Countless number of traits bring success to people. Among those, my vote goes to the ability of learning. In today's world where everything is changing and evolving in a faster pace than ever before, a person's capability to learn, unlearn, and relearn is the most fundamental driver of personal competitive advantage.

How I cope with the "learning" challenge? Here is the list:

1. Teach someone: This is by far the most amazing learning tool I have. If I teach someone, I learn it best.
2. Talk to someone: The new learning in a discussion is so deeply curated (and therefore targeted to the point) and has a huge bandwidth that no other non-human sources can provide.
3. Google Reader: After many years of existence, RSS is still my best tool for learning. Google is my best RSS reader.
4. Kindle: Books were always there but with Kindle, the pace of learning doubled for me. What brought Kindle into the list? Ability to get the content instantly, portability, bookmarking and dictionary.
5. Del.icio.us: The social bookmarking service keeps thousands of my bookmarks accumulated over 6 years. It is my repository for relearning and unlearning.

What is on your list?

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It pisses me badly when I see travel websites promoting their "price match" feature as a benefit to their customers. It is amazing how, in fact, price match policies take advantage of travelers, help keep prices higher, and create tacit collusion opportunities among industry players.

Put yourself in the shoes of a travel website owner now. If your real objective is to provide the lowest prices in the market, you just try to do it. Then, 100% of your customers get that same lowest price. Also, your competitors will need to follow suit if they want to allure their own customers by claiming "lowest prices" for themselves. So, it seems like this competition for lowest price provides an efficient market for customers to find even better deals. But, what happens when you instead provide the price match promise. Well, as a travel website owner, you don't worry about lowering your prices at all. You declare a high price in your website along with this price match commitment. Then, eventually, only a fraction of your customers will continue to research the prices in other travel websites and get back to you to use the price match feature. So, instead of having 100% of your customers getting the lowest available price, you trick your customers to do a lot of extra research (visiting competing travel websites one by one and getting the prices for the very same booking) and to report back to you. Amazing model for the travel website owner.

From customer perspective though, this is tricky. Usually, competitive intelligence is something the travel website owner has to do to keep their prices competitive. But, with the price match policy, the travel websites transfer their competitive intelligence burden to the customers. Also, if every travel website provides price match guarantee in the industry, then you know that prices are being kept inefficiently high. If travel agents are not willing to provide a really low rate but only the price match guarantee, then no one will drive the prices down.

I am really surprised how travel websites are flying under the radar of anti-trust scrutiny with these doubtful practices.

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How do these two seemingly unrelated themes come together? Through Conde Nast Traveler's "Where Are You" content.

I am a long-time subscriber of Conde Nast Traveler, one of the two (along with Travel+Leisure) top-class travel magazines. In every issue, Traveler publishes a nice photo and asks for the readers to guess where the photo is taken. Up to now, I was able to guess that right only a handful of occasions. With TinEye, almost one of my favorite web destinations, the contest is losing its challenge.

TinEye is a brilliant reverse search engine. Upload a picture and you find out other copies of that picture on the web. Lately, I had a great photo on my computer that I really wanted to use as an idea for my upcoming wedding. The problem was, I didn't know where the photo was taken. I used TinEye to find the photo on the web, and one of the results gave me the resort that originally applied the idea and took the photo. After contacting the hotel and learning some key details, my organization firm is now able to build the same idea for my wedding…

Back to Conde Nast Traveler. The "Where Are You" contest is accessible here. You will find that two contests are active for submission. You upload the picture in TinEye, and you get the information about where that photo is taken. I easily found out the location of both pictures of the contest. To make it adventurous for you, I will not reveal the locations myself.

TinEye's library is just a sliver of the online-accessible photos: around 1.4 billion images. So, as of today, it is not a magic ball. As they expand the search index and build a similarity-based search engine, it will be one of the killer products out there. Especially when the similarity engine hits the web, consider lots of disruptions. At that moment, you should think twice to use Chatroulette. All your counterparty needs to do will be take a screenshot and search it. Probably, it will hit a picture of you in Flickr or Facebook….

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Kindle is such an amazing device. Yesterday, I was flying from New York City to San Francisco, a 7-hour flight. I didn't plan ahead for the red-eye, but the Hudson News shop in the airport came in handy. I took a look at the "best-sellers" rack and found many great novels to buy. Yet, I saw one particular author that got my attention: Vince Flynn. Instantly, I remembered a long overdue book I wanted to read: Term Limits. That book was published back in 1997, and as far as I know, was never translated in Turkish. During my time in Turkey, I had a hard time finding the English version of that book, and I always felt that I was missing a great espionage novel. I found myself thinking about that book for almost 20 minutes in that Hudson News shop in JFK airport. What I did next was simple and powerful. I got out of the shop, found a seat nearby and took my Kindle out of its cover. I searched for Term Limits by Vince Flynn in the Kindle store and it was there. Two clicks later, the first chapter was just in front of me. I have found a book that was sitting in my wish list for the last 10 years, instantly, on Kindle. I finished the book in two days and right after this post, I will download another Vince Flynn Kindle book, Consent to Kill.

To praise the author that I really like, here is the list of books Flynn published. Reading the books in the same order is important for this author specifically, as Flynn develops and evolves same characters with each new release.

1 – Term Limits

2 – Transfer of Power

3 – The Third Option

4 – Separation of Power

5 – Executive Power

6 – Memorial Day

7 – Consent to Kill

8 – Act of Treason

9 – Protect and Defend

10 – Extreme Measures

11 – Pursuit of Honor

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I realized that I have been spending a lot of time thinking about why some content rental markets are better developed than others – both in terms of content type and geography. As I thought deeper, I started collecting enough data to put my thinking into a framework-like approach, where I analyze the tendency of a consumer to either OWN or RENT media content. Below, you will find the first version of this analysis, which will probably be subject to substantial improvements in the near future.

The major types of content discussed here are Books, Textbooks, Music Albums, Movies, Video Games and Software. Please note that, for some types, the sub-types might have different rental potential. I will discuss those in the next part of the analysis. For example, under the Video Games heading, we need to analyze the following pairs differently: PC vs. console games. Online-enabled vs. Offline-only games. However, I will just focus on 6 aggregated content types for the sake of simplicity in this post.

The first step is to explain the factors, or determinants, driving an OWN or RENT decision for the consumer:

1. MSRP: The cost of a new release for each content type. As price goes up, rental becomes more attractive for the consumer.
2. Time to consume: The time it takes to consume the content fully. A popular book takes 2-3 weeks to read fully on average. A movie takes 2-3 hours in contrast. Students use a textbook for a full semester, which is 3-4 months. In that regard, a music CD is considered to be used for 3-5 years before it is archived or lost.
3. Re-consume value: To what extent consumers re-read a book, re-watch a movie, re-study a textbook, re-play a music cd or a game. We rarely read a book or watch a movie twice. But we play the same music album every week and use Microsoft Excel every day. If consumers re-use the content less, they would be inclined for rentals rather than ownership.
4. Copy protection: How hard it is for the consumer to make a copy of the content. It is extremely easy to rip a music CD, while it is almost impossible to make a practical copy of a textbook. Copy protection is an important factor for the consumer as they will be inclined to rent more if they can rent, copy and return the content instead of buying it.
5. Long-term relevancy: This is tricky. At first sight, you might think that this is basically the same as #3, "Re-consume value". But it is not. Think of this as how relevant a particular content will be in the future. For popular books, we rarely see big changes in the new editions. In most cases, there is a new foreword or an appendix in the newer editions. For textbooks, the change is substantial. Even though only a few pages and practice problems are added, these additions change all the layout and page numbering of the books. Therefore, students usually find it hard to follow a university course with an edition older than the one suggested by the professor. For movies and video games, situation is different. Both types of content are heavily new-release driven. Almost all titles in these two buckets generate 80% of their lifetime sales in the first-month release window. Especially for video games, online gaming is only relevant when there are other players logged in. Therefore, once a sequel is released, it is very hard to keep the older version of the game relevant. For software, a newer version of a suite takes longer to migrate, but it eventually happens. It is hard to find people using Excel 98 today.

After defining the factors, we will need to rate each content type across them. Here is the chart:

Here, the concluding row is the Rental Price Ceiling. This summarizes how much a customer would effectively pay per day to consume a content fully. For example, if you have paid $15 to buy a popular book and finished it in 18 days (2.5 weeks), basically you paid $0.86 per day. Similarly, you buy a movie DVD for $15 and in only one day, you finish it. Therefore, your effective cost per day is $15.

This metric is quite important, because, among other things like re-consume value, this calculation is the ceiling for rental opportunity. As we see here, movies offer the highest rental price ceiling with $15. At the second place, we see video games at $3.43 per day. The video games are four times the price of movies, but it takes a lot more days to fully consume a game. On the third rank, we see textbooks with about $1 per day rental ceiling.

The first conclusion is, in fact, powerful. We see the highest rental activity in movies, driven by companies like Netflix and Blockbuster. Video games are on the second place, which is perfectly correlated with GameFly's popularity in the market. On the tihrd place, the textbooks, we see a fast-growing market driven by heavily VC-backed start-ups like Chegg and CampusBookRentals. Interestingly, beyond this point, we don't see important companies serving rental needs for popular books, music and software. Music is easy. With $0.01 effective daily price, there is no economical way to rent a music cd. For software, $0.16 is almost completely inhibitive for a rental market.

The second conclusion, which is more subtle, could even prove to be more powerful. It is about what it takes to create a rental market or enhance its potential. Think about the following conclusions derived from the table:

• Popular books are almost at the same rental price ceiling as textbooks. So, why not to start a popular book rental service? First, target consumers for textbooks, the students, are more cash-strapped than the overall target group for books. Therefore, a rental market for textbooks is more attractive than for the popular books. Second important factor is the ratio of rental price to shipping cost. Think about the differences in the rental transactions in two content types. For textbooks, a students rents one and keeps it for 3-4 months. Let's say he pays $20 for that. The book gets shipped only once during this period. For the popular book, the renter would pay around $3 to rent and the book gets shipped once every 3 weeks. In that regard, the shipping costs become inhibitive for the rental company. This brings us to another opportunity. Why not use a kiosk rental model for popular books to shave shipping costs off completely?
• For video games, there are important conclusions. The fact that a video game is online-enabled increases the "Time to consume" substantially. Therefore, a rental company might focus on serving single-player-only games.
• For any content type, fixing the copy protection issues can change the rental potential of a market dramatically.
• For other geographies where prices are quite different (e.g. in Turkey where average textbook prices are around $30), a quite different rental market potential is expected. Similarly, with the average price of console games at $120, there is an attractive rental market to tap into. By changing other determinants of the market, such as the introduction of Blu-Ray with the ultimate copy protection, a robust video game rental market can be created in many countries like Turkey.

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