how to monetize technology

if you're looking for an answer to the question I just posed, stop reading now. by the time I finish off, I'm likely to leave you with this and a few more questions, rather than answer any.

as is the norm these days, I use the word technology to mean something really narrow.

technology == (computer software + microchips containing X-illions of transistors) and systems built with them

with this, I've thrown away fullerene, human genome, silicone, buildings, denim, coffee and pizza from the purview of technology. I'm sure most of you have no problem with this at all. so lets move on.

so why am I even asking this question and why are you still interested? a couple of weeks ago, my wife and I were discussing about running a dance school and the question "how do I monetize a school which imparts dance lessons to children" didn't occur to us. the answer is so obvious. parents who send their children to school will pay for the lessons. they'll happily do so because the school offers something that has a direct impact on things we do in our real life. so do coffee, pizza and denim.

this isn't necessarily true for the technology.

in past couple of decades, we've successfully used technology as an enabler for the goods and services we consume. for example, my wife will surely use computer software for managing the students records, billing and accounting in her dance school. she'll be happy to pay for this technology though the money will ultimately come from the parents who pay for the dance lessons. The IT services industry, busy counting their billions, will testify for this phenomenon.

we've also embedded the technology in a lot of things we use in real life. like the car, the lift, the microwave oven. here too, the role the technology plays is that of an enabler or an enhancer.

How about a technology that is directly useful?

let me make a list of mundane things I do on an average work day and see what are my direct technology touch points.

• wake up
• turn on the geyser
• brush, shower, etc
• dress up for work
• have breakfast
• read newspaper
• open my laptop and check emails
• say "bye" to my daughter and leave home
• walk upto the bus stop
• wait for the bus
• board the bus, buy ticket, get seated
• get down from bus near my office
• walk to the security checkpoint
• swipe my badge and enter office
• since I work as a software engineer, I have several technology touch points during my work hours. in any case, IT's role as a business enabler is failry well understood now. so I'll skip the work hours.
• board the office cab on the way back home
• walk upto my apartment
• ring the door bell
• spend the evening with the family: play games with daugheter, discuss things with wife, watch TV, call people up using a phone, have tea, etc
• open the laptop, check emails, social networking, web search, surf, etc.
• dinner
• sleep

it's apparent that there's almost no direct touch point of technology in my life at all, with the few exceptions like emails, social networking, web search and surfing. these are the habits I've acquired in the last decade. I believe this is true for a large population of the planet, who live on the greener side of the technology divide. of course, there's another side of the divide, where the majority of humanity lives without even knowing what an email or the internet is.

so how does the technology penetrate real life? I can think of two fundamentally distinct ways. either the technology becomes useful in one of the things we already do, like having breakfast. or it helps us grow new habits which are impossible without the technology. emails and social networking are examples of the acquired habit model. however, acquiring a new habit isn't easy, in general, and it usually works if it is free. I remembered a story (couldn't validate it from any authentic source though) of the way the East India Company introduced tea in Calcutta. They offered tea free of cost, so that people get used to the habit. More than a century later though, everyone pays for her cup of tea in Calcutta.

in either ways, we need creative ideas of how the technology can be directly useful in the real life of a consumer. and some more creativity around the when, where and how of the way we access technology. opening a laptop and tapping the keyboard is part of the invisible wall that separates the real world and the technology. I would speculate that at some point the software technology has to blend with other old-school technologies we excluded at the start of this blog, like material science, mechanical engineering, construction, to break this invisible barrier and make technology access seem more natural. I am talking about products where the boundaries between the mechanical, electrical and software components are not yet drawn clearly (imagine a plate which tells how much calories and nutrients you're about to consume) and use-cases like being able to check the recipe of an authentic Hungarian Goulash while cooking it in the kitchen (no running to the study, open the laptop, then the browser, type URL of the search engine, type  goulash and hit enter, click on a result which seems relevant).

to catch a glimpse of how the next evolution of technology may look like, check out Pranav Mistry's experiments with the Sixth Sense technology or read about the Semantic Web vision of Tim Berners-Lee, James Hendler and Ora Lassila.


lastly, as a consolation, here's a nice article which talks about 5 business models for the contemporary internet: http://mashable.com/2009/07/14/social-media-business-models/

so long!