How to be disruptive, exponential and superhuman in today’s incredible world …
December 7, 2016
Here is a selection of Q&As from recent media interviews …
Your big theme right now is “exponential” … What does it mean, and why does it matter to business leaders?
“Exponential” … is all about how business can harness the power of ideas and networks to drive exponential growth. Think about WhatsApp which grew $19bn in 3 years, or Uber’s $60bn growth in 5 years, or Alibaba’s $130bn value created over 11 years.
These companies deliver exponential growth. Exponential is non-linear. Every year you get a multiplied effect. Instead of 1, 2, 3, 4, 5 … they grow 1, 4, 16, 64, 256 …
In many ways, exponential is the new expectation and aspiration of both customers and investors. Once they experience from some companies, they expect it from you too. The winning companies are “ideas and networks” companies … Here is my new success formula:
Exponential Business = Addictive Ideas + Intelligent Networks = Superfast Growth
It starts with a powerful idea. Ideas are typically built on a new insight. For example, that people prefer to stay in real homes, like Airbnb. Or people want to share their lives online, like Snapchat. The best are human, simple and social – that makes they addictive.
Then they need to be spread. Ideas become contagious through networks. Unlike linear models, traditional suppliers or retailers, networks connect people together. It’s the connections between people, rather than with companies, that creates their power – the ability to multiply their impact very quicky.
The new technologies – everything from social media to internet of things, blockchain to 3D printing – are natural multipliers, they create many connections very quickly. But it also takes a new mindset – the ability to rethink business around customers rather than products, to develop new business models that generate revenues in new ways, and to embrace collaboration over capability, community over relationship.
Any industry can be transformed exponentially. The starting point is a new mindset. To let go of the old ways of winning, and to embrace the future.
Will the “Uber effect” be a ongoing feature of markets?
Yes we will see many more markets “Uberfied” in the coming few years.
At the heart of Uber’s model is a “collaboration platform” – it connects large networks of independent suppliers together with large networks of customers. We see the impact in the taxi market, both with Uber and many imitators, but it can be applied to many other places. Blow Beauty connects freelance beauticians with networks of customers. Coyote Logistics for examples connects a shipper with 50000 independent haulage companies. Even Uber has gone, further. Uber Eats is now the world’s largest food delivery brand.
Exponential growth has a number of phases, which can be achieved in different ways for different companies, even in the same market. The “Uber” model is one way.
Exponential growth typically involves
- Digitalisation – turning a business model into a virtual format, that can be replicated many times, and specifically not limited by physicality. Licensing is a non-tech example of this, enabling Starbucks or even Mavi Jeans to spread quickly across the world through partnerships.
- Disruption – breaking the rules. Uber has challenged the rules of a traditional market – taxi companies traditionally had comfortable monopolies, with established practices, and often inflated prices. Whilst disruption is rarely welcomed by everyone, it has shaken up the ways of working, made traditional companies realise how inefficient they are, and given consumers more choice.
- Dematerialisation – Making businesses less physical. Think photography – most of us never even print a photo today – taking, storing and viewing them, on digital devices. Machines are increasingly miniturised, and we don’t need the traditional structures to support old behaviours. At work we don’t need offices, desks, canteens – all we need is a laptop and a lunchbox, or even just a coffee shop.
- Demonitisation – Companies use to charge for the inefficiencies of markets – like delivery or support services, for example. In more efficient markets, we don’t need to pay for the old things. Therefore many of the basic services, like communication are increasingly free. We therefore need new business models, to win in new ways, creating new revenue streams based on things people now valiue.
- Democratisation – This shift ultimately leads to lower prices, and greater access for more people. Half the world now walks around with a supercomputer in their hand. Integrating huge numbers of old products – from cameras to computers, encyclopedias to entertainment. With innovations like Udacity, anybody can go to business school, with Netfliz, endless movies are cheap and instantly on demand.
You predict that 50 billion devices will talk to each other in 5 or 10 years. Will there be differences between how companies will approach this?
The best brands will be based on the activities which add most value to people, in a way that builds their trust, brings them together, and monetizes that added value.
Brands will therefore be less about products and more about the benefits they enable, less about companies and more about the customers and what they seek to achieve.
Take a physical company like Nike. When I interviewed CEO Mark Parker for my new Gamechangers book he made a profound comment … “Nike is a sports company, not a sportswear company” … Think about, Nike exists not to make shoes and clothing, but to enable people to do more sport, to run faster, to achieve more. Nike+ therefore is the most important innovation stream of Nike. It enables people to do more of what they want, with everything from smartwatches and apps, organized events and online communities, to enable that.
Similarly Tesla’s CEO, Elon Musk said that the future of the car industry is not the car but the network. That’s why he is investing so much money rolling out the Supercharger network. In July he shared his new 10 year vision. By 2021 he sees that most car travel will be network based – people subscribing to a network (like we already do for mobile phones!) – where we will lease cars, share cars, use driverless cars, charge cars, and more – by a trusted brand. He wants this brand to be Tesla.
The future of business with robots provokes much discussion. But you suggest that AI and robotics are an opportunity for humanity?
Technology enables us to be more human – or even “superhuman”!
Big data enhances our ability to understand markets, customers, and activities like never before. To bring an incredibly scientific approach to everything from targeting customers as individuals, to localizing pricing, to predicting demand, to anticipating needs. Remote diagnostics of aircraft whilst in the air reduces turnaround times, health tracking enables early identification of illness and better treatment.
Automation frees us from manual job activities so that people can be redeployed in more human, service-based, activities. This might well require new skills. But rethinking, retraining, and reinventing ourselves will become normal. The top jobs of 2021 will be human jobs – using critical problem solving and emotional intelligence.
Robotics and artificial intelligence go further – but still have the ability to make us more human in remarkable ways. Look at how exoskeletons are enable people to carry incredible loads, for example in shipyards or military. I do not believe in the singularity, that robots will rule the world. Because they genuinely cant think creatively. To explore emotion. And newness. Human intelligence is still largely untapped. Robots and AI will enhance us.
Which business innovations have caught your attention recently?
Just look at the last 4 months
- Pokemon Go dominated the summer months, with young people across the world embracing augmented reality gaming as the new normal.
- Alibaba’s $28bn Singles Day retail bonanza redefined the rules of retailing with new types of virtual stores, digital incentives, and group behavior.
- AT&T paid $85bn for Time Warner’s content and brands – recognizing that “dumb” pipes will not create value in the future.
- Snapchat Spectacles beat Google to smart glasses, connecting it to their instant video sharing, and the ultimate new gadget for $130
- NuTonomy became the world’s first commercial driverless car in September, starting in the early-adopting Singapore market.
- Ava Winery in California have perfected a method of making great-tasting wine synthetically. You can buy their best Moet and Chandon champagne for 30% of the “real” price.
- HyperloopOne announced plans to implement suction-tube travel across the world – 15 mins from Dubai to Abu Dhabi, 25 mins Istanbul to Ankara, 35 mins San Francisco to LA.
We live in the most incredible time … We will see more change in the next 5 years than we have in the last 250 years.
What kind of problems do the corporates or start-ups face while innovating? How should we change the way we lead and innovate?
The biggest problem is old mindsets. But new approaches, learnt from the best start-ups can revolutionise the way in which entrepreneurs and corporates innovate. I am particularly focused on techniques such as
- Growth Hacking – the old approaches to strategy are dead, where companies try to predict the next five years and plan in detail. Instead start from the future then work back, developing horizons towards a vision, but with agility to change
- Design Thinking – stop looking at average research data, and instead go spend time with a small number of real people. Dive deeper to understand their real problems and aspirations. Then develop protoypes to help shape ideas together.
- Social Influencers – advertising doesn’t work anymore. It is average, interruptive, not trusted and made for average people. Instead people trust people like them. Look at Michelle Phan the world’s top Youtuber, and her influence over young women.
- Lean Action – make things happen fast, don’t wait to perfect something – get out and try to make things better with customers. Then keep learning, adapting and improving. GE reduced their time to market from 30 to 3 months.
There are more – business model redesign to find new ways of working, ecosystem collaboration to work in new ways, and having the ability to “pivot” to a new business rather than hanging into an old idea … and then exponential tools as described above.
This is the new playbook. CEOs, managers, and students need to get it.
What will be the business trends of 2017? What should we do
10 of the most interesting business trends for 2017 will be:
- Growth hacking – more agile and expeditionary strategy and innovation
- Centennials – born after 1997, they are now shopping and shaping markets
- Design thinking – forget research, go deep diving for insights
- Customer collaboration – work together to personalize and perfect
- Mobile centric – every business is digital, and mobile – even when physical
- Small beats big – people trust smaller brands, speedboats not supertankers
- Social influence – people trust people, not advertising or incentives
- Visual storytelling – fewer words, more images, videos and events
- Community building – people coming together to share their passion
- New generation of leaders – experience matters, but new mindsets matter more
You can read more on my website www.theGeniusWorks.com
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