Tag: future

Tech Investing Tricks

Posted on by Steve Sammartino

First off – here’s a link to the very first episode of my new TV show  The Rebound to watch on 9Now. So far the feedback has been amazing. We’ll be doing lots of content on the social channels for it too – all of which are here.

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The Tale of 2 Tech IPO’s

Recent IPO filings in the USA for two tech companies Door Dash & Airbnb are quite revealing for investors. Given that everyone is so in love with technology investments, it seems many players are claiming to be something they are not. It’s important not just from a regulatory perspective, but for anyone who plans to invest in the sector. So today, I’m going to help you get a better at understanding true technology / software plays versus those who, in truth pretend to be something they are not. Today, almost every business relies on software in some way. But those which are hybrid software – human labour businesses faces very different economics from true software pure plays. In short, always be nervous when a company calls itself a tech firm when their service isn’t possible without humans in every customer interaction. This is key. Below I have two examples. In my view one is a terrific technology firm, and the other is a disaster in the making.

DOOR DASH – IPO

DoorDash is a large US based firm specialising in app based food deliveries. Here are some of their key numbers below:

  • Filed to float with a valuation around $13b.
  • Lost $450m last year.
  • Has already raised $1.9 billion from investors
  • Relies on army’s of Gig workers who also happen to be fighting for rights / wages / greater compensation & benefits.

Main issue is that this are not real technology company, because it is really just using software to connect physical labour. The problem is that it has a technology company valuation. No amount of scale will solve their problem of ‘labour’ and if this can be automated via something like ‘Local Drone Delivery’ – then the restaurants can do it themselves and save the 20-30% fee they pay such services. The app delivery sector seems to be falsely propped up by Venture Capital investments so they can expand quickly, even if they lose money. By the way, these VC’s aren’t silly – but they’ll make their money when they exit at the IPO – it is the retail investors who will get caught carrying the can. The reason retail investors buy such stocks is that they falsely believe it will be like Google or Facebook, which too were unprofitable in their expansion phases. The fundamental difference here though, is that they were software pure plays.  The delivery sector has the pesky people and cars problem which won’t just magically be solved.

We can add to this that the sector is highly competitive – with no real competitive moat. It tends to be lots of competitors in different geographies (in Aust we have MenuLog / Deliveroo / Uber Eats) all of which are unprofitable. Eventually restaurants will work out it is cheaper to do their own delivery with staff. If this sector is to survive at all, the future is probably just for a software firm to send orders to places for a single digit percentage fee – and not provide drivers or deliveries.

AIRBNB IPO

Now let’s compare this to internet darling Airbnb. They also filed for IPO, and some of their key numbers are below.

  • Valuation around $30b.
  • Raising $3b in capital at float.
  • Lost almost $700m last year.
  • But, turned a $219 profit this quarter.
  • Sacked 25% of workforce at start of the pandemic – smart rightsizing.

They key difference with this firm is that it doesn’t rely on any physical labour to perform each transaction. It is purely connection via software, and hence deserves a technology company style valuation. It also has the advantage in that real estate is usually a solid margin business with higher price per transaction (Airbnb averages $167 USD per transaction). Compared to low order values of food delivery, it is simply a better business model. It has less running costs, no labour issues, higher value per transaction and it takes a smaller percentage clip (3%) from users. I feel this is a truly global powerhouse in the making with a very strong long term future.

The stories we tell ourselves and our customers (investors in this case) are all important. The narrative itself can make something worth twice the price – just think of luxury handbags. But when it comes to investing, we need to be sure the story matches reality, because eventually the numbers will reflect the truth, and the market will wake up.

Keep Thinking,

Steve.

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Graduate to Greatness

Posted on by Steve Sammartino

To make it to the upper echelon in any field, we need to be able to do one thing:

Graduate from competence to confidence.

The foundation of any career is technical capability. You need to prove you are a competent accountant, lawyer, marketer, electrician, whatever. This is your time in the field and getting some metaphorical dirt under your fingernails. It’s when you convert study and training into action. It’s also when you find out that nothing is more valuable than real world experience. At this point in your career, you ARE the factor of production. It’s a vital stage to becoming a leader in any field – people want to know you’ve had your time on the tools. But you can’t stay there. You have to graduate.

The next phase in your career is all about confidence. In fact, you don’t even have to be the greatest ‘technocrat’ to rise above. It’s all about the belief you have in yourself to be more than someone who manages tasks and projects.

This time, there is no graduation ceremony.

You need to decide when you deserve and want to be more – and it is all about attitude. The ironic thing is the people who give you the chance to lead in your field are looking for the signs that you’ve made this internal decision. They are not looking for technical ability. They are looking for vision and leadership. When it comes to decision makers around you and your career, one simple thing is true: they believe what you believe. If you don’t believe in yourself, they’ll be able smell it.

The reason this matters is that you’ll never be able to know everything in your field.  No one does, no one ever will. There’ll always be someone who knows more, and the next generation coming up will have new technical skills and abilities you won’t. Yes, it’s important to be across what’s new and its impact, but going back to study its implementation is a fool’s errand. Leave that to the newbies. If you go there, you simply drag yourself back into the competence pool. You become an undergraduate again.

Don’t think for a second that Steve Jobs was writing code for the new iPhone, Elon Musk is sketching out blueprints for new car batteries or Jeff Bezos is designing his new in-home drones. They have competent people to do that for them. How many times have you seen people who are great technocrats, the best at getting stuff done, who know more than anyone in their field, but never seem to get to the top? It’s because they didn’t graduate. I used to write code, build new technologies and be very hands on – but now, I get other people to do that for me instead. My job is to think, write and speak about technology and economics. I graduated and it was the best thing I ever did in my career. I didn’t ask for permission. I just did it.

Sometimes you might even need to change places to graduate to confidence. For example, you may be overlooked for promotional opportunities in your current organisation. As soon as you are overlooked – move on. If management doesn’t have confidence in you – leave and leave quick. Go somewhere where you can refresh your self confidence and your personal brand. I’ve seen people who were out of favour in one company, change places and go on to become CEO elsewhere or start a successful business. The world’s a big place.

Next week, I’ll lay out the three competencies that great careers are built on, once you graduate from the operational level.

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Keep thinking,

Steve. 

Talent Matters – COVID-19 series

Posted on by Steve Sammartino

Work hard at anything and you’ll get results. Work hard on things where you have natural talents and your results will be amazing. Here’s the good news: every single one of us has unique talents. Talents that when uncovered, worked on and combined can give us extraordinary outcomes.

But here’s the trick: we need to find a way to combine what seems like a normal human social gift or proclivity into economics. We need to mash up our gifts with something that has demand in the market place. This is possible for almost everything. I’m not talking about passions either – I’m talking about that thing that just comes a bit easier to you.It can be absolutely anything – communication, creativity, manners, eye for design, diligence, detail orientation, being funny, making people feel good about themselves, working creatively with your hands, organising things, planning, project management, selling the dream…literally anything.

For me, it was speaking – it was what I got in trouble for everyday at school! But once I combined my natural proclivity to share ideas verbally about technology and economics, the market rewarded me. Speaking of which (see what I did there?), here’s my latest effort with #SteveFeed episode 2. – I’d love it if you could leave a comment on Youtube and share it wide – I mean, it’s only the future of our entire species depending on it!

In times like these when things are tough and average just won’t do, we need to dig deep. We need to have the courage and patience to find what we know we are good at, extract our gifts and add them to the work we do. Once we do that, we can achieve much more than we ever thought possible.

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Keep Thinking,

Steve. 

Choose your own Adventure #2 – COVID-19 series

Posted on by Steve Sammartino

As we enter our second lockdown here in Melbourne, Australia, I thought I’d do my second Choose Your Own Adventure blog post. Here are five things:

(1) This week I was on Charlie Pickering’s The Weekly, interviewed by the hilarious Judith Lucy on All Things Future in crazy 2020. Many people have said it was the first time they’ve ever seen me lost for words. Click here to watch (4 min video)

(2) As you go into ‘iso’ hiding from the ‘rona’, get ‘woke’ with your future! On ABC radio this week I talked about how technology influences language and how quickly it is changing – and how changing the way you speak could drastically improve your future. Listen here (11 min audio)

(3) Wow, Tik Tok is so damn entertaining – it is seriously lots of fun. It’s also a terrific way for a foreign government to hoover up all manner of information about its users – much more than we think. For those who haven’t read the terms and conditions (and that’s nearly everyone!), I was interviewed on Channel 7 National News discussing security risks and the emerging Technology Cold War. Watch here (3 min video)

(4) One of my fave blog posts: 20 things in 20 years – lessons I’ve learned since school. 

(5) My fave ever chill out song. Give it a try if things are getting tough for you. Click here for secret reveal. 

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Keep thinking,

Steve. 

Mega Trends – COVID-19 series

Posted on by Steve Sammartino

This week you can watch my blog for 5 mins instead of reading it! In the first episode of #SteveFeed – Protein for the mind, I explore the #5 Mega Trends emerging from a Post Covid Economy. The five things every business, brand and individual needs to be aware of as we attempt to navigate our way out of this crisis.

In summary the trends are:

  1. Digital Sovereignty 
  2. Automation At Distance
  3. De-globalisation
  4. Essentialism
  5. Market Recalibration

Some ideas I’ve touched on in recent posts. I’d love for you to make a comment on Youtube and even subscribe to my YT channel here. Join another 10,000 peeps on the Sammatron wagon – safety in numbers I say. Get on it!

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Keep thinking,

Steve. 

The Currency of Language – COVID-19 series

Posted on by Steve Sammartino

Speaking more than one language is revered in society. I pride myself on speaking three, but in reality we all speak many languages. More accurately, we all speak many dialects and that has a much bigger impact on our future than we recognise.

Since COVID, a new set of jargon has emerged: iso haircut, Covidiot, Zoombombing, WFH and Blursday, to name a few. It’s a reminder of the importance of language.

Our Best Invention: Language is humanity’s killer app. It puts us firmly on top of the food chain. We are the only species who can spread ideas by passing them down generations, across geography and even through time. The sharing of our thoughts and discoveries allows every generation to build on top of what was known before. Unlike other species, we don’t have to start again every time we procreate. Verbal, written, video and computer code make this possible. All of it is based on language.

The Many Languages We Speak: If you pay attention to how you communicate, you’ll notice you use different dialects when speaking with different people. We speak a certain way with our family – our own special shorthand. When communicating with young children, we often modify our words and simplify our ideas. With friends, we use another dialect and particularly with childhood friends, the language has an historical context to it – the language is retrofitted. I grew up in a working class suburb and I learned to adapt my vocabulary and speech so I could grow in my career. This wasn’t an accident and it didn’t happen by osmosis. The language I employed was contextual, as just having the qualifications wasn’t going to be enough.

It’s obvious in hindsight that these dialects are far more important than we imagine.

Language Evolves: We also need to remember that language is a living organism. It changes its shape over time. Words come and go, meanings shift, spelling changes and what was acceptable parlance yesterday may be offensive tomorrow. Language is the living representation of our culture and its evolution. We can see this in pop culture, where keeping up with the lingua franca of teenagers is a full time job for outsiders. Commenting on someone’s headwear as ‘that’s the biggest cap ever’ may now earn you a WTF? as ‘that’s the biggest cap ever’, now means ‘the biggest lie ever’.

It is also evident in the socio political arena. As society becomes more progressive and inclusive, sentiment isn’t enough. Today we all need to be vigilant as the onus is on the communicator not cause offence. In an era of callout culture, we all need to pay attention to the language we use.

Language and Your Career: Now let’s take this idea to the context of work, technology and your own future. Assuming most people in your firm or industry are competent, then what elevates you to the top will be your mastery of contextual languages and dialects. It’s a process that requires us to change gears all day long depending on the context. We need to know our industry jargon. Increasingly, we also need to understand the verbiage emerging from the technology sector as it permeates every industry. Knowing this dialect increases our relevance.

When you meet someone new, always pay attention to their vernacular and tone, so you can start speaking in their dialect. All of a sudden, they see you as one of them – you’re an insider and you’ve immediately overcome the biggest hurdle in any new relationship.

I unashamedly use this technique everywhere I go. I speak very differently when I’m on the ABC to when I’m on more commercial media channels. When I’m in the boardroom of a large corporation, I use financial speak: PE ratios, market caps, RPU, et al. When I hang with tech nerds, I double down on geek speak. Not only does it work, it’s fun and you only improve when you start paying attention to it. The cool thing is that it helps everyone go forward. We are far more confident about doing anything new when surrounded by people who also speak our ‘language’.

If we become more proficient in a range of dialects, we can become a translator of sorts and someone who can comfortably bridge two different cohorts. An example might be cultivating a cultural link between a startup and a large corporate. Translators are among our most valuable resources in times of rapid change like today.

Not only is language our killer app, it’s something we should be constantly hacking and paying attention to. If we evolve with it, we can be sure that we are in tune with society and invent a future for ourselves beyond our own expectations.

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Keep thinking,

Steve. 

Houses of the Future – COVID-19 series

Posted on by Steve Sammartino

If you’re like me, you’re probably thrilled to start seeing something other than the four walls of your own home. The Covid-19 crisis will be a long overdue start to influencing changes to the buildings we spend our time in.

The Merger – Now that information work has finally reached its mobility phase, houses and offices will start to change shape. The major change is that spaces for work and living will start to replicate each other, with differences in size and scale. We can already see it in the home. Technology that used to solely reside in offices has begun to spring up in our homes. The technology we now have in the home is usually as good and often better than what we have at work. Offices are starting to look less like cubicle farms with the arrival of lounge spaces, entertainment zones, eating areas – somewhat replicating what we see in boutique hotels. What’s ironic is that this is how things used to be pre-industrialisation. We lived where we worked. Craftsmen had workshops out the back of houses. Bakers lived on top of their shop front. Now that many of us are becoming modern day digital craftspeople, we are going back to that model.

The first part of the process was the delineation of working and leisure hours evaporated. Now it’s about to happen to our spaces and they’re starting to replicate each other.

Caves with Widgets – We’ve been living in caves for a very long time, albeit these days they come with modern day comforts. It is valuable to remind ourselves of how we got to now by looking at how long some of the current technologies in our homes have been around:

  • Letterboxes – Mail services started encouraging their installation in houses for deliveries in the mid-1800s.
  • Indoor plumbing – In the 1860s, only 5% of American houses had running water. Flush toilets were still uncommon until the mid 1900s.
  • Driveways – Only became a standard inclusion fewer than 80 years old ago.
  • Electricity – Uncommon in suburban homes until the 1930s.
  • White goods (electricity needed) – Rare in modern economies until post WWII.
  • Televisions – In 1956 in Australia
  • VCRs – Early 1980s
  • Home Computers – Mid-1980s
  • Internet – Mid-1990s

So what’s coming?

Zero Energy Buildings: The ZEB movement is a system where a building generates all of the energy it requires. In the near future, the walls and roof of every new or retrofitted building will be capable of generating power. This will be primarily through solar and micro wind turbines, as well as piezoelectric technology that converts kinetic energy generated by raindrops hitting a building to electricity – yes, this already exists. The energy rating of buildings in the future won’t just be about efficient use of energy – it will be about creating an excess, more than it needs. It will become the new normal.

Houses that Change Shape: Walls will be moveable in most apartments to maximise space usage across different hours of the day, like hotels often do in its meeting spaces. They’ll become modular. Houses of the future will be designed with non-permanent room sizes, allowing us to get more from less. Kitchens and eating spaces will be able to expand and converted back into lounge rooms or even cinema rooms.

Delivery Boxes Replace Letterboxes: The letterbox is sorely in need of an upgrade. Our houses now are the recipients of packages, not letters. You’d think e-commerce hadn’t happened yet! In the future, letterboxes will have three sections: dry, fridge and frozen, so it could take all kinds of deliveries. Letterboxes will likely be as big as a fridge and possibly underground, with a button for the courier to press, so it could rise up to take the delivery. When a delivery arrives, the recipient is notified and can view live video footage, to verify the delivery person’s identity. Using a smartphone, the recipient could open the delivery unit and check that the delivery is as ordered, using near field communication readers (RFID) and image recognition cameras. The delivery unit would be secure as a safe for delivery of high value items and be powered under a ZEB doctrine.

Upgraded Home Office and Virtual Reality Room: We can expect the home office to receive a massive upgrade. High-end home offices will be as common as gourmet kitchens, given their importance in generating income for many households. We’ll have virtual reality meeting rooms with travelator floors to make us feel that we are in the same room as someone else on the other side of the world. These spaces will lead us to question why we need to go to the office at all. These video studios will be capable of creating content to make even the most advanced YouTuber salivate. We’ll also use our VR rig, including haptic gloves and suits, to shop online for things we want to touch and experience before purchasing. We’ll also use it to exercise and browse holiday accommodation and experiences, using a treadmill to keep us stationary while we seemingly explore other places.

A.I. Enabled: Automation utilising voice and gesturing will replace traditional interactions and buttons to manage re-ordering of household items. We’ll literally be talking to the walls! This is a battleground Amazon, Google and Apple are already deeply ensconced in. Convenience will be high, but privacy and security concerns will need to be overcome for mass adoption.

Drone delivery and landing pads: Our growing parcel deliveries need to land somewhere. Apartment buildings are already being designed with landing pads on rooftops and your house will be no different. Maybe it will have an automatic opening lid that closes over after the drop off has been made or the package might go straight into a delivery box. We can also expect new houses to have rooftop landing pads for Vertical Take Off and Landing (VTOL) vehicles that will become common within 20 years. In fact, ‘flying cars’ have a high probability of beating autonomous vehicles to deep market penetration, given they don’t have to work around existing infrastructure and pedestrian safety issues.

Smart Toilet: I’ve written about this before. We can expect it to be our health partner in life and since Alphabet had a patent approved on the smart bathroom last year, this is one of those realities which will surprise with its speed of arrival.

Smart shower: One that takes a photo of you every day… not to invade your privacy, but to ensure it knows you have a dangerous sun spot long before you do.

Glass = Screen: If you’ve always wanted a house with a view, it’s about to become a lot cheaper than anyone expects. All the glass in our homes will become web-enabled screens. The resolution of our windows will be indistinguishable from an actual view into the real world. All of a sudden, anyone can have a real-time harbour view that changes perspective on different windows in the house to deliver a very lifelike experience. Maybe owners of actual harbour mansions will monetise their views via a live feed cam? Or maybe nimble entrepreneurs can set up HD webcams in places of great beauty? Live feeds of idyllic vineyards in the Loire Valley, anyone?

Charging Stations in All Driveways: Our driving future is all electric, as is our entire economy. Expect that every place cars stop will have a charging facility on hand. If they ever stop – I’ll probably send mine out to work for me when I’m not using it.

So, if you are wondering how buildings will change, wonder no more. The exciting part is that there’s many more changes we could add to this list. In a changing world, this is where tomorrow’s jobs and industries will emerge. The opportunities created are equal for existing companies and startups. The technology for all of these ideas already exists. It’s not a question of if – it’s a matter of who and when.

I had a fun radio interview on this topic you can listen to here.

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Keep thinking.

Steve.