way to get paid for that effort. And those of us who finance their efforts need to get some return on our investment" and "without a path to liquidity, all the innovation that is being created by the entrepreneur/VC equation will stop happening."

OK.  So just IPO.

Ah. There's the rub.  The IPO market has apparently shut down, and so that is the issue - how do you monetize your investments when you cannot bank them anymore.

The leads him into dark pools, and Goldman Sachs' TrUE ("GS Tradable Unregistered Equity OTC Market") system.  A great blog on this from Roger Ehrenberg in May 2007, almost a year ago.  

His point is that you then do not need to IPO anymore, as these dark pools allow you tap directly into private liquid markets.

Yahoo!  lets get in there.

Worth reading the more than 150 comments as well.

April 10, 2008

Microsoft's Vista is better than the Mac

Not really, but there is a lot more debate about its pro's and con's amongst the tech community, with at least some saying it is not that bad.  Not many, but a few.

I reckon that 95% of Vista users have not had the issues I have had, and are happy.  They may not have old hardware and lack the drivers.  They may not find things locking up, hanging up or just not running.  They may not have software spam filters that are incompatible with the newly included filters that Outlook 2007 and Office 2007 builds in.

So yes, there are some who love it.

Like this blogger, Preston Gralla, on Computerworld.  He says it's better because it runs more software, is safer, cheaper and more open than a Mac and, most of all, is not managed by the vindictive Steve Jobs.  Many others disagree with this opinion, with Chris Pirillo providing a very articulate rebuke.  Even Gartner have joined the bandwagon by saying "Windows is collapsing".

Most of you know my own views.  I've never owned a Mac, have always used Microsoft and just feel disillusioned with the way they've managed this roll-out, all the glitches, things not working and, overall, that Vista has been out for 15 months and it is only now that it is starting to become stable thanks to update after update.  So I'm in the 5% who are unhappy and have been kicking up a stink.  In fact, I sometimes worry that I have started to sound like a broken record, but this is important.  After all, it could determine the future shape of computing if Microsoft really did go kaput.

Regardless of all of these arguments however, the process has been a real pain for me, the others affected, Microsoft and the business world.  And to show what an own goal it has been, is demonstrated brilliantly by this advert for the Mac:

April 03, 2008

IBM staff told to get another life

OK.  After all my cynicism about Second Life becoming mainstream, mainly due to the Wild West nature of the Linden Labs offer, I take it all back.

My issue was related to mashups, bombing, cyberterrorism and more.  It was also related to the Second Life banking crash after they outlawed Gambling.

As Neil Katz, chief technology officer of IBM’s Digital Convergence business, states: “The internet, not just Second Life, is the Wild West once you get beyond the corporate firewall.”

Today however, IBM announced a strategic agreement with Linden to create a corporate virtual world that is secure, firewalled and enterprise ready in Second Life.

Wow!  Go, go, go you IBMers and get another life.

March 28, 2008

Watch out for the thought police

According to the Byron review of social networking in the UK, Facebook, Bebo, MySpace and others sites are to be censored, and Google, Yahoo, MSN and others must show SAFE SEARCH in clear options from the home page.  This is because some parents do not supervise their children's use of the Internet.

Next, we intend to bring riot police into any home that accesses any undesirable websites, whether there are children in the home or not.  Sorry, that was my joke ... or was it?

March 09, 2008

Microsoft's internal Vista docs released by law

A friend of mine sent me this link last week, having seen how annoyed I've been about Windows Vista.  It's a link to internal memos from Microsoft SVP's and other senior staff in Q1 2007, airing the same issues I had with Vista.  It's slow.  Graphics and software and peripherals aren't working, etc, etc.

I didn't write it up as I thought it might look like a personal vendetta against Microsoft, who I still quite like as a firm just to be clear.  The XBox is great.

Anyway, the New York Times summarised the story well, so follow the link to their site, and here's the rub:

Jon "upgrades two XP machines to Vista. Then he discovers that his printer, regular scanner and film scanner lack Vista drivers ... Steven, hears about Jon’s woes, he says drivers are missing in every category ... then there’s Mike, who buys a laptop that has a reassuring 'Windows Vista Capable' logo affixed. He thinks that he will be able to run Vista in all of its glory, as well as favorite Microsoft programs like Movie Maker. His report: 'I personally got burned.' His new laptop — logo or no logo — lacks the necessary graphics chip and can run neither his favorite video-editing software nor anything but a hobbled version of Vista. 'I now have a $2,100 e-mail machine,' he says (I know the feeling).

"It turns out that Mike is clearly not a naïf. He’s Mike Nash, a Microsoft vice president who oversees Windows product management. And Jon, who is dismayed to learn that the drivers he needs don’t exist? That’s Jon A. Shirley, a Microsoft board member and former president and chief operating officer. And Steven, who reports that missing drivers are anything but exceptional, is in a good position to know: he’s Steven Sinofsky, the company’s senior vice president responsible for Windows."

Ah well.  Nice to know that even those in the know got burned.

Ballmer's reaction?

"Righto".

What a ferengi.

March 04, 2008

I'm sorry, you are firewalled out

I regularly run workshops on the future of banking.

Part of the workshop explores the implications of virtual worlds and social networking on bank services, and what the world of banking might look like five years from now as a result.   Yep, you guessed it, we talk about Entropia, Second Life, Habbo Hotel and Club Penguin; we also talk about Facebook, MySpace, Bebo, Cyworld, Mixi and Badoo. 

The normal reaction at the end of such discussions is: “Chris, I never knew about any of this.  It’s fascinating.  Is our bank doing anything?” which kinda amazes me, (a) that they don’t know about it and (b) that they don’t know if their bank is doing anything.

Now the fact is that very few banks are doing much in this world of any note. 

ING, ABN AMRO, Royal Bank of Scotland, Saxo Bank, BNP Paribas, Deutsche Bank and a few others have messed about with Second Life.  Similarly, TD Waterhouse, Royal Bank of Canada, JPMorgan, the Co-operative Bank, Bank of America and a few others have thrashed around with social network experiments.  A few have tried to make a really strategic deployment to leverage this space, such as Wells Fargo, who have spent serious dollars on virtual worlds and blogs; and Fortis with the Join2Grow website, which is a real innovation for small business networking online.  Bank of America's copy for small business isn't bad, but Fortis have created a site that doesn't even carry their brand, which is why they get the reward. Social networks are not for branding, as people shun this in the real world, it's to provide platforms of participation.  That's what Fortis and Wells Fargo have been trying to create.

Regardless of whether what these banks are doing is good or bad, at least they are all trying and I'm sure some are reaping benefits (please add any other good examples to this blog if you have any).

But going back to "I never knew any of this was happening", I wondered why this was?  I mean, even the folks who use social networking didn't know a lot of what was really happening.  This is because they have a Facebook page "because my kids use it" and although they therefore are aware of Facebook and stuff, they admit that they don't get it!

I discovered the answer as to why most don't get it about eighteen months ago

I was at an annual kick-off internal conference for a client in October 2006, where the CEO of this major global organisation was addressing the audience.   This company has offices in almost every country, has a multi-billion dollar turnover, and is one that everyone would recognise.  They are also one of the most strategically led companies in the world, always ahead of the pack.

He began by saying how astounded he was that Google had just paid $1.65 billion to buy YouTube.  He was astounded because, as the most strategic company in the world, how could he not be aware of a company that was worth $1.65 billion?  He had never heard of YouTube.

So he called all of his direct reports into a meeting and said: “how many of you are aware of YouTube?” 

No-one raised a hand. 

He said, “well this morning Google paid $1.65 billion for them and so, as the most strategic company in the world, it is to our shame that we don’t know what they do.  Let’s find out.”

At this point, he switched on his PC and typed in www.youtube.com.

The computer buzzed away for a few seconds and then spat out the answer, “the corporate firewall does not allow you access to this service, please talk to the systems administrator if you are having a problem.”

This is the irony of the modern world, as nearly every large, traditional organisation is firewalled out.  Strategists, marketers, technologists, bankers, consultants, governments and more are all missing out on the most fundamental changes to our world because it is invisible to them.

This is why people tell me “Chris, I never knew about any of this”, because it is hidden away from them.  They spend their days working for companies that stop them from being involved with what they see as follies, gimmicks and timewasting websites, because the employees should be working.  That's why we employ them.

The employees then go home in the evening to become humans, and the last thing they want to do is waste time using websites that they don’t know why they exist because they want to play with their kids, eat dinner and have time with family and friends.

The world of today is passing by the generation of yesterday because the management dictate policies of yesterday to the world of today.

What the hell will they be doing tomorrow?

February 22, 2008

Facebook, MySpace and Bebo have a hiccup

Maybe all the talk of Facebook's privacy policies being a concern are finally having an impact on people networking online as Facebook had it's first drop in usage in January.  According to Nielsen's ratings, the number of unique visitors in Britain fell from 8.9 million people in December 2007 to 8.5 million in January 2008. 

The same was true in Europe also, with unique French users down 200,000 people to 1.87 million in January, and 23,000 Spanish users disappearing in January leaving 659,000 to kiss, date, hug and poke each other.

British Bebo and MySpace users are also tailing off, with Bebo peaking in July 2007 with 4.6 million unique users dropping to 4.1 million today, whilst MySpace peaked at 6.8 million users in April 2007, dropping to 5 million today.

Nevertheless, the millions of users are still worth noting, and social networking will not go away.   After all, this is a global phenomena with Facebook registrations in the USA still rising, and also with my friends in Asia telling me just this week about the success of Cyworld and Mixi in South Korea and Japan respectively.

Like Facebook, MySpace and Bebo, these are social networks for Asia that have also enjoyed similar success.  For example, 20 million Koreans had signed up with Cyworld last year which, when you consider the total population of South Korea is 47 million, is amazing.  90% of South Koreans in their 20s have their own page on Cyworld.

Mixi in Japan has had more modest growth because you can only join if you are invited by another Mixie user.  Even so, with 10 million users, they're not doing bad.

Just goes to show that the internet - as a relationship service - cannot be ignored and banks that want relationships, which they claim is the core of their business offer to their customer, still need to get a grip on this phenomena.

February 11, 2008

Fawlty Towers Conferencing

I think the last 24 hours must be a record for the catalogue of amusing errors, in hindsight, experienced during a brief visit to the Middle East.  I'm here for a two-day conference and cannot believe the journey down here.

It starts off with a small thing like BA, as usual, not having my meal selection because I chose a seat towards the rear of the cabin. That always happens ... so c'est la vie. 

Or should it be? 

After all, if I never get my meal selection because I sit in Row 20 rather than Row 10, should BA re-engineer that process? Possibly, as I'm a long-term BA frequent flier and, as this happens every other flight, I'm tempted to either (a) fly with someone else or (b) change my seat.

But I'm a tolerant guy and seeing how most folks seem to spend an inordinate amount of time in the bathroom shortly after the end of the meal serving, appearing grey and haggard as they leave, maybe it was a good idea to give the "Salmon and Eggs Hollandaise with Carrot and Pease Pottage" a miss.

Arriving at my destination, I see the conference firm's folks all waiting eagerly to check through the speakers.

"Hi, Chris Skinner.  I'm here to chair the conference and was told I'm staying at the Not Bad Hotel."

"Oh", says nice greeter and meeter checking her lists, "yes.  We have no car for the Not Bad Hotel, so can you wait there until one arrives?"

"If you say so", I say.  Tired, but not emotional.

Forty minutes later, tired and slightly emotionally irritated, the Not Bad Hotel's courtesy car turns up and so I jump in, relieved to be on my way.

Arriving at the Not Bad Hotel, I blast through to reception to ask why they hadn't sent the courtesy car as promised.

"Name, sir?" says the receptionist.

"Skinner.  It should be on the system.  Two nights."  Gggrrrrrrrr.

Then I realise why they hadn't sent the courtesy car as the assistant spends five minutes tapping away on the keyboard.  I can see a Computa sez no moment coming, so I ring my contact, the Conference Organiser.

"Oh sorry Mr. Chris, but we moved you to the Slightly Worse Hotel.  Do you mind?" says my contact.

At this stage, I don't mind the Not Bad Hotel, the Slightly Worse Hotel or any hotel.  I just want to go to bed.

I jump into a taxi to the Slightly Worse Hotel.  The taxi driver is a typical of the locality – wearing a ghutra scarf over his head, and a long beige coloured thawb robe – and he's decided to take me between hotels in his highly moisturised vehicle.  In fact, there's so much condensation in the car that we can't see a thing out of the windows. 

So he stops the car in the middle of the three-lane highway and jumps out to wipe down the windows.

As the screeching of tyres, blowing of horns and general shouts of something that sounded like the Arabic for son of a bitch rang through the air, my driver totally ignores everything and continues to wipe down the windows, chirping nice words like, "How many receipto's would you like sir?"

"Urrrmmmm ... shouldn't you get back in the car before you get hit by that truck?"

"What truck sir?"  As a ten ton, dual axle juggernaut flies past his ghutra.

Ah well, it's his life.

Once finished, he cheerfully jumps back into the car with a “that’s better”, and drives away ... with only slightly misted windows.

We finally arrive at the Slightly Worse Hotel. 

"How much is that my friend?" I like him now that he's shown so much bravery and given me ten receipts, plus a map marked with all the McDonald's here.

"How much you want to give me sir?"

"Urrmmmm ... I don't know.  Never been here before.  How much is it usually."

He smiles, with his moustache rising in a slightly off pitch smile, "however much you want it to be sir.  Make me happy."  He says, with a shrug of his shoulders and a slightly servile look at my shoes.

Now, I never knew that even getting a taxi over here was going to be like entering a Souk market, so I say, “I’ll give you half a dinar.”

“You’ll give me half my dinner, sir,” he says, “why thank you.  That would be twelve dinar.”

“No half a dinar, not dinner, was what I offered you.”  I’m now getting the hang of this.  He wants twelve dinar for a three mile journey and, generally based upon my experience of the region, that would equate to more like five dinar.

We start to haggle.

“Only half a dinar, sir.  But my wife and children could not eat a locust for such a pittance.  How would ten dinar sound.”

He’s quite an engaging character but, even so, “one dinar”.

“Eight.”

This goes on for about five minutes and we settle for five dinars.

I’m happy, he’s happy, and we go our separate ways.

That was until the concierge turns to me and says, “usually that journey is two dinar, sir, but we like big tippers here.”

Duh!

Anyway, into the reception to checkin.

"Name, sir?" says the slightly indifferent receptionist.

"Skinner.  Two nights.  Please."  I'm past the point of polite conversation.

"Ah yes, here you are.  Room 524 sir."

Phew, I have arrived.  As I go towards the lifts, I notice three people standing with big signs for my conference, so I go over and introduce myself.

"Hi, I'm Chris.  Is there a shuttle to the conference from the hotel tomorrow."

"You're Chris who?"  says the smiling conferencing lad.

"Chris Skinner."

Conferencing chappie then taps my name into his computer.

"Nope.  Are you a delegate here?"  He frowns at me.

“No, I’m chairing the conference, and I would not mess with me right now because I’m not the happiest bunny."

"Wassup?"  Treading on dangerous ground, he decides to give me a prompt for a good whinge.

"Well, I’ve just spent five dinar on a journey that should have been two dinar, and one that I shouldn't have taken at all because your lot sent me to the wrong hotel”, I snap.  I’m tired and getting slightly emotional after all.

“Oh-er, sir, look at you.  Aren’t you the shirty one?” he snaps back. “Anyway, no sir.  The buses are for delegates.”

“Excuse me?  You mean that speakers cannot use the buses.”  I am bemused.

“Maybe sir, but only if you’re very nice.”  I’m starting to worry about this chap as he’s got a rather strange manner about him, so I slink away and go to my room.

Now, I know I’m a sad old git, but my first ritual on arriving at any hotel is to connect to the internet.  I’m a net junkie.  I know.  Can’t help it.

I boot up the laptop, plug in the broadband connection and … darnit.  It doesn’t work.

I click on networking tools, wireless connections, unplug and plug back in again, reboot … I try everything I can think of and nothing happens.  So I ring reception.

“Hello, I think the internet connection in my room is faulty as I can’t get it to work.”

“Ah yes sir, we shall send you the technician.”  Very helpful.

So, I start unpacking and stick on the TV and tootle around … and after what seemed like a wait of days (25 minutes), Mr. Geek Squad arrives.

“Hello sir, I hear you are having trouble with your internet connection.  What seems to be the trouble?”  He smiles supportively.

“Well, I’ve tried every connecting way I can think of to get my PC onto the network and nothing seems to work.”  I plead, tired and becoming worryingly emotional. 

“What number are you dialling, sir?”   He grins grandly.

“I’m sorry?”

“What number are you calling for your internet connectivity sir?”  He beams broadly.

“I’m sorry but have I moved into the dark ages?” I stutter, shocked.  “Are you telling me this hotel, which calls itself Good, but Slightly Worse than the Not Bad Hotel I was going to stay in, does not provide broadband or wireless internet?”

“That is right sir.  You only have dial-up internet in the room.” His teeth are now so big and his smile so wide, that I’m kind of wondering what toothpaste and floss he’s using.  “Wireless is available in reception, but you may need to put some clothes on.”

No, I’m not naked, but I am in my nightclothes, slippers and robe.  So, that’s that.

Off to bed and up early for the conference.  I go down to the bus, which is empty.

Tschtch.  The bus doors open.

"Yes, sir?"  says the driver.

"Morning, I'm going to the conference."

"Yes, sir.  Where's your badge sir?"  says the driver.

"I don't have one yet", I respond.  "I'm picking it up at the conference."

"Oh no, sir.  Then you are not coming on my bus." He smiles.

What?

I think rapidly, and say, "How much?"

"Are you making me happy sir?"   I think the bus driver is related to my taxi driver of last night ... so we haggle and, for the going rate of five dinars, he takes the bus down to the conference centre with just me on it.  In fact, I think I'm th only one who can be bothered to come to the conference at 5:00 in the morning, but then I am greeted with the sign: “Welcome to our Conference with free wireless internet sponsored by XYZ Telecom.”

Fantastic.  I can finally get blogging and emailing.,

I boot up, click on wireless networking, click on XYZ Telecom and … nothing happens.

I ask the rep from XYZ Telecom what’s going on?

“I’m sorry sir, but we can’t get our internet working today.”

As the screams billow and swirl around the conference hall ceiling, someone points to my blog of the other day and says, “the cables have been cut.” 

Ah well, so much for modern technology.

Meantime, it does seem a shame for XYZ Telecom - who have sponsored the conference, placed their internet cafe in pride of position, loaded it with laptops and put lanyards up everywhere declaring:

With XYZ Telecom, and 2 mbps internet speeds, you will never want to leave home without us

- that their core product, wireless internet access, so obviously isn't working.

I guess their investment is wasted?

February 06, 2008

We are living in a cashless society

It is interesting to think about cash and where cash is going.  Can we really be cashless?

The history of cash, as those who know my presentations, is that it was invented for sex.  I know a lot of people don't believe this, but the first form of money was the shekel.  The shekel was invented because 5,000 years ago Sumeria, which is now Iraq, was moving from the disorder of the ancient world to a more formalised society.  As one of the most advanced of the Ancient Civilisations, Sumeria used religion as the political force to manage law and order for their society. 

Trouble was that they had no way to control that society.  Therefore, the Sumerian priests invented the shekel to ensure farmers worked hard on the land and behaved.  But why would a farmer want a shekel?  A useless bit of metal with little real value.

The answer was that the shekel could be used at the temple to meet Ishtar, the goddess of fertility.  The Goddesses were actually ordained women, priestesses, who represented Ishtar on earth and, in exchange for a shekel, these women would have intercourse with the farmers as a holy act.

Farmers gave their shekels to the priests in exchange for sex with the priestesses and the world’s most ancient profession was launched.

For much more depth on this subject, or for those who have no knowledge of the subject and want to know more, please read this link where, halfway down, it explains the currency of Ishtar.

5,000 years later, both prostitution and cash are around in abundance and are still as difficult to manage, police and control.

In the case of cash, it is all about the fact that you have a real-time exchange of guaranteed value that is anonymous.  If you give me your credit or debit card, can I really trust it's you and it's not a fraudulent transaction?  Also, if you give me your card then everyone knows it's you and what you purchased, from whom, when and where.

With cash, we don't have those concerns.  As soon as you give me cash, that's it.  I've got the money.

I sell a car and I don't want a banker's draft.  I don't want a cheque.   I don't want a money order.  I want cash.  I want to know the money is clear before I give you the goods.  Only cash gives me that reassurance.

I hire a cowboy builder to stick a conservatory on the back of the house and, guess what, I give him cash.  Avoid the tax and all that guv'nor.

I want to move my $205 million of drug runner's illicit earnings across borders, and so I stick it in the bedroom.  It's the only way to ensure I have my most liquid asset to hand, and I can always stick it in a suitcase to move bits across borders.

I go to see the goddess Ishtar, which I don't by the way ... but if I did, would I use cash or a credit card?  I think cash still rules there too.

Cash rules.

This is why most societies thrive on cash.  For example, recent research sourced from a variety of diverse groups* provided me with this picture of cash usage worldwide:

%age of total payments made in cash
94%    Russia
90%    China
79%    Japan
77%    Spain
67%    Italy
40%    Australia
21%    America

These figures reflect, in some cases, the sophistication of the markets' usage of alternative payment mechanisms, such as cheques and cards, rather than the 'cashless' society.  For example, Russia and China have very low usage of credit and debit cards today, but this is changing. America has low cash usage but cheques, or checks if you like, constitute 36% of all payments which is why Check21 is so important for the USA.

Even so, most low-value transactions are made in cash, and how the hell will we ever get rid of cash when it fuels the underworld, allows those who want anonymity to be anonymous, and ensures those who want real-time value transfer to have it?

Well, I can start to see a way.   The basis of cash is that it needs to maintain those two key elements of being anonymous and providing real-time transfer.  The former is why direct debits, credit transfers and cards could never promote themselves as a cash substitute, and even PayPal has issues with the latter as they run on the bank and card network.

But there may be a way, and it made me wonder if I could create a cash injected economy, that was anonymous and outside the banking system, or the tracking system as we should call it, in real-time.

How about starting with PayPal or a prepaid card?

With PayPal it's hard to transact unless you provide name, address and other details.  However, you can open an unverified PayPal account with no such information.  You are asked for name and address, but you can falsify this information to open an unverified account.

This means that anyone can open a PayPal account as a Premier Account, without giving out bank or other details, and with a false name and address potentially.   You only need to "Get Verified" and prove all of this information, if you want to get more benefits such as higher spending power and increased security.

In order to start my cashless trading, I open a fictitious PayPal account, unverified.  Maybe I put £100 in there by buying an IDT Prime prepaid Credit Card, which also needs no identity proof to transact on the card, unless you want one that's reloadable. 

I put £100 ($200) on the IDT card and transfer that to PayPal, or I start selling a little on eBay to create a debit float on my PayPal account. I then take that debit float or prepaid card, and stick the cash into Second Life's Linden $'s or Entropia's PEDs (Project Entropia Dollars).  Through this method I can now have unlimited anonymous transactions.

And, you can generate real cash in these worlds.  We all know about Anshe Chung being the first millionaire in Second Life by buying and selling land that doesn't exist, but what about Jon NEVERDIE Jacobs who has become the millionaire owner of Club Neverdie in Entropia, the most expensive virtual object ever, according to the Guinness Book of Records. In the press release that goes with this record, there's an interesting paragraph:

"Many high-end items in Entropia Universe are regularly traded between players for tens of thousands of dollars. Recently documented sales include a virtual shopping mall for $70,000 USD, a land area for $35,000, a top-of-the-line healing kit for $30,000, an Imp MK II Hunting Rifle for $17,000 USD, a spaceship and hangar for $12,000, a complete Supremacy armor set for $11,000 USD and a Unique Green Atrox Queen (mystery) Egg for $10,000."

Hhhhhhmmmmmmmmm. 

For fraud and money laundering, there are definite possibilities here, which I've blogged about before when I mentioned the Chinese were concerned about QQ for all the reasons above.   

Meantime, there's also China's version of PayPal, Alipay.com

Alipay is owned by Alibaba, China's largest ecommerce firm, and is China's largest online payments services with 47 million users in August 2007, with 80,000 new users registering every day! 

Launched in 2005, Alipay is proving to be incredibly popular for these reasons and also because their business model is different to eBay and PayPal's.  Rather being positioned as a payment service for online trading, Alipay positions itself an online service to support and promote Chinese trade.  Maybe this is why eBay have found them to be a pain in the derriere.

All in all, between prepaid cards, virtual worlds and online payment services that allow me to open accounts without providing full and verified bank and billing details**, I reckon I could quite happily build a very nice cashless business that is anonymous and outside the bank network, with real-time value transfers.

This means that maybe, just maybe, after 5,000 years, we will finally have a society that can operate electronically and still pay for the world's oldest profession with a shekel ... but now it's an e-shekel.

 

* including Global Insight, National central banks, GIE CB, APACS, ARA and McKinsey's Payments Practice 

** with PayPal, this is difficult to do, but with some other services not mentioned, it's a lot easier.

 

 

 

February 05, 2008

Wanna be a millionaire through social networking?

There's a new service called Yuwie. It's aim is to compete with Facebook and MySpace. You may say that space is full, but it's not.  The reason is that Yuwie pays the social networkers to network. 

Unlike Facebook and MySpace therefore, who make around $8 million and $25 million a month in advertising respectively, Yuwie makes money through advertising and then pays some of it back to the social networkers who can make a mint themselves.

Therefore, unlike Adonomics where Facebook applications such as Slide, Rock you and iLike are valued at millions for being add-ins, Yuwie takes a percentage of all this advertising and add-ins so that every time a networker clicks upon you, you get something back.

The way they pay you is through referrals.  Each referral you make and those that they refer accrues to your account at 5 cents per 1,000 page views: the number of times you and your referred friend's pages are viewed.  This means that you are incentivised to blog, add, talk, update and communicate as often as possible.

They've kinda merged PayPal and Facebook therefore.  PayPal works virallly on the basis of people always open a PayPal account when they get an email saying, "You've got money".  Combine that viral effect with a Facebook style website, and you may be onto a winner.

However, with adverts all over the site and five new 'friends' inviting me to linkup in my first hour of Yuwie registration, I'm not sure it'll work.  After all, a bunch of strangers all saying "hey, look at me, read my blog, over here" will make a few of us switch off.  Although you can overcome that by changing your Yuwie privacy settings to 'only friends' can connect and view your profile.

Nevertheless, Facebook are obviously worried about Yuwie. For example, as I tried to post about it in my Facebook blog, guess what?  Facebook stopped me by prohibiting the link to the Yuwie website.

Maybe that's why some folks despise Facebook. Equally, with 60 million people shouting at me in Facebook, almost 200 million in MySpace and millions of others in Bebo, Badoo, Flickr, Twitter, Vodpod, Dopplr and more, I'm not listening anymore

That is not to say I'm discounting the relevance or importance of social media, social networking or virtual worlds.  I'm just trying to ensure that the stuff I pick on and use fits my way of life, and not someone else's.

Equally, I'm also looking for future ways of making millions which will come from investing, not from page views.  That is why JP Rangaswami points out in his excellent blog Confused of Calcutta: "Think why Goldman Sachs has a very high percentage of employees using Facebook. Goldman Sachs, wasting time? You better believe it. And making money while they do it."

February 03, 2008

Yacrosoft?

After writing my piece on Microsoft, they announced their $44.6 billion bid for Yahoo!

Right or wrong choice?

As I said in December, they should buy into the future and hence Facebook or something less over-valued in the Web 2.0+ world.  Nearly $45 billion seems a bit much for a website that's struggling to compete in this new world.  Mind you, Microsoft may have competition in their $45 billion bid to buy Yahoo.

There's a good analysis here from The Times though, if you want the real low-down, and an interesting view from Forbes that says it's the wrong choice.  Meanwhile, the New York Times appears to have read my December column and concurs that Microsoft is repeating IBM's lifecycle of the new thing, the monopoly, the has-been, the renewal and the rebirth (maybe another column here).

Meanwhile, for their next purchase, perhaps Microsoft should checkout this list of the top 100 alternative search engines or Adonomics.

February 01, 2008

Finally solved my Microsoft issue

No, I haven't thrown out the PC and bought a new one, although I've been seriously tempted.  But I like a challenge.  So, back from Asia and, after months of whinging about Vista, I've finally solved the biggest issue I've had on my shiny, new $5,000 PC that looks like a Ferrari and runs like a brick. 

Outlook 2007.

Outlook 2007 has had challenges since release, as can be seen from this long thread of blogging by Tim Anderson and friends.  I had to read this long thread because I have an issue that relates to it.

Every time Outlook 2007 goes into send and receive mode, my PC stopped working. 

Seriously.

It just freezes.  No more outlooking or emailing.  No more googling or surfing.  No more blogging, powerpointing or anything really.

You just have to sit and wait whilst Outlook tries to get its measly mail squeezed down the wire ... which normally takes about an hour even though I'm on BT's top-rate broadband package.

Ggggrrrrr ...

Business productivity goes down the toilet, as you waste an hour a day staring at a dumb screen that can't do anything.

Now I also happened to recently buy a travel laptop with Vista and Office 2007 ... and it works like a dream.  I took it to Singapore and it's fast, easy, pretty and lovely. 

So, on return as the far more powerful office PC sat and did it's usual 'get lost, I'm trying to get this 5 kilobytes of new mail and it's taking me ages', I thought there is something fundamentally wrong with this.

After reading Tim's blog on Outlook's issues, I started to try all the recommendations.

First, I took out Outlook's indexing.  That's a shame as it is one of the new features I like the most as it allows you to find any email with an instant search, although Google desktop can do the same. 

No fix and same problem, stare at shiny new PC whilst it gets it's 2 kilobytes of mail for five minutes, and dream of being Mike Tyson in the ring with Bill Gates.

Next, I took out all of the add-in's, deleted all of the RSS feeds, archived emails religiously to try and get my filesize down to under 500 megabytes, which is tiny. 

No fix and same problem, stare at shiny new PC and dream of being in a bungee jump with Steve Ballmer ... but I'm the only one with a rope!

I've spent hours every day online searching google, reading manuals and threads, and gawd knows what else.  I even did the hokey-cokey and turned around, and even that failed.

I still had the same basic problem.  Outlook freezes and hangs the PC all day long.

I was wasting about an hour a day being frustrated with a well-hung PC!

So, I had one of four choices:

(a) Blog about how rubbish Office 2007 is ... but I already did that;

(b) Ring Dell techie support and get them to sort  it out ... tried that, but the Indian contact centre can't be reached due to the internet being down;

(c) Pick up the PC and throw it at the dog ... can't do that, I like my dog; or

(d) fix it myself and waste as much time as needed to get it to work.

I go for choice (d). 

Screwdrivers at the ready, along with tissues for the blood, sweat and tears I was about to indulge in, I get ready to clean up, reload and reboot my PC from scratch.

 

...

 

When I think, hold on, what is this?

Loading Outlook in safe mode, it comes up with "Outlook has a problem with Bullguard spamfilter".  Aha ... half of my instability is caused because on XP, being wary of its security faults, I've been using Bullguard which is a nice, easy consumer friendly firewall, antivirus and spamfilter software service.

The only thing is that Vista comes with its own built-in firewall, antivirus and spamfilter security features which means that if you use another one, the two clash and compete with each other.

Mmmm ... I wonder what would happen if I remove my trusted Bullguard spamfilter?

"Would you like to re-boot now or later?"

Aw, go on then, re-boot now.

 

And ...

 

... it can't be? ...

 

... is it? ...

 

... isn't it? ...

 

... it is!

 

Hallelujah!

Hallelujah!

Hallelujah! Hallelujah!

Halleeeeeeeeeeeeeeee-lu-jah!

IT WORKS.

Thank the lord. 

I'm just over the moon, ha-ha hee-hee, to have a PC that finally works, ho-ho heh-heh, and a degree in computer science awarded as a result of converting to Vista with Office 2007, ha-hee ho-heh.

They're coming to take me away, ha-ha ...

January 31, 2008

Please go away, the internet is broken

I rang my bank call centre today and, as usual, it was diverted to their Indian call centre.  Unusually, I then got this message: "We apologise for disruption to our service, but we cannot receive your call at the moment.  Please try again later".

I wondered what had happened and, being in Asia, they knew the deal. 

Apparently a ship was unsure whereabouts they were off the coast of Egypt.  As they couldn't work out where they were, they dropped anchor to hang around for a while.  Unfortunately, as they dropped anchor, they didn't realise they were next to two key underwater internet cables owned by Verizon. 

As they lolled about in the Egyptian waters, their anchor dragged under these cables and severed one cable whilst ripping out the other, causing significant damage.

Result? 

South Asia and the Middle East are disconnected from the internet.

Whoops.

Apparently, 70% of Egypt's  internet access was impacted, leaving Cairo with no access for the whole day.  When asked about the impact on the banking system Tarek Amer, Egypt’s ­deputy central bank governor, is reported to have said: “We are disappointed [with] the service and will consider alternatives for the banking system if this happens again.” 

I'm sure you will Tarek, as it's a bit difficult to communicate without the internet these days, isn't it?  SWIFTNet?  Nope.  Internet banking?  Nope. Finextra?  Nope.  Not forgetting all the other things we do online these days :) 

What could be worse?!

Ah well, at least you won't have to put up with my tut every day.

Meanwhile, India's bandwidth was also cut by over half, causing their offshore call centre services a big issue.  It will take a fortnight or so to mend, and I expect that two weeks of unpaid leave will leave India's major workforce steaming a bit for lea