Presentation - Tim Smith - DWWA 2008

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

I usually talk about Creative Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 2

1960 1970 1980 1990 2000 2010 Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 3

1960 1970 1980 1990 2000 2010 distribution user interface functionality Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 4

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) distribution user interface functionality Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 7

1960 1970 1980 1990 2000 2010 • 23 pounds • 4 MHZ processor • $2,000+ US • 65k RAM • 5” screen • 300 baud modem • CP/M operating system distribution user interface functionality Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 9

1960 1970 1980 1990 2000 2010 A > distribution user interface functionality Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 10

A > You are in a clearing at the edge of a small meadow. A farmhouse is nearby. There is a mailbox here. A > 1960 1970 1980 1990 2000 2010 distribution user interface functionality Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 11

1960 1970 1980 1990 2000 2010 service product distribution user interface functionality Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 21

services will become increasingly tangible and behave more like products products will develop sophisticated logical service extensions and behave more like services Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 22

Four laws Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 23

Sarnoff’s Law The value of a broadcast network is proportional to the number of viewers. Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 24

television print radio outdoor Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 25

Moore’s Law Computing power increases exponentially - effectively doubling every 2 years. Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 27

hard drive capacity over time Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 28

Metcalfe’s Law The value of a telecommunications network is proportional to the square of the number of nodes of the system. Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 30

Reed’s Law The utility of large networks, particularly social networks, can scale exponentially with the size of the network. Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 34

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. Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 35

Creators Contributors Consumers Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 36

if this is your product or so service ... what do you do with this? Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 39

Media and the Internet Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 40

television print radio outdoor Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 41

Four point ﬁve mediums television print radio outdoor interactive True Use Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 42

\"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 Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 43

print radio television outdoor interactive Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 44

Four mediums and a platform television print radio outdoor interactive Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 45

traditional media are great at starting the conversation but very bad at “ﬁnishing” the Internet is extremely good at “ﬁnishing” and “continuing” Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 46

The corporate website is not a good use of a platform Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 47

= the typical monolithic corporate website (www.coke.com) = the future of distributed functionality Facebook applications Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 48

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 Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 49

Service products expanding the concept of what services should be Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 50

\"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.\" Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 51

✓ 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 Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 52

$3.25 billion in support costs 325 million calls per year Cumulative Calls (in millions) Cumulative Cost (in millions) Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 53

crowdsourcing community based support distributed participatory support citizen science mass collaboration wisdom of crowds Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 54

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 Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 55

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.” launched 2001 - founded by Eli Lilly Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 57

✓ 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 Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 59

$43 million in avoided calls $37 million ROI $6 million program cost breakeven in about 6 months Alt Cost (in millions) Avoided Call Cost (in millions) Alt ROI (in millions) Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 60

crowd-sourcing support Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 61

• “virtualize” the phone • create multimedia tutorials • allow users to create and share their own tutorials / tips Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 62

✓ 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? Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 67

Product services expanding the concept of what products should be Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 68

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 Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 69

the Coke Network • they have power • they have proximity • located where people “break” • part of social fabric Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 70

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... Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 71

• iPhone / iTunes • most mobile devices • cable boxes • Tivo physical products logical products consumer product design all design today Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 73 79

• cars • refrigerators • televisions • all mobile devices • remote controls • home entertainment •? physical products logical products consumer product design all design tomorrow Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 74 81

• 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? Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 75

Story systems creating stories with consumers through coordinated use of new media Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 76

the ambient network television computer mobile passive interactive interactive entertainment productivity connection lean back lean forward lean forward Three screens Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 78

\"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 Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 79

print radio television outdoor interactive Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 80

Story systems Holistic systems that properly utilize the true use of traditional media and online interactive media to facilitate dialogues with, and between, consumers. Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 81

Every click is a wish Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 82

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 them. Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 83

Thank you! Applied Design Group web/ www.applieddesign.tv email/ tim@applieddesign.tv phone/ +1.415.258.9575 84

Presentation - Tim Smith - DWWA 2008

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