Archive for the ‘Uncategorized’ Category

Is Apple Cooling or Transitioning to a Techno-Luxury House of Brands?

Sunday, June 8th, 2014

Blog graphicThe recent announcement that Apple is acquiring Beats Electronics for its streaming audio and electronics capabilities has caused consternation on Wall Street in terms of whether this is an indication that Apple’s renowned ability to innovate in-house is cooling and that the company is beginning to stall.

Most of the attention around the Beats acquisition has focused on its streaming capability and whether it offers as good a service as Spotify or Pandora. The potential that this joint team brings for developing future offerings in the broader entertainment landscape, including video, should not be ignored.

Other key benefits for Apple include Beats’ wealth of aggregate knowledge of the entertainment, music and electronics industries, as well as its connection with the youth culture – something that many other companies seek to emulate. Beats is considered to be a relatively strong U.S. brand with a youth flavor and one that, when attached to Apple and its global market presence and subscriber base, could infuse a stronger linkage with their younger purchasers, further extending their cool image and status.

At the heart of this transaction, however, is the issue of “the innovation divide”, where larger process driven companies are not always as flexible and in tune with the rapidly changing technologies and consumer demands that startups seem to easily tap into. This is why we have seen Facebook acquiring WhatsApp and Oculus. as well as Google acquiring Nest.

The real challenge faced when executing such acquisitions is being able to blend the cultures and mindsets of the new company with the dominant corporate culture that prevails. This may seem easy but the reality is that the founders and creative thought leaders who drive the acquired company usually leave fairly quickly. What can Apple do to prevent this happening and also create a mechanism and process for future acquisition and expansion going forward? The key may be keeping them as independent operations and brands supported by the power of the Apple global logistics, branding and design machine.

Are there other reasons that Apple should be considering this broader transformation? At the recent DLD NYC Conference, Scott Galloway identified that technology is a terrible business to be in because: “If you don’t reinvent it every year, your stock gets hammered”. He stated that “you want to be in a business that leads with your heart not your head, as it results in irrational wants and needs which in turn lead to larger margins”; he believes that the investment community has recognized this, giving Cartier as an example of having a larger market cap than Deutsche Telecom. Galloway identified that “the best neighborhood in the world is luxury” and although, in his opinion, Apple is the best house brand in the world, it’s in a bad neighborhood which can be a “terrible stock strategy”. He believes that Apple needs to transition its business into the luxury neighborhood in order to become a great iconic luxury brand and, in so doing, become the first trillion dollar market cap company. There seems to be strong evidence that Apple has already initiated this transformation with the appointments of Angela Ahrendts, former CEO of Burberry, and Paul DeNeve, former CEO of Yves Saint Laurent, into key positions within its organization.

The possibility is that the acquisition of Beats could be Apple’s fledgling step to creating not just a single luxury brand but a house of brands, similar to LVMH, with multiple appeal points for a broader global audience, rather than limiting their offering to a single brand or a single technology. The creation of a new techno-luxury house of brands supports Apple’s quest to become the first trillion dollar market cap company, and the company’s transformative strategy indicates a return to its historic reputation for unpredictability!

Steve Bell, President, KeySo Global LLC

The Entrepreneur’s Paradox

Wednesday, July 3rd, 2013

The macro picture

Most people associated with business strategy and the challenges of cultivating innovation are familiar with a classic business book by Clayton Christensen called “The Innovator’s Dilemma”. In this seminal work, Christensen examines the impact of new technology on existing industry incumbents and the dilemma that they face in sustaining current business at the same time as embracing disruptive technology.

A recent business magazine article identified that the pace of disruption was accelerating as multiple technologies come together and as innovators constantly try to leverage these technologies for new goods and services. In most cases, the implementations fail but these failures have a significant benefit as they enhance the collective learning of both the innovators and the customers with each new product cycle. This learning aspect for customers is critical because they are becoming familiar with new experiences and technology. Consequently, when the right combination of experience and technologies is eventually created, the market is more receptive as customers are already familiar with it, meaning that the concept goes viral faster and becomes disruptive more rapidly.

In past blogs I have talked about the concept of “boundary blurring” between industries as the impact of combined ICT technologies changes the value propositions and business models of industries such as banking, health, retail and automotive. We have also described a phenomena we call “digital life” which is the osmosis-like process of digital technology absorption into people’s everyday lives. Most individuals do not recognize the degree to which they have adapted to the new technologies around them. However, the stage is set for the emergence of viral disruption in multiple industries in the next couple of years as entrepreneurs, small startups and companies within ICT see the opportunity to apply these new technologies.

The micro picture

Against this macro picture that I have been sharing through my consultancy work over the past 5 years, I have witnessed several opportunities for businesses to cross boundaries and create disruptive new products, services and business models. Together with a partner, I am now in the process of creating a new startup that applies hardware and software technology, systems thinking and creativity to an industry ripe for disruptive innovation. In developing this venture, however, I have stumbled across what I call the “entrepreneur’s paradox” which is the corollary to the innovator’s dilemma.

The paradox occurs because of the above mentioned macro aspects necessary to create ripe market opportunities: the customers are ready, the industry has old and established business models and market perspectives, and mobile and technology startup companies are winning early adopters.

To enter this industry it requires considerable time and investment to develop the product and value proposition. It also requires the exposure of the idea/product to investors, customers and potential partners in order to test the idea and to prove it can create a sustainable business model. Angel and VC investors are notorious for not signing confidentiality agreements in early stage discussions.  In other words, it requires putting the idea out into the public domain, which is the nub of the paradox, because it works against the other desirable attribute of a tech startup – namely, a patented product or idea.

In order to submit a provisional or full patent filing, and claim “first to file” status, it requires no prior public disclosure. So how do you know that what you are filing justifies the cost in terms of being able to create a viable business? And how do you know that the time you spend developing your invention isn’t going to be preempted by someone else fast-cycling a product concept with target customers? The paradox here is: should you file first or seek customer feedback first by creating a prototype product but, in the process, run the risk of the idea being stolen or preempted?

There is no simple resolution to this but as cycles of technology, learning and consumer adoption accelerate, they are bound to challenge the fine balance between the need and desirability for patents versus the finite market opportunity that may exist and needs to be proven. Not an easy decision to make!

Steve Bell, President, KeySo Global

Google & Motorola- Chinese Whispers and Puzzles

Sunday, April 22nd, 2012

Why offloading Motorola Mobility to Huawei makes no sense

 

Even before the deal is finalized the Wall Street Journal is speculating that Google will sell Motorola Mobility (MMI) to Huawei and keep just the patents because it doesn’t want to disrupt the Android ecosystem. The analysts IDC commented that since “Google doesn’t have a hardware background”, they don’t know what to do with Motorola.

The reality is more complex than either of these speculations. In acquiring the patent portfolio, Google is astute enough to realize that in the converged technology world strong hardware and software combination patents are vital. Equally, they understand that this capability needs to be maintained in order to protect the ecosystem going forward, thus acquiring the means to do this. Now it just has to be creatively integrated into the organization in such a way that everyone sees the overriding future benefits.

When looking at Google’s major operating system competitors, Apple has both the hardware and software capability but completely integrated into a closed system; Microsoft with Nokia has an integrated approach as well, even though they are touting an open system. The requirement for hardware and software is without doubt paramount for the future.

Devices beyond smartphones need to be created in order to achieve Eric Schmidt’s (Chairman of Google) objective of connecting the world. While Android in smartphones is growing rapidly, Apple still dominates the tablet space. Concepts such as Google Wallet and Google Glass will need help transferring into the world of commercial production. The acquisition of MMI provides Google with a mechanism for rapidly commercializing technology concepts into simple to use devices.

Does MMI have too many phone design teams and engineering resources for this scenario? The answer is “probably”. Could elements of this be offloaded and would Huawei be a logical acquirer? The answer is “possibly”. However, the core capability will be retained within Google in order to enable the enhanced technology future that Larry Page, Sergey Brin (co-founders of Google) and Eric Schmidt foresee for the world. This future includes enabling mesh type communications for the emerging world, facilitating the digital living room and creating the autonomous automobile. None of these will be successful without the opportunity and means to integrate hardware, software and creative vision. This is the capability that Google has acquired with MMI.

Article first published as Google & Motorola – Chinese Whispers and Puzzles on Technorati.

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Why Google should buy Barnes & Noble

Tuesday, May 31st, 2011

Article first published as Why Google Should Buy Barnes & Noble on Technorati.

The media is abuzz with the news that John Malone of Liberty Media has made an offer of $17 a share for 70% of Barnes & Noble, the last remaining bookstore in the US.

In the Financial Times the point was made that, being the last man standing, Barnes and Noble has the advantage of no competition, and the Wall Street Journal emphasized the value of the Nook software that could become prevalent across Android-based tablets.

There could, however, be a broader opportunity for a company with vision. In one of his recent blogs, Seth Godin challenged the concept of the current library as being a warehouse of dead books to being a place where “people come together to do co-working and coordinate and invent projects worth working on together”.

Why not extend this concept of reinventing the library to being a reinvention of the bookstore? Apple’s concept of successfully mashing 3 things together – a community (Mac / iPhone users), a platform (iTunes) and an experience (Apple store) – could be built upon to create a powerful viral marketing experience and exceptionally loyal fans.

If Google were to buy Barnes & Noble they could enhance the Apple model by blending communities (Android, Nook, YouTube) with platforms (Nook, Google Search, Chrome and Android), and provide opportunities for new experiences of learning, creating and discovering in an amazing distinct new mashed-up retail forum.

It could become the perfect living laboratory for integration of digital and real-world resources, and at the same time provide a mechanism for interaction with consumers; it would make the Google brand incredibly tangible across all its ventures.

Coincidently, it could provide the perfect forum for facilitating a nationwide open innovation environment that encourages the growth of entrepreneurism. In this new digital age, the Barnes & Noble Café could become the innovation catalyst, similar to the old coffee houses of Europe that used to facilitate the bringing together of creative and inspiring inventors and entrepreneurs. The Android and Nook platforms could be extended to enable a social networking community focused on education, innovation, creativity and fun.

The retail aspect of the B&N facility would also evolve offering a broad array of products and services that real and virtual associates could advise on and show virtually, while suggesting suitable additions that could be purchased locally or online with their Android devices and delivered when they want. The facility would then morph into a hub that brings Adwords to life, with context and location both physically and virtually on Android devices in the store.

In a single move, Google could totally revolutionize the face of retail, turn the tables on the Amazon business model by emulating and enhancing the Apple model – all for less than $1bn. Sounds like a deal to me!

We at KeySo Global understand the importance of reinventing business models and we’d be delighted to show you how converged technologies can be used to help your business run more efficiently and effectively. To set up an appointment, call us at +1 847-478-1633, email us at info@keysoglobal.com or visit our website at www.keysoglobal.com.
Steve Bell, President, KeySo Global LLC

Social media boot camps – is that all it takes to re-boot your business?

Friday, May 13th, 2011

You can tell when the hype cycle on social media has reached its pinnacle when you see a Sunday newspaper running an advertisement for a “Social Media CEO Boot Camp”. In 90 minutes, this crash course is going to provide you with Social Media 101, successful case studies, proven strategies and tested techniques, and will result in generating new customers for you. And the reason that you’d be interested in this is because “your existing traditional advertising and marketing has stalled”!

The likely probability is that this course will tell you about social networks, including Facebook, forums like Yelp or Trip Advisor, and micro-blogging Twitter, as well as content communities like YouTube; perhaps it will also mention wiki’s and social search sites such as Digg, and the power of RSS. It will inform you about the explosion in social media created by users generating content and companies exponentially increasing their participation, while emphasizing why you must have a voice in this expanding universe. At the same time it will preach to you about the value of search engine optimization and, if the program is really good, it will stress the need to engage listening programs to hear what people are saying about your company and its brands. As a CEO, you will come away in one of two states: either total amazement and full of energy or, more likely, filled with concern about the ability of your organization to catch up.

The reality is that social media is one element of a larger movement resulting from the impact that digital technologies and social business have in changing the interactions of companies, customers and employees on a daily basis. It is no longer about monologue conversations between the company or its employees and consumers; it’s not about control and selling; instead the emphasis is shifting to community engagement, openness and participation.

At a recent seminar on social business run by IBM and “Information Week”, the following component pieces were identified as critical elements in social business architecture:

1. The ability to understand the market dynamics of the industry, including how competition, brands and customers are socially engaging.
2. The utilization of social software, including platforms, applications and technology.
3. The identification of social objectives, including customer engagement, employee empowerment, partner enablement and supplier engagement.
4. The determination of social output, including consistent social media, the creation of communities and the participation in social networks.

The key take-away was that a social business strategy is not just about the deployment of social technology and software but that it is about the organizational, cultural and process shifts that also need to be recognized and planned for.

The audience at this seminar was comprised of technology and information savvy subscribers of Information Week, and yet the majority of the questions related to these four major themes:

1. How do I work with IT so that they don’t stall implementation of our social media strategy?
2. How do I sell the need & concept of a social business strategy to my boss?
3. How do I ensure that my social business strategy addresses security and compliance issues?
4. How do I prevent organizational overload derailing my social business strategy?

At the heart of all this complexity and constant change, resulting from the increasing utilization of new technologies, software and business processes, is the need to take a holistic planning perspective and to recognize the need for good human relations and change management.

As a CEO, you are smart, flexible and adaptable but even you can’t keep pace with what is occurring, so don’t anticipate that a single individual in the organization can either. What is required is the creation of a community of people with the common purpose of acquiring the necessary knowledge and pushing forward with the transformation that is required. In this way you will facilitate, shape and ensure the success of your company in the digital world.

We at KeySo Global understand the importance of having a strong social business strategy and we’d be happy to show you how converged technologies can be used to help your business run more efficiently and effectively. To set up an appointment, call us at +1 847-478-1633, email us at info@keysoglobal.com or visit our website at www.keysoglobal.com.
Steve Bell, President, KeySo Global LLC

Is iPad off target and Nook Color in the sweet spot?

Friday, March 4th, 2011

Has Barnes and Noble accidentally stumbled upon the sweet spot in the converged space between PCs and smartphones?

Their Nook Color device, with its Android operating system, is a significant step above just being an e-reader but it doesn’t have the pretension or the price of some of the tablets that are due to arrive, or are already, on the market. The device, in addition to providing excellent reading and media experiences, can also act as a storage facility for sharing presentations and other material. I’m a convert! It’s lightweight, easy to use and read and, as I have said before, has instant-on capability, so ideal for the moments when you feel compelled to share that key slide in a quick sales pitch!

A recent study by the Boston Consulting Group implies that Barnes & Noble could have a real winner. BCG’s report, released just before Apple’s announcement of a second generation iPad on Wednesday, finds that the consumer’s growing preference is for multi-use tablets over e-readers but says that the “sweet spot” for pricing will be below $200. The fact that the Nook Color appears to be an enhanced reader and is priced at $249 indicates that it’s very close to that sweet spot.

The ability to access the online bookstore, participate in magazine subscriptions and have special offers focused on reading and leisure interests is supplemented by a growing number of applications that are available on the Android market. The Android application developer community is the secret weapon and truly enhances the value of the Nook Color to its users. According to an Engadget review, Barnes & Noble plans to launch its own Android tablet app store in the first quarter of 2011, providing a consistent, compatible application experience.

Barnes & Noble could also have the upper hand due to the fact that Apple is increasingly leveraging its iTunes store’s quasi-monopoly to extract value from the ecosystem. The most recent announcements of the 30% tax on all media content sold via the store means that the company is penalizing consumers and increasing the total cost of ownership for the iPad experience.

Barnes & Noble, with its existing books, magazine and media distribution capability, is in a strong position to offer a compelling and competitively priced reading and entertainment experience on a device that also provides Internet access and a wide variety of online applications. Combine this with an opportunity to create an enthusiastic community of users who also like to frequent the bricks and mortar stores for coffee and special offers, and the Nook Color could be the best thing since the invention of the paperback for the publishing, media and bookstore industry.

If you would like to learn how to holistically assess the market place and take advantage of Digital Life opportunities, contact us at +1 847-478-1633 or visit our website at www.keysoglobal.com.

Nokia changes

Monday, September 13th, 2010

Two of the most outstanding, but often overlooked, strengths of Nokia over the last 20 years have been its continuity of management and deep sense of collective direction. These have resulted in Nokia growing and becoming the number one handset brand globally. A supply chain and design process that have enabled the lowest cost for India, China and Africa, and helped the cellular industry move from 20% penetration to 70% in less than 10 years, are no mean feat! During this time Nokia was also hailed for its innovation, design and user interface. The tight management team strategically outmaneuvered Motorola, kept the Korean competitors at bay and forged some of the most powerful relationships in the industry. Yet now the iPhone and Blackberry phenomena have started the process of unraveling Nokia. The aggregated knowledge that this management team had is beginning to seep away. Nokia revealed that it is to replace CEO Olli-Pekka Kallasvuo with Microsoft executive Stephen Elop. This has been followed by the loss of Anssi Vanjoki who has been instrumental in so many of Nokia’s handset successes and was seen as the potential savior of the Smartphone category. It is probable that these departures are the first of many, as the raison d’être of the company shifts under a non-Finnish leader. It is also likely that the reality of the new converged world of the Mobile Internet will cause many to question Nokia’s ability to scale the heights it formerly claimed.