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Digital Will Drive The Next Decade of Business Growth (Thinks Out Loud Episode 308)

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All kinds of big news in the past week, Big Thinkers. The tech giants all posted huge earnings. Then we got news about a vaccine for COVID-19. Does a vaccine mean things are going back to normal? Nope. No way. In fact, the first piece of news illustrates why digital will drive the next decade of business growth. And it illustrates why you’ve got to get on board.

The latest episode of Thinks Out Loud looks at how why digital will drive the next decade of business growth and why there’s no going back to where we were before the pandemic.

Want to learn more? Here are the show notes for you.

Thinks Out Loud Episode 308: Digital Will Drive The Next Decade of Business Growth Headlines and Show Notes

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Past Insights from Tim Peter Thinks

You might also want to check out these slides I had the pleasure of presenting recently about the key trends shaping marketing in the next year. Here are the slides for your reference:

Technical Details for Thinks Out Loud

Recorded using a Heil PR-40 Dynamic Studio Recording Mic and a Focusrite Scarlett 4i4 (3rd Gen) USB Audio Interface into Logic Pro X for the Mac.

Running time: 18m 57s

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Transcript: Digital Will Drive The Next Decade of Business Growth

Well, hello again, everyone, and welcome back to Thinks Out Loud, your source for all the digital marketing expertise your business needs. My name is Tim Peter. This is episode 308 of the big show, and I am so thrilled you are here today. I think we’ve got a really cool show, lots and lots and lots to talk about.

COVID-19 Vaccine Announcement

There was some huge, huge news that came out just today. I’m recording this on Monday, November 9th, and the news came out that a couple of different vaccines against COVID that are in testing have performed exceedingly well. Which this is about as good a bit of news as we could possibly get our hands on, because it means that there’s a little bit of light, there’s a little bit of hope, a little bit of a glow in this otherwise fairly dark tunnel we’ve been in for the last six months, seven months.

So that’s really, really, really good news. Now, the downside of that is, at least from what I’m reading, — and this is changing minute by minute, so this could all prove to be not quite right tomorrow by the time you’re hearing this —and that is that if all goes well, we’re probably going to see the vaccine be available to people in the United States in volume maybe Q2 of next year, Q2 of 2021. So we’ve still got another five or six months easily before we start to see meaningful progress. And obviously that assumes everything goes well. If things don’t go well, then who knows where we’re going to be? And maybe if things go super well, we’re there a little bit faster, but we’re still looking at three, four, five months easy. We still need to get through this winter.

So it’s very good news that definitely is a cloud with a silver lining. Don’t misunderstand, I’m very happy about this. And also, it’s not something that’s going to change everything tomorrow.

Tech Company Earnings

I want to build on this with the other big news to have come out in the last couple of weeks, which is that people in the Frightful Five, the AGFAM set, Apple, Google, Facebook, Amazon, Microsoft, et cetera, have all released their quarterly earnings for Q3 of the year. For some of them, it was fiscal quarter one of their 2021 fiscal year, but you get the idea. It was the most recent quarterly earnings. And the numbers were massive, I mean, just absolutely huge as huge can be.

Frightful Five Earnings

  • Amazon had a 37% increase in revenue, 29% growth in Amazon Web Services, 33% growth in subscriptions, 51% growth in what they call other, which is primarily online advertising, and 200% growth in earnings, so they tripled their earnings.
  • Google’s revenues were up 20%.
  • Facebook’s revenues were up 22%.
  • Apple saw significant revenue growth, despite the fact that their new phones didn’t come out until the end of the quarter.
  • And Microsoft, their earnings were only up 12%, but their cloud offering was up 31% year-on-year.

Now, my point in all this is not to talk about the stock market. I don’t really pay that much attention to the stock market on a day-in, day-out basis, and clearly none of this is meant as investing advice, so hang on to that for now.

Why Digital Drives the Next Decade of Growth

But the CEO of Microsoft had a really amazing quote. Satya Nadella is as smart as anyone running any of these companies, and he said during the earnings call that “The next decade of economic performance for every business will be defined by the speed of their digital transformation.” I want to say that again, because this is huge. He said “The next decade of economic performance for every business will be defined by the speed of their digital transformation.”

Microsoft gave me the title of an episode at the start of the pandemic when they said, "We’ve seen two years of digital transformation in two months," and now they’ve given us another episode title. Because now it’s the next decade of economic performance is defined by the speed of digital transformation. It reminds me very much of Mark Benioff of Salesforce.com, who said a long time ago, two, three years ago, I will link to a blog post I mentioned at the time, where he said, "Speed is the new currency of business."

Digital Driving Growth for All Businesses

And here’s where this gets really cool, because it’s not just the Frightful Five. It’s not just the big guys. Shopify, which is an e-commerce platform for small businesses and mid-size businesses and even some large enterprises that they use to sell things online, their revenue for the quarter more than doubled. Their merchant solutions revenue, so that is the revenue they collect as a transaction fee on stuff sold through their platform, grew 132%. Gross merchandise volume, the amount sold on Shopify storefronts, more than doubled. Billions of dollars, $16 billion growth in the quarter. That’s insane. And again, it speaks to that Satya Nadella quote. People who are doing well are doing it by transforming quickly.

Is This the Death of Zoom?

Now, here’s the crazy part of this from my perspective. Stocks in companies like Zoom and Peloton today fell, because of news of the vaccine. And again, don’t get me wrong, getting the vaccine is an objectively good thing, and clearly investors are reading into this that we’re not going to need exercise bikes that are connected to the internet in our homes, or we’re not going to need Zoom, and we’re not going to need video conferencing.

And I will be thrilled when people return to activities like travel and face-to-face meetings once we have a vaccine. Believe me, no one will be happier than me. A huge chunk of my business depends on people in the travel industry. But, and this is a huge "but," we’re not going back to the way we used to do things. Never. Never. I will say it right now.

Clearly, first we’ve got to get to Q2 2021, at which point we’ll have lived with the new normal, and you know how much I hate that phrase, for a year, for a year.

We Are Never “Going Back to Normal”

We’re not going back to the old way of doing things. Companies have seen that many commutes were stupid, many business trips were stupid, many meetings were stupid. Hiring talent in just one town or just one city or just one state or just one region makes no sense. Having people commute for an hour or more each day, every day makes no sense. Customers and businesses switched to digital, because circumstances made them. And undoubtedly, there are elements that we are finding don’t work remotely. People crave human connection. That’s what I was talking about last week.

Yes, there are things that are unquestionably better in person. Yes, many, if not most, people are desperate to get out and explore their world again. That is, again, objectively a good thing, but it doesn’t mean we’re going to go back to eight hours a day, five days a week, 50 weeks out of the year, with everyone in the same building again. That’s just not going to happen, because as much as we may hate social distancing, as much as we may miss our friends and our family and our coworkers and our colleagues, we’ve also found how effective we can be remotely.

Customer Behaviors are Changing… Permanently

And for the last seven months and for the next four or five or six or seven to come, your customers are learning behaviors that are going to stay with them for a long time.

Now, hear me out on this. I’m not going to tell you nobody’s going back into the office. I’m not saying that. And clearly there are lots of jobs that require you to be in a place where the work is tied to a place, factories and hospitals and hotels, restaurants, bars, warehouses. Those are all going to go back to normal. In many of them, thank God, those people have continued to stay on the job through this whole experience. So don’t misunderstand.

But there’s probably about a third of jobs, I’m looking at Bureau of Labor Statistics data, there’s probably about a third of jobs, so there’s 163 million people work today, according to the Bureau of Labor Statistics, and that number is going to grow by maybe four-tenths of a point, a half a percent in the next 10 years. And maybe a third of those jobs, that’s maybe 50 to 55 million jobs, can exist anywhere.

Now, I’m not suggesting all of them will exist anywhere. Lots of them will go back in the office. But if 10% didn’t, if maybe a half of that third, so 15%, can work from anywhere and they do, think about the change that will make for our economy. Think about the change it will make for your customers’ lives.

Trillions of Dollars of Difference

You know, let’s approach it a different way, come at it a completely different way. The US economy is roughly $20 trillion, and if even 5% of it shifts permanently, that’s a massive number. And if it’s 10% or 15%, think about the world we’re going to live in.

Do you really think that’s not going to kind of stay what we’ve been living with? Do you really think that what we’ve seen is purely temporary and everything goes back? Or do you think it’s more likely that we’ve been living through this change slowly for the last five to 10 to 15 to 20 years, and it’s been accelerated during the pandemic to where we will be in the longer run?

Digital is a Global Phenomenon

And this is going to be true all around the world. This is not just a US thing. This is the world we live in now. We live in the future, as I said several weeks ago. And that’s why Satya Nadella’s point that the next decade of economic performance for every business will be defined by the speed of their digital transformation is so important, because what we’re living with today, what we’re living with right now, what we’ve been living with for the last six or seven months, is what we will be living with for the next six or seven years or more. There’s no going back.

Some Things Won’t Change — But Many Already Have

And again, it doesn’t mean that nothing goes back to normal. It doesn’t mean that people can’t wait to go back into a cinema or can’t wait to go see a concert or can’t wait to go on a vacation or can’t wait to go on a cruise or can’t wait to hang out in a bar. For sure. And it definitely doesn’t mean that people won’t get together in meeting rooms and won’t have conferences. Of course they will. I cannot wait for that to occur. It would also be just, I think, completely off base to assume that everything goes back to what it was on January 1st of 2020. That is simply not plausible.

And that’s why I’m talking about, well, talking, that’s why I’m ranting and raving about this today, because your success, your future, where you and your business will be three years down the road and five years down the road and 10 years down the road will be defined by what you do right now. And I’ve been talking about this all through the pandemic, but digital transformation is now. What you need to do has to happen today.

Why Digital Drives the Next Decade

You know, I’m very fond of quoting the Jeff Bezos line that says, "We always talk about the things that will change in the future, and we don’t ask enough about what won’t change." Well, what won’t change here are the behaviors we’re seeing people adopt. Your customers are getting very comfortable using digital for the things they want to use digital for. We’ve seen that trend over the last two decades. There is absolutely no way we’re going to 180 on this, and so you need to be thinking about and acting as if you live in the future, because you do. And your success the next decade, the economic performance for your business, will be defined by the speed of your digital transformation. And I don’t know about the stock market, but I feel pretty comfortable saying you can take that to the bank.

Show Conclusion and Credits

Now, looking at the clock on the wall, we are out of time for this week, but I want to remind you that you can find the show notes for today’s episode, as well as an archive of all past episodes, by going to timpeter.com/podcast. Again, that’s timpeter.com/podcast. Just look for episode 308. You can also subscribe in of the episodes that you find there to have Thinks Out Loud delivered to your favorite podcatcher every single week.

Where to Find the Podcast

You can also find Thinks Out Loud on Apple Podcasts, Google Podcasts, Spotify, Stitcher Radio, Overcast, wherever fine podcasts are found. Just do a search for Thinks Out Loud, Tim Peter Thinks Out Loud, or Tim Peter Thinks. We should show up for any of those.

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Thinks Out Loud on Social Media

You can also find Thinks Out Loud on Facebook by going to facebook.com/TimPeterAssociates. On LinkedIn by going to linkedin.com/TimPeterAssociates. And you can find me on Twitter using the Twitter handle @TCPeter. Of course, you can also email me by sending an email to podcast@timpeter.com. Again, that’s podcast@timpeter.com.

Sponsor Message

I’d also like to thank our sponsor, SoloSegment, for continuing to sponsor the show. I have a close relationship with them. SoloSegment is a very, very, very cool product. SoloSegment uses machine learning, natural language processing, and anonymous behavioral data to connect your website visitors, the customers on your site, with the content they need to help them accomplish their goals, which then helps you accomplish yours. SoloSegment does this in a way that protects privacy for your site visitors. They understand that most of the people who come to your site think that you don’t know who they are and would rather that be the case, so SoloSegment uses anonymous behavioral data to create website personalization experiences that work both for the customer and for you. I strongly recommend you check them out. You can learn more at solosegment.com. Again, that’s solosegment.com.

Show Outro

With that, I want to say again how much I appreciate you tuning in today, how much I appreciate you listening every single week. It means so much to me. And I know there’s a lot going on to the world. Even with the good news we’ve had today, it’s been a crazy week, so I really do appreciate the fact that you’ve taken some time out of your day to listen. I hope you stay well, I hope you stay healthy, I hope you stay safe, and I hope you stay prosperous. I hope you have a great rest of the week. I hope you have a wonderful weekend, and I will look forward to talking with you here on Thinks Out Loud next time. Until then, please be well, be safe, and as ever, take care, everybody.

Tim Peter is the founder and president of Tim Peter & Associates. You can learn more about our company's strategy and digital marketing consulting services here or about Tim here.

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