Trust in the Software Market

Sunday 9th November, 2008

So it seems that Spore’s creators are on the receiving end of a couple of law suits for secretly installing unremovable software on customers computers.

While I don’t know exactly what chance these suits have, I wish them the best of luck. Why? Because markets depend on trust, a point that the people who decided to quietly install SecuRom with Spore seem to have missed.

Trust is required between vendors and customers; trust that the price will be fair, trust that the goods will be as described, trust that the payment will be valid, and trust that privacy will be respected. Electronic Arts’ decision to ship this DRM payload breaks that trust because they try to hide it, and because they take the liberty of making dangerous and irreversible modifications to your property.

As George Akerlof highlighted in his seminal 1970 paper ‘The Market for Lemons‘, markets without trust (he describes a car vendor’s hidden knowledge of a vehicle’s state as “information asymmetry“) can be difficult and dysfunctional, with the whole market affected by a few bad eggs.

If trust deteriorates between software vendors and software consumers, the software market will become a worse place for everybody.

The State of Image Search

Wednesday 6th August, 2008

There’s currently a lack of direction in the image search products offered by the leaders in the field. Each offering is quite different, and none have fully realised revenue streams. This is a quick summary of the current state of play.

Text search by any other name

Some image search engines learn about images solely by leveraging image meta-data and nearby text in parent documents. It’s a little like identifying a photograph by the name on the album cover and the writing on the back of the photo. This was an ideal solution for text search engines like Google and Yahoo, who could leverage their existing data and infrastructure.

Getting smarter

Microsoft’s Live Search have recently started broadening the mainstream by adding the capability to analyse the images themselves. For example, the Live Search team have added the ability for their system to recognise faces.

Playing the name game

The big players in search get revenue from serving up relevant advertising, but so far none of them have successfully monetised image search. Currently image search serves as a loss-leader that exists to support their search brands, a visible sign that they’ve still got chips in the big game.

That doesn’t mean they’re sitting on their hands. Both Microsoft and Google employ researchers in the area of image comparison and classification so expect big developments from them in 2009.

Pure image search start-ups

There are a few start-ups with an eye on the prize of being the first to monetise image search. Being smaller and more maneuverable than the big players they’ve got off the ground faster, but have yet to build up significant numbers. Start-ups to keep an eye on include Picitup (find similar images, celebrity face comparison), Riya/Like (text-driven image search and product search), and the Toronto-based Idée Inc (copyright monitoring, colour-based search).

These guys are hungry for revenue, so I expect to have fresh news in Q4 this year.

The home team

I work for Pixsta, another image search start-up. We’ve pulled together the basis of a decent team, and should start taking over the world shortly. As for what we’re working on, I’ll write more when I know what’s safe to write about outside NDA :o)

Is the term VRM misleading?

Sunday 30th March, 2008

I just read Lee White’s post, Enterprise 2.0, meet Social Media Monitoring, and it made me think. Lee wrote:

“Consider a world where a customer with an issue merely has to post their problem on their own blog or any discussion forum and the company will find it and resolve it. You will have removed the burden from the customer of figuring out HOW to complain. Sounds a lot like Doc Searls VRM project to me”

While it’s not clear from his post whether or not Lee is missing the full potential of VRM, it seems to me that the name itself (by its very association with CRM) limits the idea in peoples’ imaginations.

To me, the VRM project is not about managing the other side of the customer helpdesk relationship (as implied by the name). That might be one use case for it, but to me it’s one of the least interesting. I think the VRM project goes much deeper. I think it changes a relationship where you have to shop around, filling in forms, endlessly giving away your data, to a relationship where you signal an interest in a product and vendors bid for your custom. It brings the marketplace to your doorstep. It changes the way people engage in E-commerce.