It’s no secret that Microsoft is desperate to become more relevant in the Internet world. The recent failed attempt to acquire Yahoo was just the latest in a series of efforts to at least maintain some semblance of competition with Google, which quite frankly is kicking Microsoft’s butt in that space. So why then is Microsoft not doing more to leverage what in my opinion is probably its single most powerful asset - the tens, perhaps even hundreds of thousands of developers out there in the world of enterprise who know nothing but Microsoft tools?

I was reminded of how strong Microsoft’s hold on these developers is the other day when I tried to recruit an old colleague to work on a startup project with me. I succeeded in getting him on board but he wasn’t willing to even consider looking at ruby on rails, python or PHP. Having been a desktop application programmer for close to 10 years, he was willing to learn something new - web development - he just wasn’t prepared to do so in any language or framework that wasn’t familiar. Basically, he wanted something that didn’t involve too steep a learning curve. Now even if you think that this kind of ‘loyalty’ is misguided or based on ignorance, you would have to agree that Microsoft would be foolish not to take advantage of it.
I have personally worked in several software companies and know of many more that employ hundreds of developers like my old colleague, to build and maintain purely windows based desktop applications. Many of these developers know nothing else but Microsoft technologies. While I don’t suppose that too many of them are pro-actively pursuing careers or startup opportunities in web development, this is where I think Microsoft can come in.

Now I know for a fact that Microsoft regularly organises well-attended events during which it shows off upcoming technologies  and tools to its developer community. From what I have heard most of the desktop application developers only pay cursory attention to the web-related products and are understandably more interested in desktop ware. But what if Microsoft managed to persuade a large proportion of these developers to move into web development? Might it not begin to stand a chance of building a strong and competitive web-developer following? I suppose my point is that since Microsoft is never going to win the hearts and minds of the current web (2.0) development crowd from the likes ruby on rails, python, PHP, it might as well build a whole new one.

So how might Microsoft go about building this new class of web developer community? Well, by building an ecosystem around web applications built using Microsoft tools. It should offer startup capital to startups using its technologies. I note that this is already happening to some degree but it needs to be extended to current non-web developers. Furthermore, it should offer free SEO, advertising, advice etc. It should steer them towards monetisation using its advertising platforms. Whatever it does, what is most important is that Microsoft should be the one to introduce these developers to the wonderful world of web 2.0 or 3.0 or whatever you want to call it - holding their hands every step of the way.

So how likely is it that Microsoft will heed any of my advice or similar? Not very likely if you believe ex-Microsoft employee Robert Scoble, who has given up on Microsoft, saying that it just doesn’t listen to anyone anymore and that any advice given to it is just a waste of time.

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Why don’t GPS sat nav units serve ads? Why not give away sat nav units and sell advertising to businesses such that when a user arrives at their destination, the familiar “You have reached your destination” message is quickly followed by a couple of brief audio ads? For in-phone sat nav units, the user could receive the ads by text.

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A meme did the rounds last week variously titled “How To Fix Venture Capital”, “Why There Aren’t More Googles” and “Where are the $Billion Startups?”. Basically Umair Haque started it by suggesting that the reason there aren’t more big companies like Google is because startups get bought before they can make it that big. Paul Graham argued against this, suggesting that the real reason is that VCs won’t invest in small startups. Don Dodge argued that the real issue is a lack of truly disruptive business ideas. So it got me thinking what would a billion dollar startup look like anyway?

I thought a good place to start would be to think about what it is that makes Microsoft and Google the colossal giants that they are. There are other really large technology companies of course but few as big or as significant as these two. Why for example are very successful companies like Facebook, LinkedIn, Skype, Yahoo, even Apple not quite as big as Google or Microsoft.

This gets even more interesting when you compare Google and Microsoft and find that whilst there may well be several similarities between them, there pare robably just as many, if not more differences between them. I won’t dwell on this particularly but on the one hand Google’s primary source of revenue – search – is a free, consumer-focused, web based product that has a single and simple touch point for users. On the other hand, Microsoft’s cash cows – Windows and Office – are not free, are primarily business-focused, have to be installed and are made up of several sub-products that each have multiple user interfaces.

Three important similarities however between these giants are that:

1. They each solve real problems for their users - Microsoft products are primarily for getting work/stuff done in the office and for many at home also. Google is for getting information from the web.
2. They each cornered or arguably offer the best product for their domain and platform and therefore dominate it – Microsoft Windows and Office for the PC and Google Search for the web.
3. They each provide an ecosystem that enables people to make money by serving the needs of others, i.e. Google for advertisers and publishers and Microsoft for businesses and skilled employees/contractors who use and write applications on Windows.

It is instructive to note that Facebook and MySpace also possess the last two traits above, being the leading social networking sites and having created platforms that enable application developers to make money. The problems with these two companies are that neither is completely dominant; social networking though quite big, is nowhere near as big a market as search or PC OS and office applications; and their ecosystems just aren’t as strong as Microsoft’s and Google’s. And of course they don’t have trait #1 above - at least not yet. Instead they are mostly used by the majority of their users for fun and entertainment.

Given where the tech industry is right now, I would argue that the Microsoft is dying and that the Google way is probably the better basis for the next $billion company. So in my opinion, the next big thing needs to be:

1. Consumer (rather than enterprise) facing
2. Like Google, provide information for free and make money from advertising
3. Provide a source of revenue not just for the startup but third-party skilled individuals/companies
4. Have its use be solitary in nature, i.e. not require users to network with other users in order to use it.

Since the above is more or less a description of Google, perhaps looking for the next Google is a lost cause - but wait what about the mobile space? Google may have dominated the web but I think mobile is still up for grabs. More on that in a future post.

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I had been listening recently to an album for about a week or so that I thought my brother and sister-in-law would like. I had the album in MP3 format but I thought that if I sent it to them digitally, they might listen to it in a few weeks or months, with some prompting from me - they are busy people. So instead, I bought them a copy of the album and sent it to them and of course my brother put it in his car straight away, they both listened to it on their way out one weekend, called me there and then and said how great it was. Result!

Now there are a couple of interesting lessons here:

1. In this day and age where start-ups are encouraged (and rightly so) to make it easy for their users to spread the word, it is ironic that the people they are spreading the word to are most likely to pay attention when it is not so easy to spread the word. Basically, our knowledge of how easy an unsolicited recommendation was for the recommender, devalues the recommendation.
2. The ease with which a recommendation can be consumed is perhaps just as important, if not more so, as the ease/difficulty with which the recommendation is made. My brother didn’t have to download 12 MP3s to iTunes and sync to his iPod in order to consume the album I sent him, he just had to insert a CD into his car stereo.

Could there be a Facebook application idea or recommendations model lurking in these lessons I wonder. OK, so recommendations don’t have to cost money or be as hard as what I did in the above example, but what if an application existed (on Facebook perhaps) that issued a virtual currency of some sort. Users could be given a starting amount of the currency when they join. The currency would need to have some value e.g. for consuming premium content. In order to earn more of the currency, users would need to make recommendations . Doing this would cost them an amount of the currency but if the recipient consumed the recommendation , the recommender would earn their  virtual money back. If the recipient approved of the recommendation, the recommender would  have their ‘money’ doubled or something.

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It appears that there is no free to use website for gauging the balance of public opinion - good to bad - for a specified keyword or phrase. This keyword could be a product, brand, country, website, whatever. Now I did find that a company called SkyGrid does offer a similar service but it is not free (according to GigaOm it costs about $500 a month) and it appears to be for use with brand/company names only.

It seems to me that there is room for a similar product with wider appeal and which in true web 2.0 fashion would be free to use. It could be ad-supported of course but I would imagine that more a creative business model could be found - for instance a basic service could be offered free and a premium features offered for a fee - richer data for example or analytics.

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I have written here before about evaluating business ideas. Now I don’t know about you but I find that I am continually adjusting and fine-tuning my methods and criteria for assessing mine and other people’s ideas. Recently I read about YouNoodle - a controversial startup that allegedly claims to be able to predict the success or failure of other startups. I say allegedly because following some bad press, the company has come out to clarify its claims. I don’t know about all that but whilst YouNoodle apparently focuses on the founders in making its predictions, I prefer to look at the product itself and the market it aims to serve. So here are some questions I ask myself.

Notes:

Y = Yes; N = No; x = It doesn’t matter; M = Maybe

• Columns 1 to 4 are basically saying that if your idea does not solve a problem (i.e. relieve a pain) worth relieving or if it does not do so better than everyone else, then don’t bother building it. The only exception being when the benefits can be easily explained to consumers and you can easily find and market to your customers without spending tons of money - then it may be worth an experiment.
• Columns 5 to 8 say that even if your product will not be free, as long as you are relieving a real pain and doing so better than anyone else, it is probably worth experimenting with your idea out - but not if it is too difficult and expensive to do so. If on top of this the benefits of your product can be easily explained and you can easily find and cheaply reach your target customers then do definitely go for it.
• The point of columns 9 to 12 is that if you are addressing a real customer pain better than anyone else and doing so for free then there is a really good chance people will flock to you - definitely so if the benefits are easily explained. If you can reach those customers easily and cheaply then you should definitely do it. Of course there must be some other way of making money from your product if you are giving it away for free. Advertising is a popular choice these days but as regular readers may know, I am not too fond of having it as a sole source of revenue.

As always, all the best with your ideas.

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One idea that has bounced in and out of my head for a couple of years now is to give website publishers and bloggers the ability to show in a widget, photos of people mentioned on a web page or blog post. In its simplest form, the widget could have an admin interface that would suggest match words in an article to names in a database of people - Facebook or Wink for example - and display their photos. Since a name could match to several people, the publisher could then pick and choose the actual matches.

In a more sophisticated approach, the widget could be based on some sort of semantic web technology whereby the identities of the people mentioned on a web page are automatically determined and relevant information gathered from various sources about them and displayed alongside their photos in the widget.

When I originally thought of the idea I conceived it as part of a people search engine and that the accuracy of results would somehow be improved by a) the contents of web pages that people are matched to and b) the contexts they are mentioned in. I guess I was thinking about the semantic web even before I was aware of it.

Interestingly and hence me posting about this now, I read today on VentureBeat about Adaptive Blue’s BlueOrganizer. I haven’t looked at the product closely enough yet but what I have read suggests that it could be adapted (pun intended) to provide this people-in-this-article service. It is something that print media have offered for decades - it should be easy for new media to do so too.

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Much is often made of how Google could improve search results (or do a lot of evil) by learning from our search histories. Since there are a lot of valid privacy concerns with that approach, I think Google could still improve results considerably by learning from a user’s result-clicks within a search session.

As an example, I Googled “Roll your own” earlier today, looking for white label web solutions. The results included a lot of “roll your own cigarette”  items. Given that I ignored all of those and instead clicked on the tech-related results, each time I returned to Google using the back button and then moved to the next results page, Google had an opportunity to filter the results on that next page to remove items that I didn’t seem interested in.

I guess the Similar Items feature is meant to do this sort of filtering but for some reason I never remember to use it.

So what do you think - would you find this kind of feature useful?

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Most air travellers travel with hold baggage pieces well within the allowed limits but many others travel with excess baggage - typically on international, long-haul flights. I haven’t done much detailed research on revenues from excess baggage charges but my guess is that they are substantial.

My idea is for a web-based system that allows passengers travelling on the same flight to trade their baggage allowances, particularly where the airline operates a “piece system” for baggage allowance. So assuming each passenger on a flight is allowed two pieces of luggage, if Person A has only one piece and Person B has two then Person A can ’sell’ her unused allowance to Person B. The system sends a file/message to the airline which then imports it into its reservation system, such that Person A’s allowance is reduced by one and Person B’s increased by one. Person B makes a monetary payment for the extra allowance. The payment is likely to be at a discount relative to payments made at the check-in desk. The payment is either shared by Person A and the airline/service provider; or the airline may reward Person A in kind, e.g. with air miles. Pricing may be fixed or be determined by a bidding process. This could be implemented as a stand-alone website serving multiple airlines or may be incorporated into an airline’s website.

What problems would a system like this solve?

• Payments made at check-in desks, for excess baggage charges contribute to check-in delays. Evidence of this can be found in the fact that many of the major airlines now offer passengers the ability to pay online for excess baggage and often offer a discount for doing so, suggesting that it is in the airlines’ interest for such payments to be made in advance.
• Air travel is usually stressful in its own right. For a passenger on the way to the airport, who has excess baggage and is aware of it, the uncertainty about how much of a delay and how much of a charge awaits tend to add to the this stress. Paying for excess baggage in advance makes for one less thing to worry about.
• Excess baggage payments at check-in desks require payment processing that could involve cash or credit card handling. Advance payment reduces the need for such processing and associated issues at the check-in desk.

What advantages does this model have over the current model?
Many airlines now offer passengers the ability to pay online for excess baggage and usually offer a discount for doing so. I call this existing method a “Passenger to Airline” (P2A) model because the passenger simply pays the airline for the privilege of carrying excess baggage. I like to think of my proposed model as a “Passenger to Passenger” (P2P) exchange model, because it involves two passengers exchanging baggage allowances. I think that my P2P model has the following advantages over the P2A model:

• It enables the airlines to reward passengers who travel light, which in turn increases loyalty. It is conceivable that a light traveller might opt to fly with one airline over another because one of them will reward him/her for travelling light.
• Rewarding passengers for travelling light will encourage more passengers to travel light, which presumably is desirable by the airlines.
• It is better than P2A in helping the airlines to predict flight baggage levels, which presumably helps them establish fuel requirements for flights. It is better at this than P2A because not only does the airline know in advance which passengers will travel with excess baggage, it also knows about some passengers who will not use up their baggage allowance.
• In the case where the system is incorporated within an airline’s website, it could attract more passengers to the airline’s website, which enhances the airline’s interaction with its passengers.

I guess the biggest problem for this idea would be getting the airlines to buy into it. My guess is it would take a big player like Sabre to make this sort of idea work, but who knows, a startup with the right connections might just be able to swing it - but would it be worth their while? What do you think?

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A recent post about social objects by Hugh Macleod of The Gaping Void got me thinking about what opportunities might lie in making otherwise solitary online activities into social ones. This led me to think about how a previous idea that I posted could significantly increase the viral coefficient of search.

You may want to check out Hugh’s post for a detailed description of social objects but my take on what they are is that they are objects of common interest to two or more people over a period of time and conversation, however brief. So if you and I strike up a conversation about the weather then the weather, albeit fleetingly, becomes a social object.

For me, there are three primary online activities that we still predominantly engage in by ourselves as opposed to with other people – browsing, searching and shopping. There are probably opportunities in making any of these three activities social – hence the seemingly endless queue of start-ups trying to be the next big thing in social browsing, social searching or social shopping. I will focus on searching however because quite frankly, as demonstrated by Google, hardly anything beats search for generating online ad revenue.

Looking at the various start-ups doing so called social searching, it seems to me that most are trying too hard to make too much of a big deal out of it – focusing on group search, human-powered search etc. I have always felt that after search, Q&A is probably the next best thing for intent-based ad serving. So why not combine the two, allowing users to turn their unresolved search queries into questions for their social network and others outside their networks who have expressed an interest or expertise in that topic or related topics?

The beauty of this marriage for me is that as financially rewarding as search has proved to be, its viral coefficient is zero. Redeye VC defines the viral coefficient of an application or tool as “how many new users get added virally from each additional user”. So the viral coefficient of search is zero because when you do a search on Google say, you typically do so on your own and the ads shown are only seen by you. By combining search and Q&A however, you increase the viral coefficient of a single search by multiples and by so doing also increase the number of people exposed to ads related to that search.

As I have suggested in another post, I think Facebook is in a prime position to implement such a search/Q&A application, in conjunction with Yahoo (through Yahoo Answers perhaps) or either of the other two search giants.

What do you think?

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