Monday morning at the 2014 NAED National Meeting started out with a trio of great speakers. First up was David Pogue, New York Times columnist and Emmy-winning CBS News correspondent, speaking about disruptive technology and trends that will change your business.
Pogue says the “web 2.0” concept (environment where the user creates the content on a website – i.e. Facebook, Craigslist, Wikipedia), now applies to the real world, and he calls this “world 2.0.” In the “old world,” when someone wanted to purchase a product, that person would go to a certain brand or store. In the new “world 2.0,” we just do business with each other. For example, instead of getting a hotel room, we can rent someone’s personal home for a few nights. And instead of waiting for a taxi, just find someone on Uber who will drive you around in his or her own car.
Other disruptive technologies that could be changing the way we do business include drones (delivery of small items straight to your doorstep in 30 minutes; or inspecting power lines that are dangerous for people to get to) and driverless cars (possibly coming in the next 15 years). Pogue also says that not only are we no longer using land line phones, email is even taking a back seat to other more instantaneous forms of communication (i.e. texting and Facebook).
Some general trends to look for (and count on) in the near future are no discs or wires, no landlines (already a reality in homes, will soon transfer to the workplace as well), no printed materials (catalogs, newsletters, etc.), and so standard machines. These will all be replaced with streaming media, wireless devices, portable wearable devices, and person-to-person transactions.
We then opened the floor to some Q&A:
Q: Is augmented reality something that will come into this industry?
A: Yes, possibly. Anything where there is a physical environment involved, AG could have a possible application there.
Q: Regarding person-to-person transactions – where is the liability?
A: Right now, it’s the wild, wild West. There currently is no liability, taxes or regulation. That will eventually change as the market grows.
Q: What are your predictions on 3-D printing? (the layering of plastic to create a small object)
A: This is most likely a niche market technology. It will most likely not become a mainstream method by which to create a mass amount of product. It is currently very expensive and time-consuming.
Q: How do businesses avoid getting caught up in the “wow” and dissect trends to see how they can help our businesses?
A: Being behind the curve isn’t always a bad thing. Don’t invest in things that may end up being a flash in the pan. What you can count on is things going mobile and on-demand. Overall, the masses will weed out the fluff and the worthy things will emerge.
Q: With all these services going to person-to-person transactions, how will that effect brick and mortar businesses like ours?
A: Person-to-person transactions are very reliant on ratings and people who have done business with you spreading the word. But, none of these person-to-person businesses require expertise. This will have more of an effect on your personal life than your business.
Next up was Leonard Brody, entrepreneur and venture capitalist, speaking about how the web and social media has changed our behaviors.
Brody boldly says that, right now, we are rewriting the planet from the ground up. The reason, he says, is that in the last 3000 years, people have not changed as much as they have in the past 20 years alone. The rise of the commercialized internet has changed everything, from the way we communicate, to the way purchase products, to the way we meet other people. This fundamentally changes the way we deal with customers.
We are simply not the same people we once were. We are actually two different people – our physical self and our virtual self. Today, one third of the Earth’s population is online, and we spend two thirds of our time in our virtual identification. And those virtual identifications are three times as trusting as our physical self in face-to-face interactions. So, while our business may still sometimes be about face-to-face interaction, our virtual interactions are rapidly becoming some of our most important.
The best way to adapt to this huge change – or rewrite – Brody says, is to get ahead of not only your competition, but also the entire industry. Make a commitment to spend 10% of your R&D budget on partnering with people who have their finger on the pulse of the industry and know what’s coming next. Create your own intelligence organization – people who go out and find out what’s happening in the industry and report that information back to you on a regular basis. Then, use that information to rethink yourself.
Finally, become a student of human behavior. Every great company is keen on the secrets of human behavior. Try to understand the “new people” and how their behavior change will impact your business and how you can leverage that to your advantage.
Q&As from Brody’s session:
Q: I feel like we tend to overestimate the pace of change. How should we be responding to this change? Is it just more hype?
A: The change we are going through is rapid. Underestimating that right now would be a huge mistake. The problem with innovation is that companies are based on the idea of maximizing profits. You always need to make sure to institutionalize some part of your company to be thinking three to five years out. Rethink the way our board of directors works. Keep the CEO responsible for keeping the company from getting blindsided. Don’t just think “change always happens, and there’s nothing we can do about it.”
Q: is there anything specifically innovative that we could be doing in our industry?
A: Make sure to hire people who have experience with disrupting the normal way of doing things, or has had a start-up company themselves. The traditional, hands-on industries are the most at-risk. People are constantly trying to find ways to disrupt those industries. Find those people and use them. Stay close to them. Partner and engage with innovation, don’t shut it out.
Q: How will social media (and our virtual selves) turn into business?
A: Both the virtual and human selves are transacting, but in different environments. The data you give about yourself online is six times more than you would give in a physical environment. For this reason, Amazon is the single greatest predictor of human behavior (because of all the data they have collected). This data is used to suggest items that a person might want to buy. People end up buying things that they care about and engage with more. They are also buying products based on peer reviews – which are twice as impactful as traditional advertisements.
Finally, we ended the morning with Don Leavens, vice president and chief economist at NEMA, and the industry economic outlook. Here are the highlights:
- We had a strong second half of 2013, which inflated expectations
- The harsh winter was a significant contributor to Q1 slowdown
- Still, the recovery is poised to regain momentum, but it’s duration puts it at “middle aged”
- Household debt is receding from pre-recession peak
- Private payrolls are back to peak, but working age population has increased by millions
- The number of involuntary part-time workers remains elevated (those who wish to work full-time, but cannot find it)
- Despite slow start to 2014, economic growth is picking up from last year’s weak showing
- Inflationary pressures remain constrained
- Manufacturing sector coming out of winter slump
- Homebuilding recovery is expected to resume
- Non-residential construction outlook is flat
- Shipments are picking up from 2012-2013 soft patch