Study Tour Digital Leadership, Group 2 – Day 1
Finally, the day has come to start the study tour of the CAS Digital Leadership in the Bay Area (San Francisco & Silicon Valley). Claudio Thürlemann and Andreina Naef reported from this interesting and intense first day.
Welcome and overview
The day started at 9.00 am where our study class met at the MetaDesign office in Battery Street in Downtown San Francisco. Our host Joanna Lee welcomed us. After a quick introduction of herself and every member of our study class, we received an overview on the schedule of the whole week and more information about all the different guest speakers and visits at the different companies. The focus of this week is on established companies like Cisco which have to compete against new, trendy startup companies but also on successful companies like Facebook which were used to begin as a startup. And to make this week complete we will get more insights how Swiss companies take part here in the Bay Area.
Andy Giles, VP Client Engagement at MetaDesign, gave us a quick introduction about what MetaDesign stands for and what the company does. Their key message is: “THE BEST BRANDS MAKE IT LOOK EASY. IT ISN’T.” This means MetaDesign’s focus is on helping organizations of all sizes harness the power of brand to realize their potential. MetaDesign creates, maintains and evolves brands. The company operates in San Francisco since 1992 and employs 20 people nowadays. They have offices in 6 different cities as it is important to be close to markets and clients. Their biggest clients are Adobe, Apple, Audi, Intel, Volkswagen, Coca Cola, Sony, Nike, Samsung, eBay, T-Mobile, DHL.
MetaDesign offers various services:
- research & insights
- brand positioning
- brand identity
As the above mentioned key message indicates, creating a successful brand requires a strong and interdisciplinary team. Andy showed us several examples of brands MetaDesign has built or evolved in the past. MetaDesign’s standardized process contains four steps:
Mostly, clients want to see a final logo for their product or company which is design by MetaDesign. The whole process is not that easy. In a short wrap-up the four steps tells us that, firstly, MetaDesign wants to understand the clients challenges and needs and, based on these insights, they develop a positioning strategy and brand identity. Several interviews and meetings are needed to get align with the customer’s expectations. Short processes to get the approvals are very helpful for both sides. The last step is the implementation and ensures the continuity and recognition of the customer’s brand.
Just a few but important thoughts about MetaDesign’s culture to survive in the highly competitive tech environment of SF and Silicon Valley:
- You need to speak the language of tech
- It’s a culture based on partnership and collaboration
- Be ready to use the client’s preferred communication technology
- Smaller stakeholder teams, speedy feedback and approvals
- Time, time, time – fast turnarounds, built for now
- Always have digital in mind
- Messaging is equally important as strategy and design
- Leave your tie at home!
What is Silicon Valley?
After a short break Chuck Darrah, Professor at the San Jose State University, Department of Anthropology, gave us an overview about the culture of Silicon Valley.
When you think about the Silicon Valley words like “innovation”, “inspiration” and “tech” comes to your mind. This is what the Silicon Valley is known for. Darrah is an anthropologist. But what does an anthropologist do? Anthropologists like Chuck Darrah want to see behind the wall. They are interested in what people are doing, not what they are saying about they are doing (because in reality they don’t do what they say). Just an example: people are telling they don’t take any work from the office to home, but they leave the office with their notebook and a lot of paper.
Darrah like to see behind the scene, behind the facade. Due to this fact we realized that we are going to get more information about what the Silicon Valley really is and that there are dark sides too.
The Silicon Valley bubble
When we talk about the Silicon Valley we mean an area of only 1854 square miles with a population of about 3 million people. It is a highly concentrated area. The Silicon Valley is so small that people can change their job, their company, without moving. This is not usual in the US (compared to Switzerland). The Silicon Valley is a place for pure innovation, there is no doubt. Knowledge is shared and the focus is on problem-solving with the help of tech. Failing is good because it means you took risk. People’s dream here is to turn industries with the help of technology.
The Silicon Valley is a job machine. People come in, people go out. Over 14,000 people a year come to Silicon Valley and try their chance. You don’t need more than 1 week to get a member of the team in a new company! People don’t stay that long at the same company. Software engineers for example are staying 10 months in the same company. The Silicon Valley is like a bubble where the biggest tech companies got their headquarters and find perfect conditions to test and experiment with new products and services.
Probably 50% of the people are working in tech or tech-related jobs. Oh, and you are pretty old at Silicon Valley when you got more than 35 years!
The other side of the coin
The best-paid jobs are at tech companies. In the Silicon Valley people get paid a high salary. The average earnings are $ 122,172 (and this is around 50% more than other US people earn). This inequality leads to rising prices. People with non-tech jobs can’t afford to live in the Valley or in San Francisco anymore. They often have two or three jobs at the same time. There are places with addresses people would kill for to build up their offices here!
People used to be forced out of the area because of the high prices, rising prices, rising rents and the extraordinarily high cost of living. There are many more jobs than place to live here. People commute over hours because they cannot afford to live here. A given example: a family with four boys, all in high school, cannot afford to live together. The parents give their boys to four families, one boy to every family. The parents live in a car. Just to be able to buy the school fees.
Another problem is the ground water pollution. In the past, the focus was on the air pollution. Companies invested in better production plants to reduce the air pollution. Nobody was interested in what is running into the ground.
When it comes to diversity the picture of the Silicon Valley is not that good as it should be. There are still few women working in tech.
And not to forget the social aspects of this churning job machine: people come and go. This leads to an attitude of the locals (or the long-term contractors) that they are not willing to invest their time in other people who got a short-term contract and will be moved away after a short time.
So what makes Silicon Valley so special?
The Silicon Valley is a land of cultural diversity. 37.4% are foreign born. It is a global magnet. You can find the most intelligent people here. And their dream is to solve problems with the help of technology. They don’t believe in solving problems with politics. It is the land of dreams. If you work hard and be lucky you can make a lot of money. And if you fail you stand up again and try it again. People usually land on their feet because of the churn of job and people. If you lose the job, you can find a new one within 30 minutes!
What is essential to the Silicon Valley is its cultural diversity. Tech companies are continuously looking for the biggest talents around the world. Efforts like these of the new president Trump to close the borders and to reduce the immigration are a dramatic risk for the whole Silicon Valley.
In the afternoon we visited Lithium Technologies, where we had the chance to meet one of the founder of Lithium Technologies, Kirk Yokomizo. After a visit of the whole office, we got the introduction from the founder itself. He was a software engineer and is now working in HR and actually he is still on a break from university, which he left even before Lithium Technologies started.
His first experience about what Lithium Technologies is doing today was his first ride with Uber. This was also the first drive of the driver, which had a mix up with the transport fares during the ride. Kirk rated the ride with 5 Stars, but commented about the mix up with the fares. Uber responded very fast, to thank for the ride and also about his comments and gave him the fare back. So he was very impressed, that they could respond even so it was a 5 Star rating. Which he wanted to have everywhere, to be able to respond so quickly to a customer.
But this is exactly what happens; the new digital world is setting new bars what the rest of the market needs to reach.
People are solving its problems for themselves, YouTube is helping them very easy, this new behavior leads to new:
- increase of expectations
- lack of trust
- your self-doing attitude
Lithium wants to simplify the interaction for the clients. These are the 3 pillars, lithium is having his business:
- Connect: how companies can connect on different social channels
- Engage: branded dot com community and conversations
- Understand; Understand due to analytics and being able to do the right offerings
With all this points, it is a win for both sides, the company and the customer, which is rather seldom.
- For brands it reduces costs, drive revenue and increase nps
- For people they can make smart decisions, have a better service and are heard
The overview of the client list is very impressive. The most proud they are on google, as they are not working with externals. So Lithium is the only external partner within community and they are proud on their position.
The Values of Lithium are very important and will be needed like a DNA of the company. The most important one is the personal connection to the customer.
Phases of Lithium Technologies
Lithium started in 1997 as gamers.com. So originally, they were professional gamers. The revenue was by selling ads. Gamers.com grew till 150 employers but where reduced back to 6 employers. However gaming and BYS = Build your own Source is kind of the DNA of lithium.
2001: After working together with dell, Lithium was founded in 2001 with 2 customers
2008: First global expansion into Zurich and London
2009: Keibi acquisition, where they could distribute content in diverse communities
2010: Scout labs acquisition
2011: New CEO Rob Tarkoff, which was a big shift to have a real enterprise company
2013: Acquisition of social danymx
2014: Acquisition of Klout; was bought to get data into the company, which is not easy if you are not a data driven company.
What after all was very impressive, was how they started. As same gamers doing a business, which they were not really knowing what they were doing. They didn’t understand first, how they could do new business models. Also their offices were very simple equipped, what meant their server were not really saved and of course not redundant stored. And they had to move in other locations, where they put all the electronics in one car. Even parked it in front of a restaurant without any security interventions. So somebody could have just stolen the car or everything destroyed within an accident.
Therefor the shift to the new ceo, was very important. As he could bring in all the enterprise knowledge, which they didn’t have so far. So now moving within one car only, would never be an option. So rules and regulations where needed.
- a lot of things have to go right, to keep a company running. They had a lot of security issues, but were just lucky, that nothing happened. So enterprise-knowledge is needed. Now it is an enterprise company, security is the basis.
- Human is still more important than anything else.
- Professional gamers are a metaphor also for failure attitude. If you fail in a game, you have to start from scratch. But as long as you learn from the game, you will get a little bit further the next time and you start from scratch again. Every failure increases the learning curve.
Our last visit on day 1 was the valora lab. Cyril Dorsaz is the Digital Innovation Manager at the lab in San Francisco and presented us his work and the vision of the Valora Lab. We visited him at the co-workingspace in Westfield. Westfield is a famous shopping center and is investing in this co-workingspace. On one side of course they are interested in the revenue out of renting a working space there. On the other hand it is an investment in their brand. Being known for innovation, having a changing shopping experience due to pop up shops and supporting the connection between entrepreneurs and companies.
Valora is better known as the Kiosk in Switzerland and not representative for innovation. However as facing the issue, that the retail market was going to transform drastically, they needed to change their strategy. With constantly declining sales figures of newspapers and magazines they started focusing on food and beverages and they wanted to focus also external of Switzerland.
1.6mio customers per day are consuming any product from Valora in Europe, in Switzerland it is 900’000 a day. That means around 10% of the population of Switzerland is consuming every day at Valora. They do have 2.5 bio revenue and have 2549 shops within 5 countries. This is a basis, which gives a lot of power.
Even so the statistics show, that people are coming less to shops and buying more online a lot of only online shops are starting to open stores like Amazon. The reasons are the following statistic figures:
- > 85% prefer to shop in stores to be able to touch the products
- > 51% research online and purcase offline
- >93% still buy offline
These figures are showing, even so the retail market is going to change massivly, that there is still some time, to profit from today and to innovate in the future.
Innovative examples from today
Enclosed there are some examples, of already existing retail innovation, which could be a new business also for Valora.
- Postmates is an app, where you can buy anything from every store and somebody is buying it for you and bring it to you for 8 dollar. It is kind of an Uber functionality, instead of a taxi, a postmate is doing your shopping. Everybody can be a postmate.
- Starship robots. Robots, which carry the products. So it could be a combination of postmates – instead of a mate you have a robot.
- Oshbot is a small robot, which shows you where to find a product you are looking for within a shop.
- Coffee shopping should be easier, so you could buy a coffee by an app and when you arrive at the machine, a robotarm is preparing the coffee and bring it to you. In contrary to a normal coffee maschine, it would be still premium coffee. Nevertheless, it will never be a barrista.
- A chatbot functionality was already launched 2 weeks ago by valora
- Amazon, Samsung,Google etc. are launching intelligent boxes, which executing a lot of tasks or questions from the customer. Like Alexis where you can order pizza or Samsung having an intelligent fridge.
That’s why valora is here, to find some new ideas and trends and launch – with new inputs or within collaboration.
How to get the innovation factor
- Infom & connect;
a comprehensive understanding of the future, customer needs, trends, and upcoming technologies will be developed
- Learn & empower;
Building digital capabilities to drive adoption of the latest and best-in-class digital innovations, empowering employees to become digital leaders and advocates
- Experiment & execute;
A platform for experimentation in a safe environment and funding proof of concepts will be provided; honing in on what works and scaling together with the business
The Valora lab process, how this innovation will get into production:
A clear vision what the valora lab will achieve and how it will be measured, still needs to be defined.
3 examples what valora did:
- Valora app for spectacolo
- Scan and go, in apple store to check online, that you get in line
- Kkiosk, which you can scan and go the things yourself for buying
- Chatbot on ok and they have already 8000 chats after the launch 3 weeks ago
What is very important to the valora lab team in Switzerland is, that the team needs to be very much connected with the customers back home. Therfore the lab is working very closely with the labs in Switzerland by having meetings and workshops on a regular basis.