The New Enterprise Strategy Problem – Too Many Options

In the good old days, when most of today’s most senior executives got their business education, only three ways to acquire sustainable competitive advantage were on offer. At least that was the theory of Michael Porter – they were cost leadership, differentiation and focus.
I guess today you’d have to add: creating a platform that has a committed community, being the modern utility (in other words providing a platform on which other people do business), capturing the high ground in an ecosystem (like ARM, by owning and developing the major design skills in mobile chips), or providing a very high level of integration to the end customer (as Alibaba is doing by covering off merchant sales, financing customers (on the way to its second multi billion dollar business), providing ticket sales, taxi rides (on the way to its third multi-billion dollar business) and being a bank, among other things.
None of these rely on cost advantages. Alibaba’s rapid development is all about ignoring cost (within reason) and delivering new services (profitably). Uber does not obsess on the cost of its payments model. Nor is there a key element of differentiation involved. The core advantages in these companies is speed of execution, the level of security, customer-centricity that is usually data-dependent, the capability to deliver as near to perfect service as possible and an ever expanding offer.
As the old dictates of the industrial age die,  strategists need to do a radical and rapid about turn. Historically, we have thought in terms of severe limits on corporate activity and on scope. The main focus has been on economies of scale. Economies of scale have not exactly gone out of fashion but economies of scope are the new mantra – a trend I analysed in Shift – put succinctly it says: do more, a whole lot more, for customers.
For that reason we also have to question the value of traditional management tools like scenarios and scenario thinking and what these deliver to decision makers.
The disruptive activity around us creates uncertainty and uncertainty = unmeasurable risk. Scenarios suggest the unmeasurable is very knowable, that, actually, risk comes down to two or three knowable threats,  and that we can therefore control the future.
That there is no way to control the future is obvious – who for example would have though that software-driven test manipulation at Volkswagen would, possibly, put electric vehicles on the road to being mainstream? Who could have anticipated file-sharing as a disrupter of the music industry? There is no way to draw up these scenarios ahead of time with any degree of comfort around their likelihood. And of course originally scenario thinking wasn’t intended to – it was designed to explore the unthinkable.
Right now though we are in a period of disruption where markets are reforming and restructuring. The new dimension to this is optionality.
For a long time I thought the problem faced by enterprises was an unwillingness to develop optionality because their decision processes were grounded by a devotion to core competency and linear business models. Put another way, they tamed scenario thinking so that it wold keep them in their comfort zone.
options-396266_640
But now something else is happening. Let’s divide the novelty into two parts.
1. The reality is that in a period of disruption companies face too many options.  The fact of being over endowed with options is difficult for people to grasp if they are stuck in the pre-disruption mindset -there you have very limited options.  But my recent conversations inside organizations suggests that there sense too many ways to turn, too many options to chase down, too many technologies to evaluate, too many new skills to learn. So what they need is to find ways to embrace that reality and introduce business discipline to it.
2. The second aspect of this though is the very senior executives live in the pre-options moment. They prefer a limited number of alternatives, the three scenario consultant powerpoint that keeps them close to their core. Yes it does, but it also defers the day when they have to recognize all is changing around them and the core is not a good way of facing the future. Lower down the organisation there is ample awareness of options and the problem lies in this gap – the two broadly different perceptions of what the company faces.
I touched on it in this earlier post – the problem of inter-generational leadership, the need to create leadership teams that embrace different generations of managers.
I’m going to come back to it though because this abundance of options needs new management thinking and technology support.

Has Snapchat peaked? Comscore numbers suggest flat growth in 2014

Snapchat’s user growth seems to have stalled toward the end of 2014, according to new Comscore numbers I obtained on Friday. As you can see from the below graph, Snapchat hit a peak around March 2014 and has slowly declined in unique visitors since then. I’ve reached out to Snapchat for comment and will update this if I hear back.

One caveat: Comscore only reports numbers from the 18 and over user group for legal reasons. Companies like Snapchat and Kik have big teen bases, so the Comscore numbers aren’t 100 percent representative. At the same time, given that Snapchat has saturated the teen audience at this point, the slow growth from the 18+ demographic is troubling.

The trend graph comes from a Comscore Mobile Metrix report that charts the number of monthly active users aged 18 and over in the United States. It looked at five messaging applications from October 2013 to October 2014 — Snapchat, Kik, WhatsApp, Line, and WeChat. It tracked “total unique app visitors,” but Comscore confirmed to me that’s the same as MAUs.

Comscore’s numbers are notoriously fickle and publishers frequently report more traffic than Comscore says they have, but in terms of overall growth trends the company is usually pretty accurate.

Comscore's Mobile Media Matrix 2015

Comscore’s Mobile Media Matrix (shows growth 2013-2014)

It’s not just Snapchat that has flatlined. Other messaging apps are seeing similar stagnation, with Kik hovering near the 15 to 16 million mark since April, WhatsApp at 7 million since March, and Line around 4 million since August. WeChat has been below 1 million since January.

So have we hit peak messaging app overload?

The Comscore graph also shows us where the most popular apps stack up against each other in the U.S. market. Snapchat is in the clear lead, despite flatlining. Kik is a not too distant second, which might surprise some. We also get a sense of WhatsApp’s American user base. The company hasn’t shared its U.S. metrics before, which led many to believe they were low.

But the fact that WhatsApp’s US monthly active users are this low — near Japanese-based Line — is new information.

 

This story has been updated since publishing to highlight the 18+ caveat higher in the post.

Twitter now lets you track your tweet’s impact on-the-go

Twitter’s analytics tool, which tells you how many people have seen your tweets, among other things, is now on iOS. When you’re out and about, if you’re dying to see whether your latest quip went viral you can view it in the Twitter mobile app. On your tweet’s detail page, you’ll see a “view tweet activity” button. Following it shows you how people engaged with your tweet, the percentage that favorited it compared to overall views, the total tweet impressions, and number of profile clicks it generated.

Here’s how Sidecar took the lead in the carpool race

It’s been four months since Uber, Lyft, and Sidecar officially launched their carpool features. And although all three rideshare companies have marketed their new carpool feature to the masses, one of them is pulling ahead: Sidecar.

It has expanded its carpool option to the most cities and seen record-breaking use in the process. The company trotted out a host of statistics and facts during a recent interview with me. The overall picture was clear: Sidecar’s carpooling feature is now its main source of growth, and a welcome injection.

Sidecar’s Shared Rides feature is now available in five cities, compared to three for both Lyft and Uber. In the cities where it launched the feature, 40 percent of the rides Sidecar offers are carpool. Uber wouldn’t disclose its percentage of UberPool rides. Lyft told me that as of a few months ago, 30 percent of its rides in San Francisco were Lyft Line, but it declined to share more up-to-date figures or the percentages of other cities.

It’s worth noting that since Lyft does a higher volume of rides than Sidecar, 30 percent of its total is likely far greater in absolute number of rides than 40 percent of Sidecar’s total.

For those who don’t track every change in the transportation industry: This carpooling option is different from these companies’ original “ridesharing” services. Instead of traveling alone with a driver (as with original ridesharing), in carpooling you get matched with another passenger going the same direction, making it cheaper to get across town than if you were traveling solo.

You might be surprised to hear that Sidecar has expanded its carpooling feature more quickly than Uber or Lyft. After all, it’s the company which I have previously referred to as the forgotten stepsister of ridesharing. It’s the smallest, with far less passengers and far less venture capital funding ($35 million) than Uber ($3.3 billion) and Lyft ($332.5 million).

But the company’s smaller size may actually be the reason for its fast carpool expansion. It has been able to focus its resources on the carpooling part of the business, making it a priority above all else. The company raised its latest round, a comparably paltry $15 million, solely on the premise of expanding Shared Rides.

Since introducing Shared Rides, Sidecar’s business has grown in multiples. It had a record week last week, with rides up 60 percent from the average prior weeks, despite the fact that there wasn’t a holiday like New Years or Halloween to propel the growth. The number of rides it offered in Chicago increased 10 times since it launched Shared Rides there in early November.

Contrary to outward appearances, Sidecar was first to market with the carpool feature, giving it a head start on Uber and Lyft. The media narrative around carpooling originally went: Lyft was the creatorUber upstaged Lyft’s big launch with a preemptive release, and Sidecar belatedly chased the pack.

But as this June article shows, Sidecar had actually been doing shared rides months before its competitors — it just hadn’t made much fanfare announcing it. The company claims it started testing Shared Rides in May. It had months of time to hone its operations, and as Uber and Lyft were just launching their SF markets, Sidecar had already tried out its feature with 13,000 passengers.

It has by no means won that war though. Sidecar may have gotten a head start, but its rivals are still far better funded. All it takes is Lyft or Uber placing a priority on carpooling — making it their main raison d’être — for them to take over.

Forrester: No, Facebook doesn’t have a “teen problem”

A report released Tuesday by Forrester, which surveyed more than 4,500 people between the ages of 12 and 17, says that Facebook (s fb) doesn’t have the “teen problem” stemming from a study in 2013 that suggested youth were leaving the network in droves. According to the brief, more than three quarters of teens still use Facebook at least once per month — double the usage numbers of Snapchat, Tumblr, or Pinterest — and 28 percent say they use it “all the time.” While the study doesn’t track how teens see the popularity of Facebook among their peers, the usage levels suggest that teens aren’t abandoning it en masse.

Screen Shot 2014-06-24 at 8.35.48 AM

 

BeyondCore raises $9M to automate data analysis

Analytics startup BeyondCore has raised $9 million for its technology that can analyze complex data sets and automatically highlight the strongest correlations. It’s a promising capability assuming companies are willing to open up analytics across the organization.

Meet the fighter pilot trying to crack the code of NFL data

Brian Burke followed up a career in the Navy by starting Advanced NFL Stats, and now his predictive models are powering the New York Times’ 4th Down Bot. Fans already love this kind of analysis, but will coaches ever come around?