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Preview: Silicon Valley Watcher - at the intersection of technology and media

Silicon Valley Watcher — at the collision of technology and media



Former Financial Times journalist Tom Foremski provides insight into the business and culture of Silicon Valley.



Modified: 2017-01-12T04:33:26Z

Copyright: Copyright (c) 2017, foremski
 



US Venture Capital Investments Plunge In Fourth Quarter 2016

2017-01-12T04:33:26Z

Two major reports on venture capital activity from PricewaterhouseCoopers/CB Insights and the National Venture Capital Association (NVCA) showed a steep drop in US venture capital investments in the last months of 2016 but a strong overall year. 

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Two major reports on venture capital activity from PricewaterhouseCoopers/CB Insights and the National Venture Capital Association (NVCA) showed a steep drop in US venture capital investments in the last months of 2016 but a strong overall year. 

The fourth quarter seed and angel deals fell 43% to their lowest level since 2012. And late stage deals dropped to the lowest level since 2009, according to data from NVCA’s Pitchbook.

A rise in exits is essential in attracting further investment capital. However, investments outpaced exits by a multiple of 11.2 – the highest ratio in more than a decade and exits equalled $47 billion – at 2011/2012 numbers.

However, a more favorable IPO market is expected in 2017 because of well managed and well performing startups lining up for their public debut. 

The MoneyTree Report from PricewaterhouseCoopers and CB Insights found that fourth quarter US deals fell 16% in number and 20% in dollars compared with the prior year. The global full year

 2016 decline was 10% and 23% respectively.

Artificial Intelligence was the hottest area with $705m funding moving into 71 deals in the fourth quarter. One of the big funding losers, surprisingly was Cybersecurity startups reported MoneyTree.

After rising into Q3’16, US Cybersecurity funding plunged 51% to $370M. Deals also dropped to 32, down from 40 in the previous quarter.

“For those who predicted 2016 would be the popping of the venture bubble, it was not. Yes, it was a tougher year in terms of deal activity and funding, but versus 2014, which we can call a more normal period, 2016 compares quite favorably,” said Anand Sanwal, co-founder and CEO of CB Insights.

Looking forward to 2017, Sanwal expects new big investors from the Middle East and Asia to offset any declines from other investors.

MoneyTree reported that Silicon Valley had a steep drop in new capital investments of 37% and 22% fewer deals compared with the third quarter. New England funding fell 41% in the same period.




The Advantages Of A Ten-Year Overnight Success

2017-01-10T23:14:18Z

Lots of great observations on the value of ten-year old startups in this post by Irish entrepreneur Cronan McNamara: Your Overnight Success will be 10 Years in the Making + 10 Innovation Tips for the Long Term He makes a good case that over a ten-year period the founders and management teams have learned a lot and now can leverage that expertise very effectively by using new tools and resources that provide global business opportunities. 

Lots of great observations on the value of ten-year old startups in this post by Irish entrepreneur Cronan McNamaraYour Overnight Success will be 10 Years in the Making + 10 Innovation Tips for the Long Term

He makes a good case that over a ten-year period the founders and management teams have learned a lot and now can leverage that expertise very effectively by using new tools and resources that provide global business opportunities. 


This is why I believe scale up companies, who survive the 10 year horizon, can start to achieve something really special. Gradual progress that doesn’t seem to be too explosive on a day-to-day basis, when compounded over 10 years, can be transformative.

In Silicon Valley those ten-year experts tend to go somewhere else with a new venture but in places like Ireland there is a possibility of keeping teams together and it certainly makes sense that teams that do well together can continue to do well as we see time and again in Silicon Valley serial founders. 

McNamara’s company Creme Global, a successful data science business, is in its 12th year. He shares his top ten tips for success such as:

- Avoid investors if you can — or at least those who are in it for the short term…

- Build a strong team around you so that you can free up some of your time for exploratory work, vision and strategy development and blue-sky thinking…

- The core goal of the funds being generated by the company during scale-up should be to reinvest those funds in R&D until the company finds strong product-market fit with a truly scalable and global opportunity…

- A reproducible, scalable sales process needs to be created.

More here

 

 




Wearables Are Generating A Tsunami Of Useless Medical Data

2016-12-13T00:02:17Z

At a recent media roundtable discussion about the future for wearables, hosted by Vivalnk, I was sitting next to two doctors who have been working in this field as advisers. They told me they don't know what to do with all the data that patients keep sending them from their wearables, heart rate, steps taken, etc. And some wearables collect data on biometric data that's unknown to medical science.  All of that big data and it has no medical value. I was astounded. At a recent media roundtable discussion about the future for wearables, hosted by Vivalnk, I was sitting next to two doctors who have been working in this field as advisers. They told me they don't know what to do with all the data that patients keep sending them from their wearables, heart rate, steps taken, etc. And some wearables collect data on biometric data that's unknown to medical science.  All of that big data and it has no medical value. I was astounded. "We know how to interpret EKG data but we don't know what to do with all the different types of data that are being collected. We can't make medical recommendations," said Dr. Jeffrey Olgin, Chief of Cardiology at UCSF. It requires extensive analysis and the data requires context for it to become useful in improving medical outcomes. There's another problem that has to be solved before the Big Data analysis can be done. "Consumer wearables are not medical grade devices and so we can't tell if they measure data the same way," said Dr. Vernon Smith at Avera Medical Group. Medical grade devices have been calibrated and tested for accuracy and consistency. This is not true for consumer wearables and many users have noticed inconsistent data between wearables. "What does a thirty minute spike in your heart rate mean? Is your ten thousand steps enough exercise? What does your temperature fluctuation mean? We don't know yet," said Smith. "And this will also have to be taught in the medical schools so doctors know how to respond to their patients data." The doctors said that they loved wearables and the massive amounts of data that are being generated but it could take several years before the medical insights are discovered. "A few years to complete the studies is a long time for a startup but it's very short compared to drug trials," said Olgin. But will people continue to buy wearables if their medical value won't be realized for several years? Jiang Li, VivaLnk CEO, says, "There's many types of value from wearables, a lot of people get satisfaction from the data and it can motivate them towards more healthy activities." VivaLnk, which is focused on developing comfortable wearables that can provide continuous and wireless monitoring, has developed a flexible and very thin electronic circuit board called eSkin, that is designed to sit comfortably on a person's skin and monitor a range of biometric signals. It's found in VivaLink's first commercial products: a continuous temperature monitor called Fever Scout that provides medical grade temperature readings; and Vital Scout for monitoring a person's stress and health. Each sends continuous biometric data wirelessly to your smart phone. Li said that the lack of medical grade wearables will change over time and that his company is focused on working with experts in the medical community to produce new wearables that can provide medical grade data that is accurate and usable. Foremski’s Take: For the next few years there won’t be much medical benefit to wearables until we get those big data studies done. And that means there is a danger that all that data collection could be derailed if wearables are seen as a fashionable fad with no medical value and consumers stop wearing them. However, wearables won’t go away although they will certainly change their look as in the fashion industry. And a technology like eSkin is flexible and thin enough to slip behind whatever is hot that season. They'll all become cheaper and will melt into the framework of our daily lives. The potential impact of wearables on[...]



Illuminate - Duarte Debuts New Movements Marketing Practice

2016-12-02T23:39:21Z

The Silicon Valley firm that helped Al Gore create a movement to curb climate change introduces strategy team to help leaders spark and sustain change. Guest post by Chris Knight  In 2012, Nancy Duarte and Patti Sanchez set out to write a book to help business leaders envision the future and make their big, audacious visions a reality. In their 2016 book Illuminate: Ignite Change through Speeches, Stories, Ceremonies and Symbols, they lay out a five-part taxonomy for leadership movements. Based on four years of in-depth research, Illuminate is rich in case studies about how great leaders like Apple's Steve Jobs, Starbucks' Howard Schultz and Dr. Martin Luther King Jr. used speeches, stories, ceremonies and symbols to mobilize the masses. In a review of Illuminate, Forbes’ contributor Nick Morgan highly recommends the book for organizations that are keen on thinking through and telling stories that take “best advantage of human cultural symbols, signs and signposts along the way. You can run an organization without telling stories to bring employees, customers, and the public into your fold – but you can’t run it very well.” The Silicon Valley firm that helped Al Gore create a movement to curb climate change introduces strategy team to help leaders spark and sustain change. Guest post by Chris Knight  In 2012, Nancy Duarte and Patti Sanchez set out to write a book to help business leaders envision the future and make their big, audacious visions a reality. In their 2016 book Illuminate: Ignite Change through Speeches, Stories, Ceremonies and Symbols, they lay out a five-part taxonomy for leadership movements. Based on four years of in-depth research, Illuminate is rich in case studies about how great leaders like Apple's Steve Jobs, Starbucks' Howard Schultz and Dr. Martin Luther King Jr. used speeches, stories, ceremonies and symbols to mobilize the masses. In a review of Illuminate, Forbes’ contributor Nick Morgan highly recommends the book for organizations that are keen on thinking through and telling stories that take “best advantage of human cultural symbols, signs and signposts along the way. You can run an organization without telling stories to bring employees, customers, and the public into your fold – but you can’t run it very well.” Last month, the Sunnyvale-based firm announced the launch of a new strategy practice to help leaders ignite powerful, persuasive movements built on the strategic framework and insights from Illuminate.  For the past 30 years, Duarte has played a role in many movements that matter, including its work with Silicon Valley's leading brands such as Cisco and Salesforce, former Vice President Al Gore's "An Inconvenient Truth," and the transportation revolution led by Hyperloop One. Duarte helped Hyperloop One crystallize and communicate its vision for high-speed, on-demand transportation during its first public technology demonstration in the Nevada desert in May 2016. NBC Nightly News was one of the many media outlets to cover the first moment of that movement here. Introducing Duarte’s new strategy practice team…   From left to right: Patti Sanchez, chief strategy officer and co-author of Illuminate; Becky Waller Bausman, SVP; Brie Osgood, communication strategist; and Dave DeFranco, communication strategist. (Photo credit: Chris Knight) Duarte's new team of senior strategists are veterans of moving audiences through systematic use of empathy, storytelling and impactful moments. Practice leader Patti Sanchez has led transformative communications initiatives for brands including Cisco, Hyperloop One, Hewlett-Packard and VMware for more than 25 years. Other founding practice members include three new senior strategists experienced at C-suite advising: - Becky Waller Bausman, SVP of Strategy at Duarte, whose background is rooted in positioning and product strategy.  - Dave DeFranco, who’s led sales enablement and change initiatives for many of the w[...]



Facebook is a tech-enabled media company

2016-11-18T21:34:11Z

Every day Facebook publishes millions of pages of content with advertising - what's "not a media company" about that? Yet Facebook founder and CEO Mark Zuckerberg has lately been determined to identify Facebook as a tech company who's engineers are on a global mission of simply trying to connect people with each other. Reuter's Giulia Segreti reported on Zuckerberg's recent comments in Rome, where he visited the Pope. Every day Facebook publishes millions of pages of content with advertising - what's "not a media company" about that? Yet Facebook founder and CEO Mark Zuckerberg has lately been determined to identify Facebook as a tech company who's engineers are on a global mission of simply trying to connect people with each other. Reuter's Giulia Segreti reported on Zuckerberg's recent comments in Rome, where he visited the Pope. "No, we are a tech company, not a media company," said Zuckerberg, after a young Italian asked him whether Facebook intended to become a news editor. "...we build the tools, we do not produce any content The world needs news companies, but also technology platforms, like what we do, and we take our role in this very seriously." But Germany's Justice Minister Heiko Maas objects and wants Facebook to be treated as a media company "even if they do not correspond to the media concept of television or radio." The European Union is concerned about hate speech on Facebook and if it were a media company it would be able to force it to act faster in removing it. Media defines responsibility... The battle over defining Facebook's business is not a semantic issue - it is much more serious. It could devastate Facebook's business model and that of many other "technology platform" companies. The difference is in responsibility: - Media companies are legally responsible for the nature of the content that they publish. - Facebook has no legal responsibility for the content it publishes because it is a technology platform - it doesn't create the content. However, Facebook does choose what to put into people's news feeds and it deletes content that violates the editorial policy of its terms of service. Some of this is done by automated tools but a lot of it is done by people. This means that Facebook is making editorial choices of which content to publish. That sounds like a media company. But if Facebook were defined as a media company it would have to employ thousands of staff to delete hate speech and keep other illegal content off the site. It would have to do this for every country and observe their media laws. It would be horribly expensive. It's not just Europe: The recent presidential elections resurfaced this issue and now Facebook is facing mounting pressure in the US. A Washington Post column by Hayley Tsukayama headlined: Facebook must confront the responsibilities of being a media company If these companies continue to push their media efforts, they can't then shy away from the responsibilities that come with the business. Foremski's Take: If Facebook loses its tech platform status then Google Search and Youtube won't be far behind, and the same for others. It would result in a massive redistribution of responsibility in our modern world. Media companies daily shoulder the high costs of their responsibilities in publishing content. But Facebook, Google et al, argue that they have no such responsibilities to society - as is plainly seen in their aggressive tax payment strategies. Given the rising importance of these companies to society, and the digital global economy, it is becoming an indefensible position. As governments begin closing tax loopholes there is another loophole that will come under tighter focus: technology platform. Like taxes, it's about taking responsibility for being a part of society -- not standing apart. It's unavoidable. - - - Please see Ross Mayfield: Facebook Can Address Fake News and Raise Media Literacy [...]



Redfin: Big Jump In Women On Tech Boards Could 'Reshape' Business

2016-11-18T00:45:57Z

The number of women on the boards of tech companies has more than tripled since 2013 according to analysis of 100 public technology companies by Redfin, a national real estate brokerage. The study says that tech company boards began to change because of a newspaper story. The New York Times pointed out that Twitter, which was preparing to go public in 2013, had an all-male board.

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The number of women on the boards of tech companies has more than tripled since 2013 according to analysis of 100 public technology companies by Redfin, a national real estate brokerage.

The study says that tech company boards began to change because of a newspaper story. The New York Times pointed out that Twitter, which was preparing to go public in 2013, had an all-male board.

Over the past three years, tech companies filing for an IPO have tripled the number of women appointed to their boards. The national average is one woman for every six men.

But in the space of three years, this ratio for the technology industry changed threefold, to one woman for every two men: not at parity, but evidence that the technology industry's gender diversity can increase significantly.

In a blog post, Glenn Kelman, Redfin's CEO, and Bridget Frey, Redfin's CTO, argue that even though women will continue to be in the minority on boards, their influence will be larger than their numbers.

It's worth noting that the presence of just one different perspective affects a group's decision-making. This effect, known as a "panel effect," is well-established ... the influence of the member in the minority is strong: what matters is just hearing another point of view.

They point out that, "Boards hire CEOs, set executive pay, investigate high-level discrimination complaints and approve executive promotions."

The rise in diverse appointments could re-shape an entire generation of new businesses in profound ways

Read about Redfin's recent appointment of board directors Julie Bornstein and Robert Bass.

How to Triple the Number of Women Appointed to Boards in Three Years - @Redfin




HBO Comedian Loves That Silicon Valley Can't Take A Joke

2016-11-15T23:37:33Z

The winter issue of CNET Magazine is out and comedian T.J. Miller is on the cover and featured in an interview. Miller is one of the characters in HBO’s sitcom Silicon Valley. In the interview he says, I consider everybody who takes themselves seriously to be a little bit off,” Miller says. “And Silicon Valley seems to be the most effusive about how important their contributions are to society. Miller proved his point last year when he hosted The Crunchies awards and upset many in the audience with his jokes about startups and the organizers said he would not be asked back. Please see: The Crunchies’ Bitchgate: High Horses With Fake Unicorn Horns Ignore Decades Of Silicon Valley Misogyny -SVW

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The winter issue of CNET Magazine is out and comedian T.J. Miller is on the cover and featured in an interview.

Miller is one of the characters in HBO’s sitcom Silicon Valley. In the interview he says,

I consider everybody who takes themselves seriously to be a little bit off,” Miller says. “And Silicon Valley seems to be the most effusive about how important their contributions are to society.

Miller proved his point last year when he hosted The Crunchies awards and upset many in the audience with his jokes about startups and the organizers said he would not be asked back.

Please see: The Crunchies’ Bitchgate: High Horses With Fake Unicorn Horns Ignore Decades Of Silicon Valley Misogyny -SVW

Also in the Winter issue:

- A winter buyer’s guide with 61 excellent gift ideas, just in time for the holiday shopping season. From tiny drones that fit into the palm of a hand to chic wireless speakers fashioned from organic glasses, CNET breaks down this year’s most coveted tech products.

· In “Can the Rhino Be Saved?,” CNET takes an in-depth look at how scientists, conservationists and tech companies are working to stop poachers from killing rhinos who are on the edge of extinction.

· The tech industry is the source of great wealth in San Francisco, but can it help the city’s least fortunate? In “Tech and the City,” CNET examines if tech can help solve San Francisco’s homelessness problem.

· CNET catches up with actor Dan Fogler, star in the Harry Potter spinoff movie, “Fantastic Beasts and Where to Find Them,” who shares his thoughts on the new film and technology’s role in creating special effects.

· CNET editor Dan Ackerman provides an excerpt from his new book, “The Tetris Effect,” who explains how this simple game from the Soviet Union became a global phenomenon.




Glassdoor Study: Big Gender Gap In Key Tech Salaries

2016-11-15T22:58:14Z

Robert Hohman, CEO of  Glassdoor announces gender pay gap study at Stanford University Many US tech jobs show high levels of gender pay discrimination, well above other professions reports online jobs site Glassdoor in a study of more than 500,000 salaries. The report listed the widest gender pay gap as 28% for computer programmer, 16% for game artists, 15% for information security specialists, 11% for software architects, and 10% for SEO strategist. A further 11 jobs were singled out for gender pay gaps, the lowest 2% for hardware engineers.

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Robert Hohman, CEO of  Glassdoor announces gender pay gap study at Stanford University

Many US tech jobs show high levels of gender pay discrimination, well above other professions reports online jobs site Glassdoor in a study of more than 500,000 salaries.

The report listed the widest gender pay gap as 28% for computer programmer, 16% for game artists, 15% for information security specialists, 11% for software architects, and 10% for SEO strategist. A further 11 jobs were singled out for gender pay gaps, the lowest 2% for hardware engineers.


For 12 of the 16 job titles the gender gap was well above the national average across all types of jobs  highlighting the size gender pay gap in tech jobs.

Andrew Chamberlain, Chief Economist for Glassdoor said,"The majority of the tech roles we examined for this analysis had male-female pay gaps well above the U.S. average--even after we accounted for differences in age, education, experience, and other important factors."

Chamberlain could give no explanation for why the gender gap exists in tech jobs.

"While there is no one simple solution to the gender pay gap in tech, we are committed to working to close the gender pay gap through greater pay transparency."

Chamberlain points to a welcome overall trend: the gender pay gap has narrowed from 41% in the 1950s to to 24% today.

Glassdoor is encouraging employers to use its statistical models on their payroll data to compare "apples-with-apples" and uncover any gender bias. The statistical models have been refined to account for many job factors such as experience, seniority, etc so that gender is the only factor left.

Foremski’s Take: What's missing from the data is the numbers of females and males in each job. Gender bias is not just seen in salary data but also in hiring levels. It would be interesting to see those numbers and it would certainly be compatible with Glassdoor's campaigns for greater workplace transparency.

But creating diversity in the workplace is difficult because employers legally cannot hire based on any qualities of diversity such as color, gender, sexual preference, etc. Hiring the best person for the job is the only legal requirement.