Revolutionary Measures

From startup to scale-up economy?

In previous blogs I’ve talked at length about the UK’s inability to turn a high enough percentage of tech startups into market leaders, compared to countries such as the USA. This may be changing, according to a new report from the Startup Europe Partnership (SEP). This identifies around 400 tech ‘scale-ups’ – essentially startups that have raised more than $1 million over the last three years. 70% of these received funding of between $1-$9 million, with 15 raising over $100m.

English: Map of Europe, indicating continental...

Taken at face value this looks like great news – investment is up and the UK is leading Europe when it comes to building viable, long term businesses. However dig a bit deeper into the data and some issues emerge. SEP is upfront that its research just covers what it calls ‘ICT’, and misses out biotech, cleantech and what it calls hard-tech (and there was me thinking all tech was hard).

So the lists of companies named are dominated by companies that essentially use the internet as a platform for their business – such as Wonga, Truphone, Funding Circle and white goods retailer AO World. All, with the exception of Wonga, solid companies that are expanding rapidly, but not really what I’d class as technology companies. The problem is that they tend to attract more capital, and consequently elbow the likes of Ubisense (which raised $14.5 million through its IPO in 2011) from the front page of the pretty graphs. And if you grow organically, without needing additional investment, you don’t show up at all.

Is this an issue? I think it is from both a perception and a valuation point of view. The general public ends up thinking of a startup as being something like Spotify or Just Eat, rather than a company that provides clever technology that may operate invisibly to them, supporting the wider digital economy. This can have a knock-on effect on press coverage, recruitment and ultimately the type of startups that are founded. Additionally investors are motivated by returns, and if they see that the payback is better with less technical, more consumer-focused businesses they are likely to invest accordingly.

It would be rude of me to sound like I’m completely knocking SEP. They are shining a light on the European tech sector and at the same time lobbying to increase the support that startups get, in particular by connecting the fragmented European tech economy. But, if we are to present the tech sector in the best possible light, we need to widen the discussion away from the flashier end of the market and embrace the difficult hardtech area. After all these are the ideas and companies that have the potential power to really change the way we live, work and play, and consequently deliver the biggest benefits to Europe as a whole. We need more ARMs, and fewer Wongas, and to start, more rigorous definitions of what a tech startup – or scale-up – actually is.

November 26, 2014 Posted by | Cambridge, Startup | , , , , , , , , , , , | Leave a comment

Uber and PR – how not to handle the media

There are a lot of jobs I wouldn’t want in PR – helping North Korean leader Kim Jong-un or promoting cigarette companies. But head of PR at lift-sharing company Uber has catapulted itself to the top (or should that be bottom) of my list.

London anti-Uber taxi protest June 11 2014 by David Holt via Flickr

London anti-Uber taxi protest June 11 2014 by David Holt via Flickr

Any disruptive tech company is going to hit the headlines, but here are some of the stories that the aforementioned head of PR has had to deal with:

  • Upset cab drivers across the globe, angry with its business model, sparking protests, riots, and bans in countries such as Germany (though some restrictions have now been lifted).
  • Consumer complaints about its practice of charging more at peak times.
  • Taking out full page ads plugging the service on the same day that a mass demonstration of London cabbies brought the City to a halt.
  • Claims by rivals such as Hailo that it tried to squeeze out potential investors in its service.
  • Accusations of dirty tricks, such as getting its employees to book, then cancel rides with competitor Lyft in order to waste driver time and company resources.
  • Safety concerns, focused on the lack of driver vetting at the company, with reports of female abductions and a lack of concern for passenger safety.

And now it faces charges that, at a private dinner attended by journalists, its senior vice president of business, Emil Michael mooted the idea of spending a million dollars to hire a team to dig up dirt on reporters that had written negatively about the company. He has since tried to retract the comments, and a spokesperson has helpfully pointed out that “these remarks have no basis in the reality of our approach.” CEO Travis Kalanick has also issued a rambling, multi-Tweet apology.

But aside from the cosmic stupidness of airing such views at a dinner attended by journalists (and showing that, yet again, there’s no such thing as off the record comments), Uber needs to understand that few things bring journalists together more than an attack on one or more of their number. Not only has the row sparked fresh bad press, but it will have also impacted how journalists see them. And that’s not as the plucky David against the Goliath of the global taxi industry (as Kalanick claims they are), but as a playground bully trying to buy its way to success. More Jerktech than technology leader.

So what would my advice be to the PR team at Uber? To start with, realise you aren’t in a war and everyone isn’t automatically out to get you. Be more open and take on board criticisms and start a dialogue rather than using heavy artillery. If your service and approach are innovative enough you don’t need to bully the opposition so blatantly, risking bad feeling from your customers and the wider world. Essentially, stop acting like a stroppy teenager and grow up. And, above all, never try and threaten a journalist, whatever the circumstances.

November 19, 2014 Posted by | Marketing, PR, Startup | , , , , , , , | Leave a comment

Will Apple take a bite out of Cambridge?

Rumours are currently rife that Apple is about to open an office, albeit a small one, in Cambridge. The research and development centre would initially employ 20 people, so while it is a coup for the city, it is obviously a drop in the ocean compared to the estimated 54,000 tech employees in Silicon Fen. I’d imagine more people currently work in the electronics department of the city’s John Lewis selling iPads and iPods.

English: Map of Cambridge dated 1575. The insc...

The move comes on the back of Qualcomm buying CSR, HP acquiring Autonomy and the opening of research and development centres by Microsoft and AstraZeneca in the area. Taken together these investments can be seen as a real demonstration of the importance of the ideas and skills within Cambridge – and, the potential benefits (business and PR) of associating with the Cambridge Phenomenon.

However, I think there are positive and negative sides to the interest from tech giants in Cambridge. On the plus side, it reaffirms the city’s strengths as a hub, attracts more skilled staff to the area and, in turn, spawns new startups as employees with ideas leave corporate life to launch out on their own.

But there are also two downsides that potentially impact the good news stories. Firstly, there is a risk that with big investment the tech culture can become too corporate. After all, a lot of Cambridge innovation has come from finding solutions to problems in quirky, very different ways. For example, Intel wouldn’t sell Acorn chips for its new range of computers. The company couldn’t afford to build a billion dollar factory to make its own chips, so came up with the first fabless design. Acorn spun off this knowledge as ARM, now Intel’s biggest competitor.

Before that Clive Sinclair built a scientific calculator that used clever algorithms to run calculations on a single, relatively standard chip. Rivals such as HP used five chips and consequently built machines that were much more expensive. The SureFlap microchip controlled cat flap was created by a physicist who didn’t want neighbourhood moggies invading his house. All of these are examples of the lateral thinking that Cambridge is famous for – but could potentially be stifled by corporate politics (and, ironically too much money).

However I think that while the Cambridge culture may change, it won’t unduly impact its DNA. After all, in Silicon Valley enormous behemoths and nimble startups co-exist with people moving between the two. What is more serious is the second threat of a lack of infrastructure, particularly affordable housing within the city and its locality. It is currently as expensive to live in Cambridge as in London, but with less in the way of facilities. There are plans to build 33,000 more houses by 2031, but the majority are outside the city. And if people live further out and commute by car, rather than bike, it will add to congestion and put further strain on key roads.

Obviously Apple’s 20 researchers aren’t going to add too greatly to current housing woes, but as Silicon Fen grows, now is the time to address infrastructure concerns – or risk losing the city’s status as a tech hub to better equipped rivals.

 

November 12, 2014 Posted by | Cambridge, Marketing, Startup | , , , , , , , , , , , , , | Leave a comment

UKIP – the biggest threat to the Cambridge tech industry

I’ve always tried to keep my blog apolitical, criticising politicians from all parties equally. But, given the seriousness of the rise of UKIP, I’m suspending my impartiality for a week. Why? Put simply, I believe that Nigel Farage’s party is the biggest threat to face the UK (and in particular Cambridge) tech sector for many years.

The UKIP caravan parked up in Wroxall, Isle of...

First off, I don’t seriously believe that UKIP will garner enough MPs in the 2015 election to be part of a coalition. But what it has done is to shift the debate sharply to the right in two key areas (immigration and the EU), causing the Tories to talk about curbs on the free movement of workers and set a date for an in/out EU referendum. And given that the Tories are likely to be a central part of a future coalition that is potentially very damaging.

Aside from the general business problems that limiting immigration and leaving the EU would bring, it would hit Cambridge and the startup tech scene in four distinct ways:

1. Education
Many of the highly skilled individuals currently working at or building tech companies originally came from overseas to study in Cambridge. It is already more difficult to get a student visa, and making it harder will simply put off the brightest and the best, who will head elsewhere. And every clever student who goes elsewhere diminishes the wider Cambridge academic population and impacts its reputation and attractiveness to new students.

2. Skills
Pretty much every Cambridge startup I’ve worked with has an incredibly diverse workforce, with employees from every corner of the world. They’ve chosen to come here, or have remained after study, and helped build amazing success stories with their skills. These are incredibly sought after and mobile people – limiting entry for them to the UK will mean they simply go elsewhere.

3. Entrepreneurs
Charles Wang, the founder of US software company Computer Associates once had a policy of only employing first or second generation immigrants in management roles. Wang himself was born in Shanghai and moved to New York when he was 8 years old. His reasoning was that immigrants had drive, entrepreneurialism and a desire to make something of themselves. Given they often arrived with nothing, they had no safety net, unlike established citizens who had never faced the dangers of real failure. Wang’s view is limited – I know plenty of driven, successful entrepreneurs from stable British families, but he has a point. Limiting immigration removes these potential entrepreneurs and the benefits they bring to their adopted country when it comes to jobs, taxes and the wider economy.

4. Ideas
A tech cluster like Cambridge isn’t about individuals, no matter how skilled they are. It is about how they interact together and share and develop ideas, based on their own knowledge and experience. Diversity is key – if you bring together a group of people with similar backgrounds and experience you’re unlikely to get the range of ideas that comes from a wider group. Ideas play off each other and grow – take away diversity and you severely weaken the idea gene pool.

In answering my points, critics may well make one of two arguments. Firstly, that we’ll still let in the best, most skilled people – it is the jobless benefit seekers that we want to turn away. That may be true but will they want to come to a country that appears so unfriendly to outsiders? And, how do you spot the entrepreneur or Nobel Prize winning physicist to be? They could be the yet-to-be-born child of immigrants that initially came over here to work in agriculture or to escape persecution in their home country.

Secondly, people will point to the US, which has restrictive immigration policies, yet the biggest tech/entrepreneur sector in the world. The difference is that the US is a country built on immigration, with a culture that rewards risk-taking and encourages people to try again after failure. We still don’t have that attitude in the UK, and we need free radicals to act as a catalyst to help change things.

The last 20 years have seen a huge expansion in the Cambridge tech scene, driven by the combination of ideas, skills and experience of people from many different backgrounds. Cutting off or limiting the flow of entrepreneurs, workers, students and researchers from outside the UK would completely change this energy and dynamism. It would still survive, but would be weaker, more insular and less exciting. That’s why it is important to tell politicians of all parties that we want to encourage responsible immigration and EU membership to build a successful Cambridge tech sector that benefits us all.

October 29, 2014 Posted by | Cambridge, Creative, Marketing, Startup | , , , , , , , , , , , , | Leave a comment

Does Apple Pay spell the end for banks?

There aren’t many people that actively like their bank. In the wake of the credit crunch and subsequent bail-out, bankers became the focus of people’s anger, being accused of recklessness at best, and outright fraud at worst.English: ATM Bank Albilad, Riyadh Saudi Arabia...

At the same time the rise of technology has eroded the central position retail banks have in people’s lives. The majority of us do most of our banking online, with the main physical interaction happening through the screen of an ATM. We don’t know who our bank manager is – and they probably don’t have any leeway to get us a better deal on our mortgage.

So, it is unsurprising that new entrants have been looking at the sector. PayPal has grown to be the de facto way of paying for goods on eBay, and has now spread to lots of other sites. Its smartphone app now makes it easy for people to pay for goods on the high street as well. Bitcoin goes further, not just marginalising banks but the entire idea of a national currency.

However the real threat to banks is from brands coming into the market and pushing them into the background. The launch of Apple Pay in the US this week is a prime example of what might happen. By using your iPhone 6 (or Apple Watch) and Near Field Communications (NFC) you can simply pay by waving your device close to the payment reader. The built-in fingerprint sensor in the iPhone provides security (unlike traditional contactless cards), and the money is automatically debited from your bank account.

Of course, the money paying for the things you buy still comes from your traditional bank account. But in an era of low interest rates, essentially it turns the bank into a safety deposit box which stores your money, with the front-end, customer facing activity controlled and branded by Apple. That is partially down to the stringent regulations you need to meet to become a bank, and also down to where the highest margins are within the transaction.

So what can banks do to out-innovate the likes of Apple? And can they change a culture still built on retail, branch-based banking to reflect a modern, mobile-first lifestyle? Barclays has launched a service called Pingit which lets you send money to friends or family and pay bills, even if you are not a customer of the bank. Since launch in 2012 the Pingit app has been downloaded 2.5 million times and £350m has been sent through the service. But this is small change in the overall scheme of things.

Apple’s biggest competition may well come from Zapp, a service run by payments processor VocaLink that uses your existing mobile phone banking app and account for payments. Scheduled for launch in 2015 it has two big advantages over Apple and Pingit – it runs on all smartphones (unlike Apple Pay) and is seen as independent from an individual bank, although it is not yet supported by all of them.

The battle to control payments and the front end to banking promises to be fascinating. Will Apple’s brand triumph, despite (or even because of) its exclusivity or will Zapp’s wider approach succeed? How can both companies market themselves to overcome security fears and gain traction with a wider market beyond early adopters. Add to this that Google is rumoured to be buying PayPal to give it a foothold in the market, as well as other innovations yet to launch, and 2015 promises to be a busy year in the battle to replace your wallet.

 

October 15, 2014 Posted by | Creative, Marketing, Startup | , , , , , , , , , , , | Leave a comment

What’s the right size for a tech company?

The news that HP is splitting itself in two (ironically a few years after a previous CEO lost his job for proposing the same idea) made me think about the size and structure of tech companies. Some companies invest in growing rapidly and aim to be biggest in their field, others focus on niches, while a third group aim to be a jack of multiple trades, spanning diverse sectors.

HP was previously in the jack of all trades camp, with its fingers in lots of different pies, from enterprise software and services, through servers and networking equipment, to consumer PCs and printers. It will now become two companies, one focused on the enterprise and the other on PCs and printers. Sadly, it haEnglish: This sign welcomes visitors to the he...s missed the chance to name one H and the other P, going instead for the more prosaic Hewlett Packard Enterprise and HP Inc.

While the two companies will be smaller, they will still each have over $50bn in revenues, and are likely to be hard to disentangle. At the same time eBay has announced it will divest its PayPal subsidiary, following pressure from shareholders and the entrance of Apple into the payments market. I must admit to being cynical about efforts by many tech titans to refocus themselves – it can look suspiciously like a random throw of the dice that keeps investors happy but has no real long term strategy behind it. After all, the world’s most valuable tech company, Apple provides software, hardware (mobile and desktop) and music and video content, alongside payments, maps and health data. And no-one has yet pressured it to split.

However there are definitely optimum size and types of company, depending on the maturity of the market they are in. Emerging sectors, such as the Internet of Things, change fast, so a company needs to be flexible and focused, with the ability to pivot quickly and respond to market conditions. It stands to reason that smaller players will be able to do this faster than legacy behemoths.

Mature markets run less on innovation, with much tighter margins. You are selling a replacement piece of software/hardware and any new features are likely to be incremental not transformative. Consequently the bigger you are the greater the economies of scale when dealing with suppliers and customers. The car industry is a perfect example outside the tech industry, where you need to be big to have a chance of profitability.

The tech industry is going through a rapid wave of change, driven by the move to the cloud and the rise of mobile devices. Previous shifts (such as from the mainframe to the minicomputer and then the server) have led to market leaders falling by the wayside – does anyone remember the likes of Data General for example? In fact HP has done well to survive so long, with a heritage that dates back to 1939. What will be interesting to see is if can make it to its 80th birthday in 2019, or whether it will be carved into even smaller chunks before then………..

 

October 8, 2014 Posted by | Cambridge, Marketing, Startup | , , , , , , , , , | Leave a comment

Selling out too early

Cambridge is rightly highlighted as one of Europe’s biggest innovation hubs, particularly when it comes to commercialising ideas that began in the research lab. This has spawned a huge biotech sector, and helped create a series of billion dollar tech companies that lead their industries, such as ARM and Cambridge Silicon Radio (CSR).

The University of Cambridge has the largest un...

The Internet of Things (IoT) has been identified by many commentators as a key emerging market – and one where Cambridge has the ecosystem, experience and ideas to play a major role. So the news that IoT pioneer Neul has been sold to Chinese telecoms equipment behemoth Huawei depressed me. Not for nationalistic reasons, but simply due to the low reported purchase price ($25m) and the fact that the company has cashed out so early in the growth process. While there was a fair amount of PR spin around Neul’s progress to date, I genuinely believed it could join the billion dollar Cambridge club by developing its technology and building alliances and routes to market.

At the same time, Cambridge Silicon Radio is mulling a multi-billion pound sale to US firm Microchip Technology, reducing the number of major, independent, quoted Cambridge companies. Obviously investors and founders do look to realise their profits at some point, but it is important to balance this by looking longer term. While those that put money into Neul no doubt got a decent return, think how much more they’d have received if the company had been allowed to grow and exploit its market position.

I’m not alone in taking this stance. Cambridge Innovation Capital (CIC), the University of Cambridge-backed VC fund, recently warned its portfolio companies against selling out too early and promised to provide long term, founder friendly, capital to help grow the next ARMs and CSRs.

So what we need is the support, both financial and in terms of time, that gives companies the ability to achieve their potential. Not all of them will make it, and many will be niche players that logically fit better within bigger companies – but at least they’ll have had the ability to aim for the stars before finding their real place in the world. Otherwise Cambridge (and other parts of the UK tech scene), will simply act as incubators that turn bright ideas into viable businesses that can be snapped up and digested by tech giants looking for the newest innovation. It is much better for both the local and national economy that some of these startups make it the stock market as fully fledged businesses, creating ecosystems that generate new sectors and jobs. This requires longer term thinking from everyone involved – otherwise the number of billion dollar Cambridge companies will shrink even further.

October 1, 2014 Posted by | Cambridge, Marketing, Startup | , , , , , , , , , , , , , | 3 Comments

Smartphones will eat the world

Commentators are full of predictions that software will eat the world, with jobs, industries and traditional means to doing things swept away by the rise of technology. From automated journalism to connected cars, the claim is that we’re undergoing a transformation in how we work, live and play.

While Apple has not listened to my complaints ...

Software is revolutionising the world around us, but I’d contend that there’s a much more disruptive factor impacting our lives – the smartphone. It essentially provides an always-on, easy to use, ubiquitous interface with all of the software around us. Without it we wouldn’t be able to access the power of technology. So, rather than software eating the world, I’d pinpoint 9 ways that smartphones are making a meal of it:

1. Health
Smartphones have the ability to monitor our vital signs and transmit information to doctors and medical staff in real-time. Whether it is using in-built or external, Bluetooth equipped sensors, smartphones will disrupt the health industry. Apple’s new focus on building a health ecosystem is just part of this trend, which can either be seen as a force for good or as allowing intrusive snooping on our most private moments. On the plus side patients can be monitored remotely, allowing them to remain at home rather than going into hospital for certain conditions, but confidentiality of data remains a worry. What if your insurance company could access your health data and amend your premiums accordingly?

2. Taxis and transport
Companies such as Uber and Lyft are radically changing the taxi market by removing the overhead (justified or otherwise) of traditional operators. Anyone can become a taxi driver – all they need is a car and a smartphone (which can also serve as your GPS, so you don’t need the Knowledge to direct you to the right place). This does raise potential issues about safety, vetting and insurance, hence the bitter battles being fought between traditional cab drivers and the new upstarts.

3. Marketing
At no point in human history has so much data been available about individuals. The combination of ‘free’ services such as Google and Facebook that hoover up our personal information and preferences, with the geolocation data from a smartphone mean that companies have the ability to understand more about their consumers than ever before. The challenge for marketers is twofold – they need to ensure that they have real, informed consent from consumers when handling their private data, but at the same time have to evolve the skills to sift through this big data to deliver personalised marketing that drives engagement. The traditional model of campaigns that take months to plan and implement is rapidly going out of the window – if marketers can’t adapt they risk being sidelined by ever cleverer algorithms.

4. Payments
There is something impressive about a pile of cash – even if it is just one pence pieces. But carrying it around is another story. Replacing pounds and pence with the ability to tap to pay even the smallest amount with your phone promises to turn us into a cashless society. And it also removes the need for a wallet full of credit, debit or loyalty cards. All you’ll need to do is select how you want to pay on your phone and the software will handle the transfer. Could we see traditional banks and financial services companies replaced by Apple Money – or even currencies swept aside by electronic dosh? It is certainly possible, hence Apple’s move into the sector with the iPhone 6.

5. Telephones
It may be difficult to remember, but when they began, mobile phones were for making phone calls or sending text messages (and playing Snake if you had a Nokia). Now the number of calls made and received is a fraction of before, as people move to messaging, email and free voice over IP services such as Skype. Many of us already pay more for our smartphone data plans than for calls and texts – meaning that mobile phone (and landline) operators will need to evolve new services if they are to be part of the smartphone future.

6. Toys
Growing up in an analogue world, toys and games were very straightforward. Now traditional toys are evolving to embrace both full on mobile gaming (think Angry Birds) and half way houses where the physical meets the virtual. Software such as Skylanders combines playing pieces containing electronic chips with fully fledged games to give a radically new experience. And this is just the beginning. As immersive technologies such as Google Glass and Oculus Rift gain traction we’ll find it difficult to tell reality and gaming apart. How long before people embed chips in themselves to become part of the latest smartphone game?

7. Utilities
Buying power is a necessary evil – and the battery life of smartphones does mean we’ll always need electricity to recharge them. Mobile devices, combined with sensors and the Internet of Things provide the ability to monitor and adjust how we use power. From turning smart thermostats up or down, to only switching on lights when the smartphone user is in the vicinity, they can change energy use. Taken a step further, consumers could cut out the energy company and use their smartphone to buy power directly from smaller producers, adding flexibility and potentially bringing down prices.

8. Insurance
The problem with insurance premiums is that they are based on averages, rather than knowledge of your individual circumstances. The data within a smartphone, either directly monitoring your movements, or linked to a sensor in your car, provides a deeper context around your behaviour and habits. Used properly this can help better judge the risks of insuring individuals – but again used incorrectly it will cause a privacy backlash.

9. Pub quizzes
As a Trivial Pursuit expert (and part of the reigning village quiz team champions) there’s nothing I like better than the chance to show off my knowledge. But how can pub quizzes survive in an era when Wikipedia can be accessed from your smartphone in milliseconds? Short of holding quizzes in exam conditions, with no toilet breaks where people can sneak off to check answers on the internet, cheating is going to become rife, making my carefully assembled general knowledge useless.

Research shows that the majority of us access the internet more through mobile devices than traditional PCs. And 20 per cent of young American adults admit to using their smartphones during sex. We look at our phones constantly, panic if they are out of sight for a minute and feel bereaved if they are lost or stolen. If it is true that software is eating the world, the smartphone is the knife, fork and plate responsible for the repast.

September 24, 2014 Posted by | Marketing, Startup | , , , , , , , , , , , , , | 1 Comment

Sting, Simon and Sex – 20 years of the Smartphone

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.

English: The first smartphone "The Simon&...

English: The first smartphone “The Simon” by IBM and Bellsouth (AT&T) (Photo credit: Wikipedia)

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……..

August 20, 2014 Posted by | Creative, Marketing, Startup | , , , , , , , , , , | 1 Comment

The end of old media?

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.

A landline telephone

A landline telephone (Photo credit: Wikipedia)

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:

1. Demographics
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.

3. Privacy
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.

August 13, 2014 Posted by | Creative, Marketing, Startup | , , , , , , , | Leave a comment

Follow

Get every new post delivered to your Inbox.

Join 60 other followers