Testosterone can turn bull markets into bubbles and cause a financial crisis, world-class scientist John Coates has found out.
He explains what happens to our bodies when we take risks, what happens when we make or lose a lot of money. When young men are high on ambition and drunk on success at places like Wall Street. Coates, Senior research fellow in Neuroscience and Finance at the University of Cambridge, has taken a closer look at our male dominated world of financial traders and how they are connected with physiological coding that has been developed throughout human history.
“First I thought hormones is something women have and men don’t,” he jokes on stage at DLDwomen. But the matter has a serious impact.
Coates, a former Wall Street trader himself, uses the expression “the hour between dog and wolf” (the title of his book) to refer to the moment of Jekyll-and-Hyde transformation traders pass through when under pressure. Based on a series of groundbreaking experiments, he outlines the connection - the feedback loop - between hormones and success. Like animals get high on testosterone when winning fights, young males as well behave irrationally risky when making a lot of money. On the other hand, when losing a fight or the parallel example in the trader’s world, losing money, young males experience a rise in the levels of cortisol - the stress hormone that lowers the appetite for risk. These reactions are all physical. They’re based on body chemistry.
However, there seems to be a pretty straight forward solution to this biological problem. “Women on trading floors can function as stabilizers!” Women, and older men, do not experience the same body chemistry as young males. They have different biologies.
Overall, we need to understand body and mind as one organism, he says. There seems to be more biology in our decisions than we previously thought.
What’s the first thing teenagers do when they wake up in the morning? Ten years ago the answer would have been: brushing their teeth, having breakfast and saying good morning to their mums. Well, nowadays the very first thing they do is “logging on Facebook”, says René Schuster, CEO of Teléfonica Germany GmbH & Co. OHG.
On the panel ‘How the Mobile Revolution Promotes Diversity’ Schuster is feeding the audience with a number of very interesting stats, did you actually know that one out of six people marrying today met online?
Connectivity is changing the world we live in, “we are the last generation of the unconnected generation. The world’s connectivity is going to explode soon”, adds Shuster.
But in an attempt to challenge Schuster’s point, Ina Fried, senior editor at All Things Digital and moderator of the panel, points out that “roaming fees are still very high when travelling, so companies are not making it easy for users to remain online while abroad”.
“That’s true”, replies Schuster, “network companies haven’t got it right yet. But let me tell you that EU regulation is on its way and the industry will be forced to cut off roaming in Europe by 2015”.
We must not forget about the developing world. In Africa 500 million people have mobile phones and, for instance, “the Indian government is trying to put a phone in every women’s hand”, points out René Schuster.
Furthermore credit cards will soon be history as people are starting to use their phones to do online payments. “Given that there’re more phones than toothbrushes in the world we can clearly see where this is going. I advise kids not to forget brushing their teeth though”, concludes the CEO of Telefónica Germany.
Female leaders are on the move - and they want to have it all.
Flexible working opportunities have changed the reality of thousands of ambitious women all across the globe, DLD Chairwoman and German Minister of Labor and Social Affairs, Ursula von deer Leyen announced as she shot off the 2012 DLDWomen Conference. The result is no more settling, no more compromises. Today’s female leaders want and can have it all - “we want to be bosses AND have babies!”.
Von der Leyen’s message is one that resonates well with the - largely female - audience in Haus der Kunst in Munich. They have come to discuss, debate and deliberate on the changing landscape of female opportunity in leadership, tech, business, entrepreneurship and oh so much more. It’s a conference to “rock the roles”, and von der Leyen showed that there is indeed plenty of room for optimism.
In her bag, she carried “three pieces of advice for female leaders.” Amusingly, the advise would in fact turn out to be two suggestions and a final call for action. Two and half advise for the future of working women across the globe.
Technology has given women everything they need to advance and succeed, she said. We are by now “working in the talent cloud, we have become a virtual workforce, on demand, and of course, worldwide.”
This gives female workers great cards on their hands to be flexible and reach their goals without compromising family life. The downside, of course, is that the same technology can also dominate one’s very existence. The first advise is therefore: “Be flexible, but stay balanced. Defend your right to be offline!”
Secondly, new networks allow women to be free of outdated (male) hierarchies and dependencies. The new structure of the workforce means that women can work their way directly to their goals, but again there is an obvious risk: Second piece of advise from von der Leyer: “Let’s work hard for the cloud, but don’t let others make you sweat!”.
Finally, the third, or second-and-a-halfth advise, was more a manifest for the future than anything else.
By now, women can indeed have it all, it only takes a bit of thought, drive and care. “If we are flexible, and we stay balanced, we can break the glass ceiling. And then the workforce of the future will be female!”
Amen to that.
It was a fitting close to DLD Moscow. As Russia, one of the world’s great industrial nations, modernises its economy for a digital future, Lapo Elkann, designer and creative entrepreneur, declared the age of mass production over. The future will be all about customisation. “Brands should impose less and propose more,” he said.
In a free-wheeling conversation with Aliona Doletskaya, the editor-in-chief of Interview magazine in Russia and Germany, Elkann said that the product world can be divided into three categories.
The first is democratic customisation. This means offering consumers the ability to personalise the products they are buying, whether it be shoes, bikes or cars. At the same time, simplicity is key. If you offer too many options, you risk confusing the customer and making life difficult for yourself. “Good design is all about making complex things simple,” Elkann said, citing Apple as an example of a company that understands this design precept.
The second category is sartorial. This is a step up from democratic customisation. The customer is more closely involved in shaping the outcome of the product.
The final category is bespoke, where you take an existing design but tailor it completely around the needs and tastes of the customer.
Beyond that is a unique edition. But this does not fit in Elkann’s matrix of three product categories because it goes beyond style and into design, which can often require years of research.
The three + one categories reflect Elkann’s approach to life itself: “I like to travel economy, business, first and private,” he said. “The beauty of life is being comfortable in every environment.”
At DLD, cultural undercurrents are always buzzing. People meet, ideas are exchanged and contradictions collide.
Exploring culture - an admittedly very wide and loosely applied term - will often lead to new insights in a setting like this. The very last session of the DLD Moscow was a true example of this dynamic, offering a diverse meal of communication strategies, visual arts, movie making and disruptive entrepreneurship.
Michael Conrad of the Berlin School of Creative Leadership shot off the panel by taking the audience through some of the most pertinent trends in creative branding. “A product is a service that provides a function. Culture creates a brand,” Conrad said, highlighting examples like Havaianas, Freitag Bags, Levi’s, Apple and Marlboro.
Conrad was followed on the stage by Kevin Abosch, renowned for his portrayals of Hollywood stars like Johnny Depp, Scarlett Johansson and Dennis Hopper.
Abosch “will never refer to himself as a photographer,” but rather finds challenges in “exploring the space between community and individuals and the resulting art.” Work includes portraits of populations in for instance Ireland, and more recently, leading figures in the tech industry. This project, helped underway by DLD founders Steffi Czerny and Marcel Reichart, Abosch explained, has allowed him to pursue this quest further, and includes portraits of leading figures like Jack Dorsey, Jimmy Wales and Niklas Zennström.
Exploration of culture is also a driving force for German film maker Jens Meurer and his colleague Johnny Riley, who offered insights into the distinct contemporary Russian film culture.
Russian cinema, Meurer said, is under pressure from Hollywood productions, much like in Europe. This has “driven him to work with Russian movies” and has propelled him into projects that have a significant Russian identity. Among his latest initiatives is the story of Katharina the first and her love affair with Peter the Great - “a Saint Petersburg love story that has yet to be told.”
Finally, Natalia Sindeeva of TV Rain provided a piece of motivational input and a story of dreams coming true. Sindeeva began a journey to create her own TV channel in 2007, and fought a long and complicated fight to establish what has since become an industry leading online TV station.
TV Rain, Sindeeva said, is quickly becoming a leading source for information in a changing Russian media landscape, and is for example revolutionary in providing content that is created in cooperation with the viewership.
The award-winning channel today airs 60% of its show live online, and hosts its editorial meetings in front of rolling cameras. “More than a TV channel, we have become a multimedia content source,” Sindeeva said. “It’s dream come true, and it shows that it is possible to destroy many contemporary TV stereotypes - in Russia and elsewhere.”
Spirits may have been tired after the rocking DLD party last night but today’s early ‘Start-up Morning Call’ woke the audience up like a strong cup of coffee.
Sam Glassenberg, founder of social games makers funtactix, was first to took the stage. He spoke about this career-long quest to make video games as authentic as movies. After working for Lucasarts and Microsoft’s Direct X, he joined funtactix.
The strategy of funtactix is to make the fan fantasy come true, like playing spies with your Facebook friends in a Mission impossible social games.
With social games, Glassenger said, the authenticity of movies finally meets the engaging power of video games. They are engaging huge audiences, including people that had never played.
His latest success, the ‘Hunger Games,’ playable on Facebook for free, was used to promote to movie. In 3 days, users had spent more time playing the social game than watching the movie. Funtactix are the only ones in the market which uses film assets in social games.
The start-up also work with film creatives, giving them the tools to make FB a story-telling tool to expand the universe of the film beyond the silver screen and into the mind of the players.
Next on stage was Shahar Waiser, co-founder & CEO of GetTaxi.
Waiser had a vision: making taxi ride the preferable choice to get around the city for anyone anywhere.
A demo of the Displair screen-less visualization device.
Thanks to their game-changing app, GetTaxi achieves arrival of 3 minutes in Israel, 5 in London. They hope to reach the same 5 minutes in 6 months in Moscow.
Since the app works by just by pressing one button, you can use it everywhere, no need to translate. The app also provide drivers’ info and user reviews.
Best of all, GetTaxi transform taxi taking in a cashless experience, as you can register with your credit card or business account and be billed automatically.
Last but certainly not least, the demo of the Displair screen-less air-screen blew the audience away. Still a prototype, the air screen uses micro-particule vapour to project any type of multimedia content.
Displair’s latest version fully interactive, multi-touch, silent and can also diffuse fragances for a more immersive user experience. They plan to make several size screens, from Iphone size to larger ones for outside. Displair already has a deal with Russian cellphone company Megafon to use the air screen for advertising display.
The Chairmen Fireside session at DLD Moscow gave the audience the unique opportunity to witness a great discussion between two fascinating minds: DLD chairman Yossi Vardi and Skolkovo Foundation President Viktor Vekselberg.
The Skolkovo Foundation, which invited DLD in Moscow, has been dubbed the Russian Silicon Valley, a term Vekselberg rejects. Instead, he sees the venture as the “creation an ecosystem, a special environment in Russia where young people are given a chance” to develop their ideas and seize opportunities.
Focused around 5 priorities (energy efficiency, IT, biotech, nuclear and space), the Project will be a mix between an graduate school-type of educational institution - on the model of MIT, with which they have a deal - and technopark hosting 1000+ start-ups. If the first building has yet to be finished, the Skolkovo already has prestigious international partners like Microsoft, Siemens and IBM.
In front of a packed room, Yossi Vardi lauded the ambitious project: “I see the Skolkovo Project as a beacon for Russia”. if you want to create a project like this, “you need the infrastructure, the knowledge and a sparkle: spirit. From what I see here, you have all three.” He also recommended the Foundation look into building alliances between large companies and small startups.
If the Skolkovo Foundation, a non-profit organization, is for now supported by the Russian state, Vekselberg said that in the future funding should come largely from private busineses, VCs and private investment. “Skolkovo is not a Medvedev or Putin project. It is a project of Russia and for the country.”
A fascinating discussion between the heavyweights of Russian tech and venture capital (including a former Soviet defence researcher) started and ended with one simple message: there is no such thing as a local market.
There are several challenges for Russian companies that want to go global. If you only have offices in Moscow, you lack access to the local knowledge of your counterparts with offices in multiple countries, said Leonid Boguslavsky, chairman of RuNet. According to Andreas Haug, general partner at eVenture Capital Partners, European companies won’t touch a company with offices in a Russian town they’ve never heard of. Even though one of his companies sold code to Amazon, the British wouldn’t go near it until they had shifted HQ to the US and established a subsidiary in London. “Now we have Tesco,” he said. And people have this image of Russian businessmen as connected to the mafia, said Boguslavsky.
These are all real obstacles to going global. But, the panellists stressed, if start-ups want to be successful and relevant in the world of tech, they don’t have much of a choice but to go out and conquer.
Edouard Cukierman said there were still a few things standing in the way of Russia becoming a start-up nation like Israel. Both have high-level education and universities, strong government support, an expanding tech sector and a strong defence industry, which is where many future start-ups come from. But what Israel has and Russia lacks is access to international financial markets, entrepreneurial spirit and transparency in government. Once Russia can rely on these three things, it will be able to achieve its goal of being an international tech hub.
Already, Russians are beginning to spread out. The secret may be to start not in America and Europe, which have mature tech industries, but in emerging markets. With experience in Russia, which is somewhat advanced, firms that go to countries such as India can see what has to be done. In Boguslavsky’s words, it’s like knowing what will happen in five years. What more could any tech firm ask for?
As Facebook is far from the main Russian social network, the industry is highly competitive and global players are tempted to dive in the fight.
Social media Odnoklassniki is competing with leader of the market Vkontakte, his CEO Ilya Shirokov now claims that the gap in users is less than 5%, from 50% a few years ago. With the increasing Internet penetration in the region, “the Russian-speaking market for social medai will double in the next few year” according to him, providing his company, and others, with a lot of opportunities
There’s an increasing proximity betwen different social media, but beware of negative reactions from users: “we were pushed back by users when we tried automatic content cross uploading to Odnoklassniki & MM” admitted Shirokov. Users had two social media profiles for two separate circles that did not overlap.
From left to right: Ilya Shirokov (CEO of Odnoklassniki), Gene Sokolov Head of Badoo Russia and moderator Jamillah Knowles (UK Editor, The Next Web)
Global player Badoo is making a push at the moment to get in the Russian market. This social network, whose specifity is to find new contacts instead of connecting existing ones, but has also been used for dating, now claims a growth of several thousands new members per day in the country.
Both panelists agreed that mobile phone has a much higher penetration potential for the developing world and both websites tried e-commerce, another hope for revenues in social media. Badoo even created its own payment plugin and both accepts many means of payment, like SMS.
Ilya Shirokov (CEO of Odnoklassniki)
For Shirokov, the future remains “hard to predict. Blogs were thought to be the end of the story, then social media arrived and they changed. Social changed everything, sharing photos, games, the trend continues with music and video”.
Curation, that is having your social networks do tailored recommendation to its users based on the infos they have on them, is a aspect Odnoklassniki is going to develop in the immediate future, announced its CEO. Immediatly, Sokolov interjected that curation has to be done right and that he never saw one good example online.
For him, the future of social media is threefold: “local, instant and connected to the real world.”
The modern city is turning into a living, data-breathing, digitalized organism. It needs air, space to move and room to grow. For those in the know, this is nothing new.
For those who don’t know, Stefan Denig of Siemens, neatly summed it up; in just a few decades, he said, up to 70% of the world’s population will be living in major cities. Issues like sustainability, pollution, infrastructure and energy consumption will become the order of the day for most of us very soon.
Companies like Siemens are mobilizing to face this challenge. Its new sustainability center in London, named the Crystal, is raised to become a hotspot for attracting the brightest of minds in a number of industries. Their task: to think up a better urban future.
While technology, digital advances and access to data can help a lot, it is does not provide an answer in itself.
CO2 levels in London, Denig said, can be brought down by 44% with the technology available. But interestingly, the efforts to improve this trend will see just 3% of its investments coming from the city itself. Some 75%, in turn, will come from individuals and businesses. In order to improve inner city living, we the people will need to be involved.
“The social component of intelligent communities is tremendously important,” Bill Hutchinson, Executive Director of the Ernst & Young Center for Smart City Innovation, agreed.
For every city that moves into a greener, smarter direction, a new group of inhabitants moves with it.
Mobilizing creative talent in this way becomes paramount when working with smart cities. Architects like Eric Schuldenfrei of ESKYIU is already on the move, asking for “a wider palette to work with”. Smarter solutions like intelligent buildings and new materials can drastically improve the city’s inner beat, he added.
It’s a bottom-up approach that rightly addresses those who make up the very cells of the city, the people. Technology, data and new solutions is half the battle won, but as the panel agreed: smart cities will need smart minds.
How do I achieve success as a VC? What stage is my startup in? How big of a stake am I entitled to if get funding? How much of I product do I need to attract the needed attention? And who should I target to get going?
Coming from some of the world’s most successful incubators and venture capital firms, the panel of the Early Stage Success panel had insightful advise - and answers - to bring to moderator Marcel Reichart’s stage.
Marina Treschchova of Fast Lane Ventures convincingly pointed to a successful model from her native Russia, where “talented people don’t always have an idea.” The solution - and a secret to early stage success - is to find the right leaders and put them in charge as co-founders. That way, talent gets going and the juicing flowing, especially in the e-commerce and video segment, which she described as the “most interesting right now.”
Robert Goldberg of CrossRoadsVC has more than 30 years of experience and has seen how changes in everything from management styles to product has meant an overwhelming change in the possibilities for entrepreneurs and VC alike.
One of the biggest changes, he said, is new fast-cycle businesses, powered by immense social growth. Today, companies can achieve hitherto unthinkable value creation thanks to “hypergrowth.” This also gives investors the possibility of striking a deal in later stages. Companies like Zynga, Facebook and Instagram are perhaps some of the best examples of this tendency. At the core of the success they have created for themselves and for their investors is incredible growth, investors’ eye for the right opportunity, and perhaps most importantly, a product that almost literally sells itself.
Lars Hinrichs of HackFwd, in turn, is all about getting to work at the very earliest of stages. A co-founder of XING, Hinrichs described engineers as “the artists of the 21st century.” Often no one invests in them in Europe, and that’s why he founded HackFwd. Here, a good idea can turn into a progressive project, thanks to professional help, funding and creative input from the incubator.
The price? A 30% stake in a given startup.
“If I was a good engineer, I would never give up 30% of my company,” Serguei Belaoussov of Runa Capital told Hinrichs, provocatively, spurring laughter in the audience.
Investing mostly as a minority partner in projects with global potential, the brisk Belaoussov has built his success on funding projects that he feels he can “connect with”, early or late. With ambition and a knack for opportunity he is not afraid of bringing $100,000 to $10 million to the table, he said - if he likes the idea.
- Steffi Czerny, DLD founder and CEO: "Can you imagine 'citizen educationalists'?"
- Cindy Gallop, CEO of IfWeRanTheWorld: "If you change the mind-set of parents."
They promised us that their speech would be the highlights of the day and they did not disappoint. Salim Ismail and Brad Templeton delivered at full speed two tought-provoking and inspired talks.
Salim Ismail, Executive Director of Singularity University
We live in an era of extraordinary progress: the human life doubled in 100 years and the price of phone call is virtually free. There’s an exponential growth of information and computational power as per the Moore’s law, 3D printers can print 70% of their own parts, (soon they’ll be able to replicate themselves?). Ismail said that, with the pressure applied by changes:
Technology is heating up our world and vaporizing it
We moved from a solid to a liquid to a now vaporous world. He backs the ice-water-vapor metaphor with real life evolutions such as “hardware-internet computing-cloud computing” or, for societies
Problem: Vapor is hard to recapture and it’s hot. Hot movement like the Arab spring and the Occupy failed to create stable structures out of them and society is sometimes not ready for the speed of change. The question remains, how to cool things down?
Internet entrepreneur Brad Templeton
Robocars may be a solution to many of the world’s problems, inlcuding social, environnmental, economic or technological.
In the USA alone, the introduction of driverless cars could:
- save 35,000 lives and a million injuries (NIH). Mostly young people, for whom car accidents are the leading cause of death among major categories.
- save 230 billion dollars of accident cost (NTSB). About 2-3% of GDP.
- save 50 billion hours (or 1 trillion dollars) of people’s time. Around 8% of GDP.
- save 50 billion gallons of imported gasoline, replaced with the equivalent of 10 billion “gallons” of domestic-source power plant fuel. Thus eliminating about 12-15% of the USA’s CO2 emissions and nastier pollution.
- trigger a serious reduction in the urban land devoted to the ~600 million parking spaces, estimated to be up to 10% of urban land in many cities.(source)
It seems, Templeton say, than rogramers actually can save the world with these cars which see the world in 3D, with a light radar using a laser.
The best aspect, though, will be the introduction of Moore’s law into the car industry, which still produce machine using a 19th century mentality, so it can properly enter the 21st century.
The first business Oskar Hartmann started was, in his own words, a German copycat of bodybuilder.com. He posted stuff to people and a day later received thank you notes. The delivery rate was 98%. In Russia, by contrast, “you pay three guys from a consultancy 10m euros and you get 30%”.
The fault lies not with the consultants or with the business but with the nature of logistics in Russia. It is hard to get goods around the world’s largest country. A nation of careful shoppers don’t like paying for things until they see them and are happy with them. And there are few systems for online payment. So what do you do?
According to Maelle Gavet, the CEO of ozon.ru, the biggest online retailer in Russia, the first thing is to educate customers about new ways of shopping. Simultaneously, indigenous solutions need to be found for online payments. And retailers need to push mobile shopping applications. It is not that people are unwilling to pay online, she says. Though only 80% of ozon.ru’s transactions are completed in cash, that number is as low as 40% for travel products. That is because people receive their e-tickets instantly, which makes them more trustworthy. The need is to build that trust for everything.
Nonetheless, some 90% of online business will fold in the next few years, thinks Mr Hartmann, now CEO of KupiVIP, an online retailer. “Consolidation is the next major trend,” he says.
Two more trends can be discerned as consolidation makes companies more stable. Offline retailers will go online by contracting out to the new, stronger players in e-commerce. At the same time, online retailers will increasingly establish a physical presence. These seemingly counter-indicative trends are part of a growing link between the online and offline worlds. Guy Schory, from eBay, points to RedLaser, a product that allows users to scan in a barcode to receive information about the product. Moreover, it also instantly provides options for purchase (with prices listed for comparison). The user can see something and start the process of having it delivered within minutes.
Putting all the trends together, the theme that emerges from this fascinating talk is a convergence in online and offline retailing. The two need no longer be separate, competing ways of doing business. Instead, a marriage between offline and online can produce strong new ways of selling—a cocktail of the best genes from both parents.
Eric Hazan, Partner and McKinsey & Company and a friend of DLD, took the opportunity on Day 1 of the DLD Moscow to present McKinsey’s latest annual report on the impact of technology on GDP growth. With him on stage was Associate Principal, Aigool Khalikova.
This year’s report focuses on 30 aspiring countries and analyzes the Internet’s contribution to GDP. The results show a couple of interesting tendencies, for Russia and beyond.
Here is a selection of what Hazan told the crowd:
- Internet’s impact on GDP: Nigeria has the lowest percentage of impact by internet to the overall GDP at 0.5%. The highest for an aspiring country is Taiwan at 5.4%, the average being 2.0%. Russia is currently at 0.8%.
- Internet users: More than half of all of the world’s Internet users are now in aspiring countries. It is estimated that the world will reach 2.7 billion Internet users by 2015. 18% of these will come from aspiring countries like Russia, representing a growth rate that is 6 times faster than that of developed countries.
- Language: Today’s the biggest Internet language is English, followed by Chinese and Spanish. But Russian is the second fastest growing language on the Internet, surpassed only by Arabic.
- Jobs: The Internet globally creates more SME jobs than it destroys. The BRIC countries are currently leading this trend, showing a 120% rate of jobs created per job reduced.
- Shopping: In today’s Russia, some 70% of McKinsey’s respondent had bought something online within the past 3 months. Products in demand are electronics, video games, music, and books.
- Going social: In Russia, some 27% admitted to be following their favorite brands on Facebook. In the U.S., the number is only slightly higher at 34%. Using Twitter to follow brands is by now more popular in Russia in the U.S. 28% of Russians use Twitter to follow retailers - in the U.S. the number is 25%.
In general, Hazan pointed out, aspiring countries show great potential for growth thanks to Internet.
Consumer behavior in countries like Russia is today more similar to those in mature ecosystems than it is different. To reach its full potential, however, development is needed. Infrastructures must be build and human capital must be leveraged, Hazan concluded.
With 40 to 45% of all spendings online dedicated to travel purchases, the competition among service providers, especially booking websites, is fierce.
So when four of the main competitors for the Russian online travel markets were gathered for DLD Moscow, the stage turned for a second into a (lighthearted) face-off when two of the speakers, as they introduce themselves, claimed the title for second-most used Russian travel booking site.
Marina Kolesnik, co-founder & CEO of Oktogo.ru
Despite being competitors, the panel agreed on key aspects explaining the success of Russian websites.
First, the need to educate the customers regarding online transaction. If 70% of Russian internet users read reviews online before booking trips or hotel, only 10% of travel purchases are done online.
Solutions include finding the customers’ confort zones: over the phone or face-to-face bookings by partner businesses. This also provide a solution for Russia’s cash economy, as “50% of Oktogo’s customers aren’t paying by credit cards”, CEO Marina Kolesnik said. One must be an online company with offline mentality
Word-of-mouth and social media referral are crucial. Tetyana Hrek, CEO of the #1 User-Generated Travel reviews site in Russian, argued that the success of the reviews is the fact that they were in Russian and not anonymous, since users log in from their social media profile to post.
Serge Faguet, co-founder and CEO of Ostrovok.ru
For Serge Faguet, co-founder and CEO of Ostrovok.ru, in the travel market, local players often win over global players: in reviews, in marketing and in partnerships on the ground. The large share of independent hotels (95%), the tourism visa regulations and the language also gives local players several advantages over global booking online companies.
As a result, in 2012, with the exception for Booking.com, international players are sitting on the side line of the Russian market. But for how long?
Reality is not always what it seems. Every now and then, we need the input from artists, designers and data crunchers to give us a clearer vision of what is seemingly going on right in front of our eyes.
This curated reality in its many forms, colors and shapes was the topic of noon session in Hall B, where Berndt Lintermann of the Zenter for Kunst & Media, Clemens Weisshaar of KRAM/WEISHAAR, Felix Hallwachs of the Olafur Eliasson Studio and Johannes Fricke Waldthausen of Ways beyond the Internet gathered alongside DLD’s very own Steffi Czerny.
The quartet showed off a highly diverse portfolio of how technology, data and fresh ideas can severely alter how we perceive notions of beauty and functionality.
Take for instance Weishaar’s analysis of everyday objects like a chair. By writing code that can analyze the structures within and then layer that information on the object itself, a gate opens to another reality. A chair is no longer a chair - it is a physical representation of research, data and precise analysis of bearing structures.
Curated reality of this kind, Weishaar said, is “necessary because of all the mess. It offers a chance to focus.”
Lintermann takes a slightly different approach. His Zenter for Kunst and Media works with projects that can take its beholder beyond mere observation. 3D generated maps, interactive full-view browsing and augmented reality visualizations of sound are just a handful of the projects that he believes can create a highly personalized interpretation of the data surrounding us.
It’s a path that has been explored on many levels and with varying results. Already at the DLD12 in Munich earlier this year, the Ways beyond the Internet exhibition showed us how treating information as sculpturing clay can create never-seen-before works of art. The outcomes from this band of young artists - longtime friends of the DLD - can be seen right here in Moscow too - just head for the hallway between the two main halls where a selection of projects are on display.
Finally, Felix Wachshall of the Studio Olafur Eliasson offered a more earthbound but truly inspiring view of how art and technology can interplay to change lives. His “Little Sun” project has resulted in a handheld, solar-powered device, which can bring light to where there was formerly darkness.
The lamp is charged at daytime by the sun, and can bring an evening of study or work light on a single charge. If everything goes well, it be sold for as little as $11 in off-target rural areas, where he hopes it “can change lives.”
Changing lives, indeed, is what curation of our everyday reality is all about. From extracting the data from chairs to coming up with solutions like “Little Sun”, art in its most advanced form holds the potential to skew the world around us.
“The world is not as set as we believe,” Hallwachs said. “And art can help to expose this.”
Early in February, Twitter was in the midst of what Philipp Missfelder, the foreign affairs spokesman for Germany’s ruling coalition, would call a giant “shitstorm”. That month, member states of the European Union were to sign ACTA, an international copyright trade agreement that many citizens considered anti-democratic and draconian. Mr Missfelder thinks their ire was misplaced. “Some 40,000 people demonstrated. This is ridiculous compared to where ACTA was on our list of priorities,” he said at the “Internet, government and foreign policy” session this morning.
The protests in Germany, along with similar ones across Europe, eventually led to ACTA being placed on the backburner. Perhaps the German state’s social media team should have been faster to start putting out fires, said Mr Missfelder. But the message was clear: people expect engagement, and they expect it immediately. But is it possible to have in-depth discussions about complex policy issues when confronted by multiple challenges, including a 140-character limit and what Alexander Alvaro, the vice-president of the European Parliament, calls the “tyranny of the masses”? The conclusion, at least this morning, is no.
“Social media works to raise awareness of issues,” said Mr Alvaro. The European Parliament uploads new legislative initiatives to solicit feedback. But for every 100 who respond, he said, maybe ten will continue to engage when it comes to the nitty-gritty of policy. And that is on a good day. Social media widens debate, the panel concluded. But it also makes it superficial.
Mr Alvaro point was neatly illustrated in the Twitter feed for the session itself. One member of the audience tweeted that it was a fruitless debate. The panelists, who had screens with the Twitter feed facing them, appealed to the audience to be constructive. Politicians don’t have the answer to everything, Mr Alvaro admitted. So any comments on how not to make it fruitless would be appreciated.
Nobody said a word.
DLD Moscow was the occasion to hear from experts and key players on IT and finance in Russia. A very helpful endavour when one realizes that there is a “Russian Paradox” as moderator Adrien Henni puts it. In short, Russia is still very much a cash economy, more so than India. Moreover, the Russian online banking penetration is only 6%
Maxim Nogotkov (left) and Cindy Padnos (founder of Illuminate Ventures)
However, thanks to new technologies, Russian entrepreneurs are developping services to cater to the specific needs of their local customers. For instance, Maxim Nogotkov, who made a fortune launching cell phone company Svyaznoy, transformed his 3000 mobile phones shops to promote the banking products of Svyaznoy Bank.
“We have a full banking licence” underlines the man who, according to Forbes, is now a billionaire. This position puts him at the crossing of the growth of smartphones and mobile payment, 2 very promising markets in Russia, as the shift from cash payment is slowly taking place.
Talking about key player don’t begin to describe Boris Kim’s role in the Russian banking world. It’s simple, last year, more than half of the population of Russia used at some point one of Kim’s QIWI services.
Recognized as an integral part of Russian internet life, Qiwi’s products ranges from the omnious cash collecting kiosks to purchase online to more recent launchs like the QIWI virtual visa card, mobile apps, electronic wallets. Kim offered the audience some lessons for success: growth through cannibalization, using cloud money and getting mobile and social.
Changing markets. Immense growth in digital penetration. New eco-systems. Shifting consumer trends. In this hodgepodge of tendencies, Russia represents a brave new world, for native companies and long-time market explorers like Hubert Burda Media alike.
What better way to shoot off the very first day of DLD Moscow than to have some of the Russian tech- and media market’s hottest commodities offer their views on what’s going to happen next?
Questions were almost too many for the scheduled 50-minute “Digital Media Strategies” panel to address, but speaker heavyweights Dimitry Grishin of Mail.ru, Paul-Bernhard Kallen of Hubert Burda, Ahmet Özer of Trader Media East and Arkady Volozh of Yandex still managed to squeeze in a number of revealing inputs under Booz&Co VP Thomas Künstner’s moderation.
With enthusiasm, the panelists ventured into a debate about the big whys and hows of tomorrow’s digital media landscape. Trend are predictable - penetration is growing, mobile is booming and interaction will take over passive consumption. This is not, as Volozh pointed out a few times, not exactly breaking news.
What is more interesting are the companies’ approaches to handling the challenges they face.
Advertising, the panel agreed, will remain key.
“Digital is by now the most important revenue generator for Burda,” Kallen said. But you cannot simply put content online. Instead, the company now tries to “follow the customer all the way to transaction.” Strong brands can prove to be helpful. They generate trust and traffic that can ultimately pay off.
The market for advertising, Volozh added, continues to grow. There is still room for expansion and improvement, and with new technologies, a new space for creativity appears. This, too, can be seen in the Russian startup community as a spillover effect.
To Grishin, however, it isn’t creativity that’s needed. “Social networks and new technology, like data-driven targeting, will do the job”. In fact, the Mail.ru CEO claimed, “too much creativity can confuse the consumer.”
The panelists, however, seemed to strike a common key when looking at their own playing field, Russia.
Few places are experiencing the same fast-paced developments as the giant in the East. Russian is the world’s fifth largest language in the world. Smart phone penetration is by now at 25% and rapidly rising. When you get it right and do well in Russia, you do well in general - something these guys would know.
The lights are on, the seats have been taken, the microphones are buzzing. The very first DLD Moscow is reality, paving the way for two days of disruption, debating and power-networking.
DLD founders and directors Steffi Czerny and Marcel Reichart welcomed a full room of eager Participants, sidelined by the Skolkovo Foundation’s Katia Gaika and other friends, executives and chairmen of the conference.
Smiles were wide with a stint of nervousness and the flashes of activity that always surrounds the beginning of great events.
After the speeches and heart-felt “welcomes” (and Yossi’s trademark singing), the center stage was readied for the first debate.
By now there is no turning back - we are ready to roll!
DLD Moscow is about more than disruptive minds and brilliant ideas. Soothing music, good company and a dash of glamour is also part of the DLD Moscow experience.
To get the creativity flowing, the DLD Chairmanship hosted a out-of-the-ordinary Cocktail Party on Sunday evening, taking place on the beautiful River Boat Moscow.
The boat departed from the Kiev Station quay, and took conference’s guests on an unforgettable three-hour trip through spring-time Moscow with a first-row view from the Moskva river.
Friends were made, opinions were exchanged and glasses were raised. A night of splendor with a sparkle of luxury - a perfect start before things take off at the Digital October on Monday at 9am.
Being on time is usually a good idea - in business, in relationships, and when attending a conference like DLD Moscow. This, it turned out, was also important for today’s sightseeing tour around Moscow, headlined by guides Irina (Russian for “Peace”) and Luba (Russian for “Love”).
From the get-go of today’s tour, “Peace” and “Love” carefully made sure that nothing was left to coincidence. We were thoroughly counted, seated, carried and then promptly divided into two equal groups.
We hit the famous Red Square and St. Basil’s Cathedral. ” ‘Red’ means ‘beautiful’ in Russian” we learned. “Red Women, Red Square … Red DLD!”
At times, the scenes must have been borderline bizarre.
50 adults (and one baby), bossed around the holiest of Moscow’s many beautiful sites by two elderly Russian ladies. The spectacle at times led one to think of a group of confused and giggly school kids on a rare day out.
With the Russian spring showing itself from its very best side, there were, however, no complaints.
Visiting the Kremlin is like using a time machine: 15th century churches and walls stand next to Imperial-era edifices, Soviet-style buildings and structures currently inhabited or used by Russian higher political officials.
And surrounded by marvels of the past, DLD participants were already projecting themselves in the future. When not taking pictures, they where chatting and networking, planting seeds for potential projects.
Leaving the Kremlin, we poured out into the streets and reloaded at the Sparrow Hills viewpoint with the panoramic view of Moscow in the background. Heading towards the Tretyakov Gallery, our mission seemed to be almost complete.
We saw a city from inside out in just one day. And that is not an easy thing to do.
The ultimate trend whirligig: In partnership with SurveyMonkey our DLD team developed a survey, just two weeks before the start of the DLD12 conference in Munich, asking delegates about what comes next.
Just to give you a taste, questions tackled for instance Facebook’s post-IPO prospects, thoughts about disruption and start-ups to watch.
Photo: Hubert Burda Media/DLD conference
Facebook added 15.3 billion dollars in value to the European economy last year, mostly by driving 32 billion dollars in revenue, said the company’s Chief Operating Officer (COO) Sheryl Sandberg.
This, she said, according to a report released today by accounting firm Deloitte and Touche at the DLD Conference in Munich.
Sandberg appeared as the closing act of the DLD12, and had attracted one of the biggest crowds of the conference.
“Just as we saw in the United States, the Internet, social media and Facebook are driving economic growth [in Europe]”, she said during her keynote speech.
This is a notion that has been shared by many of the other speakers throughout the past few days, but still Facebook remains an industry frontrunner.
Facebook alone, she said, added 230,000 jobs in Europe in 2011 through its enabling of businesses and new networks.
In the app economy, one of the fastest growing online industries of all, the strongest European player is Germany, she added.
Although the numbers are indeed positive, she also issued a warning to her many listeners.
“We need to recognize that this growth is not going to fuel itself, we need to make sure that we’re investing in technology, and in education”, said Sandberg.
This puts an end to the perception that social media is “trivial and silly”, she said, as developing countries increasingly find in the Internet opportunities for economic growth that can create more jobs and enable small businesses.
A clear message and one that the attendees will surely carry with them as the keynote, and by that also the DLD12 itself, came to an end.
Pictured above, from left to right, Sina Afra, Alemsah Öztürk and Cenk Bayrakdar.
As Turkey is rapidly becoming a global power, the growth of its online presence is equally fast-paced as it is impressive. Turkey has now 35 million internet users who spend an average of 32,7 hours/month online - ranking 3rd in Europe behind the United Kingdom and the Netherlands.
Consequently, Turkey is in 2011 the second fastest growing e-commerce market in the world, behind India. If widespread credit card use (There are 51 million of them in Turkey) and good delivering infrastructure are credited for this, a consensus emerged on the panel that the Turkish youth also provide enormous opportunity for e-commerce. Indeed, the Turkish median age is just above 29 years when it’s of 44 years for Germany.
This youth drives several aspects of the Internet growth in Turkey. For instance, it makes Turkey the 6th most active country on Facebook. Mobile device are spreading fast, as 1 out of every 3 phones sold in Turkey is a smartphone. If Android is going strong, Blackberry is popular with the youth. For Nevzat Aydin of Yemeksepeti.com, it is because Turks are natural early adopters, “if you miss out on a new product, when the topics comes up in a discussion, it makes you feel inferior.”
In addition, “Turks are not afraid to interact with brands online, there’s a huge potential”, says serial entrepreneur Alemsah Öztürk who added “the Turkish TV culture translated well online. Housewives are now watching Youtube and mobile TV.” Sidar Sahin from Peak Games pitched in on the topic, “for emerging markets like Turkey, e-commerce and social gaming are consider entertainment, a new world by their customers” who may not be able to enjoy the same level of facilities (for sports, culture etc.) than Western citizens.
The key position of Turkey at the crossroads of continents and culture is a crucial assets for business in Turkey. Cenk Bayraktar explained that Turkey is a hub or gateway because Westerners feel comfortable doing business in Turkey which becomes a gateway to the Middle-East and former Soviet republics within the Turkish sphere of influence.
Innovation is also thriving in Turkey. Cenk Bayrakdar announced “last week, we launched a Blackbery NFC wallet to cater to the 20 million who don’t have a credit card”. The growing markets, opportunities and entrepreneurial culture are the reasons why successful Turkish entrepreneurs stay in Turkey instead of going West. However, a large challenge remains, the extremely high level of competition. “Turkey is a country of digital darwinism” Sina Afra warned.
There are many adjectives you can use to describe politicians. “Entertaining” is not generally one of them. Egeman Bagis, Turkey’s minister for EU affairs, proved to be an exception during his chat with International Herald Tribune editor Alison Smale.
Mr Bagis started with a typical politician’s speech. Turkey is growing, children in villages have email, broadband subscriber rates have multiplied by hundreds of percent. But what made the session particularly interesting was Mr Bagis’s ability to be forthright about his views without prevarication or euphemism.
Take for example his position Europe: he called the continent’s policies on Turkey blatantly unfair. Why is it that Turkey the only candidate country whose citizens need visas to visit the Schengen area, he asked. Why is it that the Cyprus problem wasn’t an issue when it came to Cypriot membership of the EU but is being presented as a problem with regard to Turkey? Mr Bagis is not a man to mince his words.
In reaction to a new French law making it a crime to deny the Armenian genocide of the early 20th century, Mr Bagis dismissed it as politicking, blaming it on the upcoming election.
But Turkey continues to pursue EU membership, he said. He promised it would be as good for Europe as for Turkey: “Hold on tight Europe, Turkey is coming to your rescue”
Jon Miller from News Corporation started his session with an uplifting message. “New devices are allowing us to better enjoy the video content…I would say we are now just entering a video age.” Miller has been working in internet and TV industry for three decades and now oversees the digital strategy of News Corporation, the international media conglomerate.
Miller says the biggest change happening in News Corporation, like many other media companies, is that the company now produces contents for different platforms. “It’s a very different world. Now you have these truly global platforms that literally reach billions of people.”
But for company like News Corporation, the real challenge is not only producing and distributing contents that are suitable for these global platforms, but more importantly to find solution to win the competition with them.
“Apple profit from selling hardware, so keep content prices low will help them sell the package.” Miller said competitions from new technology companies forced distributors to seek new business models.
To make that change, Miller suggested us to first understand the next generation of consumers. He used his personal experience of watching his teenage son using computer as an example. “Three instant message windows open, youtube on, emailing, and when asked what he was doing, his answer was homework.” Miller said the next generation’s ability to consume media is much greater, “they are born to be multi-tasking”.
When asked what will drive growth in the TV industry in 2012, Jon Miller immediately answered “portable devices”. “TV is no longer a device, it has become a concept and it goes wherever the best screen is available.”
Fifteen years ago, trend forecaster Lidewij Edelkoort predicted that men would change their roles in society and become more involved in the family.
Today, men are fathering their children, and making the most progress in society.
“We now entering the period of the emancipation of men”, said Edelkoort, who studies the links between design, art, fashion and consumer culture and pioneered the concept of trend forecasting.
Trends today reflect out desires and needs, she explained. In design, for example, the fashionability of long dining tables and the amount of food items sold together in bunches reflect the contemporary desire to share.
“We are allowed to be alone but we long to be together. We have long tables to share food together. More and more vegetables are sold together as a family”, said the
In the future, we should expect the generation gap to further shrink, as grandchildren and grandparents spend time together as friends, spending money together, and doing things that go beyond the traditional family gatherings.
The challenge for humans today and still in the future, she said to finalize her presentation, will be the lack of fulfillment.
“It is a challenge to be really fulfilled, I think there will be at least eight years before we get there.”