CommonSense Blog

Internet of Things, End of Industry and China from Tech Savant, David Kirkpatrick

By Aaron Strout | Jan 11, 2015

The annual Consumer Electronics Show (CES) that takes place every January in Las Vegas is always equal parts amazing, informative and overwhelming. Many of the top CEOs and CMOs of the biggest companies in the world show up to speak, network, learn and do deals. As a result, thousands of start-ups, agency people, journalists and influencers show up to “fish where the fish” are. This year alone saw 170,000 industry professionals with 3,600 exhibitors on 2.2 million square feet of exhibition space.

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With so any voices and hundreds of different events happening from 7:00 in the morning until 4:00 AM Sunday through Friday, it’s hard to keep up with the fire hose of information. To that end, we at W2O Group have found sometimes holding smaller, focused, events during bigger events like CES, Mobile World Congress and SXSW helps our clients, partners and company leaders learn, discuss and synthesize key trends being discussed at these giant conferences. CES 2015 was no exception as our company partnered with one of the brightest minds in the Tech industry, David Kirkpatrick, and his company, Techonomy, to hold a private meeting with ten clients/friends of W2O last Wednesday, January 7, 2015.

At the round table event, David kicked us off by sharing observations from trends he covered as a journalist at Techonomy combined with insights gleaned from several of the talks he conducted at CES. This included a Keynote panel David led the day before with Cisco CEO, John Chambers, Comcast CEO and President, Neil Smit and Bosch Chairman, Werner Struth, Bosch.

David’s talk featured a few key themes including the concept of the “end of industries” or the diminishing of bright lines where they previously existed; the shift of power from the center to the edges that players like Facebook are facilitating; companies’ increasing obsession with innovation; and an increasing dominance of China as a player in the tech world. One of the boldest statements during David’s discussion came from his keynote panel the prior day where John Chambers claimed that “in 10 years it’s predicted that 40% of the Fortune500 companies will no longer exist.” Chambers — and Kirkpatrick’s points were, you must disrupt to survive.

While we didn’t record our session in order to offer a free flowing discussion among the senior level brands that attended, I did take copious notes during David’s talk. You will see that they roll up to some of the high level concepts I’ve called out out above:

  • Industries are converging e.g. Technology and Health. You can find a company like Celera (biotech) and Autodesk (software) are both mapping the human genome. Increasingly, companies will find non-traditional competitors (and partners) in their own backyards.
  • Every company is a software company. David cited a recent post by NY Times writer, Farhad Manjoo, that talked about the need for companies to focus on software vs hardware (ironic given the dominance of hardware on display at CES).
  •  One of the oddities of CES is that it doesn’t feature smart phones — Mobile World Congress is where that conversation happens. Key trends that David noted from this year’s CES including the Internet of Things (IoT). David reinforced that IoT is a fascinating and important trend (including wearables).
    • IoT – will literally connect everything in life (stomach to airport control tower)
    • Unilever has 2 billion users – how can they use a product that has text on it that people pick up every day. Could they become a communications company? David said that sensors will get cheap enough to put on every product down the road.
  • The companies that have the longest histories are the ones that can mutate themselves the fastest. They have learned over time how to mutate themselves. Small group of dinosaurs that are “built to last.” Getting harder for even the good companies to evolve.
  • 2014 is being called “the year people stood up.” Hong Kong, Mexico and Ukraine and Burkina Faso – all of which had people rise up using social media (all countries where Facebook is super strong).
  • More on companies obsession with innovation:
    • If you go to any city with over 300,000 people in the world – you will find a startup neighborhood with an incubator, VCs etc. The number of opportunities emerging is incredible and threat to incumbents.
    • Trends: starting internal incubators (Samsung), partnering with companies (Tech Stars), coming together with industries (fashion) and companies are coming together to co-innovate.
    • There is a company in NYC called Bionic. Their job is to help big companies innovate.
    • Companies like GE are working to adopt a startup mentality and focusing on an imperative for speed (more here from David’s interview with Beth Comstock).
    • Numerous companies are creating innovation centers in Silicon Valley.
  • On China
    • China can’t be talked about enough. Two poles of tech innovation in the future – China and US. Important to keep an eye on Chinese social media/ecommerce sites like Alibaba, Tencent (just opened a bank), Baidu. They are the next “Apple, Google, Facebooks.”
    • PRC has extraordinary support from the government although their lack of diversity hurts them (US as an example has drawn on attracting some of the brightest minds in the world over the past few centuries — China has been relatively insular).
    • They are innovating through copying. The more they copy other countries/companies products, the better they get at making faster, cheaper and more innovative alternatives.

Following David’s talk, we had a 20 minute Q&A where leaders from the automotive, telecommunications, financial services and other industries drilled down on some of David’s talking points. This led to more thought provoking concepts:

  • Uber/AirBnB – neither of these companies are in the industry they operate in (both are marketplaces vs. a taxi or hotel). AirBnB is already doing restaurants. Ability to tap into the capacity of society. The more of these platforms that emerge, the more people can make money.
  • David worries that the pace of change today puts people in jeopardy more so than in any other generation.
  • For some large companies, people aren’t just interested in the job (good or bad) their front line employees like technicians do, but rather the role they play in the community the company serves.
  • The Dollar Shave Club was cited as a company that is truly disrupting the shaving industry. Their product may or may not be better, but their delivery model is significantly different than that of P&G or Unilever.
  • David’s take on IoT: someone needs to come along and organize IoT (David thinks Google is in the best position to do this). We probably need the government to come in and provide regulations that facilitate someone like Google curating their data.
  • You can go into your Google Maps and see everywhere you’ve ever been as long as you have sensor turned on. If it’s not turned on, you can’t use services like maps.
  • Privacy is a cultural thing (not nearly as big a deal as in Asia as it is in US).
  • Right now, China is growing at 7% and are crying (we would kill to grow at 7%). It helps to have 1.3 billion people/test market (closed).
  • In China – company knows well enough how to unfairly advantage its own businesses (US doesn’t according to David).

Last but not least, W2O President, Bob Pearson walked through 12 thought provoking trends (technology and marketing) with the group that facilitated some fascinating discussion. Bob’s deck is embedded below via Slideshare.

All in all, a thought provoking day building on some thought provoking time spent at CES. Have additional questions based on what you read? Let me know and I can elaborate or can reach out to David to get more information.