Mister Beacon Episode #21
The Physical Web Revisited with BeeemNovember 14, 2016
We talk with Ferenc Brachmann – CEO of Beeem about their work creating tools to enable the publishing for the Physical Web and their experience with Eddystone URL beacons at the European Table Tennis Championships.
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Ferenc Brachmann 00:04
We're focusing on being WordPress for the Internet of Things. If you just think about the economics of app installs, it's like $4 per install or so. Yeah, cause I think that that in itself tells you if you need an outcrop. You know, if you have, you know, millions of customers just just do the math. It's perfectly obvious that apps will not scale well through most brands, all of that. Retargeting has been doing wonders for E commerce. And we just want to offer a simple tool for businesses to expand that into their brick and mortar establishments. We can notifications will be in their inbox there, you know where you type the URL on Chrome for Android and for iOS as well. Once they do that, it's basically going to be very challenging for for anybody to miss the beacons.
You're listening to The Hitchhiker's Guide to the Beacosystem with Steve Statler.
Steve Statler 01:28
Welcome to The Hitchhiker's Guide to the Beacosystem. My name is Steve Statler of Statler Consulting. And this time we are talking with Ferenc Brachmann who is the CEO of Beeem, and he's currently based in, in Hungary. So, Ferenc, welcome to the show. Welcome. So I'm excited to have you on because this gives us a great excuse to talk about the physical web again, and we spoke to Scott Jensen a couple of months ago, but we haven't really talked about it since. So today, what we will do is talk a little bit about the product opportunities or what's required to make the most of the skull web because you could argue that you don't need anything if you're basically creating web pages. So let's talk. Let's talk about, you know, you've been running a company that's been focused on physical web. So love to pick your brains in terms of the lessons that you've learned. And then let's just talk about the state of the market. And that's something that's always interesting for everyone. That's a stakeholder. So sound okay.
Ferenc Brachmann 02:38
Yeah, yeah. Cool. So basically, we're focusing on being WordPress for the Internet of Things. Right now IoT is, is mostly beacons, the concept of the Physical Web actually, kind of slightly expands that and makes you aware of the fact that this is going to be, you know, advertising, your advertising is going to be on the Wi Fi stack as well with Wi Fi everywhere and Wi Fi, Halo. And we also think that Bluetooth beacons are going to be so inexpensive and purely down to Moore's law, that these these devices that can broadcast URLs are going to be so inexpensive, very soon, that actually you will be seeing them in packaging, and all sorts of various write up that are not not not in the focus of the physical mail in the short, short term. But this is probably going to majorly affect most business scenarios and the consumer facing IoT. So basically, what we're focusing on is to provide value to businesses to enable them to engage anyone around through the applets approach of the Physical Web, which even though it's applets, it doesn't mean that it doesn't create challenges for any business. If you want to have a landing page, that that appears on a smartphone. With a physical web modification, you need an HTTPS certificate, you need to pass a lot of technical stuff. I don't want to go into detail. But we spend an incredible amount of time actually reverse engineering Google's crawlers and how they crawl, how often do they call when you change something, you change the title or in the description, for example, or change the logo on your landing page. How does that get recalled? When will that appear? How long does that get to be cached? Things like that, so that there's there's a lot of things to do. Also, because it's applets that means that it's the web. And if you have large volumes of people at live events, festivals and trade shows coming to mind, then you're going to have in this scenario, you will have 10s of 10s to hundreds of 1000s of pageviews per hour. How do you how do you create the capacities for the short term for that particular load? How do you serve terabytes of data for your physical web experience and provide a with a quick engagement opportunity, you need a service. And basically, we've come to the conclusion that this whole IoT thing is going to require the web as an application platform. And mostly because of the scaling challenges that have been well documented. If you just think of any Scott Johnson talk on on YouTube, you can, you can easily look into this, there's a lot of scaling problems with app based approaches in IoT. And we wanted to focus on a service that any business could use to engage their visitors or customers in most scenarios, even right now we're focusing on places, you know, this is, I think, where IoT starts, but later on, it's going to be product labeling. Any sort of retail scenario, I think that even even you know, the pill bottle example is a great thing. I mean, you're taking out a piece of paper, and trying to read an instruction manual in your language, well, that's not a problem, not a problem in the States. But in Europe, you have multi language descriptions. And it's just not interactive, it's not quick. And also, beacons also create an incredible opportunity for for businesses to measure their own activities, or their customer interactions to details that have not been possible before. And that just adds adds customer value added also adds a lot of value to the business itself. So that's what we focus on in a nutshell. And right now, this is a landing page service for any business to engage their customers or visitors. Go.
Steve Statler 07:22
So WordPress, for the physicals. When you're dealing with scaling issues, you've done some studying of the crawler, presumably, you've looked at the proxy that that has been built for Google, which is kind of the front end. Maybe let's come back to the offering a little bit later. But before we go any further, just remind us why. You know, why do you think the Physical Web is going to be successful? Why why do we need the Physical Web, you've touched a bit on how you can I can have messages coming from pill bottles, and potentially from appliances, but just give us kind of the recap of why the physical way?
Ferenc Brachmann 08:03
Well, to quote Scott chanson apps don't scale well. They cost a lot of money to produce, and a lot of time to develop. Basically, those are the two main factors that prohibit the scaling of IoT use cases. For the pill bottle example, you really don't need the man, the pharmaceutical manufacturer, you just need some simple, intuitive, you know, simple information. And it's just that that is one of the reasons the where the became what it is on desktop, we are just that certain that the exact same thing will happen on the mobile. And the reason apps became popular at the first stage of smartphones, is because the CPUs wearing energy efficient enough, so it's basically Moore's Law repeating itself. You're never using desktop email clients, right now everybody uses, you know, some browser based email clients. And then the same thing will happen with mobile. And also, you know, with the Internet of Things that this actually multiplies, because you're using what 20 pieces of software on your, on your desktop computer or laptop computer, but you be an interaction with hundreds, if not 1000s of places and products and devices every month. So this presents even bigger scaling issues than that than it was in desktop computing. And five to 10 years ago.
Steve Statler 09:52
So it seems to me the I mean, the logic for this is compelling. It's lower cost you can do So much of what you can do in an app for two orders of magnitude less on the web. And the scalability piece all makes sense. But we've got this chicken and egg thing. And it's taken a decade or so. But basically, most brands now feel like they need an app. And they've almost kind of, we need to re educate them that the, the physical web can be an option, as well. And I think this is really appealing for people that aren't like McDonald's. If you're McDonald's, then you can do everything. But if you're below that level, then there's major costs and opportunity costs, the physical work, because it's.
Ferenc Brachmann 10:41
Actually actually, I think that besides NBA and Major League Baseball teams, probably the only brand that has significant app penetration is actually Starbucks. And even though I would challenge you on the McDonald's example, if you look at their, their app penetration is just a few percentage points of their total customer base. And they can do everything. And they still get the results. And if you look at you know, Taco Bell, Burger King, anybody who's competing with them, they have even lower numbers. So if you just think about the economics of app installs, it's like $4 per install. So yeah, costs. I think that in itself tells you if you need an app or not, you know, if you have, you know, millions of customers just just do the math. I think it's perfectly obvious that apps will scale well through most brands on the planet, let alone for small and mid sized businesses. You know, the the, the scaling issues here, are not just on on getting people to download the app, it's then how to manage the IoT solution. Let me give you an example. Starbucks has about 50,000 locations globally, I think, in the internet of things, you know, right now, they have about what 30 websites globally. And in the Internet of Things, they will have leapt stores or web based Physical Web stores for every single one of their locations. And actually, it's been reported, Starbucks prototyped, a few locations where they allowed pre ordering of their, of their beverages through the app, but couldn't link it to the inventory, and people did not get their orders. So it's actually the other big possibility for the Physical Web is actually be really been the major global brands. That means something that easily interchangeable, interoperable with their existing systems. And actually, we've, we've been very conscious of this. And we actually allow our customers to embed their back end systems into their become landing pages. So if you have a back end, or back office or a back end system, you want to integrate into your landing page, you can easily do that, with a simple tool. So you can you can even custom develop your your on on back end, and just tie it into the landing page easily.
Steve Statler 13:46
So you have this ability to be more context specific with the content in a way that might be challenging in in an app. And I think your point about the lack of success and mass adoption of apps is is a good one. It's it's just a real gamble to as to whether your app is going to get adoption at the moment. It doesn't, the odds don't favor the retailers in that gamble. But but the you know, basically, very few people are using the Physical Web. That's the thing. That's a great idea, but no one's using it. What gives you optimism that they will start using it.
Ferenc Brachmann 14:30
Google Play Services has taken over from the Chrome browser on Android. And it's been hinted by yourself at several places that actually become become notifications will be in there on the box there, you know, where you type the URL and on Chrome for Android and Chrome for iOS as well. Once they do that, it's basically going to be very challenging for for anybody to miss be a beacon. Right now, actually, the onboarding for the Physical Web is not not too easy as the Chrome for iOS budget is not something that people easily onboard to. But we're confident that we will, we'll figure this out. It's not something you know, it's not brain surgery, it's pretty simple UX, I'm certain that the teams there will do a good enough job soon enough. I think that the reason people have not adopted massively to the Physical Web is because Google is incredibly slow place that this because they want to make sure that this does not turn into a spelling platform. And that, you know, we support that 100%. We don't want this to be, you know, overly offensive to people. Google certainly does not want this to happen. And they'll just need a few extra months to figure this out.
Steve Statler 16:12
Well, I was encouraged the other day, I was in a pod bay here in San Diego, talking to someone about something, nothing to do with beacons. And they just asked how do you earn your living? And I talked about beacons and someone who was at the table, listening in on our conversation said, oh, yeah, the Physical Web. We haven't talked about physical web. We just talked about beacons. And they said, Oh, Physical Web. Yeah, I was in a jewelry store the other day, and they had a physical webpage. And that actually, just my head almost spun. When I heard that. It's anecdotal. But it just gave me a little jolt of optimism that was was overdue. Let's go back to your offering. So I want to tell us a bit more about what you talked about being WordPress for the Physical Web, why can I use WordPress, for the physical as? And because that allows me to create mobile pages and I can get hosting that, that scales? What else is there to be done?
Ferenc Brachmann 17:16
Well, once we realize, with the physical world that actually if you want to have this hyperlocal instant interaction, that is actually completely different from a mobile website, I was actually talking to an American beacon manufacturer a few months back and he he gave a he gave this description that one of their customers have on our website, they even have a mobile website. But what they would want to have on the Physical Web is actually incredibly relevant to just a single point, a single location. So just to continue on with the Starbucks example. In that case, that is going to be ordering and payment for that exact store at that exact location. At that exact time, you know, the coupons or the promotion that we want to have there. And then that's basically what we add to a CMS is timing. We enable you to create cards, placed them on a time scale, basically, a calendar, you can actually time any content and interaction piece accordingly. You know, this might be you know, your morning menu at McDonald's, or a coupon that's only available on certain hours. But it can also be your presentation at a conference for just the time being of your talk for a q&a for the last five minutes. Those are that is not a mobile landing page or a mobile web page. That's actually something for there. That actually we think requires a different approach. And that's why we developed a specialized tool for it.
Steve Statler 19:16
Okay. And so it's the context specificity is that the spokesperson for adding context, a key. So, I mean, you've been getting some good experience. Can you give us a tell us about a case study or what can you tell us from your lessons learned?
Ferenc Brachmann 19:36
Well, two weeks ago, we just wrapped up the table tennis European Championships. We provided live scores on mobile player bio dinos or older players who are were at the tables at the given matches. That was the main interaction In the environment, we wanted to have recovered the main hall of the stadium. And beacon for every table, there were a maximum of eight tables that were present during qualifying matches. Now obviously, as the tournament progressed, it got down to a single table. And then we use the beacons to broadcast the last scores on mobile and the tech player BIOS accordingly. Just an interesting add on to your question is why would this be relevant for any business. And I think that this is also something that needs to be better understood by potential customers, is that with being landing pages, you're able to embed your Facebook pixel tracking code and your Google AdWords remarketing tag natively to these landing pages, so you can basically build your custom audiences, from the people who you engage that more live events. And actually, that's what we are looking into with the IPPF. The international people Tennis Federation, right now it's time to do a year round deployment of all of their major events, and getting to know their live event visitors much better. And you know, retargeting has been doing wonders for E commerce. And we just want to offer a simple tool for businesses to expand that into their brick and mortar establishments, basically, to basically that that one of you know, that's a business driver that can adopt we can adopt, you know, can enhance beacon adoption is but you know, beacons are not for themselves in this sense. So that's actually retargeting we think and drive massive beacon adoption, because it can really add business value to any any potential client.
Steve Statler 22:09
That makes sense. So did you get a sense of the adoption at the table tennis tournaments?
Ferenc Brachmann 22:16
Yeah. I cannot talk about specific numbers. As I'm under an NDA, I can give ballpark estimates. Okay. I don't know if you know that, or if any of you know that. But in Europe, I was penetration is much lower than in the States, it's hovering about 10%. We actually got somewhat lower numbers, but significant iOS usage, which was actually pretty encouraging. Uses above 90%, and we experienced about the same. It was interesting to see that there was a lot of Android six users to actually that is actually above the global iOS, go global Android stat that we have. So actually, you know, I would have thought that Europe has, you know, more Android six than the stats, but actually, actually, there has been a lot of encouraging data on that. Total engagement numbers where the ballpark estimate I can give is between 15 and 40%. Of the daily visitors. Actually, yeah, it's not that bad. It's not that bad. Even though this was the week where physical web notifications were moved from, from Google Play services back to chrome. If you've read about it, but beacon notifications were turned off on in Google Play Services, due to a bug in the GSM core Google messaging services core, and they'll be turned back on once new version of Google Play services is launched.
Steve Statler 24:19
Okay, so that was happening right in the middle of your tournament. And what did you do to make people aware of the fact that there was this physical web opportunity?
Ferenc Brachmann 24:30
We did a left wall video that would make people understand that they need to have the physical web app and turning Bluetooth on and we also did some brick and mortar signage off of how to onboard and also the speaker was instructed to continually repeat the onboarding message. The tournament actually A concept uncovered, we couldn't, we should have had more, we should have had more of this. And you probably cannot get enough of that. But the real trick here is to have some mobile exclusive customer value. So actually, that's one of the things we're working on with the International Table Tennis Federation is to have some sort of social game, or some sort of, of table tennis specific tool that will allow them to engage the the spectators at any event, that's actually I think the probably, NBA and baseball teams also focus on on these sorts of things. I would imagine that doing a lot of this does wonders for your penetration numbers, because you know, people, you know, table tennis is an incredibly fast paced sport. So we were expecting a lot. And actually, I think that with other sports, like we're talking to some, some businesses in the athletics, business, athletics, and ethics would require probably a lot less onboarding messages, because the live scoring is just so much more important in a stadium where anywhere from, you know, up to a dozen things are happening at the same time. So you're basically competing with screen real estate, live at the stadium. And that's, if the stadium has a lot of screen real estate, it makes it challenging if it doesn't have a lot like open air stadiums. And it's much more easy to to onboard ethic.
Steve Statler 26:49
Well, that's a really interesting observation about yeah, that's that can add some real value. Any other things, any other lessons learned any things that you would do differently?
Ferenc Brachmann 27:02
Probably, you know, I would have consulted Google before, probably because we really had a couple of all nighters, because of the changes reverted back to chrome because, you know, the chrome version of that the weekend notifications, again, rolled out on the second day of match activities. And we thought that it was going to roll out two folds in Hungary as well. But it only rolled out on the next Monday, after the event. So we actually, we did the brick and mortar signage twice, because we were we thought we need to instruct people to use Chrome. And then we realized we needed to instruct people to download the physical web app. So so that that pushed a couple of all nighters, but the you know, we were at the point of no return for the deal. By the time we learned of this thing happening, because it was less than a week before the event. And we couldn't get enough information from the law. But no, we don't expect and actually, I'm not not, I'm not really worried about all the backend services, because the rigorous testing that Google does with Google Play services is going to, you know, continue to produce high quality software. You know, I don't expect this to ever happen again.
Steve Statler 28:41
Cool. Well, let's, two last questions before we wrap up. One is, we've been talking about what you've been doing any thoughts about other players in the Physical Web market? What are you seeing that interests you?
Ferenc Brachmann 28:55
Well, there are a few companies who are I think, probably following the same line of thought of Physical Web, what do you do require a different CMS and you know, WordPress is not going to satisfy your needs. And really, really encourage competition in this this sense, because there's a lot of innovation and has to happen before before massive adoption happens. And just to give you another example, we we also have zero configuration Eddystone beacon technology that allows you to set custom forwarder to a beacon and then you can program that forwarder inside the Okay, that basically allows you can you can buy or pre programmed as beacons yourself or you can buy beacons from us. And then you can start editing the landing pages for those beacons as well. Other beacons are in shipping to you. And you, all you need to do is turn the beacons on and you're good to go. That that, you know that completely seamless. Completely programming free flow has to develop. And there has to be several players for this to really encourage competition needs to be met. So innovation.
Steve Statler 30:30
Well, and it seems like most of the big beacon players now support it. The I think the latest proximate q3 report said that 50% of the beacon providers do, but you look at the big guys, and they all they all do. So there's no issues there that that I can see. So that's good.
Ferenc Brachmann 30:49
Yeah, if you think about the kind of numbers that Google Play Services has, or Chrome for iOS has, you know, you're capable of reaching over a billion smartphones, when you perform. And one other thing to add here is we're always measuring about 65% of smartphones with Bluetooth turned on all the time, and grew 15% The last year. So I think we can we can expect to get somewhere around 80% within a year's time. So finally, whenever we go to sales meetings, we won't have to talk about being turned on or off.
Steve Statler 31:32
Yeah, and hopefully, you know, the Apple headsets and just more of these IoT devices, watches and so forth, will will help dispel the, the legends about battery drain and so forth. Yeah. So before we sign off, I've got to ask you a little bit about where you're basically you're based in Hungary. And of course, it's American tradition that we don't take any notice of anything outside of the state. So just give us kind of a one on one on where you are in Hungary. And what's life like that is a high tech entrepreneur.
Ferenc Brachmann 32:08
We live in just south of Budapest University called a town called page, which actually has a lot of history and tradition. Actually, the first settlements were around this area, around 6000 years old, and actually the city of ages has existed since Roman times, even before Roman times. So there's a lot of history here, a lot of ancient buildings, and there's a vibrant university community here with 1000s of foreign students, also 30,000 Hungarian students. So it's a really lovely place to learn about actually, we're doing our best not to need to move to anywhere else. Because, you know, work life balance can actually be perfect in a small town like this. And you know, with the internet, you really don't need to, you know, nobody has time to talk anywhere else. But over the internet anyways. So there's, it's really hard on you, not really, you don't need to move. And we're doing our best to stay here as long as we can.
Steve Statler 33:28
When you've lectured at the university there, which has got a really long history. It's It's like one of the first.
Ferenc Brachmann 33:35
Yeah, it was one of the first universities in Europe. Yes. was founded in the 14th century. Yeah.
Steve Statler 33:43
Well, cool. I'm really glad we got a chance to talk. Okay, great to hear about what's happening with the fiscal web. So Ferenc Brachmann as CEO of Beeem thanks a lot for coming on the show.
Ferenc Brachmann 33:55
Steve Statler 34:08
So what's the music that you would take to Mars with you if you are on one of those spaceships?
Ferenc Brachmann 34:16
First album would be some Mozart. We were after we brought our newborn home. We listened to a lot of Mozart with the newborn. That kind of reminds me of the two weeks of not working at all. Hardly any work. was the end of August so I can work anyway. Yeah, that was really it's hard work. It was pure harmony. Wonderful. Listen to progressive metal music. There's a French band called watch era, and they have a new amazing album out called Magna. And that probably that will be or they have a new live album also is just excellent. And even for, you know, for non metal fans, I think it's it's something worthwhile. Go ahead.
Steve Statler 35:18
Describe it as progressive metal what was the genre?
Ferenc Brachmann 35:20
That is the genre actually, it's, I would describe this music as the direction Metallica would have continued on if they would not have become their own cover band. Don't know if you I was a huge Metallica fan, but I was I was a small child. But they just became their own cover bands. And they they are still they are their own covered band. Basically.
Steve Statler 35:50
They just didn't progress. They were just kind of my same formula. Regression.
Ferenc Brachmann 35:56
And what's also not going on is that they have made like, since 1991, they made five albums altogether. Studio albums and they just take more and more time to produce a new Apple. Their new Apple. Mine's been in the works for eight years now. So actually, it's really interesting. I never would have thought that I don't even know any other French metal bands and and they're just really interesting.
Steve Statler 36:31
And what's your choice? They live in New York actually. Wonderful. And your third choice there's a progressive metal band called Mastodon from California. I've heard of them. Yeah, I don't think I've ever listened to them. But I've definitely heard of.
Ferenc Brachmann 36:54
Even for not that I would suggest for any anybody who listened to rock music because it's not really metal. That sense. It's really just progressive rock music. Really. Their lyrics are pretty blurred, and not too strong. But the music itself is just great.
Steve Statler 37:14
I'm gonna listen to some Mastodon after this. Yeah. Good. Thanks very much.