Author: Fast Company Contributor

06.29.23

How an old-school lawyer and financier is rehabilitating a controversial industry, but with mixed results

BY Fast Company Contributor 3 MINUTE READ

How excited would you be about the industry you work in if your profit potential formulaically contracted quadrennially, super powerful politicians hated it, and you knew the actual date on which it would cease to exist? Such is the scene of bitcoin miners, the bionic combination of robust computers and their human orchestrators that tirelessly seek to digitally unearth new bitcoins by solving increasingly complex math equations. Every four years marks a “halvening” of the reward – a certain number of bitcoins – for each newly minted coin, which is meant to limit the number of bitcoins in circulation and reflect the expected rise in value of the digital currency, but it’s also deflating for bitcoin miners. Comparing the evolution of bitcoin mining to gold mining is an obvious but nonetheless effective metaphor­. In the early days of gold mining, a lone miner with a pickaxe might chip off enough gold in his first strike to retire, which is how all the crypto bros who got into Bitcoin early are idly living on the beach in Puerto Rico. These days, gold mining and bitcoin mining are massively time, equipment, and capital-intensive pursuits limited to well-resourced companies­–like Bit Digital (NASDAQ: BTBT), the publicly traded bitcoin mining company run by Samir Tabar. An Oxford and Columbia Law School graduate who cut his teeth in big law and traditional finance, he’s ostensibly a strange fit for an anti-establishment industry that makes as many headlines for its charlatans as it does breakthroughs, but he might just be the kind of person who can help save Bitcoin mining from regulators, shrinking margins, and crypto bros.

Samir, who welcomes you to call him Sam, got into crypto in 2017, just after federal and state governments started really paying attention to blockchain technology. About half of the 21 million possible bitcoins had been mined, and the reward to miners for each bitcoin mined had just been halved to 12.5. It isn’t known how many bitcoin miners there were in 2016, but there are certainly more today, and they’re mining the 2 million remaining coins for half of the reward. After side-eyeing crypto for years, 39 states now have legislation enacted or pending, and shortly before Sam was appointed as CEO of Bit Digital the company (along with five others crypto miners) received a strongly worded letter from Sen. Elizabeth Warren asking a litany of questions about energy use and expansion plans. One could compare Sam’s industry timing to arriving late to a hedonistic party that seemed very likely to get busted by the cops. That isn’t how he sees it, though. Sam seems to enjoy the intersection of complexity and unanswered questions. “This is when it gets fun,” he says with a bit of a smile.

The type of people who were drawn to Bitcoin in the early days typically aren’t the type of people who could run the kind of business that Sam runs: one with a pristine balance sheet, a commitment to being carbon-free (99% of their energy is already from renewables) and an increasingly diversified revenue stream. Anticipating legislative scrutiny and personally committed to making bitcoin mining sustainable, Tabar’s team moved Bit Digital’s considerable operations – nearly 40,000 bitcoin miners – from China to the US, Canada, and Iceland. After weathering the 2008 financial crisis, Sam is also focused on balance sheet strength and resilience in the event of another crypto downturn. He managed to put the company in a position to become a lender to other bitcoin mining operations, securing loans against desirable assets. “It’s a win-win, either way,” says Tabar, “meaning we profit regardless of the outcome.”

Anyone who isn’t a politician funded by old-school finance would look at Bit Digital and give it a gold star for working harmoniously with local economies, leading the industry into a green future, and operating with exceptional financial prudence.

There remains the matter of bitcoin mining’s existential threat, but Tabar seems to have that covered, too. “There’s been a culture of tribalism in the cryptocurrency industry,” he says.

“Your coin affiliation is even more rigid than your political ideology – you’re either for Bitcoin or Ethereum, and that’s shortsighted and frankly limiting from a revenue perspective.” Sam and his team have built into Bit Digital a unique, symbiotic perpetual flywheel where the company accumulates and stakes (the process of transaction validation) Ethereum, which creates an attractive hedge and generates revenue that can be reinvested into bitcoin mining operations or added to an already robust balance sheet. “It’s the philosophical and operational difference between the short-term greed of crypto’s past and the shareholder value of crypto’s future,”

Tabar says. “How can we nurture a culture of continuous innovation but find ways for the upside to benefit everyone?” And with that sentiment, Sam could be separating himself from traditional financiers in his past but also the crypto bros of Bitcoin’s past. But time will tell.

By Adam Devine

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07.28.22

Developer shortage is behind the current (poor) state of innovation

BY Fast Company Contributor 4 MINUTE READ

A black and white collage swirls on a hospital computer screen: an MRI scan. Even to the trained eye, it’s difficult to see anything amiss. But an AI-powered computer program—using software trained on thousands of similar images—sees the early signs of cancer. Detected early, the prognosis for recovery is remarkably good.

Behind this amazing innovation, like so many others in our lives today, is something both omnipresent and easily overlooked: code.

Whether it’s health screenings or the way we order food, do our banking, or drive cars, the biggest innovations that shape our lives today are powered by software—specifically the roughly 30 million developers worldwide who write the code that creates it. How fast we progress, in business and society, comes down to how fast, and how efficiently, they can work.

But the efficiency of converting raw ideas to code and, ultimately, shipping it to end users is anything but assured. In fact, this “innovation supply chain,” much like our physical supply chains, faces serious pinch points. Today, developers—the driving force behind so much tech advancement—are being held back by outdated processes and a lack of tools. Clearing those bottlenecks is much more than a matter of convenience: I believe it has a major impact on the pace at which humanity can progress.

THE TOIL CLOGGING THE INNOVATION SUPPLY CHAIN

We saw during the pandemic how something as simple as a lack of shipping containers can impact commerce and productivity globally. Those same types of backups occur in the innovation supply chain, only the bottlenecks that occur in the production of software aren’t so much physical; rather, they are process-oriented.

A huge issue holding developers back right now is the amount of toil that creeps into their daily work. As researcher Vivek Rau identified in his work with Google, toil refers to any process that is “manual, repetitive, automatable, tactical, devoid of enduring value, and that scales linearly as a service grows.” In layperson’s terms, toil is all the administrative and busy work that goes along with writing software.

This may sound merely annoying, but as software has become more complex, so has the amount of toil developers encounter—taking precious time away from the creative work that has the potential to change our lives.

I’ve seen this impact firsthand. When I started as a developer, the best part of my day was putting on my headphones, pumping some music, and getting into the zone to write some code. But throughout my career, that has become a smaller and smaller part of a dev’s job. Software engineers now spend less than half their days writing code, with some estimates putting that number as low as 20%. The rest of their time is bogged down by tasks such as testing and shipping code, waiting for builds to get done, or administrative roadblocks like needing approval to go forward with the next stage of a code change.

This has consequences on multiple levels: for developers, it’s extremely frustrating and stifles creativity and enjoyment on the job—even leading to burnout and contributing to developer shortages. For businesses racing to innovate, it can slow output and limit the ability to bring products to market in a timely manner. For the rest of us, it translates to a slowed pace of life-changing innovation. I have found that part of the reason advancements like self-driving cars or personalized medicine aren’t commonly accessible right now is surprisingly mundane: developers are being held back by mountains of toil.

FREEING DEVELOPERS TO INNOVATE FASTER

Unblocking the innovation supply chain requires bringing developer experience into the spotlight. User experience and even employee experience have become a common focus of organizations looking to improve output, but the conditions developers work under—and what they’re asked to spend time on—have long been neglected. Thankfully, that’s starting to change.

The concept of “DX” has emerged in tech circles in the last few years and is now starting to make its way into the wider business community. More companies are realizing that getting more out of their developers means making room for creativity and reducing the complexity of their workflow.

Using technology to automate rote processes, like testing, security, and delivery, is one way to do just that—and it addresses a deep irony that lingers in the developer space. For all the cutting-edge AI and automated tools software engineers create for other industries, tools to help developers in their own work lag far behind.

I noticed this early on in my career as a developer and decided to do something about it: starting a series of companies to equip developers with a more robust, reliable toolkit. The latest iteration of these platforms, incorporating AI and machine learning, has helped companies drastically cut down on toil and free up developers’ time for more important work in fields as diverse as finance, transportation, and health care.

A final issue is one of company culture: Developers work best when empowered with the trust and autonomy to do great work. But too many managers and organizations bog down their teams with arbitrary processes or administrative tasks. Even simple changes are held up by required approvals. A far better approach is to entrust developers with freedom to execute within defined guardrails. This delicate balance of autonomy and oversight allows for rapid innovation without compromising results. We do this with our team by setting parameters on cost, security, or UX, but otherwise giving them free rein.

The payoff for these changes goes beyond benefits to businesses. The next wave innovation goes far beyond consumer conveniences like media streaming or food delivery apps. More powerful batteries could help mitigate climate change, biometrically targeted treatments may eradicate some cancers, and 3D-printed organs may extend the lives of countless people.

Clearing toil from developers’ paths—and unblocking the innovation supply chain—means this future can become a reality sooner rather than later.

ABOUT THE AUTHOR

Jyoti Bansal is a multi-unicorn founder, entrepreneur and investor. He is the CEO of Harness, which uses AI to simplify software delivery.

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06.13.22

Crawl Neutrality: How Google domination of the internet can be handled

BY Fast Company Contributor 3 MINUTE READ

Today, one company—Google—controls nearly all of the world’s access to information on the internet. Their monopoly in search means for billions of people, their gateway to knowledge, to products, and their exploration of the web is in the hands of one company. Most agree, this lack of competition in search is bad for individuals, communities and democracy.

Unbeknownst to many, one of the biggest obstacles to competing in search is a lack of crawl neutrality. The only way to build an independent search engine and the chance to fairly compete against Big Tech is to first efficiently and effectively crawl the Internet. However, the web is an actively hostile environment for upstart search engine crawlers, with most websites only allowing Google’s crawler and discriminating against other search engine crawlers like Neeva’s.

This critically important, yet often overlooked, issue has an enormous impact on preventing upstart search engines like Neeva from providing users with real alternatives, further reducing competition in search. Similar to net neutrality, today we need an approach to crawl neutrality. Without a change in policy and behavior, competitors in search will remain fighting with one hand tied behind our backs.

Let’s start from the beginning. Building a comprehensive index of the web is a prerequisite to competing in search. In other words, the first step to building the Neeva search engine is “downloading the Internet” via Neeva’s crawler, called Neevabot.

Here is where the trouble begins. For the most part, websites only allow Google and Bing’s crawlers unfettered access while discriminating against other crawlers like Neeva’s. These sites either disallow everything else in their robots.txt files, or (more commonly) don’t say anything in robots.txt, but return errors instead of content to other crawlers. The intent may be to filter out malicious actors, but the consequence is throwing the baby out with the bathwater. And you can’t serve up search results if you can’t crawl the web.

This forces startups to spend inordinate amounts of time and resources coming up with workarounds. For example, Neeva implements a policy of “crawling a site so long as the robots.txt allows GoogleBot and does not specifically disallow Neevabot.” Even after a workaround like this, portions of the web that contain useful search results remain inaccessible to many search engines.

As a second example, many websites will often allow a non-Google crawler via robots.txt and block it in other ways, either by throwing various kinds of errors (503s, 429s, …) or rate throttling. To crawl these sites, one has to deploy workarounds like “obfuscate by crawling using a bank of proxy IPs that rotate periodically.” Legitimate search engines like Neeva are loath to deploy adversarial workarounds like this.

These roadblocks are often intended at malicious bots, but have the effect of stifling legitimate search competition. At Neeva, we put a lot of effort into building a well behaved crawler that respects rate limits, and crawls at the minimum rate needed to build a great search engine. Meanwhile, Google has carte blanche. It crawls the web 50B pages per day. It visits every page on the web once every three days, and taxes network bandwidth on all websites. This is the monopolist’s tax on the Internet.

For the lucky crawlers among us, a set of well wishers, webmasters and well meaning publishers can help get your bot whitelisted. Thanks to them, Neeva’s crawl now runs at hundreds of millions of pages a day, on track to hit billions of pages a day soon. Even so, this still requires identifying the right individuals in these companies that you can talk to, emailing and cold calling, and hoping for goodwill from webmasters on webmaster aliases that are typically ignored. A temporary fix that is not scalable.

Gaining permission to crawl shouldn’t be about who you know. There should be an equal playing field for anyone competing and following the rules. Google is a monopoly in search. Websites and webmasters are faced with an impossible choice. Either let Google crawl them, or don’t show up prominently in Google results. As a result, Google’s search monopoly causes the Internet at large to reinforce the monopoly by giving Googlebot preferential access.

The internet should not be allowed to discriminate between search engine crawlers based on who they are. Neeva’s crawler is capable of crawling the web at the speed and depth that Google does. There are no technical limitations, just anti-competitive market forces making it harder to fairly compete. And if it’s too much additional work for webmasters to distinguish bad bots that slow down their websites from legitimate search engines, then those with free rein like GoogleBot should be required to share their data with responsible actors.

Regulators and policymakers need to step in if they care for competition in search. The market needs crawl neutrality, similar to net neutrality.

Vivek Raghunathan is cofounder of Neeva, an ad-free, private search engine. Asim Shankar is the Chief Technology Officer of Neeva.

FastCompany

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06.08.22

A Business case for Health Data Banks

BY Fast Company Contributor 3 MINUTE READ

The practice of medicine often requires making the most of a tragic situation, learning from illness to help people stay healthy. Look no further than the act of organ donation. The donor’s selfless act can transform a loss into hope for the sickest patients—those identified most in need of an organ transplant by the United Network for Organ Sharing (UNOS), the nation’s transplant system. Every organ donor has the potential to save up to eight lives and improve quality of life for 75 others. So many of us check the Organ Donor box on our driver’s license, often without giving it much thought. One of medicine’s great paradoxes is that the end of one life can spawn the chance for others to live. When we think of the benefit of a breakthrough therapy, or the clinical impact of an individual life, it’s always a story of one-to-many.

I have spent the better part of the last decade building a dedicated team focused on advancing precision medicine through data and technology—which is itself a one-to-many model. As the entire industry has made immense progress in leveraging data to inform medical research and decisions at the point of care, it dawned on us: Why should data be treated any differently than organs?

When data from diverse sources—including electronic healthcare records, imaging from pathology slides and radiology scans, and results of genomic sequencing—are combined and de-identified across the healthcare system, we can significantly advance therapeutic discovery and development, and find better treatment options. This longitudinal view of the current landscape of cancer, of what’s working and what isn’t, can help researchers identify gaps where novel treatments are most needed. Think of it as a system like UNOS, but for data. Real-world evidence is applied to guide other patients’ treatment more precisely, and more effectively. Applying the data lens to healthcare, it’s fair to say that the history of medicine is the progressive application of knowledge to biology. In our own time, patient data has become the most sophisticated expression of applicable knowledge. So, what can we do to make it a model of many-to-many?

A decade ago, if a patient responded well to a novel therapy, this was the limit of the learned information. The doctor couldn’t be sure that the next patient to walk through the door would experience the same. But now, with data-driven insights, made possible by the use of artificial intelligence that allows researchers to quickly interpret vast amounts of clinical information to derive unique insights, there is so much more to inform treatment choices and decisions. Connections can be made from this data that might explain certain positive outcomes among patients, whether it be specific tumor biomarkers or hereditary signals. The more de-identified patient data that can be collected, organized, and harmonized, the greater the chance that we’ll find the next breakthrough in care, and, potentially, the difference between life and death for future patients.

Like organs, healthcare data is powerful. When appropriately secured and de-identified in compliance with applicable laws and regulations—as is the case with organ donation—data can enable doctors and researchers to learn from the experience of today’s patients to help tomorrow’s. We are already seeing it successfully applied each and every day, when physicians leverage data to personalize each of their patient’s care by identifying targeted therapies and promising clinical trials.

So, how do we get there? As UNOS reports, organ transplants were managed entirely by individual hospitals only until the 1970s; however, that’s still where we are with data, which is managed at the individual health system level, with little infrastructure to enable de-identified data sharing at a national scale. We can only best use data if it’s harmonized across the industry, and it is inclusive of all patient populations. We need to remove technological barriers (e.g. interoperability, data standardization), share data across hospitals and healthcare institutions, and work together to create insights that will help generations of patients.

Health data can create just as much value as organ donation, especially in oncology. But, while a cancer diagnosis will always be devastating, perhaps we can advance care driven by the insights from collective de-identified patient data to turn those experiences into hope.

Eric Lefkofsky is the founder and CEO of Tempus.

FastCompany

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05.30.22

Why Media companies must embrace e-Commerce

BY Fast Company Contributor 6 MINUTE READ

E-commerce has become an essential part of today’s world, and media publishers who haven’t already gotten on board with it should immediately start finding strategies that could work for them.

“This is too big a market to miss out on,” Damian Radcliffe told INMA members during Wednesday’s members-only Webinar, Why publishers need an e-commerce strategy (and how to implement it). “Whether you feel comfortable with it or not, this is a space that publishers need to crack. Because otherwise, this is a huge amount of consumer and advertising spend that is just going elsewhere. Publishers can’t afford to overlook that market.”

Radcliffe, a digital analyst, journalist, researcher, author, and professor of journalism and practice at the University of Oregon, took a deep dive into the trends, drivers, and value of e-commerce for publishers. He explained that although e-commerce was already thriving pre-pandemic, COVID-19 lockdowns created a massive spike early in 2020 as consumers turned online to find the goods they could no longer buy in person.

“E-commerce saw five years’ worth of growth in a year driven by COVID,” he said. “Now it has changed shopping for good.”

Although growth is slowing, it will continue and by 2024, media investment company Group M projects that one-fourth of all commerce will be done online.

COVID-19 accelerated the already-thriving e-commerce environment.

“This is not just unique to developed markets,” Radcliffe noted. “People are shopping online all around the world, and about six in 10 people are buying something online every week.”

The most popular purchases in terms of revenue are:

Electronics

Fashion

Furniture

Toys, hobby, DIY

Personal and household care

Food

Beverages

Physical media

A breakdown of the most popular e-commerce categories with the annual spend for each.

Radcliffe suggested that knowing the breadth and depth of these markets is useful to publishers, as it can help guide them in making decisions about which areas of e-commerce could be a good fit for them. As advertising revenue declines, he said more publishers “are increasingly embracing e-commerce as part of a suite of different revenue strategies.” It has now become the fourth most important type of revenue for publishers. And as media companies realise they need three or four different revenue streams, it will continue to grow in value and importance.

Examples of e-commerce innovation

Radcliffe shared some of the more high-profile examples of publishers leveraging e-commerce, such as The New York Times creating a standalone subscription for its popular Wirecutter review section. Review Web sites have enjoyed tremendous growth in recent years. The next logical step is to provide links to products for consumers to buy them, he said.

Another new approach sees the content recommendation model used on digital platforms being used to encourage readers to buy products. For example, Taboola, the content discovery platform, recently acquired an e-commerce component that allows publishers to integrate product offers and recommendations into their Web sites, creating a significant revenue stream. And some brands, such as Forbes and GQ, are creating e-commerce shops offering their brand logo on apparel and merchandise.

The combination of growing consumer spend and the appeal of e-commerce as a growing revenue priority for publishers is driving new merger and acquisition strategies, creating new verticals, and encouraging news media companies to look at how to use the combination of content and commerce as part of their revenue mix.

Putting e-commerce into action

“There is a myriad of different ways that e-commerce can be implemented, and it can be found across pretty much any content vertical,” Radcliffe said. He showed examples of how publications are using features that allow consumers to click through and buy goods featured in articles. This can be used in nearly every area, from fashion to food to travel.

Radcliffe returned to the topic of product reviews, noting that most people who are reading reviews are ready to buy.

“Consumers really value reviews. They go to sites where they trust the reviews,” he said, reiterating that the next logical step is to let them click on a link that lets them buy the product. “This is just about making the consumer journey as simple as possible.”

Historically, publishers have provided information on products, then sent them to a third party to make the purchase, he said: “Unless you have an existing affiliate relationship with those third-party platforms, publishers miss out on that spend that they’ve played such an instrumental part in making [the sale] happen.”

Radcliffe presented seven strategies news publishers could use to incorporate e-commerce into their revenue mix:

Affiliate marketing. This is presently the most commonly used source of e-commerce for publishers, allowing them to earn commissions on conversions or clicks on Web sites, social media, etc. Radcliffe said it can be “a substantial source of income” for publishers, and news brands carry the kind of credibility and cache that brands want to align with. This can be particularly useful for review sections of publications.

Online stores. Many publications are creating their own stores with branded merchandise.

Memberships. In the evolving subscription economy — which is expected to hit $1.5 trillion by 2025 — consumers are embracing the membership mindset. Wine clubs, for example, boomed during lockdowns and that same model can be applied to food delivery, beauty products, and more.

Retail partnerships. Partnering with retailers to provide a click-through purchasing experience can boost revenue. In the case of BuzzFeed’s Tasty, a partnership with Walmart allows consumers to click on a cart at the end of the recipe and find all the ingredients waiting to be ordered.

Classes and courses. Online courses and one-off classes became essential during lockdowns, and they still provide a way for consumers to learn anything from new languages to DIY home improvements.

Physical experiences. Tapping into in-person experiences can be profitable, too. This includes things like offering travel booking services alongside articles on destinations.

Digital experiences. Of course, virtual events remain popular, too. News media companies became adept at converting live events to online experiences during the pandemic and can profit by selling tickets and sponsorships.

No time to waste

Radcliffe emphasised that his examples were not forward-looking; they are all examples of what is being done with e-commerce today. And it’s important for publishers to create and implement a strategy sooner rather than later to remain competitive. He concluded with a summary of the top eight trends that are shaping e-commerce.

Social commerce. This blend of e-commerce and social media is changing how consumers shop. Currently, it’s a huge source of sales in China, and Radcliffe said to watch that market as an indicator of what is going to happen with it globally.

Live streaming. Again, this is a significant revenue stream in China that is picking up steam in the United States. It allows customers to purchase products during live streaming videos with a simple click.

Augmented Reality. AR allows customers to “try on” things like clothing, shoes, and even makeup shades before they buy. Retailers anticipate it will reduce the number of returns while encouraging people to shop online.

Visual search. This allows users to snap a photo offline, and platforms like Pinterest and eBay can help them find a store to buy it.

New payment models. The “buy now, pay later” method has gained traction, with companies including Mastercard, PayPal, and Shopify offering the option to make payments in interest-free installments rather than paying the full purchase price up front.

Shoppable video. Like AR, this is starting to get more attention. It allows users to scan a QR code and be taken directly to the marketer’s site for purchase.

E-commerce everywhere. As all the trends come together, Radcliffe predicts e-commerce will be pervasive. “It’s going to be everywhere — on our social feed, on Web sites, on television — and it’s going to be easier and easier for [publishers] to do this as well: through QR codes, text messaging … and on screens.”

Frictionless future. Ultimately, e-commerce experiences will become the purchasing process as seamless as possible.

“These [things] are all taking place now. None of this is fanciful or far-fetched,” Radcliffe said. “I think what’s important for publishers and content creators is to think about how to implement this into their e-commerce work because this is what consumers are already doing and what they’re going to expect.”

Source: INMA

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05.25.22

How early stage startups can deal with the changing VC landscape

BY Fast Company Contributor 3 MINUTE READ

Benchmark’s Bill Gurley tweeted in April 2022, “An entire generation of entrepreneurs and tech investors built their entire perspectives on valuation during the second half of a 13-year amazing bull market run.” With VCs raising larger and larger funds, startup founders had become accustomed to certain key performance indicators (KPIs) set by VCs who were simultaneously providing mammoth funding rounds. The global economic challenges, alongside a volatile stock market, has resulted in a fundamentally new VC marketplace. Business plans, go-to market strategies, and valuations that had all been tailored to certain VC criteria are being forced to rapidly change.

VCs now are much more prudent about their money, and they are unilaterally shifting the goalposts. They are increasing expected KPIs and milestones while also reducing their investment amounts–causing significant disruption to startups’ plans and ultimately impacting their business decisions and approaches.

This trend of rising KPIs and lower investment rounds is set to continue for some time, resulting in sustained uncertainty and a much harder market for startups to thrive in.

While the situation looks bleak, there are steps companies can take to mitigate the damage and build the foundations to succeed in the long run. Here are several strategies we recommend earlier-stage portfolio companies to adopt.

CALCULATE YOUR VALUATION BY LOOKING FORWARD, NOT BACKWARD

In order to avoid running into a financing wall in the near future, calculate your valuation based on where you think you’ll be in a few years’ time, then work backward to figure out your valuation today. This is an important mindshift for founders. It encourages companies to “test” their valuation against other companies in the sector, especially those that are already publicly-traded and therefore adjusting to the market changes to arrive at a more accurate and realistic valuation. It is also a prudent tactic: If your valuation is too high today, you run the risk of an undesirable down round tomorrow. In short, future numbers help “future-proof” your current ones.

DECIDE WHAT YOU CAN GIVE UP WHEN RAISING CAPITAL AND LOOK BEYOND THE CHEQUE

When approaching VCs today, it’s critical that you prioritize and be clear about your needs. Like when making any complex decision, it is far easier to decide in advance what you are willing to be flexible about rather than retrospectively changing course. The quality of investor, size of the round, terms or clauses and valuation are all elements to consider when raising capital, but for now founders need to resist the temptation to focus on company valuation.

The intuitive yet limited approach of starting a negotiation based on valuation in this climate is counterproductive. It’s imperative to limit the challenging clauses to the very minimum, making sure the round size is enough to comfortably fund the company going forward and prioritize working with the right investors. Only then should the valuation come into play.

INCREASE EFFICIENCY AND EXTEND YOUR RUNWAY

Rapid growth has been the watchword of tech companies for much of this bull run, but that’s now being replaced by an emphasis on profitability and efficiency. Can you cut unnecessary burn to achieve sustainable revenue faster? How can you demonstrate product-market fit while being capital efficient?

These are questions that board members and investors are increasingly going to ask, and prioritizing the answers while making a conscious effort to drive efficiency is key to providing a company with as much runway as possible and being as attractive as possible to investors.

RAISE MONEY, EVEN WHEN YOU DON’T NEED IT

The easiest time to raise money is when you don’t need it, and taking this step and preparing for a variety of eventualities prevents a situation in which founders are trying desperately to raise money at the expense of other pressing company issues.

Even if you have 12 to 24 months of runway, raise money now if you can. Go to your internal investors and take a hit on your valuation or raise a smaller round if necessary. This also demonstrates that yours is the type of company that can raise money in any kind of financial environment.

PREPARE FOR KNOCK-ON EFFECTS

Being mindful of all the players in your industry and the challenges that they, too, are facing, sets you up to make sound business decisions in an unpredictable and downturn market.

This trickle-down effect means that you’ll need to spend more time demonstrating the value of your service to increasingly hard-pressed customers. Do you need to tweak your Go-to-Market approach to cope with the changes?

AGILITY MAKES ALL THE DIFFERENCE

The good news is many of the best companies actually emerge during market corrections, and those who are savvy today are likely to ultimately reap the rewards for years to come.

It’s reminiscent of an anecdote: A few years ago, the organizers of the Jerusalem Marathon messed up the race’s signage, leading runners to inadvertently add a couple of kilometers going the wrong way. Incredibly, the marathon’s winner was not necessarily the top bet, but a guy who realized the signs were misleading and headed in the right direction.

Was he the fastest runner? No. But he was the most agile.

You can weather the new investing climate–just make sure you’ve taken the steps to head in the right direction.

About the author

Judah Taub is managing partner of Hetz Ventures.

FastCompany

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05.24.22

It’s time to re-imagine the meeting room for the Hybrid workplace

BY Fast Company Contributor 3 MINUTE READ

Investing in employee experience is more important than ever, as the workforce collectively ponders what it wants. After a tumultuous couple of years, record numbers are reconsidering their values, lifestyles and goals. Business leaders are looking for staff retention solutions as they open their doors to hybrid working models. The answer may be right under their noses…

The new normal has arrived and many businesses are opting for a hybrid of remote and on-site working for the foreseeable future. As a result, screen time has increased significantly and the technologies we lean on to create seamless hybrid office experiences will play a key role in defining their successes. Prior to the pandemic, the rigidness of static, office technology was little more than an inconvenience. But with employees now accustomed to the flexibility of remote working, a pet peeve has transitioned into a deal breaker.

Making hybrid models work

Business leaders are now tasked with bedding down new, flexible working structures – while simultaneously giving employees what they want. This is a two-pronged challenge that hinges largely around focusing on human needs and technology transformations. Employees are looking for more meaningful, less transactional relationships with employers – so the office is set to become a space centred around collaboration and connection. Technology is the enabler of modern workplace contentment.

The meeting room is traditionally the epicentre of office interactions. In today’s world it holds an even more vital role as the bridge between remote workers and those in the physical office. The key to 5-star meeting experiences is doing away with glitchy connections and cramped screens. As team members connect into huddles and meetings, the need for seamless connection to multiple devices and colleagues is more crucial than ever before. When it comes to creating the most productive working environment, we must explore technology that nurtures collaboration. We don’t want to lose time or destabilise a great discussion or flow of ideas because the meeting room monitor can’t connect to the laptop. We also must think about our meeting room technology from all perspectives, if you are presenting from the meeting room, can everyone hear and see you clearly? And vice versa if you are working from home. What about questions? Can both sides of the meeting easily provide input? No great idea should ever be lost to impractical mute settings.

Being able to interact with 20 touch point displays and collaborate with content sharing during live meetings, impacts inclusivity. Not to mention meeting productivity and efficiency. After 18-months of close-up screen time with colleagues, expectations remain high for strong visuals and clear representation.

Meeting room tech: Go large, or go home

Investing in large format screens supported by intelligent, responsive technology will ensure a premier collaboration experience. For example, meeting solutions offer 86”, 75”, 65”and 55” options to choose from with interactive touch screen features. Bringing teams together comfortably is an important part of creating more meaningful connections, regardless of location. Hybrid working models are new for many but ironing out the kinks now will benefit everyone. That means ensuring there is no disadvantage based on location. After all, flexible working practices aren’t new. But now they are mainstream, and employees expect this to be seamless, functional and sociable.

As the job market continues to heat up, creating seamless hybrid working experiences is a competitive proof-point. Investing in technologies that underpin a highly connected and blended workplace, that embrace employees far and wide, will forge a greater sense of belonging. More than ever, it highlights the human impact of technology – and the nature of collaboration. All critical components on the route to employee retention as the great reshuffle continues.

Sujit Menon, Display & Client Peripherals Lead – MERAT, Dell Technologies

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03.15.22

How Digital Workforce Can be a Cure to Unemployability Crisis?

How Digital Workforce Can be a Cure to Unemployability Crisis?
BY Fast Company Contributor 3 MINUTE READ

 

South Africa’s unemployment rate gets media attention every quarter when Statistics South Africa releases its report on the country’s state of joblessness. Right now, it stands at 34.9 percent, which translates to 7.8-million people. But there is a much bigger scourge looming – that of unemployability. It is characterised by an inadequately educated workforce and is quickly becoming the root cause of unemployment.

There currently exists a mismatch between the skills South Africans have and the jobs that are available. With Fourth Industrial Revolution technologies – such as cloud computing, big data, data security, artificial intelligence (AI) and machine learning – fast becoming integrated in the workplace, South Africa might find itself with an idle population incapable of filling thousands of jobs.

According to the World Economic Forum, South Africa has strong ties to advanced economies, particularly Europe, making it vulnerable to changes in those countries. With these developed markets becoming digitised, we risk falling off the global economic wagon. A digitally literate population is seemingly our only hope of remaining a global player and the springboard for companies looking to enter the African market.

We need a digitally astute workforce. Whatever the scope or focus of a company, all members of staff need to be digitally fluent, and those in leadership positions need a thorough understanding of what it means to lead successfully in the digital era.

Reskilling people to work alongside technology

American sociologist, Richard Sennet, said the greatest dilemma faced by the modern artisan-craftsman is the machine. He meant that mankind is still dealing with the idea of whether the machine is a friendly tool or an enemy replacing work of the human hand.

Since the First Industrial Revolution, machines have been edging humans out of workplaces, making menial jobs redundant while simultaneously creating new roles that required more skill. The Fourth Industrial Revolution, with its cyber-physical tools and systems, promises to do the same, but this time to both menial and highly skilled jobs. Soon, we might see the roles of accountants and news reporters changing drastically.

Today, technology already can do some jobs better than humans. Drones are delivering packages faster (The South African National Blood Service is already rolling out its drone delivery service), self-driving vehicles are already on the road, and self-service terminals at supermarkets are already replacing cashiers.

Reskilling for a digital future would mean that people will need to work collaboratively with machines. Simply put, more people will need to be skilled backend users for digital interfaces, inputting commands and algorithms. Software engineers, coders and content producers are some of the key roles that come to mind when thinking of the present day workers collaborating with technology.

Educational institutes hold the key to transformation

Perhaps South Africa’s only hope of a seamless digital transformation will come from our educational institutes. Before we can create a digital workforce, people will have to first understand the benefits and pitfalls of working alongside emerging technologies.

Business schools have been trying to fulfil the role of digital transformers for a number of years now. However, far too many of them are accessible only to executives and larger companies because of their steep price and limited intake. The Johannesburg Business School, based at the University of Johannesburg, is trying to buck this trend, making education accessible to individual entrepreneurs and small, micro and medium enterprises. Born in the digital era, it places Industry 4.0 technologies at the centre of its curricula.

A more flexible, future-fit approach is essential to ensure that executive education, in particular, is more specific to organisational strategy and individual roles. When it comes to ongoing education for executives, the one-size-fits-all approach just does not cut it. Businesses operating in such a constantly changing environment need a new kind of leader. They need leaders who are multi-disciplinary in approach, solutions-focused and digitally perceptive.

Organisations of all sizes recognise the need for a paradigm shift in how they are organised and managed. And from a skills point of view, their focus is on getting ready for digital transformation which requires digital literacy. Like all other educational institutions, business schools need to adapt to this reality and cater for the changing needs of their clients, their employees and society as a whole.

Perhaps creating a digital workforce tertiary level is not the answer. It might be a more logical approach to train people for a digital working world much earlier in life. The Department of Basic Education has recently undergone a rewrite of its Life Skills curricula, adding digital literacy and the importance of working alongside Industry 4.0 technologies within the workspace. It is an encouraging sign of the country’s future: we will have a generation of young adults who will form the core of a South African digital workforce. Hopefully, by then, all this talk of unemployability will be bunkum.

Tumi Nkosi, Director of Executive Education and Programmes at the Johannesburg Business School

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03.09.22

Open Data is not Open to all

BY Fast Company Contributor 4 MINUTE READ

 

The cliché “Data is the new oil” appears in many discourses from various sectors of life, be it in business, civil society, or in government.

All over the world, data has been embraced as the new capital of the global economy, and as cities seek renewed governance systems, improved service delivery, and cooperative citizen engagement, the demand to exploit data is immense. Opening of data by governments has come with excitement about its potential towards enabling public good. Open data is seen as a foundation for a wide range of applications and services designed to improve citizen’s lives (Mutuku and Mahihu, 2014). Founding reasons for making government data available and open were aimed at increasing accountability and transparency. Today city governments at local level are releasing various datasets ranging from, city administration datasets, to urban environment, mobility, economy, demographics, and many other datasets that affect urban quality of life. African countries have remained far behind in the data revolution. It has been argued that the continent needs to embrace and harness the unfolding data revolution especially if it were to achieve its Africa Union’s Agenda 2063 targets and the 2030 Agenda’s Sustainable Development Goals.

Accessibility – Not just open, but also right data

The ability to discover relevant datasets is a requirement to unlock the potential of open data. For a city government to make their data accessible and shared with the greater public, these initiatives generally begin with a directive, or a policy followed by setting up an open data portal as was the case with the City of Cape Town in 2014 when it became the first African city to approve an open data policy with a portal.

But matching data supply with demand is often not a straightforward process. To promote the use/reuse of data by citizens and other urban stakeholders, governments often host various data challenge competitions and hackathons, but despite these, the response from citizens to exploit open data for innovative purposes has still been lacking.

A possible contributing factor to this has been alluded to the fact that little is known regarding how citizens engage with Open Government Data initiatives.

Governments have since been accused of supplying datasets without complete understanding of what citizens really needed. Results of data reuse are not discussed enough and there is little feedback provided to governments.

The Kenya Open Data Initiative (KODI) – Kenya the first Sub-Saharan African country to launch an open data portal had similar challenges in driving demand a year later after its launch, whereby the public had not used the open data portal as widely as it was anticipated.

This has been attributed to a variety of possibilities, for instance, a study by Mejabi et al. (2014), suggested, barriers to open data uptake by Nigerian citizens included illiteracy; ignorance; apathy; peoples’ lack of trust in government/corruption; and nonchalant attitude of citizens. Others have also contended that the pressing reason is the fact that not all citizens have the equal privilege and capacity to access and exploit these data platforms, arguing that citizens generally have a poor relationship with data.

With resources often restricted, it is critical for city governments to identify priority areas where open data can provide the most benefit (GovLab, 2020). Citizens can engage and confront governments using data if they have capacity and skills to understand and analyse it.

Citizen-generated data – alternative urban data production

Parallel to the emergence of Open Government Data, alternative forms of data production and sharing are blooming – not necessarily within city governments, but at the urban grassroots level, whereby citizens and community organisations are collecting, sharing, and benefiting from information produced in and about local areas (Ricker et al., 2020). This form does not only reduce the burden from government to collect urban data but also equips citizens with skills throughout the data lifecycle (collecting; processing; analysing; using/reuse; improving; validating, and monitoring data quality). This way citizens are empowered to effectively use data to solve their problems or confront their local authority. A good case example of citizen-generated data is Map Kibera in Nairobi – a community managed initiative that has seen a collective effort of slum dwellers from Kibera collecting and mapping data of their marginalised settlement. The Map Kibera initiative has made the settlement visible on a map through a free and open digital map identifying communal issues such as lack of water, sanitation, and security. With this evidence-based map, the citizens of Kibera have been able to lobby and approach their local authority to highlight the areas that needed services the most.

Prioritising open data portals

Overall results suggest that portals are at a very early stage of development in Africa. Studies have suggested that we need improvements in user help and analysis features, as well as inclusion of features to help citizens understand the data, such as more charting and analysis

The Africa Data Revolution Report 2018 strongly asserted there was generally very little commitment from many African governments to publish up-to-date or additional datasets, while there is also very little evidence of use or impact of the open data which is published. Davies et al., (2019) assert, open data in Africa is seen as a secondary priority, isolated from other development agendas, such as infrastructure, education, agriculture, water, and health. Open data is not yet engrained in law in the continent, with legal frameworks supporting it either incomplete or directly absent (Iglesias, 2019). It has been suggested that African countries encounter difficulties in their capacity to implement those policies intended to make data available and accessible in a user-friendly format (PARIS21 &MIF, 2021). This would seem an important area for initiatives such as the Open Government Partnership – to which at least 15 African countries are subscribed – should lend concerted attention. Other governmental, technical, and civic actors can also augment their important roles.

ABOUT THE AUTHOR

Majaha Dlamini is an urbanist with research interests in open data, civic tech, and urban digital innovation. He has working experience in the urban development sector and recently worked with the Civic Tech Innovation Network. He holds a Master of Philosophy specializing in Urban Studies from the University of Cape Town. His research focused on the challenges of implementing an open data policy in the City of Cape Town.

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02.16.22

Why connectivity matters for South Africa

BY Fast Company Contributor 3 MINUTE READ

As the world moves towards an increasingly digital future, expanded connectivity infrastructure has become a defining feature of a modern economy. It allows people and businesses across the globe to connect with and access a world of digital innovation. Whether it’s for social media and entertainment, or improved business performance through digital processes, connected technologies are now part of nearly every aspect of our daily lives.

Connectivity is vital for the growth and future success of every global economy, the economic benefits of which have been widely researched in many countries. Only recently, however, has a thorough study been conducted on the economic impact of connectivity delivered by submarine fibre optic cables in South Africa. The study, which was conducted by RTI International, finds the overall economic impact of connectivity to be significant, leading to increases in GDP and improvements to the likelihood of being employed. But these economic gains were not broad-based because many South Africans still do not have access to or cannot afford fast and reliable Internet services. So, why are subsea cables so important to our economy, and what can we do to get more South Africans connected?

Transitioning to a digital-first economy

Over the last few decades, South Africa has transformed from a resource-based economy relying on rich mineral reserves, to an economy driven largely by tertiary sectors such as financial and business services, transport and communication, and manufacturing. Unlike more labour-intensive and low-skilled sectors, these sectors all rely heavily on ICT infrastructure that requires connectivity. The study by RTI International demonstrates this, finding that subsea cable connectivity led to a 6.1% increase in GDP per capita between 2009 and 2014. This can be attributed to factors such as technological innovation, access to international markets, and improved education for people living in connected areas.

Connectivity also has a role to play in addressing unemployment, which remains one of South Africa’s most pressing socioeconomic challenges. In the aftermath of the pandemic, unemployment rose to a record high of 34.9% by the third quarter of 2021. The RTI International study finds that people were 2.2% more likely to be employed if they lived within 500 metres of the fibre network. The study also highlights that connecting South Africa’s most densely populated areas would translate to the greatest increases in total employment.

Connecting Africa with the world

Subsea fibre optic cables are the backbone of the Internet. But before Africa had a subsea cable system, the entire continent relied on sporadic satellite connections that made Internet access largely inaccessible and expensive. At the same time, South Africa’s telecommunications market suffered because it did not have a competitive structure, which changed in 2008 when a court ruling allowed other industry players to build infrastructure and provide Internet services.

One year later, Africa saw its first commercial undersea cable. The SEACOM cable spans 17,000km and connects the Eastern and Southern coasts of Africa with the rest of the world with faster and more affordable fibre connectivity. The RTI International study credits this subsea cable for disrupting the market, resulting in a substantial decrease in wholesale prices for direct fibre and an increased uptake of broadband connectivity.

Since then, South Africa’s fibre-to-the-home connectivity has expanded significantly, connecting over 600,000 homes in a market that was growing more than 30% per year in 2019. Now, 90% of South Africa’s population also lives within 10km of a fibre line because of our extensive domestic network in most major cities and towns. But even though widespread fibre penetration is eminently achievable, only 1.2% of households in rural areas had access to Internet at home in 2019, compared to 15.4% of households in metropolitan areas. And despite the fact that mobile broadband coverage reaches over 95% of the population, more than 30% of South Africans still do not use the Internet.

One reason for this is the prohibitive cost of mobile data, and the lack of incentives for last-mile infrastructure development beyond the existing fibre network. While fibre connections require a higher initial investment, fibre ultimately pays its dividends by being orders of magnitude cheaper than prepaid mobile data and providing a much faster and more reliable connection.

Looking forward

Digital technologies are evolving rapidly, which is why we need a modern approach to policy and regulation to keep up with other digitally driven economies. Our policy and regulatory environment in the telecommunications sector has been characterised as sluggish and uncoordinated, such as the failed attempt to deliver universal broadband access through SA Connect.

But there are many reasons to be optimistic. Our government has recognised the importance of the Fourth Industrial Revolution (4IR) for the future of our economy, and at a BRICS meeting on 11 November 2021, our Minister of Communications announced a fast-track programme that aims to connect all South Africans to the Internet within 24 months. Additionally, government agencies will be funding the development of affordable Internet access for low-income neighbourhoods.

There’s no doubt that South Africa needs more partnerships between government, NGOs, and the private sector to help narrow the digital divide. By allowing more people and businesses to participate in the digital economy with affordable connectivity, we can create more jobs, accelerate economic recovery, and pave the way forward to a more connected future.

Steve Briggs, Chief Sales & Marketing Officer at SEACOM

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