The last 10 steps

In the week before Christmas, houses around the world are inundated with ‘Sorry we missed you’ delivery notes from couriers. So if you’re wondering why on-line retail still only represents 10% of sales in the USA and around 6.9% in Australia, it’s because the real problem isn’t the last mile, it’s the last 10 steps.

What is the last 10 steps? I’m defining it as the space between where the delivery van stops out front of the final destination, to getting the package inside. It’s estimated that more than 20% of deliveries do not get made on the first attempt. This comes at a massive cost to couriers, and ultimately us. And this is before we consider the horror of having to go into a post office pick up the package. Which is much worse than shopping –  so annoying.

While we have access to most everything via ecommerce these days, our houses need an upgrade to cope. Yep, our houses have been upgraded many times as new technologies arrived. We’ve added electricity, indoor plumbing, automated heating, and even driveways are a little over 100 years ago. Unfortunately our letter boxes haven’t had an upgrade in about 250 years – and we need one. The early attempts to solve this problem are lets just say, sub-optimal. Giving Amazon a key for couriers to unlock my door? No thanks. A  locker outside a petrol station brought to you by postal services around the world? Hmm, that seems like a company not trying very hard. Quite frankly I can’t believe a Mac Daddy Delivery Box hasn’t entered the home market yet.

So what would one of these puppies look like? Here’s the Sammatron version of the Mac Daddy Delivery Box to avoid our Christmas ecommerce woes in 2019:

The Mac Daddy Delivery Box – Some of the features I’d put into it:

  • It would have 3 sections: Dry, Fridge and Frozen – so it could take all deliveries.
  • It would probably be a as big as a fridge.
  • It would be underground and have a button for the courier to press and it rises up on demand to take the delivery.
  • When a delivery arrives the owner would get a call and see live video footage of who is delivering the item and potentially check their ID.
  • The delivery unit would only open via the owners smart phone.
  • It would have near field communication readers (RFID) and image recognition cameras to detect the delivery is correct and as ordered.
  • All data of deliveries would be owned by the person who owns the MDDB (Mac Daddy Delivery Box) so they could sell that information to companies if they choose, for their own profit.
  • The MDDB would aggregate data and give reports of who, what and when back to the owner to track their spending.
  • It would be secure like a safe, so that items of high value could be delivered safely.
  • It would be electric, and solar powered.
  • It would make your friends envious and totally want one.
  • Optional Extra: two small palm trees above the underground delivery unit – so that when a delivery arrives it looks like the Thunderbirds secret cave coming out of the ground!

This type of delivery unit seems inevitable to me. It’s not if, but who and when. And if it isn’t done by mid 2019, then I’ll do it myself in my House of the Future project. Until then, you might just choose a glitter bomb to entertain you in the interim.

 

🎄Have a great Christmas, Steve. 

 

The Age of Digital Colonialism

For the first time in Australia’s history, we no longer own or control all of our critical infrastructure. And to that list we can add any country which isn’t the USA or China. Welcome to the age of digital colonialism.

Show me a rich country and I will show you a rich infrastructure. For anyone who has travelled to a less developed economy, we see it right in front of our eyes. Electrical wires scrambled like spaghetti linking up houses. Water only the locals will dare to drink. Roads that scare the most adventurous driver. Hospitals that make you want a helicopter lift out after an accident and education which isn’t a right, but a bonus for the fortunate few. The simple and clear difference between wealthy and poor countries is their infrastructure. It’s the platform which invents the economic possibilities of its people.

It’s easy to forget that wealthy countries didn’t just click their fingers and get their wonderful infrastructure. They had to invest billions of dollars over decades and centuries. When new technology arrived they had to embrace it, and very often build out the projects using government funds in large capital works, and at times, even take over private firms who got too powerful (antitrust). This is only ever possible in a moderate democracy. A country governed by people with its constituents’ best long-term interests at heart. It’s very difficult indeed to build the physical structure required for a wealthy economy in a corrupt state.

The infrastructure we so often take for granted is what businesses and the populace have danced on top of for the past 200 years. And in this time we’ve also had the greatest ascendancy in living standards in human history.

But now in this digital age we are building a new form of infrastructure. I like to call it the metastructure.

Metastructure: The data and algorithms which now preside over how we organise people, infrastructure and physical assets in the post-industrial era.

Some ‘non-exhaustive’ inclusions would be:

  • Search and Artificial Intelligence (Google is really just an AI engine)
  • Social Media – tools of connection with the general population.
  • Transport and logistics organisation platforms
  • Large data centres

China and the USA are the only countries that we know of on the globe who are building these pieces of metastructure at a Nation State Scale. In fact, they are going well beyond their own boundaries and are now deeply ensconced in a period of Digital Colonialism. Every other country it would seem is now renting their metastructure from the new overlords.

The funny thing is that we can’t really blame anyone or any Government for being complacent. This happened a lot faster than anyone expected, and unlike other infrastructure – it doesn’t reside in the country in physical form. The nature of data is that it doesn’t need a passport to enter a country and can colonise a market by stealth – a little like a virus would.

Its easy to say here – how is this any different to Coca-Cola becoming a global corporation or General Motors selling their cars around in every market the world over? The difference is simple. These things can’t swing an election, lead to ethnic cleansing or influence how your population thinks, feels or acts 200 times a day – but the metastructure can.

I think the smartest country in the world right now is China. They had the presence of mind to remove Google, Facebook (and their digital business units) from operating in their country so they could build out their own versions of them. They also understand that the new arms race is in Artificial Intelligence – rather than explosive fire power which defined the 20th century military industrial complex.

Any country that wants to maintain its sovereignty in the coming decades needs to invest heavily in the Structural Digital tools which will define the next 50 years. Not owning or controlling your own infrastructure can only every mean you’ll be subservient to those who provide it.

 

Content & distribution always beats resolution

This week Australian pay Tv operator Foxtel announced the launch of its IQ4 box. The key selling feature is that it enables 4K resolution of content like sports, documentaries and concerts. An interesting move considering all those around them are growing not based on ‘resolution’, but different business models. The numbers for subscription TV services are already telling this tale with Netflix already well ahead and growing, while Foxtel declines.

Number of Australian subscribers at August 2018 (and % change vs last year):

  • Netflix 9.8m (+30%)
  • Foxtel 5.4m (-3%)
  • Stan 2.0m (+40%)
  • Youtube Premium 1.0m (+40%)
  • Fetch 700k (+40%)
  • Amazon Prime Video 300k (+90%)

When was the last time ‘high resolution’ was the deciding factor to subscribe to any content platform? I can’t remember anyone ever saying;

‘You know, I’d totally sign up to Amazon Prime or Netflix if I could watch it at 4K’.

At best, resolution is a hygiene factor – hardly a reason to buy or switch when it comes to content. Are our eyes really that special?

What is clear though is that there is now a 2 speed economy when it comes to content. It needs to be either all-you-can-eat for one low price (streaming services) or a la carte (such as Apple tv). The mash-up package model is clearly broken.

The overriding point is simple – all screens are now created equal. People care less about how shiny the content looks and more about availability, simplicity and price. This is why iMax theatres are still niche at best. And sport won’t save Foxtel either, as we can expect these two things to happen:

  1. Tech firms like Amazon and Facebook to start hoovering up rights to major global sporting properties. FB already has rights to Major League baseball, La Liga Football in Spain and the World Surf League, to name a few.
  2. Sporting organizations will very soon realise they don’t even need a media partner – they can sell their own advertising and subscriptions directly for more than their broadcast rights deals generate.

While Foxtel have moved a towards streaming, it seems that they still love their historic infrastructure more than the truth of where the market is headed.

When it comes to business strategy in any realm, it pays to be agnostic about the tools and to remember what our audience are really buying.

This year the internet arrives in Australia

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.

A simple Amazon strategy every business can implement

Jeff Bezos Genius

The future is a pesky little thing to predict. Much of it will surprise us no matter how well versed we are in emerging technology. A lot will change 10 years from now in ways we just couldn’t imagine. But, some things won’t change, and it is easy to know what these things are. So much so that this is a key question Amazon leader Jeff Bezos bases large parts of business strategy on:

“What’s not going to change in the next 10 years?…. You can build a business strategy around the things that are stable in time…. In our retail business, we know that our customers want low prices, and I know that’s going to be true 10 years from now. They want fast delivery; they want a vast selection. It’s impossible to imagine a future 10 years from now where a customer comes up and says; ‘Jeff, I love Amazon; I just wish the prices were a little higher’ [or] ‘I love Amazon; I just wish you’d deliver a little more slowly.’ Impossible.”

And it is clear to see that while they use technology to make these things possible, the future is predictable and something Amazon or any business can build their strategy and infrastructure around. Jeff said this 4 years ago at the Amazon Web Services forum. With 40% of that 10 year window expired, and I’d say it’s all still true. Seems he has predicted the future, just by flipping the question.

So the only question remaining for your business or startup is this: What things can you be working on that just won’t change?

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The deception of history

Reading about Craigs list the other day I started thinking about business history and strategy. As entrepreneurs we often get fooled by the deception of history. And it’s easy to see why. All the business books and articles we read on success are based on what someone or some company we respect did. The problem with this is that the world lives in a state of flux, and what worked then, most certainly wont work now. This is where the Craig’s list example comes to the fore.

Craigslist Head office

Would a 3 color page of hyperlinks which looks like the internet did in 1994 work today? Highly unlikely. Craigslist works now, because it worked well then. It had things working in it’s favour like the ‘in crowd’ in the Bay area spreading the word. That it was first to market with an on-line classified. Now these legacy issues become a strategic proposition which is worth maintaining. What it doesn’t mean is that it’s a strategic template worth copying for Startup X. It’s also less likely we’ll get the support needed from the web community or the investors needed.

The same can be said for pretty much any startup with an interesting history.

A social networking site which is set up for alumni of an Ivy League University probably wouldn’t work.

A trading website where auctions are used to develop the perfect market place probably wouldn’t work.

An on-line retailer which aims to sell every book available in the world probably wouldn’t work.

As entrepreneurs, what we are better off understanding is the insights into why things worked, and try and leverage human behavior in developing a strategic direction to launch our business.

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