If you’re reading this and you currently work for a company you don’t have an equity stake in – I reckon there’s a pretty good chance you’re planning your cubicle escape route. Today I wrote a post for Pollenizer on my Top 10 things employees need to know before they jump ship. The thing about entrepreneurship is that it is a change in environment. And like all new environments we enter the biggest challenges we face are never intellectual, but cultural.
You can read it here.
Evolution itself does not have a strategy. It just lets what wins, win. If anything, it is the accumulation of a lot of in market testing. Traits, (or tactics) are tested for advantage, and those that work, keep on happening through natural selection. Nature tries everything. Nature lets things that don’t work die.
We too can help our business evolve. We just need to do what nature does. That is to not pretend to know what will work. Instead we should try everything and find out what does. The good news of course, is that it’s so cheap to try so much in a low cost technology world.
There’s an interesting link between startups, technology and fashion. Any industry which is defined by rapid change and innovation has a fashion element to it. The latest hot stuff which is getting attention, the stuff the market gets excited by, the stuff that gets media attention, the stuff that gets the fanboys and fangirls writing blog posts about it. The startup and technology media is very trend related. So much so that we all know what the hot spaces to be involved in are:
Wearables, 3D printing, Web of things, Drones, Crypto currency, Crowdfunding, and those other ones I’ve left out….
Get a Kickstarter project going with one of these topics in the header and it seems like the funding job is already half done. But if we want to go deeper on this issue as entrepreneurs, then we need to pay some close attention to what happens in the fashion industry itself. Those consuming the fashion and paying attention to it or rarely those who are actually creating it. There isn’t a correlation between being up with the latest trend and ever creating one. In fact, there’s a real danger in being obsessed with what others are doing. It means we’re following, not leading. Fans by definition are always a little bit behind the game – literally. Their focus is on appreciating what has already happened. It means that there might be an inordinate amount of time spent on keeping up.
It’s easy to understand why we might feel compelled to keep up. There’s a lot of social pressure in a sharing economy – the kudos that goes with knowing about the latest thing, using it, or owning the hardware. The ‘have you seen this’ side of the technology revolution.
Will knowing who raised x amount of capital help you raise capital?
Will having the latest apps on your smartphone help you build your app?
Probably not. Probably more of a distraction from the real work we need to do. Sure, be across the market place, but obsessions with the latest trends probably means we’ll never create one ourselves.
Recently I’ve been exploring the hardware space, especially now I’m deeply involvement in Tomcar Australia – a startup which builds cars.
I’ve become more focused on what we can learn in the web / software / mobile space, and apply it to the hardware space – startups which build actual physical things or any non digital kinda startup. Turns out much of it applies, especially given the open access technology and connected society has provided. I’ve recently written a couple of posts for the good people of Pollenizer on this subject.
This post – Beyond the screen – How non software companies can out learn the competition.
and this post – Hero 1 killer feature – How GoPro came from behind the technology curve. The stuff you don’t know about how GoPro got to where it is.
I think they’re both great posts for anyone involved in non screen stuff.
In the past few weeks I’ve been in the audience a few times when some smart people have taken to the stage. The presentations were largely retail focused. As usual I took notes and thought I’d share some random soundbites from what they had to share. I haven’t got the sources for each quote, because I couldn’t write those down quick enough without losing the information. But the thing that really matters isn’t the exact figures, but the patterns they are part of:
- 10 years ago car buyers used to visit the dealership an average of 6 times before buying a new car. Now the average 1.5 times. When surveyed about the cars they bought more than 90% of buyers knew the specs in more detail than the car salesman.
- Retail Delivery Gap: Australian retailers believe their customer shopping satisfaction rates are 80%. When surveyed the actual satisfaction rates from shopper was 8%.
- There are a significant amount of retailers who are now treating the customers as employees: Airline check in – Supermarket check out. This is all fine so long as it reduces friction and increases joy. It shouldn’t be the default approach, but a considered one.
- Retailer measurement used to be all about foot traffic and transactions, now they can measure everything in between, before and after. But smart retailers will need to ensure they have permission and share the prize with those providing the data.
- Big data is a bit like teenage sex: “Everyone talks about it. No one knows how to do it, and everyone thinks everyone else is doing it, but not many actually are.” Not my quote – but made me laugh.
- Advertisers need to get ready for revised TV. A television that knows who is watching it, what they’ve bought, where they’ve been and what they car about. One that can serve up specific, permission based and relevant content for a single person. 1 to 1 television creative executions – the TV’s can already do it – but it seems no marketers can?
- The delineation between physical and digital is over – pointless and and us versus them zero sum game. The intersection is now mandatory, or even tables stages – it’s now phygital.
- People like buying stuff, but not so much paying – but the money isn’t the pain point, it is the process and the friction they hate. Sellers need to get out of the way.
- Network Survival: A network stays alive so long as it provides trust and reduces friction. What’s interesting is that friction is often reduced by routing the long way round.
- The top 12 Australian retailers have $700 billion worth of currency convertible loyalty points on hand – a giant liability, or is it an asset?
- The phone is now becoming the personal life controller. It is the new location for commerce – literally where the phone is: simple example is Uber.
- We are entering the wallet wars era. The digital wallet as spruced about by Bill Gates way back in 1995 – every tech player, bank, payment system and hardware developer is in the battle.
- Mobile payments growing at an astounding rate in e-commerce. In the past 2 years payments via mobile phone grew 57 fold in Australia alone.
- Mobile provides a leap frog opportunity. Many players who missed the first web iteration, can now disrupt the disrupters by doing an amazing job on mobile - this game is still open.
What does this tell us. Just that there is so much happening, and no matter what business we think we are in, we are all in the startup business now.
I’m a slow learner. It’s rare that I fully understand things the first time I hear about it. This might even sound ridiculous, but some things I first heard about in primary school and secondary school I’m just starting to comprehend now as a middle age man. Political, social and philosophical lessons I got front teachers, family and friends. I really think that our brains work super hard on everything, all the time, in the back ground while we are busy with the stuff of life.
I had one of these moments yesterday. I was reading this article on bitcoin, which was discussing the genius behind the Blockchain method, referring to the back end complexities and how it might provide a model for a more independent peer to peer based internet. (Well, that’s what I think it was about). The point is that half way through the article, I was like – wow, most of this stuff is way over my head – it must be for smart techie head coding types. But I read it to the end. I’ll probably read it again, and I’ll read the other articles it links to inside of it….. Maybe I’ll understand it in a few years. The point is I’ll leave that to the smart parts of my brain I don’t have personal access to – the secret bits it keeps Steve outside of. I’m sure it’ll come up with something if I leave it alone.
In complex times, this is type of situation is set to become more common. Times when our initial understanding is vague. We shouldn’t let it discourage us. We shouldn’t let it make us give up and stop reading or trying to comprehend it. What we ought do instead, is trust that what we need to know will reveal itself, so long as continue to take in the data and we are patient.
Once upon a time simple forms of industry knowledge were a significant competitive advantage. The little things we knew about our industry from working in it mattered. We had to earn expertise over long periods, and the release of that expertise to prospective customers. We traded in trade secrets. But now those days are coming to a close.
In a market where anyone can know anything about an industry (from the worlds experts) with just a few key strokes, then we need change our view on what creates an advantage. Knowledge of products, prices, places, who does what and who owns what are all knowable. We are quickly approaching a market of perfect information. And when everyone can know everything, and prices quickly level out, the only thing left is trust. And a great way to build trust is by sharing trade secrets. By being generous with our knowledge well before we want to do business with anyone. We need to share what we know so others can navigate the market and reduce their risk.
When it finally comes down to doing business, customers have a much higher probability of trusting those who gave them the most trust first.
While success is a relative term, there is a simple way to know if we’ve built something we can regard as a huge macro success. And that is when others are claiming derivative success within the platform we have created.
Examples could include:
- A top downloaded iPhone app
- X million views for a Youtube video
- A featured post about your project on Boing Boing
- Being person X on platform Y
Once someone can be regarded a success because they have used what we’ve built well, that’s when we know we’ve really changed the world.
I’ve been reviewing my notepad from 2013 and thought I’d share my insights into what’s changed and the big issues from my perspective in startups, business and technology.
Technology is no longer a thing: It’s almost not worth mentioning now it is so ensconced in human life. Business, political and social activities are intertwined in technology as an organism. Having a digital strategy is a bit like having an ‘electricity strategy’ – it’s just nonsense. In fact, if any business still delineates a part of their strategy as digital, then it’s fair to say they have no strategy at all. A terrific piece of evidence for this fact is observing how the technology and business section of the WSJ and New York Times now have a massive overlap.
Social media just is: It’s becoming a bit like general chit chat between any group of friends. A way of communicating. It doesn’t have a nuance or specificity that makes it remarkable anymore. It just is. I guess it’s now just a stage in the evolution of human communication. We could regard this as evidence of its permanence.
Anonymity is the new black: You may remember in the early commercial web era – post 1993, we all had alias names and emails before we felt comfortable enough to convert to our actual human self on line. It seems now that anonymity is back. People wanting to express themselves without it impacting their college application or next job interview. It’s been said that this helped tumblr, and is a large part of Snapchats appeal. As privacy gets eroded through government activity we can expect a lot more anonymous forums to emerge as powerful web platforms. Another outcome is the potentiality for privacy to become a serious luxury going forward.
Email & text on the comeback trail: The inbox has made a comeback for me. This year I signed up to a number of email newsletters which provided a haven of curation in my areas of interest. It might also be that my email address is mine, where social media has the who owns this data issue hanging over it. I also reverted to more text / SMS activity which would’ve been the only domain for my social media a couple of years ago. I think this was facilitated by improved video and photo output of smart phones, the direct & personal nature of people we share with phone to phone. Also the up weighting of data allowances on mobile phone from carriers.
Device equilibrium: All devices are merging to a kind of functionality equilibrium. Phablet anyone? It does seem as though all tech devices can perform much the same function. Now the only differentiator is size preference and UX.
Still waiting for wearables: It feels like we are in early 2000′s phase for smart phones when it comes to wearable computing. We all know we want it, we all know it is inevitable, but no one has quite nailed the technology output yet. Google Glass is the clear front runner, but no one has launched anything yet which has captured the ‘iPhone’ this changes everything moment. Here’s hoping for 2014.
We of things: See above – insert web of things.
The geo layer: Doesn’t seem to me like it can be a point of difference for any web related startup or brand. Foursqaure and others may have missed their chance. It’s a lot like digital now and just exists as an invisible layer on all our output. A vital component to making sense in a technology world, but omnipresent simple and expected.
Long reads: The deminishing returns of news and immediate communication are helping long thoughtful analysis make a comeback. The startup Medium.com seems exciting and longer posts which consider the implications of rapid change are capturing more of my time these days.
Tech valuations & bubblenomics: Crazy company valuations continue to astound. We are absolutely in another technology bubble, this time it is a valuation bubble, rather than an investment boom. I was talking with Nic Hodges about the $3 billion+ valuation of Pinterest proposing that they are like a shopping centre of sorts – a Westfield maybe? His retort was classic. He said:
Westfield owns $20 billion worth of property. What Pinterest owns is some code.
It seems that everyone forgets that valuations must be a function of earnings, or expected future earnings. Here’s a question worth asking when it comes to the true worth of any company. What would you rather own:
Apple stock at a 14 times price earnings ratio?
Facebook at a 141 times price earnings ratio?
Do you really think Facebook will be 10 times more profitable than it is now or any time soon? Or that Snapchat with an infinity price earnings ratio (zero earnings on $3.2b valuation) will ever make serious money? There is a very big difference between usage utility and commercial value.
There’s a reason why Warren Buffet has been in the top 2 richest people in the world for the past 30 years – he knows what companies are actually worth. And there’s a reason why many famous VC’s are rich – they are selling you sausages at caviar prices. It seems the real money in technology stocks is made when the founders exit, not when investors buy it.
So – what did you guys notice in 2013?
With so much information abundance, it takes a certain skill in knowing what to know. Many emerging trends and changes in our economy and social structures are vital points of knowledge. We need to know them intimately, know how to use the technology and have a detailed domain expertise or we’ll miss out in a business or social context. But many things, maybe even most things, knowing about them is enough. Simply knowing it exists, that people like and engage in it, and why they like and engage in it will get us through:
- Angry birds
- Candy Crush
- Reality TV
- Most news
- Any ‘down time’ activity…
If we’re across the motivations, the technology and the sociology, then it’s highly likely we wont get caught short by not having a personal interaction with it. Unless of course, it is related to what we actually do for a living. This is the key point, knowing which domains are worth us investing our time in to understand.
In a world of infinite expansion and choice where we can’t try or participate in everything, knowing what to ignore is an art form. If it feels disposable, then it is probably not deserving of our bandwidth.