Are smartphones actually the first robots?

A Smartphone can do many things, beside being a phone, game console and a web terminal. It can do things that no previous device could. Some are quite simple, like knowing where it is - well, as simple as a connection to a global space based positioning system could be - I'm always amazed of how naturally we take such things - anyway, the phone can do this, but can also, for instance, understand spoken languish or recognize a typical phone-to-ear movement. Both of the above (quite impressive) features are part of Apple's Siri - used by my brother to tell his smartphone things such as "Remind me to turn on the water heater when I get home". 

So Siri listens to my brother's voice (not an easy task), understands what he said (with a little help from server-friends), traces his location, and reminds him to turn on the heater when he gets home. If Siri had fingers, she'd turn it on herself - and actually, all you have to do is to get your heater an IP address, and Siri will turn it on, too.

So you verbally describe a task to a computerized device, like a small companion you carry with you. It listens and complies - by communicating with you, other people and machines.

Sounds like robots to me (: Hey, what do they need to walk for? It's a beginning, sure. But we can already see that the online Smartphone is a whole new device, that could lead to even greater revolution than personal computing. It's not about information anymore. Not even about interaction. We're starting to actually expending the reality sensing and interpretation by human... with the help of metal pals, and they're getting smarter by the second. No three rules are needed. Billions of people already on board. Great, really.

(And yes, I do think that Picalogo is one of the first truly robotic features... :)

U.S. Coupons: Distribution cost 250% of Face value?!...

I might be making a fool of myself here, and would be happy (or, as you'll see, maybe not too happy business-wise, but still - would like to) hear corrections by coupons/promotional marketing experts - and as happy to get links to a wider coupon market research than what my amateur Googling efforts resulted.

Anyway, it seem to me that an actual U.S coupon distribution cost is more than double than it's Average Face Value - and almost 200 times of the coupon production/distribution cost. Here goes:

      - The cheapest coupon channel in the U.S. is FSI (Free Standing Insert), via Shared ("Junk") mail - or Newspapers. The distribution cost per 1,000 (CPM). is $5-$60 - or $0.005 to $0.06 per single distributed coupon.

       - Any other distribution will cost much more. Direct mail, for instance, costs $0.40-$1.50 per single postcard - or up to $1,500 CPM.

        - Coupons have to be printed. Basic printing cost is $10-$20 per 1,000, or $0.01-$0.02 per coupon.

         - And here's the main point: Average FSI redemption is 0.57%! It means that only one of about 175 distributed coupons is redeemed.

So? Let's take some minimal per-coupon costs into consideration. Say:

$0.01 for printing
$0.01 ($10 CPM) for Shared Mail/Newspaper distribution

Total is two cents. Doesn't sound much, ah?

Now, let's imply the 0.57% redemption rate - or double the two cents by 175 - and we're getting $3.5 per redeemed coupon. That's over twice as much as the $1.43 average U.S. coupon Face Value! 

And no, as you can see in the chart below - no other common coupon delivery method is cheaper. On the contrary.

Considering the above outrageous cost, and contemporary coupon delivery methods in development and/or currently on offer, this looks like business opportunity - ask ShopKick, they'll tell you. But does it worth the effort? Is there enough market, even at much lower cost? Well, over 330 Billion coupons are distributed annually in the U.S. Let's take the minimal cost of 2 cents per coupon - we're talking $6 Billion a year, easy - actually substantially more, since many of those coupons are distributed at much higher CPM than our junk mail friends. So the answer is - yes, there is. Definitely worth the trouble.

As some of you know, one of the main features of Picalogo (www.picalogo.com) is coupon delivery merely by taking a picture of the business logo - faster, easier and more idiot-proof than anything on this emerging market. If you're in this (or some relevant) business - contact us. We're just getting out of the shallow Bootstrapping waters, are looking for partners - and will go a long way to start and establish ourselves as a leading coupon delivery solution.

marketing@picalogo.com

Twitter is Family guy

What is the recipe for a hit TV show? No need for special technologies or production skills. Those are commodities. So is the marketing, really. The path is known: A low-budget (our days, sometimes, zero budget) pilot is made, presented to the audience, then continuing (or not) by the reactions. The bootstrapping version would be just making episode after episode, stream them, buzz as much as you can and hope for the best. Revenues? Ads delivered to the content consumers. Exit strategy? Selling the format/rights to some media giant.

How about a social app like Foursquare, or even a social platform like Facebook? Well, like a successful TV show, a good idea was needed. Something cool. Say, a show about nothing. You'd want a great launch team, such as the amazing David/Seinfeld. All the rest can be bought, once the concept was proved.

So? No technology. The only IP is the barely-defendable idea. Talents are a must. Ads revenues, possibly fast exit path. TV show, social app. Cleveland Brown, Facebook. Cleveland's Facebook. We're not IBM, guys. Not trying to be. Yet - a social app could be a smash hit, giving a YouTube-type returns for early partners. Not too many technological ventures were sold for $1.5B, less than 2 years post launch, right? Current ROI for early Facebook and Tweeter investors are not far (even if, alas, are yet harder to cash).

No business like the show business, you know. In SF as much as in LA.

Christmas in Tel Aviv

I've always liked Tel Aviv. During my 40 years or so of living in Jerusalem, I came here as often as I could - lived here during my army years (that's a story worth telling, in some future post, as we lived in quite weird places, I'll never forget getting up to take a shower every morning, I had to, was a soldier, they would have court martial me is I was late - walking in front a raw of women with sawing machines, it was a sweatshop on some sort, over General Alenby street, looking at me blankly like pigeons - me and my girlfriend at the time rented a room there, for $100/month if I'm not mistaken - and this was not the worst setting we've found ourselves in back then, not by far) - anyway, I've worked here too, the office of inter8ing, my previous startup, was at Tel Aviv harbor, so were most of my business meetings before and after, came to the city on every chance I had. It's a great place.

During the last decade or so, I've also developed a very deep sympathy for the sea. Not swimming pools, mind - I don't know, just hate those, with the typical smell and the people swimming, all wearing the expressions of someone who had just peed - did you see the South Park episode? But I do love the sea. And the beach. It's very sandy, sunny, really nice. During the summer before last I went there almost daily. Got myself goggles, and - well, didn't really swim, but went like 100 meters off the shore and floated there happily, it's unbelievable how well can you float, even over high waves. And the funny thing is, if you go past the raw of people near shore, just at the point where they can still stand (and, says the little Eric Cartman inside, pee on each other happily) - there's, like, nobody. The sea is empty. I swim in a little, and then you can hardly even hear the sounds of the crowd over the waves, not so much, it becomes like a white noise, and the beach is really crowded during the summer - when I float there, I'm on my own. All alone. I took my two middle boys with me on weekends, the eldest wouldn't dome, they love it too - and at my favorite beach the lifeguard lets me take them deep, we swim around and play, separated from the masses by 50 yards of water in which they fear to trade. The whole thing is really beautiful.

But then, in 2010, October came, and I had to give up the sea for the whole winter time, until June or something. Didn't even go to the beach. What for. Was just looking at the water miserably, waiting for them to warm, like an old lady for her bath. This year, I thought I might change my ways - read about winter swimming - learned that the water temperature here is considered not half bad, and that in general, the waves are lower during the winter(!) - and that some old people are coming to swim at 6 am or something, never awake on such hours - so I got a wetsuit from Amazon, and just went to the sea. I go twice or three times a week, not every day. I always miss the winter lifeguards, they're there until 1:30 or so and I always have morning stuff to do, so it's always a little bit scary, nobody watches me -and I have to run a mile before getting in, so it won't be too cold. I still can't really swim. Never learned. I advance somehow in the water, for 20 minutes or so, then take my bicycles back to the office, it's funny, going through the streets with the suit (which is quite wet at this point, really). When in, the water are crisply cold, very clear. Migratory birds, not too many people (though some bikini clad Europeans tend to be around, if even half sunny). Beside the surfers I'm almost always the only one in the water. Either I'm crazy for being there, or the whole town is for not coming too.

APIs, APIs - The day the IP died

The first thing that many investors will ask you -  I've funded a one-man-show startup from scratch, had my doze of investors of all kinds, from small time brokers to a breakfast with another 15 Israeli web startup CEOs and Michael Moritz, not to mention many one-on-ones with angry looking GPs - is: "What could be the Barrier to Entry for a non-technological startup?" They know the answer, we know it. It going on for years. They ask about the IP. What will you do if evil Googlers will clone you, just like that, with all their evil engineers with evil t-shirts - and the doors at their campus won't open if you're not tagged, and they have like a hundred yards of freezers, full with free ice-cream bars for the Googlers, and they have, like, a real spacecraft hanging from the ceiling - so what's the IP, they ask. How will you defend yourself. And I say the same things, eyes half closed. Over and over again. Venture after venture. Year after year. Something like:

Take a look at YouTube, what do you see?

Sold for billions of dollars. So? where's the IP?

Encoding? Decoding? Oh, that's almost free

Find it hard to believe? Download VLC!

Some great technologies, very hard, expensive to develop, maintain and operate, are offered for free: Video streaming, Multimedia conferencing, Satellite based positioning, Instant global publishing, the Web itself, a fast global connection for a flat/no fee... All those and many others are free to use, directly or through APIs. Infrastructures, if you want. We take those science fiction techs for granted - ever walked with your Smartphone in hand, following a compassed Google map, holding the phone before you like Harry Potter's wand? Some are highly valued by the market (remember the evil Googlers?) - but most are just, you know, free stuff. Open source. Satellites launched by the friendly government for the benefit of the ungrateful public and mega-gicks doing their best to serve the (grateful) community. This is heaven. I mean it. On such structure you can build some truly cool stuff.

On the other hand: Facebook, Twitter, Zinga, Groupon, Foursquare. Gmail. Again, the list is endless. Good UI/UX, cool. Great platforms, really. I love them and use many of them. No technology to mention, no barrier to entry. Much less if we're talking mobile apps. Sky high valuations - you go, wow. Why? people liked them, buzzed about them, thought they're really cool. They were marketed right. Yes. Just like a TV show. Technology had almost nothing to to with it. Barrier to entry? Ha. If you can produce, you're in - actually, if you can fund or otherwise motivate professional production. It's a commodity nowadays. You can buy well-made apps anywhere from SF to Bangalore. As with broadcast, it's now all about talents and marketers involved.

Mix in the API factor. In this post by Hillel Fuld, he's wondering how come there is no app to update all social services by user preference, via the offered APIs - and hey, almost anyone offers an API, from Facebook to the smallest startups. But then, will you base your app on an API, asks the wise - the one from above, with his Barrier to entry and annoyed look - the chance for the evil... Facebookers, lets say this time, to clone you is even better! They will eat you alive, as easy as Polly would have a cracker.

But this never happens, you know. The large players will buy you if they want you. Other startups have their own ideas (very dear to them! like little sweet babies. Try and argue with any co-founder, he'll bite your head off) - so even if those apps don't need a unique technology anymore than the Seinfeld team needed one - still, I suspect that's the main reason for us not seeing loads and loads of multi-API based thingies. Those are hard to fund. Extremely cheap to develop, high risk and potential, could boom like magic if are truly cool - but hey. No IP.

So, how can you raise seed and partners for a new app - That will check you in to Foursquare and Facebook while grabbing realtime coupons - By taking a picture of the business logo? It's not a theoretical question. We did just that, all the way into the app store. Picalogo - www.picalogo.com - uses APIs by Google, Facebook, Foursquare, Apple (and few others, ho ho ho) to dramatically shorten the business-specific location process, avoiding the long venue lists scrolling. Where's our technological IP? We smile in the face of the investors and say, there is none, then explain that we have our propitiatory logo DBs, then the initial user-base etc, but the fact is that if we were indeed attacked by a Silicon valley giant, there isn't much that we could have done, we'd be cloned to the ground in one punch (but they'd rather buy us, as said). What I can not say at the - mostly over-designed - VCs offices, but can say here: Dear investor, angel and institutional alike - If you're looking for barriers to entry and protectable technology, don't even consider investing in mobile or web apps. It's not for you. You wouldn't put a penny into FarmVille, at the time, right? So there.

My first English blog ever

I've had quite a few blogs in the past, in quite a few nicks - one of them, believe it or not, even starred at the top Israeli blogs list for few months, but I'll never confess the filthy name of this one or it's fabricated dark blogger. I even had, 10 years ago, the questionable pleasure of publishing a novel by a highly respectable publishing house, and it was edited by a well-known author, then by the head of literature at TLV university, then by a languish editor, then it was PRed, then actually printed - the whole process took over two years, and wasn't the best of experiences. I think that I like blogging mush better. But I've never wrote anything but business mails and executive summaries (and presentations, loads of those, I've once raised $0.5M for a non technological startup, but more about that later) in english, a fact that might be considered as a blessing by some, considering the nature of some of my hebrew texts, and the rare extent of the lameness of my english - anyhow, it's my first blog in English. Deal with it.

I live in Tel Aviv with a much nicer (and prettier) wife & business partner than I deserve, @arialabeniluz, plus four (amazing, says the father) sons, and now sitting at a 24h coffee shop that supplies electricity (and allegedly also wifi, but it's never works) for laptopers, I like working in such places, drinking Arak, it's a kind of an Anise arab drink, with ice. We moved from Jerusalem almost two years ago, and I adore the city. Tel Aviv, I mean. Always did, worked here also when was living in Jerusalem, well - most of the time. When I've tried to ran a coffee shop of my own, I've never leaved the town. Never, never try to open a coffee shop. I was selling great sandwiches, like really. Great. Best Focaccia bread in town, so help me god. Sourdough and everything. 80 grams of imported salmon, fresh. Flown in from Norway twice a week. Creamcheese by a boutique dairy. Those were damn good sandwiches, I tell you. Not far was a chain coffee shop branch, selling like 50 grams of shitty frozen smoked lax in some stupid industrial bread, for 50% more the price. Now, ok. They'd go first for the known brand. Accepted. But they came, ate our sandwich, then kept going back to the frozen one. We had the nicest garden, under an 80 year old mulberry tree and a water fountain, no less. It was the garden of the richest person in Jerusalem, prior to 48. And they still wanted the ugly expensive sandwich. We went like, agrrrhhh.... Let's leave the food business to our superiors, people who could actually guess what the masses would eat. It's back to high-tech for us.

Yes, that's my original field, high-tech, web and mobile apps, Mac stuff, this kind of things. I meant to write about that, but got carried away with the salmon. People deserve what they eat, what can I tell you. I want to write here about food, too, anyhow. I like eating very much - maybe some Israeli food reviews for the english speakers could help. Getting late, though. In a nutshell: I'm holding a branch of the 40yo family business, Swed's masters workshop, it Tel Aviv. We're selling the most expensive Judaica in the world, like tens of thousands for a piece, by order only. Regardless, bootstrapped a revolutionary checkin tool, Picalogo, to the Apple store, and co-founded at a startup that will sometime make your trip to a theme park much nicer, Qendix. Don't be too exited, none of those is funded, and times are harsh. But more about that later. Meantime, the sea is the sea, even at winter times - if you have a wetsuit. Literally, I mean, not as a metaphor. Got one from amazon.