Demoting the newspaper

Newsagents are adapting to a digital world which is seeing every industry being disrupted

You know a product has problems when retailers start start moving it out of key retail positions. When the product was the retailers’ core business, you know the entire industry is in serious trouble.

Mark Fletcher describes in the Newsagency Blog how he’s moved his city’s number two selling paper off the main level of his newspaper display.

“Sales are not paying for the space,” Mark says bluntly.

Newsagents relegating newspaper fits nicely into Ross Dawson’s Newspaper Extinction Timeline, in the case of Mark Fletcher’s newsagency Dawson sees the Australian newspaper industry vanishing by 2022.

For newsagents the signals have been clear for some time that they have to adapt to a society where paper based products – newspapers, stationery and greeting cards – aren’t in demand.

The process of adapting isn’t easy or smooth – many experiments will fail and even the smartest business people will make expensive mistakes. That’s the nature of evolution.

Newsagents though are just one example of changing marketplaces, there’s few industries that aren’t being disrupted by the technology and economic changes of our times. All of us are going to have to adapt to a rapidly changing world.

 

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Debunking the myth of the digital nomad

The myth of the noble nomad developed during the mid Twentieth Century, today it’s being modernised with the rise of the digital nomad.

Last century’s myth of the proud nomad is being modernised with the dream of the digital nomad. Unlike the Twentieth Century legends, today’s tales are far more mercenary.

“Quit your cubicle” is one of the war cries of the current cult of entrepreneurs. It’s a nice thought that overlooks the real risks of striking out on your own and usually pushed by those selling self help books or related services.

A related concept to quitting your cubicle is the ‘digital nomad’, a quaint idea pushed by the same people.

The theory of the digital nomad

In theory, the digital nomad is a knowledge worker who travels the world tethered only to an internet connection and a power socket. It’s best illustrated by this tweet.

This is a wonderfully privileged western middle class view of the world – backpack around the world in cheap, or free, accommodation while earning a good middle class income through oDesk or Taskrabbit.

Conveniently this view overlooks that making a western middle class income through oDesk or Taskrabbit is pretty difficult. For most, the digital nomad lifestyle is a myth and seated more in long standing romanticism.

Building the nomad myth

The noble nomad myth has a proud history that gained currency in modern times thanks to the mid-Twentieth century stories of Lawrence of Arabia and Sir Wilfred Thesiger.

While the romantic myths about Arab nomads developed, Thesiger and TE Lawrence pulled no punches about the difficulties of nomadic life – it was a tough, hard and precarious existence that suited a spartan minimalist like Thesiger.

For the modern digital nomad life is tough and precarious as well unless you have a trust fund or tolerant, affluent employer.

Western privilege

The idea of sitting on a Boracay beach sipping a cold cocktail while working a four hour work week is lovely, but for clients there’s little reason to hire a privileged westerner at New York rates when they can employ a better qualified Filipino for a fraction of the price.

Most wannabe Digital Nomads will find picking fruit in Australia or teaching English in Bangkok is easier and better paid before returning to their community manager jobs in San Francisco, Melbourne or Manchester.

Thesiger himself would have been appalled at the whole idea of ‘digital nomads’ – entitled middle class people tied down by credit cards, encumbered with expensive laptops and obsessed with Wi-Fi access.

We should remember the romance of the nomad was built around retreating to a simpler lifestyle, the digital equivalent is actually far more complex – and precarious – than its advocates will admit.

The digital nomad lifestyle is a nice marketing line for self help books but for most it’s a cruel myth.

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Limits of the black box business

Many of the leading tech companies hide beyond mysterious algorithms or impassive customer support. That may prove to be their weakness.

One of the paradoxes of the modern tech industry is that while its leaders preach openness and collaboration, their own businesses are mysterious unaccountable black boxes.

This website has often looked at how the Silicon Valley business model leaves users and partners exposed to arbitrary enforcement of vague policies and indifferent customer service.

A good example of the black box business model is eBay’s major security breach where it appears millions of users have had their personal and banking details compromised. Instead of informing customers immediately, the company’s management hid the problem and hoped stonewalling inquiries would make the problem go away.

Lacking accountability

In the black box business model, not being accountable is the key – we see it with Amazon’s bullying of book publishers, Google’s high handed identity policies and Facebook’s puritan censorship.

Those high handed attitudes to customers’ and users’ rights is born out of arrogance; all of these company’s managements, and the corporate bureaucrats who enforce the policies, believe their hundred billion dollar businesses are untouchable.

Such arrogance might though be ill-founded as each of these businesses is less than twenty years old and, while they themselves have deeply disrupted existing industry models, there is no reason why their own market dominance and huge cash flows can’t be usurped by new technologies or challengers.

In age where trust is the greatest currency, hiding beyond a block box of algorithms and impassive customer support may not turn out to be a successful management strategy.

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The what and the why

SurveyMonkey CEO David Goldberg believes we’re still in the early days of understanding the new economy

“People are drowning in big data,” SurveyMonkey’s CEO Dave Goldberg says in the latest Decoding The New Economy video.

Goldberg sees SurveyMonkey as bringing order to the world of big data in allowing organisations to put their information in context, “We want people to ask the right questions so we can get better data.”

“Here’s a question I need to answer – how happy are my employees? what do customers think of my new product? What are my students doing at school this year?”

Growing the survey industry

One group that’s uncomfortable with the rise of SurveyMonkey, a privately listed company that’s worth $1.3 billion after a capital raising last year, are traditional market research firms who see the service as putting a powerful tool in experienced hands. Goldberg sees it as an opportunity for the market research industry.

“We’re not replacing market researchers,” says Goldberg, “most people who come to SurveyMonkey haven’t used a market researcher before. It actually probably creates more demand for more sophisticated research down the line.”

Goldberg himself isn’t from a market research background, instead he hails from the tech sector having set up LAUNCH in 1994, one of the early music streaming companies which he sold to Yahoo! in 2001 and became the company’s Director of Music.

He left Yahoo1 in 2007 and spent two years in the venture capital industry before joining SurveyMonkey as CEO in 2009.

Understanding the data

From his experience, Goldberg sees understanding data the key business skill for today’s workers, firmly believing that kids should be taught statistic rather than coding.

“Everyone is going to have to learn how to use data.” Says Goldberg, “someone was asking me the other day about sort of skills should we teach our kids to prepare them for the future and I think the thing we’re not doing enough of is teaching them how to use and analyze data.”

To Goldberg we’re still in the early days of understanding how mobile and social media are going to change business with understanding data being one of the great opportunities.

“Implicit data is really interesting but it tells you ‘what’, it doesn’t tell you the ‘why’, believes Goldberg. “We think what we do is the explicit side, we gotta ask people to get the ‘why.”

 

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Solving a global capital crisis

Kiva and crowdfunding challenge the global small business funding crisis.

“We face a global capital crisis,” states Julia Hanna, the chair of crowdfunding platform Kiva.

In a story written with Kiva board member and LinkedIn founder Reid Hoffman, Hanna discusses how crowdfunding platforms are replacing banks as the source for businesses around the world.

Throughout world  banks have effectively stepped out of the small business market, despite the world being flooded with cash to keep the global economy afloat over the last five years. Hanna writes about the US experience;

big banks currently reject more than 8 out of 10 loan applicants, and small banks reject 5 out of 10. Some estimates suggest that investment in small businesses has dropped as much as 44 percent since the Great Recession in 2008.

While the Great Recession had a lot to do with the collapse in small business lending in the US and Europe, the decline in bank support for main street dates back to the first Basel Accords established in 1988.

Basel judged banks’ risks on the classification on their assets – government bonds were the safest and domestic property was the preferred private sector asset with small business lending being a long way down the risk.

Following the cues from regulators, banks favoured mortgages which they could them securitize and onsell to investors; this gave rise to the sub-prime lending markets, Collateral Debt Obligations and eventually the Great Recession itself.

Six years after the great recession started and despite massive amounts of capital being injected into the banking system, the small business sector is still being capital starved.

As Hanna and Hoffmann state in their article, crowdfunding sites like Kiva and community initiatives are changing the banking system and it could well be that today’s trading banks.

Having neglected their core purpose of funding business and industry, are now as vulnerable to disruption as other industries as small businesses, entrepreneurs and communities look elsewhere for their capital needs.

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Too far in front of the curve

Even the best technologies can fail if they are too far ahead of the marketplace

Today Telstra’s CEO David Thodey launched the company’s new public Wi-Fi network that the telco hopes to roll out to two million locations across Australia.

In using Telefonica’s Fon service, the idea is to equip customers on landline connections – ADSL, cable TV or Fibre – with a public wireless hotspot. The telco can then offer public Wi-Fi as a service.

With well over half the country’s Internet market, Telstra can deliver reasonably good coverage with such a network in the same way BT does with their Wi-Fi that’s already providing this service in the UK with the same technology.

Today’s announcement isn’t the first time Telstra has launched a municipal Wi-Fi service, five years ago they launched a product that quietly slipped into obscurity.

At today’s launch, David Thodey mentioned that previous service and put it down to the immaturity of the technology.

Several generations of Wi-Fi technology later, it may be the new product is more reliable and stable than the last failed attempt and sees far better take up rates.

Which leads us to a truism in the technology industry – everything old is new again.

In fact, most of the technology we talk about today such as cloud computing, social media and citywide Wi-Fi has been around for years under different names.

What makes say cloud computing today more successful than software as a service a decade a go is that the current technology makes the products more reliable and accessible.

That’s another affect of the Gartner hype cycle, that as one technology recovers from the trough of disillusionment it gets renamed and spawns the adoption of a bunch of other neglected concepts or ideas.

As with much in businesses, the adoption of technology is as much a matter of timing as it is expertise.

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Three business lessons from the New York Times

The New York Times Innovation study has important lessons for all business owners and managers.

“The New York Times is winning in journalism,” starts the newspaper’s much discussed internal Innovation Report. Then in great detail it goes on to describe how the audience is being lost to upstarts like the Huffington Post and Buzzfeed.

Given the number of digital forests that have been felled discussing the report in the last week, it’s not worthwhile giving an in depth analysis of the study – particularly given Nieman Labs’ comprehensive dissection of the document.

What does stand out though are a number of over-riding themes that apply to almost any business, not just struggling traditional media outlets.

Being digital first

A constant mantra in the NY Times report is about being ‘digital first’ – if you’re thinking about that today, then you’re probably too late in your industry.

Every industry is now digital: If you’re designing widgets, you’re doing it on CAD system; if you’re selling real estate, you’re listing online (one of the great killers of the old metropolitan newspaper model) and if you’re selling doughnuts, you’re placing your suppliers’ order electronically and maybe 3D printing your icing patterns in the near future.

There isn’t one industry that isn’t being radically changed by digital technology.

Breaking down silos

One of the areas that’s been most resistant to digital change, and yet is the most threatened, is management.

Silos within organisations are a triumph of management power and make it difficult for a business to be dynamic when it’s necessary to negotiate with different fiefdoms just to change the colour of paperclips.

Those silos are fine when industries are cosy and there’s little competition but when disruptors enter the market those management empires become a dangerous, and expensive, weakness.

The New York Times study spends a great deal of its pages discussing how to break down silos within its own organisation and this is something every business owner or manager should be exploring.

With modern communication, information management and workplace collaboration tools many management roles are no longer needed.

For smaller businesses, this is the greatest strength when competing against larger corporations as Huffington Post, Buzzfeed and Business Insider  have shown in stealing the market from the New York Times.

You need to be found

One of the toughest conclusions from the NY Times study is that the quality of content actually doesn’t matter in the marketplace; The Huffington Post and Buzzfeed do an excellent job of taking the NYT’s work, repackaging it and redistributing it in a way readers prefer.

That might be a transition effect – it’s hard not to think that should original content creators like the NY Times be driven out of business then Buzzfeed will have to start employing more journalists and Arianna paying her writers – however right now gloss beats quality.

Buzzfeed and the Huffington Post are attracting audiences because their stories are easy to find online and their headlines almost beg you to read them.

For non-media businesses, the lesson is you need to be found; you may be the best restaurant, electrician or accountant in town but if you’re on the fifteenth page of Google in search results for your industry and suburb then you’re doomed.

The New York Times faces its own unique set of challenges, as do the publishing and media industries, many of the lessons though from the NYT  Innovation paper though can be applied to many businesses.

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