Markets are turning into networks where the only currency is information, according to technology entrepreneur and author Peter Hinssen.
Speaking at Google's programmatic trading-themed event in London yesterday (10 July) Hinssen warned marketers they must restructure their businesses and redefine themselves as networks if they are to survive in the future’s data-centric environment.
“Every market that is information-rich is being attacked by people who get data. It’s hunt or be hunted. Your new competitors are not other agencies or brands, but the guy with a hoodie in a garage in Silicon Valley,” he said.
He added that companies must “reinvent” themselves as networks to stay relevant or they will not survive.
He referenced the case of music store chain Tower Records, which went bust in 2006 due to its inability to change its business model in time.
It began to notice issues when it introduced a returns policy, but failed to realise why people were returning CDs the very next day – because they were ripping them – according to Hinssen.
“Did they understand there was a fundamentally new way of consuming media and information? No. They could have invented iTunes, but they didn’t. They could have invented YouTube, but they didn’t. What did they do? They changed their returns policy, and went bankrupt four years later,” he said.
Hinssen cited Disney as a company which had grasped the "goldmine" of information about its customers it could tap into via its wrist band Magic Band. This band is given to all Disneyland goers, who can then use it for multiple activities including buying food, going on rides, accessing their hotel rooms and the park itself.
"In time, everyone will be in the information business - information will be the fuel", he added.
However, he warned, "big" data could be a disappointment if not managed properly. "It cracks me up when companies talk about big data. In many companies it's a disaster...you don't even know how to manage little data."
He went on to reference some of the disorder he has come across when consulting for companies, pointing to some particularly amusing 'filing systems' of people what he suggested was is categorised as "little" data.
Hinssen listed the more amusing folder names he has encountered when visiting companies as follows:
Meanwhile Hinssen said Silicon Valley, California's start-up tech community, has now evolved from being the "high-tech capital of the world" to being the "industry disruptive capital of the world".
He referenced Netflix, and how it disrupted the traditional TV-viewing world when it commissioned The House of Cards, while Google's driverless cars are also likely to hugely disrupt the insurance industry.
"My 11-year old son may not even have a driver's licence by the time he grows up. The whole next generation may not need a driver's licence."
Hinssen predicted that in time markets will completely disappear, to be replaced by these networks of information.