Archive for the ‘The Digital Director’ Category

Future Trends in Market Disruption

October 14th, 2014 | By

Seasoned venture capitalists during a keynote session this morning at the 2014 NACD Board Leadership Conference discussed future trends in marketplace disruption.

Scott Kupor, director of the National Venture Capital Association and managing partner at the venture capital firm Andreessen Horowitz, said that from an entrepreneurial standpoint, the so-called next big thing is whatever a business is doing to be innovative in their field. What many entrepreneurs are doing is streamlining the chain by which products or business ideas make it to market. They’re getting rid of the middle man.

John Backus, managing partner of venture capital firm New Atlantic Ventures, highlighted the importance of companies being aware, and staying ahead, of upcoming trends. As an example, Backus recalled a past employer, a home phone company in the 1990s that was so focused on its way of doing business that it totally missed the technological innovation of the Internet. Companies can essentially be wearing blinders, seeing only what they and their three or four nearest competitors are doing, ignoring the potential for disruptive innovation.

Kupor said his firm missed out on becoming an early investor in Airbnb.com–a San Francisco-based startup founded in 2008 that allows people to list rooms in their homes as being available for temporary rental instead of a hotel. Airbnb is now connecting people to available rooms–or couches to sleep on, in some cases–in 190 countries and more than 34,000 cities. Kupor said that the mistake that he and his team of investors made was in limiting their thinking to whether they would use the service. Their group wouldn’t, so they decided not to invest in the business; however, they later realized that many other people would use the service, so Kupor’s team later decided to invest in Airbnb.

“Big businesses have a really hard time changing the way they do business,” Backus said. “If you don’t innovate, somebody’s going to do it for you.”

Bill Reichert, managing director of Garage Technology Ventures, said that when a company finds out about a new innovative idea, corporate directors can’t just sit in the boardroom at the strategic level and say: “We’ve got to watch that, monitor that.” A company must react.

That reaction can play out in a variety of ways, depending upon the innovation and the industry.

Backus said that in some cases, companies react with merger and acquisitions. They purchase a company whose innovation might be disruptive and competitive to their company’s strategy. Then, they can either foster that innovation and bring it to market, or–in some cases–shutter the innovation to get rid of the threat of competition.

Other companies decide to invest in research and development hubs overseas, outsourcing their innovation to less expensive and more highly concentrated development teams in other countries.

Still other companies spin off their own team of venture capitalists to travel and seek innovative technologies in which to invest.

All the panelists agreed that the key to staying ahead of marketplace trends, after becoming aware of potential innovative ideas, was to take action. In other words, innovation ignored is a bad business practice.

Insights From Wikimedia Foundation Advisor Sue Gardner

October 14th, 2014 | By

Few companies have disrupted so-called business-as-usual as much as the Wikimedia Foundation. The nonprofit foundation is behind the website Wikipedia, an online, crowd-sourced encyclopedia that has become the fifth most visited website in the world.

At the 2014 NACD Board Leadership Conference, Sue Gardner, the former executive director and current special advisor for Wikimedia, shared her insights on the open nature of Wikipedia and the risks involved in that business model. Her thoughts resonate not only for the technology or publishing companies, but also for corporate boardrooms across a variety of other sectors.

Wikimedia aims to encourage the growth, development, and distribution of free educational content available in multiple languages.

Nobody, however, oversees the contributors.

“I will never read all the articles on Wikipedia, right? Unlike most organizations, there’s no central point of control. It’s very much about trusting the process.”

“For the most part, Wikipedia works great,” Gardner said. The articles contributed to the website are generally cited and thoroughly researched. Contributors to the site actually are very knowledgeable about intellectual property law and copyright law, Gardner said.

“We aspire to contain the sum total of human knowledge.” “But,” Gardner said, “the Achilles’ heel of Wikipedia is that the number of people contributing to the site is small and limited in its diversity.”

“It’s a systemic bias,” she said. “In order to edit Wikipedia, you tend to be living in a wealthy country with a good Internet connection. You have to have the leisure time to edit Wikipedia. What that adds up to is that the typical content contributor is a 25-year-old male grad student in Germany. People from poor parts of the world and women are underrepresented.”

Gardner said she believes that the contributions of women are missing. Several different studies conducted by researchers have found that somewhere between 12 percent and 15 percent of content contributors are women, she said. This dynamic might be a result of what can be a process that is not very collaborative, but more of a rough, confrontational back-and-forth between content generators.

Gardner also discussed the lack of diversity among the technology industry, specifically in Silicon Valley. When she moved to the San Francisco Bay area, she began a three-month tour to seek funding for Wikimedia. In that period, the only women she met were those who held positions such as administrative assistants. None were company leaders or business investors.

I think the lack of gender equality of the Silicon Valley area is a symptom of an immature industry,” Gardner said.

In addition to a lack of diversity, Gardner said she has another concern: data privacy. While many people are concerned about government surveillance, she is weary of vast amounts of data being collected by for-profit companies.

“I worry not just about what the advertisers know and how the information is traded, I also worry increasingly about companies that are going to be bought and sold for parts,” Gardner said. “The whole game in Silicon Valley is that a lot of companies are just going to go under. What is going to happen to the information that they have? I don’t think we’re worried enough about that.”

Cybersecurity: A Wickedly Hard Problem

October 13th, 2014 | By

This morning, Ken Daly, president and CEO of NACD, kicked off the second day of the 2014 NACD Board Leadership Conference with the announcement that NACD now has more than 15,000 members. NACD’s focus on timely and relevant information, changing the “unknown unknowns” to “merely uncertain,” is a key driver of the organization’s growth, according to Daly. He then went on to introduce the morning’s keynote speaker, White House Cybersecurity Coordinator Michael Daniel.

Michael Daniel at NACD Board Leadership Conference

Daniel opened his address with the declaration that “cybersecurity is one of the defining challenges of the 21st century.” He noted three macro trends that underlie the cyber threat, as it is

  • more diverse, we are moving from a wired internet to a mostly wireless one;
  • more sophisticated, malicious actors are dividing themselves into companies to levy their expertise; and
  • more dangerous, these actors show willingness to up the scale, to not only disrupt, but attempt to destroy data.

From a technical level, cybersecurity ought to be easy,” said  Daniel, but cybersecurity is much more than a technology problem–it is a technical, economic, psychological, business, physical, and political problem. “Many of these fundamental weaknesses have remained for years, and until we understand these listed human factors, we will continue to fail at this problem.”

In addition, Daniel mentioned an interesting analogy that touched on the impossibility of using a single group to monitor cybersecurity. In this scenario, everyone in the United States lived right on the Rio Grande River. With everyone living on the border, the federal government could not feasibly serve as the only entity in charge of border security. Extending this analogy to the Internet, which lacks an interior, just about everything touches a border in some manner. “Because of this, we cannot assign cybersecurity to just one part of the government or society.”

In that vein, partnerships–both between the government and the private sector and within the private sector–are key elements to defeat malicious actors, according to Daniel. He stated that there are two keys to building these partnerships: through reducing barriers; and encouraging companies to share more information. One former barrier, antitrust laws, should no longer be an impediment to cybersecurity information sharing.

Daniel concluded his address by saying that even though cybersecurity is a “wickedly” hard problem, we are starting to attack it across more dimensions. By working collaboratively across sector and company borders, we have access to many types of tools to address this growing issue.