Schedule Worldwebforum 2018
We Europeans are easily frightened. That is why we call them frightful five: Apple, Alphabet / Google, Amazon, Facebook, and Microsoft are among the most powerful companies, today. How is it possible that five companies from the US West Coast were able to conquer the world? One reason is possibly the old world’s inability to adapt to a new business paradigm.
In 1989, General Motors, Ford Motor, Exxon Mobile, IBM and General Electric were the frightful five of their time. They did business in petroleum, combustion engines, IT hardware, and industrial goods. They dominated their industries, the US home market, and through a wide network of national companies, sales offices, and manufacturing sites a large part of the industrialized world.
What is the common bond between today’s frightful five? The answer seems simple: the breakthrough of IT and communications technology have enabled the rise of Apple, Google, Facebook, Amazon, and Microsoft. But the answer falls short.
The technological possibilities of web technology were at all times available to Europeans entrepreneurs, as well.
In Silicon Valley, almost 100% of the economic output originate from business models that align to new, future-oriented paradigms. Behind the frightful five, companies like Airbnb, Uber, or Palantir are at the ready to conquer world markets with their disruptive business models.
Technology is only an enabler of this development, the mindset behind these companies is more important. Truly disruptive entrepreneurs question everything that exists, they dismantle old structures, and they radically build new ones. They operate according to their own rules around the globe, and they like to break the shackles of state regulation. This makes for a much more inspiring day at work that administrating and optimizing a well-known business.
Combined with globalization, the second global megatrend since the fall of the Iron Curtain in 1989, this has led to a massive erosion of the nation-state. The mobility of capital and labor has softened national borders, and the Internet has broken them down.
Today, like-minded people have opportunities for self-organization that go beyond all dimensions previously thought possible. If workers – whether left or right – want to mobilize against globalization today, they can network in the largest de facto state. Via Facebook, they can contact up to 2 billion like-minded comrades-in-arms and organize the resistance against the elite. Entrepreneurs that embody the new business paradigm have teared down state-regulation, and operate according to their own rules on a global scale. Entrepreneurs like Elon Musk and Jeff Bezos go even further. Their plans with SpaceX and Blue Origin are on an interplanetary dimension. They want to go to Mars. The only nation-state in the world that has managed to resist these powers is China where the domineering technology giants are local and state-sponsored.
But China is the exception. Transnational action, which is at the heart of structures such as the European Union, is no longer a task for the state, but is nowadays increasingly pursued by private individuals. This is accompanied by the reversal of the crowding-out: government spending is increasingly being replaced by private investment. These are exciting times for entrepreneurs and managers alike.
Against this background, the Worldwebforum 2018 is dedicated to the topic “End of Nation”.
Federal Council Johannes Schneider-Ammann
Who will prevail? Nation-states with a claim to historical sovereignty that centrally concentrate power and define rigid rules? Alternatively, flexibly organized, future-oriented companies that operate on a decentralized basis and use the power of technology on a global or even interplanetary scale?
Of course, this is not a safe bet, and we do not know the answer. However, it seems clear that people with the right mindset for the new paradigm will be a creative force of destruction – or of disruption, as it is called today. These people operate outside today’s elite, they are bohemians like their ancestors: the hippies …what made the hippie movement tick? Being a hippie is not about chilling and smoking joints; it is about questioning everything present and building something new. And if taking an acid trip help, well, then things become interesting. Ultimately, everything in Silicon Valley is intertwined with hippie culture. 50 years ago, in California, they discovered a powerful means to get rid of old power structures: technology. They used electric guitars, synthetic drugs like LSD (not micro dosed), and of course the personal computer as powerful drivers of change.
Mark C. Thomson / Carissa Carter
Being an entrepreneur in this environment is difficult, as Mark C. Thomson will explain. He has advised Steve Jobs and Virgin founder Richard Branson as a personal coach in the fields of leadership, change and innovation. Because an entrepreneur always has to deal with limited resources. They have to make money in order to finance further growth or – even better – new ideas. A true entrepreneur successfully deals with two problems at the same time. He has to be a Swiss engineer and a Californian hippie at the same time. He drives efficiency in the running business, simultaneously he has to be effective in driving innovations. But how do we come up with new ideas?
What kind of mental process do we need to facilitate in order to be truly innovative? Do we really need to take LSD micro dose on a regular basis? According to Carissa Carter it is an easy process, all you have to do is follow five steps: Empathize, Define, Ideate, Prototype, Test. Following this design thinking process is easier said than done, as Carissa Carter knows from experience. She works at Stanford University’s D.School in the heart of the Silicon Valley and unleashes the creative ideas of students in order to develop the future university on experimental paths. The design thinking method may be completely counter-intuitive to a CEOs rationale. But once they put themselves into the customers skin, it becomes completely intuitive. It’s all about the mindset.
And with her mindset, Nancy Pfund, Managing Director of the venture capital fund DBL, has done more in the fight against climate change and for sustainable energy than any government subsidy program for electro-mobility and solar energy could ever have done. She invested her money in a guy who shared her mindset: Elon Musk. She has established a reputation as the venture investor for companies that also want to have a social impact. Pfund’s approach is called Double Bottom Line. This also reflects in the name of her company DBL, which has invested in SolarCity and Tesla.
DBL means that a company earns money (first bottom line) and makes a difference in the world (second bottom line). The second bottom line represents sustainable products, clean energy, but also the creation of jobs. With this profit-oriented business models, Pfund has helped to disrupted the traditional thinking of national or supranational agencies. Investing into the right mindset brings you much further that attending endless conferences about climate change and spending time with politicians.
Ray O’Farrell (VMware), Glenn Core (Amazon Web Services), Terry von Bibra (Alibaba Group)
Perhaps the best future strategy for entrepreneurs is to ignore state rules, to use the new technologies and to define their own rules. It is possible for companies to survive, if they set up their business in such a way that they can manage their daily business efficiently and at the same time adapt flexibly to new paradigms in the business world. Companies like Amazon, Alibaba, and VMware are truly disruptive, they successfully use the power of technology to the full extent, and therefore are admired for their success. But in Europe they are increasingly being fought against by populist politicians. They are trying to relieve their voters from the fear of losing jobs and status. They want their manufacturing industries back, where we walk into the factory every morning and to the same work every day, every week, every year. However, the politicians are reaching their limit because the political instruments that were invented during industrialization are no longer effective.
Subsidized real estate for factories, tax breaks for companies, flexible labor law: in the past, governments competed for company with these means. They were able to tie-down entrepreneurs for long periods of time, because companies used to build factories and infrastructure for factory workers. Today, companies are hyper-flexible, virtually organized, and CEOs are not interested in the local legal framework at all, because they act according to their own standards, as Ray O’Farrell, Virtualizer of the Data Center at VMware, Glenn Gore, Chief Architect of Amazon Web Services, and Terry von Bibra, General Manager Europe of Alibaba Group will discuss.
In their field they strive to do what Apple did with the original iTunes store: Steve Jobs disrupted music, an industry that was perfect in maximizing profit in an old paradigm – sell music in a physical form -, but proved to be completely unable to adapt to the new digital world. They tried to destroy MP3 with the same methods with which they fought against the audio tape four decades ago. That’s their mindset. Apple however expanded into other media, made billions from selling the matching media player, the iPod, and then disrupted everything with the iPhone. And once again, this was not about technology, it was about design and design thinking. The iPhone was the first smartphone that everybody was able to use. And then Steve Jobs transferred this user experience into physical shops: the iconic Apple Store with the Genius Bar. A bold move that many tech companies have tried to copy since. Even we are thinking about a Worldwebforum store.
Wilhelm Oehl and his design studio Eight Inc. have collaborated with Apple for the revolutionary new store concept. While computer shops used to offer a musty customer experience in basement style rooms that only hardcore nerds voluntarily visited, Oehl created the real counterpart to the Apple digital store for Steve Jobs: a cool, thoroughly designed world of steel and glass in which fans immediately recognize the Apple digital experience, like to linger around, check out products – and buy them. Today even Amazon, the only major player that survived the burst the original internet bubble, is expanding into physical stores.
Dirk Klee (UBS Wealth Management) / Sam Rosenblum (Coinbase)
What does this mean for Swiss entrepreneurs and their companies? Dirk Klee has to find an answer for one of the most Swiss and biggest companies of them all: He is leader of digital strategy of UBS Wealth Management, and his company has been deemed “too big to fail”. He will discuss the future of money with Sam Rosenblum, leader business development of Coinbase, the world’s largest Bitcoin investor. Bitcoin right now is the ultimate nightmare for Swiss bankers. The cryptocurrency Bitcoin and the underlying block-chain technology could render the entire financial system, including the central bank system, obsolete. In a block-chain, counterparties can execute their transactions transparently and securely within a decentralized network. Confidence, which is central to conventionally executed financial transactions, and which is guaranteed by intermediaries such as banks or the state, is therefore becoming less important.
Representatives of the old financial world claim that Bitcoin is still far too volatile and in no way suited, to replace the fiat money that states issue through their central banks. The critics like the Swiss central bank may be right today, but they should be careful not to underestimate the network effect: If the number of users of a cryptocurrency has reached a critical threshold, the new means of payment becomes interesting and lucrative for others due to the network effect. As a result, the market share of a cryptocurrency increases dramatically. Once this happens, there are many areas of application: thanks to Blockchain, contract law, accounting and even e-voting solutions could soon be withdrawn from state regulation and become a business for private individuals. It’s not only bankers should have nightmares about Blockchain.
In the area of defense, too, the state’s influence is waning, as the fight against cyber-terrorism and cyber-crime shows. In Switzerland for example national cyber-security lies in the hands of a winegrower. That’s the business our minister of defense used to work in. Which well-managed company would put the protection, monitoring and rescue of its critical IT infrastructure in the hands of a government agency?
Private cyber-security companies are more expensive, but they are also much faster and more effective, as Ed Brown, General Counsel of Malwarebytes, will explain at the Worldwebforum. Competition between companies makes much better use of the advantages of decentralized problem localization, customized problem solving, distributed intelligence and responsibility. It is doubtful that a race between nation-states competing for the title of the most cyber-safe territory will produce similarly good results. Winegrower or high-tech-entrepreneur – which do you choose?
Jerome Engel (Berkley), Charles O’Reilly (Stanford), David J. Teece (Berkeley)
Essentially, the main task of an entrepreneur is to set up his business in such a manner that it can simultaneously handle the daily business efficiently and flexibly adapt to changes in the environment on the company. In research, this is called ambidextrous organization. Setting up an ambidextrous organization is no easy task. At the Worldwebforum 2018, Jerome Engel of Berkley University and Charles O’Reilly of Stanford University, two leading experts in this area of research. Together with David J. Teece of Berkley University, they will show how Swiss force of implementation force can be paired with Californian-style inventiveness.
It is a coincidence that Silicon Valley, a few dozen kilometers of land, has for several decades in a row produced one entrepreneurial success story after another? Of course not, it’s about the mindset and two drivers: To put it simply, the Silicon Valley innovation engine has two drivers: serial entrepreneurs who set up one company after another, and venture capitalists who finance one company after another.
These two drivers run almost synchronously. Firstly, because everyone is talking openly to everyone about their ideas. Secondly, because successful entrepreneurs become investors. Thirdly, because success has a strong magnetic effect. Silicon Valley attracts bright minds from all over the world. The proportion of foreigners in the population is over 30 percent, twice as high as the national average. Ambitious entrepreneurs from all over the world, especially from Asia, are moving to California. As long as the president does not prevent them from immigrating.
There is only one thing where Silicon Valley is better than producing success. In producing failure. You can talk about the secret of Silicon Valley, with whom you want to talk, you can hear something in every conversation: failure is good, learning better from failure, overcoming failure and having success is best. In Europe, we repeat this like a mantra, but we hesitate to follow up. If you fail as a entrepreneur in Switzerland, you become a social outcast. So why take the risk?
In Silicon Valley however the failure of an idea does not mean that the person who had the idea failed. Maybe the idea is not good enough, maybe the company’s organization is not right. Venture capitalists have no trouble financing an entrepreneur who had already driven one or more companies to the wall. The culture rewards taking risks. This starts in the Silicon Valley talent factory at Stanford University in Palo Alto. Students who study here are inoculated from the very first day that a career with Goldman Sachs, IBM or Procter & Gamble is the safe choice – but also the boring one. Outsiders like Steve Jobs and Bill Gates are considered role models. Becoming an entrepreneur, pursuing a vision and founding your own company at a young age is a cool choice.
You can find a real entrepreneur who has discovered a billion-dollar market, and yet it can go wrong if the execution fails. Execution is about the ability to assert oneself in competition, never to give a head start, never to lose sight of customers and sales. Silicon Valley is also unique in this respect. Throughout the world, engineers produce innovations, but nowhere else are they so consistently turned into money.
Five years ago, the Worldwebforum started in Zurich, as a punk rock alternative to the WEF in Davos. It gives you the opportunity to learn from visionary managers and inventors and let their thought inspire yourself. To be honest, this used to be a marketing gag, in order to sell more tickets. But hhis year we have a true rock-star among us who knows exactly how to release creative energies: Bruce Dickinson! With heavy metal band Iron Maiden he has sold 100 million albums, played over 2000 live concerts, and thanks to his unmistakable voice millions of fans around the globe affectionately call him «Air Raid Siren». What is Bruce Dickinson’s key to success? He does not focus on «customers» in the studio or on the stage, but always on «fans». «Customers are a bad thing», says Dickinson, «a customer has the choice, which product he buys». A fan however has no choice and remains faithful to his band, therefore turning it into a brand. Once you have a brand, you can sell the fans everything, for example beer. Iron Maiden has conquered British pubs with «Trooper» ale. «We only managed to do so, because we were involved in the development right from the start», says Dickinson, «just sticking an Iron Maiden logo on a beer is not enough.” Otherwise, fans will leave and turn into regular customers.
In Bruce Dickinson’s experience, the key to success – whether for catchy rock songs or for fine ale –works in any company. When he is not on the road, he founds companies, meets investors, suppliers, fans, and for appearance’s sake, he wears his hair unusually, considering he is a metal singer. Dickinson is a licensed pilot, he operates an aircraft maintenance company, he was involved in the development of a hybrid airship, and he operates a flight carrier at the Horn of Africa. «I have written rock songs all my life, developing a business idea is the same process», says Dickinson. «You start with an idea, daydream about the next steps, and let the whole thing become a reality during a structured process» – it’s a simple as that!