A “Mash-Up” as a Business Model

The term “mash-up” is most commonly used in the context of web development. It happens when content from more than one source is used (via an open API) to create a single new service that shows information in a new way. Mapdango, is a good example in which Official National Park Service (NPS) maps are overlaid on Google Maps.

A “mash-up” can also describe a business model that mashes-up digital / web based content or services with the analog world. There are two smart start ups using this approach to meet some very basic needs: food and shelter.

The food example, “Mary’s Secret Ingredients,” started with a simple love for food and cooking by Mary Pisarkiewicz. She is a St. Louis native who was trained at Parsons The New School for Design and has owned a highly successful marketing and design boutique in NYC for many years.

However cooking is her true passion. A couple of years ago, when she wanted to publish a cookbook, publishing experts told her she did not have any credibility in the food / cooking world. She responded by starting: “Love- The Secret Ingredient” blog. Three years later it now has 29K+ followers.  

Her blog features engaging stories of love, joy, comfort and friendship interspersed with proven, scrumptious, healthy recipes. Mary confides the "secret ingredient" for all this wonderful food is love.

Mary's Secret Ingredients Gift Box.

She then developed the idea for creating a sampling / surprise subscription gift box as way to share the special natural ingredients she uses with fellow food lovers – and in the process a mash-up business was born. 

Mary’s Secret Ingredients (MSI) is a limited edition culinary surprise box containing unique gourmet and artisanal ingredients, along with innovative small kitchen products. Every season, a limited number of themed boxes are filled with surprises to inspire cooking, delivered right to the subscriber’s door. 

One of her most popular creations is Bruce Cost Ginger Ale Spice Cake made with Bruce Cost ginger ale – created in Brooklyn,  with real fresh ginger and pure cane sugar, was part of the Summer MSI 2014 gift box.

The blog’s engagement numbers really tell the story in terms of a low “bounce rate,” tens of thousands page views, numerous comments, and social media “likes” on Facebook and loads of Twitter impressions. Some fans have even taken to making original streamed video reviews of her surprise gift boxes.

MSI is being marketed with a “growth hacker” approach that will use creativity, analytical thinking, and social metrics to sell products and gain exposure. The MSI team is in the process of delivering an optimized mix of owned, earned and paid media to build sales volume. 

Mary, who is in the process of seeking an initial round of seed funding for early 2015, envisions a digital marketplace and a mobile app that will connect the recipes to the marketplace, along with streamed web content. She would also like to see a line of MSI cookware and a Mary’s Marketplace (in brick and mortar) akin to famed NYC venues like Chelsea Market or Eataly. 

If Mary’s business acumen is like her cooking skills, she is sure to have a recipe for success. 

The shelter example is NYC-based Zenly, co-founded by Isaac Palka and Omer Palka. Zenly is the first online apartment rental marketplace that lets people browse various Manhattan venues with video tours and rent online without a broker.

Before Zenly, a typical Manhattan apartment hunter poured over Craig’s List then made numerous calls often in search of elusive apartments. The alternative was to run around town with a residential real estate broker. With rental apartment vacancy rates now hovering at near all-time lows, the whole process is considered a real nightmare.

For the first time ever, Zenly’s innovative web-based business allows people to see what apartments actually look like without having to run all over town.

Zenly's online apartment listing: An end-to-end solution.

Zenly offers an end-to-end solution, from viewing properties online to scheduling visits to the apartments without a broker, to an online application process on a secure web-based platform. The business offers to greatly reduce the stress normally involved with the apartment search process, making it more “Zen” as it helps drop illusions and allows things to be seen without distortion.

Zenly also employs a pricing model that makes this business quite attractive to prospective customers. The Zenly “no-broker” model charges a 5% fee only one third of the15% traditional Manhattan broker’s fee. 

Underpinning the Zenly brand is a genuine “trust factor” as their listings come directly from property managers, and then Zenly sends “apartment verifiers” out to every listing to review the listing for accuracy and create video tours. Brokers cannot list on Zenly, and listings are not aggregated from other websites. 

I suspect that Zenly may get a call from Douglas Elliman Realty in NYC early in the new year with a big fat acquisition offer. Elliman will likely make this move to simply shut down Zenly, as a defensive measure to protect their massive broker sales force. 

Should we Fear or Embrace Artificial Intelligence?

Elon Musk, the mind behind Tesla Motors, CEO of Space X and a co-founder of Pay Pal generated lots of news starting last August from his comments on Artificial Intelligence, including a comparison to nuclear weapons. 

 

In October the billionaire tech guru warned an MIT audience, "With artificial intelligence we are summoning the demon" He went on to say, "In all those stories where there's the guy with the pentagram and the holy water, it's like yeah he's sure he can control the demon. Didn't work out…"

Adario Strange from Mashable wrote a sensible follow-up article to Musk’s comments that takes into account the perspectives of other leaders in the AI field, and at a recent BlueWater Labs NYC meet-up he declared: “Musk may have ready too much science fiction…”

AI has not escaped the attention of many tech giants with deep pockets. Google paid $ 400 million last January for a British start-up Deep Mind. Indeed, its stated mission is simple if not ambitious: Solve Intelligence. The new company combines the best techniques from machine learning and systems neuroscience to build powerful, general-purpose learning algorithms.

The MIT Technology Review reported that Deep Mind has unveiled a prototype computer that mimics some of the properties of the human brain’s short-term working memory. This apparently solves one of the great challenges of neuroscience to replicate the same kind of memory in silico.


The Deep Mind computer is a type of “neural network” that has been adapted to work with an external memory. The result is a computer that learns as it stores memories which can later be retrieved to perform logical tasks beyond those it has been trained to do. Wow.

The future of the mundane work commute?

Yet there is still confusion about the basic definition of AI. Some think of AI as a machine that learns a specific algorithm, while others talk about autonomous robots or self-driving cars.

The AI discussion has in fact created a whole new vocabulary unto itself. Last month Vanity Fair took on the AI debate in their article entitled “Enthusiasts and Skeptics DebateArtificial Intelligence.” Topics included the evolution from “soft” to “hard” AI, and the debate around “Singularity” - defined as, "A technological singularity is a predicted point in the development of a civilization at which technological progress accelerates beyond the ability of present-day humans to fully comprehend or predict."

An argument has come up between the "Singularitarians" versus their skeptics about the moment when machine intelligence will surpass the human kind. This fascinating, if not somewhat ethereal debate is raging among the "digerati" - the elite of the computer industry and online communities.


The Maginot Line for this inflection point between the opposing camps is simple: A computer will be able to pass for human by 2030. The test for this is known as the “Turing Test” in which an average human interrogator will not have more than a 70% chance of distinguishing a computer from a human after five minutes of questioning. A partial threshold was passed last summer at the Royal Society in London when a computer fooled 10 of 30 judges, or 33%.

Hans Moravec and robots.

But let’s take a moment for a reality check. One of the major stumbling blocks for AI research is called “Moravec’s Paradox,” which says things that are easy for people to do are extremely difficult for computers to do. 

As Moravec observed: "It is comparatively easy to make computers exhibit adult level performance on intelligence tests or playing checkers, and difficult or impossible to give them the skills of a one-year-old when it comes to perception and mobility."

This problem does not appear to be deterring the likes of Apple (with Siri) or IBM’s billion-dollar investment in Watson – its cognitive computing platform that uses natural language processing and analytics. Watson processes information akin to how people think, representing a major shift in an organization’s ability to quickly analyze, understand and respond to Big Data. Watson’s ability to answer complex questions posed in natural language with speed, accuracy and confidence is transforming decision-making across a variety of industries.

Frankly I like the pragmatic approach to employing AI that one well-known company is taking: Amazon is currently unleashing a robot army to speed holiday package sorting in their million-square foot order fulfillment center in Tracy, CA. 

"Whether it's consumables or toys or electronics, with 3,500,000 items plus in this building, the odds are, pretty much anything you wanted was likely here," says Dave Clark, Amazon's Senior Vice President of worldwide operations and customer service.

Kiva robots at work at Amazon facility in Tracy, CA.

 At most warehouses, goods are stored on shelves, and it's up to humans to out stock or retrieve stuff. But with the technology that Amazon acquired when it purchased Kiva Systems in March 2012, the goods come to the humans. Orange robots the shape and size of ottomans zip to the shelves, lift up the desired goods and whisk them to stations where workers complete the packing process.

With this system, not only is there no need for warehouse workers to march for miles up and down the aisles collecting orders, there is no need for aisles at all. This means Amazon can squeeze 50% more product into its already massive warehouse.

I am not quite ready to sleep with lights on in fear of Skynet - the self aware evil intelligence system featured in the Terminator franchise. It served as the series main antagonist and succeeded in scaring the daylights out of me starting back in the mid 1980s. 

Wonder about their IPO valuation?

But I do plan to give the whole matter of AI further investigation, all the while hoping that Amazon promptly processes my last minute holiday gift purchases this year, as I will surely wait until December 23rd to place my orders.







 

How the Internet of Things will evolve business models.

At a recent Hardwired NYC meet-up, Tim Chang a partner at Silicon Valley venture capital firm Mayfield, shared where he sees opportunity in the emerging tech company sector: The Device-as-Service business model.

Tim observed “Assume everything in your life will become cloud connected, the nest-tification of things in your life, like night lights and thermostats.” He continued “There will be beautiful, smarter versions of existing devices that will be connected to the cloud, with services so compelling people will be willing to subscribe just to access them, on devices that might even be given away in some cases."

There is a logical link here in what Tim was saying to The Internet of Things (IoT) and his idea seems compelling, if not more than a little out there. It warranted further investigation.

For many years the traditional manufacturing-driven business model reigned supreme. Service after a sale was viewed as an afterthought, of secondary importance for most businesses from a strategic and revenue generation standpoint. 

28 billions reasons to make money.

This conventional view is being upended by the the rapid growth of IoT. For example Goldman Sachs is estimating that over 28 billion "things"  may be connected to the Internet by 2020, ranging from wearable bracelets to cars and even your dog. That number will be more than triple the projected global population in 15 years. 

In “IOT: Making sense of the next mega-trend” Goldman does a great job of giving dimension to the IOT sector. From the early IOT success stories like fitness trackers and thermostats, to the five early verticals of adoption, and IOT building blocks including “enablers” (Wi-Fi sensors) “platforms” (software apps for managing communications between devices, middle-ware, storage and data analytics) to “industrials” (B2C: home automation. B2B: factory floor optimization). 

Tim Chang of Mayfield.

Chang went on to observe that moving forward there could be products so dependent on a service layer that they’d be useless without it. People will be willing to pay for the service, more so than the hardware. He posed: “Is there an emotional connection made through the service layer?” and “Can it be made to be part of the work flow of the user’s life?”

One of Mayfield's portfolio companies is OUYA - a micro-console gaming manufacturer that runs on its own version of the Android OS. OUYA targets people who love to play and make games.  

"The offering is useless without the community,

game store and marketplace" according to Chang. Each OUYA console empowers the user to also be a developer. The revenue tail comes in the form of users purchasing game credits. 

The overall ability to couple products with a wide variety of after market services is emerging as a requirement to stay ahead in business, as well as a fertile ground for innovation. 

Consider AT&T’s “Connected Car” Service. It uses the Audiovox car connection device for $100 that plugs into most cars made after 1996 and sends real time wireless updates to smart phones, tablets and PCs. Then there are the added monthly subscription fees of $10 month for mobile share, and another $10 month for data. 

The "connected car" allows the owner to track the car location, and get walking to directions to where it is parked. It also automatically sends notices for maintenance issues and safety alerts for excessive speeding, and towed or stolen vehicles. It can produce “driver scores” for feedback on driving habits that could be improved. An additional smart phone app is available to discourage or block use of a mobile phone while the vehicle is being driven. Both are suitable for parents who want to remotely manage teen drivers. It can even be used to start the car remotely, just like in a James Bond movie. 

M2M (machine-to-machine) applications are mostly growing in the B2B context, such as equipment manufacturers developing remote services and support tied closely to their equipment and service contracts. Customer support and automation are the key benefits.

Making the dip-stick obsolete.

 ATEK Access Technologies, uses IoT generated data for the oil and gas industry to create a profit-generating service.The technology company uses the IoT to “service-ize” their business in a move that has differentiated them from the entire industry. 

From her office in Eden Prairie, Minnesota, Sherri McDaniel, President of ATEK, can see all of the company’s tank monitoring 
devices with a cloud interface.  

“Look, here are eight devices at
 one site in Nebraska,” she said. 
Sherri pointed to a icon on the screen that represented all the 
locations on a Tank Scan® monitor.

Sherri McDaniel of ATEK

Tank Scan® eliminates
the need for physical inspection of tanks holding liquids in terms of measuring fluid levels. The device in the tank measures fill 
levels from a sensor and sends the data to a gateway, which 
aggregates data from up to 20 tanks, and transmits that 
information to the cloud. 

As Goldman Sachs observed, “The Internet of Things will create new winners and leave in its wake a host of losers based on companies’ abilities to adapt to a world where things are connected.” 

The end benefits of all these connected IoT devices will:

· Help make lives easier (think: turn on the heat before you get home)

· Improve efficiency (think: turn on the washing machine when electricity usage and prices drop in the middle of the night)

· Anticipate the need for services (think full-body health monitors or car care diagnostics) 

At the end of his talk Tim Chang pondered the possibility of an IOT toilet. I did a little research, and in fact it is already in the works. 

This might give a whole new meaning to using “data exhaust” …to feed the “Potty Logger” spread sheet.

At least it might make the "toilet experience" smoother, for people who have the time to worry about such things. All kidding aside, the smart business bet is on the future of IoT.

Match-Click: A revolutionary approach to online recruitment advertising.

A typical online job listing:
About as interesting as watching paint dry.

Seems that the HR profession may be firmly stuck in 1990, at least from a recruiting standpoint. Online job listings rely on key word searches, long and boring job descriptions, use of cheesy jargon and bullet pointed candidate background requirements. There is a glaring lack of relevant dynamic content or streamed videos for today’s tech savvy job seekers.

No wonder that response / click-through rates to text only help wanted posts on job boards hover at 5%. A study from The Ladders showed that the average job seeker spends about one minute mulling over an online job posting. That translates to consuming about 250 words of content. All this spells poor engagement between hiring companies and potential candidates. 

Compare to this user engagement at Tinder  – the match making smart phone app that connects with the user’s Facebook profile to provide pictures and ages for other users to view. Users are presented with dating profile after profile, and they swipe left if they're not interested and right if they are. If both parties are interested, they can connect on Tinder’s chat function.

The average Tinder user spends an astonishing 77 minutes a day on the app, a spokesperson for the company recently told The Huffington Post. That's a lot of time, especially considering the app moves fast. That’s the power of engaging content.

For a more engaging approach to online recruiting enter Match-Click, the result of Maury Hanigan's frustration with staid and boring online job boards and corporate recruitment sites.

Maury has a 20-year history of working as a consultant to Fortune 500 firms on HR strategies, along with being tech savvy from her Duke computer science education. She saw the opportunity to use technology to deliver useful, relevant and highly engaging job information to candidates in a new smartphone app.

A blinding glimpse of the obvious for Maury was that people don’t go to work for a company per se -- they go to work for and with other people, within a defined corporate culture. Text-based job descriptions offer absolutely no clue for candidates to that side of the job under consideration.

Candidate’s prospective manager & co-workers and Top 3 reasons to apply are front-and-center.

Match-Click uses 20 second blocks of streamed content to introduce job seekers to their prospective hiring manager and co-workers. The job listing page also offers “Top 3 Reasons to Apply” and a one-click “apply now” navigational button.

Maury says this approach delivers a staggering 40% response rate, with user curiosity driving this higher engagement number. All it takes is about a minute of time from the prospective candidate to get great insights about a listed job.

Match-Click discourages the use of defined scripts. "Canned conversation lacks authenticity and therefore is much less engaging" says Maury. "The Match-Click service offers real people talking about real jobs in a credible way. It leverages a company or an employer's most compelling asset - it's people." That's what is missing from the traditional text-only job listing.

But it is Match-Click's simple presentation of the job online that is the big draw – allowing prospective candidates to begin to answer the big question fast: “Is this the right job for me?”

Conventional HR wisdom asks: Is the candidate willing and able to do the job with a high degree of excellence? Most candidates ask themselves: “Will I fit in?” and “What will the people be like that I would be working with?” Match Click offers specific context for them to judge the opportunity. It hooks prospects with the specifics of the job that makes sense for them.

Maury says the "secret sauce" for Match-Click is that it's scalable for larger enterprises, those hiring upwards of 5,000+ people each year. This comes in the form of a simple and highly effective back-end CMS / Content Management System.

Match-Click CMS dashboard for Employers.

Match-Click's current clients include a broad range of business sectors from Ernst & Young to Citrix and L'Oreal Paris to Cisco and these actual job listings are the best way to see this business model in action. 

Match-Click is currently in the process of seeking $ 2.0 million in seed funding. As one NYC based venture capital executive recently observed: “There is too much venture money chasing too few good ideas.” Who wants to see another 20 something with a smart phone app lacking a MVP?" (minimum viable product)

Match-Click is one of those really good business ideas that will leverage mobile technology to help redefine a multi-billion dollar industry, with more engaged and satisfied users on both sides of the transaction.