Fast Company SA - Oct 2014 LAUNCH EDITION

MARK SHUTTLEWORTH REINVENTED

AVATAR CREATOR — JAMES CAMERON

iTUNES NEEDS DR. DRE

SOUTH AFRICA U S A’S 2 0 1 4 M A G A Z IN E OF THE YEAR LAUNCHES IN S A

HOW THE WORLD’S DESIGN CAPITAL IS REDEFINING CREATIVITY

4 Myths About Apple Design

Creative Lessons From SA CEO S Wyzetalk Yuppiechef Rekindle Learning OCTOBER 2014 FASTCOMPANY.CO.ZA

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Jack Dorsey The man behind the World’s first TWEET

What Zuck

Won’t Tell You About Facebook HIS AUDACIOUS PLAN TO DOMINATE OUR MOBILE FUTURE

IF YOU ARE GOING TO TAKE A LEAF OUT OF THIS BOOK,

START WITH THE

FIRST PAGE.

FROM AWARD-WINNING ENTREPRENEURS “IF YOU’RE AFRAID OF LOSING MONEY, YOU WILL NOT MAKE IT TO SUCCESS.” – Hamdi Ulukaya, Founder of Chobani, 2013 World Entrepreneur Of The Year

“THE MORE YOU PUT IN, THE MORE YOU GET OUT. THE MORE YOU PUT IN, THE MORE YOU GET OUT. THE MORE YOU PUT IN, THE MORE YOU GET OUT.” – Donna Allie, Founder & President of Team Clean, 2013 EY Award Winner

“YOU HAVE TO BE PASSIONATE ABOUT SOLVING THE PAIN OF YOUR CUSTOMERS. THE DRIVE HAS TO COME FROM SOMEWHERE OTHER THAN MONEY.” – Philip Anson Jr., CEO of STS Aviation

“ASK POWERFUL QUESTIONS. WHEN SOMEONE SAYS ‘NO’, ASK WHY.” - Kathy Ireland, Founder, CEO & Chief Designer of Kathy Ireland Worldwide

“FAILURE DOES NOT MEAN STOP, IT’S SIMPLY A U-TURN TO KEEP GOING.” – Lisa Williams, Founder & CEO, World Of EPI

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CONTENTS

COVER STORY 64

Facebook Everywhere CEO Mark Zuckerberg has an audacious plan to make his social network more relevant than ever

BY AUSTIN CARR

FE ATURES 30

Back to Square One Jack Dorsey’s dazzling startup promised to transform the credit and finance industry. But has his company lost its edge?

BY AUSTIN CARR

50

Designing the Soul of a City Cape Town, World Design Capital 2014, has undertaken to create a new future to heal some of the scars of apartheid

BY LOUISE MARSLAND

CEO Mark Zuckerberg has launched ­Facebook on an aggressive and potentially brilliant strategy—one that has very little to do with the company you think you know based on your desktop use of its social network.

4 FASTCOMPANY.CO.Z A OCTOBER 2014

Contents

NEXT 18

Four Myths about Apple Design A rare inside look at the company’s process, from an alum who spent seven years in Cupertino

BY MARK WILSON

88

Why Apple Needs Beats Music is central to the company’s brand identity, but iTunes has become stale. Can Dr. Dre’s Beats get Apple back on track?

BY JJ MCCORVEY

CRE ATIVE CONVERSATIONS 22

A Recipe for Success Yuppiechef is changing the face of e-commerce in South Africa, one kitchen tool at a time

BY MIRIAM MANNAK

42

Everyone on the Same Page Gys Kappers’ social business software product, Wyzetalk, allows companies to communicate, collaborate and innovate

BY EVANS MANYONGA

56

“The second you think you’re an auteur, you’re sunk” US film director James Cameron talks deep-sea exploration, new tech, virtual reality—and the managerial style he calls “total radical transparency”

BY JOSH ROTTENBERG

78

A World Made More Open Mark Shuttleworth is inspiring the same radical, innovative collaboration that launched his career

BY CHRIS WALDBURGER

Yuppiechef stands out because of the way it operates—from website to customer service. “We still operate as if we were that small company of 2006,” says cofounder Andrew Smith.

6 FASTCOMPANY.CO.Z A OCTOBER 2014

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Contents

REGULARS 10 From the Publisher 12 From the Editor 14 The Recommender 26 Wanted Social business, Little Sun, is literally lighting up the world with its solar-powered LED lamp

28 Man and His Machines What to really expect from artificial intelligence—today and tomorrow

BY OM MALIK

40 Prototype

The Arctic Harvester is a floating hydroponic farm and village that gathers and utilises runoff from icebergs

48 Wanted As far as innovative jeans go, Woolworths’ green denim has to be the new benchmark

60 Fast Cities To protect against future disasters, cities are adding a new job: chief resilience officer

BY MATT MCCUE

62 My Way Melanie Perkins, an Aussie entrepreneur, went to San Francisco for funding. She got it—along with a lesson in making great hires

BY NICHOLAS FONSECA

84 My Way After successfully launching and selling a majority stake in her first business, Rapelang Rabana’s instincts have led to her next project, Rekindle Learning

BY CHANA BOUCHER

86 The Great

Innovation Frontier

Innovation happens in unlikely places, often on the front line where the problems are actually playing out

BY WALTER BAETS

92 Fast Bytes 96 One More Thing A digital detox can be as reinvigorating as an island getaway—but routine, short tech breaks can be even more refreshing

BY BARATUNDE THURSTON

8 FASTCOMPANY.CO.Z A OCTOBER 2014

When trying to find the right technical co-founder for her business, Canva, Melanie Perkins went to every conference, event and talk—even cold-calling people and emailing others on LinkedIn. “Eventually, when we got the right person, it made all the difference.”

PUBLISHER AND EDITOR-IN-CHIEF Robbie Stammers

robbie@fastcompany.co.za

EDITOR Evans Manyonga

evans@fastcompany.co.za

ART DIRECTOR

BACK OFFICE SUPPORT

stacey@insightspublishing.co.za

Managing Director: Rita Sookdeo Account Manager: Ghameeda Idalene

Stacey Storbeck-Nel

CHIEF SUB-EDITOR Tania Griffin

CONSULTING EDITORS Louise Marsland Anneleigh Jacobsen

ADVERTISING SALES DIRECTOR Keith Hill

keith@insightspublishing.co.za

ADVERTISING MANAGERS

Kyle Villet, Andy Nicholson, Wayne Malan

OFFICE MANAGER Taryn Kershaw

taryn@insightspublishing.co.za

SOCIAL MEDIA MANAGER Shan Routledge

shan@insightspublishing.co.za

SOUTH AFRICAN EDITORIAL BOARD

BOSS (Pty) Ltd

DIGITAL PLATFORMS

By Digital Publishing Charles Burman Catherine Crook

PRINTER

CTP Printers

DISTRIBUTION On The Dot

Joe Mansueto Mansueto Ventures

EDITOR

Robert Safian

PUBLISHER

Christine Osekoski

EXECUTIVE EDITORS Noah Robischon Rick Tetzeli

SPECIAL THANKS TO:

DIRECTOR, NEW BUSINESS VENTURES

taryn@insightspublishing.co.za The incredible team at Fast Company in New York, Rob Cowan, the team at WDC2014, Dr Iqbal Survé, Takudzwa Hove, Warren Brewis, Vasantha Angamuthu and Zenariah Barends, Maud Nyandoro and Verona Dante

PUBLISHED BY

Bill Shapiro

ASSOCIATE PUBLISHER OF GLOBAL MARKETING Erica Boeke

GLOBAL EDITIONS DIRECTOR Bernard Ohanian

MANAGING EDITOR Lori Hoffman

CREATIVE DIRECTOR Florian Bachleda

EDITORIAL CONTRIBUTORS

PHOTOGRAPHY DIRECTOR

Austin Carr, Louise Marsland, Chris Waldburger, Mark Wilson, JJ McCorvey, Miriam Mannak, Josh Rottenberg, Om Malik, Matt McCue, Nicholas Fonseca, Chana Boucher, Walter Baets, Baratunde Thurston Cover: Greatstock/Corbis Outline/Jill Greenberg Art Streiber, Studio Olafur Eliasson, Daniel Salo, Raymond Beisinger, Dan Monick, Jeff Lysgaard, Shotopop,Pamela Littky, Greg Kletsel, Christopher Morris, Melissa Golden, Kevin Van Aelst, Stanley Chow and Celine Grouard, Kyle Bean, Marco Goran Romano

CHAIRMAN

SUBSCRIPTIONS

Louise Marsland, Anneleigh Jacobsen, Pepe Marais, Alistair King, Koo Govender, Abey Mokgwatsane, Kheepe Moremi, Herman Manson, Ellis Mnyandu, Thabang Skwambane

ARTISTS

FAST COMPANY INTERNATIONAL TEAM

Sarah Filippi

PRODUCTION DIRECTOR Carly Migliori Managing Director: Robbie Stammers Physical address: 174A Main Road, Claremont, 7700, Cape Town Postal address: PO Box 23692, Claremont, 7735 Telephone: +27 (0) 21 683 0005 Websites: www.fastcompany.co.za www.insightspublishing.co.za

PRODUCTION ASSOCIATE Miriam Taylor

EDITORIAL ASSISTANT Sarah Lawson

CHIEF FINANCIAL OFFICER Mark Rosenberg

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

10 FASTCOMPANY.CO.Z A OCTOBER 2014

FROM THE PUBLISHER

T H I S I S A M O V E M E N T, NOT JUST A MAGAZINE

This is the slogan Fast Company uses overseas, and it could not be more apt. NOW the Movement has finally reached our shores. I was bowled over by the response from all and sundry when they heard we were launching the magazine in South Africa. It has honestly been beyond my wildest expectations, to the point that random strangers have hugged me at functions, saying: “You beauty! We have waited so long for this to come to our country!”

Now we have finally launched, one year after I first began talks with the team in New York.

As far as business magazines go locally, to me they seem stiff and antiquated; set in their ways, running the same ‘old-school’ profiles we have covered ad infinitum. What about the new train of thought, and the innovation and creative twists and turns that are affecting our businesspeople and environments? Where and why are they not being covered?

I came across Fast Company at a friend’s house one night and, after paging through it, I had an epiphany. Why don’t we have this in South Africa? This is what we are screaming out for! Fast Company encompasses everything that the new businessperson is: innovative, creative, one who rebels and pushes against the business model of days long gone and embraces the changes— preferably without the suit-and-tie mentality of yesteryear. I liked this a lot!

So I contacted the publishers and, lo and behold, we connected. We had the same values and belief in what we ultimately know is the way business is now run and where it is going at such a rapid rate.

I flew to New York and met up with the team of Robert Safian, Bill Shapiro, Bernard Ohanian, Florian Bachleda and Christine Osekoski. I spent a week with them in their awe-inspiring offices on the 29th floor of the World Trade Center of Manhattan that overlooks the Twin Tower memorial pools.

I soaked in all the information given by all the key players who had made Fast Company what it is today. It was a truly inspiring week, I can assure you.

It has been six months since my return from that epic visit, and the bonds were tied and minds linked. We were going to become the first English edition of Fast Company outside the United States—the only other global edition so far being Fast Company China.

By the way, Fast Company does a staggering print circulation of almost a million copies a month in the US. Most exciting has been the fact that content for the Fast Company model in South Africa is

certainly not going to be a problem! In fact, we have too many people who are pushing the boundaries of old, conservative business and innovating to such impressive heights that I have actually realised South Africa may very well be ahead of most of the modern-world equivalents, if I may be so bold as to say! This, coupled with the outstanding editorial from Fast Company in the US, means we can offer local readers compelling content they have never had access to before. On that note, we must send out a very big thank-you to the US team, who have been incredible in their support and advice in launching this inaugural South African edition.

To steal from the award-wining editor of Fast Company in the States, Bob Safian: “I am often asked, what is a ‘Fast Company’? This is not a simple question to answer. To be a Fast Company is less a condition than an aspiration; a mindset. True maturity is not about reaching a destination. It is all about making the best of the opportunities in front of us.”

So here we are, finally! As Bob says, we have not reached our destination, but we are starting a new and exciting journey together.

We hope you enjoy the ride as much as we do.

Robbie Stammers

Publisher robbie@fastcompany.co.za @daStamman

OCTOBER 2014 FASTCOMPANY.CO.Z A 11

FROM THE EDITOR

A SPECIAL MOMENT An opportunity to get the thoughts of the leading innovative thinkers—locally and globally—does not ordinarily arrive on our shores. Finally, we have a title that can appeal to the fast-paced world of innovation, thought leadership and progressive business conversations; a title that was crowned winner of the magazine industry’s most coveted prize, Magazine of the Year, at the United States National Magazine Awards in May.

Fast Company is the most progressive business media-brand in the world which inspires a new breed of innovative and creative thought leaders who are actively inventing the future of business. As such, Fast Company SA will strive to bring you the quality and engaging dialogue that has defined and elevated this publication.

In our launch edition, we have brought you informative narratives from leading interesting and inspiring personalities, all in the quest to drive proactive leadership, change and innovative thinking.

One such personality who has thought out of the box and driven innovative thinking in the ultramodern era has been Facebook CEO Mark Zuckerberg (see page 64). He is our cover personality for this edition and, in my view, someone who has redefined how the world interacts. He is especially relevant to us in South Africa because of the wide use of Facebook. We take a closer look at Facebook’s audacious plan to dominate our mobile future by tapping into the action behind the screen.

Locally, we dig deeper into the projects of the World Design Capital—the prestigious title awarded to Cape Town for 2014. The projects being implemented are not only improving the Mother City and its infrastructure, but also driving innovation and novel thinking.

We also have conversations with some of the leading CEOs in the tech sector.

I am honoured to be editor of this title and look forward to an informative journey that will enhance my creative culture. We have enjoyed putting together the launch edition of Fast Company SA; we hope you embrace the inspiring aspects from the conversations within.

Evans Manyonga

evans@fastcompany.co.za @Nyasha1e

12 FASTCOMPANY.CO.Z A OCTOBER 2014

Supported by

Media partner

THE RECOMMENDER

What are you loving this month?

ANNELEIGH JACOBSEN Founder, The Brand Conservatory

THUNDERCHILD

I love this wine—it’s made by a group of winemakers in the Robertson area, from grapes that grow on the grounds of Die Herberg Kinderhuis/Children’s Home in the town. One hundred percent of the proceeds go to funding the home’s work with kids. A really creative project, and a great wine, too.

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Pepe Marais

Founder & MD, Joe Public advertising agency

T H E G R E AT N E S S G U I D E

BY R O B I N S H A R M A

In a world that is sinking in a sea of mediocrity, we are in desperate need of Greatness. And that Greatness is within every single one of us.

The trick is to unlock it.

And there’s no better key available than The Greatness Guide, by the author of The Monk Who Sold His Ferrari. It found its way onto my bedside table during the last month, and has left me with inspiration for many months to come!

14 FASTCOMPANY.CO.Z A OCTOBER 2014

Chantell Ilbury

Independent scenario strategist, facilitator, speaker and bestselling business author

THE WIND IN THE WILLOWS,

BY K E N N E T H G R A H A M E As a scenario strategist, I spend much of my time joining seemingly unconnected dots, and my reading behaviour seems to reflect this: I have several books ‘open’ at any time, covering politics, history, science, business, biographies— seemingly anything that pops onto my radar, fiction and nonfiction. But there’s one I always keep close, and read over and over: The Wind in the Willows—the classic story of Mole, Rat, Badger and Toad. The characters capture the concept of living in a moment, and highlight the tensions between control and abandon—something we all grapple with in business and in life; the river representing the course of that life we lead. Although it was written just over a hundred years ago, the context of that time is just as relevant today.

Thebe Ikalafeng

Global African brand and reputation architect, adviser and author

M E AT J U N C T I O N

THIS FAST-GROWING SHISAN YAMA (BR A AI) FAST-FOOD BR A ND ORIGIN ATING FROM DURBA N H AS H AULED TR A DITION A L A FRICA N LOCA L CUISINE INTO M AINSTRE A M SUBURB S. IT ’S A BOU T TIME A FRICA N ENTREPRENEURS SEEK INSPIR ATION A ND INNOVATION AT HOME. IT ’S A WHOLESOME FE AST TH AT WILL FILL YOU FOR DAYS. JUST DON’ T PL A N TO WORK OR BE PRODUCTIV E A F TER YOUR ME A L…

Ellis Mnyandu

Group executive, Independent Business Media & editor of Business Report

T H I N K I N G , FA S T A N D S L O W

BY D A N I E L K A H N E M A N Koo Govender Group CEO, VWV Group

Currently I am reading this book which I bought at one of the dutyfree shops at Dubai International. Books are about the only thing I buy while in transit. Written by the Nobel Prize-winning economist and psychologist, it represents cutting-edge insights into how we as humans think or how our mind works. Read it, and you will never think the same way about yourself and the rest of the human species. Kahneman’s book is about helping one “improve the ability to identify and understand errors of judgment and choice”.

THRIVE

BY A R I A N N A H U F F I N G T O N I love this book because it’s authentic and relevant. Huffington shares her personal experiences and also reminds us that we are not just our résumés. This book resonates with my philosophy: life is not only about success—you have to be significant. Thrive also pushes toward creating a lifestyle where success is not only measured by money and power, but something more meaningful.

OCTOBER 2014 FASTCOMPANY.CO.Z A 15

The Recommender

APP ALLEY Alexandra Fraser

Alistair King

Chairperson, Silicon Cape Initiative

Co-founder & chief creative officer, King James Group

K E X P. O R G

EXPIRES

I’m a huge indie-music fan, but have always struggled to find new bands and new material.

Then I stumbled upon KEXP 90.3 FM Online— music sanity. They’re basically the indie-music lover’s church. Based in Seattle, they stream live on kexp.org and post in-studio performances to YouTube which really give you a sense of the band’s character.

With starting a new business and keeping track of all my personal administration, I’m always on the lookout for new tools to make life easier.

Expires is an app that alerts you when your important items such as passports, credit cards, driver’s licence, birthdays and deadlines are about to expire. The app allows you to specify your own items, so the list is literally endless. It’s available through Apple’s App Store and Windows Store.

Gareth Cliff

Founder, CliffCentral.com

FITBIT

Ivanka Trump

Executive VP of development and acquisitions, The Trump Organization

E TA The ETA app by Eastwood tells you how long it will take you to get somewhere in current traffic. This is a lifesaver for me when I have to rush from a meeting to pick up my children.

This app and its wearable wristband track your steps, food consumption, water consumption, sleep, exercise, distance covered, and a bunch of other vital statistics that help you keep track of your fitness and health. I’m hell-bent on getting in shape for the summer, so I’m meticulously monitoring every number.

w

Herman Manson Editor & publisher, MarkLives.com

SNAPSCAN We’ve all seen the TV ad for this new payment app being pushed by Standard Bank and developed by a tech incubator based in Stellenbosch. People snap their fingers and shit appears: a radio, clothes, a haircut, coffee and cake. Snap your fingers and presto! Unfortunately, the ad fails to inform one how easy it is to sign up and use the app. And it really is brilliant. You download the app (www.getsnapscan.com), register, take a pic of your credit card and key in your CCV number, and you’re ready to go. For payment, you get the bill, scan the establishment’s QR code, type in the settlement amount and your PIN—and it’s done.

No strangers handling your credit card, no long waits, just friendly and efficient. SnapScan can be used with any MasterCard and Visa credit or cheque card, as well as selected debit cards, issued by any bank in South Africa. Both informal and formal businesses can register for SnapScan. One downer: the app isn’t yet supported on a Windows Phone.

16 FASTCOMPANY.CO.Z A OCTOBER 2014

Aki Anastasiou

Technobyte radio show host, Talk Radio 702 & 567 CapeTalk

QUIZUP

THIS IS ONE OF M Y FAVOURITE A PP S BECAUSE IT K EEP S M Y MIND ENGAGED A ND I GE T TO LE ARN NE W THINGS. THE A PP IS A SOCIA L QUIZ GA ME. ONCE YOU REGISTER, YOU CA N CHOOSE TO PL AY WITH A FRIEND OR A R A NDOM OPPONENT. WITH OV ER 4 00 CATEGORIES A ND 220 000 QUESTIONS, YOU NE V ER GE T BORED. THE FASTER YOU A NSWER, THE MORE POINTS YOU GE T; THE MORE OPPONENTS YOU BE AT, THE HIGHER YOUR R A NKING BECOMES. BE WARNED: QUIZUP IS A DDICTIV E!

www.whiteboard-paint.co.za hello@whiteboard-paint.co.za For a full turnkey service, visit our website to find your nearest reseller.

N E X T

Jobs training: “The people who thrived had a passion to learn from Steve,” says former user-experience evange­l ist, Mark Kawano.

TRADE SECRETS

FOUR MYTHS ABOUT APPLE DESIGN A rare inside look at the company’s process, from an alum who spent seven years in Cupertino

By Mark Wilson

A

pple is synonymous with upper-echelon design, but the company reveals very little about how it works. Most employees aren’t allowed inside the fabled design studios, and journalists are left piecing together interviews, or outright speculating about how Apple innovates and what it’s really like to be a designer at the company.

But now we have Mark Kawano. Before co-founding Storehouse, an app that enables users to stitch together photos into a shareable narrative, Kawano spent seven years as an Apple senior designer, where he worked on Aperture and iPhoto. Later, he became Apple’s user-experience evangelist, guiding third-party app iOS developers to create software that felt right on Apple’s platforms. Kawano was with the company during a critical moment, as Apple released the iPhone and created the wide world of apps.

In an exclusive interview, Kawano spoke frankly about his time at Apple—and debunked four myths about the company and its people.

MYTH #1: APPLE HAS THE BEST DESIGNERS “The biggest misconception is that Apple products turn out to be designed better, and have a better user experience, or are sexier . . . because they have the best team in the world,” Kawano says.

But in his role there, meeting with Fortune 500 companies on a daily basis, he absorbed a deeper truth. “It’s actually the engineering culture and the way the organisation is structured to appreciate and support design. Everybody there is thinking about it.

And that’s what makes everything about the products so much better.”

People often say that Steve Jobs created this structure. But the structure doesn’t work because of a top-down mandate, Kawano says. It’s an all-around mandate, ensuring designers don’t have to fight to be heard.

How do you build a culture like this?

Much like Google hires employees who think like Googlers, Apple hires employees who are already on board, Kawano notes. “It’s not this thing where you get some special wings or superpowers when you enter Cupertino,” he says.

When designers have this much systemic support, they’re able to do far more than they could at other companies. (And when they’re poached and put into a less supportive environment, this is why they’re not always able to bring the Apple magic with them.)

M Y T H # 2 : A P P L E ’ S T E A M I S M A S S I V E Facebook has hundreds of designers. Google may have 1 000 or more. But when Kawano was at Apple, its core software products were crafted by a relatively small group of roughly 100 people. “I knew every one of them by face and name,” Kawano says.

For the most part, Apple didn’t employ specialists.

Every designer could both create icons and new interfaces, for instance. And because the company hires like-minded engineers, the relatively skeleton design team could rely on them to begin the build process on a new app interface, rather than having to initiate their own mock-up first.

But this approach may be changing.

“Having a small, really focused organisation made a lot of sense when Steve was there, because so many

OCTOBER 2014 FASTCOMPANY.CO.Z A 19

Next

Trade Secrets

Groupthink: Apple’s designers, led by Jony Ive, are exhaustive collaborators.

MYTH #3: APPLE CRAFTS EVERYTHING WITH INTENTION Apple products are often defined by small details. When you type a wrong password, say, the password box shakes in response. These moments are tough 20 FASTCOMPANY.CO.Z A OCTOBER 2014

to explain logically, but make sense on a gut level, and Kawano says many other companies hold up product development as they try to craft similar tricks. But they shouldn’t, he says: “It’s almost impossible to come up with really innovative things when you have a deadline and a schedule.”

Kawano says Apple designers (and engineers) will often come up with clever interactive ideas—such as 3D cube interfaces or bouncy physics-based icons— during a bit of downtime, and then they might sit on them for years before they make sense in a particular context.

“There wasn’t a formalised library [of these ideas],” Kawano says. “It was more having a small team and knowing what people had worked on, and the culture of being comfortable sharing.”

M Y T H # 4 : S T E V E J O B S ’ PA S S I O N FRIGHTENED EVERYONE It was an old bit of lore at Apple: If you’re a designer, take the stairs—because if you met Steve Jobs in the elevator, he’d ask what you were up to. One of two things would happen next: He’d hate it, and you might be fired; or he’d love it, and you’d lose every foreseeable night, weekend and vacation to the project he just embraced.

“That’s where, a lot of times, he would get a bad rap,” Kawano says. “But he just wanted the best thing and expected everyone else to want that same thing. He had trouble understanding people who didn’t want that, and wondered why they’d be working for him if that was the case. Steve had a low tolerance for people who didn’t care about stuff.”

Art Streiber

ideas came from him,” Kawano says. “As Apple has shifted to a company with multiple people at the top, it makes sense that they’re growing the team in interesting ways.”

Jony Ive, who heads usability across hardware and software, is reported to have brought in some members of the marketing team to help remake iOS 7. It’s a coup for marketers to be deep in the trenches with designers and engineers. That level of collaboration is unprecedented in the industry.

FAST COMPANY PROMOTION

THE NEW T O Y O TA YA R I S Toyota has invested around R1.2 billion, engineered 1 000 new parts and spent 576 000 man-hours refining the new Yaris. The result is a thorough visual refresh, inside and out; the adoption of upmarket cabin textures and materials; as well as a host of under-theskin modifications to make the new Yaris a whole lot more desirable.

“A

ssertive, contemporary styling with a distinctly European flavour and a feisty new attitude”, is how Glenn Crompton, vice president of marketing for Toyota SA Motors, pitches the revamped hatch.

“Yaris has always been a sound, rational choice.

But what we wanted—and feel we have now achieved with the latest model—is a car that not only connects with our customers’ brains, but also with their hearts.”

After exhaustive research conducted across several platforms including press analysis, customer clinics and dealer feedback, Toyota Europe identified three key areas where the current generation Yaris scored highly: outstanding roominess, powertrain efficiency and standard features, making it the smart choice.

In the area of emotional appeal, however, there was room to improve. The focus was therefore placed on upgrading the aesthetics, most notably exterior styling and interior plastics, as well as honing in on driving pleasure by enhancing driveability, ride comfort and noise levels.

UPGRADES • A rresting, emotive design and a major advance in sensory quality • Revised three-cylinder 1.0-litre engine; peppy yet frugal 1.3-litre engine; and highefficiency 1.5-litre petrol/electric hybrid powertrain • Modified vehicle dynamics for enhanced driveability and ride comfort

A fourth element has been factored in, and that’s value for money. As Crompton points out, “the new Yaris petrol models are arguably the best value proposition in the highly competitive B segment. Quality finishes backed up by a comprehensive suite of standard kit ensure it stays ahead of the pack. Not forgetting, of course, the unique proposition of its hybrid powertrain—still the only vehicle of its kind in this class.”

The new Yaris is available with three engine choices: two petrol, and a hybrid. The full hybrid system, a first for this segment, benefits from adjustments that have brought its carbon emissions down further, from 88g/km to 82g/km. Extremely fuel-efficient (3.6 litres in the combined cycle) and clean (virtually zero NOx and particulate emissions), this innovative powertrain is at the cutting edge of technology.

Website: www.toyota.co.za Twitter Handle: @ToyotaSA Twitter Hashtag: #toyotagetsmypulseracing Facebook: Toyota SA

PRICING 1.0 1.3 1.3 Multidrive S Hybrid

R167 900 R194 300 R206 500 R276 900

OCTOBER 2014 FASTCOMPANY.CO.Z A 21

Eye on expansion: “We are happy where we are at, but there is a lot of room to grow—in as well as outside South Africa,” says Yuppiechef co-founder, Andrew Smith.

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CRE ATI V E CON V ERSATION

A RECIPE FOR SUCCESS With its massive and growing product offering, quality assurance and free delivery policy, Yuppiechef is changing the face of e-commerce in South Africa

By Miriam Mannak

Photograph by Sean Tucker

It all began eight years ago in a living room in Cape Town’s southern suburbs, and it did so with a very noble endeavour: equipping South African foodies with the world’s very best kitchen tools. Yuppiechef has since grown from strength to strength, winning award after award. Fast Company SA spoke to co-founder Andrew Smith about the past, present and future.

Andrew Smith and Shane Dryden had been testing the South African e-commerce waters for a while before they came up with a concept that would later become the prime online destination for South Africa’s homecook community. From Le Creuset pots, Wüsthof knives, and Jamie Oliver pasta machines to KitchenAid mixers and Master Class meat thermometers—Yuppiechef has it all, and more. Think wine. Think beer. Think cookbooks and online cooking classes. The list is endless.

It is almost unimaginable to think how the venture started out: from a lounge in Plumstead on 11 August 2006. “We made our first sale five days after our website

went live—to Shane’s dad. Business was slow in the beginning. It took us a year to make our first 200 sales,” Smith recalls.

“Because we weren’t a funded business, Shane and I did everything ourselves for the first few years: from the marketing, running the website, and processing orders to customer service, packing the boxes, and shipping them. It was just two guys in a lounge. While we grew slowly, we did in fact grow. That was what kept us going.”

Slow and small no longer apply to Yuppiechef, which moved to a proper office in 2008. The company currently sells hundreds of pans, knives, mixing bowls and other utensils per day while employing eighty staff. Besides the massive and growing product offering, Yuppiechef’s physical playing field has expanded as well. Smith: “We have started shipping products outside of South Africa, including Botswana, Namibia, Mauritius and the United Arab Emirates.”

The recipe for Yuppiechef’s success comprises a handful of key ingredients including the fact the company only sells the best of the best. Whether you are looking for an apron, spatula or an entire pan set, all products on offer are made by world-class manufacturers. Quality comes first.

Secondly, the retailer—as opposed to many of its South African counterparts—delivers for free in South Africa, irrespective of the order’s value. “It forms part of our strategy to get more South Africans to shop online,” Smith says.

“When we started, e-commerce in this country was very small. Not many people were prepared to make online purchases. Lack of trust was one of the main reasons, as was having to pay for delivery. We

OCTOBER 2014 FASTCOMPANY.CO.Z A 23

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Creative Conversation

“Every order goes out with a handwritten ‘thank you’ card. It is our way to maintain that level of human interaction between us and our customers.”

wanted to take away one of those hurdles. By doing so, we hope that once you try us out with a smaller purchase, you will keep coming back for bigger ones.”

Delivering for free may sound like a no-brainer, but reality is considerably different, says Smith: “South Africa is a difficult place to deliver. People live very spread out. Sending something to remote parts of the country costs much more than sending it to cities like Cape Town or Johannesburg.”

Besides its product offering and free delivery policy, Smith says Yuppiechef stands out because of the way it operates—from website to customer service. “We still operate as if we were that small company of 2006. We have put together a team of people who care about every single order made by every single customer, just like we did back in the day,” he says. “This is backed up by a website that works and an efficient, friendly customer service.”

When it comes to the latter, Smith and Dryden took inspiration from successful overseas online retailers including Zappos. The world’s largest online shoe store, founded in 1999, is famous for how it interacts with its customers. One particular story doing the rounds revolves around a woman who wanted to return a pair of boots. Her husband had ordered them shortly before he died in a car accident. The next day, the caller in question was handed over a bunch of flowers—sent by the customer service agent to whom she had spoken.

“Zappos believes that a strong service culture, with a human touch, makes customers come back. We have the same philosophy. That is why every order goes out with a handwritten ‘thank you’ card. It is our way to maintain that level of human interaction between us and our customers,” Smith says, explaining that this tradition started in November 2006, the day Yuppiechef made its first sale to a total stranger.

“Her name was Denise. The feeling that someone we didn’t know had given us money and trusted us to send her what she had paid for was incredible,” he continues.

“So Shane and I sent her a handwritten letter to thank her for the purchase. We have done that ever since. We even hire card writers.”

All of this and more has resulted in a cabinet full of awards including the SA eCommerce Award in the 24 FASTCOMPANY.CO.Z A OCTOBER 2014

E V E RY T H I N G BUT THE KITCHEN SINK The reason Smith and Dryden decided to sell kitchen tools—of all the products one can possibly retail online—is simple.

“Firstly, everyone has a kitchen and therefore everyone needs tools and equipment.

Secondly, the kitchen department is incredibly broad, making it interesting,” Smith says. “Thirdly, we decided to ride on the back of the global home-cooking revolution, inspired by TV programmes such as MasterChef. Being able to cook has become a very desirable skill—for women but also for men. People are now even giving each other frying pans as gifts. Ten years ago, that was an absolute no-no.”

category Best eCommerce Website/Store for the past five years running (2010–2014), as well as Best Shopping Process in 2013. In 2012, Yuppiechef also took home the award for Best Shopping Process, while being the first runner-up for Best Design, Standards & Ease of Use. While he is proud of these acknowledgements, Smith doesn’t regard the accolades as reasons to sit back and relax. “We are happy where we are at, but there is a lot of room to grow—in as well as outside South Africa,” he says. “Eventually, we would like to become a global brand and to have an impact on the world in terms of how people cook and eat together.

We truly believe that what we are doing in South Africa has value for the rest of the world.”

ONLINE SHOPPING IN SA Compared to other parts of the world, South Africa’s e-commerce sphere is quite small. A MasterCard study from 2013 shows that online shopping makes up 2% of the total retail market in this country. In the United States, e-commerce has a 17% retail share.

Smith stresses that the Rainbow Nation has made, and is making, progress. “In 2006, hardly anyone shopped online unless they really had to, or unless it was something they couldn’t get anywhere else,” he says. “Over the past two years, however, South Africa has been moving closer to where the rest of the world is at. It is very exciting to see how large retailers including Woolworths and Mr Price are starting to take online shopping seriously.”

Consumers in South Africa are no longer shopping online because they have to. Smith: “They shop online because it is convenient and because they trust the process. South Africa is making good progress. As a result, I predict some good investment in e-commerce. The future for online shopping in South Africa is looking very bright.”

ex VAT.

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WANTED

LET THE SUN SHINE IN A social business is literally lighting up the world

By Louise Marsland

Photograph by Studio Olafur Eliasson

Functional and beautiful: The Little Sun lamp has been described as “the world’s most effective solar cell”.

26 FASTCOMPANY.CO.Z A OCTOBER 2014

Little Sun is billed as “a work of art that works in life”. That is the crux of sustainable design and the clean-slate brand movement that characterises conversations in design today. The Little Sun product embodies all that is good in our world of design and innovation.

And in a world where an estimated 1.2 billion people still live without electricity, a sustainable product such as Little Sun brings quality of life and light to communities as an affordable, sustainable and reliable light source.

The product is a quality solar-powered LED lamp, but what it is in reality is a social business and a global project established to—literally— light up the world.

Designed by Danish–Icelandic artist Olafur Eliasson and engineer Frederik Ottesen, they describe the business as “a social business and global project addressing the need for light in a sustainable way that benefits communities without electricity, creates local jobs and generates local profits”. Their focus is on empowering local businesses that become distributors of Little Sun. How it works is elegance and simplicity combined: you wear it, attach it to a bicycle or strap it to your backpack, and five hours of charging in the sun produces 10 hours of soft light or four hours of bright light. And what we certainly have in Africa in abundance is sunlight! It has also been described as “the world’s most effective solar cell”.

Little Sun was launched in 2012 at the Tate Modern in London and is distributed in eight African countries: Zimbabwe, Uganda, Kenya, Burundi, Senegal, Ethiopia, Nigeria and South Africa; and further afield to Europe, the United States, Canada, Australia and Japan.

This is their stated mission: firstly, to provide clean, solar-powered light to as many in the world as possible; and secondly, to strengthen off-grid communities from the inside out, training local entrepreneurs to empower themselves and others.

The business model is unique, in that they sell Little Sun products at a higher price in ‘on-grid’ areas in the world—those that have access to electricity, using that on-grid investment to kickstart local businesses in off-grid areas.

At Design Indaba earlier this year in Cape Town, Nigerian brand guru Ije Nwokorie—who is CEO of Wolff Olins London, which helped launch Little Sun—referenced Little Sun as an incredible example of a “work of art that works in life” and said that products should indeed be both functional and beautiful. “In Africa, we’re surrounded by messy problems. Designers need to think about how to use creativity to solve these problems.”

Little Sun was recently inducted into the permanent design collection of the prestigious Parisian museum, the Centre Pompidou; and was nominated for Design Museum’s 2013 Designs of the Year Award.

To add some sunshine in your life, visit www.littlesun.com.

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MWEB

MEANS BUSINESS MWEB Business, part of the Naspers Group and widely recognised as one of South Africa’s foremost, business-focused Internet Service Providers (ISPs), has quietly been transformed into an efficient, cost-effective and flexible outsourced IT department for a growing number of South African businesses.

Combining world-class infrastructure - including one of the country’s most advanced networks and two data centres - with unsurpassed, personalised business support, MWEB Business delivers product-agnostic, scalable IT solutions and services to

For more than two decades, MWEB Business has been providing IT connectivity across a comprehensive country-wide network that delivers average uptime of almost 100 percent thanks to inbuilt redundancy and high security protocols.

average uptime

of almost

100% in South Africa

businesses across all sectors.

This network currently has the capacity to handle a whopping seven petabytes of data – that’s more than the data in all the

MWEB recognised many years ago that the force driving the rapid advances in business today is

research libraries in the United States – three times over.

Importantly, MWEB Business can offer its clients capacity over the most suitable connectivity mode for their needs – from bonded ADSL and fibre to 3G and satellite.

information

To stay competitive, every business must have a firm grasp of

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all the data and information it generates in its daily operations.

However, with the increasing complexities involved in acquiring, maintaining and operating the IT required to achieve this, business needs an IT partner that delivers in terms of technical know-how as well as service, support and reliability.

With its unique service-delivery model, MWEB Business is that partner.

But there’s more. In order to assist clients with everything they need to operate efficiently in the fast changing world of business, MWEB Business also provides: • VoIP solutions that take care of clients’ telephony needs;

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servers; and • a host of productivity-boosting Cloud services – with more launching in the coming months.

For more information about MWEB Business’ range of business-enhancing products and services, contact 087 700 0111 or send an email to business@mweb.com

TECHNOVORE

MAN AND HIS MACHINES F O R G E T S C I - F I . W H AT TO R E A L LY E X P E CT F R O M A RT I F I C I A L I N T E L L I G E N C E —TO DAY A N D TO M O R R O W

“I

MAGINE A MACHINE with a full range of human emotions,” says Dr Will Caster.

“Its analytical power will be greater than the collective intelligence of every person in the history of the world.” Caster isn’t man or machine: He’s actually the latest in a long line of Hollywood-created fictional characters—Johnny Depp plays him in the recent sci-fi movie, Transcendence— designed to make you feel simultaneously elated and scared about the future.

While Hollywood projects what it thinks artificial intelligence will look like, we are already starting to co-exist with actual learning machines. And instead of waiting for AI’s Godot—a machine we can converse with—what we really need are ways to use machine intelligence to augment our ability to understand our increasingly data-rich and complex environment.

The world of information has surpassed human cognitive powers. More than 100 000 tweets and nearly 250 000 Instagram photos are shared per second. Now add sensor data from accelerometers, gyroscopes and the like.

“It is not really just a human world,” says Sean Gourley, co-founder and chief technology officer of Quid, a data insights company in San Francisco.

Think about what happens when you visit a website. It may take 800 milliseconds to load, but about 20% of that time is devoted to an algorithm that takes everything it knows about you, visits an online ad exchange, offers up the spot to bidders, and serves it. In 160 milliseconds. No human could do that.

Yes, that ad will likely annoy the hell out of you, but that doesn’t mean we don’t need machines to make correlations between concepts, sentiments, events and entities and offer help in making decisions.

Google Now and Apple’s Siri may each possess the rudimentary intelligence of a six-month-old baby, but at least they’re taking information around us and putting it into a narrative that’s easily understandable

28 FASTCOMPANY.CO.Z A OCTOBER 2014

THE WORLD OF INFORMATION HAS SURPASSED HUMAN COGNITIVE POWERS, AND THAT MEANS MACHINES HAVE TO HELP US MAKE DECISIONS.

Om Malik

to average folks like you and me.

A less heralded but telling example is Jetpac, a San Francisco-based app startup. The company takes all publicly available Instagram photos and analyses them down to the pixels, as well as any tags and location data, to create automatic city guides based on what it has been able to learn.

Jetpac algorithms can look at, say, the lower half of any face it detects in photos, and if there are a lot of painted lips emerging from a single location, it may be classified as a glamorous bar or a nightclub. If it seems there are a lot of moustaches, it may be dubbed a hipster bar. Jetpac can draw inferences from the photographers and their family names, and it can distinguish between locals and tourists by seeing how often they check into a place in a specific city. It can even discern the difference between leisure and business travellers by their photos.

As intriguing as an app like Jetpac is, the future beyond it looks something like Google’s self-driving car. Although it’s still many years from commercial production, Google’s car is a good showcase for machines taking real-time data from our physical surroundings and mapping it to what’s already stored in the machine. Instead of waiting for us to make sense of it, it makes intelligent decisions.

Eventually, Google will take what it has learnt from its car project and apply it to other information it knows about us—data streams from our Android phones, Nest devices and Google Glass—creating a hybrid man-machine experience.

This brings up many moral and sociological questions: What will happen to serendipity and the joy of discovery? If we as humans struggle with Google Glass, how will we fit into this society? As Transcendence asks: Is it all really worth it? That’s one question that people, rather than a machine, will need to tackle.

The world of information has surpassed human cognitive powers. And that means machines have to help us make decisions.

Om Malik is a partner at True Ventures, an early-stage investor.

He is also founder of Gigaom, a Silicon Valley-based, tech-focused publishing company.

Illustration by Raymond Biesinger

C

M

Y

CM

MY

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CMY

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Daniel Salo

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GUTTER CREDIT TK

30 FASTCOMPANY.CO.Z A OCTOBER 2014

Art credit teekay

Jack Dorsey’s dazzling startup promised to transform

the credit and finance industry with a sweeping, digitised

vision of the future. After losing $100 million, has his company lost its edge?

By Austin Carr

Photographs by Dan Monick

OCTOBER 2014 FASTCOMPANY.CO.Z A 31

32 FASTCOMPANY.CO.Z A OCTOBER 2014

As pressure rises to boost revenue, Gokul Rajaram is revamping Square's product line.

When we meet for a walk on a grey morning in San Francisco several weeks later, Dorsey is in great spirits. He jokes about overly cautious Californians who refuse to jaywalk; and in the elevator when we bump into two police officers leaving Square headquarters, Dorsey greets them with a smile and a handshake befitting a small-town mayor.

He tells me he hasn’t read through all the feedback yet from his Square colleagues—he received more than 500 responses—and will only hint that much of it stressed the need

for more “focus” at the company. He’s being intentionally vague, of course.

When I ask what grade he’ll give himself in the self-assessment he’s writing, Dorsey tersely replies, “Not an F.” How about a C, then—or even a C-minus?

Square is no longer the high-flying startup it once was. When Twitter co-founder Dorsey launched the company in 2010, pundits heralded its potential to upend the stagnant payments space. The startup had developed a novel credit- and debit card reader, which

PREVIOUS SPREAD: ILLUSTR ATION BY JEFF LYSGA ARD

Jack Dorsey doesn’t know how to grade his performance. It’s early May, and Dorsey has just finished his annual reviews of Square’s 800 employees. He now needs to complete his own. So the Square CEO sends out a Google Doc to the entire company, soliciting feedback, but he makes two suggestions that border on the masochistic: All comments should be anonymous, and all comments should be visible to everyone inside the company. “Write whatever you want,” Dorsey tells his troops, adding that he wants to learn “where I’ve done well, where I’ve done poorly, and where I’ve completely screwed things up.”

could attach to mobile devices and let merchants accept payments virtually anywhere. The company also launched a promising digital wallet app, which enabled customers to link their bank cards with their phones to purchase goods—no more need for plastic or paper.

To an adoring press, Square had an Applelike flair for design and seemed destined to revolutionise any number of business domains: data, e-commerce, social, deals.

By early 2014, investors had plunged $340 million (about R3.6 billion) into the startup, which was valued at $5 billion (R53.3 billion).

Since then, the mood has soured. Nick Bilton’s insider tale, Hatching Twitter, painted an unflattering portrait of Dorsey as a backstabbing egotist who took more credit for Twitter’s success than he deserved. Not long after, reports surfaced that Square had delayed its initial public offering due to revenue troubles.

Then a scathing piece in The Wall Street Journal depicted Square as a company desperately searching for an exit after losing $100 million (R1.067 billion) last year. The problem? Square’s core business, processing transactions and taking a tiny cut for the effort, was simply not all that profitable.

To put a finer point on it, venture capitalist Fred Wilson recently penned a blog post suggesting that Square would soon have to make “some hard choices”.

The coming months for Square will be pivotal. As it burns through cash, the company must create new sources of revenue to justify its high valuation; in the process, it will try to prove that it can create a hugely profitable business as well as a transformative one.

Contrary to some of the most dire predictions, Square isn’t going bankrupt tomorrow. But in a culture where failing fast is a badge of honour, and where every startup—no matter how banal—aims to change the world (an ambition so cliché it was recently parodied on HBO’s Silicon Valley, which Dorsey claims he’s never seen), the idea of building a business that’s merely sustainable, rather than revolutionary, may seem worse than a flameout.

Square has done an enormous number of things right; what’s more, it has overcome an extraordinary number of hurdles just to get to this point. And yet, Dorsey admits his team

Square, by the Numbers With thin margins, tough competition and a sky-high valuation, Dorsey's company faces a triple bind Square’s Slice now faces “existential questions” about Square’s future.

Next to the graveyard of overhyped startups, there is a purgatory where companies such as Groupon and Zynga toil—successful but not relevant, almost (or barely) profitable yet inconsequential.

These are firms that, despite their promise, were never quite able to escape the clutches of mediocrity. Does Square now face the same fate?

As if to prove he and his company will never willingly accept middling success, Dorsey and Square have spent the past 12 months in a frenzy. The company has embarked on an aggressive effort to digitise more and more aspects of our financial lives: peer-to-peer money transfers, cash loans, enterprise software, online markets, ordering. It’s a risky strategy that has positioned the company not only against Google and eBay’s PayPal, but also against Amazon, Etsy, GrubHub, Yelp and a slew of traditional financial players.

Finance is arguably the last unconquered industry of Silicon Valley. “With any challenge,” Dorsey says, “there’s a fightor-flight psychological reaction: You either continue to fight, or you go away.” Obviously, he’s chosen to fight.

For a company that deals with obscure financial intermediaries and wonky regulatory issues, Dorsey has already done the difficult work of getting customers to feel passionate about Square. His talents are not so much in hard-core engineering—like, say, Elon Musk’s—than in conceptualisation and design. Dorsey is the kind of guy who can say, without irony, that invoices are ‘sexy’—and actually sound convincing. Or he’s the kind of guy who will ask his developers to alter at the last moment the screen colour of an app— as he did recently for a new product called

SQUARE TAKES A CUT OF 2.75% PER TRANSACTION:

$30bn (R327.9bn) in trans­actions processed in 2014 (projected)

On a $100 (R1 067) transaction, Square pays about $1.82 (R19.42) in $281.3m (R3bn) fees and keeps Square’s about $0.94 cut (R10) to itself.

$825m (R9bn) 2.75%

Square’s competition (payment volume) STRIPE $1.5bn (R16.4bn) SWIPELY $2bn (R21.8bn) SQUARE $30bn (R327.9bn)

ALIPAY (ALIBABA) $150bn (R1.6 trillion) (mobile only)

PAYPAL $180bn (R1.9 trillion) ($27bn (R295.3bn) from mobile)

Square’s valuation (in billions) Jan 2014 $5bn (R54.7bn)

$5

Sep 2012 $3.25bn (R35.5bn) $2.5

Dec 2009 $45m (R492.2m) 2009

Jun 2011 $1.6bn (R17.5bn) Jan 2011 $240m (R2.6bn) 2014

OCTOBER 2014 FASTCOMPANY.CO.Z A 33

Square Cash—from aqua to brilliant green.

“Jack came in and was like, ‘I don’t like this green—it’s not happy enough,’ ” recalls product lead, Brian Grassadonia. “We were like, ‘What the hell are you talking about?’ ” The different hue Dorsey chose, Grassadonia says, at first looked “horrible, and reminded me of sickness.” But soon, he adds, “I really came to love it. It’s perfect.”

If you take a look at the app, it actually does look close to perfect. It’s a good example of how Dorsey’s aesthetic discernment and marketing savvy catapulted Square past its competitors in the early days. And yet, it’s these same gifts of Dorsey’s that have masked more subtle problems plaguing Square.

Without question, Dorsey and co-founder Jim McKelvey deserve credit for ripping through the complexity of commercial transactions: Square Reader, their minimalist device for swiping credit cards that plugged into phones via audio port, was a masterstroke of simplicity, as was the company’s then-unique model of charging merchants a flat 2.75% rate per transaction, an approach that untangled the industry’s antiquated cost structure (with all its hidden fees). These innovations opened Square up to a massive, growing industry of micromerchants— baristas, florists, food-truck owners— who flocked to the service.

By late 2011, the company was processing $1 billion (R10.6 billion) in payments on an annualised basis; a year later, not long after the company launched Register—software that transforms an iPad into a point-of-sale terminal—its annual payments volume had ballooned to $10 billion (R106.7 billion).

Investors climbed aboard. In August 2012, when Starbucks invested $25 million (R266.8 million) in Square as part of a $200-million (R2.1-billion) round valuing the company at $3.25 billion (R34.6 billion), Square was chosen to process all credit transactions done at 7 000 branches of the coffee chain’s US stores. Starbucks CEO Howard Schultz proclaimed Square was “the fastest growing opportunity we’ve ever seen in terms of customer acceptance.”

Square’s earnings told a different story.

Making money from payments processing is a bit like building a business by selling cooldrinks simply for the bottle deposit: It

34 FASTCOMPANY.CO.Z A OCTOBER 2014

takes a lot of effort just to convert a $1 bottle of Coke into a nickel return, and only in extreme bulk can those nickels start to add up. More troubling, with Square’s business, the majority of those nickels go to the financial intermediaries it works with. At every swipe, Square takes its small cut of the transaction price, but 70% (or more) of that fee often goes to Visa, MasterCard and other institutions that handle risk and fraud detection, as well as card-member rewards and services. With higher end American Express cards, Square even loses money on charges. “If your business model is based on making pennies from transactions, you’re in trouble,” says a former top executive at one of the big card networks who has worked closely with Square.

Square’s revenue strategy was like building a business selling cooldrinks simply for the bottle deposit: Only at huge scales can all those nickels add up.

The payments data that Square collects in the process is extremely valuable— tracking who purchased what, when and where. At an individual store level, this data can show hot-ticket items, customer loyalty and employee output; in aggregate, it can provide useful analytics, like, say, the average price of dessert in lower Manhattan versus Williamsburg, Brooklyn. Even so, Square’s only route to profitability in the near term was through achieving mass scale. “The reality is, popping a reader onto your phone and swiping a credit card is a razor-thin-margin business,” says Anuj Nayar, a senior director at PayPal which, despite offering the same technology as Square and processing more mobilepayments volume in 2012, was seen as a dying incumbent. (Nayar chalks up the negative sentiment around PayPal to the

“Jack Dorsey bubble” inflating Square’s potential.)

Dorsey understood payments processing couldn’t be the endgame. “We always knew it was not our core business,” he says. “We knew the real business was around the data.”

Indeed, Dorsey outlined some of these ambitions in his first pitch to investors. Yet, the company demonstrated little capacity to evolve beyond payment processing. Part of the reason was a lack of direction inside the company and a crippling organisational chaos, according to a string of former employees. As the company tried to keep pace with its rapid growth, Square’s leadership seemed unable to execute on new product ideas. It also wasn’t sure for whom it should create products. “We started having conversations like, ‘Should we put more emphasis on the seller side or the buyer side?’ ” Dorsey recalls. “It became seller versus buyer, and we kind of lost sight of the connection between them.”

The fuzzy focus culminated in Square Wallet, which was initially called Card Case.

Though Dorsey won’t acknowledge it publicly, the aim internally, says one source, was to “own both sides of the counter”—vendor and customer—so the company could one day “cut out the credit card companies altogether.”

(At weekly all-hands meetings, former chief operating officer Keith Rabois, only halfjokingly, used to announce the projected date on which Square’s payments-processing volume would overtake Visa’s.)

Rumours of Square’s demise, says CFO Sarah Friar, “have been greatly exaggerated.”

“We’re always searching for something better,” says hardware chief Jesse Dorogusker, hinting that Square's slew of new products are just the start.

GUTTER CREDIT TK

Instead of helping consumers pay with their phones, like many other digital-wallet products, Square’s Wallet app enabled consumers to open a virtual tab with a nearby shop and then pay for items merely by saying their name when they arrived. Despite its popularity with the tech vanguard, Wallet saw barely any adoption. Few merchants accepted it, partly because few consumers paid with it, and vice versa. Even where Square Wallet was accepted, cashiers often didn’t know how it worked. “It wasn’t necessarily faster, or more convenient,” Dorsey says, looking back. “It felt more futuristic, but that doesn’t make it better.”

One of the main reasons for the Square– Starbucks alliance was to bolster Wallet at

the coffee chain’s US stores. But to lock in the deal, say insiders, Square had to agree to a substantially different payment structure with Starbucks, whether charged payments were done with Wallet or not. The effect was to all but eliminate Square’s margin. As outsiders praised the partnership, Square executives knew what was coming: The following year, the company would lose $25 million (R266.9 million) from Starbucks transaction costs alone (and will continue to incur losses until the contract expires next year).

Essentially, Square executives saw the gambit as a marketing expense for Square as well as for Wallet. “All I will say is there was a plan, a conscious decision to do the

Starbucks deal, and we decided to place that bet—obviously nobody forced us to do it,” says Square investor Vinod Khosla, defensively. To him, Wallet wasn’t a bad product, it just came too soon. “Square’s payment volume was task one—that’s all Jack should’ve talked about. You can’t reach step five before you build steps one, two, three and four.”

With Square’s payment volume reportedly on track to hit $20 billion (R213.5 billion) by the end of 2013, Dorsey continued to garner lavish praise, gracing the covers of magazines (including this one), teasing that he may one day run for mayor of New York City, and join the board of Disney. By the year’s end, Dorsey appeared in a glowing 60

Minutes profile, where he wowed reporter Lara Logan with Square Wallet. Logan began the segment by saying, “When Jack Dorsey invented Twitter, he changed the way we communicate. Will his company, Square, change the way we shop?” Dorsey’s ambitions and utterances at almost every turn assured the crowd that his company would be revelatory. Even when Wallet was struggling

in the market, some colleagues say that Dorsey would gloss over the weak numbers internally.

And yet, here’s the thing: Square’s business is not a bad one. It’s just not nearly the supernova it was made out to be. Despite the recent wave of negative press, Square continues to expand. Payment volume, excluding the disastrous Starbucks deal,

grew more than 350% in the past two years and will reportedly reach around $300 million (R3.2 billion) this year in gross profit. While the company is still incurring heavy losses, Square executives make a convincing case, backed up by internal company documents, that this is mostly by choice. It’s investing significantly in hiring, marketing and new products. If it

Match or Mismatch?

Square hopes to grow some of its new products into $100-million (R1.067-billion) businesses. We ask Square merchants about the prospects.

Square Order

Square Market

The merchant: CHAVA COFFEE CO. A coffee roaster in Rockwall, Texas

The merchant: CAPITAL EYEWEAR Boutique sunglasses studio in Los Angeles

The pitch: Customers prepay on their phones to expedite in-store pickup, allowing for quicker service and more orders during rush hours. Square takes 8% of Order payments rather than its usual 2.75%.

The pitch: E-commerce marketplace for Square merchants, integrating their inventory and providing a clean web presence. Square takes its usual 2.75% transaction fee.

The take: “We kicked around the idea,” says Bret Williams, a Chava partner. “But would I pay 8%? No way. There may be a small increase if people realise they don’t have to wait as long, but I don’t think it would cover that hike in percentage.”

The take: “It’s a very easy platform to use, but we don’t sell much through it,” admits owner, Steven Kilzer. “I think Jack [Dorsey] bought three pairs through Market, and he’s probably our biggest customer we had come through there.”

The verdict: Mismatch

The verdict: Mixed

Square Capital The merchant: JUST BAKED A cupcake and bakery business with 19 locations in Michigan and Ohio The pitch: Small businesses that need a quick cash infusion can receive a no-hassle loan based on their sales history.

Payments, plus 10% interest, are automatically taken out of future transactions so the loan can be paid off over time.

The take: “It’s revolutionary for businesses like mine that need just a little money,” says founder, Pam Turkin. “We needed a freezer and some other equipment. It was timely, easy to use, and you can pay back at your leisure that ebbs and flows with your business. I’d do it again in a minute.”

The verdict: Match

36 FASTCOMPANY.CO.Z A OCTOBER 2014

Square Feedback The merchant: TRADE MEN’S WARES A men’s goods retailer in Oklahoma City The pitch: Merchants pay a flat $10 (R106.73) per month to survey customers via email receipts.

The take: “We’re a pretty local business, so people are willing to call or drop in if they have an issue. And now, more and more people are using Yelp,” says co-owner, Lukus Collins.

The verdict: Mismatch

Open Tickets The merchant: BOBA GUYS Bubble-milk-tea café with two locations in San Francisco The pitch: An order-management system that uses tablets to help restaurateurs track, fulfil and close out orders with the tap of a finger.

The take: “The future is a digital order sent seamlessly back to the kitchen,” says co-founder, Andrew Chau.

“A few weeks ago, we had a peak drink hour of 200 drinks. We could only do that with the new display system.”

The verdict: Match

didn’t, Square could be a profitable company.

“The rumours of our demise have been greatly exaggerated,” says chief financial officer, Sarah Friar.

While Square has indeed made preparations for a potential IPO, company executives also insist that many published details about a public offering or a potential acquisition were incorrect. One board member goes so far as to argue that the stories were planted by a competitor or someone with an axe to grind, while Dorsey simply finds the narrative boring. (“There’s a buildup phase, then a takedown phase.

Facebook, Google and Apple all got it; Twitter is getting it, and Square is going to get it, too.

Who cares?”) And while Square employees will tell you Dorsey’s vision hasn’t changed despite Square’s stumbles, they admit the company’s focus has moved, finally, beyond payments. After all, it must: Plan B is the only option for a viable future.

Tellingly, the visionary now leading the charge isn’t Dorsey, but Gokul Rajaram, a 39-year-old product engineer who carries his smartphone in his shirt’s chest pocket and exudes a nerdy affection for data. When Rajaram joined Square from Facebook in July 2013, he set out to interview employees from every part of the company to find out what needed fixing. The verdict was predictable: “We were doing a great job building a bunch of features on the payments side of the business,” he says. “But we needed to be more aggressive and accelerate building products on top of the payments data.” Some teams were inching toward this goal before Rajaram arrived, but he found the efforts “nebulous”.

After an all-hands meeting in August, he outlined what areas Square would (and wouldn’t) work on. As the company kicked into overdrive, Wallet was discontinued.

In a sense, the company has taken a step away from Dorsey, who has kept a lower profile as of late. The company is now pushing the idea that there are ‘multiple visionaries’ at Square today. “There’s not a singular force,” Dorsey tells me over coffee.

“I’ve told the company multiple times: if I have to make a decision, we have an organisational failure.”

Many colleagues, at least, say Rajaram’s push was liberating. Whereas before, most

Designer Paco Viñoly seeks to make Square's new tech offerings as "iconic" as the original.

teams were developing feature after feature for Square Register, Rajaram reorganised the company into smaller teams to create specific, standalone products that can generate profit. They were each tasked with a narrow mission (e.g. “go make receipts a compelling platform”) and given a large degree of freedom.

Rajaram says self-empowerment is how the ailing Wallet project got killed: Most of the engineers migrated to more exciting products, and nobody wanted to work on it anymore. “The teams made the call,” he says.

Signs of a renewed sense of purpose are evident all around Square’s offices, and a mock movie poster sitting near Rajaram’s

team captures the ambition: square quest IV: the search for non-payments revenue.

There’s need for the urgency. Square’s Reader and Register products are no longer unique; a slew of upstarts and big rivals such as PayPal, NCR and VeriFone now offer their own equivalent iPad systems, which threaten to eat away at Square’s merchant share and payments business. “Payments is a commodity game,” says Brad Smith, CEO of Intuit, which initially sought to own the space before concluding the margins were too low and the competition too crowded.

“Square is in a transition phase and adding components: They’re going to have to do more magical things for small businesses

OCTOBER 2014 FASTCOMPANY.CO.Z A 37

than simply accept electronic payments.”

And there may be a finite period to pull off this transition. For decades, credit card companies have thrived off the high processing fees they charge merchants. “It’s complete bullshit,” says PayPal co-founder (and Square investor), Max Levchin. Due to regulation and new payment alternatives such as bitcoin, many industry sources with whom I spoke agree that transaction fees would significantly decline over time. The card networks are under immense pressure—from retailers and legislators, among other entities—to lower processing rates, which they’ve long (and vaguely) justified by citing fraud and risk liabilities, while providing scant transparency into how the system actually works. The European Union recently proposed a plan to cap credit-card processing fees at just 0.3% of the transaction value, while a 2010 US law curbed debit card rates.

“They will go away,” predicts Levchin of the high fees, adding that Square must find other revenue streams before that happens.

Restaurante 9 is a new eatery on Market Street in San Francisco which serves a summer gazpacho with baby herbs. At lunch, when I arrive, the restaurant is filled to capacity. This is odd: The food is mediocre, the service slow, and the decor lacking. Yet, the diners couldn’t appear happier. That’s because Restaurante 9 isn’t a real restaurant; it’s a pop-up test kitchen in a conference room on the ninth floor of Square’s headquarters.

The team is running a full-service lunch to work out kinks in its new product, Open Tickets, a software tool for sit-down restaurants. (“Hi! I’m the product manager, but today I’ll be your hostess!” a chipper Square employee tells me before racing off to the kitchen.) In the back room, chalkboards list missing features such as inputs for seating changes, order cancellations and peanut allergies. Save for the iPads that the waitstaff use, there’s little evidence that Restaurante 9 even utilises Square. Orders are delivered to the kitchen via printer, and when the bill arrives, it includes only a paper receipt.

Not long ago, to improve communication between waiters and chefs, Square might have come up with a digital-only solution. But the company seems to realise that a cook with

38 FASTCOMPANY.CO.Z A OCTOBER 2014

marinara-covered fingers doesn’t want to fiddle with an iPad during dinner rush.

Another sign Square is learning from past mistakes: In early 2014, the company started a customer-support phone line. Before, the company believed it could make its products so streamlined that no phone assistance would be necessary, an astonishing (but not uncommon) Silicon Valley notion. After years of complaints, Square relented. Dorsey recently spent several hours manning the phones and was surprised to discover enquiries often weren’t about Square—they were about how to set up an iPhone or use iTunes, a stark reminder that Square’s clients may not be so tech-savvy.

Open Tickets is just one part of a forthcoming suite of services to help merchants in the retail, restaurant and service industries. Rajaram likes to say Square has now entered “harvesting mode”: the company boasts around 1 million merchants already using Square Register, so he insists it’s not a stretch to imagine that Square can up-sell them on incremental (and higher margin) services such as invoicing and inventory tools. The Square team hints at other future products, including tools for loyalty points, rewards and marketing.

In the meantime, Rajaram is expanding on the launch of a product known as Square Capital, a cash-advance program. Because it has perfect visibility into merchant sales, Square doesn’t mind loaning, say, $10 000 (more than R100 000) to sellers (often overnight) in exchange for a slice of future sales until the debt is repaid. Reception to the pilot was immensely positive, which is why the company is seriously ramping up the program. (Square has a $225-million— R2.4-billion—line of credit, which is partly used to fund Capital.)

Where could the company venture next?

Square hardware lead Jesse Dorogusker argues that merchants need help with everything from “delivering arugula [salad rocket] to keeping the lights on, to upgrading their Comcast Internet.” Even redesigning age-old paper receipts is on the docket. (“It takes you five minutes to find the date! It’s like finding the expiration date on yoghurt!”)

More hardware is also coming, including a new Square Reader.

And multiple sources have indicated a

Square credit card has been prototyped—a card that’s all-black, which some employees have been carrying around in their wallets over the past year. When I press Dorogusker about it, he says, “We’re always searching for something better. I definitely won’t deny it, but I definitely won’t announce anything.”

Square later tells me it will not actually be launching a credit card. But it’s unclear whether merchants and consumers are interested in adopting any of its other tools— or whether the tools will connect together in a coherent way. Roughly 20% of users of Square Market, the company’s online storefront product, have never used Square Register. When the company was deciding how to promote a new product called Order, according to design director Paco Viñoly, “we wondered, should it even say Square on it?

Should it even have our logo?” And as Rajaram describes the various “buckets” Square will go after, I struggle to take it all in.

“We want to be the central operating system of your business,” Rajaram says. It’s a catchy tagline, but what that means in the real world remains a puzzle.

In fact, ticking through the list of products that Square is launching—Market, Cash, Feedback, Invoices, Order, Open Tickets, Capital, Dashboard, Appointments—makes it easy to wonder whether the company is in panic mode. It’s probably more precise to say that Square is scrambling, or that it’s hustling. “If you ask me, was Square [Capital] on the agenda four years ago? No. But that’s learning,” says Khosla. “A year and a half ago, would I have said Order was a big business? No.” Also, it may not matter whether all these products work in unison yet, given Square’s see-what-sticks approach.

“Are we going to nail every single thing we’re endeavouring to do now?” says Roelof Botha, a Square investor. “Of course not. If you’re batting a thousand in this business, you’re not pushing hard enough.”

For now, CFO Friar stresses that the company has enough breathing room to experiment. For example, Square Cash allows consumers to exchange money for free through an email or via an app. It doesn’t quite fit into Square’s merchant-centric products, and the company loses money (often in the range of 25 cents—R2.66) on every transfer. Still, Friar is encouraged. “We

“I don’t think the plan is ever to settle for being a quiet, back-end [service]— he wants to create a company that’s as influential as Apple.”

gave [the team] a bunch of cash and said, ‘You can’t lose more than X; go see what you can do,’ ” Friar recalls.

In just eight months, Friar boasts that Cash is already one of the largest peer-to-peer players in the world; it could easily help users, say, move cash from country to country, a money-transfer system that’s long been a highly lucrative business for Western Union.

“With most of these new businesses,” she adds, “we only start funding them and putting a lot of effort behind them if we believe that over the next three-plus years, they can be $100-million (R1.06-billion) businesses.”

Recently, Jack Dorsey grew a beard. A scruffy one, with wisps of ginger and grey.

It’s not the beard one would grow after a divorce, or a tragic loss, or a midlife crisis, but a beard of style. With Dorsey’s celery-slight frame and button-down shirt, the beard makes him resemble a hipster farmer.

It’s this crafted persona, this self-styled meld of artist and entrepreneur, that prompts board member Larry Summers to tell me that with Dorsey’s “commitment to design and creativity, he may be as close to Steve Jobs as anybody who is alive today.”

It’s true that in a certain light, the parallels to Jobs are unmistakable—in Dorsey’s ouster from his first company, and in his triumphant return with Square. Yet, Dorsey’s degree of success, at least so far,

makes the comparison an unflattering one; he would have to grow Square into a global, transformational business, just like Jobs did with Apple and Pixar, for it to be otherwise.

“If Square succeeds, they’ll be this massively valuable [company] unified around payments,” says a CEO at another hot commerce startup. “And if they fail, they’ll probably have to go through this painful course correction to becoming a small but not insignificant payments company. They won’t implode, but it will be painful.”

Only in Silicon Valley, perhaps, could success seem so unpleasant; anywhere else, building a minor but sustainable business would be a rare achievement. And yet, Dorsey has always shared the Valley’s view of the world. “Mediocrity is not on the agenda for Jack and company; thinking big is the order of the day over there, to a fault,” says one former employee, who cites Dorsey’s so-called 5 000-year plan for Square, which Dorsey often talks up with his team, despite its absurdity. “I don’t think the plan is ever to settle for being a quiet, back-end [service]— he wants to create a company that’s as influential as Apple.”

This may prove to be Dorsey’s greatest mistake. In giving him a grade for his performance, you could argue he should have rolled out additional products sooner, or that he should not have set expectations

so high with the press and the public. But perhaps his greatest challenge will be coming to grips with the possibility that Square could end up as an enterprise that brings real (albeit incremental) value to the world, but never has the revolutionary impact of Dorsey’s first startup, Twitter.

Dorsey is well aware of the stakes. Outside a café on a quiet side street in the Hayes Valley neighbourhood of San Francisco, he sips a cappuccino as a gentle breeze sways the purple flowers behind him and a bird chirps by his feet. “It goes back to that fight-or-flight idea,” Dorsey says. “Some people are like, ‘I love that challenge—wow, it scares me, but I’m in.’ And some people are like, ‘Ah, nope, I’m doing a photo startup.’ ” There’s no question that Dorsey is in the first camp.

But when I ask whether he’ll be remembered more for Twitter or Square, Dorsey shakes his head. “I don’t care. I honestly don’t care!” he says, laughing. He remarks that he focuses instead on building “something that resonates with everyone on the planet—then you’re really understanding humanity, and that’s what I personally want to feel.”

If Square actually begins to resonate with everyone on the planet, that would solve most of its problems. In the meantime, Dorsey may have to settle for helping the nearby barista sell a few more cups of coffee. And maybe that isn’t such a bad fate after all. acarr@fastcompany.com

OCTOBER 2014 FASTCOMPANY.CO.Z A 39

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PROTOTYPE

WHEN THE I C E B E R G S M E LT, M AY B E O U R FARMS W I L L F L O AT Of all the ideas provoked by global warming, this may be the wildest: a floating hydroponic farm and village that gathers and utilises runoff from icebergs

40 FASTCOMPANY.CO.Z A OCTOBER 2014

As glaciers melt due to climate change, scientists and designers are looking for ways to capture potential lost value. The Arctic Harvester is the brainchild of four architecture students in France.

It may not be very practical, but it is certainly provocative.

The central bay would fill with water from melting icebergs. Hydroponic greenhouses on board would use it to grow fruits and vegetables for towns on the Greenland coast.

The massive circular structure (more than three football fields in diameter) would house 800 people.

“Even a hydroponic farm needs farmers,” says student, Meriem Chabani.

“The vessel is designed to drift with the currents that carry the icebergs,” says Chabani. The team, along with the consultancy, Polarisk Analytics, is now looking for funding to build a set of small-scale Energy would be prototypes. supplied by solar panels and an osmotic —Adele Peters system generating power from a mix of salt- and freshwater.

Illustration by Shotopop

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Anywhere on the planet: Wyzetalk’s private, closed, virtual online ecosystem allows employees to communicate seamlessly on any device

42 FASTCOMPANY.CO.Z A OCTOBER 2014

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CRE ATI V E CON V ERSATION

E V E RY O N E O N T H E S A M E PA G E Wyzetalk makes it possible for companies to communicate, collaborate and innovate

By Evans Manyonga

Since its inception in 2011—when Gysbert “Gys” Kappers was completing his executive MBA at the University of Cape Town Graduate School of Business (UCT GSB)—Wyzetalk has grown from a small player in the tech industry to a burgeoning business with one component of its growth strategy being funded to the tune of R8 million.

The small town of Stellenbosch in the Western Cape is famous for its superb wines. After all, it is where the world-famous Pinotage range was developed. However, it is fast becoming the innovation capital of South Africa; some have even termed it the next Silicon Valley due to the innovative African technology coming out of the region. Based in Technopark, Stellenbosch, among other bubbling tech establishments, is Wyzetalk.

CEO and co-founder Gys Kappers attributes the rise of the tech industry in this small town to the enterprising energy found there. “There is some very enterprising and innovative technology coming out of Stellenbosch, and we are feeling the eyes of the continent on us. There is a great energy in our business park and a meeting of great minds, often over coffee or lunch. The businesses operate within a global marketplace and similar mindset. There’s also a good blend of startups and established businesses, service providers and angel investors to create a sustainable business ecosystem,” he explains.

The energetic CEO describes Wyzetalk as a social business solution and software provider. “We make it possible for companies to communicate, collaborate

OCTOBER 2014 FASTCOMPANY.CO.Z A 43

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Creative Conversation

and innovate. Organisations are typically extremely poor at real communicating and collaborating. We set out to allow organisations to create a private, closed, virtual online [web and mobile] ecosystem for their business, which allows employees to communicate seamlessly on any device—anywhere on the planet.”

Wyzetalk offers the only social business software product that is flexible on any device from web, to smartphone and tablet devices, to the older ‘feature’ phone devices. More impressively, the software doesn’t restrict participation on the basis of domain name.

The philosophy behind the product offerings is about getting people on the same page [platform, device and environment] to connect, communicate and collaborate—because amazing results will follow.

“We believe that people within organisations have a tremendous brain capacity, but that their capacity is often hamstrung by typical silo and hierarchical mentalities still pervasive in many organisations today.

We assist businesses in developing a plan that improves communication, improves collaboration, and leads to a more openly innovative culture over time,” Kappers explains.

A simple situation led to the founding of Wyzetalk.

“I was busy with my thesis at the UCT GSB on ‘the delay of social business software adoption in the enterprise and its effects’. During that time, Gerhard Pretorius [Wyzetalk chief technology officer and co-founder] and fellow developers were working for a tech company in Century City and were looking for a software platform to use to connect the head office with the staff working on site. There was no scalable solution for them to use, so they developed their own,” he says.

The combination of a vision for the African market and a self-serving need resulted in Wyzetalk quickly becoming a solution that customers wanted. The product was incubated and developed with business, finance and marketing support as an African tech company with multiple solutions and a software platform.

Through being connected to the global world of social business, innovative tech trends and developments, international service providers and thought leaders, understanding intrinsically what their customers need and learning from past successes and failures, Kappers has ensured Wyzetalk stays innovative and revolutionary.

There has been a steady stream of innovative developers driving thinking in Africa generally and South Africa specifically. Kappers feels that there is a significant amount of innovation happening in the financial, retail, tech and healthcare sectors, which has largely been driven by mobile proliferation and reaching people who have previously fallen outside of economic classifications in South Africa.

“There are apps aplenty; there’s a great combination out there of developers who are being incredibly 44 FASTCOMPANY.CO.Z A OCTOBER 2014

Small town, great minds: Kappers attributes the rise of the tech industry in Stellenbosch to the enterprising energy found there

30 SECONDS WITH GYS KAPPERS Background Gysbert was born in Cape Town.

He grew up in Constantia and attended St Joseph’s Marist College.

His technology spirit was clearly evident at a young age—in fact, as a child he wanted to work in the technology field.

Business interests In his 20s, he started an online and offline transaction-platform company that was eventually sold to SourceCom. What followed was a highly successful 18-year career in building the largest privately owned concrete masonry business in South Africa. At the company’s peak, the business consisted of 19 factories across the country with a staff complement in excess of 600 people and a production capacity of more than 600 000 tonnes per annum.

In a multimillion-rand buyout in 2008, he sold the company to a JSE-listed group—and after seeing through his three-year earn-out, he felt it was time to take a break from business.

This led to his enrolment in an Executive MBA Programme at the UCT GSB in 2009, which he completed in 2012.

Likes Time with family, Stellenbosch, meeting people, interesting conversations, systems thinking, Knysna, The Cure, sushi, UX, travel, seeing amazing places, Snow Patrol, the African bush, solving problems, good food Dislikes Arrogance, ego, admin, legalese, running, stress and anxiety, battery life on his iPhone

Creative Conversation

creative and solving social problems on the continent, while others are coming up with genius new ways to make life easier for us all [mobile wallet] and some are working in companies to find new ways of engaging with customers. It’s become a lucrative industry for enterprising developers to ideate and develop great apps—and with the number of competitions and global exposure promised to entrants, the sky’s the limit,” he says.

Kappers believes businesses have a new way of functioning as organisations become more open and collaborative after implementing Wyzetalk.

“Staff are more vested in the success; it’s iterative, dynamic and geared toward achieving objectives and solving problems considerate of the work ethic of all generations in the workplace,” he says. “Once embraced, I believe that it will forever change the traditional siloed and hierarchical approach businesses often still prescribe to.”

However, even after three years of operation and phenomenal growth, Kappers feels there is still a long way to go. “We’re excited to be pioneering an industry in this country, with our eyes set firmly on being the lead in Africa. There are some local companies that have tried bespoke software solutions but, in most cases, these implementations have failed; too often, companies invest in systems expecting them to be the Holy Grail—and they don’t consider the impact of the culture, process and people.”

At the top of the list of challenges is aligning Wyzetalk’s products and services to customers with

Open and collaborative: Kappers believes Wyzetalk will forever change the siloed and hierarchical approach to which businesses often still prescribe

“It’s become a lucrative industry for enterprising developers to ideate and develop

great apps—and with the number of competitions and global exposure promised to

entrants, the sky’s the limit.”

very different operating structures, objectives and cultures. As a fairly young business, Wyzetalk also faces other teething problems including questions around valuations and models of returns for both institutional and angel investors. Other aspects include protecting the interests of staff, early-stage investors and managing expectations.

Kappers feels there still is a stigma surrounding innovative technology coming out of Africa as opposed to international technology. “We certainly don’t attract the kind of attention that tech innovations around the globe do [notably the United States]; however, Africa is getting a lot of good attention. Before, there were only one or two South Africans we could quote as being success stories— Mark Shuttleworth being one—but now you hear of more South Africans abroad pioneering, innovating and revolutionising industries both in developed and developing markets.

“There’s also a lot of interest from large corporates that are setting up incubation centres in highly networked African countries, and also international competitors coming to Africa with a view to finding those successes that could otherwise remain hidden or limited in their influence. A lot of businesses want to support local companies and be a part of locally developed successes—even where they have enterprise software systems in place. Africa’s rise in the tech sector is certainly a work in progress,” he adds.

Wyzetalk recently secured R8 million from Clifftop Colony Capital Partners, which will be used to continue driving innovation and development. It will also aid in the company’s goal of expanding its professional services and capabilities as well as its drive to expand into Africa. “We have previously focused most of our attention on the software product and native apps and, while that will continue, we need to invest in other core areas of focus for our business as well,” Kappers says.

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Creative Conversation

Tech startups face various challenges when launching in South Africa. They may have the right personnel and even the right product offering, but Kappers believes it is much easier to be successful at raising investment capital when the product has moved beyond concept stage. “In our case, we self-funded and had a product and paying customers, an office setup and staff before we considered outside investors. The advice I always give is for entrepreneurs to build solid networks of people/influencers/mentors/advisers— leverage off these relationships, and focus your attention not only on the tech solution but on other aspects of the business.

“Know the industry you’re in really well: who are the players, how unique are you, do you have a solution that’s easy to replicate, what are your differentiators?

A critically important fact far too easily overlooked is financial literacy, and a sound business plan and model that considers different outcomes and projections. The biggest challenge is access to capital—unfortunately, South Africa doesn’t have a well-established venture-capital structure, or easy access and protection mechanisms for international investors,” he explains.

Kappers recently announced to the public that Wyzetalk Enterprise, the company’s core offering, had helped businesses such as EOH, Protea Hotels, Deli Spices, Synchron and Cash Crusaders, among others, to form high-impact communities among their staff, customers and partners.

He still stands by these words: “The case studies that we have from many of the organisations that are using Wyzetalk have been incredible. Decentralised businesses use the platform to engage, in real time, with their teams to share ideas, collectively establish or refine their products across the business—leading to efficiency enhancements in their processes and the speed with which they’re able to innovate and respond to clients.

“One of our clients has all its staff connected to Wyzetalk. They have a large number of sales reps on the road across the country. In one instance, they found a competitor product on the shelf of a retailer.

Previously, he would have noted it, perhaps taken a photo and emailed it to a select audience. They would’ve discussed it at the next sales meeting which, over time, would have resulted in a reaction. By using Wyzetalk, he was able to take a photo and upload it immediately to his whole Wyzetalk community, with a comment.

Management, sales, operations and logistics all saw the message at the same time and a counter strategy was put in place—which was a product with similar ingredients and a marketing plan that saw the company outsell its rival.”

Kappers further notes that companies use Wyzetalk 46 FASTCOMPANY.CO.Z A OCTOBER 2014

to communicate during events, conferences and time-limited campaigns. “Wyzetalk Workforce combines with a data-analysis service where real-time info is gathered from people in the field or at an event; the results are analysed and presented back to decision makers, either as insights or they become opportunities to take action. The advantage with Wyzetalk is that the data on the platform is proprietary to the company and it is locally hosted,” he explains.

It should go without saying that the public sector has an important role to play in the development of the tech sector in South Africa—something about which Kappers feels strongly. “The public sector has an important role to play through policies and governance structures that make South Africa attractive for foreign investors; incentives for companies that export all types of technology to the rest of the world; and incentives to entrepreneurs to create innovative tech solutions and address social issues facing our country,” he says. “We need access to high-speed infrastructure without the high costs. They need to be more responsive and react

“Know the industry you’re in really well: who are the players, how unique are you,

do you have a solution that’s easy to

replicate, what are your differentiators?”

quicker to opportunities—they deliberate too long, and companies just don’t have that kind of time to wait.”

The future of Wyzetalk is bright, according to Kappers. Expansion, opportunities and innovation are the three keywords he mentions as we end our interview. “We have amazing opportunities with our customers to pilot solutions in African operations which will become global, to connect companies and their mass workforce and to fast-track innovations for companies using our social business strategies and software platform. Our software platform and native mobile apps are being improved upon every day—they’re world-class [no other provider has native mobile apps on leading devices]. Beyond our borders, we will definitely be in Africa in the not too distant future. I’m excited to be on this journey with an incredible team.”

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WANTED

Sustainable style: Twelve 500ml recycled plastic bottles are used to manufacture each pair of recycled denims

GREEN IS THE NEW BLACK As far as innovative jeans go, this has to be the new benchmark

By Evans Manyonga

48 FASTCOMPANY.CO.Z A OCTOBER 2014

Woolworths has created an innovative range of ‘green’ denims that rank among the most sustainably produced jeans in the world. The market-leading range is manufactured in part from plastic bottles and is at the forefront of global denim trends.

The innovative manufacturing process adopted to produce these jeans uses twelve 500ml recycled plastic bottles to manufacture each pair of recycled denims. This process uses eco-chemicals, reduces water usage by 67% and reduces energy usage by 62%, thereby enhancing the environmental benefits even further.

The recycled denim product—as well as its manufacturing process —is informed by intensive research recently conducted by Woolworths, in partnership with the World Wide Fund for Nature South Africa (WWFSA) and Green House, on sustainable fabrics used in clothing.

Research took the form of a lifecycle assessment, which typically assesses a product system against: • Resource consumption (fossil fuel and mineral resource use); • Impacts on human health (release of substances toxic to humans, substances that destroy the ozone layer, and substances that cause respiratory illnesses); • Impacts on global climate (global warming potential or carbon footprint); • Impacts on ecosystems (release of substances toxic to ecosystems, acidifying substances and excessive macronutrients, as well as impacts due to land occupation and transformation).

“We adopted a life-cycle based approach, as our decisions regarding sustainability are not isolated, but rather taken within the context of a larger system and strategy,” said Justin Smith, head of sustainability at Woolworths.

“This approach aims to enhance or upgrade entire systems or value chains, and not just single parts of systems, thereby avoiding decisions that fix one environmental problem but cause another unexpected environmental problem (such as mitigating air pollution but increasing water pollution),” he explained.

South African and Victoria’s Secret supermodel, Candice Swanepoel

COMPETITION

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The progressive Eco-Drive technology harnesses the power of light—from any natural or artificial light source—and converts it into energy. This means it recharges continuously, so you will never have to replace a battery. Fewer batteries in the waste stream mean you will be making a positive contribution toward saving our environment and creating a sustainable future.

As an innovation that has changed the way watches are powered today, Eco-Drive has no equal and inspires great potential of state-of-the-art technologies and exquisite design.

Under the new brand statement, “Better Starts Now”, CITIZEN plans to expand its lineup of Eco-Drive watches with cutting-edge technologies. Look out for the Eco-Drive satellite-synchronised watches and radio-controlled watches.

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OCTOBER 2014 FASTCOMPANY.CO.Z A 49

GUTTER CREDIT TK

WDC2014 team on the giant chair exhibited at the V&A Waterfront, Cape Town

50 FASTCOMPANY.CO.Z A OCTOBER 2014

Art credit teekay

Poodle from Monkeybiz (artist Kwanele Ngalo)

REDESIGNING THE SOUL OF A CITY

How do you heal the fabric of a society where neighbourhoods were

ripped asunder by apartheid, divided by bridges and byways and politicians and

policy, for an entire generation? You design a new future—as Cape Town,

the World Design Capital 2014, has undertaken

By Louise Marsland

OCTOBER 2014 FASTCOMPANY.CO.Z A 51

We have given people permission to “think impossible things,” says the potent CEO of the Cape Town World Design Capital 2014 agency, Alayne Reesberg. “We have mapped a universe of the impact of social meaning in the city.

It gives people the permission to dream and think about impossible things… It is about the connections…about reigniting conversations.”

The bright yellow-themed pop-up offices of the agency, Cape Town Design, sit in the growing design and creative hub of Cape Town’s former District 6, which is slowly being revitalised as people move back into the area to live and work and create after the forced removals of the apartheid years which saw communities displaced.

The World Design Capital (WDC) international award goes to cities that recognise design as a force for social, cultural and economic development. In South Africa, our World Design Capital 2014 has become a 52 FASTCOMPANY.CO.Z A OCTOBER 2014

WDC fans

movement for social change in our most recognised city. Passionate participants have made it their mission to make a difference and heal some of the scars of apartheid, creating a legacy of social projects and services to improve lives and create meaningful change.

Cape Town hides its bitter past better than most South African cities. It is beautiful; a global travel destination with fabulous architecture, pristine suburbs, lush winelands, beaches that take your breath away—and, of course, THE mountain.

The poverty, crime, incessant drug wars and lawlessness that the majority of Cape Town residents have to live with in less salubrious neighbourhoods constructed by the apartheid separatist machinery are well hidden from sight and glossed over in travel features and shiny tourist brochures stuffed into overflowing information stands.

So when Cape Town was awarded ‘Design Capital of the World 2014’, it was greeted with a distinct lack of interest in many quarters— seen as a largely vacuous honour for a pretty city. And it could have been just that, but for

the tenacity and passion and fervour most South Africans do have for social change and the stated vision of the City to use design to transform communities.

Cape Town’s theme as World Design Capital for a year is the apt ‘Live Design.

Transform Life’, and it was required to produce six signature events as part of the host-city agreement. Of course, the WDC team went all out, choosing 460 transformative design projects to nurture—more than any other city before it—and four themes: ‘African Innovation, Global Conversation’ to present African ideas that speak to the world; ‘Bridging the Divide’—design that reconnects the city and reconciles communities; ‘Today for Tomorrow’—coming up with sustainable solutions for people and planet; and ‘Beautiful Space. Beautiful Things’—inspiring

architecture, interiors, food, fashion, jewellery, craft, art and creativity.

Clusters were then set up so all the projects could be organised and easily referenced on the design engine and hub at WDCCapeTown2014.com.

The World Design Capital award is what each city makes of it, says Reesberg, a former diplomat to the United Nations and employee of Bill Gates. Appointed by the City of Cape Town, she has to circumnavigate the almost weekly criticism, political pressures and tangled self-interest that go with a highprofile position such as this in a landscape littered with stakeholders.

She does it with formidable aplomb and a zeal that comes from a total belief, even obsession, in the ‘cause’ of what they are

trying to achieve at WDC2014. They don’t sleep, she says; there is too much to do.

“We are reigniting conversations. Every day I bump into things we didn’t plan, but that happened anyway. The quality of the ideas lies in the conversation; what you get when you mash up social business. We need to get back to the table in South Africa and engage.”

The biggest asset of WDC2014 is that they have “made visible” a previously unseen landscape of meaning. More than 460 projects were chosen by 38 curators for the year from 1 253 proposals, and 70% of the projects have matured to date and some have even spawned other worthy initiatives. The website is the legacy repository.

Projects span the scope of technology, food security, sustainable shelter, health services, smart science and water reticulation, and bring in indigenous community-sourced knowledge. Even though some projects were already established, they all went through a rigorous pitching process and curation before being selected.

The idea is not just to showcase the creative and entrepreneurial talent within the city, but to change the current narrative of economically depressed and divided areas, through design.

Projects such as Philippi Village and iKhaya le Langa aim to transform low-income township neighbourhoods into thriving economic hubs, including innovation and creativity as a focus to create jobs, empower entrepreneurs and shift opportunity to the historically disadvantaged Cape Flats areas.

Philippi boasts an ‘Entrepreneur Container Village’. The Langa Quarter has various enterprise and design initiatives.

Future Tyger is a global design competition supported by the City of Cape Town’s Mayoral Urban Regeneration Programme to come up with a plan to ‘bridge the divide’ between the City Bowl and Cape Town’s emerging second metropolitan centre in Tygerberg. It is about reconnecting a city that apartheid divided through architecture, urban planning and unnatural partitions.

OCTOBER 2014 FASTCOMPANY.CO.Z A 53

As Priscilla Urquhart, public relations and media manager, points out: “Emotional healing can also take place if people can move freely about the city. It is a very sad story about how communities have remained apart, divided by roads and bridges and power stations.”

The WDC2014 award has resulted in additional publicity for Cape Town as a prominent global city, bringing in earned media to date of R1.4 billion. But the real impact is the legacy it will leave. The legacy component of WDC2014 is encapsulated in projects such as Workshop 17 at the V&A Waterfront, which is an innovation hub and real-time laboratory to “invent, prototype and test emerging products, create new business models, services and start businesses aligned to African markets”.

“WDC recognition has been the catalyst for many of these projects to be exposed beyond the incubation startup phase to investors, business, funding, collaboration, partners.

Design is not about the pretty things. It is not elitist. It is about changing communities through design—everything from shack chic to housing solutions,” says Urquhart.

Many of the projects focus on the end-user, not just from a design or engineering or architectural perspective.

54 FASTCOMPANY.CO.Z A OCTOBER 2014

10 PROJECTS Fast Company South Africa picked 10 projects which in total show the scope, commitment, creativity and ingenuity of the people of Cape Town and the lasting impact of WDC2014.

Oranjezicht Farm Urban farming is a global trend to address food security, and Cape Town has the Oranjezicht Farm situated just above the City Bowl, in the shadow of Table Mountain. Project head Sheryl Ozinsky believes cities have become a new battleground for food poverty and malnourishment, as over 50% of the world’s population is now urbanised. “We would love to see thousands of small-scale community-based farms on unused and underutilised public green spaces that have the potential to serve our communities as places that beautify, educate, feed and strengthen residents. This is design at its best.” ozcf.co.za

Too Good to Waste Upcycling is a trend whereby designers and artists recycle junk into sustainable art or décor items. Too Good to Waste is a cooperative of 14 Western Cape eco-conscious artists and designers, established in 2012 with

the support of the Department of Trade and Industry and curated by Eva Ploder, with funding from the German Government.

They talk trash, and their global message is for upcycling design to be recognised as a long-term ‘design ethos’.

Toogoodtowaste.co.za

SKA There are 100 young scientists and engineers in Pinetown, a suburb of Cape Town, ‘listening to the universe’. They are part of the MeerKAT South African project to build an array of sixty-four 13.5-metre dishes to enable the technology required for the Square Kilometre Array (SKA). The MeerKAT will be the largest and most sensitive radio telescope in the southern hemisphere until the SKA is completed around 2024. www.ska.ac.za

Too Good to Waste African Map by Simple Intrigue (artist Kerry Muller)

Square Kilometre Array

Dream Mobile Dream is South Africa’s first locally manufactured smartphone. The company, Dream Mobile, aims to get as many South Africans connected to the Internet as possible, and has studied how mobile technology is used in Africa by consumers: “Cheap data and cheap smartphones means we can offer connectivity to a huge spectrum of consumers,” says Reza Handley-Namavar, founder and CEO. Dreammobile.co.za

Freedom Ride for Mandela

Monkeybiz Monkeybiz focuses on women’s economic empowerment and health development, and is a non-profit income-generating bead project started in 2000. The Monkeybiz products are sold all over the world in galleries and design shops, and the beaded artworks are unique. All the profits from sales are reinvested back into community services.

Customer relations manager Joan Krupp says being part of WDC2014 has resulted in more visitors to the project and increased visibility.

Monkeybiz.co.za

Paperight A need to provide books to people who cannot afford them is how Paperight was conceived by entrepreneur Arthur Attwell, founder and CEO. By registering with Paperight, print shops, schools, colleges etc. can legally print out books for customers. The customer pays the outlet for

the print-out, and the outlet uses Paperight to pay the publisher. “Being a part of WDC2014 has helped us grow our visibility. Our work also spawned a subproject called Book Dash, which gathers top creatives to volunteer their time to create children’s books that anyone can freely translate, print and distribute,” says Attwell. www.paperight.com

AgriProtein A fly farm wouldn’t be high on many people’s designer agendas, but it could be the answer to providing natural organic protein for industrial farming uses. Global investors have already come on board to back this WDC2014 project with $11 million (about R119.8 million) to build the world’s first commercial fly farm in Cape Town. AgriProtein will be rolling out another 40 of these farms and is at the forefront of the emerging nutrient-recycling industry. It rears flies on a large scale to lay eggs that are hatched into larvae on organic waste material. The larvae are then harvested and dried into Magmeal—a natural and sustainable feed for chicken and fish. It is seen as a natural replacement to fishmeal in industrial farming and could assist in reducing fishing.

AgriProtein will license its nutrient-recycling technology worldwide in 2015. www.agriprotein.com

Montebello Creativity Labs

Baboons from Monkeybiz

“We nurture dreams to grow creative solutions in Africa,” says the Montebello Design Centre, home to over 20 art, craft, music and digital studios and galleries in Cape Town’s Southern Suburbs for 25 years. It prides itself on fostering innovation to seed creative

businesses. It launched Montebello Creativity Labs for WDC to create a collaborative environment with themed creative research topics. A December exhibition will take the form of “framed moments of genius—windows into the creative mind of the artist as a designer”. www.montebello.co.za

Online Activist Online Activist is the first African WordPress plug-in to empower online activism. It is in development currently as a collaboration between two Cape-based tech teams: GivenGain and WooThemes. It enables anyone to raise funds and take action for causes in Africa in which they believe, giving nongovernmental organisations a tool “to change the world around them”. The app is currently in its beta testing phase, and version one should launch in the next couple of months. www.givengain.com

Freedom Ride for Mandela Apartheid planning used bridges and highways to create unnatural partitions between different regions and neighbourhoods. The Bicycling Empowerment Network Freedom Ride for Mandela was another WDC event project that used the fervent cycling community in Cape Town to map a new route through diverse neighbourhoods in an attempt to break through geographical and cultural barriers and link communities that were historically kept separate. Cyclists travelled 27km—one kilometre for every year Nelson Mandela spent in jail. www.benbikes.org.za For more details, visit www.wdccapetown2014.com.

OCTOBER 2014 FASTCOMPANY.CO.Z A 55

Deep thoughts: “Dreams are a great resource for me,” says Cameron. “I’m constantly getting dream imagery and writing things down.”

56 FASTCOMPANY.CO.Z A OCTOBER 2014

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CRE ATI V E CON V ERSATION

“T H E S E C O N D Y O U T H I N K Y O U ’ R E A N A U T E U R , YO U ’ R E S U N K ” As a film director, he stands at the apex of Hollywood, but from a young age James Cameron wanted to plumb the ocean’s depths. In 2012, he made a record-breaking solo dive to the bottom of the Mariana Trench, the lowest point on earth—a feat he chronicles in a new documentary

Interview by Josh Rottenberg

Photograph by Pamela Littky

Fast Company: The Mariana Trench is a barren area. You weren’t going to find any intelligent creatures down there, like in The Abyss. Why spend $10 million (in excess of R111.5 million) of your own money to build a submersible vehicle—which you’ve since donated for research—and risk your life diving more than 11 kilometres below the surface?

Cameron: We did find 68 new species on the expedition, which is of interest to science—and had my hydraulic system worked better, I would have brought back a lot more. But we always knew this film was not going to be about finding an 18-metrelong giant squid or any bizarre fantasy creatures. We knew it had to be about the exploration gene: what drives people to explore and what it takes to do it.

[The deep sea] is the last great frontier on Earth, and we know very little about it. The Hadal depths comprise an area greater than North America, which has literally never been seen by human eyes. For me, that’s more than reason enough.

In the documentary, James Cameron’s Deepsea Challenge 3D, your wife, Suzy Amis, says that at one point you debated giving up making movies to focus solely on exploration.

It comes from not being one thing as an individual. Being an artist and a kind of would-be scientist, or science groupie, I had that decision to make in college. I was studying physics and astronomy and then I switched to become an English major. As a scientist, you have to specialise—you have to go very narrow and very deep to make any difference. My broad curiosity about the world—about space, the oceans, neuroscience—would not be satisfied. As a writer and a filmmaker, I can satisfy those curiosities better.

We get a sense in this movie of your managerial style, which involves putting people under tremendous pressure and seeing how they perform. How do you find the line between demanding and dictatorial, and have you ever fallen on the wrong side of it?

Oh, yeah, back in the old days, when I was a young ‘auteur’. The second you think you’re an auteur, you’re sunk. Then you’re just a diva. That’s not how it works on these engineering projects.

The only way to have built that vehicle in any reasonable time frame and budget was to do it with a small, dedicated, multitasking crew. There’s a lot of pressure on people as you start to approach deadlines. As the one paying the bills to get the vehicle built, I was the one who had to remind people that they had to hit their milestones. It doesn’t always make you popular, but I think it’s a question of how you do it.

OCTOBER 2014 FASTCOMPANY.CO.Z A 57

Creative Conversation

“Everybody had to sit around a table every morning at 8:15—not 8:14 or 8:16— and we’d air out our problems. There would be no offline conversations.”

The process I used was called ‘total radical transparency’. Everybody working on the vehicle had to sit around a table every morning at 8:15— not 8:14 or 8:16—and we’d air out our problems.

There would be no offline conversations about things that were going wrong. You bring your problems to the group, and we as a group would solve them. People thought I was crazy, but after about two weeks, we started really working as a team. They started to understand that you don’t hide your problems—you bring your problems to the group.

You’ve always been interested in pushing the limits of technology. What new tech are you employing in the three Avatar sequels you’re making, which will be rolled out starting in 2016?

About two months after we finished Avatar, we came back and did a big post-game analysis. I asked every department to develop a white paper on what we did right, what we did wrong, what we could do better next time. And out of that came our marching orders for developing new software and improvements to the system. So [the technology on the Avatar sequels] won’t be anything revolutionary—it’s just ways to make our pipeline more efficient, more creatively intuitive and more cost-effective.

Avatar was a very costly film, and I think a lot of that cost was justified in the sense of it being hopefully a prototype for a franchise. But to make it a franchise business, we have to lower the cost. So we’ve spent the last two-and-a-half years developing new software, new tools, and just making it a better system.

There’s been a renewed enthusiasm for virtual reality with Facebook’s recent purchase 58 FASTCOMPANY.CO.Z A OCTOBER 2014

30-SECOND BIO Name James Cameron

Title Writer, director, explorer

Notable credits The Terminator (1984), Aliens (1986), The Abyss (1989), Titanic (1997), Avatar (2009)

Lifetime box-office receipts More than $6 billion (R63.966 billion) worldwide

Education Enrolled in a two-year community college but dropped out before graduating

Hometown Chippawa, Ontario

Personal interests Scuba diving, plant-based eating, environmentalism

of Oculus. Do you envision a place for VR in the future of movie-going?

There’s nothing new about VR. It may be productised in a new way and we may find more of it entering the home and being accessed online, and so on. But I think VR and conventional cinema are two separate things. The whole point of directing a movie is directing an audience’s eye to the thing you want them to see, but in a VR environment, they’re free to direct themselves.

It’s a lot more like a video-game environment.

Where those two merge, it creates a new art form that’s kind of exciting to think about. But it won’t have much to do with what you currently experience in a theatre.

The actor Viggo Mortensen said recently that he felt Peter Jackson became too enamoured with CGI as he was making The Lord of the Rings films, to the point where the spectacle overwhelmed the narrative.

I guess he’s not planning on working for Peter again!

But does he have a point?

I think it’s deeper than that. It’s not that the tech is getting in the way. The tech enables the creativity.

That’s what people need to understand. The virtualperformance capture we’re doing on the Avatar films enables a form of creativity that never would have been possible before, in the same way that the invention of the camera enabled the creation of cinema in the first place. When people first invented photographic film and lenses and all of that, that was an artifice. I’m sure there were theatre actors who said, “Oh, all this stuff with all these lights and cameras—get that out of the way and let’s go back to pure acting.” But that’s not what we did. We incorporated acting into a new art form.

In terms of exploration, where would you want to go next—into space?

I’ve had my hand in space exploration for a long time. I wound up on the NASA advisory council [from 2003 to 2005] during one of the most difficult times in its history, but when I realised how dysfunctional that organisation is, I shifted my focus to robotic exploration.

This country really doesn’t have a manned space programme anymore—we gave up on it. I don’t fault NASA—it’s an issue of public and political will.

Elon Musk and private enterprise will bring that capability back.

In terms of my going into space? Possibly. But it would be to do something specific. I wouldn’t be

Previous spread: Grooming: Andie Michaels. This page: Mark Thiessen/National Geographic

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Creative Conversation

National Geographic

interested in one of these suborbital hop-up flights.

It would have to be orbital and generate something— a 3D film, presumably—that would have something significant to say.

In The Terminator, you envisioned a future in which machines would become self-aware and take over humankind. Thirty years later, how do you think that prophecy holds up?

It’s happening. When people are arguing over whether drone aircraft should be able to autonomously take out a human target, you’re into Terminator territory.

Sit in any airport lounge and look around at the number of people who are hunched over, looking at a device. The machines have already won—only in a way that the Terminator films didn’t imagine.

Teamwork: “You bring your problems to the group, and we as a group would solve them,” said Cameron.

We’ve talked a lot about technology. What are some analogue ways you like to get your creative juices going?

I’m stimulated by what other artists are doing, so I watch other films. Dreams are a great resource for me—I’m constantly getting dream imagery and writing things down.

Getting out in nature is inspirational. And I do yoga.

That meditative state that you reach at the end of a practice is a good place to free-associate.

People may be surprised to learn that you do yoga.

I wish I’d discovered it 25 years ago! I’d probably be a lot more flexible. But, you know, life is a journey.

OCTOBER 2014 FASTCOMPANY.CO.Z A 59

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FAST CITIES

W H AT T H E REST OF THE WORLD FACES THE ROCKEFELLER F O U N D AT I O N H A S PICKED 32 CITIES SO FA R . I T S AY S T H E I R M A I N T H R E AT S A R E :

HIRING A HERO

To slow gang violence . . .

Medellín, Colombia

To protect against future disasters, cities are adding a new job: chief resilience officer

By Matt McCue

Illustration by Greg Kletsel

To sidestep liquefying earth . . .

Christchurch, New Zealand

Three-fourths of all people will live in a city by 2050 (up from 50% now), per the United Nations—an influx that keeps urban planners so busy, they struggle to prepare for the calamities that threaten their residents.

Dense areas, after all, are bad places to be during a typhoon or a riot. To spur action, the Rockefeller Foundation is giving 100 cities a gift: funding to hire a ‘chief resilience officer’ (CRO) tasked with disaster prevention and response planning. The first jobs are being filled now. Here’s how they’ll help three recipients.

60 FASTCOMPANY.CO.Z A OCTOBER 2014

To fight fire and floods . . .

Boulder, Colorado

Violence and drug trafficking are rampant here, and the city has responded by trying to ease inequality. New CRO Santiago Uribe Rocha is particularly excited by a gondola system (built in 2004) to bring in people from surrounding mountain villages, and an expanded metro system with no more transfer fees. Rocha will build upon this, he says, increasing opportunities by “integrating our society through transportation”.

Earthquakes in 2011 destroyed schools, hospitals and thousands of homes; about 12 000 aftershocks have followed. The future CRO will help the city reorganise around mapped zones. “In the green zone, you can mostly build as usual,” says a city council spokeswoman. “But where the ground is prone to liquefaction, the city put up notices encouraging people to move.”

In the past five years, Boulder suffered the state’s most financially destructive wildfire and one of its worst floods—a result of its seat at the intersection of the Great Plains and the Rocky Mountains. “We have a hazard mitigation plan, a drought plan and capital-improvement initiatives,” says Boulder’s environmental planner, Brett KenCairn. But the teams who made them rarely work together. That’ll be the CRO’s job.

Flooding: Bangkok Jacksonville, Florida Mandalay, Myanmar Mexico City New Orleans New York Norfolk, Virginia Oakland, California Rio de Janeiro Rotterdam, Netherlands Semarang, Indonesia Surat, India Vejle, Denmark Extreme weather: Da Nang, Vietnam Melbourne, Australia Quito, Ecuador San Francisco Inadequate infrastructure: Berkeley, California Bristol, United Kingdom Byblos, Lebanon Dakar, Senegal Porto Alegre, Brazil Ramallah, Palestine Rome Economic inequality: Durban, South Africa Violence: Ashkelon, Israel Sustainability issues: El Paso, Texas Los Angeles Glasgow, Scotland

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DESIGNING THE PERFECT S TA F F An Aussie entrepreneur went to San Francisco for funding. She got it—along with a lesson in making great hires Photograph by Christopher Morris

MY WAY

Melanie Perkins

Founder and CEO of Canva, a startup that makes online graphic design simple

“The first time I went to San Francisco, I met with Lars Rasmussen [a Danish software engineer who helped create Google Maps, currently works for Facebook, and became a seed-round investor for Canva]. He was really impressive in helping me find the right technical co-founder.

“I would go to every conference, every event, every talk I could get to. I was coldcalling people, emailing people on LinkedIn. I would take people’s résumés back to Lars and get his advice. And he would almost always say, ‘They’re not good enough.’ And then I would take him a person—a physical person! And he would interview them. And he would come back to me and say, ‘Well, we can’t take that person, either. They’re not up to the technical bar.’

“This continued for ages. I got frustrated and I thought: surely it’s better to just start saying yes, so we can get going with this mission, rather than just saying no to everyone.

“But eventually, when we got the right person [Cameron Adams], it made all the difference.

Once we’d met that bar that Lars set, it really helped set the right standard. And now we’ve been able to build a team of 22 pretty amazing people.”

—As told to Nicholas Fonseca Be choosy: “When we got the right person, it made all the difference.”

62 FASTCOMPANY.CO.Z A OCTOBER 2014

The Revolution will REIGN ON DIGITAL Man first marvelled in thought, when he gained access to the written word. Thousands of years later we evolved to a society of makers as we work towards a connected planet.

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FACE 64 FASTCOMPANY.CO.Z A OCTOBER 2014

BOOK EVERYWHERE

CEO Mark Zuckerberg’s audacious plan to rewire the app economy—

and make his social network more relevant than ever

By Austin Carr

Photographs by Melissa Golden

At f8, Facebook wowed developers with VR stations, visualisations of their app data, and more.

As the Facebook CEO makes the rounds at f8, the company’s daylong developer conference, it is clear that he is among his people. Fifteen hundred hackers have amassed, the first time Zuck has called this flock together in two-and-a-half years.

They’re here to attend engineering sessions about how to build, grow and monetise their apps; to munch on plastic-wrapped sandwiches trucked up from Facebook’s Menlo Park headquarters; and to try to catch a glimpse of Zuck casually hanging out by the Oculus Rift demo, a sight even more surreal for them than the virtual-reality experience itself.

66 FASTCOMPANY.CO.Z A OCTOBER 2014

GUTTER CREDIT TK

MARK ZUCKERBERG STREAMS THROUGH THE CROWD AT THE CONCOURSE EXHIBITION CENTER IN SAN FRANCISCO LIKE A POLITICIAN WORKING A PANCAKE BREAKFAST.

In contrast to his grand stage at f8, Zuckerberg revealed a wonky new motto: “Move fast with stable infra.”

Despite the stuffy heat—the 11 600m2 space doesn’t have air conditioning, so Facebook had to import its own ventilation ducts, which hum along the wooden ceilings—Zuck looks cool and relaxed in his T-shirt and jeans. He walks tall, chest out firmly, and with each quick hello he leaves a trail of starstruck smiles and excited whispers in his wake, as if Harry Styles were strolling through a suburban shopping mall. As one beaming attendee says after shaking hands with the CEO, “He seems pretty f­ucking confident!”

Zuck, now 30 years old, has reason to be confident. His company is crushing it.

Monthly active users: up to almost 1.3 billion worldwide. Engagement: up, with more than 50% of users now visiting the service six days a week and, according to a report by the app-analytics firm Flurry, spending 17% of their time on their phones in Facebook’s app, far and away the most popular service on iOS and Android devices. Speaking of mobile, Facebook, which spent all of 2012 and into 2013 dogged by concerns that it would not be able to make money on people’s phones, now generates 59% of its ad revenue from mobile.

One particular ad unit—the one that suggests apps a Facebook user may want to download—is the envy of the entire industry and is being widely copied. Revenue for the first quarter of 2014 was $2.5 billion (about R26.6 billion). The company earned profits of $642 million (R6.8 billion), almost triple its haul a year earlier.

These feats are even more impressive when you consider Zuck is delivering results with a core product that has been criticised for being as stagnant as it is ubiquitous, a place where parents and grandparents share photos of kids who may be less likely to embrace the service when they grow up. In a world churning out startups with one innovation after another—Snapchat, Tinder, Whisper—Facebook can seem like yesterday’s news. Yet, how many businesses see revenue and engagement surge as passion for their products stalls?

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Zuck went on a shopping spree last February and March which seemed, on first blush, downright desperate. On February 19, Facebook announced its acquisition of global-messaging phenomenon WhatsApp for almost $19 billion (R202.5 billion)—the largest sum ever paid for a venture-backed startup.

Five weeks later, Zuck shelled out $2 billion (R21.3 billion) for the promising virtual-reality headset company, Oculus VR. Two days after that, he spent $20 million (R213.1 million) on a drone company. Yes, drones.

Although Zuck has outlined his three-, fiveand 10-year goals for employees, he has never crisply explained publicly how all these recent moves fit together, and that has tech watchers buzzing about whether he and the company have lost their way. But after dozens of interviews with current and former employees, rivals, advertisers, developers and users, it becomes clear Zuckerberg has launched ­Facebook on an aggressive and potentially brilliant strategy—one that has

FOUR METRICS TO UNDERSTAND FACEBOOK Birth of a social conglomerate

Awakening the Mobile Giant Within AD REVENUE: December 2011

April 2014 Mobile 59%

Desktop 100% Mobile 0%

Desktop 41%

MONTHLY ACTIVE USERS (MOBILE): December 2011 432 million

April 2014 1.008 billion

Enhancing Revenue Per User Q1 2014:

Europe $2.44

North America $5.85

Asia $0.93

Total $2

Rest of World $0.70

Building a Portfolio of Brands

GUTTER CREDIT TK

MONTHLY ACTIVE USERS:

April 2014 Facebook 1.28 billion

Messenger 200 WhatsApp million 500 million Instagram 200 million

Illustrations by Marco Goran Romano

very little to do with the company you think you know based on your desktop use of its social network. [Facebook granted Fast Company access to several company executives, but not to Zuckerberg or chief operating officer Sheryl Sandberg.] To make Facebook more relevant than ever, the company has targeted the very core of the app economy to fulfill its vision for the next half-decade. As the six lessons that follow illuminate, the great social network of the early 21st century is laying the groundwork for a platform that could make Facebook a part of just about every social interaction that takes place around the world.

[1]

The hacker way can’t solve every problem.

To understand where Facebook is going, you need to start by understanding where it’s been. Remember Poke? How about Gifts, or Beacon? Graph Search? Camera? Facebook email? Places? Deals?

If none of these rings a bell, don’t worry. They’re all Facebook products introduced in the past seven years—and they were all failures.

Together, these missteps have become symbols of a culture where innovation has seemingly evaporated. It’s even infected Facebook’s subsidiary Instagram, whose two big releases since being acquired—video sharing and Direct Message— flopped, according to a source familiar with the company’s metrics.

The most prominent failure of all, perhaps, was Home. Introduced on April 4, 2013, at a splashy event replete with overwrought Jobsian flair and blockbuster expectations, Home was a novel software experience created to give users a distinctive Facebook-first way of using Android phones. “A lot of people came over from Apple to work on this stuff,” says a product manager on the project. But Home bombed, receiving a tepid reception from critics and an even worse one from consumers. Just a month after launch, HTC, Facebook’s hardware partner, slashed the price of its phone that came preinstalled with Home to 99 cents (R10.85), and weeks later discontinued it altogether. “Everybody was disappointed,” says the manager.

How did Facebook find itself in this predicament? The company’s culture, forged in its earliest days, has been built around a motto— “Move fast and break things”—which has become so famous that it almost stands as the preeminent cliché of Silicon Valley.

Zuckerberg encouraged an environment where employees understand it is better to build and prototype an idea rather than just talk about it. “Code wins arguments,” says Will Cathcart, an engineering “We actually had lead at Facebook, repeating another of the company’s studies three years mantras. This philosophy, known as ‘the hacker ago that clearly way’, provided the fuel for Facebook’s ascension. demonstrated But it has hit roadblocks along the way. For one people didn’t want thing, as the company has grown to include almost one big blue app,” 7 000 employees, Facebook remained overly says a former dependent on Zuckerberg, whose blessing has been product manager. required for projects to gain steam beyond their origins in Red Bull-fuelled hackathons. “You face the reality of large organisations, where it’s hard to convince anyone to give you resources [for an idea],” says one product manager who recently left to build his own app. “There’s that lure of saying, ‘You know what? I’m too worn out to fight [for this idea inside Facebook]; I’ll just leave and try doing it on my own.’ ” Projects that did fight their way through the system faced other burdens rooted in the company’s history. The ‘truth’ of data is so paramount at Facebook that products were given little time to improve after launch. “A startup would try again or change it,” that recently departed manager says of Facebook’s graveyard of failed products. “But that kind of culture doesn’t exist at Facebook. If something doesn’t work off the bat, it’s like, ‘Okay,

OCTOBER 2014 FASTCOMPANY.CO.Z A 69

70 FASTCOMPANY.CO.Z A OCTOBER 2014

[2]

A single Facebook app, no matter how dominant, isn’t enough.

This isn’t an analogy you’ll hear from anyone at Facebook, in part because it sounds crazy, and in part because Zuckerberg just doesn’t seem to be making his strategy clear these days. But one way to think of Facebook is as the Coca-Cola of social media.

Warren Buffett is addicted to Coca-Cola.

He’s never sold a share in Coke because it has always offered a flavour to please his taste buds: cherry and orange and lemon-lime

FACEBOOK’S 10-YE AR PLAN

Why Zuck is betting on virtual reality, drones and artificial intelligence

VIRTUAL REALITY

Oculus VR headsets could deliver virtual tours with friends and a whole new way to live-chat.

GUTTER CREDIT TK

the metrics aren’t working, let’s put the engineers over here.’ ” One nasty byproduct of this approach: demoralised employees.

Bret Taylor, Facebook’s former chief technology officer and now founder of a document-creation app, Quip, traces the situation back to Facebook’s earliest success: the integration of photo sharing into the News Feed. Almost by accident, Facebook became the world’s largest photo-sharing site, “creating a dynamic,” says Taylor, “where, when you were thinking of a new product, it was always integrating with News Feed—just like the photos product did, because that’s what drove all of its usage and traffic. The conventional wisdom was that if you don’t do that, there’s no way you’re going to grow as fast.” The problem with this is obvious when you compare the litany of Facebook failures (Beacon, Places, Poke and so on) with successful social apps that have become popular over the same time. Consider Snapchat. Predicting the success of ephemeral photos would have been impossible. And that’s just one of an endless stream of startups experimenting with new ways for people to communicate with one another. A social media startup can be bootstrapped very cheaply. WhatsApp, after all, grew to almost half Facebook’s size with just 55 employees; Snapchat (which Facebook tried to purchase more than once) became a perceived threat with even fewer people. Which means that Facebook faces an eternal game of Whack-a-Mole as it tries to predict what’s a fad and what’s the future. Throw in the impediments of data and bureaucracy, and the chances of creating a breakthrough app within Facebook become slim, indeed.

Zuck seemed to acknowledge this challenge when he announced a division last February called Creative Labs, which functions as a separate space outside of Facebook’s traditional product teams, for “things that are nascent.” At the same time, Facebook revealed what it said was the first Creative Labs product: Paper, an elegantly designed mobile app for read“The glass-half-full ing and responding to your News Feed. “Creative view: Facebook Labs allows teams to go off with very loose time is a very innovative constraints and think about problems,” says Scott company and it Goodson, a leader on the Paper team and a former is looking for senior software engineer at Apple. “A lot of the other like-minded, core people came here because they saw that level blue-sky thinkers of ­freedom—they wanted its small-team feel.”

If you start asking questions about Creative to join its world.”

Labs, though, it becomes less clear just what Zuck and company have learnt from their product misadventures. “There’s no Creative Labs building; there’s no, like, Creative Labs organisation,” admits Cathcart, who serves as the engineering lead for several (but not all) projects that Facebook has anointed with the Creative Labs moniker. Cathcart describes Creative Labs as more of a framework. It’s one with a striking familiarity.

“Honestly, a lot of it is Mark,” he says, meaning that the way an idea gets green-lighted as a Creative Labs project is exactly as it’s always been.

One thing that does seem to be different: Facebook seems willing to be more patient and iterate on ideas rather than just scrap them. Paper, which was in development before Facebook devised Creative Labs, has grown slowly, at least in Facebook terms, and it is being downloaded less and less. But during Facebook’s first-quarter earnings call, Zuck said that products like it will be given room to grow and come into their own, indicating that the company won’t even worry about trying to make money from any app until it reaches more than 100 million monthly active users. According to reports in mid-May, Facebook had decided to try again with a Snapchat-like service after its first knockoff attempt, Poke, disappeared almost instantly. All this signals that Facebook can’t simply follow its long-standing hacker playbook. It still wants to try to create great products, but it is also willing to buy the hottest next-wave services when it can’t. And as we’ll see, it’s become crucial to tap into a much wider network of apps to fuel its success.

Photographs by Kevin Van Aelst

sodas, energy drinks, flavoured waters, organic juices and teas. Coke serves 1.9 billion drinks per day because the 122-year-old conglomerate recognised long ago that customers will forever thirst for something new. Whenever and wherever you are thirsty, Coca-Cola will be there for you.

Zuck wants Facebook to be just like that.

When you think about it, social media at first seemed to be a kind of basic cola designed for all tastes. But, of course, it has proved to be much more than that. Especially after online interactions migrated to mobile devices, users began craving more specialised flavours, encompassing everything including

Buying a virtual-reality startup and investing in drones, as Facebook has done this year, may not seem to fit into its evolving mobile-platform strategy.

And in some ways, those deals don’t. In the near term, Facebook is focused on

DRONES

Delivering highspeed Internet from the sky would empower users in emerging countries who can’t even share photos today.

communication via photos, instant messaging, group and video chats, and more.

Zuck wants Facebook to be involved, in some way, in each of these exchanges.

Frankly, he has no choice but to try if he’s going to achieve his goal of adding 5 billion more active users—Coca-Cola-like ubiquity—and creating a business that makes today’s Facebook seem tiny.

The Coca-Cola of social media won’t look like today’s Facebook because it will become less and less reliant on the basic cola—the desktop experience that was rather clunkily transported to that big blue app on your phone or tablet. “There was a lot of debate ­internally as to whether all these experiences should live in the core Facebook app or whether they should live in separate applications,” says Josh Williams, the Gowalla co-founder who spent a year-and-a-half at Facebook after it acquired (and shut down) his startup. “Should there be a Facebook Local app? A Facebook location app? A lot of people, including myself, thought that should be the case instead of shoving them in the more drawer on the core app.” (The more drawer he’s referring to is the button on the bottom right of the Facebook app, under which it has slotted things like Groups and Nearby Places.)

building out its potential in today’s mobile-social nexus.

Five years from now, the company may look more like a direct competitor to Google. Facebook’s interest in VR, drones and artificial intelligence is connected to goals that are a decade or

more away: enabling (and dominating) new social interactions; welcoming a new population of customers into the fold; and delivering next-level personalisation and experiences. The breadth of Facebook’s ambition is impressive.

ARTIFICIAL INTELLIGENCE

Facebook could understand what people post so it can anticipate what they want to do next.

“I’m a little surprised it took so long,” says one former Facebook product manager who helped build its mobile platform. “We actually had studies three years ago that clearly demonstrated this was the strategy that we needed. People didn’t want one big blue app.”

The company considered creating a series of Facebook-branded apps (a strategy it flirted with when it launched Poke and Camera in 2012), but research made it clear that users were growing totally comfortable with—indeed, were beginning to prefer—apps that served a single function and that had no connection to a centralised behemoth. “All of them had four to five different social apps on their phones,” says the source of the still-confidential studies. “The more we dug into why, the answer that came back pretty much universally across the board was, ‘This is how I keep my friend groups separated.’ ” Thinking of itself as a conglomerate of apps, rather than as a single one, is a mind shift for Facebook. The user numbers behind each of those smaller apps can pale compared to the almost 1.3 billion people who employ the big blue app. But it’s not just Coca-Cola that has made this kind of leap. Television networks are one example of companies that have captured a wide swath of consumers and then diversified into new turf. Fox has FX, FXX, Fox Movie Channel, Fox Sports, Speed, Fox News and Fox Business. Earlier tech giants did so as well. Yahoo! grew from being a directory to providing email, news and sports products; Google, more notably, went from search to Gmail and Android.

Facebook is following an analogous path. “They “By April of 2013, have this kind of suite developing where they have App Ads was the Instagram and WhatsApp, and it’s easier to position worst-kept secret it like a grouping of experiences,” says Williams, in the gaming who left Facebook before it decided on this approach. industry,” says “I have to respect Mark a lot for his aggressive John Earner, whose execution on his strategy. Home base is covered, and Samurai Siege we’ve dug a moat around our castle now, and we can now makes be a little bit more aggressive on these fronts because the likelihood of this core toppling over is low.” $70 000 a day.

[3]

There’s a big opportunity in catalysing everyone toward a single goal.

Transforming Facebook into a multifaceted operation won’t be easy. But a little-noticed change that Zuck made two years ago paved the way.

For a long time at Facebook, the advertising team was responsible for the ad products, and the product teams were charged with creating and refining the user experience. They were separated, the way that business and editorial at a newspaper are, because Zuck believed that the product team should focus only on the consumer’s experience, without being distracted by financial concerns. The ad team was rewarded for increasing revenue, while the product teams were assessed based on user-engagement metrics.

A number of key players within the company began to argue that if Zuck rewarded all teams for contributing to revenue, the enterprise would get a whole lot more ideas, and they would be better, more creative, more diverse. According to a former senior employee with knowledge of the conversations, Zuck was reluctant to make the change, but eventually agreed. Under a revised management structure, the News Feed product team, for instance, would now be accountable for how much money came through News Feed advertising, and the mobile product team would be charged with developing ideas to make money through mobile. “It was a very awkward thing,” says the former employee.

But the impact proved to be profound. “As we went through our mobile transition, we had to figure out something different in how ads integrated with content,” says Mike Vernal, Facebook’s vice president of engineering. “That precipitated rethinking how we think about making ads feel like a really well-integrated experience.”

72 FASTCOMPANY.CO.Z A OCTOBER 2014

“The News Feed team all of a sudden was coming back with suggestions about what to do with the ads product that the ads team had proposed six months ago, but were shot down because they were too consumer-aggressive,” says the former employee. “But now the Feed team wanted to do those things. It was like, ‘Oh? Well, twist our arm! Sure! We’ll help you do that! Sounds like a good idea! Why didn’t we think of that?’ ” This single decision might have been the main catalyst behind Facebook’s rebound after the company saw its market capitalisation more than halved during the months after its May 2012 initial public offering. At first, investors didn’t believe Facebook had a good plan for generating more revenue from its customers, especially those using Facebook on their phones. Facebook’s move to integrate the teams led to its running ads within their apps’ News Feed, and that led to its first breakthrough mobile-advertising product.

App Ads are units that only appear on phones and tablets in Facebook’s mobile app.

As the name suggests, they promote other apps, ones that Facebook thinks you may like based on your usage history. Better yet, each features a prominent install now button, allowing Facebookers to download the promoted app with a tap. “App stores are effectively popularity contests,” says Vernal.

“If you make the top 10, you’ll get a bunch of people using your app. But if you’re No. 11, you basically fall off a cliff.” In return for using its massive popularity to drive users to interesting apps, Facebook, according to developers, is charging its advertisers as much as $3 to $4 (R32–R42) for each new customer.

“It’s solving that problem of discovery,” explains Facebook product-management director and App Ads creator, Deb Liu. The ad unit debuted in November 2012, and the results thus far have been nothing short of phenomenal. In 18 months, this one advertising product has resulted in 350 million app installations. Facebook does not break out revenue by ad product, but by our estimate that would translate to roughly $1 billion (R10.6 billion). “By the third day of testing Facebook [App Ads], it was already dominating every mobile-ad source out there,” says John Earner, CEO of mobile-game startup Space Ape, one of the first developers to use the ad unit. “By April of 2013, App Ads was the worst-kept secret in the

THESE KIDS TODAY

GUTTER CREDIT TK

Facebook appeals differently to various teens in South Africa The emergence of smartphones has made accessing social network sites faster, easier and cheaper. The smartphone age is well and truly upon us, especially to teenagers—and it’s for one reason only: social networking.

As a matter of fact, social networking sites have become so much of a problem and distraction for students, that most schools have had to block websites such as Facebook, Twitter, Skype, Instagram and Snapchat, among others.

So the next question would be: What is the most widely used social network site among these teens? In South Africa, getting a uniform response to this question is not a simple exercise. The Rainbow Nation holds different views according to race, socioeconomic standing and even geographical location.

Paige, 18, from Limpopo, says: “The most popular social networking sites to me and my friends are Tumblr, WhatsApp, Facebook, Instagram, Snapchat, Skype and Twitter. The majority of these sites allow us to share pictures. In my opinion, I think teenagers like to see photos of each other so that they are engaged in each other’s lives in a physical sense.

The concept of liking each other’s photos is to show support of the person’s activities during one’s free time.”

And what do you think of Facebook, I enquire? “The most used social media site is Facebook, but in my opinion, it is not as great as everyone makes it out to be. It has become annoying because so many people use it and it’s a scary thought to look at one’s friends list to see that it is possible to have over 900 ‘friends’. I hardly know some of the people who are my ‘friends’ there, yet they have access to all the photos I post and can see my activity at any time of day. It’s scary knowing that people can save

these photos and have access to any of my personal details I choose to share,” she explains animatedly.

Daniel Miller, a professor of Material Culture at University College London, ran a 15-month ethnographic study on 16- and 18-year-olds in the United Kingdom, concluding that Facebook “is basically dead and buried”. The seminal moment in a teen’s decision to leave Facebook is “that dreaded day your mom sends you a friend request”.

Minenhle, a 16-year-old from rural North West province, feels differently, however. “I love Facebook; I’m only on that and Twitter. I can easily talk to my friends on Facebook and I get to see what all my friends are up to.”

Do you interact with your family through Facebook as well, I ask? “No, not really... My mother doesn’t even know how to use WhatsApp, so Facebook would be too advanced for her. I talk to my cousins, though—the younger ones and those in the city,” she says.

Mashi, 17, says: “I use BBM [BlackBerry Messenger app] and WhatsApp to talk to my personal friends. I like Facebook because I can communicate with a broader group of contacts. I don’t have to email anyone; actually, I think you would rather text or SMS someone than email them—it’s stupid,” she says.

A year ago, Facebook co-founder Mark Zuckerberg talked about how unhip the site had become, saying that “coolness is done for us”. He might have been right about that because the bright, polite, honest and cool teens with whom we spoke certainly understood the functionality of Facebook. They also understood its limits and effectiveness. However, none mentioned the word “cool” when talking about Facebook.

A tool, yes, cool... Well, not really.

—Evans Manyonga

FACEBOOK in South Africa People access Facebook wherever they are:

40%

36%

55%

check Facebook in bed and when walking

check Facebook in bed before sleep

check Facebook on mobile when out and about

95% check Facebook on mobile when at home

Facebook is the place where most second-screen activity takes place FACEBOOK DOMINATES THAT ACTIVITY: 12X

more popular than YouTube

80% of viewers use other devices while

watching TV 73% use mobile phones 9% use tablets 6% use laptops

5X

more popular than Twitter

TV primetime is also active Facebook time

92% access Facebook from 5 p.m. to 9 p.m.

Brands play a big part in people’s Facebook activity:

62%

71%

of 12- to 24-year-olds said they had interacted with a brand

52%

of people using Facebook said they were influenced by things they saw there

of people who use Facebook said they had interacted with a brand

FACEBOOK USERS IN SOUTH AFRICA

FACEBOOK AROUND THE WORLD

60%

63%

of active people are using the service daily Monthly active people

11m

Mobile monthly active people

10m

79%

of people access return daily Facebook on mobile

24

Daily active people

Monthly active people

Mobile daily active people

Mobile monthly active people

6.7m

6.2m

1.28bn 1.01bn

24

Daily active people

802m

Mobile daily active people

609m

OCTOBER 2014 FASTCOMPANY.CO.Z A 73

gaming industry.” Space Ape’s Samurai Siege game pulls in $70 000 (more than R746 700) a day by spending up to 75% of its marketing budget on App Ads. More broadly, Facebook reports that 60% of the top-grossing apps on Apple’s App Store and Google Play use App Ads.

[4]

To win the future, you need to be as bold as Google.

The resurgence of Facebook’s stock has enhanced the company’s ability to acquire innovation that’s taking place elsewhere. Zuckerberg is aggressively using company stock to buy startups—because he knows that at least one other competitor is trying to beat him to the punch. “The biggest existential threat is not Snapchat,” says one employee who has heard Zuck speak about his strategy. “Their biggest concern is Google.”

As social messaging took off around the world, “Facebook was obsessed with WhatsApp,” says a former Facebook product manager. In the months before the acquisition last February, one where Facebook reportedly outmanoeuvred Google to close the deal, “most meetings you would go to regarding growth and competition, you’d hear about WhatsApp. Mark is a very paranoid person in the way he thinks about Facebook. He cannot stand that there are other people out there doing something better than Facebook. And WhatsApp was clearly doing that: It was faster, more reliable [messaging].” WhatsApp filled a need, at a hefty cost.

Virtual-reality firm Oculus, on the other hand, is a long-term bet at a tenth of the price.

It’s a roll of the dice. Why would Facebook want to be a significant player in how people interact in 3D virtual worlds? Because if 3D is another version of social media, then the company doesn’t want to leave that territory open for someone else to develop. The same is true for the $20 million Zuck spent on a drone company, a technology that fits in with Zuckerberg’s utopian vision of a world in which everyone, no matter how poor, has ready access to the Internet.

“The glass-empty view,” according to one former top Facebooker who has worked closely with Zuck, “is that Facebook can’t innovate internally, so it has to buy all these companies. And the glass-half-full view: Facebook is a very innovative company and, as a result, is looking for other like-minded, blue-sky thinkers to join its world.” The fact that Zuckerberg can more often than not persuade “App Links is one startup founders to join the company and work of those products with him is a vote for the glass-half-full perspective. like motherhood “What I found compelling was Mark’s commitment and apple pie,” says to spending a lot of time with us,” says Oculus Facebook VP of CEO Brendan Iribe, adding that he’s talked to Zuck engineering, Mike nearly every day since the $2-billion buyout. “He Vernal. “How could spends a lot of time with Kevin [Systrom] and you be opposed?”

Instagram, and has made the same commitment with Jan [Koum] and WhatsApp. If you look at a company like Google, from what I’ve heard, Sergey [Brin] and Larry [Page] are too busy to work on any one project, so you don’t get much of their time.”

Facebook co-founder Dustin Moskovitz, who now runs Asana, a fast-growing enterprise-software company, notes that while Zuck’s personal style differs from that of Google’s co-founders, both companies are pursuing a similar strategy. “Rather than just refine the existing product and nail it down to harden against potential competitors,” he says, “Facebook, very similar to Google, is saying, ‘Okay, we have all these resources; what bold new things can we do?’ ” As one employee who spoke on the condition of anonymity puts it, “I always assumed these big moves were out of desperation,” he says.

“But I actually think it’s more like, ‘Fuck it, we’re going to get Google.’ ”

74 FASTCOMPANY.CO.Z A OCTOBER 2014

[5]

Empower other entrepreneurs to achieve their dreams, and benefits will accrue to your platform.

Largely unnoticed among Zuckerberg’s recent acquisitions was his April 2013 purchase of Parse, a well-regarded mobile-infrastructure startup. Facebook bought it for a reported $85 million (R906.8 million).

While the dollar value of the deal was modest, this acquisition may say more about where Facebook is going than all the others.

At the time of the Facebook acquisition, Parse made it easy to build apps faster by offering ready-to-use web-based services for otherwise tedious tasks such as creating notifications. Some 60 000 apps relied on Parse, including buzzworthy offerings from brands like Armani and the Food Network. Facebook execs had been talking with Parse’s founders since 2011, when the company had just six employees, and Zuck reportedly won the deal over Dropbox (Google was also apparently interested). “Facebook wants to connect the world, and this is part of it,” says Vernal, Facebook’s engineering VP. “Parse is all about simple and delightful tools for a wide swath of international devices so developers can create great apps.”

Yes, but that’s only the beginning. It is easy to understand how Facebook can make money from Instagram (luxury brand advertising and shopping) and even WhatsApp (competitors such as Line are vibrant commerce platforms).

Facebook now owns all the ad impressions on those services—and on News Feed, and on Paper, etc. Parse promises something else: a way to get a piece of all the other apps that make up the ­universe of mobile social media. As noted earlier, Facebook is already the most dominant single app in mobile, commanding 17% of users’ time. Now Zuckerberg wants a slice of that other 83%, and Parse can be an essential tool in pursuing that goal.

The fundamental challenge to creating a unified mobile platform is that apps are inherently siloed experiences. You can’t surf through apps like you surf the web, where you may start at the Weather Channel and follow a long trail of links—traceable links, by the way— that ends with you seriously contemplating the

purchase of a model train on Amazon. “That’s what made the web what it is,” says Simon Khalaf, CEO of the app-analytics company, Flurry. “Mobile applications are like TV channels. You make the conscious decision to go from one to another.”

The world of apps is further complicated by the fact that companies such as Facebook can’t plant a cookie on iOS or Android to follow you around, as they do in your desktop browser. Benefits aside, we’re less likely to discover new content, new apps—and new ads.

Parse is the backbone of Zuckerberg’s plan to change all that. It gave Facebook an entrée into a critical emerging business: building a new generation of technical plumbing connecting the app world. “A good analogy is Amazon Web Services,” says Sam Altman, president of Y Combinator, which was an early backer of Parse. “If you wanted to build an Internet startup in 2005, you had to buy your own servers and hire someone to manage it. Now, that’s unheard of. AWS replaced all that. Parse and Facebook offer a similar opportunity for app development.”

At f8, Zuckerberg began to reveal the ways in which Parse could lead Facebook deeper into the app economy. Parse CEO Ilya Sukhar introduced the first building block with a new ­protocol called App Links. App Links empowers developers to ‘deep link’ one app to another. As a result, users regain the web-surfing experience within apps, and for Facebook, it creates bridges between its unbundled apps.

Deep linking presents a lot of interesting possibilities. If you were using Dropbox’s email app, Mailbox, for example, and a friend shared a song she was listening to with Spotify, you could click the link and open Spotify directly to that song or artist’s page. This creates a lucrative feature Facebook can offer advertisers: Uber, for example, may like to put a mobile ad into Facebook’s News Feed that lets a user request a car without even opening the Uber app. “This is one of those products like motherhood and apple pie,” says Vernal. “How could you be opposed to it?”

At f8, developers gushed over App Links, saying that it could make Facebook the fabric of the mobile world. If deployed widely, App Links would create a knitwork that would connect users to every delicious service and chunk of knowledge they desire without going through a mobile web browser. The payoff for Facebook would go well beyond whatever it charges for a more-attractive News Feed ad offering.

[6]

There’s massive value in building the infrastructure for the mobilesocial nexus.

The rest of Facebook’s announcements at f8 all tied into this same idea of knitting this mobile fabric. It debuted a mobile like button, which means app creators can make it easier for users to share app content back to their Facebook pages. Zuck revealed a new login product, which lets users sign up for apps anony­mously (of course, Facebook knows who the user is).

And App Ads creator Deb Liu announced the Facebook Audience Network, which helps developers make money by embedding ads into their apps from Facebook’s pool of 1 million advertisers. Ads are both targeted and designed to resemble their app’s look and feel.

Picture how this can work for Facebook: A developer chooses to build her app using Parse.

To get users to discover it, she’ll buy Facebook’s App Ads. When she hits a certain threshold, she’ll start to pay $100 (R1 066) a month for Parse’s services—and more as the app continues to grow. (“You don’t have to pay us until your app gets huge,” Parse’s Sukhar told the f8 crowd.) At this point, to generate revenue, the developer joins the Audience Network, where Facebook will get an unspecified cut of the ad revenue from the spots that run within her app.

And finally, in an effort to get users to use her app more often, she takes advantage of deep linking or other tools Facebook may offer down the road. That’s at least four ways that Facebook could get paid off the same developer—and Facebook would garner the additional benefit of knowing which apps mobile users were excited about.

As one employee who requested anonymity puts it, “Mark does not fuck around. Parse doesn’t have any direct benefit to Facebook.com and the Facebook app. But Parse makes it so much easier to build apps quickly. If you support entrepreneurs to build apps more quickly, you have a lot of data around which apps are doing well, and which aren’t. Small things like that show that Mark is many steps ahead.”

To understand how valuable this could be, remember that the Google ad business, which places contextual ads alongside your desktop search results and across your web surfing, brings in $50 billion (R533.3 billion) annually— six times more than Facebook’s sales.

There are now more than 260 000 apps built with Parse products, but Facebook

doesn’t have anywhere near Google’s heft yet.

There is a cadre of users wary of Facebook’s growing appetite for personal data, and a lot of developers who built on Facebook’s web platform were burned when the company kept changing its rules. A project such as App Links, in particular, will require considerable work before developers fully embrace it.

Although it launched with an impressive list of more than 20 partners, including Pinterest and Hulu in addition to Dropbox and Spotify, developers say it will only become truly effective when many more apps sign up.

This challenge reveals a fascinating strategic shift for the social network: The greatest obstacle standing between Facebook and its ambitions has nothing to do with persuading any of us to log in to Facebook tomorrow or to spend more time using its features. It’s entirely dependent on outside app developers’ adopting these tools. Facebook has become the world’s first social-media enterprise company. “The new Facebook is different from the old Facebook,” says one company insider who spoke on condition of anonymity. To those who remain fixated on what the social network used to be, this source says: “They’re just going to have to learn. We’re in a different world.”

If Zuckerberg succeeds in making Facebook, in essence, the most important mobile platform on the planet, he will create all kinds of other opportunities for the company. Expanding globally will become even easier, as the social network learns more and more about the habits of international users. New lines of business, like enabling peer-to-peer payments, are likely to open up; no other company knows as much about the many people it connects. Indeed, the more it becomes an enterprise company, the more the Facebook of five years from now will have erased all traces of the dorm-room quirkiness on which it was founded.

That may seem sad to those who once loved the service, or it may seem to be further evidence that Facebook will never again be cool.

But you get the sense that Zuck couldn’t care less.

There was one other thing he debuted at f8: a motto to replace “Move fast and break things.”

The new one? “Move fast with stable infra.”

That’s it. Really. Perhaps never in the long history of Silicon Valley has a company rallied under a clunkier cry. But if Facebook actually executes on the phrase, it will come to have a charm all of its own. acarr@fastcompany.com

With additional contributions from Mark Wilson

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FAST COMPANY PROMOTION

SHARP MEN S O LV I N G S M A R T LY Introducing Seartec, an old South African company with a new vision to disrupt the status quo—chief disruptors Mark McChlery and Bob Skinstad are the men charged with re-engineering and reigniting the Sharp brand in South Africa

T

Premier brand: Mark McChlery believes there’s no reason Sharp can’t reclaim pole position in South Africa.

76 FASTCOMPANY.CO.Z A OCTOBER 2014

he unassuming entrance to Seartec’s temporary offices in a Woodstock warehouse belies the innovation taking place inside. Just up the road in Observatory, the appropriately named Sharp House has been gutted and redeveloped as the Deneb headquarters of a company that’s on the move.

It’s sort of a metaphor for what has happened in the 10 months since McChlery and Skinstad were headhunted by the Seardel Investment Corporation Limited in November last year to revive the distributor of the Japanese-owned Sharp brand. They might not have had to gut the company to rebuild it, but McChlery and Skinstad have certainly brought fresh thinking and innovation to a business that was at best languishing, and at worst losing major market share to competitors.

Two brightly coloured posters in the warehouse give a hint that something is afoot.

One reads, “Simplicity is the soul of efficiency” and the other, “Re-energise with fire in your belly”. Both exhort employees to “reorganise by solving smart”. Up the stairs and under a vast beamed roof is an open-plan office with a landscape view of Table Mountain. In the centre of the room is a cluster of bright furniture where more informal conversations happen.

It is here that McChlery and Skinstad talk passionately about their game-changing plans for Sharp, and how they are already implementing parts of their overarching strategy to become major players in the sector.

“We took time to get to grips with all aspects of the company,” says McChlery. “We wanted to gain deep knowledge so we could build a structure that would support our strategy. We have a platform to leverage our assets and the skills within our infrastructure to make an impact on the technology landscape.”

Skinstad says that while they had “so many ideas”, they also had to “steady down and become experts first”. That meant taking “10 steps back” to really evaluate Sharp’s

position before re-evaluating how to take the brand to new places. Seartec has had the licence to distribute Sharp since the late 1960s.

McChlery—who cut his teeth working for Toshiba and Canon before taking an equity stake in ITEC Innovate—and former Springbok rugby captain, sports broadcaster and entrepreneur Skinstad met when they worked together at the office automation outfit. They came to the attention of Seardel bosses when they pitched for the same business—and won. Clearly, it made more sense to bring them into the fold to breathe new life into the Sharp brand than having them on the other side of the fence.

Both are imbued with an entrepreneurial mindset and business savvy, as well as a youthful sense of optimism and belief in the future sustainability of Seartec. They like to joke that they’re growing with “adult supervision”, but there’s no doubt they know where they want to go and how to get there.

“It’s one of those collaborative partnerships,” says Skinstad. “We have complementary skills.”

“Bob is a better sales person and has a way with people,” says McChlery. “My job is to deliver what he’s selling.”

The backbone of the company’s ethos is that what they’re selling isn’t just copiers. It’s a “managed business solution”. And they have the products to prove it. The Sharp Touch Screen LCD Display Board is changing the face of boardrooms, classrooms and presentations with its 70-inch full touchscreen capability, wireless networking and full HD videoconferencing capacity.

Seartec is by far the largest distributor of Sharp calculators in the world and, more recently, Seartec received the prestigious Fairlady Consumer Award as Consumer Best Buy for 2014 for its Sharp Microwaves.

Diversifying meant looking beyond just one aspect of the solution into diversification and acquiring companies that would fit that vision. Their first acquisition was Limtech.

FAST COMPANY PROMOTION “Limtech ticked every box,” says McChlery. important for us to take that first step.”

“They have great products, from biometrics to It’s a long road ahead, but already the ‘right’ payroll and time and attendance software. kind of people are getting it and the wrong kind We’re selling into the same market, so it made are not; “there will be changes, but it’s a long sense both in terms of functionality and to and careful road, which we would rather tread reduce costs in our value chain.” with people, than without,” he adds.

Pared-down plan: Skinstad is an avowed online man, proud The initial steps involved their embarking Smart, focused that he was one of the first South Africans to on a roadshow to visit all 12 Sharp branches to sponsorship gives join Twitter, and he has used the short-message humanise those interactions. There was also an great return on platform to grow awareness and influence internal launch, one designed to show the Sharp investment, says Bob Skinstad around projects, ideas and endeavours. So the house was in order and ready for new business. second acquisition, OfficeBox, an online They broke down the boundaries, figuratively supplier of stationery, makes sense to him and literally, by abolishing offices and opening from an e-commerce point of view. up workspaces and communication.

OfficeBox is a young and vibrant online Infrastructure, acquisitions, a changed stationery company supplying the businessbusiness culture—all these are vital, but what of to-business market with office supplies and selling Sharp products? Skinstad and McChlery stationery. Its unique business model offers have a strategy—and no, it’s not to flood the customers savings of up to 30% by subscribing market with costly television advertising. to a monthly delivery package in order to buy Skinstad’s pared-down plan involves digital, goods at cost. Market-leading online tools such sponsorships and personal relationshipas lists, price comparison and authorised user building and enhanced telepresence. He functionality are contributing factors to the recently hosted a rugby dinner to raise funds company’s early success. for injured players. Six hundred people bought “As Mark says, it’s the same market. tickets, and the feedback from clients and the OfficeBox is our embryonic e-commerce general public has echoed the positive platform. We’re getting in on the ground floor, sentiment that has been growing around the before our competitors. There will be a race brand’s movement. soon!” says Skinstad.

“I believe smart, focused sponsorship gives It will take more than their enthusiasm great return on investment,” he says. “We won’t and energy to retain clients and win new take a box and entertain just in one city. Rather, business. The pair believes in building a we will go to 30 games and matches around the sustainable company, one that “values value over cost”. As Skinstad says, flashy cars and smart suits can only make so many sales.

“We’re getting in on the After that, value counts. As do great

ground floor, before our products and excellent service. competitors. There will be Sharp is a premier brand and a market leader in the rest of Africa, says McChlery, a race soon!” so there’s no reason it can’t reclaim pole position in South Africa.

McChlery and Skinstad know this because, country and talk sport and forge relationships,” already, news of their dynamic approach has he says. reached Japan, and they’re rebuilding Sharp Skinstad says the newly redesigned website SA’s relationship with its Japanese owners to is vital, as it generates leads for the sales team to the extent that they were invited to meet top follow up and is a portal to give pre-purchase executives and product designers. They were comfort to retailer and B2B customers. “I love floored by the research and development, and the digital space,” he says. “I know what we’ll that South Africa carries only around 5% of spend and what we’ll get in terms of return what the global giant creates. The scope for on our investment. It’s all measurable.” growth is enormous, and the burgeoning It’s clear McChlery and Skinstad are relationship with Japanese head office a key delivering a winning game and will factor in that growth. “We believe in forging soon take the tournament, too. strong relationships,” says Skinstad.

One of their most important relationships Connect with us is the one they have with employees. Of a staff Tel: 0800 474 277 of 325, they’ve only lost two staff members Website: www.seartec.co.za since they took over the company late last Facebook: SeartecSA year. Says McChlery, “We had to persuade Twitter: @SeartecSA them to walk a new road with us. It was YouTube: Seartec South Africa

Gallo Images/Foto24/Lulama Zenzile

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CRE ATI V E CON V ERSATION

A WORLD MADE MORE OPEN Mark Shuttleworth is inspiring— globally—the same radical, innovative collaboration that launched his career

By Chris Waldburger

On maps of old, the unknown—and therefore regarded as treacherous— territories were marked with the phrase, “hic sunt dracones”, or “Here be dragons”. Depending on the personality of the traveller, the phrase either cautioned against, or enticed, exploration.

It is perhaps a clue to Mark Shuttleworth’s entrepreneurial spirit that he named his own private venture capital fund, Here Be Dragons— a fitting name for the investment wing of South Africa’s first spaceman.

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Shuttleworth has kept exploring since his famous flight to the International Space Station, and has now set his sights on reforming the world of software operatingsystems, with a secondary goal of radically changing some of South Africa’s tax practices.

At the core of all Shuttleworth does is a vision of a world made more open and accessible. In short, a world where dragons are slain and new maps are drawn.

Shuttleworth launched his career while still studying at the University of Cape Town.

At UCT, he studied finance and information technology—at the cusp of the Internet revolution. In fact, he was prominent in bringing Internet connectivity to the university, assisting in the installation of Internet cables in his residence, Smuts Hall.

In 1995, his final year at UCT, Shuttleworth founded the company, Thawte (pronounced as ‘thought’), initially based in his parents’ garage in Durbanville, one of Cape Town’s leafy northern suburbs.

Thawte provided website securitycertification, an important feature if 80 FASTCOMPANY.CO.Z A OCTOBER 2014

Creative Conversation

New territories: With the proceeds of the sale of Thawte, Shuttleworth paid his way to becoming the first African in space

trust was to grow on the rapidly developing World Wide Web. This certification provided assurance as to the identities of both buyer and seller in the world’s first virtual market square. Shuttleworth’s genius was realising that such a certification process could be decentralised to a multitude of security vendors via a radical new approach to encryption and decryption.

To achieve this, he had to mimic a highly advanced encryption code to which he did not have access, owing to its restriction to use

by American servers only. This achievement, carried out in a South African garage, won him global respect and it promised an extension of Internet security from just big banks to smaller Internet traders.

The great genius behind the new security

process was based on the mathematics of three professors at the Massachusetts Institute for Technology in the 1970s— Ron Rivest, Adi Shamir and Leonard Adleman—who invented the so-called RSA algorithm.

This algorithm creates separate, but connected, encryption and decryption keys for merchants and customers online.

Shuttleworth’s certification system allowed merchants and customers to verify that encryption keys belonged to their ostensible owners.

The fact that Shuttleworth was able to achieve this on his own in Africa gave him instant credibility. This credibility in turn allowed a young South African in his 20s to pitch an idea first to Netscape and then Microsoft, which culminated in both organisations adopting his global certification strategy. Incredibly, the initial deal was closed via email.

In 1999, Verisign, a leading manager of Internet infrastructural services, bought Thawte for R3.5 billion. A few months

Gallo Images/AFP

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Gallo Images/Foto24/Lulama Zenzile

Shuttleworth argues that the fact that

applications of the ilk of Instagram use Ubuntu, and that Ubuntu is in general a leader

in back-end cloud computing, demonstrates

the power of the software.

An open source: The basic theme of his career: to create openness, trust and transparency

earlier, Shuttleworth had turned down an offer for less than a fifth of that figure.

With the proceeds of the sale, Shuttleworth paid his way to becoming the first African in space, and launched new ventures continuing the basic theme of his career: to create openness, trust and transparency—chief of which has been his championing of the Ubuntu open-source software project.

Perhaps the great pity of his success has been the fact that Shuttleworth has

come to believe South Africa can no longer be the base of his philanthropic and business enterprises—ironically, because of the apparent lack of transparency in South Africa’s levying of out-flowing capital.

Considering his work has continuously encouraged collaboration (along with science and maths education) ahead of pure profit, this is a great cause for concern.

When Shuttleworth moved his fortune to the Isle of Man in 2008 and 2009, he paid a 10% levy on each portion—adding up to R250 million. He is currently legally challenging the exchange-control system that levies money moving outside of the country.

As of August this year, he has been arguing his case in Bloemfontein before the Supreme Court of Appeals, after his protest against the levy was dismissed last year by the Pretoria High Court.

Shuttleworth’s core disagreement is with the lack of clear, parliamentary-driven legislation to guide the exchange process.

In short, he wants a more public and decentralised currency certification.

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Creative Conversation

One of Shuttleworth’s current goals is

to work for a convergence between

Ubuntu on mobile phones, tablets and personal computers.

Meanwhile, from his base in the Isle of Man, he continues his post-Thawte career (along with his hobbies of beekeeping and kitesurfing), the centre of which has been his development of the Ubuntu project and the work of the Shuttleworth Foundation.

The Ubuntu project is widely regarded as being deeply quixotic. With Ubuntu, Shuttleworth is basically attempting to overturn the Windows and Apple hegemony in operating systems. In its stead, Ubuntu cultivates a community of software developers—the vast majority of whom are volunteers—to update their system constantly, in an open-source manner.

In the same spirit, Shuttleworth has pioneered the Freedom Toaster project throughout South Africa and the world, which burns software free to disc in places that lack the broadband capability to do so efficiently online.

Shuttleworth argues that the fact that applications of the ilk of Instagram use Ubuntu, and that Ubuntu is in general a leader in back-end cloud computing, demonstrates the power of the software. But sympathisers still maintain the sheer corporate reach of a Microsoft will be hard to overturn.

One of Shuttleworth’s current goals is to work for a convergence between Ubuntu on mobile phones, tablets and personal computers. This comes after the disappointment of not being able to secure funding for the manufacture of Ubuntu’s own mobile device, the Ubuntu Edge.

He maintains that he is still comfortable the industry is taking a hard look at Ubuntu as an operating system, and believes Ubuntu will crucially achieve full convergence before Microsoft—meaning software on phones, tablets and computers could all become

82 FASTCOMPANY.CO.Z A OCTOBER 2014

one in an Ubuntu ecosystem. In other words, your phone will be able to show your desktop through a simple connection.

Shuttleworth believes Ubuntu’s future is wrapped up in his stated goal to develop a better software stack in a converged world than both Apple and Microsoft. The big question is whether an open, non-profit community can deliver a better service than a small, closed, profiteering team can. In short, he hopes decentralised innovation will allow a small player, in corporate terms, to ride a revolution in the same way Thawte did in the 1990s.

Meanwhile, the Shuttleworth Foundation continues this same mission in a broader fashion.

The structure of the foundation is to fund its Fellows—by matching their prior salaries, or multiplying their seed capital—so that they may bring innovative ideas to life.

Perhaps the most prominent Fellow has been Marcin Jakubowski, the developer of the Open Source Ecology project, which is busy building a Global Village Construction Set which, in turn, is “an open technological platform that allows for the easy fabrication of the 50 different industrial machines that it takes to build a small civilisation with modern comforts”.

Other notable Fellows include Rufus Pollock, co-founder of the Open Knowledge Foundation; Mark Surman, executive director of the Mozilla Foundation; and Philipp Schmidt, who founded Peer 2 Peer University during his Fellowship.

The foundation therefore extends Shuttleworth’s work in operating systems to a wide variety of spheres, allowing him to inspire globally the same theme of radical, innovative collaboration which launched his career.

Here be dragons? Not for long.

30 SECONDS WITH MARK SHUTTLEWORTH Background He was born in the dusty gold-mining town of Welkom.

He grew up in Cape Town and attended Bishops (Diocesan College).

Interests His fascination with technology started at a tender age when he discovered computer games.

His interest in science covers an eclectic selection of disciplines, in particular particle physics, software engineering, digital media and biotechnology.

Achievements In 1995, his final year at UCT, he founded Thawte Consulting as an Internet consulting business.

By the time it was acquired by Verisign in the US, Thawte had become the fastest growing Internet certificate authority, and was the leading certificate authority outside the US. He was the first African in space.

Likes Spring, Cesária Évora, Slashdot, Chelsea, finally seeing something obvious for the first time, daydreaming, coming home, Sinatra, sundowners, Durbanville, flirting, string theory, Linux, Python, mp3s, reincarnation, snow, MiG-29s, travel, lime marmalade, Mozilla, body shots, leopards, the African bush, Rajasthan, Russian saunas, weightlessness, broadband, skinnydipping, fancy dress, flashes of insight, inexplicable happiness, post-adrenaline euphoria Dislikes Admin, legalese, running, London winters, salary negotiations, anxiety, public speaking

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10015804JB/

Partnering to empower 25 000 women with UN Women Every day, everywhere, women entrepreneurs are changing the world. At Coca-Cola® South Africa, we know that women are the secret ingredient to building thriving communities and achieving sustainable business growth. A woman’s income immensely benefits children’s education and other family needs, therefore empowering women entrepreneurs will benefit communities and future generations.

We also know that partnerships are an important lever for sustainable development. That’s why we have partnered with the UN Women to expand the depth of impact of our global 5by20 programme.

Together, we are addressing barriers facing women entrepreneurs by providing them with business skills training, mentoring and peer networking skills. In the last year, approximately 4 500 women have received training in daily record keeping, marketing and business development.

By providing support and skills training to women entrepreneurs through the help of Hand-in-Hand, our implementing partner, we are able to empower them to reach their full potential, to contribute to the economy and build sustainable communities. 5by20 is The Coca-Cola® Company’s women empowerment flagship programme which aims to enable economic empowerment of over 5 million women globally across its value-chain by the year 2020. Read their stories at www.5by20.com

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ON TO THE NEXT ONE After successfully launching and selling a majority stake in her first business, Rapelang Rabana’s instincts have led to her next project

By Chana Boucher

84 FASTCOMPANY.CO.Z A OCTOBER 2014

MY WAY

Entrepreneurship ‘royalty’ such as Richard Branson and the late Steve Jobs preached about getting into a business you love and to have fun in the process. In reality, this is not always the case—after all, how excited could Fred Smith have been about delivering parcels when he started FedEx? While not every venture can correlate with the entrepreneur’s passion, Rapelang Rabana is fortunate enough to have created two businesses to which she felt an authentic connection— something, she says, that has made all the difference. “As a technology entrepreneur, I’ve always been interested in mobile and the Internet, and how we can use this technology to solve some kinds of socio-economic problems.”

Rabana co-founded Yeigo, a company that provided more

Rapelang Rabana

is the founder and CEO of Rekindle Learning, an education technology company

affordable communication services through some of the world’s earliest mobile VoIP applications. She subsequently sold 51% to TelFree in 2009, but remains a shareholder. This allowed her to take a break and decide what to do next, which was to launch an e-learning business called Rekindle Learning.

“Learning and education has always been another sector I’ve had my eye on. I really felt that there wasn’t enough innovation happening in this space, so I wanted to start Rekindle Learning to solve that.”

According to Rabana, too often people are encouraged to start a business related to something about which they are passionate—which, she says, doesn’t always translate well. “Just because you’re passionate about something doesn’t mean you want to be entrepreneurial about it. It’s really more about tapping into an issue that you’ve noticed all along in your life which frustrates or irritates you.”

She says she started Rekindle after years of contemplating ways to fix problems in the education and learning field. Over the years, she developed certain insights that gave her a competitive advantage. Entrepreneurs, believes Rabana, should do something they are genuinely connected to and not just something that sounds “nice” or seems like a good market. Through introspection, she says entrepreneurs could

Real-world experience:

GUTTER CREDIT TK

“I’ve come to appreciate that the most valuable insight is gained from being on the ground”

find themselves in spaces where they are naturally inclined to want to perform well and will be able to find the commitment within themselves to be good at it, which is what is needed to do business well.

And it doesn’t stop with her. Rabana says she employs the same thinking in her hiring process. “I ask myself if the people I hire will have an authentic connection to this—not just in terms of their skills, but whether this is a natural area of interest for them.”

Her concern in the education technology space was that much of the content came from Europe and the United States, and was not necessarily a good fit for the South African market. Rabana says: “There’s also an assumption that foreign content is better content; when you look at learning processes, you need a lot more contextualisation. I thought, firstly, that we need more autonomy in the kind of learning and content available and that we need to go beyond what’s happening now.

“Essentially, they are mimicking what was done in the physical environment, online, and calling that e-learning. We haven’t gone a step further to try and dissect whether the e-learning methodology ultimately is more efficient than what was done physically and whether it yields better outcomes.

“It’s far more important for me to try and explore how we develop the learning experience, the actual process the user or learner goes through on his or her mobile phone, which will ensure learning happens and that knowledge is transferred.”

Rekindle focuses on reinforcing and consolidating the knowledge that was presented in a class or training session, and supports ongoing learning. Rabana says: “That focus on retention and reinforcement is quite unique in this space. Most people are focused on providing content and access to information online.”

The company is still young, so while it has a few commercial clients, it is still in the pilot phase with a number of corporates. “I want to spend the first two to two-and-a-half years really establishing the business and the value proposition looking at learning in this context. Once we have a good understanding of the large corporate space, I hope we’ll have a clear understanding of how to tackle the school learner space.”

Rabana wants Rekindle to become a tool people use to build their knowledge and skills, improving their lives through their mobile phones. This is something she believes she will achieve by tapping into her own expertise.

She says she learnt to trust herself and her instincts from her first business. “I always deferred important decisions to people I perceived to have more experience or be smarter. Now I’m much more inclined to bet on my instincts and what I think because I’ve come to appreciate that the most valuable insight is gained from being on the ground.”

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THE GRE AT INNOVATION FRONTIER

INNOVATION HAPPENS I N U N L I K E LY P L A C E S W H I L E M A N Y T H I N K O F A F R I CA A S A BAC K WAT E R , A LO ST CA U S E , A DA R K C O N T I N E N T, I P R E F E R TO T H I N K O F I T A S T H E N E W E ST G R E AT I N N OVAT I O N F R O N T I E R

O

N THIS CONTINENT, there are as many opportunities for innovation as there are seemingly insurmountable problems. From a lack of housing and infrastructure to woeful education and healthcare, the potential is staggering.

So why are organisations and individuals not lining up to cash in on these opportunities? Partly because the way we think about innovation—and the way it is taught, perhaps, in many business schools— is misleading.

Innovators are the clever ones, right? They inhabit places such as MIT Media Lab and they get paid lots of money, or they are big companies such as Google which have the luxury of market share to build an innovation culture.

Well, yes, of course we have a lot for which to thank MIT and Google on the innovation front, both in terms of the innovations they have developed and for what they have taught us about the process of innovation. But innovation also happens in unlikely places—often on the front line where the problems are actually playing out—and it does not always have to be high-tech.

Consider the story of a young medical doctor working in maternity wards in Namibia in the 1990s, who is distressed by high rates of mortality of premature babies due to a lack of incubators in the country. Out of desperation, he introduces a revolutionary practice that he knows to have worked in other countries: He encourages mothers to hold their premature babies close, skin-to-skin, as much as possible. The results of this ‘no-tech’ solution are impressive; more babies survive, and this practice— known as kangaroo care—is now widely implemented in many hospitals in low-resource settings.

This young doctor, Dr Francois Bonnici, is now the director of the Bertha Centre for Social Innovation and Entrepreneurship at the University of Cape Town

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THIS KIND OF THINKING CAN HELP PROPEL EMERGING ECONOMIES TO THE FOREFRONT OF INNOVATION CULTURE IN THE WORLD

Walter Baets

Graduate School of Business, which is looking to find, develop and scale up all kinds of innovations (high-tech, low-tech and no-tech) in all sorts of sectors to address real needs, and create sustainable and inclusive businesses in the process.

Being a business school, we are particularly interested in how the power of business and business thinking can be used to address challenges and create viable businesses that include and benefit consumers and producers (rather than just shareholders). More than that, we think this kind of thinking can help propel emerging economies to the forefront of innovation culture in the world.

Innovation and inclusivity are important beacons for socially responsible companies interested in expanding their business and maximising opportunity while adding value and meaning. As Unilever chief operating officer Harish Manwani remarked in a TED Talk last year: “Companies cannot afford to be just innocent bystanders in what’s happening around them.

They have to begin to play their role in serving the communities that actually sustain them.”

And with more than 57% of its business now in emerging markets, Unilever is practising what it preaches and reaping the rewards. Despite global slowdown in both emerging and developed markets, the company said in July that it is on track to outperform its markets this year.

So how do we create more organisations and businesses like Unilever, which think differently and are moving away from the traditional methods of business that focused on profit and the bottom line above all else, toward a focus on adding value?

Partly it is about creating an effective innovation ecosystem to support and resource such businesses. But, equally importantly, we need to foster an entrepreneuring mindset: an attitude of taking action and responsibility, and challenging the status quo to find new ways to do things—not just in entrepreneurs, but in corporate leaders and in business graduates as well.

And while new technology will be a part of this, we do not even need to invent new stuff all the time; there is enough out there, we only need to get people to think differently about how to use what we have purposefully to create new businesses, solve problems and build economies.

The opportunities are there for the taking for those who are willing to think in full colour and open their minds to them.

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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Next

BACK ON TRACK

WHY APPLE N E E D S B E AT S Music is central to the company’s brand identity, but iTunes has become stale. How Beats could bring cool back to Cupertino.

By JJ McCorvey

Illustration by Kyle Bean Photograph by Mitch Payne

Getty Images

A

s the child of an elementary school teacher, I was able to borrow a Macintosh desktop computer from the library every summer. But even at the age of 9, I was keenly aware that there was nothing especially cool about a Mac. It was the mid-90s—the era of Power Rangers and Pokémon—and when friends came over, they walked right past the sleek, white cube (“Wanna play Number Munchers on my Mac?” “Uh, no. Let’s go outside”).

It wasn’t until several years later that I got my hands on a piece of Apple technology that made me—and Apple—seem hip in the eyes of my peers: the iPod. (It was so desirable, in fact, that my first one was stolen.)

Before the iPod and iTunes, Apple was a respected, innovative computer company, but it was still just a computer company—a brand that made things most people thought of as tools for homework or running a small business.

Music is what turned Apple into a popculture phenomenon. Suddenly, iPods were showing up in Mary J. Blige videos, kids were ripping their entire CD collections (remember CD collections?), and a series of ubiquitous Apple commercials were boosting the careers of actual bands such as Feist and CSS. That fundamental shift may help explain why Apple recently shelled out $3.2 billion (about R341.3 billion) for Beats Electronics, the company behind a line of wildly popular head-

iTunes isn’t as exciting as it once was, with a music-consumption experience that increasingly feels old-fashioned.

Stream team: Jimmy Iovine, left, and Dr. Dre, the co-founders of Beats, now work for ­Apple. Their titles? “Jimmy” and “Dre”.

phones and—more crucially—a heavily hyped new streaming service. More than a decade after music transformed Apple, customers are now starting to hum a different melody.

Downloads for the entire industry have slid more than 13% in the first quarter of 2014, while streaming services—which Steve Jobs notoriously ignored, insisting that people didn’t want to ‘rent’ songs—are remaking the music landscape. Thanks to companies such as Spotify, Pandora and YouTube, song and video streams grew to 34 billion this year, an increase of nine billion from a year ago.

Apple’s slipping hold on music is more of a danger to its psyche than its coffers. At last

OCTOBER 2014 FASTCOMPANY.CO.Z A 89

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Apple earbuds are now about as trendy as cassingles, and even the company’s ad

campaigns have occasionally

slipped toward nostalgia.

count, its music downloads were bringing in $4 billion (R42.6 billion) a year, only a fraction of Apple’s total $171 billion (R1.8 trillion) in revenue. But the company has to be worried about losing its grip on such a crucial part of its brand. After all, Apple has long prided itself on outsmarting the major labels when it came to digital music. Now it risks becoming the sort of slow-to-react behemoth it once disrupted. At its core, the acquisition of Beats can be seen as a bid to stay relevant in the music world—a world that is central to Apple’s modern identity.

For this piece of Apple’s strategy, success will likely depend on one man: Beats CEO Jimmy Iovine, who co-founded the company in 2006 with the rapper, Dr. Dre. When music-industry insiders describe Iovine—a one-time recording engineer and producer who worked on albums by John Lennon, Bruce Springsteen and many others—a word that comes up often is ‘ear’. As the long-time head of Interscope Records, Iovine has proven himself a master tastemaker with an eerie ability to spot hits and envelope-pushing artists. “He’s one of those rare individuals who really understands how to move the cultural needle,” says Ammunition Group founder Robert Brunner, who designed the Beats by Dre headphones and was previously the director of industrial design at Apple.

“How we designed and communicated [the headphones] elevated the product to this very high status, so that people wanted to participate in the brand.”

Now Iovine and Dre have joined the Apple team, cranking the record-biz credibility of Apple’s executive suite up to 11.

Iovine’s connections could prove crucial for future deals with musicians and labels.

“Having Apple, the biggest artist-friendly company, be in that [streaming] game is very important,” says Peter Csathy, CEO of Manatt Digital Media, a venture-capital firm that invests in music and media companies.

“With Beats’ relationships with the artist 90 FASTCOMPANY.CO.Z A OCTOBER 2014

community, Apple is essentially buying that goodwill.” It was Iovine, after all, who brokered many of iTunes’ first deals with music labels.

Will all of this translate into an effective makeover of Apple’s music products? There’s work to be done: iTunes isn’t as exciting as it once was, with a musicconsumption experience that increasingly feels old-fashioned.

Unlike such newer companies as Rdio, Apple doesn’t make music especially discoverable, and its pay-per-track model is hard to swallow when Spotify offers unlimited streaming of countless albums.

Compared to data-driven streaming services that constantly offer suggestions, Apple just seems a bit sleepy. “How many years have we been on iTunes?” says Ben Arnold, a consumer electronics analyst at the NPD Group.

“You would think it knows more about my music-listening preferences than I do.”

Beats Music is especially focused on personalisation. You just broke up with your boyfriend? Here’s a playlist that may help you get over that jerk. Simply telling users, “This is a new song: Buy it,” might have worked in iTunes’ formative days, but with millions of tracks now available and no efficient way to sort through them, the iTunes Store isn’t much more inviting than the chaotic Google Play.

It isn’t yet clear how—or if—Apple plans to integrate Beats Music into iTunes. But merging the two could succeed where previous Apple efforts such as Ping (a defunct music-focused social network and recommendation system) and the Pandora-like iTunes Radio underwhelmed.

Imagine an ‘iBeats’ service that offers you Beats’ playlist curators—such as New York’s Hot 97 radio station—but also compares your tastes with data from Apple’s 800 million iTunes Store accounts to generate highly personalised suggestions. “If they’ve got this streaming service combined with your library of music, that certainly becomes an advantage

if you’re going against some of these [newer] services,” Arnold says.

Yet, re-energising Apple’s connection to music isn’t just about the music—it’s about the whole Apple ecosystem. The Beats by Dre headphones, which currently make up 62% of the premium-headphone market, have huge youth appeal, with most being purchased by people ages 13 to 34, according to NPD. For the ageing iTunes—and for Apple overall— tapping into that demographic is key.

Apple earbuds are now about as trendy as cassingles (cassette singles), and even the company’s ad campaigns, once known for their anthemic feel, have occasionally slipped toward nostalgia. (Why choose 1961’s “Chicken Fat” by Robert Preston, for an iPhone 5S ad?)

Some spots have had more edge; the “What Will Your Verse Be?” campaign features music from Brooklyn indie band, The National, and Finnish composer Esa-Pekka Salonen.

Still, with Iovine around, the odds improve that Apple will strike the right notes.

Whatever happens, Apple’s bet on Beats is sure to change the way the company approaches music. “Jimmy’s passion is to constantly reinvent how people experience music,” says Brunner. “For him, I think this is an opportunity to work with the best company in the world to reinvent that again.” In other words, Apple has the tools it needs. Now all it has to do is get back on track.

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BYTES S A LT WAT E R F L O W - C E L L C A R G E T S GO-AHEAD IN EUROPE

In a breakthrough that is bound to catch the attention of the oil industry and even electric carmakers, a company has just gained approval for its ‘saltwater’-powered car in Europe. The e-Sportlimousine, built by the German company QUANT, runs on an electrolyte flow-cell power system made by nanoFLOWCELL which generates a staggering 676kW, goes 0-100km/h in 2.8 seconds, and propels the car to a top speed of 350km/h. What is an electrolyte flow-cell?

According to Green Car Congress, “flow cells, or flow batteries, combine aspects of an electrochemical battery cell with those of a fuel cell. The electrolytic fluids in flow cells—usually metallic salts in aqueous solution (saltwater)—are pumped from tanks through the cell. This forms a kind of battery cell with a cross-flow of electrolyte liquid.” Using this platform, the e-Sportlimousine is able to produce a massive amount of power while emitting zero emissions. While the e-Sportlimousine is bound to be very expensive, there is hope for the electrolyte flow-cell power platform to be used more practically in the future.

S A M S U N G A N N O U N C E S F I R ST B 2 B TA B L E T Samsung Electronics South Africa unveiled the GALAXY Tab Active, Samsung’s first tablet built specifically for business— applying Samsung’s trusted mobile leadership and people-inspired innovation philosophy to the workplace. The next step in Samsung’s legacy of innovation in the tablet category, the GALAXY Tab Active employs the ruggedised, portable design that professionals desire to take on the requirements of today’s challenging business environments. “Samsung understands today’s businesses have demanding requirements to enable growth,” said Paulo Ferreira, head of enterprise mobility at Samsung Electronics SA. “As a trusted global leader in mobile technology, Samsung is ready and able to deliver solutions built specifically for professional use, featuring innovative offerings and technological capabilities that are unmatched anywhere in the market.”

92 FASTCOMPANY.CO.Z A OCTOBER 2014

4 3 C A N D I D AT E S . 4 3 I D E A S . 4 3 O P P O R T U N I T I E S .

Forty-three bright young entrepreneurs are making their innovative ideas happen at the Design Institute. These 43 candidates have been selected to join a process designed to not only develop and perfect their products, but also to make them better entrepreneurs. Candidates come from all around South Africa and all walks of life. Their level of education ranges from matric to PhD, and they are bringing to the centre ideas for apps, household appliances and public services, ranging from pet-feeders and prams to gunshot-locating technology. Terrestrial, an award-winning industrial design studio, assigns mentors and experts to take each person from research and development to a commercial product concept.

Questions asked are: Who will buy the product? Do people need this product? What would they be willing to pay? How will it be made?

The design experts and mentors help guide the candidates through the design process and assist them in navigating the barriers and challenges of production, costing, retail supply and so on. In a world where brands rule, every candidate is not simply guided to design and manufacture a great product, but also build a great brand to carry their designs into the world.

FA S T C O M PA N Y S A TA K E S A L O O K AT T H E I N N O VAT I V E N E W I D E A S A N D P R O D U C T S C U R R E N T LY M A K I N G WAV E S I N S O U T H A F R I C A A N D A B R O A D

S A’ S M O S T P R O L I F I C B L O G G E R - C E L E B R I T Y L A U N C H E S ENTREPRENEUR GUIDE BOOK

Cape Town’s Seth Rotherham, founder and editor-in-chief of 2Oceansvibe.com, has released his first book titled, Work is a sideline. Live the holiday—a guide to making money on the Internet. The irreverent Rotherham has taken his readers into the more serious side of his personality and shared some tips and hints on how he manages to “live the holiday”. Typically South African, the local entrepreneur showcases one case study of spotting an opportunity in cane furniture being sold on the side of the road in Camps Bay, and trading it successfully on the web. Well-timed, the book captures how to seize opportunities within an emerging market that is rapidly grasping technology for profit. The formula—which is given to the reader among Rotherham’s usual colourful language and comic anecdotes—is easy to follow. A quick read of less than 10 000 words, he cracks on, concisely illustrating his points through the liberal use of screenshots. Referring to his first output as an author, Rotherham claims: “This is an important book for both youth and oldies alike. A book that lets you test any product or service on the Internet with an investment that starts out at R250. Follow the instructions to create an e-commerce solution, accept credit cards and generate traffic. I have thrown in a section on ‘life hacking’ tips to live an easier life when the income starts coming in.” In keeping with his unconventional approach to life, work and everything else, Rotherham has chosen to self-publish rather than take the traditional publisher route. The book is available in paperback and e-book versions on Amazon.com and Amazon Kindle. Local readers can buy direct.

VIRTUAL CARD IMMUNE TO FRAUD South Africa’s Net1 Mobile Solutions is preparing to write a different chapter with mobile virtual cards (MVCs). In the next few months, the company is set to launch an MVC payment app, known as VCpay. Net1 Mobile Solutions—a subsidiary of JSE- and Nasdaq-listed Net1 Group—believes its MVC cannot be cloned or compromised. The company defines this as “the beauty” of its new app. Managing director Philip Belamant is confident his company has found an innovative way to secure its MVC from any kind of fraud. Its VCpay app generates MVCs offline, making it a matchless platform. A cardholder generates an MVC offline and no one else can access it until the transaction is complete. The offline capability prevents card skimmers from accessing card details through conventional back-end systems. With an MVC, which is endorsed by MasterCard and Visa in different regions, network coverage or signal is not an issue, as the transaction can be completed offline. As part of the safety of the app, the MVC expires immediately after the transaction. The VCpay app has been in testing for about two years in South Africa. The beta version already has thousands of users in the country. Belamant believes the new app has the potential to attract millions of customers in India and the US over time, and in the hundreds of thousands in SA.

G O O G L E G L A S S E S N O W AVA I L A B L E I N S A

Takealot.com has announced it has a limited number of the Google Glass Explorer Edition wearable computer available for R26 999.

The online retailer has indicated the device is available in Split-style frames and Edge-style shades. Local availability of Google Glass from Takealot.com follows an announcement from the search giant in April 2014 that it would let users outside its Glass Explorer programme buy the device. According to reports at the time, Google was to sell Google Glass to these users for $1 500 (about R16 600)— excluding sales taxes, import duties and shipping. Google Glass features a 5-megapixel camera capable of 720p video recording and 16GB storage (of which 12GB is usable).

OCTOBER 2014 FASTCOMPANY.CO.Z A 93

FACTS HOW WELL DO YOU REALLY KNOW SOUTH AFRICA? DO YOU KNOW THAT THE ONLY STREET IN THE WORLD TO HOUSE TWO NOBEL PEACE-PRIZE WINNERS IS IN SOWETO? DO YOU KNOW THE NUMBER OF CAPITAL CITIES? HERE ARE SOME LESSER KNOWN FACTS

SINCE THE 1940S, SOUTH AFRICAN GOLFERS HAVE WON MORE GOLF MAJORS THAN ANY OTHER NATION, APART FROM THE US (SA GOLF ASSOCIATION) With golfers such as Gary Player, Ernie Els, Retief Goosen and Charl Schwartzel, it’s little wonder why South Africa has been so successful in the world of golfing. Gary Player alone has won nine majors and 24 PGA Tours.

SA is ranked second out of 183 countries for good practice in protecting both borrowers and lenders when obtaining credit for business (World Bank Group ‘Doing Business’ report, 2013) With a range of laws to protect the borrower and the lender, South Africa has consistently performed well against the other 185 countries that took part in the survey.

SA has the second oldest film industry in the world (Setbuild) Only the US created a film industry before South Africa. In 1898, the Empire Palace of Varieties in Commissioner Street, Johannesburg, first screened films of views of Joburg taken from the front of a tram and of the President of the Transvaal Republic, Paul Kruger, leaving his house for the Raadzaal.

The favourable exchange rate, good weather conditions, varied locations and world-class production facilities have made South Africa a preferred destination for international film, television and commercial producers.

SA IS THE FIRST—AND AT PRESENT ONLY—COUNTRY TO HAVE BUILT NUCLEAR WEAPONS AND THEN VOLUNTARILY DISMANTLED ITS ENTIRE NUCLEAR WEAPONS PROGRAMME Today, nearly three decades after the Cold War ended, there are still 23 000 nuclear warheads in the world. They are held by just nine countries: the US, Russia, Britain, France, China, Israel, India, Pakistan and North Korea. Since the end of the Cold War, South Africa has unilaterally dismantled its nuclear weapons and is the only country to have done so.

SA HAS THE THIRD HIGHEST LEVEL OF BIODIVERSITY IN THE WORLD With two oceans, the country’s topography and prevailing winds, South Africa creates an environment has everything from lush forests to savannah and desert. Only Brazil and Argentina beat South Africa.

SA HAS THE MOST OFFICIAL LANGUAGES IN THE WORLD (GUINNESS WORLD RECORDS) South Africa has 11 official languages: English, Afrikaans, isiZulu, isiXhosa, Sesotho, Setswana, Sepedi, Xitsonga, siSwati, isiNdebele and Tshivenda. Although India has 18 languages recognised by its constitution and can be considered as official, each language is recognised as the official language of a certain area e.g. Kashmiri in Kashmir.

94 FASTCOMPANY.CO.Z A OCTOBER 2014

THE UNIVERSITY OF SOUTH AFRICA IS A PIONEER OF TERTIARY DISTANCE EDUCATION AND IS THE LARGEST CORRESPONDENCE UNIVERSITY IN THE WORLD (UNISA) Founded in 1873 as the University of the Cape of Good Hope, Unisa became the first public university in the world to teach exclusively by means of distance education in 1946. Today, the university has approximately 300 000 students.

Table Mountain alone has over 1 500 species of plants— more than the entire United Kingdom (Lark Tours) We all know the Cape Floral Region represents less than 0.5% of the area of Africa, but is home to nearly 20% of the continent’s flora—but the tiny area of Table Mountain has more plants than four countries.

SA HAS 45 MILLION ACTIVE CELLPHONES (POPULATION 49 MILLION)—RANKING IN THE TOP 5 GLOBALLY IN TERMS OF MOBILE PHONE COVERAGE (DELOITTE, 2012) It should come as no surprise that the country that invented touch-tone dialling offers worldclass telecommunications.

Today, more South Africans use cellphones than radio, television and personal computers.

EVENTS U P C O M I N G E V E N T S FA S T C O M PA N Y S A W I L L B E AT T E N D I N G

S AV C A – G I B S A D VA N C E D P R O G R A M M E I N P R I VAT E E Q U I T Y 8 October 2014 GIBS, Johannesburg www.gibs.co.za The SAVCA–GIBS Advanced Programme course is a full-day seminar on successful deal completion: from managing the deal process from due diligence and negotiation, to structuring, approvals and sign-off. The course is presented by senior private-equity industry executives, with material based on real-life examples.

S TA R T U P S O U T H A F R I C A CONFERENCE 10 October 2014 CTICC, Cape Town www.startupsouthafrica.co.za South Africa’s largest entrepreneurship conference and awards gala provides an opportunity to connect with some of the most talented entrepreneurs from around the world and rub shoulders with successful business leaders and leading investors in startups.

T H E N E W I TA L I A N D E S I G N 11 to 16 October The Lookout Waterfront, Cape Town A rich and multifaceted overview on contemporary Italian design with 288 projects by 133 Italian designers, curated

by Silvana Annicchiarico and Andrea Branzi. The exhibited works range from self-produced prototypes to large-series products, from works of art to industrial artefacts.

DESIGN HOUSE WORLD DESIGN C A P I TA L 2 0 1 4 — ‘ T R A N S F O R M I N G CITIES’ EXHIBITION 15 to 19 October 2014 Cape Town Stadium wdcdesignhouseexhibition2014.com This exhibition is the fifth in a series of six signature events that are part of the year-long WDC 2014 programme to celebrate the power of design to transform lives. Cities from around the world have been invited to showcase their achievements in improving the lives of their citizens through transformative design via installations, films, lectures and conventional exhibits. Exhibiting cities include London, Dublin, Qingdao, Accra, Paris, Taipei, Bavaria, Gwanju, Barranquilla and Cape Town.

BUSINESS OF DESIGN 22 & 23 October Sage Technology Park, Johannesburg www.businessofdesign.co.za The Business of Design will offer the World Design Capital an association with a platform that encourages future business growth, and establishes a good business practice legacy for the future of South African design businesses through seminars. These seminars will be run

by Trevyn and Julian McGowan of Source and Southern Guild, and Laurence Brick and Cathy O’Clery who between them have extensive experience both locally and internationally in design, trend analysis, product development, branding, marketing, retail, wholesale and exporting to international markets.

THE FUTURE AFRICAN SUMMIT: SUSTAINABILITY IN THE RESOURCES INDUSTRY POST-2015

supported, shared and inclusive process of discussion. At the end of the summit, delegates will have an informed view of the issues and opportunities, having engaged with leading-edge thinkers and benefited from shared knowledge and discussions.

B R A N D X C U LT U R E C O N F E R E N C E : ENGAGEMENT NOW 5 to 7 November 2014 Alex Theatre, Johannesburg www.engagementnow.co.za Engagement Now is a thought-leader conference that brings together culture creators, creative-industry entrepreneurs, brands and brand practitioners. The threeday conference will offer in-depth insights and the opportunity for anyone involved in branding and culture, to engage and explore brand and culture collaboration opportunities.

5TH ENTREPRENEUR CONFERENCE AND EXPO 18 & 19 November The River Club, Cape Town www.entrepreneurexpo.co.za This will be the biggest entrepreneur event in Cape Town, aiming to bring together corporates, non-profits, business associations, investors, governmental bodies, private trusts, educators and individuals under one roof—to join forces and to deliver a comprehensive programme of enterprise development, and to drive entrepreneurship across all sectors of our economy.

3RD U-START CONFERENCE AFRICA

GIBS, Johannesburg www.blankcanvas.co.za

28 November 2014 Upper Eastside—DoubleTree, Cape Town conference.u-start.biz

The summit will showcase the benefits that resource companies can reap by putting sustainability at the heart of their business strategies. Participants will have the opportunity to be part of an interactive,

A one-day event organised by U-Start, which holds several global conferences and a number of events on venture capital and early-stage investments.

27 October 2014

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ONE MORE THING

Baratunde Thurston

UNPLUGGING’S A BEACH

A

YEAR AGO, I shared in these pages the story of my 25-day digital ‘unplug’. Since then, unplugging has become something of a cottage industry. There are now detox camps, digital diets and unplugging-themed conferences, all of which go far beyond my personal experience. I’ve been honoured to receive emails from folks who feel as if my piece gave them permission to take their own step back. It’s great to know I’m not alone.

One of the biggest things I’ve learnt since my initial unplug is that it’s possible to maintain a better digital balance without resorting to full-time, abstinence-only extremes. So my last break was less radical. I fled to a remote island (no, I won’t tell you which one, because that would make it less remote), and I was more lenient in setting the rules of my detox. I allowed myself a once-daily inbox scan for a group of five contacts whom I had put on a VIP list. I even granted myself the occasional social media post, though only to another small group on Snapchat. The ephemerality of Snapchat posts and the service’s lack of a constantly rushing feed made it the ideal outlet for indulging in just a little social media.

Most significantly, as a veteran, I talked about unplugging far less. Rather than constant, pre-vacation public screaming of, “I’m leaving! I’m going! You’ll never see me again!”, I simply flipped off the switch the day-of and left.

Now that I’ve proved to myself that I can unplug, I’ve become a little less dependent on taking vacations to restore balance. I try to avoid heavy screen time for most of one day every weekend.

I’m still joining those ‘I Am Here’ excursions where friends explore a neighbourhood during a 12-hour day, no texting or tweeting allowed, prioritising face time over FaceTime. And I’m filling my calendar a little less and taking more deep breaths on a regular basis, though achieving a consistent and true state of peace requires more meditation and kale than I’ve 96 FASTCOMPANY.CO.Z A OCTOBER 2014

NOW THAT I’VE PROVED TO MYSELF THAT I CAN UNPLUG, I’VE BECOME LESS DEPENDENT ON TAKING VACATIONS TO RESTORE BALANCE.

budgeted for.

New tensions have also emerged: My slightlymore-enlightened state often conflicts with the escalating demands of my growing company. Fear of missing out on business opportunities and the need to maintain contact with my partners—all of whom live three time zones away— draw me back into the notifications, updates, taps, pokes and ever-present glowing rectangles of our networked world.

Finally, I remain frustrated by how much effort it takes to control all the digital interruptions.

It’s still too difficult to take short-term leaves of absence from our smartphone’s beeps, buzzes and pop-ups.

Notification settings have been broken apart and scattered deliberately across menus and screens as if their unification would imbue users with unimaginable power. It’s kind of like the myth of Osiris, the boss key in Zelda, or the United States Electoral College voting system.

We need software to manage our software, machines to control our machines, and some sort of master switch to control the alerts, communications and public postings of various apps. For an hour or a month, it would handle auto-responses, temporary account deactivations, and the silencing of our services and devices.

I have neither the time nor expertise to create such a service, but that’s where you come in: Go, innovative reader, go! Let’s disrupt disruption.

Baratunde Thurston is the author of The New York Times best-seller How to Be Black and CEO and co-founder of Cultivated Wit, a creative agency that combines the powers of humour, design and technology.

Illustration by Stanley Chow

Celine Grouard

A D I G I TA L D E TOX CA N B E A S R E I N V I G O R AT I N G A S A N I S L A N D G E TAWAY— B U T R O U T I N E , S H O RT T E C H B R E A K S CA N B E E V E N M O R E R E F R E S H I N G

60% OF THE JOBS AVAILABLE 10 YEARS FROM NOW HAVENâ&#x20AC;&#x2122;T BEEN * INVENTED YET.

2024

At the UCT Graduate School of Business, we prepare you for a career yet to be named, which will require technologies yet to be invented, to solve challenges yet to be faced. *Thomas Frey, The DaVinci Institute

To find out more about our world class academic programmes, executive education short courses and customised programme offerings contact: 0860 UCT GSB (828 472) | INTL +27 (0)21 406 1922 | info@gsb.uct.ac.za or visit www.gsb.uct.ac.za