mobile + social: show us the money

Mobile + SocialShow us the Money!

Volker Hirsch (@vhirsch)

Casual Connect Europe, Hamburg - 11 Feb 2010

Who is this guy?

Co-Founder Strategy Advisor

Investment Opportunity: Little World Gifts(redefining digital gifts)OpportunityLittle World Gifts offers an appealing investment opportunity for investors seeking significant returns from early stage investment in

high growth markets. Little World Gifts is positioned to maximise returns through creating a new market for digital goods on mobile starting with the iPhone platform with deep web and social network

(Facebook) integration. The opportunity builds on the exciting landscape of the booming (yet still early and undeveloped) mobile

smartphone space, and the potentially enormous (and also early) digital goods space. With extremely low overheads and high margins, the company is set to turn over £2m in year 1, 50% of

which is profit. With a valuation of £2m (Year 1 profit x2), Little World Gifts is seeking £150,000 Angel investment ahead of launch in exchange for 10% equity in the business. This is an opportunity to get involved early in a

dynamic business at the very leading edge of both the digital goods, and the iPhone / mobile 2.0 sectors.

Enormous Market PotentialThe potential market for Little World Gifts is

large now, and growing rapidly. The Digital Goods Market will see exponential growth in

coming years, and whilst iPhone already has a strong customer base of content hungry consumers (70% of customers pay

on average $80/year) for content in the iTunes App Store), smart phone usage is set

to increase dramatically. Little World Gifts will be on 50% of smart phones by 2014.

Growth in Global Mobile Marketing SpendIn addition there is an increasing demand for mobile marketing

and for digital goods solutions (as a key part of a digital marketing strategy). Mobile will be more appealing and attract

increased marketing spend by brands. ($5.7bn in 2014).

Growth in Digital Goods MarketDigital Goods (and specifically gifts) have been popularised by services such as

QQ.com (China), Cyworld (South Korea), and Habbo Hotel and Facebook (Western Markets). The market is set to grow to

$6.5bn in 2013 and Little World Gifts is ideally placed to take advantage of the

interest in Digital Goods on mobile platforms.

2009 2010 2011 2012 2013 2014

$1.70bn$2.16bn

$5.70bn

$2.33B

$4.67B

$7B

2008 2009 2010 2011 2012 2013

USA Rest of World

Private & Confidential. Not for Distribution without Permission.© Copyright Kisky Netmedia Limited http://www.littleworldgifts.com

!

What is Social?

Social refers to the interaction of organisms with other organisms and to their collective co-existence [...]

Source: Wikipedia

Easy!

Get a social network! There’s loads of them...

NOT the Right Answer!

1.! A “social network” is not a community!

2. Do you own one?

Where to find a Community?

On Mobile!

Mobile is the most powerful digital medium to date.

Why?

1. It’s Big (numbers)2.It’s Personal (nature)3.It’s really personal

(Identification of needs)

1,700,000,000

4,600,000,000

1,800,000,000

2,250,000,000

Internet users (PC, Mobile, Web Cafe)

unique credit card holders

tooth brushes in use

mobile phone subscriptions

475,000,000circulation of newspapers

825,000,000registered cars

4,000,000,000FM Radios

various sources

Mobile is a 1st!

• Personal mass media• Always carried• Always on• Built-in billing system• Always present at the point of

creative impulse• Accurate audience identification• Captures social context• Enables Augmented Reality

Tomi Ahonen, Mobile as 7th of Mass Media, 2008;Alan Moore & Jonathan MacDonald, The Glittering

Allure of the Mobile Society, 2008

Significance to Users...

• 91% of people have their mobile within arm’s reach 24/7.

• 64% of Americans are not willing to share their mobile with anyone. 60% of married people will not share their mobile with their spouse!

• It takes an average of 26 h for a user to report a lost wallet but only 68 minutes to report a lost mobile phone.

Morgan Stanley 2007

Unisys Survey

Wired Magazine 2006

• 8 out of 10 German men would rather lose their wife than their mobile phone.

Jonathan MacDonald; Survey of 10 German men at 1am in a bar...

OK, it’s big, we get it.

But How do I convert that

into a community?

Prof Dr Karin Knorr-Cetina, Sociologist

Jyrri Engestrom,Founder Jaiku

Concept: Object-Centered Sociality

Easy: make sure that mobile levers the Social Object (that is: your game) towards Your Users...

My game a Social Object?

WTF ?

Human Value Drivers:

Human Value Drivers:

Hope

Belonging

Feeling Important

Security

Getting more out of Life

Money

Sex

WTF ?

CwF + RtB = BM!

Mike Masnick, TechDirt

Nine Inch Nails- All Music free under CC license.- All videos by fans aggregated on

website.- Free iPhone app: Fan Finder.

Limited Edition sold out in 30 hours !!!

$750k revenue in 30 hours, $2.3m in week 1.

- Double Album for $10- Deluxe Edition (Double Album + Photo

Book + BluRay + DVD) for $75- 2,500 limited edition signed luxury sets

(with Vinyl + prints) for $300

CwF

RtB

Connect With Fans + Reasons To Buy =

Business Model

Let’s recap: Social is interaction in context

Object

Engagement!Games are perfect for this!

- Gamers Interact.

- The game is the social object!

- Turn Players into Fanatics!

- Interact with them IN context, i.e. in the game!

- Let them interact between them (they have a common object!)

Address the unique propositions only

Mobile offers.

Value Levers: the 6 M’s.

Movement

Me

Multi-User

Machines

Money

Moment

Source: Tomi Ahonen

Mobile is a 1st!

• Personal mass media• Always carried• Always on• Built-in billing system• Always present at the point of

creative impulse• Accurate audience identification• Captures social context• Enables Augmented Reality

We need Tools

What

- Create Fanatics.

- Provide avenues for players’ passion.

- Incorporate players’ strongest community: his friends!

- Allow them Choice: if, when and where to share. Just offer the path.

- Keep it in context, i.e. in the game.

How

- High-Scores (Reward) but make them customizable (Relevant).

- Connect to the community (Avenues of Passion).

- Person-to-Person Challenges & Tournaments (Playful contextual interaction).

- Awards / Rewards (Fanatics).

- In-Game transactions & Virtual Currencies (Contextual Monetization).

Real Cross-promotion

- General ads disregard the power of context & relevance (“Spray-and-Pray”).

- Players = Fanatics = Ambassadors.

- recommendations by friends: most powerful promotion (74% buy on a friend’s recommendation)*.

- Promotions by friends in context are genuine cross-promotions. The tools are there (e.g. Challenges).

* Source: Bain Consulting

123,296,966,069,453

The Law of Big Numbers

One last thing:

The Mass Market is here:

don’t forgetthe “other”

smartphones!

Choose a tool that delivers all that.

Scoreloop does... ;-)

Scoreloop’s Core Social

- Customizable High-Scores

- Player-to-Player Challenges

- Recommendations to Friends (using any source available)

- Awards & Trophies

- Full virtual currency (supports in-app purchases, item downloads, dual currency)

- iPhone, Android, BREW, Symbian, Maemo, RIM, Web

Don’t forget:

Deliver on the basics.

On the outside...

And on the inside...

People Decide!1 - Permission

3 - Preference

2 - Privacy

People decide what they see and engage with.

People decide what content is relevant to them and when. Don’t make assumptions!

People decide what, when and where they share information.

Andrew Grill

So...Where’s the Money?

Where it always was:

in your pocket...

Catchy phrase nicked from Jonathan MacDonald

Summing up:

• Engage, don’t lecture.

• Observe the 3 P’s.

• Offer avenues to activate the player’s passion.

• Deliver, and in big numbers.

Got all that? You have a winner!

And if the user wins, the rest (incl. $$$) comes almost on its own...

Image Creditshttp://upload.wikimedia.org/wikipedia/commons/8/85/Numbers_grid_in_NY.jpg http://gapingvoidgallery.com http://upload.wikimedia.org/wikipedia/commons/e/e0/Petanque_players_in_Cannes_(France)_2003.jpg http://upload.wikimedia.org/wikipedia/commons/5/56/Bhgs_crowd.jpg https://svn-create.freedesktop.osuosl.org/public/create/docs/logo/images/light_bulb_off3.jpg http://www.easy-access.com/garagelo/coloring/tools.gif http://www.scorpioshoes.com/accessories-42/shoe-care-44/dr-martens-shoe-polish-black-8128.htm http://picasaweb.google.com/lh/photo/f-4eoJyuiitoJIPDaqrMJQ http://img.wallpaperstock.net:81/car-mechanics-wallpapers_11816_1024x768.jpg http://www.mixedforyou.com/fineart/Renaissance/Flying%20Machine,%20Leonardo%20da%20Vinci,%201490.jpg http://blogs.fayobserver.com/faytoz/files/2008/10/davinci_toothed_gears_original.jpg http://www.adsinn.com/wp-content/uploads/2008/01/1100109100-1.jpg http://adsoftheworld.com/files/images/video-game.jpg http://www.thealarmclock.com/euro/images/flirtomatic.png http://img.glu.com/WSOP_Mobile/images/WSOP_header_logo.png http://villageshow.co.uk/assets/images/trophy.jpg http://images.internetsafety.com/www/images-pm/safe-eyes-mobile-logo.jpg http://www.foldingbikehut.co.uk/images/Toolbox%20Travel.jpg

Thank you!

@vhirsch

http://vhirsch.com/blog

me@vhirsch.com

+44 7843 599 678