Google Goes Back to the Garage with Alphabet

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When a company the size of Google makes a massive change in their structure and the way that they do business, it’s big news. Today, Google announced the formation of Alphabet, a holding company that will stable the portfolio of companies formerly known as “Google” – giving the organisation potentially a new lease on life and a new direction – or series of directions.

Constellation Research’s R ‘Ray’ Wang provides a laser sharp analysis of what the announcement means in the following video.

Given that so many organisations grow to a size which prohibits innovation, this restructuring offers an amazing live case study of an attempt to avoid the “Kodak moment”. The new, low carb version of Google – which generates the vast majority of revenues – will look vastly different and more tightly focused on digital and internet properties:

  • Search
  • Advertising
  • Maps
  • Apps
  • YouTube
  • Android

This structure effectively hives off the “business as usual”, high velocity, transactional revenue streams into a separate unit which will continue to be called “Google”. The new CEO, Sundar Pichai will be able to keep that digital focus while continuing the optimisation and incremental improvements that keep Google at the centre of our online lives.

The high potential, future-oriented remaining businesses will become separate businesses under Alphabet. Taking a portfolio investment approach to innovation, Alphabet’s stable features near and far term innovation ventures that are:

  • Inside us: Life sciences – biotech research through new company, Calico
  • Around us: Consumer home technology – internet of things hardware for the smart home through Nest
  • Connecting us: High speed internet service through Fiber
  • Moving us: X-lab – the incubator charged with developing self-driving cars and drone technology

And Google Ventures will continue its investments in early and growth stage ventures.

While the business implications for this restructure are significant – the most interesting impact is likely to be felt at the level of culture. Creating a culture of innovation – and maintaining it over the long term is extremely difficult. This is a bold move that brings Google back into the garage from where it came from. It sets a new model for tech sector innovation and has the potential to re-invigorate Google’s innovation agenda.

Who will be the fast follower – or copycat – to Google’s lead? Time will tell.

The secret lesson for corporates from the world of startups

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When ANZ chief economist, Warren Hogan recently explained Australian business’ aversion to risk, it made a lot of sense. Not only are corporates concerned about project success, they are also geared and structured towards large projects which makes it more difficult to innovate in a more “agile” manner. This gives rise to several other challenges. Without flexibility, Australian corporations are subject to:

  • Unnecessary competitive disruption – smaller businesses can easily capture mindshare, momentum and a raft of unhappy customers simply because companies don’t have the agility to address emergent threats.
  • Higher levels of customer dissatisfaction – if customer experience projects are subject to this same lack of responsiveness, then customer satisfaction is more likely to quickly result in customer churn and lower NPS.
  • Market irrelevance – today’s customer is hungry for differentiated experience. Slow response to market challenges simply means that your market moves elsewhere. And they do so “at the speed of digital”.

But all is not lost. There are four key lessons that corporates can learn from the world of startups. And they can all be easily implemented, trialled and scaled with a minimal investment. I explain more here.

Why You Need to FOCUS – Forget Ideas, Start with Problems

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In the rush to innovate, we jump to solutions, look for silver bullets. We cool hunt. Crowd source. Idea storm.

But there is a problem with ideas. Sure they are fantastic for a fledgling startup, but they are dangerous, time consuming and unproductive for most corporates. Unfortunately, one of the first responses to a “call” for more innovation is to ask for “big ideas”.

A better approach is to forget ideas and put out a call for “problems worth solving”. It’s the approach that I have been following for years and it has distinct advantages:

  • Focus on business value – there is an immediate connection between any subsequent ideas and the business value that needs to be created
  • Ownership – you can pinpoint a “business owner” who has a vested interest in the problem being solved
  • Crowd solving – it’s easier to direct structured and unstructured teams to solve the challenge
  • Understanding and articulation – working with the problem owner means that there is a clear understanding and articulation of the challenge. It means everyone is “on the same page”
  • Systems win – in the corporate world, systems win. Taking a systematic approach to solving problems rather than pursuing ideas means that business value can be retained, capacity can be sustained and velocity can be built into (or on the edge of your business).

Once you have your problem sets, you’ll find it’s much easier to get started on that next innovation.

The Cheating Strategist’s Guide to Mary Meeker’s Digital Trends

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Each year around this time, the web goes into a slow motion melt down over the much anticipated Meeker Report into internet trends.

This year is no different. And as I did last year, I will encourage you to reflect on your own business and priorities before diving head first into the report. I call it the “Three What’’s and a Why”. Consider:

  • What mattered in mid 2014?
  • What matters now?
  • What are you measuring?
  • Why are these things important?

And if you’re time poor or just bone lazy and don’t want to click through the hundreds of slides in the report, you’ll love Michael Goldstein’s summary for cheating strategists. It’s 10 times the punch at 1/10th of the effort. Now that’s what I call a good strategy.

Decyphering Bitcoin and the Blockchain

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No doubt you’ll have heard about Bitcoin by now. It’s that disruptive technology that is keeping Financial Services CEOs awake at night. JP Morgan CEO, Jamie Dimon, in his annual letter to shareholders warned investors and the banking industry that “Silicon Valley is coming” – suggesting that there are hundreds of startups focusing on the financial services technology space (“fintech”) and that traditional banking will need to double down on its innovation efforts.

[Startups] … are very good at reducing the ‘pain points’ in that they can make loans in minutes, which might take banks weeks. We are going to work hard to make our services as seamless and competitive as theirs. And we also are completely comfortable with partnering where it makes sense.

But his particular focus on next generation payments systems like PayPal and Bitcoin were called out for special attention.

Here in Australia, these new systems have been the subject of a Senate Hearing Committee investigating digital currencies.

But how does Bitcoin work? Sean Carmody, Head of Credit Risk at Westpac put together this presentation that explains the technical underpinnings of Bitcoin – the blockchain. It explains:

  • Why virtual currencies are a happening thing – the perfect match for a virtual world
  • The problem with virtual currencies – how to prevent people simply “copying” a digital currency
  • The innovation in the “blockchain”

And while the presentation does get technical, it is also eye-opening. Technology may be transforming the way that currencies can operate (now and into the future) – but TRUST remains a vital ingredient in currency transactions. And as Sean suggests, Bitcoin may not be the winner in the digital currency race – but it has fired the starter’s gun.

Disrupting the Disruptors – Follow Me on Meerkat

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I feel it. I’m sure you feel it too. Launch fatigue. It is what happens when you can’t bring yourself to click a link or open yet another email announcement about the app or website that is going to change your life. After all, our lives are pretty much the same as they were last year, right? AND the year before. And the year before that.

Actually, I can’t recall being truly, authentically excited about a new technology for sometime.

Until Meerkat arrived.

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I frequently attend events of all shapes and sizes. Sometimes as a guest. Sometimes as a speaker. But always as a curious participant. If there is something interesting taking place, I will live tweet the speeches. I will take photos from the stage. It’s as much for my own benefit as it is for those who follow. I find this kind of live coverage a great way to capture value – to tell the story, to bring people closer. To explore. But with Twitter and even with Instagram pictures only take you so far. And for most events 15 seconds is just not long enough.

Enter the Meerkat

While Twitter recently announced its purchase of Periscope for live streaming – Meerkat has been able to build a substantial user base in a matter of weeks. And while new apps come and go, it feels like this cat may have some interesting and stripy surprises.

In my view, most social networks handle new product launches appallingly. It seems that once they achieve some level of scale, they lose their way, hire in “enterprise” types and follow the beaten path towards monetisation through advertising. Facebook are getting better at this. But Twitter is clearly lagging. Not only have they invested in an app with little or no public traction, their track record with new releases does not inspire confidence. And this leaves the door open for disruption.

Meerkat takes what has been happening in a much more clunky way and removes the friction. They’ve taken a leaf out of Apple’s playbook – observe an innovation and make it better. Pioneers of portable web streaming like JustinTV led the way, struggling with battery packs, bulky technology and low network connectivity. But for the individual it was all too much. Trouble. Bother.

And that’s where Meerkat’s elegance wins out. With your smartphone and a good 4G signal (or 3G while standing on one leg), you can now livestream anything. Everyday events. Activities just t. Special occasions.

With Meerkat, social media is not about telling people what you are having for breakfast. It’s not even about how good your breakfast looks in photos. Now people can watch you eat. Live. With sound.

We’re all breakfast TV hosts now

Effectively, our conversations can actually be turned into conversations. We become both interviewer and subject.

But already this new medium is challenging the old form. Twitter excels for those who find social settings too in-your-face. On Twitter you can know all the answers, but Meerkat’s critical eye demands high energy. Conversation. Viewpoints. Meerkat is the medium of the incessantly curious the verbally dextrous.

Is it all too much?

It’s very early days – but Meerkat is setting a new direction that we didn’t know we needed. But one thing is for certain. Those who win on networks like Meerkat will be very different from those who win on text based channels like Twitter. And when the disruptors are disrupted, things get interesting.

Mean Tweets–The Greens’ Sarah Hanson-Young Tweets Back

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Public figures attract a lot of bile on social media. But there is a special kind of hatred that seems to be reserved for politicians – especially female politicians. The very public campaigning against Australia’s first female Prime Minister, Julia Gillard, will certainly be remembered for the dog whistling and sexism that passed for public debate. It marked a low point in political discourse – one from which we have scarcely recovered.

It certainly seems that many in the Australian population still struggle with successful women on the public stage.

So what is a politician to to? Resort to the broadcast media? Or create their own?

South Australian Greens Senator, Sarah Hanson-Young has taken a leaf out of US Talk Show Host, Jimmy Kimmel’s book, and has started sharing some of the more colourful – and downright rude – messages that she receives via her YouTube channel. Introducing “Pleasantries with Sarah Hanson-Young”, the senator explains:

As a federal senator, I receive a lot of correspondence. Today, I am going to share with you some of the more heartwarming messages.

What I like about this forthright approach is that, where possible, Twitter identities are shared. It’s great to see some of this kind of “feedback” get the ridicule it deserves.

But even better than that, it’s great to see some of our politicians giving some creative thought to the way that they engage with the public. If only more of them actually engaged with technology they might not pass such ill-informed legislation as the Data Retention laws – and we’d all be better off for it.

How IBM and AusOpen Tennis are rethinking the “sportacular”

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The spectacle is not a collection of images, but a social relation among people, mediated by images.
— Guy DeBord, Society of the Spectacle

One of the most transformative trends of the last decade has been the shift from inside-out to outside-in thinking. It can be applied to almost any industry or area of expertise. Think, for example, about technology innovation. Up until recently, new ideas and inventions were the province of internal business and technology teams. Research and development funds and resources would be sunk into various teams and programs – some official and others operating in the shadows. Eventually these ideas would emerge as new products. As innovation made flesh (or wires or software). But over the last decade this has shifted. With more open platforms like Salesforce1, the growth of developer communities for software platforms from SAP to Marketo, Jive to Atlassian, innovation has breached the firewall and has taken on a life of its own.

The combination of open-ish platforms and abundant data is creating new opportunities for businesses and their customers alike. But the benefits are not limited to an in-your-face direct-to-your-phone coupon or BOGOF offer. By combining technology and matching it to human behaviour, we are beginning to explore a whole new world of experiences. And the testing ground for this innovation is not a lab in the middle of the Nevada Desert, but right here, at one of Australia’s largest sporting events – the Australian Open Tennis.

IBM and the Australian Open Tennis have been partners for decades. Many years ago, my extended team worked on IBM’s large scale sports events like the Olympics, NBA, Super Bowl and the Australian Open – so I had the opportunity to see – from the inside – how the technology and services were brought together. There has been a lot of water under the bridge in that time, so when I was invited to go “behind the scenes” and learn how things had changed, I jumped at the chance.

As has always been the case, the technology and services that IBM provides are deeply embedded in the running of the event.  But it’s not just the outward facing systems and technology. These days, the technology and business process integration taps into the way that the grand slam tournament is run and reported – it’s “hard wired” or should I say “wirelessly” into the fabric of the business, event management and fan experience. This partnership stretches from the electronic impulses of the web to the real time provisioning of servers, to the deployment of onsite security personnel, management of player timetables and grand slam rules and the amplification of fan experiences via social media.

Big Data on the Centre Court

Ian Wong from IBM’s interactive experiences team stepped the technology through its paces, revealing court data for each of the games. There were enough high level statistics to excite the armchair observer – from fastest serve to win ratios and more. All of this data was being captured by a combination of on-court technology and human observation. The umpire’s scoring PDA  fed directly into the system, managing scoring, counting strokes and helping to keep the games moving to time. High up in the stands were also other observers who were cross-checking and monitoring the on-court action.

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The data capture sounds impressive – to a point – but the big data activity underlying is where it becomes fascinating. Each game, each point, each stroke is captured and stored. This information is then processed and analysed – and builds upon the same data going back over eight years. This massive data store allows the IBM team and Australian Open to profile players and particular matches and to use a matching algorithm to unlock the “keys to the match”.

For example, say Martina Hingis was playing Serena Williams. The system could pull all previous match data and reveal aspects of match play that each had to achieve in order to win. The “keys to the match” could be “successful first serve 76% of the time” or “serving to the opponent’s backhand 65% of the time for second serves” and so on. Interestingly, this information and analytics power is made available to coaches and players through interactive panels – though not to the general public.

From off-court big data to real world big data

While the spectacle of on-court action is the drawcard, in true “Society of the Spectacle” form, a just as important aspect of the Australian Open Tennis is the fan experience. Tennis Australia CIO, Samir Mahir, has put together a massive sense and respond network that not only connects fans – it responds to their needs – matching expectation and demand with services and resources just-in-time. As Samir explained, “it’s about getting more people to come to the Tennis”.

Ingeniously, providing free wifi for all attendees means that fans are always connected – with a fat pipe of data ready and available at all times. AusOpen have established “Selfie Zones” around the stadium where people are encouraged to take photos and share via Instagram, Twitter and Facebook. And when tagged, can be displayed on the big screens on the centre court for all to see.

But this is just the start of the big data story. As people move around the stadium, routers count the number of connections to wifi points of presence. This data is then fed in real time to the logistics engines which can determine whether there are sufficient security personnel, adequate ticketing booths open and available or enough food and drink vendors in the right location. If necessary, food and drink or security personnel are notified and redeployed to ensure levels of service and safety are maintained across the massive complex.

Similarly, social media is monitored for volume and velocity. This information is then crunched by IBM’s Watson natural language processor. Realising that an increase in social media activity creates increased demand on the AusOpen website, IBM is then able to use social media velocity to predict and trigger on-demand webserver provisioning.

From sport to sportacular

By placing the fan – the consumer of sport – at the centre of the tennis experience, IBM and the Australian Open are transforming what was once a spectator event to a “sportacular”. They are combining and showcasing the gladiatorial contest on court, the preparations on the practise courts and an experience for fans that connects the location and their own experience in an event that is part of a global grand slam series.

In an instant these messages, are captured, multiplied, beamed around the world and brought back to the individual one selfie at a time.

The basically tautological character of the spectacle flows from the simple fact that its means are simultaneously its ends. It is the sun which never sets over the empire of modern passivity. It covers the entire surface of the world and bathes endlessly in its own glory.
— De Bord, Society of the Spectacle.

Note: travel and accommodation were courtesy of IBM.

 

#Digitalks: Digital Disruption – how to thrive through change

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Each quarter, Firebrand host a lunch time seminar for the Sydney marketing community. This quarter, hosted by Adobe, I presented on the topic of digital disruption – and how marketers and innovators can apply the principles of the lean startup to transform their businesses.

We covered the three things you’ll need to pay attention to in order to build your business:

  • Marketing innovation: How to think and act like a marketing-led startup to innovate your way to profitability
  • Metrics: The key metrics that give you insight, focus, and control
  • Momentum: How focused action yields data and drives outcomes

You can:

 

The Amazing Case of the Disappearing Technology

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Technology is stuff that doesn’t work yet.

— Bran Ferren

Bran Ferren’s words echo across the wifi to us like a premonition. The former President of R&D at Walt Disney Imagineering’s deep understanding of the way people use and engage with technology is only starting to play out in the devices that we so readily take for granted. The fact that we can call a piece of technology, a “device” at all shows how far we have come; after all, a device is something personal, knowable, intimate. And it was only twenty-odd years ago that carrying a “mobile phone” could put your back out. Personal technology is shrinking at a considerable rate.

Big Machines, Small Data

For decades, technology has driven business innovation, resulting in the rise of professional services firms, technology companies and most recently, software platforms. Until the early 90s, we designed systems around single business functions – like purchasing or order management. While this was a huge improvement on previous systems, it entrenched departmental silos and required duplication of work – put simply, the same information had to be entered into completely separate systems. Occasionally, the IT teams were able to integrate systems – connecting some pieces of data together, but this also required governance, standards and compliance – which added cost and complexity to already complex systems.

At the centre of this data frontier were the CIOs – vital drivers of innovation and productivity in almost every business. And held tightly in their grasp was information.

We realised that the faster we could crunch business information, the faster we could make decisions. Accordingly we built electronic supply chains, implemented ERP systems and automated what we could. We brought disparate systems together with a single package providing a reliable flow of data from one department to another. We had massive computers pumping relatively small amounts of data through relatively small, connected pipes. In some cases, remote controllers would be hooked up to servers via dial-up connections – and these ran multinational businesses!

The focus for all this innovation was the “back office” – far away from the prying eyes of the customer.

The Rise of the Front of House

While ERP innovation was driving efficiencies within the hardened arteries of businesses, the sales and marketing folks were still working from the same trusty rolodex and dog-eared business cards they had used since the Great Depression. But Tom Siebel had other ideas. His company was to do to customer relationships what SAP had done to finance and enterprise resource planning. The vision was – as it remains today – a single view of the customer. Like many grand visions, the reality remains tantalisingly out of reach.

But this focus on customer facing business functions, brought sales and marketing into the connected enterprise. Customer billing systems, processing, pipeline and opportunity management and a range of other functions were all digitised – and the field of business re-engineering flourished. Consultants had learned through the ERP years that return on investment lies in business users actually using these systems – and that meant customisation, training and change management. In large enterprises, this task was enormous – but was largely contained by the limits of the business. The focus was on engineering the business not extending beyond the safety of the firewall.

After all, even the top of the range, slimline laptops were clunky, heavy and slow in performance. And the business systems were ugly, hard to use and the data networks were notoriously unreliable. It appeared that innovation was always going to stop at the dizzy limit of a thin blue ethernet chord. And everything from the design of the software and hardware through to the challenges of remote access served to remind us that we were always operating out of our comfort zones – that we were dealing with technology that could both help and hinder us.

Outside-In Innovation and the Crowd

While most businesses were licking their wounds after the dotcom bomb, a new generation of tech entrepreneurs flew below the radar to create a whole new way of connecting the dots around businesses. These emerging social networks skipped the B2B market and launched direct to consumers, corralling vast swathes of the population into tightly bunched, loosely connected groups.

Similar to the way that dolphins collaborate to feast on an abundance of school fish, fast moving digital platforms like Google, Facebook and Yahoo skirted around our flanks and drove us together. Overwhelmed by the speed but excited by the possibilities, we willingly handed over our privacy, location and even identity in order to join with others who were “just like me”.

These platforms, working at warp speed, innovated at the speed of customer experience. They were unencumbered by years of process, archaic business systems and entrenched ways of working. They pushed out new features to the delight or disgust of their members, changed as necessary and moved on.

Sensing a fickleness in the consumer landscape, these fast growing startup enterprises blitzed past the “sense-and-respond” mantra proffered by management consultants the world over and created “lean” businesses that responded to changing conditions through automation, strategic outsourcing and peer-oriented customer service. The suggestions of the crowd – the paying customer – drove changes in business models, product features and even business strategy.

And all this outside-in innovation was happening from the comfort of our homes, with the convenience of technology we could hold in our hands.

The Internet of Things Gives Way to the Internet of Me

The real revolution in all this is three-fold:

  1. Consumers have built their own ecosystems around the experience that they want to create and curate for themselves
  2. “Technology” is disappearing from our lives, shrinking to a size that can be incorporated into our daily fashions
  3. Data is proliferating and permeating devices, systems and everywhere in-between

At the moment we are seeing the Internet of Things gaining traction in our homes, workplaces and public spaces. Connected by low bandwidth protocols like bluetooth, devices like Withings weight scales function like an analogue machine, displaying your weight – but add an additional dimension powered by the web and big data. Not only is your weight captured, your profile is queried in real time, and your height details are returned. Then your BMI is displayed while your latest reading is transmitted back to the cloud.

In some retail stores, sensors like iBeacons track your movement and signal your identity based on the apps running on your phone. Store assistants are proactively updated on your current status, interests and so on, and are ready to more readily assist you. Sound creepy? It’s already happening.

This is no longer the internet of things, but the internet of me. We are creating personal versions of the same kind of ERP networks that were developed in the 90s – linking our payment systems (banks) to our supply chains (shops) through sensors, apps, profiles and devices that we carry or wear at all times. And all of this is happening largely out of our view. It’s invisible. And once it becomes invisible it becomes “the way of life”.