It might seem like Silicon Valley has settled into a middle age rhythm – Apple and Airbnb, Facebook and Google, Uber and Yahoo. Many of them visibly struggling with those all-too familiar signs of middle age – the effects of too much success, gaining weight and slowing down, iterating not innovating, less hungry and more predictable than in their early days.

I remember back in the 1990s working long hours with some of the most amazing software engineers in Silicon Valley, on concepts and with companies and software engineers who seemed like they had just discovered gold. Stanford’s Denny’s and Starbucks were buzzing with napkin plans and VC talk. It sounded like hype, but it seemed to work.

Staying at the Sunnyvale Hilton, having just got back from a morning run around the quiet neighbourhood, I watched as Steve Jobs breezed through the lobby, in jeans and leather jacket and one of those leather cross-body bags, with a casual hello to some friends I presumed, and off to a meeting room, none of the celebrity ego or grandeur.

25 years later, Silicon Valley is still at the leading edge of the tech industry. But it’s different.

The Bay Area’s mature infrastructure, access to talented professionals, and strong engineering tradition make it a prime spot for driving innovation. Despite the high operational costs, it’s also a great place for startups that want to make a name for themselves with unique technological solutions in areas such as web app development or mobile app development.

It’s smart to keep up with the local startup scene because what happens in the Silicon Valley pretty much sets the tone for many other tech hubs scenes like New York or even Stockholm.

Here are 17 of the most promising startups in San Francisco and its Bay Area:

Blockchain

1. Ripe.io

Founder: Raja Ramachandran

Total funding amount: $2.4M

Ripe.io takes advantage of blockchain and the Internet of Things (IoT) to disrupt the area of digital food supply chain. Thanks to their technology, users get to learn more about the quality of their food, its origin, and many more things that help make an informed choice and become more aware as consumers. But that’s not the only benefit of the technology. Farmers can use it as well to automate internal processes and meet the current market demands for high-quality and sustainable produce. Ripe.io offers supply chain tracking and visibility, secure data aggregation and sharing, and a scaleable blockchain, sensor, and IoT integration.

2. Wyre

Founders: Ioannis Giannaros, Michael Dunworth

Total funding amount: $6.2M

Wyre wants to cause a revolution in the banking industry with its cutting-edge blockchain solutions. Founded in 2013, the startup uses proprietary blockchain technology to enable cross-border payments, reducing the time and expenses that usually come with banks and other financial institutions. Most of the time, banks take up to 3 days and charge 4-6% for international money transfers. Wyre allows completing transactions in less than six hours and charges less than 1%.

3. Instalocate

Founder: Ankur Jain

Total funding amount: Not stated

This blockchain startup from Silicon Valley provides a personalized assistant for busy travelers who want to take full control over their schedules. Instalocate is building a network of artificial intelligence (AI) assistants to help consumers manage their travels. By combining the power of machine learning, Internet of Moving Things and modern interfaces such as conversational UI and voice, the startup aims to reduce travel anxiety and make traveling more comfortable and pleasant. The Instalocate assistant tracks flights in real time predicts possible problems with user journeys and converts flight delays into ‘free’ money. The tool is now available as a chatbot inside Facebook Messenger.

Fintech

4. Sparkling Logic

Founders: Carlos Serrano Morales, Carole-Ann Matignon, Davorin Kuchan

Total funding amount: Not stated

Sparkling Logic helps organizations make smart business decisions using machine learning, business rules, and decision analytics. Companies can extract maximum value from customer interactions through dynamic pricing. The application also includes risk management and compliance in the financial services industry to manage flash fraud for daily transactions. Sparkling Logic also uses IoT in the energy and utility industries to monitor equipment remotely through sensors.

5. Securitize

Founders: Carlos Domingo, Jamie Finn, Shay Finkelstein, Tal Elyashiv

Total funding amount: $12.8M

Securitize is a software platform companies can use to issue and manage digital securities (security tokens) such as distributions, dividends, and share buy-backs. The startup’s Digital Securities Protocol (DS Protocol) enables seamless and fully-compliant trading across multiple markets at the same time. Securitize is a leader in the security token space.

6. Charlie Finance

Founders: Ilian Georgiev, Ivo Parashkevov, Robert Luedeman

Total funding amount: $9M

This is a free, text-based penguin that helps consumers manage their finances efficiently. The tool continuously monitors your transactions and sends you an alert when you need to have a closer look at something. Charlie offers quality financial advice that doesn’t scare users with details and complexities, instead offering simple and actionable tips.

AI

7. Nanonets

Founders: Prathamesh Juvatkar, Sarthak Jain

Total funding amount: $120K

This is a SaaS product and machine learning API that helps developers in building machine learning models for all kinds of solutions, including web app development. Software engineers who need to develop a model for identifying objects from sets can benefit a lot from Nanonets technology. The tool helps to increase the adoption of machine learning technology among businesses.

8. Amitree

Founders: Jonathan Aizen, Paul Knegten

Total funding amount: $19.5M

This tool uses artificial intelligence and machine learning to automate and optimize the real estate industry. Among others, the company released an intelligent assistant for real estate transactions called Folio – it automatically organizes essential transaction details for real estate agents.

9. EdCast

Founder: Karl Mehta

Total funding amount: $66.2M

This award-winning platform is used by Fortune 500 companies and government organizations all over the world to solve problems around the discovery, curation, and recommendation of content across external, internal, and tacit knowledge sources. The solution includes a Learning Experience Platform (LXP), SalesU sales enablement suite, and GuideMe, a multi-language in-app content authoring tool.

Big Data

10. AtScale

Founders: David P. Mariani, James Lai, Matthew Baird, Sarah Gerweck

Total funding amount: $95M

A giant among the Bay area startups, this data warehouse virtualization platform connects Business Intelligence tools to data platforms to enable smooth data migration without disrupting business users. It also helps to accelerate business analysis and define business metrics in one place to deliver consistent operational reporting.

11. Mattermark

Founders: Andy Sparks, Danielle Morrill, Kevin Morrill

Total funding amount: $17.2M

This is a robust data platform that is on its way to becoming the go-to software for venture capitalists and angel investors. It helps to quantify signals of growing startups that may be potentially lucrative. A great tool for anyone interested in investing in budding startups that dare to disrupt their industries. An excellent example of web application development with a purpose.

Health

12. Biomarker

Founder: Garrett Ruhland

Total funding amount: Not stated

Biomarker offers its users with real-time, data-driven access to health supplements. It measures symptoms, health metrics, and other contextual information to match consumers with the right nutritional supplements. Biomarker also measures how users respond to supplements to produce meaningful insights about their quality.

13. Nurx

Founders: Hans Gangeskar and Dr. Edvard Engesaeth

Total funding amount: $41.4M

This inspiring startup aims to improve women’s access to birth control via an easy-to-use application where they can order prescriptions and have it delivered right to their doorstep. For users with health insurance, birth control is provided free of charge. Those without health insurance can benefit from plans that start at $15 per month.

14. Spring Discovery

Founder: Ben Kamens

Total funding amount: $22.3M

Spring Discovery wants to discover new therapies for aging. By targeting the processes of aging itself, the startup aims to uncover new therapies for the diseases of old age such as cardiovascular to neurodegenerative disease. Their machine learning platform accelerates experimentation for discovering such therapies to have consumers live long and healthy.

Biotech

15. Biome Makers

Founders: Adrian Ferrero, Alberto Acedo

Total funding amount: $2.3M

Biome Makers is a biotech startup that specializes in everything there is to know about the microbiome. They use DNA sequencing technologies and proprietary Intelligent Computing systems to help users improve agricultural production and the quality of their products, reducing their reliance on chemicals and the impact of diseases.

16. ImpactVision

Founders: Abi Ramanan, Gustav Nipe

Total funding amount: $1.4M

This startup aims to build a more transparent and secure global food system through with the help of hyperspectral technology that combines the power of digital imaging with ‘spectroscopy’, a chemical technique. Users take a picture of the food and can understand its composition like nutritional content, level of freshness, proteins, fats, sugar, and moisture levels. It’s a non-invasive mechanism for assessing food quality during the production process, in real time.

17. Notable Labs

Founders: Matt De Silva, Pete Quinzio

Total funding amount: $20.9M

Notable Labs is a drug testing service that aims to help oncologists identify the most appropriate treatment options for people with blood cancers. When De Silva’s father was diagnosed with brain cancer, he set out to revolutionize the way blood cancers are treated today with his venture. Doctors send collected a blood or bone marrow sample to Notable Labs which chooses a panel of FDA-approved drugs that have published anti-cancer effects, taking into account the patient’s diagnosis. The service then tests thousands of drug combinations on the sample and delivers a report of the results to the physician within just a few days.

In January 2018 China’s president, Xi Jinping made one of his frequent televised speeches on how his nation seeks to compete in a rapidly changing world order.

The rhetoric was normal, for a communist leader, however what stood out more, were two books about artificial intelligence on a bookshelf behind him.

Why are those books there? Maybe a bit like in 2015, when Russia “accidentally” aired designs for a new weapon, the books may not have been an accident.

The message was significant. For decades, China has been operating in an American-dominated world. To escape, China is turning to AI.

China’s AI Revolution

By 2030, China wants to be the world’s leading AI power, with an AI industry valued at $150 billion. How does China plan to achieve this?

Take healthcare. Ping An, a large Chinese conglomerate, has unveiled AI doctors. It has launched clinics known as “One-Minute Clinics” where AI doctors diagnose symptoms and propose medications. Within three years, Ping An plans to build hundreds of thousands of these clinics across China.

Could China export 10,000 AI doctors to Russia? Such a move would transform geopolitics.

The biggest impact is that it would shift the China-Russia relationship, from energy and currency, areas that the Amercans can influence, to Chinese AI, over which the USA has no control. The AI doctors may make Russian society more China-centric, and future generations in Russia may be more familiar with Ping An than with IBM or Intel.

Geopolitical and AI

How does this affect geopolitics, and the influence of nations?

First, labour movements, which have long been a variable of geopolitics (eg H1B tensions between the US and India, or treatment of Filipino maids in Middle East), would now revolve around the movements (and restrictions) of Chinese AI.

Second, China may, for the first time, create an ecosystem that the rest of the world depends on. The AI doctors may need to be programmed with local Russian regulations or health care rules, and Russian start-ups could emerge to fill this gap, or even to expand the role these AI doctors play. These Russian companies will be depending on a Chinese ecosystem, the same way American companies like Uber and Lyft depend on American ecosystems like app stores.

Lastly, the huge amounts of data that the AI doctors will be collecting could be used by China to help its businesses. Chinese pharmaceutical companies, for example, could know about a virus that is emerging in St. Petersburg, and they could quickly manufacture drugs to treat this virus. China would have insight into Russia in a way no other country has ever had, including the USA.

Technology makes geography irrelevant

Artificial intelligence is shifting the balance of power. While technologies like machine learning speed up the pace of the technological revolution and are on their way to fundamentally transforming life.

It has been said that a nation’s technological trajectory over the years has been determined by its geography and existing infrastructure in geospace. This is changing rapidly and being replaced by digital infrastructure, digital data and the rapidly evolving AI infrastructure, forcing us to re-evaluate whether geography still plays any relevant role in a nation’s trajectory.

As we see across nations, only a few countries have some sort of AI strategy (Australia, Canada, China, Denmark, EU Commission, Finland, France, Germany, India, Italy, Japan, Kenya, Malaysia, Mexico, New Zealand, Nordic-Baltic Region, Poland, Russia, Singapore, South Korea, Sweden, Taiwan, Tunisia, UAE, United Kingdom and the United States).

What about the remaining nations? What are the determining factors of when and whether a nation will adopt AI and how it will change their strategic course? Do they lack digital infrastructure, thought leadership, human resources, capital availability, education systems, social acceptance and a vision for the progress and development of AI for their respective nations?

Rising Stars of an AI World

Established metrics such as gross domestic product (GDP) can tell you at a glance which are the world’s largest economies. But, according to a new report by Tortoise Intelligence, they won’t tell you which ones are most likely to succeed in a new AI-driven world.

That prize is likely to go to the country, or countries, that are making the right strategic investments now. Those investments are focused on equipping their citizens, businesses and institutions with the tools, technology and training needed for AI.

The traditional champions are countries such as Canada, France, Germany and the UK. These are well-established, developed economies that have made good progress on AI. They’re determined not to miss out, but they will never compete with the two superpowers, USA and China.

The rising stars are an even more interesting collection. They won’t be found in the Top 10 of economies based on GDP. But they have a solid talent base and are demonstrating excellence in research. Singapore, Israel, Ireland and Finland are all in this group, along with Australia, Denmark and Switzerland.

These countries are likely to remain middle-ranking AI economies, but for some smaller nations like those in the Nordics, this could be an opportunity to leapfrog to a much higher spot in the global power league.

For some countries, there are infrastructure challenges that need to be addressed before a serious conversation can be had about their ability to take advantage of AI. These nascent economies – such as Kenya, Sri Lanka, Nigeria, Egypt and Pakistan – could be left further behind, or maybe a nation like China will fund their infrastructure in return for increased influence.

Perhaps the most interesting countries are those like India and the UAE, who have woken up to the opportunities of AI.

India has a large, well-educated middle class that is very tech-savvy, not to mention several multinational technology businesses. Building on those foundations means India’s AI prowess is likely to grow rapidly. While the UAE is the only country in the world to have both a national AI strategy and appointed an AI minister.

In an exclusive extract from my forthcoming book Business Recoded, meet one of the most inspiring business leaders, shaking up today’s world. She embraces the opportunities of relentless change, the power of disruptive technologies, and the courage to create a better future in their own vision. In the book, I explore the stories of many of the world’s most fascinating leaders right now, and develop 49 codes that help you redefine the future of your business, and yourself.

The Leadership Code of Tan Le

The Vietnamese boat refugee who found a new beginning in Australia, qualifying as a lawyer, then creating Emotiv, a world-leading neurotechnology company.

Tan Le was only 4 years old when she fled Vietnam with her mother and sister, crowded on board a fishing boat with 162 other people, in search of a better life. It was a difficult choice, leaving her father behind and heading out to the uncertain seas.

For 5 days they sailed, and then after losing power, drifted across the South China Sea. She remembers the long dark nights and rough seas, and everyone becoming desperate once food and water ran out.

Fortune came in the shape of a British oil tanker, which offered to rescue them. After 3 months in a refugee camp, the family were offered a flight to Australia. As the plane flew across the unknown country, she was struck by the huge emptiness of the land, and later reflected on it as symbolising the new opportunities which she could never have imagined. On landing, her mother told her to kiss the ground, as this was a special place.

At 8 years old, her mum says she was a dreamer, and particularly liked to pretend she had the power of telepathy, as inspired by a movie she had seen. In reality, she called herself a curious nerd, desperate to work hard and seize her opportunity. At the same time she was very conscious about being different – her looks, her accent, her background.

Then when she was 20, she won Young Australian of the Year for her work in helping other immigrants to settle locally, to learn the English language, and to find jobs. She was astonished that somebody like her could win such an award. It was the moment that really opened her mind.

She started to look beyond her mum’s dream of her becoming a doctor or lawyer. With a degree from Monash University she qualified as a lawyer, but quickly turned her attention to software engineering, exploring how brainwaves can control digital devices.

It was all about understanding the brain in context, and how it could be directed to do more productive work, to engage consumers more deeply with brands, to help people with disabilities. Her early work included the development of EEG (electroencephalography) headsets by which you can control a car, or drone, or game, with your mind.

“When the neurons in your brain interact, they emit electrical impulses, which we can then translate into patterns that become commands, by using machine learning” she explained in a recent interview with CNBC.

She founded Emotiv, a bio-informatics company. It was all about understanding the brain in context, and how it could be directed to do more productive work, to engage consumers more deeply with brands, to help people with disabilities.

Chosen to be part of the World Economic Forum’s Young Business Leaders in 2009, she sat at a dinner held in Buenos Aires with fellow participants. Opposite her sat a wheelchair-bound Brazilian called Rodrigo Hübner Mendes. He introduced himself as a Formula One racing car driver, who used a specially developed brain interface to control the vehicle.

Mendes explained how he would turn left by imagining eating tasty food, turn right by imagining he was riding a bike, and accelerate by imagining he had just scored a World Cup goal for Brazil. He explained how the technology for the car was developed by a small innovative company called Emotiv. She smiled, deeply moved by his story.

Today Emotiv is a world-leading in brain interface software, with technology that is cheaper than a gaming console, but has the ability to fundamentally disrupt and improve our lives. With offices around the world, Le spends much of her time in Hanoi, where her ground-breaking technology is being developed by young Vietnamese technologists.

Le reflects on her personal journey saying “Like my mum, I took a leap of faith into the world of technology, and particularly into a completely new area for which I had no qualifications or experience.”

She freely admits that she doesn’t have all the answers, with “I try to make the right choices, but you never know exactly where you are going, or if doing your best” but is also an infectious optimism “The future is not hear yet. We have the chance to create it, to co-create it.”

As for Mendes, he recently found himself at a conference in Dubai listening to world champion F1 driver Lewis Hamilton. When it came to questions at the end, Mendes’ hand immediately sprung up. He challenged the world champion to a race, using brainwave controlled cars. Hamilton, a lover of new technologies, accepted. The race awaits.

© Peter Fisk 2020. Business Recoded will be published in September 2020.

“Fightback” is the mission for any large corporation in a world increasingly disrupted by young start-up businesses.

Start-ups have become seen as the disruptors of markets – from Airbnb in accommodation to Netflix in entertainment – because they bring new propositions, underpinned by new business models, targeting niche audiences, or doing only specific parts of the traditional activity, but delivered in a faster, smarter and usually digitally-enabled way.

Yet large, established corporates could be argued to have many more advantages – familiar brands, large customer bases, huge resources, existing infrastructure, experienced leaders – if only they unlock them with more creativity and agility. They have tended to be more conservative, wedded to their physically-based, full-service solutions, and struggle to innovate.

Start-ups are the speedboats who can zoom around evolving markets, seize new opportunities, partner easily with others, and can adapt and evolve quickly. Corporates are the supertankers with power and scale, but find it hard to change direction.

Simon Torrence explains how he sees today’s markets, from the perspective of corporates and start-ups:

So how can corporates fight back?

The new book “Fightback”, co-authored by Simon, creates a blueprint to help corporate leaders to use the digital economy to their advantage by leveraging three powerful, but little understood, strategic tools

  • platform business models … corporate venturing with technology entrepreneurs through platforms is a proven and actionable proposition for new growth.
  • digital ventures … developing scalable solutions to some of the greatest challenges of the next few years and to collaborate with established organisations to create new ventures that will have enduring value
  • entrepreneurial skills … combining the power and expertise of long-established companies with the creative mindset and execution skills of tech entrepreneurs

It is a  playbook for corporate renewal in an age of digitalisation.

Good foods

Sweetgreen … Founded in 2007, sweetgreen is a fast-casual destination for fun, delicious food that’s both healthy for you and aligned with your values. They source local and organic ingredients from farmers they know and partners they trust, supporting our communities. “We exist to create experiences where passion and purpose come together.”

Blue Bottle Coffee … “In the late 1600s, the Turkish army swept across much of Eastern and Central Europe, arriving at Vienna in 1683. Besieged and desperate, the Viennese needed an emissary who could cross Turkish lines to get a message to nearby Polish troops. Franz George Kolshitsky, who spoke Turkish and Arabic, took on the assignment disguised in Turkish uniform.”

JUST… “We believe a just food system begins with breakfast. So we’re searching faster and further, working with rural farmers, Michelin-starred chefs and world-class product developers to find tools in the plant kingdom that will make our food tastier, healthier and more sustainable.”

Good Eggs … “Absurdly fresh groceries, delivered. The unbelievably simple way to feed your family well, all week long. Good Eggs is the unbelievably simple way to feed your family well, all week long. The very best of the Bay, and affordable staples you need, delivered today.”

https://www.youtube.com/watch?v=10zABIBzRRc

Ripple Foods … “Dairy free. As it should be. Ripple is a nutritious milk made from peas that is high in plant-based protein, low in sugar, and delicious. With eight times the protein of almond milk and half the sugar of milk, Ripple’s creamy, smooth flavor is perfect for people who believe nourishing the body is the first step to nourishing the soul.”

https://www.youtube.com/watch?v=5G4uoFOcYD8

Urban life

Outdoor Voices is an active lifestyle brand. We believe in freeing fitness from performance and embrace activity with ease, humor, and delight. We were founded on that tenet that Doing Things – moving your body and having fun with friends – outlasts a win when it comes to inspiring sustainable active lives. Its mission is to get people out there and Doing Things together, to redefine recreation as part of everyday life.

TaskRabbit … “TaskRabbit is the leading platform for getting your home projects done. Get connected to trusted and experienced help in your city. From furniture assembly and moving help, to painting and yard work. No home project is too big or small for the Taskers on the platform. Turn your home project dreams into a reality. Book a Tasker to get started.”

MakeSpace … “Join us as we transform the archaic $30 billion self-storage industry — and have tons of fun while doing it … Never visit a storage unit again. We pick up your stuff, haul it safely to storage, and bring it back whenever you want.”

Thumbtack … “is your destination for getting things done—from house painting to singing lessons to photography and more. How does it work? Simply answer a few questions about what you need done and in no time, you’ll receive up to five free quotes from qualified and available professionals in your area.”

Dandelion,

SOCAR

Healthcare

Opencare

WHOOP

Particle Health

Circle Medical

Finance

Kickstarter

Tala

Upstart

Tagomi

Spruce

Download: Business Model Innovation by Peter Fisk  

Today’s business world is no longer stable and predictable. It cannot simply evolve from the past and extrapolate into the future. Yet too managers hope that their old models will continue to work. They seek to replicate the success formula of the past, to continuously enhance and improve the status quo, and trust that their luck will continue into the future. We call this a fixed mindset. Instead they need to break free, with a growth mindset.

“The best way to predict the future is to create it” said Abraham Lincoln.

Markets are more crowded than ever before. Competition is intense, from across geographies and sectors, whilst customer aspirations are constantly fueled by new innovations and possibilities. Innovation is continuous and essential. Yet too much innovation is just improvement, keeping pace, not getting ahead. It is quickly imitated or redundant, the advantage is lost, and investment is squandered.

“This is the age of disruption … which is not simply about disruptive technologies, but dramatically changing how people think and behave” says Sebastian Thrun of Udacity.

New business models

New business models are the most effective way to transform organisations, to innovate the whole way in which the business works. Inspired by a new generation of businesses – Airbnb to Uber, Dollar Shave Club to Netflix – we see dramatically new business models in every market, through collaborative platforms, data analytics and personal recommendations, or subscription-based payments.

Airbnb makes money by helping you to make money out of your spare room, connecting host and guest, then taking a small fee from each. Nespresso makes great coffee, selling discounted machines, and then getting you to sign up to an everlasting and incredibly profitable direct revenue steam of coffee pods.

What if your business started leasing rather than selling, became part of the sharing economy? What if you simply facilitated an exchange between buyers and sellers and took a cut? How about moving to a subscription model, or a freemium model, or a referral model, or an advertising model?

We used to just think a business simply made things, and sold them. Now its much more complicated. Or rather, there are many more innovative ways to achieve success …

The term “Business Model” is over used and under defined. Business models explain how organisations work – how do they create value for customers, and in doing so how they create value for all other stakeholders. They can map the current business, or explore options for the future.

The approach originates from mapping “value networks” in the 1990s, understanding the systems across business and its partners through which value (both financial and non-financial) is created and exchanged – by who, how and for whom. I remember working with Pugh Roberts to create a multi-million dollar dynamic model for Mastercard which showed varying any one driver – such as interest rates, or branding – affected everything else. And thereby being able to test new ideas and optimise the model.

Business models represent the dynamic system through which a business creates and captures value, and how this can changed or optimised. They are a configuration of the building blocks of business, and their creative reconfiguration can be a significant innovation.

Business models became fundamental to business strategy, driven by them but often driving them. Hambrick and Fredrickson’s Strategy Diamond is all about aligning the organisation, achieving an economic logic between strategic choices. They help to align the business, matching the right strategies for outside and inside, using the proposition as the fulcrum, and profitability as the measure of success.

Business models can often appear very mechanical, lacking emotion and easy to imitate. In 2001 Patrick Staehler, in particular seeking to explain the new breed of digital businesses, created a business model “map” driven by the value proposition, enabled by the value architecture, creating economic value and sustained by cultural values. The last point here is most interesting, in that it captured the distinctive personality of a business, its leadership styles and ways of doing business. This is much harder to copy, and also sustains the other aspects.

Alex Osterwalder’s subsequent Business Model Canvas emerged as the most common template on which to map a business model. He popularised the approach so much so that his supersized canvas now features in workshops throughout the world, always with an array of multi coloured sticky notes as teams debate the best combination of solutions for each box. Whilst the canvas lacks the sophistication of value driver analysis and dynamic modelling, it is about testing hypothesise in each aspect, and how they could work together, and that respect works as a thinking model.

Business models have become a practical tool for rethinking the whole business, seeing the connections and then innovating the business. In fact they offer a great platform to facilitate new strategy and innovation thinking. That’s why we’ve created the Business Innovation Program, which combines design thinking, new business models and strategic implementation – a great way to engage your team, to think about new ways to grow, and to create the future, practically.

We explore at least 50 different business model templates which could transform your business. We start with the customer, to explore emergent needs and behaviours, shaping better propositions and solutions, then exploring how to deliver them commercially, and as engaging customer experiences.

Agenda

0900 – 1030: CHANGING WORLD

  • Making sense of today’s world, the challenge and opportunity of relentless change
  • The future isn’t like it used to be, so we can’t keep doing what we used to do
  • 100 companies changing the world right now. What can you learn from them?
  • Start with a future mindset, jump ahead, look forwards not backwards
  • Going beyond limits, how will you be the change, how will you achieve more?
  • Growth strategies – innovation beyond products, technology, and creativity

1100 – 1230: INNOVATIVE BUSINESSES

  • Starting from the future back – create the future you want, then work backwards
  • Working from the outside in – rethinking solutions through customer eyes
  • 10 types of innovation – products and services to business models and experiences
  • Ecosystems, from make or buy, to partner and connect, platforms and communities
  • Innovation multipliers – accelerate ideas further and faster to accelerate growth
  • Creating a growth factory – portfolios, self-tuning and the invincible company

1230 – 1400: STRATEGIC INNOVATION

  • Business models – emergence of business models, 50 models to adapt and apply
  • Linking business models to strategy, business plans and organisation design
  • Rethinking your business model – what is it, and not – and different ways to define it
  • Mapping existing business model – simplifying how your business actually works
  • Innovating new business models – rethinking how your business could work better
  • Developing a business model portfolio – creating the invincible business

1530 – 1700: NEW BUSINESS MODELS

  • Innovation in your sector – how are others innovating, what are the new models?
  • Rethinking products and services – what would deliver the proposition better?
  • Rethinking channels and brands – how to build more inspiring connections?
  • Rethinking revenues and pricing – exploring alternative ways to make money?
  • Rethinking assets and resources – how to use what you have better?
  • Rethinking activities and partners – what do to do yourself, and by others?

1700 – 1830: DESIGNING YOUR FUTURE BUSINESS

  • Your products and services – what would deliver your proposition better?
  • Your channels and brands – how to build more inspiring connections?
  • Your revenues and pricing – exploring alternative ways to make money?
  • Your assets and resources – how could you use what you have better?
  • Your activities and partners – what do you need to do yourself?
  • How would you change Endesa’s business model? Where will you start?

Mark Thomas, a fantastic economic thinker, and a former colleague, wrote a great new book last year 99%: Mass Impoverishment and How We Can End It … Martin Wolf at the Financial Times said it was one of the best books of the year, saying:

“A call to arms, this book makes three main arguments. First, the middle class is under extreme pressure and may vanish. Second, many of the constraints on purposive action in response, such as presumed fiscal limits or the view that taxes should never be raised, are myths. Finally, the needed reset is possible without revolutionary change. We can ensure a growing economy from which everybody benefits. The time for assessing such arguments has now arrived. They matter.”

In recent months we’ve heard much, from Larry Fink at BlackRock calling in his Annual Letter CEOs for a new approach to finance, from World Economic Forum presiding over what they called “the funeral of shareholder value” in Davos, and the Business Roundtable in USA, demanding a fairer approach to all stakeholders.

Below, Mark offers his own view, in a recent seminar and article:

How to Fix Capitalism

Even The Economist, that bastion of free markets acknowledges that today’s capitalism has problems.

But opinions differ widely on the nature of the solution to those problems: some think that capitalism is such a negative force that it should be replaced completely; The Economist thinks that we just need more competition; and many CEOs think that the answer is to abandon the primacy of shareholders and ask businesses to look after the interests of all stakeholders.

The 99% organisation has a different answer: clean, competitive markets.

Real-World Capitalism vs the Story

The story of capitalism is compelling: where there is a need in society, there is a business opportunity. An entrepreneur can seize this opportunity by providing a product or service to meet the need. In producing this product or service, he or she will consume other products and services, raw materials and labour, and their costs to him or her, being set at market prices, will reflect their values for alternative uses.

If, after meeting these costs, the entrepreneur makes a profit, this means that he or she has found a higher-value use for the products and services consumed and simultaneously created value for himself and for society as a whole. In this way, enlightened self-interest automatically increases the benefit for society as a whole.

In this ideal story of capitalism, making profit is synonymous with working for the greater good. And any interference, for example by government, with profit-making will necessarily reduce the public good. It is on the basis of this story that many people say they believe in free markets.

Unfortunately, as a matter of real-world observation, making profit is not always synonymous with working for the greater good. When a tobacco company grows its profits by selling more cigarettes, it is not clear that this is for the greater good. When a company boosts profits by paying below a living wage – and gets the taxpayer to top up the difference – it is not clear that this is for the greater good. When a company is loaded up with debt, pays huge dividends and then goes bankrupt leaving employees, suppliers and the taxpayer out of pocket, it is not clear that this is for the greater good.

The failure of British Home Stores in 2016 is a case in point. The Conservative MP David Davis described it as: “… the dark side of capitalism: increased borrowing and payment of ever bigger dividends; risk transferred from the private to the public when the business fails; [with] the low-paid and the taxpayer left to pick up the bill.”

In brief, the story is as follows. In the year 2000, Philip Green, who was subsequently knighted for his services to retail, bought BHS for £200 million on behalf of his wife, Tina, who was resident in Monaco – a jurisdiction well-known for its low tax rates. Philip Green then argued that the business was worth more than he paid for it and wrote-back around £100 million of negative goodwill through the profit and loss account, thus making BHS appear surprisingly profitable. On the basis of this profitability, he was able to load the business with debt and to extract large dividends, rental payments and interest on loans estimated by the Financial Times at around £1.2 billion, before he sold BHS for just £1 in 2015, when the business ran into trouble.

Around a year later, BHS filed for administration, putting the jobs of its 11,000 employees at risk. At the time of Philip Green’s purchase, the BHS pension plan was in surplus (£17 million surplus in 2002); at the time of BHS’s failure, the plan had a deficit of £571 million.

As Davis commented: “The BHS story is a case study in many unpopular aspects of modern capitalism: exploitation of limited liability, loophole-ridden tax law and intricate accountancy.”

Sadly, this is not an isolated example of capitalism failing to follow the ideal. The Global Financial Crisis was precipitated by subprime mortgage-lending in the United States that caused losses to the US banking system estimated at almost US$1 trillion – very roughly equivalent to one year’s profits from all US quoted companies – and additional losses to the banking system around the world.

To achieve US$1 trillion of losses is a remarkable achievement: if we assume that the loss on each bad loan averaged US$100,000, then it would require 10 million bad loans to generate US$1 trillion of losses. This is industrial-scale bad lending – a system gone wrong; and its global impact has been devastating and is still being felt.

The financial system is still not fixed: banks have continued to behave unethically as shown by the more recent LIBOR scandal, for which many have received significant fines. Indeed, fixing the system has proven problematic: in the UK, for example, the Independent Commission on Banking recommended a package of measures to keep the world safe from a recurrence of the Global Financial Crisis but its chairman, Sir John Vickers, subsequently became concerned that in the face of persistent and persuasive lobbying by banks, the Bank of England is in danger of watering down the Commission’s recommendations to the point of ineffectiveness.

Mervyn King, the former governor of the Bank of England, agrees. In his book, The End of Alchemy, he concludes that banks should hold at least 10 per cent of equity (the foundation of their risk buffer), as against 3–5 per cent, which is common today, and that the risk of a second Global Financial Crisis remains high until the system is fixed.

Nor is the problem limited to retailers and banks. The automotive industry is reeling from a series of disclosures relating to emissions, and many other sectors have their own scandals.

Why does all this happen? Are businesses run by psychopaths? Possibly some are, but there is a more systematic reason why such things tend to happen. Put very simply, the nature of market capitalism puts enormous pressure on those who run businesses.

The Root Cause: Externalisation

Corporate executives feel constantly under pressure to improve performance, and in particular to drive up reported profit. In practice, one of the easiest ways to do this is to externalize costs. Pollute without paying to clean up the pollution, pay below a living wage but still have living employees, avoid paying taxes, carry out transactions that look good in the short term (such as making unviable long-term loans). All these are ways of ensuring that reported profit is higher. Because of the possibility of externalizing costs, many of the levers available to corporate executives to improve profit are not synonymous with working for the greater public good. They are not even necessarily synonymous with working for the long-term benefit of their own shareholders.

Even worse, if there is a straight competition between two otherwise similar companies in the same sector and one of them aggressively externalizes its costs, it will be more profitable than its competitor. If the situation is allowed to continue, it will be able to take market share from its competitor and ultimately drive its competitor out of business. If externalization is widespread, the forces of competition will act to allow the bad to drive out the good – the precise opposite of the capitalist ideal. That is why, on its own, The Economist’ssolution will only exacerbate our problems.

Appendix IX provides a simple example of how this happens, and how companies that externalize their costs become an engine for mass impoverishment and for the destruction of the environment.

What about just being nicer?

In the US, the Business Round Table recently published a pledge by 181 CEOs of some of America’s top companies. The pledge said that they had developed a new definition of the “purpose of a corporation” that drops the traditional concept that corporations function first and foremost to serve their shareholders and maximize profits. The new purpose is all about investing in employees, delivering value to customers, dealing ethically with suppliers and supporting outside communities. Much more like The Story outlined above.

It sounds fantastic. But will it make a difference?

There have always been, in fact, many CEOs with high ideals who do seek to make their businesses a force for good. In the UK, for example, The Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA) has for many years promoted Tomorrow’s Company, with the aim of encouraging businesses to manage in the interests of all their stakeholders and society, and for the long-term. And many businesses signed up.

They have found it an uphill struggle:

“There are emerging trends in British business that we cannot ignore. Despite considerable success in many areas, companies in the UK suffer from under-investment, low productivity, low real wage growth, employees that are demotivated and disconnected from management and diminishing public support. The irony is that the returns to shareholders have also been poor. The good news is that an alternative business approach already exists. Instead of the current focus on short-term incentives, targets and profit, it focuses on purpose, values, relationships and the long-term.

We recognize that this is easier said than done and short-term pressure is formidable. However, twenty years of convening companies, investors and policy-makers has proven to us that change can be achieved when the business and investor community work together to achieve a common goal.”

After twenty years’ campaigning, they have found that CEOs are under such pressure to deliver short-term performance that other considerations too often become secondary.

So what will work?

Creating Clean, Competitive Markets

Creating a market in which externalization is not widespread is a vital role for government. In free markets, the bad will drive out the good; in clean, competitive markets the good will drive out the bad.

Regulation has a bad name and it is seen as interfering with businesses’ ability to generate profits. This interference is, however, essential if we are to have clean, competitive markets: without it, we will continue to see massive externalization of costs, which will have to be borne by society as a whole, and we will see good businesses systematically driven out by bad businesses.

All competitive sports employ referees to ensure fair play and to make sure that the best, rather than the most unscrupulous, competitors win. In many sports, there are strict and onerous regulations to prevent drug-taking. When these regulations are insufficient, as they were in cycling for many years, the distortion of competition can be dramatic – the Tour de France winners list shows a gap with no winner from 1995 to 2005, and there are several other years in which the original ‘winner’ was subsequently stripped of his title as a result of drug-taking.

The regulations that were subsequently introduced are indeed onerous and intrusive – but the only losers from them are the cheats. Honest cyclists now have a chance to win. It is the same in business: for capitalism to work for the benefit of society – to enable the RSA’s vision of Tomorrow’s Company to become a reality – there is a vital role for government (and the accounting profession) to play as a referee.

Arguing that business regulations represent unjustified interference in the ability of businessmen and women to make profit is like arguing that sporting regulations constitute an unjustified restriction on the ability of athletes to compete.

And once markets are clean, then The Economist’s argument becomes productive, rather than counter-productive. We need clean, competitive markets.

Ørsted, Denmark’s leading energy company, based in Fredericia, is ranked “the world’s most sustainable company” for 2020 by Corporate Knights’ Global 100 Index.

Ørsted has transformed itself in a decade from being a fossil fuel-based energy company into being a world leader in green energy and sustainable practices. 

Henrik Poulsen, CEO of Ørsted says “As the global leader in offshore wind, we’ve substantially grown our business while significantly reducing our carbon emissions. We have reduced our carbon emissions by 86%, and by 2025, we’ll be carbon neutral in our energy generation and operations. We also have a target of achieving a carbon neutral footprint by 2040.”

“Green energy is now cheaper than black energy. This is a real turning point, because green energy has become the economic choice. This gives the world a unique opportunity to take real action against climate change and create a world that runs entirely on green energy.” says Poulsen

Transforming an energy company the size of Ørsted has not been easy, but it was necessary. We made the decision to change our business based on the realisation that fossil fuels were neither environmentally nor financially sustainable. Our key drivers for combating climate change are:

Phase out coal 

Our business was initially based on fossil fuels, and we were one of the most coal-intensive energy companies in Europe. But we dismantled our fossil fuel business and now focus entirely on renewables. We’ll completely phase out the use of coal by 2023 and generate nearly 100% green energy by 2025.

Offshore wind energy 

We develop offshore wind, onshore wind, solar energy and storage solutions, and are the global leader in offshore wind. Through innovation and large-scale deployment of offshore wind technology, we’ve helped bring down the cost of offshore wind. Today, it’s cheaper than newly built coal- and gas-fired power plants in most parts of the world. It’s a game changer that has lifted the offshore wind industry from a niche to a global and rapidly growing industry with the potential to deliver green energy to hundreds of millions of people.

“While we’re proud and grateful to be ranked the most sustainable company in the world in 2020, we’re also painfully aware that the world must speed up green action to stay below the 1.5°C limit for global warming outlined in the Paris Agreement on climate change.

Countries and businesses must take active, ambitious steps to reduce their emissions and help the environment – and they must act now. We believe that our transformation is proof that change is possible. Join us in creating a world that runs entirely on green energy: https://go.orsted.com/Act-now”

Here is an extract from this year’s report, telling the Ørsted story:

A decade ago, offshore wind power was one of the costliest forms of electricity generation in the world, and even its leading exponent was dominated by fossil fuels – right down to its name.

DONG (Danish Oil and Natural Gas) may have opened what was then the world’s largest offshore wind farm in 2009, but the company was also widely acknowledged – and considered itself – as one of the best developers of coal-fired power plants. Since then, it has undergone one of the business world’s most radical transformations and got itself a new name, Ørsted – after the Danish physicist Hans Christian Ørsted, who discovered electromagnetism in 1820.

“In the past 10 years, we have transformed from a company that had fossil fuels at the core of its business to being essentially a pure-play renewable energy company,” says CEO Henrik Poulsen. “If you look at the transformation of the company, it has been dramatic.”

Asked why he thinks Ørsted topped the Global 100 ranking, he suggests that it could be “the sheer scale of the transformation and the speed – the fact that we have done all this within a decade.” “All this” is having reduced its CO2 emissions by more than 80% since 2006 and earning the title of the most sustainable company on the planet.

The company, which produced 85% of its energy a decade ago from fossil fuels and 15% from renewable energy, has reversed that proportion and has a target to “essentially become carbon neutral” by 2025.

“That was important in terms of being a purpose-driven company,” Poulsen adds, “but it is just as important that we managed to do this while demonstrating good shareholder-value creation and strong return on capital employed. Our return on capital is 300 to 400 basis points higher than the European average. Since Ørsted joined the stock market through the world’s second-biggest initial public offering of 2016, the company’s value has more than doubled to $US 40 billion.

“Running the company just for profit doesn’t make sense, but running it just for a bigger purpose is also not sustainable in the long term. Doing good and doing well must go together.”

The transformation has not been an easy one. “Over the past eight or nine years, we have been gradually disassembling the very core of the company and using the cash from that to accelerate the build-out of our leadership position in offshore wind. It has been a dramatic change. Some people have left when we divested, and others have been part of a huge growth journey.”

While the journey has been challenging at an operational level, the company was at least confident it was heading in the right direction. “We were helped by the underlying trends in society. We need to fundamentally change the global energy system from black to green energy. What we saw as an opportunity is now really required,” Poulsen says.

At the same time, the company can justifiably claim to have played a key role in turning offshore wind from an expensive, unviable but interesting technology to a central part of the mainstream energy mix. “Even five years ago, it was no more than a niche. Now it’s a significant part of the future green-energy system. It’s a transformation not just for our company, but a significant contributor to the broader green energy transformation.”

The industry has developed faster than even those involved thought possible, Poulsen points out. In 2013, the industry set a target of reducing costs for offshore wind by 35 to 40% by 2020, but that was achieved in 2016. “We thought 35 to 40% was an ambitious target, but costs fell much faster than we expected. When we set out to change a decade ago, we thought the transformation to green energy would be complete by 2040. But we will reach that 2040 target 20 years earlier than we originally envisioned.”

Given the scale and speed of its transition, Ørsted has become a poster child for the transition to a low-carbon economy, something that Poulsen embraces. “I hope we can be an inspiration to others, yes. Both in terms of the radical nature of our transition and the speed.”

“When you look at the challenge we face as a global community – to halve our emissions by 2030 even though we have not yet had a single year in which emissions have fallen – it’s clear that all companies must become more ambitious with their timeline for action,” he says. “Companies setting a 2050 target for emissions reductions need to reconsider whether they can do it faster and go further. What we have shown is that you can be much more radical than you might think.”

“The great miscalculation of the age is the idea that businesses have to make a choice: to become profitable, or become platforms for change. This is not the case” says Marc Benioff, CEO of Salesforce, in his book Trailblazer: The Power of Business as the Greatest Platform of Change.

His point of course is that brands are deeply embedded in the everyday lives of everyone of us. How we eat, drink, talk, connect, meet, travel, work, laugh and love. We are all consumers, seeking brands that we emotionally love and trust, products and services that we rationally need and desire, supported by business models and infrastructures that can engage audiences at huge scale.

Brands are increasingly investing in new technologies, from biotech to blockchain, to stand out from their competitors and make a bigger difference to the lives of their consumers.

This was a big theme at the Consumer Electronics Show (CES) in Las Vegas earlier this month, where once again this year many big-name brands were demonstrating their investment in innovation.

Technology with a bigger purpose.

Explaining the purpose behind Impossible Foods was Jessica Applegren, its vice-president of communications. She disccused the brand’s aims to eliminate the need for animals in the food system by 2035, replacing meat with plants using a key ingredient it developed itself called heme. At CES the company announced its latest product, Impossible Pork, and a continuing partnership with Burger King.

“Our intention is to give consumers exactly what they love about meat, but demand very little on their part,” she added. “If you are giving the consumer the same flavors, the same textures, the same pricepoint, the same health benefits and more as well as all the sustainability aspects as well, why wouldn’t you switch?”

“SAP is helping the world to become a better place because we see technology as an enabler,” said the company’s global chief marketing officer, Alicia Tillman. “There are so many companies that have a purpose and a mission and they are driven by values and want to lead by example,” she added before discussing some of the social good projects that SAP had undertaken recently around the world.

Also interviewed in this video by The Drum, about their tech innovations, were Michael Mauser, chief commercial officer for Harman; Fiona Berwick, strategic planning, global marketing for Asics and Jaideep Kibe, vice-president of Coca-Cola:

Nike has launched a new approach to sustainable innovation, building on its previous approaches known as Considered, and the circular economy.

John Hoke, Nike’s Chief Design Officer says “One of the most powerful things design can do for Nike, athletes and, frankly, the world, is play a role in creating a better future by making better choices that holistically and thoughtfully think through the complete design.

By considering everything around the design solution – how we source, how we make, how the product is used, how it’s returned, how it’s ultimately reimagined.

As designers, we are wired to be problem solvers. We get to think about designing ideas that have the highest performance impact possible. While simultaneously having the lowest environmental footprint or impact.”

The goal of Circularity: Guiding the Future of Design is to provide designers and product creators across the industry with a common language for circularity.

The guide was created in collaboration with the students and staff of Central Saint Martins, University of the Arts London and with inspiration from Global Fashion Agenda. It follows on the notion that the future of design is one of opportunity. Belief in that conviction is crucial to Nike’s design ethos, in which creating the future of sport is a fundamental cornerstone.

Over the years, Nike’s view to solving problems has broadened from one that considered just the intersection of athlete and product to one that views the entire athlete ecology holistically — which is where issues of sustainability become hugely important.

One example of sustainable design at Nike is new thinking of how to improve the material palette — proving that sustainability is not a constraint, but a catalyst for innovation. A platform like Flyleather is an example of creating a lower-impact and more-durable alternatives to old standards.

This is just one instance of how new technologies are helping the discovery of fresh perspective. While it promotes a head start, there is always the belief in opportunity to do things better. The aim is to create products that promote circularity — products that last longer and are designed with the end in mind.

“We have an obligation to consider the complete design solution, inclusive of how we source it, make it, use it, return it and, ultimately, how we reimagine it,” says Hoke.

Circularity: Guiding the Future of Design is built around 10 principles.

“These principles are starting points from which to tear down norms and reconsider the process of craft and design. The hope is that the workbook helps to inspire considered choices that will shift the world forwards” he adds.

Julia Barret, Trims Director, discusses Materials Choice, one of the key principles of circular design and part of Circularity:

Joanne Jorgensen, Director Materials Design Nike Knit, describes in this video Nike’s approach to Waste Avoidance, one of the key principles of circular design and part of Circularity:

Deborah Castel, Materials Design Manager Nike Kids, discusses New Business Models, one of the key principles of circular design and part of Circularity: