Revolutionary Measures

How my consultancy is bigger than Facebook UK – and that’s a bad thing


I’ve been in business for five years now, and things are going well. I’ve seen revenues for my PR agency grow every year, thanks to loyal clients and (if I say so myself) some wonderful work. Yet it was only when I saw how much corporation tax Facebook paid last year in the UK, that I realised exactly how well I was doing. Comparing our two tax bills, I’ve paid considerably more than the £4,327 Facebook shelled out in 2014. Therefore it stands to reason I must have made much more money than the social network, even if globally its profits were $2.9 billion. Its UK business must just be lagging behind the rest of operations – after all very few people use Facebook in this country.

Facebook logo Español: Logotipo de Facebook Fr...

Obviously this isn’t the case, and like companies from Starbucks to Google, Facebook has engineered its operations to minimise its tax bill. As a businessman myself I can understand this – but what I can’t understand is that it doesn’t take into account the reputational damage that results. After all, company filings are public documents that anyone can access, and there are enough people out there who know how to read a balance sheet and can therefore spot holes in a company’s story without needing to spend too much time investigating.

I even felt sorry for the poor PR spokesperson delegated to read out the anodyne statement that Facebook was compliant with UK law, and all staff paid income tax (how gracious!). Then I realised that the spokesperson was one of the 362 people that shared the £35.4m in bonuses that pushed Facebook’s corporation tax bill down so close to zero, and any sympathy evaporated.

On one hand companies talk about how important their brand, and brand values, are to their success, yet cheerfully spend their time undermining these very same values from within. Why? I think much of this comes from a fundamental disconnect between senior management and those responsible for public relations or brand reputation. They aren’t involved in senior-level decision making, meaning that no-one is pointing out the potential pitfalls of being seen as a poor corporate citizen. In an age of consumer power, the lack of a check on potential corporate skulduggery can prove fatal to a brand.

Ever since I’ve been in public relations, which is over 20 years, there have been calls for PR to have a seat on the board and to be more involved in setting strategy, rather than just delivering it. So why hasn’t it happened yet? Partly it comes down to PR’s own reputation, with the discipline seen as more Ab Fab than strategic, and limited in what it can achieve. The rise of digital and the increase in the importance of corporate reputation should have changed that, but my impression is that the overwhelming number of FTSE 100 companies still don’t have or seek senior level PR counsel until too late in the process.

It is therefore time for PR people to take a step up and build the business understanding that they need to communicate with other senior management. Talk their language, link campaigns and messages to business goals and objectives, and if necessary, scare the bejesus out of people by explaining the financial (and even judicial) consequences of not thinking through decisions or ignoring dubious practices. While Facebook’s tax policies haven’t hit its share price, just look at Volkswagen’s financial woes for an illustration of what happens when you cover up bad behaviour. Despite its US head admitting he was briefed on how the car maker could fool emissions tests in spring 2014, nothing was done to remedy the problem or to come clean.

Looking at the PR implications of business decisions shouldn’t just be limited to big companies with expensive communications departments. Every company has the potential to be caught out if it transgresses the brand values that it trumpets to the world. So whether you are an international social network or a local plumber, think through the PR consequences of your strategy, before you implement it, if you want to avoid potential long-lasting reputational damage.

October 14, 2015 Posted by | Creative, PR, Social Media | , , , , , , , , , , | Leave a comment

Has Twitter spawned Jeremy Corbyn?

Amidst all the column inches written about the election of Jeremy Corbyn as Labour leader, there are a couple of factors that people seem to be forgetting. True, he is probably now the most famous Jeremy in the country (according to an unscientific Google search I just carried out, links to stories about him outrank Clarkson and Kyle), but he is actually part of a wider protest movement across the Western world. Far left Greek party Syriza has just been re-elected, despite backtracking on its promises to free Greece from onerous bail-out terms. Spanish left wingers Podemos have also shown well in opinion polls while Catalan nationalists won a majority, albeit a slim one, in this week’s regional elections. Going back to the UK, look at the success of the Scottish Nationalists at the election and the continued high profile of Nigel Farage.

Jeremy Corbyn

Across the pond, non-politicians such as Donald Trump and Carly Fiorina have been leading polls amongst Republicans, while Bernie Sanders, who describes himself as “the only elected socialist in Congress”, is keeping Hillary Clinton honest in the Democratic contest.

So why are voters across Europe and the United States supporting mavericks on the right and left, even if in many cases there is little chance that they will be able to carry out their policies?

No dead pig bounce
The easy answer is that they are sick of career politicians who seem keener on hanging onto power than actually connecting with voters. Many people think politics itself is broken. Even David Cameron’s alleged assignation with a dead pig just makes us shrug and doesn’t really impact his ratings either way. At the same time many people still don’t see the good times coming back after the recession – real wages in the UK are still below those of before the crash for many people, hurting confidence. Globalisation and the rise of ever-more intelligent computers is eating into traditional middle class occupations, causing uncertainty for those with skills that can be potentially automated or offshored.

Obviously, any alternative to this combination of depression and drabness has a chance to stand out from the crowd. And challenger politicians can get away with half-baked policies or even, as in the case of Donald Trump, a promise that he’ll come up with some “really good ideas” when he is elected.

But I think there is a more fundamental force at work – the internet and social media has completely changed how we consume our news and form our opinions. We live in Andy Warhol’s era of everyone being famous for 15 minutes, from a man captured on camera abusing a motorcyclist to celebrities reciting music lyrics with a Shakespearean twist.

What the likes of Corbyn and Trump share, despite their radically different views, share is a combination of solidity, outsider status and an ability to come up with inspiring (or eyecatching) soundbites that suit social media. They don’t appear stage managed but at the same time are reassuring while not being part of the establishment.

Politics 2.0
In many ways they are the start-ups of the political world, promising radical change to shake up a traditional market, in the same way that the likes of Google, Amazon and Uber have changed the industries they operate in. Perhaps voters believe that politics can be re-invented, just like retail and telecoms.

What will be interesting to see is how traditional politicians respond – will they continue to operate as before, like many of the companies that digital start-ups displaced, or can they re-invent themselves successfully and build a brand that fits with the internet electorate? Or will we see a new generation of less radical, but more social media savvy, politicians come through to replace the likes of Corbyn and Trump? One thing is for certain, in politics as in every other sector, those that cope best with today’s social, mobile world will be those that engage with voters and ultimately win their loyalty and power.

September 30, 2015 Posted by | Creative, Marketing, PR, Social Media | , , , , , , , , , , , , , , , , | 1 Comment

Death of a (car) salesman

Like anything, buying a new car has positive and negative parts to the journey. The excitement of choosing and test driving a shiny new vehicle has to be balanced with haggling with a salesman in a dealership and painfully avoiding the add-ons and extra warranties that they want to burden you with (and co-incidentally give them a bigger commission than on the car itself).

Automobile dealership - service and repair are...

Yet, the internet was meant to remove middlemen and enable us to deal direct with the producer. It has worked in industries such as travel, where package holiday companies have had to reinvent themselves in an era of cheap flights, AirBnB and TripAdvisor. But for bigger ticket purchases we still rely on car dealers and estate agents rather than dealing directly with manufacturers or those selling their house.

The end of middlemen?
So why are these middlemen still here and will they survive for much longer? After all, most buyers now read car reviews online, check manufacturer videos on YouTube, get information on options from websites, and can arrange finance quickly at the click of a mouse. No wonder that the average number of dealers that buyers visit when purchasing a new car has dropped from 5 to 1.6 in the US over the last ten years. As in a lot of fields, more and more research is carried out online without needing to interact with anyone, let alone a sweaty dealer in an ill-fitting suit.

Illustrating this trend, upstart electric car company Tesla is looking to go direct to customers in the US, cutting out dealers altogether. Other manufacturers are trying more limited experiments with special editions sold online only or dealerships remodelled to be more like the Apple Store, with advisors providing information and help, but no hard sell.

The pace of technology change within the car also threatens to make the dealer obsolete. Modern cars are computers on wheels, streaming data back to the manufacturer and able to refresh their operating system remotely without human (or mechanic) intervention. Tesla regularly updates the software on its car over the air– with an upgrade in January 2015 improving the performance of its Model S, meaning it can match the acceleration of a McLaren MP4-12C.

However as a recent piece in The Economist points out, changing the system will be difficult. Dealers are a powerful lobby, and while they don’t make much money on each new car they sell, the ancillary products and ongoing servicing relationship can be extremely lucrative. It also provides buyers with the opportunity to get a better deal by haggling between rival garages – if you have the inclination to do so.

I think that there are more basic reasons for any middleman, whether a car dealer or travel agent, to survive – adding value, trust and ease. These are important concepts for any company in the digital age to embrace and it is worth looking at your business with these in mind.

1. Adding value
With the vast majority of information now a Google search away on the internet, and prices displayed for everyone to see, do you really add value or are you a hindrance to the process? Again, the Apple Store is a good example to follow. You can buy your iPad from one of a hundred shops or websites, but the help you receive and the ability to get your questions answered in a positive, unpatronising way naturally leads people to the Apple Store.

2. Trust
Do consumers trust you? Or more to the point, do they trust you more than the manufacturer you represent? One of the factors I think will hold back the demise of dealerships is that consumers trust car makers less. You only have to look at botched recalls and unreported faults to see why. Car makers are also much more distant than your local dealership, making it difficult to build a relationship of trust. That’s not to say dealers are safe – they regularly top polls of least trustworthy occupations, but in the kingdom of the blind, the one eyed man is king.

3. Ease
People have to do more and more with less and less time. In many ways the internet has made us more time-poor. Whereas before a holiday could be booked by marching into the travel agency and asking what they had available, it now takes hours of internet research, comparing the relative locations of villas on Google Maps and poring over TripAdvisor reviews. Those middlemen that still have a place recognise that they need to make things easy, providing a helpful service that cuts down the time you need to spend and removes roadblocks from the customer journey, without charging the earth.

Looking at your own business, do you meet these three criteria? If not, it is time to change, before pressure from consumers and manufacturers squeezes you out of the market.

August 26, 2015 Posted by | Marketing, Social Media, Startup | , , , , , , , , , , | Leave a comment

Are startups solving the right problems?


I don’t think there’s ever been a better time to launch a startup in the UK. The public profile of the tech industry is incredibly high, and those that create businesses are more likely to be seen as visionary entrepreneurs than cranks who couldn’t get a job in a proper company. Indeed, for those leaving university, setting up your own startup is a valid (if not as initially lucrative) alternative to becoming an accountant, banker or lawyer. I’m sure startups would complain that it is still difficult to raise money, or scale up their businesses, but it feels that there is now wide public and political acceptance of the importance of creating a culture that encourages startups.

Relief map of Europe and surrounding regions

Read the press and politicians’ speeches and there seems to be a relentless search to find the ‘European Google’ or ‘British Facebook’, multibillion dollar global companies that can become standard bearers for the industry. Alternatively, other European companies essentially mimic what is being done in the US, taking their business models, localising them and then hoping that first mover advantage will let them create viable businesses before the original enters the market.

The people that run startups are smart, as are the venture capital funds that back them. But are they looking in the right areas when it comes to creating new businesses – as an article by Liam Boogar in Rude Baguette recently asked “Where are the European startups to solve Europe’s biggest problems?” Leaving aside the question of whether Europe is cohesive enough that the same problems apply to life in Edinburgh, Athens and Bucharest, it is a valid point. What issues can be solved, first in Europe, and then expanded globally, to create thriving companies that benefit us all?

The article focuses on the need to shake-up the savings market, and with interest rates in many countries close to (or even below) 0% I can see the opportunity to transform the sector, such as through peer-to-peer lending.

However, what other areas would enable European startups to build global businesses? Thinking about the particular problems Europe faces, here are four that come to mind:

1. Healthcare
Across Europe, people are living longer and birth rates are falling. Longer lifespans increase pressure on health and social care services, as the elderly battle chronic diseases and poor health. While this isn’t just a European problem, it is one that startups can focus on, particularly given the public money currently being spent on healthcare research. Areas such as wearable monitors and the Internet of Things can potentially help improve the quality of care, even allowing people to remain in their own homes, rather than be treated in hospital.

2. Transport
From driverless cars to drones, technology is revolutionising transport. With its combination of major car and aeroplane makers, Europe is well-positioned to lead the way, but it needs an injection of startup energy and fresh thinking to succeed. Whether it is new ways of charging electric vehicles as they wait at traffic lights or smarter cities where you are automatically guided to the nearest parking space, there is plenty of scope for innovation, along with the chance to scale up to export the technology across the globe.

3. Employment
More than 6 million jobs were lost in the recession between 2008-13, and youth unemployment in many countries remains high. Many of the roles that were made redundant are simply not coming back as they have either been offshored to lower wage economies or replaced by technology. What are needed are ways to reskill European jobseekers so that they can compete in the global market. Much of this should be the responsibility of governments, but technology can help with new ways of training, new opportunities for collaboration and the encouragement of remote working to combat rural depopulation.

4. Cutting bureaucracy
All governments, of whatever political persuasion, seem to delight in creating red tape that tangles up citizens and businesses alike. And, despite the European Union, there is still a range of different measures that need to be met. Many countries have begun to put their services online, but more can be done, and in many cases nimble startups can get things done quicker than lumbering government departments.

I’m sure there are plenty more European problems that need solving, from the environment to education. These don’t just benefit society, but are potentially extremely lucrative as well. So the challenge for startups and entrepreneurs is to try and solve them – and at the same time we might create the European Googles that politicians are so keen on.

August 5, 2015 Posted by | Uncategorized | , , , , , , , , , , , , | 2 Comments

The battle for banking – Amazon enters the fray

In a previous post I talked about how the big four internet companies Google, Apple, Facebook and Amazon (GAFA) had quickly developed their businesses. They’ve all moved beyond the sector they started in, extending what they offer to compete with each other in areas such as ecommerce, social networks, mobile devices and mapping.amazon_logo_wb_2328

How have they done this? They’ve used the four strengths that they each possess:

1. Agility
With the exception of Apple, GAFA was born on the internet meaning they aren’t burdened with long-established corporate structures compared to their traditional rivals. So they can make decisions quickly, unhindered by the warring departments and turf wars that characterise first and second generation technology companies.

2. Data
Rather than purely physical assets, GAFA’s USP is data and what it does with it. From selling our search histories to monetising our personal pages, the four companies have built up extremely detailed pictures of their users and their lives. This allows them to accurately predict future behaviour – how many times have you bought something suggested by Amazon even though you had no idea it existed until the recommendation popped into your inbox? The advent of even cheaper machine learning and potentially limitless cloud-based resources to crunch data means that this is understanding is only going to get more precise.

3. Focus on the customer experience
Even though the majority of interactions don’t offer the personal touch of a bricks and mortar shop, these companies have gone out of their way to create a simple to use customer experience. Compare the Apple iPhone to previous ‘smartphones’ – the only difficulty for users was unlearning the convoluted way you had to access information on Microsoft or Nokia devices. I know, I had one of the first Windows phones – the user experience was terrible. Innovations such as one click ordering, reviews and simple sharing all mark out internet companies from their rival.

4. Scale
The final differentiator is scale – and the speed at which it is possible to grow on the internet. Rather than taking 20 years to become dominant in an existing market, companies can create a sector of their own and expand globally within months. Part of this is down to the network effect, but scale has also been achieved by moving into adjacent markets and just adding them onto the offering for existing users. This lowers the cost of entry for the company with the user base and creates a barrier to entry to rivals.

Taking these four factors into account, banks should be worried about Amazon’s latest move as it builds on all four of these strengths. Amazon Lending will make loans to small businesses in the UK that sell through the company’s Marketplace platform, after the service was successfully launched in the US. The beauty of the scheme is that Amazon knows exactly how the small business is performing as it can track their sales, and then use this data to offer selected companies short term working capital to improve their business. As it handles all the billing and cash collection for Marketplace sellers it can even take repayments directly from their profits, before they it pays them, minimising risk.

Adding to this data advantage, it is also offering the same simple to use customer experience that sellers are already familiar with. Compared to faceless or unhelpful banks, this is just the sort of thing that expanding small businesses are looking for.

The ironic thing is that, on the face of it, there is nothing to stop banks offering something similar. Their merchant services arms handle online and offline debit and credit card transactions, so they have access to data that could be used to work out creditworthiness. They have a network of branches to provide loans through, as well as a significant online presence. But all of these are separate departments and banks don’t have the agility to bridge the silos and provide the one stop shop that businesses are looking for.

In the same way that Apple Pay is disrupting payment services, Amazon Lending will take another bite out of the traditional business of big banks. And, as more and more of such services launch that nibble away at banking profits, then they face being outmanoeuvred by nimbler, more customer-focused and cleverer competitors. It is therefore time for retail and business banks to get joined-up or face becoming low margin commodity businesses in the future.

July 1, 2015 Posted by | Marketing, Social Media, Startup | , , , , , , , , , , , , , | Leave a comment

Apple: Do no evil?

English: Apple. Polski: Jabłko.

The technology world, outside China, is increasingly dominated by four companies – Google, Apple, Facebook and Amazon. They’ve even spawned their own, rather ugly collective acronym – GAFA. What’s interesting is that while all four have started from different places in the technology ecosystem they are now competing with each other in areas as diverse as smartphones and mobile devices (Android vs iPhone/iPad vs Kindle/Fire), mapping, and retail (especially music).

But the biggest – and most lucrative – battleground is digital advertising. Both Google and Facebook are using the huge amount of information they know about their users, whether through searches or their social media profiles, to target adverts so that they are more personalised and therefore more effective. In a less creepy way, Amazon analyses what you’ve already bought and suggests potential new purchases.

This reliance on consumer data, has led to issues, with users complaining about their privacy being invaded for example. Others have pointed out that with ‘free’ services like Facebook, the consumer becomes the product, with their data effectively paying for the access they receive.

Up until now GAFA have been pretty united in their use of consumer data and attitudes to privacy. This has now changed spectacularly with Apple CEO, Tim Cook, launching a blistering attack on his rivals, stating that “I’m speaking to you from Silicon Valley where some of the most prominent and successful companies have built their businesses by lulling their customers into complacency about their personal information.”

If that wasn’t direct enough an attack on Google and Facebook, he added, “We believe the customer should be in control of their own information. You might like these so-called free services, but we don’t think they’re worth having your email, your search history and now even your family photos data mined and sold off for God knows what advertising purpose.”

Before we hail Cook as a white knight of the IT industry, it is worth bearing in mind four facts:

  1. Apple has complex privacy policies just like the rest of GAFA
  2. Advertising is key to a large number of the apps within the AppStore
  3. Currently the default search engine in Apple devices is Google, so the company indirectly benefits from “selling off your search history”
  4. He was speaking to EPIC’s Champions of Freedom event, where he was honoured for corporate leadership – so he was hardly likely to speak positively about data-driven rivals.

Putting cynicism aside, there are two other reasons for Apple to embrace privacy and break from other members of the GAFA pack. Firstly, it made a profit of $13.6 billion in its most recent quarter, so it doesn’t really need to upset its more upmarket customers by selling their data for a (relative) pittance.

Secondly, and more importantly, Apple is now moving into new areas where security and privacy are everything – payments (with Apple Pay) and health (with a new ecosystem focused on wearables and sensors). Both of these are based on the most personal of personal data, where a single misstep would destroy consumer trust and essentially stop expansion in its tracks. It might even harm the overall Apple brand.

So Cook (and the rest of Apple’s strategists) have made a choice. They believe that people are happy to pay more for premium iOS products, on the understanding that their personal data will not be abused. It is in stark contrast to Google’s focus on mass market, cheap or free products where consumers pay by giving up control of their information. As the battle within GAFA rages, it will be interesting to see which side comes out on top in both the PR and sales wars.

June 17, 2015 Posted by | Marketing, PR, Social Media, Uncategorized | , , , , , , , , , | 1 Comment

Ten lessons from ten years of YouTube

Español: Logo Vectorial de YouTube

This year YouTube celebrates its tenth anniversary. Originally founded in 2005 it has grown to have over 1 billion users, with 300 hours of video currently uploaded every minute of every day. For those without a calculator that’s 432,000 hours of new content every day.

Available in 70 countries and languages it made its founders $1.65 billion when Google bought the site back in 2006. At the time many thought they were mad, but the phenomenal growth and the amount of user data that it provides to Google has proved the doubters very wrong.

So what can startups and marketers learn from YouTube and the growth of video more generally? To mark ten years of YouTube, here are ten lessons I’ve drawn from its success:

1. Don’t always follow the rules
One of the big issues with startups in new markets is that existing legislation doesn’t cater for their disruptive power. Think of Uber and Airbnb and the regulatory issues they are having as they look to sidestep rules governing taxis and accommodation respectively. With YouTube and other video sites that launched at a similar time the big issue was users uploading copyrighted material. Competitors protected themselves by checking content before it was uploaded – slowing down their growth and adding to their overheads. In comparison YouTube let users upload anything and then took it down if lawyers or rights holders complained. This gave it a key differentiator, attracted more users and reduced its costs.

2. It is all about You
Despite the growth of brands on the site, the vast majority of content on YouTube is still created by amateurs. By giving a platform for everyone to easily share video, YouTube has been part of a democratisation of the web – as shown by the viral success of many of its videos, and the helping hand it has given to the careers of artists and bloggers such as Psy, Ed Sheeran, Zoella and many others. Brands trying to connect with audiences on YouTube need to understand that it is a two-way street – it isn’t just about providing your own content, but encouraging consumers to work with you and share what they are doing if you want to increase engagement.

3. Video is worth 10,000 words

It may have taken a few years for broadband and mobile data speeds to be able to comfortably cope with streaming video, but now it is the medium of choice for many. If a picture is worth a 1,000 words, video is at least 10x as effective as it allows people to see what is happening, rather than relying on words or static images.

4. It isn’t just cute cats
A few years ago I did some market research with C-level executives to find out where they got information from. The big surprise was that YouTube featured highly in their responses. But a quick look at some of the business content on the site – from the Harvard Business Review to TED talks and The Economist – shows that there’s plenty for any audience to learn from YouTube, whatever demographic they are part of.

5. It can be monetised
People do make money from YouTube. Aside from the celebrities and stars that have used the channel to launch themselves, owners of popular channels are able to make money from the ads around their content. The targeted audiences YouTube delivers (thanks to Google’s knowledge of viewer’s demographics), make it an important way for marketers to reach the right people quickly and easily.

6. Media has become multimedia
Ten years ago there was a sharp divide between traditional print media and the broadcast world. The combination of YouTube and cheaper, higher quality video cameras (or even just smartphones), mean that any journalist or publication can create and upload multimedia content quickly and easily. From interviews to reports, people now expect to see embedded video on news sites, with most media outlets now having their own YouTube channel to host and share content.

7. YouTube is the back end, not just the front end
For every video accessed directly on the site, many hundreds more are reached through other sites. Essentially YouTube provides a complete infrastructure for brands to set up their own channels, for free, and then embed links in their own site or other media. Again, it makes it easy for companies to share video, on or off the site.

8. Attention spans are shorter
People, particularly on mobile devices, are increasingly browsing video content, rather than settling down to watch it for a long time. While there are plenty of exceptions – my children would watch 10-15 minute videos of Stampylongnose playing Minecraft all day – most people don’t want to watch long form content on YouTube. So videos need to be short, snappy and broken up into bite size chunks if they are to be watched and shared.

9. Showing is easier than telling
Doing a DIY job used to involve poring through a manual or asking friends and family for advice. Now you simply go onto YouTube and watch a professional doing it, explaining as they go. The same applies to lots of jobs and hobbies, and with YouTube results prominently displayed in Google searches, it has never been easier to work out how to do something for the first time.

10. Innovation is constant
YouTube may be ten, but it still faces challenges. Facebook is looking to compete by making it simple for its users to share videos on the network, while streaming music services are waking up to the amount of music content watched on the site. Recently Snapchat announced that it has 100 million users watching 2 billion mobile videos every day. The shift to mobile and the fact that as video grows up it becomes more of a commodity means that YouTube needs to constantly evolve if it is to remain relevant.

Ten years is a long time in tech and social media, and the growth of YouTube shows how it has managed to build a brand by understanding what people want and giving them a platform to share. It will be interesting to see what the next decade brings – hopefully not another Justin Bieber………….

May 27, 2015 Posted by | Creative, Marketing, PR, Social Media, Startup | , , , , , , , , , , , , , , , | Leave a comment

Moore’s Law – will it make 60?

50 years ago, engineer Gordon Moore wrote an article that has become the bedrock of computing. Moore’s Law, as first described in the article, states that the number of elements that could be fitted onto the same size piece of silicon doubles every year. It was then revised to every two years, and elements changed to transistors, but has basically held true for five decades. Essentially it means that computing power doubles every two years – and consequently gets considerably cheaper over time.

"The new Hewlett-Packard 9100A personal c...

What is interesting is to look back over the last 50 years and see how completely different the IT landscape is today. Pretty much all companies that were active in the market when Moore’s Law was penned have disappeared (with IBM being a notable exception and HP staggering on). Even Intel, the company Moore co-founded, didn’t get started until after he’d written the original article. At the same time IT has moved from a centralised mainframe world, with users interacting through dumb terminals to a more distributed model of a powerful PC on every desk. Arguably, it is now is heading back to an environment where the Cloud provides the processing power and we use PCs, tablets or phones that, while powerful, cannot come close to the speed of Cloud-based servers. This centralised model works well when you have fast connectivity but doesn’t function at all when your internet connection is down, leaving you twiddling your thumbs.

Looking around and comparing a 1960’s mainframe and today’s smartphone you can see Moore’s Law in action, but how long will it continue to work for? The law’s demise has been predicted for some time, and as chips become ever smaller the processes and fabs needed to make them become more complex and therefore more expensive. This means that the costs have to be passed on somehow – at the moment high end smartphone users are happy to pay a premium for the latest, fastest model, but it is difficult to see this lasting for ever, particularly as the whizzier the processor the quicker batteries drain. The Internet of Things (IoT) will require chips with everything, but size and power constraints, and the fact that the majority of IoT sensors will not need huge processing power means that Moore’s Law isn’t necessary to build the smart environments of the future.

Desktop and laptop PCs used to be the biggest users of chips, and the largest beneficiaries of Moore’s Law, becoming increasingly powerful without the form factor having to be changed. But sales are slowing, as people turn to a combination of tablets/phones and the processing power of the Cloud. Devices such as Google Chromebooks can use lower spec chips as it uses the Cloud for the heavy lifting, thus making it cheaper. At the same time, the servers within the datacentres that are running these Cloud services aren’t as space constrained, so miniaturisation is less of a priority.

Taken together these factors probably mean that while Moore’s Law could theoretically carry on for a long time, the economics of a changing IT landscape could finish it off within the next 10 years. However, its death has been predicted many times before, so it would take a brave person to write its epitaph just yet.

April 22, 2015 Posted by | Creative, Uncategorized | , , , , , , , , , , , , | Leave a comment

How smart can a smartphone get?

If you needed evidence of the growth of the smartphone market and its move into every part of our lives, then this week’s Mobile World Congress (MWC) provides it. It wasn’t that long ago that the event was dominated by network infrastructure companies, but now it is essentially a consumer electronics show in all but name. And one that looks far beyond the handset itself. Ford launched an electric bike, Ikea announced furniture that charged your smartphone and a crowdfunded startup showed a suitcase that knows where it is and how much it weighs.

English: Steve Jobs shows off the white iPhone...

Five years ago none of these companies would have even thought of attending MWC – and it is all down to the rise of the smartphone. It is difficult to comprehend that the first iPhone was only launched in 2007, at a time when Apple was a niche technology player. It is now worth more than any other company in the world and 2 billion people globally have an internet-connected smartphone. By 2020 analysts predict that 80% of the world’s adults will own a smartphone.

As any honest iPhone owner will freely admit, they may be sleek, but they are actually rubbish for making and receiving calls. What they do provide is two things – a truly personal computer that fits in your pocket, and access to a global network of cloud-based apps. It is the mixture of the personal and the industrial that make smartphones central to our lives. We can monitor our own vital signs, and the environment around us through fitness and health trackers and mapping apps, and at the same time access any piece of information in the world and monitor and control devices hundreds or thousands of miles away. Provided you have a signal……….

Essentially the smartphone is a universal platform that companies can build on – whether it is a disruptive taxi business (Uber) or completely new ways of dating such as Tinder and Grindr.

So, based on what is on show at MWC, what are the next steps for the smartphone? So far it seems to split into two strands – virtual reality and the Internet of Things. HTC launched a new virtual reality headset, joining the likes of Sony, Microsoft, Samsung and Oculus Rift, promising a more immersive experience. Sensors to measure (and control) everything from bikes and cars to tennis racquets are also on show. The sole common denominator is that they rely on a smartphone and its connectivity to get information in and out quickly.

It is easy to look at some of the more outlandish predictions for connected technology and write them off as unlikely to make it into the mainstream. But then, back in 2007, when Steve Jobs unveiled the first iPhone, there were plenty of people who thought it would never take off. The smartphone revolution will continue to take over our lives – though I’m not looking forward to navigating streets full of people wearing virtual reality headsets who think they are on the beach, rather than on their way to work…………

March 4, 2015 Posted by | Creative, Marketing, Startup, Uncategorized | , , , , , , , , , , , , , , , | Leave a comment

Are online monopolies a good thing?

European flag outside the Commission

European flag outside the Commission (Photo credit: Wikipedia)

The cover story in last week’s Economist looked at the growing global dominance of internet giants such as Google and Facebook. This was partly driven by the fact that the European Parliament recently passed a resolution to more tightly regulate internet search and potentially break up Google, as well as by ongoing worries about competition and online privacy.

So are effective online monopolies (Google has 90% of the European search market for example) a good or bad thing?

Obviously in the real world monopolies are viewed with suspicion, particularly when a dominant position is then used to raise prices, unfairly squeeze competitors and generally provide a poor deal to customers. But a monopoly on its own is not enough for regulators to step in. In many niche markets (say chemicals) the investment needed to compete with a dominant incumbent would put off any new entrants, so it becomes a monopoly by default. If it doesn’t abuse its position regulators tend to just monitor the situation without taking action.

So, no-one would argue against the fact that monopolies need to be watched closely. But what is interesting is the difference between the online and offline worlds, in four key ways. Firstly, the cost of entering an internet market is relatively small – you’d don’t need to build an expensive factory, but can rely on scalable, inexpensive cloud-based servers and storage to host your business. This makes expansion easy, particularly given the widespread adoption of the internet and mobile phones across the globe, providing a proven way of connecting with customers.

The second factor that causes internet businesses to grow exponentially is the network effect. Essentially the more users on a service, such as Facebook, the better it is for everyone involved as there are more people to interact with. In turn this attracts more people in a virtuous circle. It can work the other way though – as the fate of early social networks such as MySpace show.

Thirdly, the majority of the internet services being discussed are free to consumers. So they don’t directly see any negative impact from the monopoly (such as a rise in costs). What isn’t immediately obvious to users is the price of free. Essentially their personal data is used to power advertising, direct mail and other marketing campaigns, with many consumers having a hazy understanding of what their information is being used for, or how to increase privacy settings. In fact, it is advertisers that can feel the impact of higher prices, given the online control of the internet giants.

The final difference, and one that The Economist makes much of, is the speed of change in the technology space, and how this makes today’s monopolies tomorrow’s has-beens. Companies find it hard to jump from leading one wave of innovation to competing in a new space. IBM dominated the mainframe market, but has had to reinvent itself in order to survive, while the replacement of the personal computer with tablets and smartphones has dealt a major blow to Microsoft.

However, these are still multi-billion dollar companies and have hardly withered away. Therefore in my view, technology innovation alone is not enough to regulate the internet giants. What is needed aren’t heavy handed rules, but a more measured approach that balances the needs of consumers with the speed of innovation and the potential competitive impact of monopoly positions. It is an incredibly difficult balancing act – and will require give and take from both sides if it is to succeed. Done right and new breakthrough services will be allowed to grow, but without trampling on other businesses. Get it wrong and innovation is stifled, potentially harming consumers and businesses who want to access the latest technology and services.

December 10, 2014 Posted by | Marketing, Startup | , , , , , , , | Leave a comment


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