There was plenty of interesting news the last month or two. There were a number of enterprise software mergers. Many large capital investments closed. Legislators are looking harder at facial recognition and AI was omnipresent. Of course, a number of new jargon terms appeared. Let’s start with that….
Words/Phrases of the Month
I’m always amazed at new tech words in print (or the occasional Freudian slip someone makes at an event). This month’s new flubbed word is: “Digitalized”. It’s what happens when someone digitally transforms the word digital.
Recently, I noticed a slew of new tech jargon/words including:
A Plus – According to Inc. magazine, A Plus is replacing FAANG (i.e., Facebook, Apple, Amazon, NetFlix, Google). A Plus stands for Airbnb, Pinterest, Lyft, Uber, Slack, Stripe and Square. Adjust your stock portfolio now folks! (Yes, Inc. understood that this really spells A Plusss)
Blockbustered – What happens when an old school firm fails to adapt to a new digital existence.
Crypto Winter – Again, Inc. noticed this one. It describes the recent and incredibly deep bear market slide on cryptocurrencies.
Shallowfake – This is a picture or video where one person’s face (and/or other attributes) are replaced with another. The result, though, is such an obvious fake that no one would believe it to be true.
Deepfake – A Deepfake is like a shallowfake except that the quality of the switch is so good it’s quite believable.
I’d like to add Softfake to this list. A softfake happens when a software vendor uses PowerPoint or slideware to convince a prospect that the software contains some mythical functionality when it doesn’t. I spent time this last month with a CRM customer who got Softfaked into buying a product that doesn’t do what was demonstrated.
Money, Money, Money
In the “Brother can you spare some change” world of venture capital, several enterprise software firms went to the equity markets to get some extra funding. HR vendors got a lot of the cash this time around. Here are some of the deals that caught my attention:
- AllyO, an AI-heavy recruiting tech vendor, did a very big Series B round. They raised $45 million (the prior funding was a cumulative $19 million). Venture backers clearly liked the AI focus but more likely appreciated AllyO’s very aggressive growth (privately held AllyO claims to have grown 4.5X in the last year).
- SmartRecruiters did a Series D round and raised $50 million. I spoke with SmartRecruiters’ CEO, Jerome Ternynck about the recent financing and other SmartRecruiters news. He confirmed the funds will be earmarked for continuing growth globally. The SmartRecruiters application was initially launched in 2011 as a next generation ATS (applicant tracking system) but it has continued to grow in its depth and breadth of functionality. The company is moving more upmarket while growing total customer count. SmartRecruiters has also been developing a fairly robust application partner platform.
SmartRecruiters has also developed AI capabilities as part of its ATS/Recruiting solution. The software can now ‘learn’ what recruiters want to see in resumes and it brings those resumes forward for recruiters to peruse.
- Aera did a big capital round, too. According to Aera:
Aera Technology announced an $80 million Series C financing round bringing total investment in the company to $170 million. Led by DFJ Growth, the round includes participation from the company’s executive leadership, NewView Capital and Georgian Partners.
Aera is the cognitive technology that enables the Self-Driving EnterpriseTM. Using proprietary data crawling, industry models, machine learning and artificial intelligence, Aera automates and augments how decisions are made and executed. Aera has achieved large-scale adoption at some of the world’s largest companies to drive their complex supply chain decisions from Inventory Optimization and Touchless Planning to Order Management and Trade Promotion.”
I’ll probably knock out a longer piece on Aera soon. Our own Phil Wainwright did a big piece on Aera that also touched on this capital raise. Words cannot do justice to what Aera has. If you ever get the chance to see how they integrate data from internal (e.g., ERP), sensor and external data sources together and apply ML, process automation, workflow, exception handling, etc. to supply chain and other problems, do it. It’s amazing.
M&A was in the air, too
Montage and Shaker got hitched recently. This one is an interesting combination – it should also be highly synergistic, too. Montage has a number of recruiting technologies (e.g., video interviewing) that create a better recruiting experience for jobseekers and improve the productivity of recruiters. Shaker has a number of pre-hire assessment tools (among other things). Both firms were well into developing new AI powered recruiting technologies.
More on this merger can be found here.
Montage had just completed an alliance with ERP vendor Infor earlier this year.
ThinkHR and Mammoth bring together technology, content, and subject matter expertise to help employers manage their compliance responsibilities and engage their people. The merger is highly complementary and combines ThinkHR’s leadership in the insurance market with Mammoth HR’s depth and breadth in the payroll and human capital management (HCM) software markets. Over the last decade, ThinkHR and Mammoth have delivered some of the most innovative and successful HR solutions for employers, including cloud-based, on-demand advising solutions, self-service employee handbook software, a benefits document creation platform, and comprehensive content libraries.
Collectively, the companies support more than 350,000 employers nationwide through a network of more than 1,700 partners in the insurance, payroll, HCM software, and professional employer organization (PEO) industries.
Articles of note
The sky’s the limit when it comes to Big Data. This Bloomberg BusinessWeek piece, Interrogating the Planet, describes a number of interesting ways that satellite imagery is being used to understand the strength and drivers behind the world’s economies. A very good read.
In “Apple’s Original Sin” in the Summer 2019 Fast Company, we learn about a number of privacy issues that iPhone users face and why it must become Apple’s responsibility to deal with it. The article covers many issues but also singles out several categories of apps. As to weather apps, it states
“Weatherbug, Weather Channel, and other forecasting apps should be used with the awareness that they’re probably tracking and selling your location information. Strafach calls weather apps the worst data-privacy offenders across the board.”
In “The GDPR Needs to Have Its Teeth Sharpened”, we find this tidbit:
But if a similar law is passed here, we cannot let our version of the GDPR go the way of the National Do Not Call Registry.
When it was introduced in 2003, the Do Not Call List was hyped as the ultimate in consumer protection. Today, it is little more than a suggestion, if not an outright joke. With autodialers, telephone number spoofing, robocalling, and identity masking technologies, bad actors place calls to phone numbers on the registry all the time without fear of government reprisals.
Though both my cellular and landline phones are part of that database, which contains about 235 million numbers, not a day goes by when I don’t get at least one illegal call with a recorded message offering to help me pay down my nonexistent student loan, buy me out of the timeshare contract that I never signed, or charge my credit card for a donation to some fictional charity.
Return on Experience (ROX) is a new-ish metric that captures how well a company is addressing its customer experience and employee experience programs. Strategy + Business gives a quick primer on how companies can get started on this.
Beyond (facial) recognition
Facial recognition software is getting mixed adoption signals. In totalitarian regimes, it’s being used as a means of monitoring the movements and associates of their people. In contrast, Big Brother concerns are triggering some governmental entities to restrict the use of such technologies. One example of this can be found in a recent Bloomberg BusinessWeek article “The Wrong Digital Ban”. The article has a number of positive use cases listed within it; however, I’m definitely more worried re: corporations misusing and/or selling this information with the wrong players.
The Wall Street Journal reports that San Francisco is banning facial surveillance technology. Other cities and states are apparently considering bans or at least laws to prevent firms, police departments and others from new deployments of the technology until legislators better understand the implications of this technology on civil liberties. This should be a fun one to watch.
In a related note, voice and other biometric technology is getting smarter. In a recent Inc. magazine piece, we see:
Amazon recently secured patents for biometric sensing, including for an Alexa feature that could listen not just for your words, but also for your tone of voice, your coughs, and even your level of stress or fatigue. The result: a machine that may someday passively detect if you are sick. But Amazon could go further: It could determine whether other people in your neighborhood also sound congested, as well as analyze your previous online shopping habits and sift through your past grocery receipts to make a range of shopping suggestions--cough drops, fresh chicken soup, tissues. It might also trail you around the web with digital ads.
It would be fascinating to find out what Amazon would think of my coughing, et.al. during analyst briefings.
AI in the news
If you’re even a little bit curious about AI and where it’s going, I have a couple of strong recommendations for you:
- The Summer 2019 issue of MIT Sloan Management Review – Almost the entire issue focuses on AI.
- “Building the AI-Powered Organization” in the July-August 2019 issue of Harvard Business Review. This article zeros in on the cultural and other soft side issues you have to consider when rolling this stuff out.
In a recent Strategy + Business, there is a thought-provoking piece titled “Team Human vs. Team AI”.
We shape our technologies at the moment of conception, but from that point forward, they shape us. We humans designed the telephone, but from then on, the telephone influenced how we communicated, conducted business, and conceived of the world. We also invented the automobile, but then rebuilt our cities around automotive travel and our geopolitics around fossil fuels.
Artificial intelligence adds another twist. After we launch technologies related to AI and machine learning, they not only shape us, but they also begin to shape themselves. We give them an initial goal, then give them all the data they need to figure out how to accomplish it. From that point forward, we humans no longer fully understand how an AI program may be processing information or modifying its tactics. The AI isn’t conscious enough to tell us. It’s just trying everything and hanging onto what works for the initial goal, regardless of its other consequences.
It's an interesting perspective as it provokes us to think about the long-term care, feeding and monitoring we should be exercising regarding AI-related technologies. An important read IMHO.
Platforms and trust
Every enterprise vendor today is hyping their platform. The Wired article, “False Promise”, addresses the challenges, problems and issues re: trust in consumer platforms (e.g., Facebook). In my opinion, the issues raised in consumer platforms will be quite similar to those that could appear in enterprise apps. Enterprise vendors would do well to examine how others could fake reviews of partner apps, post disinformation, create fake users, create fraudulent transactions, etc. Any of those events will trigger a loss of trust in the platform and that could be highly detrimental to the future sales, renewals and financial stability of the solution provider. Self-examination and diligence are definitely in order.
In HR news
Harvard Business Review has a superb piece by Peter Cappelli “Your Approach to Hiring Is All Wrong”. The title had me hooked right away.
The big problem with all these new practices is that we don’t know whether they actually produce satisfactory hires. Only about a third of U.S. companies report that they monitor whether their hiring practices lead to good employees; few of them do so carefully, and only a minority even track cost per hire and time to hire. Imagine if the CEO asked how an advertising campaign had gone, and the response was “We have a good idea how long it took to roll out and what it cost, but we haven’t looked to see whether we’re selling more.
Staying on the wrong hiring approach, I was reading a piece in MIT Sloan Management Review (“The Plight of the Graying Tech Worker”). This paragraph caught my eye:
Employers should be more cautious about pursuing strategies that discount the contributions of older workers. In recent years, some companies realized too late — after older employees had departed — that longtime employees possessed critical knowledge and experience. Moreover, whatever cost reductions companies achieve can be ephemeral if young hires move on to other opportunities.
I noticed this because a speaker at the recent SmashFly Transform event spoke of the job tenures of different generations of workers. My own family experience mirrors these slides with me sticking with a company for 15+ years while my children average closer to 3 years. This is important to remember as few HR leaders are winning the war for talent. Even if they can find replacements for some of their open positions, they can’t find more to fuel outsized growth.
If firms cannot get enough tech talent, they might be far better off retraining older tech workers than trying to hire younger tech workers who will likely leave them in just a couple of years. Older tech workers might be a better long-term play because they will stick around.
Large numbers of retirements of Baby Boomers and the institutional knowledge they possess was the focus on this Bloomberg BusinessWeek story (“’The Don’t Ask’ Conversation”). This caught my eye:
With 10,000 baby boomers turning 65 every day – and continuing to do so for the next decade – employers are grappling with how to handle the exodus.
With that much of the workforce turning over, the implications to employers are manifest. In just one area, technology, employers may need to assess:
- How attractive their technology is to new entrants to the work force? My own children chafe at the thought of working with software with old user interfaces, poor integration, etc. They expect consumer grade UX in everything they touch at work.
- How powerful is their technology? A panel of recent accounting graduates I saw made it abundantly clear that they don’t want a career that involves dumping data into spreadsheets and then reformatting that into some reporting packet. Nope, they want to add value to the organization. They want to connect financial and operational data together and provide real guidance/insights to the leadership of their employer.
Ending on a public offering (IPO) note
With half of the year gone now, we should still see a number of new IPOs floated. Don’t be surprised if new offerings come with lots of record valuations and stock volatility of the new offerings could be material.
Who are some of the potential IPOs? Here’s a partial list:
- Palantir Technologies
Interestingly, there’s this BusinessWeek piece, The Nadellaissance, about Microsoft’s valuation rise under Mr. Nadella’s leadership. This soundbite is notable:
In an interview at Microsoft Corp. headquarters in Redmond, Wash., Nadella appears irritated by questions about the company’s ascendancy. “I would be disgusted if somebody ever celebrated our market cap,” he tells Bloomberg Businessweek. He insists the valuation—which passed $1 trillion on April 25 and is up more than 230 percent since his watch began in February 2014—is “not meaningful” and any rejoicing about such an arbitrary milestone would mark “the beginning of the end.
So, if the goal of Silicon Valley investors is to rapidly grow a firm, provide a huge financial exit for the early investors and then pretend it doesn’t really matter? If so, any of those pre-IPO firms can send some friends and family stock my way. I’d find it “meaningful”.
Have a great summer everyone…