Post-Brexit: How Intangible Investment and R&D In Experimental Technologies and IP Can Expand UK Startups
Currently in Britain, the most amount of R&D is spent on pharmaceuticals. However, advances in cognitive neuroscience are pushing research into less conventional avenues and more towards experimentation with new technologies. As a consequence, the global world is becoming less focused on pharmaceuticals and moving more towards neuro-enhancement, biohacking, transcranial direct current stimulation (tDCS), low level laser therapy (LLLT) and nanotechnology. In fact, President Obama has said that in the next decade, treatment with pharmaceuticals will be replaced by nanotechnology and tDCS in the United States. Although universities such as Oxford and institutions such as the National Institute for Health Care Excellence have done research into these areas, the startups that are being launched with these technologies are essentially nil in the U.K., partly due to the lack of research funding and also because the U.K. is dominated by investments into the pharmaceutical sector and not towards these new technologies.
South Korea is approximately 1/4 the size of the U.K. with nearly the same number in population. They spend the most percentage of their GDP developing new, experimental technologies and ranks 4th in the world in launching the most number of patents per year.
In fact, compared to the rest of the world, South Korea has spent the equivalent of 4.1pc of GDP on developing new technology and products, Japan 3.4pc, Germany 2.9pc, the U.S. 2.7pc, France 2.2pc whilst the EU average was a mere 1.9pc according to the latest OECD data from 2014-2015. In every sector, China has been driving growth in IP by launching the most amount of patents, up 4.5% from 2013 to 2014, having launched 2.68 million patents in 2014 alone. China was followed by the U.S. (578,802), Japan (325,989), and the Republic of Korea (210,292).
One continuing trend I have noticed in regards to London's startups is that there is an air of ambivalence about intellectual property (IP) and patent generation and many startups do not consider launching patents as a necessary part of their evolution and scaling up potential.
There are only 2 hi-tech firms listed on the FTSE 100. Professor Alex Edmans from the London Business School attributes this to a lack of investment in R&D from thirty years ago.
In the last five years, more funds towards research have been spent on IT and the tech sector, mainly due to the policies of PM David Cameron; however, Britain has been behind the trend in other sectors, mainly due to a lack of R&D funding. I recently read an article by Professor Alex Edmans at London Business School recently in which he writes that British firms used to be leaders in the chemical, electronics and electrical engineering industries, but a lack of investment in R&D thirty years ago became a reason why there are currently only two hi-tech firms in the FTSE 100.
A lack of investment in IP and a focus on short-term profit by U.K. investors can be holding back Britain's startups from potentially scaling up.
In addition, Professor Edmans also comments on the lack of scale-up in the U.K. startup scene despite there being a boom in start-ups, and he thinks this is mainly because of the lack of funding into "intangible investments" and that VCs are apprehensive about money spent on intellectual property and brand, which in turn prevents startups from raising capital vital for developing into sustainable, value-generating enterprises. Instead, he further assesses that due to the nature of investors focused on the "profit ball", and short-term profit due to the nature of dispersed investors in which companies often have fragmented shareholder bases with many investors, each holding a relatively small number of shares so that they may not be particularly attentive to closely examine what a company does, but a tendency to concentrate on short-term financial figures. This is what he considers one of the obstacles of intangible investments, which can take an average of 4-5 years before it can show up on the balance sheet.
Every major market has their own native version of a search engine, universal eCommerce platform and social network and messaging platform except for the U.K. and the majority of the E.U.
Another reason why Britain's startups have not scaled-up can be due to the fact that the U.K. lacks a dominant native company that is investing in R&D and actively making acquisitions. Instead many of the UK's most promising startups are acquired early by dominant U.S. corporations such as Google and Twitter. This is, of course, great news for investors, who immediately make a return on their investment; but in the long-term, Britain's startups are prevented from reaching their full scale-up potential. On every continent, there is a dominant native company in search, social network, technology, and eCommerce. The U.S. has Google, Amazon and Facebook and China has Baidu, Alibaba and WeChat; South Korea has Naver, Coupang and KakaoTalk; Japan has YahooJapan, Rakuten and Line, and even India has FlipKart. However, the U.K. has neither a dominant native company in search, social networking and messaging nor even a universal eCommerce platform, despite that many eCommerce startups are launched in the U.K. Global intercommerce transactions will be through a nation's native eCommerce platform as Alibaba, Amazon and Flipkart have taught us. This is something to consider as Britain moves towards a post-Brexit world.
By Sierra Choi
It has been an emotional week for many Brits, Europeans and residents of the U.K. during the Referendum last week on June 23rd. The dialogue by the Brexit- Leave the E.U. camp had been to consistently distort truth into rhetoric to outright lies and falsehoods that follow in the tradition of the worst American reality television series. That dialogue soon devolved into racism, bigotry and slander in the anti-immigration debate; hate-speech started popping up in discussion groups and comments under all the major news circulations in alliance with the Brexit camp; an extreme kind of nationalism, something that was eerily reminiscent of the Hitler era.
However, despite that all the dialogue had been about British sovereignty, criticisms about the E.U., funding for the NHS, and numerous other social issues, what politicians failed to tell the public was that Great Britain was next in line to potentially hold a pivotal position as one of the largest economies in the world.
The leaders of the Brexit Leave campaign now deny that there will be £350 million funding for the National Health Service (NHS). In fact, MP Nigel Farage calls it a "big mistake". This was one of many misleading public campaigns and outright lies that the Brexit camp put forth leading up to the June 23rd E.U. referendum. In fact, £350 million doesn't even go to E.U. every week as claimed and the number is actually much lower.
Despite being an island roughly 4x the size of South Korea, the U.K. has always been considered the financial capital of Europe, a position that attracted the 2nd largest economy in the world: China.
It has been debated that the 21st century will belong to China, and that the 2nd largest economy in the world will soon eclipse the United States. President Clinton saw the opportunity in China, and repaired much of the U.S.-China foreign policy during his Presidency and welcomed China with open arms in the 1990s. As the number 2 holder of U.S. debt, China's influence into the United States started becoming more ubiquitous. On the other side of the Atlantic, Margaret Thatcher repaired much of the row between Britain and the United States as Prime Minister in the 1980s, it wasn't until David Cameron became Prime Minister that he too, saw that Britain's secured position into the next century would be to embrace the East; and with China, under his leadership, lead plans to internationalise the yuan (RMB) and in October, plans to launch the China International Payment Service (CIPS) in London, the gateway to the European market and the financial capital of Europe.
The internationalisation of the reminbi (RMB) or the yuan, has been projected by economists to replace the U.S. dollar as a reserve currency.
Just as Britain has been looking beyond Europe for its future GDP, the east too, had been eyeing the European market and with China's ambitions to internationalise the yuan, it has been said by many economists that it could topple the US dollar from its dominant position as reserve currency, a global safe haven.
Many U.S. tech companies, including Google and Apple have made numerous mistakes in handling their relationship with Chinese authorities and attempting to enter their market. Recently, China has banned the Apple's iBook store and iTunes store, effectively shutting down one of their largest growing revenues and the Beijing patent office accused Apple of copying another Chinese company's patents, effectively stopping the sale of their products. All this despite Apple having just recently invested $1 billion into China's Didi Chuxing as a peace offering. Since Apple's CEO Tim Cook had announced that in the near future, more than half of its revenue will come from China, it has given the latter the upper hand in a bargaining style that most Americans are not familiar nor have the patience to deal with. Thus far, U.S tech companies have made too many mistakes in their dealings with China to possibly successfully enter the market, potentially threatening their place on the global economic stage. These are mistakes that David Cameron set out not to make, and he and George Osborne began a rigorous campaign to woo China into the U.K., and thus reciprocation of extending the reach of British companies into the much coveted China market.
London is currently the global financial centre of the world, and the European financial capital with New York City following as second. However, the Brexit vote threatens Britain's position as the global financial centre.
However, despite China's growing presence both on the economic and technological fronts, China is not without its long history of problems and its history of human rights abuses, animal cruelty, human trafficking, illegal organ harvesting and tyrannical political regime could cause great ethical concern in the New World Order. But who better than to guide and influence China into the next century than Great Britain? Although the British have been criticised for its long history of imperialism at the turn of the century, citizens of Hong Kong have thrived under British rule and many citizens have expressed widespread sentiment that they wished Hong Kong hadn't been handed back to China in 1997. The British set up a series of laws that protected them with a Bill of Rights in the Sino-British Joint Declaration that gave Hong Kong citizens civil liberties.
Whilst U.S. tech companies have found China a beast it cannot tame, the U.K. had every advantage as the financial capital of Europe. David Cameron and George Osborne's vision of Great Britain was to make it the centre of the global financial world and also, the technology start-up capital moving beyond the scope of Silicon Valley; in a new alliance with China; bringing more jobs to Britain, to replace the old generation of manufacturers with a new generation of technological innovators. However, now Brexit threatens to topple the U.K. into isolation towards relative obscurity; to remove its current position as a the European financial capital. Although much of the Brexit debate was about independence and not being pulled down by E.U. regulations and rules, in reality, the E.U. was the army Britain needed, and a break away has weakened Britain's position into entry in the Eastern markets. Now, as Brexit looms, Germany and France will begin the process of potentially taking Britain's position as the financial capital of Europe. It isn't the E.U. that is in threat of becoming dismantled, it is the U.K.
Et tu, Brute? MP Boris Johnson has betrayed his oldest friend, Prime Minister David Cameron by stabbing him in the back with his last-minute support of Brexit in a bid for the position to become the next Prime Minister.
Member of Parliament (MP) Boris Johnson, a man possessing two citizenships, has, at the very last minute stabbed his oldest friend, David Cameron in the back. A man who was previously never for Brexit, he has now found himself as a possible successor to becoming the next Prime Minister. And together with MP Nigel Farage, a former commodities broker, they have betrayed the people of Great Britain to possibly deny them the pivotal position of becoming one of the greatest economies into the next century and the greatest ally and influencer of China as it marches on to dominate the 21st century. But not only that, they have also threatened to break apart the U.K., and with referendums of independence being raised by both Scotland and Northern Ireland, the U.K. is holding onto a tenuous brink.
Boris Johnson is now next in line as the Prime Minister of Great Britain. His pro-Brexit campaign has threatened the stability of the U.K., with Scotland and Ireland now likely holding referendums to separate from the U.K. in order to remain in the E.U.
The Great Britain I know is one filled with a history of welcoming tolerance and change. It was where child labour was first outlawed in the world in the 1800s, and also where the first African slaves were set free, leading the way for other nations, such as America to follow. It is a place where debate is actively encouraged, where innovations in A.I. have taken new directions; where the question of ethics is closely aligned with nascent technologies and where people tend to be humble rather than overtly cocky.
The Great Britain I know is also where some of the most hardworking people reside, but not at the cost of losing time with their families. It is where philanthropy is more highly regarded than egotism and selfishness; where the sense of community exists in both small villages and big cities. Although I have American citizenship, I have always felt that England was my metaphorical homeland. I'll never forget the first time I set foot in London in 2003 to do my Masters degree, I felt something magnetic, a different kind of energy than I was used to. From the city to the cobblestoned streets to the rolling hillsides and the tempestuous weather, it was where I felt I was home; that too is the feeling of many immigrants when they come to Britain, it's a kind of belief in justice and fairness in the law that so many other nations have simply given away.
The Great Britain I know is one that is unified; one of the pivotal nations that began the E.U., a unification of Europe to move away from decades of war, prejudice and hate. Goldsworthy Lowes Dickinson, a British political scientist, coined the term "League of Nations" in 1914 and drafted a scheme for its organisation to prevent future wars after WWI. After WWII, european integration was seen as an antidote to the extreme nationalism which had devastated the continent, and the European Union was borne. The very kind of extreme nationalism that MPs Boris Johnson and Nigel Farage are now championing.
Nationalism is the last refuge of scoundrels.
-Sir Winston Churchill
The pro-Brexit Leave camp have turned their back on decades of history. They have manipulated and lied to the British people about their intentions and preyed upon the fears and prejudices of every demographic.Their campaign was never about "British Independence"; it was about sabotaging Britain's place in history in the next century for a little bit of personal glory. The E.U. was never the tyrannical despot organisation that Great Britain needed to break away from; rather the E.U., although not without its problems, has been the supporter of democracy during times of chaos. But it was more than that, Brexit also signified the end of era of peace; one that the popular and influential MP Jo Cox died for as she was assassinated whilst campaigning for the Remain camp.
It has been said that people who forget history will soon repeat it. Thus far, 3.3 million people and growing have signed the petition for a 2nd EU Referendum.
By Sierra Choi
When you join a company as interim CFO you are expected to bring value even from your first week. This is daunting as often it can take a couple of months (even more for larger companies with many subsidiaries and multiple verticals) to fully understand a business in sufficient detail. Also it takes a few weeks to learn how good the team in place are. So what to do so you can actually bring value to the company in a manner where you have confidence under such a tight timeframe?
In an ideal world you will have formed a 100 day plan – however, chances are if you are being brought in as interim CFO – the company may not have 100 days’ cash left; or you are being brought in to fix some specific issue or run a specific project (ie, be it budgeting, working a transaction or an integration after a transaction). If time is on your side, take at least a month to form a 100 day plan and here are the five areas where I would focus:
I was tempted to put “cash” down for all five and frankly, “analysis” in the number one area (which is cash!) will lead you to all other areas of importance:
20% of the product range will supply 80% of the profit
Being an interim CFO, much is expected of you – you must quickly get a grasp on the figures, the finance team and the strategy and start adding value to the CEO. Outside of the above - as much time as possible should be spent with the CEO and other C-Suite privately to see where the finance team can help ease their pain. Your business instincts should then kick in to lead you to the major issues – then you really roll your sleeves up.
By John Rowland
John is currently in Nairobi, Kenya as interim CFO for Bridge International Academies
A tribute to Jo Cox, one of the rising stars of Parliament who was only elected last year. Yorkshire born and bred, she tirelessly spoke out for immigration rights.
We cherish the environment that allows us to express our ideas with the full knowledge at a time when political, economic and philosophical discourse has taken up in a democratic fashion via the internet in the Information Age; a discourse that is open to all, despite that some of you shall agree, some of you may not and some will think we are bonking mad. Those are all valid reactions and we appreciate and learn from all your civilised reactions to the ideas we speak about and often write about.
In the past week, there has been two significant attacks on the values that underpin our mindset: that of openness, freedom of thought and of diversity. On Sunday, we had the savage gunning down of over 50 patrons at LBGT club in Orlando; and last night, we had murder of Jo Cox, an exemplary MP (irrespective of the party she stood for) and a tireless campaigner for immigration rights during a crucial time of the EU referendum. Make no mistake they have lost their lives because of their political views or an expression of who they are. These are an attack on all of us; especially here in London, for Tech City whose success is derived by its ability to foster new ideas and encompass many different values and cultures, it is particularly acute. We mourn.
By Ashok Parekh
I was listening to an interesting podcast on soundcloud last week from NextView ventures, a Boston/ New York based fund that is focused on seed funding, on a segment featuring the co-founder of Dia & Co., Nadia Boujarwah, as she gave a very harrowing and detailed account of what it was like shopping as a plus sized woman.
Her account was one of essentially being treated like an outcast. In any brick-and-mortar shoppe, the models and window dressings all catered to thin figures, and the main stage of presentation was towards the same type; and to the top, away from all the flirty advertisements and seasonal marketing dalliances of colour, shapes and textures, was a section set aside by plain, unadorned, grey walls, into an isolated maid-like attic on the top of the building, where all the plus sized clothes were kept for people who didn't fit into smaller sizes.
Nadia Boujarwah, Co-Founder of Dia&Co, an eCommerce startup that focuses on plus-sized women.
This sort of journey for her was partly emotional; Ms. Bourjarwah has never been anything below a plus size all her life, and she has also never had a period when she wasn't interested in fashion. However, she realised that she was never the apparel market's primary customer nor focus demographic, despite the fact that the average U.S. size for women is actually a size 14 (UK size 18-20) and in fact, 67% of the women in the U.S. are above a size 14+ (UK size 18-20+). The rational side of her gave her the impetus to begin her journey to launch Dia&Co, an eCommerce subscription service, similar to BirchBox which focuses on beauty products, but for plus sized women to receive a monthly box of clothes and accessories to try on in the comfort of their own homes and then decide whether they would like to purchase the items or send back.
The typical runway model is a size 0 whilst the majority of American women are size 14 or above.
Another company Eloquii, a fast-fashion eCommerce site for plus-sized ladies has also recently raised $15 million just this past April. The ready-to-wear trend seems to be that "conventional" sizes no longer apply to the women of America or elsewhere. US sizes 0-8 (UK size 4-12) are clearly in the minority when the average size of the American women is a size 14 (UK size 18-20) and the average size of the UK woman is a size 16 (US size 12). Debenhams was one of the first UK department stores to display size 16 mannequins in an effort to break away from standard size 10 (US size 4) models a few years ago. However, the majority of the fashion industry still focuses on standard US sizes 0-10 with runway models averaging a US size 0 (UK size 4).
British uniforms in the War of 1812.
The history of ready-to-wear is an interesting one that launched due to an international conflict. The introduction of factory made clothes with standardised sizes began with the production of military uniforms in the War of 1812 between the UK and the US. However, during that time, the apparel market mainly catered to the upper classes; for women and men with means who could commission custom-made clothing and the rest of the population kept up-to-date by adding accessories, such as neck collars, ribbons and sashes to secondhand dresses.
The entire fashion industry was turned on its head by Gabrielle "Coco" Chanel, when she moved away from the ornate dresses, corsets and petticoats of the era into more comfortable clothes that "liberated" women with androgynous styles and fabrics borrowed from traditional menswear by giving women the first skirtsuit in the early 1900s. Funded by the Wetheimer brothers, Chanel lead the U.S. ready-to-wear market after WWII, and the era of mail-order catalogues and factory made clothes started to take flight, with many designers following suit.
Gabrielle "Coco" Chanel liberated women from petticoats, corsets and elaborate garments to a more simplified womenswear that was androgynous and comfortable in the early 1900s.
In the mid-1990s, "fast-fashion", a business model developed by Zara radically changed the apparel industry via its utilisation of cheap labour in third world nations in an ever-continuing stream of weekly new inventory that could be easily disposed if unsold and many of the dominant retailers, including TopShop, H&M, The Gap, Banana Republic et al embraced that model for its short-term profits and quick return on investment. Their business model is one that is held up as a model study at top business schools, but also one which has gathered international criticism for its devastating effects on the environment and the millions of women and children it would exploit in the decades after. I have previously written about the challenges facing fast-fashion here. The post-1990s era would become the "sweat-shop" era in our apparel landscape.
Sweatshop workers at an apparel factory in China. These women make around $0.03 cents/day. The post-1990s era up to today is known as the sweatshop era in the apparel industry.
Now what used to be mail-order catalogues in the early 1900s has become eCommerce for us today which curiously takes us to this next stage of evolution in ready-to-wear. Currently, most eCommerce companies are focused on getting rid of inventory through hard sales tactics, although many companies, such as the Gilt Groupe have discovered, women are not really persuaded to buy things via the aggressive psychological emailing campaigns of Sale! Sale! Sale! and that people prefer a customised shopping experience.
Dia&Co and Eloquii are two startups that focus on solving an aspect of the ready-to-wear in our current retail landscape by catering to a disenfranchised population that has been previously ignored in the previous eras of the thin physique. I think though the deep-seated problem of sizing remains unresolved, and has not been addressed by many eCommerce companies that exist today - in that although the larger sizing issues can be partly addressed by including those larger sizes in an eCommerce site, women and men tend to have different body shapes that do not all uniformly fit into a particular size in the first place.
Although the clothing and textile industry is fragmented and diverse, and the global apparel industry makes more than $1 trillion annually in revenue, with the entire apparel industry given a valuation of $3 trillion, it is clear that simply aggregating inventory is not a viable long-term strategy for the typical eCommerce startup focused on apparel and accessories. Instead, we need to look deeper into how we can solve the complex issues that surround the production line from start to finish that will concomitantly have a positive environmental, economic and sociological impact. And it might just mean that perhaps this is the beginning of the end of ready-to-wear as we know it.
By Sierra Choi
When we examine history through a retrospective the lens, the oldest recorded companies in the world were primarily in the hospitality industries: restaurants, pubs, and hotels with one of the oldest recorded pubs in history in Ireland called Sean's Pub in 900 A.D. and the Bingley Arms in the UK in 953 A.D. The first hotel was recorded in Japan called Nishiyama Onsen Keiunkan in 705 A.D. Many other companies would crop up within the next few hundred years in consumer discretionaries such as textiles, jewellery, pharmacies, and an explosion of breweries and restaurants. 1400-1500 saw the rise of the financial sector with the first bank founded in 1472 in Siena, Italy called Banca Monte dei Paschi di Siena.
Ten centuries old, The Bingley Arms in the North Leeds, a pub that had been established in 953 A.D.
These days, when we think of companies, corporations, or even startups, we often think of technology companies. If we take a closer look at long term trends, currently, we are nearing the end of the Information Age and moving into the Diamond Age (a term borrowed from Neal Stephenson's book of a future world in which nanotechnology has infiltrated all aspects of life).
One interesting long-term trend to note is that although we often think disruption happens very quickly, such as in the case of the mobile devices and the smartphone, often the technological advancements of disruption often take between 45-55 years in gestation before we see mass distribution within the population. For example, during the period of the Industrial Era when many companies were founded based on light, electricity, telecommunications, sound and printing such as GE, Xerox, Bell Labs and HP; however during this era, the initiation and development of computers, electronics, mobile phones and biomedicine were already in gestation, setting the stage for the next wave of companies which would become Intel, Microsoft, Apple, Sun Microsystems, Cisco et al.
The bicycle craze of the 1800s to early 1900s.
First Wave: Dawn of the Industrial Age (1740-1890)
First oil well and refinery 1745
First automobile 1768
First locomotive 1784
First bicycle 1817
Second Wave: Industrial Age: Light, Sound, Printing, Manufacturing (1890-1945)
Gestation: Computers, electronics, mobile phones, biomedicine
(Discovery of vitamins 1912)
Bell Labs 1925
The first car phones "mobile phones" became available to the public in 1946.
Third Wave: The Digital Age: Hardware and Software (1945-1990)
Gestation: 3D printing, Fiberoptics, electronic communication (email), GPS, holography, nanotechnology
Sun Microsystems 1982
Fourth Wave: The Information Age: Internet, Social Network and AR (1990-2040)
Gestation: Nanofactories/ molecular assemblers, Wireless Energy, Hover Cars, Molecular (DNA) computing
Magic Leap 2010
Currently in gestation for the last fifteen years, nanofactories or molecular assemblers can produce and replicate anything.
Fifth Wave: The Diamond Age: Transportation, Energy and Nanotechnology (2040-2090?)
Nanofactories/ molecular assemblers
Closing the recycling loop in waste
Sixth Wave: The Space Age: Interplanetary travel (2090-2200?)
Return to the Silk Road era of commerce and trade between many nations
Interplanetary trade agreements with Kepler's habitable zone planets and beyond?
According to NASA, we are most likely not alone in the universe and many exoplanets have been discovered which resemble a parallel atmosphere such as Earth.
We are also curiously close to the end of the Information Era, and nearing the next Fifth Wave of companies in which the technology for hover cars, wireless energy, nanofactories have long been in gestation.
Since the average lifespan of a contemporary mobile app company is around 3 years, it is sometimes difficult to look beyond short-term trends and population growth/ decline and look further out into the next 50 years and beyond. Nic Brisbourne wrote an interesting post recently regarding lessons for the startup ecosystems from the history of Silicon Valley in which he excerpts from Nicolas Colin's Brief History of the World (of Venture Capital).
In summary, Silicon Valley embraced military funding for nascent technologies and often funded startups based in research universities such as Stanford. Their goal was to reach out to prospective military customers and develop a prototype in Stanford's research laboratories:
1) Reach out to military prospective customers to better understand their needs, then offer to craft them a prototype in Stanford’s research laboratories—this generated substantial revenue for the university and strengthened its trusted relationship with key military figures;
2) If the prototype satisfies the customer, encourage one of your students to found a company and manufacture the product at a larger scale—this inspired an entrepreneurial spirit among the students and contributed to stimulating their hard work in the university’s laboratories;
3) Make sure a member of the Stanford faculty becomes a board member or consults with that newly founded company—this contributed to training Stanford scholars in business and turned them into better teachers and researchers;
4) Provide office space in the Stanford Technology Park, which was made possible by the fact that the university was the primary land owner in Palo Alto—this ensured that the upstart company stayed close and helped the nascent entrepreneurial ecosystem reach a higher density.
This is actually often the opposite approach in many nations, such as in South Korea, in which when a nascent technology is developed by a researcher, often the company or technology gets usurped or absorbed into a larger corporation, and you never hear about the Founders again. Silicon Valley set an interesting precedent of letting many technologies exist in a state of gestation but develop in parallel with military technology. I think that is one of the many reasons why in the Third and Fourth Wave of companies respectively, in the Digital Age and the Information Age, we saw an explosion of small businesses focused on technology that would become part of the start-up ecosystem.
There were many search engines before Google, but what Google did differently was the ability to track and individualise each user's search results. This sort of customisation allowed for more information to be known about user behaviour, something that didn't happen before the pre-Google era, and everyone's search results were the same.
Facebook's tagging feature of visual facial identification has been used by law enforcement and Federal agencies across the globe.
Likewise, there already existed many social networks before Facebook, but Facebook was the first to utilise a tagging feature that allowed people to be visually identified- which culminated in their acquisition of the Israeli facial technology company face.com. If we carefully examine all the startups out there with viable IP- IP that the military wants, those are the companies that eventually move past the startup phase into the global corporation phase. As a bit of a tangent, former Defense Advanced Research Projects Agency (DARPA) director Regina Dugan has worked for Google, and just last month, now is a key executive at Facebook. In Silicon Valley, military spending co-exists with the startup ecosystem, and the United States has often been criticised due to its multi-trillion dollar defense fund, the largest in any single nation.
Despite the social argument for whether this large defense fund has inevitably lead to a disproportionate society of economic inequality in the US, what makes the UK different from the US is that many UK-based startups are moving towards becoming independent from military resources and influence. Although London's DeepMind had been acquired by Google/Alphabet in 2014, two of the conditions set forth by CEO Demis Hassabis was that their technology not be used for military applications and that there would be a diverse Board of Ethics to guide their next steps.
Demis Hassabis, Co-Founder of DeepMind set forth conditions for its acquisition by Google/ Alphabet that its technology would not be used for military applications.
In addition, one exciting thing about being in our current transitionary period into the Fifth Wave of startups is that we are at a place in history that is similar to the dawn of the Industrial Era, in which many new emerging precedents are being set once again in transportation and energy. The UK has always been at the forefront of embracing emerging technologies in energy and transportation. Bristol's bio bus began its trek last year being entirely fuelled by human and household waste. However, there will also be significant progress in how we visualise transportation and I think although we are currently steeply involved in automated cars, we have to imagine that the vehicles of tomorrow will not be anything like the automobiles of the past century. The twisting concrete highways that have been part of our landscape since the mid-century might soon be a thing of our collective past.
By Sierra Choi
Before I was born, my father had been travelling all around the world as part of the Air Force, and he had decided after flying over the sunny skies of California that it was the best place to raise a family. However, I've always had a love-and-hate relationship with California. I longed for snow and rainy days, I loved the the change in seasons; I loved how people who grew up under colder seasons tended to be more consistent and reliable, as opposed to the flighty nonsense of people who grow up under incessant sunshine. Growing up in the Bay Area, I remember spending all my time at Caffé Strada, hanging out with UC Berkeley students as a high school student and going to book readings with my favorite authors at Black Oak Books in Berkeley/Oakland (now closed), raves and festivals on the weekend, and hanging out with filmmakers in the Castro and the Mission; and it was a shock to me, when I moved away for university and learned that not everyone was so accepting of liberal values.
In San Francisco, gay couples holding hands is nothing out of the ordinary and openly accepted.
I was visiting another city at the town centre when there was a rather handsome gay couple walking down the street hand-in-hand; something that was normal in San Francisco, but apparently not in this particular city; and suddenly, someone on the other side of the street yelled out an expletive, not once but twice. I was shocked someone could do such a thing in open daylight, and I could sense that other people felt the same; but still no one did nor say anything, and the gay couple walked faster, trying to get out of the area. It was one of those moments where I felt someone should've said something but no one did. I wanted to say to the man who shouted those obscenities: "Hey you, what's wrong in your life that you have to hate on other people in love? People can love whomever they want!" But the moment passed, and we were all on our way, and I thought to myself that this is something that would've never happened in San Francisco.Everyone was so open in San Francisco. No one, even tourists, questioned the public affection of gay couples. It was perfectly natural. However, it was the first time I realised why gay couples chose to stay in the closet in other cities within the United States.
Vandals flipping smartcars in San Francisco, a widespread phenomenon.
However, there is also a dark side to San Francisco as well. The criminal gangs, the homelessness, the growing, unchecked elitism of many communities were pervasively destroying what San Francisco and Silicon Valley used to be. Although San Francisco has always been a melting pot of immigrants, much of the sense of community has been eroded by a sense of elitism; of reverence towards people with Stanford and MIT engineering degrees to assert their wealth and privilege. "Glassholes" became a common way of describing Googlers who walked around wearing Google Glass with their sense of entitlement. How dare anyone study anything outside of engineering and how stupid was it for anyone to be different? became part of the commonly heard dialogue. San Francisco and Silicon Valley's philosophy changed from innovation to ultimately becoming about uniformity, and perhaps even propagating greed and the advent of paper billionaires. San Francisco wasn't what it used to be, when I was hanging out with videobloggers and future YouTube stars changing the landscape of journalism in 2005, nor when we were just hanging out at local pubs and restaurants where a lot of the initial dialogues about the beginning of iconic new companies began. Something permeated the landscape after 2005, and San Francisco was no longer that place where innovation happened; much of the dialogue became more about fame and money, jumping from one job to another that offered the most benefits and stock options, and people no longer cared about creating long term value- rather it became more about following the ranks of popular people in the media, the necessity to become a billionaire before the age of 30.
Homeless people who had set up tents near the 101 Freeway near Division Street in San Francisco were forced to evacuate this area earlier in February of this year. Many homeless people have lost their homes due to the rising cost of housing in San Francisco.
As progressive as the San Francisco/ Bay Area/ Silicon Valley was in terms of liberal views, the pervasive attitude of "entitlement" overshadowed its previous successors: the pioneers who made San Francisco the left capital of the U.S.; instead it became a place where people who thought that poor and depressed people deserved to be poor and depressed because they didn't work hard enough to overcome their circumstances. San Francisco was no longer the centre nor place of innovation, where people supported each other in the development of ideas. The mentality of SF became that the weak and underprivileged should die; no one supported the underdog with disruptive ideas anymore. People who didn't support the same politics should have their car vandalised. People who were depressed should commit suicide and jump off buildings. It's "might-makes-right", it's a "dog-eat-dog" world. People who were disadvantaged- whether in psychology or economics should be left to suffer. Recently one of the lowest paid employees at Yelp wrote an open letter crying out for help and she had been subject to online public humiliation and was later fired by the Yelp CEO, Jeremy Stoppelman for simply writing about her economic woes. The San Francisco Bay Area was no longer the same home of my childhood; the sense of good will that used to be part of the population no longer existed in the same concentration.
Instead, that good will became replaced by a sense of entitlement, one that has been reiterated in popular Silicon Valley leaders; in the essays of Paul Graham, one of the founders of Y-Combinator, who has written that "economic inequality is good" a sentiment that is reminiscent of the "greed is good" mantra of the 1980s.
Paul Graham's mantra "economic inequality is good" is reminiscent of the "greed is good" mantra of the 1980s.
Paul Graham says that every city has a particular calling and that: "In Silicon Valley, no one is impressed if you inherited a billion dollars (whereas New Yorkers are)." I wonder though if Mr. Graham has ever spent time in Nob Hill, Pacific Heights or the Marina? Or perhaps even Atherton, CA? It appeared to me that San Francisco and Silicon Valley was just as obsessed with inherited wealth as anywhere else in the world, if not more so. However, I suppose being quarantined on Sand Hill Road, perhaps many people there would be even more impressed by self-made millionaires and billionaires, since the majority of the people in California with inherited wealth didn't dare traverse into Palo Alto anyway outside of the Stanford campus; however I think he unfairly paints New York City in a negative light when really many parts of the San Francisco Bay Area and Silicon Valley also have this pervasive view of something beyond elitism: hatred for their fellow humanity. Hatred for anyone who isn't an engineer working for unicorn companies.
Who really cares if a wounded U.S. veteran who did 4 tours in the Iraq War can no longer afford his house because his modest pension doesn't pay for the rising housing costs in SF? Who cares if many people are living in their cars or can't shower? They deserved to be homeless because they didn't study engineering and end up working for Google or Uber.
In my mind, the foremost question remained, How could a city that is home to the most number of American billionaires allow so much of their population to exist in poverty and homelessness?
Don't get me wrong. I love so many things about San Francisco, and the education I had received in the Bay Area. I could not have had a more liberal, experimental and oftentimes, surreal education. My high school wasn't anything extraordinary- it was an ordinary American public high school filled with primarily middle class and working class students. One extraordinary thing about my high school was that there were no bullies at my school. We were strangely, a group of very progressive students who were accepting of everyone's individuality- even the girl in my biology class who told us in class one day that she had an extra chromosome which made her seem "more masculine" as we were studying the chapter on genetics. In our minds, this was perfectly normal; in the sense that everyone was "similar but different." We embraced our individuality. We weren't all born to become engineers and doctors nor forced to think so. My history teacher was also the first to tell me, "History books don't always tell the truth. Books are re-written by the victors." It was something that would've never occurred to my 15-year-old self, to question authority, yet my education there instilled in me, that very value: To forever question authority.
However, when I walk around San Francisco, and see so much homelessness, crime and despair, I can't help but wonder, Where did we go wrong?
So it was a surprise and pleasure to become acquainted with Doniece Sandoval, the Founder of LavaMe, one of the true pioneers of San Francisco.
Doniece Sandoval, Founder of LavaMae
Doniece is a San Francisco based entrepreneur who had come up with innovative strategies to help the homeless population in novel and creative ways. Doniece is also, the type of person whom you can never forget. She makes a permanent mark on you, and you can't but help but become influenced by her optimism and positivity. I have previously written about LavaMae here.
Doniece grew up in Texas, and her father had worked on the War on Poverty progamme under President Johnson's administration. Her mother had also always been involved in charitable organisations. When you first talk to Doniece, you have a feeling that she is someone who is both young-at-heart and an old-soul; she is wise and all-seeing. She is the type of person whom you can go to with all your problems, and she will say, "OK. Let's solve this."
So it's sort of a surprise when she tells me that she had always been self-conscious as a kid. She has always been tall and ethnically ambiguous looking, always aware of other people's perceptions and commentaries about her ethnicity (ie, Spanish/Native-American/Indian on her dad's side and French/Spanish on her mother's side).
LavaMae helps San Francisco residents who are homeless to have access to mobile showers and toilets.
One of the defining moments in her life was when her family had almost lost everything. Her father had been a risk-taker as an entrepreneur after his government service; however, like many families in California at the time of the real estate bubble, her family had fallen on hard times, and if it weren't for the help and financial intervention of her grandparents, Doniece tells me, they would've been homeless. So LavaMae is a startup that resonates closely with her heart. One of the powerful moments that she remembers is when she was taking a cab through the Tenderloin district in San Francisco, the cab driver turned to her and said,"Welcome to the Land of Broken Dreams."
It was then then Doniece realised that she had to do something. She was just one person, but she had to do something. She remembers talking to a young homeless girl one day and she had told Doniece that she would never be "clean"; that so much of identity and opportunity was due to the fact that one was "clean and presentable". Later, Doniece saw in the paper that old Muni buses were up for donation, and suddenly, the many interconnecting pieces in her mind's eye fit together in which she came up with the idea to transform these old buses into mobile shower stations for the homeless.
"They use buses for portable food trucks, why not showers?"
-Doniece Sandoval, Founder of LavaMae
At first people thought she was crazy, but she started an Indie-Go-Go campaign with her husband to raise funds and later, she spoke at New York's Toyota Mothers of Invention conference, and started receiving offers of donations from all sorts of patrons in the New York community. New York City has always had a long history of philanthropy and investment in the art community. In fact, the single largest donor of LavaMae comes not from San Francisco, but New York City.
Doniece Sandoval was one of the speakers at the Toyota Mothers of Invention World Summit in New York City.
I asked Doniece, "Do you think it’s ironic that San Francisco is home to the most number of American billionaires and unicorn (billion+ valuation) companies, yet the city is plagued by such a high percentage of homeless people?"
Doniece laughs, an ironic sort of laugh that is bittersweet. Her laughter is akin to a Shakespearian character in a play in which there is no distinction between tragedy and comedy. She pauses for a moment and then tells me diplomatically that, "the level of compassion in San Francisco has eroded; hatespeak and vitriol of the political process had taken over, personified by Donald Trump." However, Doniece tells me that although, "There is a strong voice of hatred and level of apathy present here, there's also a lot of compassion and large/ small acts of kindness on a daily basis. Our volunteers/supporters for example give tremendously of themselves in many ways. There are everyday heroes throughout this city; they, thankfully, keep the spirit of SF's patron saint alive and well."
I have written previously that the rising cost of housing is actually the cause of many people to become homeless in many cities such as San Francisco and Seattle, and that many homeless people are actually women and children leaving abusive homes. I think because many of us only are aware of panhandlers on the street that we erroneously believe that that they are homeless due to being "lazy" or not being hardworking. Many homeless people also become homeless also due to being handicapped, are U.S. veterans and cannot live on their modest pensions, in addition to the majority of people who cannot live on minimum wage. It's not that the homeless are lazy, but that they have no other viable choices.
Doniece also tells me that a family of 4 making $75K/year was considered in the poverty range in San Francisco.
When you have a city with so many billionaires and multi-millionaires, $75K cannot afford you a living income for a family where the real estate was exploding into the millions for a simple 3-bedroom apartment.
Currently, Doniece is also furthering the goals of LavaMae with pilots of a new programme called, "Pop-Up Care Village" in which LavaMae will host quarterly services providing hygiene, development, veteran services, and free access to public defenders for people on the streets to get their lives back together.
"Homeless people often get citations, just for being on the street and being homeless," Doniece tells me. "When they acquire 23 citations, they can no longer be eligible to go to shelters or get a driver's license at the DMV. Our "Pop-Up Care" services will help them get access to a public defender that will remove all their citations so that they may get a clean slate to start a new life free from barriers."
In our conversation, I was altogether awestruck by the anthology of Doniece's wisdom, compassion, empathy and business sense. What is the advice you would give to social entrepreneurs? I asked her.
"Be authentic. Posturing never gets you anywhere...When you meet investors, show up as yourself; embrace your vulnerability, and bring that to the arena...and never be afraid to ask for help." -Doniece Sandoval, Founder of LavaMae on social entrepreneurship
By Sierra Choi