SXSW 2014: Report from Austin.

The trends that mattered this year and what they mean.

Tom O'Reilly
March 18, 2014

The skies were cloudy in Austin during SXSW Interactive, underscoring the annual conference’s major theme this year: threats to privacy and data security. While the usual crowd of startup entrepreneurs, VCs and marketers convened on panels, hosted parties and ate tacos together, the buzz was less about specific product launches or breakout companies and more about exploring big issues like privacy and the impending wearable tech revolution. 

While the conventional wisdom seems, as ever, to be some variation on “SXSW has jumped the shark/been ruined by overbearing corporate sponsors,” serious thinkers, innovators and makers were sharing exciting ideas beyond the swirl of branded food trucks and tweet-for-free-stuff gimmicks. In fact, taken together, these ideas suggest some major shifts coming in our digital world, from the meaning of mobile to the future of UX. 

Here’s our take.

Privacy insecurity.

Appearing on massive screens via Skype and Google Hangouts, respectively (they noted the irony), Wikileaker Julian Assange and NSA whistleblower Edward Snowden warned of continuing government surveillance and threats to privacy, by far the dominant item on the agenda at this year’s conference—if only by sheer number of events. But they didn’t stop at government. Noting Facebook CEO Mark Zuckerberg’s recent invocation of a “post privacy world,” Assange reminded the audience that Silicon Valley revenue models encourage companies like Facebook and Google to “steal” user data. Snowden called on the developer community to build better encryption tools to protect users but acknowledged that massive data collection by tech companies would continue. 

What does the new prominence of privacy concerns mean for digital businesses and marketers? 

Even before Snowden’s files leaked last summer, signs emerged that some users—particularly younger ones—were embracing new tools and platforms like Snapchat that at least promise not to permanently save and display their data. And just this week, a new study found the photo sharing and deleting service is more popular among teens and younger adults than Twitter. A more extreme but much smaller group of users has discovered the “DarkNet,” where people can obscure their real identities and mask their online movements and transactions (Huge’s Director of Search and Inbound Marketing Andrew Delamarter presented a talk on the DarkNet at SXSW). While they are becoming easier to access and use, DarkNet tools and tactics still require a fairly high level of technical sophistication, making their users more like traditional hackers than tweens trying to hide their sexting from their parents. 

And that was the real question asked by brands and marketers in Austin: Just how much, if at all, has increased exposure to privacy and data security concerns prompted a change in mainstream consumer perception and behavior? On Saturday and Sunday alone, there were sessions called: “Do Consumers Really Care About Online Privacy?;” “In Data We Distrust: Fixing Online Privacy;” “Privacy is Dead: Long Live Privacy;” “Online Privacy: Nuclear Meltdown or NextGen Fuel?;” and, finally, “Privacy Swaps: Better Brand Experiences at a Price.”

The consensus in Austin, despite the high profile keynotes, was that it hasn’t and won’t. Digital users say one thing but do another. For example, one presenter pointed out that while “66% of Americans say they do not want to receive targeted ads, 53% of them want websites they visit to offer discounts tailored to their interests.”

At a session called “Evil by Design,” UX Consultant Chris Nodder presented a useful construct for determining the motivations of designers: if only the designer benefits, then the design is evil. If both the designer and the user benefit, then it’s merely commercial. Though not part of the privacy and security track, Nodder’s talk captures the tradeoff users have generally accepted as a reasonable commercial transaction when it comes to giving up a measure of their privacy and control of their data (or the one that a majority of marketers at SXSW think they have and still do). The designer benefits from being able to sell that data, while the user benefits from free, useful services. A vocal audience challenged this common assumption at another panel, “Is Privacy a Right or an Illusion?,” almost as soon as the panelists made it. Pushing back, the panelists—an attorney specializing in online payment systems and an executive from a payments company—noted that people don’t tend to care about privacy until there is a breach. 

Where to go from here? Some argued that privacy has become the new “green” or “eco,” meaning businesses can charge higher costs for a more secure experience. Conversely, others argued that in exchange for the benefit of storing, using and selling user data, brands have to offer even more premium experiences, whether via personalization, deals and discounts or otherwise. Most agreed that as mainstream awareness of privacy and data security increases, users will demand more disclosure and transparency (an audience member at one panel asked why terms and conditions can’t be displayed in clear infographic form).

Shhhh... the rise of anonymous social networks.

The rise of digital platforms offering a degree of ephemerality of media and data, like Snapchat, or anonymity, was evident in Austin, with many commentators saying that users are reacting less against the privacy and data security concerns discussed above and more against the “oversharing” culture of Facebook, Twitter, Instagram and others. Everyone was talking about Whisper, a mobile app that lets users anonymously share secrets, which has skyrocketed in popularity in the last six months (and revealed a new round of funding at SXSW that values the company at $200M). 

Meanwhile, Whisper competitor Secret hosted a special SXSW feed, where conference-goers could anonymously vent, gossip and confess throughout the week.

Beyond the smartphone: wearable and embeddable = mobile everywhere.

Some people saw Explorers, some saw “Glassholes,” but all agreed that users of Google’s wearable technology were omnipresent in Austin this year, from giving talks onstage to creeping everyone out in the free Shake Shack line (for the record, Google encourages users to be good citizens). While Google Glass is obviously one form factor for extending mobile computing capabilities beyond the smartphone, the company announced at SXSW that it would release a software development kit for its mobile OS, Android, to developers creating wearable hardware. In making the announcement, Sundar Pichai, Google’s SVP of Chrome, Android and Apps, said, “I think we are just scratching the surface [of the kinds of wearable devices possible].” 

Despite that reality, there were plenty of examples of new form factors—beyond watches and fitness-tracking bands—offered by the 8 startup finalists competing in the wearable technology category of the SXSW Accelerator program (judged by tech experts, influencers and VCs).  The winner, Skully Helmets, created an augmented reality motorcycle helmet that lets riders get directions, make phone calls, listen to music, get the weather and use other apps safely from within the helmet; its founders expect to extend the product to bike and skiing helmets and potentially military applications. Another finalist, Bionym, built a bracelet that can authenticate identity to connected devices by reading users’ unique cardiac rhythms.

“Cyber Illusionist” and MIT Media Lab Director’s Fellow Marco Tempest and several wearable tech entrepreneurs discussed how wearables will enable “The Next Evolution in Communication.” Once mobile moves beyond the smartphone, users can still be connected without feeling attached to a particular device (or without rudely looking down at their phone every five minutes during a meeting or conversation). Further, since they can be personalized and fitted to individual users, wearables will be the first mobile technology to truly cross generations and work for older people as well. 

The consensus across panels and events at SXSW seemed to be that ultimately, successful wearable technology puts the tech in the background and allows users to focus on the actual objective, whether safely getting where they need to go on a motorcycle, authenticating their identity by continuing to have a heartbeat, or simply staying connected without so obviously being tethered to a phone. And as Allison Lewis, the designer of a wearable, washable T-shirt with embedded LED lights that can be remotely controlled put it, “it’s not just tracking and controlling, it’s fashion and self-expression.”

The same sensors that connect machines and devices to the Internet can be embedded in human bodies, which is the next logical stage in the evolution of mobile computing everywhere. Dr. Leslie Saxon, the Chief of Cardiovascular Medicine at the University of Southern California’s medical school, discussed “Body Computing: The Future of Networked Humans,” pointing out that the human “interface” itself is changing, with humans becoming more like computers and vice versa. From tattoo sensors that continuously record physical metrics like glucose levels to “BioGrams,” pictures that display, say, the heart rates of the subjects, to digital pills that transmit when they were ingested and how effective they were, the possibilities of body computing are myriad, according to Dr. Saxon. In addition to opening a new frontier in preventative care, body computing will produce enough data that can be anonymized and analyzed to improve public health outcomes.

Anne Wojcicki, the CEO and Co-Founder of 23andMe, echoed these themes in her keynote address on “The Future of Genetics in Everyday Life,” pointing out that understanding individual genetics can transform medicine from a treatment model to a prevention one. Basketball great Shaquille O’Neal also chimed in on the benefits of wearable and embeddable tracking, noting that a well-designed wristband could help combat childhood obesity in poor communities, among many other possibilities.

Digital marketers embrace maker values.

While the maker movement has had a presence at SXSW for a while now, new this year was evidence of its impact on digital marketers, who have enthusiastically adopted maker values: celebrating DIY culture, rapidly prototyping and opting for tangible “products” over fluff. In other words, moving from traditional, top-down campaigns to collaborative, bottoms-up engagement with customers. 

During a panel discussion on real-time marketing, for example (perhaps one of the more tired topics of the last year after Oreo’s (in)famous tweet during the Super Bowl blackout), social media and digital marketing leaders from Capital One, Whole Foods, Dell and McDonald’s all agreed: “real-time” engagement means offering something authentic, relevant and if possible, tangible, everyday to fans and followers, not trying to capture random lightning in a bottle during an awards show. Capital One, for example, focuses on relevant events that the bank sponsors, like March Madness, and “gifts” users rapidly created GIFs celebrating their favorite team (discovered from using social listening cues). During its summer campaign, the bank teamed with artists on Tumblr to create customized illustrations of “bucket list” summer vacation destinations identified by followers. 

Joi Ito, Director of the MIT Media Lab, noted in his keynote on “The Future of Making” that the model for product design has shifted to one in which, even for complex devices like smartphones, designers build prototypes that are tested within days and then iterated based on user feedback. Lengthy planning and research is out, making and testing is in, a lesson not lost on the social media marketers for major brands, who are being more experimental and adjusting based on real-time feedback from customers. At another session, “Full of Tomorrow: Brands, Technology and Miracles,” leaders from Leo Burnett and Contagious offered their thesis that brands are uniquely positioned through their scale, reach, access to data and creative resources to be “the connective tissue between new technologies and real people.... in the form of small wonders delivered daily.” Experimentation, making and doing—rather than planning, researching and discussing—will be the way to turn this vision into a reality. 

Beyond influencing social and engagement strategies, the maker ethos is pushing marketers and brand innovators to collaborate with customers themselves in improving existing products and creating new ones. Boing Boing and Ford teamed up, for example, on a hackathon where outside makers were invited to play with Ford’s OpenXC platform and presented the results to conference-goers: “Let the audience add their voice to the story; ultimately people want to hear from people like themselves.” And Oreo, moving well beyond its Super Bowl tweet, is experimenting with 3D-printed cookies, which can be customized and evaluated by consumers in real time through social media.

Next UX.

Just as responsive design has become the mainstream approach to navigating the multiple screen sizes and devices users use, it’s time to prepare for what’s next. In “From Every Screen to No Screen: Next-Gen Responsive,” panelists including the UI Engineering Manager at Netflix urged designers and developers to think beyond the presentation to ensuring seamless functionality across contexts. Forget PC, smartphone, tablet. By 2015, there will 22M digital signs of all shapes and sizes, from Times Square to above urinals at airports. By 2016, there will be 171M wearable devices with tiny interfaces of all forms. To successfully reach users in light of these numbers, responsive design must become reactive design, featuring an experience and interface that adapts based on the user’s needs in the context, rather than the specs of any particular device. UX designers will need to work closely with data analysts and even artificial intelligence engineers to succeed. Cliff Kuang, Design Editor at Wired, presented examples of well-designed “context recognition” at his talk on “Interaction Design for the Post-Screen World,” including the Cone speaker, which hides complex algorithms for choosing music behind a simple hardware design. 

Picking up on this theme, Achin Bhowmik, the Director of Perceptual Computing at Intel, stressed that in an era of “ubiquitous devices,” interaction has to be “natural, intuitive and immersive.” Consider the line between user, content and the physical world blurry and getting blurrier and design for that.

Finally, UX designer Alfred Lui presented a useful framework for “Reorientating UX Design for the Internet of Things:”

  • Proportion UX to attention. Since the early 1990s, when the iconic AOL dial-up noise let us know we were going online,” UX designers have “owned the foreground.” With the rise of wearable and embeddable tech, that’s no longer the case. Now, technology and computing power is all around the user, and yet attention remains finite. To reach the user in this context, the designer should consider ambient information, like the simple red light on an energy monitor display that elegantly and unobtrusively nudges the user to use less energy.
  • Service design. Move beyond considering user flow or task flow to journey maps across many touchpoints in an organization. Nest is not just a thermostat; it’s a service for managing energy consumption in the home. Likewise, the $149 Nike Fuel Band is worth more than the $5 Daiso Pedometer because it converts the ambiguous goal of being active into a social, real-time program. Wearable and embeddable technology is not mere measurement and monitoring.
  • Design with identity. The ultimate recognition of the correct user context is personalization. From Japanese cigarette vending machines that analyze bone structure to determine if a user is old enough to legally buy tobacco to the Disney Magic Band that tailors every aspect of the theme park experience based on each user’s unique preferences, incorporating identity is key to successfully designing experiences in a mobile everywhere world.

Lui's framework raises interesting issues concerning privacy and the data security, showing how as mobile moves beyond the smartphone--into even our bodies--the benefits of better, more tailored experiences will come at perhaps greater privacy costs.