 So, it's a great pleasure to be here, Privyet, that's about the Russian I know, sorry. You may want to get the headphones if you, because I'm obviously not going to speak in Russian, so the headphones are outside, maybe we can bring them inside or something. But thanks very much for having me, thanks to Speerbank for bringing me here, great to be part of this launch. So, I'm going to talk to you about what's happening, what the future of mobile and applications could mean. I live in Switzerland, neutral country, I also spend a lot of time in America, so if I speak too quickly, please wave. If you're Twittering, I'm G. Leonhard on Twitter, you can also ask questions, I'll try to answer them later. Most importantly, I want to start off by saying, okay, you guys may have never seen the future as before. Somebody who talks about the future, that sounds kind of crazy actually, because you really can't predict the future. My job is to share some foresight. Foresight are essentially this, listening to what's happening and trying to find conclusions of where to go. There's a great saying by a hockey player, I don't know if you're into hockey, but this guy says basically, a skate to where the puck, you know, the ball, the hockey ball, a skate to where the puck is going to be, not where it is. So we have to go into a future where we don't know what it is today. I mean, clearly you can see, for example, what's happening in the airline business, you know, in the airplane business, is many airlines are now looking to virtually transport people in five years without the airplane. So you buy a ticket to virtually go with holographic or telepresence, which is not the same than going with an airplane. So business is really changing. Here's all my clients that I work with. There's over 100 companies that we work with. There's 25 futurists. Okay, let me get into the topic. First of all, how often have you been to a bar lately? To where there's guys sitting around and talking to each other about the apps that they have on the mobile phone? You used to go to a bar to talk about football or cars or other things. Now you go to a bar and people compare what apps they have. I'm sure you've seen this. So mobile phones and mobile applications have come to be everywhere. And now if you give your little child an iPad, this is what happens. Basically kids are very much into the touch screen, just like old people also. So if you give your five-year-old the iPad, they figure it out in two minutes. What happens? The entire behavior change that we take a long time. Now see what happens when you give somebody something that's not an iPad, like this kid is trying to zoom the page, right? Because they're so used to a different kind of interface, right? Zoom the page from the iPad. Now this will be the customer of tomorrow. These people will grow up to expect us to do different things. They will not be business as usual. You can see, for example, the music business has basically died because of different expectations of people. They have lost 72% in revenues for the last ten years. The banking business is now in the business of disruption because all of a sudden people are saying we can pay with the mobile, we can send money directly using digital means, we can pay with Facebook credits, we can buy a ticket on Facebook, digital currencies, Bitcoin. You have all these things happening. It's disruption. But the biggest thing that's happening on the internet now in the last three years is that it has finally become really useful. It has become social. All of you, I'm sure, are a member of either Facebook or LinkedIn or Zing in Germany or basically we've all become interconnected. Many people now, before you go to a meeting, you go to LinkedIn to look at the person that you're going to meet, to look at their profile, to get information. The internet has become mobile. For example, in all developing countries, most of the internet access is mobile internet access. So Kleina Perkins, who is the lead investor in Facebook, has called this Solomo, Social Local Mobile, and that is the path for the future. Social Local Mobile and the cloud. The cloud means that all our music, our movies, our education, our health records is moving into the cloud and we access through the cloud. Which is very good news for a lot of things, but it's also difficult because the cloud means that we're much more powerful. I don't know if some of you may know this app called Flight Tracker. Okay, Flight Tracker, you download Flight Tracker and it tells you what's happening with your flight. So when you're standing at the gate, it doesn't work everywhere, but if you stand at the gate, you can check and you have more information about the flight than the woman at the gate. The woman who is in charge of the service, you know 10 minutes before her what's happening with the flight because better data in Flight Tracker. So it means empowerment of the consumer and basically the entire business of apps is based on this kind of idea. Now let's make no mistake about this, this is not always good for business because it means empowerment of the consumer. And as consumers, we like to be empowered, but as businesses, the more power our users have, the harder it is for us. So it's a challenge for us to create a business. I mean, if we're looking what's happening in Russia, I just look very quickly, but the internet and social, local, mobile is really taken off. You can see, for example, the biggest growth here last year in terms of online audience was in Russia, 14% of growth. And this number you can't really see down here, but it's the smallest cities in Russia that are growing the most in terms of internet access. So numbers are quite amazing and for big companies, banks, airlines, insurance companies, it's a little bit like your turtle on the skateboard. So now you have to get on very quickly. For example, Twitter. Any Twitter users here who's using Twitter? Let me see who's, okay, good. Keep Twittering. Twitter is a sign, for example, that many companies are now moving the customer service to Twitter. So you can complain about what they're doing, they will answer you on Twitter in real time. That brings up a lot of questions. But clearly, as you can see here, business and life is shifting away from the computer, from computing devices to mobile devices. We can see this here in this graph from Pingdom. In America, it's only 8% is on the mobile internet and Africa is twice as big already because they don't have regular internet. And Europe is quite a bit behind. But my prediction is this, by 2017, I think up to 50% of our entire internet activities will be on mobile devices. This is primarily because it will become a lot cheaper. So right now, I don't know what the iPhone costs here in Russia, but 800 euros, 1000 euros, very expensive. But in India, you can buy a tablet device, an Android tablet called the Aakash, for $35. You can expect devices to go in the neighborhood of 10 euros, not Apple devices, Android devices. And you can expect internet access to drop to almost free. So when we have this, mobile business is going to be 50% of how people interact and how they do stuff. Look at this charity from Kleiner Perkins, showing clearly how much we have left to go from roughly one billion smartphones to maybe in seven to eight years, 5.6 billion smartphones. This is a huge opportunity for everyone, but it requires new business models. As we can see with the movie business or the newspaper business, we can't take the old business and just put it onto an app. Because it will crash, it won't work, because people act differently when they are connected. We have to actually reinvent the business model. There's a great report that just came out from Raikou and the economist, talking about all the disruptions that are happening. I would encourage you to download, this is about 80 pages, it's free. And they're talking about all the stuff like cheap smartphones for all, business-oriented social networks, data mining, cloud computing, sounds very technical, but that is a description of what's happened in the future. The bottom line of this will be for me to tell you basically you have to disrupt something or you're going to be disrupted. You cannot just sit there and wait for somebody else to invent something and then you'll do the same, because the speed is much quicker now. In fact, I would say that you have to disrupt yourself. So I'm hoping that Spurbank will disrupt itself with its own app to reinvent how business works, because that's really what we have to do. Evernote is a great example of disrupting the process. Dropbox, you guys know Dropbox? Same example, disruption of how this works. So basically what we're seeing here is in this graph, this is the most dramatic graph, it's actually wrong because it happens earlier, is by 2014 more people will use the mobile than the computer to go on the internet. In other words, you could basically say if you're not mobile, you won't exist. If you're not actually offering your products in a mobile way, a lot of people won't see you. If I'm going to your website and your website isn't mobile on my mobile device, then I just go somewhere else. This is quite a challenge, because obviously it's different. Amazon has been very good at this disruption. Think about this, Amazon has created in five years the effect that more people buy books on the Kindle. I'm sure you have Kindle users here, even though it's not in this country, but people are still buying Kindle everywhere. They sell more books on the Kindle than they sell in print in five years. So that is real disruption, but the other thing that Amazon has done, very successfully, is this. I don't know if you have WD-40 in Russia, but they lubricate, right? They make it work. Amazon has spent hundreds of billions of dollars in creating a new business, the Kindle business, which didn't exist. So my point to you is that you have to both disrupt and you have to lubricate, you have to create a new business. You have to become a market maker. Don't be a market waiter. You can't afford to be a market waiter, especially not in Russia, because things are moving very, very quickly. And all these markets much quicker than in Germany or Switzerland. In fact, you could say all stats point in one direction, is that all of the interesting innovations on the social, local, mobile internet will not happen in developed countries, so-called developed countries like Germany or America. They will happen in emerging, even though Russia doesn't really quite fit that, they will happen in Russia, India, China, Brazil first, because of the speed. Banking, here's a quote from somebody in 2000 from Forbes magazine saying, the internet banking has failed to live up to its expectation. That was in 2000. It was too early, but sometimes change takes longer, but when it takes off, it's much bigger. That's what we're witnessing right now. It took longer, but now it's a take-off point. So it's a point of where all of a sudden it works. I mean, look at the mobile internet uses distribution in Russia. It's between 18 and 35 years old is exactly the target group you want. Those are the ones using mobile internet. And they may be the early adopters here right now, especially on the iPhone, but they are the leaders. So you may have a family like this, right? There's us reading the newspaper and our kids are over there on the device. And now around the world 50% of people who are watching television are on a second screen, you know, the mobile phone or the tablet, talking with their friends about the TV show. It's called the second screen. And there's a whole new generation of people who are talking about social television and how we talk to each other while we're watching TV. So there are big differences, but they will flatten out. Well, we can't go through this really in detail. It's very hard to see here, but I call this the app of financial banking, money, financial services is a huge opportunity for this way of connecting people through social and local. Take this example, American Express has an app that's called the Open Forum. We have thousands or tens of thousands or actually about 200,000 people talking about financial services and there's no selling whatsoever of American Express. So in a way you could say that mobile money also means social banking, whatever that could mean. Here's a good symbol for this. Social banking means that your bank is now becoming a different place. Your institution is becoming a place for conversation, which is actually quite difficult because try to have a conversation with 20 million people. The number is huge. Most importantly, this is the biggest bank in Brazil. I do quite a bit of work in Brazil. This bank has 127,000 followers on Twitter. This bank has a real conversation with all the people. Every day they have 28 people who are Twittering and doing customer service and product development through Twitter. Clearly that's gonna happen here as well. I mean, in many ways, Twitter is already referred to as being TNN, the Twitter news network. And many people are saying Twitter will be as big as CNN in terms of the reach. So I think for this kind of thing, if we think about engagement, it's much better than enslavement because especially in the financial sector and in telecom, it was all about owning the customer, locking down the customer and all these nice things. Now it's about engagement. And if apps are going to be successful, they have to engage people. They can't imprison them. So what's happening is now that because everything is starting to be a screen, if sometimes when you take a taxi in a big city, you see the driver has five screens. Navigation and Facebook and the taxi thing and all screens are everywhere. And rather than having paper and books, all of a sudden we're in a world of screens and data. And that's going to take off. And you're going to feel like minority report, okay? Constant data screens, in fact, probably too many. There's already people who have what's called screen addiction. They always have to go do something while they're having dinner. Or in America, 28% of people when they wake up at night do a Facebook update. Crazy, Americans, you know, can you say? Anyway, now every screen can become a connected TV and radio. This is a huge opportunity for companies to broadcast, to become broadcasters, to send videos, to talk to people, to have a video channel. And video is obviously the most popular on the internet. So creating video channels for companies. Because now we used to be people of the print, you know, the mailbox and the newspaper. Now we're becoming people of the cloud. And this is quite worrisome for a lot of reasons because of data protection, for example. What happens with all my data? As you can see, Facebook was not very popular in the IPO for this reason. People are not sure that Facebook will protect us in terms of the data. This is the primary reason, by view. So this data cloud is going to explode. So whoever has a business of connecting the crowd, the people, and the cloud, that's a really good business. Connecting the people with the cloud. And there's hundreds of examples for how this works now. Very powerful stuff like Netflix and Swook in Russia and Spotify. So people of the cloud now have all these options. I'm sure that there are many users, for example, e-books, Instapaper, Flipboard, all the stuff that works in the cloud. So banking in the cloud, next is education. In the cloud. Being able to study. I can add that later. Oh, it got kicked out there. Sorry. Okay, Evernote is in the cloud, too. So we're moving from a society that used to be TV centric. You can see yourself here from 20 years ago. A society of TV centric where 75% of people watched the same TV show. In most countries in America was up to 90%. Today we have a society that's becoming mobile centric. And the television is still a big part of that, too. But think about that. What would you rather not have? I mean, there's many people who sleep with their mobile right on the nightstand, right? I'm sure you guys do the blackberry in the bathroom. So they're becoming mobile centric. And television now, television is lucky. I don't know if there's any television people here. But television is very lucky because television is converging with the internet. It's becoming the same thing. If television wasn't converging with the internet, it would be useless. Now, every television is connected to the internet. As you can see right here in Russia, Cartina TV already has a direct channel that you can use in this box, right? Going on with over-the-top content. A quick word about advertising. I think this will be interesting to discuss later. Advertising, as I'm sure you're aware of, advertising is a $650 billion business globally. And then there's marketing and public relations and various kind of noise-making and data mining. It's roughly $1 trillion. So now, that $1 trillion is shifting budgets into mobile, into social, and into digital. And in some countries, it takes longer. In America, we've had newspapers declined by 41% last year because that money is going into other places, into digital places. So we're looking at roughly a wave of about 30% $300 billion shifting into mobile advertising, social advertising, interactive advertising, game-based advertising. So if you're in the advertising business, you will essentially have to reinvent advertising, which is good news because the old advertising was bad anyway. We can get rid of it. Important fact, the customer of tomorrow is this kind of customer. You may have seen this video. It's a FedEx guy who delivers a computer and throws it, doesn't even ring the bell, just throws it in the garden. Now. Huh? It was a flex screen. Yes. So security camera recorded him, of course, right? And within eight hours, he had like 850,000 views. The stock went down 4% for a day, came back then. Of course, it became a huge thing. Basically now, your customers are expecting radical transparency. Your customers are going to expect that you are going to constantly keep an eye on them. And this is something to expect. I mean, if you're going out, for example, with a mobile app or with a social engagement, you better have to clean up before you do that because everything is going to come out. It's very hard news for companies that used to be closed, especially financial services and those kind of things. And then we have nowness, so-called nowness. That means a lot of people aren't interested what was good last year. They're interested in what's good now. And Twitter is the expression of that nowness. So when you go to sushi in London, you don't go to Google, you go to search.twitter.com and you type in sushi and you get live reviews from people who are there now. And this is also what people are expecting of customer service. If you launch a mobile app, they're not going to want to call a number and wait for an hour. They're going to expect immediate conversation on the app. Really changes the game. So here's some challenges for you as far as business is concerned to think about. First, radical consumer empowerment. And this is not just like an idealistic headline. This is a tough reality. Consumer empowerment is quite difficult for those providing it. For those having it, it's good. Massive competition for attention. Do you know that most apps, about 92% of apps are installed and used once and never visit again? Because there's something else. If you're going to be good at apps, you have to really, really get and keep people's attention. Real-time interactions, zero tolerance for technical problems. I mean, this is pretty tough. You should talk about that later when you talk about your app. Constant stream of added values. Quite a challenge. And here's the other challenge. Many big companies are talking about, the principle number one is to plan for ROI, return of investment. Financial planning, projections. But now because of speed and because of what's happening in digital communications, I call this return on involvement. We have to switch from the idea of getting back our money from investment to the idea of how we can involve our customers. Whether it's businesses or consumers. A Chinese saying basically said, okay, involve me and I'll understand. Confucius said that rather than advertise to me. I'll skip this because we want to get to the end so we can have our conversation. Some great things about apps. Number one, you can get data from people. But here's a piece of warning. I don't yet or use any data without explicit permission. That can kill you. You get locations. You get stickiness. This is the great thing about apps. But getting user permission for data is crucial. Getting them to allow you to actually do something with the data. Another word of caution is that many of my clients are building an app because they want to have a better mousetrap. They want to do the same thing with the customer that did before which is to lock up the customer into a system where they can't leave. Telecoms like to do this. I know there's any telecoms around here. Or media companies. That will be very hard to do. We have to essentially get rid of this idea of a captive customer. There's no such thing. I would propose to change that into a loving customer. Think about what people love, what brands. Apple is a cult, right? People love Apple by whatever Apple does. People love Google still also. Maybe people like VContactor. I know they love VContactor, I'm sure. They love Twitter. When people talk about brands today, they talk about love. Not about captive. So this kind of idea, especially famous with big companies, that could very well kill you in keeping a captive customer. Great quote from Doc Searle says, in the future a free customer will prove to be more valuable than a captive one. So if you can set your customer free, you'll make a lot more money, turn them into empowered users. The other thing is today that, because today we're becoming a global society, a networked society, everything that we do is really about trust. I mean, not just in financial services, but everywhere. Who are you going to trust? Who are you going to trust for your car, for your data, for your education, for your money? Trust becomes essentially the currency. And this is really the main thing about apps. When you're using apps, you're using that app to create trust. And trust is also based on transparency because I can't trust people I don't really know. So if you want people to trust them, to trust you as a business, you have to publish more things. If I see your name on LinkedIn and it says XYZ name and then just dot, dot, dot, no other information. Maybe you're famous and I don't know you or you don't want to talk. One of the two. But it doesn't create trust if I can't look at you. Trust is something that we need to be open with. So trust is the new currency. Trust is the real money. And whatever you do on mobile apps or with technology has to reflect the trust factor because that's where the money comes from. I trust Dropbox not to delete my files. I trust Google not to publish all my emails. And I did trust Facebook for a while. Maybe I still trust them. I have to think about that. Okay, I'm coming to the end here. So Facebook is a great example. Facebook's IPO, I'm sure you've watched it. Hopefully you have not bought any Facebook stock. But I'm watching this, but basically what's happening here is that we can say some walled gardens like Facebook or Apple, they're actually quite nice. We have nice flowers and beautiful place. But in general, open platforms are the feature because to keep a close platform attractive, you have to invest a lot of energy and lock people inside the platform. It's possible, as Apple has proven, to be a benevolent dictator is possible. But don't bank on it. I mean, that would be very, very hard to copy. So open systems like HTML5 and here's a rule for apps that not all may agree with. If you can do it on the open mobile internet, you should. If you can't do it on the open and mobile and public internet, you can use an app. That is the reason why you use an app. For example, banking is very hard to do in a secure way on a web app, right? But that's sort of the rule. We'll talk more about that stuff later. Here's a quick summary and then we can have some questions. Otherwise I can talk until tomorrow morning and we'll still be here hungry. So the future is social, local, mobile and the cloud. And that's basically a recipe for the future. It's not about the computer. It's not about the internet. It's not about all that stuff that we had until now. This is actually a new generation of the web and of course the word open also plays in there. User control. The more user control you give your users, the more power you shift to the more success you'll have. But this is difficult. Clearly that's difficult because you're telling your consumer to tell you what the product should cost or what the next edition of the car should look like. I mean, this is quite hard to do. Disruption and lubrication. You have to disrupt something. I mean, I'm sure some of the panelists will tell us a story about what they can disrupt. But if you look at the last 10 years, the successful businesses around the world have been those that have disrupted others. Skype, eBay, Twitter, Amazon, Google, YouTube, Facebook. I mean, the examples go on forever. It's about disruption and lubrication. Make it sticky. Keep in mind when you launch a mobile product, most people will never use it again if they don't have a reason to come back. So making it sticky is crucial. It can't just be a copy of some other boring stuff that you did before. If you're a bank, you're now in the social business. You have to get connected and open up. If you're a financial institution, that's inevitable. Even in Switzerland, the banks are doing this. Cloud intelligence, getting data from the cloud, dealing with the cloud. Transparency. If you're gonna be part of this sort of new future of getting connected, you have to become more transparent and more open and you have to get ready for that. It's very hard. Sometimes I say it's very hard to lie on the internet. It's possible, but you have to be very good at it. It's very hard to tell people stuff that it's not so because they can look it up and they can talk about it. This brings me to a very important point we'll discuss in the panel. I believe that many services that are launched on the web today have to be in some sort of form-free initially. Because consumers today really love this idea of getting something that gets them inside without a penalty. This is a recipe for the future of print, newspapers, music, media. A freemium model. Avenote, of course, is a freemium model, for example. Okay, and the trust factor. Talked about that already. My final word is a great cartoon by U. McLaught, who says, engage or die. This is our future. We can choose to engage and that will be there. If we don't engage, we'll probably die. Thanks very much for listening. Thank you very much, Gert. I can't...