February 3, 2020 | Financial Times | by John Thornhill.

*VC: An American History by Tom Nicholas.
* The worry for Silicon Valley is that the impulse for creative destruction is now fading
* It is easy to be rude about the venture capital industry. So here goes. The criticism runs that the VC sector is full of too many over-funded, ill-disciplined chancers who pass off hype for reality, groupthink for insight and luck for good judgment.....What’s more, a staggering 95 per cent of VC firms fail to make a decent enough return to justify the risks their investors run......the current mindset of the VC industry is responsible for the slowdown in new business formation and lack of economic dynamism in the US. All too often, addicted to capital-light, metric-heavy software businesses, VCs are failing to bet big enough on the breakthrough technologies that tackle our biggest challenges, such as climate change or cancer.........Katie Rae, chief executive and managing partner of The Engine, a Boston-based “tough tech” venture fund, says that many VCs have lost sight of their original purpose......VCs were all about funding tech breakthroughs but that has got lost,” ...... “A lot of VCs look more like private equity companies that do not want to lose any money so they end up backing dog-walking apps rather than quantum computing.”......Historically, the best venture capitalists have performed a vital capitalistic function: turning seemingly outlandish ideas and transformative technologies into everyday realities. Semiconductors, recombinant insulin and internet search engines have all come to market largely thanks to VC backing........“The VC industry is cut-throat. .....It provides the capital and expertise for start-ups to succeed.”.......In VC: An American History, Tom Nicholas traces VC’s high-risk, high-reward mentality back to the 19th-century whaling industry, which developed a novel form of venture financing. The idea was to back an expert captain who could fit out a robust ship, hire the best crew and endure an average of 3.6 years at sea. On landing a whale, the captain would return investors’ money several times over. But many ships returned empty-handed or sunk.........the pattern of financial returns made by Gideon Allen & Sons, the smartest backers of whaling ventures, were almost identical to those achieved by Sequoia Capital, one of the best VC firms operating today..........one of the striking features of the subsequent evolution of the VC industry.......was how contingent it was on time, circumstance and people. The west coast model of VC investing, owed an enormous amount to massive government investments in technology during the cold war, the expansion of world-beating universities in California and the emergence of some remarkable entrepreneurs and visionary investors, such as Arthur Rock, Tom Perkins and Don Valentine.......The worry for Silicon Valley is that some of that Schumpeterian impulse for creative destruction is now fading. One argument has it that Silicon Valley is becoming increasingly “corporatised” with Big Tech firms, such as Google, Facebook and Apple, championing the mantra that “big is beautiful” in the face of emerging competition from China.

The benign view is that Big Tech may be internalising much of the innovation once carried out by start-ups; the malign interpretation is that Cupertino, California [JCK: that is, "Big Tech"] is snuffing out smaller rivals.......

“Silicon Valley is overdue a disruption. It is not a hotbed of start-ups any more,” ..........Metaphorically, at least, the VC industry needs to get back in the business of funding wildly ambitious entrepreneurs intent on harpooning some more whales.

Jan. 29, 2020 | The New York Times | By Kara Swisher, Ms. Swisher covers technology and is a contributing opinion writer.

* “How Will You Measure Your Life?” by Clay Christensen.
* The Intel founder and chief executive Andy Grove was a fan. So was the Apple legend Steve Jobs. Both men were doubtlessly attracted to the idea that start-ups made up of outsiders could find ways to create new markets and new value — and disrupt and overwhelm established companies.
* Professor Christensen’s formula was elegant: “First, disruptive products are simpler and cheaper; they generally promise lower margins, not greater profits. Second, disruptive technologies typically are first commercialized in emerging or insignificant markets. And third, leading firms’ most profitable customers generally don’t want, and indeed initially can’t use, products based on disruptive technologies.”
* though no fault of Professor Christensen’s, disruptive innovation took a turn for the worse in tech. Silicon Valley failed to marry disruption with a concept of corporate responsibility, and growth at all costs became its motto. The more measured approach that Professor Christensen taught was ignored.
* “It’s easier to hold your principles 100 percent of the time than it is to hold them 98 percent of the time.”
* “In fact, how you allocate your own resources can make your life turn out to be exactly as you hope or very different from what you intend.”
* “Decide what you stand for. And then stand for it all the time.”

By Glenn Rifkin
Jan. 25, 2020

January 24, 2020 | Financial Times | by Andrew Hill

| Financial Times | John Gapper

Nov 21st 2019

Six years ago, Clayton Christensen of Harvard Business School warned that it was an industry “on the cusp of disruption”. Now that disruption is in full swing. According to Tom Rodenhauser of alm Intelligence, which analyses the industry, clients no longer just want to hire legions of people, however brainy they are. They want consultants to provide and install products, including new technologies, that transform them from top to bottom and keep disrupters at bay. Advice on strategy, which used to be meat and potatoes for firms like McKinsey and its peers, Bain and the Boston Consulting Group (bcg), is now a side dish; it accounts for about a tenth of revenues.

Mr Sneader could keep things ticking over as they are, at least for a while. Clients have shrugged off the media attention. McKinsey’s revenue has grown in recent years, to roughly $10bn. And the firm still attracts armies of aspiring candidates—last year 800,000 applied for 8,000 jobs. But he is making changes. McKinsey says it is “addressing the changing panorama both internally and externally”. Partly in response to the South Africa debacle, its standards and processes for selecting clients have been beefed up. Partners are discouraged from doing work for undemocratic governments.

McKinsey has also made advising on technology more integral to its business. It worked with 1,200 companies on digital and analytics issues last year. It creates and sells tools for companies to use in their businesses, which generates new sources of recurring revenues. And it has bought a dozen companies since 2011, including QuantumBlack, a British startup that developed advanced data analytics for Formula One. Nonetheless, industry-watchers say McKinsey is often outspent by the technology offerings of the Big Four, as well as by firms like Accenture.

Downsizing consultants
Mr Sneader should go further: that means getting leaner by ditching activities, clients and teams that bring in more headaches than cash, and investing in technology.

Oct. 7, 2019
The disruptive world
of Edward Norton.

By David Marchese Photograph by Mamadi Doumbouya

| Financial Times | John Thornhill

Aug 9, 2019 |WSJ | By Irving Wladawsky-Berger.

“Technological innovation should be embraced,” notes a recent report from the Aspen Institute, a public policy and research organization in Washington. “Automation has been a largely positive economic and social force, and looking forward, automation will be necessary to feed, house, and raise the living standards of a growing and aging population.”

Still, the short-term disruptive impact on individuals and communities can’t be overlooked, the report says.

To better assess automation’s impact, the Aspen Institute takes a two-pronged approach, identifying the challenges for American workers and suggesting solutions. Here is a summary of the findings:

Part I: The Case for Action

“Overall, it is difficult to anticipate every disruptive impact technology can have. But the use of technology to automate work is easier to predict than other impacts because automation is based on machines doing currently identifiable tasks," the report says. "For that reason, automation is the lens technologists, academics, and others use to project technology’s future impact on work, with the understanding that the actual disruptive impact of technology could be broader and more unpredictable.”

The Case for Action reached four major conclusions.

Automation boosts economic growth, creates jobs and improves living standards, but it also presents serious challenges for workers and communities. A number of recent studies have taken a close look at the future of work over the next 10 to 15 years. For example, a December 2017 report by McKinsey & Co. examined in great detail the work that’s likely to be displaced by automation through 2030, as well as the jobs that are likely to be created over the same period. The report concluded that a growing technology-based economy will create a significant number of new occupations that will more than offset declines in occupations displaced by automation. However, many workers will see their jobs change, as future jobs will require different skills.

Moreover, given the increasing importance of talent in our knowledge economy, global superstar firms and cities will continue to attract a disproportionate share of the most ambitious and talented people, presenting serious challenges for the workers and communities left behind.

Investments in education, training and the social safety net have helped mitigate automation’s negative impacts in the past. Technology has been replacing workers and improving productivity ever since the advent of the Industrial Revolution in the second half of the 18th century. In past technology-based economic revolutions, periods of creative destruction and high unemployment eventually subsided. Over time, these same disruptive technologies and innovations led to the transformation of the economy and the creation of new industries and new jobs.

“Investments in education, training, and the social safety net, along with a social contract between employers and workers that provided workplace benefits and protections, have helped mitigate automation’s negative impacts in the past and helped workers succeed in the changing economy,” the report says. These investments made it possible for a growing number of workers to achieve a middle class life-style and aspire to what we think of as the American way of life.

Recent challenges highlight the consequences of limited support for vulnerable workers. While we are hopeful that the country will once more adjust to technological disruptions, there’s no way of knowing for sure. “Today’s workers are especially vulnerable to the impacts of automation. Financial insecurity, an aging workforce, and falling geographic mobility, make it difficult for many to retrain and transition to new occupations following displacement.”

In addition, “Recent history has seen a reversal of efforts to support workers through economic disruption. Disinvestment in public and private sector training, a weakened public safety net, and reduced access to workplace benefits and protections have contributed to the slow and painful economic adjustment many workers and communities have experienced in recent decades.”

Artificial intelligence and other new technologies may lead to deeper, faster, broader and more disruptive automation. Technology is being increasingly applied to activities requiring cognitive capabilities and problem-solving intelligence that not long ago were viewed as the exclusive domain of humans. As powerful technologies like AI and robotics continue to advance, the impact of automation might well be deeper.

Part II: Policies for Shared Prosperity

The report’s second section outlines a concrete policy agenda to address four overarching objectives:

Encourage employers to lead a human-centric approach to automation. This includes expanding apprenticeships, worker-training tax credits and regional workforce partnerships; promoting new forms of worker participation in automation decisions; and introducing proactive strategies to identify and address potential issues.

Enable workers to access skills training, good jobs and new economic opportunities. This includes access to effective and affordable skills training, a system of lifelong learning, wage subsidies as necessary, and programs to promote entrepreneurship.

Help people and communities recover from displacements. Unemployed workers need to be supported through retraining, re-employment services and unemployment insurance. Governments should promote local and regional economic development through targeted strategies to help workers recover and transition and they should also invest in digital infrastructure.

Understand the impact of automation on the workforce. It is important to collect data and provide better information to key stakeholders so they can better anticipate the impact of automation on their industries, communities and occupations.

Irving Wladawsky-Berger worked at IBM for 37 years and has been a strategic adviser to Citigroup, HBO and Mastercard. He is affiliated with MIT and Imperial College, and is a regular contributor to CIO Journal.

July 27, 2019 | The Globe and Mail | by JAMES BRADSHAW BANKING REPORTER and TIM KILADZE

July 26, 2019 | The Globe and Mail | by JOHN RUFFOLO.

In August, 2011, technology legend Marc Andreessen wrote his seminal article titled Why Software Is Eating the World, which became the central investment thesis behind his venture capital firm Andreessen Horowitz. Andreessen’s prognostication has since followed Amara’s Law on the effect of technology, which aptly states: “We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.” [JCK: See also Andy Kessler's definition of S-Curves "Technology develops in S curves: Things start slow, go into hyperbolic growth, and then roll over. "] The feast has really just begun.

We are in the midst of the Fourth Industrial Revolution – or as some call it, the Information Revolution.....the Information Revolution really began to take shape in 2008, catalyzed by three incredibly powerful and converging forces – mobility-first, cloud computing and social media. All three forces collided together with full impact in 2008, spawning a wave of new technology companies.......The next phase of the Fourth Industrial Revolution will see the rise of a new species of company – the “disruptors.” While technology companies will continue to grow, we are witnessing the enablement of those technologies across all economic sectors as the leading weapon used by new entrants to disrupt the traditional incumbents in their respective industries. The massive influx of venture capital to support the building and growth of technology companies over the past 10 years has produced these tools, such as artificial intelligence, machine learning, and the internet of things, which are now being leveraged across all industries......Those companies that can harness these new technologies to operate better and faster, and to gain unmatched insights into their customers, will prosper. Although these disruptors are not technology companies in the conventional sense, their tight focus on value creation through innovation further blurs the lines between a technology company and a traditional company.

The incumbents, however, are not asleep at the wheel. To ward off the disruptors, they know they must embrace technology. It is this battleground that I believe will generate the greatest wealth creation and transfer opportunities over the next decade. The disruptors, naturally, are particularly active in those industries where they perceive the incumbents to be burdened by outdated technological infrastructure or business models, and hard-pressed to counterattack.

Yesterday, the disruptors focused primarily on consumer sectors such as the music industry, travel booking, newspapers, magazines and book publishing. Today, it’s groceries, entertainment and personal transportation, thanks to Amazon, Netflix and Uber, respectively.

But consumer-focused sectors were just the start for the disruptors. Before long, I believe we will see them try to disrupt varied industries such as banking, insurance, health care, real estate and even agriculture and mining; no industry will be immune. These sectors all represent emblematic Canadian brands, and yes, each will in turn will go through the same jarring disruption as so many others.
************************************************
See [Why It’s Not Enough Just to Be Disruptive - The New York Times
By JEREMY G. PHILIPS AUG. 10, 2016] Creating enormous value over the long term requires turning a tactical edge into some form of durable advantage....Superior tactical execution can still create real value, particularly where it provides ammunition for a bigger war (like Walmart’s battle with Amazon). And in the long term, value is created not by disruption, but by weaving together advantages (as both Amazon and Walmart have done in different ways) that together create a barrier that is hard to storm.

ELIO LUONGO
CONTRIBUTED TO THE GLOBE AND MAIL
PUBLISHED MAY 29, 2019

Both Canadian and global CEOs told us the environment, territorialism and disruptive technologies were their top three concerns.

For Canadian companies, lack of consensus on environmental issues weighs heavily given our disproportionate dependence on the resource sector. And with nearly a third of our gross domestic product tied to exports, growing trade differences with and between Canada’s two largest trade partners raises concerns about the continuing health of our economy.

While our leaders are carefully watching how these national and geopolitical issues pan out, they are putting their focus on technology. Almost two-thirds plan to increase investment in disruption detection and innovative processes – with the same number planning to collaborate with innovative startups.

But CEOs must also brace for the effects of automation and artificial intelligence on their work force. It comes down to culture, and three-quarters of CEOs say they want a culture in which failure in pursuit of innovation is tolerated. However, barely half say that it exists today.

May 5, 2019 | Financial Times | by Anna Nicolaou.

Maurice Levy: 'The future [of advertising] is based on data. It is not based on any mass media.' We know that mass media is [declining] every day,” “And if an advertising agency wants to have a future, data is absolutely indispensable.”

the advertising industry was undergoing a “metamorphosis” that required big bets.......As consumers shift attention away from pricey television commercials and towards the internet, where Facebook and Google dominate, the industry is more “math men” than mad men......In light of digital disruption Publicis, the world’s third-largest advertising agency by revenues, has made a big bet on data. In April the company made its largest acquisition with the purchase of Epsilon, a digital marketing company owned by Alliance Data Systems......Like its rivals WPP and Omnicom, Publicis is under pressure as Facebook and Google have disintermediated the traditional agency model. The two tech groups account for two-thirds of digital advertising sales in the US.....The industry has been consolidating as traditional agencies look to position themselves as data analytics gurus who can help brands target shoppers online. Last year Interpublic bought data business Acxiom for $2bn, while just last month buzzy agency Droga5 sold itself to Accenture......Despite lingering fears that an economic slowdown is looming, “the situation is much better now,”.... making the Epsilon decision easier. “The fastest-growing segment in our industry is data, technology, internet. Period. All the rest is suffering.”

April 21, 2019 | WSJ | By Heather Haddon.

Kroger adjusts operations and invests in technology to hang on to customers who avoid stores; ‘we’ve got to get our butts in gear

April 10, 2019 | Financial Times | Elizabeth Cobbs.

Alexander Hamilton, Horace Mann and Frances Perkins are linked by their emphasis on the importance of human learning.

In more and more industries, the low-skilled suffer declining pay and hours. McKinsey estimates that 60 per cent of occupations are at risk of partial or total automation. Workers spy disaster. Whether the middle class shrinks in the age of artificial intelligence depends less on machine learning than on human learning. Historical precedents help, especially...... the Hamilton-Mann-Perkins equation: innovation plus education, plus a social safety net, equals the sum of prosperity.

(1) Alexander Hamilton.
US founding father Alexander Hamilton was first to understand the relationship between: (a) the US's founding coincided with the industrial revolution and the need to grapple with technological disruption (In 1776, James Watts sold his first steam engine when the ink was still wet on the Declaration of Independence)-- Steam remade the world economically; and (b), America’s decolonisation remade the world politically......Hamilton believed that Fledgling countries needed robust economies. New technologies gave them an edge. Hamilton noted that England owed its progress to the mechanization of textile production.......Thomas Jefferson,on the other hand, argued that the US should remain pastoral: a free, virtuous nation exchanged raw materials for foreign goods. Farmers were “the chosen people”; factories promoted dependence and vice.....Hamilton disagreed. He thought colonies shouldn’t overpay foreigners for things they could produce themselves. Government should incentivise innovation, said his 1791 Report on the Subject of Manufactures. Otherwise citizens would resist change even when jobs ceased to provide sufficient income, deterred from making a “spontaneous transition to new pursuits”.......the U.S. Constitution empowered Congress to grant patents to anyone with a qualified application. America became a nation of tinkerers...Cyrus McCormick, son of a farmer, patented a mechanical reaper in 1834 that reduced the hands needed in farming. The US soared to become the world’s largest economy by 1890. Hamilton’s constant: nurture innovation.

(2) Horace Mann
America’s success gave rise to the idea that a free country needed free schools. The reformer Horace Mann, who never had more than six weeks of schooling in a year, started the Common School Movement, calling public schools “the greatest discovery made by man”.....Grammar schools spread across the US between the 1830s and 1880s. Reading, writing and arithmetic were the tools for success in industrialising economies. Towns offered children a no-cost education.......Americans achieved the world’s highest per capita income just as they became the world’s best-educated people. Mann’s constant: prioritise education.

(3) Frances Perkins
Jefferson was correct that industrial economies made people more interdependent. By 1920, more Americans lived in towns earning wages than on farms growing their own food. When the Great Depression drove unemployment to 25 per cent, the state took a third role....FDR recruited Frances Perkins, the longest serving labour secretary in US history, to rescue workers. Perkins led campaigns that established a minimum wage and maximum workweek. Most importantly, she chaired the committee that wrote the 1935 Social Security Act, creating a federal pension system and state unemployment insurance. Her achievements did not end the depression, but helped democracy weather it. Perkins’s constant: knit a safety net.

The world has ridden three swells of industrialisation occasioned by the harnessing of steam, electricity and computers. The next wave, brought to us by AI, towers over us. History shows that innovation, education and safety nets point the ship of state into the wave.

Progress is a variable. Hamilton, Mann and Perkins would each urge us to mind the constants in the historical equation.

Tim Bradshaw in London

March 14, 2019 | | Financial Times | by Pilita Clark.

Roger Mavity and Stephen Bayley, the design guru, have published "How to Steal Fire", ....a book on one of the most eagerly sought qualities in the business world: creativity. Companies buffeted by a storm of digital disruption and competitive pressures have embraced the need for creative thinking with gusto in recent years, which marks a turnaround......CEOs have talked ....about the importance of innovation (i.e. the implementation of new ideas), but far less attention has been devoted to figuring out how to foster creativity itself.....“The first thing that helps creativity is solitude,” “Creativity is essentially an individual rather than a collective activity.” Sir Isaac Newton was a case in point....The great thoughts that helped him go on to formulate the theory of gravity came after the Great Plague closed his university (Cambridge) and he spent nearly two years shut away in his home in Lincolnshire......When he was running Microsoft, Bill Gates used to head off by himself to a secluded hideaway twice a year for what he called Think Week.....Mavity says: “If you need to produce an idea, isolating yourself can be enormously beneficial.”......“How you do that in a big open-plan office with 100 other people trying to be creative at the same time?.......Solitude is in hopelessly short supply at a time when companies are captivated by the financial allure of the open-plan office and its evil twin, hot-desking. ....The idea that great creative thoughts come from teamwork, brainstorming and the ever-present away day is one of the “great myths” of creativity......the Ringelmann effect, named after a French engineer, Max Ringelmann, who first observed that individual productivity falls as group size increases. Away days can be useful for helping people get to know each other better, but not for generating ideas, said Mr Mavity. As his book puts it: “Brainstorming produces, at best, a light, irritating drizzle of complacent mediocrity.”....smart companies understand the need for focused concentration [JCK: sustained inquiry]...what should executives be doing to foster creativity?....“They have to walk the talk,” ....leaders need to set clear goals and then give people doing creative work the time, resources and autonomy to achieve them....Managers must be genuinely open to new thoughts and make sure good ideas are fostered. “None of it is rocket science or brain surgery,” “But you have to pay attention on a regular basis to whether people have these things.”

Feb. 9, 2019 | WSJ | By Christopher Mims.

In and around the city of Lakeland, Florida you’ll find operations from Amazon, DHL (for Ikea), Walmart , Rooms to Go, Medline and Publix, a huge Geico call center, the world’s largest wine-and-spirits distribution warehouse and local factories that produce natural and artificial flavors and, of all things, glitter.

Yet a recent report by the Brookings Institution, based on data from the U.S. Census Bureau and McKinsey & Co., argues that the economic good times for Lakeland could rapidly come to an end. Brookings placed it third on its list of metros that are most at risk of losing jobs because of the very same automation and artificial intelligence that make its factories, warehouses and offices so productive......As technology drives people out of the middle class, economists say, it’s pushing them in one of two directions. Those with the right skills or education graduate into a new technological elite. Everyone else falls into the ranks of the “precariat”—the precariously employed, a workforce in low-wage jobs with few benefits or protections, where roles change frequently as technology transforms the nature of work......One step in Southern Glazer’s warehouse still requires a significant number of low-skill workers: the final “pick” station where individual bottles are moved from bins to shipping containers. This machine-assisted, human-accomplished step is common to high-tech warehouses of every kind, whether they’re operated by Amazon or Alibaba. Which means that for millions of warehouse workers across the globe, the one thing standing between them and technological unemployment is their manual dexterity, not their minds.... “I think there will be a time when we have a ‘lights out’ warehouse, and cases will come in off trucks and nobody sees them again until they’re ready to be shipped to the customer,” says Mr. Flanary. “The technology is there. It’s just not quite cost-effective yet.”

January 18, 2019 | Financial Times | by Rana Foroohar 7 HOURS AGO.

Whitman has just launched Quibi, a $1bn start-up of which she is chief executive (entertainment mogul Jeffrey Katzenberg, her co-founder, is chairman). The venture, backed by a host of entertainment, tech and finance groups including 21st Century Fox, Viacom, Alibaba, Goldman Sachs and JPMorgan, has the lofty aim of becoming the Netflix of the mobile generation, offering high-quality, bite-sized video content for millennials (and the rest of us) hooked on smartphones......Whitman's experience has left her with plenty of advice for chief executives struggling with nearly every kind of disruption — technological, cultural and geopolitical. “I think every big business needs to be thinking, ‘Who’s coming to kill me?’ Where are the big markets that for regulatory reasons, or just because things are being done the way they always have been, disruption is likely? I’d say healthcare is one,” ...... a “Quibi”, is the new company’s “snackable” videos, designed to be consumed in increments of a few minutes....“You have all these in-between moments, and that’s what inspired the length of the content,” she says. “Very few people are watching long-form content on this device,” she says, holding up her iPhone. “They’re spending four to five hours a day on their phones, but they’re playing games, watching YouTube videos, checking social media, and surfing the internet. And although [people] pick up their phones hundreds of times a day, the average session length is 6.5 minutes.”.......Whitman’s hope is that just as people now binge on hour-long episodes of The Crown or House of Cards at home, they’ll do the same on their smartphone while in the doctor’s office, or commuting, or waiting for a meeting to start. As Whitman puts it, “every day you walk around with a little television in your pocket.” She and Katzenberg are betting that by the end of this year, we’ll spend some of our “in-between moments” watching micro-instalments of mobile movies produced by Oscar winning film-makers or stars ... interviewing other stars. ....The wind was at her back at eBay, where she became president and chief executive in 1998, presiding over a decade in which the company’s annual revenues grew from $4m to $8bn. “It’s hard to change consumer behaviour. We did that at eBay. We taught people how to buy in any auction format on the internet, how to send money 3,000 miles across the country and hope that you got the product.”

Quibi, she believes, doesn’t require that shift. “People are already watching a lot of videos on their phones. You just need to create a different experience.” She lays out how the company will optimise video for phones in ways that (she claims) will utterly change the viewing experience, and will leverage Katzenberg’s 40 years in the business.

..

January 14, 2019 | Financial Times | by John Thornhill.

Liad Itzhak, head of mobility at Here Technologies, is certainly planning on it. His parent company, majority owned by the German carmakers BMW, Audi, and Daimler, has created a “mobility marketplace” that aims to tackle the problems of fragmented transport services, including the ride-hailing companies. “We are here to disrupt the disrupters,” he says.

More than 500 service providers, with 1.4m vehicles, have joined Here’s mobility marketplace in 350 cities — although it is not yet operational everywhere. At the Consumer Electronics Show in Las Vegas last week, Mr Itzhak announced the expansion of the company’s services and the launch of its SoMo app.

Here’s model differs from traditional ride-hailing companies in two critical respects. First, it acts as a platform for all collaborative transport services, public or private, ranging from bike rentals to taxi firms to bus companies. It will recommend the optimal route for travelling from A to B, even if that means walking, rather than highlighting the one that generates the most revenue for any company. “We are the first and only one to create a neutral global mobility marketplace,” Mr Itzhak says.

Second, it is attempting to introduce a social networking element to transport services. Its SoMo, or social mobility, app will connect people who are going to the same destination at the same time for the same purpose. So, for example, parents taking their kids to football will be better able to co-ordinate travel.

8 Jan, 2018 | intotheminds | Posted By Pierre-Nicolas Schwab.

(1) https://www.restaurant-hospitality.com/operations/ubereats-nudges-operators-toward-virtual-restaurants
(2) https://www.theguardian.com/business/2017/oct/28/deliveroo-dark-kitchens-pop-up-feeding-the-city-london#img-3

ghost kitchen make perfect economic sense : margins are thin in the restaurant industry, driven by high employees-related costs, rent, expensive equipment and variability in demand. Setting up a restaurant is a bet with a 5 to 20-year time horizon depending on myriad factors : your positioning, the location, and many exogenous factors out of your control. Eliminating all those risks seems like a logical move :

how to make a restaurant less location-dependent ?
how to adapt quickly to demand ?
how to reduce fixed costs (renting and equipping a place) ?
The bright sides : 3 major advantages of ghost kitchens

**The 3 major advantages of ghost kitchens are their answers to the 3 problems listed above :

the restaurant is not location-dependant anymore. If there is an event likely to generate massive flow of potential customers, you can move
ghost kitchens can adapt quickly to demand : the standardized kitchen unit just has to be multipled, which is not possible with street food vans unless you own several of them (which brings us to the 3rd advantage).
ghost kitchens, because they are rented from online platforms like Uber Eats and Deliveroo, transfom fixed costs into variable ones. This is great to test your idea and is a cheap way to do market research and test traction on a market.

** The dark sides of Uber’s and Deliveroo’s ghost kitchens
1. Why would one still rent a place to operate a restaurant ?
Good question indeed. If all hurdles and risks of operating a brick-and-mortar restaurant can be removed, why would you still want to rent a place (fixed costs), buy the equipment (fixed costs), hire employees (fixed costs) and wait on patrons to come in (variable revenues) ? If a platform like Uber or Deliveroo can provide you with customers’ orders, the need to have a brick-and-mortar place would vanish.
But if every single restaurant owner adopts that posture, how will city centers look like on the long run ?

2. Dependence towards platforms
What happened with the hospitality sector may well happen on the middle-term in the restaurant industry too. Uber eats, Deliveroo have disrupted the way we consume food. This is a new societal change that is most to be felt in Europe (urban Americans use already to get food delivered to their homes, most restaurants in US cities proposing at home delivery) : it has become easier than ever to get food delivered at home.
If enough restaurant owners make a significant percentage of their revenues through those platforms, they will eventually become dependent on them and will struggle like hotels are now struggling with Booking.com. Using platforms is a wise strategy to grow revenues but it can also become a very dangerous one if your dependence to them increases.

November 28, 2018 | The Globe and Mail | GUY NICHOLSON.

early meetings and phone calls were casual conversations with a couple of landscape photographers who specialize in golf.

The very nature of their business had changed fundamentally...After the Internet disrupted print magazines and media, they recast themselves as digital marketers, selling online rights to images created with high-tech arrays of digital cameras, drones and processing software. But even while embracing technology to take their work to new artistic heights, there were dramatically fewer places left for golfers to come across this art in print......Had their little corner of publishing been so thoroughly disrupted and abandoned that it now had more demand than supply? .....Technological innovation can be extremely disruptive and painful – and in the digital era, capable of changing entire industries seemingly overnight. But when creative destruction puts good things in peril, slivers of opportunity can emerge. After the masses and the smart money have flocked to newer technologies, formerly ultra-competitive spaces can be left wide open for innovation – abandoned fields for small businesses, start-ups and niche players to occupy.

It helps to offer a level of quality or service the bigger players consider uneconomical. Look at the travel industry, which has been thoroughly remade under waves of innovation: cellphones, digital cameras, GPS, Google Maps. Between internet comparison shopping and Airbnb, travel agents could have gone the way of the traveller’s cheque. But in the wake of all that disruption, tiny bespoke agencies specializing in advice, unique experiences, complicated itineraries and group travel have re-emerged to offer services too niche for the big digital players.....Similar things are happening in industries such as gaming, where video games have cleared the way for board-game cafes, and vinyl music, which survived the onslaught of MP3s and streaming music on the strength of nostalgia, millennial fascination and sound quality. As the rest of the industry moved into digital, neighbourhood record stores and small manufacturers picked up the pieces, catering to an enthusiastic subset of music buyers.

“We were growing very rapidly, not because vinyl was growing, but because a lot of pressing plants were going out of business,” Ton Vermeulen, a Dutch DJ and artist manager who bought a former Sony record plant in 1998, told Toronto journalist David Sax in his 2016 book The Revenge of Analog. Vinyl is back in the mainstream, but its disruption cleared the field for smaller players.

Abandoned fields aren’t for everyone. Building a business around an off-trend service or product can be a tough slog (jck: hard work)for fledgling businesses and entrepreneurs, and risky. In the case of the golf photographers, two dozen artists signed up to create a high-end subscription magazine. It’s beautiful, but with two years of work riding on a four-week Kickstarter campaign, there’s no guarantee this particular field will prove to have been worth reclaiming.

Of course, risk has always been part of small business. But a market waiting to be served – that’s a precious thing. As long as there is disruption, it will create opportunities for small businesses to reoccupy abandoned fields

Emiko Terazono in Wageningen

Sept. 20, 2018 | WSJ | By Christopher Mims.

Amazon.com Inc. has made its Prime program the gold standard for all other online retailers... The $119-a-year Prime program—which now includes more than 100 million members world-wide—has triggered an arms race among the largest retailers, and turned many smaller sellers into remoras who cling for life to the bigger fish.

In the past year, Target Corp. , Walmart Inc. and many vendors on Google Express have all started offering “free” two-day delivery. (Different vendors have different requirements for no-fee shipping, whether it’s order size or loyalty-club membership.)

Amazon and its competitors are often blamed for the death of bricks-and-mortar retail, but the irony is that these online retailers generally achieve fast shipping by investing in real estate—in the form of warehouses rather than stores. To compete on cost, the vendors must typically ship goods via ground transportation, not faster-but-pricier air. The latest to offer free two-day delivery is Overstock.com , which claims it can reach over 99% of the U.S. in that time frame from a single distribution center in Kansas City, Kan.

But the biggest online retailers aren’t the only ones building massive fulfillment centers and similar operations. Fulfillment startups and large companies from other sectors are hoping to scale up by luring smaller sellers who want alternatives to Amazon’s warehousing and delivery operations.

August 6, 2018 | | Financial Times | Tim Harford

.....Organisations from newspapers to oil majors to computing giants have persistently struggled to embrace new technological opportunities, or recognise new technological threats, even when the threats are mortal or the opportunities are golden. Why do some ideas slip out of the grasp of incumbents, then thrive in the hands of upstarts?.....“Disruption describes what happens when firms fail because they keep making the kinds of choices that made them successful,” says Joshua Gans, an economist at the Rotman School of Management in Toronto and author of The Disruption Dilemma. Successful organisations stick to their once-triumphant strategies, even as the world changes around them. More horses! More forage!

Why does this happen? Easily the most famous explanation comes from Clayton Christensen of Harvard Business School. Christensen’s 1997 book, The Innovator’s Dilemma, told a compelling story about how new technologies creep up from below: they are flawed or under-developed at first, so do not appeal to existing customers. Holiday snappers do not want to buy digital cameras the size of a shoebox and the price of a car.

However, Christensen explains, these technologies do find customers: people with unusual needs previously unserved by the incumbent players. The new technology gets better and, one day, the incumbent wakes up to discover that an upstart challenger has several years’ head start — and once-loyal customers have jumped ship.
............Within academia, Rebecca Henderson’s ideas about architectural innovation are widely cited, and she is one of only two academics at Harvard Business School to hold the rank of university professor. The casual observer of business theories, however, is far more likely to have heard of Clayton Christensen, one of the most famous management gurus on the planet.

That may be because Christensen has a single clear theory of how disruption happens — and a solution, too: disrupt yourself before you are disrupted by someone else. That elegance is something we tend to find appealing.

The reality of disruption is less elegant — and harder to solve. Kodak’s position may well have been impossible, no matter what managers had done. If so, the most profitable response would have been to vanish gracefully.

“There are multiple points of failure,” says Henderson. “There’s the problem of reorganisation. There’s the question of whether the new idea will be profitable. There are cognitive filters. There is more than one kind of denial. To navigate successfully through, an incumbent organisation has to overcome every one of these obstacles.”

......Henderson added that the innovators — like Fuller — are often difficult people. “The people who bug large organisations to do new things are socially awkward, slightly fanatical and politically often hopelessly naive.” Another point of failure......The message of Henderson’s work with Kim Clark and others is that when companies or institutions are faced with an organisationally disruptive innovation, there is no simple solution. There may be no solution at all. “I’m sorry it’s not more management guru-ish,” she tells me, laughing. “But anybody who’s really any good at this will tell you that this is hard.”

Tien Tzuo APRIL 30, 2018.

.....When Apple reports its earnings on Tuesday, analysts will be watching closely to see what it says about smartphone sales. The big tech group’s shares are down more than 7 per cent in the past 10 days amid concerns about soft demand for the latest iPhones.

But investors are focusing on the wrong numbers. Apple may be the world’s most valuable company, but its future depends on more than product sales. It must adapt to a profound shift that is changing consumer behaviour. We are witnessing the end of ownership as we know it.
.......With every day that passes Apple cares less about how many iPhones it sells, and more about how many Apple IDs its customers create and how it can make money from those IDs.
.....The end of ownership is disrupting nearly every industry: from retail and entertainment to heavy equipment and healthcare. It is a fundamental shift not just in the way we work and live and accumulate things, but in the way we value ourselves and each other.......Knowing the customers, their preferences, buying habits and how much they are willing to spend are the price of entry in this new economy. Once those relationships are forged and cemented, the data collected, the insights drawn, the real work starts — to anticipate the products and services customers will want next.
.....Volvo understands this. Its latest advertising encourages customers not to buy cars but to subscribe to them instead. The Chinese-owned company is rethinking everything from payment structure and auto design to sales centers and partnerships. Other big automakers including Ford and Porsche are also preparing for the shift away from ownership.....Amazon continues to school all of its rivals in the power of subscriber relationships. A case in point: it recently raised the price of its US Prime membership service by nearly 20 per cent, and its customers didn’t even blink.

That said, many investors are still evaluating companies based on the outdated idea that the number of products they produce will make or break them. But change is coming. The end of ownership is happening whether Wall Street wakes up or not.

By Anne Steele
Updated May 4, 2018

The industry is ripe for disruption. People are spending more than ever on experiences, even as concern is rising about security at crowded live events. At the same time, artists and teams today have little control over how, to whom or for how much their tickets are sold.

May 3, 2018 | Financial Times | Gillian Tett 10 HOURS AGO.

AllianceBernstein’s Nashville move is highly symbolic — and revealing — of the current state of finance. It highlights rising cost pressures on traditional asset managers, as investors abandon expensive, actively-run mutual funds for low-fee, passive trackers. The shift also shows how technological disruption is forcing top executives to rethink their assumptions. One obvious factor that has made it easier for a company such as AllianceBernstein to shift its physical headquarters is that the internet makes it possible to trade securities and do research anywhere in the world.

However, another, less-discussed, issue is that as financial services move into cyber space and the sector throws money at technology, companies also need to build digital facilities and hire computer technicians. That is tough to do in New York: competition for digital workers is high and it is hard to build cutting-edge computer hubs in densely packed historic buildings.

There is a third point about boardroom psychology: as executives toss those “d” words around — digital disruption — the conversations allow them to question all manner of taboos, including many that have nothing to do with computers. The idea of leaving a hallowed financial centre thus becomes easier to embrace, as costs keep rising in America’s coastal hubs.

Owen Walker in Davos 2 HOURS AGO

“Apple was not in the music industry, Google was not in the mobile phone industry and Amazon was not in the groceries business — until they were,” he said. “Tech companies are going to enter the financial services market in a very, very aggressive way.” 

Ant Financial’s sprawling portfolio of businesses includes one of the world’s biggest credit scoring systems, a bank, an insurer and a lending platform for small businesses. It was reported last week by the FT and other news organisations that Ant Financial is seeking to raise at least $9bn in its latest private fundraising ahead of an initial public offering....“You have to expect there will be a threat from [Chinese] technology companies to financial services,” ....“But I would say Amazon is equally a threat to doing that.” 

March 31st, 2018 | The Economist |

The world’s advertising giants are struggling to adapt to a landscape suddenly dominated by the duopoly of Google and Facebook. Some of their biggest clients, such as Procter & Gamble (P&G) and Unilever, are also being disrupted, in their case by smaller online brands and by Amazon. They are cutting spending on advertising services, and also building more capabilities in-house. Consultancies with digital expertise such as Deloitte and Accenture are competing with agencies, arguing that they know how to connect with consumers better, and more cheaply, using data, machine learning and app design.......This month Marc Pritchard, chief brand officer of P&G, criticised their (i.e. the ad giants) model as a “Mad Men” operation that is “archaic” and overly complex in an era when campaigns and ads need to be designed and refined quickly across lots of platforms.

Technological forces are buffeting this model.

(1) The first big challenge is disintermediation. Despite the growing backlash against the tech giants, Google and Facebook make it easy for firms big and small to advertise on their platforms and across the internet via their powerful ad networks.
(2) The second headache is the rise of ad-free content for consumers, especially on Netflix, and the corresponding disruption of ad-supported television, which has declining viewership globally.
(3) Third, Amazon’s e-commerce might, and the growing clout of internet-era direct-to-consumer upstarts, have weakened the distribution muscle and pricing power of the advertising giants’ biggest clients.....cost discipline among clients is driven partly by the influence of thrifty private-equity investors like 3G, the Brazilian owner of AB InBev, the world’s largest brewer......Sir Martin argues that the budgetary pressures that have forced his clients to cut back on advertising are a cyclical problem, not like the structural challenges posed by technological disruption.

In private, however, a senior executive at a rival ad-holding firm rejects much of this optimism. Technological disruption and disintermediation, he says, will only deepen. The efficiency of targeted digital ads means companies can spend less for the same outcome in branding. ....The advertising firms are responding by hiring away talent, acquiring businesses (in 2015 Publicis bought Sapient, a digital consultancy, for $3.7bn) and gradually changing how they make money. Their plans mostly boil down to two things: investing in digital services and consolidating their collections of businesses so that they can provide a range of services to one client more cheaply under one account.

April 11, 2018 | Financial Times | by JONATHAN MARGOLIS
Slippers, razors and even gas boilers offer ripe pickings for profit and disruption.

Simon Phelan and his online gas boiler installation company, Hometree, are “aiming to replicate the success of online estate agent Purplebricks in an equally large, albeit more boring market: boiler installations.”......Start-ups doing anything new, cute or plain off-the-wall often struggle. .....Boring may be the new interesting.......Mahabis, a carpet slippers start-up, has sold close to a million pairs of its £79 product....another boring domestic product, razors, have proved to be a lucrative market for what are essentially tech companies, such as Dollar Shave Club (bought by Unilever for $1bn) and Harry’s.....It is not just products: dull-sounding online services also seem to pay off. London start-up ClearScore, a millennial-focused fintech company which offers users free credit scoring and personal finance guides, sold to Experian last month for £275m, after just three years in business......Phelan is pursuing gas boilers, not because he was interested in them, but because he was looking for a way into the growing smart-home sector. He wants to build a slick way to modernise boiler installation, so that by the time newer, more eco-friendly home heating technologies become standard he will already have a loyal customer base. This is why Hometree has more in common with tech companies than with local plumbers.

“Where I think people go wrong in entrepreneurship is building a product, rather than a business for the future,” says Mr Phelan....Making a neglected category simple and elegant is attractive.”

“All you have to do,” he concluded, “is not to see it as a gas boiler business, but a much bigger play......Phelan’s idea that new businesses need to be strategic rather than excitable about this or that gimmicky new product is one that other entrepreneurs would do well to follow.

January 22, 2018 | FT | by John Thornhill.

Singapore has a reputation as a free-trading entrepôt, beloved of buccaneering Brexiters. ....But stiff new challenges confront Singapore, just as they do all other countries, in the face of the latest technological upheavals. Is the smart nation, as it likes to style itself, smart enough to engineer another reboot?.....Singapore is becoming a prime test bed for how developed nations can best manage the potentially disruptive forces unleashed by powerful new technologies, such as advanced robotics and artificial intelligence...Naturally, Singapore’s technocratic government is well aware of those challenges and is already rethinking policy and practice. True to its heritage, it is pursuing a hybrid approach, mixing free market principles and state activism.

Rather than passively reacting to the technological challenges, the island state is actively embracing them....“The real skill of Singapore has been to reverse engineer the needs of industry and to supply them in a much more cost-effective way than simply writing a cheque,” says Rob Bier, managing partner of Trellis Asia, which advises high-growth start-ups...To take one example, the country has become an enthusiastic promoter of autonomous vehicles. The government has created one of the most permissive regulatory regimes in the world to test driverless cars.....GovTech’s aim is to help offer seamless, convenient public services for all users, creating a truly digital society, economy and government. To that end, the government is acting as a public sector platform, creating a secure and accessible open-data infrastructure for its citizens and companies. For example, with users’ permission, Singapore’s national identity database can be accessed by eight commercial banks to verify customers with minimal fuss. A public health service app now allows parents to keep check of their children’s vaccinations.

By running with the technological wolves, Singapore is clearly hoping to tame the pack.

OCTOBER 27, 2017 | Financial Times | Tim Bradshaw in Los Angeles.

Noon’s $400 “smart lighting system” is one of those hoping to tap into Amazon’s Alexa platform. Its “Room Director” incorporates an OLED display — the same kind of touchscreen technology used in the new iPhone X — and bulb-detecting algorithms to create “layered lighting”, with an array of scenes and moods. 

Noon’s $50m funding is large for a company that, until Thursday’s debut in US stores, had not begun to sell any products. Its backers argue the sum reflects the capital costs of building a high-quality consumer product, as well as the scale of the opportunity: 144m residential light switches are sold every year, Mr Charlton notes. 

“It is one of these unloved, overlooked products that has relatively boring incumbents that haven’t paid attention to the needs of the market,” says Rob Coneybeer, partner at Shasta Ventures, one of Noon’s earlier investors. “You probably hit a light switch at least 10 times a day. The only other product that has that level of engagement in your life is your smartphone.” 

There are few simpler technologies in the home than the humble light switch, which for most people works reliably without the addition of WiFi or Bluetooth. 

Ian Salisbury
Jul 24, 2017

Jan. 23, 2017 | Barron's | By Avi Salzman.

OCT. 8, 2017 | The New York Times | By BROOKS BARNES and JOHN KOBLIN.

For two days in June 2017, Disney’s board of directors wrestled with one topic: how technology was disrupting the company’s traditional movie, television and theme park businesses, and what to do about it?.....Cord cutting was accelerating much faster than expected. Live viewing for some children’s programming was in free fall......Robert A. Iger, Disney’s chief executive and chairman, proposed a legacy-defining move. It was time for Disney to double down on streaming..... bet the entertainment giant’s future on a wonky, little-known technology company housed in a former cookie factory: BamTech.....Based in Manhattan’s Chelsea Market, the 850-employee company has a strong track record — no serious glitches, even when delivering tens of millions of live streams at a time. BamTech also has impressive advertising technology (inserting ads in video based on viewer location) and a strong reputation for attracting and keeping viewers, not to mention billing them.....BamTech grew out of Major League Baseball Advanced Media, or Bam for short, which was founded in 2000 as a way to help teams create websites. By 2002, Bam was experimenting with streaming video as a way for out-of-town fans to watch games.

Soon, Bam developed technology that attracted outside clients, including the WWE, Fox Sports, PlayStation Vue and Hulu. HBO went to Bam in 2014 after failing to create a reliable stand-alone streaming service on its own. Could Bam get HBO up and running — in just a few months? Bam built HBO Now for roughly $50 million, delivering it just in time for the Season 5 premiere of “Game of Thrones,” which went off flawlessly. “They were nothing short of herculean for us,” said Richard Plepler, HBO’s chief executive.

In 2015, Bam decided to spin off its streaming division, calling it BamTech. With an eye toward its own direct-to-consumer future, particularly with ESPN, Disney paid $1 billion in 2016 for a 33 percent stake and an option to buy a controlling interest in 2020. To run the stand-alone company, M.L.B. and Disney recruited Michael Paull, 46, from Amazon, where he oversaw Prime Video and the introduction of Amazon Channels.....Disney contends that a big part of BamTech’s value has been overlooked. Down the road, as other media companies move toward streaming, BamTech intends to sign them up as clients.....Though BamTech has proved its streaming bona fides, it still lacks the algorithms and the personalization skills that have helped propel Netflix to success. To fill that gap, Mr. Paull recently hired the former chief technology officer of the F.B.I. to be the head of analytics.....The level of engineering required for that enormous volume of content is no small matter. Each bit of streamable content has to be made to fit a dizzying number of requirements. Start with web browsers, ranging from Safari to Chrome or Explorer, all of which have slightly different demands. It also has to fit every iPhone and Android phone. And then there are connected living room devices like Apple TV.

By Laura Stevens
May 22, 2017

By NELSON D. SCHWARTZJUNE 17, 2017

General Electric is just the latest storied name in corporate America to show its leader the door. Ford’s chief executive, Mark Fields, had been in the job for less than three years when he was fired in late May. Two weeks earlier, Mario Longhi of U.S. Steel abruptly stepped down. With these departures, the American era of the baronial chief executive, sitting atop an industrial dominion with all the attendant privileges, is drawing to a close.....Jeffrey Immelt tried to change G.E., yet couldn’t react quickly enough to the forces affecting companies like his......[(Amazon + Whole Foods) shows how] the digital age has upended the competitive landscape, pitting companies in vastly different industries against one another.

These include the rising power of activist investors, who buy up stakes in companies and then demand changes. Activists are now hunting much bigger game, demanding double-digit annual earnings growth in a stagnant economy. Or else.....Boards, too, have changed, evolving from country-club-like collections of the same familiar faces into a much more diverse and demanding constituency.....for most of the Fortune 500, the unquestioned power and perks, the imperviousness to criticism from the likes of shareholders, and the outsize public profile that once automatically came with the corner office have gone the way of the typewriter and the Dictaphone.....[today] ...wading into bitterly partisan public debates offers little upside for corporate leaders, and risks damage to their company’s reputation.

As a result, while companies in many ways have more economic and political power than ever, “chief executives now shy away from weighing in on the policy level or broader societal issues,” Mr. Sharer said. “They’re more focused on running their companies.”......Mr. Immelt’s exit leaves a void at the intersection of business and public policy,.....“If you start fooling around in Washington with the Business Roundtable or writing op-eds, activist investors will ask what you’re doing,”....[GE] became a natural target for activist investors. One of those was Nelson Peltz, a onetime corporate raider who relied on Michael R. Milken’s junk bonds for financing back in the 1980s.

By Christopher Mims
June 16, 2017

The impact of all this is clear: Existing businesses that can’t respond by becoming tech companies themselves are going to get bought or bulldozed, and power and wealth will be concentrated in the hands of a few companies in a way not seen since the Gilded Age. The rest of us will have to decide how comfortable we are buying all our goods and services from the members of an oligopoly.

Think about it: Apple, a computer company that became a phone company, is now working on self-driving cars, original TV programming and augmented reality, while pushing into payments territory previously controlled by banks, moves that could make it the first trillion-dollar company in the world.

Facebook , still seen by some as a baby-pictures-and-birthday-reminders company, is creating drones, virtual-reality hardware, original TV shows, even telepathic brain-computer interfaces.

Google parent Alphabet Inc., still largely an ad company with a search engine, built Android, which now runs more personal computing devices than any other software on Earth. It ate the maps industry; it’s working on internet-beaming balloons, energy-harvesting kites, and ways to extend the human lifespan. It’s also arguably the leader in self-driving tech.

Meanwhile, serial disrupter Elon Musk brings his tech notions to any market he pleases—finance, autos, energy, aerospace.

By DAVID E. SANGER and ERIC SCHMITT JUNE 12, 2017.

In 2016, U.S. cyberwarriors began training their arsenal of cyberweapons on a more elusive target, internet use by the Islamic State. Thus far, the results have been a consistent disappointment......The effectiveness of the nation’s arsenal of cyberweapons hit its limits against an enemy that exploits the internet largely to recruit, spread propaganda and use encrypted communications, all of which can be quickly reconstituted after American “mission teams” freeze their computers or manipulate their data..... the U.S. is rethinking how cyberwarfare techniques, first designed for fixed targets like nuclear facilities, must be refashioned to fight terrorist groups that are becoming more adept at turning the web into a weapon......one of the rare successes against the Islamic State belongs at least in part to Israel, which was America’s partner in the attacks against Iran’s nuclear facilities. Top Israeli cyberoperators penetrated a small cell of extremist bombmakers in Syria months ago, the officials said. That was how the United States learned that the terrorist group was working to make explosives that fooled airport X-ray machines and other screening by looking exactly like batteries for laptop computers......ISIS' agenda and tactics make it a particularly tough foe for cyberwarfare. The jihadists use computers and social media not to develop or launch weapons systems but to recruit, raise money and coordinate future attacks.

Such activity is not tied to a single place, as Iran’s centrifuges were, and the militants can take advantage of remarkably advanced, low-cost encryption technologies. The Islamic State, officials said, has made tremendous use of Telegram, an encrypted messaging system developed largely in Germany......disruptions often require fighters to move to less secure communications, making them more vulnerable. Yet because the Islamic State fighters are so mobile, and their equipment relatively commonplace, reconstituting communications and putting material up on new servers are not difficult.

MAY 26, 2017 | Financial Times | by John Dizard.

Art consultants and dealers are convinced that theirs is a high-touch, rather than a high-tech business, and they have arcane skills that are difficult, if not impossible, to replicate..... better-informed collectors [are musing about] how to compress those transaction costs and get that price discovery done more efficiently.....The art world already has transaction databases and competing price indices. The databases tend to be incomplete, since a high proportion of fine art objects are sold privately rather than at public auctions. The price indices also have their issues, given the (arguably) unique nature of the objects being traded. Sotheby’s Mei Moses index attempts to get around that by compiling repeat-sales data, which, given the slow turnover of particular works of art, is challenging.....Other indices, or value estimations, are based on hedonic regression, which is less amusing than it sounds. It is a form of linear regression used, in this case, to determine the weight of different components in the pricing of a work of art, such as the artist’s name, the work’s size, the year of creation and so on. Those weights in turn are used to create time-series data to describe “the art market”. It is better than nothing, but not quite enough to replace the auctioneers and dealers.....the algos are already on the hunt....people are watching the auctions and art fairs and doing empirics....gathering data at a very micro level, looking for patterns, just to gather information on the process.....the art world and its auction markets are increasingly intriguing to applied mathematicians and computer scientists. Recognising, let alone analysing, a work of art is a conceptually and computationally challenging problem. But computing power is very cheap now, which makes it easier to try new methods.....Computer scientists have been scanning, or “crawling”, published art catalogues and art reviews to create semantic data for art works based on natural-language descriptions. As one 2015 Polish paper says, “well-structured data may pave the way towards usage of methods from graph theory, topic labelling, or even employment of machine learning”.

Machine-learning techniques, such as software programs for deep recurrent neural networks, have already been used to analyse and predict other auction processes.

May 26, 2017 | WSJ | By Christopher Mims

Investors and boards are hunting for corporate leaders who can move quickly to fend off upstarts and place big bets on disruptive tech.......For pretty much any industry you can name—not just autos but manufacturing, logistics, finance, media and of course retail—there are tech startups purporting to have better ideas, ones they say they don’t need decades to make into realities. It isn’t as if all these industries will see massive CEO turnover, but it does mean established companies need to consider drastic measures. They must be willing to tell their stakeholders they may have to lose money and cannibalize existing products and services, while scaling up new technologies and methods.

“Ten years ago, innovation was based on features and functions,”. “Now it’s about your business model and transforming your industry.”

Before, companies could innovate by acquiring tech startups. But the top disrupters now grow so quickly and capture so much market share, they become too valuable to buy or are unwilling to sell.....Act faster to satisfy shareholders.....Mickey Drexler, CEO of beleaguered J. Crew, admitted that if he could go back 10 years, he might have done things differently, to cope with the rapid transformation of retail by e-commerce. Who then would have predicted that in 2017, the No. 1 online retailer of clothing to millennials would be Amazon?....CEO turnover isn’t necessarily the only solution on the table....Companies also have to incubate potentially disruptive startups within their own corporate structures. This means protecting them as they develop, and being willing to absorb their losses for as long as their competitors do. Consider, for example, that Amazon made almost no profit for its first 20 years..... Wal-Mart’s e-commerce division increased sales 29% from a year earlier. Many analysts thought the company overpaid for Jet.com, which cost it $3.3 billion in August 2016. But the acquisition brought e-commerce veteran Marc Lore, who became chief executive of Wal-Mart’s online operations and quickly replaced existing executives with members of his own team.

By Khadeeja Safdar
Updated May 24, 2017

For decades, fashion was essentially a hit or miss business. Merchants like Mr. Drexler would make bets on what people would be wearing a year in advance, since that’s how long it took to design and produce items. Hits guaranteed handsome returns until the next season.

Now, competitors with high-tech, data-driven supply chains can copy styles faster and move them into stores in a matter of weeks. Online marketplaces drive down prices, and design details such as nicer buttons and richer colors are less apparent on the internet. Social media adds fuel to the style churn—consumers want a new outfit for every Instagram post. “The rules of the game have changed,” said Janet Kloppenburg, president of JJK Research, a retail-focused research firm. “It’s not just about product anymore. It’s also about speed and pricing.”

Mr. Drexler’s plan is to emphasize lower prices, pivot toward more digital marketing and adopt a more accessible image........Mr. Drexler didn’t appreciate how the quality of garments could easily get lost in a sea of options online, where prices drive decisions, or how social media would give rise to disposable fashion. Online, price has more impact than the sensory qualities of clothing. “You go into a store—I love this, I love this, I love this,” he said. “You go online and you just don’t get the same sense and feel of the goods because you’re looking at a picture.”.....Amazon.com and other algorithm-based websites can change prices by the hour based on demand, and the variety of options makes it easy to mix and match brands.

“The days of people wearing head-to-toe J.Crew are over,”......Today, with nearly two billion people using Facebook every month, he feels differently: “You cannot be successful without being obsessed with the product, obsessed with social media, and obsessed with digital,” he said. “Retail is now about all that.”

Mr. Drexler said he hasn’t given up on quality. Instead, he is now lowering prices on about 300 items and creating an analytics team dedicated to optimizing prices for each garment......TPG co-founder David Bonderman recently acknowledged J.Crew and its peers are struggling with declining mall traffic and the shift to online shopping. “The internet has proven much more resilient and much more important than most of us thought a decade ago,” he said at a conference earlier this month.

KEVIN LYNCH
Special to The Globe and Mail
Published Monday, May 01, 2017

Messrs. Irving Azoff and Tim Leiweke could use conferences to help Oak View Group, their venue-management company, which collects annual fees from about two dozen arenas in exchange for sponsorships, event booking and other services.

By Stephen Wilmot
April 10, 2017

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By Mike Lipkin
#1. Become someone who knows.....a secret is a formula or knowledge that is only known to a few. If you own a secret, you have the power to share it so you can turn the few into the many. Secrets are everywhere – hiding in plain sight. The difference between someone who knows and someone who doesn’t is the willingness to do the work, find the information, talk to the people and formulate one’s strategy. Be a source of joy and not a source of stress!! Disruption begins long before.....Mastering other people's emotions....Add in a way that thrills and delights others!! Prospective of Personal Mastery....industry connection + internal influence.
# 2. Have an audacious ambition. If you want to be a disruptor, you can be humble, but you can’t be modest. You have to dream big....dream bigger than anything that gets in its way.
#3. Be simultaneously analytical and creative. There may be a gap in the market, but is there a market in the gap? ...Disruption demands left and right brain firing together. Your intuition may alert you to the opportunity but it’s your intellect that builds your business case. That’s why you need wingmen or women to complement your capacity. Fly social not solo.
#4. Be prolific. The more you lose, the more you win. 1.0 is always imperfect. You will hear the word “no” hundreds of times more than the word “yes.” The best way to get ready is to do things before you’re ready. The best you can do is get it as right as you can the first time [i.e. "good enough"] and then get better, stronger, smarter. Disruptors try a lot more things than disruptees. They fail fast and they fail forward. [Practice: repeated performance or systematic exercise for the purpose of acquiring skill or proficiency.
#5. Communicate like magic. If you want to be a disruptor, you must be a great communicator. ... the right words generate oxytocin – the love hormone, whereas the wrong words generate cortisol, the stress hormone. .... tell your story in a way that opens people’s hearts, minds and wallets to you. Create a vocabulary.
#6. Be a talent magnet. Disruption demands the boldest and brightest partners....The best talent goes where it earns the highest return. Reputation is everything. [What would Mandela do?]
#7. Play like a champion today. Disruptors may not always play at their best but they play their best every day. They bring their A-Game no matter who they’re playing....you feel their intensity and passion. How hard are you hustling on any given day? Everything matters. There is no such thing as small. They’re all in, all the time.

September 26, 2016 | FT | John Thornhill.

Investors are scrambling to understand how technology will enable wealth to be created and destroyed

In the 60-year history of AI, the technology has experienced periodic “winters” when heightened expectations of rapid progress were dashed and research funding was cut. “It’s not impossible that we’re setting ourselves up for another AI winter,” says the co-founder of one San Francisco AI-enabled start-up. “There is a lot of over-promising and a real risk of under-delivering.”
One of the more balanced assessments of the state of AI has come from Stanford University as part of a 100-year study of the technology. The report, which brought together many of AI’s leading researchers, attempted to forecast the technology’s impact on a typical US city by 2030......Apart from the social impact, investors are scrambling to understand how such applications of AI will enable wealth to be created — and destroyed.
Suranga Chandratillake, a partner at Balderton Capital, a London-based venture capital firm, says “AI is the big question of the now” for many investors. The clue, he suggests, is to identify those companies capable of amassing vast pools of domain specific data to run through their AI systems that can disrupt traditional business models. [Large data sets with known correct answers serve as a training bed and then new data serves as a test bed]

Charles Duhigg
ADVENTURES IN CAPITALISM MARCH 8, 2017

It remains to be seen, however, whether Mr. Trump will successfully transition from a start-up to a mature commander in chief. Just as Uber and other young tech firms have stumbled while growing, so Mr. Trump seems, right now, in over his head at the White House.

But understanding these early missteps — and how start-up thinking vaulted Mr. Trump into power — is important, because it gives us a lens into the strengths and weaknesses of management techniques that are increasingly being imitated by other industries around the world.

Put differently, the president’s success has demonstrated the strength of the start-up philosophy. But is it a good or a bad thing if Mr. Trump becomes the first political unicorn?....The Trump team’s embrace of Silicon Valley philosophy goes much deeper. As Mr. Trump’s campaign gained steam, for instance, top officials began a dedicated effort to study the tactics of successful digital advocacy groups, particularly the left-leaning Moveon.org, as well as #BlackLivesMatter, to reverse engineer methods for rapidly mobilizing voters.....The influence of start-up philosophy on Mr. Trump’s team extends to day-to-day management. The campaign and the White House have looked to tech industry management techniques to empower staff members to start policy initiatives, to conduct rapid digital tests, and to push fund-raising and advertising campaigns without seeking authorization from senior officials.....

By DAVID E. SANGER and WILLIAM J. BROADMARCH 4, 2017

By CHRISTOPHER MIMS
Updated Jan. 8, 2017

MARINA STRAUSS
RETAILING REPORTER — The Globe and Mail
Published Wednesday, Dec. 14, 2016

December 8, 2016F | LinkedIn | Charlene Li.

During the first ten years of being an analyst, I had briefings from a total four women CEOs, none of them women of color. While women still face tremendous discrimination in tech, I’m seeing progress but it’s not enough. To help change this, when I meet women CEOs of start-ups, I take them aside and ask how I can personally help them. I especially reach out to women of color in any position who are contemplating making a move out of their comfort zone. After all, I know what it's like to be different, to be first.

My hope is that my ideas and words provide people with a roadmap of how to manage disruption in their organizations and their lives. And I hope that my life and career serves as an inspiration especially for women of color for how to pursue and manage disruption in their lives.

By TELIS DEMOS
Updated Nov. 1, 2016 8:53 a.m.

August 2016 | McK | Steve Jurvetson is a partner at Draper Fisher Jurvetson. Michael Chui,
(1) entrepreneurs who have infectious enthusiasm.
(2) sector of the economy believed to be experiencing rapid growth/ massive disruptive change.
(3) wide range of industries, from synthetic biology to rockets to electric cars to a variety of sectors that weren’t ripe for venture investment in prior decades but now are becoming software businesses.
(4) attributes and people somewhat similar to what I look for in the team at work: enough self-confidence to be humble about what it’s proposing and respect for the team over individuals
How should large companies respond? The large companies that are most exciting to me are the ones that innovate outside their core. big companies need to innovate outside their core businesses. The biggest start-up: Space.

By JEREMY G. PHILIPS AUG. 10, 2016

Short-term success may be driven by exceptional execution; long-term value creation requires building a defensible model.

Any microeconomics textbook will tell you there are limited sources of competitive advantage. The most valuable companies combine several reinforcing strands, like scale and customer loyalty.....

While it is hard to stay ahead solely through superior execution over an extended period, it is sometimes enough in the short term to draw a deep-pocketed buyer where there are strong, immediate synergies. Creating enormous value over the long term requires turning a tactical edge into some form of durable advantage....Superior tactical execution can still create real value, particularly where it provides ammunition for a bigger war (like Walmart’s battle with Amazon). And in the long term, value is created not by disruption, but by weaving together advantages (as both Amazon and Walmart have done in different ways) that together create a barrier that is hard to storm.

By IRVING WLADAWSKY-BERGER
Jun 24, 2016

What's Page One? What's digital first?

The first page of the print edition of the newspaper is known as Page One with capital letters. The report details the extent to which Page One is the heart of the daily routine of the newsroom, with the most important editorial meeting also being called Page One, and reporters and editorial groups assessing themselves largely in terms of their ability to score Page One stories. This remains the case even though digital is not just the future of the New York Times but largely its present. The Times' digital audience dwarfs its print subscriber base, but the editorial workflow is built around Page One and the newspaper.

The report urges a "digital first" strategy and emphasizes that this means more than literally putting a story on the internet before it appears in a print newspaper. Digital first is a state of mind in which the job of the newsroom is to deliver an excellent digital product, which a relatively small team would then repackage as a daily print product. Today it's largely the reverse. Deadlines are structured around the pace of print, incentives are structured around Page One, and then teams of producers build a website out of what's really a print workflow.

DAVID ISRAELSON
Special to The Globe and Mail
Published Wednesday, Jan. 27, 2016

“Not only do they have to think about and worry about economic changes and what their competitors are going to do, they now have a whole new level of political and regulatory risk,” Ms. Ecker says.

“You can’t predict in some cases how a policy maker is going to move. We’re seeing that in China now.”

At the beginning of 2016, as markets began a steep slide in China, that country’s regulators twice activated a “circuit breaker” mechanism to halt trading, only to abandon it after it appeared to make the drop in the market even worse.

The lesson is that sometimes “business practices and even business products that seem acceptable today, for whatever reason, when something happens can be considered things you shouldn’t be doing. There’s more policy unpredictability than ever before,” Ms. Ecker says.

“In an increasingly risky world, a CEO needs to be increasingly flexible and adaptable. You also need to have a team and know what the latest threat might be.”

That isn’t necessarily easy, she adds. “There’s no rule book. When I was in politics, people used to ask me what we should anticipate. I’d tell them, ‘Read science fiction books.’ ”....CEOs in today’s risky world also need people skills that may not have been necessary before, says Shaharris Beh, director of Hackernest, a Toronto-based not-for-profit group that connects worldwide tech companies.

“CEOs have always needed strong skills around rapid decision-making and failure mitigation. In today’s hypercompetitive startup business climate, leaders need two more: pivot-resilience and proleptic consensus leadership,” he says.

“Pivot-resilience is the ability to tolerate the stress of gut-wrenching risks when dramatically shifting strategy. In other words, be able to take the blame gracefully while still warranting respect among your team members.”

Proleptic consensus leadership is especially important for startups, Mr. Beh says. “It’s the ability to garner the team’s support for taking big risks by giving them the assurance of what backup plans are in place should things go sour.”

This consensus building “is how you keep support,” he adds. In a volatile economy, “people can jump ship at any time or even unintentionally sabotage things if they’re not convinced a particular course of action will work.” So you have to constantly persuade.

19 December/20 December 2015, Diary by Financial Times' Ravi Mattu references Geoffrey Hinton, uToronto

DAVID BERMAN - BANKING REPORTER
The Globe and Mail
Published Wednesday, Nov. 11, 2015

Mohanbir SawhneyDeval Parikh
FROM THE JANUARY 2001 ISSUE

In recent years, it seems as though the only constant in business has been upheaval...Business has become so complex that trying to predict what lies ahead is futile. Plotting strategy is a fool’s game. The best you can do is become as flexible and hope you’ll be able to ride out the disruption.
There’s some truth in that view…..We have studied the upheavals and concluded that many of them have a common root--the nature of intelligence in networks. The digitization of information, combined with advances in computing and communications, has fundamentally changed how all networks operate, human as well as technological, and that change is having profound consequences for the way work is done and value is created throughout the economy. Network intelligence is the Rosetta Stone. Being able to decipher it will shape the future of business.

Four Strategies for Profiting from Intelligence Migration

Arbitrage.
Because intelligence can be located anywhere on a network, there are often opportunities for moving particular types of intelligence to new regions or countries where the cost of maintaining the intelligence is lower. Such an arbitrage strategy is particularly useful for people-intensive services that can be delivered over a network, because labor costs tend to vary dramatically across geographies.

Aggregation.
As intelligence decouples, companies have the opportunity to combine formerly isolated pools of dedicated infrastructure intelligence into a large pool of shared infrastructure that can be provided over a network.

Rewiring.
The mobilization of intelligence allows organizations to more tightly coordinate processes with many participants. In essence, this strategy involves creating an information network that all participants connect to and establishing an information exchange standard that allows them to communicate.

Reassembly.
Another new kind of intermediary creates value by aggregating, reorganizing, and configuring disparate pieces of intelligence into coherent, personalized packages for customers.

Oct. 06, 2015 | The Globe and Mail | RYAN CALIGIURI.

Why is it that professional service firms, especially accounting and law firms, find it so difficult to embrace innovation in order to build a stronger future?...The biggest factor is that professional service firms are driven primarily by billable hours and any time someone is not billable they are seen as not adding value. This means that in order to innovate someone has to “stop adding value” by not being billable. There is far too much focus on “today” in professional service firms and not enough on the future – this mentality will continue to hold back firms and do more damage in the long run....Most professional service firms also don’t have a system for driving innovation in an efficient manner so they often waste a great deal of time getting caught up in details that don’t matter. ...Many of the law and accounting firms I worked with were doing very well so they didn’t see a need to innovate. ....Firms are often not good at implementing new services or products, they don’t have a culture that supports, fosters, or encourages innovation, and they are often too smart for their own good and get overly complex with their innovation initiatives......First, a firm’s overall corporate strategy needs to incorporate an element of innovation as one of its top long-term goals. Without a strategic focus and investment in innovation, any efforts will often fall flat as they will be approached loosely or in a silo that eventually gets overtaken by billable work.....Next, get a quick win by surveying or researching your client’s business, their industry, and even their own clients. Looking deeper into your client’s business and understanding their problems and opportunities will help you find ways to add value through a new product or service and will enable your firm to get off on the right foot.....Insights from clients can drive new products, services and systems that will fill a need.
However, professional service firms that are looking for a leap in innovation need to go beyond customer insights and explore future trends, industry experts, and, yes, even patent databases for further stimulus to drive new ideas.
This is the difference between firms that innovate and those that die. If you’re in a professional service firm and believe that there is no threat, quite frankly, you are crazy to think so.

Oct. 04, 2015

Weblog post. Newstex Trade & Industry Blogs, Newstex. Oct 1, 2015.

ProQuest Central: hackathon and food and distribut*

October will see the launch of London's first ever 'Food Tech Week' which will be celebrating all things food and facilitating tec...

6 June 2015 | Financial Times|Louise Lucas in Singapore

Singapore has seen the future - and is busily putting it into practice.

From crowdsourced buses, designed to do for public transport what ...

MICHAEL MOTALA
Contributed to The Globe and Mail
Published Friday, Jul. 10, 2015

Technologists from other industries hope Ubernomics is a generalizable business model. This month, the MaRS Discovery District launched LegalX, an industry cluster aimed at promoting local entrepreneurship, driving industry efficiency and pioneering new business models. One of its first startups is a service called LawScout. Like Uber, it offers a simple digital platform aimed at connecting small businesses with local lawyers on a fixed-rate basis. Beagle, another product launched at the event, performs rapid contract analysis using a sophisticated algorithm, while providing a platform for social media-inspired collaboration among decision-making teams....Ubernomics is not a panacea for the legal sector. Rather than disrupt it, it will transform. Big firms are here to stay if they embrace innovation. Digital technologies promise more efficient work flows and higher productivity. The shortcomings of the consensus-driven decision-making structure, exemplified by the fall of Heenan Blaikie, suggests more strategic thinking, stronger leadership and a heavier investment in R&D is needed to make legal work more efficient and cost effective......We live in an absurd legal diseconomy. There is an ever-widening gap between supply and unmet demand. Following the Ontario government's tuition deregulation in 1998, University of Toronto law led the charge, raising tuition by 320 per cent under dean Ron Daniels. Other law schools followed suit and continue to do so. This year, U of T law is unashamed to charge incoming students more than $30,000 a year. Not to be left out, the Law Society of Upper Canada recently doubled its licensing fees. The legal academy is aggravating the access to justice crisis by imposing ever-higher rents on the most vulnerable entrants to the profession. A false and parasitic empiricism has evidently burrowed itself in the minds of our country's greatest legal thinkers.

Ubernomics is not a panacea for the legal sector. Rather than disrupt it, it will transform. Big firms are here to stay if they embrace innovation. Digital technologies promise more efficient work flows and higher productivity. The shortcomings of the consensus-driven decision-making structure, exemplified by the fall of Heenan Blaikie, suggests more strategic thinking, stronger leadership and a heavier investment in R&D is needed to make legal work more efficient and cost effective.........
Businesses like fixed-cost projections. The billable-hour model introduces a lot of uncertainty into the equation. Software such as LawScout is unlikely to undermine the legal industry’s biggest players, but it signals that an economic culture shift lies ahead.

May. 13 2015 | The Globe and Mail |by EAMONN PERCY.

William Gibson, who coined the term Cyberspace, “The future is here, it’s just not evenly distributed yet.”

It is not the innovation itself that matters, but its implications during this transition. For the individual, the key will be how to take advantage of these changes, while protecting one’s family, business, career, investments and way of life.....In 2013, a study authored by Erik Brynjolfsson and Andrew McFee at the MIT Sloan School of Management argued that advances in technology are largely behind the sluggish job growth and flattening median incomes over the last 10 to 15 years. They believe that the recent rapid advances in technology are destroying jobs more quickly than they are being created, contributing to the recent stagnation in income and the growth of inequality in the U.S. ... However, around the year 2000, this correlation diverged, with productivity continuing to rise but employment levels stagnating. They call the gap between increasing productivity and employment ‘the Great Decoupling,’ and the authors believe technology is behind it....the best way to both survive and then thrive in this coming transition is simple; embrace it as an Age of Adaptability. There is nothing an individual can do to stop these massive global trends in technology, economics, and demographics, other than adapt. Even reacting to the trends is insufficient, since their scale and velocity are will leave you scrambling to catch up, not mind getting ahead. The only solution is to adapt by becoming a lifelong learner, failing fast if necessary, and learning to get ahead of the changes.

This ability to adapt starts with a mindset that the status quo is not a safe haven, but the place of greatest risk. It means accepting complete responsibility for your destiny, rather than subordinating your well-being to other groups or people. It requires you to take 100 per cent control of your circumstances, particularly if you are responsible for a family, or other people in the form of a business. It entails moving to a state of absolute clarity and awareness of the coming onslaught of change, and then taking a personal leadership role in making incremental, but permanent, changes to your life now.

John Chambers
FROM THE MAY 2015 ISSUE

Mr. Chambers said that customers are the best indicators of when to make investments in new technology. “That’s one reason I spend so much time listening to CIOs, CTOs, and CEOs during sales calls,”

JAMES BRADSHAW - MEDIA REPORTER
The Globe and Mail
Published Friday, Apr. 17 2015

DAVID BERMAN - BANKING REPORTER
The Globe and Mail
Published Tuesday, Mar. 31 2015

By DAVID STREITFELD MARCH 9, 2015.

The last decade has not been as kind to Kleiner. Entrepreneurs have less need of venture capitalists and their cash, because it is cheaper to start a company and they now have other funding sources. Kleiner also had self-inflicted wounds: An ambitious bet on alternative energy companies, also known as green tech, did not work out as well as hoped, and many opportunities were missed in consumer Internet companies. When the events at issue in the trial took place — roughly 2008 to 2012 — the firm downsized.

A struggling firm in a struggling industry is, as all connoisseurs of digital disruption know, bound to be filled with unhappiness....Kleiner was a firm in flux, Mr. Hirschfeld recalled. One woman he talked to said Kleiner “seemed to be moving from a brand called KP to a brand of individuals that are part of KP. It was now becoming more of a cult of personality, and each personality had its own brand.” ...Kleiner is coming off at the trial as a place where, whatever its undoubted excellence, the loudest people win, the most aggressive win, and those who can find a mentor by sucking up win. This does not sound like a family, a meritocracy or even a place that is a successful investor over the long term.

Why didn’t Kleiner realize this in 2012, when Mr. Hirschfeld submitted his 26-page report?

Perhaps the firm was focused on the narrow issue: whether Ms. Pao was the subject of discrimination. Mr. Hirschfeld’s answer was no, and so maybe the details did not matter.

By LAURA STEVENS
Feb. 24, 2015

BRENDA BOUW
Special to The Globe and Mail
Published Tuesday, Feb. 17 2015