Business Ideas from MBA 734

The business model that I found most intriguing was Droid College.  The concept presented was to develop a central repository for educational materials that students and professionals looking to refresh their skill sets can rapidly access various documents at no cost.  Having been forced to use Blackboard as an undergraduate and graduate student and now through my employer, I believe that a market for such a service exists.  The Blackboard system is at best slow, unreliable, and poorly developed.  Additionally, Blackboard can only be accessed through a computer meaning that a busy professional often goes days between log-ins and typically relies on at least one other technology to get through their courses.  Even the simple act of downloading a file from Blackboard usually requires two or three attempts before meeting with success.  The system requires a great deal of patience from the user and a great deal of planning as well because trusting the system to be up and running properly when you need to upload a file right before the deadline is a fool’s game.  From past experience, the network usually crashes during exams or a few days before the end of the semester when there are major due dates. 

Perhaps I’m just thrilled that someone else is interested in entering the market space.  Or perhaps it’s because the Droid College presentation covered interconnectivity and being able to use my phone to keep track of deliverables and access course material on the go.  Blackboard has gotten way too comfortable in its market without another major competitor and their mediocre service has declined since I first used it nearly a decade ago.  Innovation is desperately needed in this space and I believe that there is room is a forward thinking service that is promoting ways of accessing its network from multiple technologies.  While I’m not certain how Blackboard’s fee structure works for universities and major employers, the low level of service they have provided their customers over the years would likely result in some attrition when a new, capable entrant came online.  Best wishes to Droid College, I hope the idea becomes a reality because such a service years overdue.

Prediction Markets

Prediction markets are an effective tool for gathering and analyzing the thoughts of a group of people on an issue.  The larger the population making predictions or casting votes, the more accurate the market can become.  Prediction markets are gaining acceptance as businesses identify new uses to experiment with them.  However, prediction markets are not very effective with limited response as a few outliers could skew a prediction significantly.  So how can a company create an incentive for users to participate in their prediction market without paying users for their input?

A simple approach is to create a status feature.  At a basic level, people value how others perceive them.  They are motivated to be named an expert or recognized as knowledgeable.  When users participate in multiple prediction markets, a company can track the individual’s response against the actual outcome overtime.  If the user has a strong history of accurately predicting political outcomes, the company could name them a political expert.  Or if a user regularly picks the outcome of professional hockey games, they could be named an NHL guru.  The company could then weight that user’s future opinions more heavily as they have an established track record of being accurate.  This motivates the user to continue to participate and provide quality responses.

LinkedIn

LinkedIn must define how it wants to grow and what customers it intends serve.  Today, the company has over 100 million users and serves three distinct sides of the network, individual professionals, corporations, and advertisers.  A multi-sided network can exist when the needs and actions of one side are not a detriment to another.  Individual users generally accept well placed ads are as a cost of doing business.  However, a few overwhelming ads or pop-ups significantly reduce the amount of times a user will visit a site.  LinkedIn is treading down a path that is likely to pit one side of its network, the professionals, against another, corporations.  While some professionals pay a subscription for premium access to LinkedIn’s services, most are casual users who use the service to keep in contact with others they think may help them find a new job.  They may make an introduction or two and may click the occasional ad but LinkedIn generally does not see much revenue from individual professionals.  On another side, LinkedIn offers businesses of all sizes tools to help recruit and retain talent.  Corporate accounts are more profitable for LinkedIn and the company has a sales force to service them.  LinkedIn collects a fee for job placements and enables recruiters to reach passive job seekers through its premium InMail service.  The last side of the network is advertising.  LinkedIn has established approval processes for ads and widgets placed on its in order to protect and maintain LinkedIn’s professional image. 

Moving forward, the biggest threat to LinkedIn is LinkedIn.  Professionals use LinkedIn because they want to keep their professional and personal lives separate and there is not another uniquely professional social network large enough to compete with LinkedIn.   Businesses, recruiters, and advertisers will all follow the crowd of individual professionals so LinkedIn must remain as attractive as possible to the individual professional user group.  As such, LinkedIn must focus its efforts on ways to increase the amount of time that the individual professional spends on LinkedIn.  The company should develop and offer value-added features such as webinars or industry training courses to increase the amount of time professionals spend on LinkedIn.  LinkedIn could then mine through user activity to identify trends and potentially professionals contemplating looking for a new job or career change.  This information could then be sold to businesses anxious to speak with talent before they begin the job search.  This service and others like it that increase the usefulness of LinkedIn to professionals and increase the amount of time they spend on the site should be a top priority for management in the years to come.

Wikipedia

Wikipedia was founded in 2001 to provide a web based encyclopedia created, edited, and controlled by the masses.  The company has a very informal structure relying on a small number of employees to maintain the site and generate revenue while essentially outsourcing the content creation, editing, and control to volunteer contributors, known as Wikipedians.  Incredibly, the model has worked. Erroneous and/ or malicious updates are regularly deleted by other users who seek to provide the unbiased truth.  Wikipedia has set up a set of guidelines known as the Five Pillars of Wikipedia that govern the site’s content management process.  The Pillars are Wikipedia is an encyclopedia, has a neutral point of view, is free content, has a code of conduct, and does not have firm rules.  However, enforcement of these pillars has been largely left up to contributors as well mostly because of the 5^th pillar Wikipedia does not have rules.  As such, content management has been the subject of many debates and has led to three distinct classes of Wikipedians in terms of how to deal with erroneous entries.

Deletionists

Deletionists are Wikipedians who believe that Wikipedia should be used to report accurate and unbiased information on as many topics that it can but no more.  Deletionists prefer not to add content to Wikipedia until such time that there is a significant amount of independent research to support the new topic.  While this mindset protects the Wikipedia brand from being tarnished by erroneous content, it also limits the site’s ability to stay current on emerging subject areas.

Inclusionists

Inclusionists are the opposite of Deletionists.  These are the Wikipedians who believe that Wikipedia should offer as much content as possible and that through the process of editing, the unbiased facts will emerge and be validated by other users over time.  To Inclusionists, the argument that a topic has not yet been researched or developed enough to yield unbiased facts is not a reason to exclude it from Wikipedia.  Instead, they argue that emerging topics must be on the site to keep users informed of the most current developments and keep the site current and relevant.  The Inclusionist mindset does allow the possibility of erroneous content related to new topics to damage the Wikipedia brand.  However, this risk already exists because Wikipedia does not restrict update privileges to subject matter experts. 

The Middle Ground

The final class is comprised of Wikipedians who fall somewhere in between the Deletionists and Inclusionists.  This group is known as the Association of Wikipedians Who Dislike Making Broad Judgments About the Worthiness of a General Category of Article, and Who Are in Favor of the Deletion of Some Particularly Bad Articles, but That Doesn't Mean They Are Deletionist.  They believe that some content does in fact not belong on Wikipedia but others such as emerging topics should be on the site and allowed to be developed

By 2006, the divisions between the groups had widened to the point that it was beginning to wear on the community.  More troubling was that there was mounting evidence that new topics with limited source data were beginning to damage the Wikipedia brand.  Casual users could find information about a plethora of topics but the general perception was that it could not be trusted.  As this perception grows, it could enable a competitor to gain a foothold in the market and damage the brand.  Wikipedia Founder Jim Wales and the rest of the Wikipedia management team need to define a path forward for the community.  While the Deletionist mentality may be appropriate for topics that are well established, it does not lend itself well to emerging topics.  If Wikipedia follows the Deletionist mantra, it risks becoming irrelevant as many users go to Wikipedia to read about a new topic for the first time.  Worse yet, if Wikipedia deletes all topics that are not supported by enough independent research it allows a niche for a competitor to gain market share.  However, Wikipedia could not allow erroneous content posted on emerging topics to damage its brand either.  Users may rely less on Wikipedia if they feel that it is not reporting unbiased, fact-based information. 

Status Quo

Continuing down the current path is a strategy often left out of the decision making process but it does need to be considered.  At Wikipedia, the status quo is not necessarily broken.  Instead it could be argued that the process of creating, editing, and maintaining unbiased, fact-based content is working exactly as designed.  Wikipedians dividing into groups over when and how to create new topics and manage content may be a natural reaction to Wikipedia’s structure and lack of formal standards.  However, the status quo is also creating some discomfort within the community as more new topics without substantial independent research emerge at a growing rate.  Leaving the status quo in place may only allow a minor issue to snowball into a large problem.  However, if Wales were to come forward and reaffirm the company’s commitment to this process it may temporarily calm the storm and allow cooler heads to prevail.  This option does not require any significant capital investment and presents few short term risks as it would not change the Five Pillars that currently govern the site and its community.

Develop Criteria for New Topics

Defining what makes a topic eligible for Wikipedia would reduce the much of the debate of inclusion or deletion.  However, developing criteria to evaluate whether or not a topic is worthy for Wikipedia currently goes against the 5^th Pillar which states that Wikipedia does not have firm rules.  While defining and implementing this policy would not require a significant investment, the consequences of such a policy would likely be far reaching as it would reshape the rules and norms of the Wikipedian community.

Disable the Delete Function

Management could disable the delete function or make the process of removing a topic more difficult by taking the stance that all topics are to be included unless it violates the Five Pillars of Wikipedia.  This follows the 1^st Pillar that Wikipedia is an encyclopedia and 2^nd Pillar that it maintains a neutral point of view.  However, Wikipedia must protect its reputation and defend accuracy.  If Wikipedia allows topics with erroneous content to remain on its site until it can be edited, if it can be edited, it runs the risk of damaging its brand.  Wikipedia already has issues with its credibility.  Many in the academic and commercial worlds already look down on Wikipedia because the site allows updates by non-experts.  If Wikipedia makes it more difficult to delete topics, it prolongs the life of a topic that may not be worthy of an entry.  In doing so, it increases the opportunity for users to read the disputed entry and form a negative opinion about Wikipedia because of erroneous information.

Hybrid Approach

All of the above mentioned solutions offer some benefit to Wikipedia but all have significant risks.  Wikipedia could combine these solutions into a hybrid approach that would reaffirm the company’s commitment to its founding philosophy and take a stronger stance on referenced work.  Wikipedia cannot allow new topics with marginal source data to damage its reputation as an unbiased, fact based content provider.  Wikipedia can develop an alternate site where it can incubate new topics until such time as they provide unbiased, fact based data supported by multiple independent sources.  While this solution would require more capital investment and a significant change to the current process, it does solve the debate over what to do with new topics without alienating Wikipedians or damaging the brand’s reputation.

Recommendation

The hybrid approach provides the solution that will be accepted by most Wikipedians and must be recommended despite requiring the greatest investment.  This approach may also inadvertently create a niche market for a competitor to produce content on emerging topics but the hybrid approach allows Wikipedia to be the most useful (accurate and unbiased) to the most users.  The risk of creating a niche market for a competitor to exist creating data on emerging topics is relatively small as it would take a significant amount of time for any new entrant to develop a critical mass of content to be viewed as a credible source and rival Wikipedia.  More so the fact that any potential new entrant would likely be a niche service limits any potential impact it may have.   

Getting in Front of Negative Media Attention

“United, United . . . You broke my Taylor guitar.”  I have had that line stuck in my head for almost a week now.  If you have no idea what I’m talking about, go to YouTube right now and search for United Breaks Guitars.

In a time when catchy videos go viral, any person with a computer and just a little time on their hands can become a company’s greatest promoter or greatest foe by simply posting a video about their experience.  Such was the case when Dave Carroll posted a song about his ordeal with United Airlines in July of 2009.  Carroll’s song, United Breaks Guitars, tells the story of how his guitar was damaged by United Airlines baggage handlers during a layover in Chicago.  As of this posting, the video has been viewed more than 10 million times.  But how much can a funny YouTube clip really cost a company?  In United’s case, Carroll’s song ignited a firestorm of negative attention and the company lost around $180 million in market cap.  While this is an extreme example, it been well documented that consumers share their experiences with others.  The only difference is now consumers have the tools to reach hundreds, thousands, even millions of others instead of just a handful of friends.

Perhaps even as little as 10 years ago, a company like United Airlines could have ignored incidents like Carroll’s because consumers did not have a platform large enough to reach the masses and share their experience.  Now there is an entire industry organized for the single purpose (if you exclude selling ad space) of providing a forum for users to post their thoughts.  Yelp has helped many small businesses prosper as a result of a few unsolicited, positive reviews.  However, it has created hard times for many others that did not provide the level of service that the reviewer had expected.  Consumers have demonstrated that they are more willing to trust other consumers, especially ones like themselves, than they are willing to believe any corporate ad.  So how can companies leverage this phenomenon?  There are technologies out there to enable the truth to be brought to light, maximize the positive attention and deflect the negative such as Reputation.com.  It enables users to create a profile that depicts how they want to be seen (only flattering of course) and then seeks to protect that carefully crafted image against malicious (or potentially accurate) postings.

But does this really solve the problem?  No, sites like Facebook, YouTube, Yelp, and Twitter only provide consumers a platform to share their experiences with a larger audience but before they existed, consumers shared their experiences with others albeit on a smaller scale.  So the problem is not at all technology based and so the solution should not be technology based.  There is no replacement for quality customer service.  Simply put the ability to deliver what consumers expect is what keeps a company in business.  If it fails to meet consumer expectations, consumers generally share those experiences and the company suffers.  Dave Carroll’s song would have never been created if United had atoned for damaging his guitar or better yet, did not break it in the first place.  The real way to get in front of negative press in today’s digital age is to treat consumers with respect and deliver what you promise.  Anything less than that . . . well you can read about it on Twitter or maybe watch a video on YouTube.

How does Hulu’s value proposition differ from traditional broadcast and cable television?

Hulu CEO Jason Kilar has been quoted as saying that the company’s objective is “helping users find and enjoy the world’s premium, professionally produced content when, where, and how they want it.”  This statement highlights Hulu’s competitive advantage over traditional cable and broadcast companies and other web based content providers like YouTube.  Cable and broadcast companies have literally networked their way into consumers’ living rooms in order to provide professionally produced content over their many channels but their strength is also their weakness.  Having invested so much capital in creating and maintaining their cable or fiber-optic networks, they are either unwilling or financially unable to develop new means of delivering that content.  Other web based competitors do not have access to “premium, professionally produced content” and instead offer thousands of short clips created and uploaded by other users.  While some are well made and many are enjoyable, very few appear professionally produced.  Hulu exists between these two spaces.  Major media companies News Corp and NBC Universal partnered to create Hulu in 2007 as a means of distributing their premium content to users not necessarily in front of a television set.  Hulu benefitted from this pedigree by immediately gaining access to the content of Fox, NBC, Warner Bros, and Lionsgate.  The newly formed company quickly set about creating a platform that would enable users to view content not only at Hulu.com but at hundreds (later thousands) of partner websites.  The company has since focused on distributing content to smart phones, allowing users to stream to their television, and entered into an agreement with Disney that provided Hulu access to Disney’s content in exchange for an equity stake.  Hulu has developed ways to position its premium content to users wherever the user is using whatever device the user has available.  It even allows the user to select the program(s) they wanted to view on demand.  This set the company apart from other cable or broadcasting companies that aired a set line up on various channels via connections to televisions.  While many cable companies have developed on demand features that enable users to select when they want to view specific programs, they still limit their distribution to television. 

What are the factors behind Google’s early success?

As with any start-up that ultimately succeeds, Google was founded to solve a problem that was causing the masses pain.  In 1999, internet search engines were designed to return pages that had the most instances of keywords.  The pages with the highest instances of the keywords were returned first.  Web developers used this design to their advantage by loading illogical combinations of words on their pages to create high counts of many words.  This resulted in low quality results being returned at the top of searches.  By the time Larry Page and Sergey Brin unveiled their PageMark algorithm to power search engines, users were ready for a new solution.  PageMark relied on the number of inbound links a site has rather than the number of keyword occurrences to rank results.  Brin and Page figured that other web developers had already valued a target site by linking their site to it and so returning targets with the most inbound links at the top.  In doing so, PageMark would also return the most valuable sites.  The technology quickly caught on and empowered the company to experiment with paid listing models for selling ad space.  The focus on innovative ways to grow ad revenue led Google to create AdSense, an advertising system that places ads where users find similar content.  AdSense enabled Google to grow beyond search and it quickly became a web-based juggernaut by adding Google Maps, Docs, Finance, and Gmail to name a few.  The more free platforms Google delivers to users, the more ways it can sell content based ad space with AdSense.