May 5-6, 2014

bcc Berlin

days to go.

This is the new normal

#next14

NEXT13: Here be Dragons

“Here be Dragons” is a phrase used to denote dangerous or unexplored territories, in imitation of the medieval practice of putting sea serpents and other mythological creatures in uncharted areas of maps.

We live in times of rapid and radical change. The digital revolution and the interactive consumer continue to shake up one industry after another. The economic crisis doesn’t seem to have slowed down this process; in fact, it may well have accelerated it. Users are in charge now, and they are radically pursuing their interests. For many companies, these challenges add up to a highly dangerous situation.

We are at a crossroads. It’s pretty clear that many paths we used to take no longer lead us to where we would like to be. What lies ahead is uncharted territory, terra incognita. There might well be dragons waiting for us, we don’t know. It’s time for a new round of adventures, and you’d better get your survival kit ready. The Internet is a perilous place, and fear is not a bad thing at all. Fear helps us to focus on our own survival.

Fear of external disruption can be a strong motivator for bold moves, such as disrupting your own business before someone else does. This might involve radically changing your business model, finding new markets or even creating them. Many start-ups have to pivot several times before they find their ideal business model. There are countless examples of this, as Mashable noted in May 2012:

Flickr was once a role playing game. Groupon was once a web community for mobilising social actions. YouTube was once an online dating site. Some of the most successful start-ups of the past decade had to pivot toward a new idea before catching on.

You don’t need to be a startup to pivot. Even multi-billion dollar companies can radically change their business model, for even greater success. In fact, probably the most successful pivot of the past decade has been carried out by the most valuable public company today: Apple.

When Steve Jobs first introduced the iPhone in 2007, the iPod product line represented a huge portion of Apple’s sales and profits. Despite this, Jobs positioned the iPhone as a multi-purpose device that did everything the iPod does (and of course more). For an iPhone owner, from day one there was almost no reason to also have an iPod. This clearly was a disruptive move.

At first, the iPod sales growth just slowed down. But as early as in Apple’s fiscal year 2008, iPod sales peaked. And since 2009, they have been declining year after year. The iPhone started its phenomenal success story on the back of the iPod. Apple cannibalised itself. Had Apple not done it themselves, sooner or later someone else would have.

There’s a lesson for big brands and companies here: Don’t wait until it’s too late. Embrace new opportunities as fast as you can. Don’t let the fear of disruption stop you. Disrupt yourself. Don’t let some random start-up eat your lunch!

Four Major Trends

NEXT has always been about what’s next, about trends the digital industry should closely watch in the near future, within a timeframe of 12 to 36 months. For the 2013 event, we have identified four areas to be covered.

  • Invisible: technology gets transparent
  • Interface: APIs, interaction and services
  • Make(r): DIY, 3D printing and the makers
  • Context: smarter things, data and mapping

All of the above have one thing in common: these areas are to a large extent uncharted territory. Here be Dragons.

Invisible: technology gets transparent

Since the dawn of the pc era more than thirty years ago, computers were always pretty visible physical objects. From the consumer, these machines required a specific amount of attention. The user had to master a language, be it programming or interaction with certain objects on screens, using keyboard and mouse, and so on.

As we are about to enter the post-pc era, all this is changing rapidly. The new default are devices that get thinner and lighter all the time. We see retina-like displays with resolutions so high that they are no longer perceived as screens, but have a natural look and feel. Foldable screens are just around the corner.

Those heavy applications you once had to learn are now lightweight apps that can be mastered in no time. Devices become appliances that can be used with a certain amount of naturalness. Computing itself moves to the cloud and becomes invisible to the consumer. Everything is about to get smarter and more connected, computing is becoming ubiquitous. This has huge implications for the digital industry.

Two decades after Marc Andreessen released Mosaic 1.0, we are quickly moving away from a web- and desktop-centric universe that was dominant for most of the last twenty years. We are entering a post-digital era where digital technology is so omnipresent that it is almost indiscernible from the non-digital world. It’s more than mobile. It’s everywhere. For businesses that sell to the consumer, this changes everything.

Stop thinking about digital as just another channel requiring specialised marketing people and an agency to deal with. Everything is interconnected. Start rethinking your business from the ground up. Think about your interaction with the consumer, about your interface with the radical user. If you are still thinking and working in silos, it’s time to stop!

Interface: APIs, interaction and services

With technology finally out of the way, it’s time to completely rethink interfaces. This means, on all levels; starting from hardware and software, machine-to-machine and APIs up to the human level, to human-machine interfaces, interaction and services.

The Web Is Dead, touted Chris Anderson back in 2010. Users are quickly moving away from the desktop to more lightweight devices. Growth is now where these devices are. We still dub them as mobile, but that’s increasingly misleading, as the usage is mostly at home or in the office. It increasingly feels like work using a traditional desktop computer or notebook. Instead we like to play with iPhones and iPads.

This of course means: Mobile first! Build apps, not websites. If you’re still stuck in the desktop-centric world, that implies profound change is needed. For quite a while now, we’ve been living in a browser paradigm. But for many, if not most, consumers the era of huge screens is already over, with the one notable exception of the TV in the living room. Some consumers will still have notebooks, but most will just use smartphones and tablets.

This makes room for the interactive TV set, and the subsequent disruption of the TV and movie industry. This seems inevitable, but it may still take some time to get there. We’ll need a revolutionary new device like the iPod was for the music industry, and the iPhone is for the mobile industry, with a slick interface and a minimum viable service layer like iTunes and the app store.

This example shows the task at hand: to design not just hardware or software, but a service that the consumer will want, to think from the consumer’s end of the value chain. Of course, providing such a service typically will employ hardware and software. The design of a service has to take all layers into account, from service and interface to software and hardware. The focus shifts from marketing and communication to product and service.

Make(r): DIY, 3D printing and the makers

Everything analog is going digital. Anything that can be digitised will be digitised. The first wave of computing digitised back-end processes and data handling and led to the era of mainframe computing. The second wave digitised communications, publishing, media and marketing. Music, books, film, television, radio and advertising became digital. The third wave will digitise every possible physical object.

Like desktop publishing and the web democratised publishing and set free a surge of creativity, 3D printing will soon democratise innovation in the physical world of atoms. With platforms like Kickstarter, Shapeways or Quirky, there is already a commercial infrastructure that supports this. Manufacturing will get democratised, as desktop manufacturing rises. As we saw in the web and apps world, the capital that’s needed to start a business is again significantly lowering. The barriers to market entry are diminishing.

For this reason, we will see a new flood of start-ups, leading to a new industrial revolution, as Chris Anderson puts it. The age of mass production won’t of course end over night, but innovation will spring from the niches. Again, we’ll watch design taking centre stage. With all these new possibilities enabled by technology, design is what finally matters. And the problem of copying will enter a new level.

The Xerox machine made it easy to copy everything printed on paper. The compact cassette did the same for music. With the advent of the digital era, copying became even easier, but was still largely limited to text, audio and video. But soon we’ll be entering an era where lots of physical objects can be easily copied by the average consumer. Got people coming round for dinner, but not enough cutlery? Scan yours and print out some knives and forks as needed.

This trend will force a lot of industries to embrace innovation and excellent design that didn’t really need it to compete until now. It’s a new, disruptive force that will require them to radically change to stay competitive. Make no mistake – it’s still early. Chris Anderson sees the maker movement now where the PC movement was in the mid eighties. There is some time left for the incumbents to adapt. Why not use this time wisely? Make smarter objects that can’t be copied too easily.

Context: smarter things, data and mapping

Just a few years ago, the web was constituted by a lean-forward attitude, in contrast to the lean-back experience of the couch. As we move away from the desktop, the context of any given interaction is no longer predefined by immovable hardware. With smartphones, and even more with tablets, the web entered both the lean-back sphere of the living room and the rest of the world. To a certain degree, the web lost and gave way to the app in this process. But the fight is not yet over.

Physical objects are now getting smarter and being connected to the Internet. Sensors are generating huge amounts of data that can be used to improve the customer experience. Google, Nokia and Apple are mapping the whole world in ever greater detail, making their knowledge of the physical world available to everyone via smartphones. Wearable computers like Nike FuelBand and soon Google Glass add more data about personal matters to the mix.

The user experience varies greatly, depending on the context. What was appropriate to a desktop PC setting is now unsatisfying in other contexts. Every business
needs to rethink its interaction with the consumer and adapt its user interface(s) to more specific contexts than ever before. That’s a huge opportunity, but it’s not an easy task and cannot be accomplished by means of theoretical assumptions. It requires data, lots of it, and analytics. That has to be a real-time process, as it is now possible to know the usage context and adapt your service to it.

Robert Scoble and Shel Israel are coining a catchphrase for this trend: the Age of Context. They believe that in the Age of Context, we will start building personal relationships with our computers. They will be even more integrated into our personal lives than they already are. This process will feel uncomfortable for many users, and won’t be without new risks, but the rewards at stake are high. Computers will get to know us better than the people closest to us, and they will serve us seamlessly in our daily lives.

Context is, as with the other three trends we plan to discuss at NEXT Berlin 2013, affecting the whole stack, from the hardware and software to the interface and service layers. All four trends require a fresh, holistic approach, a redefinition of many businesses and a customer-centric mindset. But be warned, it won’t be an easy ride.

Here be Dragons.