Pay for a Service? How Radical

By Mark Evans in Web 2.0 10 Comments

Dollar
Given the current economic landscape, there are plenty of “Web 2.0″ companies struggling to stick around. Many of them are slashing costs in an effort to make their financing last as long as possible.

Many of these companies have business models built on the premise of offering a free service, and generating revenue from advertising. If you have a compelling service, this model can work but these companies are increasingly vulnerable given that online advertising growth has stalled, and that advertisers are probably looking to be more conservative.

The “free” business model has captured most of the attention and encouraged the emergence of thousands of start-ups. It’s been great for consumers and beta junkies but it is proving to be a difficult model to create a sustainable business for most companies trying to use it.

Over the next little while, many of these free businesses are likely going to disappear when their financing disappears and they are unable to generate enough advertising revenue.

This will not necessarily be a bad thing given it will cleanse the ecosystem, and give healthier companies a better shot at success. This “process” happened during the last dot-com boom, and set the stage for the emergence of Web 2.0.

Seemingly lost amid the fascination with the free business model is how some businesses (Freshbooks, Agroracom, 37Signals, LinkedIn) have thrived by actually charging customers to use their service.

It’s been a somewhat of a radical concept – actually getting people to pay for something – but you’d be surprised by how many people are willing to pay for a valuable, useful service.

What’s somewhat surprising is how little attention these sales-driven companies seem to receive, especially compared with the enthusiastic coverage of new start-ups using a free business model that are trying to grab a foothold in competitive markets.

For some impassioned thoughts on the Web 2.0 business model landscape, check out Agoracom’s George Tsiolis. As well, Fortune magazine recently had an article on the end of Web 2.0, and the emergence of Web 3.0.

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mesh keynotes!

By Mark Evans in Web 2.0 No Comments

mesh
It’s hard to believe mesh is only three months away – April 7/8 to be exact. We’re really excited to announce two of our keynotes: serial entrepreneur and Mahalo.com founder Jason Calacanis will deliver our business keynote, while Jessica Jackley Flannery, who co-founded Kiva.org, an innovative micro-lending service, will be giving our society keynote.

It goes without saying that we’re thrilled to have Jason and Jessica at mesh. The keynotes play a key role in setting the tone for mesh so having two thought leaders and innovators such as Jason and Jessica is exciting news.

There’s a lot happening behind the scenes as we prepare mesh ’09 and meshU. The mesh gang is meeting again on a regular basis to brainstorm about programming so expect more news about keynotes, panelists and speakers in the weeks to come.

I would be remiss if I failed to mention that mesh and meshU tickets are on sale now.

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The Start of a New Adventure

By Mark Evans in Main Page 13 Comments

ME Consulting
It’s difficult to believe it has only been a month since I parted ways with PlanetEye. Over the holidays, I had plenty of time to think about my next move, and get advice from a wide variety of people.

After much thought, lots of great conversations and far too much coffee consumption, I’m excited to unveil the official launch of ME Consulting, which will provide companies with strategic and tactical services about marketing, communications and social media.

While we’re certainly living through interesting economic times, I’m confident there are companies that would benefit from my expertise to enhance their brands and drive sales.

My approach is both strategic and tactical. With 10 years of experience as a technology reporter, three online starts-ups under my belt, and a passion for the Web and the ever-growing number of tools, I can offer companies insight into what’s going on and what they should be doing, and the ability to help them implement and execute on their marketing, communications and social media strategies.

I’m already working with several really interesting clients, which has convinced me this leap into the entrepreneurial world is the right thing at the right time. As well, I’ll be spending more time working on growing and expanding mesh.

If you want to touch base about what I’m doing, I can be reached at mark@markevans.ca. You can learn more about ME Consulting by visiting my new Web site.

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Are Cell Phones a Right?

By Mark Evans in Wireless 5 Comments

Are cell phones a right or a privilege?

An article in yesterday’s Toronto Star puts the spotlight on the question of whether people who can’t afford a wireless device should have one as a basic service.

The pro-argument is people in a lower social-economic group should have a wireless device so they have the ability to communicate and be economically engaged.

“A telephone service, just in general, is not a privilege, it’s a right, and we fell it’s a corporate responsibility to provide it,” said Jose Fuentes, director of government relations with TracFone, which is the driving force behind the SafeLink program that eligible people with a free cell phone and 68 minutes a month of free service.

I find it hard to buy into the idea that wireless service is something that every citizen should have. I’m not trying to be cold-hearted but shouldn’t health-care, food and basic housing be higher priorities.

If anything, there should be free basic telephone service (wireline) to people who can’t afford home or wireless service. This free service should come with voice-mail so people can retrieve messages. You could make the same argument for Internet access. There’s no doubt there should be places where people can go online at no cost but free residential service doesn’t have to happen.

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Alek Krstajic Rides High Again

By Mark Evans in Wireless No Comments

Canada’s wireless industry is a cozy club with one of the highest ARPU rates (aka how much consumers cough up each month) among the world’s leading industrial countries.

Over the past few years, it has meant juicy profits for Canada’s three largest carriers – Rogers, Telus and Bell. In particular, Rogers has been humming along with its GSM network, which has given its first dibs on new products such as the iPhone, as well as lucrative profits from roaming fees.

Alek Krstajic is looking to crash this wireless party with a new low-cost wireless service that will be launched in the third-quarter in Ontario and Quebec. It will be a no-frills, flat-rate for people just looking for basic wireless service. The target audience is the roughly 25% of the population that doesn’t use a wireless phone yet, as well as people looking for cheaper service.

Krstajic can talk the talk with anyone within the telecom industry but it’s more than apparent that BMV is going to walk the walk with a solid group of investors, including a recent agreement from OMERS Private Equity to invest as much as $50-million. The deal is a feather in BMV’s cap given the current economic landscape and the fact this is OMERS first direct investment in the wireless sector.
Despite the fact Rogers, Bell and Telus have been rolling out low-cost plans recently, Krstajic is confident there’s plenty of room for BMV to carve out a viable niche. He believes what Rogers, Bell and Telus are trying to do with their no-cost plans is keep their existing customers from abandoning ship by giving the a place to go.

BMV, on the other hand, at the lower end of the market where he doesn’t think Rogers, Bell and Telus can or want to compete.

“I don’t think we will get squeezed. We have created a cost structure that can’t be matched by the incumbents, and they know that. As long as a disruptive player are build on a lower cost structure, it will succeed.”

OMERS has 50 million reasons to believe Krstajic is right.

More: Here’s an interview I did with Krstajic a few months ago about BMV.

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Minor Miracle: I’m Buying Music Again

By Mark Evans in Apple/iPod, Music 3 Comments

Rich Terfry
It has been years since I bought a music CD. And although iTunes has made it a breeze to purchase music online, I can’t really claim I’ve jumped on the digital bandwagon…until now.

What has turned me into a music consumer again is Rich Terfry (aka Buck 65), who hosts the afternoon drive show on CBC Radio 2. As a musician with a deep and wonderful knowledge of artists and a variety of musical genre, Terfry puts on a show with excellent music, featuring artists that otherwise wouldn’t be exposed on the national stage.

It may be that Terfry’s musical taste match my own or that he’s simply highlighting great music but I’ve found myself over the past few weeks listening to a song, and then flipping over to iTunes to buy it. I haven’t purchased a huge amount of music but the fact I’m buying music again is significant given I’ve been a non-consumer recently.

The question is why Terfry’s show has inspired the consumer in me when there are services around like Pandora and Jango. I guess it comes down to being able to trust/believe the recommendations you’re given.

Given Terfry’s background, I have faith in his selections whereas Jango is using some kind of algorithm to generate playlists. It’s not that Jango’s technology isn’t great but there’s something to be said for personal recommendations.

More: Speaking of iTunes, the New York Times reports that Apple will remove anti-copying restrictions on all songs within iTunes. That’s a huge move given iTunes has been a walled garden with hard-core DRM technology. Apple also said it will let music labels set a range of prices for songs, which means the 99 cents/song standard will disappear.

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