Tuesday, September 27, 2016

Advertising is dead, Google, Facebook and Whatsapp in trouble - William Bao Bean

William Bao Bean
William Bao Bean
The walled gardens of Whatsapp, Facebook and Google have lost great opportunities, and now they have to face Chinese competition as Tencent and others prepare expand into the next four billion users, outside China, told Shanghai-based innovation expert William Bao Bean last week at the Next16 conference in Hamburg. (from verbatim blogging).

Next16:
Tencent had 519 product groups - essentially independent companies. It got a bad reputation for killing startups. Tencent does Not have the innovators dilemma. They are constantly killing their own businesses. WeChat is one example. They killed the competition, and then they killed QQMobile, which was part of Tencent. They're growing 52% year on year - and aren't out of China yet. 
WhatsApp had a huge opportunity - and they sold out. They could have done stickers - but they didn't. Silly. Stickers are agreat way to communicate- efficinet and fun. So, Facebook stuck them in a corner, and built Messages instead. 
We live in a Messaging world. You can buy a car or a coke, you can crowdfund or transact. Facebook started Open, but chose a media model and closed themselves. WeChat has stayed open and become a platform - mainly for social commerce. And it's something not present in the west, but which is taking the rest of the world by storm. Content is king and data is queen. You make money by showing people stuff and getting them to buy it. Your friends sell you things, not advertisers. They've built a social commerce funnel. You enter fans with great content - about 10% will engage with that daily. About 5% of them will hit the store, and then 3% will buy something. 0.45% monthly conversion every month - without you paying out to get that conversion. Advertising is dead. This is the end of Google. 
The last four billion. South East Asia. South America. Africa. They're the next market. And the want the mobile-centric, mobile-only market approach, that is counter-intuitive to us who come from desktops. The walled garden markets of the west? Dead. Think of Google Play and Google Wallet. You need a bank accounts it doesn't work in emerging markets, so you can't make money there. The top companies in emerging markets are Chinese players you've never heard of. They're winning the last four billion. This is a war for future growth. And it's a pay-to-play market. 
Everyone looks up to Zuckerberg, because he launched a great product from his dorm. But he's made it impossible to create another Zuckerberg - because he's created an ecosystem where you need money to get in. When people are taking VC money - and spending most of it on Google and Facebook ads, then VC is broken.
More at Next16.

William Bao Bean is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers´request form.

Are you looking for more innovation experts at the China Speakers Bureau? Do check out this list.

Earlier this year we discussed with William Bao Bean how mobile payments are going to hurt traditional banks and credit card companies  
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