Paul Wallbank – Brilliant Communications

Tag: business

  • Are startups like 19th Century railway companies

    Are startups like 19th Century railway companies

    Are today’s tech unicorns like the 19th Century railway companies? Massive consumers of capital and ultimately transformative technologies but never in themselves particularly profitable?

    In the 1840s Britain was gripped by a railway investment mania which saw 10,000km of railroads built in 1846 alone, the current network extends 18,000km.

    Eventually the bubble popped after the Bank of England raised interest rates, something that should focus the minds of many of today’s investors.

    The UK railway boom left a legacy of valuable infrastructure across Britain, Europe and the Americas, perhaps we’ll see a similar legacy from today’s boom.

     

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  • Twitter’s search for meaning

    Twitter’s search for meaning

    New York Times writer Nick Bilton delves into Twitter’s search for a new CEO and comes up with a left of field conclusion – the company doesn’t actually know what it is.

    Twitter has certainly been casting around to define itself, particularly after its stock market listing that saw it valued at over twenty billion dollars.

    Bilton flags one reason why management is so uncertain about their company’s identity, that it’s directors don’t use the service themselves.

    As I see it, the problems at Twitter come down to a lack of leadership and a micromanaging board.

    And the churn is constant: many of its founders, chief executives, numerous product directors and other top brass have been fired or pushed out. Three of the eight positions on the current board belong to Mr. Dorsey and the former chief executives. About half of the board barely tweets.

    The lack of social media credibility on the board raises another issue about how much direct industry expertise should a company’s directors have. While it’s almost certainly not desirable to have insiders dominate a board certainly some, if not the majority, of directors should have some experience in the industries the company operates in.

    For Twitter though they desperately need to define the business and what its valuation really is. Even more pressing is to show how the platform differs from Facebook as the confusion of investors, users and advertisers isn’t helping.

    Ultimately as Bilton suggests the direction of a business is determined by the board, it’s time Twitter found at least a few directors who at least use social media, if not have some understanding and experience in the business.

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  • A generation free of poverty and labor

    A generation free of poverty and labor

    How will the future workforce look? A report by Australia’s Committee for Economic Development seeks to give a picture of how employment might look at the end of next decade.

    Australia’s Future Workforce is a weighty tome covering the current structure of the nation’s economy, its trends and the factors affecting employment over the next two decades.

    The report makes it clear the economy will be very different observing 40 per cent of Australia’s workforce, more than five million people, is likely be replaced by automation over the next twenty years.

    In the opening chapter, Reshaping Work for the Future, Professor Lynda Gratton of the London Business School describes the share of the future workforce where roles are more specialised and automation increasingly takes over less complex jobs.

    An important aspect Professor Gratton also flags is the aging population which in a rapidly changing economy will require frequent retraining.

    From a technology perspective Professor Hugh Bradlow, the Chief Scientist of Telstra, suggests the workforce will be more mobile and employed in fields less amenable to computerisation involving skills like social intelligence, creative talents and social intelligence.

    Those without those skills are deeply at risk with Bradlow being the first in the report to cite the likelihood that two fifths of the workforce are at risk of losing their jobs.

    Bradlow concludes his analysis with the observation that if we work to satisfy our basic needs then machines looking after these requirements free up the workforce to address higher intellectual pursuits.

    Rethinking management

    Belinda Tee and Jessica Xu, both of IBM, agree with Bradlow that technologies like IBM Watson will help skilled workers like doctors and teachers deliver their services more efficiently.

    Xu and Tee suggest change in the workforce will need to start at the top with managers needing to enhance collaboration within the organisations and build diverse teams working on open data.

    A two speed economy

    How the effects are distributed across the workforce is probably one of the most important aspects of this report with a team from the soon to be abolished National ICT Australia mapping the regions that will be most affected by automation.

    The news for many of the country’s regions is not good with the survey finding workers in most areas have more than a fifty percent chance of losing their jobs to automation.

    NICTA’s bad news for the regions ties into a recent PwC report that found Australia’s economic power has been increasingly concentrated in the nation’s capital cities.

    A mixed future

    In many respects the CEDA report is disappointing, while it flags many of the issues facing today’s workforce and the forces shaping it, the survey doesn’t identify the industries and occupations likely to benefit.

    Despite not stating the growth sectors, the report’s overall view of the future workplace is optimistic as Telstra’s Hugh Bradlow says: “The change could result in a new generation free of poverty and the burden of labor, thereby unleashing the next wave of human innovation and creativity in directions we can never imagine.”

    This may be the case but the to achieve that will require, as the report later suggests, a new social compact.

    It’s building that new social compact which could be the greatest task ahead of us.

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  • The Chinese sock fallacy

    The Chinese sock fallacy

    “We have an addressable market of four hundred million dollars a year. It’s a huge opportunity and we could win half of it.”

    The business manager speaking – who we’ll call John – was talking about the potential market for his company’s small business product that promises to earn around two hundred dollars a year.

    How John came to the four hundred million dollar number was simple. He multiplied the two hundred dollars by the two million small businesses in Australia.

    John had fallen for the ‘Chinese sock fallacy’ where a simplistic assumption creates the illusion of a huge market. The idea being that there are a billion people in China all of whom will own five pairs of socks so therefore there’s demand for five billion pairs of socks.

    The key part of the fallacy is not knowing whether those billion Chinese or two million Aussie small businesses want your socks or cloud computing services.

    Other complications include who are the incumbents currently selling to that market, how many pairs of socks do most Chinese people own, how often do they replace them and what do they pay for a new set?

    Suddenly things get complex and the assumptions don’t look so promising as we find with John’s projection of his market.

    Looking at the figures for Australia’s small business sector with 61 percent of enterprises having no employees, it’s hard not to conclude most are contractors or consultants who mostly don’t need John’s cloud service.

    So the Chinese sock fallacy strikes again.

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  • Rewriting the Silicon Valley playbook

    Rewriting the Silicon Valley playbook

    Silicon Valley’s lean startup model may not be relevant to most regions warns writer and entrepreneur Steve Blank.

    The lean startup model is based on getting the minimum viable product into the marketplace and should users be enthusiastic seeking investor funding to develop the business further.

    Guy Kawasaki described this in an interview last year where he described the minimum viable valuable product idea of getting the most basic service to market at the lowest cost and then getting users and investors on board.

    However it might be that model only works where “startup entrepreneurs have full access to eager and intelligent business customers, hosts of industry angels and venture capitalists with money to burn,” reports Canada’s Financial Post.

    Blank came to that conclusion on a trip to Australia where he met with sports tech startups: “Meeting with a coalition of entrepreneurs in the tech and sports space, he realized the lean startup framework didn’t account for the vagaries of local economies. Australia sports-tech entrepreneurs trying to scale their businesses would find that their major customers are in the U.S., halfway around the world. And unlike most Valley startups, the Aussies would need to source manufacturing expertise — which means budgeting for several trips to China.

    The problems facing Australia’s entrepreneurs probably extend further as the nation’s investors are notorious risk averse and the high cost of doing living means the burn rates for startups are much harder.

    Blank’s recommendation is any region looking at establishing a startup community should identify its own strengths and advantages then build its own playbook.

    That it’s difficult for other regions to copy Silicon Valley shouldn’t be surprising, since the start of civilisation each industrial or trade hub has risen and fallen on its own strengths and weaknesses.

    We can be sure the next Silicon Valley – be it in the US, China, Europe or anywhere else in the world – will have different strengths than the Bay Area today.

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