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Archive for June, 2007

BETTING ON MOBILE TO WIN, PLACE AND SHOW

By Yuszela Yusoff, BuzzCity Manager, Content & Community

The British love sports and they love to gamble, so it’s little surprise that gambling companies have been the first big movers in the mobile application space in the UK.

The Gala Coral Group, Ladbrokes Ltd and PaddyPower PLC are three companies that offer odds and take bets on just about everything from football matches to greyhounds to which contestant will be booted off next from the popular British reality TV programme “Big Brother”. (In case you’re wondering, Seany is currently the odds-on choice to be evicted next while Brian and Liam are 3-1 favorites to be the last remaining males in the house.)

Gala Coral, Ladbrokes and PaddyPower started with physical shops and gaming centres. Each firm then grew its revenues further by expanding first onto the internet with online casinos and now into the mobile environment.

Similarly, at BuzzCity, we are betting that clothing retailers, discount stores, even used car dealers will soon reach out and interact via mobile phones with European consumers in ways unimagined not so long ago.

We recently conducted a survey of our British users, who were offered Gamma Dollars in return for their participation. Here are the results.

myGamma mobile networkers are:
* Largely male (65%)
* Young adults, aged 25 – 36 (50%)
* Secondary school graduates (44%)
(Only 11 percent have university-level education)
* Working class (both skilled and un-skilled individuals, who do not work at a computer)
* Lower income (59% earn less than £19,000 a year; 78% earn less than £23,333)

While our user base is cost-conscious and price-sensitive, they still spend money on themselves:

* 42% keep track of the latest products
* 34% spend more than half their income on leisure items, like music and movies

Fifty-year old “Alanleic” is a bit older than most myGamma users, but in many ways he is a typical member of the mobile community. He works as a crossing-keeper, opening gates for cars to pass through, in England’s East Midlands. Alan enjoys drinking, dancing and football and is open to romance. He notes that the cost of living is high in the East Midlands and that when he goes shopping, he’s a bargain-hunter.

Discount chains that feature economy brands and offer value for money, like Asda & Martin, are popular with shoppers like Alan. Lower-income shoppers in the UK also purchase clothes at the supermarket and from mail order catalogues like Littlewoods & Argos. Some of these stores offer credit facilities to their consumers.

Stores like these now have a great opportunity to extend their services onto the mobile internet by offering price guides, store locators, price comparisons, gift vouchers, loyalty cards, loyalty points and more. Applications like these not only provide consumers with more product information, they also enhance brand awareness and spark word-of-mouth recommendations.

This is win-win-win for everyone involved: consumers have access to more information and services, retailers expand their market and mobile services like myGamma provide the platform for consumers and businesses to interact like never before.

Win, place and show!

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Categories: myGamma, Yuszela Yusoff

CONNECTING THE UNWIRED

By Lai Kok Fung, BuzzCity CEO
Life doesn’t progress like a spreadsheet.

I think that’s one of the biggest lessons I’ve learned over the past eight years, since leaving a secure job at Kent Ridge Digital Labs in 1999 to launch an internet startup with three colleagues. Today, that startup – BuzzCity – is a vibrant mobile service provider delivering content to consumers in over fifty countries. By the end of the year (2007), we expect to add another 8 markets in eastern and central Europe. We currently serve more than 1 billion mobile advertising impressions every 3 months, have multiple revenue streams and are not overly dependent on any one market.

But it hasn’t always been like this. In fact there have been moments when we wondered how to carry on. This week, I’d like to share with you a bit of our company’s history and the lessons we’ve learned along the way.

Before forming BuzzCity, I was a researcher specialising in pattern recognition. We worked with barcodes and taught computers to recognize faces. Some of the technology was adopted by government agencies and Singaporean government-linked companies. However after a few years, I was tired of simply publishing papers and I really didn’t like the idea of our technology servicing only a select group of people. I remember a particular moment when I was at an underground station, watching commuters enter and exit the trains, and I thought “What a pity. My work has nothing to do with them.”
When the Internet came about in the mid 90’s, my colleagues at the research institute and I began to specialise in text-recognition. Our work caught the attention of the leading search engine at the time, Alta Vista, and was integrated into their Chinese-Japanese-Korean language components. I thought — perhaps too naively — that we now had market validation.

So, in 1999, we struck out on our own — four young people, inexperienced in the craft of business, armed with a few promises of potential customers, support from the research institute and our credit cards. (The picture to the left shows the four of us, plus two colleagues. At the back row, in the middle, is yours truly.)

In our first incarnation, BuzzCity targeted internet users with a service that enabled them to track updates to their favorite websites. This function can now be provided by RSS (“Really Simple Syndication”, the technology behind blog syndication), but back in 1999, it was considered groundbreaking. Some two million subscribers received personalized email alerts on a regular basis. Our business model relied on selling ads to accompany these emails.

We successfully closed two rounds of venture funding and made some really nice predictions in our spreadsheets. Like other Internet boomers, we started talking about an IPO.

Very soon though, we ran into two major problems:

1. Traditional companies weren’t buying online ads. Everyone, including me, thought mainstream companies would “get it” faster than they did. However, brick and mortar businesses didn’t really start advertising on the internet in a big way until 2002.

2. Spam. Unsolicited emails selling everything from Rolex watches to Viagra began to clog email boxes. It was tough to differentiate between unwanted spam and subscriber-based emails like ours. Each month, subscribers were spending progressively less time looking at their BuzzCity email alerts.

Within a year, we realized our business model wasn’t working and we would have to try something new.

In our second incarnation, we enhanced our technology so it would work on mobile phones and turned our attention to China. This was our first foray into mobile space and fee-based content. We found a niche and the transformation paid off. In 2003, BuzzCity recorded its first profit. We again drafted spreadsheets predicting a rosy future and for the second time in four years, we talked about taking the company public.

Once again, though, we ran into several problems:

First, many of our competitors in China engaged in questionable practices like telling consumers that content was free when it wasn’t, subscribing mobile users without their consent and making it difficult to unsubscribe. While BuzzCity didn’t do any of these things, the consumer backlash against the industry hurt us as well.

Second, once our Chinese partners realised there was money to be made in this industry, they thought they didn’t need us anymore and would try to continue the business without us.

In 2004, BuzzCity decided to go it alone. We acquired a Chinese company and served hundreds of thousands of mobile networkers from Beijing to Sichuan. However, this time we found the going much tougher than before.

“What went wrong this time?” you ask.

In 2004, the landscape of mobile content industry in China began to change drastically. Chinese regulators reacted to unethical business practices of unscrupulous content providers by implementing new rules regarding corporate structures, capital holdings, number of employees and more – basically rules that didn’t directly relate to the problem, but which made it difficult for medium-sized enterprises like BuzzCity to do business.

Some seventy percent of our business was in China. It was extremely demoralising. Not all of our problems were external, of course. We made a fair share of execution errors. My management team and I began to doubt ourselves.

But as we went back to the drawing board, we realized that we had matured. We had gained expertise in areas that would provide the basis for BuzzCity’s current success.

Specifically, we learned how to

* run a fee-based mobile content service
* manage large user communities
* market and distribute mobile content direct to consumers
* implement revenue settlement with a vast network of partners.

Then a listed company offered to buy out our Chinese subsidiary. We ploughed the capital gains into new markets, grew and diversified our platform. Today, no single country accounts for more than 20 percent of our revenues. We’re seeing growth every month in the myGamma community and our merchant programme. Our ad inventory is consistently sold out.

More importantly, I realize that somewhere along the way, we were swept away by all the talk of making it big and forgot the reasons we started the company in the first place. I’ve rediscovered the joy and raw excitement of coming face to face with the people who use our services daily. Many of these users — from across four continents — are experiencing the Internet for the first time. Even in the more developed markets, we are seeing users who prefer mobile phones to computers for accessing the Internet. For some of them, the impact is nothing short of life changing. Subscribers write to tell us that myGamma has opened a new world to them with new friends, opportunities and possibilities. We are, indeed, connecting the unwired.

And here is the most mysterious lesson of all: when I stop requiring life to progress according to my spreadsheet, the spreadsheet begins to take care of itself.

Categories: Lai Kok Fung