Category: business advice

What’s next for small business – trends in the modern workplace

What are the technology trends affecting businesses of all sizes?

This week’s The Future is now – Trends in the Modern Workplace webinar was an opportunity to look at the trends affecting small and micro businesses.

What’s notable is almost all the topics affecting small business are being felt by their corporate cousins. It shouldn’t be surprising the technology and social trends affecting society are equally being felt

Now the webinar is over, I’ve posted the presentation to Slideshare with the commentary below, we cover established trends like the shift to mobile then ponder the future of business with artificial intelligence and virtual reality.

The presentation ties up with the post I published a few days ago that provides the commentary to the slides.

Lessons from the CIA investment fund

Dawn Meyerriecks, the CIA’s Deputy Director for Science and Technology, gives an interesting insight into the agency’s investment philosophies

One of the little discussed reasons for the US tech industry’s success is the role of military and intelligence spending by the government. Not only are various agencies funding research and enthusiastically buy technology, they are also being strategic investors in many companies.

In Sydney last week Dawn Meyerriecks, the CIA’s Deputy Director for Science and Technology, gave an interesting insight into the agency’s investment philosophies at the SINET61 conference.

The conference was aimed at drumming up interest in the technology security industry along with showcasing the connections between Australia’s Data61 venture and the US based Security Innovation Network (SINET).

SINET itself is closely linked to the United States’ security agencies with chairman and founder Robert Rodriguez being a former US Secret Service agent prior to his move into security consulting, venture capitalism and network-building.

Compounding the organisation’s spook credentials are its support from the US Department of Homeland Security along with the UK’s Government Communications Headquarters (GCHQ), so it was barely surprising the Australian conference was able to attract a senior Central Intelligence Agency officer.

Investing in flat times

“Flat is the new up,” says  Meyerriecks in describing the current investment climate of thin returns. In that environment, fund managers are looking for good investments and the imprimatur of the CIA’s investment arm, In-Q-Tel, is proving to be a good indicator that a business is likely to realise good returns.

“If you can predict a market – and we are good predictors of markets – then the return on investment is huge,” she says.

“In-Q-Tel really leverages capital funding for good ideas. We get a twelve for one return, for every dollar we put in it’s matched by twelve dollars in venture capital in emerging technologies.”

Attracting investors

For the companies In-Q-Tel invests in along with those that supply technology to the organization, the CIA encourages them to seek private sector investors.

“What we’re telling our supply chains is you go ahead and tap into the capital markets,” Meyerriecks says. “If you can turn that into a commercially viable product then will will ride the way with the rest of the industry because it’s good for us, it’s good for the country and it’s good for the planet.”

Adding to the CIA’s attractions as a startup investor are the opportunities for lucrative acquisition exits for the founders, she believes. “Not only are we using that venture capital approach for emerging technologies but our big suppliers are sitting on a ton of cash.”

Diversity as an asset

Another lesson that Meyerriecks believes will help the planet, and the tech industry, is diversity. “Globalisation has show isolationism doesn’t work,” she says.

“Back in the day when I was a young engineer the best way to make sure your system was resilient was to harden its perimeters. the best ways to be ‘cyber resilient in the old days was by drawing the barriers to keep the bad guys out.”

“The best way to be cyber-resilient in the old days was to draw big boundaries around yourself to keep the bad guys out. The latest studies look at other things because you want to be resilient, you want high availability.”

Now, system diversity is seen as an asset.“Biologically the three factors that contribute to resilience are the ability to adapt, the ability to recovery and diversity,”  Meyerriecks says. “We look to deliver high availability among components that may not themselves have high reliability.”

The future of investment

“I think we’ll see commercialisation still driving investment for applied R&D in particular,”Meyerriecks said in a later panel on where the agency is looking at putting its money.

“The big game changers will be around the edge, taking SDN (Software Defined Networking) to its logical extreme giving everyone their own personal networks, not just in data centres but at the edge of the network.”

“I think there’s lots of things that the commercial industrialisation of the technology and physical system are going to force us to grapple with on many levels.”

Risks in managing identity

An interesting aspect of Meyerriecks’ talks at SINET61 was her take on some of the technology issues facing consumers and citizens, particularly in the idea for individuals having their own personalised network.

“This opens up a whole range of things, ” she suggests. “Do I eventually not just be an IMSI or EIMI (the mobile telephone identifiers) but do I become an advertising node, does that become my unique ID? Do I a become a gaming avatar?”

“Then we get into the whole Big Data area. Computational anonymity is a phrase we use. At some point people start saying ‘this is crossing the line’ – it crosses the ‘ooooh’ factor.”

Changing Cybersecurity

“I think the definition of cybersecurity will be expanded to much more beyond wheat we’ve classically thought about in the past.”

Meyerriecks’ presentation and later panel appearance was a fascinating glimpse into the commercial imperatives of the United States’ intelligence community along with flagging some of the areas which concern its members as citizens and technology users.

The US security community’s role in the development of the nation’s tech sector shouldn’t be understated and Meyerriecks’ observation that private sector investors tend to follow the CIA’s investment path underscores their continued critical role.

The limits of how governments can help startup businesses

The City of Sydney elections illustrate how limited governments are in promoting a region’s startup sector.

Over this week I’ve been posting a series of interviews with the candidates for this week’s Sydney Lord Mayoral election. All of the teams have interesting schemes and ideas on how they can improve the city’s profile as a global tech centre.

While each team’s plans are worthy, it’s worth asking exactly what governments can do to make their communities more attractive to businesses and whether short term subsidies and incentives can help.

There is some evidence they can, prior to San Francisco changing its tax rules the city took second place to Silicon Valley in the southern Bay Area. In the last ten years, the city has become the focal point for the tech industry.

However there is a counter argument that San Francisco benefited on a generational shift of lifestyle preferences away from the leafy suburban lifestyles of Palo Alto and San Jose to the grungy but walkable communities of the Mission and SOMA.

The Bay Area though is a special case, Silicon Valley’s success as a tech hub is based upon massive Cold War tech spending that drove the region’s industry and its that high level support that probably tells us more about government support.

In the case of London and Singapore, the successes have been due to the national governments putting in broader economic reforms and incentives. Also their proximity to Europe and East Asia respectively has made both cities attractive.

On balance it’s those broader economic factors that make regions attractive as industries clusters – local incentives count little compared to access to factors like markets, capital and skilled labour. Taxation is, at best, a secondary issue.

The biggest challenge for Sydney, and most Australian cities, is the the crippling cost of property. In 2013, staff.com released a survey showing Sydney to be second only to Zurich in the cost of establishing a startup.

In many respects, the cost of property doesn’t really matter to prosperous industry hubs – San Francisco, London, Singapore and New York are all eye wateringly expensive and yet they still thrive – however all of those cities have better access to capital and markets, if not labour, than Sydney.

Addressing Sydney’s chronic shortage of affordable accomodation is firmly in the state and Federal governments’ remit and beyond giving property developers a green light to build high rise apartments neither level of government has shown any interest in addressing it.

Similarly, the tax structures which penalise Australian employees of high growth businesses and dissuade investment in early stage ventures are totally the responsibility of the Federal government and it’s hard to see that changing in the term of the current dysfunctional administration.

The relative powerlessness of local governments leaves initiatives by the City of Sydney limited in scope and schemes to promote the city or offer incubator space are peripheral to the factors that encourage the development of a global industrial centre.

Ultimately though, the question has to be how much any government can do to create a Silicon Valley, factors such as labour availability and access to capital come down as much to the community’s attitudes and business’ risk tolerances.

So perhaps we focus on what governments can do for business. Maybe just providing a level playing field can be the best we can hope for.

Digital businesses’ lost tribe of managers

Business leaders are struggling to understand their digital strategies, Forrester reports.

Are senior executives lost when discussing their company’s digital strategy?

At the Huawei Connect conference this morning in Shanghai, Nigel Fenwick, a Vice President and principle analyst of Forrester Consulting, released his company’s study titled Business and Technology Leadership in a Post Digital Era.

Forrester surveyed 212 IT and business managers across selected markets in North America, Europe and the Asia-Pacific for the survey and found only four percent of business leaders were confident they understood their companies’ digital strategy.

Even more worryingly less than ten percent of business IT leaders claimed they understood their organisation’s digital strategies.

The reason for this, Fenwick believes, is the pace of change in the technology sector as managers struggle to put digital innovations into the context of the business.

Exacerbating this lack of understanding is how companies are ‘bolting on’ digital strategies to their existing business models rather than thinking about how their industries, products and markets are being transformed, Fenwick says.

There’s little new or surprising in Forrester’s report and the small and selective data set doesn’t inspire confidence in the survey’s results. It is however a good reminder of the challenges facing today’s boards and executives in understanding the consequences of a rapidly changing economy on their businesses.

Forget eliminating risk

We can’t eliminate risk, but we should manage it recommends Huawei’s chief security officer

“How are you going to manage, not stop, risk?” Asked John Suffolk, the Global Cyber Security & Privacy Officer of Huawei Technologies at the company’s ICT roadshow in Sydney today.

Suffolk’s message is one that should be heeded by all business owners, managers and executives in areas more than just IT security.

One of the conceits of the late Twentieth Century management philosophies is that risk could be managed out of business, partly through technology but mainly through legalisms that attempted to push liabilities onto suppliers, contractors, resellers and customers.

That philosophy still holds true in many organisations today, particularly government agencies, and it costs them dearly.

In truth, business is risky and trying to eliminate risk is a fool’s errand. How it’s managed is the real test for leaders.

IBM and the era of cognitive computing

IBM CEO Ginni Rometti describes the future of business being cognitive computing – but will her customers be part of that future?

“If you’re digital now, you’ll be cognitive tomorrow” says Ginni Rometti, the head of IBM.

Rometti was talking at the Sydney IBM Think forum today where she laid out the vision of IBM’s role in the data rich organisation of the future,

IBM’s pitch is that services like their Watson artificial intelligence platform is a key part of business as companies try to differentiate themselves in the new economy.

While Rometti’s view is correct, the question is whether IBM are the company to do this. The audience in Sydney were largely incumbent corporations and government agencies, it was almost sad that some of the panelists citing their digital smarts were from Australian businesses that have been tragically leaden in responding to changes to their markets over the last two decades.

In the first panel Rometti was joined by Andrew Thorburn and Richard Umbers the respective CEOs of the National Australia Bank and the Myer department store chain.

Thornburn’s comments about NAB being an agile fintech company were somewhat at odds with the reality of Australia’s housing addicted banking sector but Umbers’ view that Myer is leading the way in customer experience is almost laughable given how his company has missed almost every development in retail over the past twenty years.

Leaden corporations are Rometti’s core customers however – it still remains true that no-one at companies like Myer and NAB gets sacked for buying IBM.

“We’ve been part of your past, and I hope we can be part of your future” was Rometti’s conclusion of her keynote. It remains to be seen whether her customers are part of the future.

Five technologies likely to change business

Brian Blau, Vice President of Gartner, discusses the five technologies likely to change business including VR, AR and wearables.

What are the technologies that will change business over the coming years? During Gartner’s Business Transformation & Process Management Summit in Sydney on Tuesday, we had the opportunity to talk to Brian Blau, the company’s Vice President of Research, about what he sees as the five technologies that are most likely to change business.

Brian himself brings a lot of experience with emerging technologies, while he’s currently Gartner’s leading Apple analyst and specialises in consumer and mobile & Wireless technologies he spent the previous twenty years working in the virtual reality field which gives him an informed perspective on the many of the current popular tech buzzwords.

Talking to Blau in the busy analysts room at the Sydney Hilton, he kept reaching into his bad to show off his collection of the latest gizmos ranging from VR headsets through to smartwatches and fitness trackers, showing his enthusiasm for the field he covers.

Augmented and Virtual Reality

“It’s been a long time coming, I had twenty years in AR/VR and I’ve been an analyst for six and I’m glad I have that background,” says Blau.

Blau sees augmented and virtual reality tools altering the workplace dramatically as they change the experience for workers. The industries he sees being affected in the near future are sectors like field service, training and design.

Wearables

“Wearables are interesting devices,” Blau says. “You can almost think about them as transitory technologies so today there may be lightweight analytics about what employees do at work or what consumers do in public is kind of a stepping stone. If that device has a screen or some sort of interface on it, it becomes interactive.”

Blau cautions though that much of the data gathered from consumer wearable devices is far from reliable and while the quality of information improves there is still a way to go until we can depend upon these devices for life or mission critical tasks.

Virtual Personal Assistants

“These are combinations of hardware and software – Apple Siri, Microsoft Cortana or Amazon Alexa,” Blau states. “These Virtual Personal Assistants are having a big transformation, today they answer simple questions based on rules but in the future they are going to be hyper-smart.”

“Facebook, Apple and the rest of them have opened up their platforms to developers, we think this has applicability to all sorts of consumers and in the business domain we’re going to see these devices used in workplaces.”

Cameras and computer vision devices

“There are two advances that are happening, there are multi lens camera devices and the algorithms behind them are starting to decode what’s behind the image,” says Blau. “I think this is exciting technology as it’s an input that’s never been digital before.”

Blau sees the increasing sophistication of cameras and the software processing the images as finding important applications within the workplace, “there’s a lot of tasks around vision that are manually processed at the moment and computer vision is going to automate those.”

Personal IoT devices

“These are more about the workforce, the sensors that are in the work environment are those that people could bring to work, it overlaps with wearables.” Blau says, “the next generation of IoT devices are going to be much more personal.”

“Almost every business I talk to is very interested in virtual reality and wearables,” states Blau. “There is a high amount of interest because there’s a firm belief these devices will change workplace and consumer behaviours.”

For these devices to be adopted on a large scale, they will have to become more reliable Blau believes with the barriers currently being that most devices and their software are still at Minimum Viable Product stage.

Tips for the future

Blau advises businesses looking at these technologies should start with a basic belief that the specific technology will benefit their business, then they have to experiment and identify what the return on investment will be. “My main advice is to experiment with the technology, run a series of pilot programs, make sure you’re diverse in what you are looking and keep an open mind,” he says.

“The goal with these devices is to change behaviour,” Blau states. “The real challenge will be to get it right over time. You’ll have to reiterate time upon time.”

With these new technologies entering the business world, companies are going to face changes both within their workforces and in their markets. Being across the potential of these technologies is going to be essential for managers.

The quest to solve students’ problems

In the quest to solve students’ problems, Fluid Education’s Giorgio Doueihi set out on a winding path to provide solutions.

17 year old Giorgio Doueihi had a problem, his school had just rolled out a student diary app that was unusable. So Doueihi, who’d started coding at 13, decided he’d write a new one.

“I’d been dabbling with a bunch of projects at high school and I’d taught myself how to code,” Giorgio told Decoding the New Economy at Telstra’s Sydney Muru-D incubator.

That app was quickly adopted by his high school which had spent $100,000 developing the unusable system. Giorgio finished school, started university and Backpack, as his app became known, was accepted into Sydney University’s student INCUBATE startup program.

“I found out about INCUBATE and thought ‘I might just pitch this idea I had at high school’ then it kind of took a turn.”

Backpack became Fluid Education and Giorgio was accepted onto the Muru-D program, the product was doing well in the market and gaining customers when he decided to shut it down and move to a new product.

“Sales cycle was a large part of the pivot,” he explains. “Another part was that it had changed from a student orientated app to something more enterprise focused, something we were uncomfortable doing.”

So Fluid Education pivoted and is now a service for matching tutors to students and managing their appointment with the new platform about to come out of beta, “We’ve gone back to our roots,” Giorgio explains.

In many ways Giorgio Doueihi story is straight out of the startup textbook, he’s passionate, has identified a problem to solve and was agile enough to change the business’ course when he was unhappy with the direction.

Fluid education and Giorgio will be a very interesting story to follow over the next few years.

Entering an era of surpluses

Negative interest rates are part of a period of surplus resources that will test many businesses

With the global Zero Interest Rate Policy experiment failing, we’re now entering the era of negative interest rates with a quarter of the world’s central banks charging savers.

The world is flooded with money, but we also have surpluses in manufacturing, a surplus in most commodities, of energy and an increasing surplus of labor.

From Shanghai to Barcelona, the surplus of labor is beginning to be felt as industries become increasingly mechanised and the consequences of short sighted economic policies over the last thirty years begins to be felt.

That labor surplus is also driving the political shifts in Europe and North America as workforces are finding their living standards being pressured and their economic prospects dwindling. As a consequence, voters are looking for scapegoats – immigrants in Europe, the EU in Britain and Mexicans in the US.

Regardless of which scapegoat you choose to blame for the global economy’s uncertainty, the fact remains we are in a time where scarcity can’t be assumed.

This means business models that are based upon restricted supply are, in most sectors, under threat. The whole economics of scarcity becomes irrelevant when there are no shortage of suppliers around the globe.

In some fields, such as energy, technological change is seeing the dominant positions of oil companies, electricity generators and distributors being challenged in ways that wouldn’t have been thought possible a few years ago.

Even regulated industries where government licenses artificially controlled supply – like taxis, broadcasting and telecommunications – increasingly new distribution methods are changing the economics of those industries. No longer is buying a government license a sure fire way to big profits.

Right now, the imperative for businesses to find the areas where there is scarcity and supply constraints. For many industries that may be too difficult a transition.

Negative interest rates though take us into uncharted territory. How the global economy responds to virtually free and unlimited money is going to be an interesting experiment.

Don’t follow the normal route

It’s a good time to startup a business says Technology One’s Adrian DiMarco, just don’t follow the normal route.

Two years ago I interviewed Technology One founder and CEO Adrian DiMarco about his company’s pivot to the cloud and the gold rush among consultants and services providers looking at making money out of cloud computing services.

DiMarco’s founded Technology One in 1987 to compete in the enterprise software space with the likes of SAS and Oracle. At the peak of the dot com boom in 1999, DiMarco listed the company on the Australian stock exchange where it is one of the few genuine tech stocks on the nation’s finance and mining dominated bourse.

Given the focus on listed companies at the moment, DiMarco’s views are worth noting. “if I were to do it again, I’d don’t think I’d go that path,” he says about listing the business. “I have a real issue with how public companies run in Australia.”

DiMarco’s view is at odds with Netsuite’s Zach Nelson who told Decoding the New Economy last month how being on the stock exchange forces management to focus. “Managing a public company is a great discipline and in some ways gives us an advantage over non-public company who don’t have to have discipline and make good investments,” Nelson said.

In DiMarco’s opinion, the regulatory and ‘box ticketing’ requirements of a listed company don’t reflect the true performance of a corporation’s management. “There are mediocre CEOs walking away with millions,” he says.

While listing made sense for Technology One in 1999 those looking at starting a business today shouldn’t necessarily follow his path warns DiMarco, “tor startups these days, don’t follow up normal route.,” he says.

“I think the world’s your oyster to do want you want. Don’t let anyone talk you out of anything,” DiMarco says. “When we started out we were told ‘don’t build enterprise software’. We did and we succeeded.”

“Don’t be scared,” he advices. “It really is a great time to startup a business. The technology is redefining business. It’s a good time.”

Fearlessness and starting a business

Fearlessness is a key trait for business founders in any industry. It’s a quality that shouldn’t be overlooked.

“Just do it!” Almost every startup founder I interviewed for The Australian’s series on expat entrepreneurs had the same advice for budding entrepreneurs wanting to go global – don’t wait, just do it.

Peter Grant of Brisbane founded Safesite did though inject a slightly different view when he pointed out that it may not make sense for a company with a good domestic business to make the move, “If it’s going to be too complex or you already have a profitable business in Australia you may not need to come to the US, you have to be realistic about it. It might make sense to find a local partner.”

In Peter’s case though that move made sense. “We have a year on our competitors,” he notes.

Not being scared of making the move was part of a discussion I had with TechnologyOne founder Adrian DiMarco today, I’d previously interviewed Adrian for Business Spectator a few years back and it was good to hear his views on the current startup mania and the Australian innovation push.

One of the points DiMarco made was about not being scared when launching a venture, whether it’s the competition, the marketplace or the overall daunting task of running a business, being fearless is a key attribute to making the first steps, not just success.

That fearlessness is something that should be acknowledged about business founders, whether it’s a tech startup, dog walking service or donut franchise. Every single proprietor is taking a great leap.

The benefits of being public

Both the public cloud and a publicly listed company are good things for a business says Netsuite’s Zac Nelson.

Both the public cloud and a publicly listed company are good things for a business says Netsuite’s Zac Nelson.

“Managing a public company is a great discipline and in some ways gives us an advantage over non-public company who don’t have to have discipline and make good investments,” says Zac Nelson, the CEO of Netsuite.

Nelson was talking to Decoding the New Economy yesterday at the annual Suiteworld conference, Netsuite’s annual gathering in San Jose.

The CEO’s comments are in contrast to a common view that being publicly listed company distracts a company’s management from focusing on long term objectives, a sentiment Nelson rejects.

“In terms of managing a public company I think it’s an important discipline, I think a lot of people are opposed to these SOX (Sarbanes-Oxley) rules but when I look at these rules I think they are just common sense. Are you managing your business right? You want to have control of your business so you aren’t blindsided.”

Probably the biggest advocate of taking companies private is Michael Dell who took his eponymous business off the markets three years ago and is now looking at doing the same thing with EMC in what will be the biggest IT merger in history.

Dell going private

Nelson doesn’t think Dell going private was a mistake though, “I saw Larry Ellison say it was one of the greatest business moves in the history of man, I’ll agree with Larry – he’s usually right on that stuff,” he laughed.

“The thing I see Dell doing that I understand is they are giving their smaller division more autonomy. Dell Boomi is going back to being just Boomi and Secureworks just went public. Certainly from a structural standpoint and business model innovation that makes sense and it’s what I understand.”

As a public company, Netsuite does come under scrutiny and one of the criticisms is that it continues to post losses, something that Nelson puts down to the treatment of stock options. In the last earnings report, the company claimed capitalising stock options added $30 million in costs and not including them would see the company reporting an eight million dollar profit last quarter.

“We’re cash flow positive, we generate over $140 million in cash,” Nelson says. “People are happy with it, we’re still investing. What we’re investing in this year is different to the past, we’re investing in services to enable our customers to invest in product.”

Integrating the stack

One of the advantages Nelson sees that cloud based companies like his have are integrated systems, “the client server world created this perspective that dis-integrated systems actually work – you have Windows, you have third-party apps – but what really works well are integrated systems.” he says. “Look at the most common system you guys use, called Apple, it’s an integrated end-to-end system. Same with Amazon, that’s what we’ve built.”

“The detour we took in the client-server world is still being taken in the software world, a lot of software people believe you can compile this stuff and it will magically work. No, it doesn’t. Integrated systems work better.”

Securing the cloud

One area he specifically sees where cloud services have an advantage in being integrated is with security, “a problem that large enterprises have that we to some degree don’t have is we have one system, we have five data centers. You look at some of these large enterprises and some of them don’t even know where some of their data centres are. How on earth do you secure that environment? It’s not a product problem, it’s a process and IT management problem.”

Nelson’s comments on security are a swipe at competitors like SAP and Oracle who are often criticised for having disparate systems.

With Suiteworld moving to Las Vegas next year, it will be interesting to see who’s taking bets against cloud services like Netsuite. Certainly with salesmen like Zac Nelson, they’re able to tell a good story. The key though is to show some profits in the longer run.

Paul travelled to Suiteworld in San Jose as a guest of Netsuite.