Thiel's Zero To One: Are All Entrepreneurs Pioneers?

Constellation Orbits
Marketer & Storyteller

Anurag Wadehra has led marketing at several private and public software companies in the technology areas of mobile, eCommerce, advertising and data management: such as at LivePerson (LPSN) and Siperian (acquired by Informatica INFA) among others. Prior to that, Anurag was CEO & Co-founder of Chingari, a software company designed to help businesses improve success rates of new product launches. Additionally, he served in senior marketing positions at Kraft Foods and Procter & Gamble. Anurag has an MBA from the University of Chicago and B.Tech in Electrical Engineering from the Indian Institute of Technology. He is a lead mentor at Stanford's accelerator StartX and an avid film buff. ...

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In his manifesto Zero to One, Peter Thiel laments this simple fact about technology startups: most firms are not innovative enough. 

 

Most technology companies innovate through what he calls "horizontal progress” where an innovation, once created, is expanded to new domains, markets and niches. He calls this 1 to n progress: going from something that already exists to something more, better or different. In his view, most companies usually start with modest ambition to solve a narrow problem and grow through iteratively discovering different pathways by working closely with customers. This approach is commonly advocated by a few popular methods like Eric Reis' the lean startup and Steve Blank's customer development model of innovation. 

 

Thiel is not against this horizontal progress, but he does not consider this category of innovation transformative. His focus is on creating innovative companies that solve truly hard problems through technology. Companies that create entirely new industries or radically alter existing ones. His poster children for such companies are Google, Facebook, Apple, eBay, PayPal and Tesla. He calls this category of innovation “vertical progress”, going from 0 to 1 - from nothing to something. 

 

In Thiel's view, most entrepreneurs today simply emulate an already proven idea and expand it from one realm to another. Indeed, there may be many realms of expansion, such as across geography (Baidu copied Google in China); across segments (e.g. Facebook spawned social media companies for enterprises like Jive and Yammer); and across business functions (Salesforce success prompted hosted software for HR such as WorkDay). 

 

Most of such expansions rely on major innovations already in place. Today, new companies acquire customers through paid search by Google, gain visibility by social advertising through Facebook, engage users with mobile apps which are distributed by devices and app stores of Apple & Google. Even in business software, companies are built on top of the new cloud-based storage, data and infrastructure technologies such as Amazon AWS. In summary, Thiel contends that most entrepreneurs are innovating on the margins. They are playing variations of themes established by others. 

 

His book is a call to arms for entrepreneurs to dream big and for all of us to support a culture that celebrates the bold visionary, the risk taker, the game changer, in short: the pioneer. His contention is that, as a culture, we have forgotten how to dream big. We have settled for the incremental, the safe and the sure; we hedge our bets even before we place them; we worry and regulate before we explore. 

I find this contrast of pioneers versus mere entrepreneurs to be very insightful. However, this is likely to be misunderstood in popular lore. Here is why: many people assume that these two types of innovation are at odds with each other. 

In setting up his thesis, Thiel downplays an obvious truth: most new products in the world are variations on a theme. It’s true that the “vertical" innovation gets created by a few pioneers and prime movers like Bezos, Musk, Jobs, Gates, Zuckerberg, etc. We rightly admire their visions and contributions. In technology, every major seismic shift produces a pioneering company (microprocessor, Intel; desktop software, Microsoft; online commerce, Amazon; search, Google; social, Facebook; database, Oracle; to name a few). Thiel captures that eloquently in his discussion of the power law. However, for every one of these companies, there are hundred others that grow around the core innovation to bring its full potential to market, and in some cases, even threatening the major player in the long run. There is a market need for both the handful of entrepreneurs who are pioneers of new businesses and the rest of successful entrepreneurs who support, extend, ferret out and apply these innovations in all the other niches and markets. There is no conflict between these two types of innovations - one feeds the other - or the two kinds of innovators - the pioneers and the rest of the entrepreneurs who support them. 

Thiel omits this effect because his cri du coeur is to wish for more inventors, pioneers and bold creators. I agree wholeheartedly with his plea that we need more pioneers who send rockets to planets, create cheap and sustainable energy and increase our life spans by decades. It is also clear that his cultural exhortation to dream big needs to be brought center stage, applauded and celebrated. The truth still remains that most entrepreneurs are not pioneers: most spend their life building companies which are deemed variations on a theme. Billion dollar companies are being spawned right now by successful and passionate entrepreneurs who expand upon existing technologies, such as mobile devices, storage, cloud computing and social media. The risk of Thiel's omission is that it may deter many entrepreneurs to pursue and create companies that extend existing innovations.

We may lament the lack of "vertical" innovations from bold pioneers but we need to have all kinds of entrepreneurs to fuel our economy and deliver on the full vision of the brilliant few. 

Internet of Things – No, it’s the Internet of Services

Andy Mulholland

Vice President and Principal Analyst, Constellation Research
Constellation Research

Andy Mulholland is Vice President and Principal Analyst focusing on cloud business models. Formerly the Global Chief Technology Officer for the Capgemini Group from 2001 to 2011, Mulholland successfully led the organization through a period of mass disruption. Mulholland brings this experience to Constellation’s clients seeking to understand how Digital Business models will be built and deployed in conjunction with existing IT systems. Coverage Areas Consumerization of IT & The New C-Suite: BYOD, Internet of Things, IoT, technology and business use Previous experience: Mulholland co authored four major books that chronicled the change and its impact on Enterprises starting in 2006 with the well-recognised book ‘Mashup Corporations’ with Chris Thomas of Intel. This was followed in…...

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Right now your home is well on its way to becoming a ‘Service’ that supports your life style. Sure, this is done through a number of Internet of Things, IoT, devices, but individually as ‘things’ they don’t add the same value as they do collectively as a ‘service’. In fact its arguable as individual ‘things’ they add confusion and complexity, whereas integrated together they provide simplicity and value as to how well your home can support your lifestyle.

Research report now available: The Foundational Elements for the Internet of Things (IoT)

Ever come home to a cold home because you changed your plans? Or been delayed and come home to find the heating is on burning expensive power according to the pre set time clock? Your home should be adaptive, and agile, capable of supporting your lifestyle, in short it should be working as a ‘Service’ to support your lifestyle. Not as a collection of IoT devices that have to be individual accessed and read.

There are several companies providing remote access and sensing to manage the furnace, or boiler, others provide remote management of alarms, or video to check out rooms, and an ever-growing list of other ‘things’. All from your Smart Phone, or Tablet, with its own list of Internet enabled Apps to control devices as diverse as remote control of yard, or garden, irrigation. You can even be ‘virtually at home’ by being able to watch a home TV program from your hotel room in another country, etc.

Once again it’s the consumers and their use of consumer technology that is driving the pace! BUT its not the ‘Things’ that are providing the value individually, it’s the integration of a number of IoT Devices into ‘Services’ that comprehensively answer a particular requirement area.

It’s simply not practical to have each, and every device, even if grouped under headings such as temperature management, or alarm management, as a separate set of ‘things’. If each set of IoT devices require screen space, and memory, for access, and use, on a Smart Phone, or even the bigger screen of a Phablet, or Tablet, that’s difficult. Add the challenge of then taking action through another App, and it’s next to impossible. Currently there are two possibilities; the first is that the consumer, or user, finds and makes use of a ‘Service Manager’, and the second is a major home supplier, such as an energy utility, introduces a ‘Service’ with added value from other aspects of its business or data).

As an example of the consumer using their own Service Manager the the App If Not This Then That, INTTT, is a example to use to describe the ability to link up IoT sensing with automation of responses. INTTT uses ‘triggers’, inputs from IoT devices, with scripts called ‘recipes’ to provide the predetermined automation of responses. A colleague has used INTTT to build the following; On leaving his place of work within a certain time period, an SMS is sent to his working wife stating that he (at least) is leaving for home, at work his ‘Out of Office’ message is turned on, whilst at Home the heating is turned on. The same user has built other ‘recipes’ to control arriving at work, (be great in a smart building or city to be able to reserve parking!), or an device providing a triggering alarm bring up a recipe for sending messages, turning on home cameras, etc.

In parallel, and in what should be a thought provoking move, his social media connections record the shift from ‘work mode’ to ‘home mode’ and allow home based social interactions to start. Why, thought provoking? Because the teaming of triggers from the IoT based Service into the Social Media Services is reflective of an important development in how Digital Business is likely to develop.

A successful Digital Business will need to combine ‘awareness’ of events from IoT with ‘social media’ interactions to understand opportunities arising in the market place.

INTTT is a good example of a generic ‘service’ manager that can be used to create Internet ‘Services’ from IoT devices in any number of scenarios in business as well as for consumers. Limiting the scope to just ‘Home Automation’, introduces a number of players with established integrated technology products for ‘operating’ a home, however that doesn’t necessarily make them part of this new marketplace. The original definition of Home Automation (as with smart buildings) focused on a computer within the home managing the various aspects. The arrival of IoT based devices has dramatically changed this into an Internet based environment using Mobility and Cloud technology to develop a radically new form of Home Automation packaged as ‘Internet of Services’.

The ability to choose how to manage your home as an Internet based ‘Service’ that both senses, and responses, to your lifestyle rather than as a set of disparate connected IoT ‘Things’ is now a reality for many consumers. Consumers once again proving to be the driving force in adoption in the shift from ‘Internet of Things’ to integration with added value by the ‘Internet of Services’.

The smarter Utility suppliers see IoT with Big Data technology as an opportunity for them to repackage their offerings into ‘Services’ increased their interactions and relationship with their customers through adding new value. (Not to be confused with much of the hype around Smart Meters). In the UK British Gas, the dominant supplier, but facing heavy completion in a deregulated market, offers its customers for a modest sum of a little over $120, a remote management package for controlling the Furnace, or boiler called ‘Hive’. The functionality of Hive is currently pretty low, but the low installed cost, the simplicity of use via a Smart Phone, and the real advantage it offers, have combined to win a substantial number of customers.

The technical details cover a number of sensors and operating control devices linked in the home via the wireless WiFi hub; then over the external Internet to a British Gas Cloud based hub, or server. Here the data is collected and collated before being fed over the Internet, or 3G, to the users SmartPhone, via a downloaded App. It is therefore a genuine IoT based installation using Mobility and Cloud in addition and has no requirement for a central computer in the home as with older forms of Home Automation. The customer does not own any of the components, but is provided with a free ‘Service’ of remote control together with a monthly review on the details of their use of energy, including anonymous data as a comparison with other users running the same installation.

For British Gas the ‘Hive’ ‘Service’ provides real time data covering all aspects their customers use of energy from temperatures required at different times of day, furnace/boiler use and efficiency, and much more that directly feeds their planning and supply operations. Marketing not only gain hugely valuable data on their customers but in addition have direct access to the customers via their mobile devices right at the time when they provide valuable information and tips on more efficient use of expensive energy.

British Gas uses IoT with Mobility and Cloud to supply a value adding Service that changes their relationship with the customer and allows both to gain value through the Smart Data the Hive Internet Service delivers. A prime example of how IoT used well as a value creating service is a competitive game changer.

Introducing the phrase Game Change also reminds how the cost of IoT today provides a game change as to how widely previous good practice for the level that ‘Services’ have been practiced. Sensing and monitoring on high value items such as aircraft engines has been used for some years under the name of ‘Power by the Hour’. Instead of selling the engine, and hopefully a maintenance plan, the manufacturer offers the use of the engine paid for at a specified rate per hour of operation. Usually this includes an uptime guarantees all of which make the ability to read and react to the condition of the engine and the manner it is being used (abused) critical.

‘Power by the Hour’ is an excellent example of an industry shift to the Services based Operational Expenditure, OpEx, Digital Business model, away from the traditional Capital Expenditure, CapEx, business model with its large capital requirements. The need to tie up scarce, expensive capital in the purchasing of engines, a stock of spares, and to cover unplanned operational down time and repair bills is removed and replaced by operational expenditure on the Service.

Sensors, and sensing using older, and more expensive, forms that predate IoT are clearly the enablers of these well-established ‘Service’ business models, albeit only possible in extreme high value market sectors. Now IoT sensors at a few dollars a time connected through the ubiquitous Internet offer similar capabilities at a fraction of the cost, it’s truly a game changing moment. But the big point to grasp is what creates the value is the ‘Service’ with its value created by the addition of Data. The difference between the home consumer constructing their own home Service manager with INTTT, and the British Gas Hive Service is the incorporation of British Gas owned Data to create a value added Service. It’s the same for the engine manufacturer responding to the real-time ‘trigger’ events by combined the IoT real-time data with their own legacy data to create a unique capability under pinning the Service.

A thousand IoT ‘things’ might provide, or add to, the mountain of Big Data, but to create Services with real value to a user means hiding the Internet of Things complexity, and substituting an Internet of Services that focuses on and delivers the required business value from the Internet of Things by incorporating valuable information.

Big Data is getting to a point on its hype cycle when the question ‘where next with Big Data’ is being asked, and to some degree there is an answer in the recent blog ‘Turning Big Data upside down into Smart Data’. The reality is that real-time data ‘triggers’ will drive the need to find and transform much of the knowledge an Enterprise holds in its own Big Data into the well structured responses as in ‘sense and respond’. Much is spoken on the transformation to the Service Economy and Digital Business; the role of Big Data at the center, usually linked to Social Media, but much less to the hard facts of what a Service really contains and what ‘triggers’ its value.

The realization that it is the Internet of Things that ‘senses’ and that is linked to responses through value creating ‘Services’ seems slow to be realized, probably because Internet of Things growth has not yet hit the IT department. Most important of all is the realization that Digital Businesses will be competing in an ‘Internet of Services’ that use Big Data as a significant of an Enterprise’s ability to use its acquired experience for competitive advantage.

Research report now available: The Foundational Elements for the Internet of Things (IoT)

Why Clients Really Fire Agencies-And other insights from the SoDA Report

Gavin Heaton

Founder
Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. ...

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No matter whether there is a change in CMO or marketing director or whether it’s time for a review, agency management can be an emotional challenge. Over years of collaboration, organisations build collaborative ways of working together – processes, systems and tools become intertwined. People become friends. Colleagues. Even partners. So what really happens when a client fires an agency? Darren Woolley has an answer that may surprise you.

As Founder and CEO of TrinityP3, Woolley has a particular view on how and why the client-agency comes undone. “The sum of the parts equal an underlying whole … which is they no longer feel the love and commitment”. The challenge, however, is that this is an emotional response to a situation, but the business focus remains on the work being performed. As a result, the agency may respond to the client’s feedback technically or creatively while not addressing the client’s feelings of dissatisfaction. This is a recipe for disaster.

In his chapter for the SoDA Report on Digital Marketing, Woolley goes into more detail, suggesting that there are four critical junctures for the relationship:

1. When a new marketing leader is appointed – it’s review time, so the focus on rapid relationship building is essential
2. Before the honeymoon ends – don’t wait until the goodwill is gone, start proactive account management from day 1
3. Quiet periods – the challenge is to remain visible, provide value but don’t appear to be wasting time and money
4. Performance pressure – when the work is underperforming, tensions are bound to arise.

Navigating the professional and emotional tightrope is always challenging. But going that extra mile really never hurt any relationship.

The SoDA Report’s Digital Marketing Outlook is a great snapshot of the industry. Covering topics from the modern marketer to technology, with a couple of handy case studies thrown in, it’s a fantastic resource to inspire your 2015 planning.

Next Generation Online Holiday Sales Customer Experience Trends

Vice President and Principal Analyst, Constellation Research
Constellation Research

Role: Vice President and Principal Analyst focusing on the IOT of Customer Experience and how the cloud is driving more flexible, agile, and robust customer service and customer experiences. In-app or in device customer service is the future. Coverage Areas: Next Generation Customer, Digital Marketing Transformation Bio: As a Vice President and Principal Analyst at Constellation Research, Inc, Petouhoff works with Fortune 100 and 500’s Senior Leadership teams to create strategic customer experience (marketing, sales and service) solutions which engage customers, build brands and grow businesses. Combining her experience as a former Forrester software analyst, PWC systems integrator and change management consultant, Petouhoff leads executive workshops to discuss to not only…...

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Wondering what consumers were interested in this year? Wondering what the top gift was? How many millions or billions of dollars of products were bought and where? How social networks played into the shopping equation? This post provides data on all of these topics and more. Adobe released its 2014 Digital Index Online Shopping data for the holiday season. Between November 1 and November 28, $32 billion have been spent online. That is 14 percent more than in 2013. Thanksgiving Day and Black Friday set new sales records with $1.33 billion and $2.4 billion, respectively.

When people talk about sleeping with their phones, it seems that the trend is continuing as mobile devices continue to play a dominant role. For the first time smartphones nearly doubled their share of total online sales on both days. November 11 (“Singles’ Day”) set a new sales record with $1.29 billion and is expected to surpass Cyber Monday in growth this year. The average order value for sales coming directly from a social network was led by Facebook with $114.45.

Wondering how the data was collected? The findings are based on the analysis of aggregated and anonymous data of more than 350 million visits to 4,500 retail websites. More than $7 out of $10 spent online with the top 500 U.S. retailers were measured by Adobe Marketing Cloud. Measuring this amount of data puts Adobe in a unique position to possibly deliver highly accurate, census-based online sales totals, pricing and product availability trends as well as other retail data.

For those companies that want and need this type of data to provide better and next generation customer experiences, this type of data is really important. Companies need to see where their customers are and where and how they make their purchase decisions. Some of the trends that Adobe was looking at are as follows:

• Total Online Spend: Consumers spent $32 billion online so far this season, a 14 percent growth year-over-year (YoY). Both Thanksgiving Day and Black Friday saw double-digit growth in online sales, 25 and 24 percent respectively. The increase in sales was driven by brick-and-click retailers, who saw the biggest jump YoY with nearly 30 percent. Online sales conversions also improved. 3.2 percent of visits resulted in a completed shopping cart, up from 3.14 percent in 2013. The average order value was $149 on Thanksgiving Day, and $142 on Black Friday. The number of people choosing to order online and pickup in-store rose to 45 percent above normal on Thanksgiving Day.

• Mobile Trends: Smartphones and tablets continued to drive online sales. 29 percent of sales on Thanksgiving Day came from mobile devices, up from 21 percent in 2013. Mobile devices drove 27 percent of sales on Black Friday, three percent more than last year. The share for smartphones rose to 13 percent and almost doubled compared to seven percent last year. The share for tablets only increased slightly to 16 percent from 14 percent in 2013. iOS users drove four times as much mobile sales revenue as Android users, 79 and 21 percent respectively.

• Best Deals: Between Sunday and Monday before Thanksgiving the average online price fell 5.5 percent, 0.5 percent more than forecasted, representing the highest price drop in a single day in 2014. Thanksgiving Day saw the lowest prices online with an average discount of 25.2 percent, 1.2 percent lower than in 2013.

• Impact of Social Networks: The average order value (AOV) for sales coming directly from social networks was led by Facebook with $114.45. Pinterest came in second with $93.20, and Twitter drove online sales of $90.74 on average. Pinterest saw the largest YoY increase in AOV, up 16 percent. Facebook (seven percent) and Twitter (five percent) also saw slight increases. Two percent ($74.6 million) of purchases came directly from social media sites, which is flat compared to 2013.

• Singles’ Day Surprise: For the first time, Singles’ Day let U.S. retailers start the holiday shopping season earlier this year. Online sales on November 11 set a new record with $1.29 billion, a 16 percent YoY increase, and close to online sales on Thanksgiving with $1.33 Billion. Singles’ Day is expected to grow faster than Cyber Monday and become one of the top five days with the lowest online prices this season.

• Top Gifts: Social media buzz continued to be an early indicator for top gifts. 4K TVs saw the biggest jump in social buzz month-over-month (MoM) with social media mentions for Sony and Samsung increasing 350 percent. Fitbit led the wearable device category, which had 100,000 social mentions on Thanksgiving and Black Friday while iPhone 6 continued to lead in the smartphone category.

“Consumer use of larger screen smartphones helped drive significant increases in mobile online sales – enough to set records two days in a row,” said Tamara Gaffney, principal analyst, Adobe Digital Index.

This type of data and its use- meaning not just data but insights that are business actionable-  are what will make next generation customer experience rock in the coming years. It will be interesting to see how many companies really begin to use “big data” and analytics in ways that end up helping companies gain and retain their customers.

@drnatalie

VP and Principal Analyst, Covering Marketing, Sales and Service To Deliver Great Customer Experiences

Constellation Research

Where Do Conferences Make Their Money and Should Brands Invest?

Partner, Sensei Marketing
Partner, Sensei Marketing

Sales & marketing veteran with almost 30 years’ experience and now 1800 digital projects to his credit for clients including Morgan Stanley, AOL, Hyatt Gaming Management, Snyder's of Hanover, Hitachi, the Home Depot, Kraft Foods, Drees Homes, American Idol, and hundreds more, including leading agencies around the North America.     ...

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We’re often amazed at the number of trade shows and industry conferences that occur across the country every day, and the number of new conferences that seem to pop up monthly. It seems there are more events than potential customers.

The sheer volume of available events makes it that much more difficult for businesses to plan event budgets or even choose which shows to participate in. When a decision has been made to participate, does the business sponsor the event or invest in exhibit spaces (supply and man a trade show booth)?

According to a recent study by Exhibit Surveys and Lippman Connects, the event business is alive and well. 63% of trade show professionals surveyed indicated that they’ve tracked an increase in exhibit space sales; almost 50% have reported an increase in sponsorship sales.

Interestingly, event producers report that a majority of their revenue comes from the sale of exhibit space, not sponsorship sales. 50% of their revenue was attributed to exhibit space revenue, whereas sponsorships represented only 16% and attendee ticket sales made up the balance.

 Sponsor Satisfaction Seems to Run High

The increase in spending on trade shows would indicate confidence in the return on investment businesses are receiving from this spending. This assumption is confirmed in a study conducted by the Association of National Advertisers that reports 62% of client-side marketers are “satisfied with their ability to measure the return on investment (ROI) of sponsorship and event marketing initiatives.”  When asked about their satisfaction with their ability to measure return on objectives (ROO), 68% responded “at least somewhat satisfied.”

Of course, that does leave a rather significant percentage of marketers who are unsatisfied with the results of their event participation. 23% say they are not very satisfied with the ROI generated from trade show promotions and 32% state they’re dissatisfied with their ROO results.

What Are Marketers Measuring and Are They Happy?

All marketers have their own set of metrics, which they use to plan tactics and from which to report results. The ANA study determined a common set of metrics used to justify marketing expenditure which, surprisingly, was topped by “amount of media exposure generated and “social media buzz” (70% each).

What’s surprising to us here at Sensei is the fact that brand awareness and media exposure, not qualified leads generated or sales closed, were the top ranking qualifiers of success when it comes to reporting metrics.  “Leads generated” was 6^th on the list (59%); however, we question what that percentage would have been if the metric listed was “qualified leads generated.”

Ironically, when asked what metrics marketers found most valuable in measuring the effectiveness of sponsorships/event marketing initiatives, the number-one answer was “product or service sales.”  This would indicate that marketers are still reporting media awareness as their success measure because they don’t know how or are not yet generating actual sales from these initiatives.

Quality leads are still the holy grail of trade show marketing, yet achieving themremains elusive to most. This might be the reason that almost half of all event producers in the Exhibit Surveys/Lippman Connects survey indicated that they were discounting sponsorship, advertising, and exhibition space fees (44%, 42%, and 39% respectively).  While exhibit and sponsorship revenues may be up for these events, at what cost is the increase achieved and to what end for the marketers?  What is your experience with trade show marketing?

Sensei Debates

What’s the value of sponsorship/event marketing: Sales or awareness?

Are sales a realistic measure of sponsorship/event marketing?

Sam Fiorella
Feed Your Community, Not Your Ego

The post Where Do Conferences Make Their Money and Should Brands Invest? appeared first on Sensei Marketing.

Facebook Charts the Course to 2025

Gavin Heaton

Founder
Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. ...

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Strong third quarter earnings were posted by Facebook this week, but CEO Mark Zuckerberg set the stage for a year of investment ahead, with a ten year horizon. Facebook’s expenses are expected to grow between 50% and 70% next year, and the company looks set to not only aggressively scale its various app based technologies, but also recruit the best and brightest talent.

With almost 8400 employees, Facebook has grown 44% since last year. As CFO Dave Wehner explained:

… we’re investing where we think there is a great opportunity for long-term growth and that’s going to be really investing and continuing to grow the talent base of the Company. So, we’re investing in the people and that’s a big part of it.

On the user side, Facebook reports that over 1.35 billion people use the social network each month with 64% logging in daily.  On mobile – yes mobile – 703 million people login daily – signalling a massive 40% growth since last year.

Not content to simply keep pace, Facebook are pushing ahead with a substantial technology investment planned. The plan with 3, 5 and 10 year horizons is for Facebook to develop and grow multiple products to scale ahead of monetisation. On that agenda are WhatsApp, Messenger, Search, Video, NewsFeed, Oculus and Instagram.

Interestingly enough, for the majority of its social network users, Facebook is a single, broad product, with an abundance of features spooling kraken-like into our digital experiences. The push to hive off products across the social network platform (like the recently calved Messenger), however, signal a more strategic understanding of both the business opportunity and the audience behaviours.

With a core platform providing a consistency of experience, Facebook is well placed to aggressively invest in a next generation computing platform – based on augmented reality and Oculus. However, there are significant hurdles to overcome, even with a 10 year horizon. And that heavy investment will need to be focused around transforming the ungainly augmented reality hardware that limits the broad appeal of Oculus in order to avoid a fate similar to Google’s ill-conceived Glass.

Leaving that aside, Zuckerberg’s understanding of audience and scale and the commercial approach to technology and monetisation underpins both the investments and the product strategy. Turning his attention to Search and News Feed, he explained:

Some of the things like Search and some of these other products, this may sound a little ridiculous to say, but for us, products don’t really get that interesting to turn into businesses until they have about a 1 billion people using them. And so for Facebook, we’re there with News Feed and that’s why in the near term our priority is really around continuing to grow and serve that community and making sure that the business around News Feed and those mobile ads fully reach their potential. [my emphasis.]

Throwing these large numbers around seems trite until we break it down. Thinking through platforms at scale – with 1000 million people as a user base for several products at a time – means operating at a scale that few of us can imagine. In Zuckerberg’s own words:

But I do think that this is such a big opportunity ahead of us. I can’t think of that many other companies or products that have multiple lines of products that are on track to reach and connect 1 billion that have a clear path of how we can turn them into a business.

The path to 2025 has been laid out – and it looks like quite a journey ahead. But looking back to 2005 I could hardly imagine the 2015 we have in front of us. I’m guessing Facebook’s investors are consulting their psychics and calling on their resident futurists. And well they might, there’s certainly a lot at stake.

You can read the full transcript of the earnings call on SeekingAlpha.com.

The Surprising Truth about Transforming the Customer Experience with Digital

Gavin Heaton

Founder
Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. ...

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Are your employees doing the right thing? Are your teams empowered to make the right decision for your customers? At the Constellation  Research Connected Enterprise conference, moderator, Esteban Kolsky, Board of Advisor, Constellation Research, grilled a panel of customer experience innovators on just how “digital” was transforming the customer experience.

The panel included:

• Dan Steinman, Chief Customer Officer, Gainsight
• George Wright, Senior Vice President and General Manager, Thunderhead
• Howard Tarnoff, Senior Vice President, Ceridian
• Dave Pennington, Principal, Business Strategy, Microsoft.

It’s a great, short video with a few surprises. Some of my favourite quotes:

• There’s no such thing as a sales process – there’s only a buying experience
• It’s time for marketing to shut up
• What’s the next disruptive thing? It’s engagement
• The days of the check-in call are over
• It’s not all about the data
• Engagement doesn’t mean offer management

The Surprising Truth

But the most interesting thing to me was the focus on culture. We see it over and over again – and it is the most difficult challenge for organisations. While you can buy technology, you can’t buy the hearts, minds and engaged focus of your employees.

And while they may have all the customer data ever needed, without the right focus, support and attitude, you still won’t get the sale.

Need to harmonise your approach? Or bring technology and people together? We can help.

Three Newsletters for Digital Leaders

Gavin Heaton

Founder
Disruptors Co

Gavin is the Founder of Disruptors Co, one of Australia’s leading independent strategy and innovation companies. Gavin advises firms on strategy, marketing, product development and innovation. He is also a member of the Orbits program, the influencer network of award winning analyst and advisory firm, Constellation Research. Gavin advises boards and leadership on innovation strategy, marketing, data-driven product development and corporate venturing. Gavin is on the board of Vibewire, a youth-led social enterprise based in Sydney, Australia and on the Technology Advisory Group for Good2Give – the workplace giving platform. ...

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As much as we write about the end of this or the end of that, one consistent form of communication that refuses to die, is email. Love it or hate it, newsletters and the like continue to go from strength to strength.

And there is nothing more telling about the role of email than when some of the most innovative digital thinkers start their own newsletters. Over the last few months, newsletters, not blogs or podcasts, have been started by at least three digital leaders that should be on your must-read list (or at least in your “Primary” Gmail tab). These are:

• Rosie & Faris’ Strands of Genius: Part business diary, part link collection, this newsletter by Rosie Yakob and Faris Yakob has a particular advertising and innovation focus that is hard to find. It is peppered with the dynamic duos’ personal sayings, interesting perspectives, and content that favours insight over statistics (though there are plenty of both).
• Kris Hoet’s Warped: A weekly curated email featuring the best ideas, trends and awesomeness from the previous seven days. Kris keeps an eye on innovation and trends emanating from Europe.
• Dave Phillip’s Work Study Dad: Short and sharp – Dave’s Five Things newsletter focuses on social media marketing and culture and contains only five links to items worth reading.
• Natural Disruption: The newsletter from our Disruptor’s Handbook team keeping you up-tod-ate with disruptive trends, technology and ideas.

And yes, I know that makes four. Make some room in your inbox for all of them

84% Of Enterprises See Big Data Analytics Changing Their Industries’ Competitive Landscapes In The Next Year

87% of enterprises believe Big Data analytics will redefine the competitive landscape of their industries within the next three years. 89% believe that companies that do not adopt a Big Data analytics strategy in the next year risk losing market share and momentum.

These and other key findings are from a Accenture and General Electric study published this month on how the combination of Big Data analytics and the Internet of Things (IoT) are redefining the competitive landscape of entire industries. Accenture and GE define the Industrial Internet as the use of sensor, software, machine-to-machine learning and other technologies to gather and analyze data from physical objects or other large data streams, and then use those analyses to manage operations and in some cases to offer new, valued-added services.

Big Data Analytics Now Seen As Essential For Competitive Growth

The Industrial Internet is projected to be worth $500B in worldwide spending by 2020, taking into account hardware, software and services sales according to Wikibon and previously published research from General Electric. This finding and others can be found on the home page of the Accenture and GE study here: How the Industrial Internet is Changing the Competitive Landscape of Industries.

The study also shows that many enterprises are investing the majority of their time in analysis (36%) and just 13% are using Big Data analytics to predict outcomes, and only 16% using their analytics applications to optimize processes and strategies. Moving beyond analysis to predictive analytics and optimization is the upside potential the majority of the C-level respondents see as essential to staying competitive in their industries in the future.

A summary of results and the methodology used are downloadable in PDF form (free, no opt in) from this link: Industrial Internet Insights Report For 2015.

Key take-aways from the study include the following:

• 73% of companies are already investing more than 20% of their overall technology budget on Big Data analytics, and just over two in ten are investing more than 30%. 76% of executives expect spending levels to increase. The following graphic illustrates these results:

• Big Data analytics has quickly become the highest priority for aviation (61%), wind (45%) and manufacturing (42%) companies.  The following graphic provides insights into the relative level of importance of Big Data analytics relative to other priorities in the enterprises interviewed in the study:

• 74% of enterprises say that their main competitors are already using Big Data analytics to successfully differentiate their competitive strengths with clients, the media, and investors. 93% of enterprises are seeing new competitors in their market using Big Data analytics as a key differentiation strategy.  The single greatest risk enterprises see from not implementing a Big Data strategy is that competitors will gain market share at their expense.  Please see the following graphic for a comparison of the risks of not implementing Big Data strategy.

• 65% of enterprises are focused on monitoring assets to identify operating issues for more proactive maintenance. 58% report having capabilities such as connecting equipment to collect operating data and analyzing the data to produce insights. The following graphic provides an overview of Big Data monitoring survey results:

• Increasing profitability (60%), gaining a competitive advantage (57%) and improving environmental safety and emissions compliance (55%) are the three highest industry priorities according to the survey. The following table provides an analysis of the top business priorities by industry for the next three years with the shaded areas indicating the highest-ranked priorities by industry:

• The top three challenges enterprises face in implementing Big Data initiatives include the following: system barriers between departments prevent collection and correlation of data for maximum impact (36%); security concerns are impacting enterprises’ ability to implement a wide-scale Big Data initiative (35%); and  consolidation of disparate data and being able to use the resulting data store (29%), third. The following graphic provides an overview of the top three challenges organizations face in implementing Big Data initiatives:

Happy 25th Birthday Lotus Notes

Alan Lepofsky

Vice President & Principal Analyst
Constellation Research

Alan Lepofsky - VP and Principal Analyst, Constellation Research. With almost two decades of experience in the collaboration software industry, Lepofsky helps organizations improve the way their employees work together to get their jobs done. Lepofsky’s primary research area The Future of Work, focuses on: integrating collaboration and business processes (Purposeful Collaboration), structuring work via Social Task Management, leveraging analytics and digital assistants to work more productively, the strategic impact of mobile computing on business transformation, and measuring workforce culture based on Digital Proficiency instead of age. Twitter: @alanlepoLinkedIn: https://ca.linkedin.com/in/alanlepo     , Title: Big IdeasIntelligent Collaboration: The Intersection of…...

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My career in technology began in May 1993 when I was a coop student at IBM Canada. My responsibilities there were spilt between AS/400 tasks and setting up this new groupware thing called Lotus Notes. Well today Lotus Notes celebrates its 25th birthday.


Image taken from Mat Newman's blog.

It's amazing how pioneering Notes was in creating the industry that we today call â?ª"social business." I, along with many of my friends and colleagues owe our careers to Lotus Notes.

Let's look back at some of the things Notes did, oh so many years ago:

Applications: Long before Apple made the slogan "There's an app for that" popular, Lotus Notes users spent their days clicking on little square icons each representing a different business application. These applications included CRM tools, inventory control, project management and thousands of other uses.

Security: Long before two-factor authentication sent text messages to your phone to help secure logins, Lotus Notes required not only a password, but that you had an actual ID file on your computer. Notes has built in encryption which still protects data better than many of today's collaboration tools do. Notes has granular access control lists (ACLs) for each application (database) providing a range of user roles ranging from Depositor to Manager. Notes uses execution control lists (ECLs) to control what programs can and can't do on your behalf. (think of it like today's "permissions" in mobile apps) Notes even provides field level security via reader/author name fields on forms. These features are mainly invisible to users, but provide an incredible level of security.

Replication: Long before people starting "synching content to the cloud", Lotus Notes enabled people to "replicate" data between their computer and the server that hosted their applications and mail. This local replication enabled people to use their mail and apps even when disconnected from the network. (i.e. offline)

Mobile: Long before "mobile" was an industry buzzword, Lotus Notes apps ran on phones and PDAs. Yes, it was mainly Palm Pilots and BlackBerry's back then, but it was still amazing for the time.

What do you think Lotus Notes greatest strength was? (is?)


Sadly, I barely use Lotus Notes anymore, but I still respect how ahead of it's time it was, and in some ways still is. I'm constantly hearing pitches from "hot new startups" that are trying to do things Notes did 20+ years ago. I've posted this poster from 1991 several times, but let's review it once more.  Just replace a few words and this could be any collaboration vendor's current marketing campaign.

Notes from Lotus
Until now, most PC software was designed for individuals using individual PCs. But today, more and more people are working in teams on networked PCs that require a new kind of software.  Software that lets them quickly share ideas and information no matter where, when or how they work.

Enter Lotus Notes.

The first software than actually thrives on the fact that people need to work together to be effective.  Lotus Notes creates a new communications environment where users can develop applications - for sales tracking, project management, customer service, and free form discussions of all kinds - and routinely access and share this information from their desktop to anyone, anywhere in the world.  In fact, no other software maximizes your investments in networked PCs like Lotus Notes.

After all, helping people work together is what Lotus does best.