Best Buy Lets Customers Try Out New Tech At Home Before They Purchase

One of the fun things about events such as the Gartner Symposium is the opportunity to hear management and business perspectives from a variety of interesting speakers. At this year's conference, a number of speakers—including Reddit's Alexis Ohanian, Lonely Planet's Gus Balbontin, author Matt Watkinson, Harvard Business School's Clayton Christensen, and NYU's Scott Galloway—told stories and offered their views on innovation.

Their advice wasn't always consistent, but it was always thought-provoking and often quite entertaining.

Alexis Ohanian: Make Something People Love

Reddit co-founder Alexis Ohanian, who has written a book called Without Their Permission: How the 21st Century Will Be Made, Not Managed, talked about building what has become the western world's fourth largest website, and taking that site from a 2-person startup to one with 300 million monthly active users.

Ohanian said they started the company in 2005, "before startups were cool," and stumbled into making something people loved. Now there are entrepreneurs all over the world working on startups. "The world is not flat, but the world wide web is," he said.

Ohanian talked about getting a 25MHz 486SX when he was in 9th grade, and said it changed his life. He made a website on GeoCities, then started making websites for non-profits. His father was a travel agent whose business was being disrupted by online travel, so Ohanian said he "wanted to be on the other side of the disruption."

At the University of Virginia, he met Steve Huffman, and the two came up with the idea of building a phone application so people wouldn't have to wait in line at restaurants, which they called My Mobile Menu or MMM. They heard Paul Graham of Y-Combinator speak, and later pitched him the idea, but in 2005 it was too early for a phone application, so they were advised to build something that worked in a browser instead. That's when they created the first version of the Reddit website, and it was available for users to try within 3 weeks.

Ohanian said it's "okay to be embarrassed" by a first version, as you need users to tell you what you've done right as well as what isn't working. Two to three months after they started, he said it "sort of worked." Reddit has now grown to 300 million users.

Ohanian talked about the importance of experiencing failures and learning from these, and showed initial versions of all sorts of sites, including TheFacebook and Twttr (later Facebook and Twitter), both of which learned and improved. He said the first version of everything looks "janky" and learning from it is key as you will fail 99 percent of the time.

We have built a system of education that pushes people toward a model not compatible with entrepreneurship, according to Ohanian. "Entrepreneurship is a string of failures," he said.

Ohanian said he thought that today's social networks are actually "anti-social," as they frame a superficial version of our lives, and pushed instead for "authenticity." He talked about how Reddit has 100,000 communities, and said that what people really want is a conversation. "We all have a story to tell," Ohanian said, and noted that while lots of famous people have done AMAs (ask-me-anything conversations) on Reddit, the most popular AMAs are often normal people with great stories—such as a vacuum cleaner repairman.

He talked about a bus tour he has taken around the country looking for new startups, and said he found people everywhere. Too many people put an emphasis on marketing and hype before they've made something people really want, and he said that a 12-year-old with a smartphone can make a video more interesting than something an agency spent millions to create.

To succeed today, Ohanian said, "you really have to make something compelling." Or, according to the title of his talk, "make something people love."

Gus Balbontin: The Importance of Adaptability

Gus Balbontin, former Chief Technology Officer of Lonely Planet, talked about the importance of adaptability, and quoted Charles Darwin's adage that "it's not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change."

Balbontin talked about Lonely Planet's success as a publisher of print books, and its momentum. But he warned that you need to be "very careful with momentum," as it is the ally of efficiency but the enemy of reinvention. He arrived at Lonely Planet in the late 1990s, and many people at the company at that time considered the Internet to be a fad.

"Whatever solution you provide to your customers today is not as good as what's coming," he said, and that's a message he took to Lonely Planet. As an example, he talked about the process of finding, listening to, and sharing a single song back in the cassette era versus on Napster years later.

Balbontin noted that often the original products created by disrupters are considered laughable, such as Google's plan to map the world, or TripAdvisor's early website. "Don't laugh at disruption," he cautioned. "The crazier it sounds, the more you should pay attention." In the beginning, Lonely Planet used the Internet to solve a problem the company had as a business: how to sell more books. Meanwhile, TripAdvisor used it to solve a problem the customer had: to travel.

The problem, he said, is that both businesses and individuals get stuck doing the same thing, like the way most of us take the same route home every day. Instead, he said, adaptability is critical, as is the need to determine what your customers' real problem is, and how to solve that problem. For instance, he noted that Steve Sasson from Kodak invented the digital camera, but executives told him to put it away. Kodak executives forgot that they were about capturing life, and instead thought they were only selling film.

"We're all making the same mistake," Balbontin said, and we get stuck doing the things we've done before, so we lie to ourselves about the disruption, and come up with marketing and regulation to try to slow down the changes. We become fearful and that too gets in the way of change. For instance, when he was launching the website, he couldn't come up with a Return-on-Investment in making the case to the board, and instead made it up. He said people are better off with "a clear vision and a vague plan."

The best teams and the best individuals are those that "own" a problem, and know they are both part of the problem and part of the solution. People aren't stuck in traffic, they are the traffic, Balbontin said.

Balbontin pushed hard against doing too much planning, and said that "every time you do a Gantt chart, you kill a fairy." Like Ohanian, he railed against the current education system, and said that failure is not a bad thing, but is actually the way we learn. "You will fail," he said, but the question is, are you going to fail catastrophically or fail incidentally and learn from that?

Regarding innovation, Balbontin said curiosity, courage, and resilience are critical. He noted that most ideas are wrong, so you need to keep coming up with new ideas.

Matt Watkinson: The Grid

In a session meant for CIOs, Matt Watkinson, author of >The Grid: The Decision-making Tool for Every Business (Including Yours), gave somewhat divergent advice, and talked about the importance of analyzing business decisions among different axes, noting how we often don't take into account how changes in one dimension impact other dimensions of a business. We tend to think about the business as a set of discrete parts, he said, but instead should think of it more as an interconnected whole. "Coordination is our challenge, not competence," he said.

Watkinson said we should look at change in terms of two axes: one that considers desirability, profitability, and longevity; another that assesses the customer, the market, and the organization. Putting together a grid of these axes creates nine items, which determines the success of every business, he argues, and he noted that a change in one box causes changes in the others as well.

Taking this one step further, Watkinson showed a more detailed grid with three items for each of the nine boxes (27 in total), and suggested that in considering any new product or change to the business, you should consider how it impacts each of these of these items.

"A balanced grid is the key to long-term success," he said, but too many actions are focused on just one variable. Watkinson said you can think of this as a checklist of important things to look at in making a business decision, and said that such systems-level thinking will lead to an easier life and a clearer picture.

Clayton Christensen: The Innovator's Dilemma

Clayton Christensen of Harvard Business School, best-known for his theory of disruptive innovation called The Innovator's Dilemma, recapped that theory and his more recent work regarding "jobs to be done."

Christensen, whose most recent book is Competing Against Luck: The Story of Innovation and Customer Choice, explained that the problem with looking at data is that it's only available about the past, so if we tell students to be analytical and data-driven, it's condemning them to look backward. Instead, he said, we need theories about management, and to teach students how to effectively evaluate causal statements. Christensen generally thinks business schools have done a crummy job here, so he is pushing these ideas, with the hope that people could be more successful in getting the results they seek.

Christensen presented parts of his basic disruption theory, beginning with the idea of concentric circles of potential customers, from those with the most money and most skill in the center, to those with less money and less skill further out in the periphery. The ideal customers are seldom in the center, he said, and more often in the periphery.

The theory of disruption begins in the center of circle, he said, but technological progress almost always outstrips the ability of customers to absorb it. For instance, in the 1980s, word processing couldn't keep up with typing; now, Intel has "way overshot," and people can't even use the power they have.

Christensen said that if there is sustained innovation—meaning effort to make better products whether through incremental or major improvement—the incumbent vendors nearly always win, as they have more customers, understand the market better, and have more resources than new players.

Disruptive innovation, however, usually happens to products that are more affordable and/or accessible. In this case, the new entrants usually win. As an example, he talked about minicomputer makers—such as Digital Equipment Company—which all collapsed in the early 1980's as personal computers entered the market. They had the choice of creating better products at higher margins or creating inferior products that their customers couldn't use as well, with inferior margins. This, he said, is the Innovator's Dilemma.

A similar thing happened in the steel industry, according to Christensen, and he talked about low-cost "mini-mills," which began making low-value rebar. Initially, the integrated steel makers were happy to lose that market in order to concentrate on higher-margin products. This process continued with different types of steel until eventually it led to the integrated steel makers all shutting down. There was "no stupidity involved," he said; rather, the pursuit of profit causes people to go upmarket and get out of lower-end markets, until there is no market left.

"Harvard Business School is being disrupted in the same way by crummy low-end learning experiences like I'm providing for you," he said.

Christensen said a similar conversation within the Department of Defense in the 1990s resulted in the department concluding its existing forces were not suited to tackling terrorism. This led to the creation of the special forces.

In general, Christensen said, "theory lets you see into the future when you don't have data about the future." He told the audience that "you are best data mongers in the world, but I want you to remember that data doesn't help us see very clearly into the future." Instead, he said, when working with clients and the data that you already have, try to package it with a theory of causality that is independent of the industry in which you are working.

For instance, Christensen said he doesn't have to have an opinion on electric cars, but that a perspective is available in the theory. He said Tesla is an example of a company sustaining innovation, and said that incumbent leaders will become very interested in that real estate if it becomes successful, and thus they will either drive Tesla out of the market or acquire it. But, in China, every fifteenth car is an electric car, and these are both inexpensive and of lower quality: designed for narrow roads, made out of plastic and not steel, and at a cost of about $4,500. Such vehicles, which accounted for about 400,000 sales in China last year, could be the "rebar of auto-making."

Another theory Christensen discussed was that of "jobs that need to be done," and he argued that Harvard Business School has made a mistake in its marketing instruction by teaching students to think they understand their customers by talking about who they are, or what characteristics they have. Instead, he said we need to think about what causes customers to buy a product or service. For instance, he described how customers buying a milkshake at McDonald's in the morning don't really care about an improved product, they are mostly looking for something to do while driving to keep them engaged. He quoted Peter Drucker, who said that the customer rarely buys what the company believes it is selling him or her.

In general, much of the speech was very similar to the one Christensen gave at the Symposium in 2011. But this year he closed on a spiritual note, and said that while we typically see more immediate and more tangible feedback on achievements at business than at home, "God doesn't hire accountants in heaven." He talked about how much more important it has been for him to have helped his children than to have taught at Harvard Business School, and concluded by telling the audience that "you've chosen a wonderful profession," because it offers "many opportunities to help the people you work with to become better people."

Scott Galloway: The Four Digital Giants

Scott Galloway, a marketing professor at the Stern School at New York University, talked about the four digital giants—Amazon, Apple, Facebook, and Google—and their "hidden DNA."

The author of The Four: The Hidden DNA of Amazon, Apple, Facebook, and Google, Galloway gave an amusing talk about how each of the these companies fulfills some deeper need people have.

"Google is our god" Galloway said, and serves our "need for a superbeing." He noted that 1 in 6 queries in Google have never been asked before.

"Facebook is our heart," and serves our need to love and be loved. He noted that of the factors that seem to determine who will live to be over 100, genetics is the third-most important factor, while lifestyle factors are second. The most important signal seems to be related to how many people you care for.

"Amazon is our gut," he noted, and said that in the history of mankind, we've always wanted more, because while obesity might be a penalty for having too much, the penalty for too little has often been starvation. As a result, he said, the concept of "more for less" is always in vogue.

Apple, however, is "'further down the torso." Galloway said that a man's first job is to survive and his second to spread his DNA, and that's what we're trying to do every day even if not overtly. Similarly, he said a woman's first job is to survive, and her second to get as many inbound opportunities to find the fittest father with whom to spread her DNA. The point of luxury items—like those Apple sells—is to signal to others that you have good genes. Apple is like a fashion magazine, or the best luxury brand, he said, which explains why it has greater margins than other companies.

Galloway talked about Google as the "original gangster," and how Google and Facebook accounted for 103 percent of growth in the advertising market last year. He described Facebook as the "most successful man-made thing in the history of the world." And he said people are passing on the iPhone 8 and waiting for the iPhone X because it stands out and shouts, "I have good genes."

But Galloway spent the most time talking about Amazon, and said it has the lowest cost of capital of any company in history, and can go into any business and take it over; for example, he noted that it is growing faster in search than Google. Alexa signifies the "death of brands," he said, because people in the future will simply order a product by voice and this is an opportunity for Amazon to push its own products.

Still, Galloway said that the "death of retail has been overexaggerated," and noted that winning retailers are investing in "organic intelligence," or people, such as the sales people at Sephora, the "blue shirts" at Best Buy, or Starbucks' baristas.

Source : http://uk.pcmag.com/feature/91552/tech-leaders-stress-adaptability-and-the-importance-of-failu

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