Thursday, January 18, 2018

Wall St. Journal & New York Times Validate Our Prediction About Screen Addiction

In one of our predictions for 2018, published Dec. 14, 2017, we made what we thought to be a longshot prediction: That this year, people would recognize screen addiction as a real issue. Here's what we said:
The ‘60s may have been the Age of Aquarius but this decade seems to be the Age of Anxiety and Anger. One cause: screen addiction. Constantly clicking our smartphones for the latest news – and it seems that there’s continually breaking news – may help us feel we’re on top of the situation but it leaves most of us feeling more empty, worried and angry than before – despite political preferences. We anticipate more coverage on stress, anxiety, mental health and ways to de-stress, which includes taking a break from your device – aka a technology cleanse or digital detox – which is healthy and a good idea but may seem impossible to do.
 The reason we thought it was a longshot is that over the past couple of years, there has been the occasional article about digital overload but it hadn't coalesced into something more than a blip. But last year, we felt that could easily change in 2018.

And it has.

Check out:

  1. The Wall St. Journal's "Debate over iPhone use by young people reflects the misgivings some in the industry feel toward smartphones' ubiquity: Silicon Valley Reconsiders the iPhone Era It Created"; and
  2. The New York Times': "Tech Backlash Grows as Investors Press Apple to Act on Children’s Use: Apple should give parents more tools to curb technology use by children and study the health effects of excessive screen time, two big funds said."
According to the Journal, "a letter to Apple on Saturday from Jana Partners LLC and the California State Teachers’ Retirement System, or Calstrs, which control about $2 billion of Apple shares....urged the tech giant to develop new software tools that would help parents control and limit phone use more easily, and to study the impact of overuse on mental health." And also, the Journal reported, "On Monday, Tony Fadell, a former senior Apple hardware executive involved in the iPhone’s creation, also called on Apple to do more, saying on Twitter that adults are struggling just as much as children with smartphone overuse."

Last year, Fadell apparently began voicing concern, but the media didn't start paying real attention to it until this year.

In it's article, the Times quoted the same letter, describing "a backlash against big tech has been growing for months." Which is another trend we predicted in which we said, "There will be a debate about whether or not and how to regulate Facebook, Google, and Twitter." We did not use the term "backlash," though we should have, and we did not mention Apple specifically but later in that paragraph, we do say that one of the underlying questions would be "Has big tech gotten too powerful." And we think that increasingly, the answer is: "Yes" (and that's part of the backlash).

In fact, check out this front-page (remember that the front-page used to be an indicator of importance) article from the WSJ: "The Antitrust Case Against Facebook, Google and Amazon: Facebook, Google and Amazon dominate their worlds just as Standard Oil and AT&T once did. Critics say they should get the same treatment. The answer to the antitrust question depends on a narrow test: Are consumers worse off?"

For us, screen addiction and big tech backlash and big tech's power are important societal issues. We doubt much will happen to address either the screen addiction or big tech's power (and we think the anxiety and addition they cause does amount to consumer harm) but it is significant that these issues are being raised.



Tuesday, January 16, 2018

Key Questions Startups (and Others) Should Ask When Developing Their Positioning for a Marketing Campaign

Our approach to helping our clients is to start by asking key questions as they develop their messaging and positioning for a marketing campaign.

For startups, those questions include:
  • What do your customers need?
  • What is their customers' pain points?
  • Are you solving the right problem?
  • How does your clients feel about the work they do?
  • Do you have the understanding and empathy to see things through your customers' perspective?
  • What problem are you solving and what are you bringing to the market that's not already there? Or that's an improvement over current competitors? (Note: sometimes what startups may be solving isn't through a new technology but through a new approach or business model. For example, GE changed how it charged for maintaining aircraft engines, with a pay-by-the-hour that proved to be more cost-efficient than the prior model, and very effective for engine owners and for GE. Really it was a change to how it charged customers.)
  • What story can you tell about your company and its offerings? 
  • Can you tell that story without hiding behind jargon?
  • What is your value proposition? (This is a standard question but we once met with an experienced team and they did not have that answered. It took the CEO about five minutes and three false starts before he nailed this, and we knew that was a problem, and would have walked away except we had worked with them before; they did quickly solve this but it was a big concern for us.)
  • Have you stress-tested your assumptions? (It's one thing to go with your gut but you need to test out the market that you're right. And then you have to realize that even market testing won't always be correct or else we wouldn't have the Museum of Failure, which highlights more than 50 failed products from some major, experienced companies.)
  • If there are other companies addressing the same pain points as your company, how is your approach different or better? Are you going after a different set of customers? For example, a competitor may target small businesses so you could target midsize or large businesses. We worked with one company whose software integrated directly to other software, like databases or key other applications than its competitors -- the key advantage was easier integration with all the other tech their customers use.   
  • How much money do you need to launch or continue? How much money do you have? Do you have sourced for additional funds, in case you need more money, which you will.
  • Are you and your co-founders, early investors and first set of employees all on the same page? We've once met with a prospective company that told us they were a month away from launching (which is why they called us in), but when we talked with the CEO, chief technology officer (he was also the actual founder) and VP of sales, they each described a different company.  Even as they described the tech in similar ways, they talked about different customer segments, different ways the technology would be used and different pain points they were addressing. We walked away, telling them that if they couldn't agree, they were more than a month away from launching. Unfortunately, this is not the only time we've encountered a management team that described a vastly different company. We walk away from those situations.
  • Who are likely investors in your startup? What do they bring to the table other than money? Can they open up doors to end customers or distributors? Can they help approach key partners? 
  • What does your investors' presentation look like? Is it professional? Does it answer questions investors are likely to ask? (We've seen some that focus exclusively on the technology being developed, not on the business. You need to make sure the investors understand your business goals. Also, since investors often decide to invest based on the quality of the management team, does your presentation emphasize what your management team brings to the table -- as in why should investors risk money by betting on you? (When we did a messaging project for one startup, and presented to the board, we realized a few board members really didn't understand the business of the company they had invested in; that's a problem.)
  • Are you planning to raise money via Kickstarter or Indiegogo? You'll need a different approach from what you'll need going to VCs and other investors. These are customers, and they will expect delivery of what you describe. Which means, if you get the funding you request, you can't pivot your company or offering -- as you could if you bootstrapped or received angel or VC funding. (There are other challenges in going the crowdfunding route, and this article won't go into depth on that, except to point out that it will be hard to get vendors -- like a website designer, SEO agency, content developer and PR/social media team -- if you don't pay them upfront.
  • Do you know how you're going to sell your product or services? Do you have a pricing strategy?
  • What's your company's culture? How does it help? (This is important because the bro-culture of startups like Uber have at some point been a big distraction that has lost it good will and customers.)
  • What's your Amazon strategy? You don't have to be a retailer to need an Amazon strategy. Amazon has expanded to so many different sectors that you may be competing with Amazon and not realize it. For example, if retailers are using cloud services, they may want to avoid Amazon Web Services (AWS) because, by using AWS, they will be underwriting a competitor. A.I. companies need to figure out how they play with Alexa or compete with Alexa; because even though Alexa may be stuck inside Amazon's Echo speakers, that's true for today but may not be true in 2019. This is a topic/challenge we'll discuss more this year.
There's a good flowchart from Inc. that outlines some other key points for startups to consider. 

This is not intended to be the end-all of questions that startups and more mature companies should be asking themselves. But these questions (and we have many more we ask, like about the company's mission and core messages) can help companies figure out what they need to be asking themselves.

If you have any questions, drop us a line at info at birnbachcom.com.

Monday, January 8, 2018

NY Times' Farhad Manjoo Validates Several of Our Predictions

We're big fans of New York Times' tech columnist Farhad Manjoo. So we're thrilled to see his latest column, "Expect 2018 to Be More Sane? Sorry, It’s Not Going to Happen" (print headline: "In 2018, Expect Chaos To Be the New Normal") because his predictions are in line with ones we made Dec. 14, 2017.

For example, in his Jan. 4th column, Manjoo said, "You're fooling yourself if you think 2018 is going to be any different, sanity- or anxiety-wise, from the roller coaster of the year just concluded." We agree -- especially the part about anxiety-wise because in we said, "People will be more anxious and angry" in 2018. 

Going further, we said:
The ‘60s may have been the Age of Aquarius but this decade seems to be the Age of Anxiety and Anger. One cause: screen addiction. Constantly clicking our smartphones for the latest news – and it seems that there’s continually breaking news – may help us feel we’re on top of the situation but it leaves most of us feeling more empty, worried and angry than before – despite political preferences. We anticipate more coverage on stress, anxiety, mental health and ways to de-stress, which includes taking a break from your device – aka a technology cleanse or digital detox – which is healthy and a good idea but may seem impossible to do.
How does Manjoo describe things?
Chaos is the new normal; the apprehension you feel every time you get a notification on your phone -- the fear that you don't know what fresh horror it could bring -- isn't an overreaction but an adaptation. Thanks to phones and Facebook, anything really could happen tomorrow.
We really like that -- as a phrase, not the reality of it: Chaos is the new normal. And "the fear you don't know what fresh horror it could bring" -- very compellingly written, but his capturing the same thing we did...just we got there a couple of weeks earlier.

This also touches upon another of the trends we identified on Dec. 18th: The news cycle, powered by social media, will continue to speed up.
There were days in which there was major news several times a day. We expect that to continue in 2018 – and that when there’s a slow news day – let’s say only one big news story – consumers of news anxiously click on refresh, thinking they must be missing some additional news. Regardless of political views, people, including late-night comedians are finding this exhausting.
According to Manjoo, the implications of all this is that "Nowadays, because we're hyperconnected, we see butterfly effects everywhere...but it's not just that one-off stories cause huge cascades; it's that in a connected world, there are now so many one-off stories capable of setting off cascades, and no one knows which ones will hit."

The problem with that, Manjoo said, "Technology isn't stopping. The pace of technological change is in many cases too fast for anyone of us to comprehend or get used to; as a result, just as the world seems to get its head around one new force unleashed by tech, another comes along to discombobulate our efforts to respond to it." 

That is one reason many of us are so anxious these days.

Again, we don't like where this is going but we're glad we're seeing the world the same way as Manjoo.


Friday, January 5, 2018

Wall St. Journal Valudates More of Our Trends

In an article about the pressures facing CEOs, and the boards that hire and fire them, "Hackers and a Shrinking Talent Pool Top CEO Concerns for 2018" (print headline: "CEOs Gird for a Year of Disruption"), the Wall St. Journal identified several key trends, including:
  • Data breaches and cybersecurity. In our list of Ongoing Trends in 2018, we said, "There's never enough cybersecurity/privacy." According to the Journal, CEOs are recognizing that protecting their companies (and their customers and partners) from data breaches and cyberattacks is a critical risk. One CEO quoted in the article said, "These bad actors keep getting smarter and more aggressive. It's an ongoing war." We think it's an important issue, and that companies all need to bake cybersecurity and anti-data breach measures into their cultures even if they are not even close to being a security company. By that we mean, practically every company needs to have a solution in place, and needs to re-evaluate on a regular basis if they're doing enough.
  • Talent battles. Among those we included in our list of key trends for 2018, we identified the labor shortage an important issue. We see the labor shortage already affect the A.I. and biotech sectors, and the Journal says there is a shortage of engineers at financial services companies, noting, "In their quest to build highly sophisticated technology platforms, some financial-services giants now have more software engineers than bankers and traders on their payrolls."
To be fair, we did not cite data breaches specifically in our trends but we think cybersecurity and privacy does cover it. And we didn't go into as much detail about the talent battle in our blog as we have in a subsequent article that we expect to appear shortly. (We focused more on the impact on the nature of work, which is still a story we think will be addressed in 2018.)

Let us know what you think we got right or what we missed.

Tuesday, January 2, 2018

Wall St. Journal Validates Predictions on Bitcoin & Amazon

Though it's freezing out, we were warmed to come back from New Year's to see that the Wall St. Journal has validated two of our trends.

We predicted that bitcoin would be the subject of daily news coverage, and that seems to be very much to be the case, just check out the latest in a stream of articles about bitcoins: "For Bitcoin, A Year Like No Other In 2017, bitcoin became one of the market’s greatest speculative crazes; it remains to be seen whether it can live up to the hype." We expect this to continue throughout 2018. What's more, we expect to see dedicated columnists and online media outlets devoted to bitcoin. (That said, we're not sure bitcoin is not some kind of trend, and we are not endorsing bitcoin or cryptocurrency -- just saying we expect it to be a subject that gets covered by the news media.)

The other trend is about the market force and impact that Amazon wields. Check out Christopher Mims wrote, "Even Amazon, a Colossus, Has Its Limits," which does say that Amazonification is not inevitable. According to Mims, part of where Amazon is most successful is in driving down prices of commodity items, not in developing premium devices like an iPhone (its success with Alexa notwithstanding). He said, increasingly, Amazon serves as a retail platform for other retailers, taking 15% of their sales via amazon.com -- and that's why Amazon has its limits: because Amazon still needs other retailers to succeed on its platform. 

We think that's true but that Amazon continues to be the major retailing factor in 2018 and beyond. We expect Amazonification to be debated and examined throughout the year.

Wednesday, December 20, 2017

WSJ Validates Our Prediction About IoT Isn't Cybersecure

In our list, Ongoing Trends for 2018, published Dec. 18th,  we predicted that "IoT will continue to be victim to cyberattacks."

In its special cybersecurity supplement on Dec. 19th, the Wall St. Journal published an article entitled, "Smart Devices, Increased Risks: John Carlin on how security isn't ready for the Internet of Things." The article featured John Carlin, a former assistant attorney general in the national security division of the DOJ, who validated our main point: "Across the board, we didn't properly calculate the price of risk in making the decision to move all of this information and connect it through this insecure medium."

Carlin also said:
With the Internet of Things, we are on the cusp of a massive exponential increase in new devices that can cause immediate loss of life or serious injury that are going be connected through this same insecure protocol. What we can’t do or shouldn’t do is make the same mistake again of discounting risk before we make this societal transformation.
The move from a car with a driver to a driverless car, for example, is going to bring significant changes to our society and the way we move goods and services. In government, we didn’t think of trucking as something that could fundamentally disrupt society. But if all of those trucks are connected, you can disrupt it on scale.
The Journal also published another article, "Connected Device Manufacturers Not Addressing Cyber Risks: Manufacturers of connected devices aren’t adequately addressing cybersecurity threats associated with them."

We love the idea of IoT but are concerned and skeptical about security issues around the convenience that IoT offers its users -- and potential hackers.

Meanwhile, since our prediction on IoT and cybersecurity came a day before these articles hit, you can say that we scooped the Journal.

Tuesday, December 19, 2017

New Popular Naming Strategy: Drop Part of Your Corporate Name

The latest popular corporate naming strategy is pretty basic. Recently, Walmart Stores, Dunkin' Donuts and Business Insider have all dropped part of the name to become Walmart, Dunkin' and Insider, respectively.

For Walmart, the move is to position the company as an e-commerce player.

For Dunkin's, it's to move beyond just donuts.

And For Insider, it's because they now cover more than just business.

That strategy may be a problem for companies with only one name. 

Of course, Fox seems like it will drop its name, if the acquisition with Disney goes through.

Usually, we recommend against changing a company's name, especially if there's a lot of brand equity in the current name. And we have some skepticism that a name change makes much of a difference. (A new logo, on the other hand, can make a difference.) But with Walmart, that's what everyone calls it, anyway, so we doubt it will make much of a difference.

The same with Dunkin's.

That may not be true of Business Insider, a good online news site. Insider sounds like a TV celebrity gossip show more than a reputable news source. But, as we mentioned in our trends, 2018 will be a tough year for online news sites. So we expect more changes. And we wish Insider the best of luck.