We Welcome New Competition, Seriously!

The time is exactly 9:15 in the morning. I didn't wake up early just to write this post, the truth is, I've been awake all through the night. I'm really finding it hard to hibernate the computer and go to sleep these days.

You can put it how you like, say, I'm losing sleep over competition.. Well, I'm not ashamed. Its a good thing, it has changed me and helped me see the bigger picture better than i did earlier.

The emergence of huge competition only last year like Nollywood Love has given us new determination. It has shown us a bigger market exists more than we anticipated or planned for.

Here is why you should welcome competition

1. Market validation
You can use either your competitors traffic or revenues to boost your own confidence and work harder or you can show the figures to investors to give them an idea of the market.

2. Show signs of a boom
If you see startups similar to yours springing up all over, like in the case of Groupon, then the market is experiencing a boom. Do what you can to grow as fast as possible.

The main issue is, AfricaMars Media is what I'd like to call "first generation of African video sites", together with a few early competitors.. We were ahead of our time and the was not much traction to be gained. We were ahead of our time.

With the new African TV services, the time is now and what matters is who's still here in the next 5 to even 10 years!

How African Artists could use new media to boost earnings

This is a write-up a posted on a couple of african entertainment blogs some weeks back. They have generated a lot of buzz, some meaningful commenting and lots of Facebook shares.

After the whole noise has subsided, I figure I should bring the article to my readers after all, lately I've been distracted with some other work and I may have neglected this blog a bit.

Here goes the article;
There is a shift from the traditional means through which we consume entertainment to a more convenient and social medium. Since the new medium is more convenient and interesting than the traditional, in the future, it will replace what we know today as media consumption.

Mobile and digital entertainment technologies are gradually making their way into Africa and the artists and entertainers are quick to jump on the wagon in order to get their names and works out there. With convenience, consumers’ money will move from buying CDs (traditional consumption) to streaming from their mobile phones, the web and soon renting storage space on cloud services to store their entertainment and access it from their cars and other digital platforms.

This shift will definitely favor online marketing and promotion savvy entertainers and the best thing; the Global playing field would be leveled. Works by African artists would be accessible and easily sold globally due to ease and low cost of distribution of new media.

The main problem African artists and producers are facing is the problem of piracy. Illegal CD copies of their copyright materials are made and sold in huge quantities without any royalties being paid or even their consent. Even though p2p sharing and other pirate applications have given the web a bad name as far as music and movie studios are concerned, digital media and the web have a declining rate of piracy thanks to new Internet startups like Spotify and Pandora offering users music for free and making money off advertisement which they share with the record labels. This model and also paid music subscription models would decrease online piracy significantly in the very near future and digital will soon be the main money source for the music industry.

The bottom-line is, the money is in new media and the earlier African entertainers take advantage and make a name for themselves out there, the easier it would be for them to earn in the near future. The only problem is, African artists have to really focus on quality entertainment content in order to compete in the Global multi-billion dollar entertainment market share. I know we have what it takes here in Africa.

WHAT DOES FACEBOOK’S MOVE TO MOVIES MEAN FOR MEDIA COMPANIES?

Recently, Warner and Facebook announced that they will be offering the rental of the movie Dark Night on the social networking site.

I’m sure even if they wouldn’t want to accept it, this move by Facebook has given many new media startups and media incumbants sleepless nights. The announcement even sent Netflix’s stock down. The billion dollar question is, is this a real threat to media content distribution companies or just another move by an over-grown startup that is trying to own everything else online, of course apart from search which Google already owns.

If you have followed Internet companies for at least 6 to 7 years, you should know that every move facebook makes should be taken seriously.

If you look at their continuous iterations and for the fact that they have more than 600 million registered members, you will see the large distribution power they have over anything. If there is one thing they learned from creating a huge open platform, is that the money is not on the platform itself (facebook) but on ecommerce services third parties have shown them how to create, grow and monetize off their own platform. This is the best thing about creating an open platform and giving users and third parties control, you get to tap into their creativity and ultimately find monetization ways you wouldn’t have thought of. {This is a complete post on its own on how to get users to creatively show you how to monetize}.

So Facebook can definitely give media startups a run for their money and yes, we in the business should be worried. Even media companies and startups in Africa should be worried, this is why;

Facebook is good with taking things Global, advertisers may argue Facebook ads are not as effective as Google’s adwords but believe me, Facebook ads are more geo-targeted.

Facebook’s global strategy was one of the reasons they beat myspace. Facebook grew well with International markets and Myspace was still bigger than Facebook in America.

Big brands are all jumping on the Facebook ride. It’s completely debatable if this is going to last or not, afterall we’ve seen AOL. But personally I believe Facebook is different and could get even bigger than Google. Facebook taps into our behaviour to design how we interact and use the site, so unless human behaviour completely changes, Facebook is here to stay (I know this is a very bold prediction, still I’m ready and willing to make).

Social gaming is very succesful on Facebook, and social TV could even be more successful. Facebook can even make local social TV successful for their recorded success in scoring local advertising deals.

If Facebook could connect people based on their interest and location through movies and TV? Boom!! It would be the biggest media company. I’m not exagerating here...
So with all these, what do you do as a small video content startup?

1. Niche Distribution.

This is debatable because Facebook is divided into networks and that covers lots of niche markets. Still if you have a huge reach in a niche, lets say lovers of movies in a particular African language or setting, then you have a stay of execution.

2. Exclusive content.

Netflix is moving to create it’s own network quality TV content. You need exclusivity to differentiate and that exclusivity is going to be hard because the content owners will go to someone with bigger distribution to produce more revenue for their content.

3. User experience

This is the one that will actually determine if you’ll win or lose. User experience in media design is everything. Content of course is king, and once your technology doesn’t suck, the one with the best user experience wins. If you can beat the geeks in designing for viewing (social networking and watching a show or movie are active and passive things respectively) since the people at Facebook may not hit the nail on its head the first time, then you’ll get some much needed traction in time.

Even though the Netflix boss said “people don’t go to Facebook to watch movies”, we at AfricaMars media are taking nothing for granted.

Facebook is bigger than just a social network, its becoming a global community and in every community people live, eat, work and do so many other things. Same with Facebook, people mainly connect on facebook, but soon they will work on it, discover information and entertainment on it, may be even study and of course always go there to kill boredom (watching movies) ;)

The 2011 Forbes List (Tips another Bubble?)

Just read a report and went through the new Forbes top richest people's list and well, it shows an unexpected or even shocking increase in global wealth accumulation. I dont want to go into the detail of the list, here is a link for your thorough investigations of the complete list Forbes 2011 Wealthiest.

What I wanna do is discuss why I see signs of another bubble forming and how people should be careful not to fall into another unanticipated financial melt-down.

First-off I wanna start by saying that I am not an economist in anyway, I have no economic authority to issue any harsh warnings, rather, I have experience. A decade of closely monitoring patterns from stock rises to rich lists and so on.

Here is a bit of superstition....

In 2007 prior to the economic downturn, number of billionaire in China around doubled, same with this years list. Also prior to the burst Russia had the most number of billionaires. Russia has also claimed the most billionaire in 2011.

We also have a record number both in terms of billionaires and also their combined wealth. But I can't come up with a theory based on superstition.. I need genuine logical proof. Here we go

The Bubble..

The cause of the last financial crisis was the housing bubble, the one before it was caused by the Internet bubble. So, what bubble do I see for ming now?

I think the bubble may not have formed yet, but its gathering momentum and getting ready to form, blow up and burst in the future.

Why do I see a bubble now?..

We are still in the road to recovery while we are see bloated valuations for companies, assets and net-worths. The truth is the Global economy hasn't fully covered, may be not even halfway but we are seeing record wealth and net-worths. By the time the economy fully recovers, we'll completely be in a bubble.

Internet assets..

Internet companies are being valued much higher than media companies, while the Internet companies can't earn half in revenue of what media companies earn given the same content.

Due to this, many TV shows are skeptic of forgoing Network dollars of streaming chicken change.

Africa..

There isn't a bubble forming here, Africa is actually undervalued and has lots of potential in the coming future. As economies improve and new development comes to Africa, we will see similar growth rates to what we have seen in India and China in the past decade.

Lessons Entrepreneurs should Learn from the Uprising in the Middle East

The #1 lesson entrepreneurs could learn from the recent uprising in the Middle East is ...... No, not Social Media.... Guess again! Social media is surely one of the top lessons but the top-most lesson you can get out of the events in the Middle East isn't so obvious.

#1. Momentum in a trend is good.

I know most people won't agree with me because Social Media organized and spread the whole revolution so it should be number one on the list. The truth is, I disagree.. Without my number 1 lesson to be learned here, the revolution would have taken place in Tunisia alone or may be Egypt and wouldn't have spread protests and potential (as for now) regime changes in Libya, Yemen, Bahrain and the minor demonstrations we are starting to see in Saudi Arabia and Iran. The momentum created a wave across the whole region, and now that the momentum is still building, it's really a crucial and fragile time for regimes in the region and elsewhere to hold on to power to survive the momentum's waves.

Increasing momentum convinces people in business, warfare, politics and so on (by building a growing hope for change or a certain event). When people see build of power, confidence or activity, they tend to believe in some sort of coming result and they follow.

With this strategy, entrepreneurs can learn to project confidence with investors, employees and even customers by constantly achieving milestones. You could stay silent for a while, but once you start, keep moving with a series of activities and coverage. Inconsistency kills (kills momentum and confidence).

I'm pretty sure the leaders whose regimes are facing these protests wouldn't want to see any more leaders step down due to pressure because that would build confidence in their own protesting oppositions and increase the whole Middle East uprisings momentum. I predict if one more regime should fall, then it wouldn't be the last ruler we'll see step down due to protests in 2011... The fall will make the protests spread more across the region and beyond. Also, if no leader should fall in the coming weeks or days, (Libya being a crucial point) then the momentum may begin to die down... Therefore, the fate of many other Middle Eastern regimes facing protests may lie in Tripoli. Just saying... ;)

#2 Social Media

The lesson #1 would be an entrepreneurs greatest take-away from the recent uprisings. Understanding this whole psychological concept of using momentum to project confidence would be a great asset to you. Lesson #2 is obviously everyone's favorite lesson from the happenings. It is SOCIAL MEDIA..

Social Media gave power to the people in these regions through mass real-time connection, spread and organiztion.. The campaigns that toppled decades long regimes started on the 2004 founded social network Facebook. Give people social media and they have freedom..

Also, engage your users on social media and they'll work for you through spreading your message. Especially if you can relate to a cause, social media sites like Facebook or Twitter can make your message go viral.

#3 Greed isn't good afterall.

Another take-away for entrepreneurs from the recent events is the fact that greed isn't good for anything you are doing in the long term. The toppled regimes have been accused by their followers of embezzling of billions and not providing necessities and jobs to their followers.

Therefore, what this means to entrepreneurs is, if you want to build the next big thing, don't be greedy towards your employees, investors and customers... Don't be too self focussed.. Stand up for them if you want your venture to go far.. Don't focus on yourself, focus on the company's interest.. Forget making a huge net-worth for yourself, rather, build a very valuable company. If you think in the long run and shun greed, you and your company will do more financial and the party will last much longer.

Lastly, if you believe there is more to be learned from the recent uprising in the Middle East both as business or life lessons, let us know in the comments below.

Does saying goodbye to user uploads put zoopy in direct competition with Africamars?

I got an email in January from zoopy.com about the new change on the site. In the email, their CEO Jason Elk talked about a change in Zoopy’s strategy to focus more on Zoopy TV. The African online video streaming site will discontinue user uploads and focus more on the more popular Zoopy TV section of the site which delivers TV content like shows and other programs.

Well, Zoopy started a few years back and grew popular in Africa, I think mostly in Southern Africa. In startups, pivoting a product or service to focus on an area with more traction or revenue potential is very vital for long time success. The same happened with my own African video startup AfricaMars TV. We from the beginning did not want to host user videos, because we thought Google was doing that for everyone in the World with Youtube. What we wanted to do was provide live video streams from African TV stations online.

Our Initial idea had lots of setbacks both infrastructure wise and biz dev wise. Then, after all the setbacks, we were forced to re-think how we were going about the whole project, then it hit us.. Boom!!! "Users don't want live streams (with a few exceptions like sports programming) on the Net, they want convenience. TV Anytime, anywhere."

When you look at all the Live TV streaming and User generated video sites that popped up between 2007 and 2008 and see how many of them have grown or gained usage anything close to what Netflix and Hulu have, you'll find out that there are none.. Once upon a time, there was Jhoost, Zattoo. Where are they now? Overshadowed by Hulu and Netflix like how Youtube overshadowed anything else including Dailymotion and Vimeo.

With all these at the back of our mind, we decided to carve a niche which we were already targeting but to do it differently, cost effectively and more convenient for the users.

We decided to go for TV shows, drama, news clips and movie clip streams on-demand. A model similar to that of Hulu but for African TV content. We believe this model is the way to go in-order to really solve a problem in the African entertainment market and not to jump into a very competitive market for user generated content or even a service whose market rarely exists.

So by going this way, the big question is, are we really in direct competition with Zoopy another African online TV service?

I think only time would tell but some regional factors may carve each service's niche for it. By the way, Zoopy is gradually broadening to a Global entertainment site while AfricaMars will focus more on African entertainment.

Is your product just another product's feature in the future?..

Recently, I read about location based services being just an added feature and not a full pledged product on itself in the very near future.. I believe we can say that about so many products, possibly many of Today's startups are just features in the not so far future.

With huge Internet monopolies like Google, Twitter, and Facebook, it's very easy for them to add a full product as just a feature iteration on their huge platforms. Also, most of the products that many startups are being built on these days are only features and once they get popular, they'll have to be integrated with larger platforms to gain any usage traction for them to become good business.

Apart from location based services, other startup/product types that could end up as features in other products in the future are collaboration tools. A good example is how Myspace swallowed Threadbox.

This list of products that are future's potential features goes on, including messaging services and so on...

So should you look into the glass ball to see if the product you have been killing yourself to bring to market will end up being copied and offered to millions of users as part of another product in the future? Well, this is really hard to say...

Whoever builds a startup is totally aware of the risks they are taking because whatever they are building is not guaranteed to bring results. With all the risk awareness, its still heart aching to see a big company take an idea that is genius and that you first developed to market just because they have more manpower and distribution to execute better and much faster than you and your small team.

This fact shouldn't stop you though from developing an innovative product even though it could possibly be taken from you. What you should do instead is work tirelessly and smartly to get the first mover advantage and once you gain traction, expand your product further by adding utility features and keeping your potential competitors on their toes. Also keep in mind there is always the pivot. If you are not doing well in a market, look at other potential use of the technology you've built and do a quick shift. The pivot also works when you build a product and find out your market doesn't exist or its too small.

Lastly, the ability of your product to be integrated into another product as a feature may be a blessing to you in disguise. Especially when you have competing big companies in that market space, it will turn out as a good thing for you because you'll most probably be approached and if you are lucky and your product is good you'll possibly get acquired by the big company.

From day one, you can put this in your exit plan or even start building a product just to be acquired and integrated as a feature into a larger company's product.