Technology in Emerging Markets: Why We Should Care

A post I wrote for mobile, web and Facebook development shop, BNOTIONS, in which I am the Director of Marketing.

We often think of the developed world as the catalyst for technological innovation, as it is an expected daily part of our lives. We wake up and check our email, we read the newspaper online, we make coffee in an automatic coffee maker and microwave our donut. We go to the gym filled with exercise machines, on to the Starbucks where we pay by mobile smart phones, then to work where we sit at our desk in front of a computer surrounded by monitors, keyboards, smart phones, tablets, and every other mainstream device that we take for granted. But what if you were to suddenly move to an emerging country? A BRIC country or perhaps one of the ‘Next 11′ (also coined by Jim O’Neill). How would your interaction with technology change? And, would you feel like you were surrounded by less innovation?

In our developed world bubble, we are surrounded by the notion that technological innovation is our fine oiled machine. But, as the world is quickly changing, we are seeing a major uprising in technological innovation from within developing countries, that is now emerging in developed countries. ‘Reverse Innovation‘ is the term created by Vijay Govindarajan, and the title of his latest book explaining the ‘phenomenon.’ “The Future is Far From Home: Innovating for emerging markets, rather than simply exporting, can unlock a world of opportunities for multinationals,” reads the title of the first chapter. In the book, Govindarajan reminds us that emerging countries are not the technology landscape of our developed worlds from the past, but rather their own innovation hubs. Emerging countries are completely different technological landscapes with differing demographics, needs and cultures; yet still in this same day and age (yes, 2012).

It is an innovation insight that perks up our ears, as we, as technologists, often look to solve developed world needs; as they seem like the most guaranteed ROI. Although, the world is shifting, according to economic turbulence, but mainly through demographics. Emerging countries are expected to have the largest population of young adults, with India leading in the age demographic of 20-30 year olds by 2050 (Harry S. Dent). This is the age demographic that has historically led to the most innovation in economies and technological advancement, states Harry S. Dent Jr., an economist in his best selling book, The Great Depression Ahead. The book shows an optimist outlook for emerging countries in South America and many of the ‘Next 11′ based on youth demographics for technological change.

“By 2020 [global corporation], Unilver expects developing markets to account for 70% of total sales, with about two-thirds of that coming from growth in the overall size of those markets and the other third from an increase in Unilever’s share of those expanding markets,” reads this week’s Economist in an article titled, ‘Fighting for the next billion shoppers.’ Global corporations have been capitalizing on emerging markets for many decades, further understanding the need for specific innovation and advancement for this huge population, yet this concept has recently come to mainstream awareness and fruition. The Economist article, outlines the race between Proctor & Gamble’s emerging market expansion and Unilver’s lead in developing markets in showing the corporate fight to capture the emerging world demographic, which proves a larger pool of buyers with much different needs then the developed world. As Harry S. Dent Jr. convinces us of a large demographical pool for emerging markets, Unilever validates it with real world examples of innovation and market segmentation with successful development from within emerging markets.

Although, going back to Govindarajan’s concept of reverse innovation (innovation specific to emerging markets that later becomes useful in developed countries), it is these major global corporations like Proctor & Gamble and Unilever, that have seen this opportunity and acted accordingly; but it does not mean there is not room for smaller companies, as well as global corporations. Govindarajan points out companies like the Tata car manufacturer, Imecho (a Chinese smart device developed before mainstream smart phone adoption in the US), the Logitech 2.4-GHz mouse priced at &19.99, and Mahindra & Mahindra’s tractors, to show a diverse bunch of companies looking at emerging markets for innovation inspiration.

From the perspective of technology that we work with here at BNOTIONS, mobile applications and mobile innovation is definitely something we think about as far as emerging markets. KPCB released a report earlier this year showing that mobile traffic in India has effectively replaced desktop internet traffic, which furthers our hypothesis that the applications we are building in-house (and even for clients) will need to keep emerging market needs within the strategy. In fact, a current project (a social game) that we are building is something we intend to test in differing international markets as we keep an eye on the global mobile landscape. This is not to say that BNOTIONS is positioning within emerging markets or even that we build for clients in emerging markets, but rather that we believe the economic development and innovation in other markets is certainly something to take note of, as we move forward.

A little food for thought really, as the world keeps evolving and innovating, it seems silly to forget about the others.



10 Ways to Monetize Mobile Apps

At the Android NFC hack, I stumbled upon this while researching ideas for use cases. It doesn’t solve the ‘idea’ problem to begin the hack session, but it is a great black and white outline of the current models for monetizing mobile; something we are all thinking about these days. Here is a ‘to-the-point’ outline from Dave Stevenson.

10 Ways to Monetize Mobil Apps

  1. Paid
  2. Advertising
  3. In-App Purchases
  4. Webapp Subscriptions
  5. Subscriptions
  6. Sponsorships/Promotions
  7. Lead Gen
  8. Affiliate Sales
  9. Analytics
  10. Don’t    (I prefer to reword this into donate…Louis CK mastered this)

The Copycat Dilemma

I wrote this post for the BNOTIONS blog after being inspired by many Toronto based copycats, which made me wonder who else is doing this around the world.

“Berlin, at first glance, a strange place for the kind of ruthless business execution for which Oliver Samwer is famous,” writes Inc. magazine’s Max Chafkin in this month’s article, The Sincerest Form of Flattery, highlighting copycat tech startups overseas in which billionaire entrepreneur, Samwer is famous. The article’s abstract reads “Now they [Samwer and like-minded entrepreneurs] knock off online shoe sellers, daily-deal sites, and any other Internet-based business you can name. Is there something wrong with that? Or is it just a fact of business in a connected world?” Questions that lead us to wonder whether or not the new model to technology success in business still commends authentic innovation over emulated execution? Inside a company building technology and incubating startups, I had to dig deeper.

I spent the weekend in the Toronto sun chatting with two Groupon competitors, Buytopia and DealFind, of chance networked encounters. A friend of mine introduced me to each with reasons other than networking with fellow tech industry people. Both in the top 5 of Canada’s online coupon industry (DealFind is currently number one), could be considered Groupon copycats. But the market is big, even as neighbors to the US (the home of Groupon, the major innovation leader in the space in the US), has made me wonder how lucrative copycat industries are. At BNOTIONS we spend so much time thinking about innovation and authenticity, it is hard to imagine ourselves building platforms specifically designed to copycat.

That being said, it is hard to ignore the thought of competitive advantage of like-companies when outside the birthplace of the ‘idea.’ In Russia, top search engine Yandex and in China top search engine Baidu relish in their true understanding of their local market, in which Google has been unable to yet conquer. Is a local understanding and connection a competitive advantage, even in an industry so hyper globally connected?

With over 800 million users on Facebook globally, it would be tough to argue a local advantage in global technology. Although, in most traditional industries localized concentration within larger corporations has been a more successful tactic in conquering majority share amongst markets (shown through Decide & Deliver by Blenko & co. of Bain & Co.). With a growing market share in the US, we at BNOTIONS even decided to open an NYC office to be closer to our US customers. Even in an age of digital communication, understanding a local market and becoming embedded within, has a lot of value. Meeting customers face-to-face, understanding cultural differences, and showing a respect for local business practices is something copycat entrepreneurs like Samwer (behind Airbnb, Stella & Dot, Zappos, Groupon, and many other big name technology startups in Europe and the East) has proved that this creates openings in markets.

Local entrpreneur here in Toronto, Alyssa Richard (and friend of BNOTIONS) of runs what she has often referred to as “the of Canada.” She is not an intentional copycat, as she saw the opening in the Canadian market for a specific Canadian mortgage comparison website that had not yet tapped. She built her ‘like’ company based on product need in an open marketplace, with few Canadian competitors, in which she felt she could conquer, local to her.

In fact, this mentality is exactly how I feel competitors should enter the market. The mentality behind our in-house startup, Atendy, an event registration platform who is, in many ways a competitor to Eventbrite; that having a slightly different approach with a product that you ‘perceive’ as better makes you competitive, not necessarily a copycat. When looking at competing, an entrepreneur’s first question is usually whether or not they can do it better, in their market.

With only two thirds market share in the US, the company birthplace, Google has plenty of US copycat competitors. That being said, it has, in many ways, driven them to build better products faster, as well as expand quicker. Google has over “85% of queries in Europe” (The Economist) showing that maybe traditional conventions of knowing your market better and being local aren’t necessarily true. But at the same time, if you are a copycat (exact clone) in another market, like Samwer, it just might be. Arguments can show positives on either side of the debate between copycats in different countries and authentic innovation expanded.

All in all, I could not deduce a positive or negative response to the copycat craze in the technology industry. The game of execution is in many ways most of the entrepreneurial battle. In the words of Eric Reis, “executing the wrong idea well, is just as bad as not executing the right idea.” At BNOTIONS, we do not strive to copycat, but if we see an idea worth building on, we won’t be shy.


The Facebook IPO, Development, & the Future

The big Facebook IPO has us all talking. As the shares drop like a rock this week, an argument of the floor price occupies office water coolers everywhere. But, what troubled us most was not the current falling stock, but rather, a comment from one of our top Android developers here at BNOTIONS, regarding building within Facebook.

As you know, we build a lot of technology through the Facebook API, so worrisome Facebook sentiment has more than traders stressed this week. During a project meeting this morning, our developer (who we will remain unnamed as he is damn good and we don’t want anyone else wining and dining him) stated “I think we should not only have the Facebook login, we should have another option to guarantee longevity. We can’t guarantee that Facebook will be around forever.” (Just like we couldn’t guarantee that great shows like Friends would ever go off air).

It was a statement that stopped the crew short. As Facebook has thoroughly announced they are only 10% built (a statement backed up from our close network with Facebook)— this would imply a long runway. With their initial launch in 2004, 10% up to the recent IPO leaves us with 80 years for the other 90% of the whole to follow. As a developer, I think that is a very decent runway, as far as product lifecycle (if anything, excessive in a high tech world when taking into account Moore’s Law).

But our ‘unnamed’ developer has a strong point, negative sentiment around the Facebook brand due to the falling IPO shares can translate in many different ways. If people don’t trust or believe in the brand, there is always a negative impact in more ways than trading on the public market. Concerned stock brokers, concerned developers, and concerned marketers (GM Doesn’t “Like” Facebook, Drops Ads), are a major part of the Facebook ecosystem— all with a current pretense of concern. After all, they are the people behind Facebook’s current revenue, not the users.

But, with eyeballs, you create value. At least, this is the belief in Silicon Valley. In many ways, we believe this too. After all, the people who use our products are who we care about most, as they give us the reason to do what we do. In Facebook’s case, this is no different, except that when you build a corporate behemoth, revenue starts to really matter. Therefore, the people who provide that revenue stream, matter… a lot.

The question we had this morning after our concerned developers comment was whether this is just a statement of timing or a real concern for us as Facebook developers (revenue providers)? In light of the question, we took a look at the social media IPO’s that kicked off the initial social frenzy. Looking back, we get a lot of commentary regarding the dotcom bubble, although, we don’t currently much resemble it (some aspect, yes).

Of the social web, Linkedin kicked off the social IPO with a healthy start rising “171 percent in their first day of trading,” according to Reuters, May 19, 2011 NYSE debut release. Although, not as triumphant as Linkedin, Zynga found themselves “from a $20B valuation to $8.9B in five months (Venture Beat, Kyle Orland),” perhaps a trajectory path Facebook is more likely to follow. Although, Zynga holds a lot of cash for reinvestment, something many investors would say more valuable than the current Zynga price depicts. But neither of these past events can give us an accurate look at Facebook’s future of concerns, as they are all drastically differing companies for the most part.

Since we don’t exactly know all that is going on in Facebook, as far as development strategy, we decided looking at the others was not necessarily an accurate depiction of what is to come. Is Facebook going out of business? Certainly not. Will we stop developing on Facebook? Certainly not. Upon, looking at the others, the only conclusion we perhaps reached is that this ride may be volatile, not that Facebook will not be a powerful brand for many, many years to come (double negative grammatically, makes a positive…)

Jenna Hannon | Director of Marketing | @JennaHannon


© Copyright 2013, All Rights Reserved Jenna Hannon