The Players in the Tech War of 2012 - Apple (Steve Jobs/Tim Cook), Facebook (Zuck), Google (Larry Page) and Amazon.com (Jeff Bezos)
Massive disruption is coming, and the only question is whether your firm is going to cause it or fall victim to it. Disruption is not easy--either to create or to confront. We have no illusions about that.
But in the spirit of helping established firms best serve their customers, we offer seven ways your firm could disrupt its own industry, raising the standards of customer experience and creating new opportunities for growth:
1) Totally eliminate your industry’s persistent customer pain points.
Each industry has practices that drive customers crazy.
Technology providers drive customers crazy with technical support that often requires long waits on hold and hopelessly complex interactions (“Just find the serial number on the back of your device and type that into the space provided along with your IP address and the exact wording of the error message you encountered”).
Unsurprisingly, this is the exact type of practice that causes customers to believe a company is behaving stupidly.
What practices exist in your industry that drive customers crazy? How do all companies in your industry behave stupidly? Identify these types of practices, and wipe them out.
Think: can we turn our process or perspective around, to look through the customer’s eyes as though they were the company and we were the customers?
2) Dramatically reduce complexity.
As we write this in November 2011, a company we have been tracking for some time--Simple, formerly known as BankSimple--is trying to take a machete to the insanely complex and confusing world of consumer banking.
Recognizing that banks do a pretty good job of managing money but a poor job of managing customers, Simple has been designing vastly simpler customer interfaces and tools.
Simple plans to partner with, not compete against, established banks. They’ll manage the customers while their banking partners manage the money.
The more complex the processes and practices in your industry, the greater your opportunity to gain competitive advantage by simplifying them. Yes, doing so will be very hard. But that’s the whole point; the first firm to do so gains tremendous advantages.
3) Cut prices 90 percent (or more).
Incremental change doesn’t disrupt an industry; radical change does. Radical price reductions require radical new processes and business models. Smartphones and tablets create numerous opportunities to identify these. Recently we replaced a $500 marine navigation unit with a $20 iPad app that works better.
You don’t cut prices by 90 percent through marginal improvements in existing products. You do it by asking,
“What problem are we trying to solve for the customer, and how do these disruptive forces create opportunities for us to solve it in a far more efficient manner?”
4) Make stupid objects smart.
We didn’t think this one up. The race is on to make everything smart, and the dumber your products were to begin with, the greater the opportunity to make them smart.
Think of a garbage dumpster that calls central dispatch when it is full, eliminating the need for the customer to do so or your office to send a driver out unnecessarily. That same dumpster could warn the customer when it is overweight, and point out that it would be cheaper to empty it now than to further overfill it.
No offense to dogs, but their collars could alert owners when the dog wanders away, barks excessively, or jumps on the furniture.
Light bulbs could flash before they burn out. Baseballs could announce how fast they were thrown. Plants could politely request water when they are too dry, or shout out when you try to overwater them.
Take every product you sell, and make it smart…or accept the fact that you must forever more compete on price and accept low margins.
5) Teach your company to talk.
Apple's Siri personal assistant on the iPhone allows you to have a conversation with your phone. Your iPhone can now access the Internet as well as the information it stores, both understanding and responding appropriately to your statements.
Flash-forward two to five years from now. What if your company could talk to customers? We don’t mean that your employees talk on behalf on the company. We mean that a digital, computerized persona speaks on behalf of your firm.
It takes orders. It provides support. It answers questions. It upsells. It issues refunds. All of this, and more, in response to verbal requests by customers.
The toughest part of this challenge is not technical, although a few problems still need to be solved.
The tough part is knocking down the walls that separate your databases and departments. It’s deciding whose product gets cross-sold, who gets “credit” for sales, and who “owns” the customer.
Our view is simple. No one owns the customer, and you either do what’s best for the customer or you will lose him. But the real question we want to put forward is this: what happens if your competitors’ companies talk, but yours doesn’t?
6) Be utterly transparent
Think: not just no secrets, but also no spin.
The concepts of social influence and pervasive memory will make it increasingly difficult for companies to hide from dissatisfied customers, negative reviews, and faulty products.
What if your company didn’t simply try to stop hiding, but instead radically embraced the truth? How might it impact your culture to decide that your firm would be the most powerful force in your industry making certain that every speck of the truth was obvious to every customer, analyst, and reviewer?
Would it change your reward systems? Would it impact employee motivation? Might it cause changes in the kind of employees you attract and retain?
We’re pretty opinionated in this regard. The truth is coming, and there’s nothing you can do about it. But most firms won’t recognize this until it happens. Better to get far out in front while confusion reigns.
7) Make loyalty dramatically easier than disloyalty.
According to Don Clark writing in his Wall Street Journal blog, Intel executive Mooly Eden once asked an audience how many had cellphones, and then how many were married.
Then, he asked if any of the married people would be willing to hand over their phone if their spouse lost his or hers. None would. “That is my point,” said Eden. “That is personalization.” By definition, when companies act smart they are personalizing the way they interact with and serve customers. Once you start delivering personalization, you create immense opportunities to make loyalty more convenient than disloyalty:
- You can store customer preferences, and act on them.
- You can save the customer time, money, or effort--especially by eliminating repetitive tasks.
- You can provide auto-replenishment of needed supplies.
- You can monitor products remotely, and service them before they break instead of afterwards.
Think about every major purchase decision your customers face in your industry. How can you make it easier for customers to remain with your firm? Now, think even bigger. Can it be five or ten times easier? Subtlety can be lost on today’s customers.
The challenge is to make loyalty so much more convenient, so radically easy, that customers won’t even consider switching to a competitor. Ever.
COMMENTARY: When you talk about industry disruption you cannot help but mention four companies that in the throngs of industry disruption: Apple, Google, Amazon.com and Facebook. To state this as clearly as possible: The four American companies that have come to define 21st-century information technology and entertainment are on the verge of war. Over the next two years, Amazon, Apple, Facebook, and Google will increasingly collide in the markets for mobile phones and tablets, mobile apps, social networking, and more. This competition will be intense. Each of the four has shown competitive excellence, strategic genius, and superb execution that have left the rest of the world in the dust.
Amazon, Apple, Facebook, and Google don't recognize any borders; they feel no qualms about marching beyond the walls of tech into retailing, advertising, publishing, movies, TV, communications, and even finance. Across the economy, these four companies are increasingly setting the agenda. Bezos, Jobs, Zuckerberg, and Page look at the business world and justifiably imagine all of it funneling through their servers. Why not go for everything? And in their competition, each combatant is getting stronger, separating the quartet further from the rest of the pack.
Everyone is a customer of Amazon, Apple, Facebook, or Google, and most probably count on all four. This passion for the Fab Four of business is reflected in the blogosphere's panting coverage of their every move. ExxonMobil may sometimes be the world's most valuable company, but can you name its CEO? Do you scour the Internet for rumors about its next product? As the four companies encroach further and further into one another's space, consumers look forward to cooler and cooler products. The coming years will be fascinating to watch because this is a competition that might reinvent our daily lives even more than the four have changed our habits in the past decade. And that, dear reader, is why you need a program guide to the battle ahead.
Over the next few years, the Fab four will infiltrate, digitize, and revolutionize every corner of your life, taking a slice out of each transaction that results. This is a vision shared by all four, and it hinges on three interrelated ideas.
- First, each company has embraced what Steve Jobs, the late Apple CEO and co-founder, has branded the "post-PC world"--a vision of daily life that is enabled by, and comes to depend on, smartphones, tablets, and other small, mobile, easy-to-use computers. Each of these companies has already benefited more than others from this proliferation of mobile, a shift that underlies their extraordinary gains in revenue, cash reserves, and market cap.
- Second, is the fact that these post-PC devices encourage and facilitate consumption of digital content, in just about every form. So each of these giants will deepen their efforts to serve up media--books, music, movies, TV shows, games, and anything else that might brighten your lonely hours (they're also socializing everything, so you can enjoy it with friends or meet new ones).
- Third, all of our activity on these devices produces a wealth of data. Data is like mother's milk for Amazon, Apple, Facebook, and Google. Data not only fuels new and better advertising systems (which Google and Facebook depend on) but better insights into what you'd like to buy next (which Amazon and Apple want to know). Data is also a key driver of new inventions. For the Fab Four, this is a beautiful thing because it means that everything done on your phone, tablet, or e-reader can be associated with you. Data about you: your likes, dislikes, and preferences feed new products and creative ways to market them to you.
The fierce competition between the Fab Four has resulted in many of them coming into direct competition with one another. This is true in the following markets:
- Mobile phones (Apple iPhone vs Google Android and Motorola Mobility). Facebook needs a mobile phone of its own, and intends to introduce one later in 2012, but its doubtful that it will introduce a mobile phone capable of disrupting mobile phones.
- Mobile apps (Apple iPhone/iPad vs Google Android) has always been Apple's strength, but Google has began to catchup with Android.
- Online display advertising (Google vs Apple vs Facebook). Facebook has taken a slight lead in online display ads, but its achilles heel is mobile display ads, which it just recently entered.
- Mobile display advertising (Google vs Apple) but Facebook just entered mobile ads with sponsored stories.
- Social media (Facebook vs Google+). Facebook has for all intents won the social media war with over 900 million active users. Twitter comes in no 2 with about 450 million users, but only about a third are active.
- Digital content including digital music, entertainment, games, films and books (Apple vs. Google vs. Amazon.com vs Facebook). Apple is the clear winner when it comes to digital music and books. Amazon.com has taken the lead in digital books, but Google and Apple are pecking away at its market share. When it comes to TV settop boxes, Apple TV has a sizable lead over Google TV, but none of the Fab Four have yet to develop a home television set.
- So far no one has challenged Apple in portable music players (iPod) or tablets (iPad) where it dominates both markets. Sony, HP, RIM, Motorola, and Fujitsu have all tried, but failed miserably. Only Amazon.com has managed to capture an impressive, albeit smallish share of the low-priced tablet market with the Kindle Fire, but so far has not introduced a full-size tablet that can compete against the iPad. The following infographic provides a visual representation of the competition between the Fab Four.
- The race to lead in cloud (Amazon.com vs. Google vs Apple) technology is off. Apple is the clear winner when it comes to digital music and its iCloud service provides a moat to protect its market leadership. Google's acquisition of Motorola Mobility and huge network of Android mobile phones will allow it to compete against iCloud, but when it comes to digital books, Amazon.com is the clear winner. Amazon believes it can make a dent in the 7-inch low-end priced tablet segment, but Apple could derail its plans with plans to introduce a smaller tablet.
Click Image To Enlarge
Courtesy of an article dated June 4, 2012 appearing in Fast Company and an article dated October 19, 2012 appearing in Fast Company
The coming years will be fascinating to watch because this is a competition that might reinvent our daily lives and Apple is the clear winner when it comes to digital music and books.
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Posted by: Arkanas iPhone Game Developer | 06/26/2012 at 01:49 AM