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Let me see you do that switch-a-roo May 29, 2009

Posted by David Gillespie in business strategy, technology.
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This week: Microsoft unveiled a new search engine, and Google unveiled a new approach to email. This is akin to Cadbury launching softdrink and Coca-Cola creating chocolate bars.

Microsoft’s Bing

Google’s Wave

Ok maybe not that drastic, as Microsoft and Google already play in each other’s spaces, what I find interesting is each company’s desire to innovate in the other’s space, potentially at the expense of the things that got them to where they are.

I have a number of clients at Microsoft and I like to think I challenge them regularly to try and build new markets as opposed to steal other people’s; if Google is going down the same path then that disappoints me greatly. What I do find interesting about the above scenario though is Google’s new email idea, called Wave, doesn’t seem to have monetisation built into it beyond advertising, whereas Microsoft are obviously making a big bet on increasing search revenue via Bing, their new search engine.

Google’s play seems to be closer to an idea where everything is contained in a single space, a move I like, away from distinct destinations. Much like Facebook, they’re seeking a single dashboard from which they can control a user’s experience. Microsoft meanwhile are chasing a better mouse trap. It could potentially be a more lucrative mouse trap, but I don’t think it aligns with where user bahviour is going.

And as we all know now, disruption is never about a better mouse trap.

Go see Tim O’Reilly for more on Wave.

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Maramushi Newsmap January 21, 2009

Posted by David Gillespie in web 2.0.
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Serious case of <3 going on here. Srsly.

What's going on in the world today?

What's going on in the world today?

Maramushi’s Newsmap takes news feeds from Google News and creates a visualisation based on the popularity of stories. It updates on the fly as news breaks with the tiles linking to the unabridged stories. Great for a snap-shot of what is going on in the world, even better for those far from home who want a quick over view of what is happening…about as much as ever it would appear.

The Google Flow November 28, 2008

Posted by David Gillespie in business strategy.
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I was sketching business models the other night (I know I know, there’s a reason eveyrone wants to party with me…) and drew the below diagrams while thinking about how people use Google and Facebook. It struck me that Google benefit as much from people leaving their site as they do from entering it – maybe even more so! Contrast this with Facebook, who derive no value from people getting to anywhere else.

Google vs. Facebook

With next-gen strategy in mind, Google are so far ahead of the curve it boggles the mind. Not only that, but the flow of users through their system is engineered into their core DNA – it isn’t an idea they have to get stakeholders on board for. Sure they have occasionally dabbled in other fields, like their ill-fated attempt to take on Wikipedia, but for the most part they can focus on things other than strategic innovation as there are so very few people even playing in their league.

Strategy for the next revolution November 26, 2008

Posted by David Gillespie in business strategy, digital strategy, strategy, technology, web 2.0.
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At the risk of this becoming a Fred Wilson love-in, I’m catching up on my unread items and he mentioned a conference coming up focused solely on creating add-ons for browsers. I’m a BIG fan of add-ons that make it easier for what I’m trying to do – as I’ve said before this revolution we’re going through is based around making it easier for the majority to express themselves (which is subsequently why there are now businesses around organising information – see what we did?).

What is happening in this space though is people are harnessing the notion of the web as the platform and getting away – slowly but surely), from operating systems as we knew them.

The moves that Microsoft, Google and Mozilla have been making though are ones towards the inevitable (and closer than you think) point where there is no such thing as an offline experience. At that point the browser is the experience, with different plugins and views for different things (word processing, spreadsheets, etc.).

Where we’re also headed is the recovery of our personal data away from the social networks and back to a central repository, one we are in control of. I wrote the following for Marketing back in May this year:

(Facebook are) desperately trying to maintain hold on user data, under the daft assumption it was somehow their’s to play with in the first place.

That idea, and the moves MS, Google and Mozilla are making, brings the online experience back to the user, it takes the data back to the source, rather than downstream where it currently resides. Facebook exists as a repository for personal data, wrapped up in a layer of communications software that shares it with your friends. Nothing more, nothing less. Facebook gambled – and rightfully so – on that information being worth something; they’ve made a fundamental mistake though in attempting to build a business around something they do not own or control: your information.

So, in playing the game of would-be gate-keeper, distracting you long enough with werewolf bites and status updates, Facebook are trying to build a profitable business around supplying access to the owners of the information.

…stop me if you’ve heard this one…

Meanwhile, people innovating in the browser space are building out their own platforms – ones that exist at a pre-site level. By doing this, they will tap the water supply at the source and not down-stream, and while yes we will still be the ones handing over the information, they know we need software to facilitate interaction with the web, that isn’t changing any time soon.

Facebook’s strategic advantage could be in opening up its system and allowing people to build Facebook applications that reside in the browser and not on their website. But in order to do that, they have to make some fundamental shifts in strategy and philosophy, and move from a siloed-mentality, the kind that built businesses in the 90′s, to an open one – the kind that builds businesses today. They have the scale, what I doubt they have is the will to become, almost overnight, one of the largest publishers of web applications on the planet and give a massive boost to the fledgling economies of browser plug-ins. In Facebook Connect they half-heartedly attempted to extend the reach of their platform beyond their own domain, and it plays like it is: an attempt to be a little bit open, but not too much.

Meanwhile companies like Zemanta, and like Adaptive Blue with Glue, are building businesses for the next revolution by creating technologies that do not require something as decidedly old-fashioned as a website to exist. Indeed they more than anyone recognise there is limited value in pushing a destination, but endless value in pushing content.

As soon as the hardware conversation goes away, the website-as-destination will quickly follow as we embrace the distributed web. So too, I imagine, the gross over-valuation that came and went with everyone’s favourite social network.

This year’s one anyway.

Props to Alisa Leondard who got me thinking about this, you should go and read Socialised. Wait, she’s American, so it’s SocialiZed. Dig.

Image courtesy of Digger Digger Dogstar, with thanks to compfight, who’ve just had a facelift. Go tell them they look pretty – they’ll put out. Promise!
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Keeping the main thing the main thing November 17, 2008

Posted by David Gillespie in business strategy, marketing.
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I have a new piece up over at Marketing Magazine, thinking about marketing as business strategy and encouraging everyone to dig a little deeper into the businesses they work with and on:

Look at Google. They weren’t always Google, not like we know them. They created one of the most remarkable services the world has ever known and built their empire on being remarkable. Products and services do not get more remarkable than that. Where are those products? The ones that don’t require a clever tagline and a media spend to get the attention they deserve? Why are we not sitting with our clients and challenging them on what is actually remarkable about their work?

Hope you enjoy!

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Fundamentals 2.0 – Open beats closed. Every time. October 23, 2008

Posted by David Gillespie in business strategy, philosophy, strategy, web 2.0, work/life.
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The image of author, essayist, poet, Ralph Wal...

Image via Wikipedia

This is the sixth post in my series on The A-Z of 2.0.

As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble. – Ralph Waldo Emerson

I can’t get it out of my head, I hope you can’t get it out of yours. If you’re managing then you’re not trying hard enough, you’re not grasping it deeply enough, you are, as I’ve recently stolen from the great Ralph Waldo Emerson, relying on methods as opposed to principles, where one leaves but a handful of tools at your disposal, the other gives you the knowledge to decide whether you want to use tools at all.

Advertising is dead, long live advertising. Where are we as opposed to where we were. Five, ten, fifteen years ago? What has changed so drastically at the level of sheer corporate, psychological and emotional DNA that those who get it are in many ways mutants, and those who don’t spend their time wielding traditional authority while looking nervously over their shoulders for what might be coming, deep in the night, right when they least expect it.

The fundamentals of what we’re doing are shifting. The A-Z of 2.0 isn’t about marketing or business, it is about everything. Everything is changing, and we all have two options: we can run with it or we can stand still and be taken along with the tide; we ride the waves or get caught on the reef below.

I can appreciate why this causes consternation among most people, we’re not naturally geared for change, we’re ostensibly creatures of habit, we make our lives familiar and manageable through a routine devised for us thanks to titans of media deciding when we’ll be inside thanks to the scheduling of Lost or Grey’s Anatomy. I don’t watch TV anymore, and in the generation coming up behind me that is going to be more of the norm than anyone who does not grasp open beats closed realises.

Because a TV schedule is a method of control. And because open beats closed is a principle that circumvents it. We’re changing the fundamentals of the methods used to entertain us for the last forty or fifty years, but what the big media companies are failing to understand is that does not mean we are forsaking the principles; we still need to escape, to live vicariously through characters on stage and screen, in books and music and art the way we have for thousands of years; to define ourselves through a greater collective consciousness. A song downloaded illegally is a challenge to an outdated method of distribution and value exchange; it is not a challenge to the principle that music is valuable and worth something, it is simply being couched in different terms, and we’re working with different currencies.

The crux is all business as we know it is founded on method and not principle. Almost every business anyway, I can think of one we all know, one with a principle of “Don’t be evil”. Where’s the method in Google that consistently trumps principle? With the understanding that no brand, business or person is ever perfect, show me a company that does it better.

We are more than a hundred and fifty years on from Ralph Waldo Emerson’s great insight, yet so many are still decades from grasping it that it has taken the invention of the internet and to some extents the rise and proliferation of social media for that to really take shape and force.

For businesses of all shapes and sizes to not only grasp the Fundamentals of 2.0, but move with them and avoid the reef below, they are going to need to adhere to higher standards, to move out of the quagmire of method and practice and habit, to step away from routine and the way we have always done it, and not only understand but be excited by the idea that we can do better. America 2.0, Borders 2.0, Celebrity 2.0, Dogma 2.0, Everyone 2.0 – these are all ideas based on principle, they frame the discussion and force us all to higher ground.

Principles beat method. Open beats closed. The way we have been is not the way we will be.

What is the point otherwise?

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When was the last time you went Yahoo!? July 15, 2008

Posted by David Gillespie in industry news, web 2.0.
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Paraphrased from this film.

You know, I can’t remember what I did before I googled (by the way, can we agree Google is the company name, google is what you do? Noun, verb, cool?). I think I used Alta Vista, but I really can’t be sure. Regardless, I have never been a Yahoo-er, it never grabbed me.

A friend sent this to me the other day, and all I can say is I feel sorry for the team who had to produce the below, it is such an obvious goal to kick. No doubt directives were ordered from on high, “the focus groups said we need 45% more wonder in our offering”, not realising if that if they just provided value and a campaign based on relevance they would likely grab more market share by simply executing their core properties in an effective manner.

One thing I do find curious is in the hierarchy of dot points the home page design is up top. Yahoo! came to life as a portal where your online experience began, but I don’t know anyone who browses the web that way. There’s an interesting notion here around destination entertainment, of having to go somewhere to experience a certain thing, but without a compelling pull, the traffic just doesn’t show up.

Do you Yahoo?

Other points of note:

  • Australia’s most extensive online news provider – don’t tell me you’re extensive, show me! Give me service names and validate that claim, I won’t believe you otherwise.
  • A new search giving me a better answer the first time. Again, better than what? Yahoo!’s last search offering?
  • By the world’s no. 1 email, they mean the most popular over all.

Email in particular is a funny thing, a good friend who is in a position to know remarked to me recently that Google knows a lot more about email and your inbox than they are letting on. The below data from Hitwise (dated April ’07) paints an interesting picture.

Google popular among middle and upper-class Gen Ys? That isn’t exactly the kind of news that makes you shout “Stop the press!”, it does lay out an interesting road map for the coming years if you make some assumptions about user behaviour -but this is already a long post, so we’ll save that for another day.

Back to the question in my title though; when was the last time you went Yahoo!?

Facebook lands buttered side down May 27, 2008

Posted by David Gillespie in industry news, web 2.0.
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Hunter S. ThompsonOne of the joys of now being a columnist is having the editor of the magazine call up and berate you for over-due pieces. Picture any actor who has played a journalist (I’m thinking Clooney personally) called by his very attractive but somewhat neurotic editor who has told he has until the end of the day to get his story in or he is fired. Note how cool he plays it, how he has arranged to discuss his column over dinner with her (and probably breakfast too). Got that image in your head?

Right. My life is nothing like that.

Still, I was called today because my latest piece was over-due. I said I had nothing to say, she said not to worry, that I could write about butter and it would be interesting.

So that’s what I did. Spurred on by the recent hoopla surrounding their blocking Google’s Friend Connect, I explain why butter is a crock, why Facebook is butter, and why, for me, it starts to spell the end of this media darling.

…trying to control what people do with (their own information) is the digital equivalent of telling rain which way to fall in a thunderstorm. Facebook eschewed a bunch of good stuff to get to where it is, using ingredients that were good for a whole lot of other, better, products and services. Now they’re desperately trying to maintain hold on user data, under the daft assumption it was somehow theirs to play with in the first place.

It’s already been suggested I’m wrong on this, I’m not so sure…

Image courtesy of bezmyaso, with thanks to Flickr Storm.

Eyes on the prize: what is your company’s core offering? March 3, 2008

Posted by David Gillespie in digital strategy, marketing, web 2.0.
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I’m a big believer in a business being free to focus on its core product(s). If it ain’t what you do, then it ain’t what you do! Far too many times I’ve seen companies get distracted by an interesting piece of technology or an idea outside their scope or ability to act on. When that happens, your core product suffers, and your competitors who may have been running a distant second seem to close the gap over night.

It isn’t simply a case of distraction though, outsourcing can also land your ability to succeed and innovate in the hands of people who don’t share your priorities, goals, or values. What that means is a devaluing of your offering in the eyes of the people you’re hoping to sell to. An inconsistent experience you can’t directly impact means your brand comes to be associated with, at best, a level of impotence in affecting positive change for its own offering, and at worst, a frustrating end-user experience. On top of the impotence. With a good measure of GAF* thrown in.

The same idea applies to brand extension. Let’s compare Google and eBay, two titans from Web 1.0. One seemingly goes from strength to strength with an occasional bit of conjecture, and another is mired in a mix of end-user apathy and anger, with top-tier management failing to set a cohesive direction. Google’s acquisitions may seem puzzling at times from the outside, however each purchase (with the occasional exception) can fairly readily be tied back into search, and eventually monetised.

Contrast this with eBay’s acquisition of promising-but-troubled VOIP provider Skype back in 2005. 2 1/2 years on this seems like a move geared around nabbing promising tech before someone else does, and not around how such a service better positions eBay to grow. Now both services are languishing with indifference and open hostility, and the purchase is little more than a land-grab in hindsight.

The trouble with a land-grab is eventually the people who actually own the land show up and cause trouble. In this case the digital natives are fighting back, services like Etsy crop up and move in on markets that could have and maybe should have been eBay’s. All due to the company losing focus, and the same can be said for Yahoo!, parts of Microsoft, and a myriad of players in the offline space too.

Times like this some old-school business lessons can come in handy. Echoed in Fred Wilson’s post about the New York Times, Jack Welch’s mantra to his VPs was be number one or two in your market, otherwise get out. Seth Godin says in his book The Dip “being the best in the world is seriously underrated”. And as I say up top, “If it ain’t what you do, then it ain’t what you do!”

Anyone have examples that fit into the above they’d care to share?

Facebook; advertising heaven or hell? February 26, 2008

Posted by David Gillespie in digital strategy, intent, marketing, web 2.0.
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I read somewhere recently – I think Seth Godin said it – if you were to set out with the express purpose of creating the worst possible environment online for advertising, you would wind up with something pretty similar to Facebook. I’m not entirely convinced that’s accurate, but I’m also not entirely convinced it isn’t. While you certainly have millions of pairs of eyeballs, what you need is an intention economy:

The Intention Economy grows around buyers, not sellers. It leverages the simple fact that buyers are the first source of money, and that they come ready-made. You don’t need advertising to make them.

The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets.

The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that.

Thanks Doc. Let’s look at that for a second. The Intention Economy grows around buyers, not sellers. Ok, so we need buyers. Are people buyers on Facebook? Have you ever purchased anything from it? I haven’t. I’m not in a consumer mindset when I’m there, at least not one that involves me parting with my hard-earned. There’s certainly an argument to say Facebook users are consuming any time they are logged on, but I question the notion that can be monetised; I’m consuming social interactions with my friends, I’m not viewing it as a platform for purchases.

Contrast that though with businesses who are advertising, are they viewing the Facebook ecosystem as a marketplace? I don’t have hard data to back this up but I’m willing to say yes, based on moves a little-known start-up out of Redmond, Washington made last year. Marketers are seeing the numbers and frothing at the mouth to turn that in to revenue. How one does that and even IF one does that aren’t being considered at all.

The Intention Economy apparently comes ready made, it doesn’t require advertising to manufacture it. What would Facebook be without advertising? Aside of course form hundreds of millions of dollars poorer?  Probably much smaller, since it would have had no way to foot the bill for its massive growth, save for taking on more cash from VCs worried about missing the next Google. And if it was much smaller, how many fewer radars would it be on? You lose the Fast Company, Newsweek, Business Week. You are suddenly still collegiate and walled and not innovating at the pace your market capitalization (suggested or otherwise) allows you to. Facebook’s growth is built on the promise of an Intention Economy in spite of the fact all evidence points to the absence of such a thing.

Lets continue: The Intention Economy is about markets, not marketing. You don’t need marketing to make Intention Markets. This again takes us back to the core issue of how people behave when it comes to commercially consumable goods on Facebook. If I have missed the train on this I look forward to finding out, but I don’t see a dip in Amazon’s trading, I don’t hear about slumps in eBay’s number of auctions (not ones that aren’t brought about by their own ineptitude anyway). Contrast this with little known but rapidly growing Etsy, a site built around the trade of goods that are 100% hand-made. Commerce is core in its business model, coupled with a feel-good, natural vibe that is hard to come by online. I don’t want to talk about it too much, suffice to say the service is brilliant and should be visited (right after we finish here).

Etsy doesn’t need to risk disenfranchising its user-base in order to move towards profitability; the inherent small-business nature of its offering allows it to grow organically, improve and expand as it needs to. I was at a wedding recently and a friend was talking about a marketing plan, saying “Give me$20 million and we’ll achieve “x”, $10 million and we’ll achieve “y“, but $5 million and we won’t even get off the ground.” Facebook needs to grow at its current pace in order to achieve its goals, it needs an Intention Economy to be established and fast, lest the rest of the world pick up on the fact that there currently is no profitable business there, at least not on the scale they are currently operating on. Etsy could stay its current size and be a success, and I imagine that’s quite alright with everyone involved.

The Intention Economy is built around truly open markets, not a collection of silos. In The Intention Economy, customers don’t have to fly from silo to silo, like a bees from flower to flower, collecting deal info (and unavoidable hype) like so much pollen. This one goes without saying. Facebook are making moves towards an open platform, surprisingly still sitting out in front of Google who, for the first time perhaps ever, was caught sleeping. The same way Microsoft missed the internet, Google seems to have missed the promise of social networking and what an open playing field can mean. They are of course a little more concerned with owning your phone than your MySpace page, probably because they already have all the access there they need.

Regardless, while Facebook slowly makes moves away from being a silo, they are still being very careful to make sure they remain a focal-point for your interactions. Using an Amazon Facebook application which you’ve plugged in to your Bebo page isn’t a negative for them; continuing to use Amazon as you are, or using an application that runs via someone else’s network is. If Facebook’s usage levels or visitation starts to decline or even just level off as it eventually must, look for some dramatic moves on their part, particularly if the Intention Economy is still nowhere to be seen.

Lastly, In The Intention Economy, the buyer notifies the market of the intent to buy, and sellers compete for the buyer’s purchase. Simple as that. Right now we don’t have that, we have sellers competing simply for the buyer’s attention. This seems simply ludicrous when you consider:

  • A Facebook user’s attention not up for grabs, not by sellers anyway. They are here for social interaction. Before we get into notions of what constitutes a ridiculous notion of “proper” social interaction (which people usually take to be face-to-face), the rules are different now. The key take away though is the rules aren’t just different for people under 30, people 50+ are interacting in this way too, ith plenty of them getting married. The web has enabled this sort of interaction, the song however, remains the same.
  • There is no intention to buy. Ever see teenagers at a shopping centre, hanging out and not buying anything? Look for this behaviour to continue (funnily enough). Marketers looking to capture that intention are going about it in the wrong capacity. Yes, a person is a fan of the TV show Lost. Yes, you have that on DVD and you can sell it to them. No, they do not want to buy that now. They want to buy it when they want to watch it, so you had better make sure you know enough about your audience to be in the right place at the right time (Hint: the right place is not Facebook, the right time is when they are not on Facebook).
  • Imagine for a moment that Facebook was actually a readily monetisable and viable market place; sellers would be competing purely with the rest of a user’s wall. Vampires, Texas Hold’Em Poker, travel widgets, pokes and haggis being thrown, videos playing and songs streaming from iLike. What could your product possibly offer that competes with all of that?

The ironic pat of it all though, is you cannot afford to not be a part of it, if only because if you’re not, your CEO is going to hear about it from his kids and consider that a mandate for action. Social media runs much wider, and there are opportunities inherent in it. But Facebook? Setup a free fan page and see if your audience finds you. If they do, then that’s a conversation worth having.

As we all know now, markets are conversations, and you get to fight another day.

(P.S. I would love to hear from some folk who have tried monetising FB and what their experience has been.)

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