Tag: NewCo

NewCo Shift: An Overview

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Covering the biggest shift in capitalism since the industrial revolution. Keeping our wit nearby as we do.

What Is NewCo Shift?

A new business media property brought to you by folks at NewCo Festivals, who also founded or worked at places like Wired, The Industry Standard, The New York Times, HBR, and other excellent publications. Launched in beta in April, with new features rolling out through 2016.

What Is the Premise of NewCo Shift?

Here’s how we think about it (it gets a bit serious, but stick with us). The muscular brand of American capitalism that dominated the post-WWII era is in fundamental transition. The central premise that companies exist to drive shareholder value above all is increasingly under scrutiny. This “true north” of shareholder value incented our most valuable companies to shape our economic, political, and social landscape to reward short term and blinkered thinking. But society is now demanding that businesses consider the entirety of their impact — on employees, customers, partners, and communities — before making decisions that otherwise might be justified by “shareholder returns.” The result is the greatest shift in our business ecosystem since the industrial revolution.

Four distinct but interconnected forces inform this shift. These forces have been building for the past five decades, but recently they’ve hit a tipping point. First is the role of digital technology in our society. Until recently, technology was understood as a rising new vertical industry. But in the past two decades, technology has become a horizontal force across all industries, driving both a renaissance and a reckoning in every sector of our economy.

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What Open Is, a Brand New GE, and Google’s Art Move

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What Open Really Means
It’s hard to find someone in business who won’t argue that open is good but lately “open” has progressed from buzzword to a club companies use on their competitors: we’re more open than they are. That’s left longtime industry observers like Re/code’s Walt Mossberg apoplectic. But let’s stop talking about open in religious terms and focus instead on what open can do. You want to talk open? Consider the original IBM PC, running Microsoft’s MS-DOS. Microsoft’s success was built on proprietary software, but it was also built on a platform that others could build on with minimal pain. Anyone who wanted to develop a program for MS-DOS (or its successor Windows) didn’t have to ask permission or pay a royalty for the privilege. That’s open. While such platforms certainly met the definition of proprietary, there was still plenty of room for independent developers to innovate and profit. The balancing trick remains the same: create a platform you can control but others can thrive on, too. Open means open for business.

A Brand New General Electric
We delight when we see OldCos turn into NewCos and Businessweek has a doozy of a cover story: How GE Exorcised the Ghost of Jack Welch to Become a 124-Year-Old Startup. Surveying current CEO Jeff Immelt’s work a decade in, you can see a legacy company getting more agile (and far less dependent on its financial services business, an angle Businessweek should have leaned into more). It also shed its home appliance division and is betting big on electric power generators, jet engines, locomotives, oil-refining gear, and the software that connects these Things to the Internet. More important, Immelt’s team has remade GE’s management approach: the company now seems like a place people might want to work at, a place that has a mission beyond market domination. It’s a terrific reminder that almost no business is too old, too entrenched, or has too bad a reputation to change — or make change.

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Dozens of NewCos Will Be at SXSW in Austin. Here Are 10 of Them

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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.

Internet of You: Wearables and Under-Skin Marketing
 UnderArmour Connected Fitness
 Douglas Ziewacz, Head of NA Media and Advertising
 March 11, 12:30–1:30 p.m.

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Dysfunctional Boards, Slack Abuse, and Premature Eulogies for Twitter

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This week in the NewCo Daily, we’ve started 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 coming days as we figure out how to make the new format work best for you.

Pull Up These Boards
 You won’t be shocked to learn that independent boards pay their CEOs less (Wall Street Journal) than companies whose boards are packed with their chief executive’s golf buddies. According to a new study by proxy advisory firm Institutional Shareholder Services, CEOs reporting to an independent chairman make $2.9 million less a year. Makes sense. But you might be surprised to learn that relative coziness is pretty much the only variable that makes any difference in determining CEO pay, including a company’s stock price. Remember when owning stock was supposed to align CEOs with “shareholder interest”? Jensen and Meckling’s influential “Theory of the Firm” from 1976 (Journal of Financial Economics, PDF) played an enormous role in tying executive pay to stock options, a trend that in the long term has wreaked enormous damage to corporate giants like Kodak, HP, GM, Xerox, and many more. Boards that don’t hold CEOs accountable to more than stock price broaden the principal agent problem. By aligning stock price to compensation — and because an overly chummy board also holds lots of stock — both CEO and Boards are often incented to act against a firm’s long term best interests.


The Downside of Slack
 No one would argue that communication inside companies is a bad thing. Oh wait, someone would, and that someone is in the business of helping companies communicate. Jason Fried runs Basecamp (nee 37 Signals), one of the early collaboration software platforms. In a Medium post, Fried lays out the pros and cons (mostly cons) about what happens to organizations that think primarily in chat. While Fried acknowledges that “group chat used sparingly in a few very specific situations … makes a lot of sense,” he continues “what makes a lot less sense is chat as the primary, default method of communication inside an organization.” His insights have broader ramifications than just using Slack smarter. He reminds us how software should enable employees, not exhaust them: “Whatever tools you use, keep in mind how they affect other people, not just what they appear to help you get done. Done doesn’t matter if people are wrecked along the way.”

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Mocking Medium, Eating the World, and the Future of Money

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This week in the NewCo Daily, we’re starting 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 coming days as we figure out how to make the new format work best for you.

Medium Might Not Be the Right Size for Everyone
How do you know when your platform is succeeding? When people use it to go on about what’s wrong with your platform. Facebook and Twitter host countless complaints about their services. Now it’s Medium’s turn. What I’ve Learned From Medium 2 Months In — It Isn’t Good and Why I’m Leaving Medium are exemplars of the sound-more-outrageous-than-you-really-are form and the headline on this is so great that you must click on this link and reward the author. It’s a terrific example of the sort of parody posts Medium is now provoking. Maybe complaints about your service on your service will be the new KPI. (Disclosure: We publish on Medium, of course.)

“Eating the World” Is Eating the World
“X is eating the world” is the business cliche of the moment, so it was surprising to not only find a strong piece of analysis under the headline Facebook Is Eating the World, but to find it at a publication like the Columbia Journalism Review — not exactly at the forefront of today’s business conversation (or journalism conversation, come to think of it). Author Emily Bell’s observation that “We are handing the controls of important parts of our public and private lives to a very small number of people, who are unelected and unaccountable” echoes the thoughts of Douglas Rushkoff, who we’ll get to shortly. Her essay is about journalism, but it’s applicable to many industries. And it’s not only Facebook that’s doing the eating. So are Airbnb, Uber, Google, Twitter, or any platform play that is becoming (or has become) a major channel for business value exchange, be it social, informational, or transactional. We want all to tilt toward the open … or does our behavior say otherwise?

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Welcome to the New NewCo Daily

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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.

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Mobile Is Tantalizingly Close To Becoming The Actual Internet

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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.

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My Picks for NewCo Detroit in April

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Last fall I had the great pleasure of moderating a conversation featuring four Detroit companies that showcased a community of businesses on a mission. I was impressed by the collective imagination and grit in the room. I am looking forward to returning next month when we hold the citywide NewCo Detroit festival on April 13.

There are many ways to plan a full-day NewCo festival. In Detroit this year, there are two pre-planned tours, one focusing on women leaders and the other examining Detroit 2.0. Or you can plan your own route. One of my favorite — and most frustrating — tasks here is deciding which companies to visit during a NewCo festival. We often have more than a half-dozen simultaneous events. And they’re all great; we wouldn’t select organizations as NewCos if we didn’t think they were worth visiting. Choosing just one company to visit each hour is tough. But choose I must, so here goes:

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Drones That Swim

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This might be the first swimming UAV you’ve ever seen. The Loon Copter can fly, swim on the surface of the water, and propel itself under the waves. The Oakland University-developed device lets UAV companies make drones that do more than fly and dive.

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.

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BigCos, NewCos, and the (Almost Ten) Trends Remaking Business

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The author speaks to a crowd inside Dollar Shave Club ahead of his interview with CEO Michael Dubin at the kickoff to NewCo Los Angeles in November 2015. Photo Credit: Katharina Stiegelmar

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.

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