The Future of Competition

Mar 19, 2017

Business leaders have long be preoccupied with competitiveness and until recently, many accepted the zero-sum game nature of business. The game seems to be changing however, as new approaches have taken a hold of strategist’s view and approaches to competition.

 

Businesses have mostly used Michael Porter’s Five Forces Model to remain competitive in their field of business and persevere in the face of competitive threats. In essence, businesses competed to win and tried to do so by applying Porter’s strategy. Any new product or service, or indeed existing ones, were scrutinised in relation to the five forces and strategic decisions taken on the basis of the answers that emerged from the application of the model.

 

Over the last fifteen years, we’ve seen a significant shift in how businesses view competition and this view change was initiated by the Blue Ocean Strategy. Suddenly, the zero-sum business concept no longer applied and competition lost its central position in the wide range of strategic areas businesses need to tackle. Christensen further eroded old competition thinking with his disruptive innovation theory and businesses realised that an entirely new approach could be taken.

 

The change in the way businesses carry out their activities was also greatly enhanced by the global connectivity the internet produced and this new found global connectivity opened new markets and greatly facilitated global trade. The new kid on the block was innovation and competition-thinking gradually gave way to creative innovation.

 

The internet produced completely new markets and allowed smaller players to get a piece of the action. Chris Anderson identified how the internet became the new marketplace and with his long tail model explained how smaller businesses could obtain market shares by operating at lower costs than the traditionally dominant companies. Products that would never have made it onto shop shelves were now readily and frequently being bought online much to the detriment of large corporations. Furthermore, Andersen illustrated that in these new markets, products and services could be exchanged for free.

 

The Dawn of Platforms

 

While the Blue Ocean Strategy, disruptive innovation and long tail interactions in essence turned traditional competition thinking on its head, the most transformative shift may only just have started. The emergence of platforms has meant the creation of new markets as well as the establishment of order in what appear to be chaotic markets. Platforms have been eroding traditional competition thinking further. Platforms shift the focus from mere supply access to access to the entire ecosystem around the supply source and the collection of data thereof. The platform that uses the ecosystem and related data most efficiently will perform best. It is no longer sufficient to just have exclusive access to a supply source. Now only businesses with a strong ecosystem are in a position to provide the best products and services.

 

Platforms also introduce the concept of collaboration rather than mere competition as businesses jointly create new markets and collaborate in the provision of innovative services and products. Companies no longer simply compete for market shares, but instead collaborate in providing entirely new products and services. Ford, for instance, participates in Google’s ecosystem and both businesses are collaborating in the creation of new markets and making new innovative products available to customers all over the world. Businesses are now recognising each other’s innovative strengths and strategies and participating and collaborating in mutual innovation.

Platform Failure: Why the Mighty Fail

Feb 19, 2017

They make it look so easy! Platform businesses like Alibaba, Airbnb and Uber have been so remarkably successful that one would think that building a platform business was child’s play.  But for every success there are more failures and, when it comes to platforms, Apple and Google have both fallen flat on their face. The cause is almost always that managers do not understand how platforms work and compete.

Platform businesses bring producers and consumers together to exchange goods or services in some shape or form. In the case of Uber, drivers meet passengers, on YouTube viewers meet videographers and on Dental CPD Pro, learners meet educators. Apart from facilitating the exchange of goods and services, platforms create network effects and the site’s value increases are in direct proportion to the growing number of platform users.

 

Failure by platform managers to allow free exchange will most certainly spell the demise of the platform.

 

There are a few key errors that must be avoided at all cost:

 

 

  • Failure to Create Effective “Openness”

 

 

As platforms are fuelled by the exchange between participants, managing the platform’s “openness” is crucial.  The degree to which consumers, producers and others can access the platform, and what actions they can take must be carefully managed.

 

Platforms allowing too little access will keep potentially desirable users out and make network effects stall; Platforms awarding too much access tend to become devalued because of poor quality contributions.

 

Managing openness at Apple in the 1980s was not one of Steve Job’s fortes. On his platform developers had to pay for toolkits, didn’t want to do so and stayed away: the platform failed. By charging for the toolkits he put off the very software producers that he should have welcomed to Apple’s platform. Apple learnt a bitter lesson and the iOS platform grants easy and free access has been highly successful as a result.

 

Bill Gates was smarter and saw the necessity for facilitate a collaboration between software and hardware developers when launching Windows, and now Windows is the world’s most used desktop platform because Microsoft facilitated an open collaboration between software and hardware developers.

 

However, platforms can also allow too much access and core assets must be protected in order to provide financial gain. Google found this out the hard way.

Amazon and Samsung fragmented Google’s open Android platform and went on to create their own version that quickly overtook Google sales. Google reacted by creating the Google Play Store and restricting access to certain services. Difficult-to-replicate applications and important APIs (application programming interfaces) were restricted and transferred to Google Play.

 

  • Not Engaging Developers

 

Openness alone will however not suffice. Platform operators must also entice contributors (software developers, video producers, educators etc) to use the site. In 2013, Johnson Controls sought support from developers for the construction of Panoptix, an energy efficiency platform for office space and buildings. By early 2015, however, the company ceased to accept new submissions and stopped their API support for external developers. Panoptix had failed to attract sufficient new apps to justify continued investment in the platform.

 

Platforms will only be successful if contributors gain from its use. They must be provided with innovative ideas, feedback on performance and design and be rewarded for participation. All users must gain from participation and the platform must deliver top benefits for all.

 

 

  • Failure to Share the Benefits Equally

 

 

A platform will only succeed if all users can gain – most usually financially, but time can also be an important factor. The consumer, the producer and the platform operator will all be happy as long as they make or, in case of the consumer, save money on it. If one party fails to gain, their reason for participation will disappear as a result of which they will no longer frequent the platform and the platform will collapse.

 

In 2000, a group of car manufacturers, including Daimler-Chrysler, GM, Ford, and Nissan etc. joined forces in the creation of Covisint, an online marketplace for auto parts. But Covisint’s platform heavily favoured car companies and drove suppliers into a price war, reducing their earning power to next to nothing. The platform failed to be profitable and was eventually sold for close to $7 million, a small fraction of the huge $500 million investment made by the car manufacturers. Generally, platform operators should refrain from keeping too large a cut and instead share earnings fairly with all users.

 

 

  • Lack of Clear Focal Point

 

 

Platform managers must carefully choose a focal point for their site when launching it. Platforms can be consumer, product or consumer & product focused.

 

Despite much fanfare, Google Health failed. Google’s aim was to provide a premier site for consumers to access health information. The company focused on the consumer, neglecting doctors and insurers, and failed miserably.  

 

Consumers might have used the platform if doctors and insurers had been willing to engage. But the loss of control over their own data didn’t go down well and the site failed.

 

 

  • Failure to Prioritise Critical Mass Over Money

 

 

Another example of an epic failure is Billpoint, the payment platform introduced by eBay before the inception of PayPal. Starting off as the frontrunner, Billpay should never have allowed PayPal to gain pole position. But the creators of PayPal made smarter choices. While Billpoint was busy focusing on fraud prevention, PayPal prioritised ease of use and value, in order to increase the number of people using the service. Billpoint’s higher transaction fees failed miserably against PayPal’s $5 and $10 gift payments to users who signed up other users.

 

Fraud prevention shouldn’t have come at the cost of putting customers off despite the fact that such measures may bring some savings. By contrast, at Paypal fraud costs were absorbed by the company. The simplification of transactions combined with the reward system for consumers helped it grow exponentially and it soon it overtook Billpoint as the number one payment system.

 

EBay ended up buying PayPal for $1.4 billion and quickly phased out Billpoint. Lessons had been learnt and growing user numbers is now very much a priority.

 

On platforms, the larger the number of users, the greater the gains for all involved.

 

 

  • Lack of Imagination

 

 

If the platform itself fails to attract users, it is doomed to fail. A platform that overemphasises a product rather than provide and ecosystem will not be successful.

 

Sony, Hewlett Packard and Garmin all made the mistake of focusing solely on the product rather than create a fruitful business and product ecosystem.

 

Before the birth of smart phones, HP was the #1 calculator supplier. Today, consumers simply purchase calculator apps on iTunes or on Google Play – at a fraction of the cost of a handheld device and consequently HP lost its market.

 

Within their ecosystems, Apple and Google provided a platform connecting app producers and consumers who need calculators.

 

Sony, though it had been the dominant force in both the portable music and gaming space, failed to create a successful music or gaming platform despite its technological prowess. Consequently, it allowed other players in the market overtake and outdo its music and gaming provision to consumers.

 

Garmin Satellite Navigation devices were also pushed out of the way by clever ecosystem creators. Initially, the company managed to sell lots of devices until the day, Apple, Google Maps and Waze established an ecosystem that allows users to easily use their mobile phones for their mapping needs. Of course, smartphones outsold Garmin Sat Navs quickly and the vast majority of people now choose mapping apps over dedicated sat nav devices.

 

Both iOS and Android platforms have established highly effective ecosystems and collaboration between producers, developers and consumers much to the chagrin of traditional manufacturers of products like cameras, voice recorders, flashlights and fitness trackers. Thanks to this platform-based collaboration, consumers are now in the lucky position of using one device for a plethora of functions.

Platforms and ecosystems are an entirely new way of providing consumers with traditionally one-dimensional products and producers and promoters of such products must broaden their horizons and embrace this new product and service provision method.

How the Media Will Rise in the Face of the Digital Revolution

Jan 15, 2017

 

Traditional print media has been severely shaken by the digital revolution that has pushed the industry into a downward spiral. Most media voices have lamented the loss of power and prowess and the entire industry is being catapulted into unfamiliar territory. Publications with golden traditions have had to re-imagine and redevelop their trade and embrace the digital revolution.

 

Apart from The New York Times’ quite successful digital media experiment in Latin America, most traditional news agencies have been reluctant to play the digital game.

 

Thus there is room for hope and one would like to think traditionally high profile news agencies will seize the opportunities provided by the digital revolution.

 

But how can an industry that is fed by print advertising revenue survive in the digital world? How will traditional media businesses actively participate in the digital revolution and monetize their print content in a digital world?

 

The Challenges and Opportunities of the Digital Era

 

Traditional publishers and broadcasters have seen their power wane relentlessly. Before the digital evolution, broadcasters and publishers held all the power. Viewers and readers were restricted in their choice of print media and TV channels and bigger newspapers and the best known broadcasters enjoyed higher distribution and revenue and greater power to monetize through the sale of advertising. All of these advantages have all but vanished as viewers and readers are now in a position to access media online from an enormous number of sources, all just a click away.

 

Social Media have further eroded the power structures of traditional media empires by allowing audiences to access and distribute news content. The way consumers access news content has changed entirely and publishers and broadcasters must now provide different content for a completely new type of reader or viewer.

To find some way of catering for the new consumer, publishers and broadcaster have been furiously creating bite-sized, easily digestible, compelling and shareable news items including some sensationalist content in an attempt to lure readers back and ultimately sell advertising.

While bite-sized, essentially sensationalist news items may work to engage in the short-term, there is also a growing awareness, that people still hunger for the top quality content provided in traditional newspapers.

In that sense, there is reason for hope and optimism and however much traditional publishers and broadcasters may be dragging their feet in embracing the digital revolution, the new age has brought a plethora of advantages and opportunities that would never have otherwise emerged.

The distribution cost of media content has been reduced to practically nothing and the global nature of the internet has produced a global audience for anyone who has content to share.

The importance and impact of quality content is however not to be underestimated. Clickbait type news have failed to capture in the long run and providing quality content is once again becoming key, much to the delight of traditional media businesses.

How Digital Content will be Monetised

Particularly young people seem to have embraced the concept of consuming digital media news, and publishers have started to adapt their content accordingly. Media research has however also indicated that in-depth content of 3’000 words or more is more likely to be shared and provide advertising revenue and serious journalists and broadcasters will take much comfort from such findings. Advertisers will take note too and return to supporting strong, detailed and informative content.

The digital revolution need not spell the end of subscription revenue either. Publishers can provide some content free of charge on their website and apply traditional subscription fees for the rest. Both will bring advertising sales opportunities and publishers only need to smartly choose which content suits which platform. A loyal readership will always be willing to pay for good quality content.

What Does the Future Hold?

The next wave of major change will come when Google, FaceBook and Amazon start to muscle in on the news market and vye for a share thereof. Of late, users are allow to monetize their Facebook news feed with videos, leaving a large proportion of the profits with advertisers. Google and Amazon are set to follow suit and render the exclusive news provider even more powerful when it comes to selling advertising space and gaining revenue.

The world of media news may have changed, but the hunger for quality journalism remains, and the enormous savings in distribution costs will allow traditional publishers and broadcasters to confidently remain a strong force in the provision of news to a now global audience.

And when monetizing social media content really goes in full flight, we will witness a return to exclusive media and a boost in advertising revenue.

Publishers and broadcaster only need to harness the change and grow with it.

Evolving the Application Platform from Software to Dataware

Dec 19, 2016

 

Every decade has seen major innovations in computing and a continual evolution of software, programming, network communication and user interaction.

 

In the 1990’s it was the rise of the internet and browser based applications as well as portable computing. During the 2000’s (noughties) smart touch device and SaaS came on stream and today, a new platform is being built with data intelligence combining software and cloud computing.

 

One could define this as a transition from software to dataware. Apps are no longer predictable programs but intelligent, data-trained systems. Application intelligence, microservices/serverless infrastructure and new user interfaces will determine how we use and benefit from intelligent apps in the future.

 

During the 1990s internet applications offering users search and e-commerce tools emerged and the old trusted PC had to give way to the elegant laptop.

 

The 2000’s saw the transition from client-server to Software-as-a-Service and the emergence of Amazon Web Services and Elastic Cloud Computer Service initiated the transition from hardware to software service.

 

Smart mobile devices were launched and quickly brought an array of apps. Apple entered the market with the iPhone in 2007 and the App Store followed quickly. Google launched the Android ecosystem to compete and apps were built to run on these smart devices. iPads, Kindles and Surfaces became available and interfaces grew increasingly more complex. The traditional keyboard soon had to give way to touch screen technology and developers began to build apps to suit the new devices.

 

Now, in 2016, we are witnessing the dawn of a new era in app construction, access and use. Apps are evolving from “software programs” to “dataware learners”.

 

Traditionally, software was designed and programed to carry out tasks and run predictably. However, this is about to change with the creation of intelligent dataware which sees a computer system continuously collect data, learn and make predictions. In short, traditional software is programmed while dataware is trained and predictive. Users are already familiar dataware in searches, predictive texting and credit card payment security and it is believed that soon, all apps will be intelligent apps.

 

The shift from software to dataware is underlined by three forces:

 

Application Intelligence

 

Intelligent applications collect and use data and anticipate interactions between user and device. Innovative data and metadata store, data intelligence systems and predictive intelligence are combined and connected on a constant feedback loop continually improving the performance of intelligent apps.

 

Microservices and Serverless Functions

 

Application Programming Interfaces (APIs), using microservice building blocks, communicate machine-to-machine and enable traditional apps to exchange information and interact with each other. “Bots” allow them to perform specific functions like calling a car service automatically via an underlying communication platform.

These serverless functions are a form of microservice and form the basis on which applications function, interact and process data and complete tasks for users without the user having to necessarily be involved in the specific process.

Natural User Interface

While touch represented a revolution in user interface technology, voice is the new kid on the block. Platforms like Alexa, Cortana and Siri already have more than 1’000 voice-activated skills. Voice and visual interfaces will dominate how people interact with applications. Touch technology is set to evolve further and soon it will feel natural to ask a device to open a file or play your favourite song.

Dataware Platform Challenges

 

  • SaaS No Longer Suffices

 

The emerging new intelligent applications will no longer be able run on monolithic SaaS systems and SaaS will need to be modernized to include data intelligence and microservice components.

  • Data Access and Rights

In order to function properly, intelligent apps will require access and the right to use personal data and this needs some form of regulation.

  • Multi-sense Interfaces

The coming years will see a further evolution of interface technology with the emergence of speech, vision and motion-sensor technology.

Over the next decade, the three trends outlined will see the transition from software applications to dataware learners and shape the future of user-device interaction. Multisense technology and intelligent application will change the way we live our lives once more.

 

How Location Based Experiences Are Becoming Increasingly Important in All Industries

Nov 5, 2016

Modern mobile devices are connected to so many location-based technologies, including beacons, GPS and Wi-Fi, that the opportunities for brands and businesses to engage their customers, often as they shop, are greater than they have ever been before. However, there are many challenges that brands face if they want to ensure their efforts actually engage potential customers.

Key amongst these is the need for the tech used by such companies to keep up with the ever-changing locations of customers by recognising the differences between beacons and Wi-Fi connectivity in order to deliver a desirable user experience. While making use of demographical data and browsing histories can help in this regard, it is the challenge presented by deciphering the data received from beacons and similar sensors that often causes the most trouble. This issue is compounded by the sheer number of proximity data technologies that are currently available, which number in the 350 region, each having their own data structures, APIs and SDKs.

Many companies try to make use of branded apps to get around this problem, as they allow for the gathering of fresh data to strengthen algorithms while also allowing for more focused marketing. However, no app exists that offers a comprehensive solution when it comes to engaging potential customers based on their location as there are so many variables involved in regards to why users may be in particular locations that the task is practically insurmountable.

However, many brands are embracing the challenges of creating platforms that offer better location-based engagement opportunities, often approaching the design process using a modular mindset that allows for platforms to be scaled and customised as needed. Such tech is finding its way into entertainment venues, shopping centres and even healthcare facilities in a number of ways.

Entertainment Venues

Brands are looking to engage potential customers before, during and after the live events that they attend and they are leveraging a number of useful data sources to do so. By combining demographical data, celebrity and proximity data, entertainment brands are able to inform fans of major events that are coming to venues near to them and can offer useful information, such as guides and maps, which can help them to get from their homes to their seats. The most advanced solutions also take things like the locations of concessions stands into account, while others allow for viewing replays of the performances they are watching right on their handheld devices.

This all allows users to stay connected to the brands at all points during live events, ensuring increased engagement and customer retention, which in turn extends the opportunity to monetise such events far beyond the actual the live experience itself.

Shopping Malls and Retail Centres

Branded apps are also becoming a key part of the service experience offered in retail outlets, with many using location-based tech to provide information to customers about the stores they want to shop at and their locations, such as by using GPS to provide exact directions.

Many apps can extend beyond this to provide users with information about special offers and other events at various stores, often by making use of online browsing history to find data about previous -interactions with stores.

This results in the creation of in-context promotions on mobile devices that are often activated as users walk past various stores. Furthermore, brands can also use such technology to survey users on the go to find out more about how they can improve their end products.

Medical Facilities

Patient satisfaction and providing quality care are two key concerns in the healthcare industry and location-based tech is coming to the fore again in this regard.

Many now offer apps that provide users with hospital layouts, directories and appointment reminders. Such apps can also be used to provide important notices, particularly to regular visitors, and additional information, such as articles on condition management, diet and other useful information.

Such apps can also be used commercially, especially in regards to tracking staff movements and discerning the most efficient ways to create hospital layouts. The location-based tech behind them can also be used to monitor patient movement, which is useful for improving service delivery in waiting rooms and determining how well patients are recovering from surgery.

The Final Word

As location-based tech improves it is likely that we will see more brands and organisations make use of it. While such tech has obvious commercial uses, the most interesting thing that we are likely to see in the future is non-traditional industries, such as education and healthcare, discover ways to use the tech to provide superior services to users.

Has Software Successfully Eaten The World?

Oct 19, 2016

The idea that all companies would eventually need to become software companies was first posited in Marc Andreessen’s famous “Why Software is Eating The World” and in the modern market it appears that the idea is more relevant now than it has ever been. However, it is not always practical for companies that operate in non-tech industries to adopt this line of thinking, which is perhaps why it is common for people to think of start-ups when considering the concept of software eating the world.

For traditional companies making the transition, focus and timing are often key.

Timing The Transition

The first step towards the transition into a software company is considering what is currently available and how this can be used to offer something innovative to users.

The evolution of Netflix is interesting in this case. The company started out as essentially an internet-based DVD renter, delivering films to people’s homes after they had rented then online. For some companies this may have seemed like enough as it offered something that traditional video rental companies could not in terms of convenience.

However, the ever-changing technological marketplace resulted in the evolution of the company in-line with faster internet connections, resulting in the movie streaming model that has not only resulted in even more success, but can be considered a primary factor in the dissolution of traditional video rental stores, like Blockbuster, which realised too late that the market had evolved beyond what they were offering.

Netflix essentially looked at what was available to them and considered how they could leverage this into providing an innovative service to users that filled a market need, much like in the case of Uber, which we will examine later on. Perhaps most importantly, the company has continued to innovate, particularly in regards to its fairly recent switch to content creator, as well as provider. None of this would have been possible were it not for the expert-timing that they demonstrated in bringing their software to market, coupled with the failure to recognise a changing market by more traditional suppliers.

Staying Focused on the Business Core

As mentioned, the transition is often most difficult for more traditional companies, as it often requires hiring many new people in all areas of the organisation, in addition to restructuring the economics of the business and establishing new infrastructure for customers and partners to interact with.

Even those that have healthy revenue streams need to understand the need for speed and comprehensive testing in this endeavour, which means they need to focus to make the transition as effectively as possible.

By focusing on the core of your business and its offering it becomes easier to work out how becoming a software company can benefit your end-users. This is seen in the evolution of Uber, which filled a gap in the market for the provision of accessible and affordable transport. The company identified that both riders and drivers essentially have access to a computer in their pockets thanks to the popularity of smartphones and they used this as a platform that would allow their service to bring drivers together with riders, essentially forming the core of their business upon which sub-cores could be utilised.

The fact that the company doesn’t own the cars that people book through the service allows Uber to place its focus squarely on its software and ensuring that it offers users what they need. In doing so, the company has fulfilled a market need through becoming a software company.

Such platforms also create boosts within their wider ecosystems because they allow for innovation, which companies like Uber can develop further from. For example, the use of the payments stack from Braintree within their core service allows Uber to benefit from the innovations of Braintree, in addition to any new innovations they themselves bring to markets. The ability to swap services within a software and whether a new service introduced will provide an experience improvement for customers must also be considered.

In essence, by focusing on your core in regards to software it becomes easier to focus on customers and their needs, allowing for greater utilisation of current and emerging technology.

The Final Word

The question now is how will traditional companies go about making the transition? The examples of Netflix and Uber show how important it is to stay aware of the developing technology around your business and how to leverage this to the company’s advantage. This is exceptionally difficult and many companies fail to accomplish this task, but it is one that is becoming increasingly important in a progressively more software-driven world.

References

http://www.wsj.com/articles/SB10001424053111903480904576512250915629460

Bot Design and Nielsens Usability Heuristics

Oct 5, 2016

Usability is an issue that many designers have to deal with when creating software interfaces. Many look to the ten usability heuristics created by Jakob Nielsen in the 1990s to help them solve the issue, but can such thinking be applied to bots? Let’s consider each in turn to find out.

  1. Visibility of System Status

This heuristic states that users should be kept informed of what is happening with a system at all times, which is a distinct challenge for bots due to the transient nature of messages. This makes it very difficult to provide constant updates while also allowing for the smooth flow of messages.

This issue can be countered by providing a system that allows customers to request system status information, while also ensuring speed in feedback. Bots need to be responsive to such requests, while also being able keep users informed on the progress made with such requests.

  1. A Match Between System and the Real World

At first glance it appears that bots meet this heuristic by their very nature, as they are able to communicate by using the user’s language and concepts that are familiar with them. However, a key issue with this is making it seem as though the conversation offered by bots is natural, which means they need to be able to understand language itself.

  1. User Control and Freedom

This heuristic states that users must be offered the freedom to undo and redo actions without having to deal with a complex dialog. Bots can meet this need by offering users the ability to delete and rewrite messages as needed while also making them aware of valid options.

  1. Consistency and Standards

This relates to the creation of platform conventions that put standards in place to help users understand what they can and can’t do. For bots, this means sticking to a single style of language at all times, allowing users to develop familiarity and not experience nasty surprises.

  1. Error Prevention

Design should consider the prevention of errors at all stages, rather than being created just to inform users of when they mess up. For bots, it must be assumed that errors will happen often, at first, due to a lack of precision in human dialog. Confirmation should be required from the user at all critical steps.

  1. Recognition Rather Than Recall

Users should not be required to memorise all aspects of their software use, so information should be made visible to aid in recall. Furthermore, system instructions must be reachable at all stages of the interaction.

For bots, this can be translated into providing concise messages that keep readers engaged. Many of the issues that bots face in this regard relate to users not reading messages, which often occurs when they are presented with walls of text.

  1. Flexibility and Efficiency of Use

The system should cater to inexperienced users while also providing facilities for experts to speed up interactions. This can be used in bot creation by offering users the option of asking for things to be retrieved via semantic questions or by entering simple commands to expedite the process.

  1. Aesthetic and Minimalist Design

Irrelevancy in design should be avoided as extra units of information compete with pre-existing ones, making those that are most useful less visible.

This is difficult with bots as there is a difference between the service being provided and the creation of relevant human interaction. Many users will start their conversations with bots in humanistic terms, often engaging in banter along the way. These interactions should not always be constricted by the need for conciseness, however, messages related to the actual service provided by the bot should.

  1. Help Users Recognise, Diagnose and Recover From Errors

This is simple enough in software and bot design. If an error is made, explain what it is in understandable language and how it can be reversed.

  1. Help And Documentation

This heuristic states that documentation should be easy to access and focused on helping users through specific tasks. This can be applied to the bot quite easily and it is likely that commands and questions will allow for help to be received during conversations in the future.

So What’s Relevant?

This results in six of Nielsen’s heuristics still being relevant to bot design, though the others can often be combined with these:

  1. Visibility of System Status – Users should be able to stay informed about system status at all times.
  2. User Control and Freedom – The bot should request information from users at critical junctures.
  3. Match Between System and Real World – Know your users and what they need.
  4. Help and Documentation – Provide access within the bot.
  5. Flexibility and Efficiency of Use – Provide means for users to accelerate their interactions.
  6. Consistency And Standards – Ensure the communication style remains consistent.

References

https://www.nngroup.com/articles/ten-usability-heuristics/

The Increasing Popularity of APIs

Sep 19, 2016

Over the course of the last five years we have seen increased innovation in the area of the application programming interface (API), particularly in terms of functionality within software. This has resulted in the rise of many third-party API companies that has led to a change in how software is both created and introduced to the marketplace.

Of course, APIs have been crucial in software development as a means to develop for specific platforms for many years, with organisations like Microsoft offering APIs that essentially make developers dependent on the interfaces if they wish to release software via such platforms.

However, in more recent times a new wave of APIs developed by third parties are reducing this dependency, making it easier for developers to bring their products to the market in the process. This has resulted in the traditional API model slowly giving way to more modular variations that rely on smaller microservices that can be integrated into complex software easily, allowing developers to place more focus on offering less restricted functionality while surrounding their offerings with functional processes that have been created by other developers through the use of these more open APIs.

Increased Efficiency

The time spent on creating functionality within an app is often time wasted in the modern environment, which has led many companies to make use of APIs from third-party developers and larger platforms to expedite the process.

This has led to a boom period for APIs, with websites like ProgrammableWeb being able to offer access to more than 15,500 APIs that can be incorporated into projects by developers. In most cases, these APIs allow for software to be brought to market quicker, which is beneficial both to developers and users.

Such APIs also offer a range of benefits, including lower costs, faster development and the fact that they are often simply better than the APIs that developers may create for themselves. Furthermore specialised third-party API developers often have access to larger data sets that allow for more comprehensive APIs to be developed and the creation of a network effect.

This increased access to data can manifest as benefits in a number of ways, such as the ability to curate retail transactions across hundreds, or even thousands, of different retailers, which can be used in the development of a wide range of software.

The Evolution of the Software Company

This shift towards API development has led to the evolution of software companies that are now releasing software as APIs, thus allowing them to offer a number of adoption routes. It allows for the creation of a scalable sales model due to the fact that the customer is often also the developer, leading to increased sales as customers’ usage of the API increases.

This is a trend that has not gone ignored by large companies. The likes of Salesforce and eBay have adopted API development to the point where this software now accounts for half, or more, of the revenue that they develop. This, in essence, alters the product offered by such companies from application to platform.

This model is also attracting enormous interest for entrepreneurs and investors, as developers are often more focused on creating APIs that offer tools to other developers, thus creating a more scalable source of revenue than trying to create the latest must-have app from scratch would.

Assuming the model is successful, developing APIs allows for efficient scaling and the development of networks that can be leveraged in a number of fashions.

A Shift in the Value Chain

The increasing popularity of APIs has led to an evolution in the value chain whereby the most successful companies are those that can bring together as much data as possible and make it accessible to others, which is a marked shift away from the previous model that saw the most successful companies aggregating this data and staying close to it, while imposing restrictions on those who may aim to use it.

It is likely that this proliferation of APIs and the popularity surrounding this model is only going to increase, especially as interest in microservices, big data and artificial intelligence grows stronger.

Furthermore, third-party APIs are increasingly being embraced within enterprise software development, which is likely going to result in the emergence of a number of large companies in the coming years that are more dedicated to this model.

In essence, the rise of the API has created a more attractive and efficient environment for developers, while also allowing for the creation of unique functionality within apps that can benefit users and the delivery of products.

References

http://www.programmableweb.com/apis

 

What is ‘Uberfication’ Doing To The Consumer Brain

Sep 15, 2016

Did you know that Uber has a value of over $50 billion? Or that the value of ordering food online has vastly surpassed ordering via talking on the phone?

Consumers are becoming more and more accustomed to simply and quickly accessing services and products on their phone, whether it’s to order food, accommodation, movies and more.

Companies such as Uber, Netflix, Postmates and Instacart to name just a few, are the movers and shakers who are creating this new paradigm that is literally re-wiring how consumers are thinking and choosing to buy.

Along with the likes of Uber and Amazon’s ‘Dash’ buttons and a plethora of other on-demand apps, this new economy is turning consumers into on-demanders, who are becoming increasingly impatient to wait for the time it takes to process traditional services.

What Exactly Is “Uberification?”

More and more services are adapting in order to satisfy customers who demand that their needs be met instantly and with an excellent degree of customer service.

With these new developments consumer impatience has risen to an all time high. Web performance company Akami Technologies Inc discovered that if a website is slow to load 50% of consumers would try a different site to complete their task and 22% admitted they wouldn’t return to the original site in future.

If your company website is too slow to load, or your ordering, or checkout process takes too long, you may be losing far more customers than you might think. This is only going to be exacerbated as this new, on-demand consumer psychology becomes increasingly prevalent.

Traditional, ‘brick and mortar’ companies, may meet this concept with some resistance, but it is quite obvious that this change is heralding a mammoth opportunity for companies to create innovations that accommodate this shift in the behaviour and expectations of consumers, which also provides an exciting opportunity for business growth.

Adapting To This New Consumer Psychology

This paradigm shift has led to a number of interesting developments, particularly in terms of partnerships between brands and service-based companies who provide their services on-demand. As an example, LiquidSpace, an online platform who rents out unused meeting rooms and enables clients to book workspaces by the hour, has partnered with the Marriott hotel chain.

Within the same sector, there is an increasing growth of concierge apps. Hotel Tonight is one company who recently introduced a concierge app and they also offer large discounts for last-minute bookings. This new service is extremely simple and straightforward, omitting the need to scroll through reams of choices and comparisons. It’s their promise that a boking can be made with only three taps and one swipe on a user’s phone screen.

Creating A More Efficient User Experience

Adapting your company to accommodate this new on-demand attitude is not about fancy gimmicks, but about creating a user experience that is smooth, time-efficient and straightforward.
With a little creativity and perhaps a potential willingness to partner with an affiliate company, any business can adapt to this new on-demand user psychology.

Predicting Trends

The most forward-thinking and successful companies are not simply waiting for issues to arise in order to invent creative solutions. Luxe is a valet parking company with a loyal client base, who takes customer service a step further by automatically informing customers if they expect an increase in traffic, so customers can prepare themselves for potential delays.

HBO launched HBO GO, after recognising a decrease in the number of customers who watched timetabled programs as they air; instead choosing to record shows on DVRs to watch later. Following this, they observed how their customers were utilising the new service; they discovered that a high proportion of their subscribers tended to watch their programs on mobile devices during a commute, or while on holiday. That led them to develop HBO NOW.

The brands that are most successful are the brands that put customer experience at the forefront of their mission. It’s vital that companies observe how consumers experience their products. Customers have the tools – literally- at hand to compare services all of the time and with the continued increase of ‘on-demand’ services, they are creating a new ‘on-demand’ economy.

Is your business ready?

The Shift Away From Apps

Sep 5, 2016

Recent studies are demonstrating that people are using fewer apps, despite the fact that people spend 85% of their time on smartphones, with 80% of that time being spent on three non-native apps that have been installed from the App Store of Google Play. While engagement with these apps is increasing, it seems that the data is skewed towards the most heavily-used apps, which are often those created by Google and Facebook. Messaging services, in particular, have seen increased popularity in recent years, perhaps demonstrating a desire for messaging within mobile activity.

The emergence of the continued development of chatbots seems to confirm this desire, as they allow for businesses and brands to interact with their customers without the need to invest in the development of apps, which would require customers to develop familiarity with user interfaces in addition to having a need to update regularly. No less a source than Facebook CEO Mark Zuckerberg is touting chatbots as a means to deal with app overload on the platform.

In 2015, it was also revealed that messaging platforms had actually overtaken social networks in regards to the number of monthly users, with such platforms considered to be ripe for brands and businesses due to the fact that their services can often be integrated into the user interfaces of the apps that customers have already become accustomed to. Messaging services like KiK and Facebook Messenger have already started to introduce bots that can be used for everything from paying bills through to checking weather forecasts, all in one place without the need for downloading additional apps. Furthermore, Amazon and Facebook have both been granting developers with access to their APIs in recent months so that they can take advantage of pre-existing platforms and use them to activate skills that are based around their bots’ natural language processing (NLP).

This move towards messaging platforms and the use of chatbots suggests an evolution that may lead us to a world where the app as we know it no longer exists. A preference for conversational user interfaces, which make use of text and voice, over graphical interfaces appears to be emerging, as can perhaps be best seen with the popularity of Siri and other chatbots that are able to receive commands and direct users to what they are searching for.

Chatbots are also continually evolving, gaining new abilities that allow them to search, connect and perform various tasks to the point where they could replace apps that perform similar functions. Simple actions, such as ordering a pizza, are becoming easier with chatbots and the challenges now facing chatbot developers revolve around ensuring the technology can understand natural language and execute commands based on vocal inflection and interpreted context, rather than parsing input based on context that is already provided. Upon that evolution it may be that there is no longer any need for apps, as a single, fully-developed chatbot would be able to handle almost anything that may previously have required an app.

However, while chatbots are usable in transactional cases, such as when ordering the aforementioned pizza or receiving customer service, questions still remain about how such technology wold be able to handle non-transactional cases, such as playing games. Text and voice alone may not be able to handle such cases, so it is likely that the development of more refined graphical user interfaces will be required to go hand-in-hand with the developing chatbots.

As for how this will affect the app and its future, getting rid of the need for customers to download and configure applications through the use of messaging platforms and increasingly complex chatbots offers brands and businesses with a potent channel through which they can engage with audiences and potentially attract new customers. Furthermore, the artificial intelligence of chatbots will also make them capable of consuming enormous amounts of data that can be used in a variety of ways, increasing efficiency in the process.

The most important difference is the fact that chatbots are flexible enough to conform with the ways that users live their lives, rather than restricting them to the pre-programmed paths dictated within apps. As chatbots continue to develop, it is entirely possible that they will replace apps entirely, however, there are still plenty of questions to be asked. Some see the increased focus on chatbots as a transitional step in the process of redefining consumption and input as platforms shift towards more recent interfaces based around virtual and augmented reality.