Thursday, August 8, 2013

Platform or Die

This week one of the top presentations on SlideShare is Jeremiah Owyang's presentation "What Companies Must Do When Customers Share – Rather Than Buy," with nearly 32,000 views.

Owyang is a partner at Altimeter Group, which helps companies deal with and profit from disruptive change and this presentation accomplishes exactly that. It's essentially a free and in-depth primer on the collaboration economy, bringing together trends that I first began following in 2000 working for futurist/trend spotter Marian Salzman, president at Young & Rubicam's The Intelligence Factory.

Salzman has spent at least a decade working through the consequences of "prosumption" for marketers. Her work begins with futurist Alvin Toffler's concept of the prosumer, or proactive consumer (1980), which was rapidly adopted and promulgated by mainstream marketers, such as Philip Kotler.

Beginning in roughly the late '90s, the new generation of consumer didn't just buy what marketers dreamt up but actually began to play a role in producing what they consume (pro + sumer). This could be through providing feedback (e.g. writing a book review on a blog) or by actually creating them (e.g. I continue to be fascinated by her efforts to show how prosumers continue to influence the marketplace.

Several outgrowths of prosumption take the original concept further and in different directions. One is "brand hijacking." From a marketing perspective this means marketers embed the brand in customers' lives (hijack their lives, hijack the traditional marketing process) as "alternatives" to corporate America (e.g. Napster). It also means customers authentically taking over a brand and making it their own, e.g. creating their own versions of Barbie dolls (no, Mattel was not happy). A third is when a corporate brand injects itself into the narrative of a separate popular brand to gain traction.

A related trend to prosumption is brand curation, or assembling many different voices into one. One example is The Huffington Post, comprised of many different bloggers yet the tone of the entire offering remains consistent. What's important about this is that the independent voices remain consistent (e.g. they are not blandified into a singular corporate image) but they are at the same time promoting a larger profit-making venture.

We tend to forget that customers are also workers and in a service economy, their engagement with their employers' brand and consequently the customer is critical and dependent on a well-run workplace. The "people" factor was recognized in marketing as the "Fifth P" back in 2001 by Gallup (along with product, place, promotion and price) but unfortunately remains deeply under-leveraged even today. Global research released in 2013 by talent consultancy Aon Hewitt shows that around the world, "4 out of 10 employees are still not engaged."

A critical aspect of crowd-based branding is trust in the underlying platform upon which the brand is built. We could also call this trend "branding the platform.", founded in 1994, is the prototypical platform brand. I remember way back when, approximately 2001, when we brand consultants argued over the viability of competing with yourself. How could Amazon offered books but let other vendors offer the same books cheaper? But it was not about the books, right? It was about the vision of becoming a trusted platform for all the things you want to buy.

Not incidentally, Amazon also mainstreamed the unfiltered customer rating system and accompanying in-depth reviews. They did it before it was cool, because they understood that unless the customer is completely empowered to share their experience with other customers, the trust factor is lacking.

Also not incidentally, Amazon customers have their own stores on the platform.

So the trend is toward individual customers becoming not just marketers but entrepreneurs who compete with corporations. They are helped in this by cloud computing where you essentially rent what you used to have to own, from platforms such as Amazon (yep) and Google, not incidentally top brands themselves. Cloud computing requires a tremendous level of trust. Instead of buying a car to get around, I'm joining a car service so that I can get "wheels when I need them" -- actually, that's the successful Zipcar car-sharing model.

In an extremely challenging job market where "a record number of U.S. millennials are forced to live at home" (36 percent or 21.6 million, according to 2013 research by Pew); employers are "cautious" about hiring; and newly created jobs are "disproportionately low-pay or part-time," young people have every reason to start their own businesses. The room-letting service Airbnb is a perfect example.

In the future, making things and buying things are going to be one and the same thing. Owyang's 79-slide deck is a primer on the collaboration economy -- what it is and how to survive and even thrive. The short version is this: The most powerful and wealthy companies of the future will not corner the market on any product or service. Rather they will be the trusted platforms (like crowdfunding venture upon which those products and services are sold -- the ones people turn to when they want to start their own business, and most likely out of the room they grew up in as a kid.