Category: future

Choices

In a time of change, hiding from the choices is not the best option.

“It’s too hard to keep up with all the choices. I can’t decide whether to use Facebook or Twitter, Microsoft or Google, Dell or Apple? Doing business today is just too complex…”

Maybe it’s true we have too many choices but yesterday’s business people had plenty of hard decisions to make.

Business people a hundred years ago had to choose between steam, gas or electrical power. If  they chose the latter, there was another decision between AC and DC electricity.

There was a further choice between keeping your horse drawn cart or buying one of those new fangled motor vehicles, which could either run on kerosine or steam.

So our great great grandparent’s weren’t easier and, unlike the relatively small investments we can make in technology today, their choices could easily bankrupt them if they made the wrong decision.

When we’re fretting over choices at least those on offer aren’t the simple alternative of whether we send our children down the mine or to the mill at the earliest possible age.

Instead of worrying about the choices, it’s time to get informed and understand what the alternatives mean. The time to worry is when our competitors, or the market, is leaving us behind because we didn’t care enough to find out what was happening around us.

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Binary thinking in a digital world

Thinking you have to use one tool at the expense of others or make a choice between being wholly online or ignoring the Internet totally is a false, dangerous choice.

In a time when the retail industry, like the music and newspaper industries before it, is going through major changes thanks to the Internet there’s a tendency to think in black and white – that you’re either online or you aren’t.

This is a mistake as the choice between going online or not isn’t a black and white issue, it’s a matter of degrees.

A good example of flawed thinking was the announcement that Just Jeans would close 50 stores and move to online selling. This idea ignores that Just Jeans’ management has little online retail experience they would be better to be using an online presence to compliment their existing strengths and drive traffic into their stores.

A bricks and mortar store still needs online presence, even if there’s no intention to sell online. A shop or café needs a website that at least tells customers who they are, what they sell, where they are and when they are open.

For many businesses, online is a new channel and opportunity that complements existing channels. The web, and particularly social media tools, offer an opportunity to connect to customers, build loyalty and spread the word about the business.

Even the online tools themselves suffer this where we have arguments about whether a business should use one social media tool like Twitter, Facebook or LinkedIn. The real answer is you should have a presence in all of them, even though most businesses will find one channel is more effective than others.

Similarly an online business needs a credible physical presence such as real call centres, phone numbers and office contact details. Indeed the lack of customer service is the Achilles Heel of many online retailers.

A lack of understanding that there is little real difference between the online and physical worlds is shared by many in the community; the idea that what someone does online is not related to their reputation or legal responsibilities in the real world persists despite it being constantly proved wrong.

In the online world the answer isn’t usually one choice or another, it’s a matter of how one channel will help you more than others.

Thinking you have to use one tool at the expense of others or make a choice between being wholly online or ignoring the Internet totally is a false, dangerous choice.

A more sensible way of dealing with the online world for established retailers, or any existing business is to experiment with what works for their customers and markets.

It may well be that shutting down physical stores and moving online is the solution for some, but for many others it will make more sense to use what the online world does well to build on existing advantages.

For the retail industry, salvation is probably going to lie in providing service. It’s those managers and business owners that see qualified, helpful staff as an asset rather than a cost who will thrive in the next decade.

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The web’s big weakness

How a hands-off customer model may doom many of today’s social media and web services

There’s a fundamental flaw in the way the tech industry does business, that weakness could be what ultimately kills many of today’s new media, web and social media services.

AirBnB, an online home share service, is one of the darlings of the booming Silicon Valley start up sector, having recently being valued at $1.2 billion after a successful capital raising.

Like most Web 2.0 and social media businesses, AirBnB’s advantage is in the low operating costs where customer support is left to the service’s peer review and social media communities while AirBnB pockets a commission for simply making the connection between the landlord and tenant.

The flaws in this “all care, no responsibility” model became apparent last month when a lady posted a description of her house being ransacked by an errant housesitter she found through AirBnB.

AirBnB’s management responded to the article with assurances they were helping and working with their affected customer, claims which were promptly contradicted by the original victim.

To make matters worse, certain prominent members of the Silicon Valley investment and blogging communities alluded she was lying or was “batshit crazy.” Now that other stories of bad AirBnB tenants are appearing, the view this is simply the untrustworthy word of a deranged customer affected by their first such incident is looking hollow.

Failing to deal with customer problems is not unique to AirBnB, hiding behind impenetrable layers of “support” backed up by user hostile terms and conditions is familiar to anyone who has had to deal with an online service gone wrong.

Last month Thomas Monopoly found he was locked out of his Google account and had it not been for the intervention of a senior Google employee, Thomas’ problem would probably still be stuck in an endless feedback loop.

Exactly the same problem has been encountered thousands of times by other users of web mail, social media, online auction and matchmaking sites.

Many of the people running these services retort their products are free so users get the support the support they pay for – an argument conveniently overlooking that most “free” web services are based around selling customer data – but even this does not justify delivering the basic services users have been lead to expect, regardless of what a 5,000 word user agreement states.

Today’s tech startups, and many of their big established cousins in the IT industry, have the idea that customer support is an optional extra and an expense to minimised or outsourced.

In this respect they are not too far removed from dinosaur car manufacturers or some of today’s less dynamic retailers offering little in the way of customer service or after sales support.

That way of working has died as consumers have been able to go online to vent their dissatisfaction, strangely today’s hot tech start ups seem to have missed this aspect of the revolution they have helped start.

Ignoring consumer problems is exactly what’s bringing traditional businesses unstuck in the online world. The funny thing is it might bring many of the online business undone as well.

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Reinventing webinars

How do we re-interpret webinars to deliver better results for presenters and audiences?

I’m currently preparing a Smart Company webinar on local search for business. Like most other presenters I prepare for a webinar by putting together a presentation on Keynote or Powerpoint and talk over it while the audience watch and listen over the web.

That’s pretty typical of most webinars, but I can’t help but think we’re doing this the wrong way by falling into the trap of appliying old techniques to new technologies.

In most industries we fall for this problem; when the motor car came along, our forefathers applied the ways of horse and carts to the new technology, going as far as calling them “horseless carriages”.

The movie industry is probably the best example of this. When movies first appeared, producers and writers applied theatrical techniques and it took a decade or so for them to figure out how to work best with the new media, then they had to relearn for talkies, followed by the arrival of TV and now the industry is adapting to Internet streaming.

In many ways we’re still in the “silent movie” phase of online presentations; we’re learning through trial and error what techniques work while inventing new tricks that take advantage of a personal screen.

So that gives rise to the question, how do we adapt our presentations that are designed for being presented to a room full of people to a more intimate online medium?

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Building Innovative Cities

How do we create the communities of the future?

The New Lunatick’s Newcastle as a Smart and Innovative City forum raised an interesting question; “how do you build an innovative city?”

In putting together the Digital Sydney project, this was something we closely looked at – how does a city become a global hub of innovation in the creative, digital, financial industries?

What leaps out when studying successful industry hubs is that all have developed without government intervention; most have been an accident of history where resources have come together and have driven by a small group of like minded entrepreneurs.

Those entrepreneurs have been attracted to various regions by the area’s proximity to the natural resources, transport links and available land suited to their industry. While those requirements vary between industries, access to a skilled workforce is the common factor between all of them.

In many respects this is how the current mining boom has worked for Newcastle. Unlike the rest of Australia’s mineral fields, the Hunter Valley has a major city with a skilled workforce that understands mining and engineering.

The challenge for Newcastle – and indeed for Australia as a nation – is diversifying the economy from depending upon resource exports and domestic consumption into creating wealth from the newer, knowledge based industries.

For hubs to develop in these industries, regions need the factors identified by Richard Florida in his Rise of the Creative Classes where he found these cities offered the “three T’s” – Talent, tolerance and technology.

Australian cities like Newcastle score well on these measures but to create hubs you need a motivated group of entrepreneurs and while these exist there may not be the numbers to create a critical mass.

The main reason for this is the domestic investment structure; most Australians invest in housing and aren’t particularly inclined to invest in comparatively risky businesses, particularly those in industries they don’t understand.

Governments can help by opening their data and making procurement friendly to new and smaller businesses – on both scores Australian governments at both levels do poorly with data often being unnecessarily guarded and tendering processes tend to be skewed towards large, usually multinational, corporations.

Assistance programs can also help on the fringes however it’s important not to repeat the mistakes of the film industry where several decades of government grants and funding has resulted in a generation of film makers more skilled at navigating bureaucracies and filling in application forms than telling stories.

Where government assistance can do a good job is in bringing together the various industry groups which was the intention of Digital Sydney. Well targeted, low paperwork schemes like the Australian Technology Showcase and various trade programs can also help growing businesses.

Overall though, the development of innovative cities lies in the hands of the residents, it’s up to the inhabitants of the city, town or region to bring build the hub.

This is exactly what happened with the original Lunaticks society in 18th Century England that created the region that became known as Birmingham which was the heartland of the English economic powerhouse for over a hundred years.

While we can wait for governments or investors, building industries is about innovators, entrepreneurs and workers. It’s time to get to work.

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Is there a need for digital literacy?

Are we teaching the wrong computer skills?

In preparing for tonight’s ABC Nightlife segment I was re-reading the Australian government’s National Digital Economy Strategy when I twigged what was bugging me in the first few pages; the talk of “digital literacy“.

As part of the plan, the Federal government intends to setup “digital hubs” in the each of the 40 communities that will first benefit from the NBN, these will “assist local residents to better understand how they can benefit from the NBN and to improve their digital literacy skills”.

The whole concept of digital literacy is worrying; it assumes there is something unique about using technology and that the concepts to use web services and devices are arcane and difficult to grasp.

Such a belief might have been true in the days of the command line interface where obscure commands and strange keystroke combinations controlled how you used a computer, but in the age of the touchscreen and intuitive systems the majority of people, regardless of age, can pick up the basic concepts with a few minute’s instructions.

A bigger issue is genuine literacy and numerical skills. Without these, we’re not able to understand or properly evaluate the data that is being presented to us.

Even more important are critical skills, the volume of information on the net demands we have the ability to filter fact from opinion and truth from misinformation if we don’t possess these talents we’re condemned to being unable to filter the gems from the dross that masquerades as fact on the net.

Clifford Stoll said “data is not information, information is not knowledge, knowledge is not understanding, understanding is not wisdom”. Without basic literacy we’re unable to process the data we see on the net, without the critical skills we cannot understand that information.

That’s the real challenge the connected society presents, how do we develop and nurture the critical skills that lets us identify the scammer, the knave and the ill-informed – all of whom thrive in an environment that gives their views equal weight with the wise, honest and knowledgeable.

Probably the best thing we can do for our children, and ourselves, is to work on developing those skills.

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Building business communities

Setting up next door to your competitor could be a good idea

Last night the NSW Government launched Digital Sydney, an initiative to bring together the various groups that make up the digital media and IT industries while raising the city’s profile as a global digital centre.

This project was something close to me as I’d been involved in developing the concept through 2009 when working with the then NSW department of Industry and Investment.

Originally the idea had been to create a digital hub around the Australian Technology Park to the south of the city. Over the decade of its operation, the ATP had attracted some high profile tenants and various high tech business start ups but there was a feeling it could be a more dynamic centre of the Sydney tech sector.

Digital hub failures

The setting up of “digital hubs” around the world has not been a great success – in Ireland an attempt to set one up in central Dublin’s disused Guinness brewery cost the European Union well over 100 million euro and subsequently collapsed amid acrimony between the various governments and businesses involved.

Even if there was a track record of success it’s unlikely any Australian government, state or Federal, would be prepared to spend money on the European scale. So the idea of building a “hub” had to be kept within industry, particularly the IT and digital media sectors.

Existing industry hubs

In talking to the industry, it became apparent that Sydney already a digital hub spreading across the suburbs immediately to the south and west of the city centre and centred around Surry Hills with an vibrant community of developers, designers and entrepreneurs occupying the old factories and warehouses being vacated by the city’s rag trade.

The proximity of competitors, clients and suppliers was why the hub had developed; exactly the reason why the fashion industry had previously concentrated around that district.

This is consistent with history; the great industrial hubs such as the English midlands of the 18th Century, the US mid west of the 19th Century along with today’s Chinese coastal manufacturing centres and event Silicon Valley happened with little government forethought.

Like-minded businesses clustered together because they could find the essential resources for their industry such as raw materials, labour, transport, markets and capital.

A shortage of capital

The access to capital is a problem for all smaller and innovative businesses in Australia, not just those trying to build digital businesses or hubs. Start up enterprises have been starved for capital and a few late stage Venture Capital investments like the recent ones in Atlassian or 99Designs are not on their own enough to build vibrant businesses of the future.

In Australia, it’s difficult to see any government in the near future changing the tax and legal regimes which favour property and stock market speculation over investment in new businesses and technology so the best hope is initiatives like Digital Sydney, along with the profiles of similar industry hubs in Brisbane and Melbourne, can encourage investors to look at the start up and innovation sectors.

Why big cities?

The real question is though is why is this just the major cities? Why can’t we have hubs in Renmark, Esperance or Hobart?

Access to skills and talent are the driving forces behind the local hubs and in that respect some smaller towns and regions do have the skilled workforces and businesses capable of building industrial centres and we’ve seen some regional hubs develop like the wine industry in various places.

So it’s worthwhile considering where your business is located, maybe it would be better to set up next door to your competitor? For many organisations, being part of vibrant industry hub is part of their success.

postscript;

Joe Kelly, former Commercial Director of the Dublin Digital Hub Development Agency, takes me to task on the claim the Dublin Hub collapsed. His comment is as follows:

As the former Director of Commercial Operations at The Digital Hub Development Agency, I felt compelled to correct you on your assertion that the Digital Hub in Dublin collapsed. That is incorrect. Media Lab Europe, an entirely seperate entity collapsed at a cost of over 100 million euro. The Digital Hub continues to thrive with over 100 companies located there. Please refer to www.thedigitalhub.com for further information.

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