Public notebook

The next 20 years of disruption in marketing (and everything else)

“The Thames Illustrated. A picturesque journeying from Richmond to Oxford” — Source: The British Library

If you follow the money instead of the marketing services sector’s own narratives, change on a scale far larger than anything Google or Facebook have brought is on the way. That’s the conclusion we can draw when we listen to Silicon Valley’s smartest money talking about what’s next for them.

Benedict Evans is a Partner at Andreessen Horowitz (aka A16Z). His presentation a few days ago (November 2018)  is — like the slower, more slide heavy Mary Meeker rival at Kleiner Perkins — billed as an annual fact fest and market proclamation. his theme this year was “the end of the beginning”.

Why is Evans worth listening to? Well, partly because he’s not speaking to you, he’s speaking to the money — his firm has US$2.6 billion of venture capital under management, and is ambitious to grow more. Its biggest successes since it started in 2012 have been backing firms like Instagram, Dollar Shave Club and Skype. It is the smartest money on the web. They are driven by the key insight articulated by founder Marc Andreessen that “software is eating the world” — everything that can be made to run better with digital technology will be disrupted and changed by the web.

There are three main points he makes that are worth looking at more closely — and then a torrent of industry-specific insights for CPG, retail, automotive, healthcare and financial services. First, When it comes to digital transformation, we are at the beginning of decades of change. Second, the past 20 years of the web have been about access — a wave of connecting up all of the people in the world — the next 20 years will be about usage, how we rethink almost every aspect of human activity using this network and the digital tools connected to it. Third, the current wave of change is being driven by machine learning and crypto (i.e. blockchain and related technologies). 

A concept that leaders in every field need to grasp is that the digital revolution — the number of things that software and connected technology will change dramatically — has only just begun. Benedict Evans’s presentation will give a valuable return on the investment of your time and attention if it only helps bring that one concept to life a little more. 

Watch the video of the full talk below — and a fillet of the points that I found most interesting (quotes are all from Benedict Evans, edited for clarity).

Key points from Benedict Evans The End of the Beginning

The forces at work

Access to the web — the number of people connected — has been growing the past 20 years at an exponential rate, but the usage is only just beginning to grow and there is a massive addressable opportunity. 

The next wave of disruptive innovation will be of a different order of magnitude — harder problems, but bigger opportunities (and bigger disruption for established companies).

We will tackle harder markets and we probably change those markets far more than we changed things before

Social media and search were an organising layer over the web, but crypto and machine learning will allow much more profound changes to how we access and use the massive amounts of data, people and resources the internet has connected. 

The upshot of these changes is that the markets that VC-backed disruptor companies will be much, much bigger. A comment by Evans as he talks about a graph gives us a sense of the scale of this:

“I used to charts in billions of dollars, now they are trillions of dollars”

Marketing disruption will be enormous

Evans characterises the disruption of marketing so far as having been mainly about advertising. For those of us working in the non-advertising areas of digital marketing we might think of this as a slight, but it’s not. From the point of view of the money, for whom we can think of Evans as the guide/spokesman, the game in digital marketing has been all about the advertising. Just look at the money that went into advertising leaders like Doubleclick vs. leaders in content and inbound marketing, or however we wish to characterise it these days. Brandwatch, Percolate and Sprinklr are worth hundreds of millions right now, but that is partly because they service relatively under-prioritised, disconnected and under-operationalised parts of marketing.  

And even thinking of marketing isn’t thinking big enough, says Evans — the opportunity is more about thinking of the total cost of reaching a customer.

As I mentioned in the main post above there’s a lot more in the presentation — although it is only 24 minutes, Evans speaks at the speed of an Aaron Sorkin character, so there’s about an hour’s worth of content in there. I paused it frequently and took notes — and then wrote this post to make sure I’d had time to think through some of the profoundly interesting and challenging things he was talking about. 

leadership Public notebook

Lead with questions

What’s wrong with the old model, anyway?

The leader owns the question, the team owns the answers. That’s a thread running through several of things I have been reading and writing about for clients lately.

Reading Liz Wiseman’s Multipliers this morning I saw  this quote from Tim Brown of IDEO:

As leaders, probably the most important role we can play is asking the right questions and focusing on the right problems. It’s very easy in business to get sucked into being reactive to the problems and questions that are right in front of you. It doesn’t matter how creative you are as a leader, it doesn’t matter how good the answers you come up with. If you’re focusing on the wrong questions, you’re not really providing the leadership you should.

If this sounds obvious, think of all the leaders you’ve known who have insisted on arriving with the answers, or the questions about why their team hasn’t guessed the answer they have decided is obvious.

Wiseman casts this type of leader as a “diminisher“, which sounds like a monster from a Harry Potter story, but I know what she means. It’s your boss that’s always right, and therefore you’re rarely right — you soon stop trying to solve problems and just do what you’re told. Or leave because — despite their self-advertised or heavily implied genius — it’s just not that rewarding working for a monomaniacal smart arse.

Wicked problems

At a recent Brilliant Noise event I spoke about Professor Keith Grint’s ideas about why leaders succeed or fail when faced with complex challenges. My friend Ken Punter at University of Warwick sent me Professor Grint’s paper “Wicked Problems and Clumsy Solutions” at just the right moment (the day before) and I had to share it there and then — and I will do so again here…

There are three kinds of problem, says Grint, with increasing amounts of uncertainty: critical (a crisis with little time for decision-making and action, tame (problems with known solutions that ), and wicked problems.

Source: Wicked Problems and
Clumsy Solutions: the Role
of LeadershipWicked Problems and
Clumsy Solutions: the Role
of Leadership

The required response to critical problems is to command. Things need to happen fast and there’s not much time to consult or debate issues. Put out the fire and then we can talk about those things, the commanding leader says. Tame problems have known solutions and need to be managed through a process to be solved.

Complex problems don’t have an obvious answer. By their nature they may not even have a correct answer — they are wicked problems. If you move a piece of the puzzle all the other pieces change too. As Ben Horowitz says, “this is not checkers; this is motherf**kin’ chess”.

An example of a wicked problem…

Think of a reorganisation of a company or even just department — it’s not a series of simple questions. Person X can lead the operations team, person Y can lead the project team — simple. No. Person X is more competent at projects but more respected by the operations team who would be dismayed to feel that they are losing X for Y. The other way round? No, the operations team needs the competent manager and person X would probably leave. Can we hire for X’s role? Yes but we would lose six months of expertise of X and it could create a flight risk in the team that’s not led.

Did it give you a headache reading that? It damn near gave me one writing it, but that is a tiny aspect of a complex problem — like prioritising product development across hundreds of possibilities.

On a grander scale, Professor Grint cites JFK’s finest hour as a leader: 

…President Kennedy’s actions during the Cuban Missile Crisis were often based on asking questions of his civilian assistants that required some time for reflection — despite the pressure from his military advisers to provide instant answers

Grint, Wicked Problems and Clumsy Solutions

How to respond to digital disruption is a wicked problem. Other organisations may have done it, but you don’t know if they are going to be successful. Your transformation is specific to your organisation. You learn from others but your solution will be uniquely yours.

Where to start? Pilot a new approach or large scale change? What are the disruptive challenges you face — and which ones are the ones you need to focus on first? If it’s a combination of technology, business process redesign, capability building and organisation re-design which is dependent on which.

It would literally be simpler to create a start-up — except that you would have fewer resources and less capital and would still have to deal with wicked problems. Dealing with wicked problems is a core competency for any leader in the digital age, the VUCA era or however you choose to describe a time when we don’t seem to know what will happen at any level in markets, politics, the environment or technological progress. We don’t really know what’s going to happen next week, never mind next year and yet countries, companies and careers all still need to be managed.

Some things are harder than running a start-up

Reid Hoffman, founder of LinkedIn and now Silicon Valley wise man at large, compared running a start-up to an impossible feat: “Starting a company is like throwing yourself off the cliff and assembling an airplane on the way down,” he was reported as telling Bloomberg in an interview. 

Hoffman also said: 

A startup, to some degree, is a set of those challenges of ‘if you don’t solve this, you’re dead.’

The challenge for an incumbent is even less clear. If you don’t solve this, you might be dead. If you do solve this, you might be dead anyway because you weren’t paying attention to the right thing.

The zeitgeist for the past ten years or so has made heroes of the start-up pioneers. This may be passing as heroes become villains and new empires rise. The heroes we need aren’t necessarily in start-ups, they are leaders who are brave enough to start 

In a large organisation you may be assembling several aircraft at once and hoping at least one them will fly — and that you’ll be on it — before they hit the ground. Meanwhile you have a lot of board members and investors sitting on a slowly deflating zeppelin balloon insisting that the ground is still sufficiently far away, and that the hydrogen system that has worked for the flight so far is in no way flammable. 

(Admitting) ignorance is strength

If you can’t stand not always knowing the answer — or at least appearing to — not only are you downgrading your team’s potential every time you meet them, you are blinding yourself and them to the true nature of the challenge.

Wicked problems, as Grint puts it, require clumsy solutions. If you try to find the right answer you will go mad or go out of business. You have to lead with questions, enlist every bit of thinking power in your organisation to be curious about what solutions might be and then start trying them out. The solutions will be clumsy and imperfect, but they will advance you toward things that will work. Either what you try can be crossed off the list or the grains of insight you gather from it can be applied to the next step forward and the step after that.

Progress will come from leaders who are brave enough — a theme of the recent Marketing Society conference — to take on the new, the confusing and the complex.

Further reading:

The Hard Thing About Hard Things by Ben Horowitz

Multipliers: How the Best Leaders Make Everyone Smarter, by Liz Wiseman

Wicked Problems and Clumsy Solutions (free PDF), by Professor Keith Grint