This is a summary of Dan Lyons‘ Business of Software 2012 presentation.
Mobile as a Medium
Dan Lyons is the writer behind the Fake Steve Jobs blog, which at one point was supposed to be turned into a TV show. In the process Dan learned that the TV business is completely broken. Lesson learned – writing a blog is way more fun than writing a TV show.
Steve Jobs called mobile the post-PC era, because he got his ass kicked in the PC era.
The global population is 7 billion, and there are 6 billion cell phones.
Mobile is the fourth wave of IT. Bill Gate’s vision was that someday there would be a PC on every desk. Mobiles today are more powerful than PCs at that time. Mobile is the $100 laptop.
Mobile is a new mass medium that’s bigger (and better) than TV. Mobile is:
- Many to many
- Participatory – everyone is a producer and a consumer
A tale of two Internets: PC vs. mobile. Windows PCs accounted for less than 50% of Internet connected devices in 2011. Four years ago Windows PCs accounted for 95% of Internet connected devices. As with TV, hardware leads, content follows.
Apple is today’s RCA. A $112 billion business that didn’t exist eight years ago. There is a growing (and risky) dependence on mobile. Apple knows it’s about controlling the content, not the hardware. iOS revenue accounts for 2/3’s of Apple’s overall revenue.
The mobile wave is just starting, but bear in mind the story of RCA. By the 1980’s RCA was shutdown.
As mobile grows, what’s happening to TV? TV is already killing itself. There is a generational shift – young people are tuning out TV and using YouTube more. YouTube has lots of stupid videos, but the money is real. Memes are extremely short-lived TV shows. Check out Cats with Bread.
75% of YouTube users are mobile. Google has invested $300 million on content; doing an end run around the TV business.
Are companies becoming more like TV shows?
- Attract jerks like TV does.
- Require relatively little capital.
- Don’t last long.
- Different expectations. Not built to last.
Today’s hit shows:
- Facebook: A global performance space. You don’t just watch the show, you ARE the show. (7 hours/user/month)
- Twitter: Another performance space. Over 60% of usage is mobile.
- Pinterest: 10 million users. (7 hours/user/month)
These are still the early, experimental days. There will be numerous flameouts:
- Color app
- Quora – half a flameout
New world: light, fast, fragmented, ephemeral. Audience is in constant motion.
Who gets hurt?
- VCs: VCs are built for companies like Intel. They are not built for this world. More money than ideas is bad news for VC firms.
- Angel funds: Crowdfunding is a better fit for the new kind of company.
- Media: A daisy chain of destruction. Ads online don’t work.
- News and entertainment: Also funded by ads.
Why don’t online ads work?
- Advertising was a creature of the TV age. It was an industry built around 30 second spots.
- Ads are weak on social. Customers fight back with “anti-ads.”
- Mobile makes it even worse because of the tiny screens.
Shift to mobile is hurting Facebook, Google and Pandora (i.e. web-based companies).
But, what if we reinvented advertising? Make it all about context – not just who, but when and where and what they’re doing. However, mobile devices are incredibly personal, so we must be careful not to violate the circle of trust (i.e. don’t be creepy). This has high potential if implemented properly – the ability to reach 7 billion people on the Internet. Two things we need:
- A new kind of storytelling: A new way of crafting stories to the media, and in a language unique to the medium.
- A new business model: Based on something that isn’t advertising, but that accomplishes the same thing (allows you to reach customers).
Dealing with the Press
When you bring in a reporter for a story, have a story to tell. What makes a good story?
- You need a narrative.
- A good company is not the same as a good story (e.g. EMC).
- Drama = conflict.
- WSJ formula – the “hero’s journey.”
- Desire, obstacles, failure, struggle.
- Betrayal, revenge, resurrection. (E.g. Apple’s comeback, Apple vs. Google/Samsung)
Follow Joseph Campbell’s Hero’s Journey when crafting a story. The idea is that every story is about a hero that overcomes obstacles. So, who will be your protagonist? People don’t like to talk about their failures, so if you are willing to expose yourself you have an opportunity.
- Understand what the reporter needs. What gets him a promotion?
- Build a relationship. Don’t “pray and spray.” Think of reporter as you would a sales prospect. Figure out the one to three reporters you want to know, and meet them without expecting anything from them. Maybe something will eventually come of it.
- Know what a reporter covers.
Example of a bad pitch: “I saw the article you wrote on company A and I represent company B.” Once a reporter writes about a topic he is good for a year.
What do print journalists need? Like everyone else, they need to impress their boss.
- Big names to put on the cover to sell copies.
- An illusion of importance.
What about bloggers?
- Traffic, traffic traffic. Compensation is tied to traffic. Much easier to get a lot of traffic with a negative story.
- Most want a different, better job.
- They leverage VCs (Pando, TechCrunch, Business Insider, etc.). Sleazy?
Every once in a while you get to see how corrupt and craven we are. Yes, you can buy off a blog. It usually involves Apple since any Apple story drives a lot of traffic. Apple turns reporters into courtiers. Pogue, Mossberg et al. must get Apple devices first – if not, they’re dead. Since Apple does not tolerate dissent, those that get their hands on Apple devices first will always write positive reviews; fearing that saying something even slightly negative will get them banned from being the first to receive the next batch of new Apple products. Think of the recent huge failure of Apple Maps, and the strange lack of its mention from those that reviewed the iPhone 5 before its official release. Strange isn’t it?
- Arrington: “Give me the scoop or I will ignore/destroy you.” Advice: Ignore him first.
- Mr. X (Dan didn’t want to say his name.): Top VC dishes in the background, and gets press in return. He is available as a source. He has a full-time PR person.
- Marc Benioff: Avidly courts journalists with dinners and gifts.
It’s all about building relationships and being useful.
However, be careful what you wish for.
- There is no such thing as puff pieces.
- An article is a transaction. What do you hope to get from it? What is the price? And are you willing to pay it?
- Write the story in-house before you pitch it to a reporter.
Next AMA: Alex Osterwalder, Author, Business Model Generation, 24th Jan 17.00 GMT.
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