London vs. Silicon Valley startups: success factors

Eze Vidra, leader of Google Campus on what it takes to build a successful startup – London as a startup hub:

First, we have access to talent, with some of the top universities in the world based here, in addition to global talent that flocks to the city as a metropolis. Second, we have access to capital – there’s a huge concentration of wealth in London, and more capital is flowing into startups. Finally, we have ideas. While Europe was previously seen as the copycat centre for startups, more and more I’m seeing UK based startups who are disrupting their markets globally. London is a bit behind some of the leading startup hubs when it comes to density of network, but the momentum is playing in our favour, and it’s incredible to see how quickly it is improving.

Versus the best answer as voted by users on Quora: ‘Why do most successful startups come out of the USA?” – much more detailed in the answer itself; needs to be read along with all the other useful replies.

  • Access to role models. 
  • Access to funding. 
  • Access to business infrastructure. 
  • Access to distribution. 
  • Access to monetization capabilities. 
  • Access to talent. 
  • Access to practiced management. 
  • Access to production.
  • Sheer serendipity

And interesting/somewhat related – FastCompany looks at whether there’s a link between median household income and startup success (see “Does wealth lead to innovation?“) Not particularly:

median household income and startup success

 

World in 2013: A new way to look at cars

Part two in the ‘What’s interesting in the world in 2013‘ series is about an exciting and interesting development in the world of automobiles – as illustrated in the ‘Cars on autopilot‘ article.

I think (and a few others probably agree) that the car won’t go away, it’ll just end up massively transformed by both electric cars and self driving vehicle (and a combination of both) plus interesting innovations in car sharing schemes. I don’t think cities are pedestrian or bike only areas.

For a while, the automobile was given interesting cultural meaning and it enjoyed a long life as rite of passage into adulthood for entire generations. It’s no longer the case, even as we found out when working with Hyundai and being privy to the New Car Buyer Survey (NCBS) data from Europe and research from elsewhere. While Europe is indeed an economically depressed place and pessimistic from a consumer confidence point of view, the rest of the world isn’t faring any better either.

An often overlooked stat from the recent census is the fact that in the UK 58% of the working population drive to work compared with 16% commuting by public transport. Most Londoners feel like this number must be higher just because they use the tube, but as soon as you live anywhere outside a decent commuter train network reach, the reality is that it’s hard to get anywhere using public transport alone. Fast, cheap, comfortable – pick two. 

The USA probably has similar stats (and arguments over train networks and infrastructure), but data suggests there’s been an amazing shift in the fuel consumption trajectory since 2004 – not the only cause, but it’s pretty clear that car sales have slowed down, fuel isn’t as affordable as it used to be for some and newer generations are not as interested in cars.

Shift in US fuel consumption prediction

It’s probably safe to say that in both places, the problem is a generational one as much as it is an economic one. Asked if they prefer a 25 minute drive or 50 minute bus ride but with wifi, 80% of Gen Y-ers chose the bus ride and 80% of boomers chose cars.

I reckon it’s generational because it takes a lifetime’s worth of work to buy and maintain a car – jobs don’t offer that kind of security anymore, and they’re a big risk to take. Milennials aren’t lazy or self entitled; dare I say that no one my age has ever known lifetime employment, pension, health insurance, a company car or regular 9 to 5 hours. There’s an interesting shift in mentality around where people choose to live too - 66% of US college educated graduates first decide which city to live in, then look for a job. If public transport or the local biking culture are strong, there’s little reason to want a car. And if biking culture also benefits local business, it’s a no-brainer.

There are three interesting things happening:

1. Car sharing, for those times you do want the autonomy and flexibility it offers, without the running costs associated. It’s a tricky territory given that Zipcar was barely making a profit when it was sold to Avis for $491m, having it taken them over a decade to build the business. Another barrier that no one has gotten quite right yet is the gap between intent and the reality of actually posting your car up on a sharing site. Lots of festivals in the UK seem to be encouraging car sharing by giving car sharers better parking spaces, cheaper VIP tickets (or competitions to win them) and so on, so maybe it’s not communicated enough.

BlaBlaCar community

2. Electric vehicles, for people who can afford cars but care about the environment beyond self interest and want solutions that don’t run on fossil fuels. After ten years in the red, Tesla Motors, a maker of electric cars, has turned a profit of $11.2m and just raised $1bn from stock and bond sales. It’s doing interesting things at the moment and should be one to watch, in spite of Fisker, a hybrid manufacturer, laying off up to 75% of its workforce to prevent bankruptcy. Tesla may well be “a little bit Apple, a little bit Google and about to be huge“.

First quarter sales: Tesla, Mercedes, BMW

3. Self driving cars, addressing a number of tensions:

  • The fact that some carmakers can produce twice as many vehicles per employee as they did only a decade ago but people aren’t buying as many cars (as Horace Dediu points out, one country produces 24% of the world’s cars. 4 produce 50% and 17 produce 90%.)
  • Delivering a solution to people who couldn’t or didn’t want to learn to drive and were left behind willingly or unwillingly; bringing mobility to areas where there is none.
  • And – AND – something I hinted at in the Strategist’s Handbook is Google’s ‘strategy in 7 words‘ exercise: “unlocking a vast amount of time that could be spent on the internet”. 

Of course, what they do need to sort out is far trickier and less likely to happen anytime soon: a legal grey area that governs who to blame in a crash (vehicle to vehicle communication and vehicle to infrastructure are interesting areas too).

Google Self Driing cars

Reading: Clayton Christensen – How will you measure your life?

Clayton Christensen how will you measure your life?

Picked up ‘How will you measure your life’ by Clayton Christensen (and coauthors) as it’s a more complete version of an article that came out in HBR a while ago. It’s really good and I’ve been discussing whether it’s the sort of book teenagers should read when they’re about 16-18 (like my brother and sister) but in all fairness the management theory and business analogies may be lost on them. Who knows. As he says, children learn when they’re ready, not when you want them to learn.

On businesses and priorities:

When the winning strategy is not yet clear in the initial stages of a new business, good money from investors needs to be patient for growth but impatient for profit. It demands that a new company figures out a viable strategy as fast and with as little investment as possible – so that the entrepreneurs don’t spend a lot of money in the pursuit of a wrong strategy. Once a viable strategy has been found, investors need to change what they seek – they should become impatient for growth and patient for profit. Once a profitable and viable way forward has been discovered, success now depends on scaling out this model.

(This reminds me of colleagues who were the best and brightest stars but were pushed way too much beyond their limits to succeed really early; instead of channelling their talent into something sustainable, they ended up suffering from burnout too soon.)

On self-management, company and family culture:

Managers can’t be there to watch over every decision as a company gets bigger. That’s why it’s important for senior managers to ensure employees make, by themselves, prioritisation decisions that are consistent with the strategic direction and the business model of the company. It means that successful senior executives need to spend a lot of time articulating clear, consistent priorities that are broadly understood throughout. Over time, a company’s priorities must be in sync with how the company makes money, because employees must prioritise those things that support the company’s strategy, if the company is to survive.

You can tell the health of a company’s culture by asking , “When faced with a choice on how to do something, did employees make the decision that the culture ‘wanted’ them to make? And was the feedback they received consistent with that?

On what to spend your time on and for how long:

How are you going to decide which demand gets resources? The trap many people fall into is to allocate their time to whoever screams loudest, and their talent to whatever offers them the fastest reward. That’s a dangerous way to build a strategy. [...] If the decisions you make about where to invest your blood, sweat, and tears are not consistent with the person you aspire to be, you’ll never become that person.

(aka, you are what you repeatedly do)

On delivering on promises:

Before you take a job, carefully list what things others are going to need to do or to deliver in order for you to successfully achieve what you hope to do. Ask yourself: “what are the assumptions that have to prove true in order for me to be able to succeed in this assignment?” List them. Are they within your control?

On teaching curiosity, skills and formative experiences:

When we so heavily focus on providing our children with resources, we need to ask ourselves a new set of questions: Has my child developed the skill to develop better skills? The knowledge to develop deeper knowledge? The experience to learn from his experiences?

The rise of street style photography

A good 10-minute documentary looking into the rise and interest around street style photography. It seems to me like a fascinating phenomenon that’s gone beyond The Sartorialist and Garance Doré or Bill Cunningham style photos of people on the street and into a different way of looking at fashion: rather than taking cues from famous people, we take our cues from what others around us wear.

It’s also crept into things like #OOTD, mood wearing, the idea of the daily life as a stage for sending messages through clothes.

Isn’t it interesting that because of places like The Fancy, Svpply, Pinterest and curated tumblrs, there’s now a whole generation of people who could say that the internet dressed them and taught them all they know about style?

“People don’t need enormous cars; they need admiration and respect. They don’t need a constant stream…”

““People don’t need enormous cars; they need admiration and respect. They don’t need a constant stream of new clothes; they need to feel that others consider them to be attractive, and they need excitement and variety and beauty. People don’t need electronic entertainment; they need something interesting to occupy their minds and emotions. And so forth. Trying to fill real but nonmaterial needs-for identity, community, self-esteem, challenge, love, joy-with material things is to set up an unquenchable appetite for false solutions to never-satisfied longings. A society that allows itself to admit and articulate its nonmaterial human needs, and to find nonmaterial ways to satisfy them, world require much lower material and energy throughputs and would provide much higher levels of human fulfillment.””

- Donella H. Meadows, The Limits to Growth: The 30-Year Update

World in 2013: A big talent and skills gap

“Young, gifted and slack” in the Economist talks about the worldwide crisis of youth unemployment, hovering at 13% worldwide for those between 15 to 24 but much higher in places like Africa (25%) or Spain and South Africa (over half of young people). It’s written by the MD of McKinsey but it makes a good point. Look wherever you like and you’ll notice stock markets picking up, unemployment still not recovered. 

On one hand, it makes some people think a whole generation is lazy and feeling entitled (see Time – Millenials are the laziest generation) but the will to work exists and people who have ‘followed the rules’ and gone to university still don’t find jobs to match their degrees. Their (McKinsey) study of 4,500 young workers reported that 45% of 18-24-year old adults have jobs unrelated to their studies and a further half see them as interim roles they plan on leaving as soon as something better comes along.

On the other hand, the more depressing reality is that there’s a serious skills gap at the core, even for those thinking they’re doing everything right: 70 % of employers say candidates lack skills while 70% of universities surveyed by McKinsey believe they prepare students adequately for the job market.

So what’s interesting about it? There are three big implications for this skills & talent problem:

IPSOS - Margins of Error

  • A MOOC from Harvard will be better than a degree from your local university. Why do an expensive, 3, 4, or 5-year degree that’s not been updated to the requirements of the real world and will not give you the skills you need to work straight away? If you’re going to get into debt, you might as well do it for something that’s relevant and updating as you go along. I was a MOOC skeptic until I read that Georgia’s Institute of Technology is offering its first online degree created in collaboration with AT&T for only $7,000. As Collini says in What are universities for?, ”discussion of universities, as of many other matters, has become afflicted with ‘Champions League syndrome’. It is assumed that all the ‘top’ universities ‘play’ in the same ‘league’.” Until a couple of weeks ago I hadn’t given it that much thought, but now I’ve been persuaded: good universities will become better, mediocre (real world) universities will disappear as more people favour of online courses from institutions.
  • The end of facts and generalisations. ’Big data’ and ‘new media’ may be annoying monikers, but the reality is they’ll change what we understand by ‘normal’ and what we use as reference points. No more “generally, this group of people behaves in this way” because there won’t be any more ‘generally’. Remember Joi Ito’s principles: have good compasses, not maps. All the data gathered about us isn’t bad: social networks, sites and connected objects are gathering all this data and drawing important — sometimes survival-related — meaning from it, not just saving 2 years of idle time every day. Maybe one year of logging runs and walks seems boring, but if walks disappear and runs get shorter there’s something a bit more interesting in there from a health perspective.

* On a sidenote, I’m not afraid of robots taking our jobs (another popular narrative), because there’s plenty of evidence to support the fact that robots create more jobs than they destroy - I’m afraid of people not being able to learn how to make the transition (or being curious enough to – because you can’t teach curiosity).