If you’re read my rants for long enough, you know I’m fond of programmatic advertising. I’ve called it the most important artifact in human history, replacing the Macintosh as the most significant tool ever created.
So yes, I think programmatic advertising is a big deal. As I wrote in the aforementioned post:
“I believe the very same technologies we’ve built to serve real time, data-driven advertising will soon be re-purposed across nearly every segment of our society. Programmatic adtech is the heir to the database of intentions – it’s that database turned real time and distributed far outside of search. And that’s a very, very big deal. (I just wish I had a cooler name for it than “adtech.”)”
Kevin Johnson, CEO of Starbucks, in a wide ranging conversation on the role of an iconic retail brand in the age of Amazon
The Starbucks brand is ubiquitous — especially for anyone who’s visited a major city around the world. But what’s less well known about the iconic company is its long term commitment to, in its CEO’s words, “redefine what it means to be a public company.” To kick off the second annual Shift Forum, we invited Kevin Johnson, CEO of Starbucks, to join us in conversation about the challenges and opportunities driving a company that, even in an age of Amazon, opens one new store somewhere in the world every four hours. Below is the video interview, in full, and a transcript, edited for clarity.
John Battelle: Please join me in welcoming Kevin Johnson. He’s got his Starbucks cup. You are on brand, brother. [laughter]
Donorschoose.org, Patagonia, Salesforce, and Brandless take NewCo Honors
We’ve just announced award winners for NewCo Honors from the stage at our NewCo Shift Forum conference at The St. Regis Hotel in San Francisco. It was an exciting moment for all the winners! Nominees from three categories (all listed here) represent the “company acting like a citizen” spirit central to our hypothesis: business must lead in this era of unprecedented change in our society. NewCo Honors winners took the ethos of doing well by doing good up a significant notch in the past year.
Antitrust fights in the tech industry have always been problematic. Software is a “non-rival” good — additional copies cost nothing to produce, and one person possessing it doesn’t exclude another — so monopolies don’t feel like such a big problem, and the industry changes so quickly that monopolies tend to be fleeting. The last big antitrust battle in tech, the 1990s-era case against Microsoft, created a lot of sound and fury but mostly succeeded in distracting, rather than dismantling, its target.
Many companies enter the fray for possession of the coveted default seller position on Amazon pages — the seller you end up choosing when you click the big orange “buy” button — but only one can win. Since an estimated 85 to 90 percent of the sales for a given product page go to the winner, it’s a consequential choice. In Buzzfeed, Leticia Miranda lays out how this struggle has evolved, and what criteria Amazon uses to resolve it.
The answers are to some extent opaque: Amazon won’t detail its formula for fear it will get gamed, but says companies can win by “keeping prices low, updating their inventory, and offering multiple shipping methods and fast, reliable service.” Also, it helps if they are Amazon Marketplace veterans and if they ship from Amazon warehouses.
If you fear Amazon is about to swallow up the entire retail industry in its hungry online maw, this morning’s news that the company is buying Whole Foods will not reassure you. Amazon intends to pay $13+ billion to buy the high-end organic and luxury supermarket chain that customers love/hatingly refer to as “Whole Paycheck” thanks to its high prices (Bloomberg).
John Mackey, the Whole Foods CEO, would remain in charge of the business. In Texas Monthly profile published this week, Mackey vowed to stick to Whole Foods’ “conscious capitalism” mission despite pressure from equity investors to boost profits or sell the company.
While you were getting on with your life, the world of crypto-tokens and currencies has been evolving at an astonishing clip. Bitcoin broke the ice and introduced the world to the concept, but new mutations are happening fast, many built on the Ethereum platform. Consider:
Startups and new-technology ventures are using “initial coin offerings” to raise capital, auctioning off cryptographically secured tokens (Joon Ian Wong in Quartz). Proponents see this mechanism, which has already been used to raise $150 million this year, as a method for bypassing traditional venture funding and routing around the “take investment, scale up, cash out” mode of technology finance that dominates today. If a new venture succeeds, its token will appreciate in value, giving early adopters a nice payoff. Of course, there’s huge risk for investors, too — and the more value these new currencies have, the harder people will work to break their still immature underlying technologies. Also looming in the wings: regulators.
As venture capitalist Chris Dixon points out, the larger implication of the rise of tokens is that they provide a method to finance the creation and support of open technologies. Traditional financial models demand that innovators close off their work. Tokens allow entrepreneurs to release a protocol or network technology, and to profit as it gets widely adopted, without hoarding the intellectual property. Dixon sees the token movement as “spiritual heir” to open projects like Linux and Wikipedia. Tokens, Dixon writes, are “a breakthrough in the design and development of open networks, combining the societal benefits of open protocols with the financial and architectural benefits of proprietary networks.”
Alexander Ruppert offers a deeper dive on how tokens can decentralize industries as they move up the value chain from network protocols to end-user applications, in realms like law and gov tech, logistics, energy, and payments.
Kik, the chat app, announced that it’s launching its own crypto-currency called Kin (Sonya Mann inInc), which will function similarly to Kik’s existing “Kik points” rewards system. Kin also represents a bid to find a new business model for apps in the social media attention-sphere — one that doesn’t rely on ads.
Crypto-currencies function outside existing financial record-keeping rules and offer some levels of anonymity. That makes life easier for people who want to evade existing laws. The real-world consequences are already on display in the opioid overdose crisis: As The New York Times’ Nathaniel Popper reports, Bitcoin-based online markets are playing a big role in the distribution of the deadly painkiller fentanyl. Every time we introduce a new technology for connection, we amplify both social benefits and costs. It would be nice to think we’d be getting a little better at minimizing the harms, but so far, there’s not much evidence of that.
Apple HQ’s Splendid Isolation Is So 1950s
When Apple’s humongous beached-UFO of a new office opens, the world will gawk at its perfection, from the toroid curves of its glass roof to its 40-foot high dining-hall doors. But all you need to do is look at its site to see something that’s horribly, anachronistically wrong with Apple’s project, writes Adam Rogers in Wired: “Apple’s new HQ is a retrograde, literally inward-looking building with contempt for the city where it lives and cities in general.”
In this post, ELEKS’ head of omnichannel solutions Pavlo Khliust explores how retail is using machine learning, artificial intelligence and other developments to drive sales.
As the shopping experience becomes more and more integrated, retailers tend to adopt an omnichannel sales approach. This means that a customer may seamlessly switch across the multitude of sales channels, shopping online from a desktop or mobile device, by telephone or in a bricks and mortar stores.
Reputation and track record really matter in a crisis. Say you have a ton of credibility and good will with your partners and contractors, and one day it turns out that an “accounting error” had led you to underpay them. You can probably just apologize, pay everyone what you owe, and move on.
Uber faced just this kind of problem this week — but unfortunately for the company, its reserves of good will are exhausted. For years it seems that Uber has been taking its 25 percent cut not only from the base fare but also from the taxes on each ride, which in New York are considerable (The Wall Street Journal) — and as a result it has shortchanged its drivers. Now the company says it’s going to make its drivers whole, and the amounts can add up. Recode posted a receipt for one driver’s $7000 refund, and the Journal says the total cost to Uber is likely to be in the tens of millions of dollars.
Walmart’s Kathleen McLaughlin on the Mission and Vision of a Retail Giant
Walmart is perhaps the most successful and the most reviled company in the history of American retail — and as this fascinating conversation with Kathleen McLaughlin reveals — it also may be the most misunderstood. McLaughlin traces Walmart’s recent conversion to sustainability to Hurricane Katrina, and addresses some of the companies thorniest problems, from workers’ wages to charges of greenwashing. Below is the full video of our conversation at NewCo’s Shift Forum, and the transcript, edited for clarity.