Decoding the new economy

The youngster myth

Making guesses about your customers is a risky business. You may well be surprised at what you find when you get to know them.

Last week Smart Company looked at Domino’s successful iPhone application which over 12 weeks has generated more than two million dollars in sales.

Asked about the app, Domino’s chief executive Don Meij said “the company saw it mainly as a marketing tool that would help it to target its demographic of younger consumers”. That comment illustrates how widespread the myth that mobile Internet and social networking are just toys for young people.

Website monitoring company Pingdom, recently looked at the demographics of social network users and found the biggest group were aged 35-44 with those over 35s making up 57% of users.

Similarly, a report last year by the Nielsen research company found over half of US iPhone users were older than 35.

From personal experience I’d suggest one of the biggest demographics for the Dominos iPhone app are time stressed parents either stuck in the office or realising they haven’t organised any food apart from red lollies for a 12 year old’s birthday party an hour before the event.

Along with the youthful user myth there are two other dangerous misconceptions about Internet usage — that older people are “rusted on” to the old way of doing things and that the young will drift across to the more traditional forms of retail, media and marketing as they age.

The reality is the drift isn’t happening; Marc Fron, the New York Times Digital Chief Technology Office, observed at last week’s Media 2010 conference in Sydney how readers under 30 have almost completely abandoned newspapers and show no signs of changing their habits.

Which leads to the other myth, that older users will continue to stick with the tried and trusted ways. The reality the older age groups are drifting towards online tools as they find the net is cheaper and easier to use.

In short, it’s a dangerous business making assumptions about who your customers are, particularly if those assumptions are based on tired and untrue stereotypes.

So get to know your customers, you might be surprised at what you find.

safety in the cloud

Cloud computing is changing the way many enterprises work, along with the massive cost savings and productivity gains there are some risks.

Cloud computing, where data and applications are accessed through the Internet and stored on remote computers, is one of the concepts that’s dramatically changing business. Like all changes that disrupt existing ways of working, it comes with it’s own set of challenges, opportunities and weaknesses.

One of the weakness often cited about the cloud is the security risk; how you can’t be sure your data is secure and safe from prying eyes. Last week’s story of Indian hackers attacking Melbourne businesses shows the opposite is true.

Some Melbourne based businesses were reportedly finding their systems had been breached and data left inaccessible by hackers protesting attacks on Indian students. The story itself is little suspicious given these allegedly l33t hackers can’t secure their own Ning page against multi level marketing spammers, but it is feasible as computer security is poor in many homes and offices.

Computer security is complex and costs a lot to do well. Many systems are run by overworked techs who simply don’t have the time to keep track of the fast evolving world of computer security and most businesses don’t have the resources to properly secure systems.

For the cloud computing service providers, security and data integrity are their core competencies. Keeping their clients’ data safe and their services available are their two main objectives. Any cloud service provider that forgets this is quickly out of business.

The cloud’s real weakness is in the Internet connections — should your ISP have a hiccup, the mobile service drop out or your router stop working then you have a problem. A well timed Denial of Service attack, where thousands of hijacked computers tie up a victim’s Internet service, can bring even the best run cloud computing service to it’s knees.

Denial of Service attacks are what happened to the Australian Parliament House website last week as a protest against the Federal Government’s Internet filtering proposals. This technique is probably the most effective and quickest way to bring down someone’s web services.

What all of this shows is technology is complex and whether we’re talking about cars, water, electricity, telephones or the Internet, everything is prone to failure in it’s own unique way and we have to manage the risks involved. In this respect, cloud computing has some downsides while running your own systems presents other weaknesses.

We’d all like to legislate or engineer risk out of our lives, indeed the belief this is possible is one of the causes of the Global Financial Crisis. However risk will always be part of life and balancing threats against rewards is a fundamental part of doing business.

When selecting the right tools for your business you need to understand the risks and plan for them. For many businesses, the risks of a losing connection to a cloud server are vastly outweighed by the costs and complexity of maintaining their own computer security. The right choice for your business is up to you, choose wisely.

The coffee revolution

One of the great misconceptions about the internet is how it isolates people from society. The truth is the net is a window on the real word that allows you to discover the networks that can help your business.

A good example of this are the “coffee mornings” springing up in our cities and towns where business people are using internet channels like Twitter and web forums to organise meet ups at cafes, which in turn develop into new business and social networks.

Because the coffee mornings are informal and have no organisers, obligations or rules, beyond making sure you pay for your coffee and eggs benedict, people feel free to come and go. They are perfect for time poor or isolated business owners, particularly those working from home or trying to juggle their family and business commitments.

The great thing with these coffee mornings is how they help develop useful business networks. People who otherwise would have never met are now becoming friends, mentors, clients and business partners.

There are always some losers from new opportunities and in this case it’s the structured business networking organisations, as there are no stiff membership fees or obligations to network and get referrals.

Unlike many traditional chambers of commerce the coffee mornings lack committees and officials, so they aren’t dominated by the small cliques you often find in formal business groups.

A whole way of doing business is changing from something as simple as groups of people deciding they have enough in common online to get together for coffee.

While this is bad news for those who’ve paid for networking type franchises, it’s a wonderful opportunity for business owners to connect with fellow entrepreneurs they otherwise wouldn’t have connected with – particularly those in regional areas.

If you want to organise a coffee morning in your suburb or town, get on the internet. You’ll be surprised at the like-minded business owners, customers and supporters who are on services like Twitter and Facebook.

Should you find there is already one happening in your neighbourhood, go along. The lively, intelligent people you meet might help you see some of the opportunities, and threats, on your doorstep.

The new economy

The final slide of Steve Jobs’ iPad launch sums up where the new economy is going. The tech and creative industries have come together and the results will be the great drivers of economic growth for the next 50 years.

The final slide of Steve Jobs’ iPad launch shows how the tech and creative industries are coming together. The results will be the great economic drivers of the 21st Century.

Steve Jobs’ launch of the iPad was the classic succesful Apple product launch before adoring fans however the bigger picture from the show is identifying where the world is heading as technology and arts come together.

With Apple and Jobs this is nothing new. Apple’s great success has been from incorporating well designed and Engineered product in markets where their competitors have been more on price points and often poorly implemented features.

Releasing products that work well with inuitive interfaces has allowed Apple to sell their products at a premium while their competitors in the computer and mobile phone markets have found themselves dealing with declining margins.

Regardless of wether the iPad itself succeeds or fails it shows though is how powerful the combination of good design and clever Engineering are in the new economy.

Why online listings are an essential business tool

Online listings with the major search sites are free and effective. Even more importantly, those listings form the basis for many of the location based services that are springing up on Smart Phones. You need to list your business on these sites to make sure they are appearing in the searches customers increasingly rely upon.

Online listings with the major search sites are free and effective. Even more importantly, those listings form the basis for many of the location based services that are springing up on Smart Phones. This article originally appeared on the 19 January Smart Company Business Tech Talk column.

Since Global Positioning System (GPS) equipped smartphones arrived on the market, we’re seeing all kinds of location based phone applications springing up.

Recently I’ve been playing with two of these services – Foursquare and Urban Spoon to find there are some lessons for businesses in how these products work.

These services are terrific at telling you where the nearest cafes, service stations or places of interest are, although at the same time I’ve noticed how inaccurate some of the business locations can be.

Often, particularly in the case of Foursquare, the wrong spot has found its way into the system because customers have taken a guess at the address, added the details while on the way to or from the business or just simply got the location wrong. Which can be awkward, particularly if your competitors are closer to the incorrect location.

So it’s worthwhile getting your businesses address correct on these services. Fortunately, it isn’t as hard as having to track down every single one of these new services and spend hours plugging your details into them.

The most important single service is the Google Local Business Centre, as many of these location based services use Google Maps. Every business should be on this already as the listing is free and the information also feeds into Google search results. If your organisation is correctly listed here, it will appear in all Google searches for your product in your neighbourhood.

Microsoft are in this market too with their Local Listing service which feeds into Bing results in a similar way to Google’s service. Like Google Maps, it’s free and listing only takes a few minutes.

The traditional advertising medium for most Australian small businesses has been in the Yellow Pages. Sensis also offer a free listing which will get you in their maps and directories (although to get a priority listing you’ll need to pay more).

So check your details are correct on all these services, it only takes a few minutes and given most customers, particularly in the business-to-business markets, use the web to research potential suppliers you’ll probably pick up a few customers just by having the right details online.

With mobile internet usage expected to overtake desktop surfing in the next few years, it’s critical your details are correct on these phone applications which customers are going to increasingly rely upon.

How marketing and business are interwined

Entrepreneur magazine discusses changing your definition of marketing. While Dan Kennedy has some good examples of businesses that have used tools such as membership and market positioning to grow, I’m not sure they can be treated as marketing.

Entrepreneur magazine discusses changing your definition of marketing. Dan Kennedy has some good examples of businesses that have used tools such as membership and market positioning to grow, but I’m not sure they can be treated as marketing.

All of the examples; Starbucks, Disney, Florida timeshares, barbers and gourmet pizza shops illustrate some great business models which is exactly what they are; ways of doing business that engage the customer and sell a better product.

The marketing aspect is simply telling the story of why the business is better, unique or why it does something so well.

One of the problems with marketing is it’s often about telling porkies, not about describing the product or why the business is unique. This type of marketing fails when the customer finds they’ve been sucked in.

In the past, big brands have been able to get around this by using mass media to shout it louder and stronger on the idea that if you repeat the lie often enough, people will believe it.

Marketing is part of your business DNA, you have to tell your story to get business. The key is to be telling a true story based on your product’s strengths.

The new business tools

Probably the biggest highlight of a fast, hectic 2009 was November’s X Media Labs in Sydney which illustrated just how the world is changing as a result of new media channels, faster Internet and more powerful computers.

The organisers of X Media Labs, Brendan Harkin and Megan Elliot, describe it as “a meeting place uniquely designed to assist companies and people get their own creative ideas successfully to market, through concept development, business matching, and direct access to world-class networks of creative professionals.”

Brendan and Megan held the first event at the Sydney Opera House in 2003 but have since relocated to Shanghai. The Chinese connection was strong with the guest speakers including property developers and social media entrepreneurs.

Wang Xing, founder of Chinese social networking sites, Fanfou and Xaionai impressed everyone with the size and growth of the Chinese Internet market. It left no doubt where the eyeballs and where the wallets will be as we continue into the 21^st Century.

More challenges were presented by Zheng Xaioping, founder of property developer BAZO, who went through the growth of Chinese cities and the directions government and investors are taking within those cities.

A local success was Zareh Nalbandian of Sydney’s Animal Logic who showed some behind of the behind the scenes footage of Happy Feet and a US advertising campaign for fast broadband featuring a jet engine assisted shaved rabbit. It illustrated how exciting, quirky and innovative work is being done in Australia.

To show the US isn’t out for the count, Susan Bonds, president of 42 Entertainment, showed how bringing together many strands of the online digital media tools created a massive alternative reality game for the movie Dark Knight.

Probably the most exciting presenter was Professor JoAnn Kuchera-Morin from the University of California’s Santa Monica Nanotechnology Allosphere. Her talk, a version of which is on the TED website, showed the possibilities in the new economy as arts, science and technology come together.

Not everybody has the resources of the US National Science Endowment, a big movie studio, or the Chinese government to support their projects, but as Brasserie Bread showed a few months back you can create a buzz using some of these tools quickly.

That’s the challenge for all of us over the Christmas break – to figure out how we can harness the power and opportunities the second decade of the 21^st Century is going to present us.

Category: business advice

The youngster myth

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