Visiting a new conference is always slightly unnerving at first – frankly, will this be useful or will it be waste of my time. But DLD 18 Munich has hit all the right notes in the first morning. My energy is up, my notebook is filling and I’m looking forward to more.
Day one started with volley couple of fascinating sessions, the public policy head for Facebook standing his ground in the face of political and publishing industry ire, Andrew Keen talking with one of Germany’s biggest media companies about the future of the internet, and a panel kicking around whether apps or agents will be more important in the coming years.
Then came Paul Daugherty, CTO of Accenture to talk AI. He is one of those fast-talking guys who wants to tell you everything and who you almost wish could talk even faster and download it all in 25 minutes on stage. As it, what he covered in terms of insights and questions was provocative and compelling. I’ll just list them out here for now:
AI is the fastest growing business:He’s never seen anything grow so fast.
Job skills are more of a problem than job destruction: Something like 6 million people are unemployed in the US and there about the same number of jobs vacant.
We need to train many more people in AI: Estimates that there are only 10,000 people worldwide with the right level of skills and knowledge in AI are probably correct – we’re going to need a lot more.
Tech can help people work better: If we look at how work happens we can implement tech to help people work better. He cited a major US manufacturer that is using augmented reality (AR) headsets to help employees operate machinery better (I imagine a bit like the virtual hands teaching piano learners how to hit the right notes).
Business processes are the main issue for AI: Daugherty calls the AI wave of innovation in this area – Business Process 3.0.
New jobs are being created in training AI: AI needs to be trained and supervised – for instance to make sure that customer service bots and interfaces are reflecting the tone and values of the company in their interactions and decisions.
Leadership is a key issue: CEOs and board level people need to learn about AI. Echoing our own digital leadership mindset work at Brilliant Noise, Daugherty also said that it was more than just AI they needed to learn about: “People need to invest in skills for leaders to move through [successive] generations of technology.” 85% of leaders say AI is something they will be investing in but only 3% are investing in training.
Silo-busting is a must: AI is most effective when it is at the core of new business processes, not added to the periphery.
Chief Artificial Intelligence Officers (CIAOs) are a good idea: The CIAO should own the three areas key to making AI successful in an organisation: 1. Data, 2. Talent, 3. Responsible use.
Responsible use of data and AI: There needs to be oversight in this area to watch out for the unintended consequences of AI and automation. There will alway be hidden biases in algorithms.
“Data is fuel for AI”: Companies that will find it difficult to succeed with AI are those with unstructured and disconnected data sets. AI needs data to be effective.
Absorbative capacity: A useful term from economics, absorbative capacity refers to how quickly an economy can take advantage of innovation.
Productivity needs better measurement: If we can measure it better we can figure out where to boost it.
Paul Daugherty has a book – Human + Machine – on this topic coming out in March – it’s going to be top of my reading list as soon as I can get a copy.
With an iPhone app and a £3,000 headset you can explore a whole new way to fail at learning a musical instrument. Music Everywhere is one of those rare examples of AR that makes me think – yes, that could actually work. While Microsoft Hololens is currently an expensive way to do this, prices will lower over time and there’s a Mira version in the works soon. Mira headsets cost just $200.
Using the Duolingo app, I’ve learned Spanish to a higher level than any of the three other languages I attempted while in formal education. So I’ve got a soft-spot for app-based learning that looks compelling – and this does. It will be interesting to see how it develops…
Image: Notes in the margin of a Mallorcan noble’s book printed in 1748. Kind of like a mind map, isn’t it?
When I was younger I tried briefly to keep books nice and neat, ready to display, post-use, on a bookshelf – it seemed like that was the thing to do, the way to be. respectful of the text and to have display to the casual browser of one’s shelves not only that you were well-read but were also able to look after nice things.
Over time I came to know myself a bit better. I’m a reader who loves books – I want to get in and consume them – and I’m always starving for more. In the end I decided, switching metaphors, that my books worked for a living. They weren’t show-ponies, kept looking their best and worthy of rosettes fro presentation – they were going to be put to work in the employ of my bookish appetites.
Once I was over the keep-them-neat syndrome, I was much happier to mark them, to highlight things that I wanted to remember. I settled on a system of scoring horizontal lines with my thumb under passages and then indicating that there was a highlight on the page buy dog-earing the bottom of the page. That way I could review the key passages easily without having to worry about taking notes or inserting marker slips or post-its.
When e-books came along, the highlighting of text was a one of my favourite features of this format. In non-fiction books, I’ll often highlight up to a 100 or more passages (fiction books, even ones I enjoy, I tend to highlight less – and then only passages where the language or an idea has stopped me in my tracks).
Like the paper scoring and folding approach to highlights, the highlighting was probably as much about pausing and noting the text as setting down markers that I would ever return to – and while this was useful enough, every now and again I would need the ideas from a book for a project and could seize it and go quickly through the highlights to find useful reminders of ideas or pointers for further research.
Image: A highlight from the must-read chronicle of the first 200 days of the Trump administration, Fire and Fury.
Every now and again, when a book seemed especially important to my work, I would use the highlights to help me fillet it and share the key ideas and insights with colleagues and clients. I read a lot more books than a lot of people, but still can’t read all the books I want to – – I think of The Hard Thing About Hard Things, Creativity, Inc., The Checklist Manifesto and, recently, The Four by Scott Galloway – sharing fillets or excerpts I realised was a lot more useful than demanding that everyone should read a certain book. When I simply couldn’t wait for everyone to read them they needed to know about these ideas now and a briefing on the book might not only urge them into reading the whole thing, but at least have a clue about why I was suddenly obsessed with certain concepts.
There was a function in the Kindle notes and highlights website – I read most e-books, indeed most books, on the Kindle platform – where you could create flashcards of text that you’d highlight. Using a learning algorithm based on how many times you need to be exposed to a text to remember it. This was great – I created a short-cut on the home page of my phone to be able to review it.
There were two powerful bits of magic at work here. First, I was reminded of passages – ideas, bits of data, advice – that I’d read and loved but since completely forgotten. Second, it was a brilliant way to make my brain lucky – to recall things at a moment that would be incredibly fortuitous. It’s amazing when this happens, and it has happened to me a lot – a key quote popping up a day or so before delivering a big speech, or a bit of hard-won experience from an entrepreneur popping up just as I am in the jagged grip of a decision-making dilemma.
As a side note, getting lucky with knowledge and ideas is incredibly motivating. It seems to me that it pushes you into a “toward state” – seeking, curious, engaged – and that can be incredibly helpful.
The problem with this approach was that I often drifted out of the habit of using it – usually after a burst of clearing away clutter from my phone’s home screen.
Recently, an app was released and has been developed nicely, that takes your highlights. Readwise sends you a daily email with a handful of quotes to review. You can also click through to a web app which allows you to tag quotes, and share them with other apps.
Image: Reviewing a quote in Readwise.
I’ve also been using it as a relatively a passive way of collating quotes and research for my new book idea’s outline. I share the quote to my task-app Omnifocus as an action to add it to Scrivener, a powerful manuscript editor. When I have a spare moment, or a few Scrivener tasks have built up, I open that app up and have a few minutes slotting the quotes into the structure and thinking about how the book outline is shaping up.
If you highlight books on Kindle, I highly recommend trying out Readwise, it’s a simple service that can prompt all sorts of useful ideas and thoughts and, as is the case with my book idea, fit into some useful work-flows without creating extra chores.
: : Bonus Kindle highlighting tip – Diigo, the excellent bookmarking service, has recently added a feature that lets you bookmark / add to your library all of the highlights from a Kindle book. Really useful if you use that service – and if you don’t, you really should…
Like 2016, I set a reading goal last year on Goodreads the slowly improving, delightful social network for readers of 52 books, an average of one a week. I passed that mark at the start of my Christmas holiday and after some confusing adjustments ended in 53 (a novella being the cheeky 53rd).
There are more books I want to read than I am likely to have years of life to conquer. My “Want To Read” list on Goodreads has grown from about 300 to over 390 books this year, and is probably only a fraction of the books I would like to set about reading. Seeing this data has given me pause over the past few week has made me wonder about how to prioritise what I read. Maybe that list needs a cull.
One change I have made is give up reading books that aren’t working for me more often. Awareness of the sunk cost fallacy — we tend to throw good resources after bad because we don’t like writing off investments we have made so far — and the ever-growing pile of other things I’d like to read make this feel like a habit I need to strengthen.
I did stop reading a few books sat the mid-point of the year, mainly because I was reading too many simultaneously and it was just getting silly.
The only book I declared a DNF this year was Arianna Huffington’s The Sleep Revolution. As a sometime insomniac, I am seriously interested in sleep, but this book wasn’t telling me much that I either didn’t know already or didn’t find useful.
Authors of books about sleep take note — I’d expect a large number of people who are interested enough to pick up your book in the first place are probably suffering from sleep deprivation — several chapters on just how badly your health is being affected by your current state just isn’t what you are going to find useful. SLEEP LOSS MAKES YOU DUMB AND LIVE LESS LONG. Yes, thank you. YOU SHOULD SLEEP MORE. Yes, I know. YOU ARE A DUMB ZOMBIE MAKING BAD LIFE CHOICES. OK, please bugger off now…
In terms of reading media, I am still an e-books person, although when I really love a book I will generally then buy a hard copy or several, to give as gifts or share with colleagues and add to our work library.
I have loved reading some paper books this year, and want to read more. The most beautiful book I read was Homo Deus by Yuval Noah Harari which I received the hard copy of as a gift. I was so taken with the typesetting and font — Dante, with headers in bold red — that I hunted down and bought a licence and created a theme for Ulysses, my favourite writing app, that mimicked the its pages.
I’ve definitely bought more paper books than i have read this year – a lot more – and I need to somehow break the Kindle habit and pull one from the pile instead of downloading a fresh new ebook from one of my lists.
When there’s a book I really want to devour, I love to get the audio version alongside the Kindle version. With the WhisperSync feature on this platform, the audio stays in sync with the text, so I can read a few pages at breakfast and then carry on listening to the text as I walk. I’ve forgotten – and cannot easily conjure in Google – the person who said something like, “You should read a good novel twice – the first time for plot and the second for the prose,” but I wholeheartedly agree.
One book I often return to is Station Eleven, by Emily St John Mandel. I’ve read it several times, so often that I can happily dive into a random bit of the audiobook and soak up the sad prose and enervatingly empty world she makes with it.
I don’t agonise over how I read. The only thing I want to stay vigilant about – regardless of the medium – is that I don’t waste time on reads I regret. There’s literally too many books I would rather be reading to waste more than a moment on a second-rate text.
Sitting in the rear carriage of 2017 as it approached the annual terminal, I will admit to having been a little befuddled and bemused about what just happened.
There were so many unexpected and hard to believe developments in the public sphere that if 2017 had been a novel I’d think of it as a badly plotted first draft that someone really should have got some advice on before they put it into production. I suppose it might have been the difficult middle book of an epic trilogy, a kind of 21st century The Two Towers — in which case hopefully there are a pair of metaphorical hobbits struggling unseen through the outlands of Mar-E-Lago, set on delivering a figurative ring back into the fires of a firey bunker near the 18th where it was forged. Or something like that.
Perhaps the difficulty of being able to string a narrative about the year together that in any way makes sense has made my reading all the more urgent, and look back over the year’s books all the more satisfying.
In the post below, rather than a list, I’m going to call out the books that really stayed with me after reading them in three loose categories – fiction, non-fiction and business.
It has been a fine year for reading genre fiction, beginning with the incredible The Three Body Problem by Chinese author Liu Cixin and carrying on through the next two books in the trilogy, The Dark Forest and Death’s End. I want to re-read the whole trilogy now, a year later, as it still haunts me. Full of beautiful prose and dizzying ideas it is a truly incredible work of art.
Carrying on with the genre theme, I worked my way through all of Mick Herron’s Slow Horses series. Set in a kind of Craggy Island for spies, the eponymous slow horses are cast-offs from MI5, condemned to carry out repetitive, low status work under the tyrannical eye of their boss, Jackson Lamb. The stories are well told spy stories with explicit nods to the tone and style of John Le Carré, but don’t feel at all derivative. I loved them and am currently re-reading the first, Slow Horses, to savour the prose and storytelling skills of Herron.
Staying with a genre theme, after hearing a recommendation on the excellent Talking Politics podcast this summer, I read To Kill the President by Jonathan Freedland, a political journalist writing under the pen-name, Sam Bourne. It’s a perfectly constructed and written thriller in its own right, although I’m not overly tempted to read the rest of the series. What packs a punch for the contemporary reader is the plot-line about a populist US president who tries to start a nuclear war against North Korea in a fit of pique when he thinks the news channels are poking fun at him. A couple of his staff plot to kill him and mayhem ensues.
Reading this in the summer, when tensions with North Korea and an unpredictable President were in the headlines gave me a slightly thrilling sense of vertigo-like confusion – when I thought about a news story or a bit of the plot I frequently had difficulty telling fact and fiction apart.
Finally, in the fiction category, I spent a large part of the year on an expedition-like attempt to scale Jerusalem, the 1,200-page, 600,000 word Alan Moore book about eternity and Northampton, his home town. I summited, as they say, a few days ago and was largely delighted by the experience, which was accomplished in a series of three or four focused pushes with breaks to recover and let my mind un-warp itself by reading shorter, works.
There are a handful of chapters I found it hard to follow – for instance one written as a script for a play, and another in deep slang, spellings phonetic and tough to follow. In the main though, it was a seemingly unending epic, filled with small moments of awe and awe-striking insights.
I’d like to read more general non-fiction in 2018 – this year’s reading was dominated by business books – see below – and I’ve a pair of history inflected books to recommended.
Homo Deus is a fantastic book and should be required reading for anyone interested in the world and where we are headed as a species. In his previous book, Sapiens, Yuval Noah Harari gave us a meta-history of humanity’s story to date. Homo Deus looks to the future and what things like artificial intelligence will mean for us. His thinking is fresh and even on topics you may already familiar with, the book pushes you into thinking more deeply and more long-term about what our current tumultuous technical and social revolutions will mean.
I also enjoyed Prisoners of Geography, which uses the conceit of ten maps to explain why “geography is destiny”. Like Sapiens, it is effectively a meta-history, giving context to the behaviours of governments over the ages. It begins Russia early on, which brings this idea to life. In the current geo-political atmosphere, we have a narrative in the West about a tyrant and gangster state – but seen in the context of that enormous country’s geography, Putin’s concerns and strategies appear as part of a continuum from the first Czars to the present day. The chapters on China and India stuck in my mind also.
Running a growing business, business books are really important to me. They’ve shaped every part of the journey of starting and growing a company, providing in turns inspiration, how-to advice and emotional life-lines. While listening to the FT podcast about business books earlier this year, it was a delight to hear someone recommend the fabulous Station Eleven, by Emily St John Mandel, rather than a business book. It prompted a discussion about how many business leaders would be better served by reading fiction for its insights into humanity rather than books specifically about their field. This is true, on one level, in that being grounded and having a life of the mind beyond balance sheets and boardrooms would improve many an executive, there’s still a place for reading about business themes – as long as you find the right books.
It’s been a good year for my reading in this area, so I’m going to recommend six that were helpful or inspirational and well above the bar set by many books in this genre, neither too breathlessly in love with a single idea, practical, and very, very readable.
Deep Work, by Cal Newport: This is a book that people had been recommending to me for a while, and indeed was on my to-read list, but somehow I’d not found myself reading until now. It deals thoroughly with one the most important subjects for knowledge workers, indeed for anyone with a smartphone who values their autonomy and self-direction in life: attention and focus. Newport brings together interesting research and personal experience of managing an academic and authorial career to suggest how we can resist the distractions of the digital age and get meaningful work done. Priceless advice.
Radical Candor was written by Kim Scott, who worked in several top Silicon Valley companies including Google and Apple. This is a book with a single big idea, but it keeps things short, to the point and doesn’t outstay its welcome for the most part. You could pick up the gist of the book by looking at the quadrant diagram that summarises it (below), but you probably wouldn’t follow through on its brilliant advice. Scott days that most people are poor at giving direct feedback – either they fall short on candour and are “ruinously empathetic”, aren’t caring enough in the delivery and become obnoxiously aggressive (an arsehole in other words), or – usualy for fear of being seen as an arsehole, avoid giving critical feedback altogether – which it calls manipulative insincerity.
Avoiding giving – and recieving well-intentioned feedback that could help people grow and improve their performance is an everyday act of cowardice that too many of us fall into on one occasion or another. That’s why I recommend this book to anyone who’ll listen – there’s nothing that would cut the crap more in the modern workplace than actually sharing honest, well intentioned feedback.
Machine, Platform, Crowd is the follow up to the amazing The Second Machine Age, by MIT’s Andrew McAfee and Erik Brynjolfsson. This may be the most widely read book by my colleagues at Brilliant Noise, as I saw at least three physical copies doing the rounds in the office, and it was cited widely in our work on digital leadership with clients. I’d still recommend The Second Machine as an essential read, giving as it does a clear context for our current digital revolution as being as profound if not more so as the industrial revolution. This book does a good job of setting out frameworks and questions to understand how we can make sense of the digital age and seize the opportunities to improve the world.
Organization Design, by Naomi Stanford is a practical, thoughtful book that pushes the reader to go far beyond the org chart as a means of designing the organisation. Organisation design is fiendishly difficult, not least because, as Andy Grove of Intel once said, organisations are organic, not machines. You’re working with the messiness of culture, of human social networks and the individuals in them when you set out to re-organise or re-design them. I read Standford’s FT Guide to Organisation Design last year and there is some overlap with this book, but I was grateful for the added depth and space to explore the subject that this book offers. It is a book that every executive should read, not just those involved in operations or HR. (It also has a really cool cover, considering it’s a pretty technical business tome – see below.)
Building the Agile Business through Digital Transformation is, like Organization Design, a book for people who want to engage deeply with the subject and get things done. It was written by Neil Perkin, in collaboration with Peter Abraham, who is a brilliant curator of ideas and insights on his blog, and his famous Google Firestarters series of events. He’s also – full disclosure – been involved in the Brilliant Noise Dots conference since it started, finally taking to the stage as a speaker this year to talk about this book. It’s rich in examples, case studies and frameworks for analysis and planning change. It’s so close to my heart and Brilliant Noise’s focus that we bought at least 50 copies for friends and colleagues. It’s a textbook for getting on and changing how your organisation works with digital.
I went looking for a book about leadership and leveling up at the start of this year. Brilliant Noise has been growing quickly in the past few years and in 2017 we went from 28 to more than 40 people. Sensing the change in the company that was coming and realising its leaders would need to re-invent themselves once again to be what the company needed them to be I bought What Got You Here Won’t Get You There. If I’m honest, I was little worried and disappointed at first – I was hoping for manual on how to run a fast-growing business as it scales and what I got was a simple and straightforward guide to getting out of the way of the talented people and teams that you’ve developed. It’s a very specific book about leadership – if you’re stepping up into a new role and can feel the imposter syndrome kicking in, it is time to pick up this book. It’s about stopping the things that made your career so far and moving into a role of supporting and coaching your teams to help them succeed. So simple, as simple as the brilliant title implies, it’s a humbling, inspiring management classic.
Prof Hansen studied the performance of 5,000 people and discovered that those who pursued a strategy of “do less, then obsess” ranked 25 percentage points higher than those who did not embrace the practice. He and his team also found that it was dangerous to assume that “passion” was a key to success. In fact, passion can lead people down the wrong road, to failure or burnout. The best performers in the study were those who matched passion for their job with a purpose, which could be as simple as making a meaningful contribution to the organisation.
In the spirit of focus, Baumeister and Tierney, in their book Willpower, recount a story which set my own attitudes about priroitising for years to come.
So how exactly does a modern general plan for the future? That question was put to a group of them recently by a psychologist who had been invited to give a talk at the Pentagon about managing time and resources. To warm up the elite group of generals, he asked them all to write a summary of their approach to managing their affairs. To keep it short, he instructed each to do this in twenty-five words or less. The exercise stumped most of them. None of the distinguished men in uniform could come up with anything.
The only general who managed a response was the lone woman in the room. She had already had a distinguished career, having worked her way up through the ranks and been wounded in combat in Iraq. Her summary of her approach was as follows: “First I make a list of priorities: one, two, three, and so on. Then I cross out everything from three on down.”
The other generals might have objected to her approach, arguing that everyone has more than two goals, and that some projects—like, say, D-day—require more than two steps. But this general was on to something. Hers was a simple version of a strategy for reconciling the long-term with the short-term, the fussy with the fuzzy.
The simplicity of just two priorities is viciously hard to keep to – but incredibly powerful if you can do it. The most striking thing about the story is not just that only one general had the best answer, it was that they were the only one with an answer. The others couldn’t describe a system – and therefore didn’t have one.
We’re working with OKRs, a goal setting and reporting system popularised by Intel and Google, for the first time in my team at Brilliant Noise. So far I’m enjoying the process – I like that the OKR approach is as is about the process and the trying as much as the end goals. Do-or-fail end metrics warp incentives and undo alignment as much as create it sometimes.
Creating better systems that move you in the right direction, rather than big, binary targets that sound great to say, but feel awful to actually set out and achieve, can be very demotivating. As Scott Adams, creator of Dilbert says in his book How to Fail at Almost Everything and Still Win Big:
If you do something every day, it’s a system. If you’re waiting to achieve it someday in the future, it’s a goal.
During those terrible days after 9/ 11, when the whole country was being whipsawed by emotion, or the weeks between September 19 and October 10, 2008, when the Dow fell 3,600 points, there were times I felt like hugging our computers. They kept their cool no matter what. This combination of man and machine is wonderful. The process of man’s mind working with technology is what elevates us—it’s what has taken us from an economy where most people dig in the dirt to today’s Information Age. It’s for that reason that people who have common sense, imagination, and determination, who know what they value and what they want, and who also use computers, math, and game theory, are the best decision makers there are. At Bridgewater, we use our systems much as a driver uses a GPS in a car: not to substitute for our navigational abilities but to supplement them.
Dalio treats principles as decision-making algorithms. He writes down what he thinks works as a decision-making process, then compares the results.
He’s also built a company culture that is all about finding the best information in order to make the best decisions – something he calls an idea meritocracy. So developing processes that allow people to make decisions in tandem with machines has been a natural extension of his approach.
It reminds me of Gary Kasparov’s “advanced chess” – also known more exotically as centaur chess – in which humans play alongside a machine. Players have likened it to moving from running to Formula One racing – it makes chess high speed, with ideas and approaches quickly tested with machines, or new angles the human polayer hasn’t considered suddenly presented as possibilities by the machine.
Ray Dalio described his ideas meritocracy model in a TED Talk.
I talked about Kasparov and “bicycles for the mind” a few years ago at the Inspiration conference.
Image: Popular Mechanics – the ciy of the future (1928)
“The best way to predict the future is to invent it,” said Alan Kay, the pioneering computer scientist.
In this context “invent” here means to build not just to imagine or to conjure a vision. Futures are built things, technology and humans made into new shapes and structures. Imagining the future is a way of thinking about possible ways things might evolve – often these days as a way of satirising the present, rather than a serious effort to imagine how things could be – with a fair wind, and some lucky politics – you know, better than they are today. We are well served with literary and cinematic dystopias, but there are apparently few creative efforts to imagine a brighter tomorrow.
A lovely post from Futurism surveys how people a century ago imagined the future. There are delightful near misses – “correspondence cinema” is almost Netflix – and amusingly accurate forecasts. The times 100 years ago were not unlike ours – as we teeter on the edge of an AI, automated, bio-engineered century:
People in the early 20th century were hopeful about the future innovation might bring.The technology that came out of World War I, and the growing potential brought by electricity (half of all U.S. homes had electric power by 1925) had many looking ahead to the coming century. Futurists of the early 1900s predicted an incredible boom in technology that would transform human lives for the better.
Much of this came to pass – along with world wars, genocide and new fangled ways to to suffer and die, which we’re still working on all the time. And then again – there are billions more humans alive today than in 1917, with proportionately fewer afflicted by child mortality, living longer, less likely to be hungry or poor.
At the moment, reading Fire and Fury about our recent, implausible global political past and reading the ongoing news about our even less convincing present, I wonder if we are too confused by the contemporary to see anything but collapse and catastrophe in our future. It could be a fertile fictional world to explore though, a better one. Could be worth a try.
We used to wonder about the future of advertising in brand marketing – now we are wondering about the future of brands themselves.
In his book about the tech giants of the 20-teens, The Four, Scott Galloway casts Google and Amazon as threatening the very existence of traditional consumer brands:
The insights into consumer behavior Google gleans from 3.5 billion queries each day make this horseman the executioner of traditional brands and media. Your new favorite brand is what Google returns to you in .0000005 second.
Galloway is nothing if not a master of the pithy line – but he backs up his argument with data:
the cost of customer acquisition continues to rise as consumers’ loyalty to brands erodes. You have to keep reacquiring them. In 2004, 47 percent of affluent consumers could name a favorite retail brand; six years later that number dropped to 28 percent. That makes pure e-commerce play increasingly dangerous. Nobody wants to be at the mercy of Google and disloyal consumers.
Of the thirteen firms that have outperformed the S&P five years in a row (yes, there’s just thirteen), only one of them is a consumer brand—Under Armour. Note: it will be off next year’s list. […] Amazon, armed with infinite capital provided by eager investors, is leading a war on brands to starch the margin from brands and deliver it back to the consumer. Death, for brands, has a name … Alexa.
When you sit in an Uber in Brighton or a Didi in Beijing you will see evidence of this – $20 dash-cameras, car gadgets, at least two smartphones – all costing in total less than the ridiculously high-end luxury UX and glass luxury that might be your iPhone X.
Because of its scale and relative lack of interest in profit – the manufacturers and the consumer are connected by Amazon without it feeling or acting like a middleman in the transaction.
Allen Fung, a general manager at Sunvalley, which owns several upstart consumer tech brands explains that this isn’t about cheap, low quality tech:
It’s not a race to the bottom,” Mr. Fung said. “Sellers are forced to create better products at lower pricing, and sellers who aren’t able to do that just get weeded out.”
Competing and winning on Amazon means more than just cheap though – good customer service is essential part of the equation.
Mr. Fung recently spent a couple of hours providing an in-depth look at how he manages his company’s brands on Amazon. To win a certain product category — portable chargers, say, or children’s night lights — the company is obsessive about monitoring customer feedback, including the rate at which its products are returned. Sunvalley recently hired a team of customer service agents to respond to complaints. It has also hired industrial designers to improve the look of its devices — which also helps it stand out from other commodity devices on Amazon’s results page.
I find these brands, such as Anker to be ones that only really come into my consciousness when I’m looking for something on Amazon. They carry little cachet or style but with their reviews to back them up they are like cousins of the Amazons Basics range – as cheap as it gets but definitely reliable.
Perhaps we can call these low-friction brands, or the children of Amazon. The brand is built in the substance not the surface of their offer. the friction is low, because the investment in “brand” is limited to a logo, a name and a focused customer experience from purchase to product to support.
They are cutting out advertising and branding costs to lower cost and increase value to the consumer. Low-cost used to mean poor quality and zero customer service – because of the power of transparent reviews on Amazon, low-cost means a complete focus on what customers actually want.
Is this a new mode of branding, a utilitarian subset, or a glimpse of a future where brands are what Google Home or Amazon’s Alexa tell you are the best for whatever you need in that moment?