Above: When banks become bikes, meet the Citi Bike
How do brands add to the Collaborative Economy, if they don’t offer physical goods? They sponsor the sharing movement.
Meet Citi Bike in NY. I’ve learned from my New York-based colleague, Rebecca Lieb (Marketing and Advertising analyst), that CitiGroup, one of the world’s largest brands, is sponsoring the country’s largest bike sharing program in our most populated city. That’s right, the sustainability trend for bike access to New York citizens and visitors is rolling out in the next few days, with prominent sponsorship and funding from Citibank.
This program models after the Barclays Card sponsorship of bike-sharing in London, a trend that is starting to sweep across cities around the globe. Cleverly dubbed a “Citi Bike,” CitiBank will offer 6,000 of these blue unisex bikes and 330 docking stations in Manhattan and Brooklyn, with a vision to grow to more than 10,000 bikes. These all become mobile advertising units, travelling the streets of the financial center of the world. The data derived from these bikes and their digital check-ins, along with web and mobile features, will provide the CitiBank system with rich data at a local level. Digital marketers should be drooling.
There are a number of brands that are jumping into the Collaborative Economy space (see index), either by converting their products to a service, fostering a community of reselling around them, or by sponsoring. Altimeter will be publishing a report on the Collaborative Economy next week in conjunction with my keynote speech at LeWeb. The Collaborative Economy isn’t just about saving the world through sustainable consumer practices. It’s also about the brands and corporations who want to be associated with it.
The bottom line: Branding and sponsorship are just the start. Expect to see new models emerge, even for financial services companies.
Disruption: Traditional Travel Sites Fall Behind –New Players Taking Preference
Ever wonder how well companies are performing, esp if you don’t have access to their financials? One big clue is the organic social media chatter being discussed about them, which we refer to as a component called mindshare. The above graphic (upper right is best) shows how AirBnb has far more chatter about its brand over traditional travel websites, with mostly adoring comments pushing it to the upper right. Data supplied by NetBase (an Altimeter client), who crunches unstructured social content into insight and analytics.
AirBnb unique experience of other people’s homes poses threat to traditional hotels.The below selected quotes, also provided by NetBase shows the preference for both the unique website experience, as well as the unique listings beyond traditional hotels. Select tweets below that helped to derive the data, show how consumers are finding pleasure in unique AirBnb experience, and some having better quality experiences as people become like hotels. What makes AirBnb so unique? They’ve already integrate Facebook social graph, which allows you to see which one of your friends has stayed, or is a host, increasing trust. Secondly, they’re very unique local neighborhood breakdown, such as this one of SF’s Mission district sets them apart as an experiential travel site.
Traditional travel sites lumped in neutral land. Perhaps a marketing executives biggest challenge is trying to segment themselves from similar competitors –the cost of marketing rises to be unique. The traditional travel websites like Expedia, Travelocity, Priceline, and Hotwire battle it out in no man’s land, in neutral sentiment. Because they’re tightly grouped together with mostly neutral sentiment it means they’ll have to spend even more on marketing to differentiate –or make radical product changes to stand apart from the pack. Expedia which has the most discussion in the space straddles further into negative sentiment, while Travelocity has far less discussion –and most it in the negative sentiment.
Outliers Orbitz and Hipmunk hold unique market opportunities. For some marketers, being in a unique position, even with negative sentiment is a greater opportunity. Orbitz, while disliked by organic social media sentiment offers a upside for a company like Orbitz is they have the rare opportunity to tell a comeback story –bypassing the four in the middle. Three year old new player Hipmunk, while has a small amount of market chatter has an overwhelming positive sentiment as they aggregate and simply travel listings. Hipmunk’s opportunity is to get their already happy customers to evangelize on their behalf, stealing market chatter from traditional players.
The Sharing Revolution is Rising –Corporations Must Develop a Strategy. Traditional businesses (esp stagnant ones) must develop collaborative economy strategy –or risk disruption from new sharing startups. While this is only a look at one sector, hospitality and travel I look forward to exposing more of the data in this space, while hotels and cars were first to be disrupted, but if you’re in a traditional corporation, you must pay attention to the sharing revolution, which will impact all verticals. Altimeter is publishing an open research report on the Collaborative Economy on June 4th, 2013, focused on how corporations can be relevant with the sharing revolution.
Below: Select tweets provided by NetBase that illustrate the preference for AirBnb over traditional hospitality and travel websites.
I’m continuing my research on business disruptions, with a honed in focus on the Collaborative Economy, you can read all my posts on how this impacts corporations. One of my thesis that I sought to test is the following: “Sharing startups in the collaborative economy are using social technologies”. To find out, we conducted research by analyzing 30 of the features on well known collaborative economy startups to find out the differences and similarities.
What did we find? These sharing websites are utilizing a great deal of social technologies, but instead of sharing ideas, they’re sharing products and services. In fact, nearly 3/4 had social profiles and over half already had Facebook Connect, we should expect those rates to only increase as it spurs adoption. Like online social business communities hosted by Jive, Lithium, Bazaarvoice, Adobe, Mzinga, Telligent, GetSatisfaction or Uservoice, nearly 3/4 had reputation features to rate and rank experiences or other members.
Above: See how AirBnb utilizes Facebook connect to find trusted reviews, and hosts who you may know and trust.
Above: We tallied the social features and integration of the collaborative economy startups and found striking similarities
Above: As social data spills over to sharing economy startups, these markets will only further intertwine.
Above Image: Headcount of social business (circled in orange) slightly decreases before large growth.
Social Business Headcounts Change as Programs Mature
Like the calm before the storm, your social business headcount is likely to decrease 10-20% before it radically expands. Altimeter found through two independent surveys to enterprise class (Companies with over 1000 employees) survey respondents in different years that they both have a drop off in headcount at year 2-4. We’ve survey corporations both in 2010, as well as in Q4 2012 to find out how social business programs are structured. Much of the research was recently published in the report, the Evolution of Social Business. So why this change?
After experimentation, unchecked programs get sanitized as a central body takes control. Many companies I’ve seen inside of have often experimental programs occurring for the first 1-3 years. Labeled skunkworks, rogue, or sandbox programs, this “wild west” grows out of control, sometimes causing stress or resulting in a social media crises. Often corporate communications, marketing, blessed by an executive sponsor seeks to wrangle control of these programs, by anointing a working team to build a strategy. In short, the wild wild west moves from unchecked teams in outposts to a new centralized model.
A core team consolidates, finds efficiencies in a hub and spoke model. We often see companies emerge in a hub and spoke model, where a core team is serving the rest of the company in a coordinated fashion. This leader, the Corporate Social Strategist, leads the charge, often reducing excess headcount deploying social and along with it, rogue efforts. Interestingly, the data shows this happening in the 2010 early market at year 3-4. Yet fast forward two years to 2012 and we see the consolidation happen much earlier, in years 2-3, as companies have gotten wiser from their peers.
Explosive growth occurs as team scales in “dandelion”, multiple hub and spoke model. After the consolidation occurs in both program strategy and the headcount as illustrated in the above diagram, companies see explosive growth as the company “gets the social religion”. If the core team has structured their program up for scale, they will have invested in social readiness, as well as have a strategy to avoid massive proliferation.
Social business follows a cycle expansion, contraction, then explosion before maturity. Two data distinct data sets helped to tell this story. Expect to see social business programs hit maturity to consistently spread across the enterprise in a safe manner after 5-6 years with proper care and planning. Watch the patterns in your company, after rapid consolidation and program efficiency occurs, be prepared for radical growth as the rest of the enterprise business groups start to adopt social, including their own social leaders in business lines, departments, geographies and product units.
I know that it’s discomforting to hear that customers are now buying your products once, and then sharing many times with each other, because it means that your revenues will diminish. This movement, called the Collaborative Economy (see all my posts on this topic) is on the rise, so I decided to go through the experiment, so I could feel what you’re going through.
I put my own family assets at risk just to feel disrupted.
I put our cherished family car up for rental on RelayRide, a site that allows people to share their cars with neighbors. As the first person to own this car, I have an attachment to it, and have taken rather good care of it for many years. Saturday morning, a young Duke University student picked it up from me for the weekend. I didn’t know who he was, nor do we have any shared contacts. While RelayRide promised me that they screen renters and provide insurance, I couldn’t but help see a piece of me leaving as he drove off.
It felt unnerving on many levels.
First, I allowed a complete stranger to take my asset. I asked myself, “What’s he doing with it? Will it come back in the same condition? What about liabilities, such as accidents, traffic or unaccounted bridge tolls? Second, I was unnerved, because my training to be a good capitalist in business school did not prepare me for this new business model. Third, I worried about what my current insurance company would think. Finally, it was unnerving because most of our clients at the company that I own serves brands, i.e., I make money from those brands.
The good news is that everything was just fine.
This morning I woke up and there was the car, parked at the curb as agreed. My keys were left in my mail slot and now I’m $50 richer. So what did I learn? This new collaborative economy requires trust. Trust to let go and trust that the startups that you partner with, and their customers, are trustworthy. This is just the start. To take this experience a step further, I’m renting the car out for weeks, and then for two months starting in July.
Business models, as we know them, are about to change.
For my third year, I spent yesterday at the Maker Faire, in Silicon Valley. Unlike any other year, the crowds were overflowing, suggesting this movement was growing faster than the cottage industry before. To put this into context, the maker movement is yet (another) disruption to brands, here’s the lineage:
[Disruptions Summarized: 1) The Internet democratized knowledge, 2) Social Media empowered crowd, 3) Collaborative Economy endows crowd to buy once, share many, 4) the Maker Movement aims at buying from brands no more.
I must honestly confess, I struggle to keep abreast of all the new technologies, and I suspect corporations are experiencing the same. It's my full time job, I attend these events on weekends, and we've a company dedicated to tracking and helping companies navigate, and I see the disruptions accelerating. Here's what the maker movement means to corporations and brands:
[The maker movement empowers people to build their own products, and share with each other --rather than buying from brands]
Those involved in the maker movement are creating their own goods and products, using recycled materials, or improving on existing products. Some are selling the goods to each other, some trade, and some simply just use for their own personal usage. They use technology, skill, community, and massive fairs to connect and grow. So what are the disruptions to corporations and brands by the maker movement?
Brands are disrupted by the Maker Movement.
Technology empowers the maker movement. The movement is already connected on digital communication channels, see Make magazine, social networks and online marketplaces like Etsy that enable individual artisans to sell, trade, or buy unique goods. Furthermore, the birth of 3D printing is spurring on a new class of goods created beyond jewelry and toys as furniture or home designs emerge
Several key industries are ripe for disruption. Energy can be disrupted from biomass converter creates energy from leaves, walnut shells, from a variety of solar solutions. Also, consumer goods, industrial goods, toys, media, consumer electronics, can be impacted from 3D printers, a call out section directly below. Additionally, even in dense living, food supply chain be impacted as home gardens and solutions become more available.
The maker movement is accelerating. Having attended a few of these events, I was surprised by the sheer volume of attendees yesterday. As technology becomes mainstay for future generations who are all connected and learning to use technology, our next generation will be more adapt at creating –rather than consuming. In many ways, this is just a swing back to the old village ecosystem where every family had a key skill: smith, baker, cook, and beyond, Yet now, we’re not bound by geographic limitations of knowledge, goods, or materials.
Technology Call Out: 3D Printer Market Accelerating
While there were many technologies feature, I wanted to focus on one area of heat, 3D printers. Previously, Altimeter saw the 3D printer market as fragmented, with the industry not cohesive. While the space is exploding, there are dozens if not hundreds of 3D printers on the market, and an entire expo hall dedicated to them, each with a variety of specs. We expect consolidation as the market matures. Some key findings yesterday:
Investor and my key contact Vivian Wang shared with me that over 90 types of materials can be 3D printed.
Beyond plastics, we witnessed items printed from concrete, salt, metals, and even wood. The wood was sawdust mixed with plastic to create fibers, which result in mostly sustainable product creation.
Digital designs and CAD files are being shared using online networks, with all the associated issues DRM comes with. Some artisans sell designs or create custom.
There were entire playsets printed 3D printers, furniture, stainless steel jewelry, and we saw Autodesk (an enabling brand) being a key sponsor.
3D scanners can reverse engineer products and turn into CAD drawings. This means IP and copyright for company form function will be difficult to control and enforce.
There’s been a cambrian explosion of printers, there are many brands, makes, materials, and it’s not clear they’ve interop or there’s a market leader
Opportunities abound: Brands can leverage the movement.
Mindset change: become an enabler of this movement. I spent time with RadioShack (thanks Cosmin) at the show, who showed they were enabling this movement. They were providing free training for soldering education and hands on work, and also hosted a popup store selling components and controllers like Arduino. In previous years, Google, Yahoo and other tech companies have sponsored booths to enable future creators and engineers.
Build a marketplace that builds new products around you. While I’ll cover this more in depth on my upcoming report on the Collaborative Economy, brands can host a marketplace around them, enabling customers to buy and sell and make their future products on hosted communities. See how Shapeways enables 3d printed jewelery artists to host, sell, and offer products –now, imagine a branded website from your company.
Offer customized products directly to consumers. Rather than become disrupted as consumers purchase 3D printers, instead provide or host them. The future of Target, Walmart, Nordstrom, or Macy’s could be to host a showroom, then print out 3D products in near real time, or for immediate pickup. Imagine retail stores shifting from show and sell to show and make.
On a related but broader context, Altimeter has found four major business themes from the disruption these movements are causing, read about the highlights here, and a formalized report comes soon. Below are some select 6 second vine videos and images which help to illustrate the experience
Above: Combustion cars being converted to electric
Above: Turn biomass (Leaves, wood, in this case, walnut shells) into electricity to power your home
Above: Close up of the 3D printed wood
Above: Intricate 3D printed plastics
Above: Close up of the 3D printed wood
Above: 3D printed stainless steel and bronze jewelry
Above Video: 3D printed Concrete, Salt, Composite and more
Last year’s over hyped skydiving was replaced by down to earth by grounded product enhancements.
We’re live from the Google IO conference in SF with 6,000 developers, press, and media in San Francisco’s Moscone event center. We noticed a lot of Glass Explorer units (which surprisingly was barely mentioned in the keynote) we’ve purchased two to test, and will write up a detailed post on them after we’ve done a thorough test.
Today’s Google’s announcements were a wreck; a series of products flipping in front of you, rather than a well laid out showroom. To make sense of this patchwork set of announcements from a fragmented company, we’ve identified some top level trends:
Key Trends at Google I/O:
Products enhanced and interconnected –no major new products announced.
Google can coordinate across all of your screens, making multi-screen easier showing its ability to tie together all of your experiences across the Google-system.
Ironically, Google did not mention Google Glass. We believe this is because it was overhyped last year, failed to meet production deadlines this year.
Google+ had several enhancements including a new 3 column layout akin to flipboard, deeper content with flippable content cards, Hangout now extended to multiple browsers, Google+ profiles have improved sign on capability–but no adoption numbers were touted in this flailing social network.
Google is virtually replicating planet earth, but “improving” the quality.
Google maps is becoming a *Virtual World*. 3D experience with our uploaded photos. With virtual goggles like Occulus Rift you can walk through this virtual world, experiencing our world in just a few mouse clicks.
The company announced the ability to use more granular location to allow better targeting of mobile users with apps and offers, finally bringing the inherently local capabilities to mobile that we’ve been awaiting.
Retailers and hospitality should take note, Google maps now integrates photos of your stores from the inside. Internal decor matters to the search process.
Google knows what and who you love as we trade convenience for our data.
Google announced that they could identify highlights of top photos in your albums, they were able to identify important photos based on facial recognition of your family, grouping these as important. Google knows who your family is –and what’s important to your heart.
Google is becoming more like a media company, music streaming (Google All Access,) photo editing, magazine-ing of the G+ stream. “Google makes the world better with data.” Google+ becomes like a magazine,
Speech recognition across the desktop and mobile and bringing personal context to all of their services, doing things like making everyone’s view into maps personal, with their important landmarks highlighted.
What it means: An unsaid contract. Google better organizes our world –and sells us back the experience
The big takeaway is Google is trying to let consumers experience as much of your brand before they buy it, for examples a search user can experience the inside of your store, the reviews, the photos and find the fastest way there –before ever leaving their chair. As such, Google or their advertisers, may influence the purchase decision.
In mobile, It’s about the services, not the devices: While leading with mobile products last year to get people into their sandbox. In social the story focused on rich media differentiating the Google+ network and it became clear that social-first products like Hangouts and Google+ sign=in will make a broader play across more Google and non-Google products. , across data and search – whether maps or analytics – Google wants to up the ante in the tools it offers developers and, in turn, the companies and brands they empower.
The Pithy Bottom Lines:
For consumers, if you’ve bought into the Google ecosystem, expect the tools and products to get better but know you’re the product
For brands: If you want to play in Google’s sandbox, you’ll ultimately need to pay.
For Google Competitors: As Google has entered media, any industry is up for grabs; they may be your competitor and just not have announced it yet.
Is Facebook paid, owned or earned? The answer is yes.
Facebook is all. They integrate advertising units along with content created by brands on their Facebook pages, and allow for consumers to share their opinions right in the comments. Sometimes, ads look like social content, and it’s hard to distinguish the difference. At Altimeter, we see this convergence only increasing, and these Venn diagrams will continue to have overlapping circles of paid, owned, and earned.
To meet this converging media types, Altimeter kicked off a research project with Rebecca Lieb (a fantastic speaker in her own right), Jessica Groopman (expert researcher), and yours truly.
We found that companies must now integrate their marketing process, strategy, and tactics so each channel leverages each other. In fact, we’ve identified a few workflows that help marketers, and their agency partners do just that. If you’ve read the report, some of this is a rehash, but I wanted to share the story in the above embedded video of how I like to articulate it while on stage.
So here’s all three components in one location: The report that started it all, videos from a keynote speech to 2,500 marketers at Marketo Summit in SF last month, and all the slides. Wishing you all best in your efforts to converge media.
And yes, turn those phones on when I speak, not off.
Brands Focused on Managing Social Proliferation
For those that like to be where they money be, this data is for you. Altimeter’s research continues to survey buyers of disruptive technologies, and continues our coverage on social technologies. In our recent Q4 survey to enterprise buyers, focused on marketing business decision makers, which are global national corporations with over 1000 employees, we posed a series of questions in our survey battery. In particular, we wanted to find out where decision makers are bullish on investing and found the following trends on marketers with intent to increase spending:
To manage proliferation in enterprise, marketers purchase social media management systems. Altimeter has been covering this software category since March 2010 (see all posts), and has published reports on how companies are managing social using software. These social media management system tools, which allow brands to manage marketing, support, and employee interaction of social continue to spread throughout the enterprise (data). We’ve also seen deal size for this specific market on the increase over the past few years, some deals crossing over the six figure dollar range. We’ve also found that companies are straddled with a number of social accounts (on average, 178 social media accounts) as social strategists struggle to avoid being constantly reactive in a role of social sanitation.
Insufficient tools means investments in education programs key for employee masses. A solution requires a strategy, education, business processes, then with software to facilitate. While most marketers realize that technology is a key method to achieving their goals, they know that education within an enterprise is required for social business success. Marketers invest in educating various business units (departments, regions, and product groups) to ensure they properly know how to use these technologies and avoid risk. Yet, in our previous research, we’ve seen that brands are eager to educate, they don’t put large dollars against this investment. To help corporations solve this need, we’ve launched our own Academy offering, and are working with large brands, agencies, and consulting firms to roll-out.
Surprise! Marketers “volun-told” as system integrators of fragmented software. The opposite of volunteering is being volun-told (credit: Zena Weist). Marketers have been VolunTold that they are unwilling system integrators in the era of VC funded startups who’ve created clones serving similar use cases. As a result, brand side marketers and their agency and consulting partners are investing in integration disparate software together to commonly share data, in order to manage a single customer journey, or obtain data on one persona or customer type. While Oracle, Adobe, Salesforce, IBM, and others offer suites, don’t expect this trend to go away anytime soon, as the proliferation of new web tools means that brands will forever be rushing to catch up.
Summary: Companies seeking to scale social in their enterprise.
So there you have it, today’s buyers are investing their resources and time on scaling social within their organization before it spirals out of control. They’re deploying software, coupled with internal training, and then trying to glue together many pieces into one system. While I’m not going to provide insights to each one of bullets, here are a number of other trends from this data that we can discuss in the comments.
All my life, we’ve had a committed and dedicated relationship. You told me what to buy. I bought it and I bought it again. But now, that’s about to change. I don’t want to buy from you directly. I want to rent, subscribe to, and borrow your goods. If I end up buying your product, I want to use it with others to resell, rent to others, swap or lend.
It’s not you, it’s me.
Our world has changed, and along with it, my preferences. From a more socially responsible mindset, economic pressures are sufficient, and technology makes it for me to find other consumers who can supply the things I need, virtually on demand. Here’s how my behavior chains changing:
I will use AirBnb to find vacation spots, rather than stay at hotels. I will use Uber and Lyft to get around town, rather than hire a traditional taxi. I just put my spare car on RelayRide to rent out to others. For my wife’s birthday, I bought her a subscription to Rent the Runway, rather than buying her a new dress.
At work, we’ve tapped into LiquidSpace to rent office space on demand. I use Taskrabbit to hire folks at the office rather than using traditional staffing models. We’ve bought refurbished laptops for our staff. Most of our software is already on demand.
Because of this, I’m more interested in renting, subscribing to, or borrowing products, rather than buying outright. If I do choose to buy a product, I want to make sure it has great resale value so that I can sell it or rent it to make money.
It also means that the relationship I have with other people matters. Now, I rent my car on RelayRide or sell my used electronics on Gazelle. The trusted relationships I have with other customers matters as much, if not more, than my relationship with you.
I still love you, but in a different way.
If you want to be in a relationship with me, recognize that it’s not going to be exclusive. What happens between us has changed. I need you to change, as I want to rent, borrow, subscribe, co-op, and swap, rather than buy.
Ergo: I just want access to your offerings. I don’t need to own then.
Speaker, Writer, Business Owner, Consumer