Exponential 25

www.skillbridge.co 

Exponential 

September 20 th , 2015 

The business & strategy press summarized and analyzed 

Image: Apple. 

“The Future of TV is Apps?” 

In this issue: 

• Are you Siri-us? Boom in voicerecognition 

predicted 

• Is 1099 the true code for our age? 

• Bloomberg faces fresh competition 

• The Global Round Up 

• 5 Business Must Reads in 30 seconds. 

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Exponential the Skillbridge Magazine 

The global round-up 

High-speed rail in US 

Brazil debt 

A joint venture between a 

consortium of Chinese rail firms 

and US company Xpress West will 

build a high speed rail line 

between Los Angeles and Las 

Vegas. Services will carry 

passengers between the cities in 

80 minutes, at speeds of up to 

150mph. Analyst Gary Wong 

estimates that the project is worth 

$5 billion and will bring little 

direct financial benefit to the 

Chinese firms. It will, however, 

offer them strong expansion 

opportunities. 

waklingsf via 

flickr 

Fresh from awarding Brazil's 

sovereign debt “junk” status a week 

ago, Standard & Poor's has 

downgraded numerous large 

Brazilian companies including 

several banks. Almost half a million 

jobs have been lost in the Brazilian 

economy since January. 

Researchers from Fundação Getulio 

Vargas predict that another 2.5 

million employees could be out of 

work by the end of 2016. The OECD 

predicts a 2.8% fall in GDP this year 

and 0.7% in 2016. 



Crackdown on Nigerian graft 

On Tuesday a deadline passed for 

all Nigerian government 

departments to ensure financial 

transactions pass through a single 

bank account. The account is being 

managed by Nigeria's central bank 

and commercial banks are 

estimated to lose out on $10 million 

as a result. President Buhari hopes 

the move will stem corruption by 

government officials which he 

estimates has amounted to $150 

billion over the past 10 years 

Shell in Australia 

Shell's planned $70 billion takeover 

of BG Group faces a roadblock as 

the Australian Competition and 

Consumer Commission says it will 

delay a decision until November 12. 

The Commission has received 

multiple messages of concern from 

businesses who argue that Shell 

might limit local supply in favor of 

lucrative exports of Liquefied 

Natural Gas (LNG) to Asia. 

Competition for Google in China 

Indian mobile advertising firm 

InMobi has announced that it is to 

partner Chinese Android software 

customisation start-up APUS. InMobi 

hopes that the tie-up will enable it to 

reach 500 million new users in China 

and elsewhere by 2016. InMobi, which 

became profitable in the last quarter 

of 2014 and already reaches 1.4 billion 

devices, competes with Google and 

Facebook in the $100 billion global 

mobile advertising market. The deal 

follows reports that Google is 

preparing to re-enter the Chinese 

market. 



Television’s App(le) 

Revolution 

• Americans currently consume most of their TV via apps – 30 mins a day more 

on apps than through traditional TV units. 

• Apple’s iOS platform has over 50% of the growth in App-based TV watching 

Mike Deer koski 

Apps instead of Channels? 

“Our vision for TV is simple, and perhaps a little provocative. 

We believe the future of television is apps” - Apple CEO Tim 

Cook. While the eyes of the media were focused on the launch 

of the new iPhone 6S, Apple's TV service, which Steve Jobs 

described as a hobby, has suddenly got serious, with a dedicated 

app store and a Siri-enabled remote to let users talk to their 

TVs. CEO of AMC Networks Josh Sapan declared the new 

Apple TV is “a little more exciting than terrifying but terrifying 

if you want to worry about it”. 



Has TV already gone app? 

Moving from a channel to an app-based model offers liberation 

from the traditional constraints of TV scheduling. In fact, users 

have already started the shift, analysis by Yahoo executive 

Simon Khalaf point to Americans on average spending 30 

minutes longer each day using apps than watching TV. Further, 

Apple is already showing healthy engagement in the space: Over 

the last 18 months, iOS devices have seen the greatest 

percentage growth in video streaming in the US – triple that of 

Android and other devices according to Strategy Analytics. 

Apple’s ecosystem enjoys a set of distinctive advantages over its 

internet TV only rivals especially when it comes to offering 

different formats like shopping apps and screening games sideby-side 

with TV shows. 

But it’s not just about technology, it’s about content too… 

For Apple TV to be a disruptive force, it needs access to 

content, and not just “partners that don’t threaten Apple’s own 

media business”, says the WSJ. Apple has been in discussion 

with the likes of NBC, CBS and Fox about bundling content 

into a streaming subscription service. Talks with prospective 

partners have been going on for years but have so far only 

secured a single tie-up with HBO. The networks need an 

incentive to break with practice in their profitable industry, 

and Apple needs to offer consumers an attractive deal in what 

is already becoming a crowded streaming market. Some say 

that even with a streaming deal, an Apple TV app would not be 

revolutionary because of the dominance of Netflix and wellestablished 

apps. 

What the brains think… 

Marcel Fenez of PwC lays down the challenge for Apple 

TV: "What matters is the ability to combine content with a user 

experience that's differentiated and compelling on the 

consumer's platform of choice". Asked which non-traditional 

broadcaster they would prefer to offer them access to video, 

Accenture survey participants in 2014 named Google, Apple and 

Samsung in that order. Meanwhile, Deutsche Bank analyst Bryan 

Craft thinks Apple TV could help networks like CBS because they 

will be "must haves" in its streaming bundles, and the result may 

be rising numbers of pay TV subscribers. 

Key Reading 

• WSJ:First Look: 

Apple TV heads in a 

new direction 

• FT:Apple TV wants 

viewers to change 

channel 

• WSJ:Apple plans 

web TV service in 

fall 

• Accenture:Bringing 

TV to life: Issue V 



Is 1099 the real code 

for our age? 

• The gig economy now accounts for a third of the American workforce. 

• By 2020 66m Americans are expected to be freelance or 1099 workers. 

The unstoppable rise of the gig economy 

53 million Americans, or 34% of the workforce, are now 1099 

workers. The category covers the full spectrum of freelancing, 

from independent contractors, to temps, and on to occasional 

moonlighters. The number of 1099 contractors is expected to 

grow by over 4% a year through 2020 to around 66 million 

people. The trend is driven by a combination of new technology 

and age-old incentives. Freelancers are cheaper for companies 

who cut down on payroll costs and benefit outlays, while 

workers are granted greater flexibility. A Roosevelt 

Institute/Kauffmann Foundation joint report argues that, by 

2040, the US economy will be "scarcely recognisable". 

: 



Does everyone really want the gig? 

The attractions of being a 1099 are by no means universal, 

due to the lack of job security and employment rights. 53% of 

people freelance by choice, 47% out of economic necessity. While 

many contractors revel in the flexibility and control freelancing 

can provide, others are increasingly keen to win employee status. 

Particularly in blue-collar segments a small, but growing number 

of Uber drivers and other 1099s working for Postmates, Lyft and 

Washio are fighting legal battles to be classified as employees and 

not contractors. House cleaning start-up, Homejoy, closed partly 

as a result of the weight of such lawsuits. The rise of the “gig 

economy” presents governments with serious problems. While 

entitlement systems are built around the conception of a fixed 

job, revenues from payroll taxes are set to fall sharply. 

Current legislation not designed for today’s economy 

A number of analysts believe that an urgent change in legislation 

is required with the introduction of an intermediate classification 

between “worker” and contractor”. Germany's "dependent 

contractor" status provides a model that combines protection 

with flexibility. Simon Rothman, an investor in delivery service 

platform Sprig, argues for the adoption of such a model. Noting 

that 38% of on-demand workers are signed up to multiple 

companies, he wants to see personalized healthcare travel with 

the employee. According to tech evangelist Tim O'Reilly, 

however, legal changes amount to little more than a sop. Reilly 

points out that companies who are nervous of legal action are 

already switching workers from 1099 to W2 tax codes and are 

capping employees' hours so they become part-time and do not 

receive benefits. "We've basically gutted wages for working 

people, and we're wondering what's happening", he says. 


In June, a McKinsey Global Institute Report suggested that 

online talent platforms - ranging from job sites like Monster.com, 

to digital marketplaces like TaskRabbit and talent management 

agencies such as PayScale and ReviewSnap - could boost global 

GDP by 2% or $2.7 trillion by 2025. Platforms could have the 

positive impact of increasing employment by 72 million full-time 

equivalents. The authors argue that a successful transition to the 

“gig economy” requires not only new labor market regulations, 

but also affordable broadband access for all and clearer rules in 

the thorny areas of data ownership and privacy. 

Key Reading 

• Economist: Part-time 

palaver 

• Business Insider: Tim 

O'Reilly: The argument 

over whether Uber 

should have contractors 

or employees is "fake" 

• FT:Employers tap "gig" 

economy in search of 

freelancers 

• McKinsey:Connecting 

talent with opportunity 

in the digital age 



Google, Facebook, Microsoft and 

Apple want you to talk. 

• Technology’s Giants are at war each competing for the prize of helping 

consumers with virtual assistants. 

• 38% of Americans use at least one of these services. 

Get ready for the “AI spring” 

: 

With the launch of Proactive Assistant as a feature of iOS 9, 

Apple is readying itself for what the FT has termed the “AI 

spring”. Google Now, Microsoft Cortana, Facebook M and 

Amazon Alexa are voice-activated virtual assistants, engaged in 

a heavy weight scramble. The competing services are based on 

advances in speech recognition and predictive technologies. 

Increasingly, they can offer users information before they have 

requested it. Some, like Microsoft’s Cortana assistant, ask 

users’ permission before volunteering their predictions. 



Voice recognition software shows rapid expansion 

What explains the sudden rush into AI? Firstly, the market is 

expanding rapidly. Research firm Gartner found that 38% of 

American consumers had used virtual-assistant services but 

estimates that two-thirds of consumers in developed markets will 

use them daily by the end of 2016. Digital assistants are a means 

for tech giants to showcase their technological brilliance with 

firms hoping they can tie loyal customers into revenuegenerating 

services. For Apple, this means repeat iPhone 

purchasers; for Google, it involves increasing user numbers for 

advertisers. The anticipatory power of the software paves the way 

for future “intelligent” products including smart watches and 

connected automobiles. 

The proxy war for future supremacy 

The competition for AI supremacy masks the much bigger battle 

over who wins market dominance in the next stage of the 

internet’s development. Predictive functions put the vigor back 

into search after Apps and strengthening offers from e-commerce 

sites have bypassed the need for it in many situations. There is a 

particular fight between Apple’s Siri and Google Now. Google sets 

its store by an open approach involving pervasive data trawling 

and targeted advertising - risking accusations of "creepiness". 

Apple is taking steps to safeguard user privacy, but it has less data 

on which to build useful predictions because most Apple services 

work only on Apple devices. In a world of siloed-off apps, all these 

services are competing to form deep links which can delve into 

apps for data. And each of them seeks to provide a single interface 

for users’ every engagement with retailers online. 


AI is likely to be key to future developments in the workplace. A 

2014 Accenture report forecast the rise of virtual digital 

assistants which will work in tandem with advanced robotic 

devices, 3D printers, wearables and collaboration software. 

Accenture predicts a reshaping of work practices "like never 

before” which will paradoxically “humanise” work. As for e- 

commerce, in January Gartner predicted that by the end of 2016, 

more than $2 billion in online shopping will be performed 

exclusively by mobile digital assistants. This equates to 2.5 

percent of mobile users entrusting assistants with $50 per year. 

Key Reading 

• Economist: The 

software secretaries 

• WSJ:Apple and 

Google know what 

you want before you 

do 

• FT:Artifical 

intelligence: a virtual 

assistant for life 

• FT:Apple and Google 

brew up battle over 

future of mobile 

devices 

• Accenture: 

Workforce of the 

Future 



Game of Thrones gets 

hearts beating 

Brandon Ballinger 

In Westeros they thought magic was gone from the 

world, but ex-Google employee Brandon Ballinger begs 

to differ. Using his heart monitoring Apple Watch app 

Cardiogram, Ballinger tracked the heartbeats of 10 

volunteers watching episodes from Series 5 of Game of 

Thrones and revealed marked fluctuations during battle 

scenes. Ballinger wants to enlist Cardiogram users with 

heart arrhythmia to share data with the University of 

California's Health eHeart Study. The aim is to enrol up 

to one million participants. “I think it’s a great way to 

capture data passively,” says Iltifat Husain of Wake 

Forest School of Medicine. “From a research standpoint, 

the possibilities are huge.” 


Unchanged 


Winners and Losers 

Good Week For: Unruly 

The London-based video advertising and tech company 

has been snapped up by News Corp for $90 million upfront, 

plus up to $86 million based on performance. One 

of the three venture capital firms exiting Unruly said the 

firm made $50 million in the most recent financial year, 

which would represent an increase of almost 200%. 

Bad Week For: Yahoo 

Key staff including chief marketing officer Kathy Savitt and 

head of European operations Dawn Airey have left, while 

the IRS has announced that it would not rule on whether 

the internet company can spin off its shares in Alibaba in a 

tax-free manner. 

Good Week For: Delta 

Amid record $1 billion profits in the second quarter, the 

Atlanta-based carrier has pledged a 14.5% increase in 

basic pay for ground staff and flight attendants. The 

airline is opening three airport "sky spas" for employees 

starting next month. 

Bad Week For: Sprint 

The telecoms and wireless services provider's stock fell 5.5% 

on Wednesday after Moody's downgraded its credit rating 

from B1 to B3. Moody’s cited "brutal competition" in the 

wireless industry and doubts about the company's ability to 

refinance more than $12 billion of debt. 


Five key reads 

aiigle_dore via flickr 

FT: Symphony's disruptive message for traders 

Goldman Sachs's Symphony financial services messaging 

system launched on Tuesday, and will attempt to show it is more 

efficient and more affordable than Bloomberg. The service 

emerged from the 2013 snooping scandal, when Bloomberg 

news reporters used the company's terminals to spy on bankers. 

Symphony's CEO David Gurle was recruited to Thomson 

Reuters from Microsoft 12 years ago to produce a new 

messaging product that failed to dislodge Bloomberg from its 

market leader position. Banks often do not install $21,000+ 

Bloomberg terminals in both front and back offices and have to 

rely on alternative messages of internal communication, Mr. 

Gurle said: "Part of the allure of Symphony is to say that 

collaboration and communication should be a relatively open 

initiative. Even a desk clerk should be able to use it if that 

person needs access to trade records.” 

Forbes: Army tech spending collapses as enemies close gap 

The US Army has seen a decline of $100 billion in its base annual 

funding under President Obama to $127 billion, and its 

procurement and R&D budgets have been particularly badly hit. 

Almost all the major combat systems the service relies on date 

back to the Reagan years or earlier, but the Pentagon prioritises 

new hardware for the Navy and Air Force, and manpower 

programs within the Army. Development of troop carrier the 

Future Fighting Vehicle will not begin until the 2028, meaning it 

probably won't be fielded until 2040. The Army has fenced off a 

dozen weapons programs, some upgrades, some new systems, but 

fears the day approaches when it will meet an equally 

technologically sophisticated enemy. 



The Briefing 

WSJ: Big retailers, delivery firms face struggle to find holiday 

workers 

With US unemployment at a 7 year low, employment agencies for 

retailers and logistics companies say they are having trouble 

finding warehouse workers to stock early holiday inventory. 

Starting warehouse wages have been rising by up to $3 an hour in 

some markets. Amazon, Walmart, Target and other retailers have 

been building warehouses quickly to get online orders to their 

customers and are now likely to take a hit. Last minute online 

shoppers should beware of the possibility of pre-Christmas delays 

that will make the last two years look punctual by comparison. 

Forbes: Dislike this: Is Facebook's new button really such a big 

deal? 

Pressure groups warn that Facebook's plan to introduce a 

"dislike" button could lead to bullying and hate crime. Professor 

Andre Spicer of Cass Business School in London points to 

upsides of being able to express negative emotions - helping 

people blow off steam, point to problems without obvious 

solutions and blow the whistle on inappropriate behaviour. Is it 

really any more than a gimmick? Will it encourage the millennial 

generation to join the same site as their parents - and isn't the 

whole act of "liking" past its sell-by date, like the Facebook poke? 

Bloomberg: Art investment platform draws crowdfunders into 

the scene 

A Kickstarter-style project is reinventing the traditional art 

gallery model. Using New York and London-based crowdfunding 

platform Art:i:curate, collectors can buy a stake in an emerging 

artist’s work for just $10. The artist initially sells 40% of the 

listed price of the work to the crowd, receiving the money up 

front, then gets a further 30% when the work is sold, the rest 

going to the investors, minus running costs. Investors stand to 

get back over $150 if they put $100 in, but only if the work sells 

for the marked price. Art:i:curate’s co-founder Irina Turcan, a 

former investment banker at Nomura wants to go global with the 

initiative: “we are already in more than 30 countries.” 



h 

The Interview 

• This week’s interview is with Nicole Van Der Tuin, the 

CEO and Co-Founder of First Access 

• First Access is a New York based startup delivering 

the first instant risk scores and data marketplace for 

emerging economies, enabling the next 2.5B people to 

build financial identities using their mobile data. 

What's the aim of First Access? 

We’re trying to reduce the cost of 

lending and borrowing in developing 

markets, which are very high because 

there's not much reliable information 

about approximately 3 billion people 

who don't have formal documentation 

of their financial identities. The credit 

industry relies on in-person visits that 

can take days. Agents are looking for 

personal and business expenses, 

assets, liabilities, what their house is 

made of, looking at photos on the wall 

to see if they are of the person taking 

out the loan because people will often 

borrow each others’ houses to use as 

collateral. As lending costs are so high, 

when you're giving very small loans 

the per person costs are very high, and 

you can imagine what the interest 

rates are: easily into the hundreds of 

percentage points. 

Many New York and London Fintech 

start-ups are attempting to rewrite 

the credit record for their local 

markets, you’re doing this in mainly in 

Africa - how does it differ? 

In emerging markets more people now 

have mobile phones and so we partner 

with mobile carriers. We earn a 

margin by taking their raw phone 

payment information and processing 

it into a credit score - so if somebody 

comes to a bank and says, I would like 

a loan of $400 to buy a new sewing 

machine, the bank can enter her 

number into our software and she gets 

a text message to ask her permission 

to share her mobile activity. We made 

the credit scores much more 

actionable for financial institutions in 

developing countries by 

recommending a specific loan size or 

other terms. 



h 

What inspired you to go into this? 

It started with a love of languages – I grew 

up speaking a fair bit of French. I moved to 

China after I graduated partly to learn 

Mandarin. I had some experiences in college 

and abroad that opened my eyes to how 

much difference a single person can make 

and I've always been sort of obsessive about 

trying to do better at scale. I started working 

for Planet Finance, a French NGO in China, 

Madagascar and Senegal. A big part of my 

job was to go out with loan officers to do 

evaluations and I just felt beaten around the 

head with how labor intensive, subjective 

and expensive the process is. I learned 

calculus, did a masters in economic 

development at Columbia and along the way 

realized that SIM card registration would be 

a huge, unprecedented opportunity to get 

people access to credit. My co-founder 

Duncan Goldie Scott got talking about this 

at a micro-finance event; I raised capital for 

it and here we are. I feel very lucky that I was 

in a position to take the leap and have 

mentors - New York is a really incredible 

place for that. 

As an American working in Tanzania, you 

must have experienced some interesting 

cultural differences. 

I find Tanzania to be a very easy going place 

so not as many as you might expect. The first 

time I went (in 2011), I thought it would be 

great if not pie in the sky to speak to 

someone from the central bank. I was having 

coffee with the one person I knew in 

Tanzania and he was like, hold on. He made 

some calls and came back saying I got you a 

meeting. I was expecting him to say they'll 

meet with you in 2017. Instead he was like, 

how is 2:30? The warm reception to new 

ideas has been energizing. 

What's changed in the last five years? 

Sim card registration is now required in 

almost every developing country - it's 

fundamental because those top up scratch 

cards are the first formal transaction that 

most of the world's poorest have ever had 

access to and now they're associated with 

people's names so you can turn them into an 

asset. We’ve got some awesome case studies 

with the institutions we've been working 

with who in total serve around 33 million 

people. Mobile money despite its incredible 

success in some places is not nearly as 

useful because it just doesn't have the 

network. We don't ride on mobile money 

rails for that reason. 

What do you see as the next main trend in 

this sector? 

I guess some kind of an arms race between 

Google and Facebook to connect the offline 

world - because Facebook bought this 

drones company, and Google invested a 

billion dollars in SpaceX. There's a lot of 

discussion about whether traditional 

financial institutions are going to or be 

supplanted by non-bank financial 

institutions offering credit based on 

digital. I don't believe that that's true - I 

think financial institutions with an incountry 

presence will be critical at least for 

the next 5-8 years. 

Nicole Van Der Tuin is the CEO & Co-Founder of First Access. 

Her career has been spent furthering investment into developing 

economies, notably at the Aspen Institute and PlaNet Finance. 

She holds an MPA from Columbia University. 



We heart h charts 

Trane de Vore via flickr 

The medium is the message 

Almost two-thirds of US Twitter and 

Facebook users get news from social 

networking sites - up from around 

half in 2013 according to a study by 

the Pew Research Center. Newsoriented 

Twitter users are almost 

twice as likely to follow breaking 

stories on the site as opposed to other 

sources such as Facebook. 

Source: Pew Research Center 

Manufacturing isn’t dead 

Source: Thomson Reuters in the Economist 

European differences 

Eurostat figures show sharp regional 

differences in how European 

households spend their budgets. The 

Germans spend most on healthcare, 

more than triple the spend of NHSloving 

Britons. Housing costs are 

highest in Denmark and lowest in 

Malta where 17.9% of household 

spending goes on restaurants or 

hotels. 

Source: Economist 

Tanking it 

Bloomberg's map of global gasoline prices 

from October 2014 to July 2015 shows 

falls of varying degrees across the world. 

In Venezuela, prices have collapsed 97 

percent and 20 SUVs can be filled up for 

less than a dollar. 

Global Gasoline Price Changes 

Source: Bloomberg

Exponential 25

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