Extractive summaries of the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making | Week 220 |November 26-December 2, 2021
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Shaping Section : Ideas and forces shaping economies and industries
Adventure capitalism
The Economist | November 27, 2021
In the past five decades, the venture-capital (VC) industry has funded enterprising ideas that have gone on to transform global business and the world economy. Seven of the world’s ten largest firms were VC-backed. VC money has financed the companies behind search engines, iPhones, electric cars and mrna vaccines. Now capitalism’s dream machine is itself being scaled up and transformed, as an unprecedented $450bn of fresh cash floods into the VC scene.
The VC scene has its roots in the 1960s and has been a misfit in the financial world. In contrast to Wall Street’s suits, sophistication and Hamptons mansions, it prefers fleeces, nerdiness and Californian villas. Its distinctiveness is also a matter of intellectual emphasis. As mainstream finance has grown bigger, more quantitative and more preoccupied with slicing and dicing the cashflows of mature firms and assets, VC has remained a cottage industry that cuts against the grain, seeking to find and finance entrepreneurs who are too callow or strange to sit in a room with staid bankers, and ideas that are too novel for mbas to capture in financial models.
The results have been striking. Despite investing relatively modest amounts over the decades, America’s vc funds have seeded firms that are today worth at least $18trn of the total public market. As money pours in, VC is permeating the economy more deeply and broadly. What once was an American affair is now a global one, with 51% of deals by value in 2021 happening outside America.
The vc boom has so far focused on a narrow cohort of consumer-tech firms, such as Airbnb and Deliveroo. Now more cash may finance areas where disruption is less advanced. Obviously, there are dangers. One is that money corrupts. Soaring valuations and abundant capital can make firms and their backers self-indulgent. Another danger is that, as in any asset class, returns are diluted as money pours in. Yet what is humdrum for investors can still be good for the economy. The biggest prize would be more innovation.
3 key takeaways from the article
- In the past five decades, the venture-capital (VC) industry has funded enterprising ideas that have gone on to transform global business and the world economy.
- Now capitalism’s dream machine is itself being scaled up and transformed, as an unprecedented $450bn of fresh cash floods into the VC scene.
- This turbocharging of the venture world brings significant risks. But in the long run it also promises to make the industry more global, to funnel risk capital into a wider range of industries, and to make VC more accessible to ordinary investors. A larger pool of capital chasing a bigger universe of ideas will boost competition and is likely to boost innovation, leading to a more dynamic form of capitalism.
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Topics: Venture Capital, Startups, Global Economy
Mastercard Teams Up With Three Asian Crypto Companies To Launch Bitcoin Payment Cards
By Zinnia Lee | Forbes | November 09, 2021
Mastercard has partnered with three digital asset platforms in Asia to issue payment cards that will allow consumers in the region to convert bitcoin and other cryptocurrencies into fiat currencies. The partnership intends to introduce cryptocurrency-linked credit, debit and prepaid cards for both individuals and businesses across Asia Pacific. Cardholders will be able to instantly convert bitcoin and other digital currencies into fiat currencies, which can then be spent online or offline with any of the merchants that accept Mastercard payments.
The collaboration comes as interest in cryptocurrencies soars to an all-time high in Asia Pacific, Mastercard said in a statement. The U.S. payment behemoth discovered in its latest survey that 45% of consumers in the region are considering using the digital coins within the next year, higher than the global average of 40%.
Mastercard is bolstering its services as its main rival Visa also seeks to grab a dominant share of the emerging cryptocurrency payment market. Last month, Mastercard announced it had teamed up with New York-listed Bakkt, a digital asset platform spun off by Intercontinental Exchange. The partnership promises to allow U.S. banks and merchants on Mastercard’s payment network to offer crypto-related services, such as providing customers with bitcoin as rewards.
In April, Mastercard joined hands with Gemini, the crypto exchange backed by the billionaire Winklevoss twins, to launch credit cards in the U.S. The move came just a month after trading platform Crypto.com announced its partnership with Visa to roll out a similar service.
3 key takeaways from the article
- Mastercard has partnered with three digital asset platforms in Asia to issue payment cards that will allow consumers in the region to convert bitcoin and other cryptocurrencies into fiat currencies.
- The partnership intends to introduce cryptocurrency-linked credit, debit and prepaid cards for both individuals and businesses across Asia Pacific.
- The collaboration comes as interest in cryptocurrencies soars to an all-time high in Asia Pacific. The U.S. payment behemoth discovered in its latest survey that 45% of consumers in the region are considering using the digital coins within the next year, higher than the global average of 40%.
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Topics: Crypto Currency, Finance, Global Finance
Leading & Managing Section
Organizations Need a Dynamic Approach to Teaching People New Skills
By Sari Wilde et al., | HBR | November 26, 2021
As employees and organizations adapt to hybrid work norms, emerging technologies, and general business disruptions, the skills needed to succeed in today’s work environment are shifting rapidly. According to a Gartner analysis of more than 7.5 million job postings, in 2018, U.S. job postings in IT, finance, and sales roles required an average of 17 skills. The same types of roles now require an average of 21 skills, including at least eight that weren’t previously required. At the same time, 29% of the skills from an average job posting in 2018 may not be needed next year.
Rather than making big investments in predictive approaches that may not work or resorting to a reactive approach, the authors’ research reveals a third option: the dynamic approach. This strategy casts skills management as a dynamic exercise that embraces ambiguity, makes peace with imperfection, and frees up HR, managers, and employees to move fast in responding to the things they know and can anticipate. Three steps organizations can take to adopt a dynamic approach to skilling and reskilling employees.
Identify Changing Skills Needs. To spot and close skills gaps as they arise, regularly bring together input from employees, leaders, and customers by facilitating a network of stakeholders who can report on the specific skills needs in their areas. Together, these skills-sensing networks are able to monitor changing needs and ensure employees are prepared.
Jumpstart Skills Development. Quickly evolving skills needs require new, faster solutions — what Gartner calls “skills accelerators.” Skills accelerators leverage existing resources and expertise to enable upskilling support that’s “good enough” to meet skills needs in a timely way. Enacting a sufficient solution in time is better than implementing a perfected training solution too late.
Foster Transparency Between Employees and the Organization. Ensuring both the organization and employees are moving in the same direction is key to developing skills dynamically. To help employees make informed decisions about their development, leaders need to share evolving skills needs — even when plans are uncertain — and how these changes are likely to impact specific roles. Employees should also share their skills and career goals with the business.
3 key takeaways from the article
- As employees and organizations adapt to hybrid work norms, emerging technologies, and general business disruptions, the skills needed to succeed in today’s work environment are shifting rapidly.
- To embrace this pace, instead of relying on reactive (which is too late) or proactive (which is too uncertain), the organizations should adopt a dynamic approach. This strategy casts skills management as a dynamic exercise that embraces ambiguity, makes peace with imperfection, and frees up HR, managers, and employees to move fast in responding to the things they know and can anticipate.
- Three steps organizations can take to adopt a dynamic approach to skilling and reskilling employees: are: identify changing skills needs, jumpstart skills development, and foster transparency between employees and the organization.
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Topics: Leadership, Employees Training, Personal Development
How good are you at business building? A new way to score your ability to scale new ventures
By Markus Berger-de León et al., | McKinsey & Company | November 16, 2021
Why do so many great ideas just fail to take off? Companies struggle mightily to get a good idea over the hump so that it becomes a big-time success. Only 22 percent of new businesses launched in the past ten years have successfully scaled. That’s a big problem, because two-thirds of the value created in new-business building is actually created in the scale-up phase. The authors have reviewed more than 200 scaled corporate new businesses around the world to understand what the issues are. The analysis provides four important lessons:
- There are seven core-business scaling dimensions and 28 practices that determine the success of scale-ups. Organizations that perform well across all dimensions and their practices are three times more likely than the average to scale their new business. Overall, companies perform best in the “product and strategy” dimension, with 63 percent meeting the bar. Conversely, companies score lower on the “go-to-market” dimension, for example.
- Getting to scale requires companies to hit a baseline of competence in every dimension and practice. Doing well in six of the seven dimensions is not enough. Indeed, failure in even a single practice within a dimension can be enough to torpedo a company’s scaling ambitions.
- The best performers hit the bar across all practices, and they excel at a number of them. Overall, four practices stand out: architecture (that is rigorously scalable), operating model (supported by processes that scale), customer insights (that are targeted and applied to product development), and talent and performance management (grounded on entrepreneurial talent). Which practices matter most can vary based on the business itself. If a company is launching a commodity, then it needs to especially excel at go-to-market practices. But for a company with a more complex product or service, excelling at customer insights to drive product development and feature building are essential.
- Companies tend to have a poor understanding of their own capabilities. While 80 percent of the surveyed scale-ups address the practices to some degree and conclude they are doing a decent job, a more rigorous analysis shows that only 20 percent meet best-practice standards.
3 key takeaways from the article
- Why do so many great ideas just fail to take off? Only 22 percent of new businesses launched in the past ten years have successfully scaled.
- That’s a big problem, because two-thirds of the value created in new-business building is actually created in the scale-up phase.
- Research in this area provides four important lessons: there are seven core-business scaling dimensions and 28 practices that determine the success of scale-ups, Getting to scale requires companies to hit a baseline of competence in every dimension and practice, The best performers hit the bar across all practices, and they excel at a number of them, and Companies tend to have a poor understanding of their own capabilities.
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Topics: Business Development, Entrepreneurship, Business Performance
Setting the Rules of the Road
By Ulrich Pidun et al., | MIT Sloan Management Review | November 22, 2021
The rapid rise of a few powerful digital ecosystems disguises a harsh reality about this business model: Less than 15% of business ecosystems are sustainable in the long run. When the authors examined 110 failed ecosystems in a variety of industries, they found that more than a third of the failures stemmed from their governance models — that is, the explicit and/or implicit structures, rules, and practices that frame and direct the behavior and interplay of ecosystem participants.
Business ecosystems are prone to different types of governance failures. Many orchestrators struggle to find an effective governance model because managing an ecosystem is very different from managing an integrated company or a linear supply chain. To wield governance in support of these ends and capture a competitive advantage, ecosystem orchestrators cannot treat it as an afterthought. Instead, they must systematically think through and actively design the following five elements of their ecosystem’s governance model.
- Mission. A strong sense of shared mission is a potent instrument for attracting and retaining ecosystem partners and encouraging desired behaviors.
- Access. Controlling access allows an orchestrator to select only those partners and participants that meet specific requirements and agree to certain standards and behaviors, and to exclude all others.
- Participation. Participation is controlled by the distribution of decision rights and the degree to which partners are invited to contribute to the formulation of ecosystem governance and strategy over time. Offering partners a high degree of participation in discussions of governance and strategy can bolster their commitment and willingness to invest resources in an ecosystem.
- Conduct. Orchestrators can directly influence the behavior of participants in their ecosystem using input control, process control, and output control.
- Sharing. The final building block of ecosystem governance defines the data and property rights of partners and the distribution of value among them.
Four foundational recommendations that can guide ecosystem leaders are: align your ecosystem’s governance model with its strategic priorities, use your governance model to stand apart from competitors, use governance to ensure social acceptance, and adapt your governance model over time.
3 key takeaways from the article
- The rapid rise of a few powerful digital ecosystems disguises a harsh reality about this business model: Less than 15% of business ecosystems are sustainable in the long run.
- A third of the failures stemmed from their governance models — that is, the explicit and/or implicit structures, rules, and practices that frame and direct the behavior and interplay of ecosystem participants.
- Five elements of an effective ecosystem’s governance model include a strong sense of shared mission, giving access to select only those partners and participants that meet specific requirements, offering partners a high degree of participation, use input control, process control, and output control to manage conduct, and finally defines the data and property rights of partners and the distribution of value among them.
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Topics: Ecosystem, Partnership, Business Model
Entrepreneurship Section
6 Tips to Optimize Your Business Messaging
By Hillel Fuld | Inc Magazine | November 6, 2021
The line between business communication and personal texting does not seem to exist anymore. So if you’re going to use WhatsApp and other messaging apps for your business, try to follow some etiquette. Here are six tips to make the most of your business messaging.
- Just because you found someone’s number doesn’t mean you should WhatsApp them. Just like it’s not OK to call a total stranger out of the blue to have a business discussion, it’s not OK to WhatsApp a stranger who never gave you their number. Just because you can doesn’t mean you should.
- Tell me who you are before jumping in to the pitch. Too many people WhatsApp strangers and don’t even bother introducing themselves or giving the other side context. They just jump in and assume the other side knows who they are. Don’t do that.
- Only use voice notes when absolutely necessary. Voice notes might be easier to send, but like most communication, think of the recipient. It is much easier, in 90 percent of cases, for them to read a message than to listen to one. There are exceptions to this, the main one being a message too long to type but can be said in a 30-second voice note.
- Set up your profile with a name and a picture. This is so basic and so obvious. And yet, so many people don’t set it up. If you text me, the first thing I’m doing, assuming you didn’t follow rule number two, is looking at your profile to see if I recognize your name or face.
- When you delete a message, don’t make it awkward. If you must delete a message, remember that the other person sees that you deleted that message. Don’t let their imagination go wild. Just tell them why you deleted the message.
- Don’t opt people into your group. This is true across the board. If you want to add someone to your WhatsApp group, great. Ask them first if they’re interested. The same goes for intros. Ask both sides before intro-ing them. Generally speaking, it’s a very simple rule to follow. Let others opt in to your group. Don’t force them to opt out. That’s just obnoxious.
3 key takeaways from the article
- The line between business communication and personal texting does not seem to exist anymore. So if you’re going to use WhatsApp and other messaging apps for your business, try to follow some etiquette.
- Six tips to make the most of your business messaging are: just because you found someone’s number doesn’t mean you should WhatsApp them, tell me who you are before jumping in to the pitch, only use voice notes when absolutely necessary, set up your profile with a name and a picture, when you delete a message, don’t make it awkward, and don’t opt people into your group.
- The bottom line is know your audience and think of their needs before your own when communicating.
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Topics: Communication, Personal Development
5 Marketing Trends E-Commerce Business Owners Shouldn’t Miss
By Thomas Smale | Entrepreneur Magazine | November 25, 2021
Much like food and fashion, e-commerce marketing is heavily impacted by trends. This year has seen a lot of development when it comes to e-commerce marketing strategy. Though not every trending marketing method will work with every online store, sellers of all experience levels can benefit from investigating how the following five fads might positively impact engagement and revenue.
- Influencer relationships. With social media influencers having only existed for the last few years, this e-commerce marketing strategy is practically brand-new. Influencers, or social media users with large followings, are often willing to serve as marketing conduits for products they believe in—for a price. Their endorsements come in countless forms, from individual Instagram posts and YouTube demonstrations to a sponsored series of TikTok videos. These relationships could hold the key to increasing traffic to your online storefront.
- Attractive packaging. In a highly visual social media world, appearances matter more than ever. The attractiveness of a product can make or break a consumer’s decision to tap your Instagram ad, browse your virtual storefront, and ultimately make a purchase—at every step in the process.
- QR codes. QR codes exploded in popularity at the height of the COVID-19 pandemic as businesses sought ways to reduce physical contact. As it turns out, these boxy little codes can serve as an easy way to keep customers connected with your brand. They can be placed on product packaging to link back to your social media, satisfaction surveys, or a discount page for loyal customers’ follow-up purchases.
- Backlinks. This is a tried-and-true e-commerce marketing tactic that’s here to stay. By building connections with other website owners (such as bloggers), you may be able to create a relationship in which you link to one another’s sites. These links are known in the marketing world as “backlinks,” and they significantly boost your site’s SEO, as search engine algorithms view backlinked sites as more steadfast and legitimate.
- Video marketing. If you’ve noticed that most of these trends are highly visual, you wouldn’t be wrong. The Internet is a visual space, where users love to be entertained; just consider TikTok and Instagram Reels’ rise in popularity over the past year. From quick, 10-second clips to long-form content on YouTube, video offers you the opportunity to show off a product’s many uses, answer frequently asked questions, demonstrate assembly, and more in an engaging way that doesn’t sacrifice your brand’s personality.
3 key takeaways from the article
- Much like food and fashion, e-commerce marketing is heavily impacted by trends.
- New, click-worthy ways to catch customers’ attention crop up all the time, and taking notice of which methods are relevant to your brand is key to staying relevant in the online marketplace.
- This year has seen a lot of development when it comes to e-commerce marketing strategy. Consider the following five fads: go for influencer relationships, create an attractive website, use QR codes to keep customers connected with your brand, build connections with other website owners, and pursue video marketing.
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Topics: Marketing, Digital Marketing, Social Media