Extractive summaries of and key takeaways from the articles curated from TOP TEN BUSINESS MAGAZINES to promote informed business decision making | Week 232|February 18-24, 2022
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Shaping Section : Ideas and forces shaping economies and industries
Can the ed-tech boom last?
The Economist | February 19, 2022
A clutch of young companies including Byju’s benefiting from breakneck growth in online learning. Venture capitalists (VCS) plonked around $21bn into education technology companies in 2021. That was three times the amount raised in 2019 and 40 times more than a decade ago. Seventeen ed-tech startups became “unicorns” (private companies valued at more than $1bn), three times as many as had passed that milestone during any previous year. Half a dozen of them went public. The prediction is that global ed-tech revenues could almost double from $227bn that year to around $400bn in 2025, a fifth higher than its pre-pandemic forecast.
Until recently ed-tech firms had rarely made investors sit up. Schools and universities control much of the $6trn spent globally on education each year. They tend to be cash-strapped and conservative. In 2019 only about 3% of all education spending went on software or online teaching. No more. The closure of school buildings and college campuses forced educators to try out new kit (especially in India and America, where disruptions to learning have been particularly drawn out). Governments have given children stacks of tablet computers and sped up efforts to improve broadband in schools.
For years many of the zippiest ed-tech firms have chosen not to sell to schools and universities but to go direct to learners. This category of companies has also benefited during the pandemic. Parents in Asia have long been keen to pay for tutoring and other services (such as Byju’s app) that might give their offspring an edge. Now families in Europe and America are also getting keen. Companies that offer after-school lessons are growing fast as a result. Another type of outfit getting a boost from the pandemic are those that offer learning to adults including workers.
Ed-tech’s pandemic report card is not without blemishes, however. In China, its single biggest market, the Communist Party declared last July that businesses could not typically make a profit from providing after-school tutoring to children in primary and middle schools. The Chinese experience has rattled investors. It blocked a possible exit route for Western startups, some of whose VC backers may have hoped to sell them to China’s ed-tech titans. It may also inspire tighter rules in next-door India, another potentially vast market where some parents accuse ed-tech firms of misleading ads and aggressive sales tactics. Western ed-tech firms are unlikely to face similar strictures. But they have their own challenges.
Not straight As, then. But the industry’s boosters think it has room to improve. An influx of users and money in the pandemic has given more firms the muscle to expand abroad and to find ways of retaining users for longer.
3 key takeaways from the article
- Venture capitalists (VCS) plonked around $21bn into education technology companies in 2021. That was three times the amount raised in 2019 and 40 times more than a decade ago.
- Companies are offering services as alternatives to school teaching, after-school lessons, and learning platforms to adults including workers.
- Despite the challenges the industry is facing including tight regulatory regimes, the industry’s boosters think it has room to improve. An influx of users and money in the pandemic has given more firms the muscle to expand abroad and to find ways of retaining users for longer.
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Topics: Education, Technology, on-line Learning
How big technology systems are slowing innovation
By James Bessen | MIT Technology Review | February 17, 2022
In 2005, years before Apple’s Siri and Amazon’s Alexa came on the scene, two startups—ScanSoft and Nuance Communications—merged to pursue a burgeoning opportunity in speech recognition. The new company developed powerful speech-processing software and grew rapidly for almost a decade—an average of 27% per year in sales. Then suddenly, around 2014, it stopped growing. Revenues in 2019 were roughly the same as revenues in 2013. Nuance had run into strong headwinds, as large computer firms that were once its partners became its competitors.
Nuance’s story is far from unique. In all major industries and technology domains, startups are facing unprecedented obstacles. New companies are still springing up to exploit innovative opportunities. And these companies can now tap into an extraordinary flood of venture capital. Yet all is not healthy in the startup economy. Innovative startups are growing much more slowly than comparable companies did in the past.
Surprisingly, a major culprit is technology—specifically, proprietary information technology in the hands of large firms that dominate their industries. We’re accustomed to thinking of technology as creating disruption, in which innovations introduced by smaller, newer companies enable them to grow and ultimately replace older, less productive ones. But these proprietary technologies are now suppressing industrial turnover, which has declined sharply over the last two decades. Big firms are not only employing large-scale technologies but also superior business models that make it harder for startups to grow.
The slowdown in the growth of innovative startups is not just a problem for a few thousand firms in the tech sector; the headwinds blowing against companies like Nuance are responsible for problems that affect the health of the entire economy. A slower growth of productive firms accounts for much of the slowdown in growth of aggregate productivity. It plays a role in growing economic inequality, greater social division, and the declining effectiveness of government.
What will it take to reverse the trend? Stronger antitrust enforcement might help, but the changes in economic dynamism are driven more by new technology than by mergers and acquisitions. A more basic problem is that the most important new technologies are proprietary, accessible only to a small number of huge corporations. In the past, new technologies have spread widely, either through licensing or as firms independently developed alternatives; this enabled greater competition and innovation. The government sometimes helped this process.
Coming up with the right balance of policies will be difficult, and it will take time—we don’t want to undercut incentives to innovation. But the starting point is to recognize that in today’s economy, technology has taken on a new role. Once a force driving disruption and competition, it is now being used to suppress them.
3 key takeaways from the article
- In 2005, years before Apple’s Siri and Amazon’s Alexa came on the scene, two startups—ScanSoft and Nuance Communications—merged to pursue a burgeoning opportunity in speech recognition. The new company developed powerful speech-processing software and grew rapidly for almost a decade—an average of 27% per year in sales.
- Then suddenly, around 2014, it stopped growing. Revenues in 2019 were roughly the same as revenues in 2013. Nuance had run into strong headwinds, as large computer firms that were once its partners became its competitors.
- Nuance’s story is far from unique. In all major industries and technology domains, startups are facing unprecedented obstacles. New companies are still springing up to exploit innovative opportunities. And these companies can now tap into an extraordinary flood of venture capital. Yet all is not healthy in the startup economy. Innovative startups are growing much more slowly than comparable companies did in the past.
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Topics: Startups, Competition, Regulations, Technology
Facebook’s Feed Can’t Keep Up With New Types of Social Media
By Kurt Wagner | Bloomberg Businessweek | February 18, 2022
Meta Platforms Inc. remains far and away the world’s biggest social networking company, with 1.93 billion daily users on Facebook alone, in addition to vast numbers of users on Instagram and WhatsApp. But for the first time in its almost 20-year existence, the network’s daily user base shrank over the holiday quarter, helping send its market value down more than $300 billion in the ensuing weeks and reinforcing the perception that its best days may be behind it. Facebook has intense competition from long-running rivals such as YouTube and Snapchat and buzzy newcomers like TikTok, as well as iMessage, FaceTime—also owned by Apple—and Discord, plus other chat services that may not initially seem like direct competitors.
Its challenges have come not only from product development shortcomings but also often from the damage it’s done to its own brand. A string of privacy issues has been eroding trust in Facebook for years, pushing some users toward other services on which messages and photos are more private. In the U.S., the company’s most valuable advertising market, its user base has been stagnant for two years. Video app TikTok is becoming more popular than Facebook for the first time.
The problem for Meta is that it needs more than one fix. Rivals such as TikTok have come up with new ways for people to share, such as letting users post a music video, or a clip of them reacting to someone else’s post, sending Meta scrambling to copy the new features. In addition to privacy concerns, Meta’s reputation has been damaged by the idea that it’s a place full of “old” people, making it less cool for teens. Chief Executive Officer Mark Zuckerberg has been preparing for this transition for years by acquiring WhatsApp and oculus – virtual-reality company. Nevertheless, an issue for Facebook’s main app is that its trouble keeping pace could accelerate if it’s no longer seen as the inevitable destination for social networking.
3 key takeaways from the article
- Meta Platforms Inc. remains far and away the world’s biggest social networking company. But for the first time in its almost 20-year existence, the network’s daily user base shrank, helping send its market value down more than $300 billion and reinforcing the perception that its best days may be behind it.
- Facebook has intense competition from long-running rivals such as YouTube and Snapchat and buzzy newcomers like TikTok.
- Mark Zuckerberg has been preparing for this competition for years by acquiring WhatsApp and oculus – virtual-reality company. Nevertheless, an issue for Facebook’s main app is that its trouble keeping pace could accelerate if it’s no longer seen as the inevitable destination for social networking.
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Topics: Technology, Social Platforms, Competition
Industry Insights Section: Trends & analomies shaping an industry
Ransomware prevention: How organizations can fight back
By Jim Boehm | McKinsey & Company | February 14, 2022
No one can deny ransomware has hit new levels of sophistication, with demands for payment skyrocketing into the tens of millions of dollars. The reasons are manifold. These include vulnerabilities posed by pandemic-weary organizations and workers logging in from unsecured home networks; ever-increasing connectivity driven by advancing digitization; actors who are committed to perfecting their craft; and finally increase number of hackers attracted to this type of lucrative threat. To that end, Cybersecurity Ventures estimates ransomware costs should reach $265 billion by 2031.
The payment or nonpayment of a ransom could well depend on whether an organization masters the basics of the following four strategies:
- Prevention. To achieve a secure work environment, you need to know what technology you have, what and who it is talking to, and then watch it like a hawk. Vigilance is key. To get there, everyone from the board and C-suite to down the line must be on the same page and treat security as a continuous endeavor that balances technology with people and processes to ingrain security into an organization’s DNA. Companies are finding success with the following tactics: securing all Remote Desktop Protocol (RDP), Multifactor authentication (MFA), Patch management, Disabling user-level command-line capabilities and blocking Transmission Control Protocol (TCP) port 445, Protect Active Directory, and Education and training.
- Preparation. A core team—which includes senior leaders—that has worked to prepare for an attack is in far better shape to respond than one figuring it out on the fly. So, creating a business continuity plan and then practicing all types of scenarios will pay off. That includes the following: knowing your decision rights, preparing for all options and understanding negotiating constraints, getting your board up to speed, and enhancing resilience.
- Response. In case of attack, an organization should not compartmentalize the challenges ahead. The CISO or CSO needs to ensure transparency and collaboration with internal stakeholders across the company, including the board, C-suite, affected business groups, compliance and risk, and legal and crisis communications teams. However, your organization’s network of external stakeholders can provide valuable input and help expedite risk-based decision making, such as the following: phone a friend (supervisory law-enforcement agency), proceed carefully, seek counsel and insurance policies, expect pressure, activate third-party partners, dig into forensics and intelligence, and investigate alternatives to payment.
- Recovery. No matter what, recovery from a ransomware attack can be messy. Also, remember, if an organization suffers an attack and feels it has to pay, the attacker now becomes a business partner, so keep these guidelines in mind: verify proof that the attackers actually have what they say they have, and know what’s up for debate.
3 key takeaways from the article
- No one can deny ransomware has hit new levels of sophistication, with demands for payment skyrocketing into the tens of millions of dollars.
- The reasons are manifold. These include vulnerabilities posed by pandemic-weary organizations and workers logging in from unsecured home networks; ever-increasing connectivity driven by advancing digitization; actors who are committed to perfecting their craft; and finally increase number of hackers attracted to this type of lucrative threat.
- Companies need to ensure they remain resilient by focusing on ransomware prevention, preparation, response, and recovery strategies. Communication, advanced preparation, and understanding, and then minimizing risk is the best way to keep the operation up and running.
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Topics: Technology, Cybersecurity, Ransomware
Leading & Managing Section
Empathy Rules
By Sherry Turkle | Harvard Business Review | February 17, 2022
We are in a new normal. This state can be referred as anomie — a destabilized and destabilizing state when rules and rule givers lose legitimacy. It is a time of disorientation, depression, and anxiety. The practice of empathy can help us navigate the period of anomie we have been experiencing.
What we know about empathy in the workplace is that it’s a messy affair. It’s both rewarding and time consuming to listen to other people without preconception. Business consultants sometimes suggest something that seems close enough: radical candor. A continual round-robin of criticism and praise promises to dissolve the boundaries between colleagues. But this truth-telling practice proceeds from the feeling: “I know you.” Real empathy starts from a different premise, radical humility: “I don’t know how you feel, but I’m here to listen.”
Radical humility is the first of four empathy practices that can help us move away from anomie and shape the new “new normal.” This first practice is to embrace not knowing. You can’t put yourself into someone else’s situation if you have preconceptions about its contours. This isn’t easy. We’re trained to relate to others by expressing what we think we share with them: “Oh, you lost your job. I know how tough that is; I lost mine as well!” It’s the opposite — the strategy of not knowing — that leaves you open to the truth of things. Step back and recognize that you don’t necessarily know what someone else is thinking or feeling. Stop, look, listen, and stay open. It’s not what you know, it’s what you’re willing to learn that provides space for empathy.
Second, embrace radical difference. Empathy doesn’t start with a reassuring “I’m like you.” On the contrary, empathy accepts friction. Colleagues may have profound disagreements, just like family members, neighbors, and friends. Empathy is not about being conflict-averse — it’s noisy because people are. To be empathetic, we must be willing to get in there, own the conflict, and learn how to fight fair. It’s about full engagement, even when it is uncomfortable.
Third, embrace commitment. Empathy implies that you will do the work necessary to comprehend not just the place the person is coming from but their problem. It’s a discipline of basic respect, both personal and civic. You have a stake in helping your neighbor make things better. You can’t get bored or turn away.
Finally, embrace community. Empathy isn’t altruistic. It enlarges those who offer it and binds them to others. It fights anomie. If you’ve been heard, and the rules you’ve been asked to follow take your situation into account, you feel part of something larger than yourself.
3 key takeaways from the article
- We are in a new normal. This state can be referred as anomie — a destabilized and destabilizing state when rules and rule givers lose legitimacy. It is a time of disorientation, depression, and anxiety.
- The practice of empathy can help us navigate the period of anomie we have been experiencing.
- Four practices of empathy are — embracing not knowing, radical difference, commitment, and community — cultivate a respect for others. And if you respect others, you’re not only going to be a better colleague, you’re going to be a better citizen.
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Topics: Communication, Interpersonal Relationship, Empathy
Ryan Leak Describes Why Embracing Failure Is An Important Experience To Master
By Kimberly A. Whitler | Forbes Magazine | February 9, 2022
Author of Chasing Failure: How Falling Short Sets You Up for Success, Ryan Leak, helps organizations and individuals “master failure”. In this article he describes why he believes managing failure is a critical skill to master. Although there are a number of reasons why Leak believes that embracing failure is the key to future success, he identifies three significant ones.
First, failure can hold people back. For many people, hurdle is the fear of failure. Failure can create great apathy in people’s lives and they suffer from analysis paralysis at the thought of coming up with anything new. Failure can be debilitating to what we’re destined to do. Some of the best podcasts won’t get recorded, some of the best music won’t get written, some of the best ideas won’t come to fruition simply because of our fear of failure. But an alternative thought would be to think about is: Who’s waiting on you? Somebody is on the other side of your dream whose life will be radically different if you pull it off—and that would be bad if you never meet them because you never tried.
The second reason is that people view failure as the villain to success, when in reality, failure is just part of the journey to get there. It is hard to see people who are stuck in the same cycle because they see their failure as an obstacle in their way instead of an opportunity to go the right way. If we don’t learn from our failures, we’ll continue to make the same decisions over and over again expecting a different result. Don’t keep going in the same direction when there are red flags telling you to go a different way. Take the opportunity to follow the direction that failure is trying to point you to.
The last reason is that most people don’t realize why they keep failing. There could be many common denominators on why someone continues to fail. Maybe it was a great idea, just not a great plan to actually pull it off. Take writing a book, for example. Did you know that 95% of all books won’t sell more than 5,000 copies? That means that some of the best books ever written will never hit the bestseller list. So while it’s one thing to write a good book, it’s a whole different thing to market a good book. You might not sell more than 5,000 copies, but that doesn’t mean the book itself was the failure. In his best-selling book Atomic Habits, James Clear says ‘You do not rise to the level of your goals. You fall to the level of your systems.’ You can have a great goal and just be missing the right method to get there.”
2 key takeaways from the article
- Author of Chasing Failure: How Falling Short Sets You Up for Success, Ryan Leak, helps organizations and individuals “master failure”.
- Why managing failure is a critical skill to master. Three significant reasons why Leak believes that embracing failure is the key to future success are: failure can hold people back, people view failure as the villain to success, and most people don’t realize why they keep failing.
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Topics: Failure, Entrepreneurship, Leadership, Success
Understaning Customers Experiences
Shifting From B2B to B4B Can Build a More Sustainable Business
By Sergio Restrepo and Efosa Ojomo | MIT Sloan Management Review | February 14, 2022
What’s the difference between B2B and B4B? It may sound simple, but we have found that reframing your business-to-business (B2B) company as a business-for-business (B4B) company can increase revenues, customer retention, and employee morale. Instead of thinking of itself as a business that sold to other businesses, an organization needed to think of itself as a business that worked for other businesses. Its primary metric of success needed to be how well it helped customers grow and become more successful.
This is important because, to every business, customers represent a stream of future projected cash flow. The value of that cash flow depends on two variables: size (how big the cash flows are) and longevity (how many years the company can depend on it). Companies that integrate their activities around their customers’ success and monitor this as a key metric will generate large and dependable cash flows.
Moving from the transactional mindset of B2B to the collaborative mindset of B4B means asking different questions about growth, pricing and value, talent management, and more. “How many products can I sell to this company?” becomes “How can we cocreate new products with this customer and grow together?”
Rather than focusing on how to incentivize sales executives to sell more products and services, a B4B company considers how to train them to become expert, high-value business consultants for customers. And instead of asking what might boost sales in the current quarter, leaders should be asking what new service could complement their product offering and how to create so much value for customers that it becomes very difficult for them to defect.
Likewise, a key metric for business development may not be how many new proposals your business has sent out in a given period but how many new customers are reaching out because of what existing customers are saying about you. And instead of asking how business development can be more aggressive, ask how you might make it easier for new customers to find you and start working with you.
Once you shift your mindset to seeing the success of your customers as key to your company’s long-term strength, you open the door to more expansive thinking about how your company contributes value in all of its relationships.
3 key takeaways from the article
- Reframing your business-to-business (B2B) company as a business-for-business (B4B) company can increase revenues, customer retention, and employee morale.
- Instead of thinking of itself as a business that sold to other businesses, an organization needed to think of itself as a business that worked for other businesses. Its primary metric of success needed to be how well it helped customers grow and become more successful.
- To every business, customers represent a stream of future projected cash flow. The value of that cash flow depends on: size (how big the cash flows are) and longevity (how many years the company can depend on it). Companies that integrate their activities around their customers’ success and monitor this as a key metric will generate large and dependable cash flows.
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Topics: Marketing, Business Market, Competitive Advantage
Entrepreneurship Section
6 Powerful Ways to Connect With Your Customers
By Marcel Schwantes | Inc Magazine | February 18, 2022
Empowered by technology and each other, today’s consumers have rejected the age-old company-customer dynamic where they were told what goods, services, and experiences they could buy and for what price. Instead, consumers are setting the agenda for the companies. This new type can be referred as Me’s.” The following 6 strategies are suggested by: Joel Bines, global co-head of retail at AlixPartners in his new book, The Metail Economy: 6 Strategies for Transforming Your Business to Thrive in the Me-Centric Consumer Revolution.
- Cost: Give Me a Steal. Before, many retailers could compete on cost, whether they were the lowest cost or not–because the information advantage, the power, rested with the company. Today, if you want to be cost-competitive, you must mean it and understand its implications on your cost structure and strategy.
- Convenience: Make it Easy for Me. Convenience means making your customers believe that you will do whatever it takes to make their lives easier. But convenience is in the eye of the customer so try to understand these.
- Category Expertise: Show Me What You Know. Category experts must know everything about their category. And for that one-in-a-million question that stumps them, they must know who does have the answer. Mastery of information is the key, as is the specialization of products and services that consumers won’t be able to easily access elsewhere.
- Curation: That Chosen-for-Me Feeling. You cannot fake curation, and technology can’t replace it. Customers see past the, “If you bought this, you might like that” algorithms. Curators look toward the horizon and anticipate the future wants of their Me’s. True curation can be tough to scale because it relies so much on the individual.
- Customization: That Made-for-Me Feeling. “Me’s don’t want to feel like part of the herd.” “Give them the ability to control some aspect of their relationship with you, through either products or experience.”
- Community: Make Me Feel Welcome. This is less about what you sell than the big idea that surrounds it. Building and sustaining an authentic sense of community will go a long way toward holding the attention of your Me’s.
3 key takeaways from the article
- Empowered by technology and each other, today’s consumers have rejected the age-old company-customer dynamic where they were told what goods, services, and experiences they could buy and for what price. Instead, consumers are setting the agenda for the companies. This new type can be referred as Me’s.”
- 6 Cs or strategies to serve these Me’s are: Cost: Give Me a Stea, Convenience: Make it Easy for M, Category Expertise: Show Me What You Know, Curation: That Chosen-for-Me Feeling, Customization: That Made-for-Me Feeling, and Community: Make Me Feel Welcome.
- Companies must determine what their customer values in them most, to find their right C or the right combination of C’s. The answer will be different for different companies. And while it may appear risky to change course, in this new consumer reality, it’s riskier not to.
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Topics: Marketing, Business Strategy, Entrepreneurship
5 Myths That May Be Causing Your Startup to Stall
By Nico Barawid | Entrepreneur Magazine | February 16, 2022
Entrepreneurship is on the rise across the globe. More than 582 million people have embarked on the journey to create a new business, according to Global Entrepreneurship Monitor. And seemingly there are just as many myths and misconceptions as there are people launching new ventures. What you don’t want to do is create your own barriers to success. Five myths are among a few of those barriers.
Myth 1: You need to be the first and only. Don’t panic that you’re late to the party. Your business doesn’t have to be the first to arrive. However, that doesn’t mean you should ignore that others got there first. In fact, you can use that to your advantage. Look for your white space. Ask yourself what your business can do to fit into an already crowded market. What can you do differently to make your brand stand out?
Myth 2: Lack of capital leads to failure to launch. Conventional wisdom says that large sums of money are needed upfront in order to build a business. That isn’t necessarily the case and, frankly, isn’t always possible. Some aspiring tycoons don’t have equitable access to capital. Starting a business with little money is entirely achievable.
Myth 3: Leaders need to create a hustle and grind culture. Hustling and grinding in and of themselves aren’t bad qualities. But companies are moving away from the stereotypical model that requires employees to push themselves to the max all 86,400 seconds of every day. Your employees are not machines. Treat them like they are, and they won’t stay long. Remember empathy? It’s back in style.
Myth 4: If you build it, they will come. Whatever you do, your business is not going to do very well if customers don’t know you’re there. Marketing your products and services is an ever-changing science, but one that can be enjoyable. This can be as much about creativity as it is about spending. You don’t always have to pay to get eyes on your brand. There are so many possibilities when it comes to letting people know about your business, starting with just talking about it.
Myth 5: Failure is not an option. An unsuccessful attempt ≠ failure. If you’re going into business, you might want to embrace that equation immediately. It’s been said that life is a journey, not a destination. So, strap in and get ready for the ride of your life. In preparing for your journey, remember to toss a huge supply of perseverance into your travel bag.
3 key takeaways from the article
- Entrepreneurship is on the rise across the globe. More than 582 million people have embarked on the journey to create a new business, according to Global Entrepreneurship Monitor.
- Seemingly there are just as many myths and misconceptions as there are people launching new ventures. What you don’t want to do is create your own barriers to success.
- Five myths that serve as barriers to business success are: you need to be the first and only, lack of capital leads to failure to launch, leaders need to create a hustle and grind culture, if you build it, the customers will come, and failure is not an option.
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Topics: Entrepreneurship, Startups, Business Decision-making
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