I was reading this article in the WSJ today about how some discount websites are being accused of inflating the regular price of an item in order to make the discount amount seem more significant.
In one example:
“Members-only site Beyond the Rack offered a pair of suede Adalene pumps from the two-year-old designer label Pour La [...]
Categories: Internet
I’ve been thinking about customer acquisition cost a lot lately. From an economics standpoint, most startups seeking explosive growth (including Proper Cloth) are seeking one thing: customer acquisition cost < customer value.
(Theoretically) when this is realized, the startup can quickly scale by “buying” more customers, making a profit on each one.
Proving that you’ve achieved this [...]
You’ve probably already read Chris Anderson’s new article The Economics of Giving it Away. A nice summary was put also put together by Dharmesh Shah at OnStartups.
I generally agree with the direction that Chris Anderson sees things going. The marginal cost of a web service is getting smaller. The freemium business model makes [...]
Categories: Internet, Startups
Tagged: Business Model, Chris Anderson, Economics, Free, Profitable, Startups, Sustainable
Does the paradox of choice doom mass customization? A search on the above phrase shows that a lot of marketers believe mass customization is a doomed concept with the headlines: Mass Customization Maybe Offers Too Many Choices, Spoiled for Choice: Consumer Confusion in Internet Based Mass Customization, The Mass Customization Paradox, and When Less is [...]
Categories: Internet, mass-customization
Tagged: , mass-customization, Paradox of Choice
I’ve been talking with several people working on internet businesses recently, and it’s always the same story: If we build a website that does (insert whatever perceived problem they are solving), then we can make (X dollars) every time a customer uses our wonderful service.
What they fail to think through is the cost of getting [...]
Categories: Internet, Startups
Tagged: Conversion Rate, Customer Acquisition Cost, Pay per click
There is some interesting research coming out of MIT (professor Glen Urban) that I think will eventually be relevant to behavioral ad targeting. The research recognizes that different people, in different contexts have different cognitive styles.
Cognitive styles can be measured across several different dimensions. Some examples include: impulsive (makes decisions quickly) vs. deliberative (explores [...]
Tagged: Cognitive Style, Conversion Rate, Glan Urban, Internet Marketing, Targeted Advertising, Website design
It seems that every web 2.0 start up today is striving to become a “platform”. Obvious examples are Facebook and Twitter. By building a product that othercompanies will build their businesses on top of, a company could become an irreplaceable part of the internet’s architecture. Microsoft Windows is a great example of this working [...]
Categories: Internet, Social Networks
Tagged: Facebook, Google, Internet, Outsourcing, Platform, Twitter, Web Services
I’m convinced that the emergence of product search engines is having an affect on the value of brands, and thus creating opportunities for smaller players to succeed.
Consider air travel. Eight years ago, when I wanted to fly from San Diego to Boston, I was pretty internet savvy, and would go online to buy my ticket. [...]
Categories: Internet
Tagged: Brand, Kayak.com, Pricegrabber.com, Product Search, Vertical Search
New Market Strategies for Disruption
New market strategies for disruption are different than low-end disruptive strategies. Instead of simply entering the market with a lower cost, lower performance product, new market strategies involve “coming off the backplane” into a new market.
An example of a new market disruptive innovation is Sony’s portable transistor radio. When originally released, [...]
Categories: Internet, Startups
Tagged: , 4info, Babajob, Baidu, Christensen, Disruption, Google, New Market, Web
Introduction to the Innovators Dilemma
In the Innovators Dilemma and the Innovators Solution, Clayton Christensen creates a framework explaining how established companies, with large amounts of capital and loyal customer bases, are disrupted and eventually replaced by smaller companies with little capital and no customer base. This model of disruption introduces several insightful concepts, but fundamentally [...]
Categories: Internet, Social Networks, Startups
Tagged: Advertising, All Advantage, Anderson, Christensen, Disruption, Flickr, Freemium, Innovators Dillema, Pandora, Skype