It seems like 1994 was a busy year – not only did it see the first ecommerce transaction (a foolish purchase of an overpriced and overrated Sting album), but also the launch of the very first smartphone. And interestingly it wasn’t produced by a traditional handset vendor, but created by IBM, thus adding to the long list of inventions, such as the PC, that it pioneered but then failed to commercialise.
The oddly named Simon went on sale to the US public on 16 August 1994, and had a calendar, could take notes and send emails and messages as well as make and receive calls. Aimed at the busy executive it could be linked to a fax machine in order to handle all your communication needs. However it failed to take off, only selling 50,000 units. As curator of the Science Museum’s Information Age gallery, Charlotte Connelly, drily puts its “It only had an hour’s battery, it was $899 and there was no mobile internet at the time. So it wasn’t very successful.” Personally I’m not convinced the name helped either – “Sent from my Simon” doesn’t have the same kudos as “Sent from my iPhone” at the bottom of an email.
We’re now seeing mobile and ecommerce (as opposed to Sting and Simon) converging, and driving innovation in technology. As this nifty but messy Google Public Data graphic shows, the majority of us now use smartphones as our primary method of internet access, and, aside from reading this blog, watching cute kittens and moaning on Facebook, one of our primary occupations is buying stuff. According to Goldman Sachs, global mobile commerce will hit $638 billion by 2018 – the same amount spent via PCs in 2013. While the majority will be on tablets, smartphones are an integral part of the customer journey and will make up a direct $20-30 billion of the total.
The smartphone has changed how we interact, shop and spend our free time. We are no longer ever idle – why gaze into space at the bus stop and notice the world around you when you can play Candy Crush instead? In many ways mobile technology has outstripped our capacity to adapt, leaving humans scrambling to change their behaviour to fit in with their apps, rather than the other way around. 20 per cent of young American adults (and 10 per cent of the total population) use smartphones during sex, though mercifully the research doesn’t go into any more detail than that.
So, what does this mean for startups and marketers? The smartphone is essentially our most relied upon device, and the one we keep closest to us at all times. You can link it to sensors, watches and the world around us, through Bluetooth and technology such as beacons. It really does provide a window into our lives, which has both a positive and negative impact. Speaking personally spam text messages or calls annoy me more on my mobile than their equivalents on landline or email. It is a delicate balancing act, with the consequences for misjudging privacy or security potentially extremely damaging. But get it right with your app and you can generate big profits or deliver your message right to the heart of your target markets.
The last twenty years has seen the smartphone change the world – as well as the wider device market. It has shrunk from the 500g brick sized Simon to thinner, more pocket sized smartphones (though ironically the trend is now for larger and larger devices), with increased usability and a wider range of apps aimed at consumers as well as businesses. One thing hasn’t changed though – the Simon’s battery lasted an hour, and while I get a bit longer from my iPhone, it still can’t survive a busy day without needing a recharge……..
Ofcom’s annual study into the UK’s viewing, listening, internet and communications habits is always worth a read. This year’s tome is no different, with a headline finding that we now spend an average of 20 minutes more every day using technology devices than sleeping. Apparently the average night’s sleep is 8 hours and 21 minutes – which seems an incredibly long time to me, but then I’ve got three kids and a noisy cat.
There is positive news on broadband – there are now 6.1 million superfast connections across the country, making up over a quarter of broadband subscriptions. Given the huge amount of money invested by the taxpayer to push superfast broadband to rural areas, this is promising, but the UK still lags behind other countries on targets and speeds. For example, Finland defines superfast as 100 Mbps, while the UK target is just 24 Mbps. And my new shiny rural fibre broadband doesn’t even achieve that, measuring just 21.6 Mbps according to my ISP (when working).
TV viewing is less than 4 hours a day for the first time since 2010, at 3hr 52 minutes. But before broadcasters start panicking, bear in mind that this is more than the combined time spent on mobiles, landlines and the internet. The vast majority of programmes are still watched live, despite the rise of catch-up services.
As always the Ofcom findings are being used to predict the death of various communication channels by analysing the behaviour of 12-15 year olds and making assumptions for the future. For example, only 8% of this group said they used email and 3% communicated through landline phones, leading to experts to point out the imminent demise of these channels. I can think of three reasons why this is tosh:
People are living longer, so we actually have a growing proportion of silver surfers (complete with landlines), balancing out the younger generation. If they were cutting the cord and just communicating using WhatsApp things would be different, but no sign of that yet.
2. Why would a 12 year old use email?
In many ways email is a horrible communication channel – complex, clunky and not real-time. The reason most people use it is essentially for work or to do with boring stuff like complaining at utilities/banks. So, unsurprisingly, most 12 year olds aren’t spending their time slaving at the corporate coalface or moaning at companies.
One thing teenagers have always valued is privacy. I remember having to shoo away parents and siblings when making landline telephone calls at that age – now lucky kids don’t need to as they can just use their mobiles. So, again, why would they use landlines when they can call from their bedrooms?
So, taken altogether the Ofcom findings show that there isn’t radical change happening in how we communicate – a third of people had sent a personal letter in the last month for example. The only sector to worry should be physical newspapers and magazines, with just 2% saying they’d feel their absence. And even then, this seems a little difficult to believe seeing the number of free papers handed out in London for example.
For entrepreneurs looking to set up a business or marketers aiming to launch a new product, the lesson is don’t neglect the old channels in favour of the shiny new ones. Think laterally and improve the experience and you might well be onto a winner.
The tech market across Europe is on a roll. According to Dow Jones VentureSource European startups raised €2.1 billion (over $2.8 billion) in Q2 2014 from VCs, the highest amount since 2010. The average size of the 365 deals was €2.2 million, up from €1.5 million in Q3 2013. Essentially that means every day of the quarter four startups got funding from VCs.
At the other end of the company journey, Tech.eu counted 92 tech exits in Q2 2014, up 70% from Q1 2014. 10 of these were IPOs, showing a healthy move back to the stock market for tech companies. And while deal size was undisclosed in 72% of cases, 15 were for over €100 million.
So, does this mean that everything is rosy in the tech market and your startup will receive its deserved funding in a heartbeat? Unfortunately not, and there are three worrying points behind the figures:
1 What is a tech company?
I’ve always been suspicious/puritanical on what makes a startup ‘tech’ rather than part of any other sector. Taking a look through both the Tech.eu list of exits and its corresponding index of EU tech funding rounds so far in 2014, I don’t see that many companies I’d class as technology. IPOs and exits included:
- Takeaway platform Just-Eat (food)
- Zoopla (property)
- Markit (financial information)
- Oldford Group (gambling)
- M and M Direct and Game Digital (retail)
- eDreams Odigeo (travel)
- Jobsite (recruitment)
Companies that received the largest amounts of funding mirrored this list – Delivery Hero, which has raised $285 million to date, is an online food ordering platform, while Ozon ($150 million) is an online Russian retailer.
There are what I’d consider genuine tech companies receiving funding (Klarna is a payments provider, Tradeshift is B2B software and Elasticsearch is a search and analytics engine). And looking at the IPOs, Zendesk (customer service software) also fits into my narrow definition of proper tech.
Obviously consumer facing companies need large amounts of funding – they have to market themselves and launch into competitive marketing which takes cash. But my complaint is that technology is part of every business, so just because you sell via the web, that doesn’t make you a tech company. After all, in the early days of the telephone, no-one created a new category for businesses built on the communications power of the phone. By lumping these companies into ‘tech’, investors and commentators overlook the genuine technology companies making software and hardware in favour of more glamourous consumer businesses. It was exactly the same issue in the dotcom boom, with anything that had a website being lauded to the skies as a tech pioneer.
2 Europe lagging the US
The European figures for funding look strong, but in the US private tech companies raised $13.8 billion in the same period. We’re talking about a similar size market in terms of people, yet nearly five times the investment. No wonder that many EU tech firms are crossing the pond to tap into US funding. Zendesk is a good case in point. While founded in Denmark, its successful IPO was on NASDAQ, where it has seen its share price nearly double from $9 to around $17.97 currently.
Clearly, there are structural and funding issues that need to be addressed to convince European companies that this is where they need to build their startups if we are to build a vibrant tech sector across the EU.
3 Selling out too soon?
Some companies are never going to have the scale to survive on their own and fit better as part of a larger entity. So, trade sales are a vital part of the tech ecosystem – investors get their money back (hopefully), enabling them to invest elsewhere, while founders and management teams are able to move on to the next big idea.
But looking through the crop of acquisitions the largest amount (37%) were by US companies. Facebook and TripAdvisor made two European acquisitions, and the likes of Cisco and Intel bought one business each. The risk is that too many smart European tech businesses don’t turn into long term, billion dollar companies with their own ecosystems around them, as they don’t get the chance to grow before being snapped up for their technology or market position. That holds back the wider European tech economy and reinforces US dominance. It would be good to see longer term backing for European tech, with more IPOs and acquisitions by local companies, rather than selling out to US giants.
I don’t want to come across solely as a whingeing naysayer, as it is great news that funding is up for tech businesses across Europe. But I think there needs to be a narrower focus on what tech actually is amongst the media and investors, and a longer term attitude if Europe is ever to come close to building a sustainable tech economy across the continent.
Unless you’ve been living under a rock for the past few days, you’ll have seen that the Tour de France, the world’s biggest annual sporting event, visited the UK. From the Grand Départ (race start) in Leeds on Saturday to the final British stage from Cambridge to London on Monday, the race has been typified by enormous support, with an estimated six million people turning out to watch at the roadside.
Putting that in context the normal total number of spectators for the entire, three week event is 12 million people. Riders described the noise levels at the roadside as ‘like being in a disco’, with climbs in the Yorkshire Dales resembling Alpe D’Huez when it came to the number of spectators. Even the normally insouciant French admitted it was the biggest start to the event ever.
I was one of the six million spectators, on both the Yorkshire stages and as a Tour Maker volunteer marshal in Cambridge and am still reeling from the exhilaration of the experience, with a sore throat from the shouting.
What makes the success even more amazing is the ratio of waiting to watching. The speed of the race means that the bunch tends to be past in less than a minute – even spread out on a climb it is less than 15-20 minutes for the final stragglers to come through. Yet people were in place the day before on climbs and 5 hours ahead of the race coming through on the flat. As someone pointed out to me, at 2 hours, the gap between the publicity caravan and the cyclists themselves was longer than a football match.
What makes people, many of whom had no interest in cycling, turn out in their millions and give up their time? And, what can marketers learn from the event’s success? I’d distil it into six characteristics:
1 Ownership and Pride
From the very start, the Grand Départ was billed as Yorkshire’s chance to shine, with the chance for God’s own country to show the world what it was capable of. This spurred a frenzy of creative ideas, from knitting miles of coloured jersey bunting to painting houses, people and sheep in tour colours. Every community wanted to outdo its neighbour in a friendly, but very serious rivalry. And this spread to the South as well – events and decorations in Cambridge and Essex stepped up a gear as they were determined to rival Yorkshire.
I saw thousands of people on bikes around the stages – and importantly you could cycle on the roads for hours before the race came through, and immediately afterwards. And the bikes (and cyclists) came in all shapes and sizes – from ultra light carbon machines piloted by whippet-thin athletes to shoppers and standard bikes with enormous child carrying trailers. There may have been too much Lycra on display, but it really felt that everyone could take part without being judged on their knowledge of rear sprockets or cycle computers.
3 Planning and providing something for everyone
Recognising that cycling itself wasn’t of interest to everyone, there was a huge range of activities around the tour. From French-themed markets to public art projects, the organisers used the Tour to stimulate a whole programme of activities that brought people together. It wasn’t just the preserve of big business either – from the smallest shop to the largest company, there were opportunities to get involved without spending megabucks to become an official partner. Even if the Tour was just a chance to have a party or visit one of the fan parks with big screens, you could enjoy yourself without travelling far. Planning was meticulous, even if the sheer number of people caused unexpected delays on trains, and all the relevant authorities worked well together to deliver the event.
4 Make it real
For generations reared on seeing sports stars at a distance, the Tour is a complete change. It comes to your town and the riders pass within centimetres of the crowd (admittedly leading to some incidents as spectators misjudged the amount of space needed by a charging peloton). You have the chance to get close to the stars, rather than simply seeing them on screen. From riders signing on before the stage to warming down by their team buses afterwards, the whole spectacle is public and accessible.
5 Not stopping after the event
Too many brands are focused on initial engagement, then treat customers as expendable. Like the Olympics, the idea of legacy was central to the Tour’s success in the UK. Before Saturday, Yorkshire was probably not known by many outside Great Britain. Now, thanks to the power of the TV coverage, it has been seen by billions of people around the world. Already Yorkshire has plans for a follow-up race, and has set out its ambition to be one of Europe’s cycling hotspots, boosting tourism and the economy. We’re in the midst of a massive growth in cycling in the UK, with its associated health benefits, and the Grand Depart will spur many more people to switch to two wheels.
6 Deliver a damn good show
There’s a reason the Tour de France is the biggest annual sporting event in the world – it is absolutely enormous. 198 riders, 440 vehicles in the race convoy, at least four helicopters, and a requirement for over 14,500 beds every night give you an idea of the scale of the thing. The publicity caravan alone takes around 45 minutes to pass any particular spot. People I talked to at the roadside were blown away by the spectacle, the noise, the sirens and the free stuff thrown from the caravan. Spectators really felt that they’d been part of something to remember – no mean feat given the time they’d spent by the roadside.
Marketers should take note from the success of Le Tour en Yorkshire (et Cambridge) and learn lessons on how they can create an equivalent buzz with customers going forward. And Lycra doesn’t need to be part of it………..
A few weeks ago BBC Economics Editor Robert Peston sparked a fierce (and ongoing) debate by warning of the power of the PR industry in setting and controlling the news agenda. His views, given in the annual Charles Wheeler lecture, were that the combination of a lack of resources at newspapers and the central position of PRs as gatekeepers was leading to a world where companies and their representatives dictated the agenda. An environment full of spurious stories that at the very least obfuscated the truth, and that the worst were downright lies or spin. He concluded “I have never been in any doubt that PRs are the enemy.”
Other journalists have taken up the battle cry, with Nick Cohen describing press officers as “the nearest thing to prostitutes you can find in public life.” In response, Public Relations Consultants Association boss, Francis Ingham, called the comments ‘sanctimonious’ and a ‘venomous, ill-judged diatribe.”
As in any relationship, PRs and journalists have always taken pot shots at each other. The balance has shifted over the last twenty years – there are now more PRs than journalists, generally they earn more, and traditional media has been hit hard by the rise of the internet.
I think the argument risks getting out of hand, with both sides missing the point. Firstly, the range of the PR industry is broad, as is journalism. What Robert Peston has seen in his career working for national and broadcast media is not the same as the majority of trade or local journalists who have a much less antagonistic relationship with the PRs that pitch them stories. The same goes for political spin – I work in PR, but I’m not Alastair Campbell or Malcolm Tucker. Clearly there is abuse of position and power by spin doctors as they deliberately work to spike stories or brief against opponents. Does that mean that every PR does the same (or would like to?). Speaking personally the answer is no, as I’m not sure my blood pressure could stand it – or that the vocabulary improvement would go down well at the school gates.
Secondly, there is a big difference between in-house PRs and agencies. Press officers have a single client, their employer, who pays their salary. In this environment it is potentially easy to lose your sense of perspective, and to believe that what your organisation is doing is right, and that everyone else is out to get you. And this isn’t just competitive businesses or warring politicians, press officers at charities and NGOs often believe passionately in the cause they are espousing and want everyone else to feel the same. In contrast, PR agencies are middlemen, and rely on their ideas and relationships with the press to gain new clients. So burning bridges by bullying journalists into taking down a story or requesting copy approval may work once, but it will destroy a relationship for the future. As a PR person I must admit I have asked for stories to be changed online – but only for the simple reason they were factually inaccurate. My personal favourite is politely requesting a journalist get the sex right of the client he’d interviewed.
Thirdly, commentators need to look at the wider context. The rise of ‘content’ as an all encompassing area lumps together what was previously seen as advertorial, proper journalism, wire reports and pictures of cute cats lifted off social media close to deadline. Traditional print media have faced falling circulations and increased competition as they’ve moved online, ironically at the same time as having more space to fill. This means publications now need more content than ever before, with fewer, less experienced staff on hand to deliver it. PR and marketing-led content has filled this vacuum, whether from survey-based press releases, soft features or owned content submitted by organisations. This doesn’t have to be bad – take the Red Bull Stratos skydive or footage from any NASA mission, but it has to be in addition to real, investigative reporting rather than instead of it.
The balance between journalists and PRs has changed. However that doesn’t mean that journalists don’t have power – or that the relationship should get too friendly. Whatever happens day to day, journalists and PR people do have differing jobs to do – and neither should forget that. Not all PR people are power-crazed Alastair Campbells – nor are all journalists Andy Coulsons…………
Amidst all the hype about the rollout of 4G and the excitement around fibre optic deployments (note to BT – I’m still waiting, and you said I’d have it in June), the UK has a hidden issue when it comes to communications. Too many rural areas still don’t have a decent, basic mobile phone signal.
In my village, in the middle of Suffolk, only one provider has any reception – and that is just 2G, not even 3G. When the local mast went down for a month last year it paralysed rural businesses, as well as impacting on the lives of local residents. And this is not the Outer Hebrides – I’m less than an hour from Cambridge and Norwich, and 20 minutes from several major towns.
Given my experiences, the news that the Government is considering forcing mobile phone operators to share their networks (so called national roaming), to widen choice, looks like a positive move. Putting aside the fact that the starting point for the new rules was apparently David Cameron being unable to get a signal while on holiday in Norfolk, it should benefit anyone living in the countryside. It will help stem the growing gulf between rural communication ‘have nots’ and urban dwellers with 4G and superfast broadband. A similar system operates in the US, which has a lot more challenging terrain than over here.
Obviously the mobile phone operators are crying foul, pointing out that they have spent heavily on masts in rural areas, and being forced to share their infrastructure will jeopardise future investment. Frankly, I just don’t buy this. Everywhere else they have competition and somehow survive – after all, most people pick a network operator on price/what you get for your money, rather than “do I actually get a signal?” At the moment they have captive markets that they have carved up amongst themselves, forcing people to choose by postcode, not package. Sharing infrastructure makes it more cost-effective and opens up new markets. Additionally the government has promised £150m to improve areas where there is no coverage at all.
The government claims it has big plans to turn the UK into a skills-based, technologically literate society. Entrepreneurship is being encouraged (albeit focused heavily on the media-centric Silicon Roundabout), coding is being re-introduced into schools and infrastructure projects promise faster links between major cities. So far rural areas have been left behind – with high speed broadband projects running late and a lack of skilled jobs hitting local economies. It is time for the government to address these issues or risk creating a two speed economy that deprives those of us in the countryside of the same opportunities open to the rest of the United Kingdom.