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My 2008 Trend: Making Things

MAKING THINGS: CREATION – INVENTION- DIY

‘New model of media production is recursive and ongoing, and it involves the media to consume in production at various stages.’ S. Humphreys, 2005.

Nowandnext.com and Future Exploration Network have once again collaborated to create a trend map for 2008 and beyond based on Shanghais’ underground routes. I've chosen to develop an interesting trend which is Making Things.

Making things is all about creating something, as a result of your hands or mind in order to save money, to make money or just to have fun.

The rationale behind Making Things is to embody the spirit of DIY Culture - an attitude of independence and self-reliance. According to Wikipedia, DIY means “Do it yourself or DIY refers to the practice of fabricating or repairing things on one's own rather than purchasing them or paying for professional repair.

Making things requires creativity and innovation. And by using this self-expression concept, business ideas can be generated through providing a platform for the creators to express themselves or present their works, such as Blogs do.

People want to prove to themselves that they are capable of making something, and if they think they are talented, they are willing to show it to the entire world! Internet has allowed people to express themselves and consequently created this tendency. You just have to publish a page and the world can see you, it’s that simple. So why wouldn’t I allow myself to create something and make it know?

Making things- Being Part of the Creation Process

Increasingly, consumers want to participate instead of following. They want to be a part of the creation chain. They are switching place with creators, designers, publicists, painters, photographers and so on.

Several business models have risen from the concept of DIY: Do It Yourself! One’s can be a photographer and publish pictures on Flickr, be a creator and design shoes on Eshoe, manage a store on Magento, putt in location objects on Zilok. And all this apart of work and private life!

Internet users are taking part of the creation process once reserved to professionals. They choose the colour, model, fibber of their object and can even be rewarded for having the best design.

Customize your Nike (NikeID), Converse (Converse One) or woman shoes (Eshoe).
Design your dress on Catwalkqueen.

It is even possible to design your Kleenex.
Personnalizing all kind of objects with your own picture is easy and fast.

Making things- Becoming an Entrepreneur

However, participating to the creation process isn’t enough; users sometimes want to take the place of the Creator. An army of consumers are turning entrepreneurs. Why? Internet gave them the possibility to do whatever they want. Having more insurance, the new generation (also called Generation C) has wings and feels capable to accomplish their dreams.

What Internet allows users:
- Make their TV Channel (Createtv; Vpodtv ).
- Create their website ( Blue Voda).

- How many websites promises mountains? They all have the best strategy, the best tools, best advices. The buzz is to become an entrepreneur. Take a look at Buzz Booster; Lifestyle Entrepreneur or InternetMillionaireStrategy and you'll understand what I'm talking about.

- Opening a merchant shop is possible: (Zlio; Magento; Createyourshop).

The Network offered by Internet allows Entrepreneurs to sell their talents or hire easily others: GetAFreelancer; Contracted Work; LinkedIn; VisiblePath are some of the websites creating contacts.

Making things- Innovating

This trend is also about how to combine technology to the ability of making things. Generation C, having fun in creating and customizing anything they want, are stepping the next frontier: digitally designing products, then having them turned into real physical goods as well. Who never fantasized in becoming the future creator? Today, with digital tools, you can make things and sell them to the world!


- Ponoko is the world’s first personal manufacturing platform. It allows to convert an idea into a material object and to sell it. It’s that easy! The purpose is bring the manufacturing to the mass. Anyone can become a creator into 5 steps: 1.Imagining; 2.Designing; 3.Making; 4.Redifining; 5.Selling.

- Swedish design group FRONT has launched Sketch Furniture, which is a method to materialize freehand sketches. Pen strokes made in the air are recorded with Motion Capture, and the resulting 3-D patterns are output digitally to a laser sintering machine. Over several days, the machine produces the object by shaping and hardening 0.1-mm layers of liquid plastic. Sketch Furniture is on view and on sale (about USD 10,500 per piece) at the Barry Friedman Gallery in New York.

- 3D Printer: An incredible invention is already on sale at 4995$ on Desktop Factory, while the company says the price will increase to 1000$ in four years. Is it the future of our dektops? Well, according to The New York Times, some 200 customers have already ordered the printer. 3D printer turns digital data from computer-aided design (CAD) programs, 3D graphics and animation software, and scanners into sturdy physical models. It reflects the demand of materializing objects. A return to “real” objects that you can feel is occuring. Making objects and having them at home quickly will somehow be possible! For now, however, the machine seems to have some limited applications, but think of the first camera or first television and you’ll realize that the future is here.

Making things- With hands!

As life becomes more virtual, people are looking back to the old ways of doing things, with the hands: painting, pottering, gardening, creating objects is still a hobby! At least, they are able to touch the things, which they can’t in the virtual life.

Cooking has never been so trendy: Group cooking sessions, cooking coachs, and speed dating meetings around cooking are in vogue. Community groups on the Web as blogs share their interests. It is a way of meeting other people with the same hobby and hanging out.

How it will influence E-Business Models

The trend of ‘making things’ has already influenced the e-business models.

With the quick spread of Internet, e-business has been entering a new phase: Instead of the basic models B2B, B2C; the world has seen the potentiality of Internet.

- Business to Business (B2B) e-commerce refers to electronic trade or partnering between businesses over the Internet, and it involves businesses dealing with each other as opposed to their customers. (Ex. Alibaba.com).

- Business to Consumer or B2C e-Commerce for short refers to a typical e-commerce site selling products or services to end-user consumers or individuals rather than to businesses.(Ex.Amazon; ZShops).

The ‘Making Things’ trend has changed the way of selling on Internet. The Consumer To Consumer model (C2C) appeared in 1995 with the launch of EBay and spread out.

Direct sales can nowadays be made from a consumer to another consumer. No need to have merchants anymore! Everyone can become a seller. Looking at future, we can be sure C2C models will increase with the number of Internet users. The “DIY” trend is becoming so strong in the spirit of Internet that we can even talk about a Making Things E-Business Model. In fact, some website are entirely dedicated to the creation of something (Ex: Artiz; Chicko Shoes); or to the customization (Ex: customize your life; customize.org).

In existing e-business models, the option of “Making Things” tends to become obvious. If you do not offer an extra tool to internet users, you’re not ‘In’. Our days, an effective e-business model should enable users to express their creativity by customizing or creating their own content.
(Example: Starbuck offers to costumers the option of customizing their card on Starbuck's website).

The modern Web is increasingly turning into a Web built by its users. The ‘Making Things’ phenomenon on the Web is being driven both by the technical tools offered to easily create something out of it, but also the comfort with which users have with controlling all aspects of the Web.

Future

Nevertheless, like all new things, particularly on Internet, it's likely that the long-term advantages and weaknesses still aren't well measured. While it sounds compelling to let users innovate using your content and services on the Web, theoretically letting it be used in thousands of creative news ways, there are surely important things to consider when you prepare to embrace this new model:

First, there is a danger in letting users have the entire control of a website. Some websites completely depend on the content that the users publish, and will stop turning without them. (Ex. EBay; Facebook; You Tube). Some websites have a short life because the consumers quit and turn to another concurrent (Ex.The decline of Xanga and Hi5 after the launch of Facebook).

In another hand, the idea of making things exists from long ago, and now that people finally realized the power of Internet and the options offered, this trend is still going to grow up. We can even talk about a New Age of Internet where Customers dictate their own roles and expectations.

This trend is indubitably sustainable and enables the creation of infinite new e-business models by mixing the tools and ideas. Maybe we will one day be able to bake online and send a cake to our mother-in-law, who knows! In fact, expect MIY (MAKE IT YOURSELF) and then SIY (SELL IT YOURSELF) generation to become increasingly sophisticated in the next 12 months.

Ventes Privées

Ventesprivees.com is a website created in December 2000, which works according to an exclusive club affiliation model.
The e-business is one of the most important French web success story, showing results deserving the giants of the e-business: more than 3,6 million visitors in the first quarter 2006, 2,4 million members, thousands of sales a day for a 250 million euro benefit last year!
Ventes-privées.com is a subsidiary of Oredis, a wholesaler since 20 years, and the inventor of the special on-line sale. The Director of the company, Jacques-Antoine Granjon, invented the concept: The unique combination of exclusivity, selection, price, and value-added merchandising.

The registration to ventesprivees.com is totally free but requires the sponsoring of a friend to be able to go into the "customer's circle" of the site.
By this way, customers have the feeling of being privileged.

In association with big brands, ventesprivees.com organizes special limited sales, with a last time period around 2 to 3 days, in the course of which products are discount from 30 to 70 %. Brands, rather expensive, diestock their unsold articles in unbeatable price.
Members can directly buy goods on the website without having to move to the shop. The payment is made by credit card.

Problems that it solves:

For Customers
-It allows customers to have access to branded goods at very interesting prices. (Example: a Dolce & Gabana t-shirt at 35e instead of 150e).
-The access to this website: customers receive invitations directly by e-mail; it is an easy way to get informed of all the sales and chose the one they want.
- Members can directly buy goods on the website without having to move to the shop. The payment is made by credit card.
-They find various products which customers don’t usually buy especially towards the price.

For Partners
By destocking their products on Internet, luxury brands have the guarantee not to see their goods lost in stocks as it often happen in the real world.

For the Owner of the business
The owner reduces financial risk; the company doesn't take possession of any closeout inventory.

The revenue sources:
-Partnership with brands.
-Getting commission for each online sell: The stocks of unsold articles of the brands spend few times in the warehouses of ventes - privée.com. If the margin is reduced for the reseller, so are the expenses. Ideally, products are even sold before arriving in warehouses. The generated cash is important, customers paying immediately, while products are delivered later.

It is a unique model for the web

Sustainable?

Ventes-privees.com is a successful Business Model. According to the increase of the number of monthly sales, the success comes from the fact that this Business Model is an innovation. Knowing the orders in advance also allows to finish the stocks .
Due to its power, Vente-Privee.fr is the only actor able of making daily sales of more than 30.000. Many brands signed a contract of exclusivity with ventes-privées, which strengthens the power of the website.
However, the e-business company has to manage the variety of 450.000 annual references and face daily orders about 30.000 in rush hour. The challenge is to constantly adapt its plan and its logistic tools, to the demand, to be sustainable.

1 article which describes the strategies and growth of the company:
http://www.businessweek.com/globalbiz/content/jan2008/gb20080111_222659_page_2.htm

Examples of businesses now using Ventes Privées, within their websites.
- BMW set up "The BMW Short-lived Offers" on the web site www.lesoffresephemeresbmw.fr.
From November 27th until December 8th, 2007, the Internet users can acquire vehicles of the brand by benefiting from privileges (a total cover in terms of reparations, a 48 month guarantee, and 60 000 km is available for only 1 euro more).

- Achat VIP, Surinvitation, Club-privé, Linvitedesmarques, EspaceMax, and Dealtonic became the principal challengers of vente privée.

- Having a web site since 1997, Téléshopping, the subsidiary of TF1 launched since September, 2004 a website of limited sales called SurInvitation.com.

What's a mash-up?

It is the capability to mix and match data and applications from multiple sources into one dynamic entity. You put opposite things together= Creates a new product.
The term mash-up comes from the hip-hop music practice of mixing two or more songs.
Timbaland is good in mash ups, mixing different styles of music to rap.

Here's a sampling of mash-up Web sites:
Panoramio: a mash-up of Google Maps and geopositioned photographs of locations
Hiking Outpost: a mash-up of Amazon and online hiking information resources
Flash Earth: a zoomable mash-up of Google Maps and Microsoft's Virtual Earth
Diggdot: a mash-up of Digg, Slashdot and Del.icio.us that integrates and filters content
HousingMaps: a mash-up of Google Maps and Craigslist rental ads that displays geographical information for rental properties.

Google My Location:

Housing Map

Google Map My Location

The Freemium Concept

Rather than bragging about how insanely great its VoIP products are, Skype makes its users insanely productive by letting them talk with any other user worldwide for free. The company makes money by charging users for connecting to phone systems outside of its network. It's a freemium model: Attract users with free services, then charge them a premium for special features.—Bruce Sterling, "Blogging for Dollars," Wired, June 1, 2006

The Freemium concept, whose name was suggested by Jarid Lukin of the Flatiron portfolio company Alacra. appoints a model of monetization in which the basic service is free and the advanced services are paying. But nothing is totally free in this world. Companies which apply this model, offer customers a basic service allowing them to live the necessary experience, to have their opinion about the product or service. Some enterprises also offer all the services but for limited period.
The Freemium model is based on the experiment of the frustration of the purchaser. They create some frustration when the trying user will arrive on the verge of the available features or of the trial period. Thus, by proposing the satisfaction within just a click, companies have strong chances to convert the non paying user in a customer.

Examples of businesses using this model:
- Softwares (with trial versions).
-Meetic : You suscribe for free but have to pay to see complete profiles.
-Second Life;

-Skype.

Advantages:
- This model is a very interesting mean to make its service known to prospects.
- Attractive for web native services to grow fast.
- It a way to get fast purchases online.

Disadvantages:
-It can appear as a trap for some consumers, knowing that sellers play on the clients’ feeling of frustration. They sometimes realize some fast-taken purchases online. But nobody is ever forced to click, no?
-Sometimes customers don’t understand why they’ll have to pay for a service that they got used to have for free, and it can be harder to convert free consumers to paying consumers.
-E-business companies using this model have to find the just balance between the features offered in the free version and the paying offer. Indeed, the supplier has to be totally satisfied to envisage paying.

Sources: http://en.wikipedia.org/wiki/Freemium_business_model

http://www.contentmatters.info/content_matters/2006/05/whats_in_a_word.html

Easy "Model" of Yield Management

Easy Group success story:

The easyGroup, used buy million of consumers all around the world, was founded in 1995 by the Greek entrepreneur Stelios Haji-Ioannou, well-known as the pioneer who changed the European aviation scene for the benefit of millions of consumers.

The company was based on a basic principle:
I) Pick a market where pricing is high and low cost service.
II) Delete all extra-services: No reception, no printed tickets, no free services on board, one single class.
III) “Out-source to the consumer” (ex. book yourself easily online).
IV) Use the cost savings to make advertising by offering real cheap prices (ex: New York- Paris for 199$).

The company started it activity with a low-cost airline company called easyJet, offering flights between Luton and Scotland. 1997 is the year of creation of the easyjet.com. The successful process is in motion.
In 1998, as the airline company becomes a brand, Stelios has the idea to franchise other businesses using the same format.
He works on brand extensions and founds many subsidiaries of the EasyGroup:
easyinternetcafé, easyCar, easyCinema,easyHotel, easyBus.co.uk, easy4men, easyPizza, easyJobs, easyMobile, easyCruiseOne, easyCruiseTwo, easyWatch, easyVan…

The EasyGroup concept based on the Yield management principles:

Stelios Haji-Ioannou adapted the Yield Management principles to his company by rationing the availability of lower-priced units in order to maximize gross revenue.
The Low Cost Company adopted a hard-line strategy to face Full Services companies. Their stratagem has a specific constitution, adapted to the majority: bookings by telephone or internet, offering dynamic prices reflecting the demand at the moment, without limitation for a targeted clientele, looking for low price rates for a "unique" service - with “no” extra.


How? Predict demand for a given date to sell the most possible units for the highest possible rate

The easy model’s purpose: Democratize services that were once only accessible to a minority, to most customers. Thus, the brand targets the mass: More, more, always more!

The easyGroup Brand manual: http://www.easy.com/PDFs/easyGroup_Brand_Manual.pdf


Advantages

For customers
- lower prices. All prices are quoted one way to all customers.

-Possibility to pay only for the service.

-Flexibility: If a customer is willing to pay in advance, he can find attractive prices.
This gives him the opportunity to save money.


For Suppliers

-Fair quality of service: you pay for what you get.

For Partners
Becoming partner of easyGroup gives the advantage of being part of a famous Group. It is possible to buy shares of a business, or buy a franchise of the group.
But the partner has to show some financial requirements:
- Have unit cost-saving of the order of 50% compared with the best in the market;
- be possible to yield manage the price;
- Have the potential to increase utilisation rates compared with the business.

For the owner of the business
For Stelios Haji-Ioannou, the business gives him plenty advantages. He invested 5 million pounds of sterling in easyJet, but he extended his business and his companies won in value.
For example, every cybercafé requires 4 in 6 months before it begins to bring back some money. All the companies of easyGroup are independent in term of financing and management. EasyJet is already profitable and is introduced in stock exchange.

Type of buying situation:

EasyGroup adapted its commercial methods to the new technologies, in particular the Internet, to gain in competitiveness and surpass his competitors. Web allows the group to decrease appreciably the price of the goods and the services which they propose Services are selt through the internet media that reduces costs and increase customer flexibility.


Revenues of the Group come from several sources:

-First selling services and making benefit from the merge won buy selling a huge quantity of services;
- Than it comes from selling shares, licensees or franchisees of the easy brand to selected partners.


Is EasyGroup a sustainable brand? Not sure…

EasyGroup is nowadays more than a simple brand, it became through its 17 extensions, a real empire! Although the best success of the brand remains the first launch of easyJet, the group became increasingly self-sufficient.
But in my opinion of consumer, my first impression of this group left me sceptical. I’ve kind of felt that we (consumers) were taken for dumps. Some extensions of the concept worked quite well for all businesses related to tourism & travel: easyCar, easyCruise and easyHotel.
But it quickly became a phenomenon of cloning for others businesses: easyPizza, easyWatch, easy4men…What else? Who would seriously like to buy those awful watches even if the price is cheap? http://www.easywatch.com/

In my opinion, the group should avoid launching new businesses so quickly and try to keep the seriousness of the brand to be sustainable.

easyHotels, how they increase profit by offering reduced prices

Stelios used the acceleration of needs and possibilities of movement and accommodation of the clients to apply the Yield management principle to easyHotels: In July 2005, Stelios launched his first easyHotel in London, offering rooms as cheap as $35 per night. According to Stelios, the rooms are small and sparse, similar to an Amtrak sleeper car or a berth on a yacht.

- Maximize the space: Ranging in size from 25 to 75 guestrooms, easyGroup is pursuing opportunities at various city centers.
- Offering no "extra" service: There is no bar or lounge or any shared public areas, except for a reception desk, and only one member of staff will be permanently on site.
- Having a booking system, allowing to anticipate the demand and to book maximum of rooms (anticipate vacant rooms).

easyHotels definitely target people in need of a cheap bed … and only a bed! They offer a low cost budget for a hotel but there are obviously hostels (with more services) that could compete with this rate.

http://en.wikipedia.org/wiki/EasyGroup#EasyHotel

Best wishes!

Dear all,

May this New Year bring newly found prosperity, love, happiness and delight in your life. -

Happy New Year!

Imen