Use debate to achieve consensus in your strategy

I am an advocate for simple and collaborative methods for defining strategy for a team, department or company. Many strategy frameworks are too complex and while they may seem democratic (by embracing voting, for example), they usually lead to the middling harmony of sticking to the status quo. Instead, your collaborative process should encourage rigorous debate to overcome the mediocrity of consensus.

Any strategic planning process should aim to:

  1. Establish a thorough common understanding of the desired outcomes.
  2. Identify, acknowledge and debate perceived obstacles.
  3. Prioritise a small number of high-leverage opportunities to tackle.

Converging on desired outcomes

While high-level goals may be relatively clear (e.g., Our goal is to become the most loved Help Desk application for Retailers), individuals often aren't on the same page regarding what the ideal end-state actually looks like (e.g., are we targeting all retailers or retailers of a specific size? Online only or in-store?). For this reason, I think it's critical to start any planning session by defining a very specific view of the ideal end-state of the project/product/team/organisation.

To do this, I recommend a silent brainstorm. Essentially, each member of the team will independently describe their view of the ideal end-state. After this, they'll share their view and the team will discuss and debate the various descriptions in an attempt to converge on a common understanding of what we're trying to achieve.

Let's assume a company with industry-leading support wants to take better advantage of this by making their high-quality support an explicit selling point of the software. A description of the end state might be:

  • Customers are happy and love us.
  • Customers are happy to give us a testimonial or participate in a case study.
  • NPS of over 80.
  • First-response times are under four hours.

Each of these points can be debated and refined based on the diverse descriptions brought to the table by the team. In the example above, some may disagree with the importance of first-response times, instead believing that a quality response that actually solves the problem is better than a quick but relatively superficial response. By making explicit these differences of opinion regarding what the ideal state looks like, you can use debate to converge on a unified view.

Acknowledge perceived obstacles

When goals are set by management or even by a simple vote, it is common for individual contributors who are responsible for working towards these goals to have unspoken skepticism towards the achievability of these goals. Often, this skepticism is well-founded and based on obstacles that should be explored and tackled before undergoing the broader initiative. Alternatively, this skepticism can be based on perceived obstacles that are not valid and debating them can lead to stronger team confidence. Either way, acknowledging and discussing any perceived obstacles is usually very valuable.

If you have already got a description of your desired end state, this can be easy to do. Simply ask your team to identify some obstacles for achieving each aspect if the desired end state and discuss these obstacles. Try to converge on a set of legitimate obstacles that the team will need to consider along the way.

Prioritise a small number of key opportunities

Each aspect of your ideal state and obstacles will likely translate into one or more opportunities. For example, if one aspect of your nirvana is to improve customer response times, ask your team what they think they need to do to get there. Additionally, review each obstacle and try to find opportunities to eliminate these obstacles.

Again, the goal here is to achieve consensus through debate rather than a simple vote. Each opportunity should be scrutinised by the team and eventually prioritised with the goal to define an explicit, common understanding of what is the most important work to tackle first. These opportunities should be loosely defined initiatives that can later be further explored by the team.

by Brandon Sheppard

On the short-sightedness of the privacy apathists

Many people say they don't care about what data Big Tech is collecting on them. "I've got nothing to hide" is a common explanation for this. But, just because you're comfortable with the ways your being tracked today doesn't mean you will be in the future, when more data points are available for aggregation.

Soon, many of us could be wearing an Augmented Reality headset from Apple, Google or others. There has been a lot of speculation around these devices over the years, but I haven't seen anyone talk about the user privacy implications.

Apple's rumoured AR glasses sound very similar to Google Glass. Essentially, a pair of glasses with cameras, sensors and screens. They can see what you can see, they can track your eyes and they can show you what you want to see, over the top of what you're looking at. These will likely be peripheral to your smart phone, with most processing and networking taking place on your phone.

In a world where you're using smart glasses, a phone and a smart watch from a single vendor, they'll have access to:

  • Biometrics like heart rate, blood oxygen and blood pressure.
  • Mobility data such as your location, walking speed and stability.
  • What you're looking at (thanks to cameras on your AR glasses and object recognition).
  • Your browsing and messaging history.

And a lot more. What is interesting is the kind of things companies will be able to infer from the combination of biometric data and the awareness of where you are and what you've been looking at. For example, they could infer:

  • Fears.
  • Taste in food.
  • What kind of people you're attracted to.
  • What kind of people you dislike.
  • Specific people who you like and dislike.

This will be extremely valuable information to have in a targeted advertising context. If consumers and regulators allow company's to collect and use this data, they will. And this is only one example of how the breadth of data collection is likely expand with new technologies.

Given the inevitable expansion of data points, I think consumers should take this seriously today and choose privacy-first products today, even if they aren't too concerned about what Google or Facebook know about them today.

by Brandon Sheppard

Big Tech: Choosing the right problems to solve

Big Tech companies have the tendency to swarm the same problems. iOS versus Android; Google Workspace versus Office versus iWork; Apple Music versus Spotify versus YouTube Music versus Prime Music; Netflix versus Apple TV + versus YouTube versus Prime Video; Instagram versus YouTube. On one hand, Big Tech going head-to-head in the same categories can lead to better consumer outcomes as competition drives innovation. On the other hand, Big Tech does tend to employ the exact same strategy when attacking upstarts.

I talk a lot about regulation. But, let's put this aside for a minute. Let's talk about what Big Tech should do. Not just for shareholders (though their needs should obviously be a priority), but for the broader technology ecosystem.

Some problems require a tonne of resources to solve. Some don't.

Though it may be an inconvenient truth to those positioned stubbornly against the mere existence of Big Tech, some problems are so big and complex that only extremely well-funded organisations can tackle them with any credibility. Moonshot projects, like advanced robotics, alternate worlds, self-driving cars, solving ageing, satellite internet, interplanetary colonisation and next-generation silicon, require billions of dollars of investment that may never pay off. There are very few organisations, outside of governments, able to make that kind of investment.

On the other hand, there are major problems faced by society that are seemingly being ignored by our richest companies. Additionally, they do seem to be spending a lot of time on things that other, much smaller companies could solve.

Sometimes, Big Tech will enter and revolutionise a stagnant product category (i.e., iPad revolutionised tablet computing; AWS revolutionised cloud computing). Other times, they blatantly enter existing categories where they can add very little additional value and flex their muscles to try and squeeze out truly innovative upstarts. Recently, Facebook did the latter by launching Facebook Bulletin.

Substack launched at an opportune time — mainstream media is reorganising itself massively and many individual writers are wondering why they should work and be compensated any differently to other content creators. Substack brought journalists and writers the modern content creator business model, allowing them to self-publish to their 1,000 true fans and make a lot more money along the way. Substack makes this business model extremely accessible to all writers and allows them to own their relationship with their customers.

While I welcome competition in this category, Facebook Bulletin is a heavy-handed attempt to squash an innovative startup tackling an interesting problem, previously neglected by Big Tech, by bringing their massive audience to a narrow group of A-list written-word influencers. Later, they'll use these success stories to position themselves as the best option for Substack's existing and future customers.

While playing chicken with regulators, product launches like this may not be good for Big Tech shareholders.

by Brandon Sheppard

Banning Big Tech acquisitions could be a disaster for innovation in the US

Last week, House lawmakers announced their bipartisan legislative agenda to regulate Big Tech, led by Antitrust Subcommittee Chairman David N. Cicilline. This agenda consists of five bipartisan bills tackling Big Tech from multiple angles. While some proposals seem fair (i.e., updating filing fees for mergers for the first time in two decades), others, as is often the case with tech regulation, will likely come with unintended consequences.

One such proposal that could, in my opinion, be disastrous for innovation, is the Platform Competition and Opportunity Act of 2021, which effectively bans Big Tech from making acquisitions.

More specifically, all acquisitions by qualified companies are banned, unless the acquirer can demonstrate:

  • The parties don't have any competing products or services and don't have the likely potential to compete in the future.
  • The acquisition would not improve or help to maintain the acquirers market position for any existing products or services.
  • The acquisition does not improve or help to maintain the acquirers competitiveness for user attention.
  • The acquisition does not grant the acquirer access to new data that would improve or help to maintain the acquirers market position for any existing products or services.

This exemption criteria is so broad it effectively bans all acquisitions from large tech companies. Which, I think would lead to terrible outcomes for the whole technology industry in the US, given that the potentiality of a Big Tech exit (i.e., selling your company to one of the big industry players) is a major motivator for founders and investors to take risky bets on novel ideas. Taking this critical option for return on investment off the table would have a significant impact venture capital and innovation as a whole. The flywheel of each generation of tech success stories (and their alumni) funding the next generation has been a major reason for the success of Silicon Valley over other markets around the world.

Should acquisitions be further regulated at all?

All of this is not to say that technology acquisitions do not need reform. In fact, I think this is one of the most important areas for further regulation when it comes to Big Tech. It's very likely that there would be a lot more competition in social media, for example, if Facebook was not able to acquire WhatsApp and Instagram. But, there's a big difference between a Big Tech player like Facebook absorbing all of their direct competitors, and them acquiring an innovator like Oculus to legitimise the VR space and reward their founders and investors. I believe a bill with a narrower criteria could give Congress their desired outcomes without causing unintended harm to the wider technology industry.

Other proposals

As I mentioned, the House's agenda consists of five bipartisan bills, and these proposed limitations on acquisitions are only a part of the over all plan. Below is a summary of all five, from Cicilline's press release:

“A Stronger Online Economy: Opportunity, Innovation, Choice” consists of five bipartisan bills drafted by lawmakers on the Antitrust Subcommittee, which last year completed a 16-month investigation into the state of competition in the digital marketplace and the unregulated power wielded by Amazon, Apple, Facebook, and Google.

  • The “American Innovation and Choice Online Act” to prohibit discriminatory conduct by dominant platforms, including a ban on self-preferencing and picking winners and losers online. The bill is sponsored by Chairman Cicilline and co-sponsored by U.S. Rep. Lance Gooden (TX-05).
  • The “Platform Competition and Opportunity Act” prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms. The bill is sponsored by U.S. Rep. Hakeem Jeffries (NY-08) and co-sponsored by Ranking Member Buck.
  • The “Ending Platform Monopolies Act” eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition. The bill is sponsored by U.S. Rep. Pramila Jayapal (WA-07) and co-sponsored by U.S. Rep. Lance Gooden (TX-05).
  • The “Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act” promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements. This bill is sponsored by U.S. Rep. Mary Gay Scanlon (PA-05) and co-sponsored by U.S. Rep. Burgess Owens (UT-04).
  • The “Merger Filing Fee Modernization Act” updates filing fees for mergers for the first time in two decades to ensure that Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. This bill is sponsored by U.S. Rep. Joe Neguse (CO-02) and co-sponsored by U.S. Rep. Victoria Spartz (IN-05).
by Brandon Sheppard

Unbundling ecommerce

Over the past decade, many of the big software suppliers in ecommerce have been moving towards an "all-in-one" strategy, with seemingly everyone trying to become the one-stop-shop for retailers (i.e., inventory management systems adding order management capability, order management systems adding inventory management capability, marketing apps adding storefront functionality). The result has been the emergence of broad platforms that have a lot of features, but don't do anything great (jack of all trades, master of none; wide but not deep).

In the meantime, some solution providers have been a lot more focused and built out narrow, but best-in-class solutions for very specific problems like shipping integration, analytics, marketplace integration and more. While these products are very narrow in their feature set, they go much deeper in their problem space than the all-in-one platforms and have a capability lead that cannot be caught up to.

Historically, ecommerce has looked like this:

  • Small retailers would use a simple ecommerce platform (e.g., Shopify or Bigcommerce) with a selection of simple add-ons for each area of the value chain (i.e., an app for shipping labels, an app for analytics).
  • Big retailers would use all-in-one platforms and/or ERPs.

But, this is quickly changing. By focusing on a narrow set of problems, those simple add-ons used by the smaller retailers have become extremely full-featured. Nowadays, more and more large merchants are using a smorgasbord of smaller apps, integrated together, to build a custom solution. This allows them to use the very best app for each area of their business. Ironically, this is being enabled by the platforms—large merchants are adopting platforms like Shopify and Bigcommerce not for their feature set, but for their ecosystem of integrations. These platforms are becoming commerce operating systems on which best-in-class third-party solutions are built.

The technology stack of small and large merchants is converging around these commerce operating systems that allow merchants of all sizes to piece together custom technology stacks using point solutions from their ecosystems.

Headless commerce

Headless commerce is the logical extreme of this decoupling: where even the storefront, checkout and payments are fully decoupled from the ecommerce platform and potentially even decoupled from each other. For example, some Shopify merchants are using headless commerce storefronts like Shogun in lieu of the Shopify checkout, but still relying on Shopify to connect together their order management, shipping and inventory systems. Shopify's storefront API facilitates this. Stripe recently launched Payment Links, which enables merchants to sell products directly through Stripe Checkout without any integration effort. For many merchants with simple business models, this removes the need for a storefront entirely—they can easily add ecommerce functionality to an otherwise static site.

Where will this lead

I predict this unbundling will continue, with platforms like Shopify and Bigcommerce doubling down on their place as operating systems for online retail. This is a challenging proposition for them, as it hands a lot of power over to their partners in the ecosystem, something that Shopify in particular has struggled with. But, the risk associated with this can be mitigated by focusing on the problems that they can uniquely solve given their massive amount of capital, like logistics.

Additionally, I think the pendulum will continue to swing in both directions. The degree to which the commerce stack is unbundling creates unnecessary complexity which I think will lead to a degree of consolidation amongst the point solutions (e.g., the benefits of having inventory and order management housed in the same platform, given how heavily they both rely on accurate and realtime stock data, probably outweigh the benefits of being able to mix-and-match your IMS and OMS). To quote Marc Andreessen “there are only two ways to make money in business: One is to bundle; the other is unbundle.”

Lastly, and in spite of Stripe currently powering Shopify Payments, I believe a showdown between Shopify and Stripe is inevitable, with Shopify now extending Shop Pay beyond on-platform payments and Stripe owning more of the customer journey (i.e., Payment Links, Checkout, support for alternative payments and their investment in Fast). Though, with Shopify seemingly more focused on growth than profitability (a wise tactic, in my opinion, given how big the retail market is), they'll likely retain Stripe as their provider for the foreseeable future. With the utility of Shopify becoming thinner as more functionality is handled by the ecosystem, it'll be natural for Stripe to try to take their place as the operating system for commerce.

by Brandon Sheppard

Google's moat in search

Google has been a focal point in the ongoing Big Tech anti-trust conversation, having achieved what many describe a monopoly in general search. Their defence? The "competition is one click away".

Google Search may be dominant due to a combination of the following hypotheses:

  • Product quality: consumers may simply love Google Search because it is far more capable than the competition. If it exists, this quality moat could be the result of:
    • Patents: The patents owned by Google may be vital for search, making it difficult for competitors to compete technologically.
    • Economies of scale: Google's scale may uniquely position it to invest in the level of R&D required to build a great search engine, given it is already the market leader and has extraordinary monetisation thanks to their ad business. This type of scale also enables Big Tech companies to aggressively acquire emerging competitors.
    • Execution advantage: Google's Way of Working and monopoly on great talent in search could result in a major competitive advantage when it comes to execution.
  • Brand recognition: Google Search has been dominant for so long that it's the primary option that comes to mind for users.
  • Commercial advantages: Google is known to have agreements with platform owners, such as Apple, that lock it in as the default search engine. Upcoming search engines do not have the capital to compete on a partnerships level.
  • Regulatory advantages: many markets are starting to aggressively regulate privacy. These regulations create a higher barrier to entry for new entrants into the search and especially ads business as compliance can be incredibly expensive and risky.

My take:

For regulators to respond to Google's monopoly on general search, they must understand why Google has an unfair competitive advantage (if they do at all). Otherwise, further regulation could lead to unexpected consequences. For example, by focusing on privacy-related regulation, governments may actually improve Google's competitive advantage. Restricting platforms from setting default search engines based on payment or quid-pro-quo arrangements could, however, go a long way towards improving competition. Apple, for example, given their stance on privacy, would be unlikely to promote Google as the primary choice for search if they were not being paid to do so. Given the dominance of iOS, this change alone could be enough to introduce more healthy competition into the search ecosystem.

Therefore:

  • It's important to consider which of the above advantages are fair advantages versus unfair advantages.
  • Regulators should reconsider their approach to regulating user privacy. While I am an advocate for strong user privacy, current legislation mostly raises the barrier to entry for challengers, therefore cementing the dominance of Big Tech, who have the means and risk tolerance to deal with the red tape.
  • Consider how defaults should be chosen on platforms, especially in industries dominated by a single player.
  • What should be done in situations where patents are cementing monopolies in place?
by Brandon Sheppard

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