Venture capitalist, entrepreneur, author, and all-around business rock star Guy Kawasaki has succeeded the old fashioned way: by working hard and having uncompromising standards.
He’s well known for what he’s done and how he’s done it. He changed the way businesses practice marketing through product evangelism. At the same time, Guy has been an advocate for the importance of exercising values and behaving with grace and dignity – an ethos that has influenced business leaders such as Gary Vaynerchuk. In his new book Wise Guy: Lessons from a Life, Guy Kawasaki shares some of the lessons he’s learned throughout his life. Wise Guy is not a biography in the linear sense. Combining a self-effacing sense of humor with clear-headed analysis, he tells stories about people who have taught him something and about incidents that have shaped his life (and continue to).
You quickly learn that although he has accomplished a great deal in his life, his childhood was pretty ordinary. He did not overcome poverty to cure cancer by age 15. In fact, as a college student, he was interested in dating girls and someday owning a nice car. He tried out for football and quit. He studied law and quit. In other words, he grew up a lot like many of us do – which makes him more human and his story more relatable.
In the business world, though, he experienced epic adventures. For instance, at Apple he famously worked for Steve Jobs. And Wise Guycontains some fascinating stories that will make you grateful that you never worked for Steve Jobs. His career as an Apple product evangelist (he popularized evangelism as a marketing approach) and later as a successful entrepreneur and venture capitalist makes for some engaging stories and lessons learned. And there are many in Wise Guy. But for me, the most memorable and telling details in the book are not necessarily the most glamorous. (And I’ve read the book twice – an early draft for which I was privileged to provide feedback, and then the published version.) For instance:
He once read the entire Chicago Manual of Style cover to cover. And let me tell you – The Chicago Manual of Style isa massive book with some excruciating details about the finer points of the English language. Why did Guy read such a book? Because a demanding high school English teacher instilled in him a respect for minding the details of the English language. If you’ve ever worked with Guy (as I have), you know he continues to apply high standards today and does not hold back with constructive criticism. Lesson learned: there are no short cuts to doing the job right. You have to understand every nuance of a skill to master it.
He left a fortune on the table by leaving Apple— and then left a bigger fortune on the table by turning down a chance to interview for the CEO job at Yahoo! Guy freely admits he left Apple too early, long before it became one of the world’s most valuable brands – a decision that cost him tens of millions of dollars. And taking a pass on the Yahoo! opportunity probably cost him billions. In both cases, he did not grasp how big either company would become, something that still bothers him. But he does not regret why he chose something else over Apple and Yahoo! With Apple, he left to pursue a career as an entrepreneur. “[I]f I had stayed at Apple,” he writes, “my life would have been less interesting. I wouldn’t have started companies, become a venture capitalist, advised dozens of entrepreneurs, spoken at hundreds of events all over the world, and written fifteen books.” With Yahoo!, he chose time with his family over the demands of being CEO. “What price can you put on being around when your kids are growing up?” he asks. Lesson learned: stay true to yourself and your values.
He learned ice hockey at age 48. And then he learned how to surf at age 62. These are not the easiest sports to learn at any age. In fact, Guy says that surfing is one of the most difficult challenges he’s ever tackled. There’s an obvious lesson learned here about continuing to push yourself no matter where you are in life – highly relevant as our population ages. In addition, his determination to learn is a tribute to hard work and the value of learning for the sake of learning. “The acquisition of skill is a process, not an event, and the process itself can be the reward,” he writes. “My path to surfing competency was the same as my path for speaking, writing, and evangelizing: grit, repetition, and hard work, not ‘natural talent.’”
Steve Case once honored a handshake agreement even though he didn’t have to. In the early days of AOL, Steve Case asked Guy to do some consulting for $2,000 monthly plus stock options. Guy agreed, and the arrangement lasted a few months. Many years later, he saw Steve Case, who asked him if AOL had ever given him his stock options. “I told him I hadn’t done much work, so the company wasn’t paying me, and I had never gotten the stock,” he writes. “I told him to forget about it.’” But Case insisted that he get options for two thousand shares. The options mushroomed into a lucrative payday. Lesson learned: be honorable in all that you do.
The Steve Case story is the most important. Guy Kawasaki writes and speaks often of acting with values, and treating people as you would have them treat you. In fact, he wrote an entire book about the business value of enchanting behavior, Enchantment. I think his legacy is that being a decent person in business is not only honorable but sensible – which is more important than being a marketing guru, an engaging author, or an exciting speaker. Wise Guy is Guy Kawasaki’s lasting statement. I recommend you buy Wise Guy — and learn from it.
Jeff Bezos is a market maker. As I wrote in Fast Company in 2013, market makers do more than sell products. They influence beliefs and behaviors. Jeff Bezos is changing how people live and businesses operate through voice and cloud computing.
Amazon is ushering in a voice-first world along with Google. With astonishing speed, Amazon has unleashed products such as AI-powered smart speakers that rely on voice commands to manage our homes, search for things, purchase goods and services, and navigate our cars.
In the home: per Amazon, the number of devices with Alexa built-in more than doubled in 2018. More than 150 products have Alexa built in, ranging from headphones to smart home devices. Consumers can choose from 28,000+ Alexa-compatible smart home devices from more than 4,500 brands.
On the go: more than one million customers requested an invitation for Echo Auto, Amazon’s new Echo designed for vehicles, shortly after Amazon announced its availability. Several automotive partners announced support for Alexa at CES 2019. For example, Telenav, a provider of connected car and location-based services, announced a relationship with Amazon that makes it possible for drivers to use the Telenav Alexa-powered navigation system to do the same kinds of functional tasks that they can do with Google Maps.
At work: in 2017, Amazon launched Alexa for Business to begin a voice-first transformation inside enterprises. Amazon wants employees of businesses to rely on Alexa to schedule meetings, manage their personal calendars, and handle a host of other tasks. Brooks Brothers and Conde Nast are among the companies that use Alexa for Business to manage meetings according to Amazon. In addition, businesses are creating Alexa skills to manage several functions. To wit: financial services firm TIAA recently announced a new Alexa skill that helps its customers get financial information and obtain customer service. And now that Amazon has made it easy for anyone to create Alexa skills, I predict that so many more businesses are going to adopt Alexa that the creation of an Alexa skill won’t be news.
Jeff Bezos is so enamored with voice that he mentioned Alexa six times in Amazon’s fourth-quarter earnings announcement. In fact, Alexa is about all he talked about in a prepared statement:
Alexa was very busy during her holiday season. Echo Dot was the best-selling item across all products on Amazon globally, and customers purchased millions more devices from the Echo family compared to last year . . . The number of research scientists working on Alexa has more than doubled in the past year, and the results of the team’s hard work are clear. In 2018, we improved Alexa’s ability to understand requests and answer questions by more than 20% through advances in machine learning, we added billions of facts making Alexa more knowledgeable than ever, developers doubled the number of Alexa skills to over 80,000, and customers spoke to Alexa tens of billions more times in 2018 compared to 2017. We’re energized by and grateful for the response, and you can count on us to keep working hard to bring even more invention to customers.
Typically in earnings announcements, CEOs don’t dive into the details of how their products are evolving. But not so with Jeff Bezos. His words demonstrate his belief in the power of voice.
Bezos’s comments about making Alexa more accurate might make him sound a bit geeky, but accuracy matters. Amazon needs to make Alexa more effective at recognizing human speech to make us comfortable using the voice interface to buy things — which is what Jeff Bezos wants us to do while we are on Amazon. Right now, for the most part, people use their smart speakers to check the weather and listen to music. Jeff Bezos’s vision for voice is all about commerce, not checking sports scores. The question is not whether, but when, Amazon will realize that vision.
Going hand in hand with voice computing is Bezos’s ambition for businesses and people to manage their lives on a virtual network known as the cloud. Amazon founded its cloud computing business, Amazon Web Services (AWS), in 2006. Today AWS provides the backbone of Amazon’s entire voice ecosystem. When you use Alexa in your home, on the go, or at work, you use AWS.
Bezos envisioned the rise of cloud computing long before voice came along, though, and the cloud powers more than Amazon’s own voice ecosystem. In his 2007 letter to shareholders, he wrote of people using their Kindle e-books to read and record margin notes “on the server-side in the ‘cloud,’ where they can’t be lost.” Eight years later, in his 2015 letter to shareholders, Bezos spoke of the cloud in much more grandiose terms:
Whether you are a startup founded yesterday or a business that has been around for 140 years, the cloud is providing all of us with unbelievable opportunities to reinvent our businesses, add new customer experiences, redeploy capital to fuel growth, increase security, and do all of this so much faster than before.
And he was not exaggerating. By 2015, AWS was providing the backbone for businesses to adapt to the cloud. Today, AWS powers so many companies that it made $25.7 billion in 2018. For example, if you use Airbnb to book a room or Slack to send a message, you’re relying on a business that uses AWS. And Netflix famously relies on AWS to keep its 24/7 content stream going.
Where would cloud computing be today without Amazon Web Services?
Vision Costs Money
But building voice and cloud-based products and services costs money. In 2018, Amazon increased its marketing and advertising costs considerably. As noted in CNBC, Amazon reported a $13.8 billion marketing expense for 2018, up 37 percent from the prior year. Nearly 100 million viewers of Super Bowl LIII saw some of that spend in the form of a number of 30-second spots promoting Alexa. Those spots cost $5 million each.
And here is why Amazon’s advertising services, bundled under Amazon Advertising, are so valuable. Amazon Advertising gives Amazon a way to recoup its costs though an increasingly lucrative revenue stream. Through Amazon Advertising, businesses on Amazon promote their products through various forms of display advertising and sponsored product displays that appear in a consumers’ search results on Amazon, similar to how advertising on Google works.
Amazon’s ambitions for advertising go beyond serving up ads on Amazon itself. As the New York Times reported, Amazon also targets ads to people across the digital world by tapping into the data it has amassed about consumers’ purchases made on Amazon itself. Since Amazon knows exactly what you’ve searched for and purchased on the site, Amazon can advertise for other brands with pinpoint accuracy, as these examples from the New York Times article illustrate:
When a chain of physical therapy centers wanted new patients, it aimed online ads at people near its offices who had bought knee braces recently on Amazon.
When a financial services provider wanted to promote its retirement advisory business, it directed ads to people in their 40s and 50s who had recently ordered a personal finance book from Amazon.
And when a major credit card company wanted new customers, it targeted people who used cards from other banks on the retail site.
The advertisers found those people by using Amazon’s advertising services, which leverage what the company knows better than anyone: consumers’ online buying habits
Just the Cheese, a brand run by Specialty Cheese Company in Reeseville, Wis., makes crunchy dried cheese bars that have taken off as a low-carb snack. By using algorithms to analyze how Just the Cheese’s search ads performed on Amazon’s site, the ad agency Quartile Digital noticed that people who searched for keto snacks and cauliflower pizza crust, both low-carb diet trends, also bought a lot of cheese bars. So Quartile ran display ads across the web targeting Amazon customers who had bought those two specific product categories. Over three months, Amazon showed the ads on websites more than six million times, which resulted in almost 22,000 clicks and more than 4,000 orders.
That 20 percent conversion rate — a sale to one out of five people who clicked on the ads — was “amazing,” Mr. Knijnik said. “That is the kind of powerful granularity for building the target audiences that just Amazon can give you.”
And, just like that, Amazon is upending the digital ad industry while creating a mini-industry of companies such as Quartile Digital that offer services related to Amazon’s advertising products. And herein lies an undeniable reality: Amazon giveth, and Amazon taketh. With advertising, Amazon takes business away from established players like Facebook and Google while spurring the launch of new companies that capitalize on Amazon.
“Amazon Is Not Too Big to Fail”
Advertising has helped Jeff Bezos pull off a feat that is extremely hard for a publicly traded firm to do: invest for the long haul while rewarding shareholders in the short term. He also does not take Amazon’s success for granted. As he told employees recently, “Amazon is not too big to fail. In fact, I predict one day Amazon will fail. Amazon will go bankrupt. If you look at large companies, their lifespans tend to be 30-plus years, not a hundred-plus years.”
Whether Jeff Bezos is correct about Amazon’s future remains to be seen. In the meantime, he has helped unleash technologies whose impact is incalculable.
The old music institutions are losing their grip. The Super Bowl LIII halftime show February 3 was a bust because of a musicians’ boycott. And now musicians who matter are blowing off the Grammy Awards. Childish Gambino, Drake, Ariana Grande, and Kendrick Lamar have turned down the chance to perform at the 61st Grammy Awards on February 10. What’s going on?
The Super Bowl halftime show boycott was a matter of principle. Musicians such as Cardi B, Jay Z, and Rihanna boycotted the Super Bowl halftime show as a show of solidarity with embattled NFL quarterback Colin Kaepernick. The Grammys are about relevance.
The Grammys, run by the Recording Academy, call themselves the music industry’s highest honor. But the Grammys have demonstrated an astounding lack of relevance year after year. This is the institution that once awarded Best Rock & Roll Recording to “Winchester Cathedral” over the Beatles’ “Eleanor Rigby” and the Beach Boys’ “Good Vibrations,” among other notable gaffes. In recent years, the Grammys have been taken to task for failing to recognize progressive music from women and people of color in its nominations and choice of performers during the telecast. In 2018, Recording Academy President Neil Portnow came under fire for making a condescending remark about women while at the same time the Recording Academy snubbed Lorde as a performer (even though she was up for Album of the Year), and Alessia Cara was the only solo female Grammy winner.
Who can blame the musicians for skipping the Grammys? Artists build their fan bases on their own digital platforms, not at the Grammys. On digital, they can reach a more relevant audience that listens their music, attends their concerts, and buys their merchandise. Consider Ariana Grande. She dropped her new album, thank u, next, two days before the Grammys. You’d think a televised appearance before millions of people would be the perfect opportunity to promote her new music. But instead she just gave the Grammys a very public middle finger.
Ariana Grande doesn’t need the additional exposure. Her 294 million combined followers on Facebook, Instagram, Spotify, Twitter, and YouTube alone do a powerful job promoting thank u, next, and to a more relevant audience (compared to the 19.8 million who watched the Grammys on TV in 2018). She’s already dropped two singles from the album, one of which was her first-ever Number One on the Billboard Hot 100. She was the top-streamed female artist in 2018. Ticket sales for her Sweetener tour, launching in March, appear to be strong based on her adding shows. She’s headlining Coachella in April.
What would the Grammys do for Ariana Grande except associate her name with a stodgy, out-of-touch brand?
It will be interesting to see if more musicians avoid the institutions of yore such as the Academy Awards. But I wouldn’t count on any of the old-guard television events adapting. They’re using a playbook created last century. Meanwhile, the artists are creating a new game.
The Super Bowl halftime show used to feature marching bands and harmless American cheese such as Up with People. Then the show became a high-profile global stage for big-time musicians such as Beyoncé and Bruno Mars. This year, it’s a lightning rod for controversy and an embarrassment for the NFL.
For the Super Bowl LIII halftime show occurring February 3 in Atlanta, the NFL has struggled to find performers to land a gig so prominent that stars are usually willing to perform essentially for free. That’s because a number of musicians have staged an unofficial boycott of the halftime show to express their solidarity with embattled NFL quarterback Colin Kaepernick.
The Colin Kaepernick Factor
In 2016, Kaepernick triggered a national culture war and a public battle with NFL owners when he took a knee during pre-game national anthems to protest oppression of people of color. He became a free agent before the 2017 season, but no team signed him. In the wake of his not being signed, he filed a collusion suit against the NFL that is expected to move forward in 2019.
Over the past two years, Kaepernick has become transformed from an NFL star into a social activist. His public profile received a major boost when a Nike ad in September 2018 positioned him as a leader who transcends sports. And now the NFL Super Bowl halftime show has done the same although certainly not by design.
The Rihanna Factor
Normally, artists jump at the chance to perform at the halftime show, and it’s easy to see why: since 2010, Super Bowl viewership has ranged from 103 million to 114 million, giving halftime show performers a gigantic stage to promote their music and elevate their personal brands. But when the NFL approached Rihanna to appear at Super Bowl LIII, she reportedly turned down the gig to support Kaepernick. And when someone with Rihanna’s clout acts, others follow. Musicians joining the unofficial boycott include, reportedly, Cardi B, Mary J. Blige, Usher, Lauryn Hill, and Nicki Minaj. The NFL finally confirmed Maroon 5 on January 13, and then Big Boi and Travis Scott agreed to join them. By contrast, the NFL confirmed Justin Timberlake, last year’s headliner, five months before the Super Bowl.
In the days leading up to Super Bowl LIII, Big Boi, Maroon 5 and Travis Scott have faced criticism on social media and from other artists. For example, Roger Waters has challenged Maroon 5 to take a knee onstage as Colin Kaepernick did before the national anthem. T.I. has called Travis Scott selfish for agreeing to perform. Black Twitter has spoken out as well. The show has now become a racially charged PR fiasco for the NFL, an especially embarrassing situation given Atlanta’s prominence as a burgeoning hip-hop center and its reputation as the black mecca of the United States.
Two Big Questions
In the aftermath of the media storm surrounding the controversy, two questions remain:
Will all the drama hurt Big Boi, Maroon 5, and Travis Scott? Yes and no. They’ve lost credibility with other musicians for crossing the unofficial boycott line. But fans are another story. An artist has to try really hard to alienate their fans to the point where they stop buying their music. If anything, the media exposure will help Maroon 5 and Travis Scott sell more tickets for their tours, which are in progress. Big Boi just released two new songs in advance of the Super Bowl. He’s banking on the controversy to help him.
Will the NFL be affected? Not on Super Bowl Sunday. Fans are not going to boycott the game because of the halftime show. But it says something that musicians were willing to skip a show that should have been a no-brainer decision to do. The NFL can be wounded (especially when Rihanna wields the sword). The unofficial boycott has called attention to Colin Kaepernick and the national anthem controversy just when it seemed as though the issue had become dormant. The NFL would prefer that the Super Bowl buzz focus on football, not on racial injustice. But the artists have stolen the narrative. They have collective power that they could exercise in other ways in the future, such as turning down Super Bowl ad spots.
Meanwhile, the halftime show mess has probably helped the man at the center of the boycott, Colin Kaepernick, by keeping his name in circulation as his grievance against the NFL goes to trial. The graphic below shows the volume of searches for Colin Kaepernick in the United States within the past month. Searches for his name spiked on January 16 when a story broke about Travis Scott reportedly meeting with Kaepernick before Scott joined the halftime show lineup. Interest is climbing again on the eve of the Super Bowl.
I doubt that Colin Kaepernick’s protests have had any impact on NFL viewership. NFL fans, like music fans, are very good at compartmentalizing. Viewership ratings have dipped and then increased over the past few years, and the quality of the play on the field has made the difference. But Colin Kaepernick never said he was protesting the NFL when he took a knee. He was, and is, calling attention to oppression of people of color in the United States. He has succeeded. Musicians have helped him keep the conversation about racial injustice in the public eye. And this conversation is bigger than the Super Bowl.
Tidying up with Marie Kondo is more than a Netflix reality television series about an organizing consultant who helps people de-clutter their homes. It’s a cultural phenomenon. Since Netflix aired eight episodes January 1, Tidying up with Marie Kondo has sparked a discussion about Japanese culture, the role of books in our lives, our societal pursuit of happiness, and materialism, among other topics. The show also demonstrates a major advantage Netflix wields against Amazon Video and Hulu: cultural relevance.
Tidying up with Marie Kondo is one of many examples of how Netflix seeps into our everyday culture by creating relevant content and even shaping our behavior. Netflix is not the only streaming service to create content that taps into the cultural zeitgeist – Hulu does so in spades with The Handmaid’s Tale. But Netflix creates cultural relevance more consistently and in more ways.
Prophet Brand Relevance Index
According to the Prophet Brand Relevance Index, Netflix is the fourth-most relevant brand in the United States, behind Pinterest, Amazon, and Apple and ahead of companies such as Google and Nike. Amazon ranks ahead of Netflix not because of its streaming service but because of its ecommerce leadership – an important distinction. Amazon Video creates original content as a means to an end – to gain more Prime members for Amazon. Netflix lives and dies by the strength of its content. And the difference shows.
According to Prophet, “[Netflix’s] relevance comes from knowing what we want to watch, which means old favorites and $12 billion worth of exciting new projects, including contracts with executive producer Shonda Rhimes, director Spike Lee and former President and First Lady, Barack and Michelle Obama.”
Creating Cultural Relevance
Prophet focused on consumer relevance. Netflix’s cultural relevance goes beyond knowing what we want to watch although content is one important element. Cultural relevance means influencing how we talk, how we behave, how we work, and, yes, what we watch. Here are some examples:
Netflix and Chill
Netflix is part of our everyday vernacular. You don’t hear anyone refer to “Hulu and Chill” or “Amazon Video and Chill” as a euphemism for having sex. And let’s not even consider a world in which “Disney+ and Chill” catches on once Disney launches its own streaming service, Disney+. “Netflix and Chill” has become so common we don’t necessarily equate the phrase with its original meaning. The article “Netflix and Chill . . . and Share it on Instagram Stories” by Geoff Desreumaux certainly does not refer to hooking up. And I’m pretty sure investor Dan Victor wasn’t thinking about getting some afternoon delight when he wrote the Seeking Alpha financial analysis of Netflix, “Buy Netflix and Chill – It’s Going Back to $400.”
“Netflix and chill” is not the only example of Netflix-related phrases that have worked their way into our vocabulary. For instance, “Netflix cheating” is the act of watching episodes of a Netflix series ahead of your partner. Netflexting occurs when two people watch a Netflix show in different locations and text each other at the same time. Netflix block happens when you scroll through your Netflix queue and cannot settle on something to watch. Here are more phrases that demonstrate Netflix achieving cultural relevance through our vocabulary.
The cultural relevance with content occurs two ways:
Creating content from another medium that has already attracted an audience (Tidying up with Marie Kondo was already a well-known book, and Dear White People was a notable movie first).
Releasing content that becomes so popular that its success transcends its original medium, which is what happened with Stranger Things.
In fact, most of Netflix’s original content does not enter the cultural mainstream the way Stranger Things has done. But Netflix hits the mark more than anyone else.
Netflix is actually changing our behavior. When Netflix began dropping all episodes of its new TV shows simultaneously, we responded by changing how we watch TV. Thanks to Netflix, we consume show after show for hours at a time. We now watch what we want when we want it, instead of a network making us wait for a weekly broadcast. The phrase “binge-watch” became the Collins English Dictionary word of the year in 2015. Four years later, we’re still talking about binge watching. Mashable devotes a section of its news content to binge watching. And you can get paid to binge watch. Binge watching is bigger than ever.
Highly Aligned, and Loosely Coupled
Netflix is also culturally relevant to the workplace. Netflix is well known among management consultants and the HR community for the way the company operates. Netflix is known for its “highly aligned, loosely coupled” approach of setting a clear strategy but empowering work teams to act autonomously. We now have PhD-level management consultants extolling the “7 Aspects of Netflix’s Company Culture That You’ll Want to Copy.” Its 2009 Culture Deck is called “the BIG DADDY of culture decks.” Its technology blog is also popular among product developers and engineers throughout the workplace. Amazon is also closely followed for its management practices – but here again, I’m focusing on the streaming business, where Amazon Video doesn’t create the kind of conversation for its business practices that Netflix does.
But cultural relevance is fleeting. You can’t manufacture cultural relevance on demand although you can improve your odds by adapting already-popular content that has been tested in another medium, as with Tidying up with Marie Kondo and Dear White People. So far, Netflix sets the pace. But it will be interesting to see what happens when Disney launches Disney+. Disney wrote the book on cultural relevance and is well positioned to challenge Netflix with its Disney, Marvel, Pixar, and Star Wars brands (Star Wars created the template for phenomenon such as Stranger Things). The key will be how well Disney draws upon these popular names to create new content, which it plans to do with shows such as original episodes coming from Marvel. Disney+ will be an extremely costly venture. But Disney has very deep pockets, while Netflix is under constant pressure from investors for its spending. Netflix CEO Reed Hastings has his work cut out for him. But I think he’s up for the challenge. And he’s operating with a big head start and an ability to do things that no one else sees coming, such as introducing binge watching.
The next frontier for Netflix will be to create cultural relevance in international markets such as India, which is proving to be an enormously difficult task. In India, Netflix also has its hands full with local competitors such as Hotstar. Because of its cash burn rate, Netflix is under more pressure to ramp up faster in markets such as India. The race is on – and the next several months will prove to be exciting.
Now I know we’re really living a voice-first world.
Pringles has released three teasers for its Super Bowl LIII spot. The star of the ad will be a — wait for it — voice assistant. At a time when advertisers are loading up on celebrities such as Chance the Rapper to hustle products, Pringles is relying on a faceless, Alexa-like voice assistant to sell us on the emotional power of Pringles flavors.
The ad, which will play during the second quarter of the Super Bowl February 3, will sell the viewer on the appeal of “flavor stacking,” or combining Pringles flavors in interesting and tasty stacks. The teasers depict an “emotional smart device” (in the words of a Pringles press release) that laments not being able to taste Pringles. In one teaser, the device sighs, “I cannot taste Pringles. I can only order them.”
The ad will also supported by “a fully integrated marketing campaign including PR, digital, social media, e-commerce and product sampling.”
Whether a depressed voice assistant will inspire Super Bowl watchers to start stacking Buffalo Ranch, Wavy Applewood Smoked Cheddar, or Screamin’ Dill Pickle Pringles remains to be seen. But the fact that a well-known consumer packaged goods company would shell out $5 million (the approximate cost of a 30-second spot for Super Bowl LIII) for an ad that makes a joke involving a voice assistant shows just how rapidly the voice-first economy is evolving.
When I started renting movies from Netflix years ago, I never dreamed the company that sent me DVDs in the mail and then started streaming films would someday create movies. I certainly never considered Netflix capable of an Academy Award Best Picture nominee. And yet here Netflix is, snagging a Best Picture Academy Award nomination for Roma– among 10 nominations the film has achieved. This is what visionaries do. They create a future that you did not see coming. Consider these other examples:
When you were buying books from Amazon back in the day, did you foresee the company running a multi-billion dollar cloud computing business, getting into pharmaceuticals, and owning a grocery chain?
When you were watching ads for Apple desktop computers and cute clamshell laptops, did you see Apple becoming a personal wellness company?
When Google made it easier to search for things online, did you think the company might someday sell virtual reality gear?
There is a price to pay for being a visionary. Netflix has:
Created a cottage industry of doubters, mostly investors who cannot abide its cash burn.
At the same time, we all know what a visionary such as Netflix is capable of. Netflix does not disrupt industries. It creates them. Netflix has created a new model for hosting content and creating it. For being a movie distributor and TV network. For manufacturing popular culture. And now Netflix is making history. Not only is Roma a Best Picture nominee, it also boasts the the first-ever Best Actress nomination for an Indigenous Mexican woman, Yalitza Aparicio.
And yet you may not be able to see Roma in theaters. That’s because often, visionaries play by their own rules, and those rules do not always go over well with the established order, as we’ve seen with the Cannes Film Festival. AMC Theatres and Regal Cinemas will refrain from showing Roma in theaters because Netflix did not adhere to the traditional 90-day theatrical release window. Instead, Netflix released Roma on its own platform less than a month after Roma appeared (briefly) in theaters.
At the Golden Globe Awards in January, Roma won three awards, including Foreign Language Film, Director of a Motion Picture, and Screenplay of a Motion Picture. At the awards, Roma Director Alfonso Cuarón was asked to comment on a perception that Netflix is threatening independent cinema.
He replied, “My question to you is, how many theaters did you think that a Mexican film in black and white, in Spanish and Mixteco, that is a drama without stars — how big did you think it would be as a conventional theatrical release? I just hope the discussion between Netflix and platforms in general should be over. I think those guys, platforms and theatrical, should go together . . . They both together can elevate cinema, and more important, they can create a diversity in cinema.”
No foreign language film has ever won an Academy Award for Best Picture. Netflix now has a chance to make history at the 91stAcademy Awards February 24. Netflix’s 139 million paying subscribers have already won.
No one who follows the music industry accuses artists of selling out anymore when they cozy up to corporations – not at a time when an Apple or H&M ad can do more to get a song noticed than Soundcloud ever will. In recent years, a musical elite has turned the notion of corporate sponsorships on its head by becoming corporations themselves. Rihanna’s evolution as a personal style brand is a case in point.
In the 19 years since she signed her first recording agreement, with Def Jam Records, Rihanna has become one of the most streamed musicians of all time. Her songs have hit Number One on the Billboard charts 14 times. She is a winner of multiple awards. And she’s done something else as equally impressive, perhaps more so: rewritten the rules for the fashion and beauty industries.
Popular music and fashion are inextricably linked. Rihanna has always understood the power of fashion to shape perception, just as one of her influences, Madonna, has. As Rihanna once told Love Pop, “I think that Madonna was a great inspiration for me, especially on my earlier work. If I had to examine her evolution through time, I think she reinvented her clothing style and music with success every single time.”
Rihanna learned her lesson well. As she racked up song hits and music awards, she gained a reputation for her inventive and daring dress, achieved through collaborations with designers such as Mel Ottenberg. In time, she would add the title of official fashion icon to her list of accolades when the Council of Fashion Designers of America named her Fashion Icon of the Year for 2014.
But she wanted more than accolades for her attire. She wanted to shape popular taste in fashion and beauty. In 2011, she capitalized on her music stardom and growing reputation as a style maven to launch two significant business ventures:
Her first fashion line, Rihanna Designs, a partnership with Emporio Armani Underwear and Armani Jeans.
Reb’l Fleur and Rihanna Designs were just the beginning. She went on to create fashion and beauty businesses by creating partnerships with different companies seemingly at will. In 2013, she formed a clothing collection for the British brand River Island. She created even more high-profile ventures, such as successful clothing designs for Puma (where she was named creative director).
Now she has reportedly collaborated with LVMH Moët Hennessy Louis Vuitton SE to form a luxury fashion house under her name. According to Women’s Wear Daily, the fashion house “will span ready-to-wear, leather goods and accessories, and could be released in tandem with her ninth album, expected out sometime later [in 2019] . . .”
The collaboration will elevate Rihanna to another level in fashion, but it will also make the LVMH brand more relevant to younger, social media savvy customers. As The Wall Street Journal noted,
The collaboration . . . shows how radically the power of social media has changed high-end fashion. Brands that once counted on acclaim from an elite group of critics and retail buyers now rely on social platforms to market their designs, particularly to younger consumers. That requires fashion houses to court influencers—people with large online followings—or team up with them to generate buzz.
Just a year after its launch, Fenty Beauty by Rihanna is a digital innovator and champion for diversity, using its platforms — 6.3 million Instagram followers, 490,000 YouTube subscribers and 372,000 Twitter followers — to showcase makeup on women of all complexions and sizes. The brand engages with its followers regularly, reposting user-generated content and collaborating with avid fans on videos and posts.
She gets much from these relationships – hundreds of millions of dollars and a means to remain relevant independent of the strictures of music. She’s not toured since 2016 when she released her latest album with an innovative distribution deal through Samsung. She can release music and tour whenever she wants because she has freed herself from the music industry. In fact, Rihanna has turned the tables on the music industry: her new album in 2019 will support her fashion interests, not the other way around.
She has also challenged how the fashion and beauty industries operate through her use of social media and refusal to play by anyone’s rules. As The New York Times’s Vanessa Friedman observed,
Even though Rihanna became the face of Dior’s Secret Garden scent in 2015 (making her its first black brand ambassador), she never aligned herself with a single brand; they served her purposes, rather than the other way around.
The fact that she signed a deal with Puma to be its creative director and start her own ready-to-wear brand in 2014, when the sportswear giant was still owned by Kering, an LVMH rival, and for a time worked with both groups simultaneously (an unprecedented arrangement) reflects the shift in status. Suddenly a celebrity could have the upper hand.
Her ventures have given her a chance to change an entire industry by making beauty brands pay attention to the purchasing power of people of color. Her Fenty line has been credited with making other personal beauty lines cater to people of color by releasing more foundation shades, an industry shift known as the Fenty Effect.
So it’s really no wonder that Fenty’s darker shades sold out practically upon their debut: by providing a richer dark-skin collection, Fenty captured an audience that has been consistently ignored by most of the industry. That said, it wasn’t just Fenty’s products or Rihanna’s celebrity that lead to its success. The brand’s marketing campaign also prominently featured people of color, a move that has now been adopted by mainstream brands as they hop on the 40 shade wagon.
CoverFX, for example, actually launched an inclusivity campaign on social media with the hashtag “#NudeIsNotBeige” a week after Fenty’s debut, and in May, when CoverGirl released its 40 shade Matte Made foundation line—its “most inclusive foundation ever!”—it did so with Issa Rae and Ayesha Curry as its Cover Girls. Then there’s Revlon’s new “Flesh” collection, which is literally branded as an “inclusivity-driven” beauty line, and Too Faced—another last minute addition to the party—whose founder, Jerrod Blandino, announced with an Instagram photo featuring black and brown models that he would be teaming up with black Youtube makeup artist Jackie Aina to “develop an even bigger shade range” of the foundations.
Singh-Kurtz also asked, “But is Dior—and the rest of the industry for that matter—really celebrating diversity, or are they just pandering to people of color to compete in an increasingly competitive landscape?”
But Rihanna is beyond accusations of pandering. That’s because she possesses brand authenticity – in other words, her products reflect her actions and statements consistently. Reportedly she turned down the coveted halftime show for Super Bowl LIII, occurring February 3, to support embattled quarterback Colin Kaepernick and because of the NFL’s controversial National Anthem policy that sparked Kaepernick to take a knee during the National Anthem. She has also spoken out against racism in the music industry and generally exhibited inclusivity in her actions and charitable foundations.
Rihanna is not the only musician who has become a business mogul. As I wrote in The New Music Moguls, Jay Z operates ventures ranging from entertainment to venture capital. (His company Roc Nation manages Rihanna.) Dr. Dre is worth hundreds of millions of dollars because of his interest in Beats Electronics, sold to Apple in 2014. Many other artists have branched into industries such as fashion and liquor, as I discussed in The New Music Moguls. Few musicians will ever get to this level of success, but the music moguls have defined a new end game. And Rihanna is changing the game.
Gillette sure knows how to create a controversy. The company’s “We Believe” short video, which challenges men to hold each other accountable for toxic behavior, has quickly become a polarizing example of the emotional firestorm a business can ignite when it dips its toes into the volatile world of cause marketing.
What interests me from a marketing standpoint is what will happen once the controversy over the video subsides. So much attention has focused on the “We Believe” short that I think many have overlooked the fact that “We Believe” is much more than a video. “We Believe” is a broader redefinition of Gillette’s core brand ethos, from “The Best a Man Can Get” to “The Best That Men Can Be.” In a press release, Gillette announced the company is committed to a long-term effort to uphold the values of respect, accountability, and role modeling. Per Gillette:
RESPECT — Demonstrating respect and fostering inclusivity for all, including genders, races, religions and orientations.
ACCOUNTABILITY — Ending phrases like “Boys Will Be Boys” and eliminating the justification of bad behavior.
ROLE MODELING — Inspiring men to help create a new standard for boys to admire. We want boys to see and admire traits like honesty, integrity, hard work, empathy and respect — words that people across the U.S. use when describing what a great man looks like.
Gillette said it will hold itself accountable to these values by:
Donating $1 million annually to causes designed to help men achieve their best.
Ensuring that its public content reflects respect, accountability, and role modeling.
Keeping a conversation about male behavior in the public eye through social media.
Gillette has put a stake in the ground. If Gillette truly lives those values in its actions and in its message, Gillette will succeed. In fact, Gillette may gain customers who identify with those values, especially with millennials, who are more interested than baby boomers are in brands whose values align with their own. In addition, Gillette may very well be happy to cut loose of the kind of customer who boycotts a company for challenging men to hold each other accountable for their behavior.
What happens next all comes down to Gillette demonstrating its commitment to its brand values. You don’t simply bake a new set of values in the oven and serve them to the public. It takes time to build emotional trust and belief through actions and reinforcement of your message. Gillette has just begun a long-term journey toward being a better company, not just a famous brand that makes a lot of money selling razors. Let’s see how this journey plays out.
In the aftermath of CES, though, one question looms: What exactly do Amazon and Google get out of winning this battle?
Both Amazon and Google used CES to state the case for their leadership of voice (Apple, Microsoft, and Samsung, while certainly players, are not the leaders in voice although Apple is a strong challenger). Google announced that Google Assistant is on one billion devices, up from 500 million in May 2018 (a figure boosted by the sale of Android phones that contain Google Assistant by default). Amazon disclosed that it has sold more than 100 million devices that rely on its Alexa virtual assistant. In addition, the number of people who use Alexa every day — and who own more than one Amazon Echo smart speaker — doubled in 2018.
Meanwhile, during CES, more telling numbers were disclosed. According to research conducted by Edison Research and NPR, 53 million adults in the United States (or two out of 10 Americans) own at least one voice-activated smart speaker. The number of smart speakers in homes has increased 78 percent year over year. And on January 8, Accenture reported that half of online consumers globally use digital voice assistants, up from 42 percent one year ago.
These figures don’t mean that people are actually using their voices to buy things from businesses. In fact, most people use voice assistants to perform everyday tasks such as listening to music and getting weather information. But the usage data is important nevertheless. It shows that even if we’re not exactly living in a voice-first world, we’re getting there – and doing so quickly considering that the Amazon Echo didn’t exist until 2014, and Google Home just two years later. In addition, by 2016, 20 percent of all Google mobile queries were voice searches.
The rise of voice also helps explains why so many companies continue to launch products fueled by voice at CES, and 2019 was no exception.
Gadgets and Software Integrations
CES unleashed a dizzying array of products powered by voice, usually through Google Assistant or Amazon Alexa. These products typically focus on making it easier for people to use their voices to live in their homes and navigate their cars. For instance:
In the Home
Lenovo announced an alarm clock powered by Google Assistant. KitchenAid and GE rolled out smart displays that rely on Google Assistant to help you get recipes, watch videos, and do anything else to keep you occupied and entertained in the kitchen. Currant’s new smart wall outlet, which can be controlled by Alexa and Google Assistant, monitors energy usage and suggests which products to automatically turn off to conserve power. The Dalkin smart thermostat works with Alexa and Google Assistant to control the climate in your home.
You can learn more about major product announcements here and here. (For those of you keeping score, in November 2018, Recode reported that Google Assistant works with 10,000 smart home devices versus 20,000 for Alexa.) But the most intriguing products, such as the Currant smart wall outlet, use artificial intelligence to not only act on your voice commands but also give you information and manage your home without your intervention.
On the Go
Both Amazon and Google showed that Alexa and Google Assistant are powering our lives on the go, too. Google formally integrated Google Maps with Google Assistant, which is important because of Google Maps’s popularity for mobile wayfinding. As Mashable noted, “Google envisions users asking it for directions home, or to nearby restaurants and saved locations. You can ask the assistant to search for places along your route (like gas stations) or add a stop — all things that used to require some button pushing.”
Amazon announced a stronger push into voice-powered automobiles. CES was barely under way when Amazon and Telenav, a provider of connected car and location-based services, announced a relationship that makes it possible for drivers to use the Telenav Alexa-powered navigation system to do the same kinds of functional tasks that they can do with Google Maps. And then Amazon formally launched Amazon Echo smart speaker for the car. Google announced a similar product through a relationship with Anker’s Roav automotive accessory, which is essentially a Google Home for the car.
These announcements continued a battle for on-the-go voice experiences that has been going on for some with Google, Apple, and Amazon all rapidly launching products and software designed to be the de facto infotainment systems for different car manufacturers. The irony is that major auto makers have been announcing dips in sales for 2018. But overall, automotive has been a strong industry over the past several years. And now cars are getting smarter.
What Do They Want?
No wonder so many “Google versus Amazon” stories have proliferated throughout January. But the more important question than who “won” CES is what do Amazon and Google get out of all these voice-powered products? The answer is simple:
The company that owns the ecosystem monetizes the voice-first world.
Owning the ecosystem yields practical benefits, such as revenue gained from the sale of smart speakers. Amazon commands a strong leadership of smart speakers, but Google is catching up. As of 2019, Amazon is capturing 63.3 percent of the smart speaker market, with Google Home accounting for 31 percent. The numbers matter for another reason besides revenue: smart speakers connect people with other smart devices, thus acting as a gateway for product integrations. As Accenture noted in its survey of global smart assistant users, “[n]inety-three percent of consumers globally expect their home device purchases, such as smart TVs or computers, to be based on ease of integration with their standalone smart speaker.”
For Google, being the backbone of voice protects the company’s online advertising business, which accounts for more than 70 percent of Google’s revenue. Google needs to keep giving people reasons to keep using products such as the Google search engine, Google Maps, and the Google Chrome web browser. As people stay on Google, Google can continue to deliver audiences to advertisers and learn from audience behavior. As people use voice, Google can keep them on Google by incorporating voice into its products, launching new products such as Google Home, and making Google Assistant part of other companies’ products, which is the alarm clocks, thermostats, and cars using Google Assistant come into play.
As Amazon creates its own advertising business, it, too, needs to show potential advertisers that it can deliver an audience to them – in the home and on the go, whether they use their voices or text to get what they need. In 2018, it was reported that Amazon was in talks with advertising giants such as Procter & Gamble to permit them to advertise on Amazon Echo speakers. Amazon has denied that it’s going to permit advertising through Alexa. But even if Amazon does not offer ads, per se, it can use voice to mine valuable data about its customers that would be useful to its advertisers, such as Google can.
Amazon is already working with businesses to monetize skills. Through premium content known as in-skill products that reside within Alexa skills, businesses can sell premium content such as in-game currency. For example, Stoked Skill offers free games such as Escape the Room and Escape the Airplane. The games are set up as Alexa skills. Players use Alexa skills to find clues that will help them escape spaces such as jell cells and cars. Customers can pay for optional “hint” packs (in in-skill product) that make it easier for them to escape.
I could see Amazon also offering branded content and products to Prime customers who use Echo, such as discounts at local restaurants unlocked exclusively through Amazon Echo Auto. Doing so would monetize voice without more intrusive advertising that lack any useful offers.
Finally, Amazon has other plans to monetize voice in the enterprise, such as Alexa for Business to help enterprises use Alexa to improve workforce productivity. As these examples show, companies are using Alexa for Business to book conference rooms, manage the connection status of shared devices, and other workplace tasks. But Amazon has competition in the enterprise most notably from Apple and Microsoft.
What Business Should Do
Brands have a clear mandate: prepare for a voice-first world, and one where Amazon and Google call the shots for now. When consumers start really buying products and services via voice assistants, brands will need to play ball with the companies that control the voice ecosystem. Here is how Recode envisions one way that world will play out:
How it works now: If you ask Amazon’s Alexa or Google Assistant to buy, say, shampoo, they’ll surface what they think you’ll want. Alexa uses several criteria to suggest a purchase option: Your order history, whether a product is eligible for free Prime shipping and whether the product has the “Amazon’s Choice” seal of approval — “highly rated, well-priced products available to ship immediately.”
Google picks products from merchants thatare most relevant to the query. It also considers purchase history and information about user preferences, as well as an item’s availability and proximity.
Both companies say there is no favoring of specific retailers — or their own products.
Brands also can’t pay for visibility — yet. For now, Amazon and Google are trying to build trust among new — few — voice buyers by making their search results as relevant as possible. It doesn’t, however, take much imagination to see a future in which Amazon or Google merchants could pay to have their products suggested by their smart assistants — like sponsored ads that crowd their websites — as a way to generate more ad dollars.
Today, businesses are participating by creating sometimes clever and inventive voice-based brand building experiences, such as HBO’s voice-activated Westworld game, in which people use Alexa to explore the mythical Westworld. Other businesses have created their own branded Alexa skills. With Tide’s Stain Remover skill, you can get stain removal instructions shared with you through Alexa. Campbell’s offers recipes through Campbell’s Kitchen. Presumably, these businesses could offer in-skill products if they wanted to, an example being HBO offering a premium-tier Westworld game for purchase. And businesses are optimizing their content to be found through voice search.
Amazon and Google are not the only companies doing the heavy lifting, but they are leading the way to a voice-first world. Smart companies are going with them.