The Network Garden - Mark Sigal's Blog

BrightStreet Ventures launches BlueList

BlueList began as a "what-if" conversation in February 2013 with my BlueList partner-in-crime, John Hickman. John, who is the Managing Director of the San Diego Division of NewMark Merrill Companies, had noticed two concurrent trends crushing retailers, and surmised that there had to be a better way.

The first trend was that the traditional ways that merchants bring customers through their doors -- Newspaper Ads, Direct Mail and Yellow Page Directory listings -- were no longer effective.

The second was that merchants, desperate to find customers through any means, were signing up with deal voucher sites (Groupon, Living Social), which not only demanded exorbitant revenue shares on every dollar generated, but also forced margin destroying discounting.

Sold on the promise of customer acquisition costs and lifetime value models, they instead found high churn rates and a diminution of their brand.

The original notion for the BlueList was a craigslist-like simple system for enabling merchants to create real time offers that would broadcast to consumers smartphones when they were nearby. That basic notion has carried us forward, albeit with lots of learning and course corrections along the way.

What was a team of two, now has grown to include mobile app developers for iPhone and Android, back end software engineers, sales people, marketing people, admin people, web designers, graphical designers and a great support team.

We are also blessed to have great shopping center partners, in addition to NewMark Merrill, that include Regency Centers, Combined Properties, Westwood Financial Corp. and DSB properties. 

BlueList is one of two ventures launched by BrightStreet Ventures, the real estate technology affiliate that I run (Datex Property Solutions is the other), and the common thread between both is great partners, smart partners, driven partners who you can also break bread with.

If you are interested in experiencing BlueList from the consumer perspective, sent a text to 313131 with "BLUELIST" in the body (one word). Then click the appropriate link that returns. If you are a merchant, and want to understand why BlueList's cloud-based Offer Management System (OMS) changes the game, go to GetBlueList.com, and click on the 'Merchant Login' link. 

(What follows is the Press Release announcing BlueList)

BLUELIST LAUNCH DRIVES MORE THAN 400 OFFER REDEMPTIONS FOR MERCHANTS

Mobile service enables merchants to broadcast real-time offers to nearby consumers’ smartphones.

WOODLAND HILLS, CA, JULY 28, 2015 – Smartphones and mobile apps have forever changed the way consumers shop and merchants promote their business. Embracing this truth is BrightStreet Ventures, the technology affiliate of shopping center developer NewMark Merrill Companies, who has launched BlueList, a real-time mobile offers service for local merchants and nearby consumers. The service, which launched on July 4th, has over 60 merchants signed up across a wide range of retail, restaurant, and service categories in Southern California's Conejo Valley (Ventura County), and hundreds more across San Fernando Valley (Los Angeles County), including Coffee Bean & Tea Leaf, Gold’s Gym, Fazio Cleaners, Cold Stone Creamery, PostalAnnex, Subway, Walgreens, Regency Theatres, Jersey Mikes, and Sport Clips.

The initial launch event took place at Janss Marketplace, a community shopping center in Thousand Oaks, Calif. During the launch, more than 20 merchants at the center created special offers on BlueList. Over 500 people from Conejo Valley downloaded the free consumer app on their iPhones and Android smartphones. They quickly generated over 400 offer redemptions. Best of all, it was from the merchants that they already like, a win-win for both merchants and consumers.

“What makes BlueList so compelling is the fact that we can easily post offers that meet the real-time needs of our business (via BlueList’s cloud-based Offer Management System). There are no middlemen involved, the cost is compelling, and the system gives us the data that we need to fine-tune our efforts. It’s a game-changer,” said Jose Romero, District Manager at Coffee Bean & Tea Leaf.

Unlike deal voucher sites, which take a weighty revenue share, merchants can post mobile offers in BlueList for only $.99 per offer per location per day and time-limited flash deals for only $2.99 per offer per day. There is no revenue share and BlueList doesn't have start-up fees, memberships, or contracts for the merchants. There are no lock-ins or hidden costs of any kind, and it’s in a different universe cost-wise than if a merchant were to create and maintain their own application.

What also separates BlueList from deal sites like Groupon and Living Social is the fact that BlueList’s high concentration of offers in a given geographic area means greater consumer choice in each neighborhood BlueList serves.

BlueList is the end result of an 18 month outreach effort with local merchants, national chains, and shopping center owner-operators. A central goal of BlueList is being able to work in all kinds of neighborhoods and with all kinds of merchants. This has led BrightStreet Ventures to partner with shopping center operators like Regency Centers, Combined Properties, Westwood Financial Corp., DSB Properties, and NewMark Merrill Companies to give their merchants a simple, self-service – and instant – way to create and update offers based upon just in time market engagement objectives. (Merchants can sign up for BlueList, and create offers in a matter of minutes by clicking on the BlueList’s Merchant Login tab at www.GetBlueList.com.)

“While working with our over 1,500 tenants in three states, it became obvious that to be successful, tenants needed to have both an in-store and an on-line presence,” commented Sandy Sigal, President and CEO of NewMark Merrill Companies. “The options available to our tenants were either paying a huge revenue share or needing to pay very large monthly commitments, and nothing provided a real-time opportunity for merchants to connect with consumers moment by moment. This led us to come up with something we believe our customers and tenants will value, an inexpensive, localized, and real-time marketing platform that puts our small merchants on the same footing as the larger ones who can afford more expensive on-line platforms.”

BlueList provides consumers with a beautifully designed proximity app, one that highlights daily deals at the places around them they already like to shop. The BlueList is full of hundreds of everyday offers at your nearby center, or within a short few minute drive. The best thing for consumers is the app is free at iTunes and Google Play (or at www.GetBlueList.com) and the consumers don’t have to buy vouchers through the app.

When consumers are hungry, want to shop or need any service, they simply scan the app for nearby stores, and then visit the merchant who is offering the savings. The local surge of both merchants and consumers “getting BlueListed” suggests it will redefine and reconnect local stores with nearby consumers.

"In talking with hundreds of merchants over a number of years, it became clear that the traditional ways of bringing customers through the door are no longer effective, and the alternatives leave a lot to be desired. Mobile completely changes the game, offering new ways for local merchants and nearby consumers to re-connect," said Mark Sigal, Managing Director of BrightStreet Ventures. "It’s a community first endeavor, and BlueList is built to be the bridge between bricks and clicks.”

Offers are sortable by Nearby, Popular, Category, or Favorites. You can even Search within the Listing to find specific items of interest. When you redeem your offer, you can provide feedback on the experience directly to the merchants themselves.

About BlueList

BlueList was developed by BrightStreet Ventures, the technology affiliate of NewMark Merrill Companies, a shopping center developer with a 30+ year operating history and a 1,500 tenant real estate portfolio. The Company has partnered with a number of other shopping center owners, including Westwood Financial Corp., Combined Properties, Regency Centers and DSB Properties to maximize the breadth of neighborhoods that offer BlueList. For more information on BlueList, visit www.GetBlueList.com, or Get BlueList’d by downloading our FREE iPhone and Android software. Simply text the word “BLUELIST” (one word) to 313131, and click the appropriate return link. For more information on BrightStreet Ventures, visit www.brightstreetventures.com, or call (818) 880-4400.

COVERAGE: New service offers real-time local mobile offers (Chain Store Age)

Related

1. Real Estate Intelligence: How Software is ‘Eating’ the Real Estate Business
2. Ruminations on Retail: Why We Launched BrightStreet Ventures
3. Understanding Retail's Reboot: Four 'Big Picture' Trends

Real Estate Intelligence: How Software is ‘Eating’ the Real Estate Business

Netscape founder (and successful venture capitalist) Marc Andreessen once observed that software was “eating the world” in the sense that technology was moving into industries that once seemed immune from disruption, changing them forever.

Gone are newspapers, record stores, bookstores, video stores and Radio Shacks.

Change is in the air. Amazon is swallowing up Main Street. Uber is transforming transportation. Apple and Google are heralding the age of mobile, data-driven computing.

Whether you are in Retail, Commercial or Residential Real Estate, an essential truth surrounds you: you are either riding this wave...or getting swept up by it.

This article presents a new approach to real estate portfolio management called Real Estate Intelligence that embraces this new wave. Real Estate Intelligence is built on three cornerstones.

Read the full article, which I wrote for RealcommEDGE, the leading publication for real estate technology, HERE.

Disclosure: Datex Property Solutions, one of the portfolio companies of BrightStreet Ventures, which I am Managing Director of, is featured in this article.

Related

1. Ruminations on Retail: Why We Launched BrightStreet Ventures
2. Understanding Retail's Reboot: Four 'Big Picture' Trends

Ruminations on a Watch and a New Era at Apple

"We continue to innovate. We continue to push forward. All of our energy is on making the best products in the world, that empower people, that enrich their lives. This is what Apple is all about. This is what EVERYONE in Apple is focused on." - Tim Cook

Weird and Wonderful. Brilliant precision coexisting with fuzzy purpose, an occasional manufactured quality, a sense that the product this time may actually be ahead of the message.

Think of the medley of ideas put forth today, and their presentation. 

Apple changed the narrative today. The Apple of Jobs was the Crazy Ones that had succeeded against the odds and cultural mores.

The Apple of Tim Cook is about the values, responsibilities and sense of privilege that go with being an institution, as Apple has assuredly become.

It was all on display today.

Consider, in no particular order:

1. How many amazing, beautiful videos did Apple present today that were crafted with cadence, visual artistry and narrative.
2. Jony Ive's voice was a star of the event, delivering annunciation and clarity of purpose. If they ever remake 2001: A Space Odyssey, I am totally voting for Ive as the voice of HAL. Yet, Jony Ive, the person, felt strangely absent from the event.
3. Apple hearts China, as was evident from its stores, markets and share of video footage. And well it should. Is there a non-native brand that is even remotely as China-infused as Apple? 
4. The Game of Thrones trailer was the "money shot" of the HBO Now exclusive announcement, and it was great. At $14.99/month, it's a cord cutters delight. On the other hand, this really helps ESPN, as the cable and satellite guys need exclusivity to keep their business model from losing its share of margin.
5. Apple Pay and Apple Watch feel like a match made in heaven. The idea of frictionless commerce, as evidenced by the Coke Vending Machine example (100K units by the end of the year), is just..WOW! Apple Pay's network footprint is over 700K locations across the US.
6. The idea of Apple Watch evolving into a Key Fob is a killer app. The hotel key is certainly cool, and you can see how being on vacation would be really cool if you could go around with just your phone and watch. Similarly, you can see why your Audi, Mercedes, BMW, Tesla and Scion would be logical, how Car Play might augment it. You can see your front door or garage opening, and the tie in with Home Kit. There is, however, a question of how the Fob would work in phone less mode (ideally, quite well), and how it's secured.
7. Employee Fleet Management feels like a killer app. Take the above Fob, make it your office key, time card. Tie in the health element, which can funnel better insurance rates. There is a subsidy to be had in that, no? One can imagine IBM being adept at targeting verticals within this domain.
8. Apple's strategy is best thought of as a real estate play. There is a continuum from Desktop to Lap, Pocket, Bag and Wrist. There is Retail, iTunes and Apple Pay. iOS devices are now priced between $69 and $17,000, as Horace Dediu noted. Who says iOS can't support a wide variety of business models? 
9. The "Here" Now Device. Apple Watch is the device where the app and the user's contacts can know that you are wearing the device in a given place right now. The Uber app was a great example of how this can work.
10. ResearchKit. This was another one of those weird bolt ons, that is beautiful at the same time. ResearchKit is software framework that turns Apple Watch into a powerful diagnostic tool. Apple announced five apps - Parkinson’s Disease, Diabetes, Cardio, Asthma and Breast Cancer. They made it open source, touted how they empower the individual, give them privacy control and the ability to choose what data is shared.
11. The Field of Play of the Apple Watch includes numerous Wrist-able actions, like glances, twists and hard presses. The combination of Haptic and Taptic is a powerful idea that can grow over time. The concept of being able to answer the phone, getting health cues, "stand up and walk," and do Siri -- arguably more naturally made for the Watch than the phone -- and the idea that messages can easily be shared, or generate haptic, visual or aural manifestations is really cool.  

Yet, here's the deal. iPhone was a "you know you've been wanting something like this, but didn't know it was possible" type of device. Everybody wanted one, it laid right on top of the iPod and iTunes, and there was nothing so caveat free in mobile before it. Once the iOS Ecosystem and App Store took root, it was a forest fire.

By contrast, Apple Watch is a schizophrenic beast. It is a harmonious extension and unique derivative of iOS and the iPhone. It is a luxury watch. But the fact that it's an Amalgam of both makes it some kind of Other.

Will watch enthusiasts flock to it? Will non watch wearers? Which segment of the market will embrace it, or not? Will it take off like iPhone did, and keep going higher, or will it reach a certain baseline and plateau, as iPad has.

UPDATE: Richi Jennings wrote a piece in Computerworld that referenced this post. It's title is a somewhat dismissive take about the Apple Watch called 'Apple Watch -- people HATE it (except $17,000-spendy 'douchebags'). Here's why..."

Related

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Selling Stage Matters: A Tale of Two Sales Managers

Years back, I started a company that built products that were (initially) selling to the early adopter "visionary" market.

It wasn't our stated goal to sell to visionaries. It just turned out that we were early.

We went through a few sales guys.

Sales were lumpy, and every deal was a hard fought win.

What got the company over the hump was Early Sales Manager (ESM).

Early Sales Manager approached customer opportunities as a negotiation between Sales and Engineering.

Do what it takes to win deals.

Visionaries want this custom feature or that; so give it to them.

It was the right answer for the moment, and it worked.

The Engine of Growth had started.

A Fork in the Road

As the company grew, the tactics that ESM used to win deals, and the maverick mindset that it took to make those moves in the first place, hit a point of dissonance.

The company was finding product-market fit, and so it became more important to think about product lifecycle, sales model and selling organization.

Exit Early Sales Manager. Enter Growth Sales Manager.

Growth Sales Manager (GSM) brought a philosophy, a discipline and an organizational approach to growth.

GSM view of growth anchored the company's products as a combination of recurring revenue and one time lump sums.

It presented a richer view of how to exercise financial management THROUGH sales management.

GSM's view was that this drove a specific selling methodology, strict quotas and strong reporting.

Most critically, GSM embraced the view that the organization was a more than the sum of the parts exercise.

And the company was better for it.

Within two years, the organization grew into a vibrant business, first partnering with the Number Two player in the space, and then selling outright to the Number One player. 

Flash Forward: The Next Company

Once again, the company that was early.

The founders felt certain that GSM could do for their growth what he'd done for the last company.

But GSM failed to find the same magic.

In the end, he flailed so bad that he needed to be put out of his misery.

What happened?

In retrospect, what had happened was that whereas Early Sales Manager excelled at the Early Stage type of deal, Growth Sales Manager excellent at cultivating and harvesting.

Whereas ESM struggled once order and consistency were the name of the game, GSM struggled when the ability to tap dance, and use gum and tape to cobble deals together was required.

The moral of the story is this.

Know what stage of the business you are building, and know what type of selling method and sales management you need for that stage.

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Nine Technology Trends that will Change Everything

The road ahead is finally becoming clear.

From the moment the web entered our conciousness, to when it became evident that the newspaper business was going to die, the writing was on the wall.

Blood in the streets was to be the new normal, and certain types of companies would seemingly collapse overnight. 

One moral of the story was that in the connected age that which can be commoditized would be commoditized. 

The realization of this truth has been painful, though. It's taken over a decade to play out. A lot of jobs have been destroyed. Many more have seen their earning power squeezed.

The shift from a W2-driven Model to a 1099-driven one is emblematic, rendering both economic and psycho-social impact.

But the incredible news is this. With so much change and so many worker bees suddenly cast into entreprenurship, necessity became the mother of invention, and LOTs of innovation and invention was created.

Vertical Integration and the Blended Age

A by-product of all of this innovation is that the tremendous amounts of R&D spend, the emergence of data-driven insight, and the maturation of the tech industry fabric has lead to really good native experieces to users.

The new models are born of the notion that differentiation is about curation, integration and cultivation of an ecosystem.

As platforms mature, a wide variety of service/business models take hold that are both integrated and organic. One only has to look at Apple, Uber, Google, Amazon and AirBNB to see this playing out.

My meta thesis is this. Vertical Integration from customer to connector to code is the new wave.

The rise of mobile has sealed the deal; that's now the best way to deliver great user experiences, and consumers will increasingly expect to be delighted by seamless, rich, real time and highly mobile experiences.

The beneficiaries of all of this goodness creation will be far and wide.

This the new engine of growth. It will operate with nine (9) primary "gears," detailed below. 

Each of these gears will offer deep utility and delight as standalone offerings, but will also be "blend-able," yielding value chains previously unfathomable:

1. Artificial Intelligence: The idea of algorithmic, machine and data driven learning is already in plain site. Google is the patron saint of this domain.
2. Genetic Engineering: Does anyone doubt that now that we have unwrapped the Code, we are going to fully explore its implications? 
3. 3D Printing: If we can 'print' microprocessors on silicon wafers, who says we can't print limbs, custom vehicles, cities and matter itself?
4. Drones: This is how the robot age begins to become omni-present in our culture.
5. Virtual Reality: Close your eyes. Imagine the metaverse of Snow Crash, and know that it's within reach. Within five years, this will no longer be science fiction.
6. Renting Economy: Anything (people, product or service) will be able to be procured on-demand at a real time market price, and it'll be as easy as pushing a button.
7. Security and Privacy: Data breeches and indentity theft are seemingly unstoppable. Such challenges are bound to inspire tremendous technology innovation in obvious and non obvious ways.
8. Mobile Native Cloud: This is the connective tissue that ties mobile environments together, enabling autonomy, community, continuity, community, media experiences, gaming and apps.
9. Mesh Networks: Once upon a time, it was hard to fathom needing a computer in the home. Now, everyone has SEVERAL devices, and many more internet-capable things are funneling into this domain (see Apple Watch). Rich new experiences will coalesce around medical, security, entertainment, daily health and communications.

Netting it Out: The tide is rising in multiple domains, and this is a wave that we will ride for many years to come.

Related

1. Standing the Test of Time: 5 Thoughts on Apple Watch
2. The Mobile Native Cloud: An Extensible Post PC Model
3. Uber and the Art of Reinventing and Industry (GigaOM)
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Different Relationships with their Phones: iPhone versus Android

Two weeks of App Testing with Consumers spotlighted for me the fact that iPhone & Android users have VERY different relationships with their phones.

The test case is a mobile marketplace that we are building that has separate iPhone and Android apps.

The biggest difference between the two testing groups was that the Android users tended NOT to be mobile-first types, and tended not to be native app types.

From my own experiences building apps and then using the same apps on both platforms, it's a vicious cycle.

On the one hand, development is necessarily focused on an ideal target device with the latest version on Android.

On the other, the phones out in the wild have so many different form factors, and so much variety in terms of what OS is installed, that the experience never feels optimized.

iPhone is the exact opposite of this approach, which is why most iPhones and iPads are running the latest version of iOS.

Let me be clear. As a developer, you **could** optimize for all of these variations of Android, but it would take so much testing and optimization, that it would come at a cost of building new functionality.

No less, the Android end user wouldn't necessarily care about the extra effort in the same way an iOS user does.

Like I said, it's a vicious cycle. 

Case in point, in the new app that we are building, one question in user testing was how important having a desktop web version of the functionality would be.

Get this, 90% of the Android users thought it was pretty important, most commonly because the test user saw the PC as the central part of their computing experience -- even though the app is for a highly mobile type of action.

By contrast, 90% of the iPhone users looked cockeyed at the question, noting that the action is designed for palm in the hand, on the go types of behaviors, adding (I'm paraphrasing) that their iPhone is their hub, not the PC.

Same questions. Same product feature for feature; a variety of young to middle age males and females, and the only difference is iPhone versus Android.

Related

1. 5 Thoughts on Apple Watch
2. Apple's Segmentation Strategy, and the Folly of Conventional Wisdom
3. Innovation, Inevitability and Why R&D is So Hard

INFOGRAPHIC: Waves of Change

For the past several months, I have been doing a lot of analysis around the Millennials.

This lead me to need to compare it to Baby Boomers and Generation X.

This is the Narrative that I captured looking at these different Eras.

Please consider this a Straw Man to Pick Apart, Extend or Rethink.

Note: Click Image to see Larger View.

Standing the Test of Time: 5 Thoughts on Apple Watch

“Apple builds great products that enrich people’s lives.” – Tim Cook

Continuity is the idea that from Mac to iPhone to iPad to Apple TV to Apple Watch; Whether connecting from Home to Health to Car to the Enterprise, there is a unity of experience that is contiguous; it flows.

In the Apple universe, someday soon, when driving in your car, CarPlay will kick in. Your Key Fob that unlocks your door, starts your car, syncs your music, sets temperature and aligns seating preferences will be in your Apple Watch.

When you walk into your living room, HomeKit will recognize your watch and unlock doors, set temperature controls, lighting and turn on the tv for you.

When you go for a brisk walk, pursue an ordinary day, or visit the doctor, HealthKit will kick in.

It will make you fitter, smarter about your health, and allowing primary caregivers and new forms of health service providers to have access to the information they need.

That way, they can take better care of you.

When out on an errand, and want to stop at Starbucks, Walgreens or Subway, Apple Pay is a touch away.

This is just logical, and the ultimate payoff of the next wave; namely, the notion that our myriad of devices and device-aware services get embedded to the point of invisibility. They just work all of the time. 

Does this Watch Tick?

Such is the entry point for me in thinking about Apple Watch.

Let me begin by saying that I am deeply conflicted about Apple Watch.

There is a large part of me that looks at what Apple is doing in terms of creating a new kind of product and a new platform with a thriving ecosystem that supports it, and just marvels.

Who else could credibly pull this off but Apple?

The sheer artistry in what they created. The watches are unquestionably beautiful. Apple had to expand its understanding of new kinds of metallurgy, buckles, and sapphires, in the same way that they once had to figure out glass, screen and other fabrication technologies.

The addition of haptic response to touch based interaction opens up new forms of “reach out and touch someone” based communications and experiences, which I can see being great and tingly.

The basic structure of the Digital Crown is very well thought out, and magical in its simplicity and elegance.

From Faces and Glances to Siri, Quick Boards, Notifications and WatchKit apps, there is a grammar that is visible, coherent and which appears logical to the form factor.

The Activity app, and the three “ring” circus of Move, Exercise and Stand speak to the zen-like potential of lifestyle management.

But, don’t take my word for it. Do yourself a favor and watch the Apple Keynote announcing Apple Watch (at a minimum, watch this film on Apple Watch design).

Fashion Statement

Does anyone doubt that Apple is now and forever more a fashion brand? I’d posit that Apple could acquire Nike tomorrow, and not only would it make perfect sense, but it would seem "obvious" in retrospect.(Sidebar:  Nike is about 12% of the market cap of Apple.)

Put another way, are new forms of denim and carbon-based wearables really that disconnected from what Apple does in the areas of design, material composition and solution stack assembly?

In this context, the acquisition of Beats starts to make sense. You see it in the fact that with Apple Watch, Apple starts to celebrate the diversity of the three watch segments – Watch Sport, Watch, and Watch Edition -- and supporting a lot more SKUs.

This is now irrevocably Tim Cook's Apple, and so it's time for all of us to Think Different before pulling out tired maxims about what Apple is (and is not).

When you look at this in the purest sense, Apple Watch is a celebration of design, innovation, integration and Continuity.

Apple Watch is a great big middle finger to the high priests of MVPs (minimum viable products), Free, and Low-End Disruption (see Clayton Christensen).

Who else but Apple could tackle all of the layers that make up Apple Watch to give life to beautiful jewelry and an extrapolated, fully realized domain?

I was wrong when I tweeted that if we're talking about the "watch" on Apple Watch, then Apple blew it. Apple Watch is indeed a celebration of the watch; much better than I thought, or frankly, could have imagined. 

So Where’s the Deep Conflict?

My conflict with Apple Watch is that I wonder if Apple reflexively made Apple Watch a "watch" when they could have just as easily made it about your Wrist.

The thinking is that in assessing Apple Watch, it makes more sense to compare it to Google Glass than to the iPhone.

Both Google Glass & Apple Watch represent a new **kind** of sensory device, with new types of jobs yet to be defined, and all of the requisite challenges of answering 'WHY.'

By contrast, with iPhone, EVERYONE aspired to a device that could collapse phone, internet and media into one cohesive experience. 

The questions were more along the lines of 'WHAT' and 'HOW.' 

It's much less obvious that consumers are demanding an integrated watch, communication companion (since iPhone/Android is so good) and health/fitness (still a bit of niche).

I don't think that that is a bad thing, per se; just that it makes more sense to think of the challenges in terms of creating and cultivating a new kind of behavior, versus integrating and enhancing an existing set of activities as was the case with iPhone (and iPad). 

Here, I think that a key variable in how successful Apple Watch will be, is how tethered MUST it be to iPhone.

The jogger who wants to use Apple Watch as their exercise monitor of choice doesn’t want to have to also bring their iPhone to capture GPS and run path.

Part of me thinks that answer lies in segmenting the portion of 200M iPhone users that are most likely to embrace Apple Watch for continuity of access, communications, command and control.

I can see Fleet Applications for Police, Army and Government workers. Hospital patients and University students seem natual and obvious. I can envision new kinds of sharing networks that harness Apple Watch as a dynamic entry key fob into an AirBNB style universe.

I guess my point is this. There are no guarantees; there is no textbook for creating a wholly new sensory experience at the scale Apple aims to do things.

With Apple Watch, attempting to prognosticate success or failure is folly. If anything, it's easier to recognize what failure looks like than what success will look like.

In that light, Apple has passed the first hurdle.

Then again, if not Apple doesn't pursue this BHAG (big, hairy, audacious goal), then who will carry the torch?

UPDATE: John Gruber of Daring Fireball wrote a truly excellent piece on the Apple Watch. It's a must read. His frame of analysis is very rich and reasoned. Here is a quote, which is very insightful when you think about it: "I think Apple Watch is the first product from an Apple that has outgrown the computer industry. Rather than settle for making computing devices, they are now using computing technology to make anything and everything where computing technology — particularly miniature technology — can revolutionize existing industries."

Related

1. It's About Continuity and Gratification: Making Sense of Apple Q3, 2014 Earnings Call
2. Apple's segmentation strategy, and the folly of conventional wisdom
3. Innovation, Inevitability and Why R&D is So Hard

 

Getting to the Train Station on Time

In the pursuit of business success, we all struggle with it.

"It could be better."

"It's not quite ready."

"I have so much on my plate right now."

"I didn't get it done."

Sometimes, it's a case of 'better' being the enemy of 'good enough.'

Other times, it's a case of failing to see the forest from the trees.

But, know this.

Whether driven by over-reach, confusion, poor execution or inattention, you MUST recalibrate and lock in.

In moments like these, everything becomes subordinate to Getting to the Train Station on Time.

Your priorities must be clear.

Everyone must commit to a singular purpose.

Don't let anything cloud your intent and focus.

Be specfic on what Getting there means, and Get it Done.

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Apple Q3, 2014 Earnings Call: It's About Continuity and Gratification

"Friends say he has a gift for delaying gratification."

Facebook CEO Mark Zuckerberg once attributed a chunk of his success to delaying gratification. Where he could have monetized Facebook sooner - at the cost of building a bigger audience - he resisted the temptation.

Where he could have sold the company, and cashed out, he kept pursuing the "BHAG" (big, hairy audacious goal) of building the next Google, Apple or Microsoft.

Such was the narrative playing in my head, listening to the Apple's Third Quarter Earnings Call.

While others may see a company that can't possibly keep selling more devices, quarter after quarter after quarter, I see a company that has continually avoided the gratification of going for market share and sales at all costs (i.e., at the price of margins, profits and cashflow).

This is no small task when one considers that investors, the media and virtually every pundit in the blogosphere is not so adept at delaying gratification.

Give them a beautiful suit, and they'll see only a loose thread. 

Failure to seize a market - margins be damned - and the company gets dinged.

Unwillingness to be all things to all people - Amazon, Google and Facebook all rolled into one - and the company gets dinged.

Apple CEO Tim Cook is simultaneously unwilling to be his own man, and guilty of doing things that Steve would never do ("This would have never happened if Steve Jobs was still around).

But Apple in the iOS Era has always been about playing the long game. How else do you create a massive ecosystem of 800M devices that fit the lifestyle, daily flows and physical spaces of people at home, work, school and on the go? 

How else to catalyze an explosion of Apps, Accessories and Services, that are not only immense in scale, not only deliver a superior user experience, not only drive unparalled loyalty, but unfathomable sales margins.

How many multi-billion dollar lines of business can one company create before they inevitably, unquestionably go out of business?

But, there must be an end-game, right?

Ultimately, all of this delaying of gratification, of withholding the child-like joy of chasing every market, usurping every partner, and competing with any and all who enter its universe - read: Amazon, Google, Facebook - has to come at a price, right?

Isn't it written in the Torah somewhere that Apple ALWAYS loses because they fail to be a commodity, as God, Jesus and Mohammed demand?

Well, the end is near, and it's called Continuity.

Continuity is the idea that from Mac to Mobile to Tablet to Home to Health to Car to the Enterprise, there is a unity of experience, that is contiguous; it flows. 

Driving in your car? CarPlay kicks in. Walk into your living room, and HomeKit kicks in. Going for a jog, or visiting the doctor, and HealthKit kicks in. Walk into a Costco, and WalletKit kicks in (or whatever eWallet strategy Apple will set loose soon).

My point is this. UIltimately, the payoff of Post PC is that the devices get embedded to the point of invisibility...wait for it...because they just WORK. All the time.

Some believe that that renders the device moot, so Apple must lose.

I hold to the belief that the devices must be terrific, and the edge must be smart, specifically so we don't have to blindly trust a cloud to watch over us; to surveil us; and separate us from our data when things go haywire.

That's not to say that the Cloud doesn't matter, or that there aren't multitudes of problems that can't be solved when you intelligently bridge smart devices with a smarter cloud.

That's the big idea behind Continuity after all. 

But, it's the not so subtle distinction between the notion - captured in every Apple Ad and Apple Store experience - that the INDIVIDUAL is at the center of the universe, that the consumer is the centerpiece; and an alternate vision that we are destined to all be PAWNS in some sentient, faceless borg that calculates, decides and dictates on our behalf.

It's no coincidence then that along with a runaway successful device business, that the App Store (and the iTunes Software and Services business line that underlies it), is the fastest growing segment of Apple's business, and the linchpin of a Continuity play that has been baking for seven years, since iOS was announced.

It's the notion that Ecosystems matter, that the Consumer, the Developer, the Accessory Partner, the Corporate Customer, the Book Publisher, the Car Maker and the Enterprise are all motivated by their own need to not only survive, but to individuate.

And that's a good thing.

Related

1. iPhone: The first 'personal' computer
2. Apple's segmentation strategy, and the folly of conventional wisdom
3. No good deed goes unpunished at the iPhone company

Ruminations on Retail: Why We Launched BrightStreet Ventures

(Guest Column: Western Real Estate Business - July 2014)

Consider the plight of the retailer: the rise of Amazon has attacked the margins that local retailers count on for survival.

As a result, numerous segments, including video stores, music stores, computer stores, bookstores, electronics and office supplies are either dead or dying. Sadly, this is a trend that is permanent and accelerating.

Meanwhile, the ascendance of the smartphone, led by Apple’s iPhone and Google’s Android is changing everything.

There are about five billion devices creating universal experiences that are social, real time, data smart, perpetual, personal and just-in-time capable via millions of mobile apps.

This emerging reality gets to a universal truth of our time; namely, that software is ‘eating the world,’ and in the process, reshaping virtually all industries.

It’s given rise to Uber, Amazon, Airbnb, Google, iTunes, Facebook, Maps, and Yelp, but can there be any doubt that retail, media, marketing, manufacturing, transportation and telecom are being forever changed in the process as well?

In retail, for example, mobile has given the consumer the power of all knowledge at their fingertips. With this power, he or she can discern fair price or pursue a better deal – often online – in very few clicks.

It’s also empowered consumers to act as social amplifiers of reputation and experience. An extra half-star rating on Yelp can cause restaurants to have a full house 19% more frequently.

Critically, though, mobile plays a game-changing role in what is known as omni-channel. In the world of omni-channel, the consumer’s frame of reference encompasses online, bricks-and-mortar and mobile possibilities.

When done right, omni-channel can yield a 6X sales lift from the customers that engage with the merchant on all channels, including online, via mobile and in store. Such has been the experience of Walgreens.

Similarly, the rise of big data and data science is changing the means of analyzing, targeting and customizing the field of play that exists between retailers, consumers and shopping center owners.

Mobile has also disrupted the traditional ways that merchants acquired and connected with customers.

The customer acquisition tool kit used to consist of yellow pages, direct mail and newspaper ads. While your eyes can tell you that these marketing segments are decidedly unhealthy, there’s an even more obvious barometer: ask yourself if your children have ANY connection to yellow pages, paper mail, or print newspapers?

This is the new reality for retail. Mobile, when combined with data and the cloud, completely changes the game.

This is also why is a shopping center developer decided to launch a technology affiliate like BrightStreet Ventures.

The simple truth is that we are working backwards from the consumer, what they expect and what is possible in this new era. We are also looking at the challenges that retailers face, and our role as owners and operators of shopping centers in fostering their success. That’s the defensive side of the equation.

In terms of offense, we believe the convergence of bricks and clicks represents one of the great opportunities of the next decade.

That is why every venture that emerges from our model needs to make sense as business offering enduring value.

We also believe that by sharing what we learn with our peers, a rising tide will lift all boats, which is very much in our interest.

That’s the backstory on why we created BrightStreet Ventures. The larger market has validated where we’re headed with mobile marketing innovation and real estate business intelligence (our company portal, powered by our Datex Property Solutions affiliate, garnered an ICSC MAXI nomination).

We had the opportunity to unveil this vision, and formally launch our new venture at ICSC RECON in Las Vegas, and the response was incredibly encouraging.

Mark Sigal is the Managing Director of BrightStreet Ventures in Woodland Hills, California.

Related

1. Understanding Retail's Reboot: Four 'Big Picture' Trends
2. Retail Needs a Reboot to Survive
3. How Uber is like Southwest Air - The Art of Reinventing an Industry

Understanding Retail's Reboot: Four 'Big Picture' Trends

Jeff Jordan of Andreessen Horowitz has written in a compelling piece that we are in the midst of a profound structural shift from physical to digital retail.

Having written about the need for the retail industry to undergo a reboot myself, he's preaching to the choir.

What the above graphic (from the article) illustrates are the segments of the market getting most disrupted by online.

Between 2007-2011, in these segments online gained $35B in sales, while bricks and mortar lost $30B in sales.

In the big picture, there are four trends that are transforming everthing in retail:

1. Ecommerce: Push button purchasing, payment and physical delivery is alive and real;
2. Mobile Cloud: Post PC is mobile, social, client, cloud and context. It's growing to 10 billion devices. The field of play has changed dramatically.
3. Generational Shift: The generation that read the paper, used the yellow pages and eagerly checked the mail is fading. That irrevocably changes how merchants connect with consumers. How could it not?
4. Big Data: The data 'firehose'' from back office to market facing is wide and deep. The ability to visualize the flow of a business and tune its mechanics will yield many new and interesting personalization, marketing and marketplace experiences.

Not to long ago, Marc Andreessen astutely observed that "Software Is Eating The World."

What's playing out in retail is emblematic of this truth.

Related

1. Retail needs a reboot to survive (GigaOM)
2. The Mobile Native Cloud (SlideShare)

The End of the Beginning

"Is That All There Is?" - Peggy Lee

Perspective changes everything.

Looked at up close, Apple is boring, Facebook is in decline, and Silicon Valley is more about serving up mouthwatering perks and "F-U" liquidity events than real innovation.

Yet, with a bit of perspective, we see how in a 30 year period, Apple has given rise to the PC, reinvented the phone, broke the hegemony of old media and telecom, and launched the Post PC era.

In fact, Apple is still growing so rapidly that in the last year alone, they generated three Fortune 500 companies worth of new income.

Now, the rumors are that they're launching a new payment system to take advantage of the 500 million iPhones and iPads in use today (many/most with a valid credit card on file).

iBeacon anyone?

Apple CEO Tim Cook has hinted at a new category. It could be anything from a personal monitoring 'companion' device to a set-top box for the living room. 

But, that's boring (conventional wisdom narrative), and Apple must be repeatedly punished for it.

Meanwhile, Facebook is the proverbial case of, "Nobody goes there anymore. It's too crowded."

I still remember when ten million users represented an insanely large base for any service.

In fact, AOL, the gorilla of the early online era, never passed 30 million subscribers.

By contrast, Facebook has 1.2 BILLION monthly active users. That's 60 Floridas!

Despite all of the talk that Facebook's dominion dies with the desktop, 77% of its users are accessing the service from mobile devices, generating over half of their advertising revenue.

 

Is Innovation Dead?

Now, of course, growth and money do not equate to insanely great.

So, is innovation dead? Are we doomed to a decade of Snapchat clones and Instagram wanna-bes?

Up close, it may seem like it, but with the benefit of some perspective, you realize how we are really at the end of the BEGINNING of the next wave.

Want some perspective? Consider this thought-provoking interview with Kevin Kelly, who helped launch Wired, and is one of the sharpest thinkers of our time.

Here's his take:

"If we were sent back with a time machine, even 20 years, and reported to people what we have right now and describe what we were going to get in this device in our pocket—we'd have this free encyclopedia, and we'd have street maps to most of the cities of the world, and we'd have box scores in real time and stock quotes and weather reports, PDFs for every manual in the world—we'd make this very, very, very long list of things that we would say we would have and we get on this device in our pocket, and then we would tell them that most of this content was free. You would simply be declared insane. They would say there is no economic model to make this. What is the economics of this? It doesn't make any sense, and it seems far-fetched and nearly impossible."

Of course, he's right.

What we take for granted as obvious and inevitable, was heretical just twenty years ago.

Doubt this assertion? Do a google search on "silicon snake oil" or "clifford stoll" and see what I mean.

Today, Stoll's opinions sound as ridiculous as witch burners in the time of Salem's Lot.

But then, it was conventional wisdom.

This gets to the nut of Kelly's perspective, which he espouses in great detail, and brilliantly, in his book, 'What Technology Wants.'

What Technology Wants envisions the rise of machines, networks, robots, sensors, systems, data and intelligence EVERYWHERE to the point that they become part of the fabric of life itself (Kelly calls this the Technium).

In other words, you aint seen nothing yet.

As Kelly puts it, "The next twenty years are going to make this last twenty years just pale. We're just at the beginning of the beginning of all these kind of changes. There's a sense that all the big things have happened, but relatively speaking, nothing big has happened yet."

The Uber experience is a revelation today. Dropbox delivers constancy. Amazon amazes. Google Maps is simply magical.

But twenty years from now, every industry and almost every aspect of life will have been uberized, and we will have embedded this logic into our very fabric.

As this organism, the technium, begins to breathe, it will etch new paths, launch new vehicles and drive a new economy.

The future awaits, my friends, but we'll be ready. 

Related

1. Understanding New Mediums: Why Post PC is Not Merely the Web with a Native Wrapper
2. Progress Waits for No One, and Other Harsh Truths
3. 9 logical applications for iBeacons
4. Retail Needs a Reboot to Survive
5. How Uber is like Southwest Air - The Art of Reinventing an Industry

Understanding New Mediums: Why Post PC is Not Merely the Web with a Native Wrapper

This is a fable for a future truth.

There is an analog from the past that frames how I think about the rise of new mediums. It's the motion picture.

Once upon a time, our notion of the motion picture was that it was silent, with accompanying music to set the tone of the story, and sub-titles to stage specific scenes.

It was a simple medium that was inexpensive to distribute to theaters far and wide. It traveled well internationally, too (just "localize" a few text boxes).

Kind of like in the early days of the web.

Along comes the 'talkie,' and conventional wisdom saw the idea of driving movie narratives through talking actors as a fad at best, and an expensive gimmick at worst.

It required new types of actors, new approaches to filming and costly retrofitting of theaters.

Amazingly, in just four years the talkie subsumed the silent picture.

What's interesting is that this occurrence not only changed how movies were made, and the economics of the movie business, but it fundamentally changed our notion of a what a movie could BE.

It became a different medium.

The Rise of a New Medium

This is what the next wave will look like.

It will change our notion of what computing, connecting and communicating experiences can be.

The magical opporunities will come from figuring out the types of interactions that come to life when:

• Client and Cloud Converge;
• The field of play is 10 Billion Devices worldwide
• Our concept of an interaction can mean "Humans," "Machine-Assisted," or "Autonomous and Invisible."

The tendency for consumers, technologists, analysts and investors is to confuse attributes, like browsers and URLs, with outcomes.

But attributes are merely artifacts. 

Outcomes are aspirational; jobs to be defined; the embodiment of a medium.

The hot category of messaging apps, which Ben Evans talks about in his excellent post, 'Interaction, canvases and ecosystems,' is a good example of the emerging medium at work. (SEE: WhatsApp | Kik | SnapChat)

Why? Because such experiences have a notion of state, distribution, message and payload.

Here, I'd assert that there are a lot of interaction models and interesting workflows that this type of runtime structure can support.

It lends itself to new experiential forms that are the "talkies" to today's "silent" web.

What's Past is Prologue

Ironically, unlike the many mediums to get disrupted by digital - music, books, newspapers, magazines, broadcast television - the talkie, an early twentieth century creation, has stood the test of time.

It's proven elastic and durable across genre, geography, demographic and viewing screen.

This is something to think about as the Post PC era takes hold.

Related

1. (SLIDESHARE) The Mobile Native Cloud: An extensible computing model for the Post - PC Era
2. Progress Waits for No One, and Other Harsh Truths
3. The Mobile Broadband Era: It's About Messages, Mobility and The Cloud (O'Reilly)

Dots versus Lines in the Matter of Google and Apple

Jean-Louis Gassée wrote a thought provoking piece called 'Puzzling Over Google's Nest Acquisition.' In it, he wondered why Google opted to make Nest its second biggest acquisition at $3.2B. Gassée couldn't connect the dots.

I'd argue that the Nest story is indicative of the difference between Google and Apple.

It’s dots vs. lines. The Google approach is to keep putting dots on the board on the premise that sooner or later, enough of a pattern will emerge to connect those dots.

By contrast, everything that Apple does is about drawing well formed lines.

Both have their virtues, but they are fundamentally different approaches to looking at markets, platforms and the types of solutions that are worth their investment.

Dots centricity means Google is simultaneously willing to pursue strategies that are: A) Big, wild ass bets that have low probability of success; B) Sustaining investments that protect and extend their core business; and C) Get in the game investments that extend the “field of play” that they have a relevance for.

In this regard, they don’t always even distinguish between concept products, prototypes and real shipping products that contribute material revenues and profits.

Apple, on the other hand, is only willing to make investments in strategies for which they can become the standard bearer within; that have high consumer engagement to the point of love by the consumer; and for which there is a product (refresh) lifecycle that can be predictability modeled AND a hardware-software-service-tools-media platform that underlies it, thereby anchoring their differentiation.

In the case of Google, it's an approach that has yielded: YouTube, Google Maps, Android, Gmail, Chrome, AdWords/AdSense and Analytics. 

The Apple approach has yielded a unity of iOS devices, Macs, iTunes and the App Store. 

Again, a lot of this comes down to how one defines success and what are the metrics that underlie that success.

The Apple way is clearly not the Google way -- any more than the Amazon way isn’t reflective of either Apple or Google.

Apple founder Steve Jobs had a very zen-like take on dot-connecting:

“You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.” 

Amen to that.