Tech Sells, And Everyone Is Buying
What do McDonald’s, Honda Motor Co., and Nike all have in common? These 50-year-old-plus global giants have all acquired small tech startups within the last year. McDonald’s just bought Dynamic Yield, an Israeli-based, AI-powered personalization tech company. Last month, Honda acquired a major stake in Ubitricity, a German-based maker of electric vehicle charging infrastructure. And last year, Nike bought a US-based data analytics company, Zodiac. This phenomenon is now commonplace under the name of “innovation scouting” or “corporate venture capital (VC).” Whether you’re looking for top digital talent, new technology, adjacent business models, or potential disruptors, the global startup ecosystem is overflowing and large corporations are on the hunt. But how do you know when a startup is the right one for your business objective or that your information sources are unbiased? Listen to our podcast to learn how to increase your likelihood of success with startup scouting.
McDonald’s Bought An AI Company — Surely It’s A Platform Play. What’s Yours?
As noted above, McDonald’s spent $300 million to buy Dynamic Yield, an AI company. The strategy surely includes amping up its customer relevance and targeting capability, but it had to be more than that. $300 million is too much to spend for customer analytics and personalization. The company could have opened 40-plus stores for the same sum. Our take? McDonald’s has realized that it can make more profit by platform-enabling its core competencies and reselling those platform services to other quick service restaurants (QSRs) — payments, loyalty, ordering, marketing, operations, supply chain optimization. No, we don’t know this with certainty. But given the company’s investments in the experience layer, it makes sense that it’s playing a longer game than just food. Going after adjacent markets with things that differentiate you is the second-most-useful thing you can do to be a platform business. Read this report and see Figure 7 to find out the first-most-useful platform play.
Apple Throws Down The Gauntlet With Its Services Announcement, And The Battle Is Privacy
No matter your category, all CMOs and CIOs would be wise to note Apple’s recent announcement of expanded services. By virtue of being in 1.4 billion pockets (including Oprah’s!), the tech behemoth is now a formidable competitor to TV, magazines, and credit cards. But the bigger story, and the one that affects all industries, is Apple’s positioning of these services. Each service description hammers home Apple’s commitment to privacy and security, from not allowing advertisers to track you on Apple News to not selling data from Apple Card. Apple is differentiating not just from exploitative big tech but from any brand that fails in its stewardship of consumer data. Like its 1984 TV ad, Apple again is playing the role of champion of the people. This time, instead of teaching consumers that they deserve to control their technology, Apple will teach them they deserve privacy, as well. Will consumers care? Well, once upon a time they loved their Blackberries, and Apple convinced them otherwise. Soon consumers will evaluate every company (including yours) on its privacy stance. Best start looking at your brand’s now.
Microsoft Azure Is Quickly Becoming The Automotive Industry’s Cloud Platform
The world’s leading automotive partnership — Renault-Nissan-Mitsubishi — this week announced the release of its Alliance Intelligent Cloud platform, running on Azure, that enables connected services in their vehicles sold in nearly 200 markets, including Europe, Asia, and the US. This service will be leveraging Azure’s global metro locations, AI, and IoT technologies to securely capture and analyze vehicle sensor data and deliver services including seamless internet access, infotainment, and more. This is the third automotive alliance to leverage Azure, starting with Volkswagen in the fall of 2018 and LG Motors in January. While each car maker is looking to differentiate its customer’s value, by leveraging the same cloud platform, they will be able to share anonymized sensor data with ecosystem members, local governments, and each other, which will greatly empower future automotive insights, safety, and more.
Finding The Next Wave Of Growth
Growth is a company’s top priority. A relentless focus on improving customer experience, investing in ad and marketing technology, in-housing key agency capabilities, and slashing agency fees has been the go-to strategy in marketing to deliver top-line growth and lifetime customer value. Now that playbook is showing signs of reaching the end of its runway, so CMOs and marketers should start to think about where new growth will come from. An emphasis on creative has brought success to the leading agencies in Forrester’s most recent media agency Wave™. CMOs should also begin to place renewed emphasis on their creative agencies to bring the same creative distinction and differentiation to experiences that they have in campaigns. And CIOs would be smart to stay ahead of this trend, as technology will be a key factor in the ability to differentiate. See our early thoughts on tech-driven innovation, and join us in Chicago for our Digital Transformation & Innovation 2019 Forum in May to learn more.