In my first semester at Manage&More (a support programme for young entrepreneurs from the UnternehmerTUM GmbH; see list of our partners) I participated in an innovation project at IDEO. IDEO is a famous design company – see Wikipedia for a detailed description. They were involved in the development of the first mouse (from Apple) and also helped dozens of other nameable companies like Microsoft or Pepsi to innovate new products and services or to significantly improve their products and services. We (twenty creative students) did a project for a well-known chemical company and it was an exciting project. I’m sorry, I can not tell you more about our project and its outcome – we signed a NDA. But I can tell you, we learned a lot, what helps us now to generate rapidly insights on a certain topic, to produce unexpected ideas from these insights and to finally build a consistent concept from the ideas.

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What have AIDS, the society, the human brain, the biochemical network of any living being and the Internet in common? They all rely on scale-free networks. Scale-free networks are a special kind of network where some nodes have a high degree of connectivity, so called hubs, and most nodes have only a few connections. The distribution of the connectivity degree follows a power law. Scale-free networks are typically formed by a process called preferential attachment: new nodes connect to those nodes that already have a high number of neighbors. This makes sense e.g. on the Internet: you link to web pages that are already popular. The first who studied the structure of the Internet were Albert-Laszlo Barabasi and his colleagues. He published a fascinating book about his discoveries and analysis: Linked.

So why should you read this book? Because social networks are scale-free networks, of course! People tend to form relationships to people who already have many friends and so seem to be attractive.

Have a good time!

We thought about how to visualize the dependency of people, content and services to form a successful (= attractive and adhesive) website. Here is our picture:

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Another buzz word, of course ;) Let me first say this: in the pre-home-entertainment-era entertainment always was social. You played board games, together – in Germany board games are called “Gesellschaftsspiele” and the meaning is games for a party; you went together to the theatre; you enjoyed sports together. Then came the radio, the television and the personal computer. People stayed at home and listened, watched or played with their own. Then came the Internet (okey, I’m shortening here a little bit) and some people started playing against each other online, mainly computer games and Poker. Finally, the Wii came and people started to organize wiivents, evenings with their friends to play Wii together. These people were not only gamers, these were normal people, like you, like everybody. The Wii is so popular, because it supports social gaming.

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I have relocated two weeks ago:
Bigger map

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Yesterday, I had a nice evening at the Munich Online Network, which took place at the Pschorr. Drank some beer (or more) and met other founders. Most companies I’ve met are building special interest communities (people aggregators) or creating portals (content aggregators). Their primary income source is advertising.

Whats your [favorite] place?

I also met Tobias from WhatsYourPlace.de. You may know him from his comments on the posting “Virtual Goods Market Size”. Their income comes from selling real land, especially famous places like a soccer arena, virtually to people, i.e. soccer fans, for real money! So you can buy the arena of your favorite sports team and present yourself as the (virtual) owner of the place:

(click here and read more…)

The majority of web applications are implemented using dynamic languages like PHP, because these languages are fast, not fast at runtime, but fast during development. Time-to-market is important for web start-ups, because:

The early bird catches the worm.

The start-up is the bird and worm means user. As first mover you can accumulate users, users that probably stay on your website and don’t leave it for a copycat!

The negative side of this strategy comes into play when the platform evolves: the requirements changes or new issues come up and you have to extend your website with new features. Time is still an important factor, because your competitors are not sleeping. However, development time is not anymore determined by the language, because you don’t write much new code, but it is influenced mainly by the existing code, because you must alter or extend it.

The good news: when your company enters this stage, you already have sold it or at least you should it ;) Companies which bought an Internet start-up will sooner or later recognize that they bought not only a website with millions of users and a brand, but also a bunch of code. This code is an important asset for the company! It determines its future.

The bad news: VC companies are going to take a deeper look into the code in the near future. However, it is very time consuming to evaluate code and so some investors will rely on their experiences. If their experiences tell them that those applications which had problems with stability were written for example in PHP they will avoid investments in those start-ups which use PHP!

Don’t get me wrong: I’m not saying that every PHP application is bad or with PHP you can only write bad applications, but it is easier to write bad applications in a dynamic language than in a non-dynamic language. In a non-dynamic language you have to make everything explicit. This forces you to think about every decision you make at least twice: when you write it and when you read what you’ve written.

There is also a psychological factor: most web applications are written in dynamic languages and many start-ups don’t have experienced programmers, but are pressed for time. So a lot of these applications are instable and so the impression will be: PHP is bad. Of course, this is a misimpression, but nevertheless an impression an investor might get.

Use your favorite programming language, write clean code and have a good time!

PS: This reminds me of Thailand and the sign of the left side. Does anybody know whether there is a similar sign for web applications: “clean code, good experience”?

 

This question comes from my favorite movie WarGames. It’s about an artificial intelligence called WOPR, which is hacked by Matthew Broderick. The computer is trained to fight the World War III and loves to play Tic Tac Toe (btw: my first computer program, written in Pascal, was Tic Tac Toe; not so easy as you might think). However, the computer can not distinguish between game and reality and so it is beginning to launch the nuclear weapons …

There are four insights I’ve learned from this movie:

1. Arthur Rubinstein makes remarkable movie soundtracks.
2. The most used password of this time was “Joshua”, because everybody watched the movie and thought, this a cool password to remember (btw: there have been several famous hacks, where hackers used this password, so don’t use it!)
3. With the right strategy on both sides no one can win Tic Tac Toe, or a nuclear war!
4. Playing games makes you smart!

You don’t believe #4? This insight isn’t new – or take for example this famous book:

Johnson, Steven [2005]. Everything Bad is Good for You. Riverhead. ISBN 978-1594481949.

However, the debate is still actual as more and more people spend their time playing games. The good news: computer games becoming more and more social games. In the old times of video games people play alone against the computer. Thanks to multiplayer consoles like the Wii (a lot of friends of mine arrange regular Wii parties) and multiplayer online games like World of Warcraft people play together and not only learn strategic thinking or train their reactions, but also gain social intelligence while playing together.

The next step will be to use online gaming for dating. Think about how you made your first friends in live! Probably by asking: “Do you want to play?”

So play games and have a good time!

A 32 year old MySpace user said this about the ads on his favourite social network. He is not alone according to BusinessWeek and also MySpace is not the only social network whose growth is slowing and whose users are spending in average less time on their networks. The slowing in growth was to be expected, because there are already a lot of people who have an account at MySpace, Facebook & Co.

The decrease in user time and in click rates, however, is critical to the business model of most social networks, which is based mainly on advertising. The reasons for the decrease are:

• The laggards spend in average less time on social networks and so the overall average time decreases.
• The early adopter, which spend a lot of time with MySpace, Facebook & Co. are probably leaving as these networks become mainstream.
• The user are annoyed by the ads and so are moving to new sites, which don’t place ads on their pages, yet.
• The attention of the users stays the same, but the number of ads per user increases and so the average click decreases.

If the incomes from advertising decreases in the nearby future, companies will seek for alternatives, like Facebook, which sold in ten month 24 million virtual gifts (costs: 1 $ per gift). That’s why paid content is back.

Nevertheless, have a good time with your social network – online and offline.

We’ve interviewed a lot of people, especially people IDEO calls user experts, that is extreme users. When you look at the typical bell-shaped curve (e.g. how much people spend online against the number of persons who spend this money online) these are the people at the left or right end. The people in the middle, the majority, are the average customers. From those people you don’t get any insight in why people pay for online content. So we talked to people who spend a lot of money (30 – 70 $ a month), e.g. in Second Life.

Our insights: people pay for online content for different reasons:

1. They are addicted to a certain brand, e.g. Harry Potter. As a fan of Harry they love to spend money for Harry Potter related content because the buying is a special event for them. So they pay once and profit twice: from the buying event and from the content itself.
2. Convenience and safety. You can get any content on the Internet for free as long as you have enough time to search for. However, many people have money, but no time. They pay for content incase the convenience benefit is high enough. It’s all about service! Take iTunes for example. Buy online, connect your Mp3 player and play your favorite music on your way to work. The illegal way would be: search the P2P networks, download one or more different versions of a song, select the best copy, connect your player, copy it to your player and then play it. And even if you have the time to do so, you will have this bad feeling that the music industry catch and sue you.
3. People want to show what they have! This is the most important aspect. You exhibit your commercial CDs in your living room. The ones you copied you store in your working room. People identify and present themselves via the things they own and bought. The price reflects not only the social status, but also how much the product is worth to the buyer and so it says a lot about the person who bought it. For example, I spend most of my money on textbooks. So people who visit me (or my profile on Facebook thanks to the Visual Bookshelf), know that my interests are philosophy and science.

Do you think there are other reasons, too? Please tell us. And have a good time!