Ten interesting things we read this week
Some of the most fascinating topics covered this week are: Business (Anjali Sud, the committed innovator), Economy (Building back broader), Technology (Bitcoin is the 'Digital tulip' or new asset class?; Morgan Stanley creates bot that does junior analysts' work), Astrobiology (Search for ET hots up) and Climate Change (Bill Gates has a plan to save the world; Race to clean up one of the world's dirtiest industries).
Image: ShutterstockHere are the ten most interesting pieces that we read this week, ended February 20, 2021.
1) The committed innovator: An interview with Anjali Sud, CEO of Vimeo [Source: mckinsey.com]
In this interview, Anjali Sud, talks about her journey till now and how she became an actual CEO from a mini-CEO. She started in investment banking and spent several years at Time Warner just as technology and media companies began unbundling. Then she moved to Amazon, where she got to experience many different functions and jobs. She came to Vimeo to run marketing—a traditional executive job. Talking about the lessons she learnt at Amazon, she says, “I took a lot of the company’s values with me when I came to Vimeo. One that stands out is customer obsession, something Amazon is known for. We would always start with the customer: you would write a press release of what the experience would be like for the customer before you even built a product. The second is the willingness to forgo near-term profit in order to improve the value proposition.”
But, what was the reason for switching from investment banking to marketing? She says, “I was drawn to Vimeo for three specific reasons. 1) Vimeo was in video. I felt that video would go through the kind of disruption that e-commerce had gone through ten years before, and where there is disruption, there is opportunity. 2) I was intrigued by its business model. At the time, Vimeo was the only open video platform that did not make money from advertising. Instead, Vimeo charged a subscription fee to video creators to access professional tools. It was an early version of the software-as-a-service model that we know today. I didn’t know if that would be successful, but I liked that the model was designed to create long-term relationships with customers. 3) I’m a big believer in brands that inspire passion among their users. Vimeo had this incredibly creative community, and I knew it was a great foundation upon which to build a great company.”
When asked what are the biggest lessons she learnt along the way, she says that there are specifically two lessons. 1) Look where others aren’t looking: “The reason I was able to champion the strategy we have today and why I think Vimeo has been successful at that strategy is that, while everybody else was focused on creating original content, my team said, what about all the businesses that need video to communicate?” 2) Move fast: “Everyone says that but I have never once looked back and thought, “Wow, I moved too fast.” I always think, “I moved too slowly, I wish I had made that decision earlier.” As organizations scale, you add so much structure and communication layers, and they slow you down. For me, this is a worry as Vimeo scales.”
2) Building Back Broader [Source: Project Syndicate]
Now that a new president has been elected, what now for America? That’s the question that economist Raghuram G. Rajan, former Governor of the Reserve Bank of India, tries to answer in this article. The pandemic has created massive inequality, and working on this is the key. The potential for revival lies in technology and trade. He writes, “The COVID-19 pandemic has forced many to work from home and connect with colleagues via the internet, greatly reducing any stigma previously associated with this arrangement. After the pandemic ends, many firms will offer their employees the option of coming to the office only when necessary.”
Also, working from home would result in people shifting to their native places. And with in-person business meetings becoming more dispensable, entire firms also may relocate. These trends will boost demand for local goods and services, creating more local jobs. Not every community can flourish even under these changed circumstances. Years of underinvestment in infrastructure, including broadband, parks, and schools, may render some communities unattractive to well-paid professionals and their families. High levels of crime and substance abuse could keep businesses away. And local workers may need retraining for new skilled jobs. The tempting, but wrong answer is to centralize the solution. Massive one-size-fits-all programs devised in a national or state capital cannot tackle a local community’s specific challenges. The answer certainly includes more outside funding, including further tax subsidies to encourage investment in “opportunity zones.”
What could induce change? One possibility is for the national or state government (or philanthropic institutions) to create grant competitions to fund groups with innovative proposals for projects in their communities. Project leaders would also be given access to professional consultants, who could help remedy weaknesses in the proposal, as well as to leaders of similar projects elsewhere so that ad hoc support groups emerge. Developed countries like Canada have been creating such networks to encourage bottom-up remedies to local problems that have hitherto defied solutions. Developed countries are spending enormous amounts of money in an attempt to recover from the pandemic. It would be a real shame if this were wasted on old and tired schemes that have rarely worked. The money should go to those who desperately need new opportunities, and know how to create them.
3) ‘Green steel’: the race to clean up one of the world’s dirtiest industries [Source: Financial Times]
Just as the oil and coal sectors have faced intense pressure in recent years, steel’s role in the climate crisis is now under much closer scrutiny. Outside of power generation, the iron and steel sector is the largest industrial producer of carbon dioxide. It accounts for 7-9% of all direct fossil fuel emissions, according to the World Steel Association, greater than the total for India. As climate change rises up the global political agenda and many governments commit to ambitious environmental targets, a race against time is on to develop low-carbon versions of this strong and versatile material.
“Steel is a very important material for modern society. It has been made since a long time back from iron ore, using coal,” says Martin Pei, chief technical officer at SSAB, a Swedish company at the forefront of these efforts. “If we really want to contribute to realising the climate goals set in the Paris agreement, then there’s a quite widespread consensus that only doing further efficiency improvements in the blast furnace will not be enough. Breakthrough technologies are needed urgently.” The most ambitious plans involve moving away from a principle for turning rock into metal discovered in the iron age, with “clean” hydrogen gas as a new alternative energy source.
While environmental policymakers dream of a “circular economy” where resource extraction and waste is minimised, recycling by itself cannot provide the answer for steel, which is already the most reused material on earth. But, research and technology can speed up the process for an alternative way to make steel. At a pilot plant in Lulea, northern Sweden, SSAB will soon begin trials using hydrogen gas to reduce iron ore. It says this will result in virtually no CO2 emissions, with water vapour the only byproduct. If proven at an industrial level, this would rank as nothing short of revolutionary. However, the blueprint centres on repurposing an existing system called direct reduced iron, which accounts for a small percentage of steel output worldwide. Other companies are also taking this seriously and working to lower their CO2 footprint.
4) ‘Digital tulip’ or new asset class? Bitcoin’s bid to go mainstream [Source: Financial Times]
The price of Bitcoin has gone soaring since Tesla announced that it had spent $1.5bn of its cash reserves buying bitcoin, and would soon start accepting payment for its electric vehicles in the digital currency. It sent a frisson of excitement running through the world of cryptocurrencies. Adding to the frenzy, BNY Mellon, America’s oldest bank, said it would start holding and transferring cryptocurrencies for asset management clients, while Mastercard announced it would soon support “select cryptocurrencies” on its network, allowing more stores to accept them as payment. Despite its recent dip, Bitcoin’s 12-month gain is 358% and means that the 18.6m bitcoin currently “mined” through an energy-intensive network of computers around the world are currently worth $877bn in total. That is twice the value of JPMorgan, America’s most valuable bank, more than eight Goldman Sachs’, or about a third of the entire FTSE 100.
While there are many sceptics, so are the optimists. “We are potentially at the birth of a new asset class,” argues Duncan MacInnes, a fund manager at Ruffer, a traditional, conservative UK investment group that raised eyebrows when it placed a $600m bet on bitcoin last year. “Bitcoin is emerging from the shadows, being co-opted by establishment institutions and becoming a legitimate alternative asset for investment portfolios.” “One of the most interesting evolutions of the market has been the tone when institutions talk about crypto,” says Chris Zuehlke, a partner at DRW, a huge Chicago trading firm, and global head of the company’s cryptocurrency arm Cumberland. “In just three years bitcoin went from people asking ‘what is it?’ to ‘how do I trade it?’.”
While Inigo Fraser Jenkins, an analyst at Bernstein, the Wall Street research house, concedes he can count the number of clients that have started to dabble in bitcoin on one hand, he is confident that the “direction of travel is towards more institutional adoption”. Perhaps the best explanation for parts of the investment industry’s current interest in bitcoin — and an indication of how durable it will ultimately prove — was made by the legendary hedge fund manager George Soros almost a decade ago. “When I see a bubble forming, I rush in to buy, adding fuel to the fire,” he admitted in a 2009 speech. As the hedge fund titan knew, riding a market mania can be immensely lucrative — provided one gets out before the reckoning.
5) The search for ET hots up [Source: The Economist]
With the world heating up, the hunt for a new habitable planet is on. At the moment, there are a few planets that might be habitable for humans. Abel Méndez and his colleagues at the University of Puerto Rico, Arecibo have compiled a list (Habitable Exoplanets Catalogue [HEC]) of planets beyond the solar system. The existence of the HEC, compilation of which began in 2011, is one manifestation of a renewed surge of interest in answering, once and for all, the question of whether life is a phenomenon that exists only on Earth, or is widespread. Until recently, that question was unanswerable. But astrobiologists, as the diverse band of scientists now trying to do so describe themselves, are increasingly confident that an answer will be found within a couple of decades.
There are, broadly, three ways of doing this. One is to look from a distance, using telescopes to examine systems such as the orbiting Teegarden’s star, a tiny, dim object in the zodiacal constellation of Aries. The second, if the object of interest is close enough, is to visit it, as is happening with the arrival this month of Mars-bound craft launched by America, China and the United Arab Emirates. And the third is to search for radio signals or other signs of technology, on the assumption that at least some life elsewhere has followed the trajectory of life on Earth and generated technically adept species.
If it turns out that somewhere else in the solar system either has, or had, life, one further question needs to be answered. This is, is it the same as life on Earth? One school of thought, known as panspermia, suggests that life might not have evolved in situ everywhere that it is found, but could instead spread from place to place. This would be easier within systems of planets than between them. If organisms live on other bodies in the solar system it should be possible to work out from their biochemistry whether they share an ancestor with those on Earth. Either answer to the panspermia question would be interesting. If any life on Venus, Mars or the Jovian or Saturnian moons had separate origins from life on Earth, it would suggest that biology starts up easily.
6) Bill Gates has a plan to save the world. Will the world listen? [Source: wired.com]
In his new book, How to Avoid a Climate Disaster, Bill Gates argues that there are really only two data points that matter when it comes to tackling humankind’s existential challenge: 51 billion and zero. The first is the number of tonnes of greenhouse gases that are typically added to the atmosphere every year. The second is the number we need to arrive at to avoid catastrophe. Mr. Gates argues that wholesale transformation is possible while maintaining lifestyles in high-income countries and continuing to lift billions out of poverty. And he has a plan. He employs the concept of the “green premium”. Green premium is the additional cost of using a green alternative. In some instances – such as producing electricity using wind turbines or solar energy – it can be zero, depending on the country.
Currently, the concentration of carbon dioxide in Earth’s atmosphere is around 414.68 parts per million (ppm) – there is consensus that, once the level reaches 450ppm it will raise the global temperature above 2 degrees Celsius, triggering extreme weather events and irreversible, catastrophic change. While some advocates of change suggest that the target should be 2030, Mr. Gates believes that’s unrealistic – carbon is too deeply woven into the fabric of everything we do – and could provide a distraction to the more significant goal of zero emissions by 2050.
When asked on betting on a single breakthrough happening in the next decade that really was a game changer, he says, “Well, part of the point of the book is that [we can’t rely on a] single breakthrough, we need artificial meat, we need lithium... But I would say, if you can get super-cheap green hydrogen, it sits in terms of the industrial economy at the peak. So, if you pencil in ridiculously low-cost hydrogen, then I can tell you how to make clean fertiliser and clean steel, and even clean aviation fuel.” Lastly, he says that he is optimistic about the world being net zero in terms of carbon emission by 2050.
7) Expected technological breakthroughs in 2021 [Source: techradar.com]
2020 has been a year where technological innovation, digital transformation and connectivity adoption, rapidly accelerated. Also, many expect this year to see a number of significant breakthroughs. One particular area will be the intersection of AI and High-Performance Computing (HPC) with Life Sciences. The Life Sciences industry is making increasing use of big data, and AI is being applied to it, in order to make sense of the data. This kind of AI, and the processing of such vast amounts of data, requires HPC solutions. However, HPC hardware and software does not come cheap and therefore the author of this article, Henk Koopmans, CEO of Research & Development, Huawei UK, expects to see HPC-as-a-Service emerge as a new technology/opportunity.
2021 is the year when 5G will really start to be deployed around the world. As populations in many countries around the world continue to age, added to the huge ramifications of the pandemic, the author expects to see breakthroughs in 5G wireless medical assistance technology, which can be accessed anywhere and anytime, driving a wide range of new apps, products and services. With a good enough connection, a physical presence won’t be required and the help of the best surgeons will be able to be shared anywhere it is required.
5G and mobile edge computing will drive R&D and new value-added services within manufacturing industries and supply chains. We’ll see new innovations in wireless robots that are controlled through the cloud, plus other new wireless connection technologies that will make factories in 2021 more efficient than ever before. Another breakthrough area will be in the use of VR Haptic Gloves. These are gloves that allow a user to feel the shape and density of a virtual object, through the use of force feedback on the user’s hands and fingers. As we re-adjust our lives and rebuild our economies, the author is optimistic that the pandemic will spark many new technologies, related to almost every aspect of our lives - remote working, learning, entertainment, financial management, health care, well-being, and so on.
8) Podcast: Amazon Narratives — Memos, Working Backwards from Release, More [Source: a16z.com]
In this podcast with Sonal Chokshi, the very first podcast for the new book Working Backwards: Insights, Stories, and Secrets from Inside Amazon, authors Colin Bryar and Bill Carr share not only how Amazon did it, but how other companies can do it, too, drawing on their combined 27 years of firsthand observations and experiences from being in “the room” where it happens. Bill was vice president of digital media, founded and led Amazon Music, Amazon Video, Amazon Studios; and Colin started out in the software group, was a technical vice president, and then, notably, was one of Jeff Bezos’ earliest shadows — the shadow before him was in fact Andy Jassy, president and CEO of Amazon Web Services (soon to be CEO of Amazon).
The two share not only the early inside stories behind (ultimately) big business moves like AWS, Kindle, Prime — but more importantly, the leadership principles, decision-making practices, and operational processes that got them there. Because “working backwards” is much, much more than being obsessed with your customers, or having company values like “are right a lot”, “insist on the highest standards”, “think big”, “bias for action”, and more.
The discussion also touches on hot-topic debates like to lean-MVP-or-not-to-be; the internal API economy; do you even need a chief product officer; and if you need less, not more, coordination as you grow. Can startups really be like Amazon? Yes: and it comes down to how leaders, organizations, and people at all levels decide, build, invent… using the power of narratives and more.
9) Morgan Stanley creates bot that does junior analysts' work — faster [Source: americanbanker.com]
Many things have been automated and in many factories, robots have substituted humans. Lately, even the finance industry has been using a lot of AI technology. Technologists at Morgan Stanley have developed a virtual assistant that helps people throughout the organization plumb useful information from the 50,000 research reports the investment bank generates every year. “Our research reports can be many, many pages long,” said Eden Kidner, global head of research technology at Morgan Stanley. “And now we’re getting to the ability to actually find specific charts and paragraphs within the reports that answer questions.” The AskResearch bot is an example of banks ramping up the use of AI in different parts of their business.
“What we are seeing on the AI side, especially in natural language processing, is really amazing,” said Brad Bailey, research director for capital markets at Celent. “One aspect is the ability to get content from all types of structured and unstructured data and leverage that in numerous ways is a competitive edge and a huge benefit to client service.” The bot uses machine learning and natural language processing to become better at answering questions over time, Kidner said. The bot can retrieve earnings-per-share estimates for any company, or any of 50 other fundamental metrics the bank tracks or forecasts. It understands abbreviations like GDP (gross domestic product), so they don’t have to be spelled out, and synonyms. It understands multiple ways of asking questions.
“Trying to enable the bot to be able to find a specific paragraph, a chart or something that sits deep within that research and distill it up — that's where the high value of this bot is," Kidner said. "It’s also the biggest challenge to solve for." In the past, it typically took 10 minutes to go to the research portal and find a piece of research, he said. With the bot, the task takes less than a minute. In the second quarter, Morgan Stanley will begin rolling out the AskResearch bot to clients, so they can use it directly. “We do see a future where we see AskResearch integrated into a broader interaction, a lifetime chat between our clients and our analysts, introducing AskResearch in other channels to be more effective and efficient,” Kidner said.
10) How to improve productivity: Do something unproductive [Source: CNBC TV18]
“Do something unproductive, dad!” These were the words that made GV Ravishankar, Managing Director, Sequoia Capital India, realise that being always on and busy 24*7 is bad for productivity. And the worst was that he was proud of this busyness! Mr. Ravishankar says, “The switch flipped for me at a global Sequoia meeting when during a team conversation, our senior partner Michael Moritz told us to “Never confuse travel for work!” Those words really struck home, and during the COVID-19 linked shutdowns, started to ring louder than ever before as I discovered how much more I could accomplish without travel. And now I would like to expand that advice to “Never confuse activity or ’busyness’ for work!”.
Instead of obsessing about becoming more productive, he has started making changes and carving out quality downtime. Here are some of those things that he does now: 1) Role of sleep: He says, “I have always needed a good eight hours and honestly, I didn’t look very cool back in college going to sleep at 11 PM every day where most people packed it in at 2 AM. But I knew to be productive I needed rest. While society seems to glorify the person who works more and sleeps less, there are more and more conversations these days about prioritising sleep. The book “Why we sleep” by Mathew Walker is an eye-opener when it comes to understanding the importance of sleep and certainly made me feel less guilty about hanging on to my eight hours.”
2) Thinking time: Thanks to Covid-19 his workout discipline has improved a lot and sticking to a workout schedule of 4x a week has helped him feel more energetic. On the days that he doesn’t work out, he goes for long walks and use the time to catch up on podcasts and audiobooks. Also, this is the time some great ideas come to his mind! 3) Meditation/Playing a sport: Playing a sport or meditating has the effect of keeping your mind focused in one place. This has the effect of rebooting the mind in a way where the impact lasts well beyond the activity itself. 4) Taking small breaks through the year: Don’t wait for that one long break once a year! Try to manage 3-4 short breaks to refresh and recharge! So go on, do something unproductive. You’ll be surprised by the benefits over time!
