Category Archives: Strategy

Usage Caps: Hidden and Invisible

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I’ve been thinking about it, usage caps make sense, but the implementations that providers are offering don’t, with these arbitrary usage caps, that are mostly hidden. There is already a theoretical cap, that for all current intents and purposes seems invisible. That theoretical cap exists do to the maximum bandwidth that the provider supplies you with.

Let us look at some of those numbers. I’ll start with a simple example for a 1Mb/s connection and assume that this contains both up/down streams.

1Mb/s connection = 1/8th of a MB/s ;

MB/30 day month = 60s*60m*(24h/8)*30d = 324000 MB/month = ~325GB/month.

That’s the invisible bound on a 1Mb/s connection for 30 days, you can’t achieve greater than ~325GB/month. Then you have to factor in decay caused by latency and dropped packets on the line and assume maybe 90% capacity is possible, which brings you further down to ~290GB, realistically.

Taking that information, I think I would start people off with a percentage based amount of their bandwidth. I’d start off with a provision of a 40% utilization(~130GB/month), and allow it to be increased/decreased. It’s entirely possible that this is too high of a utilization offering to start with; for example,  when you get to 5Mb/s lines that same 40% is ~650GB/month. On the other hand, some companies want to cap it at 250GB/month which is less than 20% utilization of a 5Mb/s connection. It is my belief that they need to scale their utilization cap with their speed offering; to me, it doesn’t make any sense, otherwise.

If I can do this math, I’m sure they can and have done it as well. They already know what they are theoretically being asked to provide at peak times, and also what they’re capable of handling. How hard would it be for them to optimize this, and increase their efficiency?

Maybe offer a 10% utilization at 1Mb/s(~32GB) as a baseline, for those like RMS who don’t use the web with the exception of email? Then they can automatically roll you into the next 10% for the month, if you go over that limit. You automatically get rolled up 5 or 10%, at some percentage of cost. Once you have the roll over and initial utilization provisions determined, you can go about extrapolating and targeting different areas of what you provide.

Lets assume that you start with a base fee of maybe $10 + taxes and then a rate for bandwidth/speed similar to this:

For a 1Mb/s  plan: 32GB(10%) @ $10, 64GB(20%) @ $12, 96GB(30%) @ $14, and 128GB(40%) @ $16.

For a 2Mb/s plan: 64GB(10%) @ $15, 128GB(20%) @ $18, 192GB(30%) @ $21, and 256GB(40%) @ $24.

For a 4Mb/s plan: 128GB(10%) @ $25, 256GB(20%) @ $30, 372GB(30%) @ $35, and 512GB(40%) @ $40.

You can extrapolate further.

Maybe my scaling is a little off, a little too linear, as I’m not really accounting too much for trying to limit peak loads. Also I’m starting each tier at roughly the cost of the tier below at 35% utilization. There are lots of inefficiency in my model, but that’s because I don’t have the actual data required to see if this is feasible. I think it is still better than their blind caps that they try to hide.

If you have any thoughts or suggestions on how this could be done, or if it’s feasible, leave a comment.

Ideas For Making Color More Vibrant

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Disclaimer: I haven’t tried Color, and am decidedly against mobile in my personal life. This is my analysis, having only watched an overview and read several of the articles.

The recent hubbub about Color, by Scoble and the other’s, discussing the poor first experience and “Bubble Welcomes Color”, is partially on the mark, is also partially off. I won’t deny that the execution and even idea may have been weak, but I think it was mainly a chicken/egg problem. They also walked into a problem with the buzz around their funding, it being so abnormal they had mass’s attention, to the point of possibly being a detriment. For both of these negatives, they have some very intriguing aspects, some that will certainly be surfacing in other products, over the next few months – years.

In today’s world, with several large pre-built social networks, it is extremely possible to piggy back, at first. to build your market usage to help reduce the chicken/egg issues.  As far as I can tell, they did nothing to  mitigate the chicken/egg issue, and may have actually made it more prominent with their decisions to only offer the sharing in  a small area and time period. Those two features, are great in an active environment, but in this one, that is new and empty, it provides a negative experience lacking true interaction. Why would anyone want to use it if there is very low level of interaction?

The funding news helped to promote Color to a larger audience, because of the discussion that was caused by the abnormally high investment of $41 million. $41 million for a company that was on the dawn of releasing it’s first public product. Assuredly absurd, or is there something there that everyone was missing; there are varying opinions on this. In light of the bubble speculations, of the past few months, many are leaning toward the absurd, and point back at Color as evidence that there truly is a bubble. The extra attention, which was exposed to the poor interaction, and the negative connotations of the bubble, are overshadowing what could be a great product.

The public introduction to implicit networks, even as an idea represented in the video demo for the product, is what I find most interesting about the service. The use of creating one based on vicinity to other users is brilliant, if they had an active user base, of course. The whole idea that you can interact with strangers to embrace the moment, is the key to the idea of “you had to be there,” and makes it easier to create real-world memes. I can definitely seeing this being an amazingly fun experience, in sharing and creating images/videos  with strangers, it could generate games like ‘I Spy’ on the fly. There is something to this product, and I’m a little worried that it will be missed, because of the previous reactions.

I’ve said a few times over the past week, “If Color was a Twitter Client, then it would have been really impressive. Images, not so much,” and even joked that it was Twitter’s new anti-client stance that ruined the app. I might take back my comment about images, now, as I think it is a good fit, but maybe not for the introduction. In my opinion, it may have been more useful if it was a fully, or mostly, functional client for Facebook or Twitter, and provided the feature of sharing posts made through Color, with others in the vicinity, as is present in the current version. A decent client, with this bonus functionality, in my opinion would have been amazing, because it lets you engage those directly around you, when you want, and could create a virtual icebreaker. The major benefit of a client would have been, that the app is usable even when nobody else is nearby.

They could also widen the vicinity, 150 feet seems like a very small area and would probably be better suited to 300-450 feet, so that there is a little bit of room to play with it. If they widened the vicinity, it could also open up the service to a nice little  promotion network, with ideas for people to get together and do. I think this may be their biggest issue currently, the area just sounds too small to be effective; they need to open it up.

Overall, they made plenty of mistakes out of the gate, but I think they are definitely in redeemable territory, particularly with the numbers in the bank. What they can do immediately is expand the  vicinity, add some other types of media (besides just images and comments on them), and create some sort of larger interaction outside of the small ‘global’ area. Right now, it’s all about creating some active audience, so they should focus on specific areas to promote it, as Scoble mentioned about focusing on SF and NYC, and some introductory use cases, such as games like ‘I Spy.’ Ultimately, I do see Color as a company that will succeed, even with their current stumbles, but they do need to pick it up and start running with something that will boost interaction. It’s all about interaction and engagement.

I wish them the best of luck.

What Made Facebook Special

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Why did people join Facebook; what made it special?* This is a though I have so often, it’s become funny, but my answer has never been precise enough, “critical mass.”

Critical mass doesn’t tell you anything, except that they manage to get enough people to use it, and as more did, it became almost invaluable to the rest. The problem with such a simple, and ignorant response is that doesn’t really help to understand how they generated that critical response anyways. That’s the real question that needs to be answered.

We all know about FaceMash, and the exclusivity presented by the college email restrictions in the beginnings. I think through every phase of the company it has held momentum by voluntarily limiting growth, and strategically raising the level of suspense, and necessity via critical mass in various markets.

One quote paraphrased as I remember, “When we went to add Baylor, they wouldn’t allow us on campus, so we went to all of the surrounding schools, and added them to the network. In effect, we built the demand within Baylor by adding most of their friends from other schools to the network, and then expanded to Baylor.” [Editorial Remark: It was from The Facebook Effect. The paragraph was about the “surround strategy.” Also, I originally thought it was BYU, and not Baylor.

I find that brilliant, they built demand in the market, before releasing in the market. The same can be said of Mark’s original FaceMash, which provided him with enough notoriety and acknowledgment within Harvard to release Facebook, as well as providing access to a tool that helped to keep up with your friends.

The whole reason I brought this up is I started thinking about how my friend made me create a new account** when I got to WVU, ‘because everyone uses it.’ I find it interesting that it had created such a critical mass at that point in schools, and it seems to have managed to maintain critical mass among it’s markets this whole time, I find it simply amazing.

Notes:

* = More general “Why did/do people use/join/verb X Company?” I ask these type of questions all the time.

** = I had one for a week or two in HS, because I got tired of fighting the school admins with proxies to get to myspace, and couldn’t remember how to access it.

(Original written January 29th, 2011)(Last Edited March, 17th 2011)

I Can’t Say I Can’t, But I Could If…

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With the beginning of a new year, I plan on taking several realizations and things I discovered momentarily, last year, and try to make them permanent. The first is to stop saying, “I/it can’t…,” with the exception of when used in conjunction with, “… but I could if.” The second is, “third-person introspective.”

Some time in September or October, I had an epiphany of how harmful, “I can’t,” is; it allows for excuses to be provided so easily. It allows you to just shuck your responsibility, without fully thinking through the problem, or trying to find another way around the problem. My solution is to only allow myself to say the phrase, “I/It can’t X, but I/it could if x.” It is a simple method, that can be used recursively, to find the starting point, if you can’t do x, then substitute it for X and start again. Ultimately, I feel that it is a great way of breaking a problem down, and avoiding excuses.

Third-person introspective, now this idea is a little less approachable, but personally more fun. I allow myself to escape, and critique myself on all of the actions I make as though I had someone following me around, looking over my shoulder. I tried this for about a week, and while it’s odd at first, it has some pretty interesting results,  you self-inhibit as though you weren’t alone, even if you are. The one issue that I had with it is that you have to be able to maintain two-levels of consciousness simultaneously, which can be difficult, particularly when you’re tired. I assume once one becomes adjusted to it, the second consciousness could become controlled subconsciously.

I’m hoping that implementing both of these, along with my recent purging of  stuff that was weighing on my mind will help me be more active, and engaged in the now. I still have a couple more things to get out of there, but for the most part, I’ve put everything I want behind me, and I’m starting to truly move forward for the first time in two or three years. Hope your year is going to be as wonderful as mine.

Budgeting on Variable Income

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The three main things that need to be taken into account are:

  • Definite Expenses
  • Estimated Income
  • Savings required to cover deficiencies between Income & Expense

Defining Expenses

  • Write down all non-variable monthly expenses (e.g. Rent, Utilities, Insurance, etc.)
  • Estimate all recurring variable expenses for the month(e.g Food, Fuel, etc.)

Add these together and multiply them by 1.10 -1.20 to provide yourself with a buffer  in case of any upward fluctuations of variable expenditures. Excess at the month should be saved  or split between discretionary spending and savings, with only 10-20% going to discretionary, at most, the remaining 80-90% saved.

Estimating Income

  • Average your past 6-12 months of income. Avg. Inc. = (Total income/months)
  • If possible also average your highest and lowest monthly levels of income. H&L = ([Highest + Lowest]/2)
  • Average both of these numbers to come up with a good estimate of your monthly income. Est. Inc. = ([Avg. Inc. + H&L]/2)

* You can also add in quarterly averages, if you’ve seen a recent change in your income up or down, such as change in employment status.

Savings

Take 10-15% of your estimated income and try to save it, and any excess after your budgeted expense, for handling monthly deficiencies. You can use a portion of this as discretionary spending, or rainy day fund, to help maintain your personal happiness. Also, set a baseline for a buffer in your bank account, which you can check against, say $200 dollars, and you can raise this as you progress.

*You don’t have to place it in a savings account, the interest rates are horrible currently anyways, just so long as you try not to overuse these funds.

These techniques aren’t perfect, but they do provide a very good starting line for determining how much you can reasonably spend per month. I used these basic ideas as a set of tools, slightly modified for my personal usage, and managed to pay off $1800 in student loans and save ~$1200 on a variable income that ranged between $500-1400 over 13 months. My average monthly expenses were $400 and my average monthly income was $750. I also managed to maintain a fairly consistent spending, about $50 month, on entertainment.