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Thought Starters

Thought Starters: looking critically at mobile apps, venture capital, how Volkswagen ***ked up and the decline of pornography

The following is a look through articles, research and opinion pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology.

Consumers are spending more of their time on their smartphones in mobile apps which inevitably leads many media owners to see the development of their own as a means of increasing consumer engagement. Priya Ganapati warns that this approach is flawed in many cases with the development of mobile web offering providing a much better use of resources:

“Apps aren’t magical universes. They are part of a platform that is not viral, resource-hungry and hard to grow. So why not bet on the mobile web instead?”

Sam Altman and Paul Graham look critically at the financial fundamentals of startups in a market where valuations don’t necessarily match up with future prospects:

“Here’s a common way startups die. They make something moderately appealing and have decent initial growth. They raise their first round fairly easily because the founders seem smart and the idea sounds plausible. But because the product is only moderately appealing, growth is ok but not great. The founders convince themselves that hiring a bunch of people is the way to boost growth. Their investors agree. But (because the product is only moderately appealing) the growth never comes. Now they’re rapidly running out of runway. They hope further investment will save them. But because they have high expenses and slow growth, they’re now unappealing to investors. They’re unable to raise more, and the company dies.”

Also looking at the startup universe is Ben Thompson who points to less successful venture capitalists as being increasingly squeezed between angel investors below and more traditional investors above:

“So it is with venture capital: once startup funding requirements were reduced, the superior information and the willingness to hustle of angels and incubators earned the trust of the big companies of tomorrow, reducing more and more venture capitalists to dumb money hardly worth the 20% premium. The inputs to the Silicon Valley system have been changed, and we’re only now seeing the effects, and that should be a cautionary tale for just about everyone who thinks they and their industry are safe from the Internet’s impact.”

Matt Roskoff contrasts the falling prices of consumer electronic hardware with the rising price of television and radio services:

Prices for Electronic Goods and Services

Paul Kedrosky suggests that the Volkswagen emissions scandal may have been the result of cultural norms within the engineering department rather than a deliberate move on the automotive manufacturers management:

“It is still possible, of course, that we will learn that the engineers were under orders from management to beat the tests by any means necessary, but based on what we now know, that seems implausible. It’s more likely that the scandal is the product of an engineering organization that evolved its technologies in a way that subtly and stealthily, even organically, subverted the rules.”

Credit Suisse in their annual Global Wealth Report looks at the current spread of financial wealth across countries and regions including the disparities between the wealthy and the poor:

Global Wealth Pyramid

We are seeing a broader array of jobs affected by technology, as smarter systems enable more technically complex tasks to be automated. MIT Professor David Autor looks at the costs and benefits of these changes, suggesting that the opportunities will outweigh the threats if societies ameliorate the negative effects with education, taxation and transfer programmes.

The migrants pouring into Europe has focused largely on the plight of refugees fleeing civil war in Syria. What Alex Tabarrok points to is that by focusing on the plight of refugees, we fail to acknowledge the benefits that more open borders would provide both to people trapped in less developed societies and to global society as a whole:

“Closed borders are one of the world’s greatest moral failings but the opening of borders is the world’s greatest economic opportunity. The grandest moral revolutions in history—the abolition of slavery, the securing of religious freedom, the recognition of the rights of women—yielded a world in which virtually everyone was better off. They also demonstrated that the fears that had perpetuated these injustices were unfounded. Similarly, a planet unscarred by iron curtains is not only a world of greater equality and justice. It is a world unafraid of itself.”

Pornography has been getting plenty of column inches lately thanks to Playboy’s announcement that it will no longer be publishing full nudity, reflecting falling profitability of ‘legitimate’ operators (no tears shed here). Whilst the industry has long been pointed to as technological leader, recent changes mean that the sector is becoming something of a technological laggard according to Cade Metz:

“With the rise of mobile devices and platforms from the likes of Apple and Google, not to mention the proliferation of free videos on YouTube-like porn sites, the adult industry is in a bind. Money is hard to come by, and as the industry struggles to find new revenue streams, it’s facing extra competition from mainstream social media. Its very identity is being stolen as the world evolves both technologically and culturally.”

Another area where technology has changed the balance of power is music where we’ve seen a democratisation of the tools of production. Art Tavana looks at GarageBand’s role as a stepping stone for many budding musicians looking to get their music out and about.

If you find yourself in London between now and the start of January, I’d definitely recommend visiting Ann Veronica Janssens’ yellowbluepink installation at the Wellcome Collection. A great exercise in disorientation:

The featured image is the SatOne mural Insomnia in Mannheim, Germany and published in Graffuturism.

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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.

We’re seeing a rapid growth in some of the developing world’s major cities as rural populations migrate in search of better economic opportunities. Joel Kotkin takes a critical look at this phenomenon, pointing out that there in many cases isn’t the necessary demand needed for unskilled labour that will lift these populations out of poverty:

Here’s the difficult truth: Most emerging megacities, particularly outside of China, face bleak prospects. Emerging megacities like Kinshasa or Lima do not command important global niches. Their problems are often ignored or minimized by those who inhabit what commentator Rajiv Desai has described as “the VIP zone of cities,” where there is “reliable electric power, adequate water supply, and any sanitation at all.” Outside the zone, Desai notes, even much of the middle class have to “endure inhuman conditions” of congested, cratered roads, unreliable energy, and undrinkable water.

Research from  Betsey Stevenson and Justin Wolfers points to money being able to help buy happiness, with this correlation appearing not to even tail off for more wealthy consumers:

Life satisfaction and income

There has been a lot of talk about disruption, particularly from Silicon Valley with commentators pointing to the threat this process poses to market incumbents. Research from Ian Hathaway and Robert Litan looks to pour some cold water on this view. Among the research’s finding are  that the US is seeing a declining number of start ups which are faced with growing failure rates whilst older enterprises are taking up a growing share of the overall number of businesses:

Companies by Age

Jamil Anderlini reports on growing property prices in China with warnings of a property bubble.  This could have serious negative effects on the country’s economy. A frightening prospect given the size of the country’s population and economy and the role on effect for the rest of the world:

Property Price Comparison

Benedict Evans looks at the impact that mobile is likely to have on the World’s population, with its impact reaching well beyond the developed world consumers associated with the PC driven internet:

Global Adult Population

There’s been a fair bit of noise recently about the declining role of the tablet with lacklustre sales and phablets arguably providing a good enough solution for many consumers. In response, Walt Mossberg jumps to the tablets defence, arguing that there are enough use cases to ensure that the format will see continuing success in the coming years:

I believed then, and now, that the success of the iPad depended not on whether it would wholly replace the laptop, but on whether it could be the best, or most convenient, computer in enough common scenarios for which the laptop (and, to a lesser extent, the smartphone) had been the go-to choice.

Android continues to be the dominant mobile operating system among global consumers market share. Despite this, Semil Shah argues that the development of an Android mobile app should run a distant second for the majority of startup businesses:

The common wisdom used to be iOS first, Android second — but I think it needs to be amended right now to the following: “With the caveat there may be a small handful of apps which need to be on Android early, mobile startups should be iOS first (of course) and resist the urge to make Android second too soon.” For a product early in its life cycle, the return on investment often can’t be justified.

Pew Research’s work points to consumers as being less willing to discuss serious issues via social media when compared to other social channels leading to what they’ve dubbed the ‘Spiral of Silence.’

Social Debates

Competition is hotting up in the ride sharing business with Uber recruiting drivers from its competitor Lyft – a not unusual practice in a competitive market. What Farhad Manjoo points out is that despite the best effortsof Uber and Lyft, there’s little in the way of differentiation between the two which face serious risk of commodification.

 The Atlantic profiles Google’s experiments with drone delivery suggesting that Amazon’s well publicised forays into this area weren’t simply a publicity stunt. Whilst the technology is interesting, what I found most interesting was the argument that this would enable a move towards a more access based society

Those ideas, in turn, became key planks in the original conception of the “sharing economy,” imagined as one in which the world could make much less stuff because efficient, digital logistics would let each asset be used by more people.

“It would help move us from an ownership society to an access society. We would have more of a community feel to the things in our lives,” Teller preached.

In the ‘something to look forward to’ basket is Juno director Jason Reitman’s Men, Women and Children which looks like taking a less than flattering look at the role of technology on the way we live our lives.

The featured image at the top of the page is a piece by by Paulo Arraiano in Djerba, Tunisia and found on StreetArtNews.

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Thought Starters

Thought Starters

A mixed collection of materials looking at societal trends, the role of technology and other content that has resonated with me.

The World Bank has combined population and GDP per capita statistics in a graph, providing an indication of current spending power as well as an indication of future opportunity.

Real GDP Per Capita and Share of Global Population

Gartner has updated its Hype Cycle which gives an indication of maturity and adoption of different technology platforms around the world.

Gartner Hype Cycle

American consumers are now faced with a growing array of video content through a range of platforms but consumer spending has actually decreased according to analysis from Liam Boluk.  In a world of all you can eat subscriptions such as Netflix and Amazon Prime, consumers are arguably choosing to spend their money elsewhere.

Entertainment Industry Ecosystem

Andreessen Horowitz has announced a $50 million investment in BuzzFeed, gaining mixed reactions from the news media.  Felix Salmon warns that comparing BuzzFeed to traditional media sources risks missing the business’ true potential.

The best way to think of BuzzFeed’s various products, then, is probably as a proof of concept: it’s a way to show advertisers that the company is able to reach a large, young, mobile, social audience in a multitude of different ways. The ability to reach those people is something of a holy grail for advertisers, who are therefore very willing to pay top dollar to anybody who can help them achieve their goal. The idea is that if BuzzFeed can reach a broad audience with its various editorial products, it can then sell that secret sauce to advertisers, and help them reach the same audience, using the same tools.

There’s been a lot of noise lately about the unbundling of mobile apps in Western markets with the launch of Foursquare’s Swarm and the splitting out of Facebook Messenger. Taylor Davidson warns against seeing this as a natural conclusion with app extensions, deep linking and notifications providing a countervailing force to this trend.

And as the platforms, hardware, and operating systems in mobile continue to change how people use their devices, don’t be surprised if the rationale behind unbundling shifts as well.

I think we think of unbundling as the end-state, but instead, it’s a process that leads to it’s reversal. Unbundling creates the incentives for rebundling.

The constant, as usual, is change.

We’ve seen strong growth from shared economy based enterprises such as Uber and Airbnb which use rating systems as a means of engendering trust on the part of consumers. Danny Crichton in an article for TechCrunch warns of the corrosive effect of these computational trust systems on wider society.

Our growing need to feel connected is confirmed by research from the US which found that 60% of US internet users were almost always connected.

Three in five internet users are almost always connected

British communications marker regulator Ofcom’s report The Communications Market 2014 is a treasure trove of insights into the UK market. Find below some key insights.

Reinforcing the earlier message of the always on lifestyle is the following graph looking at consumers engagement with media and communications during their waking hours.

Media Consumption Activity

Looking at how media and communications time is spent across different age cohorts provides clues as to how we can expect media to move in the future.

Media by Time

A similar analysis of internet consumption by device type points to the importance of smartphones for younger audiences.

Device usage internet

Providing further data on the UK market in the 4GEE Media Living Index which provides figures on mobile data usage from EE customers. Among the interesting data points are the following which point to the strong presence of Tango in the mobile messaging space and Soundcloud in audio streaming.

Instant Messaging Audio Analysis from Comscore points to Snapchat moving from outsider to well established member of the communications space in the US having long passed what Comscore considers critical mass in the 18-24 aged audience segment.

Snapchat PenetrationPew Research Center’s analysis of Twitter traffic provides an interesting breakdown of social communities and how they interact, converge and/or diverge. Something well worth considering when we see issues emerge that have the potential to bring us together or divide us.

Twitter CommunitiesMalcolm Gladwell’s look at organised crime among immigrant groups in the US point to this ‘career’ as being seen as an important enabler of upward mobility in what makes for an enjoyable read.

The point of the crooked-ladder argument and “A Family Business” was that criminal activity, under those circumstances, was not rebellion; it wasn’t a rejection of legitimate society. It was an attempt to join in.

If you find yourself in London between now and the end of August, do check out Lucy Sparrow’s The Cornershop in the Columbia Road area recreating various household goods in felt. You can find an interview with the artist over at Folksy.

felt-food

The featured image is Beautiful Bridge #1 by Sabina Lang & Daniel Baumann in Recoleta, Buenos Aires.

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Thought Starters

THOUGHT STARTERS: CONTENT THAT HAS GOT ME THINKING 13

There’s been a fair amount of coverage over the last week looking at the mobile web/mobile app divide.  Matt Gemmell provides four different classifications of mobile apps running from web apps (explicitly running in a general-purpose browser) through to fully native classifications (without an HTML/CSS user interface). He goes on to look at the pros and cons of the different options.

What really kicked things off though was Flurry’s release of statistics which point to mobile apps taking a greater share of the time Americans spend on their mobile phones.

Apps Continue to Dominate the Mobile Web

Microsoft has released an infographic which give you an idea of the mobile browser and app split as well as giving an indication of which of the major Western countries are heavier users of their smartphones.

Time Spent Using Phones Online Per Month

Chris Dixon has used Flurry’s figures to raise concerns about the trend as signalling a move away from a more open web, with Apple’s App Store and Google’s Play Store acting as potential gatekeepers.

Steve Schlafman looks at the ‘Uberification of the US service economy’ as startups deliver app based business models that bring together discovery, order, payment, fulfillment and confirmation in a closed loop.

On-Demand Mobile Services

Benedict Evans looks at the rapidly evolving mobile environment, pointing to the issues of discovery and identity as areas that we are still looking for solutions to evolve and/or mature.

A less mobile centric picture of the online landscape in the UK is provided by the following infographic, again from Microsoft.

Where the UK Spends Its Time OnlineBoth Forrester and We Are Social are giving a plug for the sometimes neglected Google+ as part of brand’s social strategy.  Engagement levels are good, even if the user population is dwarfed by that of Facebook.

Mobile will drive growth in media usage worldwide, with television and PC based internet access showing respectable increases, with print advertising being the major loser according to ZenithOptimedia’s forecast for global media quoted in Econsultancy.

Contribution to global growth in adspend by medium 20132016

The release of the Amazon Dash is a great example of Amazon’s continuing quest to reduce consumers’ barriers to purchase.

The world is seeing increases in inequality in income and wealth with Occupy Wall Street’s drawing attention to the top 1%. Priceonomics looks more closely at the figures and finds that it’s the top .01% that are really taking the cake.

Top wealth shares decomposing the top 1%The featured image is by eko