The Future of Business

Seldom does a student feel that what he has learned in a specific course is industry applicable. A possible consequence of this is that 1 of every 2 college students seek career services in their universities, although only 8% of all students find them very helpful (Auter & Marken, 2016). At U.C. Berkeley, there was an exception. What was taught in the AMAZOOGLE course by Shomit Ghose transcended the norm. Students were inspired by every topic as they realized that grasping the importance of data, understanding methods of user manipulation, and acquiring a comprehension of effective communication are significantly applicable in most contexts of today’s world.

1. Content

Data-driven

Why do companies like Google or Amazon thrive in this over-competitive, globalized business environment? The answer is data, data, and more data. Their business models incorporate the basis of utilizing data-hungriness and data-richness from distinct and multi-dimensional sources to predict behavior, drive actions, and make a profit (Ghose, 2019).

The diagram shown above illustrates the cycle of successful business practices. An important aspect is ethics because, under the assumption that the legal system converges towards ethical standards in business practices and data utilization, those with ethics ingrained from the start will be the ones who thrive.

Behavioral Economics

What does the contagion effect, anchoring, dark patterns, scarcity, and choice architecture have in common? They are all behavioral economics techniques. Consumers are constantly being experimented on to drive their behavior and maximize expenditure (Mathur, et al., 2019). This knowledge and the availability of inexpensive A|B experimentation methods, enable companies to get a very valuable feedback loop that optimizes their operations. Additionally, techniques can be customized to drive different users within the same platform.

Some examples found in Mathur’s research include the following:

Consumers and corporations alike must understand that businesses that will continue being competitive need to act as true data-driven companies. Users and governments must assure people’s ability to choose and protect their autonomy. As companies seek to generate more paying customers, users should remember that their data has value.

Pitching

Capital is the motor through which companies run. Most companies go through the process of raising capital, and even though it is hard, there are many research-backed recommendations to make a great impression. Choosing an investor can be overwhelming. Some of the best practices include filtering through investment quantity, credibility, industries, network, track record, mission alignment, autonomy, availability, location, and terms (Cremades, 2018). However, when it comes to pitching, subtle attitudes can be extremely beneficial. “Impression formation happens quickly, and has long-lasting effects on attitudes, expectations, and behavior (Gillath, Bahns, Ge, & Crandall, 2012)”. Given its importance, how can someone use impressions in their favor? Here are some recommendations:

· Dress appropriately: “A well-defined look provides the best professional image for an individual making him look smart personally as well as professionally, moreover, enhancing the organization’s overall professional image (Raj, Khattar, & Nagpal, 2017).” Thinking of how potential investors expect someone to dress could be beneficial.

· Smile: “People react very fast to happy faces with approach behavior […] This might be the case because approaching a happy person might often have benefits and rarely costs (Nikitin & Freund, 2019).”

· Be likable: “Likeability in interpersonal business interactions is positively related to the willingness of both sides of the dyad to collaborate in the future (Pulles & Hartman, 2017).” This promotes people to be friendly, nice, polite, and pleasant to be around (2017).

· Open body language: “Research confirms that 60 to 90% of our communication with others is nonverbal (Kar & Kar, 2017)”. Some recommendations include not crossing arms or legs, having natural eye contact, assimilating personal space, relaxing your shoulders, nodding, and mirroring (2017).

· Avoid speaking too fast: “Talkers typically use a slow speaking rate when producing clear speech, a speaking style that has been widely shown to improve intelligibility over conversational speech in difficult communication environments (Krause & Panagiotopoulos, 2019).”

· Ask for feedback: This feedback might be valuable in some cases. However, before doing so one should ask themself: what three things went right, what had gone better in the past, and what should be done for future instances. Not two persons are alike, and feedback should be taken with a grain of salt before imposing it over ones’ judgment. Buckingham and Goodall state that, “the first problem with feedback is that humans are unreliable raters of other humans. Over the past 40 years psychometricians have shown in study after study that people don’t have the objectivity to hold in their heads a stable definition of an abstract quality, such as business acumen or assertiveness, and then accurately evaluate someone else on it (2019).”

· Be thankful: “Researchers studying gratitude have found that being thankful and expressing it to others is good for our health and happiness. Not only does it feel good, but it also helps us build trust and closer bonds with the people around us (Suttie, 2019).”

· End presentations on a high note: Finish with a peak ending. “The rule says that when we remember an event, we assign the greatest weight to its most intense moment (the peak) and how it culminates (the end) (Pink, 2019).”

When raising capital, one must use all the tools available to get the odds in their favor.

2. Project Example

An instance in which these principles of a data-driven company could be applied is the following:

Taking into consideration the following market size:

With an innovative market opportunity:

A data-driven business model:

With multi-dimensionality of data:

And behavioral economics in mind:

3. Resolution

Understanding data utilization and behavioral economics techniques in-depth is to grasp how and why companies prosper from inception to market domination. The information presented above is applicable for an individual to understand the instances in which we are being manipulated, for an investor to dig into the value creation of these methodologies within a business, and for an entrepreneur or employee to impulse these tools of optimization in business using research-based pitching techniques. Data can be used to generate insights, and through those insights, behavior can be driven.

References

Auter, Z., & Marken, S. (2016, December 13). One in Six U.S. Grads Say Career Services Was Very Helpful. Retrieved from https://news.gallup.com/poll/199307/one-six-grads-say-career-services-helpful.aspxn

Buckingham, M., & Goodall, A. (2019, September 17). Why Feedback Rarely Does What It’s Meant To. Retrieved from https://hbr.org/2019/03/the-feedback-fallacy

Cremades, A. (2018, December 11). How To Find The Right VC For Your Startup. Retrieved from https://www.forbes.com/sites/alejandrocremades/2018/12/11/how-to-find-the-right-vc-for-your-startup/#794aaf2188f2

Ghose, S. (2019, December 11). The 7 Habits of Highly Effective AI. Retrieved from https://scet.berkeley.edu/the-7-habits-of-highly-effective-ai/

Gillath, O., Bahns, A. J., Ge, F., & Crandall, C. S. (2012). Shoes as a source of first impressions. Journal of Research in Personality, 46(4), 423–430. doi: 10.1016/j.jrp.2012.04.003

Kar, A. K., & Kar, A. K. (2017). How to walk your talk: Effective use of body language for business professionals. IUP Journal of Soft Skills, 11(1), 16.

Krause, J. C., & Panagiotopoulos, A. P. (2019). Speaking Clearly for Older Adults With Normal Hearing: The Role of Speaking Rate. Journal of Speech, Language, and Hearing Research, 62(10), 3851–3859.

Mathur, A., Acar, G., Friedman, M. J., Lucherini, E., Mayer, J., Chetty, M., & Narayanan, A. (2019). Dark Patterns at Scale. Proceedings of the ACM on Human-Computer Interaction, 3(CSCW), 1–32. doi: 10.1145/3359183

Nikitin, J., & Freund, A. M. (2019). The Motivational Power of the Happy Face. Brain sciences, 9(1), 6.

Pink, D. H. (2019). When: The scientific secrets of perfect timing. Penguin Press.

Pulles, N. J., & Hartman, P. (2017). Likeability and its effect on outcomes of interpersonal interaction. Industrial marketing management, 66, 56–63.

Raj, P., Khattar, K., & Nagpal, R. (2017). “ Dress to Impress”: The Impact of Power Dressing. IUP Journal of Soft Skills, 11(3), 45–54.

Scheiber, N. (2017, April 2). How Uber Uses Psychological Tricks to Push Its Drivers’ Buttons. Retrieved from https://www.nytimes.com/interactive/2017/04/02/technology/uber-drivers-psychological-tricks.html

Suttie, J. (2019, December 20). The Ripple Effects of a Thank You. Retrieved from https://greatergood.berkeley.edu/article/item/the_ripple_effects_of_a_thank_you