When ecosystems meet: Hootsuite + AdEspresso

A few days ago, AdEspresso – an ad tech company based in Milan and San Francisco – and Hootsuite – a social media management company headquartered in Vancouver, with offices from London to Singapore, from Bucharest to Sydney – announced that AdEspresso is joining the Hootsuite family. This is fantastic news for both, and I want to celebrate this moment myself as a mini-angel, because together with a small group of angel investors, notably Andrea Rota, I backed AdEspresso starting in 2013.

It is true that AdEspresso was accelerated at Dave McClure’s 500 Startups in late 2013, and that the special sauce in the San Francisco Bay Area was an important ingredient in brewing the deal. But Ryan Holmes, Hootsuite’s CEO, is passionate about rekindling a tech future in Canada. Massimo Chieruzzi and Armando Biondi, AdEspresso’s founders, point out that the AdEspresso product and design are “Made in Italy”, and the company has always kept its Italian heart.

Are we at the point where we will see more deals like this? Digital platforms with hundreds of millions, soon to be billions, of people using them every day are indeed based in the Bay Area (and in China). But while they are creating unprecedented wealth concentrated in their corner of the world, they also create unprecedented opportunity for companies to be built by “riding the tiger” of those platforms, pretty much from anywhere. The Bay Area has a huge concentration of talented and ambitious people; but it does not have a monopoly on ideas, on technical talent, on the ability to serve customers, on hustle, on grit. I would not be surprised at all if the next Hootsuite and the next AdEspresso were born out of Poland, India, Portugal or Ireland.

In the meantime, congratulations to Massimo, Ryan and Armando (pictured below) and a few more of my thoughts on the deal (in Italian) in these media interviews:

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Image: Massimo Chieruzzi (AdEspresso), Ryan Holmes (Hootsuite) and Armando Biondi (AdEspresso) celebrate the announcement. 

What to look for in your next Chief Digital Officer

I am often asked to help people define what CEOs should look for in a candidate for the Chief Digital Officer position. My past eight years of digital experience have taught me that most companies tend to clearly see one or two sides of the job description and corresponding skill set, but cannot articulate in their entirety what should really be a multifaceted role – nor their expectations for impact or even outcome metrics.

Chief Digital Officer

This is my cocktail-napkin framework for the skills you should expect a Chief Digital Officer to bring to your company. A 2012 Russell Reynolds article listed part of them, but I believe this framework completes the scope of the role in important ways that were not originally covered; for more literature, see this McKinsey survey and this Forrester report (Forrester clients only). So, what does the CDO need to know how to do?

  • Online marketing, social media and digital PR. Most marketing and communication-focused companies, such as those in fast-moving consumer goods, are quite aware that the ways to drive brand awareness and engagement have shifted dramatically in the digital era; and that they need to move from traditional metrics, such as GRPs, to much more granular digital measurements. Market research, a cornerstone of many organizations’ plans, is largely shifting to online platforms, too; and digital listeners who can find the signal in the noise are in high demand. Yet, listening and communicating well in the digital domain are far from the only required capability; and what looks like the cutting edge today quickly becomes table stakes tomorrow.
  • E-commerce, digital distribution, multichannel. Retailers and manufacturers in many sectors are aggressively pursuing online sales: consumers are looking for your products online anyway, so hiding your head under the sand does not work, and in high-margin sectors such as premium and luxury goods a digital sales strategy is – at last – no longer shunned as damaging to the brand. Metrics here are about conversion, revenues and margins. The Chief Digital Officer will be the cross-channel integration champion in the organization, knowing when to push and where to stop: users will prize a seamless experience across a few channels much more than a complicated and fault-prone experience across many channels.
  • Online service and CRM. Customer expect you to be online, 24/7, to answer their questions, and no longer just at the other end of a toll-free number. What often starts as a marketing-focused corporate social media presence almost always needs to be complemented by strong online customer support capabilities; forward-looking banks, insurance companies and utilities are increasingly proving their worth in this arena. Here, the relevant metrics are customer service metrics; a digital customer operations mindset and expertise are needed, enabling in turn the generation of additional upselling and cross-selling opportunities.
  • Digital product and technology. The previous three quadrants extend what you are doing in the analog domain and can give you a competitive advantage: yet, it is only if you are able to reinvent your product into a profitable digital experience that you leave your competition in the dust. Media publishers, music and movies have struggled with the “profitable” part of the equation. Among successful examples, on the other hand, witness how Nike has positioned the Nike+ FuelBand at the center of a whole new Nike+ ecosysytem – remember, they used to make running shoes. A lesser-known but fine example of product redesign for the digital era is the new Getty Images watermark. From thermostats to cars, over the next few years all sorts of products and services will become very different from what we know today. If you’re not sure, go back and re-read Marc Andreessen on why software is eating the world. A good and easy-to-read guide to some of the disruptions is the recently published Age of Context by Scoble and Israel.

(Note that you can use this framework to get immediate clarity whenever a fuzzy digital project comes your way. Suppose, for example, that your team tells you “we ought to make a mobile app.” Is this a communication (or, worse, a vanity) app? a sales app? a service/CRM app? or an app that supplements, enhances, reinvents or revolutionizes your product or service? This way you can quickly define the right metrics and set your ambition levels.)

Underlying these four capabilities, your Chief Digital Officer should be able to foster a digital culture and nurture digital talents. Collaboration and knowledge sharing within the company must mean more than having an intranet, a digital suggestion box or even a prediction market: digital tools should foster your employees’ sense of community and belonging. Millennials thirst for transparency, openness and meritocracy; they will expect your company to be much more like an open-source-based software project and much less like the bureaucracy you grew up in. See this Gary Hamel talk if you’re not sure of what you should aim for.

In summary, a Chief Digital Officer is not just – as he or she is often portrayed to be – a good general management talent who has learned a few sexy digital marketers’ tricks. In my experience she will be much more impactful if she has a 360° vision of the future around her, not just of her product or industry; if she knows the front line well and has got her hands dirty with operations; and if she is unafraid to lead the evolution of the company’s culture.

The dream that failed. The Economist on nuclear power

ImageOne year after Fukushima, the Economist has published a special report on nuclear power, which I recommend you read in its entirety if you are interested in the past, present and future of power sources on our planet (article and further links here).

It is a fascinating report (pictured: Enrico Fermi), and it ventures into broader issues of technologic success and failure (emphasis added):

The ability to split atoms and extract energy from them was one of the more remarkable scientific achievements of the 20th century, widely seen as world-changing. Intuitively one might expect such a scientific wonder either to sweep all before it or be renounced, rather than end up in a modest niche, at best stable, at worst dwindling. But if nuclear power teaches one lesson, it is to doubt all stories of technological determinism. It is not the essential nature of a technology that matters but its capacity to fit into the social, political and economic conditions of the day. If a technology fits into the human world in a way that gives it ever more scope for growth it can succeed beyond the dreams of its pioneers. The diesel engines that power the world’s shipping are an example; so are the artificial fertilisers that have allowed ever more people to be supplied by ever more productive farms, and the computers that make the world ever more hungry for yet more computing power.

There has been no such expansive setting for nuclear technologies. Their history has for the most part been one of concentration not expansion, of options being closed rather than opened.

The Internet we want

I couldn’t quite put it in words, but there was something that nagged me as I re-emerged from two days at LeWeb ’10 in Paris (videos here). A feeling that, as we collectively build the Internet, we’re building a better and better toy for a digital elite, much like the audience in the room. And why not? Even when we innovate outside the online domain, we get excited at brain-wave exploration, solar-powered planes, and iPhone-controlled drones. We’re geeks, we like geeky stuff, and some of us like it so much that we become entrepreneurs and build it.

Then we wash our collective conscience by contributing to a children’s hospital via Facebook Causes, donating to the Homeless World Cup, or funding some third-world entrepreneurs on Kiva.

And yes, the very best of us apply their geek skills to big problems and come up with big solutions that do realistically, in the long run, have a shot at changing the world: I am thinking of Shai Agassi and Better Place. They should be applauded. The rest of us seem to be too busy making money with gaming, or coupons, or whatever the flavor of the day is.

But we still have a digital divide to deal with, it’s in our own backyard, and it’s not getting any smaller. While we live more and more digitally enriched lives each day, our next-door neighbors don’t know how to deal with their Facebook privacy settings, and don’t care. For us, the future of information in a post-WikiLeaks world is a crucial matter of civic engagement worth getting intensely preoccupied with; for the less digitally literate, it’s one more headline among the gossip in the evening newscast. Did we think that the Internet would educate and inspire people, empower the downtrodden, lift millions out of poverty and disease? While we certainly enjoy our digital toys, I’m sorry to say that very little of this has happened. The Internet hasn’t yet made a difference.

And here’s the paradox: as Umberto Eco said in a recent interview, fifty years ago the television educated the poor and entertained the rich. Today, the Internet is educating the rich and entertaining the poor.

I have always believed in the Internet as a force for societal change. But we’re not yet building the Internet we want.

Up close and personal

There is a megatrend on the Web today, and it’s called personalization. I didn’t say a “new” trend: Amazon, after all, has provided you with remarkably accurate personalized product recommendations for years. But it’s a bigger trend today now that more crunching power is cheaply available, more and more of our preferences and behaviors become susceptible to reasonable approximations by algorithm, and more smart entrepreneurs move to take advantage of it.

My quick scan of the TechCrunch headlines today provided, at a glance, three examples of hyper-personalization (links point to the TC articles, by three different writers – what a story if an editor had thought about weaving them together!):

  • My6Sense, an RSS content filtering tool that resulted in an “a-ha moment” for the reviewer when absolutely relevant posts floated to the top of his iPhone screen, without the user having had to do anything else (no ratings, no preferences) than using the app as a reader for a couple of days.
  • BeeTV, a personal TV recommendation system from the brains of Gavin Potter, of Netflix Prize competition fame;
  • Covet.com, a clothing and accessories recommendations engine tailored to your style.

This trend will brilliantly simplify our lives if it helps us save time that we waste today. If you don’t like browsing through clothes, surfing through channels, scanning your RSS feed reader, flipping through bookshelves, reading movie reviews, turning the pages in a recipe book, choosing a toy for your nephew, researching holiday destinations and so on, then recommendation algorithms will solve the problem for you: voilà, you don’t know it yet but this will become your favorite TV show. If you don’t like dating and want to be in a serious relationship from day one, there are matching algorithms that will find you a compatible partner for life. And personalized medicine holds – of course – huge promise.

But we also need mechanisms for serendipitous discovery; for stretching one’s boundaries; for challenging one’s opinions; and for getting out of our comfort zone. (If schooling were organized by personalized preferences, how many people would ever get any basic algebra?) The personalized universe freezes us in time. It narrows our horizons. If not executed with a fondness for adjacencies and the odd curveball, it will let us dig ourselves  into a deep tunnel of 1970s progressive rock, if that’s where we start from, and never even discover 1990s grunge. It will keep suggesting backpacker hostels when we can afford four-star hotels, or four-star hotels when we can only afford backpacker hostels. It will make us into Burgundy experts, while we don’t know we might enjoy Bordeauxs better. It will reinforce us in our particular religious and political bias. It will perpetuate our teenage Ayn Rand infatuation.

Social media may come to a partial rescue of the algorithm: you can follow a friend’s recommendation for Industrial music if all you know is Alternative. But you must still have become friends with that person – or “social media friends”, if you’ve never met in person – on the basis of some shared worldview. A social media recommendation mechanism to open up our horizons would refer back to Granovetter’s “strength of weak ties” and perhaps upweigh the tastes and preferences of our weaker connections, so that we may discover and learn something new.

Personalized recommendations are undoubtedly efficient. If you want your life to become more efficient, you will use hyper-personalization to minimize the drudgery and get to a good enough solution quickly. But if at times you enjoy discovery, you like being challenged, you want to try something different – you will step out of your personalized universe and explore someone else’s, or create one that does not exist.

Cochlear implants, luddism and unnecessary suffering

If you know someone who wears a cochlear implant, you know what a difference it makes in their quality of life. Yet, research by prof. Huggy Rao of Stanford Business School shows that adoption of the technology was appallingly slow due to cultural resistance:

[…] the deaf rights movement slowed adoption of the cochlear implant—thought of by its makers as a cure for deafness because children who used it could more easily acquire language skills—by painting it as an innovation that presaged the loss of sign language and the destruction of the deaf community. In France, for example, a deaf coalition called Sourds en Colère (Deaf Anger) organized demonstrations against doctors who promoted cochlear implants […] [Deaf rights groups] used unconventional techniques—such as performing mime skits depicting French doctors performing operations on blood-covered children—to arouse public interest.