The DISRUPTION of Brands

I believe the world of "brands" will be DISRUPTED in the near future.  

FIrst - why does it matter? Brands are and will always be a super effective and quick way to communicate at a very deep psychological level the complex set of benefits for products and services.

in the past, institutions and big celebrities were brands as it cost a lot of money to create and distribute the messages - over and over.  

Now and in the future - in a world of bIllions of connected consumers ( especially anytime, anywhere via their mobile device) - with each person having the same social "megaphones" to their networks - INDIVIDUALS will be the brands - bypassing institutions.

We see this in Entertainment and News with new youtube and twitter celebrities like kim kardashian, and bloggers like arrington - where his following is migrating from techcrunch to his personal blog.

but there's more coming.....

In Books, publishers have had significant control given the costs of marketing and publishing.  The combination of e-book distribution and social media is enabling the author to be the brand and market directly using new platforms from Amazon and new startups like Byliner. 

In Education, the top professors in each subject will be the brand - we''ll listen to their TED Talks and lectures for free and sign up directly for their classes to earn degree credits. The brands of colleges and universities will be disrupted.

In products/manufacturing - a consumer will visit an open source design database and enter your requirements for exactly the product you want - say an ipod holder using certain material, with certain weight and color - and then seek out the best 3D Printer operator to buy it (check out Shapeways.com).  The manufacturer brand can simply be a person - from any country.

In commerce - the new products rolling off the factory floor AND the ones we own will be tagged and connected to the cloud making their presence and condition known.  When you want to buy something, you'll search and find a PERSON, make an offer, and buy or rent from them if they have a good brand as a seller (e.g. reputation).  Retail brands as we know it will be less important.

In my final example  - healthcare - we will see individual doctors and practicioners become the brand.  Thru telemedicine, you will seek out the doctor who is the BEST for your condition, not simply stand in line to be treated at a brand of today such as the Mayo Clinic.

This presents an exciting future and a very practical benefit of social media - it will level the playing field like nothing before.  Only the best providers will survive - and institutions will go head to head with individuals.  As an individual striving to create a brand in venture capital, I too am EXCITED for this future ; )

Comments

[John Funk]

I think you're onto something important here Raj.

I might posit that what you're seeing is the enabling of the long tail of brands. And, further, the enablement of someone to move from the long tail into the fat head (left head?) using new/social media rather than traditional media.

This is indeed exciting as friction is reduced around new brand creation and those new brands can create value quickly.

But, recognize the downside of this as well - the half-life of a brand just got shorter. It will be that much harder to maintain a brand given the lower switching costs, the more transparent existence of new/alternate brands, etc.

We've all see the hot turn into the not-so-hot very quickly... Inertia and brand creation friction is bad when you're climbing the ladder up as it makes the journey harder; but once you're there, the "value" is projectable because it's hard for others to unseat you. Now, in your new world, the ability to project brand value forward to many years in the future just got that much more risky. I wonder if that creates a lower NPV given the preponderance of the terminal value in any NPV calculation....

[Rajil]

great point John - i tend to agree with you that brands will be "less stable" in this new world - both for individuals as well as institutions

[Ashmeet Sidana]

Insightful and intriguing post, Raj. I enjoyed it.

What about brands for complex products? For example, cars or jet engines. Will BMW always communicate something distinctive from a HONDA? Will you need to be a GE or a Rolls Royce to sell jet-engines to commercial aircraft?

[Rajil]

Good point - I think complex product brands are harder to disrupt than those describing products or services that can simply be delivered by an individual (e.g. education, entertainment, healthcare).

Specifically in products, 3D printing works well for single material, continuous shape products - that clearly doesn't cover every consumer product. However, I think even that technology will evolve to handle more and more complex products and empower an individual to manufacture parts they need vs importing from a manufacturer - perhaps at a cost lower than overseas since the labor input will be close to zero!

[Rajil]

Joi Ito (friend and director of the MIT Media Lab) is big proponent of many other industries undergoing a similar disruption as information/communications because technology/internet becomes embedded in all those systems. I encourage you to check him out. http://www.media.mit.edu/people/joi

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