Product Management 101 - Customer validation is the key

Recently, I was having lunch with a co-founder of a startup in Bangalore. They have a vision which sounds good on the surface: Provide data loss protection on Cloud. Though this sounds as such a old & proven idea, they have a very good secret sauce which gives them a unique value proposition: Security, Cost benefits & much better RPO/RTO than competition.

Like most entrepreneur, he started out by validating his product idea with customers. Starting with customer survey, asking customers about their pain points and asking them:  "If this product solves your problem, will you buy it?"

Customer validation is a good point to start, but one must also be aware that such a survey can lead to several pitfalls.

1. Customer needs could change with time, and are no longer interested when the product is launched.
2. Customer just expressed his 'wants' and not his 'needs', and may not pay for the actual product.
3. Customer has no stake in the product. Just answering few questions was easy - there was no commitment or risks.

All this risks imply that customer validation may result in false positives.

False positive is a known risk factor in new product development and startups often take such risks. In case of my friend's startup, he took that risk and decided to invest in developing a prototype.

Several months have gone by and his company is busy building the prototype and his biggest fear is that customers may not embrace his product and is constantly changing what should be his MVP - Minimum Viable Product.

What is a Minimum Viable Product?

A minimum viable product (MVP) is the most pared down version of a product that can still be released. An MVP has three key characteristics:

It has enough value that people are willing to use it or buy it initially.
It demonstrates enough future benefit to retain early adapters.
It provides a feedback loop to guide future development.

The idea of MVP is to ensure that one can develop a basic product which early adapters will buy, use & give valuable feedback that can help guide the next iteration of product development.

In other words, MVP is the first version of a customer validated product.

The MVP does not generate profits, it is just a starting point for subsequent product development - which in turn results in rapid growth and profits.

Customers who buy the MVP are the innovators & early adapters, and no company can be profitable serving just the early adapters. But a successful MVP opens the pathway towards the next iterations of the product which will be embraced by majority of customers: 'Early Majority', 'Late Majority' and 'Laggards'.

MVP is also expensive for startups

For a lean startup, developing a MVP can be expensive. MVP is based on: Build -> Measure -> Learn process - which is a waterfall model.

There are two ways to reduce risks associated with developing an MVP. One way to reduce risks is to avoid false positives.

While conducting market research during customer validation process, one must ensure that customer is invested in this product development.

At the first sight, it is not easy to get customer to invest in a new product development. Customers can invest their Time, Reputation &/or Money.

By getting customers to spend time on the potential solution to their problem is the first step.

Second step would be get them invest their reputation. Can customer refer someone else who also has the same problem/need? Is the customer willing to put his name down on the product as the Beta user? Getting customer invest their reputation would most often eliminate the risks of false positives.

One good way to get customers invest their reputation is to create a user group or community - where customers with similar needs can interact with each other and new product development team - while helping new product development.

In case of B2B products, customers can also invest money in new product development. Getting customers to invest money is not so tough. I have seen this happen in several occasions. I call this co-development with customers (see my blog on this topic)

Kick Starter programs have now taken hold and today startups are successfully using kick starter programs to get customers invest money in their new product development.

Accelerating the Development Cycle & Lowering Development Costs

A lean startup should avoid developing unwanted features.

Once customers are invested in this new product, the startup will usually start developing the product and march towards creating the MVP.  However, it is common to develop a product and then notice that most customers do not use 50% of the features that are built!

Lean startup calls for lowering wastage by not building unused features. The best way to do this is to run short tests and experiments on simulation models. First build a simulation model and ask customers to use it and get their valuable feedback. Here we are still doing the Build -> Measure -> Learn process, but we are doing it on feature sets and not the entire product. This allows for a very agile product development process and minimizes waste.

Run this simulation model with multiple customers and create small experiments with the simulation model to get the best possible usage behavior from customers. These experimental models are also termed as Minimum Viable Experiment (MVE), which forms the blue print for the actual MVP!

Running such small experiments has several advantages:

• It ensures that potential customers are still invested in your new product.
• Helps develop features that are more valuable/rewarding than others.
• Build a differentiated product - which competes on how customers use the product, rather than having the most set of features.
• Helps learn how users engage with your product.
• Help create more bang for the buck!

Closing Thoughts

In this blog, I have described the basic & must-do steps in lean product development, which are the fundamental aspects of product management.

Customer validation is the key to new product success. However, running a basic validation with potential customers runs a big risks of false positives and investing too much money in developing the MVP.

Running a smart customer validation minimizes the risks while creating a lean startup or lean product development. A successful customer validation of a solution helps to get paying customers who are innovators or early adapters. This is first and most important step in any new product development - be it a lean startup or a well established company.

Effective workplace for Digital Startups

Earlier this week, I met with a CEO of a startup in Bangalore who wanted to setup a smart office for this startup. I had a very interesting discussion on this subject and here in this blog, is the gist of our discussion.

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Startups need a work environment that fosters collaboration, productivity, and innovation, it is able to attract and retain the best employees.

Office spaces are now turning into intelligent spaces - where office space can engage with employees to maximize effectiveness, connect seamlessly and securely anywhere, anytime.

How to build such a work place? 

Today, we have ultra-fast Wi-Fi, mobile "anywhere" communications, and Internet of Things (IoT) connectivity that connects physical building work places to employees. For example having a mobile app - which gives information about available meeting rooms, directions to meeting rooms and an easy one-click interface to book a meeting room - helps save 5-10 minutes off an employee's time in setting up a meeting. This alone translates into 42-85 man hours of productivity per employee per year! Freeing up time for innovation and collaboration.

In the world of intelligent work spaces technology becomes a key enabler. Every employee has fast and complete access to the applications and data they need and can use any mobile device to schedule space, operate electronic white boards or projectors, or set up video conference calls. Employees can be productive, seamlessly and securely, anywhere, anytime, whether in a quiet work space, a conference room, a boardroom, or even an outdoor space such as a rooftop café.

In a startup office, basic Wi-Fi and video conferencing are now so very common that they are taken for granted. The closed-door offices and cubicles have given way to open-space designs, casual meeting areas. Cafeterias & pantries are now seamlessly integrated with work spaces - to encourage open idea sharing and other collaborative exchanges among workers.

Understanding the requirements

Startup offices often share offices spaces with other startups (typically non-competing - Of course!)

A startup workplace must also be truly innovative. In most of the legacy workplaces, there is too much friction and inefficiency that hampers office productivity. Talented & creative employees are still shackled to desks on which sit hardwired computers that act as their main and sometimes only access point to the applications, software, and data they need to do their work.

Startups do not have a hierarchical organization structure. Instead they tend to have a team-based organizational structure. Teams are formed and disbanded depending on the project at hand. Cross-functional teams are dynamically created when necessary. This means employees need the right tools to work in a fluid environment where they and their colleagues can collaborate whenever and wherever the need arises.

Good news is that, today we have mobile-first, cloud-first and IoT technologies that enable such intelligent spaces. Facility managers will have to dorn an IT hat and ensure that:

1. Secure, untethered, and consistent connectivity anywhere.Security is of paramount importance in a multi-tenant workplace. Employees are no longer tethered to a wired deskspace, they need to have complete mobility within the workspace - and yet have safe and consistent high bandwidth connectivity.
2. Consistent workplace productivity solutions across all devicesWorkplace productivity tools such as Slack, Skype, Google Meetups etc are essential. These tools can work on various devices: iPad, iPhone, Android Phones, Windows Laptops, Apple Macbook etc.
3. Collaboration solutions built on cloud
    Note that for a consistent workplace collaboration tools are all connected to cloud. Its not just the productivity tools, even booking conference rooms or meeting rooms are handled via cloud. In a multi-tenant workplace where conference rooms are shared, the solutions must be able to generate pay-per-use billing systems for all shared resources.
4. Location based services
   Based on number of people per floor or per zone or area, smart facilities are turned on or off based on actual need. This means all lighting, cooling/heating and Wi-Fi connectivity are all based on number of people in that area. This implies use of intelligent sensors and smart analytics on the edge to minimize energy usage.   

Build Analytics into workplace  

Industrial IoT devices opens up a whole new way of seeing how an existing facility is being used. Heat/motion sensors can track which areas of the office are highly used and which areas are least used. This data over a period of time can be of immense value - to optimize the way  office spaces are designed. This data can be used to optimize the cooling & lighting requirements and HVAC systems planning.

The use of smart building technologies - sensors on the floor, motion sensors, thermal scanners, CCTV, Biometric scanners etc., generate vast amounts of data which can be used in lot of ways to a better workplace.

Closing Thoughts 

When technology and facility design is done right, we can create workspace that allows organizations, small or large, to orchestrate workflows for maximum efficiency and productivity. This will unleash the kind of innovation, creativity, and productivity needed to compete in the new digital economy.

Such a building would be a truly digital workplace where technology becomes a strong hidden foundation for a true user centered work place.

Invest in IT enabled facilities to make employees happier, attract and retain the most talented workers, it must provide employees with a modern, digital environment where they can work efficiently and seamlessly.

How Automation will change the face of Indian Banks

Today, I had to visit a SBI branch near my house. I had three banking tasks: Deposit a cheque - which was a payment received from a Postal Savings account to the bank account; Transfer funds from the bank account to Public Provident Fund Account and update the passbook to know the bank balance.

This task in a public sector bank branch took nearly 60 minutes of my time, and I had to interact with 3 clerks and one service manager!

This experience made me think on how the upcoming digital transformation will change the face of Indian Banks. As an example, the same task that took me an hour today could be done in few minutes on a digital platform and without any human intervention!

Indian banks operating in conventional systems use tedious human oriented process. I need to fill out a form - where all information is filled out twice - one copy for the bank, one for me! The form is then verified by a clerk and then re-verified by a service manager, and then it takes 3-5 working days for money to move from one account to another!

With automation, 60% of jobs in bank branches can be eliminated. Traditional jobs like passbook updating, cash deposit, verification of know-your-customer details, salary uploads are also going digital increasing job redundancies. Most of the work done at branches will be done by IT systems, and Indian banks are at the inflection point where technology will rapidly improve efficiency and replace humans from performing mundane clerical jobs.

Banking sector was among the big job creators in recent years, but in next 3 years, Banking sector in India will see a decline in number of jobs. Just like ATMs that eliminated the need for bank tellers, new banking apps will eliminate most of the clerical jobs in any bank.

Not all Branch Jobs will be Lost

While I was at the bank, I two elderly gentlemen who wanted my help in getting a "service token!" These long time users of bank accounts are still not comfortable with using digital technologies. Even simple 'self service token generation' is a tough task for them.

India as a society is still not ready for a 100% digital banking. Lots of Indians are digitally illiterate, and the complex banking rules and forms intimidate them. Therefore these users still prefer to sit across the table with a bank employee and get their banking tasks accomplished.

Size of this customer segment is still substantial, but will decline rapidly. This implies that Indian banks will operate branches for a long time to come, but for banks to be relevant and profitable, the total value of transactions per employee will have to increase. This implies that a lot of back end jobs will have to be automated, and moving customers to digital platforms.

The nature of Indian customers has slowed down the transition from people-driven to IT driven processes. However, technological development has not slowed down and constant innovation in technology has made online banking easier. This has also led to a slowdown in the hiring of  branch staff at banks, though banks are hiring people with IT skills to drive automation.

HDFC bank for example, saw staff strength fall from 90,421 in December 2016 to 84,325 in the quarter ended March 2017. At the same time, it has expanded its network to 4,715 branches, from 4,520 a year earlier, ATMs to 12,260 from 12,000.

Hire Younger Talent

As banks brace for the digital revolution, Banks will have to infuse their workforce with a lot of younger talent - who are more comfortable in embracing new FinTech solutions. Large public sector banks will be forced to re-balance their workforce by offering voluntary retirement scheme for older staff and usher in a younger, digitally savvy talent pool.

Major Savings is in Backend Processing

Banks can save lot of costs by automating high cost operations such as loan processing. Today with high speed data analytics & AI tools almost 95% of loan requests can be processed automatically, thus eliminating expensive human labor - which also aids in speeding up loan approvals - which inturn helps improve productivity.

A team of 400-500 programmers can automate house loan approval process & that will eliminate 10000's of jobs at banks. Artificial intelligence & data analytics can replace loan underwriters, the IT systems can underwrite loans on the spot. This increases employee productivity in a big way, while reducing operational costs.

Similarly, routine tasks like salary processing will get automated. In fact all low-end back office jobs in banking sector will be automated.

This transformation means all the low skilled workers do not have a bright future! They will have to re-skill or perish!

Impact on Real Estate Costs

After labor costs, rentals on bank branches form the next highest costs for Indian banks. With Automation, the need for a large number of branches will reduce substantially. Some banks do not need as many branches as they have today.

Global banks like Citi, HSBC, etc have already consolidated the number of branches. Looking at the trend in US & Europe, where number of bank branches have shrunk by 20% in last 5 years, I expect a similar trend in India - but with a difference. The reduction of bank branches will be limited to urban areas only, while Indian banks will still add new branches in non-urban areas and the size of branches will reduce rapidly. Overall, I expect the total square footage of branch space will reduce 20-25% in next 5 years, while the total number of bank branches will increase.

Even in rural areas, Branches will need smaller footprints - and the focus in these branches will be to train customers to use digital online platforms. The branch staff will help customers learn and use digital systems - i.e., marry digital technology with human touch.

Changing face of Indian Banks

New banks like small finance banks like Au Financiers, Equitas or Ujjivan will use an army of  people to expand in rural areas, but this army of people will not sit & operate in a typical branch. Instead, they will be like foot soldiers, traveling to customer locations and providing banking services via mobile platforms.

Just like micro-finance companies & cell-phone companies that changed how people borrow, these newer small finance banks will change how people will use banking services. These banks can leverage a large army of small business owners in rural areas to offer human touch to rural customers - with digital platforms.  Customers can walk to any member of this rural service army and get their banking services.

Customers will now recognize the bank by the mobile apps, rather than the physical branches or the employees.

Closing Thoughts 

Banking sector in India will thrive in next 10-20 years and will employ millions. But it will not be the same way as today. Banks will expand branches and increase the reach of its distribution network, but it will be aided in a big way by IT.

New, exciting, & high paying jobs in Banks will be in IT as Banks transform to be a IT driven, software based banking services company.

The new face of the bank will be the mobile app - from which the entire banking transactions can be completed.

Also see: 

Disruptive influence of FinTech on Indian Banks

Blockchain for Real Estate Transactions

Indian real estate transactions are fraught with risks. At every stage, there are risks of fraud or risks of legal entanglements over the ownership title. As a result, the common man often does not have a choice of risk free properties to buy.

As a result, bulk of real estate transactions are handled in cash[1] - thus bypassing the organized banking sector. According to RBI report [2], housing sector accounts for only 16.6% of all the credit portfolios of the banks in India.

This contrasts sharply with the real estate loans represent a vast majority of outstanding credit portfolio in the USA [3], where 45.2% of the outstanding credit portfolio is in real estate sector.

This implies that there is a lot of opportunities in Indian real estate sector for banks to lend - provided banks can find ways to bring in transparency and developers can gain trust of borrowers. In this context, blockchain technolgies will be of big help.

Hernando de Soto, a renowned economist wrote that: No nation can have a strong market economy without adequate participation in an information framework that records ownership of property and other economic information.[4]

Property rights can be in form of any high value items such as:

• Real Estate: Apartment, agricultural land, house
• Art & Collectable Items of Value: Paintings, Antiques, cars, watches etc.
• Proof of investments: Stocks, bonds, certificates of deposit etc.
• Intellectual Properties: Copyrights, Patents, Algorithms, APIs etc

These records represents the owner's rights and majority wealth of an individual. It is therefore crucial to maintain completeness & correctness of these records to prevent unauthorized or fraudulent changes to these properties.

Historically, people had to trust the government agencies to provide a standard centralized ledger that represents the ownership. However in developing countries, and in times of uncertainties, we have seen that government routinely tramples upon individual property rights and in many occasions even usurp private property.

Even in developed countries or developing economies where there is stable government and a strong rule of law, trading in property is a hassle. Documents can be forged or fudged to create fraudulent transactions - which results in lost value and long time spent in court disputes.

Blockchain technology presents an alternative way to protect and secure the rights to these properties. Blockchain is a consensus based peer-to-peer network with a proof-of-work algorithms which makes changing these historic records probhitively expensive and correctness of the documents is guaranteed by block chain technology protocol rules.

Block chain technology ensures that the rightful owner can always be identified using public key cryptography. Blockchain technology allows creation of "colored coins" - i.e,. Non-fungiable bitcoin (see https://en.bitcoin.it/wiki/Smart_Property)

Smart property technology as described by Mike Hearn:

Smart property is property whose ownership is controlled via the Bitcoin block chain, using
contracts. Examples could include physical property such as cars, phones or houses. Smart
property also includes non­physical property like shares in a company or access rights to a
remote computer. Making property smart allows it to be traded with radically less trust. This
reduces fraud, mediation fees and allows trades to take place that otherwise would never
have happened. For example, it allows strangers to loan you money over the Internet taking
your smart property as collateral, which should make lending more competitive and thus credit
cheaper.

The main benefit of blockchain technology is a distributed database, which cannot be hacked or misused by administrators. Even in case of natural or man-made disasters land records data cannot be destroyed. Blockchain will also serve as a virtual notary service - which authenticates all transactions. This authentication service can be used by banks & insurance companies to provide loans and insurance services.

Therefore block chain is very useful for keeping property ownership records. There are multiple benefits of block chain based property rights management system, that goes beyond the proof-of-ownership and fraud prevention.

1. Provide Transparency
2. Eliminate fraud.
3. Smart Contracts
4. Increase the speed of Transactions
5. Leverage & unlock Value of Assets

1. Provide Transparency  

If I were to buy a property today in Bangalore. I need to get a copy of all the property documents from the rightful owner. Often, the owner of the property would have documents in a safe locker. The owner has to retrieve the original documents, make a photo copy and hand over the photo copy to the buyer. Then as a potential buyer, I need to verify the authenticity of the document with several government agencies, identify legal risks against the property by getting a legal opinion from lawyers, and then negotiate the final price and then pay via a bank, and then register the sale agreement/deed with government agency. All this will take several weeks for the transaction to complete and the buyer has to spend quite an amount of money.

In India, a significant amount of money - almost 1-2% is spent to verify and validate the ownership titles of the property before the transaction can occur.

With Blockchain based system, all this hassles are eliminated. All property related documents are hosted on block chain. Even the entire history of all transactions on that property can be hosted on the block chain. All relevant tax paid information, relevant clearances etc. are all on block chain. The owner of the property can provide read access to this data to potential buyers. The buyer in turn can trust this data, which results in total transparency of ownership rights.

2. Eliminate fraud

In India, real estate & property disputes form a majority of civil court cases. The prevalence of fraud and complexity of property rights has been a major obstacle for a vast majority of Indian citizens to buy/invest in real estate. No wonder less than 10% of the population owns property in India.

In India, a significant amount of money - almost 1-2% is spent to verify and validate the ownership titles of the property before the transaction can occur.

Since the original property records are on block chain, and these historical records cannot be edited/modified, it eliminates fraud and reduces the cost of transaction.

In case of real estate properties, there will be a common trusted registry service to authenticate the owners and record all transactions. With blockchain, the use of coloured coins to repersent the property. The ownership title of the property can be modified only with a combination of private keys of the owner and registration authority. This ensures that neither the property owner nor the registry - can modify the records individually, without the consent of the other party. This scheme provide safe & secure way to record all transactions. And ensures all transfers are properly recorded.

3. Increase the Speed of transactions

Block chain technology ensures total transparency in property ownership titles and it also eliminates fraud. This will encourage buyers to trust the seller, and close the transaction faster. A faster sale results in better economic gains to both buyer and seller. The seller gets a faster access to capital, and the buyer gets an assured property which he can use.

Furthermore, payments for real estate property transactions could be handled on a Blockchain using digital currencies. Thus eliminating the expensive bank transaction fees, and the seller gets faster access to cash.

4. Smart Contracts

A property can generate income and will have certain expenses. In case of real estate property, there are certain annual expenses such as property taxes, property insurance and there may be other maintenance charges.

With block chain technology, the owner of this property can build in rules into the block chain system which triggers payment of taxes or other maintenance charges based on predefined rules. In case of taxes, the rules will be defined by government agency and one can write in the automation tools to calculate and pay the required taxes - via the technology of "Smart Contracts".

Insurance companies can also evaluate the value of the property and provide better pricing and  owners can pay insurance companies via smart contracts.

A property can also generate income. In case of real estate, this could be often seen as rents. Smart contracts can be developed to collect rents from tenants. Smart contracts allows for automatic collection of rents as per predefined rules.

Take an example of retail shops in a mall. The mall owner/mangers can use smart contracts to collect rents for all tenants -based on smart rules such as rent as % of sales revenue or rent as % of electricity/utility consumed etc.

Today, these rule based rent calculations are tedious and cumbersome. This implies the landlord has to spend money to have accountants go over all the calculations, generate an invoice and then go behind tenants to collect. Tenants can at-times dispute this calculations (human error) and delay payments.

With smart contracts, all the rule based rent collection can be automate.

Smart contracts will also allow the rents to be paid out to multiple owners - if the property is jointly owned by many investors. Smart Contracts will encourage investments in commercial real estate ventures.

5. Leverage & unlock Value of Assets

Block Chain technology provides total transparency and when merged with smart contracts, the entire transaction history on that property can be made available to banks or other financial agencies over the block chain. This will allow banks/lenders to evaluate the quality of the assets and quickly determine the quantum of loan that can be provided to the owner.

Property owners can quickly leverage their real estate assets quickly and use that freed up capital in other ventures.

Banks/lenders in-turn can bundle up the assets and create Mortgagee Backed Securities (MBS) and trade MBS to investment banks in the secondary markets. Credit rating agencies can quickly valuate the quality of the underlying assets that makes up the MBS, the risk rating of the MBS can be dynamically calculated on demand.

Unlocking the value of real estate assets can really accelerate a countries economy!

Closing Thoughts

Blockchain technology is ideal for real estate property transactions. However this will not happen overnight. The Blockchain technology offers great prospects for the future. Streamlining a slow cumbersome process in real estate transactions will unlock value for everyone.

However such an innovative technology will not get a wide spread acceptance quickly. It will take time and few innovative & forward thinking real estate firms will lead the way and create enormous wealth for themselves.

Retail Banks, Investment Banks, & Hedge funds will benefit greatly by having real estate on Blockchain. These bankers have the clout and money to clear off the hurdles and create adequate regulation or rules needed for real estate.

Blockchain technology is still in its infancy, but the potential benefits of this technology is too great to ignore.

References

1. www.iimb.ernet.in/sites/default/files/u201/Housing%20Market%20in%20India.pdf
2. Https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/T_11118A5AFCC55634D2F8AA62E5CB885E233.PDF
3.    Http://www.forbes.com/sites/greatspeculations/2015/06/17/q1-2015-u-s-banking-review-outstanding-commercial-loan-portfolio/#61b531074e61
4. "The Destruction of Economic Facts", by Hernando de Soto. April 28, 2010. Bloomberg BusinessWeek. Accessed online May 2, 2011

Facebook Disrupts Telecom with OpenCellular

Facebook today announced that it will launch OpenCellular, a mobile infrastructure platform designed to lower barriers to entry for would-be providers of Internet service to the developing world.

After facing a sharp rebuke to its Internet Basics program, Facebook has taken a more ambitious project to enable free Internet to areas that are currently under served.

OpenCellular is a customizable base chassis for a wireless access point which will connect devices using 2G, LTE or even Wi-Fi. The base chassis is designed to be modular to keep down costs and making it easier to deploy at a high point in an open area - like a tall tower or a tree.

OpenCellular is a wireless access point which will allow users to connect to Internet via cell phone devices. Keeping in mind that this is targeted at areas that are currently undeserved, I would guess that most users will connect with a cheap Android phones.

According to the blog post of Facebook engineer Kashif Ali: "We designed an innovative mounting solution that can handle high winds, extreme temperatures, and rugged climates in all types of communities around the world," The device can be deployed by a single person and at a range of heights — from a pole only a few feet off the ground to a tall tower or tree."

Facebook said that the emphasis in the design process was on keeping the design as modular and inexpensive as possible, as well as making it easy to deploy. Keeping in mind of a rural or remote installation location, the chassis can be powered from multiple sources PoE, Solar Panels, External Batteries etc.

Given Facebook's penchant for OpenSource and its contribution to OpenCompute Foundation, Facebook will eventually make the hardware design and the software running on OpenCellular will be made open-source eventually.

At this point, it is not clear as to how these OpenCellular base station will connect to Internet. It can be to a UAV drones or a direct satellite uplink.

A free wireless Internet access could be a game changer in rural areas of India & other parts of Asia, where the existing telcos make tonnes of money by charging for Internet and basic telephone calls. With free Internet, users can use Facebook's WhatsApp calling feature and use Facebook for local mass communication. This will effectively disrupt a whole lot of cell phone service providers business models all over the world, while Facebook will benefit indirectly by gaining more customers and users - which leads to greater advertisement revenues.

Should Cisco Buy NetApp?

Right now NetApp is worth only $6.9 Billion! With a recession likely in 2016, the market valuation of NetApp will only go lower, making it a good target for acquisition.

As a stand alone Data Storage vendor, NetApp is at cross roads. The revenue from its traditional data storage array is falling at double digit rates. Its main competition - EMC is going private via acquisition by Dell. Hard Disk based data storage devices are in their twilight years - which is the main stay for NetApp.

In short, the future does not look bright for NetApp as an independent publicly traded company. Any investor can buy out NetApp and milk out the cash from business. At $6 Billion valuation, NetApp is primed for a takeover.

Across the silicon valley is Cisco. 2015 had been a very good year to Cisco. The sales of its UCS blade servers has propelled Cisco into becoming 4th largest server vendor. Though Cisco, along with EMC created VCE - which is a market leader in converged infrastructure, Cisco faces severe head winds in its core business. Adding to the business challenge, Cisco exited VCE business venture and EMC is being bought over by DELL. The Flexpod product line is also seeing strong head winds by new types of hyper converged infrastructure - Nutanix, Simiplivity and others.

At this juncture, it makes business sense for Cisco to buy a storage vendor will add teeth to its UCS server business and compete aggressively in converged infrastructure markets. With NetApp buying SolidFire - an all Flash storage vendor can help Cisco position UCS better in market.

Cisco is also at cross roads

In 2016, Cisco will have to decide if it wants to remain as an equipment provider or become a Cloud Service provider and remain as center of IT world.

For a long time, Cisco has served as a bell weather for the IT industry. Cisco provided the key networking devices which enabled the Internet and eCommerce world.

Now, with Cloud Service providers such as AWS, Microsoft Azure, Google etc., - the need to build enterprise scale data centers is becoming less important. Many companies are embracing  cloud service providers for all their IT infrastructure and are not building data centers. To Cisco's discomfort, the leading cloud service providers are not buying Cisco gear!

The cloud service providers are fundamentally challenging Cisco's business model.

So the question is: Should Cisco buy NetApp?

Cisco can buy a storage vendor and integrate its UCS with a data storage & its ACI enabled Nexus range of switches. This will enable Cisco to offer end-to-end solution for datacenters.

In my opinion, (its my opinion and it in no way reflects EMC's opinion) Cisco must buy a storage vendor - but not a standalone pure storage vendor like NetApp. Buying NetApp would be a retrograde move in terms of technology, as it does not give any technological benefit to Cisco. Just doing an integration between UCS servers and NetApp storage system does not add value to its customers.

Instead, Cisco should look ahead and buy companies that can truly add technological advantage to its servers. Cisco did buy Whiptail - a server flash storage vendor, but the integration did not go well.

Ideally, Cisco should buyout new technology company which can provide:

1. Ultra Fast Server Flash Storage, which will make its servers blazing fast.
2. OpenStack distribution for server virtulization and server attached commodity storage
3. Hadoop & BigData tools company which can run on UCS+FlashStorage+OpenStack
4. Cloud Service Provider

NetApp does not bring any new technology to Cisco's armory. Cisco currently gets the same technology from NetApp via partnerships.

So, Cisco should look at acquiring new & emerging technology companies that can help redefine UCS Servers as a hyper converged infrastructure. Something like ScaleIO or Nutanix - but can do more than just storage.

Historically, Cisco has been very good at buying technology companies which are developing new, promising technologies and nurturing them into major sellers. For example, UCS, Nexus, ACI, Meraki - were all in startup phase when Cisco acquired them.

Cisco needs to choose if it wants to remain as a major vendor of enterprise IT. And if Cisco wants to remain as a major vendor of enterprise IT, it must become a cloud service provider.

Finally, My Answer

Buying NetApp will be a good financial decision. NetApp can generate far more cash than its current net worth. So from a pure financial transaction point of view, buying NetApp will add financial value to Cisco's shareholders.

From technology point of view, buying NetApp is like buying 2000 model car in 2016! NetApp does not give Cisco any technological advantage and will not help Cisco transform its equipment business. Acquiring a older technology and spending time/energy to integrate it with it business will not help Cisco build a new generation technology.

In short, Cisco can buy NetApp for the financial value - but not for the technology. Ideally, if Cisco buys NetApp, Cisco must continue to run NetApp as a separate business entity and not merge it with its core server or network business.

A Three-Step Product Commercialization

Launching a new product is one of the most of the core activities a product manager must do. Launching a product is both costly and risky for any business, and that’s why specialists – called as product managers are brought in.

In order to take a product idea into a successful product, there are several stages of development. Customer requirement, use cases and value to customers has to be identified – and often this is the easy part. Then comes the tougher part – how to commercialize the product. 

Launching a new software product has become very complex. The notion of what denotes a ‘product’ and what denotes a ‘service’ is getting rapidly blurred. In addition, the commercial & monetary aspect of software is incredibly complex. The options run from pay-per-use models or annual license fee or one time license fee or even freeware.

The complexity of pricing and commercialization can make anyone go crazy. 

In this article, I will go over a simplified 3 step plan for product commercialization. Going through this will help you identify and access the business risk & help develop better plans.

Step-1: Create a purchase process map

Step-2: Get a Beta Customer

Step-3: Analyze all sales deals.

Pricing of the software has major impacts on several aspects of productization: Packaging, Distribution, After-sales support, marketing and lifecycle planning. It is therefore very important to incorporate the product commercialization plan right at product design stage. (See: Building World Class Products)

1. Create a purchase process map

As part of product design, one needs to think on how any customer will buy this product. I call it as a purchase-process-map which details every aspect of the buying process. Product Purchase-process-map is a very powerful tool that will help gain deeper insights on what the customer really wants to buy and how you can develop a product around it.

Start with customer research that provides great insight into customers' needs and identifies the factors that motivates customer to buy. Once customer motives are known, you can develop a sales & marketing strategy for the product. 

The first step in developing a purchase-process-map is to get an answer to “WHO” questions:

·        Who orders the product?

·        Who inventories the product?

·        Who will use the product?

·        Who influences the decision to buy?

·        Who controls the budget?

·        Who will dispose of the product?

Learning about all the players who have influence over the purchase is very important. When selling complex enterprise products, companies use dedicated Account managers or Account teams whose main focus is to work out the customer purchase maps and then sell products. So, when developing new products, it will be good to have representatives from sales or account teams who understand customers. 

The purchase-process map must be as accurate as possible and it explains the customer buyer-behavior. Do not make the mistake of assuming that you know the buying patterns of customers based on similar products purchased by customers. Always base your product purchase map on facts and not assumptions.

For example, a software company did a voice of customer research and identified a need for unified data center resource management software. However, the purchase-process map revealed that there were no real users of this product as customer operations were still distributed with servers, network and storage being managed by separate teams and no single team or member was looking at the entire data center infrastructure. Identifying this problem helped to avoid developing a new product. Instead, the company was able to cobble up different software tools and offer it as suite. This learning saved several millions of dollars in development costs and at least one year of development time. 

2. Get a beta customer commitment

Traditionally, beta customers are used for product testing. But Beta customers are also very useful in developing financial aspects of the product. It is best to co-develop a product with a real customer and they can provide valuable feedback on the financial aspects of the purchase process.

In many cases, Beta customers expect a big discount on the purchase price, they can provide inputs on various monetization schemes such as:

1.    Paying for using the unit – one time license fee.

2.    Paying for annual license fee including support

3.    Paying for installation of the product

4.    Software is free, but customer pays for support.

5.    Software is free, but is supported by advertisements

6.    Software is free, but developer can collect & use customer data

Beta customers can also help in product marketing & sales by:

·        Agreeing to give written analysis of the product

·        Agreeing to endorse the product

I have worked on several new product development projects with customer and in most cases, customer was very much interested in developing a monetization model for the product. In one instance, customer helped develop the product and also defined the product cost.   

3. Analyze all sales deals  

Initial sales of the new product must be analyzed against the purchase-process-map. For every item in in the purchase-process-map, there must be a corresponding sales or marketing activity. The review verifies whether each of the sales and marketing strategy actually delivers. This also helps to identify weak links in the marketing program that needs to be corrected. 

Analyzing sales deals is very important for new products. Failing to address key customer needs can impede the product adoption process. Identifying issues early in product launch will help keep up sales momentum.

Remember that if sales efforts stalls, and sales reduce, distributors and sales team will simply turn their attention to other products. Sales team will not analyze why the product is not selling. Once the momentum is lost, it is much harder and more costly to get the new product back on track. To ensure success, review all initial sales deals and periodically review deals to identify any roadblocks that could jeopardize the new product introduction.

Closing Thoughts

The stakes are high with every new product introduction. The company reputation and product manager’s reputation is on the line. The best way to see a product’s success is to follow this three step process and incorporate this into product launch plan and sales strategy.    

Remember addressing product issues early on and eliminating product adaption barriers, you will be setting up the path for success and build products with a healthy revenue stream.

Use this 3 step plan for product commercialization. Going through this will help you identify and access the business risk & help develop better plans.

Step-1: Create a purchase process map

Step-2: Get a Beta Customer

Step-3: Analyze all sales deals.

Remember addressing product issues early on and eliminating product adaption barriers, you will be setting up the path for success and build products with a healthy revenue stream.

How Startup can create a fast learning organization

In today's fast paced startup environment in Bangalore, startups such as Flipkart, OnMobile,  OLA etc. are facing a rapidly changing environment. Competition is fierce for these startups as they try to disrupt the market. 

Like with any startup money is tight and these companies have the challenge of hiring the right talent. In many cases, it is tough to attract talented folks - so they are forced to work with what is available. 

In such an environment, working hard is absolutely necessary, but it is not enough. It is also important to create an organization that can learn new things and adapt quickly to take advantage of new opportunities. These companies will have to be creative and innovative. Managers will have be bold enough to try new things, develop new processes and solutions and things don't work, managers must learn to fail fast and turn around quickly. 

Startups cannot afford to create a training department and formalize a training program. Instead, it is best to create a learning culture - where employees have the space to learn new things and have the opportunity to put their learning into practice. All this happens along with day-to-day jobs and without missing a beat.   

In order to create a learning culture, there are few things entrepreneurial leaders can do to create a learning organization.   

1. Top Management Commitment

2. Foresee future business needs and communicate to the team

3. Create space & time for learning

4. Encourage collaboration 

5. Encourage experimentation

6. Fail Fast, unlearn and relearn

7. Setup a reward system

8. Encourage Feedback

These steps will create an informal process for learning in a startup. As the organization grows and matures, it will be good to formalize the learning programs and have a formal training department. In this blog, I am focusing on startups - who need to bootstrap their teams to learn and develop new skills. 

1) Top management's commitment: 

Creating a learning culture has to be top down. A learning culture can be developed in an organization only when the top management is committed and deeply involved. At Open-Silicon, where I worked in the past, One of the founders was a professor and the other had a Ph.D. Both of them led by example when it came learning program. Starting off with such leaders, it was easy to imbibe a learning culture right from the start. 

2) Foresee future business needs and communicate to the team 

Top leadership of often involved in dealing with customers, vendors and partners. As a result, they will know the direction in which business is heading and will have fair idea of their future business needs. It is therefore important to share this insight with the teams on the floor and guide them into learning new things that will be needed in future.

Leaders must set a clear and firm learning objectives which is aligned to the business objective.  The strategic value of learning must be clearly articulated. Employees will be motivated to learn more only when they understand its importance and value.  

For example, when leaders in the IT department of a Bank learnt about the benefits of Big Data analytics, they created a small team - whose main task was to learn about Hadoop and see how Hadoop could change the current Business Intelligence (BI) operations. 

At Open-Silicon, Dr. Satya Gupta initiated a small team to go and learn all about new manufacturing process using 45nm lithography and see how it impacts the current design process. 

Leaders should encourage people on the floor the review new & emerging technologies and understand how it will help & benefit them. Without this guidance, any learning program will flounder aimlessly and lose steam.

3) Create space & time for learning   

Learning does not happen in vacuum. People will need time and space for it. This implies that top management must create the necessary time & space for learning. The best example in recent times was Google when it was still a startup. Google allowed its employees to spend upto 20% of their time on personal initiatives and projects. This created the necessary space for engineers to learn new things, try out new things and Google benefited enormously from it. 

Wipro and several other organizations conduct formal classes on weekends, where employees can sign-up to learn new things. Large organizations have collaborated with universities to create weekend programs that leads to Master's Degrees. Today, universities in Bangalore also encourage industry leaders to come and teach during weekends. I used to teach for Master's students at Manipal Institute of Technology. Teaching is a very good way to learn.

Startups can mimic the same model and help their employees learn - it can be simple certification programs or even university degree program. 

4) Encourage collaboration

Learning is best done in a group. For startups, it is not possible to create a personalized learning program or an Individualized development plan. Instead, it is best to network with other startups in the area and encourage collaboration between startups and have a joint learning programs. Collaboration lowers costs and encourages people to do more. 

Collaboration encourages employees to work in teams, share information, knowledge and learn through a peer group network. People will learn faster when they learn from others in their team.  

5) Encourage experimentation  

Learning without hands-on practical experimentation is useless. It would be akin to reading a novel. To get the benefits of learning and encourage employees, organization must allow for experimentation. Experimentation needs tools and resources. Startups have to provide adequate tools and compute infrastructure for experimentation.

Experimentation needs tools and resources. Startups have to provide adequate tools and compute infrastructure for experimentation. Experimentation can be in form of developing Proof-of-concept or even taking on a open-source projects.

For example, having a weekend hackathon will provide an opportunity for learners to try out their new skills. 

6) Fail Fast, unlearn and relearn

Learning is good for the individual, but for the organization learning a wrong tool or technology will not help. So leaders must watch out for such misalignments and wrong turns. When it is clear that the learning program is not aligned with future needs, the program must be killed fast. 

Leaders in startups have to be flexible and open to fail fast, unlearn things and relearn new things.  

For example, I had a case where a team was learning about MangoDB for bigdata analysis - but after few experimentation it was clear that this tool was not the right one. So the team quickly stopped all learning activities on MangoDB and switched over to Cassandra.

7) Setup a reward system

Employees who are innovative, creative, and experimental must be rewarded.  Rewards are always a great way to motivate people. Rewards is way of acknowledging that the learning program adds value to the core business.  Best part of giving rewards in a learning program is that rewards need not be cash based. It can take several forms - for example a plaque or a certificate or even a preferred parking spot etc.

Like in all organizations, rewards must be given judiciously and must be merit based. Having a regular rewards program will keep people motivated to learn more. However, one must be careful to ensure that the learning program rewards are not linked to performance at work. Regular work and learning should be kept separate. Also avoid giving out too many frivolous rewards. 

8) Encourage Feedback

If leaders in a startup keep a close eye on the learning program, then they will have valuable feedback. Yet there is a need to formally collect feedback on each program so that programs can be improved further. Feedback also helps to identify & remove any barriers to learning. Constant feedback and improvements will create a continually learning organization. 

9) Encourage a Teaching Culture

Learning cannot happen without teachers. So encourage senior employees to reach out and teach. Developing a cadre of coaches and mentors to help employees.  Caches and mentors love to teach - because teaching is a great way to learn several new things. Teaching a course helps people learn new skills such as pubic speaking, presentation skills, interpersonal skills, empathy etc. 

If business leaders act as mentors and coaches, organizations will becomes a learning organization - and will know what it takes in terms of time & resources.

Closing Thoughts

Building a fast learning organization is too important to be left to HR department. While large companies have a formal training department and with dedicated budgets, startups will have to be more creative and flexible.

It is very important to inculcate a learning culture at the startup phase itself so that all employees know the value of continuous learning. As the organization grows, it is important to formalize many aspects of employee learning and have proper organizational controls to oversee learning.

In this article, I have focused on learning in startups. If you have suggestions & feedback - please send it to arun.kottolli(at)gmail(dot)com.  

Is Yahoo! a Negative Worth Business?

Currently, Yahoo market capitalization is about $31 Billion! Yahoo's stake in Alibaba is worth $32 Billion, Yahoo Japan is worth $8.5 Billion and has Cash of $5.9 Billion.

This implies that Yahoo's core Internet business is worth -$10.4 Billion!! (negative 10.4 Billion US Dollars)

This negative valuation implies that at this stage, Shareholders are better off by liquidating the business and returning the money to shareholders.

See: Wall Street Article

Most Common Leadership Failures in Startups

Recently, Mr. Mohandas Pai, CEO of Manipal Learning and former CFO of Infosys made a statement that most startups in India will fail. (see: Only 10% of startups will be very successful)

While it is a general truth that 90 percent of startups will fail. Founders often attribute business failure to a range of issues that range from a lack of capital, poor marketing, ineffective product development or the inability to meet demand.

But the real cause for failure is likely to be Leadership.

Leadership, or lack of leadership is a BIG problem startups face. Its not just leadership at the top level, but also at all levels of the company. Leadership issues in the organization eventually boils up slowly leading to implosion of the business.

Here is the list of five most common leadership mistakes:

1. Expecting too much, too soon.

A typical startup is always in a hurry. Projects are not properly planned and demands are constantly changing and adding immense pressure on teams to deliver. This adds undue stress on the team and the team delivers an incomplete or defective products. Expecting too much too soon just doesn't work.

Solution: Leaders must take time to get a clear understanding on expectations and must not be afraid to say "No" when it is not possible to meet new demands.

2. Not providing adequate resources

It is typical of startups to demand something from nothing.

All organizations need: resources, time, and clear requirements. Often times in a startup resources are in critical shortage, this implies spreading the workforce too thin. This will work only in short term - but it also impacts quality of work. Adding unnecessary pressure to an already frenetic work pace does not result in great products.

3. Failure to speak the business language

Startup is not about a product or a service. It is a business that runs on money or cash. The language of business is money. Most technocrats who start companies are not comfortable  in communicating in real numbers of money. Often they end up using "soft terms" instead of hard numbers - which over a period of time leads to poor decisions and eventual failure.

4. Leaders hire & reward conformism.

"We are a great team, we think alike & we work alike." This seems to be a common motto in most startups. Often times, startups are usually all men, in the same age group, with a very similar background and experience. Group thinking often prevails, and that often leads to failure. Anyone who fails to confirm to the leader's thoughts are thrown out.

The reality is that great minds do not always think alike and if one could work effectively with people who have different point of view, and their value is judge on the merit in very important. When you are hiring or promoting someone - first think 5Ws and H questions and then make the decision.

Who is being promoted?
Why is this person being promoted?
What are we promoting, the person or the skill?
When is the opportune time to promote this person?
What will be the obstacles to his or her success?
How can we help him or her? 

5. They don't communicate bad news

Communication is at the heart of getting results. Good news or bad must be communicated. Bad news in particular must be communicated with great care & clarity.

Down playing bad news or sugaring up failures in town hall meetings is a very common mistake. As a result the team does not know how to adjust to the actual reality and that in turn leads to poor decisions.

Leadership at start ups have to be very open when communicating internally with all employees, and that clarity which comes from effective communication helps everyone to take better decisions.

Value of Social Media Analytics

This weekend, a newly hired marketing manager asked my opinion on social media analytics. His company is medium sized construction company and had recently ventured into housing business. As I spoke to him and advised on social media analytics strategy, I thought of documenting the gist of what I said in this blog.

Today, every company in fortune-500 list is using an array of social media analytics - from a host of data analytics services companies. Even smaller companies with revenues in less than $10M are now buying social media analytics.

Social media companies are also making it easier for companies to collect data through APIs & its free. Facebook insights, twitter analytics, Google analytics etc. are so easy to use - that even small start ups can benefit from it.

So this raises a question: Is the custom built sophisticated big data analytics any better than the free versions from Facebook, Twitter & other social media?

At the first level, paid analytics looks more sophisticated and definitely looks good. Vendors offer pretty reports and better interfaces. For a higher price, few companies offer better math that is used to quantify ambiguous metrics - such as depth of customer engagement or Potential reach of the product.

A common justification for paying for social media analytics is usually:

 "Customers are very important to us, so why not spend some percentage of marketing spend to know & understand what customers are saying."

"Hearing what customers are talking - will help us better position out advertisements. Even a 1% increase in customer response to an advertisement leads to 10-15% increase in sales." 
 
While there is no denying that there is value in social media analytics, businesses must spend considerable time to conduct rigorous data modeling ahead of time to ensure that the metrics provided by a third-party analytics program/services are meaningful to the business. Without an upfront data modeling - you will end up with a flood of data and reports - that does not tell anything new.

Data modeling starts with identifying the right data - Not just data. You need to filter out spambots, auto retweets and clickbots etc.. Next, you need to identify keywords or phrases that are relevant to your business. For example word "suck" is generally bad for retail, but a good word for vacuum cleaners. It takes time to identify which phrases are "positive," "neutral" or "negative".

Keyword based analytics can give huge value - but only when it is done right. Businesses need to spend time/effort to identify keywords & refine keywords on periodic basis.

Once data modeling is done, the next is to firm up on the strategy:

• How to deal with the information you are getting from social media feeds?
• How to manage customer complaints?
• How to increase traffic with social media?

In the world of social media, the time to respond to customer complaints and negative comments is really short. So businesses needs to have a response strategy in place - before starting off on social media analytics.

Closing Thoughts 

Unless businesses have done their homework in terms of data models, response strategy, It is best to use the free basic metrics provided by the social media platforms. Only when you have a strategy - then invest in social media analytics.

Product Leadership - Building Successful & Innovative Products

One can learn good management theory and principles in MBA colleges. One can learn creativity and design in design institutes. But no one teaches how to create successful products!

Creating successful new products requires a right marriage of right brain thinking:  creativity/design, and left brain thinking: Process, science/maths, rational management. Apple Inc. is a perfect example of left brain right brain thinking - Jonathan Ive the designer and Tim Cook, the operations manager. Steve Jobs the business leader.

Every company that develops new products needs product leaders managers who can get the right balance between creative people and managers to create successful products.

Product leader has to bring in few tricks: "Design thinking" and "Lean Development"  techniques to rapidly experiment with solutions.

The secret for success in new product development is to understand that developing new products is not much about product development! Instead, it is all about creating customers!

Creating customers is all about understanding customer needs, desires, & problems, and solving it profitably. If the number of customers are large enough, then you have created a successful product.

Since there is a very high level of uncertainty in creating new customers, one needs to be agile & lean when it comes to trying out new designs - i.e, ability to move/change/adopt quickly. Since things are at flux and needs are constantly changing one has to be lean - i.e., use minimal resources for experimentation.

Startups generally are good at new product development - mainly because they are not focusing on sustaining customers. They are creating new customers. They have few resources & are forced to be lean and they are agile. Enabled with rapid decision making leadership, who is not afraid to experiment or fail, Startups are constantly figuring out how to create a customer.

I always say "Without a customer, you don't have a product. You only have a prototype!"

I have worked in startups and have seem several other start ups and established companies follow a similar process towards new product development. Often

Step 1: Develop an Insight: 
Identify what the market needs or desires. Start with talking to customers, question customers current levels of comfort & needs. Observe customers and learn. Network with similar minded people. Also be ready for surprises. Lastly experiment - to get deeper insights about problems that is worth solving.

Step 2: Define the Problem: 
To develop a successful product, one needs to know what is the real problem that needs to be solved. Competition could also have the same insight - but had failed, because they did not solve the right problem.  Discover the customers' need or problem first, and then make sure you are going after a problem worth solving.

Step 3: Solution: 
Develop a prototype first. Check if the prototype meets the minimum requirement in terms of solving the customer problem. Practice agile & lean principles to rapidly develop prototypes - instead of developing full scale products. If needed, develop multiple prototypes, each to solve many aspects of customer problem. Iterate until you develop an awesome product - the one that delights customers.

Step 4: Develop Business Model: 
The finally solution must be priced to market. Carefully examine the entire cost structures, validate go-to-market strategy. If the need be, one has be creative in pricing the product. A differentiated pricing strategy that makes it easier for customer to acquire the product.

Closing Thoughts

Product Leaders must push the design and management teams to go beyond the obvious. Force the team to Think differently or experiment. Accept failures during prototype stage - and fail fast. Once a failure is identified, pull out the product and iterate until the product succeeds.

Leaders must embrace uncertainty in the product development, Challenge the problem statement until every stakeholder is convinced of the problem, Set a high pace for development, and be bold in experimentation.

Rise of Anti-Social Apps & Limits of Social Networking

Smart phones have indeed made people smarter. Right now, there are millions of Smartphone users who are worried about their loss of privacy.

On one hand Smart Phones gave users tremendous power to communicate with anybody in real time - via social networks. Social Networking Apps such as Facebook & Twitter gained immensely from this. But with passage of time, users are slowly understanding the "dark" power of social networks: Loss of privacy. Some people found it the hard way - when they were not getting hired - because of some "party pictures" in the social network, or a comment.

The social networks help people connect and communicate, but it also remembers all communications forever, and all communications are instantly made public!  This leads to loss of privacy.

Smart phones today have built-in GPS and it can imbed all the locational information in photos, videos, messages etc. Cell phone service provider can track the location of each smart phone using the GPS or by triangulation. In extreme cases, malacious software can be added to the phone which can record all conversations/communication and send to a predetermined location without the knowledge of the user!

Its no wonder that people are now abandoning social networks. Many users whom I know are not posting anything on their network and the volume of activity in my social network has dropped by nearly 90% from its peak two years ago. In other words, we have seen the high tide mark of Social Networking.

As users became more aware of the disadvantages of Facebook & Twitter, they switched over to apps such as Snapchat & Whatsapp or LiveChat, etc.  These apps allow discreet communications.

Secrecy has its advantages for people and It's quite attractive. These niche apps were being developed to capture some of few remaining untapped social-media markets.

Now, a  new trend of Apps are coming: The "Anti-Social Apps." While most social networks aim to connect people, one new service seeks to join the growing trend of doing the opposite and help you avoid them.

Some of the new Apps in this category are:

Cloak: 

Cloak 'anti-social' app helps you avoid your friends. Cloak uses location information from other social networks (FourSquare and Instagram at the moment) to work out where your friends are. It then informs you via push notifications so you can avoid anyone you'd prefer not to see. Users can choose to receive an alert when certain people are believed to be nearby.  You can also view friends on a map or on a detailed list telling you how close they are, to the nearest mile. It's free and currently available on IoS.

Snapchat:
Snapchat is used to send pictures and videos - which is automatically deleted seconds after they have been viewed.  This is opposite to that of Facebook, which keeps the photos/videos forever and for everyone to see.

Secret: 
Secret broadcasts messages anonymously - are growing in popularity. Using Secret, one can share a confession with your network (in practice, those of your contacts who also have the app), though they won't know it was shared by you. You must have a minimum of three friends before you start sharing (in order to protect your secrets). In theory, secrets that are liked and reshared can spread across the world — though the app's developers insist you won't be identified at any point. Posts are encrypted so that the Secret team doesn't know what you're sharing.

Whisper: 
Whisper, like Secret enables users to share secrets. One can also respond to other Whispers with your own, and there is a private messaging app if you long to live in a riddle wrapped in a mystery inside an enigma. You can browse by topic, so you can quell your conscience by unearthing others who have cheated on the other halves/shoplifted something/failed to give up their seat on the Tube.  It's free and available on IoS.

Closing Thoughts 

Today's young generation are done with sharing and uploading nearly every part of their lives. Instead, intimacy and privacy in the digital age is now what they seemingly seek. Constantly being connected to the world was cool way back when, but this constant connection has created lots of problems and people are fleeing from it.