Thursday, May 2, 2019

Inside Ikea's Startup Bootcamp - Fortune

Inside Ikea's Startup Bootcamp - Fortune


Inside Ikea's Startup Bootcamp - Fortune

Posted: 02 May 2019 03:21 AM PDT

Sankarshan Murthy sinks into a sofa at Ikea's conference center in the sleepy town of Almhult in southern Sweden. The former Tesla Inc. and Apple Inc. engineer is jetlagged after flying from San Francisco to make a pitch for his startup, BumbleBee Spaces, which has developed a robotic system to maximize space in small apartments by hoisting beds and other furniture to the ceiling when not in use.

BumbleBee was one of 18 companies invited by Ikea for a "startup boot camp" in late March, following a selection process that drew more than 1,100 entries worldwide. The program is part of an effort by the world's No. 1 furniture retailer to attract a new generation of shoppers.

Murthy's robotic furniture includes sensors that can help users locate, say, a tennis racket stashed in the back of a cupboard, or put a pair of running shoes near the front door for a morning jog — all at the touch of a button or a voice command.

"It's like having an AI butler," said Murthy, who said he drew inspiration from classic Disney cartoons featuring robotic arms and other futuristic devices.

That's a big leap from the no-frills, flat-pack furniture traditionally sold in Ikea stores. And it doesn't come cheap. BumbleBee's bedroom system, installed in three apartment complexes in California and Washington, costs about $6,000 per room.

Ikea, though, needs to freshen its appeal to under-30 customers, raised in the sharing economy, who often care less about ownership than about the experience that a product or service can deliver. And their limited living spaces mean they need less furniture.

"We're in the middle of a retail revolution, where people are moving seamlessly between the physical and digital world," said Per Krokstade, the manager of Ikea's boot camp. "Everybody wants smarter solutions and more convenience than before."

Ikea isn't the only retailer joining forces with startups. Walmart Inc. has a Silicon Valley incubator that's backing ventures such as Jetblack, a concierge shopping service for upscale city dwellers, and Spatialand, which creates virtual-reality entertainment to plug merchandise sold in the U.S. company's stores.

The challenge is especially urgent for Ikea, which has a younger customer base than most other big-box retailers do.

"It's a generational difference," said Ray Gaul, senior vice president of research and analytics at Kantar Consulting. "Ikea has woken up to the fact they can't deny this anymore and have to change with the culture."

The bootcamp is one way Ikea is trying to move beyond its trademark flat-pack furniture. (Photo by John Moore/Getty Images)

Ikea has already acquired TaskRabbit, a San Francisco-based startup that dispatches workers to assemble furniture in customers' homes. And it's about to finish a prototype for a high-tech table that can brighten or dim room lighting with a sweep of the hand across the tabletop. The technology uses electrodes covered with an electrically conductive paint developed by Bare Conductive, a London-based startup that took part in Ikea's first boot camp in 2018.

This year's participants included Copenhagen-based Freemi, whose co-founders Rasmus Thude and Jamie Neubert Pedersen have developed an app to help people give away their old furniture and other possessions. "People, especially the younger generation, are fed up with our throwaway culture," Thude said. The service, currently offered in Denmark and the Netherlands, ties into Ikea's goal of reducing waste.

In parallel, Ikea has launched a furniture-leasing program that it plans to expand to 30 markets in Europe in the next year. Customers who subscribe to the service can get either new or used items that the retailer takes back at the end of the lease.

Other startups Ikea is considering include San Francisco-based Jido Maps, which makes augmented-reality software that lets users save and recover digital objects from one session to the next; London-based Skipping Rocks Lab, which has developed edible food containers made from seaweed that could be used in Ikea's cafeterias; and Copenhagen-based Flow Loop, which recycles and purifies water in the shower.

For entrepreneurs such as Murthy, a chance to partner with a company that sells $44 billion worth of goods a year is worth a bit of jet lag. Ikea, in turn, wants startups to see the retailer as "a natural partner," Krokstade said. "When they have made an innovation they should come to Ikea and say 'Hey, look what we have done. Can we co-create with you?'"

It's Put Up or Shut Up Time for Silicon Valley's Fake-Meat Startups - Mother Jones

Posted: 02 May 2019 03:00 AM PDT

LauriPatterson/Getty

UPDATE (5/2/2019): Apparently, stock market investors love fake meat as much as their venture capital peers do. Beyond Meat's share price surged a startling 163 percent after its initial public offering Thursday morning. That jump marks the "best debut session of any US listing since at least 2008 among IPOs that raised at least $200 million," reports Bloomberg. Its valuation reached $3.8 billion.  

The push to disrupt the $270 billion US meat industry with legume-based analogues kicked into overdrive this week.

Los Angeles–based company Beyond Meat—originally funded by Bill Gates, two Twitter co-founders, and venture capital giant Kleiner Perkins—is taking its stock public as early as Thursday, hoping to raise $241 million in its initial public offering. If shares reach Beyond's price target of $25, the faux-meat maker will be worth a cool $1.5 billion, Bloomberg reports. That would be quite a valuation for a company that lost $29.9 million last year on revenues of just $87.9 million, as reported in its prospectus filed with the Securities and Exchange Commission.  

Not to be overshadowed by a splashy IPO, its rival, Silicon Valley–based Impossible Foods—originally funded by Gates, Google Ventures, and VC giant Khosla Ventures—announced that fast-food giant Burger King would trial meatless Impossible Whoppers at all of its 7,300 nationwide outlets by year's end, after an apparently successful test run in St. Louis starting April 1.

To top it off, Impossible was the topic of media stories heralding a phenomenon that any food startup would yearn for: a shortage based on surging demand. On Monday, Eater warned of a shortfall of Impossible Burgers in New York City. No doubt to the delight of Impossible management, the article quotes the manager of one small New York chain that switched to Beyond Meat's burger product to ride out the Impossible shortfall. "A number of people" came in specifically for an Impossible Burger, the manager told Eater. "When informed of the Beyond Meat replacement, they turned around and left." Ouch. 

And in a Wednesday CNN report, an Impossible exec said demand for the burger in the 7,000 restaurants it currently supplies has more than doubled, though he didn't give a time frame. The company is "not sparing any expense" to keep up with demand, the exec told CNN, adding—shoutout to VC investors—"we absolutely will continue fundraising" to increase its capacity. 

Taken together, Beyond's IPO and Impossible's Burger King big week spell a turning point for an idea that has been nurtured by years of media and early-stage investor love: Vegetarian staples like peas and soybeans can be tweaked to precisely mimic meat, using just a dash of technology (in the case of Impossible, genetic engineering). 

But unlike journalists and VC visionaries, stock market investors and Burger King customers won't necessarily be wooed by celebrity chef testimonials or claims of environmental sustainability. Wall Street will demand that Beyond Meat scale up fast and (eventually) turn a profit. That could be difficult. In its IPO prospectus—by law a brutally honest document, where companies spell out risks to potential investors—Beyond Meat states: "We incur significant expenses in developing our innovative products, building out our manufacturing facilities, obtaining and storing ingredients and other products and marketing the products we offer." As a result, "we may not be able to achieve or sustain profitability, and we may incur significant losses for the foreseeable future." 

As for Impossible's Burger King deal, it's good to remember that mega fast-food chains roll out and drop new products all the time, in an endless quest for the next blockbuster. Even as it plans to offer Impossible Whoppers nationwide in the coming months, BK is also betting that its core fans will continue gobbling up animal products. Its current new menu items includes the Angry Whopper (a bacon cheeseburger goosed with jalapeƱos and onion rings) and Bacon Cheesy Tots

Other, much smaller chains like Carl's Jr. and White Castle have successfully added Beyond and Impossible burger analogues to their menus, respectively. The nationwide Burger King deal will be a test of whether these upstart vegetable-protein purveyors can supply mega-chains in a way that both entices their meat-eating clientele and delivers the goods for investors—who will soon be hungry for profit. 

What The Government Can Teach Startups About Hiring For Diversity - Crunchbase News

Posted: 02 May 2019 06:30 AM PDT

Sherika Ekpo isn't phased by the challenges tech faces with diversity and inclusion. These issues are not unique for someone whose everyday includes 238 years of our country's history.

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Ekpo is the diversity director at the United States Digital Service (USDS), a government team tasked with integrating tech into the notoriously stodgy and formal U.S. government. Nicknamed the "government startup", they told Crunchbase News that 60 percent of its leadership team identifies as female, and roughly 25 percent of their leadership team is a minority. Approximately 27 percent of its staff, which is comprised of around 170 employees, is a minority.

It's quite an image: a government agency, operating during the Trump administration, that has to hire talent willing to take a pay cut and move across the country, is doing better at hiring diverse candidates than many tech startups.

And for those running said startups, Ekpo has some advice: keep it "old school" and do the work.

That means going behind the careers page and meeting candidates in person, going to events that are hosted and attended by those that have been historically ignored, and asking to tap into networks.

"Once you get people in the door, you have to create communities for them to stay." —Sherika Ekpo

For USDS that means Slack groups, events that aren't just happy hours, and community health surveys.

USDS isn't immune from diversity issues, however. Ekpo explained that while the numbers are great, "if you dissect the space, we are lacking in representation of women and people of color in the engineering (team)." To expose these gaps, she says they're open about diversity statistics. First, they share to a small group of internal audiences, next to the entire organization, and finally more openly to the general public.

Some important context here is that scaling, a pressure startups face nonstop, is a mountain that USDS doesn't have to face. This is to the relief of Matt Cutts USDS's administrator and the former head of spam at Google, who admitted that while scaling is exciting, growing pains are real.

"If you hire the wrong people, they can do a lot of damage, burn bridges, and turn people off of a specific approach for 5 to 10 years," Cutts told us last month.

The organization hovers around 170-190 employees and plans to stay that way. Plus, by design, there's a fast turnaround in new hires (most employees stay for about 16 to 19 months).

Pivoting to a tech company that is under pressure to expand, take Jellyvision, a benefits communications platform that says a hybrid of both technology and "old school" relationships works.

The Chicago company has grown from 65 to 400 employees in the past five years, and it maintains a 50-50 split in terms of gender diversity, from entry-level employees to the C-suite. The company still struggles with diversity in race: it doesn't have any people of color in leadership roles in the C-suite currently, said Hibben Rothschild, an HR manager at the company.

As the company grows it's added technology into the equation: Jellyvision is switching its applicant tracking system to help automate the identity enactment process. This started from an informal effort by Jellyvision's hiring managers who were already using blind hiring to bring on new employees.

Formalizing these initiatives, according to Rothschild, should "help everyone continue to push [diversity] forward, but quickly."

But what if you're a big bay area tech company and have tens of thousands of people? Along with creative initiatives, flashy budgets, these companies could probably use the advice of people doing hiring right, especially under the rigorous standards of government agencies.

Ekpo was recently plucked from USDS to lead diversity efforts at Google, where she says she'll bring her perspective on making products that represent and cater to the American people. First up on her to-do list? Be open about diversity and inclusion statistics, both internally and externally. She has the startup experience to prove it works.

Illustration: Li-Anne Dias

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Startup Bahrain builds bridges - Hurriyet Daily News

Posted: 02 May 2019 04:34 AM PDT

This year, 130,000 startups applied to pitch at the 11th Startup Turkey Conference. Out of the applicants, 100 startups from 65 countries were selected to be present and pitch at the event. After the final pitches, the jury members evaluated the presentations and chose four winning startups, which are:

Ali Huda is a video on-demand platform, named Millions of Muslims, for Muslim parents who struggle to provide wholesome entertainment for their children who don't compromise Islamic values.

TemanBisnes uses a range of technologies to provide financial management solutions to companies.

Wayakit gets rid of cloth stains and unpleasant smells for people on the go.

Dine & Pay enables customers to pay their restaurant bill securely without waiting for a waiter or attendant.

As you can understand from the winners, Startup Turkey has really became a regional power. This year it had two international sponsors: Estonia and Startup Bahrain.

I had the opportunity to meet the delegation from Bahrain, and I can say that they are really looking forward to cooperating with Turkish startups. They are very keen on learning about the startup ecosystem in this country.

Ahead of Startup Turkey in Istanbul, Bahrain Economic Development Board (EDB) announced a fast track setup process for Turkish startups that will allow them access to and benefit from the startup ecosystem in Bahrain. The fast track setup process will enable Turkish startups to enter Bahrain and the broader GCC markets.

The fast track setup process will be delivered through a dedicated concierge service that will include:

A fast-tracked entry process which will cover residency, visa requirements and business registration

Access to grants and financial support from Bahrain based ecosystem agencies

Guidance to benefit from the incubators and accelerators in Bahrain

Additionally, the Bahrain-based accelerators and incubators and co-working spaces will offer access to their programs and networks for the Turkish startup community, to help firms build the connections they need to grow and expand.

Ms. Pakiza Abdulrahman, Manager of Business Development - Startups at Bahrain EDB says that living in Bahrain is around 30 percent cheaper than the rest of the region. She also says that Bahrain is a fast-growing and highly-connected regional pro-startups hub with easy access to neighboring countries including Saudi Arabia, the biggest market in the region.  Bahrain offers an excellent location and supportive startup ecosystem to enable technology startups to test, innovate and scale quickly.

I urge Turkish startups to explore this opportunity.

Startup, Bahrain, Ersu Ablak

The One Thing VCs Think Startups Need To Succeed - Forbes

Posted: 01 May 2019 07:42 AM PDT

Leadership development sessions, like this one at RRE LEAD, can help startups scale.

RRE Ventures

One principle startups and venture capitalists can agree on is that the people on your team will make or break your business. The common denominator for any successful company, regardless of industry or size, is that its leadership teams are able to attract and retain the best talent. While most CEOs and founders will tell you that people are their most important asset, a majority of them feel like they don't have enough hours in their days to address the need in their organizations for talent development at scale. Traditionally, VCs and platform teams have helped their portfolio companies attract the best talent by providing recruiting and hiring support, but recently, some VCs have also started to help their companies on the development and retention front. Many are now offering ongoing training, coaching, and proactive solutions to address the common leadership and management challenges that occur frequently as startups scale.

Startups by definition tend to offer interesting on-the-job opportunities for leadership development, but they don't often invest in more formal activities to provide real-time feedback, development opportunities, and training.  This is especially true at the earliest stages of a company. Many startups begin to focus on talent development at some point of scale, but don't make the time to address it in the earliest growth phases of the company.

It's not unusual for competent people to get promoted quickly based on their ability to perform effectively as an individual contributor.  Often, they're given a team to lead and bigger goals to hit.  But skill sets that the best managers and leaders possess  – giving constructive feedback, having tough conversations, creating personalized development plans for their individual team members, creating psychologically safe environments where people feel empowered to do their best work - are very hard to acquire intuitively.

This helps us see the case for investing resources in existing talent rather than solely focusing on recruiting: it's far more logical to keep and develop the talent you already have. Some studies suggest that replacing an employee costs about 15 times that employee's base salary—so by holding onto their best employees, startups can avoid the cost of high turnover and funnel that capital elsewhere. Perhaps more importantly, it saves them a tremendous amount of time in hiring and onboarding new employees. Startups are running at such high growth velocities that finding ways to keep them from slowing down is one of the most valuable things investors can do.

This is not to say that helping portfolio companies hire the best talent is not valuable, but it can be difficult to scale across a large or wide portfolio since venture funds aren't necessarily set up to recruit at scale any better than a great recruiting firm or the startup itself.  The best approach for VCs to help with recruiting seems to be one where senior talent professionals on staff can spend meaningful time and embed themselves deeply with a few companies. This is the case at Lerer Hippeau, Primary Ventures, HomeBrew, Lightspeed Venture Partners, and others, where the firms typically help more by sharing best-practices on hiring and recruiting and helping portfolio companies refine their hiring strategy and processes. "We have a strong belief that founders who prioritize aligning people strategy with business strategy from the get-go increase their likelihood of success long-term. It's never too early to invest in those behaviors and our job is to help you approach hiring with great care and intention," says Cat Hernandez, Operating Partner at Primary Ventures.

So how else can VCs help their portfolios engage in leadership development?

Executive coaching is gaining traction as a way that many of our CEOs and founders focus on bettering themselves, and VCs are starting to offer these resources directly to their portfolio. With an increasingly open culture around mental and emotional health and wellness, more funds are trying to address unsustainable founder burnout. Some funds, like Human Ventures or Primary Ventures, have dedicated leadership development coaches on staff.

Our approach at RRE has been to make sure access to leadership development doesn't stop at the C-suite.  So we created a program from scratch, using executive coaches to deliver material tailored to startup leadership challenges. One curriculum is for CEOs / Founders and another covers management best practices for the VP/Director level within startups. We make the content personally relevant and start with an intensive day-long experience, as it's probably the only day out of the 365-day year that our teams get to invest in themselves and their leadership style. As our 150 participants have told us, for many it is their first time receiving formal management training. While the material itself is important, the value of sharing best practices among one's peer group has proven to be particularly powerful.

Founders also welcome having the opportunity to offer development opportunities to their team.  "As a small but growing company, we don't always have a quorum to provide formal programming.  I love that the people I send come back energized and inspired by their peers to be better leaders, and that I'm able to offer opportunities to keep my best talent engaged," said Sean Black, CEO of RRE portfolio company Knock.

Others have taken the approach of offering regular leadership trainings for first-time managers specifically. Union Square Ventures began offering cross-company management training opportunities in partnership with LifeLabs Learning for new managers and in just two years trained more than 250 people in their "USV Manager Bootcamp" program. "The feedback from this program has been off the charts," said USV Network GM, Bethany Crystal. "There's something so special about the opportunity to not only level up your own skills but to simultaneously form a peer cohort among other companies in the portfolio. This is one of the ways that we hope to bring 'big business benefits' to the startup world."

Regardless of the type of support VCs provide, hiring the right people and growing teams thoughtfully remains a top priority for any startup CEO you ask. Given that, we'll see it continue to be a top priority for VCs as well.

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