Category: business advice

Too old to surf?

Do older customers use the web?

“For those of us aged over forty, we don’t use the web. And neither do our customers!”

An audience member threw this statement to the panel at last night’s Let’s Talk Business seminar discussing The New Consumer. One of the panel members, Adam Ferrier of Naked Communications, replied flatly; “you’re wrong”.

That business owner assumed her own likes, priorities and experience are shared by her customers. This isn’t always true, what we think is true about our clients and markets often proves not to be the case.

Just because you don’t have time to surf the web, use social media or play online games doesn’t mean your clients aren’t using these tools.

Assuming that the internet is for young folk means your business focus is on older people who don’t use the net – which is probably the fastest declining segment in our society as seniors move online.

The US based Pew Internet Survey’s Generations Online in 2010 Report reported older user were rapidly increasing their net use while in Australia the 2010 Sensis ebusiness report came to the same findings saying;

“The groups most likely to report below average usage were those aged 65 and above and retirees. For those Australians 65 years and above only 66 per cent reported accessing the internet in the past 12 months. However, usage in this age group has increased by six percentage points over the past year.” – p. 17 Sensis e-business report.

Six percentage points to 66% represents 10% growth in the over 65 age group. At that rate we’ll see the seniors reaching the 97 to 98% levels of Internet usage sometime in 2013 and the 50-64 year age group will be there next year.

Restricting your business to an 8%  slice of the market  – which will soon be 3% – is up to you, it may well be that is where your customers are. But it’s a big risk and one you wouldn’t want to make on some blind assumptions.

Many of us may be too old to surf the point at North Narrabeen, but we’re all using the web and older users are the fastest growing group. Rather than assuming your customers aren’t going online, it’s time to ask them what they are doing with their computers.

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The benefits of mentoring

Challenging your assumptions and leaving your comfort zone helps your business

When I was asked at the beginning of the year if I’d be a mentor on a Young Entrepreneur Program it was a tough decision, I was writing a book and launching a new business myself. As it turned out, it was a good decision as it challenged my assumptions about the economy and industry.

A striking thing about the mentoring program was the diversity of the participants, everything from olive merchants and flower shops to chiropractors and shirtmakers with a fair few web and IT people thrown in.

Notable were that half those being mentored were in the manufacturing and clothing industries, two sectors that I assumed were well and truly dead and buried in an Australian economy focused on seeking easy capital gains underpinned by mining royalties.

My assumption was wrong; many people want to make and sell things despite the odds working against Australian manufacturers. As well as a shirtmaker, the course also included fashion designers and a manufacturer of rope sandals.

The rope sandal man personified one of the most valuable business skills of an entrepreneur; don’t get stuck with assumptions. Business life is a continuing journey and if you get stuck working within the stricture of one set of assumptions, your business will at best stagnate or be hit by the forces of change that are destroying many industries built on what seemed to be rock solid assumptions.

Of course many assumptions are flawed; we can call that “The Unknown Unknown Problem”. When we start a business there are a whole set of unknown factors, some of which we know about and others which are totally unexpected.

Identifying “unknown unknowns” is probably the best benefit an adviser can bring to the mentoring relationship. The more inexperienced we are, the more likely it is that we don’t know what we don’t know. As one of the experienced mentors put it, “the longer I’m in business, the more I realise how much I don’t know.”

Another of my assumptions that was shot down during the program was the internet-savviness of younger entrepreneurs. Many of their assumptions were that net wouldn’t do much for them.

For instance the custom car parts seller believed, incorrectly, that most of his customers aren’t on the web or interested in tools like Facebook when the reality is that niche products are exactly what the web does well.

A similar belief was with the shop fitting design business, that the web is a threat to her business. The reality is the opposite, as innovating retailers need to improve their store designs to improve the physical shopping experience that presents wonderful opportunities for clever designers.

One assumption I’ve never bought into is about the work ethics of the much maligned Generation Y, believing those whining about lazy twenty somethings are just intellectually lazy and grumpy old baby boomers and Gen Xers. This was bourn out by the course as the younger entrepreneurs showed they weren’t shy of putting in the hard work required to succeed in your own business.

Demolishing assumptions about things – like the Internet’s effect on business, the work ethics of Generation-Y and the refusal of Australia’s manufacturing and clothing sectors to die – was the most valuable thing this course delivered for everyone involved.

Assumptions kill our creative thinking, the very asset we need in society like ours that’s going through massive technological change, not to mention an economy that still has many “unknown unknowns”.

Challenge your own assumptions, you might be surprised at the results.

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Glittering distractions

Google and Facebook have joined the online deals battle. Will they dominate this market?

Into an already crowded group buying market, Google Offers and Facebook Deals have launched. It’s tempting to think the power of both will swamp existing players like Groupon and Living Social, but will the search engine and social media giants eventually dominate the group buying market.

There’s a number of barriers to success in the group buying industry; securing a steady supply of compelling offers, generating a community of followers, building a sales team and dealing with customer service issues are just a few. For both Facebook and Google these obstacles are not just a matter of money or scale.

The power of Google

Google’s clear strength lies with its local search functions. Google Places is an excellent fit for group buying services, a point not lost on many of the existing players who use Google Maps and the local business service to support their offers. Merchants can already use the free vouchers feature in Google Places and proactive businesses are already doing this.

Leveraging their existing voucher features into paid group buying services should be one of the easier tasks for Google Offers’ management. Search itself is a powerful tool for merchants offering group buying services, I might not be interested in dog washing or personal training services in my neighborhood, but if I’m online searching for a holiday a group buying offer for discount meals or car hire in Miami may well attract me.

Facebook’s power

Adding social media to group buying is a pretty powerful combination and one that many of the early services leveraged extremely well, so Facebook’s entry into group buying should worry the existing platforms. Being able to segregate deals by geography, demographics, friends and likes is another example of how powerfully Facebook’s advertising can be targeted.

Merchants who use the Facebook service can be pretty confident their ads will hit the right audience rather than being blasted across a mailing list of indifferent subscribers. Coupled with this is the use of Facebook credits. While Facebook aren’t going to make them directly redeemable for gift vouchers or cash at this stage, they still add to a compelling package Facebook can offer both advertisers and customers.

The customer service dilemma

One thing that makes a group buying service successful is the delivery of well timed, compelling deals. This means a hands-on sales and support team. Like most web2.0 businesses, both Facebook and Google aren’t particularly good at face-to-face, or phone-to-phone interactions with customers.

A challenge for both companies will be to attract management talent that can run the sales teams necessary to provide attractive daily deals while dealing with the inevitable consumer service tasks that come with selling direct to the public.

Channel conflict

Facebook and Adwords advertising have been big lead generators for the existing social media platforms and it’s going to be a challenge for both companies in managing the conflicts which will appear between their advertising and group buying platforms.

Those advertising channels are both organisations’ primary source of revenue, so these are going to take priority over other initiatives. Both services’ group buying operations may interfere with their advertising revenue by discouraging or competing with paying advertisers and this will be a major challenge for both Facebook and Google to manage.

Are we over group buying?

That effort to find compelling deals is a problem for all group buying services and we’re seeing the saturation problem with many of the providers as they struggle to find compelling daily deals in all of their markets.

Being late to the markets means both Google and Facebook are going to face exhausted buyers and merchants who been saturated by the dozens of services that have appeared in the last twelve months.How many consumers and businesses are prepared to sign up to YAGS (Yet Another Group buying Service)?

There’s also the issue that group buying might be a passing fad; many of the merchants advertising on these services are service businesses grimly hanging onto failing business models built on the late 20th Century idea of unlimited credit driven consumer demand.

Many of their customers too are cash strapped consumers shopping around for cheaper deals – a discount haircut here, a cut-price meal there – as a way to maintain the lifestyles that are becoming unaffordable in an economy where jobs aren’t as secure, credit isn’t as easy and retirement savings looking uncertain.

As it becomes apparent to both consumers and merchants that most of the group buying services aren’t meeting their needs then the demand for these service is going to drop away.

That’s not to say group buying is a dead model, but it appears the market is overheated with way too many suppliers.

Having deep pockets may well turn out to be why Google and Facebook end up being the sole survivors from the inevitable group buying shakeout, but it doesn’t mean they’ll actually be the best players, or they’ll make any money from it.

Given how late both Facebook and Google are to this market it’s hard not to think they are repeating the mistakes of previous market incumbents in other sectors of ignoring a market until becomes a shiny trinket which every dynamic corporation should have a presence in.

In that respect it’s a bit sad that relatively young corporations like Facebook and Google are overlooking genuine innovation and using their skilled teams to build me-too products rather than finding and building new markets. Hopefully the time taken to build their group buying services won’t distract these companies from their core businesses.

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Trust is the currency of the web

To succeed online, we have to be a trustworthy voice in the noise of the Internet

“On the Internet, nobody knows you’re a dog” says Peter Steiner’s famous cartoon. All of us who want to be taken seriously on the web have to prove we’re not dogs – or trolls, shills or just those who regurgitate cheap, nasty and unreliable content.

This is particularly true when you want to be a trusted news source; your audience has to be assured an article’s facts are true and the conclusions can be relied upon. That assurance is found in references to source material, the writer’s identity and the basic facts for the reader to decide how accurate the story is.

An article in the Sydney Morning Herald on Voice over IP security illustrates just how even mainstream, established media can get things wrong. This article tells us nothing; we don’t know who the writer is, it doesn’t link to source material and, unforgivably, the story leaves it to the reader to guess what the security problem was.

Because of Fairfax’s silly and inconsistent rules on external links I normally don’t link to Fairfax news articles. A good example of this silliness is illustrated in the above article where the reader has to copy and paste into a web browser the bit.ly reference to MyNetFone’s security advice which the writer has managed to sneak into the copy.

It would be nice to congratulate the writer on this little bit of subterfuge but the article doesn’t have a byline, the credit at the bottom simply says “Livewire” which probably refers to the long defunct IT section of The Age, the Sydney Morning Herald’s sister publication.

That the article also refers to Bleeding Edge, a long running Age technology column by Charles Wright which was discontinued some time in early 2006 and which Charles later tried to morph Bleeding Edge into an independent blog. It’s not good enough that we have to guess who the writer is.

Having a semi-anonymous writer, no byline and no links to supporting information might be all forgivable if the article actually told us what the problem had been with the phone account; did the evil Hong Based criminal mastermind hack the providers’ network, was it a security lapse on the writer’s network or had the user’s password been weak and compromised?

I suspect it’s the latter, but like most things about this article the reader is forced to guess. If the reader doesn’t have some level of computer expertise they’d be totally lost.

For organisations like Fairfax, the publishers of The Age and Sydney Morning Herald, the challenge in a society where the traditional newspaper model is rapidly dying is to build their online brand so they can bring advertisers across to it.

The only way they will succeed in this difficult task is to be trusted as a source of reliable information, and right now poor editing coupled with silly policies such as the one on linking out to other trusted sites are damaging readers’ trust in their brand.

Rather than sacking editors, publishers should be preserving them and making their online content more trustworthy than the bulk of the web with its dozens of content farms and millions of inconsistent blogs (like this one).

It’s only by having high standards that today’s media empires will survive the changes the Internet has bought, going cheap and losing the trust and respect of the audience is not an option.

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The Networked Business

The first of the City Of Sydney’s Let’s Talk Business looked at how business can use the cloud

The first of the City Of Sydney’s Let’s Talk Business workshops looked at how business can use cloud computing services to help improve the marketing, operations and profitability.

My presentation, Business In The Cloud covered the definition of cloud computing, the benefits for business, the risks and the case for getting on the cloud.

The text of the presentation, shown here has been broken into four segments each addressing the individual points.

What is the cloud?

The opening section looked at what cloud computing is, the underlying definitions and how it works. We discussed how the underlying concepts of cloud computing are nothing new and how the concepts of shared resources across a reliable and robust network are part of the very reason for the Internet itself.

The benefits of cloud computing

Having defined cloud computing we look at the benefits of these services, focusing on the flexibility online software delivers and how businesses can use these tools to quickly seize opportunities in our fast changing society.

Risky business

Every new technology has its risks and cloud computing is no different. In our third presentation we look at some of the online traps and how to manage them.

The business case for cloud computing

Concluding the presentation is a summary of the business case, balancing the benefits and the risks and concluding with how businesses might use cloud services.

Further information

Illustrating how businesses can use online tools, we have a list of some of popular business cloud services that can help your organisation use the web to be more flexible and innovative.

The presentation was part of the Let’s Talk Business series of workshops run by the City of Sydney and held at the Customs House. There’s three more events in the 2011 series covering the new consumer, mobile internet and business leadership.

If you’ve been along to the Lets Talk Business events, or have some ideas on how business can use cloud services, we’d love to hear your comments.

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The networked business Part 4: The business case for cloud computing

Part 4 of the Let’s Talk Business Cloud Presentation

This is the fourth and final part of the presentation given as part of the City of Sydney’s Let’s Talk Business series of events on new business technologies.

The case for business cloud computing

Cloud computing is part of the future of of business. Increasingly it’s going to become of fundamental part of our society as we become more connected.

Business is open 24 hours. Even if your office or staff aren’t working at 4am on a Sunday, customers are checking your website to look at your products. If you are selling online, everything has to be running.

The cloud is not a tool for every business. For some, the risks or limitations mean they are better served running application or storing data on their own computer.

For most businesses though the cloud changes the game, it makes them more flexible and productive.

In an era where we’re seeing massive change in our economy and society, it’s the business who can respond quickly to the new normal who will survive and prosper.

Cloud computing helps businesses adapt and are part of the key to running a successful enterprise in the 21st Century.

This is the third of a series of four posts taken from The Networked Business presentation. Parts One, Two and Three are also online. A list of the useful business cloud computing tools to accompany this article.

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The networked business Part 3: Managing risk in the cloud

Part 3 of the Let’s Talk Business Cloud Presentation

This is the third part of the presentation given as part of the City of Sydney’s Let’s Talk Business series of workshops on new business technologies.

Not always free

There are some misconceptions about cloud services though.

Just last year, the Australian Financial Review ran a front page article headlined “massive savings to be made in the cloud” stating that cloud services can save a business up to 80% on its IT spend.

Many industries have made the mistake of relying on cheap prices to get customers through the door. Think of Myer’s problems with their perpetual sales, a mistake being repeated today by dozens of smaller businesses offering 80% off meals or haircuts through the group buying services.

In the Internet based industries we’ve made the mistake of training our customers to believe we can do everything online for free.

Free is an illusion, there is almost always a cost and on the net you’ll either pay by spending time or giving away your own, or your clients’, privacy.

The better services cost. The most successful cloud service, Salesforce.com, is quite expensive although still substantially cheaper than the server based alternatives.

Many services though are based on the freemium model, when you need additional features or grow beyond a certain size charges kick in or increase with your needs.

Mail Chimp, an online email management system is an example. Late last year I resurrected a mailing list which hadn’t been used for 18 months. I chose to pay the fee for MailChimp as their management service would deal with the hundreds of invalid addresses and unsubscribes a neglected mailing list always attracts when you restart it.

Not only did MailChimp deal adequately with these problems but it also took the size of the mailing list below the 2,000 name threash hold for their free service.  So spending a bit of money actually saved a lot more money and a massive amount of time. It also illustrated the flexibility of cloud systems and their pricing models.

The risks

Nothing though is risk free. Any technological change comes with risks; electricity changed humanity but thousand of people die every year from misusing it. We can say the same for the motor car, steam engines and penicillian.

For all the benefits of Internet technologies they too have their own risks. In cloud computing we can divide them into three major groups; Reliability, Terms of service and Security.

Security

Probably the most misunderstood, and so riskiest, aspect of IT is security. Most business people over estimate the security of their own systems and are shocked when their data is compromised by viruses, hackers or, most commonly, their own staff walking out the door with vital information.

Cloud services generally have better security than most business networks as they have the resources to deal with the massive task of keeping computing systems secure, but there are still risks in using online providers.

Strong passwords begin to matter and guarding them is important as well.

Granular access, not giving everyone access to everything also becomes very important. This is also a common problem on small business networks.

Accessing cloud services from shared computers or through unsecured wireless networks is probably the biggest danger, particularly with mobile workers. It’s important any provider you use offers encrypted services, which you can tell from the login page showing https:// at the beginning, and making sure you log off when you finish using computers in Internet cafes or in other people’s offices.

Terms of service

When using cloud services you have to understand these are someone else’s computers you are occupying so you have to play by their rules regardless how arbitrary they seem.

Wikileaks is a good example of how large cloud and Internet providers use ToS to shut down customers they don’t like.

You don’t have to upset the CIA or Julia Gillard to get into trouble. Victoria Buckley Jewellers in Sydney’s Strand Arcade uses beautiful porcelain dolls to model their products. One of the female dolls has nipples and Facebook shut down Victoria’s account after a series of photos showed the doll topless, nudity being a breach of Facebook’s conditions.

A more common problem is eBay shutting down traders’ accounts on spurious piracy claims. This is very common and genuine risk to anyone running an online store relying on PayPal or eBay.

Probably the best example of silly piracy claims is when the University of Florida hit the Flickr photo sharing service with claims that every photo with a description containing the words “Florida” and “football” was a breach of their college grid iron team’s copyright.

The howls of outrage from angry Flickr users when their pictures of kids playing football while on holiday in Florida or local team photos were taken down soon convinced both organisations that their actions were hasty and ill-advised.

The problem remains though that online services are still too quick to shut down other people’s services so you need to plan for these type of disruptions.

Reliability

Tied closely into the terms of service is reliability.

Reliability is at the heart of all technologies. If something breaks down most of the time you use it, then it’s of little use to your business.

If you are using a cloud service you need to have both reliable internet connections and a provider you can trust. This is why free services often don’t cut it for business use.

One aspect cloud services and technology companies often sell is the Service Level Agreement or SLA, these offer a refund if the service doesn’t perform to set standards. While SLAs are useful, they don’t make up for the disruption a service interruption causes your business. As Virgin Blue found during their service problems late last year.

As we’ve seen with the recent natural disasters in Japan, New Zealand and Queensland, the Internet routes itself around problems. So if you are in a problem area the challenges of keeping your business operating may be increased while communications are still being repaired

Redundancy is the key, just as the Internet and cloud computers have redundant features, so too should your systems. You have to choose providers that let you easily download usuable data from their services in case you find yourself offline or unhappy with their product.

This is the third of a series of four posts taken from The Networked Business presentation. Parts One, Two and Four are also online

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