Hello - The Future is Calling

by Steve McKee

Ninety-eight percent of American households have telephone access. Over the past 130 years, this once-revolutionary device has become so ubiquitous that we don't realize how much of our modern lifestyle has been built around it, from ordering takeout to scheduling doctor appointments, from responding to polls to hanging up on telemarketers. The telephone is something that we - as consumers and as marketers - have always taken for granted.

Not so anymore. Research from the Centers for Disease Control and Prevention now says that for the first time ever, cellphone-only households (20%) outnumber those with landlines alone (17%). And the trend towards wireless is gaining momentum. Nearly one third of 18-24 year olds live in households with no landline whatsoever, and - in a finding that seems odd on the surface - wireless-only households are more likely to include the poor, many of whom made the choice to eliminate their landline bill during the current recession.

This is a radical change with significant implications, not only for pizza makers and Yellow Pages companies, but for all marketers. Among the new dynamics:

• The telephone is no longer a device tied to a household, but to an individual. That opens up a world of personalization, from packaging (my wife's cell phone cover is pink) to performance (my daughter has a different ring-back tone for the weekend than the one she uses during the week) to pricing (there's a payment plan to suit just about everyone's needs).


• The telephone (and the telephone number) is no longer a place-based device. Marketers that once relied on area code information to determine the location from where a customer was calling now can't be so sure, as members of our increasingly mobile society take their cell numbers with them wherever they relocate.


• The telephone is no longer just a telephone. Two-way voice communication has now given way to multiparty, multimedia (and even satellite) access, making the ability to speak to someone on the other end just one rather quaint feature. You may even be reading this blog on your phone.

Most of us are content to let the Apples, AT&Ts, Motorolas and Verizons of the world think about where this once single-purpose device should go next. But as my firm has discovered in working with clients in a variety of non-telecommunications categories, we can't be content to let the future come to us.

With each technological advance comes new obstacles and new opportunities, and brands that pause to consider how they might leverage them are likely to find competitive advantage (and in some cases completely redefine the playing field).

Do you suppose there's an iPhone app for that?

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

Twitter Devices and Business Model Design

Industrial Design, Busness Model Design And Design For Change

by Idris Mootee

I was chatting with some members of our design research team just yesterday next to the cooler the other day. We were talking about how the iPhone is such a bad phone and a great media player, and the Backberry is such a great email gadget but a terrible browser. The conclusion was that phones were not designed to handle the 'social' functions and so they are just add-ons. What does a true 'social' gadget looks like? I will ask our design team to come up with some crazy ideas and I'm sure our clients will love to see them.

As more and more people use Twitter or Facebook as their core communications vehicle, what are the best gadgets designed for that? Is there a gadget that lets them tweet, reply, retweet, send direct messages, and connect with followers easily?

Here comes the Twitter Peek which sells for $99 or $199 (with service plan). But, users can also view TwitPics by clicking the "view content" option from the Twitter Peek menu. If users choose to pay $99 at the time of purchase, they will get the Twitter Peek device and six months of Peek service. After that, they need to pay $7.95 per month for network access. If customers plunk down $199, they'll get the device and service for the life of the product. In either case, Twitter Peek allows for unlimited tweeting. It has one key limitation - it can only support one account at a time.

An important industrial design discipline that they teach in school - Do we design something for a singular or more important function or something that does everything?

The preference is to design something with a purpose in mind. Is the Twitter Peek really necessary in the marketplace? Or do we need a Facebook device?


The deep satisfaction of design is when you find an elegant solution to a problem that has, until now, had a hindering effect on our quality of life (or experience or environment). The function should be super obvious - a straightforward solution to a meaningful problem. But, it is not that simple.

Industrial design is understood to be a part of engineering design, or as running parallel to engineering design (and increasingly interface design). However, when industrial design activity is engaged in the more aesthetic or style concerns of a product, it can be understood as running parallel with marketing and brand activity. And when industrial design is engaged and running parallel with business strategy activity, it becomes a very different game.

There is not a right or wrong or simple answer here, there is a lot of room for ambiguity and misunderstanding and many designers are confused about design themselves.

Many designers love to talk business model design, but I'm not sure how many are qualified to discuss this subject. My experience is that even among MBAs that I have hired, anyone with less than ten years of solid experience doesn't understand the real implications of these business model discussions.

My response to them is:


"How exactly do you change a business model without understanding the industrial and distribution economics and the individual players' competitive dynamics? There is always game theory at play in these moves."


One interesting thought is that traditional industrial designers came into being as mass production raised output and producers wanted to match market demand. This is still true, but not entirely the case. If industrial design comes within a marketing function and marketers buy the creative services of an industrial design consultant on an occasional basis for a special project, this is quite different than if industrial design is a part of the manufacturing function. And if industrial design comes within a strategy firm and executives buy the innovative services of a firm that has strategy + design capabilities (like Idea Couture), then it is part of the corporate strategy undertaking. That's design thinking in action, not design talking. Am I confusing you?

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Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Hulu Fast Becoming a Key Part of a New Industry Architecture

by Idris Mootee

Here are pictures of the Idea Couture team running several days of long sessions at the MIT. Jeff, Partick, Adam and Cheesan were happy with the progress to date and I am so looking forward to see the first milestone. It is just a great project and a great client/partner. Everyone is excited.

While we are on MIT, I came across some early research from MIT Media Lab on "Emotionally Reactive Television", it is a very interesting concept. The idea was from the time TV was created, watching TV is considered as a static activity. TV audiences have very limited choices to interact with TV, such as turning on/off, increasing/decreasing volume, and traversing among different channels. The working thesis is that TV program should have social responses to people, such as affording and accepting audience's emotional feeling with the growth of technologies. This paper presents HiTV, an Emotionally-Reactive TV system using a digitally augmented soft ball as affect-input interfaces that can amplify TV program's video/audio signals. HiTV transforms the original video and audio into effects that intrigue and fulfill people's emotional expectation. This is a super cool idea.



Some people think media should all be free. Just imagine a world where every form of media as we know is accessible for free. Is this the future? We're reaching an industry breakpoint in the world of media, fight between pirates, broadcasters, entertainment labels, demanding consumers heats up, the stakes will get higher, and higher.

The convergence of PC and TV will accelerate. I've participated in debates and forums around the three screen convergence scenario in the telec industry. That means one provider who can deliver a converged/integrated video/entertainment experience to the TV, PC, and mobile device. This is the telcos' dream. The idea is, you're watching something on your TV and you have to leave, you can continue to watch it on the go or so you pause it. Is this something we all wanted?



Analyst Laura Martin (Soleil Securities) crafted a worst case scenario for broadcast media. Martin believes Hulu will wipe out the network television business as we know it. In a recent report, she estimates that the online video hub will cost TV networks $920 per viewer in advertising if their audiences are cannibalized by Hulu. She believes the bulk of viewing on Hulu is indeed taking eyeballs from TV. It definitely makes some sense but there are still many wild cards.

Earlier In May she warned that the entire $300 billion market valuation of the television industry is threatened by the shift of programming from TV to the Web. Spearheading the overthrow of TV-as-we-know-it is Hulu, the premium video site backed by NBC Universal, News Corp. and Walt Disney that offers content from the 120 partners. Martin is very confident that Hulu will succeed in the long term. With more than 38 million monthly viewers who watched 457 million streamed videos, it is 6th-most-visited video site, ahead of competitors like AOL, CBS Interactive and the Turner Network, according to comScore.


Hulu is seeding the value migration for its TV network creators as more content that becomes available on Hulu, the more likely it is that consumers will cut the cable cord altogether. Together with that trend is the less attractive economics of online video to advertisers, which offers higher CPMs but fewer ads. The industry estimates that Hulu runs four ads each hour at a $50 CPM compared to 32 ads during each hour of programming on TV at a $35 CPM. ($1,120-$200 = $920). Hulu did not disclosed actual ad sales or ad rates.



The TV everywhere idea is not new. Except it is getting real. I am not sure if it is so simple. There is a lot of uncertainty about the speed of deployment of new technologies and services, and of their adoption driven innovative user experience design. Hence the implications for spectrum demand and management of all these changes are far from clear; and convergence raises the fundamental question of whether current service definitions will make any sense by the end of next year.

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Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

An Internet Innovation

by Drew Boyd

Imagine a Web site that detects a visitor's "thinking" style and "morphs" its look and feel to suit that visitor's style? Professor Glen Urban and his colleagues at M.I.T. describe an approach in the Sloan Management Review article, "Morph the Web To Build Empathy, Trust and Sales."

They collaborated with BT Group, a UK telecom company, to create a Web site that learns whether a person is more analytical versus holistic, and whether the person is more visual versus verbal in how they process information. Once the Web site learns this (based on a few preliminary clicks on the site), it adapts itself to present information in an optimal way:



This is an excellent example of the Attribute Dependency Template, one of five templates in the Systematic Inventive Thinking method of innovation. Attribute Dependency takes internal and external attributes of a product or service and combines them to create new dependencies (or break existing dependencies). With Web site morphing, for example, the two attributes that have been linked are:

• Web site appearance (an internal attribute)


• Visitor's Cognitive Style (an external attribute)

Dependencies can be passive, active, or adaptive. Passive dependencies are static - they don't change once they have been established. Active dependencies are dynamic - an attribute changes only when another one changes. Adaptive dependencies change the way they change. In other words, they learn as they go. Attribute Dependency is a great tool for creating "smart" products - those that know and adapt to user preferences or environmental conditions.

Does Web site morphing work? The MIT researchers report that Web-originated purchase intentions for BT's broadband service could increase 20% after morphing the site to match individual cognitive styles.

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Drew Boyd is Director of Marketing Mastery for Johnson & Johnson (Ethicon Endo-Surgery division). He is also Visiting Assistant Professor of Marketing and Innovation at the University of Cincinnati and Executive Director of the MS-Marketing program. Follow him at www.innovationinpractice.com and at http://twitter.com/drewboyd