After 18 months, my life as an expat has come to an end. In January, I’ll be returning to the U.S. as CEO of The Barbarian Group.
Some final observations on life in Korea:
Everyone has a mobile; everyone is on KakaoTalk.
KakaoTalk is a way of life, just for communicating with friends, colleagues, clients, and beyond. The app auto-adds users based on numbers in your phone, so I ended up with friends ranging from the CEO to the lady who reads my gas meter.
Korea is rewriting history, literally.
Koreans are proud of the rapid ascent of their economy, especially after the 1998 IMF crisis. The phrase “never been done before” is one that’s often used to describe the country’s recent history, the only nation that has gone from IMF loan recipient to donor. However, these days history is being revised as history textbooks are being rewritten under government supervision. Everything moves quickly and changes often here, not just pop culture and fashion trends.
You keep using that word; I do not think it means what you think it means.
A lot of English words have made their way into the Korean language, mostly because there aren’t words to describe unfamiliar objects or concepts. A few in particular that took some getting used to include “service” (in a restaurant, getting something for free; not being waited on), “digital” (something new; not necessarily tech-based), and “beyond” (more; not an evolution from, but more akin to incremental progress).
So long, coffee shops on every corner. So long, paying on your way out at restaurants. So long, ubiquitous high-speed internet. So long, televised EPL and MLB games featuring Korean-born players. So long, yellow dust. So long, Für Elise alerts. So long, heated toilet seats. So long, Seoul.
(For earlier posts in this series, read the Minority Report.)
During the dot-com boom of the late 1990s, it seemed like everyone who worked at a “traditional” company was waiting for the right opportunity to leave and join a startup. Many did. For example, George Shaheen left Andersen Consulting to join Webvan. Lou Dobbs left CNN for space.com. They wanted to be like Jeff Bezos, who had left a job in investment banking five years earlier to start amazon.com.
It’s happening again in the social era. Perhaps Sheryl Sandberg should be our archetype, having departed Google for even bigger and better things at new-economy company Facebook. Individuals are getting rich quickly again and a lot of people want in on the action. Plenty of people are leaving agencies in search of unicorns and startup riches.
2. Capital Contagion
In Michael Lewis’s 2012 book Boomerang, we learn about how national economies are connected on a global level, hearing stories from Greece, Iceland, and Ireland leading up to the 2008 recession.
The lesson should be obvious, but in case it isn’t: despite nationalist pride, economies are all connected. Even after 2008, we learned in summer 2015 that a Greek debt default would still have hugely negative implications on the Euro. The decline of the Chinese stock market and yuan devaluation also sent ripples worldwide. America is not immune.
3. Who’s the boss?
In 2010, my Austin, Texas-based startup held a meetup/recruiting event at a Rainey Street bar. About an hour into the evening, I met a guy named Caleb who was quick to mention that he knew all of our company’s executives and investors. Later, he started ordering people to get him drinks because he was “their boss.”
It turns out that Caleb was a junior accountant with the Teacher Retirement System of Texas (TRS). TRS is one of the largest pension funds in the U.S. and like many others puts its capital to work in venture capital funds. Although TRS wasn’t even an investor in the Austin Ventures fund that bankrolled my startup, we invited Caleb to subsequent parties for comedic value. He never showed up again.
4. What, me worry?
Startup fever is at an all-time high, driven by greed, envy, and ego. Pride comes before the fall and lately companies are trying to back down before it’s too late.
However, even if you’re an “Underground Man” and find solace in not having wasted your time and energy at a failed startup, don’t get smug too soon. The ripple effect of a dying unicorn to venture capitalists to fund investors to individuals seeking returns for short-term income rather than long-term growth will impact you and the economy that you live and work in, regardless of nationality, industry, or speciality.
China’s stock market has been in global headlines for the past two months as share prices have lost all of this year’s gains and uncertainty remains over what lies ahead. A financial crisis in the world’s second largest economy certainly warrants the attention of marketers, who must determine what impact the situation might have on their brands and regional operating strategy.
In Chinese, the word for crisis is “危机,” or “weiji.” The word is a combination of two characters: danger and opportunity. The current crisis in the Chinese stock market illustrates the need to take both perspectives.
Danger: 危
On one hand, it would be easy to dismiss the current situation as a fringe concern, only impacting the cash flow of small number of investors. After all, according to some estimates only one in 30 Chinese citizens owns stock. Despite the portrayals in Western media of novice day traders: retirees, at-home parents, and office workers on smoke breaks, only a small percentage of people have actually lost money. Even new investors who have only been in the market since the start of the year are back to break-even. However, there is real risk lurking beneath the surface: Chinese consumer confidence might drop in response to the market movement, resulting in fewer goods purchased and triggering a long-feared economic slow-down. Moreover, with the recent devaluation of the Yuan, foreign brands have suddenly become relatively more expensive in China. This double-threat danger to brands requires revisiting growth forecasts through the end of year and for 2016 planning.
Opportunity: 机
However, smart brands must seek the other side of crisis, which is opportunity. In recent years China has been the largest contributor to global GDP growth and remains a market with huge potential for foreign brands. “Singles Day,” coming up on November 11th, is still the world’s single largest e-commerce sales day and twice as big as the U.S.’s “Cyber Monday.” Chinese social network services (SNS) are still growing and more active than ever, as evidenced by discussion of current market events; brands must still determine how to incorporate Youku, Weibo, and WeChat into integrated communication strategies. Finally, e-commerce giants have started to expand beyond borders, offering foreign brands easier access to China’s US$670 billion e-commerce market. For example, JD.com has started to open locally-focused portals in countries like South Korea to facilitate the distribution of small and medium brands into the Chinese market.
One lesson that we have all learned over the past decade is that any country-focused economic crisis can have a global impact, whether Iceland, Greece, or now China. With the lessons of history in mind, marketers should to keep calm and carry on…with caution. By keeping a clear head and being ready for quick action, brands will be able to benefit from both sides of this crisis, minimizing danger and maximizing opportunity.
[An edited version of this post appeared last week in Marketing Magazine.]
Today marks one year of living in Seoul. To update some thoughts from my first month here:
A lot more Instagram, a lot less Twitter. Snackability applies to posting and to reading.
It’s been interesting to see censorship in the media and how freedom of the press is limited in South Korea. For example, when the government refused to release the names of hospitals involved in the MERS epidemic, rumors filled KakaoTalk and message boards. Eventually, citizens created their own “MERS map” mashup to spread information that institutions wouldn’t. Native advertising / sponsored content is typically not called out either.
It’s still tough to get used to the price of coffee.
Traffic is awful. One of the reasons traffic is so bad in the city is that double parking happens everywhere. The police never seem to ticket violators (perhaps it’s not actually illegal). Taxis are the worst offenders. They wait anywhere for a fare; a popular spot is in the middle of crosswalks.
The internet is fast and carriers here are working on 5G wireless. Korea Telecom has already taken a step in this direction; Samsung Galaxy S6 users on their network already have access to LTE+ speeds.
The South Korean government finally announced the phase out of ActiveX by 2017. But with the cost involved, I won’t be surprised if it takes longer for legacy websites to update to a more modern infrastructure. Maybe some owners will realize that there’s a competitive advantage to interoperability and allowing users of many different platforms to actually buy the stuff that’s for sale.
Some of the unexpected things that I’ve encountered:
Heated things. In the winter, heated floors. Heated toilet seats. Warm tap water served in restaurants.
Für Elise. This song is often used as an alert sound. When someone needs help with a subway gate. When an electric cart is driving through the airport. When you need help getting out of a parking garage.
Where are you from? This can be a tricky question to answer. This TED talk from Pico Iyer starts to explain why.
Over the past year, when seeing people I’ve known from the past, the question I’m most surprised to hear is “how does it feel to be back?” As in “how does it feel to return toKorea, country of your birth?” Others, upon meeting me for the first time, comment “your English is really good!” As the world seems to be getting more open-minded every day, it’s interesting to see how deeply held and unassuming most stereotypes reside within most people.
Last week, I shared some thoughts on the next decade of social media at the 2015 Cannes Lions festival. The key points are highlighted in this Guardian article:
Gone
Shoppable
Snackable
Automated
Connective
Filtered
Integrated
Chinese
Subcutaneous
Empowering
More coverage of the talk is available in these write-ups:
Twelve months ago, I decided to move this blog from Typepad to WordPress. I had been paying $127.07 annually and switched to a more expensive (and more functional) WordPress install, in addition to serendipitously dodging the Typepad DDoS attacks.
Over the past year, I’ve paid a total of $451.71 in fees. To offset some costs, I added Google AdSense display ads to the sidebar; total revenue has been $127.07 over the past year. Thus the net cost has been $322.60.
So, was it worth it?
As this blog enters into its tenth year of being, the options available for self-publishing have certainly evolved since its inception. When I was starting out, I had a tough time deciding whether to publish on Blogger, Typepad, or WordPress. In 2011, a couple of high-profile bloggers ditched their blogs in favor of Google+. Others eventually migrated to Medium and more recently to LinkedIn. Many people have just stopped blogging.
Over the years, this blog has always been an outlet to complement my day job, whether writing syndicated research at Forrester, building the Dachis Group consulting business, or leading digital business at Cheil Worldwide. This year I also added the “minority report” category to reflect on life as an expat in Seoul.
I’ve never worried too much about the expenses and they’ve also never gotten too crazy. For about $1 a day, the cost of having a platform for self-expression is certainly worth the money!
South by Southwest (SXSW) Interactive 2015 is over and by all accounts it was bigger than ever before. This was my seventh consecutive year attending and speaking and I’ve witnessed this evolution firsthand. More so than in any prior year, my week in Austin left me with the impression that SXSW matters more than ever for brands and is currently the top “must attend” event for marketers.
Previously, many brand-side executives dismissed the notion of traveling to Austin in March, despite the allure of beer, barbecue and warm Texas weather. SXSW used to be called “spring break for geeks” – considered more of a social scene for techies than a place for brands to get business done.
This year’s festival leaned towards the regional and the niche. But with the rise of digital and convergence of culture and technology in society, the content and communities of SXSW Interactive have become increasingly relevant to a wide range of audiences.
This year, I saw three key reasons why brands should save the date for 2016:
1. Major digital trends are on display
I’ve been tracking a series of key global digital trends since the beginning of the year and have seen them reinforced at CES, Mobile World Congress and now, SXSW.
First is the evolution of natural interfaces. There were plenty on display, from startups showcasing gesture-based and augmented reality offerings, to panel discussions regarding the evolution of fabrics and wearables.
Another global trend is the rise of smart machines and practical application of data. General Electric, for example, held a “barbecue lab” at this year’s event to explore the science of what makes barbecue great, based on science.
Finally, the internet of things was put into action as 1,000 Bluetooth beacons were deployed throughout the city to connect attendees with each other and to provide information on the venues they were visiting.
2. Brands are building startup street cred
SXSW has always had client-side representation in attendance. However, in years past, marketers would attend individually or as part of a small team on a fact-finding mission. Now, big brands are paying big dollars to have a presence at the festival.
What really matters though is how traditional companies are reaching out and bridging the gap with startups. IBM, Visa and McDonalds all hosted startup pitch competitions during the festival. These brands are getting credit by association with new thinking, while getting a jump on disruptive innovation.
3. SXSW has become a global gathering
The attendee badge lists a person’s name, company and country. More often than not I saw non-US locations listed, including Germany, France, Korea, Japan, Sweden, the UK and beyond. SXSW has attracted a global audience that brands can connect with.
In stereotypical Texas style, everything at SXSW has become big. The amount of content offered, the number of attendees in town and the range of parties and concerts available were mind-boggling. It seems likely that next year’s conference will be even bigger and brands will bring out their best to shine brighter than their competitors in the warm Austin sun.
This post was originally published in The Guardian.
I was at Mobile World Congress last week in Barcelona. This week, Apple finally announced details on their much anticipated first-generation smartwatch.
Wearables, but why?
The Apple Watch faces the same critical challenge that all smartwatches already struggle with today: a strong use case. In other words, is it really better to do this on my watch than on my phone?
The trend is towards big, not small. Today, most watches do not have independent internet connectivity so you’ll always have your phone nearby when using your watch. If anything, the boost in iPhone sales after the launch of the larger 6 and 6 plus should be a hint that the world wants *larger* screens, not smaller ones.
The ecosystem for connecting software and hardware is still immature. Lots of interesting solutions are emerging, e.g. payments, notifications, and access, but mobility is still firmly in the early adoption phase.
People stopped wearing watches a while ago. Check out this article from 2007. Generally speaking, a lot of people stopped wearing watches because their phones provide the time and serve dozens of other functions. Everyone finds phones to be useful for multiple purposes. The same can’t be said for smartwatches or smart glasses.
But there’s just one thing.
At MWC, every manufacturer seemed to have a smartwatch offering. They came in a variety of designs, with high- and low-end finishes, targeting different consumer segments.
Regardless of brand, there’s one thing all of these watches have in common: they run Android. They may look different on the outside, but when you get into the user experience, they’re all essentially the same.
And Apple is the only manufacturer with its own operating system.
So despite similar challenges of use case, battery life, phone tethering, et al., Apple has something unique. It’s not about the $17,000 version, the initial set of brand apps, or the celebrity endorsements. The key is the ecosystem. And while the Apple Watch won’t be an instant hit like the iPad (again, big screen size!), it will be a solid first-generation product entry, just like the first iPod. What will be interesting to watch is how other manufacturers create a meaningful difference in a sea of Android sameness.
2014 was a record year for ecommerce revenue. Sources estimate that US holiday season shoppers spent over $50 billion online, while sales in the UK exceeded £100 billion for the full year and totaled almost $450 billion in China for 2014. There’s no doubt that a percentage of this growth comes at the expense of offline stores and brands with multiple channels are struggling to decide how to support all outlets.
Enter O2O: “online-to-offline commerce.”
Since the rise of e-commerce in the 1990s, retailers have experimented with ways to connect dot-com to legacy offline stores. In those days, brands would occasionally offer web-only coupons that could be printed out and redeemed in-store. Twenty years after Amazon.com first went live, the most effective tactic for driving online eyeballs to offline stores is still the coupon, albeit evolved via Groupon and LivingSocial. Other contemporary O2O tactics are also derivative from the days before e-commerce existed, like publishing weekly sales circulars online as PDFs or highlighting a brand’s latest TV commercials on its website. It’s time for these tactics to evolve.
Retailers have been the earliest to embrace O2O, but digital disruption has impacted companies of all kinds, from advertising to venture capital. Uber and Lyft have changed the way people (and regulators) think about hiring cars. AirBnB and HomeAway have changed behaviors around renting a room for the night. Nest and SmartThings have changed how people interact with their homes. Warby Parker has changed how people shop for eyewear. Kickstarter and Indiegogo have changed how business ventures obtain funding. The list goes on and on.
Risk adverse companies will take small, incremental, and defensive steps to integrate digital methods into their business models. These firms, many of them industry incumbents, will slowly fade away. Brands that survive and thrive will embrace three key principles of O2O:
1. O2O applies to three primary venues: retail, home, and office
Korea is one of the most wired countries on the planet and ground zero for O2O innovation.
In June 2014, Starbucks launched its Siren Order app in Korea, bridging the gap between office and retail by enabling customers to order and pay in advance. After a successful rollout, the app was rebranded “Mobile Order & Pay” for launch in the U.S. in December.
Also in December, Burberry opened a “Burberry Beauty Box” store in Seoul, including an RFID-enabled “Digital Lip & Nail Bar” to help customers match products to their skin tone.
Beyond retail and office, the “Internet of Things” has captured mainstream awareness and companies including SmartThings/Samsung, Nest/Google, and Quirky/GE are enabling digitally connected home environments.
2. O2O works best in both directions
O2O is most commonly an abbreviation for “online-to-offline” and the reverse should also be true. Circuit City, Borders, and Blockbuster have all disappeared after being unable to implement effective offline-to-online strategies. Today’s operating environment contains increasingly powerful personal computing devices, widespread broadband connectivity, and changes in consumer attitudes towards sharing and engagement.
Nordstrom takes advantage of these trends by investing in technology to enable sales associates to deliver more effective customer service, integrating in-store merchandising with social media content, and offering free wifi to improve in-store customer experience. Success – and perhaps survival – depends on merging channel service levels to deliver customer experiences that meet and exceed expectations.
3. O2O is a business strategy
Making O2O work effectively requires commitment and coordination across internal departments approaching programs as part of strategy, not as seasonal campaigns. A single department might champion O2O initiatives, but success requires collaboration from IT, supply chain, marketing, and customer service. The unifying focus for these efforts should be how to deliver the best user experience optimized for customer segments, supported by process improvements and technology infrastructure. Solid use cases are required prior to implementing O2O strategy.
For example, Samsung created a B2B product called CenterStage, displaying appliances in life-size 4K UHD at retailers including Best Buy, Dixons, and Boulanger, reducing inventory carrying cost and floor space typically required by traditional white goods displays.
Strategies can benefit brands in industries far beyond retail
Over the course of 2015, the lines between online and offline will continue to blur. As revenue from online retail continues to grow, brands must be careful to not get distracted by the larger opportunity. Brands that build their business models around an O2O approach will create consumer value in the three key venues of shop, home and office. These brands will be the best prepared to increase market share while defending existing business from new digitally disruptive entrants.
I was at CES 2015 last week. Here are some reflections, in no particular order:
1. The Internet of Things was Everywhere.
From the opening CES keynote to every 20 feet on the show floor, IoT was everywhere. But while there may be “infinite possibilities of IoT,” the question everyone will start asking in 2015 is, “but why?”
If IoT ecosystems become truly pervasive, analysts will become the most in-demand professionals out there.
2. Wearables, but why?
I was speaking to a 20-something professional about new products and he said, “Watches? I don’t get it. My generation is the one that stopped wearing them; we use our phones to tell the time. So why do all these companies think that everyone is suddenly going to buy smartwatches?”
The variety of wearables businesses plays out like a Mad Lib. I saw wearables for fitness. The elderly. Kids. Babies. Dogs. Cats. You name it and if it moves, then there’s a business that wants to put a sensor on it to collect data.
3. Surf like nobody’s watching.
But when you’re demoing VR on the CES floor, everyone is. Except at the Oculus booth, which had the longest lines that I saw at the show.
4. Give me a break.
Walking around the show can get so tiring for some people that they just fall asleep in the middle of the day. Some booths facilitate this.
5. Mirror, mirror on the wall
Some solutions like virtual fitting tech sounds great in theory but the demos show that there’s still a long way to go.
On the other hand, other offerings that focus on a smaller, more specific application work very well.
6. The Connected Car
There were more automotive manufacturers at the show than ever before, with a heavy focus on connectivity and automation.
7. Physical to digital to physical
The transition from the industrial to information age is entering a new phase, where we are digitizing our physical world.
8. 3D TV won’t die
I was surprised to see that every major manufacturer was showing off some sort of “glass-less” 3D TV. Even in the sweet spot, they seem like an awesome UHD TV got messed up somehow with a blur effect around the edges. 8K, yes. 3D, no.
9. Robots and the uncanny valley
Easily the creepiest thing I saw was Toshiba’s “Communications Android,” which had disclaimers posted around it like “robot does not interact with you.” Even so, when she turned and looked in my direction, I felt a chill run down my spine.
On the other hand, fake robots like Alibaba’s interacted with the crowd and were entertaining.
10. Times they are a-changin’
After recent years of backlash, booth babes have almost entirely disappeared from CES, in exchange for slightly more practical robots and people working out. Moreover, people dressed in cartoon costumes seem to have disappeared from the Strip as well. Here are two types of people you probably won’t see at CES 2016:
When I visited the Intel booth, I looked across the aisle and the old Microsoft space was now occupied by two Chinese manufacturers, Hisense and Changhong. Sign of the times.
However, what hasn’t changed is that the floor is primarily for media and spectacle, while business gets done behind the scenes and off the floor.
I’ll be keeping an eye on how these trends of digitization and connectivity play out over the year, with visible checkpoints at MWC, SXSW, and IFA.
