Every day I come across an article, an interview or, in today’s case, a book that confirms what we’re doing.
Last night I was reading a book called, “The Four: The Hidden DNA of Amazon, Apple, Facebook and Google,” by Scott Galloway
To Scott, those 4 companies are the 4 Horsemen. And in chapter 8 he describes a “T Algorithm”…T standing for trillion…
“AT SOME POINT, there will be a Fifth Horseman, a company that combines a market valuation of one trillion dollars with sufficient market dominance to define its corner of the world. Or more likely, one of the Four will be replaced. Can we identify companies more likely to join this elite group?
While history may not repeat itself, it does rhyme, as Mark Twain purportedly said. Among the Four, these eight factors are prevalent: product differentiation, visionary capital, global reach, likability, vertical integration, AI, accelerant, and geography. These factors provide an algorithm, rules for what it takes to become a trillion-dollar company. In our work, we use the term T Algorithm to help firms better allocate capital.
Case Study: https://go.michaelkearse.com/fb
And then he lists the eight factors, but #6 is really important:
“6. AI (Artificial Intelligence)
The sixth factor in the T Algorithm is a company’s access to, and facility with, data. A trillion-dollar company must have technology that can learn from human input and register data algorithmically—Himalayas of data that can be fed into algorithms to improve the offering. The technology then uses mathematical optimization that, in a millisecond, not only calibrates the product to customers’ personal, immediate needs but improves the product incrementally every time a user is on the platform for other concurrent and future customers.
Marketing historically can be parsed into three major shifts regarding how potential customers were targeted. The first era was demographic targeting. Thus, white forty-five-year-old guys living in the city, in theory, will all act, smell, and sound alike, so they must all like the same products. That was the basis of most media buying.
Then, for a hot minute, it went to social targeting, in which Facebook tried to convince advertisers if two people, regardless of their demographics, “like” the same brand on Facebook, they are similar and should be grouped/targeted by those advertisers. That turned out to be total bullshit. All it meant was they all shared the action of clicking “Like” on a Facebook brand page, and that was about it—they didn’t aspire to the same products and services. Social targeting was a failure.
The new marketing is behavioral targeting. And it works: nothing can predict your future purchases like your current activities. If I’m on the Tiffany website, and I have searched for engagement rings, and I have set up an appointment to purchase such a ring at a certain boutique, that likely means I am about to get married. If I’m spending a ton of time on the Audi site configuring an A4, then I am in the market for a $30,000 to $40,000 four-door luxury sedan.
Thanks to artificial intelligence we now can track behavior at a level and scale previously unimaginable. It’s no accident when I start getting served Audi ads all over the web. Behavioral targeting is now the white meat of marketing. The ability to attach behavior to specific identities is the quiet war taking place in media.”
Read that paragraph again…and again…and ask yourself how much of what he describes we ALREADY do…all of it.
What Scott doesn’t discuss is where it’s going beyond the stuff mentioned above.
And we’re already building it.
Look forward to seeing you on the case study:
“I want you to think big…then realize you didn’t think big enough.”