Malcolm Sheil

For the first time in the 21st century, the music industry is growing. After a significant fall in value for 15 years, the RIAA announced that the music revenue in the United States has started to grow and is now valued at just over 8 Billion dollars. While still a far cry from the 21.5 Billion the industry made in the late 90’s, the growth signifies the end of a dark era in music. However, the popularization of streaming services since the early 2010’s managed to create growth in an industry that was once in its deathbed. Responsible for half of the revenue in music today, streaming platforms like Spotify, Apple Music and Pandora were trailblazers when it came to innovation in music. After almost a decade of steady growth for these platforms, one wonders when the next big change will come and what it will look like. Across the globe, entrepreneurs have already begun to develop new platforms that aim to revolutionize the industry once more.
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Ethical Streaming 
One of the biggest issues that arose with streaming platforms was the unfair division of profits. Spotify for example, uses a system that divides the total of its distributable profit proportionally to the popularity of the artist, independent of what the paying subscriber listened to. While seemingly a fair system, many niche artists claim this unjustly favours the mainstream artists of today. As a response to this, German start-up Resonate was created. Resonate is founded on a much more user-centric system, which means that artists get paid directly from the listener’s individual premium, rather than the pooling system Spotify uses. In other words, Resonate lets users purchase the song immediately or pay a much smaller fee each time the song is streamed and after the 9th stream, the song becomes theirs. Resonate goes one step further and works as a co-operative, meaning users have a say in the decisions the company makes. Put together, these two principals generate a platform that not only is fair in the way it pays artists, but also creates more than just playlists with its users’ input.
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Niche Streaming 
In the United States, the public spent an approximate 45 Billion dollars on music in 2018, ranging from albums to concert tickets and artist merchandise. Research showed that out of that public, about 14% were responsible for almost 40% of the total spending in the country. These people, the so-called music aficionados, spend more per month than anyone else in country but ironically, streaming services like Spotify have not been able to capitalize on them. The most popular platforms fail to appeal to this group because of their lack of genre- specific content, something which new start-ups have begun to address.

 

 

Tyler Lenane and his team set out to create a platform that focuses on the genre that has the most loyal fans according to Billboard, metal and for them, Gimme Radio is the answer. Though the start-up believes they are more than a streaming platform, in reality, it works based on similar principles which have been developed to fit better with metal fans. The platform focuses on engagement with users, something that more generic services don’t do. In order to cater with the interest of fans, Gimme Radio provides 24/7 radio as well as online shows from metal’s biggest stars. In a way, Lenane’s start-up gives insight into a possible future for streaming, in which platforms prefer to target niche markets, rather than trying to reach as many people as possible.
Start-ups like Resonate and Gimme Radio have only given us a small window into the future of streaming services. Consumer tendencies are hard to identify, specially in an industry as globalized as music. Because of that, music entrepreneurs face the challenge to not only innovate, but to also put user-input in the centre of their strategy. Ultimately, the fast-paced dynamic between supply and demand in the music industry will be responsible for the success or failure of the existing platforms and the ones that are yet to be launched.

Charlie Butler

In 1931, author James Truslow Adams published “The Epic of America” which is renowned for the first documented proclamation of the “American Dream” which spearheaded economic and social policy in the United States for the next eighty years, identifying free will as the catalyst that fuels the industrious fire that is North American innovation. From Reaganomics to Trump’s trade protectionism, it is undeniable that the ‘American Dream’ ideology remains firmly engrained in their population’s psyche.

The average workers desire for improvement has always been central to the overall economy’s success, but perhaps this desire was never duly rewarded. This is where previous generations have faltered in their “pursuit of happiness”, whereby the dual determinant stated by Adams, was to not only work hard to make a good life for oneself, but also to chase a prosperous society without self-indulgence in the form of “motor cars and high wages”. Although our ancestors may have succumbed to the alluring temptations of consumerism, there are strong signals that indicate the current crop may overcome such impulses.

The number of Americans working for themselves looks to triple, to 42 million people, by 2020 according to a self-employment study conducted over the last two years. More shockingly, 97% of independent workers reported no desire to return to traditional work following their pursuit of autonomy.

So where does this ambition stem from?
Well firstly, entrepreneurship has been democratised. Barriers to entry remain incredibly low, technology is innovating faster than governments can legislate, global connectivity has reached new heights, and the rise of peer-to-peer and crowdfunding platforms has made it easier than ever to monetize your skills and knowledge. However, although the external factors seem obvious, it is the internal influences that I believe are truly driving this change.

​As a student myself who grew up through the global economic crisis, the endless scandals, the unforgiving corruption and the general distaste for all things corporate, I think we have gained a subconscious distrust in authority. A belief that we can pave the path ourselves, a belief that we can work hard to create a better future for ourselves and those around us than previous generations did; and with technology acting as our enabling arm, why can’t we? This feeling of empowerment far outweighs any monetary rewards you can imagine. To put the power of this into context,  in 1950, CEO’s on average made twenty times their average worker. In 2018, C-Suite salaries and bonuses in the S&P 500 soared to an average of 361 times the average rank-and-field employee. Yet, only 13% of survey respondents said their career goal involved climbing the corporate ladder to reach the C-Suite, and by contrast, 67% of these respondents claimed ‘starting their own business’ was their primary ambition. If this doesn’t encompass “a dream of social order in which each man and woman shall be able to attain to the fullest stature of which they are innately capable”, I don’t know what does.

Jack Manning

You may have heard Huawei, the world’s second biggest smartphone company after Samsung, has become embroiled in an ongoing political imbroglio between the world’s superpowers, America and China. As details emerge quickly and new developments rapidly displace old ones, we will attempt to take a step back and evaluate the tech firm’s current position, and what we can expect looking to the future.

Huawei had been relentlessly capturing market share throughout 2018, overtaking Apple in in the second quarter and selling 208 million handsets. This is particularly remarkable considering the firm has essentially been denied access to the United States market, given governmental weariness of Chinese tech firms. Although not officially banned, US phone networks heed governmental nudges and winks and agree not to work with Huawei. Most European countries, at this juncture anyway, have yet to follow suit.

But mere weariness mutated into outright enmity when Huawei’s Chief Financial Officer, Meng Wanzhou, was arrested in Vancouver on December 1st. The US claimed violations of its sanctions on Iran by Huawei subsidiaries, before moving to request Wanzhou’s extradition to the United States. This submerged Huawei in America and China’s political spat – kindled by Trump’s declaration of a trade war.

Canada chose to uphold a mutual agreement between itself and the US in its detention of the CFO, and so quickly saw retaliation from China. Shortly after the arrest the retrial of Robert Schellenberg was agreed upon, a Canadian convicted for drug smuggling. His first trial had taken Chinese jurors two and a half years to sentence Schellenberg to fifteen years imprisonment. On January 14th, however, the 36-year-old was sentenced to death after the jury deliberated for only about an hour. This is therefore widely acknowledged as a political tit for tat.
On January 28th the drama ratcheted up several notches when US prosecutors filed criminal charges against Huawei. The firm, accused of bank fraud, technology theft and obstruction of justice, denies all allegations. It also refutes American indictments that it is beholden to Chinese government interests, emphasising its sole ownership by Huawei employees. The CEO and founder, Ren Zhengfei, in mid-January insisted he would “definitely” reject any appeal for his customers’ data by Chinese authorities.
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All that said, the political and legal entanglement in which the company has become ensnared has had a disastrous impact on its share price (see graph). Although not publicly traded, its share price remains indicative of its reputation with those invested in its competitors and other stakeholders. Its lowest point on January 29 came a day after being formally accused by the US Department of Justice of criminal activity.

Some believe Huawei is merely caught in the political crossfire between the world’s superpowers as they struggle to trade economic blows. Whatever the case, if the firm survives the rapidly forthcoming legal onslaught it will prove stronger than ever. In the words of Huawei chairman Guo Ping: “Setbacks will only makes us more courageous, and incredibly unfair treatment will drive us to become the world’s number one.” What doesn’t kill them makes them smarter.

Malcolm Sheil

​Humans have promoted products and services since the creation of modern society. In Ancient Rome, merchants would pay famous gladiators to wear certain products. Meanwhile, Eastern societies like India and China used the spoken word to promote their offerings across large regions. There is no doubt that advertising has played a part in society for a very long time, even if the actual concept of marketing was only developed in the mid-1900’s. Marketing has since evolved with tremendous speed to keep up with changing consumer demands and trends. Today, it is defined by digital -based storytelling and consumer engagement. The field of neuromarketing has developed as part of an industry-wide effort to better capture the essence of the consumer.

Neuromarketing is the combined effort of neuroscientists and marketers to fully understand how physiological occurrences correlate with decision making and consumer behavior. A pioneer in this field, author Martin Lindstrom, catapulted neuromarketing into the public eye with the release of his 2008 best-seller Buyology: Truths and Lies About Why We Buy. In his book, Lindstrom concluded that many aspects of purchasing behavior are triggered not by the conscious mind, but rather by involuntary and uncontrollable associations that happen in the subconscious mind. Based on his findings, traditional marketing strategies like consumer surveys will always be incomplete because they do not take into consideration these involuntary decisions that are imperceptible to the conscious mind.

In 2009, eye tracking specialist James Breeze conducted one of the most notorious neuromarketing studies ever. The study posed a simple task to subjects: look at two identical diaper ads, the only difference being the position of the baby in each ad. The first one had the baby looking directly at the reader, whilst the second one had the baby looking upwards at the headline of the ad.

With the help of eye-tracking technology and heat maps, the study found that the baby’s face in the first ad distracted consumers from the written text. In contrast, the baby in the second ad directed consumers to look at the headline and actually engage with the written work.

Though the takeaway of Breeze’s study might seem trivial, it provided marketers with fundamental proof that having a person in an ad can create more distraction than value.

Neuromarketing is a tool that is becoming more and more common on company level rather than just academic. Product and packaging design have been revolutionized with the popularization of neuromarketing. While preparing to launch a new packaging for Chips Ahoy cookies, parent company Nabisco made use of EEG (electroencephalography) technology to track brain activity of subjects while interacting with the product. The results showed that on a subconscious level, subjects were annoyed by the feature and found it hard to use. This allowed for the redesign of the entire packaging to include a more consumer-friendly resealing feature before the launch.

Proposed design vs. Launched design
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From a marketer’s perspective, neuromarketing is the holy grail of advertising tools. It enables them to create a product that consumers want even if they don’t even know they want it yet. Neuromarketing can tell companies the colours, stories, titles and even ad duration that will truly engage the consumer. Methods like the EEG, face coding and eye tracking can determine the most effective choices for consumer engagement through a series of trials. As of now, the field of neuromarketing is limited by technological boundaries to laboratories and therefore does not pose a significant ethical threat to consumers. However, as technology progresses so should the debate of neuroethics. The development of newer neuromarketing techniques could imply a tug-of-war between consumer autonomy and business efficiency. Considering this, consumers must ask themselves how much information they are willing to give away and at what cost.

Jack Manning

Jack is a 3rd year BESS student. In these piece he discusses Apple’s decline in innovation in the face of a growing bureaucratic structure, and Elon Musk’s intolerance of the phenomenon.

Bureaucracy quenches entrepreneurship. It’s a well documented phenomenon. Taking Apple’s relative decline in innovation in recent years, the blame will be placed on tightening hierarchical structures, and employees’ unwillingness to take risk given ballooning wages and job security. Given this reality Elon Musk’s aversion to bureaucratisation becomes clear, as he continues to succeed in cultivating an intrapreneneurial spirit within Tesla and SpaceX.
There is a dearth of innovative activity within heavily bureaucratised firms. Danish professor Jesper B. Sørensen, in his 2006 study on the subject, unequivocally concludes that those who work in large and old firms are less likely to become entrepreneurs. Backed by a slew of sources, he holds routinization, and a heightened opportunity cost associated with leaving, accountable.
This claim – that as firms grow larger their creative capacity diminishes – echoes Saxenian’s famous exploration of the underpinnings that allowed Silicon Valley to thrive. Her 1994 comparison between entrepreneurial activity at the valley and Boston’s Route 128 foreshadows the bleak state of the valley currently. Route 128, domineered by massive machine-like firms, acted to shield workers from entrepreneurial goings-on outside. A reliable flow of generous wages and job security within such rigid hierarchies dissuaded the more ambitious employees from taking risks. This left Route 128 lagging behind the trailblazing valley.
Where this leaves Apple presently – one-time architect of such profoundly revolutionary technologies – is the question. Gardere, Sharir & Maman’s article, The Need for a Long Term Vision with Apple and Samsung, is a fierce petition to these two tech titans to return to their innovative pasts. Times that were defined by reckless, risky and courageous experimentation today seem nigh-on alien, as Apple slaps an extra gigabyte of ram in its flagship smartphone to raucous applause.
The trio blame Apple’s stringent hierarchical structure for its weakening output of originality. This bureaucratisation, they claim, restricts the flow of ideas between the upper management at Apple and the rest of the company – something altogether necessary for intrapreneurial activity to flourish. They charge the firm with excessive focus on short-term profits.
Apple’s net income worldwide from 1st quarter 2005 to 3rd quarter 2018 (in billion U.S. dollars

In Silicon Valley particularly, Apple and other tech titans’ seemingly endless growth quashes potential cutting-edge innovation, in that would-be start-up pioneers are scooped up quickly by cushy wages and perks. The Economist early last September acknowledged that innovation on the part of employees within these giants remains possible, albeit to a dampened degree – given the homogenised nature of their operations.
To point the finger at a lack of creative direction on the part of Tim Cook would be reductive. Rather, the rigidizing of Apple’s internal structures as its revenue explodes time and again (see figure 1) ought to be scrutinised. The relentless innovation that occurred at Apple throughout the last decade was foundationally collaborative and facilitated by the disruptive spirit that permeated the entire company. Apple, in light of its market cap having surpassed 1 trillion USD earlier this year, is beholden to these trends of bureaucratisation.
Fighting upstream against the bureaucratic current is one Elon Musk. “The breeding grounds for entrepreneurial firms are more likely to be other entrepreneurial firms,” wrote Gompers, Lerner & Scharfstein in 2003 – particularly apt when considering Musk’s ferocious innovation at both Tesla and SpaceX.
In an interview conducted by Innovation Leader with Musk biographer Ashlee Vance, Musk’s aversion to hierarchy is cited as the main contributing factor to his firms’ profound ability to stave off bureaucratisation. Musk runs “a very flat structure,” according to Vance.
Space X’s arrangement as a private entity must too play a role in one-upping its competitors. Established aerospace companies such as NASA are by their state-owned nature heavily bureaucratised, and are hence ill-equipped to compete with Musk’s inexorable innovation. Musk’s lack of reliance on government funding dodges the hindrance of bureaucratisation at the hands of the state. This paves the way for an ecosystem in which daring and unrestricted experimentation can blossom.
However, Musk himself and the no-holds-barred philosophy he embodies almost certainly matters most. He is firmly against all-things-bureaucracy – from his hostility towards unnecessary meetings (“You haven’t said anything. Why are you in here?” goes the alleged confrontation with an evidently mute employee) to his loathing for unions – “Managers & workers [should] be equal [with] easy movement either way. Managing sucks btw. Hate doing it so much.” This reluctance to manage suggests an all-too-keen awareness of the detrimental effects of hierarchy on innovation.
Rigid hierarchy means barriers between managers and subordinates, and barriers – which can grow to be insurmountable all too quickly – result in an environment in which more risky and out-there ideas (i.e. the potentially ground-breaking ones) never see the light of day. This is the force Musk reckons with as he carries out his vision rooted in unselfconscious, ceaseless innovation.
As firms grow larger they should look to Musk’s all-out warfare against creeping bureaucracy as a guide to sustaining innovation. The rigid verticality baked into Apple’s ecosystem serves only to inhibit originality on the part of its employees. That so many would-be groundbreaking entrepreneurs are sucked in by its offering of vast salaries stands as a warning to innovative start-ups everywhere.