Our war room at Digitalist Vancouver.
I love online communities of knowledge. They were my topic in by bachelor thesis, and I have kept myself active in a number of them since then. Currently, I’m more of a wanderer than a member of specific ones. In Quora, I answer questions about service design, CX, editorial design, data-driven decision-making, semiotics and contemporary (internet) culture. This basically seamless effort has informed users over 50,000 times. That’s, to my opinion, a huge impact that one single person, only moderately active, can make in a topic. I highly recommend everyone to multiply their own knowledge of specific fields — even what they know about life and their own experiences. We often think whatever we need to write has to on the cutting-edge of what we know. We tend to forget that, as professionals, we may already be really advanced in our correspondent fields, and people may benefit from our day-to-day, assimilated knowledge.
Will we have a roaming network for all our needs in living?
Life-as-a-service is a concept of subscribing to solutions to common problems, and avoiding them to happen in the first place, as opposed to fixing problems as they happen. Life-as-a-service aims at a frictionless experience of life, where needs are tended to with the tap of a button instead of the entire process of prospection of solution, decision-making, purchase and delivery. To some extent, it’s thinking of services and benefits as the “Spotify of things” or “the Netflix of things”.
How we became services: giving up your CD collection
Reflecting about living-as-a-service brought me back to the research for an article I was working on a few years back, about the digitalisation of music.
When the first blow in music industry kicked in — Napster for music download, followed by Kazaa and The Pirate Bay — WinAmp was perhaps the most popular interface for listening to digital music. Winamp’s UI mimicked the stereo system layout, except it would display a playlist with the tracks you had in your computer, or the ones you dragged and dropped for one nice, late night music session while chatting on IRC on your 32Kbps modem.
It should be made clear that, while there was excitement about the amazing possibilities of finding free music, there was also an increasing feeling of grief.
On the bright side, one should remember how expensive albums were. One could not just order them through the internet with much ease. And then it was available for free, in peer-to-peer networks, a model that reached its peak in the rather poetic app SoulSeek, where users could browse download music straight from another user’s library — and, in the process, get to experience that longing and sublime identification with someone who share a similarly great taste in music (this concept is just so awesome, and for some reason the scarcity and perils of downloading music from someone else is unmatched with the industrial ease of sharing your own playlist on Spotify).
The downside of the revolution was that, quickly, we have noticed that something was missing. We didn’t own anything anymore. We merely had boring, single-icon files displayed in lists, activated when we wanted to listen to music. For as silly or awkward as it may sound, this was some sort of phantasmagoria that kept users buying buying physical albums for a few years, still.
Finally, iTunes came up with the sleek solution that would properly display albums. Cover artworks were in display again, virtual shelves were used to make the experience browsable. More than conforming to the skeuomorphic era of internet, iTunes, the iPod and the iPhone were driving what skeuemorphism should be.
But all of a sudden, shelves and artworks seemed more like an unnecessary nuisance than an actual part of the music experience. Of course, there has been and always will be a place for the graphic representation of music, albums and artists (that’s a core topic of my theory of paramedia, by the way). But the experience of music had very little to do with handling physical objects or controls. When music reached the music-as-a-service status, it became all about listening, not owning — all the social aspects of the experience were embodied by it in the act of sharing the music you listen to. So instead of displaying a fancy library of records in your housewarming party, the social aspect of music became the newsfeed that one populates with their log of “now listening”.
In many ways, this shift represents a torrent of changes in music (no pun intended). It was the shift from status of ownership to status of membership; status of object to status of subject. Status of assets to status of action. People who had great jazz vinyls, yet spent their time on guilty-pleasure pop, had to adapt to a world that suggested you to make it public what you were listening, when, and for how long. The state of mind in real time became the object of envy, finding its culprit in a soundtracked Instagram post in Bali or Tuscany.
The dark side: problems in a world-as-a-service
Much like in music, we seem to be overcoming the need of things in other aspects of our lives. We are overcoming, as well, the need of owning things. It’s not a coincidence the huge success of the KonMari method, where people are invited to declutter their lives, tidy up their homes and keep to themselves only the objects that spark joy.
With the end of ownership and the age of subscription, we may ask ourselves — as users and designers and innovators — what are the pitfalls and problems that this new model will eventually encounter. I say eventually because of the nature of innovation: it creates new problems. It doesn’t mean there are not solutions to these new problems, but every innovation is a system that, like anything else, must adapt to its environments to survive the long run.
One new problem I see in that is the saturation of the customer’s share of wallet. Just how much, exactly, will the average person need to be able to commit out of their budget to entertainment, transportation, housing, eating, going out and literally, anything else? I say that because the model of subscription is the preferred one for service providers. Few business models are more stable than recurrent revenue. It’s the “single push” loyalty generator. Yet we could choose to cut a few movie rentals on a given weekend to save for an upcoming concert. It’s not that easy to think in these terms in the recurrent subscription models. Surely you are able to cancel and resubscribe — but then we fall into the second problem I see in this brave new world.
The second problem is in the nature of access. A customer buys a record and it’s theirs for life, or at least while it physically lasts. A lot can happen to a fragile vinyl record, but the most careful collectors know that it can be played for a long time, with no intermediary regulating the access to it. In an economy of access, if there’s no money, there’s no honey.
An economy of access also demands a continuous mutual agreement, renewed at every session. Users need to be compliant to each rule — all the rules — at all moments. So if an user misbehaves, disrespects or disagrees with the rules, many of them set by community standards, when services are social networks, access is denied.
And lastly, given the fast scalability potential of these services, they may become extremely big and powerful, and become the gatekeepers of all content of a certain genre. Disney content will belong only to the Disney streaming service; Netflix series belong only to Netflix — and non-compliance does not prevent users to access content from one vendor. It prevents users to access all content from the only vendor.
Of course, these are bad scenarios to a vibrating, full of energy profusion of new services and possibilities. Users tend to have way better services, with competing vendors, than ever before — it’s just good to look at the blindspots that such radical changes may entice.
Life, as a service: Finnish start-ups advancing the field
Life as a service is getting real. Finland is a lab for a number of these, with extremely active startups doing what they love the most: testing innovations with customers, in public, usable, launched products.
To Jarkko Jakkola, Area Manager, Nordics & Baltics, at MaaS Global, one solution is to be the everything company for mobility. An user can just care about point A, then point B. Whim will fill in the gaps, wherever. While certain services are concerned in creating and allowing access, Whim has a different impact: “it’s all about promise”, said Jakkola. “Users need to know that if they are taking their kid to a soccer tournament, the car will be there, no matter what”.
“Mobile phones only picked up when companies were able to create a global network of phones”, he states. That was rather surprising, as common sense makes us think that all it took was one big, bulky, working cellphone to make the magic happen.
As Teemu Lehtonen (Chief of Digitalization of kiraDIGI) states, “we need solutions with decent UI out there so that users actually use it”. In Digitalist we use the usability pyramid view to discuss that with clients: it takes a cake slice from the whole pyramid, bottom to top, to make an MVP — not just a chunk of the bottom or a great deal of usability up to its middle.
While MaaS and Whim have a specific, powerful mission, kiraDIGI seems more of a magic box of new ideas. They have run over 130 experiments to bring new ideas to the public. Those range from paperless construction sites to robotic window cleaners. Their foundational spirit seems to be the bold idea of space as a service. The startup operates with venture capital and government funds, and promotes hackathons to fuel new ideas, continuously.
Digitalist’s event on topic: Innovation and the city
Helsinki is a highly technological city, and one of the most vibrant start-up cities in Europe. Third speaker in Digitalist’s event was Harri Tuomaala, CEO of the Finnish Housing Fair. The company is now part of developments in Jätkäsaari, a radically experimental and innovative neighbourhood in Helsinki.
For example, it’s the case of Wood City, a building complex — an office building, a hotel and two apartment buildings — displaying pine wood in its sumptuous architecture. That was a joint project between SRV Group and Stora Enso, and potentially putting Finland in the map of architectural tourism. Together with other gorgeous wood design, such as Löyly or the seaside pool, they strengthen the postcard profile of the city.
“You definitely needs partners”, says Tuomaala, stressing that the stakes are high for these impactful, substantial experiments. “You cannot know in advance that Löyly is an investment that will pay off; you cannot know in advance”.
Be it life as data, spaces, moods, atmospheres or entire neighbourhoods, a few things are clear: creativity, the right partnerships, complex ecosystems and rapid experimentation seems to play an essential part to it.
City Living – Living as a Service; event by Digitalist Group
City Living in Jätkäsaari: Harri Tuomaala, CEO, Finnish Housing Fair; Digitalization in Traffic – Mobility as a Service: Jarkko Jaakkola, Area Manager, Nordics & Baltics, MaaS Global; Digitalization in Real Estate and Construction – Living as a Service: Teemu Lehtinen, Chief of Digitalization, KIRAdigi. The complete program is available here.
This Finnish startup has interviewed me for their marketing course. Here’s what we have learned from each other
I have received the invitation on a late evening during the weekend, and immediately said yes. I mean, who says no for an interview? Really. They were after a few concrete theories of marketing, and being an early Millennial I can always tell a bit of the actual digitalisation of the entire advertising scene, from television to… well, the end of advertising (as we know it). But they were not really after that kind of content, but rather the way of working and how I could achieve it, how it affected me, and the right mindset I had at each point of my life that could support my skills as a communication professional.
That was a little bit of an awakening for me, as well. I have always been a critic to the idea that skills can be learned, therefore they are not important. That led me to a vision that continuously underestimated what a mindset represents. I was surprised on how honest I was be during the interview, which lasted almost forty minutes. It required opening up to a few vulnerabilities — and that opened up to understand the role of mindset, which I took for granted.
Heaving a focused mindset is a lot about resourcefulness and how much you are going to insist, and persevere (and pivot!) and keep on the game. Skills come and go — and they are an important part of it, because you really need to keep it up. And it’s not easy. The whole point is to be always a little bit outside your comfort zone, if you want to keep up at the cutting-edge (last year I have learned that “the tough way”, when I’ve decided with a colleague to start practicing Brazilian Jiu Jitsu; it was worth every single bruise and time at the heat of the dojo).
I said to them that I was one of the best in the click-rate optimisation field because when I started working on that area, the tools barely existed. It was the very beginning of AB tests, experiments and incremental optimisation. Now there are so many new tools, and I don’t know half of them. But the mindset of the experimenter somehow became more wholesome and crystallised after that.
Skillville is being released to Finnish audiences by the same people bringing Mindvalley to Finland, a startup focusing on education and self-conscious decisions. Finland, of course, is a great place for any startup in education to be. They are now piloting solutions to 27 Finnish schools at the moment. Want to see more of that.
The analysis of service and product performance falls short when companies try to make sense of data in a one-size-fits-all manner. I believe three main points are essential for getting started with your data-driven, customer-centric business:
- Growth metrics relate to the core of your business model
Is this conversion rate good? Is this bounce rate bad? Is this click-through rate optimal? Well, unless they are in some extreme, all those are relative. The important idea is to understand how these relations work in your business model.
The relations between metrics vary according to the very nature of your business. That helps to define which are the metrics that really matter. Companies often skip this step, because it’s so easy to hop into the reports from Google Analytics. But that creates confusion, not clarity.
- Growth metrics relate to one another
If you are launching an entirely new service, for example, you must understand what is the tipping point that gets customers to sign up, or to hit the purchase button, or to stay with you — those are not seen in numbers. The job is to translate those into numbers.
You will not find any meaningful business results after simply “increasing time on site”, or “increasing page views”. The trick is to understand how to relate a measurable thing to the core experience customers are looking for. That’s when you start leveraging the customer experience in your favour.
- Growth metrics relate to the kind of customers you have
Then compare the types of customers you are attracting (a monthly subscriber, a once-a-year buyer) to the effort it takes to get more of these customers (social media ads, referral programs, word of mouth).
Finally, what action to take upon which metrics — pick the one which will generate most impact.
While measurements are nearly an exact science, the relationship between data and business models is, by nature, full of uncertainty. The job is to make the most reliable system out of it.
Read the full article on the Digitalist.Global Blog.
Some companies that we know of — where our friends, acquaintances or ex-colleagues work now — are actually nailing that innovation thing. And that’s wonderful. But just how many ideas can they grow before things get out of hand?
Money leaks from small cracks in your framework. And most big companies are not entirely used to the new, lean way of doing things. They may be used to the way of thinking. We all are, we all read the books.
These big companies to which our friends work for may also be applying that way of thinking into some things they are doing. But rarely potential clients or acquaintances companies can say they are working full-speed on the governance of a portfolio of innovation.
Getting disorganised is part of the deal, but it shouldn’t be your part of the deal
A global CGT/Sopheon Survey concluded that over 79% of typical digital products miss the launch date. That shows there is real revenue wasted by delaying the launch date. It also means that the way of planning the launch can only be fundamentally wrong — if you arrive late for your personal trainer meetings 79% of the times, you may clearly see there’s something wrong with your routine; either the map route, the commuter hours or your personal scheduling skills. She will be on it, and make you pay that valuable time in ab crunches, to say the least.
Another alarming information from the International Chamber of Commerce, in Paris, released in May 2018 is that their global survey shows that 60% of banks are planning more impactful digitalisation, although only 9% say technology solutions have so far increased their efficiency.
It gets more interesting: according to Gartner’s 2017 reports, 58% of CEOs rank growth as No. 1 priority of CEOs. That would sound like business as usual, but no. In 2016/2017, growth was a priority only among 42% of CEOs. Still according to Gartner, that means CEOs are willing to invest heavily on technology, sales and product innovation. And new things, as we all know, bring new problems.
Now, imagine a situation of a company launching one product after another, always late. Someone’s reputation may be at stake. Someone will soon start joking about your utter inability of keeping deadlines. Due to the delay, the planned sales goes down, because you just missed one month’s worth sales. If the smallest thing goes wrong, the whole project starts to become a joke. Credibility tends to be harmed. And when the pace gets faster, it gets worse.
We have been working with a few companies that had kickstarted an internal startup. Later on, another. In a year or so, they had 6 internal startups. So three questions rise:
1. How do we keep these startups on track, so that money doesn’t leak from the cracks?
2. How do we ensure that new good ideas move faster, won’t get killed before they get a chance?
3. How do we ensure ideas will change into something better if they are not fit for the market?
We have combined several known frameworks to build our own. In the heart of the method, design it simple, make it measurable and grow it by results. And it works.
We often recommend our customers to focus on four principles:
Start as simple as you can, and focus on the one metric that enables growth. See, it’s not the metric that will tell you that your idea grew. It’s the metric that actually enables your idea (your business) to grow sustainably. Sean Ellis, from Growth Hackers, talks about this as the North Star metric. We have created our own way of defining these levers — keeping it at high and tactical level, and pairing those to a few other metrics. (Yeah, our alchemy is exclusive!)
2. Buy the CFO a beer
Combine this metric with the CFO’s favourite metric. Probably it’s revenue, but it can be recurring revenue, or full-price sales, or new buying customers, repurchase etc. Talk to the CFO. Get him to open up how growth is planned in your company and what are the realsources of revenue, not the apparent ones only.
3. Same rules, same game
Put everyone to work with this same metric. Enough said. No matter what they do. That’s one heck of an efficient way to break down silos, harmful rivalry and that annoying complaints of “I don’t have any idea of what is going on” (despite the fact this person has never asked a single question to know where we all are).
That’s the most important part: draw a milestone plan, with at least three milestones. You don’t even need to plan very much ahead before the first ideas cross the more advanced milestones. Start with a simple table saying “is this idea working?”, and base the answer in your growth enabler in reverence to your revenue metric. On the second milestone, say six months from now, focus on your customer experience. And on the third and more complex level, focus on making each idea being reported in the same place, by the same metrics.
Eric Ries, from The Lean Startup, calls these Innovation Accounting. Then you can simply focus on the governance of ideas that are already working. We have used many of his principles now, and adapted a few points — probably pioneering the practice in the Nordics, for example.
There it is a bit of the Silicon Valley, of our San Francisco state of mind, of the Netherlands data design, of the Helsinki design process, of the Stockholm design minimalism and more references that we took, transformed, adapted, adopted and saw that works.
Read more of my articles and dozes of valuable content from my colleagues at Digitalist.Global.
The Nieman Lab just published a study saying that some podcast listeners are “superlisteners”. I have Identified thrice with their findings.
That 5-minute video on YouTube — or Gartner’s 3 minutes length podcast publicising some event — are remarkably costly, time-wise. When you are actually looking for meaningful content for the day-to-day life, such as news or a “learn something” kind of thing, or a weekly summary or a political or business commentary, the odds to find something of quality (with a satisfactory publishing pace) is surprisingly low. That is, of course, if you’re not willing to support an aspiring comedian with a podcast or YouTube channel that covers a watered-down version of an interesting topic, making it more palatable, yet superficial and filled with bro-humour.
That’s maybe because our current mediascape is filled with producers that do some good niche stuff, but not that frequently, or producers that produce a lot of stuff, some of them in a certain niche, some of them, occasionally, good. I take, for example, TED Radio Hour or Vice Magazine. Great stuff, but not always covering my cup of tea.
According to Nieman, the super listeners have a few characteristics (and I’ve ticked all of those boxes):
Super listeners consume twice the amount of podcast content compared to generic listeners. “The average number of shows listened to per week was much higher with Knight respondents (13) than with weekly podcast listeners from the Infinite Dial (5),” the report notes.
They are loyal evangelists of the medium. The report notes that 96 percent of surveyed super listeners had recommended a podcast to a friend.
These listeners prefer in-depth content, and increasingly prefer digital consumption over broadcast.
So when you talk about shortform content, you need to take the time to find something worth watching, then you do it, and then you end up having to go through the process all over again.
Instead, commuting listening to 30-40 min. audio or going to bed with a 30min. sleep timer keeps me always learning something new. With no need of going back to the phone every few minutes and go again through the enormous trouble of finding something decent to watch or listen to. I definitely tell my friends about it, and I’m planning myself one.
Most decision-makers drift away when something slightly difficult to understand. That happens with conversion optimisation, and this attitude comes with a cost. “That’s for specialist, geeks and engineers”, I feel them thinking. And they are partially right: there are just a few hours a day for a decision-maker define where everybody is going. Who has time for tactical work (for example, making one single project better) when one can be dedicated to strategic work, and make all new projects better.
But that’s the catch. From my experience with CRO (conversion rate optimisation), the job is always tactical, but the work — and what you learn with it — is always strategical.
And that’s also the fascinating side of it. First, you get to see what you are missing out by not experimenting, constantly, frequently and even better, continuously. It’s short-sighted to perceive the activity of experimentation as merely changing the colours of buttons. Sure, you can change colours of buttons and get a tiny increase in clicks. But once you increase — even a little — the impact of these experiments, you start to have as takeaways the understanding of consumer behaviour. And that includes principles, motivations, openness and elasticity.
Take, for instance, one experiment we have conducted in a daily-goods, grocery store type of client. When adding something to their cart, the users were simply informed of their product-to-cart addition with a red notification on the top left corner of the page. They were then staring at the product they have already bought. Having time to think if they really need it? Calculating how much they could be saving if not purchasing at all? Uninspired of what to do next? Yes, uninspired of what to do next.
We decided then to add a pop-up window informing what they have added, and suggesting related products, insurance and other add-ons. Basic stuff. At that point, Amazon was already taking users to a totally new page after purchase, totally dedicated to based on what you bought offers. But we decided on the modal, pop-up window.
What happens next? It flops. Users were hitting the Go to checkout button right away, making it easy to check out. Was that an indication that the site sucked so much that users wanted to get out as fast as possible?
We then changed the layout of it. We made “Continue shopping” a dominant button, and “Go to check out” as faded, small text under the button. And it worked. It worked so much that the modal window became best practice in our team, offered to a number of clients in other eCommerce categories.
We had a significant increase in conversion rates, maintaining the average order value. Now that’s great optimisation. We ended up increasing the revenue of the client in about 100K per year. All that done with a few weekly hours of experimentation, and the willingness to let us do the work, and be patient, because false indicators are common if you don’t let the experiments run for enough time.
On upcoming posts, I will talk about the major pain points, barriers and difficulties in running experiments, as well as the future of it with AI.