Why Dropbox, Teams and Slack are all coming to the same conclusion

I’ve been wanting to write about the changing work tools and collaborative landscape for a while now. My original notes were from over two years ago, but recent events prompted me to put my thoughts down. I’d love your take on this, discuss on the Slack, we accept English and French 😀

On to the update.

Computer Systems, Operating Systems and the Digitisation of Tasks

Recently Dropbox revealed the technologies and products that would further spur growth using its platform. Dropbox is trying to create a higher-level operating system predicated on users that need to get things done, rather than to “use a computer”

If we look at computer usage and how it has evolved, we see a clear and straight path traced from the beginnings of computing — where mainframes and shared access were de rigour — in which users had one or two specific tasks in mind and set out to accomplish them. Often these were scientifically or mathematically based problems that had clear goals and outcomes; solve this incredibly complex algorithm, calculate this difficult sum, resolve for X the average…, etc.

Computer usage evolved largely because the computers themselves evolved, being driven by the demands of the users that wanted to do more and more complex things, faster and faster. Technological advances aided this and in the early 1960s Moore’s Law was born. A law that has only started to become less and less relevant.

Soon, people started using computers to do what would have been heretical things back in those early times; playing games, writing letters, listing items all became not just easily accomplishable tasks, but the very reason people would purchase computers.

Further developments enabled software houses like Microsoft to provide better tools to allow the computer to get out of the way and for the user to concentrate more on the tasks for completion. The modern operating system was born. Windows, Mac OS (which transformed to OS X then MacOS, note the distinction) all provided users with a simple, safe and often fun environment to work and play.

Placed on top of these systems were the applications that enabled specialised job functions to be digitalised. Photoshop digitalised manual and often frustrating photo development, Quark Express upended magazine and newspaper layout by treating objects digitally and writing itself became a digital process only for most people.

Then something changed, something that so fundamentally shifted the paradigm of computer systems that it not only upended the way we used computers, but has totally changed their design and build. It is all attributable to what we now term “The Cloud”.

Cloud Computing

Although a recent phenomenon as far as the general public is concerned, Cloud Computing owes its origins to the very first implementations of interconnected networks, the ARPANET. ARPANET was a US Government-funded network design that had its initial design goals set to provide a failsafe communications network in the event of attack or dysfunction. ARPANET solved the problem by routing and re-routing the communications around different routes, then reassembling the pieces to make a coherent transmission. Even back then, in 1977, the cloud symbol was depicted to simplify the structural understanding of the (very complex) design.

In a working paper at Compaq (subsequently purchased by Hewlett Packard), the phrase “Cloud Computing” appeared, however, it was subsequently popularised by Amazon when they marketed their nascent cloud computing product ECC (Elastic Compute Cloud).

Once given mass appeal and implemented in business, suddenly the enterprise, pro and consumer markets were ripe for the introduction of applications that targeted specific needs, or solved particular jobs to be done.

Today, a large majority of applications in use at home and in business, are either 100% cloud or have cloud elements attached. The Cloud has allowed developers and designers freedom to try new things and the flexibility to modify quickly if something doesn’t fit. Completely new applications use cases have been developed as a direct result of the cloud computing revolution and signs indicate that it is not likely to stop anytime soon.

The changing landscape enabled because of the cloud

One spin-off from this revolution is the profound effect it is having on the incumbents and how those specific legacy systems are getting disrupted out of business.

With the release of Windows 95, Microsoft expertly leveraged it and its cash cow sibling, the Office applications bundle, to gain a hold on the entire computing operating systems business. If it didn’t work with Windows it was essentially irrelevant1.

Built for individual computing, Windows and the computers it was mostly paired with, were ill-suited to the shift towards cloud computing taking place over the last 5 to 10 years. And this is where today’s once-relegated-to application-status programs show the way forward for computing in the hyper-connected universe in which we find ourselves.

Applications that touch virtually every aspect of modern lives —cab calling, pizza delivery, doctor reservations, even toothbrush applications that analyse brushing style and offer tips for better dental health— are being built because of three main factors; the 24hours online nature of the tools, the abstraction of the ties to a specific operating system and the form-factor that creates and encourages ultra-portability.

Modern computing platforms are all connected to the Internet by default. Your phone, your tablet and the new generation of laptop PCs all have cellular radios in them, with access-anywhere, anytime, Internet.

Legacy operating systems are becoming less and less relevant. Ask yourself, do you talk about Uber as an application on the iPhoneOS or, most likely, as a service that you access from your phone?

Speaking of phones, this the third factor, exists because of miniaturisation techniques developed by companies like Apple and Samsung, that have provided always-on super-computing power in the palm of your hand.

Which gets us to the subject of the new Cloud OSes on the horizon and how, despite different starting points, the paths are converging towards the same thing for corporate and con

The Cloud OS

I’ve been particularly interested in the developments of three companies’ products and how they change the nature of computing moving it from a legacy individual task-based needs response, to a more collaborative jobs-to-be-done enabler. Dropbox, Microsoft Teams and Slack, all show enormous potential to change the way we use computing systems, …if it hasn’t happened already.

Dropbox started life out as a small add-on that allowed the transfer, storage and synchronisation of files on your local computer to their cloud infrastructure. With obvious benefits such as availability, backup and omni-availability, the reasons not to use it were difficult to find. Other developments enabled the inclusion of a more granular security model that enabled the selective sharing of files and documents between consenting participants. Dropbox stayed like this for some time and became a well respected and trusted partner for handling your data.

Recent announcements by Dropbox have shown their understanding of this coming change and their willingness to work with other providers to develop and enhance their offering, developing it to something more akin to a workplace operating system than a data synchronisation utility. Dropbox has partnered with Microsoft, Google and others addressing the need for people to get things done and not become preoccupied by the underlying systems that enable it. Directly from their software, team collaborative features are being rolled out. You can make a Zoom call, message directly through Slack and many more.

Microsoft Teams is coming to the same conclusion with their Teams platform. Built on the legacy base of Sharepoint, Teams is designed to be a more collaborative start and endpoint of doing a task rather than a step in a complex workflow. Sharepoint was never able to get past this problem. Microsoft has finally developed a platform that is able to integrate outside tools in a way that looks and works like native extensions and be easy and enjoyable to use. There are, additionally, plenty of app integrations with tools that are sometimes in direct competition to Microsoft’s own productivity tools being promoted. How times have changed!

Just looking at Project Management (PM) software, Microsoft has its own well-respected Microsoft Project tool, Teams features a slim PM tool called Planner that fits the bill for probably something like 90+% of general PM. Not only that, but they actively promote a rival, Trello.

Slack is on a similar path, with te aforementioned integrations with Dropbox, but also Microsoft’s own collaborative suite Office 365. I’ll not labour the point, but you can see where this all leading, the fight for the start point in any working environment.

The original controller of the computing experience was the manufacturer (IBM, DEC, etc.), disrupted by the operating system developer (Microsoft, Apple) and this is now itself being disrupted by the intrinsically agnostic application developer. The difference today is that the operating systems developers are not letting disruption happen to them without their own self-disruption. That fact alone (that Microsoft is willing to collaborate on such an important tool for Microsoft) should tell you that they understand that time is up for Windows. Apple itself, is also in the midst of its own transition and is pivoting more of its revenue to services, which explains the departure of Jony Ive and also last weeks’ web beta for its Apple Music service.

I want to write more about the reason why I think Jony Ive is leaving Apple at the end of this year, but I’ll be focusing on today’s event from Cupertino and seeing how that may affect my thoughts.

Collaborative tools like these mentioned are the future of modern computing, acting as the entrance, the glue and the final resting place of work, which itself is becoming ever more collaborative in nature.

The Future is Digital Newsletter is intended for anyone interesting in learning about Digital Transformation and how it affects their business. I strongly encourage you to forward it to people you feel may be interested. If this email was forwarded to you, I’d love to see you onboard. You can sign up here:

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(1) I know this is not strictly true as Apple and a few others had market share in their proprietary systems optimised for specialised computing and not general computing like Windows allowed.

Where’s the rest of the Caribbean? Follow-Up to France-Antilles

We’re heading into peak hurricane season as this graph from the NOAA shows, notice the sting in the tail in October. Do your preparations and check on them weekly!

On to the update.

World Blockchain Forum, London 2019

The World Blockchain Forum kicked off in London this past Sunday and runs for 3 days. The Forum is a roaming event that takes place all over the world and multiples times a year. It is considered in the top 20 of the world’s finance conferences and boasts over 1500+ CEOs, Executives, Investors and Officials.

Our events in Miami, Chicago, Las Vegas, Los Angeles, Dubai, Amsterdam and New York have been attended by over 20,000 executives, investors, entrepreneurs and tech visionaries from around the world.

As you know, I’m not too hot on the cryptocurrency bandwagon for multiple reasons, notwithstanding fraud, but Blockchain is a technology with great potential to help digitise operations and streamline processes to make users’ lives better. 

I wrote about the subject in Blockchain ≠ Cryptocurrency, largely because I wanted to dispel the myth that Bitcoin etc., is blockchain. And to try to prevent the incorrect and interchangeable use of those terms. They are not the same thing. Technically speaking, one relies entirely on the other to build out its services.

I’m an on-the-record sceptic of Bitcoin and other Cryptocurrencies, and so far, nothing I’ve seen has led me to believe differently. They are almost all, a waste of money. They are all, without exception, a huge waste of energy in a time when economising energy should be a priority not just for governments but individuals alike, and at the very worst end of the scale, some are downright fraudulent. That being said, the underlying technology of these currencies is actually quite interesting and has place for use in Digital Transformation, hence why I’d like to talk about it in this week’s issue. That technology is, of course, blockchain, or as it was originally known as, block chain.

In researching this article, I found a few resources from last year’s conference and I’m currently parsing through the YouTube playlist that has been released. I was particularly interested in the interview by the Hon. Wayne Caines, Minister of National Security, Government of Bermuda. Although the interview could have been a bit more structured and technically detailed, there were a few interesting points that were discussed that got me thinking about the rest of the Caribbean. Where the hell was the rest of the Caribbean?

Bermuda has set itself several goals and legislation has been amended to increase their chances of reaching them; the Digital Asset Business Act, the ICO (Initial Coin Offering) Bill and its Virtual Currency Business Act.

Bermuda’s strategy is to differentiate itself in a crowded market by aligning as many factors as possible to enable the digital transformation of it island. Like the Caribbean, it’s isolated, it has resource issues and it has difficulties finding meaningful investments for development. Its banking system was hitherto old-school, but the young PM, who intrinsically understands digital opportunities, is making great progress. I suggest you watch both the interview and the Hon. Caines’ presentation.

I’d like to see other territories do some of this. A concerted effort by CARICOM members —as a start— to distribute competencies, the shared benefits to all could be substantial. If we’re all trying to do the same thing, inevitably it leads to a zero-sum game, where all participants lose.

$15 Million MOU signed with Binance in 2018

The memorandum of understanding, worth $15 Million, was signed with Binance Group, with the aim of establishing funding for Fintech and blockchain-based companies that are targeting the educational field. In return, Binance is creating 40 new jobs with two-thirds allocated to Bermudians.

Binance is a Cryptocurrency exchange headquartered in Japan — it started out in China but has since relocated due to a Chinese cryptocurrency ban — and is currently on of the largest exchanges operating today.

Bermuda is seriously transforming its legislation and structuring the development of digital services and it is a good sign that some countries are taking serious steps to implement changes. It’s not going to be easy and, I for one, would argue that too heavy a reliance in cryptocurrencies is probably a bad thing, but the systems put in place can be used for other digital services that will increasingly be based on Blockchain. Bermuda has built out a number of online civic services, with more coming online all the time, however, like any Digital Transformation, it is a journey and not a project!

France-Antilles follow-up

As of today, 5 September 2019, eight (8) parties have registered their interest in taking over the failing media organisation that is responsible for the local newspapers of Guadeloupe, Guyane and Martinique, amongst other ventures (also in difficulty) according to la 1ere Martinique.

The candidates

Hildergarde SAS

A Paris-based company, that in 2002, created a network of media companies present in film, television, magazine production, literature and press. My research suggests that they are mostly concerned with media-oriented publications, so what experience they have in daily newspapers is hard to understand.

Caribbean Active Broadcast

A business based in Martinique, specialised in Radio. Unclear, again, its experience in newspaper production and distribution. An organisation possibly looking to diversification due to declining revenues in advertising (my assumption).

Alizés TV

A Guadeloupéen television channel, created by an ex-employee of the national television chain France Télévisions. I keep labouring the point, but again, newspaper experience? It’s fundamentally important, because newspaper production and distribution are not the same as television. Once created, a show has virtually zero marginal costs associated with distribution and media can, and is, often re-used. Yesterday’s newspaper is todays fish and chips!

Trace Global

Contemporary and urban music video show and reality television programs. A great fit for a daily newspaper? Their revenue is largely made up of subscriptions over cable television (the pressure is on, thanks to Netflix, etc.), advertising and selling own-label content (increasingly more expensive to make).

Medias du Sud

Owner of the currently active ATV Martinique, and the failed expansions into Guadelopue and Guyane in 2018, the company is a television network based in the south of France. You know what I’m going to say next…

Prim SAS

Prim is a printing company based in Guadelopue. It’s unclear to me what they are even doing in this race, unless they see an opportunity to purchase a brand-new printing press on the cheap as part of expansion plans for Martinique. Those operations costs are a sting in the tail though! Not to mention that physical printing with environmentally damaging materials is a business likely to legislated out of business in the coming years.

Hubert Pedurand

This is the interesting one from a business point of view. The proposal is based on an SCOP model. Société Coopérative et Participative (SCOP), essentially an LLC where the majority shareholders are the employees themselves. In a heavily cost bearing business that is the production of atoms and the physical distribution of said, the SCOP model has its limitations, in that external investments are limited to 49% of the capital. That doesn’t preclude in-kind or other investments, but it does diminish the attractiveness for potential investors.

The prognosis

For the moment, no business plans have been made public and I would love to see what each pretender is proposing. I’ll just have to wait and see, but I’m keeping a close watch on proceedings.

We see a common theme emerging, radio and television media companies postulating, in probable diversification strategies. These are sustaining evolutions and they don’t feel like they are understanding the fundamental reasons why FA failed. Of course, I may be wrong, and hat-eating will ensue, but I doubt it.

Perhaps intentions are to keep the current staff and management as, quite rightly, they immediately bring onboard many years of experience in the industry. But every few years FA keeps failing, what could be wrong?

I believe that a failure to recognise the digital reality will end in failure and I set out my arguments in The slow demise of France-Antilles and Newspapers in the Caribbean.

In the English-speaking Caribbean you may be wondering what this has to do with you. This scenario is playing out across the world, I can’t see in any way how the Caribbean will be an exception!

The Future is Digital Newsletter is intended for anyone interesting in learning about Digital Transformation and how it affects their business. I strongly encourage you to forward it to people you feel may be interested. If this email was forwarded to you, I’d love to see you onboard. You can sign up here:

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What happens when atoms are turned into bits?

Hurricane Dorian is looking increasingly dangerous and could impact the northern Bahamas or Florida as a Major Hurricane (Category 3+) as early as this weekend. My thoughts to my friends in those areas. Get your preparations finalised today!

On to the update:

After the announcement that the long-standing newspaper of the FWI was in real financial difficulty, I thought I’d take a look at the business model and why it failed, what can be done and how it should be a cautionary tale for newspapers throughout the Caribbean. As ever, this is my opinion and you’re more than welcome to challenge and discuss directly with me. Join me on the Slack discussion group.

France-Antilles in serious trouble

From the Martinique site of franceinfo.tv (the national television news chain) dated the 12/08/2019:

L’équilibre financier misé sur 3 ans lors de la reprise du groupe en juin 2017, n’est donc pas à l’ordre du jour. La nouvelle propriétaire du journal, Aude-Jacques Ruettard (patronne de la holding AJR Participations et petite-fille par alliance du défunt magnat de la presse Robert Hersant), s'était aussi engagée à maintenir l'emploi de tous les salariés "au moins durant deux ans".

Translated:

The financial bet over 3 years, when the group was taken over in June 2017, is therefore not on the agenda. The newspaper's new owner, Aude-Jacques Ruettard (patron of the holding company AJR Participations and granddaughter by marriage of the late media mogul Robert Hersant), had also pledged to keep the employment of all employees “for at least two years."

The reality is, however, far from that, and sadly, there are currently 282 employees that are set to lose their jobs throughout France’s three Départements in the Caribbean, Guadeloupe, Guyane and Martinique.

On the 2nd of August a tender was issued to find a buyer for the failing media business, and its close date is in less than two weeks. Currently there are no offers on the table and there may not be any serious long-term buyers either. For what its worth, I think they’ll find a buyer, but it’ll be a short-term, utterly-ignorant-of-the-reality-in-the-digital-world benefactor that will continue to (try to) sell what is essentially free information printed on dead trees.

What got France-Antilles here

Three major factors have led to the current situation; ads have become easy and cheap to set up using the online platforms — with feedback obtained from the online platforms out-manoeuvring what a static mass-market ads could ever achieve —, the distribution of bits rather than atoms became essentially free and the targeting and the quality of information naturally decreases with abundance.

Easier, better and cheaper will always win out over difficult, inferior and expensive. The ad market for newspapers was completely disrupted and was only noticed by the industry when it was too late.

These two images tell us everything we need to know:

Source: mondaynote.com

Throughout the Caribbean, this scenario is likely to play out many times in many territories, if it's not already happening, and the experience in the FWI should be a warning sign to those not yet affected.

Unnecessary Costs

In printed newspapers, there are many fixed costs that render the finances difficult to balance. Printing presses cost phenomenal amounts of money and require trained and dedicated staff to operate them. When you are competing against virtually free digital distribution to get the same information out to your audience, these extra costs are a major burden, and I would suggest, unnecessary now.

Not only that, but the costs of the raw materials required to physically print — i.e., paper and ink — add to the operating budget in a non-inconsequential way. Paper, by the way, is not getting cheaper either due to environmental concerns. Ink is expensive and it is also toxic. Atmospheric fumes from inks are noxious and large costs associated with the handling, processing, usage and disposal of ink are apparent. 

Then there is distribution. Without going into any detail, it’s obvious to conclude that distribution of reams of paper has associated costs. Those costs being elevated by the fact that, as a newspaper and the importance on getting to the outlet early in the morning, entails higher-than-standard-hours wages.

I was astounded when I learnt that France-Antilles invested in a brand new, huge printing press, at a cost of multiple millions — money better spent on restructuring (see below) and building out digital-first products (see below). Not only did they encumber their financials with this burden, but France-Antilles decided to redesign the layout of the physical newspaper and massively advertise it over several weeks, with “sneak preview” adverts that hinted at big changes a coming. Rearranging the deck chairs on the Titanic in my view.

The Flawed Business Model

“Information wants to be free” a phrase attributed to Stewart Brand who founded the Whole Earth Catalog in the 1960’s. He argues that technology could be liberating instead of oppressing and at the first Hackers Conference in 1984, he apparently told Steve Wozniak (one of the three co-founders of Apple):

On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.

The prescient point of his argument was that information’s cost was getting “lower and lower” and that is the situation most publications find themselves in today. Much of the information provided in newspapers today is widely available online from multiple services, and here’s the sting in the tail, for free in many cases.

But what is most important in the statement above, is the fact that he identifies that information has value and is hence, “expensive”, and it is precisely here that most newspapers fail in their strategy. Much of the information is provided in “filler” articles that have been scraped up from wire services such as AP (Associated Press). These articles have literally no value virtue of the fact that every news outlet prints what is, for all intents and purposes, the same article.

Newspapers are a business built on assumptions from a bygone era. Firstly, the sales and advertising arms of the newspapers require a lot of staff. There is Sales, there’s Account Management, there’s Graphic Design and of course Operations Management. Those are huge fixed cost to deal with for just a pretty advertisement, and only profitable for premium advertising (of which there is less and less as outlined above). Newspapers also operate on the assumption that the bundle of services, is in and of itself, valuable. That was true, but is no longer relevant for readers.

Couple this with the very real fact that the Business Model of the newspaper business took a serious hit when Facebook and Google cornered the market for advertising, with very grave effects on the price and availability of advertisers willing to spend on printed ads. The protected environmental factors have prevented newspapers from listening to reality. I find it all the more surprising given that here, in the FWI, there is no real competition, which proves the point about external factors playing the central role in killing these businesses.

What would be a more appropriate Business Model?

It’s true that I am writing this from the point of view of a concerned party, but I believe that there is scope for local newspapers in the Caribbean to develop sustainable and profitable businesses, but the change in mindset is stopping them from seeing this. The successful publication and business model should address the flaws I’ve outlined above; reduce unnecessary costs and provide information that is valuable.

Firstly, today’s technologies allow publications to remove and reduce much of the fixed costs associated with sale and distribution (digital). Wordpress with a Memberful and Stripe integration is enough for all but the biggest of publications. Tag on Social Media Managers such as Buffer, and the job to be done (promotion) is made that much easier.

In order to provide valuable information, newspapers need to stop publishing widely available drivel they scraped from the wire. In practice that means no international news, virtually no national news and god forbid, lifestyle and fluff articles. They have their place, but it is not in newspapers. Writers and editors need to be set free to write in-depth and interesting articles with a local impact, and impact that is felt by the readers. That is, the readers need to feel a sense of connection and sharing of feelings with the newspaper. Focusing on the feelings generated by users and not filling pages with regurgitated wire articles would go a long way in developing this relationship.

This is not a traditional newspaper business model. That is because the traditional business model is dead, or at the very least, dying.

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Digital Transformation and natural disasters

Customers 2.0 and the importance of word of mouth

In trying to be brief and to simplify the customer’s journey to buying products in modern times, I think I may have not been as clear as I could have, which led to some confusion:

This affects how customers behave in their consumption and how they discover new things. Here in the Caribbean, word of mouth is still a strong discovery tool, but it is becoming less and less relevant when we’re consuming more products and services online. The search engine has rendered word of mouth a secondary validation tool. Today, customers search first, then ask peers and online forums for recommendations.

In this badly worded paragraph, I was trying to put forward the idea that, as the internet takes a more central role in the research and decision-making process to buying products and services, the order in which people are using tools is changing.

Word of mouth is an extremely important tool in the Caribbean, and one could argue that it is the most valuable tool to help people make up their minds. Communities here, are very close and much value is placed upon the sharing of information about purchases and experience. But that doesn’t mean it is the first port of call either.

Source: datareportal.com

In my research over the last few years, most businesses and business owners I have talked to have stated that their business grew from word of mouth more than marketing. Obviously anecdotal and unquantified, but it’s at least the impression and that is an important data point in and of its own. But discovery is being done online, that’s the key message.

So to clarify, I’m seeing people in the Caribbean researching online for products and services more frequently through forums like Reddit and Facebook (1) — remember that in the Caribbean the average time spent on a Reddit page after being opened is 10 minutes, just behind Facebook with 15 minutes— then talking to peers to get a more “valuable” review of the product or service. Certainly, some of this is done face-to-face as you would expect, but the relatively new an interesting extra dynamic, is that an increasingly larger amount of word-of-mouth is being done using digital platforms too!

Why is this? Two main factors seem to be in play here; we’re more physically separated and we request answers fast and at any time of the day.

Digital Transformation and natural disasters

Writing this as Tropical Storm Dorian is about to pass over the Lesser Antilles, somewhere south of St Lucia, I got thinking about how a coordinated effort by all stakeholders could help with preparing, living through and the aftermath of natural disasters like hurricanes and earthquakes that are so prevalent here in the Caribbean.

The states, the insurance companies, the retailers and the population, if coupled together well, could provide and use services that would make everyone’s job just that much easier, reducing time to get claims acted up, get money out there immediately and reduce costs for everyone involved.

Like me (yeah right!), I’m sure you’re diligently documented all your items of value that would need to be replaced in the event of a major storm, or that you even know where everything is and how much it cost, its insurance value, etc, etc.

There is opportunity to build out systems that allow — from the point of sale — relevant information to flow to a secure vault in the cloud that you can use for claims. You buy a new fridge-freezer, its model number, serial number, sale price, are all pushed from the retailer to the vault. You allow your insurer to have access to this to insure you correctly. A simple app on a smartphone could start the claim process immediately as virtually no information gathering would need to be done (something that can take a long time whilst living through the disaster).

Having more detailed information could allow insurance companies to better estimate their liabilities and free up money when and where its most needed immediately following the hurricane.

This is, of course, the dream and like we’ve seen with all positive initiatives, there are negatives to consider too, but even half of this wish cast Would be a great help to individuals in our region.

If you haven’t read the earlier articles in the series, I encourage you to do so to get a better overall picture of the methodology. I’ve included an index here for you convenience:

Part 1 - Auditing your current state

Part 2 - The Value Chain

Part 3 - Porter’s Five Forces

Part 4 - Data, and its value

Part 5 - Turning data into business value

Part 6 - The 5 step Digital Transformation methodology

Part 7 - Segmentation and targeting

Part 8 - The Value Proposition

Part 9 - Customers 2.0

Admittedly, Part 6 should have been Part 1 in hindsight … You live and learn :-)

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1 From Hootsuite/wearesocial report Digital in 2018

Customers 2.0, Networked, Connected and Interactive

I’m back after a short and very unconnected holiday in St Lucia, an island I am very fond of for many reasons. I’m looking forward to getting back into the swing of writing more frequently and developing the other project I hinted about in a previous post. Stay tuned.

Lastly, I hope the title renaming doesn’t throw you off guard too much. To keep some consistency, I’ve titled this issue as planned with “Issue XX” removed. 

This week is all about the customer and their impact on our Digital Transformation. Today’s customer has changed and is changing, and you need to me mindful of this and adapt. Let’s get in to it.

Onwards to the issue.

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Source: Merriam-Webster

Continuing the series and picking up from where I left off, the next lever for Digital Transformation is a laser sharp focus on your customers. Customers are the make or break part of any enterprise, ask any business leader. Don’t get this confused with the oft repeated mantra that the “client is king”, this may have been true some time ago, but it is not entirely relevant today. The best way to think about your clients today is to remember that your clients have a choice. 

Wealth is not about having a lot of money; it's about having a lot of options. - Chris Rock

I don’t know when Chris Rock made this insightful comment, but in today’s increasingly digital world, customers are exposed to more choice than ever before, and it is up to you to entice them to use your products and services. This exposure changes the way in which your potential customers act when making buying decisions, and how they go about “hiring” something to allow them to do the job to be done (JTBD).

Customer 2.0

Aside from the important generational differences, there is now a common set of attributes to today’s customers that affects all types, generations and segments. It is precisely because digital and digital services are so ubiquitous that this is true. In all but the most underdeveloped nations in the world most of the population own a smartphone with — and most importantly — a reasonable data plan. Which explains why the first attribute is so true.

Today’s customers are networked and this is the first attribute! They are permanently connected to their cell phones using them multiple hours per day (see graph below), and when they’re not using their phones, their computers or tablet computers are connected to the Internet as well. This is a fundamental shift in behaviour and the last 5 years or so, and has had an enormous impact on their behaviour. Customers are literally a less-than-one-second-search away from getting the information they want. I recently found an object I’d never seen before in the washing machine — it had come out of one the pockets of my son’s clothes — and the name on the item didn’t give me much of a clue. I searched it, and within less than 10 seconds I knew exactly what it was, what it was for, how much it cost, where to get one and plenty of other (mostly marketing) details about why its the best at what it does. The same will be true for your products and services.

This affects how customers behave in their consumption and how they discover new things. Here in the Caribbean, word of mouth is still a strong discovery tool, but it is becoming less and less relevant when we’re consuming more products and services online. The search engine has rendered word of mouth a secondary validation tool. Today, customers search first, then ask peers and online forums for recommendations. They leverage the network they have, which in many cases spans to many hundreds of people and in some cases many hundreds of thousands. Formerly, it was your immediate entourage of a few tens of friends and family, most of whom had no idea on the subject you were researching. And so, communication itself has fundamentally changed not only in type, but in scope.

Source: https://www.statista.com/statistics/319732/daily-time-spent-online-device/

Another attribute of Customer 2.0, is that they are incredibly connected. The paradigm shift that the network brought to discovery, expanded to all users of the network, making them link together to create huge dynamically connected groups where information and experience is there for all. They no longer live individual experiences; they share their experiences with anyone and everyone. They create new networks with the explicit purpose of sharing information and experience down to the minute details using todays platforms like Twitter, and in some cases they build new platforms solely to partage this knowledge with others. You’ve no doubt noticed the abundance and impact “Influencers” are having on brand awareness. Some brands have chosen to ditch lucrative contracts with celebrities, and have substantially reduced costs and increased control by using Instagrammers to get their message across. They have understood that modern marketing is not about persuading their potential customers, it’s about inspiring purchase through association to a better lifestyle. The customer has the control and sway, it is no longer you or your business.

Shared experiences, although being available to all, are consumed at different times or in different contexts, giving the impression that we are unique. Previously, we would all watch or listen to the same film or series the day it was diffused to the mass market via the established media networks. We would then all talk about it the next day at school or in the office, the spoiler alert was virtually non-existent. Nowadays, we consume not only at the time or in the context we choose, but we consume at the pace we desire. Netflix started releasing all episodes of their exclusive series on the same day, changing consumption habits of those that would like to watch several episodes in one sitting instead of waiting for next weeks’ diffusion.

This connection additionally gives rise to the creation and sharing of niche information on a much larger scale than was previously possible. You can look for the most obscure topic using today’s search tools, and you’ll almost certainly come across a YouTube video about it or a huge Reddit thread of enthusiasts pouring over minutiae. Places like the Caribbean were previously shut off from participating in “fan” groups, through very real world hinderances such as distance, time zone and sheer expense. This is no longer the case.

Which leads me to the third and final attribute of Customer 2.0. They are interactive in a way that we have never seen before. We’ve all seen the freephone numbers on the biscuit packet asking for feedback if something is displeasing, these were however, rarely or if ever used. The reason, friction! Remember when I talked about the JTBD, I mentioned that an important aspect to not lose sight of, was the amount of friction not takes a customer to get the JTBD finished. If your solution involves more friction, customers are likely to look elsewhere, even if it is more expensive. This is because today’s digital society has spent much time reducing the friction at each step in the customer journey. Customers today have very little friction to contact you directly using Twitter, and they use it liberally too. Not only do they use it, but they expect a rapid response and a rapid resolution to their query. I’ve had interactions with companies that were resolved quicker and more accurately than by plodding through traditional “support” channels.

I was recently on a trip and had phone issues meaning I couldn’t use the phone apart from when connected to Wi-Fi for messaging through WhatsApp or iMessage. Using the browser on the phone I requested help through their support page, a mistake. I received a response two days after coming back, by email, terribly worded and incomprehensible in terms of resolving my actual problem! I’m looking to move operators in the next few months.

Strategies in a digital world

When looking at how we can reach our potential customers and we look at how the world used to be compared to today’s landscape, we see that customers are no longer a mass-market segment and they are part of an ever-changing network. They no longer are susceptible to mass-market communications over mediums like television and radio (or at least not in the same way as before). Today’s customers want to be part of the experience, but more importantly have direct influence on the process. We see this in some of the more progressive brands today, employing Instagrammers to participate in the prototyping stage, allowing both the brand to benefit and the influencer to expand their reach.

Perceived value is another important factor that the modern customer innately thinks about, and more importantly, judges your products and services. I recently listened to a podcast where the topic of discussion centred around VR and AR. One of the guests had conducted a study — being the lead researcher for his company — and he noted that currently, commercial AR applications like Microsoft’s Hololens are used on average around 40 minutes per day. Businesses and users are evaluating the value of the product, calculating that several thousand dollars of investment are only providing a couple of tens of minutes of use. So you need to be mindful of not only the JTBD, how you can make that frictionless to “hire”, but also, once hired does real-world use provide perceived value?

It’s a lot to think about, and a lot to measure and analyse!

The strategies you need to develop must address all these points and try to answeer basic questions like these:

• What are the types of information that my potential customers are looking for related to my products and services?

• How do they discover this information and though what mediums?

• What are the JTBD?

• What attributes are they looking for to solve their JTBD?

• What do they not like and why?

• How could we include potential customers early in the cycle?

• What would customisation of our products and services look like?

As you can see your customers or potential customers are a big part of the Digital Transformation process and one of the most important (of not the most important) lever to tackle when developing your Digital Transformation strategies.

I haven’t finished developing the ‘how’ of the strategies required in this article and it is already very long! Next instalment will discuss in detail some of the things you can do to build out those strategies. Look forward to seeing you next time.

I hope this helps you with your own Digital Transformation process. If you have any questions or want to discuss your own projects, please let me know, I’d be only too happy to help out, click to email me at info@dgtlfutures.com.

Reading List

Le quotidien France-Antilles menacé de disparition ? - Martinique la 1ère

For the non-French speakers amongst my audience, the local and highly regarded newspaper for the FWI, France-Antilles, is in severe financial trouble. They recently redesigned the paper and heavily invested in a new printing press in a move that can only be described as rearranging the deck chairs on the Titanic. This is almost certainly not the only example around the Caribbean, and it is a topic I’d like to address in a future article, but one I haven’t quite found the angle as of yet. Suffice to say however, that the old media business model of advertising, once lucrative and a competitive advantage, is now a competitive liability… Disruption Theory and Aggregation Theory.

Annual Conferences | CANTO

This is a good resource for researchers like me to get a feel for Digital Transformation throughout the Caribbean and further afield. You’re welcome.

Older People Need Rides. Why Aren’t They Using Uber and Lyft?

One of my pet subjects — ride-hailing services and public transport — this NYT article looks at the older generations’ use and how other services like health and occupational therapy are linking up with Uber and Lyft to provide better services to those in need. A clear opportunity for the Caribbean if we could just unlock the potential, come on banks, give us a bone!

The Future is Digital Newsletter is intended for anyone interesting in learning about Digital Transformation and how it affects their business. I strongly encourage you to forward it to people you feel may be interested.

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