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Learn, Unlearn, Relearn. The ultimate competitive advantage.

Emrecan Dogan — Thu, 08 Apr 2010 18:20:51 +0000

Countless number of traits bring success to people. Among those, my vote goes to the ability of learning. In today's world where everything is changing and evolving in a faster pace than ever before, a person's capability to learn, unlearn, and relearn is the most fundamental driver of personal competitive advantage.

How I cope with the "learning" challenge? Here is the list:

Teach someone: This is by far the most amazing learning tool I have. If I teach someone, I learn it best.
Talk to someone: The new learning in a discussion is so deeply curated (and therefore targeted to the point) and has a huge bandwidth that no other non-human sources can provide.
Google Reader: After many years of existence, RSS is still my best tool for learning. Google is my best RSS reader.
Kindle: Books were always there but with Kindle, the pace of learning doubled for me. What brought Kindle into the list? Ability to get the content instantly, portability, bookmarking and dictionary.
Del.icio.us: The social bookmarking service keeps thousands of my bookmarks accumulated over 6 years. It is my repository for relearning and unlearning.

What is on your list?

Price Match: The wonderful act of tricking travelers

Emrecan Dogan — Fri, 02 Apr 2010 16:15:15 +0000

It pisses me badly when I see travel websites promoting their "price match" feature as a benefit to their customers. It is amazing how, in fact, price match policies take advantage of travelers, help keep prices higher, and create tacit collusion opportunities among industry players.

Put yourself in the shoes of a travel website owner now. If your real objective is to provide the lowest prices in the market, you just try to do it. Then, 100% of your customers get that same lowest price. Also, your competitors will need to follow suit if they want to allure their own customers by claiming "lowest prices" for themselves. So, it seems like this competition for lowest price provides an efficient market for customers to find even better deals. But, what happens when you instead provide the price match promise. Well, as a travel website owner, you don't worry about lowering your prices at all. You declare a high price in your website along with this price match commitment. Then, eventually, only a fraction of your customers will continue to research the prices in other travel websites and get back to you to use the price match feature. So, instead of having 100% of your customers getting the lowest available price, you trick your customers to do a lot of extra research (visiting competing travel websites one by one and getting the prices for the very same booking) and to report back to you. Amazing model for the travel website owner.

From customer perspective though, this is tricky. Usually, competitive intelligence is something the travel website owner has to do to keep their prices competitive. But, with the price match policy, the travel websites transfer their competitive intelligence burden to the customers. Also, if every travel website provides price match guarantee in the industry, then you know that prices are being kept inefficiently high. If travel agents are not willing to provide a really low rate but only the price match guarantee, then no one will drive the prices down.

I am really surprised how travel websites are flying under the radar of anti-trust scrutiny with these doubtful practices.

TinEye Reverse Image Search and Conde Nast Traveler

Emrecan Dogan — Sun, 21 Mar 2010 05:39:47 +0000

How do these two seemingly unrelated themes come together? Through Conde Nast Traveler's "Where Are You" content.

I am a long-time subscriber of Conde Nast Traveler, one of the two (along with Travel+Leisure) top-class travel magazines. In every issue, Traveler publishes a nice photo and asks for the readers to guess where the photo is taken. Up to now, I was able to guess that right only a handful of occasions. With TinEye, almost one of my favorite web destinations, the contest is losing its challenge.

TinEye is a brilliant reverse search engine. Upload a picture and you find out other copies of that picture on the web. Lately, I had a great photo on my computer that I really wanted to use as an idea for my upcoming wedding. The problem was, I didn't know where the photo was taken. I used TinEye to find the photo on the web, and one of the results gave me the resort that originally applied the idea and took the photo. After contacting the hotel and learning some key details, my organization firm is now able to build the same idea for my wedding…

Back to Conde Nast Traveler. The "Where Are You" contest is accessible here. You will find that two contests are active for submission. You upload the picture in TinEye, and you get the information about where that photo is taken. I easily found out the location of both pictures of the contest. To make it adventurous for you, I will not reveal the locations myself.

TinEye's library is just a sliver of the online-accessible photos: around 1.4 billion images. So, as of today, it is not a magic ball. As they expand the search index and build a similarity-based search engine, it will be one of the killer products out there. Especially when the similarity engine hits the web, consider lots of disruptions. At that moment, you should think twice to use Chatroulette. All your counterparty needs to do will be take a screenshot and search it. Probably, it will hit a picture of you in Flickr or Facebook….

Amazing Kindle ecosystem and Vince Flynn novels

Emrecan Dogan — Thu, 18 Mar 2010 07:12:40 +0000

Kindle is such an amazing device. Yesterday, I was flying from New York City to San Francisco, a 7-hour flight. I didn't plan ahead for the red-eye, but the Hudson News shop in the airport came in handy. I took a look at the "best-sellers" rack and found many great novels to buy. Yet, I saw one particular author that got my attention: Vince Flynn. Instantly, I remembered a long overdue book I wanted to read: Term Limits. That book was published back in 1997, and as far as I know, was never translated in Turkish. During my time in Turkey, I had a hard time finding the English version of that book, and I always felt that I was missing a great espionage novel. I found myself thinking about that book for almost 20 minutes in that Hudson News shop in JFK airport. What I did next was simple and powerful. I got out of the shop, found a seat nearby and took my Kindle out of its cover. I searched for Term Limits by Vince Flynn in the Kindle store and it was there. Two clicks later, the first chapter was just in front of me. I have found a book that was sitting in my wish list for the last 10 years, instantly, on Kindle. I finished the book in two days and right after this post, I will download another Vince Flynn Kindle book, Consent to Kill.

To praise the author that I really like, here is the list of books Flynn published. Reading the books in the same order is important for this author specifically, as Flynn develops and evolves same characters with each new release.

1 – Term Limits

2 – Transfer of Power

3 – The Third Option

4 – Separation of Power

5 – Executive Power

6 – Memorial Day

7 – Consent to Kill

8 – Act of Treason

9 – Protect and Defend

10 – Extreme Measures

11 – Pursuit of Honor

Rentability Framework for Content – What is best to rent?

Emrecan Dogan — Fri, 25 Dec 2009 23:22:35 +0000

I realized that I have been spending a lot of time thinking about why some content rental markets are better developed than others – both in terms of content type and geography. As I thought deeper, I started collecting enough data to put my thinking into a framework-like approach, where I analyze the tendency of a consumer to either OWN or RENT media content. Below, you will find the first version of this analysis, which will probably be subject to substantial improvements in the near future.

The major types of content discussed here are Books, Textbooks, Music Albums, Movies, Video Games and Software. Please note that, for some types, the sub-types might have different rental potential. I will discuss those in the next part of the analysis. For example, under the Video Games heading, we need to analyze the following pairs differently: PC vs. console games. Online-enabled vs. Offline-only games. However, I will just focus on 6 aggregated content types for the sake of simplicity in this post.

The first step is to explain the factors, or determinants, driving an OWN or RENT decision for the consumer:

MSRP: The cost of a new release for each content type. As price goes up, rental becomes more attractive for the consumer.
Time to consume: The time it takes to consume the content fully. A popular book takes 2-3 weeks to read fully on average. A movie takes 2-3 hours in contrast. Students use a textbook for a full semester, which is 3-4 months. In that regard, a music CD is considered to be used for 3-5 years before it is archived or lost.
Re-consume value: To what extent consumers re-read a book, re-watch a movie, re-study a textbook, re-play a music cd or a game. We rarely read a book or watch a movie twice. But we play the same music album every week and use Microsoft Excel every day. If consumers re-use the content less, they would be inclined for rentals rather than ownership.
Copy protection: How hard it is for the consumer to make a copy of the content. It is extremely easy to rip a music CD, while it is almost impossible to make a practical copy of a textbook. Copy protection is an important factor for the consumer as they will be inclined to rent more if they can rent, copy and return the content instead of buying it.
Long-term relevancy: This is tricky. At first sight, you might think that this is basically the same as #3, "Re-consume value". But it is not. Think of this as how relevant a particular content will be in the future. For popular books, we rarely see big changes in the new editions. In most cases, there is a new foreword or an appendix in the newer editions. For textbooks, the change is substantial. Even though only a few pages and practice problems are added, these additions change all the layout and page numbering of the books. Therefore, students usually find it hard to follow a university course with an edition older than the one suggested by the professor. For movies and video games, situation is different. Both types of content are heavily new-release driven. Almost all titles in these two buckets generate 80% of their lifetime sales in the first-month release window. Especially for video games, online gaming is only relevant when there are other players logged in. Therefore, once a sequel is released, it is very hard to keep the older version of the game relevant. For software, a newer version of a suite takes longer to migrate, but it eventually happens. It is hard to find people using Excel 98 today.

After defining the factors, we will need to rate each content type across them. Here is the chart:

Here, the concluding row is the Rental Price Ceiling. This summarizes how much a customer would effectively pay per day to consume a content fully. For example, if you have paid $15 to buy a popular book and finished it in 18 days (2.5 weeks), basically you paid $0.86 per day. Similarly, you buy a movie DVD for $15 and in only one day, you finish it. Therefore, your effective cost per day is $15.

This metric is quite important, because, among other things like re-consume value, this calculation is the ceiling for rental opportunity. As we see here, movies offer the highest rental price ceiling with $15. At the second place, we see video games at $3.43 per day. The video games are four times the price of movies, but it takes a lot more days to fully consume a game. On the third rank, we see textbooks with about $1 per day rental ceiling.

The first conclusion is, in fact, powerful. We see the highest rental activity in movies, driven by companies like Netflix and Blockbuster. Video games are on the second place, which is perfectly correlated with GameFly's popularity in the market. On the tihrd place, the textbooks, we see a fast-growing market driven by heavily VC-backed start-ups like Chegg and CampusBookRentals. Interestingly, beyond this point, we don't see important companies serving rental needs for popular books, music and software. Music is easy. With $0.01 effective daily price, there is no economical way to rent a music cd. For software, $0.16 is almost completely inhibitive for a rental market.

The second conclusion, which is more subtle, could even prove to be more powerful. It is about what it takes to create a rental market or enhance its potential. Think about the following conclusions derived from the table:

Popular books are almost at the same rental price ceiling as textbooks. So, why not to start a popular book rental service? First, target consumers for textbooks, the students, are more cash-strapped than the overall target group for books. Therefore, a rental market for textbooks is more attractive than for the popular books. Second important factor is the ratio of rental price to shipping cost. Think about the differences in the rental transactions in two content types. For textbooks, a students rents one and keeps it for 3-4 months. Let's say he pays $20 for that. The book gets shipped only once during this period. For the popular book, the renter would pay around $3 to rent and the book gets shipped once every 3 weeks. In that regard, the shipping costs become inhibitive for the rental company. This brings us to another opportunity. Why not use a kiosk rental model for popular books to shave shipping costs off completely?
For video games, there are important conclusions. The fact that a video game is online-enabled increases the "Time to consume" substantially. Therefore, a rental company might focus on serving single-player-only games.
For any content type, fixing the copy protection issues can change the rental potential of a market dramatically.
For other geographies where prices are quite different (e.g. in Turkey where average textbook prices are around $30), a quite different rental market potential is expected. Similarly, with the average price of console games at $120, there is an attractive rental market to tap into. By changing other determinants of the market, such as the introduction of Blu-Ray with the ultimate copy protection, a robust video game rental market can be created in many countries like Turkey.

Is Facebook into matchmaking?

Emrecan Dogan — Mon, 21 Dec 2009 21:52:40 +0000

There are strange things happening in Facebook’s “Suggestions” box. While it has worked quite nicely in the past few months about finding some “real” friends, the suggestions started expanding into some dangerous territory.

There are a number of people that keep coming up to my Suggestions list even though I cross them out one by one repetitively. The commonalities among these people are:
- They are all female (not a single male without a common friend is suggested to me, while a lot of females are)
- They all have NO common friends with me
- They all have ZERO friends
- They all belong to the same region (this is weird, as Facebook recently eliminated regional networks)
- They all have unusually minimalist clothing. Of course, not at the level of to-the-face twitter spammers but just on the grey area. Yet, you can easily assume that they are real-life persons.

Now, compared to twitter, this suggestion-spam looks more dangerous because these people do not add me as their friends. Rather, Facebook suggests me to add them even though there is no meaningful reason for them to be suggested to me. With a lot of engineers joining the company recently, could this be an evil side project of an ex-Googler that stressed-out after spending years under the mantra “Don’t be evil”?

I need answers to the following questions to conclude more clearly:
1) Do you receive similar irrelevant suggestions?
2) Do females receive similar male suggestions with questionable profile photos?

Best Tech Products and Services – 2009 update

Emrecan Dogan — Thu, 17 Dec 2009 23:21:59 +0000

For 2008, my picks were these.

While I change the format slightly, most of my faves remain on the list:

Devices	Web Products/Services	iPhone Apps
iPhone	Amazon	AroundMe
Livescribe	Del.icio.us	Dropbox
Macbook Pro	Dropbox	ESPN ScoreCenter
Playstation 3	Flickr	Flight Control
	Gamefly	Flixster
	Gilt/Jetsetter	iPod
	Gmail	iStanford
	Google Docs	Kindle
	Google Maps	Pandora
	Google Reader	Shazam
	Google Sites	Skype
	Hulu	WeatherChannel
	Jajah	Zagat ToGo
	LinkedIn
	Live Skydrive
	Netflix
	Outlook
	Pandora
	Skype
	Voipbuster
	Wordpress

Netflix, Gamefly, USPS and behavioral economics

Emrecan Dogan — Sun, 25 Oct 2009 01:22:40 +0000

FeedFlix, a Netflix API service, says that Netflix is losing 0.3% of DVDs it is shipping.

GameFly, which gives the same Netflix-style service for video games, is unhappy about ~1.0% loss rates for the DVDs it is shipping. Probably for that reason and some others, they filed a complaint with the Postal Regulatory Commission. USPS is serving both companies, and some people in the industry say this could be a potential evidence of USPS giving preferential treatment to Netflix. While it might as well be the case, I think the more important explanation lies somewhere else.

Let's say you want to own a movie and a game. The movie you want to own is Transformers: Revenge of the Fallen, which is currently topping the Amazon.com sales charts. You can buy it for $15. Or, you can start the cheapest Netflix subscription plan for $9 a month and receive the movie's DVD. Then, you can claim that the DVD has never arrived. You can then either cancel your subscription plan or become a "legit" user for the rest of your life. Yet, in this initial transaction, you acquire the DVD for a mere $9, instead of $15.

Let's now look at the GameFly side. You want to own Uncharted 2 for Playstation, which sells for $55 at Amazon. Instead, you start a GameFly membership, cheapest one being $9 a month. The same story of claiming the DVD is lost and you net out $46 profit.

Going back to the loss rates, let's consider the total loss rate TL = PL + UL, where PL is Postage Loss and UL is User Loss, all being percentages. Postage Loss is the percentage of losses caused by postage service, and UL is the other part of losses caused by user behavior. Based on the two articles above, TL(Netflix) = 0.3% and TL(Gamefly) = 1.0%. People are talking about the alleged differences in PL(Netflix) vs. PL(Gamefly), but what about the UL side?

Let's consider the two extreme examples: If a DVD you receive from your subscription was worth $1 million, would you keep it (assuming you were still paying $9 a month subscription fee)? And in the other extreme, if a DVD you receive was worth only $0.5, would you keep that one? I guess we can safely assume that when the "inherent value" of a DVD approaches infinity, the UL rate should approach 100% too. Then, it should be perfectly rational to assume UL(Gamefly) should be higher than UL(Netflix) as average game prices are significantly higher than those of movies.

I think the perfect test for this theory could come from Netflix' internal data on loss percentages for DVDs and Blu-Rays. As Blu-Ray discs are more expensive, Netflix should have a higher loss rate for Blu-Rays, compared to regular DVDs.

If the assumption holds, what can GameFly do? In my opinion, they shouldn't search for the answer in the courtroom. Instead, they should consult behavioral economists. If I remember correctly, showing the list of "Ten Amendments" just before an exam reduces the cheating rate significantly, even though the amendment has nothing to do with the content or context of the exam. While it could be weird to see the Ten Amendment page coming out of each game envelope, I am sure economists can figure out an effective "anchoring" method eventually.

Google Reader’s magic

Emrecan Dogan — Sat, 24 Oct 2009 07:35:44 +0000

Google Reader started offering a new sorting method for blog posts: Sort by magic.

While many tech evangelists have already declared RSS-reading dead and migrated to Twitter-style micro-sharing, I still think RSS is by-far the most effective learning tool/platform on earth (maybe on par with the courses I am taking in Stanford GSB).

There is a personal dimension for me in seeing Google Reader implementing post recommendations. About a year ago, I was working enthusiastically with two classmates to crack the personalized news problem. After putting 200+ hours into it and building a prototype, we realized that there were two most serious questions we needed to answer about our strategy before moving on:

How do we solve cold-start issue?
What happens if Google starts personal recommendations?

The first question was about people starting to use a new service (probably switching from Google Reader) and having high expectations from day 1. The cold-start issue was about the fact that we wouldn’t know anything about the user’s reading preferences until we collected his reading patterns. Therefore, during that "cold" period, the user wouldn’t get any better experience than what Google Reader offered. Plus, as he was "used to" a certain RSS-reading interface, he would inevitably have an inferior experience as all humanbeings have strong anchors to what they are used to. In fact, by spending so much time on cold-start issue, we realized that many start-ups were using social recommendations (I get recommendations from the posts Mike has read, because the engine thinks Mike has similar taste to me), because when you base the engine on social similarity, you can shrink the cold-start period close to null.

Second question was a preemptive critical thinking about what our competitive advantages would be, if any, in case Google starts serving personalized recommendations. First, they had the sizeable user base to "learn" how to make better recommendations. Second, they would already have vast amounts of reading patterns, by-passing the issue of cold-start. Third, the recommendation engine would have lots of synergies with their search-ranking algorithms. Among many additional dimensions, they clearly had the right to win.

Based on these concerns, we chose to stop pursuing this project. Since then, I have been checking out Google Reader blog with the hope to see Google start its recommendation service. Seeing that would have "verified" our critical thinking about the start-up. Today, I got the news, thru Google Reader of course. Here is the first pack of recommendations I got from 1000+ unread posts sitting in my account:

Based on my 3+ years in Google Reader, spanning 10,000s of read and starred items, I would expect a better "magic" from Google at the top ten bucket, but I am sure they will get there. With this feature, RSS became an even more important source of "learning", cutting down noise. With micro-sharing platforms plagued with 99.99% noise, self-promotions and non-value added posts, I actually feel good that millions of people are migrating from RSS to mediums like Twitter. That just puts me in front of the competition as they are spending hours and hours digging thru hundreds of 140-char posts to find 2-3 valuable items.

Future of Filmed Entertainment – who should thrive and why? (Part 1 of 3)

Emrecan Dogan — Mon, 19 Oct 2009 05:10:00 +0000

Future of filmed entertainment will not be that different from what it is today – in terms of complexity and number of players participating. But, as the pie is large, there are lots of hopeful and agressive firms out there trying to close a prime estate in the white space. This post is by no means a prediction of who would thrive in this market. Rather, it is about identification of the right questions to assess the probabilities of winning from each major perspective in the market. To keep the reading time at a practical level, I will split my thoughts into three parts of meaningful domains: Content Owners, Intermediaries (‘gatekeepers’ or ‘middlemen) and End-user Platforms.

Content Owners (i.e. Studios)

Basic thinking would say that studios should have significant power in the market, but they somehow do not. Today, 9 studios own nearly all of Hollywood content, but we don’t see them exercising strong influence in the market. While there are more, two main reasons shape the limits of studios’ control power:

There are no clear, undisputed leader(s) among studios.
Studios don’t have strong vertical integration alignment.

The lack of strong leadership means that studios can’t exert power on their customers. Today, those customers seem like the individuals, but they are not. Studios’ customers are mainly:

Movie theatres (Cinemark, AMC…)
Cable Operators, TV Channels & Networks (Comcast, CBS, TNT…)
Retailers (Blockbuster, Wal-mart, Best Buy…)
Rental Companies (Netflix, Blockbuster…)
Video-on-demand providers (Amazon, Apple, Vudu…)

In simple terms, each of these "customers" are big enough to prevent studios from exerting market power. Any particular studio doesn’t have sufficiently large market share to force its customers for better terms for the studio.

Second item, the lack of vertical integration, puts two other key determinants of the industry at the hands of other strong players. These two determinants are technology and distribution (a.k.a delivery). If a studio could own either:

the key technology or
the key distribution channel

that majority of the studios uses, that studio would have quite strong market power. But naturally, if a single studio tries to own a highly proprietary technology or distribution channel, simply, other studios would form a consortium to bring a competing standard or distribution channel to the market. That is what we saw with video casettes, DVDs, and Blu-Rays. In the last two of those three, Sony had to give up a lot of control and get many players on board to make sure that other studios would commit to use Sony’s technology. In the distribution market, the studios are even at a worse situation. They rely on a few theatre chains for white screen, a few retailers for dvd sales, a few major players for rentals and some cable companies/TV networks for TV viewings. With the antitrust risks preventing studios from taking collective actions against any of these "few" delivery players, we can conclude that hands of the studios are pretty tied up for their downstream.

This is basically what the market snapshot is as of today. And there is huge expectations, from each player in the market, for the digital age: online delivery. While the name somehow implies that the expectations are about distribution, it is in fact about both distribution and technology. The technology play, for the time being, is focused on Flash or Silverlight (and in some sense Torrent vs. tradtional streaming), and neither of them are not close to being owned by a studio. The distribution part is where we see studios putting their biggest bets. While we see Hulu and Epix under the sponsorship of studios, there are many online distribution players independent of studios (Netflix, MovieLink, Starz, Vudu). While it is also interesting to analyze the online delivery evolution from a technology standpoint, I will prioritize distribution for the time being.

Simply, once the content is properly digitized, the studios will, rationally, try to maximize their reach. So they will try to get their content on every platform possible (TVs, software clients, mobile phones, websites…). But how will they deliver their content to these platforms? That is one of the key questions to analyze. As of today, we can list the following major delivery paths: 1) The ‘gatekeepers’ and 2) ‘owned’ channels.

The gatekeepers are those companies who command certain competitive advantages to act as the intermediary between the platforms and the studios. The platforms are many and diverse: Game consoles like Xbox, internet-connected TVs of Sony and Samsung, PCs, sophisticated mobile phones such as iPhones and maybe even Kindle some day in the future are the platforms. These platforms are, for reasons I will cover in part 3, probably better-off when they don’t partner with studios directly to serve content. If we assume this last argument holds for now, then we can look at the gatekeepers: Netflix, Roku, Amazon, Apple, Boxee. We frequently read about these companies cutting deals with platforms to deliver content in the recent past (e.g. Netflix, Amazon, Boxee streaming directly to TVs and/or consoles). There are good reasons for all these companies to arise as gatekeepers and I will cover them all in part 2 of this series. For now, let’s see the second option for the studios: ‘owned channels’.

The owned channels represent a significant opportunity for the studios to vertically ‘own’ the distribution channel. Yet, accomplishing that goal is as much challenging as it is rewarding. Hulu is the best example among all, while we hear that Epix is coming up with another model. The reasons why it is such a big opportunity for studios are trivial: First, you cut the middlemen and keep the profits in the house. Second, and more importantly, you name the price. The harder question to answer is whether there is any way to make it work. From one lens, Hulu is a work-around solution to antitrust laws previously preventing studios to act as a single decision maker and own the delivery. Today, with only a few studios on board, another important question is the following: When will the collective power of Hulu-partner studios kick-in and when will the antitrust bells ring? If the former happens without the latter, it might become the biggest win in the media industry. If the latter happens before the former, it will create an unsuccessful experiement for the participating studios, an unhappy entrepreneur and a reputation bummer for a high-profile PE firm. If both happens together, we might see Hulu splitting up into many pieces, somewhat analogous to the Dept. of Justice’s act in 1948, seperating production and distribution again. All in all, from the perspective of content producers, there will be an extremely delicate balance between how much power a studio will have in digital delivery, how acceptable those positions will be for other studios, and how acceptable the collective power of studios will be in the eyes of public and regulators.

Next

In Part 2, I will focus on how the positions of studios are and will be affecting the ‘gatekeepers’ or the ‘middlemen’ of the industry. Some key questions I will ask, and try to answer will be:

Who are the ‘middlemen’? How could they evolve?
Why do they deserve to exist, i.e. what are their competitive advantages?
How likely is convergence in this part of the industry and in what ways the convergence might occur?

Pay-to-bid auctions (e.g. Swoopo): societal impact

Emrecan Dogan — Mon, 24 Aug 2009 03:02:43 +0000

For the last 72 hours, I have spent a good amount of time on discovering the inner workings of pay-to-bid auctions, and Swoopo in particular. I must be one of the early inquirers into the subject, as there is still no wikipedia article or reference to this novel auction method (or I am just inept at searching for the term properly).

Very simply, in pay-to-bid auctions, the bidder pays a fixed amount every time she bids, and the winner is determined when noone else bids before the time runs out. In Swoopo’s model, each bid increases the auction price by a fixed amount, and also adds another 10-20 seconds to the countdown timer. The economics is just too complicated for me to crack at the moment, with lots of assumptions to be made from cognitive psychology and behavioral economy perspectives. So I will comment on some things that I think I have a say: how will these auctions change the society?

I have two arguments:

The auction model simply creates a happy winner and lots of losers. It is very different than traditional auction models (e.g. ebay) where losers actually lose nothing other than the tangible item that is being auctioned. In pay-to-bid model, only the auction winner takes the return on his bid fees, while others probably flock to other auctions to "get back" what they lost.
From a productivity perspective, pay-to-bid auctions are on their way to become the ultimate time sink.

Years ago, people were discussing how captchas (the disoriented words you need to recognize and enter when signing up for a service) were costing the world billions of unproductive seconds every day, as people were spending 5-6 seconds to resolve a captcha. MIT’s Technology Review mentioned the inventor of captchas, Luis von Ahn, feeling the guilt of causing people waste ~150.000 hours every day. He then founded the ReCaptcha project, that uses these hours to digitize books, and managed to erase the guilt.

Pay-to-bid auctions could dethrone captchas in wasting society’s precious time. Take a sample auction from Swoopo: an LG 50-inch plasma hdtv. It was recently sold at ~$90. With each bid increasing the price only by $0.02, customers needed to bid 4,500 times before the deal was finalized. As each bidder is waiting for the countdown timer to reach the final 1-2 seconds before placing a bid, on average, each bid would take 15 seconds to materialize. That means the customers had bid for 19 hours before the deal was over. Let’s say, on average, a customer stayed on the website for 25% of the total duration and there were 50 bidders in the whole auction, the time cost to the society was around 250 hours. One auction, 250 hours. Swoopo.com ended ~75,000 auctions since last October. That would mean, the customers lost a whopping 20 million hours cumulatively in 10 months. It is important to note that the time is really lost: with only 20 seconds left for the auction, you have no other option but to look at the timer with your finger on the mouse button. What would that 20 million hours mean for those people, and for the world?

I guess, with the addition of pay-to-bid auctions, the Time Sink Fantastic Four is finally complete, along with video games, captchas, and Twitter.

Most-read blogs – month ending Aug 24th, 2009

Emrecan Dogan — Sun, 23 Aug 2009 13:29:02 +0000

I wonder why there is no comScore-like coverage in blog world. While RSS is extremely suitable to run advanced analytics on it, there is little offered for publishers and consumers to understand the leaders and readership drivers in this space.

One good, but not impressive, information source is Google Reader’s reading trends section. For the month ending Aug 24th, 2009, my most-read blogs are as follows:

Hurriyet Ekonomi – Turkish newspaper, economy section – 66 posts
Lifehacker – 48 posts
Download Squad – 47 posts
Cityfile – 43 posts
PS3 Fanboy – 38 posts
The Business Insider: Media – 34 posts
The Luxist – 34 posts
Dilbert Daily Strip – 30 posts
Mashable – 24 posts
paidContent – 21 posts

I must say that I recently unsubscribed from popular tech blogs such as TechCrunch and ReadWriteWeb, as they never made it to my top 20 despite publishing an enourmous ~140 posts every week.

Turkish Online News – more perspective

Emrecan Dogan — Sun, 23 Aug 2009 06:17:23 +0000

This is a follow-up to Cem Sertoglu’s post on Turkish Online News, dated July 28th, 2009.

Some resources say there are 26 million internet users in Turkey, making it 14th largest internet population in the world. Yet, that wouldn’t be enough to justify the following result from Google Insights.

The table is a snapshot from Google Insights for Search. Parameters are: Last 90 days, Worldwide, and for the whole "News & Current Events" category. So, nothing specific for Turkey. Roughly, 5 of the top 10 search queries in News category comes from Turkey (#2,3,5,8,9). This is just stunning.

Here is a live embed from Google Insights in case things change (probably towards higher Turkish dominance).

Soccer leagues and twitter

Emrecan Dogan — Sun, 23 Aug 2009 03:22:53 +0000

Nobody knows for sure how and why the first soccer league was founded. But one theory, further supported by Spaniards’ big success in the realm, suggests that a Spanish king liked the idea as he thought the league will attract the attention of citizens and leave the king the valuable space to manage the country with less criticism. I wonder what that king would think about twitter. It could paralyze the attention span of a regular follower easily with the constant stream of information, most of which is irrelevant for the reader.

In Turkey, a while ago, people started to recognize a pattern in government’s price increase decisions for electricity, gas, and other municipal services. Whenever a football team (mostly Galatasaray) beat an important international opponent, letting the people flock into the streets to celebrate, very few people would read about the price jump in gas prices in the next day’s newspapers as the rest would proudly spend hours reading the columns about the soccer triumph. I wonder whether the same government officials are making evil plans about using Twitter’s paralyzing pace of information flow to help citizens "digest" the bad news.

What does Google Suggest results tell

Emrecan Dogan — Sun, 23 Aug 2009 02:23:03 +0000

A few days ago, I switched to Sophos Antivirus, as Stanford is providing to its students for free, from BitDefender. Then, I found this YouTube clip from Sophos. When you type "remove" in Google.co.uk, the Suggest feature gives you the following suggestions:

"Remove norton" – 6,850,000 results
"Remove mcafee" – 380,000 results
"Remove avg" – 8.430,000 results

The video implies that these antivirus software makers are somewhat not welcomed in PCs, and as Sophos is not on the list, it should somewhat be better.

Well, that is an explanation but not the only one. What if those numbers just give you a sense for the market share of these software companies? Check for the keywords "remove sophos" and you will get 377,000 results, almost around mcafee. What does this tell?

Netflix for Sony: A corporate strategy resolution

Emrecan Dogan — Fri, 10 Jul 2009 02:50:16 +0000

Media is one of the most twisted industries globally. Facts first.

Sony is a large, if not the largest, content producer/owner in the world. From this perspective, Sony sits at the upstream of Netflix’ value chain as it is a major supplier to Netflix and it generates revenues by selling DVDs/Blu-rays to Netflix and getting rental license revenues.
With the new deal that will allow Netflix to deliver movie streaming service to Sony TVs, Sony will effectively become a downstream partner of Netflix’ value chain. If not a customer, we can definitely identify Sony as a "distributor". Interesting and somewhat twisted business setting that we don’t see everyday.
Sony is also a pioneer and the biggest player in the movie physical content medium industry, as it has lead before (video cassetttes, DVDs…) and it is leading now (Blu-Ray discs) the de-facto standards of the market. This adds another dimension to the Netflix-Sony relationship, as Netflix is in some ways providing substitutes to Sony’s offerings (by offering consumers dvd/blu-ray rentals and streaming services, Netflix certainly has some sizeable -negative- effect in the sales figures of these mediums).

Three different roles for Netflix from the perspective Sony’s corporate strategy team: a customer, a supplier, or a competitor?

When I read the NewTeeVee post on Sony-Netflix TV streaming deal, I instantly visualized the conference room of Sony, and the discussions of its fellow corporate strategists. The consumer electronics division (makers of TVs) would be pushing hard for the deal as they would be seeing themselves inferior to LG and Samsung’s Netflix offerings. On the other end should the boss of studios, stuck between threat on long-term physical medium sales and potential licensing revenue opportunity s/he would get if this streaming-to-TV model boosts up in the future. And there is the entertainment division (PS3) that would feel beaten by Xbox’s exclusive deal with Netflix and on the other hand, would be concerned for decaying support for Blu-ray when people use less physical medium and more on-demand entertainment.

From the face value, this deal deserves to be developed as a business school case, as we don’t see such intertwined objectives, incentives, and conflicts. As a corporate strategist, how would you handle this deal?

Facebook and older people: crossing the chasm

Emrecan Dogan — Tue, 07 Jul 2009 14:53:08 +0000

Mashable had a very insightful post today about the shift in demographics of Facebook userbase.

In my opinion, the facts presented in the post are highly valuable, but the analysis and synthesis could well be furthered.

First, I am also amazed by the explosive growth in older segments compared to younger segments. But here is an alternative scenario. The largest growth figure is realized in "Unknown" row of age brackets, as 2.5m people flocked into this category in the last 6 months. Were new members in the last 6 months overly secretive compared to existing members? I wouldn’t say so. Yet, in the last 6 months, there have been substantial discussions on Facebook’s privacy policy and I would expect a sizable portion of members to get more concerned about their data lying inside Facebook. So, what if those 18-24 people who seem to be not growing at all (a mere 5% increase) have chosen to remove their age data and become an "unknown"?

Anyway, that doesn’t undermine the value of the Mashable post. So let’s move on to a discussion avenue with potentially higher strategic impact for us all.

It is generally way much easier for humanbeings to conceive new information in "descriptive evaluation" mode. In everyday language, that means an analysis explains "what happened". I guess that is how our brain works in default mode, as we have tremendous stress in ourselves to give meaning/reason to things that have already occured. Yet, we do a far more terrible job at synthesizing the facts to turn into a "prescriptive insight", which is simply something we can use to achieve some important objective in the future. The change in Facebook’s demographics could be used as such an insight as well.

What we see in relative growth figures of Facebook’s demographic segments is almost the textbook application of Technology Adoption Lifecycle. Geoffrey A. Moore, author of Crossing the Chasm, provided the foundations of user behavior when faced with discontinuous innovation. Today, a serious cross-section of business world (entrepreneurs, venture capitalists, strategy consultants…) are trying to predict how the adoption behaviour will be realized for a particular product or service. They are building models, extrapolating growth figures, and benchmarking other projects (such as data on walkman, ipod, cable tv etc.) to come up with a forecast. Yet, the data is here. The demographic segment data in Facebook is sufficiently large and mainstream. An intelligent entrepreneur (who is trying to build a consumer-facing start-up) should lose herself in the Facebook demographics data pool and eventually she will have a good understanding of how her own technology adoption cycle will happen. In my opinion, giving this valuable data (not the data at a point in time, but letting people grasp a time series of this data) is almost equivalent as letting go your trade secret. But as it is already out there, entrepreneurs should make use of it.

Gdgt: So what?

Emrecan Dogan — Wed, 01 Jul 2009 22:11:08 +0000

I waited for almost 10 minutes before writing this short post but I couldn’t find any arguments counter to my flash gut feel that said "So what?" after watching gdgt.com intro video featuring Veronica Belmont.

Silicon Alley Insider has reported a traffic lock-down in this new start-up a short time ago.

I think I was never this sharp in any of my comments, so this is a new benchmark. I see no future at all for gdgt.com. This is one of those websites that people interact for a while and then say "So what I am doing here? What will I get from this site". People can argue that there are lots of theme-based social avenues such as flixster or shelfari. But their themes are in fact filled with value. I guess the key point is the exhausting number of items in each theme (thousands of movies, millions of books, etc.) but gadgets are different. Two key questions make me absolutely pessimistic about building a social wrap around gadgets:

Is there a long-tail for gadgets?
Even if there is, what is the problem of millions of product reviews that are already sitting in the cloud?

I wish there was a way to short start-up stocks…

Design Thinking: Contagious Vaccination and Immunization

Emrecan Dogan — Thu, 28 May 2009 21:31:27 +0000

Thanks to Stanford Business School’s unique class offering called Critical Analytical Thinking, I ended up reading a book that I wouldn’t read if it wasn’t for the class: Ghost Map by Steven Johnson. It is a greak book about a major cholera outbreak in Victorian London, but in its essence, it is full of gems that I would integrate into my investigative thinking process against hard-to-crack situations and endeavors. In fact, I have read the book for the second time to make sure that I am not missing some key messages and I actually found new things with the second pass.

One important idea that hit me while reading the book was about an alternative approach in fighting contagious diseases, such as the recent swine flu case. My key question is this: Could we create medicine that is infectious, but in a positive way? What would happen if biotech companies start investing resources in creating microorganisms that can immunize or treat people against diseases such as tuberculosis or cholera and that are air-borne or water-borne? Think about the implications of such an advancement assuming that is is somehow achievable. Think about pouring a ton of swine flu antibodies into Los Angeles municipal water tanks and letting millions of people getting ‘infected’ with swine flu immunization. Doesn’t it sound powerful?

I wonder the barriers for such advancement in medicine. From a cost perspective, how much R&D budget would it require to develop it, and could the efficiency gains in distribution compensate for those investments? Would biotech/pharma companies be concerned about loss of control on their revenue stream? From a technology perspective, if nature is prone to existence of violent viruses that are contagious, what is the limiting factor for artificial creation of contagious benefical microorganisms?

A fresh look at casual gaming: Gameyola

Emrecan Dogan — Wed, 20 May 2009 14:53:49 +0000

One thing I was passionate to pursue in Stanford during the last few months was an up-and-coming gaming start-up. Through our S356 Evaluating Entrepreneurial Opportunities course, uniquely offered by Stanford among other business schools, I joined a team of Stanford CS, EE, and business school students to execute on the idea of a flash gaming platform inside Facebook. I will follow with the details when the time is right to show how we are planning to tie the loose ends in the world of flash games and blend those hundreds of millions of gameplays into a sticky, ongoing social experience.

For now, I wanted to update the community that Gameyola was chosen to be a fbFund finalist.

Intel: We are smarter than you, average humanbeing

Emrecan Dogan — Sat, 16 May 2009 02:40:57 +0000

I stumbled upon two of Intel’s new advertising campaign while watching Hulu today. It was interesting that Intel started reaching out to end-users after a few years. Yet, I think they had some rusty consumer marketing cabinets that prevented them to think carefully about the messages they are communicating to customers.

Here are two messages:

1- Our rock stars are not like your rock stars.

2- Our big ideas are not like your big ideas.

Now, these words can go different ways for different people, but certainly, for some people it will just mean that Intel people are smarter (and better?) than the non-Intel people?

I am really curious to see how the ads will turn out for Intel. See it for yourself in Youtube by searching for Sponsors of Tomorrow. In my opinion, it adds an unnecessary greedy and arrogant dimension to Intel’s public image. Looking at Intel’s not-so-bright advertising history (consider the insulting print advertisement called Sprinters a few years ago), I think Intel needs to start hiring a few brand managers that are, in fact, average humanbeings.

Experience as THE competitive advantage – Netflix case

Emrecan Dogan — Sat, 09 May 2009 15:51:13 +0000

Strategy was one of my favorite classes in Stanford’s first-year MBA program. In general, the entrepreneurial-minded students in Stanford GSB (who are in majority), thinks the strategy class is highly impractical, and in real world, what matters most is the novelity of the core idea. Some people quote strategy professors contradicting themselves in some consequent classes (such as Formation of New Ventures) as these professors are said to be saying "Now, forget everything you learnt in general strategy classes". Students perceive this as a proof that first strategy class had no useful application, while, in fact, this is exactly how the application of strategic thinking works.

When you are starting a new company, your competitive advantage has to be a novel core idea, doing something in a different way that what companies before yours did. Your first competitive advantage is probably the product/market fit, the first-mover advantage, or a patent. No company gets founded on the basis of a strong talent management practice of unique culture. Yet, after the company operates for a while, the rise of the competitors render most of these competitive advantage items as obsolete (maybe except patents, where you have a monopoly). At that time, your company would better have some higher-order competitive advantages (extensive distribution network, loyal customer base, strong talent management or a congruent corporate culture that fits directly into your business model of providing low-cost or high-quality products/services). That is why, in the first stragegy classes where we analyze companies such as JetBlue or USA Today, competitive advantage discussions are mostly based on human factors and leadership, whereas in a Formation of New Ventures course where we evaluated start-up stages of Cisco and SUN Microsystems, we looked at the product/market fit of new product offerings and whether core ideas solve painful problems of a start-ups potential customers.

In summary, competitive advantages are extremely different for companies at different stages of their establishment. One usually overlooked competitive advantage, that is in fact the king of the others on my mind, is Experience. Simply, this is the set of information you accumulate over time operating your business. If you find a robust process to systemically use the information generated by your operations to improve your product offerings, you are said to have a sustainable competitive advantage, the most difficult and the most rewarding advantage a company can and should have. We don’t hear about it often, but when a company has it, it would be extremely harder for competitors to catch them in the marketplace.

One company that I think has such a systemic approach to using experience as the competitive advantage is Netflix. Let’s make the case shortly. Netflix exactly started with a novel core idea: subsciption-based DVD rentals via mail. The competitive advantage of the start-up phase was an extreme product/market fit. Customers had pains about late fees, limited selections in stores, and the need to drive-by (maybe some others as well). Netflix solution addressed most of these, creating a big competitive advantage by fitting its product to market needs. But then what? Blockbuster followed suit (and maybe some other regional players as well). So, as the competitors start doing the same what Netflix does, how can Netflix find a sustainable competitive advantage? It is, in my opinion, the experience.

Now read the following short piece from Download Squad, as an argument for Netflix’s systemic leverage of operational information. Netflix’s higher-order goal is to provide a superior customer experience, or let’s say value. Basically, customers would continue to be a subscriber for Netflix as long as they find good and enough number of movies to watch for the same fixed monthly fee. Otherwise, they might switch to a competitor or leave the market. How can Netflix continue to provide movies to fit the likes of the customers? That is how they leverage experience. On the basis of their huge customer data, they try to predict what customers would like more. That is not novel by itself, as almost all retailers do this. But don’t ingore the crucial point. Netflix is trying to push the envelope at this cutting edge of recommendation engines, not just implementing a recommendation engine suite offered by a specialty start-up. They are making their data available under the Netflix Prize, hoping to seize the most effective methods offered by its developer community. Probably, what Blockbuster is doing at the same front is paying hundred grand to a third-part recommendation systems builder to implement its standard software suite. If you think about Netflix’s customer base and its emphasized approach to customer experience, you will realize that the gap between Netflix and Blockbuster (leader and the follower) is actually widening over time. This is like a reverse death spiral for Netflix, as the more they leverage the experience they have, the lower the attrition will be and the higher the user acquisition will be, contributing to the accumulation of their operation information more, on which they will experiment further to improve user experience.

As every strategy piece has a limit to be exploited though (an analogy to Netflix can be Capital One’s analytics-based approach to credit card industry, and they realized a ceiling for the number of profitable customers they could acquire), Netflix’s experience-based strategy is bound by the mismatch in movie production rates (which is slower) and users’ movie consumption rate (which is higher). I believe that is why they are experimenting other well-known options in strategy literature (one example of which is diversifying with on-demand streams).

Prediction: WolframAlpha will be a really great product for SOME people and never challenge Google

Emrecan Dogan — Wed, 06 May 2009 00:37:40 +0000

Last week, I saw first screenshots of WolframAlpha distributed via a few leading tech blogs. The idea, as far as I can understand from what is being said and shown, is really great. As great as what Mathematica did a decade earlier. I wasn’t excited that much for a while. Yet, just like Mathematica, only some people will realize the huge value of WolframAlpha and only those people will be using it in their lifetime.

Competing against Google? They seem to be on a very different track. I would expect Wikipedia to feel more pressure with WolframAlpha coming up…

Verdict: Great product, and I am up for becoming a lifetime user. A billion-$ success? Definitely no, but the social benefit should be enough for Mr. Wolfram…

Prediction: Gist would, at its best, get acquired by Microsoft (or Google)

Emrecan Dogan — Wed, 06 May 2009 00:30:35 +0000

News hit tech blogs today, saying that Gist received $6.75m to optimize inboxes, both Outlook and Gmail. Like Xobni, it is a great nice-to-have product that will never make it to the millions of computers owned by Fortune companies. The reasons are simple yet critical: 1) Average employee needs incremental training for this, which didn’t happen for any software except Lotus and MS Office applications in the modern history. 2) Employees, which are risk-averse by nature, will always feel the doubt of "missing-out" some emails due to "imperfection" in algorithm, that they will choose not to use it. Consumer market: Early adopters will adopt the product, and it will stay like that forever… Verdict: No success as a standalone company. Best result is to be acquired in the next 2 years by Microsoft or with a slight chance, Google.

Turkish movie on imdb top 250 list

Emrecan Dogan — Thu, 26 Feb 2009 08:05:21 +0000

Similar to what is happening in a few other areas such as basketball, and entrepreneurship, some developing countries are closing the gap between them and the U.S. While Indian hit Slumdog Millionnaire spurred the Oscars, there is another surprising news inside movie world that might delight Turkish people. A 1996 movie, Eskiya, which was really a great movie, sits on the #249 spot in imdb’s top 250 list. That is a great achievement, especially when you consider the fact that previously, the biggest movie export of Turkey, Dunyayi Kurtaran Adam, was considered one of the top 10 trash films ever produced.

Fortunately, this has all changed. As a precaution to losing the #249 position and going off the chart, I attached a screenshot of imdb to keep the record immortal. Of course, it should be noted that Eskiya received only 7300 votes compared to the mid double-digit votes an average movie sitting on the list received. There is certainly a heavy selection bias here, as people who haven’t seen the movie couldn’t vote, and people who has seen but didn’t like the movie don’t bother to search for it on an U.S title-heavy website llike imdb. Nevertheless, it is nice to see a familiar name there.

See the list here while it lasts.

Is something wrong with Sony Playstation’s Launch Strategy: You can only get the demo if you preorder

Emrecan Dogan — Sat, 07 Feb 2009 19:06:50 +0000

Consider this recent piece from the official Sony Playstation blog. There is a blockbuster game, Killzone 2, in the pipeline coming from Sony Computer Entertainment. Recently, the blogosphere heavily criticized Sony for its marketing strategy for the game. If you are a North America member of Playstation Network, the only way to download the demo is to preorder the game from GameStop. In fact, it really looks like deserving those criticisms. But I am a little skeptical. Sony Playstation is the legend in console gaming. Its Playstation 2 console has sold 125 million since its inception, far more than any other. It has published thousands of titles and licensed another thousand. Then, is it really possible that Sony made such a no-brainer mistake that even average gamers (no offense here, that average gamers are not necessarily good strategists) can critique?

I guess there is far much more consideration involved in this marketing plot. Here are some facts that can change the end result of the evaluation:

Killzone 2 is an exclusive Playstation 3 game. That is considered as one of the most important differentiation aspects among consoles today. For the console producers, these exclusives are the most important drivers for the console. From a strategist’s perspective, exclusives are one of the few fundamental things that makes price comparison harder for consumers and that prevent this market to become a commodity, price-wars battlefields.
GameStop is the biggest game retailer in U.S (don’t know how it compares to Amazon.com for online-only business, though) and it has considerable power to influence the profitability of console producers, I suppose.
Most of the games today have a very strong online component, which tracks users’ stats, medals, achievements etc. One component of this online world is rankings, which is arguably the biggest proudness factor among gamers.

Now, what does these points suggest? In general, demos are published because it is thought that people who are on the margin (subset of gaming population who is not aware of the game or who is not yet sure to buy it) can experience a few stages of the game in a risk-free way (demos are free, in general). And then, a certain percentage of those people would hopefully buy the game, and the demo is said to be creating an incremental demand. It looks a no-brainer feature for gamers, and also for publishers. But here are four interesting points to consider for publishers:

For any blockbuster console game in the market today, we are talking about tens of millions of dollars development costs. A demo, which is an incremental development effort, means a considerable addition to budget. Therefore, at any point in time, publishers and developers consider the costs associated with demo development and the incremental sales forecasts it would create.
For some games, the demo would mean make or break for the title. Think about some games that have online-heavy components. For these games to succeed, a network effect (or demand-side increasing returns, so to say) has to be established as soon as possible. Network effect is defined as users of a certain product gets more benefit simply when more users use that product. For an online-heavy game, this is vital. If you buy such a game and login to online lobby, only to see noone is online, then you are really pissed off. Probably, that player will try the online component a few more times, and if those attempts are unsuccessful the gamer is likely to list the game on ebay in a few days. This concern doesn’t apply to all games. Many games have a critical mass of users to satisfy that need. Yet, there are certainly other games which sit on the margin. For these games, demo can be critical. Demo can accelerate the purchase decision and can help the game reach critical mass earlier than the case without the demo.
One thing easily overlooked about demos are the negative effect on demand. Everybody thinks that demos help drive sales. But what about people that are originally planning to buy the game. These people try the demo, and unfortunately, some of these people decide not to buy the game because of their demo experience. The size of this group differs greatly across titles, but it is something that really needs careful consideration.
Channel partners (or with less sexy and more simplified name, retailers) are really key for publishers. Sometimes, what you do can piss off your channel partners. Other times, to increase your store space (against your competitor) you need to make special arrangements for your channel partner, so that it can return the favor.

Last but not least, I come to the key issue that lies between gamers and publishers. Today’s blockbuster games have a tough learning curve, and a big group of highly-competitive players trying to be the ‘best’ in the game. That is one reason (among others) that gamers flock to the stores from the first day. They need to learn and excel the game before their competitors do, so that they can beat them. That is really key. If you employ this perspective, then demo is no longer a trial tool. Demo is a training tool. Actually, it is the training tool of gamers. Let’s consider these facts:

Demo is released a few weeks before the general release of the title. That time is vital for people to get used to controls, levels, game physics etc.
You train in a risk-free environment. Your failures, losses, mistakes doesn’t affect your ‘online identity’. What happens in a demo stays in the demo, except the learnings and expertise you carry into the real arena.
When there is a demo available, it is almost a requirement for the heavy-user to get it. If you consider his decision tree, the potential loss he gets if he doesn’t train is far much bigger than the immediate purchase decision, as he is likely to buy the game at some point.

Now, there are many other considerations related to this marketing plot. And the points above are only a few of them, I suppose. Yet, these points are more than enough, to illustrate that a demo plan is way beyond driving incremental sales. For Sony’s Killzone 2 approach, my intuitive conclusion is this:

Killzone 2 is an exclusive game. And it will probably be a blockbuster. But make no mistake. It is not a game for general audience. There is a very clear, concise definition of the Killzone 2 players I can envision. Arguably, a major part of those gamers are Sony’s most profitable, most involved gamers. They buy games frequently in numbers, they write comments in Playstation forums, they blog (just like I do), they create word-of-mouth, they throw game parties and they push their friends to buy those games so that they can play online. So, by releasing a Killzone 2 demo before the game launch date, you can give chance for on-the-margin buyers to try the game, or you can give it as a training tool for your prime users. Probably, if you give the demo to both, you will lose the added bonus of making your prime-users feel special. Furthermore, you can shoot two bullseye with the same bullet, if you find a way to combine this marketing plot with one of your channel partners, like Sony did with GameStop. At any point in time, when you consider your on-the-margin users, you conclude that not much will change for those users if they don’t play the demo before the release date. They can easily download the demo once the game is released, and once the prime-users are already trained. If you think most of these arguments could be true, then, you can use "People who pre-order" as a screening proxy for "Prime users". If you believe the game is likely to be a blockbuster (as Killzone 2 is a sequel to highly-regarded Killzone, there is a signal here to assume so), then you worry less about building the critical mass for general population. When those general gamers come, you know that there will already be trained, ambitious, expert gamers waiting to hunt them online.

Read New York Times, pass on Silicon Alley Insider. Why?

Emrecan Dogan — Sun, 01 Feb 2009 17:47:55 +0000

I feel great, because NYT just published a story that immensely strengthen my view of blogs that try to maximize their posts-per-day and be-the-first-in-the-blogosphere metrics at the expense of quality. A week ago I wrote about Silicon Alley Insider’s poor post on Wired magazine’s declining ad pages. My firm conclusion was that SAI authors are not spending enough time to write internally-consistent and reasonable posts. I gave some hypothetical arguments about which additional data should be provided to support SAI’s conclusions, and I asserted that traditional news sources such as NYT would have handled the situation differently. Today, that hypothetical assertion gained a practical anecdotal evidence, thanks to NYT.

I won’t write too much on this issue. Just go and visit two posts: One in Silicon Alley Insider and One in New York Times. Then, decide which one is more well-written, and which one is based on sensible, concrete research. And then, try to be more critical for the stories you read on this web 2.0-exclusive sources.

Unfortunate Leap of Hearing Aids

Emrecan Dogan — Sat, 31 Jan 2009 08:02:54 +0000

Not every leap is fortunate. My guess is that Apple’s iPod era will eventually give rise to another leap for hearing aid companies in the next 10-year period, during which early-adopting iPod heavy users will begin to realize considerable loss in hearing ability. Though not necessarily the winner, a company named Sonitus was mentioned in VentureBeat today.

Why blogs are low-quality, second-tier news sources

Emrecan Dogan — Thu, 22 Jan 2009 11:37:30 +0000

To set things straight, this is a blog and it seems like I am badmouthing something that I am personally a part of. But I felt the urge to do so after seeing a series of examples that underlined why blogs suck at most times.

I see that people are talking about the demise of traditional publishing (e.g. newspapers) and the rise of the blogosphere lately. There is all these hot topics about social sharing, democratization and diversification of news (and news sources). Suddenly, editors found themselves the target of critics, as if they were responsible for delivering faulty, wrongly-opinionated, low-quality news to their reader for the last decades. Most of the blogs are on a roll, with millions of viewers and north-facing Analytics graphs. But everyday, I feel the decay of quality in these popular blogs a little bit more. Why shouldn’t I? When a writer is incentivized by the number of the posts she writes (along with a set of other metrics such as # of times a story is read/clicked etc.) and when you eliminate the huge constraint of publishing market (finite publishing space, such as # of pages in newspapers or duration for a TV News run), what you get is as follows:

Lots of news
Low-quality content
Speed delivery

There certainly are good things in these bullet points. Therefore, I want to write more about the low-quality issue. I have a good anecdote to illustrate the immense difference between an ordinary (low-quality blog post) and a story you would read in New York Times. The story is very interesting by itself; Silicon Alley Insider talks about the alleged drop in Wired magazine’s advertising pages, and therefore revenues. The important thing for you to know, is that my aim doesn’t have anything to do with proving SAI is wrong. Instead, I will focus on the mistakes in SAI’s reasoning and arguments. That is something that I consider equally problematic for a news source: Wrong reasoning is as bad as wrong conclusions in my opinion.

The argument #1: The issue numbers just 113 pages in total. Wired’s January issue contained 128 pages; the December issue, 231 pages.

The argument #2: Of those 113 pages, only 31.5 are ad pages. The usual ratio between editorial and advertising hovers around 1:1. 31.5 ad pages is a 27% decline from the January 2009 issue, which itself was a 47% decline from January 2007.

The conclusion: That is miserable.

Before jumping into critics, I want to underline the perspective again. I personally believe Wired is probably in a big problem. But, if I want to support my thoughts in my blog, the data and arguments I present should be at least logically meaningful. That is not the case in the story above. Yet, it is very easy to overlook these mistakes and reach the same conclusion of SAI in this story.

Let’s consider argument #1. February issue has 113 pages, compared to January’s 128 and December’s 231. That looks bad. Or is it? If I ask you to guess the number of greeting cards sold in stores in December, January and February, what would you say? Probably, there would be a pattern similar to Wired’s numbers. I’m not saying that greeting cards and Wired magazine have something in common. But seasonality is a very strong driver in most markets. You can argue that sales (of greeting cards) are not comparable to the number of pages (in Wired). But that is not the point. The point is, when you want to conclude whether a period is better or worse than the past, comparing to the last month may not be a good indicator. If SAI said that February 2009 issue is thinner than February 2008 issue, then that would mean something. But the fact that February issue is thinner than January issue and December issue just presents an invalid argument. If I told you that Wired’s February 2008 had 110 pages, would your opinion change. What if it was 60 pages, or 240 pages? I don’t know the number, but the problem is, the story doesn’t tell neither.

If you look at argument #2, there is a 27% decline from January 2009 issue in the number of ad pages. And January 2009 had a decline of 47% from January 2007! What a convoluted approach. I understand that the best way to illustrate the demise of Wired’s February 2009 issue is to first compare it to January 2009, and then compare the January 2009 issue to January 2007? What happened to historical February data to compare. And why are we travelling back to 2007 when there is a 2008 in the middle? As a critical reader, in this case, you need to be alert for at least two things:

Either the writer is so lazy to make a research for the numbers in January/February 2008.
Or the writer is handpicking (or cherrypicking) data to make his story more interesting.

In any of the cases, it is a big blame for SAI. And that is basically why I think traditional publishing still rocks and why blogosphere is a terrible source to read opinionated stories. Yet, it is still a great a place to do a number of things such as discovering what is new, and getting some private beta invites.

Webmails delete data for a very precise, strategic reason

Emrecan Dogan — Wed, 14 Jan 2009 07:54:10 +0000

Today, TechCrunch ran a post on webmail providers’ policy regarding deletion of inactive e-mails. Jason Kincaid argues that while the cost of storage for these providers are way down and incredible amounts of storage space are given to users for free, these deletion policies are not relevant anymore because it doesn’t cost much for these providers to retain the inbox of inactive users. Well, if you assume that the overarching objective of a free webmail provider is financial concerns, that argument may be valid. Yet, the policy has little to do with keeping the costs down for a webmail provider. Instead, it serves to help the webmail providers deliver their strategic objectives. What are these strategic objectives, then? These are number of active users, number of logins per day/week/month, total e-mails read, and some other non-monetary metrics. Why are these metrics important? Because these metrics help the webmail providers negotiate large scale contracts with the advertisers.

In that sense, the inactive account policy acts like a switching cost. Switching cost is the burden for a user if she is to stop using a service and start using another. The web is filled with a variety of smartly-designed switching costs. Facebook swiftly prevents users to export their contact lists, because the largest burden of moving from one social network to another is the effort of building the same friend links in the new social network. E-mail forwarding is a great tool to switch from one e-mail to another, and that is exactly what Hotmail uses as a switching cost. You can set up an e-mail forwarding address for your Hotmail account, as long as that target e-mail address is another Microsoft property. Similarly, the inactive account policy represents a burden for the user. It is a serious punishment for the user if that user decides not to login to her webmail address for that amount of time. Although the cost of retaining that user’s inbox on the servers is not material, the cost of losing an active user is a material cost for the webmail provider. With that in mind, it is not hard to see that all major, free webmail providers choose to keep in place some deletion policy regarding inactivity.

Seeing and Thinking

Emrecan Dogan — Sun, 11 Jan 2009 05:31:43 +0000

I try to write all about the next leap. Sometimes, it would be nice to stop, take one step back and look at what I am trying to do. This week, I started a great class on hi-tech start-ups in Stanford Business School’s entrepreneurship track. It is taught by Mark Leslie and Andy Rachleff. Both of them are highly accomplished people from the industry with impressive backgrounds. Mark Leslie is best known for founding Veritas, and currently sits on boards of very well-known companies such as Avaya. Andy Rachleff was a General Partner in Benchmark Capital since its inception in 1995 to 2004, after which he started teaching at Stanford Business School. I already had very high expectations for the course, but it easily exceeded my standards with the first session. The case was about John McAfee founding the McAfee Anti-Virus company, and my take-outs are extremely valuable. Mark Leslie opened up the discussion with a quote, which perfectly resonates with the way John McAfee realized that he needed to start an Anti-Virus company, while reading a small news story in San Jose Mercury News. Apparently, among hundreds of thousands of people reading the paper that day, John McAfee was the best-prepared one to seize the opportunity hidden inside the story. Here is the quote:

To see what everyone sees and to think what no one has thought.

from Albert Szent-Gyorgyi

Would the story, and the quote, change the way you read your daily paper? It certainly changed mine.

Future of PC Gaming (vs. Consoles)

Emrecan Dogan — Sun, 11 Jan 2009 02:05:08 +0000

PC Gaming is failing. We can use anecdotal evidence from both market-level and user-level to conclude so. Statistics are all around the place. Sales of entertainment software experienced a robust gain in 2008 and in December holiday period, while console gaming compensating for the loss in PC gaming software. Today, I met a very knowledgeable game developer in Palo Alto and discussed the future of PC gaming. Once, PC Games offered material competitive edges compared to consoles: Keyboard and mouse, online updates, better (and always upgradable) graphics and performance, strong network effect, robust online gaming experience.

Since then, consoles matched, and then exceeded PCs offering in almost all fronts. Today, they have better graphics with same performance at far more affordable price tags compared to a high-end PC spec and strong online connectivity with a unified online experience not for each game alone (like in the case of PC games) but for each profile across games. In terms of network effect, there are now enough consoles out there to satisfy the critical threshold for a society that continuously play games online. In fact, the only weapons of PC gaming remaining strong is the use of keyboard and mouse. That is why first-person shooters, real-time strategy games and MMOs still triumph in PC platform. But it is under challenge. We just heard from Infinity Ward, the studio that developed 2008 Game of the Year Call of Duty 4, that game servers recorded 10+ million Xbox and 4+ million PS3 unique players having played the game since release. Halo is a huge-selling franchise in Xbox. So FPS castle is already down. MMOs have largely been PC-exclusive, but consoles started challenging it with initiatives like Playstation Home.

It seems like the only remaining castle is real-time strategy games, where it is 100% required to use mouse and keyboard combinations extensively. I am really curious to see how developers will migrate those players into consoles and when will PC games officially raise the white flag. Of course, there is a huge area of browser-based casual games that everyone (especially employees at their work computers) plays frequently. But I see the installing, paid-for PC games and the browser-based games completely independent. In that sense, I am trying to forecast the date after which no major studios will be putting the effort to develop a title for PC platform. My guess, with such strong adoption of console gaming, is less that 5 years.

Products Making My Life Better

Emrecan Dogan — Sun, 11 Jan 2009 01:02:16 +0000

While my reading rate for TechCrunch posts are continuously dropping, I still read Michael Arrington’s once-a-year favorite products post every year. Like hundreds of people that link back to that post with their own lists, I will do the same. But, with another layer of information: The Turkish tech products that I can’t live without. My hope is two folds:

Some people will read the post and channel their entrepreneurial enthusiasm for one of those projects rather than another arbitrary derivative/copycat project coming out of Turkey every day these days.
I will be contacted by one of these entrepreneurs to see how to jump start a start-up that will fill the empty spaces.

Global	Turkish
Outlook	Zargan
Google Sites	Eksi Sozluk
Gmail	Garanti Bankasi
VoipBuster
iPhone 3G
Playstation 3
Netflix
Hulu
Pandora
Skype
Google Reader
Google Maps
Live Skydrive
Google Books
Del.icio.us
Dealnews
Amazon
LinkedIn
Wordpress

For Collaboration and communication, Outlook is still my favorite, but I use it along with Gmail. Google Sites host more than 10 different projects of mine, all with different people from different geographies around the world. The Google Sites is so easy to use that my girlfriend hosts a project that catalogs online retailers, our coupons, and our favorite products in shape. iPhone simply helps me to access most of my favorite services listed here on the go. Playstation 3 is just awesome. Call of Duty 4, Blu-Ray, and many more things still to be developed. Netflix, Hulu, and Pandora covers all my entertainment needs. Google Reader is by far my most important product. I think I value it more than my Stanford tuition, but fortunately it is free! Google Maps is a must. Google Books is a great tool to read first, buy later. I have read tens of textbooks before I delve deeper into one subject. Del.icio.us contains 90% of my practical knowledge I accumulated in the last 5 years. It completely works in conjunction with Google Reader and helps me keep track of my knowledgebase. Dealnews saves me lots of time and money, and it fundamentally changed my shopping habit. Historically, the shopping was all about deciding to buy a certain thing in a small timeframe. With dealnews, it is now about deciding to buy right now, literally something with a great value. Amazon supplies everything I have to pay for. LinkedIn is LinkedIn and Wordpress is what enables me to write this.

From Turkey, Zargan is a very handy, simple, fast-loading dictionary. It has a mobile version great for iPhone. EksiSozluk is a social wiki about everything Turkish, with a very committed group of editors and a restricted crowdsourcing model. Garanti Bankasi is Turkey’s leading bank, at least two decades advanced than any bank in U.S. You need to experience it to reach my conclusion, but you have my word. I wish some people at Garanti Bank make the bold decision to enter the U.S market and become the king of finance here. Its mobile version for iPhone is great.

What I lack from Turkey? There is no strong service to consume news about the tech market.

Turkish people are great at favicons, now it is time for web services

Emrecan Dogan — Sat, 10 Jan 2009 04:45:46 +0000

A fairly interesting story for Turkish people today comes from The Official Google Blog, by Marissa Meyer and Michael Lopez: the new favicon of Google.

Since Google’s new favicon launch in June, apparently many users have been submitting a large volume (quoting Google Blog here) of works to Google. Among them, a beautiful one created by Andre Resende was chosen. The part about Turkish people lie in runner-ups, as two of the three runner-ups mentioned in the blog are Turkish: Hadi Onur Demirsoy and Yusuf Sevgen. The other runner-up is Lucian E. Marin, a Romanian designer.

It struck me in the first glance that Turkish people got such a design talent. It is my hope that in the near future, such level of expertise transform into web service building capacity as I have been disappointed by the lack of influential Turkish web products and services in the global scene.

What is wrong with iPhone AppStore ratings?

Emrecan Dogan — Fri, 19 Dec 2008 02:49:22 +0000

A few weeks ago, we celebrated 300 millionth download of 12.000+ applications written for iPhone and iPod Touch. For the developers of those 12.000+ applications, there is a serious mistake on Apple’s side. If you don’t believe in the importance users’ review scores for the applications, then you don’t need to continue reading. If you believe, let’s see what is wrong.

The problem starts with the question: What are the ways that people can leave review score for a particular application. To be fair for all app developers and also to all iPhone users, all applications (regardless of how great or silly they are) need to have equal chances of receiving a fair review. The two words are underlined, because Apple’s current iPhone firmware asks for a review score when a user uninstalls an application from her phone. Now, what is wrong with it?

It is very safe to assume that the major reason for somebody to uninstall an application is that she doesn’t like it. Therefore, if Apple takes a look at the review scores coming from the iPhone uninstall interface, I bet they wouldn’t be able to see a score above 3. If so, I would argue that nobody would have uninstalled the application in the first place. What is the implication then?

Equality: With this uninstall interface, uninstalled applications get disproportionate opportunities to be reviewed, compared to other applications that doesn’t get uninstalled. Please keep in mind that the score itself is irrelevant here. It can be good or bad for the developers of these highly-uninstalled applications. The problem with equality is that inequality decreases the credibility of review scores.

Fairness: The system creates an adverse selection problem, which is a very common psychological mistake we do every day. With this review screen right before the uninstallation, the uninstalled application receives (expectedly) bad scores. But the continuing users of that particular application might never find such an easy chance to give a review score. So, even though that application might be a decent one for the general userbase, the users who uninstall it would sink that application down and may inhibit the further expansion of its userbase.

Bottomline, it is not a life threat, but I would feel better if I were an application developer for iPhone. As a heavy user of these apps, I feel less confident about the review scores I see on AppStore.

The largest platform is yet to emerge

Emrecan Dogan — Sat, 25 Oct 2008 23:52:43 +0000

The ‘platform’ became the hot trend of last two years. Most of the web services I used became some kind of a platform; some had great traction such as Facebook and iPhone while some others never gave me the leap in functionality to go the extra mile, such as Netvibes and iGoogle. Although one may claim that platforms and applications are at their peak, that may not be necessarily so. iPhone applications reach about 12 million users today, and that number is somewhere around 40 million for Facebook. I am almost sure that those numbers will not go beyond the number of cars on the roads today, which tallies around 600 million globally and 250 million in the U.S alone. As one of the biggest defenders of proprietary technology in the world, could automakers be bold enough to open their doors for application developers? It certainly seems so, as pointed out by a BMW executive during a panel in Detroit.

I am totally delighted with the idea, as the simple displays in the cars I used before, which was inflated by car manufacturers with terms like ‘Drive Computer’, have lots of potential to do more but in fact accomplish only a little in practice. If a group of automakers decide to collaborate together, it would provide a critical mass for application developers to come up with new functionalities that we never experienced before. It would even make my stretch Crowdsourcing for Traffic idea possible.

Coming to pros and cons, the system could turn into an extra revenue stream for car makers, where they would provide drivers the opportunity to buy new functionalities and navigation maps on the go. Moreover, it would be a significant boost for owners’ convenience, as the manufacturers would update the firmware of various car functions on the air, without a need to visit the service shop. On the flipside, unauthorized access of appllications to mission critical electronic functions such as braking and airbag control has the potential to be simply lethal. The consequences could be far more disastrous than the ones caused by security holes in Windows or Facebook.

A simple way to avoid PET water bottle usage

Emrecan Dogan — Mon, 01 Sep 2008 21:36:47 +0000

A few weeks ago, I decided to tally my PET bottle consumption, day by day. That state of alertness has led me to postpone my thirst in a coffee shop or restaurant for the sake of avoiding another PET waste. Tonight, I was sitting in a Gloria Jeans coffee in Istanbul with my mom, running a couple of hours-long chat when I realized that I was quite thirsty and couldn’t postpone the drink this time. Yet, instead of putting another PET mark on my score board, I tried my luck demanding a glass of water without opening a bottle. It was an unexpectedly easy win for me as the waiter grasped the environmental intent at once and brought a glass filled with water allocated for coffee use. That moment, it struck me with the idea. Who needs the bottled water in a going-out occasion? If we demand non-bottled water, then owners would eventually switch to carboy water. It would even be more profitable for them if they price it the same vs. bottled water.

How about that?

P.S: Do you think it can be done in Starbucks too?

Why we need to avoid tempering with cycles of nature

Emrecan Dogan — Tue, 26 Aug 2008 21:50:30 +0000

Today, I came back from a village visit in my hometown, having acquired more knowledge than many books and many lectures taught me in my university years. I will keep most of those to myself, but share an intruguing piece of news in the field of infectous diseases to illustrate why it is an abruptly bad idea to temper the cycles of nature, just like Planktos have tried before and will try again.

Here is the story that helped me experience a paradigm shift about tempering the cycles of nature.

Back in January 2006, the world got crazy about avian flu, a contagious disease that has reincarnated from its grave in every ten year for the last 50 years. Turkey was one of the hotspots for the disease. Although the death toll was at the same magnitude of people dying after accidentally falling over their balconies, the fear factor erased the minor conscious portion of the decision makers and soon, a mass slaughter of poultry was in place. In a few weeks, hundreds of millions of chicken and roosters were burnt in farms and villages. No chicken, no avian flu. Risk-free solution.

One of the most interesting facts is that, some poultry animals (let’s call them chickens from now on to avoid sounding like a farming lab blog) are naturally immune to some of the most poisonous fluids found in scorpions, snakes and, yes, ticks. As per their natural immunity, chickens were able to eat these small animals without getting poisoned from their venom. In a typical meal of a chicken, a combination of ticks almost always found their role.

Fast-forward to late-2007 and these ticks, with no chickens to feed, was left alone to expand and populate. With them, came Crimean-Congo Hemorrhagic Fever (CCHF), That illness took more lives in Turkey than Avian Flu did in the whole world in the last 18 months.

The very interesting point in this story was that, the folks in the village I visited seemed to know this natural relationship and feedback loop all along the way. Apparently, the science and public management community didn’t know that much.

Building on that, I have a word or two for the company named Planktos, which is trying to reincarnate in these days. They call their efforts under the "ecorestoration" and they hope to fill massive areas of oceans with planktons, in an effort to have them process way much more carbondioxide and reduce the current levels. A good intention coupled with a very risky execution. With no villagers living under the ocean, it will be even harder to learn from experience what effects such a bold move can ignite.

Two Facebook App Ideas

Emrecan Dogan — Sat, 23 Aug 2008 08:19:52 +0000

Wedding Table Planner

In a week from now, I will attend the wedding of a friend of mine. A few days ago, I RSVPed online and right at that moment I got curious about whether this wedding RSVP service provided some wedding table planner tools. It simply couldn’t, because RSVP form did not have any questions or fields regarding my close friends or colleagues. At that very moment, I understood that Facebook would be the killer platform for building a wedding table optimization app.

I am still not married and don’t know how much effort is needed for the wedding table optimization (best friends go to same table without leaving anybody at the same table with people they don’t know). Coming from an industrial engineering background, I can at least sense how big of an optimization problem should it be for the bride and groom. So why not outsource the RSVP process through Facebook, in which an internal engine could set up an initial table setting based on guests’ own friends that are invited to the event. It can even score the closeness of a friend pair based on either number of mutual friends, number of mutual wall posts or etc. Then the bride and groom can fine tune the details, add out-of-facebook guests to some empty points and voila, every guest is ~~optimized~~ happy! The Friend Wheel application has already completed much of the groundwork on that front!

Economics? Ok, barely an app is making money from Facebook but come on, isn’t the wedding one of those rare economic phenomenas that have a nearly complete price inelasticity?

Turkish Fantasy Football (Soccer)

Up to facebook’s rise and shine in Asia Minor, I could only list a few addictions that could be related to the whole population. One of them would be soccer. Right at these days every year, the life stops to speculate, watch and fight about the opening games of Turkish football league. Then came Facebook, as another general population addiction (Turks being #4 in overall population and #1 in non-English speaking population in Facebook rankings). Yet, I am disappointed that nobody came with a fantasy football app on Facebook that combined these two socioeconomical addictions in the perfect platform! I am pretty much inclined to take equity in such a venture, but be quick! The opening match is today!

A so-called social movement for Turkish internet freedom

Emrecan Dogan — Tue, 19 Aug 2008 07:40:54 +0000

Regardless of your nationality and current hometown, you are probably aware of the strange situation going on in Turkey for some time. For the ones that doesn’t know, here is a brief heads-up:

Some international websites (the most popular being YouTube.com, followed by others such as Slide.com and Alibaba.com) with heavy user generated content are being sued in Turkish courts for permitting such content that insults Turkish people and heritage. In case these websites do not comply with the content removal request, Turkish courts request access restriction from Turkish Internet Authority, and the ban gets put into action in a few days. Currently, a handful of websites are inaccesible through Turkish ISPs.

This is no breaking news for most regular readers, but another set of developments lately arose with a so-called "social movement" coming from some Turkish webmasters, publishers and authors. It is a no-miss event playing only till August 20 evening, so I suggest you take a look through Turkish websites such as Webrazzi.com and AnaFikir.com.

In its core, these 200+ of "social-moving" websites put a landing page (script) on their domain to meet first-time entrants with the following message "Access to this website is restricted as decided by its owner" in an effort to get a sarcastic reference that YouTube receives "Access to this website is restricted as requested by Turkish courts".

It is a completely different discussion whether the move is right, wrong or the most effective one. Instead, I will put light on one subject that easily passed through each of these 200+ website managers’ minds. As Turkish citizens by nature (I suppose), I would expect these next-gen website authors to care at least a fraction of how much they care about Turkish internet freedom as they care for upholding Turkish values and heritage. Burning with passion to freed Turkish internet, I was sad to see that these people didn’t put similar emphasis in protesting these major international websites and requesting the removal of such insulting content. Instead, as I would expect for most superficially activist-minded people, they are burning with the desire to "be a part of the shiny, PRry social movement of Turkey and gain some brand recognition and Resume bullet" instead of the duty to "do the right things in the right order for the sake of social awareness".

Please find, read and elaborate on the following content on this subject:

Turkey’s TechCrunch ~~clone~~ style blog on the subject (Turkish).

Original TechCrunch play on the subject. (English). Woohoo, Turks are in TechCrunch! Sad that not with a killer startup though.

A Turkish VC General Partner’s standpoint on the subject. (English)

Clean Tech IPO era begins?

Emrecan Dogan — Thu, 03 Jul 2008 10:50:57 +0000

We may remember Energy Recovery Inc. as the starting point for Clean Tech era in stock markets. Although not many are in line for the near future IPO window, strong commitments of VCs (here and here) would be reasonable indicators for a productive IPO market 5-10 years ahead.

Let’s mark the Energy Recovery Inc. IPO details here and track the progress to see whether this water desalination company with ever-efficient energy usage beats the market in the long run.

Ticker: ERII

Market: NASDAQ

IPO Price: 8.50 US$

Money Raised: 119 million US$

MCap: 471 million US$ (based on yesterday’s closing price of 9.83 US$)

Financials: In 2007, Energy Recovery’s earnings rose to $5.8 million from $2.4 million in 2006. The company’s revenue grew to $35.4 million from $20.1 million.

Yahoo! Finance
Quote for ERII/

DimDim is the shift towards truly mobile collaboration

Emrecan Dogan — Fri, 04 Apr 2008 09:34:10 +0000

I really wonder whether there is anything in the world that is, by nature, inappropriate for open-source porting.

When I read about DimDim in ReadWriteWeb here, I was surprised that nobody get into the field of WebEx with the open-source lenses that DimDim used. In three bullet-points I can summarize what DimDim does and why they do what they do in a great way.

DimDim lets people connect, write and talk to each other while sharing their desktops and slides. This is what many others (and other others) offer. The DimDim’s killer feature is that the connectivity features are all inside the browser, with no need of software installation.
Its revenue model is quite flexible for different types of organizations. Big corporations get the same fee approach with good savings vs. other services. Small companies share a percent of the revenues and start-ups get the service free in exchange of the start-ups’ engineering staff’s contribution to DimDim’s open-source platform.
Continuing from 2nd bullet, the platform being open-source is a huge gain by itself. And the penetration model for start-ups inherently supports the development of the system towards the excellence.

My only comment for DimDim, which is almost half joke and half opinion ( ), is that big corporations may see its funny name as a penetration barrier.

Great work…

Getting denied is not always bad

Emrecan Dogan — Fri, 28 Mar 2008 14:26:55 +0000

On September 27th, 2006 I was so enthusiastic. I wrote an e-mail to Tom Fischer, then VP of EMEA for Pay By Touch, an innovative Biometrics company. It was almost one year I got out of college and Pay By Touch was on top of my wishlist for my entrepreneurial aspirations. Among many ideas, Pay By Touch became my favorite beucase I thought it really cut some serious friction out of people’s lives, by giving them an alternative payment method: biometric identifying information tied to people’s credit cards and bank accounts. I guess I was wrong. Totally wrong. Yet, I am glad I learnt it the easy way.

The way I was denied was a bit of failure for me. I applied with a detailed business plan depicting how to expand into Turkey, which merchants to start partnership and which banking institutions to get alliance. VP Tom Fischer had replied with a standard e-mail of denial and the rest is history.

Here is the e-mail I received:

Dear Mr Dogan

I returned from my US trip this morning having discussed your proposals with my US colleagues. While we appreciate your interest in Pay By Touch, we are not looking to expand our operations into Turkey at this point.

We do believe that Pay By Touch is applicable globally and intend to provide the service around the world in the future. As our international expansion plans evolve we would be pleased to explore the possibility of a partnership with your organization. However, we would not anticipate this taking place for another 12–18 months.

We would like to keep your details on file and will contact you at the appropriate time. I have copied your details to my colleague Gus Spanos who is the Executive responsible for Investor relationships.

Thank you again for your interest in Pay By Touch.

Best regards

Tom Fischer

Vice President

And here is the Pay By Touch landing page as of March 28th, 2008 (click for a readable copy):

So, sometimes denial is really meant for good.

Preinstalled distributed computing

Emrecan Dogan — Mon, 24 Mar 2008 10:06:58 +0000

I am pretty convinced that majority of the global population will not give up letting their computers open while they are not using it. The result? Millions of kilowatts lost to unnecessary heat and CPU computing time.

So why don’t computer producers preinstall some distributed computing programs (e.g. Stanford University’s Folding @ Home project) and give the users the choice to opt-out from the project, rather than today’s opt-in setting?

My words are especially emphasized for Sony, which overloads its laptops with trial versions of several software packages such as Sony Vegas, MS Office and Norton.

The catch here is that, the best thing an individual can do for environment is to shut down the computer while not in use. But if you won’t do it, then make that energy loss a little bit meaningful…

Crowdticketing for traffic

Emrecan Dogan — Mon, 24 Mar 2008 10:00:09 +0000

Every weekday, I wake up at 06:30 and head for the rendezvous point for my company shuttle for a one-hour drive. Usually, the service shuttle picks me no later than 07:15, a point in time that most of the people are still asleep. Today was just one of those ordinary days with one slight difference. There was something wrong with my temperament and I couldn’t cope with the unnecessary horns of many bypassing cars and shuttles. I realized that, as it is free, most people do not refrain from using horns during very early and late hours of the day, with no sensitivity given for people sleeping or being educated. At that point, I wished for an text-message-based service that collects instantaneous reports from citizens about unethical, unlawful or dangerous behavior of drivers… And then I discovered that it is a potentially superb idea of collecting wisdom of crowds for the greater good of public.

I can not say that the citizen’s ability to ticket misbehavior in traffic is zero. If you are keen enough, you can call the 154 service in Turkey to directly connect Police Hotline and tell your complaint. Or in the case of commercial vehicle violations, there is usually an hotline stickered on the vehicle, which you can call and file your complaint. The problem is that both of these methods are effort consuming. Except quite serious circumstances, the effort to call the hotline, wait for the operator and tell the details outweigh the potential benefit of making the violent driver avoid another crossing while red light is on.

What I dream is a crowdticketing or crowdflagging system for traffic issues, which primarily rests on mobile phones. And the tagline should read "everyone is a policeman!".

Let’s say you are just at the pedestrian crossing area when a car ignored the red light and has gone by. You simply write its license plate number, the type of violation (in this case, it should be something like ‘violate pedestrian crossing’) and voila. The violation is received by the system and is instantly linked to the license plate. When there is the GPS function embedded in the mobile phone system, it is even better. You simply add the GPS data in the text message, and the system will know exactly when and where that license plate violated some laws or showed misbehavior.

I am not taking the highest proponent level that this database should form a strict source for issuing bans or fines. But it may help mainly with two ways:

When a serious complaint is made to police hotline, the officers can login to this system and see whether that license plate has received some similar flags from the crowdticketing system. By doing so, police can have its case reinforced and commit to a serious legal action.
In the case of multiple flagging, police officers can be convinced that a particular driver is ‘hot’, that is he is on a violating track right now. In this case, let’s say the first user reports a particular driver about speeding and 10 minutes later, another user reports the same car for dangerous driving or not stopping at a stop sign. In such situation, police officers would know that different, and independent, sources of information will reveal a outlaw driver case!

Although I foresee many opposing ideas to this case, I still believe this would be a great complementary service for public good and wealth. If that service existed, I would certainly flag many drivers using their horns unnecessarily early morning…

So what do you think? Anybody out there to turn this idea into another web 2.0 service?

Rafting against the SSD current

Emrecan Dogan — Wed, 19 Mar 2008 10:55:43 +0000

History is full of unfortunate claims made by the industry leaders, government forerunners and arrogant scientists. Bill Watkins, CEO of Seagate Technologies, will be the next one on that infamous list, which contains Sony’s Betacam and ATRAC bets and Kodak’s digital-photography inertia, in my opinion.

The Fortune blogpost covers the perspective of Seagate CEO on the recent developments in flash-based hard disk drives (so-called Solid State Drives) that potentially present significant drop in weight, operational noise and increase in durability. As the biggest producer of hard disk drives in the world, and as one of the best stock price performers in the market, Seagate has the privileged position to drive the market convergence towards SSDs and take a major stake from the growth to come. In a world that mobility is highly appreciated, a leader has to occasionally leave his ivory tower and look beyond what his organization possess today. Although I don’t the impact would be of the same magnitude, I expect a big crash for Seagate in a similar way that Kodak lately realized that they made a huge mistake ignoring the rise of digital photography…

As always, here is the real deal. As of today, Nasdaq is at 2268 and Seagate (STX) is at 21.73$. We will see what happens with the rise of SSDs…

Alternate Universe’s Heroes

Emrecan Dogan — Wed, 12 Mar 2008 09:15:46 +0000

Cyberworld is gradually turning into an alternate universe of brand new heroes, nations and economies. This post is not intended to run a Cyberworld 101, but only to reveal some fascinating things going on in one of the most mysterious sections of the internet: The Torrents.

Torrent is a world that is yet to be discovered by corporations. Yet, that untapped potential will be the subject of another post. Rather, I would like to talk about aXXo and TorrentFreak’s DVDRip Charts.

Let’s start with aXXo. I am not sure how many of you know him, but he is one of the heroes of the alternate internet universe. I suspect he is physically met by many people, yet he has millions of fans throughout the world. In a world of piracy, the aXXo brand stands for sustained-quality for hundreds of illegal DVD rips. Just as Volvo stands for safety in car manufacturing, aXXo name puts a high-quality stamp in the pirating world of torrents. The interesting part for me, is that people grow empathy and love for somebody they barely know. aXXo can be a 70-year-old grandpa or a lady aged sixteen, but there is a crowd out there that worships him/her no strings attached. His pirated work of hundreds of blockbusters are said to be downloaded more than a million times a day, and news about him going to jail is protested by hundred thousands of people around the world.

So the question is, what will be the inception point that heroes of the online world will surge over heroes of the old world as we know it?

Disclaimer: My perspective in this post is more inclined towards dynamics of internet world rather than the question marks regarding torrent world. I believe using torrents for pirating copyrighted content is the worst way for the Torrent technology to be leveraged.

Demo 2008 Aftermath

Emrecan Dogan — Sat, 01 Mar 2008 21:33:35 +0000

Slightly more than a month passed after 77 interesting companies made their pitch at Demo 2008 conference. My conjecture is that less than 10% of them will make it to the next stage and become sustainably successful companies. Therefore, I chose 6 companies as my favorites and here is the list with descending order of potential: Livescribe, CatalystWeb, KonoLive, Skyfire, Rove, Iterasi.

It is already in my Wish List. I expect a reasonable productivity increase for individuals all over the world when they start to use this sound-recording-while-writing pen. With its 150-200US$ price range, it is reasonably affordable. The innovation comes from the fact that Smartpen records what it hears while you take notes with the pen, and it syncs your hand movements and writings with the timestamp of audio, letting you to relive your lecture at its full potential. As should be, their prime prospect is collegiates, a group of more than 17 million just in US. There are numerous opportunities for distribution rights in other countries, including mine, Turkey. The risks? The pen has too many features and micro-gadgets on it (OLED screen, audio recorder, speaker, infrared camera, usb connector to name a few) that may turn out to be as fragile as first-generation ipod nano’s scratchable screen.

This will be a big life-saver for small businesses. Not all companies have their dedicated IT teams that provide them with reliable and safe collaboration & productivity features such as business e-mail, calendar sharing and appointment managing, online file storage and private instant messaging. CatalystWeb is just that. Their CatalystOffice suite is a turn-key collection of smart tools that will boost a small company’s productivity capability overnight. I would list at least 50.000 small businesses here in Turkey that will subscribe to this service if the price tag stays below 3000 US$ per month.

One of the factors that delayed my post on Demo 2008 was the big category presentation we had to build for Procter & Gamble Oral Care Review on Feb 21st. When there are eight managers supplying content to a single presentation and there is only one person providing feedback, the proper updating process of that single presentation file turns into a mess. The last time I counted, there were 22 versions of that presentation before we gave it a go. KonoLive, hopefully, will eliminate that collaboration friction. When MS Office’s "Compare and Merge" function does not fulfill its duty, which in most cases actually does not, KonoLive may present a great opportunity for co-workers to cut merge-and-edit times and boost productivity.

A free, robust mobile browser that helps you experience rich media in your mobile, almost in the same way that you would experience it in your PC screen. It is simple and powerful, if and only if it delivers its promise of seamless transformation of the website into the tiny mobile screens. The browser’s flashy feature is that it does not need a mobile version of a particular website. If it manages to create the mobile version of ANY website by itself, that browser will be a killer and I guess it won’t be long before we hear an acquisition news from Google, Microsoft or Nokia.

Let your work computer open and connect it remotely from anywhere via your mobile. Another killer mobile app. It is another productivity-booster idea coming out of Demo 2008 and I don’t think it is just a coincidence that three out of six favorites of mine turned out to be services that boost corporate output per capita. May there be a big gap there already? PCMobilizr is not the only big shift Rove did recently. It was of course another good move that they changed their former name: Idokorro Mobile. One important piece of feedback: Please bundle Folding @ Home setup file along with PCMobilizr client suite, so that work computers left open to be able to communicate remotely does not completely waste the electricity but turns some of it into medical supercomputing effort! That is exactly what every remote-access software company should do…

At last a pure surfer fave in the list. It is not very paranoid to think that some of your favorite articles on the web may cease to exist suddenly. Then you are only left with a link that summarizes the text with 6 words, and you regret not copying it to Word. Or in another case you could be travelling with your girlfriend and you just wanted to share a Forbes Most Expensive Houses List (I don’t personally recommend doing such a thing…) but you sadly see that you can’t reach it offline. Iterasi fills spots such as those two. It lets you download webpages in their entirety and view them offline. The key point is that although there are efficient ways to export content, it is quite hard to arrange the same browsing experience in an offline or isolated mode. Iterasi claims to do that, and apparently they do. On one side, we all know that not all content needs downloading. For most of the cases, links are vital, and enough. Yet, in many situations when you think you found an article that deserves mummifying and isolating for next generations, iterasi is your mate.

I also have one company that I liked, but has some questions regarding the scale, so that I didn’t put its logo and discuss it in more than one sentence. It is StandoutJobs and it is at least adding a funny side for job seekers, even if corporations fail to utilize what it offers. But I hope they do…

There is a post from VentureBeat that summarizes a subset of Demo08 companies. It is not great to have just three overlapping services, but it is still better than nothing…

What does Navigenics, Matrix and Minority Report have in common?

Emrecan Dogan — Mon, 25 Feb 2008 18:09:02 +0000

Navigenics, the Redwood Shores, CA company that I read about in Technology Review’s Jan/Feb 2008 issue brought me back to the beautiful dilemmas of placebo drugs, Matrix and Minority Report.

Navigenics is the leading developer of a genetics test that has the potential to tell its customers the probability of getting a heart attack or Alzheimer’s diseas in the next 20 years. It looks fairly inspiring at the face value but the word in bold changes everything, I guess.

I will start with the ‘99 blockbuster Matrix. In one scene where Neo meets Oracle, there is a beautifully told story of a dilemma. The old oracle tells Neo not to feel sorry about the vase. Surprised to hear it, Neo turns back to see where the vase is, and his elbow hits the vase to make it fall and crack. And the Oracle asks, “If I hadn’t told you about the vase, would that vase got broken?”

A similar beautifully depicted dilemma was present in Spielberg’s Minority Report. Tom Cruise plays an agent working for D.C Pre-crime department. Thanks to the gifted oracles, homicides can be seen before they occur in real time, and Tom Cruise’s team tries to reach the crime scene before the countdown reaches to zero. As a result, they arrest the suspect before he commits the crime itself. Would that make the suspect guilty?

Enough for movies and Hollywood. I just wanted to make my point about Navigenics a bit stronger. I grew up with the stories of placebo drug effects, with which patients that receives fake medicines show a significant signal of recovery, just because they think the drug they take is proven effective. Today, Navigenics, with its huge potential on the positive side, may also bring a dangerous side effect to the lives of the patients.

Let’s consider a John Doe, at his forties, rich enough to buy a 2.500US$ genetics test from Navigenics. Thanks to his test, Navigenics experts pulls out a diagnostics map of John Doe, with specific vulnerability probabilities to many of today’s fatal diseases. Based on that probability report, experts suggest a dietary and/or medicine plan to John Doe. What Navigenics expects is that John Doe becomes energized to beat his potential vulnerability and commits to the multi-year diet and medicine plan that may help him to overcome his genes’ weaknesses. What Navigenics ignore, in my opinion, is that people tend to give in more frequently than they withstand. What would happen if John Doe is told that he has a 25% probability to have a heart attack in the next 10 years and John Doe loses his faith and excitiment for life. And then, how can we be sure that the reason of him having a heart-attack in 2018 is his genes, but not his mind that previously has shown the significance of human psychology in placebo drug trials.

With the pragmatic sense of US government officials, Navigenics managers can claim that, on average, they may be doing more good than bad. But even if this probability calculations causes 1 single person to live a more pessimistic life after the tests, is it an expandable life of one single life for the good of many others?

Further reading can be found in VentureBeat and Wall Street Journal.

Ideas I Love: Xobni

Emrecan Dogan — Sat, 16 Feb 2008 22:58:11 +0000

Ok, I don’t have the invite yet, but I am impatiently waiting for it! After Gmail’s easing effect on my personal e-mail management cycle, I expect the same thing for my corporate e-mail in Procter & Gamble. After the trial, I even plan to propose that to our IT dept. Just as I talked, what will be their business plan? How are they going to make money? From the freemium concept or from corporate sales? I guess the latter will work better, as personal customers may not see enough incentive to join a subscription program. But we will see. For the time being, I will stick to the idea and see how it evolves!

Here are the links that made me discover this great start-up:

TechCrunch40 Conference

TechCrunch post on Xobni