Fast Company SA - June 2015 by Fast Company SA

WHAT AMAZON IS REALLY SELLING INSIDE LEGO’S FUTURE LAB NASA CHIEF SCIENTIST’S MARS MISSION

BIGGEST BUSINESS COMEBACKS Lessons from MARVEL,

STARBUCKS, NINTENDO, TRANSNET, JOE PUBLIC and others on overcoming troubled times to emerge stronger than ever

SnowCon Strategy

Snowboarding by day, brainstorming by night

Threaded Man brand

Styling the everyday African male

THE REAL LEGACY OF

R35.00

JUNE 2015 FASTCOMPANY.CO.ZA

15008

9 772313 330006

STEVE JOBS

REAL PEOPLE. REAL SOLUTIONS.

Leon Kotze General Manager, Karbochem It makes us proud to have clients like Karbochem. They are international producers of synthetic rubbers and materials for tyres, industrial and sporting goods. Knowing that our standards meet the standards of this world-class manufacturer, is a great feather in our cap.

brandinc/340/e

â&#x20AC;&#x153;13 years with Nashua and their service just keeps getting better.â&#x20AC;?

011 232 8000

solutions@nashua.co.za

CONTENTS FE ATURES 32 When It Clicks, It Clicks

After a decade-long slump, Lego has rebuilt itself into one of the biggest toy companies on earth. We take an exclusive look inside its top-secret Future Lab BY JONATHAN RINGEN

42 The Biggest Business Comebacks of the Past 20 Years

COVER STORY 20 The Real Legacy of Steve Jobs

Jerk or Genius? Tyrant or Wunderkind? Even now, almost four years after his death, it’s hard to read a story about Steve Jobs that doesn’t rely on these kinds of generic labels to explain his character. But if Apple’s rise depended on the standard Jobs clichés, what are we to make of its dominance now? Time to revisit the myth BY RICK TETZELI

2 FASTCOMPANY.CO.Z A JUNE 2015

How companies like Netflix, Disney Animation, Lacoste, Transnet and Super Group staged impressive recoveries to overcome hard times

62 Under Fire

World domination made sense when Amazon was a mere retailer. The task is tougher as the company enters a slew of new markets BY AUSTIN CARR

June 2015

Our three unconventional assessments of Steve Jobs’s legacy, and the ways in which they continue to drive Apple, change how we have to think about the company’s future. (page 20)

NEXT 14 There’s No Business Like Snow Business

Why entrepreneurs and top management are taking to the mountains and trading whiteboards for snowboards BY GABRIELLA REGO

54 Clearing The Air

Klaus Lackner knows how to pull carbon from the atmosphere. If he can do it on the cheap, he may have the solution to global warming BY JON GERTNER

58 The Man of Many Questions Brian Grazer, one of the most successful movie producers ever, explains why the right query is the key to success WITH CHARLES FISHMAN

JUNE 2015 FASTCOMPANY.CO.Z A 3

Contents

REGULARS 08 From the Editor 10 The Recommender 26 Wi-Fi On Wheels California startup, Veniam, is turning city vehicles into moving hotspots BY CORINNE IOZZIO

28 French Toast Say it in style with personalised champagne gifts

30 The New Victorian Age Transforming the world through technology? We’ve just got started BY OM MALIK

52 Fashion Forward 21-year-old Siya Beyile has transformed The Threaded Man from a blog into a brand and business BY EVANS MANYONGA

72 Full-court Press For US National Basketball Players

Association executive director, Michele Roberts, the best defence is a good offence BY LAUREN SCHWARTZBERG

73 The Great

Innovation Frontier

The spirit of ubuntu could give Africa an advantage when it comes to collaboration for innovation BY WALTER BAETS

74 Sky’s The Limit NASA’s chief scientist Ellen Stofan is eyeing some very big products BY JON GERTNER

76 Fast Bytes 80 One More Thing We have slow food, slow money

Ask any of the #SnowClub15 crew and they’ll tell you they returned home from their snowboarding business trip feeling more inspired, educated and aware of what they needed to do in their respective companies. (page 14)

4 FASTCOMPANY.CO.Z A JUNE 2015

GUTTER CREDIT TK

and even slow programming. Where is the outcry for a slow smartphone movement? BY BARATUNDE THURSTON

PUBLISHER AND EDITOR-IN-CHIEF Robbie Stammers

robbie@fastcompany.co.za

ART DIRECTOR

Stacey Storbeck-Nel

stacey@insightspublishing.co.za

CHIEF SUB-EDITOR Tania Griffin

EDITOR Evans Manyonga

evans@fastcompany.co.za

Rami Niemi, Gareth Pon, Heads of State, Jonathan Snyder, Miguel Proença, Raymond Biesinger, Daniel Salo, Alessio La Ruffa, Nicholas Calcott, Melissa Golden, Kirsten Ulve, Celine Grouard

DIGITAL PLATFORMS

CONSULTING EDITORS

Louise Marsland & Anneleigh Jacobsen

By Digital Publishing Charles Burman, Catherine Crook

ADVERTISING SALES DIRECTOR

BACK OFFICE SUPPORT

keith@insightspublishing.co.za

Managing Director: Rita Sookdeo Account Manager: Zena Samson

Keith Hill

ADVERTISING MANAGERS Kyle Villet, Zaid Haffejee

OFFICE MANAGER

BOSS (Pty) Ltd

PRINTER

Creda Communications

Taryn Kershaw

DISTRIBUTION

taryn@insightspublishing.co.za

On The Dot

SOCIAL MEDIA MANAGER

SUBSCRIPTIONS

Shan Routledge

taryn@insightspublishing.co.za

shan@insightspublishing.co.za

PUBLISHED BY

ARTISTS

Cover: Gallo Images/Getty Images/Robert Caplin Gallo Images/Getty Images/Douglas Gorenstein/Vivien Killilea/ullstein bild, Kyle Bean, Aaron Tilley, Nikolaj Møller, Pari Dukovic, Jason Pietra, David Ryder,

Joe Mansueto Mansueto Ventures

EDITOR

Robert Safian

PUBLISHER

Christine Osekoski

EXECUTIVE EDITORS Noah Robischon Rick Tetzeli

DIRECTOR, NEW BUSINESS VENTURES Bill Shapiro

ASSOCIATE PUBLISHER OF GLOBAL MARKETING GLOBAL EDITIONS DIRECTOR Bernard Ohanian

MANAGING EDITOR Lori Hoffman

EDITORIAL CONTRIBUTORS

Chris Waldburger, Jeff Beer, Joe Berkowitz, John Brownlee, Jeff Chu, Jason Feifer, Jillian Goodman, JJ McCorvey, Evie Nagy, Nikita Richardson, Danielle Sacks, Mark Wilson, Jonathan Ringen, Austin Carr, Harry McCracken, Gabriella Rego, Rick Tetzeli, Brian Grazer, Charles Fishman, Corinne Iozzio, Om Malik, Lauren Schwartzenberg, Jon Gertner, Walter Baets, Baratunde Thurston

CHAIRMAN

Erica Boeke

SOUTH AFRICAN EDITORIAL BOARD Louise Marsland, Anneleigh Jacobsen, Prof. Walter Baets, Pepe Marais, Alistair King, Koo Govender, Abey Mokgwatsane, Kheepe Moremi, Herman Manson, Ellis Mnyandu, Thabang Skwambane

FAST COMPANY INTERNATIONAL TEAM

CREATIVE DIRECTOR Florian Bachleda

PHOTOGRAPHY DIRECTOR Sarah Filippi

PRODUCTION DIRECTOR 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

Carly Migliori

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. 6 FASTCOMPANY.CO.Z A JUNE 2015

FROM THE EDITOR

The Greatest Comebacks in Business One thing I’ve always found fascinating about entrepreneurs is their ability to handle the highs and lows of business. At some point they are on top of the world, and at other times it all comes crashing down. When that happens, the true entrepreneurial spirit comes to the fore. Perhaps the greatest modern-day example of a business comeback is Apple, spearheaded by its founder and former CEO, Steve Jobs. In 1985, the Apple board voted to fire Jobs from the company. Notoriously difficult to work with at the time, and renowned for being particularly headstrong, the board felt they could no longer have him managing the company. It was the end of the line as far as they were concerned. One can only wonder how Jobs felt at that point, all his years of effort and innovation having gone into Apple. Probably even more hurtful was the fact that the man he had personally recruited, former Pepsi-Cola president John Sculley, had instigated his ousting. Jobs left unceremoniously and concentrated on other ventures such as NeXT Inc. and The Graphics Group (later renamed Pixar). In 1997, with the company operating at a loss and Microsoft’s Windows 95 flying off the shelves, Apple’s board decided to reappoint the company’s founder. They needed his zeal, vigour and insatiable appetite for great designs. Jobs replaced Gil Amelio and declared himself “interim CEO” of Apple—because he was too involved with family matters and too busy at Pixar to take over permanently. At the annual Macworld Expo in August of the same year,

8 FASTCOMPANY.CO.Z A JUNE 2015

Jobs declared to the Apple faithful there was still hope for the computer company, but that it would first have to put aside its all-too-consuming fixation with Microsoft. The war was no longer viable as far as he was concerned. Microsoft would go on to invest over $150 million in Apple and promised to develop Microsoft Office software for the Macintosh for the next five years. Jobs and Bill Gates set aside their long-running competition and decided to join forces. If this was not a true example of the power of collaboration, then it certainly highlighted Jobs’s prowess as an entrepreneur. Jobs returned to Apple, worked closely with his greatest rival, and boosted the company beyond its former heights to unprecedented levels of success. That is what separates the winner from the rest— that ability to bounce back from adversity. This issue highlights the greatest comebacks in business and also the legacy of Steve Jobs. From individuals to the biggest brands, these US and South African examples of successful turnarounds hold many lessons. They are intriguing and insightful—but above all, they are real and highlight the possibilities for your own company.

Evans Manyonga evans@fastcompany.co.za @Nyasha1e PS: Don’t forget to LIKE our Facebook page (fastcompanysa) and follow us on Twitter (@FastCompanySA). Also, you can download the digital version of the magazine on Google Play and the Apple App Store.

Bigger ImpActS. Sharper ImpreSSIonS.

• Visual display solutions • Document solutions

0800 474 277

enquiries@seartec.co.za www.seartec.co.za SeartecSA

@SeartecSA

Seartec South Africa

THE RECOMMENDER What are you loving this month?

Favourite destination Siv Ngesi

Actor, comedian & presenter

New York: My favourite

Favourite local artist George Safi

Founder & MD, Actual Black 3D Rendering

Malcolm Wopes (aka Rocket Boi): Malcolm Wopes’s art shows good traditional influences in the line work, and in content tackles many modern-day subjects. He has begun work on what will hopefully be one of SA’s leading comic series: a fresh take on a love story, and a character reaching his full potential through willpower.

destination in the world has to be The City That Never Sleeps, the Biggest juiciest Apple in the world, the only city where the hooting of taxis is music to my ears. Frank Sinatra knew what he was talking about. The moment I arrived in NYC, I felt like I belonged. It was electrifying, it was inviting, and it made me feel like a moth to a light bulb! I walked around the city for hours on end: sightseeing, watching musicals (I live for musicals), meeting and chatting to perfect strangers. I’m performing in NYC in June and can’t wait to whistle for that yellow cab and be one step closer to making it in the concrete jungle—no, make that MY concrete jungle...

Favourite album Dean Oelschig

Founder, Halo Advertising

Lost In The Dream by The War On Drugs:

This Adam Granduciel– penned album is the best I’ve heard in five years. It’s as if great ‘80s musicians such as Bob Dylan, Tom Petty, Don Henley and Dire Straits created a modern version of that era’s music. Each song will remind you of a different ‘80s band, yet they feel so current.

10 FASTCOMPANY.CO.Z A JUNE 2015

Favourite destination Lorinda Voges

CEO, 4Elementsmedia

Dubai: Someone recently asked me how I fell in love with Dubai. Well,

apart from the fact it has the tallest building in the world, the highest location for a restaurant, the biggest shopping mall and will, according to Sheikh Mohammed’s vision, become the most visited city in the world by the year 2030, Dubai is not like any other city I’ve ever visited. It may not have beautiful landscapes like Cape Town, for instance, but the secret and beauty to any culture is to be so all-encompassing and so unbelievably generous that visitors don’t want to leave. The beauty of the Arab culture and the people of Dubai is characterised by the extent to which these people go in terms of their generosity and hospitality.

Favourite beauty product LeAnne Dlamini

Multiple SAMA-award winning R&B singer

Clarins Bright Plus Brightening Hydrating Day Lotion: Through Favourite restaurant Katie Coetzee

Director, The et.al Agency

[spasie]: Pop into the

Bo-Kaap and experience NYC-style Sunday brunches at [spasie]. Mix your own mimosas and Bloody Marys at the ‘DIY bar’, or opt for coffee or fresh fruit juice. My favourite dishes are the brioche French toast with sour cream and thyme, togarashi quail egg with sweet potato and sesame bacon, and baked rhubarb with rosewater labneh. Don’t miss this monthly event, so book your spot on booking.spasie.co.

Favourite technology

my years of travelling, I’ve learnt a few tips, especially about beauty. Anyone who knows me knows I’m a huge fan of beauty products that work, so I love sharing my favourite products with my fans. I know the importance of staying hydrated during a flight, so this day lotion is a must-have; I apply it a few times during long international flights. I also ensure I always carry a bottle of Mitchum Roll-On around with me. There’s nothing worse than bad body odour.

Naz Saunders

Events & customer relationship manager, CiTi

Scribbler S2: I got to

test-drive EDRO’s flagship robot, the Scribbler S2, for kids aged 10 to 14. It draws, plays music, lights up, and has sensors to navigate. Using graphical user-interface tile-based programming tools, the Scribbler introduces kids to programming while teaching important science, technology, engineering and maths concepts that bring coding to life. Pop in to The Bandwidth Barn in Woodstock to test-drive a robot yourself.

Favourite store Nuno Lopes

Founder & MD, Atomic Marketing

Smallville Comics: What could be better than letting the

stress of your day disappear by jumping into another world? This world for me is Smallville Comics in New Redruth in the south of Joburg—a store filled to the brim with comics, books and collectables to suit the tastes of every geek, from the noob to the hard-core. It’s a place where I can further feed my creativity and keep my mind engaged. The best is not the merchandise, however; it’s the kaleidoscope of interesting or eccentric people who are also there to hang out, chat over a coffee, play foosball or chill in the mini-theatre where they often air series premiers and movies. Come on in… There’s a superhero inside everyone!

JUNE 2015 FASTCOMPANY.CO.Z A 11

The Recommender

App Alley

Tony Reid

COO: Emerging EMEA Markets, Hitachi Data Systems

HCP Anywhere: This highly secure file syncand-share app I use on my PC, Mac and iPhone. I no longer have to worry about backups; my data is with me everywhere, and I can email secure links instead of big files. It has transformed my productivity—like business apps should.

Sean Hough

CEO, Pentravel

Localeur: I’m loving this “curated community of local

insiders who want to help you”. It’s like having a friend in every city who’s really plugged into the best restaurants and bars. You can select from a range of places nearby or a list of recommendations. It also provides a brief description of the vibe, along with a map.

Gabriel Fortuna

Co-founder, Zero One

The Pomodoro Technique: Every

day we’re bombarded with distractions, from internal ones— quickly switching to Twitter—to external ones, where your mail chimes, or a colleague pings you about something. These distractions kill focus and momentum. The Pomodoro Technique is a black-beltlevel workflow for productivity: It uses a timer that counts down from 25 minutes, during which time you work on a single task, using the ticking sound as a Pavlovian anchor for focus. After that, a quick five-minute break, and then you dive in and do it all over again. Your to-do list won’t know what hit it! 12 FASTCOMPANY.CO.Z A JUNE 2015

Kate Lewin

Wealth manager, deVere Investments South Africa

Bloomberg Business: This

app has everything I want at my fingertips: live updates on most current tax, investment and business news. I use it daily for market updates. I’ve even listed the indices that will have an effect on the majority of my clients’ portfolios.

Scott Cundill

Co-founder & CEO, Majestic3.com

Citymapper: With this remarkable travel app, I type in my London destination and it shows me the fastest route using public transport. Every bus and every train is precisely tracked. The app tells me which direction I should walk, what service to take, and precisely when the next bus or train will arrive.

N E X T

14 FASTCOMPANY.CO.Z A JUNE 2015

There’s no business like snow business S T R AT EG I C B R A I N S TO R M I N G I N M EE T I N G R O O M S I S D E A D. W H Y EN T R EPR EN EU R S A N D TO P M A N AG EM EN T A R E TA K I N G TO T H E M O U N TA I N S A N D T R A D I N G W H I T EB OA R D S FO R S N OW B OA R D S

By Gabriella Rego

Photographs by Gareth Pon

Voluntarily spending time in below-freezing temperatures may not sound conducive to brainstorming, but you’d be surprised at how inspiration can strike atop a chairlift heading from one ski slope to the next, or while sipping on a chocolat chaud during a spontaneous après-ski session. There is evidence that such informal encounters with like-minded people can be the key to unlocking some of the most valuable conversations any entrepreneur and top-management executives are likely to have—shifting

JUNE 2015 FASTCOMPANY.CO.Z A 15

A breath of fresh air Craig Rodney, who was part of #SnowClub15, believes “there’s so much to learn outside of the office”.

THERE’S ENOUGH ACTIVITY FOR IT NOT TO BE ALL WORK, AND ENOUGH TIME OUT IN BETWEEN AND AFTER HITTING THE SLOPES TO NETWORK, CREATE BUSINESS CONNECTIONS AND ENGAGE IN MEANINGFUL CONVERSATIONS WITH THOSE AROUND YOU. business models to progress with the ever changing times, and aligning with their personal passions. Adrenaline and ambition is a powerful combination. Early pioneers of this ‘snowboarding and strategy’ model are a South African duo, Richard Mulholland and Don Packett, from Missing Link. For years, Missing Link had spent a small fortune attending top worldwide conferences such as TED and PopTech; however, while the conferences themselves were amazing, they found that implementation of new ideas as a result (for the company) was quite low. It’s no secret that inspiration can be triggered when involved with something you’re passionate about, and for the duo, that passion was snowboarding. This is where the idea of SnowCon (Snow Conference) was born; combining snowboarding during the day, with business-strategy sessions in the evenings. Packett notes that although the idea of the first SnowCon sounded great, they didn’t know whether or not it would be a success. “With that, we made sure every afternoon [after hitting the slopes], we identified a [business] problem that needed fixing, and a methodology to work from. People don’t believe us when we say we’re going snowboarding for our

16 FASTCOMPANY.CO.Z A JUNE 2015

annual strategy session, but it’s probably the only week in a year that we have a structured agenda for solving specific issues in the business, which has us walking back into the office with solid plans and goals.” SnowCon has successfully run for five years in a row and, as Mulholland puts it, “it is the single most effective and significant strategic session that we do every year.” Why snowboarding? “I’ve really found that when you push yourself in an adrenaline-inducing activity like this, you really get to carry the highs of the day into the brainstorm of the evening; there’s always such an amazing energy in the room when we get to strategising,” Mulholland adds. There’s also enough activity for it not to be all work, and enough time out in between and after hitting the slopes to network, create business connections and engage in meaningful conversations with those around you.

#SNOWCLUB15 Most recently, 12 successful businessmen descended upon a snow-filled Val Thorens in the French Alps for a week of snowboarding and strategy as part of #SnowClub15. Half

In the (snow)boardroom Everyone is out of work mode, a bit more relaxed and open, “and the opportunities for quality discussions are innumerable”.

influencer campaign, half leisurely business-inspired holiday, urban espresso PR and Club Med South Africa had the foresight to partner up with these businesspeople to provide them with an atmosphere in the Alps that would be conducive for snowboarding, strategy and networking. Think Davos, but with more adrenaline. Craig Rodney (MD at Cerebra Communication), Brent “Spillly” Spilkin (founder of Growing Pains Business Consulting), Justin Spratt (CEO of Quirk), Barry Tuck (“The Guy Who Does Stuff” at Paton Tupper Digital) and Gareth Pon (well-known South African Instagrammer) were among those on the #SnowClub15 trip. Each will affirm that a trip such as this with like-minded and successful business types is valuable beyond measure. “Business owners will always tell you that it’s critical for you to surround yourself with really smart people. The problem is that really smart people are also really busy people. The value of going on holiday with a group of really intelligent people is that you’re all out of work mode, all a bit more relaxed and open, and the opportunities for quality discussions are innumerable,” says Rodney. Most of the #SnowClub15 group head out snowboarding together each year where, for them, it is not exclusive work events—it’s “a holiday with really smart people” as Rodney puts it. Spilkin echoes his sentiments, in that trips like these allow the opportunity to bounce ideas, challenges and strategies off each other in an objective, stress-free environment. “It is essential in one’s business to look for advice and sounding boards outside of your business for a truly objective point of view,” Spilkin adds. And he’s right; it’s tricky to read the label from inside the bottle, and often the key is distance away from the problem. Spratt is also one who firmly advocates this methodology of remote locale, exercise and smart-people informing strategy. “The mental space you’re provided with by being away gives you the ability to think more abstractly. These ideas and conversations, over five years now, have translated into material value for the businesses I have been involved in. I see these trips as business therapy. There is something special about being with great, like-minded business friends in an interesting locale. We like to think of it as a ‘Davos Lite’,

but without any pretention,” Spratt notes. Tuck is a firm believer in travelling that allows one to realign one’s goals and benchmark against greater ones. “Many business owners and CEOs run the risk of becoming immersed in the little bubble that is their corporate or business life. This often leads to complacency and an attitude of ‘Plan A worked yesterday, so Plan A will work tomorrow.’ Travelling exposes us to new ideas, cultures, products, philosophies and innovations. Being able to sit in a hotel room at a Club Med resort in the Alps and conduct a Skype meeting with clients in London and colleagues in South Africa was incredible and opened my mind to the opportunities within South Africa and Africa for digital development.” For Pon, whose business is a little less than ‘conventional’, travelling is a big part of what he does, and provides him with opportunities to generate new content and innovative ideas that he can share across his networks.

D E S T I N AT I O N S A N D D E V E L O P M E N T For any business owner, it’s difficult to ever actually ‘switch off’ when he or she needs to ensure business operations are functioning fine while working remotely. Destinations and resorts around the world are gearing up to provide an environment that is beneficial to businesspeople. The Club Med Val Thorens Sensations resort, which hosted the #SnowClub15 crew, played a big part in providing the right atmosphere for both business and leisure. The design of the resort allowed for serendipitous meetings—which, for a large group like #SnowClub15, was important—while having areas for more in-depth and private discussions. “The development of Wi-Fi and mobile

JUNE 2015 FASTCOMPANY.CO.Z A 17

All for one and one for all Each member of #SnowClub15 or SnowCon will affirm that such trips with like-minded and successful business types are valuable beyond measure.

enables everyone to stay connected at all times—meaning that even on holiday, business professionals remain connected to their work. To cater for this need, Club Med has rolled out an extensive Wi-Fi network in all its resorts. In other resorts, we also offer extensive business facilities; not only is it possible to print documents if required, but we also have rooms that can be used for meetings or events,” says Stuart de Bourgogne, MD at Club Med South Africa. In Val Thorens, it was possible to access free Wi-Fi at most gondolas and après-ski spots, so the businesspeople were never entirely disconnected.

AN ATMOSPHERE IN THE ALPS THAT’S CONDUCIVE FOR SNOWBOARDING, STRATEGY AND NETWORKING—THINK DAVOS, BUT WITH MORE ADRENALINE.

I N S P I R AT I O N A N D I N N O VAT I O N – T H E H U M A N E L E M E N T Ask any of the #SnowClub15 crew and they’ll tell you they returned feeling more inspired, educated and aware of what they needed to do in their respective businesses after such a trip. As much as a destination plays a big role in being conducive to inspiring ideas and influencing business decisions, human interaction among individuals is another key factor. As customer experience specialist Marcela Ospina puts it, when one is in an environment that prompts closeness, people are able to connect more deeply. “Behaviour can be mimicked as well, so if you are with people who inspire you or motivate you, chances are you will end up believing you possess those characteristics, too. Innovation is also incubated when ideas different from one’s own are heard. This explains why the #SnowClub15 and SnowCon groups

18 FASTCOMPANY.CO.Z A JUNE 2015

leave such encounters with a feeling of fullness and accomplishment.” Convinced yet? “There’s so much to learn outside of the office and there are so many tools that enable you to be productive from anywhere in the world. If you’re an information worker, then it makes lots of sense to get out of the office, travel the world, meet new people, find new inspiration, and all the while stay connected and deliver on your role,” Rodney adds. As a business owner or CEO of a big multinational, or founder of a small startup, thinking outside the box is critical. Better yet, get rid of the box altogether. Taking time away from one’s company in an innovative and fresh context can add incredible value to the business in the most surprising of ways.

The Real Legacy of Steve Jobs

20 FASTCOMPANY.CO.Z A JUNE 2015

If Apple’s historic rise depended on all the standard Steve Jobs clichés, then what are we to make of its dominance now? Time to revisit—and correct—the myth By Rick Tetzeli

Illustrations by Heads of State

JUNE 2015 FASTCOMPANY.CO.Z A 21

STEVE’S LEGACY

Wunderkind. Jerk. Innovator. Tyrant. (All of the above.) Even now, almost four years after his death, it’s hard to read a story about Steve Jobs that doesn’t rely on these kinds of generic labels to explain his character, that doesn’t paint him as an obstreperous ingrate who never changed, who cowed co-workers and competitors with an almost magical ‘reality distortion field’. 22 FASTCOMPANY.CO.Z A JUNE 2015

It’s a strange phenomenon, given the extraordinary story of his life: A callow businessman, a young college dropout whose behaviour was so divisive and undisciplined that he was exiled in 1987 from the company he founded, turns around and becomes the radically effective visionary leader of a company that became the most valuable enterprise on earth. Surely this can’t be explained by a set of stereotypes that haven’t changed for three decades. Three years ago, fellow journalist Brent Schlender and I set out to try to take the long view of Jobs’s career. I had worked behind the scenes as an editor on many Apple stories for both Fast Company and Fortune. Brent knew Steve well. For more than two decades, he reported on him for The Wall Street Journal and Fortune, interviewing him dozens of times. The two became close, albeit within the bounds of a journalist/source relationship; Steve regularly introduced Brent as his “friend”. Brent believed Jobs had changed more than any other businessman he had covered. At first, Steve’s closest colleagues were reluctant to speak with us. Our earliest interviews were with people who had parted ways with Jobs at some point, often under difficult circumstances. But even they felt he was misunderstood. Susan Barnes was the financial manager for the Mac team and CFO of NeXT Computer. She left NeXT because she believed Steve was squandering its capital. Steve totally cut her off, immediately, turning off her email and phone the day she resigned. Yet, Barnes was deeply emotional when recalling Jobs; like others we spoke to, she still referred to him in the present tense. “You read the books, and you can’t understand why anyone would ever work for this guy,” she told us. “He is an amazing boss.” When former Apple hardware chief Jon Rubinstein signed on with Palm Computing, Steve excoriated him on the phone, calling him a traitor to Apple. Yet, says Rubinstein, “Steve can be truly charming. No one ever manages to explain that. And he always cared deeply.” When members of Steve’s inner circle finally began meeting with us, they further undermined the stereotype. Ed Catmull, the president of Pixar and perhaps the most important mentor in Steve’s life, told us Steve was constantly trying to improve in both his business decisions and his private behaviour. “I look at Steve as someone who was actually always trying to change,” says Catmull, who knew and worked with Steve for 25 years. “But he didn’t express it in the same ways as others, and he didn’t communicate with people

about that. It didn’t come across as him being personally introspective.” What emerged from these exclusive interviews—with Jony Ive and Tim Cook, Bill Gates and Bob Iger, and others, including Steve’s widow, Laurene Powell Jobs—was a very different picture of Jobs. Steve was someone with a deep hunger for learning, who breathed in an education wherever he could find it, from his youthful pilgrimage to India to his key mentors and his long-time colleagues at NeXT, Pixar and Apple. Powell Jobs goes so far as to call him a “learning machine”. He learnt from his many failures and relentlessly applied those lessons. This wasn’t an obvious process—Steve always preferred to talk about the future rather than the past, so there are very few examples of him reflecting on his triumphs and missteps, or acknowledging a lesson learnt. But like most of us, he tried to use what he learnt to take better advantage of his strengths and temper his weaknesses. It was a lifelong effort and, like most of us, he succeeded in some ways and failed in others. Steve was always changing. Thinking of him this way casts him in a very different light from the more common view of him as a stubborn force of nature. It reframes what those of us fascinated by and engaged in business can draw from his example. If you search for “Steve Jobs” books on Amazon, you’ll find that most carry such titles as Steve Jobs: Ten Lessons in Leadership or The 66 Secrets of Steve Jobs: The Most Complete Step-by-Step Guide Ever Written on Becoming the Next Steve Jobs. Book publishers clearly believe that readers are dying to mimic a magical ‘Steve Jobs Recipe for Success’. (One possible exception: Steve Jobs Returns With His Secrets, which is, according to its jacket copy, a “spiritual interview with Steve Jobs, conducted just three months after his death”.) But there is no such recipe. “You should call your book Don’t Try This at Home,” Bill Gates told us. “That’s the degree of difficulty of what Steve achieved.” There are no truisms about design or simplicity or focus that will transform you or your company. Instead, there’s a narrative of constant change. The evolution of the iPad did not resemble the flash creation of the Apple II. The way Steve assembled and managed the team at Apple in the 2000s had little in common with the way he rallied the band of pirates that built the Mac. What Steve left behind was the process of his life, not a series of diktats. Thinking of his career and life as a fluid history changes what we can learn from Jobs. It changes his legacy and how we have to think

about the future of Apple. What follows here are three unconventional assessments—and the ways in which they continue to drive the company Steve launched. (Our book, Becoming Steve Jobs, which was published by Crown in March, offers more, and fuller, insights.) For starters, we have to reconsider Steve’s image as a solitary genius who on his own simply willed breakthrough products into existence.

THERE IS NO ‘I’ IN ‘STEVE’ Despite his reputation as a tyrannical micromanager, Jobs maintained an excellent and relatively stable executive team during his second tenure at Apple. The more mature and confident he became, the more he surrounded himself with strong, opinionated executives who felt comfortable arguing with him. This was something he had learnt during his exile from Apple. For much of its first decade, Apple was riven by internal conflicts, many of them initiated or exacerbated by Steve. After getting fired, however, he had the good luck to experience, at Pixar, a strong collaborative

Apple’s resurrection was a team effort, a fact that gets overlooked to the detriment of everyone. culture. It had been moulded by Ed Catmull, a would-be animator who had developed into a great manager over the years. As he steered Pixar through the many difficult periods that preceded the creation of Toy Story, he nurtured an intelligent, respectful and effective culture. Catmull was so firmly in charge of the place that he was able to keep Steve from getting too involved in the production, so Jobs watched from a distance as writers and animators worked their way through failed plot lines, poorly conceived characters, and interference from Disney’s then-chief of animation, Jeffrey Katzenberg. After Toy Story, he got to see the team do it again, with A Bug’s Life, and then again and again and again. “Watching our collaboration, where we were making ourselves better by working together, I think that fuelled Steve,” says John Lasseter, the director of Toy Story and The Incredibles, who now heads up Disney Animation and Pixar with Catmull. “That was one of the key changes when he went back to Apple. He was willing to be open to the talent of others, to be inspired by and challenged by that talent, but also to inspire them to do amazing things he

JUNE 2015 FASTCOMPANY.CO.Z A 23

STEVE’S LEGACY

initially introduced the iPhone, he famously barred independent developers from creating software for the device. It was only after he listened to his team that he allowed the creation of the App Store, which secured the iPhone’s place in history. The resurrection of Apple was a team effort, a fact that gets overlooked to the detriment of everyone, including Steve. Managing a team that could support the long-term goals of a corporation was not one of his innate gifts. While he had rallied a talented group to create the Mac, many in that team were burnt out by the process. Worse yet, the Mac was actually a feeble computer when first released in 1984. But Steve taught himself how to become a better manager, and when he returned to Apple, he was able to sustain a strong executive group for years and deliver firstrate products almost every time.

INCH BY INCH, DAY BY DAY

knew he couldn’t do himself.” In 1997, when Jobs returned to Apple, the person he kept around from the old Apple regime was Fred Anderson, the CFO. Most of the executive team were newcomers, including Rubinstein, software chief Avie Tevanian and Tim Cook, who joined in 1998 from Compaq. Jobs gave the group huge responsibilities and plenty of leeway. Anderson says Steve didn’t interfere much in the financial operations of the company. “It wasn’t his strength, and he knew it,” he says. Former Apple retail chief Ron Johnson once told a group of Stanford MBA students: “Steve was the best delegator I ever met.” Others, like Rubinstein, were indeed micromanaged, but they could give as good as they had to take. “I fought with him for 16 years,” says Rubinstein. “It was almost comedic. I remember one Christmas morning, we’re on the phone screaming at each other and both of our significant others are in the background, saying, ‘Come on, we have to get going, get off the damn phone.’ ” According to Barnes, Steve’s best collaborators understood that “you had to listen past the yelling to understand what the yelling was about.” Each member of that early team performed heroic work. Anderson re-engineered the company’s finances; Cook slashed inventory

24 FASTCOMPANY.CO.Z A JUNE 2015

and eventually built a reliable global supply chain that fed into an agile network of contract factories that could pound out tens of millions of devices every year; Tevanian created the operating system that supports all of Apple’s various software even today; Rubinstein oversaw the development of the electronic guts of Apple’s Macs, iPods and other products. Then there was a designer, by the name of Jony Ive, whose sleek but playful sensibility led to the iMac, which was the first step on the road to Apple’s recovery. Says Bill Gates, “That is a really crack team that bonded with each other in toughness. I mean, you can point to every member of that team and say, ‘Okay, he earned his pay, he earned his pay, he earned his pay.’ There’s no weakness in that team.” Jobs’s executive team repeatedly steered him away from trouble and in the right direction. When Steve fell in love with digital movie editing in 1999, Apple made a nifty piece of software called iMovie. It was up to the members of the executive team to convince Steve that digital music was a better bet, and they did so at a hastily called meeting in early 2000 at the Garden Court Hotel in Palo Alto. Jobs quickly conceded that they were right; iTunes was released 12 months later, and the iPod less than a year after that. When Jobs

Jobs is often heralded for the breakthrough products he delivered, ranging from the Apple II to the iPad. But the process of developing those breakthrough products changed completely over the course of his life. Jobs the revolutionary became Jobs the incrementalist. In 1991, during an interview Brent conducted with Jobs and Gates at Steve’s house in Palo Alto (they’d do only one more joint interview, many years later), Gates argued that incrementalism was exactly what the computer industry needed. Thinking about his corporate customers, he said: “All I want is a car that will run on the current streets. I’m on this evolutionary path.” At that point, Jobs had a different goal. He loved transformative moments like the Apple II and the Mac, and that’s what he had hoped to deliver with the NeXT Computer. “The real trick is to balance that incremental improvement with some big steps,” he said. “The standard bearer needs a kick in the ass every once in a while.” By the time he returned to Apple, just six years later, Steve had moderated his approach. He applied the incremental approach he’d seen work so well at Pixar for Lasseter and Catmull. After selling NeXT to Apple in December 1996, Steve spent months studying the massive challenges facing the Cupertino company. At first, he didn’t even know whether he wanted to return to Apple. By the time he made the decision, in September 1997, to come back full-time as CEO, he understood the depth of Apple’s problems: massive inventory, an uninspired workforce, a woebegone share

price, a meaningless market share. No single product could possibly revive the company. So he moved slowly, step by step. He launched an ad campaign, “Think Different”, the primary purpose of which was to reclaim the spirit of Apple for the company’s employees. He continued the layoffs and cost-cutting that Fred Anderson had set in motion, finding the A players, as he put it, while sussing out and firing the C team. He introduced a product, the iMac, which was more a trick of design than engineering. It was just enough to get people

actual product itself. And then there’s all that you learnt. What you learnt is as tangible as the product itself, but much more valuable because that’s your future.” Again and again, Apple took what it had learnt from one product and applied it to the creation of something new and better. After creating iTunes, the team knew that most digital music players were pathetic, so they built the iPod. After working on the Rokr, a kludge of an iTunes-based music phone made by Motorola, the team understood better how to deal with carriers and what it would take to make the iPhone great. The obsessive work on the iPhone’s touchscreen interface led to an understanding of how to make the iPad more intuitive than any prior incarnation of tablets. Jobs did have a genius for synthesising what Apple learnt as its product line expanded. That’s what fed the perfection of the iPod, iPhone and iPad, each of which was a new version of something others had tried, and failed, to market successfully. Steve was the epitome of a technologist, in the sense that technology is, more often than not, a product of recombinant thinking. Most ‘new’ technologies are really new combinations of independent technologies which, when put together, create a new capability by virtue of their synergies. Apple’s incremental product cycles were what gave Steve the raw materials to visualise the future. His visions didn’t come from thin air.

“Can you imagine Steve as the CEO of Microsoft?” Gates cackled during an interview. “He would have been terrible.” chattering positively about Apple again. For the first time in his career, Steve was playing the hand he was dealt, rather than trying to solve everything with one brilliant stroke. Even during the remarkable product run that would come to define his legacy, progress came incrementally. As Apple moved into the consumer electronics business, its metabolism for pumping out upgraded versions sped up. So did its ability to physically build and distribute products. For all the talk of design genius and ingenuity, what Apple accomplished in terms of sheer execution during the 2000s (and is still accomplishing, for example, with sales of 75 million iPhones in its most recent quarter) is at least as remarkable. Before the iPod, Apple would sell tens of thousands of a particular item, hundreds of thousands if something became a hit; the iPod exceeded those quantities by an order of magnitude. This wasn’t simply a task of ramping up production at existing Apple facilities. It was about finding new suppliers and contract manufacturers; sourcing new kinds of metal and other materials; building, tracking and constantly improving a new supply chain. It was about manufacturing millions of devices that consumers would embrace as prized jewels—and then retooling for a new version every 12 months. The annual demands of the consumer electronics market made incrementalism a necessity. Yet, each incremental advance also offered the potential for a new breakthrough. “I’ve always thought there are a number of things that you have achieved at the end of a project,” says Ive. “There’s the object, the

APPLE IS AN ATTITUDE When Jobs died, a simple question was asked over and over again: How could Apple possibly thrive now that its charismatic leader had been replaced by someone then known only as an ‘operations guy’ (Tim Cook)? It turns out that the simple question was the wrong one, on many levels. In 2008, Steve hired Joel Podolny away from the Yale School of Management to create Apple University. Apple U. isn’t anything like Pixar University, where animators can learn accounting and accountants can take drawing classes. Apple U. is designed to embed the why of Steve’s thinking into the company he left behind. It is an attempt to codify a set of corporate decision-making values. The classes are case studies, both of successes and failures. These aren’t sessions in how to be like Steve. Jobs didn’t want to leave behind a bunch of executives who would try desperately to learn how to be like him. He did want to hand the company to a group of people who would apply

the same rigorous decision-making process that he applied during his last 15 years at Apple. He wanted a company that would continue to be collaborative, even without someone as charismatic at its centre. Cook is exactly what Jobs thought Apple would need going forward. Apple now sells a cumulative experience that involves lots of moving parts. Its hardware, software and network services all have to work together, with whatever movies or music or other content that users want to tap into. Cook is a master of taming complexity. He first demonstrated this skill when he managed Apple’s switch to contract manufacturing and modernised the way the supply chain was managed. Frankly, Cook could successfully lead any number of complex companies, something no one would have ever said of Steve. (“Can you imagine Steve as the CEO of Microsoft?” Gates cackled during our long interview. “He would have been terrible.”) Instead, Cook is thriving at Apple, with the stock doubling during his tenure and the volume of units sold tripling. Like Steve, Cook is unsentimental about his executive team. Steve let Tevanian and Rubinstein depart when he thought it was time; Cook coolly dismissed software showman, Scott Forstall. And like Steve, he is unafraid to strike out into new territory: When Steve envisioned the Apple Stores, he brought in a leader with no computing experience, Ron Johnson; Cook’s choice as head of retail, Angela Ahrendts, the former CEO of Burberry, also has limited tech chops, but has a first-hand understanding of fashion which Apple lacks. Cook has also made moves that Steve likely never would have, such as creating a corporate philanthropy plan or opening up his personal life, as Cook did when he announced last year that he is gay. He is proving to be a very forceful leader, and charismatic in his very own way. It’s extremely difficult to predict what Apple will look like in a few years. The company’s recent growth has again and again been driven by a sideways move into industries that need its computing expertise, and there may still be many such opportunities. Wherever Cook and the core team take Apple, they will have to apply the real lessons of Steve Jobs, not the ones perpetuated by the stereotype of the brilliant enfant terrible. For now, Apple’s leaders are rigorous, collaborative and deeply openminded. They will follow their noses and not look back. That is a big part of the real legacy they have inherited. tetzeli@fastcompany.com

JUNE 2015 FASTCOMPANY.CO.Z A 25

FAST CITIES

PIECE #1: BROADBAND CONNECTION

We’re all connected Veniam launched its first pilot programme in Porto, Portugal, but plans to launch soon in American cities.

The backbone of the Veniam network is a city’s existing Internet infrastructure. Engineers tap into that infrastructure at points throughout the city, plugging what are essentially supercharged wireless routers into fibreoptic jacks. Because the routers broadcast on a frequency reserved for transportation systems, they have an extra-large range: almost 500 metres.

P I E C E # 2 : M O B I L E H OT S P OT S Fleets of public vehicles fill in the gaps between stationary routers. Buses, taxis, refuse trucks and police cars are outfitted with Veniam’s special NetRider routers, which receive wireless signal from the access points—creating hotspots on the go.

PIECE #3: A MESH NETWORK

Wi-Fi on wheels

A CALIFORNIA STARTUP IS TURNING CIT Y VEHICLES INTO MOVING HOTSPOTS

By Corinne Iozzio

Photograph by Miguel Proença

26 FASTCOMPANY.CO.Z A JUNE 2015

The reasons to love public Wi-Fi are many: downloads go faster than on cellular networks, it’s cheap to set up, and it’s free to use. Too often, however, it’s also spotty: strong in one place, weak in another. Mobile Internet users frequently wind up hopping from hotspot to hotspot, having to log in to a different network each time they move from the coffee shop to the office, and so on.

Mountain View, California– based startup Veniam thinks it has a solution to that problem. Its system can blanket an entire city in seamless Wi-Fi coverage. Already, a pilot programme in Porto, Portugal is serving 110 000 people a month. In December, the company (whose management includes Zipcar founder Robin Chase) raised just over R59 million to bring the system to the United States. Here’s how it works.

If a vehicle can’t secure a signal from a stationary router, it can piggyback on the connection of another vehicle that’s still within range, creating a mesh network that covers the whole city. Since they’re all on the same network, it means one login, and no hotspot hopping.

B O N U S ! T W O - WAY D ATA TRANSFER NetRider boxes also gather data that a city can use to refine its infrastructure. For example, it may log the locations of potholes or common trafficcongestion points, saving them to Veniam’s cloud service for later analysis.

FAST COMPANY PROMOTION

Smooth operations

EVERYTHING A CEO NEEDS

CEO and founder Paul van Zyl says Aetas gives people control over their future, running their own successful business without any hassle.

New service delivers ultimate business solution in one simple package

Aetas Business in a Box (ABiB) is a financial services franchise that provides people and established businesses with the opportunity to get involved in the South African financial services industry. Aetas provides products such as personal loans, vehicle finance, online educational products and so much more. It is the ultimate business in a box. ABiB is a rich and dynamic solution that provides entrepreneurs with a simple and powerful tool for launching their own business. Everything the CEO needs is built into this package, from the business model to the website to full administrative support and security. It is a comprehensive and complete solution that puts a boardroom in every home. “At its core, Aetas is the ultimate tool for entrepreneurs, handing them the keys to a new and exciting future,” says Paul van Zyl, CEO and founder of Aetas. “We provide everything that business owners need in order for them to start and run their own thriving organisation—and we ensure it is as easy and efficient as possible.” Aetas doesn’t simply level the playing field; it reimagines it. There is no big upfront cash investment or the need to spend money on a website or staff; everything is included in the monthly administration fee of R289 per month. ABiB includes a free branded website, with hosting and design at no charge. The content, driven by intelligent SEO language, is also provided within the package along with marketing materials, email addresses and social-media marketing campaigns. The products featured on the site are predominantly from Aetas, but owners can introduce their own services and solutions to bolster sales. Products provided by Aetas run the gamut from LED televisions to distance-learning courses (approved by Sector Education and Training Authorities) and vehicle finance; they are white-labelled so that users can brand them with their own company name and use these names to drive content on their website. Aetas owns and markets brands such as Regal Finance, Regal Car Finder, Aetas Online Campus, CloudLearning, Home Logix and Prosperoh. Commissions are paid out weekly and range in value from R1 000 to R2 500 per sale, and often include once-off profits that come about as a result of a special offer or sale.

“IT’S ABOUT ALLOWING PEOPLE FROM ALL WALKS OF LIFE THE OPPORTUNITY TO RUN THEIR OWN BUSINESS—AND RUN IT WELL.” “Our solution will turn anyone into a CEO,” says Van Zyl. “It’s a revolution for business, taking away the risk and handing over the reward. We help our clients to market the products and reach the right audiences and even take on a large proportion of the admin that comes with a new business. “Aetas was designed to give people control over their future and to allow them the freedom to run their own successful business without the hassle. We have had some remarkable success stories with our product and we have just launched a competition that recognises the most impressive results.” The competition will reward the most profitable Aetas Business in a Box franchise with a staggering R250 000 in total prize money after a six-month period. It launched on 1 June and the winner will be announced on 10 January 2016. “We are completely committed to the value we offer and believe in the potential of this solution to transform people’s lives,” concludes Van Zyl. “Aetas is about allowing people from all walks of life the opportunity to run their own business—and run it well.” For further information, contact Paul van Zyl via email: info@aetas.co.za

JUNE 2015 FASTCOMPANY.CO.Z A 27

WANTED

Santé! Say cheers with these innovative bottles of bubbly

French toast W H E T H ER I T ’ S A S PECI A L B I RT H DAY O R A N N I V ER S A RY, CELEBR ATE P OIGNANT M OMENTS I N O O H - L A- L A S T Y LE W I T H T H E S E PER S O N A LI S ED G I F T S

Ice letters

From behind her desk in Reims, France, at the beating heart of the champagne trade, Madame Clicquot boldly ran her empire with the stroke of a pen. It was

through the mail that she directed her suppliers and agents, and satisfied the wishes of her customers, even in faraway places. Her business empire spanned from New York to Saint Petersburg, Russia. Veuve Clicquot has maintained Madame’s correspondence, which stands as a testament

28 FASTCOMPANY.CO.Z A JUNE 2015

to her brilliant mind and a product of quality and renown. It is this history that the Clicquot Mail campaign celebrates with a whimsical new range of products such as the Veuve Clicquot Ice Letter. Light, chic, unobtrusive and innovative, the yellow waterproof envelope lets you transport your bottle of champagne in trendy style, and transforms seamlessly into a neat ice bucket to perfectly chill your bubbly for that special occasion.

Nice letters

With the Moët & Chandon Calligraphy Kit, the brand offers champagne lovers the unique opportunity to personalise their bottle of Moët & Chandon Impérial with beautiful messages written in delicate gold calligraphy. The calligraphy is a bespoke font created specifically for Moët by famous Parisian calligrapher, Nicolas

Ouchenier. The font is an elegant expression of the champagne’s style, boldness and festive spirit. Messages are beautifully presented in a calligraphy pack, so you can select your note and personalise your bottle with ease. Available from leading liquor merchants nationwide, the Veuve Clicquot Ice Letter is priced from R569.95, and the Moët & Chandon Calligraphy Kit from R549.95.

FAST COMPANY PROMOTION

Leading from the front

LE AVE IT TO EL ANGENI

Elangeni founder Yvone Thobile Mabuza has extensive experience in LAN and systems development.

Sufficient planning should consider the resources needed for a project, the skills required and the people involved

Elangeni Consulting Services is a truly black-owned information and communication technology (ICT) business. Its shareholding is 100% owned by a female entrepreneur. ECS ensures its long-term business success by focusing on client satisfaction, skills and knowledge transfer and the partnerships of reputable ICT organisations. ECS’s client base ranges from government, parastatals, non-governmental organisations and the private sector. The company relies on the proven skills of its founder to take advantage of the growing needs for advanced ICT services. Yvone Thobile Mabuza has brought to the company her extensive experience in local-area networking and systems development. She is leading the company as it establishes itself as a highquality ICT service provider in Mpumalanga. “ECS network management refers to the activities, methods, procedures and tools that we use to connect to the administration and maintenance of clients’ network systems. Administration deals with keeping track of resources in the network and how they are assigned,” Mabuza says. “ECS ensures that whatever type of business server support you require, your business can run as smoothly as possible—while we worry about issues such as security, anti-spam, antivirus, software updates, redundancy, uptime and data reliability. “We can deliver high-standard IT projects with sufficient planning, considering the resources needed for a project, the skills required and the people who need to be involved,” she adds.

“ECS ENSURES THAT WHATEVER TYPE OF BUSINESS SERVER SUPPORT YOU REQUIRE, YOUR BUSINESS CAN RUN AS SMOOTHLY AS POSSIBLE—WHILE WE WORRY ABOUT ISSUES SUCH AS SECURITY, ANTI-SPAM, ANTIVIRUS, SOFTWARE UPDATES, REDUNDANCY, UPTIME AND DATA RELIABILITY.”

Elangeni Consulting Services offers the following services: WAN and LAN infrastructure; Internet services; backup storage and disaster recovery; server management; ICT training (MICT-accredited); ICT consulting and project management. The company is certified by Krone to instal copper, fibre and wireless; and on SITA cabling contracts 786 and 783. It is an Icasa-certified Internet service provider. Contact details 38.1 Central Park Building, 12 Suikerriet Street, Nelspruit Tel: (013) 753 2747 Fax: 086 612 3844 Email: admin@elangeniservices.co.za www.elangeniservices.co.za

JUNE 2015 FASTCOMPANY.CO.Z A 29

TECHNOVORE

Om Malik

THE NE W V ICTORI A N AGE

roads, I see networks. Whenever I drive from San Francisco to Los Angeles down I-5, I wonder to myself whether McDonald’s and every other fast-food chain would have thrived had there been no interstate highway system (the US network of controlledaccess highways). Would FedEx exist but for the invisible but very real infrastructure of airports, air routes and roads? Railroads, freighters, factories, mass production— everything happened because the power of steam was made mobile. That created the Industrial Revolution and the Victorian age, and it altered the face of the entire planet.

WHERE OTHERS SEE

Today, it’s the increasing mobility of ‘computing engines’, the marriage of microprocessors and Internet ubiquity, which is poised to reimagine our society. More than a billion people bought smartphones last year—or to put it differently, we added 1.2 billion nodes to what was already the largest network ever built. Networks— social, neural, physical, metaphorical—enable connectedness, and connectedness changes everything. Networks compress distance and time, that concentration speeds up life, and that, in turn, creates sociological and economic change. Why is Uber so disruptive in both the literal and figurative sense? Because the ride service creates a network of drivers and riders in each city it enters, accelerating customers’ access to transportation. That density, combined with Uber’s sophisticated understanding of all those interconnections, is what lets the company deliver on its mission of making ordering a car a frictionless act that results in near-immediate gratification. Uber’s success so far hints at the longer term impact it could have on the world, such as more people choosing not to own a car and Uber-ites opting to live within a city so that they have better access to the network. What about those McDonald’s I pass on I-5? Mobile connectedness is creating a slew of opportunities. Postmates, a website and app that lets customers dispatch a courier in any of the 64 communities it serves in the US, will fetch orders from restaurants that don’t

30 FASTCOMPANY.CO.Z A JUNE 2015

TODAY’S COMPUTING ENGINE IS PUSHING US TO CHALLENGE ALL OUR PRECONCEPTIONS... THE RIPPLE EFFECTS OF THESE CHANGES WILL BE FELT FOR DECADES.

traditionally offer takeout. Munchery, which started operating in New York in March in addition to its home base of San Francisco, takes the physical restaurant out of the equation entirely, making meals in a central kitchen and delivering them to diners when they want to eat. If you still want a communal dining experience, order-ahead apps like those from Taco Bell change the entire service dynamic at a fast-food joint, removing the largest annoyances (waiting in line, and making sure personalised orders are input correctly). And a company called DoorDash has developed a platform that offers delivery to traditional establishments that may compete against born-for-mobile food services. If your phone becomes an on-demand food court, maybe we don’t need 35 000 McDonald’s outlets. Maybe the next fast-food giant is a virtual one like Munchery. Or it’s a delivery system like Postmates or DoorDash, stitching together indie restaurants. The network, then, may pose even more of a threat to the future of a McDonald’s than even Chipotle Mexican Grill does. These new interchanges are creating a fortuitous moment for those who can seize it while simultaneously presenting a worrying reality for companies that weren’t born on the network and can’t adapt fast enough. Recently, PwC released a survey of 1 322 global CEOs, and half of the US chiefs believe a significant competitor is emerging or could emerge from the technology sector. After all, just in the last few months they’ve seen RadioShack finally steamrollered by Amazon, and SkyMall killed by in-flight Internet access. Just as in the Victorian age, today’s computing engine is pushing us to challenge all our preconceptions. And similarly, the ripple effects of these changes will be felt for decades. Poets have written about our eternal love being seven seas away. But now everything is a tap of an app away.

Om Malik is a partner at True Ventures, an early-stage VC firm. He blogs at Om.com and interviews luminaries about tech and culture at Pi.co.

Illustration by Raymond Biesinger

DANIEL SALO

I F Y O U T H I N K T H E W O R L D H A S B E E N T R A N S F O R M E D BY T E C H N O LO GY, W E ’ R E J U ST G E T T I N G STA RT E D

WHEN IT CLICKS,

IT CLICKS.

After a decade-long slump, Lego has rebuilt itself into a global juggernaut. An exclusive look inside the company’s top-secret Future Lab By Jonathan Ringen Lego sculpture by Kyle Bean Photograph by Aaron Tilley

JUNE 2015 FASTCOMPANY.CO.Z A 33

Every September, largely unbeknown to the rest of the company, a group of around 50 Lego employees descend upon Spain’s Mediterranean coast, armed with sunblock, huge bins of Lego bricks, and a decade’s worth of research into the ways children play. The group, which is called the Future Lab, is the Danish toy giant’s secretive and highly ambitious research and development team, charged with inventing entirely new, technologically enhanced ‘play experiences’ for kids all over the world. Or, as Lego Group CEO Jørgen Vig Knudstorp puts it, “It’s about discovering what’s obviously Lego, but has never been seen before.” On a Tuesday morning, the group is gathered in a book-lined room just off the pool at the Hotel Trias, in a sleepy town called Palamós, where they’ve met each of the last six years. There are bespectacled dudes in futuristic sneakers, a small cohort of stylish blonde women, and a much larger contingent of techie millennial guys in superhero T-shirts, all filling rows of folding chairs. At the front of the room, Erik Hansen, a tall, professorial member of Future Lab’s leadership team, is running through the week’s planned activities, which include extensive brainstorm sessions and a field trip to Barcelona (visiting the telecom giant, Telefónica, and some local design firms). He presents the agenda with a sober, vaguely robotic tone that makes what he does next surprising. As he brings the proceedings to

34 FASTCOMPANY.CO.Z A JUNE 2015

a close, he asks, brightening: “Is everybody feeling awesome?” The team laughs and applauds, Hansen hits PLAY on a laptop and, suddenly, every single member of the Future Lab team joins in with summer-camp enthusiasm to sing a song seared into the memory of everyone who made last year’s The Lego Movie a R5.5-billion global hit. On the off chance you aren’t one of them, it goes like this: Everything is awesome! Everything is cool when you’re part of a team! Everything is awesome! When we’re living our dream! In the movie, the song is used satirically. The Lego people living in a Lego world sing it because they’ve been brainwashed by an allpowerful corporation to mindlessly—but joyfully—accept a prepackaged set of beliefs and desires, including adamant rule-following. It is, as the film goes on to demonstrate, the opposite of the free-range creativity that’s made Lego’s toys beloved by kids and their parents for decades, and it’s a slightly ironic choice for the meeting today. But taken at face value, it’s an effective team-building exercise, and the

HOW LEGO STACKS UP Revenue & Net Profit R54.7bn

R40.4bn

R54.7bn

R27.3bn REVENUE NET PROFIT

09 20 10 20 11 20 12 20 13

R14.2bn

R&D Expenditures R953m

R476.5m

09 20 10 20 11 20 12 20 13

PHOTOGRAPHS BY NIKOLAJ MØLLER

12K

0 09 20 10 20 11 20 12 20 13

Future Lab can definitely use the boost because their job is hard. In the last 10 years, Lego has grown into nothing less than the Apple of toys: a profit-generating, design-driven miracle built around premium, intuitive, highly covetable hardware that fans can’t get enough of. Last year, fuelled in part by The Lego Movie’s Pixar-size popularity, the privately held company briefly surged ahead of rival, Mattel, to become the biggest toy manufacturer in the world, reporting first-half profits of R3.2 billion on revenue of R24.2 billion. It’s a remarkable achievement, particularly considering that Mattel makes a huge range of products—including Barbie, Hot Wheels, Fisher-Price and even the Lego knockoffs, Mega Bloks—while Lego mostly sticks to variations on a single toy. The company has recently moved beyond its core markets of Europe and North America with a major push into Asia, where it saw double-digit growth in 2013. A brand-new manufacturing and distribution centre in China is being built solely to meet growing demand on that side of the planet. “It’s a very simple idea,” says Knudstorp. “All bricks are complementary. They all fit together. Which creates a system that you can be endlessly creative in.” Now, as the rest of the company continues to refine its half-centuryold mission, making cool, crave-worthy helicopters and fire trucks and

Full-time Employees

David Gram (left) runs marketing and business development for Lego’s Future Lab; Ditte Bruun Pedersen (right) is its chief of design.

Production Facilities 1947 DENMARK 2000 CZECH REPUBLIC (E XPANDING IN 2015) 2008 MEXICO (EXPANDED IN 2014) 2008 HUNGARY (RELOCATED TO NEW, BIGGER PLANT IN 2014) 2017* CHINA

*Estimated (currently under construction) Source: Lego

JUNE 2015 FASTCOMPANY.CO.Z A 35

ninja castles, the Future Lab has to live up to its lofty name and invent Lego’s future—in a world where play is increasingly digital. Which is why the Future Lab relies on this intense week of brainstorming, group meals and mid-ideation leaps into the pool. It all leads up to a 24-hour hackathon, where small teams—various combinations of industrial designers, interaction designers, programmers, ethnographic researchers, marketers and even master builders (Lego wizards who can create anything out of bricks, such as George Washington’s head or an X-Wing Starfighter)—compete to generate bigger, deeper, more awesome ideas that will be pursued back in Denmark. “We come here because we get the place cheap,” halfjokes Future Lab head Søren Holm, a jovial Lego lifer. “But, really, the team spirit we get? They’ll be talking about this trip all year.” About a decade ago, it looked like Lego might not have much of a future at all. In 2003, the company—based in a tiny Danish village called Billund and owned by the same family that founded it before World War 2—was on the verge of bankruptcy, with problems lurking within like tree rot. Faced with growing competition from video games and the Internet, and plagued by an internal fear that Lego was perceived as old-fashioned, the company had been making a series of errors. Day-to-day management had been handed in 1998 to a ‘turnaround expert’ with no toy background, who continued to live in Paris, as business writer David C. Robertson outlines in his 2013 Lego history, Brick by Brick. There were disastrous detours away from the core experience, including the abysmal morning cartoon Galidor, and experiments with bigger, more macho minifigures with a line called Jack Stone. The company kept opening Legoland theme parks around the world, despite having limited expertise in hospitality. Sales of several of Lego’s most successful products, including Lego’s Star Wars and Harry Potter lines, bobbed up and down based on movie release schedules over which Lego had no control. And the company wildly increased the number of products it released each year, resulting in a dreadful 2002 Christmas season, when major retailers ended up with around 40% of their Lego stock unsold. Enter Jørgen Vig Knudstorp, a deeply process-based thinker—and, not incidentally, a father of four—who arrived from McKinsey & Co. in 2001 and was promoted to CEO three years later, when he was 36. (He took over from Kjeld Kirk Kristiansen, grandson of Lego founder Ole Kirk Christiansen.) Knudstorp points to an expensive venture called Darwin as an example of what Lego had been doing wrong. The project was intended to establish a meticulous digital library of every Lego element, which involved setting up what Robertson, in his book, referred to as “the largest installation of Silicon Graphics supercomputers in Northern Europe”. The main application ended up being an online software tool called Lego Digital Designer, which allowed fans to design their own kits using the digital bricks and receive their custom sets in the mail. The problem was that it lacked any appeal. “We found that most consumers think that’s already the whole core experience of Lego—they buy some bricks and they make their own products,” says Knudstorp. “There’s no reason for them to design it up front and pay for that. They just want to buy the bricks.” Knudstorp began turning the company around by making several key moves: improving processes, cutting costs and managing cash flow. Then came stabilisation. “But after that, we knew there’d be a third phase of organic growth,” he says. That required figuring out what a modern Lego should even be, which Knudstorp accomplished in part by investing in a kind of research the company had never done before—deep ethnographic studies of how kids around the world really play. Today, Lego may know as much about that subject as any organisation on earth. The Future Lab (along with a similar group that preceded it) has been responsible for that work. “There’s the famous

36 FASTCOMPANY.CO.Z A JUNE 2015

quote that if you want to understand how animals live, you don’t go to the zoo, you go to the jungle,” Knudstorp says. “The Future Lab has really pioneered that within Lego, and it hasn’t been a theoretical exercise. It’s been a real design-thinking approach to innovation, which we’ve learnt an awful lot from.” This year, the small team inside Future Lab that was in charge of research became part of the company’s fast-growing Global Insights team—one of the main ways Future Lab thinking is making its way into the broader company. It’s run by Anne Flemmert-Jensen, a former academic with an artsy vibe, reflected today in the leather leggings, long nubby sweater and asymmetrical necklace she’s wearing. Global Insights conducts a lot of its research itself, but also partners with universities around the world and works with big agencies such as Ideo. Global Insights is even charged with tracking a wide range of sales data and keeping tabs on what the competition is up to. They know a lot about

B R I C K S, BOTS AND BEYOND A guide to Lego’s most experimental projects “It’s a classical skunk-works approach,” says Lego CEO Jørgen Vig Knudstorp of Future Lab and its predecessor groups, which have been charged with developing entirely new play experiences (that often end up reaching the market in controlled trial runs). “It’s a small area of the company that operates a little outside the rules,” he says, yet one that delivers vital information.

marketing commitment alone was around R476 million, and while it attracted some criticism for kits including the Heartlake Shopping Mall and a juice bar, there’s also a news van and a farm stand and several sets devoted to the curvy, long-haired characters rescuing endangered animals in a jungle. And it reveals some interesting Lego insights about play. For one, boys tend to be more compelled by a strong narrative—which is reflected in Lego’s popular boy-focused lines like Ninjago and Legends of Chima, which come with almost comically detailed backstories. Girls, on the other hand, tend to use their sets for role-play. (Both boys and girls love the building aspect of Lego.) In any case, Friends, according to Knudstorp, has been a major hit. “It’s very, very successful,” he says. “It caught on with girls in markets from China to Germany to the US. And it continues to grow very strongly for us.” Friends, like Ninjago and Chima—and The Lego Movie and its coming sequel—represents the company’s increasing reliance on its own intellectual property. Licensing deals still flourish, Knudstorp says, “but they contribute no more of our business than about a third,” he adds. “They’re on a list of about 10 things that drive the growth of the company.” What’s Lego’s ultimate goal? Is it growth for growth’s sake? As a privately held company, Lego has no need to demonstrate anything

you and your children, and not all of it is flattering. “There’s a clear distinction between American and European parents that keeps popping up everywhere,” Flemmert-Jensen says. “American parents don’t like play experiences where they have to step in and help their kids a lot. They want their kids to be able to play by themselves. We see among European parents, it’s okay to sit on the floor and spend time with the kids.” (Asked if it’s possible that American parents just want their kids to be independent, she responds, somewhat dubiously: “That’s one of many possible interpretations.”) In 2011, Lego acted on some of its research by launching a major effort to attract girls to the brand with a line called Lego Friends. Lots of girls already enjoyed Lego toys, but there wasn’t a play theme—Lego-speak for a toplevel category, such as Lego City or Star Wars, which can cost hundreds of millions of dollars to launch—designed for them. For the pinkand purple-accented Friends, the original 2 4

1 5

Lego Mindstorms

Lego Architecture

Lego Ideas

Lego Games

Life of George

Fusion

LAUNCHED: 1998 (WORLDWIDE)

LAUNCHED: 2007 (CHICAGO); 2009 (WORLDWIDE)

LAUNCHED: 2008 (JAPAN); 2011 (WORLDWIDE)

LAUNCHED: 2009 (ENGLAND AND GERMANY); 2010 (WORLDWIDE)

LAUNCHED: 2011 (U.S.); 2012 (WORLDWIDE)

LAUNCHED: 2013 (U.S. TOYS “R” US AND LEGO STORES)

Lego’s robotics platform, created with MIT’s Media Lab, gave the Future Lab some of its key DNA. It was the company’s first hybrid digitalphysical experience, and was the first time adult fans were brought into the design process. (Lego realised its most hard-core users knew more about programming toys than it did.)

Now a global hit helping fans build models of nearly 20 buildings, Lego Architecture started in the most grassroots way possible: Lego employees, without management approval, provided bricks to an architect in Chicago, and he created replicas of the Sears and Hancock towers— hundreds of them.

Fans vote on new-kit ideas submitted by amateur designers. Anything with more than 10 000 votes goes to a review phase, and Lego decides which get made. So far, the process has created more than 10 limitedavailability kits including a model lab staffed by female scientists and The Big Bang Theory apartment.

The line began with 20 board games, including Lava Dragon and Pirate Code, and combined traditional gameplay with Lego bricks. Future Lab’s Ditte Bruun Pedersen came up with the idea of Lego Dice, which snap together and can be configured in different ways, depending on the game. The line was discontinued in 2013.

The puzzle game, targeted at families, combines a special set of bricks with a smartphone app. Part of the experience involves importing shapes built with the bricks into the app via the phone’s camera. It marked a breakthrough for the company in blending physical and digital play, which has become the Future Lab’s primary focus.

An evolution of Life of George, Fusion’s three kits (Town Master, Battle Towers, and Resort Designer) provide a similar interactive experience: Users build something with the included bricks and scan it with a camera into a tablet game. Future Lab is studying how kids play with the toy to try to improve the experience. —JR

JUNE 2015 FASTCOMPANY.CO.Z A 37

to markets or shareholders. According to Knudstorp, he only has to worry about “the shareholder”—Christiansen’s heirs—who have two official objectives: that Lego continue to create innovative play experiences and reach more children every year. “They are not pushing us very hard on the financial target,” he insists. “What they like about, say, Lego Friends is that we’re engaging more children. They see growth as one testimony of whether we’re sufficiently innovative.” Eight years ago, a Chicago architect named Adam Reed Tucker, who had been building impressive Lego models of iconic buildings, reached out to Lego, suggesting the company may be interested in making official kits similar to his homemade creations. “Doing anything that wasn’t for the target group, which was boys between, say, 5 and 11, used to be almost a complete no-go,” says David Gram, Future Lab’s head of marketing and business development. But a free-thinking Norwegian Lego exec named Paal Smith-Meyer—Holm admiringly describes him as “a true rebel”—saw value in AFOLs (Adult Fans of Lego) and came up with a stealthy, shoestring plan to prove their worth to the company. It came in the form of a counter-offer—which would help usher in the current era of innovation at Lego. “We told him to do it,” Gram says. “We provided him with the bricks and he sat in his kitchen in his two-bedroom flat, doing the first 200 boxes of the Sears Tower and The Hancock tower.” In 2007, the homemade sets that would go on to become the wildly popular Lego Architecture line appeared in some local shops, and not only did they sell, they sold for way more money than a kids’ kit with the same number of pieces would have, because Lego could charge grown-up prices. “Seventy dollars [more than R800] instead of 30!” Gram adds. “That proved the case.” In 2011, Lego rolled out another innovation, which it had been testing under the name Lego Cuusoo in Japan since 2008: the crowdsourcing site, Lego Ideas, where superfans can submit suggestions for sets, other fans vote, and Lego produces limited editions of the best and most popular (such as Back to the Future’s DeLorean and the Ghostbusters Ectomobile, which are now widely marketed). “Kids aren’t buying those,” Gram points out. “They don’t know what those things are.” Surprisingly, even a year ago management still wasn’t entirely comfortable with the idea. “They were saying, ‘This is something we don’t know about—it’s very gimmicky.’ ” And now? “I can’t tell you the numbers, but it performed well,” Gram says. “Like really well!” He laughs happily. “And it’s now being looked upon as something that could be a serious thing for the company going forward.” In addition to learning about who is playing with their products, Lego is learning about how. Future Lab research has shown that kids no longer make meaningful distinctions between digital play, such as Minecraft, and physical play, like snapping together a Nindroid MechDragon (a half-robot, halfpterodactyl ninja nemesis, obviously) out of Legos. It’s the basis of Future Lab’s ongoing brief called “One Reality”, which emphasises novel hybrid digital-physical Lego experiences that typically involve playing with a set of bricks alongside a piece of software running on a phone, tablet or computer. In June last year, Lego quietly rolled out a Future Lab pilot project

“The team spirit we get? They’ll be talking about this trip all year,” says Søren Holm, head of Future Lab.

The Future Lab offers “a real design-thinking approach to innovation, which we’ve learnt an awful lot from,” says Knudstorp.

38 FASTCOMPANY.CO.Z A JUNE 2015

called Lego Fusion, limited to North American Toys “R” Us stores and Lego’s own retail outlets. There were four versions, at $34.99 (R416) each: Town Master, Battle Towers, Create & Race, and Resort Designer. The play experience is similar for each: A kid builds a model of a house or castle, takes a photo of it with a tablet, and watches his or her creation become part of a virtual world inside an accompanying app. Kids and parents seem intrigued, and Fusion Town Master ended up on last year’s Toys “R” Us list of the 15 hottest Christmas toys (which some Future Lab staff seemed to believe had as much to do with Lego’s relationship with the retailer, and the exclusivity deal, as with its actual popularity). But even its creators admit that Fusion was at best a 1.0 version of a digital-physical play experience. “Maybe a 0.9,” says Gram with a grin. The thing is, it’s just not that cool yet. In Town Master, for instance, kids don’t build a 3D house—they use a handful of special bricks to make a flattened outline of a house, which only becomes fully 3D when it appears in the app. “With Fusion, we created one type

PHOTOGRAPH BY NIKOLAJ MØLLER

of play,” he continues. “Right now it’s very based on, ‘You build a model, you scan it into a game.’ I think we’ll see other patterns.” There’s an old Simpsons episode where Bart visits Mad magazine and is disappointed to discover it’s just a boring old office—until he ducks his head in the door one more time and catches Alfred E. Neuman and the gang in a state of total pandemonium. Visiting Billund, the town Lego built, is a little like that. Only 6 194 people live here—the population balloons each weekday morning when Lego’s 4 000-some employees arrive. (There’s so little to do in Billund at night that a large percentage of employees live more than 80 kilometres away in the closest major city, Aarhus.) Nestled near the Lego campus are a few small businesses, an uninviting modernist church, some low-slung office buildings and, in an almost surreal testament to the founding family’s wealth and influence, Denmark’s second-largest airport. But if you’re lucky, you may just get a taste of some Willy Wonka–esque magic. For one, you’ll likely stay in the Hotel Legoland, possibly in a room with—for better or worse—a pirate or princess theme and boxes of bricks you can play with after you raid the minibar. (The hotel is attached to Lego’s original theme park, of which the company sold a majority share, along with three other outposts, to a British company called Merlin in 2005.) Just up the road is the primary administration building, with a bright yellow lobby designed to resemble the world’s biggest 2x4 brick and a massive logo behind the reception desk, built from 12 500 minifigures. Walk just a little farther and you’ll hit the main campus—a cluster of buildings that have grown around a stately old home sporting a pair of lions out front. The house is Lego’s most holy site, built in 1932 by the company’s founder Ole Kirk Christiansen, when he set up shop in Billund as a carpenter. When demand for furniture tanked during the Great Depression, he began making wooden toys such as ducks and tractors and yo-yos. He called the company Lego—a contraction of the Danish phrase leg godt (which translates to “play well”)—in 1934. The entire saga, from wooden ducks through recent nearbankruptcy and beyond, is told in a charming private museum called Idea House, which winds its way through Christiansen’s old home. It’s open to staff seeking inspiration, retailers and other VIP visitors, and includes an archive of almost every Lego kit ever made, stored in climate-controlled basement stacks. (Fans who want a similarly immersive adventure will have to wait until next year, when the Lego House “experience centre” opens around the corner.) Alone in a hallway is a piece of 1940s-era tech: an injection-moulding machine that would change the way kids play forever. In 1945, Christiansen met with a supplier of these machines and quickly recognised their potential for producing colourful objects in virtually any shape. Amazingly, he didn’t actually come up with the idea for the bricks himself. The supplier had several examples of things one could make—including a plastic stacking brick that a British company called Kiddicraft already had on the market. Intrigued, Christiansen pocketed one for further study. Deciding there was potential, he purchased one of the machines, redesigned the brick and, in 1949, released his own version, calling them Automatic Binding Bricks. If you somehow came across one of those first Lego sets, you’d be pleased to discover they’re compatible with all the billions of bricks that have followed. Even if Christiansen couldn’t take credit for the idea, he did come

up with the key twist that makes Legos so satisfying. Bricks in early sets had the studs on top, so they’d stack neatly, but were hollow underneath, so models had a frustrating tendency to fall apart. He experimented with his stud-and-tube solution until it had precisely the right amount of “clutch power”, which is Legospeak for the perfect, patented amount of stick—tight enough to build models that can sustain rowdy play, but loose enough that they can be easily pried apart. Except for a material swap in 1963 to the shiny, hard ABS plastic still used today, the basic bricks have never changed. But almost everything else has, starting with the introduction of the preschool-focused Duplo in 1969 and minifigures in 1978. The best way to get a sense of the variety of the current Lego portfolio—which includes approximately 3 000 unique elements in more than 50 colour options—is to see them all in one place. Innovation House, an airy, open-atrium building (complete with an interior slide) where most of the designers work, has a public-library–size room where designers can grab any element they need, such as 2x4s in every colour and hundreds of tiny Darth Vader heads. If a project requires a piece that doesn’t currently exist, a prototyping workshop can whip it up. (Future Lab head Holm remembers having to hand-draw schematics and send them off for fabrication. Now the process happens at the push of a button.) New elements aren’t added to the portfolio lightly, though, because it costs as much as R2.9 million to make a new mould, and all new elements must first be vetted by the Model Committee. The Future Lab’s headquarters are in an ageing two-storey yellow-brick building across the plaza, intentionally separate from the other design groups. “One thing I’ve learnt is how important it is to protect yourself as a team,” says Holm. “We have a tendency to work on experiences that are far away from what Lego does today. The perception can be like, ‘Come on, guys, that can never work.’ And it’s so easy to kill an idea.” Entrance requires several swipes of an ID card, and only the staff assigned to the group and a handful of the most senior management have access. It’s a clandestine place within a generally close-to-the-vest company, with one former designer comparing the Lab to working for the CIA. (Even staffers’ spouses have no idea what their partners spend their days working on.) On a grey afternoon, Future Lab’s head of

The Friends line “has been very, very successful,” CEO Knudstorp says. “It’s caught on with girls in markets from China to Germany to the US.”

JUNE 2015 FASTCOMPANY.CO.Z A 39

design Ditte Bruun Pedersen is sipping a cup of herbal tea in a common area in Innovation House. A trained architect with cropped, Tintin-ish blond hair, she ranges from analytical to enthusiastic—a very Lego personality. (Holm describes her as “positive, energetic and with a fantastic skill set—she knows beneath her skin what’s Lego and what’s not.”) Before she took on her current management role, Pedersen was the design lead on the Fusion project and knows as much about it as anyone in the company. It turns out there are many challenges raised by the prospect of physical-meets-digital play. For one, it’s not necessarily an intuitive experience for kids, so the flow between setting down the bricks and picking up the tablet (or vice versa) has to be carefully choreographed. It’s also crucial that neither the brick set nor the digital component feels tacked on, which turns out to be especially hard to get right. “We were very focused on making sure it feels balanced,” she says. “We had some experiences where we were like, ‘There’s something wrong here,’ and it turned out to be that the Lego had been diminished into a key that unlocked the digital play. Where’s the fun in that?” Pedersen recently returned from a trip to Boston, where she spent time with kids who had been living with Fusion for a while. (These children weren’t given the sets as part of a focus group—their parents actually went to a store, saw them on the shelf and decided to buy a set.) She’d observed some interesting things. For one, it oddly never occurred to anyone in Future Lab that the tablets kids would have access to may have covers on them—which, it turns out, changes the way a child is most likely to hold the device, making it hard to take the photo at the correct angle. It’s a major, frustrating impediment to flow. They’d also discovered that one set, Create & Race, wasn’t nearly as satisfying an experience as they had expected it to be. Almost all the fun turned out to be in the app, leaving parents wondering why they had shelled out for a box of bricks. By the following month, that set had been discontinued. Five years ago, Lego would never have considered a pilot product like Fusion, Gram says. There would have been too many concerns that a subpar product may tarnish the brand’s reputation for quality. (One example of how thoroughly quality is policed: Every brick is encoded with a tiny number so that if a defective one were to leave the plant, Lego could track it back to the machine that made it—one of thousands the company has around the world—to determine what went wrong.) Some within the company still bear scars from pricey learning experiences including Lego Universe, a failed World of Warcraft clone that was discontinued in 2012, a little more than a year after its introduction. But that’s also one of the reasons for creating a division like Future Lab, which lives inside of a metaphorical walled garden— where mistakes can be made relatively cheaply and lots can be learnt. “It’s led us to some extremely interesting concepts, even though 90% or more have never launched,” says Knudstorp. “But when you do such an exploration, you become a lot more clever about everything— from different business models to ways of developing a meaningful play experience. And you become wiser about the things you actually do launch.” Back in Spain, Future Lab’s whiz kids have been divided into eight teams for the hackathon. The bulk of the group is Danish and American—Lego’s official work language is English—but employees also hail from Chile, India, the United Kingdom, Thailand and elsewhere. Almost all are young, at least slightly nerdy, and in possession of an advanced degree in design, technology or business management. Holm, who joined Lego in his early twenties as a model builder without any real work experience (and went on to create some of the company’s biggest hits including the early-2000s craze, Bionicle), admits he probably wouldn’t be qualified for a design job in Future

40 FASTCOMPANY.CO.Z A JUNE 2015

Lab now. “The technical requirements have changed so much,” he says. “There isn’t as much place for what in Danish we call ole opfinder.” He searches for the word in English, and sounds a little wistful when he finds it. “You’d probably say ‘inventors’.” At their disposal are bins of Lego bricks, laptops loaded with animation software, a preschool’s worth of arts-and-crafts supplies, pro-quality digital cameras and, for energy, endless plates of gummy sweets and other sugary snacks. (A real treat, because sugar is banned on the Lego campus, except in coffee.) An inspiration wall features long shelves loaded with hot new gadgets and competitors’ products including Oculus Rift virtual-reality gear and a tablet accessory they admire so much that they ask for it not to be mentioned. “It’s a small startup and things would go crazy for them,” says Gram. When the teams present their ideas to leadership the following day, they are strikingly polished. They range from way cooler Fusionish toys to Internet-of-Things–style experiences; a couple feel like they could go directly into development. Which they might well have by now, joining at least four projects that are currently making their way through various parts of the Future Lab’s system. In February this year, the Future Lab brought out a second product: Portal Racers, a free, entirely digital game with a hovercraft theme, designed to work with a new 3D laptop camera from Intel called RealSense (which the processor giant started rolling out on new computers in January). The camera, which can track users’ body movements, allows for new Kinect-like ways of interacting with a computer, which the game harnesses. The original idea was to have kids build their own hovercrafts out of bricks and scan them into the game, Fusion-style, but unless Portal Racers somehow becomes a huge success, Gram says it will remain a digital-only experience. And while it certainly looks fun in the video they have of kids testing it, it seems to be as much about Future Lab getting to understand a new technology as about creating an awesome game for children. Which will be increasingly valuable information. During one of the final presentations in Palamós, a young designer mentions that no matter how well Lego sets are selling, their research shows that kids are spending less and less time playing with them every year, that other pleasures are pulling them away. Gram is sure that’s one Future Lab message the rest of the company has heard loud and clear: Experimentation “is something we can’t afford not to do”. loop@fastcompany.com

YOUR BRILLIANCE

CAN MAKE A DIFFERENCE ÂŠ 2015 CMO Council and BPI Network

This private sector initiative brings together Innovators, Technologists, Researchers, and Entrepreneurs in a global innovation ecosystem. The goal is to crowdsource top technologies that could be leveraged and scaled to tackle the daily challenges of impoverished and under-serviced people around the globe. Our ideation platform, powered by IdeaScale, acts as a tool to confront the many challenges UNICEF is looking to tackle by allowing community members to post ideas, interact with experts, and vote, thereby allowing the best ideas to bubble up to the top. Think your idea has what it takes? Join our community and see how Your Brilliance Can Make a Difference!

Connect at causetech.net

The biggest comebacks of the past 20 years In our fast-changing, startup-crazed economy, it can seem like only the newest companies have the agility to thrive. But entrepreneurship can propel businesses of all sizes and ages—look no further than Apple, which almost foundered in the late ’90s before Steve Jobs resurrected it to be the most valuable company in the world. So which other companies have had the biggest turnarounds, and who spearheaded them? Most importantly, what can we learn from these success stories? We know that Apple is one, now check out the rest of the list, including some surprises.

42 FASTCOMPANY.CO.Z A JUNE 2015

Illustrations by Rami Niemi

Lacoste Born on French tennis courts in the 1930s, this powerhouse of popped-collar polo shirts had faded by the early 1990s due to general alligator-logo fatigue. To get young people excited about the label, Lacoste stopped licensing its name, no longer sold clothes in outlets like Walmart, and hired a high-fashion creative director to reboot the brand. It also opened well-designed boutiques and targeted women with accessories like handbags. That effort led to newfound fashion-world cred and a massive sales boost.

OLD SPICE Once just a crusty old bottle in your dad’s bathroom, Old Spice—with Wieden+Kennedy—created a marketing juggernaut that propelled it to the top of its category. Some ads that made Old Spice new again:

“Painted Experience” (2007) The first hint of its bracing new direction was this spot with Bruce Campbell, who spouts incomprehensible advice in front of a seemingly endless painting.

“The Man Your Man Could Smell Like” (2010) The brand went viral with this ad, in which “Old Spice Guy” Isaiah Mustafa confidently purrs, “Hello, ladies.”

STARBUCKS

Sometimes too much success can mean trouble. In the 2000s, Starbucks overexpanded, diluting profits and damaging the brand (not every corner needs a Starbucks). By late 2008, net income had fallen dramatically, cutting the stock price in half. A look at how Starbucks CEO Howard Schultz turned things around: “Internet Responses” (2010) A triumph of real-time marketing in which people tweeted questions to Mustafa, who then went on a two-day YouTube answer extravaganza.

1. Cut the losses Schultz decided to shut down 900 underperforming stores, which reduced staffing and leasing costs. That also allowed him to invest more in the Starbucks outlets that had been working the best.

2. Fix the experience In 2008, Schultz closed all 7 100 US Starbucks stores for three hours to retrain baristas in the art of pulling espresso. He did away with automatic machines and introduced a retooled house coffee, Pike Place.

3. Be more welcoming Encouraging customers to take a seat, Schultz introduced free Wi-Fi at all Starbucks locations in 2010. In 2014, stores began upgrades to wireless Powermat charging stations for mobile devices. No more plug hunting!

“Odour Blockers” (2010) This bonkers clip, directed by Tim Heidecker and Eric Wareheim, sparked a long-running series of popular, completely over-the-top ads.

JUNE 2015 FASTCOMPANY.CO.Z A 43

Disney Animation Disney may be the best-known name in children’s entertainment, but its once-revered animation division began the 21st century in a major slump. After ’90s successes like The Lion King, the studio started churning out duds such as Hercules and Fantasia 2000. The result was a major downsizing in the early 2000s. But after Disney acquired Pixar in 2006, and Ed Catmull and John Lasseter took charge, the studio roared back with hits like Tangled and last year’s worlddominating Frozen.

CBS With a prime-time lineup full of snoozy grandparent bait like Murder, She Wrote and Dr. Quinn, Medicine Woman, the Tiffany Network sank to last place in the mid-1990s. That changed after CBS hired Leslie Moonves away from Warner Bros. TV, where he’d green-lit such shows as the zeitgeist-defining Friends. The Moonves era has produced a slew of huge hits—CSI, Survivor, Two and a Half Men, The Big Bang Theory—and CBS is now the nation’s mostwatched network.

Burberry Marvel Nintendo Remember the GameCube? Nintendo dominated the video-game world in the ’80s and ’90s with products like the Game Boy, but in the early 2000s Sony and Microsoft launched the PS2 and Xbox, and Nintendo’s response— an underpowered purple box that screamed ‘me-too product’—was a flop. Then Nintendo embraced its individuality with the DS, DS Lite and Wii, each of which would go on to sell around 100 million units worldwide.

General Motors Once the world’s most revered automaker, GM faced disaster in the late 2000s when it filed for bankruptcy and laid off tens of thousands of workers. Which makes it all the more extraordinary that just a year after the US federal government’s bailout plan earned it the sarcastic nickname “Government Motors”, the company roared back to profitability. After trimming costs and killing its struggling Pontiac, Saturn and Hummer divisions, GM went public again—raising roughly R237 billion. By the end of 2013, the government had sold off the last of its GM shares, capping a remarkable turnaround that saved an estimated 1.2 million jobs.

44 FASTCOMPANY.CO.Z A JUNE 2015

As the home of SpiderMan, Captain America and other iconic characters, Marvel has long been the comic-book world’s biggest player. But in the mid-1990s, the comics market crashed, Marvel went broke, and there was no superpower strong enough to stave off bankruptcy. But fear not! After restructuring, our hero changed its approach, focusing on movies rather than paper and ink. Today, Iron Man, the Avengers, Spider-Man and X-Men are all billiondollar franchises, and the company’s master plan—to connect many of its characters in a single cinematic universe—has turned it into one of pop culture’s most powerful brands.

Nobody expected the fusty Burberry to survive the storms of the modern fashion marketplace. Credit two American executives with reviving the British brand: Rose Marie Bravo and Angela Ahrendts (who now runs Apple’s retail division). As CEO from 1997 to 2005, Bravo brought in designer Christopher Bailey. He and Bravo’s successor, Ahrendts, took the turnaround from there, deftly blending updates of the old (that traditional trench coat, that familiar check) with an embrace of the new (social media, aggressive China strategy). That led to an unprecedented resurrection, record financial results, and acclaim for a fashion house that’s once again a luxury trendsetter.

Lego

CONVERSE It ruled the athletic market from its founding at the beginning of the 20th century until the 1970s, but then Nike and Adidas muscled their way in and Converse faded, filing for bankruptcy in 2001. How it rebounded:

2003: Nike buys Converse and

implements a counterintuitive plan—Make the brand less about sports and more about style.

2005: The shoe company expands

a previous partnership with John Varvatos to create a clothing line, capitalising on Converse’s association with cool musicians.

2011: Converse builds on its new reputation as a fashion and lifestyle brand with hip initiatives such as Rubber Tracks, a recording studio for emerging artists in Brooklyn.

2014: The company sues 32

competitors, including Ralph Lauren, for allegedly producing knock-offs. Annual revenues hit around R20 billion, up from R2.4 billion in 2003.

“Everything is awesome?” Not for the toymaker in the 1990s, when Lego was suffering due to the rise of video games and other competition. In 1998, the company lost money for the first time. Then Jørgen Vig Knudstorp stepped in as CEO in 2004, and things started to snap into place. Knudstorp cut costs and introduced soon-to-bepopular Lego lines like Ninjago. It worked: By 2013, Lego was the world’s most profitable toymaker. (See article on page 32.)

Netflix

Bacon

The announcement went out in July 2011: “We will no longer offer a plan that includes both unlimited streaming and DVDs by mail.” Subscribers would have to join two separate services—one of them ludicrously dubbed Qwikster—and pay $16 (about R110 at the time) a month instead of $10 (R68). The ensuing backlash and exodus stunned investors; more than 800 000 customers fled Netflix in a single quarter, sending its stock plunging from $300 (R2 050) a share to around $65 (R450) by year’s end. Netflix quickly scrapped Qwikster and apologised, but the company only truly recovered from the gaffe with original series such as House of Cards, which launched in 2013. Soon profit was skyrocketing, stock hit $400 (then R3 540) per share, and Amazon and Hulu were working furiously to catch up.

With foodies now drooling over all manner of curedpork products, it’s easy to forget that those greasy strips used to just be something you ate with your eggs. Or maybe not even that: In the ’80s, animal-fat phobia ate into sales by as much as 40%. But by the early 2000s, bacon had its sizzle back. Celebrity chefs championed it as the ultimate flavour booster, and the low-carb-diet fad made it actually somehow seem kind of healthy. Bacon mania ensued, showing up everywhere from burger spots to bars (bacon vodka, anyone?). That’s part of the reason pork sales in the foodservice industry outpaced all other meats between 2001 and 2013, and sales were up another 11% in 2014—making bacon a R66-billion business in that year.

Lower Manhattan The 9/11 attacks had a profound economic impact on New York, but by the time One World Trade Center opened in late 2014, the area was once again bustling. More than 400 companies, big and small, have relocated to lower Manhattan since 2004. Combine that with a boom in tourism and it’s no wonder luxury brands such as Saks Fifth Avenue, Tiffany & Co. and Hermès are flocking to the area.

Contributors: Jeff Beer, Joe Berkowitz, John Brownlee, Austin Carr, Jeff Chu, Jason Feifer, Jillian Goodman, JJ McCorvey, Evie Nagy, Nikita Richardson, Danielle Sacks, Lauren Schwartzberg, Mark Wilson

JUNE 2015 FASTCOMPANY.CO.Z A 45

Second time around FO R T H E S E S O U T H A FR I C A N CO M PA N I E S , I T TO O K A CH A N G E I N LE A D ER S H I P, S T R AT EG Y O R FI N A N CI A L M A N AG EM EN T— O R A PH O N E C A LL FR O M N EL S O N M A N D EL A—TO S P U R A T R A N S FO R M AT I O N

By Chris Waldburger

Failure is more revealing of character than success. Some have even said a person only becomes interesting once he or she has failed—because it is only then that they have attempted to surpass themselves. In a modern economy, failure—or what Austrian-American economist Joseph Schumpeter would, somewhat dubiously, term “creative destruction”—has become part and parcel of a dangerous boom-andbust cycle. In the world of globalised capitalism, it would appear failure is simply a part of

46 FASTCOMPANY.CO.Z A JUNE 2015

competition, an inevitability; something to be expected. Of course, the experience is far different for those whose jobs are on the line, as well as for those at the helm who find themselves leading organisations that, for whatever reason, no longer seem to be functioning. For such people, failure is not a feature of the system, but an enemy to be overcome, a season to be withstood. And so some have managed to hold out in the midst of winter for spring; some have managed to create art in an ambulance. In so doing, they have demonstrated the truth

of the famous words of Winston Churchill: “Success is not final; failure is not fatal—it is the courage to continue that counts.” Below we profile some of the great comeback artists of the South African business landscape. The diversity of the turnarounds listed, both in manner and in field, demonstrate the variety of ways in which a comeback is possible. For some, it involved a change of strategy; for most, hard work and fiscal prudence. Together, they provide inspiration that “failure is not fatal”.

JUNE 2015 FASTCOMPANY.CO.Z A 47

RAYMOND ACKERMAN Walk into any shopping centre in South Africa and you will feel the direct impact of Raymond Ackerman, former CEO of the Pick n Pay supermarket group who is credited as the man who changed the way South Africans shop. Pick n Pay is one of the country’s foremost fastmoving consumer goods retailers, operating throughout South Africa and in a number of other southern African nations. After graduating from the University of Cape Town, the 20-year-old Raymond became a management trainee at Ackermans, the clothing retailer founded by his father, Gus, just after World War 1. A rival outlet, the Greatermans group, acquired the company in 1940, but Raymond stayed on in a senior position. By 1950, he convinced the chairperson of Greatermans, Norman Herber, to follow the business trend at the time and open a groceries retailer, Checkers. Herber put Raymond in charge and soon there were over 85 profitable Checkers outlets across South Africa. He became MD at the age of 35. However, his eye for emerging business trends and his enthusiasm were met not with praise but with disdain, and in the same year he was fired for no reason—with his fourth child on the way. Determined not to be stymied by fate, Ackerman used his severance pay and a bank loan to purchase four stores in Cape Town, and the Pick ‘n Pay group was born. In its first trading year, the retailer achieved a profit of R310 000 on a turnover of R5 million. Later commenting on this, he noted it had taken “10% capital and 90% guts”. Under his leadership, Pick ‘n Pay eventually grew into one of Africa’s largest supermarket chains, revolutionising South Africa’s retail industry. As Ackerman cut prices on basic items to fight cartels, he also tried to expand into Australia in the 1980s, but was driven out by anti-apartheid activists; he has still not expanded outside of Africa. In 2007, the group underwent a complete rebranding—adopting the slogan, “Inspired by You”, and even dropping the apostrophe before the ‘n’. Raymond Ackerman stepped down as CEO in 2010, but still owns 53% of the stock. His son, Gareth, is now at the helm. “It’s really hard to hand over power and step back,” Ackerman, Sr said. “Now that my son, Gareth, is chairman … I have to learn to listen and resist the temptation to interfere—it’s not always easy… I offer my advice, and sometimes they listen and sometimes they don’t.”

48 FASTCOMPANY.CO.Z A JUNE 2015

Joe Public Gareth Leck and Pepe Marais founded Take-Away Advertising in the ‘90s, in the hope of bringing advertising and brand-making closer to the small business. Leaving their secure jobs, and setting out with very little in the way of material assets, the duo had nothing but their skills and a vision. Despite these humble beginnings, they grew steadily and successfully, helping clients such as Cape Union Mart and Kalahari find their distinctive identities. But as they developed as a company, they faced a difficult crossroads: What do you do when you outgrow your business model? The industry had shifted. Their core service of quick, cheap advertising work no longer applied in an age when companies now expected strategy management from agencies. It would no longer be feasible to provide ‘take-away’ advertising. The solution was to maintain their founding ethos, while shifting their business model—and thus Joe Public was formed. And this tough decision was rewarded, as Joe Public now manages advertising for big brands such as Clover, eBucks and Tracker. According to Marais, the key was that they changed their model, but not who they were. In short, the vehicle for the values changed, but not the values themselves. Because the market still required those values, they were able to retool successfully.

Alec Hogg Hogg rode the tiger of the dot-com revolution in South Africa, creating the financial media publisher, Moneyweb, in the ‘90s. Moneyweb would list on the Johannesburg Stock Exchange (JSE) in 1999. Media house, Caxton, would come to be the largest shareholder, and it would eventually force Hogg out of his own business. But he has no regrets about going public. Without the R10-million investment raised, the business would have been unsustainable, he concludes. However, a relatively small media company going public had its structural flaws: It would become impossible, in the midst of weakening share prices, for Hogg to make painful decisions in the short term to secure a long-term future for his business. After being edged out in 2012, Hogg had a year of gardening leave before he returned in 2013 as an independent broadcaster, keen to keep seeking a viable model for new media. He has since become the anchor of Power Lunch on CNBC Africa; and the founder of new media player, Biznews. com—which has since partnered with News24 to share online space and advertising strategy. In short, Hogg has demonstrated that despite being hit by the headwinds of the dot-com crash, one can navigate a path through changing conditions toward sustainability and relevance. In this regard, his guiding philosophy has gone back to basics: Every aspect of the business, or its expansion, must pay for itself. In this way, Hogg shows us how, in the rapidly democratising field of new media, expertise can still be leveraged profitably.

Virgin Active By now, the story of Virgin Active’s South African origins forms one part of the multifaceted Madiba legend. When LeisureNet’s aggressive overseas expansion left it short of the cash flow to maintain Health & Racquet domestically, Nelson Mandela intervened in a famous phone call to a showering Richard Branson, urging him to purchase the gym chain so as to save 4 000 South African jobs. As Branson would recount, who could resist a call like that? Sir Branson would rebrand the health clubs and, critically, change the previous long-term contracts to monthly-paid, annual ones. He also re-envisaged a gym as a kind of lifestyle centre, replete with Internet cafés and restaurants. While LeisureNet’s executives would ultimately do time for fraud, the Virgin Active brand has gone from strength to strength, with currently over a 100 clubs countrywide. “I believe that in the future, we will be able to enjoy healthy and fulfilling lifestyles while minimising the negative impact we have on the world,” said Branson. “Living sustainably doesn’t have to mean cutting back. And responsibility shouldn’t be dull or difficult. With Virgin, it doesn’t—and it isn’t.” In April this year, it was announced that South African investment house, Brait SE, would buy a controlling stake in Virgin for around R11.8 billion, with a view to expand the brand into Africa and Asia as the rising middle-class seeks a healthier lifestyle. From fraudulent bust to burgeoning global expansion, Virgin Active has shown what is possible. JUNE 2015 FASTCOMPANY.CO.Z A 49

Transnet For years after democracy came to South Africa, Transnet was seen as a drag on the economy: Mismanagement, ageing assets and rising costs gave the impression of an unwieldy parastatal monolith comprised of multiple unprofitable businesses. In particular, Transnet was often blamed for an elevated cost of doing business in South Africa, and thus for the failure of the economy to launch truly during the global commodities boom. While the group is not out of the woods yet, there is a palpable difference to its outlook. In 2004, the group recorded a R6.3-billion loss. After fours years of Maria Ramos at the helm, the group would record a profit of R4.3 billion. Not a bad turnaround. Ramos would lead the charge in rationalising the group, with a focus on its core businesses of freight transport, with sales of its share in the V&A Waterfront and the transfer of South African Airways to the government. While Ramos would leave for Absa in 2008, the group is now in the process of unleashing a massive recapitalisation plan to modernise freight in South Africa—a 20-year, R300-billion revitalisation process. As part of this course of action, in May Transnet CEO Siyabonga Gama signed a multibillionrand deal with the Development Bank of Southern Africa to provide funding and expertise as part of its private-sector participation programme. Transnet has its eye on major coal- and manganese-linked projects throughout South Africa, as well as the burgeoning project of creating a deepwater harbour at Durban’s old airport. Already new lines are being opened, customer relations are being improved, and there is hope South Africa may yet have a first-class modern freight infrastructure.

50 FASTCOMPANY.CO.Z A JUNE 2015

SEKUNJALO (NOW AEEI) Sekunjalo, a black-empowerment investment company founded by ‘Struggle doctor’ Iqbal Survé, was almost crippled soon after inception by its investment in LeisureNet. LeisureNet seems to have been a disruptive investment for many companies, and one that almost signalled the premature death of Sekunjalo as well. The recovery took years, but it has since become the stuff of legend. Harvard Business School even runs a case study on this comeback for its students. Now Sekunjalo is declaring massive profits and dividends for its shareholders as its stakes in fisheries, technology, health and media earn profits. Its listed company, now called African Equity Empowerment Investments (AEEI), showed profit increases of 40% in half-year reports earlier this year. Much of this success has been put down to cost-cutting, decentralisation of corporate structures, and a focus on business fundamentals. The group has been named one of the New Champions, or Community of Global Growth Companies, by the World Economic Forum and is now surely a permanent force to be reckoned with, both on a continental and global scale. This was confirmed in May when the group declared it had acquired over a quarter stake in the local operations of the Swedish civil and defence giant, Saab Grintek, and significant growth in its strategic investments in BTSA and Pioneer Foods. CEO of AEEI, Khalid Abdulla, said the deal is proof that AEEI has become the empowerment partner of choice for large multinationals. “This additional acquisition is an important breakthrough for both AEEI and Saab for its growth plans within South Africa, Africa and abroad—by adding value, creating jobs, alleviating poverty and finding solutions in the global market.”

Super Group

Nonkululeko Nyembezi-Heita

In early 2009, it appeared the 2008 recession was about to claim a big scalp in South Africa. Supply chain and freight management monolith, Super Group, was on the ropes, having recorded a loss of over R1 billion. There were whispers of a takeover, and soon founder and CEO, dentist-by-trade Larry Lipschitz, was ousted. Super Group was badly in debt, and shareholder value had plummeted. What had gone so terribly wrong? While the group blamed the recession at the time, replacement CEO Peter Mountford asserts there were some poor business decisions made, such as expansion into non-core businesses beyond expertise of management, as well as a toxic trucking deal with an Angolan company, which saw the company carrying the can for a R200-million deal. The lack of prudence was mystifying. Mountford, a former Super Group manager who had since managed some of South African Breweries’s peripheral brands, did what needs to be done in winter—pruning. With backing from institutional investors, the group slowly got back on its feet and traded its way out of trouble. Mountford scaled back on the company’s operations, cut costs, and managed to return a profit within two years. He puts the success down to simple logic and common sense. While Super Group continues to face challenges (one of them high tolling on the roads), sober and thoughtful leadership has put the company on a secure footing to meet and surpass those challenges for years ahead.

Nonkuleleko Nyembezi-Heita is considered to be among the most powerful women in the world. From 2008 to 2013, she was CEO of the South African subsidiary of ArcelorMittal, the world’s biggest steelmaker owned by the Mittal family of India. Nyembezi-Heita was born in Pietermaritzburg and grew up in Clermont, a township near Durban. She excelled at school and was awarded a prestigious scholarship from Anglo American, which allowed her to study a BSc in Electrical Engineering at the University of Manchester Institute of Science and Technology in the United Kingdom. She earned her master’s degree at the California Institute of Technology in the United States, where she was valedictorian. She began her career in 1984 as an engineer with IBM in the US and South Africa. And IBM is credited for grooming her for leadership. She headed its Windhoek division until 1998, when she became CEO of Alliance Capital Management LP (now AllianceBernstein). She then joined Vodacom as head of its mergers and acquisition division. During Nyembezi-Heita’s time at ArcelorMittal SA, the economic situation changed drastically as the recession hit. The construction sector was particularly affected by the economic downturn and bought less steel, so she had to steer her firm through tough times. She faced these challenges with characteristic determination, and a thorough cost-cutting review. She emphasised the need for the company to expand on its wider obligations in environmental, social responsibility and health arenas. Nyembezi-Heita was the 2011 winner of the Wits Business School Management Excellence Award. She stepped down as CEO to become chairperson-designate of the Johannesburg Stock Exchange from March 2014.

Michelle Meyjes Michelle Meyjes’s role in the commercial media industry is impossible to overlook. She is the CEO of the MEC Group, a large planning and buying agency; and South African chair of GroupM, the biggest media investment company in the world. Meyjes is nothing if not driven. She says to succeed as a woman in the media industry, “you have to have nerves of steel and be made of metal”, and willing to make sacrifices. Her road to success was paved with “bloody hard work”. She enrolled for a BCom, but dropped out in her second year to take a job in promotions with Republican Press (now Caxton). Fifteen years later, she left the marketing industry and worked in fashion and electronics. She was the marketing director of Panasonic Consumer and the first woman on its board. Meyjes left in 1993 to start her own specialist media company, Media by Storm, with Erna Storm. At that stage, media agencies were moving away from being creative agencies to being specialists—a major shift in the media world. She told The Media magazine in 2013, “It was damn hard, but a lot of fun. Our partnership was very much like flying a kite: Erna would be flying into the clouds and I would be the one pulling the string and taking control.” In 1999, their company was bought by the British WPP Group and rebranded in 2003 as The Mediaedge which, together with integrated channel strategy agency, Nota Bene, now forms part of the multibillion-rand business, MEC. During the global economic crisis of 2007– 2008, when other businesses were hiring and firing, Meyjes was able to retain all her staff, billings grew by 2%, and the client base grew significantly—with big names such as Chrysler, Michelin Tyres and Cape Union Mart coming on board. Meyjes says many youngsters coming into the media-agency business do not understand the extent to which hard work forms the basis for success. “Take advantage of the learning as much as possible and, in the process, build depth. Those with depth will rise quickly. Understand, too, that the converged media is the new imperative. So make sure your learning encompasses this landscape.” If she could change one thing in the industry, it would be the commoditisation of business— which, she told The Media, had a major effect on investment opportunities.

JUNE 2015 FASTCOMPANY.CO.Z A 51

MY WAY Lean on me Thanks to the investment by Siya Beyile’s business partner Sylvia Schutte in 2014, The Threaded Man is now Africa’s largest men’s fashion and lifestyle portal.

Fashion forward HOW SIYA BEYILE TR ANSFORMED THE THREADED MAN FROM A BLOG INTO A BR AND AND BUSINESS

Interview by Evans Manyonga

At just 21 years old, Siya Beyile is the creative director and co-founder of The Threaded Man, Africa’s largest men’s fashion and lifestyle portal. He began it as a blog while he was still a student, and through working in the fashion industry realised The Threaded Man could grow to feed the men’s fashion market in South Africa and the continent as a whole— it is an underserviced industry, particularly for the consumer. Beyile talked to Fast Company SA about his venture and his background in fashion. Fast Company SA: Briefly describe how you entrenched yourself in your line of business. Siya Beyile: In 2014, my business partner and mentor Sylvia Schutte

Why did you choose your specific industry? I don’t think I chose this industry; it actually chose me. From a very young age, I was intrigued by people’s buying patterns, why they wore what they did, and how people formed their own identities through their clothing. Also being Xhosa, where dress is a huge part of my culture, played a major role. Why were further studies important to you? I studied because I wanted to become an expert in my industry and to make my business a reality. I studied fashion at LISOF, majoring in Trends and Design, but I dropped out after a year due to the expenses. However, I didn’t see myself in any other industry, which forced me

“…I GREW INTO AN ENTREPRENEUR. NOW I KNOW HOW TO BALANCE MY CREATIVE SIDE WITH MY BUSINESS SIDE.” decided to invest in The Threaded Man and helped me turn it into a brand and business. Now The Threaded Man gives everyday men style, grooming and living advice while introducing them to the latest trends and movements in the menswear and lifestyle market. We now sit in a position where we work and collaborate with brands in order to communicate with our audience. On the back end, we are an agency offering a wide range of services from styling and content production to creative direction and consulting for brands.

to seek other ways to be educated. So I interned and worked for various companies including Dion Chang of Flux Trends, African Fashion International and Stratitude, an integrated marketing firm. Even now that I run The Threaded Man, I still study in order to continue perfecting my craft and to be the best. How has your line of business unlocked your creativity? How do you keep the creative juices flowing? My industry is all about creativity but, due to the nature of my business,

I always have to find new ways to be creative because the online space moves at a rapid pace and brands come with unique proposals for us to work on. Through daily challenges and tasks, my creativity continues to be unlocked. I’m an obsessive consumer of culture, from music to politics. Fashion is affected by other industries, so it’s important for me to read and continue to research on a daily basis to know what’s going on. I consume a lot of music and movies—those really inspire me. Tell us more about the new portal you recently launched? As a startup company, it’s important to adapt to what the market wants. After relaunching as a portal last year, we decided to do a review to see if we were on track with what the market needed. After having focus groups with the team as well as some of our readers, we decided that changes had to be made and new elements needed to be added. Firstly, we looked at the content of the site. We simplified it into three new sections. The blog articles are easy to read and to the point. We research our topics and angles to really make the content useful and relevant to our followers. Secondly, we looked at the navigation: Within three clicks you should be able to find whatever you’re looking for. We introduced submenus and did a clean layout of the website to make it easier to scroll and read info. Thirdly, we are focusing on rewarding our followers by increasing special offers and competitions, as well as

introducing a new shop section where followers can now easily find and dress themselves in the looks we promote. The new site is aligned to our collaboration with top industry brands. Content, events, new products and advertising are all incorporated into the unique TTM style. It’s important that TTM is not seen as a promotional tool for brands—we will always review products, decide on their relevance to our followers, and then curate the content in the unique TTM style. We know our followers and know what they want! Would you describe yourself as a career entrepreneur? Now, yes, definitely. When I started, I didn’t realise the business potential behind what I was doing, as no one in South Africa was doing it or had done it—but through the mentorship from my business partner, I grew into an entrepreneur. Now I know how to balance my creative side with my business side. Your advice to other young entrepreneurs? Don’t aim to make money—aim to build wealth. Money comes and goes, but wealth can last centuries. This requires you to realise that a company takes years to build; you must always look at what you are working toward and align your short-term goals with that. What are your thoughts on collaboration? Collaboration is so important; part of our growth is due to collaboration. In South Africa and Africa, we need to collaborate more in order to grow the

industry. As The Threaded Man, we collaborate with a wide range of people and brands—from Nomuzi Mabena, a TV personality, to Jenevieve Lyons, a local designer. Through collaboration, you can grow each other’s brands. What have you done your way, and how has it contributed to shaping who you are? Even though it was not by my own doing, dropping out of varsity was a huge step for me because I didn’t know how I would create credibility and a brand without completing my studies. This forced to me to find an unconventional way of learning, which taught me that today there are many ways you can make your dreams a reality. What does the future hold for you and The Threaded Man? Taking over Africa! (laughs) On a serious note, I want to continue growing The Threaded Man and branch into different African countries. We are also working at growing the African menswear market through our work with SA Menswear Week and various local designers. The goal is to take The Threaded Man and grow it into an integrated fashion and lifestyle business. Favourite quote? “God is greater than the highs and lows.”—Nosisa Beyile, my mother Favourite book? I have two: F. Scott Fitzgerald’s The Great Gatsby and Zero to One by Peter Thiel. Favourite pastime? Spending time with my gran in the Eastern Cape.

JUNE 2015 FASTCOMPANY.CO.Z A 53

LEADING EDGE A better branch

Clearing the air KL AU S L ACKNER KN OW S H OW TO PU LL C A R BO N FRO M THE ATM O SPHER E. IF HE C A N D O IT O N THE CHE A P, HE M AY H AV E THE S O LU TI O N TO GLO B A L WA R MIN G

By Jon Gertner

Photograph by Celine Grouard

The first thing you notice about Klaus Lackner’s new laboratory at Arizona State University (ASU) is how it’s littered with thin, white pieces of plastic. The stuff is everywhere—in large sheets crumpled on counters; in small strips stacked on lab benches; and in shreds attached to stiff wires, so as to resemble the boughs of an artificial Christmas tree. “Here, feel this,” says Lackner’s research partner Allen Wright, holding out a fresh sheet. “It’s almost like leather.” He’s right, but it’s an odd, stiff, pale sort of leather—and, anyway, what is it good for? You wouldn’t make a baseball glove out of it. The three of us are gathered around a sealed glass chamber, about the size of a large terrarium, in the experimental hub of Lackner’s new endeavour: the Center for Negative Carbon Emissions. Inside the clear container is a large, leafy plant and another sample of his ubiquitous white plastic, this time formatted into what resembles a square foot of white shag carpet. A laptop nearby gets readings from a sensor that measures the CO2 inside the tank. Earlier in the day, this piece of shaggy plastic—a commercially available “anionic exchange” resin that Lackner and Wright discovered a few years ago—was left out on the lab bench, where it soaked up atmospheric CO2 from the circulating air. Here in the sealed glass box, it responds to a humid environment by giving off that CO2 and soaking 54 FASTCOMPANY.CO.Z A JUNE 2015

Sprigs like this, made of a special resin, soak up carbon dioxide from the atmosphere.

up atmospheric moisture in its place. “You can see this climbing,” says Lackner, pointing to a graph on the laptop tracing a steeply ascending line of the parts per million (ppm) of CO2 molecules in the tank. The takeaway is clear: The white resin material is very good at naturally absorbing CO2 in the air. Just as important, it is very good at spewing it out when you put it in a moist environment or give it a quick rinse of water. You could even collect and bottle the CO2 gas that gets released. The whole cycle could be repeated, ad infinitum: absorb CO2, rinse it off, collect it; absorb, rinse, collect. There may be only a few hundred people on the planet who are actively involved in what is called direct air capture, or air capture for short. Those working in the field (and its benefactors, such as Bill Gates and Edgar Bronfman, Jr) seem convinced that a broad deployment of air-capture devices is necessary to limit the impacts of increasing levels of atmospheric CO2, which include a warmer climate, rising sea levels, lingering droughts and threats to agriculture and ocean fisheries. Air-capture entrepreneurs do champion the use of clean-energy technologies such as wind and solar power, and efforts to capture smokestack emissions of gas and coal power plants. But they tend to believe that such technologies alone cannot get the world to a necessary level of zerocarbon emissions. Actually, we’ve been relying for ages on machines that pull CO2 from the atmosphere, acting as a counterbalance to what we’ve spewed from cars, airplanes and power plants. We call these machines trees. And we’ve long had so-called scrubbers to make life bearable on submarines and spaceships by chemically removing excess CO2 in the air. What’s interesting about Lackner and Wright’s technology, however, is that the plastic resin they discovered may be able to absorb enormous quantities of CO2 and help us sequester it underground—affordably. By Lackner’s calculation, each air-capture device would be about 1 000 times more effective than a single tree. “There’s no question that it works,” he says. “Whether you can do it practically remains to be seen and proved.” At the moment, at least three fledgling companies (Global Thermostat in Menlo Park, California; Carbon Engineering in Calgary, Alberta; and Climeworks in Zurich) aim to enter the commercial space within the next 12 to 24 months. Lackner is the pioneer and giant in this field: Wally Broecker, a Columbia scientist who coined the term “global warming” (in a 1975 article in the journal Science), calls Lackner “the most brilliant person I’ve ever dealt with”. But for now, Lackner will focus on creating a think tank that proves to the public the viability of air capture and helps jump-start a large commercial industry. From 2004 to 2008, Lackner and Wright used startup funding to create an air-capture prototype, but in the

WE’VE BEEN RELYING FOR AGES ON MACHINES THAT PULL CO 2 FROM THE ATMOSPHERE . WE CALL THEM TREES.

Photographs by Jonathan Snyder

Klaus Lackner The Arizona State scientist has pursued his dream for years, despite critics who say he’ll never be able to make air capture affordable.

recession they failed to secure more venture capital. Lackner’s ideas might have been premature, back then. It seemed possible that the carbon problem would be addressed by international accords and the start of a rapid transition to clean energy. In the time since, there has been incremental progress on emissions (such as a recent deal between the United States and China), but CO2 levels in the atmosphere continue to climb. When Lackner started, global CO2 emissions were rising at 1.5ppm a year. “Now it’s well above 2ppm per year,” he says. “And it’s still accelerating. That clearly is not

JUNE 2015 FASTCOMPANY.CO.Z A 55

Leading Edge

sustainable.” To arrest the worst impacts of climate change, Lackner points out, we’ll eventually have to go to zero emissions—or even figure out a way to go negative, so as to get the atmospheric carbon to, say, 350ppm. At the moment, levels are at 401ppm. The last time CO2 concentrations reached this mark, about 3 million years ago, oceans were at least 10 metres higher and camels lived above the Arctic Circle. An air-capture device faces several notable challenges: First, there’s the architecture. Lackner’s design has changed many times over the years, although right now he prefers to form the white resin into a honeycomb pattern—imagine thousands of straws stacked atop each other in a circular frame, with the desert wind blowing through the holes. When I visited ASU, the two men showed me a small prototype of their device in the lab. In size and design, it looks like a collapsible window shade sealed in a box of clear acrylic. In several months, the design will be built to a larger scale, and in a year or two, predicts Lackner, there will be several full-size devices on the campus at ASU, collecting carbon as well as data. “You cannot drive down the price unless you actually do it,” Lackner notes. “I want to do it incrementally. Start small and be horribly inefficient. Admit it’s expensive and say, ‘This is our starting point.’ ” The design is just one hurdle: You also need a plan for what to do with the collected CO2. The device itself will have to automatically move into—and out of—an enclosed environment once or twice a day (think of a garage door being raised and then lowered) so that CO2 can be rinsed out and trapped. Gauging potential market demand for the captured carbon is tricky. Greenhouses buy CO2 to boost plant growth; companies looking at the cultivation of algae for biofuels may use it; and CO2 can perhaps be used as a crucial ingredient to make synthetic fuels. The latter idea would be an attempt to ‘close’ the carbon cycle: you burn synth-fuel in your car or airplane; the CO2 is emitted into the atmosphere and ultimately collected; and it is then reformatted into synth-fuel. The process repeats itself. But the most likely fate for all the CO2 is to be pumped deep underground. That way, we can forget about it for 1 000 years and avoid the potential catastrophes of a much warmer climate. Lackner, in fact, doesn’t believe air capture will be a viable business until the world’s governments put a price or a penalty on carbon extraction. His vision is this: If a fossil-fuel company wants to take a tonne of carbon out of the ground in the form of natural gas or oil, a surcharge on their product would have to pay for a tonne to be collected, via air capture, and then sequestered back underground. In other words, those companies would have to pay to play. We seem miles away, as a society, from supporting such a carbon policy. That doesn’t worry Lackner. “Technologies simmer along before they are feasible,” he tells me. “That simmer can be short or long, but then they get traction, and from there to being huge is a couple of decades.” He goes through a litany of

56 FASTCOMPANY.CO.Z A JUNE 2015

“ TECHNOLOGIES SIMMER BEFORE THEY ARE FEASIBLE ,” SAYS LACKNER . “ IT TAKES A COUPLE DECADES ” TO GET TRACTION .

examples, each proving his case: cars, jets, television, personal computers, laptops, the Internet. “It takes a couple decades,” he repeats. Of course, getting feasible means getting affordable— something that a panel of eminent American scientists and engineers believed was highly unlikely for aircapture machines. They concluded that carbon may be captured and stored for anywhere from R7 000 per tonne to upward of R12 000 per tonne. Lackner has rankled some colleagues with his steadfast belief that air capture can be done more cheaply. “I have been on record as saying that ultimately I think you can do this for $30 [around R350] per tonne,” Lackner says. He offers more examples, this time of fundamental products whose prices have plummeted over a reasonable time: solar power, artificial light, wind power. Talking with Lackner tends to have a distorting effect; what at first seems highly unrealistic is, by his logic, perfectly reasonable, and he tends not to stop talking until he makes his case, even if it takes hours. Think of an air-capture device as an automobile, he tells me. “It weighs about as much as a car; its complexity is not much more than a car. If you had 100 million of them you would, it turns out, collect 36 gigatonnes”—that is, 36 billion tonnes—“of CO2 a year, so that puts you right at the scale of our current emissions. We would have zero emissions if we could do that.” Lackner estimates the air-capture industry would have to build 10 million units per year to maintain those levels. At the moment, the global auto industry produces about 85 million vehicles annually. And all told, there are now about 1 billion cars in the world. “So we are large on the scale of industries, but we are not prohibitively large,” he insists. Besides, he adds, “we are large because we are solving a large problem. Right?”

Prototypes Air capture is such an experimental technology that Lackner has tried myriad designs, such as this roll and swatch, with his magic white plastic.

BE PART OF THE MOVEMENT! If you’re still not following Fast Company SA, you’re losing out! Now is the time to find us, follow us, tweet us and tag us to keep up to date with our latest news and happenings. Join the Fast Company SA movement on Twitter, Facebook, Instagram and Pinterest. We want to hear from you, see pictures of you with the magazine, and find out what your favourite articles are. Our new website will be up and running soon, and the digital version of Fast Company SA is already available for Android and Apple. This is just the beginning, so keep in contact and watch this space—there may be secrets, surprises and prizes!

WHAT AMAZON IS REALLY SELLING INSIDE LEGO’S FUTURE LAB NASA CHIEF SCIENTIST’S MARS MISSION

BIGGEST BUSINESS COMEBACKS Lessons from MARVEL,

STARBUCKS, NINTENDO, TRANSNET, JOE PUBLIC and others on overcoming troubled times to emerge stronger than ever

@fastcompanysa www.pinterest.com/fastcompanysa @fastcompanysa

TWEETS

SnowCon Strategy

Snowboarding by day, brainstorming by night

Threaded Man brand

Styling the everyday African male

THE REAL LEGACY OF

R35.00

JUNE 2015 FASTCOMPANY.CO.ZA

15008

9 772313 330006

STEVE JOBS

SUBSCRIBE TO FAST COMPANY SA FOR 1 YE AR AND SAVE R110!

Issue 6 2 Issue

South Africans making their mark abroad + Dropbox + JT Foxx + Björk + Lynette Hundermark

Get Fast Company South Africa now! The annual subscription is for 10 print issues of Fast Company SA magazine (April/May & Dec/Jan double up as one issue each). The cost of the subscription is R240 (including 14% VAT and postage) for 10 print issues. Full payment must be made before the subscription is valid. This offer is for South Africa ONLY. If you would like to subscribe, email Taryn Kershaw for more details: taryn@insightspublishing.co.za .

CAN DROPBOX DOMINATE DIGITAL DATA? / BJÖRK’S CASE AGAINST STREAMING

The Whole Is Greater Than The Sum Of Its Parts Take an executive education short course and go from good to great.

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 | execed@gsb.uct.ac.za or visit www.gsb.uct.ac.za/execed

Creativity meets sustainability

OurHood

The new way neighbours are connecting

Rise of the machines

Does artificial intelligence pose a genuine threat?

“If this comedy thing doesn’t work out, I’ve always got poverty to fall back on.”

MAY 2015 FASTCOMPANY.CO.ZA

15007

2015/03/12 2:05 PM

Design Indaba 2015

HOW TRE VOR NOA H, CH A RLIZE T HERON, FA N A MOKOEN A , NEILL BLOMK A MP A ND OT HERS A RE M A K ING IT BIG A BROA D

R35.00

MAY 2015

201769 Exec Ed Course Print Ad Fin.indd 1

SOUTH AFRICANS ON TOP OF THE WORLD

JT Foxx

Helping underdogs become millionaires

TRE VOR NOA H ,

Comedian and next host of Comedy Central’s The Daily Show

9 772313 330006

SPECIAL REPORT: Silicon Valley’s Race Problem

Issue 2

SECRETS OF THE MOST PRODUCTIVE PEOPLE Life-changing wisdom from CEOs, chefs, directors, surgeons, inventors, ELON MUSK & more R35.00

MARCH/APRIL 2015 FASTCOMPANY.CO.ZA

15006

RICHARD GRIFFIN

How he resurrected Madame Zingara

SUSAN LYNE

Leading AOL’s BBG Ventures

“If you’re at Tesla, you’re ... at the equivalent of Special Forces.”

ELON M U SK

9 772313 330006

CEO and CTO of SpaceX; chairperson of SolarCity; product architect and CEO of Tesla Motors

VIRTUAL WORK REALITY

Why more women are telecommuting

JUNE 2015 FASTCOMPANY.CO.Z A 57

THE BIG IDEA

In front of the camera

The man of many questions B RI A N GR A ZER I S O NE O F THE M O ST SU CCE S SFU L M OV IE PRO D U CER S E V ER . IN A NE W BO O K , HE E X PL A IN S WH Y THE RIGHT Q U ERY I S THE KE Y TO SU CCE S S

By Brian Grazer and Charles Fishman

58 FASTCOMPANY.CO.Z A JUNE 2015

I don’t like to boss people around. I don’t get motivated by telling people what to do; I don’t take any pleasure in it. So I manage with curiosity, by asking questions. In a typical day, I may have 50 conversations of some substance. But I so prefer hearing what other people have to say that I instinctively ask questions. If you’re listening to my side of a phone call, you may hear little but the occasional question. Questions are a great management tool. Asking questions elicits information, of course. Asking questions creates the space for people to raise issues they are worried about that a boss, or colleagues, may not know about. Asking questions lets people tell a different story than the one you’re expecting. Most important from my perspective, asking questions means people have to make their case for the way they want a decision to go.

Gallo images/Getty Images/ Douglas Gorenstein

Brian Grazer on The Tonight Show starring Jimmy Fallon in April 2015.

Gallo images/Getty Images/ Ullstein bild

The movie business is all about being able to ‘make your case’. With Splash, the first big movie I produced, about a mermaid of all things, I had to make my case hundreds of times over seven years. After 30 years of successfully making movies, that hasn’t changed. If you’re going to survive in Hollywood—and I think if you’re going to survive and thrive anywhere in business—you have to learn to ‘make the case’ for whatever you want to do. Making the case means answering the big questions: Why this project? Why now? Why with this group of talent? With this investment of money? Who is the audience? How will we capture that audience, that customer? And the biggest question of all: What’s the story? What’s this movie about? (Or, if you’re not in the entertainment business, what’s the story of this product? What’s this product about?) Making the case also means answering the detail questions: Why these songs in that order on the soundtrack? Why that supporting actress? Why that scene? None of these are yes-or-no questions. They are open-ended. They are questions where the answer can itself be a story, sometimes short, sometimes longer. Sometimes you need to ask questions that are even more open: What are you focused on? Why are you focused on that? What are you worried about? What’s your plan? Asking questions creates a lot more engagement in the people with whom you work. It’s subtle. Let’s say you have a movie that’s in trouble. You ask the executive responsible for moving that movie along, what her plan

is. You’re doing two things just by asking the question: You’re making it clear that she should have a plan, and you’re making it clear she is in charge of that plan. The question itself implies both the responsibility for the problem and the authority to come up with the solution. If you work with talented people who want to do the work they are doing, they’ll step up. It’s a simple quality of human nature that people prefer to choose to do things rather than be ordered to do them. In fact, as soon as you tell me I have to do something—give a speech, attend a banquet, go to Cannes—I immediately start looking for ways to avoid doing it. If you invite me to do something, I’m much more likely to want to do it. When you’re out on location, you can be spending around R3.6 million a day to make a movie. That’s R150 000 an hour, even while everyone is sleeping. When there’s trouble at R3.6 million a day, you want to find a way to convince your stars to help you. You want to draw them in, not order them around. Back in 1991, we were shooting the movie Far and Away. We had Tom Cruise as the lead. Tom was at the top of his career. He was only 29 years old, but he had already made Top Gun, The Color of Money, Rain Man and Born on the Fourth of July. Tom isn’t difficult to work with, but Far and Away was a challenging movie to get made. It was an old-fashioned epic, a story of two immigrants leaving Ireland for America at the turn of the last century. We shot in Ireland and the western United States. It got expensive, but it

Behind the camera Director Ron Howard, actor Russell Crowe, Brian Grazer and screenplay writer Akiva Goldsman on the set of A Beautiful Mind, 2001.

MAKING THE CASE MEANS ANSWERING THE BIG QUESTIONS : WHY THIS PROJECT? WHY NOW? WHAT ’S THE STORY?

JUNE 2015 FASTCOMPANY.CO.Z A 59

Publisher of Fast Company US Christine Osekoski, writer Charles Fishman, Brian Grazer, and editor & MD of Fast Company US Bob Safian at the Fast Company Grill at the South by Southwest festival held in March this year in Austin, Texas.

“ CAN YOU BE THE

TEAM LEADER WITH THE CAST AND CREW? ” GRAZER ASKED TOM CRUISE . “CAN YOU BE THE GUY TO SET THE EXAMPLE? “

wasn’t overtly commercial. When we figured out what it was going to cost, the studio told me to find ways of cutting the budget. I went to Tom on the set. I said, “Look, you’re not the producer of this movie. But we all want to make it, we all have this vision of a movie we’re doing as artists, a story we care about. It’s going to be expensive, but we can’t spend as much money as it looks like we’re going to. We need to hold the line.” I said, “Can you be the team leader here with the cast and crew? Can you be the guy to set the example?” He looked at me and said, “I’m 100% that guy!” He said, “When I have to go to the bathroom, I’m going to run to the trailer and run back to the set. I’m going to set the pace for excellence and respect.” And that’s exactly what he did. He led. He was motivated. And he motivated other people. I didn’t tell Tom what to do. I didn’t order everybody to work harder, to make do with less. I explained where we were. Tom appreciated that I came to him with a problem, that I treated him as an equal, that I treated him as part of the solution. I allowed Tom to be curious about both the problem and how to fix it. Asking for people’s help—rather than directing it—is almost always the smart way of doing things, regardless of the stakes. Questions can quietly transmit values more powerfully than a direct statement telling people what you want them to stand for. If I fly to Ireland from Los Angeles and start telling everybody that we need to save money, we need to film faster, cut effects, save costs on the catering—well, then I’m just the LA executive who flies in with the bad news and the marching orders. If I sit down quietly with Tom and ask, “Can you be the leader here?” it’s a moment packed with values. We care about this movie. We have to find a way of protecting the integrity of the story while living within a reasonable budget. I need help. And I have so much respect for Tom that I’m asking him to help me solve this problem, to help me manage the whole movie. This is a powerful message, packed into only six words— with a question mark at the end instead of a period.

60 FASTCOMPANY.CO.Z A JUNE 2015

Curiosity at work isn’t a matter of style. It’s much more powerful than that. If you’re the boss and you manage by asking questions, you’re laying the foundation for the culture of your company or your group. You’re letting people know that the boss is willing to listen. This isn’t about being ‘warm’ or ‘friendly’. It’s about understanding how complicated the modern business world is, how indispensable diversity of perspective is, and how hard creative work is. Here’s why it’s hard: because often, there is no right answer. That’s why asking questions at work, instead of giving orders, is so valuable. Because most modern problems— lowering someone’s cholesterol, getting passengers onto an aeroplane efficiently, or searching all of human knowledge—don’t have a right answer. They have all kinds of answers, many of them wonderful. To get at the possibilities, you have to find out what ideas and reactions are in other people’s minds. You have to ask them questions: How do you see this problem? What are we missing? Is there another way of tackling this? How would we solve this if we were the customer? Questions create both the authority in people to come up with ideas and take action, and the responsibility for moving things forward. Questions create the space for all kinds of ideas and the sparks to come up with those ideas. Most important, questions send a very clear message: We’re willing to listen, even to ideas or suggestions or problems we weren’t expecting. As valuable as questions are when you’re the boss, I think they are just as important in every other direction in the workplace. People should ask their bosses questions. I appreciate it when people ask me the same kind of open-ended questions I so often ask: What are you hoping for? What are you expecting? What’s the most important part of this for you? Those kinds of questions allow a boss to be clear about things the boss may think are clear, but which often aren’t clear at all. Indeed, people at all levels should ask each other questions. That helps break down the barriers between job functions and also helps puncture the idea that the job hierarchy determines who can have a good idea. I like when people at Imagine Entertainment [the film and television production company founded in 1986 by Grazer and director Ron Howard] ask me questions for many reasons, but here’s the simplest and most powerful reason: If they ask the question, then they almost always listen to the answer. People are more likely to consider a piece of advice, or a flat-out instruction, if they’ve asked for it in the first place. Imagine is hardly a perfect workplace. We have our share of dull meetings and unproductive brainstorming sessions. We miscommunicate, we misinterpret, we miss out on some opportunities, and we push forward some projects we should let go. But nobody is afraid to ask a question. Nobody is afraid to answer a question.

Gallo images/Getty Images/ Vivien Killilea

The Big Idea

Amazon wants to rule the world, but it may be doing too many things—to the disappointment of customers and shareholders alike. What is Amazon CEO Jeff Bezos’s real vision for his company’s future? By Austin Carr Photograph by Pari Dukovic

Under

Fire 62 FASTCOMPANY.CO.Z A JUNE 2015

Bezos is intensely focused on Amazonâ&#x20AC;&#x2122;s R&D division, Lab126.

PROP ST YLING: EDWARD SCOTT/ANY WAY REPS

“What the hell happened?”

64 FASTCOMPANY.CO.Z A JUNE 2015

It is a cold day at the end of last year in Midtown Manhattan, and Amazon CEO Jeff Bezos has barely taken his seat on stage when his interviewer throws out that brusque query. It’s the question on the lips of every one of the 400 attendees of this tech conference, but it’s still a jarring moment. Bezos tries to hem and haw his way out of the issue, but his interrogator, Business Insider editor-in-chief Henry Blodget, won’t let up, asking again: “So, Jeff, what happened with the Fire Phone?” Introduced with grand ambitions in June last year, the Fire Phone is widely seen as a fiasco. Originally priced at $199 (about R2 300) with contract, and intended as an iPhone competitor, it now sells for 99 cents, and Amazon has taken a R2.04billion write-down largely attributable to unsold Fire Phone inventory. Yet, Bezos finally answers the question with the kind of reasoning that investors, customers and pundits have come to expect from him: Amazon is going to pour more resources into its phone. Defending the Fire Phone as a “bold bet”, Bezos argues that it’s “going to take many iterations” and “some number of years” to get it right. In other words, just as it did when it expanded beyond books in PHOTOGRAPHS BY JASON PIETRA

the late 1990s, and when it introduced the Kindle and started its cloud-computing wing, Amazon Web Services (AWS), in the mid-2000s, Amazon is going to invest in its future— short-term shareholders be damned. It’s the kind of answer that has served Bezos well over the years, that has helped justify the fact that the company has produced so little profit even as it has grown into the behemoth of e-commerce. But lately it’s not an answer that Wall Street has liked. In October, Amazon shocked shareholders when it reported a R5.2-billion net loss for the quarter, its biggest in 14 years. Quarterly revenue hit R247.1 billion, but the company’s growth rate, once a bright spot for those leery of Amazon’s lacklustre profits, is slowing. Over the past five years, Amazon’s fourth-quarter growth rate has steadily declined, from 42% in 2009 to 20% in 2013—and the company was projecting between 7% to 18% for 2014. “For years, the story has been that Amazon isn’t profitable because it is growing so fast,” wrote hedge-fund manager David Einhorn, in a letter to his Greenlight Capital investors. “Now growth is slowing, but rather than unleashing higher profits, the slower growth is leading to even greater losses. One of the principal bullish assumptions supporting many bubble stocks is, ‘The company is growing too fast to be very profitable.’ We think Amazon is just one of many stocks for which this narrative will ultimately prove false.” Those are some seriously harsh words, especially toward an icon of the Internet age. But Bezos has made a habit of forcing naysayers like Einhorn to eat their words. Every time this sort of complaint has been raised about Amazon in the past—and this moment is hardly an aberration in Amazon’s history—the company has roared back to prove its doubters wrong. Dubbing Amazon just another “bubble stock” can seem short-sighted, even foolhardy. Betting against Bezos has never turned out well. Indeed, Amazon ended the fourth fiscal quarter of 2014 on a relatively better note, with a R2.5-billion net income, and 2015 first-quarter revenue of R272.6 billion—which caught analysts by surprise. Yet, is there something new going on with Amazon, something dangerous on a whole new level? Or is this the latest instalment in what Bezos has always been selling about his company:

JUNE 2015 FASTCOMPANY.CO.Z A 65

that it is so different in its outlook, its operations and its potential that it should be judged differently, too? The criticism this time goes beyond the fact that the CEO prefers to invest heavily in what may drive business tomorrow rather than reap profits today. This time, say the critics, Bezos has lost his focus. This time, they say, he is pursuing global domination at the expense of his historic drive to improve the customer experience. “Kindle, Prime, AWS—they made absolute sense with the assets Amazon had,” says Amazon analyst Scott Devitt of research firm, Stifel Financial. “But are they still doing things that have a high probability of success, a high long-term return of capital like the old days? That’s where there are more questions today than there have been in a while, where you start to scratch your head. Growth is slowing, and these other initiatives just aren’t taking off. As an investor you have to ask yourself, Is this company doing too many things?” Far from merely trying to dominate online retail, this is a business that now does grocery delivery in San Francisco and Los Angeles; that produces television shows starring John Goodman and Gael García Bernal; that counts NASA and Netflix as customers of Amazon Web Services; that acquired Twitch, a live-streaming service for video games, for around R11.9 billion; that has launched an all-out offensive against e-commerce rival, Alibaba, on its home turf in China; that offers its own branded line of eco-friendly nappies; and that launched a hotel-booking service, Amazon Destinations, in April. How do these increasingly fragmented parts of Amazon fit together? What is Bezos’s strategy? These are the questions that people are now flinging at a company famous for its laser-like focus and outrageous efficiency. Bezos has said his job is to encourage more “bold bets” and to embrace failure inside the company in pursuit of the big successes that “compensate for dozens and dozens of things that [don’t] work.” That drive and willingness to experiment has made Amazon a formidable competitor; Google chairperson Eric Schmidt, for one, has said he considers Amazon to be the search giant’s most dangerous rival. For Apple, too, its ambitions with e-commerce, iCloud, and now, even devices, all run headlong into Amazon’s initiatives. But will all of Bezos’s risk-taking ultimately pay off? “They make no money!” former Microsoft CEO Steve Ballmer exclaimed in a recent TV interview. “In my world, [that’s] not a real business. I get it if you don’t make money for two or three years, but Amazon is, what, 21 years old?” In many ways, the Fire Phone is the perfect symbol of these opposing perceptions of Amazon. It represents everything proponents love about the company—the wild experimentation, the appetite for risk-taking—as well as everything that critics now deride: its huge expenditures, its blithe embrace of an imagined future where the big bets pay off, and its inability to create anything with real style. Understanding Amazon’s journey to create a smartphone, and why it failed, is perhaps the best way to understand the company’s evolving mission and values as it struggles to unearth its next gusher of revenue. Because the Fire Phone, as with most big

innovations inside Amazon, came straight from Bezos’s brain. As one founding team leader of the project puts it, “This was Jeff’s baby.” Like every product created at Amazon, the Fire Phone began on a piece of paper. Or rather, several typed, single-spaced pieces of paper that contained a mock-up of a press release for the product that the company hoped to launch some day. Bezos requires employees to write these pretend press releases before work begins on a new initiative. The point is to help them refine their ideas and distil their goals with the customer in mind. The Fire Phone plan was particularly ambitious, insiders say, with a set of objectives that seemed unrealistic even then. The project, code-named “Tyto” for a genus of owl, got rolling in 2010, roughly around the time Apple launched the iPhone 4. There were cogent reasons for Amazon to want a phone of its own. As the world goes mobile, an Amazon phone would provide a more direct link to its users. Today, customers often come to Amazon via iPhones or Android devices. Not controlling the hardware can create problems. For instance, you can’t buy e-books through the Kindle app on your iPhone because Apple takes 30% of appdriven sales—a cut that would hurt Amazon’s already razor-thin margin. Bezos knew that any Amazon phone would be immediately greeted with one question: Why should anyone buy an Amazon device instead of an iPhone? That’s why his mandate to the team was simple and bold from the very start: Let’s wow customers with something big and distinctive.

Amazon Plugs In How the e-tailer’s hardware efforts stack up

Kindle Voyage (from around R4 000)

Fire HDX 8.9 (from around R5 000)

Fire TV (R1 999 from Takealot.com)

Like its predecessors, dating back to the original in 2007, Amazon’s newest Kindle is purely for reading. With its thin case, high-resolution screen and six-week battery, it’s the most refined e-reader ever built.

Amazon’s tablet strategy is simple: Sell ’em cheap and make money when owners buy content. The HDX 8.9 is particularly impressive, but Amazon’s Appstore isn’t nearly as stocked as the iOS App Store and Google Play.

A slick device, but way late to a category dominated by Roku and Apple TV. It lets you search by speaking, and is surprisingly serious about gaming. Still, it’s no match for Roku’s 1 800-channel content smorgasbord.

66 FASTCOMPANY.CO.Z A JUNE 2015

This wasn’t some vague guideline from an executive busy running other parts of the business; based on interviews with more than three dozen current and former employees, most of whom were deeply involved with the project, the CEO drove every aspect of the phone’s creation from the outset. (Amazon declined to make Bezos or other executives available for this story.) Bezos’s guiding principle for Amazon has always been to start with the needs and desires of the customer and work backward. But when it came to the Fire Phone, that customer apparently became Jeff Bezos. He envisioned a list of whiz-bang features, and the Tyto team started experimenting with a slew of promising technologies: near-field communication for contactless payments, hands-free interactions to allow users to navigate the interface through mid-air gestures, and a force-sensitive grip that could respond in different ways to various degrees of physical pressure. Perhaps most compelling was Dynamic Perspective, which uses cameras to track a user’s head and adjust the display to his or her vantage point, making the on-screen image appear three-dimensional. The Tyto project called heavily upon Lab126, Amazon’s research and development unit with offices in Sunnyvale, California and Cupertino—the latter just a short walk down the street from Apple headquarters. Lab126 is run by Gregg Zehr, a former Apple vice president with a mellow vibe who plays guitar and has a flair for classic style. “He’d wear a tweed jacket and a scarf at the lab, and it never looked weird,” an ex-colleague says.

Former Lab126 VP Mark Randall recalls, “When I walked into his house for the first time, I said, ‘Jesus Christ, Gregg, this looks like an Apple store.’ ” (Zehr declined to comment for this piece.) Inside Lab126’s industrial design studio, employees sit at tables dotted with Apple Cinema Display monitors and Dell laptops. Streamed in through a Sonos speaker, music fills the open space where the team brainstorms new ideas, reviews 3D models, and pins up mood boards on the wall. “It’s a fun, light-hearted and collaborative group,” says one source familiar with the culture. Few employees have access to this studio, which is hidden on the top floor of one of Lab126’s Sunnyvale buildings, with offices fronted by partially frosted glass. “If you really wanted to peek in, you could crouch down and look through the bottom of the window,” jokes one source. Bezos would generally visit for a day or two on his trips from Seattle, casually popping in to say hello to his design team and to meet with Zehr. Closer to the launch of the What makes the Fire Fire Phone, his visits became more frequent: At one Phone a particularly point, he spent a month basically working out of troubling adventure Lab126. is that Amazon’s The group’s hardware and design expertise have CEO seems to have become more sophisticated since it released the first misunderstood the Kindle e-reader in 2007. That Kindle was a clunky, ugly essential nature of slab of machinery, but the idea behind it was so his company’s brand. original, and Amazon’s development of subsequent versions so relentless, that it became a massive hit. Unique as it was, however, the Kindle was a relatively simple device, especially compared to a smartphone. Lab126 specialises in the kind of bold bets Bezos loves. Each “science experiment”, as those inside the lab describe their projects, is labelled with a letter of the alphabet. (Indeed, Lab126’s name itself is a play on A to Z, with 1 representing the first letter of the alphabet and 26 the last.) These experiments evolved over years of development into a hardware portfolio that now includes Amazon’s Fire TV digital media player and the new Echo wireless speaker, a sort of Siri-in-a-tube that’s engineered to answer any spoken question. Many other projects will likely never come to market, such as Project C, imagined as an experimental device for the home that would project a display screen onto any surface and allow users to interact with it through gestures. Tyto was considered Project B. Bezos, insiders say, was “the product manager” on the Fire Phone. (One research scientist refers to him as the “super product manager”.) “Even the very smallest decisions needed to go

DAVID RYDER/GETT Y IMAGES

Fire TV Stick (R1 385 from WantItAll.com) An impulse-item nub of a gizmo vaguely akin to Google’s Chromecast, but bundled with a remote control. Basically it’s the Fire TV box minus the higher end games, and voice search requires a smartphone app.

Fire Phone (R11 185, unlocked, from WantItAll.com) Amazon’s first smartphone is hardly a me-too product. However, its interface is gimmicky and garish, making it a quirky outlier rather than a true rival to Apple and Samsung.

Echo ($199/R2 300 excl. shipping) An always-listening, Siri-esque assistant named Alexa lets you speak commands to create playlists, set alarms or check the weather. Amazon is rolling out Echo via a low-key, invite-only programme. — Harry McCracken

JUNE 2015 FASTCOMPANY.CO.Z A 67

through him,” says a former senior member of the team that developed the Fire Phone’s cameras, recalling how Bezos personally chose to include a 13-megapixel camera rather than an 8MP one. He was also closely involved with developing both the hardware and the software. “I would see him brainstorming wild ideas with the industrial design team, or discussing font sizes and interaction flows with the UI [user interface] team,” recalls a former topflight designer at Lab126, who describes a demanding pace. “And I thought, This is a CEO who cares about design; what a wonderful place to be.” Eventually, however, this designer grew frustrated, as did others. “In essence, we were not building the phone for the customer—we were building it for Jeff,” this source says. With Bezos managing every critical decision, teams began second-guessing themselves in trying to anticipate how he would react. Some designers bristled at Bezos’s presence and privately questioned his taste, while others who were wowed by his wide-ranging insights loved his approach. Regardless, Bezos’s heavy hand certainly took getting used to, even for Chris Green, Lab126’s VP of industrial design. “In the beginning, Chris would take Jeff ’s feedback a bit literally,” says Randall, the former Lab126 VP, “and there was many an evening spent over beers and sushi, counselling him, saying: ‘Calm down, it’s going to get better.’ ” Bezos drove the team hard on one particular feature: Dynamic Perspective, the 3D effects engine that is perhaps most representative of what went wrong with the Fire Phone. Dynamic Perspective presented the team with a challenge: Create a 3D display that requires no glasses and is visible from multiple angles. The key would be facial recognition, which would allow the phone’s cameras to track a user’s gaze and adjust the 3D effect accordingly. After a first set of leaders assigned to the project failed to deliver, their replacements went on a hiring spree. One team even set up a room that they essentially turned into a costume store, filling it with wigs, sunglasses, fake moustaches and earrings that they donned for the cameras in order to improve facial recognition. “I want this feature,” Bezos said, telling the team he didn’t care how long it took or how much it cost. Eventually, a solution was discovered: Four cameras had to be mounted at the corners of the phone, each capable of identifying facial features, whether in total darkness or obscured

68 FASTCOMPANY.CO.Z A JUNE 2015

by sunglasses. But adding that to the phone created a serious battery drain. And team members simply could not imagine truly useful applications for Dynamic Perspective. As far as anyone could tell, Bezos was in search of the Fire Phone’s version of Siri, a signature feature that could make the device a blockbuster. But what was the point, they wondered, beyond some fun gaming interactions and flashy 3D lock screens? “In meetings, all Jeff talked about was, ‘3D, 3D, 3D!’ He had this childlike excitement about the feature, and no one could understand why,” recalls a former engineering head who worked solely on Dynamic Perspective for years. “We poured surreal amounts of money into it, yet we all thought it had no value for the customer, which was the biggest irony. Whenever anyone asked why we were doing this, the answer was, ‘Because Jeff wants it.’ No one thought the feature justified the cost to the project. No one. Absolutely no one.” Even so, this top engineer adds, “Jeff is immensely successful; he’s taken huge gambles in the past, so he has shitloads of respect from the team members.” When Bezos insisted that the original 2007 Kindle include a cellular connection so customers could download and access e-books from anywhere, people thought the idea was an exorbitant flourish that would eat into profits. But his prescience was part of what made the Kindle a smash hit. When Bezos encouraged a free-shipping initiative, executives pushed back, nervous about its impact on earnings. But Bezos prevailed and later bundled free two-day shipping into Prime’s immensely popular subscription service, which now boasts tens of millions of customers. Even Amazon Web Services was reportedly greeted with resistance by critics who believed Amazon should focus on expanding its retail business rather than pursuing projects seemingly outside its core competency. AWS is now a multibillion-dollar business, according to estimates. So when it came to the Fire Phone, says one former product lead, “Yes, there was heated debate about whether it was heading in the right direction. But at a certain point, you just think, ‘Well, this guy has been right so many times before.’ ” With progress on the phone slow, and its prototypes barely functional, the company decided leading into 2013 to scrap most of the Tyto work and start over. The target launch date was pushed back a year, and Tyto was given the new code name “Duke”. As a backup plan, Bezos also ordered the development of a stripped-down, low-cost alternative to Duke, dubbed “Otus”. Some inside Amazon hoped the company would first launch Otus (which was also known as the “Prime Phone” because the company was considering giving it away free or selling it extra-cheap to its members), believing that such a low-cost phone was more in keeping with Amazon’s valueconscious brand. Amazon’s victories had always come on the back of aggressive pricing: It was willing to sell products and offer services, such as Prime and its range of Kindle products, at cost— or even at a loss—to win customers and get them buying and consuming more Amazon goods and media. The strategy had enabled Amazon to swallow up entire industries and squash competitors, from Circuit City to Barnes & Noble. But pricing a smartphone was complicated. Bezos didn’t want a me-too device, and the margins a low-cost phone could garner would be minimal, even if it did manage to stand out in an ocean of cheap devices. The only solution, some inside the organisation argued, was to differentiate the hardware enough to justify a higher price point and hope to go after some of Apple’s profits. But Apple is a ferocious competitor as well, whose dominance in high-end products was made possible by decades of rigorous R&D, a world-class design team, and its unrivalled approach to hardware and software. The idea that Amazon, a neophyte hardware maker whose CEO has shown no special affinity for design, could successfully attack Apple may seem quixotic. Yet, Bezos had profound reasons for preferring a top-of-the-line smartphone. Multiple sources indicate that the premium phone represented a “repositioning of the brand away from being so utilitarian and toward becoming more of a lifestyle brand like Apple”, as the high-ranking Lab126 designer phrases it. Bezos expressed some of these sentiments himself in a memo he wrote years ago, titled “Amazon.love”. In the memo, first revealed by journalist Brad Stone in The Everything Store, Bezos describes his vision to transform Amazon into a brand such as Apple, Nike or Disney, which are “widely loved by their customers, and are even perceived as cool”. Brands such as Walmart and Microsoft, he noted, are “unloved” and suffer as a result. He then listed the attributes that distinguished each set of companies: “Risk-taking is cool. Thinking big is cool. The unexpected is cool. Close-following is not cool.” Bezos’s memo helps put the phone project into perspective. Amazon is one of the world’s most

DAVID RYDER/GETT Y IMAGES

admired brands, a constant presence atop surveys of customer satisfaction. But it’s also a company that hundreds of millions of people depend on for good deals on boring products— low-cost paper towels, not a $199 smartphone. The high-end phone would be big, risky, different and unexpected—not the cheap, unexciting device everyone would anticipate from Amazon. That helps explain why, for example, Bezos ordered the team to gussy up the phone’s Firefly feature, a service that can identify many types of products and media with the click of a button. Hover the phone over a physical book cover, for example, and Firefly can instantly dial it up on Amazon.com or in the Kindle Store. But Firefly can also be used to determine the name of a song in a bar, or to scan in contact information from a business card. And just one month before launching the phone, Bezos ordered the team to find a way for Firefly to recognise paintings and other works of art. Bezos unveiled the Fire Phone on June 18, 2014 at Seattle’s Fremont Studios. On stage, he gushed over the phone’s design and Dynamic Perspective, and showed off not only how Firefly could recognise a jar of Nutella but also a painting by Renaissance artist, Vittore Carpaccio. In late July, the Fire Phone finally went on sale, and it didn’t take long for the company to discover that consumers considered its smartphone effort utterly misguided. Reviewers knocked the device for its gimmicky features, especially Dynamic Perspective, which most found worthless and distracting. They also took issue with the Fire Phone’s bland industrial design and disappointing ecosystem; Amazon simply doesn’t offer the same library of apps or cohesion of services as Apple. But what Amazon got most wrong, they said, was the cost: The Fire Phone was too expensive for its customers. According to three sources familiar with the company’s numbers, the Fire Phone sold just tens of thousands of units in the weeks that preceded the company’s radical price cuts. The R2-billion write-down confirmed the launch had been a dud. Clearly, Amazon isn’t yet on the same side of the “loved” spectrum as the brands Bezos named in his memo. Devoted fans of Apple, Nike and Disney will spend any amount of money just for a small taste of their products and culture. Amazon certainly isn’t in the same camp as supposedly ‘unloved’ brands such as Walmart—far from it. But Amazon just isn’t as cool or beloved as Bezos may hope. Anyone worried about the direction Amazon

is headed, and whether the company has abandoned its value-brand intensity in pursuit of some kind of high-class chimera, would have shuddered the night of December 2. A stream of New Yorkers, resplendent in their winter uniform of long black overcoats and plaid scarves, filed into Lincoln Center’s Alice Tully Hall. A live orchestra welcomed the guests. When the lights went down, the actor Jason Schwartzman accompanied Academy Award–nominated screenwriters Roman Coppola and Paul Weitz to the stage, where they thanked—of all people—Jeff Bezos. The occasion? The premiere of Mozart in the Jungle, a comedy series set behind the scenes of a symphony orchestra. The show was produced by Amazon Studios, the company’s original-content arm, which has developed some three dozen pilots in the four years since the company created its video-streaming service. It offers a growing library of Netflix-style content, including original shows available exclusively to Amazon Prime members. “We’re trying to break the mould of how TV has been made for the last 75 years,” Amazon Studios content chief Joe Lewis explained, before dropping a familiar Bezos trope: “It’s still Day One.” On this particular evening at Alice Tully Hall, it was actually day 7 080 (since Amazon’s site launched). In the past year, the company had introduced the Fire Phone, Fire TV, Echo, a new Kindle, a food-delivery service, a Square-like pointof-sale register for local merchants, and that line of ecologically minded baby products. It had greenlit at least six new shows. And despite the lack of profits, its CEO remained committed to the strategy of non-stop innovation that he had followed from the beginning. “There are many ways of thinking about this, but the reality is that Amazon is a collection of several businesses and initiatives,” Bezos said during the Business Insider conference. “It’s kind of like we built this lemonade stand 20 years ago, and the lemonade stand has become very profitable over time, but we also decided to use our skills and the assets we’ve acquired to open a hamburger stand, a hot dog stand—we’re investing in new initiatives.” In September 2013, Fast Company US put the Amazon CEO on its cover alongside the headline, “King Bezos”. Comparing the initiatives the magazine highlighted then and the list of new ventures in the paragraph above gets to the heart of why so many observers are nervous about Amazon. Back then, Bezos’s focus seemed to be on faster delivery, greater automation in the company’s warehouses, and keeping prices low. His new grocery business seemed to be yet another of those low-margin endeavours at which Amazon has excelled. The intensity and innovation applied to these mundane functions was awe-inspiring. True, the original-content business was harder to grasp, but it was an outlier rather than one of a slew of projects that now beg for explication. “With most of Amazon’s products, I usually get it: I can somehow use these things to buy more shit,” explains a high-profile innovator in Silicon Valley with strong ties to Amazon. “But when Amazon starts to move into selling [high-end consumer electronics] like the Fire Phone, how does the brand do? Amazon is not an aspirational brand. I’ve never heard anyone say, ‘Wow, Amazon is really cool.’ They’re known for notorious e-commerce efficiency, which is about as diametrically opposed to fashionable as you can get.” What does Jeff Bezos really gain by stretching so far? A great streaming-content library to hook

On stage, Bezos gushed about the Fire Phone’s design and showed off how it could recognise paintings.

JUNE 2015 FASTCOMPANY.CO.Z A 69

people into Prime makes sense, but should the company really be producing its own original shows? Buying Zappos and Quidsi, with its lineup of e-retail websites such as Soap.com and Diapers.com, fits right in, but why does Amazon have to make its own nappies? Even a phone may make sense—but a 3D phone? Why? Ben Thompson, a widely respected independent technology analyst, has spent much time trying to grasp Amazon’s larger strategy. Recently, he concluded that its big investments in devices and video streaming are increasingly disconnected from its retail business. After Amazon’s acquisition of Twitch, a sort of video-game-centric YouTube, Thompson wrote that it no longer makes sense to view Amazon as an e-commerce company. One theory for Bezos’s apparent strategic shift? “Amazon wants to rule the world,” he wrote in an August 2014 blog post, only half in jest. Bezos has always liked to think of himself as an explorer. “Explorers are cool,” he wrote in that Amazon.love memo. Every so often, Bezos takes his company on a daring expedition. These can be expensive and time-consuming, since they are pursued with the vigour Bezos brings to everything he does. And they have often brought home profits, lessons and ideas that fund previously unimagined sources of future growth. His explorations have led to AWS, which some observers think will be an almost R300-billion-a-year business by the end of the decade, to warehouse robots, and to a host of smaller innovations that have further strengthened the link between Amazon and its customers. Even Prime Air has unexpected potential; it’s the drone delivery project that has been mocked from the outset as an outrageous fantasy that ignores regulatory issues—Bezos painted a picture of a sky full of unmanned aerial vehicles zipping packages to customers in under 30 minutes. In the near term, drones, which can operate on a threedimensional plane, could add yet another layer of efficiency to Amazon’s fulfilment centres (where the US Federal Aviation Administration has no jurisdiction), augmenting the robots already rolling around the floor, transporting goods. The first round of Amazon’s Fire Phone exploration failed, but Bezos will launch more forays, and those may lead to a significant discovery. Some of the existing hardware initiatives have features with considerable promise. The voice recognition in Echo, for example, will likely come to future iterations of the Amazon phone. Imagine that Alexa, as

70 FASTCOMPANY.CO.Z A JUNE 2015

Amazon calls its Siri competitor, finds her way into a slew of devices. She is, really, a voicepowered search engine; if customers like the way she helps them find and order products, Amazon could start to circumvent Google and perhaps even develop a robust advertising business of its own, sitting on top of a powerhouse product-oriented search engine. What makes the Fire Phone a particularly troubling adventure, however, is that Amazon’s CEO seemingly lost track of the essential driver of his company’s brand. It’s understandable that Bezos would want to give Amazon a premium shine, but to focus on a high-end product, instead of the kind of service that has always distinguished the company, proved misguided. “We can’t compete head to head with Apple,” says a high-level source at Lab126. “There is a branding issue: Apple is premium, while our customers want a great product at a great price.” What investors and Amazon fans want to see is a return to the kind of explorations that better gibe with the company’s historic focus. Amazon must deliver on the promise that at some point it will generate significant profits. If it doesn’t, investors will eventually pull away from the stock— that was the message they sent after the third-quarter earnings report. And if that happens, Amazon will have less money for new initiatives, and its recruiting and retention efforts could suffer as well because the company has historically relied on stock options, not high salaries, to incentivise employees. That’s why Bezos’s happy embrace of failure, and his insistence on funding even bolder initiatives ahead, has always been risky. There’s one other thing to keep in mind, however. Bezos’s penchant for exploration has “Amazon is not an almost always been balanced by a deep respect for aspirational brand,” says the fundamental mission of the company. He has one Silicon Valley recovered from every failure Amazon has veteran. “I’ve never experienced in the past, and even after a failure as heard anyone say, ‘Wow, grand as this one, he has earned the benefit of the Amazon is really cool.’ ” doubt, as the majority of my sources told me during interviews. Is the Fire fiasco a dead-set indicator that Amazon is in trouble? Not at all. Toward the end of my reporting for this story, I ventured out to an unassuming building on the Upper East Side in New York, not far from the Central Park Zoo, where a small sign on the exterior marks The Explorers Club. Inside the Wes Anderson–ish space is a museum’s worth of artefacts and gems from the private club’s storied 111-year-old history, such as gloves from the first moon landing. It’s long been an exclusive meeting place for the world’s most daring explorers, scientists and thinkers—club director Will Roseman matter-of-factly tells me no less than three religions have been founded here—and over the years, its elite roster of members has grown to include Sir Edmund Hillary, Buzz Aldrin, Charles Lindbergh, James Cameron, Elon Musk and, yes, Jeff Bezos. If you ever get a chance to visit The Explorers Club, and you manage to get past the massive stuffed polar bear, take a gander at the wall featuring photos of some members the club has honoured. Bezos was commended in 2014 after his company, Bezos Expeditions, used its technology to retrieve jettisoned Apollo 11 F-1 engines from the depths of the Mariana Trench. You’ll know you’re getting close to Bezos’s picture when you see the triumphant photo of Musk, hands folded on his chest beneath that bold stare of his. Just to Musk’s left is a picture with dozens of small figures. Those are the members of Bezos’s crew, standing on the deck of a ship; and if you squint hard, you can see the boss over to the right, wearing work boots, a windbreaker and a baseball cap. There’s nothing remotely heroic about his pose. Bezos told the club’s directors that he wouldn’t accept an award for the Apollo effort unless each of his Bezos Expeditions colleagues also received a citation—highly unusual for this elite organisation. The picture is the only one featuring a group of people. This is the Jeff Bezos people want to see again. The guy in work boots, who always seemed willing to go anywhere and work harder than anyone at the jobs no one else really wanted to do. Amazon is admired by customers for what it does, rather than loved for some iteration of itself that Bezos has clearly desired. The world doesn’t need another Steve Jobs. They just want Jeff Bezos, the way he used to be. acarr@fastcompany.com

WHAT AMAZON IS REALLY SELLING INSIDE LEGO’S FUTURE LAB NASA CHIEF SCIENTIST’S MARS MISSION

BIGGEST BUSINESS COMEBACKS Lessons from MARVEL,

T H E D I G I TA L VERSION OF

STARBUCKS, NINTENDO, TRANSNET, JOE PUBLIC and others on overcoming troubled times to emerge stronger than ever

Fast Company South Africa

SnowCon Strategy

Snowboarding by day, brainstorming by night

Threaded Man brand

Styling the everyday African male

THE REAL LEGACY OF

R35.00

JUNE 2015 FASTCOMPANY.CO.ZA

15008

9 772313 330006

STEVE JOBS

IS NOW AVA I L A B L E on A P P L E I PA D and A N D R O I D TA B L E T S

CAN DROPBOX DOMINATE DIGITAL DATA? / BJÖRK’S CASE AGAINST STREAMING

Issue 6 2 Issue

South Africans making their mark abroad + Dropbox + JT Foxx + Björk + Lynette Hundermark

The Whole Is Greater Than The Sum Of Its Parts Take an executive education short course and go from good to great. 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 | execed@gsb.uct.ac.za or visit www.gsb.uct.ac.za/execed

SOUTH AFRICANS ON TOP OF THE WORLD HOW TRE VOR NOA H, CH A RLIZE T HERON, FA N A MOKOEN A , NEILL BLOMK A MP A ND OT HERS A RE M A K ING IT BIG A BROA D

R35.00

MAY 2015 FASTCOMPANY.CO.ZA

15007 MAY 2015

201769 Exec Ed Course Print Ad Fin.indd 1

2015/03/12 2:05 PM

“If this comedy thing doesn’t work out, I’ve always got poverty to fall back on.”

TRE VOR NOA H ,

9 772313 330006

Comedian and next host of Comedy Central’s The Daily Show

JT Foxx

Helping underdogs become millionaires

Design Indaba 2015 Creativity meets sustainability

OurHood

The new way neighbours are connecting

Rise of the machines

Does artificial intelligence pose a genuine threat?

Full-court press FO R U. S . N AT I O N A L B A S K E T B A LL PL AY ER S A S S O CI AT I O N E X ECU T I V E D I R EC TO R , M I CH ELE R O B ERT S , T H E B E S T D EFEN CE I S A G O O D O FFEN CE By Lauren Schwartzberg Photograph by Nicholas Calcott

MY WAY

When Michele Roberts, a white-collar defence attorney, was named the leader of the National Basketball Players Association (NBPA) in July last year, she became the first female executive director of any major men’s professional sports union in the United States. It was a significant achievement, but she still faced a daunting challenge: remaking an organisation that had fallen into disrepair.

The problem After years of mismanagement— including some questionable financial dealings on the part of Roberts’s predecessor Billy Hunter, who also caved on a deal that dramatically reduced members’ collective bargaining power—the players no longer had faith in their union. When Roberts arrived, she was appalled. “It was like a mom-andpop shop,” she says.

The epiphany To get the job, Roberts had to interview with more than 100 NBA players, and it was while talking to them that she realised the similarities between the 450-member union and the Fortune 500 companies she’d been representing. Just like running a corporation, she says, running a union is about “making deliberate decisions that are going to enhance the value of the entity for its members”.

The execution To run a good company, you need good people. As soon as she got the job, Roberts set about hiring some to fill the positions of CFO, COO, CTO, general counsel and head of human resources—none of which had existed under Hunter. “It’s like a startup,” Roberts says. “We needed a management team that could conduct the business of the union.”

The result

Nothing but net Before interviewing for the job, Roberts spent hours online, educating herself about the NBPA. “As a fan, you watch the game, but you don’t think about it in terms of the business,” she says.

72 FASTCOMPANY.CO.Z A JUNE 2015

The NBPA is completing its first-ever financial audit and rebuilding its relationship with the NBA, as well as with cable companies and others. It will be another two years before the current collective bargaining agreement expires, but Roberts has already taken NBA commissioner Adam Silver to task over what she considers to be unfair caps on players’ salaries. “I would not do what my predecessor has done, and that is ever forget that I work for the union and not the other way around,” she says. “I would never disrespect that relationship.”

THE GRE AT INNOVATION FRONTIER

THE UBUNTU OF INNOVATION I N N OVAT I O N I S N OT F O R T H E LO N E W O L F. M O R E CA N B E A C C O M P L I S H E D BY O P E N I N G U P T H E C O N V E R S AT I O N TO T H E C R O W D

HESE DAYS, AFRICA is in the news for all the right reasons. One of the well-worn refrains about the continent at the moment is that its economy is bucking world trends and offering investors exhilarating opportunities in the face of flagging global growth. A second is that innovation is playing a key role in this renaissance.

Open any global newspaper and you are likely to find a report on how innovation, from the high- to the low-tech, is shaking up lives and solving African challenges. As a latecomer to the innovation game, Africa has the benefit of tapping into vast quantities of technological knowledge, leapfrogging others to find new ways to use this to impact on everything from health and education to agriculture. In some cases, such as mobile banking, this has enabled it to lead the world. But ingenious as many of these innovations are, they don’t happen in a vacuum. While it is often the founders of the companies who get all the credit as innovation superheroes, there is a vast infrastructure needed to support innovators. In the recent African Union report, “On the Wings of Innovation: Africa 2024”, the authors recognise the crucial role that innovation is playing—and must play— in Africa’s future, and make key recommendations to ensure it continues to do so. These include: harnessing emerging technologies, constructing basic infrastructure, investing in higher technical training, and promoting entrepreneurship. The report further states that continental, regional and national programmes “will be designed and implemented in sync to ensure that their strategic orientations and pillars achieve the right developmental impact”. The latter is crucial. The exchange of ideas and the pooling of experiences and skills are core to building up an innovation ecosystem on the continent. As Sarah-Anne

WHAT ELSE IS COLLABORATION BUT AN ACKNOWLEDGEMENT THAT WE WILL ALL BENEFIT FROM FINDING INNOVATIVE SOLUTIONS TO OUR SHARED CHALLENGES?

Walter Baets

Arnold, who heads up the MTN Solution Space at the University of Cape Town Graduate School of Business, has commented: “If we want to build our continent, then we need to invest in building networks that are broader than any one single institution. The fuel to innovate is created when people with different experiences, realities, passions and ideas come together with the mandate and support structures to develop new possibilities.” One organisation that has demonstrated this conclusively is NASA. Following a series of budget cuts that threatened his team’s research and development capacity, Jeffrey Davis, head of the Human Health and Performance Directorate at NASA’s Johnson Space Center, made the call to use crowd-sourcing platforms to boost innovation. Over the past six years, he has opened up the problem-solving conversation at NASA to include ‘outsiders’. And, they have been getting back some novel ideas—proving, he says, that “sometimes the answers to the space agency’s toughest problems can come from people who have no experience with space travel at all”. But while scholars and practitioners are increasingly realising that innovation cannot come without partnerships, many struggle to embrace true collaboration because it goes somewhat against conventional ways of thinking about business, notably the competition paradigm. In Africa, there are some examples of radical collaboration starting to emerge. The newly launched Academic Association on African Entrepreneurship seeks to link top business schools across the continent to ensure knowledge and skills at each participating institution are shared to create a wider impact. And AfriLabs, a panAfrican network of technology and innovation hubs founded in 2011, continues to make progress in building an innovation infrastructure that encourages the growth of Africa’s knowledge economy by supporting the development of startups, technology and innovation. I have heard it argued that the spirit of ubuntu could give the continent an advantage when it comes to collaboration for innovation. For what else is collaboration but an acknowledgement that we are all in the same boat and that we will all benefit from finding innovative solutions to our shared challenges so that we can go further together? In the same way that Africa leapfrogged into the mobile era, perhaps there is another opportunity here for us to lead in establishing collaborative frameworks that recognise our shared destinies and are the envy of the rest of the world. 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’.

JUNE 2015 FASTCOMPANY.CO.Z A 73

MASTER CLASS

A giant leap Stofan and NASA plan to send humans onto the surface of Mars. How? One small step at a time.

Sky’s the limit H OW N A S A’ S CHIEF S CIENTI ST ELLEN STO FA N I S THINKIN G BI G A S SHE PU SHE S THE SPACE AGEN C Y INTO THE FU T U R E

By Jon Gertner

Photograph by Melissa Golden

Sometime around the year 2035, NASA hopes to fly a manned spacecraft to Mars and land astronauts on the planet. How will it achieve this daunting goal? Who will create the necessary technologies? And just as important, how will it teach the public about the difficulties—and value—of such a distant, expensive and audacious mission? At the moment, much of the responsibility for all of that rests on Ellen Stofan, NASA’s chief scientist. Here’s what we can learn from someone trying to solve a problem that no one has ever faced before.

74 FASTCOMPANY.CO.Z A JUNE 2015

( S ) PA C E Y O U R S E L F When it comes to achieving such a (literally) distant goal, the key is to keep the process manageable, according to Stofan. “We have to ask, ‘How can we break a huge challenge like sending humans to Mars into a series of doable, affordable steps? How can we break that problem down into chunks in order to keep making progress?’ ” That means focusing on more modest near-term efforts—such as the Mars Curiosity rover and the recently test-launched Orion spacecraft—that move toward the ultimate goal, but also yield useful knowledge along the way.

DON’T BE AFRAID TO VEER OFF COURSE Sending astronauts on a yearlong journey to Mars will involve extraordinary challenges (two major ones: making sure the crew doesn’t absorb too much radiation, and figuring out how to safely land a heavy vehicle in the planet’s thin atmosphere). Right now NASA doesn’t have the technology to pull off such a feat, but it needs to stay

ESA; HUBBLE, M. KORNMESSER/ESO, L. CALÇADA AND L.L. CHRISTENSEN

SENDING ASTRONAUTS ON A YEARLONG JOURNEY TO MARS WILL INVOLVE EXTRAORDINARY CHALLENGES open to scientific shifts, which can come about suddenly and unexpectedly. “We’re not going to get humans to Mars until at least the mid-2030s, and the world is going to change by then,” Stofan says. “So how do we make sure that the path we’re choosing has enough flexibility, so that as technology develops we can adapt what we’re doing? That way, if someone figures out how to do something much better, you can adapt without starting from square one or making costs go way up.”

N O M O R E F LY I N G S O L O It’s been a long time since NASA was able to fund and engineer a space expedition completely on its own. These days,

budgets are tighter and co-operation is key. That means some functions are being turned over to private-sector businesses such as Elon Musk’s SpaceX, which is currently handling cargo resupply for the International Space Station (ISS), and Boeing. In 2017, both companies are set to start shuttling astronauts to and from the ISS. “We’ve had to say, ‘NASA should use our resources for what is unique to NASA,’ ” says Stofan. The other part of the equation involves getting international help. The European Space Agency and Russia are offering to collaborate on this ambitious project, but that’s just the start. “With the mission to Mars, the whole world wants to get involved. So we actually have 13 different space agencies from around the world working on the global exploration road map. That helps us because we don’t have unlimited resources. And it’s a benefit to all the other countries that want to participate.”

NE X T FO R NASA ELLEN STOFAN ON THREE OF THE AGENCY’S LONG-RANGE PROJECTS

Ke e p t r ack o f t he im p ac t o f clim a t e ch ang e

TA P I N T O N AT U R A L C U R I O S I T Y Studies have shown that NASA’s investment in science and tech has yielded a national return on investment that amounts to several times its cost. But Stofan doesn’t want to build public support for NASA’s agenda simply by stressing financial ROI. Instead, she hopes to appeal to our natural sense of curiosity and wonder. “Everybody has busy lives, but you can tell people, ‘Go outside and look at the night sky. We’ve been able to demonstrate that every star you see probably has a planet around it.’ The public has an incredible capacity for appreciating the wonder of our planet, our solar system, our universe.”

L ook f or po t en t i al li f e in s p ac e

With satellites and radar, NASA will monitor the melting ice sheets of West Antarctica and Greenland. “So much of that ice is likely to end up in the ocean and contribute to sea-level rise, which is extremely worrying,” says Stofan. “We’re making that data accessible to decision makers so they can start saying, ‘How can we mitigate and cope with these effects of climate change?’ ” If they find evidence of living organisms, it could change our view of humanity. “We may find that life did evolve on Mars, and there’s a chance life evolved on Jupiter’s moon, Europa. If we find that life is present in our solar system, we’re going to try to understand its implications for humans. How much is it like life on Earth? Does it have RNA and DNA? It’s going to be mind-blowing.”

S TA R T R E K : T H E N E X T G E N E R AT I O N If things proceed according to plan, the astronauts who will actually travel to Mars in 2035 are currently kids, so part of Stofan’s job is to get today’s children excited about exploring the universe. How’s that going? “Every time I give a talk,” Stofan says, “I ask the audience—especially if it’s kids— how many want to go to Mars. At least half raise their hands. I don’t think there’s going to be any shortage of volunteers.”

Go e v en de e per in t o t he uni v er s e

NASA is hoping to identify far-flung planets that may support life. “We’re launching a spacecraft in 2018 that may discover one habitable planet a month during its mission. So not only are we going to be on the verge of understanding the extent and range of life in our own solar system, we’ll begin to answer the question: Does life exist around other stars?”

JUNE 2015 FASTCOMPANY.CO.Z A 75

FAST BYTES Fast Company SA takes a look at the innovative new ideas and products currently making waves in South Africa and abroad

ENTREPRENEURS ARE POSITIVE, DESPITE CHALLENGES

Automotive engineering innovation Ford Motor Company was named the “Most Innovative Volume Brand 2015” for its safety and semi-autonomous driver technologies at the 10th annual AutomotiveINNOVATIONS Award. The Centre of Automotive Management (CAM) based in Germany considered innovations from 18 global automotive groups representing 53 brands. Ford won the awards for safety and driver assistance systems including Active Park Assist, which helps drivers to park alongside other cars and in parallel parking spaces; and automatic braking technology, Active City Stop, which operates at speeds of up to 50km/h. “Innovation has always been the lifeblood of Ford, and it’s more vital with the automotive industry entering a period of rapid technological advancement,” said Joe Bakaj, vice president of product development at Ford of Europe. “The technologies we are introducing today are enabling a safer, more efficient and more connected journey.” Said Professor Dr Stefan Bratzel, director of the CAM and lead juror on the judging panel: “The award for Ford as ‘Most Innovative Volume Manufacturer’ proves the innovative power of the brand. With [the Ford] Focus and Fusion, many of the innovations have already found their way into production.”

RAISING THE SA FEMALE BUSINESS PROFILE

Launched on April, 24 in Cape Town, the VOICES Female Business Club is a creative platform from which businesses and entrepreneurs can position themselves within the South African business scene. While many business clubs have focused on the traditional offerings of inspirational once-off speeches and events, VOICES offers a different dimension with engagement at its core. The concept is aimed at bringing together innovative females across a wide range of different industries at collaborative events. VOICES will engage with over 100 local businesses a year, which all share a passion for South Africa, with an emphasis on collaboration and doing business. “It’s a major step in raising the female business profile of South Africa among the business community,” states Shelley Webb, founder of the business club.

76 FASTCOMPANY.CO.Z A JUNE 2015

Seed Academy, a school for entrepreneurship, surveyed more than 900 startup entrepreneurs who have been in business less than five years. The results show that while entrepreneurs face key challenges, the majority are startlingly positive and are motivated to grow and develop their businesses. Donna Rachelson, director of Seed Academy, explained the motivation for the survey: “We have trained hundreds of entrepreneurs and have picked up common problems. This national survey gives us hard evidence to help create a more sustainable and successful startup culture in South Africa. We hope it will create impetus for industry and government to align efforts.” According to the findings, the main problems entrepreneurs face are: finding customers, raising funds, a lack of guidance, and entrepreneurs’ tendency to wear too many hats. “These challenges confirm that entrepreneurial development should be aimed at providing business education, helping to create a net work, offering tangible guidance to find customers and, of course, preparation to raise funds at the most appropriate time for the business,” said Rachelson. Funding emerged as a key issue. Only a small percentage of entrepreneurs fund their businesses from the vehicles formally established to support them. This raises questions regarding the accessibility and effectiveness of funding programmes. The biggest motivator to start a business is the identification of an opportunity. Only 8% of respondents started a business as a result of not finding a job, which is a leading indicator in the development of successful entrepreneurs, according to Rachelson. Most entrepreneurs work from home, the survey found.

INSPIRED RECRUITMENT S U S TA I N A B I L I T Y THROUGH I N N O VAT I O N

Royal Philips, the global leader in LED lighting, kicked off its sixth consecutive Cape Town to Cairo roadshow by lighting up the iconic Clock Tower, the Port Captain’s building and the Swing Bridge at the V&A Waterfront in the Mother City. This year’s roadshow theme, “Sustainability through Innovation”, is more pertinent than ever before as the company spearheads the LED lighting revolution in Africa with smart lighting solutions designed for the continent. As a contribution to enhancing the attractiveness of iconic monuments across Africa while reducing energy consumption in parallel (a project that Philips started during last year’s roadshow), the company has installed its latest Vaya LED lighting solutions that combine warm and cool daylight colours to create an almost mythical atmosphere around the famous Cape buildings, and in the process bringing history to life. The LED lighting installed has a lifetime of up to 50 000 hours and is entirely cuttingedge, with each luminaire having its own IP address—a precursor to the future of connected lighting. With electricity use a constant concern across the African continent, workable and sustainable solutions are needed now more than ever. However, large-scale growth also presents huge challenges, specifically with regard to energy. Energy efficiency is crucial to achieving smart cities of the future which are liveable, safe and aesthetically pleasing.

When TBWA Hunt Lascaris Durban went on a search for a new art director, it began directly in the space where it knew top art directors would be found: searching for visual inspiration on Greatstock.co.za. With the help of the Greatstock team, TBWA Hunt Lascaris Durban paired unusual images with bold, entertaining headlines designed to catch the attention of potential art directors surfing the Greatstock website. Through this campaign, the two companies hope inspired creatives will visit the website, find the perfect visual and, ultimately, the perfect job. “While surfers are easy to find in Durban, art directors are not—so we decided to go where art directors spend their time,” says Elton Arnot, creative director for TBWA Hunt Lascaris Durban. “Our philosophy is ‘challenging convention’. This campaign felt like the right way to find the kind of person who would fit in.” So far, the agency has had over 100 applications. The unique mechanism reflects a global trend of ‘super-targeting’, in which employers team up with creatives to reach only the individuals who perfectly fit the position to be filled. This progressive approach to recruitment is unusual and integrative—but delivers great results.

New solar battery to power homes Elon Musk’s energy company, Tesla, will ship its new Powerwall home battery system to countries including South Africa by the end of 2016. This follows the recent unveiling of the new battery system that can store solar energy for later use. Customers in North America and Europe can already pre-order the product. Powerwall is available as a 7kWh unit for $3 000 (about R36 300) and a 10kWh unit for $3 500 (R42 300), excluding inverters and installation, and will deliver to pre-order customers by August 2015. “The Powerwall is available through solar installers, utilities and energy companies that can offer Powerwall with installation, which allows for rapid deployment around the world,” said Musk. The goal with the Powerwall is the complete transformation of the global energy infrastructure “to completely sustainable zero-carbon”, he added. The device will be a boon for underdeveloped regions where power is often unreliable despite abundant solar energy.

JUNE 2015 FASTCOMPANY.CO.Z A 77

FAST EVENTS Upcoming events Fast Company will be attending

E - C O M M E R C E L AW A N D S E C U R I T Y C O N F E R E N C E 2 0 1 5 3 & 4 June Emperors Palace, Johannesburg By attending this conference, delegates will learn from industry experts how to remain on the right side of the law and avoid becoming a victim of online fraud and security breaches. Learn more about the landscape of Internet security and online threats; cybercrime in the e-commerce industry and cybercrime insurance; the impact of credit-card fraud; payment compliance and security; Protection of Personal Information Act compliance; data collection, data privacy and value of your data; the Consumer Protection Act and the online environment; identifying and mitigating risk; intellectual property and brand protection. The conference will feature an exclusive Social Media Laws and Risks Workshop presented by one of South Africa’s top law firms, Bowman Gilfillan, as well as a panel discussion on POPI in e-commerce.

CONTENT MARKETING 2020 4 June: Faircity Quatermain Hotel, Johannesburg 2 July: Cape Sun, Cape Town www.africaninfex.co.za/contentmktg Smart marketers know that traditional marketing is becoming less and less relevant by the minute. If you fall into this category, you probably also know that content marketing is already taking centre stage. The only question you are left with is, How? This conference will prepare to answer that question in the most definitive way, by discussing: Consumer insight; developing your content marketing strategy; content, marketing and the customer experience; the content marketing team and your toolkit; and reimagining the future, among others.

SME GROWTH CHAMPIONS 10 June The Focus Rooms, Sunninghill, Johannesburg growthchampions.smesouthafrica.co.za Although small and medium enterprises (SMEs) play a significant role in the health and well-being of South Africa’s economy and its people, most enterprises face a host of factors that hinder growth. SME Growth Champions seminars are aimed at identifying these SME hurdles—providing business insight and tools to enable black-owned SMEs to sustain and grow their businesses. Credible speakers, who are industry experts and reputable business owners, will unpack key factors that limit SME growth. The seminar will also share insight on how to develop and grow a competitive business.

86 FASTCOMPANY.CO.Z A JUNE 2015

YO U T H M A R K E T I N G S T R AT E GY C O N F E R E N C E 2 0 1 5 25 June & 26 June The Maslow, Sandton, Johannesburg www.brandedyouth.co.za Now in its third year, this conference is designed to deliver insights and strategic advice for brands and organisations that wish to grow their marketing and communications intellectual base. CEOs and MDs from some of the top marketing and communications firms, plus three international speakers, will cover important aspects of the youth culture such as brand strategy, advertising, digital marketing, social media, youth engagement, experiential activities, and research and trends. It promises to be of value-add to any brand, agency organisation or individual involved in youth marketing (18- to 34-year-olds).

AV I AT I O N O U T L O O K A F R I C A 2 0 1 5 1 & 2 July Sandton Convention Centre, Johannesburg www.terrapinn.com/aviationafrica International airlines are looking for additional sources of revenue. They have identified Africa as aviation’s final frontier, and this means huge opportunity—but it equally poses potential risks for African airlines. Further to this, airports on the continent are under pressure to improve their operational efficiencies in response to increased demand from international airlines. Their most urgent need right now is to identify and evaluate smarter solutions in which they can invest—in an effort to help them achieve their operational and broader business objectives. Attend the Aviation Outlook Africa conference and exhibition to learn about the best solutions in the market.

4TH ANNUAL CUSTOMER EXPERIENCE MANAGEMENT AFRICA SUMMIT 22 & 23 July The Westin, Cape Town www.cemafricasummit.com Featuring more than 25 high-level speakers bringing the audience hard-hitting keynotes; industry thought leaders engaging in panel discussions; and captivating workshop sessions hosted by the leaders in industry providers—this summit is the continent’s largest customer experience management event. The 2015 agenda covers various trending topics, and delves into challenges faced by all in the industry. Speakers will guide delegates in evolving the way they reach and engage their customers, and heighten their systems to cope with an increasing number of clients coming through various channels and interacting with staff.

JUNE 2015 FASTCOMPANY.CO.Z A 87

ONE MORE THING

HOPPING OFF THE NEW-DEVICE TREADMILL W E H AV E S LO W F O O D, S LO W M O N E Y A N D E V E N S LO W P R O G R A M M I N G . W H E R E I S T H E O U TC RY F O R A S LO W S M A RT P H O N E M OV E M E N T?

Baratunde Thurston

Living as both a Good Person and a Good Consumer has never been easier. I can meet the people who grow my food, patronise restaurants that offer their workers a living wage, buy clothing that’s responsibly manufactured and, wherever possible, support companies whose environmental practices line up with my values. Conscious consumption has become natural in many parts of my life—but it’s still too hard with technology. I was reminded of this while following the fundraising campaign for the recently released documentary film, Who Pays the Price? The Human Cost of Electronics. These magical devices on which we depend expose workers in the developing world to conditions and chemicals that lead to leukaemia and suicide. Although Apple, in response to increasing pressure, has been a leader in advocating for doing away with the most harmful solvents such as benzene and n-hexane, the conditions surrounding the manufacture of technology products remain shameful. According to Who Pays the Price?, an additional $1 per device would eliminate the need for harmful chemicals when making new smartphones. Surely we can afford that. What will it take to bring about such change? Expand our smugness. If hipsters can make it cool to dress like blacksmiths or 1940s librarians, can they lord three-year-old phones over us? Can we hire the kale marketers to work their magic on cruelty-free electronics? Inspire activist investors. The label ‘activist investor’ can mean more than just a raider looking to score his next quick windfall. Someone should make the phrase more than an oxymoron. Like investors. Embrace the power of suggestion. Our phone pre-orders should prompt us to “Add R50 to show some decency, for goodness’ sake!”

feels that way, thanks to the Theory of Device Relativity, which holds that as the phones of those around you grow in size, yours shrinks in stature. My reasons for holding on to my existing model were practical and moral rather than financial (with a contract extension, I can have a new device for a modest fee). First, my current phone works just fine, except for this annoying bug where I continue to receive emails despite not wanting any. More troubling is the increasingly inescapable sense that if I get a new phone just because I can, I am accelerating the suffering of the people who make them.

80 FASTCOMPANY.CO.Z A JUNE 2015

THESE MAGICAL DEVICES ON WHICH WE DEPEND EXPOSE WORKERS IN THE DEVELOPING WORLD TO CONDITIONS AND CHEMICALS THAT LEAD TO LEUKAEMIA AND SUICIDE.

Slow down. Given the choice of the iPhone 6 versus the iPhone 6 Plus, I found it easiest to pick the iPhone I already owned. There were far fewer billboards and Jimmy Fallon–Justin Timberlake television ads promoting my option, but this choice freed up my mind to focus on more important decisions. Like whether to buy a persimmon or a pomegranate from the farmers’ market. 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 Kirsten Ulve

Celine Grouard

MY IPHONE IS getting smaller. At least, it

Stickers! Marketers and consumers love them—so if the factory workers who make a certain phone get more than 20 minutes of sunlight a day, let’s allow the manufacturer to put a little smiley face on the packaging!

brandinc/340/e

â&#x20AC;&#x153;13 years with Nashua and their service just keeps getting better.â&#x20AC;?

011 232 8000

solutions@nashua.co.za

201757

THERE'S A PLACE WHERE

LOGIC INTUITION MEET M EET IN HARMONY

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 4061922 | info@gsb.uct.ac.za or visit gsb.uct.ac.za

R OU L CO CAâ&#x20AC;&#x2122;S L L I L FU AFR HOO R n VE G AT SC O pe S O S C N I E ow DIS INK SIN N s TH BU ion t P a lic TO pp A 15 20