Q&A … My recent media interviews around the world … Jack Ma and Elon Musk, pivot points and sharing economy
December 14, 2015
I get asked to do a lot of interviews. It’s great to share new ideas and inspirations with people in local markets. Here is a selection of some Q&As from the last month, for publications ranging from Australia and Belgium to India and Indonesia:
Question. What’s your big idea?
“Game-changing” is about market innovation. Most people focus on innovating their products and services. But these are quickly copied, and give little advantage. Instead focus on rethinking how your market works – the “game” – think how you can change the game (perceptions, behaviours, expectations), rather than just play the same game as everyone else (same products, competing on price). Then innovate the business – especially the business model and customer experience – in response to this new vision of how you want your market to work. To your advantage. Read more about my new book “Gamechangers.”
Question. You started as a scientist, then became a marketer. What did you learn from this?
The most important mindset for marketers today is to be able to combine “left brain” (logical, analytical, focused) with “right brain” (intuitive, connected, exploratory) thinking. We need right-brain thinking to see the bigger picture, of the changing world, the emerging trends, and new opportunities. It is built on imagination, making new connections, creating hypothesis, and forming opinions. We need left-brain thinking to see the detail. It is built on intelligence, to interpret the big data, to connect customer and financial data, to make choices about where to focus and where not. We need to zoom out (right brain) and zoom in (left brain). Strategy requires this approach. Innovation requires this approach. It is about combining left and right brain thinking. Creativity is the combination of both.
Physics is about making sense of the world, and creating detailed interpretations of why things happen. It is quite logical. After studying physics at university, I got bored. I wanted to be intuitive too. I started working in marketing. By 28 years old, I had my best ever job, managing the Concorde brand. It was about understanding people and their aspirations. It was about building a brand, emotionally and intuitive. But it was also about making money. I soon realised that to be a successful marketer – or even business leader – you need to combine left brain and right brain thinking. Today, more so than ever. Actually if you look at all the great “gamechangers” they use both sides of their brain. Einstein started with his right-side, creating hypothesise to try to explain his new observations, and then his left-side to prove them mathematically. In this way he was able to find the theory of relativity and more. Picasso started with his right-side, using the geometry and perspective that he learnt from his father, a maths professor. He then went crazy with his right-brain, intuitive and interpretative. The combination enabled him to create a new genre of cubism.
It is this “connected thinking” that helps us to make sense of a changing world, and to create a better one
Question. You say that “the best marketers are disruptive innovators” … Why?
The best opportunities for businesses to win – to find new growth, to engage customers more deeply, to stand out from the crowd, to improve their profitability – is by seizing the opportunities of changing markets. The best way to seize these changes is by innovating – not just innovating the product, or even the business itself, but by innovating the market.
Today’s most successful businesses – from Airbnb to Tesla, Apple to Uber – innovate the market – what it is, how it works. Most businesses accept the market as given – the status quo – and compete within it. With slightly different products and services, or most usually by competing on price. Most new products are quickly imitating, leading to declining margins and commoditisation. Marketers, instead of having their heads down, playing this game of diminishing returns – simply trying to build awareness, with tactical promotions, social media gimmicks and price discounts a should have their heads up – fining the best new market opportunities, then thinking how to innovate the market, and then the business.
Marketers are the best people to do this – to change the game, not just play the game – they are the “Gamechangers” … To innovate their market, and then to innovate their business – like Whatsapp creating $19bn in three years, Uber $40bn in 5 years … These companies harness the power of ideas and networks to create exponential impact.
Question. In the time since your Gamechangers book was published, what are some notable new innovators you have come across?
The biggest story that isn’t in the book is Uber, the taxi business that embraces a digital platform to connect drivers and passengers in a simple and addictive way. In five years they have created $40 billion value. They’ve just launched UberEats, already the world’s largest food home delivery network. Some of the other brands, innovations and stories which I see as new and interesting right now include:
- Editas – transforming healthcare with gene editing
- Fan Duel – fantasy American football, baseball, any sport
- Mellow cabs – cool and responsible taxis in South Africa
- Modern Meadow – biofabrication of food, like synthetic meat
- OneWeb – creating global internet access for everyone
- Planetary Resources – asteroid mining for precious minerals
- Rent the Runway – designer fashions available for everyone
- Slack – collaborative software, changing the way we work
- Starbucks Reserve – rethinking the premium coffee experience
- Theranos – blood testing, more personal and positive wellbeing
- WeWork – shared workspaces, building entrepreneurial hubs
- Zoom – Patient-centric healthcare, mobile apps and modern clinics
Question. What are the typical challenges entrepreneurs face as they scale up their innovation from a startup to a large company?
Today’s entrepreneurial mindset is to start fast, make mistakes and learn … and then as you gain more insight and experience, “pivot” your business to where you really see the best opportunity. As examples, Pinterest started life as Tote, helping people to explore online retailers and sending them updates about prices and availability. It realised users were mainly using the site to build and share ideas lists, and soon shifted course to focus on “pinning”. Groupon began as a platform for social action called The Point, before reinventing itself in the crowd-based local coupon business. Ushahida started as an African elections monitoring service, before growing into a crowdsourced new aggregator. Twitter emerged out of a mediocre podcasting concept called Odeo that was outshone by iTunes.
Question. How should innovators strike that delicate balance between ‘Stick to your vision’ and ‘Adapt to a changed world’?
It’s like climbing a mountain, set out your vision – the mountain peak you want to get to – and then choose your path. However you may well have to change your path depending on what its like, the weather conditions, and much more. You might sometimes even want to aim for a different peak, when you realise that the initial one is no longer appropriate.
Question. Who are some of the entrepreneurs you admire the most today?
- Jack Ma – the Chinese school teacher, who created Alibaba and then keeps growing it to the next level – now the world’s largest retailer, yet owns no inventory!
- Stefan Klein – the 60 year old Slovakian entrepreneur, former car engineer with a passion for flight, who created Aeromobil, the flying car.
- Elon Musk – the American entrepreneur, dreaming big and audacious ideas, investing in lots of different businesses, and staying true to his vision.
- Donna Karan – she does business on passion, and in recent years has realised that beauty is more inside than outside, more Urban Zen than DKNY.
- Tony Hsieh – the American CEO of Zappos, who has taken it upon himself to rejuvenate the inner cities of America, as a part time job whilst still running Zappos.
- Zoe Sugg – the youngster has built a multi-million dollar fortune vlogging from her bedroom about make-up and fashion, followed by a number of blockbuster books, and her own cosmetics range.
Question. It’s one thing to fail with a product, and a bigger dimension to fail with a company. How should founders regroup in these two situations?
2 out of every 3 products will fail. Accept, expect it. The trick is to identify failures as early as possible, and to back the winners quickly too. Failing companies is harder. But its all experience. Great experience. Move on. Learn everything you can. Come back and do better. We shouldn’t call it failure. It just didn’t work out yet.
Question. Is there such a thing as the ‘ideal age’ for an innovator, or can the creativity bug strike you at any time? How should people keep themselves open for adopting an innovative career later in life?
Innovation has nothing to do with age. Younger people bring energy and fresh thinking, uninhibited by the past. Older people bring experience, wisdom and personal discipline. One thing that does help is diversity – having a mixture of backgrounds, -and experiences. Teams always beat the lone genius!
Question. How should innovators evaluate weak signals and anecdotal evidence which seem to contradict quantitative market trends?
Most market research focuses on the mainstream – the questions are defined based on current knowledge, and limit the possibilities – the answers, particularly in quantitative research are averaged and so represent nobody particular. Newness typically occurs in the margins not the mainstream – the deviant behaviour, the new needs and aspirations – it is better to find these qualitatively, using a small sample, using observation and discussion. Then to develop them collaboratively with these customers, learning together and shaping the right solutions. It might be, of course, that there is no longer a “mainstream” as markets increasingly fragment, as people are more different. In which case there are lots of different margins, lots of different experiments. See which ones win!
Question. How can social entrepreneurs and non-profit organisations make use of your Gamechanger framework model? Are there some examples you can cite in this regard?
Exactly the same – there are lots of examples in the book – companies like Toms (the Argentina-inspired footwear company who give “one for one” to good causes), Raspberry Pi (educating kids about technology), Narayana Hospitals (with a dual business model, where health tourism subsidises free healthcare locally), and many more. The simplest way to explore ways to change the game in any market, is in the “gamechanger compass” – change the who, change the why, change the what, change the how.
Question. In 2011 Time Magazine identified the Sharing Economy as one of the ten megatrends that will change the world. What do you think about it? What do you predict?
The Sharing Economy is a broad concept with many components … everything from collaboration and co-creation, to subscription and rental models, shared ownership to shared use, exchanges and communities.Together it is probably the biggest trend in business, particular in terms of shaping markets and consumer behaviour.
Question. A survey conducted for the German magazine Spiegel in 2014 reveals that 77% of the people asked think that share economy is a sustainability-based approach to protect the environment we live in and a good way to save up resources and money. Why do you think is the concept of share economy being received so well?
Most consumers do not share driven by social or environmental issues, although sustainability may well have been the initial motivation of many innovators. The majority of consumers see the benefits of the sharing economy as reducing costs, and increasing convenience (for example, I stay in an Airbnb because it is more interesting than a standard chain hotel), or convenience (I know where to find a 3D printer when I need one, but want to buy one), or access to better (for example, I cannot afford to buy a Porsche but a can rent a Zipcar for the weekend!). Of course it also means that we make and consumer less resources, less emissions, etc which is good for the world, so there is a clear sustainability benefit. But its not what turns most people on!
Question. The American economist Jeremy Rifkin looks at the technological progress of the past years, especially the developments in 3D-printing, and anticipates a future where marginal costs tend toward zero, so that capitalist forms nearly die out, being replaced by a super-internet of things. What is your opinion about it?
The ‘frictional economy” was a lazy way to make money. It took money where people found pain. As these frictions are eliminated, companies recognize they need to make money by adding value – meeting the new needs and aspirations of consumers, more emotional and aesthetic. Its more about adding perceived value, than reducing cost.
Question. What are the best examples you have come across of governments innovating successfully?
- Estonia … E-Estonia was recently launched giving anybody who wants to apply (from anywhere in the world) the ability to become a virtual citizen, and to establish a business in Latvia (with local government support and taxation)
- Kazakhstan … the huge and barren country has one of the best broadband infrastructure, enabling it to offer digital services such as e-education, e-health as well as jumping into the digital world of retail and entertainment.
- UAE … pooling resources with an ambition to become “the worlds most innovative nation by 2020” when it will host the Dubai World Expo 2020 … learning in particular from Singapore, to build a knowledge economy.
- New Zealand … building a powerful national brand around “100% pure” which then inspires tourism and inward investment, but also pride and confidence in local people and local businesses.
Question. As one of the worlds leading marketing and innovation guru … What are your tips?
Here are my 10 tips …
Tip 1: Business is about people … creating what customers really want, and then employees working together to deliver it. We are all experts on people. There is no PhD for common sense. What you need is the confidence to think like a human being, to be intuitive and emotional, to challenge the old conventions, and use your imagination. All the tools and techniques of business will help, but the starting point is to be human.
Tip 2: Listen to customers … When did you last spend a whole day observing, listening and talking to your clients or consumers. Design thinking is all about diving deeper into the world of the customer. Don’t just ask them to tick boxes in a questionnaire. Try to work out what their real problems are, their dreams, their frustrations. Do it every week. Really. You are never “too busy”. And harness the the right insights.
Tip 3: The best ideas are out there … probably not in your own geographical market, or business sector, but in other categories and countries. Don’t just sit there trying to be slightly better, slightly cheaper than your competitors. Instead look to other places, where ideas are already being used (its like a free research lab), and which you can take and apply to your own business.
Tip 4: Make new connections … that is how Leonardo da Vinci described innovations. Therefore look for things which don’t forget – which seem like opposites, even a paradox, then find a way to resolve it. For example, take the Airbnb model of sharing and apply it to your business, what do you get? Or the subscription model of Zipcars, or the freemium model of Spotify. Take two different products are try combining them together.
Tip 5. Together is better … the power of a team will always triumph over lone genius. Its amazing how we still think we can do better alone. Use the power of diversity to achieve more, even each person only has part of the answer, it is the diversity of their knowledge and experiences that beats any one person. Facilitate this carefully (this is a real skill), to bring out the best in everyone, to integrate and shape it together.
Tip 6. Networks are exponential … Businesses don’t need all the capabilities themselves, its about finding the right partners to do each task better, and to bring all the partners together as an ecosystem. It is then about reaching markets through networks – social, chains, licensing. Networks can multiply your business much further and faster – exponentially.
Tip 7. The power of one page … the one page strategy, the one page business case, the one page project pitch, the one page marketing strategy. People are incredibly busy, and attention is scarce, so being able to bring things together in one page is incredibly powerful (maybe its one page of text, or an infographic, or a rich picture, or even a poster). It is also a great discipline, to get you to focus on what matters, and articulate it clearly.
Tip 8. Be the Gamechanger … The big idea of my new book “Gamechangers” is to not simply innovate the product or service (because it will be copied before you launch it!) but to innovate the market (the “game” – how it works, the price points, the channels, the rules), and then innovate the business (especially the “business model” – how you will work to make money in the new game). Start from the market, then work inwards.
Tip 9. Don’t be afraid … I often start a consulting project having no idea what the solution might be, or exactly how to get there. The skill is to have the confidence to get started, and to adapt as you learn more about the problem, and your solution develops. Build a prototype early – a picture, a cardboard model, or a real quick solution – which allows people to focus on something and make it better.
Tip 10. “10x not 10%” … what I learnt from Google’s X Labs is the power of thinking bigger. Being audacious. Most of us keep looking for the 10% improvement ( to make products 10% better, to drive 10% more sales than last year). Incrementalism makes us lazy, and we always seek to squeeze a little more out of the old, out-dated thinking. Instead think from the future back, with bigger and bolder ideas, then work towards them.
Question. What is your next book going to be about?
I’m working on two concepts. I am using the “lean start-up” methodology to develop them quickly and test them with audiences, and then to decide which one is the better concept to turn into a book. This is important because in reality a book becomes a whole service offering – events, masterclass, consulting, toolkits etc. Maybe your own readers can tell me which of these two concepts they prefer (email me your views!)
- “Superhuman Business” … people can do amazing things, when their environment and support, motivation and rewards, are all in alignment. We take our insights from cultural situations – for example, the Greek age of knowledge, where the collective wisdom of many scholars was able to push each other to new levels; or the Terrahumara Indians of Mexico who are able to run for 24 hours over amazing distances because that is their culture; or in the business world the impact of innovation clusters like Silicon Valley, Espoo in Finland, or Hyderabad, where technology drives ideas in an amplified way. The questions is how to apply this to the world of business – if you want to deliver fantastic customer service in a call centre, or if you want to drive amazing innovation in products.
- “Exponential Brands” … we live in a world where the world’s largest accommodation business owns no property, where the world’s largest retailer own no inventory, the world’s largest media company owns no content. Airbnb, Alibaba and Facebook play by new rules – ideas and networks. The impact can be incredible – Whats App has created $19bn of value in 3 years, Uber $40bn in 5 years. Exponential! But most of think in linear ways. Linear thinking is not enough (imagine moving forwards one step every year … 1, 2, 3, 4, 5), whereas exponential thinking is dramatic (imagining moving forward like this … 1, 2, 4, 16, 256). So how can your business harness the power of ideas and networks to drive exponential business models, with exponential impact?
Tell me which you think I should focus on?!