MochaTalk

November has been a very busy month for our team. Our developers have worked very hard to bring forth the best features possible to make the experience of learning a new language fun and engaging. You may have noticed some of their work:
• Audio Comments – You now have the ability to record your comments under Share Mode. This is a great way to give other users tips on how to pronounce words and offer some extra encouragement along the way.
• My Submissions – See all of your exercise submissions in one place! Go to your profile and click “more” beside “Submissions” to see all of the exercises you have completed.
• Peer Review – When you submit a writing or speaking exercise, you now have the option to have your friends review your submission. In addition, you will be now be presented with the opportunity to offer feedback or comments on another user’s exercise. It’s all in the spirit of community!
• Group Chat Sessions – Livemocha’s tutors will host regular weekly group chat sessions and answer any questions you may have about the language you are learning. Check your homepage weekly to see when the next scheduled session is going on!
• MP3 Audio Podcast - We need your help to spread the word about Livemocha. The more users using Livemocha, the more opportunity you will have to find people who can help you learn a language. Its also more fun if you can practice learning a language with friends who you know. Invite 5 friends and you will receive a free MP3 Audio Podcast of one of the lessons in the language you are learning.
• Leaderboard Improvements - Before, we would show you only users who were at the top of the leaderboard but you couldn’t see where you were on the leaderboard. Now you can see exactly your position on the Leaderboard vs. other users who are around you. Hopefully, this change will help better motivate you to keep making progress on your language learning goals.

We have many more exciting features in the works over the coming months. A lot of you have taken time to send us feedback on the improvements that you would like to see on the site - thank you! Please keep sending us your feedback. We track your feedback closely and will be implementing many of your suggestions over the coming months. Please be patient, of course, since we get lots of good ideas and it can take time to properly implement some of these suggestions.

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After many months of hard work, the time has come to unveil the fruits of our labor. Welcome to Livemocha — we are building the world’s largest community of language learners. The language learning market is a huge worldwide market growing rapidly due to macro economic trends such as globalization, immigration and travel. We estimate the market to be more than $20 billion in size with emerging economies like China and South Korea spending billions of dollars on English and foreign language training.

English, of course, remains the number one language for international communication. According to the British Council, the number of English language learners is going to soar to 2 billion people in the next 10 to 15 years. However, with globalization, there’s been a significant interest in learning other languages. French and German have always been popular languages but now Spanish, Chinese and Hindi are in demand as well due to the growing economic role of regions/countries where these languages are spoken.

While the market for language learning is growing rapidly in the new millennium, the existing self help tools on the market have remain stuck in the 90s relying on outdated CD ROM technology. As I have written in my previous blog post (Taking advantage of Platform Shifts), platform shifts such as the shift to internet computing and now to Web 2.0, provide the perfect opportunity for new companies to displace the existing incumbents by being the first to embrace the new platform. It is time to create such a platform shift in the language learning market.

How is Livemocha different? When we designed Livemocha, we built it on the beliefs that:
1. People want to communicate with and integrate into cultures; they don’t want to be linguists.
2. Most of us are capable of learning a second language and it can be a lot of fun, but it takes time and commitment. Having a learning environment that provides strong motivation is critical to success.
3. Self-study provides the basics, but to truly become fluent, you need to have on-going real life conversations with native language speakers.

We believe that we have built a strong foundation for an effective and engaging language-learning solution. It is a system designed from the learners point of view since we are language learners ourselves. Unlike other language learning systems on the market, we don’t make outlandish marketing promises to teach you a language in 30 days or some such guarantee. However, we do believe that through our unique motivational system and the support of the community that you will make significantly greater progress in achieving greater conversational proficiency than you have experienced before with other self help tools. Here are some of the key element of the Livemocha learning system.

1. Over 160 hours of beginner and intermediate self-study lesson content covering 6 of the world’s most-spoken languages (English, Spanish, French, German, Mandarin Chinese and Hindi). The content is presented in an immersive, engaging and game like fashion through careful sequenced set of images associated with text and audio. The user is challenged to deduce the meaning of the words and phrases that they see in each lesson. We provide a range of reading, listening, writing and speaking exercises to test your knowledge and understanding of the lesson content.

2. A social network that brings together a community of like-minded language learners from all over the world. The community runs deep throughout the application. For example, we allow members to augment lesson content with grammar tips, alternate phrases and colloquialisms so that learners can get a much richer understanding of how a specific language is spoken in various parts of the world. We have also provided a number of structured writing, speaking and conversation exercises and tools where they can get help from native speakers. For example, when you make submission for a writing exercise, native language speakers in the community get automatically notified so that they can comment on it and provide feedback. We encourage you, of course, to return the favor by leveraging your native language proficiency to review someone else’s exercise. Finally, we provide conversation exercises and a text,audio, video chat tool to practice your speaking skills with other native language speakers on the Livemocha network.

3. A motivational framework to keep language-learners engaged and making progress. Having a community has allowed us to offer some truly compelling motivational tools. First, we organize each course so that it takes roughly a trimester to complete. We assign lessons and exercises that you need to complete each week and tell you where you are behind. Of course, you are free to proceed at your own pace but you will make the most progress if you stick to the schedule that we recommend. We also let you create your “study buddy” system by inviting other learners to join you in your learning process. As they make progress in completing their lessons and exercises, you get notified through a Facebook like news feed. This way not only can you provide feedback on each other’s exercises (or benefit from feedback they have received) but it also likely will provide the extra nudge that you may need from time to time. Finally, there’s a fun competitive element in the form of a Leader Board that tells you how you are doing versus other learners taking the same course.

The Livemocha service is open now to any user interested in learning language. Please come and join us in our language cafe. Do send us your feedback - there’s a feedback link on the top of each page. We plan to carefully listen to feedback from our users and continue to make improvements to make the learning process fun, engaging and fulfilling.

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The buzz around iPhone as we all know is reaching a fever pitch. Steve Jobs has said that they expect to sell 10 million iPhones by end of 2008. Is iPhone going to be a major hit as the industry expects or be a failure (at least compared to the hype and expectations). Clearly, it is risky proposition to bet against Steve Jobs. Steve Jobs has proven time and time again that he knows how to build products that not only are easy to use but also have tremendous sex appeal. The iPhone certainly has many appealing elements to it: a cool looking UI, a large screen and an innovative touch based navigation engine. It will also finally make the marriage of a cell phone and media device a reality — something that the traditional handset providers and carriers have failed to do.

There is no doubt that the iPhone will be sold out for many months to come. But the big question is what happens after 6 months or even a year, when the early iPod enthusiasts have purchased the device. Will the iPhone still be able to maintain its momentum with a broader user base allowing Steve Jobs to hit his goal of selling 10 million unit goal by end of 2008. I personally believe that this is going to be a tough number to reach. Here are some of the key issues that he will face:

Price: Price remains a key factor in the sale of cell phones. Generally 75% of all phones are sold at under $100 and only 5% of phones are sold over $400. At over $499, the iPhone is going to be a very expensive device. People argue that it is not really that expensive if you think of it as a combination BlackBerry and an iPod. However, I would still maintain that $499 is a very expensive price that will make people think twice before shelling out that kind of dough. Remember, most people also like to change their cell phone every 18 months. That’s very hard to do when you pay over $499 for a device. And technology in this industry gets old very quickly.

Battery Life: This is going to be a huge issue for the iPhone especially since there is no removable battery. And battery life is key requirement for a cell phone user. I can deal with a dead battery with an iPod but not with a cell phone. A large screen display is killer on battery life not to mention music and video playback.

Radio Performance: Having spent a number of years at RIM and testing a variety of different handsets with the carriers, I know how important radio performance is to the success of a phone. Typically, a handset manufacturer like Apple (unlike Nokia, Motorola, etc) will license the radio stack from another vendor. This makes it very difficult to deal with coverage, signal issues since you don’t own the code. Since users will be switching from a traditional cell phone device with superior radio performance to an iPhone, they will most certainly notice any coverage issues e.g. my Nokia phone works at home but my iPhone doesn’t.

Lack of keyboard: : I think this is going to be a real issue especially with those users for whom e-mail is a key application. Having to punch out your e-mail on a virtual keyboard is going to get old really fast.

Robustness/reliability: This is especially important for a cell phone which you carry around with you all the time and goes through a fair amount of abuse. My BlackBerry has gone through a washer/dryer cycle and still works. The carriers have a drop test that they use to determine how robustness of a cell phone device. I dread to think what will happen to an iPhone if you drop it on a concrete sidewalk. Having a such a large screen makes the iPhone particularly vulnerable to scratches, cracks etc. And the iPod has not been particularly well known for its reliability.

Low storage: : 4 or 8 GB of storage seems pretty low to me for a serious music lover. As for me, I would rather carry 2 devices - one optimized for voice and messaging and the other optimized for music/video/picture playback (i.e. an iPod with a minimum of 30 GB of storage). I do have a nano as well with lower storage but I am fine with the lower storage there because I use it primarily while working out at the gym — so having a lot less storage is fine because I want to carry a much smaller device with me.

Edge Performance: The iPhone seems to have a terrific browser with a cool UI. But it is going to be pretty significantly handicapped with a slow Edge network which is going to make browsing fairly painful. Many users who have looked at the cool browser demo on Apple’s web site are in for a disappointing experience.

Lack of an Application Platform: This is a sore point for many Apple developers who want to leverage their Mac applications to run on the iPhone. Apparently, Apple is asking its developers to develop Ajax based applications for the iPhone. However, you will still run into the speed issue of the Edge network. Ajax applications work fine on a fast broadband network but may not work as effectively on a slower network.

Let me know what you think. Are you going to camp out at a Cingular store on the 29th to buy an iPhone?

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Last week the Wall Street Journal published an article called “Dropped Call - How Motorola Fell A Giant Step Behind” in which it talked about how Motorola “milked” the Razr while “rivals sneaked ahead on the next generation”. In my opinion, the writer got it totally wrong. The issue wasn’t that Motorola fell behind in developing phones for the next generation 3G networks rather that Motorola couldn’t build a sustainable value proposition with the Razr. In a previous article, I had written about the importance of getting the value proposition right RIM nailed its value proposition with BlackBerry. But it is not sufficient to get it right for a single go around - your strategy has to continue to deliver value to customers over successive generations of products.

In Motorola’s case, their unique value proposition was built on a passing consumer fad — the ultra slimness of the phone. No doubt, the company rode it to great success selling over a 100 million phones. I even had to buckle to pressure from my daughter and buy her a Razr when it was still fairly expensive. However, barely a year later, many of her friends have a Razr and she no longer cares to have one. Other vendors like Samsung have also come out with ultra slim phones so Motorola’s unique value proposition is no longer so unique.

The question to ask though is why buying a Razr is no longer cool but buying an iPod is still cool for my daughter since all her friends also have iPods. I believe there are 2 reasons for it - one is pricing and the other is tremendous value proposition that the iPod continues to provide over its competitors. With the Razr, Motorola continually drove its price down to the carriers and, in turn, the carriers kept heavily subsidizing the device to make it more affordable for the masses. The carriers didn’t really care much about maintaining a certain exclusive appeal for the Razr - their primary motivation was to drive customer acquisition. However, pricing plays a key role in driving customer perception of value and exclusivity. As the price came down, it no longer became cool for consumers to own the device and the Razr became just another flip phone on the market. In comparison, Apple has done a great job of sustaining the appeal of its device (from a pricing perspective) by maintaining its price points while continuing to add features to its devices. Of course, Apple has the advantage that it controls the pricing offered through its distribution channels. It will be interesting though to see what happens now that Apple has entered the wireless world where the carriers can dramatically affect device pricing.

The other reason that I believe sustained the iPod phenomena is that the iPod continued to be the only device on the market offering markedly better and easy to use music management and listening software vs its competition. This was the real value proposition to the customer not the hardware innovation and styling that Apple introduced. The Razr, on the other hand, was just an ordinary phone from a software perspective - its only appeal was the slimness of its design. Motorola would have been much better off buying RIM so that it could acquire the DNA that it lacks to deliver real value added applications on its devices. Now instead, Motorola is under siege from Carl Icahn and Ed Zander’s job is on the line.

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Very few companies nail their value proposition in their first try. Apple with the iPod, of course, a great example of product that was very successful in its first iteration. The BlackBerry today is also another successful device with its own iconic following – the so called “Crackberry” addicts. But few people know how even in the early days RIM did a great job of delivering a compelling value proposition despite facing many hurdles from an infrastructure point of view.

The first BlackBerry came out in 1999. The original hardware was a pager style device with a small screen and ran on a very slow Mobitex network. Despite some of these limitations, BlackBerry soon became a hit in the financial community. Hindsight is always 20/20 as they say. But here’s a little bit of history on why RIM became a standout in the wireless e-mail arena whereas many others including Palm (with Palm VII) failed.

Focus on E-mail
RIM focused on a single application with a compelling value proposition – email. They didn’t try to compete with Palm on their terms by building a full fledged PDA style device. They knew that they had a sizable target market of corporate users for whom e-mail access on the go was very important.

Keyboard vs Pen based Input
With the success of the Palm device, an obvious choice would have been to go with a stylus based input. In fact, RIM salespeople had to deal with this objection in the early days. But RIM made the right choice to go with the thumb style keyboard. A stylus is fine for small amounts of data entry but you really need a keyboard to write even a short piece of e-mail. Even the Palm founders eventually abandoned the stylus with the Treo.

Another key hardware innovation that RIM introduced was the trackwheel. It was conveniently located with respect to the keyboard and made navigation through the BlackBerry menu structure very quick and easy.

Push E-mail
Push e-mail was a key RIM innovation (despite the NTP lawsuit) that made the BlackBerry standout from its competitors for a very long time. It was key to its addictive quality since you could engage into an instant messaging style dialog with a colleague thousands of miles away. Push e-mail was also key to hiding the latency of the network and improving the BlackBerry’s battery life. Even though the original Mobitex network was very slow, RIM could deliver e-mail in the background (and that also the first 2K of the message) and then have the device notify the user giving the impression of instantaneous delivery. Also, by using a Push strategy RIM could minimize battery consumption because the device didn’t have to use precious battery checking for e-mail at regular intervals.

Bullet Proof Security
As we all know security is key issue for corporate IT. Without the support of the corporate IT organizations, it would have been very hard for RIM to make any real progress in the enterprise space. Unlike other solutions on the market that utilized simple POP or IMAP interfaces that lacked security, RIM focused on building an enterprise server that provide end-to-end security based on triple DES encryption. Over time, it also introduced many useful administration features that made it fairly easy for corporate IT to control and manage the large number of BlackBerry’s being deployed to throughout their workforce.

All you can eat pricing
While many of the other solutions were based on variable usage based models, RIM made a very smart move by introducing a $40 per month all you can eat model. There were many benefits to this approach. The pricing was simple to understand (you didn’t have to understand MBs), it encouraged high usage and created a very profitable model for RIM that eventually got the wireless carriers interested. The risk for RIM in implementing an all you can eat model was fairly low given that they utilized data bandwidth very efficiently (by downloading only portions of your e-mail or attachments).

Of course, early success is no guarantee of long-term success. Will BlackBerry continue to be leader in the future given all the new competition in the market? Let me know your thoughts.

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Incumbents in a market can be very hard to displace even if you clearly have a superior offering. Market inertia and barriers to change can be too hard a challenge to overcome. Prior to Windows, Microsoft tried very hard for years to displace WordPerfect and Lotus 1-2-3. However, it was only with a platform shift to Windows that Microsoft was able to finally break the monopoly that WordPerfect and Lotus 1-2-3 had established. A platform shift provides a unique opportunity for new entrants to displace incumbents by being the first to take advantage of the unique capabilities offered by a new platform. Often the existing market leaders are too set in their ways and business model and too risk averse to adopt a new platform. In this blog, I will discuss some key examples of how new players were able to establish market leadership positions by taking advantage of these platform shifts.

Lotus 1-2-3 and IBM PC – Here is a great example from the beginning of time. Before Lotus 1-2-3 became a leader in spreadsheets, there were many players in the market including VisiCalc (who had the 1st mover advantage), Microsoft Multiplan and others. However, these spreadsheets all were written for multiple OS platforms like CP/M and DOS since there was no dominant OS at that time. As a result, none of these spreadsheets could really be optimized for any of these platforms. Lotus, however, embarked on a different strategy. With the IBM PC, they saw a great new platform that provided a large amount of memory (at least in those days) and processing power to build a powerful spreadsheet. Instead of taking a multi-platform approach, Lotus built and optimized its spreadsheet program just for the IBM PC platform. Lotus 1-2-3 quickly became the dominant spreadsheet because it provided the best feature set and performance as a result of its singular focus on the IBM PC platform. Visicalc and Multiplan quickly lost market share because they couldn’t re-architect their offerings to provide the performance that Lotus 1-2-3 could deliver

Microsoft Word and Excel – It is interesting that Lotus forgot the very lesson that they had taught the industry. Microsoft had tried for years with MS Word to displace WordPerfect which was loved by its user base. However, Windows 3.0 provided the perfect opportunity for Microsoft to displace the incumbents. First, Lotus and WordPerfect resisted supporting Windows since it wasn’t to their advantage to make Windows successful. Second, they decided to port their DOS application to Windows instead of building from scratch to take advantage of the many advanced capabilities of Windows. Microsoft, not surprisingly, built their apps to take full advantage of the Windows platform. Their goal was not only to build the best Windows applications but also the best word processor and spreadsheet. Soon, thereafter, Microsoft changed the rules again creating the Microsoft Office Platform which initially was just a simple package made up of Word, Excel and Powerpoint. Over time, they delivered real value through a common menuing system and integration between the various applications. The rest is, of course, is history!

BlackBerry and Palm – As we all know, while Palm was not the first PDA on the market, they delivered the first truly usable PDA on the market. PALM enjoyed great success and buzz. They were even the first player add wireless capabilities. However, Palm VII was a dismal failure because the wireless capabilities were simply added on to the existing Palm platform with no real thought given to how to leverage the enormous opportunities that lay ahead in delivering a great wireless experience.

RIM, on the other hand, built BlackBerry completely to take advantage of the emerging wireless platform. They focused first on building a great e-mail experience which was the killer application that compelled the early adopters to become BlackBerry addicts. In fact, while BlackBerry provided PIM applications none of them were as good as Palm’s application. It didn’t matter, however, because BlackBerry delivered the best wireless e-mail experience on the market and that’s what people really cared about. As wireless networks became more advanced and supported greater bandwidth, it became only a matter of time before a disconnected PDA became an historical footnote.

There are many other examples of new players taking advantage of a platform shift to establish a dominant position in the market. The internet – the greatest platform shift in history – itself created many rags to riches stories and vice versa. Monster.com, Expedia, Amazon are all companies that took better advantage of the new internet platform before the incumbents and established a dominant position. Of course, not all markets lend themselves to a platform shift. Pets.com, WebVan and others were all examples of companies where the internet didn’t afford these companies any compelling value proposition to displace the incumbents.

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