Wednesday, June 24, 2015

The View from Start-Up Labs

By: Travis Parsons and Tim Fielding

Attending the FEI conference in Boston and chairing the Start Up Labs this year, we were struck by the number of conversations we had with other delegates who were not including Digital in their strategic approaches to Innovation, on the basis that their businesses were not primarily ‘Digital’. At a time when businesses that are about as rooted in the physical realm as it is possible to be - like Hotels and Taxis - are being famously disrupted by software systems and consumer networks - for example, by Air BnB and Uber - we found it surprising that so many businesses would not be putting Digital to the front of the Innovation agenda.

At Castle, we specialize in helping businesses achieve market leadership through the design and development of game-changing digital products and platforms, so while twiddling our thumbs post networking cocktails at the Seaport Center, we decided to play a game. We took a random samples of the companies represented at FEI this year, to see if we could think of ways in which innovations in digital could make a strategically critical impact on their businesses.

Here are the results:

1.      Big Tobacco

You can’t digitize a smoke, right? Even an e-cigarette. But what about the notoriously regulated field of marketing communications for tobacco companies? As traditional advertising channels become increasingly inaccessible and ineffective for tobacco brands, and all sorts of new product lines spring into existence following deregulation in states like Colorado, could Big Tobacco take a leaf out of Birch Box’s book and blow up their direct marketing efforts around a community of fans that actually love their products? This could involve a monthly mailout of trial product samples and diversion of ad $ into supporting a team of bloggers celebrating the culture and building a fan base. We won’t pretend to be any kind of experts on the regulations governing controlled substances and social media, but we do know that positive messages from fans rank a lot higher on Facebook than messages from brands, and they also promote healthier products and better consumer experiences. So maybe a win-win there, for a company that’s prepared to invest in navigating this highly-charged area.

2.      Big Pharma

Patients are increasingly connected to one another and accessing greater degrees of user generated data and content. Communities such as are enabling information sharing between pharma customers like never before. Pharma companies should embrace this trend with a goal of guiding the conversation rather than finding themselves in defensive mode. Publishing content and data on the web as reference tools for these self-service communities as well as active community participation would be a first step. The traditional marketing message and channels can remain the front line of brand building, but building relationships with prospective and current customers through engagement creates longer term brand loyalty - and potentially leads to more innovative digital relationship building/engagement concepts.

3.      Food & Bev

As evidenced by the full-house that Start-Up Labs received for Seth Goldman’s excellent presentation about HelloFresh, the Food industry has definitely woken up to the potential of networked communities combining with direct mail and curatorial expertise to deliver a wildly disruptive service to a previously sleepy corner of the market. Reminiscent of how Netflix originally distributed its movies via the mail, HelloFresh will UPS you a box of ready-cook meals as you’ve never experienced them before. (Although to continue the Netflix analogy, it’s hard to imagine how they will evolve to the equivalent of VOD streaming - at least until an affordable 3D printer can magic you up something you might actually eat). Through a combination of smart digital systems for operations, innovations in packaging and shifts in user behavior towards healthier, more adventurous eating, we expect there will be many companies competing to deliver restaurant-quality food at home and in the workplace. Last time we checked, even Uber was getting in the game with a lunchtime delivery service plugged into kitchens offloading surplus sandwiches from restaurants in LA.

It seems like a no-brainer that oil companies will eventually be getting out of fossil fuels and into renewable energy. In light conversation at FEI, we heard multiple CleanTech concepts ranging from carbon capture fuel conversion by algae systems to miles of thermionic cells embedded in the sun-scorched blacktop to power charging stations down Route 66. It all sounds amazing, but most sustainable energy solutions are dependent on a smart grid to distribute the electrons. This sounds like one almighty algorithmic and logistical challenge. Who better to take it on than the captains of industry whose operations run so slickly that your local pump never runs dry? Their expertise in supply chain management could be channeled into unravelling a puzzle that has confounded the electricity companies for decades, creating a massive opportunity for ‘digital’ disruption by an industry with its roots literally buried in the ground.

If there’s a pattern to be observed here, perhaps it is that these innovations concern marketing and distribution more than the core product itself. But these days, if it’s common among marketing people to be positing that ‘the product is the campaign and the campaign is the product’, maybe those involved in corporate innovation strategy should be thinking about how those lines are blurring’? A good subject for our next blog post, perhaps?

About the Authors:

Tim Fielding is the VP of Marketing and Business Development at Castle - He has a long career in innovation and entrepreneurship ranging from music and clubs to social media and mobile apps. Follow him at

As the CEO of Castle, Travis Parsons has helped create over 40 new digital products and platforms for visionary companies. Prior to co-founding Castle, Travis was the Founder and CEO of logistics SaaS leader Elogex, which was acquired by One Network Enterprises in 2003. Travis began his career as a private equity investment professional with Blue Point Capital Partners and Bank of America Capital Investors. Travis graduated Phi Beta Kappa and with Distinction from the University of North Carolina Chapel Hill in 1994.

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