Perspectives

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If you listen to the pundits, Android may be in trouble. You see, now that Windows Phone 7 is out in the market, Microsoft is going to continue heavily discounting its handsets to grab market share, which will leave Android in a difficult spot, caught between the popular iPhone line and the (comparatively) cheap Windows Phone 7 line.

And what then will Android do? At least according to Charlie Wolf of Needham & Company, Android phones will have to be discounted as well, leaving Apple alone selling for full price; thus keeping Cupertino’s historically high margin where they should be, up.

We are not so sure. That scenario makes perfect sense so long as iOS and the phones it runs on command nearly completely mind share among the technologically elite. That scenario assumes that iPhone is so much better than Android, that people won’t jump out of an iPhone and into a Nexus S, for example, to save a hundred dollars. Why is that hard to swallow? Because at cost parity ($200 per phone with contract for both lines), Android is gobbling up market share around the world, already taking the US crown.

In their own words, Android was starting to beat Apple before heavy discounting, leaving little pressure on Android phone sellers to cut prices now that Windows Phone 7 is making waves. There is another element to the future of iPhone that no one seems to be touching: the forthcoming iPhone for Verizon. No more will AT&T sit atop iPhone mountain alone, it will be forced to share that peak with an uncomfortable bedfellow and competitor.

Can you smell specials and discounts from AT&T? But, of course. This will be a way to keep people from jumping to a better network, and will also ding iPhone margins for AT&T, putting it into a bigger race to slim profits than Windows Phone 7 will do for Android.

This latest bit of controversy reminds us of the old saw: never trust an analyst.

Dear Traveling Venues of the World – airports, hotels, hostels, car rental offices, buses, international terminals, hotels, airlines, airplanes:

Be forewarned. Yes, be forewarned. We, the travelers of the nation, are sick and tired of not having functional wifi on the road, and we will not put up with it forever.

While more and more venues are slowly implementing wifi solutions (Delta, Airtran and Virgin Airlines are offering free in-flight wifi sponsored by Google’s Chrome browser during the holiday season), the roll out is both too slow, too restricted, and often too expensive and inconsistent. Before everyone and their pre-teen had a smartphone; before people brought a laptop and an iPad with them everywhere; and before email became like breathing, not having wifi in certain areas was acceptable.

No more.

Even in places where there is public wifi, it is often so slow and so over-accessed that it is fully non-functional. Broken wifi could possibly be used as a torturing device in modern times: you don’t know it’s broken, you have a false sense of hope, you continue hitting refresh or F5 over and over, becoming more and more tired and furious because you just want to finish uploading that one episode of Fry and Laurie for the plane ride before you board since you’ve already read the in-flight magazines for the month five times over and you’re just not interested in purchasing a slanket. Please work, wifi, please! But it doesn’t work and you board the flight only to snap at the stewardess for having run out of the cookie option. It’s not her fault. You just want free, fast wifi!

3G and smartphones will only get you so far, especially in while flying where 3G is banned. We need the travel industry to get a few things: we like having bathrooms, drinking fountains, a litter-free and smoke-free environment, and wifi. Are we spoiled? Sure, but we are also the credit-card wielding group that floats the world of travel, and so we should be able to dictate our terms. (Found this site that is campaigning for free wifi within tourism industries. Great, but we need it fast.)

We want free, fast and capable wifi everywhere, and we want it yesterday. Southwest is at long last rolling out wifi to their full fleet (more than 30 planes are currently equipped, although we never seem to actually manage to be scheduled on one), only a year behind the curve of technology. Even in Great Britain, their trains are offering wifi on board, apparently way ahead of Europe. Although some of these advancements are stepping up, it is unacceptable that it has taken so long. Thomas Edison invented a system of wireless telegraphy back in 1888 that was deployed on the Lehigh Valley Railroad, and Heinrich Hertz demonstrated the theory of electromagnetic waves during the same year. We are now 132 years in the future and wireless internet is hard to find. Can this be bureaucracy at its finest?

One last point: where wifi is thought hard to find, we will pay a fee for it. In the air? Hard. $5 for a short flight and $10 for a long trek is fair. On the ground? No. It should be there, every time, no questions asked.

We travel, and we want more. Universal wireless access will become the norm, it is just a matter of time. Let’s just hope it’s not too much longer.

It can be frustrating to see how inept traditional media companies, even all media companies, can be. The never ending debate over online paywalls for content always seems to meander the point until the conversation loses meaning. This is the question that must be answered: Will consumers at some point in the future pay for content online in a way that will overtime replace lost print revenues?

The answer is yes, but no one seems to know it. Even the proponents of paywalls seem to not know what they are talking about as they always ruin their chances of success in two ways with their proposals: high prices and high friction.

Let’s get something straight: There is already an internet-wide payment system that has been accepted by consumers and integrated everywhere. It’s called PayPal. There is no need to reinvent the wheel. Any payment wall should have PayPal as the primary payment option and credit cards as the second. (See our article about Chicago firm testing this very thing for Wikipedia donations.)

Why do some companies not want to use PayPal? Because it charges fees that they find to be too high.

Boo-hoo. Get over it. If you want people to give you money you need to reduce friction at every point possible. That means PayPal, period.

We also mentioned price. You need to think about eBooks for a minute: people want them to cost less than print books. Why? Consumers understand that publishing costs are high, and that the costs for turning a novel into a PDF are not. Plus, it’s online. Products online demand lower cost.

For a paywall to work you have to go low. And I mean low. The power of the Internet is that you have access to the billions of people who are online, so you are looking for mass sales, not for a few sales at a high price. Contemplate if it is best to charge more and hit a narrow niche, or if it’s better to lowball your own product (in terms of what you think it is worth per month) and open the floodgates. Do you think that if the New York Times announced that everyone would have to cough up $3 a month to use the site, they wouldn’t have hundreds of thousands of signups in just a few months?

Back to friction.

Let’s talk options. Many people want to introduce options. Too many options, in my opinion. Day pass. Month pass. Week pass.

That’s crazy. Have a small selection of articles for free, then charge a flat monthly rate (cancelable at anytime, of course) if people want more.

Get rid of friction. Make it simple. Keep it cheap, and paywalls have a future. Just don’t let the beancounters come in and spoil the whole deal. This is the internet, and things are different. There is money to be made, but not in with the archaic way of doing things.

Chicago’s Groupon is the biggest thing to happen to the city since the two O’s – Oprah and Obama, and the biggest thing in the tech community possibly ever. So what does the possible sale of Groupon to Google mean for Chicago in general?

Built in Chicago started a discussion on this exact topic, and we at midVentures recognize the value in hearing what you have to say on the topic as well.

A few comments already:

“I congratulate everyone involved in this deal. It obviously is tremendous for them, but it also re-energizes the entire local investment community and will continue to build excitement and encourage entrepreneurs and investors alike to become more adventuresome and take more risks hoping to build another spectacular winner. It’s the best thing that’s happened to Chicago since the repeal of Prohibition!” – Bob Geras, LASALLE INVESTMENTS

“Why would Google want to start from Sq1 building something like Groupon? Far easier to buy.  Also, think about the impact of the Groupon Adwords spend….” – Brad Bauer

“It continues to confirm that the Chicago community CAN create great value and startups of a caliber as high as anywhere. This is one in a long history of companies started in Chicago that had an impact in the world.” – Nik Rokop

What do you think?

The Chicago technology scene can sometimes feel like a secret society. From the outside looking in it can be hard to locate, and even harder to understand. Once you get inside on the other hand, the Chicago tech community is filled with the talent, drive, potential, and intelligence.

The only hard part is getting to know the right people to gain the invites to the best places to see the real work in action. This is perhaps why Chicago is not as well known as it could be, but that might not a bad thing at all.

No one fears an enemy that they do not know as a threat; why fear something that is supposed to be wholly benign?

Chicago does not receive its due in terms of respect for its important role in the world of technology, so why not use that to our advantage instead of finding it irksome? Sure, we don’t have the same level of early stage VC activity? Then why can’t Chicago take the lean startup and MVP ethos and do it on our own?

We don’t have as much startup activity as Palo Alto does? That is actually a boon for new companies here; they don’t have to scramble as hard to find developer talent; we have some of the best schools in the world feeding into this city, let’s capitalize on it.

Chicago also has an ethos of revenue, meaning that new and medium sized companies in the area often have a stronger focus on income and profits than other scenes on the coasts, signifying that our firms and leaders like to build real businesses, not press release generators.

Chicago needs to stop looking down at itself with mild disdain, and needs to instead stand up for what it is: a vibrant place filled with talent and potential. The sooner we brush the chip off our shoulder and go about working as hard as we can on as much as we can, the sooner that we may just finally get our due back-pay of respect.

Until then let’s just be Chicago. We are a unique place with a uniquely strong culture. We are not a lesser place to do business, just a different one. Stand up and be counted, you are part of the Chicago technology community, and that should make you proud.