Tag: strategy

A New Retail Dynamic

Posted on by Steve Sammartino

Whenever we go on the internet to check out how much something costs, we expect that it could change by the day, the hour or even the minute. Heck, it feels like they put the price up if we dare to look at something twice – especially that flight for a weekend getaway.

We’ve been trained in digital forums to know that prices are in a constant state of flux – dynamic. They vary based on demand (which is now trackable) to maximise the sellers’ profitability. Everything on the internet just moves that bit faster – the programmable nature of the forum creates a naturally turbulent environment we have to navigate, especially when it comes to commerce. While it can be frustrating and annoying, it also creates a sense of anticipation. It makes us act quickly, and come back frequently to see what else might seduce us. We have to make sure we’re not missing out, or that we paid too much.

While prices in the physical world do change, they’ve never been as malleable as they are on the web. Sure, grocery prices to change every week, car yards to have offers every month, and most retailers have sales. But no traditional retailer changes price by the minute, or even by the hour. Maybe it’s time they started.

It’s worth remembering the constraints retail had in a pre-internet world. Changing the prices in a grocery store required weeks of planning, long paper trails, the changing of pricing tickets on shelves, and the printing of physical retail catalogues. Most retailers had similar constraints when it comes to changing prices in stores. It turns out the low frequency of price changes in stores was in reality, a technology limitation. While local retailers could slash the price on a slow selling item with a sharpie, or a fresh fruit retailer could discount a pineapple before it rotted, larger retailers with many stores had a much tougher time changing prices.

But now that many stores have digital pricing displays on shelves, why haven’t they leveraged the possibility for totally dynamic pricing on the shelf? Answer: Legacy Thinking.

The only constraint that now exists is in their minds.

Crazy idea for free

Imagine if retail stores had prices that changed constantly, maybe even by the second. The moment I mention it to people, they think I’m crazy and that this would be ‘unfair’ to consumers. They says it’s something a store just couldn’t do. How could a store just change its prices every other moment? Answer: The exact same way the internet does. How cool would it be to reduce a price dynamically in front of a consumer to entice a purchase as they walk past an item they picked up and put down again – to send out a post on social media on a quiet day and announce a half price sale for just the next 30 mins? Or to announce at a random time on a Saturday the store will have a radical price reduction. Maybe an unexpectedly busy time would require the prices to go up to thin out the crowd in a too busy fast food restaurant?

Sure, there’s massive flaws in this idea, there’d be winners and losers, people complaining and people gaming it to their advantage. But surely it would generate traffic, attention and conversation that harkens a market bazaar of yesteryear where literally anything could happen.

Maybe it’s this kind of crazy that retail needs.

The Technology Wildfire

Posted on by Steve Sammartino

Fire – one of the first technologies we mastered around 230,000 years ago – isn’t much different from our modern day torch light, the smart phone. They both became vital work tools. We hunt with them, they give us access to new types of food, they provide signals and direction, and they facilitate all manner of night time activity which was previously impossible.

It isn’t a stretch to imagine our ancestors walked around with a lit torch in their hands for most of their waking hours. There seems to be an eerie similarity with fire and our lithium ion-powered, handheld digital torches. They both have life-changing power and utility, but unless we learn quickly of their dangers, I fear we’re going to get burnt.

The problem, as I see it, is that we are allowing the technology to control us, instead of us being in charge. We haven’t learned when to put it down, or out, and to let it serve us. It seems at this point we are serving it – and it is the technology companies who power the fire. I was speaking at a conference just last week when a question from the audience was, “Do you think there will be a new technology which will help us put down the technology and get on with a little bit of humanity?’ And this was my answer:

‘We already have that technology – it’s called self-discipline. We can choose to switch off and ‘go dark’ and if it is that our boss, industry or family expects us to be connected at all times, then it might just be a matter of communicating when we won’t be available. Sure, there might be an emergency – but we all know there probably won’t be. Besides we still catch those long flights when emergencies could happen… It’s really just a choice.’

But in all honesty, I do think we need more regulation around digital technology and its use. At the moment technology is spreading like a wildfire which we do not have under control, and the few organizations with the power to bring it under control (our Governments and the big tech companies) are happy to let it burn – even thought it might hollow out important parts of our homes and maybe our civilisations.

Humans have sadly proven again and again that we’ll misuse technology unless guardrails are put in place to protect us, by those who know and care enough about the dangers. It’s easy to forget that workplace health and safety didn’t exist for most of the industrial revolution. We forget that road rules and safety features on cars didn’t just magically appear and that air travel was reserved for crazy risk takers early last century.

We may even be able to convince ourselves that the examples above are vastly different – that this time the technology is just information and can’t possibly harm people the way cars and dangerous machines can. I like to think of it this way: everything physical is informational first. We must first conceive, design and communicate all physical things informationally we make before they come into being. We must also remember that anything technology companies do, happens at scale. They don’t just effect a cohort of buyers or an isolated market.

But it’s not just the technology itself – the size and power of these firms is worth pondering. Consider the fact that the top 5 tech companies (Alphabet / Amazon / Apple / Facebook / Microsoft) now have a collective market capitalisation of $3.7 trillion. That’s more than $1,000 for every person single connected to the internet. It’s also more than 15% of the entire US stock market value which tracks over 3,000 corporations. Every now and again capitalism is put at risk by winner takes all technology. This is why Standard Oil and AT&T were split up into a bunch of smaller firms.

It’s time to tame big tech and regulate – they need to be responsible for anything bad that happens as a result of their products. And if you think regulation is bad for the economy – just remember that next time you board a plane, strap on your seatbelt or have more than one choice of product at a shelf.

The Startup Bubble

Posted on by Steve Sammartino

There are few things any established industrial economy needs more of than new businesses, but I’m here to say that ‘startups’ might not be the answer. Firstly, there are a lot of businesses calling themselves a startups, when in reality, they’re really just new, small businesses. So, what is a startup?

Startup = A new type of business trying to uncover a business model which doesn’t exist yet. Often, they want to leverage a new technology and be a better solution to an existing problem. A startup isn’t just a small business trying to grow with an established method, like say, a café. It’s a new way of doing business in a certain arena.

This definition is why they can attract large sums of speculative investment – the prize of winning can be big.

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The amount of technological innovation is providing scope for many great startups. But business, like anything, isn’t immune to getting caught up in fashion. Yep, business is massively influenced by what is fashionable. If you run a startup – here are a few things that are highly unfashionable at the moment.

  • To be profitable
  • To self-fund
  • To want to remain small or medium-sized
  • To enter an established industry and just do it better
  • To not try and change the world

The Silicon Valley ethic now runs deep – despite the current tech-lash. There’ll be a lot of startups that realise not everyone (in fact, nearly no one) ends up with a unicorn or gets bought out by big tech. And this is where the problem lies. No one wants to simply run a business, make profit and employ people. Everyone wants to change the world instead of their suburb.

Yes, every technology revolution creates new behemoths which redefine commerce, but the probability of being one of these is extremely low. In fact, it’s a really bad bet to even try.  I’m not trying to steal anyone’s dream. I’m trying to do the opposite and actually help you achieve it. Here’s why.

There has simply never been a better time in history to start a small business, be a freelancer and earn a well above average income by staying small and not aiming for all-or-nothing. Never before have we all had such an equal playing field to start anything. Access to knowledge, finance, manufacturing, promotional tools, distribution, logistics, publishing, you name it. It’s all possible for anyone with internet access, imagination and tenacity. We can literally invent money through organising the factors of production in a new manner, and we don’t need a venture capitalist to help us do it.

What every entrepreneur should remember is that when a startup raises capital, they end up with a boss, which is exactly the thing that most entrepreneurs want to leave behind.  If I see another so-called success story of some startup founders standing in front of a brick wall at a co-working space smiling because they just raised $x million in capital I might even scream… it seems to me so many people have forgotten what should be the biggest motivation of all – independence. Isn’t that why people chase money? For the independence it buys?

So here’s the kicker with all this: more entrepreneurs should aim to run business instead of a startup, to actually make a profit and grow organically. A successful business has options, the owner can stay in control, gain financial power and some wisdom along the way. If entrepreneurs do that, then they might have a better chance to scale and actually change more than their suburb.

Thanks for reading, Steve.

The start of the end of the screen – Google Home

Posted on by Steve Sammartino

Why is no one talking about the things that really matter with Google Home? Like how it changes the economy, and how it might have the kind of impact mobile apps did on our web habits. I’ve read a number of articles about the Google Home device being launched in Australia this week. Lots of them discuss the effectiveness of the natural language processing and which apps it works best with. Like this article and this article. None of them seem to cover the issues that really matter on the topic. So here they are.

Ambient Computing: This is a shift away from typing to talking. We are now entering the age of ambient computing. The killer apps on interacting with artificial intelligence have just shifted from eyes and fingers, to mouths and ears. This is the start of a permanent change in the way humans interact with intelligent machines. The shift is as big as the smart phone was. The only difference is that this will take a little longer to establish itself. The reason it will take longer than the smart phone did is that there isn’t a direct substitute for such home devices. The smart phone had the advantage of replacing a tool we all already used – a feature phone. Most of which had a 12-24 month replacement cycle – like items under contracts typically do. Therefore, we can put this device in the Amara’s law category – a bit slower to take hold, but once they do arrive en masse, the impact will be greater than most people suspect.

The smart home killer app: Every new regime in technology requires a centre piece technology to augment and co-ordinate disparate devices. The graphical browser ushered in the era of the World Wide Web. Google home and friends, namely Echo and Homepod are the devices that will usher in the era of the smart home. A home where everything functional, mechanical, and electrical will interact with web. This is where we can expect to move to renewable energy faster than most predict. Currently just under half the energy we consumer in home is wasted. We don’t need more efficient PV Solar panels and larger batteries, what we need is homes that know how to efficiently allocated energy and resources to the devices inside it.

So what does a smart home look like? It’s a place where most everything has computational capacity, it knows everything that’s in it and it efficiently allocates energy and activities based on what it learns. We can expect energy usage in the home to decrease by at least 30% in a truly smart home. When technology makes our homes more efficient, the value equation and ability for renewables to create an off-grid solution increases exponentially. A positive cycle of both demand and supply side efficiency may change how we power our homes ahead of schedule due to the arrival of complimentary technologies. We can expect the centre piece AI to be a party to the dismantling of the coal and fossil fuel industries. Disruption is horizontal – it is usually a juxtaposed technology which changes things unexpectedly.

The end of SEO: Once people start talking to their devices and asking for and expecting verbal responses, being on the homepage of Google becomes irrelevant. There wont be a page at all. In a world of ambient computing, we need be the first recommendation which gets returned audibly. Which means any brand, product or service hoping to be recommended by a search engine needs to be asked for by brand, or be the best in category. Even worse, companies like Amazon and Google might not care what’s most relevant, and instead start recommending what is most profitable. So long as it ‘solves the problem’ of the end user it’s most likely to give them the highest margin option, for them. Remember, Google promises not to be evil – to it’s share holders at least. SEO, will become VPO – Voice Pod Optimization, a game where only a single option is mooted to the end user.

Privacy on steroids: This is the time when we allow multinational corporations with backdoor pipes to governments hear every word in our homes and learn every habit. All of which is permanently recorded. And if you think this only matters for people committing crimes, then never forget that the most extreme externalities are those we can’t plan for, or even predict. If this isn’t enough to convince you to think twice about privacy, this little post might at least open the mind a little. Privacy and secrecy are not the same thing.

Given these changes aren’t in the maybe category, best we start acting on them now.

Why I choose people over profit

Posted on by Steve Sammartino

I’m currently working on a TV  show with some major producers and media stations. I’ve teamed up with someone to make this a reality, and quite frankly the concept is strong – first of it’s kind globally and I know it is going to rock. Put it this way, it’s something the world needs right know a lot more than learning how to cook a soufflé or renovate a bedroom – as much as I love cake and nice houses, I care about peoples futures much more. This show once made, will help everyone who watches it future proof their lives.

During discussions with various people, it has been mooted that they want to do it, but might need to bring in their own people. You can guess the line…. get famous hosts and all the rest.. Which, for this concept isn’t necessary – it’s something different, it’s not not about shiny famous people. I was told at some point in the development process I might have to choose between supporting my team and people, or making the project work. And here’s what I said:

I’m loyal to people, not projects or profits. If that means a project might fall over, that’s fine by me, projects come and go, I value loyalty far more than a project or some profit.

Maybe I’m crazy, maybe I’ve missed out in the past by having this philosophy?

But here’s what I know, if the project is strong enough, we’ll find people who’ll work with us and our chosen team. In any case, the project has more chance of succeeding when the team is pumped, keen to work together and put their hearts in it because they believe in each other.

Only once we look after each other, is there ever enough to share around.

– – –

Join me in Melbourne on June 20th and get your mind around ‘The Lessons School Forgot’. 

I’ll be doing a talk on how to hack your way to a radical future, and answer all the questions you might have about finding a path to independence. It’s going to be a great night.

Click here to reserve your Free seat. 

See you then, Steve. 

This year the internet arrives in Australia

Posted on by Steve Sammartino

We don’t really have the internet in Australia. I mean, sure we are connected to it, but we aren’t even in the top 50 countries for internet speeds. That’s a total travesty for our economic future. Some of the countries with faster internet include Kenya, Lithuania, Slovenia, Moldova and many developing economies. This is the modern day equivalent of having unpaved roads, no electricity or running water. Outside of the three S’s – Search, Social & Streaming, we barely have web services which can turn industries upside down. But some of that is about to change.

Later this year Amazon arrive in Australia and with their cheap capital (free shareholder money they don’t pay dividends on) and serious intent to dominate this new market. We will finally get, at least one part of the internet, other markets have had for years. If you think you’ve seen disruption to industry in Australia, buckle your seat belt, because we are about to see what they other half of the world already have.  We’ll get to know not only what same day delivery feels like, but 2 hour delivery. We’ll get to know how great it feels for that delivery to be free and we’ll get to pay prices which will make our local retailers seem like robber barrens. It will change our consumer and business landscape because it will be an example of possibility.

I was a guest of the award winning podcast Future Sandwich episode aptly titled, Surviving Amazon. Have a listen here, or wherever you get your podcasts.

Also be sure to check my media page for weekly interviews I’m doing on Tv & radio on all things future.

Don’t forget to join me for to celebrate my new book launch The Lessons School Forgot, on June 20th. Free tickets here, see you there! Steve.

Why we need to start before we finish

Posted on by Steve Sammartino

There’s something interesting entrepreneurs and technologists can take from rock bands. When playing live of stage and someone in the band makes a mistake, they don’t stop, they just keep on playing. When rehearsing, it’s important to play the song right through to the end, regardless of mistakes. The only way to practice, is to do it as if you’re on stage. The only way to get good on stage, is to have the courage to get on it before you are ready. The only way to get good on stage is to improve on stage, not in the backyard, rehearsal room or garage. Successful bands take gigs where no one might show up and they all start with exactly zero fans. In other words, we need to start before we are finished. We finish the work live, in market. In fact, the work never finishes, but it only really starts when once we have shipped a product.

The band Guns n Roses has a great story about their most famous song Sweet Child o’ Mine. They had the riff and the first part of the song down, it was sounding good and then they got to a part of the song for which there was no other music written, and no lyrics either. The it happened – Axle started singing:

‘Where do we go – Where do we go…. Oh, Where do we go now?’

He was literally talking to the band, saying geez, what’s next for this song. And through the process of doing, and making and asking, the solution was inside the question itself. That moment became the bridge, the missing part of the song. It worked with the other lyrics without him realizing it at first and lead its way nicely into what I think is the best guitar solo of all time. But of course, unless they started playing it before it was complete, it might never have been finished.

The startups we found, the technology we invent, and our own futures are a lot like that. Searching for perfection instead of progress is what stops us most. Some times all we really need to do is start, and believe that we’ll find the path of ‘where we go next’ once we start moving.

If you’re wondering where to go next, come join me in Melbourne on June 20th for my book launch of  ‘The Lessons School Forgot’. l’ll be doing a talk on the future, and answer all the questions you might have. It’s going to be a great night.

Click here to reserve your Free seat. 

See you then, Steve.