Is Data the Oil or the Currency?

Lately I have seen again the notion that “data is the new currency” and similarly „data is the new oil“. We are quick to put out these metaphors because they seem to illustrate the importance of data in business today.

But there is a fundamental difference between oil and currency as a model for what data is and this difference is sometimes lost in the discussion.

Oil is a limited resource that only can be found in some places. Whoever gets his hand on these places first or who happens to own the land (or the country in some cases) that oil is found on gets all the benefits from the oil. A fact that many middle east countries have been living on nicely.

While currency is also a limited resources, at least to some degree and with economic consequences when too much is created, it has a number of important features. The functioning of a currency is based on transparency: the value is visible to or can be determined by everybody and availability: everybody can acquire it at an agreed value.

Going through this description than data today is more like oil, where a few companies, by virtue of their business model, their execution excellence, their right time to market have gained access to a lot of data.

Data today is not transparent and tradable like a currency. While people may trade their personal data for free applications involuntarily, they can not determine the real value of their data. And data can not really be traded openly or actively. A lot of companies have created an infrastructure for themselves to sell data and the holy grail of many companies and new business models is created around such an infrastructure. But those people that provide the data for such business models are not involved in the creation or control of those systems.

Whether this will change in the future or data will always be stuck in the „oil corner“ of the metaphors is to be seen.

Know Thyself: Customer Privacy everywhere, or NOT

Today – or actually yesterday – seems to be the day where everything comes together on customer privacy

1 – Some lengthy discussion (at TheNextWeb and iMore) about Verizon’s (and other mobile operators) opt-out setting for monitoring and sharing of detailed information about smartphone users. The whole issue coming in two different flavors: (1) that operators monitor and share those data at all and (2) the very hard to find opt-out – rather than an opt-in – process.

And as a sidetrack to this, Telefonica (totaltelecom) launching it’s Big Data endeavor called Telefonica Dynamic to make money out of customer data.

2 – In parallel arstechnica had a story about Privacyfix a new privacy monitor that attempts to calculate your value on the net for Google and Facebook. I’m not really worth much according to their analysis.

3 – then the zdnet report on the fruitless discussions to find an agreement on the Do-not-track (DNT) feature in the W3C standardization body.  The whole issue driven by the Microsoft’s decision to enable DNT as the default in IE10, thus preventing tracking unless the user actively enables it.

And finally, I just finished reading Charles Duhigg’s “The Power of Habit”.
Retail stores like Target (the name says it already) identifying pregnant women only by monitoring their shopping behavior, gives you a sense on what is possible with consolidated customer information.

Privacy and implications of increased awareness on protecting your own data is definitely something to monitor for the future.

What’s your design approach ?

Playful, designful or crowdsourcing ?

Ok, here is some background to the question. It was triggered by a number of conversations I had during the last weeks.

It all started with an interesting presentation at the “Unternehmer Live” series at the Strascheg Center for Entrepreneurship by Philipp Karmires, who is New Business Development Manager at Google in Munich. He presented the design philosophy at Google. (See a similar presentation he gave at Creative Innovation Summit 2012)

At Google 20% of time spend on projects out of the daily work and some innovation rules, create a playful environment to try things out with the assumption that at some point something important will arise. Recent examples are Google Goggles and the Driver-less car.

So this is the playful design approach. Let many smart people in small projects try something out and eventually something great will happen.

In parallel the new book by Ken Segall: “Insanely Simple: The Obsession That Drives Apple’s Success” gives some insight into Apple’s design philosophy around “small teams of smart people”. Designing the end-user experience from end-to-end with a small team – no focus group research – has created some of the coolest and market-changing or rather market-defining products in the last decades.

Obviously the designful approach, with a small and focused team designing the complete product and user experience also works successfully.

These 2 approaches very much focus on small teams of smart people, but as an additional dot to connect to here, I was at an interesting event organized by Lithium, maker of a community and social media platform enabling companies to create brand followers and communities.

One of their key examples of community driven product design – and one that is very close to my daily work – is UK-based Mobile Operator giffgaff. They did not start with launching a service, but with launching a community platform that allows potential future users to define their tariffs and products. Once they had this defined, they started operating their services. Fully outsourcing the product definition to users.

Crowdsourcing product design and innovation seems to become more popular across industries and proves to have some merits.

I don’t have a clear answer on which approach is better, because for all there are successful examples. It also very much depends on available resources, market and industry. Especially interesting for me is to understand,  how these approaches work in the Business-to-Business (B2B) space.

So now back to the questions: what’s your design approach?
(and how does all this relate to Design Thinking ?)

1 Thought (was 10 Predictions) for 2012

This originally started as 10 predictations for 2012, but while thinking about and refining it, these turned into one thought / prediction with several proof points.

The Rise of the User Experience – Design Thinking
2012 will be the year of design thinking. We will see products and services that provide a consistent end-to-end user experience dominate the market. It will be the products designed to be easy those that win over the complex ones.

Products will no longer mainly succeed on tech specification, but a lot on user experience. Marco Arment  already made the point on his extension  of the initial Amazon version of the Kindle Fire vs. iPad 2 comparison.

The major question will no longer be who owns the customer, but who owns – and manages and improves – the overall user experience, because this is where the competitive differentiation will happen. And user experience includes everything from starting to use / subscribing to – using – handling faults around products and services.

Telco operators will need to re-consider what their products and services are and design them around the end-to-end user experience paradigm. In the past this was simple because the services: voice calls, SMS, basic data services have been defined by standardization, which – besides the capacity and coverage issue – did take care (or not) about the simple user experience. When starting to look at new and different services like content, video, cloud storage the design of the user experience becomes more difficult and involves element outside the control of telco operators.
And so here are the remaining “predictions” or discussion points around this theme.

1) Smartphones and Tablets
The leading position of Apple’s iPhone and iPad in the smartphone and tablet market in terms of defining the standard for user experience and achieving the highest profitability will not be challenged soon, while Android will definitely lead in terms of market share.

Following the design thinking theme above, the major challenge for Android relates to the fragmentation of devices, device capabilities and screen size (see overview of screen sizes at Stephanie Rigger). This significantly complicates the design of a consistent user experience across a broad set of devices (design implications at Jeffrey Feldman)

One company taking Android to the next level is obviously Amazon with the Kindle (Fire). And while definitely not a competitor in the full tablet space, it is interesting to see them moving Android into a closed content (mainly books) delivery device with their own ecosystem. Creating the only Android-based tablet-like device with substantial sales numbers by owning the complete user experience.

The other element of increasing customer frustration around Android and the device fragmentation is the OS upgrade complexity and un-availability of OS upgrades to many devices. The latest take on this the Samsung Galaxy S, which is not getting a Android 4.0 IceCreamSandwich upgrade.

It will be interesting to see how the only other serious contestant in the space – Microsoft Windows Phone – is doing with the launch of Windows 8. At least from the presentation it looks as if there will be a very strong framework and guidelines on the user experience for the Metro GUI.
Even if some claim  that it is too late, I believe that Microsoft and Nokia will see a strong start, if they jointly work on putting all the pieces of a strong user experience and ecosystem together. And yes, it will be Microsoft and Nokia together driving this; alone on their own each will fail.

Oh, and forget about WebOS and RIM in this space. Both lacking the momentum on designing and pushing a competing user experience paradigm into the market.

2) Clouds and Cloud Computing
Besides the current hype in clouds and cloud computing – which even made it to the daily newspapers – it is obvious that in the future for mobile applications a cloud-based backend infrastructure one way or another will be essential, not only for data back-up, but also as the core element for syncing among several (mainly mobile) devices. Any application missing this component will have a severe competitive disadvantage.

The cloud infrastructure, including the APIs to integrate it into applications will be of equivalent importance as the Operating System. Therefore the move  by Microsoft to add iPhone support to their Skydrive cloud offering is very interesting. This creates a new competitive space with the big players Amazon, Google, Apple (potentially Facebook) and currently some smaller companies like dropbox. But in the mid-term this will be a play around economies-of-scale, the size of the related eco-system and – again – the overall integration into the application user experience. So the big players have a definite advantage.

Telco operators will have only 2 options in this game: (1) bundle access to – potentially other companies – clouds as part of their existing service offering and thus enable easy cloud service for applications or (2) provide own specific / focussed applications (e.g. around music / video streaming) for which they design the complete end-user experience including the cloud backend infrastructure.

3) Television
After the rumors around Apple’s extended entry into Television – fueled by the Steve Job’s quote that he has “cracked” the TV problem in Walter Isaacson’s biography – there are high expectations for this in 2012.
My take on this is that it will be less spectacular than many expect.
A lot of discussion – especially with the technical people has been –  about what Apple’s future TV would bring around screen resolution, integrated vs. separate receiver box, integrated hard disk recorder, TV channels as apps etc. And it seems that Siri-based voice (remote) control is one of the safer bets on what the Apple TV will bring.
However, all of this does not sound like a really game changing improvement of today’s TV experience, but obviously the previous Apple product announcement have put the bar very high.

Especially the launch of the iPhone has put Apple in the middle of an international eco-system of companies, the mobile operators and application developers, like the iPod and iTunes did with the music and movie companies. Looking at the overall structure of the TV industry makes the previous eco-systems look simple, especially when considering it on a global level. Not only are the different legal structures with public and private TV stations, different distribution channels via air, cable and satellite and especially the multitude of content owners, e.g. around sports. And finally the topics that probably needs the most improvement in today’s TV experience: advertising and commercial breaks. Just looking at the huge amount of money TV channels pay every year for major licenses, e.g. olympic games, NFL or MLB, and that this money is re-financed by selling advertising airtime.

“Cracking” the TV issue would somehow involve re-designing or re-defining the content owner, production, distribution and advertising ecosystem as well as providing a significantly improved user experience. I currently don’t see this playing out in the short term.

So the two interesting questions are, what will Apple actually launch around TV and what will the competitors, like Samsung, do in the mean time.

4) Mobile Payment
2012 will definitely be the year that mobile payments takes a major step forward – NFC (Near Field Communication) will not be part of the winning game and the role of mobile operators in the game is challenged.
Many initiatives with strong backers have been (Google Wallet , mpass (Germany) or will be launched soon (ISIS).

But just launching the mobile payment channel is not enough. Contemplating the user experience and value proposition for both the user (buyer) and the merchant is essential. Square  provides some excellent examples  of this, including a smartphone app for users. And the SME bundle  together with T-Mobile shows how to market these offerings as well as the role of the mobile operator.

In the competitive space of companies driving into the mobile payment space, credit card companies and Internet companies (Google Wallet – Paypal) are the strongest contenders. An interesting role will be for mobile billing aggregators (like Zong  – also used by facebook – and boku) who consolidate local operator based billing capabilities.

Also very interesting will be the evolution in developing countries where neither banks nor credit card companies nor Internet companies have a payment infrastructure comparable to the one in developed countries. This is where telco operators are in the right spot to take over, if they manage to move quickly and consolidate the end-to-end use cases and user experience.

5) LTE 
There should be no debate that LTE (the next generation and high bandwidth mobile networking standard) will continue to move into the market in 2012.

Following the initial theme for this year about designing and deciding on the overall user experience, however two topics around the introduction and usage of LTE will be still interesting to watch.

The first is the tradeoff between high bandwidth and battery-life of LTE capable smartphones. The initial reviews (Shawn Blanc  and Engadget) of the Google/Verizon/Samsung Galaxy Nexus phone suggest that battery-life i.e. usage is seriously limited when using or even enabling 4G/LTE connectivity. Compare this to many of Apple’s design decisions that prioritize battery life over latest technology features and user experience over tech specs. And battery life is definitely a major and noticeable part of the user experience as the latest hick-up  on the iOS upgrade by Apple has shown.

The second interesting topic for LTE is the evolution of the related data tariffs. As mobile operators try to balance investment for next generation wireless technology with customer expectation for flat-rate data bundles (i.e. limited revenue) as well as the Internet competition for major services (voice, messaging, etc.), there is a tendency to create more and differentiated and complex data tariff bundles with a large number of options. While tempting from a business perspective this might be counter-productive from the end user view.

6) Newspapers and ePublishing
One major disappointment – at least for me – in the tablet space has been the challenging user experience for electronic forms of newspapers and magazines. While ebooks have an immediate appeal (good readability, easy to transport),  the usability of magazines is either clumsy and slow (e.g. Wired) or visually challenging (i.e. hard to read, e.g. M/I/S/C on Zinio).
The major issue seems to be the approach to “copy” the magazine’s hardcover version into an electronic format. This becomes even worse when looking at daily newspapers (I just gave up on the electronic copy of my local newspaper).

The very exciting approach of PushPopPress with Al Gore’s book “Our Choice” is very much challenged after the acquisition of the company and technology (but probably mostly design talent) by Facebook.

What we will see – or at least I hope we see – in 2012 are approaches that separate the magazine/newspaper content from the traditional format and move it through a separate / dedicated publishing platform that focuses on the needs and expectations of mobile users.
And that adds to the standard content the specific features and capabilities of mobile tablet devices, in a similar way the London Tube map was transformed into a fully interactive application with a much deeper user experience.

So much for the major points related to my overall theme for 2012. There are a few more topics for this year, which I’ll follow-up separately, e.g. Social Network Aggregation – it is become increasingly difficulty to synchronize across different platforms, Mobile Advertising – will get more annoying as on the desktop, Telco Operator Network APIs – one of my favorites and a few things going on here, but still challenging, Patent Wars – everybody fighting with everybody over patents, will become even worse, but reminds me of some years ago with other software patents and we also survived those.

Let’s enjoy the fun that 2012 will bring.

2 Quotes on Customer Experience

Finally managed to read through the Fall 2011 issue of M/I/S/C focussing on Customer Experience.

Just 2 quotes from Will Novosedlik, VP Brand & Design Thinking at Idea Couture.

“The emotional state of the customer after an interaction with your brand is the most important moment in your brand’s life”

“Both employees and customers are viewed as costs that must be managed, not as relationships that must be nurtured”

Too often Customer Experience is considered when things go wrong not as the initial design principle.

Product Decision Criteria #1: Make the best product!

At Hypercritical podcast (episode #32) John Siracusa and Dan Benjamin discuss product decisions at Apple.

The #1 product decision criteria at the board room (or any executive level) should be: “Make the best product” (for the customer)

How often are the discussions focussing around gaining market share, fighting the competition, technology trends and how much can be afforded. This will all follow once the focus is on creating the best product.

And how many companies and products in the market today would pass this test?

Social CRM – what is it ?

Interesting attempt on the definition of social CRM (and the evolution to get to it) by Oliver Blanchard at the BrandBuilder Blog:

[Social] CRM is a business function supported by a system and technologies whose aims are to improve a company’s ability to derive insights into customer needs and behaviors by adding to their transaction data the lifestyle data they share online.

From my perspective it covers well the aspect of adding the outside social information to the existing inside view of CRM.

However, In the age of Facebook, Twitter, Youtube and all other social media, I think there is also the aspect of adding the social network capabilities to the CRM part, i.e. let your followers and friends do part of your customer relationship, especially the promotion and brand building part of it. Some others would probably also call it Word-of-Mouth-Marketing.

This obviously also depends on what should be considered under CRM and then you can think about externalizing some of the functions. For me key business functions of CRM are Customer Care, Complaint Management, Bonus and Loyalty Programs, Promotional Campaign Management and there is probably an official definition somewhere.

And to add to this ReadWriteEnterprise just summarized the latest from Gartner on Social CRM.

Two stages of simplicity

Simplicity and Zen-like elegance has been attributed as the key success factor of many products currently.

Just coming out of a conversation about GUI design I realized that the push for simplicity has 2 challenges or stages. The first is to simplify, i.e. leave out or at least hide rarely used functionality or components.
This in itself can be demanding especially for product engineers who believe in the importance and consequently immediate visibility of each and every feature of the product.

But the more challenging part is actually to do this in a way so that users immediately “feel” the added value of the product. This requires to reflect customer expectations and standard use cases in a very natural way.

We will see this coming even more not only for physical products, but also for processes and customer interaction.

[Update: And here is some insight from Harvard Business Review into the Apple way of achieving this.]

[Update: And the interesting view of Don Norman on Google’s simplicity]