🌼 Happy Spring
Rather a lot has changed since our last newsletter. I do hope you are healthy, safe and finding lots of little positives amongst it all.
Right now we all need connection. We’re bringing together small-groups of heads of strategy, growth, corp dev and innovation to share how they are supporting their organisations to adapt and all of the issues and solutions which arise. If you’re interesting in participating in one, please drop me a note.
Instead of yet another analysis on the post-COVID-19 world or workplace, we’ve decided to focus this newsletter on some of the positive / important tech stories you may have missed. We hope it’s a respite from handwashing / child taming / Zooming / video sharing / news refreshing.
Stay well,
Rob Chapman
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What's grabbed our attention this month:
Liberty and apps for all – Symptom and contact tracing apps are proliferating to monitor those in quarantine, track the spread of COVID-19 and (who knows!) maybe get us out of our houses sometime before mid-2021. China made their version mandatory and also used face recognition to enforce quarantine (quelle surprise). Some European countries are looking to use bluetooth signals and are working on an open source concept that at least feels mildly less dystopian; in just 3 days, Poland got an only-slightly-buggy app out that tracks locations and has users upload selfies within 20mins of receiving an SMS. Meanwhile, the NHS is working on an opt-in app and one of the many initiatives coming out of the US is being led by the CEO of Pinterest. And for policymakers and misanthropes, Google’s tapping into their location data to inform us just how badly hit different sectors are and where to allocate resources.
So what? On the plus side, we’re seeing extraordinarily rapid delivery of complex projects and phenomenal collaboration. Truly inspiring. But remember all those panels on data privacy and AI ethics, back when conferences were still a thing? We need to keep those in mind, and not just around public health. Any action taken now should be temporary and limited to a clear purpose (here’s looking at you, Hungary..) - and when we’re back to attending conferences, we need to have a wider debate about how we can make responsible data sharing that benefits society our secret weapon in the global tech race. We’ll hopefully have a couple of case studies to learn from.
Brave new (remote) world – More content on remote working has been produced in the last ten days than in all of history combined (probably). However, the reading that has inspired us most is the companies who’ve overcome the remote working problems and managed to do something positive for the world at the same time: Customer experience company Yext is making their Answers site search product free; H&M (among many others) are producing face masks; AT&T is removing data caps for homes; Youtube is partnering with Khan Academy and other EdTech companies to improve home schooling, and, and, and….(here are 50 more inspiring examples)
So what? We’re entering a period of fundamental challenge for almost every corporate and start-up. It will be those that act boldly and bravely which will emerge strongly. We’ve seen amazing entrepreneurial activities amongst clients. One organisation executed a project which had been planned as an 18 month exercise in 5 days when it became mission critical.
Better together – A British industrial consortium led by aerospace company Meggit and automotive companies Nissan and McLaren responded to the UK government’s call to arms to build medical ventilators. Lickety-split: hundreds of industrial companies agreed to work together, develop a prototype and now plan to start manufacturing within a month to have tens of thousands of ventilators ready pronto. In a similarly heartwarming effort, LVMH pushed through manufacturing and regulatory approval for 12 tonnes of hand sanitiser in a week (not part of their portfolio till now - but that might change?), and will keep at it as long as it's needed. Turns out they use the same ingredients and production line for fragrances (which is nice).
So what? Pandemics previously drove tech adoption and widespread social and regulatory changes (SARS led to growth in Asian ecommerce in 2003). We’re excited to see big companies making rapid decisions, driving those changes through the organisation (trying some unknowns in the process), using their networks and collaborating to solve the big challenges we face. This too shall pass - the winners of the future will take these new approaches to solving the other big issues of our day (here’s looking at you, climate change).
Deep Impact – Alphabet’s life science business Verily is ramping up its drive-thru screening and testing sites to tackle COVID-19 in the US. At the frontline: >1,000 volunteers from sister company Google. Meanwhile, Facebook has pledged $100m in grants and ad credits (the lord giveth..) to help struggling SMEs and Amazon will use its internal health care platform to provide at-home tests in Seattle. Some already argue this will be a turning point in “techlash” as together we realise we can actually get by as long as we have memes and can get a 48-pack of loo roll delivered.
So what? Big Tech isn’t isolated from the wider economic landscape and companies like Facebook know which side their bread is buttered on; it’s also a moment for Big Tech to spend the Big $$$ in their reserves to innovate through the crisis (and snap up the cashflow stricken). Apple’s $100bn in cash can support their R&D programme for four years, even if everyone stops buying AirPods - expect more consolidation in the coming years, a steer away from breaking up GAFA, and any remaining privacy concerns will go out the window, as long that means we can too.
In other news:
A platform for platform (shoes) – H&M - the world’s second biggest clothing retailer - is opening its supply chain to rival clothing brands with a new service called Treadler, initiated by new CEO (and Head of Sustainability from 2010-2014) Helena Helmersson. Smaller brands will be able to use a new service H&M and its suppliers for production, logistics, sourcing and product development in a pilot scheme to allow smaller players to take advantage of H&M’s ‘expertise, long-term supplier partnerships and strategic sustainability work’.
So what? In 2019, H&M made public detailed supply chain info for all garments and most of its homewares sold online; with all that information tracked and available, H&M’s Treadler initiative makes it possible for the company to become more of a platform (smart, if it works). Fashion generates ~10% of global carbon emissions; sustainable solutions are a huge step in the right direction, but new business models are critical too. Last year, H&M tried data-driven on-demand production in an attempt to prevent its fast fashion going straight to scrap. As sustainability becomes a significant strategic initiative, will we see more corporate CEOs with sustainability backgrounds?
The Lean Facebook – Facebook launched Hobbi, a DIY app to document your personal projects and hobbies (talk about timing). Kind of like Pinterest (whose shares dropped on the news) but - ironically - less social. It’s the fourth app coming out of Facebook’s ‘New Product Experimentation’ team, which launched in July 2019 and focuses on building niche communities; Facebook expects a lot of flops from the team and the past three haven’t yet become hits.
So what? Facebook seems to be taking 'lean start-up’ methodology to the next level, launching half-baked products in (multiple) markets at scale. While the concept’s a bit same-y, they’re doing a few things right: placing lots of bets expecting most to fail, launching MVPs quickly, getting actual user data and not making a big fuss about killing concepts that don’t work. We’d like to see the same appetite for experimentation outside of Big Tech.
In focus: Corporate Innovation Directory
We’re supporting Sifted with their comprehensive Corporate Innovation Directory detailing who’s doing what innovation activities at major players across Europe (awesome, right?).
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When not discussing COVID-19, we’re talking about:
Making AI sweat: Experts hope to leverage AI not only to develop vaccines and antivirals, but also to understand outbreak dynamics. Venture-backed start-up BlueDot identified the outbreak in late December '19, almost two weeks before the WHO issued a warning.
Mourning the margins: Investors love software businesses for the 60-80%+ gross margins but what’s up with AI? A16Z’s looked at the economics and found that AI businesses are actually more like traditional service plays, with lower margins (50-60%.. turns out we still need people and all those servers cost money), challenges to scale and weaker defensive moats.
Get rich or die tryin’: Even with all the cash sloshing around VCs (at least till last month), just a few start-ups raise from the big guns - Incredible Health CEO & Co-Founder Iman Abuzeid did it, and is kind enough to share his learnings.
P&G R&D D2C XXX: 182-year old, $300bn company P&G are adopting lean start-up methodologies to deal with increasing competition from D2C brands; this is a fascinating look behind the scenes at their Ventures innovation unit. Like that? Here’s what Google learned during the last 10 years running X - The Moonshot Factory.
What we’ve been up to:
We’ve done lots of thinking around how to keep our culture when we’re not together and set up a virtual kitchen (always on video channel), team social calls (no work chat allowed) and daily shout outs; and we’re hoping to emerge as a closer-knit team from these new types of interactions. We’re also looking at a bunch of cool remote tools like Loom, friday, Run the World and Jamm. What’s working for you? Reach out with your hacks!
Founders Forum founder Brent Hoberman wrote about the amazing entrepreneurial responses to COVID-19.
We’ve launched a new series to explore what the new normal looks like after the biggest external shock of post-war history. Read the first part by Simon Radford here.
Our very own Patricia Wyllie looked into carbon offsetting and shared her insights on the controversial space. At FI, we’re now partnering with Offset Earth to offset all current and past footprint.
Our friends at Founders Keepers spoke with Nick Halla, Impossible Foods’s Co-Founder who, over the past eight years, has partnered with Stanford geneticist Prof Patrick Brown to create plant-based meat products, saving the Earth as they go. Read about it here.