MuApp: The Brand-Customer Hotline (Part 1)

Micronbox and More

In a previous essay “Building the Hotline Right”, I wrote:

Until now, brands had no easy way to bring interactivity to their push messages. AMP in email changes this. With interactivity can now come incentives for actions that marketers wish to drive. Atomic Rewards via a pan-brand loyalty program focused on the customer’s time (rather than money) is the way forward. The same idea of micro-rewards can be extended to other push channels for an omnichannel hotline. In the future, a WhatsApp-like inbox exclusively for brands (what I have termed as Micronbox) can further improve the hotline experience. Taken together, AMP, Atomic Rewards, Omnichannel and Micronbox thus become the pillars for bridging the chasm and building the hotline.

… The customer endpoint of the hotline is an inbox – the email or SMS clients on the mobile or desktop, or WhatsApp. That’s where the brand messages come. The hotline is about making the messages interactive and incentivised to enable not just content consumption and conversation but commerce … What is needed is a new kind of inbox for hotline-type engagement and interaction between brands and customers. This is the idea I call “Micronbox.” … The Micronbox completes the picture: a hotline is thus a 2-way connection between brands and customers, built using messages with AMP and Atomic Rewards, expanded to supporting omnichannel engagement. The micronbox becomes a repository of all these messages (microns) and conversations – just like WhatsApp today for our 1:1 and small group chats. Together, they can help drive brands to profitability by eliminating the AdWaste and enabling the 4 Rs of retention, repetition, referrals and reactivation.

… If brands can build their hotlines right, especially with their Best customers, they will find that they no longer need to keep spending big bucks on wasteful and cash-guzzling new customer acquisition. That money freed up can power better relationships with existing customers – and help with the bottom line. Profits don’t come from newly acquired customers; they come from existing customers coming back for more and bringing along their friends. In a world where capital is no longer free and investors are demanding clear paths of (growing) profitably, the hotline can become the marketer’s best friend in delivering customer delight – it not only bridges the chasm between acquisition and retention but is also the crux of the profitable growth challenge CEOs and CMOs must solve for.

In “The MuCo Future”, I wrote: “In the new world of two-way engagement where customers are digital and can engage in myriad different ways with the brand, Loyalty 2.0 and MuCo provides for a deeper and better relationship – a true, long-lasting ‘friendship’ that transcends money. Web3 elevates MuCo to beyond the control of a single entity; it makes the community central. Brands (with their marketing managers) and customers can come together to create a better relationship without Big Tech as the intermediary. A trust platform based on Web3 principles and the blockchain can serve as the perfect foundation. Welcome to the Mu-niverse!”

In this series, I will build on the “Micronbox as Hotline” idea. I will explain how the Micronbox needs to become much more than an inbox for brand-customer engagement. It will need to become a Web3 wallet storing Mu (crypto tokens) and XRTs (eXtreme Retention Tokens), and a gateway to the µniverse (Muniverse, with the Mu  Marketplace and Exchange). The prize for getting this right is the $200 billion Adwaste which can be split between brands and customers, creating a win-win for both.

Thinks 610

Noah Smith reviews Brad deLong’s forthcoming book (Slouching Toward Utopia): “Why did the world become rich? DeLong argues that only after 1870 did technological progress accelerate to the point where it managed to outstrip human population growth, thus freeing humanity from Malthusian constraints. He attributes this acceleration to three key innovations: the industrial research lab, the modern corporation, and steamship-driven globalization. I would have liked a bit more definitive proof that these were the key causal factors, but DeLong’s arguments in favor of them are fairly persuasive. With these pieces in place, DeLong shows that total factor productivity — which he calls the “value of knowledge index” — accelerated dramatically right around the time that these things appeared. That acceleration, according to DeLong, continued up until the mid-2000s; thus, he conceives of 1870-2010 as a “long 20th century” characterized by rapid productivity growth and the social and political upheavals it caused.”

Lenny Rachitsky on how to kickstart and scale a consumer business: “Step 1: INSIGHT: Come up with your idea. Step 2: AUDIENCE: Identify your super-specific who. Step 3: HOOK: Craft your pitch. Step 4: REACH: Find your early adopters by doing things that don’t scale. Step 5: RETAIN: Iterate until enough people stick around. Step 6: SCALE: Build your growth engine.”

Nitin Pai: “I think parliaments do perform an important function: they allocate political power and confer it with legitimacy. Digital democracy will continue to need parliaments to make high-level political choices, allocate public funds and hold the executive accountable. MPs should have the power to depart from public opinion or expert determination. After all, they are not merely agents of their constituents, but consolidators of constituents’ interests with that of the larger collective. However, digital democracy will set baselines. Ultimately, the aim of such a digital upgrade is to assign the right job to the right entity: enable every citizen with an effective voice, aggregate society’s expertise in making laws and leverage the political legitimacy that derives from elections. Think of it as separation of competencies. The executive also needs to be re- imagined for the information age and that is a topic for a future column. But I think an overhaul of the parliamentary structure is overdue, and getting urgent by the day. Political polarization in the US, UK, France and India is perhaps masking an underlying dissatisfaction with the ‘system’ itself, even as China’s authoritarian model advertises its competent superiority. Unless it embraces the open and the digital, democracy itself is in danger.”

Web3 and India: A Wrong Turn (Part 14)

Maria Bustillos:

…The marvels of the internet multiplied, magic that by now seems unremarkable: a map of the world, street by street, in your pocket; instant translations from almost any language; a look-up service for every branch of knowledge; global, near-instantaneous news. Today’s internet is deeply woven into the world’s economies, media, politics, industry and social life, in good ways and bad.

A similar evolution is in the works for crypto. Blockchain, the technology that makes cryptocurrency possible, has the potential to be just as transformative as the internet innovations on which we depend every day, and industries like supply chain management, finance and pharma have already begun to find uses for it.

It’s possible to imagine a future where you might look up the fate of every tax dollar you’ve paid, and government corruption becomes all but impossible; where beautiful and important stories and music, games and art would never disappear from the internet; where, instead of being forced to rely on a big power company, you might buy and sell surplus solar energy from or to your own neighbors, and never face another blackout. Wherever tamper-proof, independent record-keeping is needed, blockchain could keep all the receipts, available and safe, for anyone to see.

Jaspreet Bindra: “While the arc lights focus on Bitcoin and crypto, Blockchain has been at work to solve problems in the less glamorous world of supply chains, financial services, large enterprises and energy. It is being harnessed to untangle complex supply chains by shippers and retailers. Blockchain-based solutions can make remittances less painful and expensive for itinerant workers who must send money home. Blockchain experiments to authenticate educational and other qualifications, making them less cumbersome to store and share, can make education loans more affordable. Blockchain-based energy grids are trying to take cheap energy to underserved areas. Governments are testing the technology for secure identity systems. Tamper and fraud proof transaction records may be enabled. The decentralized nature of blockchains is being harnessed for distributed business models like Helium, ‘a people’s Wi-Fi’ that’s not owned by any telecom firm but collectively shared. Blockchains are striving to reward online art and creativity with NFTs, while powering parallel (if unproven) worlds like the metaverse and laying the base for a ‘creator economy’.”

Marc Andreessen: “I think this is a foundational technology change, a new architecture for building an entirely new generation of computing systems. We have become convinced that Web3/blockchain/crypto is foundational. It’s a big hill. It’s as foundational an architecture shift as the ones from mainframes to PCs, from PCs to web, from web to mobile, or from traditional software to AI. It’s a fundamental shift and building this out is a 25- to 30-year process.”

**

So, to summarise my key points: By coming down hard on everything crypto, India is making a wrong turn. India needs to let its entrepreneurs free to create tomorrow’s world. Yes, there will be some negatives as they are there with many new innovations. But the good will be far greater. India needs to leapfrog with new technologies to remove friction in people’s lives and create prosperity. Web3 is one of those paths. I hope (but I am not optimistic) that we can learn from our past mistakes and create a policy environment which allows Web3 entrepreneurs to flourish – in India. Because flourish they will.

Thinks 609

Mohit Satyanand: “Less than 40% of adult Indians are employed. This is one of the lowest labour force participation rates in the world. Of our roughly 1 billion adults, less than 400 million are employed. The other 600 million have no jobs, no monetary income, and little choice. That’s more than the adult population of Europe, 600 million Indians empowered with about as much economic agency as Robinson Crusoe and his tiny beachside economy. We can build rural toilets that don’t flush, we can promise to pipe water into them, we can distribute cooking gas cylinders (sometimes); we can run rural hospitals that people would rather not use, and perhaps keep malnutrition at bay. But unless we can offer hundreds of millions more jobs, a huge swathe of our citizens will be spectators at the Grand Mall of Modern India –  watching the parade of consumption through its gleaming windows, but unable to pass through its bustling check-out counters.”

Shane Parish: “The source of problems is blindspots. There is something hidden from us that, if we knew, would change how we thought and acted. One of the best ways to reveal blindspots is simply to lengthen your time horizon. A lot of good advice simply boils down to thinking longer term.”

Good advice from Nat Friedman (via Matt Huang). “Smaller teams are better. Faster decisions, fewer meetings, more fun. No need to chop up work for political reasons. No room for mediocre people (can pay more, too!) Large-scale engineering projects are more soluble in IQ than they appear. Many tech companies are 2-10x overstaffed.”

Web3 and India: A Wrong Turn (Part 13)

Quotes – 1

A new world beckons. For every bull, there is a bear. For every one company that succeeds, there will be a hundred others that will fail. I saw it in the early days of the Internet also. Entrepreneurs are optimists, seeing the world through a lens of making things better. The ones who succeed show us a better way to do things; the ones who fail show us how not to do certain things. Web3 will also go through its ups and downs. But the inevitable trajectory is of progress and betterment, and that is why India needs to be a part of the ecosystem.

Here are a few quotes about the promise of Web3 and blockchains:

Chris Dixon:

Disruptive technologies are dismissed as toys because when they are first launched they “undershoot” user needs. The first telephone could only carry voices a mile or two. The leading telco of the time, Western Union, passed on acquiring the phone because they didn’t see how it could possibly be useful to businesses and railroads – their primary customers. What they failed to anticipate was how rapidly telephone technology and infrastructure would improve (technology adoption is usually non-linear due to so-called complementary network effects). The same was true of how mainframe companies viewed the PC (microcomputer), and how modern telecom companies

…This does not mean every product that looks like a toy will turn out to be the next big thing. To distinguish toys that are disruptive from toys that will remain just toys, you need to look at products as processes. Obviously, products get better inasmuch as the designer adds features, but this is a relatively weak force. Much more powerful are external forces: microchips getting cheaper, bandwidth becoming ubiquitous, mobile devices getting smarter, etc. For a product to be disruptive it needs to be designed to ride these changes up the utility curve.

Brian Solis:

The opportunity for innovation lies in what my colleague Henry King and I define as relationship transformation: it’s the “why” of technology, reimagining web3’s trajectory to design concepts, inventions, and businesses around user relationships, those between companies and assets and people, and also between people and communities. With relationship transformation, we can define how we use decentralized and trustless technologies to create new asset classes and productive, collaborative communities and platforms that turn users and consumers into stakeholders and owners.

We can reimagine every industry from finance and insurance to healthcare and education to gaming, media, and music to accounting and legal to politics and governance to royalties and loyalty programs to software and technology to retail, marketplaces, and consumer goods and everything in between.

Therein lies the vast opportunity: we get to create the future. We get to define not only the trajectory that we’re on but an entirely new trajectory altogether. We’re not just striving to avoid web3’s equivalent of Web 1.0’s dot bomb phase, or the ethics failure and data conundrum of Web 2.0 to get us through the hype cycle. We’re striving for an alternate path that gives web3 utility and meaning, one that builds an equitable community and offers a more sustainable impact while giving access, power, autonomy, and portability to users.

David Andolfatto and Fernando M. Martin: “These traditional forms of record-keeping are likely to be challenged by blockchain technology, which provides a very different model of information management and communication. Competitive pressures compel organizations and institutional arrangements to evolve in response to technological advances in data storage and communications. Consider, for example, how the telegraph, telephone, computer and internet have transformed the way people interact and organize themselves. Advances in blockchain technology are likely to generate even more dramatic changes, though what these may be remains highly uncertain.”

Thinks 608

Justin Smith writes about the emergence of the surveillance state post-Covid: “When I say the regime, I do not mean the French government or the U.S. government or any particular government or organization. I mean the global order that has emerged over the past, say, fifteen years, for which COVID-19 served more as the great leap forward than as the revolution itself. The new regime is as much a technological regime as it is a pandemic regime. It has as much to do with apps and trackers, and governmental and corporate interests in controlling them, as it does with viruses and aerosols and nasal swabs. Fluids and microbes combined with touchscreens and lithium batteries to form a vast apparatus of control, which will almost certainly survive beyond the end date of any epidemiological rationale for the state of exception that began in early 2020. The last great regime change happened after September 11, 2001, when terrorism and the pretext of its prevention began to reshape the contours of our public life. Of course, terrorism really does happen, yet the complex system of shoe removal, carry-on liquid rules, and all the other practices of twenty-first-century air travel long ago took on a reality of its own, sustaining itself quite apart from its efficacy in deterring attacks in the form of a massive jobs program for TSA agents and a gold mine of new entrepreneurial opportunities for vendors of travel-size toothpaste and antacids. The new regime might appropriately be imagined as an echo of the state of emergency that became permanent after 9/11, but now extended to the entirety of our social lives, rather than simply airports and other targets of potential terrorist interest.” [via Econlib]

Donald Boudreaux writes about the negative consequences of price ceilings: “No government intervention into a market economy is as certain to do damage as price controls. Market prices make possible the successful, productive coordination of the efforts of countless specialized workers and firms spread around the world. Market prices also coordinate the resulting massive flows of economic outputs with the demands of consumers. Every government-imposed control on prices reduces the effectiveness of this coordination.”

Read: The It Girl by Ruth Ware.

Web3 and India: A Wrong Turn (Part 12)

Freedom

There is the other side of the coin also. Skeptics claim that bitcoin is used for money laundering and ransomware. There are many bad uses of cryptocurrencies which offer (to a large extent) anonymity and untraceability. And so, “national interest” and “security” become the reasons why a new regulation is brought in. And rule by rule, a new industry is killed. Can crypto challenge fiat currencies? Perhaps. And maybe there should be competition if one looks at how central banks (especially, the US Fed) have printed trillions of dollars in the past 15 years and debased currencies by creating rampant inflation. Every action has a reaction, and entrepreneurship and technological innovation cannot be stopped. Yes, there will be the wrong uses also, but that is true for almost anything.

The doomsday scenarios forecast by so-called experts find favour with risk-averse policymakers – most of whom have lived in rent-free accommodation all their life, and have little interaction or understanding of the real world. They have no skin in the game. No one is going to hold them accountable for their actions. They do not pay a price for their bad policies. It requires bold and visionary political leadership to rise above the short-sightedness and anti-business sentiment so prevalent in policymakers worldwide.

India has such an opportunity with Web3. It should lead the world by “unlocking Web3.” All it needs is a decade or so of permissionless innovation. Entrepreneurs are the ones who will drive wealth creation and enlarge the pie for all; governments only do redistribution and are mostly engaged in shrinking the pie with their bad policies. Web3 and its ecosystem of gaming, metaverse, DAOs and the likes is uncharted territory. That is why it should be left alone. A commitment needs to be made by government officials that no obstacles will be put in the path of entrepreneurs. For the first time, India has a mix of entrepreneurs, investors and capital who can help build out new industries. What they need is freedom.

Web3 offers India an opportunity to lead. There are many inefficiencies that it can solve. Centralisation has failed in many areas like land records, agricultural marketplaces, education, healthcare, digitisation of kirana stores, and so on. Maybe Web3 and its decentralised approach can work. In a way, ONDC (Open Network for Digital Commerce) is a decentralised initiative – it is Web3-like without the underlying crypto framework.

India has much catching up to do in the world. It needs sustained growth of 10% and higher for a generation to create prosperity. That is not going to happen through government subsidies which tax the rich and distribute via welfare schemes to the poor. India needs its entrepreneurs to solve problems and flourish. This is the realisation that still doesn’t exist in policymakers.

Web3 is a test for India. We missed the Web 1.0 and 2.0 waves that created trillions of dollars in wealth and made lives better. We cannot afford to miss another one. Political leadership is about not just making new policies, but also knowing when to step back. Let’s not send Indian entrepreneurs to foreign shores – like was done by another set of political leaders 50-60 years ago.

Thinks 607

The Economist on how to preserve secrets in a quantum age: “The existing encryption standards that underpin just about every online exchange of information are a bit of gnarly mathematics designed to be well-nigh impossible for today’s computers to crack without just the right arithmetical key. But nist’s scientists have not been pondering today’s machines. They worry about a coming era of quantum computers…A more promising approach would be to identify new classes of mathematical problems that even quantum machines would struggle to crack. This was NIST’s task. In 2016 it launched a competition to find worthy algorithms for “post-quantum cryptography” (pqc), receiving 82  submissions from 25 countries. After three rounds of sifting and valiant searches for vulnerabilities by independent cryptographers, four winning techniques and four backup approaches have emerged.”

Emmanuel Roman of Pimco: : “Overconfidence is one of the great sins of mankind — and fund managers. It’s easy to build a narrative where you say I have seen this before…It’s very hard to escape [our biases] sometimes . . . and that’s why thinking through portfolio construction and risk and debating it with people of different backgrounds and age groups is very important . . . And not just people in your own mould.”

Richard Fulmer counters socialists’ claims about capitalism. Part 1 and Part 2. One of the claims of socialists is that capitalism creates inequality. The response: “Nature creates inequality. Different socioeconomic systems reward different natural inequalities – intelligence, physical health, strength, and beauty – by the incentives they create. Capitalism rewards the “bourgeois values” at which the left sneers: thrift, honesty, persistence, hard work, prudence, tolerance, and civility. Socialism rewards ruthlessness. Material inequality is the inescapable result of material progress. If a new product is created, it cannot possibly be instantly and simultaneously distributed to every person on earth. So, the first time someone invented something – the stone hammer, perhaps – inequality instantly appeared in the world. To demand complete material equality is to demand an end to material progress.”

Web3 and India: A Wrong Turn (Part 11)

Promise

In the early days of the Internet, its promise was thought to be in democratising access to information. No longer was one limited by geography and what was available in the vicinity of where one lived. What I did with IndiaWorld was something similar. Indian newspapers and magazines would take 7-10 days to reach the US. The Internet enabled me to publish news and make it available to anyone with an Internet connection the next instant. Then, entrepreneurs like Jeff Bezos realised that as they made information about products (books to begin with) available, they could also build a distribution system to ship products anywhere and drive ecommerce. Later, came the social networks and OTT platforms and myriad other ideas building on the foundation of the Internet. While many ideas failed, entrepreneurs learnt rapidly from both successes and failures of others to keep improving the technology (“know-how”) and make lives better. The early pioneers of the Internet could not have imagined today’s world – and it has been less than three decades.

When I returned from the US in 1992 to set up base as an entrepreneur in India, it was very difficult to get new computers in India – one had to import them. I remember importing a Sun Microsystems Unix workstation – I had to classify my company as a software export entity and create a room in the office as a “bonded warehouse”. The computer could not be moved out of that room and was subject to inspection by a government official at any time. Import duties were high. Once when I had bought a new iPhone in the US, I was stopped by customs officials who assessed its value to be higher than what I was allowed and therefore had to pay duty.

For a while, I thought we had gone past that era. But when the core beliefs are not about economic freedom but of economic control, the next bad regulation is not far away. Sometimes, it is not just the regulation, but the threat of impending controls and constraints that kills entrepreneurship.

Policymakers would do well to remember Milton Friedman: “Government has three primary functions. It should provide for military defense of the nation. It should enforce contracts between individuals. It should protect citizens from crimes against themselves or their property. When government– in pursuit of good intentions tries to rearrange the economy, legislate morality, or help special interests, the cost come in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.”

Web3 is a new world that’s getting created. No one even knows how it is going to play out. Cryptocurrencies, DeFi and NFTs are just the start. Despite the recent ‘crypto winter’, there is massive capital flowing into the space attracting the smartest minds to solve the toughest problems. New infrastructure to support Web3 is being built and improved. Entrepreneurs are thinking about problems to solve and investors are willing to back many of them. For once, India was not a laggard. But that is going to change. Once again, Indian policymakers are killing a nascent industry. None of them will pay the price; that will be borne by billions of Indians who will be unable to benefit easily from the promise of new innovations. Phrases like ‘Digital India’ have little meaning when the real enablers are blocked.

Thinks 606

Vitalik Buterin reviews Balaji’s new book “The Network State.” Balaji: “A network state is a highly aligned online community with a capacity for collective action that crowdfunds territory around the world and eventually gains diplomatic recognition from pre-existing states.” Vitalik’s conclusion: “Network states, with some modifications that push for more democratic governance and positive relationships with the communities that surround them, plus some other way to help everyone else? That is a vision that I can get behind.”

Lant Pritchett: “The question of how best to mitigate the worst consequences of the lack of development in places where it has yet to emerge is a charity question. As people engaged in development (particularly–but not exclusively–those of us born in richer countries) we should however, never assume that “effective anti-poverty programs” circumscribes the wishes, wants, and goals of developing countries and their populations or that these programs should be at the center of the development research–or action–agenda. As development scholars like Bill Easterly and Angus Deaton point out, “we” should not confuse the limited things that “we” can pragmatically do with what “they” need and want.”

Abhisek Mukherjee: “Management consulting is expensive. The median billing range for India-bred consulting firms and the Big Four is 0.7-1 million per consultant-month. For international firms like Accenture, this range can be 1.5-2 million. For MBB (McKinsey, BCG, Bain,) the range is 2.5 million plus, and can cross 5 million per consultant-month (Indian arms of MNCs often pay global rates.) This translates to gross margins of more than 50%. Given this increasing need for consulting services and the high costs, many companies attempt to build consulting teams in-house. At its core, management consulting requires three things: One, top talent. Two, access to information sources such as research reports and expert networks (e.g., GLG—Gerson Lehrman Group.) Three, institutional knowledge on domains and problem-solving methods.”