Update on the New #Conglomerates

My blog on the New Conglomerates has proven to be one of the most popular I have written. I’d been contemplating an update for a while, even before I heard this week’s announcement that Verizon is buying the bulk of Yahoo!. Talk about being prescient…. So, just over two years later, it feels very timely to return to the topic.

Image sourced from dc.wikia.com

Image sourced from dc.wikia.com

Of the so-called FANG tech stocks, when I was writing back in May 2014, Facebook had recently acquired WhatsApp and Oculus VR. However, apart from merging Beats Music into its own music service, Apple has not made any big name deals, but has made a number of strategic tech acquisitions. Meanwhile, Amazon has attempted to consolidate its investment in delivery company, Colis Privé, but got knocked back by the French competition regulators. Netflix finally launched in Australia in March 2015, and within 9 months had 2.7 million customers, a growth rate of 30% per month. Finally, Google has since renamed itself Alphabet, and purchased AI business Deep Mind.

Over the same period, Microsoft appears to have reinvigorated its strategy: back in May 2014, Microsoft had just completed its acquisition of Nokia. Since then, Microsoft has announced it is buying LinkedIn (following the latter’s purchase of Lynda.com in 2015), but has also shut down Yammer, which it had only bought in 2012. The acquisition of LinkedIn has been framed as a way to embed corporate, business and professional customers for its desktop and cloud-based productivity tools (and maybe give a boost to its hybrid tablet/laptop PCs). On the other hand, Microsoft has a terrible track record with content-based products and services, as evidenced by the Encarta fiasco, and the fact that Bing is an also-ran search engine. I think the jury is still out on what this transaction will really mean for LinkedIn’s paying customers.

So, what are the big tech themes, and where are the New Conglomerates competing with each other?

First, despite being the “next big thing”, VR/AR is still some way off being fully mainstream (although Pokémon GO may change that….). Apple and Google will continue to go head-to-head in this space.

Second, content streaming is not yet the new “rivers of gold” for publishing (and the sale of Yahoo! might confirm that there’s still gold in those advertising hills….). But music streaming (Apple, Spotify, Amazon and Google – plus niche services such as Bandcamp and Mixcloud) is gaining traction, and Amazon is building more content for SVOD (to compete with Netflix, Apple and Google). But quality public broadcasters such as BBC, ABC and NPR are making great strides into audio streaming (via native apps and platforms like TuneIn) and podcasting. One issue that remains is the fact that digital downloads and streaming still suffer from geo-blocking, and erratic pricing models.

Third, Amazon continues to build out its on-line retail empire, even launching private label groceries. Amazon will also put more of a squeeze on eBay, which does not offer fulfillment, distribution or logistics and is a less attractive platform for local used-goods sellers compared to say, Gumtree.

Fourth, Amazon is making a play for the Internet of Things (which, for this discussion, includes drones), but both Apple and Google, via their hardware devices, OS capabilities and cloud services, will doubtless give Amazon a run for its money. Also, watch for how Blockchain will impact this sector.

Finally, payments, AI, robotics, analytics and location-based services all continue to bubble along – driven by, for example, crypto-currencies, medtech, fintech, big data and sentiment-based predictive tools.

Next week: Another #pitch night in Melbourne…

 

 

 

 

Moving #innovation from “permitted” to “possible”

As the dust settles on the Federal election results, the Turnbull government has already been taken to task for failing to get one of its key messages across to the public: how to take advantage of the economic, technological, scientific, social and cultural opportunities inherent in the “Innovation Agenda”.  It seems that the so-called “Ideas Boom” failed to resonate with much of the electorate because, apparently, no-one has explained to them how innovation actually impacts their lives.

Screen Shot 2016-07-18 at 8.39.24 PMUnfortunately, I think it goes deeper than that: the recent campaign debates were limited to concepts of “traditional” job-creation; reliance on conventional relationships between the State, the private sector and individual citizens; and the priorities of (pre)serving the interests of public institutions such as 3-year Parliaments and even political parties themselves. The electorate may (perhaps rightly) feel short-changed by the level of the debate, but voters also need to take some responsibility for not challenging candidates to raise their game: where were the mainstream discussions on climate change, new technology, the future of “work”, digital disruption, scientific advances, and the changing attitudes towards end of life?

There is also a core misconception, that the government is responsible for fostering  innovation, that only public policy (and public resources?) can set the innovation agenda. I don’t believe it is the role of government to “make it happen”, and certainly, such an approach is not going to occur overnight. At best, government can create a framework, highlight best practice, and encourage appropriate activity. Just as I don’t think you can “teach” creativity (only identify, support and nurture it), I don’t think innovation is something to be determined from the outside. As with creative inspiration, innovation has to come from within: from employees, from customers, from suppliers, etc.

The risk of relying solely on governments or other vested interests to shape innovation is that our thinking becomes constrained by what is “permitted”, rather than what is “possible”.

On a related theme, it was refreshing to listen to a panel of speakers at a seminar on “Innovation from the inside out” held during Melbourne Startup Week. The key messages were:

  • how to instill purpose in any organisational change, business transformation or innovation project;
  • how to empower all levels of an organisation to make ideas happen; and
  • how to incentivize intrapreneurship?

This naturally leads to a discussion of developing more adaptable and resilient career paths. If you don’t have transferable skills, or if you not prepared to update your knowledge, or if you think of your career path as a straight linear projection, it will be much harder to cope with the demands of a flexible work environment. If you think of yourself as only ever performing a specific job function, or identify only as your profession or job title, or define yourself only by your formal qualifications, you will only ever think about what roles you may be “permitted” to perform, rather than seeing what career opportunities may be possible. As a careers adviser in the Victorian Government’s Skills and Job Centre network told his audience at a recent Small Business workshop: it’s not the responsibility of the government or your employer to manage your career. Notwithstanding upskilling initiatives and structured outplacement programs, we are each responsible for shaping our own destiny – especially in the increasingly on-demand economy.

Back to the main topic, I’ve been participating in a series of workshops on the Future of Work, Money, Ageing, Death, Democracy etc. hosted by the Re-Imagineers, an on-line ideas playground that builds co-created artifacts to support people-led innovation. The model is designed to help organisations draw on insights from their in-house knowledge and skills, customer experience and feedback, and external expertise to originate new ideas and innovative solutions from within their own resources, and which align with their values and those of their stakeholders. It’s still early days, but all of the discussions have identified some amazing ideas and possibilities.

The team from Re-Imagineers will be visiting Australia during July and August, so if you or your organisation would like to hear about the key learnings from these forums, especially as they impact sectors such as finance, health care and IT, please contact me via this blog, and I will make the relevant introductions.

Next week: Update on the New #Conglomerates

 

Startup Victoria’s #Pitch Night for #Startup Week

The grand finale of Melbourne Startup Week was Startup Victoria‘s regular pitch night held at inspire9. Six months in, and this new monthly format has become a major fixture on the startup calendar, judging by the audience size, and the range of startups applying to pitch. There are still a few teething problems (the AV quality is a bit variable, and some of the judging panels are probably too “soft”…), but it’s established something of a benchmark against which other pitch nights might be compared. This month’s cohort covered medtech, wellness and the greetings industry.

StartUp Vic 240616

Cardly

Cardly is an online service that allows users to send personalized greetings cards to friends and loved ones. Under the banner of “you write, we post”, customers can choose from a range of artist-designed cards, add their own message, and Cardly will then print and send the card from a location as close as possible to the recipient (currently London, Sydney and New York).

A variant on the familiar 2-sided market model, Cardly has built a community of independent artists who supply the card designs. Artists are charged a sales commission on each order, and they get their own store front on Cardly. And for anyone struggling for words, there’s a range of predefined texts and doodles.

Because this is a print-on-demand model, using digital printing, there is zero wastage (unlike the traditional greeting card industry where over-production and limited distribution are commercial headaches). However, even with some “handwriting” fonts, there are some design and user limitations, which something like the Sensel Morph touch-sensitive track-pad may be able to address?

Cardly is aiming to take a chunk of the retail market and disrupt the global greetings card industry. The judges took a slightly different view. Based on the founders’ own data, consumer customers will probably send an average of 12 cards per annum, and at $6.45 per card, it’s a tough sell. However, by looking at a lower cost per acquisition, addressing the corporate market and offering a white label solution, the business would be in a better position to scale. There was also a suggestion for an engineered viral solution to drive traction through collaborative cards, and other ideas for partnerships (e.g., gift buying services and gift cards).

Cardihab

Cardihab (“Get Back To Life”) has appeared in this blog before, and is a CSIRO spin-out that has developed a mobile support solution for cardiac patients via an app and a patient/GP portal. As someone whose father is recovering from major heart surgery, this pitch got my personal vote!

The success rate is staggering – patients using the app are 70% more likely to complete rehab. So far, four hospitals have signed up, with three more in the pipeline. As well publishing their research, the founders see Cardihab as being a broader platform for managing chronic illnesses.

Currently in the process of getting investor ready, the proposed business model will charge an annual license for hospitals, plus a per patient fee.

The judges had some questions about the potential market (“Anyone with heart disease”) and wanted to know a bit more about the bench strength of the team.

Black

Staying with the medtech and after-care theme, Black‘s modest goal is to “revolutionise healthcare”, via an in-home observation solution that scans patient movement and analyses interaction with their helpers. The scanner strips out personal data (features, attire) using skeleton tracking to monitor movement and falls, while learning from patient gestures. It can use real-time alerts to contact helpers, carers and emergency services.

The scanning software is currently trialing in casinos to refine the machine-learning algorithms, and all trials are subject to ethical approval.

Although still at a conceptual stage (in terms of health care applications), and notwithstanding privacy concerns, this project demonstrates that predictive tools will be vital to helping the elderly and the infirm to continue living independently in their own homes, which will have significant advantages to the cost of long-term care, preventative health services, patient rehabilitation and after-care services. There are doubtless other, similar solutions in development, and the outcome will likely be a mix of blended services based on ease of use, cost of roll-out, system interoperability and patient efficacy.

Honee

Last to present was the team from Honee which is bringing digital connectivity to the wellness, fitness and beauty industry. The solution they offer is designed to make it easier to discover and book an appointment for a treatment, consultation or workout session, by connecting merchants and users.

With previous international experience at Delivery Hero, Quandoo and Zomato, the founders have strong startup business credentials in adjacent markets – connecting consumers to service providers via search discovery, customer reviews, personal recommendations and proximity.  Of particular interest in this sector is the growing “wellness travel market”.

There are undoubtedly competitors already working on similar solutions; and it may just be that I’ve seen far too many pitches in the past few years, but I’m sure there was a startup out there offering a “just in time” service to help find and book appointments for personal services – Fit Me In? – and I recall another comparable startup idea for restaurants to offer last-minute menu specials via a location-based app.

Nevertheless, as we know, execution is key, and the judges asked about the huge cost to build a consumer brand – hence Honee is focusing on service providers to get their brands on line. There is an MVP in pre-launch, and Honee has built a mobile responsive website, with a grant from the Melbourne Accelerator Program.

After the vote (and thanks to technology, the results of which were available in minutes….) Cardly was declared the night’s winner.

Next week: Moving #innovation from “permitted” to “possible”

Level 3’s Enterprise #Pitch night

As part of the recent Melbourne #Startup Week, IT consulting firm, Versent hosted a B2B pitch event at their product development lab, Level 3. Introduced by Thor Essman, the judges for the evening were Grant Thomson from York Butter Factory, Paul Naphtali of VC fund Rampersand, and Carl Rigoni, Head of Digital at Australia Post. It presented a very focussed cohort of enterprise solutions, that covered employee comms and engagement, design thinking and cybersecurity.

Screen Shot 2016-07-03 at 2.14.42 PMPax Republic

Pax Republic is positioned as an employee engagement platform that grew out of the founders’ background in mediation. Recognizing that organisational change programs have a high failure rate, the founders explained that lack of project or employee data isn’t the problem; it’s a shortage of actionable insights and recommendations.

The solution offers text-based content and scripted dialogue combined with AI and online facilitators. Many traditional enterprise tools don’t work, either because they don’t reduce time and cost, or they can’t scale.

When asked if AI can measure sentiment or mood, the founders explained that the system makes use of emoticons to capture employee feedback plus keystroke analysis. In terms of a commercial model, the goal is to train up internal facilitators to deliver the service, rather than getting involved with specific change management projects.

The judges felt that the pitch needed to refine the problem statement and the solution proof points, as well as explain what makes this solution different. In particular, who is the buyer? It’s also important to tell the sales story, and expand on the risk transfer and pricing benefits.

Forticode

Forticode has developed an elegant and deceptively simple password protection solution, to remove the risk and costs of password resets for their corporate clients. Basically, it can support multi-factor authentication using colour coding and a randomized keypad, incorporating character sets as well as emojis.

It can provide context aware authentication, and native protection from endpoint hacking attacks, via a plug-in architecture and 3-factor authentication, using patented technology.
According to the founders, finger prints are immutable, but still do not provide 100% identity confirmation on touch screen devices.

There were questions from the judges and the audience about alternative solutions. Compared to an IPA gateway for trust and authentication or password aggregators, Forticode offers a much more robust solution and can support machine-to-machine verification.

The sales model is to target security teams within risk and compliance departments, and price on a per user per month basis. Importantly, there is no third-party software in the stack. And, there was even an offer to introduce the founders to Auspost….

Naked Ambition

With the tag line of “Always Be Creating”, Naked Ambition is a consultancy for innovation and design thinking. Their process is to focus on future needs, help clients get closer to their customers, and in doing so, help employees to leverage customer insights. The ultimate goal is to make design thinking skills ubiquitous. Naked Ambition’s aim is to embed the teaching in the organisations they work with.

The judges questioned who exactly is the customer, and what segments do they work in? There was also some discussion whether the service was more about personal branding and intrapreneurship, rather than pure solution design.

In particular, the judges wanted to know what gives Naked Ambition the “license” to offer their services? Despite hiring a leading design thinking expert from IBM, there was a sense that there is an oversupply of similar services, and that clients are not looking for yet another program. Instead, they are thinking about “buying units of innovation” for specific projects, as and when they need them.

Konnective

Last to present was Konnective, a business I have blogged about before. In short, this is an employee messaging app for frontline staff, many of whom do not have corporate e-mail addresses, let alone access to a their own desktop computer.

As part of the product development, Konnective now offers Groups, dashboards, analysis of what’s working and employee reach. Charging a basic annual fee per employee, Konnective has clients in mining, healthcare and manufacturing. The platform supports OH&S comms, promotes shift availability that can reduce agency hiring fees, and help reach hourly employees who don’t access corporate e-mail.

The judges asked about BYOD, and the risk of/resistance to having organisational data on personal mobile phones. Plus, why Konnective and not, say Yammer or Slack? These are answers that need to be made more explicit. Finally, Konnective is still working on data analytics, and there was a suggestion of opportunities among travel companies and tour guides, but that would require some multilingual capabilities.

On the night, Forticode won the judges over and took out first prize. This was the second of these events, and I look forward to attending more in future.

Next week: Startup Victoria’s #Pitch Night for #Startup Week