WILL GOOGLE’S ALPHA BET PAY OFF? 6 ways Larry Page is reinventing his company to beat APPLE, FACEBOOK & MICROSOFT
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Contents
C OVE R F EAT U RE
THE ABCs OF ALPHABET
Details about the newly formed company of companies (formerly known as Google) remain murky, but there’s a lot we can learn from the ways in which it resembles Microsoft, Nike, Facebook and more Page 20
F EATU RES
34 Brewing Up A Storm
Why a new generation of entrepreneurs are bringing their artisanal beverages to a market traditionally dominated by corporate brands BY GRAHAM HOWE
48 Friends With Benefits
By forming alliances with the likes of Starbucks and GM, the No.2 ride-sharing company, Lyft, is creating a path forward in its race against Uber BY RICK TETZELI
A breath of fresh air The travel industry should find new innovative ways to enhance the consumer experience to keep travellers coming back for more. (page 58)
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58 The Sky’s The Limit
With world-changing innovation in travel, tourists can expect adventures aplenty beyond their wildest dreams—from VR guides to on-flight shower spas BY GABRIELLA REGO
Contents
N EXT
30 Surprising Work Tips
How SNL, Frozen and poker can help you get more done BY STEPHANIE VOZZA
64 Tech innovations that will change your life in 2016
Every week brings new advances in tech, big and small, but what’s really disrupting the industry and what’s mere fluff? BY KATE WEST
72 Total Immersion
Five ways virtual reality is reshaping industries; gaming is only the beginning BY DANIEL TERDIMAN
C REATIVE C ON VE RSAT I ON
16 “We don’t always agree” Broad City creators and stars Abbi Jacobson and Ilana Grazer talk about finding a common voice—and always pushing the limits BY KC IFEANYI
MAY 2016 FASTCOMPANY.CO.Z A 5
Contents
REG U L ARS
10 From the Editor 12 The Recommender 42 Pedal Pushers
Two-wheel innovator, Biomega, has created a new bike with secret powers BY DIANA BUDDS
44 (Hard) Hats Off To Women
Engineering remains a male-dominated sphere in South Africa. How Naadiya Moosajee is levelling the gender playing field BY MIRIAM MANNAK
56 Old-School Cool
Skateboards are back—and they’re more aesthetically pleasing and functional than ever. Like Alpha Longboards’s hardwood cruiser, which was nominated as a Most Beautiful Object in South Africa
74 Connecting The Dots
Bevan Ducasse’s only burning ambition was to be an entrepreneur. Now CEO of the highly successful wiGroup, he shares why he chose this path
88 The Brand Builder How Alessandra Ghini helped Apple and Starbucks stir consumers’ emotions—and win big BY MARK WILSON
90 The Great Innovation Frontier
Forget the country’s political drama; we need to keep an eye on our young entrepreneurs if we want to build a true innovation culture BY WALTER BAETS
92 Fast Bytes & Events 96 No Laughing Matter Comedy is a serious business— be prepared to tough it out BY BARRY HILTON Shifting focus Part of Alessandra Ghini’s brand strategy for Starbucks included revamping the mermaid-centric logo. (page 88)
6 FASTCOMPANY.CO.Z A MAY 2016
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From the Editor
Giant leaps for mankind Fast Company’s Worldchanging Ideas issue ranks among my favourites of the year—as we put it together, I get goosebumps most of the time. The potential of business ideas like Lyft and Google’s Alphabet is positively mind-bending, and new technologies will surely fast-track human progress at an unprecedented rate and scale. Robert Safian, editor of our US publication, writes: “It’s hard to overstate how difficult it is for any leader or organisation to defy conventional thinking and instead give rope to a truly creative idea. And yet, that’s exactly what is required to generate world-changing impact.” So we salute the Larry Pages, the Logan Greens and the Bevan Ducasses out there who have turned their radical ideas into reality. As a teaser, here are three of the innovations that are going to change our lives in 2016:
ARTIFICIAL INTELLIGENCE Despite the doomsayers, AI is opening so many avenues for human advancement. I recently attended the launch of the Ogilvy & Mather Customer Innovation Lab, and was fascinated by the advanced touch and gesture technology. Simple, user-friendly and functional were the key characteristics of the tech. But robotics is just the tip of the iceberg when exploring the next generation of AI capabilities.
VIRTUAL REALITY We once imagined being able to attend a concert while sitting in our living room, or even exploring an open
10 FASTCOMPANY.CO.Z A MAY 2016
Unconventional minds With this issue, we salute those creative business leaders who have turned their radical ideas into reality.
house from a remote location. We no longer need to dream, as VR technology has enabled us to visualise such experiences as if they were real. Innovations like Google Cardboard, Samsung Gear and the Oculus Rift have ensured brands and individuals can affordably access and embrace VR at a rapid rate.
SHARING ECONOMIES Airbnb is a well-known example of the sharing-economy model. When speaking to Lena Sönnichsen (head of communications for Airbnb Middle East & Africa) at a lofty pad in Sea Point where she was accommodated, the potential of the sharing economy was plain to see. Sönnichsen felt at home chatting in Cape Town in what could previously have been viewed as a stranger’s house, but which is now an Airbnb listing. Ultimately, the immediate community benefits from the presence of leisure as well as business tourists like Sönnichsen. Airbnb listings can be found almost anywhere in the world, which has led to a new breed of entrepreneur from as far afield as Tanzania and Hawaii. Peer-topeer sharing of goods and services is on the rise and will become a strong business catalyst on the African continent in particular. We present these world-changing ideas with keen anticipation— and hope. Who knows? These innovations may even soon be further enhanced, and we can as yet only imagine the new creative products or services that will come to the fore. Yours, perhaps?
Evans Manyonga evans@fastcompany.co.za @Nyasha1e
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The recommender What are you loving this month?
Favourite restaurants Jadene Tager
Presenter, Power FM 98.7
Café Del Sol: There’s nothing like sitting on the Amalfi Coast in Italy, eating freshly made pasta with a glass of red wine—but the closest to this experience locally would have to be at Café Del Sol in Joburg. I’ve frequented this Italian gem since it opened back in 2007. They make the most spectacular gnocchi and ravioli in town, and are masters of baked cheesecake, pavlova and panna cotta. There are currently two branches: in Olivedale and Bryanston. The latter boasts the unique cocktail bar, The Landmark, where I like to sip on an Aperol Spritz or a Negroni, pre- or post-lunch. ASH Muzik (Ashley Beyers) R&B artist
ASH Muzik (Ashley Beyers) R&B artist
Restaurante Parreirinha: I love good food, especially prawns! I’ve been to many seafood restaurants in South Africa and all over the world, but my favourite is Parreirinha, a Portuguese restaurant in La Rochelle, south of Jozi. It’s not the fanciest one around, but I love the old-school vibe and setup there. As for the food? I’ve never had better prawns than theirs—so full of flavour and succulent. 12 FASTCOMPANY.CO.Z A MAY 2016
The recommender
Andrew & Brian Chaplin Electronic music duo, Locnville
FAVOURITE PERFUME Jacqueline Jacobs Sales & marketing director, Bliss Brands
Tom Ford Black Orchid: This perfume is iconic, memorable and has the packaging and ingredients that allow it to stand its own ground among a sea of competitor brands. Tom Ford is in his own right an icon and a versatile individual.
Favourite electronic devices Energizer XP2200 This is one of the best portable chargers on the market right now, and it’s my personal favourite. In today’s world, it’s essential to have all your devices charged so that you never miss a moment or an opportunity. The XP2200 will charge an iPhone or iPad to full capacity,
and the little suction cups on the bottom enable you to stick the charger to most surfaces. Whether you travel a lot, like me, or just don’t have access to plugs all the time, this is a very useful item.
Twisp Edge vaporiser Prior to vaping, I was a ‘pack-a-
FAVOURITE DESTINATION Bali: There’s so much to do here! From yoga retreats in Ubud to exclusive boutiques in Seminyak, trekking through a forest to the waterfalls of Sekumpul, and stopping by coffee plantations—or lunch on a volcano! The nightlife on Gili Islands is incredibly vibrant, the cuisine varied, and the Balinese people so hospitable.
day’ smoker, which I think most will agree is not the best for one’s health. The Twisp Edge gives a strong and dense vapour that’s highly satisfying. I haven’t smoked for more than six months. To anyone looking to kick the habit, the Twisp is a must-try.
Nishad Khan
Founder, Papushka
FAVOURITE OUTING Anna-Belle Durrant Founder, She Said blog
Work|Shop|New|Town : This is the recently launched shared creative and commercial space in Newtown. Aside from the fantastic range of local designer goods you can buy from its many stalls, every effort has been made to preserve the structure’s integrity and history. It’s the perfect outing if you’re looking to explore your city and splurge on some locally made goods.
MAY 2016 FASTCOMPANY.CO.Z A 13
The recommender
App Alley
Arye Kellman
Creative director, show host, CliffCentral.com
Mike Massyn
Founder, CEO, MDOT Creative Agency
Forest:
Spending too much time checking your phone for no apparent reason? Enter Forest! You set a time period during which a small seed in a digital forest on your phone grows into a tree— provided you don’t use your device. If you do, the tree withers away and you lose the opportunity to continue building your forest.
myTuner Radio: This app for Mac has become an essential part of my office life. With about 30 000 stations from around the world, I can indulge in anything from hip hop to classical, from comedy to breaking news. The quality of streaming is excellent and enables me to listen to 94.7 in Cape Town better than the station’s own streaming site. It may not be the prettiest app, but for functionality it provides everything a music buff would need, plus a vast and varied selection of podcasts.
J oel Guy Weather anchor, eNCA & e.tv
Fast Company SA staff
Giraffe: A group of techies in
Sandton developed this award-winning app to help employers and mediumskilled job seekers find each other. Working on the most basic of cellphones, Giraffe allows one to register and create a CV by completing a basic form via SMS—at no charge. The app then sends the CV to a range of employers, based on their precise requirements, and job opportunities are sent to select, screened candidates by SMS. Founder and head of product Shafin Anwarsha says the ultimate aim is to reduce unemployment. “We can harness the ubiquity of mobile to empower job seekers with better access to opportunities.”
14 FASTCOMPANY.CO.Z A MAY 2016
Evernote: Keeping
track of my to-dos and deadlines had become increasingly taxing, so I needed a tool to help me plan my days, weeks and months. This very accessible app not only helps me set reminders but I can also make typed, voice and handwritten notes for referencing later. I can scribble on my pad, and the notes are safely stored away. I can also scan business cards and keep them in my linked devices, thanks to Evernote’s digitising capabilities.
The Sky’s the limit with a postgraduate qualification in engineering, technology or project management
The Graduate School of Technology Management (GSTM) at the University of Pretoria is the first graduate school of its kind in South Africa and also the largest in Africa. The GSTM offers internationally recognised postgraduate programmes at honour’s, master’s and doctoral level. The master’s degree programmes allow for domain specialisation to address specific industry needs. Programmes and research activities relate to the disciplines of technology, engineering and project management for practising engineers and scientists. Degree programmes: • Masters in Engineering Management (MEM) • Masters in Project Management (MPM) • Masters in Technology Management (MTM) • Honours in Technology Management (MOT) Year programmes and short courses: • Project Management • Engineering Management • Technology Management • Maintenance Management • Logistics • Systems Engineering
For more information on programmes offered by the GSTM, visit www.up.ac.za/gstm
N E X T
1 6 FASTCOMPANY.CO.Z A MAY 2016
Creative conversation
Broad appeal Abbi Jacobson (left) and Ilana Glazer keep their hit Comedy Central show both surprising and consistent by acting as each other’s eyes and ears.
“We don’t always agree, but that would be crazy if we did” Broad City creators and stars Abbi Jacobson and Ilana Glazer talk about finding a common voice—and always pushing the limits INTERVIEW BY KC IFEANYI
Photographs by Ben Rayner
You two met as improv students at the Upright Citizens Brigade’s training centre, created Broad City as a web series in 2006, and cranked out 34 episodes before the show was picked up by Comedy Central. Is anything lost when you transition from a personal project to something bigger? Ilana Glazer: We’re really lucky that Comedy Central shared our vision and nurtured our creativity. They never put our balls in a vice. I think other networks are catching on. Abbi Jacobson: Yeah, they’re realising that they need to trust [content creators] more or else [shows] get cancelled. Stuff gets cancelled constantly because [networks] are trying to fit something into a box that they think [people] want, but it doesn’t work—nobody watches it.
There are so many entertainers on YouTube trying to get an ounce of the fame you’ve both achieved. How were you able to get noticed? AJ: We took [the web series] so seriously. I didn’t know what to do after three or four years of day jobs and trying to do comedy at night. So when we started this, we both sort of duct-taped ourselves together. Like, “We’re doing it!” We latched onto it so hard. IG: No matter what, if you focus your energy on building momentum, you will be rewarded in anything: in a friendship, in a romantic relationship, in volunteer work—anything you do. That’s been the most maturing experience, seeing how time works: You put your time and energy into something and it comes out the other end. AJ: You can’t just be funny—you have to be strategic.
IG: And if you are just funny and other people are using you as this funny puppet, you end up being less funny. The quality of your work will truly decline if you’re not behind the wheel. Someone who’s helped you steer is Amy Poehler, a UCB co-founder who signed on as executive producer of the show when it moved to TV. What has she contributed? AJ: Amy is really good at encouraging us to make there be significant moments—tender moments. I think that’s what she loves about the show. IG: She has such great taste. There was one episode that she said we should fully scrap, and she was right. We were using a plot device that was too early in the series to use: origin story. We wanted to do it in the first season,
MAY 2016 FASTCOMPANY.CO.Z A 17
Creative Conversation
and it was so painful, because we loved that script. We didn’t think we were getting a second season— she knew better.
ILANA GLAZER H o m e tow n St. James, New York
Ed u c at io n New York University
I n d e p e n d e nt p roject s
30-SECOND BIOS
2015’s holiday film The Night Before, with Joseph Gordon-Levitt; the 2013 indie How to Follow Strangers
Th o u g ht s o n B roa d City sea so n 3 “We are five steps more absurd and five steps more grounded and real.”
Be st ce l e b rit y i m p re s s io n Nicki Minaj (The Late Show With David Letterman, February 2015)
ABBI JACOBSON H o m e tow n Wayne, Pennsylvania
Ed u c at io n Maryland Institute College of Art
I n d e p e n d e nt p roject s The upcoming ensemble drama Human People, with Michael Cera and Tavi Gevinson; the comedy sequel Neighbors 2: Sorority Rising
Th o u g ht s o n B roa d City sea so n 3 “In 1 and 2, we didn’t really have season arcs, and this year we do.”
Be st ce l e b rit y i m p re s s io n Drew Barrymore (Broad City, season 2, episode 3)
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Each Broad City episode follows a fairly traditional setup: an intro scene and three acts building the story. But you have introduced an “outro”—a fourth act—in which Abbi and Ilana process what’s just happened. This reinforces the real heart of the show: Abbi and Ilana’s friendship. How do you weigh that heart against all the absurdity? AJ: It’s a very delicate balance. IG: We found that in season 2, that act 4 of us just hanging— not necessarily recapping but checking in where we are now after the three acts of the story— was a useful tool. I like how chill those moments are. If the broads are nuts together, then the setting has to ground it—they’re being crazy within a very real, grounded setting. If the setting is nuts, then the broads are like, “What the fuck is going on?” So it’s about locating the absurdity or the grounded thing, and balancing it out. How are you two feeling about the show now that it’s in season 3? AJ: This is like the Wednesday of the series. It’s like, we gotta get over it and then... IG: ...we’ll have more of a direction of what it’s going to be. There’s a long history of TV shows based in New York. Has that helped Broad City strike a chord? IG: It always makes me think of Sex and the City—[people] would be like, “New York is the fifth character.” But I feel like with Sex and the City, New York was more of this delicious backdrop, and it usually was beautiful and upper-class. AJ: [That show was about] the riches of New York. And ours is finding the riches in the non-riches.
IG: Yeah, it’s like finding the richness in the filth. AJ: Our show is about why you would move to New York, why people are so inspired by it. IG: With Sex and the City, those characters were using New York as their personal tool, and in Broad City we are drowning in the city and just trying to get some air and appreciate stuff along the way. The show is also about suburban-transplant love, when you’re like, “Oh, my God! Can you believe the piles of trash? I love it!” Continuing to be charmed by the muck—it’s very funny to me. You’ve built Broad City from the ground up as a duo. How do you solve creative differences without damaging your friendship? AJ: [The show is] kind of the voice—the in-between of our individual voices. We don’t always agree, but that would be crazy if we did. Someone not agreeing with someone’s pitch sometimes leads us to “What about this?” Sometimes in talking it out and disagreeing, we find the actual thing. IG: And it’s not always like, “We met in the middle—love it, sister!” Sometimes it’s like we did that Abbi [idea], we did this Ilana one, and that full moment felt “Broad City”, because we averaged out in the middle. It does vary, but it ends up being a pretty cohesive compromise between our visions. AJ: In the edit, we mostly agree on things. A lot of times, if one of us doesn’t like our own performance, the other will be like, “I disagree.” Sometimes it’s hard to look at yourself from an unbiased point of view. IG: The more I watch myself, the harder it is to watch myself and the more I find myself relying on your eyes.
Your collective voice can turn out some amazingly bawdy comedy, which doesn’t always go down well with the PC police. How do you handle that criticism? AJ: It’s very tricky. It’s doing it in a way that isn’t offensive while you’re still commenting on the offensiveness of the world we live in.
“No matter what, if you focus your energy on building momentum, you will be rewarded,” Glazer says.
IG: We weren’t around before shit was PC, and I’m like, thank God, because I like this era. AJ: I can’t imagine having a TV show 10 years ago. In this era, if someone has a problem with something, they write about it online, and people talk about it. That’s kind of cool. IG: Right, it’s just a point of discussion. AJ: The “Is it okay?” conversation is an interesting one to have. IG: Feedback is so validating. I don’t care if they’re like, “Didn’t love this.” I’m like, I can’t even believe you’re pressing send and publishing this.
Hair: Marcel Dagenais; Makeup: Sarah Egan
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W HE N GOOGL E B E C A ME A L P H A B E T, T HE R AT ION A L E S E E ME D S IMP L E : T H AT A COMPA N Y OF C OMPA NIE S C A N INNO VAT E FA S T E R T H A N A S INGL E L A R GE B E A S T. B U T T H AT ’S ONLY T HE S TA R T By Austin Carr, David Lidsky, JJ McCorvey, Harry McCracken and Mark Wilson Illustrations by Brian Stauffer
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“I t’s k i n d o f c o u n t e r i n t u i t i v e,” Google co-founder Larry Page remarked a couple of y e a r s a g o. “N o r m a l l y i n a b u s i n e s s, y o u t h i n k a b o u t, ‘W h a t’s t h e a d j a c e n t thing that I can d o ?’ B u t m a y b e y o u can actually do more projects that are less related t o e a c h o t h e r.” 22 FASTCOMPANY.CO.Z A MAY 2016
Back then, Page was explaining why his company—whose mission, officially, is to organise the world’s information and make it universally accessible and useful—had expanded to address everything from teaching automobiles to drive to researching ways to extend the human lifespan. At the time, the insight seemed classic Page, a heartfelt defence of unconventional thinking. Today it feels like something more: a premonition of perhaps the most radical, labyrinthine corporate restructuring of the digital era. Page released a letter last August announcing the reconfiguring of Google into a conglomerate called Alphabet. It described Alphabet as a new holding company that would be composed of independent operating units. The Google search engine and related businesses— including Android, Gmail and YouTube, to name a few—would be just one of them, and although it wasn’t initially clear, Alphabet would be home to nine other companies including Calico (the healthcare company whose goal is to lengthen life expectancy), Verily (the home of the company’s “smart” contact lens), X (its R&D arm), DeepMind (artificial intelligence) and Access (all of the company’s high-speed Internet initiatives). In February, Alphabet added its 11th unit when it elevated the think tank/tech incubator formerly known as Google Ideas into its own entity called Jigsaw. So what holds these far-flung enterprises together? And why have they been organised in this fashion? These are among the most critical questions facing Techland, investors, and anyone who competes with any piece of the company formerly known as Google—which includes almost everyone. Page has been typically reclusive since announcing Alphabet. (He was not interviewed for this article.) But that does not mean we can’t make sense of this newly arranged company. Page has never been content to stand still, compelled by hyperambitious efforts that he calls moonshots. Alphabet is itself a moonshot, hoping to overcome a raft of technological, social and financial challenges endemic to a world of increasing change. To understand this larger imperative, we’ve focused in on six areas, each epitomised by the experience of—or model established by—another leading company: Microsoft, Nike, GE, Apple, Facebook and Google itself in its earlier days. In deconstructing Alphabet’s opportunities and risks this way, there emerges a nuanced understanding of what Page may be after. So far, Alphabet is off to a rousing start: Shortly after it announced its first quarterly results in February, it briefly displaced Apple as the world’s most valuable company by stock-market capitalisation (a feat that the old Google never accomplished). As Page explained in his August letter, “We’ve long believed that over time companies tend to get comfortable doing the same thing, just making incremental changes. But in the technology industry, where revolutionary ideas drive the next big growth areas, you need to be a bit uncomfortable to stay relevant.” Here are the revolutionary ABCs of Alphabet.
A.
Avoiding t he Microso f t malaise
In the 1980s, the mantra of Microsoft founders Bill Gates and Paul Allen was: “A computer on every desk and in every home, all running Microsoft software.” At the time, that goal was a moonshot. When the company achieved it, Windows and Office—which eventually boasted 90%-plus shares of their respective markets—yielded landslide results. Microsoft became the most prolific profit machine in history, with margins on its core software products that no other company could approach.
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Until Google came along. Google’s search engine has become the preeminent utility of the modern age, with an ad-revenue stream that continues to spout enviable profit margins. But within that success lies the seeds of trouble. That’s part of what Alphabet was created to combat. As Microsoft learnt the hard way, when you have a once-in-alifetime business model, any other market you pursue pales in comparison. After conquering the PC world, Microsoft widened the scope of its ambition. It created the Xbox gaming system, moved into mobile, spent billions on the Bing search engine. These efforts largely disappointed: Windows Phone’s market share is now a rounding error, and Bing has never spent a year in the black. Even a blockbuster like Xbox couldn’t match the enduring windfalls generated by Windows and Office. Every dollar that Microsoft reaped on new ventures had lower margins than its core operations. Investors began to put a lower value on each dollar of Microsoft’s earnings; the stock stalled. Perhaps it’s not surprising that Microsoft developed tunnel vision, viewing every new technology wave as an opportunity to sell more Windows licences. That, after all, was the crown jewel. Yet, when Microsoft announced its first-ever dividend in January 2003, the move signalled to Wall Street that the company didn’t know what else to do with the $43 billion (more than R600 billion) in cash it had on hand. Microsoft’s status as a growth business began to crumble. Page’s Alphabet currently has $73 billion (just over R1 trillion) in cash on hand—a signal of just how pertinent the Microsoft comparison is. In turning Google into Alphabet, Page has made a clear statement to investors (and employees) that he is still focused intently on growth: Unlike Microsoft, Alphabet has plenty of areas in which to invest its cash. Even the streamlined Google unit has its own portfolio of moonshots, from virtual reality to machine learning. As Page noted in his letter, his company has done many things that people thought odd over the years, and “many of those crazy things now have over a billion users, like Google Maps, YouTube, Chrome and Android.” Page’s new structure has made it simple for investors to value the dollars coming from Google as distinct from the performance of the rest of Alphabet’s units. Google looks stronger than ever. Revenue grew 18% year over year in the fourth quarter of 2015, with full-year revenue reaching $74.5 billion (R1.1 trillion). Since more than $3 billion (R44.4 billion) in costs have been shifted to other Alphabet units, Google’s profitability looks better. To be a long-term success, Alphabet needs to prevent Google’s mammoth advertising business from becoming a crutch (or, worse, an albatross). That’s where the entirety of Page’s new structure comes in. By giving the Google operating unit more focus, the organisation can adapt more swiftly and become a better version of itself. The same holds true for Alphabet’s other business units, which now have their own autonomy—and expectations.
ONE WAY TO UNDERSTAND ALPHABET IS AS A VEHICLE TO BUILD ESSENTIAL PHYSICAL INFRASTRUCTURE IN THE REAL WORLD. WHAT IF YOU WERE TO BUILD A NEXT-GENERATION GE TODAY?
B.
Becoming Nike... sor ta
Hoverboards. Jet packs. Internet balloons. Agile (and terrifying) humanoid robots. Teleportation technology. We revere Alphabet for toying with these sci-fi pursuits. What other company would consider developing space elevators? Page has profound ambitions for these projects. Perhaps one day they’ll better humanity or transform the company’s core business. But for now, these ‘other bets’ are splashing red ink on Alphabet’s income statement: $3.6 billion (R53.3 billion) in losses in 2015, an 83% increase from the previous year. Many people view these gambits as Page and Alphabet president Sergey Brin’s folly, a collection of extravagant, imprudent distractions. Here’s another way to view the company’s costly moonshot habit: as a marketing expense. If there’s anything the Mountain View, California–based tech company effectively manufactures, it’s the mythology around itself. These fantastical ideas create a glowing halo around the company, fostering the perception that Alphabet is a place where magic happens, where the most innovative minds—from iPod creator Tony Fadell to life sciences’ chief Andy Conrad—come to tinker. In spite of Alphabet’s intent to be a holding company and not a brand, with each headline-stealing rumour of unrealised futuristic inventions within one of its divisions—X kills more than 100 concepts per year, but makes sure we know about some of those too (including most recently an “automated vertical farming” system and a “lighter-than-air, variable buoyancy cargo ship”)—an army of new fans get minted. No one has used this R&D–as-marketing framework to better effect than Nike. Its sprawling headquarters in Beaverton, Oregon contain several ‘not-so-secret’ secret research labs such as the Innovation Kitchen, where top scientists and athletes invent the future of performance wear. Hushed excitement for what takes place in these labs energises employees and consumers alike. The labs create a fine mist that helps keep the swoosh dewy and fresh, reinforcing the fact that Nike is special, different and synonymous with cutting-edge culture. Nike doesn’t enlist the graffiti artist Futura 2000 or graphic designer Geoff McFetridge to create limited-edition products because they will deliver huge earnings. Just as with those secret labs, the collaborations animate Nike’s dream factory. Nike employees aren’t just making shoes and apparel; they’re part of something bigger—a global cultural movement of empowerment and fitness. That framing helps Nike with everything from brand value to employee retention. For Alphabet’s employees, the vast majority of whom work at Google, perhaps it’s not always so special to toil on search-engine algorithms and advertising optimisation. Yet, the big goals within Google—to connect more users and advance machine learning—are noble and inspiring, and, thanks to Alphabet’s moonshots, staffers are also engaged in a larger futuristic vision, a place full of “Peter Pans with PhDs”, as X’s Astro Teller puts it, where “you’ll find an aerospace engineer working alongside a fashion designer and former military ops commanders brainstorming with laser experts.” Connecting the quotidian digital advertising business to this culture yields immeasurable benefits. Let’s reconsider that $3.6 billion Alphabet lost last year on its moonshots. Apple and Microsoft invested roughly the same amount combined on marketing, while Samsung spent nearly four times that. Many of Page’s bets, such as Nest, the smart-home-products company, have significant potential to benefit Alphabet’s business in the long term. And in the near term, they reinforce a distinctive culture. Which, by the way, may be the best advertising of all.
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C.
Channelling GE
Go to Alphabet’s website, abc.xyz, and you’ll see a pile of wooden alphabet blocks. Unlike Google’s home page, there is no blank white box and blinking cursor awaiting your command. You can’t click on the blocks to learn more about Alphabet’s companies; it’s just a photo! But in that picture is a wink: A single block is turned on its side, revealing a bright blue G. Alphabet is, in essence, a pile of blocks ready to build the Google of our physical world. Google itself is our essential digital infrastructure: Search, email, navigation, documents. One way to understand Alphabet, then, is as a vehicle to build essential, modern, tech-powered physical infrastructure in the real world. The analogy here is to General Electric, the original technology conglomerate (before technology required software). It’s not that Alphabet plans to displace GE, rather that it seeks to develop GE–like businesses. What if you were to build a next-generation GE today? Instead of wind turbines and aircraft engines, you might try clean-energy kites and self-driving cars. You’d develop contact lenses that measure blood sugar (Verily), create hacks to our genetic code (Calico), and devote initiatives to robots (Replicant) and drones (Project Wing). You’d design cities where the physical environment is smart and reactive to human presence (Sidewalk Labs). Nearly every department inside Alphabet is building real, physical things—like burly arms to Google’s omniscient hive mind. As it happens, GE is moving more into the virtual world just as Alphabet moves toward the physical one. GE is using software to optimise the deployment of airplanes, locomotives, mining operations, oil rigs, wastewater treatment plants, wind turbines and even city streetlights. Its Predix cloud platform serving these industries is a $5-billion (R74-billion) business and growing; its energy-focused Industrial Internet of Things unit, Current, has another R14 billion– plus in annual revenue. (By comparison, all the non-Google Alphabet companies combined generated just $448 million [R6.5 billion] in revenue in 2015, with most of it coming from Nest.) GE is managing legacy infrastructure—just as Google is, in its way—at the same time that it’s building businesses that position it well for the future. Alphabet is Page’s bid to anchor his enterprise both in tangible, useful products and in a future that is still evolving.
D.
Dreaming o f A pple
If Microsoft is the company Alphabet fears becoming, Apple, with its financial might and cultural heft, is the company it aspires to be—though you’ll be hard-pressed to find folks at the Googleplex who will admit it. Apple has something that Alphabet doesn’t. From the beginning, when Apple introduced the Apple I in 1976, it offered consumers a cohesive experience. That’s because co-founder Steve Wozniak personally engineered both the machine and its software from scratch. Four decades later, Apple is still building what Steve Jobs liked to call “the whole widget”—hardware, software and services blended into a (mostly) seamless whole. It even custom-designs processors for the iPhone and iPad. This profoundly ambitious undertaking lets it create new experiences and control them, not only wringing as much juice as possible out of its batteries but as much profit as possible out of its products. By contrast, there’s Android. When Google announced its smartphone operating system in 2007, it made its platform free to hardware makers, released the source code, and encouraged other companies to dig in and tweak it to their liking. “We hope thousands of different phones will be powered by Android,” said Eric Schmidt, Google’s then–CEO.
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Schmidt might have underestimated just how potent the Android proposition would be. Today, more than 8 out of 10 smartphones sold globally run the software, plus tens of thousands of other devices including tablets, watches, TVs, video-streaming boxes, cameras and more, giving Google access to consumers on a scale competitors can only fantasise about. As dazzling as the Android story is, it doesn’t present a happy ending—Google gave up two things to achieve this ubiquity. The first is profit potential. According to Oracle’s calculations in a lawsuit against Google, Android has lifetime revenue of $31 billion (R459.3 billion) and profits of $22 billion (R326 billion). In contrast, in just the last three months of 2015, strong iPhone sales helped Apple score $75.9 billion (R1.1 trillion) in revenue and $18.4 billion (R272.6 billion) in profit. In fact, Apple captures a staggering 94% of the smartphone industry’s profits, according to research firm Canaccord Genuity. The Android market has become highly commoditised, with many companies selling basic, me-too phones at a razor-thin profit, if not a loss. The conventional wisdom that Android’s massive market share would reduce the iPhone to near irrelevancy—as Windows did to the Mac in the 1990s—hasn’t panned out. Perhaps worse for Alphabet is its lack of control. Because Apple owns its environment, it can get new features into consumers’ hands with minimum friction. In September 2015, Apple and Google both updated their smartphone operating systems. Four months later, Apple’s iOS 9 was installed on 75% of iPhones. Conversely, phone makers and wireless carriers are notorious for holding up new releases of Android. Google’s new version, the excellent Marshmallow, had reached a measly 1.2% of Android users, leaving the remaining 98.8% running outmoded software. Google can’t even depend on Android as a source of eyeballs to look at its ads. Manufacturers are free to de-Googlise the Android experience—and often do. Everyone from Amazon to Chinese phone giant Xiaomi sells devices that replace pre-installed Google services with their own offerings. “What have these manufacturers done?” technology industry analyst and former Apple executive, Michael Gartenberg, envisions Google asking itself. “They’ve taken our children and are dressing them funny. This just isn’t the way things should be.” Google has been trying to impose more of its authority on licensees to keep the full suite of Google apps. A report last November on the tech news site The Information stated that the company is toying with the idea of designing its own chips, just as Apple has been doing for years. Still, having offered up Android to the world as an open platform, Google can’t simply say “never mind!” and reclaim it as a proprietary operating system à la iOS. If Alphabet and Google want to develop a ‘whole widget’ strategy, their best option may lie in newer categories of consumer goods. That helps explain why Page spent $3 billion (R44.3 billion) acquiring smarthome innovator Nest, now one of Alphabet’s autonomous operating units. And then there’s the white space of virtual reality. Cardboard, the minimalist system that lets consumers turn smartphones into barebones VR headsets using third-party gizmos that cost as little as $15 (R200), offers a fun, populist experience. Although Cardboard is likely too inconsequential to pose a serious threat to technology platforms like Facebook’s Oculus Rift, in January the Google unit signalled that it was ramping up its VR aspirations by naming a long-time company exec, Clay Bavor, as its first VP of virtual reality. A month later, sources told The Wall Street Journal that Google was at work on a much higherend VR headset, with its own display, processor, sensors and cameras. That’s what Steve Jobs would have called the “whole widget”—and a sharp break from Android’s let-a-thousand-gadgets-bloom approach.
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E.
Ent ering t he Facebook zone
During Google’s annual stockholder meeting last June—the last it would have as “Google”—the company’s top executives sat on stage as audience members lobbed questions at them that ranged from fantastical to inane. One attendee pestered chair-person Eric Schmidt and Page about avoiding a Matrix-like dystopian future. Finally, near the end, a pressing query: “How do you see ad blockers affecting your revenue source?” The question tapped into a prevailing concern about Google’s business: While dominant on desktop, it risked being eclipsed on mobile, particularly by Facebook and its growing hold on both consumers and advertisers. According to the research group, ComScore, 87% of mobile usage is within apps, where ad blocking isn’t yet an issue and where Facebook rules. Page, becoming animated, answered, “The industry needs to get better at producing ads that are less annoying and that are quicker to load. We’ve been kind of trying to pioneer that.” Page’s response signalled two things: that mobile could be vitally important for Google and, more subtly, that Alphabet was not about to cede the app universe to rivals like Facebook. Since that meeting, Google has reported that mobile searches have surpassed desktop ones worldwide and that it has developed several initiatives to tailor its results and ads. “We are seeing a major shift in consumer behaviour toward micro moments,” recently elevated Google CEO Sundar Pichai stated during Alphabet’s first earnings call three months later. “These are moments of high intent when consumers are looking to find, buy or do something.” Google introduced a new product that helps marketers reach existing customers via search. And as an example of the types of things Google can now do for advertisers, last September Dunkin’ Donuts ran a mobile search campaign so that when people searched for “coffee near me”, it assessed both walking distance and wait times to steer people to the fastest cup of java. In terms of the app-scape, Google has now indexed more than 100 billion links within third-party apps so that 40% of searches return results from within an app in the top five. It also launched a clever feature that lets users download or “stream” mobile apps directly from search, providing that in-app info more quickly. Google credits all these advancements with being the primary driver of its revenue growth in the last six months of 2015 (although the company, unlike Facebook, does not break out financials for its mobile business). Overlooked in the sometimes simplistic analysis of Facebook being the present and the future (mobile) and Google owning the past (browser) is that Google, unlike Facebook, has strength in both areas. Notably, Google has five of the seven most popular apps in the US, with YouTube at No. 2 and Google Search, Play, Maps and Gmail in slots 4 through 7. (Facebook and Facebook Messenger take positions 1 and 3.) Meanwhile, Google has continued to deepen its dominance on the open web. In February, Google launched what it calls Accelerated Mobile Pages (AMP), an open-source initiative that enables publishers to build clean, lightweight versions of web pages, stripping out the glut of data-intensive back-end technologies so that pages load almost instantaneously. Several ad formats are restricted from AMP, and publishers are incentivised to comply: Faster-loading sites can lead to a higher ranking in Google’s search index. If this sounds somewhat like Facebook Instant Articles, you’re right, except it’s for the whole Internet. Facebook wants to provide users with a big, blue sanctuary from the awful mobile web lurking outside, while Google is seeking to renovate the mobile web by blurring the lines between it and an app-like experience. This is a classic Google
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gambit—refusing to accept an ‘either-or’ when it can transform it into an ‘and’. The same inclusive thinking is evident in Google’s approach to attracting the next several billion users to adopt its services. “We believe that someone in Indonesia should get the same quality email service or search results as someone in New York,” Pichai told investors, taking a light jab at Facebook and its controversial “Free Basics” service that provides only limited access to the web. “From providing Internet access in India’s railway stations to making Chromebooks available throughout the region, it reinforced what a huge opportunity we have to help the next billion users come online and to have great experiences with the whole Internet once they are there.” Facebook and Google will continue to spar in their efforts to get more than 5 billion people online and in their use of artificial intelligence and machine learning to be more useful to those billions. Although Google may no longer deliver Facebook’s current growth rates of more than 40%, its steady stream of significant enhancements keeps the company poised to deliver double-digit growth for the next several years. And as the analyst Colin Sebastian with Robert W. Baird said, “Growth in the teens is still very profitable, and that is what helps fund these other projects.”
F.
Feeling Googl y, all over again
One of the most renowned stories in Google’s history occurred on a Friday in 2002, when Page grabbed a printout of the ads that accompanied search results, wrote “these ads suck” on it, and then posted it in the company kitchen. He wasn’t trying to belittle anyone. He wanted someone to fix a problem he’d discovered. By the following Monday, as then–CEO Eric Schmidt recounts in his book How Google Works, engineers had a solution that dramatically improved Google’s AdWords product. Page, like most techno-futurists, would seem to be immune to bouts of nostalgia. But recapturing that Friday-to-Monday problem solving of Google’s halcyon days, when it was first turning on what would become the greatest business model of all time, may be an exception. In the most basic ways, Alphabet is an effort to recreate that lost weekend, at the scale of Page’s ambitions today. The new conglomerate is theoretically designed to make change happen faster. In his letter announcing Alphabet, Page delineated several things he is excited about in the transformation. One is “getting more ambitious things done”. Another is “empowering great entrepreneurs and companies to flourish”. His hope for the Google unit specifically is to get “even better through greater focus”. Page needs his company to remain competitive in the face of the most significant threats it has ever faced—from Apple and Facebook, but also the likes of Amazon and Pinterest. He needs tens of thousands of employees to embrace the speed that epitomises Google’s search engine itself. This is why Alphabet is more than just a spectacular corporate re-engineering. Page picked the perfect time to reset his company—at the very moment analysts were heralding Peak Google. He knew traditional corporate structure limits innovation at the pace he wants and needs. He broke his business into smaller pieces to make them simpler and focused them more narrowly to discourage drift and distraction, while trying to maintain the advantages of scale and resources and a compelling culture to recruit talent. Page isn’t ready to settle for status quo. He wants to make the world a better place—with electric cars and smart cities and universal Internet access and no more disease—and also find lucrative new businesses that keep the company part of the present and future. He wants everything, from A to Z.
loop@fastcompany.com
Next
Productivity
Surprising work tips How SNL, Frozen and poker can help you get more done BY STEPHANIE VOZZA
Illustration by Karolin Schnoor
Charles Duhigg thought he was on top of things. The New York Times reporter won a Pulitzer Prize in 2013, and his first book, The Power of Habit, was a best-seller. But looking at some contemporaries, Duhigg realised he wasn’t doing as much as he could. New Yorker writer Atul Gawande, for example, is also a surgeon, medical researcher and author of four books. “I felt like I was playing in the kiddie pool,” says Duhigg, “while Atul was swimming in an Olympic.” He decided to find out how some people tackle so much. The result is Smarter Faster Better: The Secrets of Being Productive in Life and Business. Here are five things Duhigg found that could expand your view of what you can do.
Look at Saturday Night Live The best collaborative communities cultivate what Duhigg calls “psychological safety”: a sense that teammates can trust one another and have honest discussions. Smarter Faster Better looks at the example of SNL, which developed a culture where people felt secure enough to create. Teams
Stick to it Set “stretch goals”, says Duhigg. The more ambitious you are, the more you’ll do.
that use this approach become more productive, Duhigg says, as members share ideas and feel empowered to take risks.
Be willing to “Let It Go” Highly productive people constantly hone their approach. “They don’t find one system and stick to it,” says Duhigg. “They think about productivity all of the time and frequently change their methods.” In his book, Duhigg writes about how Disney executives decided to rethink Frozen
30 FASTCOMPANY.CO.Z A MAY 2016
midstream, ditching the typical fairy-tale storyline and reinventing the characters. The ensuing anxiety fuelled creativity, resulting in a movie that became the top-grossing animated film of all time.
create panic.” To avoid that, Duhigg suggests breaking them down into shorter term goals that will seem more achievable.
Stretch yourself
How can you get excited about a project? Duhigg points to the US Marine Corps’s discovery that the most engaged troops are those who feel they have influence over their own lives. As a result, the USMC redesigned its boot camp to offer more options, and assigned tasks without instructions for completing them.
Just because something seems impossible doesn’t mean it is—and the more ambitious you are, the more you’ll do. Duhigg calls this setting “stretch goals”. “A stretch goal is a huge ambition,” he says. “It inspires our motivation and dreams. But it can
Think like a Marine
Bet on the future Duhigg writes about poker champion Annie Duke who, when placing a bet, weighs the probability of each outcome and acknowledges what she doesn’t know. If she bets wrong, it’s experience from which to draw later. “Most of us are trained to think of the future as one right answer,” says Duhigg. “Force yourself to think about contradictory possibilities: what is more likely and why. You’ll make much better decisions.”
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SAICA IS LOOKING FOR CAs(SA) UNDER THE AGE RECOGNISING YOUNG, TRAIL-BLAZING CAS(SA) OF 35 WHO ARE AT THE TOP OF THEIR GAME
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35 2016
UNDER
thirty five
Fast Company promotion
An exceptional package The all-new Lex us R X is sure to impress loyal fans and w in over new ones
The refashioned fourth-generation RX, Lexus’s most successful car to date, makes an undeniably powerful visual statement. Credited with pioneering the luxury crossover segment, the RX has racked up more than 1.2 million sales since its inception; with annual US sales consistently surpassing the 100 000 mark, the RX is one of only two luxury-badged vehicles to achieve this accolade. Since its initial launch in 1998, the Lexus RX has proved immensely popular with those needing the flexibility of an SUV combined with the driving comfort of a luxury sedan. Glenn Crompton, VP of marketing, concedes that success brings challenges: “Lexus engineers and product planners were left with the arduous task of keeping loyalists happy while broadening the appeal of
the new RX. The new RX does indeed build on the success of the previous generations through the injection of adventurous styling, increased interior space, enhanced power and, crucially, more dynamism. It’s an exceptional package, combining the flexibility and psychological security of an SUV with the driving dynamics familiar to sedan owners. It’s a model that has performed consistently in South Africa since it was introduced in 2006, and the newcomer is sure to win over new fans.” The local RX line-up comes in two ‘flavours’: the petrol V6-powered RX 350 EX and the petrol-electric hybrid RX 450h in SE guise.
Exu be ra nt styli n g The exterior styling package on the all-new RX delivers a dramatic appearance in tune with the model’s extrovert style direction. Its aggressive spindle grille design sets the tone for the styling package, fusing with the overall body to deliver a sleek, streamlined appearance. The new headlamp design complements the more pronounced spindle grille and works in combination with the daytime running lamps (DRLs) to provide a strong, commanding frontal road presence. The RX 450h is strikingly ‘lit’ courtesy of the tri-LED headlamp cluster with integrated washer system. This model also features a sequential LED indicator
function that works in conjunction with the DRLs. The RX 350 EX makes use of high-intensity discharge headlamps with a more conventional indicator function. The side design is characterised by a sharp, angular profile while continuing the lines of the spindle grille from the front to the rear. The blacked-out C pillars are the real kick in the design profile, creating the illusion of a floating roof. The rear design evokes the styling elements of the front, specifically the trapezoidal spindle grille design, to provide continuity and a feeling of width. It offers a wide range of paint and interior colours to match its striking body and cabin designs, with a choice of seven metallic hues complemented by two leather interior trim colours— black and ivory. Twenty-inch alloys are standard on both grades; an interesting piece of wheel art on the RX 350 EX comes in the form of worldfirst colour inserts in Sonic Titanium.
Im proved per form a nce a nd efficiency The new RX 350 has 8% more power and 7% more torque, while returning 9% greater fuel economy. The new-
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The bold and the beautiful
MOTORPRESS.CO.ZA
The new Lexus RX 350 combines the flexibility and psychological security of an SUV with the driving dynamics familiar to sedan owners.
generation 2GR-FKS engine has 221kW of power at 6 300rpm and 370Nm of torque at 4 700rpm, with combined cycle fuel economy of 9.6 litres/100km. There’s a new-specification 3.5-litre quad cam V6 engine and eight-speed automatic transmission with M (manual) Mode, for improved driveability and fuel economy. The new engine has VVT-iW (Wide) on the inlet camshaft and the Lexus D-4S dual injection system of highpressure direct injection and port injection. The valve timing can be advanced for greater performance—or retarded, so the engine operates in the high expansion-ratio Atkinson cycle for greater economy. The result is higher torque throughout the engine revolution range. Fuel economy has been optimised by paying careful attention to the balance between direct and port injection, according to engine load and operating conditions. The Lexus VVT-iW system adjusts the inlet timing to ensure reliable engine start in conditions of extreme cold and impressive wide-open throttle performance. An eight-speed sequential-shift transmission comes in lieu of the previous six-speed transmission for added driver involvement,
driveability and fuel economy. New electronic-control technology further adds to driveability. The eight internal ratios have been chosen to balance the needs of sports driving and fuel economy, with a low first-gear ratio for initial acceleration, closely spaced ratios in the intermediate gears for performance and urban-driving economy, and a tall eighth-gear ratio for motorway economy. The hybrid RX 450h has 10kW or 4.5% more combined power, at 230kW, coupled with a 9.5% fuel economy improvement to 5.7 litres/100km. The dash to 100km/h is dispatched in a very credible 7.7 seconds. Lexus has made driveability, efficiency and packaging improvements throughout the RX 450h driveline and hybrid system. The new 2GR-FXS 3.5-litre Atkinson cycle quad cam dual VVT-i V6 petrol engine has an additional 18Nm of torque (at lower revolutions) and 10kW more power than the previous engine. The petrol engine
The RX model has performed consistently in South Africa since it was introduced in 2006
delivers 193kW of power at 6 000rpm and 335Nm of torque at 4 600rpm. The Lexus hybrid system blends that power with the 123kW front electric motor and, when required, the 50kW motor in the E-Four AWD system. RX 450h has an all-gear electronically controlled continuously variable transmission, for ideal gearing at all times and no energy loss through slippage. Lexus has further refined the power control unit, hybrid battery and hybrid system electronic control unit in the RX 450h for improved driveability, fuel economy, HV performance and interior comfort. The installation position of the battery cooling blower has been changed, and the height of the main body lowered by 26mm, allowing for increased rearseat cushion thickness and greater comfort. A pulse-type blower has been adopted to reduce noise. When accelerating, the power mode emphasises performance by making better use of petrol engine power and the mid-range acceleration contribution from the electric-drive motor. When decelerating, the rate of retardation and the engine sound have been tuned to give a sporty driving feel. The sequential shift feature can be used to downshift the transmission for the optimum feeling of engine braking and to set up for a corner.
Com pre he n sive safety The new Lexus RX has a full suite of driver-assist technologies including Blind Spot Monitor with Rear CrossTraffic Alert (helps when backing out of a parking space), rear-guide monitor, clearance and parking sonar, among many others. On the passive safety front, the new RX is equipped with 10 supplemental restraint system airbags including dual-stage twin-chamber driver and front-passenger airbags, front passenger cushion airbag, driver knee airbag, curtain airbags and rearseat side airbags. The all-new Lexus RX is attractively priced: the RX 350 at R799 000, and the Lexus RX 450h SE at R999 000. For further details, visit www.lexus.co.za.
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BREWING
UP A STORM
Why a new generation of dynamic entrepreneurs are bringing their artisanal beverages to a market traditionally dominated by corporate brands
BY
Graham Howe
MAY 2016 FASTCOMPANY.CO.Z A 35
“ W h a t e v e r m i n d
c a n y o u
i n t o
y o u r
c o n c e i v e , c a n
p u t
b e e r . ”
For Mark Goldsworthy, Red Sky Brew’s winemaker-turned-brewmaster, craft beer means freedom. “Other beverage industries are limited in terms of what you are allowed to create. Brewing is definitely less regulated. You can pretty much do whatever you want. It all comes down to the actual crafting and experimenting using quality ingredients; it’s an art form.” He and his wife Kelly are behind the quirky aviation range that includes Warhawk Red, Avenger Pale and gluten-free Goshawk. Says Kelly, “For years we dreamt of starting our own winery or wine farm, but unfortunately we never found the pot of gold at the end of the rainbow. It was only after a good weekend away, a lot of good beer and good wine that the thought crossed our minds to do the ‘switch’ from one beverage to another. Since then, it’s been an absolute roller-coaster ride ... The craft beer scene is for us. We love the people, the atmosphere— and, of course, the product!”
Over the last five years, an estimated 150 microbreweries have proliferated all over South Africa—from Gauteng to KZN to the Free State, from the Garden Route to the Western Cape. The very essence of a small-scale microbrewery is perfect for startup micro-enterprise. ‘Small is cool’ for South Africa’s millennial beer drinkers who will quaff an estimated eight million litres of craft beer in 2016—a growing drop in an ocean of industrial lager. The new beer hipster wants to drink local and slow, to know the origin and authenticity of a brand, the quality of ingredients, how it is made, and to exercise freedom of choice when it comes to picking a diversity of beer styles: from amber ales, pale ales, pilsners and porters to fruit infusions, smoked and wheat beers. Andrew Douglas, organiser of the Tops at Spar Bierfest, comments: “The diversity of new beers on offer has disrupted beer consumption. Most traditional beer drinkers will always have a staple brew, but I think—just like wine—increased variety and the romantic notions of craft or batch brewing entice consumers to try something new … We’ve noticed large numbers of non-traditional beer drinkers drinking more beer.” Tapping into the fast-growing craft beer market, SABMiller (which holds over 90% of market share in South Africa) has launched a microbrew range called No. 3 Fransen Street at its brewery in Cape Town. On the Super Cool Beer Tour, a conducted excursion to three craft breweries in the city, tourists are offered a tasting of several SAB craft beers on tap, including three types of weiss/wheat beers.
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In the UK, where craft beer is the fastest growing segment of the traditional beer market, SABMiller recently acquired the Meantime Brewing Company, a leading modern craft brewer. Discriminating hipsters who drink craft beer are after beverages with personality— and a sense of place. The new generation X of craft beers in South Africa takes your palate for a walk on the wild side with quirky beer labels such as Bone Crusher wheat beer by Darling Brew, Hemel Op Die Platteland Ale by Fokofpolisiekar, Ystervark hybrid lager by Hoogeberg Brewing Company, Boggom Blonde Ale by Cederberg, Van Hunks Pumpkin Ale by Boston Breweries and Wagon Trail’s Pale Ale. It’s all about artisanal, handcrafted beers, cold-fermented, made without preservatives, in small batches, bottled unpasteurised and unfiltered, cask-conditioned in wine or whisky barrels, naturally carbonated and/or re-fermented in the bottle. In the new hipster beerspeak, is it a bottom-fermented lager, a
Red Sky Brew’s beers are named after vintage flying machines. The Goshawk is SA’s first commercial gluten-free beer, made with sorghum and maize malt.
top-fermented ale or a bottle-conditioned lager? Where do the hops come from? The fans are prepared to up-spend to a premium surcharge of R25 to R35 for a craft beer. The ‘brew naturally, sell locally’ (beer that’s neither filtered nor pasteurised) is the new mantra of many of South Africa’s dedicated microbreweries. The craft beer revolution here follows global trends. The boom started in the US in the 1990s and grew into a ‘slow beer’ movement of 2 500 microbreweries, brewpubs and taprooms, capturing 20% of the mainstream beer market. (A microbrewery is defined as producing under 15 000 barrels, or 178 841 decalitres.) “The Brewmistress” Lucy Corne, author of African Brew and Beer Safari, comments on the big craft beer trend in a recent interview: “It has a lot to do with market culture. People have recently wanted to know more about where their food comes from, and so it makes sense that they want to know where their beer comes from, too … There have been micro-breweries in operation in South Africa for decades… but until recently, it hasn’t really been, you know, hip. Craft beer is here to stay.” After working for SABMiller as a brand and crafter brewer for six years, Apiwe Nxusani, a qualified master brewer, joined Brewhogs in Kyalami, Gauteng. The pint-sized brewer and Brewhogs shareholder who hails from Butterworth in the Eastern Cape now runs a showpiece microbrewery with a 4 000-litre capacity. Originally installed at the SAB World of Beer museum in Newtown and Gold Reef City, Brewdogs is
home to best-selling slow-brewed brands like Vagabond Pale Ale, Pilsner and Punk IPA (India Pale Ale). A woman in a man’s world of brewmasters is an easy challenge for Nxusani, who was the first person in South Africa to complete a national diploma in clear fermented beverages. At Brewhogs, she makes unpasteurised beer in the traditional way: without artificial flavourants, colourants, finings or preservatives. She says proudly, “Brewing is not only my career but also my passion, my hobby. For me, craft brewing is not only about perfecting the balance between the science and the art. We love our craft.” Annual beer-on-tap festivals in Joburg, Cape Town and other centres—where microbrewers meet beer lovers face to face over tastings—have helped to recruit a rainbow nation of new beer drinkers. Conducted tours on craft beer routes are helping to develop the market, while The League of Beers is promoting this fastgrowing category through its online tasting club that distributes a monthly mixed case of craft beer from around the world to its members. A beard on these guys at beer festival tastings is as de rigueur as playing for ZZ Top. Who says the grape and the grain don’t go together? In the Winelands, microbreweries are the hottest new attraction on wine farms, among them the Cape Brewing Company on the Spice Route Farm, Hoogenberg Brewing at Signal Gun Wines, Wagon Trail Brewery at Anura Vineyards, Cederberg Brewery, Wild Beast Brewery at Remhoogte Wine Estate, Dieu Donné Vineyards as well as Birkenhead Brewery on Walker Bay Estate. The newest craft beer investment is Tuk Tuk Microbrewery, a state-of-the-art facility that opened earlier this year on Franschhoek Main Street, in the heart of one of the top gourmet destinations in South Africa. The
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Cape Brewing Co. brewmaster Wolfgang Koedel has over 30 years’ experience and takes immense pride in the craft he loves. He firmly believes he was “destined to brew beer”.
latest investment in the Winelands by lifestyle entrepreneur Analjit Singh (who also acquired Le Quartier Français and the Leeu Collection of luxury boutique hotels in a multimillion-rand deal) makes six craft beers under the Cape Brewing Company label—including the best-selling IPA, amber and krystal beers—as well as four beers under the new Tuk Tuk brand. The brewery also offers beer and Mexican tapas pairings. “Tuk Tuk is a very nice little brewery on steroids when it comes to technological advances,” says brewmaster Dewald Goosen, former senior brewer at Woodstock Brewery. “The choice of ingredients is the first step to creating exceptional craft beer. Our bespoke brews are made from selected local and imported hops and malts, special cultured yeasts and crystal-clear spring water. We will be creating new benchmarks by experimenting with different ingredients and batches.” Craft beer is attracting major new investment in the hospitality industry. Opened in December 2015, the Darling Brew Tasteroom & Brewery in the wine-
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and-wildflower capital of the Cape West Coast is another brand-new tourist hot spot. The microbrewery embodies the “Slow Beer” slogan of owners Kevin and Philippa Wood, who wanted to match the laidback lifestyle of the village with slow beer fermentation—paired with a leisurely beer tasting and braai menu at the new restaurant. The top five microbreweries in South Africa make 3.7 million litres of an estimated 8-million-litre market. Darling Brew, one of the Big Five, has been at the forefront of the craft beer revolution. Its quirky labels are named after endangered wildlife: Slow Beer after the geometric tortoise, Black Mist after the Verreaux’s eagle, Silver Back after the honey badger, Rogue Pony after the plains zebra, and Bone Crusher after the spotted hyena. Home to 40 microbreweries, Cape Town—with a brewing history that goes back to the first licence issued in 1658— is the craft beer capital of Africa. Many of the new bearded brewmasters started out their careers as home-brewers and winemakers, leaving behind high-flying careers in the fast lane. Inner-city breweries in the Mother City include Citizen Beer, Jack Black, Brewers & Union, Riot Beer, Striped Horse, Woodstock Brewery and Devil’s Peak Brewing Company whose aspirational claim is, “Beer as it should be.” Marc Fourie, co-owner of Riot Beer, says: “The public want to be inspired by what they consume. They want something a little less ordinary. This is the same across sectors, not just in craft beer. My business partner David and I fell in love with beer while living in the UK. We couldn’t believe how much flavour and variety existed beyond the lagers back home. We started home-brewing and eventually hatched our plan for setting up a highquality, small-batch facility in Woodstock that would specialise in beers with flavour, namely IPAs [pale ales like their iconic Valve]. “The sector is growing, but it will rely on craft brewers to really up the quality of the product that’s coming out, and push the boundaries of beer making to keep it going. I worked in London as a project manager in the financial sector for many years, but I always wanted to take on my own business venture. The dream is coming true. Our attitude is bold and uncompromising. We work relentlessly hard, and we believe this comes through in our full-flavour beers we produce,” he adds. Woodstock Brewery was started by banker Andre Viljoen, an avid beer lover who returned to South Africa from Korea to start his own brewery business. Head brewer Murray Stephenson
HOME TO 40 MICROBREWERIES, CAPE TOWN—WITH A BREWING HISTORY THAT GOES BACK TO THE FIRST LICENCE ISSUED IN 1658—IS THE CRAFT BEER CAPITAL OF AFRICA.
(a marine biologist), says: “Consumers like the idea of drinking a carefully crafted product that has a story behind it. There seems to be a shift toward these craft products in general. Within the craft beer industry, people are also enjoying learning about the different styles of beer. It gives that added twist to beer drinking, where you don’t have to just try and consume as many light lagers as you can.” Is the craft beer movement still growing? Viljoen says, “It is still on the rise and has a long way to go before it becomes a saturated market. There are still many avenues that the craft beer movement can explore as the drinkers get more and more adventurous. We are producing a number of standout beers that push the boundaries, like our Californicator IPA, Hazy Daze witbier and Happy Pills German pilsner. We don’t shy away from the hops. We recently launched a seasonal range with our hoppy golden ale [Afternoon Delight]. We are also trying new things like barrelageing beers and our Sugarman Belgian Quad, which is 10% and has been in Kanonkop wine barrels for six months.” JC Steyn of Devil’s Peak Brewery Company is another winemaker turned brewmaster. He left an award-winning career at Dornier Wine Estate to join the renovated warehouse brewery and brass brewpub in Salt River, with a brewing capacity in excess of 40 000 litres. “South Africans now want greater variety from their first-choice drink, and craft brewers are perfectly positioned to adapt that ageold recipe to offer something deliciously refreshing and with a great deal more personality. Personally, I feel the consumer is far more interested in artisanal products than, say, five years ago. This is evident in many sectors: from coffee, meats, cheeses and spirits. This has, at the same time, fuelled
the desire for non-mainstream products that also offer more flavour while coupled to an experience. The consumer base is constantly growing. The ethos of craft is making use of the best possible ingredients from around the world. The freedom in craft beer is what makes it so fascinating and adventurous.” Steyn’s dream is to take beer into the space previously reserved for wine: beer tastings and tours, beer guides, beer lists at restaurants and, who knows, perhaps even beer estates. The craft beer revolution that began in the Western Cape has spread to almost every town across South Africa, where you’ll find a microbrewery from Brits to Parys. After working in the beer business in the UK and the Netherlands, Ndumiso Madlala, a qualified chemical engineer, left SABMiller in 2013 to co-found the MadMead Brewing Co. in Soweto—the first South African black-owned microbrewery, and the first and only one in a township. Soweto Gold superior craft lager, made at MadMead’s Ubuntu Kraal Brewery, is slightly sweet and fruity, with a low bitterness that’s part of Madlala’s strategy to attract female drinkers. “Traditionally, in our [African] culture, a woman who drinks beer is looked down upon—and we want to change that perception.” By training only female master brewers, MadMead has revived an ancient African tradition. Upskilling staff with the right talent is one of Madlala’s biggest challenge in growing a 50-strong staff. “It is exciting to know that I’m contributing to the government’s main goal of cutting down on unemployment,” he adds. Look out for craft beers in Gauteng at taprooms such as Capital Craft Beer Academy in Pretoria and Beerhouse in Fourways (which stocks Africa’s biggest range of beers—99 bottled brands). Top microbreweries include Drayman’s, Agar’s, Copperlake Brewing Co., Swagga Breweries, SMACK! Republic Brewing Co., Three Skulls Brew Works and Stimela Brewing Co. And in KZN, keep your eyes peeled for craft brands from Basset Breweries, Nottingham Road Brewery, Shongweni Brewery (home of Robson’s Real Beer) and Mtunzini Brewery in Richards Bay; on the Garden Route, try Mitchell’s Knysna Brewery where Les Mitchell started the movement in 1983. The craft beer market is predicted to grow to 18 million litres by the end of 2017. So cheers to both the drink and the disruptive change it’s going to make in the beer industry!
Darling Brew Tasteroom & Brewery owners Kevin and Philippa Wood wanted to match the laid-back lifestyle of the village with slow beer fermentation.
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getting into the spirit
Small artisanal distilleries are leading the craft gin revival in South Africa
During the Anglo-Zulu War in 1879, British redcoats called the battle site of Gingindlovu: ”Gin, gin, I love you”, after the soldiers’ favourite tipple in the Victorian era. A century later, gin—once known as Mother’s Ruin—is back in fashion worldwide after a long decline of this niche white-spirit category, led by best-selling premium brands like Bombay Sapphire, Hendrick’s and Tanqueray No. Ten. In the UK, sales of premium gin have grown 49% over the last two years. Craft gin now makes up more than a quarter of the resurgent market, with iconic brands such as Blackwoods, Bluecoat American Dry and Monkey 47 (made with 47 botanicals) leading the pack. A new generation of world-class South African gins handcrafted at boutique establishments are making waves on the cocktail circuit at trendy gin bars around the country. Young, passionate entrepreneurs have opened small artisanal distilleries such as Inverroche (using fynbos botanicals), Jorgensen’s (using juniper grown in Paarl), Musgrave, Time Anchor, Wilderer, The Woodstock Gin Company and Triple Three Estate Distillery—all at the forefront of the craft gin revival.
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Experts say this renewed interest was sparked by unusual regional flavours, innovative branding and artisanal techniques, revitalising the beverage in a hip new culture. The first craft gin festival in Cape Town in early 2016 drew scores of young gin lovers. What makes South African gin unique is the use of African botanicals that infuse a local flavour. In 2015 wine and spirits giant, KWV, launched its super-premium Cruxland dry gin, a 100% grapespirit based gin made using nine exotic botanicals: juniper berries, honeybush tea, coriander, rooibos, aniseed, cardamom, almonds, lemon and rare Kalahari truffles.
KWV master distiller Pieter de Bod says, “We wanted to create a special gin with botanicals typical to South Africa. We knew we needed a special ingredient to complement the flavours of the other botanicals.” Anneke Mackenzie, KWV’s global manager for spirits, comments on the huge success story of Cruxland on domestic and international markets: “It’s a great time to launch, as the premium and super-premium gin segment is experiencing substantial growth in South Africa as well as globally.” Hope on Hopkins Distillery, a small artisanal distillery in Salt River, Cape Town, is the brainchild of two dynamic South African
entrepreneurs, husband and wife Leigh Fisk and Lucy Beard, who named their gleaming pot stills Mildred and Maude after their grandmothers. Hope offers a gin experience and tasting in situ at the distillery, where Simone Falconer also makes her iconic Musgrave Gin. “Gin is a highly creative drink: While distilling is chemistry, making gin is more like being a chef, playing with flavours. Gin is enjoying a surge in popularity as distilleries are becoming more inventive with the botanicals used, and consumers start to appreciate the creativity behind a gin, realising each is unique and distinctly flavoured. There is also a growing recognition of the importance of supporting local, artisanal brands,” says Beard. Why did they start up their own gin business? “We were both lawyers by training, and had been working in the city in London. We wanted to come home and start our own business. In Europe, craft gin is extremely popular, with lots of craft distilleries producing highly inventive gins. We wondered whether it could be done in South Africa, did lots of reading, met distillers and realised that most of the craft guys were from all sorts of backgrounds. Distilling was science, but not rocket science. We also had seen how Cape Town and Johannesburg had followed the trends in the coffee and craft beers scenes, so hoped that gin would be the natural progression,” Beard explains. “Gin certainly is a growing business: Several gin bars have opened in Cape Town, and there’s a growing trend for corporate events based around gin tastings as well as people throwing parties with gin bars. Gin-and-tonics are all the rage right now, with different gin and garnish combinations providing an almost cocktail-like experience. There’s been a real mix of ages all getting enthusiastic about gin. We sell mostly in Cape Town, Johannesburg and Pretoria,
but are stocked around the country. “Hope is pretty unique, in that we make two of our gins from scratch, from malted barley that we cook and ferment on site; the third we make from a grape base, all of which we triple-distil before doing a fourth distillation with different botanicals. We make a real classic London dry gin, giving it a twist by using fresh rosemary and lemon verbena; and we make our South African Salt River Gin with indigenous botanicals including buchu and kapokbos; then we do a very savoury Mediterranean gin with lots of olives and herbs, which is unlike anything else in South Africa,” she adds. Time Anchor, an artisanal distillery with a tasting room in Joburg, is one of the rising stars of the South African spirits scene. The brainchild of long-time friends Warrick and Shanna-Rae, their motto is passion, tradition and dedication—family, friends and community. They say, “Our spirits are a labour of love, intellectual curiosity and the commitment to the art and science of craft distilling at the heart of the craft movement.” Taking no shortcuts, they mill, mash, ferment and distil locally sourced
grains in small batches, filling and labelling each bottle by hand. Blaauwklippen Vineyards in Stellenbosch opened a dedicated spirits tasting centre on the estate in 2015, offering samplings of boutique gin and spirits from around the country. Gin, eau-de-vie and grappa tastings are the newest tourist attraction on the farm. Bonita Gouws, the tasting room manager, says: “We aim to be the only gin hub in the Winelands. Some visitors come specifically to do a spirit tasting.” Named after the 333-year-old history of the estate, the new Triple Three Estate Distillery at Blaauwklippen makes three types of artisanal gins in a copper column pot still: a traditional juniper berry gin, a citrus infusion gin using organic lemons, and a unique African gin infused with indigenous botanicals sourced from the Cape floral kingdom—such as buchu and rooibos as well as coriander, galangal, liquorice and almonds. Says cellar master Rolf Zeitvogel, “Gin is one of the hottest things since craft beer. Gin sales have grown dramatically worldwide over the last five years, particularly in gin-based cocktails.” He calls it “the magic of gin”.
Leigh Fisk and Lucy Beard from Hope on Hopkins Distillery say gin is a highly creative drink. “While distilling is chemistry, making gin is more like being a chef, playing with flavours.”
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Next
Wanted
Pedal pushers Two-wheel innovator Biomega has created a new bike with secret powers BY DIANA BUDDS
Photograph by Stephanie Gonot
What you don’t see is what you get The OKO’s battery, motor and wiring are all hidden within the bike’s seamless carbon-fibre frame.
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For nearly 20 years, Denmark-based bicycle brand Biomega has worked to export Scandinavia’s alternative-transit culture to the wider world, in part by recruiting acclaimed designers such as Apple’s Marc Newson and Karim Rashid to make bikes that are just as covetable—and recognisable—as luxury automobiles. “If the bike industry wants to compete with cars,” says Biomega co-founder Jens Skibsted,
“it needs to be able to assert itself by creating brands.” The company’s latest product—an electric bike dubbed the OKO— was concocted by KiBiSi, a design powerhouse led by Skibsted, world-renowned architect Bjarke Ingels, and industrial designer Lars Holme Larsen. The high-end e-bike is geared toward commuters who are considering a switch from four wheels to two. Forged from carbon-fibre material, the OKO cleverly hides its machinery— battery, motor, wiring— within a seamless frame, making it look like a regular bike. The quiet, 350-watt motor helps you pedal, boosting your own efforts by as much as 32km/h for up to 64km per charge. Skibsted hopes the OKO, which starts at $2 295 (around R34 000), will be especially appealing to design-conscious urbanites. “Expressing lifestyle via the objects you surround yourself with is very much accepted in cities,” he says. “It’s important that there are objects for the self-aware urban dweller who cares about commuting in style and in comfort.” The OKO will be available online from May, 1 on Biomega.com and can be shipped to South Africa at additional cost.
Next
My way
(Hard) hats off to women Engineering remains a male-dominated sphere in South Africa. How Naadiya Moosajee is levelling the gender playing field BY MIRIAM MANNAK
In high school, Moosajee discovered her passion for engineering, which she decided would be her future. “I saw how engineering was making the world a better place. To access your right to education, you need to be able to get to school. To access your right to healthcare, you need to be able to get to hospital. That is all engineering,” she says. “That is why I chose a postgrad in transportation engineering. I wanted to improve cities for those who live in them.” Never did she think of her career choice as being odd—not until her first day at university. “I was one of five girls in my entire class,” she recalls, noting that that
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wasn’t the issue. The real problem presented itself during her vacation work period. From being catcalled on site, stalked by a co-worker, and sexually harassed, to not receiving payment for her work as opposed to the male students, and constantly being mistaken for a tea lady, accountant or assistant … Moosajee has experienced it all, and more. At one point, she even considered leaving the field, like so many other female engineers have done. According to the Engineering Council of South Africa (ECSA), only 11% of registered engineers in South Africa are female. Of
those, 70% are no longer practising. The main driver, ECSA says, is how they are treated by male counterparts and superiors. Moosajee concurs: “There is a lot of ageism, racism and sexism out there.” Instead of abandoning her calling, Moosajee decided she wanted to contribute to change. And so, at the tender age of 21 and in her second year, she set up the non-profit WomEng (Women in Engineering) with a classmate. The objective was simple: levelling the gender playing field in South Africa’s engineering sector, firstly by reaching out to high-school
Time for a change
There is still a large degree of sexism in the engineering industry, says Moosajee. She has been catcalled, sexually harassed and mistaken for a tea lady.
N A A D I YA M O O S A J E E
30-SECOND BIO
According to the Engineering Council of South Africa, only 11% of registered engineers in South Africa are female. Of those, 70% are no longer practising.
Tit l e Co-founder, WomEng Serial social entrepreneur Favo u rite q u ote? My dad: “Life is not fair—get over it.” Favo u rite boo k ? Harry Potter! But on a more serious note, Mighty Be Our Powers: How Sisterhood, Prayer, and Sex Changed a Nation at War by Leymah Gbowee. Favo u rite p l a ce to b e? At the dinner table with my family, or in Istanbul.
girls and informing them that engineering is a good career choice for women. “We want to change the mindset around engineering. It is more than hard hats, safety boots and working on construction sites in the middle of nowhere,” Moosajee explains. “Engineering is, in fact, about everything we use and need: from transport and logistics to electronics, clothing and even the lipstick women wear. Engineering is everywhere.” In order to reach more girls, Moosajee and her business partner have branched out into GirlEng, an extensive mentoring
and guidance programme at high-school level. Since its launch five years ago, it has reached more than 10 000 girls. The number of female engineering students has shot up too, Moosajee says. “Today, they make up 40% to 50% of all engineering students in their class.” Apart from opening the world of engineering to young women, WomEng helps South Africa’s engineering sector transform the gender point of view. While some experiences have been good, others haven’t. “Some of the things CEOs have told us about how they see female engineers have really shocked me. Last year, we met with the CEO of a large construction company. He wanted to talk to us about how to improve the retention of his women engineers. Only one out of his 179 line managers was female. Women simply didn’t stick around,” Moosajee says, noting how her suggestion to create and foster a WomEng community—run by and for women engineers—was
H ow d o yo u u nw i n d a n d re l a x? Watching episodes of CSI. Wh o h a s b ee n yo u r b i g g e st i n s p i rat io n i n l i fe? My dad and mom, for different reasons. My dad became an entrepreneur and has been an angel investor. Also Saydinah Khadija, who lived 1 400 years ago; she earned the title of Princess of Arabia for being a formidable businesswoman and breaking all the gender norms that women still grapple with today. D e sc ri b e yo u r id ea l d ay ? Waking up and getting to change the world in weird and wonderful ways. Favo u rite tec h g a d g e t? My iPhone—it runs my life. To p t h r ee t i p s fo r wo m e n i n b u s i n e s s: Follow your passion, be stubborn about your dreams, and surround yourself with positive people and good mentors.
shot down. “He mentioned that he was not going to pay good money to have his women engineers ‘sit around and go cluck-cluck-cluck’. He also said that his company would be okay retention-wise if women would ‘stop falling pregnant’.” While the past years have indeed been challenging at times, there have been many highlights. Moosajee recalls how, during WomEng’s most recent Fellowship Week, she was approached by one of the participants. “Our Fellowship Week is our annual innovation and skills development programme for South Africa’s top female engineering students. A young woman told me she had become an engineer because of the GirlEng programme. Four other girls told me the same. That means we’re doing something right!” The WomEng initiative has done wonders for companies such as Unilever. Says Moosajee, “They managed to retain 26 out of the 28 female engineers this firm recruited through us over the past years because of the culture they created internally. It is because of this attitude that many South African female engineers are doing all sorts of amazing things outside their field.” Although plenty of work remains to be done in South Africa, WomEng is already spreading its wings. The organisation currently has a presence in Kenya, while Mauritius, Tanzania and Turkey are next on the cards. “In the next decade, we want to reach 1 million girls and young women in Africa— and elsewhere,” says Moosajee.
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Fast Company promotion
Transformation through mobility Celebrating 140 year s of innovation, Ericsson is enabling the Ne t worked Socie t y in Africa
When Lars Magnus Ericsson opened his engineering shop in the 13m2 space in Stockholm, Sweden, his starting capital was a mere SEK 1 000. That was 140 years ago. The engineering shop, Ericsson, has come a long way since its humble beginnings. The company has gone on to become a world leader in the rapidly changing environment of communications technology— providing equipment, software and services to enable transformation through mobility. Based on Lars Magnus Ericsson’s belief that communication is a basic human need, the company has gone on to innovate in mobile telephony, Bluetooth, 4G, Internet of Things, and 5G—all of which have contributed to building a multinational company that today employs around 115 000 people and operates in 180 countries. Some 40% of global mobile traffic runs through networks Ericsson has supplied, and more than 1 billion subscribers around the world rely every day on networks managed by the company. With more than 39 000 granted patents, Ericsson is proud of one of the industry’s strongest intellectual property rights portfolios.
E nte ri ng s u b - Sa ha ra n Africa Twenty years after opening its doors, Ericsson entered what is now one of the world’s fastest growing mobile markets: sub-Saharan Africa. Fredrik Jejdling, head of region, Ericsson Sub-Saharan Africa, tells
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the story: “In 1896, Ericsson made the first delivery of fixed-line services in the Cape Colony and Durban, both in South Africa and Nairobi, Kenya. At that time, four telephone exchanges were installed in South Africa between 1896 and 1900, making it Ericsson’s largest market for exchanges outside Europe. In Kenya, Ericsson laid telegraph wires next to the railway from Mombasa to Kisumu, on Lake Victoria, which enabled communications from the coast into the interior. The railway and the communications were key to developing the economy.” Since then, 120 years later, Ericsson now employs more than 3 000 people and operates in 43 countries in 22 offices in the region.
A vi sion of a Networked Societ y Ericsson believes that through mobility, our society can be transformed for the better. New innovations and forms of expression are finding a greater audience; industries and hierarchies are being revolutionised through ICT, and creating a fundamental change in the way we communicate, socialise and make decisions together—thus impacting how, almost every industry, business and individuals play, live and work. The ‘Networked Society’ will fundamentally change the way we innovate, collaborate, produce, govern and achieve sustainability. The combination of mobile broadband access, affordable devices, and the resultant transformation in the way businesses and society operate will yield opportunities for empowerment and inclusion. “Mobility is a driver for industry transformation in Africa,” says Jejdling.
He continues, “Ericsson is excited about its journey in Africa. According to our sub-Saharan African appendix of the Ericsson Mobility Report, WCDMA/HSPA combined with LTE will account for almost 80% of mobile subscriptions by 2021. These numbers excite us. We were here when there were no subscriptions, and now we are here making projections of 100% penetration by 2021. We will be here to usher this market into the 5G era and whatever technologies develop beyond that. We can’t wait to see what the next 140 years will bring.”
Ch a n g i n g i n d u st rie s t h roug h mobilit y Ericsson has been innovating and transforming over the last 140 years, and as the industry and consumer demands have changed, so has its business. From a consumer perspective, its partnership with Sony may still be remembered. In 2011, Ericsson ended this partnership, thus shifting the focus from the handset
Past and future Left: Lars Magnus Ericsson with wife, Hilda. Repairs and small mechanical engineering jobs were the company’s main business during the initial years. Work also included repairs of telegraph instruments. Right: Fredrik Jejdling, head of region, Ericsson SubSaharan Africa, says: “We will be here to usher this market into the 5G era and whatever technologies develop beyond that.”
Future technology— the road to 5G
business. The introduction of mobile data services has enabled access to even more services that benefit individuals and transform industries. Today, the company provides solutions and services that shape mobile networks, support operators with IT transformation, impact smart solutions for industry and society, and provide innovative solutions for an enhanced television and media experience. In the financial sector, Ericsson believes connectivity-based mobile financial services can be a game changer for advancing financial and social inclusion. The company is currently doing a pan-African rollout in several countries with various operators, for which it won an AfricaCom Award in 2015. Since 2015, Ericsson is the Government of Rwanda’s technology adviser on the Smart Rwanda initiative to design and deploy solutions and services required to create a fully functioning knowledgebased society. This partnership will see the deployment of solutions
covering financial services, among others, enabling the creation of a smart society. Also in 2015, the company’s first end-toend subscription videoon-demand content service, NuVu, was launched, marketed in close collaboration with service providers. This solution takes into consideration the preference of consumers for downloaded content instead of streaming services due to evolving broadband services. A core feature of the service is the built-in ability to distribute content to consumers during off-peak periods. This minimises data costs for both operator and consumer, addressing the cost challenge that has so far been an obstacle for video-on-demand uptake in Africa.
Ericsson believes connectivitybased mobile financial services can be a game changer for advancing financial and social inclusion.
Together with partners and leading operators around the world, Ericsson is driving the development of 5G technologies. As with past transitions to nextgeneration technology, 5G will enable much higher performance. This means tremendous flexibility; lower energy requirements; greater capacity, bandwidth, security and reliability; and much lower latency and device costs. The full potential of the Networked Society will be here when 5G is rolled out globally; creating new opportunities for use cases we haven’t yet dreamt of, new markets and radically new business models, many that include IoT applications. With 5G, we’ll have the ability to download a full-length HD movie in seconds, to conduct remote surgery, and to have battery lifetimes exceeding 10 years for remote cellular devices. These historic milestones mark Ericsson’s commitment to the region, and the innovation is testament to it. Its aim today is to continue paving the way for life in the Networked Society, empowering individuals through technology, transforming industries to deliver more value, and advancing society through sustainable development.
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GUTTER CREDIT TK
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Lyft has been eating Uber’s dust for years. Can a series of smart partnerships steer the ‘nice’ ridesharing startup into its own lane? By Rick Tetzeli GUTTER CREDIT TK
Illustrations by Patrick Leger
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Long before there was Uber, 21-year-old Logan Green travelled to Zimbabwe. There, he encountered impromptu fleets of vans that shuttled people around Harare’s chaotic streets. Inspired, he returned to the United States and launched a company called Zimride in 2007. It used Facebook to connect riders and drivers for long-distance trips. John Zimmer had nothing to do with the launch of Zimride, despite the fact that it echoes his name—but when he heard about it, it resonated. Zimmer had become obsessed with the idea of ride sharing in 2006 after hearing one of his professors at Cornell give a lecture on green cities. Can you imagine, Zimmer asked a schoolmate over beers, “this future where these pods would come to your doorstep, and they’d get people around, and you wouldn’t have to drive?” A friend introduced the two dreamers, and before long Zimmer quit his job as an analyst at Lehman Brothers to join Zimride. Their journey has been deeply intertwined with their personal lives. Green used to hitch rides from Santa Barbara to Los Angeles to visit his future wife; one of the first things Zimmer did at Zimride was persuade the woman who became his wife to join him on a cross-country trek he called Zimride Across America. The young execs have become best friends, and Green was Zimmer’s best man. Together, they pivoted from Zimride to Lyft in 2012 and introduced innovation after innovation into the ride-sharing business.
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Photographs by Ian Allen
“We are in the first lap of a fourlap race,” says Lyft president John Zimmer (right), who along with CEO Logan Green (left) pilots Lyft’s strategy.
“We’ve never been closer,” Zimmer says of his relationship with Green when I meet the duo at Lyft’s San Francisco offices. But the 33-year-old Zimmer could just as well be talking about Lyft’s prospects for success. Uber’s headquarters are a nine-minute car ride from where we are chatting, but its presence in the room is unmistakable. Today, Lyft is still a distant No. 2 to Uber, its dominant rival. Uber has many more drivers. It has many more passengers. The company has raised $10.3 billion (R151.1 billion) from investors, at a valuation of $62.5 billion (R917 billion). Lyft has raised $2 billion (R29.3 billion), at a valuation less than one-tenth of that. Uber has launched its service in 68 countries, developed its own R&D facility to speed the arrival of autonomous cars, and is expanding into services to deliver to-go meals, groceries and other goods. Lyft offers rides in the US, ferrying only people from point A to point B. When I ask Bill Gurley—the Benchmark Capital partner who invested early and big in Uber, sits on its board, and often serves as its de facto spokesperson—to explain the
difference between Uber and Lyft, he says: “Here are some differences I know of: Uber is 15 times bigger. Uber is No. 18 in the App store, and Lyft isn’t that.” (It was No. 122 when I checked.) “Uber’s strategy is to be the low-cost provider. Similar to Amazon. A Bezosian strategy.” The Amazon analogy is telling. There is a prevailing view in Silicon Valley that technology-enabled market-places create winner-take-all competitions: think Amazon in e-commerce, Google in search, Facebook in social. The examples are powerful, the logic often deemed irrefutable. Uber is clearly the leader in ride sharing; by this calculus, Lyft must be the loser. Zimmer and Green never talk as if they’re playing for second place. In the past year, Green, the build-it CEO, and Zimmer, the market-it president, have doggedly unearthed a strategy that may well be clever and powerful enough for the company to carve out a strong competitive position. As Lyft worked throughout 2015 to achieve parity with Uber on critical service details like price and wait time, it also developed a strategy to differentiate itself beyond being the ‘nice’, or quirky, ride-sharing service. “I always had this idea that we should try to find a few partners with similar values whom we could have long relationships with,” says Zimmer. Between July and January, they put together three remarkable partnerships—with Starbucks; with an international coalition of leading ride-share companies including China’s Didi Kuaidi; and with Detroit behemoth General Motors. Together these deals create a distinct picture of how Lyft can compete with Uber. Lyft’s goal: establish itself as a distinctive, values-based alternative—the Nordstrom to Uber’s Walmart, the Virgin to its rival’s United. “We didn’t get into this to replace taxis,” says Zimmer. “That’s just a $12-billion [R175.4-billion] market in the US. We want to create an alternative to car ownership, which is a $2.15-trillion [R31.4-trillion] market in the US alone,” adding up the annual costs of buying, maintaining and insuring vehicles. “It’s totally inefficient. The typical car is used for 4% of the day and usually by one person. So that’s 1% utilisation of the second-highest household expense in the country.” It’s highly unlikely that a single company would reap all the rewards of disrupting a market such as this. “We really do expect more change in the next five years than we’ve had in the last 50,” says GM president Dan Ammann, who brokered the deal with Lyft. This isn’t a pure technology play but a case of software meeting an established and mighty industrial sector. Consider the range of competitors involved in this particular transformation—not only Uber and Lyft but also GM, Ford, Tesla, Toyota, BMW, Volkswagen, Apple, Nvidia and Mobileye, among others—and the winner-take-all scenario becomes even harder to envision. The ride-sharing services are at the forefront of the most significant change to car transportation since Henry Ford introduced the assembly line. And Lyft isn’t about to cede the track to Uber. “We’re like that line I saw on an episode of Silicon Valley,” adds Green, also 33, his passion palpable despite his boyish, diffident demeanour. “ ‘I don’t want to live in a world where someone else makes the world a better place than we do.’ ” He’s joking, but Zimmer nods approvingly. After four years of preliminary heats, the race is finally on.
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WE’RE LYFT PEOPLE Ten of the high-profile investors and partners who have allied behind the United States’ No. 2 ride-sharing firm—to stop Uber
FIGHTING POWER WITH COFFEE In the first half of 2015, Uber raised a billion dollars (R14.6 billion) from investors, secured another $1.6 billion in debt financing, lured some 50 engineers from Carnegie Mellon to launch its own robotics facility, and acquired a digital mapping company. It was a dominant burst of activity from a ruthless competitor. Zimmer went to Starbucks. Zimmer had long admired Starbucks CEO Howard Schultz for his management style and values, and wanted to meet him. But how to arrange the right entrée? A friend from Zimmer’s Wall Street days introduced him to Bill Bradley, the former New Jersey senator and basketball star, and current investment banker and Starbucks board member. When he sat down with Bradley, he stressed that “the two things almost every person needs in the morning are a cup of coffee and a ride to work.” Then he explained the ways in which he thought Lyft’s values, embodied by its “We treat you better” mantra, fit with those of Starbucks. Bradley, impressed, arranged a meeting with Schultz. Zimmer and a couple of Lyft execs flew to Seattle on June, 25 for a dinner at Wild Ginger, a popular local Asian fusion restaurant. Nervous, Zimmer decided just before walking in that he didn’t like the colour of the shirt he was wearing. He ducked into the toilet of the ice-cream shop across the street to change into another. Schultz recalls being less focused on Zimmer’s sartorial choices than his humanity. “I’m in the fortunate spot of getting to meet lots of young, aspiring entrepreneurs,” says the 62-year-old CEO of Starbucks. “Every once in a while, one hits an emotional chord with me. I quickly came to see a lot in John that reminded me of me. His ambition to build a great company is obvious, but he wants to build one that can last and serve the public as well.” “Howard started and ended the conversation with, ‘What can you do for my baristas?’ ” Zimmer recalls. “It reaffirmed our focus on the drivers.” Schultz adds, “The equity of Lyft’s brand is the driver, just as the equity of Starbucks’s brand is the barista.” A deal was announced just four weeks later. For now, the partnership is largely focused around connecting Lyft with Starbucks’s rewards programme and creating perks for drivers: Lyft drivers automatically get Gold status in the Starbucks Rewards loyalty programme, while Lyft passengers earn points in the rewards programme with each ride. Soon they will be able to buy a cup of coffee for their driver via a tab in the Lyft app. Starbucks baristas can also get the occasional free ride to and from work via Lyft. Both Schultz and Zimmer say this is only the first phase, with new developments coming soon. “We are having discussions about how we can design the best possible experience to get both your coffee and your ride,” Zimmer says. How might this help Lyft in its competition with Uber? “They can’t possibly create something on their own that has thousands of great locations that are almost bus stop–like,” Zimmer says, “and they can’t invent the kind of ritual of coffee the way Starbucks has.” When Lyft first launched its carpooling service, Lyft Line, it tested ‘hot spots’ for pickup. Might the concept re-emerge at Starbucks’s 12 000-plus locations? Zimmer isn’t saying, but “there’s no other partner out there that can provide this kind of scale or future opportunity,” he notes. “We see this as a better way to get a bigger part of the ultimate market.” “John and Logan are building a long-term business,” says Schultz of Lyft’s dreamers, “not something that’s just for today. Starbucks will do as much as we can to support them.”
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Marc Andreessen Co-founder and general partner, Andreessen Horowitz
The influential VC made his R878-million investment in Lyft after losing out on investing in Uber.
Carmelo Anthony Co-founder and partner, Melo7 Tech Partners
The NBA star has dubbed himself “the new digital athlete”, adding Lyft and a handful of other startups to his portfolio within a year of launching his VC firm.
Mary Barra
CEO, General Motors
GM’s R7.3-billion bet on Lyft makes it the first car company to partner with a ride hailer. They plan to co-develop ondemand, self-driving vehicles.
Prince al-Waleed bin Talal Chairperson, Kingdom Holding Group
The Saudi prince participated in Lyft’s latest funding round, adding a R1.4-billion investment to a vast portfolio that includes Apple and Twitter.
Carl Icahn
Founder, Icahn Enterprises
The activist investor surprised the industry with a R1.4-billion investment in Lyft last year, calling it a “tremendous bargain”.
Jean Liu
President, Didi Kuaidi
Uber’s biggest rival invested R1.4-billion in Lyft and created a strategic alliance last year that lets the two companies share riders across borders.
Jack Ma
Founder and executive chairperson, Alibaba
A major backer of Didi Kuaidi, the Chinese commerce giant has sought to expand its foothold in the US via strategic investments.
Pony Ma
Founder and CEO, Tencent
After forging an unlikely alliance with rival Alibaba to merge two Chinese ridehailing companies into Didi Kuaidi to blunt Uber, Tencent then backed Lyft in a funding round last year.
Howard Schultz Chairperson and CEO, Starbucks
The progressive CEO endorsed the ridesharing service last year, orchestrating a customer-loyalty partnership with Starbucks and declaring, “Lyft is the company for us.”
Mike Shinoda and Linkin Park
Founders, Machine Shop Ventures
The rock band opened its VC firm last year to expand its brand and counted Lyft as one of its initial investments, along with Shyp and Robinhood.
A WORLD OF FRIENDS If the Starbucks deal offered Lyft access to an expanded base of like-minded, mostly millennial customers (according to Lyft’s internal data, Starbucks is its passengers’ favourite coffee-shop destination), its next partnership took aim at Uber’s extensive (and expensive) international expansion. Rather than raise and then spend billions to attract riders overseas—Uber CEO Travis Kalanick admitted in February that Uber is losing $1 billion a year to compete in China—Lyft took a restrained, tactical approach. Eight weeks after announcing the Starbucks arrangement, Zimmer and Green unveiled an alliance with Didi Kuaidi, China’s biggest ride-share company, which also agreed to invest $100 million (R1.4 billion) in Lyft. Under the agreement, Didi’s customers would be able to order Lyft rides via Didi’s app when visiting the US, and vice versa. In early December, the alliance expanded to include the leading ridesharing services in Southeast Asia (Grab) and India (Ola). Suddenly, Lyft had the makings of an enviable global footprint. Zimmer and Green say they have preferred the idea of partnering ever since Alibaba signed on as an investor in 2014. But only after the leading Chinese ride-sharing services Didi Dache and Kuaidi Dache merged in February 2015 was a deal a possibility (the two were backed by rivals Tencent and Alibaba, respectively). A month later, Zimmer, Green and Wang Gang—an Alibaba executive and Didi investor—sketched out on an oversize sheet the network effects they believed would expand their respective businesses. Connie Chan, a partner at Lyft investor Andreessen Horowitz, translated when necessary. “Wang would go back and forth in Chinese and English,” remembers Zimmer, “but when he got really excited, it was all in Chinese.” In April, Zimmer made a last-minute trip to visit Didi Kuaidi CEO Cheng Wei in Beijing. “They had built a great business focusing just on China,” says Zimmer of Didi. “This alliance is the right thing for our users, who will get the very best coverage, and for our investors, who don’t have to watch us spend billions of dollars on businesses that might go to zero.” The alliance, he adds, “allows us all to focus our investment and capital on the market where we can make the most profit, where we have local expertise.” While the nature of the partnership puts a ceiling on the revenue Lyft could make in these international markets, it allows Lyft to sidestep the headaches of being an American company trying to crack China, India and Southeast Asia. Anthony Tan, Grab’s Singapore-based CEO, ticks off just a few of the local quirks he contends with: language and dialect barriers; cash as the dominant form of payment; the critical importance of bike sharing along with car sharing; and government regulations that would make any American disrupter quake. The global partners promise that, by the end of this year, customers will be
“John and Logan are building a longterm business,” says Schultz. “Starbucks will do as much as we can to support them.”
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able to use their native app to hail a ride in each of the four markets. As with the Starbucks deal, this is merely a first step. Zimmer and Green say they are in constant touch with their foreign counterparts (via WeChat), and friendships have started to develop. All the key players—Green, Zimmer, Tan and Didi Kuaidi president Jean Liu—are in their thirties and share the camaraderie of peers.
THROUGH THE WINDSHIELD On November 17, 2015, Zimmer walked on stage at the LA Auto Show to give a speech that he called, subtly, “Ending Car Ownership As We Know It.” After spending 13 minutes telling the world’s automakers why their business was about to disappear, he went off with Ammann, president of GM, to seal the most significant partnership to date between an automaker and a ride-sharing service. The two had met a few weeks earlier at Lyft’s offices, when Ammann was in town for a Hewlett-Packard board meeting. Zimmer had had low expectations; the two companies had then been in discussions about how Lyft drivers could get better financing on GM vehicles. (Uber made such a deal with GM in 2013.) “We’ve had conversations with other car companies and they’ll talk about mobility [the academic term for alternatives to car ownership] and press announcements, but with Dan it was actually meaningful,” Zimmer says. “I was surprised that GM was so aligned with our vision.” Zimmer told Ammann that if GM really wanted to work with Lyft, it should invest in the company. The get-together after Zimmer’s auto-show speech lasted more than three hours. Ammann agreed to lead Lyft’s next funding round, and GM eventually put in $500 million (R7.3 billion). Again, the specifics came together quickly, in just a few weeks, with Zimmer weighing in via video-conference rather than travelling to Detroit, because his wife was about to give birth. (As it happens, Green and his wife, Eva, had twins last year.) GM, the 108-year-old manufacturer that was, for many years, the biggest corporation on the planet, acknowledges its basic way of generating revenue is about to undergo a monumental shift. “Our customers are demonstrating to us through their actions that while they still want the convenience of a car, they don’t want the hassle of ownership, particularly in urban environments,” explains Ammann, a 43-year-old New Zealander with a background in investment banking. “We believe ride sharing and car sharing will grow significantly, and the first deployment of autonomous cars will be into ride-sharing programmes, not to individual customers.” That’s an astonishing quote, because in 2015 Detroit’s Big Three sold more cars than ever before. If Ammann is right, history may view 2015 as it does 1920, when, as Barclays analyst Brian Johnson has pointed
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out, horse ownership peaked in the US. The Lyft deal is a savvy hedge against the glue factory. The alliance was announced in San Francisco on January, 4. At first, the two companies will collaborate mostly on building a set of rental hubs where drivers interested in working with Lyft will be able to rent GM cars on the cheap. The first of these, Express Drive—under Lyft and GM’s car-sharer brand, Maven—was launched in Chicago in March. The headlines about the Lyft/GM deal have focused on the other aspect of the partnership: the two companies establishing a network of autonomous cars. The Chevy Bolt, GM’s 2017 300-kilometre-range electric car, may fit well with that plan; perhaps it will sell primarily into ride-sharing fleets rather than to individuals. An adapted Bolt would work especially well for intracity transportation, those 15-minute, 5.5km rides that represent the bulk of Lyft’s and Uber’s jaunts. Zimmer and Green believe autonomous cars will start serving this role in just three or four years, spurred in part by urban millennials who are not buying cars at the same rate they used to. (According to the University of Michigan’s Transportation Research Institute, just 69% of 19-year-olds in the US even have driver’s licences— down from 87% in 1993.) Whether autonomous cars, the next wave of transformation to hit the personal transportation business, will arrive right on the heels of ride sharing, or years later than Zimmer and Green predict, is a matter of much debate. “This isn’t just about some app,” one Lyft employee told me over lunch. Safety is an issue, along with many others: whether riders will pay by the kilometre, the hour, or some combination of the two; whether riders will subscribe to a car service, the way we subscribe to MTN or Vodacom for cell service; or how many people will continue to want to own their own vehicle. There’s also the vexing problem of what happens to the drivers, who Lyft says are the key to the community it’s building around its brand. Zimmer insists Lyft will still be guided by its priority of “treating people well”, but in this case the inexorable efficiency of technology may make that promise very difficult to keep. Zimmer and Green have patched together a strategy that fits their personality and ideals, and also sets Lyft up as a clear alternative. But the future will be as challenging as the past three years, “which have felt like 10”, says Zimmer. Green adds, “It’s good that we have such a foundation of working together. We have that shorthand of communication, and the trust.” That word—trust—came up repeatedly in exploring Lyft’s partnerships, and it’s the answer to the scepticism I heard about Lyft. As one venture capitalist asked me, “Are these real deals, or just press releases?” Zimmer and Green have explicitly sought out like-minded souls, the same way they found each other. “Logan’s been the best thing: having a business partner you trust completely with everything,” Zimmer says in response to Green’s compliment. That’s what they believe they now have with Didi Kuaidi, GM, Grab, Ola and Starbucks. That’s what they’ll need to survive.
“Our customers are demonstrating that while they still want the convenience of a car, they don’t want the hassle of ownership,” says GM president Ammann.
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Not just a pretty skate “Can I use it, and is it good to look at? Once you have those two, it’s beautiful,” says Dillion Phiri about Lingeveldt’s hardwood cruiser.
Old-school cool Skateboards are back—and they’re more beautiful and functional than ever
According to Alpha Longboards founder and shaper Kent Lingeveldt, skateboarding is fast becoming a massproduced business—with machine-made high-tech gadgets—rather than a sport. In his Woodstock workshop, Lingeveldt is taking the art of skateboarding back to its origins. Born and raised on the streets of Cape Town’s Cape Flats, he says: “Let’s not forget where we came from. We don’t need millions of rands worth of stuff to have fun.” Every board is hand-cut, shaped, sanded and finished by Lingeveldt himself, and many are decorated with custom artworks. The longboards have gained acclaim in the country; his hardwood cruiser was nominated for Design Indaba’s 2016 Most Beautiful Object in South Africa competition. When Dillion Phiri, founder and creative director of Creative Nestlings, was asked to participate in the Indaba’s annual
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search to find an object that defines beauty, he didn’t even hesitate before naming this particular Alpha longboard. “I choose things that have to do with experience,” says Phiri. “Kent’s board is really South African to the core; the wood he is using, the shaping of it. Cape Town is a great place to skate, and he shaped it for that.” The hardwood cruiser is not one of Lingeveldt’s more familiar longboards: It is shorter, lighter, and made from a single alien KwaZulu-Natal hardwood that he sourced from his workshop partner, furniture designer Cameron Barnes. “People normally get rid of it [the wood], because it’s not indigenous to us. So it’s nice to use this wood in a positive way, not a negative way,” notes Lingeveldt. The board also represents a move toward the conscious choice of using non-motorised transport in South Africa’s cities. It merges a simple aesthetic with an important function. “Can I use it, and is it good to look at? Once you have those two, it’s beautiful. You’re done,” says Phiri. The boards retail for between R700 and R870 (without artwork), and can be purchased online at Alphalongboards.com.
THE SKY’S THE LIMIT 58 FASTCOMPANY.CO.Z A MAY 2016
With world-changing innovation in travel, tourists can expect adventures aplenty beyond their wildest dreams—from VR guides to on-flight shower spas By Gabriella Rego
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The travel industry is as diverse as it is intriguing. Innovation takes place daily—and in many forms, big and small. Take Airbnb, the cool kid on the block; the hipster of the travel industry. (Well, before it became mainstream, anyway.) It’s a prime example of a game changer that flipped the travel space on its head. Its concept and business model got people talking. Engaging. Reacting. It shook up the industry. Airbnb didn’t invent something new; it simply found a new way of doing something old. That’s innovation. When the Wright brothers nailed their first successful human flight on December 17, 1903, I don’t think they ever imagined the type of innovation that would come out of that incredible feat. One of the biggest success stories within the aviation space in recent times is that of Emirates. I, for one, have followed the airline’s journey intently over the past few years, and its approach to innovation is a fascinating one. Let’s take it back for a moment to put things into perspective. On October 25, 1985, Emirates flew its first routes out of Dubai with just two aircraft—a leased Boeing 737 and an Airbus 300B4. It has since evolved into the world’s largest international airline, serving 150 destinations in 80 countries across six continents. Emirates currently covers 37 cities around the world, with the iconic double-decker A380 (a beauty of a beast) that features its trademark on-board lounge, shower spa and industry-leading first-class private suite—making it the first airline to introduce these elements. In 2015, Emirates marked 30 years of operations globally, and 20 years in South Africa. That’s impressive growth by any standard. It then begs the question: How big a part has innovation played in Emirates’s approach over the years? “The aviation industry has always been regarded as a pinnacle of human ingenuity and innovation, and continues to reinvent itself,” says Fouad Caunhye, Emirates regional manager for southern Africa. “Innovation is reflected in everything we do. The brand has always been a market leader, providing products and services that integrate the most advanced developments to meet our diverse global customers’ needs. For instance, Emirates was the first airline to introduce AVOD [Audio Video On Demand] in all seats, in all classes, and first to offer over 2 000 channels of audio and visual entertainment on demand. Emirates passengers also had the pleasure of being the first to have in-flight calling on a commercial aircraft.” The airline recently unveiled its Business Class seat for its Boeing 777 aircraft. The design and shape of the new seat was inspired by the interior of a modern sports car, captured in the diamond stitch pattern
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of a light-grey, full-leather cover, ergonomically designed headrest, and its sleek overall look and feel. Not only are airlines finding new and creative ways to transform the travel experience but destinations are seeing the need of upping the ante in innovative ways, too. One just needs to look at Dubai—with its man-made islands, tallest building in the world, and Internet City—to see destination innovation at its best. Dubai has seen extensive growth and development over the past 20 years alone, and this doesn’t seem to be slowing down any time soon. In 2013, Mohammed bin Rashid Al Maktoum, VP and prime minister of the
Enjoy your flight A first-class private suite (below) and shower spa (right) are trademarks of Emirates airline’s double-decker A380.
United Arab Emirates, and ruler of Dubai, unveiled a new development project known as Bluewaters Island. Currently under construction near Jumeirah Beach Residence, the island will feature the $270-million (R4.1-billion) Dubai Eye, a 210-metre tall Ferris wheel that will offer panoramic views of the city’s coastline and landmarks such as the Burj Al Arab hotel, the Palm Jumeirah artificial archipelago and the Burj Khalifa skyscraper. When completed, the Dubai Eye will be the tallest Ferris wheel in the world—surpassing even Staten Island’s New York Wheel to be opened in 2017. This is but one recent example of how Dubai is confidently diversifying and widening its overall appeal as a tourist destination while enhancing the long-term attractiveness of the emirate. Ian Albert, regional director of Colliers International in the UAE, notes that anything that continues to add to diversity is a good thing, as is the case with Dubai’s constant developments and innovation. “In order to grow as a tourist destination, it is not the size but it is the ability to constantly bring something new to get people to return for the second, third and fourth time.” There are many other destinations, travel operators and brands that are challenging the status quo, and are committed to driving innovation because they realise that
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in travel, it’s all about the user experience and journey. The Travel Corporation (TTC), a travel and leisure group operating in 70 countries around the world, is a prime example. The brands under TTC’s banner in South Africa include Insight Vacations, Trafalgar, Uniworld Boutique River Cruise Collection, Contiki and Busabout—each of which sees innovation differently and implements it in its own style. Theresa Szejwallo, MD of TTC in South Africa, points out that if you’re following the crowd, you’re certainly not being innovative. “I love that The Travel Corporation takes this seriously—so much so that we have an internal competition that spans the globe to search for the most innovative ways to make travel effortless for our guests and profitable for our company.” Getting employees involved in contributing ideas that could drive innovation is one avenue. Technology is another. Integrating electronic devices and apps into the travel experience has become a big part of what separates the good from the great. Emirates continuously invests in technology to roll out initiatives that
streamline the customer experience, including enhancements to its mobile sites and apps to simplify the customer journey. Contiki, the well-known group-travel company for young people aged 18 to 35, is another brand confidently embracing tech and using it to its advantage by means of a virtual-reality headset. “For Contiki, the use of virtual reality has been in the pipeline for some time,” says Kelly Jackson, GM of Contiki in South Africa. “In 2014, we identified the technology as a new, exciting and completely immersive way to show product offerings at trade shows. That’s where the idea started. And as with any innovative idea, it evolved into something bigger—which now serves potential clients and travellers.” Also embracing tech in travel is Uniworld, which has brought the reality of its luxurious ship, S.S. Maria Theresa, to life with the launch of its very first VR app. With this app, travellers are able to immerse themselves in Uniworld’s luxury on-board experiences before making a booking.
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Travellers are provided an opportunity to step beyond the pages of a brochure and get a true taste of the travel experience with each brand. “The VR gear really helps us tell our story and to paint the picture of a destination. All the content in our videos has been created by the global Contiki team, and is authentic, awesome and engaging in the way it allows travellers to experience the destinations they can visit before booking an adventure,” adds Jackson. In a sea of sameness, it’s vital for brands to strive for innovation to provide a new type of travel experience and stand out in the tourist’s mind. Yes, technology is a big driver, but at times, innovation comes in the form of the human element and interpersonal experiences. TTC’s flagship brand, Trafalgar, introduced its Insider Experience five years ago to differentiate its
Virtually there Kelly Jackson, GM of Contiki SA, says the company’s VR gear “allows travellers to experience the destinations they can visit before booking an adventure.”
I N T E G R AT I N G E L E C T R O N I C D E V I C E S A N D A P P S I N T O T H E T R AV E L E X P E R I E N C E H A S B E C O M E A B I G P A R T O F W H AT S E P A R AT E S T H E G O O D F R O M T H E G R E AT. products from those of its competitors. “Our guests experience a distinctive and authentic guided holiday. We take them into the homes of locals for lunch or dinner. They stay in authentic accommodation that is unique to the area they’re travelling through. Ashford Castle in Ireland, once owned by the Guinness family, is an example of this for travellers to that country,” explains Szejwallo. “We have also transformed how travellers experience a destination by using local experts and uncovering cultural insights.” In addition, TTC has a global team who service clients around the world on a 24-hour basis. The
success of this service affirms that one should never underestimate the human touch. An innovative idea needn’t have rocket ship proportions, or even be anything tangible. Often, it’s the simplicity of an idea or experience, and how it is executed, that shakes up an industry. For Airbnb, that big idea was simply using the right design to overcome the ‘stranger-danger bias’ among consumers. For Dubai, Emirates and The Travel Corporation, it was finding new ways to enhance the consumer experience that keeps travellers coming back for more, time and time again.
i D SR U 5 tech innovations that will change your life in 2016 BY
Kate West
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i pT O N AHEAD
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As a species, our appetite and drive for innovation have led us to some of the most incredible a d va n c e s i n h i s t o r y. From the invention of paper and the powerful antibiotic penicillin, to the quantum computer and the humble coffee-cup sleeve (whose creator now sells over one billion of his patented Java Jackets every year, by the way), we’ve had some pretty epic light bulb moments over the years. When the Internet was ‘born’, it seemed we were at the pinnacle of our ingenuity. Could it get any better than being able to communicate across the seas without getting off one’s seat? Cue email, emoticons, the World Wide Web, weblogs, Google, VoIP and, eventually, social media. Much of our life is run online now as we work, socialise and project-manage through apps and other platforms; yet the digital space is always shifting, expanding, creating room for more. Every week brings new advances in tech, big and small—but what’s really disrupting the industry, and what’s mere fluff?
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1. VIRTUAL REALITY IS FOR EVERYONE. Until recently, VR technology was largely unavailable to the public. Smartphones have changed everything: With high-definition cameras, GPS, Bluetooth, touch- and screenrotation functionality, as well as enhanced processing power, the smartphone is fully capable of running VR software. This not only makes for a seamless VR experience but also enables access to anyone with a mobile smart device. Techies around the globe have been looking forward to the release this year of big-brand VR headsets from HTC, Sony and the Facebook-owned Oculus. Robust user experience testing paired with a healthy dose of competition means we’re in for an epic VR experience. At home, consumers will be able to play lifelike online games; users will be able to learn practical skills in real time instead of in theory— great for kids learning sports or students needing to refine technique; and training simulators will no longer be reserved for astronauts and pilots, but firefighters, doctors, engineers and disasterrelief professionals will be able to practise dealing with occupational curve balls, too. (See article on page 72 for five ways in which VR will reshape industries.) As a fully immersive experience available to anyone with a smartphone, the VR revolution will change the way we work, learn and entertain ourselves.
2. SHARING ECONOMIES HELP US OPEN OUR WORLDS. Thanks to innovative companies like Uber, Airbnb and Gumtree, the concept of sharing economies is taking off in a big way. What makes these companies revolutionary is that they allow the average guy or gal on the street, who isn’t making enough money in his or her day job, to turn their assets (such as apartments, cars, appliances etc.) and skills into a means of passive income. It’s all about access. Most people, especially
millennial consumers, can’t afford to stay in hotels, buy sports equipment or hire employees at their startup. Sharing communities are so powerful, because people can trade goods for goods—and get the experience, knowledge or help they need at a fraction of what it would usually cost using traditional service providers. It’s genius, and a mega disruptor for conventional business; traditional companies will be competing with consumers who rent out their goods for a small fee, a bottle of wine or even a basket of home-grown vegetables. Who can compete with that?
Real-world experience VR is not only for gamers– firefighters, doctors, engineers and disaster-relief staff will also benefit from training simulations.
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Industrial revolution China plans to instal robots in its factories to cut expenditure and make production lines faster and more cost-effective.
3. USER-EXPERIENCE SCIENCE INFORMS DESIGN. For those new to the concept of UX, think of it as a digital product’s very first impression on a user. Essentially, it is how the user feels when he or she interacts with it (a website or app, for instance). It’s obvious why this is integral to brand adoption and conversion: There’s a lot of competition out there—if a product is unattractive or difficult to use, users will spend their clicks somewhere else. It’s not news that the marketing landscape has changed drastically over the last decade. Digital communities have influenced the way we buy, sell and strategise, and the consumer is now the head of the business—not the product, nor the CEO. While some companies were slow to realise this shift, for brands that are at the forefront of their fields, consumer behaviour intelligence now drives all their business: from product concept and design, to marketing execution and delivery. Tech companies are pouring funds into consumer research, conducting user testing, marrying findings with the relevant human interface guidelines and using this precious data to advise on their product design. According to UX Motel: For every dollar spent on UX design, there’s a $100 (around R1 500) return on investment. That’s a lot of bang for your buck. Our new reality is that consumer attention is a commodity, and that intelligent UX design is no longer an option—it’s a top priority.
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4. GROUNDBREAKING DEVELOPMENTS IN ARTIFICIAL INTELLIGENCE AND ROBOTICS MAKE OUR LIVES BETTER. The fields of AI and robotics have never been as prolific. Last year, international competitions such as Amazon’s Picking Challenge, the DARPA (US Defense Advanced Research Projects Agency) Robotics Challenge and the RoboCup pushed innovators to their creative limits, and we were awed by robots that can pack shelves, operate in disaster situations, and perform as proxy surgeons in remote locations. Despite films like Terminator, The Matrix and I, Robot that put the fear of machines into us, the industry is making huge leaps in robotic capability in a positive way. China will invest $154 billion (R2.3 trillion) in the installation of robots in its factories—replacing human workers in an effort to cut expenditure and make their production lines faster and more cost-effective. Robots will be able to learn from the Internet and each other, thanks to new algorithms. With terrorism a global threat, the call for smart drones to monitor our skies is becoming clearer and louder. Major software enhancements and drone functionality mean this could be the year we have them hovering over us. Nor will it be much longer until we have robotic armed forces accompanying soldiers into war zones. While there are still many milestones to reach in this science, experimentation and field testing are gaining ground, and developers are using glitches to learn from and make adjustments. Despite the setbacks that Google faced with the testing of its self-driving cars, it’s only a matter of time before the kinks are ironed out and it moves on to the next frontier.
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PASSWORD PROTECTED You r f i rst l i ne of de fe nce aga i n st cyb e rc r i me i s a st rong, se cu re pa ssword . He re a re some t ips to he lp st y m ie h ac ke rs WiFi–connected toys and web cams are extremely vulnerable. Make sure your WiFi password is tight, and use reputable antivirus software.
5. CYBERCRIME IS A MAJOR THREAT TO ALL . Imagine your child is playing with and chatting to a toy, when the toy starts talking back—and not in a nice way. When hackers breached digital toymaker VTech’s network last November, exposing the account information of 6.4 million children around the world, they proved this is entirely possible. Hacking is rifer than it’s ever been, and last year saw some really big attacks. The US Office of Personnel Management had the sensitive details of more than 21 million people stolen, as well as the fingerprint files of 5.6 million federal employees. The controversial website, Ashley Madison, was the laughing stock of the Internet when it was hacked and the data of 37 million users released publicly, along with credit card information and login credentials. Other hacking victims include Experian’s T-Mobile customers, the Internal Revenue Service, LastPass and CIA director John Brennan. What these shocking breaches have taught us is that we need to tighten up security in an innovative way. Hackers and cybersecurity firms are neck-andneck in the race to get ahead of the game—and with a predicted 30% increase in connected devices in 2016, there’s a lot of work to be done. What kind of criminal ingenuity do we have to watch out for? ‘Headless’ devices (ones that lack a graphical user interface) such as smartwatches, smartphones and medical hardware will be the target destination for
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Headless worms, which can propagate from device to device undetected and cause enormous damage. Hackers need to find ways to cover their tracks, so software that’s designed to breach, steal and vanish before the break is even discovered—ghostware—is on their radar as much as ours. Cloud jailbreaks will become more frequent as more users migrate to virtual storage. The integration of mobile apps and devices with personal and corporate cloud space means that once hackers have compromised the vulnerability on host systems, not only can they hold your data hostage but they can destroy your smart devices as well. Hitesh Sheth, president and CEO of Vectra Networks, said in a recent interview that cybersecurity firms need to think outside the box and spend more time developing software that tracks hackers once the inevitable breach is made and alerts security immediately—as opposed to focusing simply on firewalls. With all these extraordinary developments hatching now, it’s hard to imagine what we’ll be looking at in 2017. It’s exciting to know that much of what’s mentioned here will be old news by then and we’ll be wowed by other unprecedented innovations. Here’s to mankind leaping forward in the online frontier! Kate West is head of digital learning at Shift ONE Digital, a Cape Town– based digital and online marketing agency.
Do not store your passwords virtually. If you keep a password document on your PC, do not name it “password”. Give the file a name that’s completely random and has nothing to do with security. Just don’t forget what it’s called! Have a different password for each platform you use. Change your email password once a month. Your passwords should contain as many variables as possible, and be personal. Take a look at the most used—and least secure—passwords of 2015 as compiled by SplashData: 10. baseball 9. 1234567 8. 1234 7. football 6. 123456789 5. 12345 4. qwerty 3. 12345678 2. password 1. 123456
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Productivity 1
Total immersion How virtual reality will reshape industries
Live events Though most VR content is pre-recorded, live sports and entertainment broadcasts are on the way. NextVR has already tried it with the Golden State Warriors’ NBA opener last October and the Daytona 500 in February. Universal and iHeartRadio are partnering to live-stream a handful of concerts this year. 2
BY DANIEL TERDIMAN
Rea l e state
Illustration by Koyoox
With its proprietary cameras and app, Silicon Valley–based Matterport has helped real estate companies such as Redfin and Beverly Hills’ Altman Brothers create interactive 3D models for thousands of listings—offering buyers an easy way to experience open houses. Hotels are also using Matterport’s technology for virtual room tours. 3
Fa sh ion New Zealand–based 8i is the pioneer of volumetric VR, which allows viewers to move freely throughout a scene, making it possible to see people—and what they’re wearing—from any direction. The company’s not discussing its partners yet, but has been in talks with a number of major fashion players.
Med icine British startup Medical Realities created its Virtual Surgeon training tool to let novice doctors experience operations through the eyes of a surgeon. VR HealthNet is developing virtual-reality modules for nurses and other medical professionals aimed at helping them internalise certain procedures without any risk to patients.
Larger than life The VR market—hardware and content—could be worth more than R450 billion by 2020.
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It’s rare that a consumer technology is a giant leap forward rather than the next iterative step. VR represents just that kind of leap. With the April launch of the Oculus Rift and HTC Vive, as well as the imminent release of Sony’s PlayStation VR, high-end virtual reality has arrived. Add to that lower-end headsets like Samsung’s Gear VR, Google’s Cardboard and many other players, and it’s clear that 2016 is the year the technology goes mainstream. While none of the hardware makers are promising to sell millions of units this year, estimates peg the VR market—hardware and content— at $30 billion (more than R450 billion) by 2020. It’s not just gaming and entertainment that are poised for transformation. Here are some of the most interesting—and potentially lucrative—ways VR is being deployed.
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Milita r y Designing simulations and training for the armed forces is a big business—as much as $9.3 billion (nearly R140 billion) globally, according to the military contractor, CAE. Britain’s Plextek is developing VR training programmes for battlefield medics, while Korea’s DoDAAM has created a paratrooper trainer for the Rift.
David Paul Morris/Bloomberg via Getty Images (woman); Timothy A. Clary/AFP/Getty Images (Martin); Getty Images (glove)
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Lessons learnt
Connecting the dots Bevan Ducasse’s only burning ambition was to be an entrepreneur. Now CEO of the highly successful wiGroup, he shares why he chose this path
It was Steve Jobs who said, “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.” Each of us has ‘dots’ in our lives that seem insignificant at present; however, I believe that if we embrace these experiences, and have faith that they’re there for a reason, we start to realise how they shape who we are and how they can lead to something extraordinary. Taking my cue from Mr Jobs, I’d like to share these four short stories that illustrate the things that have aided me in my business journey. It’s my hope that in some way these will add value to yours as well.
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My first story is about e m b r a c i n g t h e p a s t. I grew up on a cattle farm in the small town of Estcourt in KwaZulu-Natal. We had a very simple life, and my best friends were the farmworkers’ sons. They generally wore one pair of shorts, the same mangled T-shirt—and, if they were lucky, an old hand-medown pair of shoes. Being a kid, I lived in rugby shorts and didn’t like wearing shoes, and so I fitted in perfectly. In the evenings, my friends went home to a mud hut with a corrugated iron roof, putu (krummelpap) for dinner, and a mattress to sleep on. But to me we were the same, and we’d spend hours on the farm together, oblivious of the differences that culture and history had brought upon us. My father used all his savings to send me to a private school, and it was only there that I realised how truly different my life was from that of my friends, who would stay on that same farm, in that same hut, for most of their lives. (Allow me to digress: Each of us has been placed in an incredible position to effect change, and we all need to be hugely grateful for these positions, no matter how hard we feel we have worked, or how much we feel we deserve to be where we are. There are many people who haven’t been as fortunate.) After arriving at high school, I was interested only in sports and extramural activities, and— through what was most likely a mild case of ADD—I quickly lost interest in school subjects, as I didn’t find them hugely practical. I mentally checked out of the
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classes, but checked into other subjects I was intrigued by, specifically those that came up in conversations with other kids during break time. I became good friends with a Portuguese boy whose father owned a few Spar stores, and we’d sit and discuss these businesses for hours. I soon became fascinated with building my own business, and realised how annuity revenue allowed a company to work for you, as opposed to you working for the company. I’d spent years watching my father wake up at 4 a.m. to start managing the farm, only to arrive home late in the evening. The difference between our families couldn’t have been more evident. The first dot from my time on the farm taught me that although we didn’t have financial wealth, my life was still filled with tremendous value. The second dot, almost in contrast, was what I learnt from my time in high school—the positive impact business can have if you build something sustainable. It left me with a simple synopsis and drive: Surely I could learn from my wealthy friends about how to build an impactful business while staying true to the real value in life— people—and not losing sight of and a heart for the less fortunate. What I believed would make a difference in our world kept leading me back to great companies known for incredible value-adding products, sustainable job creation, and a general improvement of the lives of people—both the users of the products and the employees. It was only in looking back that the value of my ‘dots’ and the experiences in my life started to make sense.
My second story is about failure. In 2007, I quit a very stable job to start my own business. I was 23 at the time, and only had enough cash to live and pay rent for three months. I spent those months pitching my business plan and idea to anyone who would listen (or pretend to listen). We all know those street vendors who have absolutely no fear and will harass you even if
“Entrepreneurship is possibly the hardest and yet most fulfilling journey you’ll ever embark upon.” you clearly express that you’re busy staring at the car’s bumper in front of you; they will continue until the light turns green, or until you eventually wind down your window. I can draw many parallels between these salesmen and myself at that time in my life. A flat-out “no” in my mind was more of a “maybe”—and if I kept asking, it could possibly result in a resounding “Absolutely! Of course I’ll invest my money in your idea, with no proof it could even work, let alone make money!” I cold-called companies and entrepreneurs, and generally just hustled to get capital for the idea. Eventually, in mid-December
2007, just before my cash would’ve run out, I met John Bright, to whom I promptly pitched my idea. It was called wiWallet, and my aim was to replace people’s wallets with their mobile phone. I managed to convince John that this was the next big thing, and he agreed to finance the idea through his existing company by investing R2.2 million in equity and R2.2 million in loan capital. Just before I left his office, he asked me how I was doing cash-wise, to which I replied that I’d be out of money in two weeks. As the Christmas holidays were soon upon us, this meant I’d miss my deadline to pay rent. John then said he’d wire money into my account that same day, and we’d come back in the new year to conclude the agreements. It’s incredible how it took just one man’s faith in me and a leg-up to set something in motion that would change my life. Those initial days of the business were great fun. We had a real startup mentality where anything was possible, and we loved being part of something new and exciting. I knew we were a true startup when one of my lady employees arrived one morning to work from my flat, and I’d forgotten to put away my washing—she was met by my underwear innocently drying on her chair. (She still hasn’t let me forget that.) We launched wiWallet on 08/08/08. It was the first time in the world (that we knew of) that someone used their mobile phone to make a payment by linking it to their credit card and closing off the transaction at the till in a store. We had a great campaign, leaving hundreds of very cheap wallets on the tables in restaurants, in the bathrooms and on the promenade, with
Passion and purpose Ducasse urges entrepreneurs to “find out why you do what you do, as this is a far greater driver than what you do.”
business cards inside, telling people how they could simply throw away their wallets and download our app. This period seemed too good to be true—and, as is often the case, it was. It’s been told countless times that failure is the best place to learn. wiWallet came to a crashing halt after the first year of business, and I clearly remember sitting with my management team in my flat with a decision to make. Either we could pivot the business toward something new and raise additional capital, or we could call it quits and attempt to find alternative careers. Fortunately, we decided to press on. I can’t explain the pressure at this stage; it was numbing. Your first idea hasn’t worked, and now you’re requesting more capital to try something new. What if the next idea also fails? Would I waste another few years of my life and have nothing to show for it? Failure was probably the best thing that could’ve happened to me. It was an awful-tasting medicine, but it was great to keep my feet on the ground and realise that not everything was in my control, and that I certainly wasn’t as great as I’d initially thought. It was also in failure that I was refined. With every application and product we now build in our business, we go through so many iterations; each time we inch the product closer to perfection. It’s this rapid style that allows us to fail quickly, learn fast, change and then retry before taking the product in its completed form to market. It’s so important that we see improvements as opportunities rather than issues. Some people either ignore reality and pretend everything is fine, or they accept reality but only see failure and problems. I believe great leaders see the reality, but are able to create a new picture by being steadfast in their belief that there’s always a positive way forward. Basketball great Michael Jordan said, “I’ve missed more than 9 000 shots in my career. I’ve lost almost 300 games. Twenty-six times, I’ve been trusted to take the game-winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.”
My third story is about focus and the hundreds o f l i t t l e d e c i s i o n s w e h a v e t o m a ke . If you aim at nothing, you’ll hit it every time; if you aim at too much, you’ll hit nothing. The human brain’s really only good at doing one thing at a time. To be great, we constantly need to focus ourselves and our teams. My friend Ryan moved to the US when he was a kid. He soon became friends with a Mexican boy and was invited to his birthday party. As was customary at such
festivities, there was a papiermâché piñata donkey filled with sweets, hanging from a tree. The kids would have to hit the piñata with a bat until the sweets flew out and they’d run amok, grabbing whatever they could get their hands on—as you can imagine, chaos! Whatever they caught would be theirs. Now Ryan, who really enjoyed his food, already had a slice of cake in one hand and some juice in the other, and he closely watched this scene, trying to work out how he could
choose between what was in his hands, and what could potentially come out of the donkey. After the second or third great swing of the bat, instead of tearing apart bit by bit, the entire piñata came off the rope and crashed out of the tree, straight toward Ryan. He had to make a decision at once, and flung the slice of cake and the juice to the side and bear-hugged the flying donkey. It turned out that his call had been a good one, and he immediately became best friends with all the other kids, as
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he now controlled who got which sweets. If Ryan had tried to hold on to too many things, he would’ve lost that opportunity. He also had to make sure his entire focus was on that piñata, otherwise he would’ve missed out on something great, while holding on to something that was merely good. Some of you may have heard or read about Jim Collins’s Hedgehog Concept: The fox knows and is good at many things; however, the hedgehog only knows one thing really well, which is to curl up into a prickly ball of spines. Each time the fox attempts a new cunning way to catch the hedgehog, he fails. Even with all the fox’s skill and talent, the hedgehog survives because it’s great at that one thing. Making decisions to focus on the right things has been invaluable in my business. It’s the simple apps that win, and the focused teams who are the most productive. Increasingly, some of the best apps in the world are specific in their function, rather than generic. Look at Facebook, WhatsApp, Twitter, Google Maps, Google Search, Uber—all of these are extremely focused apps, and they’re all the best-performing in their respective categories. I’ve found that in our business, it’s not only about the one or two major decisions on which we need to focus and make the right calls, but it’s the hundreds of little decisions we have to make each day that are important. Most people would focus on the large decisions and concentrate all their efforts and resources on these. I feel it’s more important to focus on making the right decisions each day, as this positions us with the experience and wisdom to choose correctly when the time for big decisions eventually comes around. When I look at all the people
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I deem significant in this world, every single one of them has lived making thousands of great small decisions that have led them to greatness. They trained themselves to make all the small decisions correctly, which positioned them to have the courage, experience and influence to make the major decisions. Nelson Mandela, for example, was faced with his hardest decisions when he had to remain positive for thousands of days while imprisoned on Robben Island. It was only through making decisions every day to forgive the prison guards, that positioned Madiba to make the massive decision to forgive and build a united nation—one of the greatest leadership decisions we’ve ever seen. If he hadn’t strived to get it right in his daily struggles leading up to that moment, I argue the result would’ve been quite different. In a number of cases, people say: “That individual was an overnight success,” or “The one decision he made was the reason for his success.” I’ve never known that to be true. That individual generally made choices every day to focus and to position himself or his business so that he could handle the success when it did come about.
My last story is about passion and people. I was fortunate to find something I was passionate about early on in life, and even more fortunate to find good people to come along with me. Seven years ago, when I started wiGroup, I read two books that had a significant impact on my journey and which are still two driving forces of my business
today. The first was Sir Richard Branson’s Screw It, Let’s Do It. He wrote about passion and fun being two key motivators in his life and his career. Coming from a corporate background, I resonated with the idea of creating a company where people could come alive and enjoy what they did, and also where I could enjoy myself and do what I was passionate about. Jobs seemed to concur: “Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it.” Over the years I’ve added another lesson to this: Find out why you do what you do, as this is a far greater driver than what you do. Many of you would’ve seen leadership expert Simon Sinek on TED Talks, speaking about finding the ‘why’ in your business, which in turn drives the ‘what’ and the ‘how’. Finding the ‘why’ will push you through the difficult seasons, but will also get people and clients to buy into what you do, because they’ll see a deeper passion behind which they can rally. People don’t like getting sold something, but they love joining and engaging in one’s passion. The second book was Jim Collins’s Good to Great, in which he advises to “get the right people on the bus, the wrong people off the bus, and the right people in the right seats.” From that day onward, I was adamant about surrounding myself with a team who was remarkable and better than I was in areas that either weren’t my passion or in which I knew I was weak. It was only through having an incredible team that wiGroup has ended up where it is today. It was the team
who kept the business going and my energy up when the chips were down, and it was the sum of all the parts that enabled wiGroup to scale, build leading products, and service blue-chip companies in the way we have. Even though you can get away with one or two bad hires, average people make an average company—and exceptional people make a worldclass company. Spend a massive amount of your time figuring out how to attract, keep and activate the best people, as they’ll take you further than you can take any idea or company on your own. Today, wiGroup employs more than 100 staff, is live in six countries, can be found in over 60 000 till lanes, reaches millions of end users, and has processed in excess of R4.8 billion in transaction value—and that’s all due to finding a passion and teaming up with the right people. Looking back and connecting the dots, I’ve realised what drove me to do what I do. Each of you will have your own dots that’ll shape who you are. Your failures will be some of your greatest lessons. The thousands of little decisions you make will position you to make the right calls when the big decisions come along, and finding what your passion is and getting the right people to execute that passion will be key elements of your business. I by no means have the formula for success, but I can merely suggest that entrepreneurship is possibly the hardest and yet most fulfilling journey you’ll ever embark upon. I leave you with another quote, by George Bernard Shaw: “Life isn’t about finding yourself. Life is about creating yourself.” Bevan Ducasse is the founder and CEO of wiGroup, South Africa’s only interoperable point-of-sale mobile transacting network and winner of the PwC Vision to Reality Award 2014. This article is an edited version of Ducasse’s keynote address to the Vision to Reality Award finalists.
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10 times more Innovation, disruption and going the ex tra mile—this is w hat makes 10X Inves tment s a consumer champion
Steve Nathan is the CEO and founder of 10X Investments. He studied accounting at university, but always had a passion for investments and finance. “While I was doing my accounting articles at Ernst & Young, I started doing the charted financial analyst qualification; when I finished that, I joined a stock-brokering firm and became an analyst on the JSE-listed financial services companies. I analysed banks, the life insurance companies, asset managers and investment banks—that is where I got to understand more about the business side of investing. “I knew the theoretical side through qualifying as a CFA analyst, but found the real world of commercial highinvestment companies is run very differently from the business side. I was quite alarmed at the difference between what you should be doing versus what happens in the real world,” he notes. That is why he started 10X Investments, an authorised financial services provider, a licensed retirement fund administrator and investment manager—providing a full range of services and products to retirement investors. The company administers retirement funds and facilitates risk
(insured) benefits, while also managing investments for retirement funds. Corporate clients include African Bank, Deutsche Bank, Macquarie, EOH, Virgin Active and the Invicta Group, among many others. The whole essence of 10X is always to provide people with a portfolio that is appropriate for their financial needs, and committing itself to delivering competitive long-term returns to these clients. “When we started, we set out to deliver a single solution that people can invest with confidence and trust and the knowledge that they are always getting a good deal that is appropriate for them,” Nathan adds. Although this may sound simple, it’s not always straightforward, as various companies promise to deliver but ultimately don’t. “All of our clients are invested on the same strategy. Whereas other companies have three, five or even 50 portfolios; and if you have 10 portfolio choices, you’re going to get 10 different outcomes. What a lot of people fail to understand is that the difference between choosing one portfolio and the other over 20 or 40 years is enormous, because if you can earn an extra 1% on a portfolio over 40 years, you’re going to have about 50% more money. So a small number like a 2% difference can double the amount you had at the time,” Nathan explains. The small percentages that people ignore can mean the difference between a successful retirement and
Creativity and innovation are not only words but guiding principles that have elevated 10X from a back-end position to having frontrunner status.
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a very unpleasant one. Nathan notes that the reality in South Africa is that most people are earning poor returns, because they are paying high fees for administrators and fund managers that may be underperforming the market. The fundamental point about investments is that time drives risks, says the CEO. “If you invest in a balanced portfolio—which is a portfolio of shares and bonds and property and cash—you have different assets spread out. If your investment arises and the unit has been invested for five years or longer, you can have a growth portfolio—which means you can invest about 70% in shares in growth assets. He adds that the reason the company works with five years is that “we have gone back over 100 years and looked at the history of market performance. Five years is always enough time for markets to recover or stabilise. Ultimately, no one knows if the stock market is going to be good or bad. People generally speculate. If someone says to me where should I invest my money, the first question we always ask is, ‘What is your time arising—how long are you going to be invested for?’ ” This clarity from investors helps Nathan and his team offer the best solution. Every client deserves attention that’s tailored to their needs. “From our perspective, it’s all about getting people a single solution that’s going to be appropriate for them, and generating competitive returns while being low-cost and transparent.” This aspect is what sets 10X apart from the rest within the industry. The company focuses on a core offering while others have a more complex system managed by active managers who try and beat the market—but most of the time don’t. “So although it may sound like a slightly different model, the investor who invests with 10X versus another
company over 40 years is likely to have a very different outcome,” says Nathan. 10X recently won a PWC Vision to Reality Award. This awards programme celebrates emerging companies with tech-enabled solutions spanning all industries, and aims to encourage companies with the best high-growth potential to become market leaders, and to inspire future startups. “We decided to enter the competition because the theme of ‘bringing your vision to reality’ resonated well with us,” Nathan reveals. “At 10X, we have a strong passion and vision to build a pride-focused investment company that’s very different from anything else that exists in South Africa or globally. There is no other company that has a single investment strategy that all their clients are invested in, in a single portfolio that everyone is invested in. We look after investment banks and farms—so from the chief executive of Deutsche Bank down to a farmworker, they have the same portfolio. And that is great,” he adds. In 2015, 10X won the Imbasa Yegolide Award for Technology Provider of the Year from the Council of Retirement Funds for South Africa. Nathan believes this is evidence of the company’s good work. “That shows you we are doing some innovative things in technology, in an industry not known for innovation and technology.” Creativity and innovation are not only words but guiding principles that have elevated 10X from a backend position to having frontrunner status. “We have a strong record of giving competitive returns, and the technology we use is a fantastic enabler behind the scenes. We run very integrated systems that can cater to corporates and individuals. I can access my investment with 10X via an app on my phone or tablet; we also have a function whereby an investor can SMS and within seconds get his or her pension or provident balance etc. That’s just one of the ways we engage. We also have full Internet functions; our individual clients can log on and get any information they need,” Nathan reveals.
“We are managing other people’s money, therefore they should see everything we see about their money. We let clients inside our business as part of our transparency commitment. The South African retirement fund industry is not transparent, and we are committed to going against the grain in that regard.” Perhaps the major point of interest is: How does one invest with 10X? Nathan explains: “The first question would be: Are you saving for retirement? If your company has a provident or pension fund, then whoever is the provider for that will give you access to us. We look after more than a hundred companies in broad industries, companies like Virgin Active etc. So if your employer is one of those companies, automatically you will be invested with 10X. If you are an individual, it’s up to you to go online via our website or phone us. You can also email us and we’ll contact you.” One of the biggest aims of 10X is to ensure the entire application process is simple, easy and user-friendly. “Technology can bring down the costs of administrating investment accounts by 80% to 90%. That’s why the environment is very productive for innovation in any industry. Companies like Uber and Airbnb disrupt by using technology to simplify previously difficult things.” Nathan is motivated by entrepreneurs like Starbucks’s Howard Schultz and our own South African–born Elon Musk. Vanguard Investments, which is now one of the
Standing up for the client “In everything we do, we first ask: Is this in the investor’s interest?” says CEO and founder, Steven Nathan.
biggest investment companies in the US, is a big point of reference. He explains: “Vanguard was founded in 1975 by John C. Bogle and he began the conflicts of interest in the American investment industry. He started Vanguard based upon putting the investors’ interest first and keeping it simple—keeping costs down and trying to eliminate conflicts in the system, which is very much the philosophy that 10X has. At the time, rival companies believed Bogle’s model would fail, but ultimately he built the market leader with over 3 trillion dollars in assets.” The CEO is motivated by making a difference. “I was a director of Deutsche Bank, but I wasn’t fulfilled. I’ve always believed in adding tremendous value to society, and at 10X we are truly making a big impact on people’s lives. By saving them fees and adding to their returns, the long-term impact is enormous. What motivates me is making a difference to people’s lives at retirement.” The future looks bright at 10X. Innovation, disruption and going the extra mile for clients are characteristics on which the company will never compromise. “We want 10X to be a consumer champion for the long term and we want it to be a brand that people implicitly trust. They should know that if they invest at 10X, they are always going to be looked after—not that they’re going to get the best portfolio but that they can invest with trust and be confident their investment is in safe hands,” Nathan concludes.
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TOMORROW’S MARKET LEADERS The PwC Vision to Reality Awards celebrate emerging companies with tech-enabled solutions that span all industries
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The top 10 finalists had an opportunity at the gala ceremony to network and gain access to leading advisers within the industry.
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FIRST PLACE 10X Investments www.10x.co.za 10X Investments (10X) is an authorised financial services provider, a licensed retirement fund administrator and investment manager. It provides a full range of services and products to retirement investors, administering retirement funds and facilitating risk (insured) benefits. The company also manages investments for retirement funds. Its corporate clients include African Bank, Deutsche Bank, Macquarie, EOH, Virgin Active and the Invicta Group, to name a few. 10X offers a simple, low-cost and direct retirement solution. Employers can participate in the 10X Umbrella Funds (pension and provident). Individuals can also join the 10X Retirement Annuity Fund and the 10X Preservation Funds (pension and provident). In addition, 10X offers a combined administration and investment
management service, or an investment-only service to stand-alone retirement funds. The company’s name comes from Andy Grove, former CEO of Intel, who described a force that changes the fundamental rules of an industry as a “10X force”, making it 10 times harder for the existing players to compete. The company felt the name was appropriate, given it is changing the fundamentals of the retirement fund industry. The name is pronounced ‘10-ex’, not ‘10 times’.
SECOND PLACE Origin Dynamic Systems (Pty) Ltd www.originsystems.co.za
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A gala ceremony brought together entrepreneurs, investors, mentors, corporates and key stakeholders within the thriving innovation and tech ecosystem. The top 10 finalists had an opportunity to network and gain access to leading advisers within the industry. The event included a keynote address and the finalists’ presentations, and culminated with the announcement of the Vision to Reality winners.
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he Vision to Reality Awards programme is in its second year of presentation, and has become a flagship initiative of PwC, designed to celebrate innovation and leading-edge technologies. The programme recognises and honours organisations whose outstanding achievements have made some of South Africa’s most successful tech companies. The aim of the awards is to acknowledge the role of these organisations in supporting innovation and entrepreneurship.
Based in Cape Town, Origin Systems is a legal software company providing specialist contract drafting, risk management and compliance solutions to many of South Africa’s largest companies. Developed by a team of lawyers and IT professionals over a period of eight years, the company’s Updraft solution uses legal algorithms and dynamic databases to mimic the legal drafting process followed by lawyers. The software
These companies have all made a difference in Africa by having the courage to share their visions, and then turn them into reality in the form of revenue and growth in their particular industry.
user adoption. In the corporate environment, the drafting solutions are coupled with proprietary contract management functions that automatically manage the full life cycle of the contract; trigger reminders on contract deadlines; generate business intelligence and reports; draft associated compliance documents; and provide a secure and interactive repository of all the company’s legal documents. In other applications, the Updraft software is used to support a range of legal support products offered to small businesses and individuals. In this context, the company currently supports 1.25 million individuals and approximately 350 000 small businesses, as well as a range of insurance and affinity products.
THIRD PLACE PayFast www.payfast.co.za
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cuts drafting time by 80% to 90%, and the controlled drafting process is so intuitive that it can be completed by non-lawyers— resulting in significant cost savings and easy
PayFast is an online payments processing service for South Africans and South African websites. It enables easy, secure and instant transfer of money between buyers and sellers. Clients do not require a merchant account to use PayFast, and there are no lengthy contracts or fixed monthly costs— only per-transaction fees. Integrated into over 60 different e-commerce systems and six different payment methods, PayFast also provides fraud and security monitoring as a free value-added service.
Steven Nathan, CEO, 10X Investments Richard van Helden, CEO, Director, Origin Dynamic Systems (Pty) Ltd Jonathan Smit, MD, Founder, PayFast
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InfoSlips www.infoslips.com
InfoSlips is an award-winning e-documents provider that helps companies replace their ‘flat’ documents such as statements or invoices with beautifully designed, interactive and secure InfoSlips—delivered on anything from a laptop to a smartphone.
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Nomanini Nomanini.com
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BabyGroup www.babygroup.co.za
BabyGroup is South Africa’s e-commerce store for moms-to-be and new moms. Launched in May 2013, it provides the widest selection of local and international brands delivered across South Africa and eight other countries. The portfolio also includes BundleBox, a popular subscription service for mothers. BabyGroup enjoys a high customer lifetime value at low acquisition costs as a result of an intense focus to deliver to customers a genuinely positive and personal experience while also offering great value and convenience. In June 2015, the company developed and launched its own range of baby products to positive reviews. BabyGroup is looking ahead to geographic and range expansion in addition to own product and white-label product development.
Daryn Smith, CEO, Director, MPULL Dr Lynette Moretlo Molefi, MD, Telemedicine Africa (Pty) Ltd Rupert van Zijl, Marketing, Sales & New Business Development Manager, Xpitec
MPULL www.mpull.com
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Nomanini means “any time” in Siswati. It provides affordable access to payments for everyone, everywhere. This enterprise payments-platform provider enables transactions in the cash-based informal retail sector. With its end-to-end solution designed for informal market environments, enterprise prepaid distributors are able to bolster their distribution channels, add to their portfolio of transaction services, increase their access to informal market consumers, and efficiently monitor micropayments and services via a scalable cloudbased platform.
Nomanini has Pan-African partnerships processing over a million transactions a month and enabling thousands of merchants to supplement their income. Vahid Monadjem is the founder and CEO. Before establishing Nomanini, he consulted with McKinsey & Company as Global Fellow for new product development for emerging markets. CTO Dale Humby is an accredited electromechanical engineer with deep experience in embedded systems and backend system design. Kuda Mushambi, chief commercial officer, leads sales, marketing and business development. He joined Nomanini from Google and Microsoft where he built partnerships for their advertising and mobile platforms.
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THE TOP 7 COMPANIES
MPULL exists to grow other businesses and, as a result, economies. MPULL is actually two
Guests were entertained by the LINEAR live band.
Telemedicine Africa prides itself on pioneering telemedicine technologies in Africa. The business has been driven by its philosophy to provide integrated, multifunctional, scalable and dynamic solutions and products that will improve the provision of care—both today and in the future. The vision for Telemedicine Africa is to be acknowledged by the healthcare profession as the leading service provider in the provision of telemedicine services and technology in Africa and to transfer wellness, awareness and life skills to people across southern African society—so that all people would recognise the importance of knowing one’s status. The company successfully implemented its first large-scale telemedicine project in the Limpopo province, including the provision of training to doctors and nurses. Telemedicine Africa also conducted a
eMoyo KUDUwave™ Mobile Audiometer www.emoyo.net
eMoyo—eMoyoDotNet (Pty) Ltd—is a medical technology company that researches, develops and produces medical devices that will change the nature of primary healthcare. This change will manifest in the company making primary healthcare both affordable and accessible to all through its use of artificial intelligence and automation. The company continuously works on providing high-quality, comprehensive and cost-effective primary healthcare solutions to every possible testing environment, from urban to the most remote rural areas. This means eMoyo constantly strives to offer a holistic answer to the global primary healthcare problem by delivering real healthcare to all. Software and testing processes prescribe to the principles of telemedicine, and the newest process innovation, transmedicine. Ultimately, transmedicine will provide synchronous, automated, portable patient examination devices, software and processes. The KUDUwave™ headset comprises a clinical audiometer, two insert earphones,
a bone conductor and an ambient noise SPL meter. There are no analogue cables that can cause any issues. The automated software improves reliability of test results for air and bone conduction. Compliance statistics— such as patient response times, ambient noise levels, among others—empower clinicians to trust their automated and tele-audiology test results.
Xpitec (Pty) Ltd www.xpitec.co.za
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Telemedicine Africa www.telemedafrica.co.za
research project for the Southern African Development Community Secretariat during which all the Ministries of Health in the SADC countries were visited to assess their e-readiness.
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brands: MPULL itself (a business-process outsourcer for inbound marketing, content marketing and marketing automation) and League Digital (a brand-focused, full-service digital business solutions agency). Agencies from all over the world trust MPULL to help them grow. They outsource the execution of their clients’ requirements to MPULL’s experienced team using the company’s tried and-tested platform and processes—and they get a world-class service in return. This includes a rapid development framework that allows the delivery of enterprise-level websites within weeks (instead of months), and a ‘CMS of the future’: a single place to manage content across a variety of channels and platforms. MPULL is currently focusing on the English-speaking market, but plans this year to work in Spanish as well, with offices in Madrid and Mexico City.
Xpitec believes in building long-term relationships with customers. Providing products as well as software and hardware engineering services for customer projects requires the company to be at the forefront of changing technology. The team of engineers is encouraged to push boundaries and implement sound and maintainable solutions. The multidisciplined team brings together many technologies, which would otherwise be viewed in isolation, to very specific solutions. By combining its embedded electronic design and software development with information technology, Xpitec is capable of providing a complete solution such as the IoT (Internet of Things). This synergy of technologies opens up possibilities that would otherwise not have been possible, enabling the flagship products Xemote, Ehas and SenseMatrix to provide management with unprecedented insights into their processes and operations.
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Ta p i n s i d e r e s o u r c e s
The brand builder
Part of Ghini’s brand strategy for Starbucks included revamping the mermaidcentric logo. Before hiring an outside agency, she asked designers at the company to take a first pass. After weeks of experimentation, two young employees presented a logo that’s almost identical to the current trademark. Seeing their work was “a wow moment”, Ghini says. “I thought, Of course, release the siren. Let her be a beacon for bringing people together.”
Alessandra Ghini helped Apple and Starbucks stir consumers’ emotions—and win big BY MARK WILSON
Photograph by Justin Kaneps
U s e yo u r l i m i t a t i o n s
The bigger picture Ghini says marketers should see a product as a story, not a list of features.
In 2002, Ghini was tasked with marketing Apple’s Final Cut Pro software— without using familiar resources such as fliers and brochures. So her team created videos that demonstrated use cases of the programs, landing on a crowdsourcing strategy that is still used in ads (and Apple Stores) today. “Eventually, we were able to stop telling customers to believe us and instead start showing what artists and filmmakers were using it to create,” she says.
Go for the heartstrings
When a music ad inspires your sense of adventure or a barista asks how you’ve been, you’re likely experiencing the type of interaction designed by Alessandra Ghini. A 20-year marketing veteran, Ghini joined Apple in 2001 and helped craft the iPod’s debut, then spent nearly a year constructing a new brand strategy for Starbucks. After eight years consulting for companies including Vans and Adobe, she recently became chief marketing officer of hightech tea startup, Teforia. Here’s her blueprint for telling a brand’s narrative.
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Be nimble At Starbucks, CEO Howard Schultz and Ghini wanted to emphasise “moments of connection”, like when a barista knows your name. To create that connection around cake pops or scones, food had to be its own attraction. Schultz and his executives decided to separate the food and drink divisions— a change that started to take effect just 30 days later. Ghini’s takeaway: Agility starts with alignment at the top.
Despite its popularity, the iPod’s “1 000 songs in your pocket” tag line failed to take the product mainstream. Ghini’s team found the problem: Storage space wasn’t the point. “We realised machines were more than just a tool,” Ghini says. “Why do you enjoy the iPod? [Music] brings up so much emotion.” Apple worked with an external agency to produce a now-ubiquitous campaign that brought new verve to the iPod with colorful, expressive human silhouettes. “It shows the joyful way music releases your true self,” Ghini says. “We took their creative and ran with it.”
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The Great Innovation Frontier
Don’t watch the game ranger, watch the game F O R G E T T H E C O U N T RY ’ S P O L I T I CA L D R A M A ; W E N E E D TO K E E P A N E Y E O N O U R Y O U N G E N T R E P R E N E U R S I F W E WA N T TO B U I L D A T R U E I N N OVAT I O N C U LT U R E
H
ERE’S A QUESTION for all South Africans: Why
is Siyabulela Xuza not a household name in this country? You’ve never heard of him? Well, that’s surprising, because this young Harvard graduate has already had a minor planet named after him by NASA and has won so many prizes—many of them before he even left school—that it would make your head spin. Xuza has recently returned home, despite glittering prospects elsewhere, to start a high-tech business focusing on nano-enabled solar energy. Like his more famous compatriot, Elon Musk, he has a “passion for using technology to solve the world’s energy crisis,” he says. Born in rural Umthata, Xuza says he got hooked on science at age 5 when he saw a light aircraft for the first time, dropping election leaflets over his village. He built his own rocket after watching Mark Shuttleworth’s space flight in 2002, but it exploded on the launch pad. His next attempt, a year later, broke the national amateur altitude record at nearly 1 000 metres. From there, Xuza advanced rapidly—thanks to a string of scholarships through school and then on to Harvard, where he focused on making cheaper solar cells and assessed the commercial viability of solar technologies. Back home, he’s being touted by the government as one of a handful of black industrialists who will take this country to the next level. But the fact remains: Why is a black South African of his calibre not being paraded in front of other youngsters to inspire them to follow in his footsteps? As renowned scenario planner Clem Sunter has remarked: In any other country, a schoolboy who has won as many awards as Xuza (to say nothing of having a space body named after him) would definitely have been a household name by now. Sunter reckons it’s because, in South Africa, the media and public spend far too much time on politics and leadership—or the lack thereof. He likens it to going to a game park and watching the game rangers instead of the animals. And while it’s undeniable that South African politics, especially at the moment, provides endless viewer
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We should be focusing on the things that may just shift the centre of gravity of the country—and continent— to allow its innovative and energetic youth to thrive.
Walter Baets
entertainment (better than Game of Thrones), Sunter is right. This comes at the expense of our focusing on the things that really matter; the things that may just shift the centre of gravity of the country—and continent—to allow its innovative and energetic youth to thrive. According to the Global Entrepreneurship Monitor (GEM), Africa has the highest percentage of young people in the world who express keen intentions to start and run a business, but not all of these youngsters will succeed, because they are mostly not given the support they need. In South Africa, the rate of entrepreneurship is lowest on the continent. Just 9.2% of the adult population started a business in 2015. More worrying is that South Africa’s youth say they would still, by and large, prefer to work for the government than to start their own business. But we all know the world of work is changing. Disruptive technology, global constraints, environmental meltdown … These are all conspiring to change the way the world does business. We have seen this in South Africa, where job growth over the past 10 years has mostly been in the civil service. But even that is set to change. In his 2016 Budget Speech, Finance Minister Pravin Gordhan announced a curb on non-essential civil service jobs in an effort to bring down the budget deficit. In this new world of work, innovation and entrepreneurship are going to be crucial to sustain employment—especially for the youth. GEM research has shown that a critical component in building a more entrepreneurial culture lies in enhancing the way in which entrepreneurship is viewed by people. This starts with the amount of positive attention given to entrepreneurs; from the media telling the success stories of entrepreneurs, to the government making it clear that these people are a priority. South Africa’s economy is in its darkest spot since 1994. The country is demoralised. Now, more than ever, we need to champion citizens like Xuza. The country is not short of pockets of excellence, but we need to replicate and upscale these. This starts with recognising and celebrating them wherever and whenever possible. Xuza’s own story of success shows how the impact of Shuttleworth’s triumph (which was well-reported and celebrated) inspired him to innovate. He can, in his turn, inspire a whole new generation of innovators to step up. What on earth are we waiting for? Walter Baets is the director of the UCT Graduate School of Business and holds the Allan Gray Chair in Values-Based Leadership at the school. Formerly a professor of Complexity, Knowledge and Innovation and associate dean for Innovation and Social Responsibility at Euromed Management—School of Management and Business, he is passionate about building a business school for ‘business that matters’.
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5 TECH IN NOVATION S T H AT W IL L CH A NGE YOUR LIFE IN 2016 I N S I D E LY F T ’ S P L A N S TO OV ER TA K E UBER WHY SA BEER LOVERS ARE CRAFTING THEIR OWN BREW
Subscribe to Fast Company SA and stand a chance to win the book, And For All These Reasons … I’M IN, authored by the Dragons’ Den SA judges Fast Company South Africa is available in selected Pick n Pay and Exclusive Books stores. An annual subscription is for 10 print issues of Fast Company SA magazine (March/April and December/January double up as one issue each), at a cost of R240 (including 14% VAT and postage). Full payment must be made before the subscription is valid. This offer is for South Africa ONLY. If you would like to subscribe, email Taryn Kershaw for more details: taryn@insightspublishing.co.za. I’M IN isn’t a how-to-build-your-business book, but rather one that offers insights into the thinking and experiences of people who have built businesses, have witnessed them fail, and have seen them rise again. Gil Oved, Lebo Gunguluza, Polo Leteka, Vinny Lingham and Vusi Thembekwayo—judges on the first SA season of reality TV show Dragons’ Den— were once in the same position in which all entrepreneurs find themselves before they take that leap. They know how it feels: the excitement, the passion, the sense of making a difference through offering something original, complex or simple. They know the disappointments when things don’t go according to plan. But they persevered. I’M IN is essential advice for all entrepreneurs. Visit iminbook.co.za for more information. MAY 2016 FASTCOMPANY.CO.Z A 91
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
NATIVE ADVERTISING GROWING AT ASTOUNDING RATE IHS Technology conducted a series of in-depth interviews with leading publishers, app- and game developers, trade associations, agencies, music services, ad networks and tech vendors in 25 countries across Europe, Asia-Pacific and the Americas.
KEY STATISTICS FROM THE RESEARCH: By 2020, 75.9% of all digital ad spend will be mobile. Native advertising will generate 63.6% of global mobile display
advertising,—over R750 billion by 2020. Third-party in-app native will continue to grow, at an annual average rate of 70.7%, and will account for 10.6% of all mobile display advertising at over R125 billion by 2020. In EMEA, native advertising will amount to over
R130 billion by 2020 (R18 billion third-party native). In APAC, it will amount to over R200 billion by 2020 (R50 billion third-party). APAC will record the largest increase in native advertising spend in the next five years—177% compound annual growth rate.
MINIATURE MARVELS
HOW MUCH ARE YOUR TWEETS WORTH? If you dream of becoming the next DJ Joe Mfalme, Arther Mandela or Ameyaw Debrah, or would like to earn a living from being a social-media influencer, a new free online calculator tool by Webfluential will tell you how much you can earn per tweet. The calculator uses geotracking and algorithms to assess the exact monetary value of each tweet, based 92 FASTCOMPANY.CO.Z A MAY 2016
primarily off the number of followers you have. The tool is freely available to all Twitter users—and for those who have 500 or less followers, the tool will send tips on how to raise your influencer status.
The Cape Town Science Centre has opened its new Miniature Marvels exhibition, consisting of 48 small objects that make a huge difference in our everyday lives but which we take for granted. Professor Mike Bruton, curator of this exhibition, tells the origin stories of the Post-it note, Velcro, the Band-Aid and the light bulb, among others. Some of the Miniature Marvels were designed intentionally, others by accident; some form part of bigger machines while others work by themselves. Many of them have achieved the perfect balance between form and function, while others are useful, benign, affordable and ingenious—some are even iconic and beautiful. See ctsc.org.za.
Fast Bytes
THE CHAIR WITH A BRAIN The newly designed Think ergonomic office chair by Steelcase has the comfort and technology of a task chair but the flexibility and design to be a conference chair. The Integrated LiveBack System conforms to your body and moves with you as you change posture. The chair’s controls are more integrated in the design and are easier to adjust— providing greater flexibility in task, collaborative, learning and social applications. See www.steelcase.com or www.inspirationoffice.co.za.
A NEW TOOL OF THE TRADE Developed by two South African entrepreneurs, the Honest Abe mobile app hopes to free thousands of people economically, by stimulating employment and building trust between homeowners and local tradespersons across the country. “My partner and I have seen how a lot of smaller tradesmen struggle to find regular work. This isn’t because the work isn’t out there for them, it’s because many homeowners are wary of inviting strangers into their homes to quote on jobs and to do the work,” says James Mittan, co-founder of the app. Homeowners can list jobs they would like done and an alert is sent to all the relevant tradespersons working in the area. These individuals can then send the homeowner their quote for the job or arrange for a site inspection.
ANOTHER SIDE TO YOUR SELFIE Tapping into the birth of the selfie culture, The Jupiter Drawing Room Cape Town (www.thejupiterdrawingroom. com) has built the world’s first holographic-selfie cubicle, called The Holobooth. Developed from paper to prototype in just three weeks, The Holobooth is an innovative combination of existing tech that gives people a unique way to see themselves.
HOW DOES THE HOLOBOOTH WORK? Step into the booth and follow the touch-screen prompts to record a 15-second selfie video. The Holobooth processes the recording into a unique format, uploads it to the
web, and sends you a link via SMS or email. Grab a viewing prism from the booth on the way out. You’ll need it to view your hologram selfie on your smartphone, preferably in a darkened room.
MAY 2016 FASTCOMPANY.CO.Z A 93
Fast Events Upcoming events Fast Company will be attending
Business Power Talk with Andrew Barsa: The Psychology of Wealth
Relevant IT Meetup: Business Process Automation in SMEs
Date: 4 May Time: 07h00–12h00 Location: Hyatt Regency Johannesburg, Rosebank Tel: 081 427 0427
Date: 19 May Time: 15h00–18h00 Location: University of Stellenbosch Business School, Bellville Park Campus Email: mathias@xuviate.com (Organiser)
Join us for a B U S I N E S S B R E A K FA S T with Andrew Barsa—a globally respected success coach, an E X P E R T I N T H E P SY C H O L O GY O F W E A LT H and best-selling author—as he debunks myths that hold your business back from F I N A N C I A L S U C C E S S . He E M P O W E R S B U S I N E S S O W N E R S and corporates by offering them E F F E C T I V E S T R AT E G I E S on leadership, purpose, and engaging E M P L OY E E S T O P E R F O R M at an optimum state, resulting in a 3 0 % T O 5 0 0 % G R O W T H in profits within months.
Most SMEs have access to a reliable, C O S TE F F E C T I V E I T platform and are looking for ways to automate P R O C E S S E S across their business. But this is easier said than done for an S M E T H AT N E E D S S I M I L A R S O L U T I O N S to its corporate counterparts, yet only has a fraction of the B U D G E T . Simon Hepburn, co-founder of D I G I TA L P R O D U C T I V I T Y C O M PA N Y B S O LV E , will share his insights on C U R R E N T A P P R O A C H E S and N E W O P T I O N S becoming available courtesy of our I N C R E A S I N G A C C E P TA N C E O F C L O U D in our businesses.
Sustainable Brands Cape Town
Secrets to Success Conference
Date: 14 to 17 May Time: from 08h00 Location: Century City Conference City, Cape Town events.sustainablebrands.com/sb16ct
Date: 25 & 26 May Time: 08h00–19h00 Location: TBC, Johannesburg www.secretstosuccess.co.za
This event will C R E AT E A N O P P O R T U N I T Y F O R P R O F E S S I O N A L S from various industries to network and L E A R N F R O M T H E I R P E E R S and a collection of thought leaders in an O P T I M I S T I C , C O L L A B O R AT I V E E N V I R O N M E N T about how to I M P L E M E N T S U S TA I N A B L E S O L U T I O N S —now. The programme will feature more than 7 5 I N T E R N AT I O N A L A N D L O C A L S P E A K E R S , 14 workshops, 16 BREAKAWAYS and numerous networking events.
94 FASTCOMPANY.CO.Z A MAY 2016
The Secrets to Success Conference, in association with the N AT I O N A L B U S I N E S S AWA R D S , will gather together South Africa’s business giants to R E V E A L T H E I R P R O V E N F O R M U L A S F O R S U C C E S S and share their insights on topics covering I N N O VAT I O N S , investing in people, sustainability, E N T R E P R E N E U R S H I P , economic forecasts, G L O B A L G R O W T H , foreign investments, L E A D E R S H I P and philanthropy, among others. Breakaway sessions, PA N E L D I S C U S S I O N S and one-onone deal rooms will be an excellent opportunity to N E T W O R K A N D E X C H A N G E I D E A S with other business leaders.
Fast Events
Peninsula Toastmasters Public Speaking Workshop
Attractions Africa 2016: The Art and Science of Attractions Management
Date: 26 May Time: 18h00–20h30 Location: Best Western Cape Suites Hotel, Cape Town www.peninsulatoastmasters.info
Date: 8 & 9 June Time: 09h00–17h00 Location: Doubletree by Hilton Hotel Cape Town—Upper Eastside, Woodstock attractionsafrica.co.za
A Toastmasters meeting is a L E A R N - BY- D O I N G W O R K S H O P in which participants hone their speaking and L E A D E R S H I P S K I L L S in a no-pressure atmosphere. There is no instructor; instead, M E M B E R S E VA L U AT E O N E A N O T H E R ’ S P R E S E N TAT I O N S . This feedback process is a key part of the programme’s success. Meeting participants also give I M P R O M P T U TA L K S O N A S S I G N E D T O P I C S , conduct meetings, and develop skills related to T I M E K E E P I N G , grammar and PA R L I A M E N TA RY P R O C E D U R E . Meetings are fun, entertaining, I N S P I R I N G and I N T E R A C T I V E .
This annual tourist-attractions conference offers a two-day programme of I N T E R N AT I O N A L S P E A K E R S sharing T R E N D S , B E N C H M A R K S A N D B E S T P R A C T I C E , as well as local E X A M P L E S O F E X C E L L E N C E , cases studies and white papers presented by L O C A L AT T R A C T I O N S managers. It is an E D U C AT I O N A L O P P O R T U N I T Y for AT T R A C T I O N S M A N A G E R S and a P L AT F O R M for I N F O R M AT I O N S H A R I N G and the recognition of C O M M O N C H A L L E N G E S .
Net Prophet Works
InnoLive 2016 & CrowdSourcing Week Africa Summit
Date: 8 June Time: 09h00–17h00 Location: Workshop 17, V&A Waterfront, Cape Town netprophet.org.za
Date: 23 & 24 June Time: 09h00–17h00 Location: Business Connexion Office Park, Midrand, Johannesburg www.innocentrix.co.za
For the first time, Net Prophet offers the O P P O R T U N I T Y T O G A I N F I R S T- H A N D I N S I G H T s from our I N D U S T RY E X P E R T S by hosting an additional day of practical half-day workshops. Net Prophet Works is S U I TA B L E for those involved in I M P L E M E N T I N G D I G I TA L , Internet or P R O D U C T S T R AT E G I E S . You’ll walk away with an actual toolkit, M E T H O D O L O G I E S and I N S P I R AT I O N T H AT Y O U C A N W I R E into your processes. Get TA C T I C A L , H A N D S - O N T R A I N I N G from experts who will G U I D E Y O U O N A R A N G E O F A S P E C T S O F I N N O VAT I O N — from prototyping to automation and the POWER OF DATA .
Innocentrix presents InnoLive 2016, one of the M O S T R O B U S T C O N F E R E N C E S for South African organisations that regard I N N O VAT I O N A S A S T R AT E G I C P R I O R I T Y . With international speakers as well as the C O U N T RY ’ S I N D U S T RY L E A D E R S presenting local and international C A S E S T U D I E S , A C H I E V E M E N T S and M E T H O D O L O G I E S that have delivered value will be showcased, D E B AT E D A N D C E L E B R AT E D . For the first time since its inception, CrowdSourcing Week (CSW) Global W I L L B E P R E S E N T E D O N T H E A F R I C A N C O N T I N E N T and will be hosted on D AY 2 O F I N N O L I V E 2 0 1 6 AS CSW AFRICA.
MAY 2016 FASTCOMPANY.CO.Z A 95
Next
The funny pages
Barry Hilton
No laughing matter C O M E DY I S A S E R I O U S B U S I N E S S — B E P R E PA R E D TO TO U G H I T O U T
I
’VE ALWAYS WANTED to be a successful businessman, but I’ve never quite thought about myself that way. Not until someone pointed out that I’ve been in the business of comedy for more than 30 years. South Africans really need a reason to laugh, so comedy is an essential commodity here. And my business is to make people laugh—and in that respect, you could say I’m running a very successful business.
When people ask me what I do for real work and how I actually make money, I smile inwardly and think, It’s comedy, my cousin. Getting into comedy wasn’t easy. Staying in demand is even more challenging, because the pressure on comedians is unique. It’s not like being a musician who can belt out the same song for years on end, or an actor who can still deliver his lines even on an off evening. Comedy is a serious business. The risk is high and conflict is intense. Reinvention and the ability to evolve with the times is the cornerstone of my success. It’s not just about jumping up onstage in a pub anymore. The scope of comedy and its reach—into film, commercials, books, social media, stadium events, corporate showcases, memorabilia, clothing, music and more—have exploded. Meanwhile, comedians are expected always to deliver new material. They can’t tell the same joke twice, nor can they tell one that’s even vaguely similar to another comedian’s. And if, just once, you’re not good, everyone remembers that—and social media helps ensure everyone gets to hear about it! So it’s like being on a high wire, where the audience expects your delivery to be flawless, night in, night out. Comedians are now in as much demand as brand ambassadors, voice-over artists, peacemakers, actors, industry leaders, script producers, entertainment brokers, writers, and digital media content creators. The list goes on. When my dear friend, Jami Gong, moved to Hong Kong from America, he really made his comedy business work, starting Asia’s most successful comedy club. He
96 FASTCOMPANY.CO.Z A MAY 2016
It’s not just about jumping up onstage in a pub anymore. The scope of comedy and its reach have exploded.
started teaching comedy, and now he produces the sell-out Hong Kong International Comedy Festival that attracts comedians from around the world. Harith Iskander has done the same thing in Kuala Lumpur, and comedy is beginning to take off in Africa too. In South Africa, comedians such as Joe Parker and Kurt Schoonraad have established extremely successful comedy clubs. John Vlismas has masterminded the Comics’ Choice Awards, and Kobus Galloway has published books. Comedy is rocketing to a whole new level, with huge stadium public shows and local talent being headhunted for international television and festivals. These are truly exciting times for South African comedy. Many years ago, my mentor told me to “keep it clean and you’ll always be on the scene.” That’s worked for my business. But many other comedians enjoy politics, satire and the thrill of shocking. It works for them, so good luck to them. I believe it’s important to find what you’re good at and give it all you’ve got. Everyone enjoys a different type of comedy so, as a comedian, you need to find your niche. Big businesses like to get involved with comedy ventures as sponsors. Look at all the opportunities that the introduction of the Comedy Central Africa channel has brought about and in which the business world wants a share. What I’ve learnt about the comedy business is to: harness the power of social media; be creative, inventive and brave; ask for help when you need it; always want more; and invest your energy in what you’re good at— while never forgetting the people who helped you on the way up. For me, there’s nothing that beats the feeling that comes from making people happy. Having them clap, scream and belly-laugh, filling a venue, and getting a great review are my highs. Then selling a DVD or just being asked for an autograph makes me walk on air. The business of comedy is not for big girls who cry, but for those who are prepared to put on their big-girl panties and tough it out. Barry “My Cousin” Hilton is one of SA’s most outstanding comedians and has performed all over the world, including as the first South African to do a show at the prestigious comedy club, The Improv, at Harrah’s Caesars Palace in Las Vegas. He is also a corporate entertainer, motivational speaker and entrepreneur, having successfully launched the My Cousin online merchandise store at www.mycousin.co.za.
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