Mall of Africa - A new Sense of "Placelessness" for All?

If you do not live close to Gauteng you might not have heard the brouhaha surrounding the opening of the new Mall of Africa. South Africa’s biggest shopping mall the media proclaimed … or is it the biggest in Africa? In a fit of Mall Envy, a Cape Town centre as well as Eastgate claimed it was actually the largest. Who cares? This new mall encloses 130 000sqm of new shopping centre space filled with yet more Woolworths, Truworths, Dis-Chem and McDonalds outlets. Luckily there are a few new marketable international stores too. The cherry on the top … we now have two Starbucks outlets in South Africa. One template begets another - from concrete mall, to shop layout to coffee. Yippee.

The Mall of Africa represents the evolution of 100 years of Modernism in urban design thinking. This paradigm leads to a template view of mankind and communities where structure, style and layout is transferable from one culture to another regardless of context. The operating mantra is that of urban efficiency wrapped up in massive concrete scale and ribboned with tar. 

The prevailing modernist metaphor is that of the machine. Predictable, impersonal, functional, without personality. Yes, early Modernist thinking viewed society as a machine and they sought to maximise its efficiency. Modernism as a theory emerged at the end of the 19th century and was influenced by the industrialisation wave that swept Europe at that period. Early proponents of Modernism saw roads as the major functional arterial passages that propagated economic activity. Modernists set about driving nuisance value pedestrians off ever widening roads, adorned on either side by new templated featureless buildings. This is consistent with the spirit of pure function over nuanced form and characterful texture. The result is urban sprawl and the destruction of habitat - both natural and communal.

But something is amiss. 

While we measure the value of investment funds in the Mall of Africa in terms of pension fund growth, we ignore the real costs. These real costs include the real people prevented from participating at the meagre peripheral of the economic landscape. A shopping centre is an extension of a “gated community” both in practice and insinuation. While I know you will cry out “but we have a high crime rate and shopping centres are safe”, to what extent can we follow exclusionary land use principles that may well contribute to the problem of inclusion, participation and powerlessness? Does exclusive land use ameliorate or exacerbate what we seek to avoid? 

A community comprises many people. Many you might not even see. Where I live there are people that pick through the rubbish to extract anything of value. They live by agreement behind a petrol station. Sometimes I talk to them. They have families and are paid 85c for each kilogram of scrap metal that they can recover. There are others that sell items at intersections, and still others that claim to clean up these places. Yet more try to sell goods door to door. These people, largely unseen, are participants at close quarters. They try, best as they can, to engage in the economic fabric of our communities. But shopping centres, as we know them, simply smother this vibrant component of real people and with it the problems we hope to avoid are magnified elsewhere. 

New Urbanism is a response to, and a critique of Modernism. Human complexity and nuance informs its approach where urban design facilitates walkable, sustainable, mixed use community environments. New Urbanism is an approach that builds inclusion and participation around the community. In so doing it creates natural buffers against crime and squalor. 

There are many places in South Africa that reflect the spirit of New Urbanism. Many of these places are indeed quite old but the spirit is present. Can we build on this? Newer places such as Melrose Arch in Johannesburg have tried to capture the essence of New Urban thinking but have also failed to authentically reflect the local community. 

And so we have the Mall of Africa and probably many more to come - milestones in our national pursuit of at least 1 square metre of shopping centre floor space for every citizen and an epoch in “placelessness”. Is this really the best we can do? 

Andrew Barnes 
Partner at Noted Thinking
May 2016 

Sensationalising Racism in the News - Does it Help?

Again there’s another headline in the news – “Racist Tweet” or similar. Again there’s a lot of noise and hyper reaction. Do we face our societal reflection and deeply interrogate our innermost flaws? Or do we implicitly revisit old racial stereotypes, …. stereotypes we explicitly know are damaging?

Is the motivation behind the “news report” of any use? Does it move us forward or does it re-inforce the status quo and hold us back?

Headlines and news reports such as this are sensationalist. They unashamedly seek to provoke public interest. Via cavalier scrounging of social media verbiage “reporters” seek literally anyone that provides suitably controversial outbursts that fit the current agenda. In this case the news, more so than racism itself, is a “less than 140 character” Tweet outburst or something slightly longer on Facebook by an estate agent. Sure, this has curiously morbid value on social media, but in paid-for, curated and considered media, treatment of such news should offer society far more than scandalous “copy and paste” reporting. Note that “sensational” news is often conveyed at the expense of accuracy.

Is the sensationalised racist report seriously offered in the guise of helping us as a society move forward? And if so, does it succeed?

To understand fully we need to turn to Social Identity theory and how it relates to racism. Racism is a form of “extreme” prejudice rooted in stereotypes and arising from our need to boost our social identity. We do this by adopting favourable perceptions of our own group (the in-group) and often unfavourable views of out-groups. This dynamic changes as we implicitly and explicitly view out-groups, either as superior or inferior to our own group. We do this, it is said, to boost self-esteem.

Here’s an extract from an essay on the recent killings of black individuals by USA police: “Implicit bias - an unintentional action rooted in prejudicial cognitive bias - causes more trouble than it should. It's the root part of your brain that assesses everything you absorb from the world around you - smells, tastes, people, feelings - and categorizes them into experiences - good, bad, scary, happy - for easy recall. For example, if you smell something yummy, see a chocolate chip cookie, eat the cookie, taste it, realize it's delicious, your brain shortcuts remembering all of those stimuli by saving the whole experience as "cookie = yummy." That ingrained memory becomes a preference helping you make future decisions much more quickly. Implicit bias is your brains autopilot for decision making”.* 

Stereotypes and implicit biases work hand-in hand and are the same in some instances. These aggregations of accumulated experience help us simplify complexity and promote the emergence of a “mindset”. A mindset is a psychological screen filtering external data that bombards us. The most important characteristic of the mindset is that it only admits data which agrees with our current view of the world. Put another way, it self-selects data that re-affirms our stereotypes. Ultimately our mindset defines who we are. We cannot wish it away – it is fundamental and integral to our identity.

The interesting point arising from this, and there are many, is that implicit biases and stereotypes are re-inforced in the media, which in turn we generally select on the basis that it affirms our own in-group perceptions. You may choose to disagree, but the media choices we make (what we want to see and hear) already reflect our biases and stereotyping of others. Here’s the rub - we engage with media that favours our in-group because our mindset drives us to do this.

When our chosen media reports on “racism” it does so using stereotypical narratives that validate our in-group bias. In essence the “news report” itself assumes a racist mantle under the guise of seeking magnanimous ubuntu. It does this through the replay of stereotypes impacting us primarily at an implicit (subconscious) but also at an explicit level.

In other words, at a deeply subconscious level the sensationalised news report reiterating an un-curated social media outburst, serves merely to confirm the very unfortunate racial profiling we seek to correct. This happens because it confirms our most recessive racial stereotypes even in the face of our conscious repudiation.

The racist “news” report does not directly challenge social constructs such as language, behaviour, culture, ethics and morality which is needed to move society forward. It fails to offer guidance. It is thus unhelpful, even damaging, as it endorses the status quo using tired racial stereotypes and idiosyncratic isolated events as major news happenings.

The only way that a prevailing mindset can be changed is through authentic encounter and real life experience that is strong enough to offer a compelling alternative to the mindset predisposed towards prejudice. Of course this is possible - but not through the prevailing “140 character” Tweet mechanism. The media, especially “long story” journalism, can present an alternative narrative, but it must move beyond under-curated social media “cut and paste” ersatz journalism. 

Take your own Racial Implicit Association Test here and find out your score (this is built for USA society but will provide some use in other environments): Implicit Association Test Race. I tried it and in all honesty it is remarkably difficult, tiresome and frustrating!

Andrew Barnes 

Partner at NOTED Thinking 
www.noted.co.za

Sources:

• Identity Theory and Social Identity Theory by Peter J. Burke Jan E. Stets Washington State University.
• Social Identity Theory by Sabine Trepte Universitat Hamburg.
• A Decade of System Justification Theory: Accumulated Evidence of Conscious and Unconscious Bolstering of the Status Quo by John T. Jost Department of Psychology, New York University and Mahzarin R. Banaji Department of Psychology and Radcliffe Institute for Advanced Study, Harvard University and Brian A. Nosek Department of Psychology, University of Virginia

       * The Science Behind Why Cops Kill Black Men - And How to Fix it by LAURIE VAZQUEZ 

Work and Advertising - Did Marx foresee this?

Karl Marx’s theories are back in fashion. Many talk about the failure of capitalism and more recently the failure of markets. If you don’t see the problem inherent in the fact that 62 people have the same wealth as the bottom half of the world’s population you deserve the social turmoil that will surely result from this in time. But that is not my point. While seeking a new road ahead that guards against the weaknesses of capitalism - an increasing concentration of wealth in the hands of fewer and fewer people – the theories of Karl Marx have come back into fashion.

Marx was not right about everything, but he may have been right about some things. He was one of the first to study the nature of work writing at length about it. Importantly he argued that work creates meaning. Work provides links to family and community and these links add meaning to our existence. The modern idea that real meaning is found through pop psychology, laughter therapy, drugs, yoga, consumerism, or free sex is a fallacy. It’s a deception. These pursuits, as well as the modern fascination with trying to connect with one’s inner self and blossom as an artist, is indicative of the extent to which our work fails to provide meaning and “agency”.

Yes, that is the point made by Marx. He argued that capitalist industrialisation distances people from their productive output. Through this loss of “agency”, Marx claimed workers are alienated not only from themselves and their workplace but from their communities and society too. Work therefore provides the basis for relevance and meaning. It creates the context in which we relate to people and the world around us.

Later, Christopher Lasch took Marx’s thinking further exploring how a loss of worker agency impacts at a societal level. He saw two contrasting dynamics emerging amongst individuals: 1) a narcissistic personality crippled by a fragile sense of self seeking solace in consumerist identifiers (wearing the right brands, etc.) and 2) an alienated mind-set seeking therapeutic self-help and pop psychology.

The post WWII global industrial boom has driven a loss of worker agency and an alienation from means of production. Corporate growth, globalisation, financialisation and cosmopolitanism have spearheaded this trend of task granulation. And the growing nation-state interventionist bureaucracy only aggravates matters. You can’t do anything without explaining it, accounting for it, apologising for it, and paying for it, either to a corporation (often domiciled outside SA) or the government. It is against this back-drop that we have seen the burgeoning self-help industry. Alpha courses, motivational speakers, centering, confidence building, how to win friends, positive thinking, and a raft of other commoditised self-deifying diversions, are products of our time and reflect our alienation from work and self.

But nothing happens in a straight line. The computer revolution, starting in the eighties and really gaining traction after 2000 is changing the world for the better in ways we least expect. Notably, computers are enabling some of us to recover agency over our work. Computers and digital communications are fracturing the traditional workplace. Increasingly work is neither location nor work-hour dependent. Many people have greater control over their output and can produce far more, both at a task and volume level. In many instances computer technology allows a reclaim of labour pricing. Cost of production is falling and networks are adding exponential value. A knowledge economy is emerging and it lies outside of the walls of traditional business. At its heart is worker agency.

Marx neither predicted the technology revolution nor a networked economy, yet some of its benefits speak directly to his critique of capitalism.

In support of an emerging new “agency” over work a few interesting facts from Forbes are:

• ·         Millennials will force companies to be transparent. Transparency is one of the top four qualities that millennials look for in leaders. They don’t trust CEOs and politicians because they don’t feel like they are honest, especially how they are portrayed in the media.
• ·     Millennials will choose corporate culture and meaningful work above everything else.  30% of millennials say that meaningful work is important versus only 12% of managers. Furthermore, only 28% of millennials feel that high pay is important versus 50% of managers.
• ·         Millennials want to build a collaborative organization. Millennials like to work in teams, on projects to accomplish goals. They are used to using wiki’s, social networks and other technologies to share ideas and innovate.
• ·         Millennials will make working from home the norm. In the next 9 years, 41% of the workforce will be working from home and currently over 13.4 million people work from home in America alone.
• ·         Millennials will encourage generosity and community support. While millennials are often stereotyped as being selfish and narcissistic, the story that goes untold is their involved in supporting their communities. 60% of college students aren’t considering a career in business. They view corporations as being greedy, having no equality (especially at the CEO level where only 5% of CEOs are women), and at fault for causing the financial crisis. Deloitte found that 92% of millennials believe that business should be measured by more than just profit and should focus on a societal purpose and 83% of millennials gave to charities in 2012 (up from 75% in 2011).

It’s not only the youth that are impacted by the current techno revolution. The Ewing Marion Kauffman Foundation says: Seniorpreneurship is a growing trend in many countries including the UK, Australia and the USA where nearly a quarter of new ventures in 2013 were started by those aged 55-64.

The facts above are all predicated on modern computer technology.

If one agrees that there has been a long term decline in worker agency post WWII then it’s not hard to see the link with rampant growth in modern narcissism and the elevation of “self” to the level of cultural keystone. These manifest in the obsessive seeking of instant gratification, the need to support a failing self-image, the absence of personal social relevance, and the need for material markers and debt-based lifestyle funding.

And a lot of advertising is contingent to this … all in the spirit of rampant capitalism and the seeking of a great fortune. The ad messages of old corroborate the spirit: the brand is the hero, be cool, seek joy and endless nirvana, reward extravagance, stop for nothing. Money is the enabler and consumption is the resolve.

Will this change? With a new youth culture emerging on the back of new technology maybe worker agency is strengthened prompting a renewed sense of authentic self-worth. Will ad messages and brand values change too? Will we talk about the world in terms of preservation, talk about self in terms of purpose, and talk about society in terms of cause and caring? Will we find hero’s outside of the ego and away from brands?

That, I think, is the challenge.

Andrew Barnes 
Partner at NOTED Thinking
April  2016

The Pikitup Strike: Can we afford to throw it away?

The Pikitup Strike: Can we afford to throw it away?

The Pikitup* strike that endured for 5 weeks annoyed me. It annoyed me due to the fact that a lot of people were simply refusing to do their work. It annoyed me because the world I lived in started looking like a trash can. Moreover it annoyed me because others tried to extract a quick profit through adhoc bin emptying (going rate R50+ per bin). And it also annoyed me because many of these nascent entrepreneurs dumped their loads in common spaces. Or so it seemed.

What was the strike about? A monthly salary of R10 000 was needed to replace a current salary of R6000 a month. That is what the workers demanded. The tax tables indicate that with taxes and rebates, a R6000 monthly salary might translate into a R5875 (excluding other deductions for medical, housing, etc). But the demand, unreasonable as it was, asked for R10 000 which after tax alone would net about R9100. So that’s it. R9100 (or less) to take my trash away.  A payment of R300 a day for a person working long hours, probably supporting more than him or herself. And so it dawned on me. The problem was neither the strikers nor their demands. The problem was affordability.

A quick glance at UK refuse collector pay scales showed that their salaries, in this hallowed hard currency empire, were around a Rand equivalent of R25000p/m or much more.  So our strikers were striking for less than half what their compatriots earned elsewhere. Yes, that’s about it.

In short, the answer is simple. If we cannot afford to pay those that remove our effluent from our doorstep at least R300 a day or a lot more, then we should do it ourselves. That to me is a no brainer. Put simply “Can we afford to throw it away?”

After looking at the issues my feeling was that the Pikitup strikers were justified. The problem lies not with culture, work ethic, and education. The problem is simply one of affordability. We need to pay more to discard what we do.

And this is where the argument gets really interesting because I have not touched on the social and environmental costs of what we discard. Think about a plastic bucket, as an example… a bucket that you may buy for R35. After a year it breaks and you throw it away. This bucket will continue to degrade and poison the earth through the release of phthalates, bisphenol A, and other poisons for about 500 or even 1000 years. It will wreak damage to the environment including soil cultures, water runoff and subterranean water reserves that we cannot undo, certainly not at an initial cost of R35.

The initial cost of the bucket soon pales into insignificance in the face of the on-going environmental costs that will be borne by other generations in time. Yet increasingly the future generation is the one you’re in. It’s happening now because of what your parents did and because of what you did not long ago.

The truth is we cannot afford the enduring environmental cost of discarding that bucket.  And we can’t even pay a living wage to those charged with removing it from our doorstep.

The problem, dear reader, lies not with Pikitup nor the demands of their employees. The problem lies with us, our excessive consumption, and our faux belief in our incontrovertible authority over the natural world we live in.

*Pikitup: the local refuse removal company.

Driving Business Performance

What really drives your business and do you manage it?

The first question is “What is business performance?”  And flowing from that, what drives it? What impels and motivates business performance?  

This is important because if there is willingness to improve business performance, leaders need to know where to devote resources and how to hone their management skills.

My interest in these issues was piqued through my involvement with CGF Research Institute board evaluations. Typically Board Evaluations follow the recommendations of King and tend to provide an opportunity to demonstrate the extent of adherence to some of these governance principles. But we believed that there was an opportunity to add value, especially for the leadership complement in business. Boards, after all are the custodians of business leadership and we wanted to add value by giving boards insights that could direct future management practice and ultimately improve corporate performance. The first task was to define performance in the context of our objectives. What is it?

Looking abroad we were able to draw on the experience of a range of global multi nationals that together with a team of recognised behavioural economists have honed a framework describing business performance that is both robust and elegant. This work has been conducted over several decades and includes in-depth dialogues with over 100 000 business leaders and managers across a range of industries. The emerging results are universally relevant being both culturally and task blind. They apply to all.

Business performance is anything you want it to be. Choose your metric. Sales, churn, quality standards, ebita, or other. Driving the performance of your business, and ultimately your chosen metric, are four constituents: Behavioural Competency, Leadership, Culture and Extrinsics. Significantly, the years of innovative and clever work resulted in the following ratios of contribution to business performance (note: these have been rounded).

Behavioural Competencies are precedents to actual skills. For instance a skill is required to hammer a nail into a piece of wood. But there are Behavioural Competencies that will explain why some will emerge as good wood craftsmen while others will not. These Behavioural Competencies range from initiative to analytical thinking to directiveness. Interestingly there are only 20 known Behavioural Competencies. They are observed in individuals and they can be measured. Moreover, they have a predictive function. Those with task specific behaviours are more likely to succeed at those tasks in the long run.

Leadership in this framework describes the CEO or MD. It is one person … maybe two. This one person has a big influence and if they choose to mess it up, which does happen, their negative contribution is actually exaggerated. Because of this the Leadership contribution is not a constant. It is amplified if, and as, the leader wanes or deteriorates. Thus one person can actually destroy a business. Fortunately they can significantly enhance it too.

Culture is mainly a derivative of values and leadership. The Culture that exists in a business has a large contribution to the overall performance of that business. You may immediately spot that it is often overlooked by managers and business leaders. Underpinning Culture are 6 value factors that include the likes of trust and openness. As with Competencies, the subset of values that drive Culture has been refined through years of discovery. Therefore we understand Culture because we know the values that are most significant in its determination.

And finally there’s Extrinsics. Here I admit that I have struggled to find the one word that is most descriptive of this dimension. Extrinsics is better explained with examples. The extrinsic dimension is all the things that managers can’t change or do not have much influence over. They are things like the weather, the interest rate, the exchange rate, the load-shedding schedule, the legal environment, computer viruses and the resignation letter that might hit your desk. Extrinsics are “hard” factors.

Most readers will see the beauty of this framework at a glance and understand its significance. Business leaders, and especially managers, tend to spend a lot of time managing or trying to manage Extrinsics while their effort would be better directed at managing the “soft” dimensions, especially Culture and Competency. Arising from this many leadership styles tend to become defensive rather than open, receptive, and enterprising which is needed for business performance and growth.

Managing the so-called “soft” issues requires refocusing, learning and receptivity. One has to actually recognise the behavioural competency profiles that exist in the workforce before they can be managed and developed. Similarly a clear understanding of the resident culture is needed before new interventions can begin. This requires time, work and investment. Fortunately we can now measure these competencies and values/culture and plot them relative to known best practice norms.

This framework has been developed using the best resources and talents available. It is robust, elegant and pertinent.

Online Video in a Nutshell

Shooting from the hip: Video in a Nutshell

A few days ago I went to a talk on “online video”. The essence of the presentation was to roll out many facts and figures and explain why online video was such a big deal and how the world and marketing is now changed forever.

Some of the numbers I managed to pen are:

1.   There are 3 billion humans that use the internet.

2.   2.5 YouTube videos are watched everyday by each of these humans.

3.   Average global download speeds have moved from 3.5 Megabits per second (Mbps) in 2009, to 20 Mbps in 2014 and a predicted for 42.5 Mbps for 2019. South Africa’s average at the moment appears to be about 6-7 Mbps for broadband.

4.   Download speeds will increase to over 1000 Mbps as optic fibre rolls out. At this point there are 8 cities in the world that enjoy this infrastructure. None are in SA. At these speeds you can download a feature film in about 10 seconds.

5.   There are about 1.5 billion TV’s in the world. This will grow to 3 billion by 2019.

6.   The iPhone 6 is 50 times faster than the first iPhone.

7.   Amongst 13-24 year old USA citizens TV is watched an average of 8.3 hours per week. Online video is watched for 23 hours across the same period.

8.   Q1 2014 versus Q1 2015 saw these shifts in TV viewership: MTV -34%, Nickelodeon -34%, Comedy Central -30%.

9.   Facebook launched a video facility last year. This is the rate of uptake: Sept 2014 1 billion views, Q4 2014 3 billion views, Q1 2015 4 billion views (Is Facebook video now bigger than YouTube?)

We are lucky to live in an era that will see internet speeds increase and costs decrease. This trend is amply captured by Moore* when he predicted in 1965 that the average processing power of computers will double every two years. This became known as Moore’s Law. But even Moore himself did not see this trend continuing indefinitely. He said the “doubling of processing power every two years” would continue for the foreseeable future. He did not say it would continue indefinitely. And as we know, nothing continues indefinitely.

But our fascination with processing power and speed of transmitting data is still with us and remains relevant today. With this burgeoning ability to transmit data it is evident that video will indeed become a very powerful feature on the communication and marketing landscape. But its power will be constrained in the extent that there is actually something relevant to communicate. Moreover, if speed of data transmission is so critical, then surely the speed at which you can consume or “devour” what is transmitted is equally important? For instance if I am prepared to read a book over a period of days or weeks then the acquisition of the book (the getting of the book) does not have to take a few milliseconds. It simply doesn’t matter. Conversely if it is important that a video arrives in instant via the ethernet then surely the time I can afford watching it is under equal constraint?

And this is my issue. In most instances, watching video’s simply takes too long. I normally don’t bother watching videos, even on news sites, and when I do I mostly do not get beyond the 60 second mark. It becomes draining and tedious. Sitting and waiting. Maybe it’s just me.

Not wanting to give up too easily, I decided to look into the matter and find out what speaking speeds are compared to average reading speeds. If the world loves video and I can’t find the stomach for it, I needed to know why.

That being said it is interesting to note that the average speed of talking, such as that in an online video is about 150 words a minute. Several TED presentations were analysed yielding the following numbers:

Compare this to the average reading speed of about 200-300 words per minute. Or 500 words plus for an average high level exec or higher – which is where we all see ourselves.

Clearly, it’s no contest. One can read at least twice as fast as it will take to listen to the same spoken words. But importantly, and this is very important, when people speak too fast, they simply lose their audience. So speaking faster, to catch up with the nimble readers, does not construe a benefit.

Could our demand for, and fascination with faster and faster download speeds be nothing more than a signal to the world that we only have a few milliseconds available to actually watch the thing? With that thought, could we see the moment arrive when those faced with a 5 minute video communication, modern and sexy as it is, say “please, let me read it. I haven’t got time to watch that.”

But then video is not only about verbal communication. It’s about images and other very important stuff like music and fashion and cartoons and music and …..

*Gordon E. Moore, the co-founder of Intel and Fairchild Semiconductor

Shooting from the Hip: LinkedIn Knocked Out

Shooting from the hip: LinkedIn Knocked Out

On Friday 1 May about $7 billion evaporated from the LinkedIn market valuation. That is a lot of money. It manifested in a 20% drop in the share price, although at times the share traded down more than 25%. Enthusiasm is not what it was.

One way of looking at a share value is to compare the price to the earnings of the company. This is the Price Earnings ratio (PE ratio) and historically, over the very long term, it has averaged at 17 for all of the S&P 500 Index. To give an idea of where LinkedIn sits, its PE ratio is currently over 500 and has been higher than 2100 during 2014. With a loss of $0.34 per share in the last quarter, you are paying a great deal of money in the hope of future growth and profit.

Source: nasdaq.com

It is this future growth that many reports have previously mentioned. They spoke of revenue growth, earnings growth, unique visitors, ROI and growth in members which now stands at 364 million and is 23% higher than last year.

But the detail that appears to have rattled the market last week, is the poor guidance on future revenues. For the second quarter of 2015, the company expects earnings of $0.28 per share, on revenue of $675 million. By comparison, analysts had projected earnings of $0.74 per share on revenue of $718 million.

For the full year 2015, LinkedIn projects earnings of $1.90 per share on revenue of $2.90 billion. Analysts expected earnings of $3.03 per share on revenue of $2.98 billion.

Advertising accounts for only 19% of LinkedIn revenue. It is very evident that for long term viability this contribution must grow massively. Worryingly the contribution of advertising has remained virtually flat, rising only from 18% last year. While Talent-Solutions, their recruitment arm, provides the bulk of ad revenue, and has grown, Display Ads have fallen steeply most notably within Europe where they almost disappeared. Taking up some of the slack was Content Marketing which also helped keep the total ad component of revenue flat.

LinkedIn’s results last week were interim results. Full year results will come later in 2015. But the forecasts are amended sharply downwards and this did not sit comfortably with investors and shareholders.

But the feature that remains most worrying, certainly to the old school clique, is that LinkedIn does not make money. And by that we mean profit, not revenue, that is available to shareholders as dividends. After last week it appears more unlikely in the immediate future to make any profit at all. If a business loses money, even 1 cent a day, day after day, it will eventually die. That is a fact. LinkedIn does not make money and it does not pay its shareholders a dividend. It’s a waiting game.

Last week revealed the fragility of this waiting game with similar downward forecasts and sharp share price corrections occurring for both Twitter and Yelp. It was, in short, an interesting week with three major tech companies reporting downbeat interim results almost simultaneously.

In this new evolving digital era it is clear that not all current players will be equally lucky. The real battle lines have yet to be drawn. There will be many more successes and failures as the industry moves beyond infancy. There will also be consolidation and efficiency gains with the victors emerging stronger than before.

Many see the current share price declines as a buying opportunity and maintain that these tech giants will successfully monetise their reach in time. In contrast there are others such as Dan McCrum of the Financial Times that take a more jaundiced view: What may be different this time are downward moves for some of the larger tech stocks prompted by disappointment around earnings, indicating genuine reassessment of the potential for these companies to take over the world.