What I Learned From Developing Branding for Airbnb, Dropbox and Thumbtack

Article from First Round Review

There are plenty of theories for why YouTube became one of the fastest growing startups in Silicon Valley history. Julie Supan says the reason is simple: “We sold the emotion.”

When she became the company’s first head of marketing and communications in December 2005, she immediately hunkered down with its cofounders to decide what—and who—they were about. Unlike other video-sharing sites at the time (and it’s easy to forget now that there were hundreds), YouTube was built in Flash (every other product required people to download software), it didn’t curate long-form professional content, or take the celebrity-driven approach that many advisors were suggesting. They weren’t even particularly concerned about video quality.
Instead, they doubled down on ensuring YouTube was a “stage for everyone to participate”—specifically someone who was simply looking to have a human experience, to laugh, to share their talents, to learn something.

“My team focused on showing not telling by promoting videos that people loved — whether it was a video of otters holding hands, a young woman singing in her bedroom, a man sharing his stories of WWII, or somebody teaching viewers how to fix a sink. What we cared most about was how it made them feel.”

Celebrities and brands would follow, of course, as would that $1.65B acquisition by Google. But it was the everyday user who defined YouTube’s strategy and introduced the world to a new kind of virality.

Since leaving the company in 2009, Supan has become one of the most sought-after branding experts in Silicon Valley, helping companies like Dropbox, Airbnb and Thumbtack craft their positioning prior to launch. Her first step? Identifying their target user—the high-expectation customer. In this exclusive interview, she explains who that is, how to find them, and why every startup needs to ditch generic platitudes and start speaking to the people who will really care.

Position with Precision

“Positioning is the big bet a company is making over the long term,” says Supan. “It’s the strategy for building your business, product, and brand. It’s the clear action plan that will translate into positive revenue, happy customers and a great place to work.” Your position isn’t your messaging or your product roadmap—but it is the foundation of every decision you’ll make along the way.

Before you can embrace where you’re going, you need to understand who you’re taking with you. “Identifying the one thing you do really well that is original and defensible is the first step. Then you have to align your business, product, operations and marketing to ensure that you are building precisely what customers need—even if they didn’t realize they needed it until it came into their lives.”

To kick off her positioning work, Supan walks founders through five key questions:

Who is the customer that needs/wants your service or product most?
Why does your product or service matter to them?
How do they feel about your product or service?
What is its true benefit to them?
Will your product exceed their expectations?

The name of the game here is precision. “If you’re working with shared or autonomous vehicles, ask: if I don’t have to drive my own car someday, then, what will I be able to accomplish now that I will get some time back in my day?” says Supan. “Or for that storage startup: If my life’s work is in the cloud, how will that change what my workday looks like?” Think about the customer who’ll get the most out of your product, so you can speak directly to them — and bet on their emotion.”

What Supan sees more often than not, though, is the opposite approach: Early-stage founders, eager to look good for that next funding round or earn enough to make it another month, go after every possible user. They launch their products with a chorus of generalities—“We’re going to change your life!” or “Revolutionize X!”—in an attempt to be something for everyone. After all, the goal is to rack up users, and a DAU is a DAU, right?

Wrong.

“Founders are told that they need to bring up their daily active users, their monthly active users. They need to make sure they have the right level of activity. They need to make sure they have the right level of retention. They need to have the right level of acquisition. It’s a lot,” says Supan. “And they believe that appealing to every customer is one way of solving these problems.”

But Supan asks founders one more question—an easy one—to highlight the folly of that line of thinking: Could you do all of that on the product side?

“They will always say, ‘Well, of course not,’” she says. “Resources are constrained. They have to force rank what they can build. Well, series A- and B–stage companies don’t have the resources to target every customer, either. Be selective about which customers you speak to and which ones you don’t.””

Moreover, a “see what sticks” approach in the early days can be a dangerous drain on your internal processes and staff morale. When a company lacks focus, that plays out in its day-to-day operations. “Meetings run longer, decisions get delayed. People get frustrated not having a clear strategy that they’ve bought into,” says Supan.

“All of this means that you have every reason to do this work, to figure out your precise target customer for the short and long-term. Even if it means taking a couple of months to really nail this down. What’s a couple of months in the roughly 5-10 years you’ll spend betting on this customer to build and grow the company?”

Enter the High-Expectation Customer

The first and most crucial step to successful positioning, then, is to define your ideal user—what Supan has coined “the high-expectation customer.”

“The high-expectation customer, or HXC, is the most discerning person within your target demographic. It’s someone who will acknowledge—and enjoy—your product or service for its greatest benefit,” says Supan. That discernment is key, because this customer is also someone who can help startups spread the word.

The HXC needs to be a person who others aspire to emulate because they see them as clever, judicious and insightful.

The high-expectation customer is a good consumer. They’re someone who can be trusted to know the market and make good decisions. “They look things up. They research things. And they have ideas for new types of products or services that can help them save money, gain time, get healthier or make their team more productive,” says Supan. “If your product exceeds their expectations, it can meet everyone else’s.”

Consider who this customer is for some well-established companies:

Airbnb: This HXC is invested in being a good global citizen, and doesn’t want to simply visit new places but to belong. “It’s the guest who wants to ‘live like a local’ and experience Paris as if they are living there,” says Supan. “They’re energized by the idea of staying in unique spaces and feeling welcomed, but are cost-conscious, too.”

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Startups like Airbnb that build a two-sided marketplace—guests and hosts, riders and drivers, buyers and sellers, etc.—may be wrangling twice the people, but their process for identifying the HXC doesn’t actually look that different. “The company does have to take a position. While Airbnb will say consistently that the hosts are their business—and that is true—the position of the company is toward the guest. It’s about belonging,” says Supan.

But there’s no rivalry there; hosts relate to that position. “They, too, want to open their homes to learn about different cultures, and increase their income to be more self-reliant. They understand who Airbnb’s guest is and want to welcome them,” says Supan. “And, many hosts are also Airbnb guests, which is typical of marketplaces where the top sellers can also be the top buyers. Messaging, in these cases, may change depending on which side of the marketplace you’re talking to, but your positioning should not.”

“There are more riders, joiners, attendees, viewers, customers, guests, and buyers in the world than there are drivers, organizers, creators, pros, hosts, sellers,” says Supan. “If you bring in the largest audience in the world, you will bring in the best video creators. Same is true for Airbnb — if you bring in all the guests in the world, hosts are motivated to showcase their unique spaces and participate in this new sharing economy.”

Dropbox: “This one may come as a surprise, because people used to think of them as just a file sharing and syncing technology company. But the Dropbox high-expectation customer is actually a person who wants to simplify his or her life,” says Supan. “They’re trusting, organized, tech-savvy, and looking for ways to get some time back in their day. They want to know they’re covered, that someone has their back when it comes to their life’s work, which is primarily in their computers—family photos, videos, work files, school docs.”

That’s not every Dropbox user; plenty of people just use their free account to share a file here and there. But that’s the idea: your HXC should not be an all-encompassing persona. “The high-expectation customer will benefit from the product’s greatest attributes and spread the word. Then others will say, ‘If it works for my tech-savvy friend Lisa or if it works for Tishman Construction, which built the World Trade Center and was an early power user of Dropbox, then it will probably work for me,’” says Supan.

Lululemon: Of course, companies outside of tech benefit from well-defined HXCs, too. Chip Wilson, founder of Lululemon, described his company’s two “muses” in a 2015 New York Times piece: Ocean, a 32-year-old single professional woman, inspired his initial target market and was later followed by Duke, her 35-year-old male counterpart, an “athletic opportunist.”

These weren’t just demographic sketches—Wilson understood his muses, his HXCs, down to their daily routines. Ocean, for example, owns a condo and likes to travel. She has about an hour and a half to work out each day. Of her, Wilson told the Times, “If you’re 20 years old or you’re graduating from university, you can’t wait to be that woman. If you’re 42 years old with a couple children, you wish you had that time back.”
Why Your HXC Isn’t Necessarily Your Early Adopter

It’s tempting to assume your early adopters are also your HXCs, but that’s not always the case—and failing to make that distinction can prove challenging to a young company.

Take FlightCar, the airport car-sharing startup that matched outgoing, car-owning travelers with incoming visitors. The company’s earliest adopters were its monthly car-sharing customers—those car owners who traveled extensively and were wooed by the notion that they could earn a guaranteed monthly payment for cars that would otherwise sit idle, accruing parking fees. “Our early ads had dollar signs all over them,” says Supan, who came on to help FlightCar shift its strategy and rebuild the product last year.

While those early customers did quickly drive supply and volume, they weren’t invested in the company’s underlying mission. “We built the entire model—the business model, the operations model, the marketing model—around a target who didn’t embody the sharing economy. Those users didn’t value their role or see themselves as part of a car sharing community helping people become more self-reliant,” says Supan. “And when it came to helping FlightCar grow, they didn’t care about that either. When there was a problem, they were the first to write angry Yelp reviews. They had no interest in helping the company improve its policies or being open to changes as the company began to evolve the business model and improve operational efficiencies. Because there was very little goodwill, the company was not given the benefit of the doubt as it expanded from one airport in the U.S. to 17 locations.”

In parallel, another customer set was growing organically from the very beginning, which they called the standard customers, a very different type of user. Acquired by word of mouth, they were invested in the self-reliance of the sharing economy, and embraced their role as beta testers of a new concept. They were excited to save money on parking while they were away and earn a little extra money while renting their car to a visitor who came to their town. These were the high-expectation customers.

“They were the people that could have helped to create the right kind of growth, the customers that would promote a brand, spread the word over the years, and encourage others to follow and participate. But the model wasn’t built for them,” says Supan. “It had evolved with the paid customer as the North Star, and the company worked diligently for nearly a year to refocus and rebuild the FlightCar experience from the ground up. Ultimately, the team made a decision to sell its newly redesigned technology platform to Mercedes-Benz Research & Development North America, where it has become part of their innovation lab for global mobility services.”

Find Your HXC

It’s no exaggeration to say that correctly identifying the target customer can make or break a young company. Founders need to take the time to methodically define their HXC:

Do your research. This is not the time to guess or go with gut reactions. “A significant amount of customer research is required to deeply understand what people love, what frustrates them, what they believe your greatest challenges and true benefits are, and what they wish for in the long term,” says Supan.

She advises startups to gather data by targeting the full range of customers — happy, unhappy, recent, early, active, inactive — across geographies and through no fewer than five channels, including:

general population or decision maker surveys
single-question and open-ended surveys
single questions embedded into sales or marketing calls
phone interviews
customer service channels
product intercept surveys
app store reviews
“You might even have to create new channels and build features to capture data as people are engaging with your product or service,” she says.

Equally important at this stage is what not to do. “Don’t ask customers questions about features or about your UI. Tools such as Usertesting.com won’t work for this kind of research. The people who agree — and are paid — to test products tend to be much more polite and less passionate about your product,” says Supan. “And if you can predict the answer to a question, don’t ask it. You shouldn’t cut your survey or interview short, but be mindful of people’s time, too. I recommend letting the customer know that you are doing a survey to better understand how they feel about the product and that their thoughts will go directly into the company’s strategy.”

Calibrate the data. And don’t rush it—this can take several weeks of your team’s time. Looking at the insights gathered across channels, begin to identify the common themes in your data. Ask these questions to surface these trends:

What are you seeing that was expected and unexpected?
What direction are those results pointing you in?
How does that align with your current strategy, roadmap and team?
Define your customer. With your aggregated data in hand, it’s time to start sketching out the profile of your high-expectation customer. This is where you’ll identify the specific personality traits and characteristics that define the target audience.

If you’ve designed your surveys well, you can often look to respondents’ own words for a head start. “One of my favorite questions is ‘How would you define the kind of person that would benefit from this product most?’” says Supan. “When people answer, they usually describe themselves. It’s a great way to ask the ‘Who are you?’ question while making people feel like they are describing someone else.”

Calibrate again. Before wrapping up, Supan suggests running through some final questions to make sure you’ve hit on an HXC you can really live with:

Who looks up to this person?
Is this person someone people feel they can relate to or aspire to be?
Can you put yourself in their shoes and see your product from their point of view?
What would cause them to be disappointed by your product and what do you have to do to ensure this won’t happen?
Consider Your Customer’s Mindset

Once you’ve defined your HXC, you’re almost there. To get the most mileage out of that definition, though, you need to put it in the context of the customer’s past experiences—their consumer ecosystem and the biases they bring to your product. Otherwise put, you need to consider whether they’re coming to you with a growth mindset or a fixed mindset.

If your target customer has a growth mindset, great. “In those cases, users are incredibly open. They’ve never tried this before, and they can’t even imagine it can exist. Take the first time people discovered the most unique of spaces on Airbnb: ‘Wow, I can stay the night in a windmill?’ There’s no context for that so they are excited and amazed,” says Supan.

Other times, users will come to you with a fixed mindset, and it’s important your product inspires and encourages them to reimagine what’s possible and then delivers. “Take Thumbtack, the leading online marketplace for local service professionals. Many customers come to the site thinking, ‘Contractors don’t call back. They’re hard to reach. I’m going to have to make 11 calls to find out if one is available,’” says Supan. “Thumbtack is aware of this mindset having done extensive customer research very early on. The team is positioning the company with a ‘you can do it’ approach, using statements like ‘Customers use Thumbtack to get millions of projects done quickly and easily.’”

Having done that early research, Thumbtack has built and positioned its service to wow customers as soon as they request a pro to help them with their projects. “When the customer promptly gets a quote from an available, reputable pro without having to place calls and do the legwork, they’ve moved to a growth mindset and feel supported and valued by the company,” says Supan. “This customer is very likely to come back.”

“You can be more successful and generate goodwill speaking in an aspirational way to the customer rather than anti-positive messaging such as ‘This was broken before, but now we’ve fixed it,’” says Supan. “The goal is simply to guide the customer toward a spirit of openness so they can benefit in a positive way from change.”

To build anything transformative, you need a customer that’s willing to give you the benefit of the doubt.

Get the Team on Board

If that sounds like a personal relationship, in many ways it is. After all, you’re going to be spending an enormous amount of time with this “person.” Simply put, you need to like them. And you need your team to buy into the relationship, too.

“Brian Chesky, the CEO of Airbnb, has said, ‘You have to become the person you’re designing for,’” says Supan. “The entire team needs to agree that this person is worthy of their time. In many ways, they need to aspire to be the HXC, too.”

There’s no way around it: startups are a grind. If you’re not building something you want to build, it’s next to impossible to stick it out. “I’ve seen companies retool the entire company for a customer that they’re not excited about. Sometimes, I’ve talked to companies that don’t like or can’t relate to their high-expectation customer,” says Supan. “That is really difficult. That affects the culture. That affects hiring. That affects the energy of people on the team—their focus and commitment.”

On the flip side, nailing the high-expectation customer can be game-changing for a startup. “You’ll actually see a physical response from your team—newfound energy—if they agreed with and were part of defining the target customer. You’ll see more urgency and a sharper focus,” says Supan.

A clearly articulated HXC can even help focus your hiring. “In many ways, if you look at everyone that works at Lululemon, they channel Ocean,” says Supan. “When you get off the elevator for an interview at Airbnb, you’re literally group-hugged and welcomed. They define their customer in terms of love, caring about people, being a global citizen, and you need to feel that as soon as you step foot in the office.”

Hiring for shared sensibilities is not enough, though. You need to be deliberate about rolling out your HXC, and make this person a regular, familiar presence in the office. “Create a presentation or cheat sheet that can be shared with the whole team, offer a tutorial as part of onboarding new recruits or develop a scorecard of how well the product is doing in exceeding this customer’s expectations. Mention the HXC in all-hands meetings. Consider convening a focus group or ‘user council’ that reflects a cohort of HXC customers and run strategies and new features by them.”

Hit the Ground Running

Your work is not done, of course, once you’ve identified your high-expectation customer and brought the team on board. You need to incorporate that customer into the DNA of your company—your strategy, product roadmap, operations and marketing. “It can take 6–8 weeks to do this well and discuss how things need to be altered to exceed the expectations of your HXC,” says Supan. “In almost every company I’ve been a part of, we were able to review the product roadmap with a sharper perspective, freezing some features and in most cases building new ones that better reflected our new position and HXC.”

When it comes to marketing, the good news is that the work you’ve put in on the front end will quickly focus your strategy and messaging. Relieved of the burden of that “go after everyone” mindset, you can invest your sales and marketing dollars in acquiring and retaining a single customer target—they’ll take care of the rest. “There’s more objectivity in one customer sharing their passion and love for a product with another than there is in ads or promotion. It allows the company to spend less to achieve lasting growth,” says Supan.

Don’t be afraid to use your HXC’s own words, too. You invested in customer data-gathering—now mine the results for the language that will resonate most. “Customers will hear their own words and say, ‘Whoa. This product is for me.’”

Keep a close eye on nonverbal messaging, too, including your product’s look and usability. “If Dropbox was going to say ‘It just works,’ for example, their product needed to work everywhere, across every platform, in order to exceed the expectations of their HXC,” says Supan. “Their design vision must also line up with how the target customer feels about the product. One of the brand values is ‘We have your back.’ And there’s barely any UI with that product. It’s up in the right-hand corner. You almost never actually interact with it. It’s simple and understated, but you know it has you covered.”

Targeting your messaging doesn’t mean single-mindedly sticking to the first thing you try, though. “You do need to identify ways you can do some split testing on how that position is received by customer,” says Supan. “Look at every touch point. You’re not going to overhaul it all in one day, but ultimately you want it all in total alignment by a certain point when you’re ready to put a stake in the ground.”

The high-expectation customer is the truest form of virality.

Check Back In

At the end of the day, your HXC represents people—real people, living in the world—and you need to regularly revisit your target to make sure you’re still hitting the mark. Supan urges startup leaders to remain keenly attentive to shifts in their company or their market, and check in when their gut tells them to. “Maybe it’s every two or three years, when you’ve seen a certain amount of growth. At some point in the future you need to ask yourself again, ‘How has the world evolved, and what does my customer expect now? How might they have grown?’”

“I look at Twitter, and while I wouldn’t say they got their positioning wrong, I think they skipped the step of checking back in,” says Supan. “Early on, Twitter made the call to target celebrities and other media-savvy types eager for a new way to reach their fans. It’s been a successful strategy from a PR perspective, and those celebrity superusers have certainly reaped serious branding rewards. But the company’s slow growth suggests that while regular people enjoy a glimpse of celebrity, that doesn’t mean they’ll actively use the product themselves.

“No one can aspire to be Justin Bieber on Twitter. He has come a long way since he was a 12-year-old uploading homemade videos of himself singing on YouTube,” says Supan. “But I look at the Twitter product and say, ‘If it works for him it will definitely not be for me.’ He’s setting the bar so high you actually feel excluded. This HXC is not someone that people feel they can emulate or envision themselves to be.” (in other words you got to choose someone that’s more relatable). 

It’s easier said than done, but continually surveying and engaging with your customers is well worth the effort. “Employ someone creative and analytical who can manage ongoing multi-channel research and work closely with the product team,” says Supan. “And make sure that you are continually calibrating those insights against the HXC. Rarely have I seen a company shift their HXC entirely over the years, but it’s important to evolve with them and the world around you.”

The goal the first time around was to achieve consensus, and that’s true the second, tenth or hundredth time you check in on the HXC, too. “You’re always working toward a state where the market, the company, and your customer are in broad agreement about what you are and why you matter,” says Supan. As your company evolves, the HXC serves as a valuable touchstone to ensure that you’re growing in the right direction and to validate — or invalidate — your action plan.

“The best thing about identifying the HXC is that everyone — from employees to customers — gains peace of mind. Your users will understand the product, and know that it’s meant for them. You’ll slash your cost of customer acquisition and enjoy the benefits of a clear roadmap. With bias removed, your team can be more creative,” says Supan. “Keep checking in with your HXC and calibrating insights against them. Keep learning about them. If you do the work, they’ll lead you to consensus about what your company is—and what it isn’t.”

My Recent 6 Month Journey..

 

Robin Lee 李显龙

“People will forget what you said, people will forget what you did, but people will never forget how you made them feel”

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In December 2015, I left RHT Governance Risk AML Compliance Ethics Pte Ltd, the company I founded in 2014 with Adam Khan and Marjorie Sim that was acquired by RHTLaw TaylorWessing, the second largest law firm in Singapore. I had just accepted an offer to move back to Silicon Valley and the thought of raising my (then unborn) daughter out in sunny California was extremely appealing. However, due to some unforeseen personal circumstances, I had to turn down the offer and remain here in Singapore. It was a scary time but thankfully both mother and child are now doing great today. I am a firm believer in everything happening for a reason.

So what have I been up to since then? Well, “quite a bit” is the short answer. In addition to being a new dad (to describe this experience as “life-changing” is definitely no understatement to say the least!), I have been pursuing a combination of personal, business interests and a new full time role. On the personal front, I have:

a) Written, produced and recorded an album. In a former life I was a songwriter and as part of my personal “bucket list,” releasing an album was always a dream. I am proud to announce that this will soon become a reality!

In today’s world, where “micro-experiences” are increasingly gaining popularity (think purchasing individual songs), I believe that producing a great album has almost become a dying art. This was something the G.R.A.C.E. team and I used to constantly talk about and implemented first hand when it came to putting together our courses. These fantastics conversations were further continued with my good friend, Nicole Rose of Create Training (Compliance Officers, please do check out her stuff – it’s really quite phenomenal!) and rekindled my interest in doing something during this period. Hopefully, the final product will be a great listening experience – It’s hip hop and R&B so may not be everyone’s cup of tea! Please do message me if you are interested – I am always looking for feedback.

b) Hosting a weekly game show. During a cup of coffee with my 2 good friends Gary Ow and Suran Kularatna, the topic of lip-syncing came up and how it has become such a popular activity. We then asked ourselves – would a live version work in Singapore? So we tried it out!

Today, Lip Sync Showdown is now a regular fortnightly event where we have a lot of fun showcasing the nation’s lip-syncing talent. We have done 4 shows thus far and have a website here. For those of you based in Singapore or visiting, please do stop by!

c) Written a book. My good friend Steve Tunstall and I formed a book writing club with group of other friends where all we set ourselves a deadline to complete a book. Although I did not make the deadline, I have managed to complete around 90% and it should (hopefully) be available by the end of the year. My intention here is to provide an informative, yet geeky read that can be a value add and inspiration for the business leaders of tomorrow. Watch this space!

 

Now over to my professional pursuits. Currently, I sit on the boards for

a) ICFE Group of Companies. Fraud and Cybersecurity are 2 areas where I have significant personal interests. We have some interesting digital products and some exciting partnership announcements in the pipeline which I believe can significantly contribute to these ever growing spaces.

b) GRC Technology & Investments. Adrian Pay and I continue to look for new  investment opportunities. Dynamic-GRC is starting to take off and I do suggest you sync up with him to find out more.

c) Game Lab X. What started out as a great salesperson-customer relationship has evolved into a great friendship with Byong Chon, who has done phenomenally well with this venture. Our game Killer Dash is a hit and we have already entertained 2 acquisition and 3 investment offers in less than a year!

d) Inzsure. I can now officially brag to the world that I started something with Steve and Johnny even though it’s really Tunstall and Lloyd, not Jobs and Ive. Insurtech is a dynamic space and having the team we have assembled puts us at a distinct advantage from a knowledge, innovation and contact base perspective. We are excited to launch later this year.
In addition to this, you may have also seen that I have also joined Datarama. We have a great and dynamic founding team comprising of Raphael Bouzy and the team at TC Capital.  We have very much been in stealth mode working on an exciting Fintech/RegTech/M&A game-changing platform that we will be launching later this year.

Till now, I have deliberately avoided taking on a full time role. I said to myself that if I was to do so, I really need to be able to come in and make a difference internally and externally. I am extremely grateful that the Datarama family has most provided me with this opportunity. Please do stay tuned and let me know if you would like to be added to our mailing list. You can learn more about us atwww.datarama.com or please feel free to email me at robin@datarama.com.

The Future

So what’s on for the next 6 months? Well, I doubt any updates I have will equal the above but I promise I will try and provide them more frequently.

Thank you for taking the time to read this and please do reach out to me if there is anything you would like to discuss/ brainstorm/bounce ideas or even just grab a coffee if you are around!

What Elon Musk, Steve Jobs, Marc Benioff, and Philip Knight share.

• Published on September 20, 2016

This summer I read 4 books that focus on different founder journeys. It was particularly interesting to read them in succession, because it’s easier to pick out common themes.

1. Behind the Cloud by Marc Benioff (Salesforce)
2. Shoedog by Philip Knight (Nike)
3. Elon Musk by Ashlee Vance (Paypal, SpaceX, Tesla, SolarCity)
4. Steve Jobs by Walter Isaacson (Apple, NeXt, Pixar)

These are all wildly successful founders, with wildly differing journeys, that started different kinds of companies in different time periods.

Here are some of the common threads I noticed in their journeys to success.

1. It was really f*ing difficult and they had several failures.
2. They all obsessed about their business 24×7 and worked incredibly hard.
3. They all improved significantly over time.
4. They all made some bad decisions, but didn’t dwell on them.
5. They hired believers, not mercenaries.
6. They hired several key people through referrals.
7. They told their teams what to do, not how to do it.

Here are some of the common threads about their founding teams, which are often overlooked.

1. They had fun even in the worst of days.
2. When faced with difficulty, the teams rose to the challenge and relished the opportunity to become better, faster, stronger.
3. Every person on the team thought like a founder but acted like a craftsman.
4. They were constantly, severely, under-resourced, and they used this as an advantage.
5. Every person on the team worked 24×7 and insanely hard.
6. Arguments from team members centered around what was good for the company, not what was good for the individual.
7. The motivation for each team came from the desire to win, rather than the desire for a comfortable workplace or work-life balance.

Imagine Jobs without Woz or Atkinson, Benioff without the introduction to the Harris-Moellenhoff-Dominguez trio, Musk without folks like Shotwell and Mueller, or Knight without Woodell, Johnson, or Penny.

None of these founders could have achieved their visions without their believers. The individuals on each team were capable of becoming successful on their own, but instead they chose to be part of something bigger and make a dent in the universe together.

50 Ways Happier, Healthier, And More Successful People Live On Their Own Terms

1. Stop consuming caffeine

Although people think they perform better on caffeine, the truth is, they really don’t. Actually, we’ve become so dependent on caffeine that we use it to simply get back to our status-quo. When we’re off it, we underperform and become incapable.

Isn’t this absurd?

In his book, The Untethered Soul, Michael Singer argues that your energy should come from within — from your why — not from external stimulants. The scientific backing is substantial and unsurprising: intrinsic motivationdestroys extrinsic motivation every day of the week.

Motivation aside — healthy eating, sleeping, and intensive exercise produce higher quantities and quality of energy than caffeine ever could. A holistic approach to life is essential. Garbage in, garbage out.

Give up the caffeine and see what happens. To avoid withdrawal headaches — which are mostly placebo — replace your caffeine with something else (another placebo). After a few days without caffeine, you’ll develop confidence in your ability to function without it.

2. Pray or meditate morning, mid-day, and night

In a recent interview at the Genius Network mastermind event, Joe Polish asked Tony Robbins what he does to get focused. “Do you meditate? What do you do?” Joe asked.

“I don’t know that I meditate. I don’t know that I want to meditate and think about nothing,” Tony responded, “My goal is clarity.”

Instead of full-on meditation, Tony has a morning routine that includes several breathing exercises and visualization techniques that get him to a state of clarity and focus. For me, I use prayer and pondering (my version of meditation) as the same vehicle.

Whatever your approach, the goal should be clarity and focus. What do you want to be about today?

What few things matter most during the next 24 hours?

I’ve gotten the best results as:

• My morning prayer and meditation are motivational
• My afternoon prayer and meditation are evaluative and strategic
• My evening prayer and meditation are evaluative and reflective

3. Read 1 book per week

Ordinary people seek entertainment. Extraordinary people seek education and learning. It is common for the world’s most successful people to read at least one book per week. They are constantly learning.

I can easily get through one audiobook per week by just listening during my commute to school and while walking on campus. Taking even 15–30 minutes every morning to read uplifting and instructive information changes you. It puts you in the zone to perform at your highest.

Over a long enough period of time, you will have read hundreds of books. You’ll be knowledgeable on several topics. You’ll think and see the world differently. You’ll be able to make more connections between different topics.

Reference #19 on this list if you feel you’re “too busy” to read one book per week. There are methods to make this task extremely easy.

4. Write in your journal 5 minutes per day

This habit will change your life. Your journal will:

• Clear your emotions serving as your personal therapist
• Detail your personal history
• Enhance your creativity
• Ingrain and enhance your learning
• Help you get clarity on the future you want to create
• Accelerate your ability to manifest your goals
• Increase your gratitude
• Improve your writing skills
• Lots more…

Five minutes per day is more than enough. Greg McKeown, author ofEssentialism, recommends writing far less than you want to — only a few sentences or paragraphs at most. This will help you avoid burnout.

5. Marry the person you love

“For all the productivity and success advice I’ve read, shaped and marketed for dozens of authors in the last decade, I’ve never really seen someone come out and say: Find yourself a spouse who complements and supports you and makes you better.” — Ryan Holiday

Research done by economists have found — even after controlling for age, education, and other demographics — that married people make 10 to 50 percent more than single people.

Why would this be?

Being married gives you a higher purpose for being productive. You are no longer a lone ranger, but have another person who relies on you.

Marriage also smacks you in the face with what’s really important in life. Sure, hanging out and partying are fun. But too many people get stuck in this phase and miss the meaning that comes from building a life with someone.

You will never find a better personal development seminar or book than marriage. It will highlight all of your flaws and weaknesses, challenging you to become a better person than you ever thought possible.

Said Thomas Monson, “Choose your love; love your choice.” After you’ve chosen the person you love, love them. You don’t marry to make yourself happy, you marry to make someone else happy. Said Frankl in Man’s Search for Meaning, “For success, like happiness, cannot be pursued; it must ensue, and it only does so as the unintended side effect of one’s personal dedication to a cause greater than oneself or as the by-product of one’s surrender to a person other than oneself.”

6. Make a bucket list and actively knock items off

Most people have it backwards — they design their ambitions around their life, rather than designing their life around their ambitions (see this free eBook on how to quickly create your ideal life).

What are the things you absolutely must do before you die?

Start there.

Then design your life around those things. Or as Stephen Covey explained inThe 7 Habits of Highly Effective People, “Begin with the end clearly in mind.”

A simple mental exercise that may be helpful is imagining you only have 30 days to live. What would you do in those 30 days?

Now imagine you have 5 years to live. What would you do during those 5 years?

Get to work. The death-bed mentality is the only way to live. Stop pretending you’ll live forever. As Professor Harold Hill has said — “You pile up enough tomorrows, and you’ll find you are left with nothing but a lot of empty yesterdays.”

7. Stop consuming refined sugar

If you stop consuming sugar, your brain will radically change. Actually, study after study is showing that refined sugar is worse for our brains than it is for our waistlines. According to Dr. William Coda Martin, refined sugar is nothing more than poison because it has been depleted of its life forces, vitamins and minerals.

Refined sugar has now been shown to make us cranky, make us make rash decisions, and make us stupid.

Again, like caffeine, if you stop eating refined sugar, you will experience some negative withdrawals. But, like any good habit, the effects of this will be seen in the long-run. What would your health be like a year from now (or five) if you were completely refined sugar-free?

Said Albus Dumbledore, Headmaster of Hogwarts School of Witchcraft and Wizardry, “It is not our abilities that show what we truly are. It is our choices.”

8. Fast from all food and caloric beverages 24 hours once per week

One-day (24-hour) food fasts are a popular way to maintain health and vigor.Fasting leverages the self-healing properties of the human body. Radical health improvements occur when the digestive system is given rest and the organs get ample time to repair and heal themselves.

A regular practice of fasting can:

• Improve digestive efficiency
• Increase mental clarity
• Increase physical and mental vigor
• Remove toxins
• Improve vision
• Give a general feeling of well being

Like all the other habits, fasting gets easier with practice. I’ve been fasting for years and it’s one of the best things I have done for my health.

Fasting is also one of the most recognized techniques in religious and spiritual practices. I also use fasting to get spiritual clarity and refinement.

Honestly, I could go on for hours about this one. Give it a try. You’ll never be the same.

9. Fast from the internet 24 hours once per week

Your body gets an intervention when you fast. Your mind and relationships could use one too. Unplug yourself from the matrix.

If you haven’t caught on already, human beings are highly addictive creatures.We love our coffee, sugar, and internet. And these things are all great. But our lives can be far more enhanced by using these tools in wisdom.

The purpose of the internet fast is to reconnect to yourself and your loved ones. So, you probably shouldn’t do it the same day you do your food fast. Because eating is one of the strongest ways to form bonds.

You’ll be blown away by how much more connected you feel to your loved ones when you can give them your undivided attention. It may even feel awkward for a while having a real-life conversation without looking at your phone every three minutes.

10. Stop consuming the news or reading the newspaper

Although the amount of warfare and deaths by human hands are reducing globally, you will not get that message watching televised news or reading the newspaper.

On the contrary, these media outlets have an agenda. Their goal is to appeal to your fears by inflating extreme cases — making them seem normal and commonplace. If they didn’t do so, their viewership would plummet. Which is why Peter Diamandis, one of the world’s experts on entrepreneurship and the future of innovation has said, “I’ve stopped watching TV news. They couldn’t pay me enough money.”

You can get high quality news curated from Google news. When you detox from the toxic filth that is public news, you’ll be startled as your worldview becomes radically more optimistic. There is no objective reality. Instead, we live in perceived realities and are thus responsible for the worldview we adopt.

11. Do something everyday that terrifies you

“A person’s success in life can usually be measured by the number of uncomfortable conversations he or she is willing to have.” — Tim Ferriss

But you don’t have to constantly be battling your fears. Actually, Darren Hardyhas said that you can be a coward 99.9305556% of the time (to be exact). You only need to be courageous for 20 seconds at a time.

Twenty seconds of fear is all you need. If you courageously confront fear for 20 seconds every single day, before you know it, you’ll be in a different socio-economic and social situation.

Make that call.

Ask that question.

Pitch that idea.

Post that video.

Whatever it is you feel you want to do–do it. The anticipation of the event is far more painful than the event itself. So just do it and end the inner-conflict.

In most cases, your fears are unfounded. As Seth Godin has explained, our comfort zone and our safety zone are not the same thing. It is completely safe to make an uncomfortable phone call. You are not going to die. Don’t equate the two. Recognize that most things outside your comfort zone are completely safe.

12. Do something kind for someone else daily

“Have I done any good in the world today? Have I helped anyone in need? Have I cheered up the sad and made someone feel glad? If not, I have failed indeed. Has anyone’s burden been lighter today, because I was willing to share? Have the sick and the weary been helped on their way? When they needed my help was I there?” — Will L. Thompson (music and text)

If we’re too busy to help other people, we’ve missed the mark. Taking the time to spontaneously — as well as planned — helping other people is one of the greatest joys in life. Helping others opens you up to new sides of yourself. It helps you connect deeper with those you help and humanity in general. It clarifies what really matters in life.

As Thomas Monson has said, “Never let a problem to be solved become more important than a person to be loved.” That would truly be a failure.

13. Go to bed early and rise early

According to countless research studies, people who go to bed and rise early are better students. Harvard biologist Christoph Randler found that early sleep/risers are more proactive and are more likely to anticipate problems and minimize them efficiently, which leads to being more successful in the business.

Other benefits of going to bed and rising early — backed by research — include:

• Being a better planner
• Being holistically healthier as individuals
• Getting better sleep
• More optimistic, satisfied, and conscientious

Waking up early allows you to proactively and consciously design your day. You can start with a morning routine that sets the tone for your whole day. You show self-respect by putting yourself first. In your morning routine, you can pray/meditate, exercise, listen to or read inspiring content, and write in your journal. This routine will give you a much stronger buzz than a cup of coffee.

14. Get 7+ hours of sleep each night

Let’s face it: sleep is just as important as eating and drinking water. Despite this, millions of people do not sleep enough and experience insane problems as a result.

The National Sleep Foundation (NSF) conducted surveys revealing that at least 40 million Americans suffer from more than 70 different sleep disorders;furthermore, 60 percent of adults, and 69 percent of children, experience one or more sleep problems a few nights or more during a week.

In addition, more than 40 percent of adults experience daytime sleepiness severe enough to interfere with their daily activities at least a few days each month — with 20 percent reporting problem sleepiness a few days a week or more.

On the flip side, getting a healthy amount of sleep is linked to:

• Increased memory
• Longer life
• Decreased inflammation
• Increased creativity
• Increased attention and focus
• Decreased fat and increased muscle mass with exercise
• Lower stress
• Decreased dependence on stimulants like caffeine
• Decreased risk of getting into accidents
• Decreased risk of depression

And tons more… Google it.

15. Replace warm showers with cold ones

Tony Robbins doesn’t consume caffeine at all. Instead, he starts every morningby jumping into a 57-degree Fahrenheit swimming pool.

Why would he do such a thing?

Cold water immersion radically facilitates physical and mental wellness. When practiced regularly, it provides long-lasting changes to your body’s immune, lymphatic, circulatory and digestive systems that improve the quality of your life. It can also increase weight-loss because it boosts your metabolism.

A 2007 research study found that taking cold showers routinely can help treat depression symptoms often more effectively than prescription medications.That’s because cold water triggers a wave of mood-boosting neurochemicals which make you feel happy.

To me, it increases my willpower and boosts my creativity and inspiration.While standing with the cold water hitting my back, I practice slowing my breathing and calming down. After I’ve chilled out, I feel super happy and inspired. Lots of ideas start flowing and I become way motivated to achieve my goals.

Here’s a tip if you’re just starting out: start your shower warm, as usual. Let the warm water on your muscles allow you to stretch them out. After you’re stretched and washed, completely turn-off the warm and completely turn-on the cold. It really isn’t too bad at all. It feels incredible. Just do it for 60–90 seconds, then get out. You’ll be very pleased.

16. Say “No” to people, obligations, requests, and opportunities you’re not interested in from now on

“No more yes. It’s either HELL YEAH! or no.” — Derek Sivers

Your 20 seconds of daily courage will most consistently involve saying “no” to stuff that doesn’t really matter. But how could you possibly say “no” to certain opportunities if you don’t know what you want? You can’t. Like most people, you’ll be seduced by the best thing that comes around. Or, you’ll crumble under other people’s agendas.

But if you know what you want, you’ll have the courage and foresight to pass up even brilliant opportunities — because ultimately they are distractors from your vision. As Jim Collins said in Good to Great, “A ‘once-in-a-lifetime opportunity’ is irrelevant if it is the wrong opportunity.”

17. Say “Thank you” every time you’re served by someone

It’s amazing when you meet someone who is expressively and genuinely grateful. It’s amazing because, frankly, it’s rare.

I remember one day while working as a busser of a restaurant as a teenager.Every time I went by a certain table, whether I was refilling waters, bringing food, anything… the kid at the table (no more than 20 years old) graciously said “thank you.” I even heard him from close proximity saying it to all the other employees when they stopped by his table.

This experience had a dramatic impact on me. It was so simple what he was doing. Yet, so beautiful. I instantly loved this person and wanted to serve him even more.

I could tell by how he looked in my eyes when saying “thank you” that he meant it. It came from a place of gratitude and humility.

Interestingly, one study has found that saying “thank you,” facilitated a 66 percent increase in help offered by those serving. Although altruism is the goal, don’t be surprised as your habit of graciously saying “thank you” turns into even more to be thankful for.

18. Say “I love you” 3+ times a day to the most important people in your life

According to neuroscience research, the more you express love (like gratitude), the more other people feel love for you. Sadly, people are taught absurd mindsets about being vulnerable and loving in relationships. Just this morning, my wife and I had to coax and prod our three foster kids to say one nice thing about each other, and to say they loved each other.

It took several minutes for our 8 year old foster boy to muster the strength to say he loved his sister. Yet, all of our kids constantly berate and belittle each other.

You know the feeling: when you want to say “I love you” but hold back. What a horrible feeling.

Why do we hesitate to express our love?

Why do we hesitate to connect deeply with others?

This may be strange, but if you tell your friends and family you love them,they’ll be blown away. I once knew a Polynesian missionary who told everyone he loved them. It was clear he was sincere.

I asked him why he did it. What he told me changed my life. “When I tell people I love them, it not only changes them, but it changes me. Simply by saying the words, I feel more love for that person. I’ve been telling people all around me I love them. They feel treasured by me. Those who know me have come to expect it. When I forget to say it, they miss it.”

“The bitterest tears shed over graves are for words left unsaid and deeds left undone.” –Harriet Beecher Stowe

19. Consume 30 grams of protein within the first 30 minutes of waking up

Donald Layman, professor emeritus of nutrition at the University of Illinois, recommends consuming at least 30 grams of protein for breakfast. Similarly, Tim Ferriss, in his book, The 4-Hour Body, also recommends 30 grams of protein 30 minutes after waking up.

According to Tim, his father did this and lost 19 pounds in one month.

Protein-rich foods keep you full longer than other foods because they take longer to leave the stomach. Also, protein keeps blood-sugar levels steady, which prevents spikes in hunger.

Eating protein first decreases your white carbohydrate cravings. These are the types of carbs that get you fat. Think bagels, toast, and donuts.

Tim makes four recommendations for getting adequate protein in the morning:

• Eat at least 40% of your breakfast calories as protein
• Do it with two or three whole eggs (each egg has about 6g protein)
• If you don’t like eggs, use something like turkey bacon, organic pork bacon or sausage, or cottage cheese
• Or, you could always do a protein shake with water

For people who avoid dairy, meat, and eggs, there are several plant-based proteins. Legumes, greens, nuts, and seeds all are rich in protein.

20. Listen to audiobooks and podcasts on 1.5 or 2x speed, your brain will change faster

Listening to audiobooks at normal speed is so three years ago. There is a going trend — particularly in Silicon Valley — to listen to audiobooks at 150 or 200 percent called “speed listening.”

In 2010, the tech blog GigaOm suggested “speed-listening to podcasts” as an overall time-saving technique. Software called FasterAudio promises to “cut your audio learning time in half.”

If you want to get hardcore, a particularly useful tool is Overcast — a podcast-playback app with a feature called Smart Speed. Smart Speed isn’t about simply playing audio content at 150 or 200 percent of the standard rate; but actually attempts algorithmically to remove fluff (e.g., dead air, pauses between sentences, intros and outros) that bulks up the play time of audio content.

Use this technique and you’ll be consuming as much information as you once consumed caffeine.

21. Decide where you’ll be in five years and get there in two

“How can you achieve your 10 year plan in the next 6 months?” — Peter Thiel

There is always a faster way than you originally conceive. Actually, goal-setting can slow your progress and diminish your potential if you rely too heavily upon it.

In an interview with Success Magazine, Tim Ferriss said that he doesn’t have five or ten year goals. Instead, he works on “experiments” or projects for a 6–12 week period of time. If they do extremely well, the possible doors that could open are endless. Tim would rather play to the best possibilities than get stuck on one track. He says this approach allows him to go drastically farther than he could ever plan for.

22. Remove all non-essentials from your life (start with your closet)

“You cannot overestimate the unimportance of practically everything.” — Greg McKeown

Most of the possessions you own, you don’t use. Most of the clothes in your closet, you don’t wear. Get rid of them. They are sucking energy from your life. Also, they are dormant value waiting to be exchanged for dollars.

Getting rid of underutilized resources is like injecting motivation and clarity into your bloodstream. While all of that untapped energy gets removed, a new wave of positive energy comes into your life. You can use that energy in more useful and productive ways.

23. Consume a tablespoon of coconut oil once per day

Coconut oil is one of the healthiest foods on the planet.

Here are 7 reasons you should eat coconut oil every single day:

• It boosts HDL (good) cholesterol and simultaneously blocks LDL (bad) cholesterol buildup
• It has special fats that help you burn more fat, have more energy, and maintain healthy weight
• It fights aging and keeps you looking and feeling young
• It reduces fever and acts as an anti-inflammatory
• It is antibacterial and thus wards off possible illnesses
• It improves memory and cognitive functioning (even for people with Alzheimer’s)
• It can boost testosterone for men and balance healthy hormones level for both men and women

Coconut oil is a healthy alternative to caffeine. Eating a small amount will give you a shot of energy without the side-effects.

24. Buy a juicer and juice a few times per week

Juicing is an incredible way to get loads of vitamins and nutrients from fruits and vegetables. These nutrients can:

• Help protect against cardiovascular disease, cancer and various inflammatory diseases
• Guard against oxidative cellular damage from everyday cellular maintenance and exposure to chemicals and pollution.

There are several approaches you can take to juicing. You can reset your body by doing a 3–10 day juice “cleanse.” Or, you could simply incorporate juice into your regular diet. I do both from time to time.

I always feel enormously better after juicing. Especially when I get lots of intense greens like kale into my system.

25. Choose to have faith in something bigger than yourself, skepticism is easy

In the timeless book, Think and Grow Rich, Napoleon Hill explains that a fundamental principle of wealth creation is having faith — which he defines as visualization and belief in the attainment of desire.

As Hill famously said, “Whatever the mind can conceive and believe, the mind can achieve.”

If you don’t believe in your dreams, the chances of them happening are slim to none. But if you can come to fully know the things you seek will occur, the universe will conspire to make it happen.

According to Hill (see page 49 of Think and Grow Rich), here’s how that works:

• “Faith is the starting point of all accumulation of riches!”
• “Faith is the basis of all ‘miracles’ and mysteries that cannot be analyzed by the rules of science!”
• “Faith is the element that transforms the ordinary vibration of thought, created by the finite mind of man, into the spiritual equivalent.”
• “Faith is the only agency through which the cosmic force of Infinite Intelligence can be harnessed and used.”
• “Faith is the element, the ‘chemical’ which, when mixed with prayer, gives one direct communication with Infinite Intelligence.”

Like expressing love, in our culture, many have become uncomfortable with ideas like faith. Yet, to all of the best business minds in recent history, faith was fundamental to their success.

26. Stop obsessing about the outcome

Research has found that expectations in one’s own ability serves as a better predictor of high performance than expectations about a specific outcome. In his book, The Personal MBA, Josh Kaufman explains that when setting goals, your locus of control should target what you can control (i.e., your efforts)instead of results you can’t control (e.g., whether you get the part).

Expect optimal performance from yourself and let the chips fall where they may. The organic output will be your highest quality work. Put most simply:Do what is right, let the consequence follow.

27. Give at least one guilt-free hour to relaxation per day

In our quest for success, many of us have become workaholics. However,relaxation is crucial for success. It is akin to resting between sets at the gym. Without resting, your workout will be far less than it could have been.

Foolishly, people approach their lives like a workout without rest breaks. Instead, they take stimulants to keep themselves going longer and longer. But this isn’t sustainable or healthy. It’s also bad for productivity and creativity in the short and long run.

28. Genuinely apologize to people you’ve mistreated

People make mistakes several times every single day. Sadly — and hilariously — much of the time we act like kids and blame our mistakes on external factors. Research has found that people who don’t openly and often apologize experience higher levels of stress and anxiety.

You don’t need that pent-up energy in your life. Make amends and let it go. It’s not your choice if people choose to forgive you.

29. Make friends with five people who inspire you

“You are the average of the five people you spend the most time with.” — Jim Rohn

Who you spend time with is incredibly important. Even more fundamental is:what types of people are you comfortable around?

Your comfort level is one of the clearest indicators of your character. Are the people you enjoy being around inspiring or degrading, hard-working or lazy?

What kinds of beliefs do you friends have?

What kinds of goals are they pursuing?

How much money do they make?

What does their health look like?

All of these things dramatically impact you. And it is one of the most painful experiences in the world to become uncomfortable around people who have long been your friends. When you grow and evolve and long for more, you’ll begin seeking a different crowd to surround yourself with.

Misery loves company. Don’t let them hold you back. Move on but never detach from the love you have for those people.

30. Save 10 percent or more of your income

“I would have saved 10 percent automatically from my paycheck by direct deposit into a savings account earning the best possible interest compounded daily. I would have also disciplined myself to deposit 10 percent of any additional money from gifts, refunds or other earned income. I would have bought a small house outright with the money I had saved (instead of renting an apartment for over 30 years). I would have found a job that I loved and devoted my life to it. At least you could be happy even if you were not where you wanted to be financially. Hope this helps someone out there.” — D. Lorinser

Tithing yourself is a core principle of wealth creation. Most people pay other people first. Most people live above their means.

In total, American consumers owe:

• $11.85 trillion in debt
• An increase of 1.4% from last year
• $918.5 billion in credit card debt
• $8.09 trillion in mortgages
• $1.19 trillion in student loans
• An increase of 5.9% from last year

The U.S. Census in 2010 reported that there were 234.56 million people over the age of 18 years old, suggesting the average adult owes $3,761 in revolving credit to lenders. Across the average household, American adults also owe $11,244 in student loans, $8,163 on their autos, and $70,322 on their mortgage.

Simply switching to home-brewed coffee will save you an average of $64.48 per month (or $2 per day) or $773.80 per year. By putting the savings into a mutual fund with average earnings of 6.5% interest and reinvesting the dividends into more mutual funds over a decade, the $64.48 saved every month would grow into $10,981.93.

My wife once took an accounting class from a world-renowned accountant. His words on the first day of class, “The most important thing you’ll learn in this class, which most people will never learn: spend less than you earn. If you do this, you’ll be financially free.”

31. Tithe or give 10 percent of your income away

“One gives freely, yet grows all the richer.” — Proverbs 11:24

Many of the wealthiest people in the world attribute their healthy financial life and abundance to giving some of it away.

Most people are trying to accumulate as much as they can. However, a natural principle of wealth creation is generosity. As Joe Polish has said, “The world gives to the givers and takes from the takers.”

From a spiritual perspective, everything we have is God’s (or the Earth’s). We are merely stewards over our possessions. When we die, we don’t take our money with us. So why hoard it?

As you give generously and wisely, you’ll be stunned by the increases in your earning potential. You’ll develop traits needed for radical wealth creation.

32. Drink 64–100 ounces of water per day

Human beings are mostly water. As we drink healthy amounts of water, we have smaller waistlines, healthier skin, and better functioning brains. Actually, as we drink enough water, it’s safe to say we’re better in every way.

It’s a no-brainer. If you’re not drinking the healthy amount of water each day, you should critically assess your priorities in life.

33. Buy a small place rather than rent

Unless you live in a big city (which many of you do), I’m baffled how many people pay outlandish amounts on rent each month.

When my wife and I moved to Clemson to begin graduate school, we did a lot of front end work to ensure we’d be able to buy a home. What’s shocking is that our mortgage payment is far less than most of our friend’s rent payments. By the end of our four years here in Clemson, we’ll have earned several thousand dollars in equity and even more in appreciation. Conversely, many of our friends are simply dumping hundreds of dollars into someone else’s pockets every month.

Paying rent is like working hourly. You get money while you’re on the clock. When you’re not on the clock, you get no money. Earning equity is like having residual income. Every month you pay down your mortgage, you actually keep that money. So you’re not “spending to live” like most people do. You’re living for free while saving — often earning in appreciation.

34. Check your email and social media at least 60–90 minutes after you wake up

Most people check their email and social media immediately upon waking up. This puts them in a reactive state for the remainder of the day. Instead of living life on their own terms, they’d rather respond to other people’s agendas.

Hence, the importance of having a solid morning routine. When you wake up and put yourself, not other people first, you position yourself to win before you ever begin playing. As Stephen Covey has taught in his book, Spiritual Roots of Human Relations, “Private victory always precedes public victory.”

Make the first few hours of your morning about you, so that you can be the best you can for other people. My morning routine consists of prayer, journal writing, listening to audiobooks and podcasts while I workout, and taking a cold shower.

After I’ve had an epic morning, and I’m clear on the direction of my day, I can utilize email and social media for my benefit rather than detriment.

35. Make a few radical changes to your life each year

Reinvent yourself every year. Novelty is an antidote to monotony. Jump into new pursuits and relationships.

Try things you’ve never done before.

Take risks.

Have more fun.

Pursue big things you’ve been procrastinating for years.

In 2015, my wife and I went from having no kids to having three foster kids (ages 4, 6, and 8). I’ve started blogging. I quit my job and started writing full-time. I completely changed my diet. I’ve changed my entire daily routine.

This year has been just as transformative as the last. It’s taught me that you can change your whole life in one year. I plan on changing my whole life for the better every year.

Change freaks people out. It immediately pulls you from your comfort zone. Which is exactly what you need. You’ll often feel like a fraud. But impostor syndrome is exactly what you should be seeking. Do your best to always be the dumbest person in the room and you’ll improve rapidly.

36. Define what wealth and happiness mean to you

“Be everything to everybody and you’ll be nothing for yourself.” — John Rushton

No two human beings are the same. So why should we have one standard of success? Seeking society’s standard of success is an endless rat-race. There will always be someone better than you. You’ll never have the time to do everything.

Instead, you recognize that every decision has opportunity cost. When you choose one thing, you simultaneously don’t choose several others. And that’s okay. Actually, it’s beautiful because we get to choose our ultimate ideal.

We must define success, wealth, and happiness in our own terms because if we don’t, society will for us — and we will always fall short. We’ll always be left wanting. We’ll always be stuck comparing ourselves and competing with other people. Our lives will be an endless race for the next best thing. We’ll never experience contentment.

37. “Change the way you feel, think, and act about money” — Steve Down

Most people have an unhealthy relationship with money. It’s not necessarily their fault; it’s what they were taught.

In order to change your financial world, you need to alter your paradigm and feelings about money.

Here are some key beliefs the most successful people in the world have:

• In a free-market economy, anyone can make as much money as they want.
• Your background, highest level of education, or IQ is irrelevant when it comes to earning money.
• The bigger the problem you solve, the more money you make.
• Expect to make lots of money. Think BIG: $100,000, $500,000, or why not $1 million?
• What you focus on expands. If you believe in scarcity, you’ll have little.
• If you believe there is unlimited abundance, you’ll attract abundance.
• When you create incredible value for others, you have the right to make as much money as you want.
• You’re not going to be discovered, saved, or made rich by someone else. If you want to be successful, you have to build it yourself.

When you develop a healthy relationship, you will have more. You won’t spend money on the crap most people waste their money on. You’ll focus more on value than price.

38. Invest only in industries you are informed about

Warren Buffett doesn’t invest in technology because he doesn’t understand it.Instead, he invests in banking and insurance. He’s not a tech guy. He invests in what he understands.

Yet, so many people invest in things they don’t understand. I’ve made that mistake. I once invested several thousand dollars in an overseas rice distribution. Although the investment sounded incredible on paper, it’s turned out to be a disaster.

I didn’t have the understanding to make an informed decision. I put my trust in someone else’s hands. And no one cares about your success more than you do.

From now on, I’m going to responsibly invest in things I can make informed decisions on.

39. Create an automated income source that takes care of the fundamentals

We live in unprecedented times. It has never been easier to create automated income streams. No matter your skill-set and interests, you can put a business in place that runs 24/7 even while you’re sleeping, sitting on the beach, or playing with your kids.

An entrepreneur is someone who works for a few years like no one will so they can live the rest of their life like no one else can.

If you want to free up your time and energy for the things that matter most, either invest in stuff you’re informed on (e.g., real estate, businesses, mutual funds), or, create a business that doesn’t require you (e.g., create an online educational course about something you’re passionate about).

40. Have multiple income streams (the more the better)

Most people’s income comes from the same source. However, most wealthy people’s income comes from multiple sources. I know people with hundreds of income streams coming in each month.

What would happen if you set things up so you were getting income from 5 or 10 different places each month?

What if several of those were automated?

Again, with a few short years of intentional and focused work, you can have several income streams.

41. Track at least one habit/behavior you’re trying to improve

“When performance is measured, performance improves. When performance is measured and reported, the rate of improvement accelerates.” — Thomas Monson

Tracking is difficult. If you’ve tried it before, chances are, you quit within a few days.

Research has repeatedly found that when behavior is tracked and evaluated, it improves drastically.

It’s best to track only a few things. Maybe just one at a time.

If you want to track your diet, a fun approach is taking a picture of everything you eat. Everything. This allows you the time to determine if you really want to put that in your body.

So, your tracking can be creative. Do what works for you. Use a method you will actually do. But start tracking.

As a consultant and executive coach, tracking and reporting behavior, daily, has been the number one factor in my client’s success. When you track something, you become aware of it. When you report something, you becomeaccountable to it.

Most of my clients simply send me an email at the end of their workday with a few bullet points (e.g., I did 4 hours of work on my startup, I made 3 sales, I didn’t check social media before noon). Accountability to a spreadsheet or app is not the same as accounting to a person — particularly one you trust and respect.

42. Have no more than 3 items on your to-do list each day

When you shift your life from day-to-day reactivity to one of creation and purpose, your goals become a lot bigger. Consequently, your priority list becomes smaller. Instead of doing a million things poorly, the goal becomes to do a few things incredibly — or better yet, to do one thing better than anyone else in the world.

“If you have more than three priorities, then you don’t have any.” — Jim Collins

So, instead of trying to do a million small things, what one or two things would make the biggest impact?

Dan Sullivan, founder of Strategic Coach, explains that there are two economies: The Economy of Hard Work and The Economy of Results.

Some people think hard work is the recipe. Although this is completely true, the effort is often misplaced. Most people focus on the process or work first, and the result second. Conversely, those who determine the outcomes their seeking first can better discern which strategy will be most effective. Sure, that strategy may be out of your comfort zone, but as Tim Grover has said inRelentless, “When you crave the end result, the hard work becomes irrelevant.”

Tim Ferriss, in his book, The 4-Hour Body, explains what he calls Minimum Effective Dose (MED), which is simply the smallest dose that will yield a desired result and anything past the MED is wasteful. Water boils at 100°C at standard air pressure — it is not “more boiled” if you add more heat.

What is the fastest way to get your desired outcome?

43. Make your bed first thing in the morning

According to psychological research, people who make their bed in the morning are happier and more successful than those who don’t. If that’s not enough, here’s more:

• 71 percent of bed makers consider themselves happy
• While 62 percent of non-bed-makers are unhappy
• Bed makers are also more likely to like their jobs, own a home, exercise regularly, and feel well rested
• Whereas non-bed-makers hate their jobs, rent apartments, avoid the gym, and wake up tired.

Crazy, right?

Something so simple. Yet, when you make your bed first thing in the morning, you knock-off your first accomplishment of the day. This puts you in a mindset of “winning.”

Do it! It only takes 30 seconds.

44. Make one audacious request per week (what do you have to lose?)

“Rainmakers generate revenue by making asks. They ask for donations. They ask for contracts. They ask for deals. They ask for opportunities. They ask to meet with leaders or speak to them over the phone. They ask for publicity. They come up with ideas and ask for a few minutes of your time to pitch it. They ask for help. Don’t let rainmaking deter you from your dream. It’s one of the barriers to entry, and you can overcome it. Once you taste the sweet victory of a positive response, you’ll not only become comfortable with it, you might even enjoy it. But making asks is the only way to bring your dream to life.” — Ben Arment

I got into graduate school way after applications were due because I asked.

I’ve gotten free NBA tickets by asking a few players I saw at a hotel.

I’ve gotten my work published on high tier outlets because I ask.

Very few things in life are just randomly given to you as an adult. In most cases, you need to earn it and/or ask for it.

Yet, there are many opportunities currently available to everyone if they would muster the courage and humility to ask.

The entire crowdfunding industry is based on making asks.

Start making bold and audacious asks. What’s the worst that could happen? They say “No”?

What’s the best that could happen?

When you don’t ask, you lose by default. And you’ll never know the opportunities you missed out on.

Don’t sell yourself short. Ask that beautiful girl on a date. Ask for that raise or big opportunity at work. Ask people to invest in your idea.

Put yourself out there. You’ll be blown away by what happens.

45. Be spontaneously generous with a stranger at least once per month

Life isn’t all about what you can achieve or acquire. It’s more about who you become and what you contribute.

Interestingly, research done at Yale has found that people are instinctively cooperative and generous. However, if you stall and think about being helpful or generous, you’re less likely to do it. And the longer you wait, the likelihood of you being helpful diminishes. This principle applies to other areas as well, like creativity. The longer you wait to do something, the less likely it is you’ll do it.

So, be spontaneous. When you get the wild thought of buying the person’s food in the car behind you, just do it. Don’t think about it.

If you’re driving down the road and see someone with car trouble off to the side, just do it. Don’t think about it.

When you want to say “I love you,” to a loved one, just do it. Don’t think about it.

Paralysis by analysis is dumb. And Malcolm Gladwell explains in Blink that snap-decisions are often far better than well-thought out ones.

46. Write and place a short, thoughtful note for someone once per day

The messages of handwritten letters impact deeper and are remembered longer than electronic messages. There is no comparison to this traditional form of conversation. Handwritten messages are so powerful that people often keep these notes for a long time. Sometimes a lifetime.

Jack Canfield has taught that writing 3–5 handwritten notes per day will change your relationships. In our email world, it can seem inefficient to hand-write and mail a letter. But relationships aren’t about efficiency.

Not only will handwriting letters change your relationships, it will change you. Research has shown that writing by hand increases brain development and cognition more than typing can.

Consequently, the things you write will be seared into your own memory as well, allowing both you and the recipient to reflect back on cherished moments.

Writing handwritten notes spices up your relationships, adding an element of fun. It’s exciting placing kind and loving notes in random places for your loved ones to find. Put a note under the windshield wipers of your loved one’s car to find after a hard day’s’ work. Hidden, wait til they come out and watch them from across the street. You’ll see their eyes light up and smile spread.

Other fun places include:

• In the fridge
• In the closet
• On the computer keyboard
• In their shoe
• In their wallet
• The mail box

Anywhere that makes the experience a surprise…

47. Become good friends with your parents

Many people have horrible relationships with their parents. I once did myself.Growing up can be tough and sometimes our parents make horrible decisions that negatively impact us.

However, my parents have become my best friends. They are my confidants. I turn to them for wisdom and advice. They understand me like no one else. Biology is a powerful thing.

Although I don’t see things the same way my parents do, I love them and respect their viewpoints. I love working out with my dad and talking about big ideas with my mom.

I couldn’t imagine not being close to them.

If your parents are still around, rekindle those ties or increase the flame. You’ll find enormous joy in those relationships.

48. Floss your teeth

About 50 percent of Americans claim to floss daily. My guess is that’s a large over-estimate. Either way, the benefits of flossing are incredible.

Doing so daily prevents gum disease and tooth loss. Everyone gets plaque, and it can only be removed by flossing or a deep cleaning from your dentist.Plaque buildup can lead to cavities, tooth decay, and gum disease. If left untreated, gum disease can be a risk factor for heart disease, diabetes, and a high body mass index.

Yes, not flossing can make you fat.

Not only that, but it greatly reduces bad breath.

49. Eat at least one meal with your family per day

If possible, eat a sit-down meal with your loved ones daily. It doesn’t matter if it’s breakfast, lunch, or dinner.

We’ve become so high-paced in the world that everything we do is on the go. We’ve forgotten what it means to just be with our loved ones.

Eating together creates a sense of community like nothing else.

Teens who have fewer than three family dinners a week are 3.5 times more likely to have abused prescription drugs and to have used illegal drugs other than marijuana, three times more likely to have used marijuana, more than 2.5 times more likely to have smoked cigarettes, and 1.5 times more likely to have tried alcohol, according to the CASA report.

50. Spend time reflecting on your blessings at least once per day

Gratitude is the cure-all for all the world’s problems. It has been called, “the mother of all virtues,” by the Roman philosopher Cicero.

When you practice gratitude, your world changes. There is no objective reality. All people perceive reality as they selectively attend to things that are meaningful to them. Hence, some people notice the good while others notice the bad.

Gratitude is having an abundance mindset. When you think abundantly, the world is your oyster. There is limitless opportunity and possibility for you.

People are magnets. When you’re grateful for what you have, you will attract more of the positive and good. Gratitude is contagious. It changes not only your world, but everyone else’s you come in contact with.

Call To Action

If you liked this article, check out my free eBook, Slipstream Time Hacking.This book teaches you how to decide what you WANT and get it 10x FASTER than the average person.

Get the book at this link right now.

Have an amazing day!

Technology Vision

Foreword

We are pleased to present the Accenture Technology Vision 2016, our annual view of the technology trends that will have a profound impact on enterprises for the next three to five years.

We are in the midst of a major technology revolution—specifically a digital revolution—with digital now dominating every sector of the economy. And we are seeing an important new shift as the technology revolution begins to put people first. To put it simply, as businesses become digital, their people and cultures must become digital, too.

The theme of our Accenture Technology Vision 2016, “People First: The Primacy of People in a Digital Age,” looks at the competitive advantage that awaits companies that move beyond digital culture shock to create a thriving digital culture. And we look at the early adopters who are leading the way.

High performers of the future won’t merely consume more technology. They will enable their people to accomplish more with technology. They will create new corporate cultures that use technology to enable people to constantly adapt and learn, create new solutions, drive change and disrupt the status quo.

The critical message from our Accenture Technology Vision 2016 is counterintuitive. While technology is the driver, it’s the people, not just technology, that will transform organizations for the future. Indeed, digital culture and talent is a clear differentiator in a highly competitive business environment and an increasingly digital world.

The Accenture Technology Vision 2016 is a must-read for leaders of organizations across industries and around the world. We hope it provides relevant ideas to help you in your journey to become a digital business and guides you as you transform your business—and your people—for digital success.

Introduction

People First: The Primacy of People in a Digital Age

Winners in the digital age do much more than tick of a checklist of technology capabilities. They know their success hinges on people. The ability to understand changing customer needs and behaviors is, of course, vital. But the real deciding factor in the era of intelligence will be a company’s ability to evolve its corporate culture to not only take advantage of emerging technologies, but also, critically, embrace the new business strategies that those technologies drive.

Succeeding in today’s digital world is a challenge that can’t be solved simply by consuming more and more technology, or, as some fear, replacing humans with technology.

Enterprises must focus on enabling people—consumers, workers and ecosystem partners—to accomplish more with technology. They will have to create a new corporate culture that looks at technology as the way to enable people to constantly adapt and learn, continually create new solutions, drive relentless change, and disrupt the status quo. In an age where the focus is locked on technology, the true leaders will, in fact, place people first.

Executive Summary

Digital Culture Shock

We are in the midst of a major technology revolution, specifically a digital revolution. Our research model and analysis shows that digital is now dominating every sector of the economy.

This global digital economy accounted for 22 percent of the world’s economy in 2015. And it’s rapidly growing, as we forecast those numbers to increase to 25 percent by 2020, up from 15 percent in 2005.¹

With digital pervading everything, it’s bringing with it ubiquitous and unprecedented amounts of change. There are new technologies and solutions, more data than ever before, legacy and new systems to tie together, an upsurge in collaboration (inside and outside the enterprise), new alliances, new startups…new everything. Meanwhile, out in the marketplace, digital customers are also maturing. Their dramatically transformed expectations of service, speed and personalization are just the start.

The rise of the millennial generation brings with it not just a new type of customer, but also a new kind of employee with very different outlooks and aspirations. This ‘born digital’ generation demands a world fashioned to its needs and new expectations about how work should be organized. Pervasive collaboration technologies are reconfiguring long- established norms of employment. The push toward freelance and portfolio careers is reshaping the workforce—how, when, and where.

These changes are no phase. Change, in fact, has become the new normal. According to our global technology survey of more than 3,100 IT and business executives, 86 percent of the executives anticipate that the pace of technology change will increase rapidly or at an unprecedented rate in their industry over the next three years. And many companies, already reeling from the impacts of technology and the changes they need to make in response, find themselves temporarily overwhelmed—some even paralyzed as they absorb the magnitude of the tasks ahead. That’s understandable.

But once they’ve paused for breath, they’ll need to start changing their products, their business models, and all of the processes that support them. They’ll need to develop new skills. And they’ll have to learn different, more agile ways of working across ecosystems composed of looser, partner-based collaboration. This requires a different way of looking at all the business’s moving parts—and particularly its people.

New ways of investing in their development, managing them and helping them adapt and embrace change are all foundational. The business is digital, so the organization, its people and its culture must now become digital too.

25% of the world’s economy will be digital by 2020.
Source: Digital Economic Value Index, Accenture, January 2016

Getting past the digital culture shock that so many businesses find themselves in today sounds daunting. But fortunately there are models already available for inspiration. Not only have many large tech companies established thriving digital cultures, but there are also early adopters in other industries showing the way ahead. Virgin America, for example, is the only airline based in Silicon Valley, and it has learned to think like the disruptive tech businesses that surround it. It has experimented with everything from in-flight social networks to rethinking how to buy tickets. The company even went so far as to collaborate with its frequent flyers: 30,000 people signed a Change.org petition to give the airline two gates at Dallas Love Field (which it was subsequently allocated). Virgin returned the favor with cash, by offering stock options to frequent flyers before the company went public. Most impressive of all, the rewards to the company have been very real: 2014 revenue of almost $1.5 billion and a $306 million initial public offering (IPO).²

How do you anticipate the pace of technology will change in your industry over the next three years?

28% say pace will increase at an unprecedented rate

58% say it will increase rapidly

12% say it will increase slowly

1% say it will remain the same

1% say it will decrease

Source: Accenture Technology Vision 2016 Survey

Pillars of the Corporate Cultural Shift

So what is a vibrant and successful digital culture built on? There are four key pillars. Enterprises will need to strive to be built for change, be data driven, embrace disruption, and be digitally risk aware.

Built for change

As perhaps the most basic of the four aspects, organizations must be built for change, which may mean changing how you operate as a company. Moving at the speed required for a digital business means developing new skills, new processes, new products, and whole new ways of working. Agile methodologies come to the fore. ‘New IT’ is essential, with DevOps models and practices to drive continual delivery, service- oriented architecture (SOA) and the cloud for scalability, software-as-a-service (SaaS) for efficiency, architectures built for agility, and platforms for collaboration.

The wraparound for all this is an acceptance of change by people, enterprise wide. Whatever their role, people need to expect change, understand its impact and keep pace with it by evolving and adding to their skills. Already, 37 percent of business and IT executives we surveyed report that the need to train their workforce is significantly more important today compared to three years ago. The most advanced organizations will become champions for change, harnessing the latest developments to grow and improve the business.

Data driven

As important (but still underdeveloped) is making the shift to becoming a fully data-driven organization. While much has been said over the last few years about increasing the capabilities within enterprises for using data and analytics, being truly data driven goes beyond just having better tools or even better skills. It means changing the basis for making decisions at every level of the company.

Instead of relying on gut instinct, traditional experience, or even the HiPPO principle (i.e., the highest-paid person’s opinion is paramount), what’s needed is for data to become so pervasive and readily available that it supports insight-driven decision- making throughout the enterprise.

This doesn’t just mean people using data—machines must also be equipped to harvest and act on intelligence. For shoe and apparel e-tailer Zappos, data transcends ad placements and site personalization, because they use it to make critical decisions about their customers—most notably, which are the customers they care about the most. Using a combination of their own and third-party data, Zappos’ marketing analytics team unearthed two key customer segments to find and nurture. The end result is still ads, but ads targeted at the right people. And to drive this data and consumer culture home, Zappos famously offers new hires $3,000 to leave after four weeks, effectively cutting loose anyone who is not inspired by the company’s obsessive customer focus.³

Embrace disruption

“Imagine a world in which these appliances are connected to each other. You’d have one of the largest platforms for distributing content and services and apps—even ads.”

David Eun,
Executive Vice President at Samsung

With people, at every level, driving change with new tools, new skills, and new machines, leaders will have a critical role to play. Instead of focusing primarily on efficiency gains from digital, the real frontrunners will embrace disruption as part of their corporate DNA, inspiring their people with a vision for how technology enables processes to be done differently—to be done better— so that the business can follow a completely new direction. As a key part of this, they’ll listen carefully to people—customers, partners and employees—using technology as the channel to deepen understanding of the emerging needs, requirements and attitudes that drive disruption. They’ll create and embed strategies to underpin their success in a dynamic world. And they’ll be at the forefront of reshaping their (and others’) industry’s boundaries— playing a lead role in the formation and coordination of existing and future ecosystems.

Take, for instance, what Samsung is doing. Samsung is pushing out a constant stream of next-generation wearables and smart appliances: refrigerators that text you when a door is left open, washing machines that use spot energy prices to determine when to run a load of laundry, robot vacuum cleaners controlled by a smartwatch or smartphone. “Imagine a world in which these appliances are connected to each other,” says David Eun, a Samsung executive vice president.

“What you’d have is one of the largest platforms for distributing content and services and apps—even ads.”4 Moreover, the disruption   doesn’t stop with Samsung’s products: on the people side the company launched its C-Lab program where employees pitch ideas as part of a competition. Winners take a year or more off from their regular job to run a small team to research and develop the idea.

Digital risk awareness

Unfortunately, change at the pace we’re seeing from the digital economy also creates new areas of risk. Compounding the risk is the recognition that the huge scale that gives software much of its opportunity also amplifies the potential problems. Digital businesses will encounter and create risks that traditional businesses were never exposed to: new security vectors; responsibility for consumer privacy; demand for transparent use of data; and questions around the ethical use of new technologies. In response, leaders will inherently need to take digital trust into consideration in everything they do. Security, privacy and digital ethics can’t be reverse- engineered around a technology; instead, they must be integral to the development process from the outset.

Digital Means People Too

We’ve come a long way in a short time. Companies no longer just serve customers; they collaborate with them. They no longer just compete with rivals; they partner with them. They’re no longer limited by industry boundaries; they ignore them. The connecting tissue for all this may be digital, but the defining factor is people. And it’s much, much more than a means of improving business today. Digital’s power is to drive fundamental change in the status quo—whether that’s the industries that companies operate in, the markets they serve or the talent they employ.

However, it’s increasingly clear that technology, on its own, will not be enough to propel organizations toward their new strategic objectives. Winners will create corporate cultures where technology empowers people to evolve, adapt, and drive change. In other words, the mantra for success is: ‘People First.’

Technology Vision 2016 Trends: Reinventing the World Again and Again

Digital is now firmly embedded in every business. But even with technology as an integral part of the organization and its strategy, it is people who will underpin success in a world that continues to reinvent itself at an unprecedented rate.

This year’s Accenture Technology Vision highlights five emerging technology trends shaping this new landscape. Although each trend starts with technology, as you read you’ll see our ‘People First’ theme flows through each of them. Tomorrow’s leaders are taking these trends on board and executing strategies to secure their clear digital advantage.

Trend 1: Intelligent Automation

Intelligent automation is the launching pad for new growth and innovation. Powered by artificial intelligence (AI), the next wave of solutions will gather unprecedented amounts of data from disparate systems and—by weaving systems, data, and people together—create solutions that fundamentally change the organization, as well as what it does and how it does it.

Trend 2: Liquid Workforce

Companies are investing in the tools and technologies they need to keep pace with constant change in the digital era. But there is typically a critical factor that is falling behind: the workforce. Companies need more than the right technology; they need to harness that technology to enable the right people to do the right things in an adaptable, change-ready, and responsive liquid workforce.

Winners will create corporate cultures where technology empowers people to evolve, adapt, and drive change.

Trend 3: Platform Economy

The next wave of disruptive innovation will arise from the technology-enabled, platform-driven ecosystems now taking shape across industries. Having strategically harnessed technology to produce digital businesses, leaders are now creating the adaptable, scalable, and interconnected platform economy that underpins success in an ecosystem-based digital economy.

Trend 4: Predictable Disruption

Every business now understands the transformational power of digital. What few, though, have grasped is quite how dramatic and ongoing the changes arising from new platform-based ecosystems will be. It’s not just business models that will be turned on their heads. As these ecosystems produce powerful, predictable disruption, whole industries and economic segments will be utterly redefined and reinvented.

Trend 5: Digital Trust

Pervasive new technologies raise potent new digital risk issues. Without trust, businesses cannot share and use the data that underpins their operations. That’s why the most advanced security systems today go well beyond establishing perimeter security and incorporate a powerful commitment to the highest ethical standards for data.

Completing the Picture

Accenture’s Technology Vision comprises a three-year set of technology trends. While each year we highlight the latest trends, it’s important to recognize that each trend represents just part of the picture. As enterprises continue their journey toward becoming digital businesses, they will need to keep up with the latest evolutions in technologies, and continue to master those that have been maturing. These technologies are quickly becoming the base for how enterprises build their next generation of business, as well as the catalysts for many of the trends that we discuss this year.

Technology Vision Evolution 2014–2016

The 2016 trends represent an evolution from our reports from the past two years:

Accenture Technology Vision 2015: Digital Business Era—Stretch Your Boundaries

The Internet of Me: Our World, Personalized

As everyday objects are going online, so too are experiences— creating an abundance of digital channels that reach deep into every aspect of individuals’ lives. Forward-thinking businesses are changing the ways they build new applications, products, and services. To gain control over these points of access, they are creating highly personalized experiences that engage and exhilarate consumers without breaching their trust. The companies that succeed in this new ’Internet of Me’ will become the next generation of household names.

The Outcome Economy: Hardware Producing Hard Results

Intelligent hardware is bridging the final gap between the digital enterprise and the physical world. As leading enterprises come face to face with the Internet of Things, they are uncovering opportunities to embed hardware and sensors in their digital toolboxes. They are using these highly connected hardware components to give customers what they really want: not more products or services, but more meaningful outcomes. These ‘digital disrupters’ know that getting ahead is no longer about selling things—it’s about selling results. Welcome to the ‘outcome economy.’

The Internet of Me: Our World, Personalized

As everyday objects are going online, so too are experiences— creating an abundance of digital channels that reach deep into every aspect of individuals’ lives. Forward-thinking businesses are changing the ways they build new applications, products, and services. To gain control over these points of access, they are creating highly personalized experiences that engage and exhilarate consumers without breaching their trust. The companies that succeed in this new ’Internet of Me’ will become the next generation of household names.

The Outcome Economy: Hardware Producing Hard Results

Intelligent hardware is bridging the final gap between the digital enterprise and the physical world. As leading enterprises come face to face with the Internet of Things, they are uncovering opportunities to embed hardware and sensors in their digital toolboxes. They are using these highly connected hardware components to give customers what they really want: not more products or services, but more meaningful outcomes. These ‘digital disrupters’ know that getting ahead is no longer about selling things—it’s about selling results. Welcome to the ‘outcome economy.’

The Platform (R)evolution: Defining Ecosystems, Redefining Industries

Among the Global 2000, digital industry platforms and ecosystems are fueling the next wave of breakthrough innovation and disruptive growth. Increasingly, platform-based companies are capturing more of the digital economy’s opportunities for strong growth and profitability. Rapid advances in cloud facilities and mobility not only are eliminating the technology and cost barriers associated with such platforms, but also are opening up this new playing field to enterprises across industries and geographies. In short: platform-based ecosystems are the new plane of competition.

Accenture Technology Vision 2014:

Every Business is a Digital Business—From Digitally Disrupted to Digital Disrupter

Digital–Physical Blur: Extending Intelligence to the Edge

The real world is coming online, as smart objects, devices, and machines increase our insight into control over the physical world. More than just an Internet of Things, it’s a new layer of connected intelligence that augments employees, automates processes, and incorporates machines into our lives. For consumers, this provides new levels of empowerment because they are highly informed and can interact and influence the way they experience everything around them. For their part, organizations now get real-time connections to the real world that allow machines as well as employees to act and react faster—and more intelligently.

From Workforce to Crowdsource: Rise of the Borderless Enterprise

Picture a workforce that extends beyond your employees—one that consists of any user connected to the internet. Cloud, social, and collaboration technologies now allow organizations to tap into vast pools of human resources across the world, many of whom are motivated to help. Channeling these efforts to drive business goals is a challenge, but the opportunity is enormous. Such an approach can give every business access to an immense, agile workforce that not only is better suited to solving some of the problems that organizations struggle with today, but in many cases will do it for free.

Data Supply Chain: Putting Information into Circulation

Yes, data technologies are evolving rapidly, but most have been adopted in piecemeal fashion. As a result, enterprise data is vastly underutilized. Data ecosystems are complex and littered with data silos, limiting the value that organizations can get out of their own data by making it difficult to get to. To truly unlock that value, companies must start treating data more as a supply chain, enabling the data to flow easily and usefully through the entire organization—and eventually throughout the organization’s ecosystem of partners as well.

Harnessing Hyperscale: Hardware is Back (and never really went away)

Eclipsed by more than a decade of innovation in software, the hardware world is now a hotbed of new development as demand soars for bigger, faster, more efficient data centers. Every company will see the benefits of ’hyperscale‘ innovation trickle into its data center in the form of cost reduction; but as companies digitize their businesses, more and more will see these systems as essential to enabling their next wave of growth.

Business of Applications: Software as a Core Competency in the Digital World

The way we build software is changing. Mimicking the shift in the consumer world, enterprises are rapidly moving from applications to apps. Yes, there will always be big, complex enterprise software systems to support large organizations, and it will still be necessary for IT developers to keep customizing those systems, providing updates and patches, and more. But now, as organizations push for greater operational agility, there is a sharp shift toward simpler, more modular apps. The implications for IT leaders and business leaders alike: they soon have to decide not just who plays what application development role in their new digital organizations but also how to transform the nature of application development itself.

Architecting Resilience: Built to Survive Failure, the Mantra of the Nonstop Business

In the digital era, businesses are now expected to support the nonstop demands that their employees and stakeholders place on business processes, services, and systems. This shift to support ever-changing priorities has ripple effects throughout the organization, especially in the office of the chief information officer, where the need for ’always on‘ IT infrastructure, security, and business process economics can mean the difference between business as usual and the erosion of brand value. As a result, today’s IT leaders must ensure that their systems are designed for failure rather than designed to spec.

Trend 1

Intelligent Automation: The essential new co-worker for the digital age

Leaders will embrace automation not just to take advantage of the breakneck pace of digital change, but also to create a new digital world where they hold competitive advantage. Machines and artificial intelligence will be the newest recruits to the workforce, bringing new skills to help people do new jobs, and reinventing what’s possible.

Customers at Singapore’s Timbre restaurant will notice something is different. Instead of waiters carrying dishes to and from the kitchen, autonomous drones now fly dirty dishes off customer tables.¹ Visitors to Siemens’ so-called ‘lights out’ manufacturing plant will notice a change, too, as Siemens has automated some of its production lines to the point where they can run unsupervised for several weeks.

This is intelligent automation in action today. On the surface it may appear to be a simple transfer of tasks from man to machine. But look a little closer. The real power of intelligent automation lies in its ability to fundamentally change traditional ways of operating, for businesses and individuals. These machines offer strengths and capabilities (scale, speed, and the ability to cut through complexity) that are different from—but crucially complementary to—human skills. And their increasing sophistication is invigorating the workplace, changing the rules of what’s possible so that people and their new digital co-workers can together do things differently. And do different things.

Look again at Siemens’ lights out manufacturing plant. While it may seem like a transfer of tasks from people to machines, for Siemens it’s a step toward a larger goal of creating the fully self-organizing factory (aka Industrie 4.0). Here, machines will largely organize themselves, supply chains will automatically link themselves together, and orders will be directly converted into manufacturing information that is incorporated into the production process. This will make the industrialized manufacture of highly customizable products a reality. Before you assume that people are cut out of this loop, you should recognize that even Siemens’ lights out manufacturing plant requires 1,150 employees to support it. They just have different roles than before, as many are now focused on programming, monitoring, and machine maintenance.²

Machines and artificial intelligence will be the newest recruits to the workforce, bringing new skills to help people do new jobs, and reinventing what’s possible.

Intelligent automation is being used across multiple industries to create new value for businesses and society alike.

Natural Language Processing: Finance companies apply NLP to compliance and fraud prevention by monitoring electronic communications at financial institutions to identify relationships and entities across threads.

Computer Vision: Law enforcement uses computer vision on facial recognition systems to identify or verify a person from a digital image or a video frame from a video source.

Knowledge Representation: Healthcare providers use a system to analyze massive amounts of data to extract useful sections, such as doctor names, costs, and number of complaints, in order to create a clean and easy way to find the root cause of declining clinic performance.

Reasoning and Planning: Automated planning and scheduling, typically for execution by autonomous robots and unmanned vehicles, from warehouse to retail store to household.

Examples like these are popping up everywhere as leading organizations are driving more and more of their processes into smarter machines. Their goal is not restricted to performing the same tasks faster and more efficiently. They’ve understood that intelligent automation changes the rules by empowering the creation of new products and services on a scale that was previously infeasible. And they’re already rethinking what they do across every area of the enterprise—from their business processes right through to the customer experiences they provide.

Far from killing jobs and creating a dehumanized future, pioneering companies are using intelligent automation to drive a new—and much more productive—relationship between people and machines. Leaders are exploiting this potential. For example, luxury retailer Moda Operandi was able to scale and improve its high-touch customer service, where stylists provide personalized recommendations and one-to-one communications with clients. By building a new personalization engine that allows a single stylist to work with up to 300 customers (compared to 50–75 previously), the company is able to offer the same luxury services to its valued clients as it does to its very top customers.³

Discussions and projections about the possibilities of automation and artificial intelligence have been swirling around for decades. So why are changes like these starting to take off now? The answer lies in part simply in the increased footprint of digital technology. As more and more business processes and even objects are touched by software, the scope of what can possibly be automated has expanded exponentially. The second part of the answer lies in advances in application of AI technologies.

Fundamental Change in IT

Rather than just being looked at as an add-on, AI now represents a fundamental change in how IT systems are built. As a new foundational layer of IT architecture, an increasing number of tools are being created that allow machines to become more sophisticated in how they learn and make decisions. This means that the process of actually automating these tasks becomes much easier. Examples abound: from Google’s now open-sourced image recognition software to IPsoft’s AI platform, Amelia, that automates knowledge work and is able to speak to customers in more than 20 languages.

These tools, and many others like them, are making the AI industry a renewed focus of interest for investors and Global 2000 organizations alike. Funded with venture capital, AI startups in the US alone have increased 20-fold in the past four years.4 And in our Technology Vision survey, 70 percent of corporate executives said they are making significantly more investments in AI-related technologies than two years ago, with 55 percent stating that they plan on using machine learning and embedded AI solutions like Amelia extensively.

70% of executives are making significantly more investments in artificial intelligence technologies than they did in 2013.

For all its focus, it is important to note that incorporating artificial intelligence into the business will not be a trivial task. For a start, enterprises will have to redefine both their business and IT architectures. The use of artificial intelligence at each layer means that firms will be essentially doing things differently, and that includes incorporating AI as a new and important layer in that architecture.

Technology leaders already see the amazing potential of intelligent automation and how it will inevitably pervade every aspect of business, but all enterprise leaders must also now look beyond the potential of automation to simply cut costs. The companies that will grow and dominate their industries will be those that systematically embrace automation across their organizations, using it to drive the changes to their products, services, and even business models as they continue to transform themselves and their industry.

2015–2018 Robot Sales Forecast

Professional Service Robots:
152,400 units
$19.6 billion

Personal Service Robots:
35 million units
$12.2 billion

Rapid technology advancements are opening up new possibilities for innovation, intelligence, and automation.

• Unprecedented data volumes: By 2020, there will be more than 44 zettabytes of data, 35 percent of which will be considered useful for analysis.⁶

• Decreasing cost of storage: Over the past 30 years, the cost per gigabyte of hard disk data storage has halved every 14 months, from $3,488,630 in 1980 to $0.03 in 2015.⁷

• Virtually unlimited computing power: Public cloud computing was estimated to reach almost $70 billion in 2015 worldwide.⁸

• Advances in artificial intelligence technologies: AI startups in the US alone have increased 20-fold in the past four years.⁹

• Broadening IT scope: 88 percent of executives agree the IT organization needs to broaden its scope and keep pace with evolving IT needs.¹⁰

Innovate and Evolve

What will that mean in practice? Intelligent automation will enable enterprises to innovate and evolve by increasing their agility, reducing the complexity of systems and operations, accelerating their time to market, and creating the ability to experiment continually with new products and services.

For example, many pioneering companies are now deploying intelligent automation to transform their use of data. Paxata is showing data scientists where to focus their efforts by automatically finding meaningful relationships within vast data lakes. Adobe Target has automated not just the personalization of ad experiences, but the creation of experiments on those experiences to figure what features a consumer will find compelling, thereby enabling marketing executives to test their ideas without involving IT. Pointing the way ahead, Bloomsbury.ai, a London-based startup, has announced plans to release a demo enabling people with no programming skills to carry out complex data analytics.¹¹ Bloomsbury.ai claims that, with training, its technology could be used for everything from art creation to consumer products.

It’s not just in IT systems that automation is driving real change. It’s happening out in the physical world too: improving mining safety by letting men and machines work side by side in a way that takes the most dangerous tasks off the shoulders of people (e.g., intelligent ‘worms’ monitoring hazardous mining operations), changing the rules of e-commerce by driving ever closer to same-day delivery (e.g., 30,000 Kiva robots helping Amazon to meet rising customer demand), easing urbanites’ lives with intelligent street lighting and predictive traffic control, and boosting crop yields through precision agriculture (e.g., companies such as AquaSpy and AGCO, which are already using intelligent automation to support ’digital’ farming).

• Robotic Surgery: da Vinci enables a surgeon to operate with enhanced vision, precision, and control.
• Retail Service Bot: OSHbot can answer simple customer questions, identify items, search inventories,    act as a guide, and even summon hardware experts for a video chat.
• AI Kiosk: The FURo-S Smart Service Robot can interact with FURo-S to help people buy tickets, ask for directions, and even sit through annoying advertisements.
•  Robot Butler: The robotic butler at Aloft hotel delivers amenities to guest rooms.

Intelligent automation thrives when it’s paired with people to drive better outcomes.

Consumer experiences, too, across the board are set for automation. Coles Supermarkets is piloting Hiku, a countertop barcode reader, to enable its consumers to automatically order groceries from home.12 Control4,   a home automation company, has created a solution to give home owners an unprecedented amount of control by automating features in the home—from whole-house audio to a secure network of cameras to door- locking mechanisms and light and temperature controls. And when we look a little into the future, we see even more. For example, Panasonic is working on creating the so-called ‘Laundroid,’ a washing- machine robot that washes, dries, and folds your clothes.¹³

All these examples show not only how the pace of change is accelerating, but also the pressure that all companies are under to reinvent themselves. In fact, 82 percent of executives we surveyed agree that organizations are being increasingly pressed to reinvent themselves and evolve their business before they are disrupted from the outside or by their competitors. Intelligent automation has become a key enabler of the changes they need to make.

Businesses will only be able to manage the enormous wave of complexity that arises from pervasive digital change if they can seamlessly harness and integrate, at scale, everything that’s coming their way—new products, new services, new technology tools, new business models, new alliances, new ecosystems and more. Meeting that challenge demands new skillsets and a very different workforce. And that will be made possible by the pervasive introduction of intelligent automation—the essential new co-worker for the digital age.

Predictions

Apps by Me: Consumers will be able to build simple, custom apps through voice commands, gestures and more to their devices. Soon, every person will become a programmer.

Age of Avatars: We’ll see widespread use of avatars and robots who we will send to be where we can’t be and do things we can’t—or don’t want to—do.

Key Takeaways

• Intelligent automation will give you new-found power to drive change.
• AI will become a core competence—a pervasive capability for every aspect of your business.
• Take a ‘People First’ approach by adapting the enterprise’s organization, culture, skills, and experience to use AI.

Intelligent automation isn’t an option, it’s mandatory. The question is whether you have the capabilities to not just use it, but also implement it across every aspect of your organization and maximize the benefits.

Intelligent Automation: 100-Day Plan

Over the next three months, develop a comprehensive understanding of the current state of intelligent automation and artificial intelligence. This should include how it is currently used in your enterprise and its optimal application in your company.

1. Identify the artificial intelligence and analytics capabilities your company uses today to provide a capabilities and gap analysis. Understand the advantages that artificial intelligence provides, from making decisions to self-evolution and discovering opportunities for innovation. How would you build your company differently to take advantage of these?

2. Take an inventory of labor-intensive business processes and identify appropriate opportunities to invest in automation and machine-learning capabilities. These can help to improve operational capabilities and scale analytics.

3. Identify specific applications that require frequent and manual updates, rapid scaling, data extracts, and/or a high degree of personalization. If an application relies on data, classify it as a top candidate for artificial intelligence, such as machine learning for self-evolution.

4. Map these examples/use cases against your current business processes and corporate strategy to prioritize specific opportunities—to catch up or gain new advantages.

5. Cultivate your data talent: develop a plan to build, buy, and/or partner to support your data and your automation know-how.

6. Map the implications of tasks being automated—the changes to roles, organization needs, processes and skills. Determine what needs to be done fundamentally differently once certain automated tasks are removed from the human side of the workforce.

7. Create a ‘People First’ strategy for transitioning the organization, training on new skills, and implementing the changes.

Intelligent Automation: 365-Day Plan

A year from now, enterprises should begin to infuse automated intelligence throughout their    organization to spur change—by providing rule-based automation capabilities, implementing new machine-learning technologies, and evaluating the latest artificial intelligence products.

1. Review your top candidates for automation projects as determined in your 100-day plan. Implement artificial intelligence technologies that address one of these use cases. Quantify its business impact and use those cost savings to justify the next project(s).

2. Create the impact and transition plans required to scale the automation project. Proper planning will enable a smooth transition, so that the workforce and processes can work well alongside the newly automated elements.

3. Develop machine-learning skills internally by implementing a machine-learning software solution that utilizes a defined data set for a very specific use case. This solution should benefit from advanced analytics, such as a personalization application.

4. Pilot a machine-learning solution that discovers new data associations. Review the outcomes with an eye toward identifying new opportunities for growth and innovation, such as a new customer segment or creating a new product.

5. Review your machine-learning use cases with a questioning eye. Set up a quality assurance process to support or refute the conclusions being drawn and subsequent actions taken. Have your data scientists confirm that the datasets are complete and accurate and that the algorithms are appropriate.

6. Create a training program to ensure that your data scientists and software engineers are educated in the latest deep-learning and AI technologies, specifically in natural language processing and image recognition. Give them time to research and develop potential solutions with these new technologies.

7. Establish a top-down strategic commitment to artificial intelligence and data science, including R&D investment, innovation programs, and production development.

Trend 2

Liquid Workforce: Building the workforce for today’s digital demands

Companies are investing in the tools and technologies they need to keep pace with constant change in the digital era. But to achieve their ambitious goals, leaders are refocusing on an often overlooked factor: the workforce. They are looking at technology as not just a disrupter, but also an enabler to transform their people, projects, and entire organizations into a highly adaptable and change-ready enterprise. In short, business leaders are realizing their new liquid workforce can become their new competitive advantage.

Walk through the doors of any tech startup, and you expect to find work being done differently. After all, these companies are renowned for their innovative culture, agility, and passion for reinvention. What most people don’t expect is to see these same traits in traditional companies. But take a look at GE. The company is actively changing its culture from a conventional Global 2000 mindset to behaving more like a startup. Through a new approach called FastWorks, GE is embedding lean startup practices into the workforce, pushing it to change faster and make smarter decisions, while staying close to customers. It’s doing away with rigid approval processes to instead allow employees to make rapid changes to their projects or quickly switch direction. And the organization bolsters the evolving demand of these projects by providing constant training that gives employees the skills they need to adapt and thrive. GE is just one example of a wider change in how companies work today. In response to constant disruption and fast-shifting business goals, forward-thinking enterprises are reimagining their workforces. In the past, anyone—from accountants to machinists—could spend their entire careers doing the same job, using the same skills to support businesses with largely unchanging goals.

But today we’re seeing companies being continually pushed to change products, services, and sometimes even business models. And not just once, but constantly, as each new technology innovation emerges.

Business leaders are realizing a more liquid workforce can become their new competitive advantage

The Present

• Siloed work generally aligned by business function (engineering, sales, marketing, design, etc.).
• Training is ad-hoc, as needed for a particular tool or technology (in which the company has generally already invested).
• Fragmented workforce management tools.
• Innovation generally practiced by specific non-official groups or ‘lone wolves’ in the organization.
• Low levels of collaboration.
• Static workforces organized around specific skills and functions.

Tomorrow: Adaptable workforces organized around projects, with embedded training.

• Project-oriented working groups, emphasizing collaboration, agility, and skill sharing.
• Increased expansion of workforce to external talent including both formal contractors and crowd platforms.
• Continuous training as a core organizational competency.
• Failing fast and iterative: employees are empowered to innovate.
• Data-based organizational management using predictive analytics and end-to-end HR suites.

Leading enterprises are reshaping themselves to rapidly adapt to any disruption. In essence they’re creating a ‘liquid workforce.’ Specifically, to compete in today’s market, companies must look beyond just updating skills. To drive change, they will need to become agile at each level of their business: their skills, their projects, and their organizations. By embedding the assumption of constant change enterprise wide, companies will be able to access critical skills sooner, innovate faster, and operate more effectively. This digitally powered workforce isn’t just changing what businesses do; crucially, it’s changing how they do it.

And it’s working. GE’s FastWorks methodology enabled it to build a new regulation-compliant diesel engine for ships nearly two years ahead of its competitors. Using the same approach, GE Appliances was able, in less than one year, to design and deliver a high-end refrigerator that sold twice as well as preceding models.¹

Skills – Build learning as a core competency in the organization to actively generate skills that are in demand.

Organization – Optimize workforce responsiveness with insightful analytics that provide a real-time view of organizational capabilities.

Projects – Use technology to coalesce and disband internal and external talent at your disposal for new innovative projects.

Labor Market Shifts

Before digging deeper into how companies are shifting to a liquid workforce, it’s important to understand why businesses are changing their workforce practices. Right now, core characteristics of the labor market are changing— driven in large part by technology. Digital technology has fundamentally changed every aspect of the business: strategies, processes, job functions, and business models. The workforce needs not only to adapt to meet evolving demands, but also to develop the skillsets to achieve their new goals. For example, to design for the web and mobile devices, graphic designers need to understand coding languages such as HTML5 and others.² Similarly, salespeople must understand the data and analytics tools that businesses use to drive growth. As a result, many enterprises are experiencing a skills gap—indeed, a recent survey reports that 38 percent of businesses globally are struggling to find the right talent.³

	Opportunity
Automation Automation is taking over more routine and manual tasks.	Worker Redistribution: Demand for jobs humans excel at (non-routine interpersonal and analytical jobs) is at an all-time high.4 Now businesses can both retain talent   and devote their human labor to fill this shortage.
Rise of Freelancing Forty-three percent of the US workforce is expected to be freelance by 2020.5	Skills Economy: Companies can build new strategies to leverage the contingent workforce and quickly access a wide range of deep technical skills, and other valuable outside experience.
Pace of Innovation New technology is constantly emerging, and the pace of adoption is faster than ever.	Continuous Training: By making training a core competency, organizations can actively develop the skills that will set them apart from competitors.
A New Generation In 2015, millennials became the largest share of the workforce.6 By 2025, that number will be 76 percent globally.	Digital Natives: With the right engagement strategy, businesses can leverage the excitement for technology, teamwork, and digital acumen of millennials to push forward on their new initiatives.

 

The employee pool is changing significantly as well. In 2015, millennials became the largest generation in the workforce.⁷ This shift is significant for two reasons: first, because millennials will soon become the predominant source of human capital; and, second, because businesses stand to benefit greatly from the technology acumen and talent this generation (also known as ‘digital natives’) possesses. But the flipside is that 53 percent of business leaders are finding it hard to attract and retain millennial talent.⁸ And   that’s worrying, as this generation is expected to account for 76 percent of the global labor pool by 2025.⁹ This ‘people disruption’ is about much more than just a new generation of workers. In the United States alone, it’s predicted that 43 percent of the workforce (60 million people) will be freelance by 2020. That’s roughly four times the number in 2015 (15.5 million).¹⁰ It’s just one more  dramatic development affecting how enterprises find and deploy talent.

As these disruptions mount, enterprises are starting to react. In the Accenture Technology Vision 2016, IT and business executives reported that “deep expertise for the specialized task at hand” was only the fifth most important characteristic they required for employees to perform well in a digital work environment. Other qualities such as ’ability to quickly learn’ and ’ability to multitask’ or ‘willingness to embrace change’ ranked higher, indicating that leaders are placing a premium on candidates whom they believe will evolve with their business. Fortunately, as well as driving these workforce disruptions, technology is also at the center of creating the solutions: massive online open courses (MOOCs) for scalable training; collaboration tools such as Slack that foster collaboration; and predictive workforce analytics that allow vast organizations to make better decisions. These and other digital technologies are enabling businesses to solve their workforce challenges. The goal? To create a liquid workforce with flexibility fundamentally built into three areas: skills, projects, and the organization as a whole.

Training as a Core Competency

The emergence of every new technology creates abundant opportunities. But in order to capture them ahead of the competition, businesses need to rapidly assemble the right skills. Rather than wait for the talent they need to emerge from the market, enterprises are taking an active approach by making continual training a core competency.

For example, digital training platforms that combine enterprise-developed learning along with MOOCs into a single curriculum are one area of major investment. Some companies, such as Unilever, Monsanto, and Citibank, are going even further. They’re seizing the initiative by partnering with local bootcamps like LaunchCode and General Assembly to develop relevant curricula, and then funnel graduates directly into related work.¹¹ These investments are paying   off: one study showed that companies that annually invest $1,500 for training for each employee see an average profit margin 24 percent higher than those that don’t.¹²

But the right skills alone are not enough. Enterprises must also take a new approach to projects. Look at Adobe. Through a program called Kickbox, Adobe employees can volunteer to receive a red box with creative tools and a $1,000 prepaid credit card to fund any new projects they want to start. Several of these ideas have led to full-fledged business plans. According to Adobe’s Vice President of Innovation, “Before Kickbox, Adobe may have taken a dozen or two dozen ideas from an idea phase to a mockup to put in front of customers. With Kickbox, Adobe has done almost 1,200 ideas in the last two years and done it at a lower cost than doing two ideas in the old way. So our failure rate is dramatically higher as a percentage, but our absolute innovation rate has increased dramatically.”¹³ Companies striving to build a similar advantage are using collaboration tools and cloud-based workflows to empower ‘anytime, anywhere’ working. They understand that successful projects require different combinations of internal employees, freelancers, and technology for each new challenge.

Flexible, yet Rigorous

An agile workforce will only flourish in an organization that, in the face of change, is prepared and equipped to bend and flex. And that process demands rigorous oversight. Consequently, more organizations are investing in end-to-end workforce management solutions—such as those provided by Oracle, Workday, and SAP—to deliver key insights into workforce capabilities and readiness. As they get more information about the workforce, business leaders can evolve their HR organization from its focus on people management, to one becoming an orchestrator for optimizing the organization’s entire output. Xerox, for example, uses people analytics in its call centers to connect the right personalities with the right roles, effectively raising employee satisfaction while cutting hiring and retention costs.¹⁴

Businesses are evolving from rigid, decades-old structures to create a workforce that’s built to and for change. Creating an agile workforce might sound challenging, but the rewards on offer are immense. Once organizations start to harness the power within such a workforce, they will find that they can grow smarter and faster than they ever imagined. And in the digital age, that’s not just desirable—it’s mission critical.

Accenture
Scale: 373,000 employees (as of Nov 30, 2015)

Education: Robust career development with $841 million on training and professional development in fiscal year 2015.

Continuous Performance: New model of on-going feedback.

Talent Fulfillment: Set of employees dedicated to matching every employee with the right jobs.

Distributing Skills: Employees learn new skills on the job and rely on them to teach their peers new skills.

Predictions

Roles Vanish: Organization charts become obsolete, gobbled up by software. Employees change their skills and focus to achieve their personal goal which is a common outcome for the business, inventing the new.

Freelance is the Future: Within 10 years, we will see a new Global 2000 company with no full-time employees outside of the C-suite.

Key Takeaways

• Address workforce disruptions today.

• Agile workforce = Agile business.

• Start your transformation in five key ways:

– Make training a core competency

– Become more project oriented and agile

– Empower collaboration and new ideas

– Manage a distributed workforce

– Create an organization that is built to facilitate, not impede.

The liquid workforce is rapidly becoming the new normal for how businesses organize themselves. Traditional methods cannot keep up with the pace of change in the digital age and forward-thinking businesses are already beginning to learn that their workforce strategy has the potential to be a major competitive advantage.

Liquid Workforce: 100-Day Plan

The emergence of the liquid workforce is already underway, and the time to initiate a new workforce strategy is now.

1. Perform a skills gap analysis. Have your HR organization review open roles in your company and determine high-priority roles that are remaining unfilled due to difficulty finding appropriate talent.

2. Build a strategy for expanding your organization’s training capabilities. Determine what investments in facilities, technology, or people will need to be made to deliver training consistently and effectively across your workforce.

3. Create a new engagement strategy, keeping in mind what millennials demand from their employers. Develop a plan that will allow workers to contribute to projects they are passionate about, move freely through the organization, and find work that best suits native skills with digital technology.

4. Formalize your organization’s approach toward engaging with freelancers and contractors. Create a clear distribution of work between long and short-term employees that plays to the strengths of each and communicate this framework with employees.

5. Pilot a new liquid project. Assign a ‘stretch’ project to one of your groups and grant them the autonomy and dedicated resources that allow them to accomplish their goal. Use this pilot as a foundation for developing a formal liquid project strategy.

Liquid Workforce: 365-Day Plan

A year from now, liquid workforce transformation should be well underway. Plan to drive the momentum across your organization in the following ways:

1. Put your new training strategy to work. Pick one high-need skill and pilot a new curriculum to train existing employees in that area. Use this initiative to determine which combination of training sources (e.g., bootcamps, MOOCs, personalized training) are the most effective strategies for your workers.

2. Build a plan to scale your liquid project practices across the organization. Learn from the progress of your pilot group. What were their successes and where did they find setbacks? Use this knowledge to build a plan that will allow you to push this model across your organization.

3. To understand where your enterprise stands to benefit most from crowdsourcing, commission three projects that each focus on a different area that the crowd is well suited to address. Use insights from these projects to sanction the use of crowdsourcing for projects across the organization that will realize the most benefit.

4. Integrate the use of analytics into your HR organization. Pair a team from HR with your data scientists to derive new insights from your workforce that could help with reviews, promotions, hiring, or other areas that need improvement. Use these insights to strengthen talent retention and recruiting.

5. Introduce predictive analytics to one area of your people management strategy (promotions or hiring, for example). Use your team of data scientists and HR professionals to develop a comprehensive plan for how predictive analytics could enhance existing practices.

Trend 3

Platform Economy: Technology-driven business model innovation from the outside in

Industry leaders are unleashing technology’s power by developing not only new technology platforms, but also the platform-based business models and strategies they enable. But the technology changes are only the beginning.

By embracing the transformational power of platforms, enterprises across all industries are capturing new growth opportunities and changing the way they do business. And it’s these new business models and the ecosystems being built around them that are driving the most profound change in the global macroeconomic environment since the Industrial Revolution. Platform ecosystems are nothing less than the foundation for new value creation in the digital economy.

Tech companies and enterprises that are born digital, such as Amazon, Google, and Alibaba, have long understood the power of digital technologies. But look a little closer. Many of these companies’ most groundbreaking innovations are not products or services; they are the platforms on which these products and services are built, and the business models that these platforms enable. Such platform-based business models fundamentally change how companies can do business.

What makes these models special? They allow companies to create entire ecosystems that do much of the work to grow the company and drive strategies. The platform has become the business model that is opening up entirely new paths to growth for companies. While tech companies and the born digital have successfully mastered platform strategies, the opportunity is now opening up to every company in every industry.

Platform technology building blocks to master:

1  Foundation: Cloud services

2 Digital Glue: API strategy and architecture

3 Accelerator: Open-source and reusable software

4 Digital Treasure Chest: Mobile development platforms

5 Real-time Business Models: Driven by the Internet of Things

6 Containers: Independence and portability of software.

The unparalleled growth of the digital economy has put it on course to account for 25 percent of the world’s entire economy by 2020, up from 15 percent in 2005.¹ As this growth   continues unchecked, platform business models represent a fast- increasing proportion of the overall total. The rewards that this expansion offers are astounding. The top 15 public ‘platform’ companies already represent $2.6 trillion in market capitalization worldwide, and they’re attracting this unprecedented level of capital investment through the value- creating power of their platform ecosystems and digital assets.

Largely driven by platform strategies, there are more than 140 ‘unicorns’ with a total valuation of more than $500 billion—‘unicorns’ are startups with valuations of $1 billion or more based on fundraising.² Within five years, a core component of corporate valuations and capital markets will be based on their platform ecosystems and digital assets.³

Market Cap Valuations—Internet vs. Platform Companies

Platform Players Abound

But it’s no longer just about tech and born-digital organizations using platform strategies. Digital leaders across all industries are recognizing these opportunities for new kinds of growth and (capital) rewards.

• Having a platform strategy and the business know-how to exploit it is more important than ‘owning’ an ecosystem.

• By 2018, IDC predicts that more than 50 percent of large enterprises—and more than 80 percent of enterprises with advanced digital transformation strategies—will create and/or partner with industry platforms.⁴

• IDC predicts that the number of industry clouds will reach 500 or more by 2018, up from today’s 100-plus.⁵

Companies with emerging platform strategies include Fiat (connected car), Kaiser Permanente (digital health), Disney (MagicBands), Caterpillar (connected machines), Schneider Electric (smart cities, buildings, and homes), Walgreens (retail pharmacy), Goldman Sachs (customer analytics), Bank of New York Mellon (financial services), McCormick/Vivanda (FlavorPrint), Houghton Mifflin Harcourt (education)—and the list goes on.

In fact, many leaders are accelerating their uptake of digital technologies and cloud foundations as a crucial first step in breaking into the platform world. Medical equipment maker Philips Healthcare is one of these leaders. The company is placing a major strategic technology bet on a platform business model by launching the Philips HealthSuite platform with three different cloud partners: Salesforce, Amazon AWS IoT, and Alibaba AliCloud. Providing unprecedented scale, speed, and global reach, the cloud is the technological and economic foundation for unleashing Philips’ market opportunities, from patient management to data collection to consumer and home devices.

40% believe adopting a platform-based business model and engaging in ecosystems of digital partners are very critical to their business success.

Philips has a bold vision to reinvent healthcare. With its three cloud partners, it will be able to rapidly scale up to hundreds of millions of patients, devices, and sensors processing an endless flow of data to tackle the bigger global challenges of the industry—from the hospital to the home.

This platform approach will support an entire ecosystem of interconnected patients, providers, and partners. Not only does Philips’ vision aim to improve the quality and cost of patient care, but it also provides the company with new paths to growth and an integrated approach that will generate higher margins. Its goal is to grow market share across the continuum of healthcare needs, from healthy living, prevention and diagnosis, to treatment, recovery, and home care. Collectively, this is an addressable market whose combined value exceeds $100 billion.⁶

With their new platform-based business models, companies such as Philips are changing how they do business. The new business rules of the platform economy, which include network effects, distribution power law, and asymmetric competition are providing different paths to growth. Based on these platform rules, digital leaders are designing and optimizing platform ecosystems that scale exponentially without incurring the diminishing returns typically associated with traditional business models.

82% believe platforms will be the ‘glue’ that brings organizations together in the digital economy.

Platform Business Model

Powered externally from the outside in, these technology-driven business models are based on platforms that create value within and across the new ecosystems. And they are redefining the future of industries.

Three New Rules of the Platform Business

 1. Network Effects/Two-Sided Market: Exists when two user groups (typically, producer and consumer) generate network value for each other, resulting in mutual benefits that drive demand-side economies of scale. The network effects of platforms, with more connected users and transactions, drive value creation and scale.

 2. Distribution Power Law: Relates to platform business models that enable scale by allowing others to generate profits in the ‘long tail’ of the distribution curve—avoiding diminishing returns associated with traditional (linear) value chain models.

3. Asymmetric Growth and Competition: Based on driving the demand of a core market through complementary markets, which are often subsidized (or free) to users and which cross industry lines. Asymmetric competition exists when two companies go after market opportunities with very different approaches and resources.

Macroeconomic Shifts

Demand-side economies of scale (also called ‘network effects’): Represent a major economic shift from the traditional supply-side value chain model of optimizing the supply chain and creating barriers to entry by controlling or owning resources and assets. Demand-side economies of scale are based on the network effects of two-sided markets, where value is created in platform ecosystems of stakeholders (customers, partners, developers, and others).

Prior to the internet, demand-side economies of scale or network effects did not play a significant role in the economy because of the resource and technical challenges of creating networked business environments. The main exception was the development of telephone networks—the value of the system increased with the mass adoption of phones.

Of the executives we surveyed, 83% believe the digital economy is driving a major shift in power from the supply-side economies of scale to demand-side economies based on the power of ecosystems of customers, partners, developers, and other stakeholders.

“Platforms beat products every time.”

Marshall Van Alstyne, MIT Initiative on the Digital Economy Co-author, “Platform Revolution” (to be released March 2016).

Macroeconomic Transformation—Platform Economy

Industrial Era – Changed every aspect of life	Digital Economy Era – Transforming every dimension of life
Products Value chains (linear) Power of controlling supply chain Supply-side economies of scalePhysical assets and capital depreciation Diminishing returns Market valuations driven by return on assets Growth organic or via mergers and acquisitions GDP as economic measurement	Platforms Ecosystems (non-linear) Power of optimizing ecosystemsDemand-side economies of scale Digital assets and innovation capital Distribution power law and network effects Market valuations driven by ecosystems Growth driven by asymmetric and network effects New measures, digital density and ‘free goods’

 

It is important to note that although platform business models are driving a major macroeconomic shift, adopting them does not mean giving up on existing business (value chain) models. In fact, they will often provide the new platform’s foundational strength. After all, at its core, Philips is still in the business of making medical devices.

Platform ecosystems play a strategic role in all types of businesses: asset heavy like GE and Philips, asset light like Google and Uber, or those like Apple and Amazon that have powerful platform ecosystems combined with asset- driven businesses. Whether a company ‘owns’ a platform ecosystem or is plugging into another’s, what matters is having a platform strategy and the business know-how to exploit it. Progress will start from a clear understanding of those parts of the business that are prime for platform business models, and those that are most vulnerable to unforeseen attacks from other platforms.

From Asset Heavy to Asset Light, and Every Variation In Between

The most powerful platform ecosystems of the digital economy will emerge from global (asset heavy) conglomerates that not only embrace digital transformation of their organizations, but also learn how to unleash the power of platform ecosystems. They can do this through foundational physical assets and knowledge of their industry and the cross-over effect to other industries.

We’re just at the beginning of a major technology-driven macroeconomic shift. It will disrupt the competitive strategies and business models of all companies—from large incumbents to nimble startups, from asset heavy to asset light. Every company will need a platform strategy, even if it’s just finding the right role in ecosystems driven by other companies or simply taking a defensive position. They will need such a strategy not just to grow, but also to protect the profitability of their core business from new forms of platform-driven (asymmetric) competition.

To survive and thrive in this new arena, companies of all types must redefine their roles and goals, and embrace the new rules of business. Winners will master the strategic use of digital technologies to build successful platform business models. Losers will miss their chance. With the aim of becoming the next tech giants, digital champions across all industries are writing the next chapter of the digital economy, and the time has now come to be a part of the story or become another footnote in the history of disruption.

Prediction

Immersive becomes Pervasive: Businesses go beyond AR, VR and MR to create platforms on which customers, employees and partners can experience all the five senses—together—in any environment they choose. This leads to the early stage of dematerialization where people can be present virtually anywhere in the world at any time and meet with their friends.

Key Takeaways

• Driven by the new rules of business, platform business models represent the most profound disruptive change in the global macroeconomic environment since the Industrial Revolution.
• While tech and born-digital organizations have been dominating the digital economy with record-high market caps, non-tech digital leaders across all industries are developing platform strategies now.
• The strategic use of technologies to create platform business models is driving unprecedented growth opportunities in the rapidly expanding digital economy.

Platform Economy: 100-Day Plan

Over the next three months, begin to develop a comprehensive strategy that will establish the foundation for your platform business model and ecosystem.

1. Appoint a C-level champion to lead a cross-functional team of technologists, business experts, and economists. This team should assess the range of opportunities to build platform business models, and prepare a presentation to the board of directors.

2. Identify and prioritize parts of the business that are prime for platform business models.

3. Identify the parts of the business that are most vulnerable to attack by disruption from new platform-based business models (from incumbents and startups inside and outside the industry). Use the results to help prioritize platform investments in order to protect core profits from attack.

4. Align the platform opportunities alongside existing product and market strategies (platform business models live alongside traditional product strategies).

5. Present initial findings to the Board and establish a top-down, C-level enterprise-wide commitment to pursuing platform business models as a strategic growth path.

6. Assess your knowledge gaps of the new rules of business: demand-side economies of scale, network effects, distribution power law and asymmetric competition. Get help filling those gaps in order to successfully develop platform business models. Start building a knowledge base and education program on platform business models.

7. Launch a company-wide campaign on the new rules of business and platform business models. Create a network of internal platform champions to evangelize the message.

8. Assess your digital technology capabilities and gaps in building platform ecosystems. Get help filling those gaps in order to successfully design, architect, and launch pilot programs within 12 months.

9. Prioritize the overall opportunities and threats, and then start with a small initiative to pilot, including internal initiatives to start the journey into platform business models.

Platform Economy: 365-Day Plan

A year from now, leadership should have a comprehensive understanding of the new rules of business, have developed a platform business model strategy, and launched a small pilot program.

1. Finalize plans to launch the initial pilot to work with a cloud partner to build a platform around one of the most information-intensive parts of the business.

2. Formalize agreements with the cloud partner that will be building the foundation of the platform.

3. Develop a multi-phase plan to transform parts of the business to platform business models.

4. Identify platform opportunities inside and outside your industry based on your executive training programs and platform knowledge base.

5. Establish a formal governance plan and organization to manage digital partnerships and developer communities in order to optimize the value of the platform ecosystem.

6. Formalize an approach to track and report on platform growth opportunities, relevant ecosystems, and competitive threats from both inside and outside the industry.

7. Communicate the vision of where your company fits in an economy without industry sector segmentation and with boundary-less competition.

Trend 4

Predictable Disruption: Looking to digital ecosystems for the next waves of change

Fast-emerging digital ecosystems—think precision agriculture, the industrial internet or smart cities—create the foundation for the next big wave of enterprise disruption.

Digital ecosystems like these, and the businesses that power them, are already straddling markets and blurring industry boundaries. The threat they pose? Unexpected new competitors seizing advantage.

The opportunity? Unlike previous technology disruptions that were often unpredictable, enterprises now have a line of sight to track growing ecosystems’ trajectories and anticipate their impacts. Forward-thinking leaders can get ahead of the game, develop their ecosystem strategies, and ride the results into new markets. But they must start now. Across industries, leading enterprises are starting to make big investments in building digital platforms. As they do, they’re uncovering exciting growth opportunities that fundamentally change how they create and deliver products and services as outlined in our Platform Economy trend. But these technology platforms and the new business models they drive are only part of the story. As more companies build or partner in industry platforms, new digital ecosystems are growing around them. These digital ecosystems will become the foundation for the next major stage of technology and economic disruption.

82% of executives say industry boundaries are being erased, and new paradigms are emerging for every industry.

Platform businesses are dominating the digital economy with record-high market caps, and growing asymmetrically by crossing over traditional industry boundaries into entirely new markets.

• Capital Supports Platform Business Model Investments. Access to Growth Capital: Platform companies have record-high market caps based on the power of their ecosystems.
• Ecosystem Power Drives Profits and Valuations. Ecosystem Economics: Leaders are crossing over traditional boundaries into new markets and new industries—driving new levels of growth, profitability, and differentiation.

How are we seeing this play out today? Look at the automotive industry. Every major manufacturer is building ‘connected’ cars that are transforming business model opportunities—that’s the platform. As a result, the technology in the connected cars is fueling a rich ecosystem that is becoming one of the next major hubs of innovation. Now, companies across industries are joining the ecosystem to offer digital services and capabilities such as mobile hot spots, remote diagnostics, safety and security, infotainment, variable insurance, car sharing, and much more. This digital ecosystem is redefining what automakers do. Rather than just building cars, they’re engaging with customers throughout the vehicle lifecycle, directly managing software upgrades, diagnostics, and safety.

But, the changes that are being driven aren’t limited to the industries that these platforms start in. As the ecosystem matures around such platforms, it is becoming the foundation for far more widespread disruption. But unlike technology revolutions of past eras, the disruptive forces of ecosystems can be predicted with a fairly high level of certainty. Using the power of their industry knowledge, companies can map out ecosystem scenarios—unveiling the disruptive opportunities and threats.

Looking again at the automotive example, we can see that telematics data from a growing ecosystem of connected vehicles is transforming the way businesses optimize their supply chains—reinventing logistics and reducing costs with real-time asset tracking and precise delivery. It’s also becoming an integral piece of smart cities—enabling local governments to start developing advanced services, from smart traffic monitoring to road planning and energy management.

Similarly, in the insurance industry, pulling down driving data from connected car platforms has enabled new services such as pay-per-mile insurance with newcomers like Google and Metromile to challenge the industry status quo. With driverless cars becoming a reality within just a few short years, pay-per-mile is providing a glimpse into the imminent disruption of consumer transportation. Furthermore, Tesla is starting off by offering cars with autopilot, and Google wants to go full throttle in launching driverless cars without steering wheels and gas pedals. But both technologies are posing even tougher questions for regulators and insurers—for instance, who is at fault when two autonomous cars hit each other? Does personal auto insurance even exist for autonomous vehicles?

As these examples show, the disruptive nature of these new digital ecosystems is not bound by traditional industry barriers. As every industry becomes digital, an ecosystem forming in one sector can rapidly become the foundation for disruptions in another. Take Uber, for example. The company started by building a mobile device platform to create an ecosystem of connected cars and drivers that disrupted the taxi industry. But as this foundation has settled, Uber is now using that same ecosystem to push disruption into new sectors—such as the recent trial of UberHEALTH in Boston. With its existing network of cars and customers, and a new set of skilled workers—registered nurses—Uber has been able to provide on-demand delivery of flu shots and similar vaccinations. Neither hospitals nor major pharmacy chains in the United States would have ever previously seen Uber as a competitor.

Power to Predict

Enterprises have become accustomed to disruption over the last few years, and now many will be hearing alarm bells once again. But this time there’s a big difference: enterprises can see it coming. Ecosystem disruption will typically be predictable disruption.

That’s because ecosystems are inherently tied to industries and business models, so large organizations are particularly well placed to predict ecosystem trajectories—and, what’s more, take advantage of them. The scale, resources, years of industry knowledge, and maturing digital abilities of leading businesses provide them with the power to create and capture immense opportunity by crafting new roles and forging inroads into new industries.

Consider GE. This industrial equipment manufacturer has deep experience in building essential tools for all major industrial sectors. With the rapid growth of its digital industry ecosystem and the industrial internet, GE saw the opportunity to do much more than simply sell connected equipment.

The company took its understanding of the ecosystem created by connected machines and integrated it with its extensive industry knowledge to capture new disruptive opportunities and forge new partnerships. Now, instead of ‘simply’ building wind turbines GE is partnering with energy giants like E.ON to build the software systems to analyze and improve the turbines’ energy output—in the process becoming a key contributor to the development of alternative energy sources (an innovation that’s already spawning an ecosystem of its own). And rather than ‘simply’ selling locomotives, GE is creating an ecosystem of connected trains that are contributing to the growth of transportation—and creating services that allow customers to optimize fuel efficiency and their supply chains. Now GE stands at the center of the industrial internet, with its impact reverberating far into other digital ecosystems.

As digital technology transforms how all sectors operate, ecosystems are emerging in every industry. The home is becoming the smart home; governments are building smart cities; manufacturers are moving to Industrie 4.0, which includes precision agriculture; digital health—the list goes on.1 Enterprise leaders must   study these large-scale changes to spot which ecosystems will press up against their own industry and, more importantly, how their business can take advantage. For example, both the smart home and smart city will significantly impact companies across the energy sector—it’s therefore a disruption that power companies should be planning for today. As forward-thinking companies anticipate these disruptions, they can redirect them, turning them into an opportunity to get ahead.

Connected Transportation

• Air – Honeywell Connected Aviation improved: Air Traffic Control; On-board Wi-Fi; Safety Management.
• Sea – Hyundai Connected Ships: Product Differentiation; Shipping Optimization: Inventory Transparency.
• Land – Cisco Connected Rail: Switching Routing and Mobility Increased Ridership.

Connected Insurance

New Business Intelligence
Data analytics is expected to have the biggest impact on the insurance industry.

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Big insurance companies like Allstate and GEICO are offering variable pricing based on performance. The company uses in-car data to gauge speeds, hard stops, and other factors that are known to have a correlation to accidents and subsequently indicate higher risk.

New Business Models
In one 12-month pilot, UK Insurer Direct Line Group gathered more than 11 million miles of data from connected cars.

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Usage data is also enabling new approaches    to how insurance is delivered. For example, Metromile offers pay-per-mile coverage, so rather than paying a premium every month customers only have to pay per-mile for when they are in the car.

Ecosystem disruptions won’t arrive across all industries at the same time, or with the same velocity. But they will arrive and can be predicted. With new entrants already vying for position, industry leaders must act now, and act fast to build the services and develop the new partnerships that will allow them to stake their claim in these ecosystems.

Winners in this new phase of predictable disruption will expand their horizons, watching and learning from the changes in peripheral industries. Armed with that knowledge, they can forge new roles, set new strategies for growth, and, most importantly, plot a course to seize the unlimited opportunities ahead.

Predictions

Leaders Game the Ecosystem: Strategy teams use gamification to play out and predict disruptions.

Industries Go Horizontal: Traditional industry boundaries disappear, leading to the birth of entirely new industry segments.

Key Takeaways

• Digital ecosystems are becoming the foundation for the next wave of enterprise disruption.

• Industry boundaries are already blurring, shifting market power to newcomers.

• Enterprises can gain visibility into the disruptive forces of ecosystems and take action now by developing strategies to forge new roles and new paths.

Predictable Disruption: 100-Day Plan

Over the next three months, start to understand the disruptive forces and opportunities of emerging ecosystems.

1. Appoint a C-suite sponsor to oversee a team that is responsible for championing your new ecosystem and digital partnership strategies.
2. Take an inventory of the ecosystems related to your business and prioritize the list according to those with the greatest potential for impact on your organization. Leverage external industry experts to provide fresh perspectives about growing digital ecosystems.
3. Have your team develop innovative ideas for how the organization will leverage emerging digital ecosystems. Envision your competitive position, new value chains, and new use cases for the ecosystems where you plan to compete.
4. Craft the strategy that will bring these ideas to fruition. Start to line up the resources, stakeholders, and investments necessary to forge this new path.

Predictable Disruption: 365-Day Plan

A year from now, your company will have a balanced understanding of traditional industry competition and the ecosystem economy.

1. Build the partnerships that will support your ecosystem strategy. Identify the key players in digital ecosystems, choose your preferred alliances, and have initial discussions.
2. Pilot an initial foray into a digital ecosystem. Pick the one business process, product, or service that is best aligned with your prioritization of potential disruptions and can benefit from existing and new partnerships.
3. Create new metrics to determine success in digital ecosystems. Develop these by tracking the progress of your pilot and use those insights to uncover potential indicators; iterate this process until you find metrics that can reliably measure success.
4. Identify new skills demanded to support the expansion of your digital ecosystem strategy. What new technology skills are needed? Does your organization need experience in a specific industry? Develop a plan to acquire these high-priority skills.

Trend 5

Digital Trust: Strengthening customer relationships through ethics and security

Trust is the cornerstone of the digital economy. Without it, digital businesses cannot use and share the data that underpins their operations.

To gain the trust of individuals, ecosystems, and regulators in the digital economy, businesses must possess strong security and ethics at each stage of the customer journey. And new products and services must be ethical- and secure- by-design. Businesses that get this right will enjoy such high levels of trust that their customers will look to them as guides for the digital future.

After the consumer outcry from its iCloud breach in 2014, Apple came to understand afresh the importance of trust. Its efforts to be transparent in how it uses and secures customer data is testimony to the value this leading brand places on trust.¹ Its new platforms, such as Apple Pay and HealthKit, are clear beneficiaries of this trusted-by-design approach because the strong security and ethics that are ‘baked in’ give customers confidence that their digital footprints are secure and private, easing the transition to and adoption of the Apple ecosystem. This underscores the role trust plays as digitally powered companies look to disrupt their own markets and enter new ones.

As the example of Apple shows, trust differentiates competitors in the digital economy where businesses can reach vastly more people, iterate quicker, and make faster, better decisions than ever before. Eighty-three percent of respondents to the Accenture Technology Vision 2016 Survey agreed that trust is the cornerstone of the digital economy. But what’s at stake is more than just the benefits of building good will. Inherent in a company’s use of technology to rapidly scale is the risk of amplifying mistakes.

Rapidly releasing products and services to tens or hundreds of millions of consumers, or sharing data about consumers at that scale, makes exposure to business risk more systemic. This can potentially result in the loss of previously established trust, which in turn can lead to the loss of customers, market share, and company valuation.

Exemplifying the importance that trust plays in its ability to do business, Apple told a federal court that “forcing Apple to extract data [from mobile devices]…could threaten the trust between Apple and its customers and substantially tarnish the Apple brand.”² Companies such as Apple that understand the importance of trust in the digital economy know that in order to compete, push boundaries, and offer new services, they must design products and services that are both ethical- and secure-by-design. Microsoft is designing products this way too. The company is opening data centers in Germany that will be managed and operated by a third party, allowing German customers to use Microsoft technology but to have all of their data controlled by a German company, without a ‘back door’ for Microsoft.³

83% agree that trust is the cornerstone of the digital economy.

By building new offerings in such a way, companies are building trust and minimizing systemic risk. This is critical, especially where data is needed to inform personalized services at scale, using technologies that require troves of personally identifiable information (PII). As data-centric products and services put data-handling concerns in the spotlight, 82 percent of executives agree that companies are exposed to exponentially more risk. Managing that risk and building trust starts with data ethics and security.

Recognition of new risks from digital transformations has already propelled security investments across all industries. Global information security spend is set to exceed US$100 billion by 2019, according to Gartner.4 Even so, a singular focus on security is insufficient to account for the risks encountered by digital businesses.

Over 80 percent of companies are required to comply with data- handling protocols that go beyond their internal controls. To account for these intrinsic risks in other parts of a digital business’s operations, data ethics—and, more comprehensively, digital ethics—are critical.

Although consideration of ethics should be a key part of digital transformations, it’s a new area of focus for the majority of businesses. It’s not just customers who are sounding the alarm: 80 percent of knowledge workers are demanding stronger ethical controls on data too. Currently, most companies’ strategies align to a single vector: privacy, which is just one component of data ethics. Digital ethics is even broader, encompassing the operational processes where data is applied to affect real-world outcomes.

Data Ethics vs. Digital Ethics:

Data Ethics—moral governance of the integrity, handling, control, and provenance of data.

Digital Ethics—data ethics and moral governance of actions taken as a result of insights derived from the analysis of information (where ‘information’ is data with context).

Company boards, and their risk committees in particular, need to pay attention. Without comprehensive policies, training, incentives, and consequences for data and digital ethics, exposure to risk increases and adverse outcomes are more likely. Cyber risk insurers recognize this and are now demanding more controls and policies to be in place before underwriting cybersecurity insurance.⁵ It’s a trend that’s set to continue.

New Responsibilities

Businesses must identify an executive responsible for developing governance models, taxonomies, and principles-based codes. This role will also focus on technically challenging areas such as decision-making in autonomous systems and confront today’s assumptions of what informed consent is, how to do no harm, and what it means to be truly anonymous. These are no longer philosophical puzzles. They are critical business realities that all companies must solve.

One way to account for this risk is to consider whether trust is being enhanced or eroded at every step of the customer journey. What’s more, if companies fail to recognize and ‘design-in’ strong ethical controls in a way that accounts for cultural variances in governance, and human and technological processes throughout the customer journey, they face further damaging outcomes. Eighty-two percent of survey respondents agree that a lack of security and ethical controls on data could exclude them from participating in others’ digital platforms and in broader ecosystems—an increasingly critical go-to-market strategy.

82% say a lack of security and ethical controls on data could exclude them from participating in other companies’ digital platforms and broader ecosystems.

Additionally, a failure by companies to address data and digital ethics may prompt regulators to impose their own rules and legal frameworks—and any change in the regulatory environment can not only be onerous, but also contribute to both a stifling of innovation and a forcing of changes in business models. Look at how the invalidation of ‘safe harbor’ caused scores of companies to redesign how they share PII between the European Union and the United States.

Wherever regulatory scrutiny strikes next, one thing is certain: corporate indifference to data and digital ethics can increase reputational risk and create unwelcome headlines.

Uber’s pricing algorithm, based on supply and demand, failed to consider extraordinary circumstances and quadrupled fares during a hostage crisis in Sydney.⁶ Facebook experimented with the emotional impact of negative news stories on 700,000 users (violating informed consent).⁷ These are two examples   among others that have made headlines in the past two years, with some companies facing class- action lawsuits. In these incidences, widely reported public outrage drove the companies to change their data policies.

Making the right decisions internally to gain customer trust is only half the battle; making sure outsiders don’t gain unauthorized access to data and abuse hard-won trust is also crucial. That’s why next-generation security mechanisms are following the data, taking user behaviors into account, and extending well beyond the perimeter. Wherever data goes, security must go with it. To address this challenge, security solutions— such as security-aware application design, integrated database security, dynamic access controls, and runtime application protection—are being integrated into new products. This data-centric philosophy is also revolutionizing identity and access management. For example, InAuth is a mobile-device security company that establishes the trustworthiness of a device before granting it access to network resources. Once a device is validated, solutions from the likes of BioCatch employ multifactor authentication that considers the way users interact with devices as a way to verify and provide persistent identity.

Global companies are also moving decisively in this direction. AT&T, for example, is undertaking a wholesale upgrade of its back-end architecture, moving toward data-centric security in its databases and its applications. It’s doing this to ensure high data integrity, so data is stored securely and not manipulated in transit.⁸ Coca-Cola, Verizon, Google, and Mazda are all taking a similar approach.⁹  Embracing this transformation, their leaders understand that trust comes from robust security and data ethics.

The scalability enabled through the digital transformation of the customer journey has positive and negative dimensions. The best way to minimize downside risks is to maximize trust. Better security, on its own, won’t be enough; nor will rote compliance with privacy regulation. Organizations must manage data and digital ethics as core strategies for mitigating business risks, just as they do with cybersecurity. Their reward? Unprecedented growth in an interconnected, platform economy, with minimal downside risks. Those who master this transformation can move beyond the first level of customer trust, namely that products will meet or exceed expectations, to a higher level where empowered individuals trust a company to lead them into the digital future.

Predictions

Looking into the future, trust and digital ethics will continue to play an increasingly critical role in business operations and become the minimum standard for participating in industry ecosystems.

The Trust Bust: High-profile digital ethics failures will create new governing bodies, new regulations and a new category of jobs.

The CEO Gets a Twin: Trust becomes paramount, and a new leader emerges—the Chief Ethics Officer.

Key Takeaways

• Ethics and security must be primary considerations in any digital transformation.
• Exposure to risk scales in proportion to digital business operations.
• To protect against downside risk, businesses must foster strong ethical decisions, effectively use security to protect against external threats, and build trusting relationships with ecosystem stakeholders.
• In procuring new technologies, security and ethics must be key evaluation criteria.
• Look for opportunities to build trust at every engagement point along the customer journey.

Digital Trust: 100-Day Plan

Over the next three months, businesses should understand the current state of digital risk they’re exposed to and benchmark data points that can be improved.

1. Survey stakeholders in an effort to quantify the level of trust across your offering portfolio.
2. Search customer service logs for the word ‘trust’ and run sentiment analysis against the results to gain understanding in how customers perceive your offerings and brand; make a top-five list of the least trustworthy offerings.
3. Take an inventory of data-driven business processes; describe the current and potential opportunities for enhanced security and data ethics for each.
4. Identify the executive(s) responsible for building and maintaining trust, digital ethics, and security with vendors, partners, and customers.
5. Research what your competitors do to build customer trust. Record what builds and erodes trust. Brainstorm opportunities for improvement within your own operations.
6. Partner with an academic institution, non-profit, or industry group to dive deeper into one aspect of digital ethics. Publish findings/advice for others.
7. Compile a list of opportunities for security to move closer to data.

Digital Trust: 365-Day Plan

In a year, businesses should have started to include provisions for strong digital ethics in their digital transformation strategies, have new security pilots underway, and have concrete plans to mitigate violations of customer trust.

1. From the top-five list of the least trustworthy products, do a complete customer journey analysis and try to understand where opportunities exist to build trust.
2. Discuss hiring a chief digital officer, chief trust officer, or chief ethics officer with your board of directors. This role will be responsible for orchestrating the establishment and maintenance of digital trust.
3. Pick one product/service to maximize trust. Build metrics for tracking improvement over time. Report results to product teams and challenge them to meet aggressive targets.
4. Start tracking metrics for trust and both data and digital ethics. Use this data to include trust and ethical practices in your company’s annual CSR report.
5. Implement a portfolio of solutions to move security closer to data. Describe how their implementation has mitigated downside risk. Share this report with your CIO and CFO in an effort to reduce insurance premiums.

Collectively, these themes represent the newest expression of Accenture’s stance that ’Every Business is a Digital Business.’ They add to Accenture’s multiple-year perspective on technology’s tectonic shifts and their impacts on the strategies and operational priorities for organizations worldwide. And they are all elements of a new digital culture that companies must begin to assimilate in order to move forward and transform themselves.

Individually, each theme, from each year, highlights the evolution of a key technology, some of which are already central to the digital explorations of many leading enterprises. Viewed in aggregate, the themes represent a fundamental shift in the assumptions that companies now must make as they plan for success in the years to come. They provide a richly detailed view from which business leaders in every industry can draw insight and inspiration about where digital technologies can take their organizations.

Leveraging the power of a digital business is no longer simply about incorporating these technologies into the organization. It’s about reinventing the organization—and the culture within it—to drive innovation, to drive change, to drive the business into the next generation.

These digital strategies and disruptions are still emerging, but the proactive enterprises that take the next few years to carve out their places in these newly forming digital ecosystems will be those that define their own destiny. The question for every enterprise is this: Can you lead your people to get there?

Research Methodology

About the Technology Vision

Every year, the Technology Vision team partners with Accenture Research to pinpoint the emerging IT developments that will have the greatest impact on companies, government agencies, and other organizations in the next three to five years.

The research process began during 2015 with gathering inputs from the Technology Vision External Advisory Board, a group comprising more than two dozen experienced individuals from the public and private sectors, academia, venture capital, and entrepreneurial companies. In addition, the Technology Vision team conducted interviews with technology luminaries and industry experts, as well as with nearly 100 Accenture business leaders.

The team also tapped into the vast pool of knowledge and innovative ideas from professionals across Accenture, using Accenture’s collaboration technologies and a crowdsourcing approach to run an online contest to uncover the most interesting emerging technology themes. More than 3,200 participants actively engaged in the contest, contributing valuable ideas and voting on others’ inputs.

As a shortlist of themes emerged from the research process, the Technology Vision team reconvened its advisory board. The board’s workshop, involving a series of ‘deep-dive’ sessions with Accenture leadership and external subject- matter experts, validated and further refined the themes.

The screens used during these processes weighed the themes for their relevance to real-world business challenges. Specifically, the Technology Vision team sought ideas that transcend the well-known drivers of technological change, concentrating instead on the themes that will soon start to appear on the C-level agendas of most enterprises.

The themes were prioritized using the following criteria:

• Actionable today

• Highly relevant to an organization’s transformation within three years

• Having significant impact beyond any one industry ‘silo’

• Disruptive beyond a straightforward one-for-one replacement of an existing solution

• Transcending any one vendor or discrete product technology

These tests produced a handful of robust hypotheses that were synthesized into the five overarching trends presented in this year’s report.

Accenture Technology Vision 2016

Survey Demographics

For the second year, we conducted a global survey of more than 3,100 business and IT executives across 11 countries to understand their perspectives on the impact of technology on their organizations, and to identify their priority technology investments over the next few years. The survey was fielded from October through December 2015.

References:

Executive Summary

1 Digital Economic Value Index, Accenture, January 2016.

2 “Most Innovative Companies 2015: Virgin America,” Fast Company, February 25, 2015.

3 “How Blue Apron and Zappos Use Data to Disrupt Themselves,” Ad Exchanger, October 9, 2015. “The Ultimate Marketing Machine,” Harvard Business Review, July–August 2014.

4 “Most Innovative Companies 2015: Samsung,” Fast Company, February 10, 2015. “Acknowledging a Crisis, Samsung is Trying to Improve Its Corporate Culture,“ Quartz, December 30, 2014.

Trend 1

1 “Singapore Restaurant Shows Off Autonomous Drone Waiters,” TechinAsia, February 10, 2015.

2 “Germany Develops ‘Smart Factories’ to Keep an Edge,” Marketwatch,

October 27, 2014. “Manufacturing: Self-Organizing Factories,” Siemens, 2015.

3 “Moda Operandi Leverages Technology to Elevate High-Touch Service,” Luxury Daily, October 14, 2015.

4 “Artificial Intelligence Startups See 302% Funding Jump in 2014,” CB Insights, February 10, 2015.

5 “Service Robot Statistics,” International Federation of Robotics, 2015.

6 “EMC Digital Universe Study, with data and analysis by IDC,” April 2014.

7 “Disk Drive Prices (1955-2015),” John C. McCallum, 2015.

8 “Public Cloud Computing to Reach Nearly $70 billion in 2015 Worldwide, According to IDC,” IDC, press release, July 21, 2015.

9 “Artificial Intelligence Startups See 302% Funding Jump in 2014,” CB Insights, February 10, 2015.

10 “Calibrating Multi-Speed IT for the Varied Demands of a Multi-Speed Business,” Accenture, 2015.

11 “Will Software That Writes Code Alter Tech’s Script?” The Financial Times, September 7, 2015.

12 “Supermarket Wars Hit Cyberspace as Coles Unveils ‘Pick and Pack’,” Australian Business Times, November 9, 2015.

13 “This Washing Machine Of The Future Will Wash, Dry And

Fold Your Clothes For You,” Tech Times, October 8, 2015.

Trend 2

1 “How GE Applies Lean Startup Practices,” Harvard Business Review, April 23, 2014.

2 “Employers Aren’t Just Whining – The ‘Skills Gap’ Is Real,” Harvard Business Review, August 25, 2014.

3 “2015 Talent Shortage Survey,” ManpowerGroup, 2015.

4 “OECD Skills Outlook 2013: First results from the survey of adult skills, Figure 1.5,” OECD Publishing, November 2013.

5 “Intuit Forecast: 7.6 Million People in On-Demand Economy by 2020,” Intuit press release, August 13, 2015.

6 “Millennials Surpass Gen Xers as the Largest Generation in U.S. Labor Force,” Pew Research Center, May 14, 2015.

7 “Millennials Surpass Gen Xers as the Largest Generation in U.S. Labor Force,” Pew Research Center, May 11, 2015.

8 “The 2015 Millennial Majority Workforce: Study Results,” RedBrick Research, October 2014.

9 “Creating a ‘Generation Connected’ Workplace,” Workforce, May 1, 2015.

10 “Intuit Forecast: 7.6 Million People in On-Demand Economy by 2020,” Intuit press release, August 13, 2015. “Here’s Why the Freelancer Economy is on the Rise,” Fast Company, August 10, 2015.

11 Fact Sheet: President Obama Launches New TechHire Initiative,” The White House press release, March 9, 2015.

12 “Not Investing in Employee Training Is Risky Business,” Huffington Post, August 30, 2014.

13 “Adobe Kickbox Gives Employees $1000 Credit Cards and Freedom to Pursue Ideas,” Forbes, August 19, 2015.

14 “HR Moves toward Wider Use of Predictive Analytics,” Society for Human Resource Management, October 6, 2014.

Trend 3

1 Digital Economic Value Index, Accenture, January 2016.

2 “The Unicorn List,” CB Insights, 2015.

3 Marshall Van Alstyne, Boston University, and MIT Sloan Initiative on the Digital Economy.

4 “Industry Cloud: The Largest Vertical Growth Opportunity For Technology Vendors and Services Firms Through 2025,” November 19, 2015.

5 “IDC Predicts the Emergence of ‘the DX Economy’ in a Critical Period of Widespread Digital Transformation and Massive Scale Up of 3rd Platform Technologies in Every Industry,” November 4, 2015.

6 “Royal Philips Second Quarter Results 2015 Information Booklet,” Philips, July 27, 2015.

7 “Creating Jobs Through Innovation,” Apple, 2015.

“Apple Inc.’s App Store Sales Hit a Record $1.7 Billion in July,” The Motley Fool, August 18, 2015.

Trend 4

1 The fourth Industrial Revolution, powered by new manufacturing technologies such as automation and cyber/physical interconnectivity.

Trend 5

1 “Who Has Your Back? EFF Gives Apple, Adobe, Yahoo, And Dropbox

Perfect Scores On Protecting Your Data,” Tech Times, June 19, 2015.

2 “Apple Tells U.S. Judge ‘Impossible’ to Unlock New iPhones,” Reuters, October 20, 2015.

3 “Microsoft to Open Data Centers in Germany,” The Cubic Lane, November 15, 2015.

4 ”Forecast Analysis: Information Security Worldwide, 2Q15 Update,” Gartner, September 8, 2015.

5 “As Cybercrime Proliferates, So Does Demand for Insurance Against It,” NPR, October 12, 2015.

6 “Uber Backtracks After Jacking Up Prices During Sydney Hostage Crisis,” The Washington Post, December 15, 2014.

7 “Everything We Know About Facebook’s Secret Mood Manipulation Experiment,” The Atlantic, June 28, 2014.

8 “How AT&T Is Virtualizing Security,” WSJ CIO Journal, May 18, 2015.

9 “Google Moves Its Corporate Applications to the Internet,” WSJ CIO Journal, May 11, 2015.

A list of venture capital firms in Singapore

• Terence Lee, Tech in Asia. 6:10 PM at Feb 10,  Original artice

Venture capital firms have entered Singapore in droves, which means startups can look forward to a wider variety of funding options (not clear on what venture capital is? Read this article first).

Here are the venture capital firms with a presence in Singapore that have been investing in startups in the past six months. It includes funds that are supported by the Singapore government through the NRF TIS and ESVF schemes. Startup accelerators and incubators are excluded from this list.

500 Startups

500 Startups calls itself a new kind of seed fund and startup accelerator. It believes successful internet startups are born from usable design, customer-focused metrics, and online distribution.

Latest investments: DayDayCook (日日煮), KFit, Fabelio

8capita Partners

8capita Partners is an investment partnership focusing on mobile and internet companies.

Latest investments: Jewel Paymentech, Tees.co.id

ACP

ACP is a venture capital firm based in Singapore. It has a team with experience as investors, entrepreneurs, and operators.

Latest investments: Bandar Foods, Mydoc

BioVeda Capital

BioVeda invests in healthcare companies with leading market positions, proprietary technologies, and outstanding scientific and management talent. It acts as a business and scientific bridge between companies in the East and West, linking business and technology between two very diverse markets.

Latest investments: ASLAN Pharmaceuticals, ConneXionsAsia (CXA)

Coent Venture Partners

COENT provides seed and venture-stage funding to entrepreneurs and companies in Asia.

Latest investments: Flyspaces, Booktrack, Shopline

Crystal Horse Investments

Crystal Horse Investments is founded in Singapore and is mainly involved in angel investments. It likes to support founders who are passionate about their business ideas, realistic, hardworking, looking for an edge, thinking out of the box, and are ethical in their dealings. It has a team of full-time dedicated professionals who gives advice and support, such as providing funding, expertise, and networking to founders.

Latest investments: ProperHands Pte Ltd, Capital Match

DMP

DMP is a venture capital firm specialised in emerging digital markets, primarily in Southeast Asia. It invests in the development of the consumer internet and its supporting infrastructure. Since 2011, It has been helping to build digital companies that have unique defensibility against global competition and an ambition to grow from single-country presence to regional leadership.

Latest investments: Grain, WearYouWant

East Ventures

East Ventures aims to bring success to ventures by providing early stage seed capital to promising startups. With a total of 6 offices in Jakarta, Tokyo, and San Fransisco, its global team has invested in over 150 companies across Asia and the US. Its portfolio of companies focuses on commerce, social, game, SaaS, and mobile services. East Ventures runs incubation offices in Jakarta and Tokyo.

Latest investments: AlgoMerchant, Ruangguru, Sociolla

EDBI

EDBI is the corporate investment arm of the government’s Economic Development Board. It invests to shape the future industries of Singapore in the knowledge and innovation-intensive sectors of biomedical sciences, information and communication technology, and select industry clusters.

It has over 25 years of investment experience, and through its portfolio of globally competitive companies with high-growth potential, it aims to promote the development, expansion, and transformation of successful industries to enhance economic growth and create employment opportunities in Singapore.

Latest investments: Coursera, CounterTack

Expara

Operating since 2003, Expara is founded by Douglas Abrams, a venture capitalist, entrepreneur, angel investor, and educator who has been working in Singapore since 2000.

Latest investments: STYLHUNT

Far East Ventures

Far East Ventures is the venture capital arm of property group Far East Organization.

Latest investments: Redmart

Global Brain

Global Brain is a Tokyo-headquartered venture capital firm which invests in startups in Asia, Israel, and the US. It claims to have a broad network of Japan’s major corporations.

Latest investments: Arcstone, Eyeota, PatSnap

Gree Ventures

Gree Ventures focuses on investing in early stage (pre-Series A and Series A) internet and mobile companies. We seek out companies with top notch management teams and strong market potential, which are not tied to strategic investments for Gree. We invest in Japan, Southeast Asia, and other geographies within Asia and seek companies which have the potential to scale across the region.

Latest investments: Ayannah

Gobi Partners

Gobi Partners is an early stage venture capital firm focusing on IT and digital media investments in China. They define digital media as a new form of communication emerging from the convergence in telecommunications, media and technology.

Latest investments: Qraved, Tripvisto

Golden Gate Ventures

Golden Gate Ventures focuses on companies building out consumer internet products and services for Southeast Asia. You’ll catch them frequently traveling between Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. It prefers companies with a launched product (stealth is fine) or that have establish valuable distribution partnerships in the region.

Latest investments: MyMusicTaste, Xfers, Aptoide

Hatcher

Hatcher is a venture capital firm focusing on B2B startups. It runs a proprietary platform for managing its entire investment process. Some of its features include finance and CRM support for investors, centralized knowledge banks, and access to its network of investors and mentors.

Latest investments: Dropmysite, OnRoom, Heardable

IMJ Investment Partners

IMJ Investment Partners, a Singapore-based VC, is focused on investing in startups Southeast Asia and Japan. It is the subsidiary of Japanese web and mobile marketing firm IMJ Corporation.

Latest investments: Fabelio, AsmaraKu, iprice Group

Incubate Fund

Incubate Fund is an early stage venture capital fund from Tokyo with a presence in Singapore. It also runs a startup accelerator in Japan called Incubate Camp.

Latest investments: GoGame

IncuVest

IncuVest consists of a group of entrepreneurs with experience starting, building, and operating valuable companies.

Latest investments: CloudDesk, Monkimun

Innosight Ventures

Innosight Ventures leverages more than 20 years of applied research by innovation thought leaders like Clayton Christensen and fieldwork by the Innosight Consulting Team. It has distilled that work into a set of proprietary tools that allow it to spot, shape, and scale successful startup companies. Its usual investment quantum is up to half a million Singapore dollars in each company. It is also open to co-investing with other venture capital firms, when more capital is required. It has led investment rounds where companies have raised in the range of S$1 to 2 million.

Latest investments: Capital Match

JAFCO Asia

JAFCO Asia part of a global venture capital firm with three focus areas: Asia, Japan and the United States.

Latest investments: GlowPick, Appier (沛星互动), Teabox

JAIC Asia Capital

JAIC Asia Capital was established in 1994 as Yamaichi Asia Venture Capital. It was acquired by JAIC group in March 1998 and changed its name to JAIC Asia Capital. It covers Asia, US, and Japan, and looks at both early and growth stage startups. It conducts buy-out, buy-in, turnaround, and restructuring activities.

Latest investments: Aoi.Co

Jungle Ventures

Jungle Ventures is a Singapore-based, entrepreneur-backed venture firm that funds and helps startups scale across Asia Pacific. It invests in global startups that are solving problems relevant to Asia Pacific markets.

It has investments in US, Singapore, India, Australia, Thailand, Malaysia, and the Philippines. Current portfolio companies include micro-lending platform Milaap, mobile commerce app ShopSpot, and vacations rental site Travelmob which was acquired by Homeaway.

Latest investments: SnapBizz Cloudtech , Moglix, CatchThatBus

Kathrein Ventures

Kathrein Ventures was established in 2013 to provide seed funding for startups in Southeast Asia Asia and Latin America.

Latest investments: TableApp

KK Fund

KK Fund is a venture capital fund investing in seed stage internet and mobile startups across South East Asia, Hong Kong and Taiwan.

Latest investments: Bfab

Life.Sreda

Life.Sreda is an international venture capital firm focusing on investments in fintech, mobile, and internet projects. Life.Sreda’s strategy covers the US, Western and Eastern Europe, and Asia.

Latest investments: Ayannah, Fastacash

Majuven

Majuven is an early and growth stage venture capital fund founded by experienced business leaders in Singapore in 2012. One of its founding partners is Lee Hsien Yang, the brother of Singapore’s Prime Minister Lee Hsien Loong.

Latest investments: Paktor, Paraplou, Vela Asia

Mercatus Capital

Mercatus Capital provides startups services like venture and angel funding, securing grants, public and private Equity, mergers and acquisitions, corporate restructurings, financial advisory, initial public offerings, and strategic partnerships.

Latest investments: AxleRate, iLenze, MockBank Learning

Monk’s Hill Ventures

Monk’s Hill Ventures is a partnership of seasoned entrepreneurs who have built and backed global companies based both in Silicon Valley and Asia. It is a venture capital firm investing in technology startups that will take advantage of Southeast Asian markets.

Latest investments: Playlab, Zipmatch, Compare88

NSI Ventures

NSI Ventures makes investments in early-stage technology companies based in Southeast Asia. It typically invests at the series A or B stage, where revenue traction is building and capital is required to drive rapid growth.

Latest investments: Jualo, Grain, Crayon Data

OPT SEA

OPT SEA is a subsidiary of Japanese e-marketing company Opt. It invests in Southeast Asian internet business.

Latest investments: Moneysmart, WearYouWant, IndoTrading

OWW Capital Partners

OWW invests in service providers in infocomm technology, technology, media, and telecommunications (TMT), logistics, education, healthcare, financial services, and consumer services sectors.

Latest investments: Numoni

Pix Vine Capital

Pix Vine Capital is a Singapore-based investment house providing early-stage venture capital to startups in info-tech, med-tech and fintech.

Latest investments: ElastiMed

Qualgro Asean Fund

Qualgro Asean Fund is a venture capital fund investing in Southeast Asia and Asia Pacific. The fund invests in technology and digital businesses (marketplaces, web services, p2p platforms, C2C platforms), in SaaS-based business models, as well as in education and healthcare.

Latest investments: Mobikon, Wavecell

Quest Ventures

Quest Ventures is a China- and Singapore-based venture fund for technology companies that have scalability and replicability in large internet communities.

Latest investments: Kapital Boost, Spiking, TranSwap

Rakuten Ventures

Rakuten Ventures is an early stage corporate venture capital fund focused on empowering the startup ecosystem to positively affect Internet services globally. The fund was originally launched in 2013 and counts Carousell, Visenze, Coda Payments, and Send Anywhere among its investment portfolio.

In June 2014, Rakuten Ventures launched a US$100 million global fund to target startups and companies in Israel, Asia Pacific, and the US, with a focus on companies that can enable better user experience. It is a subsidiarly of Rakuten, a major Japanese ecommerce firm.

Latest investments: Send Anywhere

Rebright Partners

Rebright Partners is a venture capital firm based in Singapore and Tokyo focusing on seed to early stage internet and mobile startups in Southeast Asia, especially six countries: Indonesia, Malaysia, Philippines, Vietnam, Thailand, and Singapore.

Latest investments: LetsTransport.in, Elanic, Inshorts (News in Shorts)

SEGNEL Ventures

SEGNEL provides seed and venture-stage funding to entrepreneurs in South Asia and Southeast Asia.

Latest investments: POKKT, CodersTrust, KFit

Singtel Innov8

Singtel Innov8, the venture capital arm of regional telco group Singtel, invests in and partners with tech startups worldwide. It has a fund size of US$250 million. Beyond funding, Singtel Innov8 lets startups tap on the resources and expertise of the Singtel Group, while enabling the Group to gain access to emerging technologies.

Singtel Innov8 focuses its investments on technologies and solutions that can lead to quantum changes in network capabilities, next generation devices, digital services and enablers to enhance customer experience. Headquartered in Singapore, Singtel Innov8 also has offices in San Francisco and Tel Aviv.

Latest investments: ShopSpot, Teridion, DataTorrent

Sirius Venture Capital

Sirius a boutique venture capital and entrepreneurial finance firm, focused on small and medium-sized companies in Singapore and overseas. It was founded in September 2002.

Latest investments: Lalamove

Sequoia Capital

Sequoia is one of the top venture capital firms in the world. However, its Singapore rep, Yinglan Tan, is part of the Indian office. In Asia, Sequoia primarily invests in China and India startups at the growth stage and above.

Latest investments: KFit, Go-Jek

SPH Media Fund

SPH Media Fund is the investment arm of Singapore leading media group Singapore Press Holdings.

Latest investments: The Lorry, Snapcart, Burpple

Tembusu Partners

Tembusu Partners is a private equity investment firm which invests in growth-stage companies.

Latest investments: Burpple, CricHQ

TNF Ventures

TNF Ventures is an early stage investor and incubator. It is formed by a few friends who are passionate to groom the next generation of technopreneurs.

Latest investments: Lomotif, Stacck, Emerge

Tri5 Ventures

Tri5 Ventures runs a seed fund which backs Singapore-based startups. It invests US$71,000 to US$286,000 per round.

Latest investments: Loco, ProperHands

UOB Venture Management

UOB Venture Management Private Limited (UOBVM) is a wholly owned subsidiary of United Overseas Bank (UOB) Limited, an international banking and financial group.

Latest investments: Appier (沛星互动), Touchten Games

Vertex Ventures

Vertex Ventures is a wholly-owned subsidiary of Temasek Holdings, investing in emerging companies and venture capital funds throughout Greater Asia and the US.

Latest investments: HappyFresh, Zhai.me (宅米), LOHO Eyewear (眼镜生活)

Walden International

Walden International is an international venture capital firm with over US$2.3 billion in committed capital. Investments include GoPro, Creative Technology, MindTree, SINA, Semiconductor Manufacturing International Corp, AutoNavi, Inphi, Ambarella, Ndoors, Com2uS, SundayToz, Jobstreet, Brandtology, HungryGoWhere, and YFind Technologies.

In Southeast Asia, Walden International is an active venture investor with over 25 years of experience in helping to grow companies. It looks for investment opportunities in early stage technology firms in sectors such as internet and digital media, mobile, software, semiconductor, communications, and cleantech.

Latest investments: Bmkp.cn (斑马快跑), BankBazaar, Spini

Wavemaker Partners

Wavemaker Partners invests in a broad range of technology-driven companies in the US and Southeast Asia. It is part of a worldwide venture capital association called DFJ Global Network.

Latest investments: Arcstone, Pie

How VCs raise money

Startup investors, also known as venture capitalists, are always writing blog posts providing helpful fundraising tips for entrepreneurs.

But how do VCs themselves get the millions of dollars they use to invest?

The truth is, the first skill a new venture capitalist has to utilize is not an ability to invest in great startups.

Before a new VC can invest in anything, that VC has to convince people sitting on huge piles of money to part with some of it to become “limited partners” or “LPs” in that VC’s new fund.

How does a new VC do that?

The perfect person to ask is Hunter Walk.

Earlier this year, Walk quit a high-powered job at YouTube to form a venture capital firm with his buddy, Satya Patel, a former Twitter executive and partner at Battery Ventures. Patel and Walk call their new shop Homebrew.

In just a few months, Patel and Walk raised $35 million, and are already using the money to invest in early stage startups. (They are looking for startups like Twilio or Stripe – companies that make tools for the small to medium-sized businesses of the future.)

So how did Walk and Patel do it?

In a blog post and in a conversation with me, Walk provided some answers.

The first step is finding the right people. 

Walk says Homebrew sought money from institutional investors – fund of funds, foundations, and endowments – rather than rich individuals, “because of their goal to build a long-term platform with us across multiple funds, their ability to bring additional capital to bear in special situations and their broad perspective on the marketplace.”

Walk says he and Patel were able to meet with those types of fund managers thanks mostly to “warm introductions from other early stage funds.”

So there’s your first tip: If you’re going to start a VC firm, you should be friendly with existing VC firms.

Walk says he and Patel emailed ~40 investors, 20 of whom took a meeting, 10 of whom agreed to meet again, 5 of whom agreed to invest.

Over the course of these meetings, Walk came to realize that potential LPs want positive answers to five questions before they’ll invest in a VC firm.

Those questions are:

1. Will the partners at this firm have good “deal flow”? In other words, Homebrew’s potential LPs wanted to know if Walk and Patel were plugged-in enough to the startup scene that they were going to constantly have a big pool of startup investments to choose from. Do they have an ability to meet the new great entrepreneurs?

2. Does Homebrew have good “partner dynamics?” The institutional investors wanted to see that Patel and Walk got along and had a plan for continuing to get a long in the future. “There were a number of questions about the partnership,” writes Walk. “How well do we work together? How do we reconcile disagreements? Did we have the same vision for Homebrew? Would we be dividing work in any specific way? I think Satya even got asked what my favorite food was (not kidding). ”

3. Are Patel and Walk “good pickers”? This is a basic one. LPs want to invest in VCs who can actually invest in the right startups. Patel was able to point at the startups he invested in at Battery Ventures. Walk, who hadn’t been a VC before, was only able to point at his smaller, personal investments in startups and where he worked, or “how I voted with my time.”

4. Will Homebrew bring something new to my portfolio? Walk says it’s very important to understand the portfolio strategy of the institutional investors you’re meeting with. You have to be able to fill a hole in their strategy. Homebrew plans to invest in early stage startups. If an institutional investor is already giving money to a VC betting on similar startups, it’s much less likely that institutional investor will also want to be in your fund. You’re not diversifying their bets.

5. Are these guys good guys? After getting positive answers to all the above questions, institutional investors do a ton of due diligence on new VC firms.

Walk and Patel eventually raised enough to start their firm. But Walk says anyone going through the process has to “expect to hear No.”

He says there were three kinds of rejections.

1. Process Issues Largely Out of Our Control – Fund of funds that were between their own fundraising cycles and thus had no more money to invest; institutions in the midst of reviewing their VC allocations vis a vis other private equity sectors; our process moving too quickly; their check size being larger than our entire fund!

2. Satya is a Good Investor, Hunter We Don’t Know Yet – This was totally fair given my smaller history. My answer was always “look how I voted with my time, not just my dollars,” being very willing to stand on my operational track record. For some this was fine but others didn’t want to bet on me yet (the ole’ “let’s build a relationship”). One investor even commended me on my ability to “prevent losses” in my angel portfolio which I think is like saying “he has a nice personality.”

3. We Don’t Buy Your Thesis and/or Your Ability to Execute Against It – We only had a couple of these rejections and to be honest, that was fine because not everyone is going to see the world the same way. I would worry if every investor nodded enthusiastically at us. I want some smart people to challenge our assumptions. It makes us think about their feedback, refine our thinking and charge ahead. To these potential LPs I’ll only say, maybe we’ll let you into Fund 2 

Walk says he plans to keep in touch with the LPs that said no.

“Whether for future funds or to just share market data, it never hurts to follow the money.”

YCH Group stays competitive with tech

Using drones to manage inventory and its key warehouse is just one of the ways the Singapore-based supply chain company looks to set itself apart from the competition

PUBLISHED : Friday, 02 September, 2016, 1:17pm

UPDATED : Friday, 02 September, 2016, 4:14pm

One company is making the traditionally staid world of warehouse management exciting, with a little help from technology.

Manually counting inventory is a chore, says Robert Yap, the executive chairman of YCH Group. It makes for dull work, and if items are counted wrongly, everything has to be counted from the top all over again.

“If you use the manual system, it could effectively take you two days to count inventory. With drones, it’s just one, two hours,” Yap tells CNBC’s Managing Asia.

Among the high-tech logistics solutions the company has adopted are automated storage and retrieval systems, drone inventory management and radio-frequency identification (RFID). All of these are put to use in Supply Chain City, the YCH Group’s US$163 million automated flagship warehouse – the largest of its kind in Asia.

The YCH Group has a history of switching things up. The company had originally been in the passenger transportation sector when Yap first joined the family business.

“I changed [our focus] to cargo transportation and from [that], we moved up the value chain to include warehousing, international freight forwarding and integrated logistics,” Yap explains, “As we were migrating the value chain, I sort of fell in love with [the business].”

Despite his current enthusiasm, Yap had initially been resistant towards joining the family business after university. “I said, if you retire and I run it my way, I might consider it,” Yap says on the exchange with his father, “And he said, you got a deal. I took over and kept my word ever since.”

In the 39 years he’s been with the company, Yap has expanded the YCH Group’s regional presence. It is now in more than a hundred cities throughout Asia Pacific. Yap also says that he is not worried about the slowdown in the Chinese economy, citing growth from other emerging economies, including Vietnam, the Philippines and Indonesia, as a reason to be optimistic about the logistics industry.

Even though the YCH Group might not be the biggest player in the Asian logistics scene, it is one of the most technologically advanced. Yap believes that investing heavily in technology will enable the company to differentiate itself from its competitors. “We are not adverse to investment [and] we are not afraid to invest for the long haul,” he says.

This has led to the development of the company’s standalone IT arm, Y3 Technologies. Yap refers to this as his “secret weapon”.

Also operating in the supply chain logistics space, Y3 provides a range of next generation solutions, including cloud computing, e-commerce and customer relationship management products. Unlike the YCH Group, which deals in large scale solutions, Y3 operates on a shared services concept so that even small businesses can utilise its services on a pay-per-use basis.

Yap also dabbles in angel investing, having set up a $14 million venture arm that invests in supply chain start-ups. This has been especially helpful for incubating innovations more quickly and at a lower cost than if the YCH Group were to do so internally. “When you [take] too long, you will miss the market,” Yap says.

Yap points to the drone and RFID system that has been trialled in Supply Chain City as proof of the incubator’s success. He intends for the technology to go live in the YCH Group’s warehouses by the end of the year.

The pursuit of technology has fuelled the rise of YCH over the years and Yap continues to remain open to innovation. He says that the company has been built on a vision that involves something called the “Logistics Super Highway”, which involves the integration of physical, informational and financial flows to enable the 60-year-old company to stay competitive.

“You have to dream, right?” says Yap, “It’s important for any leader to be very committed to what they want to do … [and] also be daring enough to take that risk and dream.”

Looking at where the YCH Group (which bears the initials of his late father, Yap Chwee Hock) stands today, Yap says that he believes his father would have been very happy. “Every distribution park we opened, I would make sure [my father] went and cut the ribbon [at the opening ceremony],” he fondly recalls.

Fast forward to the present, Yap continues to be the driving force behind the YCH Group and the many new ventures he started along the way. “Why [would I] want to retire? I’m having fun,” he says, “I’m not working, [it’s more like] playing because it’s a lot of fun.”

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Venture capital firm launches $50m fund for medtech

 

The private investment and venture capital firm Venturecraft Group has started a $50 million fund to invest in medical and infocomm technology companies that are still in their early stages.

It is Venturecraft’s second fund, and comes after it was recently appointed as an accelerator for the medical technology (medtech) industry under Spring Singapore’s Sector-Specific Accelerator programme.

That programme involves Spring’s investment arm Spring Seeds Capital co-investing in high-potential medtech start-ups with Venturecraft.

Medtech is a key sector within the biomedical sciences industry with strong potential for growth, noted Spring Seeds Capital general manager Johnny Teo in a statement yesterday.

“Medtech accelerators such as Venturecraft Group play an important role in the local start-up eco-system by providing critical support such as capital, regulatory advice, as well as access to markets,” he said.

START-UP LIFELINE

Medtech accelerators such as Venturecraft Group play an important role in the local start-up eco-system by providing critical support such as capital, regulatory advice, as well as access to markets.

SPRING SEEDS CAPITAL GENERAL MANAGER JOHNNY TEO

With Spring’s support, Venturecraft plans to focus on identifying co-investing opportunities in cutting-edge innovations within the medtech sector, particularly in the areas of in-vitro diagnostics, diagnostics devices, interventional medical devices and healthcare technology and analytics.

Even before the launch of this fund, Venturecraft, using its $4 million working capital, had invested in several tech start-ups with potential applications in the medtech field, such as AIM Biotech, which makes 3D multicellular biological models for research, drug discovery and clinical diagnostics.

The second fund has already invested in MiRXES, an A*Star start-up with a technology to advance the field of cancer diagnostics.

MiRXES co-founder and chief technology officer Zhou Lihan said: “Outside of the controlled lab environment, scientists often need a little assistance to adjust to the unpredictable commercial nature of business development. Venturecraft’s investment offers a double boost to our venture, as we get not only critical financing but also access to regulatory expertise and industry leaders who could pave the way for our entry into key markets.”

The moats that fintech companies must cross

Traditional finance companies’ competitive advantage operates like moats protecting mediaeval castles. Fintech companies must cross the moats of trust and regulation to break into the mainstream.

It started with a question which seemed simple enough when I first started investing in technology despite my training in years as a value investor: How do you invest in a fintech (financial technology) start-up with the potential to revolutionise finance, but which has not gained wide traction or turned a profit?

Cue the Oracle of Omaha with a question in response. To paraphrase legendary American investor Warren Buffett, investors of all stripes must first be able to answer this question: Is there any asset which deserves to be paid more for than the asset is worth? In the rapidly shifting sands of the disruption-prone fintech world, this fundamental question remains as relevant as ever.

How does one pick a fintech stock that might be priced below its worth? Let’s consider the concept of moats. In mediaeval days when kings lived in castles, the moats surrounding these castles determined life or death during an enemy invasion. The larger the moat was (and/or the more crocodiles the moat housed), the more likely the castle would withstand an enemy attack. And just like kings in castles, businesses live and die by the size and durability of their competitive advantage.

This competitive advantage can stem from a multitude of factors, including economies of scale in which unit costs decrease with increased production, as well as network effects and branding.

Like a moat, the larger a business’ competitive advantage, the more easily it can fend off competitors and the more likely its product will dominate the market. This will, in turn, lead to higher top-line growth which will increase the business’ worth.

 Conversely, just as the moats of mediaeval lore can be breached, business competitors and fickle consumer preferences actively erode businesses’ competitive advantage. This is nowhere more evident than in the start-up world, where many fintech start-ups are leading the charge in revolutionising traditional financial services – or, as some put it, unbundling finance as we know it today.

Employees of fintech start-up N26 on a carpet with the bitcoin source code printed on it in Berlin. The key problem is not the start-up’s technology stack, but the challenge of convincing people to entrust their money to it. PHOTO: REUTERS

They erode the defensive moats of these traditional financial services by offering a more convenient, efficient and secure alternative. In other cases, such as blockchain and peer-to-peer (P2P), they seek to transform the very nature of finance.

Blockchain, for example, is groundbreaking because it bypasses a central middleman like a bank, to make a transaction. Instead, it allows consumers and suppliers to connect directly, removing the need for a third party, as the World Economic Forum explains it: “Using cryptography to keep exchanges secure, blockchain provides a decentralised database, or ‘digital ledger’, of transactions that everyone on the network can see. This network is essentially a chain of computers that must all approve an exchange before it can be verified and recorded.”

Employees of fintech start-up N26 on a carpet with the bitcoin source code printed on it in Berlin. The key problem is not the start-up’s technology stack, but the challenge of convincing people to entrust their money to it.

This decentralisation means banks, remittance companies and financial intermediaries are not needed for such transactions, as people can transfer money, or make payments, to each other directly using this blockchain technology.

Then there is Funding Circle, a Britain-based start-up which provides a platform for investors to directly loan to accredited small businesses. This removes the need for banks as middlemen in the process, introducing transparency and increasing returns simultaneously. Using an online platform, investors can now self-select their loans based on their risk appetite.

Indeed, it is no wonder that start-ups tend to see themselves as the underdog, the David pitted against the Goliath of Big Finance. While that is analogous to a certain degree, start-ups should not forget that just as they are upending other businesses today, they themselves could be rendered obsolete with similar swiftness.

Prime Minister Lee Hsien Loong, in his National Day Rally speech, alluded to this when he discussed how ride-hailing start-ups Uber and Grab might experience disruption themselves as driverless taxis (and cars) are rolled out on the roads. No business can assume that its competitive advantage will remain intact forever. It is a matter of time before others start noticing the opportunity in its area of business. Mr Andy Grove, the legendary CEO of Intel, once said that “business success contains the seeds of its own destruction”.

Regardless of the size of the company, entrepreneurs and businessmen have to think deeply and deliberately about how the trends of today will destroy their moats and eat into their profits. They have to honestly answer the question – What is the durability of the business’ competitive advantage?

TRENDS THAT BREAK DOWNMOATS
Several recent trends have accelerated the erosion of moats as well. One is the democratisation of ideas and information. The financial world is driven by information – just ask Bloomberg. Yet, both the supply and demand of these ideas and information, which have long kept traditional financial institutions at the forefront, are increasingly being democratised.

For instance, Smartkarma, based here in Singapore, is aggregating and identifying the best sell-side research – previously sequestered in the equity research departments of banks. This allows analysts or experts who are truly good at their craft to submit pieces of original research unhindered by their management or company policies.

Despite all this talk of “creative disruption”, however, a very wise man once said that there is nothing new under the sun. Ideas take on new forms, but fundamental human nature does not change. Traditional financial institutions capture this well with their twin deep moats of trust and regulation; both are equally important for fintech start-ups to surmount. Trust: Indeed, finance has been around for a long time, and the force that has always undergirded finance was that of trust. Why do people hand their money over to the bank for safekeeping? Because they trust the banks to keep their money safe. How do creditors know that their borrowers will repay their loans on time? Because there is an implicit trust in the borrower to repay, or the financial system to guarantee, the loan.

Why would an investor choose to invest in one company but not another? Because we invest only in people who we trust can grow their company and make our investment worthwhile. Mr Jack Ma himself asserted that Alipay was created to address a trust deficit and became a huge driver of e-commerce in China.

Gaining the trust of stakeholders and end users remains a critical moat which many fintech start-ups have to breach, to truly disrupt the financial giants of today.

Perhaps, then, it is no coincidence that the fintech revolution really started to take off post-global financial crisis where there was a deficit of trust in many financial institutions. Today trust in the traditional financial system is low and we need to make a social case for the value of finance. Clients are not looking for more products to buy from banks; they are looking for solutions for their needs.

The key problem is not the start-up’s technology stack, but the challenge of convincing people to entrust their money to it – even if its product may not handle transactions directly. This is why traditional financial institutions strive hard to win and retain the trust of their customers – they are continually deepening and solidifying their moat. Regulation: Additionally, another key hurdle that start-ups have to crack is that of regulation. Start-ups in Singapore have to think deeply about this challenge, given the fragmented nature of financial regulation around the region. Localisation to reach customers around the region has been a perennial challenge (and opportunity) for start-ups based out of Singapore.

Fintech start-ups have an added layer of regulatory requirements to consider. They should consider fully leveraging on the Monetary Authority of Singapore’s FinTech Innovation Lab to learn from industry experts and work with traditional stakeholders to co-create adaptive solutions.

In a recently released World Economic Forum report on the state of blockchain technology, it highlighted “an uncertain regulatory environment, lack of standardisation efforts, and the need for a formal legal framework” as some of the key challenges to the technology. It is thus the fintech start-ups’ imperative to educate not only their users but also regulators on the potential risk and reward of each new technology.

Despite having these two deep moats, traditional financial institutions are not going to get off easily either. In the same speech, PM Lee spoke about the disruptive effect of online e-commerce on brick-and-mortar retail stores. Similarly, retail banks have to consider the impact of online and mobile banking on their retail strategy. Traditional brokerage firms have to be cognisant of the competition posed by start-ups, such as Robinhood, which have no brokerage or transaction fees. These advances could be made possible only by start-ups which leverage technology, consider new business models and exploit inefficiencies in the current way of doing things.

To return to the initial question – of how to identify companies that are priced below their worth – the answer lies in picking companies that are leveraging technology to drive efficient operations; and that are invested in building trust and engaged in shaping regulatory frameworks for the banks and financial companies of the future.

It is thus with a certain degree of irony that I am writing this as an active investor. Who knows what the future holds – with the growing plethora of artificial intelligence- driven wealth management products and learning algorithms to optimise investment accuracy and improve the rate of return, a totally different set of features may prove to be the most important metric for businesses to flourish.

Yet, until then, the time-tested strategy of building deep and lasting moats will give companies that extra edge to thrive in the economy of tomorrow.

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• The writer is the Asia-Pacific CEO of a global company and a member of the Monetary Authority of Singapore’s financial centre advisory panel.