Paul Wallbank – Brilliant Communications

Tag: business

  • The opaque Alphabet

    The opaque Alphabet

    Late last year Google announced it was restructuring and creating a new holding company called Alphabet, at the time I hoped it would bring more accountability into a business that’s becoming notable for easily distracted management and sprawling bureaucracy.

    Yesterday the company released its latest quarterly reports and it appears far from improving transparency, the restructure has resulted in the operation of ‘moonshots’ – termed ‘Other Bets’ in the reports – becoming even more shrouded in mystery.

    Other Bets, which includes Google Fiber, Ventures and Google X,  made a stonking $3.1 billion loss while 90% of revenues still comes from the advertising business.

    Even within the advertising arm there’s little transparency as the division includes Apps, Android and YouTube along with the lucrative Search and Ads business. There’s little information of how these divisions are travelling on their own.

    As Dennis Howlett at Diginomica points out, there will come a time when shareholders demand some accountability as the losses in the Other Bets are not trivial but it seems that time is some way off.

    For Google, the biggest risk is being disrupted themselves. Their ‘river of gold’ is not dissimilar to that the newspaper industry floated along prior to the web – and Google – arriving.

    Another aspect is that of culture where most parts of the business are free of accountability as the lucrative Ad division’s revenues allow disinterested management and needless bureaucracy to thrive.

    While Alphabet’s revenues are impressive, this is a company dangerously reliant on one line of business. History has not treated such ventures well.

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  • Reinvigorating Australia’s research sector

    Reinvigorating Australia’s research sector

    Could Australia’s poor track record in commercialising research be turned into an advantage? Data 61’s CEO Adrian Turner believes so.

    Australian research agency Data61 was formed last year following the science hostile Abbott government’s slashing of research budgets coupled with a merger of the National ICT Australia organisation (NICTA) with the long established CSIRO.

    The intention behind Data61 was to create a world leading data research agency. At the time of the announcement then communications minister and now Prime Minister, Malcolm Turnbull said, “Having a single national organisation will enable Data61 to produce focussed research that will deliver strong economic returns and ensure that Australia remains at the forefront of digital innovation.”

    Having been in the role for six month and now, in his words, having his feet finally under the desk, Data61’s CEO Adrian Turner met with the media last week to discuss the directions he intends to take the organisation.

    Business in a data rich world

    Coming from a corporate Research & Development background and having spent over a decade in Silicon Valley tech businesses, Turner is conscious how industries are being changed in a data rich world.

    For corporate R&D model shifting as industries are changing he says, “their challenge is they can’t hire the digital and data talent that they really need.” Turner sees one of the opportunities for Data61 in providing access to the high level expertise large companies are struggling to find.

    Giving Data61 is global focus is Turner’s main objective with an aim of capturing a tenth of one percent of the world’s private sector R&D budget, describing how he will sell the organisation’s scientific expertise to global corporations, “we can plug them into the Boeing and GMs of the world and introduce them to the people to short circuit the sales process.”

    “We’re going to go around the world where corporate R&D dollars get allocated and convince these companies that Australia is a place where primary R&D can take place,” Turner continued, “we’ve got the talent and we’ve got the capabilities to do the research.”

    Good at the basics

    Turner highligthts an ongoing problem in Australian science and industry. The nation historically has been good at basic research but poor at getting those developments to the marketplace, something the World Intellectual Property Organisation’s Global Innovation Report has regularly flagged.

    While Australia ranks at 17 overall in the 2015 WIPO report, the nation’s business community flounders at 38th in the world for its collaboration with researchers and 39th for knowledge and technology output. Put bluntly, Australian businesspeople are not very sophisticated or research orientated.

    Adrian Turner puts that down partly to the nation’s being weak at product management, “I think it’s a function of global companies seeing Australia as a sales and marketing outpost so we don’t have the product development expertise.”

    Inward looking locals

    The nation’s inward looking local corporations are also part of the problem, “for us to succeed as a country we have to have a global mindset. We can’t have the zero-sum mindset that I win if you lose in the domestic market,” Turner continued. “In that sense what we’re doing is creating a product marketing function.”

    So to meet Data61’s objectives of meeting its own financial performance targets, developing an R&D ecosystem and having an impact on the nation economy, Turner sees the organisation having to go overseas for most of its partnering with private sector researchers.

    Sparking the startups

    All is not lost though for Australia with Turner believing Data61 has a role in helping the local startup community develop. “We don’t have the infrastructure in place to support the entrepreneurs to go out and build new business,” he says.

    “In Silicon Valley over decades you have this infrastructure, you have this workforce, you’ve got the legal infrastructure, you’ve got capital, all of these things that have built up organically over decades and they stack the odds in favour of the entrepreneurs.”

    Data61 was born out of an unfortunate period of Australian politics where for the first time the nation was lead by a government that was genuinely hostile to science. Now the political winds have changed and the organisation has a global focus, it may be possible to reverse the long-term neglect of Australian research and build a new business culture.

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  • Redefining sports media

    Redefining sports media

    Over the last 50 years the relationship between professional sport and television broadcasters has been defined by broadcasting rights. Like most other media business models that relationship is now under threat.

    Touring the Australian Open tennis tournament this week, it was striking how the relationship between sports organisations and broadcasters has changed as the internet changes distribution models and data starts to become a valuable asset in itself.

    A tour of the data infrastructure behind the tournament as a guest of sponsor and service provider IBM showed how sporting organisations are hoping to use data to improve their fans’ experience and add value for sponsors and competitors.

    Last year the Australian Open collected 23 Terabytes of data, a 136 percent increase on 2014, which the organisers distribute on their MatchCenter web platform along with analysis through their Slamtracker system.

    Using IBMs Bluemix development platform and the company’s Watson artificial intelligence service, the Australian Open website analyses factors ranging from the audience’s social media sentiment through to predicting competitors’ performance based on historical data.

    This wealth of data gives the event organisers a great platform to engage with statistics hungry fans and it was notable when talking to the Australian Open staffers how they now see the television broadcasters as much as their competitors as their partners.

    When coupled with the changes to broadcasting rights – like most sports organisations the Australian Open has moved to the model pioneered by Major League Baseball of providing their own video feeds rather than engaging a host broadcaster to record the events and distribute the video – this has put the television and pay-TV networks in a far less powerful position.

    For the sports organisations those broadcast rights deals are still by far the most lucrative income stream they have but the days of the host broadcasters holding power over the events are slipping away.

    One telling statistic was the shift to mobile platforms. Kim Trengrove, the digital manager for Tennis Australia, pointed out how in 2015 online traffic was split equally between desktop and mobile use while in 2016 it was appearing to be 60% mobile. That change in itself has major ramifications for the market.

    In the future as the data becomes more valuable and the video feeds can be distributed across web browsers and even artificial reality headsets, the late Twentieth Century broadcast model becomes even more tenuous.

    For the television networks it means their power and income is reduced while those collecting, processing and distributing data become more important. However it may be the software companies managing the information aren’t able to pay the immense sums the broadcasters have been able to offer for the last fifty years.

    One thing a tour of the Australian Open did show was how business model of professional sports is dramatically changing. A data driven world is going to be very different to that of the last fifty years.

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  • Confessions of a serial creditor

    Confessions of a serial creditor

    One of the sad facts of business is that ventures go broke, and when they do there’s a trail of former customers, suppliers and employees that end up out of pocket.

    The recent appointment of administrators to the recently listed Australian electronics retailer Dick Smith Holdings leaving thousands of gift card holder – including the writer of this blog – out of pocket is a good example of this.

    Over twelve years of running a service business having customers go bust was a regular thing. Luckily this wasn’t frequent as once the assets had been liquidated and divided among creditors one was lucky to get five cents for every dollar owed.

    Early warning signs

    When a customer did go broke it was rarely unexpected. With long standing clients the payment times would blow out and often a business going bust showed the signs of poor maintenance, declining stock levels and distracted management long before the money ran out.

    The other notable thing was the failing company’s staff were often on your side. At one company, a whisky broker that went under owing millions to creditors who’d effectively bought ‘time share’ in liquor, the receptionist insisted in paying for some of the work we’d done out of the petty cash.

    Five years later the remaining outstanding invoices were settled and, as expected, we received almost nothing apart from the entertainment of reading the administrator’s reports detailing the struggles of angry creditors trying to get their drinking money back in the face of what had almost certainly been a scam.

    Ethical proprietors

    Most business owners that go broke aren’t crooks however, most are honest people who made bad decisions or were just plain unlucky. Often these people suffer far more than the creditors.

    One pleasant experience we had with a failed customer was a dance studio on Sydney’s Lower North Shore. The business went broke, the proprietor fled to her native New Zealand and I resigned myself to never seeing the outstanding thousand dollars.

    Two years later the formal liquidation proceedings had finished and unsurprisingly we received none of the monies owing. A few months after a cheque from the business owner arrived for the entire outstanding amount with a note apologising.

    A tough life

    While the former dance studio owner probably broke the rules in paying back the debts outside the official channels, she illustrated most failed business people are good people who were caught out by their own mistakes or being on the wrong side of lady luck.

    Business failure for those running startups or smaller enterprises often comes at a high personal financial, mental and relationship cost so it’s not surprising those sinking trying to hold on later than they should and then take personal responsibilty for the damages they cause.

    Sadly the same doesn’t hold true at the corporate level and in the case of Dick Smith Holdings the executives, the institutional shareholders frittering aways investors’ money, the private equity swashbucklers and the staid corporate managers responsible for the firm’s failure probably won’t see a hiccup to their stellar careers.

    The moral for anyone in business remains never to be too exposed to any one creditor. Regardless of how well a client’s management means, when things go bad it’s unlikely you’ll see most of the money you’re owed.

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  • How the taxi industry lost its advantages

    How the taxi industry lost its advantages

    In San Francisco, the Yellow Cab Company is filing for bankruptcy in the face of mounting insurance costs and competition from services like Uber and Lyft.

    For most of the Twentieth Century, having a government controlled market was good for cab companies and those owning the rights to own taxis. In most places though it wasn’t good for drivers and passengers however as wages fell along with the quality the service.

    In most cities, the taxi operators didn’t care as their industry was protected and customers didn’t have much choice. The problem was compounded by supine regulators who saw protecting the interests of industry incumbents as taking precedence over making sure operators provided a safe, reliable service.

    With the arrival of Uber, this changed and passengers started voting with their wallets. Interestingly, despite Uber X and Uber Pool being illegal in most place, regulators and their political masters found public opinion was firmly against the taxi companies and owners who’d exploited them for so long.

    To the horror of the taxi operators, they found the community and the market had shifted against them leaving them exposed to changes they had never expected. Now operators like San Francisco’s Yellow Cabs are paying the price for not focusing on providing a decent service.

    For other industries, particularly those which have some sort of barrier to entry through government regulation, the taxi industry’s woes are an important lesson – focusing on service is the key to staying in business, not relying on keeping competitors out.

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