Written by Mihai Dragan on Thursday, February 25th, 2010 ( Start discussion )
Tags: economics, entrepreneurship, online startups, Running the business, studies
Online startups are interesting micro-economies. Most of the systems are based on several variables like number of users, conversion rate and others, directly depending on the type of business systems they do (or do not) develop.
I have been studying the whole concept and focused on some of the variables that are usually left out.
The assumptions
The [...]
Written by Mihai Dragan on Monday, March 8th, 2010 ( Start discussion )
Tags: Agency Work, audio video, kovideo, launch, lyrics
Today we’ve launched KOVideo, a new and innovative audio, video and lyrics platforms that makes use of newest technologies to make sure users get a seamless experience. Read about it here.
Written by Mihai Dragan on Wednesday, March 3rd, 2010 ( Start discussion )
Tags: insurance, investment, money, warren buffet
Although it’s not the focus of this blog I sometimes read things regarding investment. And who else is better to read than Warren Buffet. While I was reading his annual letter to Berkshire Hathaway (thanks Lee for pointing it out) I’ve stumbled across some interesting view on the Insurance industry:
“Insurers receive premiums upfront and pay claims later. In extreme cases, such as those arising from certain workers’ compensation accidents, payments can stretch over decades. This collect-now, pay-later model leaves us holding large sums – money we call “float” – that will eventually go to others. Meanwhile, we get to invest this float for Berkshire’s benefit. Though individual policies and claims come and go, the amount of float we hold remains remarkably stable in relation to premium volume. Consequently, as our business grows, so does our float.
If premiums exceed the total of expenses and eventual losses, we register an underwriting profit that adds to the investment income produced from the float. This combination allows us to enjoy the use of free money – and, better yet, get paid for holding it.
Insurers receive premiums upfront and pay claims later. In extreme cases, such as those arising fromcertain workers’ compensation accidents, payments can stretch over decades. This collect-now, pay-later modelleaves us holding large sums – money we call “float” – that will eventually go to others. Meanwhile, we get toinvest this float for Berkshire’s benefit. Though individual policies and claims come and go, the amount of floatwe hold remains remarkably stable in relation to premium volume. Consequently, as our business grows, so doesour float.If premiums exceed the total of expenses and eventual losses, we register an underwriting profit thatadds to the investment income produced from the float. This combination allows us to enjoy the use of free money – and, better yet, get paid for holding it.”
Written by Mihai Dragan on Wednesday, March 3rd, 2010 ( 2 responses )
Tags: incentives, interactive, maslow, online marketing
Having a look at Maslow’s hierarchy of needs (check it out on the right) I’ve noticed that the internet related advertising usually works on upscale needs such as self actualization, esteem, love, belonging, safety etc.
The finer the choices, the more the internet advertising can answer and relate to this needs. The two – way communication works best with upscale needs and probably upscale individuals: the influencers, the early adopters, the few.
The self actualization need, the “be all you can be”, the “discover your inner power” works best on the internet and it’s actually believable in a world where class, color, race, religion or income don’t matter. This is something the real world option can’t actually offer.
John Gerzema states that the recession has hit each and every one of us. “The times of leisure class marketing are behind us and the focus msut shift to addressing our essential needs” says John. While I cannot debate that I think that maybe, just maybe, it’s just the real world that won’t provide means of reaching higher ambitions to people. The internet will.
Written by Mihai Dragan on Wednesday, March 3rd, 2010 ( Start discussion )
Tags: martie, martisor, social media, viral campaigns, widgets
There is a Romanian tradition called Martisor. It celebrates the coming of spring, rebirth and others. Men buy women little (usually hand made) jewels and flowers. You can read a little more about it here.
We got inspired about the red and white thread that accompanies this tradition. So we made a little widget people can post on their blogs and web pages. I use one on the blog too. Check it out in the right upper area. If you visit the minipage you can read the text saying “We wish you many new years. Tangle our thread around your website. It doesn’t have any magical properties, bringing you countless visitors to the website but it’s pretty good at showing what this celebration is about: new beginnings and fulfillment. All you have to do is copy the html code below in your template files.”
It was pretty fun doing it and it really caught up. Up to 400 websites, blogs and social media profiles adopted the virtual “Martisor”. In just 5 days we’ve served around 250 000 virtual “Martisoare”. And counting.
Written by Mihai Dragan on Thursday, February 25th, 2010 ( Start discussion )
Tags: economics, entrepreneurship, online startups, Running the business, studies
Online startups are interesting micro-economies. Most of the systems are based on several variables like number of users, conversion rate and others, directly depending on the type of business systems they do (or do not) develop.
I have been studying the whole concept and focused on some of the variables that are usually left out.
The online startup I’ve studied to get a glimpse into this was an hypotetical online game. I’ve assumed the the game will be launched with a PR/advertising campaign, delivering an initial traffic to the website.
The game would sell power-ups to gain revenue. Other assumptions I have based my study on are that users would enter the website, register if they feel like, drop out and erase their account if it is just not their cup of tea, invite friends which would might or might not respond and of course, play.
In order to test the user’s behaviour we will use several conventions, following Registration Rate (RR), Spread Rate ( SR – number of invited users / month / user ), Response Rate ( ReR – number of invited users actually visiting the website / month ), Dropout Rate ( DR – users cancelling / abandoning their ), Conversion Rate ( number of registered users buying upgrades), Medium cost per product (MCP).
I have also thought of a formula to determine purchase intent (PI), directly proportional to monthly visitors increase, RR and Influence rate of registered users (SR/ReR).
The Purchase Intent is Inversely Proportional to Dropout Rate (DR) and Medium Cost per Product (MCP).
Although the concept hasn’t been tested on real life scenarios (I am looking for entrepreneurs willing to share some data for the study – 100% confidential) I guess I can outline some conclusions:
I hope this helps.
Written by Mihai Dragan on Wednesday, February 3rd, 2010 ( Start discussion )
Tags: internet, new-age, social system, utopia
Or rather … the country. The continent. The world of the Internet.
A rather interesting idea crossed my mind last night. I was thinking about the global challenges that humanity is facing today. The ones we all know about: global warming, crash of the economy as we knew it, globalization, unequal distribution of wealth (read some about it here) and many others.
I thought about the ants. As individuals they are insignificant. As a group they are amazing. They construct structures we are not able to (maintaining the proportions). They are organized and act as a whole organism.
So do humans, but with one big issue – the communication. We worked pretty well in tribes, cities but now we have to communicate globally. Our social structures are expanding. The rules we use to organize do not apply any longer. What rules should we establish now?
The internet is a chaotic and at the same time a self organizing thing. A brain if you like. Its neurons are the people that use it. The connections – its synapses. We started thinking globally and not just as a metaphor.
We might now use this concept and develop it. We could create a new country, a new continent, with new rules that apply to new times.
This structure would not be one led by governments but by the best performing citizens, just as our brain controls our body. There won’t be any taxes that we don’t already pay. The economics would be self balancing and self adjusting.
Social status would not matter. What would matter would be the outcome of one’s efforts. The best intellectuals, the best concepts would rise to the top, no matter the race, sex or ethnicity.
The system would be called Internetism, the social system that gathers the best of previous ones.
Is it an utopia or a reality we are yet to accept?
Written by Mihai Dragan on Tuesday, February 2nd, 2010 ( 9 responses )
Tags: agency, mb dragan, three years
I started MB Dragan, the agency I run today, with a dream in mind – creating a new, better, interactive agency. The best in the world.
Three years have passed but they seem like ten to me. It was harder than I would have ever imagined. The last one was the hardest. It was full of sleepless nights, stressful deadlines and issues I never thought I would have stumble upon.
I wish I could say everything went by like a breeze but it didn’t. Some people let me down and I’ve let others down. Promises got broken. Some dreams too.
I had tough choices to make. Choices that keep me awake at night. I’ve made mistakes of which I am sorry. Mostly in my private life.
But through the darkest times I’ve realized how bright some stars can really shine. I am thankful to have met people like mr. Alex Buga, Gabi Nistoran and Andrei Gheorghe, which became my associates. I am honored by their presence and trust.
It’s not just about them. I thank all those I can still call colleagues and which I treasure more than I can say, although it’s getting harder to say it, being a larger group now.
We are the fastest growing agency in Romania. The people that joined this group are the best of breed in this domain. With a background like this, things aren’t always easy but the goal and path that lie ahead seem clearer by the day. We will be the best digital agency in the world. The agency for tomorrow.
Written by Mihai Dragan on Monday, January 18th, 2010 ( Start discussion )
Tags: infrastructures, Interactive Advertising, new media, social media
I have been studying the whole concept behind Zynga’s recent success (Farmville, Mafia Wars etc.) and I just can’t stop thinking about how interesting it is.
Basically all of the other online games used to draw users to a social infrastructure (user accounts, social networks etc.) build on their own. The great thing about Zynga is that it targets already built social infrastructures (like Facebook, the iPhone AppStore). It lowers costs and it increases exposure and potential revenue.
What if brands would use the social networks to market products just like Zynga markets their games?
Written by Mihai Dragan on Thursday, January 14th, 2010 ( One response )
Tags: ai, artificial intelligence, future, Interactive Advertising
Artificial Intelligence, in the sense we hope for and expect does not exist at the moment. At least not available to the general public (there are rumors of Google, the military and others building such a thing).
It has been the dream of advertisers worldwide to communicate one-to-one to potential consumers and I assume that we are not that far from reaching it. We have the tools to build it. The general public wants it.
I expect this to be the main feature of communication worldwide (not just advertising) in the century to come.
However – limiting such a thing to just advertising, or advertising as we know it, sounds ridiculous to say the least.
For more info have a look at:
Written by Mihai Dragan on Saturday, January 9th, 2010 ( 3 responses )
Tags: advertising, brands, interactive, interactive vs conventional, media, startups, website
The website as we know it, at least as a concept, is dying. It has been for the last 5-8 years and now its death is even closer. Let me explain.
If you think about the term it is composed of two words that explain what the concept represents pretty good. A place on the web. It was the perfect way to introduce the concept to the general public. People were already accustomed with the concept of “site”: be it a store, library, house – each of these were built upon a “site”. People would access this site using a address or, in the internet world, a URL.
As with physical address users would visit a certain (or more) sites, based upon their previous experience, friends recommendations and more. In the economic world brands got used to “kindly invite” (or not so kindly as some interactive advertising techniques show us) to the homepage and the user would browse around, consume content and hopefully come back.
That was the case back in the day when the websites count reached numbers of, let’s say, tens or even hundreds of millions of pages. A lot you say. “A more recent study, which used Web searches in 75 different languages to sample the Web, determined that there were over 11.5 billion Web pages in the publicly indexable Web as of the end of January 2005″ states Wikipedia. And that, my friends, was 2005.
What is a user to do in such an environment. Browse? To hard. Visit the same websites? Extremely limiting.
The first big online brand to address this issue was Yahoo that started as a recommendation website founded by Jerry Yang and David Filo. For a short period they had a boom and people would relate to what Yahoo! as a helpful resource in the online jungle.
Things got bigger and bigger. The internet expanded and users needed even more. They needed answers, they needed something to guide them to what they were looking for. Thus Google started a long and successful journey that led to a multi-billion enterprise. Google helped by pinpointing exactly the website on was interested in. And people were thrilled.
Has the internet stopped there? Hell, no.
More and more information hit the interwebs. What was once a resource for mainly text and image documents had turned into the worlds biggest collection of data. Be it photos, documents, books, videos – the world started storing its information in the big reservoir that we call Internet.
So many options, so little time. What to choose?
People relate to their closest human peers in times of doubt. Not even the mighty Google could replace a kind word or the warm advice a friend is able to offer.
But our friends were already there. People gathered in online social networks and interacted. They would recommend the things they liked asked for advice when needed.
It started with forums, continued with blogs, hit new heights in human interaction with social networks such as social networks and now we have Twitter, the global phenomenon that let people tell one another what are they doing (be it watching TV or fighting a dictatorial regime). Under 140 chars.
The fact is no one ever needed websites. They needed “stuff”. They were on the look for data, a nice gift to buy grandma on her 76th anniversary, a fun video to watch, the coolest hit to download. Never for a simple website.
Being focused on the industry of interactive advertising I will focus on brands and maybe offer good advice. Brands need to realize that their users and potential consumers don’t actually need another website. They need what they want. They want fast answers, they want brands to “follow” or “befriend” them, not the other way around. They have the options and they have the power to select.
Brands are not what they used to be. At this moment the vast majority of Brands are still the big Advertisers that still expect to spend money on big media advertisements and have consumers lining up to their store or website (notice I use the terms pretty close to one another. They are.).
This is not the way. Huge opportunities await those that will follow their users, build presence around their users and still maintain brand awareness and a coherent communication plan.
I reached Zynga Poker on Facebook. Played around a little bit on the Facebook app they’ve built. Downloaded the application on my iPhone and bought virtual upgrades with real money. Until today, I have never visited their website. Zynga is a startup that has revenues in the orders of tens of millions of dollars (and growing).
I will leave you with some advices I consider helpful:
