Keynote: DWWA Amsterdam

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

I usually talk about

Creative


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1960 1970 1980 1990 2000 2010

distribution
user interface
functionality


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• 1 terabyte of data (1,000 gigabytes)
• 50 magnetic tape drives
• 25,000 magnetic tapes
• 100 DASD units (~10 GB) distribution
user interface
functionality


1960 1970 1980 1990 2000 2010

distribution
user interface
functionality


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


1960 1970 1980 1990 2000 2010

A >

distribution
user interface
functionality


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


1960 1970 1980 1990 2000 2010

distribution
user interface
functionality


1960 1970 1980 1990 2000 2010

service product

distribution
user interface
functionality


services will become increasingly
tangible and behave more like
products

products will develop sophisticated
logical service extensions and
behave more like services


Four laws


Sarnoff’s Law

The value of a broadcast network is
proportional to the number of
viewers.


television print radio outdoor


Moore’s Law

Computing power increases
exponentially - effectively doubling
every 2 years.


hard drive capacity over time


Metcalfe’s Law

The value of a telecommunications
network is proportional to the
square of the number of nodes of
the system.


Reed’s Law

The utility of large networks,
particularly social networks, can
scale exponentially with the size of
the network.


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.


Creators

Contributors

Consumers


if this is your product or
so
service ...

what do you do
with this?


Media and the Internet


Four point ﬁve mediums

television print radio outdoor interactive

True Use


"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


print radio

television outdoor

interactive


Four mediums and a platform


interactive


traditional media are great at starting the conversation

but very bad at “ﬁnishing”

the Internet is extremely good at “ﬁnishing”

and “continuing”


The corporate website is not a good use of a platform


= the typical monolithic
corporate website
(www.coke.com)

= the future of
distributed
functionality

Facebook
applications


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


Service products
expanding the concept of what services
should be


"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."


✓ 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


$3.25
billion in
support
costs

325 million
calls per
year

Cumulative Calls (in millions) Cumulative Cost (in millions)


crowdsourcing
community based support
distributed participatory support
citizen science
mass collaboration
wisdom of crowds


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


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


✓ 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


$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)


crowd-sourcing support


• “virtualize” the phone
• create multimedia tutorials
• allow users to create and share
their own tutorials / tips


✓ 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?


Product services
expanding the concept of what products
should be


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


the Coke Network

• they have power
• they have proximity
• located where people “break”
• part of social fabric


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...


• iPhone / iTunes
• most mobile devices
• cable boxes
• Tivo

physical products

logical
products

consumer product design
all design

today

79

• cars
• refrigerators
• televisions
• all mobile devices
• remote controls
• home entertainment
•?

physical products

logical
products

consumer product design
all design

tomorrow

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?


Story systems
creating stories with consumers through coordinated use of
new media


1960 1970 1980 1990 2000 2010

distribution
user interface
functionality


the ambient network

television computer mobile

passive interactive interactive
entertainment productivity connection
lean back lean forward lean forward

Three screens


"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


print
radio

television
outdoor

interactive


Story systems

Holistic systems that properly utilize
the true use of traditional media and
online interactive media to facilitate
dialogues with, and between,
consumers.


Every click is a wish


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.


Thank you!


Keynote: DWWA Amsterdam

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