JustinIdea - Justin Ricaurte's Personal Blog

Social Advertising

From business's point of view social ads are the holy grail of marketing.  Being able to give ads to people based-on their previous behavior, not only from shopping with your company but with others, is the Fort Knox of personal data.  This information potentially allows marketers to give consumers marketing messages through the most influential marketing channel, social networks, and based-on the users profile, giving away their preferences.

But it's also the holy thorn of marketing.  When someone posts information on a social networking site, they expect their information to not be shared outside of the privacy controls they've set.  When this data becomes shared, people feel violated, lowering their trust in the service that is rendered.  Privacy rights groups then storm the gates of the government demanding greater protections for consumers and for federal investigations of the service providers.  The EU, with it's stronger privacy protections, will already be on its way to analyzing the security and privacy implications of the services, make recommendations, then get ready for its next set of legal battles.

They say there's no such thing as bad pr, but when the consumers trust in a set of dominant services is on the line, it is bad pr.  Companies should be careful when treading in the territory of personal privacy concerns.  Maximum transparency about one's policies and allowing for people to control the disclosure of their information will create maximum trust.  Trust is the glue of relationships and commerce.  It's not meant to be abused.

"It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently." - Warren Buffett

It's a Marketing Problem

This past Sunday I went to Mind Camp 4.0 at the Tukwila Community Center, and I had an absolute blast at it.  The day was set-up as an open conference, where people post what they would like to teach others and each individual chooses what they would like to listen to for each one-hour segment.  There were some really great discussions there.  Some of the ones I went to involved where can you take web 2.0 next, what you need to take into account when starting a company, advertising rates for websites, and education in the State of Washington. 

At the event, there was no loss of good ideas.  One of the cool one's that I saw was NoonHat, where you post the place you're at and the radius within which you would like to catch lunch.  The site then pairs you with others that want to catch lunch in the same vicinity and time.  Another was Uncluttr, which makes finding books on Amazon a lot more intuitive and simple.  If you want inspiration for some new ideas, something like Mind Camp is a great event to attend.  I think the discussions helped to spark about a dozen ideas in my head during the 12 hours I was there.

The one thing I saw missing from a lot of the discussions was the business side.  It's great to have cool little technologies and demo them for others, but it's another discussion to find ways to make money off of them, and sadly a lot of the ideas didn't have a concrete monetization model.  Another area was business risk, which is something that came up in talking about where to take web 2.0 next.  With ~90% of the people being more tech-oriented, ways to lower business risk that have been used in other areas of the economy weren't brought up until I started to chime in.  Then how do you gain your users?  Working off your initial network will only take you so far, so quickly.  To gain a large user base quickly, you'll need to find other ways to market it to increase user adoption and understand what type of scaling problem you have with respect to your users. 

Without a strong business model, most of these cool ideas will flounder or allow their creators to make a few dollars a month off of Google Adwords, and they won't become widely adopted.  The plummeting costs to develop web applications has thrown out the technical problem when developing 98% of web applications, a site like Farecast being in the 2%.  It's easy to copy and paste someone else's code or make a social networking site with one new "killer" feature.  Even when the technical problem is eclipsed for those 2%, what you're left with is a marketing problem, and solving that problem requires a different mind set than developing the cool feature did.

MyMint.com - Simple Personal Finance

I discovered this company through an email sent by my friend Shaun at Stanford (if you're interested, they're having their Rainmakers Conference on April 12th!).  This is something I have playing with in my head and on paper for the last half-year, and it looks like the people at mymint.com beat me to it.  From reading the little bit they have on their blog, I have high hopes for this company (*note* the site is not open to the public yet).

MyMint.com is working on creating a free, simple personal finance web service to help people better manage their finances.  The market need they are filling is very real and might be crucial to helping some people get out of debt.  Instead of trying to figure out what you've spent your money on through statements and receipts, their service will pull all of the data from your various accounts and put it in a more digestable format, such as graphs and charts (and no, I have not seen it yet, just something I read on the blog).  Wouldn't it be more fun to readily see what your money was going to?

The company not only is working with a great concept, but their founder also created a convenient algorithm that will "categorize financial transactions with amazing precision (often 95%+ accuracy), just given a text description."  Talk about making our lives a lot easier. :-)

As a last little bit, I would highly suggest everyone check out this blog entry at their site.  If you know very little or nothing about credit reports, it explains why they matter so much and how they work.  This is something that we cover in the financial literacy program at HBSA, because people need to understand how their financial decisions affect their credit.

Real Estate 2.0 (and beyond?)

Last week while pondering about my finance class, this article on Zillow came to mind.  It brought up a lot of great points about how Zillow is and could dramatically change the way we think of real estate transactions. 

If Zillow were to completely revolutionize the real estate market by making realtors unnecessary, would the lower cost of real estate transaction decrease the time the average person lived in a residence?  Would the amount of time a home is on the market decrease as well?  Especially with the "Make Me Move" feature where you can list what price you are willing to sell for.

Would this introduce more investors into the real estate market regardless of boom or bust?  We might see investors pop-up with sophisticated algorithms and day trade real estate to take advantage of small swings in the market. Albeit moving would still be a pain (for those who wished to live in the home) and knowing about the kinks in a house would take a lot of analysis (and honesty), but anything is possible when you don’t need a property to appreciate by more than 6% to break even.

If Zillow could completely automate real estate transactions and investors controlled the majority of housing, real estate might look a lot more like stocks do. Real estate exchanges and everything. How long for this scenario?  Optimistically probably 20-200 years. :-)