Last week’s Gamechangers Turkey Awards 2015 were dominated by a superb Turkish retailer and homeware brand Karaca, combining the best of contemporary lifestyles with local heritage. From the softest cottons to a new granite-based coating system for non-stick pans, the business has innovated every aspect of their business. Check out the latest online catalogue. The brand is still young but looking to grow rapidly across the world, searching for the right franchise partners although needs to strengthen its international propositions to do so.
The awards seek to find the most disruptive innovators in the market, be it through outthinking the competition the competition strategically, or innovating the brand and experience to engage customers more deeply. Awards are held throughout the world, based on the 10 big ideas in the “Gamechangers” book by Peter Fisk.
Other winners, and a summary of their innovation in their own words, included:
Metro – The Vision Award
As strong business partner of professionals for many years, we support the entrepreneurs in making a difference and in improving their business with the services and products we provide.The success stories that we witnessed through all these years inspired us to organize a social entrepreneurship competition.We aspired to support entrepreneurial business people who make economical, social and enviromental difference to their society and the world and to present new entrepreneurs as an example to society by encouraging them.The competition was open to the participation of anybody who possess quantifiable data on sustainability, customer satisfaction and reliability and is open to improve himself and his business, and it became a driving force to find creative and innovative solutions for social problems. We helped social entrepreneurship and people working in this field be heard.Besides the financial support we gave, we enabled their recognition through communication.
Adel – The Strategy Award
Adeland, the children’s brand that was launched by Adel Kalemcilik in July 2013, presents a brand new and entertaining world to children by creating its own characters, land and story, which is a first in industry.Adeland was inspired from a fantasy world depicted by children under pedagog supervision. Children discover the entertaining and colorful world of Adeland through cartoons, games and video clips at www.adeland.com web site.Thus, Adeland allows children to improve their creativity, enhance their imagination with hero characters and create a world of their own with their favorite colors.Adeland brand has broken new ground in its industry by creating its own world and characters and has differantiated from competition by adding “distinctive qualities”.
LC Waikiki – The Discovery Award
The fashion retailer extended its e-commerce channel to 13 new countries and starting sales in these new markets.The countries where online sales have opened are: Azebaijan, Bahrain, Egypt, Georgia, Iran, Kazakhstan, Kuwait, Lebanon, Morocco, Oman, Qatar and United Arab Emirates.We serve in English in these countries, service in local languages will start soon. Online foreign sales turnover is aimed to be $20 million by the end of 2016.Kiosk-tablet and smartphone utilization will begin in domestic stores in the near future in order to support e-commerce.By this means, our staff will be able to make online inventory check for our customers who are in store and they will be able to direct the customers to our web site if required.Additionally, lcwaikiki.com is preparing to go online in Russia soon.The difference this innovation creates: Increasing penetration in new markets entered by retailing, creating brand recognition and sales channels in countries where stores are not present.
Karaca – The Brand Award
While almost all brands in Turkey that are in the business of dining, kitchen and decoration tried to reach the target audience through recipes, Karaca embraced the presentation of these dishes.Karaca embraced “dining table culture”, something much more important than good cooking, by this means.Therefore, Karaca has set the bar in this field.For the first time in Turkey, seninsofran.com web site is arranged in order to inspire the user and to create content on dining table preparation.
In terms of some of the product innovations, such as non-stick pans. Our customers had health concerns particularly about the easily scratching nonstick/nonflammable coating in pots-pans group.Difficulty of cleaning and sticking was the problem in ceramic products.We developed a product that removes this concern. We made the products 7 times more durable than nonstick/nonflammable and easily cleanable and not sticking by granite coating.We described the new product to consumers very well so that we persuaded them to use granite products by resolving their concerns.Opening up a new segment in cooking group, we made the whole industry divert to granite.We gave rise to a great additional turnover that was previously nonexistent.
Vakıf Emeklilik – The Innovation Award
https://www.youtube.com/watch?v=aXfaL772Lfg
Our goal with Veplus wearable technology application is to help our customers have a healthy life by utilizing the innovations of the digital world and to present personalized services.As Vakıf Emeklilik, we began the era of personalized insurance by using wearable technology products with Veplus.We took the first step for personalization and personalized applications that are some of the most critical topics in transition of insurance.We aspired to show the people that we are always there for them by raising their quality of life and we aimed to be a lifelong companion.Our users can follow the health information that we regularly send over the application, can keep track of daily number of steps, calories taken/burned, exercises, sleep and pulse data and benefit from life insurance products and services that we will personalize, due to our wearable technology application “Veplus” that works on Samsung smart watches and Android smartphones.Life insurance risk acceptance procedures has changed and personalized insurance era has begun with Veplus project.Understanding and awareness of insurance will increase, insurance would only be by one’s side on the bad day perception will change and insurance will become more accessible and sincere with this application.Since an application that is more sincere and highly interactive than the relation between the customer and the insurer did not exist until today, personalized services, personalized products and privileges will stand out and awareness of insurance will improve with the application.
DeFacto – The Communication Award
The fashion retailer knew that one sided communication is not possible with Young DeFactians who has an average age of 24 years.We created an extraordinary communication channel as a result of painstaking work.We named it “Depar TV” after our employer brand “Geleceğe Depar”.A DeFacto employee is not only the audience of this channel but also the source of news, innovation, happiness, improvement and communication.In other words, members of DeFacto are also the stars, the producer, the director and the viewers of this channel. Apart from being an actor of DeparTV, the greatest difference we made is ease of accessibility.Depar TV can be viewed from a number of different channels such as in shuttle buses during a ride, online, from a mobile phone or from TV’s at common spaces and its ratings surpass the competition.In addition, Depar TV provides the essential inspiration at DeFacto.
Karaca – The Experience Award
We allocated 140 m2 of space at our 540 m2 store which opened in Bursa Anatolium Shopping Mall and we turned it into a workshop where 14 people can cook together at the same time.We organized courses and events such as pastry, world cuisines in the school while shopping continued in the store and we gave a special experience to our customers.At the same time, we made deals with a number of companies and clubs and contributed to our store traffic.
Kalekim – The Impact Award
Kalekim has taken the product and application under scope of warranty in ceramic applications, a first in construction chemicals industry and has opened the door to a new era for craftsmen and consumers.Craftsmen Warranted application presents the best execution with craftsmen trained and certified by Kalekim in all indoor and outdoor (i.e. bathroom, kitchen, balcony and terrace) ceramic applications.Through the Craftsmen Warranted service, Kalekim has the goal of creating new business oportunities for Masters Club craftsmen by increasing their preferability , enhancing how consumers perceive the quality of ceramic applications, and reducing application related errors by maintaining correct product, correct application and correct solution system.Therefore Kalekim brings a brand new service network to the industry.Connection with consumers is also re-enforced with high customer satisfaction presented.
TEB – The Leadership Award
Innovation Management at TEB involves all stakeholders, in other words the employees, universities, customers, university students, suppliers and entrepreneurs, under Human Recourses leadership.We developed Intrapreneurship Program, first of its kind in Turkey and in the industry.We have to be nimble in order to respond to customer demands, to rapidly adapt changes: So we created the environment for employees to quickly put their projects into practice by acting like an entrepreneur in corporate setting.•We are training ‘internal entrepreneurs’ who can create and materialize projects that may change the future of the bank.•We strengthen their entrepreneurial muscles through very special trainings, mentoring and coaching.•We create environments for our entrepreneurs so that they can find the right people for their projects and hire them like an entrepreneur.•We send the champion entrepreneurs to Silicon Valley in order to contribute to their projects.
About the awards
“Gamechangers” is the new book by Peter Fisk, exploring how to change the world.
Gamechanger Awards are held in regions throughout the world, to find the most disruptive innovators in every aspect of business today. The Turkish awards were held in partnership with MCT. With thanks to Ebru Asal for all her support, to everyone who nominated brands, and voted for them.
Three Chinese technology businesses are battling to shape the future of business in China, and far beyond. In many ways, Alibaba, Baidu and Tencent are set to shape the next decade in a similar way to which Amazon, Facebook and Google shaped the last. The difference is that each of them combine the components of social media, online retail, search and payment. The rapid evolution of technology and new business models on the back of China’s economic revolution is fascinating.
In Istanbul last week, hosting the Global Marketing Summit 2015, I had the great pleasure to meet Kaiser Kuo who is the Chinese-American International Communications Director of Baidu, based in Beijing. He’s a fascinating character – having grown up in US, he is back in China shaping the tech brand, and also playing lead guitar for one of the nation’s most popular heavy metal bands. But more than that he brings an insight into where technology is going next, and how we can all be part of that journey.
Below you will find the full text of Kaiser Kuo’s keynote when he joined me in Istanbul:
Next year will mark my 20th continuous year living in Beijing—a city which, for all its faults, also does have quite delicious food on offer everywhere. I was born and raised in the US, but in my teens I took a very keen interest in what was happening in China, and realizing that I had an opportunity to witness up close the sweeping transformation of a full fifth of humanity, in college I shifted the focus of my study toward China, and spent a year living in Beijing after graduating. I then plunged into the study of modern Chinese history as a graduate student, and in all the time since, my fascination for history hasn’t diminished. Long ago I recognized that studying the history of one people or one nation is woefully inadequate to gaining any real, useful understanding: Comparative studies are really the only way to recognize patterns, to grasp their significance, and begin to comprehend the underlying reasons for divergence. For students of modern China, one of the touchstones for comparison has always been the Ottoman Empire and the emergence of modern Turkey, and I’m grateful finally to experience the sights and sounds of this place I’ve been reading about for so many years. I’m deeply impressed at the obvious success that Turkey has had in creating such a vibrant, cosmopolitan, and truly modern society that’s still deeply and meaningfully connected to tradition and history.
Comparisons are very relevant too today, and I’m particularly interested in looking comparatively at the development of technology and its impact on society in different countries. Unfortunately my knowledge of what’s happening in the digital world in Turkey is superficial, limited to stray observations, anecdotes, and some scattered readings, so please forgive any mistakes I may make.
But with China, and the Chinese Internet in particular, I’m very fortunate to have witnessed its development up close and in person, first as one of the early, frustrated users of the Internet—I think my family was among the first few thousand Internet subscribers in China, from early 1996—then as someone working in an Internet startup, then later as China bureau chief for a US technology magazine, and finally working in communications for leading Chinese Internet companies. In the time I’ve been involved in the Internet, the number of users has soared from under a million in 1999 to close to 700 million today. I’ve been privileged to watch as the Internet in China became really the crucible of contemporary culture, developing its own quite unique culture and becoming, at least for a while, a de facto public sphere in Chinese life—something that really had never existed previously at any scale. And I’ve had the opportunity to meet and get to know many remarkable entrepreneurs, some of whom now lead multibillion-dollar companies.
So this afternoon, as I share some observations about major trends in digital technology in China today and speak a bit about China’s rise as a digital superpower over the last 15 years or so, I hope that you’ll find in some relevant points of comparison with your own home markets—whether here in the region or further afield. I want to focus on two major developments that are already reshaping the digital landscape in China, and in ways that are arguably ahead of what’s happening even in the U.S. and may be of some interest here in Turkey.
One isn’t unique to China: It’s the Big Data Revolution that you’ve doubtless heard so much about, but in particular I want to give some examples about how Baidu is using big data and artificial intelligence to transform our business.
O2O: Online to Offline
The other will I think be of even greater interest: What we in China call O2O—a name actually coined in the U.S., meaning “Online to Offline.” In the U.S. and in other markets, people refer to it as “on-demand services,” but I think “O2O” really gets at it better. Of course those of you from here in Turkey know Yemeksepeti.com, which was acquired by Delivery Hero for 589 million dollars earlier this year. It’s exactly the kind of O2O play I’m talking about, leveraging the power of networked smartphones to connect people with services, and it’s the marketing treasure from China (where there are many, many such companies) that I’m most keen to share with you. It’s fascinating because it offers a way to truly unlock the local layer, and unlock services—things that really weren’t possible to nearly this extent before—and because it promises to liberate Internet companies from their almost total dependence on advertising revenues. It’s also interesting in a comparative sense, as it is not something that has developed to the same extent in the U.S. and represents, in a way, the kind of “leapfrog” effect we’ve seen now at work a few times now in China.
A comparative approach to understanding the development of tech ecosystems has a lot in common, I think, with a comparative approach to understanding the emergence of institutional, legal, intellectual and political features—and at a deep level the two are certainly related. Bringing people together at conferences like this, held I think very significantly at the historic juncture of Asia and the West, is a great opportunity to take in the enormous diversity and to learn from where each market seems to excel. I’m quite sure that historians in the future will find it as challenging and complex to explain the uneven development of digital technologies globally in the late 20th and 21st centuries as they do today in explaining the disparate forms of government or governing institutions, of rule of law, of different socio-political norms across different cultures and countries. It’s no easier to grasp why certain geographies have become leading centers of tech innovation and others have not than it is to understand precisely why the European Enlightenment centered on France, or why 800 years before it there was an age of enlightenment led by Persian and Turkic scholars in the great medieval Central Asian cities of Bukhara and Samarkand, or why England led the way in the Industrial Revolution.
When it comes to comparative approaches to Internet markets, probably the U.S. and China is a more meaningful comparison than, say, China and Turkey. These are after all countries and markets on a completely different scale: Turkey’s Internet penetration is about 47%, at about the same level as China’s (which is 49%), but that still gives China almost 20 times the number of Internet users. China’s enormous scale is among many factors that have made it possible for China to develop a quite different Internet ecosystem than most of the rest of the world, which with few exceptions is dominated by US-based Internet companies. In search, in e-commerce, in social networking, in microblogging, in online video and in just about every other sector of the Internet China’s market leaders are its own companies and not, say, Google, Amazon, Facebook, Twitter, and YouTube. And yet China’s Internet companies have been astonishingly poor at establishing any meaningful markets outside of China. Beyond a small community of Chinese living here in Istanbul, I wouldn’t think any of you who are from Turkey are particularly familiar with the Chinese category leaders in all of these areas.
For that reason I’ll take a few minutes to point out some of the salient features on the map of digital China. I suppose that there’s one that everyone’s aware of: The Great Firewall of China. That’s a metaphor that people understandably find completely irresistible. But its sheer ubiquity has led to some fundamental misunderstandings about the Internet in China. First and foremost, it has become in the minds of many a kind of “Iron Curtain 2.0,”to borrow a phrase. Here in this room, where everyone is doubtless aware of just how well-developed the Chinese Internet is, it might not be the case; but you’d be surprised how many people I meet who, because they equate the Great Firewall and the Iron Curtain, imagine a situation in China more or less like Eastern Europe before the collapse of Soviet communism: They perhaps envision people standing in virtual bread lines, clicking on boring state propaganda sites and nothing else. Then of course they’re shocked to hear that one single company, Alibaba, racked up $14.3 billion in e-commerce sales on “Singles Day,” November 11—compared to only $3 billion for all e-commerce in the entire US on Cyber Monday, 19 days later. They’re surprised at the incredibly vibrancy of Internet culture in China, and shocked to learn that four of the top 10 largest global Internet companies by market cap are Chinese:Alibaba, Tencent, Baidu, and JD.com.
Has censorship conferred competitive advantages on Chinese Internet companies? Yes—but probably not to the extent that you imagine. If you look at the period before the major US-based Web properties like Google, Facebook, Twitter and YouTube were blocked, actually they were all quite far behind their Chinese counterparts in terms of market share: Google, at the time that it announced it would no longer censor in accordance with Chinese law, had about 17% while Baidu had 80%; Facebook was a distant also-ran behind Renren.com, 51.com, and a site called Kaixin001. Twitter was far behind Fanfou.com and other Chinese microblogs, and YouTube was probably the 7th or 8th place video site in China behind a slew of video sites.
It’s probably beyond today’s scope to delve into all the reasons why China achieved what it did, but I think a few are worth noting: First, there was the relatively enlightened policies of the government, which spent when it needed to on infrastructure, was quite liberal in its interpretation of rules that would have barred foreign investment in media companies; and who deliberately courted US-educated technical talent and encouraged overseas Chinese to come back and get in on the opportunity. I think people are so used to thinking that the Chinese government is somehow “opposed to” the Internet that they forget how much has been done under each administration since Jiang Zemin to advance its development.
Kind of like the formation of planets, once pieces started falling into place together it exerted a kind of gravity. So with infrastructure and tech talent, you also attracted venture capital, and managerial talent, and all the other things that are necessary for a strong tech ecosystem to develop. The presence beginning in the mid-2000s of all that manufacturing, and especially if the high-end OEMs and ODMs, meant fast iteration of new hardware ideas and a lot of incentive for software companies to match and test the limits of hardware innovation. Of course there were attitudinal and cultural ingredients that were needed, too, and in the case of China a spirit of entrepreneurship was not lacking, the kind of acceptance of failure—the ability to wear failure as a proud badge, as you see in Silicon Valley—didn’t take root easily in a society still so wedded to saving face. Now, though, it really does seem to have taken root, and China now boasts a tech ecosystem that may yet rival Silicon Valley’s.
I would be wary of anyone who tells you breathlessly that China is flat-out more innovative in Internet (or, as you’re more likely to hear, even in mobile Internet) technologies than the U.S. But I would be even more wary of people who disparage Chinese tech companies and dismiss their innovation. The fact is, in mobile especially there really are some areas where the world can really learn from China. The fact is also that many of the opportunities for this kind of innovation arose, ironically, from what might be called backwardness: The relatively low rate of fixed-line Internet and PC penetration was an opportunity for mobile to leapfrog, as we’ll doubtless see happen in much of the rest of the developing world. The relative underdevelopment of China’s services sector, which is quite fragmented and has low rates of Internet penetration, has allowed for O2O—what the Americans call “on-demand services”—to really take off in China.
One of the things that I believe was really responsible for the extensive innovation we’ve seen in the mobile Internet in China is the absence of Google Mobile Services, the agreement with Android handset makers in most of the rest of the world requiring them to use Google’s own properties like search and maps on Android phones. In much of the world, mobile maps simply means Google or Apple Maps. Here in Turkey I understand that the Russian search giant Yandex has done a good job with maps, and it’s great to see you have choices, at least as long as their fighter planes stay out of Turkish airspace, but this level of choice is the exception for most of the world. In China, when Google withdrew many of its services in 2010, and when remaining mobile services became mostly inaccessible for Google a few years later, there was a great opportunity for other platform-level apps—and especially maps, which are fundamental to O2O services. Baidu wasn’t the only map provider in China, either: AutoNavi, which was acquired by Alibaba last year, is another major map provider, and Tencent—the third of China’s trifecta of major Internet powerhouses—has its own mapping service as well.
Anyone with even a glancing familiarity with the Internet landscape in China knows these three major Chinese Internet players, with a combined market cap of about 450 billion dollars. The three are known by the shorthand BAT: Baidu, Alibaba, and Tencent. Back in the days of the PC-centric Internet, sure, the three had a bit of overlap and certainly competed to an extent, but for the most part, Baidu as a search engine was mainly about connecting people with information, Alibaba as the giant on the e-commerce scene was about connecting people with products and with merchants, and Tencent, as the most powerful social player, was about connecting people with other people.Things changed rather dramatically beginning in 2012, though, when smartphone penetration began to increase dramatically and mobile Internet use became the norm. Suddenly, China’s Internet giants—as well as a slew of other companies—recognized the opportunity to connect people with services, and direct competition really heated up.
The transition from being PC-centric to mobile-first companies happened fast for China’s major Internet players. Baidu was criticized in some quarters for having started the transition a bit late, but even if that was once true, we’ve certainly made up for lost time. We quickly came to dominate in mobile search, in mobile maps, and in mobile app distribution. And in Q3, our last reported quarter, mobile accounted for about two-thirds of Baidu’s total search traffic, and about 56% of our total revenue.
Our position in mobile was never just about more ad revenue, though. It was about escaping, finally, that dependence on advertising that is the curse of so many Internet companies all over the world. Even Alibaba,which operates China’s largest online marketplaces, surprisingly derives more than half of its revenue from advertising. The upshot is that most Internet companies are competing for a rather small slice of the pie—a slice that’s called “online marketing budget.” And while that’s been sufficient to nourish a good-sized ecosystem to date, and while online advertising (and in our case, performance-based search marketing) will continue to be effective for the customer, useful for the consumer, and vital for us, we believe that our position in mobile opens up a huge new opportunity that we’re now investing very heavily in—the opportunity in services. Where search is terrific for lead-generation and creating brand awareness, what we can now do is close the loop from discovery to payment. We broaden the scope of what we do, then, extending from the familiar search model to include a transactional, commission-based model. In other words, we now want to be dipping our ladle directly in the revenue stream of the customers we’re driving business to.
We’ve long known that the majority of consumption is local, and the majority of consumption is services. This is true not just for China, but for every major market I’ve looked at. But the local and services layers have been notoriously difficult to unlock. IP address-based geo-targeting was always inaccurate and clumsy. Local businesses and services need to target by actual proximity, and need to reach people—and be discoverable by people—at the right moment, when they have that propensity to consume. A truly usable mobile Internet, with affordable devices that are location-aware and always on, has made this possible. It has already begun to transform life for consumers and for merchants alike in Chinese cities, and I believe that there are many parts of the world—and Turkey is very, very promising—where O2O will do the same.
Just how big is this opportunity? Well, if we’re only talking about vertical areas of services we’re now involved in directly—travel, hotel, restaurants, takeout delivery, entertainment (like movie theater tickets)—we’re talking a market of about $1.6 trillion dollars in 2015, likely to double in 4–5 years. And it’s a very under-penetrated market right now: Only 4 or 5% of restaurants in China are making use of the Internet now to reach customers.The more heavily penetrated segments, like movie theater ticketing, are already hugely promising. Some 60% of all movie theater tickets sold now in China are sold online, mostly via mobile devices. For consumers, the convenience and the savings are incredible. In literally under 30 seconds you can find the movie you want to see, find the closet theaters where that film is showing, deep discounts on tickets through Baidu or another provider, select your seats and buy your tickets. No one I know pays full price at the theater. For theater owners this is great: They fill their empty seats and generate much better revenue even if they’re offering deep discounts. A similar revolution is happening in dining, where restaurateurs are all getting on board with O2O platforms both to fill seats in their restaurants and to soak up excess kitchen capacity by offering takeout delivery—companies like you Yemeksepeti. A restaurant owner doesn’t need to create a website, or pay for bandwidth or rack space in an Internet Data Center. In fact a restaurateur doesn’t need to have a storefront: Many are doing great business now through delivery-only models, with just a kitchen and a partnership with an O2O food delivery provider like Baidu. O2O also presents tremendous opportunities to build CRM, real relationships with customers, through stored-value and VIP membership cards for instance.
Why is this happening on steroids in China, and what was so different about China? Part of this, it must be said, is the relative backwardness of the Chinese service sector.While in the developed West, a large percentage of hotels and restaurants are chains, with multiple outlets and back office staff and Internet-savvy marketing teams, China’s services are much more fragmented and don’t have the resources or the skills to leverage digital marketing on their own. Baidu and other companies who’ve led the way in the O2O space are in a great position, then, to work with these local services. And the rebalancing of the Chinese economy from investment-led to consumption-led growth, especially in services, augurs well for O2O’s prospects.
China’s large number of migrant workers, who move to the cities by the millions each year, can find great work, for instance, as a takeout delivery guy: They can make a good wage just following the pickup and drop-off instructions on their phones, just like Uber drivers—only unlike Uber drivers, they only need an electric bike, easily available for $300, and don’t need a drivers license. In America and in other developed markets, the high cost of delivery, and at least in the US case, the disturbing willingness with which Americans will get in their cars and drive even very short distances to their favorite restaurants, is a significant inhibitor to the development of O2O.
Urban density in China also works well for this model. We’re all familiar with the major metropolises of China, like Shanghai and Beijing, each with well over 20 million people. But there are over 250 cities in China with over a million people, and even someone who’s lived in China and studied the country for as long as I have would be hard pressed to name over 75 of those cities.
Of course if you’ve been following the development of the on-demand or O2O sector in China, you’re aware that there are a lot of subsidies being paid out—by Uber, in which Baidu is an investor, by Baidu Nuomi, our services-oriented e-commerce platform, by Baidu Takeout Delivery, and of course by all of our competitors. It’s true that we’re deploying substantial resources to win market share and to shape consumer behavior. We’re confident that we’ve already profoundly reshaped the market, and not just Baidu but the whole O2O sector still has tremendous momentum. All the subsidies we’ve paid out, the couponing that we’ve done, is really a small price to pay to open up a huge new market opportunity not just for us but for local businesses and services across the country. And as long as we’re spending that money to train core competencies—for example, the very sophisticated real-time, multipoint-to-multipoint logistics system for on-demand food delivery we’ve developed for Baidu Takeout Delivery—and to really create a compelling value proposition for merchants, we believe it’s money well spent.
So this is the great Chinese marketing treasure I wanted chiefly to share with you today—a way to unlock the riches of the local and services layer through O2O services. Here in Istanbul, as my wife and I have explored the city over the last five days, we’ve seen no real impediments to this happening here, too: You have here an enormous, populous city with one of the highest restaurants-per-capita I’ve seen, if my gut is correct. You have a huge, high-quality, but also quite fragmented services sector. In tourism alone the opportunities are enormous. Yemeksepeti is great, from what I can tell, and my hat’s off to the entrepreneurs who created and sold it. But imagine an app that would allow you from a single interface to book the right hotel, hire a driver, a tour guide who speaks your native language, recommend restaurants ranked highly among trusted people in your social network, offer you great nightlife options and more. If you were a hotel operator, a tour operator, a restaurateur or a nightclub owner, you couldn’t afford not to be using such a platform. This already exists in China: If you read Chinese and you visit any Chinese city, you can already do pretty much all these things and more directly from search or from maps.
Services means of course more than just restaurants, food delivery, travel, and movie theater ticketing. The really big prizes are in major verticals like financial services including insurance, like healthcare, and education—and these are all areas into which the major Chinese Internet companies have made very aggressive moves. And in these areas, it’s not just the power of mobile, and maps, and location-awareness that Internet companies are able to effectively leverage. It’s the power of big data.
Search engines like Google and Baidu were of course dealing in “big data” long before anyone started using that already rather shopworn phrase. But it’s only been in more recent years that we’ve seen real breakthroughs in artificial intelligence. Whether you realize it or not, AI now touches the daily lives of many people, and will do so more and more. Since he joined Baidu in May of 2014 I’ve gotten quite close to Andrew Ng, Baidu’s chief scientist. Andrew is one of the major luminaries in AI right now, and particularly in one specific approach to AI called Deep Learning, which uses very large scale Deep Neural Networks to allow machines to actually learn. Some of the significant uses to which this has already been put include speech recognition and computer vision, but it’s going to revolutionize semantic intelligence and therefore machine translation, and bring about unforeseen changes in our abilities to process and extract insight from data.
If you’ve followed the AI field in recent years, you’ll see how hot deep learning is now, and you’ll also see that the world’s great deep learning talent has amassed at major Internet companies. Without going into too much detail, deep learning’s basic ideas have actually been around for decades—at least since the late 1980s and early 90s. But it’s been two things that have enabled the kind of breakthrough we’ve seen just in the very recent years: The rise of high-performance computing that has allowed us to build very large neural networks; and the massive availability of data. Andrew Ng, who headed the Stanford AI Lab and founded the Google Brain project, as well as co-founding the massive open online course platform Coursera, has led very impressive work in the time since he joined Baidu. He likens the AI systems themselves—the deep neural nets and the deep learning algorithms—to “rockets,” and the oceanic amounts of data to “rocket fuel.” Neither is much good without the other. It’s the large Internet companies—Google, Facebook, Baidu, Apple, Microsoft—who have both the rockets and the rocket fuel: They have combination of financial resources, hardware resources, and data resources that AI scientists really need. And we’re really achieving lift-off—with an impact that will really change the world.
As Andrew likes to point out, the great thing about deep learning as an approach to AI is that the bigger the neural networks—the more neural connections—the better the performance. Size actually matters. And the more data you put through a system, the better it performs too. With very little modification, we’ve been able to use a deep learning system we call Deep Speech to recognize speech in both English and in Mandarin, by feeding it thousands of hours of transcribed speech in both languages.
Marketing is probably the most obvious application of AI, and it’s one we worked on right away. A deep learning system can figure out pretty quickly the likelihood of a given search ad being clicked on, and this ability to predict click-through rate obviously makes not only for better ROI for the advertiser but also a better user experience and better revenues for the search provider. We’re already also using deep learning to add images to text ads, automatically finding relevant images from the customer’s website, cropping and resizing to generate optimal click-through—and that’s already creating significant value for us and for our advertisers. AI plays a significant role in recommendation across many of our products, including O2O platforms: We can pick out interesting and non-obvious correlations that show up consistently in the data, and use those to make better recommendations.Who would have known, for instance, that Chinese men who drive Audis are far less likely to eat western for than Chinese men of the same age who drive BMWs?
Besides smarter ad serving, recommendations, computer vision and speech recognition, there are other surprising applications of deep learning that we discovered when we turned our deep learning system into a platform for engineers across the company to access. “Platformization” is a really important concept at Baidu. It’s something of an obsession for Jeff Bezos, CEO of Amazon, and you may have heard him talk about it. We agree, and it’s something we implement aggressively.
Let me give you an example of “platformization” at work. At Baidu we created something called PADDLE: it stands for Parallel Distributed Deep Learning platform.Basically, it allowed R&D personnel from across the whole company to make use of our deep learning engine by giving them relatively easy APIs to use. In very short order we started seeing deep learning applied to a wide range of things: Our Infrastructure team used deep learning to predict crashes of hard disks in our data centers, so that with 85% accuracy they could identify disks that were going to crash 24 hours before they did. This actually saves us about millions of renminbi per day. Another team used deep learning to develop a cloud-based antivirus system that could detect malware before it had actually been observed and defined by traditional antivirus companies, with rather effectiveness and so far a vanishingly small percentage of “false positives.” We’re using it now in healthcare, too—for diagnosis from just a layman’s description of symptoms.
The Straddler’s Advantage
I want to finish today by talking about one final thought on lessons from the Chinese Internet, one last idea that I think will be of value to people here in Turkey as you look to take your own valuable treasures out into the world.
When you work at a technology company—whether it’s in the Silicon Valley or Shenzhen, in Austin or Boston, in Beijing or Bangalore—it’s easy to get caught up in the obsessive culture of innovation: To be focused constantly on that next dazzling piece of tech, that thing you hope is going to catch fire with the elusive early adopters. We spend most of our workday interacting with educated, tech-savvy young people, and those of us in our forties—if you’re anything like me—are always worried that we’re out of touch with those young digital natives and their fickle, fast-changing habits. We train our sights too often on them, focusing on the shiny tech, not realizing that the treasures that sparkle brightest aren’t always the most valuable.
Living in a country like China, or anywhere else in the developing world, can remind you that there’s a whole lot more that should be driving innovation—that we shouldn’t be thinking just about putting the next wow-factor gadget or app into the hands of tech influencers. Technology ought to be put to work eliminating inefficiencies, democratizing access and putting the means of production and creation into the hands of the many, freeing us all from drudgery. And in China all around you you see examples of how those jobs are far from finished.
I believe that technology companies should be dedicated to solving these problems—at serving underserved people, and putting the information and the services they need within their reach—but not just because it’s the right thing to do. It is, of course, the right thing to do, and I do lament that it’s something that Silicon Valley seems to have moved away from a bit. So many of the hot new startups seem to me to be solving problems mainly for other affluent and educated people living in the first world.
In China, it’s different, and that’s good—because I also believe focusing on serving the underserved is the smartthing to do: Serving the underserved is an impetus to innovation. I’ve come to realize that Chinese technology companies enjoy what I call The Straddler’s Advantage—the advantage of standing astride two very different markets: One that’s very much like the developed world, and one that still resembles the developing world. I believe that Turkey is in a similar situation.
The first tier cities, cities like Beijing, Shanghai, Guangzhou and Shenzhen, all have very high rates of Internet penetration—close to or even higher than the national average of OECD countries. There are sophisticated users, sophisticated customers, and the tech companies themselves are very much current when it comes to technology: They keep up, despite what you may have heard about China having an almost separate “Intranet,” with all the new companies and all the new technologies coming out of Silicon Valley and everywhere other innovative geography.
Outside of the major cities, it’s a different story entirely:Not only is Internet penetration much lower, but the level of sophistication of users is much lower as well. There are many impediments to using technology. Strong regional dialects or even different Chinese languages are spoken, and while the written languages may be almost identical, input method based on standard Mandarin pronunciation is difficult for some to master. People are more sensitive to bandwidth costs.
It’s not just a urban-rural divide, either: There’s a major age divide that has created a large underserved population in China, among people who never learned the romanization system that’s been taught in Chinese schools since the 70s and that the overwhelming majority of people now use to input Chinese characters on digital devices. A great many people in China over, say, 60, never learned that system, called pinyin, so simply entering text on a device becomes very difficult.
What’s needed, clearly, are simpler and more intuitive interfaces. But serving users like these isn’t a simple matter of taking existing technology and just “dumbing it down.” To solve problems of access you need to go smarter, in fact. It actually places even greater demand on you as a technology provider. Graphic User Interfaces opened up computing to billions of people who might never have mastered DOS. The touchscreen interfaces on our iOS and Android devices are so incredibly intuitive that I’m sure many of you with children or younger relatives remember seeing two- and three-year-olds familiar with those smartphones and iPads going up to framed photos and trying to expand them with their fingers. There’s still a need for more intuitive, more naturalistic interfaces. For inputting Chinese, it was really revolutionary when smartphones allowed writing of Chinese characters, and those systems have developed very well—though they’re hardly very efficient still, and much slower than someone who knows pinyin well. To me, the most natural, most intuitive interfaces are perfectly obvious: Voice and visual.
We’re doing some very exciting work in our Silicon Valley AI Lab in something we call Deep Speech, which I mentioned earlier: Using Deep Learning algorithms in very large neural networks to process huge amounts of recorded speech, so that the system can actually learn to recognize words spoken all sorts of different ways—in noisy environments, with all the hesitation sounds and the pause words and the false starts, stammers, and repetition that vex most of the current systems that have been deployed. We’ve gotten truly amazing results in both English and Mandarin.
But even assuming that we can get speech essentially solved, and solve it in multiple languages, we still have to make actual sense of what’s being said: We need to derive intent from the commands that are given, and for that we need real semantic intelligence. After all, it’s not truly intuitive to have to use Boolean algebra with excluder and connector words for all the search commands we read into a smartphone. No, instead, we need to think of the way your older parents or grandparents use search: They’ll type in full sentences, like “I wonder whether they still have that $1.99 breakfast special down at the International House of Pancakes.”
It means better computer vision—the ability to actually extract meaning from images. After all, all of our smartphones now come equipped with quite good cameras. There’s a little camera icon in the search bar on Baidu’s search app that will let you snap pictures of things and do searches based on inputs. Point it at a QR code and it will resolve to the corresponding page. Take a photo of a book cover and it’ll take you to online reviews and online book stores. Same basic thing if you point it at a CD. But then it gets really cool: Point it at a dress, a blouse, a shirt, a sweater, a jacket someone’s wearing or a handbag they’re carrying and it does a pretty good job of finding matching items for sale on China’s myriad e-commerce sites. Point it at a movie poster and it’ll show you nearest theaters showing that film, and let you pick your seats and buy your tickets in a couple of clicks. And of course you can find similar images to photos you take or upload. When you do that, the results you get aren’t just images with visually similar patterns and shapes and colors: We actually extract semantic information from pictures and give you results based on those. So if you upload, as I recently did, a photo of the Sultan Ahmed Mosque, results don’t just include pictures of the same mosque, but pictures from areas where it’s located, perhaps of the Hagia Sophia museum, and pictures of other Islamic religious architecture which may look completely different. There’s Deep Learning at work here, too.
Speech recognition, natural language processing or semantic intelligence, and visual search are all areas that we think are making the world of information and services much more accessible for ordinary Internet users—and they’re all driving really serious innovation and require significant R&D effort. These are just a few examples: There are surely many, many others.
Internet companies understand that real innovation in technology is about simplifying the lives of users—not complicating them. I think the next great challenge to technology companies will be serving the next billion—really, the next four billion—in the countries of sub-Saharan Africa, Latin America, the Middle East, Western and Central Asia, and South and Southeast Asia. This is where the real user growth will be happening, as Antonella Mei-Pochtler from BCG pointed out in her talk yesterday, but we’ll all have to be smarter if we’re going to capture opportunities in areas that are under penetrated at present, but are seeing fast economic growth. They’re going to have access to the devices: That’s almost a given. Smartphones created by Chinese companies like Xiaomi are full-featured handsets that are ounce for ounce just about everything you’d get in an iPhone 6, for only $200; a perfectly serviceable smartphone now sets you back less than $150.
We can assume that this Next Billion, or Next Two, or Three, or Four billion, will face economic constraints that will mean we need to deliver smarter, more efficient products and services.. But beyond that, there are few generalizations you can safely make: The desires, the habits, the behaviors, the obstacles to access—these will, you can bet your bottom dollar, be very different in different geographies. Companies who come in with a one-size-fits-all mentality, whether they’re marketers or Internet companies, are going to lose out to competitors who understand that serving these markets requires great flexibility, a mentality that embraces hyper-localization. Great innovative potential stands to be unleashed we get out of their comfort zones to better understand the needs of users in the developing world.
Peter Fisk has hosted (designed and chaired) the MCT European Marketing Conference over the last 11 years. Each year it attracts around 2500 marketers from across the region, and best keynote speakers from across the world, to explore the latest ideas in brands and marketing, customers and innovation.
Peter Fisk took 5 minutes during a frantic two days to talk about his hopes and dreams for this year’s event, themed around a global treasure hunt, bringing together 80 marketing ideas over 2 days from 4 regions of the world. The ideas have been found by expert Cool Brand hunters, and crowdsourcing.
He also talks about some of the big opportunities for Turkish business, and companies in every country, to grow in an incredible world of challenge and change. He describes The Monk and The Riddle, and why the journey can be even rewarding than the destination, and some of the best brands and marketers who inspire him right now.
What are best new ideas for brands and marketing in 2016? … How can you apply the ideas to your own business?
From the Atmosphere Bar, 555m high at the top of the world’s largest building, the Burj Khalifa you can sip an African Sunrise cocktail and watch the sun set over a fast changing continent. Below you see the melting pot in the desert sands of Dubai rising again after the bankrupt years of economic crisis. The UAE government last week heard of Festival of Creativity, seeing to inspire local businesses and government agencies to raise their game, to find fast and disruptive ways of innovating, in the hope that at least a few will be ready to showcase local pride at the Dubai 2020 World Expo. There is certainly no lack of ambition. In a project I did for the UAE stock exchange we thought creatively about how to attract more businesses to the region, and to incentivise local entrepreneurs. Innovation is on the agenda of every business, thinking of ways to be different, and leap frog the conventions.
Similarly in Africa, there is a story of innovation. Ethiopia is ow the world’s fastest growing county, with compound growth in GDP of 9.7% over the next 3 years. The Democratic Republic of Congo and Ivory Coast are not far behind. Cities like Nairobi have become digital hubs with a community of tech entrepreneurs motivating each other to greatness. Companies like Safaricom, Africa’s largest mobile phone operator demonstrate the creative thinking. First we saw mobile phones become the de rigour possession of all African tribesmen, but then its use started to proliferate in many ways. SMS text messaging become the most common way to transfer money, and then to pay for goods in general, formalising it as a currency called M-Pesa. Safari com has now become the largest finance company across Africa, and through Daktari which is a mobile-health app with Skype consultations, the latest healthcare provider too.
Here are some great marketing examples from Middle East and Africa, real innovations that had significant impact in their local markets, and with relevant adaption, could be great for your business and market too:
Dubai Museum of Future Innovation, UAE
UAE wants to become the world’s innovative nation by 2021. To showcase its arrival, it will be hosting the World Expo 2020 in Dubai. The nation is focused on building a fund, a platform and a reputation for attracting and growing innovative companies in UAE. The museum was announced in 2015 and plans to open within a year, is one symbol of this vision. It will use rapid prototyping and foresight to create real examples of change. The museum is the first of its kind, and represents a leading example of entrepreneurial governments embracing change and creating futuristic visions for a better world. It will also be the permanent home for the world’s greatest innovations, which will work to stimulate and incubate imaginative solutions to the challenges of future cities, connecting researchers, designers, inventors and financiers under one roof to empower the creative mindsets to test, fund and market their ideas for futuristic prototypes ans service
Farm from a Box, Ethiopia
Farm from a Box provides communities with the tools required to feed themselves and build a strong livelihood. Built from a modified shipping container, each unit contains a complete ecosystem of technologies required to enhance agricultural productivity – from renewable power and irrigation, to training and IT. Powered by renewable energy, Farm from a Box is ideal for any application that requires a comprehensive system that enables sustained local food production, without need for an existing grid. This kit can easily be used to provide local, organic food for a school or community group. It can help jumpstart food production and stabilize a community after a disaster. It can act as an alternative to standard food aid, providing the means for struggling communities to grow their own food source without dependence on outside relief.
Keepod, Kenya
https://www.youtube.com/watch?v=YzlVA_EOPGM
“5 billion people, 70% of the world’s population, are still without access to personal computing. Be a part of the team who set out to bridge the digital divide. Your contribution to this campaign will help provide personal computing that will empower existing projects in the fields of education, HIV prevention, agriculture and human rights in the Mathare slums of Nairobi, Kenya. The Keepod Unite Mathare project is the first implementation of Keepod Unite. The direct impact of our project is going to increase the effectiveness of existing humanitarian activities and create new opportunities for the people living in Mathare. The venture succeeded in crowdfunding through Indiegogo
Kulula Airlines, South Africa
When South Africa’s President Jacob Zuma married for the sixth time, the quick-thinking Kulula Airlines offered free flights to the fourth wife in big families, the country’s new number of official first ladies. People loved the joke, and jibe. It was typical of Kulula, a small low-cost airline owned by Comair. On one flight to Port Elizabeth from Cape Town, just before landing, an announcement said “Welcome to Zimbabwe” which was met by silence followed by laughter. On another flight, the pilot after a rather hard landing asked if any passengers would like to have a go landing the plane instead.
Kulula is one of the 100 case studies in Gamechangers
Lornah Sportswear, Kenya
Lornah Kiplagat was a World Champion road runner. In her native Kenya, that is nothing special, as the roads and dust trails are covered in Olympic medalists and record holders, yet Kiplagat stood out for her bold and brave running style. She gained the name Simba, which is lion in Swahili, and that became the emblem of her sportswear brand. The fabrics of sourced from across the world, and adorned with African style prints, and designed with cuts that are ultra-performance but ultra-fashion too. Her small team of runners who run the brand in each market, have a passion for running African style – natural, unlimited and incredibly successful.
Mellow Cabs, South Africa
Mellowcabs are eco-friendly electric vehicles, manufactured in South Africa from recycled materials. The cabs are powered by electric motor with zero emissions. They also include solar panels, regenerative braking, hydrogen fuel cells, human powered charging, illuminated body panels, and on-board tablet computers (so fairly hi tech, I’d say!). They also gain income from selling advertising space on, and in the vehicles. And they offer free rides creating job opportunities for many south Africans.
Shikun and Binui, Israel
Look at the page facing the sun light. And see how you can benefit from it … The Israel-based power company turned to a more emotional, artistic way to engage people in the potential of solar power. A rather boring pencil sketch suddenly turns into a work of art when held up to the sun.
Stop the Shop, Lebanon
Sakker El Dekkene (Stop The Shop) was launched to encourage the Lebanese to report corruption and quantify incidents involving corrupt practices in Lebanon with the ultimate aim of raising the public debate and exert pressure on politicians to respond. The design scheme aimed to showcase how the entire country is for sale, with a quasi-homage to the illegal & street vendors found in the country.
UN Share the Meal, Syria
If you own a smartphone you can now help nourish refugee children who have been forced to flee their homes during Syria’s prolonged conflict. A new app launched by the UN World Food Programme (WFP) enables smartphone users to help provide vulnerable children in refugee camps in Jordan with vital nutrition. With just a simple tap on their phones, users of ShareTheMeal can choose how much they want to contribute. Developers said that a donation of $0.50 can provide one child with enough nutrition for a day. The concept is to allow people around the world to digitally “share” their meals while having dinner or lunch in a fast and easy way.
Vlisco, Ghana
Vlisco is a global movement of consumers, storytellers, fashionistas, designers and bloggers united by the belief that every Vlisco product is connected to a story. Every product has a name: Vlisco fabrics are named not by Vlisco itself, but by consumers. However, not every fabric has a name (or we don’t know it yet). Because people don’t talk about numbers when it comes to fashion and clothing, we believe that the naming tradition will live on. Every name is connected to a story: Vlisco fabrics often have a meaning attached to them. Vlisco Stories facilitates the sharing of knowledge, feelings, emotions and experiences around Vlisco fabrics and the naming tradition.
Walk for Water, Gambia
Meet Siabatou, a woman from Gambia who must walk long distances every day to get clean water for her family. Like her, many women in Gambia must walk the length of a marathon to reach clean water. Water For Africa is an organization that builds boreholes, a sustainable water source, in villages all over Gambia so that these women no longer have to walk for water. With each donation we can help shorten the distance for every woman in Gambia.
Around the World in 80 Marketing Ideas
This is part of a larger project to find the best marketing ideas from around the world, real and practical solutions which work in one place – and (with relevant adaption) could work in your market too … Copy Adapt Paste! They were sourced through my personal travel experiences (I visited around 50 countries in 2015 as a keynote speaker and expert consultant), through a crowdsourcing program and with the help of two expert treasure hunters Anouk Pappers and Maarten Shaeffer. You can download all 80 marketing ideas in the presentation below:
Kaleidoscope 2016 … the 7 big ideas that will shape customers and markets, drive brands and innovation
Marketing in Europe in 2016 … from healthy chocolate to digital cosmetics and millennial vlogging
Marketing in Asia Pacific in 2016 … from flying shrimp to Aussie farmers and intelligent chopsticks
Marketing in The Americas in 2016 … from cool carrots to cardboard 3D headsets and superhero supplies
Clayton Christensen popularized the term “disruptive innovation” in his iconic book, “The Innovator’s Dilemma,” published in 1997.
The phrase describes a specific way that smaller companies can outcompete and eventually destroy their bigger rivals. And it has become an obsession for entrepreneurs, particularly in Silicon Valley.
But the Harvard Business School professor says the way his theories are thrown around in the tech industry is often just plain wrong, and he’s taken the time to set the record straight in the Harvard Business Review.
To explain, Christensen points out two big tech companies: one that is disruptive (Netflix), and one that is not (Uber).
Let’s look at Netflix first.
The primary reason why Netflix is disruptive is that, when it launched its mail-in subscription service, it didn’t go after the core customers of competitors like Blockbuster. Those customers rented new releases “on-demand,” two things Netflix originally didn’t provide.
Christensen claims that, initially, Netflix only appealed to a few customer groups: “movie buffs who didn’t care about new releases, early adopters of DVD players, and online shoppers.”
For Christensen, this is a hallmark of disruption. A disruptive company targets segments of the population that have been overlooked by its competitors, delivering an inferior (but more tailored) alternative, often at a lower price.
Then, eventually, a disruptive company like Netflix moves upmarket. It keeps the advantages it had at the beginning, and adds the things mainstream customers want. All of a sudden, there is no reason to have Blockbuster anymore.
In the case of Netflix, the huge shift came with the rise of streaming video. Netflix was able to appeal to Blockbuster’s core audience by providing, “a wider selection of content with an all-you-can-watch, on-demand, low-price, high-quality, highly convenient approach.”
And just like that, Blockbuster collapsed.
The reason why disruptive companies are often able to rise so quickly is that their larger competitors overlook them. They are not initially competing for the same customers, so the big guns brush them off — and in Blockbuster’s case, even refuse to acquire them for only $50 million.
But not every company that is innovative is disruptive, according to Christensen.
The example he gives is Uber.
When it launched, Uber didn’t go after overlooked segments of the population, or provide a cheaper alternative to taxis. Uber just made a more convenient taxi system using your smartphone, going after the taxi companies’ core business right from the start. While Uber does now serve people living in areas often overlooked by taxis, they moved more downmarket than upmarket — the opposite of a disruptive company like Netflix.
Uber is innovative, sure, but not disruptive in the way Christensen used the word.
Forbes Magazine recently published a fantastic insight into the world’s Nike’s CEO Mark Parker, inside his office and his mind. Here is an extract:
On Nike’s pristine Beaverton, Oregon, campus, you might mistake him for one of the 21 PhDs who work in the athletic powerhouse’s top-secret research lab, but in fact, it’s Nike’s own CEO, Mark Parker.
Suited in a mix of creative/casual garments (blazer, polo, jeans, Nike Roshe sneakers) and a professorial bearing (quiet intonation, short beard, slight stoop) it’s difficult to square this somewhat unassuming figure with his position as the fourth-highest-paid head executive in the country.
A fanatical devotion to sneaker design and a technical fluency rare among CEOs propelled the 58-year-old Nike lifer to the top perch of the footwear and apparel giant, which has reached annual revenues of $24 billion, up 60 percent since he was appointed in 2006. “Have you heard the Japanese word otaku?” he muses.
“It means being deeply obsessed by the details of something. I relate to that.”
As a track star at Penn State (and an early tester for the magazine Runner’s World) who put in double-digit mileage daily, he used to tinker with his own running shoes, and it was this right-brained DIY sensibility that landed him at Nike’s R&D lab in Exeter, New Hampshire, in 1979 as a young designer.
He went on to work with the late Nike cofounder Bill Bowerman, the hard-edged University of Oregon track coach whose motivational quotes now adorn the walls of Nike stores. Fast forward 34 years later, and Parker is still directly involved in shoe construction, walking into meetings holding his Moleskine MSK.MI -2.30% graph-paper notebook filled with doodles and wearing new prototypes on his feet—to the great alarm of his minders, charged with keeping said prototypes under wraps.
Parker has an uncanny eye for good design, whether it’s the two recent mega hits he green-lit at Nike—the ultralight Flyknit sneakers and the chic body-data-gathering FuelBand—or the works of surrealist painter Mark Ryden, whom he counts as a friend and whose pieces he collects. Parker’s cutting-edge sensibility is in part derived from his social network of art and music luminaries—which includes Kanye West and artist Tom Sachs —whose members congregate at salon-like gatherings he occasionally throws.
As he looks forward to the 2014 Olympics and World Cup (Nike will be producing shoe models and apparel that will be used by the athletes), his greatest advantage may be his ability to synthesize the input of disparate influences, from lab engineers to downtown artists. And beneath it all, he can still hear the old refrain his former boss, Bowerman, challenged young designers with: “Is that the best you can do?”
What are best new ideas for brands and marketing in 2016? … How can you apply the ideas to your own business?
I recently visited Guiyang, one of China’s fastest growing cities. You could call it the centre of the world actually. Over half the world’s population live in a circle 4100km around this place!
The Asian tiger is still roaring, and whilst growth is not quite what it was, China and India are still racing ahead, 7% growth in 2016, and on course to become the world’s most important markets. Alongside Indonesia and South Korea, they are incredibly vibrant spaces, where entrepreneurs are thriving, local businesses testing their wings, and western companies are venturing ever more. I love working in Asian markets – there is such a passion for doing better – for learning and innovating, and nowadays less about learning from America, much more about outthinking them. The vast majority of consumers now have disposable income, with a tremendous thirst for fashion and gadgets to demonstrate their progress, and indulge life to the full. Whilst Asia now has a well educated and hard-working workforce, it still lacks some of the confidence to develop new strategies, and aesthetic creativity to develop winning brands. When it does, it will dominate the global economy.
Here are 10 treasures from the Asia Pacific region, to help inspire your thinking:
Aussie Farmers Direct
AisleOne was launched recently as the world’s most advanced shopping aisle available anywhere anytime on your smartphone. Australia’s farmers have come together to do things which retailers traditionally could not, offering the widest and freshest range of food, delivered directly to your home. Since 2006, the network has grown from a three people and one milk float, to a company with 250 franchisees who provide 250,000 households across Australia.
Aussie Farmers Direct is one of the 100 case studies in Gamechangers.
https://www.youtube.com/watch?v=pHi4_bRiIHA
Baidu Chopsticks
In rapidly growing markets, its easy to take shortcuts. And some restaurants have been known to not always use the freshest produce in their woks. Baidu, the Chinese internet company, has found a solution, but making Chop Sticks smart. The intelligent sensors within these hi tech implements can tell a piece of meat that is past its best, or beansprouts that have lost their crispness. An example of how technology is now finding practical applications in our physical daily lives, and not limited to interactions with a screen.
Disney English
In Shanghai recently, I was struck by how many local Chinese are now talking English. I asked them how long they have been learning, and where the best schools are. The result was a surprising one. Disney. Not watching Mickey Mouse, but going to local branded schools – for everyone from young kids to business professionals. Language teaching is big business, but with few known or trusted brands. Disney has recognised that it can help bring the world together with the same voice, and maybe have fun learning too!
Frank by OCBC
Frank is the hip, stylish and trendy brand dripping with obvious youth appeal, that comes from one of Singapore’s largest and most traditional banks, OCBC. The concept was based on deep research into the emerging banking needs of Generation Y, innovating new products, designed a cool new store and did it all with heaps of style. Most visible is the vast range of colourful and personalisable payment cards, displayed in the shop looking more like the latest vibrant collection of Swatch watches. The name stems from the phrase “frankly speaking,” and is intended to convey honesty, sincerity and simplicity.
https://www.youtube.com/watch?v=pOnBW5Z4G6s
Gogoro SmartScooter
Taiwan’s Gogoro is building the “Tesla of scooters” … The SmartScooter promises a ride like no other … Awesome performance, easy and fast battery swapping, endless personalization possibilities are just the beginning … And from a marketing perspective, whilst the product oozes lifestyle design, and is also good for the environment, the brand proposition focuses on what matters most to the rider, speed … And finally, if the style of the bike doesn’t catch your eye, just look at the website … beautiful!
Haier Codo
Haier is the world’s largest white goods business. The Chinese company was born out of old and bankrupt manufacturing business, but used a spirit of entrepreneurship – and a structure that created hundreds of profit-sharing small business units – to revitalise itself and grow rapidly. From affordable cookers and fridges, it has stretched far and wide, from robotics to new ways to do life’s essential tasks. One example is Codo, the world’s first “pocket washing machine” along with a rapid stream of innovations.
Astana, Kazakhstan
When my plane landed in the middle of the Kazakh steppe I was expecting very little. 10 years ago it was cold barren earth, nothing but an old landing site for Soviet spacecraft. Now Astana, the new capital of Kazakhstan could be mistaken for the wealth, scale and amition of cities like Abu Dhabi. At the heart of Eurasia, between Russia and China, and with a nation the size of Europe, it is important too. On meeting the prime minister, we discussed the opportunity for the nation to be a “gamechanger”, both in the way it serves its citizens with the most digitally connected social infrastructure, and also plays a new pivotal role in geopolitics.
https://www.youtube.com/watch?v=X4nmk_WO2UM
Lucky Iron Fish
In Cambodia, a considerable proportion of the population is iron deficient. This has increased rapidly since people have moved from cooking in iron pots to stainless steel, and can lead to anemia, weakness, impaired child development. But one little fish can change all that. The fish symbol is lucky to many, and so throwing it into the cooking pot was deemed a positive thing to do. Within 9 months of the campaign being launched, there was a 50% reduction in reported illness, showing that the best solutions can sometimes be incredibly simple, practical and physical.
Moa Beer
Josh Scott comes form the Marlborough region of New Zealand, where his father developed one of the island’s best wineries. When it came time to have over the business to Josh, there was a problem. Josh didn’t like wine. So he started brewing beer. Great, premium beer made in the finest wineries, and the detail normally associated with wines. The Breakfast Beer kicks off the day, followed by 8 different flavours. Even the IPO in 2012 was different, with the prospectus featuring a rather sophisticated lady, in fishnets and heels, pouring over the economics of kiwi beer.
Moa Beer is one of the 100 case studies in Gamechangers.
NTT DoCoMo
Who says the Japanese can’t make great advertising? The flying shrimp commercial was certainly one of the craziest in the world this year, with 6 million views. It was also won of Asia’s few success stories at Cannes Lions Festival of Creativity this year, the annual awards for the advertising world. Whilst many phone companies emphasise “speed” DoCoMo go further. “Three-Second Cooking: Explosively Fast Fried Shrimp” is a one-minute story featuring two “TV chefs” who load up a highly-pressurised double-barreled canon with shrimp, to fire through bread crumbs, egg, oil and a flamethrower. The action is set to a suitable death metal soundtrack. Their meal cooks in three seconds flat.
In 1983, conceived as a lifestyle store by Muneaki Masuda, Tsutaya began as a shop renting and sellingbooks, videos, and music. Since then, it has become an all-encompassing Japanese pop culture platform. In 2011, the company behind the Tsutaya project, CCC, introduced an evolved form of the Tsutaya bookstore in Daikanyama. Based on its “T Point” membership program, the brand continues to suggest a new lifestyle concept.
https://www.youtube.com/watch?v=JCdBuj6S1dE
Xiaomi MiBand
Lei Jun is often called the new Steve Jobs, not least because of the way he sees the future, and inspires the crowds to come with him to explore innovations they never realised they needed. 3 years after launching his first smartphone, the MiPhone, Xiaomi is now the world’s third largest smartphone brand. But that’s not even Lei Jun’s business, he sees himself much more in the knowledge business, harnessing digital media and information to make life better. The $10 MiBand fitness tracker is just one example, available now worldwide at a fraction of the price of the Jawbone or Fitbit. Health and fitness is addictive, and the data that flows from the user, is a highly accessible way for consumers to start exploring the Xiaomi ecosystem.
Xiaomi is one of the 100 case studies in Gamechangers.
Around the World in 80 Marketing Ideas
This is part of a larger project to find the best marketing ideas from around the world, real and practical solutions which work in one place – and (with relevant adaption) could work in your market too … Copy Adapt Paste! They were sourced through my personal travel experiences (I visited around 50 countries in 2015 as a keynote speaker and expert consultant), through a crowdsourcing program and with the help of friends Anouk Pappers and Maarten Shaeffer. You can download all 80 marketing ideas in the presentation below:
Whilst the best ideas and innovations might seem to be the monopoly of digital start-ups, there is no reason why more established, and physical, businesses can’t be as successful. This is the premise behind a new business innovation program that I am currently facilitating for business leaders across Europe. It brings together the disciplines of design thinking and new business model to develop gamechanging strategies for more dramatic and sustainable growth. In three phases it is co-located at the Hasso-Plattner Institute in Potsdam, Madrid’s IE Business School, and Nordic Executive Academy in Kolding.
Design thinking is a funky name for a simple approach to customer-centric problem-solving that can be applied to any aspect of business, not just products. At its heart are three simple principles – human, creative and real – learning from the customer’s world (deep diving into what really motivates to people, through practical observation and individual discussions), diverging before converging (giving space to explore new ideas, suspending judgement particularly on ambiguities), and then quickly making ideas tangible (through pictures, models and prototypes, which then become the focus for iterative development).
Similarly, business model innovation is not new. Back in the 1959, Xerox created an incredibly powerful copier, but found that few companies could afford the high price of the new machine. By moving to a subscription-based model, low rental fee then pay per copy above a certain number of sheets, it became attractive, and an incredible success. Combining design thinking, with the well-known approaches of Alex Osterwalder and others, we worked through an accelerated approach to creating their futures, inspired by new insights into their existing and potential customer, and parallels in other markets.
Learning from Li & Fung’s virtual sourcing network, an online optician is now exploring how to change its industry’s supply chain. Inspired by UberEats, a food producer is exploring new trends like street food and home delivery. With a touch of Tesla’s Supercharger Network, a power company is rethinking how to roll out charging models for everyday use. Building on Cemex, a horizontal drilling company is focused on reducing flooding in areas at risk. Learning from construction firm Skanska, an ad agency is designing a new business model to share client success. Borrowing ideas from Jonny Cupcake’s t-shirt shops, an exhibition centre is rethinking its space and how to sell it, and the Nespresso business model is helping an industrial valve maker is to explore new markets.
What really matters, is how to apply all these great ideas to your own business – whilst you have the precious moments to think about it, and the expert guidance on hand. This is why through the program, we develop your own new business strategy – how to drive growth, using all the insights and techniques which we explore. The outcome is a practical, personal roadmap for the future of your own business, and how you will make it happen.
Here are some examples of the real innovations emerging from the most recent program
How to develop an integrated virtual supply chain for retailers across Europe
Developing an accelerated innovation lab for pharmaceutical companies
Extending a food brand into new categories of snacking, street food and fresh food
Changing the business model for watching sports events in South America
Redefining horizontal drilling as environmental protection for local communities
An ad agencies that embraces social trends to be a real-time marketing partner for clients
Providing accelerated relocation services for companies to help them grow in new markets
A regional newspaper reimagined as a digital news platform that inspires its community
New mums and babies online store telling a new story about Happy Families
And much more …
Here are a few images from the most recent program:
Exploring the future of your own business …
Group work exploring future trends and consumer insights across sectors
Developing customer value propositions, based around “jobs to be done”
Choosing the right business model to engage customers and drive growth
Using pyramid thinking to tell a better story, then communicate it in more human ways
The masterplan for innovating the world of eyewear is revealed
Learning from each other, inspired to create a better future …
Explore more about the Business Innovation Program organised by GeniusWorks and available as open programs customised to your business, and also with IE Business School and Nordic Executive Academy
The death of books has long been discussed. In a digitally-enabled, time-compressed world, there are few moments to get lost in a novel, and most factual knowledge is accessed faster and better online. Whilst sales and margins decline, publishers continue to hang on to a seemingly lost cause. More business books were published last year than ever before. Yet even my own publisher, Wiley, still seems obsessed with its page and word count, irrespective of content, visuality or reader experience.
Last week in Munich, I hosted the Future Book Forum 2015. With the support of Canon, we brought together more publishing houses, more printers and other parts of the supply chain, than ever before. We had two days to create the future of books. And whilst most industry insiders seem further obsessed by reducing their costs to sustain their existing mindsets, we broke free of that to explore how publishers could actually grow, physically and digitally, in our new world.
Where to start? The consumer – those great people who read books, or at least used to. We explored different personas – from young digital natives who may never have even seen a book, but are organically connected to their Snapchat, Netflix and Facebook apps – to the enlightened boomer, who has discovered the joy of reading the news online, or Facetiming their grandchildren.
As we explored (in much more depth, and variation) the different consumers, we found that the drivers for knowledge – be it news or messaging, education or entertainment, business information or how to guides – are as strong as ever. Consumption has changed – in media and format, in time and place, in sequence and spontaneity, in duration and perceived value, co-created and shared – but they actually want more, not less. The challenge is do so in the right way, physically as well as digitally.
We also learnt from other places – for example, Disney‘s ability to build incredible character-based brands, from Mickey Mouse to Hannah Montana, or more recently Veronica, and then to leverage those assets across all the different media, building fan bases, and using multiple business models. Of course, its not the books, but the videos, the online games, the live events, which make most of the money. So what’s the brand, which the publisher leverages? Certainly not their own imprint, rarely the author or book title (except in the case of blockbuster titles). In the business world, I make around 2% of my income from books, but the book is fundamental in making the 98%. But the publisher is just not interested in helping me do that, or share in the rewards.
Lego is another great example. Whilst anybody can make a good quality bucket of colourful plastic bricks today, it recognised that its brand needed to do more for people. Around 60% of Lego users now subscribe to the online community, where photos of the best constructions are proudly shared with peers across the world, whilst seeing other efforts prompts builders to go further, buy more, and engage deeper. Whilst Lego almost went too far with some of its licensed merchandise for Star Wars, it has now found its mojo again, particularly in creating more high value characters, particularly for girls. Of course, other ventures such as Legoland, online gaming, and even the Lego Movie have provided great brand extensions, to make the content go further.
So what about books? Whilst most publishers just don’t get it, there is a new generation of collaborators – publishers and printers – who are creating fabulous innovative solutions. This is particularly in the case of school books. From Turkey, to Austria and Germany, school books are increasingly personalised to the individual needs of teachers and students – creating a compilation of diagnostics, learning tools and printed books which are unique to the needs of each person. For example, using smartphone-based diagnostics to test progress, online platforms to share videos and webinars, and then driving printed books to support revision in key areas. Books using digital printing so that they can be personalised, on demand, and printed anywhere are very little extra cost. Take this a step further, like in Denmark, and you can bring together big data on every student, every teacher, every lesson, to share learning and best practices, and improve the education of every child. That’s education, the same kind of models are emerging in travel books, cookery books, business books, and more.
In fact, one thing my own publisher, Wiley, did to support my recently launched Gamechangers book was to support the development of a digital hub. This is not simply about promoting the book, but about bringing it to life in new and ongoing ways. Each of the case studies become live and interactive, with direct feeds with latest news and performance, videos enhance the written ideas, and toolkits can be downloaded free. Readers can get involved too, adding their own videos and presentations, voting in regular competitions, discussing and contributing to the big ideas, and adding new ones. And then there are events, masterclasses, webinars and coaching too. This keeps it fresh, topical, interesting and relevant. It also builds a community of people around a big idea.
The Future Book Forum got highly practical on the second day, developing new business models for different types of customers, built on book experiences that combine the best of physical and digital. Imagine you are running a marathon, and the types of knowledge and inspiration you might need when training, connecting with others, learning from old hands, planning your travel, and also the types of photo book souvenir you would value afterwards. Imagine a future travel guide that combines that best of experts and the crowd, that combines printed guides and maps with pop up videos and discounted entry tickets. One you start thinking about the customer, publishers become innovators.
At the end of the two day forum, I brought all the best ideas together, to build a business case for change. On the supply side, we have a case for cost reduction and efficiency (in order of most financial impact):
reduce risk – digital printing allowing much smaller print runs (e.g. batches of 100 rather than 10,000!), ability to test ideas, to focus marketing on the best sellers, eliminate poor performers and thereby have much less failure.
reduce waste – fewer returns and books destroyed (typically 40% of old books printed are pulped due to non sale), due to small print volumes, and a “long tail” of books printed on demand, anywhere and at anytime.
reduce space – less stock on shelf and in warehouses, allowing retailers to reduce costs and operate more flexibly, unlimited by their physical size, location or distribution reach.
reduce time – faster time to market, making books far more topical and relevant to current issues and trends, and minimising slow cross-border distribution (e.g. order a book in some places and it’s delivered in 6 weeks!).
However the far more significant opportunities for publishers, and printers too, lies on the demand side, responding to changing consumer needs, and driving new revenues and profitable growth (in order of financial impact):
increase services– building brands around communities of interests (e.g. marathon runners, rock climbers), including events, innovative multi-media platforms and branded partners, to deliver richer hybrid experiences
increase channels– allowing publishers to sell directly to audiences (both individual and corporate), maybe with direct added value by authors (like Kickstarter!), with lifestyle brands (e.g. fashion stores, travel companies).
increase frequency – exploring new business models, such as membership and subscription (e.g. buy a gift of a book every month), licensing, mixing and embedding the best content in more places, and updating.
increase price – enhancing the perceived value of books through personalisation (people will pay more, just look at photo books), special editions (collector editions to fans), bundling, souvenirs and gifting.
Most publishers and printers focus on efficiency improvements (an obvious one would be to shift to digital printing, where the price per copy is marginally higher, but the overall cost savings big), however the real opportunities to turn a declining industry into a re-energised and booming one, is to focus on the growth opportunities.
A full description of the business case and its opportunities for publishers to reimagine and revitalise their businesses is available.
This was my third Future Book Forum, which has become the international event for bringing publishers and printers together, and working practically to move the industry forwards. Last year we created a 5 year roadmap for how we needed, and wanted, to shape the industry. Next year we continue on that exciting journey.
https://www.youtube.com/watch?v=4_z2v9GhmWQ
What did I learn? Books are not dead. There are incredible opportunities for publishers in a digital world, where data and knowledge, physical and digital, local and global, is more in demand than ever. The publishers, or at least the enlightened ones, departed with a glint in their eye, having just seen a brighter future.
The best brands engage their customers in their passions, facilitating their collective aspirations.
This goes far beyond seeking to build relationships with customers. Few customers trust brands, let alone want a relationship with a company. More likely, customers would like to connect with people like them, who share their passions and aspirations. Brands that facilitate communities of interest, therefore become more relevant and valuable. Think Nike+ Running Club sharing a love of running, or Harley Owners Group on a ride together. However the best brands go even further.
The best brands build movements.
When people really care about something, they start to promote their passion – be it spiritual enlightenment, the love of adventure travel, belief in a better society, or a protest against something. Participants become activists, crusading to achieve something more. Dove achieved this, creating a “campaign” not by the brand but by the millions of real women who believed in real beauty. Challenger brands are naturally good at this, built around the desire to change something, to make it better. Positive Luxury, an online lifestyle brand community, mobilises its participants to demand more from brands, in particular that they are more sustainable in their impact, and then curates those that do.
In his book “Uprising” Scott Goodson explores the concept of movement marketing. Whilst some brands – like Toms One for One and even Raspberry Pi – have engaged huge audiences in their social-related initiatives, it is charities who have been more effective at building their brands around a shared cause, rather than just doing good
“Movements” are communities with an active purpose, not just to share something, but to come together to achieve more. It might be a protesting or political movement like Greenpeace or Occupy, or it might be a collaborative goal, like ParkRun provides free local runs or Fairtrade. Movements tend to require more organisation than passive communities, and therefore provide more scope for brand’s to play a valuable role.
The movement builds the brand by identifying and aligning with an idea that is rising culturally. It articulates the idea more clearly, acting as a catalyst to bring people together and get involved. The movement requires organisation, a platform through which people can join and connect, have more influence and stronger voice together, rally and bring about change.
Movements challenge the conventional marketing model because they are more about the group, than individual. Instead of selling, they promote sharing. Instead of the brand’s purpose, they promote the group’s purpose. However this is entirely in line with the power shift to customers, and collective potential of social media. One of my clients, Philosophy skincare brand, has a deeply engaged audience motivated by the brand’s positive outlook on life, and a loyalty to each other, as much as to the brand itself. Rather than just satisfying their own needs, consumers are much more motivated to support each other, to give through gifting rather than buying, and to promote more positive attitudes and lifestyles.
Movements are about bringing together people with a shared passion, and facilitating markets on a mission.