Decoding the new economy

The new accountability

What business can learn from the Australian election

The distrust and disengagement of voters in last weekend’s election holds valuable lessons for business.

As the politicians have found, the days of empty slogans are over. If you say “people are your most important asset”, “service with a smile” or “no question refunds” then you have to be sure you value those smiling employees as they cheerfully refund money. Otherwise your disgruntled staff and customers will be letting the world know the truth quickly.

We’re in an era of accountability. The connected society means all of us — in our professional, political and personal lives are more accountable than we have been for several generations. This is even more true of our businesses.

A good example of this is restaurants; where twenty years ago few eating places were reviewed by newspapers or magazines while most scored a paragraph in an annual guide, which could have been up to two years out of date by the time it was in the bookstores.

Today dozens of rating sites give customers the opportunity to report their experiences and customers are reading those reviews before they choose where to dine.

The same process is happening in all industries, your business is being reviewed and discussed online in forums, blogs and various social media channels. You have to deliver on your promises and you will be caught out if you don’t.

For society, the Internet and the new communications tools that run on it are changing how we deal with our peers, customers, employers and staff. We have more power and we have more responsibility.

It’s interesting this point was missed by the political parties that ran campaigns that relied almost exclusively on TV, radio and print. Although it isn’t surprising seeing that both parties’ 2010 campaigns seem to operate in a 1960s time warp where cheap fuel, plentiful credit and unlimited mineral exports were the nation’s boundless future.

This sort of complacency is understandable when you have a duopoly. As we know in the business world, a comfortable duopoly breeds cosy, risk adverse managers who spend more time squabbling over who should have the keys to the executive toilets than worrying about minor things like staff, new products or customer satisfaction.

Which is what’s happened to our political parties; winning the privileges of power is all that matters to the factional warlords and their supporting ranks of scheming apparatchiks; just like second rate managers in a cosy, protected industry.

The underlying beliefs of the major parties — free enterprise, a strong regional Australia or a fair go for the Australian worker have all became empty slogans and their markets, the voters, are now holding them to account.

In many ways the three or four independents who will hold the balance of power are like upstart business that disrupt cosy markets, they are reminding the incumbents of the business they have chosen to be in.

That’s the biggest business lesson from last weekend’s election; that in the new global economy the barriers to entry have fallen and new businesses are waiting to grab the customers you’re neglecting. Markets are moving quicker than ever and you need the tools and the teams to take advantage of the opportunities.

Unlike the political world, today’s business environment has no place for the safe, comfortable incumbent. It’s a great time to be a genuinely smart company.

The downside of social media marketing

Social media is a great business marketing tool, but it has downsides as a Sydney jeweller learned

Until last Sunday, Facebook was working well for jeweller Victoria Buckley; the page for her store in Sydney’s upmarket Strand Arcade was generating sales and had a rapidly growing fan base from around the world.

One of the key parts of her marketing campaigns are porcelain dolls made by the Canadian designer Marina Bychkova. Her classic doll Ophelia features in the window displays, on posters in the store and on the shop’s Facebook page.

Ophelia is a little bit different to most dolls in that she’s naked and anatomically correct — she has nipples.

Last weekend Victoria received six warnings from Facebook about “inappropriate content” on her page. There was no indication of which images or text broke the rules or what would happen to her page if she took no action.

“The frustrating thing is I can’t pinpoint which images” says Victoria, who goes on to point out that over the year she’s used Ophelia in her marketing, including two large banners in the busy shopping precinct, she’s received no complaints.

“It’s all a bit arbitrary”, says Victoria “it only takes one anonymous person to click on the flag content button and there’s a problem”. Earlier this year her Flickr account was set to restricted because of Ophelia’s nudity.

To avoid problems, Victoria has blacked out any potentially inappropriate parts of Ophelia on the store’s Facebook profile and started a “Save Ophelia- exquisite doll censored by Facebook” group until she can resolve the issue.

But here lies another problem; she can’t find a way to contact Facebook. “It’s become an increasingly important part of the business” Victoria says of the Facebook page and “I just don’t know what’s going to happen to the site”.

Right now Victoria has no idea what is going to happen to her business’s profile. As she can’t talk to Facebook, she’s uncertain of the page’s future.

This uncertainty illustrates an overlooked issue with social media sites. All these services are proprietary, run by private organizations to their own rules and business objectives.

In many ways, they are like private mall owners. They are perfectly entitled to dictate what merchants and customers can do on their premises. If you don’t like it, you have no recourse but to take your business elsewhere.

As consequence these sites have a great deal of control over your online business, a lesson that’s been hard learned by many eBay and PayPal dependent Internet retailers.

A good example of what can go wrong are the Geocities websites. Ten years ago Geocities was a popular free hosting site used by many micro businesses and hobbyists. Just over a year ago the now parent company Yahoo! shut them down and all the data on them has been lost.

By relying another company’s Internet platform, you are effectively making them a partner in your business. That’s great while things go well, but you have to remember their business objectives and moral values are different to yours.

This is why a business website is essential; your traffic and all your intellectual property is too important to sit on another businesses’ website with all the risks that go along with that.

The lesson is that while using Facebook, Twitter and other Internet services are an important part of the business marketing mix, your business needs the security of its own website and all your marketing channels, both online and offline, should point to it.

Fortunately Victoria’s across that, she’s pointing her Facebook fans to her website telling them, “You can join my independent mailing list at this link, in case they get really stupid and close this group.”

X Media Lab: Global Media Ideas

How are the creative and media industries adapting to a changing world?

As part of the Vivid Festival, X Media Lab returned to Sydney in June 2010 to look at how the creative and media industries are adapting to a changing world where societies very different to the existing dominant cultures are rising and asserting their place in the global economy.

X Media Lab’s Global Media Ideas conference day was billed as exploring “cultural and commercial content in a global world; creative ideas and innovation in media and technology; international media business opportunities; new media and new geographies; and new platforms, applications, and content.” It didn’t disappoint.

The great thing about X Media Labs is how it brings disparate ideas together and exposes the audience to worldwide trends and developments. The June 2010 Sydney X Media Lab was no exception with a great range of diverse speakers. Here’s a brief rundown of their themes, more comprehensive coverage can be found at Brad Howarth’s Lagrange Point blog;

Ralph Simon
Dubbed “the father of the ring tone”, Ralph Simon took us on a tour of innovation that started with the Sex Pistols, through applications like Red Lazer and sites like TuneWiki, which uses crowdsourcing to translate music lyrics, to end with mHealth applications where diabetic children use their mobile phone games to test their blood sugar levels. A broad and exciting view of where the mobile Internet and gaming platforms are going.

Dana Al Salem
The founder of Fanshake, Dana showed us how her site is used to connect bands with their fans. Her view is that today’s Gen Ys are just like their hippy grandparents except today’s groovers are wealthier have more technology. An interesting take on “the more things change, the more they stay the same“.

Gotham Chopra
Gotham described his journey of setting up superhero cartoons for young Indians and intertwined it with a story of his travels through Pakistan as a journalist. His hope is to replace the influence people like Osama Bin Laden have on the youth of South Asia with more positive role models.

Parmesh Shahani
The divide between the richer cities and poorer rural areas in developing nations is often just characterised as a migration story as millions of poor agricultural workers migrate to the cities. Parmesh gave us a broader perspective on what is happening in India including some fascinating case studies of how comparatively older technologies such as satellite TV and SMS mobile messaging are changing rural India.

Joy Mountford
Among the geeks and developers, Joy was probably the most anticipated of the speakers having being a designer with Apple and vice president of design innovation at Yahoo! Joy showed us how designers are moving from the “look” of computer programs to “feel”. She also showed us how crowdsourcing has worked for other projects including the fantastic Johnny Cash Project which reworks his Ain’t No Grave into a group video.

Wayne Borg
The Chief Operating Officer of twofour54, a content creation hub in Abu Dhabi, Wayne took us through the opportunities of 340 million Arabic Speakers covering diverse cultures and where 200 million are under the age of 25. His presentation showed us much of the development plans of the United Arab Emirates and how the kingdoms are seeking to be the Arab world’s creative centre.

Nick Yang
The entrepreneur label is often too easily given away, but no-one could begrudge Nick Yang, founder of KongZhong, ChinaRen.com and Wukong.com for using the title. Nick walked us through his journey of being a young student of Stanford, his return to China and both his and China’s growth over the last decade. He also showed us how his latest venture, Wukong.com, aims to change how search engines work.

Rob Mason and Scott Halcom
Local flavour was provided by Rob Manson from Sydney’s MOB Innovation Lab and Scott Halcomb from from SystemK in Japan, who walked us through the worlds of augmented reality. Rob concluded their joint presentation with the view that object recognition is going to change the way we see the world.

Haidong Pan
Like Nick Yang, Haidong is the founder of a Chinese Internet service, this time Hudong.com which is a “knowledge media” run along the lines of wikipedia that acts as a news and fact service. His presentation on how social knowledge changes the world was thought provoking in how societies are reclaiming their culture and history back from mass media.

Anand Giridharadas
Technology Columnist with The New York Times and International Herald Tribune, Anand challenged us to think about the ethics of the digital world and how foreign cultures are now beginning to colonise the dominant anglo-US culture. Personally I struggled with some of Ananda points as our online ethics should be no different to our off line standards and the US domination of global media stems from it being the richest nation, as other countries catch up with US living standards their cultures will reassert themselves.

John Penny
Like Anand, John forced the audience to think; he invited us to consider the problem of the television producer where audience fragmentation has meant we’re approaching the point where the only profitable TV productions will be reality shows and advertorials. John as an Executive Vice President of Starz Entertainment was well placed to walk us through this dilemma. John finished with a call to consider how dis-intermediation will help rebuild the fortunes of those who want to provide well written screen productions.

Amin Zoufonoun
As corporate development manager at Google, Amin was probably almost as highly anticipated as Joy Mountford had been earlier. Unfortunately his speech on the development of technologies from the Internet’s “Big Bang” fell flat, largely because the audience know this topic. The talk probably would have worked better with an audience of financiers or CEOs who don’t live this topic the way the X Media Lab audience do.

Robert Tercek
To finish a long, stimulating and challenging day Robert Tercek walked us through why great minds like Lord Kelvin, Edison and Einstein had missed emerging technologies in their times and how we can avoid it. Robert sees great opportunities for innovators as successful, large companies entering new markets don’t know more than anyone else and in many cases are blind to the potential of these sectors.

Overall, X Media Labs was another stimulating and fascinating day. The entrepreneurs and artists who had the opportunity to be mentored over the next two days by the speakers were very lucky to be exposed to this sort of talent.

The key message from this X Media Labs came from Parmesh Shahani when he said “don’t just look at India as a market, look at it as a source of innovation and inspiration”. We shouldn’t be just looking for the obvious, easy markets but watching the bigger trends that are developing around us.

The elephant in the room; why online publishing is very sick

Depending on cheap or free labour is a doomed business model and this is a problem for online publishers

Media 140’s Sydney meetup last week attempted to discuss the future of journalism. While it wasn’t really successful, it did expose the fundamental flaw in the online publishing model and the other crowdsourcing business ideas that rely on cheap or free labour.

All three panellists agreed that as publishers “The sustainability of our business is very much linked to the quality of content.” because with several million online voices a site needs compelling and relevant content to attract and retain readers.

Yet every panel participant agreed the cost of content is falling and in many cases is now free.

There lies the paradox; if content is so valuable, why is it so cheap or even worthless?

The model for online publishers is the same as it was in the days of every city having three evening newspapers or when the six o’clock TV news was the most watched show on television. Compelling content attracted readers and viewers which in turned attracted eager advertisers.

In the days of metro evening newspapers and the six o’clock news there were substantial barriers to competition with printing presses, broadcast licenses and distribution networks required. Today anyone who can afford $10 a month for website hosting can be a publisher.

Worse, the rates for online advertising are plummeting and with the site owners only making a few dollars there’s little for publishers, let alone the content creators.

Which brings us back to the fundamental problem, if there isn’t any money for those who create the content then there’s little point in the middle men distributing it.

Many of today’s online publishers are like the loom weavers of the early 18th Century who derived a short term benefit from the change that eventually destroyed them. The same forces that make journalists work for nothing are the same ones that will render the bulk of publishers insolvent.

And that could be where the future of journalism, writing and publishing really lies — the bulk of the industry eking out an existance providing commoditised, generic pap and a few niche publications with readerships that attract good incomes that in turn can pay a small number of writers.

That’s certainly the model the panel at Media 140 are betting on and I hope they all do well.

The Future of Journalism

Many occupations are faced with free or cheap labour swamping their marketplace. Journalism is one of those trades. Media140 met in Sydney to discuss exactly where the future of journalism lies.

Last week’s Media 140 meeting in Sydney looked at the future of journalism and how publishers are paying, or rather not paying, contributors to their online publications.

The evening was well documented by Martin Cahill and the message was clear — publishers are not going to pay for content because even if they want to they can’t afford it.

The prevailing view was journalists will have to learn how to multi task; but given YouTube is even more poorly rewarded than online journalism, it’s unlikely sites will be any more generous to video or audio contributions than they are to text contributors. Which only suggests a future of journalists doing more work for no money.

Valerio Veo, Head of SBS News and Current Affairs Online pointed out SBS is paying a 19 year a $1000 per contribution for covering Obama’s visit to Indonesia.

Ignoring this is pocket money in terms of sending a camera crew and traditional reporter, the fact SBS are one of the few Australian organisations paying online contributors suggests ABC Managing Director, Mark Scott’s, view at a previous Media140 that only government supported organisations will be able to afford to pay journalists is part of the future is correct.

So what is the future of professional journalism? Will it be restricted to a few subsidised outlets? Is it the gifted amateur contributing for their love of the masthead? Or is it that of the professional pushing their own or their employer’s agenda?

Maybe journalists will become editors cleaning up the shoddy contributions of not so gifted writers that have the only benefit of being free. Could it be that curating other people’s content will be the role of future journalists?

Or perhaps journalists are the new poets, starving in garrets and working in desperate jobs while waiting for the phone call from the ABC, BBC or PBS, penning great works that will lie undiscovered on obscure blogs which will only be found after their passing?

We didn’t really glimpse the answers at Media140 and this is an important discussion to have as the rise of the digital sharecropper isn’t confined to journalism.

Many professional and white collar occupations are going the same way and we need to understand what this means for large parts of our economy. Even if we choose not to discuss it, it’s the reality we face.

The company you keep

What you do on the Internet has real ramifications for your reputation. Take care with the people you meet and the groups you join online.

It’s an old but true saying that you’re judged by the company you keep and this applies online as much anywhere else in personal and professional life. Last week I was reminded of this three times.

Early in the week I was asked if connecting with someone on LinkedIn was an endorsement. I thought that was an odd question as LinkedIn has a separate function for recommendations and so I didn’t pay it much attention.

A few days later an industry group leader told me she’d assumed an individual was legitimate because I was a member of their LinkedIn group. While it was a compliment to think my opinion meant that much, it worried me as I didn’t really know the group’s founder and I certainly wasn’t endorsing his business.

Finally, at the Media140 Conference in Perth last Thursday, employment branding specialist Jared Woods gave an interesting overview of how an Engineering firm deals with social media issues in the workplace.

Jared described the company’s basic rule was if you state that you work for the organisation then you have to act professionally and in a way that doesn’t discredit yourself or the company. Which means no more drunken photos posted on Facebook or joining bad taste causes and online groups. By all means post silly pictures, but forget mentioning who you work for.

The killer line from Jared was social media gaffes can not only damage a business but they can also damage employee’s professional reputations. Just as the employee is part of the brand, staff have their own personal brands.

This isn’t new, there’s dozens of true stories of how people have lost jobs through inappropriate blog or Facebook postings and ten years ago the infamous Claire Swire incident nearly cost a group of young London lawyers their jobs .

All of these examples show just how important it is take care with everything you do online. You are not anonymous and most things you say and do on the Internet will be stored somewhere.

So play nice and remember not to post anything you wouldn’t like to see next to your name on the six o’clock news.

The value of communities

Businesses are just as much a part of the community as individuals. Cherishing and growing your businesses community of friends and supporter can reap big dividends.

Sydney’s Growthtown evenings are an irregular gathering of entrepreneurs discussing challenges facing fast growth businesses, and always a stimulating night with founders telling how they dealt with issues as diverse as setting up US operations, finding investors and exiting a successful venture.

Last week’s event featured Marketing Angels’ Michelle Gamble explaining how she uses the brand pyramid to help her clients and Kylie Little, founder of Essential Baby, describing the journey from a business idea to exiting from a big business buy out.

Kylie’s story of Essential Baby’s early days resonates with anyone who has started a business after the arrival of a baby. It’s always a relief to find you’re not the only one who thought it’s possible to run a business while your blissful cherub sleeps contently for most of the day.

In many ways, Essential Baby’s story describes the dream exit for many entrepreneurs, or at least most venture capital funders, with the website being bought out by Fairfax.

Interestingly, Kylie’s tale about what happened after a big organisation bought her business has some similarities to Lars Rassumussen’s experience of Where 2 Technologies’ absorption into Google.

The cultural shock of moving from an independent start-up to being part of a bigger organisation is huge and the problems can’t be underestimated. So there’s a lesson on being careful what you wish for.

One part that shone through both Kylie and Michelle’s presentations was how important communities are to a business. It’s often easy to think businesses are stand-alone entities, proudly independent of the world around them.

In reality every successful businesses relies on groups of supporters, be they customers, suppliers, financiers or just simply fans. Businesses need communities just as the community needs them.

Communities aren’t just generated by Twitter followers, witty blog entries or clever search engine optimisation, it takes credibility, honesty and doing the right thing by those around you.

So who are your communities and what are you putting into them? You may find those groups are your business’s most important assets.

Category: new media

The new accountability

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