Monthly Archives: November 2011

Big Box retailers are Amazon showrooms

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[Updated 6/24/12]

Big Box retailers are Internet showrooms – people increasingly come in to try out a product and then order online, usually from Amazon. Best Buy is making sure to leave manufacturer bar codes off of their displays, instead using a custom QR code which drives the shopper to BestBuy.com (of course this is nothing compared to their 2007 use of a fake website to convince in-store shoppers that the Internet prices has increased since last time they price compared).

Let’s assume that in-store price comparison is only going to rise with smartphone usage and comparison apps. What’s a store to do? Well how about blocking data services so that it’s harder to shoppers to use their smartphones. Obviously that would send people into an uproar. So how about another solution: create an awesome free wifi network in-store and the “cost” of using it, is that it appends an affiliate code to the shopper’s purchase at 3rd parties – ie if you look at BestBuy but buy the item at Amazon, at least BB will make a 6% affiliate fee. The store could do this on the mobile browser and also send you an email w a link to the item, a price comparison and links to other retailers — all w/ an affiliate code attached.

Here’s how it might play out:

  • Consumers who don’t price compare = no impact, still shop at retailer
  • Consumers who want to buy it now = no impact, still shop at retailer
  • Items where the store is price competitive = no impact, still bought at retailer
  • Items where the store is not price competitive = collect affiliate fee instead of no sale
  • Consumers who are very price/tech savvy = might be encouraged to visit retailer giving the store a chance to (a) sell them something and (b) collect their info via in-store wifi for future marketing
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Update 6/24/12: WSJ is reporting that stores/malls are installing wi-fi networks to allow shoppers to get online more easily, then using the service to track them and send targeted ads.

Top angels/VCs sound off on celebrity investing

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I believe celebrities as angel investors can add value. What do some of the top angels and VCs believe? I asked several if they would hesitate to coinvest with a celebrity.


and Greylock Partner David Sze might have a mistaken view of who the world considers to be a celebrity 😉 — “no. I’d invest with and  all day! ;)”

Celebrity Angels

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Some might snicker upon hearing that Disney singer/actress Selena Gomez has Angel invested in a photo app but I think it’s great and makes total sense. The trend of ‘celebrity angels’ doesn’t surprise me at all and with correct expectations on both sides, it can be a clear win-win. Why are we seeing celebrities become more involved in tech investing?

1. Technology is approachable & hot
We forget that any celebrity under the age of 30 isn’t too different from any of us. They grew up in a world of mobile phones, game consoles, the Internet, etc. They are digital natives who use technology as professionals and people. Investor Peter Lynch once suggested that most of his great ideas came from walking around a mall and seeing where people were shopping. Well, celebrities are much the same way – they see what technologies their fans are using, their managers are showing them the latest and greatest, companies are sending freebies. I’d be more skeptical if Justin Timberlake was studying up on currency hedging than believing he has an insight or two into how to turn around MySpace.
2. Celebrities now have direct connections with their fans
Before Facebook, Twitter, Google+, etc brand endorsements by celebrities essentially meant a TV commercial or billboard featuring the face of a movie star or musician. The conversion event (buying the product) was still separated from the advertising – you needed to later decide to drive to a store and recall that Halle Berry thinks Revlon is swell. Now an influencer can often drive a conversion event directly and efficiently through social media. A tweet from a celebrity drives more product trial than an article in a major newspaper. It’s the new PR, the new sales channel. And celebrities are empowered like never before to directly build and talk to their audience. So for products they believe in why not move upstream and invest in the entity itself. Sort of like musicians wants to own their recordings, not just get paid by the record company.
3. Traditional investments suck
Any time you are looking at a possible investment you need to judge the opportunity cost – what else could you be doing with that money. In general, traditional investments like stocks have been risky and returning lower than historical rates. Just as pension funds seek to diversify into alternative classes such as venture capital or private equity, celebrities are thinking the same. I wouldn’t be surprised to hear that there has been an increase in venture funds bringing on celebrities as LPs. And clearly these angel investments – often at preferable terms due to the value they can bring above and beyond the money – round out a portfolio.
So long as celebrities are willing to work on behalf of their investments (like every other angel!) this should be a sustainable trend. What do you think? will celebrity investing pan out or is it just a bubble? 

Spotify Playlists: The Next Big Brand Play?

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“Make Content, Not Commercials” has been my breathless rant for the last 18 months, and brands have both a carrot and stick pushing them in this direction. The stick is consumers increasingly cannot be forced to care or pay attention to brand messages that are irrelevant to their interests. The carrot is a media landscape and distribution tools which support brands becoming content creators and curators themselves. Given my background at YouTube most of my thinking here has been in video but at brunch this past weekend it occurred to me that music may not be that different.

Chowing down Southern comfort food at the Front Porch here in SF my ears kept drifting to the great soundtrack of pop songs in the background. True Colors by Cyndi Lauper, some Pat Benetar, that Australian sprite Kylie Minogue. It was all I could do not pull out by phone and start making note of the great collection, which of course then made me realize what I really wanted: a Front Porch playlist on Spotify that I could subscribe to and listen as much as I wanted.

Brands – especially local small and medium businesses – have a real chance to become cultural tastemakers as we look for curators and authentic connections. In return for providing value in supporting the creators/causes I care about (how long before brands offer to match my donations on Kickstarter?), they get my attention. On Spotify for example, perhaps a playlist owner gets first crack at buying out the ad inventory within the playlist. So for example Front Porch could benefit from me seeing their name each time I access their songs but also insert topical and current brand messages to my engaged ears. And since playlists are evergreen they could constantly be tuning the mixes they push my way.

Spotify team – whatcha think? Will we be seeing brands pushing users to their Spotify pages any time soon?

UPDATED
via Tom Conrad, EVP Product/Tech at Pandora: “brands do this on Pandora all day every day; one of our best opportunities for advertiser”