Weekly Wrap #2: Transformation, Transparency and Trackies

Welcome to our Weekly Wrap, where we cut through the noise to bring you our favourite insights from the technology and startup world.

Big guns talk big transformation

Earlier this week, Satya Nadella (CEO of Microsoft) and Julie Sweet (CEO of Accenture) had a chat about the future of digital transformation. The video is a little self-serving and clearly a push for Microsoft Teams, video conferencing and Accenture… But around 2:42, Sweet shares two fundamental shifts she is currently witnessing with the way companies operate:

  1. Agility: Hierarchies and stale processes were cast aside as companies pivoted business models and took quick action to respond to the COVID-19 crisis. Now that leaders have seen their businesses move in a “much more agile fashion… [they] don’t want to go back”.

  2. Speed: Legacy systems and technical debt have always been excuses for transformation being slow and over budget. But we’ve recently seen that massive projects can been executed in days and weeks, not years - even across the slowest moving industries like health and government.

The best companies will retain and embrace these modes of operating (both elements of our Startup Mindset) as we move back to “normal”.

Now more than ever it's not the big that eat the small... it's the fast that eat the slow.

How a message is delivered matters

Airbnb’s revenues have taken a big hit as lockdown orders around the world stopped people from travelling. Last week, Brian Chesky (CEO at Airbnb) released a letter to employees outlining the economic state of Airbnb and announcing cuts to 25% of its staff (1,900 people).

The letter has garnered a lot of attention, with many praising Chesky for setting a new standard for approaching layoffs. Together with the letter, these are must-reads for any people leaders forced to make difficult announcements.

What makes the letter so great and what can we learn about communicating in a crisis? We can’t do that full justice in a weekly wrap, but here’s a snapshot:

  1. Provide clarity and certainty about everything within your control. What is happening, why it’s happening, the decision-making process, what comes next, and when people will hear more.

  2. Address people as humans - with respect, courtesy and empathy. In the context of redundancies, it is essential that you remind people they are valued, and that they should not blame themselves.

    “To those of you staying… One of the most important ways we can honor those who are leaving is for them to know that their contributions mattered, and that they will always be part of Airbnb’s story.”

    “these decisions are not a reflection of the work from people on these teams.”

  3. Feel what it is like to be in their shoes and do everything within your power to help them. Airbnb are giving departing people stock options, providing HR resource to help find jobs, promoting them via a public departing employee directory, and they are allowing people to keep their company-issued laptops because “a computer is an important tool to find new work”.

Even if you are in the fortunate position to not reduce your team, this remains a powerful reminder about the need for empathy and compassion in our professional lives.

Battle of the go-to-market: Comfy pants edition

On Tuesday, Twitter announced that it will roll out a permanent WFH model. From The Atlantic to Warren Buffet ($), everyone agrees that the future of work will be forever changed. That means video conferencing and comfy pants are here to stay.

So who’s winning the battle of the video conferencing market? Will quality stand alone solutions like Zoom be over taken as Microsoft, Cisco and Google leverage their distribution power?

Here’s our mini analysis + a short history lesson:

  1. Zoom: The team at Zoom have nailed their stand alone solution. Eric Yuan left Cisco WebEx in 2011 (taking more than 35 other WebEx engineers with him) to found Zoom after being frustrated that Cisco wasn’t moving fast enough. The team have one focus: build one great video conferencing product. Zoom’s GTM approach hasn’t really changed since its launch in 2013 and it is a great example of the freemium model done well. Freemium works for Zoom because it is an exceptional, viral product. As a result, Zoom has become a verb used in households worldwide - “let’s Zoom”.

    April numbers: 300+ million daily meeting participants - a huge jump from 10 million back in December (also increasing Eric Yuan’s net worth by over $4B).

  2. Cisco WebEx: Cisco is one of the OGs (original gangsters) in video conferencing technology. It’s unlikely you would have tried WebEx recently unless you work in/with government, big corporate and North America, where Cisco dominates. Like the other two contenders below, Cisco uses its diversified product offering and distribution to lure customers onto WebEx. According to Cisco’s SVP of collaboration, Cisco don’t “care about the [WebEx] conversion rate at all”, as the bulk of their revenue comes from data centre equipment. Despite this flippant comment about a multi-billion dollar market, he also says WebEx are smashing all the ‘AU’ (active user) metrics - “Our MAU, WAU, DAU - right now it is all-time highs”. Woow. Time for some media training at Cisco?

    April numbers: Hosted 20 Billion minutes for more than 300 million users.

  3. Microsoft Teams: Based on our experience, Microsoft Teams video conferencing is average compared to Zoom, just like its Chat is average compared to Slack. However, Microsoft has been very smart leveraging its distribution power to catch up to Zoom and surpass Slack. Team’s growth has been off the charts as they aggressively push companies to use Teams as part of Microsoft 365 subscriptions. Teams has every tool a business needs to collaborate and, although none are best-in-class, that’s clearly an appealing proposition for those in the 365 camp. Kudos to Microsoft for a brilliant execution of a distribution marketing strategy.

    April numbers: 200+ million participants in a single day.

  4. Google Meet: Transport yourself back in time to Google in 2011. Amongst a couple of questionable moves like launching Google+ (social network) and buying Motorola for $12.5B (later selling it for $2.9B), you’ll find that Google Hangouts had one of the best quality video conferencing products out there. With a strong Gmail and Gsuite following, Google had EVERY opportunity to hold and grow its position. But since then, Google’s video conferencing offering has been muddled, unstable and fragmented. Recently, Google has been trying to regain its title by making Google Meet front and centre in Gmail (finally), doubling down on feature upgrades and providing free access until the end of September. All a little too late? Even Google can’t be great at everything...

    April numbers: around 100 million daily participants.

And the winner is: Zoom (as long as they don’t get too comfy)

That’s a wrap! We hope you enjoyed it. Please share with your friends and reach out if you want to continue the conversation of any themes in this week’s wrap.

A quick note before we go…

Google has reported a 75% increase in searches relating to domestic violence services in Australia during COVID-19. Adore Beauty (Australia's first beauty e-commerce site) are donating 100% of sales from these $20 beauty kits to Safe Steps Family Violence. If you’re in Australia, buy a kit or two for yourself and/or the women in your life. Free shipping over $50. A wonderful initiative. [update: now sold out!]

The team at Ignition Lane

p.s. we love feedback - if you have any, please let us know