Insight

We’ve moved from big data to big A!

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So what does the A Stand for?

The companies that are thriving are the ones that get a lot of users and data – but what sets them apart is their Algorithm. Companies such as Google and Amazon use their algorithm to personally tailor the site or offer for every user. This makes them far more effective than companies that display the same site regardless of the data and (often uncurated) knowledge they have of their customers.

Amazon is the most effective at this – constantly looking at what you’re shopping for and displaying the most relevant products. They are also scouring the net to make sure they are providing the most competitive pricing.

Facebook, Instagram, Google are all strong and improve their algorithm all the time. Never resting to ensure they can get even the smallest incremental benefit by improving their algorithm.

Clearly it is easy to think about online companies when we talk about tailoring the offer or product. But this approach is just as relevant for all companies – creating dynamic segmentation to ensure you are always tailoring your offering or taking a service or product to customers with similar characteristics.

This isn’t new – it’s just with AI/Cognitive techniques and huge amounts of data – it can be done far more effectively and tailored to a target audience of one.

Not all new age companies are good at it – but that’s a story for another day.

Where is the value in your organisation? 

  
IBM has just spent $2.6bn buying Truven Health – a big investment and one that is all about the acquisition of data (and customers). 

Increasingly organisations are seeing that the real value in an organisation is in the data assets – with the ability to use analytics to get rich insights from large data sets. The smart organisations are using analytics and big data to truly understand customer behaviour, value levers for an industry and value points in the supply chain (amongst many other things) to put themselves in an advantaged position. 

So the things that we have for so long called ‘intangible’ – such as data, customer contacts and relationships – have become the most tangible in determining value. 

The challenge for organisations is to ensure that they are capturing and curating the data and intangible assets that sit within their systems and processes and then using the analytical tools to extract the value. 

See below a link to an article in Fortune on the IBM acquisition. 

Why IBM Is Dropping $2.6 Billion on Truven Health

 

Innovation leads to growth for all?

IMG_0135Taxi companies have been up in arms about the disruption to their business from Uber. Earlier this week, Deloitte Access Economics published a report that showed that Uber had grown the market in Australia by 61% (see below). We have seen similar impacts when Virgin and Jetstar were introduced in the domestic airline market. Often a market will have latent demand and so a lower priced disrupter will create growth way beyond what is expected.

So while it is understandable for the incumbents to be concerned about their business, more time should be focused on how the they will differentiate themselves from the disruptor.  In the taxi industry, the effort seems to be on trying to create a regulatory block, rather than developing a winning proposition against Uber.

I have been asking taxi drivers (booked through Uber) where their business comes from. At the moment, 1/3 is flagged, 1/3 called through the taxi cooperative and 1/3 through Uber. This is anecdotal but seems to support the Deloitte Access Economics research.

“Ride-sharing company Uber is generating annual benefits to Australian consumers worth more than $80 million a year, according to analysis by Deloitte Access Economics. Deloitte’s report, Economic effects of ride sharing in Australia, commissioned by Uber, showed uberX, the standard ride-sharing service offered by Uber, had grown the market for commuting to a specific destination via a third-party driver by 61 per cent as consumers switched from driving their own car, using public transport, walking, or were simply enticed to travel. Uber operates an app that connects drivers to users, processes fare payments and identifies drivers who are given a rating by consumers. Deloitte found the service was delivering an annual benefit of $81 million. Less than half, or $31.5 million, of the benefit was the result of cheaper prices, while $49.6 million was derived from a “consumer surplus”, or the amount consumers would have paid above the price charged for the service.”

What platform will you create?

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Go Pro and Twitter are looking at Livestreaming through Periscope as a way of driving greater growth. The article below from Katie Roof in TechCrunch highlights the story.

For me the interesting thing is that even disrupters need to continually evolve – to move from a single product into a platform that allows ‘buyers’ and sellers’ to interact on an ongoing basis.

Platform businesses are the powerful new form of business that will often bring a number of parties together to interact. Uber and AirBnb are just two examples of how powerful a platform can be if you can get many to interact with many.

Most major organisations are looking to develop platforms – BMW through the interactivity of their in car systems with the internet, Nike with the tapping into running apps, Pharma companies building a platform around health and medical advice and food companies with recipes and advice.

What platform will your business need to create to survive?

“Action camera maker GoPro is integrating with Periscope, the livestreaming app from Twitter. Owners of the GoPro HERO4 cameras will be able to broadcast their adventures directly to Periscope. As soon as the GoPro is paired to an iPhone, it will recognize the Periscope app and let users record and share their surroundings with a live audience. (The GoPro will still be able to record the videos for later viewings).

The cameras, which are popular with surfers and skiers, also enabled broadcasting on Periscope-competitor Meerkat last year. And GoPro has a product called the HEROCast, a wireless transmitter geared towards professional broadcasters.  

Twitter recently announced that it is integrating Periscope into user’s Twitter feeds. It’s unclear how many of Periscope’s 10 million accounts are active, but the company claims that more than 40 years of video is watched on Periscope each day. Livestreaming has become a hit with teens, as apps like YouNow continue to gain traction. YouTube and Facebook have also introduced livestreaming, in an effort to capture this growing audience.

Both Twitter and GoPro are at a crossroads and the companies are hoping that capitalizing on the livestreaming space will attract some new fans.”

Tesla’s biggest disruption is unlikely to be in the car industry 

  We’ve all heard about Tesla and the potential disruption to the car industry.  Tesla will certainly have an impact however all the major manufacturers are moving rapidly to develop electric vehicles and Apple and Google are really gearing up in the vehicle space as they see it as a platform play. 

I doubt whether Tesla will eventually become a major player on its own in the global motor vehicle industry – but time will tell. 

However, where I believe Tesla may become a major player is the energy industry – with their home battery technology. 

If I was an executive of an energy utility, I would be very concerned by the advent of home batteries, such as the Tesla Powerwall ( see link below to Mashable article). The home battery makes Solar a real option for households and small businesses, particularly in places like Australia. It means that a lot of households can disconnect themselves from the grid or become a net supplier rather than a net consumer. 

Often, an innovation or invention’s greatest impact is not in an industry which it was first designed for – I think that is very likely in Tesla’s case  

http://mashable.com/2016/01/28/first-tesla-powerwall/#cvYDGGmvZgq1

Apple – the real disruption (and value?)is in services

  Apple’s earnings release overnight talked about its services revenue -$5.5bn USD for the quarter. 
While focus is generally on Apple’s products and the sales it gets from IPhones, IPads etc – the services revenue from iTunes, App Store and Apple Pay is huge and high quality. Not only is Apple’s revenue from services as big as all revenue that Starbucks derives, it demonstrates the huge ‘tied’ customer base that Apple has. 

While people will talk about how the iPod and iPhone changed our lives, it was the fundamental disruption of the music industry by iTunes that has been at the heart of the change  – and also just happens to have created a high quality and huge revenue stream for Apple. 

While innovation in products causes disruption, business model disruption, such as seen by Apple in the way we access music, apps for a range of leisure and business uses and increasingly in the way we pay for goods and services, is the key to significant change. 

Digital disruption – the block chain and its impact

Forget Bitcoin -- What Is the Blockchain and Why Should You Care?

I am fascinated with what is happening at the moment- every industry, every organisation is on the cusp of significant transformation, largely due to the changes in technology.

I am no technology geek – the technology has little fascination for me – but what it does to the business model, the ecosystem and industry structure I find incredibly interesting.

Crypto currencies, such as Bitcoin, have been talked about for a few years now – and getting an understanding of them and how they are likely to impact hasn’t been easy. I have no doubt that they will play a role, particularly within the banking system and the person to person  payments process.

BUT, the hidden sleeper behind Bitcoin, that I believe will have enormous impact, is the Block Chain. Block Chain is the technology driven consensus authentication process that authenticates every transaction and verifies asset ownership. It has huge potential to transform payments, transactions, auditing and credit.

The link below provides a simple explanation of the way the Block Chain works.

http://recode.net/2015/07/05/forget-bitcoin-what-is-the-blockchain-and-why-should-you-care/?_lrsc=d4e73b6a-2606-4333-a54c-97d90fe99ba4&trk=elevate_tw