NOTE: This is the lead item from the most recent issue of my free e-mail newsletter, A-Clue.Com.
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Who wants to revisit electronic commerce?
God knows I do.
Let’s review our problem set, shall we?
- There’s no valid business model for Web content.
- Every bit on a mobile network is a service, charged for and controlled by the carrier.
How can we take advantage of this?
- Communities can be created free on the Web.
Bits can be sold for money on mobiles. But only the right bits, the ones with the highest value.
Over time, the mobile Internet will become more-and-more like the laptop Internet. But right now the economics are quite different. It’s time to take advantage of this.
No one has yet succeeded in this, but here’s the trick.
- Create a vertical community on the Web, database-driven, filled with interaction, free but requesting PII (personally identifiable information).
- Deliver mobile services aimed at that community, advertised on the Web site (and elsewhere online).
This is not an easy dollar. It takes an immense amount of free content to build a community, along with software that scales this intimacy, that enables people to create their own worlds based on the free content. Only after you’ve engaged in such a world will you gladly pay to put parts of it in your hand.
What you need to do, first, is to gain a solid relationship with
mobile carriers. This is not easy to do. It’s a high hurdle to jump.
It’s a barrier to competition. You need to practically guarantee
volume. That’s the only way to get your costs down to the point where
the mobile business becomes profitable.
It is only after the mobile side becomes profitable, after you’re
the carriers’ "best customer," that this kind of strategy starts to
make sense. And it is in the process of becoming a "best customer" that
most mobiler data companies forget the Web.
What they forget is that the Web is all about interaction. It’s not
about content. It’s about community. It’s about scaling intimacy. It’s
about building databases that move toward one another – registration,
content, traffic – so people get in deep quick and stay deep. That’s
where the loyalty lies, not in what you do for them but what you can
get them to do for one another.
Many of today’s most successful "Web 2.0" (database) sites find it
hard to monetize success. DailyKos barely breaks even. MySpace is not
that wildly profitable. The reason for that is that they don’t cross
over to the mobile world.
You create your own dossier on a Web site, and this should inform
what you pull toward you in the mobile world. The mobile world is
moving quickly in terms of the file sizes it can accommodate, but it is
moving at a snail’s pace when it comes to its business model.
You can take advantage of that. People can self-select those RSS
files and data types they want updated wherever they are, and you then
deliver them. Companies, organizations, and campaigns of all sorts will
pay for your knowledge on building community and making it pay in a
mobile world.
Right now the chief sale is SMS. Simple text files move easily
between carriers. Next comes MMS, combinations of SMS files that can
describe small bits of content (like ringtones). Then comes RSS, mobile
alerts when the specific bits you want to know about update. And
semi-automated services for those sources that don’t support RSS. (Most
news sources don’t support RSS.)
Building communities using the Web defines audiences that will buy
mobile content. You have to live in both worlds to satisfy this demand.
Like I said, this is not an easy dollar. You have to build separate
teams, then integrate them. But if you wait for the mobile world to
look just like the Internet before you move, you’re going to be crushed
by the people who have been brought up in both worlds.
Integration, in this case, means integrating the mobile world of the
future with the Web world of today, and finding ways to profit from the
specific characteristics of both.
