Modern Monopolies - book review

This book Modern Monopolies by Nicholson is a must-read for all entrepreneurs, start-ups, strategy heads of brands/ Products. It highlights the importance of being in platform business and how this impacts the growth of organisation, as most software companies are becoming commodities.

As you move towards chapters four, the author gives examples on successful platforms like Facebook, Twitter,  Android OS, AirBnB, Uber and reason behind their success. He also highlights platforms like Windows OS, BlackBerry OS, MySpace, Friendster, etc and why they failed or failing.

He furthers goes on to explain interesting shifts that are happening in the platform business. Earlier examples include iTunes during launch of iPod became the largest music company, but now people are shifting towards newer platforms like Spotify, Saavan, Gaana, etc.

Even when Amazon launched Audible platform, which became a market leader in it's category. But now new platforms like Storytel are offering ebook + Audio book + Regional at a monthly nominal subscription. Though subscription cost is higher but, this gives the customer freedom to choose and read / hear multiple books.

Here is the story which I loved from the book ans have copied as is, since it makes sense and easy to understand. Though many argue this is not a real story, but conclusion is important for learning.

An entrepreneur, tired of the long waits he is experiencing in his dentist’s office, decides that dentist offices are badly managed. So he designs and builds a comprehensive dentist office management system and brings it to market. The software is expensive, at $25,000 per year per dentist office, but it’s a hit anyway as dentists realize significant cost savings after deploying the system. The company, Dentasoft, grows quickly into a $100mm annual revenue business, goes public, and trades up to a billion dollar valuation.

Two young entrepreneurs graduate from college, and go to YC. They pitch PG on a low cost version of Dentasoft, which will be built on a modern software stock and include mobile apps for the dentist to remotely manage his office from the golf course. PG likes the idea and they are accepted into YC. Their company, Dent.io, gets their product in market quickly and prices it at $5,000 per year per office. Dentists like this new entrant and start switching over in droves. Dentasoft misses its quarter, citing competitive pressures, churn, and declining revenues. Dentasoft stock crashes. Meanwhile, Dent.io does a growth round from Sequoia and hires a CEO out of Workday.

Around this time, an open source community crops up to build an open source version of dental office software. This open source project is called DentOps. The project takes on real life as its leader, a former dentist turned socialist blogger and software developer named NitrousOxide, has a real agenda to disrupt the entire dental industry. A hosted version of DentOps called DentHub is launched and becomes very popular with forward thinking dentist offices that don’t want to be hostage to companies like Dentasoft and Dent.io anymore. 

Dentasoft is forced to file for bankruptcy protection while they restructure their $100mm debt round they took a year after going public. Dent.io’s board fires its CEO and begs the founders to come back and take control of the struggling company. NitrousOxide is featured on the cover of Wired as the man who disrupted the dental industry

Towards the end, the book explains how to identify true potential of your own product and how you can make the shift towards becoming a platform.

Software is a commodity, think platform.

You can click on this link to buy - 

Modern Monopolies @ Amazon

How to build spaceship - book review

How many of us know about early life of Peter Diamandis, founder of X prize, founder of Singularity university?
Then you shouldn't miss this book "How to make a spaceship: A band of renegades, an epic race and the birth of private space flight" by Julian Guthrie.

And this book is not only for people interested to build ROCKETS but for all those who DREAM.
Some interesting insights I gained from this book

• The shortest distance between two points is not a straight line when you travelling in a flight! As Earth is a sphere, round, in olden days pilots without gyroscope, would pull a rubber band between two points they are travelling and leave it, when the rubber band loses tension it returns to its curve position to give you the closest distance. 
• Sometimes the solutions is so obvious that we over think about it, which takes us far away from the solution. The SpaceshipOne flight had an outer varnish covering of Epoxy fluid, which helped to prevent it from overheating. But, Burt Rutan wanted to patent, so he literally added herbs and oregano and named it as some patented solution. 
• Peter Diamandis didn't have the $10 million prize to give away for X prize winner, but it didn't stop him from announcing this competition. After announcement he went on to pitch almost more than 60 to 70 entrepreneurs to sponsor it. Richard Branson meeting was the 60th meeting and even he rejected to sponsor. Quite, surprisingly, he was the one who finally invested and sponsored Spaceship One for $2 mn just before 2 weeks from final take off. 
• Peter Diamandis was a medical student since his parents wanted him to take up medicine. But he became astrophysicist from MIT before joining medical. It amazed me that he was running a company to make spacecraft for sub orbital flight, so people can experience zero gravity PLUS running Association for space Tourism across the world, had launched Space X prize and looking for sponsor + "studying medicine"

If you can dream Big, and work towards it with all your passion, their is no stopping.

This book was written by Julian Guthrie and After Spaceship 1 win the Ansari SpaceX prize, Stephen Hawking suggest  Peter Diamandis to write a book on this entire experience, so technically this a Peter's biography prior to start of Singularity University.

Everything you wanted to know about - INGREDIENT MARKETING

Ingredient - branding is creating a brand for an ingredient or component of a product, to project the high quality or performance of the ingredient. Ingredient-branding takes a special position in marketing, as it cannot be clearly allocated to either industrial or consumer goods

marketing as per Wikipedia. There are several companies whose only specialty is to assist their clients or play a key role in creating a better product with which they partner. Brands like ABS by BOSCH, Teflon, Intel and many others play a key role in the final overall product offered to the buyer. In short, an “ingredient” brand is used by a “host/mother” brand to partner or help established brand equity of the host brand.  To keep it simple “Ingredient brand is a brand within a brand”.

Buyers trust products which are transparent (showcase what ingredients have been used to make or manufacture them). Means it is no longer enough for ingredient brand to market itself just to product/brand manufacturers. But now needs to reach out to more and more consumers and establish themselves as key INGREDIENTS. It is much more important when consumers start ensuring the host product to sell along with the preferred ingredient. This lays importance to talk directly to the consumer through the power of ingredient branding

Brands who have used ingredient marketing - Dupont’s Teflon, Intel’s Intel Inside, Lycra for clothes by Rayon, ABS by Bosch Mobility, Dolby Stereo systems, etc.

"Intel Inside" was the first, and arguably the best, "ingredient" branding, let’s understand how this strategy helped a microprocessor brand. This campaign was targeted by B2B Company to B2C community, directly to buyers/consumers.

Before we understand the strategy, let’s first and foremost understand more about the company products. Intel makes an ingredient, MICROPROCESSORS or silicon chips for the computer industry. It doesn’t make the main dish, means computers. Consumers aren’t interested in ingredients like vanilla flavoring brand in ice cream or pastry, they are concerned about the final product. Intel doesn’t make or sell these products or chips directly to consumers. They make semiconductors, microprocessors chips found inside popular consumer electronic devices.

Microprocessor chips were an unknown component of PC for the end consumers. Intel was a market leader in microprocessor brand in the 1980s with the launch of microprocessor 286, 386 and 486. Soon competitors were catching up with Intel and it was getting tough to sustain. Intel realized that to remain a leader in business, it needs to enter the mind of Consumer and establish connect which can only be accomplished with emotional branding campaigns.

Based on initial research by INTEL, they identified what people think about the chips in the computers and how they relate to it. The consumers or buyers of PCs were never certain about the quality or reliability of the microprocessor chip which was a critical component. They were just interested in computers. Except for gamers, programmers, hardware specialists, scientists, and technology enthusiasts, hardly anyone was aware of the microprocessor, the computer was a mystery for rest.  Intel felt that microprocessor being a critical component of PC had an opportunity here to enter the consumer’s mind.

This led to the launching of the campaign “Intel Inside” they initiated tie – up with existing OEMs to partner. OEM partners were happy as whoever partnered received a 10% premium for “Intel Inside” products from end-consumers plus advertising support.

With this campaign ‘Intel’ logo started appearing at the end of the ad with a piece of specific music. That music became synonymous with Intel. The first thing everyone would remember from an event is the “Ending” part. The Intel music provides that pleasant sensation. Everyone could remember the Intel Logo and the sound.

With the launch of this campaign, other key market leaders from B2B product and service industry initiated similar fashion campaigns to establish INGREDIENT products. We saw TEFLON campaign for non – stick cookware, ABS by Bosch for automobiles, Dolby stereo for cinema halls and music industry.

What we learned?

1. The person who buys your product may not be the person who uses or benefits from your product. Think about marketing to the end user.
2. Don’t be ashamed of being an ingredient or a small part of a larger product. In fact, use it to your advantage!
3. Technology can be complicated. Keep the message simple. Intel makes your device faster! Focus your marketing on the benefits of your product not the features of your product.