Humans are social animals. We need to be with other humans. We need to share information and collaborate. We need to be connected.
Despite the fear that technology would isolate us, it is actually doing the opposite. We can now be connected all the time. It won’t be long before being “offline” will cease to exist as everything we own from thermostats to cars to communication devices are virtually (and literally) connected.
Being able to stay connected day and night has changed how firms are doing business, and particularly changed how they view advertising.
David Rowan, editor of WIRED, spoke at the recent annual conference of EPRA (the European Public Real Estate Association) in London. He provided example after example of how collaboration and connectivity have exponentially accelerated the growth of companies and changed how they market and advertise.
For example, WhatsApp spent zero dollars on marketing and advertising. Instead, it relied solely on social media and word of mouth to grow its user pool, which was paid subscription-based because the founders didn’t want to rely on ad sales to fund the app. Within four years of its founding, WhatsApp had more than 400 million monthly users. (And to reiterate — this wasn’t a free app. Users had to pay to become subscribers.) In early 2014 it was sold to Facebook for $19 billion, and its monthly usage has grown exponentially to 600 million.
Other examples of the speed at which businesses are evolving:
- Deepmind is an artificial intelligence company founded in 2011. Its goal is to understand the human mind and how intelligence works. Despite not having a product, Deepmind was bought by Google in early 2014 for $650 million. (I’m sure Google, which isn’t opposed to paid ads, sees the economic advantage of understanding how people think.)
- It took Hilton four decades to grow to 650,000 hotel rooms under management. Using social media, Airbnb grew its rental network to 650,000 units in just four years.
- What used to be the prerogative of governments has also changed in the blink of an eye. For example, Bangkok protestors used their own drones to override the government Internet blackout and broadcast what was happening to social networks worldwide.
- Funding projects is no longer centered in the hands of a few. Kickstarter has taken the funding power and introduced democracy.
Rowan was pretty clear. Change is now exponential, not linear. Business owners must learn to work faster, smarter and more collaboratively. If they don’t, they’ll be left behind. Netflix has derailed Blockbuster. The failure of management to embrace smartphone technology has proved to be Nokia’s Achilles heel. When Facebook was paying $13 billion for Instagram, Kodak was filing for bankruptcy. The examples are endless.
Rowan ended his presentation with four principles for success:
- Design for connectivity
- Collaborate to add value
- Move quickly
- Don’t get in the way of customer expectations (have frictionless interface)
Of course, if all one had to do was adhere to four principles to succeed, we’d all be selling billion-dollar businesses to Google and Facebook (though it would probably also help if we were all 20-somethings who are able to work day and night with five other people in an old warehouse for a couple of years).
So we can probably agree that following these four principles will not guarantee you a successful business. But in today’s world, not following them will probably pretty much guarantee you an unsuccessful business. That makes the decision on what to do pretty easy.
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Sheila Hopkins is managing director – Europe and infrastructure with Institutional Real Estate, Inc.
