在沈向洋同学的一次谈话中，非常推崇Google AdSense，确实是很精美的广告系统。不过号称现在点击率越来越低，而且作弊比较严重（尤其国内）。这让我想起今天看到的一则新闻，网购30天后悔权催生蹭买族 专家称时间不宜过长，广大人民群众的聪明才智啊，很大部分用到钻空子上去了。

商家怎么办？CPC越来越不行了。来用零风险的就是CPA吧。

Origin

Hulu, an online video streaming company, managed to do something which YouTube failed to do. Copyright is one of YouTube’s headaches, but it is incredible positive thing for Hulu, because it is built intentionally aimed to server property content by two major stream media dogs, NBC Universal and Fox.

{YouTube, watch someone’s DIY video} VS { Hulu, watch TV & Movies online legally} -> Similar but different market niche.

People might be asking, why NBC and Fox executives don’t rely on YouTube to serve their plays? You can imagine following conversation which probably happened behind the scene:

This is the first site who delivers property video to your computer for free. Traditional Media Company gradually realized that they have to embrace the changes if they are not able to prevent them. It is online streaming, in this case. Hulu has more than 120 sources now.

Key is property content sources are nonrenewable rare resources.

Independence

Hulu’s CEO said to capital angels, “I don’t think you’ll be seeing the name Fox or NBC on the site hardly at all, Hulu is about the shows, not the networks. The shows are the brands that users care about.” Another quote, “the key to Hulu’s success is its freedom to operate essentially as a stand-alone company…”

From startup’s perspective, captical can be good thing, or bad thing. It can help you grow much faster, but it can also easily enable you miss your initial goals. Capital often appoints some seemingly smart guy, who is with XYZ MBA degree or n years of experience in ABC company, to take over the company as one of its investment agreements.

That is indeed one of the worst investment risk controls, although it happens again and again. Give money to most passionate guys, and letting them be passionate always is the only way to maximize the probability of getting most out of your investment.

Feature?Solution? Experience!

Question: If you are given a task to build a video streaming site within less than 3 months, what would you do?

We were taught this way:

1) Identify who will be using your site

2) Draw use case diagram

3) List scenarios for each user role

4) To support each scenarios, figure out needed features

5) Design/Code/test your features

6) Go live

7) Yeah! Party! :- )

If you follow this in your next interview, I can almost guarantee a pass. Do we miss anything? Actually we missed most critical one – Experience! Experience is a combination of brand/feeling/easy-to-use/enjoyable process. For example, given below requirement:

“Design something which is used to sit on, commonly for use by one person. It often has the seat raised above floor level, supported by legs.”

People will respond immediately, “Chair!”. You may notice that there are at least hundreds of types of chairs in the world, if not thousands of, if not millions of. Only most imaginative ones who deeply understand that particular set of users’ needs, care about their feelings and eventually apply those into product designs can do the best work. Let us take a look at “art of chair”.

Be COOL, in show time, although you might have the similar hard time figuring out what some of them really are. Just like someone said about iTune – “iTune is not selling features. iTune is selling experience.”

Hulu’s key experiences:

1) Simple

2) Larger screen

3) High-resolution video

4) Clutter-free

5) Quality control

6) Free to users

7) No download

Obsessed with users

“Hi Bill,

I noticed that you were never able to plug the Lake Quincy Media ad tags into your site. Are you still interested in earning revenue from displaying ads targeted to Microsoft developers? If so, you can get your tags from here: <certain link>

Let me know if you have any questions or if you’ve decided against running the ads and I’ll set your account to inactive for you.”

I even forgot that I resgistered in their site. To encourage such great customer service, I go ahead to try how the AD really works for me; finally decide to put a small square in the side bar. You can easily find it now if you scroll down a bit and pay attention to the left side bar. Let us see how many dollars I can make after one or two quarters. By putting an AD to the blog, it looks more of-the-business, doesn’t it? Of course, you can bid for that AD position. :- )

Update(2/26/2009)

The AD is disabled temporarily due to security alert.

Problems

As everybody knows, ‘YOU’ is named Time’s person of 2006 for the growth and influence of user-generated content on the internet.  Why? In Wikipedia’s words:

“… chose the millions of anonymous contributors of user-generated content to Wikipedia, YouTube, MySpace, Facebook, Digg, Second Life, the Linux Operating System, and other providers, as Person of the Year, personified simply as You.”

But on the other hand, if we carefully think of people’s motives of generating contents we can easily find that people do this mostly out of curiosity, self-achievement or volunteerism. Problem #1: Per basic economy principles, these efforts can hardly stand long. Content quality is another downside in such circumstances.

Another awkward problem around current most successful business model, online ad, is the fact that people get tired of spammed AD when they use certain online service for free. Problem #2: But interesting enough, people often have trouble in making the right purchasing decision given even exposed to so much AD, probably because: (1) AD timing is not good, (2) they don’t trust the publisher, (3) AD is not carefully targeted. This looks pretty twisted, doesn’t?

At a glance

Taking above problems into consideration, HappyDog is an innovative advertising system which provides following unique values:

• For general content generator – get cash paid by sharing your experience with the world, even if you does not own a website.
• For shopper – make your shopping decision more smartly
• For business, either online or offline – market your product more directly to the most potential customers

Let us take a look at below diagram first:

By content generators, it could be anyone(professors, housewives, kids,…) who contribute anything(answers, e-books, songs, tutorials, …) in any format(wiki, blog post, video,…), including but not limited to wiki & QA.

When people produce contents, HappyDog helps insert contextual AD into the content. The big difference from existing advertizing system is that content generators gain real revenue in HappyDog system. The revenue coming from advertisers would be divided into several parts: 60% to content generator, 30% to site owner, 10% to HD. HD takes the smallest piece of pie, but apparently we will gain most amount of them, because there is only single HD, 1*M site owners, 1*M*N content generators. In addtion to real $s, the incentives here can also be points/happiness, etc. The point here is to encourage ones by certain ways. But the reason why we highlight monetary incentives is the belief that this makes something long-awaited possible. Let us think about this: Sites like Wikipedia, IMDB, or Amazon, have tons of high quality content that have been contributed freely, but why only them? Because They are cheap, handy offerings to the community. How about an book written online, sold online? Few will do this free mainly because of its costly nature. HD makes it possible though. Another interesting thing is how wikipedia-clones are going in China. They never take off. It might be cultural reasons related to general finance status.

Monetary incentives can help imporve quality of content because one gets financial penalty due to “thumb down” when we put a rating system in place.

HD helps people do better purchasing decision in that HD AD is more personal, and people are encouraged to advertise the products they sincerely love and have first hand experience on. We will address this in detail next. One will be concerned to play dirty because one also has to care about its repuation/credit disclosed by rating system.

Demo

Take Yahoo answers as example, an working page from publisher side would be:

P0 features in 1^st Milestone

In order to pay content generator effectively, following features are essential in M0:

(1)    Users have the rights to select their preferred AD – When you answer questions in forums; you actually care your reputation in same way you deliver a public speech. So you also care the AD itself along with your content. Another reason supporting users selectable AD is that people might like to show certain products more persuasively via real personal experience. In short, we prefer “recommend your favorites to friends” scenario.

(2)    PPA(Pay Per Action) as major pricing model along with PPC – Advantages of PPA: no click fraud, advertisers’ preferences.

(3)    AD type – signature text, picture, inner-text popup, mini-cast

(4)    Support offline mode – Although internet users reach 0.8 billion statistically, but not every business has a website. This is especially true when people surf the net mainly for entertainment instead of business. HappyDog aims to benefit this kind of business via so called offline mode. We will take about this later.

(5)    An open platform – Open API to foster a strong ecosystem around HappyDog.

How It Works

The conceptual architect for HappyDog might be looking like follows:

In real implementation, HappyDog doesn’t depend on any specific technology platform. Take general open source platform as example, related technology could be:

•       Client

–      HTML

–      Use Javascript/Flash extensively

•       Servlet container

–      Tomcat/Jboss

–      Spring, OR structs

•       JAS(Java Application Server)

–      Jboss

–      Hibernate

•       File Server

–      Store static data, say photos, html, pic, js

•       DB

–      MySQL

Its key use cases would be:

Buyers can be publishers or unregistered users. By online, it means the transactions whose completion can be confirmed online, say online order, user registration, complete one survey, software download, etc. By contrast, offline means the remaining trade types, such as haircare, restaurant, face-to-face trading.

PPA Implementation

PPA, as one of the core features of HappyDog System, comes with two flavors: online and offline, as illustrated in following sequence diagrams.

Online-PPA

The steps here are:

(1)    User browses and click the publisher site link somehow

(2)    Browser sends request to publisher

(3)    Publisher response the corresponding content along with Javascript inside

(4)    Browser starts rendering the page, and then the Javascript in Browser call the HD to get AD

(5)    HD returns content with targeted AD

(6)    Brower completes rendering

(7)    User continues browsing and click one of our AD

(8)    Brower follow the link and send the request to HD along with the needed parameters

(9)    HD do several things here:

a)        Write “who is publisher, when, advertiser, campaign, etc” into the DB and return with a TRANSACTION_ID

b)        Write TRANSACTION_ID into user’s browser cookie

c)         Redirect user to advertiser website

(10)Advertiser returns the commercial pages to user browser

(11)Just show it

(12)User is interested in something in advertiser’s web site and fills in form(sales order, lead, signup, etc) and submit

(13)Submit user inputs to advertiser

(14)Advertiser will do below things:

a)        Do anything necessary to close the deal

b)        Read user’s browser to get TRANSACTION_ID

c)         Call beacon code the confirm the transaction with HD with TRANSACTION_ID as parameter

(15)Charge advertiser and share revenue with publisher

To take part in AD promotion of this advertiser, user must give his comments about this shopping experience.

Offline-PPA

Offline mode is bit more complex.

(1)    User browses and clicks the publisher site link somehow

(2)    Browser sends request to publisher

(3)    Publisher response the corresponding content along with Javascript inside

(4)    Browser starts rendering the page, and then the Javascript in Browser call the HD to get AD

(5)    HD returns content with targeted AD

(6)    Brower completes rendering

(7)    User continues browsing and click one of our AD

(8)    Brower follow the link and send the request to HD along with the needed parameters

(9)    HD do several things here:

a)        Write “who is publisher, when, advertiser, campaign, etc” into the DB and return with a TRANSACTION_ID

b)        Give user the advertiser’s profile and coupon which contains TRANSACTION_ID, advertiser name, promotion campaign.

(10)Just show it

(11)User is interested in advertiser’s  promotion program and decide to print the coupon out

(12)Go to HD

(13)Record this as a successful transaction in DB and wait for confirmation(TTL is 2weeks)

(14)User go to the advertiser with coupon to enjoy the service or product(say haircare, dinner, etc), and go back with CONFIRMATION_CODE

(15)Provide service and a CONFIRMATION_CODE

(16)User logon to HD, submit TRANSACTION_ID and CONFIRMATION_CODE

(17)After validation, give user further kickback

A series of CONFIRMATION_CODE are issued to advertiser by HD while he/she enrolls the program. Additionally, in step(15), alternatively advertiser could logon to HD and confirm the transaction.

Open Questions

There are also several problems deserving consideration at current stage:

1.       How to get advertisers? Alimama? Google AdSense is such a close system, hard to extend.

2.       Looks like current publishing place are not ready for HappyDog. They often filter AD content out. How to solve this?

3.       How to share revenue in Wiki scenario? Say 50 people contribute to a wiki page, how to distribute revenue among them?

4.       Is the money too little to stimulate enthusiasm among high quality content contributors who are usually payed very well in regular job?

5.       How to protect content, for example 1^st tutorial about jailbreaking iPhone? Share revenue?

This post is mainly for feedback collection purpose. Feel free to Pai Zhuan.

Our world becomes as it is today pretty much because many innovative people influence the whole world by invent things such as telephone, airplane, energy and internet in which way you read this post. But what are similarities they share besides smart, hardworking, etc?

• Question asker – Why is it working that way? How to solve this problem? What are concerning customers?
• Don’t follow the rules – Don’t do things as told. Not always be student.
• Outsider – Take the road less taken. Do things that no one else things of. (不走寻常路，in Chinese). Think from origin.

There were many ideas in people’s mind, but few of them became real innovation. So what is the flow of turning ideas into innovations? Typically the flow would be:

This flow almost works for everybody. You can be in normal corporations where you report to your manager, or you are genius college student gaining certain cool ideas.

Woo-hoo, it is a great flow, man. But wait a minute,

• Where do ideas come from? – I feel like it may come from two ways. 1) You can observe one problem and go back to your house do your homework, finally find out the solution. We can list many supportive examples such as light bulb by Thomas Edison. 2) People may run into something unique, and then start seeking for applying field reversely. For example, low tack adhesive makes post-it possible. So the point here is to observe anything around us and to keep asking questions such as “how to make this better?”, “Is that possible?”, etc. And ideas are not necessarily as big as changing the whole industry, they can be extremely simple but solve problems in graceful way. Also, combination of ideas may also lead to cool ideas. For example, YouTube + HotOrNot = video version of HotOrNot.
• Why pitch matters? – Pitch here means convincing somebody, your friends, colleagues, spouse or your managers. This is the first skill you need to have, definitely. This can help you dogfood your ideas among ordinary people to see whether it really meets customers’ needs. Another reason to pitch is that you need their support (sometimes financially) before you go any further. Often you have to answer questions such as “who are your customers?” “how much money can you make/save” just like a mini B-plan. Sometimes pitching comes after POC/prototyping, that is true.
• “I am too busy to have time for proof of concept/prototypes…” – Then you won’t be an innovator. It is simple. We are sleeping 1/3 of our time. Everybody have to meet his/her job commitments another 1/3 time per day. But what he does in remaining time sharps what his life would be in longer term. You would be more luck if your cooperation encourages you invest ~10% of working time to pet project. J I assume you know the importance of prototyping, so you have to do experiments to further prove your ideas.
• From “plan” down to “execution”, looks pretty familiar… – Actually maybe not. Mistakes can be made. But so what? At least we know this way does not work with these people this time at this place.
• What comes after innovation? - Commodification! Sell it out to your manager or even to the general public. The more, the better. At that time, everything else(e.g., $$$) will follow you automatically.

Stay hungry, stay foolish. If somebody with powerful looking tells you something like “search engine cannot make any money”, think about why and try other possibilities instead of immediate drop.