Revolutionary Measures

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

Hunting for unicorns

Mankind has always had a fascination for mythical beasts, and none more so than the unicorn. Despite allegedly dying out in the flood after failing to board Noah’s Ark in time, they are still all around us in popular culture, from Harry Potter to children’s toys. I even found an exhibit in a Vienna museum labelled matter of factly as a “unicorn horn” – it was actually from a narwhal.unicorn

The horned horses are back in the news, in the world of tech at least, with any startup valued at over $1 billion by venture capitalists now dubbed a unicorn. However with more than 100 companies now achieving unicorn status there’s a growing worry that startups are trading short term valuations for longer term success. True, unicorn status helps attract skilled staff, but down the line it requires either a trade buyer that is willing to pay big money or an IPO to translate mythical (paper) valuations into hard cash. There have also been a raft of stories on how investors have structured their unicorn funding in ways that protect their cash (rather than the shares of others, such as founding teams) if the company should lose its value.

A focus on unicorns also favours certain sectors and types of company. A browse through Fortune’s latest unicorn list reveals a large number of consumer electronics (Xiaomi, Jawbone), retail (FlipKart, Snapdeal) and sharing economy (Uber, Airbnb) companies. In many ways this is what you expect – company valuations are based on what the addressable market is, so the biggest investment goes into those startups that can make most money.

However, it does potentially limit where investors put their money. There are lots of startups that will never be a Facebook or an Uber, but have the potential to be extremely successful niche players that could well grow into billion dollar valued companies. Look at ARM – when it began as a spin-off from Acorn Computers with a completely new business model, very few would have predicted its current success.

There’s also a definite geographic bias where unicorn investors are putting their money – Silicon Valley, China and India. Out of the latest Fortune list just three are in Europe, one in Australia and one in Israel. This doesn’t reflect the energy, ideas and potential in any of these places, particularly in emerging sectors. The danger is that if investors spend their time chasing unicorns they’ll miss out on the startups that could do with their help to build long term businesses that can make a difference to many markets.

So I think we need to add another category alongside unicorns. Keeping the mythical theme I’d go for centaurs. Sturdier than a unicorn, probably better in a fight and with a bit more intelligence (and opposable thumbs). They may not have the beauty or the (frankly over the top) horn of their flashier cousins but they are built for the long term, rather than mythical valuations that don’t necessarily deliver. Given the potential returns they can produce, it is time for investors to move away from the fascination with unicorns to more realistic startups that may be uglier, but have just as much potential.

May 20, 2015 Posted by | Cambridge, Startup | , , , , , , , , , | Leave a comment

Algorithms versus spontaneity – striking the happy medium

There’s been a number of recent pieces about the rise of self-learning technology that uses artificial intelligence (AI) to carry out tasks that would previously have been too complex for a machine. From stock trading to automated translations and even playing Frogger, computers will increasingly take on roles that used to rely on people’s skills.

English: NEW YORK (May 31, 2010) Visitors inte...

Netflix used an algorithm to analyse the most watched content on its service, and found that it included three key ingredients – Kevin Spacey, director David Fincher and BBC political dramas. So when it commissioned original content, it began with House of Cards, a remake of a BBC drama, starring Spacey and directed by (you’ve guessed it) Fincher.

This rise of artificial intelligence is worrying a lot of people – and not just Luddites. The likes of Stephen Hawking, Bill Gates and Elon Musk have all described it as a threat to the existence of humanity. They worry that we’ll see the development of autonomous machines with brains many thousands of times larger than our own, and whose interests (and logic) may not square with our own. Essentially the concern is that we’re building a future generation of Terminators without realising it.

They are right to be wary, but a couple of recent stories made me think that human beings actually have several big advantages – we’re not logical, we don’t follow the facts and we don’t give up. Psychologist Daniel Kahneman won a Nobel Prize for uncovering the fact that the human mind is made up of two systems, one intuitive and one rational. The emotional, intuitive brain is the default for decision making – without people realising it. So in many ways AI-powered computers do the things we don’t want to do, leaving us free to be more creative (or lazy, dependent on your point of view).

Going back to the advantages that humans have over systems, the first example I’d pick is the UK general election. All the polls predicted a close contest, and an inevitable hung parliament – but voters didn’t behave logically or according to the research and the Tories trounced the opposition. While you might disagree with the result, it shows that you can’t predict the future with the clarity that some expect.

Humans also have an in-built ability to try and game a system and find ways round it, often with unintended consequences. This has been dubbed the Cobra effect after events in colonial India. Alarmed by the number of cobras on the loose, the authorities in Delhi offered a bounty for every dead cobra handed in. People began to play the system, breeding snakes specifically to kill and claim their reward. When the authorities cottoned on and abandoned the programme, the breeders released the now worthless snakes, dramatically increasing the wild cobra population. You can see the same attempt to rig the system in the case of Navinder Singh Sarao, the day trader who is accused of causing the 2010 ‘flash crash’ by spoofing – sending sell orders that he intended to cancel but that tricked trading computers into thinking the market was moving downwards. Despite their intelligence, trading systems cannot spot this sort of behaviour – until it is obviously too late.

The final example is when humans simply ignore the odds and upset the form book. Take Leicester City. Rock bottom of the English Premiership, the Foxes looked odds-on to be relegated. Yet the players believed otherwise, kept confident and continued to plug away. The tide now looks as if it has turned, and the team is just a couple of points away from safety. A robot would have long since given up……..

So artificial intelligence isn’t everything. Giving computers the ability to learn and process huge amounts of data in fractions of a second does threaten the jobs of workers in the knowledge economy. However it also frees up humans to do what they do best – be bloody minded and subversive, think their way around problems, and use their intuition rather than the rational side of their brain. And of course, computers still do have an off switch………….

May 13, 2015 Posted by | Creative, Marketing, Startup | , , , , , , , , , , , , | Leave a comment

Publish and be damned

The old saying is that everyone has a book in them – it is just a question of sitting down, writing it, finding a publisher, marketing and then selling it. That used to be the hard part but technology is changing this, making the whole process easier. No wonder that UK publishers released 184,000 new and revised titles in 2013 – the equivalent of 20 books an hour, which means the country published more books per inhabitant than any other nation. In the US 1.4m print books were released in 2013 – over five times as many as 2003. That figure excludes anything self-published, pushing the total up even further.

English: The second generation Amazon Kindle, ...

 

So, what is driving this growth – and what does it mean for publishers? There are essentially four ways technology is making the writing and publishing process easier:

1          Writing and editing
The platforms for editing and proofing manuscripts are now predominantly online. This makes it easier for a single editor at a publishing house to work with multiple authors, and also allows the different parts of the process to be subcontracted to copyeditors, designers and proof readers.

2          Publishing the book
The rise of ereaders like Amazon’s Kindle mean that books don’t physically need to be printed. This speeds up the publishing process as it removes the sole manual, mechanical and time consuming part of it – getting ink onto paper. Technology is also changing physical printing, with short runs a lot more feasible due to digital printing.

3          Distribution channels
The rise of ecommerce has decimated high street book shops, and has concentrated power in the hands of online retailers. Whatever the consequences for the public, this makes the job of authors easier as they can promote their book and simply direct potential buyers to Amazon. If they route them through their own website they can even collect affiliate fees. No need to keep an enormous box of books in the spare room and then laboriously pack and post each one to fulfil an order.

4          Marketing
With this increased competition from more and more new titles, the job of an author is now more about marketing than ever before. As this piece in The Economist points out, authors have to be much savvier about the different ways of promoting their tome, from gruelling book tours to ensuring that it is stocked/sold in the right stores to make particular bestseller lists. A lot of this comes down to brand – if you have built up a following and people know who you are, it gives you a headstart in shifting copies. Hence the enormous number of ghost written celebrity biographies released every Christmas and the high sales of books ‘written’ by Katie Price.

Social media gives the perfect opportunity to develop that brand, before putting pen to paper. Promotion of Ann Hawkins and Ed Goodman’s excellent New Business: Next Steps, a guide to developing your fledgling business, was helped by the community and following the authors had previously built on social media. Cambridge Marketing College (CMC) is self-publishing academic books, based on its existing reputation, large numbers of alumni and the shrinking costs of digital printing. Due to its ongoing courses, CMC knows where there are gaps in the market for textbooks, and can therefore exploit them. The key points here are that the brand and following were created first, rather than trying to launch a book and create a buzz from scratch at the same time.

The changing market also begs the question – do we need publishers anymore? After all, the costs to publish a book, either physically or digitally, are much lower than ever before. This means that publishers need to up their game, adding value across the entire process and embracing digital techniques to help find and promote authors, crowdsource ideas and use technology to push down their costs. Otherwise smaller publishers without a defined niche risk being pushed aside by well-developed brands that can use technology to find gaps, develop the right content and market it professionally. The publishing market is changing rapidly – the only sure thing is that the number of new titles will continue to rise.

February 25, 2015 Posted by | Cambridge, Marketing, Social Media | , , , , , , , , , , | Leave a comment

Are we a Tech Nation?

According to a new report, more and more of us are working in digital technology companies. Research led by Tech Nation has found that 1.46 million people (or 7% of the workforce) are employed by more than 47,000 digital companies across the UK – and of these just 250,000 are working in inner London. 74% of digital companies are located outside London.technation

To put that in perspective, according to other government figures, agriculture employs 535,000 workers, construction 2.2 million and manufacturing 2.6 million. So nearly three times as many people tend computers instead of animals. Heartening stuff, and a welcome antidote to some of the more extreme London-oriented digital stories seen in the media.

The highest density clusters in the report are Brighton & Hove, Inner London, Berkshire (including Reading), Edinburgh and Cambridge, while the highest rates of digital employment are in London, Bristol and Bath, Greater Manchester, Berkshire and Leeds.

It is easy to be cynical about the timing of the government-backed report, with an election coming up fast. I’d also query the definition of ‘digital’ – my PR business makes it in, which seems to show a wide classification range (not that I’m complaining). The headline findings that certain sectors have more digital companies than the national average (Brighton 3.3x, Cambridge 1.5x, for example), is interesting, but needs to be put into context. Brighton employs 7,458 people in digital, out of a population of 155,000 – under 5% compared to other clusters that potentially have a greater proportion of digital workers.

But what is more interesting is how the research reinforces the importance of clusters. Statistics include:

  • 77% of respondents have a network of entrepreneurs with whom they share experiences and ideas. This rises to 90% in Cambridge.
  • 54% believe their clusters help attract talent (65% in Cambridge).
  • 40% believe their cluster gets them access to affordable property (such as science parks or co-working spaces).
  • 33% believe their cluster helps attract inward investment
  • For Cambridge, access to advice and mentorship was seen as twice as important to growth than nationally (scoring +100%), and the positive perception of the Cambridge brand (+62%), was also a key driver for expansion.
  • Issues highlighted in Cambridge include poor transport infrastructure (scoring -111% compared to the UK average) and lack of available property (-31%).

This clearly demonstrates that to succeed and grow, tech businesses need to be part of an ecosystem that provides support, the right conditions to start (and grow) and that more and more of these are springing up across the UK. Nurturing a cluster takes time, so everyone involved, from local government to academia and investors have to think long term if they want to develop a tech ecosystem in their area.

What I’d like to see is companies and regions use this report as a starting point to build closer ties. Firstly, any businesses that feel they’ve missed out need to get on board and be given the chance to be added to the report. This is vital to keep it as a living, interactive document that maps changes over time.

Secondly, local government and organisations need to take a look and make sure that they are reaching the companies in their area, and providing them with the conditions for growth. At the very least local networks (or in their absence, local councils) should be making digital companies aware of their existence, and what they can do to help them. That way more sub clusters will form and grow, strengthening the overall picture.

I don’t think we’re yet the full Tech Nation that the report and research promises, but we’re definitely on the way – we therefore need continued focus and investment if we’re going to move forward, across the country.

February 11, 2015 Posted by | Cambridge, Startup | , , , , , , , , , , | Leave a comment

Will Facebook at Work work?

Last week, Facebook launched Facebook At Work, its latest attempt to bring the social network into the enterprise business mainstream. Cue lots of commentators prophesying doom for the likes of LinkedIn as the social networking behemoth pushed into the world of work.

Facebook logo Español: Logotipo de Facebook Fr...

On a closer look, LinkedIn shouldn’t be too worried, as Facebook At Work is more about collaboration and sharing inside an organisation, rather than looking for new jobs outside the office. In fact it is more of a rival for the likes of Yammer and Huddle.

The other point to note is that this isn’t the first time that Facebook has tried to embrace the enterprise. Back in January 2011, Mark Zuckerberg launched BranchOut, then touted as a rival for LinkedIn. This built a network on top of your Facebook contacts and aimed to find and match you with job opportunities. BranchOut seems to be still going, but is now billed as “letting people capture and share everyday moments in the workplace through photos, news and updates.” While it claims 30 million users, compare that to the 300m+ who have profiles on LinkedIn.

The other factor to bear in mind is the notorious difficulty of getting mainstream workers to adopt collaboration tools, no matter how compelling the user interface or functionality. I remember trying to introduce an intranet into a relatively small organisation and just giving up as no-one wanted to use it, despite the benefits it brought.

So why is Facebook trying again? I can see three benefits for the company – though at least one of them has nothing to do with work……….

1. Add more subscribers
Facebook claims over 24 million active daily users in the UK. This sounds impressive, but that is less than half the population. Obviously some of these holdouts are children, but I’d guess that a fair number are actually the very workers that Facebook At Work is aimed at. While you can keep your Work and personal Facebook accounts separate, I’m sure the company is hoping that a fair proportion of those using the platform in the office will be seduced into setting up a profile for out of hours use. So the social network will get an influx of new members, with the corresponding demographic data and potential revenues that this adds.

2. Easy to use interface
As I’ve said getting workers to use collaboration tools can be like pulling hen’s teeth. But for those already on Facebook I wager that the new At Work interface won’t be very different, encouraging its adoption. This, rather than functionality, will probably be the strongest selling point, when Facebook starts encouraging business use.

3. Spoiling for a fight
While LinkedIn has been successful in many areas, there’s still a huge opportunity in the market. LinkedIn members at present tend to be in professional roles, with a large part of the world of work un-networked. The company itself realises this and is adding a wider range of job ads for roles such as checkout operators and delivery drivers, often directly linked from employer’s websites. Coming from the personal social network space, Facebook believes it can also fill this gap, with the first step being to get within the enterprise and cosy up to HR people through bridgehead initiatives such as At Work.

The benefits for Facebook are clear, but with the network effect being less important for businesses, I’m not sure what the advantages are for the enterprise. Worries about the confidentiality of documents have already been raised, and it would take some strong policing to avoid people slacking off and reading their personal Facebook timelines rather than collaborating internally. Watch this space to see if Facebook can move into the enterprise at its second attempt.

January 21, 2015 Posted by | Creative, Social Media | , , , , , , , , , | Leave a comment

The City and the Countryside

Forget city-based startup clusters, as, according to new government figures, the countryside is now the place to launch your business. The Department of Environment, Food and Rural Affairs (DEFRA) report points out that the rural population will grow by 6% over the next decade, with more people moving from cities to the countryside than vice versa. More businesses are starting in the countryside than in cities, and rural productivity is growing for the first time since the industrial revolution.

All very positive, leading to Environment Secretary Liz Truss to talk up the innovation within rural areas and point out that people will no longer have to commute to cities, but can work from home using newly deployed superfast broadband.

This all sounds incredibly positive, but as someone who lives (and works) in the countryside I can see four big issues that are holding back rural growth.

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Image – Peter Mooney via Flickr

 

1          Networking in a field
While there are more businesses being started outside urban areas, London is still the dominant place for startups, reflecting its position as the centre of the economy. One of the advantages that London and other cities/towns have, is a concentration of people and companies in a small space. This means that it is easy to network, partner and find suppliers to help you grow. Things are much more scattered in rural areas and it is more difficult to identify other companies. I only know about the two people in my village of 3,000 people running complementary businesses to my own because of chance meetings in the school playground. So, there needs to be more done to link rural businesses together in order to help them network.

2          Intermittent infrastructure
A lot has been made about the rollout of rural superfast broadband, and that is improving. But I still don’t have a 3G signal or decent mobile reception in my office, making it more difficult to work. Getting all communications channels right is vital if companies are going to set up and thrive in rural areas. The government has talked about addressing rural mobile “notspots” and this has to be a priority to help everyone in the countryside (not just businesses).

3          Transport by tractor
I’m obviously speaking personally about where I live but rail transport links to London are rickety and slow, while roads can be congested and prone to traffic jams. This means getting anywhere takes time – more time than it should. And, given that for a lot of businesses, including mine, you still need to get to London relatively regularly, this is a cost to doing business in the countryside.

4          Finding skills
Locating staff with the right skills to help your business grow is hard, wherever you are based. But it is much more difficult in rural areas due to the lack of networking and also that a lot of the best talent disappears off to cities and universities straight after school. That is perfectly understandable – but it does mean people don’t tend to return to the countryside until they are settling down and starting a family. This leaves a gap in the market when looking for bright, ambitious staff with some experience who are willing to learn. A lack of affordable housing doesn’t help persuade people to stay in the countryside either.

Don’t get me wrong, I love working in the countryside and contributing to a thriving rural economy. However, government needs to do more if it is to create sustainable, knowledge-based companies and that starts with investment in infrastructure, networking and skills.

January 7, 2015 Posted by | Cambridge, Marketing, PR, Startup | , , , , , , | Leave a comment

The offline election

With less than a year to go until the 2015 General Election, manoeuvrings and PR campaigns are already in full swing. Since before the party conferences David Cameron, Nick Clegg and Ed Miliband have been trying to set out their agendas for the future – all with one eye on the rise of UKIP. In the case of the Tories this means pandering to the anti-EU lobby, for the Liberal Democrats claiming that things would be much worse if they hadn’t been a restraining hand on Conservative policy, and for Labour it means their leader forgetting a crucial part of his party conference speech.
Polling station by Paul Albertella/Flickr https://flic.kr/p/7Z2aa6

Polling station by Paul Albertella/Flickr https://flic.kr/p/7Z2aa6

One of the innovations of the last election was the first ever televised leadership debates in the UK. Indeed, many credit Nick Clegg’s TV performance with the Liberal Democrat’s dramatically raised share of the vote and subsequent kingmaker role in the coalition government.

So, you’d think that leaders would be keen to repeat (or even extend) this experiment given that it was proven to engage with voters and give a chance to discuss the issues head to head. Err, no. Broadcasters have proposed an extended series of three debates, with one featuring Cameron and Miliband, the second Cameron, Miliband and Clegg and a third adding UKIP leader Nigel Farage to the mix. The reaction has been muted from the main parties, while the Green Party (who currently have the same number of MPs as UKIP) taking legal advice regarding their exclusion.

Leaving aside my personal antipathy to Farage and the xenophobic, unthinking attitude he represents, there are multiple reasons for including him in a set piece debate. We have freedom of speech in the UK, he is the leader of a national party with one MP, and I’d hope that the political strategists of the three major parties can come up with a range of counter arguments (that don’t pander to the same baseless xenophobia) if they want to impress the public at large. I do agree the Greens should be involved in some way, but that is just a detail to overcome, rather than a reason to call off the whole exercise.

What is more worrying is the complete lack of interest in a rival proposal (from The Guardian, The Daily Telegraph and YouTube) to host debates that would be streamed live on YouTube. The Digital Debate campaign points out that a similar set of four debates at the last US election garnered 27 million views. More importantly it allowed politicians to engage with younger voters, half of whom primarily get their news online. While the exact form of the event is not yet set (and no party has formally agreed to it), streamed debates lend themselves well to sparking discussions on social media, are easy to share and create an online event that will engage voters.

Given that there is widespread dissatisfaction at the limited real world experience of politicians, surely anything that potentially engages them with the electorate can only be a good thing? A quick search on the internet finds that even the candidates for Sherriff of Jackson County in Mississippi were happy to debate online – why then has there been an overwhelming silence on the proposals from the UK’s politicians?

As a PR person I know that there are times when you have to turn down a good idea just in case it leads to unintended future consequences. But at a time when the electorate are so fed up with anodyne career politicians that many will either not vote or will support UKIP, it is time to be brave. Political spin doctors, and their masters, should embrace the online opportunity as a chance to rebuild the political process, rather than shying away from it. Be bold, be modern and make 2015 an online election.

October 22, 2014 Posted by | Marketing, PR | , , , , , , , , , , , , , , , | 2 Comments

Selling out too early

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

The University of Cambridge has the largest un...

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

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

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

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

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

Sting, Simon and Sex – 20 years of the Smartphone

It seems like 1994 was a busy year – not only did it see the first ecommerce transaction (a foolish purchase of an overpriced and overrated Sting album), but also the launch of the very first smartphone. And interestingly it wasn’t produced by a traditional handset vendor, but created by IBM, thus adding to the long list of inventions, such as the PC, that it pioneered but then failed to commercialise.

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

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

The oddly named Simon went on sale to the US public on 16 August 1994, and had a calendar, could take notes and send emails and messages as well as make and receive calls. Aimed at the busy executive it could be linked to a fax machine in order to handle all your communication needs. However it failed to take off, only selling 50,000 units. As curator of the Science Museum’s Information Age gallery, Charlotte Connelly, drily puts its “It only had an hour’s battery, it was $899 and there was no mobile internet at the time. So it wasn’t very successful.” Personally I’m not convinced the name helped either – “Sent from my Simon” doesn’t have the same kudos as “Sent from my iPhone” at the bottom of an email.

We’re now seeing mobile and ecommerce (as opposed to Sting and Simon) converging, and driving innovation in technology. As this nifty but messy Google Public Data graphic shows, the majority of us now use smartphones as our primary method of internet access, and, aside from reading this blog, watching cute kittens and moaning on Facebook, one of our primary occupations is buying stuff. According to Goldman Sachs, global mobile commerce will hit $638 billion by 2018 – the same amount spent via PCs in 2013. While the majority will be on tablets, smartphones are an integral part of the customer journey and will make up a direct $20-30 billion of the total.

The smartphone has changed how we interact, shop and spend our free time. We are no longer ever idle – why gaze into space at the bus stop and notice the world around you when you can play Candy Crush instead? In many ways mobile technology has outstripped our capacity to adapt, leaving humans scrambling to change their behaviour to fit in with their apps, rather than the other way around. 20 per cent of young American adults (and 10 per cent of the total population) use smartphones during sex, though mercifully the research doesn’t go into any more detail than that.

So, what does this mean for startups and marketers? The smartphone is essentially our most relied upon device, and the one we keep closest to us at all times. You can link it to sensors, watches and the world around us, through Bluetooth and technology such as beacons. It really does provide a window into our lives, which has both a positive and negative impact. Speaking personally spam text messages or calls annoy me more on my mobile than their equivalents on landline or email. It is a delicate balancing act, with the consequences for misjudging privacy or security potentially extremely damaging. But get it right with your app and you can generate big profits or deliver your message right to the heart of your target markets.

The last twenty years has seen the smartphone change the world – as well as the wider device market. It has shrunk from the 500g brick sized Simon to thinner, more pocket sized smartphones (though ironically the trend is now for larger and larger devices), with increased usability and a wider range of apps aimed at consumers as well as businesses. One thing hasn’t changed though – the Simon’s battery lasted an hour, and while I get a bit longer from my iPhone, it still can’t survive a busy day without needing a recharge……..

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

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