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DIGIGRAM Newsletter of June 2021

Welcome to the summer DIGIGRAM of 2021. California is well on its way to waving bye-bye to COVID: Over 70% of the population is fully vaccinated and San Francisco is close to being the first major city to achieve herd immunity. (“Moo!”)

California lifted most COVID restrictions on June 15. Members of the San Francisco Boys Chorus celebrate in downtown (Image credit: Jim Wilson/New York Times, June 16, 2021

Silicon Valley is heading back to offices and cubicles after the summer break, and while many things will be the same, some won’t. Some changes and habits enabled by COVID and digital technologies are here to stay. This DIGIGRAM highlights technologies and trends how digital transformation and our behavior influence each other: How the shift to streaming TV is playing out with new alliances and consolidation on the supply side. How we find new ways to conquer new markets. And how we improve our bodies with transhumanism – which is much closer than you may think.

Transhumanism? Yes, of the Cyberdyne Systems Model T-800 a.k.a. Terminator kind. Provocative and intriguing, no doubt. And what could possibly go wrong? What do you think? Read below and write to me with your opinions about this emerging topic.

In this edition of DIGIGRAM:

#1: The shapeshifting of entertainment ecosystems: So many of us have switched to watching TV with a streaming subscription that we forced the industry to reshuffle its assets. AT&T sold WarnerMedia to merge with Discovery, to present “the Food Channel dines with Queen Daenerys.” Amazon beefed up their PRIME TV menu by buying MGM, adding over 4,000 movies and 17,000 TV shows, to create “James Bond spies on the Handmaids.” And Netflix is moving into the physical world by introducing its own merchandise store that sells $45 baseball caps like only Disney could before – the same Disney that launched their own TV subscription service to compete with Netflix in the digital world. Which entertainment ecosystem design will prevail?

#2: Design thinking about geographic expansion: I’ve launched a personal project, the USA Launching Pad. It’s a methodical program to help foreign companies be more successful, faster, in the U.S. We test and iterate quickly in five strategic areas to determine market fit, supported by a team of experienced U.S. company builders. We’re delighted with the results from our first three customers!

#3: The coming of transhumanism: Technology has enhanced human bodies for decades. One example: hearing aids have been implanted since the 1970s. But more recently, technological advances allow for more provocative enhancements. Insert electrodes into the brain to stop it from malfunctioning? Certainly, it’s improving people’s lives. Implant bionic parts into the body to withstand the nine-month space trip to Mars? Sure, it’s only for a select few anyway. Editing human genes to fix a disease? Globally forbidden! But a Chinese scientist did it anyway – because the technology was there and he could. Rena Seiler wrote a paper that explored how much we should do out of all that we could do—and the questions that we should answer before we proceed. I am curious what your opinion is on Transhumanism – write to me.

Happy reading and enjoy the reopening. As always, I love to hear from you and what you think about the topics in this DIGIGRAM edition.

Till soon, Gert


Shapeshifting of entertainment ecosystems:

Content is king! And in TV, the trend clearly shows us moving away from watching traditional channels paid via cable TV and moving towards subscription-based streaming services. Streaming benefitted from COVID with record growth:

Time spent viewing streaming content increased dramatically during COVID: +44% globally and doubling in Europe and tripling in Latin America and Africa. (Image credit: Conviva State of Streaming Q4 2020 Report, 2021)

However, as the competitive battle heats up among the providers, winning new subscribers and preventing existing ones from leaving is becoming harder. As a consequence, providers started looking for more ammunition: attractive content to keep their viewers within their own walled garden longer and to attract new subscribers. A reshuffling of the assets in this industry has begun, and we have a front-row seat to a textbook case of a formerly new industry entering a more mature phase.

WarnerMedia TV and Discovery merged to create a new premium mouthful, “pure-play direct-to-consumer entertainment company.” WarnerMedia was previously owned by AT&T, the U.S. telecom provider who, with this move, turned their entertainment assets into an independent business. This spinoff was a glycemic index-busting sweet deal for AT&T, as it received up to $43 billion dollars, which it can now pour into the 5G battles over in telecom land. The new entertainment company has over 100 well-known brands, world-class production teams, and around $50 billion dollars in revenue: Size matters when you go into a war that will consolidate an industry!

A new home entertainment pure-play giant arises: WarnerMedia and Discovery merge. (Image credit: AT&T press release, May 17, 2021)

Interestingly, only a few days before the announcement by AT&T, its telecom competitor Verizon sold off Yahoo and AOL at a loss, to raise $5 billion dollars,  which it will invest in 5G networks and services.

The lion does not sleep tonight – Amazon buys MGM and with it one of the biggest movie libraries. (Image credit: Gyfcat)

Amazon has also been upping its movie game by buying MGM, the glorious and longtime Hollywood studio Metro-Goldwyn-Mayer. The famous MGM lion roars for a different owner now.

The announcement stated that Amazon was interested in MGM’s filmmaking tradition and movie assets. Translation: Expect remakes and revivals of traditional movies you and your ancestors liked – served exclusively on Amazon PRIME TV! This is a classic “new products for existing channels” to keep up with competitor Netflix.

Oh and Netflix, the champion of streaming TV services?

Streaming has eclipsed regular TV broadcasting but Cable TV still reigns supreme. Netflix is the leader among streaming TV providers (Image credit: The Gauge, Nielsen National TV Panel data plus streaming video ratings, June 18, 2021)

Viewers spent more than twice as much time on Netflix than on their competitors’ programs. It also leads in the number of subscribers with 207 million.

How does Netflix react to the shuffle in the ranks behind it? It seems content to stay the course, turning out great movies, expanding geographically, and adding auxiliary revenue (its latest example: a merchandise store). Netflix must think that its productions have reached such an iconic status that it can monetize them. What’s the next money generator for Netflix? A Bridgerton theme park? Stranger Things gummy Demogorgons?

It remains to be seen how the competition among the streaming providers will shake out. And I’m very curious who or what will try to spoil this merry-go-around.  Which technology will reshuffle the cards again by disrupting the industry? Perhaps one of the telecom companies with mobile devices? Or one of the VR companies with wireless goggles? After all, who needs cabled internet into computers and TVs once wireless 5G is available everywhere? Or who needs a device when content can be beamed straight into your eyes, and even in 3D?


Design Thinking your way into new markets – Introducing The USA Launching Pad:

Ever since I returned to California 5 ½ years ago, companies from abroad have been contacting me for help with the U.S. market. A very flattering and humbling experience – that so many entrepreneurs remember me when seeking help to start their businesses in the States.

The modules of the “USA Launching Pad”, a systematic method to develop a validated go-to-market plan to be more successful, more quickly in the US market. (Image credit: www.launchingpad.us, 2021)

To my surprise, the inquiries didn’t stop even during COVID, which motivated me to think about how modern methods could improve the chances of success of new market entries. If product-market fit has been found in one market, how might the fit with a new market be tested as quickly as possible? How to find out what works and what needs to change—fast? If we had a systematic method to test before the rollout, we could eliminate costly trial-and-error, lower the risk, eliminate basic mistakes, create the best bang for the buck, recruit the best people for the plan, and more.

The result is the “Launching Pad” methodology. It’s a systematic way to test and iterate to find the fit in a new market in five strategic areas: strategy, marketing, sales, product/technology, and back-office/legal setup. Five design sprints are combined with lead generation from Day 1, to directly speak with potential customers and users to validate their profile and pain points. Then, we test the solution and the way it’s delivered against a new market setting. In addition, we plan to offer a fundraising sprint to those companies who have gone through the program.

“Launching Pads” are delivered by a team of very experienced U.S. company builders. Each of us has successfully launched and grown several businesses in the U.S. This is an experience that foreign entrepreneurs often lack, leading to avoidable errors and time lost in figuring out how things work in the States.

Three companies have gone thru our program, and the results are very encouraging. It’s absolutely worth it to find and talk with actual customers and users, instead of imagining what they think or relying on the opinion of a few experts. Get it straight from the horse’s mouth. We organized 70 interview partners for our first customer, of which nine became prospects, and two turned into paying customers – the sales funnel and conversion ratios for the U.S. emerged during the program.

How “Fit for the USA?” are you? A self-assessment tool helps to quickly determine the level of readiness to start business in America. It is available from the USA Launching Pad website. (Image credit: www.launchingpad.us, 2021)

Direct contact with Americans interested in their products. Meeting with potential partners. The methodical creation and validation of a go-to-market plan in the most important areas. The support of an experienced team of U.S. business executives (well, yes, if you exclude me).  Add them all up, and you’ve got a powerful mix that brings success.

We’re receiving very good feedback from entrepreneurs. And investors appreciate our methodical approach of testing before doing and validating before investing into offices, employees, and expenses.

For me personally, the creation of “Launching Pad” has been an exciting experience in pursuit of the question: Can Design Thinking be applied to areas other than the creation of products, for which it was originally meant? “Launching Pad” proves that yes, it can.

You can try out the method with the “Fit for USA”-Assessment on our website. It’s a tool we created as a self-assessment – how fit is your business for the USA? Let me know what you think, I look forward to your feedback and comments!

If you know of companies who are considering the USA, please let them know about this new way of methodically preparing before entering a new market to be faster and reduce the risk of failure.


The coming of transhumanism:

Doctors have used technology to repair or improve human bodies for decades, and this has been uncontroversial. However, soon the technology will be available to be stronger, to better resist illnesses, and to live longer.

Real vs. fiction: Technology has been used to overcome or improve malfunctions of the human body for decades. How far should we go? (Image credit: National Deaf Children’s Society, UK, and “Seven of Nine” character in Star Trek)

This voluntary transhumanism is different – and it will become controversial. Should we do everything that we technically could? Is it right? Will it be only for the rich? Are we playing god? These are questions that we need to start exploring.

Rena Seiler recently tackled the topic in a paper entitled “Transhumanism – the vision of the technological evolution of humans” at the Institute for Digital Business of HWZ University Zurich. You can read the English version here, or her original article in German here.

Rena argues that this technology is being developed no matter what and that we as a society must seize the opportunity of the early stage to discuss the use of transhumanism. Otherwise, there is a risk that the technology will be exploited for selfish personal and strictly commercial reasons, which will exclude many from the benefits they might enjoy. She proposes that there should be a broader discussion of the topic and that this will require a dedicated effort to educate ourselves about the multiple areas touched by the applications. Another way is inclusion in educational programs. The objective should be to reap the most benefits from the ethical, social, and transparent use of transhuman technologies.

Real vs. real: Once a technology exists, what applications of it are acceptable and which ones are not? (Image credit: The Roslin Institute and NPR/Anthony Wallace/AFP/Getty Images)

“It is a very complex topic to comprehend, which is the basis needed to form an opinion in the first place,”  says the author. “The complexity of transhumanism stems from the fact that it touches many areas, is developing in a highly dynamic fashion, and from the fact that you need expertise in the topic to understand it.”

She sees the reason for our current inability to deal with transhumanism in the different levels of information among society at large on the one side and the few who form an affluent technological elite on the other. The complexity of the topic comes from the many areas it touches: Medicine for healing and enhancing performance and potentially prolonging life, politics to regulate and ensure access for everybody, the media, and education because of the new jobs it creates. Among other approaches, Rena proposes the inclusion of transhumanism in technical, ethical, and sociological educational programs.

We’ll have to figure out transhumanism’s implications and determine where we want to set its boundaries. What do you think about this topic? I’d love to hear from you. Write to me at gert.christen@artecos.ch.


Top of the Month

An AI bot helps sailboats fly better!

New Zealand successfully defended the Americas Cup sailing trophy. Also thanks to an AI digital twin of their foiling sailboat (Image credit: Chris McKeen/STUFF, December 2020)

Yes, that’s right. Sailboats at the tip of this sport’s technology fly over the water nowadays. They’re held up by hydrodynamically optimized foils in the water that support the aerodynamically optimized hull in the air.

For the designers, it means they have to optimize for both environments. For the teams, it means the cost to build prototypes is going through the roof. Unless… you succeed in simulating the boat and its interactions with the water and wind, and the sailors’ inputs on sails, rudder, and foils.

The New Zealand team together with McKinsey set out to do exactly this. They created an AI model and were able to train it to the point where it outsailed the sailors on the water. Then, they ran thousands of designs for thousands of races to determine the best one with high accuracy. Team New Zealand went on to win and successfully defend the America’s Cup. Let’s welcome sailing to the age of AI!


Meet me here

My fall 2021 class at UC Berkeley is “Amazoogle – Creating Data-Driven Startups”

I’m excited about applying Amazon’s and Google’s principles of using data to create unfair advantages for new startup ideas. Shomit Ghose developed the class and in this edition, our students will apply Google and Amazon’s recipes to find solutions to support the United Nations’ 17 sustainable development goals.

The class is already fully booked with a waiting list. Let me know if you have a project that you’d like to propose to our students.


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