A WHOLE NEW APPLE Why there’s life
INSIDE 2016’S BIGGEST RIVALRIES Snapchat vs Facebook
after the iPhone
SpaceX vs Blue Origin Slack vs Skype and 3 others
How brands connect with millennials
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Top wealth coach JT FOXX has the blueprint
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Learn and network with 40 Young South African entrepreneurs across diverse industries on 2 stages and in more intimate sofa sessions. Build skills by participating in workshops hosted by experts like Afri-entrepreneur Shaka Sisulu, Radio expert Catherine Grenville, Red Bull Amaphiko Social Entrepreneurship Academy, Fast Company Magazine, Pick n Pay Small Supplier Programme, and others. Hone yourself in SpeedMentoring Sessions. Connect and network with 1500 other passionate productive young SA Pioneers at the Friday evening Pioneers@Sunset event.
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C OVE R F EATURE
SECRETS OF SUCCESS
JT Foxx is helping ordinary people become extraordinary entrepreneurs—sharing his blueprint for the right strategy, the right system, the right information and the right coaching. How the top wealth coach is developing “intelligent millionaires” By Evans Manyonga
Fantastic, Mr Foxx! JT says, “Business to me is like a game, and money is how I keep score. The more I make, the more I can give away.”
14 HOLD THEIR ATTENTION FEAT U RES
How to market your brand to millennial consumers—and retain them as lifelong ambassadors BY KERRY ELBOURNE
50 WHAT’S THE BIG IDEA?
18 THE SURVEY
Fast Company US asked more than 100 directors and managers to name their favourite employee perks. Here’s what they had to say
If South Africa is to succeed as a knowledge economy, the country needs to close its technology skills gap BY CHANI MACAULEY
30 BRAIN TRUST
What Microsoft’s commitment to hiring people with autism means for the future of work BY VAUHINI VARA
Apple may never again release a product as world-changing as the iPhone. But that doesn’t mean it isn’t in a stronger position than ever to shape our future BY RICK TETZELI
34 FACEBOOK’S BEAUTIFUL MIND
The social network is teaching computers common sense, and it could one day change the way we communicate BY DANIEL TERDIMAN
68 INSIDE 2016’ S HEATED RIVALRIES Snapchat vs Facebook, Slack vs Skype, and 4 other futuredefining contests
36 CYBER IMMUNITY A promising new cybersecurity approach is modelled after the human immune system BY STEVEN MELENDEZ
CREAT I VE CONVERSATIO N
38 RUN THE ROAD
Tesla’s direct-to-consumer sales strategy is changing the way cars are sold BY JJ MCCORVEY
Retired US soccer star Abby Wambach has a new gig at ESPN—and a plan to take on wage inequality BY LAYNIE ROSE
46 HOME-GROUND ADVANTAGE
Why South Africa is becoming a competitive player in outsourcing software to global businesses BY SHASHI HANSJEE
Rock(et) around the clock Elon Musk’s SpaceX and Jeff Bezos’s Blue Origin are engaged in fierce competition: to recruit the best engineers—and, above all, to make history. (page 70)
SEPTEMBER 2016 FASTCOMPANY.CO.Z A 3
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08 FROM THE EDITOR 10 THE RECOMMENDER 33 FOOTLOOSE
Cole Haan’s redesigned wingtip oxford mimics a running shoe BY LAUREN SCHWARTZBERG
55 COOL BEANS!
Ashanti Design’s handcrafted bean bags and other products are pleasing for both people and planet
78 MAVERICK OF THE MONTH
Rapelang Rabana is the Glenfiddich/ Auric Auto/Fast Company SA Maverick for September
82 THE GREAT INNOVATION FRONTIER Why Africa should be moving determinedly away from fossil fuels and toward innovation in cleantech BY WALTER BAETS
84 FAST BYTES 86 RANDS AND SENSE Intellectual property shouldn’t be considered a ‘luxury purchase’ that can be cut from the budget BY DINA BIAGIO
88 FAST EVENTS
4 FASTCOMPANY.CO.Z A SEPTEMBER 2016
All in the mind Rapelang Rabana loves seeing something she’s worked on manifested into reality—after it started with just a thought. (page 78)
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A REALLY COOL LITTLE SPORTS AND LIFESTYLE BUSINESS
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Some may see ‘Old School” as outdated or old fashioned. On the contrary, it’s all things ‘uber’ cool and signifies highest standards, strong values and forward thinking functionality. Measured and calm under pressure, feisty and fun when they play…you’ve got it…they are Old School!
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From the Editor
THE TECH GENERATION The Japanese call them the people who are always doing two things at once; in the US they’re known as millennials; in Spain the term is Generación NiNi (jóvenes que NI estudian NI trabajan—young people who don’t study nor work); in Australia and the UK it’s Generation Y, and in South Africa they’re simply “youngsters” or “the new breed”. One of the largest generations in history is steadily moving into their prime spending years. Millennials are already reshaping the global economy and changing the way business is conducted—ultimately forcing companies to completely rethink their strategies. Millennials are generally recognised as those born between 1980 and 2000: they’re highly connected, globally minded, ambitious, largely driven and, perhaps on the negative side, very much indecisive. The myriad opportunities and possibilities are their Achilles’ heel; there’s so much available that it’s really difficult for them to settle on specific choices. Much more research still needs to be done on this generation, but there’s enough to point us in the right direction. These young people have come of age during a time of technological innovation, globalisation, as well as economic upheaval and disruption. Their behaviours and experiences are starkly different to those of their parents. Recent research by leading global investment banking, securities and investment management firm, Goldman Sachs, found that millennials have different attitudes toward aspects such as marriage, technology and ownership—and have helped spawn the sharing economy. Whereas their parents had an average marrying age of 23, theirs is 30; whereas their parents used to worry about nuclear warfare, they have grown up amid the reality of modern terrorism. Mildly put, there has been a seismic shift in the way the older and the younger generations approach life. Ownership is trumped by convenience, and brands of choice are not favoured by brand strength or fame but rather by practicability, price and convenience. They are the first generation of digital narratives, and their natural growth with technology strongly influences how they shop, live and interact as they are used to instant access to price comparisons, product information and peer reviews. They are also highly dedicated to wellness, their active lifestyle influencing trends in everything from food and drink to fashion. For the millennial generation, being healthy doesn’t simply mean being
8 FASTCOMPANY.CO.Z A SEPTEMBER 2016
Worth the effort Any business that wants to stay viable will have to find new ways of capturing the attention of millennials.
‘not sick’; it’s a daily commitment to eating right and exercising, using apps to track training data, and online information to find the healthiest foods. Why is all this so important? Well, by 2020, 18- to 25-year-olds will control more than $1.4 trillion (over R19 trillion) in spending power. That means any business that wants to stay viable will have to figure out new ways to capture their attention. It won’t be easy, but it will definitely be worth it. This edition has a strong focus on the young generation and the future they are shaping. Our cover personality JT Foxx, also a millennial, has been visiting South Africa for the past three years, presenting his (mostly sold-out) wealth-coaching seminars to ordinary South Africans and helping them become extraordinary businesspeople. We sat down with Foxx to hear his thoughts on business, collaboration and his quest to turn more citizens into “intelligent millionaires”. We also go inside six of the biggest business rivalries in 2016. Snapchat, Facebook, Twitter, Pixar and Skype are among the heavyweights trying to define the future. But the year is not yet over, and the rivalries are getting more heated by the day. Watch this space. We hope you enjoy this jam-packed edition, and start working toward aligning your brand, business and thought processes to the new emerging generation.
Evans Manyonga email@example.com @Nyasha1e
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The Recommender What are you loving this month?
Head Office & PR Manager, Superdry SA
Favourite holiday destination Byblos, Lebanon: Considered the oldest city in the world, this coastal retreat along the Mediterranean Sea boasts a panoramic view of sandy beaches and picturesque mountains. Its ancient port is surrounded by Phoenician ruins and an old Crusader castle. It’s a city so rich in history and culture that it feels like you’ve been transported to a bygone era. As the sun sets, the cobblestone streets—lined with outdoor shisha cafés and bars—come alive with music. If you love good food, good weather and great scenery, Byblos will not disappoint. 10 FASTCOMPANY.CO.Z A SEPTEMBER 2016
Favourite spot Philip Voget
Marketing manager, Rémy-Cointreau SA
Dust and Dynamite, Zonnebloem: This is my new local! It’s an incredible and authentic space that feels like a saloon bar in the Wild Wild West. Owners Wayne and Anton are always there to welcome you, and you can get the best margarita in town!
2016 SA Olympic Silver Medallist, Rowing
The Wheel of Time by Robert Jordan : I read this
Favourite restaurant Gemelli, Bryanston: Whether you’re sharing a casual meal or gathering for a more formal occasion, this gem caters to all tastes and styles. It’s truly one of my favourite places to eat in Joburg. The restaurant’s inventive take on modern Italian cuisine literally
Favourite business bundle
titillates the taste buds, and its ever-changing seasonal menu guarantees novel experiences throughout the year. Enjoy a drink at the trendy bar before your scrumptious repast. Be sure to try the Branzino (aromatic sea bass) and Torta di Formaggio e Torrone (nougat cheesecake).
series in my downtime to keep my mind off training and racing. Over the 14 books, the battle between good and evil becomes enthralling, and you can easily identify with the characters. The author died before finishing the series, leaving Brandon Sanderson to complete it. A fantastic read for anyone remotely interested in fantasy.
Brand manager, EasyEquities
Antony Seeff CEO of Tariffic
Telkom FreeMe: I make only a handful of cellphone calls—but I’m definitely a heavy data user, cruising through at least 5GB per month. Telkom understands that we’re now living in a high-data, low-voice world, and has introduced a new set of FreeMe packages that offer a lot of data (ranging from 1GB for R99/month to unlimited data for R999/ month), unlimited Telkom calls, free WhatsApp, and very cheap rates for calls to other networks and for out-of-bundle data. (You could also consider Afrihost Mobile for some great data-heavy deals.)
Big Magic by Elizabeth Gilbert : It’s reassuring that even the author of Eat, Pray, Love struggles with selfdoubt! This collection of stories and experiences is inspiring to anyone who has ever felt stunted when it comes to acting on their wildest, most wonderful ideas. My favourite takeaway was how to acknowledge fear and invite it along on your journey.
SEPTEMBER 2016 FASTCOMPANY.CO.Z A 11
App Alley Simon Dingle Samantha Otter
5FM radio host & founder, Phantom Design
Global marketing director, Cheapflights
BitX: Money is the
Grabble: Just swipe left or right on
your favourite clothing items to save them to a list. The best part is that the app notifies you when your picks are on sale.
It’s great for travelling as well, because you can share your lists with friends, organise a holiday wardrobe, and buy at the best time.
second most important thing human beings have invented after language— and we’re doing it wrong. With BitX you can buy, sell and use Bitcoin and begin the process of becoming your own bank. The app also allows you to send money to a friend with just their mobile number, or buy airtime and electricity— simply. Blockchain technologies are transforming all areas of human trust, and have given us a way to avoid future financial crises by taking centralised human decision making and greed out of the mix.
Thozi Sejanamane Brand manager, Webfluential
Pokémon GO: I’m a
great fan of gamification and have a variety of apps that help me track real-life things such as health and wealth. But none has been quite as entertaining as Pokémon GO. It combines the cult fandom of Pokémon with the locationbased and augmented-reality features of one’s mobile phone. I still log in daily: pushing for at least 10km of gameplay a week in my efforts to catch ‘em all.
12 FASTCOMPANY.CO.Z A SEPTEMBER 2016
Owner, strategist, Radar
One Big Thing: This simple to-do app lets you focus on your main task for the day. You can add other items to tick off, but it helps you to keep in mind that ‘one big thing’ to be completed. Give it a go!
HOLD THEIR ATTENTION How to market your brand to millennial consumers— and retain them as lifelong ambassadors By Kerry Elbourne
14 FASTCOMPANY.CO.Z A SEPTEMBER 2016
By 2020, 18- to 25-year-olds will control more than $1.4 trillion (over R19 trillion) in spending power. So if you’re not reaching this generation, you’re not moving with the times—and you will lose out on making lifelong brand advocates. Almost two-thirds (62%) of millennials say that online content makes them feel more connected to a brand, but only 32% find today’s brand communications helpful, according to a survey by US Internet marketing service, NewsCred. Why has connecting with this generation become so important? Simply because they’re the largest age group to emerge since the baby boomers, and make up one of the largest groups of consumers today. Brands need to focus on appealing to them not only as their target audience but as a rapidly growing proportion of the workforce over the next 20 years. Millennials have grown up in a technologically savvy and socially networked world—one in which any opportunity or goal seems possible, which fills them with a natural optimism for the future. They are generally well-
If your content cannot be accessed quickly and easily, millennials will lose interest and move on to the next thing that captures their attention.
educated, self-confident, able to multitask, and have plenty of energy. There is an increased need for social interaction, immediate results in their work and social life, and speedy advancement. They tend to have a stronger attitude of independence, and are constantly looking to innovate and challenge traditional systems. Through online and survey research, SA branding agency Lady Blue was able to accumulate insights on how marketers in various South African companies have seen a shift in today’s markets due to the growing influence of millennials. It’s a very interesting topic, and something on which every company should focus, say Megan Prescott and Kerry Elbourne, co-founders of Lady Blue. This research evoked some interesting opinions: “I believe the most important value the millennials bring to the table is that we have grown with the rapid technology changes that have become a daily routine. Millennials rely on technology more than ever before and can foresee the impact a company would gain within the marketing and sales department through social media. As opposed to ‘just’ the pay cheque at month end, this generation applies to be part of a workforce that has an atmosphere and a sense of social culture; a trendy, competitive and tech-savvy workspace. That said, as much as the younger generation such as the millennials love to socialise, they are extremely eager to climb the ladder as quickly as possible.”—
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YOU T HF UL INF O George Ridge, sales/marketing manager, IT Concepts “Each generation has unique expectations, but none quite like the millennials. I’d say they have challenged and changed marketing and brand strategies significantly, mostly because they interact a lot more with brands and expect more from products— often the key ingredient being a
meaningful relationship with brands of their choice. I think there’s an expectation for brands to stand for something that resonates with this generation, which makes a marketer’s job ever so challenging but extremely interesting.”—Keno Smith, manager, marketing communication & awareness, Standard Bank Group
“I don’t think that judging the millennials’ impact on marketing is relevant as, for the most part, it has been technological disruption that has led to the majority of the recent consumer trends which, in turn, are the cause for shifts in the space of marketing. I’d personally be more interested in how my generation, the millennials, are going to effect
Insights into how millennials consume branding
70% share content that makes them laugh.
60% will only share content if it’s thought-provoking and intelligent.
Shifting focus (Clockwise, from top left) Keno Smith, George Ridge, Devon King and Sam Hurley had interesting insights into the growing influence of their generation on marketing.
53% engage with brands on company websites.
41% abandon content because it’s too long.
share mainly personal content.
read communications from brands most of the time.
31% are more likely to buy if the content is not ‘salesy’.
are more likely to buy if the brand delivers interesting content that teaches them something.
respond more positively to content about someone they respect.
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Data for sidebars from NewsCred Millennial Survey, 2014
change in the greater sociopolitical system, which in my opinion is in dire need of disruption.”—Devon King, product marketing manager, GetSmarter “The millennial generation has certainly created a massive shift in not only marketing but business operations overall. Millennials expect answers instantly. They expect to be met at every touchpoint with the content they desire. They don’t want to be sold to; they want to invest their short attention span in stories that make them feel they belong.”—Sam Hurley, global digital marketing influencer It’s clear most marketers have already realised that their branding efforts need to be adjusted in order to grab the attention of the millennial generation. If brands focused more on portraying their essence and culture in a way that would spark millennials’ interest in being involved in or associated with the brand—as opposed to merely sparking a buying action— it would play a role in decreasing the level of apathy in these young people and changing their attitudes toward employment. To excite someone about a product is one thing; to open a window of opportunity that makes someone enthusiastic for the future can really make waves. Many brands throughout the world are faced with the challenge of understanding the millennial ‘culture’, and therefore they are failing to connect with this generation on a level that elicits a favourable response. Their content falls short in appealing to and engaging with these young consumers due to lack of knowledge of how they operate in today’s society. So what do millennials expect from the content they consume? They don’t want to be fed information; they want to be involved, to participate in discussions, and
M A K E T H AT CONNE C T ION Where to reach your target audience online Millennials share content on: INSTAGRAM
Millennials find content on:
71% 65% 24% 23% 23% 12%
They don’t want to be fed information; they want to be involved, to participate in discussions
feel their opinions and thoughts are being heard. Millennials don’t have just one go-to platform where they seek content, as there are so many out there—Google is the top place to search for information, plus social media sites. Immediate gratification is crucial, therefore if your content cannot be accessed easily, readily and widely, they will lose interest and move on to the next thing that captures their attention. They place great emphasis on identity and cultural relevance. If you want to appeal to them directly and successfully, it’s important that your content is not focused on a general audience, categorised by age.
If content doesn’t entertain or educate, it’s not useful. Millennials look for answers and in-depth content that add value to their life. They want a reason to connect with your content and, in turn, your brand. Whether it’s through humour, educational info or innovative thought leadership, building an emotional connection allows your brand to build a sense of trust. Brands need to attach value to their products or services for a millennial even to take a second look. Organisations need to persuade millennials to want to invest in their brand as longterm buyers and brand lovers— and future ambassadors.
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The Survey We asked. You answered
OFFICE PERKS VC–funded startups have long been known for their cushy amenities such as foosball tables and free lunch, but a poll of more than 100 directors and managers in the Fast Company US Most Creative People and Most Innovative Companies communities sheds light on the way businesses—both new and old—are rethinking the art of keeping their employees happy. More than 70% of respondents, from companies as varied as GE to Genius, say that their employees value experiences over things, or at least a combination of the two. Some stick with the triedand-true—regular happy hours, generous parental leave—and others are getting creative, offering volunteer days and round-trip plane tickets to anywhere in the world. Here are a few standouts:
18 FASTCOMPANY.CO.Z A SEPTEMBER 2016
“We have quirky celebrations when we meet our goals. These have included releasing doves, smashing Greek plates and, of course, lots of parties.”
“We offer full-body pro“After two years, pick fessional massages every [an affiliated] country, Friday to all employees.” and the trip is on us. Dan Harden After three years, take President and CEO, Whipsaw Inc. a month off to do what makes you happy— “One thing that feels your pay cheque will unique to our culture is Melanie Perkins keep coming.” Co-founder and CEO, Canva the Facebook Analogue Erin Lewellen Research Lab and the COO, Global Citizen Year “Everyone [has] access Woodshop. These are to free private sessions on-site facilities where “A sandbox. Offices from a professional any employee or intern with soundproof, therapist or coach on padded walls for the can learn how to do a weekly basis.” rough days. Book club. silk-screen, take a handLisa Kennelly Daily meditation.” lettering or drawing Director of marketing, Clue Heather Gordon class, or learn the basics Brand manager, Acorns of woodworking.” “We have a series where Margaret Gould Stewart anyone can volunteer “We [offer] an employeeVP of product design, Facebook to lead a workshop on a challenge grant where subject they have some REI gives an employee “We incentivise expertise in. Topics have $300 in products for employees to give back [ranged from] linocut any outdoor activity, as through initiatives like printmaking to funeral long as it’s a challenge— #TranslateBIG, where we directing to sushi making. took over a local food backpacking in the High [At] our annual retreat, Sierras, summiting bank to prepare and [singer] David Byrne was Mount Everest, running serve meals to the Beda guest speaker and a marathon in Thailand, Stuy community where joined us for lunch.” et cetera.” Biggie Smalls was born.” Stephanie Pereira Director of community education, Kickstarter
Steve Stoute Founder and CEO, Translation
Chris Gardner Director of Total Rewards, REI
Illustration by Ty Dale
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Jobs are risky too With encouragement, guidance and support for risk taking, entrepreneurship may well prove to be the safest and best path for our children, says Bruns.
Join the revolution How to change the way we grow a nation of young entrepreneur s B y Cal Bruns
Talking about starting your own company when you’re young is easy—actually doing it in South Africa is not. There are the obvious challenges, but young people must also negotiate complex social barriers (read: parents who hate the idea), lack of entrepreneurial role models in their communities, and families and an educational background that has failed to prepare them emotionally to take the risks necessary to build a sustainable enterprise. Despite these hurdles, we’ve found an amazingly diverse pool of young pioneers building businesses in communities across the country. Pioneer Nation was started to connect these young entrepreneurs—making it easier to support, inspire, collaborate and learn from one another. As we enter our third year of the Levi’s Pioneer Nation Festival, here are insights we’ve garnered time and again from this community:
Open young eyes to the diversity of opportunities. A key skill our young South African entrepreneurs need to develop is how to train their eyes to spot the variety of business opportunities and market gaps. Identifying consumer needs and unfulfilled marketplace desires can be a major challenge when traditional media so often features entrepreneurship exclusively in the context of tech ventures. Much media attention has also been given to social enterprises. We are seeing many entrepreneurs spark to this model (and become key drivers of social change in the process), but Levi’s and Pioneer Nation are also seeing more and more young people tap
20 FASTCOMPANY.CO.Z A SEPTEMBER 2016
into their personal passions to build highly unique, sustainable ‘traditional businesses’ that serve basic life needs in fresh ways. Each year we’ve been amazed at the absolute diversity of businesses young entrepreneurs have launched, and Pioneer Nation is working hard to feature this diversity.
Convince parents that jobs are now as risky as startups. In conversations we’ve had with nearly 3 000 young people over the past three years, we’ve heard on numerous occasions how parents set the study agenda through subtle and not-so-subtle pressure. However, the South Africa business landscape is vastly different to that of 1994, making the proposition of getting a job and keeping that job far riskier than ever before. Global competition, profit pressures demanding productivity maximisation, and an economy inescapably tied to world markets mean corporate jobs are nowhere near as secure as they used to be— and far more difficult to break into at entry level. With 40% of our population under the age of 16, South Africa will never be able to generate enough jobs for our emerging generations. Parents must accept that the world of their children is vastly different to the one they encountered—and change their advice accordingly. Entrepreneurship is not easy nor is success
Young entrepreneurs fully intend to transform our communities, because that’s their personal reward.
guaranteed; but with encouragement, guidance and support for risk taking, it may well prove to be the safest and best path we can encourage our children to take.
Tell them the truth about overnight success. For the past three years, Pioneer Nation has been meeting with young and old South African entrepreneurs doing amazing things, and not ONCE have we met anyone who has become an overnight success. Yet, traditional media continues to perpetuate the myth that there is such a phenomenon, and we’ve met so many young people who fear that when business success doesn’t come quickly, they are a failure. Malcolm Gladwell made popular the observation that it takes an average of 10 000 hours to become a master at something. In my conversations with young entrepreneurs, I often ask them to put pen to paper and calculate how many hours they’ve spent incubating and building their business. The results consistently surprise them! This 10 000-hour story applies equally to building a sustainable business, and there’s no one better able to tell this story to hopeful young entrepreneurs than young entrepreneurs themselves. By adjusting their expectations, they are far more likely to push past the tough times without feeling like they’ve failed—knowing everyone else has been on the same success trajectory.
Nurture the salesperson in children. I’m often asked which traits make a good young entrepreneur. I asked this question of one of South Africa’s most celebrated young Pioneers, Ludwick Marishane. He told me the answer is simple but so often overlooked by the litany of startup incubators out there: It’s the ability to sell. Marishane felt the best test of an entrepreneur’s aptitude to succeed is to give them a box of sweets and a street corner; the ones who come back with an empty box and a pocket full of money have the number-one talent needed to be a successful entrepreneur. I’ve personally witnessed this same trait in just about every successful entrepreneur I’ve met. Great entrepreneurs have a well-refined sense of empathy, able to connect with customers by understanding what it’s like to be in their shoes. From famous names like Steve Jobs and Sir Richard Branson, to the young entrepreneurs running modest enterprises like Department of Coffee in Khayelitsha and Thesis Lifestyle in Soweto—these entrepreneurs know how to sell. As parents, we should encourage our children to develop sales skills: It’s part technique, part ability to empathise quickly, part learning how to hear “no” without giving up. Don’t let them duck that school fundraiser—get them out there and help them learn how to sell!
Make them this generation’s rock stars. There are amazing entrepreneurs around us in every community. Their importance and value to our communities is far greater than the limited pool of sports and music stars we so ‘love to love’. Our research
shows we don’t need to work together to accelerate the aspirational value of becoming an entrepreneur; a majority of our young people want to own and operate their own businesses. But to create a better world for our children and ourselves, we need to expose them to the diversity of successful small enterprising entrepreneurs around us in all our communities, and celebrate those young ones who want to follow in their footsteps. Just point out to your kids that, behind every business in your community, is an entrepreneur who is making a job for him or herself and a living for their family by providing a service the community values and is willing to pay for.
Celebrate their ubuntu community impact. In our survey among 2 600 young people (statistically representative of South Africa in racial, income, geography and gender), we asked how they would know they’d become a success. We offered them a basket of choices: When I’ve made lots of money; When I’m the boss; When lots of people know who I am; When I’ve made a difference in my community. Amazingly, 57% chose the latter. Young entrepreneurs not only hold the key to transforming our communities; they fully intend to transform our communities, because that’s their personal reward. In the northern hemisphere, trickledown economics have been a failed theory of social advancement; we believe an African entrepreneurship revolution may show a vastly different result.
Teach the basics of cash flow in Grade 10. We should be bringing the secrets of cash flow to life for every child in high school if we want to nurture a generation of successful entrepreneurs. I propose that Grade 10 is the perfect time to do so. Grade 9 is a little too young—students are preoccupied with raging hormones, social pressures and coming to grips with the high-school curriculum.
Grade 11 is focused on cramming everything in before the big matric pressure hits, and Grade 12 is 100% focused on exams. But in Grade 10, students have made subject choices and are starting to engage mentally with their impending future as fully fledged adults. Acquiring a solid grasp of cash flow principles is not complicated, but can be brought to life in a pragmatic, life-relevant way. We’ll better prepare entire generations for the personal and career challenges ahead, and lay the groundwork for a generation of sustainable entrepreneurs. Embrace the notion that small IS big. The Silicon Valley entrepreneurship mantra is focused on scalability, but for South Africa, that may not be the best vision right now. Running sustainable, rapidly scaling enterprises requires expertise our country is woefully lacking. Our real challenge is how to give a generation of young people a future in a world without enough jobs to go around. Running a small business that turns over R2 000 every day is quite doable for many of these young people, and we can equip them with the right technical and emotional support. This R2 000/day average turnover becomes a small business with an annual turnover of R730 000— more than enough to support the entrepreneur and possibly an additional employee. They not only become viable customers for each other, but they become an interesting market for innovative products and services that add value to this tier of business. For every 2 000 of these modest sustainable small businesses we get up and running, we add nearly R1.5 billion to our economy. Pioneer Nation is committed to nurturing this revolution of growth in sustainable small businesses run by young entrepreneurs. In South Africa, embracing small becomes a very big idea indeed.
Cal Bruns is founder of the Pioneer Nation & Levi’s Pioneer Nation Festival.
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Gallo Images/Getty Images/ Isaac Brekken
PEOPLE NEED A
BLUEPRINT THE WORLDâ€™S NUMBER-ONE WEALTH COACH JT FOXX IS SHOWING ORDINARY CITIZENS HOW TO UNLOCK THEIR INNER ENTREPRENEUR
Interview by Evans Manyonga
THE EXCITEMENT IS PALPABLE AS UFC ANNOUNCER BRUCE BUFFER BELLOWS OUT I N H I S W E L L- R E C O G N I S E D VOICE: “LADIES AND GENTLEMEN! AND N O W, L- I - V - E F R O M C A L I F O R N -YA A A , COMING UP TO T H E S TA G E : T H E H E AV Y W E I G H T, UNDISPUTED CHAMPION OF MEGA PARTNERING, J … T… F O X X ! ”
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Many international speakers have come to our shores with elaborate shows and even more elaborate promises of helping South Africans to become ‘great’. But they have largely failed to live up to their hype—except one. With successful businesses in over 40 countries including the UK, Canada, Dubai, Australia, New Zealand, Norway, Botswana, Singapore and South Africa, JT Foxx has taken global entrepreneurship to another level. Hailed as the world’s number-one wealth coach, he has featured on CNBC Africa, local TV breakfast show Morning Live and even the popular soapie Isidingo; one would be forgiven for assuming Foxx has his roots in South Africa. But he started from humble beginnings in Canada, growing up in a middle-class family and suffering from a speech impediment; by his own admission, he was not very popular at school and became depressed. All these circumstances could have stymied him at a young age, but the strong drive to succeed shaped JT Foxx into the world-renowned serial entrepreneur he is today. He has coached some of the top global entrepreneurs such as three-time Super Bowl Champion Michael Irvin, lingerie tycoon Michelle Mone, and South African business magnate Robert Gumede. Also known as “the millionaire underdog”, Foxx takes a special interest in unicorn companies: potentially successful startup businesses—mostly in the technology, mobile tech and IT sectors—that have high value but an astounding failure rate. Foxx takes on these companies as ‘pet projects’ and helps them become the successful high net-worth brands they should be. To create and maintain wealth, he believes business owners should get the right strategy, the right system, the right information and the right coaching. Foxx has been a regular visitor to South Africa over the past three years and has made a lasting impression on promising entrepreneurs and business icons. His ultimate aim is to create millionaires in this country by coaching clients, helping them strategise, and exposing them to other successful businesspeople who can invest, mentor and collaborate with them through Foxx’s Intelligent Millionaires Network. In his early 30s, Foxx’s drive and passion to make this planet a better place for entrepreneurs, young and old, has inspired and motivated many around the world—as evidenced by his often sold-out Mega Partnering and Mega Marketing events. His personal story has shown that anyone is capable of success. Foxx spoke to Fast Company SA editor Evans Manyonga about business, life and the future. One thing is clear: He strongly believes South Africans have great potential.
Foxx moved to the US with $974 dollars to his name—and nothing more than an old Ford pickup truck and a burning desire to succeed.
Beyoncé, onstage in Atlanta, is inspiring brands far beyond the music world.
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“There are a lot of people who talk about success, but he’s the real deal,” Arnold Schwarzenegger has said of JT Foxx.
date—a waitress at a restaurant we used to visit every Sunday! We weren’t poor, but we weren’t rich either. My parents were very frugal.
HOW DID YOU GET YOUR FIRST BREAKTHROUGH IN THE WORLD OF BUSINESS? At first I wanted to be a priest, but my own priest told me that maybe God had a better plan for me. Speaking was not it, so I decided to be an attorney, although my grades weren’t high enough and I couldn’t afford the cost of law school. I went through serious depression for about six months until I woke up in the middle of the night and saw an infomercial on how to make money in property. I first thought it was a get-rich scheme, but I was already broke and depressed so I thought, why not? So I bought the training kit, moved to the US from Canada with $974 dollars to my name—and nothing more than an old Ford pickup truck with 317 000km on it. I was in pursuit of the American Dream!
WHAT EXACTLY DOES A WEALTH COACH DO? A wealth coach is someone who helps people start or grow their business. He helps come up with ideas and broadens an entrepreneur’s way of thinking. It’s always advisable to check with a wealth coach before making big moves in business to avoid making mistakes. In essence, a wealth coach is a shortcut, because doing things yourself could be very difficult.
“You need that fire in the belly; you need to want to succeed as badly as you want to breathe. That’s something you can’t put inside someone—they either have it or they don’t.”
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CAN YOU GIVE US A BRIEF HISTORY OF YOUR BACKGROUND—WHERE YOU GREW UP, YOUR FAMILY? I grew up in Montreal, Canada with a French mother and English father. I was more of a ‘loser’ growing up, probably the least popular kid. It was very hard to find friends, especially because of my speech impediment. I was so unpopular that my dad had to find me a prom
VARIOUS PERSONALITIES HOLD YOU IN HIGH REGARD; APPLE CO-FOUNDER STEVE WOZNIAK IS ONE OF THEM. WHAT DISTINGUISHES YOU FROM ‘THE OTHER GUY’ WHO CLAIMS TO BE A GREAT WEALTH COACH? Woz is more of a friend, and one of the most genuine guys I’ve ever met. I love listening for hours about how he and Steve Jobs were coached and all the mistakes and successes they made earlier on. I’m a big fan of Al Pacino, Sylvester Stallone and Arnold Schwarzenegger, who have all attended my events. I have to say that Stallone is probably one of the smartest guys I’ve ever met. I’m blessed to have so many great friends who believe in me and are happy to do business with me.
HOW DID YOU BECOME THE NUMBER-ONE WEALTH COACH IN THE WORLD—AND WHAT DOES THAT MEAN TO YOU? It’s not only the fact that I’m one of the highest paid coaches on the planet, and the fact that I operate in 41 countries, but I’m numberone because it’s all about results. No one has helped clients start or grow businesses like my organisation has—and we have the proof, as many of them have been featured in the media.
YOUR LINE OF WORK IS VERY CONTROVERSIAL, AS YOU DEAL WITH DIFFERENT PEOPLE WHO FORMULATE
DIFFERENT OPINIONS OF THE INDIVIDUAL, DESPITE THE MESSAGE. WHAT IS YOUR TAKE ON THIS? Well, in anything you do, there will always be haters, non-believers and doubters. My results don’t lie and I don’t apologise for being a polarising figure the likes of chef Gordon Ramsey, Simon Cowell, Steve Jobs and Mr Trump. But we all have something in common: We all say it how it is. People may not like it, but at least we’re honest and our results don’t lie. Remember, whoever is trying to bring you down is below you.
YOU ARE A SERIAL ENTREPRENEUR IN VARIOUS INDUSTRIES. WHICH SECTORS
OF BUSINESS INTEREST YOU MOST? TO WHAT EXTENT ARE YOU INVOLVED IN THESE INDUSTRIES? Property, education, coaching, online businesses, events, technology, gold, diamonds, short-term movie lending . . . My goal is to expand to about 100 companies! When it comes to wealth, you can’t put all your eggs in one basket. The key is to diversify and be hedged, so when the market is hedged and turns, you’re not affected.
WHAT MOTIVATES YOU TO CONTINUE WORKING AND SUCCEEDING? Right now they call me “the next billionaire”. I want to make my first billion and give it all
BIG GER A ND BE T TER How JT Foxx’s organisation has helped budding businesspeople around the world
Millionaire Underdog Club, VikkiThomas.com
“The people he put me in touch with . . . have not only excelled my business opportunities but also my business.”
You Got Promoted
“Etter noe coaching, har jeg en helt annen fremgang . . . og forståelse for business.” (“After some coaching, I have a completely different method . . . and understanding of business.”)
“I am now living my vision; every day I can see the impact I’ve made in people’s lives”.
The ONE Photography
“[JT Foxx] showed me . . . how to get branded and how to deal with the marketing issues with which I was struggling.”
ONE Concept Group Ltd
“My business is now in its best shape ever, with ongoing joint-venture projects, new channels being set up, and expansion to many other countries in the Asia-Pacific.”
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3 0 the right system, the right information and the right coaching. It’s as high-level as you can get. I teach people what I did yesterday, what I did today, and what will work for them tomorrow.
WHAT DOES WEALTH MEAN IN THE BIGGER PICTURE? IS IT JUST ABOUT MAKING MONEY AND GUARANTEEING A COMFORTABLE LIFE, OR IS THERE MORE TO IT? Money doesn’t bring happiness, it brings freedom: the ability to do whatever you want, whenever you want and with whomever you want.
Foxx’s Mega Partnering events are always sold-out affairs—with special guests such as Al Pacino and Sylvester Stallone.
to charity. Business to me is like a game, and money is how I keep score. The more I make, the more I can give away. Money doesn’t motivate me, though—progress does. Am I a better person today than I was yesterday, and will I be better tomorrow than I was today? As long as you are progressing, you are moving.
YOUR SEMINARS FOCUS ON CREATING WEALTH AND MAINTAINING IT. WHAT ARE THE CORE ASPECTS YOU LOOK AT? I focus on helping to get the right strategy,
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ARE THERE ANY GUIDING PRINCIPLES YOU SHARE? Success has four key principles in business: marketing, branding, relationships and coaching. These four in tandem can make anyone’s business unstoppable. Which qualities should someone wanting to start or grow a business cultivate? First and foremost, you need that fire in the belly; you need to want to succeed as badly as you want to breathe. That’s something you can’t put inside someone—they either have it or they don’t. There are two reasons people don’t succeed. Number one is excuses: The less excuses people have, the more successful they will become. And number two is what you don’t know: If you knew what I knew, you’d be more successful than I am, because you’d avoid all my mistakes.
WHAT IS THE MOST IMPORTANT THING YOU WANT PEOPLE TO TAKE AWAY FROM YOUR TALKS AND SEMINARS? I want people to know that nothing is impossible, and that you don’t live once— you live every single day and die once. You can always make more money, but you can’t get back time.
YOU HAVE SET YOURSELF AN OBJECTIVE OF MAKING SOUTH AFRICAN MILLIONAIRES OR DOLLAR MILLIONAIRES. HOW WILL YOU ACHIEVE THAT? As with anything, people need a blueprint. I think the best way to achieve this would
S E C O N D S
Favourite saying? “Don’t manage the process of your business—manage the results.”
Favourite book? Millionaire Underdog!
Favourite destination? South Africa, of course.
Favourite city? Durban.
Favourite tech gadget? My iPhone.
W I T H J T F O X X
Describe your ideal day? Wake up at 05h00, read 20 newspapers worldwide, work out, 30 minutes of strategic thinking; start the workday at 07h00, looking at all the reports from my businesses, check email; spend the afternoon working on getting new business, attend meetings with key reports, speak to media; business dinner in the evening; plan for the next day; by 20h30 unwind and watch a movie, or get on a plane to the next city.
Your greatest inspiration? Steve Jobs.
Advice to entrepreneurs: Don’t do your best, but do whatever it takes.
be my starting the Intelligent Millionaires Network all across South Africa, which will create more millionaires and create that blueprint, expose people to other millionaires and, more importantly, hold them accountable every single month. I’ve been flying in and out of South Africa for my events. Now I want more accountability and structure, and to be able to monitor our clients’ success. The ultimate point is that those with whom you spend time will shape who you become. Through this global millionaires’ network, South Africans will be able to network and strategise with other entrepreneurs. YOU HAVE BEEN VISITING SOUTH AFRICA REGULARLY. WHAT HAVE YOU LEARNT, AND WHAT DO YOU THINK ABOUT THE COUNTRY AND ITS PEOPLE? I’ve learnt that this is a third-world country with first-world people. Once South Africans believe they are unstoppable, like they did in the [Rugby] World Cup in 1995,
anything is possible. Since Mandela passed away, this country is more divided than it’s ever been. People are fearful of the future and see very little hope. That doubt and fear is turning people toward hate and racism again. People are pointing fingers rather than coming together. South Africa is one of my favourite countries in the world, and once people focus on creating their own economy rather than blaming it, they will find results and success. Is it easy? Of course not, but out of the more than 40 countries in which I do business, many of the top clients come from South Africa. Who would’ve thought that? YOU RECENTLY PUBLISHED YOUR BOOK, MILLIONAIRE UNDERDOG. WHAT INSPIRED YOU TO WRITE IT? WHAT CAN READERS EXPECT? I believe it’s the best business book of all time, because there’s no fluff: I say it how it is and I go very deep into the aspects of starting, growing and exploding one’s
“A wealth coach is someone who helps people start or grow their business. He helps come up with ideas and broadens an entrepreneur’s way of thinking.” business. I wrote under the premise of starting from scratch, with knowing what I know now. So far, the results and feedback have been mind-blowing. People are reading it three or four times—each time they do, they learn something new.
WHAT CAN WE EXPECT FROM YOU GOING FORWARD? More buying of businesses and real estate, and focusing on more passive wealth, and much more attention on the JT Foxx Foundation.
Future of Work
BRAIN TRUST Microsoft’s plan to bring people with autism into the workforce is a bold experiment in the power of neurodiversity By Vauhini Vara
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Blake Adickman had gone through a run of unfulfilling IT jobs at small, noname companies when, this past April, Microsoft invited him to travel from his home in Florida to Redmond, Washington to interview for an engineering position. He’d heard about Microsoft’s gruelling application process and imagined sitting through exhausting conversations and technical tests. Instead, he found himself in a conference room, listening to classical music and working alongside 16 other candidates to build devices out of Lego. Over the course of two weeks, managers stopped by the room to chat. By the end, Adickman considered some of his competition to be friends. The whole process, he said, was “extremely relaxed”. This was, in fact, the point. Adickman,
26 years old, is autistic, which affects his communication and thought processes; he has some trouble maintaining eye contact, for instance, and he occasionally isn’t sure that he is catching social nuances in conversation. He was participating in a year-and-a-half-old programme developed by Microsoft to identify great autistic job candidates by putting them through an application process that is better suited to their communication styles. Gone are the back-to-back interviews, replaced with several days of informal observations and conversations, along with more traditional interviews. And it doesn’t end there: Upon being hired, autistic employees are assigned mentors to help with issues as mundane as figuring out which bus to
ride to work and as complicated as having a tough conversation with a boss; their managers and colleagues go through special training sessions. Microsoft isn’t the first company to attempt to identify and support such employees—the German software firm SAP, among others, has similar initiatives— but it is the highest-profile one to have gone public with its efforts to expand the notion of employee diversity beyond traditional categories such as gender and race. And though Microsoft’s programme is still nascent, its impact could be far-reaching. It has been almost two decades since an Australian sociology student, who was on the autism spectrum herself, coined the term “neurodiversity” to signify that brain variations are normal and should be respected, just like differences in gender and race. While that concept has gained some traction in schools,
Problem solver “The [autism] unemployment rate is chronic,” says Microsoft’s Jenny Lay-Flurrie. “It’s not a reflection of the talent pool.”
the corporate world has taken little overt notice. But that may change soon. Diagnoses of autism spectrum disorder (ASD), a catchall name that includes a range of symptoms from muteness to the milder social awkwardness of what is also known as Asperger’s syndrome, have become much more prevalent over the past couple of decades. One in 68 children was diagnosed with ASD in 2012, up from one in 10 000 in the 1980s—a spike that many researchers connect to growing awareness. Soon these children will be old enough to enter the workforce. About half of autistic children have average or above-average intellectual ability, according to the CDC. But the unemployment rate is extraordinarily high—up to 80%, says the advocacy organisation Autism Speaks (though precise figures are hard to come by). “As a whole, people with autism—even those who are quite
bright and intellectually quite capable—are facing worse job prospects because of their social challenges,” says Dave Kearon, the director of adult services at Autism Speaks. Kearon and other experts believe that companies’ traditional hiring processes are biased against autistic candidates. Someone who looks at his lap instead of at his interviewer, for example, may come across as awkward or even rude. This can be especially frustrating for highfunctioning autistic people with university degrees. “They can’t get a job that’s commensurate with their abilities,” says Kearon. The situation is now attracting the attention of people who are in the position to change it: high-level corporate executives who happen to have autistic children. Early last year, two such Microsoft employees began laying the groundwork for a new hiring programme, inspired by CEO Satya Nadella’s
IN GOOD COMPA N Y Microsoft’s efforts are part of a larger movement by corporations to bring autistic adults into the workforce. Here’s what others are doing SAP The German software company launched its pioneering Autism at Work programme three years ago. It has since hired more than 100 people, with a retention rate above 96%.
FORD The automaker kicked off its FordInclusiveWorks initiative in June. In partnership with the Autism Alliance of Michigan, the job-training programme places individuals in Ford’s productdevelopment group.
FREDDIE MAC With the Autistic Self Advocacy Network, the mortgage loan company created an internship programme for students and recent college graduates, placing them in divisions like IT, finance and investments and capital markets.
WALGREENS At Walgreens distribution centres in South Carolina and Connecticut, 40% of employees are people with physical or mental disabilities including autism. The centres have become so productive, they inspired Walgreens to create a store-training facility for autistic workers.
HEWLETT PACKARD ENTERPRISE Hewlett-Packard partnered with Australia’s Department of Human Services and the Specialist People Foundation in 2014 to create a five-week training programme called Dandelion. It has resulted in more than a dozen hires.
Photograph by Ian C. Bates
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Future of work
The new recruit A recent Microsoft hire, Blake Adickman heard about the company’s autism programme from his college’s career services and disability office.
mission to transform the company’s culture to be more open and fast-moving. (He also has personal experience with the challenges of disabilities: Two of his children have special needs.) Mary Ellen Smith, corporate vice president of worldwide operations, and Jenny Lay-Flurrie, now Microsoft’s chief accessibility officer, had seen through their children and children’s friends that many autistic people are not only capable of meeting serious intellectual demands, they also have qualities that can be suited for tech jobs, such as being detail-oriented and skilled at pattern recognition. Perhaps by adjusting the hiring process, LayFlurrie thought, Microsoft could gain a competitive advantage by discovering great candidates whom other companies were overlooking. Smith spotted another opportunity: More than 1 billion people across the globe have disabilities. “The better we
represent all people on the planet, the better [Microsoft is] going to be able to serve all the people,” she says. Nadella sees the programme as part of the company’s broader mission to make products for “people of all abilities”, in part through hiring programmes that “foster an inclusive culture that seeks out and learns from diverse perspectives.” With the help of Neil Barnett, Microsoft’s director of inclusive hiring and accessibility, Smith and Lay-Flurrie sketched out a small hiring programme. They would identify, through an open application process, a handful of high-quality candidates who would come on-site for several weeks to work on projects and meet managers with open positions. The goal: Make as many good matches as possible, though it would be up to managers to decide whether to extend an offer. Microsoft received 700 résumés for about 10 spots in the April 2015
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pilot programme. Since then, it has held three more sessions, the latest one in August this year. The early results have been modest but promising: 16 people—nearly half of the candidates invited to the campus—have been hired, most of them in entrylevel technical roles including programmers and data scientists. So far, all have performed at or above expectations. None has left Microsoft. Lay-Flurrie and Barnett are now trying to scale the programme—holding it four times a year. “It’s great that we’re hiring five or 10 or 15 people, but to really drive that inclusive culture, we’ve got to figure out how to get a lot of these things into the mainstream,” Barnett says. To facilitate this, they’ve shortened the programme from four weeks to two and expanded the applicant pool, which was initially restricted to locals, to candidates from all over the country. Still, they face some
persistent difficulties including identifying managers who are hiring for appropriate positions. One serious challenge is that there’s no well-established pipeline of autistic candidates for technical positions. To hire programmers who are women or people of colour, you can go to conferences or organisations for engineering professionals from those backgrounds, but there’s no analogue conference circuit for recruiting autistic professionals; what’s more, some autistic people hesitate to advertise their condition to potential employers. Microsoft has been tapping universities’ disability offices and autism organisations, but Barnett and his colleagues wonder if they’re reaching even a fraction of the qualified candidates. At the end of the second hiring session, although 13 jobs were open, managers felt only five candidates met their high bar for employment. After his visit to Microsoft, Adickman went back home to wait and see if he’d get an offer. He had felt an unusual sense of ease when he’d visited Microsoft. With his characteristically clinical attention to detail, he’d noted that because so many people smiled at him on campus, they must be happy with their jobs. Exactly two weeks after leaving, he got a call from a recruiter: He’d made it. Microsoft was offering him a position as an engineer, at a salary so much higher than what he’d previously made that it seemed extraordinary to him. In June, he moved to Redmond, with his parents’ help. And a couple of days before he reported to work, his family all went to lunch at a Thai restaurant. Over pineapple fried rice, his mother recalled that years earlier, a psychologist had warned her that her son wouldn’t even go to college, let alone become a successful professional. She never believed it. Now she wanted to find that man and tell him just how wrong he’d been.
Photograph by Ian C. Bates
FOOTLOOSE Cole Haan’s fresh wingtip oxford behaves like a running shoe By Lauren Schwartzberg
Photograph by Keirnan Monaghan & Theo Vamvounakis
For an 88-year-old producer of time-honoured driving shoes and classic loafers, Cole Haan embraces a widely accepted, very contemporary corporate rallying cry: “Respect tradition enough to reinvent it.” Scott Patt, vice president of design and innovation, used that maxim two years ago to issue a challenge to his team. What could they do, he asked, to transform the iconic but notoriously inflexible wingtip oxford into a comfortable performance shoe—without compromising its elegance?
The problem There’s a rite of passage for every fashionable young man: trying on his first oxford. But what Patt says looks like a work of art on the shelf feels like a relic—it’s too hot, too stiff, too heavy. He thought there had to be a better option.
T h e e p i p h a ny As a 15-year veteran of Nike who joined Cole Haan in 2013, Patt knew how to build comfort and movement into a shoe. He instructed designers to experiment with cutting varying flex patterns—small slices in the sole that help it mimic the way the foot naturally moves—into the oxford. Yet, even with a more pliable sole, the rest of the shoe was too firm. Patt realised he’d have to rethink the traditionally rigid leather
and uniform wingtip pattern— elements once considered too untouchable to modify.
T h e exe c u t i o n To increase flexibility, Patt’s team cut barely noticeable notches on the top of the sole where it attaches to the leather exterior, and on the orthotic (or what Patt calls the “sock liner”) that comes inside every shoe. They also found a way to use the conventional wingtip perforations, known as
broguing, to provide additional breathability—experimenting with more than 50 patterns. As a finishing touch, they added extra padding on the tongue and heel, making the black-tie accessory feel even more like a sneaker.
The result This September, Cole Haan will release the GrandRevølution Washington, a $400 (R5 800) high-end men’s dress shoe with a range of motion, capable of
bending, right out of the box, without damaging the leather— no breaking-in required. The company plans to apply the same design elements to its line of women’s pumps and sandals, as well as men’s loafers. For Patt, no tradition is too sacred for an upgrade: “The opportunities for reinvention are pretty limitless across the brand.” See www.colehaan.com. SA orders include a $70 shipping & handling fee, plus duties and taxes.
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FACEBOOK’S BEAUTIFUL MIND The social network is in a race to master artificial intelligence and machine learning. Here’s how it may win By Daniel Terdiman
Photograph by Celine Grouard
In June, Facebook unveiled a new technology with a remarkable ability: DeepText, an artificial-intelligence engine that can understand “with nearhuman accuracy”, according to its engineers, the content in thousands of posts per second—in more than 20 different languages. The program, which promises to grow increasingly adept at grasping the subtleties of human communication, has profound implications for how Facebook serves up content, products and services to its more than 1.65 billion active monthly users. On Facebook’s Messenger app, DeepText can anticipate when someone needs a car and serve up a link to Uber; on the site’s News Feed, it can analyse a person’s interests to surface the most relevant stories and comments. Ultimately, it can help Facebook create a more personalised and seamless user experience. As CEO Mark Zuckerberg wrote in a June post about his company’s AI investments, “One of our longterm initiatives is to build a new generation of Internet services that are more intuitive and can more easily connect you with the things you care about by understanding the meaning of
Heady matters Facebook’s Yann LeCun is leading a team who teaches machines common sense.
voice, text, images, videos and other information.” Over the past few years, the biggest companies in tech have coalesced around the idea that the next era of computing will be defined by artificial intelligence (also known by myriad other terms such as “machine learning” and “deep learning”, which all effectively mean that advanced algorithms can perform human cognitive tasks). Microsoft has several hundred scientists and
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engineers doing AI research. Amazon CEO Jeff Bezos recently said his company has a thousand people dedicated to its voicerecognition ecosystem alone. Apple and Uber are also investing heavily in the space. But the 400-kilogramme, preternaturally intelligent gorilla is Google, which has established itself as the AI leader—aided by a series of acquisitions that underpin everything from its search engine to driverless cars.
Facebook has more than 150 people devoted solely to AI initiatives, and execs say they’ve tripled their investment in processing power for research (without specifying the amount). But the company is relying on more than money to compete. Its real advantage lies in a pair of unique labs, one of which is designed to explore the outer edges of AI while the other is making viable products inspired by their findings.
Facebook’s most important investment in this space has been Yann LeCun, who joined the company in 2013. One of the most accomplished scientists in the field, LeCun helped found a branch of deep learning known as convolutional neural networks, which are the building blocks for developing scalable automated natural-language understanding, image-recognition tools, and even voice-recognition and visualsearch systems. LeCun now heads the Facebook Artificial Intelligence Research programme (FAIR), a team of 60 people who concentrate on fundamental science and longterm research in the sphere. Think of FAIR as a streamlined version of an old-school corporate R&D lab whose success is measured more in scientific advancement than in product creation. “The main mission of Facebook is connecting people,” LeCun says, “and the first thing you have to do is make sure the communication works between people through translation.” To that end, he has tasked his team— many of them academics—with an ambitious assignment: to teach machines common sense by giving them the ability to learn through observing the world. FAIR’s biggest project right now is natural-language understanding for dialogue systems, which will power Facebook’s AI-fuelled assistants including its yearold M, which lives inside the Messenger app. This system
S M A R T ER P R ODUC T S How AI advances are changing the way you experience Facebook
Photograph by Christophe Wu
Product pipeline Joaquin Candela’s Applied Machine Learning lab at Facebook turns research into user enhancements.
would also be the foundation for automatic-language translation: a feature Facebook considers crucial as it grows internationally. The yin to FAIR’s Yann is Joaquin Candela of Facebook’s Applied Machine Learning lab (AML). Candela, who previously worked as an engineering manager at Facebook, keeps AML focused on using work such as LeCun’s to create deployable products
including automatic captions for videos and better algorithms for ranking feeds, ads and searches. One of AML’s newest teams, computational photography, is working on programs to stabilise videos and organise visual content on users’ phones. LeCun’s and Candela’s teams work together to translate science into products. “They have to have personal relationships,” says LeCun of the two labs. “And they have to collaborate really closely.” That’s why Facebook keeps data—and people—moving freely between the two groups of researchers. The facial-recognition
Facebook’s year-old app, which lets people share snapshots with friends, uses image recognition to identify human faces on your camera roll—with 98% accuracy.
Facebook automatically translates News Feed items into more than three dozen languages for some 800 million people every month. In the future, DeepText will be able to further customise feeds based on users’ interests (rather than simply likes and shares).
At a conference in April, Facebook demonstrated a tool that would allow people to search for and filter photos with keywords, thanks to technology that automatically identifies what’s in an image.
team, for example, started at FAIR and later transitioned to AML. DeepText, too, was a direct implementation by AML of FAIR’s work on classifying and understanding text. Much of this exchange is enabled by a proprietary research and engineering pipeline created by Candela’s group that allows any Facebook engineer to test and share AI projects internally. “This is the beautiful thing,” Candela says. “I always encourage people to beg, borrow and steal. You don’t have to reinvent the wheel.” Members of the labs are also encouraged to be as open as possible—publishing, speaking and sharing open-source code as they would at the university labs on which FAIR and AML are partially modelled. Facebook’s research dynamic has already yielded new products, some more subtle than others. When the Moments app launched last year, its uncanny ability to automatically scan a user’s camera roll and identify friends’ faces took some people aback. Today, Moments is among the most downloaded apps in the Android and iOS stores. And as long as FAIR and AML are coming up with breakthrough AI developments that enable such hits, Facebook will give them the resources they need to compete. As CTO Mike Schroepfer says, “Both groups have paid for themselves for the next five or 10 years, easily.”
Auto Accessibility Facebook’s recently unveiled object-recognition technology can tell vision-impaired users what’s in a photo.
M This Messenger-based assistant can help users make purchases, restaurant and travel arrangements, and appointments. LeCun hopes to make M even more useful by imbuing it with common sense.
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CYBER IMMUNITY How a new cybersecurity approach based on the human immune system could keep your data safe By Steven Melendez Illustrations by Jon Han
The programme co-ordinator at the Catholic Charities of Santa Clara County in California never suspected that an email she received earlier this year contained anything more than the corporate invoice it claimed. But as soon as she opened the attachment, malware began to encrypt data on her computer. The breach threatened to expose far more than just her personal files: In order to provide its customers with healthcare, immigration assistance and other social services, Catholic
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Charities handles the medical and financial records of more than 54 000 people each year. Of all the cybersecurity systems—including firewalls and antivirus software— that the non-profit had in place to shield those sensitive documents, only one flagged the intrusion. The security breach was detected by the flagship product created by Darktrace, a UK–based cybersecurity company founded in 2013. Just days before the malware attack, Catholic Charities had begun testing Darktrace’s pioneering new technology, the enterprise immune system (EIS). Modelled after the human body’s immune system, the EIS embeds in a computer network and learns what behaviour is considered normal for that system. It can then spot suspicious activity and even work to slow an attack, just as the human immune system releases antibodies at the first sign of invasive cells. Darktrace’s immunity approach represents a compelling new take on cybersecurity. The $75-billion (R1.1-trillion) industry is under mounting pressure to evolve beyond traditional methods as dated systems have failed to prevent high-profile hacks on major businesses. With attackers increasingly relying on fast-moving algorithms to carry out highly sophisticated security breaches—such as those that have recently compromised major universities and hospitals in the US—Darktrace is responding in kind, creating complex formulas that allow machines to continuously scan entire networks and register anomalies that other advanced systems may overlook. Its technology, built in part by former members of the British Intelligence Agencies MI5 and GCHQ, is intended to support— and enhance—existing systems. Where most cybersecurity companies focus on teaching their technology to recognise the digital footprints of malware (which can quickly become outdated as
S E L F - DE F E NCE How Darktrace halts a hypothetical ransomware attack BREACH An HR employee opens an attachment believing it is a CV. His computer connects to a server in Eastern Europe; ransomware begins encrypting files.
RECOGNITION The EIS spots an anomaly: No device in the company’s network has ever connected with this server.
REACTION As ransomware encrypts documents, Darktrace flags the employee’s computer for accessing so many files.
RESPONSE Antigena, Darktrace’s system for slowing attacks, limits the number of files the employee’s computer can open and blocks its access to shared folders and corporate email.
NOTIFICATION Within a half-hour of the breach, a Darktrace analyst sees the activity and tells the company to remove the computer from the network. Some of the computer’s files have been compromised, but the ransomware did not spread through the network.
new attacks emerge) or building firewalls to block intruders, Darktrace takes a more handsoff approach. Rather than rely on humans to feed them specific examples of suspicious behaviour, its algorithms train themselves to find abnormalities—a technique that’s known as unsupervised machine learning. “The concept of Darktrace says that [as attacks become more sophisticated] you’re not going to be able to keep the bad stuff out,” says Vanessa Colomar, a member of Darktrace’s board of directors. It’s far more effective to figure out how to stop attackers once they’re in. CEO Nicole Eagan says the EIS has been deployed in more than 1 000 networks worldwide, with clients ranging from a two-person hedge fund to a global bank. Once the hour-long installation is complete, the EIS searches for new threats while also examining the network for existing breaches. “Within the first and second weeks, we find things out of the ordinary in about 80% of the Fortune 500s we’re deployed in,” says Eagan. “It’s things their legacy tools totally missed.” That success has helped accelerate the three-year-old company’s growth. Of the businesses that have registered for its 30-day free trial, about two-thirds have become paying customers. The company, valued at $100 million (R1.4 billion), now has 20 offices, including outposts in New York, Hong Kong, Warsaw and Milan. Darktrace’s use of unsupervised machine learning comes with certain benefits: Since there are no assumed rules about what a hack looks like, attackers can’t simply tweak their code to dupe the system. And since the EIS operates as an observer, there’s no barrier that hackers could try to disable. “What we’re really passionate about is that there’s no one algorithm that rules them all,” says Dave Palmer, Darktrace’s
director of technology. “We’ve got a dozen different machine-learning techniques, all fighting to be the best representation for your specific setup.” (See sidebar for an example.) Not everyone agrees that unsupervised machine learning is the best approach to cybersecurity. Supervised learning—the technique used by antispam filters, in which algorithms are taught to discern between junk mail and the real thing—can help eliminate false positives that sometimes result when an unsupervised system reacts to a routine change within a network. (For example, an algorithm may notice that data is suddenly being transferred to Dropbox and flag it as a security violation, when in fact the company just added Dropbox as an official storage tool.) Avoiding such confusion is why some security companies take a hybrid approach of supervised and unsupervised machine learning. PatternEx, which launched in February, uses unsupervised learning to scan for abnormalities, then presents its data to a human analyst to distinguish true attacks from false positives. In a recent study, researchers from PatternEx and MIT found the system caught 85% of attacks, while delivering fewer false alarms than unsupervised learning alone. There hasn’t been a similar lab study completed on Darktrace, though Eagan says her system—despite being totally unsupervised— typically generates five to 10 alerts per client per week. Eric Ogren, a senior analyst at IT advisory firm 451 Research, says that most businesses will likely opt for the headache of false positives if it means a more secure network. “What’s the bigger risk: that you chase down a false positive, or that someone makes off with your customer data?” he asks. “I think that within five years, unsupervised machine learning is going to be driving security architecture.”
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RUN THE ROAD Tesla isn’t just making groundbreaking electric vehicles. It’s upending the way cars are sold across the country—and it’s making a few enemies along the way By JJ McCorvey
Illustrations by Yukai Du
I am in a car that is driving itself on the Brooklyn–Queens Expressway (one of the busiest highways in the US) and I am freaking the hell out. “Hold the steering wheel, but still let it do its own thing,” Michael, a product specialist for the electric-vehicle maker Tesla Motors, gently cautions me, trying to snap me out of the wide-eyed stupor brought on by watching the wheel of my Model S steer around a curve as if guided by invisible hands. As we pass through Brooklyn’s Carroll Gardens neighbourhood and the
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waterfront complex of Industry City, my anxiety eases enough to start asking Michael about how the autopilot feature works (the car’s sensors analyse traffic patterns and read lane markers), how frequently Tesla beams software upgrades to its vehicles (as often as once a month), and the car’s top speed (250km/h, 0 to 60 in 2.8 seconds). “Just by taking a good look at you, I feel like you’re already comfortable with driving a Model S,”
he remarks halfway through our 35-minute ride. Yes, that’s what every car salesman is supposed to say, but he’s right. If I could afford the black, all-electric Model S P90D—which drives like butter, but costs $108 000 (R1.5 million)—I could see myself following Michael into the company’s Red Hook, Brooklyn showroom to buy it, even though until today I’d never been in an electric vehicle, much less one that could drive itself. Tesla is betting that if it can get millions of other people like me comfortable with its cars, they’ll want to buy one too. In fact, Tesla is going to have to connect with people like me: Its current $33-billion (R469-billion) valuation hinges on the ambitious assumption that the carmaker can not only make superior long-range electric vehicles but also convince lots of newbies to buy them. This task has been complicated by lingering fears over the safety of autonomous vehicles as the US National Highway Traffic Safety Administration investigates a fatal Tesla crash that took place in May. (That’s not to mention the SEC investigation into how Tesla disclosed the accident.) Much of Tesla’s success depends on the 2017 launch of its $35 000 (almost R500 000) Model 3—the first of its futuristic, allelectric luxury vehicles created for the masses. And the Model 3’s widespread adoption hinges on Tesla’s direct-to-consumer sales model. Tesla has chosen to eschew the traditional dealership method—in which automakers sell their cars to independent dealers, who are granted exclusive territories—in favour of company-owned showrooms staffed with product specialists who can talk people through the tech and their safety concerns. It’s an approach that Ganesh Srivats, Tesla’s vice president of North American sales, says is essential. “We knew we couldn’t rely on dealerships to promote our mission, to operate the business the way we wanted to, to provide this great customer experience,” he explains. “So we’ve really had to chart our own course.” For all the talk of Tesla’s product innovations, it is leading another battle: this one centred on how vehicles are sold, as much as how they’re made. The company has been embroiled in a series of brutal legislative skirmishes in more than a dozen states including Connecticut, Texas and Michigan—home to the Big Three automakers—where longstanding franchising laws handicap (or completely quash) Tesla’s ability to engage customers without an intermediary. On the opposing side is an alignment of auto manufacturers and dealerships, along with the lawmakers who support them. Whatever the outcome, it could fundamentally change the way cars are sold in America. Car dealerships have been the backbone of the US automotive industry since the 1950s, when the Big Three—General Motors, Ford and Chrysler—were pumping out around three-quarters of the world’s cars from their mammoth Michigan plants. While they focused on designing and mass-producing vehicles, their franchised sales operations reached customers across the country. At the same time, dealer associations pushed state legislatures to enact franchise laws designed to protect dealerships from coercive and arbitrary practices by manufacturers—with the added benefit that customers’ interests would be served by increased competition among franchisees. But, over time, automakers have become disconnected from the sales experience, hindering both dealerships and the brands they represent. Today, consumers increasingly want to research and even buy their cars online: A 2015 survey by Accenture revealed that 75% of respondents would consider conducting the entire car-buying transaction online if they could. “When you go to a dealership, there’s all this sort of doubt about the process,” says Srivats, who was senior VP at British fashion house Burberry before joining Tesla last year. “The haggling, all the nastiness around it. Did I pay the same amount as the next customer? Did I get tricked?”
S TAT E BY S TAT E One of Tesla’s appeals is its direct-to-consumer sales approach. The problem? That model violates many US states’ laws. Below, some of Tesla’s biggest battlegrounds
Detroit’s state is simply not having Tesla’s distribution model. In 2014, Governor Rick Snyder signed legislation that bans carmakers from selling their own vehicles. Tesla has been vocal about its intentions to get the law overturned and, further drawing attention to the issue, has applied for a car-dealership licence in the state. Since the Lone Star State’s laws restrict direct sales, potential Tesla buyers can’t purchase from company galleries and have to make appointments for test drives in advance. Tesla, however, has been wooing the state legislature in the hopes of getting a bill supporting its efforts approved. A state law mandates that automakers can only open a franchise if no other dealers are in the community. Tesla struck a deal with Virginia in 2013 to operate a single sales location. The company’s recent application for a second licence, however, was met by a lawsuit from the Virginia Automotive Dealership Association. Tesla has petitioned the Connecticut legislature for a direct-sales exemption, but has been shut down after lobbying from dealers and GM. Customers who visit the single Tesla gallery, in Greenwich, must order their vehicles online, receive them through New York or Massachusetts, and then reregister them. New York threatened to force Tesla to either franchise or close down Manhattan locations several years ago, but Tesla managed to negotiate a five-store cap for the state.
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Window-shopping Tesla’s Pasadena, California showroom allows customers to buy directly from the company.
T HE NE T W ORK EFFECT How Tesla reaches buyers through a panoply of outlets 1
Tesla fashioned its retail model in response. Its 3 700m2, red-brick store in Brooklyn’s gentrifying Red Hook neighbourhood features only two vehicles on the sales floor—a cherry red Model S and a white Model X with falcon-wing doors. Though Tesla’s cars are currently luxury products, the industrial space doesn’t exactly scream high-end. What it offers instead is a disarmingly transparent sales process. There’s a Model S chassis illustrating the layout of the vehicle’s unique, battery-powered engine. A large touchscreen display lets visitors view Tesla’s expanding network of high-speed charging stations and enables them to customise their own cars—from basic features (60-kilowatt battery versus 90) to offerings like “Bioweapon Defence Mode”: a cabin-air-filtration system. When you’re ready to purchase, you can do it on-site or at home on Tesla’s website. “We like the idea of owning the entire process,” says Srivats. “It creates an information loop from our customers straight into manufacturing and vehicle design.” Not all of Tesla’s stores look like the one in Red Hook. Tesla can’t sell cars directly in Arizona or Texas, for example, so it opened “galleries”: showrooms minus any mention of price or sales. Cars ordered online in Texas arrive with California tags and must be reregistered. Some states allow Tesla to negotiate a set number of stores under a trial period; New York gave it five (including Red Hook). But that didn’t stop the company from adding a pop-up shop— via a tricked-out shipping container—in Long Island’s South Hampton. (Tesla later opened a permanent gallery in East Hampton.) “They have gone on and said, ‘No, the law doesn’t apply for us,’ ” says Don Hall, president of the Virginia Dealership Association, which filed suit against Tesla in May when it applied for a DMV licence to open a second showroom in the state. Hall and others in the dealership community accuse Tesla of flouting regulations put in place to protect car salespeople—and consumers: They claim that, without having to operate under franchise law, Tesla is free to obscure details about data regarding recalls and processing fees, for example. (“We operate within the law in every state we’re in,” says Srivats.) It’s not just dealers who are aligning against Tesla. Ford worked fervently to get Tesla showrooms banned in Texas. General Motors— which will release its first long-range electric car, the Chevy Bolt, this year—stands to benefit even more if laws crimp Tesla’s growth. As GM CEO Mary Barra pointedly told attendees at this year’s Consumer Electronics Show: “Unlike some [electric vehicle] customers, Bolt EV customers never have to worry about driving to another state to buy, service or support their vehicles.” What she didn’t tell attendees about was GM’s active role supporting anti-Tesla legislation in Indiana.
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Tesla’s dozens of US showrooms let consumers browse, take cars on test drives, and customise and buy their dream vehicle. Many also function as service and repair shops. 2
Galleries Tesla galleries feel like showrooms—except you can’t buy a car there. “Product specialists” offer test drives, but as soon as a customer asks about price, they’re directed either to the Tesla website or a phone-sales representative. 3
Pop-up shops Tesla has set up mobileshipping-container ‘stores’—which travel to wealthy areas like Santa Barbara and the Hamptons— to help introduce customers to the company’s vehicles. 4
Website The heart of Tesla’s directto-consumer model is Teslamotors.com, which allows users to schedule test drives at showrooms and make purchases. 5
Department stores In June, Tesla opened its first ‘stop and shop’ outpost inside a Nordstrom at Los Angeles’s The Grove shopping centre; it’s currently applying for a sales licence for the location.
In many regards, US automakers have been hamstrung by their own dealership model, which is unique in the global marketplace. The EU abolished restrictive dealership models more than a decade ago, while Japanese manufacturers, lacking the space for car lots, grew its auto economy by sending salespeople door-to-door. Domestically, GM is converting some of its Cadillac dealerships to VR showrooms with no inventory. Sound familiar? “[Tesla] is telling the consumer that the dealership is an unnecessary extra step, and we at the factory can take care of you just fine with our service centres,” says John O’Dell, an auto-industry analyst and former senior editor at Edmunds.com (a car review and pricing hub) who served on the National Research Council’s alternative-vehicle committee. The clock is ticking for Tesla. Demand is already high for the Model 3, which CEO Elon Musk is saying will be delivered in late 2017; nearly 400 000 people have put down $1 000 (R14 000) to reserve a vehicle. If even half of those sales come through (and Tesla will have to crank on its production facilities to make it happen), the company will have sold more EVs than BMW, Ford, GM, Toyota or Volkswagen in the past five years. But to realise those sales, Tesla must boost its physical sales infrastructure. Musk made the EV version of the sexy iPhone; now he needs more Apple Stores. Some believe Tesla will have to embrace the dealership model in some form. Musk has publicly flirted with the idea, presumably unable to ignore the reach of the 17 000-strong US dealership network. He may seek partners outside the car industry: In June, Tesla opened a gallery in Nordstrom at The Grove in LA. Or he may choose a more radical path. Srivats says Tesla will soon drastically redesign its retail concept, but offers few details: “We’re throwing preconceived notions of auto sales out the window and starting from the ground up.” Whatever the plan, it’s sure to leave automakers all charged up.
“I’M A RECOVERING SOCCER PLAYER” Abby Wambach spent 14 electrifying years leading the US women’s national soccer team to Olympic and World Cup victories. She talks about taking on wage inequality, the importance of her image, and why retiring is like being fired—and being reborn INTERVIEW BY LAYNIE ROSE
Legend of the game Wambach received ESPN’s 2016 Icon Award for her contributions to women’s soccer in the US.
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In your soccer career, you scored more international goals than any other player, man or woman. But you’ve said that you don’t want to be remembered only as a soccer player. Why is that? I was able to go out on top, as a World Cup champion, and I’m so blessed to have been able to do that. That said, having had 30 years of experience playing a sport, I have kind of stymied my growth as an adult. I’ve been so transfixed and focused on this one goal of attaining championships and [being] my best soccer self. I don’t regret it, because it offered me so many beautiful things. But when that gets stripped away, it’s like: Did I love what I [was
Gallo Images/Getty Images/Kevin Winter
Photograph by Sophie Delaporte
nuances that I have yet to learn. And I will learn them. I’m very confident in myself in that way. I’m also trying out [other] new things. That’s why I signed on with ESPN: They’re giving me the leeway to figure out what I like. I have all these other projects [in the works] with my own businesses, starting up my new [soccer-training] camp, and creating a path centred around this revolution that I feel is happening around us. There’s something in the air, around the women’s movement, around equality, the gay movement, and I want to be a part of it. We have to start honouring each other’s differences so that these tragedies [like the mass shooting in Orlando] stop happening.
doing]? I loved representing my country, but there were parts of playing that were brutal—the injuries, the recovery from those injuries, always being on a diet, always travelling, and always pushing my body to its nth degree. What’s important for me now is that I’m starting over. I have a chance at a second career, and that’s both exciting and terrifying.
Team change “I have a chance at a second career, and that’s both exciting and terrifying,” says Wambach.
Gallo Images/Getty Images/Christian Petersen
On your ESPN podcast, Fearless Conversation With Abby Wambach, you’ve talked of how retirement brought on an “existential crisis”. Retirement has been enlightening, but also really hard at times. Everyone experiences it, whether you get fired, or you’re changing careers, or having children, and your life is completely flipped upside down. People don’t talk about their hard times enough. Sometimes you cry, sometimes you’re stuck, sometimes you drink too much. It’s almost like recovery. I’m a recovering soccer player. What did you learn about yourself in the process? You have to accept that you’re going back to the drawing board to figure out what you’re going to be good at, what you’re going to enjoy, what’s going to fulfil you. I think that’s especially [hard to do] with the level at which I played: I have very high expectations for my life. Not the lifestyle, but the successes, the goals and the dreams. They’re massive.
“A Disney-owned company hired a gay woman with short hair who dresses androgynously. I’m a reminder that change is happening.”
You’ve written your memoir, Forward, and you have your podcast and a new role as an on-air analyst for ESPN. How do these endeavours challenge you? The ESPN thing is a mind shift. You have to get into the mindset of a coach rather than analysing a game from a player’s perspective—even though they want a player’s perspective, on some level, from me. There are some
Where do you start? It’s already starting in the things that I’m involved in, like working for ESPN. A Disney-owned company hired a gay woman with short hair who dresses androgynously. That is, for me, a telltale sign that I chose the right company, because they’re not scared of someone pushing the boundaries. I’m here as a reminder that change is happening, but we still have a long way to go. You’ve been very vocal since you retired about closing the gender pay gap in soccer. Why didn’t you speak out about it more when you were playing? When I retired, I realised, first of all, that I needed a job—I’m not a male professional athlete who’d signed massive contracts. I did just fine, but it’s not lifetime kind of money. It [prompted] me to do this deep thinking. I got really pissed off. And then, as I was writing my book, I realised that maybe I didn’t do enough when I was playing, when I could maybe have had more impact, to help grow the game and help this wage discrepancy get smaller and smaller. At the same time as I was basically regurgitating this emotion and information to put into my memoir, the women on
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Creative Conversation 30-SECOND BIO
Your memoir is just being published. What was it like writing something so revealing? It’s been the most brutal and beautiful experience I’ve ever undertaken, professionally, because it’s so personal. There’s a public persona that I put out there for a lot of reasons, the first being that as one of 23 [players on the national team], I couldn’t really speak my mind about all of my life. I was speaking for so many other women, and I didn’t want my personal life to get mixed in. So now I get to shed some light on who I am. Hair-raising gameplay Wambach is defended by China’s Yang Man during the 2015 Victory Tour match at the Mercedes-Benz Superdome, New Orleans.
Abby Wa m bac h HOMETOWN
Rochester, New York NATIONAL SOCCER TEAM APPEARANCES
255 CAREER GOALS
184 PIVOTAL PLAY
A game-saving header in the final seconds of the 2011 World Cup quarterfinal match against Brazil
You were arrested for driving under the influence in early April. You’re a role model for millions, which comes with a certain degree of responsibility. How will you go about rebuilding trust? I am just being myself. I’m not worrying about rebuilding trust because, honestly, if my fans have lost trust in me after making a mistake like this, one time, then that’s their prerogative and I won’t judge them for it. They get to decide who they want to follow, who they want to idolise, and those are the consequences I have to live with.
A black eye, thanks to a sucker punch delivered by Colombia’s Lady Andrade in the 2012 Olympics
In a statement after your arrest, you said that the truth would come out. What did you mean by that? There’s not going to be some massive, “Oh, wow, she didn’t do it,” sort of thing. No. I got into a car after I’d been drinking. I pled not guilty because I had to, then later changed the plea to guilty because that’s who I am. But there are some nuances and pieces of information that make the why a bit more clear. For me, it’s not about, “No, I didn’t do it.” It’s about understanding the full picture before you cast judgment on someone else. People will see as they read my book that getting pulled over was the best thing that could have happened to me. I think that’s a valuable lesson. During your career, you delivered a lot of clutch plays under serious pressure, bringing home a World Cup and a pair of Olympic medals. Do you miss the adrenaline rush that comes from competing on the world stage? There’s a dopamine release into your system when you’re extending your limitations day after day. It was almost like an addictive chase. I’ve gone snowboarding, I’ve played tons of golf. It’s impossible to recreate.
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Gallo Images/Getty Images/Stacy Revere
the national team filed this grievance against US Soccer for equal pay. And so—this is all part of what I was talking about earlier—it feels to me like there’s this revolution happening. There was so much good that came out of Title IX [the 1972 law requiring equal opportunity for women in higher education]. The idea behind it was driven primarily by women wanting to be able to “If my fans have lost educate themselves to become doctors. But the best side effect was trust in me, I won’t requiring universities to have the judge them for it. same number of female athletes They get to decide as male athletes. If you look 20 to who they want 30 years down the road [from that to follow, who they decision], I’m the by-product. I’m want to idolise.” the direct by-product of women before me doing work to ensure equal treatment, to ensure equal opportunity. And what you find now is more women in sports, and more women in professional sports. That equalised things in a way that really did change the world, and now I want to do my part.
HOME-GROUND ADVANTAGE Why South Africa is becoming a competitive player in outsourcing software to global businesses By Shashi Hansjee
While there may be a reluctance to invest in South Africa, it should certainly not be as a result of a lack of technical ability, communication barriers or cultural differences. Our world-class software speaks volumes for the immense talent found here. Utilising the services of our software developers and companies offers several benefits over other offshore destinations or to organisations looking to offshore from the US, Europe and Australia—the main benefit being financial gain. Typically, offshore locations such as South Africa, India and the Philippines have a lower cost of living than the US, European and Australian markets, and therefore development resources are often cheaper in those countries.
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Obviously, cost saving at the expense of quality is not recommended—and that is the critical point. Whether an organisation outsources software development to a local provider or an offshore provider, it still has to ensure those with whom it deals are capable of the task. Offshoring to a highly competent, professional software development company with a proven track record of delivery, and a team of developers who are highly qualified and experienced, is the only way that an organisation can achieve the financial benefit associated with offshoring without sacrificing quality. In most cases, to be successful the software development process
needs to be iterative with high levels of communication, trust and collaboration between a client and the provider. Thus, the two major areas of concern when offshoring are communication and trust. Although tools such as Slack, Skype and Google Hangouts have made global communication much easier, there can still be barriers around language and culture that hinder the success of a project. Working across different time zones, and perhaps even to different working hours, can exacerbate these problems. If a company can physically see its outsourced development team and can work directly with them, trust is built up quicker and collaboration becomes easier.
Obviously, this is more difficult in an offshore model, but there are measures an organisation can take to mitigate this and develop trust. These include talking to the development team members regularly and meeting with them in person before the project starts. Starting small is a good tactic; if the software company uses an agile approach, the engagement can be ended relatively quickly if that becomes necessary. Exploring references around how a company’s software teams operate is also critical to building trust. On any project, cost is important—and although South Africa’s development resources are generally at a lower cost than others, this cost saving does not result in a lower level of service and output quality. While South African software development may be more expensive than that from India and other parts of Asia, there are a number of factors that still make it a stronger proposition in terms of the ability to deliver quality. The business language in South Africa is English, and thus communication problems associated with offshoring software development elsewhere do not apply. While in some
countries companies often have to shield their developers from clients because of the language barrier, many South African software companies can have integrated technical and account management teams, where the whole team has strong enough business communications skills to deal with the client personally and obtain project information directly. Our business culture is similar to that found in the US, the UK or Australia. South Africans are resourceful and entrepreneurial, and the country’s developers generally thrive on solving business problems rather than producing code for the sake of it. They are usually willing to give input and challenge thinking, and do not need detailed instructions to complete simple tasks. Generally, they are capable of communicating, showing initiative and taking responsibility. These are regular issues associated with outsourcing to India (the most common offshore software development destination). A quick Google search on the topic indicates there are some fundamental cultural differences that impede quality of service in
Indian offshoring, primarily around developers there not showing initiative as a result of the country’s more hierarchical and instructional culture. A by-product of this is lower attrition rates and better retention of knowledge. South Africa has a relatively central time zone (GMT+2) and therefore has some, if not most, of the workday overlapping with foreign markets. It also directly shares a working day with western Europe. This means communication delays are less impactful. The country also has a solid legal system that respects privacy and intellectual property rights. With all these advantages, one would assume offshoring to South African software development companies is common practice. However, the country is not currently seen as the preferred software development destination. This may largely be because people on the outside do not know there is a great deal of software engineering talent here. An assumption is also made that in South Africa, and Africa in general, there is poor ICT infrastructure— which is no longer true. In certain other areas, there is a ‘tech bubble’ that has resulted in a vast number of people flooding
the market who are not qualified or trained well enough to develop software. Although our country does have a small talent pool, this is not necessarily a bad thing. In this case, a small market means high levels of specialisation and dedication to the craft. South African software developers usually have to be very good at what they do in order to stay in the market. A large part of why there is a skills shortage in South Africa is down to the country’s history and demographics. However, the number of people enrolling in software-related courses at universities here is increasing each year. There are also several local private-sector companies that are investing much time, effort and money into further widening this pipeline through bursaries, scholarships and raising awareness around the industry. South Africans have developed a number of technological enhancements over the years, such as the CT/CAT scan, the world’s first digital laser, the fullbody X-ray scanner, the speed gun used in sports such as cricket and tennis, APS therapy systems and computerised ticketing—all of which have significant software development components.
T E CH T HESE OU T ! South African software-development success stories with global impact CLAIM TO FAME
One of the largest security certificate authorities on the Internet
Spree, Loot, Dignitas, Health Nexxus
Free open-source OS that runs from the cloud to smartphones, tablets and PCs
OpenStack, Intel Joule, National Gendarmerie of France
ELASTIC COMPUTE CLOUD (EC2)
Amazon Web Services’s cloud-computing platform that provides resizable compute capacity in the cloud
Team led by Chris Pinkham
Reddit, Pinterest, Netflix
WOOCOMMERCE (AND WOOTHEMES)
Most customisable e-commerce platform for building online businesses
New Balance, Vic Firth, Ripley’s Believe It Or Not! Online, designboom magazine
Global digital specialist media agency that delivers high-performance marketing solutions
kulula.com, Europcar, African Bank, bidorbuy
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Trust reduces friction Nolte says the trust relationship that banks have with customers should be leveraged to a much greater extent to enable interactions across the digital world.
Banking on innovation To secure their future, financial institutions should look beyond money, and bank on identit y provision too B y Dewald Nolte
It’s a curious thing to watch how trends in technology spread across diverse geographic territories, often following familiar patterns. Despite receiving relatively low investment, it’s frequently in an emerging market that an existing technology is retooled for a new purpose, or an entirely new solution is developed. Here, too, in the developing world, prototypes are tested and improved, after which other markets start taking notice. That emerging markets serve well as test beds for new technologies owes a lot to something that’s seemingly counter-intuitive: the infrastructural and economic constraints that companies and consumers there face in going about their daily business. To bridge yawning gaps in capacity, citizens of the world’s poorer countries grasp new opportunities quickly and experiment with untested new approaches with an open mind. They adopt bleeding-edge technology because of a dearth of tried-and-tested alternatives. In the so-called First World, people enjoy a wide range of banking options, combining visits to their local branch or ATM with use of voice, Internet and mobile channels. By contrast, in most African countries access to ATMs is severely limited, bank branches are too distant to visit, and online banking is available only to the minority with computers at home or the office. Mobile is the only practical option for remote banking and payments, and that’s why several countries on the continent lead the world in the development and adoption of mobile money and other financial services. Institutions in emerging markets have enthusiastically embraced the ‘future bank’ road map. Banks in developed markets,
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Why not allow the one entity you trust with your money, to serve as a custodian of your core digital identity? Your bank will have your back.
meanwhile, express interest—but the future is something they seem prepared to wait for. A common theme in all the media coverage of startups and fintech is that they have their cross hairs set on the large established businesses: enterprises in financial services, insurance, telecommunications and health, which have lots of cash but are forced to respond slowly to change by legacy technology and regulatory pressures. Bitcoin, blockchain, peer-to-peer payments, peer-topeer lending, crowdfunding, crowdsourcing . . . the list goes on. Every second company wants you to know that it has invented a worldchanging new technology that will disrupt, disintermediate or dismantle entire industries.
“Retail banks know that they face the risk of disintermediation by non-traditional providers. If banks become mere ‘transaction pipes’, they will be forced into a commodity market where cost is the only differentiator,” says Niel Bester, head of operations at Entersekt. “To head off threats like this, banks must become a greater part of their customers’ daily lives. Finding ways to engage their customers in this way is where the real innovation will lie.” We see banks becoming disrupting forces themselves, expanding services beyond their traditional remit and engaging their customers several times daily, in all sorts of new ways. Clients should be positioned to not just weather the coming storm but to ride the wave of change to a whole new ocean of possibilities. How? Bester puts his finger on it again: “The convenience and richness of functionality provided by the mobile device will increasingly change the face of banking. Factor in banks’ efforts to broaden their relevance to their customers, and you have a very potent combination.” The world’s going mobile, and no more so than in Africa. All kinds of new mobile services are transforming people’s daily lives.
On the other hand, mobilefocused cybercrime is rising faster than mobile transacting. According to RSA, a leading security provider, 61% of all digital fraud attempts now originate on mobile, with instances rising 173% between 2013 and 2015. (By comparison, fraud attempts on the online channel rose only 1%.) These troubling figures present an opportunity for banks to significantly expand their role in identity provision. How many apps do you have installed on your phone? Do you know how many accounts you maintain online? With many of these businesses not having appropriate security controls in place, it’s inevitable that your data will end up in the wrong hands— opening you up to identity theft and fraud. Why not allow the one entity
you trust with your money, to serve as a custodian of your core digital identity? Interfacing with thirdparty systems across the digital world, acting as an enabler of frictionless transacting and communication, your bank will have your back. As I implied earlier, some banks view this vision as overly futuristic, but others don’t. Banks already have sophisticated digital security in place, including on mobile. Their customer onboarding procedures are unsurpassed in the private sector, dictated by governments’ ever more stringent know-your-customer regulations (FICA, anyone?). They possess a wealth of data on their customers, which can also be used to personalise third-party services and better target product offerings across the Internet. Assets like these are priceless, especially as consumer concerns over data privacy and security grow. By providing a consolidated entry point into the digital economy through something like a money-backed digital passport, banks can help eliminate the risk and inconvenience consumers bear by sharing their personal and financial details with scores of individual service providers. The trust relationship that banks share with their customers can and should be leveraged to a much greater extent to enable interactions across the digital world. Let’s retire for good this idea that the large financial services providers will inevitably drift into obsolescence as sprightly new contenders out-innovate them. The bank’s future looks bright. Dewald Nolte is co-founder and senior vice president of partnerships and alliances at Entersekt. The fintech company enables financial institutions and other enterprises to interact securely with customers through their mobile phones.
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B I G I D E A
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IF SOUTH AFRICA IS TO SUCCEED AS A KNOWLEDGE ECONOMY, THE COUNTRY NEEDS TO CLOSE ITS TECHNOLOGY SKILLS GAP By Chani Macauley
“ I U S E D T O H AT E I T T H AT W H E N WE WERE DOING F I R S T Y E A R AT THE UNIVERSITY OF CAPE TOWN, 90% OF THE HANDWRITTEN E S S AY S C A M E FROM BLACK PEOPLE. THE D I G I TA L D I V I D E W A S H U G E ”.
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To help close the gap, Baratang Miya and others formed the Women’s Movement Society at UCT, and later she co-founded GirlHype: a non-profit grounded in science, technology, engineering and maths, with skills development efforts focused on the girl child and young adult women—particularly underprivileged and underresourced females in the Western Cape between the ages of 13 and 30. “Technology is a tool that can empower—and destroy—women. There is not enough online content that’s relevant to women and girls, and I believe women have to write their own stories,” Miya adds. The pace at which industries— and careers—are being created and developed as a result of technology is accelerating. The digital revolution is making it difficult enough for companies to keep up and maintain a focused and productive staff—but what are they doing to upskill learners and young graduates, the workforce of the future? The education wheel turns slowly; there’s little time spent on aligning that which gets taught with what’s actually required in the workplace, formal and informal. The widening skills gap is being caused by an education system that’s out of touch with the ‘real’ skills required, particularly in information and communication technology. With knowledge and information now imperative for economic growth and greater employment opportunities, there is an increased focus on the role of learning and tech innovation to drive global competitiveness. According to the South African Journal of Science, “While innovation is identified as a driver for economic growth and productivity, the capacity to innovate remains low in most African countries. The globalisation of technology, however, presents new opportunities for development in developing countries”. Innovation requires investment in human capital and a highly skilled labour force, as well as the creation of infrastructure for high-technology industries, the publication adds. Software is everywhere, from the apps we use daily to the cars we drive, the media we consume, and how we interact with each other. And you can be
“Technology is a tool that can empower—and destroy—women. There is not enough online content that’s relevant to women and girls”.
sure there had been a smart developer team involved in creating this technology we take for granted. Unfortunately, in the instance of tech and software development courses, the gap between what students learn and what is relevant by the time they have graduated is rather wide. There needs to be a middle ground
to address this skills void if we are to maintain global relevance and competitiveness—more importantly, we owe it to future generations to give them the best opportunity to succeed and make an impact. For role players, a core focus of their skills development agenda should be to rethink investing in people, development, education and training. An active pursuit of solutions and opportunities is necessary to unlock the potential to boost productivity, innovation and development in the tech landscape. A key challenge is that a career in this sector still remains a choice for far too few. We have to impact early learning with technology learning, and invest more in the various programmes that are reaching out to students across the country. There also needs to be greater emphasis on introducing technology as a career choice to high school pupils, with better curriculum development and real-world learning.
There should be better leadership and collaboration among all stakeholders including educational institutions, corporates, entrepreneurs and skills development agencies to bridge the gap and properly prepare graduates for the world of work. It can no longer be expected of companies alone to render workplace skills development (internships, learnerships, special graduate programmes). Productivity, performance and people development should be everyone’s responsibility. So, how do we further prepare the aspiring and semi-skilled tech professionals out there? South Africa offers a variety of ICT and digital skills development programmes, each with a unique focus. Could our next generation of productive software developers or tech geniuses be found here? ● GirlHype is building confidence in and developing basic tech skills, closing the IT literacy and skills gap created by
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unequal education as well as gender bias and parity. Basic software and mobile programming classes and camps are geared toward helping these young people ignite untapped interest and stimulate potential. Participants are empowered with the basic resources, knowledge and skills to pursue academic or career opportunities in IT. “We equip girls and women with basic programming coding skills—be it software or mobile application development, problemsolving or entrepreneurial skills,” says cofounder Miya. “In developing the workforce of the future, not only do we address unequal access to opportunities but we also bridge the ICT literacy gap of learners, preparing youth for a technology-intense workplace, thereby improving their employability. Technology is advancing rapidly; it’s the fastest growing industry in the world. We need to educate our youth to fulfil current and future roles in tech.” In a challenging economy, and with limited opportunities for further study, many underprivileged youngsters opt to start working straight out of school in order to support their families. The workplace in which they find themselves is increasingly tech-enabled, and everyone requires a base level of skills or understanding to be able to handle the work. “More than just preparing girls to cope in a technologically advanced world, the GirlHype organisation will open their minds to new opportunities and help them envision a future full of prospects that are available and ready for them,” adds Miya.
“Technology is advancing rapidly; it’s the fastest growing industry in the world. We need to educate our youth to fulfil current and future roles in tech.”
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H OW TO IN CR E A SE PRO D U C TI V IT Y IN TO DAY ’ S M O D ER N WO R K PL ACE Give management a vision To lead software and digital teams effectively requires a knowledge vision in line with where the business as well as technology, software and digital trends are heading, in order to empower team members and anticipate knowledge and growth gaps and opportunities. Foster relationships for a productive workplace culture Pair young graduates with senior members of the team who are passionate about nurturing technical and digital skills, and who are open to new ideas and feedback. Positive nurturing can motivate these young employees and help them commit to the organisation’s goals. Encourage skills development An increase in technical skills of junior team members can help more senior employees to be more innovative and productive; juniors will be more capable, doing more with less on-thejob mentoring or supervision. Be agile Software and digital product development environments that have structures and processes to enable team members to adapt and grow will get the best out of its technology and people.
● Frustrated with the lack of employability and the poor technical skill levels of students coming out of tertiary institutions, Tania van Wyk de Vries, CEO of Infoware Studios, launched a programme called Digital Geekaship. Designed to fasttrack the growth path of graduates, it focuses on three core areas: software development skills, real-world experience, and soft skills. Being a software developer herself, Van Wyk de Vries could identify and facilitate the learning of core skills that graduates require in the modern workplace. “By upskilling graduates on the latest technologies, methodologies and soft skills, we enable them to work on real-world software development projects over a period of eight months and then we connect programme participants with potential employers,” she says. The programme is open to university plus technical vocational education & training graduates and undergraduates who want to advance their technical skills development and gain real-work experience through Digital Geekaship’s eight-month internship component. “What really sets a highly productive software development environment apart from an unproductive one is the leadership, and their ability to meet the developmental needs of the graduate to develop them into passionate, engaged employees,” Van Wyk de Vries adds. ● With young graduates entering increasingly technologically advanced workplaces and software development careers, their full potential and productivity capacity need to be harnessed. Senior members of teams, such as project managers, need to understand which resources these entry-level professionals require. They also have a responsibility to foster meaningful relationships to enable employees to contribute productively toward improved business outcomes. If South Africa is to continue innovating and thereby uplifting the lives of citizens, we should be driving productivity and competitiveness. This requires the efforts of all stakeholders to improve the skills of learners and graduates, and promote careers around technology. The country has the talent; we simply need to harness it.
COOL BEANS! Ashanti Design’s handcrafted products are pleasing for both people and planet
Ashanti is proud to be part of the upcycling movement, reducing the amount of material that would otherwise end up in a landfill. “Our products are inspired by a desire to transform damaging waste into objects of luxury and beauty—providing income for rural villagers and empowering people along the way,” says founder Rob Walker. The company taps into the
honed skills and traditions of rural artisans from Madagascar, Malawi, Kenya and Mauritius who handcraft the products—such as bean bags, cushions, baskets, lampshades, doorstops, ottomans and even fabric-topped benches— on original looms using local, responsibly sourced materials. Combining comfort, colour, culture, style and sustainability, the bean bags represent the best
of contemporary African design and are a bright and playful accent to any room. And because they are lovingly stitched by hand, each one is wonderfully “consistently inconsistent”, says Walker; no two will ever be quite alike. What is consistent, however, is the crafters’ ingenuity. “If you can conceive it, we can make it. From the humble origins of our best-selling beanbags, the lid’s
been lifted on our creativity—the possibilities are endless,” adds Walker. “Every inch of thread, frame and fabric is of Africa, from Africa and for Africa. We are 100% committed to our continent, and operate on fair-trade principles.” To view the products, go to www.ashantidesign.com. Or email email@example.com to request an updated price list.
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iPHONE SALES HAVE SLUMPED, THE STOCK IS DOWN, AND PUNDITS INSIST THAT APPLE IS A TECHNOLOGY LAGGARD. SO WHAT? CEO TIM COOK AND TEAM ARE PLAYING THE LONG GAME. WHY THE COMPANY MAY BE STRONGER THAN EVER By Rick Tetzeli Photographs by João Canziani
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“Our reason for being is the same as it’s always been,” says Apple CEO Cook. “To make the world’s best products that really enrich people’s lives.”
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E EDDY CUE DOESN’T LOOK LIKE A MAN IN THE MIDST OF HIS TOUGHEST YEAR IN DECADES. SPORTING AN UNTUCKED APRICOT CAMP SHIRT AND BLUE JEANS OVER CAMOUFLAGE SOCKS AND A PAIR OF BLUE LE ATH E R R AC I N G S H O E S FRO M G E R M A N Y, A P P L E ’ S S V P O F INTERNET SOFTWARE AND S E RV I C E S P U LL S U P A C H A I R AT O N E O F TH E M A R B LE -TO PPE D TA B LE S O U T S I D E C A F F É M AC S , TH E E M PLOY E E R E STAU R A NT AT TH E H E A RT O F A PPLE ’ S 2 3 YEAR-OLD CUPERTINO CAMPUS. (THE COMPANY WILL BEGIN TO MOVE INTO ITS NEW “SPACESHIP” HQ NEXT YEAR.) CUE DIVES RIGHT INTO TELLING ME ABOUT H I S L ATE ST H O R RO R STO RY: 58 FASTCOMPANY.CO.Z A SEPTEMBER 2016
The collapse, two nights earlier, of his beloved Golden State Warriors in the NBA Finals, which Cue had the dismal pleasure of observing from a courtside seat. “Am I in mourning?” he asks of his team’s loss to LeBron James’s Cleveland Cavaliers. “You better believe it. I’m not watching ESPN, I haven’t gotten onto a sports website, I haven’t read a newspaper. When I turn on my TV, I only go to the DVR.” “Eddy, this is on the record,” warns Craig Federighi, Apple’s SVP of software engineering, from across the table. “I’ve got no problem with that,” replies Cue, who is such a Warriors fan that he was featured on the front page of the San Francisco Chronicle after the team’s comeback victory in the conference finals a few weeks earlier, in a photo that showed him screaming in redfaced celebration along with Golden State Warriors star Stephen Curry. He leans over my iPhone, which is recording the interview, and enunciates his next three words to make sure they are loud and clear. “I love LeBron!” Then he gives way to a set of hearty and rueful guffaws. It’s 16°C in Cupertino, the sun is shining, the smell of cumin and garlic from the café’s chicken masala special fills the air, and the chatter among the couple hundred employees enjoying their lunch seems lively and bright. Nowhere is there any hint that “Apple is doomed”, as suggested by Forbes and other outlets, or that it is engaged in a “user-hostile and stupid” campaign against its customers (The Verge), led by CEO Tim Cook, a “boring old fart . . . a supply-chain supplicant” (culture critic Bob Lefsetz). Under Cook’s leadership, Apple has come to seem quite fallible to many people. Its recent products have seemed far less than perfect, at least compared to the collective memory of its astonishing iPod–iPhone–iPad run from 2001 to 2010. There are the public embarrassments, like its 2012 introduction of Maps, or those 2014 videos of reviewers bending, and breaking, an iPhone 6 Plus. Apple Pay hasn’t become the standard for a cashless society, and the Apple Watch “is not the watch we expect from Apple”, according to John Gruber, editor of Daring Fireball, the pre-eminent Apple-centric website. Then there are the design flaws: Apple Music has been saddled with too many features, as if it were something designed by, God forbid, Microsoft; the lens on the back of the iPhone 6 extrudes; the new Apple TV has an illogical interface and confusing remote control. Perhaps, say the worriers, Apple is doing too many things at once, cranking
OVERHEARD DURING THE APPLE FREAK-OUT REAL REACTIONS, CULLED FROM THE TECH COMMENTARIAT, TO APPLE’S TUMULTUOUS 2016. THE APPLE FAITHFUL HAVE NEVER BEEN MORE POLARISED
Illustrations by Peter Oumanski
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out multiple editions of the watch, endless varieties of watchbands, iPhones and iPads in numerous sizes, proprietary earbuds alongside headphones from Beats. Credible reports that the company is spending billions of dollars in R&D to explore the possibility of designing a car only heighten the fear that Apple is spread too thin. Steve Jobs had been the company’s editor, proud of saying no to features, products, business ideas and new hires far more often than he said yes. Apple’s seemingly diffuse product line reinforces the argument that Cook is not as rigorous. (The fear has a worrisome precedent: During the early and mid-1990s, Apple’s product line was a mess of marketing-inspired offerings, and both its reputation as a unique manufacturer and its business suffered.) The criticism crescendoed last April, after Cook announced that, for the first time in 13 years, Apple’s revenue had decreased, by 13%, from the corresponding quarter a year earlier. Sales of iPhones had slowed even more, off 16%—an alarming development, given that the smartphone accounts for 65% of the company’s total revenue. Meanwhile, the company’s competitors seem to be jetting ahead. Amazon, Facebook, Google and Microsoft have dazzled the press with announcements of upcoming products that will use artificial intelligence. Some, like Microsoft’s Cortana, are software applications that promise to anticipate customers’ needs in useful, personalised ways. Others are already packaging that ability in hardware; in less than two years, Amazon has sold more than 3 million Echos, its $199 (R2 700) canister that’s a voice-controlled personal assistant. Google revealed plans for a similar product, Home, in May, to much fanfare. Critics look at Apple’s five-year-old Siri, its voice-controlled agent, and cavil that the company has nothing as flashy to reveal. So, is Apple doomed? Of course not. As John Gruber says, “Any conversation that uses that word is in silly la-la land.” With Macs, iPads and software applications and services, Apple isn’t a one-trick pony like BlackBerry, to use an example cited by those most freaked out about the recent iPhone slowdown. It recorded $50.6 billion (R701.3 billion) in sales during that “disappointing” quarter, more than the combined revenue of Google parent Alphabet ($20.3 billion/R281.2 billion) and Amazon ($29.1 billion/R403 billion) over the same period. Its $10.5 billion (R145.4 billion) in profits outpaced not just the combination of Alphabet ($4.2 billion/R58.1 billion) and Amazon ($513 million/R7.1 billion) but also
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NINE WAYS TIM COOK HAS TRANSFORMED APPLE SINCE STEVE JOBS APPOINTED COOK CEO IN 2011, APPLE’S REVENUE HAS TRIPLED AND MORE THAN A BILLION PEOPLE NOW USE ITS PRODUCTS
AppleCare and the App Store, and that part of the business is growing faster than hardware sales. “I expect it to be huge,” Cook says. “It’s already large. If you look at it on a stand-alone basis, and we’ve started disclosing this now, it’s tough to find many companies that are as big.”
Apple means business 1
Apple controls its technology destiny Apple increasingly relies on its own prowess at designing many of the chips and sensors that power its devices. That gives the company even tighter control over designing a harmonious, symbiotic hardware and software experience, which matters not only for the future of the iPhone but for whatever comes next.
Apple is a services company as well as a device company Apple generates 12% of its revenue from digital services such as iCloud, Apple Pay,
Beyond corporate graphics departments, Apple never focused much on enterprise sales. Now it has a big deal with IBM to sell its devices to the corporate world. The iPad Pro is increasingly targeted at business users, reframing the iPad from a consumer device—in which interest is declining—to a next-generation business laptop.
downloads (and the resulting revenue). Apple marketing chief Phil Schiller now runs the store and has made more changes in the past six months than ever before, introducing promotional placement and expanding subscriptions to make apps a better recurring business.
Apple has bought into public beta Apple now realises that trying to be perfect out of the gate is overrated. iOS 10 is being vetted by public beta testers. The new file system that will debut next year is already in developers’ hands. Even Apple Watch reflects the company’s willingness to put out a product, see what users like and don’t like, and react accordingly. 4
Apple is a fashion brand The company’s products have long been exemplars of good industrial design, but now Cook has incorporated the idea of seasons and collections for products such as the Apple Watch (witness its collaboration with Hermès on bands). The refreshed Apple Stores, in the hands of Burberry veteran Angela Ahrendts, also reflect this influence: Accessories are presented less as tech doodads and more as fashion products.
financial sophistication can complement Apple’s other strengths. As Cook says, “I want Apple to be here, you know, forever.”
Apple embraces public advocacy Steve Jobs had a mission: to popularise computers as “a bicycle for the mind”, and to make them as beautiful as any other object that people care about in their lives. Cook has made Apple a moral company, too—in his coming out and supporting transgender policies; by fighting the FBI over consumer privacy; and in his significant push to make Apple an environmental leader in a business that is inevitably resource-intensive. “My belief is that companies should have values, like people do,” Cook says.
Apple is chasing new frontiers it may not be able to own From cars to healthcare to original streaming content, Apple is making big-money bets on lucrative markets that are crowded, complex and unlikely to be dominated by any single company. “Our strategy,” Cook says, “is to help you in every part of your life that we can.”
Apple is a global financial power 5
Apple’s App Store is a marketing platform One billion people come to the App Store to find out what’s worth putting on their iPhones, and Apple is relying on more
The company has $233 billion (R3.2 trillion) in cash on hand. It has spent about $117 billion (R1.6 trillion) on stock buy-backs in the last two-plus years. While some see these manoeuvrings as distractions, this is all part of Cook’s professionalisation of the company. Such
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its founder’s vision, but that’s exactly what’s happening in Cupertino. It’s a subtle, evolutionary change. Cook is pushing Apple into a future that is bigger and broader than anything Jobs could effect during his tooshort life. “I want Apple to be here, you know, forever,” he says. Those lulled by last year’s bad news into dismissing Cook and his team are likely to miss the scope of the company’s ambitions and its progress in achieving them. While Amazon, Facebook and Google may crow loudest about their bold ideas, Apple may well have the biggest role in actually defining our technological future.
“We are a company that has learnt and adapted as we’ve gone into new domains,” says Federighi.
Facebook ($1.5 billion/R20.7 billion) and Microsoft ($3.8 billion/R52.6 billion). “I don’t read all the coverage on Apple that there is,” Cook tells me a few days after my lunch with Cue and Federighi. “The way that I look at that is, I really know the truth.” And he’s ready to talk about it. Traditionally, Apple execs give interviews only when the company has a new product to hawk. Often, Jobs would only co-operate with magazines that promised to photograph him alongside one of the company’s devices. But change is afoot at Apple, and not just in the communications department. Apple has embarked on a mission to improve its four operating systems (for Apple TV, iPhone, Mac and the watch), services like Apple Pay and Apple Music, and even the size of the iMessage bubble on your iPhone screen. It has redesigned the layout of its retail stores and its online App Store. It is making radical
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changes to maligned offerings like Maps, Siri and the watch. It is wooing app developers in brand-new ways, knowing their creativity is what enriches the $250-billion-per-year (R3.4trillion-per-annum) ecosystem that has been built on Apple devices. It is almost certainly exploring the possibility of manufacturing a car. These moves are the building blocks for the newest iteration of Apple. Apple’s future may look very different from its past—and Cook, Federighi and Cue wouldn’t have it any other way. “Look,” says Cue, who somehow manages to look both like a man who just woke up and a compact ball of perpetual energy, “one thing you know if you’ve been in technology a while, you’re only as good as the last thing you did. No one wants an original iPod. No one wants an iPhone 3GS.” Apple executives are careful to avoid suggesting the company is moving beyond
“Do you have more flaws than you used to?” “Do I personally have more flaws than I used to?” Tim Cook laughs as he responds to my poorly phrased question. “I’ve always had flaws. Always!” “Now we’re getting where I wanted to go!” I tell him. “You can lie down for the rest of the interview.” Cook remains in an upright position, and when his chuckles subside, he answers the question I intended to ask. “Is Apple making more mistakes than we used to? I don’t have a tracker on that.” Cook, despite a job that’s become more challenging during his five years as CEO, doesn’t seem to have aged a whit. Having your company lose $180 billion (R2.5 trillion) in market value (which Apple has in the 17 months since I last interviewed Cook) should manifest itself in some way, but he is still trim and fit, his eyes lively, his good humour intact. “We have never said that we’re perfect,” he continues. “We’ve said that we seek that. But we sometimes fall short.” Indeed, the iPod, iPhone and iPad—and the financial success they engendered— obscured the fact that Jobs oversaw almost as many flops as hits during Apple’s resurgence: the circular, nearly unusable mouse that came with the first iMac in 1997; 2001’s beautiful PowerMac G4 “Cube”, which was discontinued after one year; Rokr, a music phone Apple released with Motorola in 2005; the iTunes social recommendation network Ping, and many more. “The most important thing is, Do you have the courage to admit that you’re wrong? And do you change?” Cook says. “The most important thing to me as a CEO is that we keep the courage.” Gadflies who scorn Cook’s Apple for its
imperfections also scold the company for being ‘behind’ in whatever is the technology du jour. This is nothing new. “What tends to happen with Apple, not just today but in the 18 years I’ve been here,” says Cook, “is that invariably some people compare what we’re doing now to a vision or a product that somebody says they will create in the future.” Over its 40 years of existence, Apple has been seen as a laggard in music, video, the Internet, telephony, wireless, content creation, networking, semiconductors, software applications, touchscreens, gesture controls, materials, messaging, news aggregation, social media, voice recognition and mapping. (That’s not even close to being an exhaustive list.) Nevertheless, the company has managed to survive by doing an unmatched job of integrating the most important of those technologies into products that eventually delight many customers. By the time Jobs died, Apple’s innovation process—the way it accomplishes that job of creating, acquiring, improving and integrating technology—was polished and proven. It was arguably Jobs���s greatest gift to his successor. Cook has built on that gift, in a way that suits him. Apple’s CEO is a deeply grounded man who has not been blinded by Jobs’s brilliant legacy. Jobs only came to appreciate the incremental nature of innovation during the second half of his life; you get the sense that Cook understood and loved process from birth. This focus on detail is often mentioned as a weakness. But, in the five years under Cook, Apple’s revenue has tripled, its workforce has doubled, and its global reach has expanded rapidly. That’s a remarkable record. Cook has shown a great capacity for getting improvements from every corner of the company, and for then deploying those gains across a wider canvas of software, hardware and services than Jobs ever had at his disposal. He will never be as flashy as Jobs, but he may just be the perfect CEO for the behemoth Apple has become.
•• One of the most underappreciated realities about Apple is that it has always been a company that learns on the fly. “I’ve always thought there are a number of things that you have achieved at the end of a project,” Jony Ive told me and Brent Schlender in 2014 when we interviewed him for our biography, Becoming Steve Jobs. “There’s the object, the 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,
“ O C C A S I O N A L LY Y O U W A N T THE JETSONS TO COME TO R E A L I T Y, ” S AY S C O O K . “ T H AT ’ S W HAT APPLE I S S O G RE AT AT: P RO D U C TI S I N G TH I N G S A N D BRINGING THEM TO YOU, SO YO U C A N B E A PA R T O F IT.”
because that’s your future.” This continual learning process is central to the way Cook manages Apple. He accepts the inevitability of flaws, but relentlessly insists that employees pursue perfection. “I twitch less,” says Cue cheerfully when I ask about the difference between Jobs and Cook. “No, no, no, just kidding! Steve was in your face, screaming, and Tim is more quiet, more cerebral in his approach. When you disappoint Tim, even though he isn’t screaming at you, you get the same feeling. I never wanted to disappoint Steve, and I never want to disappoint Tim. [Other than them,] I have that feeling with, like, my dad.” Perhaps the best example of this continuous improvement at work under Cook is the company’s rehabilitation of its Maps app, which was universally scorned after its introduction in September 2012. Apple Maps’s miscues were legion: Bridges seemed to plunge into rivers; hospitals were located at addresses actually belonging to shopping centres; directions were so bad they confused airport runways with roads. Apple didn’t have a billion customers at the time, but it had more than enough to turn the app into a national joke. “Look, the first thing is that you’re embarrassed,” says Cue. “Let’s just deal with that one fact of emotion. These things mean a lot to us, we work really hard, and so you’re embarrassed. We had completely underestimated the product, the complexity of it. All the roads are known, come on! All the restaurants are known, there’s Yelp and OpenTable, they have all the addresses. The mail arrives. FedEx arrives. You know, how hard is this?” Cue, left leg jittering under the table, recounts how Apple regrouped after the mess. “What it causes you to do first is ask, How important is this? Is this a place where we need to triple or quadruple down,
or did we make that mistake because the product’s not that important to us? We had long discussions at the ET [executive team] level about the importance of Maps, where we thought it was going in the future, and could we treat it as a third-party app? We don’t do every app. We’re not trying to create a Facebook app. They do a great job. We decided that Maps is integral to our whole platform. There were so many features that we wanted to build that are dependent on that technology, and we couldn’t see ourselves being in a position where that was something that we didn’t own.” The changes didn’t come easy. Shortly after the app’s debut, Scott Forstall, a 15year Apple veteran who was in charge of its development, was eased out. That was just the beginning. Forstall had overseen dozens of people working in relative isolation: Several thousand people now work on Maps. “We needed to develop competencies that we initially didn’t appreciate,” says Federighi, who looks like a cross between Sam Waterston and Anthony Perkins, with the silver hair and aircraft-carrier black eyebrows that have led Apple fandom to dub him “Hair Force One”. “Maps presents huge issues relating to data integration and data quality, things we would need to do on an ongoing basis.” But the company did more than just throw numbers at the problem. Cook also forced his execs to re-examine, and change, the way they worked with development teams. Famous for being secretive, Apple opened up a bit. “We made significant changes to all of our development processes because of it,” says Cue, who now oversees Maps. “To all of us living in Cupertino, the maps for here were pretty darn good. Right? So [the problem] wasn’t obvious to us. We were never able to take it out to a large number of users to get that feedback. Now we do.”
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Apple now does public beta testing of its most significant software projects, something Jobs never liked to do. In 2014, the company asked users to test-run its Yosemite upgrade to OS X. Last year, it introduced beta testing of iOS, which is the company’s most important operating system. “The reason you as a customer are going to be able to test iOS,” Cue says, “is because of Maps.” Maps’s critical notices have become markedly better, and although the most prominent tech reviewers still prefer Google, everyone acknowledges Apple Maps’s vast improvement. (It’s also far more popular on iOS than Google Maps.) But the enhancements that Cue and crew have driven affect more than the app alone. Maps is now integrated into many popular iOS apps including Airbnb, Foursquare, Yelp and Zillow. Improving a platform like Maps creates benefits for the ecosystems that sit atop Apple’s products. “Maps is this core organising structure for the physical world in which you interact,” explains Federighi. “The map is a foundation for building all kinds of value on the platform, just as our operating systems are a foundation.” The duo won’t discuss what’s next for Maps, though many features are likely to involve giving the service more AI than it already has. (Maps directing you to a different route from the one it first recommended is an example of basic AI at work.) Cue offers an example of something he’d like to see. “Let’s say I’m at home doing email before work,” he says. “I’d like Maps to tell me, ‘Don’t leave now. Your commute will be cut by 15 minutes if you stay home for a while.’ That would be very helpful.” What Apple has accomplished with Maps is an example of the kind of grindit-out innovation that’s happening all the time at the company. You don’t hear a lot about it, perhaps because it doesn’t support the enthralling myth that innovation comes in blinding flashes that lead to hitherto unimaginable products. When critics ding Apple for its failure to introduce “breakthrough” devices and services, they are missing three key facts about technology: First, that breakthrough moments are unpredictable outcomes of ongoing, incremental innovation; second, that ongoing, behind-the-scenes innovation brings significant benefits, even if it fails to create singular disruptions; and, third, that new technologies only connect broadly when a mainstream audience is ready and has a compelling need. “The world thinks we delivered [a breakthrough] every year while
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BREAKOUT STAR APPLE MUSIC’S HEAD OF GLOBAL CONSUMER MARKETING, BOZOMA SAINT JOHN, GIVES US A TASTE OF THE PASSION POWERING THE STREAMING SERVICE
“C ’mon, we’re gonna rap! C ’mon, y’all!” Bozoma Saint John, trying to get Apple’s keynote audience to sing along to the oldschool classic “Rapper’s Delight”, shook up Apple’s Worldwide Developers Conference in June. Her lively walkthrough of the revamped Apple Music signalled a new direction for the service, which debuted a year earlier and injected a new personality into the canon of Apple presenters. We caught up with Saint John a couple of weeks after her triumphant performance to learn more. Why hadn’t we seen you before at an Apple event? Well, darling, we’re only in year two. I don’t know why it seems longer than that. Listen, baby, we’re just getting started. The first Apple Music generated enormous discussion. What did you learn from it? We should be paying attention to all of the ways that people want to listen to music. You want to have the security of your library as something that you listen to again and again, and you must have equal balance between that and being served something new. I really like R&B from 1993, but I like R&B that I just heard last week, too. How do I get both of those things? There’s not a lot of algorithmic curation in Apple Music. Human curation allows you to have the emotion. Music makes you feel happy, it helps you
when you are feeling sad, it gets you pumped up, and it calms you down. You want me to keep going? Because I could preach. Algorithms can’t do that? I don’t know if I’d go that far, but, yeah, people who love music and have passion for it can curate it in a way that can connect to you as a human being. How does Apple Music fit into the whole of Apple? I want to listen to my Apple Music on my iPhone, I also want to listen to it on my iPad, I want to play it on my Apple TV, I want to be connected everywhere I go. It fits into the puzzle of everything that is Apple and, therefore, it should not be seen as some sort of separate entity that’s trying to find its way. How does this point of view translate to your marketing of the service? We follow the passion point, the thing that you as a consumer want to know about, then let me concentrate on the passion to communicate that thing to you. For instance, the spot we did with Mary J. Blige, Taraji P. Henson and Kerry Washington defies what people would do in traditional marketing. You have these three black women who are mature and listening to music much in the same way you do with your friends, and yet you don’t look anything like them. The passion and the emotion of that interaction, though, is universal. —Mark Sullivan
Steve was here,” says Cue. “Those products were developed over a long period of time.”
•• Over the past year, artificial intelligence— broadly defined as the capability for machines to ‘think’ for us by crunching loads of data—has become one of those technologies that capture the public’s imagination, and all the action seems to be taking place somewhere other than Cupertino. At its recent IO conference, Google promised to reshape several of its products around AI, a move that has been hailed as visionary. The hottest consumer product with AI features doesn’t even come from Apple—it’s Amazon’s Echo, with its hint of a world in which computing simply surrounds us. Who needs handheld devices when you can just ask questions of the air and have the furniture bark back answers? A closer look, however, reveals that Apple’s development of its most consumeroriented AI service, Siri, is very much in keeping with the company’s distinct and widely misunderstood approach to deploying new technology. Apple has been using various kinds of AI for years, for things like the personal recommendations available via iTunes since 2003. Siri was introduced in late 2011, nine months before Google Now and three years before Microsoft’s Cortana and Amazon’s Alexa. Apple relies on a simple, two-pronged approach to develop Siri. It’s one that makes clear why Apple doesn’t worry about who’s ahead or behind. What matters to company executives is how successfully Apple steers its own ever-improving product to customers. First, the company works constantly to improve the underlying technology. As with Maps, Siri is the beneficiary of Apple’s treatment of it as a continually updated online service rather than something refreshed only with a major OS upgrade. Customers have caught up to the fact that Siri can successfully answer a wider variety of questions: It now handles 2 billion queries a week—double what it did a year ago. Second, Apple regularly seeks out new places where Siri can help those customers. On an iPhone, Siri handles voice commands and questions by tapping into apps and pulling out answers. In cars equipped with Apple’s CarPlay dashboard-display system, it will recommend travel routes, find restaurants, and perform other functions. You can use Siri with an Apple Watch (presuming you haven’t socked yours away
“I gave the presentation in my voice,” says Saint John of her captivating demo at Apple’s June keynote.
in a drawer). You can also use it to control your television via the Apple TV remote. Unlike Maps, Siri isn’t replacing a realworld analogue. So, Cue says, “you’re trying to determine what are the features, what are the ways it can work really well, what are customers looking for, and what are the things you can do that are going to improve their lives.” Cue’s thinking explains, in part, why Apple opened Siri up to app developers a few months ago, though only in six categories: fitness, messaging, payments, photos, ride hailing and voice calling. Let Siri shine where she’ll be most valuable to users. For now, Siri is as good as anything that’s out there. Using one’s voice to control Now is fun some days and frustrating others, and reviewers say Cortana can be equally inconsistent. Alexa, the digital assistant within Echo, is to be applauded for the speedy way it answers many queries, but my son often shouts at it in exasperation. Alexa can also be used with the Amazon Fire TV Stick to control a TV, but it’s not in cars. If AI is becoming desirable to mainstream
customers, Apple, the company that’s supposedly so far behind, is better positioned than anyone to take advantage of an AI moment. None of its competitors offers both a wide range of products and a history of delivering great consumer experiences. Apple can put Siri to work in all kinds of existing services and products. Customers will see the impact, with Siri now available on their Macs. They can also discover more AI features in the Photos app, making it easier to manipulate and organise their pictures. Drivers with CarPlay are likely to see more AI in automobiles as well. Lacking such an extensive product ecosystem, Apple’s competitors have less appealing choices: They must limit their use of AI, invent brand-new products built around the technology (as Amazon did with Echo), or rely on partners to incorporate the tech in third-party products. Apple will occasionally push its customers past their comfort zone, as it has this September by removing the headphone jack from the iPhone 7. But it never forces the bleeding edge on its customers. In late
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2015, it quietly acquired a voice-AI startup called VocalIQ that is reputedly working on the next-generation Siri, but you can be sure its technology will only find its way into devices when Apple believes it is truly ready. Artificial intelligence is an alluring concept—machines that think for us!—but it also could have unforeseen ramifications. Apple gives its billion customers comfortable doses of AI because, despite the common misconception, it isn’t a company for geeks. “People like things they can do now, not just think about,” Cook says. “I’ve been thinking about The Jetsons since I was a kid. But occasionally you want The Jetsons to come to reality. That’s what Apple is so great at: productising things and bringing them to you, so you can be a part of it.”
•• In the mid-1970s, when reruns of The Jetsons were still a staple of Saturday morning TV, Steve Jobs and Steve Wozniak started Apple Computer with the goal of selling a new kind of machine to an audience they measured in the hundreds. As the company grew, its mission broadened. When Jobs returned in 1997, he would tout the fact that Apple sold an “experience” that could not be matched by other manufacturers. At first, the experience was one of using a single computer in which the company’s software and hardware was seamlessly meshed. Jobs hoped that the excellence of Apple’s personal computers might bring in an additional 1% market share, an increase that would have stabilised Apple’s financial health. By the time Tim Cook became CEO, this concept of an “Apple experience” had grown to mean owning and using a collection of three Apple devices (iPad, iPhone and Mac) networked to one another and the Internet. The experience now being sold by Apple has expanded far beyond that. As Cue says, grinning at the ambition: “We want to be there from when you wake up till when you decide to go to sleep.” Cook himself is only slightly less brash. “Our strategy is to help you in every part of your life that we can,” he says, “whether you’re sitting in the living room, on your desktop, on your phone or in your car.” It’s impossible to understand Apple’s future, and Cook’s challenge, without acknowledging that the experience Apple sells today is not just a collection of devices but a web of hardware, software and services that is itself connected to other webs of apps and services made primarily by other companies. These other webs include everything from the “app economy”, which
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already runs on Apple software and devices, to emerging ones such as the connected home and car as well as wearable computing. To achieve its goal of serving its customers all day long, Apple must do more than ensure its own products work brilliantly—it also must attempt to make them work seamlessly with these many other disparate networks. It must be a notable, reliable player in ecosystems it doesn’t own itself. Apple does an extraordinary job of extracting revenue from the worlds in which it already plays a role, and its future revenues will depend on this even more. Horace Dediu, an influential analyst now working with the Clayton Christensen Institute for Disruptive Innovation in Boston, estimates that Apple customers deliver an astronomical $40 (R555) per month apiece to the company, versus the pennies per month that Facebook and Google collect, and the few dollars a month that Amazon receives. That’s primarily a result of the expensive devices its consumers are buying. But subscription services such as Apple Music and iCloud storage are starting to deliver significant cash. Revenue from services now accounts for 12% of Apple’s total sales, up from 9% the year before. In fact, Apple’s services revenue exceeds Facebook’s total revenue. And Cook says the company has just got started. “Oh, yeah. I expect it to be huge,” he says, smiling. The iPhone’s sales might have dipped for a quarter, but it is far from dead. Its ability to interact with other products is a strategic advantage, and it remains central to what analyst Neil Cybart already calls the “Apple Experience Era”. “Your auto or your home may have dozens of microprocessors in them, but they’re dumb products,” says Dediu. “When the smartphone enters that environment, it gets integrated, and the vehicle [or the home] gets intelligent.” Your iPhone is loaded with your personal preferences, as well as the latest software for managing the world around you, like apps for your thermostat and Philips Hue light bulbs. Think of the way iPhone automatically connects via Bluetooth to your car’s sound system, and you can start to imagine the role it could play as consumers accumulate more sensor-embedded devices. The iPhone will continue to morph, in ways designed to ensure its place as the primary way we interact with and manage our technological experience for the foreseeable future. Apple will sell more devices, but its evolution will also enable it to explore new revenue opportunities. This is how Apple adapts. It expands its portfolio
by building on the foundation laid by earlier products. That steady growth has made it broader and more powerful than any other consumer technology company.
•• It’s entirely possible that Apple will never introduce a product as universally desired as the iPhone. That doesn’t mean it won’t continue to be a great company. “The iPhone entered a market that was the biggest on Earth for electronic devices,” Cooks tells me, as we’re wrapping up our interview. “Why is that? It’s because eventually, everyone in the world will have one. There are not too many things like that.” Then Cook makes another one of his points that can get lost if you don’t understand the care he takes with every word. “It’s hard to imagine a market defined in units—not revenues—that’s that big.” In terms of unit sales, yes, there may never be another iPhone. But in terms of revenue, well, look at the industries that Apple is just now entering, or is rumoured to be pursuing. Media and entertainment is a $550-billion (R7.6-trillion) global market. Global car ownership is a $3.5-trillion (R48.7trillion) business. Annual global health spending is more than $9 trillion (R125 trillion). And while Apple may not currently dominate any of these arenas, remember that analysts once thought Apple would have a hit on its hands if it could garner 1% of the mobile phone business. As we’re saying our goodbyes, Cook and I stumble into discussing healthcare, and he perks up again. “We’ve gotten into the health arena and we started looking at wellness, that took us to pulling a string to thinking about research, pulling that string a little further took us to some patient-care stuff, and that pulled a string that’s taking us into some other stuff,” he says. “When you look at most of the solutions, whether it’s devices, or things coming up out of Big Pharma, first and foremost, they are done to get the reimbursement [from an insurance provider]. Not thinking about what helps the patient. So if you don’t care about reimbursement, which we have the privilege of doing, that may even make the smartphone market look small.” One percent of $9 trillion is $90 billion (R1.25 trillion). Even Apple may call that a pretty good business. Rick Tetzeli is an editor-at-large at Fast Company US and the co-author of Becoming Steve Jobs. firstname.lastname@example.org
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SPACEX VS BLUE ORIGIN FIGHTING TO WIN THE MODERN SPACE RACE By Austin Carr
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From a dusty expanse in West Texas, Jeff Bezos and the crew of Blue Origin, his well-funded aerospace company, fire up their New Shepard rocket. It rises vertically, thrusting into the heavens at more than 4 500km/h. The unmanned crew capsule it’s carrying detaches and it crests roughly 100km above sea level, and the booster begins plummeting back to earth, a pencil dive from space. At about 1 000m, the engine reignites, blazing a streak at its tail that flares as the rocket nears the ground, slowing its fall. Within a plume of dust, New Shepard softly touches down at around just 6.5km/h—a controlled test landing that Bezos calls “flawless”. When Blue Origin first achieved this feat in November 2015, Bezos, wearing aviators and a cowboy hat, sprayed champagne in celebration of a landing many proclaimed “historic”. By April, when Blue Origin reused the same rocket for the third time, the remarkable had become routine. And soon, old news: On April 8, Elon Musk’s SpaceX launched its Falcon 9, a rocket that’s substantially faster, more powerful and larger than Blue Origin’s—roughly as tall as a 24-storey building. Musk’s team not only managed to land the Falcon 9 safely from a higher altitude, but it did so on a drone ship floating in the Atlantic Ocean. Most Blue Origin and SpaceX insiders recoil at the idea of a rivalry, preferring to view their contributions to spaceflight as progress for all mankind. But the fact is that the two companies are engaged in fierce competition: to recruit the best engineers and, above all, to make history. And their respective leaders, Bezos and Musk, are in the running to be the world’s dreamer-in-chief. Let Alphabet CEO Larry Page have his moonshots; this is about Mars. Bezos and Musk are not only competing against each other but an emerging generation of aerospace entrepreneurs, as well as fellow swashbuckling billionaires Paul Allen, Yuri Milner and Richard Branson, all of whom have private space initiatives. But Blue Origin and SpaceX’s more frequent launches, chronicled for social media consumption, have given them the lead in the public’s imagination. Bezos is working toward a space-faring universe where people will live and work. Musk envisions colonising Mars. To get there, they must first dramatically lower the cost of spaceflight, which is why they’re both focused on constructing reusable rockets, vehicles that will make ferrying humans to space more financially feasible. The two are on different trajectories, Bezos’s more gradual than Musk’s, say sources familiar with the companies’ plans. “Everything we did [at Blue] was thought about in terms of decades. It’s very much how Jeff thinks about his companies,” says one long-time Bezos confidant. “SpaceX, on the other hand, ran like hell and burned their people out. Culturally, the two places really reflect their leaders.” When I ask SpaceX senior communications manager Phil Larson about these charges, he says, “Hours and expectations are higher than the industry average, but you can’t make humanity a multiplanetary species on 40 hours a week.” (Blue Origin declined to co-operate with this story.) Musk founded Space Exploration Technologies 14 years ago, and he sunk $100 million—the majority of his fortune at the time—into the risky venture (he invested the rest in Tesla Motors and SolarCity). Even with his team working 90hour weeks, SpaceX was perpetually on the edge of bankruptcy. “We always had money problems,” says one former top engineer who worked closely with Musk. “We had this tremendous burn rate, but to get anything done, Elon had to hire lots of people.” Although three launches ended in failure, the company’s fourth was successful, and SpaceX ultimately won a $1.6-billion (R16 billion at the time) contract from NASA in late 2008, effectively saving the company. By 2012, SpaceX began flight testing its reusable-vehicle system. Bezos founded Blue nearly two years before SpaceX began, but pursued a more methodical approach. (He wears cowboy boots emblazoned with Blue’s motto, gradatim ferociter, which means “step by step, ferociously”.) For years, the company employed just a few dozen staffers, keeping expenses in check (today, Blue Origin has a team of approximately 600 to SpaceX’s more than 5 000). They worked tirelessly—Blue ran into a series of setbacks before its New Shepard
Illustration by Tavis Coburn
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system made strides in more recent years— but their situation was simply less urgent than SpaceX’s. “Elon had to get to revenue or they wouldn’t survive, whereas Blue could go on many, many years without ever having revenue,” says a former manager at Blue describing the “luxury” of having a founder as deep-pocketed and patient as Bezos. “But that’s why [SpaceX] achieved a lot more in roughly the same time period.” Both Musk and Bezos are known as demanding bosses who have become fluent in their adopted industry’s technical intricacies. Musk, who moved certain Tesla operations closer to SpaceX’s sleek headquarters in Hawthorne, California so he could better oversee both companies, is particularly intense, and stories abound of him driving employees to do the impossible. Caught unprepared in a meeting? Musk might cock his head back, his eyes rolling to the ceiling as he decided “how much he is going to unload on you,” recalls the former top engineer. “He’d go, ‘Did you consider this?’ And, boy, if you didn’t know what he was talking about, you were in trouble.” Bezos is usually at Blue only once a week (he leaves day-to-day operations to president Rob Meyerson), but sources who have worked with Bezos say he is similarly exacting. He “reads all the books,” “knows everything about propulsion and rockets,” and will speak at length in product reviews about “injectors and manufacturing technology”, according to multiple sources. He constantly questions assumptions and will call out individuals even in crowded meetings. “I’ve seen some pretty disastrous presentations to Jeff,” remembers one former engineer. “If you don’t have all your facts straight, you can’t win an argument with [him]. He will pick up on things in the room that nobody else does.” Most notably, both leaders are forceful advocates for their aerospace brands, creating a halo effect that helps not only with recruiting but also in public perception. In November, when Bezos successfully launched and landed the New Shepard booster, he tweeted, “The rarest of beasts—a used rocket,” along with a link to a slick video of the mission, which racked up 5 million views. Musk sniped back, “Not quite ‘rarest’,” boasting that a SpaceX rocket performed the same feat a half-dozen times three years ago. In late December, when SpaceX successfully landed the first-stage booster of its Falcon 9, Bezos snarked on Twitter, “Welcome to the club!”
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• • So who is winning? I learn the answer when I attend the New Space Age
conference at MIT in April. The day before, SpaceX had landed its rocket on that floating drone ship, and the chatter among some of the most brilliant minds in aerospace sounds like a board meeting for Elon Musk’s startup. In presentation after presentation, hardly a minute goes by without talk of Musk or SpaceX. “It is far and away in the lead right now of private-rocket development,” praises former NASA astronaut Jeffrey Hoffman. Even William Pomerantz, VP of special projects at Richard Branson’s Virgin Galactic, tells me: “They have achieved the most results so far and are effecting massive change.” He calls Blue Origin more of a “wild card”. SpaceX has put pressure on the traditional space-industry pricing models and supply chain, and as a result it has become an enticing, more affordable alternative for delivering payloads into orbit. It has won $4.8 billion (R67.8 billion) in government contracts to date. In late April, it won a military contract by bidding a staggering 40% less than comparable proposals made by old-guard competitor United Launch Alliance, the struggling joint venture between Boeing and Lockheed Martin. (ULA has announced that it will lay off up to 875 employees, more than a quarter of its workforce.) To catch up, Blue, among other things, has to graduate from suborbital to orbital space. Flying into orbit, as SpaceX now regularly does, requires drastically more velocity, and also involves significantly more complicated considerations relating to how its spacecraft manage heat, fuel and the trajectory of ascent and descent. Given its lead, no wonder SpaceX-ers write off Blue as a potential threat. While impressed with what Blue has accomplished with a smaller team, SpaceX veterans tell me, “We didn’t spend a lot of time thinking about Blue,” and, “We didn’t really take them seriously.” Blue Origin, another veteran says, is just “Jeff Bezos’s hobby project”: a phrase I heard often throughout my reporting. Naturally, Bezos loyalists resent this notion. “I don’t care who you are,” one bristles, “launching a rocket [hundreds of thousands of] feet and landing it on legs with 100 000 pounds of thrust from a hydrogen engine—these are not hobbies!” Perhaps what matters most is how often the duo are mentioned in the same breath at MIT’s conference for “astropreneurs”. (Constantly.) The young innovators in attendance are dreaming up everything from asteroid-mining operations to micro-satellite startups; in the years ahead, they’ll likely want to work for SpaceX or Blue Origin, or will depend on them to deliver their experiments and prototypes into orbit. Likewise, SpaceX and Blue will come to rely on these nascent businesses to seed a market in space, akin to, say, what the App Store did for Apple and the smartphone industry. The real innovation will happen when people figure out what to do in space—not just how to get there, aerospace industry experts say. But first, launching and landing reusable rockets must become so predictable, frequent and safe that it’s mundane. (Imagine if touching down a Boeing 747 was still a miraculous feat that we shared on social media.) Next up, SpaceX will shuttle NASA astronauts to the International Space Station in 2017, reducing America’s dependence on Russia and making history in the process. Musk also recently announced that SpaceX would attempt to send an unmanned spacecraft to Mars as early as 2018. Bezos, by contrast, is sticking with his incremental approach. Blue has locked in a deal to develop and supply ULA with its next-generation rocket engine. As it builds out its orbital-space technology, Blue will continue firing up its suborbital New Shepard rocket, with the aim of transporting tourists to space by 2018. While acknowledging that Blue has much ground to gain on its rival, the long-time Bezos confidant says Blue has a “solid pipeline. They’ve flown the same vehicle three times in a row, and soon you’re going to see these guys flying weekly, and no one else is going to be doing that.” Make no mistake: Both Bezos and Musk are making history. With each rocket fired into space, their hold on the world’s collective awe tightens. Musk gallops toward the galaxy. And Bezos, with each successful mission, marks his rocketcrew capsule by imprinting on it what has become a symbol of pride for his team: a tortoise, sturdy and sure-fire, reaching for the stars.
SNAPCHAT VS FACEBOOK FIGHTING TO GET USERS TO OVERSHARE THEIR LIVES— AND ADVERTISERS TO OVERSHARE THEIR BUDGETS By Mark Wilson
Facebook may be the dominant player in social media, mobile advertising and news, but Snapchat is the most formidable competitor it’s ever encountered. Snapchat has a great feel for what its more than 100 million daily users want—and it moves fast. Combine that with its attractive demographics—86% of Snapchatters are between the ages of 13 and 34—and you can see why these two companies are now battling it out in one of the most passive-aggressive rivalries since the Cold War. Neither company nor its leaders publicly say anything untoward; they just let their product updates speak volumes. Snapchat woos media companies with its roster of Discover channels; a few months later, Facebook woos them with Instant Articles. Facebook launches Sports Stadium to create a home for fans watching a big game; nine days later, Snapchat introduces live score and stat filters for pictures and videos from NBA games and other events. A significant driver in Snapchat’s growth is that 60% of its users upload personal items every day. Even if they are posting just one photo or video (and they’re clearly doing much more, given the popularity of Snapchat Stories, which stitches together a series of images and clips to share for 24 hours), compare that to the 400 million users of the Facebook-owned Instagram, who share 80 million photos daily—at best a 20% participation rate. Simply put, Snapchat is getting more than three times as much participation from its large cadre of diehards. Snapchat achieves this feat by being designed differently from other social media. It’s a cliché to discuss how Snapchat can be jarring to the uninitiated because it opens directly into a camera app, but this overshare-ready user-interface signals Snapchat’s priorities to its fans. And it makes it much faster to create and share content. Not that long ago, Facebook tried to thwart Snapchat by creating a rival app. In late 2012, the company released Poke. In mid-2014, it fired off Slingshot. Both flopped. (Facebook CEO Mark Zuckerberg also reportedly twice tried to acquire Snapchat, for $1 billion and then $3 billion, and Snapchat CEO Evan Spiegel rebuffed the offers.) Facebook’s strategy has evolved so that it now uses several of its established products to give its dramatically larger user base an alternative. Instagram continues to subtly encourage more selfie self-expression, and in an effort to satisfy users who like Snapchat’s more private communication, Facebook Moments lets them share photos only with select friends. Facebook’s rollout of its Live streaming-video product includes such Snapchat-like features as on-screen doodling and filter overlays. Perhaps unsurprisingly, Facebook is also reportedly toying with launching its own camera app which, like Snapchat, would prioritise creating and sharing by opening into a camera view. There were reports recently that Facebook’s users are uploading less original content—like photos of friends and family—than previously. As Snapchat becomes more broadly popular (every professional sports league has a Snapchat deal, to cite one harbinger), it makes sense to give users this now-mainstream interface, while also making Snapchat feel a little less special. Meanwhile, Snapchat continues to push the boundaries of taste and cool by adding such features as face-swapping, and garish (but technically masterful) filters that can add alien eyes or flaming skin to a selfie. But if Snapchat is leading the charge in the social-sharing escalation, it has a long way to go to rival Facebook’s financial leadership. Rapidly growing, but very young, Snapchat is reportedly shooting for $350 million (R4.9 billion) in 2016 revenue. By contrast, looking only at Facebook’s Instagram business, analysts are so bullish that they anticipate the service could generate between $2 billion (R28.2 billion) to $3 billion (R42.4 billion) in revenue this year. Overall, Facebook’s expected to generate $26 billion (R367.5 billion) in 2016. Advertisers love Facebook’s sophisticated targeting capabilities and its unprecedented reach. Its lead in dollars and audience gives it so many advantages, plus buys it time to find new ways to counter Snapchat. Still, the social leader will need to decide just how patient it should be, and just how closely it wants to clone Snapchat to beat it. Snapchat claims that its users quintupled their video consumption between May 2015 and April 2016, from 2 billion to 10 billion views daily. That’s more than Facebook’s latest reported total of 8 billion (from last November). But are rainbow-vomit filters really what Facebook wants associated with its brand? Or would Zuckerberg be better served to go back to Spiegel with an offer that he and his investors simply can’t refuse?
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SLACK VS SKYPE FIGHTING TO BE THE TALK OF THE OFFICE By Harry McCracken
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In an alternate universe, Microsoft wouldn’t have to compete with Slack—because it would own it. In March, TechCrunch reported that Microsoft applications and services chief Qi Lu had pitched his bosses the idea of paying up to $8 billion (R113 billion) to acquire the messaging phenom. CEO Satya Nadella and co-founder Bill Gates reportedly nixed the idea, with Gates arguing that Microsoft should instead focus on turning Skype—its voice, video and messaging service—into a formidable Slack rival. It’s easy to understand why Lu may covet the highly polished workplace chat-room service. Less than three years old, Slack already has 3 million daily active users and, more importantly, Slacksters spend an average of 5 hours and 20 minutes using it each weekday—time they could be using Microsoft Outlook for email. However, it’s clear why Nadella and Gates might have been cold to the proposal. Microsoft has tried to make a Slack-like service work several times: It bought Skype in 2011 for $8.5 billion (more than R57 billion at the time) and Yammer, another office-collaboration tool, in 2012 for $1.2 billion (over R9 billion). Neither deal proved transformative. Microsoft has a lot at stake as Slack commands an increasing share of attention. The company that invented the productivity-software suite has 1.2 billion Office users, and is working mightily to move them from the old PC-centric, pay-once-use-forever version, to Office 365, a pay-as-you-go service with lots of cloud and mobile features. Skype, then, doesn’t need to be a Slack killer—and it’s unlikely the stodgy program ever will be—so much as a tool to assure Office’s ongoing relevance in an era in which productivity is about a lot more than sitting in a word-processing, spreadsheet or email program. This shift is one that Slack is helping to ignite. Microsoft outlined its ambitious vision in April at Build, its annual developer conference. The company sees Skype and Office working togetherto serve users better via what are known in the industry as chat bots. These small pieces of intelligent software try to anticipate what a person needs and then perform those tasks on their behalf. For example, if Microsoft’s Siri-esque assistant, Cortana, notices that you are discussing a business trip within Skype, it can proactively block out time on your schedule in Outlook, negotiate with a hotel bot to book a room, and alert a local friend about your upcoming visit. In other words, Microsoft wants its products to collaborate to do the routine, sometimes-time-wasting stuff for users, freeing them up for the kind of creative work that automated software can’t tackle. This vision of the future of productivity will sound familiar to any Slack user: Intelligent software bots have been a key component of the excitement around Slack for more than a year. There are dozens of them available to help users accomplish such quotidian tasks as filing expenses and ordering lunch. Microsoft, following Slack’s lead, has released tools to help developers create bots and opened an online store where customers can find them. Slack, though, has gone further by announcing an $80-million (R1.1-billion) fund to bootstrap the creation of bots and other integrations that leverage its platform. The move reflects the mantra of co-founder and CEO Stewart Butterfield, that Slack should work with other companies’ essential business tools rather than try to replace them—a notion that Microsoft CEO Nadella has also embraced for his company’s products. (In fact, bots built with Microsoft’s Toolkit can operate inside Slack.) But Slack is moving more quickly. In May, it announced Sign in With Slack, a service that lets users of other productivity tools—such as the popular document-editing program Quip—log in using their Slack identity. The new offering has the potential to make Slack the preferred, easiest way to get to work. Sign in With Slack aspires to do for the company what Connect did for Facebook: spread the service’s dominance across the Internet and make Slack into the Facebook of internal collaboration. As Slack adds such Skype-like features as voice and video—apparently not everything you do within Slack will be offered by a third party—the more it has to be careful about not becoming a bloated mess that users hate. While the future of work moves away from the all-encompassing software suite that Office pioneered in the 1990s, the happiest scenario for users may be if the two companies continue to coexist, letting their products intermingle in new ways that enable people to be more productive than ever.
Sculpture by Kyle Bean, photograph by Sara Morris
GUTTER CREDIT TK
Art credit teekay
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CURRENT TWITTER VS FUTURE TWITTER FIGHTING TO WOO A NEW FLOCK WITHOUT SCATTERING THE OLD
P SYC H O L O G I C A L PROFILE
BY T H E N U M B E R S
HOW TWITTER C AT E R S T O T H E M
L O N G -T E R M PROJECT
W H AT T O WAT C H
Skittish. The Twitter faithful are prone to freak out over change— or even the spectre of it (see #RIPTwitter)— which helps explain why the service has long evolved at a pace that’s leisurely by Internet standards.
Twitter has 310 million monthly users, many of whom are highly engaged. But in the last quarter, it added only 3% more new active members than a year prior, which suggests that it’s found its tribe in its present form.
Rather than jettison Twitter’s 140-character limit, the company has decided to stop counting photos, links and @names against the total. “It’s a good constraint for us,” CEO Jack Dorsey has declared.
Members have complained for a while that Twitter doesn’t do enough to combat abuse, especially harassment of female users. It now has a Trust and Safety Council, and has beefed up tools for reporting trolls.
Despite many would-be Twitter killers, the company still has no rival for real-time chatter. And users may be more adaptable than they think: Only 2% shut off the feature that pushes the best tweets to the top of their feeds.
Intimidated. Twitter has a persistent reputation for scaring off newbies before they’ve figured out the intricacies of its interface, followed other people, and racked up enough followers themselves to feel like they’re part of a community.
Twitter needs many more eyeballs that it can monetise with ads. Fairly or not, Wall Street measures it against Facebook’s 1.65 billion users (not to mention its also-thriving Instagram, Messenger and WhatsApp services).
Many recent changes aim to help casual users get more out of Twitter, such as smarter recommendations for whom to follow and the Moments section of curated news. Even people who aren’t logged in now have a richer experience.
Video! Twitter has started embedding live streams from its Periscope app in users’ feeds, has a research team working on realtime image recognition, and will broadcast 10 NFL games next season.
Twitter’s best efforts to improve its approachability may simply not be enough to ignite growth. It’s a koan wort hy of a tweet: Is a Twitter that appeals to vastly more people still Twitter? —HM
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Illustration by Christopher DeLorenzo
WA LT D I S N E Y ANIMATION VS PIX AR FIGHTING TO ENTERTAIN KIDS OF ALL AGES WITH CARTOON WONDER By Nicole LaPorte
AMAZON VS GOOGLE FIGHTING TO TALK SMACK AT HOME Amazon’s brightest star doesn’t appear on any of its high-profile TV shows. Rather, it’s Alexa, the voice-controlled ‘brain’ at the centre of the cylindrical Amazon Echo device that gets smarter the more often users engage with her. Alexa has moved the battle for the most helpful digital assistant from portable smartphones and watches to our homes, where consumers want the handsoff experience that decades of sci-fi movies have promised. Echo has sold an estimated 3 million units since it debuted more than 18 months ago. Later this year, Google will challenge Amazon with Google Home, an Echo-style device that will manage schedules, play music, and perform routine tasks like ordering an Uber. Google has the world’s best machine-learning technology, but also a poor track record selling hardware devices direct to consumers. If Home isn’t a hit, though, an echo is all Google may hear in the home of the future. —Nikita Richardson
Last Christmas, for the first time in history, a Pixar movie flopped. With the critical and box-office dud The Good Dinosaur, the animation studio that enjoyed a two-decade-long run of imaginative and high-grossing films, such as the Toy Story trilogy and Up, found itself in a strange place. It was no longer the topperforming cartoon shop inside the Walt Disney Corporation. The Good Dinosaur’s failure fuelled the perception that Pixar is listing, relying mostly on sequels of its early hits. Last year, a month before The Good Dinosaur’s release, Pixar announced its upcoming films through 2019 and four of its next five projects—Finding Dory, Cars 3, Toy Story 4 and The Incredibles 2—revisit old ideas. (Unsurprisingly, Coco, the one original, has sparked the most curiosity.) By contrast, Disney Animation has been surging forward with a streak of kid-oriented hit films such as a record-breaking little princess movie called Frozen, the Oscar-winning Big Hero 6, and this year’s almost universally beloved Zootopia. Disney’s re-emergence, after years of sputtering, has instilled a new bravado at the studio, which “was feeling like an inferior backwater to Pixar,” says Tom Sito, a former Disney animator who’s now the chair of the Division of Animation and Digital Arts at the University of Southern California. Disney’s rebound has led to increased one-upmanship within the Mouse House. According to one source, “Pixar’s attitude is, ‘We’re Pixar.’ And Disney is like, ‘Well, then, why don’t you have the highest-grossing animated film of all time?’ ” Intracompany rivalries are always complicated, and in this case they’re exacerbated by the role Pixar founding fathers John Lasseter and Ed Catmull played in Disney Animation’s renaissance. The duo was put in charge of the studio—Lasseter as chief creative officer, Catmull as president—after Pixar was acquired by Disney in 2006. They overhauled how Disney Animation operates, opening lines of communication, empowering directors, and installing a Story Trust, akin to Pixar’s famous Braintrust of top directors, writers and storyboard artists who collaboratively drive a film’s story forward. “The creative environment [at Disney] before the Pixar takeover had a lot of executives interfering in the creative process,” says Sito. “Lasseter swept that all away.” Both men also still oversee Pixar, so for the past decade they have been splitting their time. This wasn’t an issue at first, but with the shift in each studio’s relative fortunes— starting with 2013’s Frozen and especially this past year—the competition for Lasseter’s time and attention, in particular, has led to some hard feelings. Employees at the two companies largely remain friendly, and animators are a tight-knit community of artists, but sources say that Pixar employees are highly aware of how much time Lasseter spends in Burbank, feeling that Disney is “the new girlfriend”, whereas Pixar is “the wife”. This sentiment went into overdrive on the making of The Good Dinosaur, which suffered problems early on, had an overly complicated story (originally, the dinosaurs in the movie were supposed to be Amish), and cycled through two first-time lead directors. One source says that Lasseter, who was coming off the personal disappointment of Cars 2 (which he directed and which critics slammed, although it was a financial success), was more invested in Disney’s turnaround. At the same time, Catmull was less available (he wrote a best-selling management book, Creativity, Inc.) and key members of the Braintrust were busy on their own projects at various stages of The Good Dinosaur’s sixyear production. One source notes that the Oscar-winning Inside Out was made during this same time, though in the hands of Braintrust director Pete Docter, it arguably needed less supervision. (Disney and Pixar declined to comment.) Disney Animation’s culture is now less insular than Pixar’s. Disney takes chances on outsiders like former TV director Rich Moore (Wreck-It Ralph, Zootopia) and screenwriter Jennifer Lee (Frozen). Pixar still draws from its own ranks and has yet to mint new allstars as accomplished as Docter and Andrew Stanton (Finding Nemo, Wall-E). But Disney Animation’s comeback is inspiring Pixar to challenge itself again. “It’s like a sibling rivalry,” says one former Pixar employee. “If a brother or sister goes out and does something awesome, you then want to go out and do something awesome.” Pixar’s next attempt at awesomeness was Stanton’s Finding Dory, the buzzed-about sequel to Finding Nemo, which came out in July and grossed $475 million (R6.7 billion) at the US box office by August 11. Later this year, Disney Animation will release Moana, a film about a Polynesian princess written and directed by Ron Clements and John Musker, the team behind The Little Mermaid and Aladdin. Let the box-office bets begin.
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Maverick of the Month
DEVELOPING THE HUMAN MIND Rapelang Rabana is the Glenfiddich/ Auric Auto/Fast Company SA Maverick for September
Every month, Glenfiddich, Auric Auto and Fast Company SA identify and honour a visionary thought leader in South Africa: a pioneering individual who has shown relentless determination on his or her path to success. A qualified computer scientist and tech entrepreneur, Rapelang Rabana’s first foray into business was as co-founder of Yeigo Communications—South Africa’s first free VoIP mobile services provider—soon after graduating. In 2013 she founded Rekindle Learning, an online learning technology company. Among her many personal accomplishments, Rabana was selected as an Endeavour ‘highimpact’ Entrepreneur in 2007, and as the youngest grand juror among global industry experts for the UN World Summit Awards in 2010. She was also appointed as an ambassador for these awards. In 2012 she was selected as a Global Shaper by the World Economic Forum, and invited to join its Annual Meeting in Davos where she shared a panel with the likes of WEF executive chairperson Klaus Schwab, and social entrepreneur and Nobel laureate Muhammad Yunus. Rabana was also named the 2014 Young Entrepreneur in the World Entrepreneurship Forum Awards. Fast Company: “A maverick is someone who refuses to play by the rules, someone who is not
scared to cross the line of conformity and whose unorthodox tactics reap the results.” Would you class yourself as a maverick? Rabana: My favourite quote from Steve Jobs is, “Life can be much broader once you discover one simple fact, and that is that everything around you that you call life was made up by people who were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use. . . . [S]hake off this erroneous notion that life is there and you’re just gonna live in it, versus embrace it, change it, improve it, make your mark upon it.” I had my own sneaking suspicions and similar thoughts before I was a teenager, and by the time I finished university I was convinced enough of this truth to take a different fork in the road and start my first company with my classmates. I believe that greater levels of self-awareness have been quintessential to everything I’ve been able to achieve thus far, and I continue to be astonished at the path life has taken me, just for following my instincts. That’s what makes me a Maverick. What piqued your interest in technology and business? I accidently found myself in the computer science programme at the University of Cape Town. I had no clue what I wanted to study after high school. I wanted to take a gap year, but since my parents
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refused that, I asked my older brother to come up with something. He said I should study toward a BBusSci honours degree; in my first class, seeing code on the wall, I knew he had been playing a practical joke! I spent my first year looking at other options, since I didn’t know what was going on. But by the end of the year, I decided to stick with computer science. I came to appreciate the power of software to create things out of one’s imagination. I was hooked—one can inject one’s imagination into reality. That developed into a deep curiosity to see how we use technology to address socio-economic challenges. By the time I finished
university, I was pretty clear in my mind that, though I was good at it, I was very tired of working systems. It felt like my whole life, from primary school to secondary school to university, had been about working systems premised on the goals and values of people I barely knew. I wanted to do ‘me’. I wanted to decide how I spent my time and what I gave my attention to, because those are the only true assets we have. It seemed to me I was only going to be able to achieve that by starting my own company, and that’s how I decided to become an entrepreneur. Leveraging technology in my work is an easy bonus, because there are so many ways to apply it to anything you care about.
What inspires you? I love the process of creating things and making them a reality. So, what inspires me most is the extraordinary privilege of seeing something you have worked on manifested into reality—after it all started with just a thought. It always makes me smile, remembering that all we had while starting our first company was an idea, and how incredibly powerful human thought, the imagination and discipline can be when backed by persistence. How has your experience been as a woman in business in South Africa today? Operating largely in southern Africa at this point, being a woman has not necessarily been an impediment but rather, from my perspective, it has been a distinguishing characteristic that has given me more prominence. The biggest challenge as a female entrepreneur has, for me, always been the internal battle of appreciating my own value and trusting the validity of my own journey in the absence of external points of reference I could relate to—whereas a male entrepreneur may well have a number of external points of reference to support his journey. What is your ultimate aim in business and tech? If the African continent is to have its turn as a global leader, we must be able to capture the demographic dividend by embedding knowledge, building skills and capacitating young people faster and better than we have ever done before. This is a challenge at the core of Africa’s socio-economic development—and if I can play a role in that, I will gladly try. Tell us more about Rekindle Learning. I believe Africa must leapfrog the education and skills gap if it is to become a global leader—and technology can be a major catalyst
for that. Rekindle Learning is an innovative learning and development company providing a range of mobile and computer learning applications and performance support tools that enable a broad range of knowledge to quickly be entrenched, mastered and applied. This includes corporate training and ongoing professional learning, as well as school learning. Our tools improve learning efficiency and reduce time to competency, ensuring rapid knowledge transfer and higher workforce
“I believe Africa must leapfrog the education and skills gap if it is to become a global leader—and technology can be a major catalyst for that.”
productivity—enabling young people to be more employable. While Rekindle Learning was started over two years ago, the first time I started thinking about learning tools that could adapt to how we learn, was in high school at about 15 years of age. Back then it was more a frustration with the process of education and the inefficiencies that plagued it, and until two years ago I didn’t know that it would actually become a business. Our adaptive micro-learning application helps to reinforce and sustain learning, particularly after training and workshop sessions— if you are working—or after classroom sessions if you are a student. Instead of looking at learning as a single event, it creates opportunities for a series
of micro-learning experiences you can do in a few minutes. The tool is embedded with proven techniques that leverage the best we know about neuroscience and cognitive learning to overcome the ‘forgetting curve’. Learners are able to learn at their own pace and in a manner that adapts to how they are performing so that they experience a personalised learning process until the required level of knowledge is retained. So instead of overwhelming learners with lots of training manuals (sales, product knowledge, compliance etc.) or textbooks (English, Maths, Biology etc.), where you as the educator have no insight into what has been read or understood until test day, you can create ongoing learning events for more effective and measurable learning. We have started with our first push into academia with an English learning platform to improve written English language skills. Given that so many learners speak English as a second language, and the ailing quality of teaching at high schools, many learners arrive at university with poor writing skills and limited knowledge of grammar and language structure. Something else we will do in companies for performance support is to provide virtual coaches that guide employees through complex sales or customer service or compliance processes. In this way, everyone can apply organisational best practice, even if they are new on the job. This is quite important when you consider how long it takes for someone to master their work environment even if they have a degree. It’s almost like having GPS to guide you at work— something you can use in real time, literally as you are doing the task, without having to stop and do a course.
What does it take to succeed in business today? The challenges faced by every new startup are different, but also much the same. You have a general idea of where you want to go, and you have to take a number of small steps to refine the business idea and find a compelling value proposition that customers will pay for. It’s particularly challenging, because all you have is a hunch, an instinct, that there may be something here—and you have to keep going forward with little validation at the start, until you make a series of breakthroughs. In the process, you need to identify which resources you need to make things happen in terms of time, effort and money, and think of smart ways to keep the resource requirement to a minimum while you figure things out. This requires you to do a lot of the work yourself and to identify strategic partnerships that can help you get going without laying out a lot of capital; in the event that you need to raise funding, that is always a long and tricky road. Are there any projects in the pipeline? What can we expect from Rekindle Learning in the longer term? There are so many facets to developing the human mind. Right now, our solutions at Rekindle Learning are focused on building knowledge and expertise—essentially it’s about packaging content. But the next frontier is not about content but the mental framework that holds that content; it’s about how to build mindsets, how to drive self-management, leadership and entrepreneurial behaviour with the help of technology. That is a far less understood area, but I believe the answers will start to emerge soon.
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PACE YOURSELF The all-new Jaguar SUV is a powerful combination of form and function BY EVANS MANYONGA
Released in July this year, the F-PACE redefines the fusion of design, practicality and the next generation of technology— offering first-class interior, dynamic styling and exciting proportions, while remaining spacious enough to accommodate five passengers and their luggage. The new SUV looks strongly assertive but not aggressive; it’s a versatile, all-weather, all-surface Jaguar sports car. The driving experience is as luxurious and comfortable as one would expect from a Jag sedan, and all that performance and power is packed into the sleek vehicle. A true five-seater, the F-PACE has a spacious interior featuring the craftsmanship, premium materials and meticulous attention to detail that give every Jaguar its unique sense of occasion. The ‘Sports Command’ driving position provides an authoritative, confidence-giving view out, but retains a sports car feel. Jaguar’s cosseting sports seats are shaped to provide exceptional comfort and support, and are available with 14-way adjustment, heating and cooling, plus refinements such as soft-grain leather, contrasting twin-needle stitching and embossed headrests. The row-two experience is equally impressive. The long wheelbase makes access to and from the rear seats easy. The seat base was designed to allow passengers to sit further outboard, offering maximum space for three
Bold-faced The F-PACE SUV looks strongly assertive but not aggressive.
occupants who can enjoy classleading rear knee room. The positioning of the seats and the height of the beltline mean even small children enjoy a good view. Luxury and spaciousness are matched by the interior’s practicality. The door pockets can accommodate large bottles, while the storage spaces neatly scalloped into the sides of the centre console were designed around smartphones, and feature non-slip rubber inserts at the bottom. The console also features twin cup holders. The focus on package efficiency also means the all-new F-PACE has an exceptional luggage compartment: 650 litres. The space is made all the more useable by its width that’s more than enough to accommodate two full-size golf bags, for example, or four large suitcases. The rear seats allow through-loading and, when folded flat, the luggage compartment offers up to 1 740 litres of space. The clever packaging is enhanced further by the low loading height. Using Jaguar’s leading expertise in aluminium construction, the design and engineering teams had the ideal starting point for creating the brand’s first-ever SUV. From the outset, it was developed to have a modular structure, allowing the wheels to be positioned exactly where they are needed to deliver the proportions, dynamics and
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practicality essential for a performance SUV. Up front, the bold, upright front grille contributes to the vehicle’s aerodynamic efficiency. The power bulge extends the full length of the aluminium bonnet to emphasise its performance credentials. Its sleek headlights, available with adaptive full-LED technology, feature daytime running lights with Jaguar’s signature “J Blade” graphic. All F-PACE models are fitted with InControl Touch as standard—the same system currently fitted to the Jaguar XE, XF and F-TYPE. With its eightinch touchscreen and intuitive interface, InControl Touch offers drivers easy access to the vehicle’s infotainment functions. (InControl Touch is also available with a 380-watt Meridian audio system.) InControl Protect and InControl Remote are fitted to all F-PACE derivatives. Drivers can rely on the ultimate in customer care with InControl Protect, which offers both an SOS button for emergencies and accidents, as well as a roadside assistance button. InControl Protect lets drivers connect to Jaguar Assist without the use of their own phone. When a call is connected, these services can also transmit vehicle position and diagnostic data to better assist response
services. InControl Remote offers drivers the ability to use their smartphones to monitor their vehicle; this includes monitoring its current location, security status, fuel level and recent trips. These features complement both variants of the InControl Touch infotainment system. The F-PACE is also available with the Jaguar Activity Key, a first in the SUV segment. This waterproof, shockproof wristband with an integrated transponder is wearable tech that supports active lifestyles. It allows the key fob to be securely locked inside the vehicle—invaluable if you’re going surfing or kayaking, for example. Locking the SUV using the Activity Key will disable any key fobs left inside. It works on the same RF frequencies as the other keys and is used to lock and unlock the vehicle when it is held in close proximity to the “J” of the Jaguar lettering on the tailgate. The key has no battery, so as a driver you never have to worry about changing it. With sports car–inspired design and performance, as well as class-leading levels of interior space, the F-PACE truly lives up to its title: It simply is the world’s most practical sports car. Prices start at R776 800. See www.jaguar.co.za for more details.
WE HAVE ALL THE ANSWERS. MEET A BMW GENIUS.
Innovation has always been a cornerstone for BMW. It’s not just the models in our showroom that set the trend, but the showroom itself. We are proud to introduce the BMW Genius – an expert who will assist with any queries you may have, deliver product demonstrations and even take you on a virtual test-drive. Whether you’d like to know which features are available in your dream BMW or how to use them, the BMW Genius will have the answer. Speak to the BMW Genius at Auric Auto: Reinhardt Salie 021 670 1113 Reinhardt.Salie@bmwdealer.co.za
215 Main Rd, Claremont, Cape Town Tel. 021 670 1100 www.bmw-auricauto.co.za
Sheer Driving Pleasure
The Great Innovation Frontier
MORE HASTE, LESS SPEED Why rapid growth and time scarcity are not necessarily good for innovation
WE LIVE IN a world of fast cities. Fast everything. Even Africa, home to the ‘African time’ cliché, is speeding up. Development is progressing at an unprecedented rate, and the African population is projected to explode by 2050. The African Development Bank has spoken of never-before-seen rates of expansion. Today, the continent is rising from the ashes of the colonial era to drive a development all of its own. And its successes are being noticed, by both its residents and foreign investors. The AfDB development report, “Tracking Africa’s Progress in Figures”, has noted a definite upswing in terms of innovation, population and investment. Already in 2014, researchers spoke of a period of “transformation and growth” on a large scale. “Of all global regions, Africa will lead population growth over the next 50 years,” the report noted. “Linked to this megatrend of rapid population growth is that of urbanisation.” And—you guessed it—in Africa this transformation is taking place faster than anywhere else on the planet. It’s also expected to play host to the globe’s greatest mega-cities in the coming decades. But I’m not convinced the fast way is, in fact, the fastest way, or the most efficient. Won’t we accomplish more if we take a moment just to slow down? To look around, take stock? If we build real connections within working teams and communities—real foundations for our innovations? Consider the Slow Movement, whose bare-bones website describes its cause as aiming “to address the issue of ‘time poverty’ through making connections.” This notion of time poverty is important because, globally, as we speed up, is economic poverty going to be replaced by time poverty? This is also at the root of the Gross National Happiness Index concept (a challenger to gross national product) that advocates well-being should take preference over material growth. The average breadwinner today works around 1.5 times more hours per week than in 1969. (Interestingly, the opposite trend is observed in the US, where economic strength and the scourge of poor health have resulted in a notable number of citizens living on grants or disability benefits—but that’s a conversation for another day.) And yet, research has shown that long hours do not result in more productivity. It’s one of the reasons companies that allow flexibility to keep employees
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Drivers such as guilt and ambition and increased competitiveness cause us to overwork and, sadly, underperform.
Wa lte r B aets
well and happy and ensure overall mental and physical health prevail, do so well. The Harvard Business Review reports: “[A]ll of us, including senior managers, are basically flotsam buffeted about by the eddies of economic incentive, corporate culture, and technologies that keep the office just a tap away. In this version, there’s no one really dictating the norms; we’re all just reacting to macro forces beyond our control.” Drivers such as guilt and ambition and increased competitiveness cause us to overwork and, sadly, underperform. Rushing is bad for innovation, it seems. I know of at least two prominent businesspeople who have never succumbed to this insane—because it is insane—drive to produce at any cost. And both were extremely efficient, productive people who (most importantly for this discussion) led full, happy, wellrounded lives. Person A, who was the MD of one of South Africa’s top corporate giants, went home every day to have lunch with his wife and five children, even though the corporation itself had been running on a 24-hour scale for decades. Person B was the founder of one of the continent’s greatest tourism organisations, and to this day does not own a cellphone. Many legendary businesspeople—including respected leaders in multinationals like Coca-Cola—have long understood that making connections, real connections, is how a conducive business (and living) environment is created. It’s actually not that odd to meet business associates over lunch or on a golf course. It’s because, deep down, we all know that we can achieve nothing noteworthy without real human connection and personal involvement. If these highly successful individuals can do it, why can’t the rest of us? Should we not take this new era of development as an opportunity to do things a little differently? We need an altered understanding of what innovation can do for society. Rather than frantically chasing down the exponential development of tech (for instance), we could think about how that tech can help to realise real innovation, real value, in people’s lives. In Madagascar, the concept of mora mora—or ‘slowly, slowly’—is widely accepted; it’s considered extremely rude to rush or become impatient. Since progress ultimately rests on connections and thoroughness, perhaps, as we strive for more, we should also strive for mora. 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 as well as 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’.
I T IS MORE THAN A M AG A ZINE, I T'S A MILLIONAIRE? MOV EMEN T
A WHOLE NEW APPLE Why there’s life
INSIDE 2016’S BIGGEST RIVALRIES Snapchat vs Facebook
after the iPhone
SpaceX vs Blue Origin Slack vs Skype and 3 others
How brands connect with millennials
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Interview by Evans Manyonga
The Digital version of Fast Company South Africa is now available on Apple iPad and Android tablets
Fast Bytes Fast Company SA takes a look at the innovative new ideas, services, research and news currently making waves in South Africa and abroad
MOBILE TECH FOR THE MILLENNIAL A new range of Alcatel mobile technologies and devices were introduced and on show in September at the IFA 2016 tech convention in Berlin. Alcatel recognises that millennials and Gen Z consumers want to interact with technology in a way that makes them feel good and live life to the full— without breaking the bank. So the company has developed a range of mobile devices, from premium-design smartphones to zippy tablets to visionary VR products—all with distinctive designs and affordable price tags. All designed for 20-somethings (and, of course, former 20-somethings). Besides the launch of its new products, Alcatel announced exciting partnerships with four of the world’s innovative 360-degree camera makers.
THE CUSTOMER IS KING The 5th Annual Customer Experience Management Africa Summit took place in Cape Town in August, attended by 45 top-level speakers, 29 sponsors and partners plus more than 440 professionals.
Comments from speakers/attendees: “Digitally empowered customers have given rise to a new era: the age of the customer. This is forcing companies to become customer-centric.”—Qaalfa Dibeehi, VP of customer experience, Forrester “If organisations don’t start looking after customers in the long term, the business suffers. You need to get all employees on board with the simple fact that without customers, your business doesn’t exist.”—Eddie Moyce, former chief customer experience officer, MTN “Customer experience management has matured rapidly in South Africa and has become an inescapable musthave for any company hoping to get ahead of the pack.”—Shannon Mackrill, joint MD, Kinetic
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TIME FOR EXPANSION Founded in 2015 by South Africans Makeeda and Stuart Swan, Bettél’s innovative wooden watches have captivated the country, and the company is now taking things to the next level— having launched a campaign on Kickstarter in August. The Swans’s funding goal is £5 000 (just under R100 000), and backers will be able to pre-order watches during the campaign. Bettél would use the money to secure a workspace, hire employees, purchase more equipment, produce a new batch of watches, and deliver these all over the world. (See our subscription competition.)
GETTING IN THE (INNOVATION) ZONE PwC South Africa launched its first Africa Innovation Zone in Cape Town, in its new offices located in Silo 5 at the V&A Waterfront. It was created in collaboration with local artists to break the corporate mould and drive people to think differently about business issues. Bringing design thinking into the fold gives PwC the ability to co-create with multidisciplinary teams to bring fresh insights to problems worth solving, according to Cape Town Innovation Zone manager, Michael O’Carroll. PwC will also use this space to collaborate with Google to reimagine a client’s digital transformation journey using Google technology.
NEW TRANSIT API TO SAVE TRILLIONS Transport information infrastructure in emerging cities across the world is set to be revolutionised by a new tech platform from South Africa. WhereIsMyTransport is predicted to save the country’s economy alone up to $104 billion (R1.5 trillion). The API (application program interface) will, for the first time, allow transit information from various modes—in a number of formats and from multiple sources—to be collated in one place. Developers, transport officials and others working in this sector will be able to use this data to create city-mapping facilities such as websites, apps and journey planners. Having recently received £1.165 million (R22.4 million) in seed funding, WhereIsMyTransport initially launched in August in 10 African cities where the lack of clear public transport information impacts both the economy and the lives of citizens.
MOBILE MONEY FOR ALL African fintech company Zoona has successfully raised $15 million (R220 million) in a second round of financing led by the International Finance Corporation. This will help Zoona scale up operations as it aims to reach 10 markets and 30 million active consumers across the continent by 2020. The company develops mobile money solutions that entrepreneurs across Africa can use to provide financial services to their communities. “Technology has the potential to bring about financial inclusion to underserved communities across Africa,” says Zoona CEO Mike Quinn (third from right). “This investment round marks a key milestone in our journey to build a billion-dollar business that helps communities thrive. We are thrilled that investors the calibre of IFC all buy into and support Zoona’s vision.” SEPTEMBER 2016 FASTCOMPANY.CO.Z A 85
Rands and sense
D i n a B i ag io
LEAVE YOUR MARK Intellectual property shouldn’t be considered a ‘luxury purchase’ to be cut from the budget
CONSIDER THIS SCENARIO: Your business, a usually innovative company, is suffering under the current suppressed economic conditions and low consumer spending. You take a hard look at your budget and then drastically reduce your forecast spend on IP. You decide not to renew your patents and trademark registrations, and to put a freeze on applying for any IP rights. You also choose to rely on common-law trademark rights and copyright (which do not require registration). You’re pleased that you’ve managed to free up some money. Reckoning that the saved money is better spent on technical development, you allocate these funds to innovation, to sharpen your competitive edge. You pat yourself on the back when this strategy pays off: Your technical development team has made a significant improvement to your product—which customers are going to love! Before long, you notice a competitor eating into your market share; the competing product is an exact copy of your new improved product. This competitor is riding on the back of your company’s good reputation by selling the competing product in association with a trademark that’s outrageously similar to yours. You can’t keep up, because the competing product is sold at a lower price (no surprise, as it has no R&D costs to recoup). You consult your attorney to devise a strategy to put a stop to this copying. But copying is not necessarily unlawful, and in the absence of infringement of IP rights (you know, those rights that you allowed to lapse or for which you didn’t apply to register), obtaining an interdict against the competition will be impossible or fraught with difficulty. There’s a provision in our country’s copyright legislation that permits a competitor to “reverse engineer” a three-dimensional article by manufacturing a reproduction of it through measuring it up and copying it, as long as the article in question primarily has a utilitarian purpose and is made by an industrial process. Reverse engineering in this way does not constitute an infringement of the copyright in the artistic works associated with the original. So how do you prevent this copying? You register patent rights in respect of the improvement. The SA patent system undoubtedly favours the patentee. If your business invests in tech development and invents a utilitarian
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In difficult market conditions, a trusted trademark is the reason a commodity product can command a price premium over competing products
article but does not take any steps to secure patent rights over this invention, you won’t have recourse to prevent a competitor from copying it once you release it for sale in the market. Conversely, a patent entitles you to enforce a monopoly in the marketing, manufacture and sale of the patented article for up to 20 years. Surely, the competition can be prevented from using that trademark? Well, that depends. In whose opinion are the trademarks similar? Do you have evidence of confusion in the marketplace? Do you have evidence of having established a reputation in the market? Do you have evidence of having suffered damage? Enforcing unregistered trademark rights is notoriously difficult, so the money saved on renewal fees will be a fraction of what it’ll cost to prove contravention of your commonlaw rights. Where your product is not technical in nature, or you don’t have patent rights, you’ll need to rely on your trademark. In difficult market conditions, a trusted trademark is the reason a commodity product can command a price premium over competing products without the expected drop in sales. A really good trademark hardly requires any advertisement or exposure in the media to dominate in the minds of consumers. As a result, the value of a strong trademark increases when economic conditions deteriorate, and the temptation for competitors to infringe the trademark or pass off their own products as the trusted one tends to increase. IP has the ability to generate a revenue stream where before there was none. If you can’t compete effectively in a particular market for whatever reason, your products could nevertheless be sold through a licensee, under licence. Furthermore, a licensee creates demand for the product in a new market, ensuring the trademark becomes more widely known and driving brand value upward, with the benefit of this accruing to the proprietor. So why is it that when money is tight, IP is considered a luxury purchase and is one of the first things to be cut from the budget? It’s precisely in these circumstances that businesses could lean on their IP to provide an edge. The very purpose of IP is to inhibit competition, and you need this even more when economic factors make it difficult to compete on factors such as innovation, price or quality or when you can’t afford to market effectively or drive sales with discounts and value adds. In trying times, you simply cannot afford to be without IP—and securing your rights should be a priority rather than an afterthought. Dina Biagio is a partner at Spoor & Fisher, specialising in commercial transactions relating to IP, among others. She has experience in domestic and international patent and design matters, and is a fellow of the South African Institute of Intellectual Property Law.
Local conferences, talks and meetups we think are worth attending
Chief Analytics Officer Forum Africa Date: 27 & 28 September (main event) Time: 07h30–17h00 (Tue); 07h30–16h20 (Wed) Location: Focus Rooms, Sunninghill, Sandton Cost: various options, from R9 999 (conference only) to R19 096 (all-access pass) www.caoforumafrica.com Research conducted by Corinium Global Intelligence shows that South African organisations are beginning to realise the value that lies within their data, but face numerous challenges to realising it. Gain insight into how to evangelise the power of analytics across your business and learn how to tell the analytics story more effectively to ensure insights really do turn into action.
#TechTalkCPT: You’ve been hacked! Date: 5 October Time: 18h00–20h30 Location: 60 Hout Street, Cape Town Cost: R100 per person October’s #TechTalkCPT demystifies the world of hackers and IT security by looking at things from the deep web, to what a hacker is and why they wear different coloured hats. Our speaker Craig Swan is passionate about IT security, both from offensive and defensive perspectives, and will share his knowledge with you so that you can protect yourself.
rAge (Really Awesome Gaming Expo) Date: 7 to 9 October Time: 10h00–18h00 Location: Ticketpro Dome, North Riding, Johannesburg Cost: R120 per person; free for kids under 6 rAge is South Africa’s biggest annual video gaming, computer, technology and geek culture exhibition. Over the course of the weekend, tens of thousands of enthusiastic fans will descend on the venue for three days of gaming, tech, gadgets, pop culture and geek lifestyle entertainment. You can buy new games and consoles, chat with local comic book artists, or take selfies with your favourite cosplayers. The show is a glimpse into the future—the place to go to see all the latest gaming-related goodies presented in an accessible way, and to be surrounded by people who share the same passion.
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AfriSecure 2016 Date: 11 & 12 October Time: 08h00–17h30 Location: Vodaworld, Midrand, Johannesburg Cost: R6 270 per delegate (full-access pass) www.afri-secure.com Through careful research and assisted conceptualisation, this event aims to meet the needs of the industry by providing attendees with practical takehome knowledge and practical solutions that will revolutionise the way they do business. From the four tracks—Risk and Internal Control, Fraud, Cybercrime, and Corporate Security—content-driven case studies will arm attendees with what they need to know to protect their organisation.
XA Experience Advantage Date: 12 October (Cape Town); 18 October (Joburg) Time: 08h30–16h00 Location: The Vineyard Hotel, Newlands, Cape Town; Southern Sun Hyde Park, Sandton Cost: R3 150 per delegate www.nlighten.co.za The country’s two leading customer-experience experts from nlighten will share their secrets at this one-day customer experience master class for junior and mid-tier managers. From SA’s biggest blue-chip organisations to prestigious boutique brands, Nathalie Schooling and Brendon BairstowKlopper have helped their clients build their businesses into industry-leading brands—both locally and abroad—by refining their customer experience strategies.
Finance Indaba Africa & FinTech Africa Date: 13 & 14 October Time: 09h30–17h45 (Indaba); 10h15–18h30 (FinTech, Thurs) Location: Sandton Convention Centre Cost: R600 (one day); R1 000 (both days) www.finance-indaba.co.za The African FinTech Awards and Conference form an integrated part of Finance Indaba Africa: the biggest annual expo and conference bringing together peers, technology suppliers, platforms, banks, tools, specialists, CFOs and thought leaders. More than 5 000 visitors will tap into a wealth of resources, know-how and inspiration to gain unparalleled insights into cutting costs dramatically, sending sales and productivity through the roof, and boosting their companies’ profits by 100%.
It’s not a guessing game A masters in project management puts you in charge
The Masters degree in Project Management (MPM) has a strong focus on people, financial and cost management. While the programme teaches the fundamentals of project management, of more importance is learning to integrate projects with a company’s strategic intent. The programme also covers the key elements of procurement, legal aspects of project management, specifically labour and law and contract law are addressed.
14-15 2016 October
The Graduate School of Technology
Management (GSTM) at the University of
Entry requirements include, inter alia, a 4-year degree in either engineering or natural sciences plus at least three years relevant postgraduate experience. Enquiries: Tanya van Zyl Tel +27 12 420 4764 Email firstname.lastname@example.org www.up.ac.za/gstm/mpm
Non-degree Programmes The Programme in Project Management is aimed at all people working in a project environment, in all sectors of industry and government. It is presented over four blocks of five days each with a weekend offering also available. Enquiries: Nwabisa Budaza Tel +27 12 434 2583 Cell +27 76 981 7280 Email email@example.com www.ppm.up.ac.za
The Advanced Programme in Project Management focuses on mastering advanced concepts and integrating modern technologies and management approaches into the project life-cycle.
Pretoria is the leading institute to provide
Learn and network with 40 Young South African entrepreneurs across Enquiries: Mtsetwene inMakhanani more intimate sofa sessions. Tel +27 12 434 2596
management and knowledge diverseskills industries on 2 training stages to and practising engineers and scientists.
Build skills by participating in workshops hosted by experts like Afri-entrepreneur Shaka Sisulu, Radio expert Catherine Grenville, Red Bull Amaphiko Social Entrepreneurship Academy, Fast Company Magazine, Pick n Pay Small Supplier Programme, and others.
Hone yourself in SpeedMentoring Sessions. Connect and network with 1500 other passionate productive young SA Pioneers at the Friday evening Pioneers@Sunset event.
It offers the only Master’s Programme in Project Management in Africa which is accredited by the Global Accreditation Center for Project Management Education Programs (GAC), of the Project Management Institute, USA.
Unleash the Pioneer in you! PREREGISTER FOR TICKETS: WWW.PIONEERNATION.BIZ/TICKETS