The Next Big Thing(s)

 

The Next Big Thing(s)

As a strategist, I’m often asked by colleagues for my ideas and predictions about "the next big thing.” When I was younger I answered this less from expertise than from an internalized obligation to prove my value. Yet age has taught me I’m not an oracle: for one, I definitely did not see Covid-19 coming! And wow, do those few people who, in April 2020, accurately predicted the outcomes of the pandemic have an amazing crystal ball. 

Nevertheless, I’ve learned a bit over the years about planning ahead. To start, there’s rarely one Big Thing. Rather, many things unfold in parallel; we don’t know for sure what will stick, so our job is to plan for multiple scenarios within dynamic and rapidly evolving social, economic, and political landscapes. Also, we commonly assume the next Big Thing will be tech-based, but this isn’t necessarily the case. For instance, the long-overdue acknowledgment and pursuit of DEI initiatives have nothing directly to do with technology.

As we look ahead to 2022 and beyond, a number of intersecting trends are creating urgency for nonprofits to start (or continue) experimenting with new, innovative operating models. In this post, I’ll share a brief overview of these trends, as well as concrete ideas for how your organization might consider adopting them.

The likely challenges we face

In spite of hopeful signs in the collective global response to the pandemic, nonprofits continue to experience many dramatic shifts in their competitive environment. The resilience and openness to change that characterized our sector in 2020 and 2021 will continue to serve nonprofit executives well in responding to the following:

Mergers and consolidation in distressed parts of our sector

The pandemic, its related social and economic challenges, and the racial reckoning of the past 18 months have had a dramatic but uneven impact on nonprofits. Some organizations have seen increased demand and funding, while others have suffered from a change in donors’ priorities. Particularly in parts of our sector that have faced bigger setbacks—for instance, educational institutions and arts organizations—we are likely to see a shakeout that involves groups folding, merging or consolidating in response to continued financial distress. Take, for example, a recent merger between the two philanthropies that fundraise for San Diego’s beautiful Balboa Park. Or mergers between these two pairs of local United Way chapters.

A potential winnowing in organizations receiving high-dollar investments

We’re noticing interest among philanthropists in giving larger amounts of money to a smaller group of nonprofit grantees—usually with an eye toward making a more immediate impact on issues requiring an urgent, and big, response. In particular, these philanthropists are targeting “high-impact” organizations that have a demonstrated ability to handle the operational weight of big-ticket investments. Meanwhile, grant seekers that lack the capacity to effectively manage a large influx of funds may lose out on opportunities—as well as those that do not present ideas and ask for the major investment.

The MacArthur Foundation and its 100&Change initiative are at the leading edge of this trend. Many social problems are too large to be solved by grants at the size that foundations typically provide. In response, the foundation launched a competition for $100 million to be awarded to a grantee to achieve transformational impact in a critical issue area (e.g. homelessness; racial equity, refugees). This initiative and increased interest from ultra-high-net-worth donors who want to fund cutting-edge ideas led to the creation of Lever for Change, which unlocks fresh capital investment —all thoroughly vetted by a trusted partner—without the donors having to start their own foundations. A similar approach to funding a small number of targeted organizations is being deployed by the Bezos Earth Fund. 

The incursion of the private sector into social change issues

Many big private sector companies are steering heavily into social issues long championed by non-profits—but with speed and agility, most non-profits (as of today) will never compete with. At the same time, the social enterprise sector continues to grow, driven by the desire to solve pressing social problems through market-based solutions. Neither is a bad thing: given the herculean levels of innovation and change required to get to net-zero carbon emissions by 2050, for example, all hands must be on deck (indeed, a UN partnership has predicted that 70% of the investment needed to meet net-zero goals could come from profit-seeking investors!)

The impact of this growth in private investments is uncertain for the nonprofit sector. Will funding continue to pour into the 501c3 space as it always has? In the world of nonprofit medical research, we mostly see venture philanthropy complementing (rather than upending) nonprofits’ more traditional focus on basic scientific research, giving drug companies access to a new funding source for early-stage trials. The presence of a financial bottom line can lead to a results orientation that is in many ways welcome. And venture capital has a history of tolerating lots of risk in its search for a world-changing win—helpful for overcoming the nonprofit sector’s natural risk-aversion. Yet there are tradeoffs too; nonprofit leaders will need to watch these market movements carefully.

Intense competition for top talent

An exceptionally strong labor market is making it harder for some nonprofits to retain their highest-performing employees—many of whom are burned out after a long pandemic period of operating in “survival mode.” Fierce competition for talent will continue. Nonprofit HR teams have always struggled to compete with the compensation packages that private businesses offer, but their challenges are now compounded by growing competition from companies expanding their social and environmental initiatives. 

Growing expectations for seamless digital experiences

We’ve written often about how the pandemic has hastened a digital revolution, not only within our organizations but in our personal lives. We spend more time online than ever before. This means that our stakeholders expect quick, friction-free digital experiences—just like the ones they get from their favorite private sector brands. This demand is not going to shift. And it applies equally to employees and their experiences in the increasingly digital workplace.

The emergence of Web3 technologies

Web3 is the emerging term for a plethora of technologies that are based on the public blockchain. “In a Web3 world,” writes NPR, “people [will] control their own data and bounce around from social media to email to shopping using a single personalized account, creating a public record on the blockchain of all of that activity.” In the process, they get to sidestep big tech giants like Facebook, Twitter, and Google. Buoyed by cryptocurrencies and the rise of NFTs, Web3 technologies are bound to grow in the coming years; nonprofit leaders will have no choice but to stop and take notice.

Potential strategic responses to these challenges

Effectively responding to these challenges requires that nonprofit executives be willing to consider bold new approaches—ones that, in many cases, deviate significantly from the status quo in our sector. While specifics will vary by context, below are strategies worth considering to boost organizational capacity and secure long-term resources to support your mission.

Invest in your organizational capacity

As funders increasingly require robust, scalable operations in exchange for big-ticket investments, your power comes from building a strong culture of operational excellence. In order to grow the business, you have to run it like a business—not just in programmatic work, but across the board. This is especially true for organizations that have central departments that support multiple programs. Communications, finance, development, and IT all exist to facilitate the impact of programmatic work. None exist in isolation, and this should be recognized with greater investments in coordination, both in terms of team cohesion across departments, and in strategic technologies that support digital transformation throughout the organization (rather than better software tools for their own sake).

Create an internal incubator for new ideas & programs

Many nonprofits struggle to develop fundamentally new approaches to serving their constituents, due to push back from funders or risk-averse cultures. Yet fresh ideas are critical for success as our organizations face growing demands with limited resources. One way savvy nonprofits can boost innovation is by embracing an “incubator model”: creating a specialized container, set apart from normal business operations, to build out new programs or business offerings. Empowered with unconventional autonomy, flexibility, and resources, groups operating within the incubator are able to innovate and test out new approaches without hitting the familiar wall of “we don’t do things that way here.” Successful ideas and programs can either be adopted by existing units or launched as independent, affiliated organizations, like Lever for Change in the case of the MacArthur Foundation. (For more guidance on how to launch an incubator or innovation lab within your nonprofit, check out this helpful resource.)

Consider partnerships

Partnerships offer an opportunity for two or more groups to work together toward a shared mission, without legally merging distinct organizations. Lower in risk and complexity than an acquisition, partnerships can be particularly effective in areas where nonprofits’ skills and expertise are complementary, rather than redundant.

It’s likely that you and you're nonprofit already collaborate with many like-minded entities. Can you expand your reach, save administrative costs, improve services, or strengthen your brand by strategically partnering with another organization whose work is aligned with yours—or by deepening an existing partnership to unlock even more value?

In our client work, we often reflect on how direct service nonprofits would benefit from greater strategic access to the expertise of think tanks and policy organizations—and, likewise, how the relevance and impact of policy groups are strengthened through deeper working relationships with implementing organizations. Likewise, we believe more nonprofits would benefit by considering joint applications for grant funding. Why compete ruthlessly for limited philanthropic dollars when you can stand shoulder-to-shoulder with partners that have complementary areas of expertise, potentially securing more financial resources for both organizations in the process? 

Consider strategic acquisitions

Mergers and acquisitions are common in the private sector, but not to the same degree in the mission-driven space. Many smaller, niche nonprofits likely won’t have the wherewithal to survive the intense fluctuations expected through the next five years. Yet other organizations, capable of surviving independently, would benefit greatly from the additional resources, energy, and operational support that can come with a strategic merger. By absorbing the capacities of a like-minded group, organizations can expand their reach and impact without necessarily duplicating successful programs that already exist on the ground. Moreover, acquisitions help nonprofits get a running start when entering a new geographic region or program area, sidestepping some of the start-up lag that often comes when building a new internal capacity from scratch. 

Assuming there’s strong mission alignment, the biggest issues in bringing two complementary nonprofits together will be cultural. For example, does one have a start-up mentality, while the other is more hierarchical and risk-averse? Do the Executive Directors have complementary outlooks and personalities? Differences aren’t necessarily bad, but they need to be carefully managed. An external consultant can often be helpful in bridging divides, bringing people together, and working through legal and logistical barriers.

Cultivate a marquee event that positions you as “the convener”

While many nonprofits halted in-person events and conferences during the pandemic, competition in our sector remains fierce for the time and attention of decision-makers. And for good reason: through their convening power, hosts get to act as the “glue” in the relationships of their key stakeholders. Thus, they benefit from an intangible flow of ideas, resources and connections that results in long-term value creation.

Is there a way to leverage your existing events machine to create something bigger? For inspiration, consider the World Economic Forum: it was a single event before becoming WEF, an independent organization that pumps out research reports and policy content, and hosts summits far beyond the scope of an annual meeting. Your organization may be local, or much narrower (and humbler) in its scope. Still, there may be an opportunity to expand or sustain the momentum of your marquee convening beyond its traditional bounds. 

Keep a close eye on new technologies

In 2006 I signed up for an “online desktop interface” called gooey. I could not even find a link anymore for this service. The point is that, in 2006, local desktop applications were still the dominant paradigm for how we worked. Today, other than the pre-installed Apple applications, I do not use any local “desktop applications” and imagine you are using very few as well. 

Web3 is not yet well understood and certainly not the dominant paradigm yet. But just because the space is volatile at the moment doesn’t mean it is not moving forward; rather, it is just finding its legs. At a minimum it is worth spending some time reading about what is happening in this space to get a better handle on what is being built. There are marketplace and publicity advantages for early adopters as well. Consider the first non-profit to accept crypto or use an NFT for a fundraiser? The world will hear about it, regardless of the longevity of either tool as a funding mechanism. Additionally, getting your digital asset house in order is something you can do now, and will serve you well today and into the future. 

At the same time, we need to remember that new technology is intended for one specific purpose: to make our work more effective. If you end up working in service of a technology, or wondering why you are not gaining value after a year of use, it’s time to consider if you have the right tool. New is not always better—the hammer has been around for a really long time, and it is still amazingly effective at getting a nail into just the right place when hanging holiday lights!

A call to embrace more innovative operating models

One thing we know for sure: the future will continue to be complex, and require a nimbleness and flexibility that’s often challenging for large, long-established nonprofits to muster. As professionals who care deeply about the success of our mission-driven sector, we see an urgency in nonprofits overcoming our sector’s temperamental resistance to change, and embracing more innovation in how they execute strategy. While it is not realistic for organizations and cultures to completely change how they do business overnight, charting a long-term path to transformation is a possibility for every leader.

This piece was originally posted at ParsonsTKO.com. Special thank you to Vince Lamp one, an incredible editor, friend, and thought partner.

The Stakeholder Economy & The Prospects of Collective Ownership

 

The Stakeholder Economy & The Prospects of Collective Ownership

Brands have become decentralized — the memes, content, and daily conversations of the masses increasingly define a brand. The next generation of projects and businesses are also on a path to becoming decentralized — where new block chain-driven organizational constructs turn owners and customers into a community of stakeholders. This confluence of decentralization will advantage emerging brands and local businesses, and could prove to be the most disruptive force against the internet behemoths and global marketplaces that rule the world. Yes, a bold proclamation, but bear with me here… The Antiquation Of One-To-Many Businesses

A theme of the last few decades in tech has been massive internet-based business behemoths using their pricing power and algorithms to crush local small businesses. Most of us are customers of these companies, but they’re owned and operated by a precious few (sure, you can buy stock, but you‘re just along for the ride). Similarly, such companies have long leveraged traditional media to define and force feed their brand to the masses. While I have long marveled at the speed and prowess of such companies (and enjoy pithy taglines), I also wonder what insight or innovation could shake things up. How might emerging or local businesses ever compete?

I see two exciting disruptive forces at play that, together, could change everything. The first has been boiling for over a decade: Brands are now collectively determined by the content generation of the masses as opposed to a creative agency and a nationwide ad buy. Today, for all but the most iconic brands in the world, a brand is only as good and fresh as the latest content and conversations taking place. In a sense, brands are at the mercy of memes and social sentiments. Brands have become decentralized. What your friends say — or even a stranger authentically expressing satisfaction or disappointment — seems to have more sway than super bowl commercials. Why? Because we still crave the ancestral “small town” of reputation and brands built on trust. The consensus in real-time from individuals on social media is powerful. In early 2018, I wrote a post about the idea of Micro brands, thousands of tiny brands with low overhead, high on design merchandise, and supremely efficient customer acquisition tactics. Now looking back, many of these brands are no longer “micro,” thanks to the organic growth and user-generated content they got on social media —from customers and influencers, and often for free.

The second disruptive force at play is the construct of decentralized organizations turning customers (and employees) of businesses into owners. We’re seeing this happen in the aptly named “Web3” space. Picky McCormick defines Web 3 as “the internet owned by the builders and users, orchestrated with tokens.” And the pioneering all-things-crypto investor Chris Dixon (also one of my early seed investors for Balance back in 2011) further explains,

“In Web 3, ownership and control is decentralized. Users and builders can own pieces of internet services by owning [or earning] tokens, both non-fungible (NFTs) and fungible…Tokens align network participants to work together toward a common goal — the growth of the network and the appreciation of the token. This fixes the core problem of centralized networks, where the value is accumulated by one company, and the company ends up fighting its own users and partners.”

While Chris’ focuses mostly on the benefits of decentralized online services and big platforms, I can’t help but imagine the same technology being applied to the long tail of smaller businesses both on and offline. Imagine if your favorite online publications, e-commerce brands, and small businesses in your town — from restaurants and Laundromats to ice cream shops and barbers — were able to frictionless (read: without a prohibitively expensive “IPO” or massive infrastructure to manage) distribute ownership to every stakeholder. Might the benefits of collective ownership of small companies be the biggest threat to big companies? If every stakeholder of these businesses was deeply incentivized to help build, improve, market, and patronize the brands, would that become a competitive advantage against the big guys? Would a “many-to-many” business out-market a “one-to-many” businesses in a material way?

In A Stakeholder Economy, Every Business Is Its Customers

The concept of “stakeholder capitalism” describes a system in which corporations are oriented to serve the interests of all their stakeholders. But I think the confluence of decentralized brands and decentralized businesses gives rise to a new era where the boundaries between companies and their customers are harder to discern. This idea is most powerful where there is the most pain right now: small towns and locally-owned businesses.

What might this look like in the future? Perhaps we will all own a piece of the many online businesses and marketplaces we frequent, as well as our favorite local restaurant, ice cream shop, and coffee house. Imagine every subscriber to your newsletter becoming a stakeholder as well as a reader, and what that would do to viral marketing? When you like a brand or service, you can buy tokens or earn them by contributing labor in the form of clearly defined and measurable tasks. Our tokens would entitle us to vote on certain decisions (flavors of the month?), serve as an engagement vehicle, turn us into passionate unpaid marketers, and would carry (perhaps even grow) a residual value that can be sold on an open 24/7 market to new residents and customers (or speculators seeking exposure to mom and pop shops in stable communities) — or perhaps these tokens can even be redeemed for merchandise? Perhaps you’d be able to buy your ice cream with (tokens in the) ice cream (shop)?

There are a number of technologies and increasingly popularized business models and product experiences that could help make this possible. First, there is the rise of the DAO (decentralized autonomous organization) that makes it far easier to incorporate a business and sell tokens (with or without a vesting period) to a community of new and interested “owners” that feel incentivized to patronize, improve, and grow the business. These DAOs are increasingly turnkey and a broad variety of tools are being built to administer them. Second, the concept of subscriptions could easily be leveraged for local shops and services and managed centrally in a town subscription app. With the stability of subscription-based revenue (and a modern tech stack and CRM), many small businesses would not only survive but thrive by doing more bundles with other shops and efforts to surprise and delight customers.

The Stakeholder Economy & The Good Ol’ Days

I’ve come to call this concept “The Stakeholder Economy” because the traditional construct of “owners and customers” is being replaced by a far larger and more deeply incentivized group of “stakeholders” that will, with the right system design, give the advantage to decentralized marketplaces and businesses with better retention and business stability, and radically cheaper costs of customer acquisition and marketing.

Perhaps the reason I am most excited about the Stakeholder Economy is that it takes us back to the way things once were. When forecasting the future of tech, I’ve long subscribed to the sentimental reflex of tech — that we inherently long for the way things once were and, in every transaction and experience, seek a return to intimacy, relationships, and small town mechanics. We want to be known, we want to support people we trust, and we feel a personal benefit when our community benefits. Suddenly, our local shops are not only supported by the community, but grown and advantaged by a level of dedication only felt by true owners, but at scale. The Stakeholder Economy can restore a sense of small town pride, at scale to the world of brands and business.

As we all have the opportunity to own a part of everything we enjoy — from an online marketplace, a publication, a local ice cream shop or your favorite beverage company — the key levers of business like marketing, sales, and distribution will be transformed by the natural tendencies and preferences we’ve always had within us. There’s nothing more authentic and effective than helping sell something you genuinely love and own.

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Continue the conversation and connect with Scott on Twitter, check out other recent posts like “What is Seeing The Matrix for Product Leaders?” “8 Themes for the Future of Tech,” get his latest book — The Messy Middle, or sign up for an infrequent newsletter of insights.

 

Upcoming New Technology

Artificial Intelligence is a buzzword right now. You’ve probably heard this term at some point in your life where you were either fascinated with it, scared by the potentials of AI, and more afraid to know what it really means. There are multiple types of technologies that will revolutionize our lives with their application in healthcare, transportation, and other industries. Let’s take for example Amazon and how they have grown so much without having created any disruptive technology. But if we talk about artificial intelligence in the consumer space, we can also start talking about companies like Uber, Lyft, and Instacart. Here is a shortlist of these companies that are using Artificial Intelligence in their business.

1) Uber

Uber has brought down prices for all its services. They use customer feedback to determine whether a certain service should be discounted or not. The feedback process involves taking into account location, traffic, weather, and past user experience. It offers an instant response within the shortest time possible. These kinds of features make them one of the best ride-sharing apps around. If you don’t want to go through a lengthy verification procedure, check out Uber’s free car seat and driver’s license options.

2) Airbnb

Airbnb offers you full-fledged travel plans of a house or apartment. This feature allows users to book up to ten different rental properties on demand. With such a simple and easy booking tool, it made me wonder how do I still need to rent my home? In case you have an unused room, check Airbnb’s affordable rentals. And if you have ever thought about owning a property by making it your own, try renting it out at another person’s house or even renting a vacation home.

3) Netflix

Netflix is popular worldwide and every year the company continues growing. And recently, the platform introduced its first global premium video streaming service which is dubbed as “Netflix for movies”. Netflix has become one of the most successful companies today because of its strong focus on expanding content variety. Although there are still several issues that have limited Netflix’s growth throughout the years, they make sure the brand doesn’t lag behind. That being said, Netflix definitely needs to expand its offerings to reach a broader audience.

4) Google Photos

Google Photos is a powerful photography app for both professional and personal photographers. Whether it is shooting landscapes or portraits, anyone can get started using this incredible mobile app. After all, you can use Google Photos from anywhere in the world. As soon as you create a photo in Google Photos, it automatically becomes available at millions of online stores, including those owned by major brands like Facebook, Pinterest, Twitter, Apple, Instagram, and thousands of others. Of course, you also don’t necessarily need to invest hundreds of dollars to buy your desired camera or lens as the Google Lens enables us to add value to our photos by adding additional frames. Plus, you can save time. Just drag and drop your image to the folder of your choice and choose from templates, stickers, and presets.

5) Snapchat

Snapchat was one of the hottest trending apps last month. Not only did Snapchat surpass other social media platforms like Facebook, Snapchat, Instagram, and LinkedIn as the top spot in terms of daily active users, it also grew by 50% since November 2017. What does this mean? Snapchat is far ahead of its competitors when it comes to targeting young children. And, Snapchat uses machine learning algorithms to identify key phrases which then gives parents information regarding their kids’ activities. Snapchat also makes sure younger kids are getting enough sleep, exercise, and nutrition to maintain excellent health.

6) Spotify

Spotify doesn’t just play music, they help artists build their careers. While the name suggests that they are for music lovers only, the platform is actually made for people who share their songs and artists who upload exclusive tracks. Artists can create playlists and earn money by doing so. Since 2015, Spotify has been able to generate over $13 billion in revenue with a fan base of more than 130 million people. The startup is well-positioned to grow its listener base because of its unique strategy of partnering with artist friends. With Artist Management Pro, artists (from all walks of life) can set themselves up as a manager for artists and receive cash-in payments for their performance.

7) UberEats

With over 50,000 new restaurants added each year, many families are spending more time searching for food, rather than eating it. Because of this, Uber Eats is creating a meal delivery service as well. Currently, they are the leaders in this industry and have the biggest market share. Even though it’s not too late yet to become an UberEats driver, you can learn how to drive for free.

8) DoorDash

DoorDash is a digital grocery delivery company and one of the fastest-growing businesses. Their marketplace connects small and medium-sized retailers to deliver groceries directly to consumers. The idea behind this concept is simple — give shoppers what they want and let them make it happen. If you have any concerns about shopping for food online, DoorDash is here to offer support. Check out their website for more details about their service and how to get started.

9) Grocery Delivery Service

With the boom in sales of fresh groceries, grocers have also started providing groceries in home deliveries. Grocery stores like Whole Foods, Sprouts, Aldo, Costco, Whole Food Market, Sam’s Club, Chegg, and Jamba Juice offer convenient ordering services to customers, as well as delivery options for busy families. For more interesting facts about this industry, read this article: Why We Need To Choose A Grocery Delivery Company?

10) Foursquare

Foursquare has become a great way to reconnect with your local neighborhood. People in various cities can connect or watch live sports, play games, listen to music, read news, and watch live sporting events like NBA Finals, UFC, FIFA, and MLB. At present, they can have an average of 100 million monthly users and boast a positive rating of 4.2 out of 5 stars. The company is currently working towards acquiring 25 million users per year and is looking forward to continuing its growth. You can use the Foursquare App for everything — from searching for neighborhood maps to paying bills online, to watching TV shows and podcasts. Its current free trial is still ongoing until June 2019, but you can upgrade it for $1.99 a user.

11) Zillow

Zillow is a search engine used across the globe by real estate professionals. Apart from helping buyers find properties near them, the platform provides sellers with valuable insights into buying and selling homes by analyzing consumer behavior. From the data collected, Zillow puts together customized searches based on variables like price, size, and amenities to help people find the perfect house or address their specific needs. It also has an area database of almost 250 million square feet in the United States.

12) MyPillar.io

MyPillar.io is an eCommerce platform that helps you sell products on your personal and professionally designed websites to boost traffic. From clothing to food to household essentials, you can sell anything on your personal sites. There’s no limit to what you can sell, which includes apparel, jewelry, beauty supplies, cosmetics, books, art, kitchenware, shoes, clothes, and more. You can even sell services like web design, graphic design, programming, accounting software, and more, from your site. Also, let this app help you customize your store’s look so that people are attracted to it and they keep coming back for more.

13) Shopify

Shopify is a comprehensive platform for selling and running online businesses. Unlike many other platforms, Shopify offers unlimited inventory, the ability to accept payments safely and securely, fast shipping, and customization options. Your website’s visitors are able to see exactly what they’ll receive after the sale without leaving the page. However, if they leave before seeing exactly what they’re receiving, it would eventually lead to unhappy customers. On the other hand, Shopify is completely web-based and requires very little maintenance work.

In summary, the above apps are going to transform things and bring in newer ways of commerce. By using the three mentioned applications, we can expect to see a massive expansion in this sector. All major players are investing heavily in developing the next big innovation such as robotics, AI, AR, VR, and blockchain that will usher in future innovations.

Want to know more about the applications of Artificial Intelligence in the Business? Read How Big Data Is Exploding and How Companies Are Changing How Revenue Streams Run: https://www.cisco.com/us-en/us-en/services/how-big-data-is-exploding-and-how-companies-are