Paul Wallbank – Brilliant Communications

Category: business advice

Deep mining business data
This post originally appeared as Mining Business Data: Get ready to drill and excavate, the June 28, 2012 post on Smartcompany.

The IT industry loves buzzwords and the phrase coming into fashion is “big data”. Forget “social media” or “cloud computing”, much of what you’ll be reading about in columns like this over the next few years will be about mining the information piling into our businesses.

Big data’s power is illustrated in yesterday’s report that Mac users will pay more for hotels than those on Windows systems. So travel site Orbitz now plans to headline more expensive options to visitors using Apple computers.

While social media and cloud computing are falling out of favour, we shouldn’t discount those old-fashioned terms as they are two of the main drivers of big data. Cloud computing makes it possible to crunch data cheaply, while social media is generating even more data for people to play with.

Sydney business Roamz is a good illustration of how social media, cloud computing and big data come together. Born out of founder Jonathan Barouch’s desire to find local activities for his young child, Roamz pulls together data from Facebook, Twitter and Foursquare to build a picture of what’s interesting in your neighbourhood.

It’s no coincidence direct marketing giant Salmat has invested in Roamz, as the data being gathered allows companies to paint a comprehensive picture of what their customers like.

Another business making sense of big data is Kaggle, set up by former Reserve Bank economist Anthony Goldbloom. Kaggle is a crowdsourcing service which runs data analysis competitions on business problems through to things like HIV research, chess ratings and dark matter exploration.

Like most things in the computing industry, these services were only available to those who could afford supercomputers a few years ago, today they’re available to anyone with a credit card and internet connection.

The era of big data might help us overcome Pareto’s Principle – otherwise known as the 80/20 rule – that 80% of your profits come from 20% of your customers. We can also be sure that 80% of our problems come from a different 20% of clients.

Having the ability to crunch numbers quickly means we can identify the good payers and problem customers before we do work for them. It might also mean we beat another business truism by finally being able to identify the 50% of our advertising budget that is being wasted.

Even if you don’t think your business is ready to dive into the world of big data, it’s worthwhile at least having a look at your website analytics to see what your customers are looking at.

Who knows? Like Orbitz, you might identify those cashed up Mac users who love spending money.

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June 30, 2012
Refocusing on Asia
One of the interesting things about Australian society and business in the last twenty years is how the nation seems to have turned away from Asia.

In the 1980s and early 90s, the country was focused on exporting services and building long term relationships in sectors ranging from Malaysian construction, Thai diary farming and legal services in China.

Twenty years later, Australian businesses and government seem to have given up with the consensus among industry and political leaders now being that all the nation can export is raw minerals, bulk agricultural goods with a sprinkling of third rate educational services.

Globally focused Australian businesses – particularly those in the startup sector – look to Silicon Valley for funding, inspiration and markets. Only a minority are looking North to Asia rather than across the Pacific.

ViDM – Ventures in Digital Media – is one of those businesses and CEO Willie Pang of the Sydney based advertising technology startup believes the time is to seize opportunities in growing Asian markets rather than concentrating on Silicon Valley financing and exits.

“Focus on building a great business. If you have a great business someone will buy you,” says Willie.

The opportunity ViDM sees is in advertising trading platforms bringing together publishers and advertisers across the digital, print and broadcasting channels. Willie expects this market to be worth eight billion dollars across Asia within five years.

Many of those opportunities in the Asian market are in business-to-business markets such as advertising platforms which is another difference to the largely consumer focused Silicon Valley model.

For Australian business, Willie doesn’t see funding as being an issue with money being available for smaller startups and mature companies.

Like in Silicon Valley the real problem lies for business in the middle stages of their development where they are too big for angels and smaller funds but not interesting for the bigger investors. That grey zone lies between two and ten million dollars.

For the companies that do raise the funds and go hunting in Asian markets, the rewards can be great. Not only do this economies have great growth rates, the diversities of Asian countries mean there are different opportunities lying in each nation or even provinces.

Right now, US businesses are focussed domestically or just on a narrow range of opportunities catering to affluent Chinese consumers in Beijing, Shanghai and Guangzhou.

Willie sees that as another opportunity, while US and European companies are distracted it’s a good time to be entering the Asian markets. But that window of opportunity won’t last forever.

“We’ll either play in that space or the Americans will do it” says Willie.

The opportunity is open to us. Will we grab it?

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June 28, 2012
Connecting the data dots
One of the connected world’s weaknesses is its fragmented as various silos of data appear in the different social and cloud services.

Bringing those sources together in a way that’s useful and relevant is one big opportunity for entrepreneurs.

Sydney company Roamz is one of the businesses looking at this opportunity by bringing together a user’s Facebook, Twitter and Foursquare feeds to figure what interesting stuff is happening locally.

Roamz’s CEO and founder Jonathan Barouch has a vision to “cut out the noise” from social media services by “curating and cleaning the data”.

The idea of curation isn’t new in the online world, this is probably one of the biggest challenges for everyone on the web as we find ourselves swamped with data. To date, much of the idea of ‘curation’ has been around news sources where services like Google News try to deliver relevant current affairs to the user’s desktop.

Social media sites are particularly in need of curation, particularly given your friends in Nevada are much help when you’re looking for a good coffee shop in Melbourne.

This is the problem Roamz seeks to solve and we’re seeing this with various other services, not least the social media platforms themselves as Facebook tries to extend its reach and Google attempts to integrate their local services with the Zagat restaurant review system and Google+.

Some would dismiss these services as “first world problems”, after all who cares about twittering hipsters trying to find a single origin, fair trade soy latte in Broadmeadows?

There’s a point in that view, although there is a much bigger problem for businesses in this fragmented data world in harnessing and validating various sources of market intelligence.

For businesses that get this right, they’ll be able to target advertising and marketing much more effectively while being able being able to tap into what their customers think and want.

It’s no accident therefore that one of Roamz’s major investors is consumer communications giant Salmat, who can deliver great value to their corporate customers through supplying this data and market intelligence.

The next IT buzzphrase is “Big Data” where businesses deal with this flood of information that is swamping all of us, by being able to understand customers and their behaviour things become far more efficient and cost effective.

Bringing data together and making sense of the results is the big challenge of our times, those who can solve the problem will be among the next generation of business leaders.

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June 26, 2012
Australia – the Noah’s Ark of business
During a week of big business news, the buyout of another boutique brewery by a big corporation was barely noticed, but Lion Nathan’s takeover of the Little Creatures brewery illustrates the duopoly problem that is crippling Australian business.

A few days after that deal was announced, rumours that Business Spectator – which the above link takes you to – would be taken over by News Limited started circulating. These turned out to be true.

In both cases, existing duopoly players bought out small competitors, a process that’s been going on since Australia decided industry duopolies were necessary to protect the nation’s managerial classes, and these takeovers kill genuine innovation and stymie new thinking.

For those duopolies the definition of success is grabbing a few percent of market share off each other while using their market powers to screw down supplier costs.

A good of example of this is the retail duopoly, the farmers and producers get screwed while the supermarket chains engage in price wars driven by truly awful advertising campaigns.

Un-imaginative, un-original and plain un-inspiring. Any smart young kid wanting to get ahead in the retail industries knows they have to look overseas for job opportunities or inspiration.

Therein lies the real problem with Australia’s duopoly business culture – it triggers a brain drain as comfortable managements block any innovative new thinking as being too hard or just unnecessary.

In the media duopoly, telecoms analyst Paul Budde illustrated the problem in his account on trying to convince Fairfax of where the media industry was heading in a connected economy.

Fairfax’s management didn’t get it and didn’t care – today they still don’t get but they care deeply as their business model crumbles.

It’s not just future managers that are looking overseas for opportunity, the customers are well.

The duopoly model that evolved in Australia over the last thirty years depended upon the tyranny of distance to act as an effective trade wall. The Internet has demolished that wall for most industries.

Almost every Australian duopoly is living on borrowed time. If, like the proprietors of Business Spectator or Little Creatures, your business plan relies on selling out to a local duopolist then you’d better move quick.

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June 21, 2012
Delivering products
Once upon a time the local plumber got to work by bicycle, then he got a jalopy and now he shows up in a van or a hotted up ute. The plumber and his customers don’t care about the way his services are delivered.

A hundred years ago the retail industry was dominated by corner stores that customers could walk to, they received their deliveries by horse drawn carts and made deliveries on bicycles.

Then along came the motor car, which changed shopping habits and delivery methods.

Fifty years later the corner stores were a dying breed as they were replaced by supermarkets which customers could drive to and they took their deliveries by truck.

Today the retail industry is changing again, as the Internet changes shopping habits and society in ways similar to the motor car.

A similar pattern of change happened in the media sector; the evening paper died as commuters switched to cars and reading the Tribune on the tram or train home became less relevant.

Morning papers survived as people took deliveries to read over breakfast before driving to work.

At the same time radio and television became the dominant way most people got their news.

Even more the retail, the web has dramatically changed news distribution methods.

As the effects of Fairfax’s restructure sinks in, there are a group of people who don’t seem to want to accept reality – newsagents.

Mark Fletcher’s initial post about Fairfax’s restructure on his Australian Newsagency Blog attracted some harsh comments;

“Whilst the print media is arguably in decline I consider this post to be scare mongering……Fairfax will be here in print for years to come and to say or suggest that some days of the week will be or may be cut is pure conjecture at this point.”

” I am in semirural metropolitan Sydney. We have just added another 100 customers to our delivery run. Majority dont like reading their news online – old habits die hard. I hope that Fairfax dont abandon them. They like getting their newspapers in print.”

“Hi i will not pay to read online why it is all free, but will buy paper”

Focusing on print condemns those newsagents to the fate of the corner shop.

What is missed in the discussions about the future of the media is that medium is not message – people want relevant content delivered in the most convenient way.

This is true in every business. What we do is not really related to how we deliver the product, if we’re tied to one way of getting our services to a customer then we’re in trouble.

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June 19, 2012