Q & A

What are your customers thinking?

The question has always been critical to marketers. However, with rapid innovations in technology—social networks, mobile technology, new ways of delivering content—and the following shifts in behavior, it might be harder to answer than ever. Rishad Tobaccowala, the CEO of Denuo, a company that helps clients grapple with these trends, gives his take on the pulse of marketing today.

Q: How much can you actually persuade consumers, and how much of a marketer's job is following what they want?
I would say that it is almost completely following what they want. Shakespeare's Julius Caesar has a line — and I'm paraphrasing — "take the current when it serves, or prepare to lose thy ventures," which, in Americanese, is "go with the flow, man."

And what you will find is that successful people and successful companies can have mediocre talent, if they can find the right trend. If they go against trend, however talented they may be, they will not be successful, which is one of the reasons that when someone comes in and says, "I have a business that's built around the way people are using the internet," I pay attention because, at least, they're aligning with a trend. I would then find out whether they have a good business.

But if someone comes in and says, "I've got a business built on newspapers," I would say that's a very silly thing. There is nothing you can do to convince people to subscribe to newspapers — you can't discount, you can't threaten, you can't give them away. Rupert Murdoch has decided that he is going to get people to pay for content. And a lot of people say they are willing to, but the truth of the matter is, while you may get some people to pay, the size of the industry, if it is dependent on people paying for content, is going to be half the size of what it is today. So it's not a worthwhile industry to be in.

What people have not recognized is that for large groups of people, content is other people. Facebook is full of content; content is not necessarily words on paper.

There are two types of content that I really care about: content that is deeply relevant to me, or content that resonates deeply with the culture. What's relevant to me is very long-tail-y —the Halloween pictures my daughter posts might be very relevant to me. And a discussion on the last episode of Mad Men, which resonates with the culture, may be relevant. Everything in between gets harder and harder to justify. And most of what's in between tends to be what the content companies believe that they can make money with.

Q: You have said that the future will not fit into the containers of the past, but are there things that we can learn from the past?
The thing that one can learn from the past is that companies that disconnect from what people want eventually fail. Companies that have been successful can become insular. Or companies that overextend to industries that have nothing to do with their existing industries, and do so with exactly the same people — they fail.

I think companies and people are going to have to constantly iterate. To get to the future you must think and do. You can't think your way to the future, and you just can't do your way to the future. If you just do, do, do, without thinking, you won't be able to make the course changes iteration requires. If you think without doing, you don't get any market information and you become academic.

Q: How do you figure out what's a brief fad and what is a significant trend?
We use criteria that have to do with human beings, with technology, and business. At the consumer end we ask, does it save you time and money? And on the technology end, does it have network effects? And at the business end, is it disrupting an existing industry that has lots of money?

We tend to be bullish on things like search. We tended to be bullish on things like social networks. We tended to be very negative, from the very start, on things like Second Life, because Second Life did not actually save you time or money. Second Life did not have a network effect. It did not disrupt any industry. In fact, the real power of Second Life was the concept of virtual worlds, but there was already a very big network effect to virtual worlds with something like Worlds of Warcraft, or any of the multiplayer games. So we recommended to our clients that they should go into gaming in a big way, not Second Life.

Q: Does consumer mindset vary around the world?
Technology differs. Gaming is huge in Korea — less so in the U.S. but growing. Or, for instance, about 200 million people have access to broadband in the United States, today. That's out of the 300 million people in the country. And there are 200 million to 250 million mobile phones in the country. Now you go to someplace like India, which has a billion people, maybe 50 million people have access to broadband. But they sell 10 million new mobile phones a month. In India right now, there are just under 600 million mobile phones. It's an SMS [text messaging] culture. In the U.S., SMS is important, but people tend to do a lot more on Facebook, Twitter, and email than SMS. So those are sort of cultural differences.

There are some underlying human things which are similar all over the world. What matters: distract me, help me reproduce, help me be productive. The tools and technologies differ, and they differ for a variety of reasons including where the country is in the economic cycle. In some countries, there may be more people who care about being distracted. In some countries people may care more about being educated. And these are just percentages. Everybody is sort of the same. So you will find that more people are paying attention to what Bill Gates has to say in China, versus more people paying attention to what Brittany Spears is saying in the United States. That doesn't mean in China they don't care about Brittany Spears or in the U.S. they don't care about Bill Gates, but you'll find, when you go to China or India, because of the way the economy is, they're trying to get better. And in the more advanced economies, even though we are having a tough time, people spend more time trying to get distracted.

Q: Are we going to reach a point where we can't absorb everything that is coming at us?
This is a major struggle. This is part of the whole idea that people are analog and the world is digital. If I were going to start a business, I would offer psychological counseling on how to live in a technology world. The rapid flow of information coming at us is pretty dramatic.

In the hour that we talk, there will be about 150 pieces of information that have occurred in my life, if I decide to pay attention. That 150 comes from notices on my LinkedIn page, Twitter feeds, voice mail, my email accounts — Gmail, Hotmail, my office email. With 150 inputs over 60 minutes besides talking with you, it's possible to feel overwrought. You feel somewhat not in one place at any given time.

So there's that sort of psychological issue. Our ability to process is a big problem. There are also challenges as to what is real and what is not real. Your past is always there, if it's digital. Twenty years ago, a speech I made in Israel was gone and forgotten. Now it is searchable forever. So on the one hand your past is permanently present and on the other there is an "anything is possible" sense that has people imagining many simultaneous futures. There is part of that which is very positive, and then there is a certain amount of sadness. With so many possibilities, how do I know I made the right choice? In the past there might have been one option maybe two. Now there are ten. I chose one. It's great, but should I have gone with another one?

Another one of my new insights is that we have basically learned how to count a lot. You can say that there are so many songs in my iPod. With my Nike+iPod I know how many miles I ran. With the Zeo, I know how I sleep in the night. I can tell you how many followers I have. I can tell you how many friends I have. I can tell you how many LinkedIn connections I have. I can tell you how much I weigh. I can tell you what my cholesterol count is. But what does that mean? Einstein had the line "Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted." Do a bunch of statistics and numbers make a person? I'm somewhat old fashioned with this. I actually believe, in the end, people choose and make decisions with their hearts. They may use numbers to justify what they did, but when you get so much over-processing, you eventually turn to instinct — your heart or your gut.


CEO, Denuo