Influencing People on Their Mobile Devices

This is a summary of an article I compiled, together with an infographic, on the growth in ability to influence people at a point of purchase decision, while on their mobile device.

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In an effort to convert audiences to customers, brands are beginning to hold mobile-native approaches as a standard requirement in their marketing efforts. As mobile phones remain a extension of the human limb, influencing consumers when they reach a point of consideration is key to driving sales. Mobile approaches ensure that conversions are made, both online and off.

According to recent Google research, consumers will use their mobiles to seek out advice before making purchases 69% of the time. This advice could be in the form of comments from peers they trust, or online reviews. In 76% of these cases, these consumers will go on to visit a brick and mortar store on the same day, and 82% of these visits will result in a sale.

The path to purchase for a consumer begins when they are made aware of their awareness of a brand’s product or service. This funnels through to consideration, purchasing the product or service, and then converting from a loyal customer into an advocate. Investing a brand’s marketing budget into where their audience spends most of its time (on mobiles) lead to shortening the path to purchase, and leading to quicker conversions

The challenge for brands is that audiences see through the often sugar-coated brand messages. The best way to growth hack credibility and spark authentic conversation is to engage social influencers and creators to travel a brand’s message to the audience.

A leading influencer marketing platform, Webfluential, recently shared its top search categories for Q3 2016, highlighting lifestyle, fashion and beauty were the market verticals that brands most sought to influence through trusted peers and digital creators.

In summary, the infographic below captures the shift towards mobile, and how brands can leverage influencers on a consumer’s favourite social channel to help drive engagement, and ultimately, sales and long term advocacy.

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Stock Picks – 2017

During the festive season, I review my year and how I chose to allocate my time, effort and capital, and then decide what to change in the coming year. For the first time in a long time, a forward looking view of what I think might happen in the markets over the coming year, is a very hard thing to do. Brexit, Trump, European political instability and locally, a president doing everything he can to stay out of prison makes 2016 a true annus horribilis. 

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In January, I proposed the Emerging Millennial Portfolio with stock picks of Facebook, Amazon, Tesla, Google, Netflix, Nike, Apple, Twitter (acronym: FAT GNNAT). The reasoning behind this was the likelihood that the US would increase rates (which it did) and that SA would be fighting off the ratings agencies to avoid a downgrade (which it narrowly missed). But the favouring of technology stocks within this theme was in light of the fact that the world is discounting the disruption factor that these businesses have, and will continue to do.

I pitched that LinkedIn and Twitter would be acquired. LinkedIn was, by Microsoft. Twitter came close, but no cigar. Apple didnt buy Tesla as I had hoped, and interestingly Samsung has acquired Harman for $8bn, so the next few years will see tech companies fighting it out in the car market, and not just in the phone market.

So how did the investments fare? The benchmarks of the South African All Share and the S&P 500 were -6.4% (in ZAR) and +10.8% (in USD) respectively while FATGNATT returned +7.6% (in USD). The Rand strengthened nearly 10% over the year, so all things being equal in USD the three ranked as follows:

  • JSE ALSI +3.1%
  • FATGNATT +7.6%
  • S&P 500 +10.7%

Here’s the per share annual return given graphically. Assuming an even weighting of the chosen stocks, Twitter had such a dismal year that it took the portfolio down a full 4%.

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So what lies in wait for 2017? To be honest, I’m nervous to ponder this, let alone put it in writing. The world is changing so quickly, it’s difficult to identify trends and how long they’ll stay intact before some technology startup comes to disrupt them. Trump’s policies and potential tax cuts are likely to see the DJIA powering stronger with it’s banking stocks benefitting from those policies and 3 hikes of the interest rate. Backing the businesses best positioned to capitalise on opportunities and that are nimble enough to move quickly are the best bet in my view. Shorter runways and increased future uncertainty will mean reductions in valuation, so equity returns for the coming year are not looking like they’ll shoot the lights out, with the US less likely to outperform than other places in the world.

With these themes in mind, what I’ll have in my portfolio for the coming year is less diversity, more concentration:

  • Amazon (In this festive season, they shipped 1 billion parcels. In addition, as IoT grows, their AWS offering is perfect to capitalise on these connected devices)
  • Netflix (Although still pricey, their deal with Disney will reduce their content costs and increase appeal to a youth consumer market)
  • Nike (a laggard in 2016, but providing a cheap entry point to hold value for the year)
  • Some cash to wait for opportunities that rear their heads, or to wait out the market until some sanity prevails (if that ever happens!).

The bottom line is that change is coming, faster than ever considered possible. People typically have mindsets for stability and a fixed view of the world. It’s these mindsets that are going to be put to the test in the coming years, and their ability to adapt will see them either thriving in an innovative and fast paced world, or stretchered off the field, miserable as protesters who never thought Brexit or Trump could happen, but didn’t turn up on voting day to make a difference.

 

 

 

Work hard, dream big

I was recently interviewed for an article in an airline inflight magazine. Here’s the copy of the article which focusses on the trip that I went on to Silicon Valley.

hardworkimageMurray is an entrepreneurial and commercial thinker with a track record of growing innovative technology businesses. Murray holds a Ph.D in biomedical engineering and has four years of experience as a corporate financier.  He cofounded a business the develops polymer heart valve replacements, a digital agency and recently an influencer marketing platform.

Webfluential was started to address market demand for access to digital influencers and their audiences so that brands and consumers can interact on the web. The platform has grown globally, providing access to brands for over 10,000 influencers, with a combined digital audience of over 350 million people.

SA Cardiosynthetics is a venture business looking to develop and one day commercialise a polymer heart valve replacement designed for emerging market patients. Rheumatic Fever causes valve disease in over 500,000 people annually that goes untreated because no product is currently available. Murray and his surgeon co-founder are working on addressing this need.

1.     A unicorn is a start-up worth $1-billion or more. What is your take on the potential for African unicorns?

Africa contributes about 2.4% of the global GDP. So as a player on the global stage, any business starting in Africa will reach a ceiling in terms of its capabilities on our continent. However, there’s nothing stopping applicability of locally grown businesses expanding into countries outside of Africa, the key is being able to understand what the world needs, and address that need appropriately and at scale.

We’ve seen SAB recently in a trillion Rand deal, let alone a billion. Yet that business was founded 120 years ago. Reaching a billion dollar valuation for the sake of it shouldn’t be a goal, in my opinion. There are some great businesses that are worth a fraction of that but provide all the right experience to local entrepreneurs in learning about their product-market fit, working with technology and people and not worrying about valuation.

I think there’s potential to be an African unicorn in the next five years, but it either has to be as a result of funding rounds where investors are happy to pay  around R150m for 1% of a company or likely to show revenues in a year of R3bn.

2.     What do you think it takes for people to take the leap from being entrepreneurial to being fully-fledged entrepreneurs?

South Africans are inherently entrepreneurial at heart. The local market has it’s own dynamics and business people here are great at spotting opportunities and capitalising on these, but often more than likely from a corporate perspective. It’s rare that entrepreneurs, the people who are willing to burn their ships and invest every bit of their own money into their venture, take the leap and commit to a career as an entrepreneur.

Entrepreneurship is much harder work and far riskier than working for a corporate. My personal opinion is that we’ll see two sources of entrepreneurs, the first from the informal sector where unemployment necessitates such a move, and the second is where experienced businessmen leave their salaries and capitalise on opportunities that excite them and have some capital tucked away to tide them over.

Our ecosystem of angel investors, venture capitalists and established technology businesses needs a few more years to establish itself, and then I think we’ll see a lot more leaps of faith happening.

3.     You were one of 22 South African entrepreneurs sent by Investec and En-novate to Silicon Valley in the US. What were your 4 key takeaways from that experience?

Seeing and speaking to the entrepreneurs there – the daily challenges that they face and the small wins that they celebrate, their degree of ambition and the skills and grit of their teams, all make me believe that we as South Africans have what it takes to make brilliant businesses ourselves. So much content and hype exists around the “untouchable” Silicon Valley entrepreneurs, but if we really got our minds focussed we’re not far behind them.

Something the entrepreneurs there take very seriously is the feedback from their customers on how they use their products. Empathy as a part of the creative product process is crucial to finding product-market fit. Assuming that your product will be adopted the world over without asking a lot of questions from the people who use it is a total misnomer.

So much effort is put into believing in their mission as entrepreneurs. People really believe that they can put a dent in the universe – even in their daily tasks and live and breathe their company mission. We met with Google Maps team – they are 100 people big spread across the whole world. But they’ve been able to do all of what maps offers (including the project of Streetview and public transport system integration) because each one of those 100 people believes that their work makes the world a better place.

They set 10X goals. Whether it’s user numbers, page views, revenue or profits, each company we spoke to had a target of what they were working on to scale 10 times within a year. Many have electronic dashboards in the office to track these, how they’re broken down into 1-week metrics and if they’re ahead or behind.

4.     Please speak about the opportunities afforded by the digital revolution and how technology is changing the business landscape, using Webfluential as an example of a success story.

If there’s a book to read that looks into the future and maps out the possibilities of the impact of technology, it’s The Rise of the Robots, by Martin Ford. In it, he outlines how it’s more white-collared worker, than blue-collared, that should be concerned about the effect of technology.

Artificial Intelligence is going to be the biggest theme of our generation, and it will be used in all sorts of interesting ways that we haven’t even considered. I attended a talk by the head of IBM Watson, where he gave an example of the use of AI in cancer research. They’ve fed in all the literature on cancer as well as patient files from around the world, and the insights about early detection and treatment are just remarkable. Google also recently handed over the running of all its data centers from staff to Deep Mind, it’s AI engine. Within the first month, the technology saved 15% of the energy bill.

In our influencer marketplace called Webfluential, we’re excited about all the new earnings channels we’ve created for people and the commensurate value we’ve created for brands who now have an additional method to reach an audience. On our platform, we’ve been able to reduce the degrees of separation from micro-publisher or celebrity to a brand, and automate the performance tracking of digital content.

It’s great for us to see the medium of communication changing from a uni-directional “spray and pray” approach of television and radio to an intimate conversation on platforms you heard about less than a year ago (like Snapchat).

5.     How will the polymer heart valve you have designed be applicable to emerging markets? And do you see the 3D printer being useful in its replication?

Much of the innovation around heart valve disease happening in the 1960’s and 70’s and only really considered patients in the developed parts of the world who tended to be the elderly. Solutions required easy access to medication and the product only had to last or decade or so, outliving the patient. We now see valve disease in younger patients in the emerging parts of the world, and thus need to make a product that is biocompatible, has a very long fatigue life and not require ongoing medication. A real tall order, but we think we’re in with a shot.

From a production perspective, 3D printing is becoming very cheap and accessible. We worked with Boeing in Gloucester and their 3D lab, being able to print parts for us in metal and to very high tolerances. I definitely think 3D printing will be a big technology industry.

6.     At the beginning of each year you make stock market selections – how are your stock picks for 2016 faring?

Every year I try and take a stab at the playing out of the sectors where technological advances give companies a key advantage over the market with respect to their growth, and their competitors who are found on the back foot. This year my selection was the FAT GNNAT (Facebook, Amazon, Twitter, Google, Netflix, Nike, Apple and Tesla).

Facebook, Amazon, Google and Tesla have all made great headlines and delivered results ahead of market expectations, even during what has been some volatile times with Brexit, the oil price and the change in strength of the Dollar. Apple, Twitter and Netflix have found themselves in the growth doldrums, not growing as quickly as initially planned, or losing out to competitor offerings.

In the year to date, the S&P500 has appreciated 6.8% in US dollar terms, and my portfolio has grown by 7.2%, so not a bad result so far, although if after risk adjusted returns, the S&P would probably be the winner.

7.     You “like building incredible things” and were one of GQ’s best dressed men in 2014; you are an athlete, an inventor, an investment banker, a fly fisherman, a mountain bike enthusiast, a motivational speaker and mentor. Do you have any vices?

That’s very kind of you to mention the good, but I’m sure it’s perfectly balanced with a lot of vices! I think from a values and upbringing perspective, a key lesson that my folks taught me was that if you’re going to do something, do it well. There’s little reward in doing what you know you can do, so rather try and stretch yourself, and those around you a little. It’s uncomfortable, but through the process you expand as a human ever so slightly. The compound effect after years of diligence does pay some dividends.

I have weak points in wanting to take control of projects, and prioritising work over social engagements. This leads me to believe that I’m always right, which I certainly am not, and that socially I’m a bit awkward.

8.     If you were to advise anyone on starting up their own business, would you add anything to “work hard, dream big”?

Maintaining a great work ethic and chasing your dreams I think could be a reasonable motto for someone in their life; it’s certainly mine. People tend to get caught up in the human race, believing that they can only go Faster, Higher, Stronger, and sometimes take for granted that the challenge in work is the reward, not the financial or fame aspects that often come with it.

Through our lifetime, the disruptive effect of technology will rip apart normality as we know it. People will be replaced, companies will fall from grace, careers will become obsolete. If I had more advice to give, it would be being humble, because sometimes you’re ahead, sometimes you’re behind, and you’ll always need a favour or have reason to deliver on one.

 

 

 

 

 


You don’t know what you don’t know

Every day I’m reminded of the stark reality of how much I don’t know. I make it my mission in life to try and understand how things work, why they do what they do, but keep coming up short. It’s fortunate that I enjoy learning, so my lack of knowledge is satiated when I learn.

There’s something called the illusion of explanatory depth, where people believe that they know more than they actually do. People mistake their ability to recognize the logical operation of something with their ability to understand and explain it. Then there’s the things we don’t know until we discover them, the unknown unknowns. Donald Rumsfeld said, “reports that say that something hasn’t happened are always interesting to me, because as we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns — the ones we don’t know we don’t know.”

risk-taker

Running your own business has a lot of these two aspects, the belief in yourself that you know more than you actually do, and the stark reality of having to deal with unknown unknowns when they make themselves known. Through some very hard lessons, some of which I highlighted in my recent talk at Leaderex on failure, my reality is to focus my time and effort on the things I can influence. For those that I can’t, other people or services need to come into play.

A fitting example is King Price and the role that they play in business insurance. Last week we had the unfortunate incident of a staff member’s car being broken into, her laptop and other goods stolen, and for the days thereafter, lost all mental peace of mind and productivity while trying to get her life back in order. Having a professional business insurer on hand to assist in a scenario like this is well worth it. King Price is known best for its decreasing car insurance premiums and activity in the short term retail insurance space. It now plays a wider role in the business insurance arena.

Uncertainty Management theory was introduced by William B. Gudykunst to define how humans effectively communicate based on their balance of anxiety and uncertainty in social situations. The principle of a Black Swan event, a random and unexpected occurrence that deviated well beyond usual expectations, as things we should we aware might happen, but put the measures in place to ensure that if they do, the consequences are limited losses to us and our businesses.

As a friend once said when asked what advice he’d give to millenials today, “Experiment, learn and live, but make sure you suffer only small losses, and you’ll come out okay.”

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Talking about failure at Leaderex

Murray Legg Leaderex

Stock picks for 2016

For the last few years I’ve been sharing my take on the stock market and my investment thesis in the listed space. Last year, I made some predictions that were sound, and others that were off the mark. The slide in the Rand made me look like a superstar, though, with my portfolio up 46% in ZAR (JSE Alsi did 2.1%) and 15% in USD (S&P500 did +0.1%).

What I got right:

  • The reality of South Africa’s move away from its reliance on resource exports towards uncompetitive services as well as inefficiencies in government will subdue returns for listed companies operating in SA – Need I say more
  • The US, on the other hand, is where I feel the action will happen. Interest rates will rise towards the end of the year, increasing demand for the dollar, strengthening the currency – The dollar was one of the best performing currencies this year
  • My calls buying Naspers (+45% in ZAR), Novo Nordisk (34% in USD), Alphabet (+40% in USD), Tesla (+1% in USD) and Airbus (+52% in USD)

What I got wrong:

  • Europe and Russia will tick along with very little excitement – Grexit, Russia-Syria and Volkswagen. Cough!
  • My purchases of Apple (-3.62% in USD) and Alibaba (-20.22% in USD)

Through the course of the year, I evolved my “Futurist Portfolio” into a “Emerging Millenial Portfolio” based on the 20 something that’s now starting to spend their own, and their company’s money on Facebook, Google, Apple, Nike, Netflix and Visa. Goldman Sachs recently came out with an investment thesis called FANG NOSH – I called 5 out of the 8. Not bad.

unicorn

For 2016, I remain of the view that dollar denominated shares are where you should put your money. With SA bordering onto a junk status downgrade, the US increasing interest rates and South Africa showing a laissez fair approach to it’s financial policy and governance, why should you take the risk of holding rands? Don’t complain on Facebook, buy Facebook shares.

Running a digital business gives me the perspective to see how technology, and the low cost of the assets that produce revenue, together with the market’s unclear understanding of just how effective digital is in a marketing, sales and BI environment, there’s an opportunity to profit off of that mismatch. In our Webfluential business alone, we’ve grown to 27 people and taken 5% of the SA online advertising market cap1, in one year. For those that look back at the gold rush in South Africa and wish they could cash in on it, the current gold rush is technology. There are a lot of businesses that don’t solve a market need, but the ones that do, become massive very quickly. Uber, Airbnb and this list of Fortune’s unicorns are testament to that fact.

For 2016, my share picks would be:

  • Core holdings in Facebook, Amazon, Tesla, Google, Netflix, Nike, Apple, Twitter (acronym: FAT GNNAT)
  • SA holdings in Naspers (although selling down over the course of the year) and building a position in Discovery
  • Opportunistic trades in Twitter and LinkedIn. I think Google will buy Twitter in defence of advertisers spending less on Google and more on FB
  • I think Apple will buy Tesla and turn Elon Musk into the next Steve Jobs and possibly take SpaceX public

In general though, my advice to young South Africans would be to take as much money as possible offshore and hold it in dollars, gear up on your house and car and find a job in a multinational, or start a technology business.

Good luck out there!

[1] New PWC report with IAB (Interactive Advertising Bureau) published in the FM on Dec 17th.

Murray is an entrepreneur, focusing on the commercialisation of a heart valve and has interests in the digital media industry including Webfluential and 10thStreet Media. He worked as an investment banker for four years and bought his first shares when he was just 15.

Danny MacAskill skills

Having been to Gran Canaria a few years ago, this is the last thing I’d imagine someone would do.. on their bike.

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Hard Work has its Rewards

The last few weeks has provided an opportunity for me to spend time with young and aspirational people, more than I usually do. For the last few years, near the end of the year we’ve upped the number of interviews we do as some of the best of the South African youth come into the job market, having completed their courses or degrees and are looking at prospects.

Belief

Through early experiences interviewing student tutors for Penguin Tutoring, to interviews at Rand Merchant Bank, to now employing people for Webfluential, there’s a little something special that shines through in some of the youth that I’ve met. Irrespective of the degree that they’ve completed or the awards and recognition on their CV’s, sometimes you get to meet someone with absolute fire in their belly.

Most often, the common traits are that youngsters from a financially challenging upbringing but are smart and desperate to succeed, show potential beyond normal bounds. I wrote about the risk/reward dilemmas for young entrepreneurs earlier this year, where if you have no money to lose, the dedication to achieve a goal can be quite remarkable.

The story of Prof Leeuw is one such story – a young man having started his story in the village of Taung, and going to on become a globally recognized astrophysicist. The grit and drive to pursue a dream, if you’re willing to not yield to an excuse, is probable for just about anyone.

There are brands like Profmed that are also happy to acknowledge these commitments to a cause and offer medical aid cover to a select group of professionals with a four year degree. Follow this link to find out more:

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The Landscape Hunter – exhibition in Cape Town

If you’re in Cape Town, drive to Sea Point and check out Thomas Ferreira’s exhibition – a solo exhibition titled The Landscape Hunter. It’s a collection of some incredible images of landscape photography that he’s assembled from touring across the globe, including New Zealand, USA, Chile and South Africa.

The Landscape Hunter

The most appealing thing for me about the pictures is their expanse and with all the landscape they cover, give no clue that a human has ever been there to see it or spoil it. The 3m wide prints are wide enough to take up your entire field of vision, making you feel as though you’re actually in these places. I’ve bought a print of the Torres del Paine photo pictured above for my office.

Well done to Thomas! He tells me he’ll be coming to Johannesburg in late Jan/Feb too. In the meanwhile, check out his website here.

Landscape Hunter 2

 

Crowdsourcing innovation

When I worked as an investment banker, one of the insights that became clear to me very early on was that banks have transformed very quickly into technology businesses. What used to be an industry with relational managers and bank balance sheets offering very vanilla products has now become a very technology-centric industry with multiple touch points and very complex real time services served through technology.

The changes have happened, and continue to happen very quickly. With the business focusing on staying up to speed with the market and keeping it’s customers happy, it often doesn’t have the perspective or luxury to see the wood from the trees. Recently American Express has fallen on tough times for not maintaining it’s strategic relationship with Costco, for example. Add to the mix that banks often employ 10,000+ staff, which is great for momentum but severely limits their ability to be nimble and implement things quickly.

On the other side of the spectrum sits small business. Innovation and being fleet footed are almost synonymous. But scaling and operations are tough for small business. In April I wrote for Moneyweb on how the financial industry is throwing it’s hat in the innovation ring and seeing what comes of it. There is definitely a middle ground for the innovators and big business to work together if the incentives and engagement are well defined.

I was happy to see that Standard Bank has embraced this methodology in their Pathfinders Challenge that is currently underway. It’s an opportunity for techies, young professionals and entrepreneurs to pitch, demonstrate and commercialise an innovative banking solution and then get the support of Standard Bank to take it into the big leagues.

R500,000 of skin has been put in the game by Standard Bank in the form of cash, UX testing, rapid prototyping, technical support and mentorship for the winners of the Pathfinders Challenge. Winners will be flown out to the Standard Bank Incubator in Rosebank, where they will be accommodated for the duration of the execution. The competition launched on the 3rd of October and entries will close on the 6th of November at 23:59. It’s open to anybody with a solution that Standard Bank could benefit from. And likely the credibility and experience of going through a pitch process is just as valuable as the prize money.

You can read the Press Release here and follow the campaign socially on Facebook and Twitter.