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The Secret Science Behind Big Data And Word Of Mouth

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Wordofmouth

Editor’s note: Jonah Berger is a marketing professor at the Wharton School and author of the New York Times bestseller Contagious: Why Things Catch On. Follow him on Twitter @j1berger.

Why do some companies, products and services get more word of mouth than others? It’s not luck. There’s a science behind it. Social media gurus always preach that no one talks about boring products or boring ideas. So you would think that more interesting products and brands get talked about more. Surprisingly, novel things get brought up more than mundane ones.

Startups live and die by word of mouth. Whether it’s a new website, a revolutionary recruiting service, or B2B play, consumer awareness is always low at the beginning. No one realizes you exist, so you have to get the word out. But most new ventures don’t have a big advertising budget. They have to grow organically: Get existing customers or fans bringing in new ones — one at a time.

Why, then, do some companies, products and ideas get talked about more readily than others? People often think getting word of mouth is like capturing lightning in a bottle. You have to get lucky. The market has to be just right. Or you need the right combination of three or four indescribable qualities that combine in some inexplicable way to create magic.

That’s a great theory. Except it’s completely wrong.

People often think getting word of mouth is like capturing lightning in a bottle. You have to get lucky.

There’s a science behind word of mouth. It’s not random and it’s not luck why people talk about some things rather than others. Just like behavioral economists have studied why people make certain choices, or statisticians have pulled out insights about human behavior from “Big Data,” researchers have been hard at work analyzing the human behavior behind our decisions to talk and share.

In one recent investigation, for example, my colleague and I looked at word-of-mouth data on almost 10,000 products and brands from Coca-Cola and Walmart to small startups. Everything from technology companies to services, from B2B to consumer package goods. In another project, we analyzed the virality of almost 7,000 pieces of online content. Everything from politics and international news to funny pieces, sports, and style.

But the focus of these studies wasn’t just documenting which products get talked about more, or what types of online content go viral. Rather, it was about understanding the motivations behind those outcomes: the underlying human behavior that drives some things to get talked about more than others and some things to go viral; how different emotions (e.g. sadness versus anger) shape what people share; how communicating online versus offline impacts whether people talk about what is top-of-mind; the psychology of talk; the science of social transmission.

Take Triggers. Disney is more interesting than Cheerios. It’s a really engaging emotional experience. But the problem is that people aren’t triggered to think about it very often. Sure, people talk a lot about the brand right after they go to one of the theme parks, but unless they’re reminded to think about that experience in the weeks and months that follow, they don’t keep bringing it up.

Cheerios is less interesting, but people eat breakfast once a day, 365 days a year. Even if they don’t buy Cheerios, they still see it once a week when they wheel their grocery cart through the cereal aisle. This makes Cheerios more top of mind more often, increasing the chances it gets mentioned. A product or idea might be really interesting, but if people aren’t triggered to think about it, they’ll never bring it up. Top-of-mind means tip-of-tongue.

Triggers are only one of the key word of mouth drivers my colleagues and I uncovered in our research. Again and again, I’ve seen the same six principles driving what people talk about and share. These six principles can be arranged in an acronym (STEPPS: Social Currency, Triggers, Emotion, Public, Practical Value, and Stories).

Social Currency. Just like the car we drive and the clothes we wear, the things we say affect how people see us. So the more something makes someone look good, the more likely they’ll be to pass it on.

Triggers. If something is top-of-mind it will be tip-of-the-tongue. Just like peanut butter reminds us of jelly, the more we’re triggered to think about a product or idea, the more we’ll talk about it

Emotion. when we care, we share. Whether positive (excitement or humor) or negative (anger or anxiety), high arousal emotions drive us to share.

Public. People tend to imitate others. But as the phrase “monkey see, monkey do” attests, the easier it is to see what someone is doing, the easier it is to imitate. Public observability drives imitation (e.g. iPod’s white headphones).

Practical Value. People don’t just want to look good, they also want to help others. So more useful equals more shared. Think articles about 10 ways to raise capital or five key negotiating tips.

Stories. No one wants to seem like a walking advertisement, but they will talk about something if it’s part of a broader narrative. So build a “Trojan horse” story, a message that carries your brand along for the ride.

These six principles comprise a formula for getting more word of mouth. They’re a recipe for crafting contagious content and for getting more people talking about any product or idea.

Will following this formula guarantee a viral hit? No. But it will increase the batting average. No one hits a home run every time, but by understanding the science of hitting, people can raise their average by hitting more singles, doubles and even home runs.

The same is true with word of mouth. By understanding the science behind why people talk and share, companies and organizations can get more word of mouth for their products and ideas and help those products and ideas catch on along the way.

[Image via Shutterstock]

Article courtesy of TechCrunch

Enterprise Collaboration Startup Bloomfire Takes On An Additional $2 Million From Silver Creek Ventures

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Bloomfire

Bloomfire, the Austin, Texas-based startup that makes cloud-based content-sharing software for enterprises, has taken on an additional $2 million from Silver Creek Ventures as an add-on to its $8 million Series A funding round previously announced back in March.

This brings the total investment into Bloomfire, which was founded in 2010, to $20 million. In addition to Silver Creek, Bloomfire’s investors include Austin Ventures and Redpoint Ventures.

The funding was disclosed today in a regulatory filing with the SEC, and confirmed by a Bloomfire spokesperson who provided the following statement:

“The $2 million is additional funding, incremental to the $8 million raise in March. This is a proactive investment from Silver Creek who liked our team, the market space and progress to date and wanted to participate in our growth. We are pleased to be working with Michael Segrest and the rest of the team at Silver Creek Ventures.”

Enterprise in general is of course a hot space of late, and Bloomfire itself has had a year of solid growth. The company now has more than 65,000 active users and more than 250 paying customers including the likes of Etsy and Bechtel, my colleague Rip Empson reported back in March. Of course, the competitive landscape is as crowded as ever, so these new infusions of funding could help Bloomfire work to keep an edge and foster even more growth in the months ahead.

Article courtesy of TechCrunch

Iterations: How ESPN Thinks About The Future Of Its Product And Technologies

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Ryan Spoon (left), SVP of Product; and Aaron LaBerge, SVP of Technology, ESPN.

Ryan Spoon (left), SVP of Product; and Aaron LaBerge, SVP of Technology, ESPN.

Editor’s Note: Semil Shah is a contributor to TechCrunch. You can follow him on Twitter at @semil.

After spending time in the comforts of the Valley as a founder, operator, and venture capitalist, my friend Ryan Spoon headed east — to Bristol, Conn., of all places — to follow the intersection of his passion: technology and sports. And he’s not just at another sports company — he’s at ESPN, a sports network that reaches over 100 million homes with annual revenues approaching $8 billion. As one of the most valuable media networks out there, ESPN is also at an interesting point with respect to the shift happening in broadband, their subscriber fees, and the opportunities and challenges presented with mobile technology. Now as the SVP of Product for ESPN, the massive sports media and entertainment company, I invited Ryan and his colleague, Aaron LaBerge, who runs technology, to share some insights of how they left the technology world and ended up at ESPN and what ESPN thinks about the intersection of mobile and social in delivering content, developers and their APIs, the emerging hardware ecosystem for sports and fitness, and much more.

What brought the two of you to ESPN?

Ryan Spoon: Aaron and I are both new to ESPN, in different ways. I joined in August, as you know, as a move from Palo Alto and Polaris Ventures (previously eBay, founder of beRecruited). Aaron was previously at ESPN and Starwave (1997-2007) and left to found and run Fanzter, a consumer Internet startup. Aaron was at Starwave, which worked on the very first version of ESPN.com. I oversee product and Aaron oversees technology (SVP Technology & Product Development).

There are three primary factors that motivated each of us at ESPN and that drive our digital strategies: (1) Scale. We have the privilege of working at an amazing company that carries a meaningful brand and touches tens of millions of fans, each day. That is inspiring. Sometimes it’s daunting. It’s certainly fun. And it is also clarifying: it makes us focus on building experiences and products that touch massive numbers of fans. (2) Passion. The back of all of our business cards carry the ESPN mission: “To serve sports fans. Anytime. Anywhere.” It’s a simple statement that embodies that passion of fans (which we all are), the emotional connection with our properties (products, content, shows, etc), and the focus on live, personal and always-connected experiences. (3) Technology. First and foremost, ESPN is a media company. But we are also a technology company and culture. The blending of those two (media and technology) – particularly at our scale – is the special part.

How does ESPN think of the different “screens” users interface with, all the way from TV to web to tablet to phones?

Ryan: From smartphone to the 60″ television in your family room, ESPN products need to both satisfy the fan’s need in that situation AND take full advantage of the device itself. For example, consider WatchESPN — on your mobile device, we want to get fans into live games as quickly as possible. Speed, simplicity and navigation are most important. On the iPad, fan’s have a different behavior and we have more real estate to play with; consequently, we can introduce more functionality and you’ll see new versions coming shortly. Using Airplay, we can transport either of those experiences onto your television and then turn the handset / tablet into an additional screen (ScoreCenter, Gamecast, etc). This necessitates an understanding of a product’s experiences on different screens and in different moments, and then building to those environments.

Aaron: From a content perspective (audio, images, video) we’re spending a significant amount of time experimenting and improving our media encoding and image compositing systems, so that no matter what the size of the screen, we’re delivering the absolute best version we can. This includes everything from the visual quality to the compression algorithms we use to help us get around network limitations when distributing our content.

ESPN must have very rich data sources. Will you make an API available to developers, and if so, what kinds of apps and services would you encourage them to develop?

Aaron: We currently have a developer program which is being used by over 100 partners. The APIs are pretty comprehensive. Our main focus internally, however, is on centralizing all of the data at the company and making sure it’s available programmatically through our APIs. This includes everything from scores and statistics to the infographics that appear on our shows and live events. This is going to allow us to build the products we want much faster and on many more platforms.

We have talked a lot about applications and devices – what about ESPN.com – what are you focused on there?

Ryan: We are working to simplify ESPN.com around a few core themes. First and foremost, our content is the true product. The quality and diversity of content across ESPN.com is unparalleled and we need to make it the focal point. We also need to make it simpler to find, navigate, share, and so forth. Secondly, we are focused on building more personalized experiences across all of our products. My ESPN.com should – and it will – feel different than your ESPN.com. Lastly, we are unifying our mobile applications and products with ESPN.com. Those experiences should be consistent from a visual, interactive, and content perspective – and they should be seamlessly integrated and connected.

Do you see ESPN having a one-app-fits all approach for mobile (like Facebook), or do you see the future as federating across sports for specific audiences and experiences?

Aaron: From a technical perspective, we’re ready for both. Our new Digital Center (goes online in 2014) is a completely IP-based, format independent facility. We’re constantly reinventing our workflow so that every person who touches a piece of content is adding meta data to help drive our APIs. We create highlights with multiple edits and multiple encoding formats — to support all of our content platforms. Our goal is to make the best use of our extensive rights portfolio. The investments we’re making in our infrastructure, tools, and workflows are going to allow us to build products that just aren’t possible today.

Ryan: We have really focused our application strategy and offering to center around the core pillar experiences: scores & news (ScoreCenter), live games and video (WatchESPN), streaming audio (ESPN Radio), and games (Fantasy sports). These experiences and products are sufficiently different. I believe they should exist as individual applications. However, they cannot be independent applications — they need to speak to one another and, where it makes sense, be integrated. For instance, you can access live Gamecasts via ScoreCenter – and when the game is available, we provide one-click access to open the live stream within WatchESPN. ScoreCenter, WatchESPN, ESPN Radio, and Fantasy each have millions of loyal fans. ScoreCenter for instance is approaching 50 million downloads. These apps should feel like one another, speak to one another, and get users directly into the desired action.

What does ESPN think of the consumer trend to wear health sensors like Jawbone Up and Nike Fuel Band?

Aaron: Over the coming years, sensor-based analytics are going to have an effect on everything from youth and participatory sports all the way up through the pros. We are actively involved in finding ways to measure, interpret and share athlete, ball, and sport performance. Our main goal with all of this experimentation is data. We look at this data to help tell better stories and to enhance our products.

Ryan: It’s more than a trend: it’s an evolution of technology and personal curiosity. Jawbone, Nike, Fitbit, etc. are the devices… but I also use Nike’s Running application several times a week. To me they represent the desire to visualize, understand and share data. Nike is cataloging my physical activity in beautiful, compelling, fun and social ways. Moving beyond personal activity, ESPN sits atop a world of data: plays, players, games, seasons, records, and so on. Those too can be rendered in beautiful and compelling ways.

Is ESPN hiring? What types of people?

Aaron: ESPN is a special place if you love technology and sports. We’re always looking for passionate people to help us build new products and platforms that will be used by millions of fans. When you think of scalability and large-scale applications, we have some of the greatest technical challenges in the world to solve. For sports fans and technology enthusiasts – there really is no place like ESPN. We’re building a New England tech hub and are always looking for great people within product, design, and technology. Contact either Ryan or myself if interested.

Article courtesy of TechCrunch

Lyft Lifts $60 Million From Andreessen Horowitz, Gives 30,000 Rides A Week A Year After Launch

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Lyft Highway shot

It was almost one year ago (to the day!) that my colleague Kim Mai-Cutler wrote our first story on Lyft, and how the company was going to offer some lower-priced competition to on-demand ride leader Uber in San Francisco. Now, 366 days later, Lyft is celebrating the anniversary of that launch with some huge news: It’s raised a $60 million round of financing led by Andreessen Horowitz.

The new funding will give Lyft a huge shot in the arm as it plans to expand aggressively both in the U.S. and internationally, according to founder John Zimmer. And it will have Andreessen Horowitz to help, as a16z general partner Scott Weiss will be joining the board and the firm will be lending some of its operational experience to Lyft as it scales up.

“Andreessen Horowitz has demonstrated that they are the top VCs in the world to work alongside entrepreneurs and build real and established businesses,” Zimmer told me. “It’s great to work alongside someone like Scott, and Mark and Ben, who have built really large companies and are willing to roll up their sleeves and work alongside us.”

“This is why [Andreessen Horowitz] came together as an organizing principle. All of us have scaled companies,” Weiss said. As it pertains to Lyft and its growth moving forward: “Now it’s an execution play of bringing this out to the entire world. It’s about, ‘How do you bring in management talent and move faster than you thought you could?’ We’re going to put the full weight of the firm behind [Lyft] doing that.”

In addition to its new funding from Andreessen Horowitz, Lyft is also confirming a $15 million round led by Founders Fund, which we reported on earlier this year. Altogether, the company has raised a total of about $83 million since being founded as Zimride in 2007. Along with Weiss and founders Zimmer and Logan Green, the Lyft board of directors also includes Founders Fund principal Geoff Lewis, as well as Raj Kapoor, who had invested in the company as managing director of Mayfield Fund.

30,000 Rides A Week

The funding comes as Lyft is already growing rapidly in all of its markets, including San Francisco, where it competes against ride share offerings from Uber and SideCar. There’s also growing adoption of taxi e-hail apps such as Flywheel and hybrid taxi-community app InstantCab. With mounting competition, Lyft has more than doubled its number of drivers in its launch market, and is still trying to keep up with demand.

The incredible growth that Lyft has shown is one thing that impressed Weiss and Andreessen, as they evaluated the company for investment. “Two months ago, they were doing 14,000 rides a week,” Weiss told me. “Now they’re doing 30,000 rides a week.”

Lyft is also seeing fast adoption in new markets. It launched service in Los Angeles in January, Seattle in March, and Chicago earlier this month. In each case, both the number of drivers and passengers who have signed on in the first several weeks of a new market has outpaced the market that preceded it.

With the new funding in place, Lyft plans to accelerate its expansion schedule. The company brought on Cherry co-founder Travis VanderZanden to lead operations and, with three or four launches under its belt, the team thinks it’s got its expansion playbook down. Lyft will be hiring in all aspects of its business — community, engineering, operations, and public policy — as it plans to scale globally. Yes, globally.

Safety First

While it plans to expand into a number of new markets, the Lyft team recognizes that there will be challenges on the regulatory front as it attempts to get regulators on board with the idea of on-demand ride-sharing services. Competitor SideCar has faced regulatory scrutiny in a number of new markets that it has launched in, including Austin, Philadelphia, and New York City.

So how does Lyft plan to convince regulators that its service should be allowed to operate? Safety is key.

“I think this is the year for a lot of that [regulation] to get ironed out,” Zimmer told me. “Our approach is and always will be to work together with regulators and stress what’s important, which is safety. I think technology can actually get us to a safer place.”

For Lyft, that includes background checks and driver safety checks. But the company goes above and beyond that, trying to hire drivers who are actually, you know, friendly and nice to talk to. And, of course, it ties everything back to an identity layer, requiring all drivers and passengers to connect to a Facebook account. That helps to ensure that, even if something does go wrong, Lyft has a way to identify both parties in the case of a ride gone bad.

Weiss admits that requiring someone’s real identity through Facebook Connect could limit the potential market in some ways, but it also builds a required level of trust between driver and passenger. Breaking that trust barrier is necessary when you’re talking about peer-to-peer services, and Lyft appears to have succeeded. For instance, more than 50 percent of Lyft passengers are women, Weiss notes.

So far, its safety record is one of the main reasons that Lyft has won over regulators in jurisdictions like California. And it’s a key part of Lyft’s plan to get regulators in upcoming expansion markets to allow ride sharing in their cities.

Airbnb for transportation?

Lyft has plenty of work ahead, Zimmer admits. But he’s confident that the company is on the right track to bring peer-to-peer rides to the world, and in doing so, fundamentally improve the transportation industry. About 80 percent of seats in cars are empty today, and Lyft wants to change that. The funding is just a small part of what will help get the company there, as Lyft is still on “page one” of a 100-page story, Zimmer says.

“For us, raising money is not what we set out to do,” Zimmer tells me. “We want to change the world and create a new form of transportation. Now we have all the ingredients we need to build out our community and make transportation more affordable and efficient.”

For Weiss, the idea of establishing a peer-to-peer marketplace around transportation was fundamentally different from what others in the space were doing and is part of what attracted him to Lyft’s model. “It wasn’t that Lyft was using smart phone technology to make existing transportation systems [like cabs and limos] better,” Weiss told me. “It was using the existing capacity of cars already on the road.”

The end result, they hope, will be a more efficient use of existing resources. In that way, Lyft reminds Weiss a whole lot of Airbnb, another company that Andreessen Horowitz made a big bet on. Will Lyft do to transportation what Airbnb did to the tourism and hospitality industry? Only time will tell, but the folks at Andreessen Horowitz sure hope so.

Article courtesy of TechCrunch

Can We Say Crowdfunding Bubble? U.K. Charity Launches Directory To Help Navigate Nation’s 30+ Local Platforms

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Nesta crowdfunding directory

How many crowdfunding platforms is evidence of a crowdfunding bubble? Well, when an organisation feels the need to launch a directory to list and detail all of the crowdfunding options in a single market it’s perhaps a sign that exuberance for crowdsourced financing is running a little high. Nesta, a U.K. charity focused on promoting national innovation, has launched just such a directory, detailing the U.K.’s crowdfunding landscape — and all, by its count, 31 current crowdfunding platforms up and running and begging for money on your behalf.

The CrowdingIn directory certainly looks like a useful resource if you’re trying to figure out how best to get your next project funded, with the ability to filter by model and sector/area of interest. So, for example, if you’re looking for an equity investment model in the arts-creative sector then using the directory quickly narrows down those 31 platforms to just one. Or if you’re looking for a donation model in the same sector you’ll find there are four options to choose from. The rewards model is generally more populous, with two pages of results to sift through. But as a signposting service it’s still doing some useful legwork.

The directory also summarises what each crowdfunding platform offers, details their conditions of use and links through to each website. Add to that, Nesta has put together a crowdfunding how-to guide. So far, so handy. But at the same time, 31 crowdfunding platforms does feel like an awful lot of local players for a single market. Consolidation feels inevitably and probably necessary. Or, as my colleague Steve O’Hear jokily puts it, how many crowdfunding platforms does it take to get a lightbulb funded? Not 31 surely…

Of course there is variation in the crowdfunding platform offerings, with levels of specialism — including some very niche offerings, such as SolarSchools: a platform for U.K. schools to raise money to buy solar panels to fund clean energy. That’s not the place to go to fund your next great business idea, clearly. But there is also still plenty of crossover, especially for the rewards model in creative sectors — which is really where the whole crowdfunding phenomenon kicked off.

Also worth flagging that the UK Crowdfunding Association, a self-regulating trade body for the sector, counts about half the number listed on Nesta’s directory among its membership — so there may be some useful cross-referencing to be done there. The Association does also include some platforms that aren’t apparently on Nesta’s list. So, depending on how you count it, the U.K. appears to have (even) more than 31 crowdfunding platforms…

Article courtesy of TechCrunch

Google Stock Price Closes At 52-Week High Of $915 On First Day Of Google I/O As Apple Takes Another Drop

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Google’s stock price came close to its 52-week high on the first day of Google I/O today, hitting $915 per share at close. In comparison, Apple today dropped 15 points to close at $428 per share, 277 points off its 52-week high.

This morning, Google stock jumped to $909 per share from its opening price of $895 when Co-Founder Larry Page hit the stage at around 11:45. It is now trading at $916.50 in after-hours trading. One analyst I talked to attributed the increase to Google’s announcement of its “all access” streaming service and the rotation out of hardware makers such as Apple and HP.

The difference between Google and Apple’s share price is a barometer of the tech landscape. Google is a data company. Apple is more about design, creating beautiful devices.

The difference is evident here at Google I/O. Google has built its infrastructure to manage more data than arguably any company in the world. It uses ths data to provide services that it highlighted today in its keynote. This includes its Google Translate APIs and the next generation of its Google Maps. The iPhone will always be elegant. As my colleague Josh Constine points out, the beauty of a device is just not as important, as the entire world becomes a fabric of data objects.

Article courtesy of TechCrunch

EdReach Teams Up With PBS And Sticher As It Looks To Become The Go-To Online Broadcast Network For Education

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Screen shot 2013-04-30 at 3.05.56 AM

The steady rise of tuition rates, class sizes and student debt combined with the decline in the number of teaching assistants, courses and programs has pushed education into the spotlight over the past year. Many schools have begun to turn to technology for answers, and higher ed institutions are now moving online at a breakneck pace to meet changing student behavior.

While this resurgence of education technology can be a boon for our beleaguered education system, the implementation of new technologies can come with high costs. Thus, as schools begin moving into uncharted territory, they need guidance. EdReach launched in 2012 to help shine a light on the changes in education and help schools find the tools they need to make the transition.

Through podcasts, articles and commentary, EdReach aims to provide a platform through which entrepreneurs can discuss innovations in education, while giving teachers, schools and everyone else a place to go for news and criticism on the most pressing topics of the day.

The broadcasting network’s daily programming has been downloaded by more than 40,000 teachers since launch, and today the company is looking to expand that reach with two new partnerships. EdReach has partnered with Stitcher, a startup that my colleague Josh Constine recently called the Pandora of talk radio, to help bring increased distribution and exposure to its educational programming.

Stitcher offers over 15,000 podcasts on-demand across a range of subjects, which can be streamed directly to mobile devices. With its new partnership, EdReach will become one of Stitcher’s main sources of educational content and news, allowing teachers to tune into its podcasts while making their morning drive.

This follows on the heels of its partnership with PBS NewsHour and Student Reporting Labs, which brought the company’s content to EdReach under a new channel and saw them team up to form a new social reporting movement via Whatisyoureduwin.com. Combined, says EdReach founder Daniel Rezac, the partnership aims to create a portal for news and success stories, allowing anyone to report on in innovation in education.

But the real goal of both EdReach and this partnership, the founder continued, is to re-brand education in the media. Both EdReach and EdSurge want to help bring the spotlight to trends in education and help teachers, students and schools make sense of the flurry of new EdTech products and tools. A valuable mission to be sure.

EdReach at home here.

Article courtesy of TechCrunch

Bitcoin Miners Are Racking Up $150,000 A Day In Power Consumption Alone

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bitcoins

There’s a gold rush going on these days, or a Bitcoin rush, at least. Driven by the recent swings in the value of a Bitcoin, more and more people are learning about and becoming interested in the currency. While they could just buy Bitcoins at the current market rate, others are looking to try their luck at mining Bitcoins. And like prospectors who traveled west during the Gold Rush of the 19th century, many Bitcoin miners will find that they spend more on chasing the Bitcoin dream than they’ll ever hope to win back.

As explained here, Bitcoins are “mined” by unlocking blocks of data that “produce a particular pattern when the Bitcoin ‘hash’ algorithm is applied to the data.” It seems simple enough, but the cost of Bitcoin mining is greater than one might expect. The more Bitcoins are mined, the more difficult it becomes to find the next block. Unless the miner is using the latest specially-designed mining rigs, the computers used often sport high-end graphics cards (since the GPUs are more efficient than CPUs for mining application). And running those computers requires a lot of power.

Blockchain.info, which tracks Bitcoin-related data, estimates that miners are using 1,005.59 megawatt hours of electrical consumption each day in their pursuit of new blocks of Bitcoins. That ends up costing about $150,000 in power costs each day to mine the currency. [Hat tip to Bloomberg for reporting on the data.]

That may sound like a lot, but miners on average are making money. According to Blockchain, miners are generating $470,000 in Bitcoin-related revenue per day. In fact, due to the recent interest in the virtual currency and its popularity, operating margins for Bitcoin miners are close to record highs.

While it might be easy to look at those numbers and think it’s NBD to just like, extract value out of thin air, Bitcoin mining isn’t as lucrative as it seems. Regular users hoping to use their regular computers to mine shouldn’t expect to just start making money by setting aside a few compute cycles to dig up Bitcoins. That’s generally reserved for special mining computers that do nothing BUT mine for Bitcoins using custom encryption processors.

As Biggs points out in his article, “While you could simply set a machine aside and have it run the algorithms endlessly, the energy cost and equipment deprecation will eventually cost more than the actual Bitcoins are worth.” That’s been confirmed by my colleague Matt Burns, who wrote in our internal message board that “after mining for a few days, the energy required to run my computer at full tilt was far greater than the Bitcoins I mined.”

Even if you do choose to pool your resources to mine, it’s a fairly complicated process, even for tech-savvy users. Check out the aforementioned article by Biggs for how he connected his home PCs into a Bitcoin-mining pool.

The alternative is to just buy specialty hardware designed to do nothing but mine for Bitcoins. Like any other investment, the return isn’t assured, and likely will be based on how Bitcoin market takes shape as time goes on. But right now, as with most gold rushes throughout history, it’s those who are supplying the miners that are finding the real riches.

Article courtesy of TechCrunch

Amazon Turns The Screws On Google, Microsoft Azure With EC2 Discounts

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Amazon is cutting deep in its bid to compete against Google Compute Engine and Windows Azure as the cloud platform of choice for enterprises. Today Amazon Web Services it announced discounts of up to 27% for EC2 Reserved Instances running Linux/UNIX, Red Hat Enterprise Linux, and SUSE Linux Enterprise Server, and up to 65% compared to on-demand instances. The move is a sign of how Amazon continues to shave margins — something it can afford to do because of its scale.

As my colleague Alex noted recently, Amazon’s business model in enterprise services (as it has been in consumer as well) has been to offer very thin margins on products and make up instead on scale. Amazon, as of December 2012, had dropped its prices some 23 times since first launching enterprise services in 2006.

Here is the breakdown of the current discounts.

Amazon’s Jeff Barr, in a blog post, writes that the prices apply to purchases made on or after today, March 5, and it provides a guideline for how to buy: those running servers less than 15% of the time should stick to on-demand; those between 15% and 40% should opt for Light Utilization Reserved Instance; between 40% and 80% is Medium; and higher than that is Heavy.

The move comes as Amazon also continues to build out its AWS portfolio. Most recently, it took its Redshift data warehousing offering global after launching it last year in a limited release. It is also offering, for this month, free extra consulting services (automated) via its AWS Trusted Advisor service, which uses big data (in this case taken from Amazon’s own records of how its own customers use its service) to monitor your company’s own usage and recommend ways to save money and improve performance.

Article courtesy of TechCrunch

How Halfbrick Studios Develops Games Like Fruit Ninja, Age Of Zombies And Jetpack Joyride

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halfbrick_logo

“This is the original concept shot for Fruit Ninja which was pitched to the company during Halfbrick Fridays. This is literally the very first piece of Fruit Ninja imagery ever created, so it’s historically significant,” Halfbrick Studio‘s Chief Marketing Officer Phil Larsen said in an email to me last week after I interviewed him and his colleague Richard McKinney, the company’s Chief Technology Officer, about how the company develops its games. Halfbrick Fridays is one of the ways the Brisbane, Australia-based company comes up with new ideas for its games. Fruit Ninja – its greatest hit to date – came out of this.

Halfbrick Fridays

About five to seven times a year, the company organizes these Halfbrick Fridays, they told me, where the whole company (about 70 people at this point), breaks into groups of around five people to brainstorm new ideas. The cool thing here is that it’s not just the game designers and developers who participate, but anybody who works for the company – be that in accounting or quality assurance – participates in these sessions. Age of Zombies, for example, is the result of this process (though Larsen and McKinney told me the final version looked very different from the prototype). So is Monster Dash. These events either last for about a week or are spread out to one day during a period of about five to seven weeks.

Once the idea for Fruit Ninja was born, it only took a few months to make, but some game ideas, the team told me, have been floating around for years and have yet to become reality.

From Idea To Game

What’s interesting about how Halfbrick turns its game ideas into actual products is that virtually all of its games use one underlying engine (written almost exclusively in C++). The core engine team consists of six “hardcore programmers,” as McKinney told me, and they ensure that those teams that work on the individual games have a stable architecture that they can then write their own code for.

One of Halfbrick’s larger teams, by the way, is now the cloud service team that provides the back-end technology to connect games together across platforms. Halfbrick uses Amazon’s EC2 platform for this and recently switched to a NoSQL database for better scalability.

The point of the core engine, the team stressed, is to be able to publish apps across platforms as easily as possible. Many game developers who have a hit on one platform often find themselves struggling to port their games to another platform, which can take months and could make them lose precious momentum.

Richard McKinney and Phil Larsen

Halfbrick Studios releases games for Windows, Xbox, PlayStation, Windows Phone, Android and iOS. All the core parts of the code are written in C++. “A lot of companies get into the mistake of writing just in Objective C and put all of their game logic etc. in Objective C,” McKinney told me. “How do you get that into Android?”

To avoid having to rewrite a lot of code, Halfbrick just uses C++ across the board and drops into native languages as little as possible. The core engine provides the developers with generic interfaces into the engine that abstracts almost all of the platform specifics for them and using C++ gives the teams control over performance and lets them fine-tune things and control memory usage. C++, they also stressed, offers a large number of third-party libraries for game developers.

Halfbrick then uses a mix of open source and proprietary tools to publish the code to the various native platforms.

Most of the development at Halfbrick happens in Visual Studio, though the team does need to use Apple’s Xcode every now and then. Visual Studio, McKinney told me, “is the best environment for creating games as far as we are concerned.” Halfbrick doesn’t want its developers to have to learn lots of different environments and the pipeline the team has created allows coders to work almost exclusively in Visual Studio and C++, even when they are developing for HTML5.

Being in Brisbane, the two told me, gives them access to a great pool of developers (there are also small teams that work out of Sydney, San Francisco and Spain). Brisbane features a number of game development schools and college programs, so finding talent isn’t all that hard. Given that C++ has long been the standard in the gaming world, game developers with the right kind of experience aren’t all that hard to find, but because the company doesn’t have too many formal review processes and works with very small teams, McKinney and Larsen told me that the company is extremely picky about who they hire. “We want to make sure we have a fun culture and don’t want to ruin the magic we got,” Larsen noted. Because of this, new hires are required to have a very high level of tech ability.

Looking ahead, Halfbrick plans to launch about five games this year after mostly focusing on expanding its existing catalog to new platforms last year. Some of these new games will be spin-offs of the company’s current hits and some will be completely new, but the exact details are obviously under wraps.

Article courtesy of TechCrunch

June 2013
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