Digital / Social Transformation = CRM = Big Data (About Old Wine in New Bottles, Darwin and Levitt)

My biggest comfort reading STILL is Enid Blyton’s books. I was reading one the other day, and realised that the word “gypsies” (In Enid Blyton’s debatably bigoted world, Gypsies were the bad guys – generally robbing and stealing!) was now replaced by “travelers”! (read this article on changes to Enid Blyton’s language)

It started me thinking on how concepts evolve with time – and how they get nuanced depending on context.

Look at our world of Social/ Digital Media.

First there was listening, then there was engagement, ofcourse then people started talking about ROI, then folks started talking digital transformation…and now about social integration.

Its a fairly normal evolution – you take piece parts of a whole process, and start attacking it from small angles, then the small piece parts coalese to form a larger part – which you can then make sequential evolution like a process. Then you bring the whole piece together and start talking the big picture – till you then leapfrog into next level applications etc.

We saw this in devices – the whole unification piece arising out of networking -> convergence -> wifi. (I did write an earlier piece on this). The world view that arises from this is that of the super connected/ “always on” world.

The good news though with the whole social/ digital piece is that after a lot of “wandering in the wilderness” and marketers and the C Suite looking upon it as the new kid on the block and not “real” marketing; then viewing it as stand alone another element in the marketing mix; now most folks are realising the ubiquitousness of the medium and figuring that “social business” is almost a way of life – for people personally, and therefore for enterprises. This is leading to integrated social marketing in the true sense of the word. Brian Solis’ Conversation Prism is a good example of a visualisation of an integrated world!

Evolutionarily, it first started with social media integration tools – how do you cross post/ make sure you don’t replicate/ undertake SEO for your Social Content etc. A look at some of the tools for this can be had here . But now you have some interesting campaigns that truly integrate many diverse elements so the consumer sees ONE brand/ ONE entity – and so do the employees – and so do the vendors/ suppliers and other stakeholders!

The case with Big Data is a bit similar. While it is greater volume/ velocity/ variety, it is ultimately about crunching vast masses of Data – something that actually gave rise to computers!! Also, if you then start looking at its applications, its the same ole same ole (old wine in new bottles) – CRM being a BIG one. So, ultimately, Big Data helps you compute, quickly and cheaply, thanks to the cloud.

The point, however, is, that its no longer smart to talk “Computing”, or even “Analytics” – you say “BIG Data”; just like you no longer say “Listening” – you say “Digital Transformation” (I’ve seen some folks calling it “Social Integration”, but as the economists and social scientists would know, THAT is more about social/ cultural amalgamation of immigrants into their adopted mileu :).)

But, think about this evolution – Darwin and his theory of natural selection actually applies to the technology/ data front as well! (For those who have forgotten Darwinism – I found this cute animated video tutorial – a bit long, but a nice refresher!). It basically states that living organisms evolved through a process of adaptation to surroundings, following “survival of the fittest” – hence, while computing is still the fossil, Big data is the evolved mammal. I did on my favourite facebook page I fucking love science today see a picture of this amazing fish – which is amphibious!

Coming back to business, in a way Theodore Levitt and his concept of “Marketing Myopia” – implied a bit of an evolutionary path too – from photo paper to duplicating machines to business process and document management (Xerox); from Time Keeping and Weighing Machines to Smarter Planet (IBM); from Petroleum to Energy (Shell); From Fast Food to “I’m Lovin’ It” (McDonald’s); from making movies to “entertainment” (Hollywood) and from paper to “connecting people” (Nokia). It was about evolving your business/ broadening its spectrum to serve your consumers’ basic needs!

You think about it then – concepts evolve, just as language evolves (etymology being the science of how words evolve – just so you know, “Digital” – seems to have taken the following path : “of or pertaining to a digit or finger” –> “resembling a digit or finger” –> “manipulated with a finger or the fingertips eg a digital switch” –> “displaying a readout in digital form”

To wind up, think about some stuff that used to be called something else in the olden days :

Motivation = gamification
Beauty parlour = Salon
Step cut (a particular hair style) = Layers
Fund raising = Crowdsourcing
Bribery = Lobbying
Plagiarism = Research 🙂

Some that have changed with the technology: (These are called retronyms):
Phone –> From Landline to mobile
Guitar –> To acoustic/ electric etc.

Some where our influence changed (in India, that implies becoming more American from being more British) or we became more politically correct/ less racist etc..:

Biscuits = Cookies
Toilet = Washroom
Merry Christmas –> Happy Holidays
Negro –> African American
I’m fine, thank u –> I’m good

In the end, evolution notwithstanding, look at where Homo Sapiens has got to, thanks largely to digital/ big data etc etc:

StartUp Dilemma 2 (When to take investor money/ Bootstrap or Fund)

So i heard yesterday about this group of really smart people – with great pedigrees, who are collaborating to start an online business in baby products.
I think because of the pedigree and the smartness, they got a million dollars in funding.
Now, 6 months after raising the money, it’s sitting in the bank – and they don’t know what to do with it. To top it, their investors, who got large amounts of equity fairly cheap, now are looking to “grant” their second round of funds – and the founders are faced with dilemma of not wanting to part with more equity!

Classical case – strikes at the heart of when to get funding/ what kind/ multiple sources or single etc etc…(Came across a nice article on the different kinds of funding/ when to use/ typical funding cycle etc here for those looking for some advice)

In the interest of full disclosure – I have to state here that in our company – (not technically a startup – I recently figured that in common jargon, startup is used for a tech product company – though wikipedia seems to vindicate my earlier definition; and mine was a services set up) – we deliberately and by conscious choice stayed away from investor funding, though many came calling, for 8 years, at the end of which we made a strategic transaction.

As we saw it, the reasons we would have wanted money/ the triggers which made us even think about money were:

a) Sales Headcount: When we were about 3-4 mil in revenue, and wanted to scale the business exponentially – we figured sheer legs in the markets would help. Plus, none of the 4 of us founders were core Sales People ( i reaised after i wrote it – that i had capitalised the sales people! telling, i think 🙂 ) by profession really – certainly not of the B2B variety – so it would have been nice to have rainmaker salesmen (yeah yeah, i know there are only about a cple hundred of those in the world 🙂 )

b) Technology infusion: We had started as a very manual services oriented media research and analytics firm. However, being in the right place at the right time helped – since we discovered and rode the social media bandwagon; and that helped create a nice niche. Only problem – this was a very tech heavy field – in the beginning we worked with bits and pieces of shelf bought platforms – but we soon figured that to create proprietary IP we really needed some software – even though we would always be the “software aided human services” side of the spectrum. This needed money – more cash than regular working capital

c) Operations facility – Like all garage mode set ups, we had had fairly unglamorous working areas – (as one prospective/ wannabe strategic investor long ago told us when he came visiting – “i can see that you run a lean facility” – being euphemism for – “gawwwd, this place sucks!”). But this was less pardonable for us than for many others since we were in the people business – and that too in Bangalore, which has many spanking glass and chrome offices! So it wasn’t a product company with potential payoff for a very few like minded people; but a services set up. And, because we were pretty much pioneers in the outsourced space for media research, we couldn’t hire from other places – we were home-growing our talent – but it did mean that other places could poach easily from us when they wanted to develop these same services – with the lure of better moolah, but also better working facilities. (As one employee told me when I was trying to explain lack of ACs in every room – ma’am, pls don’t say we are a startup – you are not one any longer, and even if you are, we dont really care!). So, while it wouldn’t have ever been the main reason to get money, if we did get it, we would have liked to get some nice work space 🙂

d) Again, while not the primary reason, there was a part of us that said that if we did get some kind of financial transaction going, we founders may like to cash out to some extent – after all, our skin in the game was really the opportunity cost of our salaries for a long long time – and it would hv nice to have some money for a change…

e) To us the most attractive reason to get into any kind of partnership actually was not so much the money as the channels it would open to us – it was such a new area that to convince clients that this was a viable means of solving their problems just took sheer facetime/ calling and contacts…

See some other folks’ reasons for why formal funding makes sense here

But, we stayed self funded and therefore away from even progressing talks to next rounds due to the the following reasons:

a) First of all, since we were a services ie not capital intensive company working in an offshored model, we didnt really need money to run ops – we had started with a fairly variable cost model (see earlier post), and almost before we had started had a “sponsor” client – so we were positive cash flow from day one.

b) We were already 4 partners so had smaller portions of equity plus some we had carved out for senior members – so we were a little averse to the idea of giving away more equity – i have to confess that here there were minor differences sometimes in the way the 4 folks looked at it – with each of us placing different values on equity vs. expertise 🙂 but we managed to reach consensus

c) Most importantly, it was for us an issue of control – we had trouble enough navigating the waters of 4 masters – imagine the scenario with more bosses added on! As Debjani once said, we are on a fast enough treadmill – if we add an investor we will have to jump hoops and land on a faster treadmill! At that phase we were getting combined amongst all of us maybe 10 hours of sleep a day – the post money scenario made us shudder!

See another entrepreneur’s summary of his experience here

So, to come back to the issue of start ups who do need money – whether because it’s infrastructure (though the cloud has made that so much easier/ cheaper now) or marketing (again, thanks to social media and the like, there are low cost options available now) or enable next round of growth by creating/ adding to facilities or just to tide them over bad times; be very careful that you do need the money, and what the trade offs are before you go ahead and ask for it. Also, ofcourse everybody will advise you on the pitfalls of getting funding – read here for some more. Add to that the fact that nowadays, with facebook fall from grace, apparently VCs are getting wary of funding en masse, specially affecting Series A funding – see here

Which basically then comes down to the following:
There isn’t necessarily a surefire formula for success – the foremost thing is to focus on creating your product/ service, and selling it – if you can do this to a threshold level without extrenal funding, so much the better. Remain true to why you became an entrepreneur first, and what that means to you – is it messing around with code in your garage; managing many people; selling your dream to a potential client, or hobnobbing with the suits (looks like my prejudice is coming through, doesn’t it? 🙂 ) – the best thing to do is go by your vision – if you really want the money, in general if yr idea is good and ur team if good, you’ll get it some way…..Go figure!

Social Media for Supply Chain – Laggard? Deserves to Be?

Its a fact that for service companies, most innovation is triggered and developed due to client demands. This was really true when I first tried to find out applications of Social Media Listening and Analytics in the Supply Chain area.

Despite having evolved and demonstrated many applications for this new medium in Healthcare and Pharma, in CPG and even in Financial services, i wasn’t expecting any applications in Supply Chain – after all, this is a fairly evolved science now – thanks to the likes of Wal-Mart and P&G/ Nike, with many enterprise platforms enabling flow of data to enable real time knowledge, and thus optimization drives. Also, as most folks believe, Social Media is largely a B2C concept (infact, in most peoples’ minds, it is really only facebook and twitter!)

Not true, and far otherwise!

The first use that professionals in supply chain functions can derive from Social Media, is no different from that other folks can – this is the benefit of “listening” – to keep abreast of trends, to catch any “early warning signals”, to track potentially viral news that could affect their/ their competitors’/ their suppliers’ fortunes. After all, in the much documented Washington earthquake case from (i think it was) 2010, news of the earthquake reached other centers far before it had been expected – due to twitter!

An allied use is that of fuelling innovation, or even problem solving. Case studies of how companies are using crowd sourcing to build a pipeline of R&D ideas abound. Rather than abstract ideas with unrelated people, crowd sourcing can be directed at a fairly focused/ targeted set of people via communities, and thus ideas generated or solutions received are more relevant. Solution Xchange is one such problemsolving/ brainstorming portal.

Having said that, the cases above are more traditional/ and generic. But, the true power of social media lies in the collaboration that these social technologies enable. And that actually lies at the heart of the best use case of Social for Supply chain. Think about this – real time platforms on Lithium or Jive, connecting instantaneously vast armies of suppliers and buyers, and also customers and all the intermediaries – to enable knowledge sharing and collaboration within these communities. The naysayers would say – but we already have our EDIs – we don’t need other/ multiple platforms. The point is, EDI shares DATA. What it doesn’t share is OPINION or JUDGEMENT. And, true information is made out of data + judgement. In addition, in today’s world, competitive differentiation is very often achieved by the SPEED with which u are holders of information. This is what social technologies enable – that split second expert judgement (backed by data of course) that says – shipment will be delayed! Cisco has done this well – they built an internal/ quasi external portal connecting thousands of their stakeholders, enabling quicker and much more cost optimised supply chains.

A better word for the above could be better SRM – supplier relationship management. You can build so much social intelligence around suppliers — infact, taken to extremes, this could spawn bidding/ sharing platforms similar to e commerce ones in the B2C world!

The final, and most interesting use case (to me) is in logistics – how 3PL firms are using social networks for better knowledge and information management. Con-way is probably the best example. They launched, back in 2011, their twitter platform – Tweetload. This published every 15 minutes the available loads, and carriers can bid on the loads to optimise consignment. Clever, isnt it?

So, the issue is not about how useful Social Media is/ can be for the Supply Chain function, it is : a) how do we choose the parts that are useful and b) can we create that ONE platform that is customised to the needs of the SC professionals – just as facebook was to the university student.

If someone can show me the vision for it, i may even help fund it 🙂