My analysis for Nokia Money service

Using value chain dynamics and STOF model, I did analysis for the design choices for Nokia Money service which is to be announced in emerging markets in early 2010.

Let's see how many of my predictions would come out true.

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Nokia Money

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Some of my unrealized ideas

iScan

Inspired with the iPod and similar gadgets, I always dreamed of a similar device for scanning computers and mobiles. I tried to get some feedback from experts but it seems they are not interested.

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iScan

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Status Update

Impressed with citizen journalism, I always thought of a way which can help one reach maximum possible audience based on their social capital with minimum cost in terms of time and money.

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Viral Status Update

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Commercial aspects from privacy research

I was reading recently a book "Internet policy and Economics", this book contains an essay, 7th Chapter, which comes from a Berkley professor, H. R. Varian (who is currently chief economist of Google)

He presents an economics solution to the privacy problem. The idea or concept is simple, let people trade(lease) their private data but not third parties (which is the current scenario). So, there must be a legitimate organization which let people buy others data and let people sell their data. (I think that it will kill majority of spammers and other people involved in identity theft business)

If you will read the chapter (which is quick and easy read) , you will find that the idea was first described by Laudon in 1996 (landmark paper: http://portal.acm.org/citation.cfm?id=234476 ). Laudon proposed this idea in firstplace proposing a National Information Market.

I am part of a social media platform project known as OtaSizzle, and I am researching the privacy area in the platform. To me connecting the dots from the book and the project, points out an obvious demand coming out for a service, which sets up the market place for anonymous trade of user information. Where the users data is collected at one place and is transparent to Users, about what is being collected and setting up of a market place where buyers can bid for user data.

For example: The obvious customers in Finland or elsewhere would be the retailers/marketers to send directed/personalized advertisement, not SPAM! So, service could provide a mailing list to retailers for their target audience, which do not show them who is subscribing to them but they know how many subscribers are there. They have to pay service provider a fee to post to the mailing list. A part of which is passed on to the users who have opted into disclosing their data to the marketplace (service provider) to enable this kind of transaction possible.

For example: All the users who are part of group Apple :Mac Products, might be of interest to MacStore for infroming of new available discounts. MacStore has to pay to post to users, earnings would be shared with users. So, the users are involved directly in value chain. Also, their data does not go into hands of people they do not want (which, is the current case)

So users get paid for participating in the service and also reduce their transaction cost. This is similar to loyalty cards but linked to the online activity.

In past many companies have been created, which makes spyware/adware but does not include user in the value chain. One such example is Double Click, which was recently bought by Google for ~3 billion dollars. Also, in many cases such companies can be accused of being illegal.

I see this as a radical change (if we can do it or somebody else). That instead of trapping users in EULA's we let users decide whom they want to sell and at what price their own data.

Many people who will read this piece, will obviously criticize it for:

The concept has been around for quite sometime (since 1996), why there is no such service?

I would say that we have it indirectly when the essay comes from the chief economist of Google,Google must be one to do it. Google is the one obvious implementer of this concept. They have shifted the cost of services like Gmail etc to advertising. People could control to a little extent what Google stores about them and Google has created a market place for advertisers where they bid for advertising to users, without knowing the users.

However, I would say even though Google has created the marketplace from advertisers point of view but a more choiceful market from users point of view does not exist. Users get control of their data but they still have to rely on the price set by Google not market place (maybe indirectly through competition with MSFT or YAHOO, features and storage space). They get free services and nothing else. They are part of value chain but they must get more, after all it is their data, which gives Google record profit !

Also, last but not least Google has created a market place for web for the advertisers but still their user side is not touching everybody in everyform. (Search and other services are quite widespread but still there is a scope).

I would say an independent service would be more suitable which could sit on your "machine /browser" in form of a " browser plugin/desktop client/cloud service " which eats all your usage data across the services (Facebook, Google, MSFT etc) and then users choose whom to share with their data and at what price.

Last but not least, living in Finland, I must relate it to Nokia too! With the recent announcement of Nokia Money Service, I see an amazing opportunity for an ecosystem to be created on top of this payment service. Where users can opt in for a similar version of mobile service/software which can help them trade their usage data with retailers. My guess is Nokia must be very happy to work with such a startup, as it will bring down the transaction cost of users using Nokia Money, by bringing better targetted discounts/offers.

For those who like this idea, I would appreciate comments/suggestions. Or if somebody wants to take the concept for a startup that would be even better!

2030: How does the energy sector changes: a story about everyday activity of Oskar

For one of postgraduate course I need to do a scenario about user driven innovation in energy sector by 2030.

Assumptions: I will be using certain assumptions based on some facts and figures from various sources.

1. Rise of fun and game approach, in how we do things.
- example at http://thefuntheory.com/

2. Rise of ICT usage in non-ICT fields.
- A report from ericsson claims that ICT usage in non-ICT sector can bring down CO2 emissions as much as by 15%. Where as ICT CO2 emissions itself accounts for 2% usage currently. The report mentions also about overhead, which is also important to know. It estimates for telecom sector that an input of 1 kg CO2 emission might bring saving of 10-100 kg elswwhere. So, if we were to do a vague calculation of overhead then a rise in 1-2% of ICT contribution by ICT might bring a reduction of upto 15% elsewhere. Which means that we are still saving 13%.
Link for the report.

3. Rise of connectivity :(Social Media, Mobile and Internet Usage and data transperancy)
- A recent article I read about how people change behavior for good because peer information was provided to them. (The researcher calls it "Social Proof"). To me it is inevitable that we will see more of this. Some quick numbers, 300 million users on Facebook , 4.2 billion mobile users world wide. We have a grwoing platform, once we have most of us onboard, we will have a much wider impact on how we can do things collectively. There is no doubt that Social Media is a big enabler here and technology that will enable us is Internet on mobile.

There is a trend in data transparency like : Pachube is a website where companies like Helsingin Energia have published their feed about energy usage in real time. Link

If we were to think of a world 20 years from now, then we can definitely assume significant progress in many of the technological fields. So, it will not be wrong to assume a world which is much more connected(not only humans to humans but humans to things and things to things), ubiquitous information (democratic nature of information because of the DNA of Internet), Smart materials ( Like: Wall paints which can sense, display and connect to Internet etc)

An example ICT application: http://www.ted.com/talks/pattie_maes_demos_the_sixth_sense.html

Some Jargon/Building Blocks

Future Device: FD: A device which is a gadget pretty much everybody in the world has in 2030. It has ability to connect to everything, you can not only call friends, but connect to any thing which is around the world. Say, your FD can read the energy usage pattern of your friends car and you can show him how smart you are compared to him.

It also reminds me of the term SPIME coined by Bruce Sterling.

Not only our FD will have that capability but pretty much everything which is manufactured will have this nature of remembering its usage and tracking its history. So, everything in market will be a SPIME.

Major energy companies are out of business and they move to ICT enabled energy intelligence or manufacturing portable energy generators:

• Consumers are now using their own energy sources, some communities use their own nuclear/solar/wind plants.
• People also donate energy to needy collectively.
• We have all the major energy companies out of traditional business of energy distribution and productions, they have to shift their business to R&D in intelligence of energy usage. They have now shifted their focus to build ICT applications which can be downloaded to your FD.
• End to end usage of ICT solutions: People can not only read the energy usage using their FD but send that to friends and those friends then can download that usage pattern and dictate their devices to behave in that way. For example: If Oskar wants his Laptop to use same power management profile as his friend, who happens to run it most efficiently. He just touches his FD to his friends FD while they are discussing about it. Bingo his laptop is now as efficient as his friends. This was possible because both of them had an application downloaded from the Energy app store provided by Helsingin Energia.
  

The Story:

5th June 2030: A day in life of Oskar

07:00 AM: Oskar wakes up in the morning. His waking up is detected by his bed, which inform other devices in house to start working, which are now needed. As they went to sleep too, like toilet water heater etc.

Oskar picks up his FD and realizes that it is world environment day. After he sees that in his calendar. He wants to be part of the action.

Since his utility company (who buys electricity from Oskar) and sells it to customers where they are still using less eco friendly ways to produce energy as it is cheaper for them. He decides to save some electricity by not running some of his home devices today. He can quickly calculate that which devices are optional using his FD, which is connected to home power meter and can detect those devices for him.

08:30 AM: Oskar is now ready to leave for office and he has now dictated his house devices to be shut off, so that some electricity which is saved could be donated to grid. He thinks he has done a smart thing. So he uploads his workflow (which devices to be shut in a digital file) and uses a twitter like service to tell his friends about it.

09:00 AM: Oskar friends have liked the idea and they are also spreading news about it and many people are using the same file as sent by Oskar as they have a similar home device setting.

09:30 AM: Oskar is now looking for transport to his office, there are several transport companies in Helsinki. But he can choose which company is most energy efficient by just hooking his FD at the stop near his house. He gets the answer on his FD screen and ready to take the transport which is most energy efficient.


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06:00 PM: Oskar's utility company could route record energy to the main Finnish grid, because of the small movement started by Oskar in the morning. Which picked up in entire Helsinki region in no time.

Cool hunting: my 2 cents!

Recently I was attending lectures about coolhunting using web/email based technologies. The lectures were given by Peter Gloor. ( he is probably the best coolhunter in world and making a continuous effort to spread the word about this wonderful technology already for many years now. He has authored several books on the subject area.)

However, Coolhunting (source:wikipedia) was orginally started by marketing professionals in 1990's. It seems to getting popular in mainstream as I could find a novel and an announced movie on the same. (To define coolhuting in layman terms, is to pick out trends which are going to be popular with masses in future. However, the original context of coolhunting was about fashion and to spot the designs for clothes and shoes etc)

I was digging more on the subject, and guess what! I could find something very beautifully written on the subject by Malcolm Gladwell. Malcolm summarizes in the text three laws of coolhunting which would be worth mentioning.

• The quicker the chase, the quicker the flight. (The act of discovering what's cool is what causes cool to move on, which explains the triumphant circulatory of coolhunting)
• One can just observe cool but not manufacture it. (maybe apple can do that still!)
• Cool can be observed by those who are themselves cool.

However, Peter's approach is more holistic compared to the fashion street coolhunters, over the years he has been improving his technology (several tools) which can tap into the i (read Internet and electronic) part of the process of identifying trends or to do coolfarming.

However, there is lot of jargon if I want to explain his work and it takes time to digest. But if I were to simplify it, maybe oversimplify :( than I would put it like this , " Peter's approach is about using principles of sociology and using sound models of mathematics to do communication analysis." (the communication analysis is then used to do coolhunting)

You might ask what good is communication analysis for. The answer turns out to be, communication analysis is very powerful. It can tell you what kind of network you have (if you are a company then it matters whether you do innovation or productivity stuff), identifying hidden leaders in a network, identifying cool people. (malcolm gladwell says in his above mentioned text that, cool things change but cool people not!) etc. Peter himself is using the tool to do election prediction, market trends etc apart from what is mentioned above. He is always stressing the best/worst thing about the tool is that it is very open ended!

It seems to me they have great invention but not having many problems to solve with it (However, problems are there but there is a disconnect between the application area and the solution)

It was for 4 continuous days that we had the lectures and every day I went home with lot of questions and thoughts. The topic of coolhunting is similar to what would you experience when watching Matrix or watching Star wars.

I had also some of mine, which I would like to share here:

How to position this kind of technology in market?

would it make sense to have a Google search like product (web based) which is accessible to all but then we have the paradox as mentioned in Malcolm's rule 1. If all of us know it then it is not cool anymore.

Or to make it available to selected few, who can pay the price! do we give them this technology as a product (coolhunting software) or we just give services. (coolhunting consultancies, then software is sold to them). However in both the cases we need coolhunters, because this process is more art then science. (science we can codify and put in software but not the art!)

Or the coolhunting software becomes an enterprise solution tightly integrated into workflows of enterprises, which is ofcourse customized by the coolhunting software makers. Than it would be a business model like of companies SAP.

This question also makes me think of the complex ecosystem of other creative softwares, like Adobe Photoshop. Adobe sells a single license of Photoshop for around 700 USD. What you get in Photoshop is probably the best software for photo editing but it has a steep learning curve to it. I always use to wonder that can a company like Adobe, make Photoshop something of a level that even a kid could use it, would it mean then the people who run shops because of Adobe Photoshop will suffer! (all the creative pros) who buy Adobe Photoshop at first place.

Maybe with every release company can promise to make it more usable but on the other hand Adobe also certifies people who are expert in using Adobe Software.

Predicting future or cool trends would be a similar business in my sense. However, my analogy might not be a good one but Adobe was my previous employer which made me think of it at first place. So, futurists and other similar professionals, who are few might be the user of such a software technology and the company which makes coolhunting software will be in a similar situation.

If there technology is too accessible then there is no market anymore (No futurists needed and future doesn't even remain true because of first law of coolhunting, from Malcolm's text again)
I read this wired article, which speaks about Google (employees) can predict different things with high accuracy just from the search queries people make. Will Google make such prediction dashboard public ?

Indian money saving habits and micro loans with game theory

Group A: micro Money Lenders

We were having a discussion about market sizing of Indians earning around ~20K ( which is 400 USD per month) and in the age group of 20 -35 and living in urban areas.

The guesstimate was that such people might be around 100 million and from this a simple estimate gives a market size of 40 billion dollars per month. ( I mean the earning potential)

Next thing we were trying to guess was the break up of their salaries. We (disussion group had a similar background at some point in their life) guesstimated that the biggest fraction 30-40% might go in saving. Which still means close to 12 -16 billion USD per month unused cash.

Group B: people who need micro loans

Then on the other end we have people below the poverty line, they might be from anywhere to 300 million to 400 million. Not all of them in city but maybe a significant number. Also, the hypothesis is that these people under bottom of pyramid need access to micro loans which existing systems have failed to provide because of trust, bureaucracy and what not.

Also, taking another guestimate about typical needs of these people....which might be served under 2K INR (40 USD) for most of the business they want to enter (like buying an old rickshaw)


Enabler
Note: the National ID project, India is currently having an ambitious national id project (assuming it is executed with an acceptable accuracy). It offers us a unique opportunity to connect the above two groups for bringing the trust in system.

Game Theory

I am not an expert in this subject area but if I try to simplify the use of it. Which is, two self interested players are trying to win a game by applying some strategies which are definitely guided by certain incentives.

Something similar we can have in the auctions like second price auctions, where honesty is the best policy. It uses ideas from game theory to maximise the auction bids.

Solution : The money wall

People in group A wants to save money ......but won't mind getting some interest (as most of the Indians look for a savings bank account with higher interest rate).

People in group B need money and are often exploited by money lenders by charging them as high as 100 - 200% interest rates. However , this high interest rate mitigates the risk for money lender.

So what we propose is "A money lending wall" which has two facets: (technically which has a look much like an ATM machine but has an auction kind of algorithm running connecting money lenders with money borrowers and uses the national id to bring the trust in the system)

People from group A can come and deposit money and set their bid of interest rates they are looking from market. (game theory concepts)

People from group B, can come and set their bid for amount of interest or extra money they are willing to pay. (game theory concepts)

The system can give out micro loans to people who are willing to offer as much interest as lenders are expecting and which is then definitely dictated by market forces but removes bureaucratic process and gives easy access of money to people who need it. At the same time giving incentive to people who are willing to lend.

This system can be man less totally run on the mathematical models (like Google runs for Ads auction) and charge a service fee from the people who use it for the running fees or any profits which are needed.

There will be two slight improvements needed in it to make it more robust:

1. to reduce the risk the amount one can borrow could be reduced to a small installment (say 2K, the amount of damage a person can make is reduced)
2. defaulters are linked through national id ,which is unique, so one time defaulter cannot lend money again from the system. (however, by paying a fine it must be possible to join the system back and get out from the list of defaulters)

We expect people to frequently lend for this system to be of use to to people. which is I guess the nature of micro loans. You take small but often :)

Malicious website .......... reaches you ....... through your network ........and you click it! ......but thanks to FireFox!!!!!!!!

First email (real one): One good friend of mine sent me a mail advert recently about USID challenge 2009. Below is the snippet of same......I registered by sending the email to email ID shown in red box........

Second email (Fake one): Then I get another mail about the same event but this one looks more fancy.......this one also comes from a good friend. Something which made me read this mail was, I didn't get registration reply when registering through the address on the first email. You can see the screenshot of the same advert below ( I am using the screenshot as I don't want to spread the attack myself :P but one can see the url of malicious website in the redbox in bottom left ....thanks to Mozilla Firefox 3.5)



I am really impressed by the ingenuity of the spammer/attacker as here the mail didn't came to me as a random email but from someone trusted. So the attack searched for me ..... :)

They knew that the event is recent .....so they were mixing familiar names with malicious links (some of the URL's point to trusted portals like Forum Nokia). Since the event info comes through network ....it reaches to a person who has a high chance of clicking on it. So, the chances of the attack being successful are even higher.

Lessons to be learned:

1. Have upgraded browser and working one (like Firefox) , which can tell you that the website you are trying to open is malicious.
2. Even though mail comes from a trusted source ....... first hover over the link before clicking on it ......if it is something malicious...I am clicking on! (like the one in above image is just an IP )
3. Inform your network about it ...so that they stop spreading attack........but inform them in a smart way (by not spreading it again) ........ :)