Paul Wallbank – Brilliant Communications

Category: business advice

  • Tipping and mobile payments

    Tipping and mobile payments

    This post is the second in a series of four sponsored stories brought to you by Nuffnang.

    During the recent switch over to chip and pin payments, many in the restaurant industry feared that tips would fall and waitstaff would lose jobs, the reality is somewhat different claims PayPal.

    Last week I had the opportunity to tour the PayPal Innovation Centre in San Jose where they showed off the work they are doing in the retail and hospitality industries to change payment systems.

    One of the products they showed was their Pay At Table app that integrates into a café or restaurant’s point of sale system and allows customers to pay their bills immediately.

    The immediate reaction to this has been resistance from restaurant managers who were worried customers to skip without paying. For waitstaff, the worry was they could be replaced by an app.

    It turns out the technology has had a different effect, the productivity of floor staff in the establishments where the app has been trialled has improved substantially.

    “In a typical café it takes around ten minutes to get the check,” says the lead demonstrator of the Innovation Center, Michael Chaplin. “We find that freeing waitstaff up to help customers and letting them pay their bills faster means everybody is happier.”

    With that ten minute per table improvement, management have found customers’ satisfaction has improved and the waitstaff have seen tips improve – partly because diners are happy and also because the tipping is integrated into the payment, calculating an appropriate gratuity is always a hassle in the United States.

    That ease of payment from mobile phone and table apps is rolling across industries, it’s not just limited to the hospitality sector. Increasingly these technologies are being used by tradespeople, retailers and across the service industries

    Increased productivity is more than just saving money and reducing staff numbers, it’s about giving the customer a more seamless and easy experience.

    All business need to think carefully about how they can use technology to improve their service and increase revenues.

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  • Rise and fall

    Rise and fall

    Twenty years ago UK supermarket chain Tesco was an also ran.

    A decade ago it was the market leader.

    Today Tesco is in trouble again as low cost European competitors like Aldi and Lidl have chipped away the British majors’ market share.

    A few weeks later, Tesco shares plummeted on revelations the company’s profit guidance had been overtstated by 250 million pounds with the company’s chief executive Dave Lewis announcing several executives have been stood down as auditors investigate the descrepencies.

    Tesco is a very good example of how quickly how competitors can come from behind in today’s marketplaces; first Tesco itself during its 1990s rise and then its crash in recent years.

    We live in rapidly changing times. Incumbents and market leaders shouldn’t assume their positions are safe.

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  • A land of grace and favors

    A land of grace and favors

    Yesterday the Search Engine Land website broke the news that Google Authorship is dead.

    The quiet abandonment of Google Authorship once again shows why businesses and creative workers shouldn’t trust online services to reward their work.

    Google Authorship was a subset of the company’s Google Plus service that let writers and journalist claim their work.

    For authors Google Authorship was a useful tool in the battle against the verminous ‘content scrapers’ whose business lies in stealing other peoples’work. It was also a good way of building an online portfolio.

    Google benefited from a huge improvement in the quality of its data as its algorithms authorship made it easier for the algorithm to identify original sources.

    Using Google’s Authorship tool wasn’t easy, like many of the company’s services it was cumbersome to setup, opaque and subject to arbitrary rules.

    Many journalists, bloggers and writers went through the process however as they saw the benefits and trusted Google to maintain the service.

    Trusting Google to maintain any service is risky with the company’s well deserved reputation of axing services the moment management’s attention turns to the next shiny thing.

    Which is exactly what’s happened to those who’ve invested their time in Google Authorship and they join the disillusioned masses who’ve been burned by the company previously with services like Google Wave.

    The lessons from Google’s dropping of Authorship shouldn’t be lost on those working hard to build Google Plus profiles.

    Right now, despite the propaganda for those with a lot invested in the service, Google Plus is not travelling well and it’s in a dangerous zone within the company with the departure of its internal management champion Vic Gundotra earlier this year.

    The risk of investing too much time on Google Plus is clear, however it would be unfair to single Google out as being alone in presenting this risk.

    Every social media service and publishing platform carries the same risk.

    Those spending hours creating Facebook communities or carefully crafting LinkedIn or Medium posts need to remember they are only their by the grace and favor of the service.

    Nothing replaces your own website as an online property. Your mission is to drive as much traffic to it as possible. Social media platforms can help you do this, but they are not your friends or business partners.

    Don’t forget this.

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  • Don’t be at the wrong end of the long tail

    Don’t be at the wrong end of the long tail

    One of the most important characteristics of the technology industry is  you have to be first or second in your market to guarantee profitability.

    As more of the world become digitized this is becoming true in other sectors, as Tomi Ahonen’s survey of the app industry shows. This also demolishes the long tail theory of online economics.

    The long tail idea was put out by writer Chris Anderson during the first dot com boom.

    Anderson’s view was the long tail of older material would be a useful income source for creatives and businesses. For many, small payments on a ‘long tail’ of older work would add up to reasonable revenues.

    I’ve always skeptical of that view as the internet tends reward the ‘one percenters’ — a tiny number with the most traffic or revenue make the money while the bulk of players fight over the few crumbs that drop from the table.

    A sheer disaster industry

    A good example of how digital markets favour a tiny group of leaders  is in Tomi Ahonen’s survey of the 2014 mobile apps market that shows the vast majority of developers struggle for pennies.

    Ahonen pulls no punches, describing the apps industry as a “sheer disaster industry with only one sector making money” and goes on to describe just how dire the predicament is for most developers.

    The first point is where the money is being made; the first answer is by Google and Apple who skim five billion of the industry’s $21 billion in revenues. Just that stat alone shows where the real money is in the sector.

    Of the remaining $15 billion the top 1.3% of the industry — around 27,000 developers — take $11 billion, or 73% of the revenue and leave four billion to be shared among the other 98%.

    Slaves and huddled masses

    At the other end of the scale those who Ahonen calls the ‘slaves’ and the ‘huddled masses’ there’s only 400 million dollars to be shared around two million developers. Implying 87% of the industry barely make a few hundred dollars a year.

    On Ahonene’s figures two out of five developer make nothing.

    HUDDLED MASSES IN APPS ECONOMY 2013
    Revenues left . . . . . . . . . .  0 million dollars
    Bottom 39% developers . . 819,000 developers
    Bottom 39% earn . . . . . . .  0 million dollars
    Bottom 39% earn . . . . . . .  0% of all revenues
    Bottom 39% earn . . . . . . .  0% of developer revenues
    Average per dev . . . . . . . .  0 dollars
    In above numbers:
    Beggars failed to earn . . . . 400,000
    Hobbyists don’t care . . . . . 250,000
    Branded utility app devs . . 170,000
    Source: TomiAhonen Consulting analysis on Vision Mobile survey Aug 2014

    The Apps industry is a stark indicator of just how brutal the economics of digital distribution are. The long tail is real, it’s just that it describes a massive imbalance in income within markets.

    For all of us trying to make a dollar in the digital world, we need to find the niche where we fit into the profitable part of the curve.

    Being on the wrong end of the long tail is a recipe for poverty.

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  • Frenemies in the age of tectonic shifts

    Frenemies in the age of tectonic shifts

    “Apple lives in an ecosystem,” Steve Jobs told the 1997 MacWorld conference. “It helps other partners and it needs the help of other partners.”

    A few minutes later Jobs unveiled Apple’s deal with Microsoft, much to the disgust of many of the company’s true believers in the audience – something not helped by Bill Gates appearing on video midway through the presentation.

    “We have to let go of the idea that for Apple to win, Microsoft has to lose;” said Jobs after the booing died down.

    I was reminded of Jobs’ and Gates’ deal when talking to Pat Gelsinger, the CEO of virtualisation software company VM Ware at their annual VM World conference in San Francisco this week.

    Gelsinger was discussing the myriad deals VM Ware has made with companies that are their superficially their rivals as markets radically change. The company has even gone as far to embrace the open source Open Stack that was originally set up as competition to VM Ware’s proprietary technology.

    “The idea of frenemies – or co-competition – isn’t new to the IT industry.” Said Gelsinger, “as we are in this period that we’ve called the tectonic shifts that are underway.”

    “All of us need to be somewhat careful about who’s our friends and who’s our enemies as we go through that period and be as nice as we can to everybody because who’s our friends and who’s our enemies in six months or twelve months could change a whole lot.”

    That lesson has been harsh in the IT industry as various unstoppable businesses have found the market has shifted rapidly against them. A process that’s accelerating as cloud computing changes the software industry.

    “I always quip that ten years ago or fifteen years ago Sun would have been buying Oracle. Those shifts can occur quite rapidly,” Gelsinger says.

    VM Ware itself is on the brunt of one of those shifts as its core business of creating virtual services in company’s data centres is being disrupted by cloud computing companies like Amazon, Google and – ironically – Microsoft.

    Adapting to that changing market is the key task for Gelsinger and VM Ware’s management team, “our philosophy has been about doing the right thing that technology enables us to do.” Gesliner states, “do the right things for our customers and enable the ecosystem to join us on the journey.”

    For companies like VM Ware and Microsoft no-one predicted that one of their biggest threats would come from an online book retailer, yet Amazon Web Services has upended the entire software industry.

    The challenges for VM Ware today or Apple nearly two decades ago are being repeated in many other industries as competitors appear from unexpected directions, which is why it’s important not to ignore and sometimes co-operate with your competitors.

    We shouldn’t also ignore the other main reason why companies like Apple, Microsoft and, possibly, VM Ware have survived massive market shifts over time – a deep and loyal customer base.

    Understanding and responding to your customers’ needs is possibly the greatest management skill needed in every business today. Are you listening to what your market is telling you?

    Paul travelled to VM World in San Francisco as a guest of VM Ware

    Picture of Steve Jobs and Bill Gates via Joi Ito on Flickr

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