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The John Donahue post
Who is John Donahue?

John Donahue is the outgoing CEO at Nike. Full disclosure, I have Nike in my wardrobe and I own a share in the company at the time of writing. Anyway back to Donahue, according to his biography on the Nike website:

John Donahoe is President & CEO of NIKE, Inc. He is responsible for the continued growth of NIKE’s global business portfolio, which includes the Nike, Jordan and Converse brands. John became president and CEO of NIKE in January 2020 and has served on the Board of Directors since 2014. Previously, he was the president and CEO of ServiceNow and of eBay Inc., and he continues to serve as chairman of the board at PayPal. Earlier in his career, he worked for Bain & Company for nearly two decades, becoming the firm’s president and CEO in 1999. A former basketball player and lifelong sports fan, John received an MBA from Stanford Graduate School of Business and a bachelor’s degree in economics from Dartmouth College.

John Donahue via the Nike website.

He is a business strategy wonk and has extensive experience in online businesses and online commerce. When Apple had the vision thing, they hired Tim Cook – a famed operations and logistics executive in the technology industry to deliver. John Donahue had been hired to do great operational execution, by a company that was running low on the vision thing.

Donahue may not have had permission to deal with some of the systemic issues in Nike and some of them issues might be due to the board itself.

Penetration

Nike’s collective strategy to move to D2C via its own retail stores and e-tailing platform was ostensively a way to increase profitability and presumably focus on heavier, brand loyal users. I can understand why they might have felt that due to the ubiquity of their products on the backs and feet of customers around the world.

Secondly, prior to 2010 (and in most business schools still) the perceived wisdom was that modern marketing is supposedly about focusing on loyal, heavier buyers; focusing on retention (not acquisition) and return on investment.

However, things changed in 2010; Ehrensberg Bass researchers Byron Sharp and Jenni Romaniuk summarise the marketing science research that their institution had been doing in their books How Brands Grow part one and part two. A key part of their findings was that brand loyalty is positively correlated with brand penetration – if you have higher levels of penetration then your customers will tend to be more loyal. However, if you have lower levels of penetration then your customers will tend to be less loyal. Smaller brands suffer from a double jeopardy of sorts: their sales are lower because they have fewer buyers, who buy the brand less often.

Which kind of makes sense. When you go to a supermarket, you can only buy what’s on the shelf when you’re in the supermarket. It would take a lot to go and try another supermarket to just buy one product. Most people will just buy what they can on their list and maybe look at substitute products.

Nike is a huge brand, but it wilfully reduced its marketing penetration, by reducing the amount of places it appeared. It withdrew or reduced engagement with a range of partners:
- Amazon
- DSW
- Footlocker
- JD Sports
- Macys
- Olympia Sports
- Urban Outfitters
- Zappos
When Nike goes back to those partners, there will be a shift in the power dynamic away from Nike. These retailers have options because Nike let other brands in to fill the void it chose to leave behind.

On LinkedIn, people have talked about this as Nike has a brand problem. This is far beyond a brand problem; but brand has suffered.

Where’s the community?

Nike’s Londoner celebrated community back in 2018. Nike has continued to win in culture with collaborations including Nigo and Yoon Ahn of Ambush. But the culture didn’t translate into the degree of sales that Nike wanted so far.

Part of the reason for this is Nike’s focus on sub-cultures rather than broader transformational trends in middle class and working class consumers.

On Running have built their brand around running groups. Nike used to have running clubs ran by staff at their retail outlets. They were also were supporting Charlie Dark’s Run Dem Crew in the early 2010s.

When did Nike give competitors space in communities? Was it down to a pivot win focus from retail to online? Given that part of the rationale for Nike’s move to selling direct to customers was to be closer to them, this all seems really odd.

Charlie Dark has since become a global running ambassador for Lululemon.

Core competences

In the late 1990s and early 2000s Nike sold watches. The most famous of which was the Triax range that angled the display to make it glanceable for runners. There were also Nike MP3 players made with Philips. There was also the Nike fuelband, an in-house attempt at a wearable.

The company decided to focus on what it did well and has since made products that are complementary to Apple’s product line like watch straps and apps. Under Donahue’s watch Nike extended itself into the technology space with NFT offerings and metaverse experiences. Both of which seem to have been expensive follies.

Fading stars

Nike was formed at a unique point in time and over the decades has worked with a range of game-changing athletes who were known globally thanks to mass media and the internet.

Nike’s biggest brand and star is still Michael Jordan. The Air Jordan 1 was launched in 1984. That means that the shoe design and when he played in it is older than the young people it is sold to. The linkage between the iconic jumpman performance and his signature shoe is becoming elongated by time.

Granted Adidas sells the Superstar, the Stan Smith, the Samba and Gazelle shoes which are older than the Jordan 1. But Adidas doesn’t lean as heavily on any one design. Instead they rotate in and out of style. Even then Adidas has suffered from problems executing consistently such as the Yeezy scandal.

Nike’s Dunk design comes from 1985, the Air Force 1 came out in 1982. They are not bad shoes, but they will fade in and out of style.

Nike had also been relatively slow to take advantage of the surge of interest in women’s basketball with Caitlin Clark only getting a signature shoe deal this year.

Nike also managed to grossly underestimate the demand for replica jerseys of its England and Australia women’s football teams.

Jordan has since expanded into a brand that Nike has used to sponsor the likes of French football team Paris St Germain.

In golf, Nike parted ways with Tiger Woods this year. Woods is launching his own line instead. While Nike has other golfers on its roster, they don’t have the cultural impact that Woods had on the game.

The brand has better news in football where it has a deep bench of both teams and player sponsorships to draw on. Nike still has a great bench of athletes comparable to rivals like Adidas, and that’s the problem. They glitter like the Milky Way rather than radiate like the sun.

The secondary market

Hypebeasts

The rise of streetwear as an industry took off in the late 1980s. Its origins go further back. You had Dapper Dan in Harlem in the 1980s, football casual culture, Japanese fashions and the California surf culture influence. Soon after it took off you had unobtainable items:
- Major Force t-shirts – (Major Force was a Japanese hip hop and house label featuring artists like Hiroshi Fujiwara)
- The Tommy Boy Carhartt Detroit jacket
- Numerous Stüssy Tribe letterman jackets
- Supreme drops from 1994 onwards
Trying to scratch that itch made you a hype beast. I know hypebeasts who are 60 years old and have college age children. The signs of this secondary market being bubbly could be seen back before COVID.

The end of easy money

Nike like other premium brands benefited during COVID-19, when interest rates were low and consumers had money in their pockets. Interest rate rises, inflation and an economic dip took away the easy money. Nike doesn’t seem to have factored this into its expectations. The decline in Chinese economic growth, seems to have hit Nike particularly hard.

The polyurethane problem

Nike shoes took off on them being tradable alternative assets like sports cards, or vintage bottles of wine. Nike trainers have a shelf life due to the materials that they are made from. Adhesive bonds can be reapplied, stitching can be repaired, but polyurethane midsoles crumble over time and can’t be replaced.

The plastic breaks down and and the soles disintegrate. I have had pairs go at the four year mark. Chemistry undermines the collector segment that supports much of the secondary market for Nike products.

A long train running

John Donahue was in charge when Nike had unprecedented decline in sales. But there have been issues for a long time. Donahue was executing on a strategy for direct-to-consumer sales via its own retail stores and online, that Nike had committed to prior to his arrival as CEO.

This is obvious from John Donahue’s recruitment process.
- Donahue’s reputation was helped by his roles at ServiceNow and eBay
- Donahue was a former partner at Bain and a friend to many in Silicon Valley
- He received his MBA from Stanford School of Business – which is a great institution and happens to be the one that Phil Knight went to.
What Nike didn’t do was commission a headhunter, hold a beauty parade or anything akin to a rigorous recruitment process in hiring their CEO.

All of which points a board-wide issue rather than just a CEO issue. Which begs the question, will Nike become the sports apparel version of Yahoo!? A rotation of CEOs, intractable board level issues and an inevitable slide out of the limelight? Nike has been wrong-footed before, it was clobbered by the rise of Timberland in the early 1990s driven by the brown boots usefulness for standing on cold wet street corners in the criminal underworld adjacent to hip hop culture. But Nike came back. That was a different Nike with a more energetic Phil Knight and Tinker Hatfield.

The scale of this stumble seems bigger and faster than before. Nike might not be resilient enough to withstand it.

The innovation problem

Former Nike designer Steve McDonald has painted a very different picture on Nike innovation internally within the company than has been seen on the outside. Outdoor sub-brand ACG was ‘never supported‘ when it was launched back in 1989. It was an immensely political environment with star-designer Tinker Hatfield warring with rival designers. Instead Nike used golden birdcage contracts to lock up and stifle talent. Hatfield is in charge of Nike’s Innovation Kitchen, but there seems to be a lack of commercially beneficial output.

Hatfield’s days as a star designer are numbered following several decades at the top and there doesn’t seem to be a star-status worthy successor coming though.

Nike seemed to abandon mainstream sustainable innovation some time after 2012, with its ISPA range as a sporadic tokenism to green issues.

NikeLab – a premium line that fits in with On Running’s apparel seems to receive only sporadic support. All of which implies that product innovation had problems way before Hoka and On Running turned up.

Nike’s Vaporfly running shoes were originally released back in 2018 and by 2020, World Athletics rule changes meant that Nike has a range of competitors providing similar shoes.

The next battle ground has been fought over consumers focusing on wellness and fitness. When Hoka and On Running did turn up, Nike didn’t have much in the tank to respond.

It was really brought home to me in sportswear-loving Merseyside where On Running shoes are the universal choice of everyone from office workers to scallies. Before COVID they’d all be in Nikes with the Air Max 95s being particularly popular.

More information

Nike withdraws full-year guidance ahead of CEO transition | FT

Nike tries to get back in the race as sneaker sales gather pace | FT

As Nike cuts ties with retailers, competitors try to take its wholesale place | Modern Retail

Steve McDonald on Instagram
October 19, 2024
Cocaine Cowboys + more things

Cocaine Cowboys

Cocaine Cowboys by Nicola Tallant tells the story of the Kinahan organisation. The Kinahan organisation is a group that wholesales and retails illegal drugs in association with other organised crime groups. Tellant explains how deprivation, geography and economic growth fuelled drug trafficking and abuse in Ireland. Isolated council estates and economic hardship drove a heroin epidemic. The subsequent Asian Tiger economy only uplifted young professionals who then were a ripe market for cocaine. Cocaine added to Ireland’s already difficult relationship with alcohol use and abuse.

Crime journalism such as this is popular in Ireland because it is so concentrated through blood and marriage ties. We don’t have the kind of diversity that the British criminal underworld has. This means that it’s much more ‘relevant’ to Irish society.

But the book title itself is very interesting. There is a clear parallel to the scale of the cross-border drug trade between the US and Mexico.

Irish country music star Daniel O’Donnell courtesy of TG4

But there is also an underlying western theme across Irish culture. The vast majority of us are at most a few generations from the farm. We have had hard times which is why country music appealed and even morphed into a localised genre Country and Irish popular in rural areas and amongst lorry drivers (or in American truck drivers that drive ‘semis’.)

Tallant’s stance is definitely anti-Kinahan; but the book title Cocaine Cowboys gives them the hero status and taps deeply into the mainline that the cowboy and related elements like country music have into Irish culture at home and abroad. Cocaine Cowboys might be the inspiration for the next generation to replace the Kinahans.

If you want to know more beyond the book Nicola Tallant and her colleagues at Irish tabloid the Sunday World host a podcast called Crime World.

Branding

Mozilla’s brand update gives its old T-Rex logo a fresh new look – The Verge

China

China threatens Calvin Klein owner with blacklist over Xinjiang cotton | FT

China’s first industrial leases are expiring. Will their holders renew? | South China Morning Post – it will be interesting to see what the Hong Kong tongs do

Consumer behaviour

Death of the corkscrew? Only 27% of young people in UK own one, report says | The Guardian – Prevalence of screw-top bottles and abstinence among young people blamed for falling popularity of gadget

Understanding Desire in the Age of Ozempic – The Atlantic – fascinating study in how GLP-1 treatments are not only reducing the desire for food, but also other products like alcohol and tobacco.

After peak woke, what next? The Economist – in the past decade, a form of wokeness has arisen on the illiberal left which is characterised by extreme pessimism about America and its capacity to make progress, especially on race. According to this view, all the country’s problems are systemic or structural, and the solutions to them are illiberal, including censorship and positive discrimination by race. This wokeness defines people as members of groups in a rigid hierarchy of victims and oppressors. Like the Puritans of old, adherents focus less on workable ideas for reducing discrimination than on publicly rooting out sinful attitudes in themselves and others (especially others). The Economist has analysed how influential these ideas are today by looking at public opinion, the media, publishing, higher education and the corporate world. Using a host of measures, we found that woke peaked in 2021-22 and has since receded. For example, polling by Gallup found that the share of people who worry a great deal about race relations climbed from 17% in 2014 to 48% in 2021, but has since fallen to 35%. Likewise, the term “white privilege” was used 2.5 times for every 1m words written by the New York Times in 2020. Last year it was used 0.4 times per 1m words. – Of course, woke’s failure could be viewed by proponents as a sign of deep-rooted systemic prejudice

Economics

Why Britain has stagnated? | Foundations – this reads true and hits hard. My parents came to the United Kingdom when the motorway network was being built, power stations were being constructed and the first generation of nuclear submarines were being constructed. In London the Victoria line was constructed. Now the UK struggles to build any infrastructure and its strategic industrial capabilities have been hollowed out or disappeared.

FMCG

Unilever moves on ‘sub-par’ marketing | WARC – That means consistent execution in marketing innovation, marketing quality, proposition sharpness, execution of pricing, execution of distribution. Fernandez suggested that, on a scale of 1-10, the business is currently at around six but needs to get to eight or nine (“ten doesn’t exist”). A&P spending is increasing as a proportion of revenue, from 13% in 2022, to 14.3% in 2023, and 15.1% in H1 2024. “There is an implicit recognition that our level of investment was not in line with our ambition of volume growth,” he said. That increased investment is not there to fund a growing volume of marketing content, he added. “I’m much more concerned about the quality of the stuff that we put in the market than the amount”. And that also means a focus on brand-building. “We see other people putting much more focus on promotional pricing,” he said, “but we always will prefer to invest in long-term, equity-building activities.” – CFO burns marketing teams ‘I believe our marketing was subpar”

Hong Kong

Dinner with strangers? Hongkongers craving real-world connections turn to ‘secret’ meet-ups | South China Morning Post – In a tapas restaurant in Hong Kong’s Causeway Bay, about 80 people are chatting away on the packed second floor, clinking glasses and sharing small plates while discussing issues ranging from mental health to childhood dreams.

Innovation

How a Chinese billionaire’s Silicon Valley splurge caught the eye of the FBI | FT

Kyoto company developing autofocus glasses for sufferers of presbyopia and other conditions | SoraNews24 -Japan News-

Luxury

Burberry shares tumble to 15-year low amid questions over its luxury brand status – Retail Gazette contrast with top-tier luxury brand trajectory: Hermès chief eyes haute couture push as Paris house rides out luxury gloom – but has to wonder about Hermès leaning even further into Chinese market.

Marketing

Is marketing entering its ‘era of less’? | WARC – based on Gartner CMO surveys marketers are increasingly being seen as cost centres and are being asked to do more with less which is affecting mar tech spend, staffing and agency spend.

Colgate-Palmolive: ‘The advertising is working’ | WARC

EZ Newswire Signs Exclusive Distribution Deal with Reuters | Reuters – sounds like a PR placement automation?

What’s fueling America’s Zyn obsession? | On Point

Innovative research that literally put people in the driver’s seat | WARC – More than half of strategists (59%) are integrating AI into their strategy development process in a cautiously progressive way. They need to identify the skills that AI can’t replace, such as getting buy-in for a strategy, and double down on them. Speedy access to research and insight (74%) and streamlining repetitive tasks (74%) are the top opportunities strategists see in leveraging AI in the strategy process.

Future of Strategy 2024: Synthetic data – speedy saviour or another example of the industry’s arrogance? | WARC – it’ll be useful when time is of the essence, and you want to ‘speak’ to people and get their thoughts on your hypotheses, ideas or campaigns. In that scenario, I can see how that approach may replace an ad-hoc focus group set up hastily in the agency’s boardroom. But we’re not here purely to understand people. If the role of communications is to move people emotionally, shouldn’t we also be here to feel people? As Richard Huntington, CSO of Saatchi & Saatchi says: “You can’t feel data.” The beauty of humans (and the beauty of ethnography) is that so often it’s not what we say that powers an ‘insight’ or a strategy, a campaign or some NPD… it’s what people don’t say. It’s the nods and winks, the gestures, the objects with meaning they have in their homes and in their lives. That texture isn’t picked up by a typical conversation – be that with synthetic data or in a focus group. These feelings that are elicited from ethnography are the special sauce that can separate the wheat from the chaff.

Break Through: How new and returning brands can grow with TV – System1 Group

The Rise of The Populist Brand – Eavesdrop

Online

The TikTok, Shein, and Temu Conundrum – by Ivy Yang – TikTok’s defence: Shein and Temu have worse privacy profiles than we do

Launch of Social Web Foundation | Social Web Foundation – set up by the great and the good of web 2.0, notably Tom Coates who brings a wealth of product expertise.

AI Training is Copyright Infringement | Initiative Urheberrecht and The Intelligence Age | Sam Altman

Security

The Netherlands will not back EU-wide screening of app messages – DutchNews.nl

The Pig Butchering Invasion Has Begun | WIRED

Technology

Qualcomm has approached Intel over buy-out | EE News Europe – antitrust related issues around the world

OpenAI Is A Bad Business | Ed Zitron – the economics of generative AI are still bad, despite improvements in hardware design.

How AlphaChip transformed computer chip design – Google DeepMind

Tools

How I Replaced Notion with Reminders, Numbers, and Notes | by Joan Westenberg – this is a prime example of what I have been hearing from other people. I have been using Notes app in particular from the get-go.

Home | LibreOffice – Free and private office suite – Based on OpenOffice – Compatible with Microsoft – I have 35 years of content saved, and LibreOffice can open them all. When you’ve been writing for years, your manuscript formats will often be obsolete (though I’ve tried to make decisions that make my poems available platform agnostic, such as using plaintext, but line breaks and stanza breaks don’t always translate well in markdown). LibreOffice is an incredible tool for opening 25 year old wordperfect files when I need them.

Web-of-no-web

Meta’s Orion smart glasses look like the future of AR – The Verge

Apple Knew Where the Puck Was Going, But Meta Skated There – the PAN or personal area network has been talked about for 20+ years. What this misses is that the Orion glasses were possible thanks to silicon carbide lens which are a non-trivial thing to manufacture at scale

October 15, 2024
Apple Watch Ultra 2
I was fortunate to get an Apple Watch Ultra 2. It is the third Apple Watch that I have owned and the sixth wearable. My previous history in wearables were:

A Yamasa Tokei analogue pedometer (I received it around the time I was in primary school. It came in handy for guesstimating walking distances when I was in the scouts). What I didn’t know at the time is that the 1960s-era interest in pedometers that eventually spawned my device was driven by Japanese interest in combating obesity due to modernisation during the post-war economic miracle.

If you are focusing on your 10,000 steps a day you can thank Dr Yoshiro Hatano and manufacturers like Yamasa who eventually sold their ‘Manpo-kei’ (10,000 step measure) in the west as ‘Manpo-meter’ devices from the 1960s through to the late 1990s.

Nike Fuelband – I really enjoyed the simplicity of this device, but it was very fragile and I ended up going through three devices in a matter of months.

Casio G-Shock+ connected device that was let down by its software, but very much a go-anywhere device.

Polar Loop fitness tracker – it was more reliable than Nike’s Fuelband but I didn’t really enjoy it as device.

Apple Watch series 1 and 2 – I lasted about 48 hours wearing the series 1 Apple Watch, but did better with a series 2 device.

Apple Watch Ultra 2

My expectations have been impacted by poor experiences with earlier devices.

How have I found the Apple Watch Ultra 2?

I have worn tool watches all my adult life, a mix of mechanical dive watches and Casio G-Shocks. That meant that I didn’t think about where I took my watches. Into the shower, or the swimming pool – the watches could take it all in their stride. But the Apple Watch couldn’t.

The Apple Watch Ultra 2 is a classic ‘go anywhere’ watch. It is waterproof like a Casio G-Shock. So fine for swimming, in the shower or scuba diving. Titanium means that it’s hypoallergenic, and corrosion resistant; even more so than most grades of stainless steel. However, if you wear it in the sea or at the swimming pool, rinse the watch in clean fresh water afterwards, like you should do with any other dive watch.

I found the default straps sold with the Apple Watch Ultra 2 were excessively clunky. Awkward to wear and got snagged in random situations. Instead I favoured a Nike Sports silicone band which is ideal for the gym or working in the office.

I bought a cheap clear bumper for the Apple Watch Ultra 2. It keeps fingerprints off the screen and gives items like the buttons and digital crown a modicum of protection from being activated by putting on a jacket as we go into a cooler wetter autumn.

Battery life on it seems to be more generous than the older Apple Watch models I have used and based on what I have seen I think you could get a weekend out of it without a charge.

The ubiquity of Apple watches on the wrists of Londoners mean that this doesn’t attract any good or bad attention.

What’s it like?

Compared to previous Apple watch models I have used the Apple Watch Ultra 2 is faster and more sophisticated. I get the sense that the Apple WatchOS is now supported by less non-health related apps than previously. My watch supports alerts for my train ticket bookings, airline flights and my preferred taxi app.

Part of this might be down to watch might make contextual sense in the 10 second app usage time that a consumer would have. And when does it make sense to just pull the phone out of your pocket.

There isn’t the same lag that made the first series Apple Watch unusable, as the device has become more powerful and more processing happens on the watch. Apple’s health app is more tracking than I need, so I haven’t used it with apps like Strava.

What’s good about it?

All of the Apple watch models have been impressive pieces of engineering and the Apple Watch Ultra 2 is no exception. In their own way, they challenge Swiss industry for a different type of engineering prowess.

I really like the strap that I landed on. The material is the right texture and unlike other straps I have worn it doesn’t hinder my typing on a laptop. That being said the strap owes a lot to Marc Newson’s prior work in the early 1990s for Ikepod. This all means that you have a device that feels nice on the wrist.

One of the first things that I liked about the Apple Watch Ultra 2 is ‘night mode’ a plain red on black face, rather than the distracting colour complications. It would be great if this could be a universal theme carried through all the watch faces.

Thanks to mobile phone contracts, Apple watches like G-Shocks are surprisingly poor signals of status. In a city like London, that has its benefits.

What could be improved?

The Apple Watch is over nine years old. A number of problems have been there since the first device launch and the Apple Watch Ultra 2 is merely the latest in the line to carry them.

You can’t wear your watch on the inside of your wrist. I used to scuba dive without a dive computer, relying on pre-planned dive tables, a depth gauge and air pressure gauge for my tank. I got into the habit of wearing my watch on the inside of my right wrist so I could hold my gauge console in my hand and see my elapsed dive time at the same time. It also means that your watch is less on-show in public settings.

Screens default to being overly busy with Apple trying to cram in as many complications as possible which compromises ‘glanceability’ – the key experience benefit that wearables like the Apple Watch Ultra 2 provide. Apple should also start to think about accessibility on across the Apple Watch range as much as it does on a Mac. I have have worked bleary eyed from deep sleep, looked at the watch and not being able to read it until my focus kicks in. How could the haptics function in the Apple Watch be used better?

Less apps now support the Apple Watch than have done previously. The more apps that support a platform, the more likely you are to get at least some sticky experiences that add to the utility of the device.

It’s not a particularly stylish device to look at, but it also doesn’t lean into function in the same way that a Casio G-Shock does. This means that it could be better protected out of the box than it is.

The battery life is better than previous generations of Apple Watch, but it still creates battery anxiety. Unlike Casio or other manufacturers, there’s no solar top-up option.

I don’t know how precise the data is. It measures blood oxygen level but freely admits its data isn’t good enough to be used in a medical situation. If you move to an Apple device from a Garmin or similar, you may find that your step count and activity measures may vary.

Price-wise, it’s expensive. It does offer value for what it does, but it’s expensive. You can spend as much, if not more money on a G-Shock than an Apple Watch Ultra 2; but the G-Shock won’t be a worry on issues like obsolescence, software support or even battery replacement in the same way that the Apple Watch Ultra 2 is. I have G-Shocks that I have owned for almost 20 years and are perfectly fine. I won’t be able to say the same of any Apple Watch.

What’s its use?

Still a great question. When I had my first Apple Watch, I stopped using it after 48 hours for a few reasons:
- I couldn’t see a good user case coming thorough in the product at the time
- It was slow
- It had poor battery life
At the time Apple had thrown a number of things at the wall. There was a luxury line with a $17,000 version with a gold case and official third-party leather straps by Hermès. Apple still sells a Hermès co-branded range, but the gold models are no longer made.

In the intervening years Apple has committed to a number of areas:
- An extension of your phone, on your wrist.
- Integration with payments
- Integration with identity
- The quantified self
The use cases I have personally favoured included being an extension of my phone, when it rings my watch vibrates. But since I work most of the time at home and the phone sits on a stand in front of me, this tends to be only useful when I am out. Glanceable updates from a few apps, notably weather and my taxi app.

The Apple Watch Ultra 2 can work as a standalone phone attached to your existing number, but that depends on your mobile carrier supporting it. I didn’t opt for this for reasons relating to my current service plan with 3 UK.

Tracking activity and the quality of my sleep. The quantified self is the area where Apple really pushes now, as do third-party developers such as Strava.

Apple also allows integration with Apple wallet, but you have to turn your wrist in an awkward position to work with most ‘tap-and-go’ systems. It is just as easy to do it with your phone or card.

Finally, Apple and some car manufacturers have been looking at using Apple devices as your car key. I live in London and even if I did need a car, I would be going for a pre-owned vehicle.

Is it a watch?

Is the Apple Watch Ultra 2 actually a watch at first glance seems like a ridiculous proposition, if for no other reason than you have the word ‘watch’ twice in close succession.

But on closer examination, it’s a pertinent question. Watch sales actually dropped as cellphones became ubiquitous. You had the time in your pocket or purse and the phone went everywhere with you. If you went abroad on holiday, it even changed time zones unless you specifically set it not to do so.

Watches offered some benefits from using the cellphone as a portable clock.
- Easy to read / glanceable.
- An analogue face allowed you to visually understand elapsed time.
- It sent social signals in work about taking time seriously and likely punctuality.
- More broadly the watch demonstrates signals about style, wealth, taste and even sub-cultures. This can be especially true of luxury brands and the countless collaborations that Casio has done with its G-Shock range over the years.
- Finally, if you have an automatic movement watch or a solar powered quartz one, you don’t need to worry about a dead cellphone battery.
Smartwatches in general, have put a simplified version of your smartphone on your wrist. Depending who your mobile service provider is, your Apple Watch Ultra 2 can become a fallback phone, allowing you to leave it charging at home.

But as a watch it’s trying to do too many other things. Update you on your messages, provide a simplified experience of some apps (airlines and taxi services in particular) and activity tracking. All of which is squeezed into a screen area about an eighth the size of my smartphone’s screen.

This all comes with experience choices and compromises. It’s this lack of functional purity that is a moat between even the most technical G-Shock and an Apple Watch Ultra 2. Your watch will never compromise on telling you the time despite being a really shitty dive recorder or digital compass.

Yes you can spend the price of a Porsche; on a Patek Philippe watch with lots of complications, but realistically it’s an objet d’art that happens to look like a wrist watch. On that measure the Apple Watch Ultra 2 isn’t a watch, despite sitting on your wrist.

More information

On smart watches, I’ve decided to take the plunge | renaissance chambara

Wearable devices | renaissance chambara

Living with the Apple Watch | renaissance chambara
October 9, 2024
September 2024 newsletter
September 2024 newsletter introduction

Welcome to my September 2024 newsletter, this newsletter marks my 14th issue. When I lived in Hong Kong and dealt with Chinese accounts, the number 4 was considered unlucky, rather like 13. 14 is even worse due to it sounding so similar to ‘is dead’ or ‘will be dead’ or ‘will be certain to die’ depending on the variant of the spoken language used. In other cultures the symbolism of 14 is more nebulous at best.

September got off to an odd start, we seem to have had all the seasons, rather than settling gently into the run up to autumn. I managed to avoid traditional mooncake during mid-autumn festival celebrations that I attended. My waistline was thankful for the #ROMO (relief of missing out).

New reader?

If this is the first newsletter, welcome! You can find my regular writings here and more about me here.

Things I’ve written.
- Being on the ground in Merseyside as the Southport stabbings unfolded gave me a different perspective on things.
- How generative AI features are affecting the Google search experience and much more.
- Not the target demographic – or how marketers and agencies are leaving money on the table.
- The mooncake crisis in China.
Books that I have read.

My reading for September 2024 slacked off a bit as real world obligations kicked in.
- The Old Woman With the Knife worked on a number of levels for me. Firstly, I loved its portrayal of modern Korean society, from the aging population to the Confucian view of seniority that makes everyday interactions more complex than other Asian societies. Without revealing too much, the old woman in question is someone in the twilight of her career and how she is coping with new up-and-coming rivals at work.
- Panic! edited by Michael Lewis. Michael Lewis became famous when he wrote an account of his career in investment banking in Liar’s Poker. His career overlapped with the 1987 financial crash. Since then he has been a writer who has documented key turns in the economy. Because of this background Lewis was the ideal person to curate a history of financial crisis from contemporary accounts at the time. Panic! covers the 1987 financial crash, the 1998 debt crisis, the dot com bubble, and the subprime mortgage crisis of 2007/8. I read the book in short bursts mainly due to asks on my time, rather than the nature of the book. Panic! seemed pertinent to read now. The publication of Pegasus Research’s iconic quantitative research on ‘burn rates’ in March 2000 on dot.com company burn rates makes it highly relevant to revisit when we are in hype cycles such as those surrounding health tech, fintech, crypto and more – if for no other reason than pointing out the folly of trying to pick winners in hype-driven public markets with a high degree of opacity.
- Klara and the Sun by Kazuo Ishiguro moved from my to be read pile to must read pile given everything that has been going on with generative AI over the the past couple of years that it has sat on my bookshelf. Ishiguro uses speculative fiction to explore the different kinds of love and attachment, alongside loss. From a machine learning perspective it poses interesting questions about applying observational learning rather than rules based learning in systems that are supposed to exist in the real world. Klara is an ‘artificial friend’ for a child who is going through ‘levelling up’. Levelling up could be seen as a euphemism for everything from the cramming schools popular in Asian education systems to the challenges humans face in an information heavy environment. Ultimately there is something more human and child-like in Klara’s experiences than the human co-protagonists.
Things I have been inspired by.

AI proficiency.

Section, the education company founded by Professor Scott Galloway has AI proficiency as a key element in its offering. They have put together research to show how low the current level of proficiency is. They consider this research a rallying cry; but the results could also be reflective of a technology adoption curve that isn’t moving at the speed of hype, which is what came through in my examination of public discussions during the summer.

Secondly, research from the Upwork Research Institute implies a higher a higher adoption rate of generative AI, but lower success rate with the outputs generating inefficiencies rather than productivity gains. Part of the problem seems to come from organisational leadership and the way generative AI is being implemented.

WARC have published a report which looks at What’s working in generative AI from a marketing perspective. Some of the ideas like synthetic data in market research are not quite in prime time yet and generative AI’s large carbon footprint can’t be ignored.

Digitalisation and brands

Harvard Business Review published research that indicated a weaker relationship between profit share and brand in certain types of businesses. On the face of it, this supports Scott Galloway’s ‘end of brand‘ hypothesis. WARC covered the research paper in depth pointing out that for each percentage gain in market share highly digitised businesses gain 0.19% increase in profit compared to 0.26% in less digital businesses. This seems to be due to a multitude of factors:
- Efficiency gains due to digitalisation have an effect on the existing profit prior to the market share. Efficiency is the main selling point of much digital automation from CRM systems to performance advertising.
- Market power of larger companies ( a la Google).
- Perceptions of quality – digital-only companies might look more reputable due to the lack of real-world signals to the contrary
Market share (and brand) still matters, but it hits different depending on the business. B2B and growth hacking business approaches gain less than consumer orientated businesses. A larger dataset of Kantar-sourced data analysed by Oxford University researchers found that better brand effects were down to ‘difference’ as in how customers see – and experience the brand – as being different enough from competitors.

FEAST

FEAST is an occasional magazine and curated set of events all about food and its ingredients. If you are a strategist working with a food or beverage client it’s well worth exploring their archive as a source of inspiration for insights given its in-depth and thoughtful arts-based approach.

Streaming plateau

I finally got to dive into Ofcom’s Media Nations research report. I recommend that if you are involved in the advertising-media industrial complex in any way shape or form, spend some time reading it. On the plus side, survey respondents consider accurate balanced news as a key part of the public service mandate of radio and television. Secondly during 2023, broadcast brought many of us together still for key events including the first episodes of tentpole series.

Ofcom

More dispiritingly, I realised that amongst the tentpole TV series was season 23 or I’m a Celebrity, Get Me Out of Here. TV advertising revenues declined faster than online video revenues grew and subscription based video on demand take-up plateaued. It’s pure speculation on my part, but this might have been reached because COVID accelerated adoption.

Finally, as a film fan who buys Blu-Rays of films that don’t appear on streaming services consistently, the amount of time watching DVDs and and Blu-Rays have a very small usage across all age groups. I don’t think that’s good news for arthouse and cult cinema.

Things I have watched.

The Crow – less of a remake of the iconic Brandon Lee film and more of a reinvention of the franchise. It’s a good if unengaging film, many of the young adult audience I went to see it with won’t have the original or the comic books as a reference point. It has been described on other parts of the net as ‘the worst movie of the year‘. This is probably a bit unfair; there is a lot of ‘straight to Netflix’ dross out there. FKA Twigs character in the film grew on me as I watched it.

The last time I saw The Terminator in a cinema was in a double bill with the then newly launched Terminator 2 at the then new Odeon multiplex in Bromborough. I got to see it again thanks to a 4K restoration. Despite having seen The Terminator several times on tape, DVD and Blu-Ray – this time it hit different. It hit harder and it was all down the way the screen filled my vision and the punch of the sound track. Despite in-home cinema set-ups, you just can’t get at home unless you live in a large industrial unit sized home. The analogue special effects held up surprisingly well and the plot was just as taunt as I remembered it. There was less people in the cinema than for the screening than for The Crow.

As I write this, I have just watched episode one of the latest series of Slow Horses. It has gotten off to the high standard set by the previous series and book. Time to put on my Roddy Ho t-shirt again.

Useful tools.

Table Capture

If you’ve ever tried to cut and paste a table and data from a website into an spreadsheet and then spent the rest of the afternoon parsing it in cell-by-cell you will appreciate the benefit of this browser extension.

Humaniser for GPT created content

If you’re reading this, chances are that you’ve used services like Claude, ChatGPT or Gemini as a starting point for copy, or to summarise documents. UndetectableGPT looks at providing alternatives to ‘tell-tale’ phraseology in generative AI copy.

Data analysis

Groupt will take a CSV file and categorise the data including visualisation, so you only have to focus on wrapping a narrative around it to fit into the wider storytelling of your presentation.

The sales pitch.

I am now taking bookings for strategic engagements from January 2025 onwards; or discussions on permanent roles. Contact me here.

More on what I have done here.

The End.

Ok this is the end of my September 2024 newsletter, I hope to see you all back here again in a month. Be excellent to each other and onward into October and crispness of a bright autumn morning!

Don’t forget to share, comment and subscribe!

Let me know if you have any recommendations to be featured in forthcoming issues.
September 26, 2024
Mooncakes + more things
Mooncakes

Mooncakes were a big part of my time in Hong Kong and Shenzhen. This year, mid-September marked mid-autumn festival across Asia or known as Chuseok in Korea. It is similar to harvest festivals that happen elsewhere in the world.

It is celebrated in Chinese communities with mooncakes. Mooncakes traditionally have been made of fat filled pastry cases and lids filled with red bean or lotus seed paste and a salted dried egg yolk.

Mooncakes are moulded and have auspicious messages or symbols embossed on the top, like the double happiness ideogram which also appears on new year decorations and at weddings.

In the past mooncakes have been used to make political statements in Hong Kong where they were embossed with messages against the Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill 2019. This mirrored mooncake history, where concealed messages were alleged to have been used to ferment rebellion against Mongolian rule in China centuries ago.

China saw a halving of mooncakes sold this year, compared to last year. This is a mix of fast-moving events like the state of consumer spending and longer term factors including gifting culture and attitudes to health and fitness.

The economy

The consumer economy seems to be doing worse than industrial output. Youth unemployment is still an issue.

Gifting culture

China saw a crackdown on premium priced mooncakes as part of a government move against ‘excessive consumption‘ driven by societal excess and ‘money worship’. This overall movement has dampened luxury sales. The Chinese government stopped officials buying mooncakes a decade ago as part of a crackdown on corruption.

Some consumers just aren’t into them

They were as divisive as Christmas cake is in Irish and British households. Brands like Haagen-Daz and Starbucks have looked to reinvent mooncakes into something more palatable.

Health and fitness

Health and fitness has been steadily growing as a trend in China. A number of reasons have been at play including changing beauty standards. Chinese women are still going to favour slimness over muscle, but home workouts and running have been increasing in popularity. The fitness industry has been growing and the Chinese government has also tried to foster interest in winter sports. So there would be a good reason to avoid ruining all the hard work that you put in by eating mooncakes.

Business

Nike CEO John Donahoe to Step Down | BoF

Economics

Why Do Workers Dislike Inflation? Wage Erosion and Conflict Costs* by Joao Guerreiro, Jonathon Hazell, Chen Lian and Christina Patterson – workers must take costly actions (“conflict”) to have nominal wages catch up with inflation, meaning there are welfare costs even if real wages do not fall as inflation rises. We study a menu-cost style model, where workers choose whether to engage in conflict with employers to secure a wage increase. We show that, following a rise in inflation, wage catchup resulting from more frequent conflict does not raise welfare. Instead, the impact of inflation on worker welfare is determined by what we term “wage erosion”—how inflation would lower real wages if workers’ conflict decisions did not respond to inflation. As a result, measuring welfare using observed wage growth understates the costs of inflation. We conduct a survey showing that workers are willing to sacrifice 1.75% of their wages to avoid conflict. Calibrating the model to the survey data, the aggregate costs of inflation incorporating conflict more than double the costs of inflation via falling real wages alone

FMCG

Unilever ends up as a punching bag for Greenpeace and having their purpose blown up. As a campaign idea, the public celebration by the Dove brand team of the 20th anniversary of Dove’s real beauty positioning and creative left themselves open to this. Greenpeace used a skilful reframing in this creative.

The reason why the developing world seems to be disproportionately affected by plastic waste highlighted is for a number of reasons:
- A lot of and paper and plastic recycling is shipped abroad. It used to go to China, but they declined to accept waste to recycle from 2018 onwards. So this waste went to other markets.
- Developing markets have single portion packaging so that FMCG companies can distribute via neighbourhood shops and sell the product for the price a consumer can afford.
- Plastic is easier to colour, manufacture, package and transport than glass, metal or coated paper. Biodegradable or effective post-use supply chains are well behind where they should be. And even if you were open to recycling, there may be brand issues.
Innovation

Chinese scientists claim they can use Starlink satellites to detect stealth aircraft | BGR

Japan

AI will help Sony expand Japanese anime’s growing fan base | FT – but would also help competitors out-produce Sony. Expect a Chinese anime avalanche.

Marketing

Campbell’s drops the ‘soup’: what the evidence says about adapting brand fundamentals | WARC

Media

OpenAI Messed With the Wrong Mega-Popular Parenting Forum | WIRED

Retail media frenzy muddies negotiations with brands, who agency execs say must spend or ‘suffer the consequences’ – Digiday and Retail media networks put the squeeze on brands | WARC – Spending on RMNs could be seen as part of normal partnership agreements between brands and retailers that have traditionally included marketing commitments. That shades into a grey area if retailers become focused primarily on growing their ad business, but those same retailers can’t expect brands to spend more unless they can demonstrate results. At the same time, brands have their wider media mix to consider.

In context
- The pairing of advertisers with consumers close to the point of purchase via rich, first-party data is leading to better ROI relative to other channels for some advertisers and is cited as a key driver of increasing retail media investment.
- Retail media is growing in double digits every year; it currently accounts for around 14% of global ad spend and is projected to account for 22.7% of online advertising by 2026.
- Retail media is no longer a ‘medium’ in the conventional sense but is instead evolving into an infrastructure underpinning the entire digital advertising ecosystem.
Content Creators in the Adult Industry Want a Say in AI Rules | WIRED

Security

JLR’s letter: what Land Rover’s doing to stop your older car getting nicked | CAR Magazine – update on JLR’s security crisis

Software

A brief history of QuickTime – The Eclectic Light Company

Technology

NTT Data builds a mainframe cloud for Banks • The Register – mainframes are still amazing for large scale batch processing
September 25, 2024