Every year, we update our decoding prism. This prism enable us, within the association, to decode faster by having a common referential and vocabulary.
As a reminder, in optics, a prism is a piece of glass shaped with a sharp angle, that diffracts light. With a prism, you realize that the light, which appears at first all-white, is a mix of all the colors of the rainbow. This is what we expect to do with our reading prism: decipher the new trends in multiple canals and recognize which usages they involve and how it could, or could not, transpose in your market.
8 paradigm shifts
A paradigm shift, is a mental change of perspective obtained by accepting a different point of view or by “changing glasses”. For a leader, a paradigm shift is considering a 180 degree change of his management principles: « You learned this and that at school and University, you put it into practice for 30 years and now, since we entered this new era, you might have to do a complete change of mind and habits.”
These paradigms are helpful to make you think differently and we will use them to put light on what we see during the year.
1. 8 technologies surf Moore’s Law
Mr. Moore, Intel’s boss in 1967, told his team of buyers to make long term contracts with their suppliers in which, every year, the components should be twice as powerful and twice cheaper. This empiric law applies well on average for Intel and in general in the field of electronics. Peter Diamandis and Ray Kurzweil from the Singularity University told us, 6 years ago, that there was not 1 … but 8 technologies surfing Moore’s Law: infinite computing, sensor, robotic, nano material, synthetic biology, digital medicine, AI and 3D printing.
From this list, in the last 3 to 4 years one could think that 3D printing was not eligible given the lack of progress observed in everyday life. But recently in Q2 2017, many players including HP announced major developments in 3D printing with print speeds increased by a hundred.
Furthermore, it seems obvious today that the batteries and photovoltaic panels should be added to the list … as illustrated below with the price decay curve of a battery.
This is why, in Australia, Elon Musk sold at a loss his first battery farm to help prevent electrical blackout. Elon has well integrated, unlike many of his skeptical commentators, that Moore’s Law progress will bring profitability some day.
· It is virtually impossible for our minds to grasp the reality that exponential phenomena are in constant acceleration. Reflecting this, a Chinese king who had rashly promised to double the number of grains of rice on each square of the 64 square chessboard after losing at chess, was unable to fulfill his promise instinctively measuring the consequences. (Legend of the Exchequer Sissa.)
· When we are dealing with phenomena that affect the very small, like the electrons, and can potentially reach mass markets, then at some point the technology will surf Moore’s law.
2. Mass Collaboration
Mass collaboration fuels the speed of innovation and feeds « Open Innovation » as well illustrated by the case Hyperloop.
Recently China, followed by India and Africa joined the global ecosystem of mass collaboration with global codes propagated by children. You will see in the chapter about India how, within 3 years, 600 million Indians will join this mass collaboration. And let us remember, « that man has genius only when he is 20 and is hungry »… which is certainly the case of the 600 million Indians who, until now, where outside the sharing economy and the knowledge economy and whose median age is 27… compared to us, Europeans, overfed, whose median age is now 42 years.
· Although the size of our intimate circle of friends and relatives does not change remaining at the average of 144 people, the speed to reach our third circle, which typically includes one million people, is at the origin of the acceleration of mass collaboration.
· It would be absurd today to forbid your employees to include, if necessary, their circle of personal friends in the solving of their professional problems.
3. Leap Frogging
Rifkin, a contemporary economist from Washington, who in particular advises the Nord-Pas-de-Calais’ region in its energy transition, found that for every major transition in economy, there is a new source of energy and a new source of information. For example for the smart grid, which is defined as the local exchange of low density energy, internet plays both these roles.
Elon Musk is implementing this with the Tesla car which is a step on the smart grid process: it takes « batteries on wheels » to exchange local energy including from home to work.
To shape his vision, he built:
· the GigaFactory in Nevada that produces batteries for the Tesla cars and for a 1 GWh energy storage unit in Australia to prevent electrical blackout.
· The « Tesla Solar Panels » that put on the market photovoltaic roof tiles. Of course wisemen today will say that they require more energy to manufacture than they produce… they simply forget that photovoltaic panels are also surfing Moore’s law…
Rifkin made a long plea for a fundamental change on intellectual property (IP) which, in our opinion too, is a brake on innovation. So far the transition to an IP open source world is not obvious. One of the few exceptions is Elon Musk who told his employees that the Tesla electric car patents would be in the public domain so that his engineers keep going ahead.
4. Disintermediation up to the Sharing Economy
Since 2011, the Sharing Economy models are implemented in the B2C as shown by Uber and Airbnb. In the B2B field, Factory as a Forest is a good exemple. What is, or is not a success, of the Sharing Economy is analysed in this book.
We will also put some light on the many local experiences where people do copy business models already proven but with a center of gravity not on dividends but on sharing.
· The Sharing Economy can be seen as the last step of disintermediation. « What’s yours is mine … so I do not need to purchase if I can use yours, we will share”.
· By itself this phenomenon is undoubtedly the one that will allow us to achieve the objectives of the Cop21. Look at the absurd side of our current habits; we all have 2 tons of equipment in a private car that we use 5% of the time for 20,000 km yearly. What a waste of our planet resources.
5. « I am a brand, I am a media »
The paradigm is on the second half ot the title…Looking at the world of influencers who, overnight, can break a company’s reputation after a misstep that may seem benign, this paradigm is becoming more and more significant. (Example with United Airlines who ruin his reputation in 2009 when a singer had his guitar broken and whose YouTube video has been seen 17 million times United breaks guitars).
· In some areas it is swiftly that influencers who impact, here called “media”, are becoming brands themselves with more than 1 billion views.
· Influencers must constantly adapt to switch from one technology to another in the field of social networks.
· Brands sometimes put innovation in a standby position but this paradigm shift should allow them to use their “media” side to test new products quickly in MVP mode.
- Recap on Marketing 4.0 –
We will jabber taking different angles to explain the concept.
Perspective of the marketing guy
Let’s take the concepts of Marketing 1.0, 2.0 and 3.0 seen in our previous books with the paradigm (mental change of perspective) « I am a brand, I am a media. »
· 1980: Marketing 1.0 – « Coca Cola thirst of today. » After seeing the ad 10 times a day you could not help ordering a Coke.
· 2000: Marketing 2.0 – Communication is now a two-way process! Here comes the blogs. You type “Coke” in your browser and you have 188 million responses. So this is not Coca-Cola public relations’ made ads, it is the everybody talk about Coca-Cola, for good or bad, anyhow it is buzz.
· Marketing 3.0 – It started in 2013 with influencers. The brand is then symbolized by a raft that surfs over the crowd carried at arm length from person to person. This was good but never make a misstep: Example of Abercrombie & Fitch, the CEO of Abercrombie & Fitch in an unhappy interview said « I do not like fat people » to explain why he did not carried XXL sizes. Overnight, influencers unleashed and dropped the brand. « We knew you did not like the fat ones, but now you gave us the stick to beat you. » Abercrombie & Fitch is still trying to recover…
For the marketing guy, mental changes to make are big. He dreams of a quick switch but it does not work like that. Mankind not easily erases a learnt mindframe. He has to learn something new that will gradually take place for the old beliefs.
With 1.0, the more messages reach the customer, the better, until saturation if needed. With 3.0, the customer accepts suggestions at the right time in the right place but beware, he has the Opt Out option, which, if activated, will be hard to put off. The X generation (baby boomers) is actually quite tolerant and patient with brands but their children are very keen on the Opt Out. Example: Why Amazon never asked permission to send me notifications on my smartphone on the PUSH mode? Because he failed to promote its OS « Fire » for smartphone and therefore does not have enough background information. He is afraid of doing the wrong recommendation at the wrong time and get an « Opt Out ».
Perspective of the End-User
Let’s start over with the end-user point of view.
· 1.0: advertisements.
· 2.0: blogs.
· 3.0: IoT (Internet of things), the end user accepts that the “cloud” knows details of his private life like at what time he switches on his coffee machine …
Facial recognition was presented by MIT researchers at the 2013 CES… Today this software is everywhere from crowd monitoring systems to Facebook. Your picture is taken about 500 times a day in London… and read by automatic facial analysis, helping the police to look for terrorists. The system can find out even the feelings you would like to hide. The spectrum is complete:
· 1.0: I know the sites you look!
· 2.0: I read what you write!
· 3.0: I know what you’re doing!
· 4.0: I see all your feelings!
In the US, on Facebook, you have an option to see the average 20-100 pictures of you posted every day by everyone. And tomorrow, you will also get the description of your emotions on the photos like: « Picture of you taken at 12:43 talking with a young man, you were smiling but feeling exasperated.”
6. The platform is the winner
We will try, in the following chapters, to find out the success keys for having a winning platform.
We are beginning to see antitrust actions against platforms like Amazon or Google. Since the service offered by the platform is free, it is hard to regulate.
Today everyone wants to be the platform of something because the platform is where datas get accumulated and where services with a trusted third party aggregate.
7. Trusted third party
Very popular nowdays…Our analysis grid shows that we have 5 different components of our life and therefore we need 5 Trustees.
These 5 components of our life are:
1. our public life in general
2. Our health, or quantified self (QS)
3. Our emotional life
4. Our personal development
5. Our finances
Finally, what we saw over the last few years enabled us to outline the conditions for a solid network led by a trusted third party. It is necessary to have together three conditions:
1. The added value perceived by the user is greater than the fear of Big Brother
2. The opt out option is easy to activate so that the user does not feel trapped
3. The trusted third party is “seamless », meaning I do not have to change my habits.
· The twentieth century was complex, the twenty first century offers too many possibilities and interactions. The consumer is a bit lost. He needs to rely on a trusted third party to manage for him whole parts of his life.
· This trust is very hard to get and can be lost in an instant.
8. 10 transverse consumer expectations
Over the past 7 years, we went from 5 transverse consumer expectations to 10 as illustrated in the field of music:
1. Personalized and individualized device (My iPod, My Playlist)
2. Demat / Remat. I have dematerialized my music CDs in the iTune’s cloud so that they can rematerialise where I want when I want (iCloud)
3. Social Filter: to better choose my music, I do not want to sort in the 50,000 Google results I simply ask my friends, or trust Genius from Apple; this is Social Filter
4. Sharing: I want to share what I like (SoundCloud)
5. Seamless: I do not want to change anything in my habits … It is for you to adjust to me (Shazam)
6. Video first: After five centuries with the supremacy of the written for learning and knowledge … now it is the supremacy of the video. (Video Clip and YouTube back in music)
7. Social Management: I want complete digital control of my image, I want it at hand and able to erase what bothers me today to possibly recover it tomorrow in my profile on my various networks (not yet realised by Facebook)
8. Ongoing Value: I expect quick training for my new devices, this is a must for any digital tool, I do not want planned obsolescence of my iPhone or my Tesla; send me an upgrade on my software that gives me more features like the Tesla which is becoming almost Driverless. (Even Apple is beginning to understand this and presents a $29/month subscription for always getting the latest IPhone)
9. In control: I always have the option to enable the opt-out. The provider is obliged to erase all my data in a tenth of a second and give them back to me in an open format so that I can eventually pass them to a competitor. (This is included in the RGPD law enforced in May 2018 throughout Europe)
10. OSEG: Ownership Sucks, Experience is Great. I bought vinyls, tapes, CD, now useless… End of it! I prefer subscription for listening the music I want, as much as I want, when I want. Minimalism is a trend: in California, some people have decided to buy nothing non perissable for a year, they borrow or barter for something else. Why did you force me to be the owner of something to have the experience I want? Now with streaming etc… I enter the subscription economy.
· These 10 consumer’s expectations are transverse.
· The consumer will naturally transform these new expectations in new usages from one sector to another sector of his life. This creates the conditions for a digital disruption.
Have a good year of decoding new usages and innovation
InnoCherche – Mai 2018