Cornelius Vanderbilt and Andrew Carnegie. Henry Ford and Alfred Sloan. David Ogilvy and Leo Burnett. These men, each in their own way, heralded a new age and recreated society in their image.
In fact, they so personified their era it’s difficult to separate them from it. Vanderbilt and Carnegie brought us the age of corporations; Ford and Sloan, mass production; Ogilvy and Burnett, mass marketing. After them, the world was never quite the same.
Their enormous success drove and was driven by a transformation in the fabric of society by technologies like the steam engine, the automobile and television. We are now going through a transition which is perhaps even more profound – that of atoms to bits – which is already proving to be even more disruptive and is changing how businesses compete.
Everybody was surprised by Facebook’s acquisition of Instagram, apparently, even Facebook. Merely one week before Instagram closed a round of funding that valued them at $500 billion (and diluted their shares), so it’s clear that they were not in serious talks by that point.
Why would Mark Zuckerberg drop $1 billion on a company less than two years old with no revenues to speak of and no apparent business model?
There has been an avalanche of pundits giving all sorts of reasons why the deal makes perfect sense: The user base, a foothold in mobile, their technology, development team, etc, yet I haven’t found any of those explanations comelling. I think they bought Instagram because they were scared of the singularity and with good cause.
Einstein was a low-level clerk when he dreamed up relativity. Mendel was a monk when he discovered genetics. The structure of DNA was cracked not by the acclaimed minds of the day, but by two young, underachieving post-grads working in relative obscurity.
Breakthrough innovations tend to pop up in funny places. Some like penicillin and teflon were accidents. Others, like the Internet, world wide web and the graphical user interface, originated in big labs, but flourished elsewhere.
What do we make of that? Why do really big ideas tend to come from small places? How do we push our organizations to innovate when it seems like organization itself often squelches innovation? The answer lies, strangely enough, not so much in organizational structure, but in organizational purpose, outlook and philosophy.
“Build a better mousetrap and the world will beat a path to your door.” That notion inspired generations of tinkerers, innovators and entrepreneurs.
Of course, then some whip-smart MBA got hold of it and it became “build a proprietary supply chain and a captive distribution channel and you can earn superior returns on your cost of capital.” Scale, rather than inspiration, became the path to competitive advantage.
As digital technology pervades the physical world, the principles of scale are changing in a profound way. Ordinary people armed with smartphones are becoming hackers, co-creating their experiences with marketers. Products themselves are becoming services. Supply chains are giving way to demand chains. Marketing has changed forever.
A business that doesn’t make money won’t be around for very long. Profits, after all, are the engine that drives the world of commerce. Any idiot knows that.
Unfortunately, idiots who do know that go out of business all the time. The US auto industry, integrated steel giants and many others who failed were extremely profit driven and, in fact, it was their quest for profits that was their undoing.
That’s because making money means nothing without competitive advantage. Companies who chase opportunities in the name of profitability often find they can’t compete, while others, like Wal-Mart, Southwest Airlines and Nucor are able to be consistently profitable in tough industries with thin margins. Profits aren’t what always what they seem.
Innovation is exciting, with lots of big ideas and big personalities. People like Steve Jobs, Jeff Bezos and the Google guys have become modern olympians and, just like Greek gods, we follow their triumphs and tragedies.
However, although innovation is a big word, it’s also a messy business, full of blind alleys and red herrings. It’s more of a drunkard’s walk than a linear path; not like in the movies where someone says “aha!” and they’re off to the races.
Innovation, in other words, is hard work only made harder by the fact that you never really know where you’re going until you get there. When you’re a marketer, it’s even more difficult because there’s so much noise about “shiny objects” that it’s tough to cut through the clutter. Here’s a framework that will help you.
“A person should be able to do whatever she wants, as long as she doesn’t hurt anybody else,” is a compelling type of political argument. It just seems to make intuitive sense.
Or does it? Ron Paul, a candidate for the US Presidency, espouses just that kind of idea and he has about as much chance as a pet rock of winning. The fact is, when you start out with a notion like that, you end up with ideas people don’t like. Why is that?
In the 1970’s, evolutionary psychologists started to figure out why; we survive not as individuals but as communities and that makes all the difference. Starting from simple principles, they’ve been able to unlock many of the counter-intuitive secrets of how cultures emerge, adapt, spread ideas and produce technology.
In 1999, just after the Dow broke 10,000, the book Dow 36,000 predicted it would more than triple in just a few years. That was two crashes ago and nearly 15 years later the Dow is barely 13,000.
Those foolish days would seem long gone, but just last week Forbes published an article which predicted that Apple shares will hit $1,650 by the end of 2015. Just like Webvan and flipping houses, people are talking about Apple like it can only go up.
Further, Robert Shiller, who predicted the 2000 crash and then the 2008 then real estate crises, was quoted in The Economist saying, “You could play the bubble, because it might not be over yet, but I wouldn’t put money in Apple stock.” With the rhetoric so eerily similar to previous crashes, it’s time to ask whether Apple is a bubble too.
“President Obama once said he wants everybody in America to go to college. What a snob!” exclaimed Rick Santorum. The reaction among the chattering classes was, as you would expect, visceral in its disgust.
But should it have been? Is there really something wrong with wanting people who merely seek to work hard, put in an honest day’s work for an honest day’s pay and mind their business to be able to live a decent life?
Put another way, what is the true path to prosperity? There needs to be more serious thinking about the question than we’re getting in political circles. Is it luck, diligence, perseverance, government investment, private philanthropy, the profit motive or something else? The answer is more complicated than you’d think.
Do you have a digital marketing strategy? Probably not. Chances are, what you have is a collection of tactics that augment massive TV buying. Those days are quickly coming to an end. The line between digital and analog is blurring and will soon disappear.
The silos of creative, media and digital are no longer tenable, but the domains of creative account planning, communication strategy and technology have been sequestered in different agency structures, each operating in blissful ignorance of each other. That can’t go on.
I wrote previously about the difficulties of digital marketing strategy. Now I’d like to point the way towards some solutions. The challenges we face herald great opportunities. From neurobiology to behavioral economics, from the semantic web to HTML5, we have new powerful new tools at our disposal. Here’s how we can put them to good use.
Or install manually
Copy and paste the following Google tag code onto every page of your website, immediately after the element. Don’t add more than one Google tag to each page.
