Lawrence Scott

Natives and Immigrants at the Digital Border

I had a chance recently to hear the CTO of a large institution for higher education talk about his customers (also known as college students). It was an enlightening conversation. Personally, I am at the tail end of the boomer generation and because I work at a technology company, I like to get independent validation of how consumer behavior is shaped by next generation technologies.

One of the first slides depicted the difference between "digital natives" and "digital immigrants". Simply put, "digital natives" have grown up with the tools that today make technology nearly ubiquitous, always on, and personally accessible. And the "immigrants" are those from another galaxy. So in a tribute to Jeff Foxworthy, if you print your email or call someone to ask if they got your email, you must be an immigrant!

Why is this relevant? I framed a presentation I made recently in the context of social networking as a fundamental behavior change (notice I did not say technology) that "immigrants" who run today's financial institutions must confront. More fascinating to me by this higher education CTO: the difference between outgoing seniors and incoming freshmen was distinct and discernible. Translation: the velocity of change in consumer behavior is accelerating. And so the Web 2 consumer segment is evolving and morphing. A new banking customer two years ago will have a different set of needs than the one who graduates this Spring.

So what are the implications for my business and my customers' business? They are probably captured best in a summary of a conversation I had with a senior guy at a Web 2 early stage start up on a recent flight from San Francisco to Boston.

- One third of his target market turns over every 90 days
- After six months, they abandoned their current software development platform and are now rewriting entirely
- They won't own their next generation of infrastructure; they plan to lease capacity (from a Sun customer, phew!) and utilize a dynamic provisioning model
- PayPal may well be their preferred payment platform
- Social networking is the fundamental model for their approach to the business opportunity they plan to exploit

Bottom line: it is a wholly new world. Immigrants like me will struggle to keep pace with natives like Brian above. Financial institutions would do well to respect the lessons here. And many thanks to natives like Brian - I hope you'll let me keep my passport!

Posted at 03:24PM Mar 13, 2008 by lscott97 in Sun  |  Comments[1]