free html hit counter Joints After Midnight & Rants Archives - Page 2 of 45 - John Battelle's Search Blog

Predictions 2016: Apple, Tesla, Google, Medium, Adtech, Microsoft, IoT, and Business on a Mission

By - January 03, 2016

Nostradamus_propheciesTwelve years of making predictions doesn’t make writing them any easier, regardless of my relatively good showing in 2015. In fact, I briefly considered taking the year off – who am I to make predictions anyway? And so much has changed in the past few years – for me personally, and certainly for the industries to which I pay the most attention. But the rigor of thinking about the year ahead is addictive – it provides a framework for my writing, and a snapshot of what I find fascinating and noteworthy. And given that more than 125,000 of you read my post summarizing how I did in 2015 (thanks Medium and LinkedIn!), it was really you who’ve encouraged me to have at it again for 2016. I hope you’ll find these thought provoking, at the very least, and worthy of comment or debate, should you be so inclined.

So let’s get to it.

1. 2016 will be the year that “business on a mission” goes mainstream. It started in the hippie era and gained ground with well meaning but outlying companies like Ben & Jerry’s and Patagonia; but it took the technology startup era to prove its merits, and the climate crisis to push it to the fore. Businesses driven by more than profit are businesses that attract the best talent, create the most value, and ultimately provide the most benefit to society. Extractive, profit-first businesses are already on the way out, but 2016 will be seen as the year their dominance peaks. This trend will evince itself in many forms: We’ll see massive older companies shift their marketing focus to purpose-based messaging – both to insure top talent considers them as a career choice, and to maintain relevance to a new generation of purpose-based consumers. We’ll see mainstream media outlets start to cover the social and environmental impact of companies in more than just annual “Doing Well By Doing Good” roundups. In fact, the mainstream press will tire of ogling shiny tech startups and idolizing their newly-rich founders. We’ll see the launch of well-funded initiatives attempting to track the “true cost” of consumer goods and services, and rising support for triple-bottom line and B corps. And of course we’ll see politicians pick up the meme – particularly in Europe – appealing to voters by demanding businesses become true citizens of our society. Oh, and our little startup, NewCo, will play a small but I hope important role in all this happening!

2. Mobile will finally mean more than apps. Last year I predicted that a new mobile startup will force a “new approach to mobile user interfaces.” I graded myself as half right – I think last year we laid the groundwork for that new approach, but no single mobile startup was responsible for what ultimately is an ecosystem shift. That shift will accelerate in 2016, and by year’s end, we’ll find ourselves interacting with our technology in new and far more “web like” ways – bouncing from link to link, service to service, much as we did on the original web, but with the power, context, and sensor-laden enablement of mobile apps and devices. This will be aided by the widespread adoption of deep links and services like Google’s App Streaming.

3. Twitter makes a comeback. Ouch, 2015 was not kind to Twitter, especially if you were a stockholder. But in 2016, Twitter will find a way back to mainstream relevance (and stock appreciation). How? Well, I’m threatening my own chances at getting this prediction right by being too specific, but here goes: Twitter will take Moments, which was not exactly a hit with the Twitterati (IE, folks like me), and begin to evolve it to a far more granular level. At present, Moments are very lowest common denominator – NFL highlights, reality TV roundups, you know, standard Yahoo home page crap. But if Twitter can take each of our interest graphs and create automated “Moments” that deliver true value, well, that’s something everyone would appreciate. The first version of Moments was built for those who don’t really use Twitter. The next rev will be for those that do – and that could change everything. Extra credit prediction: Twitter will tap crowd-sourced curators to create Moments, and that will create a new ecosystem of value for both the company and its constituents.

4. Adtech and the Internet of Things begins to merge. OK, this is utterly speculative, but it just makes sense to me. The Internet of Things requires several things to really take off: First, use cases where connecting the physical to the digital adds true value. We’ve now seen enough of these to believe that “every physical item will have a chip embedded in it.” Examples include sensors in jet engines (and just about everything else of industrial significance), exercise and health wearables, and home automation, to name but a few. But as I wrote earlier this year, we must not forget the Internet when we remember the things. And the Internet wants to connect all those things, and allow them to message to each other, run auctions where value is determined and exchanged, and then transact and account for it all based on a nearly impossible to comprehend amount of data and parameters.  Our current adtech system is perfectly engineered to do do that job. Sure, it currently slings trillions of ads around the Internet on a daily basis. And I’m not predicting that we’ll see ads on your Nest thermostat anytime soon. Instead, I’m suggesting that the underlying technology powering adtech is perfectly suited to execute the highly complicated and highly performant rules-based decisioning required for the Internet of Things to touch our lives on a regular basis. The groundwork for this combination will be laid in 2016. Related: We will most likely see a blockchain-based entrant in adtech in 2016, if we haven’t already (I couldn’t find one, but I may have missed it….).

5. Tesla’s Model 3 will garner more than 100,000 pre-orders, but Tesla will have a rough year of news. I’m as excited as anyone about a $35,000 all electric car that has a range of 200 miles and a total cost of ownership well below your average mid-market sedan. And I’m guessing when Tesla opens pre-orders in March of 2016, more than 100,000 folks will get in line to reserve one. That’d be four times the pre orders for the Model X, but that car is priced four times as high. These pre-orders will drive Tesla’s stock to untold heights, but it’s not easy being Tesla, and the reality of building both the Model 3 and its gigafactory will force setbacks and delays, and the company will most likely have a volatile year of headlines.

6. Publishers and platforms come to terms. I like Fred’s prediction that there’ll be a reckoning between large publishers and social platforms, and that it will end badly for one or more publishers. But I’m more bullish on how publishers will leverage platforms, and in 2016, Medium, LinkedIn, and Facebook will all make strides in helping all publishers succeed – especially mid-sized ones. Twitter may as well, if the details in prediction #3 bears out.

7. Search has a dominant year, thanks in large part to voice and AI. In the past few years, search has fallen out of favor, as industry watchers focused on the shinier new social and mobile platforms, and pointed out that search is, at its core, the product of the PC-focused web. But I think we’re very close to an era of ambient intelligence, where the world becomes query-able. It’s now quite common to ask Siri, Google, Amazon’s Alexa, and Cortana just about anything and expect a decent response (my experience is that Google runs circles around Siri, but then again, I’ve never used Alexa or Cortana). And increasingly, search happens without a query – anticipating your needs before you even make them. If you count voice and contextual queries along with more traditional “type in” traffic, search volume will be way, way up in 2016. The only question is – can revenue models shift as quickly as use cases have?

8. Apple endures a boring year. Yes, those of you who know me well may think this is projected schadenfreude, but in fact, I think it has more to do with the laws of corporate gravity. Apple is the most highly valued company in the world, and therefore has almost unmanageable expectations to meet. With the Watch and Apple Pay already in market, most folks expect a slew of incrementalism from the company in 2016 – updated models and software versions, but short of yet another iPhone folks feel obliged to purchase, there’ll be nothing spectacular. I don’t think folks will be calling for Tim Cook’s head, but many will wonder if Apple is meandering its way toward a boring, profit-milking middle age.

9. Microsoft and Google get serious about hardware. Microsoft has already committed to its well-regarded Surface line, and Google has been dabbling with hardware with what have essentially been limited-run, high-end products in the Chromebook Pixel and Nexus line of smart phones. But the benefits of tightly integrated hardware and software experiences will prove too tempting to both companies, and I expect them to expand their offerings in 2016.

10. Medium has a breakout year. I’ve been watching the Medium platform closely ever since it launched, and I think 2016 will be the year Medium breaks into the world’s consciousness in a big way. Key to this happening: A native revenue model that allows publishers to really leverage the platform, and a tightly integrated loop of product development that makes reading Medium feel like reading your own, intelligently curated but still serendipitous personal magazine. Expect a slew of notable publication launches on Medium, as well as a growing number of “traditional” publishers who commit resources to the platform.

11. China goes shopping. It didn’t really happen this year, did it? We all expected Alibaba et al to start snapping up US-based companies, but perhaps valuations were simply too high. But in 2016, highly capitalized consumer and enterprise companies with large customer bases will start to look for exits, and Chinese companies eager for a foothold in the US will start to open their wallets.

12. Sports unbundle. The one thing keeping me from abandoning cable altogether is watching broadcasts of my beloved Giant’s home games. That’s pretty much it. I know it, Comcast knows it, the Giants and the MLB know it…and finally, I’ll be able to buy home games digitally. Most likely they’ll be offered a la carte, at a ridiculous markup, but from that toehold will come the eventual demise of the cable bundle altogether. Fear not for Comcast’s margins, however, because by 2017, Comcast will have become a major streaming competitor in its own right. But that’s a prediction for another year.

Well, that’s a dozen, and while I could go on, I probably shouldn’t. And yes, I didn’t talk about VR (everyone else has already said it’s overhyped), or AI (it’ll be the talk of the year to be sure), and I held back from predicting any major Facebook news. Time will tell if I missed the boat there, but in the meantime, let me know what you think, and point me to your favorite predictions for the new year as well. Have a great 2016, everyone!

Follow my work at NewCo with our daily newsletter here

Related:

Predictions 2015

2015: How I Did

Predictions 2014

2014: How I Did

Predictions 2013

2013: How I Did

Predictions 2012

2012: How I Did

 

 

 

 

 

  • Content Marquee

Written First On Medium. Discuss.

By - October 26, 2015
Couple Holding Hands at Sea Sunset

Image Credit Arch Cape Inn

So I had a thought about the state of the publishing world, specifically that part of it that we’d call blogging(1). And it struck me.

Why haven’t we made our own Medium? No, wait, that doesn’t quite sound right. Medium is awesome, and in fact I am writing this post in (on?!) Medium. Historical note: This may well be the first time I’ve written the first draft of a post in Medium. So my beef isn’t with Medium, rather, it’s with the blogging ecosystem’s inability to create something that embraces what Medium teaches us.

It’s not like the pieces weren’t (aren’t?) there. Thousands of superb writers — tellers of tales, diviners of insight, entertainers, jesters, fools (who can stillwrite). And it’s not for lack of code — we’ve got a fucking army working on that. Perhaps — is it a lack of common vision? Did we need Medium to Show Us The Way?

As others have pointed out, Medium is simply awesome, but it hasn’t embraced several ideas core to the culture of blogging. For example, most authors don’t have control of their own domain, though you can now create a “vanity” domain, a commendable move to be sure. However, if you want to add anything to your site — you know, put some lights on the porch, maybe add a bathroom to the place — that’s not going to happen. Yet.

Similarly, an author can’t easily add advertising — or any other third party code that is prevalent in the open web, though Ev told me a few weeks agothey are working on the advertising solution in earnest. Again, a good thing. But most likely, it’ll be a controlled, platform approach with limited APIs. And if I were running Medium, I’d do exactly the same thing, so again, my beef is not with Medium.

But what if blogging evolved more rapidly — or perhaps, in a more focused way? I mean, shouldn’t this aggregated highlight feature be all over the blogosphere? Or this kind of commenting? Sure, I can install plugins that approximate the same thing, but…they are not universally used, they don’t share a common social behavior. (Not to mention, installing this shit is a huge PITA).

Imagine if we had that highlights feature as standard issue over in the blogosphere? I mean, we had comments as standard issue … why not this? Lordy, how cool would that be? Knowing us, we’d turn it into currency driving a magical gift economy, the kind we had back when this all started. It’s that magic that drove blogging’s emergence — and we’ve lost it along the way. I don’t blame social networks or Medium or Apple for this. I think we’ve failed to imagine another way.

We stood by and watched our beloved trackbacks — those deeply meaningful handshakes from one mind to another — deprecate and eventually disappear from our sites(2). And then we let the comments fade — too many trolls, at first, and that fucking spam…it was too much work. Platforms emerged to address the worst of it, but with those platforms came their imperative — we’ve got to make a business of this. If you guys aren’t going to do it, we’ll do it for you, OK? The deal was clear: This is free for you to use, but we’re going to ferry wheelbarrows of data out in return. OK?

Turns out, those wheelbarrows of data were rolling off our sites with every javascripted pixel we dropped onto our site. Sharing buttons? Check. Ads?Checkmate!(3)

OK. And then the comments went away. Once again, I do not blame the data vacuumers, the marketing ecosystem, the struggling independent publisher just using the best tools available to them at the time. Nope. I bemoan our collective imagination.

And Google noticed the spam and deprecation of true intent, and Google began to send attention other places, increasingly (and again, defensibly) to their own shit. But that’s another post, one I am sure I wrote years ago (but can’t quite find since I’m not in the WordPress backend. A bit of micro meta, that.)

So trackbacks went away, then comments, and then…we lost the culture of response(4). When this all got started, someone would write a superlative post, perhaps a controversial post, and then as if on cue, a few thoughtful responses would emerge, a volley might ensue, and behold: a living debate in considered prose watched by thousands. But the mechanism supporting that intellectual sport — that first synapse-jumping trackback, the resulting attention and commentary — collapsed, and with it went the flower that was a new kind of public debate.

And sure, we’ve rebuilt parts of the things we’ve lost, in Twitter, via Facebook, in flashes of reddit brilliance, with blogging pillars yet lost(5)…and now and most promisingly with Medium. But damn, it doesn’t quite feel right yet, does it?

I’m a big fan of the Reese’s Peanut Butter Cup — take your chocolate, pour it over my peanut butter, and — yes please, may I have another?

So I guess I’m asking that someone toss the wooly peanut buttery world of WordPress and the damn-near-perfect yet somewhat-lacking-in-connective-tissue chocolate world of Medium into a Blendtec Stealth and give us that sweet and savory goodness we so badly crave? Pretty please?(6)

— –

(Thanks to Barcelona for this rant)

(1) Yes, we all can pause for the obligatory and derisory images of a dated epoch now muddling through its senescence. There, now let’s continue. (2) I mean, WTF? The first Google response for “trackback” is the Wikipedia page?! (3) Yes, I am fully aware of my own role in this part of the story. For the record, I’m a huge fan of marketing as part of the ecosystem. Duh. But the strengths of the open web are also its weaknesses. I am arguing we’ve forgotten to tend to the strengths. (4) I read several really good related pieces— on Medium! —  which informed my thinking here, and this post is in essence a response to them. But I can’t fucking find them, and I can’t figure out how to see what I’ve read on Medium or even what I’ve recommended. I am sure it’s in here, I just can’t find it. (5)Hell, even in a search for “AVC,” Fred’s site comes in third to Twitter and Antelope Valley College now.

(6)OK, now I have to cross post this to Searchblog. Weird.

Do It Right. Not Fast. Right.

By - September 30, 2015

421423586231undo-button

(Cross posted to LI and Medium. Cuz that’s how we roll these days)

If you’ve never blown it big time using email — you will.

I have several times — in fact, I just did it earlier this evening. And gaaaah!, I wish technology had an answer for the clear and present danger that is myself, rushing through an afternoon, trying to GSD and hit inbox zero. Then again, life does have an answer: SLOW. THE F*CK. DOWN.

Allow me to explain. Earlier today I got an email newsletter from an organization that is doing a NewCo session next week. I noticed that while the newsletter was promoting all manner of things, it didn’t mention its own NewCo session — even though the contents of the newsletter were all about upcoming events and other goings on that might be of interest to the intended audience.

A bit miffed, I forwarded said newsletter to my team, asking in rather frank terms why our partner wasn’t promoting its own session in its main communications outlet. A typically frank back and forth ensued, ending with my decision to forward the offending newsletter to folks I knew at the organization, with a polite top note enquiring if they might include mention of their session in a subsequent missive.

If you’ve made the same mistake as me, you know what happened next.

Yep, I forwarded the email with all of the frank back and forth between my team included.

Holy f*ckin’ mother of christ I am such a huge assh*le. That was my first response. Second response? “Wait, isn’t there a way to unsend this?” Third response. “Oh sh*t, I have to change settings and it only works within 30 seconds and sh*t it’s already been longer than that.” Fourth response? A servile, lame-ass apology to the (most likely forever offended) parties involved.

Fifth response? Write this post. Reminding all of us to- slow down. The goal is not to get shit done. The goal is to get it done right.

It’s Time to Flip the Bit on Publishing and Data

By - September 27, 2015

adblock-plus(image BI)

My god, do we like to talk about ourselves.

That’s my takeaway from the recent algae-bloom of writing around ad blocking and fraud lately – most of it tinged with apocalyptic implications for the future of independent publishing. I’ve hung back from writing because I’ve been so busy *reading* everything – like this piece by Anil. Or this “expose” by Bloomberg (honestly, this is not a new story!). Or this one by Jason, this by Frederic, this by Doc, or this by Cory.

Cory calls for a new model, and I think he’s right. I’ve been thinking and talking and writing about new models in publishing and media for a good long time. Perhaps now is the time to revive an idea I’ve been on about for years.

Because as Tim points out, quoting Schrage, great new companies aren’t created by assuming that we keep doing things the way they’ve always been done. They instead demand that we alter our behavior entirely, because the benefit is so great. As Ben put it, publishers need to rethink their business models. In a private post on his daily (subscription-based) newsletter, Ben further points out that the iPhone didn’t succeed because it followed the generally acceptable rules of Clayton Christensen’s famous disruption thesis, it worked precisely because it didn’t. It created so much value that people were willing to change their behavior, from using a phone to call and text people, to using it to connect them to the Internet and its extraordinarily broad set of services. Same goes for Facebook, Uber, and many other “unicorns” that have forced new behaviors (sharing all our data into a central platform, shifting from flagging a cab to pushing a button, etc.).

So this begs the question: What is the new set of behaviors consumers might adopt with regard to publishing? And what might be the 10x shift in value creation that augurs such a shift? Might there be an antlered pony buried within all this fraud and ad-blocking horseshit?

First the (somewhat easier) bit – the new set of behaviors. To me this has to do with the relationship of publisher and reader/audience member. The rise of free content on the Web has broken what was previously a clear one-to-one relationship: reader subscribed to a periodical, delivering demographic and geographic data in the process. Now, that relationship has been re-aggregated through a crazy quilt of advertising technologies seeking to identify who you are and what you might want. This “advertising industrial complex” has led to the conditions we all now lament – hundreds of data-sucking ad trackers on most web pages, slow load times, crappy ads, and massive fraud which takes advantage of a disjointed and leaky ecosystem.

But what if user behavior actually reverted to a direct, one to one relationship between publisher and reader? What if that data that advertisers so openly covet – your name, age, zip code, interests, etc. – was held by the *reader*, instead of the publisher or the adtech industry? And what if, upon coming to a new site for the first time, that site simply asked “will you please share your data with us, so we may serve you the best and most appropriate ads?” If you say no, perhaps the content doesn’t load. But why say no – if you’re in control and the data will only make your life better?

I’ve argued for just such a model in We Have Yet to Clothe Ourselves In Data. We Will. The bit that has to flip is summarized in this quote:

We lack an ecosystem that encourages innovation in data use, because the major platforms hoard our data. This is retarded, in the nominal/verb sense of the word. Facebook’s picture of me is quite different from Google’s, Twitter’s, Apple’s, or Acxiom’s*. Imagine what might happen if I, as the co-creator of all that data, could share it all with various third parties that I trusted? Imagine further if I could mash it up with other data entities – be they friends of mine, bands I like, or even brands?

It’s insane that as consumers we outsource our data wardrobe to Facebook, Apple, Google, and the hot mess that is the adtech industry. The consumer behavior I believe will change our world, and by extension the economics of publishing and advertising, is a shift in control of our own data from third party platforms to ourselves as the platform. Put in Internet terms, from the server to the node (we’re the nodes). If this happens, all manner of innovation and efficiency will erupt.

But the rub lies in the second part of this innovation equation: What will be the astonishing, disruptive force that drives such a shift? What is the Uber or Facebook or iPhone that will drive this shift in data use behavior?

God, if I knew that…I’d start that company. But I sense when it does break out (and I am certain it will), it will seem hugely obvious. How frustrating to not know what it is. Like a vivid dream lost seconds after waking, it haunts me every day. Any ideas?!

Branch Deepviews: Routing Around The Damage of Apps and App Stores

By - August 14, 2015

Over and over again, the press and pundits are declaring the death of the “web we once knew.” And despite having solid proof to the contrary, I’ve always responded that the web will never die, though it may well challenge our thinking as it evolves into entirely new form(s). In short, I can’t imagine a world where we can’t link from one object of value to another, seamlessly and without gatekeepers. It’s such a fundamental and obvious value-creation platform, if something ever impeded its continued creation, the world would simply do what the Internet has always done: Identify that impedance as damage, and route around it.

Inspired in part by an accretion of that impedance in the form of Apple and Facebook, a  year or so ago I went on something of a mobile walkabout. I wanted to understand if the “web I loved” was truly on its way out. I met some interesting new companies along the way, and in particular got excited about the promise of “deep linking” in mobile apps, which was a fairly new trend back then. Indeed, I predicted we were close to a “quickening” in mobile, where the value of links between applications and the broader Internet would tip, opening up the path for a new kind of mobile web.

This past Wednesday, Branch Metrics, one of the companies I met along my walkabout, made what seemed to be a relatively mundane announcement. It was summarily written up in TechCrunch, but got little press beyond that. So why did it rip up the charts on Product Hunt, garnering more upvotes than any other tech product that day? Well, for one, the product solves a very real problem for developers who haven’t built a mobile web version of their application. Here’s the issue: Say you’re browsing the web (IE, using a browser), and encounter a link to neat feature inside a spiffy new app. If you haven’t already installed the app, that link would take you to the app store, where you’d have to download the app. Once you’ve waited for that download (and that can take a while), you would then need to open the app, find the place where the original link was pointing to, and continue in your journey.

Needless to say, this is not an experience that converts many new customers.

Branch Metric’s original product allowed developers to turn that original link into a “deep link” that carried the original destination (that neat feature inside the spiffy app). This greatly increased conversion and usage of apps, and built a bridge between various flavors of the web (namely, mobile to mobile, mobile web to mobile web, PC web to mobile, etc.). To support all these new deep links, Branch stood up a robust infrastructure that, in essence, scaffolded all these different flavors of the web.

Branch’s new announcement took their original idea an important step further. Called Branch Deepviews, they offer a way for developers lacking a mobile web version of their app to create a web-ready preview of their apps’ content on the fly. In essence, Branch has found a way to route around the damage of the app store, and in the process is creating a bridge between the mobile web, the PC web, and mobile applications. Standing up your Deepviews and your Branch links is free – a fact that is certainly not hurting adoption of Branch’s solutions.

Back in February I noticed that Branch had raised a healthy $15 million Series A round. That’s a lot of money for a lean mobile development firm, but I didn’t think much of it at the time. Now I see what the cash is for: Branch is making a serious web infrastructure play – one that reminds me of another early stage firm with a big vision and a major infrastructure-based solution.

That firm was Google. Fifteen or so years ago, Google was a small company struggling to create a scaffolding around the Internet that allowed it to scale its search product. In order to do so, it landed on a insane-sounding solution: Take a copy of the entire world wide web and place it in computer memory across Google’s own infrastructure. By the year 2000, Google was seeing about 60 million searches a day. Today, Branch is already driving 100 million unique individuals a day across its servers.

I may be pushing the speculative edge of reason by making this comparison, but far more improbable things have happened in our industry. And that’s why I think Branch Metrics is a company to watch.  They’ve identified app stores and silo’d mobile applications as damage, and they’re building the infrastructure our industry needs to route around it. I sense the tipping point is nigh.

NB: I am an advisor to Wrap, another promising company in this space, and one I hope to write about soon. 

Information Transparency & The “True Cost” Calculator

By - August 12, 2015
View from Bolinas

The view from Bolinas

It’s been so long since I’ve written here, and I’ve missed it terribly. As startups tend to do, NewCo has taken over most of my waking hours. So I thought I’d just sit and write for a spell, even if what comes out isn’t fully baked. I’m on vacation in Bolinas, an intentionally scruffy sidebar of a town 25 miles north of San Francisco. Legend has it the locals regularly take down signs pointing the way to this place, hoping to keep folks like me away.

Truth is, I came here hoping for a bit of down time so I could write again. I can’t decide if my lapse in writing is due entirely to my focus on NewCo, or perhaps because the medium of blogging just doesn’t call to me the way it once did. So I wanted to get up early each morning this week and get at least one thing down – like Fred does so regularly. However, I’ve clearly built up quite a sleep debt over the past six months, and this week my body won’t let me get up before 9. But I’ve been at it now for two days, and the result is below.

This particular post – on information transparency and the true cost of things – has been rolling around in my head since February, when I attended Walmart’s annual sustainability meeting. Walmart has made some very deep commitments to changing its impact on both the environment and society – its three stated, measured, and Wall Street-reported goals are to be 100% driven by renewable energy, to create zero waste, and to “sell products that sustain people and the environment.” These are not small goals, and when a company as large as Walmart leans into achieving them (and reporting its progress to Wall St. each year), it’s worth finding out more. Turns out, there’s a lot going on, and potential for a lot more.

During my trip to Walmart’s Silicon Valley outpost this past February, I met Doug McMillon, Walmart’s CEO. I also learned about the “long term capitalism” movement, a nascent but important idea championed by McMillon, among others. At its core, long term capitalism is attempting to center the value creation role of business from “shareholder profit” to “societal benefit.” As with anything worthy, it’s complex, fraught, and difficult to unpack.

Just what is “societal benefit”? How do we measure it? Who decides? These questions are mostly open at this point. However, one thing is clear: Business as usual has created a mess of things. Most scientists believe our economic activity has produced an unsustainable tax on our global climate. We have to tune our economic engines toward sustainability. But how? I believe our industry – steeped in collecting, creating, and understanding data, can help. But more on that later.

First, it turns out that Walmart – and many other large companies – are already working to find answers. Walmart is a massive platform, and when it tells its vast network of suppliers that it wants renewable energy, sustainable products, and zero waste in its supply chain, entire economic sectors are effected. I had no idea this was happening, and found it both laudable and worth celebrating – we all need to encourage more of this kind of behavior.

In his letter opening Walmart’s 2015 Sustainability Report, McMillion introduces the idea of “True Cost,” and states:

Traditional costs include expenses like supplies, energy and packaging. But the net true cost considers issues such as waste-to-landfill, greenhouse gas emissions, economic mobility, worker safety and food safety. These are all examples of the effects production may have on the environment, in local communities, or on the people who grow and make what we sell. We believe a business should strive for not just the lowest prices, but the lowest true cost for all. Low prices benefit customers, but low true costs benefit everyone. To do this, we can’t sit on the sidelines until after a product is made. Walmart’s role is unique. We have a large presence in the world, and with that presence comes great opportunity to change how business is done. In addition to tackling social and environmental issues in our own operations, we need to actively engage in and reshape the systems in which we work.

By doing the right thing, a business is setting itself up for a solid and successful future. And by focusing not just on price – but on “cost” as well – a business is tackling social and environmental sustainability at the root. That’s what you’ll see us lean into further this year and in the years ahead.

Sustainability Leader badgeAt the February meeting, Brian Monahan, a friend, co-founder of NewCo, and leader in Walmart’s e-commerce division announced a new Walmart initiative. Called the Sustainability Leaders Shop, it’s a special area of the Walmart.com site featuring suppliers who had earned a badge which helps shoppers identify the vendor as a leader in sustainable practices in their given industry. The idea is simple but powerful: Walmart is helping shoppers identify and reward vendors with industry leading sustainability practices.

Of course, this made me wonder if such a badge is truly valuable for anything more than bragging rights. I mean, won’t shoppers – especially Walmart shoppers, who come there to save money – simply purchase the cheapest brand, regardless of sustainability badges? That certainly seems likely. Until a market truly values sustainability over price, the lowest price will win.

Walmart’s mission of “saving money, living better” has been a driver of the company’s culture for more than sixty years. Its DNA is all about price: The lowest price anywhere, all the time. Over the decades Walmart has earned a reputation as a cost extraction machine – and that reputation is in full conflict with the sustainability goals the company now espouses.

But what would we have Walmart do? Nothing? It strikes me that Walmart has put a very large stake in the ground, and it’s up to the market to both celebrate that stake, and push to make it even more impactful. That’s at the heart of what NewCo is about – in particular our media arm, which will be launching over the next six months. The story of a giant company trying to change for the better is not only fascinating, it’s also urgent. As goes Walmart, it turns out, so goes most of the world’s grocery and retail businesses. And those businesses in turn drive a significant amount of our world’s economic practices.

You’re used to reading about Google, Amazon, and Facebook on this site, and those of you who’ve made it this far must be wondering how on earth Walmart’s challenges relate to the things I usually cover. Well, it strikes me we’ve got a massive, and massively interesting, information problem on our hands.

In short: What if we could engineer a platform that reported True Cost for everything Walmart sells? Put another way, what if every single product had not just a monetary price and possibly a Sustainability Leader badge, but also an inherent score based on “net true cost”? Wouldn’t that be cool?

Creating such a platform would have been impossible ten years ago, which is when I first started thinking about this idea (The Search, p. 178). But with smartphones, computer vision, and ubiquitous connectivity, it’s not hard to imagine an information service that becomes a nexus for understanding a given product beyond its price tag. It could work a lot like Delectable does for wine – take a picture of the product, and up comes a profile of the product’s impact across the environment, society, and so on. From The Search:

What might be the effects of such a system coming to fruition? For one, markets would have to compete far more on…factors unrelated to price. And vendors of products that have been made in third-world sweatshops, or in factories that over pollute, or vendors that support causes some consumers do not wish to support, would be called out in a far more transparent fashion. Refusal to participate in such a system would mean that vendors or merchants had something to hide, and so the system could be a major force for good in the global economy, forcing transparency and accountability into a system that has habitually hidden the process of how products are made, transported, marketed, and sold from the consumer.

The world needs information transparency in consumer goods. There are many startups doing what might be considered point solutions in the space – The Honest Company in baby goods, Bos Creek for meats, Zero Footprint in HR, Conscious Box in subscription commerce. But there’s not liquidity of good information in the marketplace – and liquidity drives innovation and value creation (Google was built on the liquidity of link information around the web). If it was as easy to understand a product’s overall impact on the world as it is to understand its price in dollars, consumers would be moved to consider more than price when they made a purchase. Millennials, in particular, have shown a deep desire to support brands that have a net positive impact on the world.

I often write speculatively here – and I suppose that’s what I’m doing right now. I don’t know how such a system might tip into existence, but I sense when large companies like Walmart start to talk about “net true cost” and set ambitious goals that can move markets, we’re close to such a tip. I’d love to hear from you about how we might get such a system implemented. I’m guessing any number of startups, academics, and BigCos are already working on the problem. The world needs a True Cost calculator – and gathering, cleansing, and delivering the data to power such a calculator is the kind of massive problem/opportunity that creates companies like Google and Facebook. It’s time to get this done.

Why Does Silicon Valley Like “Silicon Valley” So Much?

By - June 15, 2015

silicon-valley

 

HBO’s Silicon Valley, which concluded its second season last night, is an unmitigated hit amongst the Valley folk I’ve come to know and respect. As someone who’s lived variations of the show’s comedically dramatized plotlines – investor takeovers, company-threatening lawsuits, sexist bro cultures, etc. – it makes me cringe, chortle, and engage – something precious few shows can reliably accomplish regardless of their subject matter.

This isn’t Hollywood’s first attempt at plating the Valley’s culture and serving it back to us – technology plays an integral role in nearly every piece of primetime “competence porn” – CSI, Law & Order, Scorpion, whatever. There’s always a team of nerds who work with the good-looking people to leverage data and surveillance, and for reasons that should spur any number of graduate theses, Hollywood has adopted a rather borderline approach to civil liberties so it can deliver the bad guy in the end.

But Silicon Valley is the first show that bothered to look under the hood of what we’re making here, and understand it well enough to parody it back to us. For that we’re deeply grateful. Sure, you can pick apart just about everything in the show, but the truth is, it resonates, because it gets the core narrative right: The team making Piped Piper have their hearts in the right place, the villains remind us of the asshats we’ve all dealt with, and the highs and the lows mirror our own struggles with company creation, capital raising, and team and product building.

For the first time, the Valley has a show worthy of its cultural throw weight. And that makes us all feel a bit more understood, and a little more validated. I’m looking forward to Season Three. I hope the guys all move to the city in this next chapter…because that’s where the story is heading after all, right?

 

Uber, The Rashomon.

By - April 26, 2015

Uber Women Promo

Our industry loves a rashomon, and in the past year or two, our collective subject of debate has been Uber. Perhaps the fastest growing company in history (its numbers aren’t public, but we’ll get to some estimates shortly), Uber has become a vector for some of the most wide-ranging arguments I’ve ever had regarding the tech industry’s impact on society at large.

It’s not that Google, Facebook, Apple, or Microsoft didn’t evoke great debate, but all those companies came of age in an era where tech was still relegated to a sideshow in the broader cultural conversation. Microsoft was taking over the computer industry in the 1990s, Google the Internet in the early 2000s, Facebook and Apple the mobile and social world in the late 2000s. But Uber? Uber is about a very real and entirely new approach to our economy, a stand in for the wealth divide festering in the US and beyond, an existential rorschach testing your values around the role of government, the social contract, and the kind of society we want to become.

When an Uber glides to its appointed pickup point, what do we see? Do we see an innovator hastening the inexorable shift to a new information-based economy? Or an arrogant bully using cheap capital, greed, and a dangerous, misogynist culture of convenience to consolidate a trillion dollar market?

Or do we see both?

Yes — that’s a cop out, but it’s also an honest answer. I know people who work at Uber, and I know some of Uber’s investors as well. They are in general a well intentioned group — and many of them have reservations about Uber’s unbridled success and its mixed reputation.

Uber’s success is breathtaking. Consider: Uber’s most recent round valued the company at over $41 billion — $15 billion more than Google’s initial public market cap of $26.4 billion. At a conference I attended last month, an Uber executive mentioned the company was clocking more than one million rides each and every day. If you (conservatively) estimate each ride at $10, that’d be gross revenue of $10mm a day, or $3.65 billion a year. Uber takes roughly a quarter of that revenue (20% is the widely reported number, but when I ask drivers, they tell me it’s 25–28%), or just under a billion dollars. And their costs are….well, assume about 2,000 employees (I’ve heard estimates of 1200 to 2500), for $250mm or so in labor costs. I’m pretty sure they’re not spending another $750mm on marketing and platform costs. So the company is most likely quite profitable already.

And my figures are conservative. Business Insider claims the company is on track to do $10 billion in gross revenue this year, and CEO Travis Kalanick last year claimed revenue is doubling every six months. In five years, Uber has expanded to 57 countries. So, yes, this company is astonishingly successful.

And yet…I’ve not met a single person in this industry who doesn’t express reservations about Uber. Certainly the company stepped in it terribly with the whole Lacy debacle, but the ambivalence goes deeper still. I’m sure pure Uber defenders exist, but the truth is, most of us are worried about the sheer expression of capitalistic force that the company represents. Privately, many are heartened by the regulatory counterforces that are stemming the company’s march through worldwide markets — Germany, Holland, India, Korea, Canada, Spain, France, New Zealand, and many other countries have banned Uber’s services either nationally, or through local city regulations.

Uber is the poster child for our global conversation about the role of work in our society, and about the kind of company we want to create, work at, and celebrate. And that conversation is deeply political and cultural in nature. On the one hand, the “1099 Economy” is providing hundreds of thousands of flexible, living wage jobs for those who might otherwise be marginalized or underpaid. On the other, it represents the systemic dismantling of our labor laws by rapacious, profit seeking monopolists.

If you want to hear an unalloyed economic takedown of Uber, head over to Robert Reich’s blog. And if you want to hear a reasoned defense of the company as an innovator, read what Suster has to say. But anyone who read Sarah Lacy’s passionate story has to wonder — if we didn’t have Uber now, wouldn’t the Valley just end up creating it? Certainly that’s Lacy’s conclusion — Uber is the collective creation of the Valley’s deep arrogance, its heartless celebration of high valuations and killer exits, and its male-dominated, aggressive philosophy of “breaking things fast” and “asking for forgiveness rather than permission.”

Put another way, Uber feels inevitable — a uniquely of-the-moment company, a mirror held up to the Valley’s aggregate psyche. And as we all look into that mirror, we are both fascinated and appalled.

All of this was at front of mind a month ago when an email from a site called FounderDating popped into my inbox. FounderDating is a LinkedIn-like service that connects entrepreneurs, and it sports a lively Quora-like Q&A forum. When interesting new threads emerge, the service notifies you. “Is Uber A Social Impact company?” was the question of the day, and it immediately sparked a strong debate, as you might expect. Lydia Eager, the thread’s originator, opened with this:

A lot of people love to hate uber because of their aggressive tactics, but the fact of the matter is that they are creating 20K new driver jobs/month and the median uberX driver income in NYC is $90K/year. Feels to me like they do way more good than harm and I’d consider them a social impact company. They are having a much bigger impact than say a non-profit trying to create jobs.

Do you have to have set out to have a major social mission to be considered a social impact company?

From there a diverse group of folks, myself included, chimed in with 50 or so thoughtful replies, touching on the importance of purpose- and mission-driven business, the role Uber plays in destroying living-wage jobs in the taxi and livery businesses, the actual economics of driving for Uber and similar businesses, the positive impact Uber has on carbon emissions, congestion, and drunk driving, the inevitable future where driverless cars and automation make workers irrelevant, the positive competitive response Uber has created in the taxi business (better customer service, competing apps, etc), stories of questionable competitive business practices, stories of rape and kidnapping (on both sides — taxies and Uber), debate over the meaning of “social impact” at its core, debate over the role of local and national regulation, debate over consolidation of power and money in markets and society, debate over libertarian political philosophy, and much, much more.

I hear these questions debated every time Uber comes up at a party, an industry event, or just between friends shooting the breeze. Back in 2013, when we were starting NewCo, we had the same debate when we were considering which companies to invite to our first full-fledged NewCo festival in San Francisco. We asked ourselves whether Uber was really a NewCo — an engine of positive change in our society. We couldn’t make up our mind and ended up kicking the can down the road. This year, we have to once again tackle the question. And I’m still not sure where we’ll land.

Like it or not, Uber is now our rashomon for understanding the impact technology is having on our culture. The company is showing signs of “growing up” — as all fast-growing tech companies do over time (you have to love Facebook shifting its motto from “Move fast and break things” to “Move fast …with stable infrastructure”). Uber’s stance to local regulators has shifted from a siege mentality to one of engagement (necessarily, I’m sure). Its CEO (and the offending exec) apologized, sort of, to Lacy, and has shifted its public voice to highlight its positive impact on the world — the first image on its site today is of a woman, with the headline “Her Turn to Earn — Creating 1,000,000 jobs for women by 2020.”

Is this all just calculated PR spin, or might it represent a real shift in the company’s culture? I think I know where Lacy stands on this one — she was personally targeted by a senior Uber executive, and she’s in no mood to give the company a second chance. But for most of the rest of us, the ambivalence — and the broader debate — continues. I personally believe that companies can change over time — Walmart, Unilever, and many others are now champions of sustainability — yet one could reasonably argue they played huge roles in creating the unsustainable world in which we currently live. But does that mean we shouldn’t celebrate and encourage their corporate change of heart?

If we dismiss these glimmerings of change as mere greenwashing, we are handing corporations an excuse to continue past practices. Instead, we should hold them accountable. For Uber — and all of us — that journey has just begun.

Integrations (and Metaservices) For The Win

By - April 04, 2015
GBoard

A GeckoBoard sample dashboard, integrating half a dozen separate data services.

What makes for a truly NewCo business? I’ve been giving this question a lot of thought the past six or so months, leading to posts like Maybe The Best Way To Change the World Is To Start a CompanyLiving Systems and The Information First Company, What Makes a NewCo, and posts on NewCos like MetroMile and Jack.

But lately I’ve noticed a strong theme running through a number of interesting and successful businesses: Integrations. From Acxiom and sovrn (where I am a board member) to Slack, Gecko and Zapier (where I am a happy customer), these companies are thriving because they have built a platform based on the integration of many different products and services. At NewCo, we call this “being platform’d” – an inelegant but apt descriptor.

Four years ago I wrote  File Under: Metaservices, The Rise Of, in which I posed a problem:

…heavy users of the web depend on scores – sometimes hundreds – of services, all of which work wonderfully for their particular purpose (eBay for auctions, Google for search, OpenTable for restaurant reservations, etc). But these services simply don’t communicate with each other, nor collaborate in a fashion that creates a robust or evolving ecosystem.

The rise of the app economy exacerbates the problem – most apps live in their own closed world, sharing data sparingly, if at all.

In 2015, the problem is coming to a head, and there are huge, proven opportunities for companies willing to do the hard work of managing complex data and services integrations. In fact, I’d go so far as to claim that in the NewCo economy, an unfair advantage will accrue to those businesses that excel at delivering seamless, effective integrations of complex services.

It’s already starting to happen. Why, for example, has Slack taken off so quickly, when there were already a raft of seemingly successful collaboration tools (Yammer, Basecamp, HipChat, etc)? As a user of Slack, my answer is simple: Slack has a super elegant approach to integrations. It “just works” with Google Docs, YouTube, Trello, MailChimp,  and about 100 other services. It creates an intelligent “metaservice” for effective group collaboration outside of its core use case. It’s not easy to make these integrations seem effortless to the consumer, but Slack got it right.

Another example can be found in what’s known as the programmatic or adtech industry. For the past four years I’ve been very close to this industry, steering FM into the purchase of an at scale programmatic advertising business (Lijit, now called sovrn), and serving on the board of Acxiom, a public data and marketing services company. With sovrn, we’ve noticed that the hardest, but most rewarding work comes in integrating new partners onto our platform. We’ve got nearly 100 integrations now, with several more coming online each quarter. These are not easy to pull off, each takes from three to six months to get done. It’s messy and hand-crafted, and it involves human to human negotiations all along the way. But once done, adtech integrations open a flood of data back and forth between partners, and when that happens, money gets made.

Adtech and data businesses that have acquired a lot of integrations, like Acxiom, AppNexus, OpenX, and sovrn, are valuable precisely because those integrations take a lot of time. If a large, well heeled tech business wanted to enter the adtech industry, they’d have to buy their way in. Doing 40-50 integrations from scratch would take years. It’s one of the reasons Facebook bought LiveRail, Twitter bought MoPub, and Apple bought Quattro.

Another class of integrators can be found in companies like Zapier, which is playing directly in the mobile app data market (and as such, is a direct response to the problem I posited back in 2011). Zapier gives developers the ability to tie together all their siloed apps, and to manipulate that data on one creative canvas. Another example is GeckoBoard, which at present is mainly a dashboard for disparate and discrete information sources, but even that limited functionality delivers a “holy shit!” set of insights.

Once I started noticing these integration-driven businesses, I saw them everywhere. Sure, Facebook and Google (and all the platforms) have been integrators forever, but they fail to solve more specific and/or bespoke problems inherent to individual use cases. Across online marketing, for example, tools like AppBoy, ZenDesk, and MailChimp lead with their metaservice-based integrative approach.  So do hundreds more, in dozens of categories, far too many to mention here.

But I’d like to call the ball right now: Metaservices is here to stay, and the best and fastest integrators will win.

If you want to get inside great companies around the globe, come to a NewCo festival. Next up is New York, then Austin and Silicon Valley.

A Few Questions For Publishers Contemplating Facebook As A Platform

By - March 23, 2015

5921703288_2e6a0f4007_b

Well, it’s happening. According to no less authoritative source than The New York Times, The New York Times is preparing to plant a taproot right inside the highly walled garden that is Facebook.

As Times’ executives contemplate moving The Grey Lady squarely under the rather constrictive confines of Facebook’s terms of service, they may be comforting themselves with a few palliative pretty-much-truths:

  1. We may be putting our content on Facebook’s platform, but we’ll still have our presence on the open web, apps, and in print. We’re really just accessing a massive audience natively, in a way they want to consume our content. In our other products, we’ll still be in control (well, not so much with iOS but…).
  2. Really, Facebook is just another channel — like when Borders and Barnes & Noble consolidated the newsstand business. Facebook’s just a big newsstand where we have to have our product.
  3. We’re going to be among the initial few to do this, which gives us first mover’s advantage, and probably the best economics anyone will ever get given how strongly Facebook is wooing us.
  4. If it doesn’t work , we can always call it a grand experiment and move along, sort of like we did with AOL back in the day. Or Apple back when the Newsstand was a thing.

All kinda true, and compelling enough to “test,” which is how the article carefully positions the Times’ intentions. But as testing beings, here are a few questions any publisher should ask before dipping a taproot into Facebook’s carefully cultivated soils:

  • Do you have full and unfettered access to reader data? Will Facebook have access to your customer data?

A publisher lives and dies by its ability to maintain a strong connection to its readership. That means understanding how people use your product, so you can make it better. It means knowing who your customers are, so you can call them by name, make them offers, ask them questions, converse with them using sophisticated tools. Will Facebook offer the kind of tools the open web does?

  • Do you have full and unfettered control over your advertising relationships and data? Will Facebook have access to that data?

If Facebook is selling your advertising, or telling you how to sell your advertising, or dictating what your advertising has to look like, or has access to data about your customer data *and* your advertising, they have your jewels in their hands. I hope those are very soft hands.

  • Do you have certainty over the levers of circulation marketing, including the price of reader acquisition and engagement? 

Facebook’s record here ain’t exactly encouraging. Everyone knows that if you want to build audience on Facebook, you have to pay Facebook. Publishers have gotten pretty sophisticated at understanding customer acquisition costs, ROI, and the like. Will Facebook offer a consistent ecosystem here, or will the sands shift as the company ropes in your competitors, leverages “proprietary algorithms” to decide who sees what, then ultimately decides to get into your business in some way? If you want to read up on such a market, just ask Yelp how it feels about Google.

  • Do you have control over your core product, so you can craft your reader’s experience as an expression of your brand? 

I can’t really stress this one too much. I mean, what if a year in, you want to ask some of your Facebook readers to pay you, in exchange for less advertising (or none)? Do you have to ask permission? Wait, you agreed to not do that? Well why would any reader pay you on the open web if they can get it for free on Facebook? And what if you want to do something like Snowfall? Or what if you come up with a really neat widget that pulls in processed content from, say, Twitter and SnapChat? Will Facebook let you? They kinda sorta don’t like those companies, last I checked. My guess is they won’t like others down the road too.

  • Do you have any proof that publishers using another company’s proprietary platform have ever created a lasting and sustainable business? 

I guess I should have put this one first. There have been good exits for some publishers from platforms — a few of the MCNs on YouTube come to mind — but those were native video publishers who will all admit that they could never reach profitability on YouTube’ economics.

I can’t really think of any publisher who thrived on someone else’s platform, for the reasons I laid out above. Sure, a lot of apps have done well, but in the main they were either hit businesses (gaming) or free services that kept their customer and revenue models well away from Apple or Google’s grasp (everybody else ever).

Perhaps Facebook has addressed all these points with the Times and others — but the article certainly didn’t find evidence of that. And all of you other publishers should know how the playing field tilts before joining the game.

Which brings us to BuzzFeed, which has taken a delightfully inverse approach to platform economics — that is to say, it embraces the distribution of its content independent of its home base. Of course, it can do so because its core revenue model is native advertising content, which is distributed in the same fashion as original editorial content. This model suits BuzzFeed very, very well. I’m not sure it scales for many others.

So far, Facebook has not clipped BuzzFeed’s native advertising wings. Could it? Just ask Zynga.

Then again, and to be fair, I’m not privy to the conversations between the Times and Facebook. Regardless, were I a publisher, I’d sure like to know the answers to those questions above. If anyone gets some, do let us know?

(cross posted to Medium).