Disintermediation - Getting Rid of the Middle Man

The new Internet economy is all about getting rid of the middle man. Part of it is about eliminating information asymmetry, so that all parties in the transactions have equal grounds, like real-estate sales (Zillow) and car sales (TrueCar) eliminating the privileged information withheld by the sales agents. Part of it is about providing an efficient virtual market place where buyers and sellers can mingle with minimal friction (Ebay). And yet other part of it is about new technological innovations enabling novel distribution mechanisms previously unthinkable (BlockChain).

Here are a few more examples that either have happened since the dawn of the Internet age, or emerging as new and powerful disruptive forces. 

• Newspapers - Middle man that edits and disseminates noteworthy information, now partially eliminated by Twitter and Bloggers (Huffington Post).
• Book publishers - Middle man that selects and distributes original writing from otherwise unknown authors, now partially replaced by self-publishing houses Lulu and Amazon Kindle.
• Taxi - Middle man that employs drivers to transport people, now threatened by Uber that connects drivers and passengers directly. 
• Hotels - Middle man that manages empty rooms to host travelers, now partially replaced by Airbnb that connects unused room owners with travelers directly.
• Schools - Middle man that employs teachers to educate students, now threatened by online P2P education services like Coursera and MIT Open Course Ware, which connects people desired to learn with teachers and knowledges.
• Cable TV - Middle man that licenses video entertainment and redistributes to consumers, now threatened by both new distribution technologies (IP streaming) and bundling business models from Netflix, as well as original content owners starting to serve consumers directly as streaming technologies mature, such as HBO, CBS, Univision, NBA Sports and Starz.
• Banks - Middle man that makes a living by collecting deposits from people that have extra to save and lending it to people who needs cash, now threatened by peer-to-peer lending such as Lending Club, peer-to-peer payment Paypal, and crowd funding Kick Starter.
• Credit card - Middle man that runs proprietary payment networks and charges on-average 3% transaction fees for the convenience of money transaction between consumers and merchants who want to avoid cash handling, now threatened by decentralized payment network Block Chain, and its virtual currency BitCoin.
• Notary Service - Middle man who is authorized to perform numerous legal formalities and record keeping, now threatened by distributed Blockchain ledger and services like Proof of Existence.

So if you want ideas for starting up a new company, think about how you can eliminate the middle man, or any middle man.


image credit Ahmad Nawawi

Develop An Idea Into Fundable Business

Every business starts with an idea. Not every idea turns into a business.

The purpose is to filter, refine and develop ideas into a fundable business. Apparently, many people have spent time thinking about this. Evan Williams article "Will it Fly" is a useful one to start. The following is the methodology I will embark for that purpose.

1. Passion

It's going to be a tough journey. You may as well do something that you care deeply about. I believe that education enables and enriches people; thus education changes lives. People change the world; thus education changes the world. I am going to stick to that.

2. Market

The biggest market, or rather the biggest potential impact in education is where the most people are. That is clearly China. Just English language training itself is projected to reach $13.6 Billion dollars in 2014.

3. Making money

Sustained impact comes from sustainable growth. Sustainable growth requires valid, proven business model, where added value per users is larger than average acquisition cost per user. Unless incoming traffic is astronomically high, advertising is not going to be the solution. It needs to be one of transaction, subscription, or lead generation.

4. Validation

The idea needs to be validated, i.e. there is some dude, who you can name and locate, actually willing to reach the wallet to get some version of your product offering. Find the dude and offer him "a solution". A great example, which was used 10 years ago for Zappos was, to just take pictures of shoes from other people's stores and offer them online.

5. Secret sause

Is it possible to build one aspect of the solution exceptionally well so that nobody can compete with. It must be a dimension that real customers actually care about.

6. Scalability

How difficult to scale the operation, hardware cost, salesforce build up, customer support team?

The ideas will be going through this methodology, filtered, refined, and developed. The eventual results will be published in a later post.

Idea 50: On Demand Boolean Satisfiability Cloud Solver

The Boolean satisfiability problem, though barely encountered in every lives, has wide applications in software engineering and mathematical optimizations, in particular the problem of formally verifying the correctness of software and hardware. See the wikipedia page for an introduction, and paper written by Joao Marques-Silva on "Practical applications of boolean satisfiability".

The idea is to provide a web service, such that anyone can input a Boolean expression in terms of conjunctive normal form (CNF), and instantaneousness obtain the result of whether the expression is satisfiable. For example, input the following expression:

(x1 + x5 + ~x3) (~x6 + ~x2) (x2 + x3 + x4) 

where '+' represents Boolean OR, and '~' represents Boolean complement; the result will be a satisfying assignment (one of many) to the 6 variables involved.

In addition to HTML web interface with manual input, a developer's API service will be provided, where software programs can make remote requests to the server and supply an encrypted string of Boolean expressions, while the server respond by solving the problem instance, a satisfying assignment in the satisfiable case and a simple "no" in the unsatisfiable case. In some cases, delay may be encountered if the problem instance is large and requires large computation time.

The business model is to charge based on the bandwidth of API usage, or the amount of CPU cycles involved.

Update: the SAT solver itself could be implemented using current programming language Erlang and deployed on a large set of computer nodes.

Idea 49: Live Web Interactions With Video Chat

The popularity of Chatroulette shows that plenty of people on the Internet are eager and ready for live video interactions with another stranger. Why not? People are social animals.

Emerging technologies not only provide platforms for massive live video interactions right in your web browser, like Tinychat, but also providing API's that enable web developers to easily embed video chat boxes into every page of your website, like Tokbox.

These technologies will, along with upcoming HTML 5, open up a new world of rich, interactive, multimedia web, where the possibilities of applications are only confined by your imagination. For example, dibake.com is a new web service that enables live video debate, along with a dichotomy of user opinions, on any given subject, from political to scientific. Or, go see a psychiatrist with a virtual therapy session online at Pretty Padded Room. 

Well, not to mention the most important face-to-face interactions: education. This opens the door to a potentially disruptive force to change the way education is done.

Idea 48: Keyword Group Chat - Real Time Twitter / Quora

Ever had a question about something, could not find it online, then post it in a forum, or Twitter/Quora, and painfully waiting for someone to reply? What if you can have instant communication with a person holding the right piece of information, whenever you wanted it?

The idea is to provide an infinite amount of real-time chat rooms organized by key words.

Type something on your mind, "laptop", "heroku", "health insurance", "games", "Chinese food", the related sentences or key words that other people are typing in real-time will start to show up. Along with the sentences are chat-rooms associated with the sentences. You may choose to join one of them, or create your own, while letting all the people who are interested in similar topics know.

It is not the chat room in traditional sense, where you look into a category and see what are the rooms in there. Here, you type something and find related things that are happening in ALL chat-rooms in real time. On the technology side, this may require some complex real-time reindexing, however, demand is the mother of invention, right?

As the user base grows, businesses can establish real-time customer service reps answering questions, and because the common information is shared among all interested participants, the rep redundancy can be kept at a minimum.

Please let me know if you are interested in implementing such an app.

Idea 47: Voice Enabled Auto Tweet

I like one thing about human nature that is bringing a lot of motivation for technology innovations -- laziness! Yes, we are lazy, and we invent things to justify being lazy, which is good.

Today's idea is for all those lazy Twitter-holics. You don't have to type anything on the keyboard in order to Tweet your status. Just speak to the application on iPhone, or other mobile devices; the voice recognition software will translate the sentences to text, making sure it's within the 140 character limit, then transmit to Twitter server.

What would make it more interesting is, if it can understand emotions, and transcribe that into Tweets as well. Make a laugh, now you have "HAHAHA", or ":D" in your Tweets. That would be fun.

Or, how about automatically discover URL links? Whenever you say "Guy Kawasaki blog", it finds the URL and brings that link into your Tweet.

Lazy is good; lazy motivates innovation.

image credit Louise Lazell

How To Generate New Ideas - Part 1

In this intriguing video presentation at MIT, Prof. Patrick Winston summarizes his recent research work on how to make computer smarter by developing algorithms to learn basic reasoning and associations, which he call "common senses".

The key insight is that creative thinking process of us humans, is not a linear progression of words or ideas, but rather a complex combination of images, languages, symbols, dialogues, and interactive feedbacks.

He summarizes four things to do in order to become smarter, which I agree and think are also the key points in coming up with creative new ideas.

1. Take notes - The act of taking notes forces us to reason about the thought, and use the logic of language to formalize the thought. With an iPhone in my pocket, it is now easier than ever for me to take notes anywhere, any time.

2. Draw pictures - We think with images. Even with things we have never experienced, we use our imagination to picturize sequences of images, no matter how blurry they might be.

3. Talk and imagine - We learn by talking. There are certain logic reasoning skills we acquire in our childhood only after learning how to talk. Talking not just solicits feedback of your ideas from others, but yourself also.

4. Tell stories - Life consists of stories. Ideas are illustrated best with real-life stories.

The video is rather long, but worthwhile to go through. If you're pressed on time, then check out the conclusions section, at around 41 minutes into the presentation.

video source MIT world

Idea 46: Free Local Public Transportations

Today, I took the ferry between Wall Street and Staten Island. The view was simply amazing, blue waters and city landscape, under the bright sparsely decorated sky. I would say this is one of the must-do's for anyone visiting New York City.

Even more surprised to me was that the ferry is completely free, running every 30 minutes with heavy traffic, 7 days a week. Similar ferry in San Francisco, between the Pier 39 and Sausalito would have costed $22 round trip. Salute to the transportation department of NYC!

This got me thinking, why should we pay anything at all for local public transportation?

Local city buses, subways, ferries, should and can be made completely free! This would encourage every commuter to seriously consider abandoning driving, thus reducing our carbon emission, eliminating highway congestion, resulting cleaner air and better lives for all.

The online world has gotten used to free services with ads support. Why the same model can't be applied to public transportation? Make some creative use of the empty inner walls on the bus, in the subway, and in the stations. Free services will guarantee a huge spike in the amount of people taking these buses and subways, and thus the amount of eyeballs, which increases the value of these ad spaces also.

Let's learn something from the Staten Island ferry, and make public transportation free!

Idea 45: Record And Share Your Life Style

iPhone is bloody useful. We touched merely the surface with idea on personal metrics for diet optimization, and idea on real-time route sharing for smart carpooling. Now with people sharing daily meal pictures on Twitter, it might be useful simply to record and share your entire life style.

That means recording the places you visit, thing you do, media you consume, people you befriends, what, when and how. The new iPhone app will have the following:

A push button to record the current time and place, and the reason you're here. It might takes a bit of discipline to form the habit of writing down the activity whenever you visit somewhere, but that might just prove useful. Over time, you'll leave a trace of footprints as to how you lived your life, what you've learned, what you did right, or wrong. It might help if there are pictures annotation as well.

Another button to start and stop the recording of real-time routing trace. When started, the app will intermittently query the GPS for current location, and record the complete travelling route, until the stop button is pushed. Want to share your shortest driving routes? Want to share your favorite running tracks, hiking tracks, biking tracks? This is the way to do it!

Life is short, interesting, and full of excitement. Why not record it, share it, discuss it, and pass it on?

image credit omar eduardo

Six Things To Do With Your Brilliant Startup Ideas

You've got a brilliant idea for startup. What do you do? Hopefully this article will give you some ideas.

Before we jump in, let's make a few things clear. First, search around and make sure someone else hasn't already done it, because the same old ideas do get picked up again and again. Martin Zwilling has more to say about these recycled ideas.

Next, you probably heard that you should not hide your ideas in the closet. Chris Dixon explains why in this excellent article from both an entrepreneur and investor's point of view.

Knowing that the market for ideas does not exist, you can not sell it. (If not convinced, Joshua Gans' research paper may give you some theoretical grounding.) The best thing to do is probably find a partner, start a company, and make the idea work. But before launching the effort, following are six things you might consider.

1. Cultivate you ideas with community support

The best ideas usually emerge after a few rounds of brain storming, iterations of prototyping and tuning. The concept of real-time search was latched on only after many people have used it and explored for a long time. So iteration is useful. Embarkons.com is a social network platform for people to share, cultivate, and tweak ideas. There's even a market place for mature ideas to eventually find funding and launch projects. In addition to finding feedback and getting insights from other peoples' ideas, you may find biz partners as well.

Similar sites include Ideablob.com and Ideazinger.com. Ideablob also has regular $10,000 challenge, which picks its winner based on user ratings. It would be a nice bonus if you win.

2. Get funding from the crowd

If you are in the mature stage of an idea and want to seek funding for launch, there are a few places to look without bothering a VC. Kickstarter.com has a very interesting "all or nothing" model. You may launch a campaign for a pledge of X amount within say 3 months. If enough people pledge, you get the deal, or else, you still receive plenty of feedback and encouragement.

Similar sites include Joel Yatscoff's crowd-funding of ideas.

Update: Open Fund wants to fund your startup ideas related to the web and other emerging technologies. The first call for applications is open until Sep. 30, 2009.

3. Get noticed with a big corporation idea

If your idea is more on the improvement of a big corp guy, you may try sharing it on an idea exchange site like innocentive.com or ideasxchange.com, and hope it gets picked up. Chances are slim though.

Or, if your ideas are specific, these smart companies have established channels just to tune in to you: Virgin's entrepreneur got a big idea campaign, Dell's idea storm, Starbucks my starbucks ideas. These guys are on the front-line of biz innovation.

4. Enter a biz-idea competition

I was amazed at how many such idea competitions are taking place at any given time. Most of them are local though. One of a recent buzz was put forward by perfectbusiness.com, who invited Sir Richard Branson to review micro-business ideas on Twitter, each under 140 character limit. All you need to do is tweet your idea in reply to @perfectbusiness with hashtag #micropitch, to get a chance to win a $2500 trip to L.A. for further elaboration of your idea. A really neat idea by itself!

If you're into B2B selling, then take a look at another ongoing $10,000 startup idea challenge launched by Chinese Alibaba.com.

5. Have some fun with impractical ideas which you'll never implement

Ideas come and go. Some are witty, funny, intriguing, yet you just don't know how practical it is, then come to halfbakery.com. As the creator put it, it's a communal database of poorly thought-out ideas for inventions. Quite a lot of interesting people hanging out there, and once in a while, there is something truly unique pop up.

A good site almost always has a clone. For halfbakery, it's whynot.net.

6. Twitter.com

Well, if after exhausting all of above, you still don't know what to do with your brilliant, original, world-changing idea, then just tweet it on Twitter.com, and tweet it again. Search people from the keywords in your ideas and tweet them. Good things will happen.


That concludes my short summary of things to do with your brilliant startup ideas. Hope you found this useful. If you find any other ideas on ideas, please, do contact me and let me know. Thanks.

image credit Cayusa

Idea 44: Stock Exchange For Residential Houses - Own A Piece Of My House

WSJ reported in May 2009 that more than 20% of US home owners now owing more than their houses are worth. If houses were stocks, they probably would have exited the long position by now. Why should houses be so illiquid?

The value of a company is extremely difficult to calculate, especially when intengibles are involved. In comparison, the value of a house should be much simpler. Why can't we operate a residential house ownership the same way as a corporation?

1. Let's have quarterly and annual reports. Fixed the roof, upgraded the appliances, or new carpets? Put it in the report. Let's have some debt, equity and cash flow numbers to back it up.

2. Partially separate the ownership and the right to live in it. Split the ownership into pieces so that anyone can purchase and invest.

3. Have a board of director and let the board decide major upgrades and home improvements. Of course, if you own more than 50%, you pretty much have the say.

It doesn't have to get so complicated by inviting thousands of share holders. In fact, issuing 20 shares can probably do the job.

Yes, this will likely cause some rapid fluctuation of home values, but no, it should be much safer than the hyper-leveraged mortgage-debt-equity derivative manipulations, which had disrupted the financial system in the first place.

photo credit seier

Idea 43: AdSense For City Resident Street-Front Windows

June 18th, 2003, the way people do business on the web changed for ever. That's when Google launched AdSense. It's such a powerful business model that captures the long tail of online publishing.

The real estate in big cities such as New York are expensive, for a reason, location! A lot of people go there. For the same reason, why can't we cash in from the location by renting out street-front windows for ads just because they catch a lot of eye balls?

Using a similar business model as AdSense, one can connect empty ad spaces from millions of apartment dwellers, to ad suppliers and agencies. With creative, artistic designers, this may as well put some additional coloring in the dynamic city landscape.

To put this idea further, in fact, yellow cabs have lots of ads, outside and inside. Smart marketers have noticed that ton of turn-overs in and out the cab, which means gazillion eyeballs. Hey, why not stick some ad on my car also? I don't mind, knowing that it generates additional income. :)

Ad is a form of information transfer. If it delivers that right piece of information to the one in need, it's beneficial to both and our society. Shall we have more ads, please?

photo credit bass_nroll

Idea 42: Relationship Analyzer - How Close Are You And Your Friends

How many friends do you have? Do you talk to them, or rather Twit? You may not realize, that the person you talk the most, share the most, connect the most may not be the one who you think is.

Have an algorithm to analyze your daily communication streams, Tweets, SMS, phone calls, emails, and then calculates, for each of your contacts, their degree of closeness from you.

Why is this useful? For a number of reasons, at least.

To set your priorities. What you want to achieve versus what you are actually doing. Have you called your mother lately? Call your mother right away.

To know yourself better. What is your biggest dream and untapped potential? If you're still unclear, the daily rumbling of yours might give some hint.

To discover friendship, and well other relationships. Who do you reweet the most? Who do you share the most tweet words, tweet links? If you chose to share the meta-data extracted from your streams, that may help the matching algorithm to suggest you some interesting fellows. (like an earlier idea here)

There might as well be other reasons that this can be useful. If you have one, do let me know.

photo credit loungerie

Idea 41: Object Tweet : Pulse Of The Real World

Make the world more efficient by giving any object the ability to Twit! Why, because we need the information, now!

A semiconductor chip: getting too hot when it's time to turn off your laptop and cool down a bit.

A computer: when a virus invaded, or a web visitor did something suspicious.

A house: the roof is leaking, get it fixed, dude; or, it's time to clean your drainage, kill the ants, change the air filter, mow the lawn, ..., whew.

A car: time to get the oil filter exchanged, and by the way, don't forget to rotate the tires also.

A train: bad news, but the next #1 train is delayed for at least half an hour. That would be a money saving tweet, since your time is billed.

A store: coupons, discount codes, new product releases, tweets, tweets, tweets.

and more ....

If only these can all be automated through Twitter, we will be less worrying and live longer. :)

photo credit foxypar4

Idea 40: You Daily Dose Of Bible Verse, Based On Your Twitter Updates

The Bible is rich of spiritual wisdom that can help you get through the most challenging part of life. Popular iGoogle app delivers a random verse to your desktop daily, but how do you know which verse is just the right one for your day?

Here's an idea. At the end of each day, your Twitter updates are collected, analyzed, and based on the keywords in your tweets, the most relevant Bible verses are extracted and presented to you.

In fact, not just your Twitter updates, your emails, places you visit, people you talked with, anything related to your day, as long as you can record it, can be used for analysis in the calculation. Another way to produce information from our lives. (see earlier idea about personal metrics)

As the Bible says:

Ask and it will be given to you; seek and you will find; knock and the door will be opened to you. - Matthew 7:7

photo credit Andy

Idea 39: Auto Page-Flip Music Reader - Kindle For Music?

A keyboard player would tell you that she has to get used to flipping the music sheet while playing. That can be annoying at times when the melody enters fast pace. How to flip the page automatically?

Here's an idea. Use a large screen electronic reader just like the Kindle DX.

A Bluetooth enabled foot paddle is wirelessly connected to the reader. Merely stepping on it would signal the reader to turn to the next page.

What would make it really interesting, is to have a music recognition software, which listens to the piano, or whatever instrument, as you play it. The reader would highlight the music note that is currently being played, and when it reaches the bottom of the page, guess what, it turns to the next page. :)

That would make music playing much more fun, wouldn't it? Further more, it would have tremendous value for educating young players.

Music cultivates soul and inspires ideas. Let's make music playing more enjoyable.

photo credit linh.ngan

Idea 38: 3D Virtual Shopping - When SecondLife Meets Zappos

Online shopping can get boring at times. Not any more, when you can visually tour the store in a 3D environment, ask a representative questions, and even shop together with your friends, not just messaging them, but you actually see your friends' avatar and your own together on the screen. Have you lived a secondlife?

That's the idea. The future of online shopping will replace the flat, static product catalogues with a full experience.

1. Interactive. You may compare different products as their 3D models are displayed side by side in the virtual shelf, just as they would in a real store. Hover your mouse over, and it will fly over with more details; hover your mouse over the lady, and a message box pops up where you can ask a question.

2. Social. Imagine your friends and you sharing the exact same screen over the internet. Point your mouse over a product, and your friends see them as well. Type a message, you can discuss opinions in real time.

3. Fit. Your 3D avatar has all your sizes, hair style and skin color. Try on a shirt and you'll see how it fits on your body. Best of all, no need to figure out what sizes to choose. (from an earlier idea.)

4. Fun. Music is played, chat exchanged, opinions shared. Even if nothing is bought, it's kind of fun.

At least my wife likes this kind of online shopping experience, although I have to admit, sometimes I still prefer the cold, hard google search box. How about you?

photo credit secondlife

Idea 37: Smart Waste Processor - Reduce Your Carbon Footprint

It's amazing how much waste we generate, just the U.S., more than 250 million tons per year. It takes tremendous resource and energy to process them. If only every household starts to reuse, reduce and recycle!

Here's an idea. A simple house-hold appliance that helps you reduce waste. It consists of four parts:

1. A composter with worms to process vegetable scraps, green wastes, and the paper waste, such as junk mails. Yes, it does work.

2. Mechanical compressor that compresses the aluminium cans, plastic bottles, and other recyclable wastes, so that they are easier to carry and process later. Remember Wall-E's job?

3. A anaerobic digester to convert food waste into extra engery. Well, it does work at scale in Oakland, CA, but may take some time to bring the technology to every home.

4. Dynamic monitor that displays how much carbon footprint you are currently producing, and saving, very much like this one.

In conclusion, if every household owns such a device, we would, roughly, reduce the waste production by as much as 50%. This is a win-win-win situation. :)

photo credit Don Solo

Idea 36: Call My URL Since I Can't Remember My Phone Number

Since I'm not good at numbers, I find it annoying having to remember a separate phone number in addition to the name of a company, or service. Why can't I get my banker on the phone by just calling wellsfargo.com, or speak to a FedEx representative by calling fedex.com?

That's the idea. No more writing down a 7-digit phone number, or remembering 1-800-call-att. Download our application on your smart phone, you'll be able to reach the default phone line by just typing in the URL.

Well, there are a lot of details that's needed to make it happen, like registering a phone number to a domain name, connecting to the phone line from the app, etc, but that's for the engineers.

In fact, if all domain owners register on Skype, it would have been an easier route. Yes, let's register our domain names on Skype and connect to our phones. :)

photo credit sachman75

Idea 35: Everything Controversial - The Wikipedia Of HotOrNot

Can't seem to find a central place where people's opinions are aggregated for all controversial issues. Religious articles are frequently ousted from Wikepedia; one can only find average looking pictures on hotornot.com anyway. People express their opinions on blogs, comments, taking polls with surveymonkey, but how to mine that data and generate useful information and insights?

Here's an idea. Host a stackoverflow-like user generated content site, where users can propose a controversial issue, post opinions and articles on any existing issue, or rate other users' articles. The end result is an aggregation of user produced, user rated, meta-tagged opinions and reference information for any controversial topic.

It's different from urtak, where you see no user comments or reference links except the percentage numbers; it's different from whereistand, where, similarly, you hardly find people's rationales, or the reasons why people take a particular stand on a particular issue. In other words, the underline wisdom of why people make choices for a controversial issue is missing.

In sum, the new service will not only provide the statistics, but also references, information on the backgrounds, and most importantly, the wisdom behind people's minds. As I have commented before, the user voices can be extremely valuable and represents a potential gold mine.

Update (8/23/2009): dibake.com provides such a forum for user rated discussion on controversial issues.

photo credit slworking2