GE's CEO sees more partnerships ahead for digital business

SAN FRANCISCO (Reuters) – General Electric Co (GE.N) will use more alliances to build its digital-industrial business in coming years, Chief Executive Officer John Flannery said on Wednesday, suggesting the industrial conglomerate will curb spending in that area.

Microsoft Chief Executive Satya Nadella and General Electric Chief Executive John Flannery speak at General Electric Company’s Minds + Machines conference in San Francisco, California, U.S., October 25, 2017. REUTERS/Alwyn Scott

GE is investing about $ 2.1 billion in GE Digital this year, and executives had said that amount would fall in 2018.

Flannery on Wednesday made his first direct remarks about the digital strategy since he became CEO on Aug. 1. He has begun slashing costs in other areas, including reducing staff, grounding corporate jets and axing the “Maserati benefit” of corporate cars for about 600 senior executives.

Flannery is due to unveil new financial targets on Nov. 13 and is under heavy pressure to turn GE around after the company’s third-quarter earnings and cash flow badly missed targets. GE stock is down 32 percent so far this year, while the S&P 500 index is up 14 percent,

GE’s digital strategy is built around a cloud-based software platform, known as Predix, that connects factories, power plants and other industrial equipment to computers that improve performance and predict outages.

But Predix’s limited capabilities and performance problems have caused GE to lose out to competitors such as Siemens AG (SIEGn.DE) and startups such as Uptake and C3IOT.

Flannery said on Wednesday that GE will focus on selling Predix in its own businesses: energy, oil-and-gas, aviation, healthcare, transportation and mining, as Reuters reported in August.

In other markets, “We’re going to be more selective … and do it largely through partners,” Flannery said at GE’s annual Minds + Machines conference.

FILE PHOTO: The ticker and logo for General Electric Co. is displayed on a screen at the post where it is traded on the floor of the New York Stock Exchange (NYSE) in New York City, U.S. on June 30, 2016. REUTERS/Brendan McDermid/File Photo

Gary Mintchell, chief executive of The Manufacturing Connection, an industrial-internet-focused research and consulting company, said GE’s strategy of using partners reflects the company’s realization that “they can’t build their own ecosystem.”

GE said it was expanding its partnership with Microsoft Corp (MSFT.O), to provide access to Microsoft applications on Predix. The specifics largely duplicated what the companies said when they first announced the deal in July 2016.

GE said Predix will be available on Azure in North America on Nov. 30, months later than the original target of the second quarter. Predix will still be available on Amazon.com Inc’s (AMZN.O) Amazon Web Services cloud platform, GE said.

GE Digital’s chief executive, Bill Ruh, on Wednesday noted a partnership with Hewlett Packard Enterprise Co (HPE.N). GE also is linking Predix with Apple Inc’s (AAPL.O) IOS operating system for iPhones and iPads.

Patrick Franklin, vice president in charge of Predix, said there was still room to improve Predix after the company held a two-month time-out this year to fix bugs, but the platform was showing near-100 percent stability.

“We are paying careful attention to quality,” he said, referring to the delay in deploying Predix on Azure.

GE executives said the company is focusing on developing apps for Predix to boost sales. GE plans to bundle applications for equipment monitoring and service technicians, both of which it bought last year.

GE said orders for Predix were rising sharply. Some customers at the event echoed that view. U.S. utility Exelon Corp (EXC.N), for instance, said it is rolling out Predix to its nuclear, gas, wind and other power plants after a two-year pilot of the system showed it worked as advertised, said Brian Hoff, director of corporate strategy and innovation at Exelon.

“If it didn’t hit its targets, we wouldn’t be moving forward,” Hoff said.

Reporting by Alwyn Scott; Editing by Leslie Adler

Our Standards:The Thomson Reuters Trust Principles.

Tech

How these Founders Pivoted from a Failing Startup at the Last Minute and Created a Million-Dollar Business

“Make better decisions with feedback from real people.”

This mission lies at the core of User Interviews, a startup in Cambridge, Massachusetts that gives consumers a platform to voice their opinions on new and innovative products–while getting paid for their time.

User Interviews isn’t the first company to recruit participants for market research studies, but believe their differentiation is in their technology-based approach and commitment to a world-class user experience. The website makes it easy for consumers to connect with companies running research studies that they’re interested in.

“We started this company because we saw that the most successful products are built by companies that deeply understand their customers,” said Dennis Meng, one of the co-founders of User Interviews. “We wanted to make that easier to do.”

Meng and his co-founders, Basel Fakhoury and Bob Saris, realized the importance of getting feedback from customers from their experiences working on on their first startup together. They were building a mobile app that would give travelers 24/7 access to upscale hotel concierge service. After spending a year developing the app, they launched it and were horrified to realize that nobody cared to use it. In a desperate effort to salvage the app, they started gathering as much user feedback as they could. At one point, the trio even resorted to buying refundable plane tickets just so they could go through airport security to sit and talk to travelers. After talking to hundreds of travelers, the three founders finally came to terms with the fact that their app would never take off. “If we had talked to them earlier, we would have known much sooner that our app wasn’t going to be successful.”  Luckily, based on the difficulties they encountered, the team realized there might be a huge untapped opportunity to help companies connect with consumers to gather feedback.

From the ashes of the mobile app business rose User Interviews, one of the first automated platforms for recruiting and scheduling participants for market research studies and product tests. Though User Interviews initially targeted other startups as potential clients, discussions with product managers and marketers at larger firms helped the team realize that conducting consumer studies was just as much of a struggle for well-established companies.

“I once heard someone describe running a startup as riding a bike while building it,” said Meng. “That description couldn’t have been more accurate for us. Before we even had a website, we had companies trying to pay us for our services. We had dozens of paying clients before the first version of our technology platform was complete.”

Fast forward to today – the company now counts hundreds of companies as clients, including the likes of Pinterest, DirecTV, Colgate, Yahoo, and Pandora. They’ve also paid out over $ 1 million in incentives to the consumers who have participated in their clients’ studies. However, when asked, Meng says that the most surprising thing he’s learned is that people care as much about improving the products they’re reviewing as they do about the money. “People like the money, but even more than that – they like having a voice.”

From this simple concept has grown a burgeoning industry giant, and the last few months have been exciting ones for User Interviews. They recently raised $ 1 million in a seed round led by Accomplice Ventures, which they’ve already used to hire several new employees. Over the next few years, Meng, Fakhoury, and Saris plan to introduce User Interviews to thousands of companies and millions of consumers across the country.

Tech

6 Rules You Must Know for Using SEO and SEM to Grow Your Business

If you’re managing a business, you know how important a web and mobile presence is. Whether you’re selling tacos, tiaras, or terabytes, customers need to be able to find you.

You’ve probably dipped your toe into the complex world of organic or “free” search, also known as Search Engine Optimization (SEO), and paid search, also known as Search Engine Marketing (SEM). But what do you really need to know about SEO and SEM?

I spoke with SEO/SEM expert Andrew Shelton, founder of the digital marketing agency Martec360, who gave me six rules that you need to pay attention to right now if you want to increase your sales through search:

1. Mobile is king

Need evidence of the importance of mobile? Some 96% of smartphone owners use their device to get things done. About 70% of smartphone owners use their phone to research a product before purchasing it in a store. Half of all web traffic comes from smartphones and tablets.

Furthermore, Google has begun to make its search index “mobile-first.” That means that Google will primarily index mobile content and use that to decide how to rank its results.

2. Paid search pays off on mobile

On mobile, paid search (SEM) is increasingly paying off. Shelton says he used to tell his clients to focus on free search (SEO) but with users putting mobile first, the continuum has changed.

“The greatest return on investment is email,” Shelton says, “because you have those customers in house. But paid search is next.” He estimates that paid search spending went up by factors of 25% to 50% in 2016.

3. Have a solid content strategy

The old adage is the new adage: “Content is king.” You need high-quality content for your website if it’s going to compete in the free search business. You can’t go about that blindly.

Consider what customer problem you’re solving. What customer questions can you be answering?

Do you have a mechanism for customers to ask questions? There could be a wealth of ideas for blog posts, FAQs, and buyers’ guides right there.

4. Social media is worth your return on investment

Social media can be vexing for many businesses. You definitely have to perform a cost-benefit analysis on it. Spending six hours a day sending out tweets that don’t lead to conversions is going to be a losing proposition.

Treat social media as “an engagement with an ongoing conversation with your customers,” Shelton recommends. “It’s not just for selling.”

In fact, if your social media channels are too hard-sell, they’ll be counter productive. You have to create value. Tools like Hootsuite, Falcon.IO, and Curalate can help.

5. Manage your online reputation

According to Shopper Approved, an app that helps its clients collect online ratings and reviews, 88% of all consumers read online reviews to determine whether a local business is a good business.

All of those reviews are part of the SEO equation. They can help you, or they can hurt you. But an app like Shopper Approved can help push more positive reviews where you need them.

6. Measure and monitor your progress

The only way you’re going see your business grow exponentially through SEO, SEM, and social media is to measure what you’re doing. You have to know where you’re starting, set some benchmarks, and monitor your progress.

Install Google Analytics. There is a plethora of other e-commerce tools you can use for analysis. Data is your friend. Get used to swimming in it.

And if you need help, find a consulting firm that understands your customer and your goals.

Just remember, effective search is process. You won’t get it right the first time. But you’ll get better at it with everything you learn.

About the author:

Kim Folsom is the Founder of LIFT Development Enterprises–a not-for-profit, community development organization with a mission to help underserved, underrepresented small-business owners – and Co-Founder and CEO of Founders First Capital Partners, LLC, a small business growth accelerator and revenue based venture fund. Learn more about Kim and her company’s mission to help grow and fund 1000 underserved and underrepresented small businesses by 2026 via their Founders Business Growth Bootcamp program at www.foundersfirstcapitalpartners.com.

 

Tech

Tax Reform Proposal Gets Mixed Reviews From Small Business Owners

The Republican-backed tax proposal announced last week addresses concerns of some small business groups but also raises questions that it could create a tax loophole for wealthy people.

The proposal would change the way some company owners — sole proprietors, partners and owners of what are called S corporations — are taxed. They report business income on their individual 1040 forms and under current law, can be taxed at a rate up to 39.6 percent. Many small business advocates have long objected to the fact that some of these owners pay a higher tax rate than corporations whose rates currently top out at 35 percent.

Under the GOP proposal, the tax rate on the businesses known as pass-throughs would be 25 percent. The corporate rate would be 20 percent.

Small business advocates were split over the plan. The National Federation of Independent Business welcomed it, but others objected.

“The current proposal leaves a disparity by offering pass-through entities a 25 percent tax on business income while dropping the corporate rate to 20 percent,” said Todd McCracken, CEO of the National Small Business Association. “We hope to work with tax writers to find ways to close that gap.”

The pass-through provision has already encountered criticism among Democrats who say it would enable wealthy Americans to structure their finances in a way that would dramatically lower their tax bills. Sen. Ron Wyden, D-Ore., said it would allow hedge funds to “to convert ordinary income into low-rate pass-through income.”

The NSBA was happy with some other proposals, including an end to the estate tax, which can force the heirs of company owners to sell a business or place it in debt in order to pay the government.

The Small Business Majority said the plan would not help most small companies.

“The current top rate is paid by less than 2 percent of pass-through business owners. Nearly 9 in 10 businesses that pass through their income already pay at the 25 percent rate or less,” said the group’s CEO, John Arensmeyer.

The plan would simplify business taxes, encourage business investment and increase owners’ confidence, the Small Business & Entrepreneurship Council said.

“High confidence will drive investment, risk-taking, bigger economic growth and wage growth,” said Karen Kerrigan, the group’s CEO.

The overall tax proposal faces an uncertain path through Congress although it has the backing of GOP leaders and President Donald Trump. Another provision in the overall plan that is being criticized is a proposal to eliminate the deduction for state and local taxes.

OPTMISTIC ABOUT TRADE

Small and mid-sized U.S. businesses that export their goods and services generally anticipate healthy growth in their overseas sales in the next five years. That’s the finding of a survey of 501 exporters released Monday by American Express.

Seventy-seven percent of the exporters who took part in the survey expect revenue from overseas sales to increase in the next five years, on average by nearly 30 percent. International trade is a significant part of their business — on average 36 percent of annual revenue comes from other countries.

Global economics and politics are a concern to these companies, with nearly 80 percent saying changing economics is a significant challenge. Thirty percent said Britain’s planned exit from the European Community will make them more cautious about international trade.

The survey, which questioned companies with total annual revenue between $ 250,000 to under $ 1 billion, was conducted in August.

PAID SICK LEAVE

Rhode Island has become the eighth state to require employers to give their staffers paid time off when they’re sick. Gov. Gina Raimondo signed a bill Thursday giving staffers at businesses with at least 18 employees three days of paid sick leave in 2018, four in 2019 and five in 2020. Workers can also use the time to care for ill relatives.

A growing number of states and cities have enacted laws that give workers paid sick leave, which is not required under federal law. Rhode Island’s neighbors, Connecticut and Massachusetts, also have sick leave laws, as do Vermont, California, Oregon, Arizona and Washington state.

–The Associated Press

Tech

Three Keys To Driving Business Growth

Business development is crucial for any new start-up, without it, your business will struggle to survive let alone thrive.

When it comes to developing your business, and let’s be clear about what we mean by this, we mean increasing your revenue.

And simplistically speaking there are only three ways that you can do that, and these are: sell more, sell to more, and sell for more.

Too often we overcomplicate things, but in terms of revenue growth, these are the only options and the clearer that we can see them the easier it is to address them, and all of your efforts should be directed to these three tasks.

Your business should have strategies for all three of these opportunities because if you don’t then, you are missing opportunities and potentially leaving the business on the table for your competitors to profit from.

Sell More

The easiest way to grow your business is to sell more products or services to your existing customers. Your existing customers already have a relationship with you, they probably already know you, like you and trust you, so it should be fairly easy to sell additional items to them.

Some studies have shown that it costs seven times as much to add new customers than it does to sell to existing customers.
That means that there are bigger profits to be made in selling additional products and services to existing customers as you have already borne the customer acquisition cost previously.

So what other products and services can you offer to your existing customers. These might not even be services that you produce; these could be complimentary services where you take a small percentage from a partner. Look at airlines who look to offer additional services like car hire, hotels, etc., etc. as they look to maximise the revenue from their customers.

You also need to have customer satisfaction high on your agenda, because for every customer you lose it will cost you significantly to replace them.

You need to have strategies for increasing your revenue per customer.

Sell to More

This is probably the area that most businesses focus on, attracting new customers and increasing market share and penetration. You need more customers if you want to dominate your market and also to drive efficiencies and economies of scale which can help increase profits. But you need to be smart about how you go about this, and to look to keep your customer acquisition costs as low as possible.

One of the cheapest ways to attract new customers id through referrals from existing customers. If your existing customers are happy with your products and services how can you encourage them to become your advocates and to recommend you?

How can you set up win-win arrangements so that both of you benefit?

Remember, if it costs seven times more to acquire a new client than it does to sell to an existing client when clients are recommended to you much of this cost is saved and could be used to reward those who recommended you.

Affiliate programs take a similar approach, where you let someone else bear the cost of finding you new customers for a percentage of the sale.

There are many options for finding new customers, and you need to have strategies that best fit your business model, and also optimize your profitability.

Sell for More

I am always amazed at the number of clients I work with that undervalue the services that they offer. There are often several reasons for this: they lack confidence and so underprice; they don’t understand what the market can bear, or they don’t see the real value in what they are offering.

This last one can come from too much familiarity, which can lead to a form of contempt for our own goods or services which then leads us to lower the price.

Price increase is probably one of the easiest ways to increase revenue, but it does come with risk. Raise the prices too high, and we could lose business and customers.

But the same is true when our prices are too low, if you do not see the value in what you offer, then why should someone else.

One client, I worked with, we doubled her pricing. As she rightly predicted it lost her some customers, but it also attracted new customers who were both able and willing to pay the higher price, and she actually increased overall demand and revenue.

If you have a quality product then you need to sell it for premium prices, if you seel it at budget prices, it will be deemed a budget product.

There are only three ways to increase revenue, sell more to your existing customers, sell your products and services to more people, and to sell them for more money. By having strategies for all three of these will allow you to maximise your business potential.

Ignoring one or more of these just leaves more money for your competitors to take.

Tech

Robotics tipping point: What business leaders and entrepreneurs need to know NOW (webinar)

VB WEBINAR:

Join us for this live webinar on Friday, September 25 at 10 a.m. Pacific, 1 p.m. Eastern. Register here for free. 

Silicon Valley is at the center of the perfect storm of robotics.

It’s at the center of the talent, the investment and the research, the center of the software and hardware industries — all key ecosystem components to build the robotics companies that need to rise to serve the world’s future.

But the event horizon to make that happen is something that needs to be considered in terms of decades, not the typical start-up timelines of a few months to a few years, according to Andra Keay. Keay is managing director of Silicon Valley Robotics, and one of the panelists in this upcoming webinar that will be shedding light on what businesses need to know now to take advantage of the evolution that’s reaching a tipping point.

“Robotics moves slowly but it’s been around a long time,” she says. “The industry has done a great job over the last 50 years of helping us to envision what uses we could make of robots and what that could mean to the quality of our life and our economy. Yet, few of those promises have yet been met.”

The problem, according to Keay is that our expectation of robotics has been inflated.

“We did it wrong. We’ve created this situation where we look at robots as humanoid,” Keay says. “There’s no way that robots have anything like the capability of a person. It’s just absolutely impossible in this century for a robot to replace a human in anything.”

That’s not to say that robotics technology isn’t already very much a part of our lives, or that now isn’t the right time for the industry to become more established and scale.

“Five years ago in the industry we said, OK, the time is right,” Keay says. “It’s clear that robotics is at a point where it’s time to move into new areas. Out of industry, out of research labs, into the service industry and into the home.”

Robotics technologies are well engrained in certain industries, like automotive. It’s just that, for the average person, it doesn’t feel like something that’s particularly close to home. For this reason, it’s easy for people to dismiss robotics as science fiction because it seems so far away and the tipping point moments so elusive.

Understanding what that future may actually look like comes back to understanding the technological and economic drivers that are making robotics peek right now.

Don’t miss out!  Learn more about Andra Keay’s vision for the future of robotics by tuning-in for the webinar “How robotics will change everything, including your business.”

Register here for free.

“In many cases it will be taking this ubiquitous connectivity that mobility computing delivers and making a gradual transition to products that are just that much more powerful and versatile,” Keay says. “It’s not going to be a disruption, but once in a while one of those devices will change in how we use it and that will lead to other changes. I think that, with time, robotics will account for the same kind of seismic shift that the internet and computers had in the 20th century.”

One popular belief is that the growth of robotic technology will inevitably equate to the loss of human jobs. But Keay says there is good reason to believe that the opposite will be true.

“Everywhere I look there are industries that have increased the number of robots that they employ. They’ve also increased the number of people that they employ,” she says. “An exciting vision of the future is that of the skilled mobile tradesperson. They’ll still drive a pickup or an SUV but instead of a leaf blower, or a power tool, they’re working with smarter tools that are used in applications to take care of robots.”

Keay sees a correlation between this future of robot builders and technicians and the opportunity to create small, regional pockets of highly-specialized, entrepreneurial manufacturers and service providers of a variety of stripes to support niche industrial and commercial requirements for robotic technology. “Robots increase the number of jobs that are needed and they also increase the productivity of a company that allow it to expand and create even more jobs,” she says. “That will create opportunities for a new class of entrepreneurs.”

Ultimately, the future of robotic technology means creating machines that augment, not replace, humans and socializing the idea that people can work with robots in an integrated fashion.

“Some of those fences are starting to come down as computing power and intelligent algorithms lead us to a better understanding of how people can work alongside robots,” Keay says. “To make a significant impact on our economy, we need to build a lot of robots because there are not that many out there today.”

“People need to build them and people need to maintain them and the only way we can do that is to create opportunities for the industry to grow in Silicon Valley and elsewhere.”

What you’ll learn:

  • The key consumer and commercial applications of robots and drones
  • The role robots will play in societies and economies
  • How smartphone technologies will pave the way to robotics’ future
  • How cognitive technologies will transform our lives and business
  • The foundation of many IoT applications in shaping the way to robotics

Speakers:

Jim McGregor, Principal Analyst, Tirias Research
Andra Keay, Managing Director of Silicon Valley Robotics
Anthony Lewis, Senior Director of Technology, Qualcomm
Maged Zaki, Director of Technical Marketing, Qualcomm Technologies, Inc.

This webinar is sponsored by Qualcomm.



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