The Tech Strategy Podcast

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4 Types of Intangible Assets in Digital Businesses (151) Jan 22, 2023

Show notes

This week’s podcast is about why intangible assets are so important in operations, competitive moats and valuation. They are central to digital businesses - but confusing.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the AI company Movio.la
Here is the link to the China Tech Tour.
McKinsey’s Framework for Intangible Assets

Innovation / Creative Assets. This is any time, effort or money spent developing intellectual property. This includes content creation, such as entertainment and artistic originals. And it includes other types of content such as mapping and user generated content. But it can also include R&D in new product development, improved customer interfaces and improved user experiences (whether digital or physical). The term “innovation capital” is a good description of these types of intangible assets, which we see frequently in digital businesses.
Digital and Analytics Assets. This is any time, effort or money spent developing, maintaining, and advancing digital assets and capabilities. This includes software, data warehouses, digital infrastructure, and other digital and data capabilities. This includes pretty much everything in the digital operating basics. It also includes CRM software, ecommerce interfaces, data analytics models and algorithms and so on. I like that they separated this as a category from intellectual property and content assets. The title “digital and analytics capital” is great.
Human and Relational Assets. This has two sub-types. This is any time, effort or money spent on:
- Building individual or organizational skills through training within an organization. So, this is your talent strategy – which includes specialist skills and capabilities but also social and emotional skills. This also includes relations and interactions within organizations, such as organizational and managerial capabilities. You can put adaptability and resilience here.
- Building ecosystems and networks external the organization is also important. This is relationships and partnerships with suppliers, complements and data partners. This is where Digital Operating Basics 4 as well as Consumption Ecosystems would go.
Brand Assets. This is any time, effort or money spent to maintain or increase brand equity. This is an important category, but the name is not great. Relationships with current and potential customers is an important intangible asset (often called brand equity). This can include capabilities that build and maintain these relationships – such as loyalty programs, promotions, and fan clubs. Customer service and churn and retention initiatives are also very important.

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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.
I host Tech Strategy, a podcast and subscription newsletter detailing the strategies of the best digital businesses in the US, China and Asia.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.

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Why ChatGPT and Generative AI Are a Mortal Threat to Disney, Netflix and Most Hollywood Studios (150) Jan 19, 2023

Show notes

This week’s podcast is about how generative AI is disrupting content creation. This is a major tech shift and a lot of big incumbents (such as Netflix and Disney) are going to be impacted.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the China Tech Tour.
Generative AI companies to try:

OpenAI / ChatGPT
OpenAI / DALL-E
Midjourney
Synthesia
AIVA
Lexica
Wellsaidlabs

5 Winners in Generative AI

Specific, niche content creators, usually based on people. Such as sports content, game shows, and reality TV. Also, some creators with do very but will follow a power law.
Content production tied to community or services
Audience builder platforms
Learning platforms
Creator tools providers with standardization Network Effects, such as Adobe.

2 Likely Losers in Generative AI

Content publishers. These intermediaries (such as book publishers) don't have much of a role unless they unless they control demand or distribution.
Stand alone content creators. Content can be created in house and purchased. They will struggle with coming wave of high-quality, free content. That’s Disney, Netflix, most tv studios. Basically, any business that has been relying on scale in content creation. Economies of scale in content production disappearing - especially in animation. Barriers to entry are going away. Companies like Disney and Netflix needs to become audience builder platforms ASAP. They need to expand from mass market to micro markets.

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Related articles:

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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.
I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.

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4 Rules for CPG Brands Going Digital. Lessons from AB InBev, Nike, and Zé Delivery. (149) Jan 01, 2023

Show notes

This week’s podcast is about how consumer packaged goods (CPG) companies can go digital. It's my 4 basic rules to get going.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the China Tech Tour.
My 4 Rules for CPG Brands going Digital

Focus on DOB3. You need to digitize the core. This is easier in CPG as it's mostly about marketing. The hard part is creating the connection with the consumer. AB InBev did this by creating its own app and delivery service. You can use services like Shopify and JD Logistics.
Do DOB4 as early you can. You want to connect with other parties, such as complements and retailers. This is mostly about sharing data early on. Collaborations in product development, operations and R&D may come later.
Commit to Ecosystem / Platform Participation as your SMILE marathon long-term. You have to become a master at engaging with the major ecommerce, social media and video platforms. Even Nike can’t do it all direct. This is usually about developing talent early on.
Build moats and competitive advantages as you can. These will mostly be by consumer capture.

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Related articles:

From the Concept Library, concepts for this article are:

DOB3: Digital Core for Management and Operations
DOB4: Connectedness, Interoperability and Collaboration-Based Business Models.
SMILE Marathon: Ecosystem / Platform Orchestration or Participation

From the Company Library, companies for this article are:

AB InBev / Ze Delivery
Nike
CPG

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I write, speak and consult about how to win (and not lose) in digital strategy and transformation.
I am the founder of TechMoat Consulting, a boutique consulting firm that helps retailers, brands, and technology companies exploit digital change to grow faster, innovate better and build digital moats. Get in touch here.
I host Tech Strategy, a podcast and subscription newsletter detailing the strategies of the best digital businesses in the US, China and Asia.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.

Support the show

My Valuation for Microsoft (148) Dec 21, 2022

Show notes

This week’s podcast is about Microsoft and how I approach its valuation.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the Asia Tech Tour.
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Related articles:

From the Concept Library, concepts for this article are:

Valuation (Question 3): Digital Valuation
Valuation: Bird in Hand vs. Bush
Valuation: Growth, ROIC/RONIC and Value

From the Company Library, companies for this article are:

Microsoft

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I write, speak and consult about digital strategy and transformation.
My book Moats and Marathons details how to measure competitive advantage in digital businesses.
I also host Tech Strategy, a podcast and subscription newsletter on the strategies of the best digital companies in the US, China and Asia.
Note: This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

Support the show

Mercado Libre vs. Magazine Luiza / Magalu in Brazil is an Awesome Strategy Question (147) Dec 13, 2022

Show notes

This week’s podcast is about the two leading and well-run ecommerce companies in Brazil: Magazine Luiza / Magalu and Mercado Libre. Both companies have compelling but different business models. It is an interesting strategy question.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the Asia Tech Tour.
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Related articles:

What is Elon Musk’s Plan to 10x Twitter? (2 of 2) (Tech Strategy – Daily Article)

From the Concept Library, concepts for this article are:

Marketplace platforms
Online-Merge-Offline (OMO) / New Retail

From the Company Library, companies for this article are:

Mercado Libre
Magazine Luiza / Magalu

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I write, speak and consult about digital strategy and transformation.
My book Moats and Marathons details how to measure competitive advantage in digital businesses.
I also host Tech Strategy, a podcast and subscription newsletter on the strategies of the best digital companies in the US, China and Asia.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.

Support the show

ChatGPT and the New Machine Human Interface (146) Dec 05, 2022

Show notes

This week’s podcast is about the arrival of ChatGPT, which is stunning people everywhere with its content generation.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the Asia Tech Tour.
Here is the link to ChatGPT
Here is the past article on Conversation AI at JD:

3 Lessons in Conversational AI from JD’s Head of the Deep Learning (1 of 2)

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What is Elon Musk’s Plan to 10x Twitter? (2 of 2) (Tech Strategy – Daily Article)

From the Concept Library, concepts for this article are:

AI as Cheap and Fast Prediction
AI: NLP

From the Company Library, companies for this article are:

OpenAI

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Elon Musk's Strategy for Twitter is to Supercharge Performance - And Then 10x the Product (145) Nov 15, 2022

Show notes

This week’s podcast is about Elon Musk's take-over and turn-around of Twitter. Lots of cool lessons in what he has done in the first 3 weeks.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here is the link to the Asia Tech Tour.
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What is Elon Musk’s Plan to 10x Twitter? (2 of 2) (Tech Strategy – Daily Article)

From the Concept Library, concepts for this article are:

Audience-Builder Platform with Connected Users
Digital Operating Basics
Social media

From the Company Library, companies for this article are:

Twitter

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Why Most Incumbents Should Forget About Platforms and Build Consumption Ecosystems (144) Nov 09, 2022

Show notes

This week’s podcast is Production and Consumption Ecosystems as digital business models. This thinking is mostly by Professor Mohan Subramaniam, who wrote the book The Future of Competitive Strategy: Unleashing the Power of Data and Digital Ecosystems.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
My 9 digital business models are:

Linear business models (i.e., pipelines)
Production Ecosystems
Consumption Ecosystems
Company Ecosystems
Platforms
Pipeline plus Platform Business Model
Protocol networks (i.e., blockchains) as stand-alone businesses
Platform-protocol hybrids
Protocol ecosystems (i.e., building blocks)

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Related articles:

From the Concept Library, concepts for this article are:

Production and Consumption Ecosystems
DOB4: Connectedness Interoperability and Collaboration Based Business Models
Platform Types: Coordination, Collaboration and Standardization

From the Company Library, companies for this article are:

Haier

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I write, speak and consult about digital strategy and transformation.
I also host Tech Strategy, a podcast and subscription newsletter on the strategies of the best digital companies in the US, China and Asia.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.

Support the show

What Grab Can Learn from Amazon About Growth - and Not From Meta (143) Oct 31, 2022

Show notes

This week’s podcast is Grab's growth initiatives, which are critical for getting to operating profits. They also provide a case for talking about core vs. adjacency growth.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Grab's compelling growth initiatives include:

New Services for Consumers
GrabUnlimited
Cross-Selling
Advertising
Financial Services

Most of this is a summary of work by Chris Zook at Bain’s strategy practice. I am citing the books:

Most all sustainable growth is based on 1-2 strong cores.

A profitable core is centered on the strongest position in terms of loyal customers, competitive advantage, unique skills, and ability to earn profits.
- My list for strong cores are growth / market, competitive advantage and attractive unit economics.
Adapting the core can be:
- New products / services
- New customers – microsegments
- New geographies
- New businesses.

Six growth adjacencies:

New customer segments:
New geographies
New channels
New products
New Businesses
New value chain steps

How to assess an adjacency move:

Factor 1: Adjacency is tightly tied to a strong core.
Factor 2: An attractive adjacency market in terms of profit pools
Factor 3: The ability to capture economic leadership in that market.

Digital adjacencies are moderate, relentless expansions versus big trees.
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Related articles:

From the Concept Library, concepts for this article are:

Growth: Core vs. Adjacency
Growth: Explore vs. Exploit

From the Company Library, companies for this article are:

Grab

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Lessons in Purchasing Economies from Costco, JD and Pinduoduo (142) Oct 23, 2022

Show notes

This week’s podcast is about economies of scale in purchasing power. I go through Walmart and Costco as traditional examples. And point to JD, Apple, and Pinduoduo as digital examples.
You can listen to this podcast here, which has the slides and graphics mentioned. Also available at iTunes and Google Podcasts.
Here are types of economies of scale.

CA11: Fixed Operating and Capital Costs
CA12: Purchasing Economies and Bargaining Power with Suppliers
- Larger companies can demand cheaper prices and/or better terms from suppliers than their smaller competitors. This is about bargaining power for important and/or sizeable inputs
CA13: Geographic and Distribution Density
CA14: Geometry Effect
CA15: Learning Scale

Cases of purchasing economies

Newsfeed of offers plus C2M results in purchasing economies. Pinduoduo.
Privileged technology access by Apple
Purchasing economies. This was JD's biggest lever.
Platform business models power over suppliers.

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Related articles:

From the Concept Library, concepts for this article are:

Competitive Advantage: Purchasing Economies and Bargaining Power with Suppliers

From the Company Library, companies for this article are:

JD
Pinduoduo
Walmart
Costco

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I write, speak and consult about digital strategy and transformation.
This content (articles, podcasts, website info) is not investment, legal or tax advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. This is not investment advice. Investing is risky. Do your own research.

Support the show

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