Message on a bottle

"I look back on life -- it's funny how things turn out.  You, the creator of beeping sirens and honking cars, yearn for the solitude of the mountains.  You, a connoisseur of fast food, now gaze at water that took years to gather natural minerals as it trickled down from the Himalayas to within your reach. And I, some of the purest water in the world, stand here, trapped in a bottle.  Come, enjoy the irony."

From a Himalayan brand water bottle in India. One secret to living in one of the most populated countries on the planet is to keep your sense of humour.  Clever marketing, or just a bottle of water trying to tell its story?

Flying back to New Zealand tonight after a few good meetings in Bengaluru (Bangalore) with our tech partners.

Flash Boys - A Must Read!

I picked up a copy of Flash Boys before boarding a flight from San Francisco to Newark.  By the time we were over Yosemite, I was hooked.  The first chapter reads like an action adventure/thriller on the most unlikely of events, the conception, funding and installation of a fibre optic cable from the Chicago Mercantile Exchange to New Jersey.  One might think that this is a story only project managers and engineers would love, but Michael Lewis (The Blind Side, Moneybag, The Big Short, The New New Thing, Liar's Poker) is not just any storyteller and this, ladies and gentlemen, is no ordinary story!  Janet Maslin of the New York Times describes the story as, 'Guaranteed to make the blood boil.'

The fact that it is a true story is the most mind-blowing realisation among a romping tale of one extraordinary WTF! moment after another.  How could Wall Street Banks, with the help of (mostly) Russian programmers (even that is not made up!), create or knowingly or unknowingly allow the creation of trading intermediaries that would systematically skim millions and millions of trades on a supposedly 'fair' market system, i.e., the US securities (stock) markets?  But, from around 2009 onwards, that is what happened.  In Lewis' words:

"The US stock market was now a class system, rooted in speed, of haves and have-nots.  The haves paid for nanoseconds; the have-nots had no idea that a nano-second had value.  The haves enjoyed a perfect view of the market; the have-nots never saw the market at all.  What had once been the world's most public, most democratic, financial market had become, in spirit, something more like a private viewing of a stolen work of art." (p 69, emphasis in original).

The reason the have-nots could not see the market was due to the presence of high-frequency traders (HFT) intervening between buyers and sellers.  Using small fractions of a second advantage, HFTs would test the market for buyer interest, find it, then 'front run' to other markets, buy the shares of interest before the original buyer knew anything had happened. By the time the buyer's bid arrived on other markets, the price had gone up and the high-frequency traders had arbitraged a profit. All this takes place within less time than it takes to blink an eye.  The profit margins were small, but multiplied they added to billions of dollars (it is impossible to know for sure) of essentially a tax on investors, not just big hedge fund-type investors, but ordinary investors, whose pension funds relied on these markets to create wealth for ordinary people.

Of course the HFTs come off looking pretty bad, but the Wall Street banks were more or less (admittedly it seems to differing degrees) complicit with this behaviour, creating their own 'dark pools,' where the banks traders traded, at superior speed, against the banks' own customers!  There is a line that comes to mind from the movie, "A Few Good Men," where one of the court marshalled Marines explains to his co-defendent friend, We did do something wrong; we were supposed to protect Santiago (the victim).

The hero in this story is Brad Katsuyama, a Canadian working as a trader for the Royal Bank of Canada, who can't figure out why his trading screens change the minute he sends a buy order. Tenaciously following his curiosity, he searches for people who can help him understand what is going on in the stock markets.  In his quest, he finds incredibly smart computer programmers and others, like Ronan Ryan, a gangly guy from Dublin, who understood markets better than almost anyone and Zoran (their own Russian), who could sit stone-faced waiting for things to break in these complex systems and then fix them without crumbling, while the whole world watched, and John Schwall, a former Wall Street banker, who left in disgust after the GFC.  The team of insurgents grows until they finally make a bold attempt not just to understand the system, but to fix it!  To do this, they all quit million plus (and in some cases, multi-million dollar) jobs and bet the ranch on their creation.  But, it was never going to be easy.

"Some large amount of what Wall Street had done with technology had been done simply so that someone inside the financial markets would know something that the outside world did not.  The same system that once gave us subprime mortgage collateralized debt obligations no investor could possibly truly understand now gave us stock market trades that occurred at fractions of a penny at unsafe speeds using order types that no investor could possibly truly understand.  That is why Brad Katsuyama's most distinctive trait--his desire to explain things not so he would be understood but so that others would understand--was so seditious.  He attacked the newly automated financial sytsem at its core; the money it made from incomprehensibility" (p. 233).

To be fair, there are even two Wall Street bankers who display exemplary courage in the face of institutional pressure. Ron Morgan and Brian Levine, of Goldman Sachs, took the brave step of sending orders to Brad and co's exchange, even though they knew their company would reap less profit from trading on a more robustly fair exchange, the IEX.

Flash Boys has created considerable controversy and naturally the Wall Street banks and HFTs have launched several public relations campaigns to counter Lewis' story.  The Afterward in the new edition offers a summary of the fall-out from the story being told and includes a cautiously optimistic ending, namely that it is not remarkable that technology can be used to game a system, nor even that one of our most important systems (finance) has been corrupted by greed, but that amidst--indeed, from within--this system, a few brave characters decided to do something to make things better.  Now, that is a story that brings some hope.

Excuse me, is this tweet taken?

When I re-started this blog 3 years ago, I made the comment that blogging was one thing, but life was too short to use Twitter.  See my post about 'Blogging into the darkness.'

Actually, what I said was that if I wanted to bark randomly into the darkness, I would use Twitter, instead of a 'real' blog.

But, a few weeks ago, I made the leap and signed up on Twitter.  So, has it changed my life?  Not really.  I mean yes, it provides another news stream, which I do look at every other day or so.  (I think it's fair to say I'm not a news addict.)  And, what about my tweeting? How's that going, you might ask.  Well, it turns out that as daunting as writing my first post, I have been wondering how to launch my twiterary career.

What pops into my head are throw away lines like the following:

Excuse me, is this tweet taken?

I'd love to tweet, but I've got nothing to say.

Twitter is a messiah maker.  I have followers and I haven't written a word!

Don't follow me, I may not tweet.

Don't follow me, I'm lost too.

On the other hand, should I follow or match the style of this blog and try to write intelligently about news and developments in the world of connectivity?

Sounds good, but I don't want to produce a string (thread) of sound bite cliches.

As I was deliberating, I thought I should wait and post my first tweet from Silicon Valley.  It seems fitting some how.  And, so here I sit in the Marriott in San Jose.

To see that first tweet, check out @DarlKolb on Twitter (sorry, I haven't figured out how to link to a specific tweet... so much to learn!).

Give a little, get a lot!

A month or so ago I needed some better graphics for a series of keynote talks that were coming up, so I asked Franziska Mueller, an intern who was working with our Media Flow project, if she would re-design and illustrate several of our key ideas -- and she did a great job!  I wanted to pay for her talent and time, but she insisted it was not a big deal.  When I later learned that she and her husband had rescued an abandoned dog in New Zealand and wanted to take Pai (the dog) with them when they return to Germany, my wife and I decided to help them out a little. Giving on-line was easy, thanks to an on-line giving service provided by a local telco.

On-line social giving sites are showing up all over the web, and by coincidence the day after giving on-line, the New Zealand Herald featured this TEDx Auckland talk by Dale Nirvani Pfeifer, explaining the Maori concept of 'utu' and the importance of reciprocity (give and take) in our indigenous Aotearoa (New Zealand) culture.  I met Dale a few years ago when she was visiting the New Zealand Leadership Institute at the Business School. She recently has started a social giving organisation, called Good World, based in Washington, DC.

Dale's talk is inspiring.  At a time when there is a lot of fear and loathing around the Internet, it is heartening to be reminded that technology-enabled platforms are just another way in which the 'good' elements of traditional cultures and societies can and are being replicated on-line.

When we give to someone in need, it takes us back to our cultural roots, where 'give and take' bond us together.  Some would argue that there are also moral benefits from caring and sharing.  When we give a little, we get a lot.

The future of Amazon, Google, Facebook and Apple

The four major on-line brands--Amazon, Google, Facebook and Apple--get a rapid fire, informative and funny review by Scott Galloway of the NYU Stern School of Business.

Even if you don't care about these brands, but want to understand premium brands (like Apple), this video is a must-see!

The Four Horsemen brand overview and predictions for the Apocalypse.

Enjoy!

Connectivity trends in Asia

Last week Mary Meeker released her latest 2015 KPCB Internet trends, a highly recommended report on the state of the connected world.

This week, as a presenter and stream chair at CommunicAsia, the largest ICT and media conference and trade show in the Pacific region, I have been noticing the trends for this part of the world.

Internet trends in Asia, which are consistent with the Meeker report are:
- the rise and rise of mobile connectivity, i.e., smartphones vs. 'feature' phones; content and messaging continuing to shift to mobile; mobile ads finally getting traction
-the power and potential of emerging markets, i.e., the fastest growing markets are BIG emerging markets--and there are a lot of emerging markets, not just China
-the impact of ubiquitous connectivity on the nature of work itself

In the Enterprise Mobility track I chaired, we heard some great case studies and industry perspectives on the technical advances and challenges of liberating the workforce from the desktop.  The discussion ranged from BYOD (Bring Your Own Device) issues to data security and the trade-offs of mobility in terms of cost and ROI, and the question of what work will be like in the future.  I am grateful to the presenters and discussants:

Leon Jackson, Head, Healthcare IT, University of Malaysia
Arnaud Brolly, Mobility Portfolio Lead, SITA-Aero
Steve Nash, APAC Principal Mobility Specialist, Vodafone
Stuart King, Precision Workstation, Asia-Pacific, Dell
Shailendra Soni, Principal, ICT, Frost and Sullivan, Malaysia
Kristin Foss, Senior Director of International Product Management, ShoreTel, USA
Marie Petterson, Senior Product Manager, Symantec Asia Pacific

And, we heard some wild and clever advances in marketing, especially in terms of industry partnerships (Spotify), location-based marketing and how important it is for consumer businesses to have mobile-ready web presence, and hopefully a strategy for mobile media.  Ken Herron, digital start-up guru, hosted a lively and informative session with:

Joshua Steimle, Digital Marketing Guru and Forbes contributor
Sunita Kaur, Managing Director of Asia, Spotify
Asif Khan, Founder and President, Location Based Marketing Association

Media Flow Project
I shared our media analytics engine.  You can see a demo of our prototype at this address.
Or, paste this link into your browser:   http://mediaflow.ninja/#/home

Product launch - Huawei P8 
A good old product launch with thundering soundtrack, original graphics to highlight the great features of this new smartphone.  The challenge to other players is that Huawei represents the trend of customers being able to buy a good smartphone for the price of a 'dumb' phone.  Players like Huawei are not going to replace Apple at the top end, but they are going to challenge just about every other Android player (including Samsung).  Add to that, the fact that the Android business model is coming under significant price pressure.  To paraphrase Warren Buffett's observation on airlines, mobile is a great industry, but a tough business.

Google for Work
-Keynote address by Kevin Ackhurst, Managing Director, Google for Work, Asia Pacific
1. Mobile first
-restating the obvious
2. Reinvent the PC
-besides mobile, most of us have, on average, around 3 screens to work with at any time
3. Intelligent screens
-Google search and 'smart devices' will proactively provide information on our screens
4. Personalized collaboration
-easier collaboration through simple and affordable collaborative technologies
-collaboration platforms for a mobile first world
-team project management embedded in collaboration tools

Amazon 
-Keynote presentation by Peter Moore, Regional Managing Director, Amazon Web Services (AWS)
-102% increase year-on-year growth in data on Amazon Web Services in the past year
-Gartner ranks Amazon as the leader in Cloud infrastructure readiness
-Moore proposes that the Cloud is the 'new normal'
-Why?
-new businesses start in The Cloud, because of low cost and low legacy effects
-companies of all sizes need to move faster and the Cloud allows fast infrastructure expansion
And,
-companies will use data more than at any other time in history
-governments will likewise start focusing on using--not just controlling--data more effectively
-AWS has an education platform for schools
-'hybrid IT' involves local services coupled with the Cloud (off-premise storage)

Alongside the busy summit schedule, I managed to catch up and hang out with our digital partners, Unified Inbox.  CEO Toby Ruckert and Margit flew in from Germany, as did the design team from Flanke 7, Carsten Czech and Marcel Ronnfeldt.  Aby Varghese was there from the Bangalore team and Ken Herron made the trip from Florida.  And Camilla Urdahl was there from Auckland.  It was a chance to meet up face-to-face with folks we have been working with remotely--another not-so-new trend in global work, face-to-face 'meet-ups' to deepen working relationships.  It was fun!

Next month, Ananth Srinivasan and I will present our Media Flow work at a conference in San Jose, California in the heart of Silicon Valley, the epi-center for digital innovation.  The CommunicAsia conference, however, reminded me of the importance of this region in terms of ICT consumption and trend setting in our own right.  Moreover, it was a great opportunity to witness the state of the communications industry.

Watching those around me, I saw glimpses into the future, not just of Asia, but for all the world.

Michael Porter sees Connectivity as Strategic Enabler

Last week I gave a keynote address on the Internet of Things to a group of primary sector companies, such as farming, fishing, timber, wine, etc.  The theme of the talk was digital disruption and, in particular, the Internet of Things.

From a business strategy perspective, Michael Porter and James Heppelmann's recent Harvard Business Review article provides a thorough and substantial argument for how the Internet of Things ('IoT') is already a disruptive force in many industries. Primary industries, such as farming, feature heavily throughout the Porter and Heppelman article. For example, GPS-enabled devices use and record field locations to more accurately help farmers understand inputs and outputs in agriculture production.

Manufacturing is likewise no longer just about producing the physical product as 'smart' products communicate data to the user or back to the manufacturer, or both.  Smart products provide value by linking to databases and 'big data' analytics in what can be called the 'service cloud,' a space that reaches far beyond traditional manufacturing plants.  As such, connectivity adds value.  As Porter and Heppelman put it,

"Smart components amplify the capabilities and value of the physical components, while connectivity amplifies the capabilities and value of the smart components and enables some of them to exist outside the physical product itself.  The result is a virtuous cycle of value improvement.”

Not surprisingly, Michael Porter interprets the strategic implications of the Internet of Things through his famous '5 Forces' model of industrial competition. Each of the five forces can be extended or undermined by machine-to-machine connectivity.  And, not surprisingly, the authors remind us that, just as technology in general is an enabler, not a strategic advantage in and of itself, so too, the Internet of Things will favor those with a strong, clear strategic platform to take advantage of machine-to-machine connectivity.

“What makes smart, connected products fundamentally different is not the Internet, but the changing nature of ‘things.’  It is the expanded capabilities of smart, connected products and the data they generate that are ushering in a new era of competition.  Companies must look beyond the technologies themselves to the competitive transformation taking place.”

Connectivity is central to Porter and Heppelman's new work.  Indeed, the term is used frequently in the article, especially early on as they paint a picture of the current competitive and technological landscape.  Moreover, in their new model of the 'technology stack' the central element--right in the middle of the model--is 'connectivity,' enabling smart products to provide additional value and serve old and new customer needs, which in turn provides value to firms who can create and/or harness the Internet of Things and other connective technologies.

The authors suggest that, “the third wave of IT-driven transformation thus has the potential to be the biggest yet, triggering even more innovation, productivity gains, and economic growth than the previous two (automation and the rise of the Internet).”

Not only does Porter see increased connectivity as a new source of competitive advantage,  he also sees the potential of the Internet of Things to solve important human problems and make life better.  Smart products have the potential of helping manufacturers make better products, but also empowering individuals with useful personal data, for example health data from bio-sensors in wearable devices.

Whether or not you share Porter and Heppelmann's optimism for the Internet of Things, if your company is stalled in the headlights when it comes to digital strategy, put this article on your boss's desk!

For more on the Internet of Things, see my post called the Internet of Everything, when MIT's Technology Review's proclaimed 2013 as the "Year of the Internet of Things."

Reference

Michael Porter and James Heppelmann, Harvard Business Review, November, 2014.