Consumer behaviour myopia in ideas

The Churchill Club recently had their annual Top 10 Tech Trends event in Silicon Valley. This was the 17th time that they had their event. It’s a great bit of content to have on in the background.

One thing that immediately struck me when listening to the venture capitalist panel was how every idea was put through a ‘consumer behaviour’ filter in order to consider the merits of a given trend.

A classic example was some of the very smart things said about wearables and health monitoring in the session. There was skepticism expressed for some very valid social behavioural reasons – if one looks at Facebook, consumers generally share only the good things in their lives, with the notable exception of life events, such as the death of a family pet. Stephen Waddington even describes his behaviour on Facebook as ‘cognitive behavioural therapy’.

So people really into fitness are far more likely to employ self tracking than couch-dwellers. Self tracking was described as a ‘Quicken Problem’. Quicken allows US consumers to easily complete their tax returns – a universal problem, yet is only used by five per cent of the population for various reasons.

All of this is very valid stuff of its self, but what happens if it isn’t only consumers making the decision?

My reservations about self tracking technologies are well recorded, to quote myself from Stephen Waddington’s Brand Vandals

Self-tracking adds massive amounts of data to your personal data pool and social graph and raises huge privacy concerns that users need to be cognisant of

A number of the key points that I made in my conversation with Stephen was not about consumers using their self-tracking data but how the data could be used to recalibrate car insurance, home insurance (based on absence from home) and health insurance based on activity and risky behaviours.

Let’s look at a specific type of self tracking, the car insurance black box. Aviva (Norwich Union) trialled the use of telematics to set car insurance premiums on a monthly basis as a type of continuous assessment. It looked at factors such as:

  • When the car was used, nighttime driving was considered to be risky behaviour
  • What distance was covered, charges were on a per mile basis
  • Speed
  • Breaking data

In IBM Research’s case study, Norwich Union envisaged that black boxes would allow it to sell insurance to consumers that drive less often. Norwich Union dropped the pilot in 2008, apparently due to a lack of consumer interest, but resurrected the car insurance black box when the European Union ruled that charging for car insurance on the basis of gender was illegal. Presumably the needed some other form of actuarial data instead of whether the driver was a female or not. This is just one example where consumer behaviour didn’t drive  product innovation.

Credit ratings were driven by the need for businesses to mitigate risks, direct (rather than operator) dialling on a telephone was developed to help reduce the manpower required to run telecoms networks. Night safes and ATMs (automatic teller machines) were about providing services without staff. The US airline tradition of baggage charges came from shareholder pressure not consumer demand yet is worth hundreds of millions of dollars a year.

The point at the end of the day is that opportunities for venture capitalists are broader than meeting consumer needs and wants.

More information
Brand Vandals by Stephen Waddington & Steve Earl
AA launches black box car insurance | Guardian
Norwich Union heralds new Pay As You Drive insurance – Aviva Media Room Archive
Norwich Union Insurance Telematics Pilot – Pay As You Drive Telematics trial of usage based motor insurance by Volker Fricker of IBM Research – (PDF)
Aviva Telematics Insurance Review | – Norwich Union (now Aviva) abandoned telematics insurance a number of years ago and is now reinstating it

Links of the day | 在网上找到

Amazon to begin paying corporation tax on UK retail sales | The Guardian – the thing no one is asking is how does this affect businesses that might have ‘global accounts’, for instance Ford, Colgate and HSBC’s relationship with WPP? Does this mean that clients will suddenly start getting bills on a per country basis rather than in one place?

Why We Have an Oversupply of Almost Everything (Oil, labor, capital, etc.) | Our Finite World – some interesting economic data in here

The Savoy opens take-away eatery to provide entry point to dining | Luxury Daily – interesting that The Savoy feels the need to do local ‘sampling’

Huawei launches ‘internet of things’ operating system – – Paywall

[1501.02876] Deep Image: Scaling up Image Recognition – interesting machine learning paper from Baidu

Interview: How did an ex UX designer get 50k WeChat fans? – interesting article and plan

What will happen to Silicon Valley when demographics strangle the global economy | VentureBeat – this isn’t necessarily as bad as this article makes out mainly because many VCs are sitting on more money than they can invest anyway

The Blogging Dead: WeChat’s ‘zombie relationship’ invasion| – sounds like a classic dunbar number problem, but it is interesting that they consider it to be WeChat specific

Integrated Intelligence: IWC Connect – Luxury News – interesting wearable concept, they seem to have deliberately avoided the mistakes made by others (including AndroidWear and Apple Watch. Still not convinced however

Seymour M. Hersh · The Killing of Osama bin Laden · LRB 21 May 2015 – I am not surprised, but the damage that this does to US is huge, particularly the body politic. I recommend reading this critique of Mr Hersh’s critics – The media’s reaction to Seymour Hersh’s bin Laden scoop has been disgraceful – Columbia Journalism Review

Five for Friday | 五日(星期五)

Here are some of the things that made my day this week:

Awesome trailer for Yakuza Apocalypse: The Great War Of The Underworld from Takashi Miike

Really interesting Panasonic technology for data transfer, is it more than a less obvious QRcode in terms of the data that it contains?

Stussy have done a really good collaboration with Japanese brand Sophnet which dropped this week

SoftBank seem to have moved away from their kooky ‘family’ adverts using modern samurai Isao Machii cuts many objects with ”Iaido” sword strokes

The BBC have a series of programmes on handmade products that shows how an item is made from start to finish by a craftsman. The programmes have no music or voiceover. I noticed that Porter Tokyo had taken a similar approach demonstrating how their bags are made

Links of the day | 在网上找到

AP Exclusive: Chinese banks a haven for web counterfeits – not terribly surprising given that these are also China’s most widespread banks

Robot makers from China look to expand into global market| – interesting clean room focus – semiconductors?

Utility: Verizon To Exit Wireline Business Within 10 Years | DSLReports – which has to make one ask what is the long term value of wired/wireless or triple play models in Europe and APAC?

LG launches a ‘try before you buy’ program for the G4 | BGR – reflects confidence in the product

How A Computer Can Anticipate Users’ Needs (Without Driving Them Crazy) | Fast Company – interesting essay on the web-of-no-web and user intent

Keeping Your Car Safe From Electronic Thieves – – fridge as a Faraday Cage

Accel and DJI Will Introduce a Fund to Invest in the Drone Ecosystem | Re/code – interesting move positioning DJI at the head of a drone movement and at the centre of an ecosystem a la Android or GoPro. I met them a couple of years ago and they felt marginally more squared away than your typical Chinese start-up

Shazam’s struggle to become a profitable verb (Wired UK) – classic web-of-no-web model, it’s time maybe now as native apps struggle for attention, but I could see this tech eventually being in LINE or WeChat

Russia and China Pledge Not to Hack Each Other – WSJ – the technology exchange is much more concerning given that the U.S. considers Russia the more dangerous cyber threat

Grindr Said to Explore Sale of Gay Men’s Dating App | Bloomberg Business – this could be an interesting social barometer if they manage to go public or what value they sell for, in comparison to the challenges AdultFriendFinder faced a number of years ago due to its niche product offerings

Banjo Announces $100 Million in Additional Funding | Banjo – not too sure about the valuation, but it seems to think that social media war rooms and real time marketing will continue to be a thing

A Chinese company is replacing 90 percent of its workers with robots | Fusion – robotic factory a la Fiat, for product assembly they aren’t likely to have fine enough movement, at the moment

Competition becomes tougher in the Chinese slowdown economy – Kantar Worldpanel – international retailers taking a kicking from local retailers

US phablet market soars – Kantar Worldpanel – driven by iPhone 6 Plus

Android Switchers Drive iOS Growth in Europe’s Big Five – Kantar Worldpanel – some interesting stats

Google Shuts Down PageSpeed Service For Accelerating Websites | TechCrunch – interesting piece on PageSpeed, it is part of Google’s retreat including getting rid of 20% projects and making Adplanner less useful

The Short Life and Speedy Death of Russia’s Silicon Valley | Foreign Policy – (paywall)

Amazon doubles free delivery minimum spend in UK – BBC News – you can see the strain delivery costs take on Amazon’s finances

Apple pushing music labels to kill free Spotify streaming ahead of Beats relaunch | The Verge – do record labels really need to be pushed on this, when one thinks about how they have moved away from licensing content for magazine cover mount CDs, which seemed to peak in the late 1990s

Luke Johnson – Animal Spirits: Silicon Valley robber barons tuck into Mad Men’s lunch – on an emotional level it struck a chord, but then I am sure the luddites would have said similar things if they were part of the Islington chattering set

Deep Learning Machine Solves the Cocktail Party Problem | MIT Technology Review – does that mean in five years from now we won’t need stems for remixes?

Things that have made my day this week

Here is a selection of things that I came across which made my day this week:

Pepsi has got in on drones in advertising before it all goes a bit lame and tired. Some really interesting projection mapping type effects as well

Audi advert: Kevin Smith, Jason Meyes. Enough said (oh and some cameos from actors who’ve appeared in Marvel comic film adaptations including pioneer Stan Lee)

Enterprise storage outfit have a great interview with Stewart Butterfield of Slack (and Flickr fame). Some interesting comments on how a GUI isn’t always the right interface for people who use keyboards.

Scottish National Party member of parliament Mhairi Black gave an interview back in March. I found it interesting as it shows that kind of impact social media will have on future political careers, particularly when it it will provide greater clarity the 2009 debate around David Cameron’s raving history. Imagine if you were presented at the age of 50 with selected fringe thoughts you had at 19 years old?

As Black notes:

My uncle summed it up when he said that, when he was a teenager, he just used to shout at the telly. My generation tweets and there is a record of it.

What adult doesn’t look back to things they said when they were 16 or 17 and go, ‘Oh my God?’

The difference is my comments are being dragged out for the whole world to see.

No trite social media analysis or fantastic technical wizardry just a great idea, client belief and a budget made 3M Korea’s Unforgettable Post-It Proposal

Finally Helios is a new Hong Kong film gaining traction in the Chinese box office. In the face of a lack of new Hong Kong actors coming through, it was interesting that the new blood came in the form of Korean boy band member Choi Siwon who also performs some of Super Junior’s mandarin repertoire