The acquisition of the Martech company DynamicYield by McDonalds might raise some eye brows. A few of you may even scratch your heads and say “Why?”
I have a hypothesis on why they did it.
No.. no.. its not because I haven’t eaten McDonalds in 35 years and some machine learning algorithm has made me conversion target numero uno.
As a teenager my favourite and most transformative novel was William Gibson’s Neuromancer.
The thing about this book and pretty much every other decent Cyber Punk novel of the 80’s and 90’ was that much of the future was highly allusionary. These books never said “The future is exactly this” they said “Based on where we are today - this is how the future might manifest itself - connect the dots”.
Themes and scenes always presented a rough future where technology was rammed into the fabric of life whether we liked it or not - as if the collision course between humanity, machine and technology was unavoidable and ultimately very grim.
A central theme was that in the future it is corporations, not governments, who would rule and control the world.
It was dirty, gritty science fiction.
But history has shown that science fiction writers often get the future right.
Let’s Be Tech
The purchase of Dynamic Yield reminded me of an unpublished view I started to write about Bernard Marr’s article on Ikea.
The long story short is that Ikea have publicised a number of technology led ventures including Autonomous Trucks, Augmented Reality, really easy eCommerce process that works and so on that made indications that “IKEA is transforming into a tech company”.
Bernard’s words not mine.
My view, now suitably compressed into two sentences, was that IKEA is going to have trouble transforming into a technology company because it lacks all the necessary pedigree to do so. You need to live and breath technology.
And it doesn’t really make sense.
IKEA would do great(er) by applying tech to improve operations, the planet and customer service all the while focusing on making great furniture.
Many companies would be best to following a similar approach on technology.
We can't all be Apple or Google.
Yet that said lots of Banks, Retailers, Mining and Communications organisations have signalled that the future is not physical it is digital. I thought that this was slightly delusional view driven by disconnected boards and senior executives.
Then McDonalds bought DynamicYield.
I take it back now. I realise the bleak Cyber Punk future is being written in front of our very eyes - Science Fiction will prove yet again to be science fact.
“Why so serious?”
I considered that the purchase might be driven by McDonalds stagnating financial position. Nope - I was surprised to find that McDonalds market capitalisation has grown from 30 odd Billion in 2006 to a whopping 143 Billion in 2018. Pretty impressive.
Cheese Burgers going from strength to strength.
Consider though that in a similar time span Google has grown from 122B market cap to an astronomical 862B.
McDonalds is 63 something years old. Google is 30 years old.
McDonalds feeds people (albiet poor food). Google assists people find pictures of cats.. And your local McDonalds restaurant.
The reality is that now the money is in tech. In fact in 2018 the top 60 tech companies represented 56.8 Trillion in market value.
Food businesses didn’t even come close.
Logically you wouldn’t spend $300M on a MarTech company if it were purely for functional reasons. License fees would not even come close to that in our life times.
Maybe it is one way to ensure your Martech actually delivers on its promise by owning the companies that provide it.
Developing Soylent Green might be a more logical step… bugger that’s been done already…
Wait... wait... the other might be to purchase a tech company that makes nutritious meat indistinguishable from the real thing by using vegetable protein and thus reducing all kinds of environmental and animal suffering. No, no too hard.
The other reason is if if you had a multi-decade plan to properly transform your business into a technology company you might start by buying and assimilating lots of technology companies.
Begin by owning digital technology you can apply profitably to your own business as well as others. The more you can do this and improve the core of what you do the better.
McDonalds I am sure has cottoned on to the fact that in the future people will be far more conscious of what they eat and yet seemingly have demonstrated that they have no qualms about what they feed their minds.
So it is prudent to diversify deeply into digital tech.
I reckon we’ll start to see a more publicised trend of “old” world businesses building tech empires to reinvent themselves.
Luckily this is all science fiction - uncontrolled corporations would never rule our lives. And no one has multi-decade plans for world domination.
Except maybe China.