00:00hi and welcome to the a 16z podcast last
00:03year the economist declared data to be
00:05the world's most valuable resource today
00:06big corporations certainly have more
00:09data now at their fingertips than ever
00:10before so how do you actually create
00:12actionable insights and experience from
00:14your data for your customers without
00:16getting too close for comfort
00:18this conversation includes CEO and
00:20co-founder of Mixpanel Suhail doe she
00:22Gill Elbaz the founder and CEO of
00:25factual CEO of Foursquare Jeff Glueck
00:28and is moderated by a 16z partner Lauren
00:31Burson it took place at our summit event
00:34so traditionally IT invested in tools to
00:39store and measure and house data but
00:41held the keys to the castle making it
00:43difficult for marketers and business
00:44people to actually make sense of data
00:46and information about their customers I
00:48think the quote I often hear is if it
00:49takes six months to answer a question
00:51you probably stop asking questions
00:53there is a key evolution here towards IT
00:56tools like some of the ones that you
00:58have democratizing data and bringing
01:00access to both IT individuals as well as
01:03marketers and business folks can you
01:05talk a little bit about the shifting
01:07roles and responsibilities and how this
01:08is playing out and affecting you on the
01:11accessibility side what we find
01:12traditionally is that pretty much
01:14everybody has a very large data pipeline
01:17that usually consists of ingesting the
01:20information and then transforming that
01:22information storing it somewhere
01:24graphing it or querying it and then for
01:27an executive finally being able to like
01:29get a dashboard where they can finally
01:30get that number you know we don't all
01:32want to be CFO experts and so it's
01:35really important to find ways to give
01:37them the power to be able to do that
01:38however there's a privacy component that
01:41we all do have to tackle in a company
01:42because you know for example Mixpanel
01:43works with a few banks and one problem
01:46with of course the banking industry the
01:48financial services industry is that
01:50there's just a level of information that
01:52they cannot divulge to us and they have
01:55to keep even housed away from their own
01:57employees and so therein lies this big
01:59problem with how do you make the data
02:01accessible while still empowering the
02:04rest of the company even though they
02:05can't have access to that and reporting
02:07is one way but it's really about you
02:09the best product to solve the most
02:11important problem that you have with
02:13data large companies today try to find a
02:16one-size-fits-all tool and that just
02:18doesn't work anymore what works is
02:20finding one tool that serves a major
02:23part of your organization so that it
02:25will really empower them the lens that I
02:26look at it from you have a cohort of
02:29extremely powerful data first companies
02:33these are software companies that don't
02:35sell software the googles and Facebooks
02:36who who have this incredible DNA around
02:39collecting information knowing how to
02:41make it actionable and then building an
02:42incredible array of products that
02:44delight users and they're also
02:45monetizing users and it's quite a threat
02:47to the broader industry we're seeing new
02:50verticals where they're pursuing market
02:53share and I think with this changing
02:55landscape what it means is that all
02:58other companies have to figure out how
03:00are we going to orient our strategies
03:02around getting access to more data first
03:04party data build one-to-one
03:06relationships with users so that we have
03:08it and then we have to ask ask the big
03:09questions what data are we great at what
03:12data do we absolutely need to be
03:14competitive but aren't great at and what
03:16are the strategy is going to be in order
03:17to have something that's equivalent so I
03:21think about all the data that people are
03:23drowning in in the digital world
03:25companies and how little they understand
03:28the real world for Foursquare we have
03:30125,000 companies using our platform to
03:32build better global experiences we're
03:34very much an enterprise company and 92
03:38percent of the economy happens in the
03:39real world and so when I was CMO and
03:43it's been a billion dollars and
03:44Travelocity I had the cookie and I knew
03:47what advertising work I knew a lot about
03:48my users and if you're a retailer you
03:51have CRM you have email you have your
03:54website you have all this data but you
03:56know nothing about what your users are
03:59doing in the real world until they come
04:02and use your cash register and you know
04:03ninety percent of economies in the real
04:05world so I think you know for those of
04:07us in the location intelligence
04:08business we are organizing all of that
04:12movement data in a mobile-first world
04:13and making it actionable so you don't
04:16need to train everyone in sequel we will
04:18enable you to build contextual
04:20experiences let's talk a little bit more
04:22about how you really use digital data to
04:25transform a physical interaction what we
04:29think of as great customer experience in
04:31the real world is contextual and we care
04:34about context it's alright I mean are
04:37you arriving at your desk for the
04:3910,000th time or are you turning the
04:41corner in Barcelona and you're near this
04:43incredible tapas place that you've never
04:44been to you know are you at home are you
04:47in a new restaurant or one that you've
04:49been to tons of times before and is
04:51there content for you we sat down with
04:53this company called touch Tunes it's a
04:54500 million dollar music business in
04:5665,000 locations and their problem was
04:58they have jukeboxes right remember the
05:01dollar in the jukebox but there'd be
05:0665,000 jukeboxes and people there users
05:09who spend like $15 a month on average
05:11didn't know when they could control
05:13music in the bar or the restaurant so we
05:15enabled them through the our SDK to say
05:18hey are you at the perfect point jay-z
05:21is really popular here you love jay-z
05:23get the party started
05:24like 400% increase in the click-through
05:28and they had a 66% revenue increase
05:31because it's a social message at the
05:33right time in the right place to the
05:34right person it's almost like context is
05:36intent right it's like where you are
05:38says a lot about who you are and what
05:40you might want to do so I'm gonna date
05:42myself a little bit and shift gears when
05:45I worked at Citigroup in 2004 i ron't
05:48wrecked mail campaigns and statement
05:50inserts and all these really sexy things
05:52to try and get card members to get
05:54excited about having a Citi card and we
05:56had a channel called personalization
05:57back in 2004 at the time it was banner
06:01ads that's what it was it was banner ads
06:03it maybe said a different thing to
06:04different cohorts but had nothing to do
06:07point being the term has been so
06:09overused right a term has been so over
06:11it's almost become numb demeaning so I'd
06:13love to hear what your definition of
06:15personalization is and maybe what are
06:17some of the best examples of putting
06:18this to use you're totally right about
06:21how people sort of perceive
06:23personalization and it takes a
06:25monumental effort to build the perfect
06:28algorithm that will work perfectly for
06:30each individual and give them exactly
06:32whatever they want and the truth is is
06:35that a lot of those algorithms are core
06:36competencies of the business it's really
06:38hard for like one company to know
06:40everything about your business we try to
06:42instead of thinking about
06:43personalization in the way that we've
06:45been thinking about it over the last ten
06:46years but instead just think about a
06:48little bit differently which is that
06:49there's there's two extremes one extreme
06:52is you make decisions in your business
06:54and they affect a wide pretty much your
06:57entire customer base we don't like that
06:58because that's not really optimizing for
07:00maybe what we want there's the other
07:01extreme which is personalization and
07:03there's something right in the middle
07:05that I think is really valuable
07:06and when if you really take your entire
07:08customer base and you analyze their
07:11behavior you understand where they're
07:12coming from you understand location you
07:14understand everything about them you can
07:16actually break them up into groups you
07:18can break them into groups of customers
07:20that are your new customers your power
07:22user customers or most loyal customers
07:24customers that are kind of what I would
07:26call casuals of your product they kind
07:28of use your products and I think what
07:29starts to matter more is finding the
07:32core set of groups of users and then
07:34within the business trying to assign
07:35ownership to that people that can really
07:37move the needle like reducing friction
07:40that becomes more important than this
07:42holy grail of one-to-one persuasion
07:44which is seems so complex it's like how
07:45do you even get started so the hotel
07:47check-in maybe if they knew your
07:49favorite drink when you ordered room
07:50service that might be a nice experience
07:52yeah or they just know that you know as
07:55a new customer most people like that
07:57particular drink if they're in that
07:58block of rooms even that's like a
08:00reasonable solution to that problem that
08:02won't take a humongous efforts to get it
08:05right a hundred percent of the time do
08:07you media review have a comment on even
08:09you know on personalization in general
08:10but then also on a particular company
08:12that you think is doing some interesting
08:13things in the space I think when the
08:16early innings of personalization and
08:17personalization is delivering the kind
08:20but sensitive to who you are you want
08:23and what you know the way that a best
08:25friend can be sensitive and I think
08:27while we may not all agree I think that
08:29the future is one where people are going
08:31to crave those types of experiences the
08:33truth will play out we're in the early
08:35innings it's all about location
08:36intelligence understanding moments and
08:39time circumstances we call them where
08:41you might want to take a different
08:43action and deliver a different user
08:45experience I think there's a long
08:46exciting road ahead for that
08:48personalization is a broad topic it can
08:51mean a lot of things and I think at
08:53Foursquare we really believe that
08:54consumer transparency and opt-in is a
08:56big piece of it what is the value for
08:58the user I mean we started with consumer
09:01services there's still 50 million people
09:03a month used across our apps and our
09:05website and we actually invested a lot
09:08in personalization at first almost too
09:10much because let's Crowley our founder
09:12believed that Yelp and Google people
09:15recommendations and like no matter who
09:17you were you said where should I go to
09:19lunch in you know Paris or Chicago and
09:22everyone got the same answer right and
09:25that's kind of broken my wife who's a
09:27farm-to-table organic kind of person and
09:30my dad is a beef potatoes kind of guy
09:32should not get the same recommendations
09:34everyone gets at Foursquare city got an
09:36entirely different set of
09:38recommendations based on the kinds of
09:40places you go to and it used to be
09:41checking in now we just passively are
09:44able to understand when phones go in and
09:45out of 100 million places detecting it
09:47through Wi-Fi triangulation and
09:48Bluetooth and GPS and all of these
09:50signals and so we learned about each
09:52person and we can personalize
09:53recommendations but that you know per se
09:56I don't know how game-changing that is
09:58because if I just want to I really pizza
10:00I just can ask Google for pizza but I
10:02think what's really exploded is
10:05marketing personalization and this is
10:08where like we all we have the saying
10:09that like the places you go is the best
10:11indicator of who you are and they're
10:13wanted to launch a salad line that was
10:17really healthy and so they wanted to go
10:19out and find 20 million Americans who
10:22would actually want a healthy salad and
10:23so we profile hundred 50 million
10:25Americans based on places they go both
10:27through our own apps but through a
10:29partners using our technology and then
10:31you know it's very different than you
10:33know what we do for a miser butch which
10:35is go out and match let's say a certain
10:37beer brand or spirits brand with like a
10:40twenty-something going to crap cocktail
10:42bars which are different than dive bars
10:44and we understand every place and so
10:46where you go creates this picture of
10:48your values and so we could assemble
10:50marketing for Panera and launch this
10:52thing and measure against millions of
10:56people a be test in the real world
10:57whether the ads drove people
10:59incrementally in to Panera locations and
11:01we can show the ROI so that kind of
11:04personalization that has a clear return
11:07on investment is exploding because it is
11:10not a one-to-one marketing but it is is
11:12micro targeting of different segments
11:15and that's that's driving business and
11:16these traditional offline businesses had
11:18no way of doing that the way digital
11:19business did and the importance of
11:21deliver the future to users at the same
11:23time that they are monetized very very
11:25effective absolutely and I think we're
11:27dependent on product developers to put
11:30more resources toward innovating in this
11:32area and not allowing just the googles
11:34and Facebooks to own it so in prep for
11:37I spent time rewatching Minority Report
11:40and it's sudden in the year 2050 for as
11:43you're walking around this world
11:44everything is scanning your eyes to know
11:46who you are and you were being marketed
11:48to very specifically right this one on
11:50one use case of warning I know you
11:52bought this at the gap last week do you
11:54want to buy another pair in black it's
11:55on sale what I want to kind of get out
11:58here is kind of you know everything in
11:59this world is known including future
12:01actions so the question is like how do
12:04you ensure customer privacy and remove
12:06the creep factor from some of these
12:07experiences and maybe on the flip side
12:10like will our behaviors change enough so
12:12that we don't care well very interesting
12:15movie Minority Report the consultants
12:18that helped create an image of this
12:20world of the technical consultants
12:21formed a company called oblong to try to
12:23actually build this future at least the
12:26part of it where you can interact with a
12:28wall a digital wall then I think you
12:31baited the next company that at clinica
12:33kramer has been working on his video
12:36conferencing that really really works
12:39seamlessly so here it's here's something
12:40that I would love to
12:41first in life when I walk into a
12:43conference room this is personalization
12:44I want it yes I wanted to take my image
12:47I want to scan my damn retina I want it
12:49to do face recognition I wanted to know
12:50that I'm supposed to be on the call that
12:53I'm supposed to be on and let me in I
12:54don't want to have to knock and it
12:56should just all work so yes it does take
12:58trust yeah and something we haven't
13:01talked about yet but it does take a
13:02brand that commands trust from users
13:05that opt-in and you're with the program
13:07I think it comes back to we just really
13:10believe that users should be in control
13:12of the choice and transparency and so
13:15you know we try to live that so there
13:18are data brokers out there there are
13:20like flashlight apps asking for your
13:2324/7 location information why should the
13:25flashlight app over here 24/7 like what
13:27value is the flashlight app providing
13:29you we just don't believe that that is
13:32gonna be sustainable we don't
13:33participate in any of that I mean
13:34everything we do is about creating a
13:36better user experience is giving you the
13:38right information at the right time or a
13:40coupon that you that you've signed up
13:42for remember to use it while you're at
13:44Walgreens you know or it's enabling like
13:47we enable for hotels the budget hotels
13:49have gotten rid of their concierge shoes
13:51and they're just using the Foursquare
13:53recommendation engine do the hotels in
13:55the future and so all these things are
13:57about creating better user experiences
13:59but they're very transparent they know
14:01they're signing up because they're
14:02getting value and so I think that's key
14:04the bad marketing example in Minority
14:07Report is like remember when people used
14:10to say all the future in global
14:11marketing is if you're near a Starbucks
14:12you're gonna get a coupon for a
14:14Frappuccino well I got news for you
14:16everyone is always nearest
14:18Starbucks like you know like it would be
14:22a nightmare and so like we've really
14:23built the technology to understand you
14:26know that you're in this like really
14:27cool bakery that makes this incredible
14:29cupcakes or you're you know you're
14:31across the street at the gym and those
14:33are very different moments there's
14:34different contacts and you've got to be
14:37super precise down to a hundred million
14:39places to do that right and so that's
14:41key is not bothering people you gotta be
14:43super relevant if you're gonna tap them
14:45on the shoulder and I think that's the
14:47future I think traditionally a lot of
14:49these experiences rely
14:50you forgetting that you have this great
14:51coupon or offer right that definitely
14:53needs to change and I think that's
14:55shifting a lot so I think that was an
14:56interesting point before we wrap up I'm
14:58just gonna throw this out there is this
15:00a misconception or it's true that good
15:01data scientists will find value for your
15:03business the truth is that our tools are
15:05not necessarily always powerful for them
15:07good data science teams want to work on
15:09the hardest most challenging data
15:10science problems that exist in the
15:12company they don't want to be just
15:13trending a graph over time out putting
15:16it into or putting it into Excel and
15:17putting it into a deck you've hired
15:19these people they're extremely expensive
15:21and we utilize them to do very
15:23simplistic math on analyzing the
15:26business and so I think is valuable is
15:28trying to find a more sustainable way of
15:30handling this which is that 90% of a
15:32business's questions are pretty
15:34reasonably easy to get to it's just the
15:36data and the analysis and there's some
15:37edge cases that you have to kind of
15:39figure out that part's annoying and hard
15:40but 90% of your questions are pretty
15:42easy there's this 10% of really
15:44important sophisticated questions that a
15:46business needs to answer and the data
15:48science team is great for answering
15:49those extremely hard questions that
15:51really no tool can really answer for
15:53them yeah okay I think in a space that's
15:56so crowded hopefully we have a little
15:58bit more clarity on how to balance
15:59privacy with personalization how to
16:01remove friction how do I remove breakage
16:04I don't also think about customer
16:05experiences that are surprising to light
16:06versus solely for monetization thank you
16:09sue hell yelling jump
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