Friday, May 16, 2008

The pitch has been invaded

The always brilliant Econtalk has a delightful interview with Chris Anderson, editor of Wired magazine. Chris referred to two things he had discover recently which - and please forgive the hyperbole - completely blew my mind.

No. 1 Google are running a totally free, regular telephone directory inquiry service in the United States (called Goog441)- its purpose? To train its algorithms to understand the human voice.

No. 2 A young software entrepreneur pitched him a great idea recently - his plan? Turn a $3 billion industry into a $3 million industry using his software (you read that right).

As the marginal costs of providing a lot of services (mostly online, but not all) tend towards zero, a lot of businesses are giving it away for free. But it's not just about free stuff, it's also about the radical re-configuration of business economics in a world in which the fans invade the pitch and play the game themselves. And not just economics - it's happening to politics, education, democracy, culture and an awful lot of other stuff besides:



And I happen to think it's glorious ...

2 comments:

  1. Thought you might be interested to know that they nicked this idea from TellMe.com , bought by Microsoft recently for circa 800m. Why is it important? because people are "dialing the web" via voice recognition. It has yet to really take off from a consumer point of view, but it might only take "one killer app" a la mobile browsing and iPhone.

    The idea of taking a billion dollar market and crunching it down to a 100m dollar market through new business models is something VC's are asking for because it shows their is an existing target customer with a proven spend. It is much harder to find a "blue ocean opportunity".

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  2. interesting Paul - I'd completely overlooked the Tellme.com deal. Also here is the url of the Google service (411 not 441 as in my post):

    http://www.google.com/goog411/

    Your point about VCs is great. I'm reading 'Four Steps to the Epiphany' by Steve Blank (a powerful how-to manual for any startup) and he makes the same point about the benefits of rule changing business models that outsiders can risk but not insiders.

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