The bots we saw in 2016 were tantalizing, but they'll need another few years to begin to live up to expectations.
Last year was big for bots, as the popular definition of the software application shifted in the public's understanding.
Previously, many of us had heard the term "bot" only in the context of the search engine. Search bots like the Googlebot crawl the web, methodically cataloging its content. This year a whole new class of bots showed up—social bots that can converse with human beings and carry out tasks like taking pizza orders, booking travel, or just chatting.
In April Facebook announced that developers could create bots on its Messenger platform. Many of us rushed to try out the bots that had already been developed for the platform with Facebook's help. But it turned out the bots were limited, and one often ran into roadblocks when it couldn't answer a question and carry on a conversation. Facebook admits this now.
"The first websites were really bad, the first apps were terrible; and the first bots weren't great either," Facebook's David Marcus told the Telegraph in November. Marcus was CEO of PayPal before he moved to Facebook in 2014 to manage the Messenger platform.
Google trotted out its new chat bot, Allo, last spring, and while it does offer some nifty messaging features (like multimedia and response suggestions), when it comes to conversing with the user and fetching appropriate information, Allo is rudimentary. How many people do you know who use it?
@juberti Allo is terrible. Please make it not terrible.— ⭐James Welbes⭐ (@JamesWelbes) September 22, 2016
The biggest news about bots this year was the story last March about Microsoft's Tay social bot, which, when turned loose on Twitter, soon started to spit out vulgarities and racial epithets it heard in some of its human interactions. Tay was quickly taken offline.
Ironically this happened just before Microsoft's Build conference, when CEO Satya Nadella made official the company's view that the future is about bots, and that the app era is starting to fade. Microsoft people have told me since then that Nadella's pronouncements, along with all the bot-making tools Microsoft announced there, solidified, amplified, and accelerated the company's bot-building work.
The big platform companies like Google, Facebook, Apple, and Microsoft have lots of people working on artificial intelligence, and many of them are applying AI in a bot setting. It's pretty likely that we'll see Act 2 of the bot story in 2017, and the user experience will improve somewhat.
For every bit of information bots can deliver to a user, a human being had to have spoon-fed that data to the bot at some time in the past. Bots' capacity for open-ended learning is very limited. Somewhere in the background, a team of writers and other creators have to write the things a bot says, based on the desired personality of the bot and the target audience.
Lily Cheng, who leads social bot creation at Microsoft, told me that one of the reasons Tay started spouting hateful comments is because it was put into a public forum—Twitter—where it was exposed to the wrong people. Tay, she said, was meant for use by smaller groups of people, not for a wide public audience.
Today's bots are horizontal or they're vertical, but not both. That is, they know a little bit about a broad set of topics, or a lot about a very specific topic, but they know a lot about a large set of topics. The more specialized they are, the less conversational they are.
Microsoft's Cheng told me that the people doing the core research and development are letting bots learn in limited and structured ways. For instance a travel bot might be given a finite number of places to look for data that could somehow influence the logistics of an upcoming trip. It might search the calendar for the best times to fly. It could look for clues in email about the event to which the person is traveling to. It might look at travel records to look for go-to hotels for the trip.
But bot makers are also learning to manage users' expectations. When the bot suggests a given hotel, it also tells the user what data was used to arrive at that determination.
Cheng also says the main reason people bail out on conversations with bots is because the user doesn't fully understand the set of tasks the bot can handle, or which topics the bot can talk about and make sense of.
Bot developers are also starting to think about "emotional intelligence." The bot needs to understand the difference between the user saying "that hotel was great" and "OMG that hotel rocked." Bots need to show empathy when the user says something like "it's 3AM, I can't sleep, and all my friends are asleep."
If companies like Facebook and Microsoft and others make big leaps forward on these problems, the bots we see in 2017 will be one of the year's big tech stories. And this year's bots might even make us forget about last year's disappointments.
I think the more likely scenario is that we will begin to appreciate how difficult it is to make a piece of software (a bot) talk and act and emote like a human being. We'll moderate our expectations, and appreciate that the technology has a long way to go to become something like the AI we saw in the movie "Her."
At the same time this year's bots will evolve into incrementally better experiences next year. They'll be somewhat better at achieving specific tasks. They'll be somewhat more agile in the way they gather the data they need to make intelligent choices. They'll be a little more conversational, so that conversations with them can last longer.
And finally, bots will be more aware of their limitations, and will know when and how to excuse themselves and turn the controls over to a real human being.
Athletes know a thing or two about how to achieve goals as a team.
As the typical job interviewevolves, job seekers may have more opportunities—and more reasons—to rethink the ways they talk about their experience. In some cases, that includes what counts as experience.
This is especially true for recent graduates, people switching careers, or anyone who may not have much relevant experience in a certain role or industry. In these cases it can be useful to look further afield. One great place to start is athletics.
While sports may not be traditionally considered a realm hiring managers want to hear about, there are several key skills athletes have honed over their playing career that can serve them well in the workplace. In fact, athletes tend to have characteristics that many, if not all, employers look for in a new hire. The challenge is simply convincing an interviewer that that's the case. Here are a few ways to do it.
Athletes have to manage their time effectively. From their school days onward, they have to balance academic work and athletic commitments, along with spending time with family and friends. And this often leads to athletes developing time-management strategies and techniques that translate well into the working world.
As an athlete you quickly learn how to prioritize your tasks and be efficient with your time to get everything done, then build that efficiency into your regular routine. In the workplace, former athletes will understand how to prioritize their to-do lists and allocate the right amount of time to each item, regardless of how many new meetings or projects come up.
Athletes are always on the road, so they have to be resourceful about when and where they get things done. For student athletes, if that means studying on the bus or late night in the hotel room, then they do it in order to stay ahead—no excuses.
Some employees are quick to find a reason why something didn't get done. The printer didn't work, there was a last-minute meeting, or they had another urgent project assigned to them. Athletes don't make excuses, which lets down not just themselves but their teams. They figure out a way to get things done, for the good of the group.
Athletes are willing to make sacrifices to achieve a goal. They'll give up time they'd rather spend relaxing in order to practice at off hours, pushing themselves to get better and to help their teammates get better as a whole.
That takes discipline and a commitment to improving performance—even when it hurts. An athlete knows they may need to miss a dinner with friends to work late on an important assignment. They keep their eye on the end goal because they know it matters to more people than just them.
In athletics, you learn really early to not take things personally. Athletes know that coaches are trying to make them better to help the team win. So while they're used to praise, on the flip side, they're also used to receiving constructive feedback from a range of personalities. Every committed athlete has had to take instruction and criticism from a variety of different coaches, including those they may have found difficult to work with.
Whether it's the shouting type or more of a mentoring coach, there are managers in the workplace who also have different approaches and personalities. Athletes have a depth of experience working under many of these types that others may not. For some professionals, receiving feedback from a boss is grating, and it can come as a culture shock for new grads just entering the workforce.
But athletes have developed the mental toughness to not take things personally and understand that it's meant to help them improve.
Athletes know what's expected of them. Chances are they grew up in an environment where you either worked hard to keep your spot, or you worked harder to take someone's. That's just the nature of competitive sports. But they're also relentless when it comes to not letting their teams down. If they make the commitment, they'll see it through.
Athletes unite around the concept of achieving a goal; it's in their DNA. In the workplace this couldn't be more imperative. They won't give up when things get tough or a goal seems out of reach. They'll find a way to rally around it and motivate the team to achieve it.
Athletes understand the importance of team goals, too. They understand that if another player is struggling, the team will struggle, regardless of how great they do on their own. In sports, if one person didn't do what the coach wanted, the entire team had to do the drill all over again. Accountability is drilled into them.
This is critical in the workplace. If the company has a revenue number to hit, they know that they need to jump in and help however they can—particularly when a colleague or teammate is struggling.
Nobody who's played sports has won 100% of the time. All athletes know how to learn from failure. They have the perseverance to continue pushing toward a goal regardless of how hard they may fall. Athletes just don't give up, and just can't mail it in. They aren't easily deterred, and hiring managers know that employees who can learn from setbacks and keep moving forward are invaluable.
That applies to their own development, too. Athletes are always trying to beat their personal record. They constantly want to do better and improve. They don't settle. Every manager wants this type of employee on their team. It not only impacts the individual, but it's contagious in the workplace.
Hiring managers may not be used to discussing sports in job interviews, but savvy job seekers may have a chance to change that. The truth is that many of the skills and personality traits that make employees successful are things that athletes have worked many hard hours to hone.
Lisa Strasman is president of Next College Student Athlete (NCSA), an athletic recruiting firm that matches student athletes with coaches across the country.
Earning a passive income takes some upfront effort but not much energy to maintain. Here are a few options.
Imagine lying on a beach, sunlight hitting your face and sand between your toes. You grab your phone and check your bank balance to find that it's increased $500 since sunrise. This may seem like a fantasy, but for some savvy entrepreneurs, it's the reality of their passive income streams.
To be sure, it's not all sunbathing and dollar signs. "Passive income" simply refers to money that you earn on a regular basis with minimum effort to keep it trickling in, a state of affairs that isn't always easy to bring about. Plus, the extra money you earn passively is usually supplemental—it's rarely enough to live on full-time. But it can still prove a crucial tipping point. For hobbyists looking to take their passions to the next level, it can generate enough capital to launch a new business, laying the foundation for eventually ditching a day job.
No matter your end-goal for a passive income stream, you'll need to put in some upfront work before you can reap a return on your investment. That might seem risky, but many—myself included—find that investing in some of those setup efforts now can prove lucrative later. Here are a few ways to start.
There are a number of third-party services to help entrepreneurs and hobbyists alike sell physical products, while outsourcing the logistics of fulfillment and shipping to a platform, which then takes a cut.
Daniel Caudill, founder of Merch Strategies, jumped head-first into the world of merchandising after taking a health-related leave of absence from his job. He says he now generates around $14,000 in passive income per month.
"How I've been able to do this is through e-commerce sales with Merch by Amazon and RedBubble, which are third-party suppliers that handle fulfillment," says Caudill. "One fantastic thing about building passive income is that every action you take in the process can result in massively inflated returns over an extended period of time."
You just need some patience, he suggests, but you don't need to reinvent the wheel. The fulfillment sites Caudill has relied on make it easy to get started. You just set up an account, upload your designs, and can create your own digital storefront in less than a few hours.
Over the years, I'd toyed with this idea but couldn't justify buying large batches of products, storing them, and then shipping them. After weeks of research, I came across a site called Printful that not only prints high-quality designs but also automates the fulfillment process through an API integration. By using an automated distributor, I can sit back, relax, and let them handle the fulfillment logistics.
You don't need to make physical goods, though. Sharon Tseung, founder of Digital Nomad Quest, started built a passive income stream to support her travels. "I love doing graphic design work on the side. After discovering that Etsy allows you to list digital products, I created editable Photoshop templates, such as media kits, greeting cards, and resumes, and published them on the platform."
The design work took some time at the beginning, but now Tseung can more or less sit back. "Other than some maintenance and customer support, this income stream has been quite passive and can be managed anywhere with Wi-Fi," she says. That means she can maintain her digital Etsy shop while she's on the road.
"When it comes to passive income," Tseung adds, "my advice is to always remind yourself of the long-term benefits. There may be substantial upfront work, but the time and freedom you can obtain makes it all worth it."
If web development is your forte (as it is for many digital nomads like Tseung), you can consider building a software product that brings you a recurring monthly revenue. Dustin Nay, a website consultant, did just that and now generates thousands each month wit his automated web management and support tools.
Building a software product may sound like a daunting feat that only full-time startup founders would want to tackle. But Nay points out that those with day jobs can chip away at even the biggest projects incrementally—the key is just to keep the momentum going. "Start taking action right now, and don't stop. You'd be surprised how much money you can earn without having all of your proverbial ducks in a row."
If you're willing to dedicate time to daily writing, setting up a niche blog or website can be a great place to start earning passive funds with minimal overhead costs. If you can establish an audience for your content, you can begin selling products, finding affiliates, and hosting ads on your site, all of which can bring in some steady passive revenue.
Monetizing a content site isn't easy even if you have a sizable reader base, but Travis Ketchum, founder of Contest Domination, recommends starting an email list so you can provide value and build relationships with cold prospects automatically. He suggests linking to helpful tools and services that pay a commission related to your niche.
Jared Romey, writer and founder of Speaking Latino, estimates that he now pulls in around $3,000 to $5,000 monthly through his series of ebooks. "I've been selling 12 books that I've written and published, as well as a website selling materials and resources to Spanish teachers," says Romey. "The royalties were great, and eventually the books became my start to blogging online, which helped expand my online revenue stream even more."
There are a number of platforms for self-publishing ebooks, from Amazon's Kindle Direct Publishing and CreateSpace to independent options like Lulu and Smashwords. As Romey puts it, "Just get started, make mistakes, adjust, make more mistakes and keep moving forward."
Some entrepreneurs are finding success producing podcasts and leveraging advertisements from sponsors. Bilal Zaidi, founder and host of Creator Lab, produces weekly podcasts where he interviews entrepreneurs, designers, educators, and artists.
Like Romey and Nay, he also emphasizes the importance of just diving in and learning to swim once you're already in the water. "Get your idea out of your head, and start to commit to your revenue stream by forcing yourself to tell others about what you're doing," Zaidi says. "You don't have to know every detail before starting." Podcasting is about conversations, and conversations evolve as they unfold—you'll get the hang of it once you get started, he suggests.
Whether you're looking for a way to monetize a side project or create an additional revenue stream in order to fund a business, setting aside time now to create passive income can help you rest easier in the future. You may even be surprised how even a few extra dollars a month here and there can start adding up.
Not all routines have to be structured to be useful. Sometimes it's better if they aren't.
Scientific research has already uncovered some surprising facts about how creativity works. And this time of year especially, there's ample advice out there for those looking to adopt new and better habits and keep their New Year's resolutions going strong. The trouble is that much of that advice rests on carefully established routines—daily practices that some people just aren't wired (or simply aren't inclined) to stick with.
When it comes to creativity, though, a little less structure and predictability may actually work in your favor. Here's a look at five habits to improve your creative chops, backed by scientific research, that don't require committing to a specific daily practice.
Neuroscientist David Strayer loves to hike. Not only is it a good workout, but he also claims it restores his attention, invigorating high-level thinking. By allowing the brain to quiet down, "you let the prefrontal cortex rest, and all of a sudden these flashes of insight come to you," Strayer tells Outside. "It supports creativity, positive well-being, [and] reductions in stress. There are all kinds of reasons why it's helpful."
Strayer's clinical research supports these claims. A University of Kansas study he coauthored in 2012 found that people performed 50% better on creative and cognitive tasks after backpacking in nature (and disconnecting from technology) for four days.
And the great thing about experiencing nature—at least for those who resist daily routines—is that there are limitless ways to do it. You can pick a new outdoor activity each season or go down a different trailhead with every new excursion.
After a long day of writer's block or poor creative teamwork, the cure may be decompressing with a drink at your local bar. According to a study published in Consciousness and Cognition, moderate intoxication (a blood alcohol level of 0.075—meaning just tipsy, not drunk) may improve problem-solving by leading to "sudden insights," which the sober participants in the same study reported significantly less often.
So while these results haven't been widely replicated, it can't hurt to have a glass of wine after an unproductive workday; it just may get those creative juices flowing.
To be sure, the most creative people only procrastinate up to a point. If you do it too long, you'll never get anything done. But there's research to suggest that procrastinating just a little bit can actually improve your creative output.
In a well-known TED Talk, writer and researcher Adam Grant discusses procrastination in depth. He's found that neither people who wait until the last minute nor those who finish projects early tend to perform at their creative bests. Instead, it's those who moderately procrastinate that tend to outpace their peers on either extreme.
What's that sweet spot, exactly? Unfortunately, it varies from one person to the next. But if you aren't so keen on sticking to a rigid schedule, you may already have a leg up. Delaying action until sometime within the broad span between "right away" and "eleventh hour" may give you time to incubate, consider nonlinear ideas, and make unexpected connections.
Studies have shown a wide array of positive effects associated with journaling. It can improve mood disorders, reduce doctor's visits, and even boost memory.
Julia Cameron, the poet, screenwriter, creativity coach, and well-known author of the classic The Artist's Way, has spent many years proselytizing the virtues of unstructured writing. She recommends writing as soon as you wake up in the morning, for at least three pages, and always by hand. She's said it helps "clear the psychic debris standing between us and the day ahead," giving you space to be creative and use your imagination.
But for those who'd rather not embrace such a specific morning routine, the general approach can still be fruitful. As long as you write about whatever comes to mind, with no intention of ever publishing your words, you're still likely to experience a creativity boost. And you can do it anywhere, anytime just by stashing a notebook and pen in your bag.
Some of the most productive people tend to keep uncluttered, orderly desks—but what about the most creative people? In a study at the University of Minnesota, researcher Kathleen Vohs found that "you can get really valuable outcomes from being in a messy setting."
When she and fellow researchers placed participants in a messy room and asked them to come up with new uses for ping pong balls, their ideas were rated as more interesting and creative than their counterparts stationed in a tidy control room. "Disorderly environments seem to inspire breaking free of tradition," Vohs concluded, "which can produce fresh insights. Orderly environments, in contrast, encourage convention and playing it safe."
Everyone's ideal work environment is a bit different, of course, but Vohs's research may vindicate those who succeed amid messiness. So if you're the kind of person who needs a little disorder, don't declutter. You may find an innovative thought or two buried in your untidy workspace.
Justin Kerby is the founder of Cave Social, a digital marketing agency based in South Florida. He is passionate about marketing and hosts the weekly YouTube series, "In the Cave."
Turn your resume into a sleek, interactive, and thoroughly digital resource.
We all want a resume that will jump out of the pile into the hands of HR managers. But how do you craft a resume that is tasteful yet aesthetic, impressive, yet not braggy? First and foremost, you need to ditch the conventions of the paper-based version. And that doesn't just mean loading up on keywords that a company's screening software will latch onto, either. It's about turning your resume into a sleek, interactive, and thoroughly digital resource.
Best of all, you don't need to be a web developer to do that. More and more websites are rolling out online tools for resume creation and formatting, from Google Docs to Etsy. Check out Glassdoor's list of five of the best online resume tools available right now. Then use this checklist to make sure you're including the features (some familiar, others not) that will take your upgraded resume to the next level.
Don't confuse your reader with excessive design details, complicated jargon, or a muddled structure. Focus on the significant and relevant information instead. "Accomplishments are important, but list no more than five under each position," suggestsNicole Cox, a chief recruitment officer at recruiting firm Decision Toolbox. "In general, you'll want to choose the most significant accomplishments, but also ensure they are relevant to the opening."
Let your future employer visualize your place in the office by including a robust description of your soft skills. Include traits like leadership, teamwork, communication, and creativity to emphasize your well-roundedness.
Surprisingly, a longer resume may work to your advantage by giving your accomplishments context, showing a glimpse of your personality, and making your stories more robust. Building in relevant anecdotes gives your resume a more personal flavor than just the facts. You're more likely to grab a hiring manager's attention through stories crafted to resonate with their needs, even if that means going over the one-page "limit."
Whether it's an HR recruiter scanning your resume, or an applicant tracking system automatically passing through, you want to put relevant keywords on the page that signal your industry expertise. Anish Majumdar, CEO of ResumeOrbit.com and regular Glassdoor contributor, suggests to "take a close look at the 'Skills and Endorsements' section of the most visible people in your niche—this is the 'secret sauce' of great keywords. Jot down all of the ones you possess and include them within a 'Core Competencies' section of the resume."
Use snappy adjectives to create a sharp sentence that sums up your personal brand. For example, for a senior marketing executive role, Majumdar suggests writing something like, "Luxury Retail Marketing expert who can deploy cutting-edge strategies to generate awareness, double-digit profitability gains, and cross-channel cohesion."
Now that resumes are generally sent along electronically, focus on making yours interactive and easily clickable. Especially focus on including creative work, such as published articles or an online portfolio.
Identify the needs of the company you're applying to by researching the organization, its values, and its history beforehand. Then focus on the relevant details, and tailor your skill set to the specific job you're applying for.
Using a digital template makes customization easy. For example, if you know the company puts customer service as a core value, just edit your resume to emphasize your customer service experience and skills your resume (within reason, of course—don't stretch it too far).
Making your resume easier to read for the hiring manager will give you a boost in the application process, regardless of whether or not it's required. So when you're choosing a template, test your resume on multiple devices before finally sending it out. If it doesn't look great on mobile, don't hit "send."
The U.S. has a solid cohort of startup founders despite ranking 12th out of 130 countries for all its new-business hurdles.
Here's what we know: Starting a business requires as much resilience as it does resources.
The Small Business Administration's last tally revealed that only about half of all new businesses will survive for five years. In the U.S. in 2013 (the most recent year with reported data) 406,353 businesses opened and nearly that many (400,687) shuttered. For those still planning to tough it out, dreams of getting rich quickly are often supplanted by the reality that it takes a lot of sweat equity to surmount all the obstacles placed right in the first leg of the race.
Data from the World Bank on more than 130 countries shows which ones entrepreneurs across the globe typically find to be the most daunting. Their rankings are calculated across three factors:
the time it takes to register a new business
the amount of procedures one needs to go through
the costs involved
Austin, Texas–based B2B marketplace Expert Market recently analyzed these factors in greater detail by cross-referencing them with the number of new businesses started in each country. As Expert Market's lead researcher for this report, Bobbi Brant, points out, the number of new businesses started is worked out per 1,000 working-age (15–64) adults, so it's a fair representation across countries with different populations.
The resulting report not only shows how high some of these hurdles are in some countries, it also reveals the regions with the most tenacious entrepreneurs who've started their ventures in spite of those challenges.
The number-one place with the most determined entrepreneurs is Botswana. According to Brant's analysis, it takes 45 days, on average, to register a new business in the country, which is far higher than the global average of 8.3 days. "This may be due to the high number of procedures new business owners must complete," she explains. "Nine separate processes must be completed to register the new venture, compared with two in some of the places with high missed opportunities such as Azerbaijan and Canada."
The top 15 countries ranked among the most challenging places to start a business that still had a proportionately large number of startups also included:
Brant points out that in number-three–ranked Timor-Leste (located in Southeast Asia, for those who need to brush up on their geography) there are only four processes to complete and an average time to start a business is just nine days. However, says Brant, "entrepreneurs must deposit 260% of their average income in a bank or with a notary before registration can be completed." She observes that this is a "huge" amount of capital to raise up front. It's also considerably higher than the average amount required globally, which is just 9% of income.
Brant also notes that the U.S. was the only Western superpower to place among the top 15, with the second-highest number of new businesses launched in 2016. She says that American entrepreneurs were ranked as some of the most determined, for persevering through the length of time it takes to launch as well as the volume of red tape and associated costs.
"According to the World Bank, in the U.S. there are six official process to go through, which takes an average of four days and costs about 1.3% of the average salary," Brant explains. Though, as she also points out, "This is worked out as an average across major cities, so there may be some state differences."
As previously reported in Fast Company, one of the major challenges startup founders face is the lack of capital to get their businesses off the ground—a stumbling block that isn't evenly distributed; there are gross inequities among entrepreneurs of color, according to the Center for Global Policy Solutions (CGPS).
For example, African-American women in particular are more likely to step off a corporate career track and start their own businesses. But that doesn't mean they're flush with cash once they do. "At the median, Asian Americans have about 80% of the wealth that whites have," the CGPS's researchers say. "Hispanics and African Americans have less than 10%." This is due to being historically disadvantaged, analysts believe. Nevertheless, entrepreneurship among African-American women increased by 20.2% while their participation in the labor force only grew by 8.8% between 2007 and 2012.
Brant points out that Canadians are missing the startup boat, even though "there are only two processes to complete, which take around 1.5 days and cost just 0.4% of the average income."
But it's not always that straightforward. For example, Afghanistan ranked second among the countries with the most missed opportunities. A rising class of social entrepreneurs is creating jobs, while growth in the private sector is helping to stabilize the economy and break the dependency on foreign aid. However, Cayte Bosler recently wrote in Fast Company:
"They walk a fragile line. They must build networks with trusted government workers, the international business community, young students, and professionals. Many Afghan business leaders hope to attract investors who will bet on them to secure hard-won gains in human rights, especially for women."
So while the processes and procedures may be simpler here, doing business in a country ravaged by war changes the picture for startups quite a bit.
Says Brant: "I don't think there is one universal reason why it is more difficult to start businesses in these nations. However, it usually comes down to government requirements for new ventures being numerous, time consuming, costly, or a combination of all three."
That hasn't happened yet, but there are already signs of trouble. In the political realm, last year brought two epic polling misses in close succession, with even the most sophisticated data-driven models failing to forecast Brexit in the U.K. and Donald Trump's clinching the presidency in the U.S. Neither blunder seems likely to dampen demand for data professionals, whose career prospects in the business world show no signs of cooling down.
And why should it? Most data scientists, analysts, and tech workers in quantitative and statistical roles aren't pollsters or political wonks. Yet the very likelihood that private industry's data infatuation will only grow suggests that there's a bubble underway, even if it takes a while to burst. If data can fall dismally short in one arena, the same can happen in another, especially when it's being asked to do anything and everything.
The time for data professionals to do some soul-searching is right now, while they're punching above their weight. Here's why, and where they can start.
In June 2012, Northwestern University political scientist Jacqueline Stevens took to the New York Times to decry the many "lousy forecasters" in her profession.
Her targets were fellow researchers who leaned on "statistical analyses and models" to attract funding, "even though everyone knows the clean equations mask messy realities that contrived data sets and assumptions don't, and can't, capture." In the process, Stevens wrote, her "colleagues have failed spectacularly and wasted colossal amounts of time and money." Four and a half years later, her call to "stop mistaking probability studies and statistical significance for knowledge" rings just as true.
But while these diversity issues are rightly gaining attention, they might be a red herring for an even bigger problem. As the most vocal advocates for greater diversity within high-tech and STEM fields point out, there are deeper concerns about how data is being used in them. If data professionals are asked—enough times—to do things with data that they simply can't, their perceived value will decline. Reflecting recently on her Times op-ed in light of the past year's events, Stevens worries that "bringing in people from different backgrounds is just contributing to people being differently ignorant."
In fact, the very demographic shifts that are driving both a greater awareness of diversity issues and a political backlash against them may be partly to blame for forecasters' recent fumbles. Citing the philosopher Karl Popper, Stevens observes that when societies go through unprecedented changes, statistical models get worse at predicting their repercussions. "What big data is good for," explains Cathy O'Neil, author of last year's Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy, "is finding patterns of behavior in the past. It will never help us find something that's completely new."
So while the pollsters' technical solutions may have adjusted for knownsample selection bias, she says, they failed to anticipate and address a new kind of bias—"the one where Trump supporters don't trust pollsters." In retrospect, it seems obvious that when a candidate talks and tweets continuously about how rigged the polls are, many of his supporters would either refuse to talk to pollsters or outright lie about how they intend to vote.
Yet even the statistical models that tried to account for that fell short. Adds O'Neil, "We've been trained to think of these kinds of analytics as being extremely predictive of future events and to focus on the numbers as if they matter. Yet the interesting thing should be why people made a decision to vote one way or another, and what could change their minds."
"I really think big data is the future," she says, "but people are running fast and loose with what we might consider best practices and methods." Seely-Gant has set out through her own research to track some of the most prevalent and damaging ways that is currently taking place. "Without an underlying theory," she says, "you can go out and gather all this data, but you don't know what you're looking for." As a result, you wind up placing too much faith in numbers conjured up to match the conjurer's wishes.
That doesn't just contravene good science, as Stevens suggests, it's also undermining trust in a field on which more and more people, governments, and businesses are hinging their hopes—and placing their bets. So far, it's mainly insiders and practitioners who are voicing concerns. But someday, the bubble could pop.
O'Neil partly attributes 2016's political surprises to data professionals' rush to indulge public fascination with polling numbers, leaving no time or inclination for honesty. "What if all the pollsters in the entire country had suddenly said one day, 'You know what? We just realized that we have no idea what's going to happen?'" Answering her own question, she says, "It would have been a fucking disaster."
If there's one thing O'Neil, Stevens, and Seely-Gant all agree on, it's that data scientists need to be able to admit when their models don't say anything—a matter of simple transparency. No one is better qualified to explain the limits to their trade than data professionals themselves. And managing expectations can be a long-term strategy for defending their job security.
This isn't likely to happen, of course. Data science jobs have never seemed so secure(or highly paid). The preference for neat statistical "proofs" that Stevens took aim at in 2012, and the zeal for sound bites and headlines that Seely-Gant and O'Neil have spent the past few years shining light on, remain in full force. Yet in the near-term, organizations still seem hellbent on blindly pursuing more "data-driven" capabilities.
So no matter what epic failures those methods beget, Stevens wagers there'll be little motive for the business world to become "more self-reflective and open to radical changes in how we acquire and analyze knowledge." Until then, those with the most incentives to do so are the direct beneficiaries of the feeding frenzy: data professionals themselves.If their careers are taking off based partly on misplaced faith, they can be laid low by the same thing. After all, there's no one more capable of explaining what their expertise can get right, what it can't, and when it's impossible to know.
Some companies seem less gung-ho to ditch annual performance reviews than they were a year ago.
HR leaders are sizing up a handful of challenges that they weren't yet facing in the early days of 2016. Over the next 12 months the solutions to those obstacles will have to evolve and adapt as the overall business world does the same. Still, it's worth taking a look back at what's changed in the past year in order to see what's in store for human resources professionals in 2017. These are five of the biggest trends impacting the field right now.
All the fuss and bother over the past few years about integrating millennials into the workplace is officially outdated. It's now time to welcome in the next generation. In 2017, the oldest members of generation Z will be turning 21–23 (there's some debate as to whether the new generation begins in 1994 or 1996). In the meantime, those on the older end of the millennial spectrum are already in their mid-30s. Many have been in the workforce for over a decade, having served as managers, VPs, startup founders, and CEOs for quite some time.
Gen Zers, on the other hand, are now just starting to enter the workforce as interns and even entry-level employees. This will present new challenges for HR leaders looking to figure out how (and even whether) this new generation brings something fundamentally different to the workplace, and what it may take to prepare millennials to lead them.
A string of ugly scandals in recent years has hit companies like Zenefits, Wells Fargo, ANZ Bank, Mitsubishi, Volkswagen, Toshiba, and others. What they have in common is that all have been attributed, in one way or another, to a toxic work culture where unethical business practices were encouraged. In most cases, impossibly high standards set by executives and upper management led employees to cut corners (or worse) to reach them.
A combined Columbia and Duke University study found that an emphasis on figures over people can encourage unethical behavior—a finding that should surprise no one. As Shiva Rajgopal of Columbia University explained, "Our research provides systematic evidence—perhaps for the first time—that effective cultures are less likely to be associated with "short-termism," unethical behavior, or earnings management to pad quarterly earnings."
It may be discouraging that it takes a spate of scandals and scientific research to come to that conclusion, but it's probably a good lesson for companies to reckon with in 2017 all the same. HR leaders and executives have been talking more regularly about culture in recent years, so some shifts in the right direction may already be underway.
But what's also clear is that creating an ethical work culture requires companywide input—it can't just come from the top. This year, businesses that care about that may look to their HR teams to find ways to have those conversations with all of their employees more meaningfully and more often.
In 2015 and 2016, a number of big-name companies—including Deloitte, Adobe, Accenture, GE, and more recently SAP—announced plans to leave behind the annual performance review. This led many others to follow suit, making the last few years all about breaking with the old.
We're now roughly a year into that movement, and it seems to have slowed. Not every company that vowed to kill annual reviews has seen the results that switch was supposed to provide. In fact, some have actually found that employees' performance and engagement dropped as a result.
Getting rid of outdated systems isn't always enough, it turns out. Companies are also realizing they need to design a strong alternative in order to make the transition successful. This understanding means we'll likely be seeing HR leaders spend more time on data collection and change management in 2017. These days, performance management is an information game.
One knotty question these same companies have run into is what to do about pay. Should firms that swap a traditional annual review for continuous and/or peer-based performance evaluations keep making compensation decisions the way they used to? And for those that have reformed (or trashed) their employee ranking systems, how do you then calculate pay fairly and competitively?
As 2017 gets underway, some HR professionals are coming around to the idea that linking performance management to compensation can actually undermine the intended purpose of ditching the annual review—to create a more learning-based approach with increased feedback conversations. The solutions are still evolving, but there are already some ideas being tossed around about how to separate pay from performance and get the desired results.
A study by Fieldglass revealed that in 2015 the average company's workforce consisted of 54% traditional, full-time employees, 20% contingent workers (freelancers, interns, and contractors), and 26% that existed in a gray area somewhere between the two (including remote and part-time workers). The researchers predicted that by 2017, the share of "nontraditional" workers would grow to 25% contingent, 34% gray area, and 41% traditional workers.
The impact on job titles and responsibilities, how teams work together, and much more is already proving enormous. With over half of the workforce working in nontraditional positions, HR managers have their work cut out for them. They'll need to focus more on developing innovative ways to engage and integrate this new workforce into their organizations' cultures.
In a survey last year, businesses told Deloitte researchers that the top issue they faced was in redesigning their organizations to fit this new reality, with 80% saying they were currently restructuring or had recently completed the process. One trend we're already seeing, as a result, is the spread of cross-functional, ad hoc, and steering teams—which in many cases replace or supplement the work of a traditional, full-time team of people all working onsite together in the same department.
Similarly, traditional job descriptions are going out the window. These new types of teams are utilizing the full skill-set of each employee, rather than limiting them to a narrow range of tasks and skills demanded by a conventional department. This means that an employee with a passion for PR and a talent for graphic design may be able to do both as a project's needs evolve. Some call it the rise of "comprehensivism."
For HR leaders, performance management will need to become more fluid as a result. Whether or not a given employee has one manager, several, or none at all, they still need to get feedback—including, increasingly, from their peers—in order to keep learning and improving. To do that, they'll also need to feel free to ask for it from whomever (and whenever) they want. The shift toward self-steering learning and development is already underway, and it's up to forward-thinking HR professionals to smooth the way for it.
Steffen Maier is the cofounder of Impraise, an innovative solution that helps companies replace the annual performance appraisal with actionable, continuous feedback.
One writer says the received wisdom on how professionals should act on social media is failing to make the world a better place.
This story reflects the views of this author, but not necessarily the editorial position of Fast Company.
At each year's end, people are apt to imagine that the previous 12 months were uniquely bad, The New Yorker's Jia Tolentino recently pointed out. "It's in the nature of years to feel exhausting in retrospect," she wrote. "But 2016 does seem to have earned some sort of special designation." Zika outbreaks spread, Bowie and Prince died, uncivil discourse blossomed like a cold sore, and November brought what we now know to be a tampered-with U.S. presidential election. And that was just in the Americas. Standing on the cusp of 2017, we seem poised to roll back decades of social and environmental progress.
All of these disasters were amplified by social media, which bombards us with news of global mayhem in exactly the same space occupied by news of our loved ones and pictures of bunnies. Confronted with cute memes, we click the "like." But we keenly feel our helplessness to alleviate the suffering and antipathy that's increasingly on display right next to the things that make us smile.
Personally, I believe that helplessness goes viral inside, and I just shut down. Apathy and exhaustion are understandable responses. But they don't help, and neither do the conventions we've been coached to use online, particularly in our professional lives. That's why I'm changing my approach to social media in 2017—and you should, too.
According to career experts and "personal branding" aficionados, we're supposed to craft careful brand narratives to represent ourselves. I think that's bunk. Branding injects products with human qualities to make them more relatable. Well, guess what, human—you've already got human qualities.
In 2017, I'm going to inject more authenticity into my social media activity so that people know the human they're dealing with, where I'm coming from, and why I do what I do. I'll talk about, for instance, how flunking the fourth grade ultimately helped me. I know that's not conventional wisdom for a seasoned professional. But if we learned anything in 2016, it's that conventional approaches don't guarantee success.
Personally, I don't like President-elect Trump or what he stands for, but I see that he uses social media to show his authentic self, warts and all. That helped him succeed.
When it comes to my opinions about politics and global issues, I simply don't agree with the idea declaring them on social media is risky, and not in keeping with the allowable professional uses of LinkedIn, Facebook, and Twitter. To do so, on the contrary, is to hold your own integrity as a virtue and a value and to ask an employer or client to recognize that—as long as you take the high road in the way you express yourself.
But speaking respectfully and thoughtfully about what matters to you is about squaring your beliefs and values with your career, and seeing the two as mutually informing. Companies should value that, not fear it.
You might be concerned about scaring off potential clients or employers by revealing too much. Of course, professional encounters require a more limited level of self-disclosure than personal relationships. Confine your disclosure to what fuels your expertise with energy and passion. Keeping what's personal private is different than cloaking yourself in the false persona of personal branding.
This resolution might delight the leading social platforms, which all want engaged, "active" users. Many people step back periodically (or permanently) from their social feeds when they feel overwhelmed, and sometimes a "digital detox" is just what the doctor ordered. But there are rewards in the opposite approach, too—digging your heels in and using social media more, not less.
This year, I'm resolving to activate those same channels that threaten to overwhelm me, and create more kindness and clarity in the world around me. After all, as a coach, it's my professional mission to help others get the money and respect they need, and social media can be a powerful means of making life better for somebody else.
In fact, no matter what you do for a living, your role is fundamentally about the same thing: improving your own life and livelihood and those of others, even if indirectly or in the smallest of ways. Taking that same approach to social media isn't a stretch—quite the contrary, it's just another way to fulfill the deeper purpose underlying your career.
That's why if I see suppression of dissent in this country or an inappropriate elevation of one group over another, I'm going to speak up and counter it through my social media channels. I'm challenging myself to become critically engaged in 2017.
This year, I'll consistently let my social media connections know that I believe in love, kindness, and cooperation. I know I can't totally counteract the extreme hysteria of online hate groups, fake-news planters, and any forces that seek to divide us and foment chaos. But it's a start.
I'll be more vocal about my work to counteract those who don't value your contribution except to exploit your expertise and talent when they need you. And I'll be transparent and explicit about why I do what I do, knowing that's the best way to engender trust, instead of coaxing false confidence. I believe that standing as an example of transparency is a small but meaningful way to combat the hidden agendas that so many use social media to advance.
I know these may seem like inconsequential changes for one guy to make. But I truly believe it takes the progress of measured steps, first by a few and later by many, to make things better. Those small steps—those everyday acts of clarity, caring, and kindness—are where real change begins. And it's how substantive, purposeful careers are built: by people who live out their convictions, one day at a time.
Ted Leonhardt is a designer and illustrator, and former global creative director of FITCH Worldwide. His specialized approach to negotiation helps creative workers build on their strengths and own their value in the marketplace. Follow Ted on Twitter at @tedleonhardt.
It's been a decade since Steve Jobs introduced the device that would transform mobile technology. Not everyone was convinced we needed it.
As it turns out, history was a tough sell. On January 9, 2007, Steve Jobs unveiled the original iPhone at the Macworld Expo in San Francisco. During his two-hour presentation on stage, Jobs attempted to explain how this new device would completely transform how we all used our phones.
Not everyone bought it. Despite Apple touting it in a press release as a "revolutionary and magical product," the phone, whose key features at the time were a touchscreen, a full-blown Safari browser, an iPod-inspired music player, and a 2-megapixel camera, wasn't an immediate hit with many commentators. Skeptics—and there were plenty of them—said the smartphone was too expensive ($499 for the 4GB model), and some derided that it was only available on Cingular (which became AT&T Wireless before the phone was released the following June). Others complained that it came with only a 2G phone. In an age when the world was using flip phones like Motorola's Razr, the iPhone seemed ambitious, and many questioned whether it would work as advertised.
To be fair, a number of commentators—maybe even the majority—did see the iPhone as transformative, a reinvention of the cell phone as we currently knew it. But many others were skeptical about its prospects, both commercially and culturally. Ten years later, the reactions below are a reminder of how difficult it can be to recognize true innovation when it's staring us in the face.
Steve Ballmer in 2007 while he was CEO of Microsoft: "There's no chance that the iPhone is going to get any significant market share. No chance. It's a $500 subsidized item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I'd prefer to have our software in 60% or 70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get."
Former Palm CEO Jon Rubinstein in 2007: "Is there a toaster that also knows how to brew coffee? There is no such combined device, because it would not make anything better than an individual toaster or coffee machine. It works the same way with the iPod, the digital camera, or mobile phone: It is important to have specialized devices."
RIM's Jim Balsillie: "It's kind of one more entrant into an already very busy space with lots of choice for consumers . . . But in terms of a sort of a sea change for BlackBerry, I would think that's overstating it."
"Apple should pull the plug on the iPhone . . . What Apple risks here is its reputation as a hot company that can do no wrong. If it's smart it will call the iPhone a 'reference design' and pass it to some suckers to build with someone else's marketing budget. Then it can wash its hands of any marketplace failures . . . Otherwise I'd advise people to cover their eyes. You are not going to like what you'll see." —John C. Dvorak, MarketWatch
"It is nothing more than a luxury bauble that will appeal to a few gadget freaks. In terms of its impact on the industry, the iPhone is less relevant." —Matthew Lynn, Bloomberg
"The phone is a gamble on a new business for Apple. And even with its success with the iPod and a reborn line of computers, it has not been immune to marketplace failures, like the Macintosh Cube introduced in 2000" . . . [Jobs] said Apple had set the goal of taking 1% of the world market for cell phones by the end of 2008. That may seem small, but with a billion handsets sold last year worldwide, that would mean 10 million iPhones—a healthy supplement to the 39 million iPods that Apple sold last year. —John Markoff, the New York Times
"Apparently none of you guys realize how bad of an idea a touchscreen is on a phone. I foresee some pretty obvious and pretty major problems here."
"I'm not impressed with the iPhone. As a PDA user and a Windows Mobile user, this thing has nothing on my phone."
"I've got touchscreen buttons on my Samsung i730 and it sucks."
"I mean it looks pretty but it's not something I foresee being the next iPod for the phone industry."
One guy who did get it right was David Myers, the executive chef at the (now closed) Sona Restaurant in Los Angeles, where employees at the time used the Palm Treo. While it's a bit unclear why the New York Times asked him to chime in on its original story about the phone, Myers told the paper at the time: "It's like they read our minds. This is the next step in not accepting poor design any longer."
Regina Dugan, head of Facebook's secretive Building 8, on the importance of diversity to the creative process.
As the head of Facebook's secretive new hardware unit, Building 8, Regina Dugan leads a team of engineers who are trying to develop breakthrough technologies, much as she did when she was the first female director of DARPA. She's learned that assembling a diverse group of perspectives is essential to the creative process.
"There's very little difference between scientists and engineers and artists—they just use different tools," Dugan said at the Fast Company Innovation Festival in November. "We [all] want to make things that haven't been made before, and that's tremendously exciting. It's exhilarating, it's invigorating, and it's hard. Diversity is absolutely key to innovation. It's just hands-down true. When we are working on very difficult problems, it's essential that we have different voices in the room. In my teams it is common to see Oscar-winning directors working side by side with coders, or physicists working with textile manufacturers.
"The ultimate goal is cognitive diversity, and cognitive diversity is correlated with identity diversity. That means it's not just about [getting] women in tech. It's about broad voices, broad representation. But we can't step away from the idea that in the workplace, diversity also looks like identity diversity. You have to get to the place where you aren't made comfortable by the fact that everyone is the same, but rather feel inspired by how different we are. We get better problem-solving that way."
The central leadership question of 2017: What do you do when the unexpected arrives?
I didn't know what to do. A protester had just stood up in the audience, shouting questions toward the stage, where I was moderating. As host of the event, it was my responsibility to defuse the situation. But how?
That's when PepsiCo CEO Indra Nooyi, one of my guests onstage, stepped in. Nooyi calmly and firmly addressed the question with no hint of defensiveness. The audience applauded. When another protester tried to interrupt the session again several minutes later, the people seated nearby shouted down the disrupter. Completely unruffled, Nooyi continued on with our interview. The crowd came away even more impressed by her. She turned adversity to her advantage.
There are other compelling messages that Nooyi delivered that day, but I find myself coming back again and again to how she dealt with those outbursts. We all have a vision, overt or subconscious, of how we expect things to unfold. But as heavyweight fighter Mike Tyson once said, "Everyone has a plan until they get punched in the mouth." So what do we do when the unexpected arrives? How do we adjust?
This may be the central leadership question of 2017. The past two decades have brought wave after wave of changes: from 9/11, Al Qaeda, and ISIS to Google, Facebook, and An Inconvenient Truth. We've weathered tsunamis, earthquakes, and hurricanes. We've decoded the human genome and put massive computing power in the palm of your hand. And yet all this is arguably only a prelude for changes still to come—a prospect of great excitement for some, deep suspicion for others.
In the midst of a chaotic transition that seems more unpredictable than ever, we handpicked more than 200 top business and cultural leaders to speak at the second Fast Company Innovation Festival in New York. Delving into topics from startup culture to space exploration, mindfulness to mass-market impact, user-experience design to criminal justice reform, they delivered a slew of eye-opening perspectives. What unified their message was a focus on finding purpose in your work.
This special report highlights lessons from more than 96 of those speakers, chosen by our writers and editors to inspire, instruct, and hopefully energize continued creativity and progress despite the uncertainty of what we face in the coming year. The insights are both provocative and reassuring. Here are seven that particularly speak to me.
Fab Four: This issue's cover subjects were chosen from among our Innovation Festival speakers.
As impressive as Nooyi was in handling protesters, the most revealing moment during her session came later. I asked her whether championing healthier eating was inauthentic for PepsiCo, as a purveyor of soda and salty snacks. She answered with refreshing candor, noting that she hadn't created Pepsi or Doritos, which are part of what she calls the company's "fun-for-you" portfolio. Her role as CEO is tricky: Even if she wanted to eliminate these products, she can't. Thousands of jobs would be lost, and she'd be fired for damaging the company's business. Yet if its product offerings were all high-sugar, high-salt, PepsiCo would alienate health-conscious consumers, limit the talent pools from which it recruits, and narrow the appeal of its brand. Nooyi's solution has been to reframe PepsiCo around what she's called Performance with Purpose, adding more "good-for-you" products and emphasizing pillars like environmental responsibility and women's empowerment. While investors initially reacted skeptically to this socially tinged mission, it has produced impressive results and provided a North Star in maintaining cultural relevance for the company.
When supermodel Karlie Kloss confesses about her "nerdy passions", she's not only admitting that the fashion set may not always be as cool as they claim to be. She's also pointing out how our culture's most essential skills are shifting. With software now embedded across myriad industries, we all need to have the ability to "kode," as Kloss puts it. (Even with a k, the message is the right one at the right time.) Entrepreneurship too is required. When I ask Sarah Jessica Parker why a successful actress would want to run her own company, her response, about the allure of collaborative opportunity, could apply to all of us.
Pro golfer Jordan Spieth is only 23 years old, and he's already earned millions on the PGA tour and a top 10 world ranking. He also coined the phrase "young, fearless, aggressive" to describe Under Armour, which CEO Kevin Plank has adopted for the company. Like many other millennials, Spieth seems to have a preternatural understanding of modern business and how to manage various forms of communication. Of course Plank's decades of experience in building Under Armour from scratch into a powerhouse athletic-wear brand has plenty of its own value too. Plank is tutoring Spieth, even as he tries to see the world through Spieth's eyes. This symbiotic relationship—who is mentor and who is student shifts based on the particular situation—offers a groundbreaking dynamic for finding success in a new kind of world.
The challenges of modern business are so intense and ever shifting, leaders need all the help they can get. If talent can be uncovered in Kansas or Kathmandu, why not hire from both? Why exclude women or people of color or anyone else? Facebook's Regina Dugan uses the phrase "cognitive diversity" to emphasize the need: It's not simply about tapping into people who look different, but people who think differently. This subtext also emerges, in a more sobering context, in our roundtable on criminal justice reform. Wherever communities are excluded from access and opportunity, the waste is enormous, for all of us.
The pressure on business leaders to deliver consistent, improving financial results is relentless—and unrealistic. Business does not unfold in a straight line, whatever our investors might wish and our accountants might conjure. Which makes what Hamdi Ulukaya has done at Chobani all the more impressive: resisting the pull of near-term financial gain by voluntarily giving owner-ship stakes to his employees, adding a robust parental leave policy, hiring relocated refugees, and more. Ulukaya's approach to business is anything but conventional. He views his role as CEO as more than maximizing every dollar. An immigrant who took underperforming U.S. manufacturing plants and built a multibillion-dollar business, Ulukaya exhorts business leaders to embrace a personal responsibility that goes beyond investment returns.
The reach you can get from using Twitter, Facebook, Snapchat, Instagram—it's awesome. But reach is not the same thing as impact. To really connect, more often than not, we have to get face to face. That's why Fast Company hosts live events like the Innovation Festival, which enabled 7,000 attendees to share not just stories but experiences. (We hope even more of you will join us next time.) It's the reason why this Leadership package is illustrated with warm, engaging photos of people. We believe that to stay ahead of the changes swirling around us, we need each other. And nothing builds bonds like looking someone in the eye, laughing together or crying together, or just plain talking through ideas together.
The morning after Donald Trump was elected president, the mood in the Fast Company offices was fragile. While embracing change is one of our hallmarks, the poll-defying results had everyone off-balance. How should we adjust our coverage plans? What did it all mean? In meetings and conversations in the weeks that followed, we returned repeatedly to our core mission: that business should be a vehicle for progress. Having a clear purpose was helpful. Fast Company is not a chronicler of politics. But we believe that business and culture are connected. Sometimes the pursuit of the almighty dollar leads to selfish, venal, incorrigible activity. (Witness Volkswagen's willful skirting of emission requirements.) But business can also be a powerful counterweight to nostalgia and stagnation, valuing openness and unleashing new ideas and solutions that improve the human condition. We hope our coverage helps reinforce that positive, optimistic message. The future is what we make of it. Let's get to it.
The Full Frontal host had lots of experience with comedy. Leading a team was a new frontier.
The host of TBS's weekly news-satire show, Full Frontal With Samantha Bee, arrived on the job in 2016 after spending almost 12 years at The Daily Show. By November, Full Frontal was matching The Daily Show in the ratings. Managing a team of her own was something Samantha Bee had never done before, so she had to learn fast, as she explains to Fast Company's KC Ifeanyi at the Fast Company Innovation Festival in November.
Full Frontal could not have launched at a more opportune time. How do you plan to keep the momentum going now that the presidential campaign is over?
We are going to have another presidential election in 2017. Is everybody on board? Let's do it. No, the election has wrung us out.
You had a long career before hosting your own show. What was it like stepping into a leadership role?
I didn't expect to have to think so much about leadership! At the beginning, it was just me and [head writer and showrunner] Jo Miller and [executive producer] Miles Kahn, and we would just laugh and send each other crazy emails. We still have a pretty tight staff, but when you're trying to create a comedy show, which is a tremendous amount of work, you actually have to manage people, and think about their lives, and make their lives livable, and think about their feelings, and manage their relationships. That was very new to me and has been the greatest learning curve. I don't think I always succeed at it, but I always am trying to do better.
You have a blind hiring process, which has resulted in a very diverse writers' room.
Most shows now do. I think we moved the needle on that even further. We did a lot of outreach. You have to call people and say, "Hey, who do you know who is not working professionally but is a professional-caliber writer? Who do you know who has promise?" It's not like an open call that you put at the back of the New York Post. You have to kind of know somebody. And because it was blind, we didn't know your gender, we didn't know anything about you. We felt that was a very fair way to receive submissions. You can't just hire people who are exactly the same as you. It enriches your life to bring people into your workplace who aren't a carbon copy of you and your experiences.
How do you take those different points of view and funnel them through this one lens, with you as the host?
If [writers] have a particular passion, they need to find a way to pitch that story that communicates that passion, and then we'll be attracted to it and we'll want to tell that story, too. Letting people explore the things that they are truly interested in has been extremely fruitful for us. I think you feel that on the show.
Chris Rock recently said he didn't really relate to your show.
Well, I think Chris Rock is very funny, so I don't know what's happening! That's fine. It's not for him, that's okay.
Do you ever worry about not reaching some people?
I don't worry about reaching people at all. It's the last thing we think about. We are serving ourselves, trying to make a show that we like, that we find satisfying—that at the end of the day we feed to TBS and go, "That was good! Done!" I'm sure the network is like, "Well, we think about it all the time." But you can drive yourself crazy. When you're making art—yes, I said it was art—when you're making a creative product, if you think too much about who it's for and who is going to like it, it becomes impure somehow.
What lessons did you take away from The Daily Show?
I developed a confidence over the years. TBS has never tried to squash our voice. They've never told us to modulate our tone. Never. But [early on], it was a big topic of discussion: "How will your show be different from The Daily Show?" And I was like, "I don't know, I just know that it will be." Because I see the world differently.
PepsiCo CEO Indra Nooyi and chief scientist Mehmood Khan are committed to working toward progress in health and sustainability.
PepsiCo recently revealed a new global corporate agenda that emphasizes health and social accountability. That might seem like a stretch for a company best known for hawking junk food, but chairman and CEO Indra Nooyi and chief scientist Mehmood Khan say they're committed to making their products healthier, empowering their employees, and encouraging environmental responsibility. At the Fast Company Innovation Festival in November, Fast Company's Robert Safian talked to them about their ambitious plans.
Innovation is a word that is thrown around a lot. From your perspective, what is its definition?
Indra Nooyi: Anything that drives the top line of the company. Around the world, our categories are growing somewhere between 3% and 4%, which means that every year, if we want to maintain or gain [share] in the world, we have to grow our revenues somewhere between $2.5 billion and $3 billion—just to stay flat. And then our base erodes every year because [some of our] products die. So our gross growth has to be about $5 billion a year. That is a big challenge. So I have to innovate the hell out of the company. The magnitude of addition that we have to do to the top line just to hold share or gain a little globally is huge.
Um, do you sleep much at night?
IN: I don't. And I'm emailing Mehmood about how to get me things faster.
Mehmood, Indra says you're the star of innovation. When it comes to this $5 billion number, is that on you?
Mehmood Khan: [When we] think of technology and R&D, what we are really talking about is invention, not innovation. Innovation is when you take inventions and actually solve for a consumer need. There's the consumer-facing innovation that we see on the shelf in the supermarket. There is another on the back end: what products we make, where we get the ingredients, how we grow the agricultural components, how we distribute, how we manufacture. A key part of my role is how to put the jigsaw puzzle together. And the consumer is changing fast and increasingly telling us what they want, but not often in very clear terms.
Chief scientist Mehmood Khan leads PepsiCo's effort to develop new products.
You just announced a new sustainable-growth agenda for PepsiCo: goals for 2025 based on three pillars. The first is "helping to improve health and well-being" through your products. PepsiCo's business has historically been built on sugary drinks and salty snacks. Doritos are delicious, but we don't think of them as being healthy. Is there anything inauthentic about your trying to improve health and well-being?
IN: PepsiCo's business is three pieces. It has fun-for-you beverages and snacks: Pepsi, Mountain Dew, Lay's, Doritos, Fritos, Cheetos . . . I could go on. All the 'tos. [Laughs] The second is what I would call better-for-you: Diet Pepsi, Baked Lay's, Baked Doritos. And then there's the good-for-you piece: Quaker Oats, Tropicana, Naked Juice. We are trying to take the fun-for-you portfolio and reduce the salt, sugar, and fat. I didn't create Pepsi Cola. I didn't create Doritos or Fritos or Cheetos. I'm trying to take the products and make them healthier. And guess what they tell me? "Don't be Mother Teresa. Your job is to sell soda and chips." So this is not being disingenuous. We are trying to take a historical eating and drinking habit that has been exported to the rest of the world and make [it] more permissible.
To what extent is your job to teach consumers that we shouldn't eat foods that aren't as healthy, versus giving us products that we like?
MK: I might be a health care professional [Khan is an endocrinologist], but that is not my job now. My job is to take the best advice that exists and figure out how we can deliver products to consumers so they can make the right choices. We are doing our part. Everybody else has to do their part.
IN: We have to make sure that the healthier products, [like] Quaker and Tropicana, taste good and are reasonably priced—because you shouldn't have to pay more for healthy products—and are ubiquitously available. Then we have to display them so that we nudge you to the healthier choices. Look, there is a time and place for the fun-for-you products. We are not nannies, and I don't think we should be nannies. Our job is to make sure that we put these products out on the shelf and make the labeling clear.
Let's move to the second pillar: Protecting our planet.
IN: To me it's personal, because I grew up in a highly water-distressed city in the south of India. We had maybe an hour of water in the morning and had to collect all we could so we could live. That city is still water-distressed, yet we have beverage plants there. And in many parts of the world that are water-distressed, we have facilities. So one of the pillars of our environmental sustainability is reducing the water use in our plants and figuring out how to make the whole community water-positive, bringing our technologies in there, passing on technologies to farmers so they can farm and water their crops in a way that is efficient [to help] conserve water.
Pillar three is empowering people around the world. Part of your agenda includes investing $100 million to support women and girls. Why that specific focus?
IN: The goal is more expansive than just that. We want to create an environment in PepsiCo where every employee can bring their whole self to work and not just make a living but also have a life. We have done a lot in terms of setting up day care centers in our facilities, giving people maternity and paternity leave, giving people flextime. But we want to make sure that everybody in the world has a chance to come to work at PepsiCo, not just those lucky enough to get an education. Women and girls in particular are discriminated against in many, many countries. We believe if you educate a woman, you educate society. And it improves our consumer base. So we are going to invest in every country to uplift women and girls. In Saudi Arabia, for example, in most of our quality-control labs there are only women working there. When you go to some of our manufacturing facilities, there is a wall [per religious law]. On one side of the wall the women are working; the other, the men. So we have created an environment where women [are able to] come to work.
Many large companies are bigger than countries. With our market cap, we are the 37th-largest republic in the world. And we have global governance, which many countries don't, or many regions don't. I think we have to do our part to bring our heft and the fact that we have global governance to find ways to improve society wherever we are.
MK: We are committing to extend our code of conduct across our supply chain. One-third of all humans work on a farm. Most of them are women. And if we can impact the lives of women, it impacts the lives of the next generation, the local community, but they are [also] generating the economy at the village level, which then impacts across the whole system.
Indra, you've talked about the responsibility you feel as one of the few women running businesses as large as PepsiCo. That number doesn't seem to be changing very rapidly. Why does this situation persist?
IN: More than 50% of people who are graduating from colleges, from professional schools, are women. And some of the top grades are being [earned] by women. So we don't have an entry-level problem. We bring them into the company, they do very well in the early stages. And then what happens? If they choose to get married and have kids, that's the time they have to build a career, and most companies don't have support systems that allow women to have a life and a livelihood. We almost force people to choose.
And then women leave, or take a step back. For example, how do you take the kid to the pediatrician if the doctor is not open Saturday or Sunday? If we don't provide the support system when the employees are in their thirties and their forties to allow them to have a family and work, there is no way we're going to build a pipeline to the C-suite. It is a long-term problem. We have to address it.
The second issue we have, and some people may not agree with me: I still think we hold women to higher standards than men. We still think that a woman has to prove herself by working 20% or 30% better than the man. In my case, when I was early in the workforce it was 50% to 100% better than the men—at least the number has come down a bit, thank God. And we haven't yet reached an equitable place in society. If that happens, then maybe women will have a much better shot at reaching the top of the organization.
Stop "organizing" your emails by subject and start thinking of them in terms of deadlines.
For years, my approach to email was like slaying a hydra. For every email I deleted, two more landed in my inbox.
Part of the problem, I knew, was the nature of my work. My team stands between two major organizations within my company, making collaboration crucial, however inefficient it was in practice. So not only did I put up with this mess, I was actually complicit in letting it worsen. I saved everything. I thought most messages addressed directly to me needed my response. I was wrong.
Looking back, I didn't have the discipline and discernment to really manage my email habits. The system I use now isn't a product of my own invention. My best friend works for a major consulting firm, and I was grateful when he sketched out the rough strategy his firm shares with consultants to help them manage their own unruly inboxes. The technique comes with all the beauty and simplicity you'd expect from a firm charging seven figures per engagement—and it relies on a folder system you can tally on one hand.
The biggest mistake, in my experience, is creating folders based on topics. Emails, like meetings, rarely stay on track.
My newly streamlined, uncluttered inbox has a grand total of five folders.
Where do you file an important update that covers two unrelated projects? What do you do with that same email if it requires a response?
The second mistake I've seen, and personally committed, is trying to use an inbox as a to-do list. There simply aren't enough hours in the workday to respond to the emails that pile up there. Over time, precisely because of the way I was "organizing" my inbox, emails that I should've responded to got pushed further and further down, and were eventually forgotten.
The system that saved my sanity requires only five folders:
Inbox: the inbox is a holding pen. Emails shouldn't stay here any longer than it takes for you to file them into another folder. The exception to this rule is when you respond immediately and are waiting for an immediate response.
Today: Everything that requires a response today.
This Week: Everything that requires a response before the end of the week.
This Month/Quarter:– Everything that needs a longer-term response. Depending on your role, you many need a monthly folder. Others can operate on a quarterly basis.
FYI: Most items I receive are informational. If I think I may need to reference an email again, I'll save it to this folder.
Email will quickly become your master if you don't take charge. So once you embrace this system, you need to adhere to it mercilessly—there are no half measures. We tend to get more lax about newly adopted habits as their newness rubs off. But I've actually gotten better over time at sticking to my five-folder rule. I'm ruthless about deleting emails that don't require my attention. Here are five tips that make the system more effective.
First, I keep an actual to-do list. Occasionally I'll add items to that list based on the content of an email that didn't require a response. For example, if an email thread results in deciding that we need to schedule a meeting, I'll make a note to prep my boss with some information from those emails—but I'll delete them once I've finished that prep session.
Second, don't exaggerate your own importance. Too many people want to have a say in too many things. We all have leadership aspirations—and that's generally a good thing. One way to grow your influence is indeed by taking on more responsibility. But don't confuse having an opinion with leadership, or mounting email volume with weightier job duties. If you don't need to respond, put it in the "FYI" folder or delete it—it's one or the other. And if you stay on "cc," you'll get the latest thread when everyone responds, so there's no need to worry.
Third, don't exaggerate the importance of others. A lot of people want responses today. I'm one of them. But I've learned that I don't always need or deserve a response today. This is especially true if you have obligations that directly impact customers or your company's financial health. Don't put emails in the "Today" folder that don't belong there; if it's in the "Today" folder you have to respond to it that day, no exceptions.
My rule is simple: If my wife asked me to come home early and I was willing to leave emails in the "Today" folder, that doesn't mean I need to blast through them once I get home—it means those emails didn't belong in that folder to begin with. I try and limit "Today" emails to messages involving customers, my boss, and urgent projects.
Fourth, you can work out of multiple folders simultaneously. Try to keep the "Today" folder small, for obvious reasons. If it's empty and you've got time to address longer-term emails, dive into the "This Week" folder. I typically spend my Friday mornings doing "This Week" emails. If I don't have all the information I need, I may begin my response but save it as a draft, and hold off sending it until I'm all squared away.
Finally, if your work is project-based, you can create this five-folder system for each project. You may have two or three projects running at a time, and technically wind up with 10 to 15 total folders as a result—but the system still holds. After the project is complete, archive the entire structure.
Like every new work habit, and especially those involving personal organization, this one may feel unnatural at first. I found it needed some getting used to. Soon after I switched to this method, I was still stressed out because I felt like I was missing something. In reality, though, everything was completed, and I gradually began to see that. It turned out that I'd gotten used to feeling the burden of email and was confusing it with productivity. Armed with just five folders, those days are over.
Zach Hanlon is a marketing and sales expert who has worked with IBM, Oracle, and other businesses to improve their e-commerce and customer experience operations. Follow him on Twitter at @zshanlon.
David Lee aspires to "keep people slightly out of their comfort zones."
David Lee is on a mission to inspire the millions of users of the website-building platform Squarespace to communicate more effectively and creatively online. Here's how he pushes the company toward bold product design and award-winning marketing campaigns:
Lee is less interested in hiring superstars than in creating highly collaborative groups. "The team dynamic and chemistry is actually more important than pure, raw talent," he said at the Fast Company Innovation Festival in November. "On paper, some people might seem like the perfect fit in your organization. But if you place them in a certain context, it completely backfires. You need people who feel compelled to work together, but who can still push each other."
If you truly want to inspire people, you have to be more of a psychologist than a taskmaster. "Leadership is all about understanding people—learning what makes every member of your team tick. It's fine and dandy to set a North Star that anyone can march to, but ultimately people are unique. Some want to be inspired, some need tough love. Your job is to pull on all these levers to find the best ways to get your team to do the best work of their lives."
Success should be measured less by what you've done and more by what you want to do in the future. "It's my job to keep people slightly out of their comfort zones—to push them beyond what they think they're able to achieve. There's this delicate balance of setting milestones for people to hit and celebrating them, but then making sure to set the next milestone the next day."
Tamara Mellon says luxury fashion will "be eaten by technology" as she sidesteps retailers and lowers prices with web-only company.
In late 2015, Tamara Mellon decided to blow up her company. At least that's how it felt to her.
"Sometimes you have to burn your house down and start again," she says. "It's an incredibly scary thing to do."
Tamara Mellon
Mellon is best known for leaving her role as the accessories editor at British Vogue at the age of 27 to cofound luxury shoe label Jimmy Choo in 1996. But after 15 years as chief creative officer at the brand, she decided she was ready to strike out on her own. In 2013, Mellon launched her own eponymous company, which sold clothes, shoes, and accessories that fused high-quality materials with a slightly edgy, rebellious aesthetic. Rather than adhering to the traditional fashion industry calendar, she sped up the time it took to get products to the customer from six months to three.
Things didn't work out as planned, for a variety of reasons. Mellon recently filed a $4 million lawsuit against Jimmy Choo for threatening to boycott Italian factories if they worked with her, a move she said made it hard to build her new supply chain. A spokesman for Jimmy Choo called the suit "groundless,"in a statement to the New York Times.
In the end, she had to file for bankruptcy less than two years after she started. "It was obviously very sad and traumatic," she says. "Then, you feel like a failure. But internal resilience had to kick in: I still believed in the company and I didn't want to give up."
Instead of hiding from her customers and the media, Mellon decided to tell her story of failing fast and bouncing back. "I decided to face this with complete honesty and confront the humiliation head-on," she explains. "I thought that if I told my customers what happened, they will appreciate my authenticity because this kind of thing happens to everybody in their life. I wanted to turn it around and give people an inspirational story rather than a failure narrative."
She's back with a vengeance. Last fall, with the backing of NEA—the VC fund that helped launch Casper, and Jet—she started all over again with a new iteration of her brand. She says she's learned from her mistakes. This time, she's tweaked her business model: Rather than working with retail partners, she's building a direct-to-consumer, digital-first company. She's also pared down her product range to focus exclusively on shoes.
Mellon believes that the luxury fashion business is on the verge of major disruption, following on the heels of brands like Warby Parker and Everlane, that were built on the internet.
She shared her insight in a Q&A with Fast Company.
The Frontline
What is happening in fashion right now?
As we all know, every industry is going to be eaten by technology in the end: Music was one of the early ones, but now it's fashion's turn. Much like music executives refused to see that change was coming and didn't want to adapt or do anything, fashion executives are resisting change.
One of the big issues in our industry is that when we show a new collection, we don't deliver it until six months later. When I started out in the fashion business as a young editor in the early '90s, the only people who were at fashion shows were press and buyers. The customer only saw the product in a magazine or on the shop floor six months later. It had this big exciting reveal moment, which made people want to buy. Now, everybody watches the fashion shows on social media, but it still takes us six months to deliver the product. It's a non-event when the product comes in.
I believe the customer is already fed up with that. Nobody wants to think about what they want to wear in four months' time. If you buy something today, you want to wear it tomorrow. The most planning a woman might do is start thinking on Wednesday about what she might wear on Saturday night if she has something special to go to. That's how we live now.
When I sold my stake in Jimmy Choo and left the company, I saw the writing on the wall about what was happening in the industry. I had this vision for how to build a very different business model and a new kind of luxury brand. I thought that if I don't do it now, I'll never do it.
The Rebel
But implementing a "buy now, wear now" approach is easier said than done, right?
Yes. In some ways, I was too far ahead of the curve. Three years ago, when I launched the first iteration of my brand, I tried to shorten the gap by showing products three months before delivering them, instead of six, and showing only seasonally appropriate clothes. When I told retailers about my model, they looked at me like I had an alien growing out of the back of my head and said their financial planning was not set up for it.
All of this was aggravated by the fact that Jimmy Choo made it impossible for me to go to the factories in Italy I had been working with, even after my yearlong non-compete agreement ran out. (We reached out to Jimmy Choo several times, but have not heard back.) I wanted to go back to factories where the pattern cutter knew me and understood the quality I wanted. I had to scramble, go to a factory that didn't know me, and unfortunately I produced shoes that were below my quality standard. Once you do that, people lose trust, and that spiraled my shoe business down, and I couldn't dig myself out of it. It felt like I was pushing a rock up a hill every day.
In the end, I decided to blow up my company and reorganize it. I spent a lot of time finding new factories and teaching them exactly how I want my shoes made, and I'm very proud of the quality we have now. I've pulled my business out of the wholesale model. I talked to new investors, people who really knew about building a consumer tech business and a luxury brand for the next 20 years. I decided to sell my products through my own channel so I don't have to rely on retailers. By doing a direct-to-consumer model, I can control when I release shoes.
So what is your strategy for releasing products?
I have a totally new approach this time around. I got rid of designing seasonal collections, because I think that's outdated. At Jimmy Choo I designed four collections a year. With my brand, I have one collection of basics that stays online all the time: the classic pump, the modern strappy sandal, flats. They're all made in Italian factories that make shoes for other luxury brands. Shoes should last for years: You want some iconic, timeless pieces.
But to keep things exciting, we have a section called Lab where we deliver between three and five fashion pieces every month. So you have new products coming in and customers have a reason to come back. They're limited, so if you don't get it, you'll never get it, so it creates a sense of urgency to get it if you like it. That's the future: just giving small, mini-collections.
Why did you decide to cut out ready-to-wear clothes and bags from your collection this time around?
What I realized is that when you have a startup you have to focus on one category and become respected for that. So I decided to go back to my roots: shoes. You need to build your core business first, then you can go into other products. In my first iteration of the brand, it was like starting three separate startups: I had a ready-to-wear team, a bag team, and a shoe team. All those channels of business have different supply chains.
The Rendezvous
Do you think today's luxury customer is willing to spend as much on shoes as she was in the past?
The consumer is much smarter today. You have brands like Everlane lifting the lid on pricing structure that the fashion business has kept secret for 50 years. I pay the same factory price as I did while I was at Jimmy Choo. But my customer understands markups. She understands that I don't put my products through the wholesale channels, which is how I get to a lower price. Instead of selling a pump for $600, I am selling it for $350, which is an entry-luxury price.
The genius of this approach is that I can reach a much bigger audience of women. I attract the young girl who is coming out of college who wants a really beautiful pair of pumps she can wear to a job interview and will stretch for a pair of my shoes. But I also have the woman who has been buying high-end luxury shoes for years and when she sees my brand she thinks, "Oh my God, the shoes are basically free" then buys 20 pairs.
As a digital-first brand, do you find that you engage with your customers differently than you did when you had brick-and-mortar stores?
Yes, I definitely think that the way we communicate with consumers is changing. Luxury brands used to operate with designers sitting in their ivory tower dictating the trend of the moment and telling everybody to wear this or that.
But selling online is about creating community and being able to have a conversation with your customer. The engagement we've had on social media has been phenomenal. Before we launched, we began telling the story of the brand on Instagram. The response was unbelievable: People actually thanked me for sharing my story of failure and rebirth. Some followers wrote to me saying that because I was so honest about my turnaround, they were now not going to give up on their dream.
How important is a great smartphone camera? The dual-lens camera and superior optical zoom on the iPhone 7 Plus seem to be a big draw.
Apple's iPhone 7 Plus outsold the smaller iPhone 7 by a good margin during the holidays, according to new data from Slice Intelligence, suggesting that the larger phone's dual-lens camera and far-superior optical zoom may be a big draw for smartphone consumers.
Of all iPhone 7 series phones sold during November and December, roughly 60% were the larger iPhone 7 Plus, while roughly 40% were the smaller iPhone 7. Put another way, for every two iPhone 7's Apple sold, it sold roughly three iPhone 7 Plus devices.
That means people seem to be willing to pay a premium for the better camera. The iPhone 7 Plus starts at $769 for the 32GB version, while the iPhone 7 starts at $649 for the same amount of storage memory. Consumers may have been lured to the more expensive phone because the two cameras on the back of the phone produce demonstrably better photos, especially in low-light situations.
The Slice Intelligence data shows large spikes in sales of the iPhone 7 Plus on Black Friday and Cyber Monday a few days later.
Regular vs. Plus
Overall, Slice says, revenues from iPhone sales in November and December 2016 were up 66.9% from the same period last year. Looking at holiday sales of all available iPhone models, the iPhone 7 series phones accounted for most of the sales.
iPhone distribution
This further suggests that the dual-lens camera caused many buyers (or gift-givers) to opt for the iPhone 7 Plus. And that could be a very promising development for Apple, because the company could really use a killer feature to boost iPhone sales.
The iPhone 6S series sold less than Apple expected, leading to 2016 sales that, for the first time, failed to surpass sales in the previous year. The smaller iPhone 7 model was seen by some as only a marginal improvement from the 2015's iPhone 6S.
The Plus model's dual-camera, however, is something entirely new. And that dual-lens camera is likely to show up in at least one other iPhone model later this year—probably one with a five-inch screen.
Apple released both phones in September, in time for the holiday season. iPhones are the most gifted of all phone brands during the holidays.
The iPhone 7 Plus is more expensive because of its larger display, expanded memory, and dual-lens camera, and the profit margin on sales of the phone is also higher than that for the smaller iPhone 7, analysts say.
Slice Intelligence based its findings on sales data from 50,000 online iPhone purchases by U.S. consumers during November and December. To know the exact unit sales of the phones, we'll have to wait until Apple releases its quarterly sales numbers when it announces earnings on January 31.
San Diego's biggest tech employer, smartphone chip provider Qualcomm, is still a long way from matching Intel's feat, both in name recognition and in revenue. But the company dreams of going much farther by being inside seemingly everything: smart cars, high-end fitness bands, VR headsets, smartwatches, AI systems, consumer and commercial drones, and internet-serving satellites. Qualcomm even thinks it can kick Intel out of PCs and server farms. It's shelling out tens of billions of dollars to achieve its heady ambitions.
You might expect a flamboyant, aggressive CEO to be driving Qualcomm's ballsy charge for world domination. That doesn't describe my impression of the man sitting across from me in a spare conference room in early December, wearing jeans and a gray University of Michigan fleece (honoring the school where he got his masters degree in electrical engineering). Forty-seven years old, with bushy gray hair and smart looking, dark-rimmed glasses, Steve Mollenkopf has the quiet voice and cool demeanor of the engineer he is. Over 22 years, Mollenkopf worked his way up the ranks at Qualcomm and took over as CEO in March 2014.
Qualcomm CEO Steve Mollenkopf
It wasn't an easy start. Qualcomm's hot new smartphone processor, the Snapdragon 810, was a bit too hot, according to some reports that it overheated in phones such as the LG G Flex2 and HTC One M9. (Qualcomm insists the chip performs fine.) The Chinese government was pushing an antitrust case over what it considered Qualcomm's excessive licensing fees for 3G and 4G cellular tech; and a big shareholder, hedge fund Jana Partners, was pushing to split the company in two—between its chip design and patent royalty divisions. And Taiwan's MediaTek, though smaller than Qualcomm, is rising to challenge it in the smartphone chip market.
"I feel like this management team has been through a tremendous amount of major issues in a short period of time, probably faster than anyone I can think of," Mollenkopf says, calmly. He's leaning back in his chair with hands clasped around his knee. "We decided ultimately to do the biggest restructuring in the company's history. Then at the same time, we also repositioned the company and really changed the narrative of the company."
That narrative, in essence: Powerful processors and wireless connections are going to be in tens, perhaps even hundreds of billions of new devices, and Qualcomm wants to provide chips for as many of them as possible. That requires remaking the company and starting, sometimes from scratch, in businesses already dominated by rivals. It wouldn't be the first time for Qualcomm to charge into industries it seems to have no business being in.
Instead of splitting, Qualcomm is swelling, buying over $50 billion worth of companies since Mollenkopf became CEO, including a pending $47 billion deal for Dutch chipmaker NXP. The tie-up will likely more than double Qualcomm's staff (even after some layoffs that Mollenkopf says will come) and extend its reach to cars, medical devices, home automation, wireless payments, and unsexy-but-important machines like point-of-sale terminals at store checkouts. In China, Qualcomm got back in business by paying a $975 million settlement and adjusting licensing fees. (However, a South Korean investigation recently charged anticompetitive practices that may result in an $865 million fine.)
But even as Qualcomm takes on new challenges, Mollenkopf has been jettisoning projects that weren't clearly connected to its core chipmaking business, such as augmented-reality software platform Vuforia, which it sold in 2015. (A mural celebrating Vuforia still covered the side of a Qualcomm warehouse when I visited.) Altogether, the company has cut $1.4 billion in annual expenses, along with about 1,700 jobs.
With the great big exception of Apple (which designs its own chips for iOS devices), Qualcomm dominates the high-end phone universe. Its top Snapdragon chips power flagship Android smartphones like the new Google Pixel, the HTC 10, Moto Z, and even many of Samsung's Galaxy S7 line, as well as the exploding Note 7. (Samsung uses both Qualcomm's and its own Exynos chips). Qualcomm also makes a fortune—likely about two thirds of its profits—from other people's chips through licensing fees on the cellular technologies it has developed. These include the CDMA wireless standard that powered 2G and 3G Verizon and Sprint phones for two decades, much of the 4G technology in phones around the world today, and—Qualcomm hopes—technologies that will get incorporated into the insanely fast 5G standard coming on line in the next four years.
Like Apple, Qualcomm designs chips and hires other companies, such as Samsung, to make them. Intel and Samsung have to worry about reconfiguring their factories and having enough demand to keep them busy before they can introduce new chips. Qualcomm and Apple just pick whatever factory provides the best deal. "We don't care exactly how full Samsung's fab is. We let them worry about it," says Keith Kressin, Qualcomm's senior VP for product management. Jumping between manufacturers has allowed Qualcomm to shrink its chips four years in a row. The upcoming Snapdragon 835 is 35% smaller and uses 25% less power than last year's top chips, the 820 and 821. (In buying NXP, however, Qualcomm will now own some chip factories.)
Dominating one industry is no guarantee for the future. Intel owns the PC (and Mac) and server businesses, but its smartphone and tablet plans flopped. "I think Intel's sin was that they didn't listen to what Apple wanted," says Forrester Research analyst Frank Gillett. "They said, 'Here's what we have. Want some?'" Intel tried to wedge its processors, based on its design technology called x86, into mobile devices. But the mobile industry was using a chip type created by a British company called ARM. In the mobile market, everyone but Intel, including Qualcomm, builds ARM-based chips—the platform for iOS, Android, and the floundering mobile version of Windows.
The phone business is still growing, especially in developing countries, but more slowly than it had been—in single-digit vs. double-digit percentages each year, according to market research firm Gartner. Qualcomm and other chip companies hope that gangbuster growth reminiscent of the go-go smartphone years will come for all those newly connected machines—clumped into a catch-all category called IoT, the internet of things.
Mollenkopf believes that Qualcomm's smartphone chips will be perfect for all these new devices and even for the "cloud" of server farms that hold the IoT together. In every new category, it faces competition: Intel, for instance, is challenging Qualcomm on just about every front, such as drones, virtual reality, cars, and 5G wireless. And Qualcomm is way behind other companies on some fronts, like Nvidia for smart and autonomous cars.
As it tackles all these new markets, Qualcomm has to avoid the peril Intel met with phones: failing to convince customers that what it's selling, Snapdragon, is perfect for whatever they are looking to buy. But Mollenkopf dismisses the Intel parable: "Almost every other transition that people talk about—PC-to-smartphone, for example—it was a big technology change. What you had to be good at changed dramatically." Mollenkopf claims that's not the case today: The trend toward ever-smaller and more energy-efficient chips that phones engendered dovetails into the needs for other connected gadgets. "It's all really being disrupted by communication and low-power computing and the synthesis of many different technologies together," he says.
A big part of this trend is the SoC—system on chip. A phone's CPU, graphics, modem, Wi-Fi, Bluetooth, and other components, now including artificial-intelligence engines, are squeezed into a single chip to save space, money, and power, while boosting speeds (with shorter distances for electrons to travel). Those are benefits for any device. "You can use the [technology] roadmap from cellular to really help out automotive and internet of things," says Mollenkopf. Qualcomm's rivals also build SoCs.
Prototype drones packing Snapdragon processors
In San Diego, I visit a lab full of consumer drone prototypes. About a half dozen 3D-printed models sit on a workbench; a few steps away, engineers test image-stabilizing algorithms for drone-mounted cameras. The drones run on the Snapdragon 801 SoC, Qualcomm's top smartphone chip from 2014. Qualcomm has to build working models of drones, headsets, and other products to figure out elements like software needed to make its phone chips work in them, says Raj Talluri, who runs Qualcomm's IoT division. Only then can it pitch the chips to companies making the devices.
The $599 Hover Camera Passport drone, from Chinese company Zero Zero Robotics, is in a growing category of selfie drones that can hover steadily in front of people, able to recognize and lock onto faces to take photos, and even follow people as they move about. Most drones don't run on Snapdragon, yet they can be quite sophisticated. The Phantom 4 and Mavic Pro drones from Chinese drone maker DJI use the Myriad 2 machine-vision chip from a startup called Movidius (now owned by Intel) to rapidly recognize people it's following or to map a safe flight path over rough terrain.
Qualcomm is making some progress: Tencent, Zerotech, Pegatron, Nine Eagles, and Sunly have announced plans to build drones on the Snapdragon Flight chips-and-software platform. Those aren't household names, but the business is wide open. "There aren't any dominant chipmakers in the drone market, as it's still very fragmented," says Gartner analyst Mark Hung.
Part of Qualcomm's pitch is that the same Snapdragon capabilities can serve many types of products. The Snapdragon VR820, Qualcomm's prototype VR headset, is powered by a built-in 820 chip. That makes it self-contained, in contrast to headsets that rely on a tethered computer, like Facebook's Oculus Rift and the HTC Vive, and those that make you snap in a smartphone, including the Samsung Gear VR and Google Daydream View.
Qualcomm's prototype VR headset
With a camera on the front of the VR820 headset, the same image recognition that a drone uses to spot and avoid obstacles can also reference nearby objects to figure out where someone wearing the headset is and how far they move. The technology can also recognize and transpose real-world hand movements into the virtual world. Trying it out, I could not only look up and down or side to side; I could also step toward or away from 3D characters, which appear closer or farther as I move, and look above or underneath them. Most other VR systems require external devices like infrared beacons around the room in order to track the wearer, and they require holding controllers to read hand movement.
As with drones, Qualcomm wants others to make their own headsets based on the VR820 design. Chinese companies Coocaa, Focalmax, Pico, and Whaley have announced plans to build VR820 headsets, all for the Chinese market.
Once again, Intel is right there. In August 2016, it showed off a very similar headset design called Project Alloy, including the same type of movement tracking. But Intel is a bit behind: It won't have the developer kits until the spring, and no one has committed to using the tech in consumer products. No matter how good the technology, both chipmakers will have a challenge breaking into an already crowded market.
Intel's Project Alloy headset
Qualcomm is jumping into a market that's in its infancy even compared to VR: mixed-reality glasses that superimpose a screen over the wearer's view of the world. San Francisco-based Osterhout Design Group will put the new Snapdragon 835 in its R-8 and R-9 "smartglasses." They promise to actually do what people expected of Google Glass—blend the real and online worlds together in one view.
Mollenkopf doesn't get overly exuberant about drones, VR, and other "high-complexity, smartphone-like" consumer gadgets, as he calls them. These are, "things that people believe generally will happen," he says. "They don't know when. They are interested in them. They're wondering whether it's going to be the new smartphone or the new iPod or whatever."
In more mature markets as well as emerging ones, Qualcomm is betting that ever more connected gadgets will require ever-more powerful processors. Take fitness trackers: The iconic Fitbits run on fairly low-end chips, called microcontrollers, typically made by STMicroelectronics. Qualcomm is an investor in Fitbit, though, and many other companies that it's banking will require more powerful chips. "We invest in companies that could be future partners or customers of Qualcomm. They don't have to use our silicon today," says Patrick Eggen, who manages the company's investment arm, Qualcomm Ventures, in the U.S. It's invested hundreds of millions of dollars (the company doesn't reveal specific numbers) in startups pushing technologies that Qualcomm wants to get into, including drones, virtual reality, augmented reality, medical devices, and even satellites.
Fitness trackers are getting more complex and resembling smartwatches, which have cellphone-like capabilities. (Polar's new fitness tracker, the M600, runs Google's Android Wear smartphone OS, though not on a Snapdragon chip.) "What started out as a simple job of tracking your steps…the expectation is increasing," says Talluri, mentioning features like touch screens. Qualcomm does provide Snapdragons to about a dozen smartwatches, including from Asus, Fossil, Huawei, LG, Michael Kors, and Samsung. All other brands are tiny compared to Apple's share of the market, though, and even the Apple Watch isn't an iPhone-like phenom.
Maybe Qualcomm's steepest uphill battle is for PCs—hardly machines of the future, but still a giant business. In December, Microsoft and Qualcomm announced a version of Windows that will work on the ARM-based chips that Qualcomm makes, and will be able to run all current Windows applications. (Microsoft's earlier attempt to put Windows on the ARM chips in some of its Surface tablets flopped because it couldn't run older apps.)
"If you're [a company] that makes a high-end smartphone, then you have the process and technology to manufacture a thin laptop," says Matt Grob, Qualcomm's CTO. Like Mollenkopf, Grob is a longtime Qualcomm engineer, with 25 years at the company and 59 patents. Stocky, with dark hair, he's very soft-spoken, sometimes nearly whispering. "You can think of it like a smartphone with a laptop-size battery… so the battery life will be tremendous," he says. No one has announced plans to build Qualcomm PCs, but Grob says to expect ultra-thin, low-cost laptops by the end of 2017.
Qualcomm is making the same kind of pitch for the server business—that its chips are smaller, cheaper, and more energy-efficient than Intel's. On the surface, Qualcomm's dream to push its incompatible chips into servers looks as fraught as Intel's attempt to get its incompatible chips into phones. "We got strong feedback five years ago to not try this," admits Grob. But a lot has changed, argues Gartner's Mark Hung. Internet giants like Google, Amazon, and Facebook are custom-building hardware and software for their server farms, and they might be up for trying new technologies, he says.
Starting from the smallest consumer gadgets, Qualcomm now wants to increase its stake in the biggest: cars. Modern cars are packed with sensors and processors, and NXP makes scores of them: antilock brake controllers, tire pressure sensors, temperature sensors, accelerometers, radio tuners, Ethernet switches, keyless entry systems, and a lot more. Chipmaker CSR, which Qualcomm picked up in 2015 for $2.4 billion, also makes automotive components like Bluetooth and GPS chips. They provide the foundation that Qualcomm can top off with a Snapdragon chip. "We're good at all the non-car pieces that are going into the car and really changing how the car is architected, but we're not good at the car pieces," says Mollenkopf.
Already, Qualcomm has sold over 340 million chips to over 20 carmakers, things like modems and other wireless components. It's still getting up to speed with smart cars, which started with "infotainment" systems. They power both navigation and entertainment features like streaming audio apps and Bluetooth connections to cellphones—platforms like Ford Sync, Apple Car Play, and Android Auto. Now smart cars are evolving into autonomous cars.
Nvidia, which crashed and burned trying to get into cellphones, has been a lot smarter with cars. Its Tegra chips—which, like Qualcomm's Snapdragons, incorporate ARM technology—power the infotainment systems in cars from Audi, BMW, and Honda. Its autonomous car "supercomputer," the Drive PX 2, was picked by Tesla, which will use it to control its self-driving cars in the future. At this year's CES, Nvidia announced deals to put Drive PX 2 in Audi cars starting in 2020 and to co-develop an AI-powered car with Mercedes-Benz.
As almost always, Intel is competing with Qualcomm here. Its Atom processors, which flopped in smartphones, are getting a second chance in car infotainment, already installed in 30 models. Intel also just announced its own autonomous car project, using both Atom and more powerful chips, called Intel GO. BMW is partnering with Intel on developing self-driving car tech, and the automaker strongly hinted that Intel GO will make its way into its iNEXT project for an electric, semi-autonomous car set to hit the road in 2021.
In San Diego, I saw some concept cars Qualcomm was getting ready to show off at CES in early January. The star would be a Maserati Quattroporte gutted and rebuilt with Qualcomm chips packed inside. Qualcomm's infotainment chip, the 602A, powers features like safety cameras, GPS, and voice commands. Bluetooth chips embedded throughout the car don't just connect riders' cellphones; together with microphones, they track who is in the car, and where. (Only the person in the driver's seat has full control through voice commands.)
The gutted interior of a Maserati being reconfigured as a tech show car.
Qualcomm doesn't have a deal with Maserati; it just bought a car and tricked it out, including reverse-engineering Maserati's engine computer system—showing what it could do for companies if it can convince them to pair up. (It did similar with a Cadillac.) That is starting to happen. Audi's 2017 cars will run on Snapdragons, and at CES, Qualcomm announced a similar deal for Volkswagens starting in 2019.
Automotive is another example of the hopeful, long-game approach. So far, Qualcomm barely registers in the autonomous-car market, but Qualcomm Ventures has been investing in companies that it hopes will build that market. One of them is Cruise, a San Francisco startup that makes sensors for autonomous cars. GM bought Cruise for about $1 billion in 2016 and is using the tech on the Chevy Bolt autonomous cars it's testing on the streets of San Francisco. Qualcomm is starting a research program in Germany that could develop technologies for autonomous cars, but it's far from having a platform as Intel and Nvidia do.
Qualcomm has been building the artificial intelligence it will need for self-driving cars, drones, and other futuristic machines. In 2016, it added to its Snapdragon 820 smartphone chip a neural network capability called Zeroth, a name inspired by Isaac Asimov's robot laws. After the science-fiction legend created his first, second, and third laws about how robots should behave, he added a new law, called the Zeroth, to precede them all—that a robot may not harm humanity. "We found that no one had trademarked it or even knew what it was. It was perfect!" says Grob. Qualcomm later decided the term was a bit esoteric, though, and it settled on the sedate "Qualcomm Machine Learning Platform."
Wireless is where Qualcomm made its fortune. And no matter which new tech categories matter most in the future, it will remain mission-critical for Qualcomm. The company got lucky with its first invention, called code division multiple access—CDMA. The technology allows cellphone towers to transmit multiple calls at once by assigning each call its own encryption code. The phones on the other end decrypt only the data packets meant for their call. CDMA challenged the prevailing technology, called GSM, which instead divided calls by assigning bits of each one into tiny time slots. Most of the world stayed with GSM, in part because it was a free, open standard. Qualcomm owned CDMA technology and charged licensing fees. But Sprint, Verizon, and a smattering of other companies around the world opted for CDMA, and Qualcomm got rich on the fees.
An early prototype CDMA phone
Qualcomm then bought up rights to a technology called OFDM that formed the basis of 4G wireless (and will for 5G, too), and the world paid Qualcomm licensing fees. LTE has come very far since it was introduced with a maximum speed of about 12Mbps back in 2010. As speeds grew, so did the name; the latest version, called LTE Advanced Pro, will have a top speed just shy of a gigabit per second and be in Qualcomm's new Snapdragon 835 and its platform for smart cars.
Many of the tricks that went into that speed explosion, like combining five or more signals to carry more data, will be the foundation of 5G. "It's still based on OFDM. Patent-wise, Qualcomm…is still a significant player," says Akshay Sharma, who tracks wireless tech for Gartner.
5G's final form will come from collaborations between many companies in an international standards body (called 3GPP). But Qualcomm is trying to assure a big role through facts on the ground. In October, it came out with the first 5G chip, the X50 modem, even though the standard won't be fully baked till likely some time in 2018. The X50 is designed for trials, so gadget makers and networks can get a sense of which technology ideas work and which ones don't. In the process, they will get used to Qualcomm's 5G technologies—maybe improving the chances that its royalty-earning technologies make it into the 5G standard. Guess who's right behind? Intel, which launched its own chip, simply called "5G Modem," at CES, saying it will be ready for tests in late 2017.
Qualcomm's plans go above the atmosphere to OneWeb, a project to blanket the Earth with internet access using a fleet of 648 small, mass-produced satellites. Paul Jacobs, Qualcomm's chairman and Mollenkopf's predecessor as CEO, serves on the OneWeb board along with Richard Branson and tech captains like Airbus CEO Thomas Enders and SoftBank chairman Ronald Fisher. "It's one of our bigger projects," says Grob.
Qualcomm's cellular modems will be in the solar-powered ground stations that connect to the satellites and link in devices on the ground through Wi-Fi and small cellular networks. Qualcomm also designed the antenna systems throughout, from base stations to satellites, and its modems will likely be in the second-generation of spacecraft, says OneWeb. The satellites, expected to launch beginning in 2018, will also provide internet connections to planes, cars, and ships. Altogether, OneWeb could potentially bring Qualcomm billions of new customers.
However all its plans turn out, Qualcomm has already succeeded at one thing: being really ambitious. Some schemes, such as getting into mobile gear like VR headsets, seem like a natural expansion from phones. Others, like tangling with Intel on PCs and servers, seem almost cheeky. But being cheeky has served Qualcomm well in the past.
In 1993, the company, which at the time made satellite-connected text-messaging machines for truckers, crashed the cellphone party. A novice in the burgeoning field, it had the hubris to say that its new technology, incompatible with everyone else's, was better and that people should pay extra to license it. Enough companies did. Now Qualcomm is a giant in 4G, and its prospects for 5G are strong.
Qualcomm's first product, a satellite-based communications system for truckers
In 2007, when Snapdragon debuted, Qualcomm was a nobody in the phone processor business. "I can remember sitting back in the mid-2000s timeframe and people said, "Yeah, you're good at the modem but you'll never, ever have a position in the smartphone,' because smartphones are all about—just name your technology—it's about CPU, it's about GPU, it's multimedia," says Mollenkopf. "We're number one in all those things today."
Being daring also means making mistakes. One of them was Mirasol, an almost-impossible-to-explain display technology that promised LCD-like color image quality with E Ink-like power savings. (Pixels reflect ambient light and use power only when the image changes, instead of constantly refreshing, as LCDs, OLEDs, and other displays do.) Despite the promise, Mirasol never made it.
The late, lamented Toq watch
Qualcomm tried to keep Mirasol alive by using it in its own smartwatch brand, called Toq. Introduced in 2013, Toq never caught on, either. "It was so cool we maybe made a mistake and decided to sell it commercially, and it was not a good idea," says Jim Merrick, the director of marketing. "We don't make commercial products."
With Mirasol, Qualcomm also broke with tradition by having its own factory, a Taiwan facility it sold in 2014. It didn't sell the technology, though. (Reports say that Apple is now developing display technology at the factory.)
In all my conversations with people at Qualcomm, they didn't shy away from admitting to failures—neither getting defensive nor wallowing in mea culpas. "Qualcomm doesn't get real amped up in the high points. It doesn't get real low in the low points," Mollenkopf says.
Qualcomm's low-key leadership over the years isn't a sign of timidity. As engineers, Mollenkopf, Grob, and their predecessors have the kind of quiet confidence from looking at the problem and doing the math. Sometimes that means admitting that the numbers don't add up. "We have the ability to change ourselves when we need to change ourselves, and a track record of doing it," says Mollenkopf.
The head of research and development for Google's Jigsaw division explains how to succeed when your mission gets complicated.
As a core member of Google's Jigsaw division, Yasmin Green is using technology to tackle online extremism. Jigsaw is identifying people vulnerable to recruitment by ISIS and other groups and trying to de-radicalize them through targeted online content—a challenge that requires persistence and empathy.
When Jigsaw (then called Google Ideas) launched in 2010, it faced skepticism. "It was difficult to get anyone to take you seriously when you said the internet had anything to do with violent extremism," Green said at the Fast Company Innovation Festival in November. "Now the pendulum has swung so far the other way, there's hysteria that the internet is the root of extremism. And neither of those is the case."
If you truly believe that what you're doing matters, push yourself as much as you can. "Give a damn about the people who work with you and give a damn about the people you serve. How do you show you care? Time. Spend time understanding others' needs. Provide and solicit feedback."
To more effectively counteract propaganda, Green and her team are trying to understand why people might be drawn to extremist ideologies in the first place. "I went to Iraq and Europe to interview defectors from ISIS. I wanted to hear about the human experience of radicalization—and get former loyalists' input on designing a solution. [It's easy to] think anyone who decides to join must be a psychopath or a despicable person," she says, but some ISIS recruits are lured by false promises rather than being attracted to violence. "This is an access-to-information problem. They are making bad decisions based on bad, partial information."
