A Recent Q&A On Online Business And The Digital Landscape

I was a panellist at an event held in UCD in March titled Digital Landscapes, where along with fellow panelists Damien Mulley, Kim Majerus and Dylan Collins, we discussed current and future trends in the online world. In preparation for the event, the panel chair, Damien McLoughlin, emailed a number of questions which I am reproducing below along with my answers.

When we talk about exploiting new technology: what technology are we talking about? What opportunities do they present? What are these emerging technologies that everyone is talking about?

New technology could be anything – augmented reality, 3-D video, WiMax, the Semantic Web, real-time information streams – and they all become relevant in a world where technologies are becoming increasing integrated in our everyday lives – phones are not just used for phoning and texting, but for e-mailing, browsing the Web, setting one’s PVR, controlling devices around the home, retrieving context-specific information, e.g. by geolocation, time, social connectivity, etc.

What impact will digital technology have on our lives now and in the future?

If you look back at what has happened in the past 15 years, you can get some sense of how much our lives have changed since the advent of the Web. We can now turn on our phones, search for a service in a particular location, ring them up, and then go there in a matter of minutes – compare that with trying to find an unknown phone number from an unknown business name in a certain vicinity, and it’s just amazing how used we’ve become to instant information. We now see systems like Siri, the personal assistant for iPhones, allowing us to speak in a request and get an answer back – we’re going to become more used to automated ways for getting to the context-relevant information – through speech requests (show me flights from DUB to SFO tomorrow, what are the movie times near here, etc.), automatic suggestions of relevant (yes, really relevant!) content based on geotemporal information – and we will become used to accessing our asynchronous or real-time content through various interfaces (PC, TV, mobile, in-car systems, etc.).

Can you tell us how a company can get ready for new ways of doing business in a world permeated by digital networks and devices and social media?

Look at reports on emerging technologies, to be aware of what’s out there, e.g. the Horizon Report. It’s also worth looking at past reports to see what did and didn’t take off.

Rather than looking at what your competitors are doing, look to what your consumers / customers need, and imagine how the various technologies they use can help them to do whatever it is they need. It sounds obvious, because it is! Don’t just go on Twitter and Facebook and YouTube without imaging what an end-consumer will get from your social media presence or content.

Is geography redundant? What does digital business mean for business and Ireland Inc.?

I think that it depends on the product or service. Trust is a big issue for many still on the Web, and being local engenders a certain amount of trust, especially for high-quality / high-priced items. If the service is not local, trust can be boosted by having a sufficient amount of positive endorsements, where some of these are verifiable through examining the accounts that created them. However, cost is another issue, and if the amount of trust required for a certain investment by the customer is low but the cost is also low, then the risk may be enough to go with someone who is not local. For us in Ireland, where our population is low and we need to attract customers outside of the country, we need to look at how we can increase that trust, e.g. we could build on our social networking capabilities, linking to the diaspora outside the country, getting their support and recommendations so that we can compete with those countries that have the advantage of large populations and local trust.

(See also the question on future trends and my answer below regarding how we can use semantics to compete with other countries.)

What impact has digital had on what you offer your customers or clients, how you interact with them, and, perhaps most critically, how you lead and manage yourselves?

In terms of my experience with boards.ie, we’ve been a digitally-oriented business from the get-go, so having a means to interact with customers, get feedback / new ideas, put new functionality proposals out there and get a feeling for potential user acceptance, posting announcements, etc., has been part of our framework all along. However, I think it is good to maintain a balanced relationship with your customer base: take ideas on board, implement the sensible ones, give constructive feedback or at least a reason for not adopting others, and don’t wait for everyone to agree on a plan before implementing it, otherwise you’ll never get it done. You often have to gauge a response to a particular proposal and determine if the negative comments are sufficiently prohibitive towards this being a success. Another important thing to keep in mind is that you have to be flexible to change. If we hadn’t done that in boards.ie, we’d still be a gaming forum oriented towards geeks. Not that there’s anything wrong with geeks but we wouldn’t have had the broad-ranging impact if we’d said “no, that’s outside our remit”.

What type of company policy is needed for a company to embrace a digital strategy?

I think it has to be from both the grassroots and the top. If the grassroots are pushing digital acceptance, they will only get so far before encountering push back. There has to be some vision from the leaders that this could be (even if not “certainly will be”) a good idea, and a certain amount of enthusiasm to try something out. Of course, it’s often the people on the ground who know what the potential benefits of this could be, so for this to be accepted, some research into similar successes (even if in different domains) should be carried out for presentation to the boss!

What do you think of the “smart economy”, and its dependence on broadband connectivity?

The state of broadband in Ireland is still, years later, many campaigns and phone companies appearing later, a crying shame. I can’t get mobile broadband in the country, I can’t get cable or wireless services, I am totally dependent on my phone provider with hyped-up charges and low-maximum speeds. How can we encourage entrepreneurs to come here as opposed to other countries or imagine new media services being enabled over broadband if things keep crawling as they are? For the smart economy, we need to be wary of the environment (including infrastructure) as well as the incentives: disregarding pay / tax / grants, is this a good place to live for someone who wishes to contribute to our smart economy?

Tell us more about what you see as the next five online trends in the years ahead?

  1. Social networks become more integrated into the fabric of the Web. We begin to think less about Web 2.0 and the Social Web / social networks or the Semantic Web, and more about just the Web (thanks to Alex for this quote). We have the option to share what belongs to us wherever we want on the Web, not just in “walled gardens”, if we so choose (many may not want to).
  2. Real-time search becomes increasingly relevant as people ignore stale content from weeks or months ago. This content becomes available and more context-sensitive based on wherever you are.
  3. As the move to the bite-size culture increases, having relevant descriptions / content titles / metadata extracts becomes increasingly important for attracting that all-important click through from microcontent to full content.
  4. New interaction methods become more acceptable: voice control / questions, new interaction mechanisms à la Wiimote / Natal / touch surfaces (e.g. on TVs, cameras, etc.).
  5. Practical augmented reality applications become available, e.g. for property search, price comparisons and nearby product suggestions, event recommendations, etc. In particular, I like the applications like aircraft maintenance where the need to switch from the task at hand to a book of instructions is removed.
  6. There’s a move towards getting more people connected who just couldn’t / wouldn’t connect before now, e.g. kids and the elderly through iPad-like devices, instead of systems like Eldy on PCs.

(Oh, that’s six, oops!)

Who is the new customer in digital business? Discuss the issue of customer segmentation – is traditional segmentation dead?

Anyone potentially – through real-time search, serendipitous discovery of content, or friend recommendations – can be that customer. You may attract a customer in someone who didn’t even realise that such a product / service existed. That doesn’t mean that everyone is a customer, but just that there’s a larger potential customer base than would have been possible before the Web.

It’s similar to what’s happened for niche interests. Often, people would join a club, get a magazine, find some meetup in a letters page, and go to the event. But even after all that, there may have been no opportunity to meet with those really interested in one sub-topic (e.g. at an astronomy meeting, maybe no one is interested in 60’s spacecraft). With the Web, you can very quickly tap into a very specific niche group of interest. Some of the largest groups on the Web have very non-Web related interests: knitting patterns, woodcraft, cooking clubs, where sharing some aspect of the activity online complements the offline activity (boards.ie is a case in point: we had various gamers coming onto a forum to discuss the game itself and various online / offline events – this then grew as people started to talk about other activities outside gaming, and various new forums were created to facilitate this).

What are the revenue streams for a digital business – who is going to pay for it?

Subscriptions to additional services and advertising are the two main methods that work online, and these aren’t suited to every business.

You combine your entrepreneurial activity with an active programme of academic research – what does the future of the digital business environment look like? What are the future trends which people might have heard of but which they are likely to be grappling with in three to five years’ time?

The Semantic Web is the obvious one from my perspective. I don’t think that most people will ever need to get into the technical details of the Semantic Web – it’s simply enough to know that it’s a machine-readable version of the Web that allows computers to use extra information (or metadata) about the things described in web pages: people, blog posts, recipes, etc. So, as an example, search results at the moment are starting to change a little. Before now, it was just titles, short page extracts and hyperlinks. Now we’re starting to see additional bits of data about the web page or content of the web page being embedded in search results: ratings from reviews, number of comments on forum posts from boards.ie, etc. – and this can come from semantic metadata supplied by the site owner. It can be done automatically – people are automatically adding this metadata to much of the content they create on the Web or Social Web – it’s just a matter of making it available in standard form for reuse. Google and Yahoo now have guides showing webmasters how to do this (here’s some related slides I presented recently in DCU).

For example, Best Buy, a large electronics store in the US, reported a 30% increase in traffic to their pages after adding semantic metadata to their product descriptions.

We should be looking to solutions like this to help us compete in a global Web economy. If we can enhance our product listings with third-party reviews and ratings, all tagged with metadata for reuse by search engines, we can help with clickthroughs to our services and thereby compete with international players.

In NUI Galway, one of the de-facto standards we’ve created will be part of the next Drupal content management system, a publishing platform that is used by hundreds of thousands of organisations ranging from the White House to Warner Bros Records – when this version comes out in the summer, anyone who installs or upgrades their Drupal installation will join the Semantic Web, and will potentially publish additional metadata that can enhance search result listings.

We’ll also become more used to collaborating with others or getting access to our stuff from the Cloud. A lot of the apps we use now are in the Cloud: Gmail, social media content serving, backups, etc. We expect to be able to access the same content from any device, e.g. as Evernote allows us to interface to our notes from the Web, the desktop or mobiles, we will see more services migrate to this model – from home videos to health records to voicemails. I’ve a bit more on this here.

How should we understand the customer in the digital space and can we manage them? When we talk about digital business there appears to be many contradictions. On the one hand, we have the idea that the fundamentals of business are the same, market segmentation, pricing, product management, with the sole provision that the only thing that is different is that consumers have more information and thus power. Then we have this new power that consumers wield, unleashing hell in categories like music, newspaper publishing and book retailing.

First of all, I’m not sure if the fundamentals are the same. Segmentation doesn’t make sense – certainly, targetting products or services towards those you expect will want them makes sense still, but you can still publish your wares for all to see in case the friend or cousin or acquaintance of someone else who is interested in your wares is kind enough to send on that information to that someone else, even if they themselves are not interested in it. And as mentioned earlier, if you “don’t know that you don’t know” something, you maybe happy to find out about something that you didn’t know about and consider it for yourself. For pricing, again, different models apply online as I understand it – through radio / TV-to-web campaigns, you may treat that differently to a direct clickthrough campaign.

The consumer has a greater range of options, but they will still tend towards the options that they trust: those backed by a big name, recommended by friends, in a certain locality, etc. The three areas that you’ve highlighted are probably still quite related because they refer to media items that are quited suited to distribution by digital means. You could also say the same about comics or DIY magazines – they just attract less attention than books, music or papers which were more omnipresent in the past (similarly, blogs and podcasting have received widespread attention in the media in the past as being the death of papers and radio; forums escaped comparisons to the death of town-hall meetings or club meetups!). But then there’s activities / products / services that don’t translate to the digital space: stamp collecting (can be augmented by the Internet, but the Internet can’t replace it), live concerts (nothing can replace the experience), or hair transplants (well, maybe a “you’ll then look like this” would be handy). Some stuff translates almost completely, some stuff can be augmented by the Internet, and some stuff may not match very well at all.

Is it possible to build a digital business of scale? One of the biggest challenges facing start-ups is that of scaling. How can start-ups in the digital space build first the relevance then the credibility needed to drive scale?

You can only grow a presence from scratch through interacting with others, providing new content or links to existing content that you think will be relevant to those in your community, and by interacting not just with those who interact with you but with like-minded others who may be happy to spread your word to others: think induction and homophily in online social networks (the first refers to others using terms of those in their network, the second refers to the tendency to associate with like-minded others).

If you’re selling bicycles, set up a social media presence that shows you not only sell stuff but are interested in the greater community of bike fans – posting news snippets, community updates, responding to questions on bikes by other people, linking news / feed readers to your social media accounts for posting interesting links / photos / articles, etc. Send out calls for suggestions for your shop and its online presence, make the customers feel like they are influencing your choices (and let them influence some of them if they make sense!). Social media can be used to augment (if not replace) the promotion mechanisms of various organisations, from promotion of the research and development of new technologies to highlighting a computer sale in a particular geographic region.

Regarding building an Irish digital business industry – as we crawl out the crisis, one of the shocking things is that we have relatively few globally competitive indigenous firms capable of growth and keeping the financial benefits in Ireland. Am I wrong to think that we should be looking at ways to encourage entrepreneurs to keep their business? How is funding different in the digital sector?

Digital assets are somewhat different from other types of assets, but they should also be valued appropriately. It’s important to attach correct importance to one’s virtual assets: one’s internet brand, one’s community and one’s data in a digital business. This is something that conjurs vague and inconsistent formulas of worth, but it is important and something that has really just become important in the past 10-15 years. Purchasing such assets is difficult to justify in a bank loan, so some guidelines to help those in Ireland with evaluating virtual assets in the digital sector would be helpful.

As regards helping entrepreneurs to keep their business, if you mean, keep it in Ireland, again, I’d look beyond the tax benefits and towards something highlighted at another event (the Dublin Web Summit) recently: how cool is it to be in Ireland? If I had to pick a place to live, it wouldn’t be based on tax or the cost of living (unless it was prohibitive): it’d be based on the coolness factor, because it’s not just for you, but the people you’ll employ / work with – and of course, it’s hard to measure cool, but it’d include facilities for transport, broadband, entertainment, dining, socialising, etc.

Some videos from the Digital Landscapes event are linked below. Tom Murphy has also written a nice piece emerging from John Herlihy’s comments at the event.

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