Between the incredible music, a week-long indie film festival, and hundreds of forward-thinking companies and startups, the chill in Austin will be high in the coming week.
SXSW is not a NewCo festival, but it kind of feels like that cousin you get along with at family gatherings (and SXSW the organization is a NewCo!). Dozens of NewCos will participate in SXSW Interactive, focusing on topics you might expect to hear at a NewCo event while having a good time.
NewCo follows the story of and brings people inside new kinds of companies reshaping work, cities, and the world. At SXSW Interactive, you can see more than two dozen NewCos from Austin onstage. Here are 10 thoughtful sessions that feature NewCos.
Today in the NewCo Daily, we’re trying something different. We’re committed to publishing detailed stories of business and positive change at stories.newco.co, and we’ll let you know about them as we do. In the Daily, we’re aiming to do what many of our favorite newsletters do best: share a curated view of the last 24 hours with our own unique, NewCo point of view. We’re eager to find out what you think, especially in the next week or so as we figure out how to make the new format work best for you.
Microsoft Opens Up The move from closed to open is becoming inevitable among even those tech companies whose success is due to a proprietary platform. Yesterday Microsoft announced that it is expanding its SQL Server so it could run on the open source operating system Linux (New York Times) as well as its proprietary Windows. As Microsoft CEO Satya Nadella put it, “Data is the core asset now.” It’s fascinating watching the archetypal technology company of the PC era embrace, first hesitantly and now with enthusiasm, the new world of open. (We’ve previously covered the Microsoft reboot.)
The Secret to Better Customers Anyone who’s ever worked at a place that delivered on its mission knows that smart decisions in one area often have positive ramifications in others, sometimes in unexpected ways. For example, a McKinsey study says the best way to delight your customers is to put your employees first. The study offers useful prescriptions, some of them obvious (listen to your employees), but one really stood out for us: “Instill frontline workers with purpose, not rules.” Bingo. Focus on what you need to create for your customer more than the rules for delivering it. Best practices, not rules, will win the day.
Way back when — well, a few years back anyway — I wrote a series of posts around the idea of “metaservices.” As I mused, I engaged in a bit of derision around the current state (at that point) of the mobile ecosystem, calling it “chiclet-ized” — silos of useful data without a true Internet between them. You know, like individually wrapped cubes of shiny, colored gum that you had to chew one at a time.
I suggested that we needed a connective layer between all those chiclets, letting information flow between all those amazing services.
Good online essays start conversations. That’s how I feel about Growing Up Is Hard To Do, my colleague John Battelle’s tough-minded look at how companies need to change as they move across the continuum from insurgent to incumbent. Here’s my attempt to continue the conversation.
It’s hard to not be optimistic about the idea of NewCos and OldCos learning from one another. Their dialogues have already spawned partnerships, which in turn may yield breakthrough products and services. But what are the “established insurgents” — those NewCos that have moved from startup to dominance in their markets — teaching up-and-coming NewCos? It’s easy to look at the behavior of Uber or Facebook and determine that your company should move fast and break things — but only until you’re so big and visible that the risk of doing so becomes greater than the potential reward. The reasoning goes: It made sense for Uber to ignore laws that prevented its very existence or for Facebook to smash through privacy norms as it reached scale. But once they become grownups, with much more attention and responsibility, companies have to start acting like, well — grownups.
Most accelerators have a set date range (typically a few months) and workspace, trade funding for equity, offer mentorship, and end with a Demo Day. It’s an intense process intended to speed the learning and funding curve for entrepreneurs.
At TEDIndia in 2009 Jane Chen, cofounder and CEO of Embrace Innovations, asked the audience to close their eyes and imagine what might fit in their hands — an apple, a wallet, something small. Next came an image of a premature baby, not much larger than the hands holding it. According to the World Health Organization, 15 million babies are born premature each year. Embrace notes that more than one million die within the first month. For those who survive, some will suffer severe long-term health problems — diabetes, heart disease, low IQ. Chen said, “many of these problems could be prevented if these babies were just kept warm.” To date, Embrace Innovations has helped 150,000 babies across 10 countries with its simple, cost-effective infant warmers and an interesting business model — it’s both a nonprofit and a for-profit social enterprise.
Embrace’s first infant warmer — it looks like a tiny sleeping bag — started as a class project at Stanford University in 2007. The course, Design for Extreme Affordability, challenges teams of MBAs and engineers to develop affordable technologies for people living on less than a dollar a day. That year, Stanford asked students to design an intervention for neonatal hypothermia. It needed to cost one percent of what a traditional incubator cost (in the U.S., that’s about $20,000). Chen, along with Linus Liang, Naganand Murty, and Rahul Panicker, designed the Embrace Infant Warmer to help premature and underweight babies in the developing world. Together they founded Embrace and registered as a 501(c)(3) non-profit in 2008. Then they moved to India.
Watching Zenefits slide down the business end of the Valley hype cycle, it’s easy to write off the company as one more smug unicorn shorn of its rainbow valuation: Schadenfreude’s a bitch, let’s move on. But the truth is more complicated. We’re entering an era of unicorn rationalization, so now the hard work begins. Making a company that can last is far more difficult than making one built to grow without regard for burn rate or regulatory frameworks.
Once “the largest SaaS company in history,” Zenefits successfully disrupted the human resources industry. Now it’s being treated as a cautionary tale, the kind of company elected officials bring up as the worst examples of “ask for forgiveness, not permission,” right up there with Uber or Airbnb.
By the company’s own account, problems run deeper than that. In the heady fast growth phase of Zenefits’ ascent, it lost control of its culture and its ethics. “The problem goes much deeper than just process,” new CEO David Sacks said in a blog post criticizing his predecessor Parker Conrad. One of the first changes made by Sacks: No more alcohol in the office. Sex in the building stairwell was an issue, too.
Industry and authorities have used drones for decades for things like pipe inspection, ship hull inspection, dam and bridge inspection, and search and rescue. The U.S. Navy has big plans for them to work alongside robot boats and crewless ships.
Thanks to NewCo, I’ve gotten out of the Bay Area bubble and visited more than a dozen major cities across several continents in the past year. I’ve met with founders inside hundreds of mission-driven companies, in cities as diverse as Istanbul, Boulder, Cincinnati, and Mexico City. I’ve learned about the change these companies are making in the world, and I’ve compared notes with the leaders of large, established companies, many of which are the targets of that change.
As I reflect on my travels, a few consistent themes emerge:
1. Technology has moved from a vertical industry to a horizontal layer across our society. Technology used to be a specialized field. Technology companies sold their wares to large companies in large, complicated IT packages and to consumers as discrete products (computers and software applications). In the past decade, technology has dissolved into the fabric of our society. We all can access powerful technology stacks. We don’t need to know how to program. We don’t need a big IT department either. Now, technology is infrastructure, like our physical systems of highways and roads. This levels the playing field so new kinds of companies can emerge, and it’s forcing big companies to respond to a new breed of competitor, as well as a newly empowered (and informed) consumer base.