randomness, the new naturalism and the new altruism

Rethinking the Brand in an Age of Customer Empowerment

Haydn ShaughnessyPartner

December 1-3, 2009The Conversation Group

The Conversation Group

San Francisco, London, Helsinki

Origins in social media

Advising/analysing impact of open technologies on the firm and on markets

Firm architectures, market structures, engagement strategies, brand, customer and employee equity

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An old model of Firm and Market behaviour

Inbound logistics Operations Outbound

logisticsSales and marketing Services

This linear view of the firm is what is changing. I’m going to look at how incorporating users, consumers, developers and

suppliers INTO STRATEGY changes the firm; and try to unravel the dynamics driving that - with a major emphasis on how

consumer empowerment is being met.

The Porter Value Chain Model

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Shoppers Sell

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Let the customer market and close

Users build

Symbian (the world’s most widely distributed software)

Linux Android Maemo

Let the community build

“Open-source hardware could drop the price of development even further, as Om

Malik recently wrote. Give away the designs for your hardware and let would-be customers build it themselves.”

CNET Oct 2009

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The Context for Customer Empowerment

Background drivers to bear in mind A More Plural Economy With Different Market Models – the

Porter model is one of many!

Underlying Changes In Market Dynamics, E.G. End Of Power Asymmetries

My focus today Growing Importance Of The Metatrend – The Flow Of Ideas/

Moral Frameworks Behind New Market Mechanisms

The market responses to those drivers and trends

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Metatrends and response strategies

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THE NEW NATURALISM(bioconciousness)

NEW ALTRUISM

RANDOMNESS

(Abstracted reward)

DEMOCRATISATION

INDIVIDUALISATION

Consumer Brand Co-Advocacy

Brand as Movement

Peering markets

Product as configuration process

Consumer managed vendors

METATRENDSResponse strategies

The New Naturalism

Nature is the model for human organisation Nature is the model for design and innovation Businesses will evolve as eco-systems Stewardship is the new leadership Need to remodel human communities to create resilience

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2009 Nobel Prize for Economists Elinor Ostrom’s work is on commons Governance

New Altruism – encompasses labor and capital

The evolution of a new gift economy (labor is free and so too is Google)

The economies around reviews, collaborative filtering, recommendation systems

Labour seeking non-cash rewards (e.g. in open source) Good capital Spiritual capitalism The term “ethical captialism” hit a peak in Google

searches during the recession! As did spiritual capitalism

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OPEN SOURCE

Contribution

Good capital

Reviews

Labor

Recommend

Randomness

Success as random Scale as random (300 million Facebook

users, 50 million farmville) The decline of cause and effect as

drdivers of explanation The rise of popularity and hypergrowth

as economic factors

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Democratisation as collaboration

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People neither search for nor discuss extensively the idea of parliamentary democracy nor of workplace delayering

Almost exclusively related to workAnd to collaboration

Google insights data for the term “collaborate”

Individualisation

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A persistent contradiction in the new economy

High maintenance people seeking experiences and narratives

Individualisation, personalisation and customisation are terms that outstrip online community in search activity 4:1

Metatrends and response strategies

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The new naturalism

Randomness

New altruism(Abstracted reward)

Democratisation

Individualisation

CONSUMER BRAND ADVOCACY

BRAND AS MOVEMENT

PEERING SYSTEMS

CONFUGURATION AND PERSONALISATION

CONSUMER MANAGED VENDORS ( OR VRM)

METATRENDS

RESPONSE STRATEGIES

Consumer Co-Advocacy

One of over 70 Lego Castle sites built by consumers

Other canonical examples include Nike and Adidas

LEGO

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U-Test: Beyond Co-Advocacy

Taking community and open source values into core service provision

Consumer co-advocacy has inherent momentum towards peer-collaboration

by consumers15 | © 2009 nGenera Corp. All Rights Reserved.

Brand as Movement - Ethics

“in the U.S. and globally, consumers are seeking out companies that they believe are acting in society's greater interest,”

Synnovate CEO Scott Miller on results of Synnovate study of auto-purchasing intent

Innocent drinks

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TOM’S SHOESBUY A PAIR OF SHOES FROM TOM’STOM’S DONATE A PAIR TO A NEEDY CHILD300,000 SHOES DONATED THIS YEAR TO DEVELOPING WORLD

BUT

Symbian Foundation

From Ethics to Movement

“The idea of the Symbian Foundation is that an independent,

not-for-profit organization can serve as the hub of a community of individuals and organizations and lead this

coalition to developing more innovative, more compelling, more useful products in an open, level

playing field where all can compete as equals.”

– Symbian Executive Director Lee Williams

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How Significant is Symbian?

350 million installed handsets globally by 2008

480 million newspapers circulated daily 1.1 billion pcs 1.8 billion credit card owners 2.2 billion unique bank account holders 1.5 billion tv sets 1.7 billion internet users

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Beyond Movement

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Zappos’ Next Project: Opening up supplier price data and financials

ASDA – division of Walmart – installing webcams in supplier factories and store warehouses

Peering Markets

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DATINGPEER TO

PEER LENDING

FINANCIAL ADVICE

AUCTIONS

GAMBLING

US Market approaching $1 billion. Migrating to FACEBOOK

Lending Club Facebook App $150 million of peer loans in 2009P2P loans $1 billion by 2011 in USA

P2P Games

BETFAIR

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Pioneer of the betting exchange – peer to peer gambling

Betters bet against other betters directly6 million transactions per DAY

230 million revenues

Currently investing in communities like Watercooler

ZOPA

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Loans from people not banks

CONFIGURATION/personalisation

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But it is not about customisation of brands

…… it is facilitating new mechanisms for supply AND reshaping markets

…. And the re-personalisation of the economy

Make Systems

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Momentum is with the personal production philosophy RESHAPING SUPPLY

If I can’t make it I wont wear it

If I can’t hack it I won’t buy it

VIA new embedded possibilities

YOU CAN NOW EMBED THE WORLD’S MOSTS POPUAR SOFTWARE IN ANY PRODUCT, the Symbian OS, or the Android OS, or Linux, in any device

BEAGLEBOARD.ORG IS THE COMMUNITY WHERE YOU CAN DEVELOP BEAGLEBOARD PROJECTS

Single board computing

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Customer Managed Vendors (also called VRM)

Central proposition: CRM is broken; current corporate data-use is both bad and erroneously asymmetric

Step 1: Google social search. I combine Google data with my social data. Represents the point where the system recognises my primacy in data.

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Customer-centric and Customer Owned Data

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Manages your personal data and what you send to vendors

Develops personal energy identities, ie aggregates my personal energy use

The evolution point – I own my data

Data pressures

Internet of things/Item-level identity

Apps

Energy identities

Data-augmented reality

COMING DATA EXPLOSION (world 2.0) CHARACTERISED BY START-UP AND SMALL COMPANIES AS DRIVERS OF DATA PRIORITIES

Are these a threat to the old guard of CRM-style data acquisition?

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GRADUATING TO A CONSUMER dominated marketing space

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Current innovation threshold

Consumer co-advocacy

Brand as movement

Peering markets

Configuration systems

Customer managed markets Consumer

dominant

Brand dominant

FURTHER OBSERVABLE CHANGE

Social media Social technology

Open management

2007 2008 2009

Best Buy SymbianSAP/Microsoft

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Implications for Your Brand Need to respond to major distinct types of motivation and culture –

the Metatrends, explore changing thought processes and how these group and influence market models.

Need to understand the ideas driving markets as much as market data? Significance for example of new naturalism and eco-systems for internal organisation and leadership.

Need to plan for many market models, underlying changes such as popularity markets and explicit new models (peering markets, altruistic labor markets, movement driven end-user markets) ?

Need to disaggregate brand? Be different things to different people in these markets? Become the platform not the provider?

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Requirements of strategy in mid-term

The direction is public and is becoming OPEN – ASK – DO I NEED TO BE PART OF THAT ZEITGEIST?

Co-design and advocacy – it works but it contains the seeds of more consumer empowerment: don’t fear it; plan!

Brand as movement – a transitional strategy to capture high ground?

Peering – natural outgrowth of community, so partner the customer base.

Configuration systems – embrace a natural outgrowth of co-advocacy - positive for supply chains.

CVM – reverse data culture or be overwhelmed by change

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Haydn Shaughnessy haydn@theconversationgroup.com

www.ngenera.com

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