Another Silicon Valley Reckoning Is Coming: “Star Entrepreneurs” and Way Too Much Money

Another Silicon Valley reckoning is on the horizon.  We have seen cyclical events like this before, the 2001 bubble burst being the most recent memorable reckoning. The talk in 2001 was about too much “dumb money.” The coming reckoning, however, is on a massive, unprecedented scale, fueled by the same excess of global capital that has fueled the bubbles in housing markets in attractive locations around the World. The problems with Uber, Travis Kalanick, and the now obvious difficulty of the Uber Board of Directors to exercise meaningful governance should have been the “canary in the coal mine.” CNBC’s reporting on the excessive Silicon Valley “unicorn” valuations and media reports that New Enterprise Associates would divest $1 Billion in startup investments that cannot be made liquid has now made the situation blatantly obvious. After a long silence, the Wall Street Journal has finally joined the reporting on the crisis. What more does one need to take to the exit?

 

Source: In ‘Founder Friendly’ Era, Star Tech Entrepreneurs Grab Power, Huge Pay – WSJ

In ‘Founder Friendly’ Era, Star Tech Entrepreneurs Grab Power, Huge Pay

Silicon Valley financiers are losing leverage to star entrepreneurs

Two brothers who are co-founders of online payments startup Stripe, John Collison, left, president, and Patrick Collison, chief executive, have supervoting shares in the company, which was valued at $9 billion in its latest round of fundraising. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS

The Wall Street Journal

By Rolfe Winkler and Maureen Farrell

May 28, 2018 4:25 p.m. ET

Founders of highflying startups are increasingly wresting control of their companies from venture-capital backers and extracting huge pay packages tied to going public.

Venture capitalists had long called the shots in startup boardrooms and continue to be the primary backers of private companies. But in recent years they have had to compete against new classes of investors including mutual funds, sovereign-wealth funds and now Japan’s SoftBank Group Corp. , which has a $92 billion Vision Fund investing in startups.

That has reduced their leverage, shifting power toward star entrepreneurs and adding pressure on VCs to cultivate “founder friendly” reputations that will help them get a piece of the next hot startup. The flood of capital also gives entrepreneurs the ability to pick not just their investors but also when and whether to go public. An initial public offering is the primary way in which VCs cash in on their gains from startup investments.

VCs say empowering founders—through special voting shares, governance rights and other tools—frees them to follow ambitious long-term strategies once their companies go public without having to worry that poor performance will bring pressure from activist investors that scoop up stock. They point to founder-controlled tech companies such as FacebookInc., where founder Mark Zuckerberg had power to make bold moves and resist early pressure to sell the company. Facebook, which went public at around $100 billion, is now valued at roughly five times that.

Venture-capital backers of Stripe Inc., whose software is used by businesses to accept and track digital payments, recently gave the company founders an incentive to go public: special supervoting shares. The move was meant partly to assuage the founders, brothers Patrick and John Collison, that they would keep significant control of the company they founded in 2010 if it went public, people familiar with the matter said.

Many of Stripe’s investors say the founders have earned the right to control the company because it has performed so well. It was valued at $9 billion in its last fundraising round. Until March, when Stripe added its first independent director, the Collison brothers’ only fellow director was Michael Moritz, a partner at Sequoia Capital, one of the company’s earliest investors. Stripe and Sequoia representatives declined to comment.

Glenn Kelman, the longtime chief executive of online real-estate brokerage Redfin Corp.that went public last July, said that in the run-up to the IPO he was pushed to be more disciplined with expenses by two big investors who traditionally buy public-company stocks but also back later-stage private companies. Redfin’s shares are up about 50% since the IPO.

“There is a new world of VCs who really can’t perform their governance functions on boards because they want to preserve their relationship with you,” Mr. Kelman said of the venture-capital industry.

Star founders of private companies often get to pick their own investors, but as public-company CEOs they can’t. Supervoting shares—typically a second class of stock held by insiders that have 10 votes per share—give founders more power to elect directors and approve other items up for shareholder vote and protect them from investors who may have different priorities.

Last year, 67% of U.S. venture-backed tech companies that staged IPOs had supervoting shares for insiders, according to Dealogic, up from 13% in 2010. The proportion of non-tech U.S. venture-backed IPOs with supervoting shares has stayed between 10% to 15% every year over that period.

The proportion rises as tech companies get larger: 72% of founders of U.S. tech startups valued over $1 billion that had IPOs over the past 24 months have supervoting shares, according to a Wall Street Journal analysis.

Empowering a founder has risks. Uber Technologies Inc. co-founder and former CEO Travis Kalanick built a ride-hailing juggernaut valued at $68 billion with a pugnacious leadership style, but that approach ultimately contributed to a series of scandals. His supervoting shares and de facto control of the board made it more difficult for investors to push him out.

They did so last year, and then abolished supervoting rights and adopted a “one share, one vote” policy ahead of a planned 2019 IPO, something Mr. Kalanick ultimately voted in favor of.

Spotify Technology SA’s shareholders issued special “beneficiary certificates” to its founders in February, in part because co-founder and Chief Executive Daniel Ek wanted to maintain control, a person familiar with the arrangement said. The certificates boosted Mr. Ek’s and his co-founder’s voting control to a combined 80.5%, double their economic ownership. Spotify listed its shares in April. A Spotify spokesman declined to comment.

Snap Inc., whose two co-founders control about 90% of its voting power, sold shares with no voting rights in its 2017 IPO, meaning public-market investors don’t have any say on corporate matters.

Evan Spiegel, co-founder and CEO of the Snapchat parent, received a $625 million stock package that vested with the IPO as an incentive to get it done, people familiar with the deal said.

Drew Houston, co-founder and CEO of online-storage company Dropbox Inc., in December got his own stock package worth potentially $590 million partly tied to his company’s March IPO, according to offering documents. The stock vests based on Dropbox’s share price, among other milestones, and he can earn the full amount only if shares reach $90, triple their current value. Mr. Houston already holds nearly $3 billion of Dropbox’s shares.

Bankers and lawyers who work on IPO deals say there is little precedent for big stock packages offered to founders ahead of public offerings, a reflection of venture-capital firms’ decreasing leverage. Snap and Dropbox representatives declined to comment.

Some star founders may even be emboldened to overstep boardroom norms.

WeWork Cos. co-founder and Chief Executive Adam Neumann, who has 65% voting control, is one of two members of his board’s compensation committee, along with longtime company investor Benchmark, according to WeWork’s recent bond-offering documents. Public companies aren’t usually allowed to have their executives on compensation committees—which set executive pay—to avoid conflicts.

A WeWork spokesman said Mr. Neumann takes $1 a year in salary and declined to comment on whether he receives stock compensation or recuses himself from committee discussions of his pay. It is unclear when WeWork will tap the public markets, but the company’s $4.4 billion investment from SoftBank in 2017 was seen as pushing out its need for a public offering potentially for years.

WeWork bond documents show that in 2016 and 2017, the company paid more than 1.3 million shares of class B stock compensation, worth more than $50 million at the company’s current valuation. Mr. Neumann controls 78% of class B shares, which come with supervoting rights.

—Eliot Brown contributed to this article.

Write to Rolfe Winkler at rolfe.winkler@wsj.com and Maureen Farrell at maureen.farrell@wsj.com

As Trump Tightens Legal Immigration, Canada Woos Tech Firms: But Canada Is Not Silicon Valley

There Is More To High-Tech Immigration to Canada Than Meets The Eye

My long-time business partner and I, one of us in Canada and the other in Silicon Valley, earlier this year launched a business targeted at bringing immigrant entrepreneurs to Canada, Vendange Partners. http://www.vendangepartners.com

From our years’of experience in Silicon Valley and with technology entrepreneurship around the World, we knew that many of the best and brightest young entrepreneurs abroad dreamed of bringing their ideas to the United States to forge their skills and their new companies.  But from our discussions both in California and overseas it is clear that Trumpism is having a profoundly negative effect on this flow of talent into the American economy, both individual technical talent and entrepreneurial teams looking to start companies and raise capital.

The Canadian government and some of the provinces, particularly British Columbia, Ontario, Quebec, and to some degree the Maritimes, have done a commendable job of promoting high-tech immigration and entrepreneurship.  The Global Talent Stream visa is an excellent vehicle as described in The New York Times article included in this post. Global Talent Stream attempts to address the need for technical talent for companies already operating in Canada.  The competition for such talent and the salaries offered in the United States are a major problem for Canadian companies, particularly in AI and robotics. Theoretically at least, a Global Talent Stream applicant with an employer lined up can be working in Canada within about two weeks.

The so-called “startup visa” program for founders and already established teams wishing to set up in Canada is more complicated.  The program requires a committed investment from a “designated” Canadian investor and a letter of endorsement among other requirements before the visa is granted. The difficulties of doing this are something of a Catch-22. In practice in the past, endorsement letters were written by government listed “designated” investors without actual investment, but this still did not result in a wave of high-tech startups coming to Canada. The only other option is for entrepreneurs to bring a significant amount of their own capital with them to Canada.  This option has led to abuse. At its original launch under the Harper government, the startup visa program, unfortunately, became a magnet for immigration scams.  Hence, the startup visa program remains over-subscribed with applicants bringing their own capital to qualify for the “startup” visa for up to five founders.

Finally,  There is also simply too little smart Canadian venture capital and too many startups competing for the limited funds. It is also commonly acknowledged that Canada’s investment institutions and the Canadian financial mentality are not well-aligned with the Silicon Valley investment culture. Major U.S. pension funds like the California Public Employees Retirement System (better-known as CalPERS) annually invests 10% of its entire portfolio in venture capital funds. The same cannot be said generally about Canadian pensions funds and investment banks, as one example of the differences. Much lower risk debt capital and convertible debt seem to be more popular products in Canada.  In defense, it is often pointed out that the Canadian economy is roughly one-tenth the size of the United States. Yet, on a relative scale, the Canadian venture capital industry still does not compare well. Add to this the fact that the Canadian government has historically been far behind other OECD industrialized nations in R&D investment in innovation and you have major problems.  Anecdotally, the sheer amount of money and number of available investors in Silicon Valley alone is well-over 5oo compared with a mere handful in Vancouver. When the more than one thousand local indigenous BC startups actively seeking capital are layered onto the available sources of risk capital in Vancouver, there is major local competition before the immigrant entrepreneurs even arrive in Canada. Looking for risk venture capital in Canada, a la Silicon Valley is problematic.

With that candid and sobering analysis of high-tech immigration to Canada, for individuals who have taken the time to do an in-depth analysis of themselves, and the pro’s and con’s of such a major move, Canada may still offer many advantages to entrepreneurs, and those advantages are only likely to improve over time.

Vendange Partners

 

WCW III: World Chip War III

 Intel: The Missing Piece In The Epic New Global Microchip Battle

In the beginning, in the early 1970’s there were the original semiconductor companies like Intel, AMD, Motorola, and not far behind, the Japanese giants NEC, Fujitsu, and Mitsubishi. The first great Chip War was in memory chips, primarily as replacements for magnetic core memory and for the emerging new minicomputer industry. The Japanese fought World Chip War One as a nation, using the power and influence of its entire government to compete against the American companies. At the behest of the U.S. government itself, IBM bought a minority share in Intel to potentially defend Intel against any hostile bid from the Japanese.  Not long afterward, the Great Microprocessor War, World Chip War Two exploded, primarily between Intel and Motorola. Intel was the victor of World Chip War Two, primarily due to the extraordinary marketing genius of Intel Marketing VP Bill Davidow’s “Crush” campaign, not superior Intel technology. It was a huge lesson of the importance of marketing over having the “coolest technology.”  Now after something of a long hiatus, we have World Chip War Three, which is being fought over “CODECS,” and related chips which power our smartphones. Today’s news about Broadcom’s bid for Qualcomm omits the other crucial player in this new War of Titans, Intel, which has risen from earlier ignominious failures to become the third player in WCW III.

Broadcom’s Bid For Qualcomm Marks Upheaval in Chip Industry

The California-based chip maker offered made an unsolicited $105 billion takeover bid for Qualcomm

Broadcom proposed to acquire rival chip maker Qualcomm for $70 per share. PHOTO: MIKE BLAKE/REUTERS

By

Ted Greenwald

Broadcom Ltd. AVGO 1.42% made an unsolicited $105 billion takeover bid for QualcommInc., QCOM 1.15% the chip industry’s boldest bet yet that size will equal strength at a time of technological upheaval.

The approach, which would mark the biggest technology takeover ever, shows how tech companies are positioning themselves for a world where a range of chip-driven devices—from phones to cars to factory robots—are transmitting, receiving and processing evermore information. Broadcom Chief Executive Hock Tan already has used acquisitions to build the company into the fourth-biggest chip maker by market value, part of a wave of industry consolidation as profits on some chips, such as those used in personal computers, are squeezed by sluggish sales and rising costs.

A combination with Qualcomm would create a behemoth whose chips manage communications among consumer devices and appliances, phone service providers, and data centers that are becoming the workhorses in artificial intelligence.

The deal is far from certain. San Diego-based Qualcomm, which said it would consider the proposal, is expected ultimately to rebuff it on the grounds that the price isn’t high enough, especially given the significant risk that regulators would block it, according to some analysts. Under typical circumstances, unfriendly bids like this are difficult to pull off; given the sheer size and complexity of Qualcomm, this one could be especially challenging, analysts said Monday.

Broadcom’s preference is to strike a friendly deal, but if it fails to do so, it would consider nominating Qualcomm directors who may be more amenable to a transaction, a person familiar with the matter said. The nomination deadline is Dec. 8 and the annual meeting at which the director vote would take place is likely be around March.

Broadcom offered $70 a share for Qualcomm, representing a 28% premium from its closing price on Thursday—before news reports on the expected approach.

Qualcomm shares ended trading Monday up 1.2% to $62.52, while Broadcom shares were 1.4% higher at $277.52.

Mr. Tan said he has been talking with Qualcomm for over a year about a possible tie-up. “Our strategy has been consistent,” Mr. Tan said in an interview. “When a business is No. 1 in technology and No. 1 in market position, we acquire it and put it on our Broadcom platform and grow through that strategy. Qualcomm has a very large sustainable franchise that meets those criteria.”

Should the deal be completed, Broadcom would take on Qualcomm’s leadership in developing the next wave of cellular technology, known as 5G, which is expected to roll out over the coming two years. That could give Broadcom a new growth engine, as 5G is expected to dramatically accelerate the speed and responsiveness of cellular communications necessary for applications like self-driving cars.

Broadcom was formed when Avago Technologies Ltd. bought the former Broadcom in 2015 for $39 billion and kept the name, and Mr. Tan has continued growing by acquisition. The company sells a diverse line of equipment for networking and communications. Its products include chips for Wi-Fi and Bluetooth technology that connect devices that are closer together—technologies that some analysts say are likely to grow less quickly than 5G.

“People will continue to use short-proximity wireless like Wi-Fi and Bluetooth, but the growth and money is clearly in 5G,” said analyst Patrick Moorhead of Moor Insights & Strategy.

Overall, Broadcom and Qualcomm have largely complementary product lines. But the possible Broadcom takeover is likely to face intense regulatory scrutiny, given the companies’ combined scale and the fact that they are both leaders in Wi-Fi and Bluetooth technology. The companies share customers including Apple Inc., whose iPhones and iPads include components from both Qualcomm and Broadcom.

Qualcomm already has been under pressure from antitrust agencies in several jurisdictions, including the U.S. The company has paid hefty regulatory fines in China, South Korea and Taiwan.

Qualcomm was riding high as recently as a year ago after unveiling the chip industry’s largest-ever acquisition: a $39 billion proposed deal for NXP Semiconductors NV. The deal hasn’t closed yet, and Broadcom said Monday that its proposal would stand regardless of whether Qualcomm’s proposed acquisition of NXP is consummated under the current terms.

Since then, a string of hits by regulators, competitors, and customers including Apple has left the industry titan in a vulnerable position. Qualcomm’s profit in the fiscal year that ended Sept. 24 plummeted 57%, and its share price declined 18% in the 12 months through Thursday’s close compared with a 58% rise in the PHLX Semiconductor Sector Index. That was before news of Broadcom’s interest sent Qualcomm shares up nearly 13% on Friday.

Funding for the deal would come in the form of loans from a gaggle of banks, with additional cash from Silver Lake Management LLC. The private-equity firm, which already owns a stake in Broadcom, provided a commitment letter for $5 billion in convertible debt. Silver Lake said a substantial portion of that capital would come in the form of an equity investment from its Silver Lake Partners fund, with the remainder from other sources.

The equity contribution would be the single largest in the history of the firm, exceeding the roughly $1 billion it invested in the merger of Dell Inc. and EMC Corp.

Broadcom’s bid came days after the Singapore-based company announced plans to relocate its headquarters to the U.S., a move that could make it easier to pursue acquisitions of U.S. targets.

Broadcom’s earlier $5.5 billion offer to buy Brocade Communication Systems, based in San Jose, Calif., has been delayed due to a review by the Committee on Foreign Investment in the United States, which reviews international deals that raise concerns about national security.

Any deal to acquire Qualcomm would also receive close scrutiny, experts say. “Anything that has the word semiconductor in it gets rapt attention from CFIUS,” said James Lewis of the Center for Strategic and International Studies, a policy think tank. “The move to the U.S. is an effort to tamp down CFIUS concerns.”

Silicon Valley Is Suffering From A Lack of Humanity

Deep Down We All Know Silicon Valley Needs The Humanitarian Vision of Steve Jobs

The genius of Steve Jobs lies in his hippie period and with his time at Reed College. With the deep ethical problems facing technology now, we need Jobs vision more than ever.

To his understanding of technology, Jobs brought an immersion in popular culture. In his 20s, he dated Joan Baez; Ella Fitzgerald sang at his 30th birthday party. His worldview was shaped by the ’60s counterculture in the San Francisco Bay Area, where he had grown up, the adopted son of a Silicon Valley machinist. When he graduated from high school in Cupertino in 1972, he said, “the very strong scent of the 1960s was still there. After dropping out of Reed College, a stronghold of liberal thought in Portland, Ore., in 1972, Mr. Jobs led a countercultural lifestyle himself. He told a reporter that taking LSD was one of the two or three most important things he had done in his life. He said there were things about him that people who had not tried psychedelics — even people who knew him well, including his wife — could never understand.

Decades later Jobs flew around the world in his own corporate jet, but he maintained emotional ties to the period in which he grew up. He often felt like an outsider in the corporate world, he said. When discussing Silicon Valley’s lasting contributions to humanity, he mentioned in the same breath the invention of the microchip and “The Whole Earth Catalog,” a 1960s counterculture publication. Jobs’ experience rings with my own experience in the Santa Clara Valley at that time. Jobs and I were both deeply affected by Stewart Brand, the visionary behind The Whole Earth Catalog.  Stanford professor Fred Turner has documented this period in his book “From the Counterculture to Cyberculture, Stewart Brand, the Whole Earth Network, and the Rise of Digital Utopianism. 

For me this journey also began with the extraordinary vision of Marshall McLuhan, the Canadian professor of communications, who literally predicted the emergence of the World Wide Web and “The Global Village,”  like some kind of modern day Nostradamus.

Stewart Brand is also featured in Tom Wolfe‘s book, “The Electric Kool-Aid Acid Test,” along with Ken Kesey’s Merry Pranksters and The Grateful Dead.  I had the great good fortune to formally meet Brand at a COMDEX Microsoft event in a hangar at McCarren Airport in Las Vegas and was immediately impressed by him, as was Jobs. Not surprisingly, Brand was an invited guest at the Microsoft event, having already seized on the importance of the personal computer and the prospect of a networked World. Recently, in another anecdote on that time, Tim Bajarin shared a wonderful story about Job’s counterculture friend and organic gardener who remains the manager of the landscape at the new Apple campus, retaining the feeling of the original Santa Clara Valley orchard economy, that some of us can still remember.

It is important to think back to that time in the Bay Area and the euphoria of the vision of “digital utopianism.”   It grounds me and helps me to understand where we have gone so terribly wrong.

Digital utopianism is now dead. I have written about its sad demise on this blog. The wonderful vision of digital utopianism and the Web has been perverted by numerous authoritarian governments, now including our own, resulting in a Balkanized Web and a dark Web pandering all kinds of evil. This is the problem we face and the urgent need for greater emphasis on ethics. What about human life, culture, and values?  So many areas of technology are on the verge of deep philosophical questions.  Uber has become the poster child for everything that is wrong with Silicon Valley. I ask myself, “What would Steve Jobs have said about Travis Kalanick and Uber?” I think we know the answer. Ironically, Silicon Valley has a center for research and study in ethics, the Markkula Center for Applied Ethics at Santa Clara University. Mike Markkula was an Intel marketing guy who quit Intel to join with two crazy long-haired guys in Cupertino.

I am a Liberal Arts & Humanities graduate myself, including graduate study at Oxford University. When I returned from England I asked the obvious question: Now how do I make a living?  As it happened, I very improbably landed my first real job at Intel Corporation. When I asked why I was hired, the answer was that I was judged to have the requisite talent and aptitude if not the technical knowledge.  I later developed a reputation for being very “technical” by the process of “osmosis,” by simply living in a highly rarified technical culture and receiving whiteboard tutorials from friendly engineers. I was thrown into a group of Ivy League MBA’s. We wistfully shared a desire to have the others’ educations, but simply working together made us all more effective. Amazingly my career grew almost exponentially and I attribute my success to that cross-fertilization.

While with Intel in Hillsboro Oregon, someone approached me to represent Intel at a talk with Reed students. I was cautioned that few if any Reed students would be interested in working for Intel, but they would be very intellectually engaging.  That proved to be a significant understatement.  In the end, I believe that perhaps two dozen “Reedies,” as they are known, joined Intel, one of whom went on to a stellar career as a Silicon Valley venture capitalist.  A significant part of my later career has been devoted to using my Humanities education background to assess and translate deep technology in human terms for the benefit of both management and potential customers.

Today, nothing of my story would ever happen, but the influence of the Humanities and Arts in business seems more sorely needed than ever.

Read more: Why We Need Liberal Arts in Technology’s Age of Distraction – Time Magazine – Tim Bajarin

Read more: Digital Utopianism of Marshall McLuhan and Stewart Brand is Cracking – mayo615,com

Read more: Liberal Arts In The Data Age – Harvard Business Review

Trump’s Policies Are Already Sending Entrepreneurs to Canada and France

Canadian and French Policies to Attract Entrepreneurs and Researchers Impacting Silicon Valley

Last week, the U.S. Department of Homeland Security delayed the International Entrepreneur Rule to next March, and it is currently accepting comments on plans to rescind it altogether. The agency cited logistical challenges in vetting these new visas. The International Entrepreneur Rule was designed by the Obama Administration to support Silicon Valley and the high tech industry’s need for immigrant entrepreneurs and engineers. Immigrant entrepreneurs in the U.S. account for 44% of all startups.   The news has prompted a backlash from immigrant entrepreneurs like PayPal cofounder Max Levchin and leadership at the National Venture Capital Association, who argue that rolling back the rule will drive would-be job creators to other, more welcoming nations. This is already happening.

Canada’s Global Talent Stream Visa Program For Immigrant Entrepreneurs Targets U.S. Immigration Policy

To Silicon Valley observers, Canada has always seemed incapable of igniting a technology-driven economy, despite years of the government support for telecommunications, and a byzantine maze of government grant programs for research and development. Canada has remained a laggard in R&D investment compared to other OECD industrialized nations. Venture capital and government tax policy in Canada seemed to have a focus on short-term tax deductions rather than long-term gains as in California.  Then there was the demise of Nortel and the decline of Blackberry. There may be a new opportunity to bootstrap Canada into the high-tech industry big league: Trump Administration immigration policies that are already impacting Silicon Valley.  Not long after Justin Trudeau’s Liberals came to power in 2015, Trudeau sensed the opportunity to exploit Trump’s anti-immigration stances and the Liberal government swung into action to create the Global Talent Stream visa program specifically designed for rapid immigration for entire entrepreneurial teams. Since that time Trump has fulfilled his promises by slashing the H1-B visa program and announcing the end of the Obama Administration’s Startup Visa Program. Immigrant enrollments at U.S. universities is already down over 40%. Startup Genome, the acknowledged global leader in entrepreneurial ecosystems rankings, currently ranks Vancouver and Toronto 15th and 16th globally in its 2017 study, but those in the know acknowledge that Canada still lacks crucial technology ecosystem capabilities.  Nevertheless, Canada may be on the verge of a technology tidal wave.

Source: Trump’s Policies Are Already Sending Jobs to Canada | WIRED 

Source: Macron Inspires Entrepreneurs to come to France – Financial Times

Source: Trump Administration to end Startup Visa Program – Government Tech

Macron Determined To Make France “A Startup Nation” With Major Technology Initiatives

In 2015, long before Emmanuel Macron’s launched his campaign for the Presidency of France, as a minister in the Hollande government, Macron launched a significant new technology initiative, The Camp, on a seventeen-hectare campus just outside Aix-en-Provence, designed to inspire new thinking on crucial technology issues, and to incubate new entrepreneurial companies. The Camp will open officially this Autumn.  Now that Macron has swept the country in a stunning Presidential victory, it is clear that technology and entrepreneurship are crucial elements of his vision for France, backing it up with a 10B € technology-based economic development fund. The South of France generally, the Cote d’Azur and Provence are emerging as France’s technology center.  France’s nuclear research facility, Cadarache, just northeast of Aix-en-Provence, is the equivalent of California’s Lawrence Livermore Labs, and the home of ITER, the European nuclear fusion project. Prior to Macron’s 2015 launch of The Camp, the government had already established the Sophia Antipolis technology park near Nice, as a center for advanced telecommunications research and entrepreneurial start-ups.

The Camp, Aix-en-Provence

As if to underscore France’s rise on the global stage, France has recently leapfrogged the U.S. and Great Britain as the world’s new leader in “soft power,”  the ability to harness international alliances and shape the preferences of others through a country’s appeal and attraction.

 

 

Uber is Enron Deja Vu: Culture Trumps Strategy

A Silicon Valley Tragedy

Remember Enron’s “Smartest Guys in the Room?”

An early photo of Uber’s management team

Why did Uber spin so wildly out of control?

For over a  year now I have blogged here about the red flags flying about Travis Kalanick and Uber. Many investigative articles have been published over this time, in the New York Times and other publications, which have raised disturbing questions about Uber, Kalanick and some members of his team. The Board of Directors has finally taken action but it feels like its a day late and a dollar short.  Why did it take so long?  I have bluntly used the epithet that “Uber is Trump,” but now on reflection, it is more apt to describe Uber as Enron the sequel, and “deja vu all over again.” Remember the audio of two Enron electricity traders laughing about “screwing grandma?” That is Uber.

Culture Trumps Strategy

So as the current management adage says, culture trumps strategy.  This is not simply about the bad behavior of a few individuals and that eliminating them will solve Uber’s problems. The aggressive, confrontational business strategy is itself an integral and inextricable part of the problem. Some have said that Uber has a good business model and deserves to succeed.  I dispute that.  Jeremy Rifkin’s Third Industrial Revolution describes his vision for a new sharing economy.  The book has been read by world leaders and praised for its insights into a bright new evolving economy.  Uber and other companies like it have morphed the sharing economy into something ugly.

Uber morphed the sharing economy into “the gig economy,” epitomized by jobs without security or benefits, and the now viral video of Kalanick berating an Uber driver who was going bankrupt. SFGate also exposed the Uber operating strategy of psychologically manipulating drivers to work more hours than intended. The central principle of Kalanick’s business strategy is what he euphemistically describes as “principled confrontation.” Uber enters a market without following any existing rules or regulations, simultaneously entering into negotiations with municipalities which are typified by stalling tactics from Uber, and no intention to conclude an agreement. Uber’s goal is to take over the market by force, making any agreements with municipalities unnecessary. While pursuing its strong-arm goal, Uber has used a software tool, Greyball, to evade law enforcement. Uber is now under criminal investigation for the use of Greyball. Even the notion that Uber somehow improves traffic congestion has been debunked by a Northwestern University study commissioned by the San Francisco Transportation Authority which found that ride sharing has a heavy negative impact on San Francisco’s traffic congestion. See www.sfcta.org/TNCsToday

Uber is also facing a major lawsuit from Google for expropriating Google driverless car technology by hiring one of Google’s engineers. Uber has now fired the engineer in question, but the firing itself may be a circumstantial admission that its intent was to steal Google IP.  In another case, nearly 200 Uber employees were encouraged to use fake ID, burner phones and credit cards to sabotage Lyft, by booking and then quickly canceling more than 5000 rides with Lyft. Then there is the matter of what can now only be described as pervasive sexual harassment within Uber. Adding to all of these issues, local communities have begun to resist Uber much more aggressively. In one example, a protest movement in Oakland is opposing Uber’s plan to open offices in Oakland. There are other examples dotted around the World. Finally, there is the unresolved matter of the status of Uber’s drivers as “independent contractors or employees” which is nearing a final decision in California state and federal courts.

Clearly, Uber’s business strategy is driven by its ugly corporate culture. Stepping back to consider the complete picture, Uber’s business strategy looks to me like a house of cards.

Uber’s Leadership Conundrum

Those who know me and my blogs here know that I am a student of Harvard Business School professor John Kotter and his philosophy of leadership with humility at its core.  Uber presents a leadership conundrum for me. I was interested to hear BackChannel journalist Jessi Hempel express the same point tonight on PBS Newshour.  Uber obviously urgently needs to change its culture, yet without the wild aggressive culture defined by Kalanick, the question remains whether Uber can survive? It is not clear to me that humility could turn the Uber cultural battleship. There have also been a number of business articles suggesting that changing a corporate culture is far more challenging than changing a corporate strategy. So I am left to ponder Peter Drucker’s Four Quadrants of Managerial Behavior, and Quadrant Four’s “high task, low relationship” model for Uber. I learned this in Intel’s M Series management courses years ago. The course used the case study of the film “12 O’Clock High,” a demoralized B-17 bomber unit as its example. Gregory Peck arrives as the new unit commander and begins by “kicking ass and taking names.”  A similar case would be George Patton’s arrival in North Africa to take command of a demoralized tank unit.  My sense at the moment is the only best hope is that somehow an interim leader at Uber will have the latitude to take whatever actions he deems necessary to right the ship.  Such a solution seems doubtful at the moment.

Business Ethics Missing in Action

This morning on NPR’s Morning Edition, Nina Kim interviewed the Director of the Markulla Center for Applied Ethics at Santa Clara University, Kirk Hansen. The Center is named for early Intel and Apple executive, Mike Markkula. Mr. Hansen said that “Uber will undoubtedly become one of the most important business case studies” to emerge from Silicon Valley. Hansen went on to point out that founders of startups are often not capable of taking the company to a mature large company, and that it may be necessary to remove or reassign the founder. In the case of Uber, this is impossible because Kalanick and his founder group have the majority of shares.  This contrasts with most startups legal framework, where the investors or Board may hold the right to remove the founder in specific circumstances.

The Smartest Guys in the Room

As a grey-haired Silicon Valley alumni, I am personally offended and outraged by what has happened at Uber. I am deeply ashamed. Over the years I have worked for some well-known SV companies, startups, VC firms, and my own consultancy. I have personal knowledge of things that happened that were not kosher, and I have been present in situations where the ethics were not the best, but nothing in my Silicon Valley experience rises to the level of Uber. Something has gone wildly out of control since my time with how we conduct ourselves in business, and it is now tarnishing the history and reputation of fifty years of Silicon Valley achievements. From my own personal experience working at one wildly successful company years ago, and after rewatching the Enron documentary video,  “The Smartest Guys in the Room,” the answer is simple: too much money.

 

Source: Uber CEO Kalanick likely to take leave, SVP Michael out: source | Reuters

TECHNOLOGY NEWS | Mon Jun 12, 2017 | 4:22pm ED

By Heather Somerville and Joseph Menn | SAN FRANCISCO | Reuters

Uber Technologies Inc [UBER.UL] Chief Executive Travis Kalanick is likely to take a leave of absence from the troubled ride-hailing company, but no final decision has yet been made, according to a source familiar with the outcome of a Sunday board meeting.

Emil Michael, senior vice president, and a close Kalanick ally has left the company, the source said.

At the Sunday meeting, the company’s board adopted a series of recommendations from the law firm of former U.S Attorney General Eric Holder following a sprawling, multi-month investigation into Uber’s culture and practices, according to a board representative.

Uber will tell employees about the recommendations on Tuesday, said the representative, who declined to be identified.

The company is also adding a new independent director, Nestle executive, and Alibaba board member Wan Ling Martello, a company spokesman said.

Holder and his law firm were retained by Uber in February to investigate company practices after former Uber engineer Susan Fowler published a blog post detailing what she described as sexual harassment and a lack of a suitable response by senior managers.

The recommendations in Holder’s firm’s report place greater controls on spending, human resources and other areas where executives led by Kalanick have had a surprising amount of autonomy for a company with more than 12,000 employees, sources familiar with the matter said.

Kalanick and two allies on the board have voting control of the company. Kalanick’s forceful personality and enormous success with Uber to date, as well as his super-voting shares, have won him broad deference in the boardroom, according to the people familiar with the deliberations.

Uber CEO Travis Kalanick speaks to students during an interaction at the Indian Institute of Technology (IIT) campus in Mumbai, India, January 19, 2016. REUTERS/Danish Siddiqui/File photo

Any decision to take a leave of absence will ultimately be Kalanick’s, one source said.

The world’s most valuable venture-backed private company has found itself at a crossroads as its rough-and-tumble approach to local regulations and handling employees and drivers has led to a series of problems.

It is facing a criminal probe by the U.S. Department of Justice over its use of a software tool that helped its drivers evade local transportation regulators, sources have told Reuters.

Last week, Uber said it fired 20 staff after another law firm looked into 215 cases encompassing complaints of sexual harassment, discrimination, unprofessional behavior, bullying and other employee claims.

SILICON VALLEY SHOCK

Even a temporary departure by Kalanick would be a shock for the Silicon Valley startup world, where company founders in recent years have enjoyed more autonomy and often become synonymous with their firms.

Uber’s image, culture, and practices have been largely defined by Kalanick’s brash approach, company insiders and investors previously told Reuters.

Uber board member Arianna Huffington said in March that Kalanick needed to change his leadership style from that of a “scrappy entrepreneur” to be more like a “leader of a major global company.” The board has been looking for a chief operating officer to help Kalanick run the company since March.

The debate over Kalanick’s future comes as he is also facing a personal trauma: His mother died last month in a boating accident, in which his father was also badly injured.

Michael, described by employees as Kalanick’s closest deputy, has been a recurring flashpoint for controversy at the company.

He once discussed hiring private investigators to probe the personal lives of reporters writing stories faulting the company. Kalanick disavowed and publicly criticized the comments.

Michael will be replaced as the company’s top business development executive by David Richter, currently an Uber vice president, the company spokesman said.

Alongside Uber’s management crisis, its self-driving car program is in jeopardy after a lawsuit from Alphabet Inc alleging trade secrets theft, and the company has suffered an exodus of top executives.

One Uber investor called the board’s decisions on Sunday a step in the right direction, giving Uber an “opportunity to reboot.”

Jerks And The Start-ups They Ruin

Perhaps the premiere of Season 4 of “Silicon Valley” twigged me to share this post. but despite the title, the HBO series only connection may be the now viral “mean jerk time algorithm.”     The real “Silicon Valley jerk” has been around for decades, buried with all the other dirty laundry. Uber’s Travis Kalanick has only brought it front and center at this moment. It is something of a conundrum as some of the jerks are also the most successful. We all now know about the “bad” Steve Jobs. Oracle for years had a very bad reputation that came directly from Larry Ellison himself.  Microsoft was long known as a “sweatshop” with a highly negative culture led by Steve Ballmer. Even venture capitalists themselves have caught the disease as evidenced by Reid Hoffman and the late Tom Perkins of KPCB.  The best assessment I have heard is that these aggressive unrestrained corporate cultures destroy their own goals. Or better yet, the saying that “culture trumps strategy.”

 

Reblogged from the New York Times

SundayReview | OPINION

Jerks and the Start-Ups They Ruin

By DAN LYONS, APRIL 1, 2017

Credit: Tim Enthoven

The tech industry has a problem with “bro culture.” People have been complaining about it for years. Yet nobody has done much to fix it.

That may finally change if the people in charge of Silicon Valley — venture capitalists, who control the money — start to realize that the real problem with tech bros is not just that they’re boorish jerks. It’s that they’re boorish jerks who don’t know how to run companies.

Look at Uber, the ride-hailing start-up. It’s the biggest tech unicorn in the world, with a valuation of $69 billion. Not long ago Uber seemed invincible. Now it’s in free fall, and top executives have fled. The company’s woes spring entirely from its toxic bro culture, created by its chief executive, Travis Kalanick.

What is bro culture? Basically, a world that favors young men at the expense of everyone else. A “bro co.” has a “bro” C.E.O., or C.E.-Bro, usually a young man who has little work experience but is good-looking, cocky and slightly amoral — a hustler. Instead of being forced by investors to surround himself with seasoned executives, he is left to make decisions on his own.

The bro C.E.O. does what you’d expect an immature young man to do when you give him lots of money and surround him with fawning admirers — he creates a culture built on reckless spending and excessive partying, where bad behavior is not just tolerated but even encouraged. He creates the kind of company in which going to an escort bar with your colleagues, as Mr. Kalanick did in South Korea in 2014, according to recent reports, seems like a good idea. (The visit led, understandably, to a complaint to the personnel department.)

Bro cos. become corporate frat houses, where employees are chosen like pledges, based on “culture fit.” Women get hired, but they rarely get promoted and sometimes complain of being harassed. Minorities and older workers are excluded.

Bro culture also values speedy growth over sustainable profits, and encourages cutting corners, ignoring regulations and doing whatever it takes to win.

Sometimes it works. But often the whole thing just flames out. The bros blow through the money and find they have no viable business. For example, Quirky, founded in 2009 by the 20-something Ben Kaufman. It raised $185 million to build a “social product development platform” that sold kooky gadgets but filed for bankruptcy basically because the “brash” and “unorthodox” chief executive had no business being a chief executive. One indication that Mr. Kaufman is a bro? Well, the first reference he lists on his LinkedIn page is: “He’s a dick … but hilarious.”

Zenefits, a human-resources start-up, and another bro co., raised $583 million, at a peak valuation of $4.5 billion, then crashed after reports that it had used software to cheat on licensing courses for insurance brokers, and operated a hard-partying workplace where cups of beer and used condoms were left in stairwells. Zenefits limps on, but its C.E.-Bro co-founder has left the company, and nearly half the staff has been laid off.

Uber’s public downfall began in February, when Susan Fowler, a former engineer at the company, wrote about enduring sexual harassment and discrimination there. Other employees came forward with stories. One involved a manager groping employees’ breasts. Mr. Kalanick’s own bro-hood became part of the story when a video surfaced showing him berating a Uber driver who complained that Uber’s price cuts had driven him into bankruptcy. Mr. Kalanick said the driver needed to take responsibility for his own life.

As this was happening, Google’s self-driving car unit sued Uber, alleging it had stolen its ideas. Then word leaked that Uber had been using a sneaky software tool to deceive regulators in cities around the world. All this is as much a part of “bro culture” as the poor treatment of women; the point is to get away with as much as you can.

Hoping to right the ship, Uber appointed one of its board members, Arianna Huffington, to join former attorney general Eric Holder and others to investigate the sexual harassment claims. Mr. Kalanick has apologized and vowed to “grow up.” (He’s 40.) Most important, Uber has announced that it is planning to hire a chief operating officer, ideally a steady hand like Sheryl Sandberg, the chief operating officer of Facebook. It’s a great idea, but it should have happened years ago. Now it may be too late.

Ms. Huffington insists the board has full confidence in Mr. Kalanick. But should it? He’s a college dropout with a spotty track record and a reputation for pugnacity. His record at Uber includes racking up enormous losses — reportedly $5 billion over the last two years. Despite this, the bluest blue-chip investors (including Goldman Sachs and Morgan Stanley) have invested a total of $16 billion in Uber.

Bro C.E.O.s are better at raising money than making money. So why do venture capitalists keep investing in them? It may be because many of the venture capitalists are bros as well.

Venture capitalists used to be tech engineers who had made a bundle, retired early and took up investing in start-ups as a kind of white-shoe hobby. The new breed are competitive alpha males who previously might have gone to work as bond traders. At the same time, there are fewer women. In 1999, 10 percent of investing partners at venture capital companies were women. By 2014 the number had declined to 6 percent, according to the Diana Project at Babson College. This is probably one reason that, despite many studies showing that women run companies better than men, none of the 15 biggest American tech companies valued over $1 billion has a female chief executive.

Uber’s collapse should not come as a surprise but it does offer a lesson: Toxic workplace culture and rotten financial performance go hand-in-hand. It’s possible for a boorish jerk to run a successful company, but jerks do best when surrounded by non-jerks, and bros do best when they hire seasoned executives to help them. Without “adult supervision” and institutional restraints, the C.E.-Bro’s vices end up infecting the culture of the workplaces they control.

This poisonous state of affairs will get fixed only when investors start getting hurt. A crash at Uber, the most high-profile tech start-up in the world, could provide the jolt that finally brings the tech industry back to its senses.

Dan Lyons is the author of “Disrupted: My Misadventure in the Start-Up Bubble.”

University degree no longer comes with promise of stable job

The unwritten promise of a post-secondary education has been to earn a degree in an applied field such as engineering and you’ll end up with a good, stable job, but the millennial generation is finding that can no longer be counted on. I have been thinking about this issue for some time. Last year, I posted an article on this blog by Robert Reich, Professor of Economics at UC Berkeley and former Secretary of Labor under Bill Clinton. I was stimulated to share that article by what I was seeing with my own students from the University of British Columbia and their struggles, and contrasting that with my own experience years ago, walking into my Silicon Valley dream career by sheer chance. That simply no longer happens. Grads must begin plotting out a plan early, no later than the beginning of their third year, and begin to execute on it in order to find an entry-level position commensurate with their education. Networking and cold calling are imperative, but as this article points out, even that may not guarantee solid employment. 

Source CBC News/Business: ‘It’s not a guarantee’: University degree no longer comes with promise of stable job

‘The millennial side hustle,’ not stable job, is the new reality for university grads

Recent graduates are finding a post-secondary education is no longer a guarantee of stable employment

By Nick Purdon and Leonardo Palleja, CBC News Posted: Mar 12, 2017 5:00 AM ET Last Updated: Mar 12, 2017 5:00 AM ET

Christian McCrave, 21, stands in front of his parents’ house in London, Ont. He moved back in when he couldn’t find a job after graduating with a degree in mechanical engineering. (Nick Purdon/CBC)

Twenty-one-year old Christian McCrave feels like he did his part.

He got good grades in high school and completed a four-year degree at the University of Guelph in southwestern Ontario. He studied mechanical engineering, in part because he thought it would land him a job.

It hasn’t.

“I actually thought that coming out of school that I would be a commodity and someone would want me,” McCrave said. “But instead, I got hit with a wall of being not wanted whatsoever in the industry.”

McCrave says he believed in the unwritten promise of a post-secondary education: work hard at school, and you’ll end up with a good and stable job.

Now, he’s not so sure.

“Being unemployed while having a degree is kind of a kick in the face,” McCrave said. “If anything, it’s a setback. You have all this debt and this degree, and everyone has one, but it doesn’t get you further in life sometimes.”

Since graduating last year, McCrave has applied for 250 engineering jobs, but he’s only had four interviews and no job offer.

McCrave isn’t alone. More than 12 per cent of Canadians between the ages of 15 and 24 are unemployed and more than a quarter are underemployed, meaning they have degrees but end up in jobs that don’t require them.

The latest numbers from Statistics Canada show that the unemployment rate for 15-to-24-year-olds is almost twice that of the general population.

McCrave has expanded his job search to include retail and recently applied to work at the local Sobeys grocery store near his parent’s house in London, Ont., where he has lived since soon after graduation.

“It’s a job. Something to feel accomplished from,” said McCrave. “As much as an engineer can be accomplished by cutting deli meats.”

Co-ops, apprenticeships key to employability

The challenge McCrave faces is experience: namely, he doesn’t have any. The most recent work experience on his resume is sales associate at Winners.

Sandro Perruzza, the chief executive officer at the Ontario Society of Professional Engineers (OSPE), is familiar with graduates like McCrave.

Since graduating, McCrave has applied for 250 engineering jobs but hasn’t had a single offer, he says. (Leonardo Palleja/CBC )

“He could have applied for co-ops or apprenticeships while he was at school — even if it delayed his graduation,” Perruzza said. “We strongly advocate co-ops. The fact is because of the sheer number of applicants these days, the ones who get the jobs have some kind of experience.”

Should McCrave land one of the retail jobs he’s applied for, he’ll achieve one of the hallmarks of his generation: underemployment.

‘With millennials, the idea is that we are lazy and that we don’t work hard and stuff is given to us.’– Christian McCrave, 21, engineering graduate

A 2014 Canadian Teachers’ Federation report found nearly a quarter of Canada’s youth are either unemployed, working less than they want or have given up looking for work entirely.

The number of engineers in Ontario who are underemployed is 33 per cent, according to the OSPE.

Still, McCrave says he often hears it’s his own fault that he’s unemployed.

“With millennials, the idea is that we are lazy and that we don’t work hard and stuff is given to us — the idea of the participation award,” McCrave said. “We didn’t want the participation award. We didn’t want to be told we are not good enough but here’s an award anyways. We want to compete; we want to succeed.”

‘The millennial side hustle’

Fast forward a few years in the job trajectory of the millennial generation, and you’ll find Clair Parker. Parker, 26, has a political science degree from Carleton University in Ottawa and a certificate in public relations from Humber College in Toronto.

“I live in an apartment, I have three roommates, and I don’t have benefits,” said Parker. “If I were the exception, I would feel upset about that because I would feel that I had done something wrong, but I am not the exception. I am the norm.”

Clair Parker might not be making direct use of her political science degree at her job as a bartender at a small Toronto brewery, but don’t call her underemployed. ‘It implies just the [job] title means more than what is going on in the workplace,’ she says. (Nick Purdon/CBC)

Parker’s bartending job doesn’t pay enough to make ends meet so she cobbles together enough money to live in Toronto by also working at a yoga studio and house sitting.

“I joke with my friends all the time about the millennial side hustle,” Parker says. “We all have different side hustles that we do to get money. So many people who would have worked in-house for a company before are freelancing now.”

The millennial side hustle (also known as the gig economy) means no steady job but also no safety net.

• The global scourge of precarious jobs
• As ‘virtual work’ grows, social programs may need a revamp

“If you have a toothache now and you are 24 years old, you freak out,” says Parker. “That’s going to be a couple of grand when you go to the dentist for the first time. I think people are going to feel really disenfranchised by the workforce and uncared for by the workforce.”

Parker works primarily at Halo brewery in Toronto, bartending and doing whatever else is needed to keep the small business running.

‘Being precariously employed takes its toll,’ says Ellis-Hale. (Leonardo Palleja/CBC)

“On paper, I am a bartender,” Parker says. “But anyone who has worked with a small business understands that it’s kind of an all hands on deck situation. You have a lot of opportunities to learn a lot of different things.”

Parker bristles at the suggestion that she is underemployed.

“I am not underemployed, and I kind of get offended when people say I am underemployed,” Parker says. “It implies that they know more about my situation than I know about my situation. It implies just the [job] title means more than what is going on in the workplace. It’s a huge assumption.”

While Parker probably could have gotten her job without five years of post-secondary education, she says her education will allow her to grow along with the business. She is banking on potential — her own and the company’s.

The university enrolment boom

The promise of higher education is alive and well in Canada. There are more university students than ever before. In 2015, there were more than two million students enrolled at Canadian universities and colleges, compared to almost 800,000 in 1980.

Kimberly Ellis-Hale has been teaching at Wilfrid Laurier University in Waterloo, Ont., since 1998 but still has to re-apply for her job every four months. (Leonardo Palleja/CBC)

“With a good education, you will have a good future. With a good education, you will have a good job,” said Kimberly Ellis-Hale, an instructor at Wilfrid Laurier University in Waterloo, Ont., who teaches sociology and other subjects. “And I think for past generations, it may have been [the case]. I think for future generations, it’s not a guarantee.”

Even though economic indicators that track employment reveal a trend toward more precarious jobs, Ellis-Hale says most of her students don’t see that as their future. She didn’t either, but that’s how things turned out.

‘I teach in a place that sells education as the path to a better and more secure life, and I don’t have a part of that life.’– Kimberly Ellis-Hale, contract faculty, Wilfrid Laurier University

Ellis-Hale is contract faculty, and even though she’s been teaching university courses at Laurier since 1998, she has to re-apply for her job every four months.

“I have very little job security,” Ellis-Hale said. “And being precariously employed takes its toll.”

Ellis-Hale’s two children are now grown up and live on their own, but she vividly remembers standing in the pharmacy when they were young trying to decide which child needed antibiotics the most.

• PBO report warns recent university grads are overeducated, underemployed
• Struggles of the young and jobless

“I couldn’t afford to purchase both of them,” Ellis-Hale says. “And how do you live with that? I teach in a university. I teach in a place that sells education as the path to a better and more secure life, and I don’t have a part of that life.”

Turning the promise into a guarantee

The University of Regina’s UR Guarantee program, launched in 2009, turns the unwritten promise of post-secondary education into an actual guarantee. If a student enrolled in the program doesn’t get a full-time job in their field within six months of graduation, they can return for a year of undergraduate study tuition-free.

“The reason we do this is we know that if students do all the things that are part of the program, they are going to be successful,” said Naomi Deren, associate director of student success at the university.

Noami Deren is the associate director of student success at the University of Regina and runs the school’s UR Guarantee program, which lets graduates return for a free year of study if they don’t get a job in their field within six months. (Leonardo Palleja/CBC)

Students from any department can enrol in the program and must complete career development training, including resume reviews and job interview seminars.

In their final year, students are required to network and complete a labour market overview in their chosen field. Their job search begins while they are still at school.

‘The average student doesn’t … do that preparation, isn’t thinking about their career in second year and is sort of left scrambling at the end of it.’-Naomi Deren, associate director of student success, University of Regina

“I really think that the average student doesn’t do all of that stuff, doesn’t do that preparation, isn’t thinking about their career in second year and is sort of left scrambling at the end of it,” Deren said.

Of the 120 students who have participated in the program only two have come back for the free year.

“Honestly, everyone else has found what they were looking for,” Deren said. “We have students who are teaching — they got full time contracts right out of university … We have students who are working in marketing, communications. We have a reporter for the Leader Post.”

Keeping students from dropping out

Jenna deBoth, 21, is in her fourth year of an education degree program at the University of Regina and all she can think about is graduating.

“I am so excited. I can’t wait to actually get out there and get a job,” she said.

Jenna deBoth, 21, says that without the University of Regina’s UR Guarantee program, she probably would have dropped out of university. Now, she’s about to graduate with an education degree. (Nick Purdon/CBC )

Still, deBoth, from the small town of Hudson Bay, Sask., almost didn’t make it past her first year of university. She credits the UR Guarantee program with keeping her from dropping out.

“I was absolutely terrified to be on campus because even though Regina is a small city, to me, it was huge,” deBoth said.

‘If I don’t get a job in my field? Well, I am gonna keep trying.’– Jenna deBoth, 21, 4th-year University of Regina student

DeBoth happened to see a poster advertising the UR Guarantee program. She signed up and within a few months, she was volunteering and had a growing circle of friends.

“We see ourselves in the beginning as high school guidance counsellors,” Deren said. “We make sure students are successful and are retained here at the university.”

Deren says retention rates among UR Guarantee students are 10 per cent higher than those of the general student population.

DeBoth hasn’t yet found a teaching job for the fall, and she admits she’s nervous about what’s out there.

“If I don’t get a job in my field? Well, I am gonna keep trying,” she said. “This is something that I am passionate about. I have made sure I have skills that will help me no matter where I go.”

Vancouver Technology Industry On Verge Of New Era

The Vancouver technology industry may well be on the verge of an extraordinary period of growth.  Global, national, and regional factors appear to be aligning in ways that could create an extraordinary economic opportunity for the Lower Mainland which could not have been anticipated.  Vancouver has been an endless topic of discussion about its comparability (or not) to Silicon Valley, the historical Canadian investment conservatism, and the lack of other resources necessary to create the “secret sauce” that makes a region achieve critical mass. That may be changing if only the convergence of factors is grasped and exploited.

In an expansion of regional cooperation, the University of British Columbia and the University of Washington today announced the establishment of the Cascadia Urban Analytics Cooperative.

Universities establish joint centre to use data for social good in Cascadia region

Media Release | February 23, 2017

University of Washington President Ana Mari Cauce, Microsoft President Brad Smith, and University of British Columbia President Santa J. Ono at the Emerging Cascadia Innovation Corridor Conference in Vancouver, B.C., September 20, 2016.

In an expansion of regional cooperation, the University of British Columbia and the University of Washington today announced the establishment of the Cascadia Urban Analytics Cooperative to use data to help cities and communities address challenges from traffic to homelessness. The largest industry-funded research partnership between UBC and the UW, the collaborative will bring faculty, students and community stakeholders together to solve problems, and is made possible thanks to a $1-million gift from Microsoft.

“Thanks to this generous gift from Microsoft, our two universities are poised to help transform the Cascadia region into a technological hub comparable to Silicon Valley and Boston,” said Professor Santa J. Ono, President of the University of British Columbia. “This new partnership transcends borders and strives to unleash our collective brain power, to bring about economic growth that enriches the lives of Canadians and Americans as well as urban communities throughout the world.”

“We have an unprecedented opportunity to use data to help our communities make decisions, and as a result improve people’s lives and well-being. That commitment to the public good is at the core of the mission of our two universities, and we’re grateful to Microsoft for making a community-minded contribution that will spark a range of collaborations,” said UW President Ana Mari Cauce.

Today’s announcement follows last September’s Emerging Cascadia Innovation Corridor Conference in Vancouver, B.C. The forum brought together regional leaders for the first time to identify concrete opportunities for partnerships in education, transportation, university research, human capital and other areas.

A Boston Consulting Group study unveiled at the conference showed the region between Seattle and Vancouver has “high potential to cultivate an innovation corridor” that competes on an international scale, but only if regional leaders work together. The study says that could be possible through sustained collaboration aided by an educated and skilled workforce, a vibrant network of research universities and a dynamic policy environment.

Microsoft President Brad Smith, who helped convene the conference, said, “We believe that joint research based on data science can help unlock new solutions for some of the most pressing issues in both Vancouver and Seattle. But our goal is bigger than this one-time gift. We hope this investment will serve as a catalyst for broader and more sustainable efforts between these two institutions.”

As part of the Emerging Cascadia conference, British Columbia Premier Christy Clark and Washington Governor Jay Inslee signed a formal agreement that committed the two governments to work closely together to “enhance meaningful and results-driven innovation and collaboration.”  The agreement outlined steps the two governments will take to collaborate in several key areas including research and education.

“Increasingly, tech is not just another standalone sector of the economy, but fully integrated into everything from transportation to social work,” said Premier Clark. “That’s why we’ve invested in B.C.’s thriving tech sector, but committed to working with our neighbours in Washington – and we’re already seeing the results.”

“This data-driven collaboration among some of our smartest and most creative thought-leaders will help us tackle a host of urgent issues,” Gov. Inslee said. “I’m encouraged to see our partnership with British Columbia spurring such interesting cross-border dialogue and excited to see what our students and researchers come up with.”

The Cascadia Urban Analytics Cooperative will revolve around four main programs:

• The Cascadia Data Science for Social Good (DSSG) Summer Program, which builds on the success of the DSSG program at the UW eScience Institute. The cooperative will coordinate a joint summer program for students across UW and UBC campuses where they work with faculty to create and incubate data-intensive research projects that have concrete benefits for urban communities. One past DSSG project analyzed data from Seattle’s regional transportation system – ORCA – to improve its effectiveness, particularly for low-income transit riders. Another project sought to improve food safety by text mining product reviews to identify unsafe products.

• Cascadia Data Science for Social Good Scholar Symposium, which will foster innovation and collaboration by bringing together scholars from UBC and the UW involved in projects utilizing technology to advance the social good. The first symposium will be hosted at UW in 2017.

• Sustained Research Partnerships designed to establish the Pacific Northwest as a centre of expertise and activity in urban analytics. The cooperative will support sustained research partnerships between UW and UBC researchers, providing technical expertise, stakeholder engagement and seed funding.

• Responsible Data Management Systems and Services to ensure data integrity, security and usability. The cooperative will develop new software, systems and services to facilitate data management and analysis, as well as ensure projects adhere to best practices in fairness, accountability and transparency.

At UW, the Cascadia Urban Analytics Collaborative will be overseen by Urbanalytics (urbanalytics.uw.edu), a new research unit in the Information School focused on responsible urban data science. The Collaborative builds on previous investments in data-intensive science through the UW eScience Institute (escience.washington.edu) and investments in urban scholarship through Urban@UW (urban.uw.edu), and also aligns with the UW’s Population Health Initiative (uw.edu/populationhealth) that is addressing the most persistent and emerging challenges in human health, environmental resiliency and social and economic equity. The gift counts toward the UW’s Be Boundless – For Washington, For the World campaign (uw.edu/boundless).

The Collaborative also aligns with the UBC Sustainability Initiative (sustain.ubc.ca) that fosters partnerships beyond traditional boundaries of disciplines, sectors and geographies to address critical issues of our time, as well as the UBC Data Science Institute (dsi.ubc.ca), which aims to advance data science research to address complex problems across domains, including health, science and arts.

Find other stories about: Cascadia Urban Analytics Cooperative, Emerging Cascadia Innovation Corridor Conference, Microsoft, University of British Columbia, University of Washington

Source: Universities establish joint centre to use data for social good in Cascadia region

Uber’s Aggressive, Unrestrained Culture Destroys It’s Own Goals

How Corporate Culture Can Trump Strategy For the Worse

As Uber suffers blow after blow to its reputation, users are deleting the app. 

UPDATE: As if to underscore the point of this post, only days after the New York Times published the story below, Uber CEO Travis Kalanick was captured on an Uber driver’s dash cam, engaging in a heated argument with the Uber driver over lower pay that has driven the driver into bankruptcy. Kalanick has today issued a formal apology to all Uber employee’s saying that he needs to “grow up” and get “leadership” help.  

See the video here: Kalanick Loses It With Uber Driver

 

Suffice to say, people are angry with Uber, and things aren’t getting better. This is actually deja vu all over again. We have seen this before in Silicon Valley. The hubris of a company founders or founders creates an ugly overly aggressive and unrestrained culture in its employees and before long things begin to unravel.  This has been quietly observed at Uber for some time, and can be gleaned by its own actions as reported in the press.  Now, new self-inflicted cracks are appearing. More than 200,000 people have deleted the UBER app off their smart phones in the past month. After former employee Susan Fowler Rigetti published a detailed blog post about the sexual harassment and discrimination she allegedly experienced at the company, people began deleting the ride sharing-app again. As more and more employees have spoken out about the alleged poor working conditions, Uber’s customer base is dwindling … and the company is getting desperate.

A few weeks ago, people boycotted the company after Uber provided rides at New York’s JFK airport during a taxi strike over President Donald Trump’s immigration ban. More than 200,000 people got rid of the Uber app and the #DeleteUber hashtag began trending on Twitter. Then, anger boiled again over Uber CEO Travis Kalanick’s position on Trump’s advisory board. He eventually quit the board.

SAN FRANCISCO — When new employees join Uber, they are asked to subscribe to 14 core company values, including making bold bets, being “obsessed” with the customer, and “always be hustlin’.” The ride-hailing service particularly emphasizes “meritocracy,” the idea that the best and brightest will rise to the top based on their efforts, even if it means stepping on toes to get there.

Those values have helped propel Uber to one of Silicon Valley’s biggest success stories. The company is valued at close to $70 billion by private investors and now operates in more than 70 countries.

Yet the focus on pushing for the best result has also fueled what current and former Uber employees describe as a Hobbesian environment at the company, in which workers are sometimes pitted against one another and where a blind eye is turned to infractions from top performers.

Interviews with more than 30 current and former Uber employees, as well as reviews of internal emails, chat logs and tape-recorded meetings, paint a picture of an often unrestrained workplace culture. Among the most egregious accusations from employees, who either witnessed or were subject to incidents and who asked to remain anonymous because of confidentiality agreements and fear of retaliation: One Uber manager groped female co-workers’ breasts at a company retreat in Las Vegas. A director shouted a homophobic slur at a subordinate during a heated confrontation in a meeting. Another manager threatened to beat an underperforming employee’s head in with a baseball bat.

Until this week, this culture was only whispered about in Silicon Valley. Then on Sunday, Susan Fowler, an engineer who left Uber in December, published a blog post about her time at the company. She detailed a history of discrimination and sexual harassment by her managers, which she said was shrugged off by Uber’s human resources department. Ms. Fowler said the culture was stoked — and even fostered — by those at the top of the company.

“It seemed like every manager was fighting their peers and attempting to undermine their direct supervisor so that they could have their direct supervisor’s job,” Ms. Fowler wrote. “No attempts were made by these managers to hide what they were doing: They boasted about it in meetings, told their direct reports about it, and the like.”

Travis Kalanick, Uber’s chief executive, has taken several steps since a former employee’s accusations of discrimination and sexual harassment by managers. CreditMarlene Awaad/Bloomberg

Her revelations have spurred hand-wringing over how unfriendly Silicon Valley workplaces can be to women and provoked an internal crisis at Uber. The company’s chief executive, Travis Kalanick, has opened an internal investigation into the accusations and has brought in the board member Arianna Huffington and the former attorney general Eric H. Holder Jr. to look into harassment issues and the human resources department.

To contain the fallout, Mr. Kalanick also began more disclosure. On Monday, he said that 15.1 percent of Uber’s engineering, product management and scientist roles were filled by women, and that those numbers had not changed substantively over the past year.

Mr. Kalanick also held a 90-minute all-hands meeting on Tuesday, during which he and other executives were besieged with dozens of questions and pleas from employees who were aghast at — or strongly identified with — Ms. Fowler’s story and demanded change.

In what was described by five attendees as an emotional moment, and according to a video of the meeting reviewed by The New York Times, Mr. Kalanick apologized to employees for leading the company and the culture to this point. “What I can promise you is that I will get better every day,” he said. “I can tell you that I am authentically and fully dedicated to getting to the bottom of this.”

Some Uber employees said Mr. Kalanick’s speedy efforts were positive. “I am pleased with how quickly Travis has responded to this,” Aimee Lucido, an Uber software engineer, wrote in a blog post. “We are better situated to handle this sort of problem than we have ever been in the past.”

As chief executive, Mr. Kalanick has long set the tone for Uber. Under him, Uber has taken a pugnacious approach to business, flouting local laws and criticizing competitors in a race to expand as quickly as possible. Mr. Kalanick, 40, has made pointed displays of ego: In a GQ article in 2014, he referred to Uber as “Boob-er” because of how the company helped him attract women.

Document: Internal Memo From Uber’s Chief, Travis Kalanick

That tone has been echoed in Uber’s workplace. At least two former Uber workers said they had notified Thuan Pham, the company’s chief technical officer, of workplace harassment at the hands of managers and colleagues in 2016. One also emailed Mr. Kalanick.

Uber also faces at least three lawsuits in at least two countries from former employees alleging sexual harassment or verbal abuse at the hands of managers, according to legal documents reviewed by The Times. Other current and former employees said they were considering legal action against the company.

Liane Hornsey, Uber’s chief human resources officer, said in a statement, “We are totally committed to healing wounds of the past and building a better workplace culture for everyone.”

Uber’s aggressive culture began with its 2009 founding, when Mr. Kalanick and another founder, Garrett Camp, created a start-up that would let customers hail a cab with little more than a few taps of their smartphone — bypassing many of the headaches people had with the taxi industry. Mr. Kalanick also started putting into place what eventually became Uber’s 14 core values, inspired by the leadership principles at one of the biggest public tech companies, Amazon.

To grow quickly, Uber kept its structure decentralized, emphasizing autonomy among regional offices. General managers are encouraged to “be themselves,” another of Uber’s core values, and are empowered to make decisions without intense supervision from the company’s San Francisco headquarters. The top priority: Achieve growth and revenue targets.

While Uber is now the dominant ride-hailing company in the United States, and is rapidly growing in South America, India and other countries, its explosive growth has come at a cost internally. As Uber hired more employees, its internal politics became more convoluted. Getting ahead, employees said, often involved undermining departmental leaders or colleagues.

Arianna Huffington, an Uber board member, was brought in to look into harassment issues and the human resources department.

Workers like Ms. Fowler who went to human resources with their problems said they were often left stranded. She and a half-dozen others said human resources often made excuses for top performers because of their ability to improve the health of the business. Occasionally, problematic managers who were the subject of numerous complaints were shuffled around different regions; firings were less common.

One group appeared immune to internal scrutiny, the current and former employees said. Members of the group, called the A-Team and composed of executives who were personally close to Mr. Kalanick, were shielded from much accountability over their actions.

One member of the A-Team was Emil Michael, senior vice president for business, who was caught up in a public scandal over comments he made in 2014 about digging into the private lives of journalists who opposed the company. Mr. Kalanick defended Mr. Michael, saying he believed Mr. Michael could learn from his mistakes.

Uber’s aggressive workplace culture spilled out at a global all-hands meeting in late 2015 in Las Vegas, where the company hired Beyoncé to perform at the rooftop bar of the Palms Hotel. Between bouts of drinking and gambling, Uber employees used cocaine in the bathrooms at private parties, said three attendees, and a manager groped several female employees. (The manager was terminated within 12 hours.) One employee hijacked a private shuttle bus, filled it with friends and took it for a joy ride, the attendees said.

At the Las Vegas outing, Mr. Kalanick also held a companywide lecture reviewing Uber’s 14 core values, the attendees said. During the lecture, Mr. Kalanick pulled onstage employees who he believed exemplified each of the values. One of those was Mr. Michael.

Since Ms. Fowler’s blog post, several Uber employees have said they are considering leaving the company. Some are waiting until their equity compensation from Uber, which is restricted stock units, is vested. Others said they had started sending résumés to competitors.

Still other employees said they were hopeful that Uber could change. Mr. Kalanick has promised to deliver a diversity report to better detail the number of women and minorities who work at Uber, and the company is holding listening sessions with employees.

At the Tuesday all-hands meeting, Ms. Huffington, the Uber board member, also vowed that the company would make another change. According to attendees and video of the meeting, Ms. Huffington said there would no longer be hiring of “brilliant jerks.”