Attention Please! We Are Being Saved.

[OpenOcean held its inaugural Annual CEO Summit on 4 April 2017 in London (at a Modern Art Museum somewhere near Bankside… ) You can find a link to the Summit’s opening slides here.]

Back Story

I fell out of love with technology. There had been a time in the early eighties when I spent my weekends, nights and vacations enthralled with ‘the science’. So I leapt at the chance to participate in my first computer conference. Some genius had come up with a ‘multi-touch’ device. Not so much the elegance that is the smart phone, but instead five crude plastic buttons arranged in the shape of your hand, that was hard to learn and for which the purpose, outside of the thrill of a one-handed rebellion against the QWERTY keyboard, was entirely unclear. Technology for its own sake is pointless. Or just art. Or both.

My experience in subsequently building three software companies — Orchestream (ORCL), Tideway (BMC) and Automic (CA) — made clear to me that a ‘technology product edge’, even if coupled with customer traction, and maniacal market obsession still won’t cut it without a team of talented lunatics to conjure up the elusive alchemy at the heart of every successful startup. Indeed, technology’s positive power is greatest when it has become so normal it is boring (or ingrained in our limbic systems) to the point of invisibility. That’s when you know you are in Carlota Perez’s deployment age(*1) or — even better — one of Arthur C Clarke’s novels. The good news is that there is every evidence we are entering that phase with respect to the knowledge era.

The World is Dangerous, Volatile and Polarised…or Is it?

However, if you tune in to what is currently being trumpeted across social media and the news, we should be afraid — very afraid. The world is in crisis.

There is global ‘carnage’. Populism provoked by nationalist groups and stirred by shady self-interest heralds the end-times. Despite Alexander Nix of Cambridge Analytica assailing me with all those personalised messages and notifications, he still wouldn’t reply to my emails to join us at our inaugural OpenOcean Annual CEO Summit and explain himself. And there is a crisis: in capitalism, in the media, in democracy. Human development has thrived on crises for many tens or indeed thousands of millennia (some argue this cycle is actually how our brain was triggered to outstrip those of our ape cousins). We actually need them.

However, we need to take a moment and consider the truth.

The world is, in most ways, a better place now than it ever was (since the pre-agricultural ‘garden of Eden’ at least). Notwithstanding a growing disparity in income, the data shows greater levels of education, literacy, democracy and vaccination and less poverty, child mortality and violence. So society hasn’t quite collapsed — on the contrary, as a species we ain’t doing bad at all.

A Very Human Technology Revolution

The driving force behind this is technology. Since the agricultural revolution 10,000 years ago the world’s population has surged 10x up to the ‘dark ages’, then 10x again up until the industrial revolution and around 10x again the last 200 years. Our challenge as a species has shifted from obtaining food(*2), to battling for land, drilling for oil, to saving capital, to securing people’s attention… and perhaps in the future the scarcest resource will be physical and mental health. The Internet has now made possible real-time communication with pretty much anyone, anywhere in the world. The ‘decentralisation’ community is striving to make it possible for people or things to build and use new applications on an Internet of contracts, anytime, anywhere.

What’s more, it is knowledge-based technology that will help us solve the problems that remain and get ourselves back on an even keel. There are a commonly understood set of technology waves we track that constitute a bewildering array of increasingly inter-related technology that is almost too complicated to be useful: The New Interface (AR, VR, Voice, Gesture, Touch, Thought!); The 4th Industrial Revolution (Batteries, Renewables, Servers, Robots, Nano-devices; Drones; Autonomous Vehicles); Cloud Computing (Ubiquitous, Cheap CPU, GPU, Massive Storage, Hosting, DevOps; Quantum); Artificial Intelligence (Data Analytics, Machine Learning; Data-Driven Insight; Automation, Autonomy); Data Management (NoSQL; NewSQL; Multi-Modal; Decentralised; Database-as-a-Service); Biological (Gene Sequencing; Gene Treatment; Data-Driven Wellness and Health; Preventative). Attention is the new oil of the knowledge age and all of these technologies are fuelled by data, even the hardware is through design, test and analysis software. They fuel themselves through education — 60 million students in MOOCs; through innovation — 14 million Github users and rising; and through integration (or globalisation) — trade driving the promiscuity of ideas as it has for centuries.

It is the smart, sophisticated use of data, both to power impactful software products and also to inform super-scalable business models, that was the crucible in which OpenOcean as a partnership was forged. When we think about the way data and deep tech underpins the next phase of reinvention we come back to three areas:

Deep-Learning (Data generated is beginning to teach computers, increasingly cutting out humans, and even developing a new non-human form of creativity);

Decentralisation (*3)(entirely new protocol stacks that put power back into the hands of the individual and present the possibility of up-ending entire companies, industries and governments) and;

Developer-driven (*4) business models (thrilling software developers with your product and thereby short circuiting the centralised and top-down decision making drives better product and also allows the unseating of incumbents).

‘Delicious’ Software

The finest entrepreneurs embrace the incredible customer intimacy made possible by the Internet and put design first. They soak up the data from the use and distribution of their elegant products; refine, ‘rinse & repeat’ and ultimately cook up what we at OpenOcean have dubbed ‘Delicious Software’ (*5). What we mean by this is software that is going beyond ‘easy to download’, and becoming ‘easy to love’ — and actually makes your life easier every hour of every day. Or something close! Increasingly, the focus is on the incredibly powerful way that each new user enhances the delight of the other users in the network, making lasting adoption the number one priority for technology product managers.

The ‘Post Silicon Valley’ Age

At this year’s inaugural OpenOcean CEO Summit on 4 April, we gathered a host of Europe’s entrepreneurs, CEOs and academics to discuss how Europe — with its community of 6 million developers, that is actually larger than that of the US (*6), thousand year-old universities, and increasingly supportive governments and customers — is playing a very significant part in driving those changes.

The democratisation of technology means that Jack with a Mac or Michelle with a Dell sitting in pick-your-favourite-artisanal-coffee-shop, can create and grow a multi-million dollar business using Amazon Web Services, open source tools, organic marketing techniques and distribute its service via platforms like the App Store and get constant, granular feedback from their community using Segment, Mixpanel, Intercom, Drift or custom chatbots. Innovations like Slack, Whatsapp, Zoom and competition between EasyJet and Whizz play their part too, enabling distributed teams to collaborate as if they were all in the same room together. The wealth of tech talent in Europe is making an impact. Some might argue that the cream of the world’s tech brains are gathering in Europe and collaborating (in spite of Brexit) across a ‘tech-naissance’ of city states. In London, Paris, Berlin, Stockholm, Zurich, Amsterdam and Warsaw, a STEM education is now seen as key to success, startup science is cool and being a founder is ‘the new black’. Since 2000 there have been over 50 billion-dollar valuations for companies coming out of Europe, and all five of OpenOcean’s investments in our latest fund have been to support serial entrepreneurs.

Beyond Growth-Hacking to Scale-Hacking

The reality is that these results don’t happen just by shipping some ‘delicious software’ or even once data has been used to experiment with and successfully drive customer growth mechanics. These businesses need to be able to scale as organisations and expand and compete internationally in this increasingly ‘flat’ world. Here at OpenOcean we are drawing upon our own experiences in successfully scaling six software businesses over the last two decades to structure an approach for companies to achieve ‘escape velocity’. To promote integrated processes and teams, we have deliberately avoided typical functional distinctions of a startup and categorised 6 ‘secrets of scale-hacking’ (*7) as follows : Purpose & Play; Attract & Retain; Architect & Innovate; Package & Promote; Teach & Close; Measure & Manage. (More on this in a future series of posts.)

Industries Reimagined

When ‘delicious’ software, coupled with a data-informed approach to ‘scale-hacking’ is applied to areas more accustomed to seven year roll-out plans for ERP software and turgid user experiences, the results can be staggeringly impressive. Every year a handful of the S&P 500 fall by the wayside. In fact it is increasingly hard to make a distinction between successful tech and non-tech companies, for example Airbnb and Uber, neither of which are in the S&P — yet. Either way, pure technology companies might make up as much of half the S&P 500 within 20 years (*8). Across Healthtech; Financial Services: Mobility & Transport; Financial Services; Media & Entertainment; The Workplace; The IT Industry (itself). The knowledge age (like all technology ages) necessarily kicked off with a phase when it was applied a mile wide and an inch deep. So in fact (as the saying goes) the future is already here, just unevenly distributed — but the deployment age is now upon us and distribution platforms and network effects will mean the impact will now spread far, wide and fast.

Conclusion

We touched upon the post-truth world and fake news and the inequality and relative stagnation that has stirred the kraken of populism, but there are also positive repercussions. For instance, autonomous vehicles might make it possible to liberate 20% of urban land as suggested by Ben Evans in his thoughts on the second order consequences. However, now we are aware that the ‘ghost is in the machine’, we better be careful where it directs or distracts our attention since technology for its own sake is pointless — but technology directing its own self might turn out to be limitless and uncontrollable. What we need now is a step towards Yuval Harari’s ‘Homo Deus’: primed for continuous learning, open to internationalisation and geared for innovation.

Now we have better understood the recipe; we are pushing beyond the hype and crisis; and we realise it is up to all of us to balance the threat and promise of information technology. I spend my days encouraging folks from all countries, ages and backgrounds to embrace the entrepreneurial revolution; to craft delicious software solutions to the world’s pressing needs; and to scale for global success. It has been down to my own journey over the last twenty years, as well as the development of the knowledge age itself, and the road is yet long, but I am in love again.

[OpenOcean held its inaugural Annual CEO Summit on 4 April 2017 in London. You can find a link to the Summit’s opening slides here]

Footnotes:

(*1) Thank you Christina Frankopan for reminding me of the work of Carlotta Perez and to Fred Wilson and Chris Dixon for their venture capital context.

(*2) With thanks to Albert Wenger and his work on the ‘World After Capital’

(*3) OpenOcean’s analyst Max Mersch will kick off our series of posts on this topic in the coming days.

(*4) I cover elements of this in our ‘Developers as Kingmakers’ series

(*5, *7) Big thanks to my partners Tom Henriksson, Patrik Backman, and Ralf Wahlsten, as well as to Rod Banner for their work on defining the concepts.

(*6) According to IDC’s “2014 Worldwide Software Developer and ICT-Skilled Worker Estimates”

(*8) OpenOcean analysis