World Economic Forum, MENA at Marrakech, 2010

The World Economic Forum of the Middle East and North Africa was held this year in Marrakech, Morocco.

The main themes centered around Key Drivers for Development, Energy, and building up the middle classes - though the perennial problems of lack of education, lack of skilled labor, the gender gap,

lack of ability to implement innovation, and so on.

I spoke on the "Low Carbon or Low Cost" Panel at the WEF Forum and joined the 800 delegates attending from all the MENA countries and many other countries from around the world at this globally famous Forum. The event has expanded way beyond its original Davos routes.

Apparently, most Arab states seem to have emerged from the recent economic crisis in relatively good stead.  Yet for all the talk of opportunities in the MENA region, the Arab world is still grappling with a slew of age-old now, challenges - not least a huge increase in their young population coming into the work force ill-prepared for the work of 21st century workers. And more than 60% of the population of the MENA region, is below the age of 25.

There was general consensus that this conference was less well attended at top level than last year's in Jordan, because there were no high level Moroccan leaders present which caused a 'domino' effect in the region with no one sending their top leaders either , in consequence...

 

CarWoo! Closes Series A Funding

CarWoo!, a new service which launched today and will transform the way consumers buy cars, also just announced the closure of its Series A financing. Total funding received to date exceeds $6M.

The round was led by Interwest Partners with participation by Comcast Interactive Capital, Blumberg Capital, Accelerator Ventures, Raymond Tonsing and Dillon McDonald.  Previously the company had obtained seed financing upon completion of the Y Combinator program in late 2009. 

The seed financing was led by Comcast Interactive Capital with participation from Blumberg Capital, Accelerator Ventures and a number of angels and prominent individuals, including: Paul Buchheit - Early Google employee, created Gmail, founded Friendfeed; Joshua Schachter - Founder of Del.icio.us; Aydin Senkut - Felicis Ventures; Founders Fund Angel - Dave McClure.

While other internet services and properties have served to make large markets such as travel more efficient, the very large automotive industry has been a laggard in this area.  CarWoo! was created to bring internet efficiencies to the car buying and selling process. I wrote about the site launch earlier this morning and you can find out more at www.carwoo.com and on Twitter @carwoo.

Social Capital Markets Ahoy!

The Third Annual Social Capital Markets Conference (SOCAP10) will convene the social enterprise community after a milestone year that has included evidence of “an additional $120 billion in untapped resources for socially-minded companies, a proliferation of investment funds of $100 million each and a new index to help investors better target their financing”.

SOCAP10 starts tomorrow, Monday October 4-6, 2010 at San Francisco's Fort Mason Center and follows upon two highly successful SOCAP conferences in 2008 and 2009. 

    In the last two years, the world’s leading social innovators came to SOCAP and successfully defined the social enterprise landscape and validated the space.

There will be many different tracks and panels, including one on Social Enterprise in conflict zones such as the Middle East. 

This year, Kevin Jones and the 1000 investors, entrepreneurs, business leaders and foundations will help define “What’s next”! 

 

 

Strategies For Trust In The Financial Sector

For the latest issue of their journal, Argent, The Financial Services Forum asked us to share our thoughts on the challenges surrounding the financial services struggle to regain customer trust. Project Manager Catherine, comes from a strong background in the financial services so she jumped at the chance to talk to this shop.

She identified 3 key issues (and although one ran in the issue, the others have made for some LinkedIn discussions in the FS Forum group):

Customer service. Although the market has settled somewhat since the financial crisis, customers remain critical of the main financial providers. It isn’t just about how safe your money is – it takes all in areas of customer service that have continued to put off previously loyal customers; excessive bank charges, foreign call centres, closing of local branches. Providers now have to fight to win back their customers – even those who never actually left, but who have lost trust in their brand.

The emergence in the market of foreign and private banks. Some are as a result of direct takeovers, such as Santander, but others are less well know providers who, over the last two years, have entered the savings markets with top rates – enticing disgruntled customers of the UK banks. Whilst customers may have previously looked on a foreign bank as a risk, that risk perception became less so as UK banks started to struggle – and awareness of the deposit guarantee increased. In 2010, further providers will continue to enter the market, with good products and a promise to right the wrongs of established providers. This will add significantly to the pressure of UK marketing teams.

‘The internet has changed everything we do’. For many customers, and in particular gen y, the internet is a highly effective and low cost way of marketing financial products. In particular, the use of social media as a tool for good customer service is widely underused in this industry, but is an important growth area. Providers must not forget though, there are a significant amount of people for whom online security remains a worry when dealing with financial products – meaning traditional methods must also be incorporated. Banks should be looking at how they can educate their customers on the merits of online, as an added value service.

It’s a matter of working on the relationship with the customer to bring back the trust; build a relationship with the customer that gives them value which, ideally, they could only get from that relationship.

What do you think – how does a brand build trust?

Singularity University: Financing the Future

Singularity University, now in the middle of its second year of classes over the course of ten weeks in Silicon Valley, held a panel on Financing the Future last night at Kicklabs in SOMA.

Singularity University is an interdisciplinary university whose mission is to assemble, educate and inspire leaders who strive to understand and facilitate the development of exponentially advancing technologies in order to address humanity’s grand challenges. Singularity University hopes to stimulate groundbreaking, disruptive thinking and solutions aimed at solving some of the planet’s most pressing challenges.

Some observations from the panelists below, which included First Round Capital's Rob Hayes, Transmedia Capital's Michael Downing, David Rose with Rose Tech Ventures and Eghosa Omoigui, formerly with Intel Capital.

Eghosa Omoigui

"When you're thinking of funding sources, think about your options very broadly. Think of alternatives -- companies as well. It's easy to get enamored with a new technology, but you can't get too far from Economics 101. You must keep economics in mind all the way through. In green tech or biofuels, ask yourself, what does it substitute? What's the pay back? You have to have a multiplying effect on investment return - always think in the back of your mind - how will the economics work?"

"Think of investors who have the capacity to ride and take you through a lot of ups and downs. Look for people who understand they need to ride it out. Intel would invest in downside times when things are cheaper. There's one ting that is certain in my view - the cycles are becoming more and more compressed. It used to be 10-15 year cycles and now it's closer to 5-7 years. Where there's finance frenzy, it's easy to get out of control. Be very pragmatic how you build things out."

Rob Hayes

In advice to students on raising capital for longer term investment ideas, "Venture capitalists don't like to make investments with ten year returns - they want a return faster than that. If you have an idea that will take longer than ten years, you probably don't want to go through a VC."

On where the future of finance is going, "You're going to see lots of little opportunities to make money, which will create opportunities for smaller investors. Every time a bell rings, a seed fund is getting started."

"The permanent shift of what is happening is in information technology. You needed $5 million to start a company and now you can start a company on a weekend with a credit card."

"Look at restaurant deals versus a synthetic biology deals. The restaurant deal is cool; it's a 'feel good' investment and you can get side benefits versus something that will take a long time to get an exit, like a synthetic biology venture."

Michael Downing

In advice to students on raising capital for longer term investment ideas, "If you're working on something that will take longer than ten years to yield a return, venture capitalists tend not to want to look at those since it could involve $100 million and a long wait. If you have something that will change an industry 'forever' and if you want to do something that is a game changer, then you do have value in something that is that disruptive. If may not be clear how you'll be worth $100 million in a few years, but there is value in being a disruptor," or what he refers to as a "shift storm."

"To become more relevant, people are outsourcing more. Pharmaceutical and media industries are built on the outsource model now. Things have really changed - hedge funds, individuals, corporations, venture capitalists and more and more seed funds are now funding things - it's growing and making it so much easier for you to get your ideas funded."

David Rose

"You'll see a decentralization of money now and a move in this direction more and more. The role of the broker is changing. Levels are coming down....it is so much easier to start a company today. You'll see an explosion of individuals investing. What happens when you have millions of angels and thousands of seed funds? Then what?"

Economist Innovation Event: Financial Models, Broken or Not?

Team breakout sessions from this week's Economist & Berkeley Haas School of Business presented on-stage: innovative ideas around the areas of finance, new business models, education, healthcare, energy and sustainability.

Below is the idea presented on the new Innovative Financial Models that can also improve sustainability within organizations. Also refer to the more extensive summary of the event.

Hagel & Seely Brown on U.S. Economic Trends, Talent and Passion

Tuesday night at the San Francisco's Wharton School on Howard, Kevin Werbach moderated a discussion with John Hagel III and John Seely Brown about The Big Shift: measuring the forces of change.

In the Harvard Business Review this month, they wrote an article explaining what these forces of change are and mean for the U.S. economy.

"During a steep recession, managers obsess over short-term performance goals, such as cost cutting, sales, and market share growth....the problem is, focusing only on traditional metrics often masks long-term forces of change that undercut normal sources of economic value."

They assert that "normal" may be a thing of the past and that after the economy starts booming again, the pressure will continue.

They just completed the 2009 Shift Index, which measures the forces of long-term change. The conversation revolved around their findings which was published in this shift index, apparently the first of many to come.

While this research focused on the U.S. economy and trends of publicly traded companies, they hope to take this global in the future.

The report focuses on the U.S. economy over a long period of time. One outcome is to demonstrate the trends over decades to see what we can learn about corporate, economic and individual behavior.

So, what did they learn? Hagel who drove most of the discussion reports that the return on assets is the best measure over time....beyond income statements.

From 1965 to 2008, the long term trend shows that asset profitability has gone down by 75%. Over the same period, labor productivity has gone up, so why are companies not seeing the rewards of that productivity?

Hagel says, "Business is broken. Most executives don't look at economic trends over a forty year period. Our findings show that public companies in the U.S. have experienced deteriorating performance over time."

Brown adds, "In 1937 in the height of the depression, if you made it on the S&P 500, you stayed there on average of 75 years. We've seen an 80% decrease in the duration of how long you can expect to stay on the S&P 500 today."

He also says that companies have become obsessed with managing stocks. "In this world of flow, how do you move from scalable efficiency to scalable learning -- within firms, across firms, across ecosystems?"

So, what are we going to do as a nation of entrepreneurs and innovators to get the performance up and change this trend of decline?

Could this also be the death of branding? Manufacturing is getting outsourced oversees and companies are getting less of a premium for their brand than they've ever gotten in the past.

Companies are still spending money on branding but they're doing it poorly. It's harder to rise above the noise because there's so much of it yet it's cheaper than ever been to have a voice.

Hagel repeats, "Business is broken." It's not as if one industry pulled down another - all of them declined over the 43 year period.

Brown talks about knowledge - passive verus active knowledge. He suggests that more knowledge is passive today and that we don't know a lot about passive knowledge flow. He asks, "how do we surface all of these social networks?" Surfacing them alone however is not where the magic is.

Surfacing them is one thing, invoking passion in individuals and employees is another layer. In the report, they actually have a passion index. I had to laugh. Now we're measuring passion - what's next, love and appetite?

Passion of course is an important factor in knowledge and participation flow. Bottom line: we have to make our passions our professions in order to turn this Index around.

This isn't new advice. If I remember correctly, Sesame Street told me to go that route in the early seventies. It's really the only authentic way to live. It's the thing that will create more happiness and fulfillment in our lives than any other choice we can make.

That said, not everyone is comfortable with stepping outside the comfortable corporate mold and that's why while self employment in this country is exploding, it will never be the path for everyone. And because it will never be for everyone, we need to revitalize business and passion inside its walls.

We need to allow people's passion to flow in large organizations. We need to remind them they all have value, they all have knowledge and they're not merely a link to another link to make the big guy at the top a profit. Everyone should be considered 'talent.'

Read what they have to say recently about "why we need big organizations."

Below is a shot I took of Hagel during a one-on-one chat before their talk.

The event pulled together an interesting mix of Silicon Valley industry talent across multiple sectors. Hellos and chats with @kwerb, @debs, @heysanford, @cathybrooks, @jhagel, @ahesse, @stoweboyd, @chrisheuer, @maryhodder, @hirshberg, @ccarfi, @map650, @rycaut, @davesifry, @elliottng and a handful others.

They hope to make the Shift Index an annual event. In November, they'll issue the same index broken out by industry so we can compare economic trends between healthcare and technology for example.

Wonga's Short Term Loan Solution

Wonga's CEO and Founder Errol Damelin talks to me about their short term lending solution.

Wonga, an Accel Partners funded company based in the UK, focuses on short term cash advances, which is also suitable for mobile. Over 100,000 loans have gone through their system already and it's growing.

People are using Wonga today to solve short-term cashflow problems. One of the things that is making people adopt it so quickly is that it's fast, easy, convenient and easy to use.

Within an hour, you can have short term cash in your hands and the whole application process only takes a few minutes. Tune in for more below.

How to Profit During These Tough Times

Tomorrow in Santa Clara, CA, how to profit during these tough times.

Bill Bartmann on the Online Passive Income Cheat Sheet, R.C. Peck, Angel Investing, Randy Williams The Connector, Larry Benet, How to Trade the Markets with Seshardri, Jeff Slayter and Kane Minkus on Negotiation Tactics they don't teach you at business school, and Jeffrey Lerman how to profit from today's economic challenges using other people's money.

It's an all day event and a minimal $19 for a day full of great discussions and tips around your money during less than ideal economic times.

Your Estate in Rough Times

Recently in the New York Times: Wealth Matters: Smaller Though It May Be, It's Time to Look at the Estate. Because of a sharp depreciation of assets in recent months, your will merits a review to make sure it accomplishes what you want.