Posts Tagged ‘Youtube’

Another entry barrier gone? (The Sequel)

November 23, 2009

Back in February I suggested that an element of the “cost of advertising/building a brand” barrier to entry has been eroded considerably by the increasing ability to film and post advertisements online (and then hope like hell for some viral takeup thereof).

I used an example from my cousin‘s Rentoid startup to demonstrate how a home video camera, a few brave mates, a funny idea and a Youtube might be equally as effective as engaging a creative agency and a film crew.

Well, technology is racing ahead. The Rentoid lads have moved very hi-tech on a similar budget (i.e. pretty much free), with this Pixar-like gem:

As Steve explains, this is all done via Xtranormal (i.e. some folks who’ve done all the hard work for you).

Clearly technology is racing ahead here for budding entrepreneurs seeking an audience.

Of course, making the ad is only one piece of the puzzle. Reaching an audience is harder. The February ad looks like it had 1200 views. One in March got almost 2000. Will this vid be the breakthrough? I guess if its close to costless there isn’t much downside risk.


Explaining the Ponz

March 19, 2009

I was put on to this highly educational clip by my old PhD supervisor.  It certainly sheds some light on the nature of Ponzi schemes (a la Bernie Madoff):

I’m sure there are probably some international business/strategic management lessons in there too…

Another entry barrier gone?

February 23, 2009

My post about the music business argued that technological change has reduced barriers to entry considerably. In that instance, it was a raft of new technologies that made making and distributing music so much easier. These changes rendered the previously important music labels somewhat redundant.

One further aspect of this was the scope for musicians to market themselves, as they could build their image and communicate their message through extremely low cost means (such as Myspace and Youtube).

Such gains can be seen beyond the music world. Firms can now also bypass the dominant mass-media (and its associated businesses such as ad agencies and media buyers), and attempt to communicate their message directly to consumers via the same sort of sites as the musos.

Here’s an example from web-rental business Rentoid (yes, the one run by my cousin):

It’s low budget but has a chance to go viral and build greater brand awareness than a boring print ad or a billboard (both of which would be much more expensive).

What do you think? Does it communicate an effective message?

And is this a viable strategy for many firms?

A Boost Juice follow up

January 26, 2009

After posting last Friday about Boost Juice’s international expansion, I stumbled across this video of Janine Allis, the company’s founder, discussing their internationalisation process. It was recorded back in 2004, but is still highly relevant.

She offers insights into numerous international business issues, including:

– motivations for expansion (including overcoming domestic expansion, and seeking first mover advantages)

– mode choice (franchising versus foreign direct investment)

– country choice

– supply chain differences

– country differences

– adaptation of business models to international conditions

– learning from others about internationalisation.

The video comes from Business Essentials. They have done a follow up one recently, but I am still trying to find a copy.

Here’s another with Allis about the firm’s Australian expansion:

The International BS Book Club III – The Black Swan

January 3, 2009

The Christmas break has provided the opportunity to catch up on some books that have been on my “to read” list for a while. First of these is Nassim Nicholas Taleb’s The Black Swan. The book is subtitled “The Impact Of The Highly Improbable”, and offers some very thought-provoking arguments about the way we should think about opportunities and threats.

Taleb is a bit of a financial wiz who has parlayed his wealth into a bit of a Renaissance-style thinker lifestyle. His prime concern is with the issue of chance and randomness.

The thrust of his work is that too often we believe we understand probabilities, and even more concerningly, ascribe the Gaussian bell-curve to them. As such, we underestimate the likelihood of extreme events occuring and thus neglect to “price them in” to our models of the world. We also overstate our capacity to learn from the past, and too readily try and build post-hoc rationalisations of occurences based on loose theories.

His Black Swans are highly improbable, impactful events that we didn’t see coming. Among his examples are the World Wars, the rise of religions, of the internet, of Google, of Harry Potter and the September 11 attacks. Now, many of these have been explainedafter the fact, but Taleb argues that these events were not predicted beforehand and would have been deemed almost infinitely unlikely.

The book is a fascinating read. Taleb is enormously self-confident and delights in tearing down the tall poppies in a variety of fields, from philosophy to mathematics, economics to finance. His arguments are quite powerful and intriguing. I will leave to you to read through it and untangle his mathematical and philosophical arguments. Here’s the opening chapter. Below is a short clip of Taleb explaining the ideas.

Taleb has received enormous publicity in recent months, as his soothsaying has been proven very correct with regard to the financial crisis (not just because this event was pretty much unforeseen, but rather because his criticisms of risk models used by hedge funds were so accurate). His own fund has been highly successful (and counter-cyclical) He has got less coverage than he should have regarding the historical and artistic dimensions.

The most under explored issue in the book is the impact of Black Swans on firms and markets. Taleb tends to view this domain with considerable distaste (there’s that dilettante tendency again). He has far too little to say about how firms might utilise his idea (beyond financial management practices).

There are some clear implications for those in the creative arena and also in biotech (that the scale of “blockbusters” could be enormous and perhaps market-shifting). Also it could be illuminating for firms to consider the likely impact on them of a competitor growing to an extreme size (e.g. Google, Microsoft), or their market expanding extremely fast, or of a unforeseen disruptive technology blowing their business model apart. Of course, none of these ideas a new, but what Taleb argues is that their probabilities are almost inevitably underestimated. Firms may simply be underprepared to deal with them. Building contingency strategies would be a first step towards better dealing with a Black Swan world.

A higher order approach would be to build business models around benefiting from Black Swan events. This seems to work for Taleb in financial markets. The premise is to have most of your funds in low risk, certain return assets, and putting a small proportion in assets with huge upside but little downside. One might argue that this is what some of the big IT firms do in funding small projects (who knows, one could become a Google, a Youtube, or a WordPress), or what pharmas are trying to with biotech (although the downside risks are much higher than Taleb would like I suspect). It is not necessarily the case that firms could get away with this in most industries however, simply as it would be hard to explain the use of funds to accountants, investors etc.

There is a lot to digest from Taleb’s book. There is probably an International Business dimension to all this – Has the complex web of interactions and interrelationships made life more unpredictable for firms? Has the deepening of the pool of firms and markets and products increased the likelihood of outlier firms, products and ideas emerging?

All in all, a fascinating and provocative book. For more reviews, articles etc, check out Taleb’s website.