Revolutionary Measures

Google, tax and PR – do no evil?

On the PR side it has been a busy couple of weeks for Google. Firstly, it casually announced at Davos that it had agreed to pay £130m for ten years of UK corporate taxes, although obviously without any admission of guilt. Cue a storm of protest that this was nowhere near enough for a business that reputedly made £7.2 billion of profits over that period, essentially meaning it paid 3% corporation tax. Much of the vitriol came from other media companies, particularly newspapers, that have seen their own advertising revenues decimated by the search advertising giant.

Google Quick Search Box

Then earlier this week Alphabet, Google’s holding company, became the world’s most valuable company by market capitalisation, helped by strong financial results and worries about previous number one Apple’s future growth prospects.

Given the closeness of these two events, it would be easy to draw the conclusion that ethically debatable behaviour leads directly to outstanding corporate success. But has it actually made any difference to Google’s reputation in the UK? I’d argue that overall it hasn’t affected its business in any way, for three main reasons:

1.The public doesn’t buy from Google
For the majority of people Google is a utility – providing them with the ability to browse or search the internet, watch videos, manage emails and documents or run their mobile phones, without charging them a penny directly. What people don’t understand is that the price of this free stuff is that they become the product – Google has built its very lucrative business on selling this data on our activities and preferences to advertisers. In contrast Starbucks, another perceived tax avoider, sells physical products direct to the public, giving consumers a vested interest in seeing the right levels of tax paid out.

2.Google does no evil
It will probably surprise a lot of people that Google is as enormous as it actually is. From its beginnings it has cultivated a laid-back, anti-establishment brand, epitomised by its corporate slogan “Do no evil” and heavy investment in moonshot projects such as self-driving cars and research into cures for cancer. Despite its growth, it is still seen as a Silicon Valley upstart successfully battling the likes of Microsoft (search, browsers, productivity applications, operating systems) and Apple (with Android).

3.Is there an alternative?
Obviously you can use different search/email/operating system providers, including those that make it clear that they won’t either track your online behaviour or use it to target adverts based on your browsing. But how many people actually make the effort to go out and switch, particularly when Google makes it so easy to just carry on using its services. The figures speak for themselves – it has nearly 86% of the UK search market, which hasn’t changed much since the first mention of its tax affairs.

So, while as a PR person I agree that it has handled the whole tax situation badly by trying to claim that it is doing the right thing when its activities are ethically dubious at best, I don’t think it will have a major impact on the corporate brand. This is echoed by an (admittedly small) poll in PR Week, where 51% of PR professionals said it would leave its reputation unchanged – and 11% thought the tax settlement would improve the brand.

However, where it may cause issues, is by attracting further attention from regulators at the European Union, which have previously shown that they have more teeth when dealing with tech giants than national governments. Time will tell, but with the media already setting its sights on Facebook for potential even larger tax avoidance, I think Google will feel that the £130 million it spent is worth every penny.

February 3, 2016 Posted by | Creative, Marketing, PR | , , , , , , , , , , , , , , | Leave a comment

Who do you trust?

We live in challenging, complex times. Globalisation, wars, mass migration, terrorism and the sheer pace of technology change all combine to unsettle and worry large percentages of the population, both in the UK and across the world.

In suspicious eras such as these, trust in institutions and organisations is vital if people are to be reassured and helped to understand how change is affecting them. So the headline finding of the 2016 Edelman Trust Barometer – that levels of trust in UK government, media, business and NGOs have all risen – should be a reason for celebration. The Edelman study, now in its 16th year, surveyed 2,500 members of the public in the UK as part of a global sample of 33,000 people.

speaking at CPAC in Washington D.C. on Februar...

However, behind the headline figures there are two main causes of concern for those of us involved in communications.

1.          Below average national trust
While the UK’s trust levels are at their highest since the recession (excepting in the case of NGOs), the country’s combined, cross-index score of 40% means it ranks amongst the ‘distrusters’, along with most of Western Europe, the US and Australia. The Chinese say they have the most trust in institutions (71%), followed by citizens of the United Arab Emirates (65%), and India, Indonesia and Singapore (all 62%). The global average is 48%.

The UK’s relatively low ranking is probably not a surprise. After all, we pride ourselves on taking a cynical attitude to the institutions around us, and this adds a level of public and media scrutiny that supposedly keeps politicians and business on their toes. Negative headlines sell papers, reflecting the national psyche and appetite for bad news. However, it also means that PR people, and other marketers, need to work harder to convince the general public that, actually, things aren’t that bad for the vast majority, particularly compared to many other places around the globe.

2.          The trust gap
The biggest worry is the widening gap between the haves and have nots when it comes to belief in institutions. Edelman divided its sample into the ‘informed public’ (those with a household income in the top 25%, typically with university degrees), and the general public. Overall the gap between these groups in the index hit 17%, up from 9% last year, with the informed public trusting government, business, the media and NGOs much more than the rest of the population.

In many ways this isn’t unexpected – it is much easier to be happier with your lot if you have a cushion of money and education to fall back on. And the recession has seen widening inequality – figures released by Oxfam show that the richest 62 people in the world held the same wealth as the poorest half of the global population in 2015, equivalent to some 3.6bn people. Working a zero hours contract for a company that allegedly shifts its profits offshore to avoid tax is going to provide a radically different perspective to someone who is a manager in the same organisation.

But the big concern is the impact of this lack of trust. The rise of Donald Trump in the US, and the fact that Poles (the least trusting population at 34%) have just elected an ultra-conservative government that promptly replaced the heads of public broadcasters, shows the consequences of the rift between citizens and public institutions. In the UK this suspicion is evident on the forthcoming EU referendum – 61% of the informed public back Britain remaining, with 26% wanting to leave. In contrast nearly half (47%) of low earners favour leaving, and just 34% believe the UK should stay in.

The consequences of the trust gap are therefore potentially extremely worrying, with populists exploiting public fears to increase their share of the vote and shift the debate rightwards in many cases. It is up to communicators of every sort (whether working for government, business or NGOs) to address this gap, and look to educate the general population, both that current change is bringing positive benefits, and that issues can’t be solved through kneejerk reactions, such as building a wall between the US and Mexico. It won’t be easy as in many cases the devil has the best tunes, but it is vital if informed democracy and real debate are to flourish.

January 20, 2016 Posted by | Marketing, PR | , , , , , , , , , , , , , , | Leave a comment

Being a fox, not a hedgehog

In a famous essay based on a fragment of Greek poetry, the philosopher Isaiah Berlin divided writers into two groups – hedgehogs (who essentially know one thing in depth) and foxes (who know many things and see the world through a variety of experiences). This classification can be equally applied to all of us.

A Red Fox on an Evergreen, Colorado's porch.

As human knowledge has grown, and professions have become more specialised, people have been encouraged to be more hedgehog, and less fox. After all, the time, dedication and skills needed to become a brain surgeon, mean it is unlikely that the same person could train as a rocket scientist. So, since the Renaissance, where the likes of Leonardo da Vinci were equally adept with science and the arts, we have been pushed down the path of specialising and knowing one thing in depth.

This has obvious advantages – no-one wants to be operated on by a brain surgeon who only did half their training, but it also very limiting. As hedgehogs, people tend to view the world through the prism of their own experiences. Hence you might find that someone in the police force is by nature suspicious and on their guard, or a primary school teacher talks down to adults, treating them like children. These are obviously extreme cases, but we’ve all met someone and been able to correctly guess their profession due to what they say and how they say it.

More importantly, at a time when pretty much all the knowledge in the world is on the internet, and digital technology is changing how we work, live and play, being a hedgehog is also out of step with today’s reality. Sticking to what you know, rather than looking to acquire new skills limits everyone’s potential – it is no accident that the most enthusiastic and fearless users of new technology are children, who are naturally foxes as they learn.

However, becoming more fox-like is not easy. Like anything new, it involves giving up long-held, cherished beliefs and taking a risk. It can also be more difficult than it looks. The internet overloads our hedgehog brains with too much information, making it hard to see the wood for the trees. For example, when Spotify has tens of thousands of tracks how do we choose what to listen to? The safest bet is just to stream what we know about already, confirming our hedgehog tastes. Artificial intelligence that learns what we like automatically suggests more of the same, rather than throwing in a curve ball – “you like Puccini, have you tried Taylor Swift?”

So, how do we encourage our foxiness, but without losing the focus that a hedgehog brings? I think it comes down to three things:

1. Communication
It is easy to sit in our hedgehog silos, blaming other groups when things go wrong. Companies are full of inter-departmental feuds, with sales complaining about marketing who criticise engineering who grumble about accounts, until no-one is happy. Much better to actually sit down and listen to what everyone does, why they do it, and then try and fit it all together for the good of the wider organisation. The same principle applies in relationships outside work – understand the mindsets of those around you if you want to be able to talk their language.

2. Turn the internet on its head
In the same way that the internet encourages silos, it also provides almost limitless scope for new experiences. Rather than just extending what we do offline onto the web, use it to find new things to do, new skills to learn and new people to talk to. Type a random idea into Google and see what comes back (though be careful what you wish for), take up a new hobby or subscribe to the magazine used in the Missing Words round of Have I Got News For You?, for example. Obviously make sure it is legal, and while you may hate it, at least you’ll have had a new experience.

3. Don’t smother fox learning
As I’ve said, children are naturally foxes in how they pick up experiences from all around them. But at a certain age this stops, and they are focused solely on what they should be learning, at the expense of letting their imaginations wander. I’m not advocating dismantling the education system completely, but schools and universities should make sure they are teaching a balanced curriculum, and ensuring that students remain curious about the wider world. Why not get astrophysics students to read French literature at the same time?

When the Hedgehog and the Fox was written in 1953 there was no internet, smartphones or tablets and in many cases the solid, reliable, trustworthy hedgehog was the ideal to aspire to. Times have changed, and we all need to encourage our inner fox if we are to thrive in the constantly-evolving digital world.

December 9, 2015 Posted by | Creative, Social Media, Uncategorized | , , , , , , , , , , , | Leave a comment

Is PR changing at last?

Last week’s Chartered Institute of PR (CIPR) East Anglia conference reminded me of much of the good – and the bad – about the profession. For a start the half day event brought together a really diverse group of PR practitioners, all enthusiastic about their profession and what it could achieve for businesses. And the overall theme of the conference – why PR needs to step up, embrace new skills and demonstrate the value it creates – is immensely important in a world where digital is transforming the marketing, and business, landscape

English: Cambridge Science Park Trinity Centre...

But – and it is a big but – I can remember going to events debating these issues five or possibly ten years ago. And even some of the presenters admitted that they still find it hard to persuade clients that measurement needs to go beyond counting the number of clippings or the advertising value equivalent of coverage. Perhaps most damning of all there is still a huge gender pay gap, of an average of over £8,000 between women and men doing comparable jobs, and a relative shortage of females in the higher echelons of the PR profession. In a sector where 70% of the workforce is female, this is nothing short of a disgrace. Essentially much of this comes down to PR not being taken seriously – we’re expected to either be Patsy from Absolutely Fabulous or Malcolm Tucker from The Thick of It. While I’d relish the chance to drink as much as the former while working or swear as much as the latter without attracting disciplinary action, it is far from the truth.

So PR needs to change, and the first step, like Patsy attending Alcoholics Anonymous, is recognising the need to do things differently. While there was a lot of repetition in the different presentations, there was also a lot to pick up and learn from. I’d distil it into four points:

1. This is a great time to work in PR
Corporate reputation matters: to sales, to the share price, to recruitment, and to overall business success. Customer relationships are vital to build loyalty and revenues. Given its background, PR is the profession best placed to manage both of these, but to do so it needs to change, digitise and talk the language of business. As Sarah Pinch, the current CIPR president, pointed out, “Strategic counsel can’t be provided by a robot.” Only by upping its game will PR avoid being automated.

2. PR needs to integrate
While it is best placed to help companies improve their reputation and relationships, PR can’t do it alone. It has to work with every other department of the business, from finance and sales to customer service and IT, to create a cohesive approach that focuses on the overall reputation of the organisation. It needs to adopt a team of teams approach, working with colleagues with different skills to achieve results.

3. Measurement, measurement, measurement
There was a lot of talk about the need for measurement and why it was important, but fewer examples of how PR could be measured in a way that linked directly to business KPIs. As I’ve said the industry has been talking for years about the need to move from outputs (the number of clips or readers) to outcomes (changes to perception or behaviour that can be directly credited to PR). There are plenty of apocryphal stories of how reading that one article led effortlessly to a sale, or a campaign enabled a company to shift its market positioning, but one of the major issues is measuring this on a consistent, reliable basis. One of the key issues, particularly for smaller agencies and businesses, is that measurement costs money – and often clients are unwilling to pay for it or don’t see its value. That means it has to come out of budget that would otherwise be spent on PR programmes, lessening what can be done, and meaning agencies may well lose out in beauty parades to rivals that promise more.

4. Think like the board
As Denise Kaufmann of Ketchum said, quoting W. Edward Deming, “In God we trust, everyone else bring data.” PR needs to understand what senior management is looking for and ensure it is talking the same language. And that means ensuring PR targets directly map to corporate objectives, and are presented in a clear, business language. Think like an MBA and speak data, rather than discussing size and number of clips. This requires a change of mindset, but the potential rewards are enormous in terms of prestige, preserving/growing budgets and being recognised as crucial to the business. Hugh Davies, until recently the corporate affairs director of 3, gave his advice on advancing your PR career: be a team player, be confident, build business understanding, and create a body of evidence to support your ideas if you want to be taken seriously.

And by building trust with the board, the job of PR could also become slightly easier. We’ve all seen PR wonderful campaigns that are quickly undermined by a corporate scandal or cock-up that no-one thought to tell the communications department about until it became a crisis. I’d hate to be a PR person for VW at the moment for example. By stepping up to senior management, PR will at the very least have earlier warning of such issues, rather than having to deal with the aftermath.

It is easy to see PR as a profession that just provides window dressing to an organisation – and in the past PRs have not helped themselves with their behaviour or attitude. But the CIPR East Anglia Conference showed that attitudes are changing, and finally we may be solving our own reputational problems.

November 25, 2015 Posted by | Cambridge, PR, Social Media | , , , , , , , , , , | Leave a comment

Content writing – the key new business skill

Having worked in PR for 20 plus years I’ve seen the power that well-written, relevant and targeted content can deliver for companies. Whether it is a pitch that leads to an article read by the target buyer at a B2B company that causes them to make contact with a client, or a press release that boosts name recognition with a potential investor or acquirer, public relations has always had the ability to deliver the right messages to the right audience at the right time.

Nederlands: Linked In icon

And the advent of blogs and social media has simply increased the importance of good content – helping engage with potential customers and position an organisation as an industry expert even before the target actively starts research. Additionally, with more and more of the buying journey taking place online, the SEO benefits of relevant, topical content cannot be underestimated when customers typically start the research process via Google or industry websites.

All of this is pretty well-known, but what I’ve seen over the last year or so is the use of content to reinforce the personal brand of business people. I don’t necessarily mean CEOs or entrepreneurs, who have always relied on the oxygen of publicity to build their reputations, but middle ranking managers on their way up. Rather than (or perhaps as well as) networking internally and bending the ear of their bosses with their knowledge and industry insight, they are now able to share through Twitter, and most particularly LinkedIn’s inbuilt blogging feature. This provides a platform which hosts individual’s content, as well as sharing it with their network, and further afield via LinkedIn Pulse. I’ve seen myself how incredibly powerful this is in keeping in touch with people you are connected to, and building your brand.

It seems to me that writing content is now one of the key skills that any manager needs, alongside technical knowledge of their particular field, understanding of their role (whether it is sales, administration or marketing, for example), and the basic business/financial nous that means they can read a spreadsheet and grasp the intricacies of a forecast and profit and loss account.

But making it easy to share content doesn’t necessarily make it easy to write good, well-thought out and grammatically correct pieces. The risk is that business people will jump on the content writing bandwagon and actually undermine their professional standing by penning incoherent, rambling or misspelled pieces.

To avoid this, here are six key ways of guarding against looking stupid when writing on LinkedIn. While the success of your content is up to you and your ideas, focusing on these ideas should help you remain professional and demonstrate leadership.

1. Be personal
People don’t want to read a corporate press release that simply been pasted into a LinkedIn blog post. By all means share interesting news from your company as an update on LinkedIn or Twitter, but a blog post should be personal and relate to your experiences and views on a subject. Obviously you need to balance your own thoughts and the views of your employer, but if necessary insert a statement that this a personal blog, not necessarily reflecting the position of the company you work for. However don’t be too personal – sharing too much detail about your home life or what you did at the weekend can alienate contacts, particularly if they only know you in a business environment.

2. Plan, plan, plan
So much content starts well and then rambles off into a dead end or randomly changes direction part way through. Sit down and write a skeleton of what you are going to say, with a beginning, a middle, and an end. What points are you going to cover? What is your conclusion? What are the alternatives? I find it helps to do this with pen and paper but the important thing is to start by planning, not start and hope for the best.

Remember that you’re not writing War and Peace but creating something that people can read online in a few minutes. So keep it to a manageable length (800-1000 words), and if necessary split your piece in two to avoid your ideas being lost.

3. Don’t plagiarise
Good content teaches someone something or moves the debate on, and remember that it represents you and your personal brand. Therefore don’t simply rip off other people’s ideas without giving them credit and a link to their work. Share your content with them and they may well share it in turn with their networks, boosting your reach.

4. Proof it
We all think we’re wonderful at spelling, but everyone has weak points, so make sure you spell check everything that you’ve written and I advise printing it out to proof it properly. It is best to write a piece, and then come back and proof it later on, giving you the advantage of fresh eyes. Always pass the article to someone else to review as well – whether they are part of your target audience or not, they can pick up mistakes that you’ve missed or areas where things need to be made clearer.

5. Share it!
Obviously LinkedIn automatically shares content you’ve created with your own network, but that should only be part of your outreach. Use Twitter to spread the word further and post the article on any relevant LinkedIn groups that you are a member of. You can even email it contacts if you think it would be of interest and help deepen engagement – but don’t just blast it out to your entire contact book.

6. And repeat
A single post is unlikely to make you a thought leader so look to create content regularly. It doesn’t matter if it is every week or every month, but set yourself a schedule and try and post at a regular time so that people eventually come to expect (and hopefully look for) your articles. Little and often beats writing a huge first post and then losing interest and going off to do something else.

Content writing is becoming a key business skill – but bear in mind that the world is full of bad or simply unread content. So take the time to think it through first before hitting the keyboard if you want to build your reputation as a thought leader.

November 18, 2015 Posted by | Creative, Marketing, PR, Social Media | , , , , , , , , , , , | Leave a comment

James Bond, public relations and the drive for increased surveillance

I read recently that government ministers spend over a quarter of their time on public relations or similar activities. That’s not surprising given they face a combination of an ever more cynical electorate, lobbyists, pressure groups, opposition MPs and, of course, their own backbenchers.

Obviously everyone thinks they have an idea about the bad side of government spin, with its mixture of cunning, bullying and calling in favours (as exemplified by Malcolm Tucker in The Thick of It). But increasingly PR is necessary to try to educate and convince the press and public about the merits of a decision, in order to gain the support it needs.

The perfect case in point is the current debate on the Investigatory Powers Bill, a draft of which is being published this week. This aims to strengthen the capabilities of the security services to detect and foil crime. However in the wake of Edward Snowden’s revelations concerning the scale of current surveillance technology, and how it is used, there is widespread worry about what new legislation will enable the security services to do.

A model of the GCHQ headquarters in Cheltenham

In the balance between privacy and law enforcement, where do you draw the line? For example, the draft bill will compel Internet Service Providers to retain a full record of your online activity for 12 months, in case they are needed for investigations. The vast majority of us would support their use against terrorists, paedophiles and organised crime, but the fact that a record of all of our surfing is stored and can potentially be accessed by law enforcement officers does scare and worry people.

Because of this, there has been an unprecedented campaign to win over the public. The Times was given high level access to Britain’s spy agencies, from GCHQ to MI5 and MI6, for example. This enabled those backing the bill to get their message across that they are foiling plots aimed at the UK on a regular basis and that without changes to the law it is only a matter of time before something slips through the net.

At the same time the anti-campaign has received backing from an unlikely corner – James Bond himself. The latest Bond movie, Spectre, features the normal array of international bad guys plotting to take over the world. But the key twist (spoiler alert) is that they want to do this by gaining access to the surveillance systems of the security services around the world – even to the extent of bankrolling a new UK security service building. Of course, in the end their evil plot is defeated, but the interesting point is that C, the new head of British joint intelligence, is a bad guy, in league with the chief villain himself. Hardly the ringing endorsement of increased surveillance that the public would expect – and perhaps politicians backing the bill were hoping for.

With the bill itself just published, expect the debate to rage on – with public relations a key tactic used by both sides to put their case. Though what the government and security services can do to top James Bond will be an interesting challenge……

November 4, 2015 Posted by | Marketing, PR, Social Media | , , , , , , , , , , , , , | Leave a comment

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 | , , , , , , , , , , | 1 Comment

Will Facebook take over the world?

 

Facebook logo Español: Logotipo de Facebook Fr...

Last week Facebook announced that on Monday 24th August 1 billion people logged into the social network. That’s 15% (almost one in seven) of the world’s population using Facebook in a 24 hour period. And given that over half of the globe still isn’t online, the percentage of actual versus potential users is actually much higher – closer to 33% of the 3.195 billion internet users.

The announcement begs three big questions:

1.Is it a good thing?
It is difficult to find a parallel in history for a single entity being used by so many people across the world. There have been monopolies in the past of course, particularly in telecoms before deregulation, but these operated at a country level, and you didn’t have a choice. You wanted to make a phone call and you had to use BT or AT&T. When it comes to control over how people communicate the only example that comes to mind is organised religion, such as the pre-Reformation Catholic Church where all of Europe was subservient to the Pope. As yet, Mark Zuckerberg hasn’t branded any Twitter users as heretics, for which we should obviously be grateful.

Critics will argue that having one company central to how we communicate with friends and family, find our news and even shop is a bad thing. On the other hand, Facebook fans will point out that you have a choice – other social networks are available and the past is littered with previously successful companies (such as MySpace) that failed to evolve. This does ignore the impact of the network effect – as more and more people are on Facebook, it becomes increasingly necessary to be on there if you don’t want to miss out. Technically it is very easy for anyone to create a new social network, what is difficult is enticing enough people to join to make it necessary for their friends to also jump aboard.

What is definitely true is that Facebook, like other international online giants, does need to scrutiny that matches its power and reach. I’m not talking about regulation per se, but any organisation that has Facebook’s combination of personal demographic data and ability to analyse it on a grand scale has to meet the highest standards of behaviour.

2.What about the other 85%?
The obvious point that many people have made is that if 1 billion people were on Facebook on a single day, the remainder of the world (85% in fact), were doing something different. As we’ve seen, Facebook has captured a large percentage of the online population, which is why the company’s efforts are being put into increasing the number of people with access to the internet in some form. Its main vehicle for getting people online is Internet.org, which provides free basic internet services in areas where it is either non-existent or unaffordable. Some of the ways Internet.org is looking to extend coverage include high altitude planes beaming a signal to a particular area, lasers and satellite technologies. However Internet.org has attracted criticism for only providing access to a walled garden of services, including (surprise surprise) Facebook itself.

Clearly if Facebook is to grow it is easier to expand the pie of internet users and reach the currently unconnected, rather than target the refuseniks in countries where it already enjoys high penetration rates. Expect more efforts to extend internet access – probably not just within developing countries but also within ‘notspots’ inside existing markets, thereby encouraging people to use the service even more.

3.Where next for Facebook?
Facebook has already overcome two major hurdles that have defeated its rivals. It has successfully transitioned to a mobile-first world (87% of access is from mobile devices), and is generating growing profits. As well as extending its reach to new victims (sorry, consumers), it also needs to increase engagement – i.e. ensure people still log on and use the service, and do it more often and for longer. The big bet that Zuckerberg has made here is on virtual reality, with the $2 billion purchase of Oculus VR expected to spawn headsets that deepen the experience of using Facebook and interacting with your friends. This, for me, is where things start to get more than a little creepy – if people are addicted to Facebook now, just imagine the time they’ll spend online if they can essentially experience reality without leaving their screen. Plus, with the current size and design of headsets, everyone will look like they are part of Daft Punk.

So, to answer my three questions, I’d say we should be wary about Facebook’s might, keep an eye on its efforts to reach the other 85% to ensure there is a level playing field when it comes to access, and be sceptical about the advantages virtual reality can actually bring us. After all, you could just pick up the phone and talk or, heaven forbid, chat to someone down the pub……

September 2, 2015 Posted by | Creative, 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

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