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Apr 23, 2018

Amazing Amazon

You can criticize Amazon in many ways, but there's an angle to this company where you have to be in awe - the angle is how strategic, long-term, against-your-traditional-wisdom and innovative the company is being led. Here are three things that I love, and maybe you didn't know all of them.

1. Ever since 1997, I have used Bezos' shareholder letters in presentations and talks. They are well known and the first one is an eternal classic. I think the 2018 one is also wonderful. Besides talking about milestones and how customers are "divinely discontent", you also learn a few inspiring things about the company:

"We don't do PowerPoint (or any other slide-oriented) presentations at Amazon. Instead, we write narratively six-page memos. We silently read one at the beginning of each meeting in a kind of "study hall". Not surprisingly, the quality of these memos varies widely. Some have the clarity of angels singing. They are brilliant and thoughtful and set up the meeting for high-quality discussions. Sometimes they come in at the other end of the spectrum [...] by tradition at Amazon, authors' names never appear on the memos - the memo is from the whole team."

Read the current (and 1997) letter here:

https://www.sec.gov/Archives/edgar/data/1018724/000119312518121161/d456916dex991.htm 


2. They have an annual, ultra-exclusive, invitation-only, super secretive conference (MARS) where anyone who is an important contributor to our future, from science, business, philosophy, politics etc. (except people from Apple, Google, Microsoft, Facebook, for obvious reasons) come together and discuss, play, explore. Not only listening to talks - but really participating.

More about Mars here:
https://www.fastcompany.com/40547902/at-amazons-mars-conference-jeff-bezos-plots-the-future-with-200-very-big-brains
https://qz.com/1234822/inside-amazon-ceo-jeff-bezos-private-mars-conference-for-a-new-golden-age/


3. They invested the ridicolous amount of 22.6 billion USD in R&D in 2017

That's 41% more than in 2016. Google's parent company Alphabet came in second with 16.6bn, Alibaba is estimated at 15 bn (source here). Facebook spends more than Pfizer or Daimler on R&D - with 7.8bn. And that's roughly a third of what Amazon invests in innovation, research and development. Amazing.

https://www.recode.net/2018/4/9/17204004/amazon-research-development-rd


Talking to books

AI powered new search tool by Google that sounds super promising: "Talk to books". You can send out a query in natural language and you can access the wisdom captured in books (instead of websites with traditional Google search).

Tool: https://books.google.com/talktobooks/

Article: https://qz.com/1252664/talk-to-books-at-ted-2018-ray-kurzweil-unveils-googles-astounding-new-search-tool-will-answer-any-question-by-reading-thousands-of-books/

Google’s AI-enhanced spreadsheets are a taste of white-collar automation

The headline above is copy pasted from their clickbait on Facebook - terrible. Not everything that is cool & new in software is an AI threat to jobs, subsequently democracy and will ultimately destroy humanity. The article is about a super nice UI tweak for spread sheets: you can ask "create a histogram of xyz sales" and the spreadsheet just does it if the according data is there. There may be AI involved. But that is so far away from an AI deciding whether it makes sense to create that histogram, or what to do with it, or "white collar automation" in any way.

https://www.technologyreview.com/s/608023/google-sprinkles-ai-on-its-spreadsheets-to-automate-away-some-office-work/

Network effects @ Facebook

I still think that network effects are the most under-estimated dynamic in digital businesses. There are far more complex ones than the easy to grasp two-sided networks like seller/buyer platforms. This article gives a great overview on the layered structure of network effects within Facebook, and although I would maybe argue about some details here and there, it is a recommended read because you can apply the structure of network effects so well on other businesses and strategies.

https://medium.com/@nfx/network-effects-predict-the-future-of-facebook-35f9d3c214ec

Apr 10, 2018

GIFs should be part of any content strategy

I wouldn't go so far to talk about "GIF strategies", but having both terms in one sentence is already satisfying for me. Bayern Munich, also Bundesliga (DFL), Borussia Dortmund and others have embraced GIFs as an accelerator of social media communication, and one GIF says more than a thousand words in many cases. Nice piece about GIF in sports:

https://digitalsport.co/gifs-sport-clubs-leagues

Generation Z is a huge experiment

I am afraid we have no clue (but also little options) about what we are doing to Generation Z and all that are following. We give them tablets when they are 4 and tell everyone how intuitive they swipe and press. When they get older, they spend 6-12 hours of screen time a day, and we have no clue what this does to them. We have some indications, but then again, there can't be long term studies as smartphones are not around that long, and especially everything that happens on smartphones changes quickly. A generation that is served by algorithms seems to get bored quickly, though:

https://www.thedailybeast.com/generation-z-is-already-bored-by-the-internet 

Does your country have an AI strategy?

If you are not in France, ask yourself this: Could your head of state, or even a secretary, give an interview like this on AI? Or do they even know what "Wired" is? Read up on Emmanuel Macron's view of AI. Meanwhile, we are discussing how ridiculous or desirable flying taxis would be in Germany.

https://www.wired.com/story/emmanuel-macron-talks-to-wired-about-frances-ai-strategy/

Incentive based sponsoring

About time: So many sponsoring deals, even on the highest level, are just based on gut feeling, on fear of missing out, or on personal desires of high-ranked managers. Anheuser Busch / Budweiser now obviously implements a new type of contracts and model that may very well influence the whole industry (and probably in the right direction): based on a flat fee, certain KPI milestones unlock incentives. As Anheuser is more or less involved in every corner of US sports (NBA, MLB, NHL, NFL etc.), this can be hugely influential. It would make governing bodies and teams measure what they do, and other sponsors may follow. Exciting to see where this may lead us:

https://www.forbes.com/sites/kurtbadenhausen/2018/04/02/anheuser-busch-launches-revolutionary-incentive-based-sponsorship-model/#31deee393d5f

Dynamic / personalized pricing is coming

For products that you could buy physically, it might take a longer time. For services like transportation, we are close already: Uber is reportedly already applying dynamic pricing - best guessing what you are ready and willing to pay individually, at a certain point in time, for a fare instead of calculating one price that is the same for everyone anytime. I have mixed feelings. On the one hand, this can be a great business tool. It can also be a kind of "socialist" tool to adjust prices. Who said that "one and the same price for everyone" is the most correct system of pricing? Fines for example, for running over a red traffic light, are vastly different for a student, for me, or for a football professional, although we comitted the same "crime". On the other hand, it might be also very dangerous for businesses: If I have the feeling I am getting ripped off... especially because I was a good customer (would buy anyway, so no discounts or special offers for this guy - the opposite, a higher price)... it would kill my loyalty in an instant. Difficult topic, interesting to observe.

Overview in the Guardian:
https://www.theguardian.com/global/2017/nov/20/dynamic-personalised-pricing

Airlines:
http://www.travelweekly.com/Travel-News/Airline-News/Airlines-inching-closer-to-dynamic-pricing

Uber:
https://news.ycombinator.com/item?id=16706164