Thought Starters: growth of mobile stickers, evolution of media and changes in energy use

Thought Starters provides me with a chance to review and highlight some of the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at growth of mobile stickers, evolution of media and its implications for business and consumers and a look at the energy sector’s attempts to address climate change among other things:

Stickers have become a staple of the Asian mobile sector and are beginning to make their presence felt elsewhere. Connie Chan looks at how it’s shaping new forms of communication and how WeChat and Line are looking to capitalise on their use:

And sometimes stickers can convey what words cannot! This form of visual communication has become so popular in Asia — especially in China’s WeChat and Japan’s LINE [Line] — that it is not uncommon to see a deep thread of multiple messages without a single word. They’re not just for those crazy young kids. More notably, stickers are commonly used in professional, not just personal, chats as well. Not so frivolous after all. In fact, stickers are so core to the success of Line, that its CEO actually credited them as the “turning point” for that app. He shared that it took Line Messenger almost four months to find its first two million users … but after stickers were launched, it took only two days to find the next million. The company now makes over $270M a year just from selling stickers.

The inexorable rise of social media can be seen in its growing importance as consumers’ main source of news (and the inevitable demise of television news and newspapers):

Growth of social media as a main source of news

GlobalWebIndex’s research points to markets where ecommerce is most popular among consumers with a mixture of developed and emerging markets holding sway:

Top 10 online commerce markets

Tal Shachar plots how the evolution of digital marketing has eroded FMCG companies’ hold on consumers purchasing and is beginning to open the way for new market entrants and expanding choice for consumers:

Since the dot com boom, the promise of the internet in fundamentally changing distribution, marketing, advertising and consumption has never fully lived up to the hype.  While the major web services sucked the air out of classifieds and newspaper advertising, digital seemed unable to truly slay the beast that is TV advertising. And although consumer choice became more plentiful, the process of shopping for, purchasing and receiving products did not change as much as many had hoped. We still lived in an age determined and defined by the limitations and inefficiencies of the marketing funnel. But the rise of new distribution and marketing channels, on-demand infrastructure and consumer tracking stands to dramatically reshape this funnel, collapsing it in on itself, opening up new battlegrounds for brand competition and ushering in significantly more consumer choice. Time to get shopping.

Media spend on television advertising has shown robust health despite the growth in alternative digital advertising formats. Matthew Ball warns that this is not the time for complacency among the television networks as advertisers are offered a growing array of alternatives to the 30 second television spot:

This is certainly impressive, but it can’t go on forever. Not only is digital’s share of total consumer media time spent already at 50%, you have to believe TV will cede share if digital and mobile continue to grow. And they will.

The television business may say that’s fine – the loss/cannibalization of share doesn’t mean the nominal loss of spend as long as total ad spend increases. Yet this defense, too, is somewhat off the mark. Contrary to common belief, advertising has never been a growth business. For the past hundred years, national ad spend has been confined to a stable 1.1-1.5% of GDP (excluding WW2).

One advertiser that’s vying for a share of the television advertising pie is Snapchat. Christopher Heine profiles the company’s ambitious moves into online advertising as it looks to justify its $20bn valuation:

That growth is essential if it is to hit its goals. According to recently leaked documents from inside the company, Snapchat, a $59 million business as of last year, aims to haul in $250 million to $350 million this year and $500 million to $1 billion by the end of 2017. To accomplish that, the company will have to convince a greater slice of the population that they need another social network on their mobile devices; it must persuade consumers that an app that opens as a camera—often confusing to first-time users—is a vital addition to their digital lives. And it is no small feat to go from more than 150 million daily users to, say, 300 million. Just ask Twitter.

Ethereum is arguably the brightest light in the rapidly emerging blockchain sector and the Decentralized Autonomous Organization (DAO) is one of the most interesting innovations to emerge from the platform. DAO offered an investment vehicle without the intermediaries traditionally associated with financial services taking advantage of the application of smart contracts. Unfortunately flaws in the DAOs code enabled hackers to siphon off funds. Whilst this doesn’t exactly make for a ringing endorsement of smart contracts and blockchain technology, it has made for an important learning exercise for the community and has raised some important questions as Matt Levine comments:

The most fascinating thing about the DAO hack may be the way it exposes these tensions. To true believers in smart contracts, there is no problem here. The system is fine; the failures — writing bad code and not anticipating this attack — were trivial, mere human error.Next time, write better smart contracts and you’ll be fine. To those true believers, changing the code after the fact — even to conform it to almost-everyone’s reasonable expectations about how the DAO would work — would be a betrayal of the smart-contract ideal.

On the other hand, to the humans who read the English descriptions of the DAO and invested their money based on their reasonable expectations, their losses probably do seem like a problem. You can’t really base the financial system of the future on computers rather than humans, on trusting to immutable code no matter what happens. Financial systems are supposed to work for humans. If the code rips off the humans, something has gone wrong.

An interesting counterpoint to the earlier Tal Shachar article is research which points to a decline in the number of startups launching in the US and James Surowiecki points to the damage this may do to the long term health of its economy:

But there is a catch. While Stern and Guzman show that high-growth firms are being formed as actively as ever, they also find that these companies are not succeeding as often as such companies once did. As the researchers put it, “Even as the number of new ideas and potential for innovation is increasing, there seems to be a reduction in the ability of companies to scale in a meaningful and systematic way.” As many seeds as ever are being planted. But fewer trees are growing to the sky.

Climate change is one issue the world cannot simply wish away. We are beginning to see growth in renewable energy aided by the falling price of solar energy. Unfortunately the transport sector has been less successful in switching to low carbon technologies. Tom Randall profiles a valuable look at key trends in the energy sector, highlighting some of the successes and the hurdles faced in the move toward a greener future:

http://www.bloomberg.com/news/articles/2016-06-13/we-ve-almost-reached-peak-fossil-fuels-for-electricity

The tragic death of Jo Cox has brought the issue of Britain’s  European Union referendum into sharp relief. John Oliver has some relevant and rather amusing words to say on the topic it and it should give you some idea of where I stand on the issue:

The featured image is an Ellen Rutt mural in Cleveland, Ohio and found on The Inspiration.

If you’ve got any thoughts or opinions on any of the above please let me know.

Thought Starters: integrations, chatbots and the content glut

Thought Starters provides me with a chance to review and highlight the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at integrations as a means of reaching consumers, the growing hype around chatbots, a critical look at content marketing, growing income inequality among other things:

Ofcom has released the latest edition of its Adults’ media use and attitudes providing a window into consumers’ use of technology and media in the UK. It’s a great reference document that’s well worth bookmarking for future reference, particularly given its inclusion of longitudinal and demographic data:

Device used most often for specific online activities

With the growth of smartphones, the development of mobile apps has became one of the dominant paradigms for reaching and engaging with consumers. Unfortunately, seemingly every other business has had the same idea but the development of a growing array of integrations opens the door for new channels which Hugh Durkin explores:

Native apps are perfect for these frequent, heavy use jobs. But that doesn’t mean you need a mobile app for every product or service. Ask yourself — will people really want to put your icon on their homescreen?

That’s why companies like Uber are looking beyond homescreen icons. Instead of asking users to come to them — download and install an app — they’re deeply embedding their services where users already spend their time.

Chat bots are being increasingly talked up as the next big route to market for businesses with the recent Facebook Developer Conference seeing a lot of this attention focusing on Facebook Messenger’s growing capabilities:

If you want a more balanced view of the opportunities for chat bots, I’d suggest giving Benedict Evans and Connie Chase a listen on Andreessen Horowitz’s podcast:

A valuable complement to the a16z podcast is Dan Grover’s article where he looks at the success of WeChat in China and suggests that it’s less about chatbots and more about a better user experience:

The key wins for WeChat in the above interaction (compared to a native app) largely came from streamlining away app installation, login, payment, and notifications, optimizations having nothing to do with the conversational metaphor in its UI.

Whilst artificial intelligence and machine learning are expanding the capabilities of chat bots and virtual assistants, there are plenty of situations where humans continue to offer a better experience. Ellen Huet explores the services that are relying on the human touch (for the moment):

A handful of companies employ humans pretending to be robots pretending to be humans. In the past two years, companies offering do-anything concierges (Magic, Facebook’s M, GoButler); shopping assistants (Operator, Mezi); and e-mail schedulers (X.ai, Clara) have sprung up. The goal for most of these businesses is to require as few humans as possible. People are expensive. They don’t scale. They need health insurance. But for now, the companies are largely powered by people, clicking behind the curtain and making it look like magic.

Much of the attention in the West has focused on the dominance of WhatsApp and Facebook Messenger, but many Asian markets have seen the development of their own indigenous platforms. This can be seen most vividly in China as detailed by TechinAsia:

China's most popular mobile apps March 2016

Rex Sorgatz provides a very personal account of a return to his old home town of Napoleon, North Dakota. Whilst many of aspects of the town have remained unchanged in 25 years, Sorgatz explores how the internet has changed the experience of teenagers living at the geographic periphery of American society:

I cannot shake the sentence, which seems to contain between its simple words a secret key, a cipher to crack my inquiries into technology and change. Napoleon didn’t have a drive-in in the 1950s, or a mall in the 1980s, but today it definitely has the same social communications tools used by every kid in the country. By that fact alone, the lives of teenagers in Napoleon must be wildly different than they were 20 years ago. But I lack the social research finesse of Boyd, who could probably interrogate my thesis about technology beyond anecdote. So I change the topic to something I know much better: television.

Ezra Klein interviews one of my favourite media and technology commentators Ben Thompson, providing a valuable guide to how he views the world:

Inbound marketing has gained a bit of unwanted courtesy of Dan Lyon’s book Disrupted with its first hand account of his time working for HubSpot. Alexandra Samuel looks at the broader social costs associated with pumping an endless stream of unwanted content out into the internet:

But from a personal perspective, it sucks. For every email newsletter you’re genuinely thrilled to receive, you likely have dozens that merely clutter up your inbox, where they linger unread. To get to the Facebook posts that have been shared by the actual genuine human beings you know, you have to plough through a feed that’s cluttered with posts that somebody paid to put there. (A problem that’s only going to get worse, now that Facebook has given its official blessing to branded content on verified pages.) And unless you read blog posts while wearing glasses that block your peripheral vision, you’re likely to get sucked into clicking on one of the irresistible headlines that now frame nearly every page of content on the Internet — headlines that somebody paid to put there, and which almost always lead to something way less interesting than the headline suggests.

Tom Whitwell explores what is almost certainly the most neglected member of the marketing mix, price:

Price is the crudest, and most subtle, message you can send about your product, so it’s worth getting it right.

Amazon is one of the behemoths of the tech world and it’s the company’s AWS which is likely to prove its brightest star. AWS’s revenue growth points to the opportunities in selling the 21st century equivalent of shovels in a gold rush, particularly when you get it right:

AWS is the fastest growing enterprise technology company ever

Cade Metz looks at how data center operating systems (DC/OS) are enabling more efficient use of data centres which fuel the internet with adoption rapidly spilling outside Google where the technology was originally developed:

But this also is about improving the lives of software engineers. Any company that hits 50 to 100 engineers, Stoppelman says, almost has to embrace this kind of container architecture. It must break down its software into tiny pieces that can by run across myriad machines. Otherwise, things get too unwieldy. Tools like DC/OS and Kubernetes make it far easier to build that kind of distributed software. And the importance of this should not be underestimated. After all, software that runs across dozens or even hundreds of machines—think Google and Twitter and Apple Siri—drives the modern world.

We’ve seen a lot of hot air come out of the startup sector over the last six months with a drop in their valuations and entrepreneurs becoming more cautious about raising funds. Venture capitalist Bill Gurley reviews what this means for founders, investors and employees alike:

As we move forward, it is important for all players in the ecosystem to realize that the game has changed. Equally important, each player must understand how the new rules apply to them specifically. We will start by highlighting several emotional biases that can irrationally impact everyone’s decision making process. Next we will highlight the new player in the ecosystem that is poised to take advantage of these aforementioned changes and emerging biases. Lastly, we will then walk through each player in the ecosystem and what they should consider as they navigate this brave new world.

Markus Poschke and Barış Kaymak look at the reasons for the growing concentration of wealth in the US, concluding that technology is the main driver, followed by tax cuts and more generous public transfers:

Top 1% wealth and income shares, 1960-2012

Daniel Knowles profiles Sub-Saharan Africa’s economic ups and downs for The Economist. Whilst much of the recent success has been driven by commodity exports, there are signs of a broadening economic base which will be sorely needed given Africa’s young and rapidly growing population:

Average annual % change in GDP and Exports in Sub-Saharan Africa

Richard Wike teases out some of the cultural differences between the US and Europe including attitudes to individualism, free speech, religion and adultery. One of the interesting pointers is that richer countries tend to be less religious, with the US being an outlier in this general trend:

Generally, poorer nations tend to be religious; wealthy less so, except for the US

The recent waves of refugees arriving in Europe has put wind in the sails of many nationalist groups seen very recently in the Austrian elections, with employment high on supporters list of concerns. Given this, it’s interesting to see Hu, Chen and Singh among the most common surnames of Italian company founders in a country not particularly known for its ethnic diversity:

Most common surnames of Italian company founders Jan-Aug 2015

The featured image is a Claudia Walde aka MadC mural photographed in London by Marco Prosch and published in WideWalls.

Thought Starters: WeChat, Android fragmentation, media consumption and Ethereum

The following is a collection of articles and thought pieces highlighting interesting trends and changes in the world you and I live in, with an emphasis on technology.

Connie Chan’s profile of WeChat for Andreessen Horowitz is a strong reminder that there’s plenty of tech innovation outside Silicon Valley which can change the world.

The significance of WeChat can be seen in Benedict Evans’ analysis of the growing dominance of mobile and more specifically smartphone. As handsets increasingly come to dominate the digital landscape there’s been a flow on effect on a range of new tech innovations that are leveraging associated hardware and software innovations:

Growing scale of smartphones

Cities around the world are competing to be seen as the most friendly for internet startups. Startup Compass have looked to rank cities by their performance, funding, market reach, talent and startup experience in the 2015 Global Startup Ecosystem Ranking. It’s no surprise that Silicon Valley comes out on top:

Startup Ecosystem Ranking

OpenSignal have updated their findings on fragmentation within the Android ecosystem which provides an illustration of the broad array of devices and challenges in adapting to the operating system:

Android Fragmentation

Ofcom’s Communications Market report provides a valuable window into the changing media and technology usage of UK consumers. A great starting point if you’re doing research into use of TV, video, radio, telecoms and web based content.

Liam Boluk looks at consumers’ changing consumption of music in the US and how the industry is attempting to adapt to new business models:

Consumer Spend on Recorded Music

Ethereum has launched its blockchain based cryptocurrency out into the public realm incorporating a virtual machine and smart contracts. This along with other blockchain based platforms will push the internet into new realms inside and outside the financial sector. Check out the video below, Vinay Gupta’s introduction and Ethereum Frontier Guide if you want to get more actively involved.

Big news this week was Google’s announcement of a restructure that has seen the creation of Alphabet as a holding company with various subsidiaries for its various business arms. Ben Thompson takes a closer look at the motivations and likely implications of the move.

Marco Arment takes a critical look at the increasingly intrusive online media sector.  He goes on to argue (despite being a publisher himself) that this approach provides growing justification for consumers’ use of ad blocking software despite the negative effects this is likely to have on media creators:

“All of that tracking and data collection is done without your knowledge, and — critically — without your consent. Because of how the web and web browsers work, the involuntary data collection starts if you simply follow a link. There’s no opportunity for disclosure, negotiation, or reconsideration. By following any link, you unwittingly opt into whatever the target site, and any number of embedded scripts from other sites and tracking networks, wants to collect, track, analyze, and sell about you.”

The featured image is Cesarea, a piece by Bosoletti in Casarano, Italy and published in StreetArtNews.