The Economics of Immortality

Posted by Mike Walsh ON 9/1/11 1:13 AM

Wall

I once asked a well connected friend from the Valley what the stock rich digerati spent their billions on once they exhausted their penchant for Ferraris, Gulfstreams and obscene boats. ‘Secret labs’, he replied cryptically. ‘Now that they are richer than God, most of them are scared of actually meeting him. So many are busy funding scientists and private institutes to keep themselves alive for as long as possible.’ Eccentric, wealthy centenarians are one thing - but to me the real question is what happens when life extension moves from the realms of the super-rich to the masses. In other words, what impact will the economics of immortality have on the rest of us?

Let’s try a thought experiment.

Imagine that life extension technology now exists. It could be in twenty years or a hundred - but for the purpose of discussion, there are two key assumptions that matter. Firstly, it will be expensive. Regardless of the actual production and implementation costs of the treatment, the companies who develop it will need to recoup their significant R&D investments and maximise their opportunity for making money while still protected by their patents. Secondly, longevity is unlikely to be a once off process. Similar to servicing a car, extending life is likely to require a program of regular treatments, physical monitoring, and constant adjustments in lifestyle to achieve maximum effectiveness. Given these two conditions, here are my predictions for the future impact of mass market immortality.

The Rise of Info-Pharma Giants
Living longer is a problem whose solution may well be part medical and part informational. Rather than a generalised elixir, life extension is likely to require highly personalised medicine. In other words, your treatment will vary depending on your genetic background and the way you live. Accordingly, the companies that will dominate in the space are likely to combine the medical rigour and research funding scale of large drug companies, with the information processing and data analytics of software or cloud computing giants. In fact, by the time life extension becomes a reality - the merger of an IBM and a Pfizer, may actually be more plausible than today's shotgun marriage of a Google and Motorola.

Immortality As A Service
One possible way that longevity could be made affordable will be to structure it as subscription service. Your monthly charges may vary depending on your individual condition, conformity to certain lifestyle parameters, and how early you begin preventive treatments. ‘Immortality as a service’ providers will monitor their clients very closely - most likely using technology that evolved from today’s mobile bio-informatics apps. So be warned - unhealthy lifestyle choices or dangerous physical hobbies are likely to be met with severe subscription rate hikes or even a cancellation of service.

P2P Meat Markets
The alternative to a subscription funding model` is someone else paying for your extended lifespan. It is not uncommon for rockstars to securitise their future earnings from their back catalogue and get their money upfront, but what about ordinary people? Financial institutions may baulk at the uncertain risks of securitising an individual, but what about a P2P loan market for medical treatments? Consider this scenario - browsing through a virtual stock market of individuals, weighing up their career prospects and capabilities, their influence networks and personal projects - before deciding who you are willing to back with your funds. However, peer funding will be a double edged sword for those who take it. Imagine having to justify quitting your job or taking a holiday to your own personal board of directors.

Social Stagnation
If you want to picture the potential social impact of extended lifespans, the best place to start is Japan. According to the World Bank, the average life expectancy in Japan is 82.9 as compared to the global mean of 69.2. Due to both longer life spans and a strong cultural deference to family elders, young professionals entering the workforce in Japan often have to wait until well into their middle age before gaining positions of influence or power. In our future scenario of extended lifespans - this may become a common global phenomenon. When the rich and powerful hold onto their toys way beyond a normal lifespan, you will see increasingly aged company boards, the indefinite delay of retirement, and a calcification of inherited wealth. And if the new rejuvenated elderly are smart, they will concoct elaborate changes to the educational system to keep people in training longer and even encourage an extended adolescence in ambitious juniors - all to distract them from the reality of their continued grip on power. Bread and circuses indeed!

Black Immortality Markets & Rogue Rejuvenation States
Whether you are a Hollywood Studio defending your movie library, or a luxury brand protecting your handbags from rampant imitation - piracy is already a global epidemic. But now consider the consequences of companies or countries stealing technology to prolong life. Prohibitive pricing and the divisive politics of life extension would certainly be sufficient incentive. Would some emerging market in 2050 proactively encourage reverse engineering longevity technology to provide their citizens with a competitive edge against other nations? Whether it be cosmetic surgery or pregnancy terminations - patients already travel to arbitrage different regulatory regimes and the relative cost of medical treatments. Will we abandon our countries of birth in the future, in order to live longer in some other one? And in the spirit of the oil wars that defined the twentieth century - what kind of future geo-political conflicts could the battle for immortality inspire?

Of course, you should read all of this with a grain of salt. The true consequences of widespread longevity will be impossible to fathom until we actually have to live through it. But as the post war baby boom, China’s One Child Policy and India birth gender selection all demonstrated - small changes in demographics can have devastating impacts to human society. In the meantime, keep a close eye on the world’s technology billionaires. When one of them runs a decent time in the New York Marathon at the tender age of eighty-five, you know a brave new world is almost upon you.

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CATEGORY: Health

Why Inspiration Trumps Imitation

Posted by Mike Walsh ON 8/23/11 4:11 PM

Sony Store

You can have too much of a good thing, especially if it wasn’t yours to start with. Here’s the perfect example - brands that shamelessly imitate the strategies of their major competitors. I was scouting the Westfield complex in Century City, LA last week and noticed a new Sony concept store a few feet from a classic Apple retail shrine. It was striking how similar both stores appeared, except for one crucial distinction - Sony was devoid of customers.


Years ago I remember watching a fascinating interview with Steve Jobs. He was comparing himself to Microsoft and Bill Gates, explaining that their mission at Apple was to take as much as they could from art, music, history, science and technology - in his words ‘the best things that humans have done’ - and cram it into their products. That’s why, he said while people use Microsoft products, they love the ones that Apple makes. The difference was passion.

Apple’s retail strategy is also no stranger to appropriation. Next time you are in front of one of their stores, stop for a minute and squint your eyes so that the laptops and screens disappear and all you can see are abstract shapes, materials and lighting. Anything look 


familiar? When they designed their stores, Apple took direct inspiration from the world of luxury boutiques with their expensive construction materials, theatrical street presence and sparse merchandising, They ruthlessly imitated, but importantly - it was not from the playbooks of their immediate competition.

That said - there are some limited scenarios when direct imitation works as a disruptive strategy. For example when you take an expensive product, and deliver a comparable substitute at a dramatically lower pricer point. Although their customers might deny it - low priced imitation is the secret behind the success of fashion brands like Zara and H&M. They directly copy high fashion styles from established luxury brands, and rapidly manufacture and curate market appropriate products at prices mass market consumers can afford. Not so dissimilar is the practice of Chinese ‘shanzhai’ or bandit phone manufacturers, who offer clones of high end smartphones at substantial discounts to their originals, and in doing so, open up entirely new consumer niches.

The distinction between inspiration and imitation might be nuanced, but the competitive differentiation can be vast. Steve Jobs was always fond of the infamous Picasso quip - 'good artists copy but great artists steal'. But what does stealing really mean? When you steal something, you don’t just take it - you make it your own. Sage advice for the next time someone asks you to look over your shoulder and mindlessly mimic something your competition does.

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CATEGORY: Retail, Marketing

A World Without Apps

Posted by Mike Walsh ON 8/14/11 9:06 AM

apple

I love apps, I hate apps. Their ingenuity and variety has brought fun and delight into my life, but I also long for a world without them. That is to say, a world without a handful of companies circling their wagons around my content and how I interact with my community. Fortunately something happened this week that should fuel a glimmer of hope for an alternate mobile future.

The real issue is not whether Apple or Android will win the war for your mobile phone, but rather the nature of the game they are forcing us to play. The digital revolution is at a crossroads. The Web was designed to be an open platform for the networked navigation of content, but increasingly it is under challenge by those who would allow it to become a walled garden for social media monopolists or a background pipe for proprietary mobile applications. In that context, Amazon’s lastest challenge to Apple’s control over your smartphone is a welcome development.

I still remember the day I made the heart wrenching decision to move all my physical books into storage and embrace the Kindle. Dust, space, and endless hours on airplanes finally killed the romance of ingesting words on dead trees. Now I read my books on my phone, my iPad and, when in direct sunlight, on a Kindle e-reader. After this week, I also have the choice of reading them directly from the Cloud. At face value, Amazon’s new HTML5 Kindle app might not seem that game changing but think for a minute what it actually represents. One brand platform, no App Store, no software downloads - just your content, on any web enabled screen wherever you are.

HTML5 has been kicking around for a while, but now that platform providers are playing hardball on their approval processes and demanding a greedy bite of third party revenues on content sales - publishers have a growing incentive to bypass them altogether. Amazon will not be long alone in this nascent uprising. Magazine and newspaper owners are growing uneasy at losing their direct billing relationships with their audiences. The Financial Times has already launched its newspaper on the HTML5 platform. More will follow.

There is a deeper thread to this conflict worth noting. At the moment, mobile application development is a nightmare in diversity. Different screen formats, multiple device profiles and divergent operating systems add up to costly duplication of work and complex testing processes. For CIOs in particular, this creates all kinds of headaches when deploying services in the enterprise. But in the future, what if you could virtualise any application and deploy it in a web browser? Music, productivity tools, secure communications, video games, newspapers - all hosted and deployed from the Cloud, irrespective of what device you are using.

Cloud virtualisation is not good news for everyone. It erodes the platform power held by Apple who have used the iTunes ecosystem to defend the high margins of their hardware products. And while in the short term, a shift to the Cloud might help challenger brands like Samsung, Sony, LG and HTC - in the longer term, even they will suffer as hardware and bandwidth commoditises and value shifts to a hyper-competitive era of platform agnostic applications.

Don’t sell your Apple stock just yet, but I do think we will look back and remember 2011 as the year this innovative company and its CEO were at the historical peak of its powers.

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CATEGORY: Culture

The 7 Motivators Of Sharing

Posted by Mike Walsh ON 8/7/11 4:56 AM

baloon

 

Now that it is fashionable to be sociable, those wretched share buttons are turning up everywhere. Read an article, book a flight, buy some shoes, finish a book - you are endlessly encouraged to let other people know. Surely it won’t be long, before they even ask us to tweet about paying our traffic fines. But here’s the problem. Making it easy for people to share is a necessary but not a sufficient condition for social success. People are happy to share things when they feel like it. The real question then, is what motivates them?

No one wakes up in the morning thinking they need to share something on Facebook. Perhaps you could argue that spending time on social networks nourishes the ‘belonging’ phase in Maslow’s infamous 'Hierarchy Of Needs'. Personally, I’m not convinced that human desires are even hierarchical to start with. But there is no doubt that when it comes to our online behaviour - we are just as emotional, irrational and driven as we are in the physical world. From my observations of digital consumers - I’ve created a list of seven motivating factors for why people share. Here they are in no particular order:

1. To be a network alpha
There is always someone in your group who likes to be the first to discover and share the latest pop culture meme, interesting article or crazy statistic. This is no accident. ‘Network alphas’ spend a considerable amount of time and effort to establish themselves as the primary node in your circle of friends. They share content because it establishes their status in their group. If you want them to pay attention to you, make sure you feed them your material first.

2. To be more attractive
If you thinking about human motivators, you can’t go very far without acknowledging the magnetic compulsion of sex. People share inspiring quotes, their dreams and passions, pictures of themselves having fun on exotic holidays or driving glamorous sports cars - not for the sake of pure content creation, but rather to signal their suitability to the opposite sex. If we reveal ourselves through what we share, ask yourself this - will sharing your content make someone look sexy, or a complete dork?

3. To think out loud
Sometimes people also share things for organisational reasons. Everyday I share dozens of articles on del.icio.us - not because I care whether anyone is subscribing to my feed, or because I’m trying to vote up a particular article - but for the simple fact that tagging and sharing means that I can come back later and access my research from the Cloud.

4. To be part of something bigger
Sharing can also be a way of participating in a groundswell of collective action. We can add our ‘likes’, comments and votes to a big idea, a timely charity, or an election campaign. The visibility of our sharing behaviour during this process is important - because it binds us closer together with people with similar views and passions. That is why the share counts on posts or webpages can create momentum effects.

5. To build social ties
Have you noticed that after a party or a work function, there is generally someone in your network who insists on uploading photos and videos and tagging everyone in them? Sometimes it is a nice way to relive the collective moment. Other times - it’s an embarrassing reminder not to drink Tequila in public. But social cohesion is a powerful force. Groups - social or work related - become more dynamic with a greater sense of common purpose when they participate in collaborative sharing behaviours.

6. To get feedback
Content creators are motivated to share content to get feedback on their ideas. There is nothing less inspiring than writing a blog post or editing a video, for it then to languish in isolation on your hard drive. People who write and produce, do so increasingly for a public audience. We share what we make with people we hope will in turn share it with others.

7. To be famous
The final, and perhaps the overriding motivation for online sharing behaviours - is to get noticed. There are many figures in the digital community who are largely famous for being famous, and who have used social media and frequent sharing as a way of building their fan bases. Super sharers like Robert Scoble, Gary Vaynerchuk and Guy Kawasaki have built large followings as a result of early adopter domination of new social platforms. Sometimes you don't have to offer free iPads or discounts to get people to share. Help them become more visible in their networks, and they will move mountains to share things for you.

A few caveats. Firstly I'm not the only person who is thinking about this. The New York Times and Latitude Research recently put out their own research on this subject. You can read it here. The other thing you should bear in mind is that any list like this needs to be taken with a cultural grain of salt. Consumers will behave very differently online and on social networks depending on their cultural programming. To be considered ‘digitally social’ in Brazil means something very different than what it does in the US, or in China for that matter. Nevertheless, if you are a brand or a professional marketer - understanding the true motivations for why your customers are willing to share your content and products is essential for your long term survival.

The future of marketing may be social - but the brand consumers care about is theirs, not yours.

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CATEGORY: Marketing, Social

Appify Your Appliance

Posted by Mike Walsh ON 7/31/11 1:50 AM

nespresso

As a coffee aficionado, I never thought the day would arrive that I would love an automatic coffee machine. But it’s true. I love my Nespresso machine. I bought my first in Hong Kong when I struggled to find a decent coffee anywhere on the island. And I’m embarassed to say, I sometimes even choose hotels based on whether there is a similar machine in my room. But if Nespresso, owned by Nestle, represents the past triumph of applying the Gillette ‘razor and blade’ business model to beverage consumables - it also points to the present failure of appliance brands to capitalising on their captured consumer base.

When you buy a Nespresso machine they ask you to provide your details to join their coffee club - ostensibly so that they can keep track of your consumption and prompt you to service your machine at the right time. Not a bad premise, and certainly a smarter engagement tool than the standard warranty database coupon. But what if there was a Nespresso app store that sold apps that let you customise your brew strengths or program automatic functions? How would that change the economics of the business? White goods manufacturers would certainly stand to benefit from similar thinking. You may buy a new washing machine only once every 5-10 years, but what if you could get consumers to upgrade their software applications that controlled energy usage, spin cycle programs and other features once every quarter? Turning durables into consumables was a neat magic trick for many appliance brands in the last ten years. But for the next stage in the game, they need to be thinking about the broader information ecosystem that surrounds their physical products.

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CATEGORY: Innovation, Culture

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