Very interesting article by Benedict Evans. It opens more questions than it gives answers, but getting to the right questions is always the beginning of understanding things, isn't it? Don't miss this one.
May 11, 2017
There's an interesting trend where capitalist media & actors introduce rather "socialist" ideas. I remember Bill Gates saying that robots that do your work should be taxed. That's basically the idea that ownership of production machines means a greater contribution of generated wealth to society. I'm not saying the idea is Marxist, but not far away from that. Or Elon Musk promoting an unconditional basic income, an idea that, at least in Germany, is seen as a hardcore leftist approach. Now the Economist, not necessarily known as a very cpaitalist-critic publication, calls for new antitrust rules when it comes to data. I can't hear about the oil vs. data comparison anymore, but still: they have a point.
I constantly think about the direction social networks are developing. To me, there are public social networks like Instagram, Facebook etc., and private social micro-networks like FB messenger or Whatsapp. Note that all these companies belong to Facebook. If you look at WeChat in China, they try to combine both in one huge app. Also Snapchat has a "left" side (seen from the camera), which is a messenger, and a "right" side, which clearly is a social network with a newsfeed. I haven't made up my mind yet where I believe things are going, but here's an interesting article on meshedsociety about the possible "post social network era":
"Disruptive Innovation" by Clayton Christensen is still one of my most cherished business books. So much to learn. And if the guy who wrote this makes predictions, I tend to listen closely. In his eyes, it will take "rather 9 than ten years" for a substantial number (maybe half) of US colleges to disappear thanks to e-learning.
Of course, the title is a bit misleading. For Alphabet to collapse, many, many things must go wrong. But this article is very interesting with regards to search, and this indeed might be a good source to understand threats to Google's still most important business. "Search/Intentional" vs. "Discovery" is one of my major storylines when I try to explain the dynamics of digital businesses, and this article builds on this very basic thought. Longer read, but very insightful.
One of the main selling points when instant articles were introduced by Facebook, as well as Google AMP, was that the user experience suffered from bad performance on the publisher side. And yes, companies like Google and Facebook have a different scale and the deep pockets to provide really good performance, while many publishers worry about content and banner formats. They should, but they shouldn't underestimate site performance in a world where everything happens on smartphones with increasingly impatient users. The Washington Post and Vice have invested heavily in this area:
I don't get cricket, and probably never will, but besides that the article is really interesting in the potential of Internet of things in Sports. It is easy to translate to Football, Basketball, Tennis or any other sport.
This "platforms" versus "destinations" thing is one of the key questions digital publishers are facing. Currently, I think that you can't make a wise decision based on pure strategy, but should act tactically based on numbers and data. Ideally, you don't only have your own data - you could be doings stuff wrong - but also compare to others' experiences (I wonder how long it will take until all these huge traditional publishers form a strong alliance where they really share numbers and strategies - it's a matter of survival over competition amongst themselves). The Guardian chose to pull out of two majr platforms, Facebook Instant Articles and Apple News, because the numbers don't really fit. Will be very interesting to see how this plays out.
One of my major examples for successful digital transformation is the Otto Group from Germany. They used to have every ingredient to die with their paper catalogue, but managed to become a modern retail company with impressive ease. Here's a short but interesting piece in the Economist about how they use AI - one of the big issues for online retailers is the stock they need to keep in their warehouses, often having hundreds of millions of Euros at stake in case the stuff doesn't sell (that's why many move towards becoming a marketplace where a long tail of small retailers keep the stock and the risk of buying physical material that may not sell - like Alibaba). With AI, Ottto managed to reduce surplus stock by a fifth. 20%. That's huge.
Many people, including me, believe that in future, not very far away from today, i will order a car on my smartphone, similar to Uber, and it will be at my doorstep a few minutes later, driverless, and bring me wherever I want. The car may be owned by you, but I will get a monthly invoice for my transportation by some platform (may be Google, may be Uber, may be someone else) and they will distribute my money among the car owners. On our way there, public transportation won't stand still, hopefully, and it is time this area will introduce innovation, too. Citymapper has collected 50mn to do just that. Up to now a pure software company, they are toying around with a physical bus in London that is fully connected, offers a screen that shows in realtime where you are, and on your smartphone, you can check how long it takes for the bus to arrive, how many people are on board etc. Can't wait to see how this plays out: