Rishad Tobaccowala: The Old Ways Don’t Work
In the 3rd and final article from my interview with Rishad, we get into the future of business and how it is likely to change.
Historically, the customer journey was comprised of a process that began with awareness and ended with a sale. This is typically designated as a funnel – a top to bottom process. Multiple channels created a left to right process and this combination was what constituted the customer journey. Measurements were set up by each channel and/or type of media to try to track ROI.
In a recent post on his substack titled “The Future is Elastic”, Rishad details the increasing complexity of the way consumers (and businesses) purchase products and services. I recommend you read his post to get a deeper understanding of some of the issues we can only touch on here.
The basic premise is that the increasing complexity and constant state of change creates a situation for businesses where the customer journey is no longer recognizable. Today, a customer might watch an influencer video on Tik Tok and show up at a Target store to buy the product. It is impossible to track and attribute that sale.
The challenge for business is that even with a simple example, it is clear the old ways don’t work anymore. The accelerating pace of change, complexity and volatility make understanding customers very difficult. You need a lot of touches to understand the customer today. Because of this, the number of customer signals and the speed at which signals are coming at companies requires sophisticated algorithms, massive amounts of data and massive amounts of computing. The technology will sit on top of the data and ultimately companies will need to leverage this to create trust.
Technology Categories to Watch
This is going to create significant opportunities for technology companies in three broad categories.
The first category is managing massive amounts of data. Companies like Snowflake are going to see dramatic growth opportunities.
The second category to watch is blockchain. Blockchain will revolutionize industry after industry starting with finance.
The third category is Machine Learning and AI. Nearly one third of Amazon’s marketplace sales occur after a product is purchased. One of the things ML does is look for patterns and correlations. When you checkout with a purchase, the platform understands the buying behavior of others that purchased that specific product and simply informs you on that correlation. The machines are now understanding the patterns and making recommendations resulting in additional revenue.
Companies like Google and Apple present unique challenges for marketers. At one point, Booking.com was Google’s #1 advertiser. Today, 40% of all travel searches takes you to Google sites because Google has vertically integrated into travel. Google’s new mechanism is, they don’t want to send people anywhere, they want to answer the question and monetize the sale.
Bundling
Marketers are waking to realize they need to do three things in order to compete with this:
- Create a relationship with my customer directly without involving others
- Maximize the Life-Time-Value of those customers through bundling of products/services
- And bundling with partners
To a great extent we will continue to see bundling alliances being between firms like Marriott and United Airlines but Apple and Amazon are perhaps the best examples of how firms are positioning themselves.
Apple basically has a huge services business. It is clear to Rishad that Apple intends to provide as much necessary services as they can directly to their customers. Banking, cars, technology, entertainment etc. Everything they can provide you will be financed at zero percent interest through Apple Pay. Apple will extract the maximum LTV from each of their customers because they have the data that facilitates understanding those customers.
The Data is Important
Data is really important. It is experience. It is the key to understanding.
“… the person on the other end is looking for something called SAVE. They’re looking for Solutions; just solve my problems. Don’t tell me what you can do; just solve my damn problems”.
Access makes things easily accessible. You should not have to re-enter passwords to access everything you want to access.
Value is can I trust you? Values is what sort of company do you run?
Experience: that’s what data is.
“It’s about Solutions, Access Value, and Experiences. None of this other stuff about data matters. You know, as I tell people, nobody cares about how your stupid colon works. Did, you want to see the cool shit? Right, show me the cool shit”.
The Future of Entrepreneurship
“I think entrepreneurs are going to be far more empowered as we move forward than ever before. There are three reasons why I believe that is true. Despite all the noise that we hear about how dominant some of these platforms are. First, they are less dominant today than they were a year ago. Part of what these dominant companies have done, is they provided amazing tools for entrepreneurs? So, you know, there’s obviously a lot of downsides to a Meta but the same time, hundreds of millions of people now can advertise their products and services: small shopkeepers, entrepreneurs etc. Through some combination of Amazon, Google, Microsoft and Apple you could run a company using billions of dollars of technology that you just click in to”.
Second, Web 3.0 is going to be very enabling for individuals because the token system (among other things) will allow people to monetize themselves. There is going to be more data and people will have more ownership & control over their data. “If you’re into music go look at royal.io. If you are into sports, go look at autograph.io”.
Third, health care needs to become affordable. The risk and costs of healthcare in the United States are an impediment to entrepreneurship. When healthcare becomes affordable, fewer people will stay in large companies. By 2030, more people will be working freelance than full time. This will create political pressure for the US government to fix this affordability issue.
Once these three conditions are met, Rishad believes there will be a Renaissance of Entrepreneurship.
Predictions
- Four industries represent more than 50% of the US economy – healthcare, finance, education & automobiles – will be fundamentally changed due to software, electric and new ways of leveraging data.
- Many of the global institutions will have to be rethought as they were formed after World War II. Society experiences chaos today, in part, due to the fact that “The Future Doesn’t Fit in the Containers of the Past”. Rishad used the example of the United Nations and today’s reality in terms of India. While western nations have flat population growth, India’s population is growing. A nuclear power, the largest democracy on the planet and a rapidly growing economy. Their population is 25 times that of the UK and is about to take over the 5th position in economic size. Yet, they do not have a place on the UN Security Council.
- Breakthroughs in health care because of biotechnology.
- The next generation of individuals who are in the 20s and teens and early 30s are in a very connected, diverse world where their talents can be actualized.
Rishad wrote an article where he details how and where he sees major change occurring. For more information on his predictions you should read “Ten Predictions For the Next Decade”.
The Future for Rishad
Rishad helps people see, think and feel differently about how to grow themselves, their teams and their organizations. His toolkit for doing this are points of view, perspectives, provocations and some plans of action, but no PowerPoint.
That service is offered in three different ways:
- One-to-many. This includes his current book Restoring the Soul of Business, (note to his fans – there is a second book in the works), the weekly substack posts which reach 25,000-30,000 people and his podcast “What’s Next”.
- One-to-some. Keynotes, workshops and executive offsites.
- One-to-one. This where Rishad works directly with large companies, private equity and venture capital.
His focus is and will continue to be to help people grow.
Takeaways
- The pace of change is accelerating creating massive growth in data and computing capabilities
- The future is “elastic”
- Bundling is required to maximize LTV of customers
- Data is experience and it is very important
- Entrepreneurialism will experience a renaissance once healthcare becomes affordable
About the author:
Jeff Leroux is an experienced Silicon Valley executive with a broad background in tech and thought leadership marketing. He is on contract with Happy Gilmore Marketing to complete a thought leadership series on security & privacy compliance.