While some lucky bastards people have been getting their iPhone 4 early thanks to a FedEx slip-up, the rest of the United States will be getting their new iPhones tomorrow (myself included). But what is most interesting about this new iPhone launch is that is going to finally popularize a high quality camera in consumer devices. Yes, other phones have had high-end camera components.. and yes, Flip HD cams have been an affordable option for many to start producing 720p video clips for YouTube. However, one of the single best selling hand held cameras continues to be the Apple iPhone.

So, you understand why I mentioned Steve Jobs in the title (CEO & Co-Founder of Apple); but what the hell does Gary Vaynerchuk have to do with a hardware release? Gary’s first book “Crush It!”, a #2 NYT best-seller, talks about the paradigm shift we are seeing in our culture thanks to technology. The new and vastly affordable technology that allows us to connect is also changing the way we consume. Where do you watch your news clips now? Likely online if you are reading this blog, and having a quality 720p camera in your pocket and on a device that can directly upload to YouTube is MASSIVE for the Internet as a platform. As Steve Jobs said when the Apple TV was introduced in 2007 (along the same timeline as the original iPhone) was that YouTube is great, but the consumer source devices were the biggest hold up in the platform for a great user experience.

Paradigm Shifts

As with nearly everything technology based, it feels like the rate of innovation is accelerating at a break neck speed. This has never been more true however than it is currently in the smart phone innovation cycle. We are getting faster chips, better screens and vastly better cameras. Google is outpacing everyone in the past 5-7 months though, ever since the introduction of Android 2.0 with the Motorla Droid. This new combination of feature rich, and capable handsets has helped throw fuel on the competitive fire and pushed every partner in the value chain produce better products at lower price. This is a huge win for consumers and software platform developers, nothing proves this more than the over 220,000 Apps for the iPhone App store at the time of this writing.

The consumer is now a creator, the developer is now an artist and every industry that has been stagnant for centuries (read: news, media etc) is being turned upside down. The people in control of those industries hate it because they are afraid of change, afraid of new models, and afraid of letting consumers have the collective power they have always been on the brink of realizing. However, if these organizations do not realize that ‘resistance is futile’ i.e. RIAA & MPAA, and that consumers are ultimately in control but that we are a) willing to pay for great content & great services; as well as b) if these content & service providers don’t give the market what they want, the market simply navigates around the obstacles to consume how they want.

If these content and service organizations realized that on the flip-side of locking down their content and sticking to their old business models; that in fact going for affordable, mass consumption not only relates to higher revenues, more profit and better business than they might actually wake up to the shift that is already in full swing.

How do you see these new devices changing the way you create, consume or manipulate content? I for one, am very excited at the potential of these devices and can’t wait to get my paws on the new iPhone bright and early tomorrow!

So what is the value is paying someone else to help you gain control of your brand across the social web? The immediate result is that none of your competitors or impostors can operate under your brand name. Imagine if a service like this has snagged the Twitter handle of “jt” or a similarly short and “premium” handle before the service became incredibly popular?

Kallenerg notes their connection to Vaynermedia which is a sweat equity partner in the sense that Gary and AJ Vaynerchuk, as well as their entire team have teamed up with Kallenberg for equity in exchange for pure effort to help build his business. This relationship has appeared to work out well for him so far as it is a match to his DNA. When asked what drives him, Kallenberg responded with “At first I did consulting out of necessity and quickly realized that being creative and working with great people is what I wanted to do”. His drive to also create a greater impact for people and society is admirable and fits in nicely with the increasing trend of young, tech oriented entrepreneurs using innovation for the greater social good.

From a competitive standpoint, Kallenberg notes that due to their high quality control, but still outsourced business model they are able to beat their competition by roughly 45% and still deliver the same top notch service for his customers. Being from the Pacific Northwest originally, this unique model found him some media coverage in the NW Business Monthly and other localized publications.

So as another entrepreneur, what can you take away from Aaron and his success in growing Claim.io to supporting over 300  social sites across the web? A big takeaway should be should be a common occurrence at this point is that firms who invest in people as both their customers and their management team do well in the long run. Claim.io in particular is an interesting business because not only do they believe in caring about people, but the service in fact promotes the personal connection that so many brands could benefit from, and by extension help other businesses care about their customers in a similar way.

Check out Claim.io and see if it is the right fit for your business.

Do you have a Twitter, Facebook or LinkedIn account? The answer is likely yes as these social platforms are dominating the internet and collecting users faster than my glass table collects dust. However, have you thought about the different ways people are monetizing this “stream” of information? There is a pretty divided debate going on across the internet right now about whether or not Twitter, Facebook etc. should allow their users to interject advertisements into their streams because they are afraid it will damage the overall experience that users have with the services. What the pundits don’t realize about these ads is that all other forms of content publication have been generating revenues for their efforts on blogs, newspapers etc. for decades and there is no reason that someone with a large following should not be allowed to create money from this new age audience as well.

In fact some streams are actually made more interesting with the addition of an advertisement as pointed out by 1938media’s Loren Feldman (a largely anti-social media member). These ads may actually enhance the stream because they offer direct value to the audience (a product, service, event etc.) as opposed to simply being the daily ins and outs of a celebrity. As a follower you may actually be more interested in a marketing platform than if your favorite online marketer has gotten his 3rd cup of coffee today.

The current media and social platform love child for monetization is Ad.ly which has paired “top publishers” with “top brands” for extremely successful payouts, and huge returns for the advertisers. These sponsored streams have garnished a high number of click throughs and a high level of follower trust regardless of their transparent and clearly marked “#ad” or “#spon” denomination. Some of the highest profile users include Internet celebrity “Shoemoney” or Jeremy Schoemaker who has been preaching the benefits of in-stream advertising since day one, including an endorsement for SponsoredTweets.com (an Izea company) even with their low payouts. In fact he has even mentioned that he would be entering the segment had he not signed a non-compete following the sale of his largely successful AuctionAds platform.

What are they doing right?

Ad.ly got it right immediately upon launch, they realized that in order to be successful they needed a volume of publishers (who were willing) and a high payout to keep these publishers motivated to push through the advertisers message. By going with higher profile publishers and advertisers they were able to get a large sample size, prove the model and take only a small cut in the process. This small cut has led to increased payouts to publishers who then wrote up rave reviews and even bragged about how they were absolutely killing it on Twitter by “Making 15k from 6 tweets in a month” etc. If Ad.ly can keep up this momentum (which is likely with their current 12% referral program) they should be able to confidently corner the market and either reap the benefits off of the advertising revenues or sell to a giant such as Google much like Ad Mob did just last month for $750 Million.

What can they do better?

They are extremely sensitive to the fact that in order to become the defacto standard, they must also cater to the smaller scale publishers. Much like AdSense was able to do for small scale publishers in the traditional web content Ad.ly hopes to bring revenues into the long tail by using self service advertisements that allow any advertiser (most potentially affiliate marketers) and infuse their advertisements into a variety of publishers (or publishers based on keywords). These additional dollars will not only allow the small publishers a piece of the action but will allow for relationship control that is not managed by Ad.ly itself.

Arguably these self service platform could diminish the gigantic returns that advertisers and publishers have been seeing through the service, however it should bring enough new faces and dollars into the system that everyone should come out on top. If you are interested in checking out the Ad.ly program we have included a link below, as well as to SponsoredTweets.

For full disclosure, both links below are affiliate links; therefore any sign ups will benefit this blog.

Ad.ly – InStream Advertising

SponsoredTweets – Izea

So what gives? How is Costco able to sustain growth and keep users interested? The exclusivity illusion.

Membership

Want to walk in and get the same prices everyone else is getting? Not so fast.. pony up the cash for your membership I.D. and then you can get those bulk deals. Haven’t been in a while? D’oh! I bet you feel guilty paying for that membership and not shopping there, and stats show that you are much more likely to become a regular of an establishment if there is a minimal monetary connection involved regardless if it is the most cost efficient option.

What about the community aspect of a membership? Sure there is not a network per say that users directly interact with that makes them part of Costco, but rather the connected feeling that users have when all of their friends are using the same services, shops and outlets. This is where friend recommendations drive further memberships, larger collective ecosystem and additional revenue for the business (e.g. Costco).

Levels of Access

This is where Costco really has the upper hand on their other big box foes. Guess who get’s to enter an hour earlier than the average Joe 6-pack membership? Yeah, the “Executive Membership” which not only costs more but has stipulations for qualifications. This is where the illusion of exclusivity, rarity and value all come into play, if you want to have access to the goods earlier you will need to step up as a consumer to a whole new level.

V.R.I.O. Customers (Instead of Framework)

The essence of what Costco has done for it’s membership program to drive sales is really the application of V.R.I.O. on the customer base instead of just as a business model as key resource. For those who are not familiar with what this means, it stands for Value, Rarity, Imitability & Organization. So how does restricted access through memberships use these traits to create the illusion of exclusivity?

Value

Costco offers the obvious value of bulk pricing, and their leverage with suppliers to arrange a good deal for the end consumer. This is the most easily imitated trait of Costco and is seen across multiple consumer channels, however it still offers a great deal of consumer value (positive brand correlation).

Rarity

The restricted levels of access through tiered memberships create a feeling of need to get a product before somebody else does. It creates that illusion that the product in stock is in high demand, that the deals wont last forever and only the “Elite” are able to get a hold of these products before anybody else.

Imitability

While the price efficiencies of Costco can be copied across multiple channels (e.g. Wal-Mart), the positive membership association with the brand, the products and the exclusivity create a strong dedicated community that will support Costco through a smoother revenue curve.

Organization

This is where the efficiencies of the community really come into play with the Costco business model. The fact that customers are not only willing to buy items in large quantities (much higher revenue per customer, let’s be honest; How often do you leave Costco under $100?), but they are also willing to pay a subscription for the privilege of doing so! To top it all off, that paid subscription is tiered to allow customer to buy up the chain as opposed to only bargain hunting. This type of consumer behavior where customers buy upstream in a product line is only imitated (recently) in the Apple product lineup where by offering lower cost goods your average selling price actually increases.

Take Away

So as a start-up business, you need to figure out how you can incorporate such a unique dynamic into your business model that not only draws the highest paying customers, but brings in customers who want to be a part of your audience, who want to build your community and positively correlate themselves with your brand. And if at the end of the day you can even convince your customers that paying for a membership is beneficial to them (levels of access) then you have succeeded as building a sustainable entry for hopeful long term growth.

The goal is simple, make the “cost” of the user switching higher every year (regardless of if it is a free service or not) and try to add value in the process. The value usually comes in the terms of additional services (like GMail, YouTube, Picasa). These services not only offer a value to the customer, but the strategy is to get them using a unified login for each service which solidifies their core use and in Google’s case the driver of their business; Search Queries. This value can be quantified as the perceived value by the user, with a funnel of all the additional services leading into the core product.

In the case of Google’s closest competitor, Microsoft the core business is their Operating System and Office Suite which drive the bulk of their revenues. Therefore their products that compete with Google can be seen as ancillary arms to their core sets of software. Illustrated below however is what Google is betting on for customer loyalty and perceived cost of switching to other cloud platforms. Google also hopes to extend this cost of user switching into the handset market and Netbooks with both their Android and Chrome OS, both of which will serve as terminals for their cloud computing offerings.

Facebook is able to offer additional value and raise the end user cost by implementing an ecosystem culture with their applications, and becoming more pervasive with tools such as Facebook Connect that allow users to only have one login across several websites. This single login allows for comments, use of services (like Chegg) and if the user so desires push the activity back into their newsfeed as a flare to their friends without having to directly tell them about it. This all plays into the “social graph” which is Mark Zuckerbergs description of our seemingly real connections and information sharing with other people online through our Facebook accounts. These snowball of information sharing and ease of access is what is keeping users plugged in, driving pageviews and referring more people to sign up for the service. Many users have simply migrating their photo sharing etc. to the platform and all those requesting to see that type of personal content are often times told by their friends and family to migrate to Facebook because “it’s just easier”.

So back to the primary question, why choose a for profit business model when your ultimate goal is create impact for well known charities and causes? Can a business actually thrive under these circumstances? I believe that the answer yes it can thrive, however there is some work to be done in the area of consumer interpretation for your business model. If the business is able to convey that they profit based on performance and percentages, thus only when the causes earn more money does the firm earn more money. This model of performance puts the core functionality of the business first in line, and in this case that core functionality and desire is to create profits and impact for the charities/causes in order to develop a small profit for the firm itself.

Another item to note with a for profit business is that when it’s primary goal is to drive additional revenues so that it can execute on generating funds for causes it is allowed to build up a cash reserve to strategically grow the business and help float the firm through down times when it would otherwise have to let employees go. This built up cash reserve would not be possible with a non-profit leaving it more vulnerable to volatile markets as well diminishing the promotional leverage that the entity would have when opportunities present themselves. With a for profit business model, the firm is able to truly maximize it’s returns when specialized opportunities arise and holistically drive more dollars and value long run into a cause than a simple non-profit would be able to on its own.

My belief that for profit businesses can drive the next wave of socially responsible consumerism, and allow for value without inflated cost is why we chose not to be a non-profit with MyBigGive. We still feel that we have a streamlined process that will allow for a huge portion (70% of all commissions) to be drive back to causes that the users/community vote on and create a profit. We want to strategically make the biggest impact possible, and we don’t see any other way to accomplish such an ambitious task without building ourselves in this fashion.

If you have any feedback or questions please leave them in the comments section, or reply on our facebook fan page and/or a public reply with our twitter feed. All links will be provided below on ways you can interact, engage and enable social change.

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