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Where to After Peak Silicon Valley?

Friday, September 2nd, 2016

Exorbitant rents, poor living conditions, long commutes, market saturation, unaffordable competition for talent — there are myriad reasons to leave Silicon Valley.

And many are doing just that.

According to a report by the Silicon Valley Competitiveness and Innovation Project: “For the first time since 2011, net domestic migration in Silicon Valley was negative, meaning that more Silicon Valley residents left the region for other parts of the U.S. than arrived from other parts of the U.S.”

Some food for thought:

The average age of a programmer in Silicon Valley is 28.

The energy of youth can propel a determined person to suffer inexplicable hardship in the quest for success. But programmers age, too. Years of long work hours are exhausting and can take a major toll on one’s physical and mental health. And what if they want to get married and have kids one day?

It can cost upwards of $1,000 a month to put a single child in daycare in Silicon Valley, and the average house costs between $1 million–$1.25 million.

Even with an average six-figure salary, chances are you might be happier and healthier starting up somewhere else.

The case for opting out of the Valley

It bears reminding that Silicon Valley isn’t the only place to get a good job and start a company.

In Canada, ecosystems in Montreal, Toronto, Vancouver, Waterloo and Ottawa have been prolific in their output of solid tech companies. There are hundreds of accelerators and incubators available and more money by way of government funding, venture capital, angel investing and otherwise is finally coming in, offering Canadians — and even foreign workers — the opportunity to build their companies on Canadian soil.

And let’s not forget other U.S. regions, particularly hotbeds of tech and startup activity in Austin, Boston, New York City, Chicago, Seattle, Denver and Los Angeles.

NYC and parts of LA aside, these places have access to many of the same venture capital funds as their Cupertino cousins.

Tel Aviv

Beyond North America, Israel’s tech sector — nicknamed Silicon Wadi — has had a historical trajectory similar to that of Silicon Valley. However, costs are much more manageable, and there is ample financial support for startups.

More bonus: A one-bedroom apartment in downtown Tel Aviv costs an average of US$1,158 and there are currently lots of developer job listings.

The 2015 Global Startup Ecosystem Ranking report Compass identifies Tel Aviv as having the biggest startup ecosystem outside of the U.S. and fifth biggest globally. The report gave Tel Aviv high marks on financing and talent, and named it third in the world for total exit value.

And Tel Aviv startups travel well.

In 2014, Israeli driverless-car software maker Mobileye raised US$890 million in its initial public offering on the New York Stock Exchange.

The city is also home to Waze, PrimeSense, Moovit, and other tech standouts.

Sao Paulo

The Brazilian city of Sao Paulo ranks 12th overall in the Compass report. Sao Paulo is a bit of a renegade. It’s the only Latin American city to make the Top 20 in spite of a violent crime problem that makes international headlines, as well as Brazil’s economic and political turmoil.

Brazil is young in terms of ecosystem maturity, meaning it needs more experienced entrepreneurs. There’s also money there (both local investment and foreign investment focused on Brazilian companies) — not to mention hundreds of societal, governmental, economic and other problems that technology may be able to solve.

Bangalore

The Compass report called Bangalore the startup capital of India, counting up to 5,000 startups in the city. It also says Bangalore had the second-highest growth rate among the Top 20 for VC funding and exit volume.

Known as “the world’s back office” for its prominent call-centre business, Bangalore is stepping out on its own. ”There are more start-ups here, more VC money here, that virtuous cycle is in full spate… These entrepreneurs are very young, very ambitious, changing the world kind of people,” Nandan Nilekani, a billionaire who made his fortune founding Infosys, told the Financial Times.

The wildcard: China

China could be dangerous for established markets if and when the country dismantles the Internet firewall created to stifle dissent. Online censorship makes it hard to tap into the pulse of China, but in a domestic market with 1.4 billion people, chances are they’re working on something big — very big.

The country has already created a “super app” in the form of WeChat, which makes even Facebook’s size and scope look small.

Other Chinese stand-outs include Didi Chuxing, a mobile transportation platform that recently took over Uber’s operations in China. Its total funding is $7.3 billion, of which $4.5 billion came from Apple private equity in June 2016.

Xiaomi, with $2.45 billion in angel funding, develops smart devices and software. Meituan Dianping is a new merger of two popular group-buying communities. In January 2016 it attracted $3.3 billion in investment.

Tags: Accelerators, New York City, Silicon Valley, Startup Culture, Tel Aviv
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A Brief History of Hacking

Thursday, August 4th, 2016

In 1957, a blind boy in Virginia used a high-pitched whistle to unlock his phone line, giving him free long-distance phone calls and establishing a hack with a direct line to Apple Inc.

Joe Engrassia, Jr., who changed his name in 1991 to “Joybubbles,” is widely considered to be the father of phone “phreaking,” a technology famous for inspiring Steve Jobs and Steve Wozniak to build a machine that could emulate the pitch frequency needed to control AT&T’s phone lines.

Wozniak, then a 21-year-old Berkeley college student, designed his “digital blue box” after reading 1971 Esquire article “Secrets Of the Little Blue Box.” For little more than $100 in parts, he and Jobs had hacked the global phone network. Jobs said the experience led them to build the Apple computer, a company worth more than $500 billion.

Technology journalist Clive Thompson, who’s currently working on a book for Penguin about how programmers think called Hello, World, says the blue box is emblematic of a certain subset of computer hackers.

“There’s a type of hacker that gets into computer because they enjoy screwing around with what they can get computer system to do, and that often involves stuff that’s thinly legal or totally illegal, because the fun is taking a system and seeing how to exploit weaknesses,” Thompson says.

That kind of curiosity-driven hacking made Wozniak a white-hat hacker, a term used to describe people who, loosely, like to take things apart to see how they work (and don’t work). Whether it’s legal or illegal is often beside the point because white-hat hackers are generally non-malicious and their exploits are often used to strengthen the very systems they hacked. Thompson points out that Apple has hired several people who were able to jailbreak and hack iPhones.

Those activities have also led to a number of tech advancements, perhaps most notably the open-source movement responsible for creating reams of non-proprietary software used by many of the world’s biggest technology companies. It was one of the first times a single piece of software was so widely adopted by the free market. “That kind of creativity can easily fold over into the type of creativity that capitalism rewards,” Thompson says.

There’s a direct correlation between the way open-source software permeated business and the developer culture we have today. It’s been enormously advantageous for companies to hire people who want to crack software open to play around with its insides, because they are some of the most motivated, clever and creative people in the world.

Gabriella Coleman, a preeminent scholar on hacker collective Anonymous, who holds the Wolfe Chair in Scientific and Technological Literacy at McGill University in Montreal, wrote in a recent essay:

So many hacker sensibilities, projects, and products are motivated by, threatened by, or easily folded into corporate imperatives. Take, for instance, the hacker commitment to autonomy. Technology giant Google, seeking to lure top talent, instituted the ‘20 per cent policy.’ The company affords its engineers, many of whom value technical sovereignty as part of their ethos, the freedom to work one day a week on their own self-directed projects.

Coleman points out that this does, unfortunately, lead to some people working 100 hours a week — a profound devotion to programming that has become a hallmark of developer culture. “Silicon Valley is smart in exploiting hacker tendencies, but people are also willing,” she says in a phone interview with TechPORTFOLIO.

Hackers in this area are generally amenable to the prospect of making money, though it’s usually not their main motivation — at least not at first. Coleman says hackers who become developers at companies often tire of the clock-in, clock-out grind of the corporate world and seek to create their own, more fulfilling projects, which has been a major catalyst in startup culture.

“Cool Technology” and “Lots of Money”

“In regions like Silicon Valley, and in other startup culture areas, there’s a very tight fusion of actual hackers who want to make cool technology and also want to make a lot of money,” she says.

There’s another side to hacking that’s probably best represented in popular culture by Mr. Robot, which focuses on an antisocial, anti-capitalist hacker widely believed to be inspired by hacktivist group Anonymous.

The Occupy movement, WikiLeaks, Edward Snowden and Chelsea Manning have all helped the public gain a greater consciousness, and even admiration, for hacking as a public service, leading to the rise of the Robin Hood hacker profile.

That such seemingly selfless acts, often driven by anti-capitalist ideas, have been repurposed by film and TV studios to make millions of dollars is ironic. “Hollywood has long made a lot of money off domesticating supposedly seditious ideas,” Thompson says.

Still, whether archetypal hackers — often highly intelligent and creative individuals who like to take things apart and who are generally mistrustful of the establishment — have been co-opted to form a developer culture that has fed tech startups, and therefore, capitalism, is a tricky question.

“Call out the Bullshit”

“It’s a really weird, and interesting moment, where the two discourses are really strong. They are in competition with each other,” Coleman says.

That said, the divides between discovery-driven hacking, Robin Hood-style hacking, hacktivism and black-hat hacking, aren’t as deep as some may believe. In fact, these spaces can be very fluid, and many hackers (and developers, by extension) dip their toes into these different waters from time to time. Experimentation and publishing boundaries are part of hacking’s core ethos, after all.

“There’s a politics to hacking no matter what, because so many of them are willing to call out bullshit and break the rules,” Coleman says.

Follow @traceylindeman on Twitter

Tags: Developers, Silicon Valley, Startup Culture
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Tech Entrepreneurs Flock to Bali

Tuesday, August 2nd, 2016

Computers are honored in Bali. So it’s no surprise that the culture of this island would attract tech innovators.

Bali, in the middle of the Indonesian archipelago, has grown for decades as a tourist destination, attracting people from around the globe to its beaches and terraced rice fields. Enchanted by the sweet scent of frangipani blossoms or the sound of lilting traditional music, some choose to stay, opening restaurants, boutique hotels or scuba diving schools.

Increasingly though, more of the island’s transplants are entrepreneurs developing apps and enterprise software solutions.

“Most people are attracted by the culture,” says Michael Craig, the Australian founder of Dojo Bali, a new co-working space less than kilometer from a beach that attracts surfers from Australia, Japan and California.

Bali is unique for how it has, for centuries, drawn on a mash-up of faiths and customs, creating a blend of Hinduism and traditional animist beliefs. Daily offerings left by Balinese are laid not only for spirits central to Balinese cosmology, but also for statues of Buddha and anything else recognized as meaningful or sacred.

The Balinese even have a day of recognition for things made of metal – including computers – to honor their contributions to community.

This acceptance of outside influences, including technological innovation, creates an environment that welcomes “digital nomads.”

Photo courtesy of Raphael Olivier.

While Bali’s environment and culture has been a draw for artists and innovators for many years, there lacked a central hub in which entrepreneurs could collaborate, learn and work with one another.

That is, until March 2013 when former CBC producer Peter Wall noticed the swelling ranks of Bali’s dislocated entrepreneurs and opened Hubud. The co-working space whose name is a variation on “Ubud,” an area considered the island’s artistic center. Over the last two years Hubud has been featured in several media reports as being among the best co-working spaces globally.

“85 percent of [Hubud community members] self-identify as ‘digital nomads’,” Wall says. “They’re as ambitious and driven as people I’ve worked with in other parts of the world. But they want a better balance.”

In an indication of Bali’s popularity among untethered entrepreneurs, Bali shows up the most in a recent ranking of the “hottest hubs and co-working spaces in Southeast Asia.”

Photo courtesy of Franz Navarette.

Hubud’s current space is at capacity having 3,500 members from 69 countries work in, or move through the space. Bali-based LineupHub and Wave also appear in the ranking.

To be sure, the island’s lack of direct access to venture capital is one of several factors that will prevent Bali from growing into a rival to Silicon Valley, Singapore, or Tel Aviv. That’s turning Bali into a community of “micro-entrepreneurs” as opposed to a startup ecosystem like the big city “valleys.”

But much like the unique nature of Bali in general, the island’s transplant-entrepreneurs turn that to their advantage. “If you fail [in Bali], no one cares,” Wall says. “Seed capital goes a long way and your cost of failure is very low.”

Wall says one of Hubud’s community members received startup funding in the Netherlands and received “tons” of applications for software developers wanting to work for him because they would be located in Bali. As many startups struggle with talent acquisition, Hubud has a unique draw in being able to offer a tropical development space.

Wall has demonstrated how Bali can be used as a development resource while client relations business development and administrative work can take place in other countries. Creating a link between Bali and other geographies is part of what is making Hubud unique.

“Make money in US dollars, live on Indonesian Rupiah, and outsource in Filipino Pesos; I can afford to build a virtual and global team this way,”said Lydia Lee, a corporate escape coach and author of Screw The Cubicle, operating from Hubud.

“Culturally, the Balinese people are friendly and eager to immerse foreigners into their ceremonies and religious events, so people feel welcomed here,” Lee says. “Coworking spaces like Hubud are popping up more and more around the island, with the speed of wifi improving greatly to host digital nomads.”

What Bali lacks in venture capital and academic institutions, it makes up for in creativity, which draws people with many skill sets to the island. Ubud, for example, was one of the settings in Eat, Pray, Love, the best-selling travel memoir by Elizabeth Gilbert, as well as playing host to one of Asia’s most well-known book festivals.

The Guardian calls the annual Ubud Writers and Readers Festival a “well-established” event, where the publication convened a writing masterclass last year.

“You choose a co-working space based on community,” said Josh Gray-Emmer, 38, who directs a network of developers in Lithuania and Ukraine, among other locales, from Dojo Bali. “There’s a great, eclectic mix of people doing all sorts of things here. I rely on places like this for a local support system.”

A working area at Outpost, a co-working community in Bali.

From his table at Dojo Bali, not far from the surf Mecca of Echo Beach, Gray-Emmer tasks his network of developers to design websites and build custom APIs for his clients, all of whom are customers of LA-based NationBuilder, a consultancy for politicians and advocacy groups.

“I’m in the future,” Emmer-Gray says. “Clients go to bed having sent me a list of things they want done, and I work on it while they’re asleep.“

In Bali, “there are many opportunities to meet talented people from around the world,” said Zach K.D., a former Hubud member who moved to Bali from Vancouver to produce a series of how-to videos and run an online clothing design and marketing business. “It’s easier to achieve a healthy work/life balance here than in Canada.”

Zach doesn’t use his full name in speaking with TechPORTFOLIO for privacy reasons, as many of Bali’s digital nomads are there working without a work visa. Like many countries in the region, work visas are difficult to secure without backing from global companies registered there. That’s to prevent foreigners from filling jobs that could otherwise go to Indonesians.

Still, Bali’s entrepreneurs are finding ways around these restrictions, staying for months or years building and supporting global businesses while surrounded by tropical serenity.

Outpost, another Ubud co-working space, which offers resort-style accommodations and massage along with shared office space, hosts between 20-40 people each day, according to co-founder David Abraham.

Asked what attracts tech entrepreneurs to Bali, Abraham says: “That takes more than amazing amenities. It takes a diverse, successful community where people share their ideas.”

“Need help raising money? Speak to Bryan,” Abraham says. “Need help crafting content? Talk to me. Need help with SEO, speak to the guy sitting next to me right now. Our community is full of people who just get stuff done.”

Exactly what has attracted writers, surfers, and travellers to Bali for decades before the digital nomads began setting up shop.

Tags: Asia, Startup Culture
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Women in Tech on Twitter: Fear, Loathing, and Support

Thursday, June 30th, 2016

Women in the technology sector are using Twitter to share fear and vent, according to analysis by the TechPORTFOLIO team with the IBM Watson Tone Analyzer.

As part of our month-long series highlighting women in tech and their unique experiences and challenges, we looked at a list of prominent women in the sector who were active on Twitter and used cognitive analysis to determine the tone of the tweets sent to them in public. We wanted to find out whether there was a difference in the way that people in public and their community spoke to them on Twitter, compared with the technology sector at large.

Women on Twitter

Control Group

The figures above seem to indicate that there is much more anger and fear present in conversation aimed at women in technology, and marginally more emotional range and openness.

A large number of the tweets with a degree of fear or anger were people seeking or offering mutual emotional support, for matters large and small.

Girl some of these mediocre white dude fools who are raking it in…we got this! #WOCinTech

— Kronda (@kronda) June 15, 2016

you're quite welcome. Good luck on the collection process, that can be a treacherous process.

— Elon Musk's cow (@elonmoooooosk) June 9, 2016

Oh dear, that sucks. Put sheets in the freezer, put icy things behind fans. GOD GET THAT FIXED!

— Tamera Clark (@tameraclark) June 15, 2016

The tech community in the control group had more conversations, but they were more one-sided. There were a far higher level of “drive by” tweets without any real attempt to engage in conversation; such as requests to retweet, or feature suggestions.

In our analysis, we didn’t see that many examples of outright abuse directed at our women in tech list. The control group — which was filled with several high-tier individuals such as Apple CEO Tim Cook, philanthropist Melinda Gates, and “inventor of the web” Tim Berners-Lee — had several tweets that been marked as deleted. It’s possible that any retroactive reporting on Twitter’s language and possible tendency towards abuse might be affected by reporting of offensive content and moderation.

This shows that despite Twitter’s ongoing issues with harassment against women, the platform is still a valuable community space. Settings that allow for trusted conversation, like these from UX researcher Caroline Sinders, would support this while allowing for some protection against drive-by abuse.

https://twitter.com/dinosaurrparty/status/740227885772898308

Try the Tone Analyzer now. If you want to incorporate IBM’s Watson into your own application hosted in the cloud, click here.

Method

For our group, we selected the Anita Borg institute’s Twitter list of 500 most important women to follow on Twitter. Of those, we found the 50 most active, and took one week of tweets: June 8 to June 15, with a maximum of two @-replies each day.

There are no “men in tech” Twitter lists, of course, at least ones that are from comparatively reliable sources. Our control group, therefore, was Robert Scoble’s popular list of most influential people in technology. Several of the people on the list are, of course, women; a straight comparison with the online population at large works better for our purposes, anyway. Once again, we took the fifty most recently active users.

The control group contained several high-tier individuals on Twitter, making the volume of @-replies incredibly high. The TechPORTFOLIO team had to cut the time period down to 24 hours only, for June 8–and even then, we had to remove an unusually high spike of tweets aimed at @davidplouffe, an Uber board member and Barack Obama election campaign strategist. (Sorry, Mr. Plouffe, you were already having a bad day.)

For a free trial of IBM Watson Analytics click here.

Tags: IBM Watson, Women in Technology
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Startups Eat Into The $4.7 Trillion Financial Services Industry

Wednesday, April 20th, 2016

When Mark Andreessen of venture capital firm, Andreessen Horowitz, declared in 2011 that ‘software is eating the world’, few predicted that banks – the bedrock institutions of economic activity – would be on the menu.

If Goldman Sachs is correct, fintech – which generally refers to “point solutions” created by startups to make payments, loans, and other financial transactions easier than what’s offered by incumbent banks – could displace $4.7 trillion in revenue for financial services firms.

In Canada, fintech adoption is set to triple in the next year as startups like Wave and Trulioo unbundle banking services and products. In the U.S., Lending Club, one of the world’s largest fintech startups, has grown its loan portfolio rapidly since the San Francisco-based company went public in 2014.

Angela Strange, an Andreessen Horowitz partner said in a keynote presentation at the Canadian Fintech Summit 2016 at MaRS Discovery District in Toronto that 75% of millennials would rather go to the dentist than listen to a bank’s message, and prefer financial services from the likes of Google, Amazon, and PayPal over those provided by banks.

Other stats Strange highlighted: Half of millennials think all banks are the same, and two-thirds of them don’t have credit cards.

Hundreds of Billions

The term fintech originally referred to the back-end processes of setting up servers and software applications for the front-end of traditional banking institutions. The definition has since evolved to include any tech solution that provides a financial service or competes with the offerings of financial institutions.

As an indication of the scale of this industry, these services generate more than $200 billion in returns for a group of 25 large banks analyzed by consulting firm Oliver Wyman.

And the competition is ramping up. A recent KPMG report reveals a booming North American alternative finance market. Transaction volume soared to $36.38 billion in 2015, up 213 percent on year.

Moreover, senior executives in the financial services industry surveyed by PwC for a recent report say 23 percent of their business is vulnerable to further developments in fintech, and fintech founders say they’re targeting about a third of the incumbents’ business.

Another key insight from the Canadian Fintech Summit 2016 is that the future of money and banking is not a matter of big banks battling startups.

Established tech giants like Apple have entered the space with solutions like Apple Pay, and Samsung isn’t far behind. The future of money and banking will likely be a hybrid model that merges the distribution channels and trusted relationships forged by banks with the user-centric sensibility of startups.

Regulation and governance will continue to be concerns in the future. Strange may have said it best: “Fintech startups that will succeed in Canada are the ones that take regulations seriously. Think customers don’t care about anti-money laundering? You’ll end up in jail.”

Apart from shifting demographics and an evolving competitive landscape, other factors such as the use of digital currency and emerging technology will play a role in shaping the future of money.

Fintechs and big banks, for example, are both trying to determine how to adopt and govern blockchain, the structure that eliminates the need for a central clearinghouse to verify transactions.

Robo-advisors are expanding the fintech market, serving those who either do not want or cannot find a financial advisor.

Advancements in virtual reality, augmented reality, biometrics, and artificial intelligence will also offer new opportunities for further innovation.

Overall though, startups have the advantage in deploying innovations because they don’t need to work around legacy IT systems that aren’t easy to abandon because of the huge amount of data that becomes vulnerable in any migration. Meanwhile, millennials are looking for the easiest robo-advisors and automated savings apps.

Like hotels and publishers, the big banks have billions to lose if they don’t provide solutions that mobile-driven, brand-agnostic millennials want.

Tags: Blockchain, Fintech, News
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Halliburton Chooses IBM Cloud to Help Cut Oilfield Development Costs

Wednesday, April 20th, 2016

Halliburton, the global oilfield services company that works with many of the world’s largest oil and gas players, has adopted IBM Cloud to run more detailed reservoir simulations, which may help struggling producers cut costs.

Record low oil prices, caused by strong output among oil producing nations amid weaker global demand, have put pressure on producers of the fossil fuel to lower extraction costs. Crude oil prices have fallen by more than half in the past two years, and talks between OPEC and Russia aimed at curbing production have stalled.

“Using high performance computing of the IBM Cloud, we can run very detailed simulation models and evaluate a wide range of field development options, which translates into better field development plans for our clients and a competitive advantage for our business,” Steven Knabe, a Halliburton Consulting director, said in an IBM statement.

The world’s biggest oil companies are expected to report their worst quarterly earnings in more than a decade because the industry’s cost-cutting efforts haven’t yet offset the decline in crude prices, Bloomberg reported. This adds pressure on producers to leverage technology to help plan reservoir development in a way that maximizes returns.

Like many industries, oil and gas companies are turning to technical advances available through cloud computing, data analytics, and machine learning to boost productivity.

And there is room for growth. “While some oil and gas companies have invested in their analytics capabilities, many struggle to get their arms around this powerful new opportunity,” consulting firm Bain & Company said in a report titled “Big Data analytics in oil and gas.”

Adopting IBM Cloud technology allows Halliburton to “quickly run hundreds of simulation cases to forecast the possible behavior of complex oil and gas fields,” according to the IBM statement, which doesn’t disclose terms for the company’s usage of IBM Cloud.

IBM markets a range of solutions for enhancing production, improving processing efficiency, and optimizing global operations for the oil and gas industry.

Halliburton Consulting specializes in formulating development plans for both new and mature fields.

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Canada’s Big Banks Turn to Hackers for Innovation

Thursday, March 31st, 2016

Canada’s banking system emerged largely unscathed by the global financial meltdown that started in 2008, earning the country so much credit that the Bank of England drafted Mark Carney, the Bank of Canada’s governor throughout the crisis, to be its leader.

Prudent Canadian lending practices, however, haven’t translated into innovation. According to MaRS, the Toronto-based non-profit that commercializes home-grown tech, Canada’s financial center and largest city is ranked ninth globally for fintech innovation. Global investment in fintech ventures jumped to about $12.2 billion in 2014, according to a report from management consultancy firm Accenture, making it a key area for any city aiming to stand out as a tech ecosystem.

“The big banks are a little late to the game, but we have the major ingredients for a strong fintech ecosystem,” says Robert Antoniades, general partner and co-founder of Information Venture Partners, a Toronto-based venture capital firm.

Go Grassroots

One way for big institutions to engage with the next generation of innovators is through grassroots meetups. Scotiabank recently delved into hackathons for the first time, hosting their Debt Challenge, where 100 coders and designers crammed into the bank’s boardroom for a 40-hour competition.

“I met my team for the first time in the conference room,” says Mohit Kishore, a 23-year-old computer science student at York University in Toronto. Kishore had been to hackathons before with Royal Bank of Canada (RBC) and coder meetups. “I prefer to work with new people,” he says. “Working with those you know doesn’t always produce new ideas.”

Mohit’s team created SCOTTY (Scotiabank Optimization Tool for You), a personal financial advisor built with Android, IBM’s Watson—which leveraged its powerful machine-learning capabilities—and their cloud platform Bluemix.

SCOTTY scored the team second place. Piggly, a Tamagotchi-like piggy bank where users have to spend real money to keep it alive, won the $15,000 grand prize.

“One of the guys on the team saw a similar concept discussed on Reddit,” says Cassandra Hui of the winning team, who developed the idea in advance. Hui even sat down with credit counselors to figure out how to gamify paying off debt. They’re now in talks with Scotiabank over how to potentially implement Piggly through the bank’s Digital Lab.

Be Aggressive

Hackathons are one way Canadian banks can innovate but they still need to share ideas and be more aggressive, says Antoniades.

“What I like is that each big institution now has an innovation strategy,” he says. “We’re still seeing banks wanting exclusivity.

“Banks need to be able to make quicker decisions with a technology. But it’s only a matter of time before that changes.”

Are you a developer looking to innovate? Try IBM’s Bluemix for free for 30 days.

Tags: Fintech, IBM Watson
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We’re Calling It: Startups Have Ended the Industrial Era

Thursday, March 31st, 2016

The world’s economic map is being redrawn. Industries dominant since the 19th century with support from government institutions and political alliances are now a drag on the global economy. Meanwhile, tech startups — disregarded by many of the bureaucracies and political offices that perpetuated the old industrial order — are creating growth.

In this new epoch, cities, countries, and entire regions have the opportunity to advance economically by creating the conditions that attract information and communications technology talent and the investors willing to fund them. Outcomes are no longer determined by factors such as access to natural resources, military power, and international treaties.

Instead, economies are increasingly influenced by advances in processing speeds, storage capacity, and connectivity, which have spurred the migration of the enterprise onto cloud-based platforms developed by startups.

Reflecting this trend, technology mergers and acquisitions announced in 2015 reached a record high of $313 billion, up 82% compared to the $171.6 billion announced in 2014, VentureBeat reported recently, citing a PriceWaterhouseCoopers report.

And according to the 2015 Global Startup Ecosystem Report by Compass, a significant portion of U.S. job and economic growth in the past 15 years has come from high-growth technology companies such as Apple, Amazon, Facebook, and Zynga. These companies barely existed two decades ago and yet the nine largest tech companies have created almost a trillion dollars in new wealth.

Net New Job Growth

Companies in the startup space are disrupting and outperforming traditional industries — think Airbnb versus the hotel industry. A 2010 study by the Kauffman Foundation illustrates the economic importance of startups best: In the 28-year period ended in 2005, startups created the only net new job growth in the U.S. while “industrial era” companies collectively shed jobs. And the number of billion-dollar-plus tech companies have only multiplied in the years since the Kauffman study, further underscoring the shift in the balance of power towards startups.

Most importantly, young workers are embracing the new tech startup paradigm.

Smarting from years of diminished long-term and permanent employment prospects, millennials — who will drive economic growth in the first half of this century — are being both pushed and pulled into joining or founding these mini-factories of industrial disruption.

As a result, 32% of self-employed millennials are running startups, versus just 9% of boomers, according to a recent report by Global Risk Insights.

To be sure, confidence about startup prospects might waver amid recent write-downs and “down rounds.” However, few industry pundits are calling the volatility a repeat of the dot.com collapse of 2000. Mark Suster, managing partner at Upfront Ventures, calls what’s currently happening with valuations “a reversion to the mean.”

“The valuations were high; they’ve come back to the historical norm, so we could call that failure or we could just say that companies were overvalued for the past two years,” Suster said in an interview with TechCrunch.

Given the degree to which most people spend their lives online, the current correction might just make the startup ecosystem healthier because it’s making valuations more realistic.

Although Silicon Valley still dominates, burgeoning pockets of innovation are rising up globally and making their mark on the economies they operate within. Governments can choose to support or restrain their growth, but as processing capabilities speed up, smart devices proliferate, and connectivity continues to expand into all of the things people interact with, the latter choice becomes increasingly difficult to sustain.

Below are a few examples of tech ecosystems cited in the Compass report, and their economic impact.

Singapore (#10)

Jumping 7 spots from the 2012 rankings, Singapore’s tech ecosystem has experienced a meteoric rise. With its eyes set on becoming the world’s first ‘Smart Nation,’ tech startups are an integral component of the city-state’s long-term economic plans. This tech ecosystem is an excellent example of how risk aversion can serve as a competitive advantage. Rather than take a reactionary stance, Singapore-based multinational corporations (MNCs) are investing in their own disruption by seeking out startups, incubators and accelerators to fund, in order to minimize the risk of being displaced by younger, leaner competitors in the future. Risk aversion also underlies the government’s $1 billion Technopreneurship Investment Fund, which offers up to $2 million in funding to individual tech startups, and also shoulders some of the upfront costs associated with launching a tech startup. As a result, MNCs and Singapore’s government are redistributing risk within the tech ecosystem and shifting the burden from startups, creating a scenario in which risk is reduced for stakeholders, while potential gains remain high. The program not only bolsters homegrown startups, it is also attracting foreign entrepreneurs.

Singapore is also one of the 12 countries participating in the Trans-Pacific Partnership, a free-trade zone similar to NAFTA. These 12 economies have a combined GDP of $28.5 trillion, which accounts for nearly 40% of global GDP. Free trade with countries that have other powerful tech ecosystems such as Silicon Valley, Sydney, and Toronto could help bolster an already strong economy through perks such as the reduction or elimination of tariffs. By having greater access to North American markets, Singapore will also gain an edge over its biggest competitor, China.

Berlin (#9)

No other tech ecosystem has experienced more growth in the past two years than Berlin. Earning a 10 out of 10, Berlin’s growth index is now double that of its closest contender, Bangalore (4.9), and almost 5 times greater than Silicon Valley. Its stand-out growth can be attributed to a rise in exits, VC funding, and the notable back-to-back $6 billion IPOs of Zalando and Rocket Internet, which kicked Berlin’s tech ecosystem into high gear. High-valued exits aren’t the only signals of growth. According to a McKinsey & Company report, Berlin could gain 100,000 jobs between 2010 and 2020 as a result of initiatives focused on strengthening the local startup scene. Furthermore, the German Patent and Trade Mark Office received almost 66,000 patent applications in 2014 alone, a good indication that the city is thriving as an innovation hub.

Having signed a recent partnership with Tel Aviv — another highly-rated tech ecosystem — Berlin shows no signs of slowing down. The city’s startups will gain access to mentorships, coworking spaces, networking events, and more in Tel Aviv, exposing them to greater learning opportunities and allowing them to expand their market reach outside of Germany. The value and economic impact of the partnership will reveal itself in the next few years, and should contribute to Berlin’s continued upward climb.

Tel Aviv (#5)

Berlin’s tech ecosystem partner ranks at number 5, making Tel Aviv the top tech ecosystem outside of the U.S. Tel Aviv’s lead talent is molded by higher education, and military conscription which instills discipline and a sense of camaraderie, while also providing future entrepreneurs with opportunities to connect and collaborate. Combined with the availability of VC funding, these factors contribute to Tel Aviv’s entrepreneurial success. With an estimated 3,100 to 4,200 active tech startups, the city’s density allows for greater collisions and benefits from the cluster effect. Connected and experienced, its startups attract more foreign capital than any other European tech ecosystem (38% more than the European average). And its economic impact extends far beyond Israel; Tel Aviv startups rank first in Global Market Reach, having twice the percentage of foreign customers as Silicon Valley.

Tel Aviv is poised for greater economic success as growth in big data, IoT, cybersecurity, and digital currency accelerates.

Montreal (#20)

New to the list, Montreal has made considerable headway in positioning itself as a tech ecosystem worthy of global attention. The 2015 Global Startup Ecosystem Report ranks Montreal startups third in Global Market Reach, with a 57% foreign customer base (35% above the North American average) and an average number of product languages of 2.4 (24% above the North American average). This tight-knit startup community has experienced steady increases in success. ICT companies like Amaya Inc. and Budge Studios, have five-year growth rates of close to 3,650% and 2,500% respectively. High growth rates tend to be accompanied by hiring sprees, and Montreal startups have the added benefit of access to the most inexpensive tech talent amongst the top 20 tech ecosystems. Montreal’s gains on this front are crucial for Canada, which has been economically hamstrung by weak oil prices over the past two years. The fact that Montreal’s Series A funding is 11% higher than any other tech ecosystem only helps.

Alhough it’s a relatively young innovation hub, Montreal’s talent is making the most of what the city has to offer. When large tech companies like Ubisoft set up satellite offices in Montreal, they provide a springboard for talent who can also use that experience to launch their own companies, increasing Montreal’s contribution to Canada’s GDP.

Lead or Lag

As power continues to shift in this tech-driven epoch, it is the success of startups, not established companies, that will support and grow economies. How governments and private industries invest in startups will determine future GDP, international competitiveness, and whether or not they lead or lag on the global economic stage.

Tags: Silicon Valley, Tel Aviv
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