The Unicorn Explosion Continues

Last Spring, we predicted that we'd see carnage among tech unicorns, particularly in consumer markets. (How many food service companies and "Uber for X" companies do we really need?) We didn't (nor would we), however, predict when the carnage would come.

(Timing markets has never been in my golden gut; anticipating technology relevance is. Watches and body cameras, for example, will never be mainstream, nor will drones or curved TVs. Ping me and I'll explain why. Or do this cosmo quiz to make your own prediction for consumer technology.)

As reported (and powerfully visualized by CB Insights), Unicorns are crowding the market. Look at the density of Unicorn logos starting in February 2014, three short years ago. It's astounding. Why this proliferation? Why now? Why so dramatic?

 

I believe three things have created and propped up the Unicorn valuations of tech startups:

  1. If you're an investor, there's no place better to put your cash. The returns on real assets are small. The returns on exuberance (like big fancy new houses) can be large. So investors have lots of cash to place bets on startups that might just pop.)
  2. The recent election, with a hoped-for impact of deregulation and infrastructure spending, left the market energized about the potential for growth. The market's up. So the potential for healthy exits and IPOs (even ones without a clear revenue growth model such as Snap's) is up.
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Reinvent the Web to Win the Mobile Moment

Last time, we talked about how your mobile website sucks. You and your agency partners took a valiant swing at fixing it using responsive web design techniques. But most of you did that without asking a critical question:

What are my customers trying to get done on their phones?

So you created one-size-fits-all responsive retrofits rather than reinventing your website for the way we live now -- on our phones. That's not enough because:

  • Not everyone will use your app. Sorry. We hoped they would. They won't.
  • Your website is or will be majority mobile. Walmart had 70% of web traffic from phones. You need to deliver a mobile-perfect solution.
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Your Mobile Website Sucks

This is part two in a series on Reinventing the Web to Win the Mobile Moment. Here's part one, a Drunk History Of Mobile Strategy.

For 20 years we have optimized the web as a big billboard broadcasting everything about a company. Marketing owns the public site, and cares more about acquisition than utility. Product teams own the private sites and are faced with an ever-escalating array of digital touchpoints. Is it any wonder firms, aided by their digital agency and web content management software, have built one-size-fits-all reponsive websites and punted on the responsiblity to make them great?

"Why can't they all just use our app," I hear you say. Alas, few customers and even fewer prospects will use your app. But they will visit your website on their phones, particularly when they search or link their way to it. Sadly, when they arrive, their experience — even on your new responsive site — is awful. Why?

  • Your one-size-fits-all responsive retrofit isn't mobile-first . . . While responsive web design solves a litany of problems — including making your site visible on Google Search — it doesn't magically deliver desktop conversion results. REI told us, "When we went to responsive web design, we celebrated for a minute. Then we asked, ‘Is our responsive website enough?'"
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Digital Customer Experience ROI: (How To) Show Me The Money

Forrester's clients frequently ask us how to build the business case for customer journey mapping, particularly for digital experiences and digital products. We have proven that better customer experiences drive revenue in industries with low switching costs. But what about investments in customer journey mapping?

Now that I've taken on Forrester's digital business and transformation playbook, I've been thinking a lot about the benefits of journey mapping, which I believe is the front end to any transformation initiative. I don't have a wealth of evidence yet to justify your investments in journey mapping (though my CX colleagues have a lot more to share for Forrester clients). But I have been developing a framework to measure the impact of better customer experiences. These metrics range from hard to squishy:

  • Higher satisfaction drives repeat business, hence higher customer lifetime value. This is a hard metric, particularly if you are using journey mapping to improve an existing touchpoint. A major online retailer told us that they prioritize digital investments (in, for example, a better mobile web experience) based on two metrics: revenue and satisfaction. Their business model succeeds or fails based on repeat business, so they build, measure, and continuously optimize the best digital engagement possible. Repeat business is something you can measure. Next, bracket the business improvement through better customer understanding with a best-case and worst-case analysis. Start by correlating customer satisfaction studies with touchpoint use and experience quality.
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Meet The Digital Architects Of Your Technology Strategy

When Jeffrey Hammond, Mark Grannan, Adrian Chapman, and I dove into our most recent developer survey, we unearthed a fascinating group of developers we call "digital architects." This group aspires to set architectural direction, deploys open source software across four or more technology areas, and uses three or more types of cloud services (see the figure). 
 
  • One in 11 enterprise developers. Only 9% of the developers in North America and Europe are digital architects. This small segment is an elite and attractive group, with particular enthusiasm for technology and, as we'll see, for digital innovation and customer engagement.
  • More likely to work at fast-growing companies. More than half of digital architects — 53% — work at companies growing at double-digit rates. You'll find them in all three sectors of the software business: enterprises, software vendors, and service providers.
  • Younger than the rest. Almost three-quarters of digital architects are younger than 45, and 30% are younger than 35. That means these technologists came of age during the internet and smartphone era. They think digital because they know nothing else.
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In 2017, Digital Transformation Budgets Will Top The Billion-Dollar Bar

Check out our Predictions 2017: In Digital Transformation, The Hard Work Of Operational Excellence Begins piece that went live this morning. It has more predictions and more detail from from my coauthors Nigel Fenwick and Martin Gill.
 
You've been creating digital customer experiences for years now. You've built a successful app. You’ve assembled a martech/adtech stack. You may even have started swinging at omnichannel delivery or harnessed AI or piloted a connected product. So it’s time to declare victory on digital transformation, right? [In our 2016 services survey, a shockingly high 19% have . . .]
 
Not so fast. Digital customer experiences are only the shining faces of a digital business. Those pretty faces quickly lose their luster unless you’ve also transformed your business operations to make them better every single day -- and introduce new digital faces all the time. We call this capability "digital operational excellence." It’s the 80 in the 80/20 rule of digital transformation. Here are three predictions for 2017 to prod the digital business conversation:
 
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Drunk History of Your Mobile Strategy

Everybody can name their favorite apps. But can you name even two mobile websites you love? We can't. So we stared into the awful maw of the mobile web to learn how to fix it. 65 companies signed up to help. Along the way, we found problems stemming from the journey you've taken to be in your customer's pocket.

My colleague Danielle Geoffroy brilliantly realized that it was a drunk history, so we wanted to share it with you.

  • 2008: "There's an app for that." Savvy developers jailbroke the first iPhone so they could build apps. Apple then launched the Apple App Store and chaos ensued as every developer and company piled on the apps as the mobile strategy. (And y'all invented the pub game, "there's an app for that.") You ignored the mobile web.
  • 2010: Responsive retrofits tiny-ize websites but miss the mobile moment. Agencies and creative developers swooped in to magically morph brands' giant desktop websites into "mobile-friendly" websites. But that strategy led to the quiet crisis that responsive web design is not mobile-first.
  • 2016: Apps are winning . . . just not yours. Forrester's data shows that US consumers used 26 apps last year and 26 apps this year. (Millennials use . . . wait for it . . . 28 apps.) Consumers have enough apps — they don't want more. What's worse, they spend 60% of their total mobile time (web and app) in just three apps — usually owned by Facebook and Google. 
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R.I.P. BlackBerry Phones

An era has passed. BlackBerry will no longer make phones. RIM opened our eyes when it put the power of digital communications into our pockets. Email on the go was the beginning of the mobile mind shift.

I loved the passion of Mike Lazaridis and his team for building great devices that we'd drive home and get if we left on the counter. His devices were the first to inspire such passion, such intimacy, such a feeling of empowerment that we now all take for granted. He started it.

As a software guy, I was always saddened by the clunky interface for apps other than email and messaging, but I loved the power flowing into my palms from the BlackBerry devices I carried.

Then along came iPhone. As a software guy, it only took a few months of jailbroke phones and developer-built apps before I realized that the real mobile revolution had arrived -- a computer in your pocket. That's when the mobile mind shift really kicked in, as Julie Ask, Charlie Golvin, and Thomas Husson recognized very early.

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Facebook Violates Rule #2 Of An Insights-Driven Business: Marry Algorithms And Expertise

Facebook can't buy a break with its newsfeeds. Every time it changes the model, somebody complains. But its latest snafu -- turning over the job to an algorithm without expert oversight is not the answer. Posting a fake story just isn't smart. It's not insights-driven; it's head-in-the-sand.

(The provenance of this image is opaque. If you own it, please let me know so I can attribute it properly.)

An insights-driven business is built differently and operates differently. As we say in our report

  • Rule #2: Marry algorithms and expertise to continuously improve outcomes. Algorithms are not a secret sauce; they are a model of the real world. If the algorithm says X and the expert says Y, then there's room to improve either the algorithm or human understanding. Innovators like Allstate Insurance (and Memorial Sloan Kettering Cancer Center) accomplish this by putting product experts (or oncologists) and data scientists in a room to continually refine their cognitive assistants. (see endnote 9)
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Google Will Attack Popup Ads On Smartphones -- Hallelujah!

We've all experienced this garbage:
 
  1. You are on your smartphone.
  2. You find a link that you hope will help you in a mobile moment.
  3. You click with the great hope that it will be exactly what you need.
  4. Some irrelevant popup ad grabs you by the arm and blocks your path.
  5. You suffer through the ad or the countdown before getting to the site. (And feel angry or bad doing it.)
  6. Now you finally find out: Does the website help or have you clicked in vain?
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