How the Age of Tweaking Impacts Hotel Operations

One of the better articles I read among the avalanche of tributes and rebukes after Steve Job’s passing was Malcolm Gladwell's "The Tweaker" in the New Yorker (free access). In essence, Gladwell distilled Job’s talent as that of being a master tweaker, who was compelled to make what already existed better, such as the ordinary digital music player which became the superior iPod, or a chunky Microsoft tablet PC, which Jobs tweaked into the sleek iPad.

But what was actually more interesting to me in this article was how Gladwell spelled out the clear distinction between inventor and tweaker. It’s not rocket science, but reading it I realized that we indeed live in the Age of Tweaking, rather than in the Age of Invention.

I took this concept to a recent conference here in Hong Kong, The World Research Summit for Tourism, where I was, sadly, the lone industry speaker among 300 or so academics from all over the world. The gist of my presentation was that in the Age of Tweaking, the underlying technology becomes more important than ever.

The above diagram shows how media platforms and innovation have evolved over the past 120 years or so. What you can see clearly here is that the media landscape has changed more in the past 5 years than it had the 100 years before that. And as we were heading towards the end of the 20^th century, content increasingly started to migrate across different media networks and platforms, including the TV mobile, web or even games platforms. So why is that? It’s because we have moved from the Age of Invention, to the Age of Tweaking. The TV was an invention, but the connected TV is a monumental tweak of the underlying invention.

When you look at how long it took for entertainment devices to gain a market share of 50 million, you’ll get a picture like this:

What’s striking is that from the point the internet went mainstream, the tweaking of communication accelerated and adoption of new applications climbed to unprecedented levels, as witnessed by Facebook and Twitter’s subscriber explosion. It’s clear that the internet created an environment of building blocks that gave new meaning to Product Life Cycle 101: Tweaking, which builds on something that is already familiar, makes adoption much easier than something that is invented from scratch and has to be heavily marketed to build familiarity and adoption.

So in other words: the more you tweak, the quicker the adoption and faster commercial gains.

Looking at some of the recent inventions that did not get off the ground underlines this. Time Magazine a while ago published a list of the worst inventions of all times, which contains some poignant examples of how invention can fail despite a brilliant and complex technology.  The Segway people mover is a classic example. I wonder if it failed because, as a new invention, it was too much of a stretch for people to learn how to use it. Who knows if we might see the technology emerge in another form, sometime in the future, with a bit of creative tweaking. 

Let’s look at what actually happened when the internet entered the mainstream. I’m not talking about being able to Google something or send emails. I am talking about Internet Protocol as a delivery technology. IP has touched all industries and walks of life because of its more adaptive attributes, lower networking, equipment and administration costs, centralized network control and management and better communications capabilities, productivity and flexibility. These advantages are particularly important for a hotel operation that has to handle many different technologies efficiently, including energy, security and communication.

In fact, IP is probably the king of tweakable technologies, because of its flexibility and capability which is why it will remain the key enabler of technology delivery for the foreseeable future. The important part here is that the underlying technology platform comes first, applications second. If you have a powerful enough technology platform that can be tweaked to accommodate future needs, you will be able to accommodate the next wave of tweaked applications as they enter the mainstream. Don’t forget, predictions put the number of connected devices in the market in the coming years in the trillions and China alone will have nearly 5 billion connected devices by 2020.

So as time to market for technology innovation continues to contract dramatically, hotels more than ever have to be flexible. But innovation is set to be facilitated by tweaking rather than inventing, so it’s important to focus on the underlying technology that will support tweaked technologies. With IP, we have a very robust technology now, and hoteliers should focus on the knowledge and technology available today to lay the foundations for the future. A robust technology will enable adding new applications in the future without major investment and with short time frames.

Facebook and the $100 Billion Dollar Question

There seemed to be a collective breath holding going earlier this week when it was reported that Facebook is apparently planning an IPO in the first half of next year to the tune of $10 billion, which would value the company a cool $100 billion. If successful, it would also be the largest tech IPO in history, but merely the fourth largest ever; still not bad for a company that wasn’t even around 8 years ago. 

Some of the reports couldn’t resist the “Dr Evil” reference, that line in the first Austin Powers movie where the numeracy challenged Dr Evil proposes to hold the world ransom for $100 billion. However, compared with the amounts that we are bombarded with on a regular basis these days, a mere $100 billion seems like a piggy bank of small change. Greece is threatening to buckle under a 340 billion Euro debt, the US government bailing out the financial community to the tune of $700 billion in 2008, and of course now facing a $15 trillion deficit as at November 17, 2011 (take that Dr Evil!). These types of numbers seem to be rolling off everyone’s tongue as if discussing the latest petrol prices. While many lay people may still gasp in awe at the likely Facebook valuation, my guess is that very few are able to take it beyond its abstract meaning of “a whole lot of money”. 

So let’s just quickly clarify what we are actually dealing with. Wallstats.com puts the cost of waging 48 hours of war in Iraq and Afghanistan at one billion dollars, which puts the $15 trillion US-deficit somewhat in perspective. The site usdebt.kleptocracy.us on the other hand, does a great visualization of various astronomic amounts, of which the One Billion Dollar one looks like this:

So now that we have established beyond doubt that we are talking about more money than you can reasonably carry away in a bank robbery, let’s go back to Dr Evil and look at the ransom part. There is actually a bit of irony in there that I find much more irresistible than the dollar amount itself. 

The vast amount of intimate information Facebook now has available about its users worldwide is such that if it was a government agency, it would pose an internal security risk for any country that has a sizeable Facebook user community (which excludes, notably, China). So with vast amounts of sensitive intelligence and deep pockets, you may indeed be forgiven to think that there is something slightly creepy going on. But maybe that’s because (disclosure) I don’t do Facebook. 

The notion that you give your personal data (and then some) voluntarily over to a commercial corporation, whose intentions about what it plans to do with it are less than clear, and then go out to buy into the company once it goes IPO sounds almost like buying back what you have given for free. But who knows, maybe Facebook won’t get the $10 billion IPO, or even if, maybe it won’t hold its value after the launch which in the current economic climate is quite possible. Just this week it was reported that companies that listed in the US this year had lost an average of 10% of their value after debuting. And that includes coupon-seller Groupon, whose shares have now fallen below their initial price, as well as music streaming site Pandora Media.

There will no doubt be a great deal of analysis and debate about whether Facebook is actually worth $100 billion. But whichever way it goes, the IPO (if it is true) sends a powerful signal to the industry. It implies that the company, just like other entertainment and communications technology companies is  poised to continue to thrive, no matter whether there’s a deadlock in the Senate or the Eurozone breaks up. Quite to the contrary. It seems that the more dire the circumstances, the more we collectively flee into the haven of entertainment, even if it is just for a short while. The record 42 billion online videos watched by US citizens in October this year speak for themselves, and so do the reports that despite the general doom and gloom telcos are set to profit from stable growth in the coming years.  On the whole, it looks like it’s statistically proven that we love to be entertained when we are happy and we also spend money to be entertained when we are sad.

Of course, as the entertainment sector bucks the trend and becomes the shining example of successin an otherwise faltering economy, things will get a lot more competitive for a share of the spoils.  Many other operators, currently on the industry fringes may just muscle their way in. For companies already in the entertainment and communications technology space this means just one thing: innovate or perish.