Mike Walsh is a leading futurist and authority on digital trends in emerging markets who advises many of the world’s top corporations on what’s coming next in their industry. Renegade Collective magazine recently caught up with Mike for this excellent Q&A:
How did you get here?
My Chinese mother asked me what I was going to do with my life. She said, “I’m not going to tell you what to do with your life, but you can be a doctor or a lawyer.” I chose lawyer. But then I met a man in the ’90s when the internet was first kicking into gear and he said, “Do you want to spend your life buried in books, or behind the thing that is changing everything?” He offered that I start his digital media research company in Australia. I said, “I know nothing about the internet” and he said no-one else did either. ‘The beauty is that you are so far away that if you screw it up, no one will ever know but at least I can tell the Wall Street analysts that we are everywhere – even Australia!’ That company ended up being Jupiter Research, one of the first companies that studied what consumers were doing online.
What is a global trend to watch?
One of the most interesting challenges right now is how we use data to make better decisions. The line between Big Data and Big Brother, however, is very fine. Consumers want to know who’s spying on them and if someone’s going to compare their shopping purchases with their GPS data. But there is no going back. We’ve been using fake data for a long time. We have invented metrics that make no sense. When the web arrived, we invented measures that mimicked ideas that were familiar to traditional marketing – impressions, clickthrough rates, reach, share of voice – but none of these came close to the true nature of consumer behaviour online.
Give us an example of how this impacts business right now.
Amazon pioneered this way of thinking called ‘closed loop analytics’. It meant they would work backwards from a purchase. They could see from a session cookie, everything a customer did so they could understand what they clicked on, what they read, if they clicked on a tweet or if they watched a YouTube video. If you can understand the sequence of events that led to a purchase, you can find ways to repeat it. That is the future of marketing. In the old days, data meant market research and focus groups but the 21st century marketer doesn’t care about that. They don’t ask people what they think, because they have data on what they did.
For entrepreneurs, what are the global opportunities?
The next big opportunity is improving what I call business plumbing. Think about what the ‘cloud’ has done. Many companies in the future will no longer have an IT department. They will purchase applications, and in the future even services such as HR, accounting, legal or marketing, all from their web browser. The business opportunity here is not local, it is global. You can scale. If you are successful, you should become a billion-dollar business literally overnight because there shouldn’t be any barriers to your growth.
What is a business in the 21st century?
We still think of business as a collection of assets under a roof but a successful business is actually a pattern of behaviours, insights, technologies and talent configured in such a way that it makes money. In some ways our accounting systems and management tools struggle with this new reality as most of them were designed for companies born in the Industrial Revolution. It’s a seductive trap. Entrepreneurs can have an amazing 21st century idea, they’ll think up the next Twitter or they’ll think up an amazing business model, but as soon as they get to a critical size they just build a 19th-century business structure around it.
How do we treat the next generation of entrepreneurs?
Look at anyone born after 2007 – the introduction of the iPhone – they have grown up with a radically different mindset. All of their communications, entertainment and transactions are not just done on a device in the household but through something personal that lived in their pocket or purse. The way they approach everything from learning to interaction, from shopping to working is already a step change from the rest of us.
What about global consumer trends?
I recently collaborated with Paypal on a global study of crossborder shoppers. It uncovered that people are not only buying online, using their phones and tablets, they are doing it from other countries. Australians are spending a fortune on US websites. So are the Chinese. And the biggest destination for the Americans is the UK. This new retail landscape is breaking down the ability for local retailers to arbitrage prices unfairly. The internet has created a fertile playground for brands to tell stories about themselves and to have no boundaries.
What is your crucial advice for entrepreneurs?
1. Build your businesses around data – either how you use it yourself to make smarter decisions, or help others to do the same
2. Embrace the cloud and abandon traditional ideas of technology.
3. Think lightweight. Being global used to mean having offices in different countries. The best way now to be global is to be as lightweight as possible – the less your business model relies on infrastructure, people on the ground, offices and lawyers, the better chance you have of scaling. The secret to being very big is actually to be very small.
Next for you?
My real passion at the moment is working on a new book and trying to get to the bottom of what 21st-century companies look like. It’s a deceptively simple question – how do you design a company for the future? My feeling is that the answer to that lies not just in Silicon Valley, but in emerging markets like Brazil, India and Turkey as well.