Blockchain: The Next Big Thing

We all lived through the heights of the social media craze when every new product needed a social aspect in order to succeed (success is defined as getting funding). My personal favorite was the backyard grill thermometer that posted the temperatures of what you were cooking to Facebook and Twitter. (Okay, there was a little more to it than that, but not much).

But as an Internet fad, social is starting to cycle down, meaning that another Internet fad needs to take its place. My nomination: blockchain.

You have doubtless heard of blockchain, although the odds are you don’t know exactly what it is or what it does. Most people don’t. My understanding of it is sketchy. But when it comes to the Internet, complexity is a benefit because everyone salutes when they hear about a new service using blockchain, without being able to ask any tough questions about how or why.

A great example of this is a restaurant review site called Munchee. Munchee plans to disrupt sites such as Yelp and Zagat in part by using blockchain technology. Think about that for a while. Or better yet, don’t think about it. You’ll get a headache.

Munchee has a few interesting twists to it. First, it’s meant to be more granular than sites like Yelp, by focusing on the individual dishes a restaurant serves, based on the belief that all dishes served by a particular restaurant are unlikely to be of equal quality. You might doubt the need, but it’s a plausible idea.

Munchee also wants to correct for sample bias in reviews. It’s well understood that people are more likely to post a review when they are dissatisfied. Munchee wants to get around this problem be rewarding all reviews with tokens that can be redeemed at restaurants or even sold to other Munchee participants for cash. If you are getting paid for every review, the reasoning goes, you’re as likely to create a positive review as a negative one. Again, an interesting idea.

To get even more accuracy, Munchee wants all reviews to be peer-reviewed by other Munchee users. Munchee intends to recruit peer reviewers by using (buzzword alert) machine learning to find the other Munchee users best qualified to pass judgment on the review. Still again, the notion of peer review is an interesting one.

So where exactly does blockchain come in? Does it, for example, somehow definitively tie the reviewer to the restaurant, in order to eliminate false reviews? Well, no. Instead, those award tokens that Munchee offers are actually crypto-tokens that are tied to the Ethereum blockchain. That’s it.

Munchee actually has some fresh approaches to review platforms, but it apparently couldn’t resist the temptation to bolt on a tenuous blockchain application to sound even cooler and more cutting-edge. Unfortunately, that works to obscure the more basic ideas it has that are likely to be where the real value is created. We all need to be careful not to fall into the trap of rushing to adopt new technologies just because they get a buzz around them. You’ll only end up confusing your customers … and yourself … about the true ways you offer value.

Can You Over-Monetize?

To avoid accusations of commercial blasphemy, I am going to pose this as a question, not a statement: can you over-monetize a data product?

Consider the online real estate listings databases. There are lots of them, all engaged in a fierce battle to the death. They make their money selling listing upgrades to real estate agents, a hotly competitive and demanding group. The product they are selling is homes that can easily cost $1 million and more, with very sizable commission dollars at stake. In such a high ticket and fiercely competitive market, would you want to junk up the user experience with irrelevant advertising, and annoy your real estate agent customers by distracting users from the listings they are paying to enhance? The answer appears to be yes.

Several of these sites have now been designed to display programmatic ads. With all it takes to attract a live buyer to your site, do you really want to risk that buyer clicking on an ad for a local car dealer and leaving your site entirely? Do you want to intersperse listings of homes with ads for mortgages when your primary source of revenue is real estate agents who badly want your site visitors to look at their listings?

You know the saying: real estate is all about “location, location, location.” Does it make sense then that when a potential buyer clicks on a map icon to see where a home is located, she is presented with a map cluttered with logos indicating the location of nearby State Farm insurance offices? Does anyone buy a house based on proximity to an insurance agent? Doubtless someone thought this was a clever marketing gambit, but it distracts, confuses and possibly annoys the potential buyer.

The photo slideshows that are the critical core of each home listing are now increasingly cluttered with advertising. If I was a real estate agent paying to upgrade a listing only to find it was chock full of ads, I’d be furious. I want prospects looking at pictures for the home I am selling, not distracted or annoyed by irrelevant advertising from third parties.

A lot of this comes down to the degradation of the user experience. But in some cases, it’s an even bigger issue: it’s a problem of the data publisher forgetting who they are serving and in some cases, why they are even in business. A little bit of incremental revenue can sometimes have a very high cost attached. And the guiding rule of all things online remains the same: just because you can, doesn’t mean you should.

Monetizing Mediocrity

I laughed out loud while reading a recent Bloomberg article describing how Apple has a secret team hard at work to improve search in Apple’s App Store. Key to this initiative: finding a way to introduce paid search so that app developers can pay to come up first in search results. Oh yes, as a secondary objective, this secret team is also “trying to improve the way customers browse in the App Store.” Note that they’re improving browsing, not search!

Yes, the App Store, which the article correctly notes is a vital part of Apple’s business, urgently needs to be better monetized. Better functionality? Maybe, they’ll look at that too.

The App Store is a case study in bad design and a bad user experience. My sense is that it was created with the notion that users would primarily browse for apps of interest. But with 1.5 million apps and only 25 categories, you better have a lot of time to kill if that’s the way you want to find new apps.

Search is even worse. It starts with the well-hidden search box. Start typing in a word, and the search software will helpfully suggest phrases. But if you click on one of these search phrases, more often than not, you’ll come up with no results. Further, Apple seemingly permits companies to stuff their entries with the names of competitive products too, so you have to be extremely careful what apps you download, something I discussed in an earlier post.

Searching in the App Store is incredibly literal too. Apparently, concepts like wildcars or Soundex or even relevancy eluded Apple’s celebrated designers. In almost every respect, Apple appears to have succeeded in spite of itself.

Besides serving as a useful case study of how not to build an online store, business information companies need to consider how this impacts their products and digital strategies. Most business information companies distribute their apps through the App Store. It’s important not to take for granted that they will be found. Try searching for your own app in the App Store using common searches your typical user might try. I can pretty much guarantee you’ll be disappointed if not shocked by the results. Saying “download our app from the App Store” is unfortunately not enough direction for users. Also, spending some time to really think through your App Store listing is absolutely time well spent.

You should also keep an eye out for scammy apps that may be presenting themselves in confusingly similar ways in the App Store. Apple doesn’t seem to care, but you may be losing business to other app developers that don’t have your user’s best interests as heart, and this could ultimately reflect back on you. There are a stunning number of apps that seem to be gaming the system.

Apple’s planned solution to App Store search seems to be not to improve it, but to charge money for you to get the results you would expect to get if its search functionality worked properly. And much as I hate to say it, it may be worth paying up, because digital adoption starts with your users getting their hands on your app, and Apple is making that incredibly and unnecessarily difficult to do.

Supercharge Your Audience Database

Time, Inc. recently announced a brilliantly simple and smart deal with a company called Audience Partners just in time for the 2016 election season. Simply stated, it is overlaying its massive consumer database with voting data from Audience Partners that has created a National Online Voter File database.

Yes, just in time for the elections, Time can now offer political campaigns access to its audience, but now with the ability to target not only by Time’s demographic data, but also by political party affiliation. And lest I leave you with the impression that Audience Partners only offers simple party registration data, let me be clear: there’s much more. The National Online Voter File allows targeting by voting frequency, donor history, types of elections the voter typically participates in and more.

Hopefully, your head is already spinning with the possibilities for your own audience database. In the B2B world, a voter overlay wouldn’t be my first choice because that’s a volume game: you need a huge audience to be attractive. But let your mind wander to other possibilities a bit closer to home. Is there public domain or even licensed data that you could overlay on your own audience database to create new high-value marketing opportunities? All this added intelligence about your audience is also something you can leverage internally as well, getting smarter about who you are talking to and what content they engage with.

None of this is a new concept. I remember back to the good old days of pressure sensitive labels and postal mail. Even back then, mailing list compilers were slamming together lists of mail order buyers to identify coveted “multi-buyers.” And “master files” of names, sometimes with hundreds of possible demographic and behavioral selections were readily available.

As a B2B example, I often offer up the example of Randall-Reilly, which has publications serving the trucking industry. It overlaid its basic audience data with a rich public domain database that allowed to it append truck ownership data. Suddenly, it went from offering modestly value truck driver contact information to hugely valuable market intelligence and targeting capabilities as it now knows the exact make, model and year of the trucks its subscribers operate.

This is perhaps the simplest and fastest way to supercharge your audience database. Think of what data you and your advertisers would kill for, then rather than trying to acquire it yourself, see how you might acquire it through one or more overlays. This has been a good business for 30 years; it’s even better today.     

Looks Matter

You’ve probably heard of a company called Square: it manufactures a doo-dad that attached to your mobile phone or tablet that allows small merchants to accept credit cards. Well, Square went public yesterday, and the stock popped nicely, earning the six year old company a market valuation of $2.9 billion. That’s an exciting story in and of itself, but what really jumped out at me was a comment made yesterday by Jack Dorsey, Square’s founder. He said, “We’re not going out there to say we’re getting rid of the banks or card networks. We’ve just put a much cleaner face on that infrastructure.”

Yes, this young company with the multi-billion dollar valuation sees itself, in effect, as a user interface company. Square isn’t trying to disrupt the existing payments networks. It is simply trying to make them more easily accessible.

Certainly, most data publishers are well aware of the importance of the user interface and the overall user experience. But here’s a stunning example of a company that has built its entire business on providing a simpler, easier customer experience.

Thinking about Square this way made me realize it is not an isolated case. Another company that caught my eye recently, called HoneyInsured, seeks to take on an even bigger challenge. HoneyInsured is a front-end to the healthcare.gov site where consumers seek to select insurance plans under the Affordable Care Act. Think back to all the horror stories around the launch of healthcare.gov and then consider HoneyInsured’s claim: it can identify the best health plan for you if you answer just four simple questions. A complex process becomes simplicity itself.

While all of this is very cool and cutting edge, it’s really not all that new. Think of the number of services (e.g., EDGAR Online) that sprung up to put user-friendly interfaces on the SEC EDGAR database – while EDGAR was completely free to use, these services proved that lots of people would pay for smarter, simpler and easier access.

As the data market evolves, we are increasingly seeing that the interface and the overall user experience matter almost as much as the data itself. The rapid shift to mobile devices has forced data providers to simplify and often dumb down their products to provide an adequate experience on these small screens. And the larger trend of users not having the inclination to read (either your user manual or the content itself) is also forcing content companies to simplify their interfaces. And that’s no small challenge when users are simultaneously screaming for both simplicity and more powerful analytics.

The bottom line is that data presentation matters … a lot. Your user interface can become a prime sales benefit, or a critical competitive weakness. We’ve certainly seen examples of market incumbents being challenged by upstart competitors with largely the same data but much better and fresher presentation and ease of use.

Having great data is now a minimum requirement. Putting tools and analytics around your data is the current battleground. But we’re quickly seeing that the next one will be the presentation layer – the “last mile” problem of translating your data and tools into something users can engage with easily and immediately, and make sense of just as easily. Are you giving your user interface the attention it deserves?