Thursday, 31 December 2015

Six things I've learned about Digital in 2015

As 2015 winds to a close I've been reflecting on what I've learned this year. For succinctness, I'll keep this post just to 'learned about the Digital Economy'. Enjoy, and thanks for reading in 2015!

This is taking ages... I've been amazed by the slow pace of change to digital economy cultures amongst organisations in all sectors. Having been thinking about this for years I take for granted that ideas like Lean Startup are the norm in management, but it seems not. I realise that I've been unrealistic. These kinds of massive changes take decades and I suspect I'll be advising on this phase for much of the next ten years of my career.

The fundamental lessons are the same in every industry. This year, my team and I have worked in a huge range of industries, from government departments to construction machinery, snake bites to sportswear, groceries to car manufacturer, appliances to social media, and in most cases we've come in as generalists. And that's just fine because the discipline of setting strategy and building growth ventures using Lean Startup applies in every circumstance, albeit often with tweaks to enable the language and pace to work in a given organisation without being rejected by the corporate immune system. This gives me a great deal of confidence that we're on to something :)

We must be on the verge of another wave of extinctions?! The slow pace of change in organisations, coupled with continued heavy investment into startups suggests that some industries that have hitherto remained secure may well start to suffer in 2016. Retail banking, insurance of all sorts and healthcare providers have all managed to avoid disruption despite inaction. With new waves of challenger banks entering the UK and US market, a glut of data coming from all sides that'll enable radically better risk assessment and health outcomes this must be the year for one of these three titans to feel at least a bit of pinch?

Objectivity is still absent in many businesses. Good metrics are the simplest, yet most fundamental thing that any organisation needs in the Digital Economy. Without them it's impossible to spot disruption and opportunities for growth, nor is it possible to change the organisation with new management ideas or new technologies without having a baseline to work from. The worst culprits? Still Marketing departments.

'Experts' are still very vague about a lot of things! And I include myself in this: many methodologies and ideas about growth and leadership in the new economy are still ill-formed. It's easy for people like me to be defocused and flit between new ideas rather than focus on clear methods that help people without the luxury of time to think about the change understand the concepts, plot a  course and act on advice. Next year I'm going to narrow my team and I's focus and be really clear about what we do and how we do it. The 'miracles of nature' have to go.

It's really hard to find digital strategy talent. I read a report on this for my own team, which suggested that there were only about 1,000 digital strategy professionals in the UK. That could be true, but in my experience the challenge of recruiting is not about finding the needle in the haystack that is the fully qualified, experienced professional, but instead it's about finding the right combination of smarts, flexibility and grit that enables digital strategy people to be trained. It's a funny role, spanning deep intellectual musings all the way through to building and trading startups and you need to have experienced it all to set strategy effectively... needless to say I'll be focusing on building rather than buying next year.

So there we are. Six things I've learned during this crazy year of growth and discovery. I'd love to think 2016 will be calmed... but there's no chance of that. First stop for me will be Las Vegas for CES. I look forward to telling you all about it!

Tuesday, 22 December 2015

A Nightmare Competitor for Studios

One of the techniques we've been playing with this year is The Digital Nightmare Competitor, a framework for stretching the thinking of executives in a business by showing them how their industry could look strategically, operationally and economically in a digital world. I recently did such an exercise for a studio client and thought I'd share a nightmare I particularly like. Think of it as a Grinch-like Christmas present :)...

November 5th 2026, London

In late trading, shares in Wintermute, the apex media business of the 2020's hit a record high, valuing the business at more than $400Bn. This success marks a remarkable rise to prominence for an organisation barely a decade old.

Classical disruption started with the customer

From its launch in late 2016, Project Wintermute targeted people turned off by the complex media distribution and rights landscape of the mid-2010’s. By offering a single monthly subscription to unlimited premium digital content at a significantly lower price point (EUR 15 a month, without contract) than the EUR 50 (typically with a 12 or 24 month contract) or more that the traditional pay TV industry charged, Wintermute created a ‘no-brainer’ decision for tens of millions of younger consumers around the world. Basing the experience around mobile and making it impossible to share subscriptions through ‘Totally Secure Streaming’ technology or find content without ‘Total Social Search’ (which only allows you to watch if you’ve been recommended and only being recommended if you’ve done likewise) only made Wintermute more cultish and compelling.

Top-to-bottom data redefined the industry’s value chain… backed by billion dollar parents

Although giving early equity to A-list content creators certainly helped build momentum, Wintermute’s unreal economics are really a combination of Digital Economy technologies and business concepts.

Making a virtue of short content windows enables the company to manage the cost of essential 3rd party content. Artificial Intelligence enabled Wintermute to assess the quality of talent and creative concepts from the structure of a pitch and find great behind the scenes and on screen talent from their own job network with radically greater success than the industry they replaced. 

Combining funding with talent in a single platform created an instant and enviable ecosystem of virtual independent producers. And with billions of dollars of backing from the Valley’s largest funders it was able to ride out years of heavy spending while it built global scale, leaving Wintermute free to compete with the incumbents in an unequal competition between a global over-the-top player and local oligarchies.

Starting and staying lean is an essential strategic advantage

Despite its rapid growth, Wintermute remains a very small organisation, assembled from an ecosystem of seven-person, multi-disciplinary ‘icebreaker’ teams, each of which owns one of the business’ small set of outcomes. Each team operates semi-autonomously, drawing in external experts where they’re needed, resulting in a business that does the job of tens of thousands with a few hundred full time employees. By building its business around talent, rather than vice versa, Wintermute believes that it remains perfectly placed to lead further disruption in the trillion-dollar global media industry.

Tuesday, 3 November 2015

A framework for thinking about the success of Digital Economies

As promised in a previous post about information symmetry, I’ve now completed my first-draft framework for assessing the success of digital economies. 



Digital education was quite a tough ask as it’s a broad ranging subject. I think it condenses into three topics, though:
  • Higher education, because we’re in an age of discovery and people need to be both intellectually inquisitive and able to learn. My view is that a properly thought out higher education system which emphasises self-study is fundamental to the success of nations. I have major issues with the idea that those who wish to learn should have to pay for that learning excessively as it encourages competition based on perceived rather than real outcomes (why go to a college where it’s harder to get a good grade?)… but I accept that I’m a throwback in this regard and that commercial undergraduate education is here to stay. I don’t care about what subjects are being studied either – it’s simplistic to suggest that STEM topics are more valuable than traditional arts. The Digital Economy is a human-centric one.
  • Creative generalism, since the real skill of this age is being able to look at problems from an objective perspective and then assemble and arrange the right skills to solve it. Hyper-specialism is short-termist as inevitably in the connected global economy specialist skills become commoditised. A culture of collaboration is for life.
  • Digital business practices, which emphasise validated learning and collaboration above MBA-school processes and hierarchy. By ‘business practices’ I include all sectors equally.


So there’s a structure. Now I need to assemble some proper measures. No rest for the wicked.

Monday, 2 November 2015

The curious update of Myspace's dog

For narcissistic reasons I recently looked back on the most popular posts from 5 years of blogging and discovered that amongst the top 3 was this one on the relative sizes and evolution of social networks. Back in 2012 I was trying to make a point about the decline and slight return of MySpace. Looking around has made me realise that consolidated views of active users in this market are actually quite thin on the ground. So here's my read on the performance of key social networks from 2006 to 2015.
Although no one has matched the breakout performance of Facebook in 2007, there are murmurs of hockey sticks from Snapchat and Instagram. Poor old Twitter failed to kick on from 2012, despite looking a bit sticky. Too slow to become a photo stream and too transient to be a publisher, Twitter has struggled a bit for direction in the intervening three years, scoring successes only through Vine.

I hope this brief recap is useful. Rest assured that I remain vigilant for hints of canines in social network annual reports and the subsequent tanking of user numbers.

Wednesday, 28 October 2015

Success factors for digital economies - information symmetry

In previous posts I've written about presentations on the trajectories of digital economies in Africa and Norway. Both of these were based on an unfinished framework I've been developing that tries to describe the success factors for national economies in the Early Digital Economy. I won't recap this framework in detail as its described in the posts linked above, but at the highest level it breaks the success factors into four categories:

  1. Pervasive access to computing
  2. Information symmetry
  3. Innovative AND entrepreneurial culture
  4. Digital skills and education
In order to complete the framework and starting building a broader data set to test it I've now populated one of the two missing sections, information symmetry. This topic breaks into 4:
  • Unfiltered access to information, enabling people to have open conversations and access (if not a preference for) content from every potential point of view. This is vital for true innovation as a fear of repercussions is significant disincentive to think differently
  • Open data proliferation from public and private sector organisations, enabling innovators to access information that enables validated learning and re-examination of accepted wisdom
  • Digital organisation structures at a team, business unit, company, municipal and national level that reduce hierarchy, enable collisions between people with ideas and skills
  • A culture of objective measurement ensuring that the true results of innovation and iteration can be understood and learned from in a way that reduces wastage
The above leads to a more complete framework, shown below.


I'm now working on gathering the actual metrics that suggest performance in these areas so that I can figure out whether they actually point to anything and/ or are consistent. I'm also thinking about the skills and education element, in the spirit of leaving the best until last. 

Interesting though all this is it's fitting in around the completion another project that I'll hopefully be able to talk about in the next few months. Mysterious ;). Thoughts greatly appreciated.

Wednesday, 14 October 2015

Norway and the Digital Economy

I'm on my way back from Oslo, where I presented a keynote on the Digital Economy at the DND IT-lederkonferansen 2015 conference. Rather than do a standard Eight Traits presentation I decided to build on the work on success factors for digital economies that I prepared for SATNAC last month. You can find the presentation here.

The structure of my argument was as follows:
  • Norway was one of the greatest beneficiaries of the Industrial Economy. Before 1770 GDP per capita was on the same level as Mexico or Portugal; now it is more than twice that of the latter and three times the former. (I had to show 2003 numbers on the chart as doing 2015 made it look crazy!)
  • But now the system is changing away from automation of physical processes into automation of mental ones. This will cause great disruption as it will polarise the productivity and hence the success of companies and countries. So how well set up is Norway?
  • Success for digital economies is driven by four main factors: access to computing, information symmetry, education and skills and an innovative and entrepreneurial culture. We'll cover two in this presentation (mainly because I still haven't fully figured the other two out :) )
Access to computing is world class
  • In terms of access, Norway has one of the highest smartphone penetrations in the world and importantly the device quality is high - 37% of owners have iPhones.
  • Furthermore, despite concerns about speed of broadband domestically, Norway has a top 10 ranked broadband infrastructure. It excels in access to technology and computing.
Entrepreneurial risk is counter-cultural for Norwegians
  • Although there are about 150 scale digital businesses in Norway, most of them are small and locally focused. When these businesses want to scale they tend to leave and go to the West Coast. Norwegian entrepreneurs have largely limited their scope to domestic problems, which might make them some money individually but isn't going to lead to system change...
  • ...and that change is needed because Norwegians have the lowest interest in entrepreneurship per capita in Europe, which is doubly challenging as the country has such a small population
  • Worse still interest in entrepreneurship is declining and the government is actively against the kind of long hours that will support new ways of working
  • Finally the cost of labour is the highest in Europe, meaning that there are real problems to solve if the country is to survive and thrive in a new economy and a world of declining oil prices
There is great opportunity in resolving the current work-life paradox
  • During periods of transition, productivity actually tends to decline in the short term before exploding upwards - this is because there is inherent inefficiency in substituted process that have been perfected with those that are novel
  • The countries that thrive from new general purpose technologies in the long run are therefore those where the benefits of using them outweigh the early inefficiency of using new technology
  • In Norway the cost of labour is so high that the country is one of the few where it is worth stomaching the inefficiency of replacing human judgement with machine learning. Doing this would enable them to develop new technologies and ways of applying them that could enable Norway to take global innovation leadership, rather than just being a later consumer
  • As an example, think how electric cars have taken off in Norway - they are compromised but they are affordable for Norwegians because the cost of running a traditional vehicle is high and the country is rich enough to replace vehicles and infrastructure regularly
  • For the leaders at the conference this means twisting their thinking from how to eek out the last percentage points of efficiency from today's technology and instead resetting their vision onto how to create radical growth by applying that of the Digital Economy
These messages seemed to go down well... or at least although they are challenging they were accurate! That said, I am leaving the country as we speak... 

Wednesday, 30 September 2015

Creative challenges for UK TV

About 10 days ago my team and I published an analysis of the creative challenges for UK TV. Our concerns were that the creative basis of our TV economy was being damaged, despite an environment of increasing revenues, driven by TV's role in reinforcing the telecoms market through triple and quad-play bundling.

What we found was troubling. Although revenues are indeed up by 10% since 2012, our share of global TV revenues has fallen and that the entire of the revenue increase can be accounted for by sports rights. As we showed in our 2013 Royal Television Society report, sports rights spending flows straight through the industry into the rights bodies, clubs and players, rather than into new skills, ideas and creative formats. And the worst is yet to come: the new Champions League and Premier League rights deals add more than a billion pounds a year onto the rights budget, so unless revenues increase new funding sources will be required if net spending on new creative content is to remain flat.

Outside investment is one source of such investment, particularly from US studios acquiring UK studios. Our analysis shows that this too is a double-edged sword. It does bring finance and access, but a cost in terms of creative breadth and company formation. Smaller indies live an ever-more precarious existence and with them goes the creative quality and talent that has fuelled our world-class TV economy.

You can find the report here and an excellent summary piece from the Guardian here.

Tuesday, 29 September 2015

Value drivers for telecoms retail

I've been doing a really large number of driver trees recently - we've taken to using them on every project to get really into the guts of value creation for businesses and thus decide where to focus initiative development (How To Win, if you're keeping score).

Anyhow, I had to pause for thought recently to work out how to represent the subscription aspect of telecoms retail for a client. Since it took me a minute, I thought I'd share... its lack of elegance suggests that its not quite right, although it was enough to demonstrate that there was a certain lack of coverage in the initiatives that my client was pursuing and thus spark a debate. Enjoy.


Monday, 28 September 2015

Differences between Industrial and Digital businesses

Since I'm stuck on a Eurostar crawling through western France I thought I'd use the downtime to share this table I've made on the differences between Industrial and Digital companies across the main business functions. A strange insight into how my mind works... but hopeful a useful summary!


Thursday, 10 September 2015

No leapfrogging: Africa's digital reality

On Monday I was privileged enough to present a keynote at the SATNAC conference in South Africa, the slides for which can be found here.

The presentation is a little less conceptual than my usual... in that there are significantly fewer pictures of cats off the internet. The thrust of my argument was as follows:

Part 1 - setup

  • We are in the early throes of a shift to a new economic system
  • This means redefinition of the roles of individuals in society, businesses and governments in their lives
  • Conceptually, some commentators believe that this new system will enable African countries to leapfrog over their developed world counterparts because they don't have the infrastructure, business model and cultural encumbrances of the Industrial Economy
  • To examine whether that is true, we need to look at the ingredients for success at a macro (national or perhaps mega-corp level), which I'd describe as:
  • Pervasive access to computing (because this is the general purpose technology of the era)
  • Symmetry of information (to enable the maximum benefit of that technology and empower people)
  • An innovation and entrepreneurial culture (that seeks to monetise as well as create new ideas)
  • Digital skills and education (providing everyone with the capabilities they need to thrive personally and professionally in a new world)
Part 2 - Access (this was a technology conference, after all)
  • Computing power is cloud-based and there's an effectively infinite amount of it available as long as you have connectivity, so there's no need to worry about that
  • Access to computing is the key and this is made up of four elements: device proliferation, efficient organisations to make services suitable for consumers, core network capacity and international connectivity 
  • Consumers in Africa have huge desire for phones, but smartphone penetration is still extremely low
  • $90Bn has been spent on upgrading African telecoms infrastructure over the last 5 years, which is a huge number in absolute terms...
  • ...but when you look at it relative to the rest of the world, you see that only a handful of countries are at the average level of investment in infrastructure per capita
  • Given that most African countries are starting from a position of scarce coverage and depth of communications, this means that despite the investment they are slipping further behind
  • More than $30Bn of M&A has also happened in the last 5 years, but this has no consistent positive or negative impact on investment
  • The final part of the mix, inter-network connectivity is particularly bad - more than half of African countries have no Internet Exchange Point (IXP), making peering between providers prohibitively expensive
  • In short, there is consumer demand for services, although not internet ones, network infrastructure is lagging and interconnectivity is even more lagging
Part 3 - culture
  • Being a digital economy is about way more than just having decent connectivity (something that many legislators fail to appreciate)
  • Culture is at least as important. In my view this is a function of having problems to solve; the ability to take risk; access to resources and appropriate regulation
  • Taking them one-by-one, there are plenty of startups in Africa but they tend to be dealing with local problems caused by lack of infrastructure rather than those with international relevance. MPESA's patchy success outside of Kenya is illustrative
  • Culturally though, Africans seem more than typically willing to take risks and want to set up their own business (the exception being in South Africa, which has disastrously poor incentives for entrepreneurial behaviour)
  • Lack of availability of capital and other production resources is a serious impediment...
  • And the developed market solution of online ways of matching supply and demand are basically unavailable
  • An important thing to know is that success in digital products and services is a numbers game - you can't just have one crowdfunding platform and hope for it to succeed - you likely need to have dozens and let natural selection take its course
  • Finally, the role of government in this needs to be to educate people in the real skills they need, rather than interfering in telecoms!
Conclusion
  1. There is no evidence of a leap frog in progress
  2. Infrastructure may be wireless and broadband-first in a way that it isn't elsewhere, but there's nowhere near enough of it to make any African country a South Korea and the possibility of that scenario emerging is actually receding
  3. For all of the fibre being dug in, there are more basic needs - IXPs being a first thing, a supply of cheaper smartphone handsets a second one
  4. The digital innovation that is taking place in African countries is solving national problems. It is using tools that are not relevant outside Africa (feature phones) to solve problems that are often irrelevant as well. This is not a criticism of that activity: it will certainly help countries over their infrastructure gaps, it just isn't likely to be a source of FDI
  5. Governments need to focus on getting the skills basics right in their countries. This may be a way of starting an actual leap forward as the skills of the new economy are not widely available in the developed markets so making them basic in African countries could gain advantage over the long term
I'm aware that this might be a somewhat controversial point of view. However much I wanted to be able to make a positive case, I'm afraid that the future currently looks like slipping further behind in relative terms and becoming a less attractive place to invest. One of those times when I hope I'm wrong.



Monday, 7 September 2015

Africa Telecoms Investment update

I had the chance to return to a topic that was very close to my heart for many years: that of the development of foundations for a digital economy in Africa. I'll drop a transcript of my keynote at SATNAC here in the next day or so, but for now, here's two high level figures on the investment over the last 5 years. 

I'm planning to restart blogs on this topic (and in general) once I've completed my latest book, on the traits of a digital business, later in the year.

In the interim, here's two figures: total investment in telecoms infrastructure, including international, core, MAN and access for all African countries, split by region. My summary of the figures is that although investment has been huge in African countries, on a per capita basis very few countries are even on par with the global average investment. Given where they're coming from, this means that African countries are effectively falling behind in terms of the foundational infrastructure that powers a digital economy.



Thursday, 25 June 2015

Demand and supply hypotheses for publishers

This is just a simple post to relay some thoughts I had on the ways in which digital publisher models will evolve over the next couple of years. I presented them at event this week and they seemed to resonate with the audience of publisher leaders. Comments much appreciated:

Consumption trends:

  1. Mobile users interact c.3.5x more with services than regular online users, so we should expect massively greater consumption as the mass market becomes familiar
  2. Aggregation is now happening at the handset, rather than on a service
  3. UX/ UI becoming increasingly faddy, mirroring social and mobile gaming trends
  4. Short form video playing an increasingly important role, disrupting much of the low-quality TV audience…
  5. …short term upsurge in vlogging may turn into a longer trend if grey vloggers capture an older audience
  6. Social media is fragmenting and the role of advertisers is increasingly seen to be negative
  7. News encompasses a much broader range of topics… but many of them are highly personal
Resulting supply responses means a proposition that entails:
  1. Highly personalised content and context, requiring login to consume for free
  2. Mobile-first contexts, operated by businesses employing lean startup techniques to flow with demand
  3. Local content anchors with niche global reach
  4. Telling stories in the context of the audience
  5. Creates micro-segments for advertisers based on demographics and life moments
  6. Dynamic ad pricing
  7. Merchandising content as product and actively manage the conversion funnel
  8. Providing data exhausts as products to other businesses
Not revolutionary, but I found it useful to put it one place!

Wednesday, 27 May 2015

The 1,000 segment business

One of the key findings from our Media Consumer Survey this year was the increasing lack of interest (and outright hostility towards) social media advertising. This is not really much of a surprise. While people have become more sophisticated in their use of social, splitting general narcissism (Facebook), professional narcissism (Linkedin) and photographic narcissism (Instagram) from sidesplitting banter (Whatsapp), advertisers have persisted with the blunt instrument of display advertising (see below). For the record, I have a long term girlfriend and don't currently operate a retail store...

...but perhaps Facebook is telling me something?

In any case, only 9 percent of people responding to Media Consumer Survey told us that they ever clicked adverts on social media. Furthermore, our focus groups suggested that the main reason that people are migrating to platforms like Snapchat (7 second narcissism) is because they can't be spied on or marketed to by advertisers.

This presents a problem. Many businesses I work with invest heavily in social marketing, often under the auspices of 'community building'. The return on investment of these activities is strongly negative - ROI is often in the single digit percentages. And the investments are increasing, driven by general migration to digital spend.

I don't expect that to stop. I also think that social media is a phenomenal advertising channel. But it requires a fundamentally different approach: a truly digital one.

The work we did with Facebook is one such method and formalises work we've done with other businesses on more bespoke data sets. What we did was twist the segmentation logic applied to digital spend, which is a development of the blunt demographic-by-channel approach taken on traditional channels (C2DE women watch ITV in the day, for example). 

Our view was that on social media people are coming to share life events. Most of those are small - "I'm in the park... SELFIE!" - but some are indicative of longer term trends in lifestyle. And it's when big changes in lifestyle happen that people are most likely to change their service providers, favourite consumer and fashion brands, buy a car etc...

We borrowed the excellent work done in the US by Target as a basis, focusing in on mothers and looking at churn behaviour for mobile operators. What you find is that there are particular churn peaks that happen along the journey from finding out you're pregnant to having the child and then being a parent. And they vary by the age of the mother, whether this is the first, second or third child and so on.

What you build up is a model that segments mothers based on a number of factors and enables a radically more efficient targeting of adverts at them only at the key moments when they are likely to be amenable to changing their contract... which for over 60 percent of them is a once every seven year thing. Better still, you quickly come out with information about the type of tariff and handset that is most likely to appeal. For example, it turns out that mothers post significantly more pictures that non-mothers of the same age and demographic, consuming more data and presumably placing greater emphasis on picture quality.

A simple model enables you to create a model of roughly 1,000 segments that covers all mothers at different life stages. Into that model you then build A-B testing for each segment based on a relatively small set of offers, tuning the action-per-segment in order to optimise ROI and getting away from blanket blunt targeting that leads current (remnant, in this case I assume) advertisers to hit a 34 year old guy with a girlfriend and a corporate job with two completely meaningless dating/ payment platform ads. For the record, the more closed platform equivalents I've been part of in other digital businesses are roughly 10x more productive in terms of ROI than that achieved with 10 segment operations.

All of this is not just possible, it's actually really easy. We built the model in a matter of days. Facebook can create segments this granular, as can other platforms. The psychology is harder. It means abandoning a segmentation approach which has functioned well in traditional since the 1950's and marketing teams that are set up without the truly objective end-to-end performance metrics that enable the returns of new approaches to be effectively measured. That, we find is much harder. But it's definitely worth it.

You can read the Deloitte + Facebook report on the 1,000 segment operator here
And 2015's Media Consumer here

Tuesday, 3 March 2015

Keeping up with the Joneses: the cars of Mobile World Congress

Connected vehicles are a big theme again this year at Mobile World Congress, with many operators and OEMs rolling out their automotive partners on their stands. Since all of them are secretly just trying to keep up with the Joneses, I thought it might be entertaining to engage in a game of AutoTelco Top Trumps...

Typically in this game a Ford Focus would score pretty low down the pecking order. In this case, however, Ford score big points for actually making theirs. Plus, they brought an electric one and that has enormous torque. And a mediocre app. So there.


Next up AT&T, who, being wealthy Americans brought not one, not two, but three VeeHicles to the Congress. Their all American Cadillac CTS and electric ETS were rendered anonymous by a mighty Audi S7. 'It's not electric' said the demonstrator, 'it's plugged in to save the battery'. Bonus points to AT&T for surrounding the ETS with Virtual Reality headsets: another must have stand item in 2015.

China Mobile only managed a solitary Cadillac ATS on their booth. The lonely Caddy was the poverty-spec 3.6 too, scoring nearly no points. Envious glances must have been cast across to AT&T...

...and to Vodafone, who rolled in a white Porsche Panamera e-Hybrid. Flair... But I think Guards Red would have been more appropriate so no victory for Vodafone. Soz. Close but no cigar for Qualcomm, who scored massive points for the Maserati... But it runs QNX so I'm not going for that, nor LG's Audi RS5 convertible, complete with obscene red detailing. The only telco bit is the key though. Fail.


In the end, I was totally disappointed by AutoTelco Top Trumps. I only saw one thing that was remotely compelling: T-Mobile's partnership with BMW and a publisher, which uses tablets in car to create an experience similar to the entertainment system on an aeroplane. It's a simple, fun navigation experience with lots of child-friendly features like a virtual dashboard that lets the kids see how fast the car is going, where it is and whether they're nearly there yet. So the unlikely winner of AutoTelco Top Trumps is T-Mobile.

Well done to them. 

And of course, this is a competition and we need a loser. And that loser is definitely Samsung. Bad enough that their connected Seat appeared to have no obvious Samsung tech in it, but it also committed the cardinal sin of being accompanied by a showroom specifications board listing one of the key features of their connected vehicle as: "chromed roof rails". Those Joneses have definitely been kept up with.

More cars of MWC:




Monday, 2 March 2015

Bikes?? What the £&@# are you doing, Ford?

Ford is one of the many auto companies creating innovation centres that develop digital experiences around what are very industrial economy (and very disrupted products). They have three and their stand at Mobile World Congress showcased some of the fruits of their endeavours.

Most conventional is an all electric Ford Focus that can sync with a mobile app, which gives the user a modicum of personalisation over the vehicle. You've seen it before. Ford's isn't the best. It isn't the worst. Blah.

Then there's an electric bicycle designed with Dahon. This is supposed to be a range extension product that enables commuters to make a choice of methods of commuting based on traffic conditions, weather, lifestyle etc... There's a pointless app for the cycles lights, turn signals etc... Clearly none of them have ever ridden a bike as poking at tiny buttons while in the saddle is a bit of a dangerous idea!

Finally and most interesting is a project being run out of their Palo Alto centre that measures the routes that cyclists take through cities as well as the prevailing weather conditions. The idea is to add that mapping data to navigation systems in order to enable people to make better choices about their mode of transport. I also suggested that it would be useful contextual data to feed into self-driving vehicles so that they know to leave extra room for cyclists on days when there are likely to be a lot of people commuting that way, but be less attentive on rainy days. I was met with a blank look, so maybe not!

In general I had a really nice time at Ford. The people were lovely. But I also asked several times why they were doing this. And no one seemed to know. Strava and Garmin know far more about cycle routes than Ford can with their little experiment. Weather data is available very freely. Mash them up for an MVP. Very few people are likely to choose their commuter bike based on the model of car they have... Unless they have a Lotus, perhaps. And so it goes on... 

This is a classic case of an idea in the lab not working in the real world because the people who would buy it don't actually make the choices that the developer thinks. Ford would have done well to actually think about commercial value and use cases before diving in and engineering clever telematics and stupid apps. Then they could have used a Lean Startup method to try it out for real. Not as glitzy but so much better!

Value hypothesis first, Ford. Henry wouldn't have been happy.

iPhones-only at the clubhouse: Sony snatches defeat from jaws of victory

It would be fair to say that I significantly overestimated Google's ability to kickstart a successful market for connected eyewear in 2014. I was therefore fascinated to see how Sony, that long dormant tech giant, would do with their belated take on the category. After all they remain imaging experts.


Smarteyeglass Attach, developed by former Sony Ericsson engineers in Sweden, does what it says on the tin. It turns a normal set of spectacles into a smart set that can display data into the user's eye line by way of a tiny screen. It isn't a particularly elegent device, being nearly 3 times the size of Glass, but it's nothing like as cumbersome as the initial advertising videos suggest. For occasional use it'd be fine.

Sony had two demos, one of a game of tennis, the other cycling. The latter was the more obviously useful. A map with directions, speed and direction data are displayed dynamically as the demo rolls through. Although you do have to look quite far to the right and up to see the screen, the imagine was very sharp and clear in artificial light. Better than Google Glass, in my opinion. 

In fact, I could see the combination of being able to attach to any frame and a big manufacturer brand being an attractive one. We don't know the pricing yet, which is a concern. At £200 it would be attractive. At £400 it's not.

But here's the rub, and the real problem with both this and Sony's other fitness and lifestyle IoT devices. You need an Experia phone to use the Attach. And let's be frank, who has one of those? Particularly in the apparent target market of cycling, golf and tennis enthusiasts.

That's right: no one.* iPhones only at the clubhouse, gents. So long as Sony persist with their dwarf locked ecosystem all of this technology is wasted. Which in the case of the Smarteyeglass Attach is a shame.

* this may not be factually correct :)

Is this Microsoft's real way back into mobile?

I've been watching Microsoft win real interest in 2015. They've got tech journos salivating with clever augmented reality technology, made Windows free, brought office to iOS and Android and launched a major ad campaign based on the superiority of the Cortana virtual assistant. 

But one thing that's gone under the radar is the launch of the Lumia 435, a new smartphone targeting first time smartphone users and upgraders in less wealthy segments. In the UK is retails at just £70 without a contract. I spent some time with the device at MWC and was very impressed with the experience. 

Physically the demo units all sported rather garish luminous plastic backs and have a screen about the size of that in the original iPhone. It's thick and rather sharp edged next to the zeitgeist devices of today, but is still a fun, coherent package. The OS is Windows - for those of you haven't used the mobile version of this OS, that means scrolling down through tiles of various sizes rather than clicking icons and navigating between pages filled with them. I like it. It's simple and intuitive in a way that Android isn't.

So despite the price point, the 435 is very slick to use. There was no spec sheet to compare with the Asian horsepower brutes elsewhere, however you still wouldn't need to worry about speed if you were using this, unlike any other device I've ever used at the price point. There's a camera with lots of complicated settings too. It takes average photos and struggled with lens flare in the bright lights of the event... But at this price point it was still better than decent. Fiddling with settings would probably help fix some of the issues.

Bundled with ONE TERABYTE of cloud storage (seriously, is any user of a £70 ever going to need that much right now?) and a year of Office 365, this is an amazing value package for domestic and business users... With the slight challenge of a still weak app environment.

But there's so much in the package that I am beginning to see what Microsoft saw in Nokia, long masters of the high quality budget device. This has the potential to be a seriously disruptive product in the sense that it undercuts and outclasses the generic Android clones in the market, particularly in terms of core software bundle. I even wonder whether this joyful, cheap little phone will be more important than all the high technology MS are pushing at the top end. Win a generation of kids and emerging middle class and the chances of long term victory are good for resurgent Microsoft. 

If you think this unlikely, remember that in the late '90's we bought Apple would never be cool again...

Wednesday, 7 January 2015

Is there a renewed role for Maskirovka in business strategy?

Late last year I worked with a client who was trying to decide what course to take with a digital commerce business they'd acquired. Without going into too many details, the business unit was effectively competing in a two player market across three or four digital channels. One of those is direct sales through eBay, which generated considerable revenues but produced very poor  margins due to highly competitive pricing and the complexity of running a large catalogue on eBay. 

My recommendation was to cease trading this channel for two reasons:
  1. To simplify the business' operations so that the management could focus on gaining control in areas that are likely to be more critical to future success (read: direct, branded channels)
  2. If we cede control of an unprofitable, non-strategic but relatively large revenue channel to the competitor then it may well distract them from our renewed focus on the areas we think are really crucial for long-term victory
I realised later that with small tweaks we could be even more deceptive. For example, perhaps we should trade eBay a little so that it looks like we are still committed to the channel; we could do a press release or two that talk about how excited we are about it... you get the idea. 

All this got me thinking. Why does corporate no longer contain any deception? We spend so much money looking at customers and products and internal structure, but rarely about how to conceal our real intentions, beyond blunt instruments like cyber-security. 

It also reminded me of some reading I did about Soviet military tactics many years ago.

Camouflage and deception were a crucial element of the military strategy and planning of the former Soviet Union (and presumably of the organisations that followed it). The word they used to describe this kind of approach is 'maskirovka' - a very broad concept that is difficult to translate, but which encompasses ideas including: camouflage, concealment, deceptionimitationdisinformation, secrecy, security, feints, diversions, and simulation.

The sketch shows how maskirovka dovetails with other elements of strategic military planning and the specific principles for any attempted maskirovka, each of which must be considered in order to make the deception successful.

You can read more about these elements and the military approach to maskirovka in this excellent 1988 article, but in brief:
  • Activity. The maskirovka must be persistent in order to make it believable and lull the competitor to incorrectly assess the situation. Once a form or type of maskirovka has been implemented, it may become necessary to change it.
  • Plausibility. All efforts at maskirovka must be plausible. This is an especially important principle. Regardless of the type or form of maskirovka involved, the competitor must believe what he sees is real when in fact it is not
  • Variety. Repetitious patterns of maskirovka must be avoided and variety employed. This is the principle of variety
  • Continuity. Maskirovka must be part of all plans and must be continued throughout an operation, whether you are directly in competition with an organisation or not. Outward concealment and deception should be an instinctive tactic
I'm ashamed to say that our tiny eBay gambit actually fails most of these principles: it is plausible but it isn't persistent (we need the competitor to think that we're losing rather than withdrawing), it has no real variety and it is standalone (there is no follow up). 

But I wonder whether there is merit in the concept though. As organisations start to embrace digital economy thinking about their portfolio they'll start to do a greater volume and a greater variety of activities in the market. To my mind this makes the idea of executing experiments designed to test your ability to deceive or mislead a competitor far more plausible. We are already seeing the most advanced companies performing repeated, learning experiments to test product - market fit (& therefore understand demand), so why not test the responses of competitors and even of governments to see how they respond to you?

We are in an age of multi-dimensional competition in which there are far more opportunities for growth than any company can possibly follow. Choosing where to invest is a challenge for every organisation. So why make it easy for your competitor? Put them off balance; see them as an actual competitor rather than an abstract object. Absolutely don't base a strategy on damaging someone else, but definitely see that as part of the plan and use lean methods to learn how to do it best.

Or maybe my forays back into portfolio strategy are making me love retro strategy too much! Perhaps this sort of thinking belongs back with RAND and the strategic management of the 1950s. Any thoughts greatly appreciated!