What is innovation? One definition is that innovation equals creativity + execution. An idea alone carries no value if you are not able to actually turn it into something and scale it. If The Valley is about investors, it is just as much about innovation. They are in symbiosis. And everything is about scale.
“The day before something is truly a breakthrough, it’s a crazy idea.” – Peter Diamandis
I travelled to The Silicon Valley well prepared, or so I thought. I wasn’t really surprised by the scale of things and I also knew to expect that thinking bold comes as second nature. Still when Facebook laconically explained how they will build internet access with the solar-powered drone Aquila to those 4 billion people without Internet (of whom 50% don’t even know what internet is), I couldn’t help noticing my own awe.
Not about the fact that the drone’s wingspan exceeds that of a Boeing 747 and still weighs less than 400 kg. Nor about the positive arrogance of “if there is not enough internet, let’s just make more…” But of the laconic tone of the narration – of course we will do this because we need to. And because we can.
The wilder the innovation, the more I admire the innovator. Can you learn to become an innovator? There are lots of books and articles about how to innovate.
Based on what I heard from the start-ups, grown-ups and scale-ups, this is my list for everyone who wants to be a valley-style bold innovator
Don’t limit your thinking. At all. Innovation comes from everywhere.
Challenge fundaments. If you need to design a driverless car, start by asking what is a car, what is a driver, why do you need one, who needs one…
Focus on the user. The modern user expects nothing short of fast, simple and magical.
Launch and iterate. Launching a minimally viable product will steepen your learning curve and accelerate your pace to the final product. Share and learn.
Design for scale. Think 10X, think global
Share and learn. Think ecosystem, show and tell,
Fail well. This is the combination failing fast and learning fast
Have a mission that matters. The bigger the problem that you’re are solving, the bigger and more meaningful the solution. Going on a mission attracts passion.
C’mon everybody, let’s start innovating disruptively! Easier said than done. Where to start? I would look into design thinking, which is a creative strategy for designers and it is the current mainstream innovation approach.
“Design thinking is a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success.” – Tim Brown, CEO of Ideo
The centrepiece of design thinking is almost too obvious – The Human Being. This is paramount to keep in mind and looking at some of the so-called innovations, this is forgotten far too often. And too often we come up with inventions and call them innovations.
Design Thinking captures the essence of these top principles into four distinctive phases:
Inspire new thinking by discovering what people really need
Push past obvious solutions to get to breakthrough ideas
Build rough prototypes to learn how to make ideas better
Craft a human story to inspire others toward action.
“That ain’t workin’, that’s the way you do it – Money for nothing and chicks for free” – Mark Knopfler
There is a certain primal simplicity about design thinking, which I like. Instead of looking for something universal, look for something small, which has huge scaling possibilities.
One of my favourite innovations is the paper clip. It dates back to the 1860’s and in spite of various attempts to improve it and make them from other materials than metal wire, the original Gem paper clip is still in use 150 years later. It solved a very true yet simple problem – and very simply. Manufacturing cost was miniscule and scale was genuinely global. It was a very creative invention combined with broad execution.
Other stories inspired by the visit in The Valley:
Tässä taannoin meille tuli projekti, jossa asiakas oli tehnyt koneoppimisharjoituksen (ennustemallinnus) erään toisen kumppanin kanssa. Asiakas oli skeptinen tulosten suhteen ja halusi ns. toisen mielipiteen, mutta eri ohjelmistolla tehtynä. Joskaan senhän ei pitäisi vaikuttaa olennaisesti tuloksiin. Jo heti alkuvaiheessa huomattiin, että homma olikin alunperin mennyt pieleen väärin muodostetun opetus- ja testiaineiston vuoksi. Alkuperäinen tekijä ei tullut huomioineeksi, että ko. aineistossa rivitkin korreloivat keskenään ajallisesti, jonka vuoksi perinteinen satunnaisotos ei toiminut järkevästi. Tulokset olivat siis kuralla, mutta onneksi eivät tuotantokäyttöön vietynä. Siellä vahingot olisi mitattu euroissa.
Virheiden tekeminen on helppoa
Kun tehdään koneoppimismalleja, niin moni asia voi mennä pieleen. Tätä ei tietenkään tulisi todeta tämän positiivisen pöhinän ja hypen huipulla. Joka tapauksessa, tässä pari esimerkkiä missä voi mennä Strömsöön ohitse.
Opetusdata on virheellisesti toteutettu. Esimerkiksi, tehdään ennustemalli proteiinin käytöstä urheilijoilla ja kerätään opetusdata vain juoksija-foorumilta. Kun mallin tuloksia soveltaa muualla, esim. pakkotoisto-foorumin jäsenillä, niin se ei todennäköisesti toimi. Opetusdata ei ollut ns. edustava otos. Tämä oli trviaali esimerkki, mutta käytännössä näitä tilanteita voi olla vaikeaa tunnistaa.
Toinen esimerkki vaikka aikasarjojen käytöstä. Jos trendimäisiä aikasarjoja tuuppaa malleihin, niin niistähän saa keskenään hienoja selitysasteita ja korrelaatioita. Jotka ovat siis harhaa. Trendit pitäisi poistaa esim. erotuksilla. Kaikki tilastotieteilijät tietävät tämän, mutta asiaa ei välttämättä opeteta esim. “Analytiikka Softa XYZ:n” kurssilla.
Kolmas esimerkki. Ennustetaan asiakaspoistumaa perustuen historiadataan. Dataan on otettu mukaan asiakkaan viimeisin sopimustilanne. Tämähän toimii jos ko. asiakas ei enää palannut asiakkaaksi. Jos taas palasi ja otti toisen sopimuksen, niin homma menee keturalleen. Dataan on tullut tulevaisuudesta “vuoto”. Datan pitää siis kuvata tilannetta, joka asiakkaalla on ollut silloin, kun sen asiakkuutensa lopetti.
Kaiken kaikkiaan opetusdatan muodostuksessa voi tehdä lukuisia kämmejä, jotka voivat viedä myöhemmmiltä tuloksilta pohjan pois. Haastavaa tästä tekee se, että jos data on pielessä, niin mitkään parhaat käytännöt ja nerokkaat algoritmit eivät tilannetta jatkossa pelasta.
Mallin ylisovitus (overfitting). Skippaan tässä mallien overfittauksen helpon (teknisen) osuuden. Vakavampi overfittauksen muoto syntyy, kun käytössä on suhteellisen vähän dataa ja se on jaettu vain opetus- ja testiaineistoksi (ei siis erillistä validation datasettiä). Sitten valitaan jokin ML-algoritmi, sanotaanko vaikka RandomForest ja aletaan mallintaa iteratiivisesti – eli tarkastellaan testiaineiston tuloksia aina yhdessä opetusaineiston tulosten kanssa. Ja tätä tehdään, kunnes löytyy malli, joka toimii upeasti molemmilla dataseteillä.
Ongelma vaan on, että noin tehtynä mallia kehitettiin epäsuorasti testidatalla eikä se välttämättä yleistykään odotetulla tavalla. Luultavasti monet osakemarkkinoiden backtestaukset on sössitty juuri näin. On etsitty “väkisin” säännöt, jotka toimivat historiadatan kanssa.
Virheiden merkitys, nollasta miljooniin..
Miten iso merkitys tuollaisilla virheillä voi olla?
Otetaan yksi esimerkki tilanteesta, jossa merkitys on vähäinen. Eli yritys N tekee puhelinkampanjoita ja soittelee täysin satunnaisesti ihmisille. Jos tähän tekisi ennustemallin, joka ei toimisi, niin tulos tuskin huonontuisi tuosta satunnaissoittelusta. Toki menisi aikaa ja rahaa turhan mallin kehitykseen, mutta business ei kärsisi.
Vahinkoa sen sijaan syntyy jos vaikka yritys X muuttaa tuotteiden hinnoittelua virheelliseen malliin perustuen, ja kysyntä tippuu 10%:ia ensimmäisen kuukauden aikana.
Tai että yritys Y muuttaa ostoprosessejaan perustuen koneoppimiseen, mutta virheellisen datan vuoksi tuli tilattua Teddy-karhuja 100 konttia liikaa. Ne jaetaan sitten seuraavana jouluna yhteistyökumppaneille tai ilmaisen muoviämpärin täytteenä.
Virheet saattavat siis tulla kalliiksi. Siksi onkin järkevää pilotoida mallien toimivuutta oikeassa ympäristössä, mutta rajatusti. Jos tuotannossa tulevat tulokset eivät vastaa mallinnuksen aikaisia tuloksia, niin sitten kannattaa selvitellä syyt siihen.
Osaamisen merkitystä on vaikeaa ylikorostaa tällä osa-alueella. Sen voisi oikeastaan jakaa kolmeen osaan.
Ohjelmistojen käyttäminen. Ohjelmistoja on helppo oppia käyttämään, mutta se on vasta lähtötaso. Sama kuin viivoittimen käyttö arkkitehdille. Väittäisin että pätevän data-analyytikon ammattitaidosta vain 10-20%:ia on ohjelmistojen (esim. R, Python, Azure ML, Watson, RapidMiner) käyttöön liittyvää.
Koneoppimisen eri osa-alueiden riittävän syvällinen osaaminen (data, training/test/validation, ennuste- ja klusterointimenetelmät, ylioppiminen, ristiinvalidointi, muuttujien valinta, parametrien optimointi, muuttujien normalisointi, standardointi, .. jne…)
Toistojen määrä – mitä enemmän taustalla on erilaisilla dataseteillä ja menetelmillä ratkottuja ongelmia, sitä parempi tuntuma hommaan on. Onneksi tässä ei tarvitse aina odottaa uutta projektia, vaan harjoitella voi monenlaisella datalla (esim. http://archive.ics.uci.edu/ml/index.php).
Meidän omissa koulutuksissa opetetaan lähinnä perusteita eikä kenellekään jaeta “tekoälymestarin” hattua 1-2 päivän kurssin jälkeen. Mutta siellä saa kuitenkin tuntuman siitä, että mitä koneoppimisen ratkaisuissa pitää huomioida, millaisia ongelmia niillä voi ratkoa ja pääsee tietysti itsekin tekemään vähän malleja. Useimmille tämä taso riittävä, koska he haluavat vain ymmärtää asiaa paremmin – eivät tulla “tekoälymestareiksi”.
Mutta on joukkoon sattunut niitäkin, joilla lamppu on syttynyt. Heille ollaan suositeltu Courseran Machine Learning kurssia. Se on on online-kurssi, sisältää hyvän opetuksen ja materiaalit eikä maksa mitään. Miinuksena tietysti tässä kiireisessä maailmassa on, että sehän kestää jopa viikkoja..
The amount of venture capitalist (VC) money in the US was 62,8 billion in 20161,2. The Bay Area alone collected 45% of this and the rest of California another 10%. For comparison, the state budget for Finland in 2017 was just short of 50 billion euros.
“Money, money, money” – Benny Andersson, Björn Ulvaeus
The Valley and San Francisco is like a candy store for venture capitalists. There are so many start-ups and emerging businesses to choose from, one really needs to find ways to select the best ones. There also many venture capitalists in The Valley, but fundraising is very competitive. Compared to less competitive markets like Utah, San Diego, Maryland, Georgia etc. where there are roughly 1,5 VCs per company, there are only 0,5 VCs per company in The Valley.
Are you in the right industry for an investor?
In 2016, 13 VC-backed US unicorns were born – by the end of Q2, there were already 12 new-born unicorns in 2017. What are all these unicorns doing?
Assuming San Francisco is a reasonably valid indicator of where the global investment focus is heading to, get this: the Internet, mobile and telecommunications industries account for the loaf (70-80%) of the investments in 2013-Q2/2017. Healthcare trails next with a slice of 10-15%, software (non-internet/mobile) and hardware scrape up 3-5% of the crumbs.
The Silicon Valley is not quite as skewed. The Internet-industry investments alone are collecting about a fourth of the wallet and the other top five industries trail behind fairly evenly at 10-15% each1.
Especially start-ups don’t have a track record, so investors need to understand and estimate future potential and possible earnings. What do they look for2? And how should you be prepared?
They are looking for couple of things – always be prepared to pitch
Make it come natural, rehearse it, get it right. If can’t make your story compelling 30 seconds at a time, you will not make that first impression count. Your first impression makes the difference between making it or breaking it.
Addressable market & 10x opportunity
The addressable market needs to be big enough and opportunity needs to be equally big. The business model needs to be scalable and the go-to-market plan must be clear. This would be the first 30 seconds of your pitch.
Stunning Product & Magic
The next 30 seconds of your pitch should be about your product. What VC’s look for is a huge pain-point that your solution heals. It needs to include an obvious uniqueness. Preference is that you have evidence that there is already some market traction.
VC’s want to see talent and ambition, superior technical skill sets and business acumen. Visionaries need to show evidence of execution.
A clear Ask – How much and what do you need?
To close your pitch, you need to be able to formulate your ASK. How much do you need? What else do you need besides money? What will you use the money on? For how long do you need money for?
Focus. Focus. Focus.
There is no room for blurred fringes in what you do. If you have too many ideas, scrap most of them and if possible, just focus on one. Concentrate all efforts on the one bold idea, which you think can really make it. It shows you are able to prioritize and it makes your pitch and your ask lean and mean.
The honeypots and Bumblebees
We went one evening to Rosewood Hotel bar in Menlo Park, which on Thursdays was reportedly the place to be. It is located coincidentally or not just off Sand Hill Road, which is the address of most of the VCs.
Lots of hustle’n’bustle and flirting and you have the whole spectrum of start-ups, scale-ups, grown-ups, entrepreneurs, in-between-jobs (not has-beens but perhaps fast-failers), VC’s, rising stars, shootings stars and wanna-be’s. Kind of like Thursday evening at “Kalle”, the thursday-evening iconic flirting hot-spot in Helsinki, but then again, not at all. Not even close.
While waiting for your beer at the bar, you will get to pitch your business once or twice. When you mingle around and get introduced, you get to pitch again a couple of times. When you bump into someone, you get to pitch. You don’t have to – you get to. People are genuinely interested about what you are about, why you are there, about your dream and your 1-2-3 pitch.
The analogy with flirting and pitching is not far-fetched. The basic idea is the same: suggest interest in a deeper relationship and you if don’t succeed in 3 minutes, the game is probably over.
PWC MoneytreeTM report Q2/2017
Alliance Venture presentation – Investor in residence perspective, Arne Tonning
Other stories inspired by the visit to The Valley:
Did these presentations deal with the (still) hottest talks-of-the-town right now – IoT, AI, Machine Learning, Big Data to name few? To some extent yes, but maybe not as much one would be encouraged to expect midst this age of digitalization hype.
It turned out that the presentations from a number of Finnish companies were very much about real-life applications of technology in the companies’ own business context.
Do you know the right question?
What I did hear was a number of stories about businesses and more importantly about people who have set out to improve the unimproved and refine the unrefined. About people who have challenged themselves to find out the right questions to which to find the correct answers for which to find the right information.
When we talk about the aforementioned technologies, we are ultimately talking about the means to acquire and store data, refine that data into information and to turn this information into actions. However, all this is meaningless if you have not asked the right questions in the very beginning.
“Data isn’t the new oil, it’s the new water – there’s plenty of it and most of it is undrinkable.” – Alf Rehn
Big Data is not only for big companies
Let’s take just one example from the keynote speech by Mr. Bernard Marr. A small New York Deli was suffering from low sales volumes. They decided to try and understand why things were as they were and how they could change this.
Through increasingly precise questions, they understood what they needed to know and consequently what kind of data they needed to gather and process. The questions were surprisingly simple: what their potential customers were looking for and when.
Answers to these questions turned into actions, sales volumes multiplied in weeks. Sure, there was some technology involved but – to simplify things a bit – this could have been achieved with some pen, paper, and time.
Data is not the new oil
Technology is and continues to be an enabler, not a mean to an end. You can’t get the right answers before you’re asking the right questions so get your marching order straight.
Have you heard the phrase “data is the new oil” more than enough times now? During the closing remarks of the event, Professor Alf Rehn proposed an improved version of this saying; “Data isn’t the new oil, it’s the new water – there’s plenty of it and most of it is undrinkable.” I have to say I prefer this version. Start with the right questions and you will most probably be the one with something to drink.
Is there life after SAP Business Warehouse?I don’t know. I have no visibility that far in the future. Is there life after Microsoft Office? What about Photoshop? These questions are not valid, as all of these products have a long evolution behind them and certainly a solid future ahead of them. Are there foreseeable changes that you should prepare for? Sure. Do you need to budget carefully for these changes? Yes. Should you rush forward? Depends.
When you consider SAP Business Warehouse, there have been numerous changes to the product so far. One could argue that two of these changes really stand out:
1) Upgrading from 3.x version numbers to the more recent 7.x versions
2) SAP HANA
Luckily most customers are already past the first hurdle, though you might still stumble upon some age-old data flows that haven’t been brought to the new standard. Whatever, the old way works, right? Number two is a more divisive as it changes the playing field, by bringing a serious element of platform cost to Business Warehouse -solutions. Up until the latest evolution, BW4/HANA, there was always the option to use your favourite database product as the backbone of your Business Warehouse. However, most of the innovations for Business Warehouse have for years now been only available to those fortunate enough to enjoy an SAP HANA platform in the backend. Despite the looming database lock, you still have time to consider what is right for you. Depending on your current version, SAP will continue to support SAP Business Warehouse on non-HANA databases until 2025.
Phew, now you can rest easy and surf the status quo to the next decade, right? Well you could, but do you want to? Chances are that your Business Warehouse is still reaching the end of its life span.
Some common symptoms of BW rigor mortis include performance problems, slow development pipeline for change requests, ever growing disk space needs, need for more detail in analytics, no trust in the numbers, long lasting data loads, ABAP-code of varying quality everywhere, redundant aggregates, very complex dependencies in the data models among other things.
Your reports might be not up-to-par with today’s consumer grade user experience expectations or might have just too damn many of them. Your corporate structure and system landscape might be more diverse now due to mergers and acquisitions. Perhaps some more independent functions in your business have stepped to the dark side, and embraced a shadow BI -approach. Perhaps you are considering taking the plunge with S4/HANA and wondering what is the correct direction for your analytics in the future. Do any of these ring a bell?
I hear so much ringing right now, that I have tinnitus.
So what could you do? And what should you do? At the very least check out our whitepaper on the subject here.
Data warehouse such as SAP Business Warehouse – the chances are that either you love it or you love to hate it. Regardless of your stance, SAP Business Warehouse has surely been a solid servant in the SAP environment crunching out the numbers for the management for the past two decades. However, in the era of digital transformation, the BW’s running on traditional databases are facing constantly rising pressure to keep up with the pace, as do all the other traditional data warehousing solutions.
There is intense pressure caused by two separate forces:
Rapidly increasing performance requirements due to processing large amounts of data
Growing complexity to handle more granular and diverse data from any source and combined to answer more complex business scenarios
In addition, you have to keep it simple. It is the key to control cost of operations and to keep up with fast pace of changing business requirements.
The uncertainty of the future
I have been discussing the future of analytics with several companies lately and one question I have been often asked: “What next after BW?” I understand the question, as the pressure on data warehouses affect strongly also the companies running traditional BW’s. There is also the sales push, when technologies like Hadoop and HANA provide new ways of storing and handling data, causing confusion what it will mean to the current data warehouses.
I also came across companies that have taken steps to transform their data warehousing platforms, but are uncertain whether their steps were the right ones, as substantial investments in new solutions have not solved all issues as expected.
The fact is that there is uncertainty in decision-making over the future direction of analytics.
Transformation to analytic platform
Let me assure you, you don’t have to bury your BW! However, you have to start planning how your ‘traditional’ BW is transformed from a data warehouse to an analytic platform that can respond to the new requirements of digital era. It is a transformation process including changes in both technology and the concept for storing, governing, modeling and providing data for analytic use. You have to adopt the new way of data warehousing.
If you skip steps and limit the change to the machine room (regardless of the database supplier), you are still running a conventional data warehouse. (This is an example of the pitfalls addressed in our earlier blog SAP BW users WATCH OUT!)
11 things to consider
There is not a single answer on how the transformation is done, as every company is having its unique circumstances. However, several common aspects strongly effect your decision-making on how to proceed your life after ‘traditional’ BW. Thus, we compiled a white paper 11 things to consider when moving on from SAP BW.
The idea is not to point you to a particular direction, solution or vendor. There are plenty of good choices out there. Instead, we would like to shed some light on the topic by trying to help you assess the current situation and the things you need to weigh-in in order to make the right choices in longer perspective. Keeping the eye on the long-term vision and considering the relevant requirements for your analytic platform, is the best way to avoid the mistakes that short-sighted decisions have caused some of your peers.
Future of BW – a modern analytic platform
Then, coming back to the original topic, if you still wonder what is the future of BW.
Here is my opinion: the future of BW is looking bright! Our old friend, ‘the classic BW’ that has been serving us since the turn of the millennium, has certainly run out of miles. However, it doesn’t mean it needs to be discarded. Instead of HANA’s and all the other in-memory platforms replacing it, all the good stuff of BW has been completely rebuilt on the HANA platform.
The change is so drastic, that it is hardly the same well-known BW anymore. It could have even been renamed, but it wasn’t. SAP has decided that the brand of BW is worthy of living long in the future.
BW surely is answering to the challenge of transformation from traditional data warehouse to analytic platform. Yes – when implemented correctly.
“Silicon is the eighth most common element in the universe by mass, but very rarely occurs as the pure element in the Earth’s crust.” (Wikipedia). There is something rare about Silicon Valley as well, but what exactly? That is precisely is what I sought to find out. Read about why I decided to go.
What makes The Valley what it is?
Springboard of leadership & talent
There is a huge source of thought leadership and talent in The Bay Area. Leading schools like Stanford University, Berkeley University, Singularity University and UCSF attract an immense amount of potential and provide a spring-board for talent to find their ways to the most promising giants like Google, Facebook, Apple, HP not to mention the bustling start-up scene.
Ecosystem and density
The Valley, measuring from San Jose in the south to San Mateo in the north is no more than 50-60 kms in distance, give or take. In addition to thousands of start-ups (combined with San Francisco), the valley is home for 40 headquarters in the Fortune 1000. There are hundreds of thousands of qualified talents squeezed into an area the size of Uusimaa.
“Capital isn’t scarce, vision is.”
Money. Money. Money.
50$+ billion of venture funding money in the entire US, about 80% was invested in The Valley. Another 5% in the rest of California and the remaining 5% in the rest to the country.
From an investor’s standpoint, the opportunities are almost limitless. The efficiency in investing is mind-boggling. All you need to do is walk around and almost everyone you meet is either and investor (many of them) or an investee (most of them), pitching their stories and their asks. It is a non-stop Slush event…
You need to be there to be able to play the game. Competition in the Valley is a paradox. On one hand, to be able to tap into the massive funds and to get the best talent, you need to be on the top. Someone said that a fair analogy is that of the Olympics – you need to be a gold medallist of your discipline to succeed in The Valley. Nobody will remember silver medallists. On the other hand, there is very strong culture of collaboration, cooperation and paying forward.
Pay forward and give back
In spite of the competitive environment, everyone bow to openness and helping each other out. You hear pay forward here and again. It is a mantra that is understood by everyone. Help others because there will come a day that you will need help. You also hear about giving back. If you succeed, help others to succeed and don’t forget who helped you succeed. Don’t forget your scholars, those who helped you along the way anyone without whose help you wouldn’t have made it yourself.
Thinking big is no longer good enough, you need to think HUGE. Nothing is impossible. Magic is normal. You need to wow everywhere. When you think about doing something – anything – you should always think about what impact this will have. You need to thimpact. If there is no foreseeable impact, just don’t do it.
Clock-speed & culture
What is so different in The Valley? I just tried to explain the more visible reasons why The Valley is what it is. Perhaps more important is what is not so visible to the naked eye.
This is something a little hard to explain also, you need to witness it yourself. There is a built-in ‘sense-of-urgency’ attitude. If you see there is space ahead to move, you need to advance. Impatience is a virtue. Standing still will kill you. Mario Andretti once said it well: “If everything seems under control, you are not going fast enough”. Facebook’s motto coins this as: “Move fast and break things”, which is synonymic to learning fast.
For me, it was a cocktail of can-do attitude, entrepreneurial spirit, “clock-speed” and networking. This was probably the biggest eye-opener and the hardest attribute of The Valley to really internalize without seeing it personally.
It is about working from a garage and rejecting neckties. It is about not complaining of the workload. It is about failing well.
“Never confuse motion with movement”
So was my finding that The Valley is truly unique? Well, yes but…the start-up of the start-up scene in post-Nokia Finland has some similarities. It is still in its infancy, but e.g. the annual Slush megafest gathers about 17.000 attendees including 2.300 start-ups, 1.100 investors and 600 journalists. Interestingly, Finland also has a “Bay Area” – Slush was born in in a former cable factory in Ruoholahti (Grass Bay), Angry Birds’ nest is in Keilalahti. The new start-up community house Maria 01 is located in a former hospital campus on the brink of Ruoholahti and has a vision to expand 10X to have over 100.000 square meters of space.
The investors represent at total of 60 billion euros of capital. The momentum has been building and gaining weight. The event has now spawned to Shanghai, Tokyo and Singapore. Finland has pegged itself on the map of potential hot start-up environment especially in the tech-space. In Helsinki alone, there are an estimated 740 start-ups with the total collected funding (last 12 months) of a fairly modest US$185 million.
Finland’s unique start-up movement
There is a good article in Forbes, which identifies Finland’s start-up movement and its originality. The article raises some interesting points about the attitude attributes with which I have no problem concurring with: simplicity, resilience and confidence.
Most of the visible success and evidence of making-it still come from the gaming industry. The mind-set and guiding principles of how this industry has developed is being shared to other industries, to companies small and (especially) large and in any given business extravaganza, you will have the now iconic gaming CEO’s telling about their rebellious leadership mantras and what they have done or left un-done to accelerate to hyper-growth.
At the helm of a successful IT company, I am exposed to a lot of technological breakthroughs and a large number of successful companies who we are helping navigate their way towards a more digitally enabled business.
By We, I mean the all the talented professionals who Stand For More at the customer – frankly it is humbling. Business is running smoothly and the outlook is promising so more than ever, it is important to have some sort of peripheral vision and try to see beyond the horizon, have your ear on the ground to predict possible stampedes.
“Talk about a dream, try to make it real” – Bruce Springsteen
Internalization & Immersion
Whether it is war, famine, floods or economic growth in China, to fully appreciate and internalize certain phenomena, you need to me immersed in it – see and feel it first-hand. The pace of change is accelerating and it is amazing how this change is impacting business and technology. The internet is almost in every pocket. And the absence of the internet is a roadblock for running a business. It is also the precondition of hyper-scalable business. The dotcom is has been a new normal now for almost two decades. How has this changed things? Some staggering facts:
In 1960, the average age of a fortune 500 company was 60 years, by 2020 it will be 12.
Since 2000, 52% of the names on the fortune 500 list have disappeared, by 2027 it will be 75%
Three months after Kodak filed for bankruptcy, Instagram and its thirteen employees were bought by Facebook for $1 billion
90% of data has been created in the past 2 years
1,7 megabytes of new information is created, every second, by every human
For a tech company like us, a relevant context is the innovation space in the Silicon Valley. It is central to technology development and what is still hype here in the marketplace, in the Bay Area, it is very much reality.
An opportunity to visit Silicon Valley presented itself and so I hopped on the bandwagon and spent a week in The Valley to make observations, seek inspiration and immerse myself in the wonderland of start-ups, technology, R&D, innovation, entrepreneurship. And venture capitalist (VC) money.
“It’s tough trying to keep your feet on the ground, your head above the clouds, your nose to the grindstone, your shoulder to the wheel, your finger on the pulse, your eye on the ball and your ear to the ground” – proverb
Finnish Cuckoo in Palo Alto
The backdrop for this excursion is our local business environment. Finland has been frantically struggling to keep pace in the competitive business environment. Meanwhile, the seemingly suicidal and protectionist labor unions have done their utmost to build barricades and roadblocks to curb growth. The government (in this context the opposition) has been pursuing a visible increase in the nation’s cost competitiveness and launched what we call KiKy (collective cost competitiveness agreement) entailing a daily 6 minute increase in working time with no extra pay. This adds up to 24 hours more work per capita per year. Awesome.
By the way, in English this hack agreement is pronounced Cuckoo. In theory, this productivity placebo might have a microscopic impact on those few who still work alongside conveyor belts. In practice, it is largely patching the Titanic with toothpicks and bubble-gum. Many insightful businesses have realized the irony and have admirably adhered to the CuckooTM agreement by spending the new six minutes on champagne and yoga.
When I told people in Palo Alto about the CuckooTM agreement, they thought I was kidding. So we should expect that the six minutes will make a difference? And that we seriously think we have a cost competitiveness problem? Is it the midnight sun or the long dark winter that triggers these delusions?
Can the buzz that is associated heavily with the start-up scene and hyperscalable businesses somehow be injected into the broader business environment? Could there be other ways to synthesize entrepreneurism? Are there learning points we could translate to our environment?
Tietoisuus: Ensin täytyy arvioida S/4HANAn vaikutus yrityksen toimintaan ja tietojärjestelmiin.
Tiekartta: Alkuarvion jälkeen tarvitaan päätöksiä ja tarkentava suunnitelma muutoksen laajuudesta. S/4HANA pitää sovittaa muihin kehitysprojekteihin ja järjestelmäkokonaisuuteen.
Siirtymä: Vasta kolmantena tulee varsinainen toteutus, johon voi ohjelmapäivityksen lisäksi kuulua järjestelmien yhdistelyä, tietojen siivousta, yhdistelyjä ja migraatioita sekä uusien toimintojen käyttöönottoja.
Käytännössä vaiheet limittyvät. Tyypillisesti alustava arvio ja suunnittelu yhdistyvät esiselvitykseksi, jonka pohjalta päätetään siirtymäprojektin aloittamisesta ja ryhdytään valitsemaan toteutuskumppania. Olipa tekemisen tapaa määrittävä sana Agile tai Lean, on määrittelyä ja suunnitelmia syytä tarkentaa jatkuvasti. Kuulostaako työläältä? Helpompi kuitenkin muunnella suunniteltua kuin valmista järjestelmää. Projektin edetessä kertyy lisää tietoa, ja liiketoiminnan tarpeet voivat muuttua, joten tiekarttaa pitää voida korjata.
Kiire käy kalliiksi
S/4HANA-projektin aloittaminen ajoissa sekä alentaa kustannuksia että lisää hyötyjä. On hyvä varautua siihen, että projekti kaikkine riippuvuuksineen voi viedä vuosia.
Jos toteutus tehdään kiireisenä, toiminnot ja tiedot joudutaan siirtämään lähes sellaisenaan, ja järjestelmän ylläpito maksaa monin verroin siivottuun versioon nähden. Lisäksi toteutushinnat ovat viime hetkillä korkeimmillaan. IT-alan konkarit muistavat varmaan kahdenkymmenen vuoden takaisen Y2K-buumin.
Hiljaa hyvä tulee
Kun taas toteutus tehdään harkiten, S/4HANAsta saadaan merkittävästi enemmän hyötyjä. Käyttöönottoa ei pidä typistää tekniseksi päivitykseksi, vaan sen yhteydessä voi oikeasti parantaa prosesseja ja käytettävyyttä. Esimerkiksi hankalia ja hitaita räätälöityjä raportteja voi korvata tehokkaammilla standardinäkymillä, ja joitakin toimintoja voi ehkä siirtää erillisestä suunnittelujärjestelmästä uuteen ytimeen – S/4HANAan. Uudet toiminnot, parempi data, yksinkertaisempi kokonaisuus – tällaiset hyödyt nostavat projektin kannattavaksi, mutta niiden lunastaminen vaatii valmistelua.
Kannattaako yrityksesi siirtyä S/4HANAan? Koska? Miten? Jos nämä kysymykset ovat vielä vastaamatta, kannattaa ainakin tehdä esiselvitys, jotta toteutukseen jäisi riittävästi aikaa.