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Thought Starters

Thought Starters: social media, Apple, banking and changes to employment and income

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 the competing social media platforms and their roles, whether Apple can innovate, banking and its relationship with fintech and changes in employment and income among other things. 

Robinson Meyer revisits Reid Hoffman’s look at social networks and the parallels he draws between them and the seven deadly sins:

“Social networks do best when they tap into one of the seven deadly sins,” the LinkedIn co-founder and venture capitalist said. “Zynga is sloth. LinkedIn is greed. With Facebook, it’s vanity, and how people choose to present themselves to their friends.”

Research from Social Fresh, Firebrand Group and Simply Measured points to Facebook being comfortably ahead of other social media platforms in terms of ROI:

Social Media Platforms that Produce the Best ROI According to Social Media Marketers Worldwide March 2016

Whilst Snapchat is making growing inroads among younger audiences in the US, Instagram for the moment is proving a more popular medium for advertisers according to L2 Think Tank’s research:

Snapchat vs Instagram Adoption Among Brands Worldwide by Industry

Twitter recently reclassified its mobile app as a news service rather than social media in Apple’s App Store. Pew Research’s recent findings point to how the services have a different relationship with news content with Facebook driving more traffic whilst users referred by Twitter typically spending more time with the visited content:

On cellphones more visits come from Facebook

Given the increasingly important role that Facebook plays in distributing content, it’s no surprise that commentators cried foul when Gizmodo reported that Facebook was suppressing conservative news. A more careful reading of the news by Tyler Cowen and Ben Thompson suggests this isn’t quite as significant as the headlines suggest:

This, then, is the deep irony of this controversy: Facebook is receiving a huge amount of criticism for allegedly biasing the news via the empowerment of a team of human curators to make editorial decisions, as opposed to relying on what was previously thought to be an algorithm; it is an algorithm, though — the algorithm that powers the News Feed, with the goal of driving engagement — that is arguably doing more damage to our politics than the most biased human editor ever could. The fact of the matter is that, on the part of Facebook people actually see — the News Feed, not Trending News — conservatives see conservative stories, and liberals see liberal ones; the middle of the road is as hard to find as a viable business model for journalism (these things are not disconnected).

James Allworth profiles Apple’s business strategy and suggests that the company’s success is one of the key things holding the company back:

And it appears that Apple has fallen into exactly the same trap. Rather than start anew — with a beginner’s mind—what the above reveals to me is that they’ve tried to take the last paradigm and just jam it into the new one. The old has bled into the new. The result, at least as it stands now: just like Microsoft did, Apple knows what needs to be built — a phone-disrupting device. It’s just that they can’t bring themselves to let go of the past in order to do the job properly.

Whilst the Apple Watch hasn’t proved the breakthrough success for Apple that the iPhone provided, Neil Cybart’s analysis of Apple’s R&D expenditure points to something big coming soon:

Apple R&D Expense (Annual)

At the more nascent end of the technology ecosystem, Jared Friedman’s analysis of applicants to the Y Combinator programme provides a valuable window into the type of startups we’re likely to see more of in the very near future. Think more apps, SAAS businesses and platforms based on messaging, Slack and virtual reality among other things:

Messaging & Communications

For those of you working in startups looking to improve your product and people management, you’d be well advised to read Mike Davidson’s account of life as Vice President of Design at Twitter. He covers a lot of ground so I’m not going to try and summarise it, but it’s well worth checking out.

On the other hand, if you’re looking for a more nuts and bolts approach to improving your digital presence, Nick Kolenda’s 125 easy tweaks provides a good starting point, even if you don’t agree with everything he has to say.

The banking sector won no popularity contests over the last  9 years with its practices fueling the global financial crisis. James Surowiecki reviews moves to reform the sector suggesting improvements have been made but there’s still some way to go:

Of course, there’s much about Wall Street that Dodd-Frank has not changed. Bankers still make absurd amounts of money. Hedge-fund and private-equity managers still benefit from the carried-interest tax loophole. The big banks, though smaller, are still too big. “If you wanted financial reform to radically downsize the financial sector, or thought it was going to make a major dent in income inequality, you’re bound to be disappointed,” Konczal says. And Dodd-Frank’s work is still unfinished: many of the rules it authorized have yet to be written, and the banks are lobbying to have them written in their favor. As Ziegler told me, “The progress that’s been made is precarious. It can be unravelled.” But precarious progress is progress. Regulation involves a constant struggle to keep rules in place and to enforce the ones that are there. Dodd-Frank shows that that struggle is not necessarily a futile one: sometimes government really does regulate business, and not the other way around.

In Fintech circles there’s a lot of talk about the power of startups to disrupt the banking sector but Josh Constine suggests that these startups may actually strengthen rather than undermine your relationship with your bank:

But what many of these startups have in common is that they all rely on connecting to your existing bank to fund your accounts with them or receive money. Rather than shun the startups, the incumbents have built bridges to let you hook fintech products into your bank accounts.

The result is that while banking is changing rapidly, you might be more reluctant to change which bank you use, according to several fintech founders and VCs I spoke to.

There’s been increasingly vociferous discussions  about the impact that automation will have on employment over the long term. Josh Zumbrun’s analysis of US figures provides an indication of where things are heading.  Employment among knowledge workers and non-routine manual workers is proving much less susceptible to automation and is showing much stronger rates of growth compared to employment with routinised workflows:

The Rise of the Knowledge Worker

Pew Research figures point to the polarisation of wealth in American society as not simply coming from growing income and assets among the wealthiest but also due to the relative decline of the country’s middle-income households:

The middle class is shrinking nearly everywhere

Ed Hawkins’ data visualisation of climate over the last 150 years provides a valuable reminder that now is not the time for us all to put our heads in the sand:

Global temperature change (1850-2016)

Elisabeth Zerofsky’s profile of Marine Le Pen provides a reminder of the growing tide of nationalism in European politics and attempts to try provide a more “palatable” face on a movement that was previously at the fringe of European politics.

I am keen to hear your thoughts any of the above, whether you vehemently agree or disagree, so please don’t hesitate to use the comments field.

The featured image is a MOMO piece commissioned by the City of Sydney.

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Thought Starters

Thought Starters: the outlook for the global and the Chinese economy, India’s middle class, the growing importance of migration and publishing in the digital age

Thought Starters provides me with a chance to look through articles, research and opinion pieces, highlighting interesting trends, developments and changes in the world you and I live in. This edition looks at forecasts for the year ahead, China’s economy and India’s middle class, migration’s growing role in contemporary societies, publishing in the digital age and lots more.

The Economist has published its forecast for the global economy which sees a further shift in momentum from emerging to developed markets, although India, China and Indonesia are seen as top performers:

Emerging markets losing their grips

Malcolm Scott takes a closer look at the slowdown in China’s economy, suggesting that it’s not nearly as significant as some of the more vociferous critics are suggesting:

China's slowdown in context

India as The Economist’s figures above suggest, is one of the powerhouses of the global economy and the country’s growing middle class is seen as providing enormous opportunities for local and international brands. The problem is there are wide variations in estimates of India’s middle class depending on the spending power you apportion to the Indian rupee as the Research Unit for Political Economy shows:

Some estimates of India's middle class

The Wall Street Journal in its profile of demographic trends has taken a closer look at the globe’s growing migrant population. Kim Mackrael and Charles Forelle in their broader analysis of immigration contrast Canada’s more assimilationist and economically driven policies with those of Europe. Whilst I’d argue that Europe is currently in a very different position to Canada due to its proximity to Syria, it does provide some valuable pointers as the continent faces an ageing population:

A growing migrant pool

Angus Hervey provides an important reminder that for many important human development indicators things are on the up (although this is certainly no argument for complacency). Among the indicators he points to are reductions in poverty, malnutrition, polio, infant mortality and AIDS deaths and improvements in universal education, internet access and financial inclusion:

Global poverty has reached a record low

Felix Salmon looks at the maturing of the fintech sector as it  focuses on providing tangible improvements on services offered rather than rhetoric about turning the financial sector upside down:

The problems such fintech companies are trying to solve aren’t the type that can be tackled by a few hyperactive coders in a garage. Rather, they require dozens of different skillsets, not to mention the ability to manage them all. In that sense, the startups are becoming much more like the banks they’re seeking to disrupt. That’s Lunn’s Great Convergence. No one believes the banks are going to solve these problems. The trillion-dollar question is, can the fintech companies do something important and socially useful before they, like the banks, become bogged down in regulation and bureaucracy.

Om Malik reports on how the movement towards a software enabled world has moved a lot of business categories into a winner takes all market (eg Amazon, Uber, Google). It’s also worth adding that innovations in technology and business strategy can see even these advantages quickly fall over time if management aren’t vigilant:

This loop of algorithms, infrastructure, and data is potent. Add what are called network effects to the mix, and you start to see virtual monopolies emerge almost overnight. A network effect occurs when the value of a product or service goes up with the number of people using it. The Ethernet inventor Bob Metcalfe called it Metcalfe’s Law. Telephone services, eBay, and Skype are good examples of the network effects at work. The more people who are on Skype, the more people you can call, and thus the more likely it is that someone will join.

While physical book sales in the US are on the up according to Nielsen BookScan figures, ebooks are heading in the opposite direction with a consolidation around the Kindle and Kobo platforms according to Michael Kozlowski’s report:

In a few short years most digital bookstores will be out of business and Amazon and Kobo will likely be the only players left standing.  The only digital bookstores that will survive will be companies offering both hardware/software solutions to encapsulate people into their walled gardens.  The destruction of the digital book market has already been set in motion and nothing will stop from the industry from collapsing.

In 2013 Amazon created a media storm by announcing they were working on drone delivery with commentators debating whether this was a real story or a public relations stunt. Two years on and the pathway to drone delivery looks clearer. Dan Wang looks at where drone logistics have proven successful and where we’re likely to see it make real inroads in the near future:

Amazon Drones vs Current Delivery Options

As we start a new year we’re seeing various commentators giving their prognosis for the year ahead. Fred Wilson and Bob O’Donnell make good starting points.

Finally, it’s worth watching Extra Credit’s review of China’s Sesame Credit which has seen the Chinese Government collaborate with Tencent and Alibaba on gamifying good behaviour by Chinese citizens. A case of Nudge theory heading in a distinctly dystopian direction:

The featured image is an INTI mural from the Artesano Project in Nagua, Dominican Republic.

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Thought Starters

Thought Starters

A mixed collection of materials looking at societal trends and the impact of technology on the way we live.

Slate looks at separatist movements in Europe in light of the recent decision by Scotland to maintain its ties with the United Kingdom:

Separatist

McKinsey’s forecast for the luxury market points to the growing role of emerging economies. Luxury brands shouldn’t count on a free ride though with Chinese consumers proving less receptive to Western luxury brands than in the past according to a report in The Guardian:

Luxury

In an interview with the Wall Street Journal, venture capitalist Bill Gurley has raised concerns about the ‘burn rate’ of startups and the potential risks of a tech bubble  bursting. We may not see this happen in the immediate future but a correction does look increasingly inevitable.

The Financial Times profiles the emerging FinTech sector and the challenges it poses to the incumbents in the banking and financial services sector.

Bitcoin is one of the technologies that is providing a disruptive force in the financial services sector, with Fred Ehrsam from  Bitcoin wallet provider Coinbase giving an introduction to the cryptocurrency:

GlobalWebIndex figures confirm the commonly held view  that tablets are frequently shared whilst mobile phones are more closely associated with the individual:

Devices

Comscore research points to mobile apps taking a dominant role in the time  American’s spend with their smartphones with pointers on the when where and why of app usage:

Mobile App Usage

Results from Shopify points to  50.3% of traffic coming from mobile and just 49.7% from computers among customers using their eCommerce solution. Whilst this doesn’t purport to represent a  statistically sound sample of all eCommerce transactions, it does provide another data point supporting the need for companies to adopt a mobile first strategy:

Mobile Commerce

Code and Theory’s Dan Gardener and Mike Treff call for an approach to responsive design that goes beyond the screen size of device use, encompassing factors such as location, time of day and duration:

Responsive

The social network Ello launched in March of this year but is now beginning to reach critical mass, with consumers attracted by the promise of a system that isn’t based on pervasive tracking and surveillance. That’s not to say it doesn’t have its critics with Andy Baio pointing out the funding provided by venture capital which may see its more ethical policies watered down with time.

Ello

eMarketer figures point to social media taking a growing overall figure and share of UK’s advertising spend, with Facebook dominating brand’s spend on social networks:

UK Social Ad Spending

 GlobalWebIndex figures on Instagram users doesn’t provide any great surprises with steady growth, younger audience and strong indexing among middle and higher income earners:

Instagram

GlobalWebIndex also provide figures for the often overlooked Viber with 12% of the mobile audience use Viber each month,  providing a valuable reminder of  the diversity in the mobile messaging space.

ReadWrite looks at which countries have the fastest internet with South Korea, Japan and Hong Kong taking the top three places:

Fastest Broadband

Ezekiel J. Emanuel provides a fascinating opinion piece arguing that we should be placing more emphasis on quality rather than quantity of  life. Putting this into a more personal context, he stresses that we would like only palliative rather than curative care after the age of 75:

But here is a simple truth that many of us seem to resist: living too long is also a loss. It renders many of us, if not disabled, then faltering and declining, a state that may not be worse than death but is nonetheless deprived. It robs us of our creativity and ability to contribute to work, society, the world. It transforms how people experience us, relate to us, and, most important, remember us. We are no longer remembered as vibrant and engaged but as feeble, ineffectual, even pathetic.

Mark Buchanan, drawing on Jaron Lanier’s Who Owns the Future, warns of societal problems associated with the internet with the concentrations of power and the disenfranchising of large sectors of society. Another book to add to the reading list.

We’re seeing telecommuting increasingly promoted as providing flexibility to employees with the potential to better combine the demands of work and home, but it’s not a one sided coin. Lenika Cruz provides a personal account of how working from home aggravated her agoraphobia:

To be clear: Working from home didn’t cause my agoraphobia, it just enabled it. As someone who already had latent anxiety issues, I lacked incentive to prove myself wrong about all the imagined catastrophes that could occur if I were “trapped” somewhere. Telecommuting offered me the retreat I craved, but it helped to reinforce my avoidance patterns. And so the agoraphobia blossomed.

The featured image is a DALeast piece that was created as part of the Dunedin Mural Project and found on Arrested Motion.