Dijital Dönüşüm: Yeni Teknolojiler ve Yeni İş Modelleri - Dr. Kerem Kızıltunç

Good evening everyone. I've compiled a study on how technology will impact business models over the next 20-30 years. Let's start with macro trends: world population has skyrocketed recently, life expectancy has increased due to vaccines and healthcare, and energy consumption has surged. Moore's Law continues: processing power doubles every 18 months while costs drop dramatically. For example, the cost of 1 million transistors fell from $222 in 1992 to under $0.06. Similarly, solar energy costs have fallen over 97% in the last 20-25 years. Bandwidth costs have also plummeted. We are seeing exponential progress in all these areas.

Now let's look at how digital transformation is reshaping industries. Companies like Netflix disrupted Blockbuster by shifting from physical rental to mailing DVDs, then streaming. Tesla disrupted Ford by creating software-defined electric vehicles. The market caps of tech giants like Apple, Google, Microsoft, Amazon, and Facebook now exceed traditional industrial companies. In 2008, the top 10 most valuable companies were mostly oil and finance; by 2018, six of the top ten were tech companies. This shows software is eating the world. The digital vortex model identifies sectors that are being disrupted: technology first, then media & entertainment, retail, financial services, telecom, education, and even healthcare. For example, in education, the pandemic accelerated the shift to online learning. In healthcare, telemedicine is growing rapidly. The gaming industry is a huge global market of $200 billion, and Turkey has low-cost advantages but needs ecosystem building.

Cost advantage is important, but it is not enough. We need a strong ecosystem where people can move between companies and have a career in gaming. Turkey needs to build clusters with connections, events, and a talent pool. Just being cheap will not create a sustainable industry. As an example, a telehealth company I have been following saw its stock rise from $56 to $80 during the pandemic because it provides remote healthcare with integrated payments and insurance. That is the kind of innovation we need.

Yes, currently this system is used as a taxi for Turkish Airlines. Some hospitals use it, and we are testing it at Medipol. The benefit is mainly through teleconferencing with medical devices. With the latest technologies, bandwidth has increased and devices can be integrated. For chronic diseases, it's more useful. But I have an objection: the costs are almost the same as going to the hospital, so prices need to drop.

Yes, let me explain. In Turkey, regulations are changing rapidly. For example, digital subscription, remote work, R&D centers need to be integrated. There is a regulation that you have to do zero treatment in the building. But now, R&D centers are being discussed, and some changes will come. In America, software development is common without being physically in the office. That will change in a few years. The difference is that American firms often have multiple departments and outsourcing. Here, we have offices. When this pandemic started, I saw that companies like Facebook, Microsoft, Google quickly adapted. We also had a project for a mobile app for medication delivery, but it was cancelled due to regulations. We couldn't deliver medicine. In 2017, Turk Telekom developed an app, but the Ministry of Health said there is no regulation. In America, there is serious regulation and educational sites for telemedicine. But here, the only regulation is for ships and doctors' support. It needs to catch up. In America, it takes 10-15 years of lobbying for regulation changes. Turkey cannot follow that fast. However, coronavirus has contributed to some changes. For example, we sent all call center agents home within two weeks. They are working from home. The project that was discussed for years happened in three weeks. As they say, some decades nothing happens, some weeks decades happen. So similar things will happen here. Regulation is one of the legs. Let's continue with other topics. There are serious issues like the vortex. Some companies are at the point of bankruptcy. Walmart is the only one competing with Amazon. Amazon's entry into a market causes a 5% drop in competitors' value. For example, when Amazon bought a supermarket chain, all others dropped. So there is a consolidation effect. In the third party side, Amazon dominates. In summary, there are problems with price and variety. But recently, some companies are opening stores and trying to find a balance. Some fashion brands are going online. We will do a lot of online development in the next 2-3 years. But it's not just about being online; it's about backend demand planning, pricing, inventory management. We need to understand customer needs. Those who can't do this will fail. For example, a major brand that was only brick-and-mortar is now in trouble. Companies that have both online and offline will succeed. Now, customer experience is very important in digital transformation. Especially internal systems allow external customer interaction. For example, ticket changes can be done via mobile app, which used to take 20-30 minutes manually. So we are making many changes. But the main thing is to give the customer control. That's why digital transformation topics are prominent. Today we are not discussing industry, but laws. On the government side, e-Devlet allows you to send your records directly to authorities. That pulls the customer into the flow. But sometimes you don't need huge multi-year transformation projects. A simple example: in aviation, when you fly to America, you buy the ticket online, check in, go to the airport, maybe there is wifi, but on the plane there is no internet. So 90% of the interaction with the airline is during the flight, but there was no channel for the customer to provide feedback. Now with wifi and social media, interesting examples have emerged. I saw a real dialogue on Facebook. A passenger on a flight from Istanbul posted that the cabin service was good but the plane was too hot. He said he wanted it cooler, but other passengers were cold. He said they could use blankets. He posted with a cold face emoji and said he would fly with another airline next time. This is a classic net promoter score situation. Now we have the opportunity to intervene during the flight. If you share on social media, it's a positive example. So I tell this story to show that such an experience is possible. I know it's a unique example. Look, three hours ago he posted, two hours later he got a response from Turkish Airlines' account. They said they contacted the pilot because there is a communication channel between the plane and the ground. They can message and talk. They said they conveyed the complaint. This is not standard; usually that channel is used for emergencies like heart attacks. Then the passenger replied 53 minutes later, and 7 minutes after that, the airline responded again. The passenger said he was impressed, they negotiated and lowered the temperature by 21 degrees. He said he wished such customer service was available everywhere and that he would fly with Turkish Airlines as much as possible. This is a great example of customer experience that can be shown in conferences. I didn't come up with it; it's original. It shows how with in-flight internet and Facebook, you can create a great experience. Now, if we continue, we touched on different industries. Kerem's example is about Turkish Airlines' social media monitoring service. We work with a company that provides that. I want to quickly mention that. So, a story could come out of this. Turkish Airlines doesn't have a peach store, but our friend at the dishes store, Neşe Teyze, used it well and turned it into a success story. Credit should be given. There is extra effort, but well done. They created a story that shows the opportunity. I see it as a valuable example. In 2020, what was said in 2011 about Android and chat education is now accepted by everyone. Because almost every industry, from health to retail, finance to others, we see different customer experiences and new business models. This video shows that. In recent years, AI has been used in conversations, so we are more of an AI company. But software can eat the world, but AI will eat software because by looking at data, we can learn things we couldn't algorithmically find. With deep learning, we can go much further. There is an original video of a game where AI learns to play Breakout. It wasn't programmed; it just learned from the score. After two hours, it reached the level of an expert player. It discovered strategies like sending the ball from the back to break bricks. This is amazing and shows the potential of unsupervised learning. This simple example is important. There is also a Terminator scene with augmented reality. In 1991, there was a bar scene with AI and projections. That technology still doesn't exist today. So that vision from 30 years ago is still ahead. Interesting ideas come from these. Now, about business models: after digital transformation and industry transformation, we are moving to a platform economy. Especially with big data, you can create competitive advantages by building data-driven systems. You need to combine factors to transform industries. You need large scale. For example, Uber had over a million drivers globally in 2019. They use data to optimize driver allocation, predict demand from concerts, etc. They even monitor Twitter to see if people couldn't go to a concert and adjust accordingly. Such opportunities require large scale. That's the platform economy. Network effects are well known: the more users, the more value. So new business models are emerging. I have about 10 minutes, so I'll quickly cover the culture aspect. Companies need to change their work culture, not just business models and technology. I compare it to a theater: first you swim, then bike, then run. Companies need to use different muscles to adapt to digital transformation. They need to change how they produce, design, and develop. In the 1900s, Ford used to inspect workers' homes for cleanliness. Today, we see that management culture is changing. From the industrial era to the 60-80s, management gurus were stars, then Steve Jobs style, and now it's about teams. Employees are empowered, management becomes servant leadership, hierarchies are broken. Amazon says they use pizza teams: no team larger than two pizzas can feed. They want small, fast, autonomous teams. Netflix is famous for its culture deck. They say if an employee resigned tomorrow, would you fight to keep them? If not, let them go today. They have performance filters. They say if you want to build a ship, don't give orders; instead, inspire people with the vast ocean. Leaders should create desire. I visited Netflix and talked about software development. They hire very selectively, but once hired, there is no bureaucracy. No expense approval; if you need something, you buy it and it's paid. That's how they make big transformations. I cut myself off; do you want to add something about culture? I think it's important because now we don't look at gender, age, background. We ask: can you make decisions alone? Can you communicate openly? Are you transparent? Do you give feedback? And then we hire based on competencies. These companies create competitive advantage through speed. That's why you see irrational investments. Netflix invested $15 billion in content and was losing money in 2015. The only reason is to gain market share quickly before someone else takes customer loyalty. So speed is key. Capital flows accordingly. Companies go public with losses but sell their story. Today, customer loyalty is less about brand and more about the least friction. Whoever provides the least friction solution wins. That's why startups use lean startup methodology to quickly deliver minimum viable product. In engineering, new practices like DevOps, BizDevOps, etc. are emerging. Some old companies like Ayrancı (founded 1876) are trying to transform. They have four main pillars: increase agility and accelerate digitalization. That's how they plan to survive the next century. Otherwise, they might face extinction. So I'll wrap up here.

Well, today's current trends are accelerating, but sometimes momentum is lost. Mobile penetration is about 2-3 billion globally. There are new opportunities in Africa, South Asia, and Latin America. On the individual side, especially learning, education systems will change significantly. Teacher-student relationships will change. Online certifications are becoming important. In America, there are ventures like Lambda School that take a percentage of your salary after you get a job. They are trying different education models. The university tradition is 300 years old; we need to see when traditions will break. Many of our habits are traditions. For example, handshaking originated to show no weapon. Why do we continue? If an alien came, they would ask why we shake hands. There is no rational benefit, just tradition. So we can change.

There's a fantastic opportunity. Many software products are location-independent now. Turkish startups like Hop and Atlas Can succeeded globally by focusing on quality, not just local sales. The local ecosystem is narrow; we need to target international markets.

That program is about developing open-source ERP software. It requires many modules. But the key is to create synergy between different initiatives.

I worked abroad and returned. We should not view it negatively. Experience abroad develops people. Some stay, but their networks remain. For example, a Turkish startup that won a global competition had founders who studied in the US. Physical boundaries are fading.

AI requires data. China and the US have huge advantages. Turkey produces less data, and much of it goes abroad. We need to think about this. In retail, algorithms are using past data for demand planning. Soon airlines will also rely on algorithms for optimization.

Turkey has positive momentum in defense and health. We should focus on biotech and medical devices. We can produce many things locally. Education needs to be more specialized and spread across Anatolia, not just Istanbul.

Yes, there are discussions. Data localization is important. Cloud computing is a great enabler.

It could work. But we need general skills. At Sabancı University, you choose later. Some programs let you specialize in AI in master's. However, many don't know there are multiple IT roles beyond programmer.

I see no issue. Many foreigners work in Turkey already. It's about cost-effectiveness.

It's a rich topic. We need both supply and demand incentives. TÜBİTAK is working on this. The best product is one that gets customer feedback. We still have a habit of buying foreign. We need to break that and also go global.

I have no problem with it. Let them learn, but don't force it. My son doesn't like it; he prefers design.

Sociologists and anthropologists are used in design thinking. Intel hired an anthropologist. Also, ethics in AI needs philosophers. Economists can work on platform economics. Many successful tech people don't have a tech background.

Corporate innovation is hard because companies optimize existing models. The innovator's dilemma is real. I recommend reading that book.