Legaltech Venture Investment

This week Crunchbase produced some numbers covering Legal tech investments in 2021.

Legal tech companies have already seen more than $1 billion in venture capital investments so far this calendar year, according to Crunchbase data. That number smashes the $510 million invested last year and the all-time high of $989 million in 2019.

While dollars are higher, deal flow is a little behind previous years, with 85 funding rounds being announced so far in 2021, well behind the pace of 129 deals last year and 147 in 2019.

Some of the largest rounds in the sector this year include:

  • San Francisco-based Checkr, a platform that helps employers screen job seekers through initiating background checks, raised a $250 million Series E at a $4.6 billion valuation earlier this month;
  • San Francisco-based legal services provider Rocket Lawyer closed a $223 million venture round in April; and
  • Boston-based on-demand remote electronic notary service Notarize raised a $130 million Series D in March at a reported $760 million valuation.

According to various start-up founders:

“This mainly is a paper-based industry. However, COVID exposed inefficiencies and it forced people to look at everything you do and explore new ways.”- Patrick Kinsel, founder and CEO at Notarize

“There’s no doubt COVID provided huge tailwinds for legal tech growth,” said Jack Newton, co-founder and CEO at Vancouver-based legal tools platform Clio, which raised a $110 million Series E at a $1.6 billion valuation. “It was the forcing factor for firms that had put off their transformation.”

“Since the midpoint of last year, we’ve seen an acceleration of our business,” said Vishal Sunak, co-founder and CEO at Boston-based management tool developer LinkSquares, which used that increased interest to help raise a $40 million Series B in July.

Here are a few observations on what is going on:

  1. Impact of the Cloud: Just as in many industries, the cloud and other new tech had been slowly changing the legal world for more than a decade. However, after COVID caused offices to close and legal processes and documents to go virtual, adoption of those technologies skyrocketed. Investors started to eye technologies that took many firms “in-house” processes and moved them to the cloud—many involving documentations and filings as well as tools to help better communicate with clients.

2. Cloud-first generation: Many general counsels are now coming from a “cloud-first” generation and know the importance of things such as data insights that can help predict outcomes. Just as data and AI has changed marketing, sales and finance, the legal community is now catching on, and many don’t just want to be a cost centre

3. Increasing investor knowledge: The increasing market and scaling legaltech start-ups are causing VCs to take note. While many investors eyed the space in the past, more investors have knowledge about contracts and legal tech, and founders do not tend to have to explain the market

However, the market is still small albeit growing and no ‘goliaths’ exist in the space. With no large incumbents, how investors see returns remains a popular question.

This may chance if, for example, horizontal software companies like Microsoft or Salesforce could become interested in the space—as legal tech has data and analytics those types of companies find useful, Wedler said.

Some companies in the space also have found private equity a viable exit, with films like Providence Equity rolling up players such as HotDocs and Amicus Attorney several years ago.

However, perhaps more interesting to some startups is the legal tech space even saw an IPO this year, with Austin, Texas-based Disco going public on the New York Stock Exchange in July. The company’s market cap now sits at $2.8 billion.

One thing most seem certain about is that while the legal world’s tech revolution may have been brought on by a once-in-a-century event—there is no turning back.

25 Legal Tech Stats for 2020/21

This week I came across a blog post from ImpactMyBiz which compiled a list of great statistics, use cases and market data pertaining to the current state of technology in the legal sector.

In sum, there’s a lot of good progress but the sector is still subject to a lot of hype and extremely slow adoption when compared to other sectors. This is moreso in the B2B space with B2C innovation moving at a faster rate of adoption in improvement over time.

Perhaps the continued challenges presented by COVID around the world, increasing regulatory complexity, competitive pressures from alternative legal service providers (ALSP) and new entrants, remote working, client cost pressures, access to justice, and other key drivers will continue to move the needle forward.

25 legal tech stats to shed light on where where the industry is heading for in the new decade:

1.  In 2018, legal tech investments broke the $1 billion mark. That figure was topped in 2019, with $1.23 billion in funding by the end of the third quarter alone.

2. With the help of AI, a contract can be reviewed in less than an hour, saving 20-90% of the time needed to perform this work manually without sacrificing accuracy.

3. AI legal technology offerings for businesses increased nearly two-thirds in 2020 compared to 2019.

4. JP Morgan launched their in-house program, COIN, which extracts 150 attributes from 12,000 commercial credit agreements and contracts in a few seconds. This is equivalent to 360,000 hours of legal work by lawyers and loan officers per year.

5. Cloud usage among firms is 58%, with smaller firms and solos leading the way.

6. Security measures are lacking, with no more than 35% of firms using precautionary cybersecurity measures to protect their businesses. A staggering 7% of firms have no security measures at all.

7. Despite some reservations, lawyers continue to use popular consumer cloud services like Google Apps, iCloud and Evernote at higher rates than dedicated legal cloud services. Clio and NetDocuments ranked the highest among the legal cloud services.

8. The percentage of the ABA 2019 Legal Technology Survey participants answering “Yes” to the basic question of whether they had used web-based software services or solutions grew slightly, from 55% to 58%. 31% said “No”, a small decrease. 

9. When asked what prevented their law firms from adopting the cloud, 50% cited confidentiality/security concerns, 36% cited the loss of control and 19% cited the cost of switching.

10. 26% of respondents in a 2019 survey report that their law firms have experienced some sort of security breach

11. In 2018, just 25% of law firms reported having an incident response plan. In 2019, this figure had risen to 31%, and we expect the same for 2020.

12. Interest in cloud services from law firms is high, but expectations of adoption among them remain low, with just 8% of firms indicating they will replace existing legacy software with cloud tools.

13. Only one-third of lawyers (34%) believe their organizations are very prepared to keep up with technology changes in the legal market.

14. Firms described as “technology leading” fared better, with 50% prepared to meet digital technology demands in the industry.

15. 49% of law firms report that they are effectively using technology today, and 47% say they can improve technology adoption and plan to do so.

16. Over half (53%) of lawyers in the US and Europe say their organizations will increase technology investment over the next three years.

17. While over half of lawyers expect to see transformational change in their firms from technology like AI, big data and analytics, fewer than one quarter say they understand them.

18. The biggest trends cited by lawyers that are driving legal tech adoption are “Coping with increased volume and complexity of information” and “Emphasis on improved productivity and efficiency.”

19. It is estimated that 23% of work done by lawyers can be automated by existing technology.

20. 27% of the senior executives at firms believe that using digital transformation is not a choice, but a matter of survival.

21. The top challenges for corporate legal departments today include reducing and controlling outside legal costs; improving case and contract management; and automating routine tasks and leveraging technology in work processes.

22. 60% of lawyers believe their legal firm is ready to adopt new technology for routine tasks.

23. According to research conducted by Gartner, only 19% of law firms’ in-house teams are ready to move forward with enterprise-level digital strategies.

24. A recent study uncovered that 70% of consumers would rather use an automated online system or “lawbot” to handle their legal affairs instead of a human lawyer because of three important factors—cost, speed, and ease of use.

25. 70% of businesses indicated that “using tech to simplify workflow and manual processes” to cut costs was a top priority going forward.

“New Law” Opportunities for Law Firms

I recently came across a presentation I gave in April 2015 to senior partners at Eversheds LLP in London. At the time, Eversheds were proactive in starting to diversify their professional services offerings away from traditional legal and transactional work into ‘alternative’ services areas, such as business improvement consulting for in-house legal teams, and flexible resourcing solutions.

At the time, it was unusual for a major corporate firm to be experimenting into different areas.

The question for the presentation was as follows:

Downward cost pressure, deregulation and new technology are transforming the legal industry, as ‘New Law’ providers compete with traditional law firms.  What are the opportunities for large law firms in this evolving marketplace? 

I focused on 2 main themes of (a) Changing the mind-set and (b) Managing innovation.

Since then, in six years a lot of innovation has been introduced into the legal sector. However, it has been a fairly low-bar for many years with the legal sector ‘glacial’ when it comes to change and technology.

Certainly the ‘legaltech’ and/or ‘lawtech’ markets have received significant injections of VC to build next generation B2C and B2B solutions. Most large firms are now experimenting with different AI and automation solutions, running incubators, offering flexible resourcing arrangements, investing in start-ups, and so on.

To better support Fortune500 General Counsels with their efficiency challenges, the Big4 are building services and capability at scale, as are legal process outsourcers and ALSP’s.

Many of these ideas were referenced in the presentation.

However, the critical question is has anything really changed in how legal services are delivered, bought and sold? How much of this is ‘innovation theatre’ and nibbling around the edges versus real change?

For example:

  • Does the partner in the Freshfields office in HK work any differently then they did as a trainee 20 years ago?
  • Are the skills and requirements of a newly qualified lawyer any different?
  • Does the single lawyer law office in Bristol run their practice any differently?
  • Does the COO of a regional law firm run the business any differently?
  • Do consumers who need a family lawyer do this any differently?
  • Does the barrister or judge involved in a trial do this any differently?

The short answer I think is not a great deal of change across the industry as a whole. However there has been a tonne of experimentation and innovation in some fragmented areas, especially in B2C (e.g. DoNotPay). COVID-19 has certainly accelerated this, and that can only be a good thing.

I think what we are seeing is a marathon, not a sprint. In fact, it is more like the start of a triathlon where there’s a washing-machine effect as participants fight their way forward before a steadier state emerges.

We see this with most new technologies, where things often take much longer to truly disrupt. In retail and e-Commerce, it is only recently that the Internet is causing significant challenges for traditional players, almost 20 years after the Dot.Com crash in 2001.

One thing is for sure – the next 10 to 15 years in the legal sector will be fascinating.

A Stronger Science, Technology + Innovation Agenda: 6 Areas of Focus

“Science, technology and innovation (STI) are universally recognized as key drivers for economic growth, improving prosperity, and essential components for achieving the Sustainable Development Goals (SDGs)”  UN Conference on Trade and Development (2019)

A few months ago I wrote down some thoughts and questions after being inspired by political events where I live (Guernsey) and internationally (e.g. US). In both jurisdictions, the balance of power has dramatically shifted for different reasons but both against a backdrop of major crises including health (COVID), rising inequality, and skills gaps.

In essence, I was trying to think through answering 2 key questions for the new Government and ecosystem players (e.g.businesses, investors, educators etc): what are some key STI areas of focus, and what questions would I ask?

I have since shared the memo with various stakeholders in the ecosystem, and now I thought it would make sense to post it publicly here. If you have any feedback, be sure to let me know

——-

Research, analysis and policy development opportunities and questions for the new Government and ecosystem players (e.g. businesses, investors, educators etc)

Business case for an STI economy: the importance of ‘science, technology and innovation’ for Guernsey’s future in driving economic growth and improved prosperity for all citizens 

  • Key STI trends, opportunities and challenges 
  • What is STI/digital, why important, global best practices
  • Why important for Gsy?
  • Defining and measuring Guernsey’s existing STI/digital economy 
  • Benefits and impacts to economy, society, prosperity and infrastructure 
  • Jobs, skills, human capital and education
  • Role of stakeholders e.g. education, govt, business, people etc
  • Building blocks, what is needed? E.g. 
    • Policy and regulatory frameworks
    • Institutional setting and governance
    • Entrepreneurial ecosystems and access to finance
    • Human capital
    • Technical/ICT & R&D infrastructure
  • Relevance of Sustainability, Green Finance, Solar/Wind, FinTech, RiskTech, RegTech, GovTech
  • Role of tax policy, skills, FDI, govt, business etc 
  • Strategic options for Guernsey 

Resources – A FRAMEWORK for Science, Technology and Innovation Policy Reviews: UN Conference on Trade and Development 

http://www.oecd.org/innovation/inno/

OECD (2020) A Common Framework for Measuring The Digital Economy 

ICT Infrastructure: Reshaping SURE Telecoms as a strategic asset to benefit the future of Guernsey and investigating the promise of new tech e.g. fibre, 5G etc

  • What is SURE’s current investment model, business strategy etc with regard to infrastructure, network performance and speeds, pricing and tariffs etc
  • How does it fit with Guernsey’s requirements, strategy and vision for the future? 
  • To what extent does the existing relationship with Sure/Cicra/others need to be reshaped?
  • What is the overall technology vision of Guernsey? E.g. the most digitally-enabled small island economy in the world? KPIs? 
  • What are the existing telco infrastructure challenges and market opportunities? E.g. connectivity, fibre, 5G etc
  • What are the key ICT indicators/KPIs for Guernsey?
  • How good or bad is the current network/asset performance? Where is the evidence? 
  • To what extent does Sure need to be incentivised to improve performance?
  • How will that benefit Guernsey? E.g. access, education, WFH, FDI, economic growth etc
  • What are the different levers to pull that can assist that?
  • What are the roles of the key stakeholders and to what extent does this need reshaping? E.g. Cicra, 
  • What are some example ownership models from around the world that should be considered?

Resource – 14 Key ICT Indicators

Smarter e-Government: Transforming public sector services to improve efficiency and effectiveness

  • Agilisys IT procurement: What was the promise vs reality, where is the accountability and island benefit (e.g. jobs, knowledge etc), what is the road ahead, and what needs to change 
    • What is the current status of the Agilysys IT procurement, what are the benefits (e.g. local jobs) vs costs, what is the roadmap
    • Current status and how successful has it been, why?
    • What was the scope of the original deal that was signed? How did that change over time? 
    • How much has been spent by the SOG?
    • What have been the benefits? E.g. local jobs, tax payer savings etc
    • How is the vendor managed, programme governed, quality assurance provided, risks/issues etc 
    • Strategic options and recommendations 
    • Role of new ways of working and thinking e.g. agile, design, lean
  • e-Gov/Future Digital Services
    • What is the latest vision and roadmap forward? Is it good enough?
    • In 2017 FDS was championed with a delayed and time-consuming procurement process which say Agilysys hired – what is the status?
    • What are the roadblocks, challenges vs opportunities 
      • E.g. SOG IT procurement decision-making and processes
    • What can we learn from other e-gov national leaders e.g. Estonia
    • What are the big opportunities/challenges?
    • What are the areas of focus?
    • What is required to move forward?
    • What are the costs/benefits?

Digital skills: how to re/upskill the population to be fit for the future 

  • What digital skills does Guernsey need? 
    • E.g. Data Analysis, Business Analysis, CS/Software Engineering, Product Development, Agile, PM, UX/UI, Google etc
  • What courses should be created?
    • For which groups e.g. school-leavers vs mid-level vs later stage 
  • How to deliver this?
  • Best practice models from similar jurisdictions 
  • Who to deliver this?
  • How much to deliver this?

Entrepreneurship and innovation ecosystems: what is the Innovation & Growth vision for Guernsey PLC? How to create a more efficient, attractive and collaborative system: 

  • What new tax policies, incentives and regulatory changes are needed to drive the captial/FDI and other behaviours? E.g. EIS
  • How to encourage businesses to invest in R&D?
  • How to encourage angels/HNWI/funds/businesses/VC etc reallocate investments into start-ups?
  • Build on my article here – https://andrewessa.com/2020/08/28/digital-ecosystems-tzars-puzzle-pieces-the-halo-effect/
  • What is the Innovation vision for Guernsey PLC
  • Baselining and measurement
    • What is Guernsey’s approach and how effective is it?
    • Strengths/weaknesses
    • Challenges/opportunities
    • Actors in the ecosystem
  • What is best practice in small or island communities and competing off-shore jurisdictions?
    • What have Jersey done? cost/benefit?
    • What can we learn from them and other nations?
    • What could we improve?
    • What needs to happen?
  • Ecosystem pillars: how effective are the current actors and what needs to change 
    • Tax, finance and incentives 
      • The role of tax policy, tax credits, R&D, and other incentives 
      • Access to capital, finance
    • Guernsey Innovation Fund
      • What has been invested in to date?
      • What type of investments and how much?
      • What mix of businesses e.g. local vs overseas, maturity etc
      • What returns, benefits to date?
      • Who is involved in the fund, what governance etc
      • What is success? 
      • How does it compare to other small community or island ‘sovereign’ investment funds?
      • What is ‘best practice’ in this space?
    • Human capital strategies – from cradle to grave 
      • Understanding the digital/skills crisis e.g. PwC report
      • Practical solutions to solve it 
      • Alignment with Guernsey PLC strategic vision 
      • Baselining, what new skills, how to up/reskill, what incentives for businesses and people 
      • Life-long learning 
      • More flexible access to skills and talent 
      • Immigration policies 
    • Digital Greenhouse
      • Current vs future state
      • Cost/benefit
      • Challenges/opportunities
      • Recommendations 
    • Governance 
      • Effectiveness of current system
      • What changes are needed
      • What models, what structure, what responsibilities etc e.g. Guernsey Innovation 
    • Corporate innovation
      • How to incentivise investments in skills and new ventures 
    • International cooperation
      • Role of collaboration including within the Bailiwick 
    • New business opportunities 
      • The role of new ‘market creation innovation’ (MCI) policies- see below
      • Relevance of Sustainability, Green Finance, Solar/Wind, FinTech, RiskTech, RegTech, GovTech
      • Regulatory innovation models e.g. sandboxes 

Resource – OECD Review of Innovation Policy – New Zealand (2007)

Other sample areas of ‘innovation policy’ to explore:

  • Environment: Sustainability, ESG and climate change  
    • What is best practice around the world in small island or communities 
    • What are some potential or viable new business opportunities
    • Assess current state of initiatives (e.g. Green Funds)
    • Evaluate new initiatives e.g. Wind, solar etc
  • International collaboration and trade
    • How important is it to be more market-focused and rethink and prioritise international partnerships/affairs? E.g. Jersey
    • A colleague and partner Chris Brock covers some of this topic in a recent report here
  • Regulatory, governance and risk innovation: to what extent do the various regulatory bodies and related private/public sector organisations (e.g. GFSC, Cicra, TISE, DPO etc) need to adopt a more balanced and innovative approach to regulation and new business? How to accelerate existing initiatives and opportunities? e.g. Green Finance
    • What is the nature of the current approach? 
    • How to balance bureaucracy/risk-adversity in the Guernsey ecosystem but at same time encourage innovation, FDI and new businesses?
    • What are best practice examples of innovative regulatory/risk models from competing or similar jurisdictions or around the world?
    • To what extent could this be useful in Guernsey?
    • How is the wider market evolving and how will this impact Guernsey?
    • What are the pros/cons and opportunities/threats?
    • What new business opportunities a more innovative approaches enable? E.g. FinTech, RegTec
    • What are practical recommendations forward and for which actors 
  • Role of market-creating innovations to drive prosperity AND economic growth (MCI): What is the opportunity for Guernsey to incubate market-creating innovations for local use and export? And how can Guernsey facilitate the development of MCIs across different sectors – e.g. FS, Infrastructure, Transport, Environment etc – for local use and export to improve income inequality and other social/economic benefits? 

Resources:

https://hbr.org/2019/01/cracking-frontier-markets

Digital Ecosystems, Tzars, Puzzle Pieces, & The Halo Effect

This week I have had numerous informal discussions with different business leaders about the digital potential of Guernsey in the context of a COVID world. It got me thinking.

What are the key ingredients of an efficient digital and innovation ecosystem? What are the key pillars? If I was Digital Tzar for a day, what would I focus on?

I immediately thought back to my own entrepreneurial journey starting in 2011 in Shoreditch (London) when I left Accenture Consulting & co-founded The Social Experiences Club, one of the first European experiences and activities marketplaces. Along the way and following an exit I have advised, mentored, coached and consulted to many other entrepreneurs, VCs and corporates on everything from new venture development to business models to fundraising to hiring and firing.

Below I have provided a list of some key ‘ingredients’ to an efficient innovation and digital ecosystem. They are like pieces of a puzzle. There can’t be one without the other. Whilst there are wider factors required for success (e.g. smart, collaborative and decisive government), these are not the focus here.

Key Ingredients Of An Efficient Digital and Innovation Ecosystem:

  • Innovation-I think the focus on ‘digital’ is too narrow. Perhaps the better conversation is around how to foster new ways of thinking, working and investing (in technologies, skills, institutions etc), and how to provide the right infrastructure for anyone or any organisation to be able to build new solutions and deliver benefit, value and prosperity for consumers/citizens.
  • Commitment + Vision As with anything in business or life, a strong vision and commitment to that vision is required to create impact and make change happen. For the public-sector, having a strong technology and innovation policy is critical, and was the foundation of Estonia’s e-Government transformation  Even with such intent and will execution will be hard enough, but without this and appropriate support, resources and political capital, nothing will change.
  • IT InfrastructureThe pandemic has shown how strategic this asset class is to the future prosperity of nations – and will continue to be – which may require regulators to rethink approaches to regulation and competition. Without reliable and quality connectivity and access for all people at a fair price today or in the near future (e.g. 5G, fibre etc), economic and social growth could suffer and could lead to catastrophic long-term consequences. On regulation, balancing the strategic interests of nations and the telecom providers (who all have very different corporate strategies, business models and operating structures) is no doubt a difficult but critical balancing act, especially in light of COVID’s acceleration of digital services, access and inequality issues, and continued and future investments in next generation infrastructure (e.g. 5G). 
  • Centralised Governance A centralised market-focused unit as the knowledge and resource ‘hub’ responsible for digital activity can provide benefits for an emerging innovation ecosystem, especially where aspects of the infrastructure might be lacking. London had TechCity, although it was arguably overshadowed by the power of the entrenched historic networks of the wider ecosystem in terms of universities, commerce, government, and investment community. 
  • IncentivesSmart technology and innovation tax policies is critical to facilitate a more efficient and attractive market to build the wider entrepreneurship and corporate innovation ecosystem.

Support for business R&D can help to foster innovation and boost productivity. Investment in new technologies can also be supported through more generous depreciation deductions or immediate expensing – OECD Report (2018) – Tax Policies for Inclusive Growth in a Changing World

Incentives (whether EIS, SEIS, tax-breaks or otherwise) can encourage and unlock local (and overseas) private and corporate capital flows into start-ups/scale-ups. In 2011 when I was raising funds for a start-up in London in 2011, everywhere we went investors, accountants and lawyers would immediately ask the same question: are you EIS compliant? Clearly the years following the 2009/09 Financial Crisis was a massive boon for innovation with a huge supply of entrepreneurs choosing new paths and supported by an abundance of capital. 

Since its inception in 1993 the Enterprise Investment Scheme (EIS) has enabled UK companies to raise over £16 billion in investments. Of the 3,470 companies benefitting from the EIS Scheme in 2015/16 alone, 1,645 companies were raising funds for the first time, between them generating £997 million of investment – Thomas Jenner LLP 

On the supply-side, facilitating a more efficient is needed to generate an increasing supply of entrepreneurs able to access capital (plus ‘smart’ capital) especially at early stages. For companies, encouraging the development of in-house IP via R&D tax credits (or similar) (UK HMRC policy is here) could also have downstream benefits such as up skilling (depending on the policy), and can be aligned with any national Digital Vision.

  • e-Government For smaller nations, it is especially critical to invest in citizen-facing automation (e.g. paper-less) and improved customer experience opportunities across social security, ID, e-voting, e-health, data, e-signatures, and EdTech. Often government is the largest employer in smaller communities hence these investments can have outsized impacts and benefits. It also ‘opens’ the government up to being more accessible, transparent, and helpful in working with and facilitating the wider ecosystem.
  • Ecosystem – One of the key reasons why London has been able to become a global leader in innovation (especially FinTech) has been due to the infrastructure and network effects facilitated by a number of key factors. In particular, within a 1hour train ride you have leading universities (e.g. Oxbridge, LSE, UCL, Imperial etc), commerce, and government. It creates enormous opportunities for creativity and collaboration to flourish, share knowledge, and build relationships with every piece of the start-up puzzle, from enterprise clients, to talent, to regulators and so on. As a start-up co-founder in Shoreditch in 2011, you could easily do nothing but network and attend amazing events, meet ups, hackathons, talks, pitch competitions etc  every night. Whilst not every city or small community can replicate that, the principles and practices are there to be examined and implemented within whatever your specific context is.

“We are witnessing a rapid changing of the guard for global investment in innovation centers. The US and Europe have traditionally been viewed as dominant forces in innovation and technology but Asia could soon surpass the US for number of innovation centers built and operated. Moreover it is clear that funding alone is not enough — the success or failure of any innovation center hinges on how effectively it taps into the surrounding ecosystem, and the role it plays in driving a broader corporate innovation strategy – Eric Turkington, Director at Fahrenheit 212, part of the Capgemini Group

  • Talent/Skills – Education is critical for the future of innovation in a society. At K-12, schools need to be offering introductory (and advanced) knowledge-based and/or practical courses on digital topics whether entrepreneurship, digital marketing, Excel/Google Spreadsheets, coding, design thinking, or analytics. This creates opportunities for ‘start-up clubs’ and business idea/pitch competitions aligned with industry, which can provide pathways for hiring and investors. Businesses should also prioritise up skilling which includes investing in softer skills (e.g. communication, creativity, collaboration, empathy).

“Twenty years from now, if you are a coder, you might be out of a job,” Cuban predicted. “Because it’s just math and so, whatever we’re defining the A.I. to do, someone’s got to know the topic. If you’re doing an A.I. to emulate Shakespeare, somebody better know Shakespeare”. – Mark Cuban

In addition, it is critical to learn new ways of working and thinking (e.g. agile, lean, design), and how to significantly improve inclusivity and diversity initiatives for existing talent (and future hires). At the higher education level, it is no surprise that some of the best known ecosystems (from Hollywood to Silicon Valley) have top-tier universities in close proximity. A centralised knowledge, teaching and research centre for technology and related skills and excellence must be a high-priority for any region without this. Also, making it easier or more flexible to hire overseas talent and plug skill-gaps in high-priority areas – whether software, analytics, UX or engineering – should also be considered, especially as this removes the friction for individuals or companies to pursue innovation.

  • Specialism It certainly helps to be known and famous for a certain speciality. London has done well to intentionally (or accidentally) carve out a ‘brand’ around FinTech which leverages the reputation, expertise and talent in that sector, although it is still active in many other sectors. This helps with the halo effect to build an ecosystem around that which then flows out into other areas. 
  • ExamplesThe halo effect above also extends to when there has been one or more successful start-ups and entrepreneurs who have moved though the start-up stages i.e. idea to exit. In a similar way that we celebrate sports stars and use them as aspirational icons for children and others, this can be used to inspire the next generation of entrepreneurs. If the right examples exist, we need to profile them and start holding them up examples of what can be possible (and using them as mentors).
  • Intellectual Property – Historically patents have been used a measure of R&D and innovation – and hence subject to tax breaks – but since 2000s software development has become a critical focus. Incentivising corporate investment into building out in-house IP vs using an overseas agency/service provider may provide local benefits and stimulate the local digital skills ecosystem.
  • Pathways Programmes for potential entrepreneurs whether at school or higher-education or post-university to educate prospective entrepreneurs. To be effective it requires all of these initiatives to be in place or in-flight
  • Collaboration – A critical digital ‘soft-skill’, without a collaborative approach and mindset amongst key participants – coupled with the strongest of commitments from smart government – attempts to develop and execute on a digital vision will struggle. This needs to be baked into any refreshed governance supported by strong top-down commitment.
  • Experimentation – Modern start-up development relies on many small experiments: start with a small hypothesis, test, learn, iterate, build, repeat. Government therefore needs to be more comfortable with this way of working to ensure progress is made versus spending years analysing and/or smothering creativity with bureaucratic processes which ultimately delivers nothing or very little. In the midst of an ongoing pandemic, unprecedented government spending, and a reduction in tax revenues, the Government must work differently and smarter in order to be more accountable to taxpayers and deliver benefit, value and sustainable progress for citizens.

 

 

BigTech Power, Regulation, And The Early Days Of The Internet

I recently came across a Guardian article looking at the winners and losers from last month’s US Congressional hearings into the power, practices and conduct of various ‘Big Tech’ companies. It got me thinking.

BigTech’s power and urgent need for regulation reminds me of a hot topic back in the early days of the Internet being….the urgent need for regulation.

In Australia during the early 2000s, the approach of business and government to the emerging Internet and associated applications tended to be driven by fear and uncertainty (“let’s sue them, shut them down, and take control of the IP” – major records labels in the music industry) as traditional legal and regulatory frameworks struggled to adapt to the new paradigm and business models began to creak.

Between 2000-2004, I was entrenched in these issues as I wrote and delivered a brand new undergraduate and post-graduate course at Queensland University of Technology called ‘e-Commerce law’.

At the same time, I was in private practice advising Australia’s biggest casino, media and other operators on how to navigate the emerging world of online gaming and meet the increasing demand of Australian consumers (who love to gamble).

Most topics in the course and in practice grappled with the issue of how do the traditional legal frameworks apply to this new technology and applications, from payments and money, copyright (e.g. music file-sharing), privacy (e.g. data protection), and reputation (e.g. defamation).

In 2004, I analysed the Governments prohibition of online casinos in my first academic article published in QUT’s law journal, titled The Prohibition of Online Casinos in Australia: Is It Working?’.

I’ve pasted the introduction here as in the context of the BigTech Congressional Hearings, a few points are still interesting:

Preliminary online research of consumer gaming activity was utilised to develop an assumption that [after 2 years of prohibition] prohibition is not working. A key reason for this is the futility of prohibition given the unique nature of Internet technology. This article will also critique Government motives for prohibition, as arguably, the best approach to deal with interactive gaming was not implemented. The relevant question for public policy appears to be not whether online gambling can be controlled, but the extent to which it can be controlled.

Obviously, 16 years on you can apply this principle to the other areas which BigTech have completely dominated including social media, search, video, browsing, advertising, e-commerce, web services, app stores, personal data, and so on. In the early 2000s, it was a nascent and emerging industry and overall regulation policy needed to be ‘light-touch’ (although exceptions existed especially where consumer harm risk was high, such as gambling, payments).

As converging technologies penetrated (Internet, broadband, OS software, mobile, apps, cloud etc), limited regulation has allowed a handful of companies control the majority of our online data, purchases, browsing habits etc. This will only accelerate given the impact of COVID on our behaviour, and soon that will extend in the last frontier of growth for such firms including health, education, government services, and so on.

Whilst regulation (and disposals or break-up) is clearly required for many different reasons (competition, national security, business and consumer harm etc), it is unclear what will play out given the power of these firms, how politicised the issues have become, and the nature of US anti-trust enforcement and law which historically focused on pricing practices and consumer harm.

In Chairman Cicilline’s wrap-up:

This hearing has made one fact clear to me. These companies as they exist today have monopoly power. Some need to be broken up. All need to be properly regulated and held accountable … their control of the marketplace allows them to do whatever it takes to crush independent business and expand their own power. This must end.

Something needs to be done. But we will have to see what happens after the Nov elections.

OneTrust: How A Privacy-Law-Compliance Tech Start-Up Became America’s Fastest Growing Company

Today I came across an incredible story of OneTrust, a privacy-law-compliance start-up based in Atlanta.

OneTrust landed at No. 1 on this year’s Inc. 5000, with more than $70 million in 2019 revenue and a staggering 48,337.2 percent three-year growth rate. It is among the global leaders in privacy-law-compliance technology with a suite of digital tools that gives companies a clearer view of all the user data they accumulate.

This enables them to comply with privacy laws, like the European Union’s General Data Protection Regulation (GDPR) which gives consumers greater control of how com­panies can use their data.

Whilst Enterprise B2B SaaS and analytics isn’t the most sexiest space, in many cases, firms that play there can be the fastest-growing, most scaleable and profitable (and do good things at the same time). 

In an age of Big Tech monopolies, increasingly intelligent AI and API-powered platform business models, growing regulatory oversight and appetite, and increasing consumer-awareness, OneTrust and others are clearly riding a tidal wave. 

Read the full story here 

 

 

Digital Playbook: How And Where to Focus to Maximise Opportunities In a COVID World

In summary, this article provides:

  • An 8-point playbook of strategies which leaders can use to focus time and resources to build digital capabilities and navigate business change
  • A useful framework to compare or evaluate existing digital investment and innovation initiatives to improve quality and impact
  • A useful article to share or use for internal discussions with non-digitally native executives, Board members and cross-functional teams
  • A set of practical strategies to guide implementation following on from the key insight and findings in the REIGNITE 2020 Report authored by Andrew Essa
  • A playbook to evaluate your digital progress and help plan for the future. Get in touch with any questions, comments or help to implement these perspectives here andrew@rocketandcommerce.com or at ROCKET + COMMERCE

The 8 strategies include:

  1. Understand current digital usage, productivity, value and benefits
  2. Diagnose and benchmark digital performance and opportunities
  3. Scale digital capacity for increasing demand but manage complexity
  4. Review and upgrade cybersecurity measures
  5. Move from ‘good’ to ‘great’ across 4 key areas
  6. Prioritise resource reallocation to digital initiatives (with a crisis mindset)
  7. Improve the digital acumen of the Board (and workforce)
  8. Organise to build digital capabilities

8 Strategies For Leaders to Navigate Digital Acceleration

Although some organisations are thriving on the back of tailwinds in this environment, many more are struggling. In many cases, the difference between the former and the latter is an organisation’s ability to rapidly adapt and chart a sustainable and differentiated path forward, especially through maximising Digital opportunities across areas including Customer Experience, Growth Strategy, Workforce Productivity, and Organisational Adaptability (I posted recently here about the 3 Big Digital Opportunities for Organisations)

Below are 8 playbook strategies for leaders to now consider:

#1 Understand productivity, value and benefits 

For most organisations, the critical first step has been to safeguard employees by enabling them to work remotely using the full suit of available tools (see below). 

hub---digital-workplace

As this continues alongside partial or even full reintegrations, firms should continuously engage or ‘pulse check’ with workers, customers and key stakeholders. It is critical to evaluate what is working well (e.g. feedback, analytics, usage), what is missing (e.g. cybersecurity, training, IT hardware), lessons learned, and where low-hanging fruit is for further digitisation opportunities and benefits (e.g. customer service and experience).

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A challenge to overcome is that most firms typically fail to realise the full value from their technology investments for a variety of reasons (e.g. budgets, skills, governance, change, training etc). What tends to happen is some efficiency and cost reduction, but limited revenue generation, improved customer experiences and new products/services. The firms who out-perform their peers are the ones who prioritise and maximise the full potential of digital and are laser-focused on benefits realisation across the organisation. 

“The crisis has sped up the utilisation of tools such as Microsoft Teams for meetings, e-signature software and other tech which will assist both with internal and external customers moving forward. Typically face to face meetings or travel has been a big part of how we’ve conducted business particularly in my role in the past – Client Director, Private Investment Bank (interviewed in the REIGNITE! 2020 Report)

#2 Diagnose digital performance and opportunities 

For some SMEs, the current state of digital maturity involves a combination of accelerated back-end cloud, front-end software tools (e.g. MS 365), and new ways of working. Other larger, established firms however continue to have core (or hybrid) infrastructure set-ups based on outdated tools, processes, and assumptions combined poor digital acumen at leadership level and limited workforce training or up skilling.

This makes it increasingly difficult to adapt to new challenges (e.g. remote work, new services, cybersecurity), manage complexity, and properly reap the benefits of digital technologies. In some cases, the lack of agility will drag down the business which might be fighting to to rescue declining margins, compete, or even survive.

The challenge for leaders is to build on the momentum of change (‘it can be done!’) and increased adoption by leveraging the potential of digital across the entire organisation (not merely in pockets) for improved efficiency, productivity, customer experiences and new products/services.

To get started, leaders need to know what they are dealing with today.  If strategic planning around digital opportunities are to be robust and there is leadership intent to focus time and resources on the digital agenda, data and insight about the current digital state of the organisation will be needed.

Diagnostic surveys tools and assessments can help to evaluate an organisation’s digital and analytics maturity to discover digital growth, operational  improvement and worker productivity opportunities now, with recommendations on where to focus efforts for longer-term growth, change or productivity. 

At ROCKET + COMMERCE our Digital Performance Index (DPI) focuses on areas including Strategy, Customers, Analytics, Technology, Operations, Marketing, Offerings, People, Culture, and Automation. This data-driven, diagnostic approach helps CxOs and functional leadership teams to shape, refresh and align around a common vision and strategy across key digital and innovation dimensions.

We also critically incorporate human-centric approaches (see below) to our diagnostic tools which also provides people-focused data of digital change on users, customers, experiences, productivity, collaboration, skills, behaviours, trust, safety, belonging, health and well-being. 

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Read these brief case studies on how  at ROCKET + COMMERCE we have helped organisations do this and find new ways to go-to-market, become more customer-centric, launch new ventures, or pilot new up skilling programmes

This exercise also allows leaders to identify gaps between current capabilities and those of digital leaders (or the desired future state of the organisation), and plan a prioritised road map of tactical improvements or new strategic initiatives. This data-driven, diagnostic approach can also help CxOs and functional leadership teams align around a common vision and strategy across key digital dimensions. 

DMM_Model_Overview_2020

#3 Scale digital capacity for increasing demand but manage complexity 

Many IT teams are now grappling with providing sufficient capacity to serve the increased (and varying) volumes of traffic flowing through digital channels. One respondent to the survey (a provider of web-based collaboration tools), experienced a surge in demand from all of the newly remote workers and had to rapidly build out new infrastructure capacity to ensure availability.

This transition to digital channels will likely continue beyond the current health crisis as customers and organisations adopt fundamentally different ways of working. Recent research from Gartner indicates that about 41% of employees are likely to work remotely for some of the time post-pandemic. 

RemoteWorkStatisticsSource: Blackfog

The accelerated capacity build-out in H1 2020 has taken many forms beyond physical infrastructure deployment. In many cases, it has pushed organisations to adopt different architectural solutions for expansion, such as cloud bursting and augmenting on-premises deployments with virtual appliances and software-based deployments in the public cloud.

According to Mike Pelliccia, head of worldwide financial services technology solutions at Amazon Web Services (AWS), on-premises infrastructure no longer meets the business needs of today:

On-premises data infrastructures do not scale to meet variable and increasing volumes of data. Multiple disconnected data silos with inconsistent formats obscure data lineage and prevent a consolidated view of activity. Rigid data schemas prevent access to source data and limit the use of advanced analytics and machine learning. The high costs of legacy data warehouses also limit access to historical data.

The cloud helps organisations to harness the value of their data and aggregate it at speed and scale so that they can achieve their business goals. Traditional data solutions cannot keep up with the volumes and variety of data that is being collected today by financial players.

Pelliccia adds that a cloud-based data lake allows organisations – from banks to SMEs – to store all data in one central repository where it can be more readily available for the application of other technologies such as machine learning, “to support security and compliance priorities, realise cost efficiencies, perform forecasts, execute risk assessments, improve understanding of customer behaviour, and drive innovation.”

This enables organisations to maintain a holistic view of their business, while identifying risks and opportunities. For instance, analyses can help to detect fraud, surface market trends and mine for deeper customer insights to deliver tailored products and personalised experiences.

#4 Review and upgrade cybersecurity measures

Whilst many organisations will have robust cybersecurity processes and culture, for many others this will represent a new capability and massive learning curve. What was good just a few months or weeks ago may not be adequate today.

The urgency and impact of the shift away from office working will mean most organisations may have introduced new levels and types of cybersecurity risk not previously seen before at this scale (see below for leading causes of cyber risks).

bakerhostetler-causes-graph

Source: PropertyCasualty360

While allowing the workforce to be flexible is only a small part of digital transformation, it carries with it the need to ensure that new hardware (laptops, home printers, smartphones) and services have been, and continue to be, implemented securely (e.g. full disk encryption, enabling strong multi-factor authentication, and using VPN      technology).  

 #5 Move from ‘good’ to ‘great’ across 4 key areas 

Once solutions to immediate workforce and business priorities are in-flight, organisations should accelerate the exploring of different ways to use digital to work and operate, deliver innovative customer experiences, and create value in the new normal. For example, restaurants enabling entirely new in-home dining experiences, telemedicine becoming more of a norm, and different ways to shop with ubiquitous curb-side pick-up.

According to McKinsey, whilst many B2B companies have a general sense of what they need to do to become more digitally-enabled, it is the best B2B leaders who move beyond “accepted wisdom” to focus on being ‘great’ at 3 main differentiators of digital success:

  • Customer Insights
  • Process Improvement
  • Capability Building

To this list, I add a critical 4th dimension: Business Models 

The below provides further explanation:

Customer insights

  • Good: Focus on understanding their customer preferences and demographics.
  • Great: Ability to quickly translate into the most relevant value-creation strategies. Pick one or two high-value customer segments, then map decision journeys front-to-back to understand how customers buy, what channels they use, what turns them on—and off. More than 90 percent of B2B buyers use a mobile device at least once during the decision process, yet fewer than 10 percent of the B2B companies in the survey indicated that they have a compelling mobile strategy.

Process improvement

  • Good: Relentlessly improve existing processes.
  • Great: Use agile development techniques, automation, and design thinking to reengineer or reinvent supporting processes. Effective pre-sales activities—the steps that lead to qualifying, bidding on, winning, and renewing a deal—can help B2B companies achieve consistent win rates of 40 to 50 percent in new business and 80 to 90 percent in renewals. Incorporating agile techniques forces product development, marketing, sales, and IT to come together and use digital design practices, such as launching minimally viable products (MVP). That can ramp up the cultural changes needed as well.

Capability building

  • Good: Build important capabilities for digital initiatives
  • Great: Identify and augment the capabilities critical to achieving scale. B2B leaders create an organisational structure that supports their digital transformation. That involves identifying which skills need to be reallocated, what data and analytics resources are needed, and which customer opportunities require capabilities that need to be built, hired, or acquired. Systematic performance tracking needs to be in place to keep the efforts on track and make sure they having the desired impact (only one in five B2B companies systematically tracks digital performance indicators).

Business Models

  • Good: Optimise existing business model by digitising their traditional products, interfaces and distribution channels. 
  • Great: Take advantage of platform models and thinking leveraging network effects, intelligent AI-powered solutions, developer/API enablement and ecosystems, and customer-centric orchestration. As every sector digitises – accelerated by the COVID crisis – the imperative to incorporate new digital business models becomes more urgent. This underpins the ‘great’ executors. 

According to digital platforms expert Simon Torrence:

Platform thinking is about taking advantage of flexible software and digital  infrastructure to leverage, at scale, other economic actors (complementary third parties and/or developers) to create new value for customers and markets.Rather than trying to design and build everything yourself – which is the default for most companies today – platform thinking encourages you to act as a coordinator or enabling intermediary between the needs of your customers, your own expertise and the expertise of others.

Simon goes on to say that:

Incumbent leaders admire and fear the big tech giants, and would love to emulate or incorporate some of their ‘secret sauce’ into their own businesses, but don’t know how. They have been happy to invest large sums to digitise their existing business model and fund experiments, pilots and CVC investments in new areas, but have found it difficult to fully embrace the types of digital business models that work best in a hyper-connected world and to take bold steps in re-allocating meaningful levels of capital and resources towards them.

In summary, a commitment to “great” is really what allows companies to reap the rewards from digital and build digital and supporting capabilities. Without it, organisations will find their improvements provide only modest benefits that cannot be scaled.

#6 Prioritise resource reallocation to digital initiatives (with a crisis mindset)

As outlined above, the COVID crisis will accelerate the gap between digital laggards and transforming leaders requiring firms to now evaluate investments, baseline ‘digital maturity’, and in the short-term, secure a stronger, repositioned role for digital investments in 2021. 

In fact, in 2019 McKinsey believed a ‘crisis mindset’ was required. And that was before COVID….

1-920x1024

This is likely to require an urgent reallocation of resources. Although most senior executives understand the importance of strategically shifting resources (according to McKinsey research, 83 percent identify it as the top management lever for spurring growth— more important than operational excellence or M&A), only a third of companies surveyed reallocate a measly 1 percent of their capital from year to year; the average is 8 percent. 

This is a huge missed opportunity because the value-creation gap between dynamic and drowsy reallocators can be staggering. A company that actively reallocates delivers, on average, a 10 percent return to shareholders, versus 6 percent for a sluggish reallocator. Within 20 years, the dynamic reallocator will be worth twice as much as its less agile counterpart—a divide likely to increase as accelerating COVID impacts, digital disruptions, and growing geopolitical uncertainty boost the importance of nimble reallocation. 

The disconnect tends to be because managers struggle to figure out (and agree) where they should reallocate, how much they should reallocate, and how to execute successful reallocation. Additionally, disappointment with earlier reallocation efforts can push the issue off top management’s agenda.

Although these challenges can be overcome, feedback and data from employees, customers, and the maturity benchmarking should help to align senior management commitment to prioritising the short-term digital investment requirements, and at the same time laying the foundation for more detailed discussions and analysis for longer-term strategic planning. 

#7 Improve the digital acumen of the Board (and workforce)

 A UK government report published in 2016 found that the digital skills gap is costing the UK economy £63 billion a year in lost GDP. Similarly, a report from Amrop, a global executive search firm, reveals that just 5% of board members in non-tech organisations have digital competencies, and that the figure has barely moved in the last two years.

In the new COVID world requiring adaptability and digital adoption at a scale never seen before, boards must get to work in reassessing competencies, adopting new ways of working (e.g. continuous strategic planning, collaborating internally and with the wider ecosystem), and being open to hiring diverse backgrounds if needed. 

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In addition, since many new digital directors may have atypical perspectives (e.g. deep technical vs product vs strategy vs HR), companies must make sure that they have strong on-boarding processes in place, to capture and maximise the impact of their new board members.

A critical first step is to ensure a consistent understanding of what digital and innovation means amongst leaders and boards, what are the best practices of leading tech and non-tech organisations, and what are the big opportunities for digital (and threats) in a COVID world. As part of this, improving the board’s understanding of the external environment and how it is shifting, and how the big trends and signals might impact the immediate and longer-term future. 

In many cases, firms will need outside help across recruitment (e.g. diversity), training and education (e.g. research and insight, best practices, benchmarking), advisory, and briefings from experts, entrepreneurs, academics, and other ecosystem players. 

Once the above happens (which in theory can happen quickly with committed leadership), this should provide the intent and focus to refresh strategic plans and budgets, and then roll-out or accelerate digital and innovation upskilling throughout the wider workforce as a strategic priority.  

#8 Organise to build digital capabilities  

Put simply, digital capability can be defined as doing everything it takes to develop an organisation and workforce able to:

  • Maximise the potential of technology, data and talent to address business challenges; and
  • Ability to respond quickly to continual shifts in consumer behaviour and external environment in a fast-changing connected world.

According to recent study by Deloitte involving interviews with industry leaders, achieving this is not easy as the survey had a multi-faceted response. However, organisations that have successfully adapted to this new environment typically make delighting the customer their #1 priority, set bold goals to achieve factors of 10x impact, and challenge the status quo by looking for new ideas to solve.

3 core critical success factors to building digital capabilities:

Leadership:

In these times of significant change, leaders must understand, collaborate, and champion the exciting potential of technology from the very top of the organisation.

However, understanding the full suite of digital opportunities (e.g. API-based BaaS platforms) are often new and alien to leaders of incumbent firms. Teams and advisers need to help them to understand how digital can work, and the options in terms of where to play and how to win. This is critical to getting commitment to re-allocating sufficient capital and resources from other initiatives to support this market opportunity in a meaningful way.

Organisational Structure and Operating Models:

Organisations need to embed and build the right structures and models that allows them to drive digital change and execute in an agile way.  This requires clarity on the firm’s approach to digital strategy (e.g. build vs buy vs partner) as the implementation approaches to build digital capabilities will differ.

For example, many established firms will embark on dual-transformation or innovation portfolio approaches by

(i) executing process improvement and cultural change in the main firm (see ‘A’ below)

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(ii) creating separate legal entities, JVs and alliances to tackle new markets, exploit new business models, sometimes at the risk of cannibalising the main business (see ‘B’ above or ‘Exploit’ below)

82247d19-8db0-4050-8831-d4ec50b39f43.__CR0,0,300,300_PT0_SX300_V1___ (1)

03-Chart-ExploreExploitContinuum

Source: Strategyzer

PingAn has pursued the above approaches to become one of the best-performing transformer of the past decade (and become a much sough-after MBA case study subject). It typically kick-starts new ventures with partners as part of the ‘explore’ portfolio which is one of the most effective approaches to reducing risk and increasing chances of success.

Typically these are best managed away from the core in an ‘explore’ portfolio of businesses within a new organisational structure and P&L. 

Talent, Skills, Culture and Data:

Maximising digital opportunities require radically different skills, technologies, ways of working, and metrics. Organisations need to empower people to be creative, test and learn and challenge existing ways of working. They also need to cultivate diversity and a lifelong learning mindset, recognising that many will resist change. This was highlighted in PwC’s recent Skills Report.

In addition, whilst the focus of the ‘future workforce’ tends to focus on the technical and ‘hard’ skills (e.g. engineering, analytics, coding etc) it is the soft skills and humanities expertise which will gain increasing importance.

Screen Shot 2020-08-21 at 10.56.33

According to billionaire tech entrepreneur Mark Cuban:

“Twenty years from now, if you are a coder, you might be out of a job,” Cuban predicted. “Because it’s just math and so, whatever we’re defining the A.I. to do, someone’s got to know the topic. If you’re doing an A.I. to emulate Shakespeare, somebody better know Shakespeare.” Cuban acknowledged the importance of coding as a short-term opportunity. Long-term, however, the Shark Tank investor pointed out that A.I. is only as good as the data it’s given–meaning the highest-skilled workers in the future will be the ones who can identify “what is right and what is wrong and where biases are.”

Already today design thinking and human-centred design is a new differentiator in digital which complement technical mobile, cloud, AI, and other more technical digital skills.

“Creativity, collaboration, communication skills: Those things are super important and are going to be the difference between make or break” – Mark Cuban

In terms of data (the new ‘oil’) organisations need to capture, track, protect, analyse and maximise the business value of their data, as along with people, this is the most valuable asset.

Some further tactics might include:

  • Senior executive and board training, commitment and refreshed digital strategies 
  • Centralising digital business expertise (e.g. Centre of Excellence) using hub-and-spoke engagement model 
  • Hiring a Chief Digital Officer and team/function
  • New talent and up skilling (e.g. analytics, user experience)
  • Hiring external, flexible talent e.g. freelancers
  • Cross-functional governance
  • New incentives and behaviours
  • Collaborating with wider industry and ecosystem partners
  • Training will be integral which will also enable every C-level executive to be their own ‘Chief Digital and Innovation Officer’ for their functions.

Accenture summarise this using an 8 step ‘playbook’ below:

Accenture-Change-Leader-Digital-Economy-ThumbnailWhat’s next?

To better understand these issues further or explore our range of digital business advisory offerings, get in touch here andrew@rocketandcommerce.com or at ROCKET + COMMERCE

3 Big Digital Priorities for Leaders

After analysing the data of over 439 senior leaders at global organisations in the recent REIGNITE! 2020 Report, it was clear that the use of technology for 95% of the majority had been to maintain business operations, whether that was survival or business continuity in facilitating remote work. 

This is not surprising per se in response to a major emergency. Before the tectonic shifts caused by COVID-19, some organisations were executing on multi-year digital transformation plans, with others focused on fighting other fires with digital not even on the radar. 

The ongoing pandemic, economic, social and health crises continues to raise the stakes for leaders on digital priorities, underscored by three major opportunities:

#1 Increased digital adoption enables adaptability at speed and scale

For many firms this has involved a combination of accelerated back-end cloud, front-end software tools, and new ways of working. Many of those digital initiatives quickly became make or break—for example restaurants, cafes, and retailers enabling digital orders and connecting seamlessly with delivery services. 

Other firms however continue to have core (or hybrid) infrastructure set-ups based on outdated tools, processes, and assumptions which need to be re-envisioned for the evolving landscape, continuing remote workforce requirements and leadership appetite to maximise the full potential of digital across the firm.

The focus for leaders should be to build on the momentum of change the crisis has caused (‘it can be done!’) and adoption by moving beyond ‘getting back to business’ and understanding the full set of digital opportunities for customers, internal processes, workers, and organisational capabilities. 

#2 Digital acceleration increases the widening gap between the ‘laggards’ and transforming leaders 

COVID-19 has accelerated this trend and has firmly planted digital and innovation at the top of most CEO’s (and CXO’s) agenda. Whilst many of the worlds large and small companies went into tailspin or survival mode once the pandemic took hold, a handful of digital-powered and platform-enabled companies have instead added billions to their market capitalisation and top-line revenues. And they won’t stop (even likely break-up by the US government will not slow them down). 

In other words, if COVID crisis hasn’t shown you the burning platform (i.e. how fast change is moving, and how digital can help you adapt), then nothing will.

Here are the 3 rough categories of organisations today:

The Leaders: 

A business or brand, which has invested heavily (monetarily and otherwise) into a digital transformation strategy that goes far beyond ‘remote work facilitation’. Integrating key technologies and talent (up skilling existing and augmenting with external expertise) to elevate customer experiences, exploit new business models and ventures, and optimise business processes. Not to be confused with those who have attempted digital transformation, only to implement a new email system and hang up their hats.

The Laggards: 

Those who, for whatever reason, have failed to incorporate new technologies and/or invest in up skilling their talent, leaving their business to rely solely on manual or traditional forms of operations, business models, go-to-market, and communications. While you may be inclined to think of this group as pure traditionalists, grasping on to their old standards, assumptions and ways of working, this group has grown to include a much broader range of organisations. 

In talking with many leaders and employees across the world, it is surprising how many leaders have gone straight back to this way of working after Q2 2020 lockdown. In some cases, they have retreated even further. 

The Middle-Ground Mavens:

This may be the point in which you find yourself asking, but what about those in middle? Not quite a leader, but definitely not a laggard. In our post-COVID world and given the pace of change, the space taken up by these ‘middle ground mavens’ you could argue is increasingly dwindling, giving way to a landscape in which we can only find ourselves as laggards or leaders. Those who have mastered the art of transformation and innovation, and those who have not. 

(NB This is obviously hugely simplified and far from black or white, but the sentiment remains).

For non-tech large incumbents with some tailwinds and the appetite to transform, there is significant opportunity to use the scale and resources to digitise processes for efficiency, and at the same time, investing in future growth and innovation portfolios, new business models, and up skilling. PingAn’s transformation is a brilliant case in point. 

Whilst this is not easy and requires the right leadership, the alternative is arguably worse: a slow death-march toward extinction or significant value-destruction. 

 #3 Digital acceleration enables more advanced and integrated human and digital combinations

In other words, digital adoption will enable the workforce of today and tomorrow (e.g. remote, virtual, distributed, agile, flexible, gig etc) to become more productive, effective and efficient (‘smarter’) utilising automated workflows (enabled by cloud, analytics, AI, automation, software) of both repetitive and higher-order tasks.

The Boston Consulting Group call this the ‘Bionic Organisation’ which at its core will combine more advanced and integrated human/software combinations (see below):

The-Bionic-Company-of-the-Future_Exhibit_tcm-233419-1024x829

According to BCG, what the company of the future will look like is becoming clearer. At the centre is purpose and strategy: the reasons it is in business and how it brings those reasons to life. Four enablers allow companies to operate as bionic organizations: two have to do with technology and data, while the other two address talent and organisation.

What’s next?

To better understand these issues further or explore our range of digital business advisory offerings, get in touch here andrew@rocketandcommerce.com or at ROCKET + COMMERCE

Rethinking Education and Learning

“Direct to learner” (DTL) business models and start-ups that leverage online, mobile, AI and other technologies have been an area of much focus within the ‘Edtech’ sector for over a decade.

The late Professor Clayton Christensen had made the topic one of his core areas of focus in the last decade of his life with books including Disrupting Class and The Innovator’s University

Companies like Coursera, Udemy, DuolingoQuizletSkillshareCodecademy, Outschool and Lambda are just a few examples. 

Just this sample reaches hundreds of millions of learners all around the world each month. Many learners use these products for free. A small percentage of learners pay. And yet this portfolio will generate close to a half a billion dollars of revenue in 2020.

Another interesting thing about this portfolio is that none of these companies have spent a lot of capital building their businesses. They have all been very capital efficient and most are cash flow positive at this point.

So, what?

  • Direct to learner businesses are obviously very attractive for consumers and investors
  • They can serve a very large number of learners very efficiently
  • They can lightly monetize and yet produce massive revenues because of their scale
  • They don’t require a huge amount of capital to build

As they are competing with a sector which broadly, looks exactly the same as it did 100 years ago (schools, universities, training), the current pandemic will massively accelerate significant structural changes in the way people and companies learn, train and educate. 

The University segment in particular is in for a massive shock. I can’t see as much change happening in junior schooling (e.g. ages 3-7) mainly as the main job that these bodies do is child-care. I’m currently parenting a 3 and 4 year old and this is the main reason why I’m sweating on schools (safely) re-opening soon. 

I’ll share further thoughts on these topics in later posts.  

 

The Challenge for Video-Conferencing Vendors

Yesterday I participated in a 4hr virtual symposium called ‘Disruption 2020’ run by the MIT Sloan Management Review. If you are interested in disruptive innovation and strategic management, this was a brilliant session with experts including Scott Anthony (Innosight), Amy Webb (NYU Professor and Founder, Future Today Institute), and Rita Gunter McGrath (Professor, Columbia Business School).

They have an edition dedicated to it which you can see here.

The VC session was run on GoToWebinar, one of the traditional VC incumbent firms founded in 2004. Unfortunately, the technology didn’t work that well. If I had to rate the user experience of the technology on a scale of 0-10, with 10 being perfect, I would give it a 5.

Every speaker and host (there were 8 or so speakers and 2 hosts) had issues. One had to drop out then come back in. A few speakers could only speak as the VC wasn’t working. Some had constant cutting out or freezing throughout.

It is unclear why these issues were occurring, and who exactly is responsible. Whether it is GoToWebinar, internet bandwidth, home wifi, 4G, human error or something else, this shouldn’t be an issue in 2020. For me, this feels like what dial-up internet was in the early 2000s.

Clearly these are the fundamental CX issues which have enabled a young start-up (Zoom) to rapidly scale across B2B and B2C with a powerful value proposition focusing on the B2B SaaS Playbook: ease of use, integrations, free or flexible pricing, and better performance. I wrote a post recently on how impressed I was a few months ago in being able to easily host a global conference hosted by Seth Godin with many hundreds of people.

Whilst Zoom is facing other challenges right now (e.g. security, privacy etc), from what I have seen with competing vendors, it will be around for a long time to come (and the others, won’t be).

14 Sources of Disruption

As the COVID-19 pandemic continues to cause significant or catastrophic disruption to many organisations, it is almost crazy to think that COVID-19 represents one source of disruption. Obviously it is a major shock and is inter-related with other forces (e.g. economic). However, from a crisis response perspective and the need to re-set short and longer-term strategic plans, it is important for leaders to always look at the bigger picture.

Why? According to Amy Webb, founder of  The Future Today Institute:

If leaders think that they are aware of the forces that might disrupt their company, their lens’ may be far too narrow…

To support such analysis, I use a tool called The Strategic Forces Framework (SFFF) which Amy Webb discusses in detail here

MAG-webb-essay-s1

Clearly, the SFFF builds on long-standing (and less comprehensive) frameworks including PESTLE. Many forces will seem obvious, but others less so.  

Amy Webb provides context on using the tool:

The SFFF helps clients identify external uncertainties which broadly affect business, markets, and society across positive, neutral, or negative dimensions. In over a decade of strategy consulting and research, I have observed that all major or ‘disruptive changes’ are the result of one or more of the 11 forces. 

For leaders and executives, the critical skill is being able to look for areas of convergence, inflections, and contradictions, with emerging patterns especially important because they signal ‘transformation’ of some kind. People must connect the dots back to their industries and companies, and position teams to take incremental – or transformative – actions as required.

Whilst many of the 11 sources of disruption might seem obvious or onerous at first, taking a broader viewpoint provides perspective as the tool can help identify critical growth opportunities (e.g. market-creating innovations) or areas of potential disruption (e.g. new business models). For example, an established regional farming equipment firm tracking eco-friendly infrastructure trends could be a first mover into new or emerging markets, while a traditional electronics retailer (with online operations) monitoring 5G, IoT and AI plus segments of non-consumption, could be better positioned to compete against the big e-commerce platforms.

Whilst Amy uses 11 forces, I add 3 more to make 14. See below for details but I believe that Legal, Industry, and Business Models deserve their own line of enquiry. You only have to think about the music-industry in the early 2000s to understand why that matters.

Sources of macro change encompass the following:

  1. Prosperity: the distribution of income and wealth across a society; asset concentration; and the gap between the top and bottom of the pyramid in within an economy.
  2. Education: access to and quality of primary, secondary, and postsecondary education; workforce training; trade apprenticeships; certification programs; the ways in which people are learning and the tools they’re using
  3. Infrastructure: physical, organizational, and digital structures needed for society to operate (bridges, power grids, roads, Wi-Fi towers, closed-circuit security cameras); the ways in which the infrastructure of one city, state, or country might affect another’s.
  4. Government: local, state, national, and international governing bodies, their planning cycles, their elections, and the regulatory decisions they make.
  5. Geopolitics: the relationships between the leaders, militaries, and governments of different countries; the risk faced by investors, companies, and elected leaders in response to regulatory, economic, or military actions.
  6. Economy: Standard macroeconomic and microeconomic factors, including interest rates, inflation, exchange rates, taxation
  7. Public Health: changes occurring in the health and behaviour of a community’s population in response to lifestyles, disease, government regulation, warfare or conflict, and religious beliefs.
  8. Social: Life-style, trends, ethics, norms, religions, diversity and inclusion, culture, religion, demographics, population rates and density, human migration, and other dynamics are leading to shifts in communities, markets (including non-consumption) and societal needs
  9. Environment: changes to the natural world or specific geographic areas, including extreme weather events, climate fluctuations, rising sea levels, drought, high or low temperatures, and more. Agricultural production is included in this category.
  10. Communications: all of the ways in which we send and receive information and learn about the world, including social networks, news organizations, digital platforms, video streaming services, gaming and e-sports systems, 5G, and the boundless other ways in which we connect with each other.
  11. Technology: not as an isolated source of macro change, but as the connective tissue linking business, government, and society. We always look for emerging tech developments as well as tech signals within the other sources of change.
  12. Legal: Privacy, health and safety, labour, consumer rights, product safety 
  13. Industry: Suppliers, buyers, non-buyers (e.g. non-consumption), competitors (current and new), substitutes, distribution channels, partners, ecosystems and value-networks 
  14. Business Models: The incredible pace of technological change continues to open up more ways to make money and go-to-market. Combined with the tremendous disruptive impact business model innovation can have on traditional firms and industries, I believe it is critical to include it as a separate category for investigation e.g. Software-as-a-service, Direct-to-consumer, Pay-as-you-go

How best to use the SFF?

Most companies we encounter use the Strategic Forces Framework to help make sense of initial or deep uncertainty, optimise existing planning processes, or reinvent how that is typically performed. Some use it at the start of a strategic project at corporate levels, while others use it as a guiding principle throughout their functional or departmental work streams, processes, and planning. The key is to make a connection between each source of change and the organisation with questions such as: 

  • Who is funding new developments and experimentation in this source of change? 
  • Which populations will be directly or indirectly affected by shifts in this area? 
  • Could any changes in this source lead to future regulatory actions? 
  • How might a shift in this area lead to shifts in other sectors? 
  • Who would benefit if an advancement in this source of change winds up causing harm?

Here are some good examples of use in business as usual (BAU) provided by Amy Webb:

I have seen the most success in teams who use the macro change tool not just for a specific deliverable but to encourage ongoing signal scanning. One UK-based multinational professional services firm took the idea to an amazing extreme:

    • It built cross-functional cohorts made up of senior leaders and managers from every part of the organization all around the world.
    • Each cohort had 10 people, and each person is assigned one of the sources of macro change, along with a few more specific technology topics and topics related to their individual jobs. 
    • Cohort members are responsible for keeping up on their assigned coverage areas. A few times a month, each cohort has a 60-minute strategic conversation to share knowledge and talk about the implications of the weak signals they’re uncovering. 

Not only is this a great way to develop and build internal muscles for signal tracking, it has fostered better communication throughout the entire organization.

Whilst this process might go against the established culture of your organization, embracing uncertainty is the best way to confront external forces outside of your control. Seeking out weak signals by intentionally looking through the lenses of macro change is the best possible way to make sure your organization stays ahead of the next wave of disruption. Better yet, it’s how your team could find itself on the edge of that wave, leading your entire industry into the future.

Gig Work Acceleration

I came across an article today (here) in Forbes which summarised findings from recent PwC and BCG CEO surveys. Most of the findings were self-evident, especially around the acknowledgement of increased requirements for, and adoption of, independent consultants going forward during and beyond COVID 19:

  • More companies are likely to access freelancers both for cost efficiency and to supplement critical skill sets;
  • The 4th Industrial Revolution (4IR) offers interesting and important freelance work and lots of it;
  • Freelancers are a critical resource to more industries;
  • More areas of freelancing will grow in importance.
Source. BCG

 

It is hard to believe that a little over a decade ago, organisations weren’t able to easily access remote (or on-site) highly-skilled workers and teams using the internet (e.g. online marketplaces) or mobile apps.  Nor were such firms willing to do so, especially at scale and for a wider variety of higher-skilled freelance talent e.g. lawyers, management consultants.

As a lawyer in Australia and London in the mid-to-late 2000s, I remember that it was career suicide to turn your back on traditional law firms and pursue contracts with in-house legal departments. How things have changed!

 

Jeff Bezos

“We innovate by starting with the customer and working backwards. That becomes the touchstone for how we invent” – Jeff Bezos

Jeff Bezos is arguably one of the greatest – if not the greatest – founder/CEO’s of all time. What is more unbelievable is that he is only 58, and many believe that the company he founded (Amazon) is only just getting started.

Like many of the best leaders who have disrupted industries or successfully navigated disruptive events or crises, there are many unique leadership traits which characterise Jeff Bezos. However, when I think of one thing, it is this: Customer-obsession.

Below are some ways that Jeff executes this within Amazon:

Leadership principles: It is so important to Amazon that it is the first on their list of 14. Apparently all the other principles are interchangeable, but only one must be first – customer obsession.

Core value-driver: Jeff Bezos sees that there are 5 main ways of creating shareholder value:

  • Competitor obsession
  • Business model obsession
  • Product obsession
  • Technology obsession
  • Customer obsession

While he acknowledges merits of all the approaches he believes that Customer Obsession is the healthiest approach:

Leaders start with the customer and work backwards. They work vigorously to earn and keep customer trust. Although leaders pay attention to competitors, they obsess over customers. They experiment patiently, accept failures, plant seeds, protect saplings, and double down when you see customer delight. A customer-obsessed culture best creates the conditions where all of that can happen…”

Symbols: Early on in Amazon’s life, Jeff Bezos brought an empty chair into meetings so lieutenants would be forced to think about the crucial participant who wasn’t in the room: the customer. Now that ­surrogate’s role is played by specially trained employees, dubbed “Customer Experience Bar Raisers.” When they frown, vice ­presidents tremble.

Founding value: Amazon’s 1997 shareholder letter is the first documented account of the term Customer Obsession – in the heading Obsess over Customers.

While the whole letter makes an interesting read, not least the growth between 1996 and 1997 of 838% from $15.7 million to $147.8 million. It’s this paragraph discussing their relentless focus on delivering value for customers as the driver of their growth.

Customer obsessed growth has taken Amazon from a start-up in a garage to one of the leading companies in the world and disrupting multiple industries in its wake.

Customer focus vs customer obsession: Gibson Biddle, former VP of Product at Netflix, wrote an interesting blog post explaining how Netflix adopted ‘Customer Obsession’ in his time there. In the post Gibson uses an image to compare Customer Obsession with Customer Focus which properly distinguishes the strategies:

Screenshot 2019-05-17 at 21.39.05

The below is a great short video summarising Jeff’s approach to customer obsession and long-term thinking:

This video provides details on Amazon’s 14 Leadership Principles with footage from various interviews with Jeff:

Other useful articles:

Below I have captured a few must-read resources to gain insight on Jeff’s leadership philosophy:

Forbes article on seven things a highly agile CEO does: Jeff Bezos

Jeff Bezos (2017) on his management style and philosophy 

Havard Business review article on how Jeff Bezos makes decisions

Hal Gregersen on the one skill that made Jeff Bezos so successful: Experimentation

 

 

 

Steve Jobs

“The people who are crazy enough to think they can change the world are the ones who do.”

—Apple’s “Think Different” commercial, 1997

Steve Jobs cofounded Apple in his parents’ garage in 1976, was ousted in 1985, returned to rescue it from near bankruptcy in 1997, and by the time he died, in October 2011, had built it into the world’s most valuable company. Along the way he helped to transform seven industries: personal computing, animated movies, music, phones, tablet computing, retail stores, and digital publishing.

Most people would agree that Steve Jobs will go down as one of the world’s great innovators alongside Edison, Ford and Disney. However, the story of Steve Jobs will likely polarise as many as it will inspire. None of these men were saints, but long after their personalities are forgotten, history will remember how they applied imagination to technology and business. His biographer Walter Isaacson explains why:

The essence of Jobs, I think, is that his personality was integral to his way of doing business. He acted as if the normal rules didn’t apply to him, and the passion, intensity, and extreme emotionalism he brought to everyday life were things he also poured into the products he made. His petulance and impatience were part and parcel of his perfectionism.

When I reflect on Steve Jobs, there are many different leadership attributes that come to mind. However, one stands out: the ability to inspire.

Whilst Jobs was famously impatient, petulant, and tough with the people around him, his treatment of people, (though not laudable) emanated from his passion for perfection and his desire to work with only the best.

Whether in times of crises or during business as usual, the ability to inspire your people (and stakeholders) is a critical trait of the disruptive leader.

Here are some great resources to learn more about how he was able to do this:

 

Reed Hastings

As part of the 30 Disruptive Leaders in 30 Days Challenge that I set myself here, today I provide some insight around one of the best examples of a disruptive leader in Reed Hastings, CEO of Netflix.

If there was one word to describe how he demonstrated disruptive leadership, it would be this: Courage

Courage (noun)

  1. the ability to do something that frightens one; bravery.

“she called on all her courage to face the ordeal”

Why?

For almost a quarter of a century, Netflix and Reed Hastings have been in a constant stream of business wars, technology paradigm shifts, business model innovations, consumer habit changes, and multiple economic crashes. Despite this, Netflix has not only survived this chaos with Reed at the helm, but on multiple occasions, come out on top (as at April 2020).

A few examples of courageous (or, audacious, bold, daring, fearless) decisions made by Reed and Netflix during this time include:

  • Decision to bid $100M (at the time a significant chunk of revenue) to win House of Cards from cable rival HBO in 2011, and launch a risky backwards integration strategy into original content production;
  • Decision (2007) to open up its recommendation algorithm to the public and offer $1M to anyone who can improve it by more than 10%

However, it was the game-changing decision in the mid-2000s to pivot the company to invest and scale a streaming model which I believe was the most significant. To execute, the company split into two business units and the management team of the DVD business –  at the time representing 95% of revenue – were allegedly told by Reed to stop attending Netflix senior management meetings (see CNET article here).

Reed explains his thinking below:

“For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming,” Hastings wrote. “Most companies that are great at something – like AOL dialup or Borders bookstores — do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business.

“Eventually these companies realise their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover,” Hastings continued. “Companies rarely die from moving too fast, and they frequently die from moving too slowly.”

4 Resources to Learn More About Reed’s Leadership:

CNET article (2012) – A brilliant inside look at what happened during Netflix’s 2011 price-hike crisis which cost it 800k subscribers and stock to crash 77% in 4 months. A few leadership learnings from Reed are below:

  • Do not underestimate the need to manage different businesses separately;
  • Be forthright and transparent with customers at all times
  • Take responsibility, quickly.

TED Interview with Chris Anderson (2018) – A great interview which goes deep into Reed’s leadership style, decision-making, and ethos. According to Reed:

‘…courage is a value which must permeate the organisation. employees to have the courage to speak their mind as otherwise ‘to disagree silently is disloyal. You need the debate but it is not intense; it is more curiosity, to draw people out…’

Netflix Culture and Philosophy – This has been codified on its careers site. Once you read this, you are not left to any doubt as to why Reed – and Netflix – has been able to successfully lead the firm through disruption. More than once.

Reed’s Top 10 Rules for Success (see below). This is a compilation of advice from various interviews Reed has conducted. It is nicely put together. Key themes are :

  • Be Authentic
  • Edge of Chaos
  • Create Joy
  • Known Your Mission
  • Be Honest
  • Keep Improving
  • Think Long Term
  • Focus
  • Strong Values
  • Patience

 

 

 

Disney+ Launch

Today we signed up to Disney+ after it finally launched in the Channel Islands. We have been waiting for this day since Disney announced the service in 2019. We are big film fans but haven’t been too keen to pay £12-15 per title to stream a Disney film.

As such, we haven’t been able to introduce our 3 and 4 year old to animated classics including Aladdin, 101 Dalmatians, and Beauty and The Beast. With the lockdown and homeschooling due to the Corona Virus pandemic, the £5.99/mth represents unbelievable value.

The performance of Disney+ has been extraordinary, but not surprising. CEO Bob Iger’s M&A strategy to bolt-on franchises including Pixar, Lucasfilm and Marvel is now paying tremendous dividends across its digital and physical assets (e.g. theme parks).

On 3rd February 2020, the company had signed up 28.6 million global subscribers (since US launch in November 2019) with many more markets to launch. By comparison, Netflix has 149 million paid subscribers (see chart below):

disney v netflix

Despite limited content, Apple TV+ has around 33million US subscribers, although it is unclear how many are paid. Amazon Prime has also been very serious player for some time. These firms both have the deepest of pockets and serious ambitions. It will be interesting to see how these streaming wars play out.

 

Zooming

I came across an article this week here which asked whether Corona Virus (CV) could present a tipping point for virtual events. This reminded me of a pre-CV experience at the end of 2019. I attended a virtual conference hosted by marketing guru Seth Godin.

Afterward I was amazed at how far VC technology has come in being able to easily manage large numbers of people in an interesting and organised way which adds-value to both sides. He ran it using Zoom, had over 300 attendees from 50 countries, used self-managed break-out rooms over the course of the 2hrs, and created interactivity (which game them market research) with Q&A into the chat boxes.

Whilst it wasn’t perfect, it was impressive. I would certainly attend more of these, and reconsider in-person ones. Until this time, I had only ever used VC tech for standard corporate meeting use cases with just a few people. Now, I am recommending my parents to set up Zoom as an alternative for traditional B2C options (Skype, FaceTime).  Although that may change if the firm can’t get a handle on Zoom-bombing.

Despite some negative scaling side-effects and challenges, Zoom’s stock has post-IPO gone through the roof (actually, through the atmosphere). This gives them a massive window to place new bets and scale-up new products, value-added services, and M&A.

It is not often a newly public firm gets to invest for the long-term, but now is the certainly the time to accelerate investments into becoming a key player within the enterprise (and B2C?) ecosystem. Vertical, horizontal and hybrid platform solutions across many sectors and use cases will likely emerge as it has with IoT. It will be interesting to see how it plays out, how Zoom responds, and how long until its market capitalisation falls back down to earth.

Thank you, Clayton

In early January 2003 I embarked on a year-long academic research project at Queensland University Of Technology where I was studying and teaching. The work culminated in a 50,000 word thesis centred around applying Clayton Christensen’s theories on disruptive innovation to the Australian music industry. I was fascinated in trying to understand the competitive responses of key players in the Australian music industry as they battled a disruptive innovation – digital music distribution. At the time, the entire industry – from major record labels to retailers such as HMV – was in a state of chaos meaning it presented a fascinating ‘live’ research case study. 

As part of the literature review, I had come across Clayton Christensen’s academic work and books in a comprehensive strategy and innovation theory review alongside management luminaries in Michael Porter. His work didn’t feature too widely in peer-reviewed journals as his seminal work (The Innovator’s Dilemma) had only recently been published (late 90s). However I distinctly remember that I was immediately captivated by how insightful and unique his work was in such a complicated area i.e. understanding why established companies often fail when confronted with emerging technologies. I felt that this represented a step-change from the traditional (i.e. manufacturing-driven) strategic management literature, but also drew relationships (and challenges) with research from various fields, including management, economics, finance, strategy, leadership, innovation, & organisational behaviour.  As I sought to better understand what was happening, why, and the implications in the rapidly evolving music industry, I felt that his frameworks, models and case studies of other industries were highly relatable to analysing the challenge I faced.

Clayton was the reason why I subsequently pursued career paths loosely aligned with his work. I became a technology lecturer teaching university students in the early 2000s on the new field of e-Commerce law. I became a technology lawyer advising governments on emerging online gambling regulatory models. I became a technology management consultant helping global telcos with strategy, transformation, & operating models. I launched a start-up to gain the ‘innovators’ perspective on launching & scaling disruptive technologies (NB the start-up was too early and later failed, and as such was far from being disruptive). I even launched my own version of Clayton’s Innosight consulting firm called ROCKET + COMMERCE which helps CXOs to navigate and take advantage of new and emerging technologies (e.g. Digital, Internet Of Things, Digital, SaaS etc). 

I had planned to make contact with Clayton and share my thesis in 2003/04, but I didn’t. I had planned to experience his teachings in Boston, but I never applied. I had once planned to convince Innosight to hire me, but I never pursued them. Upon hearing about Clayton’s recent passing, I immediately thought about these potential ‘missed’ opportunities to meet, engage, and express gratitude to someone who has had so much influence from afar. Whilst I now won’t ever have that opportunity, perhaps there are other ways. A crazy idea might be to build upon his work, like I aimed to do back in 2003. To do that properly may mean a radical career U-turn back to my academic roots. An easy idea would be to express gratitude to those who have helped me along the life journey so far, even if just a little. I don’t think I have thoughtfully done this, so right now would be a good time to start. To help provide additional inspiration, I’ve just ordered Clayton’s book from some years ago – How Will You Measure Your Life? (I didn’t realise he had written it). I’m sure it will have great ideas. And I wouldn’t be surprised if it also has a profound impact like his earlier works did on how I might spend the next 10-20 years. Watch this space (NB: I’ll provide a direct update to this post in 5 years on Jan 26 2025. Promise). 

RIP Clayton

Smart Contracts: The Big Questions

It feels as though people have been talking smart contracts for a long time. Like most new innovations, it will take a specific use case (i.e. business challenge important enough to justify adoption) to kick it out of the domain of academics & legal conferences, and into commerce & industry. Perhaps this has already happened. If it has, be sure to give me a shout.

Yesterday,  I came across an interesting analysis of smart contracts from Charles Kerrigan, a lawyer at big law firm CMS. It was compiled by Richard Troman of the blog Artificial Lawyer’s (must read for the legal techies out there). Mr Kerrigan was giving a speech as part of a panel giving evidence to the UK’s All Party Parliamentary Group on Blockchain at the end of last year. Whilst the speech is detailed, it provides an interesting deep dive into some of the pervasive questions out there on smart contracts. As Richard Troman’s points out:

…as the prospect of their use in day to day legal work draws ever closer, what should we be focusing on? How should we approach this subject and what really will be the key issues we need to grapple with before this quintessentially legal technology becomes mainstream?

The full extract is posted on Artificial Lawyer’s blog here. If you have any thoughts, or know of any live smart contract use cases in industry, be sure to let me know.