Tag: future

Trickery as a Business Model – Rental Cars

Posted on by Steve Sammartino

Customer service systems have improved so much in the past 20 years that we take for granted how arduous some things used to be. I was reminded yesterday when I had to pick up a hire car that not every industry has embraced the possible. Why? To maximise profit while the barriers to entry are still high. It made me wonder if one car rental brand is called Hertz on purpose!

The picture above is the line I was waiting in. It inspired this spur of the moment LinkedIn post which really seems to really have struck a nerve. Here’s what I posted below:

Dear Rental Car Industry: this is a queue from today. Most brands have it at the airport today & often. The problem isn’t a busy day, it’s that your rental process is stuck in 1989. We waited nearly an hour! I don’t buy for 1 second that this process couldn’t be all digital and all automated. A simple text with my car rego and bay number is all we need. Condition reports can be pics on drive out, insurance, copies of driver licenses and credit card details all can and should be automated. Let’s call it ‘sub-optimal’ – I could redesign this in a day & fix this in 2 weeks.

As I write this the post has had 73,157 views, had 978 reactions and 196 comments.

The comments on the LinkedIn post provided some deep insight into industry disruption, technology and CX. But more importantly, it was filled with many customer centric fixes, and startups in the process of doing so.

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The story doesn’t end there.

Once I finally got to the check-in counter, I was then asked if I wanted insurance, and that the excess for not choosing insurance was $5000. Seriously? I felt extorted. The risk of not taking the insurance seemed far too high not to proceed. The crazy bit is that it added more than $200 to my final rental price for a few days, which almost doubled what I had paid for when I booked it online. What is clear is that this isn’t offered at the time of booking online because it exposes the ‘real price’ during the booking process, when switching to an alternative is easier. It also seems as if the ‘analogue’ pick-up process is designed on purpose to perform this upsell to customers. (Oh, and I’m being generous with the term upsell).  The car I ended up getting wasn’t the one I ordered, either. It was in the same size class, and I am aware that the offer is ‘Car XYZ or similar’ when booked. This presents a major problem. I ordered our specific car on purpose because I know it fits our luggage and my surfboard. The one I got didn’t. I’m struggling to understand why any car rental firm wouldn’t have the exact same model of each car in each size category. Surely that wouldn’t not only reduce purchase price via negotiating power, but reduce also operating costs. Not to mention, customers would actually know what they are getting. Maybe it’s just a little bit too much commonsense here from the Sammatron? Other times I’ve even been ‘upgraded’ to larger cars, which isn’t really an upgrade in cities overseas where I want a small car on purpose because the streets are small and I’m unfamiliar with the roads. It does seem that this industry is entirely built on serving itself and its existing infrastructure instead of its customers.

The problem as I see it isn’t really the prices. It’s the process, lack of respect and lack of dignity they afford their customers. It’s the fact that it could provide a much better experience.

While some premium memberships and other firms and startups in this space offer a superior digital check-in process, it seems that a poor experience is most common. To the credit of Avis, their AP Commercial Director did reach out to discuss the issue and improvement plans. (I’ll update you on that in due course.)

Why do they get away with it?

As far as I can tell – this business has far more barriers to entry than taxis did. Firstly, a fleet of cars is required, and retail and parking space in airports comes at a super premium. This alone would keep out most players wanting to disrupt the space. Also, given that any alternative couldn’t be a pure SaaS play, most Venture Capitalists would shy away from funding a new disruptor. But buckle your seat belt, some big players are coming.

What’s coming soon

New competitors are about to arrive and it is not Uber, Lift, Didi, Hola, GoGet or new car rental startups. It’s the OEM Car Manufacturers themselves. As soon as autonomy arrives, and it is coming quicker than you think, they won’t just sell cars, they’ll be renting them too. By the trip, by the hour, the day and the month via subscriptions. Lucky for them, consumers have already been trained through ride sharing companies’ hard work.

Once cars can drive themselves, the car manufacturers can avoid the need for a retail space and a car park in an airport and simply summon a car to the kerbside of the airport to rent out. In fact, car manufacturers can do all sorts of interesting things like provide free rental to existing new car purchasers and sell cars via monthly subscriptions which are ‘location agnostic’. This is all with a massive pricing advantage given they won’t have to buy cars from third parties like rental incumbents do.

The Lesson? 

The lesson is simple, really. It’s very easy to assume that as soon as better technology becomes available, large corporations will adopt it. The opposite is most often the case. They tend to lag behind the potential of technology and customer expectations as long as possible. Especially when the barriers to entry are high. It’s also a good reminder that opportunities to improve an industry are everywhere and not dependent on new tech. They are mostly about lazy incumbents taking advantage of a glitch as long as they possibly can.

Zero External Energy Buildings

Posted on by Steve Sammartino

Our buildings are a great reflection of where we’re at technologically. Once a revolution is truly mainstream, we see it in our homes. In the past century, we’e added electricity, indoor plumbing, white goods, entertainment devices, and even computational power and AI. But we are about to do something so different, it might require new language to describe it.

Zero External Energy (ZEE) Buildings

In the near future, buildings will be rated not just on their efficiency, but on their energy generation-to-usage ratio. But this will be for the entire building and essentially, an input/output measure. As the cost of going off-grid with solar panels and battery storage plummets, fossil fuels’ days are numbered. Once most houses are powered by renewables, a new measurement will occur. We’ll want to know how much external energy the building uses. We will enter the world of the ZEE building.

A Zero External Energy building is one that generates all the energy it needs to sustain itself entirely – 24 hours a day, 365 days a year. Most will be via solar, but some buildings will employ wind, geothermal and other emerging renewables like artificial photosynthesis. Expect to hear someone say, ‘My new house is fully ZEE’ within 10 years. In this world, walls and surfaces of a building will have a purpose beyond keeping the weather out. Every inch of the roof will capture energy and so will our windows. An amazing Australian company called ClearVue already produces solar panel windows as seen below:

ZEE buildings will:

  • not have an energy-based carbon footprint
  • have enough energy to charge electric cars
  • eventually produce more energy than they need.

So, what do we do with all that extra energy? We’ll trade it.

Enter the Energy Internet

No, we won’t trade this energy with power companies. Instead, we’ll trade it with each other across an energy network, as the grid becomes decentralised, looking and behaving a lot like the internet. It’s often referred to as the Energy Internet. Just like we produce content that we trade with each other over the communications internet, we’ll trade the excess energy our buildings produce with other services, markets or places who need it when we have an excess. But in the long run, the exponential improvement in energy capture will lead to buildings using this energy to grow food.

A New Kind of Calorie Count

Many spaces in buildings will be deployed to grow food with new types of urban agriculture. These will be managed by AI and robotics so we don’t need to attend to them with human labour. Green buildings will have a yield which isn’t a return on investment from tenants – but food grown on walls, top floors and even in car parks.

As cars become autonomous, many car parking spaces will be converted into urban agriculture – even car spaces which are underground. Remember, we don’t necessarily need sun – we just need light, energy and water which we will have an abundance of. Once this happens we’ll also start valuing buildings based on how many calories they produce each year. “I live in an 180 million calorie house – it can feed a family of four.”

While this might sound weird – compare how weird it would have been to own a refrigerator just 200 years ago, let alone an energy rating for it. For this and ideas like it to happen, we have to start thinking sideways. We have to look for ways to apply technology it was not designed for. When we start cross-fertilising tech ideas like this (and yes, that pun was totally intended), then we can take giant leaps towards solving our biggest ecological challenges.

You’re the Movie Star Now

Posted on by Steve Sammartino

If you think our self-obsessed society couldn’t get any more obsessed with our self image, then hold on tight. We’re about turn this gig up to eleven. While we rarely admit it, everyone’s favourite topic is themselves. Now, if you could imagine for a moment what celebrity culture mashed up with self-obsession might look like, then you’ve taken a sneak peak at what’s next – Everyday Movie Stars.

No, I’m not talking about low-quality, bottom-feeding, Reality TV melodrama. I’m talking about Big Budget Films From Hollywood starring you. The GIF above is from a face-swapping app coming out of China call ZAO. This app utilises deep fake technology to allow anyone to impose their face onto any video – including those with celebrities. Mind you, this is a ‘free’ (for the price of your personal data) app on a smart phone – and it’s quite impressive. Now, imagine what could be done a couple of years from now with improved AI, deep fake algorithmic improvement and even better camera technology. It isn’t hard to see where this is going. You, me and everyone else will be able to slot ourselves into any movie we please. We’ll sit down on a Friday night with our popcorn to watch ourselves in an Oscar-winning performance on Netflix with no noticeable difference. That’s next level narcissism, but I promise you it will happen within the decade.

In the first instance, we’ll probably have to go to the cinema and watch ourselves through augmented glasses and pay a premium for the privilege. With enough imagination, disruptive technology like this always represents new revenue opportunities. Technology has a way of democratising everything – and it’s about to democratise starring in high-budget Hollywood movies. But every shift in tech has losers too. It makes me wonder whether the stars of Hollywood will have to step aside as Joe and Jane Average are patched in via AI. Don’t worry Leo, I think it’s pretty safe to say most people would rather star with you, than replace you. Besides, who we are ‘in the movie’ with is just as important as how good it is.

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Bonus content:

Short video interviews featuring me discussing:

 

Giving Birth to Digital Twins

Posted on by Steve Sammartino

Imagine trying to repair a car that’s in Sydney – when you’re in Melbourne. Or, worse still repairing a spaceship from earth when it’s 400,000 km away on the dark side of the moon. This is the problem NASA faced 50 years ago with Apollo 13. They fixed it way back then with ‘Mirror Systems’ of the craft they had on earth. In doing so, they unwittingly gave birth to The Digital Twin.

Digital twins will be one of the most important economic technologies of the coming decade.  They’ll affect every single industry and in the long run, the technology will become part of our personal lives too.

Put simply, a digital twin is a virtual replica of any physical thing or process. While the concept is not new, only recently has the implementation been possible and economical, through the emergence of the Internet of Things and advancements in AR and VR . This pairing of the virtual and physical worlds allows analysis of data and monitoring of systems to head off problems before they even occur, prevent downtime, develop new opportunities and even plan for the future by using simulations. But it gets even better than that.

Imagine a large industrial machine for which a digital twin has been developed. Via the twin, anything that goes wrong with physical version will immediately translate back to the virtual version. If any repairs, maintenance or changes are made  to the physical version – the digital twin automatically gets updated. Likewise, eventually we’ll be able to change the physical version without actually touching it – it will all be done via the digital twin. Stop – think about your industry and just imagine the possibilities…they’re almost endless. Shelves in stores, warehouses transport systems, machinery, factories, buildings, supply chains, rail, aviation and eventually, even you.

Yes, you’ll eventually have a digital twin. Advanced cameras, sensors, ultrasound and in-home MRI systems will be inside our smart homes, married up with self quantifying wearables and in body nano-sensors. These will create a a live digital twin of our body which will monitor our well being and know we’re sick long before symptoms arrive, enabling better management of our health and increase longevity of our most important asset – ourselves. It’s gonna get radical. It’s another reason privacy really matters now, while it’s still just sharing photos of coffee!

We can expect every industry over the next decade to start building out the digital twins of everything they own, make, sell do and manage. Every company worth its salt needs to be developing a digital twins – and those who get really good at it – can end up potentially controlling a platform and maybe even being a supplier to their competitors.

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If you haven’t already – please check out the latest Future Sandwich Podcast on the Future of Fashion – it’s rad.

Smart Contact Lenses & the Future of Sport

Posted on by Steve Sammartino

People seem to be in perpetual fear that technology will take away all the jobs. The bit they always miss is that for every job tech takes away, it invents two. The classic examples of technology inventing new work and new industries are in sport and entertainment. Given it is Football Grand Final week here in Australia – let’s explore where football viewing is heading next.

In the future, watching football, or any sport, will be a much better experience than it is today. Firstly, we’ll have an augmented reality layer on the screen. Not only will you be able to turn on live stats of your favourite players or teams, you’ll also be able to turn them off too. Camera angles won’t dictated by the broadcaster – they’ll be chosen by the viewer via the broadcaster. There will be cameras literally everywhere. There will be super-speed high-definition recording on the goal posts, on the ground and even from the ball so you can watch it sail through the goalposts. You get to choose which replays to watch and when – it will be total director control from the comfort of your sofa. But if you want to get more involved in the game, here is where it gets really cool.

Utilising the latest technology in ‘smart reality contact lenses’, you’ll be able to get the players’ view of the game live while the game is in progress. Log in before the game and you can immerse yourself in exactly how Dusty Martin, Christiano Rinaldo or Russell Wilson experience it – watching the match from their eyes. Of course, you’ll pay for the privilege. It’ll also make sense for players to market themselves to be exciting enough for viewers to log onto, as they’ll be paid per fan log in. But if that’s not close quite enough – then don’t forget to don your football haptic suit. It’s a suit you can wear while watching the game which allows the wearer to to feel in real time the bumps and tussles the players feel on the field. The suit will raise your temperature to match the players’, give you the same palpitations as their heart beats and hear their on-field verbal communications. How is this be possible? These haptic suits can link to players’ uniforms which will be threaded with tiny electronic components to send real-time data across the web using IoT technology. The experience of sport and entertainment in the future will be so real it can almost get dangerous.

But if you think about it – this is the trajectory we’ve been on for a long time. We go from hearing about a football match on radio, to watching a replayed match on a black and white screen, to live HD with slow motion and stats to actually becoming the players. Technology always brings us closer to something far away and allows us to experiences things we otherwise wouldn’t. The opportunities for innovations like this is sport and all forms of entertainment are really limitless.

These possibilities will create jobs, revenue and companies which are yet to exist. The unbelievable part is the technologies already exist to make it happen. My only question is – what are you waiting for?

Ideas need to evolve

Posted on by Steve Sammartino

Everything in the modern world started as an idea. If it isn’t provided by nature, then at some point it was just an idea. The problem with ideas however, is that once we have a good one, we often forget that we need to build on them. Ideas are a continuum, not an event.

The game of basketball was invented in 1891 by James Naismith in the USA to provide a lower impact sport than Football. It isn’t too dissimilar from what we observe today. A quirky fact, is that in its first iteration fruit baskets where used to catch the ball. Seems like a pretty cool idea to get the first few games underway. But here’s what’s astounding. It wasn’t until 21 years after they started playing that they cut a hole in the baskets so the ball would drop to the floor. And yep, you guessed it, they used to use a ladder to get the balls out. For 21 long years!

There’s lots more of examples just like it: The can opener came 48 years after canned food. Wheels on suitcases weren’t common place until 50 years after the start of air travel. It makes you wonder how many crappy things could be fixed if we just took the original idea that little bit further.

Likewise some ideas become outdated – their time is up and we all move on. This is where we need to be careful. We need to make sure we don’t end up in an industry, or job which ‘as an idea’ is becoming outdated. When ideas become outdated, industries die and careers can too.

At some point we all need to find new ideas, and sometimes we even need to find new towns – especially if the one we are living in is based on an old, outdated industrial idea. Entire towns have been built around the ideas of yesteryear. This time however, we’ve all been given the dignity of choice – we can reinvent ourselves, and even our towns if we choose to. The digital world knows no geography. The biggest challenge with this idea though, is getting people to really believe it.

Maybe we need a big idea. Or just maybe, all we need is a small change, to just cut a hole in the basket and see where our ball lands.

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You’re a true team #Sammatron person coz you read this far and I totally dig it. You know what I’d love? If you checked out the Latest Webisode of Future Sandwich on Digital Twins – our best yet. Heck why not leave a comment and subscribe on Youtube? Thanks.

Never grow your vegetables in someone else’s garden

Posted on by Steve Sammartino

In an attention economy it is a compelling offer for a website to offer access to an audience of 2.4 billion people (Facebook) or promise that 90% of all internet searches start with you (Google). It would seem as though the only rational choice would be to do business on their platform.

It’s here that the most important business lesson my father taught me comes to mind:

Never grow your vegetables in someones else’s garden.

The advice is exactly as it sounds. Make sure your own and control where you build your assets and revenue streams. If you don’t there is always the risk that the landlord will change the rules without notice and pull up your roots.

In the digital platform economy most people and companies are growing their veggies in other peoples gardens. While it is very clear there’s an upside to this strategy; speed, simplicity, scale. But the downside is obvious and almost always comes to bear. Eventually the platform landlords increase the rent, or kick you out – but only after you’ve tended their garden, or renovated their house.

The weird thing about this, is that it keeps on happening and people and businesses keep on falling for same trick. Let’s go through a little bit of internet platform history to remind ourselves of the downside and even help us with our Future Proof Platform Strategy Development.

The Likes Deceit:

Marky Zuck said; “Yo, brands out there, generate ‘Likes‘ for your brand on our platform, and you’ll be able to have constant contact with the consumers and fans of your brand. Whenever you post an update, they’ll see it, and you’ll have a direct connection.” Then after brands spent many millions of dollars building a brand following on Facebook young Marky changed his mind. He said “Yeah, about that – well, I’ve changed my mind, and now to reach those same people you invested in my ‘Platform’ to connect with – you need to pay me again – to advertise to them. They are no longer going to see your updates in their news feed.”

Boom – just like that – he pulled up their roots.

The Google Page Rank:

Sergey & Larry said; ‘Yo, businesses out there, we are different to Yahoo and other searches engines (there used to be many). We’re all about helping people find exactly what they are after and sending them immediately to you – We are not a portal like Yahoo. Get on board. Then every website in the world optimised for Google. Then Google became so good at everything and so big, they changed their mind. Google is rapidly becoming a portal where they scrape their suppliers information and keep customers in the Google ecosystem – increasingly they don’t send people who search anywhere. They satisfy their needs right on the Google homepage. Just check out the first listing for my searches today for the Snow reports, Weather reports, The AFL ladder and even Flights.

Sorry about that Snow & Weather Channels…

Thanks for the stats AFL…

Introducing the Google travel agency…

Instagram influencers lose their ‘influence‘:

The latest change to remove the likes count on Instagram has hurt so called influences who get paid on this metric. While facebook have claimed that this shift is to improve users well being and remove the stress of expressing themselves, I can’t help but think they don’t want the leakage of advertising revenue going directly to their users instead of the mothership. I wouldn’t be surprised if they launch an Instagram Influencers dashboard with metrics in the back end to control the money flows in the Influencer economy.

So, it seems the only thing we learn from business history, is that few people learn from business history. Just this week Australian TV news channels joined up with the Facebook platform to get their news to a wider audience. This too won’t end well for those providing the content. Contrary to what many people believe, content is not king. Distribution is more powerful than content – always has been, always will be.

How to manage the Platform Predicament?

So, do I practice what I preach? Yes. The most important piece in the Steve Sammartino portfolio is my own webpage and this blog. I own and control it. Around 5000 people read it each week – not a huge amount, but it’s enough to serve my personal business model.

Of course I use other peoples channels; Linkedin, Youtube, Twitter and Instagram – but my primary goal in using them isn’t to grow a business inside it, but rather to grow some seedlings which I’ll transfer into my own garden.

My advice here is simple. Always spread your platform and digital risk. Ensure you take a portfolio approach and invest in your own channels that you control. Always remember that incentives shape commercial behaviour and we should ensure we remember this for our own purposes too.

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Be sure to check out the Latest Ep. of Future Sandwich Now-Soon-Later – we talk about how in the future you won’t own anything – 4 mins of goodness & insight click here. I’d love if you made a comment on Youtube as well.

Cheers, Steve.