Paul Wallbank | Paul Wallbank - Communications Professional

Australia’s missing technology leadership

Australia’s political and business leaders go missing as the nation tries to refocus its economy

This morning Cisco announced its latest global innovation centre in Sydney focusing on what it describes as Australia’s strengths in agriculture, resources and smartcities.

Along with with Cisco’s commitment to support the Sydney centre to the tune of 15 million Australian dollars and invest in local IoT businesses the project promises to bring together the data resources and skills of the University of New South Wales’ Engineering faculty, the Data 61 research agency and various state government departments.

Cisco’s launch though comes at a difficult time for the Australian scientific and research communities as just last week the national research agency, the CSIRO, launched another wave 0f job cuts immediately after restructuring the sector and even the location of the announcement is being sold off to property developers as the state government sees real estate ventures trumping technology investments.

Governments go missing

Even more telling during Cisco’s announcement was the poor presence by governments and corporate partners, the New South Wales state government at least sent along a minister and his Departmental head but the Federal government, despite its much heralded Innovation Agenda, was nowhere to be seen.

That lack of Federal government support is telling, particularly given regional and rural development is supposedly a priority of the current administration. An informed observer may be forgiven for thinking 21st Century technology investment would assist even the 1950s inspired project to develop Australia’s sparsely populated north but one supposes that grand vision extends to dams and highways.

The missing corporate links

Probably the most troubling omission is that of telecoms providers, agricultural and resources businesses utilising the Internet of Things or M2M technologies need connectivity and the absence of either Telstra or the flailing government owned National Broadband Network means an important piece is missing from the push to connect these industries.

Once again both Optus and Vodafone – the latter probably having the best global M2M capacity of any provider – miss an opportunity to position themselves as an alternative provider to Telstra which proves whingeing about competition in the Australian market is a damn sight easier than putting some money down.

Notably missing as well is support from Australia’s corporate sector. While resources giant Woodside is a partner of the Perth centre, there’s little engagement from any other major company. The reply to a question by this writer to the panel about accessing the data held by the large pastoral companies illustrated what little engagement there is from key private sector stakeholders.

Fighting the innovation bureaucracy

To be fair to Cisco, these missing links are not the company’s fault and the delay in launching their Sydney centre was due to various shenanigans within Australia’s innovation bureaucracy beyond their control.

Hopefully Cisco’s Sydney centre will be successful – despite the fine words of Prime Ministers and other politicians Australian industry desperately needs some genuine leadership as the nation realises the safe certainties of the 1990s have passed.

For the moment though the lack of engagement in the technology industries by political and business leaders is striking. It’s hard not to think the country has regressed back to a smug 1950s view of the view, something not helped by all these events being almost overwhelmingly dominated by white, middle class middle aged men.

It’s time for Australia to start thinking differently. The nation’s business and political leaders can’t expect multinational corporations to drag the nation into the 21st Century.

Coming to the end of Moore’s law

Moore’s law may be reaching its limits, but that only means things could be getting more interesting for the chip industry.

One constant in the modern computer industry is Moore’s law, the rule described by Intel co-founder Gordon Moore that the number of transistors on a microprocessor will double every two years.

Nature magazine reports chip makers are now about to abandon Moore’s law as they reach the physical limits of etching an ever increasing number of transistors onto silicon.

This doesn’t mean the microprocessor industry is about to stagnate however as the demand for more mobile and energy efficient chips is expected to boom as the Internet of Things evolves and wearable technologies become commonplace.

Hacking the power grid through air conditioners

Air conditioners are the latest internet connected devices to raise security concerns

Another example of the unintended consequences of poor security in the Internet of Things is Wired’s story about the possibility of hacking the power grid by accessing smart air conditioners.

In the US, electricity companies offer deals where consumers get reduced bills in return for the utility being able to throttle the usage of air conditioners during peak power periods.

Those devices turn out not to be well secured which opens the possibility of malicious actors causing brownouts or service interruptions in a targeted areas.

Sadly this story isn’t isolated, too many connected devices have poor security that opens up the a range of risks to homeowners, businesses and the community at large.

Crisis management for startups

What does a startup do when it’s faced with a PR crisis?

What does a startup do when it’s faced with a PR crisis? Recently Australia witnessed a spectacular example of what not to do when Sociabl, a startup that promised to connect users with celebrities, flamed out spectacularly.

Sociabl promised to connect punters over video with celebrities for a fee ranging from $500 up to $100,000 for individuals like Richard Branson with half the money going to a charity of the celebrities choice.

The app and its two young founders had plenty of coverage and all looked good until one of them, Brandon Reynolds, appeared on prime time evening show A Current Affair to spruik the service.

Unfortunately for Brandon he was interviewed by one of the celebrities listed by his app and the host, singer and presenter David Campbell, had never heard of the service.

A true PR disaster

Needless to say the interview didn’t go well with poor Brandon meekly declaring at one point “we’re not a major fraud!” You can watch the train wreck on the show’s website.

To compound the problem Brandon then wrote a defiant Medium post – later removed – accusing the program of slandering him and posting a pile of correspondence with the various celebrities’ agents.

Earlier this week I was invited to join a panel consisting of a journalist, a startup founder and a lawyer who also runs a startup along with myself we looked at how a startup can avoid a Sociabl like disaster. The lessons from it were clear.

Stop digging

Rule one in crisis management is when you find yourself in a hole, the first thing to do is stop making it deeper.

Brandon clearly missed that memo and his defiant post that accused the journalists and the network of defaming him only antagonised them. What’s worse, the attempt to throw the celebrities’ agents under the bus was only going to take him and his business partners into a new world of pain.

So when things are looking bad, stopping and taking a deep breath is the first thing to do. The absolute wrong action is lashing out publicly at media, advisors or business partners.

It’s probably not a crisis

There is no doubt Sociabl’s debacle was a crisis, but it’s an outlier and a situation that few startups or any businesses will find themselves. In most cases what appears to be a crisis is just a minor hiccup that looks like a big problem because you’re too close to it.

Most startup founders and small business owners are working hard, under stress and deeply emotionally engaged in their business. It’s understandable to over-react to what is often a minor, or even imagined, crisis.

By stopping digging, or panicking, and taking that deep breath you have the opportunity to get things into perspective. It’s also the opportunity to take advice.

Talk to your friends

One of the first things any new business should set up is an advisory board or panel. Helping with a crisis is exactly what those advisors are for. Talk to them and get their wisdom, usually they’ll bring some perspective and more experienced friends will know how to manage a crisis (if it exists).

An important aspect of asking for advice is actually taking what’s offered. One way of burning bridges with friends and trusted advisors is to ignore their advice after asking for it.

If you have investors then talk to them, particularly if they have seats on your board. They’ll want to know about the crisis anyway and if they’re experienced may well be the best people to help.

Get professional help

For early stage startups this tip isn’t much use as good PR and crisis communications professionals quite rightly charge a lot of money for their services.

If you do have raised substantial money however, then a good PR agency should be one of the first professional services engaged with the funds. Sociabl claimed to have raised $210,000 which probably wasn’t enough to get a good one.

Had Sociable engaged a competent and professional PR firm, it’s likely they would have avoided the disaster on A Current Affair.

Rally the fans

If you have loyal customers, user or supporters then a crisis is the time to get them onside by engaging honestly on the web, through email and on social media. Be honest, be open and be quick to reply.

If you have made a genuine mistake then it’s likely your fans will support you as long as you come clean. All bets are off however if you’re ripping those loyal supporter off.

Have a plan

Early in your business do a risk analysis to identify where things could go wrong and have a plan to deal with known risks. Hopefully you’ll never use it but it’s handy to have when something foreseeable happens.

Don’t be a fraud (of any size)

“We’re not a major fraud” will go down as one of the greatest lines of the current startup mania and one that Brandon Reynolds will struggle to live down for many decades.

At this stage I should point out I don’t believe Reynolds and Sociabl were a fraud of any size – he and his team simply didn’t understand how the world of celebrity engagement and the media work.

The key lesson is don’t be dishonest. Only make claims you can justify and promises you can deliver. Hell hath no fury like customers, investors or journalists who believe they have been misled.

For those raising money through crowd sourcing this is an important point as overstated claims and missed delivery dates will not only cause a crisis but see loyal supporters desert you.

More importantly, a crisis brought on by dishonesty may get the attention of the authorities if you’ve breached consumer law with your customers or securities regulations with your investors. Don’t be evil is a good philosophy for a young business.

In summary, the best advice for a startup in avoiding a crisis is not to put get in the position where you might find yourself in one however sometimes things are outside your control, when they do take a deep breath and talk to your friends.

BlackBerry’s last smartphone

The BlackBerry Priv is probably the company’s last smartphone as it pivots to being a security provider

Having written about BlackBerry’s ambitions in the marketplace for The Australian last week, it wasn’t surprising to be invited to the company’s Down Under launch of their Priv handset earlier today.

The event illustrated some brutal realities about mobile phone market and BlackBerry’s efforts to build on its strengths in the enterprise security space.

With 2.7 billion dollars of cash reserves, the company has seven years of breathing space at its current loss rates although it’s notable the stock market values the company at $3.5bn, implying investors value the business’ operations at a measly $800 million.

Given the collapse in BlackBerry’s handset business from twenty percent of the market at the beginning of the decade to an asterix today, that pessimism from investors isn’t surprising and underscores why the company is recasting itself as an enterprise security provider.

Five major acquisitions in the last 18 months have demonstrated how BlackBerry is attempting to recast its business; security services like Good Technology and Secusmart through to warning software like At Hoc have seen the company bolster its range of offerings.

Coupled with the recent acquisitions are its own longstanding messaging and secure communications services combined with the QNX software arm that promises a far more reliable Internet of Things than many of the current operating systems being embedded into smart devices.

The Android smartphone system itself is bedevilled with dangerous apps running on outdated software and where BlackBerry hopes their PRIV handset can attract enterprise users conscious of the need to secure their employees’ devices.

For BlackBerry though, the PRIV being shipped with the Android operating system is a capitulation to the smartphone market’s stark reality where there is only demand for two products and outside players like BlackBerry or Windows are destined to wither away.

While the PRIV is a nice, albeit expensive, phone and the slide out physical keyboard is nice to use, the device seems to be a desperate attempt by the company to stay in the smartphone market.

As an outside observer it’s hard to see the justification for BlackBerry continuing as a phone manufacturer, there may be some intellectual property value from the development of the devices – although it should be noted the company only valued its IP assets at $906 million in November 2015.

While the PRIV is a perfectly good Android phone it will probably be the last smartphone BlackBerry makes, the challenge for the company’s management now is to tie together the software assets it has into a compelling suite of products for the enterprise sector.

In an age where devices of all types are going to be connected, the market for ensuring their security should be huge. Catering to that market should be BlackBerry’s greatest hope of survival.

Planning a business succession

Dealing with management succession can be struggle for many companies

What happens when your Managing Director of five years standing announces he’s decided to move on?

This was something Xero’s senior management had to deal with when Chris Ridd, the company’s Managing Director for Australia, announced that after five years he had decided to move on.

In interviewing Chris and his successor, Trent Innes, last week for The Australian it was striking just how well the succession process had gone for Xero in dealing with the management change, “It has worked out well, it was our preference to go with an internal candidate,” the outgoing GM told me. “From my perspective it’s always good when you can do that but it doesn’t always work out that way.”

Much of this comes down to Chris putting together a cohesive management team, something he’s quite proud of, “Xero has a huge bench, we have a really talented leadership team. I feel really good about leaving now given that the business has gone from six staff to 295 people, three and a half thousand customers to 265,000.”

“I achieved way more than what I thought I’d be able to do in that role and after five years it seemed like the right time frame to go into something else,” he continued.

Part of his confidence in moving on was his confidence in his successor, “Trent and I go back twelve years at Microsoft,” he told me.

The other part of his confidence was that the company has a clearly defined strategy and business plan that neither he or Trent see changing.

Many companies struggle with changing their senior management and much of that is because the board and executives are in denial that people – even those at the top – will move on to new ventures.

A stable management team, a solid business plan and a realistic view about leadership succession are the keys to successfully managing a change at the top, so far it looks like Xero have managed to pull off a change that many other struggle with.

Taking responsibility for algorithms

In a smart connected world awry algorithms pose a number of risks. What should regulators do?

Who is responsible for the effect of renegade computer programs is going to become a serious legal topic as an increasing number of things become ‘intelligent” and connected to the internet.

Britain’s Financial Conduct Authority (FCA) is one of the first regulators to start looking at how companies’ algorithms. In their just released rules for wholesale traders, the FCA sets out the responsibilities for companies and their managers.

“We are determined to embed a culture of personal responsibility within the banking sector,” says the FCA’s Acting Chief Executive Tracey McDermott. “Clear individual accountability should focus minds, drive up standards, and make firms easier to run and to supervise. And if things go wrong, it will allow senior managers to be held to account for misconduct that falls within their area of responsibility.”

The definition of ‘misconduct’ when an algorithm goes awry will undoubtedly prove contentious, as will the idea of ‘personal responsibility’ in the banking sector.

While it’s too tempting to be dismissive of such move in the financial services industry, the FCA’s regulations are a pointer of what most industries are going to face over the next ten years as the more devices make decisions for themselves or communicate with other equipment over the Internet of Things.

In many areas the question of who is responsible for a rogue computer program will be left to the uncertainties of the legal system with no doubt many surprises, injustices, inconsistencies and unintended consequences so the earlier regulators develop a framework for dealing with mishaps the better.

Should the IoT start delivering on its promise of a connected world a poorly designed algorithm in even what should be relatively trivial devices or services may have the potential to cause massive disruption and damage. It’s hard not to imagine many other regulators in other industries are looking at how to attribute responsibilities, if not minimise risk, in a smart connected world.

Cloudy times for the tech workforce

Autodesk’s firing of ten percent of its workforce indicates some harsh times are coming for tech workers.

For listed tech companies 2016 has been a bloodbath to date however design company Autodesk seems to have bucked the trend.

The key to keeping investors happy seems to lie in announcing major layoffs, in Autodesk’s case ten percent of its workforce which equates to 950 workers.

Autodesk’s management are painting those layoffs as being due to the company’s transition to cloud services with online subscriptions making up over half the business’ revenue.

Regardless of how valid that reasoning is, the message to the tech workers is clear; more tough times are coming.

With investors ruthlessly expecting better profits, focused leadership and leaner workforces many managers are going to have to face some tough decisions in what’s looking like a difficult year.

China’s rocky economic pivot

China’s workforce problems shows an economic pivot is rarely smooth.

As the Chinese economy adjusts to new economic realities, some of the costs are beginning to be felt.

In China’s North-East where the economy is dominated by state owned enterprises in staid heavy industries, workers are moving to more promising regions and local leaders are worried.

However with the Chinese economy pivoting, things aren’t doing so well in the more laissez-faire South Eastern provinces either with workers giving up their precious New Year’s holidays to protest unpaid wages and unfair treatment.

For the Chinese government, this worker unrest is a serious problem. How the country’s leaders try to address the causes could well have global ramifications as the world’s economy faces the reality of massive economic overcapacity.

Out of the box thinking is needed, but it may not be enough to overcome the fears and needs of ordinary, angry workers. What is clear is that an economic pivot is never smooth.

Playing with shining things

Playing with shiny things is nothing new

“I was like a boy playing on the sea-shore, and diverting myself now and then finding a smoother pebble or a prettier shell than ordinary, whilst the great ocean of truth lay all undiscovered before me” –
Memoirs of the life writings, and discoveries of Sir Isaac Newton

Don’t mess with Elon Musk

Elon Musk shows the power of being the boss

Criticise Tesla’s launch parties and your car order may be cancelled, reports The Guardian.

Stewart Alsop, an Californian venture capitalist, wrote an open letter to Tesla’s founder Elon Musk claiming the launch of the Tesla X was ‘a disgrace’.

Musk responded by cancelling Alsop’s Tesla order.

There’s a range of arguments about the customer always being correct, the customer’s right to criticise a product or the risks of making online comments but what it definitively shows is the power of being the seller of something people want.

I suspect Stewart Alsop will get his Tesla eventually, but the boss will make him squirm.