Nowadays, I'm surprised when I look for a product online and can't find one. I figure that if there's a service I need, someone has already created the service. It may not be free, but it's almost always out there and available in some form. I'm even more surprised when I find other people online in high-traffic places (like Yahoo! Answers) looking for the same service and it's still not around months after people have been asking about it.
In this case, the service that I and others are looking for is a generic bill payment service. I pay my electric bills, phone bills, etc. with my credit card, partly for convenience and partly for the points/rewards/cashback. However, mortgage companies don't take such payments (I've heard of a couple that do but they're very few and far between. I'm not sure why they don't take them, but I imagine it has something to do with fear of chargebacks? Not sure. You can buy a car with a credit card and that's a much bigger chargeback than $1-2k.
So what's needed here, and what I've been looking for for about 5 years, is a proxy between my credit card and the mortgage companies. Currently, there's a couple ways to do this, but the transaction fees don't make it attractive.
1. Cash Advance: The first way is to do a cash advance on the credit card. Deposit it in your account and then pay your mortgage out of that account. Even with promotional rates, the charge is usually about 3% of the amount of the transaction, often with a $90 ceiling. That's too high to make it worth the points though and you usually don't even get points for this sort of transaction.
2. Paypal: There was a time where I could actually send myself cash in Paypal and they didn't take a fee. I think you could send up to $100 without any fee or something like that...but now, they charge you about 3% for everything and creating two duplicate accounts is a pain.
I've looked for other Paypal-esque services but very few even exist anymore. Most of the smaller ones that are around only offer ACH (checking) drafts...but we want to be able to grab money from the credit card.
There's a number of ways that a company that offered such a proxy could make their money back from the transaction fees. I personally would pay about $5/month for such a service. I would want to be able to add funds from anywhere (checking accounts, credit cards, paypal). I would also want to be able to pay all my bills in one spot. The average user may not even use their credit card in such a service that would generate large transaction fees. The company would be doing bulk transactions so the charges to them would be about 30 cents plus 1.9% for each transaction that they would need to recoup just to break even. I'd be fine paying $5 per month and looking at some ads (if they weren't too obnoxious). The company could also require a minimum balance of a couple hundred dollars (which they would use to make interest collectively to defray costs...ideally this would go with the monthly fee, like most banks work, where I could have a larger monthly minimum balance and not have a monthly fee). I'm sure a number of people would leave their accounts relatively idle as well.
The numbers could definitely work. And the demand for such a service is clear. So someone build it already...
Wednesday, March 21, 2007
Tuesday, December 26, 2006
The trifecta that will win in 2007
There's some websites that have already figured this out, but they're few and far between. There's a surefire way to win on the web and that's what this blog is about. The triple-threat that will present itself as the winning solution in 2007 is as follows:
These are serial elements to success and follow a natural order. Let's examine these items in depth:
1. Provide a framework/API
Many people have figured out this one already. If you want to be the next best thing on the web, you need to embrace open-source development and allow the world to help you create applications, widgets, etc. By offering a framework or API to the hobbyist programmer to become a free developer, creating applications you would never have thought of, you're getting an infinite return on your investment. Perfect examples of this are Google Maps and Flickr. People have been creating a dizzying array of nifty applications with those two APIs. I include frameworks in this post to include things like Microsoft's .NET and the more recent XNA Game Studio which allows people to develop Xbox 360 games.
2. Become the de facto portal for the things created in in this framework/API
Offering APIs and frameworks to developers is great. It gets your brand out there when people are touting the products that they built on your framework. However, brand recognition is not usually as good as profits. That's why the next immediate step needs to be the creation of a portal or destination where people go on a regular basis to see the cool new apps and widgets created on your framework. This is an area where Flickr fails. They highlight some of the apps produced by the community, but they are in no way an exhaustive listing. A better implementation of this is Firefox's library of plugins. They got this step right. When I need something added on to Firefox (or better yet, when I'm just curious to see what other people are developing), I immediately go to getfirefox.com and browse through their library of plugins. There's no other site that even comes into my mind.
Naturally, if you can get people coming back to your site to grab the latest app developed by your community, you can then monetize that traffic via advertising or premium services (the two ways nearly every major web site makes the bulk of its money). You also further solidify your brand recognition as you iconify not only the provider of the framework, but also the developer community. You can easily keep an eye on the best widget builders and make them prime targets for recruiting.
3. Create a marketplace for the authors of the things created with this framework/API
This is by far, the most difficult but most rewarding and profitable of the steps. Step 3 is an extension of step 2. Having an API is great for your company, monetizing it is better. Similarly, your developers love your framework, but would love even more to monetize the products they build with it.
Anytime you can create a marketplace, you win. I can't stress that enough. Anytime you build a marketplace, you can implement some fee or middle-man scenario where you can take a cut of every transaction. Ebay, of course, is the biggest winner of this game. They have one of the largest marketplaces in the world. They enable people to sell their goods and create full-time jobs working off their community of buying and selling. Second Life is another great example. Give the developers in your framework a place to show off their products, then give them a way to monetize their products. They'll thank you for it and you'll have a new revenue stream.
Sure the big ideas are taken, but there's a millions of small ideas that are begging to be tackled. Software (that could benefit from a framework) needs to be written in a bunch of areas including but not limited to:
* Fantasy Sports Leagues
* Group Collaboration (this is broad and there's some forays into it)
* Media libraries, playback (audio and video)
* Website design (actual graphic and HTML templates)
* Cooking/recipes (Recipezaar.com is one of the smartest sites around, but they don't have any method of reward for people posting recipes)
I'd love some comments on this post about additional underdeveloped areas where this strategy might fit.
Keep in mind that there are some providers of these things already, and some of these providers even have frameworks or APIs available, but I doubt any of them have created a framework, portal and marketplace to really spur development in these areas.
- Provide a framework/API
- Become the de factor portal for the things created in this framework/API
- Create a marketplace for the authors of the things created with this framework/API
These are serial elements to success and follow a natural order. Let's examine these items in depth:
1. Provide a framework/API
Many people have figured out this one already. If you want to be the next best thing on the web, you need to embrace open-source development and allow the world to help you create applications, widgets, etc. By offering a framework or API to the hobbyist programmer to become a free developer, creating applications you would never have thought of, you're getting an infinite return on your investment. Perfect examples of this are Google Maps and Flickr. People have been creating a dizzying array of nifty applications with those two APIs. I include frameworks in this post to include things like Microsoft's .NET and the more recent XNA Game Studio which allows people to develop Xbox 360 games.
2. Become the de facto portal for the things created in in this framework/API
Offering APIs and frameworks to developers is great. It gets your brand out there when people are touting the products that they built on your framework. However, brand recognition is not usually as good as profits. That's why the next immediate step needs to be the creation of a portal or destination where people go on a regular basis to see the cool new apps and widgets created on your framework. This is an area where Flickr fails. They highlight some of the apps produced by the community, but they are in no way an exhaustive listing. A better implementation of this is Firefox's library of plugins. They got this step right. When I need something added on to Firefox (or better yet, when I'm just curious to see what other people are developing), I immediately go to getfirefox.com and browse through their library of plugins. There's no other site that even comes into my mind.
Naturally, if you can get people coming back to your site to grab the latest app developed by your community, you can then monetize that traffic via advertising or premium services (the two ways nearly every major web site makes the bulk of its money). You also further solidify your brand recognition as you iconify not only the provider of the framework, but also the developer community. You can easily keep an eye on the best widget builders and make them prime targets for recruiting.
3. Create a marketplace for the authors of the things created with this framework/API
This is by far, the most difficult but most rewarding and profitable of the steps. Step 3 is an extension of step 2. Having an API is great for your company, monetizing it is better. Similarly, your developers love your framework, but would love even more to monetize the products they build with it.
Anytime you can create a marketplace, you win. I can't stress that enough. Anytime you build a marketplace, you can implement some fee or middle-man scenario where you can take a cut of every transaction. Ebay, of course, is the biggest winner of this game. They have one of the largest marketplaces in the world. They enable people to sell their goods and create full-time jobs working off their community of buying and selling. Second Life is another great example. Give the developers in your framework a place to show off their products, then give them a way to monetize their products. They'll thank you for it and you'll have a new revenue stream.
Sure the big ideas are taken, but there's a millions of small ideas that are begging to be tackled. Software (that could benefit from a framework) needs to be written in a bunch of areas including but not limited to:
* Fantasy Sports Leagues
* Group Collaboration (this is broad and there's some forays into it)
* Media libraries, playback (audio and video)
* Website design (actual graphic and HTML templates)
* Cooking/recipes (Recipezaar.com is one of the smartest sites around, but they don't have any method of reward for people posting recipes)
I'd love some comments on this post about additional underdeveloped areas where this strategy might fit.
Keep in mind that there are some providers of these things already, and some of these providers even have frameworks or APIs available, but I doubt any of them have created a framework, portal and marketplace to really spur development in these areas.
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