Articles

  • Staying Relevant in the Artificial Intelligence Era

    Staying Relevant in the Artificial Intelligence Era

    This article originally appeared in June 2017 issue of BOSS Magazine

    From Silicon Valley’s perspective, Brexit, President Trump, and populist revolts around the world are incongruous to what is really going on. Large numbers of workers are getting left behind in the wake of automation and artificial intelligence and most governments are not nearly nimble enough to react.

    Most people have a skewed perception of their role in a situation, as well as others’ motives. The majority will happily take credit for positive outcomes, while often feeling victimized by negative ones. There’s a push to return to the days where people weren’t feeling choked economically.

    In many cases, anger is directed at trade, immigrants, and things foreign to the generational lifestyle Western civilizations have grown accustomed to. This is mostly misdirected.

    Current conversations in technological fields are concerned with how the future will be driven by advancements in artificial intelligence. There is an air of excitement around all the new capabilities to be gained with simultaneously fearful undertones concerned with the inevitable disruption of the economy and political systems.

    Sure, Silicon Valley operates in a bubble. But considering the growing number of Americans working in tech, we are the tip of the future-forward facing spear.

    Digitization and Doubt

    Earlier this year, U.S. Treasury Secretary Steve Mnuchin, said, “”I think that is so far in the future — in terms of artificial intelligence taking over American jobs — I think we’re, like, so far away from that [50 to 100 years], that it is not even on my radar screen.” Mnuchin added that he did not understand tech company valuations in a way that implied that he regarded them as “excessive”.

    Could the top economic advisor to the President of the United States be wrong about artificial intelligence? Recent analysis by Price Waterhouse Cooper (PWC) states that up to 40 percent of today’s jobs may be replaced by automation by the 2030s. Other estimates suggest that this effect could take place even sooner and be more profound.

    The world’s first industrial revolution took 80 years. It brought us steam power and mechanical production equipment. The second industrial revolution was truncated by the start of World War I, but lasted 54 years. It welcomed electricity, division of labor, and mass production.

    Digitization kicked off during the 1970s, which brought electronics, automated production, and the internet. Now we have arguably embarked 10 years into the third industrial revolution. It could merely take another 10 to 15 years to complete the transformation and begin the ascend toward super intelligence.

    Meanwhile, we already feel the effects of digital-physical convergence, external neural networks (a.k.a. A.I.), and the beginnings of cyber-physical systems.

    President Trump made campaign promises and cranked up the pageantry surrounding his executive order targeting the 66,000 people still involved in coal mining. He ignored the order of magnitude that’s involved in clean energy.

    According to the World Economic Forum, as of 2016, solar and wind had become cheaper energy sources than fossil fuels. This is just one of numerous examples where government administration lags when it comes to the rapid transformation of our future economy.

    From Mind to Manufactured Moments

    This revolution is happening within the context of one generation and our economic systems are being stretched to the limit. While Universal Basic Income is certainly gaining mind-share, it would only serve as an economic bridge until the majority of the population becomes economically irrelevant.

    It could even be too late for most of today’s unskilled laborers to make the leap. Generation Z outnumbers the baby boomers, and has an unique chance to live in an entirely new future.

    To make that happen, we must drastically modernize our education system — that was designed during the previous industrial revolution a century ago — and intercept the technological trajectory — limited only by government scale.

    Dr. Peter H. Diamandis, Co-founder and Executive Chairman of Singularity University, posed an intriguing line of questioning, specifically what attributes will be most critical for our children to learn to become successful in their adult life? What’s most important for educating our children today?

    If information is readily available in the not-so-distant future, what should we study? How do we stay more valuable to society than machines and algorithms? Surely, it’s mainly becoming more human, especially when it comes to our passions, creativity, emotions, and communication, while acquiring technological skills needed to cultivate and operate the tools of the future.

    Limitless Opportunities

    Communication is a muscle that requires exercise. On other hand, going deeper than the surface in computer literacy is a profession that requires solitude and focus. It is not common to have both personalities and skill sets present in one person.

    Soon, deep computer literacy and programming education will be just as important — if not more so — to students than basic chemistry, physics, and biology taught today. While communication and interpersonal relationship skills will be critical to anyone’s success as they’ll need to sell their ideas clearly.

    An immense part of the population is entirely consumed with repetitive jobs automation can, and will, take away. This painful transition will allow for more free time and limitless opportunities to pursue our passions. Entrepreneurship, experimentation, and persistence will become increasingly more relevant not only to the “crazy ones” but to all.

    March of Technology

    Ultimately, what will separate humanity from the machines is being more humane.

    Machines must be programmed with the overhead of human emotions, ethics, compassion, and creativity. Perhaps they will be one day, but those aren’t yet necessary components of productivity. This focus is what will forever make us the machine’s masters and them our tools.

    The march of technology advancement is apolitical and is about to turn into a sprint.

    No matter your individual politics, next steps will demand that your elected representatives look to the future and not the long-gone past.

  • Corporate Vampires and Startup Virgins

    Corporate Vampires and Startup Virgins

    On any given day, plane loads of executives and government agency officials from around the globe land at San Francisco International Airport. Their hope is to learn by osmosis and replicate some of that Silicon Valley magic to drive growth of their enterprises and economies. Though it is impossible to replicate the confluence of events that made Silicon Valley the capital of world innovation, its mindset – driven largely by startups – is being institutionalized. Corporate Innovation programs are springing up all over the world as large organizations are fighting to stay relevant in a business world spinning faster every year.

    For most startups, attaining a partnership with or an investment from a well-known brand can add a lot of value in the form of market validation, distribution, supply chain access, and sometimes even a path to an exit via acquisition.  Of course, the waiting game and endless meetings to accomplish this can drain the will to live.

    What’s less obvious to the startup founders, especially ones who haven’t worked at large companies, is that corporates need startups much more than vice versa. Think of the them as old vampires who need to feed on virgin startup blood to stay alive.

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  • Trump, Brexit and ISIS are the symptoms, and technology is the problem

    WESTEND61/DONALD IAIN SMITH (COMPOSITE)/GETTY IMAGES
    WESTEND61/DONALD IAIN SMITH (COMPOSITE)/GETTY IMAGES

    Trump, Brexit and ISIS are the symptoms, and technology is the problem

    This article originally appeared on TechCrunch on August 16th, 2016

    The world seems to be going mad with division. Religious fundamentalism versus the modern world. Nationalism versus openness. Old versus young. Us versus them. In each case, a group that used to have the upper hand is now angrily despondent at its place in society and future prospects.

    In the Middle East, cynical leaders are taking advantage of the desperation and deep sense of insecurity in unemployed young men who are struggling to find a place of belonging and a source of pride. In Britain, racism and bigotry are flourishing spectacularly as the older generation seeks a scapegoat for their growing irrelevance in the modern, globalized economy. In the U.S., what was once a great political party has become an unrecognizable collection of resentments and prejudices.

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  • The Next Technology Paradigm and Why I Joined HP Ventures

    The Next Technology Paradigm and Why I Joined HP Ventures

    Ever since the US government became Microwave and then Silicon Valley’s first customer in the 1950s, it has been the epicenter of worldwide technological innovation. (I’ve written on this topic in detail previously here and here.)  After a couple of decades of world-changing growth; the PC era replaced semiconductor. The Internet became the focus area after that, making the subsequent social wave possible.  Gradually, demand for electronic and mechanical engineering skills was replaced by software development and moved to the sidelines of cheaper regions in the US and Asia.

    The mobile era, birthed with the introduction of the iPhone, is now largely coming to a close as well. The barrier to entry is low. The technology stack needed to launch just about anything, is accessible to anyone with an Internet connection and laptop. Every sizable market niche is filled and smart investors have already shifted their focus to what’s on the horizon. This doesn’t mean that investment in mobile will cease or that an occasional massively successful company won’t be created, but you’d have to be living under a rock to not notice the growing drumbeat of innovation in the next technology paradigm.

    Chris Dixon, What's Next in Computing
    Chris Dixon, What’s Next in Computing

    With every passing day, it is becoming clearer that 3D Printing, IOT (Internet-of-Toasters as my good friend Sri says,) VR, AR, and AI are the next set of puzzles to solve. This wave is different from what we’ve seen in Silicon Valley for the past two decades and the skills required are far beyond software development. Silicon Valley may very well regret giving up the hardware engineering talent and manufacturing capability it once had.

    Other regions may finally have the opportunity to be the next Silicon Valley and it won’t come from replicating its magic, but from lining up their own unique skill sets and resources for what’s coming down the pipe.  Asia is a known player, but Eastern Europe (Ukraine and Poland in particular) is also not far behind.

    This brings me to some big news: I’ve joined the newly formed HP Ventures.

    With an initial investment of $538, Bill Hewlett and Dave Packard founded arguably the first startup in a Palo Alto garage in 1939.  Today the company (after the November 1st, 2015 split-off of Hewlett Packard Enterprise) has over $57B annual revenue, 50,000+ employees, and distributes its products into 170 countries.

    The HP Ventures team is supporting exceptional entrepreneurs globally with not just investments, but manufacturing and distribution that no traditional investor can provide. Our primary focus is on 3D Printing and IOT, both because we see civilization-changing innovations on the horizon and for the value-add we can offer to the entrepreneurs.

    The first generation of 3D Printing technology has helped makers manifest their imagination into the physical world.  What we’ll see in the next 5 and 10 years has the potential to fundamentally disrupt mass manufacturing of just about any product, logistics, ecommerce, construction, and even our own human bodies. Incredible potential that is almost too mind-blowing to picture.

    IOT is making every object we interact with intelligent and connected. From smart homes that make our lives safer and more convenient to personal health monitoring devices that make us super human. From connected and autonomous transportation to smart cities that will improve everything about our urban environment. Our world is quickly changing, and bit-by-bit, IOT companies are putting together the pieces of our future matrix.

    I’m thrilled to have the opportunity to work with some of the world’s most talented people leading us into this amazing technological wonderland future – both on the HP team and the entrepreneurs I meet every day all over the world.

    Stay tuned for lots of exciting technology and products we’re going to help introduce to the world.

    Want to shortcut your way to success? Don’t just learn from your own mistakes anymore. Pre-order Accelerated Startup – The New Business School

  • Winter Is Here, Now What?

    Winter Is Here, Now What?

    For the past several months there has been a growing chorus of alarms about the impending slow down in the startup world. While a number of pundits are still in denial and the reverberations haven’t reached Europe or other trailing regions, it is undeniable. Winter is here.

    Unicorns are stumbling and are being written down by their late stage investors. Average valuations for rounds in Q4 2015 were down 60% from the previous quarter. (Soon we’ll find out how Q1 2016 fared.) Over 70% of tech companies that went public in 2014 are trading below their IPO price.

    More importantly, in the dark and smoky (not really) board rooms on Sand Hill Road, men in wrinkle-free chinos, light blue shirts, and boat shoes are scheming. They are the ones who actually write checks. They saw this coming and began digging in for the winter ahead months ago.

    No one knows how long it is going to be, but investors are now looking towards fattening up their portfolio companies and only investing in sure things. Sure things, in Silicon Valley investor vernacular, are companies with profitable unit economics and/or teams who have a track record of making money for VCs.

    So what does all of this mean to you?

    Well, if you are on the investment side, you are probably celebrating the return of sanity and good deals. After all, numerous legendary tech companies were started in the times of Silicon Valley famines. The pendulum is swinging hard back in to the favor of professional investors. Hobbyist angels who bid up the early stage valuations (and founder egos) are running scared back to the safe havens of real estate and shorting the market. Silicon Valley steroid-infused unicorns are shedding talent, increasing supply and lowering the insane salary market. All of this will mean a healthy deflation from the excesses the past 7 years of Silicon Valley’s bull market.

    If you are a first time founder without a track record and no product with traction looking for seed money, I’m afraid I have bad news for you. Your options are narrowing to bootstrapping your project to some level of success like the good ‘ol days and/or carefully picking the right accelerator program that can help you get to an investable state faster.

    If you are fortunate to enter this trough part of the cycle with a product, solid team, and some traction; you may be in better shape. For most business models, nothing matters more right now, than unit economics. Much like the life and death requirement for a pilot flying through stormy weather relying on instruments alone; this means fully understanding the instrumentation of your business. If you are a disciplined entrepreneur this should always be the first and last thing you think about no matter the funding or macro economic environment.

    First, your Customer Acquisition Cost (CAC). What are your marketing channels, do you know how to fully leverage them, and do you know the various saturation points to surmount?

    Second, your gross and net margins. Are you one of the 42 VC-backed food delivery startups in San Francisco subsidizing everyone’s lunch hoping to starve out your competition before you run out of money? Or do you make at least gross profit on every customer on the first order?

    Third, your customer Life Time Value (LTV). For many competitive business categories, especially ecommerce or SaaS, the CAC is too high to come back on the first order. That means keeping your customers happy long enough to produce a net profit over some months and for them to invite their friends… who are a net zero CAC to you.

    No matter what side you are on, know this: the party is most definitely wrapping up. It is 3 am, the music is quieter, some people have already taken their gift bags and gone home. The hosts are tired and want to go to bed. So be smart and disciplined. Don’t get distracted with things that feel like work. Like picking out furniture, marketing spend that doesn’t bring measurable results, or hiring every person you meet. Focus on one metric: LTV > CAC. And relentlessly execute.

    Want to shortcut your way to success? Don’t just learn from your own mistakes anymore. Pre-order Accelerated Startup – The New Business School

  • Accelerators Are The New Business School

    accelerators-are-the-new-business-scheool

    This article originally appeared on TechCrunch on July 11th, 2015

    It’s no secret that most startups fail. What’s a bit less obvious is that most startup accelerators also fail. While a few top-tier programs get the cream of the crop unicorns of the future, the hundreds of others struggle to attract teams that will produce the investment-grade companies on which their models so depend.
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  • Can A 3 Week Extreme Accelerator Produce A Billion Dollar Startup?

    Over the weekend my article on TechCrunch on how accelerators are the new business school seemed to hit a good nerve. Coincidentally, it went live as I’m serving mentor duty at The European Innovation Academy, a unique, three week extreme accelerator program in Nice, France. Over 400 students from five continents have descended on University of Nice Sofia Antipolis campus to form teams with strangers, mash up their ideas, launch over 70 products, and race to 1,000 users. All in just 3 weeks. They are assisted by over 50 international mentors from business, venture capital, and academia.

    It may seem impossible to produce anything of value in such a short period of time, but I submit to you the four teams under my wing: three were conceptualized and built from scratch since July 6th and one existing that made a major pivot with the help of new team members. Next week they will compete to be in the top-10 to pitch for real funding in front of a panel of VCs.

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  • Not All Money Is Created Equal — Five Startup Investors to Avoid Like the Plague

    Not All Money Is Created Equal

    Since the second coming of startups began a few years ago, I’ve visited dozens of countries, presented to thousands of founders in keynotes and workshops, and mentored a couple of hundred one-on-one. Early in a startup’s lifecycle the most pressing questions always seem to be around fund raising. Unfortunately, most of these conversations also come with a sense of desperation where the founders are ready to sell their soul to the devil just to see their dreams come true.

    From the only kind of experience that truly matters, personal, I can tell you that not all money is created equal. Most first time founders may think that all they need is the cash. In reality, this early money dries up MUCH faster than one might expect and having wrong investors on board will provide zero value in stressful situations, will likely just delay your startup’s death, AND waste your non-refundable lifetime in the process. It is crucial to take on investors who can and will help with experienced advice, connections, and personal empathy as you go through this near impossible startup journey.

    Take heed, here are the types of investors to avoid at all costs… even if it means abandoning your startup with no other financing alternatives. After all, you only live once and have a limited time to become successful.

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  • The Government Once Built Silicon Valley

    This post appeared on TechCrunch on July 4th, 2014

    In May, I received an invitation to participate in the “Startup Global Design Workshop” hosted by the White House Business Council and Business Forward. The organizations are working on bridging the gap between entrepreneurs and Washington.

    At the White House West Wing
    At the White House West Wing

    Currently, small-to-medium-sized enterprises are responsible for 98 percent of U.S. exports. As part of the President’s National Export Initiative, this event was an effort to determine how American startups can be made aware-of and interested in exporting more and sooner.

    A small number of forward-thinking venture capital firms like DFJ and 500 Startups have looked outside Silicon Valley for some time. More recently, even Y Combinator has realized it needs to get out of its Silicon Valley comfort zone and take advantage of worldwide talent and growing markets.

    Looking at the stats, it is only surprising that most Silicon Valley VC firms are still only willing to make investments within an hour’s drive of their Sand Hill office:

    • 95% of the world’s consumers live outside of the U.S.
    • 1 billion consumers worldwide will enter the middle class in the next 15 years – 80% of this growth will be outside of the U.S.
    • Though only 1 percent of U.S. companies export, 2012 was a record year with $2.2 trillion

    Decades and generations of specialization have concentrated the financial industry in New York City, the entertainment industry in Hollywood, and of course the center of the startup universe in Silicon Valley. That last one was no accident.

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  • Eight Road Warrior Travel Health Hacks for the Busy Entrepreneur

    Max-Max

    Despite all of the video conferencing tech, travel will always be a crucial part of business. You don’t have to be a sales machine to make frequent travel a normal part of your role – as even startups are getting increasingly global. Everyone knows that nothing is more important than taking care of their health but travel, too often, provides a convenient excuse.

    Between offices in Silicon Valley and Ukraine, exploring startup ecosystems on four continents, and frequent speaking engagements; in the last couple of years I’ve found myself racking up some serious frequent flyer miles. Worst yet, I’ve been switching 8-14 hour time zones twice or more each month. I’m not getting any younger and the travel will not let up any time soon. So I’m becoming increasing more focused on staying healthy through it all.

    More recently, I’ve been sharing my acquired and tested “travel health hacks”. They are collected for your pleasure below – I hope you find them useful in dropping your excuses.

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