Are you making money the cool way, or the uncool way?

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There are two ways to generate lots of money – metaphorically, that is.

The first way is through service to the many. 

The second way is at the expense of the many.

Put simply, we need to effect lots of people to generate lots of money. The theme for both of these is the same, but the methods are very different.  The second way is through taking advantage of people – their weaknesses, their disadvantages, their social status, their education levels…. To this day, in this modern world I could still name hundreds of legal businesses which choose the second path. Ashley Madison comes to mind immediately. They are facilitating heart ache and pain for many married people. I’d put tobacco and poker machines in these categories too, while this startup, is simply immoral. Sure, they claim to be providing a service people want, but they’re really just making themselves money at the expense of others. Not cool.

The curious thing about doing business the second way, is that while they might make lots of money, they’ll never be truly ‘rich’.

You should totally read my book – The Great Fragmentation.

3 reasons global adoption of bitcoin is inevitable

Bitcoin 1

Before we start here’s a fact which is easy to forget: Currency is a form of technology.

Just like all technology, if an improved method comes along, there is a very good chance it will substitute what people where using beforehand. While it might not replace the alternatives entirely, at a minimum it will sit atop what is already being used. Another layer of technology. It is also worth remembering that new forms of currency have often arrived during a new economic age.

  • Commodity money such as Cowry Shells arrived with Barter Economies.
  • Grain Receipts during the Agricultural Era.
  • Ferris Coins during the Iron Age.
  • Bills of Exchange during the Age of Discovery.
  • Fiat Currency during the Industrial Revolution.

Now that we’ve entered the digital age, it is inevitable that a digital currency will emerge and gain mass adoption. But people make bitcoin sound more complicated than it really is. There are only 3 things you need to know as to why it (or a crypto currency) will eventually dominate global commerce.

  1. Nobody controls bitcoin. Not one person, not one organisation and not one country. It is a thing. And it is open for anyone to use it, yet nobody can change it, or alter it. It is fully distributed, via its public ledger (the block chain) and this is very unique to bitcoin. It’s also anonymous.
  2. There will never be more than 21 million bitcoins. This creates a level of scarcity and value protection that no other currency has had before. Even gold. (Gold has had a 2% extraction rate per year on average). To have enough currency, we simply divide by another decimal point.
  3. Bitcoins can be sent to anybody, in the world, in real time and for free. Up until now, this has been impossible. All forms of currency exchange up until now always needed physical transport or to trust some third party, such as a clearing house, a credit operation, a settlement house or a bank, who also skim margin. They are all inefficient and relatively expensive. Bitcoin is peer to peer.

In short bitcoin has all the things a successful currency requires. It has scarcity, durabilitydivisibilityportability, acceptance and it is quickly gaining trust. Though the last two points are where the currency needs to make some gains. It might take 10 or more years, (think back to what the internet mean to you in 1995), but it is going to do for money, what the internet did for information.

But if you’re still not convinced, here is some things worth considering: Currently 5 billion of the people on earth rely solely on cash economically and 3 billion do not even have bank accounts. A little over 1 billion people have access to credit cards, and less than 1 million merchants globally accept credit cards for payment. Most of the worlds population can’t participate in the internet economically, because of the money they use. In fact, the poor of the world are the worst effected by having cash as their primary currency. Bitcoin can reduce the risks of operating in a cash world, yet have all the benefits of cash. Close to 5 billion people will be using cell phones by the end of 2015 and in the developing world you’re more likely to have a cell phone, than a toothbrush, electricity or indoor plumbing. All anyone needs to use bitcoin is that cell phone…. this tells us what the possibilities are.

Bitcoin has a serious chance of playing Industrial Leapfrog and becoming a primary form of currency around the world – lead ironically, by the developing world. I’m not saying your should go and convert your land holdings, greenbacks, or gold bars into bitcoin, but at a minimum, anyone interested in the future, should at least pay attention, and maybe even hold some.

You should totally read my book – The Great Fragmentation.

Two simple ways to grow your startup

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The two ways to grow your startup are the same two ways to grow any business no matter how established or formative it is.

  1. Same product sold to wider range of customers.
  2. New products sold to the current customer base.

Either of these two options provide a simple strategy for growth. In addition they provide a succinct feedback loop of where our problems and opportunities are. They inform us of our Product – Market fit and tells us if it is right. The most important thing to remember though, is that it is pretty hard to do both at the same time. Trying both will just confuse us as to what is working and what isn’t.

You should totally read my book – The Great Fragmentation.

The ultimate template for business failure

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There is actually a business template for business failure, and you know what it is? The template itself. Yep, that single powerpoint sheet with the company logo in the top corner that gets sent around to the team to fill in for their upcoming budgeting, marketing or strategy planning. It tells us so much about prevailing attitudes to change and anything different.

Here’s a little story about when young Stevie (that’s me) was a brand manager at a very big consumer goods company. I don’t want to give away any names, but the company’s initials were Kraft Foods Ltd. Every time we had to do our annual brand plans, a few powerpoint pages with the company name and boxes to fill in would be sent around for us to fill in. And just like good compliant corporate citizens the brand managers all did what we were told. Brand management, a supposedly thought lead, creative, and strategic endeavour managing multi million dollar businesses got reduced to a few boxes. Sure, it was hard to have a point of view. It was nigh on impossible to point out something important which wasn’t in the template, and well, it made it easy for people to stop thinking. Call me naive, but it was not what I expected at the start of my career from a global leading firm.

This is what it comes down to to really: Whether or not they want people to think and make a serious contribution.

If we have a template for our so called thought leaders to fill in, we might as well shut the company doors now, because failure is inevitable. A template for anything strategic in an organisation (which is everything by the way – from the factory, to the brand, to the store execution) says the following:

  • We don’t want to hear your opinion
  • We care not for your creativity
  • We are too lazy to bother with another persons visual style or layout
  • We know more at the top of the company
  • We have already decided what’s important, even if you know your area better than us
  • Everything in this company should fit inside a box
  • You should do what we tell you
  • Innovation is only permitted if it occurs inside a template (figuratively & literally)

Yes, call me crazy, but companies that use templates to share, ideas and strategy, don’t really care what anyone thinks. Which is ironic at a time when new thinking is what builds startups and saves companies.

Rant over.

You should totally read my book – The Great Fragmentation.

One thing we must learn from Tinder to create a successful app

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The reason Tinder works is simple. It replicates human behaviour in the real world. The moment someone walks into a night club they look around at the faces of people and say to themselves, Yes, No, No ,Yes, No, No, No, No Yes, Yes. And the people they are looking at are doing the same thing back at them – assuming of course they are both looking to meet someone. But in the actual nightclub there is that awkward discovery process of trying to work out if the other party feels the same way. Which then becomes the business model of the nightclub – Sell people drinks for that few hours of the discovery process.

Tinder circumvents all of this. It takes what we do anyway, but makes it happen faster and on the couch, instead of at the bar. What tinder doesn’t do, is expect us to behave any differently. After all, the Human Operating System, or H-OS as I call it, is a very old one, 200,000 years plus since its most recent update. Which means that the best use of technology will be leveraging existing behaviour, not trying to change it.

Yet, another reminder that the digital world ‘is‘ the real world.

You should totally read my book – The Great Fragmentation.

The best single example of how yesterday’s decisions can kill a business today


If there is one simple example of how what was a good decision yesterday can kill a business today, then it is this. The retirement age and the old age pension:

“When the Government instituted an old age pension for retirement back in 1908, the pension kicked in at age 65. However, the life expectancy was under the age of 60.”

At the time, it was a great decision for the Government. No doubt it was popular, and easy to make the numbers work. Fast forward to today, 2015, and the life expectancy in Australia is 84.2 years for men. It’s now clear there is a problem.

The early decisions organisations make are often what sets them up for long term success. The problem is that sometimes the truth changes. Sometimes the truth on which we set our plan, strategies and even our infrastructure changes. It used to be true that most people didn’t live long past the ‘pension age’, and now it is true that peoples life in retirement could be half as long as their working life. If the government had to make the same decision today, I doubt that they’d come up with the same age to receive a pension.

Many established businesses are like this. They have built successful systems on great decisions made ‘yesterday’. Systems which include offices, staffing, manufacturing, distribution, advertising, new product development, revenue streams, most everything… And so the best question any company facing change can ask is this:

What would we do if we started today?

Why petrol cars will not exist in 10 years

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If you haven’t already realised, cars are no longer machines, but rolling computers. This also means that cars will move from being powered by fossil fuel engines to electric motors. It’s already started, and it is going to happen much more quickly than we anticipate. I’d go as far to predict that there will hardly be a petrol car on the road in 10 years. Here’s why:

When cars transition to rolling computers, the Law of Accelerating Returns applies. Innovation goes from incremental and factory-based to curve-jumping and technology-driven. You’ve probably heard of Moore’s Law – the maxim that states that computing power will double roughly every 18 months while prices halve. This maxim and many other accelerating technology laws will apply to the production of cars, laws which make the end product better and cheaper by significant degrees. The revolution which transformed smart phones, cameras, laptops, solar panels and flat screen TVs is about impact the auto industry.  Let’s take the pricing example of the Tesla Electric car range:

1st car – Tesla Roadster:  $109,000 (released 2006)

2nd car – Tesla Model S: $75,000 (released 2012)

3rd car – Tesla Model 3: $35,000 (projected – release due 2016)

Not only has each model been progressively cheaper, but also far better in terms of range (distance per battery charge), safety and features.

It’s the same pricing pattern we saw during the personal computing revolution. Here is where we get an entire curve jump. The Tesla model 3 is so cheap that an electric car is no longer a plaything for Silicon Valley types, but a viable new car option for everyone. This is because the switching costs get very close to zero. Why? Because the running costs of having a Tesla Electric car does not include the cost of petrol. (Tesla already have 453 free super charging stations and the cost to fully charge the battery at home is around $3). This means the average consumer can use their saved petrol money towards acquiring a brand new car without increasing their weekly expenditure. For example:

Model 3 Tesla

  • Cost to buy = $35,000
  • Avg petrol p.a. = $3,120
  • New funds available = 8.9% of purchase price.
  • Avg Cost new car finance = 6-7% unsecured interest rate.

When the Model 3 arrives, it only takes some creative financiers to change the landscape of the auto industry virtually overnight.

Want a new car at no cost?*

*Just give us your weekly petrol bill and drive away in a sexy new high tech Tesla!

It’s when this happens that we transition to an all-electric car world. The transition will be as swift as the smart phone – in a few short years, non-electric cars will be a lot like feature phones.

This is exactly how disruption happens. It’s not the product itself, but often the change in the business model around it which leaves industry incumbents blindsided. When there’s an opportunity for consumers to get into a superior product with low or no switching costs, they will always take it.

Buckle your seat belt.