Everyone Is A Tech Company Now.

Check out this article first on Forbes. A shorter version is posted below.

The cost of doing business in the modern age is to unleash the power of what’s possible and to make the best customer experience possible, increasingly that means perfecting not just hardware, but software.

In October 2012 Tesla noticed a problem with their Model S’s catching fire. The issue was that their vehicles were riding a little low. For any other car in the history of mankind a critically expensive product recall would result, a big news story, a lot of energy and wasted money but for Tesla a software update was beamed overnight and over the air.

In January 2015 some Tesla owners woke up to a better surprise, the inverter algorithm update increased traction in snow but also meant owners had cars that could accelerate 3%  faster. March of that year Model S drivers  were told that Autopilot and Autosteering will now be slowly added, with each system getting better at better each day as the software slowly and then rapidly learns.

This isn’t how cars are supposed to work. Surely cars are always out of date, the long lead times mean even often a new rental car lacks USB connections and astonishingly has room for a CD. We all know cars slowly degrade, they get slower, less efficient, outdated, everything gets worse over time and with use, except perhaps good jeans, posh shoes and our bodies, but even these for a limited time.

A change in mindset to products that improve.

The Tesla is not alone, each and every week I’m emailed by Amazon, to tell me what the Echo can now do this week. The echo is a extraordinary product, it sat unused and attracting dust and guilt for several months after I eager purchased it at launch. Slowly as I get better at knowing when to use it, as it gets better at understanding my voice, but most of all as companies and systems integrate within it, it’s functional capability now leaps forward rapidly.

It’s starting to spread to other products slowly, occasionally a Sonos speaker will get tweaked, my Meural Digital Art frame gets new images to show, my Google Nest should in theory learn and get more efficient, but this type of thinking is not yet prevalent.

Back in the 2000 what Apple got right above everything else was realizing that the battle for hardware was actually won by software. My Nokia N95 could do everything the first generations of iPhones could do, several years before, but it was a lousy experience, endless clicking, giving permissions, pressing OK, even just to zoom into or share a perfectly taken 8 Megapixel image. What made the iPod better than thousands of MP3 players that lay before was the iTunes interface and the ease of doing things we’d never tried before, downloading, synching, playlists, a whole tranche of new behaviors we needed to be gently introduced to.

Design is Hardware, Software and Services together.

Such advanced thinking is sadly not common. My microwave still has 36 buttons, most of which are destined never to be used, my TV set top box menu is an exercise in Kafkaesque complexity, my thermostat took 104 button presses to program and every remote control I’ve ever seen makes me want to cry.

When we endlessly praise Uber for reinventing Taxi’s, Nest for getting Thermostats work, Apple for the iPod, what we’re really seeing is customer centric thinking, smart design and software coming together. From the success and incredible valuations of companies like this that get it, you can see that money is to be made from the application of software to hardware, it’s this software that creates a powerful experience and it’s these experiences where the profit margin is made.

In business the most powerful way to make money is your ability to command a premium. From Phillips hue, to Withing’s scales, to Sonos sound systems, to Buzzi smartplugs, we’re seeing “smart” becoming incredibly profitable. A $10 scale with some connectivity built in and a slick app selling for $149.  Apple with the iPod sold a personal gateway to music, far more profitable than a music player, Withing’s sells access to your digital health, Buzzi sells access to smarthomes, not plugs. 

Customer centric design is your USP.

So here’s a thought for 2017, whatever your company does, forget what it makes and think about the entire customer experience?

If you’re an Airline, you could either spend Millions on advertising and or Millions on promotions, or you could consider ways to use software and experience design to make your Airline meaningfully better to fly with via Software. Tell me when the flight is boarding, tell me when it's delayed immediately, guide me through the airport, alert me to the shortest security line and manage my expectations.

If you’re a bank, why not become the gateway between me and my money, include software to make managing my money, help me keep digital receipts, why not have the most wonderful apps and websites possible.

If you're a gym, recognise I'm not there to work out, I'm there to be healthy. You're $5,000 treadmills have amazing hardware but awful software. Make tracking my fitness easy, help me choose sensible meals, make money from me in many other ways by offering me more services to help my goals. Why does no posh gym have an app that acts like a Fitness pal?

If you're a car maker, what if the entire lifecycle of car ownership was improved, what if the car self diagnosed issues in advance and booked services for me, what if the dashboard brought me special offers, would learn my behavior an offer routes. If Nest was for cars, what would it look like.

I now choose Zipcar over Hertz 24/7 because while the car is further away, I can change my booking with a text message. I chose Chiltern railways over a bus because the Wi-Fi is free and fast, I just spent $500 on thermostats I don’t need, because the act of programming the old one caused anger in every sinew of my body. I choose certain online retailers in the USA only because buying takes fewer clicks. I’ll chose others in the UK, because they offer accurate delivery windows and the couriers location at any time.

Maybe I’m a weirdo or maybe this is life in the modern age, from airlines to Hotels, Car rental to Retail, we need to think of products as the combined efforts of software, systems, hardware and increasingly the latter is least important.