lifestyle addiction and technology/business co-evolution danieleewww@gmail.com daniel hao tien lee

Lifestyle Addiction and Technology/Business Co-Evolution

http://danieleewww.yolasite.com/2014-mgb-070.phpdanieleewww@gmail.com

Daniel Hao Tien Lee

???!!!

• Any lifestyle addiction you have now!• Your dream of lifestyle

Typical Q’s for Lifestyle Survey

• In what types of stores do consumers shop for food and drink?

• Do commuters drive cars to work or take public transport?• How do ethnic groups influence consumer preferences and

expenditure trends?• How many households own microwave ovens? Personal

computers? Refrigerators?• On the whole, are the consumers spenders or savers?• Where do consumers go on holiday and how much do they

spend?• How well are consumers served by the healthcare system?

Ingredients of Lifestyle

• Hobby• Entertainment• Gaming• Internet Surfing • Social Network• Travel• Work• Wealth• Health• Others……

Hobby and Casual Lifestyle

Daily Lifestyle

Internet Lifestyle

http://kris-sariy.tumblr.com/post/20283789740/cyberchondriac

Internet Social Network Lifestyle

Smartphone Lifestyle

http://androidandme.com/2010/11/news/how-smartphone-users-see-each-other-android-vs-blackberry-vs-iphone-comic/

Mobile Internet Addiction

http://www.michellehenry.fr/tel.htm

Or Computing is Speeding Up our Life!

Software is Eating the World _ cont.• Why Now: Six decades into the computer revolution, four decades since the invention

of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale.

• In 2000, the first cloud computing company, Loudcloud, the cost of a customer running a basic Internet application was approximately $150,000 a month. Running that same application today in Amazon's cloud costs about $1,500 a month.

• Perhaps the single most dramatic example of this phenomenon of software eating a traditional business is the suicide of Borders and corresponding rise of Amazon. In 2001, Borders agreed to hand over its online business to Amazon under the theory that online book sales were non-strategic and unimportant.

• Today, the world's largest bookseller, Amazon, is a software company—its core capability is its amazing software engine for selling virtually everything online, no retail stores necessary.

• Today's largest video service by number of subscribers is a software company: Netflix.

• Today's dominant music companies are software companies, too: Apple's iTunes, Spotify and Pandora.

• Today's fastest growing entertainment companies are videogame makers—again,

http://online.wsj.com/news/articles/SB10001424053111903480904576512250915629460

Software is Eating the World _ cont.• Pixar, was a software company. Disney—Disney!—had to buy Pixar, a software company, to remain relevant in

animated movies.• Companies like Shutterfly, Snapfish and Flickr have stepped into Kodak's place.• Today's largest direct marketing platform is a software company—Google. Now it's been joined by Groupon,

Living Social, Foursquare and others, which are using software to eat the retail marketing industry. • Today's fastest growing telecom company are Skype and Line, WeChat, WhatsApp; AT&T and Verizon, have

survived by transforming themselves into software companies, partnering with Apple and other smartphone makers.

• LinkedIn is today's fastest growing recruiting company. For the first time ever, on LinkedIn, employees can maintain their own resumes for recruiters to search in real time—giving LinkedIn the opportunity to eat the lucrative $400 billion recruiting industry.

• Software is also eating much of the value chain of industries that are widely viewed as primarily existing in the physical world. And the creation of software-powered driverless cars is already under way at Google and the major car companies.

• Today's leading real-world retailer, Wal-Mart, uses software to power its logistics and distribution capabilities, which it has used to crush its competition. Likewise for FedEx, which is best thought of as a software network that happens to have trucks, planes and distribution hubs attached.

• Oil and gas companies were early innovators in supercomputing and data visualization and analysis, which are crucial to today's oil and gas exploration efforts. Agriculture is increasingly powered by software as well, including satellite analysis of soils linked to per-acre seed selection software algorithms.

• The financial services industry has been visibly transformed by software over the last 30 years. • Health care and education are next up for fundamental software-based transformation. • Even national defense is increasingly software-based. The modern combat soldier is embedded in a web of

software that provides intelligence, communications, logistics and weapons guidance. Software-powered drones launch airstrikes without putting human pilots at risk. Intelligence agencies do large-scale data mining with software to uncover and track potential terrorist plots.

Others

• Software Defined Data Center https://www.vmware.com/products/nsx/

• SW to Unify Sales, Marketing , and Services http://www.usermind.com/

• Music Genome Project: Music– Feeling and Sensibility

• Human Genome Project: DNA Sequencing and Proactive Health Care for Life Time

• Brain Genome Project: AI (machine learning)• Dating and Social Activity• Others….

Lifestyle Changing to accord withChanging Pace of SW Eating the World

Music and Technology

• http://echonest.com/• http://www.pandora.com/about/mgp• http://spotibot.com/• http://www.soundhound.com/• http://www.shazam.com/• https://www.gracenote.com/music/• http://www.last.fm/• http://musicbrainz.org/

All based on what?

Music information retrieval (MIR)

• http://www.nyu.edu/classes/bello/MIR_files/1-Introduction.pdf

Last.fm vs Pandora• The differences between collaborative and content-based filtering

can be demonstrated by comparing two popular music recommender systems - Last.fm and Pandora Radio.

• Pandora uses the properties of a song or artist (a subset of the 400 attributes provided by the Music Genome Project) in order to seed a "station" that plays music with similar properties. User feedback is used to refine the station's results, deemphasizing certain attributes when a user "dislikes" a particular song and emphasizing other attributes when a user "likes" a song. This is an example of a content-based approach.

• Last.fm creates a "station" of recommended songs by observing what bands and individual tracks that the user has listened to on a regular basis and comparing those against the listening behavior of other users. Last.fm will play tracks that do not appear in the user's library, but are often played by other users with similar interests. As this approach leverages the behavior of users, it is an example of a collaborative filtering technique

Streaming Service for Emotion

• Netflix:  the new phrase is "It's not TV. It's Netflix." Everything that makes Netflix's programming distinctive--surrendering control to creators, releasing all episodes of a season at once, keeping its viewership data private rather than participate in the ratings game--is a modern twist on the original, universally admired HBO game plan. http://www.fastcompany.com/3024158/netflix-the-red-menace

• Pandora• Spotify• KKBox• Beatsmusic : understands users' emotions, offering the best of human

curation and computer algorithm http://www.fastcompany.com/3024765/beats-music-launches-to-take-on-spotify-google-and-apple

http://www.usatoday.com/story/tech/personal/2014/01/20/beats-music-service-review/4575521/

DAN Sequencing

• Complete DNA decode/human cost US$10,000@2013 to US$1,000@2014 by Illumnas; 23andMe, which will analyze a saliva sample by mail for $99. Such inexpensive consumer tests examine only about half a million points of your DNA sequence, leaving billions more in the shadows.

• http://www.businessweek.com/articles/2014-01-15/illuminas-new-low-cost-genome-machine-will-change-health-care-forever#r=hpt-ls

• The first human genome required $3 billion and 13 years to sequence. Ten years later, with the HiSeq X, that time has fallen to about 24 hours. It’s now possible to take a blood test and meet with your doctor a week or two later to go over your inherited strengths and weaknesses on an iPad.

http://www.youtube.com/watch?v=Lgm5dA1D_pc

http://www.youtube.com/watch?v=4XMO5VfLIKs

http://www.youtube.com/watch?v=JHzkYDyMzOg&list=PLcmvBx-ibCV6E06ocUU0EZ8zkgJXP1OHO&index=2

http://www.youtube.com/watch?v=JHzkYDyMzOg&list=PLcmvBx-ibCV6E06ocUU0EZ8zkgJXP1OHO&index=2

DNA Sequencing Cost Down Beating Megabit Cost Down of Moore’s Law--- But computing power facilitated by Moore’sLaw is key to DNA sequencing

Human (23 chromosomes) is estimated to be about 3.2 billion base pairs long

Takeaways on DNA Sequencing

• Scientists have pieced together the entire DNA sequence of an 18-week-old fetus without having to use any invasive tests that could result in a miscarriage - an advance that offers a glimpse of the future of prenatal testing. Using blood drawn from the mother and a sample of saliva from the father, the researchers were able to scan the fetus' genome and determine whether it contained any of the myriad single-letter changes in the DNA code that can cause a genetic disorder. They could even pinpoint which mutations were inherited from Mom, which came from Dad, and which were brand-new.

• DNA sequencer raises doctors' hopes for personalized medicine• The Supreme Court on Thursday issued a ruling that 

bans the patenting of naturally occurring genes but allows edited or artificially created DNA to be patented. http://news.nationalgeographic.com/news/2013/06/130614-supreme-court-gene-patent-ruling-human-genome-science/

• DNA sequencing: how much do you want to know about your health future?• Will My Son Develop Cancer? The Promise (and Pitfalls) of Sequencing

Children’s Genomes http://www.cancer.org/acs/groups/cid/documents/webcontent/002548-pdf.pdf

• Living Longer, Living Better – DNA And Your Future• https://www.23andme.com/ $99 offer!

AI: Machine Learning and Deep Learning

https://www.youtube.com/watch?v=exhdfIPzj24

Algorithm to create/generate intelligence out of recognition and learningare the name of game.

Takeway: AI of ML and DL

• Skype will soon get real-time speech translation based on deep learning http://blogs.microsoft.com/blog/2014/05/27/microsoft-demos-breakthrough-in-real-time-translated-conversations/

• Google, Baidu, Facebook are on the run as well.

http://www.datarobot.com/blog/a-primer-on-deep-learning/

Dating Decision by Math.

• https://www.okcupid.com/about/okcupid• Math. Based Dating System inside Okcupid

http://www.youtube.com/watch?v=m9PiPlRuy6Ehttp://www.sonichu.com/cwcki/List_of_OkCupid_Answers

What’s Next!

BitCoin: Digging gold mine out of nowhere!

• https://www.youtube.com/watch?v=Gc2en3nHxA4#t=50

https://bitcoin.org/

BitCoin

• No more monopolize in the currency by FED, BE, or other central banks in the world.

http://singularityhub.com/2014/09/30/how-long-would-it-take-to-mine-bitcoin-by-hand/

Bitcloud

• "If you're interested in privacy, security, ending Internet censorship, decentralizing the Internet, and creating a new mesh network to replace the Internet, then you should join or support this project,"

http://singularityhub.com/2014/09/30/how-long-would-it-take-to-mine-bitcoin-by-hand/

Two Projects Aim To Decentralize The Internet

• Bitcloud• Maidsaft

Lifestyle Addiction: Its Impact on the Industry Ecosystem and Technology

Coffee Industry and Business

• Ecosystem and Value Chain• Brewing Ecosystem• Single-Serve-Coffee

Did you know?

• Coffee statistics show that coffee is the most popular beverage worldwide with over 500 billion cups consumed each year.

• Coffee is the 2nd. largest commodity next to crude oil; The total global production of green coffee is above 134.16 million bags (60 kg capacity) with a retail sales value in excess of $100 billion during 2010-11 in the world market.

• Coffee industry statistics show that only 20% of harvested coffee beans are considered to be a premium bean of the highest quality.

• Coffee market statistics show that coffee is grown commercially in over 80 countries around the world.

• Coffee trade statistics show that over 5 million people in Brazil are employed by the coffee trade and more than 100 million people in the coffee growing areas worldwide derive their income directly or indirectly from the produce of this crop.

• Those employed in the coffee industry are involved mostly with the cultivation and harvesting of more than 3 billion coffee plants.

• Coffee consumption statistics show that coffee represents 75% of all the caffeine consumed in the United States.

Coffee Business

• Four major conglomerates -- Nestlé, Philip Morris, Procter & Gamble, and Sara Lee -- dominate world coffee markets, accounting for 60 percent of U.S. sales and 40 percent of the global coffee trade.

• Coffee is grown in more than 50 countries in South America, Central America, Asia, Africa and the Caribbean. Nearly 25 million farmers worldwide depend on growing coffee for their economic livelihood.

• Global coffee production in 2002/2003 is expected to reach record levels: 122 million 60-kilogram bags of coffee beans (16.1 billion pounds).

• The world's top 10 coffee-producing nations, in order of amount produced, are Brazil, Vietnam, Colombia, Indonesia, India, Mexico, Ethiopia, Guatemala, Ivory Coast and Uganda.

• Brazil produces more than a third of the world's supply of coffee, almost three times as much as the No. 2 producer, Vietnam.

• The top 10 coffee-importing countries, in order of amount imported, are the United States, Germany, Japan, France, Italy, Spain, Canada, the United Kingdom, Poland and the Netherlands.

• Though Germany occupies the No. 2 position among consuming nations, the country imports 

Major Role Players: Traders• The coffee-producing countries earn very little from the

sale and export of their produce. Green coffee beans, a minimally processed product, accounts for approximately 95% of coffee exports. A large share of the profits in the coffee supply chain go to the middlemen and the large roasters. International coffee trading companies operate in the coffee-producing countries via joint ventures with local middlemen. Five large companies control this trade: Neumann and Volcafé (both based in Germany); Cargill; Decotrade (trading arm of Sara Lee/Douwe Egberts) and Taloca (owned by Philip Morris/Kraft), both based in Switzerland.

http://www.teacoffeecocoa.org/tcc/Commodities/Coffee/Value-Chain

Major Role Players: Roasters• Coffee roasters process green coffee beans into a variety of end-

products, including filter coffee, instant coffee, and the new ‘coffee pads’. Almost 45% of the green coffee imports is purchased by the five largest roasters, that mainly sell their processed coffees in the European, American and Japanese markets. Nestlé and Philip Morris/Kraft each process 13%, while Tchibo purchases 4% for the German market. Proctor & Gamble sells most of its share (4%) in the United States. Sara Lee/Douwe Egberts roasts 10%, which is sold mainly in the European and Brazilian markets. Nestlé dominates the soluble coffee market with a market share of over 50%. These multinationals make good profits from roasting coffee. Profit margins are considerable thanks to a combination of low-priced green coffee, innovative product development and a strong brand strategy.

http://www.teacoffeecocoa.org/tcc/Commodities/Coffee/Industry

Coffee Ecosystem

http://catalog.flatworldknowledge.com/bookhub/reader/3157?e=gittell_1.0-ch07_s02

Results of our exercise on the profit share of a 100 gram bag of branded instant coffee sold at $3.80 (do euros if you like)

Fair Trade Term

Is this fair?

Farmer get <2% of market value!

?

?

Green Ideas to break the coffee value chain! But…..?

"Fair trade" coffee is still a small portion of the market, but it is the most popular fair trade

commodity in the world

• "Fair trade" coffee was instituted to provide growers with better conditions and a higher cut of the profit.

• Under fair trade rules, the coffee importer has a direct relationship with the grower, and pays more to maintain that relationship. Prices fluctuate, but most recently coffee farmers in fair trade cooperatives got $1.26/pound for their Arabica coffee, while regular coffee prices were around $0.70 to $0.90.

• Companies like Starbucks, Dunkin' Donuts and McDonald's all carry fair trade coffee.

http://www.businessinsider.com/facts-about-the-coffee-industry-2011-11?op=1#ixzz3FbXdK68l

http://www.munich-business-school.de/intercultural/index.php/Fairtrade_-_an_analysis_of_the_coffee_market,_the_advantages_and_disadvantages_and_the_case_study_Starbucks

http://www.fastcodesign.com/1670599/infographic-how-to-make-every-coffee-drink-you-ever-wanted#7

Coffee brewing ecosystem and its taxonomy-- sustainability

Consumption: >23 billions cup-of-coffee per day

Keurig 2.0 Brewer

Single-Serve-Coffee

Brews a Cup or a Carafe

Single-Serve-Coffee

As K-cups have demonstrated, people are willing to pay handsomely US$1-0.35/cup for convenience and control over their coffee experience.

• The company(Green Mountain) began moving into the home market in 2004, and sales took off. K-Cups now come in more than 200 flavors and sell for about 35 cents apiece. That’s 7 times the cost per cup of coffee brewed by traditional methods, but consumers are willing to pay for the speed and convenience: In 2013 U.S. sales of Keurig coffeemakers and pods exceeded $4.25 billion, and the coffeemakers had a dollar market share of more than 40%.

Nestle’s Nespresso

For both small and big cup

Nespresso VertuoLine and Nespresso OriginalLineTwo distinct technologies

What’s Next

Analogy: Coffee vs Smart Phone

Coffee vs Mobile Device Industries: Commons (Similarities)

• Very Low Value of Maker’s (1% vs 1.5%)• 2nd. biggest commodity vs the most popular electronics

devices ever • Ubiquitous(home/office/business/travel)• Affordable to everyone!• Easy use and entertained • A variety of choices for both• Brand is the “King”• Customer Experience: End-user’s addiction is critical• Social drinks vs social networking• Globalization

Coffee vs Mobile Device Industries: Dissimilarities

• Customer Experience• Competitive Landscape

– Regional vs Worldwide– Oligopoly vs Perfect Competition– Sustaining Innovation (incumbents near always win) vs

Disruptive Innovation (entrantants near always win) • Business Model

– Vertical Integration vs Horizontal Integration vs Mixes– Value Chain Integration– Supply Chain Configuration– Knowledge Management

Open-Ended Question/Problem

• Decode the value chain of coffee industry, including incumbents/winners, entrants, startups etc.; explain why/how this value chain and its sustainability issues

• Decode the value chain of mobile phone industry………

Case

• Why LINE and WeChat so popular? Potential competitors to WhatsAPP, FB, and Twitter?