What Uber & Saudi Arabia’s Relationship Means

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Last week, Uber received an investment of $3.5 billion from Saudi Arabia. While it is bigger than Uber’s previous fundraising rounds, Uber has raised a sequence of $1 billion investments over the last few years. However, in the political view, Uber’s decision to take money from Saudi Arabia is a big deal. Aside from a 5 percent stake in the company, Saudi Arabia also gets a seat on Uber’s board.

For people worried about issues like gender equality, customer privacy, and human rights, it’s hard to imagine a worse choice for Uber’s newest board member. The Saudi regime is notorious for its unequal treatment of women, whom aren’t even allowed to drive in the Saudi kingdom, as well as its disrespect for human rights in general.

According to Human Rights Watch, “Authorities subjected hundreds of people to unfair trials and arbitrary detention.” The Saudi government persecutes human rights activists, subjecting them to decade-long prison sentences for advocating political reforms and talking to foreign reporters. There’s every reason to expect the Saudi government to continue its repressive policies in the coming years. And now when the Saudi government violates human rights, Uber will get bad press for it.

The biggest issue for Uber will be Saudi Arabia’s treatment of women. Saudi Arabia is infamous for refusing to allow women to drive and for limiting their ability to go out in public without a male chaperone. Uber is likely to face awkward questions about whether its partnership with the Saudi government amounts to an endorsement of these policies.

Uber CEO, Travis Kalanick is making it clear that he intends to run Uber as an amoral profit-maximizing machine. This could be a huge problem in terms of long-term success. Monopolies inevitably face public scrutiny and pressure for regulation and it will be much more difficult for Uber to resist that pressure if regulators and customers do not have trust and respect for them.

Over the past few years, Uber has faced accusations that it has spied on its customers and suggested digging up dirt on journalists. It has also generated a lot of backlash with massive surge pricing increases on busy nights.

When a new startup shows that they are willing to do anything to win, it is appealing. However, Uber has exploded past the underdog that it used to be. The difference now is that the “take no prisoners” approach to business seems hostile.

The Final Answer of What Made Slack Successful

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Slack is one of the fastest growing startups ever. It blew up within its short 2 years of existence, which is amazing considering that it is a SaaS startup. So, it hasn’t been a surprise that people have been analyzing what made it so successful.

First, there was the Slack’s $2.8 Billion Dollar Secret Sauce article by Andrew Wilkinson of Metalab – the design agency that helped Slack founder, Steward Butterfield turn his code into Slack’s fun product. Obviously, this one concludes that the design is what makes the startup successful.

Then, there was the Slack’s Design is Not Secret Sauce article by a competing designer, Matt Bond. He concludes that it is a mix of design, product, timing, team and marketing – basically, they got lucky.

Even better, the Slack founder posted about his own experience, concluding that their team focused on education, feedback, customer happiness and metric analysis in order to drive success. However, I have my own views and they really come down to three reasons:

  1. Social Pressure

If you don’t follow Slack all the time, then other people will reference or know stuff on Slack that you don’t know about. Within companies, where it is very important to inform yourself about what’s going on – you need to stay on top of things for your position and future ambitions. There is an intense social pressure to follow Slack and post to Slack 24/7.

  1. Addiction

You have to follow Slack at all times, resulting in unconscious stress because you might miss something. Slack is basically as important as an email.

  1. Single Source of Information

Because of my first two reasons, more information is going into Slack and your team is heavily invested in it. Now, there is no way to escape it – Slack is a part of your company and its culture.

This is why their business model is brilliant. It is based on historical messages – the limit is 10,000 messages and then you have to start paying.

The means that if you don’t check Slack enough, which would put you in social isolation, there is no way to see a conversation ever again and save you from that isolation. Remember, the more people in your company, the faster you reach that 10k message limit.

For example, if each person in your company is posting like 100 messages a day, and your team is made up of 100 people in total, you already need to start paying to avoid social isolation. Before you know it, half the people are missing conversations, find themselves socially isolated, and you start paying licenses because your internal communication and company culture just fails.

Brilliant. Well done, Slack.

The Tech Correction is Coming

The NASDAQ index is up to 5,000 points right now, the culmination of a fantastic seven-year run – during which it has tripled in value. The only other time that it reached this level was before the dot.com crash in 2000.

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What has fueled it? Venture Capital funding. In the past four years, global VC funding has gone from just under $50 billion to $100 billion. It is not just the amount that is increasing, but the sizes of the deals are getting larger as well.

The number of unicorns, private firms with valuations greater than $1 billion has exploded during this time frame as well. There were only 4 unicorns in 2009 and by this year, there were 124 with a total valuation of $468 billion.

The only problem is that most of the unicorns are losing money. A taxi-hailing app, Didi Kuaidi that dominates the Chinese market raised $3 billion in VC funding this year. Cheng Wei, the company’s CEO proudly stated that the company has no profit plan within three to five years. He calls his own company, “the internet start-up that has burnt the most money.”

CNN Money has stated that the e-commerce site Fab.com, an ex-unicorn has mass layoffs before it was acquired earlier this year. The same happened with Evernote, who even closed three of its global offices. Even Mark Cuban has said, “There is no liquidity for these investments.”

By the end of 2016, a correction will occur. Tech stocks will tank and the broader market will suffer. Venture capital funding will disappear and hundreds of thousands of people will lose their jobs. No, it will not be good – but there will be some good outcomes.

First, it will level the playing field. No more VC funding and high valuations for unsustainable businesses who are rewarded for unproven strategies and questionable decision-making. In the mean time, rational markets are being distorted and traditional companies make poor business decisions to compete. We need to reduce this inequity.

Valuations will fall back into line. It doesn’t matter what the valuation is if there is no way to turn a profit. I’m pointing to companies like Snapchat that are valued at $12 billion with 100 million users and barely make any revenue.

The number of tech startups will trickle. Legacy companies with fundamentals and sensible strategies will have an opportunity to attract younger generations of tech savvy managers and executives.

Smart companies are building a foundation of digital business agility so that they can quickly adapt to this upcoming market turbulence. Prepare by digitizing processes, building digital platforms, up skilling workforces and incorporating digital transformation into your strategy.

 

What the Heck is a Futurist?

Futurist is a term that has been thrown around a lot lately. However, do you actually know what a futurist is? No, they aren’t fortunetellers and they aren’t alchemists either. Futurists are actually a lot like journalists. Rather than reporting on what has already happens, they report on what is only beginning to happen. Then, they analyze that information among various environments. Basically, futurists find what is just on the edge of society – they can identify the trends and technologies that are just on the periphery, but will become the center very soon.

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What about the history of futurism? It all started in the 1940s actually. Ossip Flechtheim, a German professor started to speak and write about the need for “futurology” courses at universities. However, then the two world wars happened and this idea was put off. In the 1960s, a second wave of futurist stepped up to the plate and developed statistical models. They used computers to determine how society would look like in the future. Different from today, futurists at this time were primarily concerned with the far-future ramifications of things such as space travel, the Pill, artificial intelligence, overpopulation and other things of this sort. While people like Arthur Clarke, Theo Gordon and Eric Jantsch imagined what would be possible with science; Daniel Bell, Bertrand de Jouvenel and Yujiro Hayashi wondered what these things would mean for government policy, democracy, journalism, economic welfare and academic independence.

So, as you may have guessed – we are now in the third wave of futurists. The work done in the 1960s has provided a substantial backdrop for what is done today. Taking that and developing it, futurists connect the dots that seem to be unrelated at first. They accurately identify trends and understanding of how they will shape tomorrow. It kind of sounds more like a science experiment – gathering research, then looking for explicit and implicit patterns. Next, futurists will apply those patterns to the consumer to determine whether the consumer and the marketplace is ready for the change. The last step is pressure-testing the trends to see what could possibly occur. That’s right, we’re talking probabilities, not prophecies. In the very end, futurists develop strategies and explain what to do about it. There are specialties as well. Some futurists stick to computing and biotech or future of the cosmos or future of aging.

It definitely sounds a lot more complicated than both you and I probably previously thought, but it does sound like an intriguing career, doesn’t it?