Downloaded 22 times
Uploaded byStanford University
Barter NSF Final Presentation
Using economic incentives within social software can optimize participation and knowledge sharing. Barter's technology introduces a digital currency to existing enterprise social platforms to encourage information exchange. Early pilots show productivity gains of 10% from improved collaboration. Barter seeks partners to integrate its currency module and help companies realize benefits like more and better answers from their social networks.
More Related Content
![Dell 20805[1]](https://cdn.slidesharecdn.com/ss_thumbnails/dell-208051-100414083904-phpapp01-thumbnail.jpg?width=640&height=640&fit=bounds)
Similar to Barter NSF Final Presentation
More from Stanford University
Barter NSF Final Presentation
- 1. Using economic stimulus to get results from social software http://youtu.be/3eQkn0PmAGg Marshall Van Alstyne Dawei Shen Bob Lloyd (PI) (EL) (IM)
- 2. Industry overview -a 50-year old problem • Global Knowledge Management Market Revenues to Exceed $157 Billion by 2012. Ecosystem of Enterprise • CAGR of 45.3% from 2002-2010 - Global Social Software Industry Analysis, Inc. • Social CRM market to reach over $1 billion – Gartner Magic Quadrant in revenue by YE12, up from approximately $820 million in 2011. Over 30% growth in 2011.
- 3. Pain Points ofToday’s Social Software • Low adoption rates • Noise: Clamoring for attention promotes information A.D.D. • Social software makes the popular more popular, causing bottlenecks (Booz Allen Hamilton study of IFC) • Little managerial control • Can’t measure ROI
- 4. Recent trends &early attempts Quora Credits SAP Developer Network Stack Overflow Reputation points
- 5. Opportunity: Use established economicpractice to optimize social software Multi-Sided market Price Discovery Economic practices Economics of Monetary polices information
- 7. Barter’s Core TechnologyLayer – 3 key components Market Economic Currency engines policies • Security • Exchange • Monetary policies to • Controlled rate of mechanism for manage currency creation & optimal information products supply entry rules • Address information • Fiscal policies for: • Controlled rate exit & asymmetry • Reward knowledge optimal expiration • Transactions reuse rules facilitation & • Reward voting, clearance tagging, tipping Barter’s IP: three provisional patents have been filed
- 8. DOES IT WORK?YES! • A two year study of loan Kernel Density Estimate of Productivity officers at a Japanese bank Existing Accounts Restructuring Group showed productivity gains .05 .05 averaging 10%. .04 .04 •Users promoted faster. .03 .03 Density Density .02 .02 • Plots show productivity ranges. Low performers .01 .01 emulate high performers. 0 0 20 40 60 80 100 20 40 60 80 • What would you do with 25 days of extra productivity for you and members of "Information Sharing and Productivity: Evidence your team? from a Japanese Bank" NBER Cambridge, MA. July 22, 2011.
- 9.
- 10. Before • Plan to develop all features • Plan to sell to all companies • Unclear value propositions • Blurry line between partners and customers Learning • Good news - • Problems are prominent and painful • Our technology is popularly received • Bad news - • Enterprise software installation is troublesome and time-consuming • Replacement is an art and difficult
- 11. Key pivot •Break out the Barter Market Engine TM • Plug it into existing platforms • Sharepoint • Jive • Yammer • Cisco quad • Social cast • Success factors • IBM lotus connection • Salesforce chatter • Turn competitors into “complementors”!
- 12. Barter’s Product &Services Plugin Full vertical Partnership to existing open platforms • Large-scale integration with user- with existing market entry interfacing modules enterprise social strategy • Early stage software vendors: • Avoid challenges • Long-term viral Cisco, SAP, IBM on duplicate strategy development and sale channels Barter Platform SPI (Web Services) Currency Markets Economic Policies Our core technology layer
- 13. • Software • Big Enterprise • Initial launching development • Automated customers partners who pilot • More, faster, better • Small enterprise with Barter • Key mechanism answers account customers • Cisco design and • Higher social management • Customer • SAP algorithm software • Communities community (+) • Deloitte participation • Co-creation • Government • Humana development • Managers’ ability to agencies • PWC drive performance and co-design • Education • Companies who • Long-term • Open APIs co-develop certain sustainable • Highlighted modules of Barter incentives industries (+): • Artem • Productivity Gain • Lawyers Associates • Accurate measure • Patient • Big players already • Human of expertise & Healthcare in enterprise social information value • Existing MIT sponsors software space Resources • Controls/Visibility of • Direct sale from the • Cisco • IP (mechanism the platform using web service • SAP design economic tools • Freemium • Sharepoint • Idea Genesis • OEM / VAR • Jive algorithms) • Piggyback on • Yammer existing software solutions (+) • Human (Programming, designers, sales team, support staff) • Up-front subscription fee Team 8 • Hardware (Office space, computer • Per-seat charge ($2 / Seat) equipment, web hosting service fee) • Professional services / Consulting • Patent applications • Licensing fee of the API platform
- 14. Who are theusers and External early adopters who are the buyers using public/free version • New Enterprise Users Deployment Direct • Leadership of business units • Fixing existing Sales of • Regular business units systems Software, • Customer service managers consulting • Help desk managers service • Innovation office • CIO / IT Departments Indirect: Consultants, VARs
- 15. We have payingcustomers! 4 corporate clients have committed (with resources) to use Barter 1 education usage 10+ companies are actively discussing on deploying/piloting with Barter 4 partnership opportunities in conversation
- 16.
- 17. BOTTOM UP ESTIMATE RevenueModel • Charge $2/seat/month • Very affordable: Yammer already charges as much without sophisticated economic optimization. Gartner says range $2-5 supported. Interviews agree. • 10,000 seats in one firm ~$250,000 / year • 1 Beta client already. 30+ firms this large among MIT Media Lab sponsors alone. • Only 12 firms in 3 years to reach $3M revenue annually • Very conservative linear growth Cost Model • 4 programmers x $150,000 in year 1, +1 in year 2, +1 in year 3 gives $900k cost • Round up to $1M expenses annually Net Income $3M-1M=$2M • Very conservative PE Ratio of 10 (NASDAQ is 24) gives $20M valuation in 3 years. Conclusion • Investment of $750k covers 4 programmers and 25% contingency for 1 year. • $1.25M pre-money is 3/8 of $2M post-money. Implies 10X return in 3 years.
Editor's Notes
- #3 - We are solving an important and long-lasting problem for enterprises – the creation, dissemination and management of knowledge. Firms spend $157 billion this year for knowledge management platforms this year, which represents a huge market and opportunity.The latest incarnation of such software is enterprise social software, and the magic quadrant on the left displays the industry landscape which includes big firms like IBM, Cisco, SAP, and newer firms such as Jive and Yammer
- #4 Enterprise social networks are notdelivering. (lead story Jan 30, 2012) According to customers, Enterprise 2.0 not Delivering Results. (Altimeter Group)13% satisfaction rates, as to delivering promisesAdoption ratesrarely exceeding 20%The lead reasonfor the failure is user adoption – employees lack the incentive tousethem.Other top reasonsincludeThere is toomuchnoiseVerylittle managerial control whenproblemsoccurVerydifficulttomeasureandjustify return on investment
- #5 There are existing virtual-currency based approaches that have achieved some limited effectiveness
- #6 This creates a very interesting but challenging problem, and an opportunity to usOur research and technology, which is kind of special within the cohort, is to think through the currency and market design rigorously, and apply sophisticated economic theories and practice to the domain of social software design.
- #8 How do we design secure currency so that we optimize the creation and exit of currency?How do we design market engines that take care of the peculiar properties of knowledge, and address information aymmetryHow do we design monetary policies to stimulate knowledge activities, and design fiscal policies so that managers can run campaigns to modify user behaviorI have a lengthy PHD thesis behind it with equations and algorithms
- #10 How do we commercialize our research? This is the first version of our business canvas.
- #11 In retrospect, we were living in a wonderlandWe develop the best software in the world with all possible features and all possible knowledge markets, and sell it to all companies we can in the world and replace all existing software.Through the i-corps program, we have spoken to 100+ companies, and validated our business ambition.We have very encouraging feedbacks. We never have trouble selling the problem and our research. As a media lab student, I have the opportunity to present Barter to senior leaders of tens of companies. Whenever I start the conversation by saying enterprise social software are not performing, they keep nodding their heads. They are in need of a solution, and they all like our research and solution. The bad news Software installation – security check, color schemeReplacement is an art, and it’s not just about offering a better product, we frequently hear words like if you have a sharepoint integration, we deploy it immediately
- #12 So, we pivot!Rather than developing a complete full-vertical software stack, we break out our Barter Market Engine, rather than replacing existing software and competing with them head to head, we get into them and make them better.We turn our competitors into complementors, so that we can leverage their software development capacity, and existing sales channels.
- #13 No “Virality” wordThis will be the product strategy of Barter after the pivotBarter Market Engine becomes a thin service layer that’s pluggable to other softwareOur immediate market entry strategy, is to develop plugins and addons for software that has open APIsWe have very active senior-level partnership discussions with Cisco Quad, IBM Connection, SAP successfactors, though the result is still uncertainOnce we have the market engine layer ready, we can build our own front-end, and pursue a open viral growth model for other application scenarios
- #15 CIO and IT are different