I’m sure that by now you have seen or heard about The Nation‘s “e paper” initiative. Well, in case you haven’t, it is a new-ish project by the Daily Nation where they sell access to their paper for as low as $2.5 a week (about 220 why did they not quote in Kshs??).

Think about that – Kshs 220 a week. Right now we pay Kshs 40 a day so this fee of 220 for the epaper is about the same. Why would the Nation do this when they already essentially publish eveything in their paper at nation.co.ke? In my opinion, this is an experiment to try and see whether they can actually make reasonable sales of their content online. To understand why this is important, let’s step back in time to something Marc Andreessen, the founder of Netscape, said a while ago:

If you were running the New York Times, what would you do?
“Shut off the print edition right now. You’ve got to play offense. You’ve got to do what Intel did in ’85 when it was getting killed by the Japanese in memory chips, which was its dominant business. And it famously killed the business—shut it off and focused on its much smaller business, microprocessors, because that was going to be the market of the future. And the minute Intel got out of playing defense and into playing offense, its future was secure. The newspaper companies have to do exactly the same thing.

The financial markets have discounted forward to the terminal conclusion for newspapers, which is basically bankruptcy. So at this point, if you’re one of these major newspapers and you shut off the printing press, your stock price would probably go up, despite the fact that you would lose 90 percent of your revenue. Then you play offense. And guess what? You’re an internet company.” – Marc Andreessen

As Marc Andreessen points out, newspapers are in trouble. The problem is not merely that they’ve been slow to adapt to the web. It’s more serious than that: their problems are due to deep structural flaws that are exposed now that they have competitors. When the only sources of news were the wire services and a few big papers, it was enough to keep writing stories about how the president met with someone and they each said conventional things written in advance by their staffs. Readers were never that interested, but they were willing to consider this news when there were no alternatives. (Source: Y Combinator)

I must say that the newspaper business in Kenya is not as threatened as it is elsewhere but the Nation seem to be preparing for the inevitable in advance. This is always good to see, right?

Will the e paper be a success? That remains to be seen. Good luck to the Nation!

A while back, we had written that Zuqka was in terrible trouble. Zuqka is a portal site for weekend entertainment around Nairobi, but with a social networking component as well as video, audio and blogs. Sadly, even though it was backed by the powerful Daily Nation, Zuqka had been infested by spammers who had turned it into a lonely spam farm.

The good news – depending on how you look at it – is that Zuqka was shut down recently. Here’s the message you get when you visit www.zuqka.com:

Hi everyone,
We are looking forward to the new zuqka.com coming soon. But this does not mean the good times are over. Our e-mag is still available here: E-Mag and it will be available while we prepare the new zuqka.com for you.
Hope we keep seeing you here.
Zuqka Team

Normally, when one wants to upgrade a web service, they prepare the ‘new version’ and then switch over to it over a night or a weekend; or sometimes they run both old and new as users switch to the new. When the old version is shut down completely and users are made to wait for the new, then you know something went horribly wrong. In this case, the ‘old zuqka’ simply died a horrible spam death. That’s why it had to be shut down and taken offline completely.

Spammers 1 Zuqka 0

Let’s hope Zuqka comes back stronger than before.

I’m sure many people have heard about Groupon by now. If you haven’t, Groupon reportedly holds the record for the fastest growing company by revenue in history. It is a service that promises business massive exposure and many new customers if they use Groupon to offer ‘deals’.

Groupon is so successful that it has been copied tens of times all over the world. Even here in our Kenya, we have Rupu, Zetu and Sokopal.

Recentlyu, Groupon filed for an IPO (Initial Public Offering) in the US stock markets. This meant that, for the first time, anyone would be able to take a look at Groupon’s books. What people found was shocking. Basically, despite its very high sales revenues, Groupon is losing a whole lot of money and is nearly insolvent. But guess what? They continue to pay their initial investors hundreds of millions of dollars despite making losses.

This sounds vaguely familiar, doesn’t it? Just for reference: A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. The Ponzi scheme usually entices new investors by offering returns other investments cannot guarantee, in the form of short-term returns that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme advertises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

That aside, Groupon is also reportedly not doing very well in its oldest markets, like Boston.

No one can tell what will happen to Groupon, but it seems the once bright star may be fading. At the very least, the business seems a bit ‘troubled’.

What about the Groupon look-alikes in Kenya? How are they faring? I cannot say with any amount of certainty how these businesses are doing. However, I feel that the amount of talk about these companies has gone down, and so has their visibility in the market. But this tells us nothing about their performance. Another sign may be that MyShillings and Sokopal seem to be ailing. Regardless, until we get our hands on solid financial records, we cannot say how these companies are doing. But if Groupon is in trouble, will our local copies come to face it too? Is the business model fundamentally flawed? No one knows.

Thinking Bigger
Let’s leave the doom and gloom for a minute and talk about something exciting: 123Cars. This is a website that enables people to buy cars cheaply. Here’s how it works, if you go alone to buy a car from a seller, you may get a price X but if you come with 10 of your friends and you all want to buy the same car, the seller is likely to give you significant discounts. 123Cars enables people to save thousands of dollars when purchasing a car.

If you think about it, this is a variation of the Groupon model. But I think it is better. Groupon focuses on forcing a business to give massive discounts (usually 75%) to give them hundreds of customers at one go. There a few problems with this model:

1. The discounts are too high for the business to afford
2. The business may get so many customers that it cannot serve them with their usual standards of quality
3. The kind of clients attracted by these deals are often ‘deal hunting’ and do not become loyal customers

In contrast, 123cars:

1. targets a niche industry where bulk discounts really do work
2. brings highly targeted customers – the customers are all interested in cars whereas the people buying Groupons are diverse and just in it for the discount

I feel that the 123cars variant of the Group Buying model offers more value to businesses.

Instead of simply coping Groupon (or even 123cars!), local entrepreneurs should think about what would make more sense in our market.

Have you ever been in a situation where you need to verify whether your ISP is really charging you fairly?

What is Masaa?
Masaa is a tool that tracks your internet usage, whether on per Minute or per MB billing and keeps a history of the data for future reference. Also provide are optional reminders based on cost or time preferences. Masaa is designed for non-technical users and is not appropriate for those who run a home network for file sharing, or as a print server.

Why do I need to track my data usage?
Data Modems are the most popular way of accessing the internet, unfortunately data providers such as Safaricom , Airtel or Orange Kenya do not provide regular usage data to their clients making it difficult to verify whether you are billed correctly. Also given the different billing packages such as per Minute billing offered by the providers Masaa will come in handy.

You can download Masaa by clicking here.