Fast Company SA February 2018 - Issue 33

TRANSFORMING A NARRATIVE The authentic African story behind M&N Brands

FACEBOOK MESSENGER

The ethical dilemma

BEHIND THE BRAND

Get moving with Giphy

INNOVATION LED BY DESIGN THINKING

An essential part of success in the digital revolution R35.00

FEBRUARY 2018 FASTCOMPANY.CO.ZA

16014 7

“Transformation is about diversity and embracing new and different perspectives.”

ZIBUSISO MKHWANAZI

9 772313 330006

Group CEO M&N Brands

Meet the future, today.

Use your mobile phone camera to read.

CONTENT

February 2018 “Our company has been formed to enable Africans to start telling their own stories instead of their stories being told for them.�

COVER STORY

22

Liberating the African perspective M&N Brands Group CEO Zibusiso Mkhwanazi has his say on transformation in the industry, as well as how starting small was his recipe to success

By Evans Manyonga

SPECIAL FE AT UR E

50

Design Thinking outside the box How changing thought processes can jumpstart a new revolution

“Innovation is mandatory for prosperity - it has always been that way.”

FEBRUARY 2018 FASTCOMPANY.CO.Z A 3

CONTENTS N E XT 14 The financial pros and cultural

woes of Facebook Messenger

18 Giphy – worth a million words 36 The future of retail in the age

of Amazon

64

Hybrid SUVs and their recipe for success

REGUL ARS 06 From the Editor 08 Recommender 49 UCT Column 68 Fast Bytes & Events 72 Design thinking for

dummies

By Craig Hannabus

“A designer works with the script and the story, whether it’s real or period or musical or whatever.” Michele Clapton, page 40.

4 FASTCOMPANY.CO.Z A FEBRUARY 2018

AFRICAN NEWS AGENCY CEO Grant Fredericks

grant.fredericks@africannewsagency.com

DEPUTY EDITOR

EDITOR-IN-CHIEF Evans Manyonga

evans.manyonga@anapublishing.com

DIGITAL PLATFORMS

Saarah Survé saarah.surve@anapublishing.com

By Digital Publishing

ART DIRECTOR

FINANCIAL MANAGER

Stacey Storbeck-Nel

stacey.nel@anapublishing.com

CHIEF SUB-EDITOR Walter Hayward

HEAD OF SALES

Kyle Villet

ADVERTISING SALES EXECUTIVES

Keith Hill, Tony Malek, Mandla Mangena, Kevin Petersen, Jacky Villet

Charles Burman, Catherine Crook Lisa-Marie de Villiers CA(SA)

PRINTER RSA Litho

DISTRIBUTION

MDA Distribution

SUBSCRIPTIONS

susan.ball@anapublishing.com

PUBLISHED BY

OFFICE MANAGER

SAP, Tenebris Lab, Zohar Lazar, Emiliano Granado, Selman Design, Brian Stauffer, Chloe Aftel, Aaron Feaver, Macall B. Polay/HBO, Stuart Hendry/Netflix, Adobe Stock, Freepix.com, Indio Design

Joe Mansueto, Mansueto Ventures

CEO

Eric Schurenberg

EDITOR

Robert Safian

DEPUTY EDITOR David Lidsky

EXECUTIVE EDITOR Noah Robischon

Lori Hoffman

Louise Marsland, Anneleigh Jacobsen, Prof. Walter Baets, Pepe Marais, Alistair King, Koo Govender, Abey Mokgwatsane, Kheepe Moremi, Ellis Mnyandu, Thabang Skwambane

Cover: M&N Brands

CHAIRMAN

DIRECTOR, EDITORIAL STRATEGY

SOUTH AFRICAN EDITORIAL BOARD

ARTISTS

FAST COMPANY INTERNATIONAL TEAM

Jill Bernstein

susan.ball@anapublishing.com

Austin Carr, Evans Manyonga, Dan Marcus, Mark Wilson, Michael O’Carroll, Mills Soko, Noah Robischon, Saarah Survé, Siphosethu Nini, Sonwabo Macingwana

robbie.stammers@anapublishing.com

EDITORIAL DIRECTOR

Susan Ball

EDITORIAL CONTRIBUTORS

PUBLISHING EDITOR Robbie Stammers

CREATIVE DIRECTOR Florian Bachleda

DESIGN DIRECTOR Ted Keller Editor-in-chief: Evans Manyonga Physical address: 176 Main Road, Claremont, 7700, Cape Town Postal address: PO Box 23692, Claremont, 7735 Telephone: +27 (0) 21 683 0005 Websites: www.fastcompany.com www.fastcompany.co.za www.anapublishing.com

PHOTOGRAPHY DIRECTOR Sarah Filippi

ART DIRECTOR Alice Alves

PRODUCTION DIRECTOR April Mokwa

CHIEF DEVELOPMENT OFFICER Christina Cranley

CHIEF FINANCIAL OFFICER Mark Rosenberg

No article or any part of any article in Fast Company South Africa may be reproduced without the prior written consent of the publisher. The information provided and opinions expressed in this publication are provided in good faith, but do not necessarily represent the opinions of Mansueto Ventures in the USA, Insights Publishing or the editor. Neither this magazine, the publisher or Mansueto Ventures in the USA can be held legally liable in any way for damages of any kind whatsoever arising directly or indirectly from any facts or information provided or omitted in these pages, or from any statements made or withheld by this publication. Fast Company is a registered title under Mansueto Ventures and is licensed to Insights Publishing for use in southern Africa only.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 5

FROM THE EDITOR The digital revolution and design In late 2017, I had lunch with renowned innovation specialist,

John Sanei. Highly descriptive, “switched on”, confident, engaging and relaxed are the immediate words from my memory of the encounter.

Sanei, a trend and innovation specialist, global speaker, best-selling author, entrepreneur and Singularity University Faculty member was expanding a bit more on strategic thinking and future innovative growth imperatives to drive sustainable development and long-term relevance in a changing world.

THE EXPERIENTIAL ECONOMY “The experiential economy is rising against the ownership economy and designled thinking has a strong role to play”, was one of the key discussion points I made a mental note of. What did this mean in the bigger scheme of things?

“At some point it becomes more rewarding and even financially cheaper to experience a product or service than take full ownership,” he further noted, (a point the millennial generation has taken note of). Something along the lines of using an Uber instead of owning a car that will depreciate daily in value further compounded (by rising maintenance and insurance costs).

At the heart of all this is design. Think Uber, think Airbnb, think Google and think Apple, and the future becomes a bit clearer. These giants have risen because of integrating this simple aspect of forward thinking, flawless design and the experiential offering into their products and services.

DESIGN-LED THINKING AND DESIGNS

“ T ECHNOLOGY IS REVOLUTIONISING THE WAY DESIGNS ARE TURNED INTO FINISHED PRODUCTS.”

Technology is revolutionising the way designs are turned into finished products, heralding a new era of digitally-driven production. The new modern industrial digital revolution is upon us.

In mid-January, I visited the only IBM research lab in Africa and witnessed a 3D printer at work. I was impressed with the machine’s attention to detail and it is safe to say it will change the manufacturing industry in a short space of time.

Markus Keyser’s Solar Sinter machine is another example of the ingenuity of design-led thinking. The Solar Sinter machine is a solar-powered rapid prototyping machine that converts sand into three-dimensional objects (chairs, tables, etc.), meaning that it could manufacture items in the middle of a desert without needing any additional raw materials. Unorthodox and astounding.

tape that had at times limited the global car manufacturer’s creativity.

“I respect something that’s new but not perfect, rather than something that’s beautiful but nondescript. I’d rather be challenged than made comfortable. Polarising is okay,” he said.

The next big thing will not be endorsed by everyone. To make progress we need to think out of the box. An unorthodox idea without controversy is usually bound to fail. Let’s disrupt, re-define and polarise. The more we do so, the higher our chances of progress.

This is our design issue. Design-led thinking; physical design and even automotive ingenuity are some of the core themes. Take a peek into the next phase of human development.

The future is what we make of it. Ideas are the backbone of human progress, however, creativity and design-led thinking are at the centre of it all.

I am proud and honoured to have been included as one of the 100 most influential people in South Africa under 40, in 2017,

by Avance Media

THE POLARISING FACTOR Speaking in late 2017, the chief designer at Toyota’s Calty studio in the US, Ian Cartabiano, noted that Toyota President Akio Toyoda had given the firm’s designers increased “creative freedom”. Moving away from the bland design red

6 FASTCOMPANY.CO.Z A FEBRUARY 2018

Evans Manyonga evans@fastcompany.co.za @Nyasha1e

KINGJAMES 42811

INNOVATIVE IDEAS FOR A SAFER SA A secure solar energy solution and a hydrogen-powered, traffic-tracking drone – these are two of the original ideas from the nine finalists in the Santam Safety Ideas competition, Season 2.

Focused on inspiring smart solutions to make South Africa safer in a time of rapid change, this competition is run in partnership with LaunchLab, an initiative of Innovus, the industry interaction and innovation company of Stellenbosch University. The top nine innovators have entered a 17-week incubation programme to refine their safety ideas into marketable products.

The Season 1 winners, Ntando Shezi and Ntsako Mgiba, took the title for Jonga – a costeffective security system for low-income families.

Stemming from the desire to offer protection for everyone, Jonga is an excellent example of the ingenuity Africa is famed for.

Mokaedi Dilotsotlhe, Executive Head of Brand and Marketing at Santam, says it’s imperative to use this resourcefulness to make our country a safer place for everyone. “We believe this year’s

top nine represent the kind of innovation required for a safer future.”

• Buyisa Me: Attachable tags that help users to track and retrieve their valuables. – Muzi Xaba

This year’s top 9 ideas

• Info Tab: An app with location sharing, a panic button, video recording and identity verification.

– Lebogang Selao and Nkosinathi Mamafa

• Solar Turtle: A secure solar energy solutionin-a-box designed to power communities in the dark. – James van der Walt • IBF Camera: A smart security solution to alert and protect motorists from road crimes. – Jeremiah Mogale • MoreEyes: A biometric data solution to track, signal and predict crime. – Brett Tollman • Ukhozi: A device that helps communities respond to crime and alert their neighbours.

– Harem Yeng and William van Wyk • Bathopele Innovations: A device to track and protect assets such as vehicles and home appliances. – Khotso Maloi • Flow: Hydrogen-powered drones that monitor traffic patterns and road safety. – Gerard Walfh and Matthew Kaap

Over 100 entries were received and appraised by a panel of carefully selected judges. Each of the finalists had to come up with an idea that addresses risks related to homes, cars or personal safety, harnessing the power of technology to make a difference. Small ideas can have big potential, and these solutions all have what it takes to make South Africans safer.

Santam is a leading insurance innovator on a mission to bring brilliant safety-centred concepts to life. Says Dilotsotlhe: “The Safety Ideas programme is something we feel extremely passionate about. We want to back bright minds and bring about sustainable businesses that serve a purpose, and society.”

• MyLifeLine: A watch that doubles as a mobile app with a panic button and tracking device.

– Herman Bester

Santam is an authorised financial services provider (licence number 3416).

Insurance good and proper

THE RECOMMENDER What are you loving right now?

FAVOURITE LEISURE DESTINATION BAKWENA DAY SPA I have travelled a lot and destinations with health spas always rank higher for me. Being kneaded, nurtured and prodded into paradise is as essential as breathing for me.

I sneak off for a whole day at a time to indulge myself – in a massage that never ends – at the Bakwena Day Spa on Zewenwacht Wine Estate. You can either overnight at the estate’s quaint and characteristic country house or drive the 30 short minutes from the city. First up on the menu is a full-body hot stone therapy massage. From there, it just gets better as you roll into the foot massage, followed by the head and neck massage and a hand and arm massage. A full-body exfoliation and an aloe facial are included. Because they’re on a hill, when you’re conscious you also get to bliss out with views over the city, as far away as Muizenberg. During your downtime, the uberindulgent day includes breakfast, lunch, a cheese platter and complimentary drinks – including Zevenwacht wines.

Shellee-Kim Gold – journalist, travel and guide book writer

FAST COMPANY RECOMMENDS BOOK: EXPONENTIAL POTENTIAL We live in a crazy age. Top companies are growing faster than ever and some companies are disappearing faster than ever. If you do not have the right mind-set and toolset, your company will soon be destined for the history books. In Exponential Potential, Dean Furman covers almost every element of growing a company and gives you the tools to ensure that you disrupt before being disrupted. This book will give you the Exponential Potential to take your business to a whole new level. Furman is the founder and CEO of 1064 Degrees – an innovation and growth advisory firm. He has founded new companies and created new businesses and products for large multinational organisations. Furman has won multiple awards for best-of-breed solutions, and in 2016, was voted one of the top South Africans under the age of 35 by the Mail & Guardian. Dean is an actuary by profession, but most of his learning has come from helping companies of all sizes innovate and achieve massive growth. He shares much of his knowledge in Exponential Potential.

8 FASTCOMPANY.CO.Z A FEBRUARY 2018

FAVOURITE RESTAURANT THE BUTCHER SHOP & GRILL On my most recent visit to Johannesburg, my colleague took me to this amazing steak restaurant in Sandton. The food was of an exceptional quality. Be sure to order the cuts just as they are as any sauces are just not needed. As you’d expect, fantastic wines too, and impeccable service (the sommelier takes you to his wine ‘cave’ to pick your bottle!).

I also enjoyed sitting looking out over the lively, vibrant square.

Siyavuya Zanele – Actuary, PWC

SCREEN TIME Our pick of the most download-worthy design and editing apps currently on the market

HOME DESIGN 3D Home Design 3D is an exclusive, brand new app with the latest designing features and 3D printing services. With the new app, designing and remodelling your house in 3D has never been so quick and intuitive. Accessible to everyone, Home Design 3D is the reference point for interior design applications, ensuring a professional result at your fingertips. In the app, users can 3D print a project or design with just the tap of a finger, choose their scale and order a customised 3D-printed model.

Your unique model will then be directly delivered to your door.

IDESIGN iDesign is one of the leading 2D vector drawing and logo designing apps that lets you make beautiful logos on your Apple device. iDesign helps you create highresolution logos, illustrations and drawings that are on par with the professionals.

The app comes with numerous designing features, useful toolbars with some optional extras, and lots of drawing tools, text tools, freehand drawing options, and many other features great for the creative minds among us.

PICMONKEY Who says you can’t polish up a portrait while riding the bus or sitting in your dentist’s waiting room? With the PicMonkey app it’s easier and faster than ever. The app’s new Touch Up tools could be considered magic! Zap a few zits away, brighten the eyes, and smooth the complexion. Boom! Share-worthy radiance for everyone.

ARTSTUDIO Do you need an on-the-go editing and designing app without shelling out any money? Then your best bet is ArtStudio. This app isn’t just for those looking to doodle either. You can sketch, paint and even edit your photos, should you need to. There are tons of great features, including a selection of brushes, familiar to those accustomed to programs like Corel, Photoshop and GIMP. With a user-friendly interface, creating is a breeze without too much hassle – thanks to a brand new graphics engine. There are plenty of other helpful features that come pre-loaded in the app, including 16 tools, 150 brushes, layer options, 40 available filters and plenty of more additions worth checking out.

AFFINITY Affinity Designer is the fastest, smoothest, most precise vector graphic design software you can have on your operating system.

Built from the ground up over a five-year period, every feature, tool, panel and function has been developed with the needs of creative professionals in mind. With continuous innovation and development, the result is a groundbreaking application that will revolutionise how designers work. Comprising Affinity Designer, Affinity Photo and Affinity Publisher, the software places emphasis on speed, power, and accuracy.

Affinity Designer and Affinity Photo received glowing reviews from Mac users around the world, before being launched for Windows users too.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 9

IS THERE A “WEB TRUST” THAT NEEDS TO BE BUSTED? In a digital economy, the power of networking and big data has created a new set of monopolies.

Is this a crisis or not?

By Chris Waldburger

10 FASTCOMPANY.CO.Z A FEBRUARY 2018

Apple, Google, Microsoft, Amazon, and Facebook.

The top five most valuable companies in the world are all from Silicon Valley – and four of them (Microsoft excluded) are web-based.

This is perhaps not any cause for surprise in the modern economy.

But when you look at the market share of some of these tech giants, something staggering definitely emerges.

In the words of University of Southern California Innovation Lab director, Jonathan Taplin, writing for the New York Times, “Google has an 88% market share in search advertising, Facebook (and its subsidiaries Instagram, WhatsApp and Messenger) owns 77% of mobile social traffic and Amazon has a 74% share in the e-book market. In classic economic terms, all three are monopolies.”

The term “monopoly” is almost always

used in a pejorative sense. And the next sentence after stating an entity is a monopoly is to ask how regulators can break the entity up for the common good.

But should governments really be punishing tech companies for offering a unique service?

Chief of the so-called PayPal mafia, Peter Thiel, famously noted that competitive capitalism is unrewarding and that monopoly services, or “thesis statement” companies, should be the real goal of entrepreneurs.

HARNESSING THE “PLATFORM ECONOMY” It seems that is exactly what has happened.

Nobody can really compete with what Google or Facebook do, on any meaningful scale.

That is not because they run huge networks of capital-intensive infrastructure as the “robber barons” did in America’s Gilded Age. Instead, the tech giants emerged almost

out of the realm of pure ideas and, aided by the connectivity of the internet, were able to leverage those ideas toward a non-competitive market stake in our new so-called “Platform Economy”.

American writer and academic, Nick Srnicek, has literally written the book, Platform Capitalism, on this new type of economic activity.

Srnicek points out that since 2008, there has been a proliferation of terms stretching to capture how markets have changed to revolve around data rather than physical raw material – terms such as “the gig economy”, “the sharing economy”, “the fourth industrial revolution” and so on.

But what is the over-arching concept that unites these varying attributes of the new way business is done?

Srnicek names this concept “platform capitalism” – a new way of organising data centred upon the “network effect”, whereby the more users any platform (such as Google or Facebook or Uber) gain, the more data they have to fine-tune their algorithms, the better the algorithms and data quantity, the better the final data delivery in the form of a service offered to the user. This cascading effect means one platform will become in essence “the commons” for an activity.

He writes, “The end result of these basic dynamics is a tendency for companies to grow big, to grow fast and to monopolise their core businesses.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 11

These consequences pose significant political challenges, particularly as these companies come to control the basic infrastructure of digital society…”

But are monopolies inherently dangerous?

Is there a need to worry about the overwhelming success of these big tech firms?

Much of the heat currently being directed toward the big “platforms” – from politicians, media, and academia – relate back to worries concerning “fake news” and the manipulation of social networks by shadowy operatives looking to highjack common platforms in order to swing public opinion.

Notably, an early investor in Facebook, Roger McNamee, recently penned an essay for

12 FASTCOMPANY.CO.Z A FEBRUARY 2018

“ A MONOPOLY IS NOT ONLY DEFINED AS BUSINESS THAT HURTS CONSUMERS, BUT EQUALLY AS BUSINESS THAT HURTS COMPETITORS.”

the Washington Monthly in which he stated his opinion that the nature of social media platforms is to encourage negativity, hatred, and divisiveness.

“Algorithms that maximise attention give an advantage to negative messages. People tend to react more to inputs that land low on the brainstem. Fear and anger produce a lot more engagement and sharing than joy.”

The mass effect of platforms thus creates bubbles of outrage, rather than connecting users with diverse opinion and debate. McNamee suggests this is why we have seen shock democratic results like Brexit and Trump’s electoral victory.

Tellingly, similar sentiments have been emerging from the other side of the political spectrum. Political actors like controversial former Trump strategist,

Stephen Bannon, has called for online platforms to be regulated like public utilities, in a bid to quell the alleged power of tech titans to disseminate political opinion.

According to sources close to him whilst he was still in the White House, Bannon believes certain platforms have become necessities in modern life, and thus require special regulation like railroads and water supply.

In fact, Mark Zuckerberg himself has even used language like this to describe Facebook, arguing that Facebook should be considered a “social utility” rather than a “social network”.

Accusations of monopolism are not only being directed toward social media.

Google has recently been fined nearly $3 billion by the European Commission for favouring its own commerce in its search algorithms to the detriment of other vendors.

Europe has a low bar for antitrust litigation. A monopoly is not only defined as business that hurts consumers, but equally as business that hurts competitors.

Google has made some changes to how it advertises its own business since then, and is also contesting the fine, but the case, regardless of one’s personal sympathies towards Google, offer up a pertinent and intriguing question: How should we treat companies who essentially have no competition, who have, in the formulation of Thiel, taken the leap from zero to one, in offering something unique?

It is clear the big tech companies are mobilising in the face of some possibly hostile answers to these questions. Google, Apple, Amazon, and Uber have all ramped up their spending on lobbying the American Congress.

BUST THE TRUST? Already there has been a swell of opinion online that a company like Google should be broken apart – to wall off its search engine from its other pursuits.

Or that Amazon should be treated legally as a “common carrier” like a waterway or road.

British Prime Minister Theresa May has herself made the suggestion that social media companies be held responsible as publishers of their content – a move which would mean companies having to censor their users’ content.

In stark opposition, other activists, worried about being censored by the likes of Twitter, have called for courts and legislatures to extend free speech rights to private, online spheres – ostensibly because those spheres are so successful and ubiquitous that they can no longer be called “private”.

BEYOND THE REGULATORY SOLUTION But to treat the big platforms as public utilities would also have the effect of making them beholden to government, as well as entrenching them as public

bodies in perpetuity, with the added protection from future competition.

Noted South African libertarian thinker and Daily Maverick columnist, Ivo Vegter, argues that such government intervention would be extremely short-sighted.

“It would be a dreadful idea to regulate platform companies such as Facebook, Google, Microsoft, Amazon, Reddit or Apple like public utilities. For some services, like Facebook and Reddit, there is a natural monopoly due to the network effect. But remember that before Facebook, there were other ‘monopolies’, like Friendster and Myspace. Nobody’s dominance is secure in a free market, in the long run.

“Regulating them as utilities would turn them into protected monopolies or cartels.

Without the threat of outside competition, they will lose the incentive to satisfy customers, and instead will be free to provide the minimum quality legally required of them at the maximum tariff they’re permitted to charge. They’ll become like the post office, with no incentive to innovate or invest in better infrastructure or services.”

Ultimately, he notes that for those distrustful of corporate power, it would be foolish to trust governments rather to regulate online data.

“If everyone had to operate under utility rules, we would have less diversity of opinion, not more. Would you want Donald Trump to regulate ‘fake news’ on CNN or the New York Times? If not, by what right should government dictate Google or Facebook’s policies?”

Vegter thus points towards the opportunity, rather than the threat, posed by the big platforms.

If there is distrust towards current online platforms, a gap opens up for competition and for new ideas, and for new ways of connecting people with useful data.

Already there is talk of an analogue revolution brewing – a backlash of moleskin, ink, and vinyl against the binary code of our digital world.

In the hyper-fluid world of the new economy, government will never have the power to innovate quickly enough, and with enough integrity, to protect the public from any of the perceived dangers of monopoly-like data platforms.

Only new innovation can break old patterns. And if there is a brewing discontent with some of the darker aspects of current online platforms, which may suggest the hegemony of those platforms may not be as complete as currently thought.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 13

Facebook Messenger Has Huge Financial Potential—and Big Cultural Risks. Sound Familiar?

MIND & MACHINE FA C E B O O K

B y A i n s l ey H a r r i s Illustrations

by Selman Design

14 FASTCOMPANY.CO.Z A FEBRUARY 2018

When Facebook first

unveiled News Feed in 2006, its 10 million users threatened to revolt. In a matter of months, though, the redesigned product took off with users and, ultimately, advertisers.

The familiar, blue-bordered scroll of news articles and baby pictures now reaches 2 billion people around the world and accounts for much of the company’s more than $30 billion in annual advertising revenue.

News Feed is also under fire, of course, for reinforcing

partisan viewpoints by creating social echo chambers, spreading misinformation, and, through its targeted advertising tools, possibly enabling election interference. As investigations unfold into how Russian intelligence operations manipulated Facebook, it’s clear that News Feed has become a global political weapon—and some users are rethinking its place in their lives. This controversy exacerbates a more basic business problem for News Feed: Revenue growth has been falling every quarter for the past year, and Facebook executives have suggested to investors that News Feed capacity is, in part, the culprit. With ads already littering users’ feeds, there is dwindling real estate available for additional ones, and the quality of the experience is starting to suffer.

Amid this complex maelstrom of controversy and stuttering growth, Facebook has been increasingly turning its attention to another form of social interaction: messaging.

Last year, for the first time, the world’s largest messaging platforms surpassed the world’s largest social networks in terms of monthly active users. Messenger, Facebook’s satellite app for private conversations, has 1.3 billion monthly users; WhatsApp, which Facebook acquired for $22 billion in 2014, has 1.3 billion monthly users of its own. Whether these platforms are the next big revenue spigot—or the next frontier of exploitation— may be one of the biggest questions facing Facebook’s future.

So far, both Messenger and Whats­ App are largely unmonetised—a fact that seemed to irk CEO Mark Zuckerberg on a recent earnings call, when he mentioned wanting to “move a little faster” in bringing more ads to chat. The comment set off a flurry of investor speculation: Wall Street knows that if Zuckerberg and his team can turn one or both of their enviable messaging assets into revenue generators on par with News Feed, the windfall would be enormous. (WeChat, the messaging app run by China’s Tencent, elevated the parent company’s annual ad

revenue from zero to $4 billion in the span of just two years.) The question is whether Facebook can introduce brands into chat—and then turn on the revenue tap—without sabotaging the implied intimacy of messaging, or following News Feed into a credibility crisis.

The task of solving that delicate puzzle has fallen to David Marcus, Facebook’s vice president of messaging products. A dignified but unassuming presence at Messenger’s Menlo Park headquarters who favours faded jeans and speaks with the slight accent of a native Parisian, Marcus has helped Messenger add 1 billion monthly active users since he left PayPal to join Facebook in 2014.

Before Marcus took over, Messenger’s positioning in the market was unclear.

Between Gchat, iMessage, Skype, and Snapchat, there was no shortage of options for private digital conversations. Marcus quickly concluded that Messenger needed more compelling features to draw in users. In the past few years, he has helped introduce augmented reality, group video chat, video-chat filters and masks, stickers, social games, and more to lure in Facebook users with media-rich ways to chat that are particularly attractive to groups of people. “By offering richer tools for people to communicate, we’ve managed to make it more and more of a primary messaging platform,” he says. “When you’re not the incumbent, you need to differentiate.”

Marcus has also had to be creative in introducing ad products to the platform. In recent months, his team has launched Click to Messenger ads, which take users from a News Feed or Instagram post to a conversation with a brand in Messenger; Messenger Inbox ads, which appear alongside open threads with friends and family; and Sponsored Messages, a retargeting product that allows advertisers that have previously conducted a conversation with a user to reengage. The goal is to get people communicating directly with brands and small businesses from within the Facebook ecosystem. After all, why open a browser tab to search for a business and then call a phone number (that no one answers) when the process can be condensed within Messenger? “Businesses want to open more conversations with potential customers or existing customers,” Marcus says. He predicts that, before long, “people will have a habit

“ M ESSENGER CHATBOTS ARE DOING ONE THING REMARKABLY WELL: WITH EVERY INTERACTION, THEY ARE COLLECTING DATA AND DEVELOPING PROFILES OF USERS.”

FEBRUARY 2018 FASTCOMPANY.CO.Z A 15

MIND AND MACHINE | FACEBOOK

of coming to Messenger for every business interaction,” from haircut scheduling to UPS tracking, because the experience will be far superior to that of 1-800 numbers, email order confirmations, and Twitter.

Much of Marcus’s vision relies on chatbots, which can automate replies within Messenger. Brand interactions, in a messaging context, perform better when they are personalised—taking into account, for example, a user’s order history or colour preferences. Brands also have to insinuate themselves into a very intimate environment, full of exchanges with friends and family, at exactly the right time.

A few years ago, it would have been prohibitively expensive for marketers to individualise their interactions this way. But thanks to AI, chatbots are now getting better at doing it on a mass scale.

Meanwhile, Messenger is getting a boost from Facebook’s 70 million active businesses.

In a matter of months, tens of thousands have appeared on the chat platform. Users can chat with Kim Kardashian’s bot about her weekend plans, buy movie tickets via Fandango, and book a Mercedes test-drive. There are even some Messenger-only businesses: Snap Travel, for example, uses bots and human travel agents to book hotels via chat.

The majority of these business accounts are still manned by real people, who respond asynchronously. But Messenger is encouraging brands to create automated experiences, despite the fact that many still come across as a bit, well, stupid. A Trulia bot, for example, didn’t understand my interest in renting an apartment in a Brooklyn brownstone, something that would take just a few clicks on a website like StreetEasy. An Adidas bot, designed to showcase the brand’s fitness studio, was stumped by my simple “buy shoes” query.

Yet Messenger bots are doing one thing remarkably

Automatic Friends How five brands use Messenger chatbots to reach—and empower—users 1.

Food Network The culinary channel’s chatbot lets users browse recipes by celeb chefs such as Bobby Flay and play games like Meal Match with friends.

2.

American Express Launched last summer, the AmEx bot can respond to questions about a user’s card balance and enable purchase notifications to protect against fraud.

3.

American Eagle Take a photo of something you like, anywhere, and the retailer produces a custom catalog of similar, shoppable styles.

4.

Shop T-Mobile Buy a new phone or sign up for a T-Mobile plan through the com­pany’s AI-enabled bot.

5.

Spotify The streaming service lets users create playlists with friends from within an existing conversation.

16 FASTCOMPANY.CO.Z A FEBRUARY 2018

well: With every interaction, they are collecting data and developing profiles of users. Although Facebook is still a long way from bringing the AI it has developed for News Feed ad targeting to Messenger’s conversational context, Marcus is laying the foundation. In July, at a daylong event designed to showcase and gather feedback from a dozen of the 100 000 developers that are now active on Messenger, he updated attendees on Messenger’s latest AI capabilities, designed to help bots better understand unstructured user questions. “A big requirement to automation is understanding what people are asking,” he said. So Facebook was making its natural-language-processing knowledge available to developers. “It’s a little geeky, but it actually will enable automation at scale.”

Deploying conversational data doesn’t just help developers create business bots for brands; it also gives Messenger an edge with its own virtual assistant, dubbed “M.” Earlier this year, the assistant started inserting third-party bot suggestions into private conversations, as a way to encourage people to interact with them. If users are receptive, M could become a powerful way to start building business-toconsumer chat across the Messenger user base, says Kemal El Moujahid, director of product management for Messenger Platform and M. The ultimate vision is to create an all-encompassing ecosystem along the lines of WeChat, which serves as a gateway to chat, news, shopping, and more for a billion Chinese consumers. “The whole thesis is, users are going to be able to run their life from Messenger,” El Moujahid says. “[Users] want to be able to play a song, book a restaurant, all within Messenger. So by making it very efficient for businesses to deliver these services in a frictionless way, then we’re really serving our users.”

Adding the ability to transact would be a natural extension.

Might the public backlash Facebook is facing and potential regulatory changes complicate Messenger’s grand plans? Without question. In the midst of the Russian ad investigation—which has now extended to how Russian agents used Messenger to communicate with users—some policy makers are advocating for Facebook to publicly release all political ads (or all ads, period) that appear on its platform. When considering this demand in the context of Messenger, where ads take the form of one-on-one conversations, that solution becomes nearly impossible to implement. “It’s one thing to be selling a product at the exact right time,” says Robyn Caplan, a researcher at the Data & Society think tank, of Facebook’s ad targeting. “It’s another thing to start selling ideas at the exact right time. What are the circumstances in which [targeting] should be allowed? We’ve created specific guidelines around ads in past media regimes.”

Of course, there has never been a regime quite like Facebook, which asks us to hand over personal data in return for social utility. With Messenger, Facebook is offering users commercial utility, as well. But for people who are already wondering if News Feed has become too influential, the price to pay may be simply too high.

WANTED

Colton James The One to Watch Timepieces geared towards those with impeccable taste, but an eye on frugality.

With Millennials desiring simple, yet stylish, quality watches at an affordable price - but finding the market lacking - two fashion forward South African engineering students have embarked on a quest to create the perfect armcandy. The result: Colton James Timepieces – a reasonably priced range of customisable watches made from the finest materials.

As fashion is rapidly evolving, Colton James offers interchangeable straps that enable wearers to instantly update their look. The easy-to-use, quick release mechanism means that no tools are needed.

Plus, there are no loose parts that can get lost.

As the timepiece itself is classically designed, it won’t age, so clients get maximum return on their investment as well as have

a watch head that’s forever fashionable. It can be switched up to echo the trends of the time, however, through the addition of the latest straps.

A watch builder is

available on the website to help men and women play around, personalise and pick their ideal watch, with a choice of nylon, mesh and leather straps in the season’s hottest colours.

In their pursuit to produce unique timepieces, the founders – Vincenzo Marchesini (23) and Christopher Lowndes (23) – drew design inspiration from history. Interestingly, they found that although the wristwatch dates back to 1810, it was only popular

amongst women until men caught on to its convenience during the AngloBoer War. At the time, only pocket watches were used.

The key differentiator between Colton James’ pieces and those of other brands is their high quality and relatively low cost. This is due to all middlemen (and their markups) being cut out, with Marchesini and Lowndes managing the entire process from design to distribution. The resulting

savings enable the team to use top-quality materials from around the world, such as fine Italian leather, a movement made by Seiko Epson and sapphire crystal glass (the second hardest mineral on earth), in the manufacture of the timepieces.

Colton James Timepieces are available online at coltonjameswatch.com and from selected American Swiss and Prime Time stores in the Western Cape.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 17

LEADING EDGE GIPHY

By Nicole LaPorte Photographs

by Emiliano Granado

OMG! Giphy Is Breaking Into the Entertainment Business On a mild Sunday

evening in September, a handful of staffers from Giphy gathered in the reception area of the company’s Los Angeles studios to watch the Emmy Awards. Sitting opposite a wall of flat-screen TVs with laptops perched on knees and La Croix cans nearby, the staffers gave off a convivial collegiate vibe. But this was only incidentally a social event. The Giphy folks had been tasked by the Emmys producers to “live GIF” the show, creating shareable, seconds-long video loops that could be used to comment on the broadcast itself—and punctuate digital conversations long after the Emmys were over.

By the time host Stephen Colbert was high-kicking through the opening number with a group of white-hooded dancers—a nod to The Handmaid’s Tale—Giphy’s team had already filled its home page with red-carpet banter. Then came the night’s biggest, and most controversial, moment: Former White House press secretary Sean Spicer rolled a faux White House podium onto the stage to deliver a send-up of his infamous “largest audience” claim about the inauguration. Immediately, the Giphy crew began to splice the scene into GIF form. Part of Giphy’s genius lies in not posting the obvious clip, so Spicer himself wasn’t of much interest. Rather, the editors surveyed the shocked and bewildered faces of the

18 FASTCOMPANY.CO.Z A FEBRUARY 2018

With his searchable database of seconds-long videos, Giphy CEO Alex Chung aims to “make content that people leave on all day”.

audience, looking for gold. They found it in Veep’s Anna Chlumsky, eyes bulging, neck veins popping, as she craned out of her seat.

Within minutes, a three-second clip was on Giphy (filed under #omg #shocked #no way #emmys 2017 #jaw drop). It quickly began trending. A week later, it had been viewed more than 13 million times.

Crazy reaction shots, cats clapping, clips of Joey from Friends baritone-ing, “How you doin’?”—this is the lingua franca of Giphy, the four-year-old company that has been largely responsible for popularising a new form of communication.

More than 2 billion of the company’s GIFs are shared each day, reaching some 300 million people daily via Giphy.com and the many platforms where Giphy is embedded: Facebook, Twitter, Tinder, iMessage, Slack, and even Zendesk. And Giphy is just getting started. “We think we can grow, like, probably three times what we have now, which is kind of crazy,” says cofounder and CEO Alex Chung.

Users are attracted to the hyper-abbreviated videos for the nuance and emotion they convey (much more than a smiley-face emoji ever could), but also their limitless nature. Giphy reports that it adds millions of moving images to its search engine daily.

That means that picking the right one has become not just a means of conveying a particular sentiment. “This is where everyone is trying to go, where conversations and entertainment mix,” says Chung.

This trait makes Giphy far more than just a search engine.

It’s becoming an entertainment platform in its own right—one where you might find the perfect LOL GIF and wind up scrolling through dozens of clips just for fun. “Why can’t you make search entertaining?” Chung asks. “Why is the number-one thing we do on the internet the most boring thing? It should be like watching TV.” Like BuzzFeed’s morning

program on Twitter, YouTube’s investments in streaming series, and Snapchat’s fourto five-minute-long shows, Giphy is at the vanguard of media. With 250 million users a month heading to its website and app, it’s become an ambient, always-on channel for the mobile age.

“You grow content, then you get distribution. You grow distribution, and then you get the good content,” Chung explains. “It’s very hard to start with nothing.” Giphy’s strategy to get access to shows like The Simpsons and Broad City has been similar to Twitter’s in its early days, when it went to Hollywood and offered hands-on service to get networks, producers, and stars to understand its value. Similarly, for the past three years, Giphy has worked with network and studio marketing teams on their “GIF strategy.” Chung’s crew helps set up their pages on Giphy, explains how to make GIFs more discoverable, and even creates GIFs in-house by running content through Giphy’s autotagging machine, which finds the most shareable moments.

Part of Giphy’s proposition, especially to notoriously demanding players such as Disney and CBS, has been its ability to get content into new channels. Early on, Chung and Giphy cofounder and COO Adam Leibsohn mapped out a plan to “work with social networks to get GIF buttons inside of places where they weren’t,” says Leibsohn. “We got GIFs on Twitter,” Chung says. “No one had ever done that before. GIFs on Slack. No one had done that before. We kept putting GIFs everywhere that you possibly could. We have GIFs in Outlook. Our mission was always to get distribution where no one has ever gotten distribution.” Leibsohn adds, “Especially if there’s something static. We’re like, ‘Why is that not moving?’ ” (“Make Everything Move” is a company motto.)

This steady expansion has helped the company scale at a dizzying rate. “I think of them as the Google for GIFs,” says ICM Partners’ head of digital ventures Jonathan Perelman. As a result, Giphy has evolved into “a turnkey part of our digital marketing campaigns,” says Dana Flax, director of digital and social media at HBO.

“THIS IS WHERE EVERYONE IS TRYING TO GO,” SAYS GIPHY CEO CHUNG, “WHERE CONVERSATIONS AND ENTERTAINMENT MIX.”

Giphy COO Leibsohn, who spent eight years in advertising, sees his company as a kind of television network.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 19

BEHIND THE BRAND | GIPHY

“It’s kind of automatic at this point that we launch a Giphy presence for every campaign.”

Today, HBO has more than 30 Giphy pages featuring in excess of 7 000 GIFs—not just for obvious watercooler shows like Game of Thrones, but also off-the-air series such as The Larry Sanders Show and The Comeback, proving how Giphy can keep older material culturally relevant and potentially introduce it to new audiences.

In advance of the October return of Curb Your Enthusiasm, HBO launched a Giphy page for the new season, and within two weeks, GIFs of classic Larry David moments (“Can I apologise for the apology?”) had been viewed more than 30 million times. “It allows us to take this show that’s been off the air for six years, reinsert it into the zeitgeist, and create opportunities for fans to use this content in their communications with each other,” Flax says.

Giphy assists this effort by creating extensive databases for popular content. Leading up to the premiere of the fourth season of Broad City last year, Giphy’s editorial team broke up almost every line and moment from the show’s previous seasons and made them available to users. It did the same thing with the Oscars, working with the Academy of Motion Picture Arts and Sciences to create GIFs that go all the way back to 1937. According to Lightspeed Venture Partners’ Jeremy Liew, who invested in Giphy, Chung was the first person to “connect the dots” between entertainment and GIFs in a way that “opened up the entire history of TV and movies to be chopped up.”

Even entertainment companies that don’t have an official partnership with Giphy rely on the service. Fans of Bravo’s Real Housewives franchise avidly upload GIFs of their favorite characters’ eye rolls and bitchy takedowns as the shows air. In fact, all of the Bravo content on Giphy is user generated,

All the World’s a GIF Giphy works with partners to turn content into videos.

Here, four channels where culture comes alive.

1.

The Academy Awards 3,200+ GIFS 1.5 BILLION VIEWS

Along with live GIFs of the Oscars, Giphy has helped the academy create clips from ceremonies dating to the 1930s.

2.

US National Archives 948 GIFS 381.8 MILLION VIEWS

The archives have turned everything from the Iwo Jima flag raising to Lincoln portraits into mini videos.

3.

NASA 1,000 GIFS 296.4 MILLION VIEWS

The space agency uses its channel to educate the public on past and current missions.

4.

GE 611 GIFS 142.1 MILLION VIEWS

How do you make industrial engineering cool? By slapping cheeky captions on videos of wind turbines and jet engines.

20 FASTCOMPANY.CO.Z A FEBRUARY 2018

Giphy’s editorial team, which includes, from left, Jasmyn Lawson, Stacy Rizzetta, and Tiffany Vazquez, is in charge of live-GIFing broadcasts and current events.

says Adam Zeller, VP of social media for Bravo & Oxygen Media, who credits the company for supplying fans with the digital tools, such as the Giphy camera and keyboard, to create their own content. “What we like to say at Bravo is that a picture is worth a thousand words, and a GIF is worth a million,” Zeller says.

Giphy is now looking to capitalise on this ubiquity. With revenue plans already under way (though under wraps), Chung insists that “we’re not going to charge [content partners] for what we’re doing now.” And before the company tries anything like a targeted ad product, it knows it will have to address its metrics problem: Beyond view counts, which were only introduced in late August (much to marketers’ relief ), and information on where a GIF travels (from Facebook to Twitter to iMessage, for example), brands and shows are mostly in the dark as to who’s viewing their GIFs. Chung says that in the months ahead, “we’ll be putting out a lot of different technology around tracking for our partners. It will be very comparable to what Facebook and everyone else has.”

Giphy is also looking at how it can get entertainment companies to not only give it decades of content to parse into bite-size moments but also create exclusives. “We want to have content that’s purpose-built for us,” says Brad Zeff, Giphy’s chief content officer. “With our partners, maybe that involves ancillary characters, ancillary story lines. How can we use the content that we’re making with our partners in a way that goes beyond simply an encapsulation or a singular moment from a show?” The company says at least one TV series is actively pursuing this strategy, creating GIFs as part of its production process.

By adding original content to its live-GIFing efforts and deep archival material, Giphy is betting it will become even more of a destination for users. “Everyone is fighting for this one-hour prime-time segment, right?” Chung says, referring to the increasingly expensive battle among Amazon, HBO, Hulu, Netflix, and others to create a Game of Thrones–style, must-see global epic. “We think we can own those [other] 23 hours of the day.”

“A PICTURE IS WORTH A THOUSAND WORDS,” SAYS ADAM ZELLER OF BRAVO & OXYGEN MEDIA, “AND A GIF IS WORTH A MILLION.”

The Internet of Things is here.

SqwidNet is the SIGFOX network operator for South Africa. It provides an ecosystem for IoT innovation and for developing and delivering IoT solutions that are enabled through: • the deployment of long-range networks that are purpose-built for IoT • access to low-cost and highly secure connectivity • access to low-cost, low-power devices and modules.

SIGFOX is a global IoT network deployed in 36 countries across the Americas, Europe, Asia, and Australia.

The SqwidNet network roll-out started in January 2017 and now covers close to 65% of South Africa’s population. National coverage will extend to 85% of the population by the end of this year.

For more information or to sign up as a SqwidNet partner, visit www.sqwidnet.com.

FIGHTING FOR THE FREEDOM TO TELL OUR OWN STORIES M&N Brands Group CEO Zibusiso Mkhwanazi discusses his new holding company, transformation in the marketing and communications industry, as well as how starting small became the foundation of a $14 million growing empire.

Writer: Evans Manyonga

22 FASTCOMPANY.CO.Z A FEBRUARY 2018

FEBRUARY 2018 FASTCOMPANY.CO.Z A 23

ENTREPRENEURSHIP IS NOT A LUCK Y DR AW, A LOTTERY TICKET, A SPIN OF THE WHEEL. ENTREPRENEURSHIP IS A ROLLER-COASTER OF LONG HOURS, SACRIFICES, LE ARNING, HUSTLING, BR AVERY, RISK-TAKING, FAILING, SUCCEEDING AND FAILING AND SUCCEEDING AG AIN, AND NOT BEING AFR AID OF THE FAILING NOR COMPL ACENT WITH SUCCEEDING. 24 FASTCOMPANY.CO.Z A FEBRUARY 2018

“ A turnover of $14 million in majorityowned subsidiaries & more than $21 million in associated agencies.”

From selling sweets at school and on the streets of Joburg CBD, to creating an awardwinning, ground-breaking advertising agency, M&N Brands 34-year-old Group CEO Zibusiso Mkhwanazi tells of a life spent searching for a reason to live differently and creating an Africa-wide advertising, media and publishing conglomerate that promotes African excellence.

Mkhwanazi’s story is a quintessential African tale – a search for new challenges and never settling for the ordinary. It is a story of a man who never set an end point to his journey in business and in life, but who never forgot to experience life and the lives of those around him.

It began, as most things do, at school.

Mkhwanazi found his groove at the Bramley Primary School, but the groove was outside of the classroom.

“I come from a family of entrepreneurs and hustlers,” said Mkhwanazi. “I started my first sweet business at Bramley Primary School. It got so successful that the school banned my friends and I from selling sweets. So, I started selling

The polished Johannesburg home of Avatar Agency owned by Mkhwanazi and Ngubane.

ice creams at the corner of President and Small Streets in the Joburg CBD to make extra money.”

However, school can be a sticking point, when the pressures of teenage years can crush dreams. Mkhwanazi struggled in his early years at Bedfordview High School, but at the age of 15 found the internet and the new worlds it opened up for him.

“I was fascinated by the world of technology and the impact it had on our lives. I went to the library almost every day to equip myself with knowledge so I could know more about this world.”

In high school, he walked into the kitchen at home one night. His mother told him she did not have enough money to put him through university. He took the leap into the unknown.

“I had a choice to be helpless or do something to help myself, I chose helping myself. That one conversation made a business that I intended to start one day,

FEBRUARY 2018 FASTCOMPANY.CO.Z A 25

become a reality overnight and I have never looked back since.

“I started my first business, Csonke, a web design company, with just R2 000 given to me by my mother at the age of 17 (in 2000). That influenced me to study a National Diploma in Information Technology and a Diploma in Corporate Law at the University of Johannesburg (UJ). I guess entrepreneurialism was always in my blood and that is what drove my passion from secondary to tertiary level onwards. I finally completed leadership programs at Harvard and Yale in the US.” He underwent a metamorphosis from the cocoon of school education to revelling in the freedom that higher education offers.

“What amazed me was how different things are when you are doing what you love. I went from an average 40% mark in matric to an average 85% mark in my first year at UJ. I realised my performance at school was not a reflection of my true potential. I decided that I would not waste a second in pursuing my dreams and ran my business successfully on the side while studying.”

Mkhwanazi describes himself as an introvert who found his place in the world through the wonders of the digital age. He drew inspiration from his uncle, former Transnet Chairperson Mafika Mkhwanazi, whose Bryanston house he would often visit during the school holidays. He noticed his uncle was constantly on his laptop.

“I wanted to be part of that world.

I assumed that you had to be in technology to stay in Bryanston. One day he threw down the gauntlet to me without meaning to. He was talking to his wife about an acquaintance’s son who had made a million at 21-years-old. I thought to myself, ‘I can do that, too’.

“From the world of coding and creating, I transitioned to the world of stock markets and investments. I bought the newspaper every day and only read the business section to see how news and announcements correlated to share movements. I created my first share portfolio using a spreadsheet and tracking stocks as if I had invested in those companies.

“I grew to love how business functions and grows, which led me to found

26 FASTCOMPANY.CO.Z A FEBRUARY 2018

Csonke. The first thing I did was invest the R2 000 my mom gave me into the stock market and made a five-fold return. That enabled me to buy my first suit and company laptop.

“Csonke then merged with one of our biggest competitors at the time Krazyboyz and I created an environment that drove 40% year-on-year growth there, and later 100% year-on-year growth at Avatar for five consecutive years.”

He fought for others, and in that fight helped himself. At high school, he found the old computers there were inadequate. He convinced Ernst & Young to donate new ones. The school board and principal were aghast at the chutzpa, and delighted with the opportunities the new equipment afforded them, allowing them to offer new subjects to the rest of the learners. Making an impact beyond himself was an addiction Mkhwanazi has never lost.

He learnt that entrepreneurship takes work, lots of work. There were long, hard, painful hours, catching taxis to meetings and times when rainy days caused havoc with scheduling.

Now he is the majority holder in M&N Brands Group with partner Veli Ngubane, a group of companies turning over $14 million in majority-owned subsidiaries and more than $21m in associated agencies.

“We measure our performance in international currency because we never want to forget what we set out to achieve; to be world class. We have to bring world-class creativity and innovation to the table. Accountability. Results.

“Veli and I had a smile at a recent re-pitch. Three years ago, it was he and I alone (strategy, research, and design, creative); this time around, we had some of the best brains in the business putting together something really special and ground-breaking for us.

“Now the hustle is different: it’s about attracting and retaining talent that will help us grow; it’s about maintaining cash flow as clients push for lengthier and lengthier payment terms; it’s about creating multiple solid homes for new business and ensuring intercompany collaboration as we grow the M&N Brands network.

“M&N Brands is becoming a diversified advertising, publishing and media holding company. Our vision is to be respected internationally, then we will be preferred in the local markets that we operate in on the continent. We only invest in leading companies in particular segments because the chain is only as strong as what binds it. When a client deals with M&N it means that the best diversified minds on the continent will be working towards a shared vision in their work.”

M&N has a three-phased, four-year growth strategy. Phase one is to build a strong network in South Africa of a kaleidoscope of agencies, with the best talent collaborating together and producing world class work in the advertising network.

Their business model is to participate in ownership in the marketing and communication value chain, so that is why they are talking about acquisition in industries not only in advertising but in others like broadcasting, publishing and more.

Phase 2 is an Africa expansion, growing with South African corporates as well as global businesses that have their Africa base in South Africa into the rest of the continent. They will start making acquisitions in key markets where their clients are, to build a South African owned advertising network for Africans by Africans.

“I want as many people as possible to participate in the story and vision of M&N and hence the final phase of M&N is a public listing.”

“ Our company has been formed to enable Africans to start telling their own stories instead of their stories being told for them by American and European agencies, as is the case currently.”

“I have learnt the art of patience, especially around transformation.

It’s about bringing new and fresh voices to the table.”

But none of this happens without a base. In January, Mkhwanazi tweeted, “My challenge in 2018 is not new business. It’s great homes to house new business.” He wants to add value to the 15 businesses they have an interest in. They want Avatar to be known for their work in 2018, not just their success.

“The difference is that M&N is a network of entrepreneurs collaborating together to produce great work and shared growth for all my fellow entrepreneurs and people in the network.

“I am not interested in control, or imposing ridiculous final ratios that destroy culture, that is not what we are about. We are about sharing knowledge, mutual respect, collaboration and resource sharing throughout the different companies in the network.”

Mkhwanazi has a passion for transformation, both of the person

and South African business. He believes the world of advertising and business needed a counter balance and last year opened a R4m campus in the township of Tsakane dedicated to holistically developing and empowering people in body, mind and spirit. The next phase of the 18 000sqm campus is to build more auditoriums for a marketing school, an EDC centre focused on shaping leaders from an early stage, and a community gym.

“I have learnt the art of patience, especially around transformation. It’s about bringing new and fresh voices to the table. In its 27th year of existence, the Financial Mail AdFocus Awards finally added a transformation award, sponsored

by M&N Brands. The new BBBEE Mac Charter is a significant intervention – requiring agencies to increase black ownership to a minimum of 45% from the current 25%.

“However, that should not be the reason for transformation. It should simply be because you recognise the need for diversity, to operate and impact meaningfully. There are too many hospital passes being made with dying agencies and deals that do not truly bring new voices to the table.

“If clients and agency owners only realised that transformation is about diversity and embracing new and different perspectives, then there would be a better embracing of a new industry.

“Our company has been formed to enable Africans to start telling their own stories instead of their stories being told for them by American and European agencies as is the case currently.

M&N Brands was created to bring the marketing industry back to South Africa and has already invested in 15 marketing businesses, and now employs over 400 people in the various wholly owned and associated agencies.”

The story of Mkhwanazi and M&N Brands is one of discovery. It has much distance left to run. He is still selling sweets at heart, still finding new adventures and still remembering to reach out a helping hand to those who need one.

His is an African tale of a young man who looks at the horizon and wonders what is waiting for him when he gets there.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 27

10 Side Hustles That Grew Into the Real Deal

By David Lidsky Illustration by Peter Oumanski

1.

Tupperware 1947

Brownie Wise, a secretary at an aviation company, sold brooms via home parties for extra cash; soon she began hawking Tupperware, and others caught on to her “party plan” as a sales technique.

6. eBay 1995

The impact: Wise is an early progenitor of today’s gig economy. Party businesses, like jewelry-focused Stella & Dot, continue to thrive.

2.

Fairchild Semiconductor 1957

3.

Post-it Notes 1974

The chipmaking startup that put silicon in Silicon Valley also pioneered the practice of allowing its executives to invest, advise, and launch startups on the side that might benefit Fairchild.

7.

Khan Academy 2003

The impact: The Valley still thrives on these symbiotic networks, and more than 90 public firms, worth more than $2 trillion, have ties to Fairchild.

Art Fry, a product developer at 3M, wanted a better bookmark for his church hymnal. Using 3M’s sanctioned “15% time” to pursue wild ideas, he experimented with weak glue on paper.

8.

Twitter 2006

The impact: 3M sells 50 billion of the iconic stickies annually, and companies like HP and Google encourage 3M-style free time for employees.

4.

Apple 1976

Steve Wozniak, an HP engineer, and Steve Jobs, an Atari employee, built a personal computer in Wozniak’s kitchen. HP wasn’t interested in the PC, and Atari CEO Nolan Bushnell declined to invest.

The impact: By leaving to see the project through, the two Steves changed the world, inspiring two generations of garage startups.

5.

Super Soaker 1982

While working for NASA and the Air Force, nuclear engineer Lonnie Johnson invented an environmentally friendly heat pump that he quickly realised was also a really cool water pistol.

The impact: The Super Soaker sold 200 million units in its first decade, and Johnson continues to work on thermoelectric energy inventions.

28 FASTCOMPANY.CO.Z A FEBRUARY 2018

Pierre Omidyar, an engineer at proto-smartphone maker General Magic, set up a site called AuctionWeb so he could learn about online marketplaces.

The impact: As early web users flocked to buy and sell collectibles, Omidyar quit his job to professionalise what became eBay, which to this day enables people to have a side gig peddling wares.

Hedge-fund analyst Sal Khan tutored his cousin in math via Yahoo until family demand for his teaching led him to move over to YouTube in 2006.

The impact: Khan left his job in 2009 to build his education nonprofit. His videos have been viewed 1.25 billion times, making him an inspiration to anyone using social media to do what they love.

Jack Dorsey and Noah Glass made a simple SMSmessaging tool called Twttr while working for a podcasting startup called Odeo. When Odeo stalled, the company bet on Dorsey’s project.

The impact: Every “pivot” aspires to be this good. Dorsey is CEO of Twitter ($13 billion market cap) and Square ($11.4B): Neither is a side gig.

9.

Facebook “Like” button 2007

10.

Casamigos Tequila 2017

A team of Facebook developers and designers built a working prototype of what they called the “awesome button” during a July 2007 hackathon.

The impact: CEO Mark Zuckerberg didn’t approve “Like” until February 2009, but things worked out okay. M eanwhile, scores of companies today employ Facebook-style product sprints.

In the 1950s, Bing Crosby imported 100% blue agave tequila into the US. In a similar “spirit,” George Clooney and pals launched a tequila brand in 2013 and sold it in June for up to $1 billion.

The impact: As actors’ salaries come down and movie attendance wanes, stars (e.g., Gwyneth and Reese) use startups to control their destiny.

LEADING EDGE W I E D E N + K E N N E DY

By Jeff Beer Photograph

by Chloe Aftel

doesn’t hit you on the head with product features,” says Ashra.

“It just takes you through.”

IMMERSIVE EMPLOYEE TRAINING FOR KFC KFC had a problem: 70 years after Colonel Sanders developed his fried-chicken recipe, new employees of the fast-food chain had no sense of the company’s history.

The Lodge responded with a game-style VR experience that invites users to virtually prepare the chicken (and slyly introduces them to the company’s founder, who appears throughout as a ghost). It is now a standard part of job training.

Ad Agency Wieden+Kennedy Turns Emerging Tech Into a Marketing Tool In September, Nike unveiled a new retail experience that reduces the time it takes to customise shoe graphics from eight weeks to less than two hours—short enough that it can be done on demand and in-store. The project, which combines video-game-style motion capture and projection mapping, was developed by the Lodge, a fiveyear-old tech-focused division of the Portland, Oregon–based ad agency Wieden+Kennedy. Led by managing director Paulo Ribeiro and director of creative technology Nilesh Ashra, the Lodge’s 25-person staff harnesses emerging technologies, such as AI and robotics, to help W+K create products and experiences for major brands. “Everything

we’re doing is in a new format in some way,” says Ribeiro. Here are four recent projects that signal the future of brand marketing.

A SOCIAL GAME FOR ANKI’S COZMO ROBOT

NIKE’S LIVE DESIGN EXPERIENCE Nike debuted its Star Trek meets sneakerhead customisation platform at its test lab in New York: Customers slip on a pair of Nike Presto Xs, and a series of images and patterns are projected onto their feet; they can adjust the graphics by simply talking to a screen.

A SCI-FI INTRO TO SAMSUNG GEAR VR As Samsung pitched its Gear VR headset to Galaxy users earlier this year, it wanted a creative way to

Nilesh Ashra, left, brings an engineering background to the Lodge, while colead Paulo Ribeiro is a veteran marketer.

introduce neophytes to the capabilities of the technology.

The Lodge came up with an interactive experience set in an Avatar-like world that acquaints users with a range of VR features— including sight-based navigation and touch activation—by guiding them through a fantasy story. “It

To raise awareness surrounding Anki’s palm-size smart robot, Cozmo, ahead of its global launch in No­­vember, the Lodge developed a Redditbased interactive game. It asked the Reddit community to help actual Cozmo robots solve a series of increasingly complicated puzzles, such as navigating a room filled with puppies. “We essentially built a video game that is controlled through a social platform and played in the real world,” says Ribeiro.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 29

TRENDSPOTTING GOFUNDME

B y A i n s l ey H a r r i s Illustration

by Brian Stauffer

How GoFundMe Is Redefining the Business of Disaster Relief

Hewitt Bauguss Sr., 95, worked for most of his life as a ranch foreman in a tiny desert town in West Texas, population 837. His children settled 500 miles east, in greater Houston, and Bauguss, a World War II veteran, decided to join them in 2001. He moved into a trailer home in the suburb of Brazoria and established a routine: grocery shopping with his children and grandchildren; long talks with men of his generation at a local diner. Bauguss was living in the trailer when Hurricane Harvey began to pummel the Gulf Coast in August. As the floodwaters rose, he evacuated, not long before neighbours spotted alligators

30 FASTCOMPANY.CO.Z A FEBRUARY 2018

swimming outside his door.

Kourtney Rodefeld, Bauguss’s granddaughter, visited the trailer two weeks later. “At first you drive up and it looks okay,” she recalls. “But when you open the door it just hits you: Mold everywhere, and the carpet still wet weeks after. The smell would really knock you over.” Knowing her grandfather’s savings were limited, Rodefeld jumped into action. She wrote to trailer home manufacturers, asking for help.

No one responded.

So she turned to the crowdfunding site GoFundMe. Naming the campaign “Housing for Hewitt Bauguss, WW2 Vet,” Rodefeld posted an image of her grandfather’s trailer, marooned in Harvey’s turbid waters, along with a portrait of him. Donations from across the country surpassed her $25 000 (R298 000) goal in a matter of days. A month after the flood, Bauguss was able to use the funds—minus the 5% fee that GoFundMe levies, along with 2.9% for processing—to put a down payment on a new trailer home.

“The GoFundMe people, their fees may be a little bit more, but they’re always up and running,” Rodefeld says. “They’re trustworthy.”

Victims of events like Hurricane Harvey have traditionally relied on organisations such as the Red Cross, working in tandem with the government, to deliver aid in the form of food, water, and emergency shelter in the wake of disasters.

And when it comes time to rebuild their lives, they have looked to insurance, FEMA, and other programs for assistance. The relief, in other words, is standardised, and often comes attached to a mountain of paperwork.

Today, disaster victims have an additional, more personalised option available to them: crowdfunding. In the past few months, the sevenyear-old GoFundMe, which hosts campaigns for everything from college tuition to veterinary bills, has emerged as something of a leading disaster-relief

As Hurricane Harvey’s floodwaters upended RVs and inundated houses throughout Houston, many residents used crowdfunding platforms to tell their stories.

organisation—minus the bureaucracy. In the two months following Hurricane Harvey, GoFundMe and its sister site, CrowdRise, managed to funnel $65 million to victims and charities. (The Red Cross, by way of comparison, authorised $190 million in direct financial assistance over roughly the same time frame.) Millions more have been raised through hundreds of GoFundMe campaigns for people affected by Hurricane Maria, and the site is home to dozens of campaigns focused on rebuilding efforts in the Caribbean and Florida after Hurricane Irma tore through in early September.

GoFundMe donations can be vital in getting families back on their feet, with no strings attached. They’re also lucrative for GoFundMe: The company took in an estimated $3.5 million in fees from Harvey campaigns alone. And as GoFundMe reaches a point of ubiquity—and inspires competition—it is starting to change how society responds in times of crisis. But what does it mean to entrust care for the needy to platforms that reward the most compelling, shareable content?

GoFundMe CEO Rob Solomon has a response for anyone squeamish about his

company’s for-profit model: The site does more than just process donations.

“GoFundMe at its essence is a storytelling platform,” he says. “You don’t want to see the monolithic nonprofit” during crises; “you want to see the stories it tells with regard to how it’s helping people.”

Even more directly, GoFundMe’s 40 million donors want to see families telling their own stories, as Rodefeld opted to do—with the assistance and expertise of the company. After an organiser creates a campaign, GoFundMe provides advice on how to maximise contributions through, for example, sharing pictures and progress updates. The company also manages a nimble customer-service operation and guarantees that all funds reach their intended cause and recipient, refunding donations up to $1 000 (R11 900) in cases of fraud or misrepresentation.

All that service justifies GoFundMe’s arguably steep fees, Solomon says. “We’re focused on growing the platform in such a way that it helps campaign organisers raise the most money possible. That’s what they want: the highest yield. In order to do that you have to have a Silicon Valley mind-set: the best people, the best technology, the best process.” To build “category-defining companies in this day and age”—as Silicon Valley investors expect and GoFundMe intends to do—“you need the best,” he says. This year,

“ W ITH EACH NATURAL DISASTER OR YAWNING GAP IN THE SOCIAL SAFETY NET, GOFUNDME’S REVENUE CLIMBS HIGHER. “

FEBRUARY 2018 FASTCOMPANY.CO.Z A 31

TRENDSPOTTING I GOFUNDME

the company expects to easily top the roughly $100 million in revenue it generated in 2016. With each natural disaster or yawning gap in the social safety net, its revenue climbs higher—prompting competitors to try replicating that success, or undermine it.

During Harvey, rival crowdfunding site YouCaring became a Houston favourite, thanks to Texans defensive end J.J. Watt, who used the platform to raise more than $37 million for flood relief in just two weeks. “We want to grow and to become the largest, most loved, and most trusted crowdfunding site in the world,” says YouCaring CEO Don Saper. When YouCaring launched in 2011, its founders were motivated by the belief that crowdfunding sites taking 5% or more “out of the pockets of the people who are in dire need” were “just wrong.” YouCaring earns revenue through an optional “tip jar” available at checkout—though if you forget to opt out, it defaults to a 15% tip.

If YouCaring is nipping at GoFundMe’s heels, Facebook is the giant casting a shadow. The social network introduced personal fundraising tools in March, a complement to the nonprofit fundraising features it rolled out in 2015. After a disaster like Harvey, Facebook allows users to easily donate to a selection of nonprofits by clicking a button at the top of their News Feeds. (It charges nonprofits a fee of between 5% and 5.75%.) CEO Mark Zuckerberg underscored the company’s interest in digital philanthropy with a recent trip to the Disaster Research Centre at the University of Delaware. “Social capital is really important in disaster response and recovery,” says Tricia Wachtendorf, director of the centre, who was among the experts presenting to Zuckerberg. “Connections ended up saving lives.”

As GoFundMe and others promote the idea of direct aid, traditional nonprofits are in an awkward position.

When it comes to immediate disaster relief, they argue that they are often better positioned to use dollars effectively than individuals might be. For example, nonprofits can use pallet systems to organise food supplies, significantly lowering distribution costs. They are also quick to note that donations made via their own websites involve no added fees. (Though an organisation such as the Red Cross does allocate money to administration and fundraising expenses.) But nonprofits aren’t complaining when funds arrive via GoFundMe, Facebook, or other means, after good Samaritans set up campaigns on their behalf. “While I wish you might be using a different [site], on the flip side, it’s money that we would not otherwise have,” says Heather Icenogle, director of annual giving and events for the Houston Food Bank. Since Hurricane Harvey, her organisation has received $6.5 million via its own website, $1.6 million via Facebook, and $200 000 via GoFundMe. The donations made it possible for the food bank to distribute more than 12 million pounds of food in the three weeks following the storm.

Private organisations have embraced GoFundMe as well. Diane Probst, president and CEO of Rockport-Fulton Chamber of Commerce, launched a campaign that is nearing its $500 000 goal. “The only drawback is the fees. But somebody has got to do the admin,” she says. In Rockport, located 322 kilometres southwest of Houston, she plans to use the GoFundMe campaign to rebuild homes, with the blessing of Rockport’s elected officials. “If you don’t have the housing, you don’t have the workforce for the community.”

Most GoFundMe campaigns go toward specific needs. But in Rockport, Probst is thinking in broader terms—addressing infrastructure, and even hiring caseworkers to review aid applications. In another era the city government might have borrowed from a community bank to rebuild local homes, and paid interest fees on the debt.

Today, there is a privately run chamber of commerce and a page on GoFundMe. “It just really pulls the heartstrings of people,” Probst says. “Our world is not so bad after all.”

“ A S GOFUNDME REACHES A POINT OF UBIQUITY—AND INSPIRES COMPETITION—IT IS STARTING TO CHANGE HOW SOCIETY RESPONDS IN TIMES OF CRISIS.”

32 FASTCOMPANY.CO.Z A FEBRUARY 2018

A Rising Tide After Hurricane Maria pummeled Puerto Rico and other parts of the Caribbean, people turned to GoFundMe. Here’s how residents and concerned onlookers are using the platform to speed up relief.

1.

Somos Una Voz/We Are One Voice

2.

Hurricane Maria Dominica Ham Radio

3.

Relief for Cayo Santiago Employees

4.

Help Norysell Rebuild Her Farm

Thanks to a relief concert broadcast on NBC, Telemundo, and Univision, celebrity power trio Marc Anthony, Jennifer Lopez, and Alex Rodriguez raised $700 000 for victims of recent natural disasters, including Maria. The site channeled the dollars through its Direct Impact Fund, an affiliate that enables tax-deductible donations.

When Hurricane Maria destroyed communications infrastructure on the island of Dominica, the oldfashioned ham radio became a vital source of news for families otherwise cut off. This campaign, launched by a Vermont couple, raised more than $30 000 to create a network of radios, transmitters, and power sources on the island.

This campaign is on its way to gen­ erating $65 000 on behalf of em­ ployees of the Caribbean Pri­m ate Research Center, who study rhesus macaque mon­keys on the Puerto Rican island of Cayo Santia­g o.

Alumni of the centre living on the mainland used the funds to send bat­teries, toiletries, food, clothing, and water, as well as generators and construction materials.

Norysell Massanet, a farmer oper­ ating an agroforestry restoration project on a plot in southwest Puerto Rico, has received more than $10 000 after a friend from New York started a campaign to help her rebuild. Her goats, donkeys, and dogs had survived the storm, but her home was destroyed.

14 - 15 MARCH 2018 | EAST WING CTICC Gearing up for eCommerce acceleration in Africa

REGISTER TODAY AND

DHL eCommerce MoneyAfrica Conference and Exhibition has emerged as a leading platform for stakeholders in the Retail arena to discuss and investigate new trends, technology developments, and challenges in the market hindering more robust eCommerce growth.

GAIN FREE ACCESS

Varun Cheemra

Chris Folayan

Andrew Mori

Head of E-Commerce Sales Sub-Saharan Africa, DHL

CEO, MallforAfrica

Director: Technology Konga

Dynamic Business & Education Platforms Masterclasses & TechDemo’s

eCommerce Africa Accelerator

Educational, business and networking opportunities.

Designed for SME’s looking to advance their eCommerce capabilities.

Exhibition Floor Meet with a wide range of services providers. The exhibition floor offers more than 15 hours of dedicated networking time.

GAIN FREE ACCESS TO AFRICA’S LARGEST ECOMMERCE EXPO FLOOR Limited Availability

Register online using this coupon code: ECMAFREE www.ecommerce-africa.com/register

www.ecommerce-africa.com | marcia@kineticevents.net | @eCommerceConfex | #ECMA18 | Contact us: 021 180 4700

MASTER CLASS MICHELE CLAPTON Costume Designer

By Claire Dodson Photograph

by Aaron Feaver

How to Turn Small Details Into Massive Pop-Culture Moments Whether she’s

designing a runwayworthy fur coat for the Mother of Dragons to wear on HBO’s Game of Thrones or a gown for Queen Elizabeth II’s coronation on Netflix’s biopic series The Crown, costume designer Michele Clapton knows that clothes often make the story. Sometimes they can even become characters in their own right. As she prepares for a 2018 that includes filming the final season of Game of Thrones and the release of two films that she worked on (the sequel to the hit musical Mamma Mia! and The Death and Life of

Clapton is a creative behind some of the most iconic TV fashion moments of 2017.

34 FASTCOMPANY.CO.Z A FEBRUARY 2018

John F. Donovan), Clapton explains how she uses clothing to enhance a story.

Macall B. Polay/HBO (Game of Thrones); Stuart Hendry/Netflix (The Crown)

GO MINIMAL FOR MAXIMUM EFFECT The first season of The Crown features an array of ornate, midcentury gowns and crisp military suits, which are on full display during such pivotal scenes as Queen Elizabeth II’s wedding to Prince Philip. But to make certain quieter, yet equally important, moments resonate, Clapton used less extravagant pieces. In the second episode, just before Elizabeth (Claire Foy) finds out about her father’s death, she appears in her room at a safari lodge in Kenya wearing only Philip’s long, white button-up shirt, which serves to accentuate her vulnerability. “To me, [choosing that look] was just as big a decision as the design of her wedding dress, and took just as long to come to,” Clapton says. “[Elizabeth] is at her most open and relaxed and intimate before she finds out this thing that is going to be so monumental in changing her life. I love that contrast.”

GAIN PERSPECTIVE BY TA K I N G A B R E A K In 2015, Clapton took a hiatus from Game of Thrones, which

Clapton’s designs illuminate plot arcs of the characters she works on, whether it’s the fictional queen Daenerys Targaryen, left, or the real-life royal Queen Elizabeth II.

she had worked on since it went into production in 2009. She ended up sitting out season 6—a pause that allowed her to work on The Crown and come back to the HBO juggernaut with fresh eyes. “It rekindled my desire to see [Game of Thrones] through,” Clapton says. “The characters are like real people to me, because I’ve been doing this for so long.” When she returned for season 7, which aired this past winter, she was able to create costumes that reflect the characters’ larger journeys.

As Daenerys Targaryen (Emilia Clarke) and Cersei Lannister (Lena Headey) battle for the Iron Throne, for example, Clapton has employed increasingly tight tailoring and references to body armor to signal their progressively guarded emotional states.

E X PA N D Y O U R B O U N D A R I E S After working on Game of Thrones and The Crown, Clapton signed on for the Abbainfused sequel Mamma Mia! Here We Go Again, starring Meryl Streep and Pierce Brosnan, precisely because it allowed her to step away from heady, British-accented dramas and tackle a comedy instead. Filming in Croatia, Clapton’s biggest challenge was making sure the musical’s 1970s-era costumes (which include bell-bottoms and colorful prints) didn’t become too over-the-top, especially during big song-anddance numbers involving lots of extras.

“Costumes [should] be witty, but not funny,” Clapton says. “Even though [the movie] is a bit of light frivolity, I still wanted to figure out why somebody is wearing something, that backstory.” The film, due out in July, was also a welcome chance to diversify. “People pigeonhole you and think, ‘Oh, but you just do medieval stuff,’ ” she says. “Well, no. A designer does anything.

A designer works with the script and the story, whether it’s real or period or musical or whatever.”

HOLD FIRM TO YOUR VISION Clapton will study a script in order to use characters’ attire to telegraph narratives.

This instinct has made her an important voice on set. When the executive producer of The Crown wanted to alter the filming of a scene between Princess Margaret and King George after the costumes had already been painstakingly designed, Clapton pushed back. She argued—successfully—that seeing Elizabeth’s rebellious younger sister in an off-the-shoulder dress as she played piano for her father would make their relationship seem overly intimate unless the camera pulled back to show that the recital was taking place during a dinner party. “[The costume design] is that finely balanced,” Clapton says. “You’re trying to say something, and you have to think so carefully about how something should be. I also want to throw the audience off sometimes. That’s where I have my fun.”

FEBRUARY 2018 FASTCOMPANY.CO.Z A 35

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

THE FUTURE OF RETAIL

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n As n Jeff n Bezos’s n n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n By n Austin n Carr n n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n juggernaut n n n n n n n n n n

continues to n n n andn grow bigger more powerful, n n n n forward-thinking n n n n competitors n finding n n n are creative to n n ways n n succeed—and n what n Amazon n n be can be. n n never n n

IN THE AGE OF AMAZON

n

Ill u s t r a t i o n s bn y Z o h an r L a z an r

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

n

FEBRUARY 2018 FASTCOMPANY.CO.Z A 37

THE MALL O F A M E R I C A’ S TERRAZZO FLOORS,GLAZED WHITE LIKE DOUGHNUT FROSTING, RIBBON OUT IN EVERY DIRECTION,

38 FASTCOMPANY.CO.Z A FEBRUARY 2018

creating a vast mirror maze of consumerism with 520 glassy storefronts. Shoppers, who have escaped an endlessly gray Bloomington, Minnesota, sky on a Monday morning in October, drift through the largest mall in the US like tourists at an Atlantic City buffet. A couple holding hands strolls into a Zales while buttery perfumes emanate from an Auntie Anne’s next door. Kids and some willing parents fling around on the SpongeBob SquarePants Rock Bottom Plunge roller coaster, one of 27 rides at the Nickelodeonbranded amusement park on-site. Distant echoes of saxophone Muzak clash with both elevator whirs and bubbly pop songs.

Somewhere in this otherworldly commercial expanse are five Lids stores and four Sunglass Huts.

When the mall opened, in 1992, it represented the pinnacle of retail convenience and a mecca for young people to gather and spend. But the $650 million (R7.7bn) megamall was always “vaguely unreal . . . exuding the ambience of a monstrous hallucination,” as novelist David Guterson described it in a 1993 Harper’s article, calling it “monolithic and imposing.” Two years later, Jeff Bezos launched his online book marketplace, which quickly grew into a new type of Everything Store, one that fundamentally redefined the shopping experience and led some to argue that commercial centres like the Mall of America would become gaudy relics of an antiquated era.

Now, Wall Street analysts say, the retail apocalypse is upon us.

Amazon dominates e-commerce and has gobbled up 5% of total US retail sales. Some expect that the company will own half the online market within the next five years, a period during which, Credit Suisse predicts, a quarter of all malls will close. By the end of this year, more than 8 600 stores will have shuttered in 2017, the worst year on record.

But here’s the thing about the Mall of America: It’s fighting back. “I hear all this doom and gloom in the industry,” says the mall’s SVP of business development, Jill Renslow, with an upbeat, Midwestern delivery. “I’m like, ‘Folks! Keep your chin up! There’s so much opportunity!’ ” The mall completed a $325 million expansion in 2015, says Renslow, who started working there as an intern in the mid-1990s and has seen it endure recessions and upheaval before.

A new 342-room JW Marriott has opened upstairs, and retailers like Zara and Anthropologie are being lured to the space. The mall is experimenting with new leasing models to attract pop-ups and younger players like Untuckit and Toms Shoes. Renslow, who is eager for people coming to Minneapolis for the 2018 Super Bowl this February to visit the mall and be surprised, doesn’t view Amazon as a competitor but as a partner; she recently worked with Amazon to install a set of pickup lockers at the mall. She believes retailers in general can “bring online shoppers to brick-and-mortar.” I ask her directly: Is physical retail dying? “Not at all!” she says.

Renslow isn’t feigning enthusiasm. Despite Wall Street’s pessimism, industry leaders sound downright bullish on the future of traditional retail. Why else, they argue, would Amazon spend $13.4 billion to buy Whole Foods? Sure, the competition is fiercer than ever, and icons such as Sears and JCPenney are dying. But they believe that the narrative has been oversimplified. “Amazon alone isn’t holding the knife,” says NYU Stern professor of marketing Scott Galloway, who studies the retail industry. Cultural tastes have changed. Malls grew too quickly, at twice the rate of the population, from 1970 to 2015. Many retailers succumbed to quarterly earnings pressures, invested in share buybacks rather than their stores,

FEBRUARY 2018 FASTCOMPANY.CO.Z A 39 Sources: PwC, Quartz, and Financial Times (retail square footage); Credit Suisse (2008 store closings); Fung Global Retail & Technology (2016 and 2017 store closings; major store closures; affected retail segments; fast fashion); Andy Dunn (digital-native brands); L2 (beauty); eMarketer (Apple sales per square foot); CoStar (average retail sales per square foot); Burlington (Burlington store data); Cowen & Co. (Burlington store growth); TJX (HomeGoods and Marshalls/T.J. Maxx store data)

2015

Projected growth

2015

Projected growth

Projected growth n n n n n n n n n n n n n n n n n n n n n n n n n n

n n n n n n n n n n n n n n n n n n n n n n n n n n

n n n n n n n n n n n n n n n n n n n n n n n n n n

n n n n n n n n n n n n n n n n n n n n n n n n n n

n n n n n n n n n n n n n n n n n n n n n n n n n n

n n n n n n n n n n n n n n n n n n n n n n n n n n

1,000

n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

HomeGoods

Marshalls/T.J. Maxx

n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

Boohoo.com, A sos, and Missguided: 2–4 weeks Zara and H&M: 5 weeks Traditional retailers: 6–9 months

n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

Time to produce merchandise

n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

Apple Stores

n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

65%

As the sector gets better at fulfilling immediate gratification, older players are being left up the track.

Fast fashion

S ephora Ulta Average beaut y brand

30%

53,400 17,800 14,800 Average readers per interactions per social post

Instagram Digital-native brands 4.6 11.1 23.6

There are too many stores

2015

n n n n n n n n

n n n n n n n n

n n n n n n n n

n n n n n n n n

579

n n n n n n n n

STORES

935

2,221

3,000 Burlington

n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

Industry average: $325 Apple Stores: $5,546

2016 sales per square foot

Unique, highly desirable products in a compelling environment will always be popular.

n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

100 110 138 160 171 180 190 250 330 358 700 Stores Closed

Industry titans are shrinking or dying 1,674 6,101 Stores

n n n n n n n n

n n n n n n n n

n n n n n n n n

n n n n n n n n

n n n n n n n n

n n n n n n n n

550

n n n n n n n n

0 1,000 2,000 3,000

Discounters

n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

Footwear 14% Kids 10%

“Off-price” retailers have transformed themselves into “treasure hunts” that make inperson shopping surprising and fun.

n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n n

Teen apparel 17%

Women’s apparel 13%

Consumer electronics 37%

Fragrance 2% Athletic 2% Outdoor 2% Discount department stores 3%

Retail segments affected by 2017 bankruptcies and store closures

Numerous areas are struggling Macy’s Michael Kors JCPenney Crocs Wet S eal Bebe GameStop The Limited Gymboree Sears and Kmart Payless

Major brands have been hit hard.

2016 2017 (as of October 6)

This year will surpass 2008, when the Great Recession led to 6,163 shutterings.

T h ey ’r e c l o s i n g a t a r e c o r d ra t e

United Kingdom Australia United States

America has more square feet of retail per person than any other country.

W H Y A R E R E TA I L E R S W O R R I E D ?

All e-commerce

S ephora Ulta Average beaut y brand

(Revenue minus cost of goods sold, divided by total sales revenue)

Product gross margin

488,700 145,200 74,300 Average readers per email per social post

Email

Internet-born retailers establish a direct relationship with customers and have better economics than traditional e-commerce.

The savviest cosmetics peddlers use digital to drive inspiration.

Beauty

D i g i t a l - n a t i v e b ra n d s

WHO IS BEST POSITIONED TO THRIVE?

Things look bad, especially as Amazon expands so quickly, but bright spots abound.

R E TA I L P O C A LY P S E N O W

became saddled with private-equity debt, or failed to keep pace with digital trends. What we’re seeing now, industry executives say, is a rational, albeit painful, course correction.

One study from retail-research firm IHL Group found that a mere 16 chains, including Radio­Shack and Payless, account for nearly half of all store closings, and that there will be a net increase of more than 4 000 stores in 2017 and 5 500-plus in 2018.

“Retail is under huge pressure, but the death of stores is greatly exaggerated,” says Galloway, who believes that while Amazon will continue to disrupt the market, an increasing number of competitors will discover new ways to respond. “In the age of Amazon, retailers must leverage assets that [Bezos] doesn’t have: When Amazon zigs, retailers must zag.”

Last year, Fast Company embarked on a journey to learn from those retailers that are flourishing in the age of Amazon. After all, more than 90% of retail sales still happen in the real world, and as relentless as Bezos is, it’s not likely he’ll swallow up all of brick-andmortar on his own. The truth is that the bigger Amazon gets, the more opportunity it creates for fresh, local alternatives. The more Amazon pushes robot-powered efficiency, the more space there is for warm and individualised service. The more that people interact with Amazon through its AI-based assistant Alexa, the more they will crave the insight and personal connection of fellow humans.

“The idea that everybody needs to be terrified of Amazon is completely wrong,” says Brian Spaly, who cofounded two e-commerce-centric startups, Bonobos (menswear) and Trunk Club (a wardrobein-a-box service), which sold to Walmart and Nordstrom, respectively, for nine-figure sums. “Everybody needs to figure out what makes them special and use those weapons to compete.”

S U C C E S S F U L R E TA I L E R S W I L L F E AT U R E P R O D U CT S T H AT CUSTOMERS CAN’T GET ELSEWHERE A 15-minute drive north from the Mall of America are the downtown Minneapolis

headquarters of Target. The company’s $7 billion bet on its future is coming to life in a series of spacious rooms littered across

40 FASTCOMPANY.CO.Z A FEBRUARY 2018

several floors and filled with mannequins, racks of colourful apparel, and fashion magazines. It’s here that Target is designing its own goods, refocusing on the aesthetic sensibility that fueled its success in the early 2000s. “While others are shrinking their footprints, reducing head count, or trying to save their way to the next quarter, we think there’s opportunity for us to take more market share,” says CEO Brian Cornell, who launched the initiative last February.

On the fourth floor, at the studio for Cat & Jack, Target’s new children’s clothing line—which blew up in its first 12 months to become a $2.1 billion brand—mood boards display photos of smiling tots at a July Fourth block party and a family movie night.

Julie Guggemos, Target’s SVP of product development, describes the spirit behind the design as “positivity, happiness, saving the world,” citing the adventurous tweens in Netflix’s Stranger Things as an inspiration for the team. “We listen to Mom and Dad, but we have these kids in mind when we’re designing,” says Guggemos, a 27-year Target veteran.

Guggemos and her team of 400-plus designers will be rolling out more than a dozen high-quality, affordable, Targetexclusive brands by the end of 2018. They have already introduced a boutiquey children’s decor line called Pillowfort, a modern furniture collection called Project 62, an athleisure apparel line for the postyoga brunch crowd called JoyLab, and a dapper menswear brand called Goodfellow & Co, which even Esquire described as “elevated.” Guggemos has just come from a product review for a new line, slated to launch next year. “We’re designing everything from the bottom up, 100% original,” she says.

When consumers can get seemingly anything and everything online, what can Target offer that Amazon can’t?

That question was top of mind for chief merchandising officer Mark Tritton when he joined the company from Nord­strom in 2016. Target had fallen into a trap of licensing outside brands like Cherokee, which makes children’s apparel; even its in-house kids’ label, Circo, felt dated. “I thought, Wow, this stuff isn’t right,” recalls Tritton. “It feels tired and disconnected.”

In other words, Target had strayed from what made it “Tar-zhay.” Two decades ago, the company had distinguished itself from other big-box retailers by teaming

TH E F IVE STA G E S OF AMAZON GRIEF What CEOs said to investors when asked about Amazon this summer DENIAL “Well, I have a lot of interesting thoughts on [the Amazon–Whole Foods deal], but I will provide none of them on the record.”

David Simon CEO, mall developer Simon Propert y Group

ANGER “Certain categories are much more a natural fit for [Amazon] . . . paper towels, toilet paper, AA batteries, and groceries. . . . As soon as you get into categories that are more emotive, more visual, people want unique items, the delivery requires a unique type of handling system . . . a whole series of things that frankly we’ve oriented around and vertically integrated around.”

Niraj Shah CEO, home goods e-commerce company Way fair

BARGAINING “Because more than 50% of online product searches happen on Amazon, and of those, 37% buy that product in a store, we believe Amazon is not a death knell for brickand-mortars, but a great advertising platform that puts us right in the path of countless new customers.”

Robert Moran Interim CEO, vitamin retailer GNC

DEPRESSION “If you follow the popular media, you may think that the disconnect [between our stock price and our income growth] is because the future will be one where nothing is bought in stores and where Amazon will be the only surviving retailer. We believe that scenario is not accurate.”

Steven Tanger CEO, Tanger Factory Outlet Centers

AC C E PTA N C E “Our new business with Amazon is off to a strong start. The growth is being driven by our new Simple Joys brand designed exclusively for Amazon’s Prime customers.”

Michael Casey CEO, children’s apparel retailer Carter’s

Art credit teekay

“ W E WA N T T O REIN V EN T, BU T W E S URE DON’ T WA N T T O REIN V EN T T HE W HEEL ,” S AY S WA RBY PA RK ER CO-CEO NEIL BL UMEN T H A L .

“IGNORE BE S T P R A C T ICE S, GE T CRU SHED.”

up with celebrated architect and designer Michael Graves to craft a collection of massmarket housewares, partnering with highend fashion designers like Isaac Mizrahi for custom fashion lines, and nurturing emerging brands such as Method through forward-thinking curation. “There would be no retail if it weren’t for merchandising, so why isn’t anyone talking about it anymore?” wonders Rachel Shechtman, founder of Story, the novel Manhattan concept store, which reinvents itself regularly (and collaborated with Target in 2014). “Merch assortments designed by spreadsheets and algorithms” is what’s killing department stores, she says.

When I meet Target COO John Mulligan at Target’s flagship, which sits just a block away from the Cat & Jack studio, he’s eager to compare the store’s $10 million renovation with printed-out photos of the old layout, which hadn’t changed much since the flagship was built in 2001. “It was gondola hell, right?” Mulligan says, referring to the basic shelving units The faster Amazon you see in stores. “Just delivers, the more rows and rows of cash it burns.

Shipping losses stuff. No sight lines.” soared to $7.2 billion Mulligan shakes his in 2016 from head as he points to $5 billion in 2015. a depressing image of the in-store Pizza Hut that used to greet customers.

The layout has been reorganised around Target’s new brands, and the presentation is crisp and contemporary. (Inexplicably, the company didn’t have a visual merchandising department until just two years ago; Cornell has since poached talent from J.Crew and the Limited.) As Mulligan ushers me through the store, he beams at the displays, each of which will now be refreshed monthly, which is double the previous rate: There’s an autumnthemed collection from Cat & Jack; sporty JoyLab leggings designed in partnership with Clique, whose Who What Wear line has been a hit at Target since it launched in 2016; and modern dining chairs and walnut tables from Project 62. “Before, it was a dead zone back here,” he says of the home-essentials area.

Other parts of the store feature bright new arrangements of exclusive products from e-commerce upstarts such as Harry’s and Casper, and even the fitting room looks more like what you’d find in a Club Monaco. As for the Hut? It’s been replaced by fresh groceries

FEBRUARY 2018 FASTCOMPANY.CO.Z A 41

LOCAL HEROES and a liquor and craft beer shop. Target will remodel an additional 1 000 stores in a similar fashion by 2020, while also rolling out more localised stores with smaller footprints.

The redesigned “Tar-zhays”—there are around 110 of them so far—have delivered up to a 4% jump in sales at each location, but the more promising return from this investment has come from the house brands themselves. Cat & Jack customers, for example, spend 50% more in surrounding kids’ retail areas, Mulligan says, adding that their total basket size is 23% higher than other customers’. Most significantly, Target’s consumer research has shown that its brands have become a “trip driver”: People come to the store for Cat & Jack as much as they do for essentials like laundry detergent or bread or milk. “Target has always won with a spirit of design that their competitors didn’t have. I don’t see any other move for them: They’re not going to beat Amazon on e-commerce,” says a high-level retail expert who has advised the company on strategy.

Indeed, Target’s digital efforts continue to lag. When Mulligan takes me to the back to show off the redesigned storeroom, I don’t see any floor-roaming robots or automated conveyer belts, despite the fact that Target has stated that it plans to use its more than 1 800 stores as fulfillment centres (80% of the US population lives within 10 miles of a Target). Instead, I find just one store clerk manually taping cardboard boxes for instore pickup. Later, when I arrive to retrieve a $14.99 (R180) Goodfellow Henley shirt I purchased via Target’s app, the cashier asks for my ID because the flagship store’s smartphone scanner is broken. When I test Target’s new curbside-pickup service to buy paper towels, it fails at three consecutive outlets within the Minneapolis area.

Ultimately, I give up.

The company needs to improve e-commerce and store pickup, but its future success does not depend only on these services. “Target is going to have to win on stuff that nobody else has,” the high-level expert says. “And that’s great retail, right?”

S U C C E S S F U L R E TA I L E R S W I L L D E L I V E R A S AT I S F Y I N G EXPERIENCE A time zone away, in the sixth-floor show room of Warby Parker’s SoHo offices

in New York, cofounders Neil Blumenthal

42 FASTCOMPANY.CO.Z A FEBRUARY 2018

and Dave Gilboa are squinting at a backless shelving unit displaying their designer glasses. Customers mill about just steps from the co-CEOs’ desks, a dynamic that helps them relentlessly monitor and surgically adapt Warby Parker’s high-touch experience. Blumenthal is eyeing a wood shelf, which is missing a centimeter-tall lip, so that if a customer slides a pair of $95 Chamberlains too far back, they’ll slip onto the floor. “This does not make me happy,” he grumbles. Addressing these tiny details has proven crucial to the eyewear brand’s success. If they’re not fixed, “we’ll hear about it, like, ‘Fucking shit is falling off [the shelf]!’ ” Blumenthal says, with an effervescent laugh. “I don’t know if it’s right for policing, but broken-window theory definitely applies to retail.”

The 37-year-olds, who on this sunny Friday morning are both wearing slimfitting button-downs, black sneakers, and patterned glasses—imagine the Black Keys as merchant princes—visit a Warby Parker store each day, hunting “for anything that needs to be refreshed, anything that’s out of place,” Gilboa says. This could be off-kilter frames or neglected customers.

As much as the two consider themselves disrupters of competitors like Luxottica (Warby Parker’s $10.5 billion rival, which owns everything from LensCrafters to Ray-Ban), they’re students of retail history and find inspiration in such leaders as hospitality guru Danny Meyer, Apple Store legend Ron Johnson, and Mickey Drexler, the merchandising titan famous for reviving Gap in the 1990s and J.Crew in the 2000s.

Drexler, an early Warby Parker investor and board member, taught them that good experiential design is about solving customer problems. Gilboa describes how Drexler would walk into stores, zoom by Warby’s managers, and head straight to associates to interrogate them for unvarnished feedback.

“He’ll isolate them, ask each of them the same questions, and then triangulate: Is he hearing consistent or conflicting answers? Then he really digs in, surfacing nuggets of wisdom hidden even by stores with great numbers,” Gilboa remembers.

When Warby launched its first store, in SoHo in 2013, the mission was to eliminate everything annoying about buying glasses.

Blumenthal hated the “little shit vanity mirrors” at optometry shops, while Gilboa couldn’t stand the merchandise locked away in glass cases and the awkward interactions

Five independent retailers who get it right, through curation, service, and offering something you’ll never get at Amazon M A R T I N P AT R I C K 3 MINNEAPOLIS

“This is one of the most beautifully curated retail experiences I’ve ever seen, and it’s for men. I love Amazon, but I don’t go back there to discover what they have on the shelves. It’s rare to walk into a store and feel like I have to come back because I need to know what they’re selling.”

West Stringfellow Founder, retail consultancy Potintia; former product guru at Visa, Target, and Amazon

AV E N U E TUCSON, ARIZONA

“Avenue is led by this incredible woman [Alexis Mosij] whose sense of design and taste is just unreal. You look at her store and you just want to live that life.”

Healey Cypher CEO, Oak Labs, a retail technology startup

M A L E N A’ S V I N TA G E B O U T I Q U E W E S T C H E S T E R , P E N N SY LVA N I A

“Malena’s has such a beautiful, unique collection of secondhand goods. You could never commoditise it through Amazon. Those heritage-type retailers will still have a place in the world.”

Joey Zwillinger Cofounder, direct-to-consumer shoe brand Allbirds

M O O R E B R O T H E R S W I N E C O M PA N Y B R O O K LY N

“It’s a wine store, but they have this separate play area for kids, where they can have fun and colour. That probably sounds a bit disturbing, but they’re solving a problem for parents. That’s the future of retail: How can we optimise in an analogue format?”

Rachel Shechtman Founder, Story, a gallery-like store

MERCI PARIS

“They have a library, a coffee shop, and a beautiful unassuming courtyard entrance that’s very French. It opens up into the store, which is always evolving.

They’ve done a cool job of telling a story that’s special every time I walk in.”

Phillip Raub Cofounder, B8ta, a new chain of consumerelectronics showrooms

Art credit teekay

with often-pretentious store associates.

They wanted approachable store greeters, an ask-us-anything reference desk, and a warm aesthetic, which they modeled after Sweden’s Stockholm Public Library, complete with its dark-wood shelving. Anthony Sperduti, cofounder of design studio Partners & Spade, who helped Warby Parker conceive its early stores, says they needed to feel like an authentic extension of the e-commerce brand. The high-quality materials of its eyewear products, he says, are reflected in “the brass details, marble counters—this incredible weight, this classicism.” To transform an intimidating experience into a fun and social activity, Warby Parker added photo booths and full-length mirrors so groups can check themselves out together. “If you’re born online, you better have a really good reason to do brick-and-mortar,” Sperduti says. “You better come out swinging.”

Warby now operates more than 60 stores, and on this particular day, it’s opening three new locations simultaneously—in Milwaukee; Fort Worth, Texas; and Harvard Square. Analysts estimate that the company will generate around $250 million in 2017 revenue. As the operation grows, it only gets harder for Blumenthal and Gilboa to keep this experience fresh. Before committing to risky new territories, the company often tests low-cost pop-up shops, rather than get stuck in the kind of expensive, long-term leases that have suffocated many traditional retailers and led them to try to save costs by building out one-size-fits-all stores.

The Warby Parker team has developed modular components so that each store shares an identity but there’s room for local flourishes. Vernors ginger ale, a Michigan favourite, is on tap at the Detroit store, honouring the 151-year-old soda maker that once operated a pharmacy at the same location. The Miami store, which opened in 2015, features floors painted to look like swimming lanes, so that photos taken from

the ceiling-affixed cameras make customers in sunglasses look like they’re floating in a pool—images that shoppers can then share on social media.

Big retailers and digital-native consumer brands alike cite Warby Parker as an inspiration and seek to mimic, even reverse engineer, what they believe is the core of its hip but inviting store experience. But refashioning stores with a certain wood finish or outfitting employees in a distinctive smock doesn’t make you Warby Parker any more than painting your store white makes you Apple. Piling on frivolous attractions in an attempt at authenticity, as Brooks Brothers did by opening a Stumptown at one of its Manhattan locations, drives the Warby Parker team bonkers. “The way people are defining experience today is way off,” Blumenthal says. “The idea of adding coffee shops to every store is ridiculous,” because it’s driven not by solving a customer problem or introducing a novel experience tied in some way to a brand, but by a hackneyed attempt to boost foot traffic. Equally jarring to them is Amazon’s new Go store in Seattle, which Gilboa recently explored, in which an array of sensors and computer-vision technology enable the ultimate in grab-and-go shopping.

“Play that [concept] forward and you can imagine this dystopian experience where you have no human interaction at all,” he says.

Warby Parker is just as maniacally focused on efficiency as Amazon: Its next big initiative is a $15 million optical lab, in upstate New York, which enables greater quality control and faster product delivery.

But the company knows that its true value lies in its elevated and personal experience, and Blumenthal and Gilboa never want to stray too far from what Drexler taught them.

“We want to reinvent, but we sure as shit don’t want to reinvent the wheel,” Blumenthal says. “Startups sometimes take it too far, like, ‘Oh, we’re an innovator! We’ll just ignore what [traditional] retailers have done!’ Ignore best practices, get crushed.”

“IF YOU'RE BORN ONL INE, YOU BE T T ER H AV E A RE A L LY GOOD RE A S ON T O DO BRICK-A ND-MOR TA R," S P ERDU T I, CO-F OUNDER OF DE S IGN S T UDIO PA R T NER S & S PA DE, S AY S. " YOU BE T T ER COME OU T S W INGING.”

S U C C E S S F U L R E TA I L E R S WILL CHALLENGE THE F U N D A M E N TA L ASSUMPTIONS OF COMMERCE What does the store of tomorrow look like? Amazon Go is certainly one

experiment, and seemingly every big brand, from Mastercard to Sephora, is dreaming up its own vision of the future inside whizbang concept labs. Ask around the retail industry and you’ll hear endless, breathless predictions about the potential of in-store augmented reality, drone delivery, or bitcoin payments.

So far, these technologies have amounted to little more than gimmicky distractions.

“Customers don’t want stupid disco balls with lasers and holograms,” says Healey Cypher, founder of Oak Labs, which, yes, makes an interactive “smart mirror,” but is more focused on customising the dressing-room The best retailers experience. Target, too, are embracing what makes them special seems to have come to counteract to this realisation.

Amazon’s quest Earlier this year, the to dominate company shuttered commerce. its much-ballyhooed “store of the future” project built on glitzy tech. “Ultimately, we didn’t want to build a Jetsons-like store just because we can,” COO John Mulligan says.

Vibhu Norby and Phillip Raub, cofounders of B8ta, a San Francisco–based consumer-electronics retailer that has raised $19.5 million to reimagine brick-and-mortar, are thinking different. Rather than depend on a cut of sales from products, like Best Buy does, their company charges brands for the privilege of being featured in B8ta’s 10 stores. By selling only a limited selection of trendy gadgets, B8ta’s store associates act as ambassadors for the products—the true stars—educating consumers on their features and offering white-glove service.

Norby and Raub believe that all physical retailers—Amazon included—need to rethink the business entirely. Norby, B8ta’s CEO, argues that historic metrics for success are completely irrelevant today. Who cares about sales per square foot when products reach customers via Uber and Prime Now? Why do year-over-year same-store sales

FEBRUARY 2018 FASTCOMPANY.CO.Z A 43

comps matter when 56% of customers test products in-store but buy online?

“Designing stores for throughput is how we ended up with 10-by-10 walls of Tide at Safeway,” Norby says. Perhaps most radical is the new idea that retail can be unbundled from transaction. Bonobos’s “guideshops,” for example, offer fittings and fashion advice, with the assumption that customers will order their apparel online afterward.

Decide to buy in-store? Bonobos will ship it for free. “I’m starting to see it more, where retailers are not expecting you to walk out with a bag of their stuff,” says Partners & Spade’s Sperduti.

Some of these ideas might strike industry veterans as heresy, but B8ta’s cofounders view it merely as a shift in thinking about how physical space can be monetised. On a recent Saturday afternoon at B8ta’s downtown Palo Alto location, store associates demonstrate Boosted electric skateboards out front on the sidewalk.

Inside, the store has a relaxed vibe, with homey carpets and armchairs occupied by gadget-shoppers’ patient loved ones, though it takes obvious inspiration from Apple’s minimalist stores. Customers sipping bubble tea toy with unboxed gadgets set up on long tables—Oculus Rift VR headsets, August door locks, Onyx walkie-talkies— while B8ta staff politely chats them up.

These associates are not pushy at all, because they’re not pressured to sell units.

They’re happy to answer questions and are knowledgeable about everything from the Nebia ionising shower (“It turns your droplets into even smaller droplets,” an employee explains) to the finer points of four different Bluetooth trackers. B8ta’s market advantage is its well-trained staff.

The cofounders, who met at the smartthermostat company Nest, know firsthand how difficult it is to get customers interested in, let alone grasp, the benefits of new hardware products.

For electronics brands, B8ta stores are an excellent (and relatively inexpensive) marketing portal, and an even better data tool. “The real magic happens behind the scenes,” says Raub, the company’s chief business officer, who previously worked at Gap and Nintendo. Every product featured in the store is wired to track how customers play with it. Store associates, called “B8ta testers,” also gather qualitative feedback on why a shopper did or didn’t buy a product.

“Why did they look at it? What didn’t they

44 FASTCOMPANY.CO.Z A FEBRUARY 2018

like?” says Raub, listing off a couple of common data points, which he compares to how e-commerce players monitor checkout cart abandonment. “Now brands can know that customers may have liked a product, but gave up once, say, they found out it wasn’t compatible with Android.”

In a world where consumer products often end up languishing on shelves at Best Buy or forgotten amid Amazon’s catalog of an estimated 350 million–plus items, this data is more valuable than the sale itself. Traditional retailers now want what B8ta can offer: In late October, the startup announced that 70 Lowe’s locations will add a smart-home-focused B8ta, and Macy’s will soon feature B8ta outposts in its flagship stores.

S U C C E S S F U L R E TA I L E R S W I L L RESURRECT THE ART OF SELLING During my reporting, I quizzed each person I spoke with about which stores get

retail right. People picked one place more than any other: MartinPatrick3.

An extravagant, 1 600-square-metre cathedral of high-fashion menswear in Minneapolis, MartinPatrick3 looks like what would have happened if Willy Wonka had gone to Parsons School of Design. At once boundless and intimate, the store’s colourful rooms naturally transition to the next, each its own pristinely wrapped Christmas present.

In one, a collection of hand-stitched bow ties lie near $5 500 (R65k) Brunello Cucinelli suits, a shiny black Vespa, and a modern steel cocktail table by a local designer. Down the hall, a white-accented men’s grooming shop stocked with shaving creams and bottled fragrances practically glows. There’s an in-store tailor, a barber, a full-time jewellery designer, and sharply dressed store associates, all with bouquet-like pocket squares blooming from their blazers.

Eleven years ago, Greg Walsh, an upscale interior designer who also sold home furnishings from his studio in the city’s hip North Loop neighbourhood, began showcasing men’s accessories he’d collected during his travels: cuff links, watches, wallets. Customers loved them. Walsh brought on his better half, Dana Swindler (they’re “partner partners,” as Swindler puts it, smiling), to build out a stand-alone store

in 2008. “The rule was that nothing could have sizes,” Walsh says. “That totally went out the window,” he laughs, explaining that the scope quickly grew to include apparel and much more.

Walsh and Swindler approach retail drastically differently from any merchant I encountered. Each display in MartinPatrick3, no matter how exquisite, is designed to be ephemeral. “We’re constantly reinventing. We can completely remodel a room within 24 hours,” Walsh says.

They pride themselves on always paying vendors within 30 days—uncommon in the industry—and rushing new products into store collections often within days. (“This would take nine months at Nordstrom,” Walsh remembers one vendor telling him.)

Whereas the traditional rules of brick-andmortar dictate that sales matter above all else, store associates at MartinPatrick3 are encouraged to dole out sincere fashion advice, and if it means counselling a guest away from a higher-priced item or directing him to competitors’ shops, so be it.

The payback comes in the lasting relationships such honesty builds. The company hosts events for free—even weddings—which it sees as a natural arm of its service, particularly if it has helped outfit the groomsmen. (There are shelves stocked with prosecco in a cozy VIP lounge.)

In April, Walsh and Swindler even took down their e-commerce site. “It’s been funny.

People in the industry keep saying, ‘You did what?!’ ” Walsh says. “But we decided we’re all about brick-and-mortar—that’s what we do really well—so let’s focus all our energy there.” The self-financed retailer is growing fast. Walsh and Swindler guide me through back doors into 370 additional square metre of empty, brick-walled warehouse space adjacent to the store. This unfinished part of the 131-year-old building they moved to in 2010 is what Walsh is targeting as the company’s fifth addition.

Down the hall, in their design studio, where MartinPatrick3’s “board of directors”—Cole and Ella, finely groomed poodles—lounge about on a green-mohair dining settee, Swindler cracks open a thick three-ring binder full of store statistics. (Swindler, who previously ran an engineering firm, is as meticulous about data as Walsh is about design.)

Revenue has jumped an average of 40% annually since the company’s founding, with some years reaching triple-digit

“ T HE RE TA IL ER S W E MEE T, T HE Y DON’T DO A N Y T HING A L L D AY !” S AY S D A N A S W INDL ER, CO-O W NER OF T HE MEN’S S T ORE M A R T INPAT RICK3. “T HE Y’RE NO T ON T HE F L OOR E V ERY D AY L IK E W E A RE.”

growth. “We work our asses off,” Swindler says proudly.

The pair can’t quite articulate their secret, but they know other retailers don’t have it.

Others move too slowly, they feel, and simply aren’t creative enough. “We started in the recession. We’re used to hustling,” Swindler says. “The retailers we meet, they don’t do anything all day! Their give-a-shit factor is way down; they’re not on the floor every day like we are. Now that they’re making less [money], what do they do? The same thing as before, over and over and over again.”

MartinPatrick3 (the name comes from the ones Walsh’s father almost bequeathed him) offers sophisticated taste, expert curation, and a concierge-like, almost oldfashioned level of service that’s increasingly hard to find. Yes, it’s a store mostly for the 1%, but there is much here that Amazon can’t copy, time-honoured lessons of merchandising and customer attention.

Retailers don’t need to chase a futuristic version of themselves that they might never attain; they first need to remember what made them special in the first place.

The answers are all here. The talent, too.

If Wall Street is right and the industry continues to decline, then this will be what we lose: the art of selling. MartinPatrick3’s store manager once worked at Nordstrom.

The self-described concierge, who welcomed me to the store, made helpful recommendations, and even offered to assist with dinner reservations while I was in town, is an expat of Neiman Marcus, another shrinking department store trying to find its footing in the age of Amazon.

You don’t need to sell mid-fourfigure Cucinelli suits to offer this level of hospitality—Warby Parker does it with $95 (R1100) frames—you just have to care enough to treat customers with the consideration and cordiality they deserve.

I roam through MartinPatrick3 by myself for a while, and eventually end up at Marty’s, the in-store barbershop with a classic candycane pole out front. Christopher Hernandez, my stylist, is dressed in a black vest and a gray flat cap like a 1920s newsboy.

He previously worked at the barbershop inside the downtown Minneapolis Macy’s.

Last March, Macy’s shuttered the location.

“Most of us have a background in some big department store that’s closed,” he says as he snips away. “We’re all orphans here.” a c a r r @ f a s t c o m p a n y. c o m

FEBRUARY 2018 FASTCOMPANY.CO.Z A 45

46 FASTCOMPANY.CO.Z A FEBRUARY 2018

BUSINESS ENABLERS DRIVING NEW CHANGE IN A DIGITAL WORLD Strategic business transformation in a digital world requires the execution of many priority business enablers governed under a structured changemanagement programme. Enablers are market relevant factors, which prioritise and steer all new business transformation projects across the organisation.

By Michael O’Carroll, Associate Director PwC South Africa

hat is an enabler? Large enterprise often attempts to drive new strategic change initiatives across the organisation but often fall short of the desired execution. This can be because disparate projects are mobilised with little alignment to long term vision and sometimes led by different teams and executed in different ways.

Successful business transformation can be realised when the enterprise sets a five to seven-year business vision, plus strategic business enablers, that will help them get there. An enabler considers the current market and organisation conditions and guides the direction of business transformation initiatives.

Enablers need to be agile while staying aligned to the long-term vision. For example, an organisation can’t only have a vision to grow revenue without considering the evolving market and organisational condition which requires a fundamental shift to realise the new growth.

New revenue may require a shift in how the organisation manages and analyses its data, which in turn might require new data science skills or analytics and visualisation tools. In this instance, an enabler for this organisation may be that it needs to become a ‘data business’, which could include projects such as: setup a data stewardship model; migrate data to cloud storage; training data analytics API’s; recruit data scientists and enhance digital IQ of employees, which will all in turn help realise new revenue growth.

Getting an enabler ‘officially endorsed’ by the executive board is a necessity to implement supporting transformation projects for all areas of the business. The business unit and functional leaders will then be held accountable to identify, manage and report on how they will execute each enabler using a list of priority projects.

Communicating the successful implementation of these projects associated with each enabler is also critical to demonstrating to the organisation and its clients that change is happening and against market relevant factors.

Digital dashboards, infographics and town halls should be used to reiterate the necessity to drive support and execution of priority projects linked to these enablers.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 47

Identifying and prioritising these enablers requires time and support from senior stakeholders with input from young talent, who are excited to lead new change for the organisation. A quarterly review process can be established to propose new and updated enablers. These reviews should be superseded by sufficient market and organisational research to understand what new factors will help the entity realise its long-term vision.

What are some of the market trending enablers for 2018: 1. Build a data business: an imperative to operating in a digital world. Appointing a digital stewardship lead that can map, test and regularly ensure that all data is accurate and complete is the start. Then pick the most applicable cloud solution for storage, analytics, machine learning and visualisation and migrate relevant data today. Recruit and train top data scientists that can abstract insights and build solutions using clean reliable data.

2. Build your digital IQ: one can’t become a data business if leaders are not digital savvy.

Mobilise learning and development programmes to quickly upskill resources on trending digital concepts.

3. Adopt an agile culture: mobilise training programmes to shift teams away from Waterfall project management to a more agile,

48 FASTCOMPANY.CO.Z A FEBRUARY 2018

lean start-up collaborative approach to doing work and solving problems.

4. Build new collaborative workspaces: invest in creative collaboration spaces (AKA “innovation zones”) where teams can break away from the norm and creatively use spaces to interact with clients and colleagues to solve old problems in new ways.

5. Simplify operating models: review the adequacy of how you work and run processes within the organisation. Assess if the way you work aligns to how your people want to work.

6. Promote digital collaboration: besides efficiency gains in new operating models, people can contribute significantly more effort to realising new growth if they are mobile and able to collaborate digitally on the go from anywhere.

7. Invest in new services / products: a typical innovation funnel of regular ideas surfacing and cycling through a review and funding process.

8. Focus on what matters: Build and market a new centre of excellence space showing your clients and people that you are leading experts in emerging digital trends, for example a centre leading research into blockchain for the financial services sector.

These enablers can’t be successfully implemented through agreed projects without an adequate changemanagement programme and supporting team to lead the change. A formal Change Leader needs to be appointed, who sits in the office of the CEO and has his/ her full endorsement to implement all priority projects with functional and business unit leads. A standardised change management approach and supporting team bring confidence to the organisation that constant change is okay and new value is just around the corner.

“ A N ENABLER CONSIDERS THE CURRENT MARKET AND ORGANISATION CONDITIONS AND GUIDES THE DIRECTION OF BUSINESS TRANSFORMATION INITIATIVES.”

NEXT B y M i l l s S o ko ,

D i r e c t o r, U C T G r a d u a t e S c h o o l o f B u s i n e s s

MILLS SOKO

Beyond the water crisis: towards a better world Cape Town’s water crisis has spawned a rash of innovations and design solutions that show us that a better world is possible, desirable, and exciting – but how we nurture and grow these into sustainable businesses will be key.

Cape Town’s water crisis has the potential to be the city’s greatest humanitarian disaster in recent memory. With the Mother City reportedly just weeks from “Day Zero”, residents and visitors alike are being forced to think of new ways to make water go further.

It is a reckoning that is long overdue. Cape Town may currently be worse off than many other metros, but this is not the first time that water scarcity has been a concern for cities. Barcelona came within days of unmitigated disaster a few short years ago.

California is still recovering from the after-effects of its catastrophic drought. And throughout Africa, climate predictions tell us that officials and citizens are increasingly faced with a drier future. In fact, the UN has identified climate change as one of six megatrends that will impact sustainable development.

It’s not surprising, then, that innovators are rising to the occasion. As the old English proverb goes, “necessity is the mother of all invention”, and this potential catastrophe has birthed its fair share of innovation for the common good.

Many of these bright ideas are from local innovators.

Late in 2017, the University of Cape Town reported that civil engineer and PhD researcher John Okedi was studying innovative ways to use storm water, much of which is currently being managed through a network of ponds and channels, which divert it into rivers and, from there, into the sea.

This system leads to higher flows of poor quality water downstream, the university explained, and means the water goes unused in times of water scarcity – a pity, since Cape Town uses about 300 million cubic metres of water annually, and every year about four times that amount falls on the city as rain.

Okedi’s research proposed several innovative methods of storm water harvesting, including exploiting some of the approximately 800 retention ponds in Cape Town that usually stand empty until required for flood management. A further concept he proposed was through aquifer recharge management – a sound idea, given that groundwater is on the agenda as an additional water resource. Managed aquifer recharge, Okedi argues,

can “potentially relieve the city of the need to supply 33 million kilolitres of potable water per year”.

At Stellenbosch University, meanwhile, three Chemistry Master’s students have been working on eliminating water waste within the laboratory, in what they dubbed the Closed Cold Water Recycling System. Also born at Stellenbosch is the Geasy, an intelligent device that allows users to monitor and control their hot water geyser usage online.

There are innovations outside of learning institutions too.

The Mistifi, a mist nozzle that fits most taps, doesn’t require a plumber to install and reduces water dispensing from around nine litres per minute to just 800ml per minute. LooMe, meanwhile, is a simple foam designed to save toilet users from having to flush.

These strategies and devices show us that the technology and ingenuity exist to ensure that the crisis can be averted, but we must take care not to invest too much faith in innovation on its own. While few would argue that new ideas are, and always have been, vital for moving society forward, the reality is that successful and sustainable innovations have to make the transition from concept to reality through a complex process of organisation, structure, funding and human capital to ensure that they are able to deliver on their promise.

To help turn ideas into reality requires a good dose of solid business skills and financial savviness. There also has to be a well-functioning entrepreneurship ecosystem to support and nurture innovators – especially in the early phases of their business.

The Global Entrepreneurship Monitor (GEM), the world’s longest running study of entrepreneurship around the world, has identified 12 framework conditions that are critical to supporting innovation cultures ranging from government policies and programmes to entrepreneurship education at school level.

More than that, as a report last year from the World Economic Forum and the Bertha Centre for Social Innovation and Entrepreneurship at the GSB points out, innovators need to work with government and civil society if they are to stand a chance of delivering the value at the scale that is needed.

So, as Cape Town edges closer toward the unthinkable scenario of Day Zero, we can be cheered that a sustainable future is possible for all, but only if we work together. Whether or not this can be achieved remains to be seen.

“ T O HELP TURN IDEAS INTO REALITY REQUIRES A GOOD DOSE OF SOLID BUSINESS SKILLS AND FINANCIAL SAVVINESS.”

Mills Soko is the director of the UCT Graduate School of Business and an associate professor specialising in international trade and doing business in Africa. With a career that has spanned business, government, civil society and academia, he is uniquely positioned to understand the role these sectors have to play — collaboratively and individually — in addressing the critical issues of Africa’s development and competitiveness.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 49

50 FASTCOMPANY.CO.Z A FEBRUARY 2018

DESIGN THINKING AND THE DIGITAL REVOLUTION Success means thinking innovatively and SAP is leading the way B y S i m o n C a r p e n t e r, Ch i e f Te c h n o l og y A d v i s o r, S A P Af r i c a

FEBRUARY 2018 FASTCOMPANY.CO.Z A 51

FEBRUARY 2018 AND HERE WE ARE, NEARLY TWO DECADES INTO THE 21ST CENTURY AND WITH THE DIGITAL REVOLUTION WELL UNDERWAY. And yet, there are still many, many organisations (private and public sector) trapped in organisational structures, business models and management practices that were born during the heyday of the Industrial Revolution.

Whereas all around them a new breed of Exponential Organisations is eroding their value propositions and disrupting their business models, while a fresh generation of workforce, customer and citizen is placing more demands for cool new experiences on them.

Apart from the threat posed to the continued existence of established organisations, there is a bigger existential threat facing all of us if we do radically transform how we live on this tiny, but beautiful planet.

Several data points throw the problems we face into stark relief: • Global hunger is on the rise (today 842 million people go hungry) while a third of the food produced for human consumption is wasted or lost.

• Even though we have eradicated many communicable diseases, chronic noncommunicable diseases (NCDs) are on the rise; they accounted for 46%

52 FASTCOMPANY.CO.Z A FEBRUARY 2018

of the global disease burden in 2001 and are expected to rise to 57% by 2020. The problem will be exacerbated in developing economies because of a lack of resources to treat these NCDs. The rate of urbanisation is increasing around the world, but 72% of Africa’s urban dwellers live in slums.

• Only 12% of the companies that were on the Fortune 500 list in 1955 were still there at the end of 2016 – this highlights that the pace of disruption is accelerating.

Likewise, 52% of the companies that were in the Fortune 500 in 2000 were no longer there by the end of 2015. The average tenure of a company on the S&P 500 fell from 61 years in 1958 to 25 years by 1980, 18 years by 2011 and is estimated to fall to just 14 years by 2026. And this is the S&P 500 we are talking about here, large well-funded organisations able to invest in brands and infrastructure and able to hire from the best universities.

• The way that the world’s investors value companies gives us a rough idea into what is going on here. In early 2001, the five most valuable companies in the world were dominated by industrial-era corporations. In rank order from #1 they were: • General Electric • Microsoft • Exxon • Citi • Walmart By the end of 2016, that list was dominated by software-driven companies: • Apple • Alphabet • Microsoft • Amazon • Facebook Today, as large banking groups have clawed their way back after 2008, this list has changed little but, even so, of the Top 10 most valuable companies worldwide in 2018, 60% are tech companies signalling the digital disruption that is sweeping every industry.

SO, WHAT IS THE CHALLENGE WE FACE?

EVERYTHING CHANGES

Today, we enjoy the fruits of roughly 200 years of the Industrial Revolution, which began with the steam engine back in 1775. The Industrial Revolution gave our species an exponential boost in social development the likes of which had not been seen in the previous 200 000 years of human existence.

We live longer, better and healthier lives. We have broad access to better nutrition. We are better educated and more mobile than ever and can travel most of the world freely. In short, we have more amenities and capabilities at our disposal than even the best science fiction writer could have imagined back in the 1700s.

Yet the Industrial Revolution, for all its successes, came at a huge price and created a plethora of challenges, which we must now surmount to ensure the survival of our species as we head towards eight billion people.

Pretty much everything will change in this new economy and society. It won’t be easy. The hardest part may be letting go of what made us successful today and figuring out how to transform.

In many cases, we must overcome the sunk cost fallacy and walk swiftly away from legacy investments that hold us back. We must surface and challenge the practices and heuristics that served us well in a linear world, but are less appropriate in the exponential, digital world.

In the corporate world, we will need to learn to let go of our reverence for the specialist function and organisational silo, because many of those functions are based on rules and knowledge that can be automated away by various flavours of Artificial Intelligence.

But, despite these challenges, we have an amazing opportunity. One that creates more inclusive economies and societies, one that uses the planet’s limited resources more wisely and takes us from a mind-set of scarcity, with all that implies in terms of politics, power and competition, to one of abundance and one that unleashes the full potential of the human mind and spirit.

Innovation is mandatory for prosperity – it has always been that way, but in a world with a growing population and shrinking resources it assumes a new urgency and so, what we need is a better way of generating innovation.

“ I NNO VAT ION IS M A ND AT ORY F OR P RO SP ERI T Y – I T H A S A LWAY S BEEN T H AT WAY, BU T IN A W ORL D W I T H A GRO W ING P OP UL AT ION A ND SHRINK ING RE S OURCE S I T A S S UME S A NE W URGENCY.” The list of challenges is long; pollution, species extinction, greenhouse gas emissions and climate change, inequality and poverty, over-population, water-shortages and environmental degradation to name some of the more pressing ones.

The thinking that led us to today’s problems will not lead us out of them. We must create new generative options for the planet, our businesses and ourselves.

We must unlearn the received wisdoms and cultural constructs that were crafted for the industrial era.

It is definitely not all Malthusian doom and gloom.

THE DIGITAL REVOLUTION IS HERE We are at the beginnings of the next great shift for humanity, the digital revolution. This is not the industrial revolution on steroids, despite terms like “The 4th Industrial Revolution” and “Industry 4.0” which are essentially incremental in nature. This is a major discontinuity that gives us the opportunity to drive another, better, step change in human progress. Done right, this is the Renaissance re-booted. The exponential type of progress in science and technology and the combinatorial and amplifying nature of these advances will leave nothing untouched. We can already see some of the major changes that are coming: • Energy – from centralised, carbon-based power generation to distributed renewables • Mobility – from the internal combustion engine to electric vehicles • Communications – from broadcast & print to Internet and Bots • Factors of Production – from the traditional economic factors of capital, labour and land to data, knowledge and the creative mind.

• Production – moving from subtractive to additive manufacturing with 3D printers

BUT HOW? The big question, of course, is how do we get this done? How do we get to understand what needs to change, which problems to tackle, which opportunities to address? How do decide what transformation looks like for us? How do we mobilise our organisation and ecosystem to act – especially when we encounter that notorious resistance to change phenomenon? And how do we do that fast?

FEBRUARY 2018 FASTCOMPANY.CO.Z A 53

Re-imagine Customer and User Experiences

DESIGN I N N O VAT I O N

D e s i ra b i l i t y

Human Factors Re-imagine Business Models and Business Processes

Viability

Feasibility

Business Factors

Technology Factors

You’d need to be a genius, right?

Well partially right and it is certainly instructive to look at one of history’s great geniuses for insight and inspiration.

DIVERSITY AND DESIGN – CORE CAPABILITIES OF GENIUS Leonardo da Vinci is, indisputably one of history’s preeminent, if not the, nonpareil, geniuses. A true polymath who was a botanist and anatomist, a painter and sculptor, an architect and engineer, a mathematician and an inventor. A man who dissected dozens of cadavers to understand the muscles of the human face and then went on to paint the world’s most famous smile – the Mona Lisa.

Ahead of his time and constrained by the technologies of his day, this was a man who foresaw the helicopter, scuba, the parachute and the military tank.

Leonardo was a man who, driven by an insatiable curiosity, had a remarkable ability to synthesise insights and ideas from a variety of disciplines and design something new.

Scope It is this essential characteristic of divergent and

54 FASTCOMPANY.CO.Z A FEBRUARY 2018

convergent thinking informing design, which underpins the idea of Design Thinking and Design-led Innovation. And therein lies the one of the keys to tackling the challenge of how to drive transformation in the post-Industrial era.

SAP’S JOURNEY WITH DESIGN

Leverage Breakthrough Technologies - Big Data - Machine Learning - Internet of Things - Blockchain - Analy tics - Data Intelligence

At SAP, our journey to embed Design Thinking into everything we do, both internally and with our customers, began in 2004 when one of our founders, Hasso Plattner, was intrigued by an article about design thinking. He felt intuitively that design thinking was needed in both software development and business and, on that basis, he agreed to fund the first DSchool at Stanford University with David Kelly, founder of renowned innovation consultancy IDEO. Such was the success of this approach that there are now Hasso Plattner Institutes of Design Thinking at Potsdam University, Germany and the University of Cape Town, South Africa.

In 2008, Hasso Plattner brought 35 design thinkers into SAP to collaborate with the corporate strategy group and make design thinking a strategic priority in order to drive innovation across the organisation.

Once teams and executives saw the power of this new way of problem solving, design thinking began to spread across SAP and was infused in many different teams and domains. In 2012, having proved the concept and developed a robust methodology, SAP made the big move to scale design thinking as a way to help customers drive better business outcomes. This was done by reframing their problems and finding human meaning for technology, and by focusing on the user experience.

Subsequent developments in this field have proven the prescience of Hasso Plattner’s early decision. According to a 2014 study conducted by the Design Management Institute (DMI), good design drives shareholder value. In fact, the DMI’s Design Value Index (DVI), a market capitalisation-weighted index comprised of design-driven companies, showed 10-year returns 219% above those of the S&P 500 index from 2004-2014.

Prototype Validate

Ideate DISCOVER

DESIGN

Synthesize 360º Research

DEVELOP

Implement

Deploy Test

SAP is on that list and recognised for its all-in approach to design. As Jeneanne Rae, Founder and CEO Motiv Strategies who partnered with DMI for the survey, says “with the range of activities your design function has undertaken, SAP has clearly recognised the opportunity to become one of the most influential companies on the planet when it comes to design. Corporations, universities and individual careers will greatly benefit from everything SAP has orchestrated to make design understandable and accessible.”

In September 2015, the SAP Global Design team received a Red Dot Award for the SAP Fiori 2.0 user experience (UX) design concept in the Interaction Category at the Red Dot Award: Design Concept 2015.

The Red Dot Design Award is one of the most prestigious design awards worldwide, and honours products that exemplify excellence in innovation, concepts and visions. SAP won the award against competition from 4 680 entries in 61 countries.

In November 2015, proving the robustness of the Design-led approach, SAP won another Red Dot award, “Communication Design 2015” in the Interface Design category, for its Medical Research Insights solution powered by SAP HANA. This is a solution based on the premise that data-driven, breakthrough technology can help accelerate progress in medical research.

Developed in partnership with the German National Centre for Tumour Diseases (NCT) in Heidelberg, the SAP Innovation Centre Network, the SAP Design & Co-Innovation Centre from SAP, and the SAP Healthcare Development Team (note the diversity of inputs required for successful design-led innovation) SAP Medical Research Insights provides secure and instant access to clinical data from multiple sources (such as bio bank systems, tumour registries, physician’s notes) in a unified interface. Complex medical information can be easily managed through the intuitive UI and charts to make informed decisions faster.

Showing this is no flash in the pan fad, in 2017, the jurors awarded the Red Dot Design Award to the SAP Cloud for Real Estate solution, emphasising its high design quality and creative achievement. SAP Cloud for Real Estate is an operational and strategic

management solution supporting real estate managers in running and optimising their corporate building portfolios.

The system gives consolidated information on all buildings and answers key questions regarding space utilisation, facility costs, building portfolio, and partner collaboration with appealing graphical representations through an intuitive user interface validated by end users. With a focus on the human work experience, this solution is about disrupting today’s slow and disconnected processes, leading the way to well-managed buildings - and to better working situations for real estate managers.

Our own experience of working with companies and governments around the world over the past five years has shown that the design-led innovation process enables organisations to reimagine work, business processes and business models. It unleashes human creativity and spirit in an efficient, effective, reliable and repeatable manner.

Innovation no longer needs to be an incremental, piecemeal, episodic, and somewhat random affair. Instead it can be exponential, transformational, continuous and holistic, and integrated into the fabric of the business. It becomes as much a mind-set as process and methodology.

SO, WHAT IS DESIGN-LED INNOVATION? The late Steve Jobs said that “Design is not just what it looks like and feels like.

Design is how it works.” That philosophy lies at the heart of the iPhone that Apple launched in 2007. Many aspects of the iPhone were not new, most of them were available to any competitor, but the way Steve Jobs and Apple, led by design principles, put them all together with an almost obsessive focus on the user experience, revolutionised the industry.

In the world of business software, developers historically focused on just two dimensions; Business viability (would this idea make money?) and Technical feasibility (can we make it work?). The question of Human desirability was not addressed. Arguably this exclusion of the human factor in systems design is one of the reasons that software implementations took so long and encountered so much resistance.

Introducing design principles into the mix changes that. As Tim Brown, President and CEO of IDEO puts it, “Design thinking draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” It is a human-centric approach for solving complex problems by generating new ideas.

When one brings together all three factors, in a process driven by a diverse team, guided by empathy, one gets Design Innovations. It requires a subtle but important shift from technology as a driver for innovation, to human & business driven innovation enabled by technology. It’s about putting people first.

DESIGN-LED INNOVATION IN PRACTICE One of the important things we have done at SAP is to develop a robust and repeatable process for design-led innovation so that it can be embedded into any organisation. It incorporates techniques and methods plus tools and accelerators that enable; • Divergent thinking during ideation • Rapid prototyping to support “failing fast” • Convergent thinking when establishing viability

DESIGN-LED INNOVATION IN ACTION BIG WASHROOM DATA DRIVING NEW BUSINESS MODELS AND CUSTOMER SERVICE Austria’s Hagleitner Hygiene International GmbH, is a family-owned firm that produces and wholesales professional hygiene products that cover four main areas: washroom, kitchen, laundry, and janitorial hygiene.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 55

Manufacturing and operating in a highcost economy, it needed a way to remain competitive in the face of increased competition from abroad. Utilising Designled Innovation, it put its business and its customers’ needs and experiences under the spotlight to come up with new ways to create value.

In the diagram below you can see a typical design thinking artefact; this is typical of the stimulating, visual approach used in Design Thinking to help accelerate understanding and insights.

In this case, it was one of the tools used to help a diverse team design a new picture of how Hagleitner’s business model might work and led into the development of the IoT and Big Data-based HAGLEITNER senseMANAGEMENT system running on the SAP Cloud Platform.

Washroom dispensers are equipped with a radio frequency system that sends information like battery level or fill level to the server. The SAP Platform enables collection and analysis of data, reducing costs for maintenance and inventory. The facility manager also uses this information to plan demand-oriented tours for the cleaning staff, order products just in time, and reduce inventory.

A useful animation of this drawing is available on YouTube.

Gernot Bernert, Managing Director at Hagleitner now aims to create mathematical models that will leverage the bathroom sensor data to revolutionise restroom resource planning and enable the organisation to move up the value chain. As Bernert puts it, “we used to sell paper, now we sell expertise”.

56 FASTCOMPANY.CO.Z A FEBRUARY 2018

Some 100 registered patents later, Hagleitner is now seeing significant adoption of the senseMANAGEMENT system. A hospital near Hagleitner’s headquarters in Zellam equipped their 1 300 dispensers with the senseMANAGEMENT sensors. A cruise ship company was the next customer.

Before their vessels reach the next port, workers there already know how much toilet paper and soap was used, and how many paper towels need to be brought on board. “With far greater precision than ever before,” says Bernert.

CHANGING CULTURE WITH DESIGN THINKING The automotive industry is changing fast; companies like Google and Tesla are entering from left-field, electric vehicles, with fewer components and new infrastructural demands are changing manufacturing, supply chains and service requirements. The dynamics are complex and require incumbent organisations to become more agile and innovative.

Recognising this and having seen SAP’s own successes (for example the launch of a ground-breaking in-memory computing platform called SAP HANA) Daimler AG approached SAP to provide them with insights into the experiences and learnings of SAP’s own design and innovation journey.

The challenge was to create a new mind-set for innovation using Design Thinking as a basis for cultural change at the company.

Daimler AG’s goal is to integrate Design Thinking into the company’s organisation, not just to support the overall idea of innovation, but also to streamline processes within the business. Achieving this goal, requires establishing a mind-set focused on human needs, embracing creativity and agility, and fostering collaboration across organisational boundaries.

One of the important measures Daimler AG put in place was creating a space for Design Thinking to happen; it is important to take people out of their familiar surroundings to get them to “change gear”. Having a dedicated and purpose built space is also an effective way of making design thinking visible within an organisation.

At Daimler AG, the construction of a creative space in the centre of the headquarter campus made the new mind-set both visible and tangible. A space was designed and constructed by reusing containers from the Deutsche Tourenwagen-Masters (DTM) and to run some of the sessions. The flexible furniture specially crafted for the Design Thinking space, and the different environment, helped to foster creativity, and new solutions, as well as overall awareness at the company campus. Remarkably, all slots for sessions were fully booked before the container had even been set up.

Daimler’s Design Thinking journey started back in July 2016, and by the end of that year it had become a real movement called “STELLA. Staging Creativity.”

STELLA represents a new mind-set, and embodies the muse behind “discovering

something new in the things we seem to know” – combined with an invitation for everyone to follow.

At Daimler AG the journey continues with a mission to scale Design Thinking and implement it across the entire organisation.

This will be the responsibility of a central Design Thinking team, which acts as a bridge to overcome silos, and entrench the new way of approaching projects.

The project also fostered a new way of working for SAP. Edda Mann, Design Thinking Expert at SAP, says, “We have not only enabled our customers by introducing them to Design Thinking and Design Doing, but we have also helped them to initiate a cultural change. This made us really proud.”

SAVING LIVES IN AFRICA Globally, cervical cancer is the second most common cause of death for women, but in Kenya it is the number one cause of death.

Although this cancer is easily preventable, the women most at risk have never been screened. With the risk of cervical cancer being 6 to 20 times higher for HIV-infected women, it is critical to act fast to prevent a dramatic impact on families and societies.

To improve this situation in Kenya, new methods for cancer screening are desperately required. That motivated the University Clinic Heidelberg to run a pilot of the Emerging Technologies in Cervical Cancer Screening (ETiCCS) project in Kenya.

This pilot is funded by the German Federal Ministry of Education and Research.

The project tests a specific method to detect an infection with the Human Papilloma Virus (HPV), which can cause cervical cancer via specific biomarkers. These biomarkers have a higher sensitivity and the test evaluation can be trained easily.

PEOPLE

Women who are infected with HPV and at risk to develop cervical cancer can now be identified more easily and be treated to prevent cancer thanks to this very early screening. Once the University Clinic had established that the tests were effective it then reached out to find industry partners to digitalise and scale the paper-based process.

SAP’s Design & Co-Innovation Centre (DCC) team joined ETiCCS as an experienced partner in delivering cloud-based software solutions, while Intel, an SAP Global Technology Partner, sponsored Fujitsu Tablet PCs for the project.

The basis for the first prototype was several design thinking workshops with the DCC team in the SAP AppHaus in Heidelberg. During those workshops, experts from the University Hospital Heidelberg, together with SAP employees focused on uncovering the underlying challenges of cancer screening in emerging countries today. The challenges included incomplete communication, accessibility and availability of patient data.

Illustrating the diverse inputs and perspectives that are needed for Design-led Innovation to be successful, the SAP team consisted of designers, experts from the HANA Cloud Platform department, Healthcare product and solution management, Corporate Social Responsibility, and Custom Development, who developed and implemented the mobile prototype to allow local data entry and easy access to patient data.

Using tools like personas and journey maps, as well as lo-fidelity prototypes, a target process was defined to collect valid data for the study: a woman would be recruited in a local health centre, a nurse examines that woman, takes a sample, sends it to a laboratory, receives the results and contacts the woman for follow-up, such as further treatment.

The user-centred solution enables seamless communication between physician, laboratory and patient, even in very remote areas making early cancer detection programmes feasible.

Hermann Bussmann (Medical Director, ETiCCS Project Lead, Institute of Pathology of the University Hospital of Heidelberg) is extremely positive about the outlook, saying, “this approach can really revolutionise the work that healthcare facilities are doing, particularly in remote areas in Africa.”

The impact of this Design-led project was recognised globally when it received a HANA Innovation Award Honourable Mention in the category of Next Gen Apps, and won the first prize in the Design Management Institute’s Design Value Awards 2016 At SAP, we are excited about the potential of the Digital Revolution because it talks directly to our enduring purpose of helping the world run better and improving people’s lives.

Our SAP Leonardo Digital Innovation System gives our customers the tooling to make their aspirations real on a grand scale, and our proven Design-led Innovation process gives them the ability to quickly create valuable new possibilities for their organisations.

PROCESS

S PAC E

FEBRUARY 2018 FASTCOMPANY.CO.Z A 57

M Y W AY B y R e n e F ra n k

Virtual Reality: a new paradigm Gerard Slee, architect, coder, digital nomad and spatial prototypist advocates VR as the new environment in which to learn.

What is Tenebris Lab’s main focus?

Since Tenebris Lab was founded, we have primarily focused on development for our real-time VR architectural visualisation and walkthrough tool, LUX Walker. This is our flagship product and was created primarily as a workflow tool to simplify and improve

Gerard Slee wanted

to be an architect. After finishing his undergrad in Cape Town, he left the nest and spent two years in Berlin, Germany, working for a large architecture and engineering firm, developing new methods of digital architectural presentation and specialising in interactive real-time architectural visualisation.

From Berlin, Slee went to Bloemfontein to finish his Masters of Architectural Studies and later joined SAOTA, the most respected and internationally awarded Architects and Designers in Africa, sorting out workflow advancements and developing Virtual Reality (VR) experiences.

58 FASTCOMPANY.CO.Z A FEBRUARY 2018

He branched out to follow his passion for design and software development to launch Tenebris Lab in early 2017.

Slee and the Tenebris Lab development team.

the communication of 3D design between architects, developers and their clients. Tenebris Lab is focussed on AR and VR software development. We love to create adaptive software for an evolving digital landscape.

What inspired you to create LUX Walker?

From a direct result of first-hand experience with the frustration of trying to communicate 3D designs using standard 2D representations when presenting my lecturers at the University of Cape Town.

It was my own frustration that propelled me to devise a concept for creating a tool which renders a true-to-life scale model, for the most accurate representation of design. During my studies, I saw issues between architecture students and their facilitators and the digital methods and tools used to explain the design process.

I began coding towards a universal workflow for 3D data and LUX Walker was born. It’s the result of years of research into how architects and engineers work with data and allows everyone involved with a 3D based project to understand it simply before committing to site and construction. LUX Walker aims to change the landscape of communication between architects, developers and their clients – saving time and money throughout the design process and allowing them to experience the unbuilt.

“At a point I realised my clients would be familiar with 3D worlds through exposure to complex space in computer games and modern film. If our ways of presenting space and architecture did not change, our industry would be left in the dust,” says Slee.

You are passionate about education – how do you feel you contribute?

I love to teach, and the lab is a

30 SECOND BIO Gerard Slee

FAVOURITE QUOTE Think Different – Apple’s Slogan FAVOURITE BOOK Creativity, Inc. – Ed Catmull FAVOURITE DESTINATION Anywhere with a snowboard run.

FAVOURITE CITY Berlin/Cape Town FAVOURITE TECH GADGET My drone, a DJI Mavic Pro IDEAL DAY Waking up before my alarm, having some coffee and exploring my thoughts before heading to the lab.

A great day involves a good brainstorming session and discussing passions and ideas with the team.

HOW DO YOU UNWIND AND RELAX? I relax through creative problem solving. Where I can, I like to fly my drone and explore the world from above. I also love to travel when I can.

BIGGEST INSPIRATION: My parents.

BEST MOMENT IN LIFE: Now!

place of learning, encouraging the people involved to explore and gain new digital skills. This approach allows us to solve problems creatively with new technologies and think outside of any box.

Tenebris Lab has released free licences of LUX Walker for educators and students to interact and collaborate in VR. VR offers an invaluable tool to facilitate learning, fast decision making, and to reduce communication errors between lecturers and peers.

I also lecture the VR Course for the iXperience campus in Cape Town, teaching students from around the world the value of communicating ideas with technologies like VR and Artificial Reality (AR). The course encourages a design thinking approach to problem solving and teaches students to observe the world a little differently.

You have many gamers in your team, what are you doing in this development area?

We are indie game developers at heart. Most of our lab team are long-time gamers with a passion for game development. We understand the creative process involved from initial story boarding, character development, to creating a meaningful, well-formulated script and devising challenging, achievable tasks.

We have three VR games in development. “A little fire”, which was our first foray into game development, has been accepted into Kaleidoscope fund, an exclusive funding platform for top VR creators and industry leaders that takes successful projects to curators of festivals like Sundance, SXSW and Tribeca.

What new technology is the next big thing in training and skills development?

The integration of eye tracking technology in VR will aid the most in training and skills development. Companies such as Tobii and FOVE are currently busy developing headsets with eye tracking integrated.

This feature will allow for higher accuracy in skills development and VR interaction.

Where a person looks during the completion of a task has great implications on how efficient and accurately the user performed in the training exercise. Eye tracking data will also aid in developing and designing better training or skills development equipment outside of VR. What technologies are the most promising and why?

Decreasing the barrier to entry into the AR market using mobile technologies developed by Apple and Google has the greatest immediate effect. Where, before, expensive API’s and limited cell phone compatibility restricted the adoption rate of AR en masse, ease of access and large scale use of AR will drive these technologies into the consumer market and push further development in the X Reality (XR or Cross Reality) industry.

VR, HTC and Oculus are heading into next generation development and upscaling their current headsets. HTC is planning on releasing a higher resolution headset and a wireless adaptor this year, which will greatly benefit the professional VR users.

Where do you see Tenebris Lab heading in the next 5 years?

We aim to facilitate understanding in this era of digital divide – using our tools, software and games to solve problems, while leaving lasting experiences. Expanding our VR solutions to industries other than architecture, engineering and construction is on the cards for the next couple of years. Communicating space and design in VR is relevant to many sectors and we plan on expanding our software for use in the film and retail markets.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 59

60 FASTCOMPANY.CO.Z A FEBRUARY 2018

Tearing the roof off house designs Six local and international innovative house designs that are changing the architecture industry.

By Summer Jacobs

FEBRUARY 2018 FASTCOMPANY.CO.Z A 61

products on the planet, has gone from ‘used’ to ‘useful’. In an effort to spare natural resources such as wood, the lifespan of used plastic has been extended by being included in building materials such as I-Plas and RePlast.

I-Plas uses recycled plastics, wood fibre and binding agents to create composite lumber. With the same use as traditional lumber, composite lumber can be used for decking, fencing, retaining walls as well as structural support.

Similar in principle is Re-Plast, a material made of plastic sourced from the oceans and compressed into units resembling concrete building blocks.

It is estimated that about 300 million tons of plastic are produced each year.

Besides filling landfills, an alarming amount of plastic also ends up in the ocean, posing a great risk to marine life. Products such as I-Plas and Re-Plast are the responsible choice, as they not only promises to reduce plastic in the ocean, but can also be used in both commercial and residential building projects.

Shipping container homes have become a dominant example of sustainable housing in South Africa.

It’s been more than twenty years since the government started building Reconstruction and Development Programme (RDP) houses and despite building more than 2.6 million homes so far, there is still a severe housing shortage.

Shipping container homes seem to be a sensible solution for those who do not qualify for RPD houses or who simply cannot afford to buy a house. The containers are cheaper than houses, while offering the same functions. But it doesn’t stop there – from the townships to the CBD, shipping containers have proven to be versatile, serving not only as homes, but also as classrooms, portable clinics, ablution blocks and businesses.

What makes the humble shipping container so appealing is its adaptable

Far more factors weigh in on the way houses are built today than years gone by.

Increased densification and environmental consciousness are realities of a new era where much emphasis is placed on getting the green thumbs-up and finding effective ways to work with smaller spaces. It may have become more challenging than the days of bricks and mortar, but it has also pushed architects and engineers to create fascinating and innovative house designs.

In the last decade, light steel frame (LSF) building technology has been popularised in South Africa. Far from traditional building methods, this product is manufactured from coldformed light galvanised steel. Erected as the structural frame which supports and forms the house, this form of building technology is regarded as a “green building solution” for being cost effective, thermally efficient, as well as faster than previous building techniques.

Besides serving as a skeleton frame, LSF is also used for wall panels, flooring systems, roof trusses, and internal and external cladding to name a few. A number of companies such as Light Steel Frame Supplies and Futurecon have succeeded in using this new building technology in South Africa.

Plastic, one of the biggest waste

62 FASTCOMPANY.CO.Z A FEBRUARY 2018

Shipping container homes have become a dominant example of sustainable housing in South Africa.

nature. For many years it has been used as “prefab” classrooms in schools. It is easily incorporated with traditional styles of building and as a result serves the same purpose - at a cheaper price - of a classroom made of bricks and mortar. Small business owners have invested in them to run their Spaza shops, barbershops and cell phone repair shops. Its practical nature lies in its solid, lightweight design that can be easily constructed anywhere with minimal fuss. But this does not exclude those who wish to live in a luxury home with a bold statement. Architects have been able to accentuate the container’s cube shape to give it a modern edge flair.

The Ecocapsule home is arguably the most impressive self-sufficient design. The solar and windpowered, egg-like shaped home is one that should be highly considered in areas such as Cape Town, which is adopting an increasingly arid climate. The smart home is equipped to minimise heat loss, provide electricity and collect rainwater. Solar cells deliver 600W, while the wind turbine is able to produce electricity 24 hours a day. Rainwater is collected on the surface and stored in a built-in water tank. The pod also boasts a back-up rechargeable battery with a four day life span. Inside the compact mobile home is a bed, a working and dining space, a toilet, a shower and a kitchenette.

The Ecocapsule is easily transportable and rolls on its four extendable wheels.

Anyone looking for independent housing that does not rely on electricity and water services will find the Ecocapsule meets all their requirements.

The bridge house designed by architect Max Pritchard is one of the most unique homes found in Adelaide, Australia. Made of two steel trusses that extend from one side of a river to the other, the house is a unique example of how architecture and nature can live in harmony. Its features include a roof made of plantation pipes, thermal windows and heat-absorbing concrete floors.

Its narrow design allows its occupants to enjoy the scenery of surrounding trees.

It may not be the most practical home, but Pritchard certainly shows innovation in the way he used the surrounding nature as a backdrop to make the home as unobtrusive as possible.

It’s back to basics for a New Zealand wool company who says it is more ecofriendly to insulate homes with sheep’s wool than with synthetic materials, such as fibreglass or foam insulation. The company called Havelock Wool says wool can absorb moisture up to 35% of its net weight against 65% of relative humidity.

Wool became a by-product of the meat industry with the invention of cheaper synthetic materials, but now there is a new found value for the natural product which would serve as the better choice for health-conscious

Top left: An Ecocapsule home is arguably the most impressive selfsufficient design.

Top right: A bridge house design rendering.

homeowners and builders.

People living in smaller airtight homes, where condensation and moisture become a problem, would benefit from 100% wool insulation as the amino acids in the wool naturally bond with and trap the harmful chemicals such as nitrogen oxide which in turn creates cleaner air in homes. Wool is also flame resistant and self-extinguishing.

In an age where we have to rethink using finite resources, it is good to know that a renewable and sustainable product such as wool is a better alternative that will be around as long as sheep are, and while insulation may not exactly be a house design it deserves to be on the list for being a forward thinking solution to sustainable house planning.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 63

A U T O - I N N O VAT I O N B y Wa l t e r H a y w a r d

The sedan is dead, long live the SUV What was once a reliable workhorse and off-road conqueror has now grown (literally) into a multi-billion dollar auto sector that’s rather hard to fault.

A raised ride -height, commanding driving position and interior space combine into the perfect formula for a sales success. It’s not surprising, then, that SUVs have become more popular than the default sedan or hatchback – which have both seen a sharp drop in sales recently.

One class that’s struggling to find a foothold in South Africa, however, is the plug-in hybrid electric vehicle (PHEV) – mixing

64 FASTCOMPANY.CO.Z A FEBRUARY 2018

electricity with a conventional internal-combustion engine. This niche sector is often plagued by high asking-prices and a fear of change.

Could combining the traits of these two types of vehicle result in a marriage made in heaven?

The South African new car market doesn’t sport a particularly wide selection of hybrid SUVs, with mostly premium brands offering hybrid models. These manufacturers have the necessary cash flow to design, engineer, and build impressive hybrids that make sense in real-world driving.

“ T HE SOUTH AFRICAN NEW CAR MARKET DOES NOT SPORT A PARTICULARLY WIDE SELECTION OF HYBRID SUVS.”

We’ve compiled a short list of SUVs – all from premium brands, featuring plug-in hybrid electric powertrains. From BMW we have the X5 xDrive40e, Volvo offers the XC90 T8 Twin Engine, and Land Rover presents its first hybrid, the Range Rover Sport P400e.

Manufacturers say people buy these vehicles because they’re looking for exceptional fuel efficiency, space, and off-road ability, as well as some sportiness if they happen to find themselves on a twisty road.

charging stations, by using the included charging cable plugged into the port located on the front left fender. This allows the car to drive in pure electric mode for up to 25 kilometres – meaning short journeys can be easily completed with zero tailpipe emissions.

Looks-wise, there’s not much setting this model apart from other X5s, with only small badges on the front fenders and D-pillars hinting at its special tech.

Spec it with the M-Sport package and you can a have a menacing-looking SUV with a green heart.

BMW X5 XDRIVE40E

Volvo surprised the market with their first hybrid offering – the XC90 T8 – promising outright power, exceptional fuel economy, and low emissions, all in a 7-seat luxury SUV. The brand’s Twin Engine moniker simply refers to the two sources of power found in the XC90 – its petrol engine and the rechargeable electric motor.

The manufacturer believes the XC90 to be segment leader, boasting 42 kilometres

Taking inspiration from the brand’s trailblazing i8 hybrid sports car, the X5 xDrive40e is BMW’s first plug-in hybrid production SUV. Combining the versatility and on-road presence of a large vehicle with BMW’s proven eDrive technology, the X5 presents a compelling argument for the green-conscious SUV lover.

The cleverly controlled interaction between the X5’s TwinPower turbocharged engine and the rechargeable electric motor generating an output of 230 kW, which ensures the SUV has that extra punch for some enthusiastic acceleration, yet won’t leave you in tears at the petrol station. The hybrid returns a combined fuel consumption of 3.4 litres/100km and only 78g/km of CO2, meaning it’s exempt from emissions tax.

Of course, these figures are claimed by the manufacturer and it might prove impossible to attain that level of efficiency.

Nonetheless, it’s still more impressive than conventional powertrains and a lot less harmful than those sneaky diesels.

The X5 xDrive40e features an 8-speed Steptronic transmission for seamless gear changing and almost undetectable switching between hybrid modes. Its lithium-ion battery pack can be topped up from any standard power socket, or at public

V O LV O X C 9 0 T 8 T W I N E N G I N E

The BMW X5 xDrive40e only sips a claimed 3.4 litres of petrol per 100 kilometres.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 65

A U T O - I N N O VAT I O N | H Y B R I D C A R

of zero emission, pure electric range and 303 kW of power at the driver’s disposal – all through an 8-speed automatic transmission.

It certainly is a powerful hybrid, and with R-Design sport package selected, it looks the part too. Yet, claimed fuel consumption

The Volvo XC90 T8 can drive up to 42km in pure electric mode, spewing zero carbon emissions.

is only 2.1 litres/100km and CO2 emissions are as low as 49g/km.

The Volvo features five different modes that offer drivers a range of performance and fuel efficient characteristics. Hybrid is the default mode and is suitable for everyday use, it alternates between the two power sources to deliver the best overall fuel consumption.

Pure Electric mode is when the car’s batteries are fully charged and can serve as its sole energy source, powering the electric motor over the rear axle. In Power mode, drivers get the combined performance of the combustion engine and the

Engine

Power

Electric Range

Fuel Consumption

CO2

Price*

BMW X5 XDRIVE40E

2.0 litre turbocharged petrol + 83kW electric motor

230kW

25km

3.4 litre/100km

78g/km

R1 348 956

VOLVO XC90 T8 TWIN ENGINE

2.0 litre supercharged + turbocharged petrol + 65kW electric motor

303kW

42km

2.1 litre/100km

49g/km

R1 151 500

RANGE ROVER P400E PHEV

2.0 litre Ingenium petrol + 85kW electric motor

297kW

51km

2.8 litre/100km

64g/km

R1 589 400 *Prices correct at time of print

66 FASTCOMPANY.CO.Z A FEBRUARY 2018

electric motor, offering the kind of acceleration that will make a few sports cars hot under the collar.

AWD mode puts the XC90 in constant all-wheel drive, which is especially helpful in tricky situations like navigating wet roads or going off-road. Lastly, Save mode allows the driver to “freeze” the battery level, if fully charged, and save it for later use with Pure Electric mode.

Similar to the BMW, the XC90 T8’s lithium-ion battery pack can be charged from any domestic power socket by plugging its cable into the port situated on the front left fender.

LAND ROVER RANGE ROVER SPORT P400E The Range Rover Sport has long been the first choice for those in search of a luxury SUV with an extra dose of grandeur. This PHEV version is Jaguar Land Rover’s first attempt at a hybrid powertrain and it hasn’t spoiled the latter’s image, but instead widened its appeal.

Titled the P400e, this new model uses both JLR’s Ingenium

petrol engine and an electric motor to deliver a total power output of 297 kW from the permanent four-wheel drive system, powered through a ZF 8-speed automatic transmission. The new powertrain mixes dynamics and fuel efficiency with the tried and tested RR-level of comfort and refinement.

The P400e’s lithium-ion battery allows the posh SUV to travel up to 51 kilometres in all-electric mode, crowning it the electric range winner of this list. Like the previous two, the batteries can be charged by plugging its cable into a specific port hidden behind the grille.

Boasting a claimed fuel economy figure of 2.8 litres/100km and only 64g/km CO2, the Sport PHEV is the most fuel-efficient model in Land Rover’s history. It waits to be seen if the luxury SUV can live up to these figures, but they’re still impressive nonetheless.

“ T HE RANGE ROVER SPORT HAS LONG BEEN THE FIRST CHOICE FOR THOSE IN SEARCH OF A LUXURY SUV WITH AN EXTRA DOSE OF GRANDEUR.”

CONCLUSION Hybrid cars, and hybrid SUVs primarily, are still considered a niche market within South Africa, mostly inhibited by limited choice, high price tags, and the allure of frugal, yet malign diesels.

Still, with global warming, air pollution, and more stringent emission laws being passed, car manufacturers are now more ardently searching for alternate, earthfriendly powertrains.

It makes sense, then, that with the popularity of the SUV not dying down anytime soon and the increasing influx of new hybrid and battery technologies, vehicles like these will become more commonplace.

The models on this list are just a hint of what’s to come in the future – vehicles that are eco-conscious and partly electric, but still offer all the creature comforts that have made SUVs the most popular choice worldwide.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 67

FAST BYTES Fast Company SA takes a look at the innovative new ideas, services, research and news currently making waves in South Africa and abroad KAGISO RABADA TOPS ICC TEST RANKING The Proteas’ fast bowler Kagiso Rabada is now ranked the Top ICC Test Cricket Bowler in the world after an announcement made by the International Cricket Council. The 22-year-old paceman gained five points to move to the No. 1 spot on the ICC Test Bowling rankings, following the Proteas’ 72-run win over India at Newlands.

Rabada claimed 3/34 and 2/41 in the thrilling opening test of the series, which saw South Africa produce a sensational comeback after being bowled out for just 130 in their second innings. Rabada moved past England’s Jimmy Anderson, who dropped five ranking points after the defeat to Australia in the final Ashes Test in Sydney. Rabada is the seventh South African to attain the No. 1 test ranking and is one of the leading bowlers in all cricket formats, as well as the youngest player to have claimed 100 test wickets for South Africa with more than 20 test caps in the bag.

CELL C INCREASES WHATSAPP BUNDLE PRICE Cell C has announced that they will be increasing the price of their WhatsApp bundle from February 2018. The previous price of R12 per bundle will see users now having to add R3 more, taking the bundle price to R15. The bundle offers a fair usage cap of 600MB and is valid for 30 days. Cell C launched their WhatsApp bundle in October 2014 and has provided users with free text, image sending, or voice messages.

AYO TECHNOLOGIES BECOMES THE BIGGEST BLACK ICT FIRM ON THE JSE Ayo Technology Solutions has been listed on the software and computer services sector of the Johannesburg Stock Exchange’s Main Board. The broad-based, black economic empowerment ICT group offers numerous solutions to a host of industries. The group’s product and service offerings include business process management, big data analytics, data security, software development, IoT and cloud services. Ayo has a 25% market share of technology contracts in the public hospital sector and manages the National Health Laboratory Service. The majority black-owned ICT company, which is at least 30% women-owned, is a division of African Equity Empowerment Investments and has a R14-billion market capitalisation.

68 FASTCOMPANY.CO.Z A FEBRUARY 2018

FAST BYTES

UK-BASED FIRM BUYS BRENDA FASSIE FILM RIGHTS UK-based film and television production company Showbizbee announced that they acquired the rights to film the story of late South African musician Brenda Fassie, affectionately called “MaBrrr” by her fans. The company said that the film would be written and directed by Edward Shaw, with a script based on a story by her son Bongani. The film is set to be released in 2018. “Brenda, a period comedy-drama, follows a young, determined Brenda Fassie, and her journey from Langa, Cape Town to Soweto, Johannesburg – a journey which catapults her into stardom, becoming South Africa’s most iconic entertainer,” Showbizbee said in a statement.

BLACKBERRY ADDS TWO MORE YEARS OF LIFE FOR BB10 SUPPORT

5G TECHNOLOGY TO HIT SA Network equipment maker Nokia will trial its 5G technology in South Africa in collaboration with the Vodacom Group, with the aim of providing faster data delivery.

Under a Memorandum of Understanding with Vodacom, Nokia will share its latest 5G innovations, including among other things massive MIMO Adaptive Antennas, AirScale Radio Access and end-to-end Mobile Anyhaul transport networks to test how they can be used to meet changing demand in the country. Unlike the prior upgrades of cellular standards 2G in the early 1990s, 3G around 2000 and 4G in 2010, 5G standards will link cars, machines, cargo and crop equipment to the internet as well as speed-up data times. The companies will first focus on delivering Ultra-HD and virtual reality video services using the enhanced mobile broadband and ultra-low latency capabilities of 5G, said Vodacom, a division of Britain’s Vodafone.

BlackBerry has announced that it will be supporting its BB10 operating system for at least another two years.

Released in 2012, the BB10 operating system was BlackBerry’s last attempt at creating a modern smartphone platform. The main goal of the operating system was to offer all the major apps like Android and iOS and be a competitor to Apple and Google’s smartphone ecosystems. However, in 2015 with the release of the BlackBerry Leap it was the last device to run the OS before the company switched over to Android. While the operating system will receive support through the rest of the decade, BlackBerry is planning to shut down parts of it a bit earlier. The BlackBerry World app store is set to close in December 2019.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 69

FAST EVENTS Local conferences, talks and meetups we think are worth attending

AFRICA ENERGY INDABA

DESIGN INDABA ANNUAL CONFERENCE

Date: 20 – 21 February 2018 Time: 10:00 – 16:00 Venue: Sandton Convention Centre, Johannesburg Cost: R10 650 pp excl. VAT

Date: 21 – 24 February 2018 Time: 09:00 – 16:00 Venue: Artscape Theatre, Cape Town Cost: R7 470 pp (full three-day access)

The Africa Energy Indaba is highly relevant to companies actively involved in all areas relating to finding solutions for the benefit of Africa. Exhibitors have the opportunity to promote their company to business counterparts, international investors, buyers and governments worldwide. It offers companies a platform to demonstrate their commitment to providing much needed solutions and services, enabling the continent to embrace and overcome challenges arising from current and future energy demands.

Experience the world’s leading creative currency that’s driving design for a better world with the Design Indaba’s iconic annual conference. The conference is a showcase of the best in design and creativity, with over 22 years of experience curating design thinkers, artists, exhibitions and performances from Africa and the rest of the world. This year, alongside annual design talks, there is a nightscape and a postconference festival. It will feature world-renowned musicians, pop-up restaurants led by celebrated chefs, gourmet street food and a bespoke piazza designed

by UK graphic designer Morag Myerscough.

AFRICA LUXURY AND WEALTH SUMMIT

SEAMLESS AFRICA 2018

Date: 27 February 2018 Time: 08:30 - 22:00 Venue: Belmond Mount Nelson, Cape Town Cost: VIP pass R4 200 pp, company group pass (3 tickets) R10 000

Date: 5 – 6 March 2018 Time: 08:00 - 17:00 Venue: Cape Town International Convention Centre Cost: Individual pass - R10 395 pp, group booking R9 355 pp, exhibition visitor pass - free

In a fast-evolving emerging market, understanding the dynamics that are shaping the luxury and wealth sector is critical to success. The summit will be attended by luxury brand owners and wealth managers from South Africa and beyond. The event, which is in its 5th edition, is held in association with Pernod Ricard and the Financial Times, and will address the theme “Tectonic Changing Dynamics in African Luxury & Wealth”. An exclusive opening event, hosted by Maison PerrierJouët Champagne, will be held at The Stack Brasserie & Private Members Club, one of the city’s leading private clubs.

Equipped with expertise and key relationships, Seamless stages their headline event where pioneers and leaders in the payment, ecommerce and retail industries exchange ideas, showcase products and develop partnerships in a creative collision of the best and brightest industry minds. This conference allows new business opportunities and valuable connections to be made.

70 FASTCOMPANY.CO.Z A FEBRUARY 2018

FAST EVENTS

CHIEF DIGITAL OFFICER AFRICA 2018 Date: 5 - 7 March 2018 Time: 08:00 - 17:00 Venue: Hyatt Regency, Johannesburg Cost: R9 995 pp

IOT FORUM AFRICA Date: 14-15 March 2018 Time: 08:00 - 17:00 Venue: Gallagher Convention Centre, Johannesburg Cost of tickets: R4 950 pp

This conference provides a meeting place for chief digital officers and digital professionals who are enthusiastically navigating the digital transformation journey within their organisations. At the forum, senior leaders who are tasked with optimisation of business processes gather to discuss the intricate reality of their transitional roles. Speaking at Chief Digital Officer Africa 2018 will be Herman Singh, Group Chief Digital Officer from MTN Group, Jamie Whittaker, Global Chief Digital Officer from Barloworld Equipment, Jaydev Chiba, Group Chief Information Officer from Vodacom and Nihmal Marrie, Chief Digital Officer from Cell C.

Prepare for what’s happening in your industry with industry-focused content in breakaway sessions throughout the IOT Forum Africa Conference. Drive business growth with insights on disruption and innovation in your specific industry, and hear from successful companies that have implemented revenue producing IoT solutions that can transform your business.

DIGITAL ENTREPRENEUR MASTERCLASS

DELL EMC FORUM

Date: 13-14 March 2018 Time: 08:00 - 17:00 Venue: Workshop 17 Watershed, V&A Waterfront, Cape Town Cost of Tickets: RSVP

Date: 27 March 2018 Time: 09:00 - 18:00 Venue: Sandton International Convention Centre, Johannesburg Cost of Tickets: Free

Robotics and machines have made our lives a lot easier. Today, we consider the economic future we’re creating and how we can shape it, and if we can find a place amongst the machines. If we eventually create robots that do everything better, where does that leave us? A blissful human-robot collaboration?

This year’s Digital Entrepreneur Masterclass will explore why businesses should be racing with machines rather than racing against them. Understand that technology is not destiny; we shape our own destiny as entrepreneurs. In this revolution, we will focus on combing massive changes around our computing ability, our access to the Internet, and access to and proliferation of mobile devices.

The Dell EMC Forum is a free one-day technology experience for IT professionals.

Connect with peers, discover strategies, gain insights and explore solutions that drive IT innovation, enhance workforce mobility and reduce the risk in the digital era. The 2018 Dell EMC is the place to be, and sponsors are ready to discuss how their solutions complement your IT innovation strategies as you take steps to realise your digital future.

FEBRUARY 2018 FASTCOMPANY.CO.Z A 71

NEXT B y C ra i g H a n n a b u s ,

Group Digital Strategist at Havas

CRAIG HANNABUS

Design Thinking for Dummies: How Design Thinking Impacts Your Business Design Thinking has been around for a while, but it’s recently started gaining traction in service-based industries and user-experience circles, especially in South Africa.

The reason that Design Thinking (DT) is gaining traction is because it is a scalable, flexible and intuitive set of tools to help us think about problems and how to solve them. Simple.

At a time when brands and businesses are struggling with an incredibly dynamic consumer and smaller budgets, a streamlined, leaner creative solution to problem solving is the Holy Grail – it’s the future.

The name itself, Design Thinking, is a bit of a misnomer. A friend who is an interior designer, whenever I talk about DT, always says that she uses it constantly in her work. To be clear, there is a big difference between Design Thinking, and thinking about design.

In fact, it is not so much Design Thinking as it is Designed Thinking. It is an approach to thinking. A way of thinking. A method of thinking. It is not about organising ideas as much as it is about organising the path to conceiving those ideas and testing them. How useful is this in a business context? The answer is, very.

As part of IBM’s “Smarter Planet” initiative, the company began using booths to showcase innovative ideas that were impacting their customers. There was a real concern that the booths were not helping raise awareness within their target markets.

The first step is empathy: Here we put ourselves in the shoes of our consumer to understand what it is they really want. To be clear, this process is not productcentred – we do not talk to our consumers about our product. We talk to them about their lives. This is a very important distinction for DT as opposed to productfocused research.

If we understand a person’s life, we can understand their problems and then build better solutions for them.

Empathy is qualitative. That means that we’re not going to be sitting and looking at reams of spreadsheets and Facebook insights. Instead, we’re going to sit down with a handful of people from our target market, probably over a cup of coffee, and get to know them.

IBM employed a Design Thinking firm to help them solve their booth problem. The firm approached the empathy process by interviewing 100 experts on how people learn from each other. The research helped IBM

72 FASTCOMPANY.CO.Z A FEBRUARY 2018

understand how people share knowledge and engage with new information.

Then we define: The next phase is the definition phase.

Depending on the scope of the problem and the business you’re in, this phase could be as long as a meeting, or it could take several weeks. What we do here is re-define the brief.

IBM started out with a simple brief. When we ‘define’ we solve the problem of uninteresting briefs. The ‘obvious’ solve to that would have been to turn booths into innovative spaces that support a message of innovation. However, through empathy, the brief was redefined to, “how to create a space where people are inclined to learn, engage, and share new knowledge.”

The ideation phase: This is the fun part. Here we get key stakeholders into a room to work through possible solutions to the problem. The DT firm came up with several new approaches to building tradeshow stands. Some ideas incorporated new styles of furniture, while others built-on IBM’s existing touchscreen technologies.

Prototype and test: Do they rush in and implement? No. To be sure that their idea was rock solid, they prototyped and tested it to measure its effectiveness. The DT firm built prototypes to test with, to gauge how much they would lead engagement and conversations. They settled on an effective stand design, implemented it at a smaller conference to test effectiveness. The results were outstanding. The amount of effective sales leads increased by 78%.

There are a number of things worth highlighting about this process. Firstly, DT helped IBM redefine the brief. That redefinition meant that they could focus on the actual problem instead of trying the old “throw money at it” approach. Secondly, IBM created a solution that was viable and easy to implement.

Thirdly, they tested their solution to make sure they had understood the problem correctly. Where the solution didn’t test well, they would return to the ideation phase to tweak, or ideate anew.

There are many other benefits that this process affords businesses and brands: deeper relationships with customers, risk mitigation, constant iterative improvement, the list goes on. Many of these are tenets of businesses and brands that focus on both being relevant today and fit for the future.

The real beauty is that Design Thinking is scalable. You can use it to solve big problems like world hunger, or small problems, like ‘where should I put that kiosk’. You can use it to solve the problems of people that live in distant countries, or you can use it to solve issues in your personal life. It is a human-centric set of tools, so it is useful wherever humans are involved.

“ I T IS NOT ABOUT ORGANISING IDEAS AS MUCH AS IT IS ABOUT ORGANISING THE PATH TO CONCEIVING THOSE IDEAS AND TESTING THEM.”

Craig Hannabus is Group Digital Strategist at Havas, a communications industry leader that delivers integrated marketing solutions to leading brands. He has spent his entire adult life in the technology and marketing industry, exploring both the development and the content creation aspects of it.

6 - 7 JUNE 2018 Sandton Convention Centre, JHB

THIS IS LEARNING, REIMAGINED.

2018 SHORT COURSES OPEN. ENQUIRE NOW

SMS ‘Learn’ to 43 884

Standard SMS rates apply.

To find out more about our world-class, executive education short courses and customised programme offerings, contact 0860 UCT GSB (828 472) or INTL +27 (0)21 406 1922 or email execed@gsb.uct.ac.za