Sometimes you can’t see what’s about to bite …..
The bewilderment regarding the Facebook purchase of Instagram has exposed the massive disconnect the old Media world has with the new media world, particularly the Television pundit. It’s a SKY buying the Premier League rights moment, the first time you use text moment, or an hour with Jeremy Bulmore moment. I have the Instagram app, I haven’t used it but I’m very aware that Damon Collins uses it a lot in his Tweets, and as he’s a brilliant creative it must be good. No one saw it coming, few can work out the benefit and none have stepped back to look at the wider picture. The fact is Facebook bought it because they could, it’s bit like Jay Kay and Ferrari’s, plus they have a view of digital beyond the share price, half year announcements and how much the current MD is being paid (the Instagram fellow just picked up $400m , makes Sly Bailey look cheap).
A couple of weeks ago I met up with a chap called Rob O’Donovan who I met through a pal of my sons who works part time with his Agency, ‘The Eleven’. ‘The Eleven’ focus on youth marketing and research, they have a fab client list and are growing. The partners are still at University, LSE I think…, and have no previous experience in marketing yet are giving marketing advice and it’s spot on. They are able to do this by exploiting the platforms that companies such as ‘Instagram’ and ‘Facebook’ sit on and thrive. When they graduate they will have their own business and not be looking to work for free, employing bright people who will not be buried under layers of promotion, paralyzing hierarchy. Instead they will have a fighting chance to make some cash just like the AMV, BBH, CHI, HHCL letters did. Rob is not alone, and as Chairman of Rare Breed Digital I have signed three NDAs in the last 10 days alone. All are for App development work supporting brilliant ideas all from grads or post grads. All are three stunning well thought through ideas and carry the “why hasn’t someone done this before?” tag. They are all currently raising finance and the Tory’s 50% EIS is helping their quests. I am sure it was Sir Martin Sorrell who once said something along the lines of “the next big thing is probably being invented right now in a lock up in City you’ve never heard of in China”, and I’m sure he’s right. But we should add it’s also happening amongst the Jerry cans in a garage of Great Britain.
The point is that in the past ideas took time; investment, distribution, marketing, offices and people. Today, you don’t need any of the high start up costs that sink many businesses, for example Apple and Google have the distribution, collect the money for you and stick you on their shelf, a crowded competitive shelf but an eye level shelf never the less. The barriers to entry are far lower. The Victorian industrial revolution built incredible infrastructure, created GMT and connected the country up like never before. Analogue canals silted as digital rail lines connected up our Great Cities (and Plymouth). Yet the snag was not everyone could use it, imagine Brunel’s response if you had asked if you could use the Tamar Bridge for your own train?
What’s different now is that the Tech structure is open to all and whilst Google and Apple has dominated the space they have enabled millions of businesses to grow. The significance of Virgins excellent campaign, with Usain Bolt, is that super-broadband speeds are with us right now and the imminent arrival of 4G will further fuel the rails on which new businesses can be built.
‘So where are we heading?’ I think an emerging pattern of business start ups that are based on platforms that are free is imminent, why launch a Digital TV channel when 10 blokes and a decent App can make you a billion!? These business may well aggregate the “audience” they attract but at the core they’ll be owner managed and if have any sense will follow the CHI and BBH model while keeping 51%. Both sides of the business will work interdependently< with tech having as much creative say as anyone else.
Meeting young talent is very exciting, meeting young talent with their own ideas is stimulating, meeting young talent that you can see have a chance of making a fist of it 'Priceless'. So if you're running an Analogue business and furiously paddling, trying to make sense of the digital, mobile, second screen, app model phenomena, then you better tuck away a billion now because if you don't have the idea now, that's what it's going to cost you to play later.