Amid all the excitement and hype of last week’s Consumer Electronics Show (CES) – products demonstrated included a games console for dogs and a smart belt (unfortunately called the Welt) that monitors your waistline – there are some big trends that will potentially affect us all.
While last year was all about wearables, CES 2016 was focused on travel and transport. In fact, there was more noise about cars than at the once dominant Detroit Motor show held a week later. GM announced a $500m investment in Lyft, as well as launching its latest Bolt electric car. BMW showed off a concept car controlled by gestures (taking giving the finger to another motorist to a whole new level), while Ford talked about its progress in self-driving cars. There was even a hoverboard or two – though not something that Marty McFly would recognise from Back to the Future.
What’s interesting is that it shows that the traditional car makers are waking up and fighting back hard against tech companies in the battle for future motoring. As cars essentially transform into computers on wheels, manufacturers risk becoming relegated to providers of hardware (the car chassis), with all the value and ongoing profit going to the tech firms providing the software that makes them intelligent, self-driving, more efficient or more comfortable spaces. Allied to this, there is a lot of talk about the Uber effect, with younger consumers turning away from car ownership and instead just hailing one when they need it or renting on an ad-hoc basis.
So car manufacturers are worried – fewer people buying their products and margins squeezed as the profits go elsewhere. Personally, I don’t think it will be as bad as some naysayers predict – younger people have been hard hit by the recession, so don’t necessarily have the money to buy and run a car. And owning your own vehicle isn’t absolutely necessarily if you are one of the 54% of the world’s population that lives in a city. For those living in the countryside without Uber or buses, the picture is very different.
But what is interesting is how the car giants are changing their behaviour. They have realised that they are up against a smaller, more agile foe – but one that has access to new ideas, brands well known for innovation, and no preconceptions about the business. They have to market themselves better, embrace technology and work together to convince consumers that traditional car makers have what it takes to meet their future needs. Hence investments in start-ups such as Lyft, car clubs and the joint purchase of mapping firm Here by a consortium of VW/Audi, BMW and Daimler.
But both sides face significant marketing obstacles. Aside from a few supercar manufacturers, the majority of car companies are not sexy – and VW’s issues with faked emissions tests back up the view that they can’t be trusted. Cars are expensive to buy, depreciate quickly and require ongoing maintenance and fuel. I’m not saying that tech companies are angels, but the majority of people pay nothing to use Google’s services, even if that means that they themselves become the product. So tech companies need to convince consumers that they combine style and innovation with security and safety, and that they won’t have to reboot their self-driving car before driving away in the morning. Essentially the incumbent needs to show a bit of excitement, while the new player needs to demonstrate a bit of gravitas – a classic marketing dilemma.
As the battle moves from the phony war to full on combat, and new companies (such as Apple) join the market, then expect a much greater focus on marketing from both sides – as each one aims to convince us of their benefits in the brave new motoring world. My money is on whoever develops a proper hoverboard first…………….
500 years ago, during the Renaissance, it was possible for one person to know pretty much everything across a wide range of subjects. Leonardo da Vinci, for example, was a painter, anatomist, sculptor and inventor, designing objects as diverse as an early helicopter and an adding machine. A little later polymaths such as Isaac Newton were leaders in fields as different as mathematics, physics and optics, while still believing in alchemy and experimenting to try and turn lead into gold.
In the late 20th century the place of the Renaissance man shifted again, moving from laboratory and academia to the hallowed pub quiz. This was the foremost place for polymaths to show off their knowledge, particularly if their family and friends refused to play Trivial Pursuit with them anymore.
But, in the same way that the days of a da Vinci or Newton are gone, I fear that time has been called on the pub quiz. And it is all down to technology and the way it is shaping how we learn and retain facts/useless information. Nowadays we can access all the knowledge in the world instantly with a smartphone and Google (except in my village, which only has 2G coverage). I remember as a ten year old memorising the capital cities of Europe (including mastering the trick question of what the capital of the Netherlands was), but am now sorrowfully realising that I may have been wasting my time.
Shared experiences and the herd mind
This means that rather than priding themselves on learning and retaining information, my children are much more focused on how to find it in a hurry. While this is good in a way – there’s no way you can know everything, so why try? – it is also disheartening in others. We relate to other people through shared experiences – whether that is knowledge of the same events, watching the same TV programmes or attending sports matches. And if you erode that – such as through the explosion in viewing choice, the plethora of pay-TV options and rising ticket prices at sports events, you take away much of how we relate to others.
Why is that important? Essentially because mankind is a herd animal, and a lot of our choices are not based on being rational, but fitting in with those around us. So take away our shared offline experiences and we won’t know how to behave, meaning we will start trying to find new herds to potentially join online. At its most extreme this can lead to the bandwagon jumping you see on Twitter, when everyone tweets/retweets on a particular topic or trend, without thinking, or at its worst joining radical organisations that provide a sense of belonging, however misplaced.
It also provides opportunities for marketers – good and bad. Marketers can position their brands as essential to the lifestyle and experiences we want to share, but this opens them up to charges of psychological manipulation if they are simply using PR and are not genuinely delivering what they promise. It is a balancing act – consumers are both more susceptible and more cynical at the same time – and are also apt to forget your brand in the wider noise if you don’t keep communicating with them.
So, while pub quizzes will never be the same, the need for shared experiences remains: as humans we should remember this and ensure that we find them in the physical as well as the online world. And that means making sure we still retain enough useless trivia to interact with those around us – and of course to dominate at Trivial Pursuit.
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.
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:
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.
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.
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.