Keynote: DWWA Amsterdam

Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 1

CreativeI usually talk about

1960 1970 1980 1990 2000 2010

distributionuser interfacefunctionality

1960 1970 1980 1990 2000 2010

• 1 terabyte of data (1,000 gigabytes)• 50 magnetic tape drives• 25,000 magnetic tapes • 100 DASD units (~10 GB)

1960 1970 1980 1990 2000 2010

• 23 pounds• $2,000+ US• 5” screen • CP/M operating

system

• 4 MHZ processor• 65k RAM• 300 baud modem

1960 1970 1980 1990 2000 2010

A > You are in a clearing at the edge of a small meadow. A farmhouse is nearby. There is a mailbox here.

1960 1970 1980 1990 2000 2010

service product

products will develop sophisticated logical service extensions and

behave more like services

services will become increasingly tangible and behave more like

products

Four laws

Sarnoff’s Law

The value of a broadcast network is proportional to the number of

viewers.

television print radio outdoor

Moore’s Law

Computing power increases exponentially - effectively doubling

every 2 years.

hard drive capacity over time

Metcalfe’s Law

The value of a telecommunications network is proportional to the

square of the number of nodes of the system.

Reed’s Law

The utility of large networks, particularly social networks, can

scale exponentially with the size of the network.

Late last year the Pew Internet & American Life Project released a study

revealing that 57 percent of 12- to 17-year-olds online – 12 million individuals – are creating content of some sort and

posting it to the Web.

Creators

Contributors

Consumers

if this is your product or service ...

what do you do with this?

Media and the Internet

Four point five mediums

television print radio outdoor interactive

True Use

"Between now and 2012, broadcast television in the US will grow at a modest compounded 3.8% to

$58.8 billion.

However, Internet and mobile services will grow at a compounded 14.1% to $72.3 billion.

Newspapers will continue their decline at a compounded -2.3%."

Veronis Suhler Stevenson

television

print radio

outdoor

interactive

Four mediums and a platform

interactive

traditional media are great at starting the conversation

but very bad at “finishing”

the Internet is extremely good at “finishing”

and “continuing”

The corporate website is not a good use of a platform

= the typical monolithic corporate website (www.coke.com)

= the future of distributed functionality

Facebook applications

What can you do with this platform?

Physical products can develop powerful logical service extensions.

iTunes

Logical services can develop into powerful and tangible products.

eTrade

Service productsexpanding the concept of what services

should be

"78% of US mobile phone users call their network operator first for mobile phone

customer support problems or questions,"

"However, almost half of all US callers expressed dissatisfaction regarding

customer service personnel."

✓ 20,000+ customer service representatives✓ 25,000,000 calls per month (half of customer

base)✓ $8-12 per call (let’s use $10)✓ $250,000,000 per month

Cumulative Calls (in millions) Cumulative Cost (in millions)

325 million calls per

$3.25 billion in support

crowdsourcing

community based support

distributed participatory support

citizen science

wisdom of crowds

mass collaboration

After all, think about what happens if you ask a hundred people to run a 100–meter

race, and then average their times.

The average time will not be better than the time of the fastest runners. It will be worse.

It will be a mediocre time.

But ask a hundred people to answer a question or solve a problem, and the average answer will often be at least as good as the

answer of the smartest member.

With most things, the average is mediocrity. With decision making, it’s often excellence.

You could say it’s as if we’ve been programmed to be collectively smart.

Suroweiki

launched 2001 - founded by Eli Lilly

The companies – or seekers, in InnoCentive parlance – pay solvers anywhere from $10,000 to $100,000 per solution.

(They also pay InnoCentive a fee to participate.) Jill Panetta, InnoCentive’s chief scientific officer, says more

than 30 percent of the problems posted on the site have been cracked, “which is 30 percent more than would have

been solved using a traditional, in-house approach.”

✓ if “alternative” cost $500k per month to run✓ 50,000 calls avoided per month =

breakeven✓ .2% of a given months call volume✓ anything over that is cash-flow positive to

carrier✓ reduce by 3% = $90mm / year savings✓ or 1500% ROI

Alt Cost (in millions) Avoided Call Cost (in millions) Alt ROI (in millions)

breakeven in about 6 months

$43 million in avoided calls

$37 million ROI

$6 million program cost

crowd-sourcing support

• “virtualize” the phone• create multimedia tutorials• allow users to create and share

their own tutorials / tips

✓ reconsider how you provide service✓ can you leverage new online economics?✓ what happens if you connect consumers?✓ what value can consumers add as creators?✓ how can you leverage your audience?✓ how do you add this as a product extension

of your service?

Product servicesexpanding the concept of what products

should be

What would you do with Coke machines?

500,000 units

(about 1 per 600 people US)

1.5 x 1.5 meters

1,235 square kilometers

the Coke Network

• they have power• they have proximity• located where people “break”• part of social fabric

over 7,000 hot-spots

get a Starbucks Card, put at least five bucks on it and then use it at least once every 30 days, and you've got two hours of free Wi-Fi a day. Not bad at all...

all designconsumer product design

physical products

logicalproducts

• iPhone / iTunes• most mobile devices• cable boxes• Tivo

all designconsumer product design

physical products

logicalproducts

• cars• refrigerators• televisions• all mobile devices• remote controls• home entertainment• ?

tomorrow

• OnStar

• autos have VIN numbers, will eventually have IP addresses

• what if all products have IP addresses?

• guess what? people have IP addresses too

• what happens when you cross product IP addresses with people IP

addresses?

• what are the opportunities for service extensions of products?

Story systemscreating stories with consumers through coordinated use of

new media

1960 1970 1980 1990 2000 2010

Three screens

television computer mobile

passiveentertainmentlean back

interactiveproductivitylean forward

interactiveconnectionlean forward

the ambient network

"By 2011, there will likely be 5.1 billion mobile phone subscribers worldwide.

Traditional twisted pair land lines will be relegated to the dustbin of history.

Not a bad penetration rate given the global population is under 7 billion people."

Pete Sealey, ex-CMO Coca-Cola

television

printradio

outdoor

interactive

Holistic systems that properly utilize the true use of traditional media and online interactive media to facilitate

dialogues with, and between, consumers.

Story systems

Every click is a wish

Great marketers of the future will not be measured by how well they tell stories to their

audience

but rather by how well their audience tells stories about

Thank you!

Keynote: DWWA Amsterdam

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