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October 2020

STANDING FIRM WITH THE BIG BOYS AN INTERVIEW WITH CLICKMEETING’S MANAGING DIRECTOR, DOMINIKA PACIORKOWSKA

22 42 DIGITAL BANKING

12 REMOTE WORK A COVID-19

REALITY BUT IS IT HERE

TO STAY?

The FinTech Revolution Takes No Prisoners

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VIENNA An Old City with a New Touch for Innovation


Editor’s PICK

Editor-in-Chief: Tal Berman Associate Editor: Eran Shlingbaum Contributing Editor: Elizabeth Goodman

Tal Berman Managing Partner, Rinnovation Group From the time humans were rubbing rocks to build fire, adaptation and innovation have gone hand-in-hand, quite literally. Jump to 2020, as we continue to face the consequences of the unforgiving COVID-19 pandemic one thing is certain: at this moment in time, the necessity for adaptations is the only sure thing that will see us through. The world as we knew it will never be the same, and although eventually the harsh realities of the virus will be a thing of the past, moving forward into the future will require some re-thinking. We have given up so much lately it seems, such as travel, culture, sports, social customs and traditions, you name it. Due to the restrictions of gatherings, especially in closed spaces, we have also had to give up one of the simplest facts of life: going into the office. More and more people are staying safely at home, and those with privilege enough to still have jobs are doing them isolated in their own four walls.

INNOVATION SAGE

However, even before the pandemic started, the choice to work remotely at home or in a coworking space began to emerge amongst many working folk. That budding reality did not solely apply to independent workers or entrepreneurs but also to many regular paid employees in companies and startups. Many saw the opportunity to work remotely as suitable to their wellbeing and career goals.

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In this issue our main theme is the new innovative way of work, what we now call remote work. We discuss companies who choose a fully remote model, as well as the

technologies and innovations that enable such an operating system. We also explore the sustainability of remote work model and delve into the question: is it here to stay, even in post-pandemic times? Moreover, we continue to discuss the digitalization of certain industries. No industry has been revolutionized by digital transformation more than the financial industry, especially the segments of banking and payments. We discuss specifically the outcomes of the FinTech revolution and the way ahead. Finally, amongst the dozens of finalists in the EU’s European Capital of Innovation 2020 contest, one city stands out: Vienna, Austria. In a process which started roughly five years ago, the city forged initiatives to bring in technologies and to foster startups with the intention to come to the forefront of innovation. The process has proven largely successful. We have found it thrilling to watch this old-world museum of a city burgeon into a modern leader of technology and innovation. And we have the pleasure of discussing its rise to success with local opinion leaders.

We truly hope you enjoy this issue and gladly take any comments or requests. Please direct them to:

tal@rinnovation.xyz


ASSOCIATE Editor’s PICK

Eran Shlingbaum Partner, Rinnovation Group Remote work has been one of the hottest trends in the techindustry for the past several years. While some companies had gone fully remote before the pandemic, this system is not meant for every company. Slowly, the concept of remote work has become a reality for some companies as an effective way of doing business. This applies mostly to organizations with global activity. The use of Software such as Slack, Zoom, Monday, and Jira, has become common in almost every domain and not just in the tech-industry. Some might say that the writing was on the wall a long time ago. IBM published an article back in 2014 called “Challenging the Modern Myths of Remote Working: The Evidence for the Upside of Teleworking.” They presented an innovative approach and deduced the fact that 40% of their workforce are indeed working remotely with no harm inflicted on the company’s innovation spirit. However, bear in mind that 40% is not 100% and it seems that the majority of the employees did in fact go daily to a central office. Despite the nice conceptual article IBM presented, real physical work was essential and that without being physically present it seemed that both innovation and business were at risk. Moreover, McKinsey & Company published a study entitled “Innovation in a Crisis: Why it is More Critical Than Ever?” The main finding was that realizing an opportunity in this crisis is one thing, however, being able to exploit it is another. Alas, fewer than 30% of the executives who they interviewed felt confident that they are prepared to address the challenges ahead. The area in which they felt the least prepared was realizing and delivering growth opportunities. One phenomenon we might experience in the next few years is the dismantling of the technology hubs like Silicon Valley, New York, and others. The ability to work remotely from almost anywhere in the world creates flexibility, but also a gap in the innovative atmosphere these hubs are

creating. BigTechs like Google and Facebook have already declared that in the upcoming months they will continue to work remotely. It is time the raise one important question: how are corporates supposed to create new innovation processes when they cannot use their facilities as they convert to “remote first” mode? The answer is quite easy. I expect to see new startup companies emerge with a solution which will close that gap. I can honestly say that none of the startups working on effective solutions in this vertical could have foreseen the COVID-19 pandemic becoming such a growth catalyst. We are beginning to witness the emergence of companies like Yac, which enriches the popular product of Slack with voice messaging to support efficiency, to reduce unnecessary noise, and mainly to save our ideas which emerge in brainstorm sessions. The implementation of such solutions is actually not technological. It is mostly cultural. In organizations where innovation is a dominant value, it can be fast. It might change the internal innovation process radically but in no way will it ever stop it. Lastly, new companies being created these days are shaped by the digital world. Just like millennials and generation Z youngsters who were born to a digital era, the new generation of startups is born to an era of remote work. This system makes them even quicker, more flexible, and agile than ever before. It will assist their go-tomarket, which will be faster and better. That goes for older companies just as well. For some companies it may be faster and cheaper to rebuild their innovation department seeing as the pre-COVID-19 world is not coming back anytime soon. Therefore, without a much-needed change they will not survive.


AgriTech Spotlight

NYC Climate Week Event Rinnovation Group’s Panel – How do AgriTech Startups Tackle Global Climate Challenges?

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Deciding on the Indispensable Mile

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Standing Firm with the Big Boys

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22

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INNOVATION SAGE

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Vienna – Once a Geographical Bridge Now a Bridge to Amazing Innovation The Power of Creating a Self-Preservating Innovation Right in the Heart of Europe

38 44

A Bank? What Is a Bank? Did the FinTech Revolution Make Banks Obsolete?

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54 52 64

“Am I Working from Home or Living at Work?” - Billions of People, Year 2020

An Office? Who Really Needs One? The Trend of Going Fully Remote as a CompanY Assisting the Model of Remote Work to Succeed

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Remote Work – Navigating COVID-19’s New Normal

When Innovation Becomes a Tradition in the Financial Market: Digitalization, Cryptocurrency, and Security in the Fourth Technological Revolution

Challenging the Traditional Way of Work

Digital Banking, PayTech and the Cashless Economy – A Passing Trend or a New Standard? Innovating Payments – A Story of an Israeli Startup Winning the Financial Domain

Finally! The Wakeup Call for Banks

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The Hills Are Alive With the Sound of Entrepreneurship

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CONTENTS


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AGRITECH

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AgriTech Spotlight An Interview with

Omer Davidi,

CEO and Co-Founder of BeeHero

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What is BeeHero and why is it important to agriculture and farming?

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With fewer and fewer resources and exponentially increasing demand, industrial farming is at a breaking point. Soon it will not be able to meet the needs of a hungry world. We have seen how the farming industry is adopting new technologies, and how it helps improve productivity. Pollination – a critical

component in the process of turning a flower into food – has is one of the most important impacts on crop output. The first thing that comes to mind for most of us when we think about bees is honey. However, their impact covers much more. In fact, they are actually responsible for pollinating more than 70% of everything we eat, the mechanics of which are powered by a probabilistic equation that depends on hundreds of parameters.


BeeHero helps growers maximize crop yields through pollination optimization with the introduction of PrecisionPollination-as-a-Service. By successfully converting the amazing, million-year evolutionary process of pollination into mathematical models, BeeHero combines sophisticated machine-learning algorithms with low-cost embedded sensors and places them in commercial beehives to stimulate full output potential during peak pollination cycles. By measuring pollination quality in real-time, BeeHero can optimize hive health, strength, deployment, and efficiency providing quality assurance to pollination. By tracking and optimizing pollination in real-time, BeeHero ensures hyper-efficient pollinators that can increase crop yields by 30% on average for crops including but not limited to almonds, berries, soybeans, gourds, sunflowers, apples, canola, cotton, and more.

Where are you guys in the process? In the last three years, the BeeHero team has worked very hard to build superior and affordable technology that can enhance the way crops are pollinated and to help beekeepers reduce bee-mortality, reduce operational costs, and improve the quality and health of their bees. We have seen some very successful case studies in a handful of crops that show the impact of BeeHero on crop yields. We are commercially focused on the US, with more than 20,000 hives on our platform, owning by far the largest dataset of bees and pollination worldwide.

What are your future plans? We plan to make Precision Pollination available to farmers and beekeepers globally to reduce operational costs

and increase crop yields, maximizing output without any extra work. In turn, beekeepers, who have been struggling for the past ten years, will be able to maintain their businesses, thrive, and ensure the welfare of their bees in the process.

How did COVID-19 affect your startup? It is a very challenging time for companies. The uncertainty of everything makes a lot of companies reduce burn-rate to a minimum, just trying to keep their heads above water. We were fortunate to close a funding round when COVID-19 had just started, giving us good runway to overcome the unforeseen challenges ahead. We operate in agricultural spaces (food production) that were less affected than other markets. Yet, despite our luck, we did have to change our operations. The lack of networking events and being unable to meet farmers in person made us rethink and re-strategize the year ahead.

Where do you see agriculture and farming in the year 2030? We have seen in the last years how innovation and adoption of data-driven farming has allowed farmers to avoid fiscal collapse, while those slower to adopt have not been so lucky. I believe this trend will continue. We will probably see an increase in the replacement of humans by robots, including semi-autonomous tractors. Tools in which farmers used to invest a lot of money will become available in service-based models. Farmers will have an “AppStore� for services and plenty of companies will integrate with each other to provide a full solution suite. At BeeHero, we intend to play a role in pushing forward a new era of Agritech.


NYC Climate Week Event

Rinnovation Group’s Panel

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How do AgriTech Startups Tackle Global Climate Challenges?

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Author: Tal Berman

s the agriculture industry has undergone great change in the era of digitalization, one of the main benefits it has seen is the reduction in its massive effect of climate change. Agriculture is one of the leading causes of the phenomena of

climate change due to its large greenhouse gas emissions, the devouring of forestry for farming, and more. Ironically, climate change has also been one of the major challenges with which farmers deal nowadays, with changes in rainfall, pest control, and more.


As part of the NYC Climate Week 2020, the Rinnovation Group hosted a panel of experts to talk about how AgriTech startups tackle these issues. Michal Devir of Rimonim Agro Fund, Sarai Kemp of Trendlines, Israel Talpaz of SeeTree, and Roy Livneh of PlantArcBio, have discussed together this significant and interesting topic. “Farmers are not using available capabilities such as data analysis, which other industries do,” says Israel. “Add to that the climate crisis, these inefficiencies have created huge losses to them and less food for humanity. Our startup deals with trees, which is a production unit each with inputs and outputs. You will probably not run a factory without a monitoring system per se, albeit that is unfortunately exactly what you see in farms all over the world today. No matter where they are in the world, they are still all analogue.” “We invest in a company called SaliCrop,” Michal explains. “They deal with salinity stress. Back in the days I did not realize what the problem was exactly. When I drilled deeper, I actually realized that 20% of today’s farmland is lost because of the rising seawater. So, although initially I looked at this startup as AgriTech, it is truly a startup that deals with climate changes.”

“The driving forces for change in agriculture are consumers, regulations, and common practices, which are not good enough anymore,” claims Sarai. “These practices need to change because the technology enables us on one hand and because big companies are pushing for such on the other. For example, because of the knowledge that Agritech startups provide, such as crop monitoring with sensors, we now understand that some crops need less water. Consequently this is excellent for the environment because we now have the appropriate tools.” “Most AgriTech startups are tackling the same basic problems, just from different angles,” explained Roy. “The basic problem is elementary: how do we produce more food with less fewer resources? For instance, if we can produce the same amount of food with less land, then we can use the extra land for other usage, like maintaining more of our precious rain forests. Moreover, recent research found a clear connection between improved seeds, like those with higher insect tolerance, and the reduction of emission. So, with this deep in our consciousness this will obviously be something to which the world will start looking in the near future.” You may watch the rest of the panel on Rinnovation Group’s YouTube


INNOVATION SAGE

REMOTE

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WORK


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Challenging

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the Traditional Way of Work

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An Interview with

Prof. Sara Perry

Associate Professor of Management, Baylor University


How many times have you gotten up in the morning and wondered why you need to spend an hour or so in traffic rather than catching up with your mailbox? You have just rolled over in your bed and wanted to stay home. Well, in the COVID-19 era, this routine has been flipped on its head. You miss your cubical, you miss having coffee breaks with your teammates, and you could use some spare time chatting with the guy next to you about yesterday’s ball game results. How do we balance these two obvious needs – for efficiency on the one hand, and socialization on the other – once the dark COVID-19 clouds clear away? We discussed the new trend of remote work with Prof. Sara Perry of Baylor university.

Hi Professor and thank you for taking the time to talk to us. Please start by telling us a bit about yourself. It is truly my pleasure. So, I am an associate professor of Management at Baylor University as part of the management area of concentration within the Hankamer School of Business. I teach primarily juniors and seniors within the HR major. My courses include “Negotiations and Conflict Resolution” and “HR Staffing and Talent Acquisition.” My research revolves around the topics of employee health, stress, and wellbeing. My focus is specifically remote work and other factors, such as leadership, personality, conflict resolution, etc. I split my time evenly between my teaching duties and my research.

Do you mind telling us more about your research? Sure, my main focus is how employees better perceive and deploy resources for the sake of their wellbeing, and the important outcomes like engagement, performance, etc. I have been testing a theory throughout some studies that people do not necessarily utilize the same set of resources in the same way. And of course a lot of research supports that. Some people will not recognize the same resources while others will do so fully and

use them in a much more efficient way to deliver better results and protect their wellbeing. Then I started looking at topics that play into that theory, one of which is remote work and flexibility, about which I wrote my dissertation. So, ultimately I seek to understand how people use “flexibility” as a resource to achieve their goals.

“When most people think of remote work, they think naturally about home. But remote work can also take place at a coworking space, a coffee shop, a library, or any other public space.” What is remote work exactly and what are some fully remote companies? I define remote work as any work that is done away from the primary office or the customer site where most people gather. When most people think of remote work, they think naturally about home. But remote work can also take place at a coworking space, a coffee shop, a library, or any other public space. I measure the


extent of remote work based on how many hours one works remotely in relation to how many total hours one actually works. I do not include in that moonlighting (working at nighttime) because that is something that is generally factored into the equation anyway. Checking your mailbox late at night does not change the context of your working style. Therefore, us scholars define remote work as a change in context and not content. Fully remote companies are defined by an absence of a central location or office and the consequent dispersal of its employees.

“A lot of people are surprised at how well-accepted remote work has become, especially during the COVID-19 pandemic.”

INNOVATION SAGE

Why is the model of fully remote companies working so well? And is it surprising?

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A lot of people are surprised at how wellaccepted remote work has become, especially during the COVID-19 pandemic. Many folks realized how easily they could work remotely, whereas this was not an option before. In our qualitative research we found that initially many workers really liked the idea for all sorts of reasons, while others hated it and really wanted to go back to their office due to loneliness and lack of interaction. We need to remember that the latter were actually stuck at home in quarantine and that reality truly interfered with their feeling of agency around the situation. However, once workers got set up with technology and other necessary resources, they realized they were able to complete their tasks at home. They felt more comfortable with the idea and appreciated that many jobs can really be done remotely. So eventually it is all about adjusting your processes and

routines for you and your household. In my opinion, working remotely allows enough flexibility for people to manage their lives and their work. One may be able to avoid time-consuming activities, like commuting and office interruptions, so that he or she may be much more efficient. Remote workers end up moving things around so that they can achieve their daily goals in a way that suits them. Therefore, many companies will see an increase of worker satisfaction. However, research also shows that when people work remotely for more than two days a week, dissatisfaction enters the picture. Workers do need some face to face time, to be able to brainstorm and interact. Socialization is a natural part of human life. Companies should be really aware of that so that they make sure these can be found in some ways, at least virtually.

Did COVID-19 assist in proving the success of the remote work model? It certainly forced everyone to try it at the beginning. The people that were most fortunate were the people who actually could work at home. The others were either on the front lines or out of work. It proved we can do things differently in many sectors, for instance using video chat platforms to substitute for in-person meetings. COVID-19 required us to innovate how we do our work and manage our lives. It allowed us to get rid of things that were not helping.

“Some companies have considered completely converting to a remote model or at least adopting a hybrid model because of all the advantages they have seen.”


What are the biggest challenges of remote work? What are the advantages? The biggest challenges of remote work are the isolation, the lack of access to impromptu information, some of the serendipities of consulting some issues with coworkers and colleagues, and the interpersonal connections at the office. Initially it was thought the biggest challenge was with people slacking off by playing video games or watching Netflix, but that is definitely not what the research shows. People in many sectors were actually more productive. Some companies have considered completely converting to a remote model or at least adopting a hybrid model because of all the advantages they have seen. Despite the isolation that many report to feel, decreased interaction on a day-to-day basis minimizes drama, which proves to be an advantage for many HR teams. However, there is a concern when it comes to family life. Some workers like to compartmentalize their lives, meaning that once they arrive at work, they do nothing but that; and, once they go home they do not work at all no matter what, but rather focus on their personal family lives. The separation between work and home-life allows for productivity in their respective roles. With the advent of pandemic-life, the majority are somewhere in the middle. Spouses are likely working together at home while the kids are remotely studying also at home, so there are constant interruptions that require flipping back and forth between work and family mode all the time. Such situations require the use of many resources for all family-members involved. Not to mention, when the entire family is online all the time and there is a considerable need for strong bandwidth, technology interruptions ensue. If one cannot setup routines and boundaries, and create an uninterrupted time for work, it may be stressful not only for the individual

but also for the whole family unit.

How do you create a company’s culture when you are fully remote? At Baylor University we have done scheduled coffee breaks, and that was really nice especially at the beginning since none of us knew what was going on. It helped to process and deal with the situation together as opposed to individually. A lot of my students did their summer internships completely remote, and companies who managed this successfully were the ones who substitute in-person socializing with scheduled virtual meetings. So, they would have all the interns logging into these calls with other people from the company. They would organize round-tables and play icebreaking games. They would play trivia games with giveaways which arrived in the mail. This was one of the experiences that most impressed interns, such as when they received all those chachkies with the company’s logo in the mail, like the package you receive on your first day on the job. They did everything within their powers to transmit the company’s culture to the interns. The challenge around this, however, is that it requires a specialized team though to arrange such activities.

“Leaders, managers, and HR will be more open to the possibility of employees doing their work remotely, at least part of the time.” Will this trend of working remotely continue after the COVID-19 crisis? More employees will work remotely than they did previously. Leaders, managers,


INNOVATION SAGE

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and HR will be more open to the possibility of employees doing their work remotely, at least part of the time. I do not have data on it, but based on many conversations with experts and on many publications about this trend, I do predict that this trend will continue. Some employees have experienced more challenges in working remotely, and will not wish to continue with that model, but that really does not matter. Research shows that the flexibility to choose is the most important part. In order for remote work models to be effective, companies should at least provide the option for some remote work on a part-time basis because that will deliver the best results. The companies who will experience a backsplash are those who demand that the workforce return completely to the office, even if they know that the tasks can be completed outside of it. Managers currently have a body of evidence from each employee to which they should be looking, such as how their workforce performed and how they responded to the situation. They should be able to let go of control a little bit because over this period of time they should have built some trust. Some of our corporate

partners have actually mentioned that some of their managers, who were previously against the concept of remote work, observed more or at least the same productivity from their staff, and therefore changed their way of thinking. I do believe, however, that it is the responsibility of the employees to communicate what it is that they want.

“In terms of innovative ideas, I would advise companies to set up times for interactions between managers and their staff, not in a manner of micromanaging but in the manner of showing support. Companies need to make sure that their people are not feeling obligated to do these activities, but rather that they are there for them to bring together.�


What kind of innovation contributed to the level of security amongst employees that enabled them to accept the concept of remote work? In our study we have seen that the employees emphasize how much their companies invest in the concept of a home office. They allowed them to bring their PCs, their standing desks, comfortable chairs, you name it, or even went so far as to invest in acquiring the resources they needed on the company’s expense. More than the physical needs, the real benefit is the feeling of support of their employer. The more the companies showed their support, the better. As a company, you want to avoid the employee feeling alone and isolated. In terms of innovative ideas, I would advise companies to set up times for interactions between managers and their staff, not in a manner of micromanaging but in the manner of showing support. Companies need to make sure that their people are not feeling obligated to do these activities, but rather that they are there for them to bring them together. The managers must communicate the fact that although the situation is quite unique, they are still trying to build a company’s culture. For example, AT&T has been truly innovative in this. Some of our alumni lead these activities and some of our current students participated in an all-summer externship program. According to them, they were impressed and even touched by the balance between professional development and social interactions, especially in the way they did everything within their abilities to make all people feel connected.

“Companies must give their employees the freedom and flexibility to choose the working atmosphere for themselves, whether it is remotely or not.” What kind of future trends do you see in terms of remote work? Technologies for remote collaboration must continue to improve. I sure hope that someone out there is working on something that allows for more impromptu without the interruption. Nowadays people use instant messaging apps but that really disturbs the flow of work. There is a need for a more even balance and smoother flow of social interaction and uninterrupted time to really dig deep into work. Moreover, as I have mentioned previously, companies must give their employees the freedom and flexibility to choose the working atmosphere for themselves, whether it is remotely or not. Coworking spaces will play a major role in this dynamic, especially for the fully remote companies, seeing as they provide a solution to the majority of their challenges. Their employees will get the sense of belonging in an innovative space where they do have social interactions with others. They can also choose when to just close their own office door and work without any interruptions.


“Am I Working from Home or Living at Work?”

INNOVATION SAGE

Billions of People, Year 2020

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Joey Leskin, Contributor

Cross-Cultural Communication Facilitator and Director of Abroad Experiences for KAHAL Abroad


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ortunately for me, I have been working remotely – often from home – for over five years across multiple countries. I have got it down, I promise. Fortunately for you, I want to share the knowledge now that we are all in the same WFH (Working from Home) boat (though not literally because cruises are cancelled). It has been six months since most of us made this transition, and while some offices are encouraging employees to come in, the Twitters of the world are doing the opposite and committing to WFHFL (Work From Home For Life) which is as beautiful a notion as it is a terribly ugly acronym. For some, working from home is not feasible in the long term and that is fine. For many, however, working from home provides a new way of life that someday might actually be enjoyable, perhaps? It is slowly occurring to people that without the specter of COVID-19, the beauty of WFHFL is that “home” can be anywhere with strong Wi-Fi and stronger coffee. That holiday in the south of Spain becomes a working trip where a lunch break is no longer supermarket sandwiches but fresh tapas and a glass of Sangria (non-alcoholic, of course. I would never suggest drinking on the job). This shift will create societal change on an unprecedented scale. We do not even need to live in a city anymore, spending hard-earned cash on rent and public transport. We have dreamed of holding our dream jobs in dream locations – and now it is possible. We can do the same job, make the same amount of money, and experience the same fulfillment all while living on an eco-farm in the mountains sipping fresh chocolate milk from a margarita glass instead of sitting in traffic for two hours every day. Yet doing this right is a different challenge. In my experience, there is one fundamental factor that enables success when working remotely: a human-centric approach. To break this down, there are three key elements to consider, which will lead to organizational success when staff start taking advantage of the new-new reality. The first is the setting of expectations: there need to be parameters around working from wherever we want. For instance, productivity stops if a team previously on the same time zone is now so distributed that nobody is ever awake at the same time; likewise, if some on the team are really having that lunchtime Sangria on the beach, it is not fair to Linda in HR who just wants a simple life in the suburbs but also needs us to be sober during the afternoon. Collaborative establishment of a fresh set of team norms, respectful boundaries, and agreed-upon behaviors will alleviate this dilemma and make sure everyone is on the same page with respecting boundaries, regardless of their location. The second is that of dehydration. This is always an issue in life, but I am not talking about the physical effects of not drinking water, I am talking about the drying up of creative juices. The “water-cooler conversations” – informal chats said to happen around the water-cooler, which end up sparking some of the most organically creative ideas – cannot take place when the coolers are a thousand miles away. Thus, the “hydration” needs to be replicated in a pre-emptive and practical manner. Simple solutions to foster this environment virtually could be a dedicated open Slack channel or even an agenda-less happy hour put into everyone’s calendars. There is a reason the big dogs in Silicon Valley invest so much money in communal office areas and it is not just because they have an unhealthy penchant for Ping-Pong and beanbags. Finally, the big one: robots. A classic concern framed differently here. When we only ever see each other through screens we can forget that our colleagues are not in fact robots, but real people with real lives: families, hopes, dreams, desires, needs, dogs, cats, and coffee additions. After we close our video calls and their faces disappear into the ether, these people continue to exist. The proactive creation of spaces and experiences for colleagues to interact naturally as people, and not just as job descriptions, is essential in providing a human touchpoint and a sprinkling of empathy. Remember, in some cases we might not have had an in-person conversation all day long. We are not robots and not necessarily designed to work apart. Companies embracing remote work need to embrace this entire approach, where the needs of the people, remote or not, are built into the very fabric of the company culture. A human-centric approach is the most important thing for WFHFL (still ugly) because a business will only thrive if the people who make it are happy and motivated. Fail to ensure this and even all the Sangria in the world – alcoholic or not – will not help us.


INNOVATION SAGE

Standing Firm with the Big Boys 22

An Interview with

Dominika Paciorkowska,

Managing Director at ClickMeeting


Video Conferencing solutions are the hottest new trend in these COVID-19 times. “Let’s video chat” is the phrase with which you end every preliminary sales correspondence, whereas every conference has turned virtual lately. Of course, nowadays it is a necessity. And moving forward it seems that this reality will remain to some extent even in postpandemic times, as it inconsequentially opened up limitless new opportunities for conducting business. One startup that has been making a name for itself and was even voted by techradar.com as one of the top-10 video conferencing solutions is ClickMeeting. Together with the BigTech famous names of Microsoft and Google, this undertaking from Poland has been one of the best webinar enabling tools out there. We have chatted with ClickMeeting’s managing director, Dominika Paciorkowska, and discussed how in today’s technological world they have been able to gain such an amazing ground with their ultimate product.

Such an amazing privilege talking to you Dominika. If you will, first do tell us a bit about yourself and your background? I started my professional career in the field of finance. That was not my true passion, but rather a choice to follow a family tradition that goes back three generations. Soon, I realized that what I really loved and cared about was working with people, especially as it concerned finding solutions for more complex and abstract issues. Understanding finance turns out to be a great background as it taught me to balance the execution of ideas with discipline, and how to channel effort with an expected outcome. It guided me into the roles of the Operating Director and later to Managing Director, the latter of which is my current position at ClickMeeting.

What is ClickMeeting, and what is your role in the company? In a few simple words, ClickMeeting is a webinar and online meeting platform for product presentations, training sessions, huge virtual events, online classes and lectures, business meetings, and videoconferences. I have already been involved with the company for over four years as a Managing Director. My main tasks include co-creating and implementing the company's strategy as well as making key decisions on the company’s development and operations. However, my main focus is on building an efficient and friendly environment for the team. That way, each of us is willing to give their best, not only to the company and the customers but also to each other. It is so important for people to know what the value behind their tasks is and how it adds up to a bigger picture. And it is equally important for them to know that their value is recognized. Making sure that team members understand what we strive for as a company, ensuring we share the same vision, and are happy working together is what I believe results in our joint success. “The organizer, presenters, and participants only need the latest version of the browser and Internet access, and then they are ready to go and can start using the platform.”

What kind of products and services do you offer? As I mentioned, our product is a platform for running webinars, product presentations, training sessions, business meetings, and video conferences. Unlike other platforms, ClickMeeting does not require installation. The organizer, presenters, and participants only need the latest version of the browser and Internet access, and then they are ready to go and can start using the platform. We also have


INNOVATION SAGE

many unique features such as passwordprotected events, the ability to record webinars, whiteboard, chat, discussion, and screen-sharing. Of course, there are many other features and ways to use our product. One of our biggest advantages is that anyone can test the ClickMeeting platform, free of charge for thirty days, which I encourage you to do. How did COVID-19 affect your company? We can only assume it was a growth driver. There has been a high increase in the demand for digital collaboration tools. Schools, universities, and companies have mostly switched to online communication. The lockdown forced by COVID-19 has also changed remote work from an attractive option to an absolute necessity. That was an experience we shared with our customers in the middle of March, so we decided to close the office and start working fully remotely. We knew firsthand what our users’ needs were and how to deliver them. Working in dispersed teams and learning online on a scale we had never experienced before has yielded a huge interest in video conferences, online meetings, and webinar solutions. In March 2020, our customers hosted five times more webinar sessions than in March 2019 and gathered over three million attendees. From the very beginning of the pandemic, our top priority was to deliver a stable application for our customers to switch to 100% online communication successfully.

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“When it comes to data protection, we have deliberately placed all the servers and data processing on the EU territory to ensure that our customers’ data is well protected.”

Lately, your video conferencing software has been ranked as one of the top 10 video conference tools by techradar.pro, along with giants like Google and Microsoft. What do you think makes your product superior according to your customers? What differentiates you from these fierce competitors? ClickMeeting is a European company that follows strict GDPR (General Data Protection Regulation) rules. When it comes to data protection, we have deliberately placed all the servers and data processing on the EU territory to ensure that our customers’ data is well protected. ClickMeeting is a perfect solution to run any kind of online event, from small interactive meetings to huge virtual events gathering up to 20,000 viewers. We offer a range of interactive tools that make online events more engaging, which we encourage you to explore. Thousands of marketers, teachers, and managers worldwide love them. Because ClickMeeting does not require software installation, it works almost on any operating systems and devices. It is even accessible through the browser on your smartphone. The user interface includes tools and features that increase engagement during webinars, while at the same time they remain simple to use. Our mission is to help organizations stay connected online.

ClickMeeting's upper management is predominantly female. Kudos! What are the advantages of being such a refreshing company in that regard? Maria Skłodowska-Curie once said about women: "We must have perseverance and above all faith in ourselves. We have to be sure that we have a talent for something..." This statement gives


many women inspiration, as well as our company specifically. Personally, I think that everyone on our team, regardless of gender, brings individual values, especially when it comes to mutual respect and openness in the way we engage with others. Many believe that women in particular are characterized by versatility, the capability to multitask, and the ability to listen and empathize. So perhaps these qualities lend themselves to an effective and progressive team. At the same time, I must admit that during my ClickMeeting career, I experienced the men I have worked with to also possess these characteristics. As a manager, I find that the most important thing for me is to find the person who best fits a certain position. It allows us to achieve great things together, and that is the biggest advantage of a dynamically evolving company.

“Working from home has amazing benefits for both workers and businesses. Employees who work remotely report better work-life balance, increased productivity, and focus along with a reduction in stress levels.” Let’s talk about today’s working habits and the fact that so many people are working remotely. Do you see that trend continuing, or do you see it turning around? Why? Working remotely for many leaders and managers seemed terrifying. Concerns about the lack of control over the employees, the lack of knowledge on how

people use their working day, and, most importantly, whether their work is effective, caused a lot of stress. However, the situation caused by COVID-19 showed that many were wrong. More than half of hiring managers admit that remote workers have become more commonplace compared to just three years ago. Moreover, hiring managers predict that 38% of their fulltime employees will work remotely within the next ten years. Working from home has amazing benefits for both workers and businesses. Employees who work remotely report better work-life balance, increased productivity, and focus along with a reduction in stress levels. One of the keys to success is a satisfied employee, so why change it?

What other trends should we expect regarding our working habits and the way companies manage their workforce dynamics? When working remotely, trust in employees is a crucial element. As far as trends are concerned, there are two main points: 1. A high level of confidence in employees, in their abilities regarding time management and the balance they can achieve between work and household chores. 2. A low level of trust, which results in increased checks on how time is managed and how tasks are performed. In the long run, companies with low confidence will find it much harder to manage their team, retain staff, and search for new talents. To achieve greater trust, it is essential to develop communication skills. And, a big advantage of remote work is the ability to hire a potentially good employee from outside the location where the company is based.


“Seeing how well the employees responded to the remote work during a lockdown, many companies decided to implement this solution in the long-term.”

INNOVATION SAGE

What kind of innovation will shape these trends?

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A total shift to remote work and education seemed very challenging for many companies and organizations. Recent months show that those fears were unsubstantiated. Thus, seeing how well the employees responded to the remote work during a lockdown, many companies decided to implement this solution in the long-term. With this in mind, we think that making online communication and networking more interactive is a must. Hence, we invest time and resources into making our tools more innovative and intuitive, and we allocate many resources on educating our customers about the benefits of using them in their everyday communication.

“Making the tools as intuitive as possible is one of the most important aspects. Another one is accessibility. That is why we base our platform on the Internet browser, which enables the users to access events from any device at any time.” What is the future of video conferencing software and other related remote working tools? Video conference allows for new and greater possibilities to meet with anyone, no matter where in the world they happen to be. Technology has completely changed the way modern businesses operate. We can now market and sell our company’s products to customers from every corner of the world, get traditional time-consuming tasks done in the blink of an eye, and even host real-time meetings with colleagues from different time zones. As remote work becomes more popular, business leaders


need reliable ways to connect with all of their employees — even if some of them reside in different countries. If you had to make extensive travel arrangements for your out-of-office workers to attend meetings, nothing else would ever get done. Once again, web conferencing comes to the rescue. You do not have to fly your salespeople around the world or your employees back to the company’s headquarters regularly. You simply invest in a reliable web conferencing platform and host meetings via the Internet. S0, making these tools as intuitive as possible is one of the most important aspects. Another one is accessibility. That is why we base our platform on the Internet browser, which enables the users to access events from any device at any time. Last but not least, comes the ease of use; it is crucial that anyone, regardless of their age or tech knowledge, can use it with no hassle.

“Our goal is to make ClickMeeting more accessible, which means that it fits naturally into the most used and popular tools of everyday work.”

What is next for ClickMeeting? Where is the company heading? Recent months sped up many processes inside ClickMeeting. The team size almost doubled, which allowed us not only to add new features to the platform but also to address better internal operations. The environment is so changeable given the current climate that flexibility and mindfulness seem to be a better strategy than creating time-consuming long-term plans. As we carefully analyze the feedback from our customers, many product changes are driven by our users and the demand comes straight from the market. As we use ClickMeeting in our everyday work, lots of valuable ideas emerge from the team directly as well. When defining the scope of work, we always consider how it adds value for the users. It refers not only to creating new functionalities but also simplifying the ones which already exist on our platform. Online communication, even though it became a must, is still challenging in different areas, from technical issues and feeling comfortable in front of the camera to presenting the right content and gaining engagement of our partners. Our goal is to make ClickMeeting more accessible, which means that it fits naturally into the most used and popular tools of everyday work.


Deciding on THE

Indispensable

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Mile 28

Sharon Vanek, Contributor

Executive Director at CICC – California Israel Chamber of Commerce


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ne issue on which many investors are contemplating in the past few months surrounds the question, “what is the most indispensable step when concluding an investment: signing the contract or meeting the people?”

During this time, I conducted numerous conversations with both investors and entrepreneurs in an effort to collect some information about the overall feeling they have regarding the effect of COVID-19 on the investment landscape. The main concerns that continued to surface during my discussions with startup executives were the effects of the pandemic and travel restrictions on investors, and whether it will cause cross-border venture capital investment to decline during the second half of 2020. The main reason for this gloomy enquiry assumed that both social distancing and travel limitations will critically affect the Due Diligence process of conducting face-to-face business. This question is especially critical for companies who are seeking foreign investment, as some VCs might favor domestic investments in time of limited travel opportunities. Is this true? Typical VCs lead generation funnel pipeline, which is being generated through a combination of various sources, both inbound and outbound. The inbound means “dry” database and CRM listings. The outbound are the meetings you hold with potential investors during conferences, business meetings, social interaction and more. This really raises the question: when does a startup get an equal chance to present its deck –during a face-to-face interaction or when its deck sits on a pile of other decks? How much does the in-person interaction influence the investors’ final decision? Well, when a VC partner convinces his/her peers to invest in a company, he or she becomes an inseparable part of the startup company and secures his/her position as a partner for the long run. This should be true from the perspective of both sides (otherwise one would just go get a loan from the bank). It is more accurate from the investor’s point of view, as they invest money in the startup and would like to stick around as long as possible in order to maximize their investment, while the members of the founders team might leave the company at any given time. Hence, when thinking about the Due Diligence process that many VCs tend to follow, we can understand why investors traditionally favor face-to-face meetings. Think about it for a moment – throughout the history of business, the first impression is most often the key to determining whether you could even receive a business card followed by a promise to read your email. Once investors like a product’s promise to scale, they spend time with the team to create some bonding experience and comfort their gut feelings. The goal of the face-to-face interaction over a period of few weeks is to bond and solidify a relationship. How can we reach this goal when business is increasingly conducted in virtual space? How can one form a relaxed relationship without bonding activities? In light of this new challenge, needed to change their mode of operation when they screen startups. In my opinion, video conferencing truly proved revolutionary in opening up possibilities, such as the ability to attend a business meeting on the other side of the world, or the capability of teams to function while working in remote locations. However, I doubt it can much longer sustain a business environment that necessitates the simplicity of eye contact, body language and the “seal-the-deal” handshake of an in-person meeting.


An Office? Who Really Needs One?

INNOVATION SAGE

The Trend of Going Fully Remote as a Company

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Author: Tal Berman

Contributor: Darcy Boles,

Director of Culture and Innovation at TaxJar

Contributor: Darren Murph,

Head of Remote at GitLab


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he recent COVID-19 pandemic heralded the necessity of remote work, as with every passing day it seems that the most effective way to control the virus is via quarantine. In some countries and companies, workers will not be going to the office for at least six more months. However, regardless of the catalyst that brought about this shift in the first place and perhaps long after the virus will finally be contained, many workers across the world will still be working from their own personal home office.

“Remote was always the future, and suddenly, it is the present.” “Remote was always the future, and suddenly, it is the present,” the Head of Remote at GitLab, Darren Murph tells us. The open-source DevOps platform is a pioneer fully remote undertaking with over 1,300 employees in more than 65 countries and no physical office. “Everyone thought our founders were crazy,” Darcy Boles, the Director of Culture and Innovation at TaxJar shares her feelings in retrospect. Another important pioneer in creating a fully remote company, TaxJar, a technology solution for busy eCommerce sellers to manage sales tax. “It has not been until this year actually and in light of COVID-19 that remote has been seen as an advantage in the workplace.” It is no secret that our working habits are changing and do not resemble those of older generations. “We are facing a really interesting time,” Darcy tells us. “One of the challenges with working remotely is that as a remote individual you have to be really self-aware and set your own boundaries. If you do not and your office is in your house (or your kitchen in your 300sq ft apartment, like mine), you will never take a break.”

“COVID-19 accelerated the global embrace of remote work by at least 10 years.” We could not agree more and wonder what the rationale was in going fully remote. Darren tries to explain, “Decoupling results from geography were inevitable. COVID-19 accelerated the global embrace of remote by at least a decade. And due to millions experiencing a familiar liberation simultaneously, it has created a change that will continue to shape the evolution of the work climate. The perfect storm hit. Even before the unprecedented events of 2020 unfolded, businesses were already eager to de-risk and create a greater efficiency. Society was already at its breaking point with the stratospheric cost of living and grueling commutes associated with major job centers. As such, many businesses had already begun to establish adequate tools and technological infrastructure to prepare for a major shift. For too long, the established job market assumed careers happened in a templated way; it seemed that tradition was too strong for any other truth. Now, the eyes of the workforce have opened and see that change is possible. There is immense power in huge swaths of the working world asking the following questions at the same time: ‘What could my life look like if I did not commute five times a week? What change is possible if I integrate an ideal work-life balance? What if I could make my ideal vacation destination my home?’” However, workers had already been asking these questions before 2020. As previously mentioned, fully remote companies had become an interesting and noticeable trend even before the pandemic. The fact that some companies are forging this path and employ a specific function to manage this innovative concept is a phenomenon in and of itself. “I work at


the intersection of culture, operations, people, talent branding, marketing, and communication,” explains Darren. “I collaborate with all functions of the business to support GitLab clients and partners seeking guidance on mastering remote workflows and building culture; I also collaborate with our People Group to improve onboarding and manager training; I champion and evangelize GitLab's allremote culture and initiatives through content creation, interviews, webinars, case studies, podcasts, and partnerships with organizations and universities; and, finally, I work across the company to ensure that GitLab team members acclimate well to remote, give themselves permission to embrace our values, operate with remote-first workflows, and share our learnings with those outside of the GitLab organization.” Darcy’s position with TaxJar resembles her colleague’s. And driving this mission home, she considers it to be a lifetime undertaking, “I saw an opportunity to help a startup define and scale their amazing values-driven culture, with no physical workplace whatsoever.”

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“Being remote allows each individual to choose their environment, their set up, and at most times, when and how they work.”

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As the innovative creation of fully remote companies gains more and more popularity, we at Innovation Sage seek to understand whether this model is sustainable and ultimately successful. “I think people are really starting to realize the advantages of remote work and I do not find it surprising at all,” observes the enthusiastic Darcy. “Here are my top

three reasons working remotely works so well. Firstly, it considers our autonomy as humans. We are all unique individuals and being remote allows each individual to choose their environment, their set up, and at most times, when and how they work. That autonomy is essential to our psychological wellbeing. Second, remote work eliminates the burdensome commute. It does away with everything a commute entails – not only the hours of driving in frustrating traffic jams, but also the stressful mornings to get out the door or the rushed evenings to get home in time to feed the kids dinner – which may prove taxing on many individuals, families, and the environment. Remove the commute from the day-to-day equation time frees up for the things that really matter, like your life. Finally, one of the primary benefits of remote work is greater focus. When you are working remotely, there is no dillydallying outside the conference room before a meeting or getting caught up in unnecessary drama in the breakroom. When remote is done right, it is intentional and focused – do great work when and where it works for you.” Darren adds another key factor to the mix, “Humans are highly adaptable, and all-remote enables everyone to operate on a single playing field. While many are still working to implement stronger documentation and overhaul workflows to optimize for remote, the collective loss of a commute and added flexibility are net positives. In this paradigm, the key here is an even playing field. All-remote means that no one is missing hallway conversations. People are judged by their work, not by vanity metrics. The danger is in the partial return to the office; a move toward hybrid-remote requires far more intentionality in all facets of the business to ensure that everyone is included in the various communication silos.”


“Running a fully remote company is not a piece of cake, far from it.” Unsurprisingly, people in this era of selffulfillment and realization are seeking their wellbeing, and moreover appreciate combining it with the concept of remote work. However, it begs the question: is this model really sustainable in the long-term? Is it possible to manage your workforce this way? “Do not get me wrong, running a fully remote company is not a piece of cake, far from it,” Darcy cools the enthusiasm down and recognizes the long road ahead. “At the same time, the output of work is better than I have ever seen in any co-located office; in addition, the happiness of the employees is far above what I have experienced in an office space. The difficulties certainly lie in ensuring alignment and expectations – different challenges emerge, like time zones and (for the time being) kids at home for many working parents, etc. We try to mitigate these challenges by offering a multitude of resources to our team members so that they can design their lives around work and not the other way around. We provide a blend of asynchronous and synchronous communication styles, as well as a home base of sorts (actually called Basecamp) to house meeting recordings, tasks, message posts, etc. in order to ensure that everyone stays in the loop on big ideas and projects.” Once again Darren looks at it from the macro perspective, “Being able to recruit and hire from most countries in the world is a distinct competitive advantage for GitLab. We will judge our impact and legacy on the world by how we influence the proliferation of all-remote companies. We are hopeful that our hiring advantage will diminish over time. Not only will the

all-remote model prove a hiring advantage for the companies, but it will also open up doors for millions of job-seekers. The shift toward standard normalcy of the all-remote model will provide a broader selection of companies who offer such a structure. We believe that a world with more all-remote companies will be a more prosperous one, with opportunity more equally distributed. Despite all of its advantages, all-remote work is not for everyone. It can have disadvantages for the organization and for potential employees, depending on their lifestyle and work preferences. GitLab overcomes common issues such as isolation and communication voids by hiring managers of one (team members who exhibit a high degree of self-motivation and thrives in a highly autonomous environment). And, by working handbook-first we ensure that all employees have a single, cohesive source of guidance to consult their work.”

“What matters is connection, and that can be created through so many different virtual avenues. What it comes down to is the alignment to the company's shared values, as well as encouraging overpermission, over-communication, and vulnerability within your organization.” One noteworthy question is about culture. Most companies work hard to build one, as this is ultimately a tool to unite the workforce. To us it actually seems like


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an impossible task to accomplish with so many people working from home with little personal connection to their colleagues. Is this possible? “On the contrary, my answer is simple: 100% - Yes,” Darcy explains enthusiastically as always. “Remote companies are value-driven cultures. You do not have the shared experience of a city or certain geographical subculture that holds people together, there is no ping-pong table or free beer after work. But we learn that none of that really matters. What matters is connection, and that can be created through so many different virtual avenues. Sure, it requires some innovative thinking. For instance, we even have a baking competition every year remotely. What it comes down to is alignment to the company's shared values, as well as encouraging over-permission as an act of generosity and good-will, open communication, and shared vulnerability within your organization.” Darren shares the same feeling: “Indeed, there is no office vibe, hip coffee, or Spotify playlists that decide the culture, which is a gift. Instead, culture is written down. Culture is equal to the values you write down, and what you do as a leadership team to reinforce those values. And so virtual culture comes down to brass text. It’s simple and value based. And, in this case, the technological innovations drove this cultural shift. Video conferencing, project management SaaS tools, direct messaging applications, etc. are just a handful of examples. “Companies that rely on in-office meetings will likely need to embrace a new paradigm,” warns Darren. “It is in their best interest to leverage Zoom and Google Calendar. Also, they should resist the urge to default to meetings, relying instead on asynchronous communication wherever possible. And, it is important for leaders to put themselves in the shoes of a prospective job seeker who will ask very specific questions to

determine how prepared a company is to thrive in a fully remote setting.” Darcy agrees and shares her own feelings about the issue: “It is essential that remote teams are willing to be creative and try new things, to think outside of the box. Improving the model starts with improving ourselves. To do this we must challenge ourselves and one another to think big, dream big, and shake up the status quo.”

“All companies will be forced to embrace flexibility in a new way. Millions will embrace a hybrid-remote structure, and a new crop of startups will never know what it is like to rely on an office to build a business.” Darcy and Darren’s projections provide a sense of progression and even elation at the concept of going fully remote. However, all trends pose problems. Just like torn jeans and chunky sneakers, they fall out of style and may disappear to clear the way for other trends. Eventually, the reality of COVID-19 quarantine will be no more, and most companies will ask their employees to return to the office. “Many companies will return to the office due to existing leases or a penchant for tradition,” Darren concurs. “But all companies will be forced to embrace flexibility in a new way. Millions will embrace a hybrid-remote structure, and a new crop of startups will never know what it is like to rely on an office to build a business.” But what about fully remote companies? Will that trend continue and how? Once again, Darren adheres to his ardent conviction: “Many companies will have a


bias towards remote. It is built to weather future crises, it enables greater financial flexibility, it is a more inclusive way of hiring and working, and it will be demanded by top talent. COVID-19 has shown that for many companies, the remote model works — even in a pandemic. It will only get better as travel resumes and companies invest more in their remote workflows.” Darcy shares the same feeling and sends out a warning: “I think businesses that are not focusing on culture as their top priority will turn right back around and walk into the office, because simply put, that is just the easy thing to do.”

“I expect a revival of communities as people direct reclaimed commute time to make an impact locally.” So, what is next for remote work as a whole and fully remote companies in particular? “I think we will see a lot of teams opt for a hybrid model at first and then learn that they love being remote,” Darcy presumes optimistically. “I am witnessing a lot of incredibly important trends in the space of diversity and inclusion, specifically as remote companies and organizations realize that there is such a wonderful opportunity to invest in underrepresented minorities.” Darren likewise perceives a

lot of innovative new schemes, “I expect collocated companies with unused real estate to repurpose it for social good. For example, an unused office could be repurposed to educate underserved interns, effectively creating new opportunities for those in need. I expect more people to leave cities, returning to homes and communities that matter to them. I expect a revival of communities as people direct reclaimed commute time to make an impact locally. I expect a slow but steady reverse of rural depopulation as opportunity spreads out globally, welcoming those previously ostracized from the workplace (such as working parents, people of color, military spouses, the mobility-challenged, etc.). I expect broadband infrastructure to rapidly spread, and I believe education will become far less tied to geography as parents seek to become more mobile themselves. This sudden separation from the office creates a pivotal moment of pause as it reverberates through many facets of life.” In conclusion, for sure this trend from the previously explained reasons will continue to rise even in post-COVID-19 times. But is it going to stick and thrive? Only time will tell. One thing is certain, millennials and generation Z youngsters will look for working models that share their way of life, and this is one, which quite honestly sure resembles it a lot, is a good direction.


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Navigating COVID-19’s New Normal

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Prof. Dafna Kariv, Contributor

Professor of Entrepreneurship, Adelson School of Entrepreneurship, IDC, Herzliya


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ometime before researchers and practitioners could even conceive of the onset of COVID-19, they had already anticipated that remote work would be thoroughly embedded in entrepreneurial businesses worldwide over the coming years. Yet, in the pre-COVID-19 era, remote work had still been considered a bonus, allowing flexibility in hours spent at the office and providing more time for family and leisure. The emergence of COVID-19 has accelerated the rate of transition toward working in our own homes; in fact, statistics show that around 50% of entrepreneurial businesses in the US transformed into home-based enterprises. Now, as social distancing continues, the number is expected to jump. Not every entrepreneurial business could simply convert into a remote business. But the need to adapt to remote work has pushed many businesses to pivot their strategy and manage their stakeholders differently in order to make remote work more viable and sustainable. In the following interviews with entrepreneurs around the world I endeavor to “check the pulse” of their business strategies with respect to remote work in times of COVID-19. All the founders I have interviewed reported that remote work has created a second layer of distancing among the workers. The founder of a startup for educational games, consisting of 55 workers, in Bangalore, India, Ms. Bimala Agarwal reports that “while they were all pleading for remote work prior to the pandemic, many of my workers complain now of missing the random meetings and the office’s atmosphere.” Ms. Paloma Medina from Guadalajara, Mexico, is the founder of a business in the field of FoodTech which employs more than 100 employees, adds: “They are not only missing the team spirit, but also the trust. My workers became suspicious, less friendly to each other, and they seem to latently fight for their jobs in my business, although we have never shared any concern related to layoffs.” Mr. Claude Filion, founder of a customized-based video business from Canada, addressed remote work by stressing that “my team is engaged, everybody works even harder from home; but the clients keep nagging that they want to actually meet our workers.” While the “New Normal” forces entrepreneurial businesses to adopt the remote work strategy, I believe that it is the ecosystem’s role and responsibility to facilitate these changes and help businesses navigate them properly. Mr. Mitch Brown is running a co-working space in California which has been isolated in the last months, though it is safe COVID-19-wise. Brown maintains his responsibility to prepare startups to create a hybrid remote work strategy – to consent both the benefits of the comfort of remote work, along with the necessary face-to-face encountering with their colleagues and their stakeholders. He has learned the ways Google, Cisco, Deloitte, and other companies manage remote work, and has developed a model to ensure productivity, motivation, and safety. Another senior consultant from Deloitte, California has also addressed her company’s responsibility to encourage remote work, by directing and mentoring the entrepreneurial business founders on how to manage it accurately. At IDC, a leading academic institution in Herzliya, Israel, scholars in various disciplines seek responses to the challenges of remote work sets. Hence, across the board we see the responsibility the various stakeholders take. Recent research shows that remote work is related to higher productivity and a more stable worklife balance (Choudhury, Koo, & Li, 2020). Accordingly, CEO of Wikimedia Ms. Katherine Maher declared that workers could work twenty hours per week and still get paid for forty hours during the crisis. The astronaut Scott Kelly, who spent a year in space in 2015-6, knows a great deal about working from the space in which you live. He recommends following a strict daily schedule at home, establishing routines, and developing structures that encourage the work-life balance. At the same time, the ecosystem of the company should provide ongoing education and training for employees on how to deal with the challenges of remote work, while still keeping an entrepreneurial and proactive atmosphere, even remotely.


Assisting the Model of

Remote Work

INNOVATION SAGE

to Succeed

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Author: Tal Berman

Contributor: Justin Mitchell, Founder and CEO at Yac

Contributor: Idan Shem Tov,

Co-Founder and CEOat Eloops


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he trend of remote work has become the norm in COVID-19 times, especially now as more and more countries return to quarantine to control the second wave of virus infections. When we take a closer look, it is important to understand that none of this new innovative working system would have been possible without the existence of assisting supporting technologies. Perhaps the most important switch that was made (and we discussed it in our June issue) is the acceptance of virtual meetings and conferences. Tools like Cisco’s WEBEX, which have been available for many years, have allowed company managers to create online workshops and educational institutions to provide e-learning opportunities. Tools such as YouTube Live, Facebook Live, Twitch, and others assisted mainly in broadcasting events, which helped those who for geographical or any other reasons could not attend events to feel as if they are sitting in the stands as spectators.

“We are finally able to narrow in on the “why” for the product itself and not just the larger picture of “why” going remote. We have witnessed five years of industry growth in just a few months.” But COVID-19 provided a different challenge. As some people decided to work from home on all sorts of different platforms – be it as a freelance designer on Fiverr, a remote salesperson representing an American startup from somewhere across the world, or a remote developer on platforms such as GitLab or GitHub – the choices seemed somewhat limited. They had to move their entire base of operations from the office in which they were working to their homes. And companies specializing in remote work services have been some of the quickest on the uptake. “We spent the majority of our marketing and communication around education on remote work,” explains Justin Mitchell, Founder and CEO at Yac, an audio messaging provider for remote companies. Interesting to note, he has recently received funding from Slack, who saw their solution as complementary. “In a post-COVID-19 climate, this will no longer be a need at all. We are finally able to narrow in on the “why” for the product itself and not just the larger picture of “why” going remote. We have witnessed five years of industry growth in just a few months.” Idan Shem Tov, CEO and Co-Founder at Eloops, a startup which created a SaaS platform that helps managers engage and align employees with core values, culture, and goals at scale, shares the same view: “COVID-19 has obviously put many companies into a shock, asking themselves what they need to do to survive and adapt. With that said, it has also definitely helped us mainly with "educating" the market about the importance of engaging employees remotely wherever they are. If back in 2017 we found it sometimes hard to convince managers of the need for virtual experiences versus offline experiences, I think that no one will argue that it is a necessity today.”

“Companies find it even more difficult to engage and align their employees with core values, goals, and culture and this is where we help them.” This complicated situation has created new set of rules. The kids opening the door and disturbing in the middle of an important sales meeting is just an example. But that is just a light offense; the complications can get much more, well, complicated. Now it seems that working time is all the time, as obviously we are available online always, even during the nighttime. Justin from Yac explains, “It is very difficult for a fully remote team to get a distributed workforce all on a Zoom call together. It is always midnight for someone. We started out as voice chat for teams,


but quickly pivoted into async voice messaging. Voice messages have all the benefits of a call or meeting, without interrupting and monopolizing people’s time, it is a higher bandwidth than text and you can detect tone and emotion. We thought there had to be a way to maintain high communication standards while still actually having time to get work done throughout the day.” But if you zoom in on the problem of the individual, it becomes much more challenging for a company to maintain its order and productivity when so many people are isolated. For instance, how do you create and maintain a company’s culture when you operate in a fully remote system, especially when all your employees are under quarantine during COVID-19? “Companies find it even more difficult to engage and align their employees with core values, goals, and culture and this is where we help them,” Idan of Eloops explains. “We do that by combining our gamification tools together with a rich marketplace of virtual experiences, activities, and pre-made content templates that managers can pick from and customize to their needs. We have been strong believers in remote work since 2017 and have built Eloops from the ground up to support employee engagement and experience at scale no matter where they are located.”

“Hearing someone’s voice is a massive part of building a relationship with them. Voice also adds in tone and emotion which are so important to interpreting feedback, understanding how your teammates are feeling, and conveying richer communication.”

INNOVATION SAGE

One of the biggest issues in terms of acceptance of the new situation is how to mentally cope. Some people are just greatly missing the interactions with their coworkers. However, for fully remote companies, employees have chosen to live without that interaction, regardless of and prior to COVID-19. “In remote work, you get very accustomed to seeing your teammates as just their avatar on Slack,” Justin agrees. “Hearing someone’s voice is a massive part of building a relationship with them. Voice also adds in tone and emotion which are so important to interpreting feedback, understanding how your teammates are feeling, and conveying richer communication.” While you need to make sure managers can still lead their teams, there are some things to be maintained at the human resources level, such as the company’s culture and the feeling of togetherness. “Our main value proposition is how we engage and align employees with culture, values, and goals at scale,” Idan sheds a light on this issue. “The way for us to do that is not only by offering the technology and tools or implementing training to make the most of the product, but we also offer access to a rich marketplace of virtual experiences, teambuilding activities, challenges, and games that contribute and gamify the everyday experience for employees while maximizing the effectiveness of their training programs and content. Our secret sauce is in the fact that we provide managers with more than bare metals product and also couple our tools with unique and engaging content, virtual activities, and experiences that help align and connect employees to the genuine culture and values at scale and wherever they are.”

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“Remote work is here to stay, and it was here to stay long before the pandemic. It has only become more "apparent" now that people see the actual numbers – both in savings and also in increase (or at least steadiness) of productivity.”


However, eventually the COVID-19 crisis will come to an end, hopefully rather sooner than later. “Once you stop limiting your talent pool to a thirty mile radius, there is no going back. It is a light bulb moment for companies, not to mention the massive savings in rent by ditching massive campuses and offices,” Justin claims as he remains quite confident that the remote work trend will continue and thrive. Idan feels the same way: “Remote work is here to stay, and it was here to stay long before the pandemic. It has only become more "apparent" now that people see the actual numbers – both in savings and also in increase (or at least steadiness) of productivity. Leaders are always afraid of losing control, and when we lose sight of people, it may feel as if we lose control. But the impetus to change by necessity made us overcome this fear.” As we continue to experience a huge shift from physical centralized working locations to a dispersed workforce, there is a critical need for other, more advanced tools to empower such a shift. “We were always trying to create ‘consumer-grade’ experiences and bring them into the enterprises,” Idan says. “By working remotely and from home we do not even need to bring them into the enterprises, but we definitely still need them. We believe that enterprise technologies and solutions should feel like the solutions we use as consumers. While there is a long way to go for most enterprise technologies to develop, we are certainly seeing the trend of ‘employee-centric’ and consumer-grade solutions being built.” However, Justin looks at it from a different angle. “It is not about technology as much as it is about management. Once a company starts to move away from an ‘always-on,’ immediate gratification model, then the technologies that are already out there can be easily adapted or adopted to support a remote culture.”

“Don’t have a car because you cannot afford one? It does not matter; you can still get the same job as everyone else. Don’t live in an area bustling with new startups and job opportunities? Again, it does not matter, you can still get your dream job.” So where are we actually heading to in the next decade? “Since companies have understood the benefits (as well as the downsides) of working remotely, we will probably see new companies being built from scratch as remote-only while most existing companies will shift towards a more flexible and hybrid working model,” explains Idan. “From the employees’ perspective, I think that we will be working more hours once we shift to WFH (Working from Home) models. We should not be surprised in two-three years from now if any of our friends say they have two "full-time" jobs. I personally always played with the idea of going remote-only. Though after only two months of fully remote, I also understood the benefits that a startup like ours at our stage receives when we also meet at the office. We are currently experimenting with different models and will probably stick with a hybrid solution for the long-term.” Once again Justin brings another perspective into the mix: “Remote is all about inclusivity. Regardless of your race, location, gender, disability, language, economic situation, you can still work. Don’t have a car because you cannot afford one? It does not matter; you can still get the same job as everyone else. Don’t live in an area bustling with new startups and job opportunities? Again, it does not matter, you can still get your dream job. At the end of the day, remote work is an enabler.” Summing up, the growth of the remote work trend goes hand-in-hand with the emergence of new, sustainable technological tools which enable this concept. In recent years we are truly seeing many entrepreneurs who have wisely recognized the gap and worked hard to fill it quickly. As long as more workers opt to work in their own environment and in their own time, these tools will continue to develop and ease the lives of employees globally.


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DIGITAL BANKIN


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Digital Banking, PayTech and the Cashless Economy

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A Passing Trend or a New Standard?

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Nir Netzer CPA (LL.B, MBA), Contributor

Founding Partner at Equitech Group and Chairman of the Israeli FinTech Association, FinTech-Aviv


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ave you ever thought about the way we adopt new payment methods? Thousands of startups and several traditional players are helping us to transact smoothly every day. They collect a lot of data and process our purchases within milliseconds all over the world. Visa, one of the largest global payment companies, claims to have the capacity to handle over 65,000 transactions per second – quite an overwhelming figure. The massive number of new players in Payments Technologies has caught the attention of many major banking institutions as we base our entire civilization on the exchange of goods and services for consideration, usually in the form of government backed fiat currencies. Without a proper and established payment ecosystem, this would all crumble before us rather quickly, which is probably the reason for the unprecedent growth of this segment since 2017. In 2019 alone, KPMG reported 1,160 investments and M&A deals in payment companies, totaling USD $144.4 billion. Let us bring this into the context of the modern era in which we live. There is no doubt that technology has changed the payment ecosystem drastically over the last 20 years, and globalized trade has only accelerated it. If in the past, cash and handwritten checks were the only widely accepted medium of exchange, nowadays the majority of us struggle to remember the last time we used cash to buy something, especially the millennials and the generation Z populous. Debit cards, credit cards, wire transfers, and digital wallets, accessible through smartphone apps and digital banking platforms, have made transacting convenient and secure, while also increasing the potential for a higher volume of transactions as well. There are still many issues to iron out with the shift toward a largely cashless economy. These include, but are not limited to, technical difficulties surrounding digital infrastructure, cyber security, data collection/privacy regulation, and marginalization of cash users. Most of these problems will consistently be dealt with and resolved by all sorts of new innovations. However, during this process, there is something to be said about how this method of trial and error will affect the economic participant’s level of commitment. The foundation of any strong economy consists of a high level of trust and confidence from all economic participants in the facilitated system set up for them to trade and transact. Older generations that are more comfortable with cash may be skeptical of a largely cashless economy with digital financial solutions. On the other hand, millennials and those in Generation Z are known to easily adapt to newer technologies while they accept if and when these sometimes do not pin out. Now their voices are being heard in this space, and they are beginning to make up the majority of the workforce and consumer base all over the world. EY for example, rated global consumer adoption of FinTech services at 64% in 2019 (which represents a significant amount of growth from their previous ratings in 2015 and 2017 which was at 16% & 33% respectively). This is increasingly evident with the growth of cryptocurrencies – one of the most controversial points about these is that they are largely decentralized. This may seem like a deterrent to older generations, who are comfortable with the idea that governments and central banks have some level of control. However, younger generations see this as a major advantage. Anywhere you look, from a B2B, B2C, or C2C standpoint, there is no doubting that these shakeups are revolutionizing the world of finance. Though this will not replace traditional retail and commercial banking, in the long term there is plenty of room for new players. This can be achieved independently or through collaboration between startups and major institutions. While this will not happen overnight, as there are still many hurdles to overcome, we should fully expect these ripples in the way we transact to improve in convenience, efficiency, and safety to move us forward. Thus we can comfortably say that the cashless economy concept is here to stay and not just a passing trend.


Innovating Payments

A Story of an Israeli Startup Winning

INNOVATION SAGE

the Financial Domain

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An Interview with

Jonny Steel,

CMO at Payoneer


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inancially underserved markets have been a substantial gap that FinTech companies have been trying to cover. Not many of them have been as successful as the startup Payoneer, an Israeli unicorn. For years Payoneer managed to assist smallmedium sized businesses, especially those from emerging markets, with receiving payments globally. We had the opportunity to discuss the emergence of Payoneer as one of the leading FinTechs in the world with its CMO, Jonny Steel.

Hey Jonny, a pleasure hosting you in this issue of Innovation Sage. Tell us a little bit about your background. I am 40 years old and a proud dad of two boys, age 12 and 9. We love watching football together – Arsenal is our team. I studied in London - my first degree was in law and I then went on to get a Masters in War Studies at Kings College. Quite an unusual degree. It was a combination between international relations and history, which was truly fascinating. I have run three marathons and throughout the year, I try to run around 40km each week. Running gives me a chance to catch up on my favorite podcasts as well as take a break and clear my thoughts. It is far more than a way to stay fit for me.

“We democratize access to financial services for businesses of all sizes from SMBs and entrepreneurs in emerging markets to the biggest digital brands in developed markets, providing a range of financial services that help them to grow and succeed in our digital world.� What is Payoneer and what is your role in the company? Payoneer is a global payment company that connects the world together on a single platform, making it as easy to do business globally as it is locally. We democratize access to financial services for businesses of all sizes from SMBs and entrepreneurs in emerging markets through to the biggest digital brands in developed markets, providing a range of financial services that help them to grow and succeed in our digital world. I have been the Vice President of Marketing since 2014 and during this time had the pleasure of taking our message to the global level.


A central part of our marketing strategy is building trust by building communities and creating connections between local and international entrepreneurs and business owners. We do this through events – now largely virtual but previously in-person meetups – as well as creating valuable content that analyzes industry trends and shares valuable insights that help our customers to grow.

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“The last decade has seen a rapid acceleration in the digitalization of the global economy. Businesses today have a greater opportunity than ever before to benefit from participating in this borderless world.”

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What has changed in the world this past decade that created such a big demand for services such as yours? The last decade has seen a rapid acceleration in the digitalization of the global economy. Businesses today have a greater opportunity than ever before

to benefit from participating in this borderless world. We have witnessed the rise of the marketplace economy, where buyers and sellers anywhere in the world easily connect online. The likes of Amazon, Airbnb and Fiverr make it so easy to find each other and do business of one kind or another. But in order to be able to send and receive payments globally as easily as it can be done locally, businesses need a natively digital platform that bridges between countries and currencies. Payoneer supports the needs of millions of enterprises and SMBs in over 200 countries and territories. Moreover, we bring value to our customers beyond payment processing as well. For example, one of the greatest challenges faced by SMBs today is managing cash flow; so, we launched Capital Advance, a digital platform for providing working capital in a faster and simpler way than ever before.

What has made Payoneer so successful? In my view, our success comes from our ability to create a network effect through opening our platform to customers and partners from all sides. We were fortunate to be in the right place at the right time. By building the infrastructure in a way that could support any business of any size anywhere in the world, we were able


to drive rapid growth before we even had boots on the ground in all those locations. We have since fully localized and with teams supporting our customers in 23 locations worldwide, we have the brand, the platform, and the team to keep Payoneer super relevant as the world continues to change.

“When you take a step back, you realize that one of the most meaningful changes in the way we do business today is the fact that it is now so common for two parties to transact when they have never met or spoken before.� What is digital payment and banking in your opinion? Digital payments and banking is are not about merely adjusting the old methods and finding a way to bring them online. Success is all about reimagining how payments need to perform look in 2020

and beyond, and building a platform in a manner that is relevant for today and ready for tomorrow. When you take a step back, you realize that one of the most meaningful changes in the way we do business today is the fact that it is now so common for two parties to transact when they have never met or spoken before. This creates a trust gap that needs to be filled by players including marketplaces and payment platforms that give them both peace of mind. This is where Payoneer enters the picture.

What innovation and technologies do you expect to become the norm, particularly those that assisted the FinTech industry and digital payment processors? Artificial Intelligence is definitely a key driver of innovation in digital payments and a central part of our technology. It directly impacts on how we do risk management, personalization, and predictive data modeling. These technologies allow FinTechs to view the world differently than traditional players and to provide a better experience for more customers, especially those that were underserved until now.


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“The customer is king today more than ever before. And as technology continues to develop, the partnerships between banks and FinTechs will be crucial in maximizing the quality of customer experience.”


Is this trend going to continue or will we see it drifting back? Why? I believe that this trend will only continue. Open banking is another positive change that creates more opportunity for businesses and consumers to connect the dots and get the most from all of their financial service providers. The customer is king today more than ever before. And as technology continues to develop, the partnerships between banks and FinTechs will be crucial in maximizing the quality of customer experience.

increasingly complex, we only see more opportunity for partnership and greater cooperation.

“Payments are becoming faster, global is becoming as easy as local, and the cost of payments is expected to continue to go down.�

What is next for Payoneer?

What do you foresee for the future of digital payments and banking?

So much! We continue to build out the payment platform for both enterprises and SMBs. We are continuing to go beyond payments; services like our working capital offering and our green channel program that connects marketplaces and merchants worldwide are showing that we can be more than just their payment platform, we can be their growth platform. We also entered the merchant services space through our acquisition of Optile, a payment orchestration platform that helps global enterprises to scale faster to new markets, unify payment processes, and optimize payment experience. Looking at the competitive landscape, for many years we have been hearing about the likes of Google and Amazon stepping up to the plate. Is it just a rumor or are they seriously going forward and becoming financial players? How will it affect Payoneer? Payoneer already works very closely with Google and Amazon, as well as with most of the other global digital brands. As the world becomes increasingly digitalized and

The payments landscape has gone through significant transformation during the past two decades, and I believe we will see this pace of change continuing. Payments are becoming faster, global is becoming as easy as local, and the cost of payments is expected to continue to go down. There is a big gap opening between countries where mobile payments are commonplace and others where cash and credit cards still dominate. During the pandemic we saw an acceleration in ecommerce at a rate equivalent to what we would have expected to see ten years into the future. In this age of social distancing we have been forced to rethink the way we act and the way we do business. While some behaviors will eventually revert, many of these changes will stick and fast, seamless digital payments will become the expected norm in all cases. It is a very interesting time to be in the world of payments and at Payoneer, we are super determined to listen closely to our customers and continue to drive innovation in the sector.


When Innovation Becomes a Tradition in the Financial Market:

Digitalization, Cryptocurrency, and Security

INNOVATION SAGE

in the Fourth Technological Revolution

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Hadar Shemer, Contributor

Strategy and business development consultant


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lockchain as a financial alternative might seem like a recent buzzword in business and technology, but it emerged as early as 1982. It remained dormant without a real use-case for decades until 2009 when Satoshi Nakamoto released the first version of Bitcoin, the first real decentralized digital currency. Today, we have more than 3,000 different types of digital currency (cryptocurrency). WEF (World Economic Forum) statement named the current digital era as the fourth industrial revolution in the course of human history. As borders dissolve as far as economic practice is concerned, the revolution is global as much as it is digital. This requires that digitalization become more decentralized. And this is exactly where Blockchain – a decentralized ledger technology that records crypto-transactions between two parties – joins the narrative. Fast forward to today, Blockchain finds its use across many industries and services: finance (cryptocurrency and contracts), real estate (multi-party contracts), healthcare (personal medical records) and even trading of precious metals. The common thread in all of these cases is the ability to use Blockchain infrastructure to deliver value that could not be achieved by traditional technologies. It provides the infrastructure of transparency through immediate online access based on non-repudiation and secured governance across non-physical, state, or country boundaries. So, if Blockchain is such a spectacular system why don’t we all start off our day picking up our favorite Frappuccino at Starbucks and paying with Bitcoin? Why is Blockchain still perceived by the mass public as a niche topic? I believe that the answer to this lies mainly in institutional adoption. The moment that BigTechs and tier-one banks adopt Blockchain as an essential part of their business, they give Blockchain the legitimate “seal of approval” that it is currently lacking. From that point on, Blockchain becomes a commodity, used simply in a matter-of-fact fashion, as part of normal business routine (anyone remember the internet in the early 90s?) If we dive deeper and ask what prevents a mass adoption of Blockchain technology by Apple, Google, Amazon and JP Morgan – the root cause here appears to be security. Or the lack of it, to be precise. In 2019 alone, as much as $4.5 billion USD in crypto currency were stolen, despite the use of Blockchain technology. So, it only makes sense that corporates are hesitant to jump on the Blockchain bandwagon. As such, Blockchain security technology is the key to this challenge. In order to turn the key and unlock the Blockchain block, cyber-security companies (such as GK8) that enable the execution of Blockchain transactions while being completely offline, have the potential of becoming “Blockchain enablers” for traditional businesses. And the growth and success of these companies will enable mass adoption of Blockchain technology, which will ultimately change the way business will be conducted in the decade to come. The transition between innovative to traditional in financial markets denotes the phase where the innovative becomes as common and accepted as traditional practice. Cryptocurrency has a wide range of economic possibilities, and Blockchain in particular has a strong reliable technological infrastructure to enable that. It is a much more secure platform than the one we use today. In addition to security, Blockchain provides high serviceability, immediate settlement, full transparency, and stability. So, as the fourth industrial revolution becomes tradition, we can only expect to see the traditional financial system taking the step forward and embracing innovation to their traditional usage.


A Bank? What Is a Bank?

Did the

FinTech Revolution

INNOVATION SAGE

Make Banks Obsolete?

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Author: Tal Berman

Contributor: Prof. Heather Knewtson,

Assistant Professor of Finance, College of Business, Michigan Technological University

Contributor: Jeroen de Bel,

Founder of Fincog


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obody could have foreseen it, but the amazing has actually happened. Banks, an institution that dates back to biblical times, are on the verge of becoming a cousin of the post office: nobody needs them anymore. The FinTech revolution has taken no prisoners. And bankers, still stunned from the consequences of their fiasco in 2008, are facing a fierce enemy: digitalization.

“Digital banking is based on technology, as opposed to traditional banking that is based on physical processes. However, it is still an unclear phrase.” Here at Innovation Sage magazine, we have long been interested in the digitalization of various industries. Across the board, no industry compares to the transformation of the financial industry when it comes to digitalization. “Digital payments and digital banking refer to two types of FinTech firms, which principally use FinTech technology in their business models,” explains Prof. Heather Knewtson, an assistant professor of finance in the College of Business at Michigan Technological University. “Digital payments offer monetary alternatives that circumvent the traditional money channels and include the cryptocurrency and exbank payment systems, such as P2P and B2B payments systems.” But that is just a part of the bigger picture according to Jeroen de Bel, founder of Fincog, a consulting firm which helps financial firms of all sorts build digital banks. He elaborates, “Digital banking has a broad scope. It is basically about digitalizing banking services. Nowadays even the most outdated banks have a degree of digital processes. Therefore one can only

assume that digital banking is based on technology, as opposed to traditional banking that is based on physical processes. Digital banking is often referred to those players who are almost fully digital as opposed to the incumbents. Personally, I still find it to be an unclear phrase.”

“The technological environment and increased connectivity of the economy have demanded and facilitated greater efficiency in financial services.” But what has actually promoted the FinTech revolution we experience so strongly? “The technological environment and increased connectivity of the economy have demanded and facilitated greater efficiency in financial services.” Prof. Knewtson clarifies. “The pithy quote from The Economist in 2015 sums it up best: ‘The magical combination of geeks in T-shirts and venture capital that has disrupted other industries has put financial services in its sights.’ Providers at the cusp of bleeding-edge technologies saw opportunities for growth with increasingly consolidated financial systems, and they sought to compete in narrow channels for parts of the finance ecosystem. Consumers responded as FinTech firms were more agile and entered in competition on both speed of transaction and price.” And that just scratches the surface. “There are various trends shaping the financial industry,” Jeroen elaborates. “Firstly, we need to take into consideration customer behavior. Nowadays, customers are used to a much better service than in the past, which is also based on the digitalization experiences they encounter in different industries. Pioneers such as Netflix, Google, Uber, and such, have created a high level of customer experience, and


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so customers expect the same level in any industry. Moreover, the ability to share their experiences on social media makes consumers more sensitive to positive or negative experiences. Secondly, competition within the financial industry these days is fierce, but the competition has carried over into other sectors as well. Challenger banks are raising the bar for the incumbents. Thirdly, regulation, especially in compliance, has increased the costs of banks dramatically. Therefore, they must work more efficiently and intelligently than before. Lastly, acceleration of the FinTech revolution is promoted by the use of technological innovations and buzzwords, such as AI, machine learning, etc. These new technologies allow for new possibilities and processing power. All these factors together drive the change in the industry.” That is truly remarkable as no other industry has gone through such a radical change in decades. So, when will the process complete? “There are some case studies of banks who managed to complete a successful change. There is Digibank from DBS, there is also a case study from Lloyds Bank in the UK. Nevertheless, it is very difficult to pinpoint real results,” claims Jeroen. “You are moving an old bank to a new environment. So, looking at the backhand, you start in a fresh field and use the help of innovative

partners to support you instead of using your old IT system. If you look at the frontend, you may argue that a lot has happened, such as the numerous bank apps in use today, which do all the banking services easily and quickly. Bottom line, there are no evident results as of yet.”

“We found that FinTechs have varying relationships to financial services, including complementing or displacing them, as well as providing new markets. Therefore, while traditional financial institutions should respond to competitive threats posed by FinTechs, it is unlikely those with broad services are in danger of extinction in the near term.” So, are we looking at the death of traditional banking? The answer is most definitely: not yet. CNN Business reported last year based on Adobe Analytics report, that over 70% of the Generation Z


population and 60% of millennials still go at least monthly to visit a physical bank branch. In 2019, the Jefferies Financial Group reported that people in the 18-34 age group select their bank by their ATM/ Branch proximity (“close to my home”) first, while digital presence and mobile capabilities are secondary. “We found that FinTechs have varying relationships to financial services, including complementing or displacing them, as well as providing new markets. Therefore, while traditional financial institutions should respond to competitive threats posed by FinTechs, it is unlikely those traditional financial institutions with broad services are in danger of extinction in the near term,” suggests Prof. Knewtson. Jeroen is less definitive: “It is tough. The answer is actually yes and no. We must consider first and foremost that the banking business is different between countries. And, if we compare it to other digital enterprises, such as Netflix and the impact they had on the movie rental industry, it is a lot more complex. Therefore, the ability to scale globally is a lot harder, and so I do not see one player wiping out the entire industry, but rather only in specific segments. In recent years we have seen the rise of neobanks, who make up a tiny bit of the banking model. Also, there are all these FinTech companies who are intermediating and competing with the banks in some

elements. Collectively all these are taking market share from banks by raising the level of competition and the bar. It puts tremendous pressure on the profitability of banks since they need to reduce prices and at the same time increase the service level. And so you see a steady decline. For example, when measuring the ROI (Return on Equity), we observe that Germany and other international markets suffer from sleeping and unsustainable banking industries. Deutsche Bank and others have been struggling ever since the big economic crisis of 2008 and are unable to get a sustainable return. Their returns are at 2-3% and they have been losing money for many years. You can argue that this positive return is still good enough, but if you measure that against the cost of risk and the return on risk, the math proves that they have been unable to make up for these. Therefore, looking at it from an economic point of view, one would be inclined to allocate the capital somewhere else.”

“I do not believe that there will be only digital banks in any shape or form.” All of the sudden, the banking industry, which was always limited in competition with only a handful of players in each


INNOVATION SAGE

country, has begun to see new players stepping up to the plate. Challenger banks and neobanks have been posing real threats and raising over $3 billion USD in 2019. However, these opponents are still underdogs at this moment in time. “I do believe in the model of neobanks and in innovating the financial services,” admits Jeroen. “The way I see it is that you need to recognize an opportunity and offer something better: better customer experience in terms of look and feel, quicker processes, more efficient and more inclusive operations, and infiltrating and improving service to underserved markets. Neobanks in Western Europe today are seen as equal to others. However, where neobanks have it wrong is in this SaaS model of acquiring customers for free since they do not operate in profitable enough markets. I do not trust the concept of growing fast with investment money and finding a sustainable business model at a later stage. I am more of a believer in the banking model, which, as previously mentioned, entails seeking gaps in the market and identifying the areas where you can do better. All in all, I do not believe that there will be only digital banks in any shape or form in the future. Neobanks’ market share too small, perhaps at 5%.”

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“GooglePay and ApplePay are taking away all the revenues that the incumbents were still making.” However, as the threats from FinTechs are still largely unrecognized, the entrance of

the BigTechs, like Amazon, Google, Apple, Samsung, etc., is a completely different story. Nowadays, in China Jack Ma’s Alibaba has become a mammoth player in payments. According to eMarketer, approximately 44% of China retail sales are conducted online, out of that number Alibaba’s AliPay holds a market share of roughly 55%, while WeChat’s TenPay comes in second at roughly 39%. These are mindboggling numbers. “The commonality of FinTech firms and Social Media firms is the international flavor of many of these entities,” says Prof. Knewtson. “This reflects competitive pressures in the business environment for firms offering cutting-edge technology solutions to an increasingly tech-savvy world population. So yes, the western world is adopting many of these international business models both in social media and in FinTech industries.” But this strong infiltration hides other secrets. “You may argue to some extent that there was not a real adequate financial solution in the Chinese market. That enabled online players like Alibaba to grow so large,” Jeroen sheds some light on this enigma. “Moreover, as opposed to Europe, even though China comprises a very large market, it is still only one market. On the other hand, the European market consists of so many countries and systems. So, if you return to the difference between the SaaS model and the banking model you can understand why it is extremely difficult for the BigTechs to acquire such a share of the European market. You also need to consider the fact that China is a much more controllable market than Europe’s, in terms of culture. Still if you look at the players about which you asked, like GooglePay


and ApplePay, they are taking away all the revenues that the incumbents were still making. They expended significantly to the financial service and are creating big impact. Since their expansion is so gradual you can expect them to take another bite at other areas soon enough. For these reasons, I expect to see at least a combination of bank models and internet models in Europe.”

“New ideas will continue to enrich the financial industry, which will see its continued adaptation to provide financial goods and services. I foresee a future, much as the past.” To sum up, what does the future holds for the banking services? With dwindling profits and questionable business models, the skies could not be any darker. “The

financial industry has been characterized by innovation from its inception,” Prof. Knewtson keeps her feet on planet Earth. “From the earliest issuance of money, the establishment of early banks, the rise of insurance markets, the jointstock company and the bond markets, innovation has a long history in the lifeblood provided by financial services to the macroeconomy. Even an innovation as revolutionary as ATMs, we now take for granted, yet this one was of yesterday’s greatest modern inventions. New ideas will continue to enrich the financial industry, which will see its continued adaptation to provide financial goods and services. I foresee a future, much as the past. Time and time again, the industry always responds to the needs of consumers and businesses, as well as answers the call to provide the life-blood capital demanded by the world economy.” With this much optimism it seems that we, the financial consumers, will dictate where this market is heading.


Finally!

INNOVATION SAGE

The Wakeup Call for Banks

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Gabi Broitman, Contributor

VP Business Development - bit Payment App


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anks are finally awake. In my opinion, there are four reasons for the awakening of the sleepy banking world (and oh my god, it has been sleeping for so many years now). First came the birth and later the explosion of the internet along with its technology more than twenty years ago. It was a wake-up call for banks to modernize, and they indeed woke up. Yet they were still dragging their feet out of bed. About a decade ago, the first startup companies focusing on FinTech were established to fill the massive gap between technology capabilities used by people, especially young generations, and what banks (and other traditional financial institutions) had to offer at that time. This shift caused banks to stretch in bed and open their eyes, but still it was not enough. Then came PSD2 Directive about 5 years ago and that was finally something worth getting out of bed for. Banks started focusing on technology and digital departments were built. However, the real change came when the tech giants discovered the power of banking, and more specifically of payments. Oh… this was already a good catalyst for banks to put on their running shoes and start their morning exercise, and to even start running. The PSD2 Directive together with a clear understanding by the central banks that strict financial regulations should be re-examined and perhaps alleviated in order to increase competition (hence provide better service and financial planning to individuals), forced banks to expose (thru API’s) their most valuable asset - their customer data. We see in recent years that many Fintech companies are taking advantage of this, but are also developing financial services that diminish banks as their behind the scenes infrastructure. As if that was not enough, a global pandemic suddenly hit the world and caused a tremendous habit shift in the way we manage our financial life. For us at Bank Hapoalim, the pandemic was the beginning of a new era where digital has become the focus. This time for real. By the end of this year, the PayTech landscape in Israel will completely change. ApplePay is planned to launch, followed by GooglePay and SamsungPay by mid-2021. In addition, EMV (Europay, Mastercard, and Visa) devices are becoming a must for large retail stores and SMEs and it is estimated to be fully implemented by late 2021. All this turbulence, the habit changes due to the pandemic, the big tech arrivals, and the penetration of EMV have been catalysts in the past year for the bank to learn to work together and team up with Fintech companies such as PSP’s, remittance, lending, financing, and many more. Apart from partnerships, the bank has developed new models backed by reinforced development teams to deal with rapid changes and implement new and innovative development models and team structure. The bank’s development team members have evolved beyond the boring clerk you have in your mind when you think of banks. The recruitment profile, their work environment, their spirit, their tools, and methodologies, and much more, are closer to what you see in big tech companies. In addition, regulation, legal, and security teams had to adjust to the rapid pace and constantly search for creative ways to work closely with the Biz Dev team and elevate restrictions when possible. It is a challenge to manage and maintain the most popular digital payment method in Israel (more than half the population has the app on their phones), it is even more challenging to do it when you are a part of a bank - a system that hasn’t changed for hundreds of years. But it is changing now, it is changing fast and it is fascinating to be a part of it. Rise and shine!


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INNOVATION SAGE

VIENN


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Vienna

INNOVATION SAGE

Once a Geographical Bridge Now a Bridge to Amazing Innovation

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Author: Tal Berman

Contributor: Markus Raunig

Managing Director at AustrianStartups


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bet most of you did not know that the concept of innovation was actually coined in Vienna. In 1934 Joseph Schumpeter argued that technological innovation advances the entire market rather than price competition, which was the given theory his Keynesian colleagues had been preaching. It was in Vienna where the concept of modern entrepreneurship was born by the likes of other legendary scholars like Carl Menger and Friedrich Hayek. All of the above were alma maters of the University of Vienna, one of the most famous and prestige academic institutions in the world. However, even though these concepts were conceived of in Vienna, other worldwide locations, such as Berlin, Amsterdam, and Paris, have historically taken precedence as technological innovation hubs. Vienna was left a little behind. Following the fall of the AustroHungarian Empire in World War I and taking a back seat to German innovation in the 20th Century, Austria as a whole and its capital specifically were hiding in the shadows for quite some time. In spite of that looming shadow in more recent history, Austrians have been quite innovative throughout the ages. The invention of the internal combustion engine in 1876 and the alkaline battery in 1906 are just a few examples of Austrian discoveries and inventions over the years. But truth be told, compared to Berlin, a genuine top-10 startup ecosystem performer, it is just not a fair game.

“Vienna has become more innovative over the last three years and we see a very positive direction.” Lately though things have begun changing in the city of Schnitzel and apple strudel. In the recent European Capital of Innovation

2020 contest, the EU listed Vienna as one of the dozen finalists, and rightfully so. A lot has changed this past decade in the Austrian capital. “Vienna has become more innovative over the last three years and we see a very positive direction,” Markus Raunig, managing director of AustrianStartups, tells us. “There is a critical mass of activities we have reached lately. Vienna has officially become a hub, meaning there is a vast amount of founders, investors, ecosystem supporters, corporates who act as potential clients, etc., all of which are available here.” Indeed, I was there to witness up-close the rise of startup culture from the bottom up about three years ago. I was amazed by so many young people forgoing the traditional attitudes with which they were raised and thinking outside the box of oldworld formalities. With the entrepreneurial breathing new life into this amazing city, ranking organizations are not shying away. According to Startup Blink’s ranking, Vienna enjoys the 27th most conducive startup ecosystem in the world, which makes it the 16th in the European continent. 2thinknow’s innovation index for 2019 puts the city at the 25th spot. And the best result comes from new research conducted by the UK’s leading freelance marketplace, PeoplePerHour, which claims Vienna to be the prime location for budding entrepreneurs starting a new business. We decided to study these latest results and discover the magic of Vienna as one of Europe’s top hubs for innovation.

Why Vienna? Why Not? Enjoying some of the best touristic landscapes in Europe, such as the architectural beauty of Vienna or the white snowy ski tracks in the Alps where the hills are alive with the Sound of Music, Austria as a country has always been an attraction.


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Lately it has been attracting tons of entrepreneurs, especially from Eastern Europe. But the understanding that creating an innovation hub comes from a necessity is the true story here. “To be a competitive economy in the 21st century it is very important to be innovative and on the cusp of technology because things progress very quickly, so you risk being left behind somehow,” claims Markus. “You risk losing ground to other hubs which can provide goods and services. Our aim is to improve our ability to compete with other hubs and all the bigtech companies, like Amazon, and that can only be done if we stay innovative.” Compared to other technological hubs, Vienna’s cost of living is fair and relatively less expensive. On top of that, employees enjoy social benefits which makes Vienna a paradise for tech savvy youngsters from Eastern Europe, who see more promising living potential than back home. But that is not all, as the cost of living checks out, the price for an office space proves affordable as well. Vienna enjoys a large number of new and equipped coworking spaces, which can be acquired on the cheap, and various accelerators, which provide an office space if you take part in their running cohort for free. The reasonable costs for both employers and employees creates an ever-increasing talent pool to employ at your company or startup at a relatively affordable salary, despite the generous social benefits.

“In general, there is a nice combination of affordable cost of living and nice quality of life, so it is an optimal place to live. That in and of itself makes Vienna a great place to attract high skilled employees.” “In general, there is a nice combination of affordable cost of living and nice quality of life, so it is an optimal place to live. That in and of itself makes Vienna a great place to attract high skilled employees.”

Bridging a Continent and Bridging Gaps But that is not the only advantage of the Austrian capital. Vienna is located at the heart of Europe, a few hours’ drive from all the other famous hubs. Due to the fact that the Austrian domestic market is relatively small, and the adoption of new technologies is relatively slow, local innovators are looking abroad for opportunities. In a mere eight hours drive you can find yourself meeting with VCs in Berlin or connecting with potential clients in Bavaria in roughly four hours, all of whom speak the same native language. Think about that. For an Israeli such as myself, this is a total gamechanger.


“The fact that this prime location is only a two hours flight at most to get to any other major European city makes it an accessible place in which entrepreneurs can create their central base.” “It adds potential for sure,” Markus upholds. “It has always been a place of gathering for all sorts of people from different nationalities. The fact that this prime location is only a two hours flight at most to get to any other major European city makes it an accessible place in which entrepreneurs can create their central base. Europe has always been split in the middle between West and East with Vienna as the bridge between the two. During the Cold War, it served as a meeting ground for all sorts of diplomatic activities. A political bridge then, it crosses over into business territory today. There are a lot of Eastern European companies who raised their base of operations for their activities in Vienna and vice versa.”

Academia and the Diamond in the Rough Vienna is a city of education. No other way to say it. Other than the previously mentioned world class University of Vienna, there are a mind-boggling twenty academic institutions within the city, most of which include programs in various subjects in entrepreneurship and innovation. “Universities are a place of research and that is always a huge potential for innovation,” Markus looks at the bigger picture. “It is the first step. Unfortunately, this is actually a place where we struggle to convert research results into innovation.” Walking the streets of Vienna, you see

many young students with their textbooks running to classes in many parts of the city. As these students continue their studies and also after they complete their studies and graduate, they are busy making a name for themselves in the current startup scene, which is comprised from both top-down activities but also bottom-up. Nowadays, you may find a vast number of communities of entrepreneurs all over the city.

“We are not so good at implementing academic insights in the market. Unfortunately, the faculty members in the universities are not measured by their applied research, and so there is little impetus to turn their research into commercially viable spinoffs.” Unfortunately, according to Markus at the moment the potential is there but the performance is not pleasing. “We are not so good at implementing academic insights in the market. Unfortunately, the faculty members in the universities are not measured by their applied research, and so there is little impetus to turn their research into commercially viable spinoffs. Several institutions have started working on it recently, but there is still a long way to go. I read lately that ETH Zurich alone creates more spinoffs than all of the Austrian universities combined.”

It Really Comes Down to the People All in all, Vienna is climbing up the ranks. Although still not considered by many to take the status as a world class innovation


hub, it is starting to get there. With the help of various macro factors as well as the presence of strong innovation agents (i.e. people who love the city and work toward harnessing its full potential), Vienna is well on its way to rising up to its full potential.

INNOVATION SAGE

“People need to meet and help each other. Sharing ideas, creating mutual opportunities, networking, etc., along with initiatives like ours and others have all helped a lot. The ecosystem we have in Vienna nowadays is quite connected.”

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“I have mentioned the critical mass and for such mass you must have connectivity,” Markus says proudly. “People need to meet and help each other. Sharing ideas, creating mutual opportunities, networking, etc., along with initiatives like ours and others have all helped a lot. The ecosystem we have in Vienna nowadays is quite connected. I do believe that since we are still unable to bring more entrepreneurs to take part in the ecosystem we do need more movement. However, in general, in terms of our structure, we are quite well established.”

“I see Vienna some years down the road as a strong hub especially in the following verticals, which actually are yet to be defined: life sciences, GreenTech, CultureTech and others that make sense and complement the strengths we have here in Vienna.” So, where is this city headed? Is it moving forward and ultimately reaching its full potential by becoming as strong as some of the previously mentioned cities? Only time will tell, but things do look good for the Austrian capital. “I see Vienna some years down the road as a strong hub especially in the following verticals, which actually are yet to be defined: life sciences, GreenTech, CultureTech and others that make sense and complement the strengths we have here in Vienna,” Markus looks ahead with deep optimism. “I predict that entrepreneurs from all over the world will come here to start their businesses in these verticals of focus, as the ecosystem will be built for that. There will be dedicated employees, investors, experts, etc. I see the university research complementing these areas as well.”



The Power of Creating

INNOVATION SAGE

a SelfPreservating Innovation Right in the Heart of Europe 70

An Interview with

Awi Lifshitz,

CEO at weXelerate


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ustria has long been known for its cultural innovations, from sachertorte cake and classical music to such brands as Red Bull and Swarovski in more recent times. And in the year 2020, Vienna has even much more to offer as its capital still creates its own innovation culture. Since Vienna stands as one of the most important cities in Europe, it was only a matter of time before the winds of change started to blow and its innovative nature began to pick back up. One of the biggest enablers of innovation in this remarkable city is weXelerate, a corporate innovation hub. We discussed the topic of Vienna as a technological hub with its CEO, Awi Lifshitz.

Hi Awi, it is amazing hosting you in this issue! Please kindly tell us in short about yourself. Sure. I was born in Israel and moved with my family to Vienna when I was thirteen years old. We then moved to Berlin where I finished high school and moved back to Vienna myself for my academic studies. Post university, I moved back to Germany again and lived for a while in Munich and Cologne. I finally returned to Vienna once again after I married my wife, who is local. I have been here for the past eleven years and I cannot be more content. This is an amazing city. Back when I was a student Vienna felt a little small, but nowadays as

I am older it feels very cozy, and with my changing needs I feel right at home.

“Since day one we have had ten corporates joining us, and thus a complete ecosystem was created as a byproduct – many startups asked to arrive here, investors, service providers, etc. Today we have a true center for innovation and have therefore secured our great reputation in the Austrian market.� Tell us also if you do not mind about weXelerate. Of course, I do not mind. We have been in existence for three years now and you can argue that we are also a startup. We are a corporate innovation hub that focuses on assisting large corporations to find innovation. We help them search for it and find areas where they can improve. We either connect them to startups or to other corporates for co-creation. Till today roughly thirty corporates have worked with us. It is important to emphasize that


despite our name we are not a startup accelerator. Although we have worked with over 300 startups over the years, we do not ask for any equity from any of them, nor do we provide any services for startup companies. We are also not an incubator and obviously not investors. We only connect them to our customers, the corporates. Our business model is the annual entrance fees we charge for taking part in the programs we develop for the large corporates. What is important to note is that since day one we have had ten corporates joining us, and thus a complete ecosystem was created as a byproduct – many startups asked to arrive here, investors, service providers, etc. Today we have a true center for innovation and have therefore secured our great reputation in the Austrian market.

“I do think we are on the way to becoming an innovation hub. We are definitely not Berlin, Dublin, or Paris just yet, but all in all I do think we are on the right track.”

INNOVATION SAGE

Do you consider Vienna a true innovation hub?

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I do think we are on the way to becoming such. We are definitely not Berlin, Dublin, or Paris, but all in all I do think we are on the right track. If you look at Mercer’s “quality of living” rankings, Vienna is among the world’s leaders. One of our offices was rented by the FinTech company

N26, which is a digital bank startup with perhaps the highest value in Europe. They have development centers in Berlin and Barcelona, and a year ago they opened their third, right here in our building. They said to me that single men choose Berlin whereas family men choose Vienna. Vienna is a very developed city that is making real technological strides. City officials provide amazing packages for technological companies who choose to come here, including benefits like free airline ticket, six months free of any and all expenses, and various services. The universities have pushed technology and innovation strongly as well. To sum up, we are doing what is necessary. It will take us a few more years though.

You have cited many variables which contributed to Vienna’s slow transformation into becoming a real innovation hub. Would you also cite its geography in the heart of Europe? It is hard for me to define that variable as something which assisted. A few of our startups are also operating in Hungary, which is roughly an hour drive away. The Czech Republic is even closer and Slovenia is extremely close as well. In this digital age, the borders and your physical location are less important. In the past, we have collaborated with startups from Portugal, Russia, Israel, and other countries, with just as much ease between one another. Representatives usually come for a few days of meetings and then head back. Maybe it is important to emphasis that weXelerate deals mainly with digital and software innovation and less with hardware. Thus, we more directly feel the


impact of the remote nature of digital innovation. So, I see it as a less obvious component.

What has actually driven that change for Vienna? When compared to other Western European countries, Austria has a relatively smaller population, most of which is living in Vienna. Out of eight million people living in Austria over two million reside in our capital. The second largest Austrian city, Salzburg, has only several hundred thousand residents. After that, the majority of the Austrians are living in villages across the country. Therefore, it makes sense why any corporate with representation in Austria finds itself looking toward Vienna. Up until 2016 there was almost nothing in Vienna, and we looked to other places in the world where things moved a lot faster. A few of the people who supported us at the beginning realized how important it is to contribute to making Vienna a vibrating hub for innovation as well.

“There are many corporates in this city who are looking for innovative ideas and are ready to invest. As we have world-class manufacturers here, if you have a B2B startup in the fields of manufacturing, you have a big chance of succeeding in creating the right connections.”

What are Vienna’s strengths nowadays as a technological hub? The city assists with promoting startups, as I mentioned before. There are hands-down tons of promotion packages that aim to convince startups from all over the world to work right here in this city. The city really wants startups to arrive and set their base of operations here. Austria’s economy as a whole is truly powerful. As I explained earlier, there are many corporates in this city who are looking for innovative ideas and are ready to invest. We perhaps do not have the speed nor the big pockets of Silicon Valley. And, to be frank, our investment per capita is not large by any means. However, as we have world-class manufacturers here, if you have a B2B startup in the fields of manufacturing, you have a big chance of succeeding in creating the right connections. It is a small enough place to be able to speak to all of them.

How would you characterize Viennese entrepreneurship and innovation? That is a tough question. When I look at entrepreneurship and innovation in my native country, Israel they are mainly defined by techpreneurship. They are less customer oriented. Here in Austria, we focus mainly on business. For example, an Austrian entrepreneur will ask him or herself, “How do I build my customer relationships?” or “How do I achieve a customer solution fit?” Our innovation is perhaps less sophisticated, but it does locate its target audience a lot quicker. When an Austrian corporate buys a product from a startup the quality of customer service they receive is far more


important to them than the cutting-edge innovation behind the solution. To be honest, at this time Austrian corporates have a hard time comprising on cuttingedge solutions. It is probably our next step here in our ecosystem.

What is the current state of Austrian entrepreneurship and innovation? Are there many successful Austrian born startups? Certainly. We can name Runtastic, a running and training assistance app which was sold to Adidas for hundreds of millions of dollars. You have N26, which I previously mentioned. You have more, but again to be honest, we are not Silicon Valley or Tel Aviv.

INNOVATION SAGE

“We are trying to become an important niche player in the area of sustainability – we have a very big industry of sustainable food and agriculture.”

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Will we see Vienna right up there with these world class hubs? I have to say that it is not the ultimate goal.

If you take Israel again as a comparison, one of the reasons for its technological supremacy is the country’s mandated army service and the fact that so many young people have served in state-of-theart technological units. There is also lots of venture capital in Israel. However, there are almost no large corporates. The landscape looks out across many startups. We are trying to become an important niche player in the area of sustainability – we have a very big industry of sustainable food and agriculture. Perhaps in these areas we can be a global technological player, but I do not think we have any aim to produce generations of entrepreneurs who will produce tons of unicorns. We just want to make sure that our economy remains relevant.

“We need to ensure that the areas in which we are world leaders right now will remain as such in front of rising competition from countries like India and China.” So, in that regard, where do you see Vienna in the year 2030?


Vienna trusts in municipal and governmental policies, which assist in building a long-term infrastructure so that our vision materializes. The city has defined a few areas where it aims to become a world champion, one of which is healthcare. We have quite a developed health industry with many great hospitals. BioCare (medical distribution) is another advanced industry in which we look for sustainable business models and products. We have here the Silicon Valley of the packaging industry, another area of focus. We need to ensure that the areas in which

we are world leaders right now will remain as such in front of rising competition from countries like India and China. Summing up this fascinating interview, Vienna has employed a combination of bottom-up and top-down techniques to close the gap between itself and the legendary technological hubs that were mentioned throughout. It still remains to be seen where it is headed as the destination has yet to be defined.


The Hills Are Alive

With the Sound of

INNOVATION SAGE

Entrepreneurship

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Bernhard Kerres, Contributor

Executive Coach and Keynote Speaker (www.bernhardkerres.com)


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n 2015 I left Austria and moved my startup to Silicon Valley. I was appalled by the red tape, the bureaucracy, and the hostilities towards startups and entrepreneurs, not only in Austria, but also in all of Europe. Furthermore, I felt alone, as if I was one of the few people passionate about startups. One needed a magnifying glass to find other entrepreneurs. Since I returned in 2016 that has changed. Well, not completely of course, but here I found a changing world where there were so many more fellow entrepreneurs and a certain excitement towards startups. Despite this new and open climate, the bureaucracy and the red tape still remain sealed. The Global Competitiveness Index of the World Economic Forum is a constant reminder of that, charmingly ignored by most politicians if they know the report at all. The costs of starting a business are almost twice as high as in Israel. The time to start a business in Austria takes an average of 21 days; Austria ranks 105th out of 141 countries when it comes to the efficiency of establishment. In New Zealand it just takes half a day. The worst part about this: nobody cares. Nevertheless, against these odds, the scientific community is becoming more and more active. The Ludwig Boltzmann Society started an entrepreneurship program three years ago. Every year four scientists or scientific teams are selected for a yearlong entrepreneurship training parallel to their jobs at universities, science institutes, and hospitals. The program allows scientists from all disciplines to explore their entrepreneurial ideas, get an introduction into the business side from marketing to financial planning, and even draft a budget to take the idea closer to a prototype or even an MVP. Ideas range from using AI for real estate valuation to enhancing patient’s wellbeing by taking into account both their medical reports and overall quality of life. The funding opportunities for entrepreneurs have increased significantly from a broad range of government funding through various bodies to a growing angel investment scene. Finding the right government funding is still tedious, but once you understand the system there is enough money to get started. Hansi Hansmann, famous for his investment in the fitness app Runtastic which was successfully sold to Adidas, is president of the Austrian Angel Investor Association (AAIA) which boasts over 200 active members with an aggregate portfolio of over 1,000 startups. This shows great promise. However, when it comes to later stage investment the scene looks bleaker. Speedinvest is definitely the local European hero by now. But others are struggling to follow. Europe is still missing the active venture capital scene known in Silicon Valley. On the other hand, Austrian and European companies are warming up to the idea of working with startups, investing in them, and sometimes even buying them. That could be a different route to success, which is still relatively new. There is often still a huge culture clash when an established company invests in a startup. The understanding that it might be sensible to trust experienced people to accompany the process is not there yet. Surprisingly, Austria has not made much of its historic trademark as Musical Capital of the World yet. Despite its claim to Mozart – and the Mozart chocolates – as well as the traditional New Year’s Concert globally, innovation has not really happened in this area. It misses the public understanding and attention, even though Karjan Institute in Salzburg uses the maestro’s legacy to regularly organize classical music hack days and music tech conferences. One would hope that this would change at some point. So, there is hope and opportunity for entrepreneurship in Austria. If nothing else, Vienna has one of the highest living standards and remains fairly well connected to the world.


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