š¼ Happy Summer!
Between catching some rays and take the odd Zoom call from the jardin (darling), weāve been thinking about how companies can set themselves up for the next phase of sustainable growth (read more below and download the report here). More on this - and your monthly dose of tech & innovation joy below.
Enjoy,
Rob & theĀ Founders IntelligenceĀ Team
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What's grabbed our attention this month:
Brought to you byĀ Ezra KonvitzĀ andĀ Hendrik Jandel
Cloudy skies āĀ Alibabaās financial services arm Ant Group is seeking a sky-high $200bn+ valuation in its dual IPO in Shanghai and Hong Kong, giving the newcomer the same valuation as Bank of America and almost double of Citigroupsā market cap. Alipay is already Chinaās biggest mobile payments platform and Ant Group is also growing their licensing business: demand from incumbent Chinese banks for their mobile & cloud infrastructure has almost doubled during the pandemic.
So what? Ant Group built outstanding cloud & mobile capabilities for themselves and (a la AWS) are also licensing that technology to those who canāt keep up. Deutsche Bank, HSBC and Goldman Sachs recently joined the 21st century and are now doing deals with Silicon Valley companies to get cloudy, Meanwhile, Ant Group is already moving on and just launched their blockchain brand AntChain, with the ability to support a cool 1 billion user accounts. The lesson? The market ascribes incumbent valuations to businesses building value chains thatāll be fit for purpose in tomorrowās world (cc every car manufacturer who thought Tesla is never gonna make it) - hold off at your peril.
Quibi or bust - Short content platform Quibi reportedly lost 92% of their users following its initial three month free trial phase. Thatās not crazy bad: Disney Plus converted 11% of their initial users after launching earlier this year, but from a userbase 10x bigger - Quibi now has a total of just 72,000 paying subscribers, reports notoriously accurate Sensor Tower. Co-founder Jeffery Katzenberg blamed the $1.75B funded, Meg Whitman-run companyās slow start on COVID (of course); others say no one cares about Quibiās offering.Ā
So what? Starting a new media giant is hard and COVIDās impacting everyone but this is a bit ādog ate my homeworkā: short content king TikTok has seen staggering growth and streamingās grown significantly during lockdown - potentially toward saturation, with Netflix warning investors that growth is likely to slow). Pre-launch, Barry Diller called Quibi a total speculation, adding the backhanded compliment: āmost people when they hear it arenāt overwhelmed by the idea, which makes it all the gutsier.ā A few lessons: 1) Quibi strayed far from the Lean Startup, and failed the test & learn phase; 2) not much beats free; 3) white elephants exist, and some have hero billionaire founders (cc Elon). Then again, podcasts were around for years before anyone cared.
Donāt hate the player, hate the game - Silicon Valley companies are rethinking their presence in HK as the city moves behind Chinaās firewall under Chinaās new national security law. Google, Twitter, Facebook et al announced theyāre āpausingā cooperation with Chinese law enforcement. And Googleās recently shut down āIsolated Regionā, a project that would have enabled it to offer cloud services in countries that want to keep and control data within their borders (while denying China has ever been on their map. Mmmhmm). Meanwhile, US-listed Chinese tech stocks reached all time highs.
So what? Tech companies have long been strategic figures in the geopolitical chess game between China and the US. While some might leave Hong Kong, Chinaās sheer market size makes it impossible to ignore it as a massive growth opportunity (Appleās silence is telling). Chinese tech companies might see short-term gains but expect more China trips from Silicon Valley leadership in the not too distant future. With a more innate focus on privacy, European tech companies have an opportunity to create purpose-driven tech platforms with a focus on data protection and ethical business practices.
Come fly with me? āĀ Airports are ushering in huge volumes of new tech across the customer journey to make flying in the time of corona safer and faster - undoubtedly with side-helping of reducing the level of customer-facing jobs (and any chance of an upgrade..). Robot janitors, UV sanitisation, touchless check-in and payment, thermal cameras and disinfectant tunnels are all coming on the travel menu, along with anti-microbial coatings and electronic baggage tags in an effort to give peace of mind and make some level of physical distancing possible.Ā
So what? In llama-land, thereās a one-man band and heāll toot his flute for you.. but getting through an airport to sit in close proximity in a steel tube is a whole thing. Human interaction in the circumstances is rarely that pleasant and greater automation could improve some aspects of the experience (the majority of passengers use biometric solutions for boarding when given the option). The space has huge potential: still fragmented, with early-stage solutions and a vast size of prize. Expect airports to be early adopters of solutions that become pervasive industry standards in other high throughput environments.Ā
In focus: š„¬ Sustainable Growth š„¬
Our Head of Innovation, Sandra Steving Villegas, explores Sustainable Growth Functions in a new report that lays out the key principles for success, andĀ how to create a blueprint for this new kind of operating model. The report includesĀ case studies of pioneering companies includingĀ Unilever,Ā Kering, AdidasĀ andĀ Enel GroupĀ who have approached the challenge (and opportunity) for radical change.
Get in touch with Sandra to explore any of these ideas in more detail, or to schedule aĀ workingĀ session to assess how your company can begin this journey.
You can download the report here.
A snapshot:
The question of sustainability is the most complex (and urgent) in a generation, and the corporate functions most critical to the future of businesses and the stakeholders they serve - strategy, sustainability and innovation - operate with different leaders, independent agendas and incompatible performance metrics. These silos are no longer fit for purpose.Ā
Companies with the ambition to lead in the decade ahead will need to fundamentally re-imagine how they do business and will need to master an unprecedented double act: reconciling the imperative need for economic growth withĀ the urgent need to create that growth sustainably.Ā
Achieving this will require a bold retooling ofĀ the strategy, innovation and sustainability functions under aĀ cohesive vision that eliminates silos, misalignment and competing priorities.
We believe what is needed is a new kind of capability, aĀ Sustainable Growth Function, purpose-built to deliver the influence, tools, resources and talent towards a single set of objectives.
PS: Register for free for the first ever virtual London Tech Week (1st ā 11th September 2020)
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As part of the Founders Intelligence community, weāre inviting you to join us at Europeās most influential festival of tech, uniting the community to share, innovate and connect.
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Top speakers include:
Warren East, CEO, Rolls Royce
Min-Liang Tan, Co-Founder, Razer
Alex Mahon, CEO, Channel 4
Laura Barrowman, Group CIO, Credit Suisse