Will your next Best Friend be a BOT?

With 5G phones on the horizon, state-of-the-art voice technology is being positioned to become the next wave of AI-driven devices that will significantly change every aspect of our personal and professional lives. These disruptive devices will provide us on-demand, relevant suggestions and viable step-by-step pathways to solving complex problems. In fact the changes in store both technologically and behaviorally at home and the workplace will be so extreme that the laptop or mobile phone you are using to read this article are destined to become another glorified door stopper. Here’s what you can expect.

Googling as we know it today will change from a one line entry to an instantaneous voice exchange between you and a Bot. Rather than delivering a list of links, the output your Bot fires back will be specific to your questions. Downloading Apps on to your smartphone will no longer be necessary because your Bots AI will scour every major App available and connect you with the one that will best meet your needs. Not only will your Bot deliver optimal answers but also ask you insightful questions for you to consider. Username and Password requirements will no longer be necessary. Instead, the voice print you use to speak into a device will vet you seamlessly. HTML-driven web page searching will soon appear primitive and inefficient. Even the ‘water cooler’ chat among peers for pollenating ideas will become a distant memory.

Due to the FOMO effect, (Fear of Missing Out) I decided to attend the Conversational Interaction Conference in San Jose, California this year. The two-day, annual event held in early February provided me with valuable industry insights, updates on working applications, future blue prints, new industry buzz words, plus a list of key hurdles confronting voice technology developers today. Below is a brief synopsis of what I saw and heard at the conference. I have included links and capitalized key industry buzz words for easy identification. After reading this article and accessing the links provided, you should have gained sufficient intel/understanding to ask better questions on the current state and future of voice technology.

Voice Controlled Devices

Let us start with some familiar Voice Controlled Devices that are already in the marketplace such as Amazon’s Alexa, Apple’s Siri, Microsoft’s Cortana or Google’s Home. These ubiquitous smart devices have allowed us to seamlessly use our natural voice to make on-demand requests, such as to play a song, the news, the weather, or a lot more. For the most part these devices do a decent job of what is referred to in the industry as “Command and Control” applications. On the backend a user’s command such as “Alexa! What is the weather?” is converted from speech to text using Speech Recognition (SR) then passed on to a Natural Language Processor or (NLP), which invokes Deep Learning (DL) and Neural Network (NN) algorithms to analyze and prioritize keywords. Backed by powerful cloud-based computing power, multiple algorithms use these keyword inputs to generate a text response. This text is then converted to speech using Text-To-Speech (TTS) and delivered back to the device. This entire process takes less than half of a second, which is within the tolerance levels of a normal, two-way conversation between two humans.

Every time an individual wakes up a Voice Assistant Smart Device with their voice (i.e. Alexa! or Siri!), the commands uttered after are stored and scored. These unsuspecting devices automatically deliver your data to a Cloud-based, voice service platform, which appends your data to a Machine Learning training data set used to increase the algorithm’s overall accuracy. Ultimately these devices will mimic human-to-human conversational interactions similar to that of two friends chatting casually in the same room. A good visual of this concept is depicted in a movie trailer for 2001: A Space Odyssey where a talking Voice Assistant called HAL 9000 converses seamlessly with the protagonist.

To get a glimpse of how close we have come to HAL 9000, Aigo, a California-based startup, produced a video comparing its breakthrough technology with that of Alexa’s. (Be sure to view the entire video.) It reveals what one can expect from these devices, going forward. Also on a similar game-changing trajectory is BMW‘s Intelligent Personal Assistant, an advanced voice activated driving experience technology. With this voice package, BMW aims to eliminate dashboard touch-screens, …the outcome of which could inspire radically different auto interior designs, in particular, for autonomous vehicles.

These Voice Assistant Smart devices are part of a larger category called Voice User Interface or VUI’s. VUI’s include any smart device or app that relies on a user’s voice for input commands. These VUI’s could be life-size human-like Robots, Chatbots, Holographs, and more. Let’s take a closer look at who is doing what in this space with the following VUI’s.

Robots, Chatbots, Holographs

SoftBank Robotics created a friendly-looking robot called ‘Pepper’ that companies such as HSBC and Carrefour use to greet their customers. Like a dispatcher, “Pepper’ directs customers to the appropriate employee or department using the language of choice. In the event of a communication error, ‘Pepper’ has an integrated, iPad-size screen for optional click inputs. ‘Pepper’s’ disarming, child-like interactions dazzle audiences, especially when it successfully greets a customer by name. Similar to its Brethren, ‘Pepper’ becomes smarter by matching images of its visitors with their corresponding Contextual Utterances. ‘Pepper’ has also shown promise with young medical patients who tend to feel more comfortable chatting about their symptoms with a robot than with an adult.

What ‘Pepper’ does offline, Avatars do online and more. Avatars interact with individuals from a web page or App using voice, text, or both. Just as ringtones gave mobile phones their customized personality, Avatars can help set the tone for interactions by mimicking a celebrity’s voice/image or simply project a voice with an engaging accent. Sapientx, a San Francisco-based firm specializes in creative Avatar designs. Their creations help humanize the Chatbot experience blending both entertainment with genuine, positive interactions. They can also inject a visual/voice branding experience that consumers can identify with personally. The firm’s white paper expands upon how their interactive branding power can transcend generations in many positive ways.

A typical Chatbot experience requires either a click or utterance from the user. Depending upon the App, a Chatbot will reply via voice or text. Users communicate directly with the activated device (via voice or text) and receive near instantaneous responses, …just as though they were interacting directly with a department head.

Bank of America’s Chatbot or Virtual Financial Assistant is called Erica. With Erica, users can learn about their personal spending habits, receive suggestions on driving financial improvements, and learn about ancillary services available at the bank. This solution is ideal for up-selling and cross-selling sales campaigns that can leverage a client’s changing needs.

Workday.com, a cloud-based business service entity offers a Chatbot to help their employees stay connected. Their Chatbot improves efficiency, knowledge sharing, and collaboration. By integrating this platform in the workplace, Workday.com employees are regularly reminded of their fundamental core values, which in turn helps promote management’s engaging culture internally.

Another interesting example came from Murphy Oil, an oil and gas company located in Arkansas. Management hired Alan AI, Inc, a Texas-based enterprise mobile development firm, to design a conversational voice Chatbot for their field engineers to deploy while checking and maintaining the company’s equipment. This ‘supercharged’ Voice Assistant gives their engineers the ability to trigger required workflows and monitor equipment progress in real-time. Other Chatbot enterprise developers at the conference included Rulai and Grid Dynamics, which is pending an IPO.

So far the industries leveraging Chatbots include Entertainment, Healthcare, Financial Services, Cable/Telecommunications and Utilities. The bulk of applications, however, are for specific internal use such as HR, expense reports, employee directory assistance, etc. Essentially they address all the little nagging items employees endure on a day-to-day basis, (i.e. recording travel receipts). Internal applications enjoy greater success because they can leverage a company’s industry jargon and finite database to achieve higher levels of speech recognition accuracy.

If you are looking for some winner applications for internal use, consider reaching out to Oracle’s Conversational Design Team. They are the group behind Oracle’s Virtual Assistant. What caught my attention at the event was that Oracle’s deliberately focuses its resources to develop internal applications that deliver 95% or higher levels of voice response accuracy. This ‘high bar’ approach has given their team the bandwidth to address more challenging issues such as multiple requests in the same ‘Utterance’, …also referred to in the industry as ‘Intent Handling’.

Finally, Microsoft delivered an impressive keynote, which included a speech to text demo from the very same PowerPoint used to deliver the presentation. As the keynote speaker, Xuedong Huang, Technical Fellow and Chief Speech Scientist for Microsoft addressed the audience in his Scottish accent English, a Spanish text version of his words appeared in real-time below his slides. Being fluent in Spanish, I could personally verify that the sub-title translation was impressively authentic. This near-flawless, application could be easily paired up with any two languages from a list of 50 available; hence, a French spoken presentation could display Chinese sub titles or vice versa. This service is currently imbedded in Office 365 and costs about $1 per hour of speech.

As though this feat was yesterday’s achievement, Mr. Huang felt obligated to awe the audience with yet another example of achieving ‘Human Parity’. This time he used his own voice print and intonations to display an image of himself conversing natively in Japanese. According to a Japanese-speaking member in the audience, the Japanese delivery also sounded authentic.

In a successful attempt to leave a lasting impression with the audience, Mr. Huang played a video of Julie White, an actress and global motivational speaker. She used a life-size hologram of herself to deliver a speech in native Japanese to a Japanese audience in Japan, …all the while she remained at her home in San Diego, California. The implications from the potential uses of this breakthrough technology both good and devious were equally startling and open for ongoing debate.

Creating Your Own Chatbot? – Key Design Issues to Consider

Before you decide on launching your own Chatbot, it would be wise to align your lofty expectations with a dosage of reality. Voice technology is much harder than it may appear. It is its own worse enemy because incremental successes tend to propagate the need for more backend technology, which in turn unleashes more complexity, often at a geometric progression. Fortunately and as testimony to the recent Conversational Interactions Conference, the industry has met and exceeded many impressive breakthroughs. However, the battle to achieve ‘human parity’ across all platforms and applications on a sustainable basis continues. Here is what keeps developers up at night.

Hardware issues… Noisy Environments can pose serious issues for Ambient Voice Exchanges. Amazon’s Echo units currently include 5 unidirectional mics that can pick up surrounding voice commands from multiple angles. More may be needed… For Chatbot apps, however, the key issue is just the opposite. Back ground noises, such as traffic or machinery need to be eliminated. UmeVoice, Inc, a headset manufacturer, offers military grade, noise cancelation headsets and ear buds that help drown out surrounding noises, allowing users to provide voice inputs in practically any situation with excellent clarity including audible whispers.

Software challenges… The backend engines that seamlessly support Voice Controlled Devices from the Cloud depend upon the ongoing advancements in Natural Language Processing (NLP), Deep Learning (DL), Neural Learning (NL), Speech Recognition (SR), Text To Speech (TTS), and a slew more acronyms yet to be named, …plus all of their respective ancillary development tools! The process is never ending…

UI/UX Design protocols… Humanizing Bots requires a deep understanding of acceptable human behavior. UI/UX (User Interface / Use eXperience) designers deliberately include facial expressions to invite positive emotions from the user, especially in the event a voice exchange fails to meet expectations. In the industry this soft yet crucial issue is known as ‘Failing Gracefully’. To appreciate the importance of “Failing Gracefully”, imagine the mounting frustrations that one would experience if the other person not only delayed their response but also repeated the same question multiple times. Natural voice exchange tolerance hinges on less than half of a second per response. Any longer and a simple dialogue between two individuals risks appearing like two separate conversations, …the likes of which would harbor irreparable frustration, distrust, and confusion.

Even with the best hardware available, voice applications can fail due to poor conversational interaction protocols. For example, the gender voice or accent used to interact with a user may come across unappealing or unfriendly. In the case of Chatbots, replies may be too long, not relevant, potentially insulting, or even ‘creepy’, especially if the Bot were to divulge into any personal details unintentionally. Even a user can fill the feedback loop with poor data by inadvertently gaming the system, either by speaking unnaturally slow or using specific terms out of context.

Conversational interactions should be fun, entertaining, terse, non-invasive, and to the point. Bots should engage with users to learn more about them without appearing overburdening. Each exchange should build upon the previous one to help profile the user. The more the Bot knows about the user, the more likely its suggestions will resonate and the all encompassing trust factor increases. In short the key challenge with designing an application is to find the balance where the Bot can gracefully and gradually extract more intel from a user, while simultaneously integrating the aggregate data to help it provide the user with more relevant and timely suggestions. This fine line of being helpful while remaining invisible and accurate is an ongoing industry challenge, …and even more so, when a growing list of backend technology issues are considered simultaneously. It is at this very tenuous and yet exciting juncture where the industry stands today.

Some of the Industry’s Greatest Challenges

Perhaps the greatest challenge for Bots is the handling of instructions that change midstream. This event occurs when a user who asks for one thing suddenly changes his or her mind in the same utterance for something else. On the receiving end, the undoing of one for command for another can cause processing algorithms to breakdown. A reset routine to handle the new request is a possible work around, however the additional processing time could create an extended delay that would exceed the half of a second conversational interaction requirement.

…and if all of these challenges were not enough, developers rightfully complain about the need to code and maintain the same voice applications for each platform, IOS, Android, Siri, etc. Often than not, these platforms will modify their API’s (Application Programming Interface) without warnings, sending developers into a mad rush to fix each application!

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Tom Kadala is a technology innovator and freelance writer on topics related to artificial intelligence and machine learning. He is also the founder of RagingFX.com, a first-of-its-kind Autonomous Company.

© 2020 Tom Kadala

Betting on the Brits – …my FOREX-related story

A couple of years ago I was asked to cover a trading desk at a prestigious firm in London. What transpired in the first week was quite humorous, since neither party really knew the other all that well.

During one of our daily banters at lunch break, I asked one of their top traders if it was possible for a random freelance writer, like me, to become an expert Forex trader like him and his colleagues, …in say, less than two years time? They chuckled, but soon the question turned into a friendly wager between us. They were willing to teach me the art of their trade, if I agreed to stay in London for a few months longer. Without any hesitation, I agreed. What I failed to tell them, however, (since they never asked) was that aside from freelance writing, I was also a seasoned programmer with over 25 years experience.

For the next three months, I watched two top traders work the Forex markets masterfully. In the evenings I diligently programed what I had learned into a versatile algorithm. To keep up with the trading lingo, I poured over technical trading manuals, took copious notes on their many trading styles and strategies, and carefully observed their trading behavior under many different circumstances. After a few days in the trading room, I quickly learned how these circumstances could vary widely.

Each morning we met briefly to review global events and discuss trading opportunities. Every meeting derived a different outcome. For example, one morning interest rates moved up in Australia causing investors to dump Euros and buy Australian dollars. The ripple effect triggered a similar outflow in Emerging Markets whose respective currencies sometimes reacted with greater amplitude. Within seconds, my two mentors were skillfully working the South African Rand and the Turkish Lira using Gold as a potential hedge. The Euros that were sold earlier in the day were bought back, all at a precisely calculated, risk managed profit. Later that week, changing oil prices, commodity prices, invasions, trade disputes, earnings, GDP, non-farm payrolls, hedge funding currencies, political elections, and so many other factors including the prospects for a Grexit and Brexit, weighed in. In an unpredictable manner, each event contributed to an uncanny sense of ‘controlled mayhem’ in the trading room.

Despite the daily ensued chaos from the markets, these two cool cats maneuvered skillfully through the maze pinpointing with incredible accuracy, areas with high-probability arbitrages. Like the rails on a train track, their unflinching trading discipline was solid and consistent, day in and day out. They reminded me of two sturdy pillars standing firm against a fierce tornado. It was truly amazing to watch and absorb, not just for what it did for their trading results, but more for the many ways it could be applied to daily life decisions.

Perhaps, my greatest takeaway from the entire experience could be summed up as follows:

“Add clear thinking, risk management, and a disciplined approach to any
problem and the odds for a successful outcome can be greatly improved.”

Simple? Yes, but very difficult to achieve on a sustainable basis, at least for humans, but not so for a pair of fast computers and a cleverly written algorithm. What happened next surprised us both. See for yourself at http://www.ragingfx.com.

So, you might ask, who won the wager?

As it turned out, we both did. …because we had unwittingly hedged our respective bets! They taught me everything they knew, while in two years time, I created an amazing algo that digitized everything they had taught me!

© 2016 Tom Kadala

How to Introduce Entrepreneurship within a Young Democracy – (a case study)

During a recent Charlie Rose interview, Christine Lagarde, the president of the IMF (International Monetary Fund), shared her views with a packed audience of international economists in Washington D.C. on how young democracies such as South Africa or Malaysia commonly have fragile dual economies operating in parallel, one run by the ‘haves’ or wealthy, while the other by the ‘have nots’ or the impoverished. The wider the gap between them the greater the chance social unrest will follow, such as what happened in Egypt with the Arab Spring in 2011 and most recently in Brazil 2013. Other areas that could potentially erupt include Ukraine, Argentina, Greece, Indonesia, Pakistan… In fact the list of countries is so long that one might wonder, what exactly could the IMF or similar international financial institutions do differently and can lessons learned from one country be leveraged elsewhere?

To further explore new insights with countries operating within dual economies, I recently led a facilitated discussion with 38 university students at the Universidad del Caribe (UNICARIBE) in Santo Domingo, Dominican Republic. This island is a foothold for over 10 million inhabitants and a micro version of a typical young democracy. My goal was to hear how young Dominicans felt about their dual economy and extract a list of recommendations to pass along to political leaders and international creditors. I also hoped their ideas might offer new insights to other country leaders.

Universidad del Caribe is not your typical university. With over 19,000 enrolled students and 330 instructors, the university covers an ambitious range of degrees and disciplines at their two building complex. Students work by day and attend classes, one to two days per week. Campus spirit is notably strong fueled by an enthusiastic faculty comprised of volunteers, many of whom hold other jobs to make ends meet.

Life for a young impoverished Dominican is a daily challenge. Most will spend their lives operating undetected by government scrutiny in an underground economy where basic financial stop gaps such as access to credit for emergencies or a reasonably priced business loan are rarely accessible. Their greatest asset is their ingenuity and vibrant personality, which shines in much of what they do. Job security does not exist. They earn what they can from odd jobs, pay no taxes, and cut corners wherever and whenever by, for example, stealing electricity off the national grid. Providing for family needs consumes their meager incomes leaving them with little to no savings. In short they have few options within their reach to improve their livelihood.

On the other side of the economic spectrum, the Dominican middle class have their own set of problems. As avid consumers they buy beyond their means and spend much of their time fighting frivolous lawsuits or fulfilling new government requirements. Aside from having to pay income taxes, they are also saddled with higher utility bills required to offset the electricity stolen by freeloaders.

Surprisingly, the number one aspiration for a young Dominican adult is not to earn a college degree or to own their own business but rather to align himself or herself with a political party early on in life. In their minds, the only way to obtain job security is by serving a well-connected political group. Competition for these positions can be fierce, not because of an over-supply of skilled workers, which are scarce to begin with, but more for the oversubscribed pool of politically connected job seekers.

Open positions require a minimum of three years working experience, which leaves first time entrants with no other alternative than to join a political party.  This type of politically-motivated workforce, one based on connections rather than qualifications, tends to create a vicious circle. On the one hand, managers and leaders, also mentors, will send the wrong message to younger Dominicans who will see little value in advancing their own education or training, since the better paying jobs can be won with less effort through political connections. On the other hand, less qualified government officials are less inclined to require professional certifications from contractors to ensure that state-of-the-art services are rendered. The end result is a less competitive workforce.

The upkeep for a politically motivated workforce can become prohibitively expensive for any government. Venezuela and Cuba are two good examples where individuals are forced into political alliances for fear of being denied even basic services. Over time the workforce becomes lazy, and their leaders complacent. To please their international creditors, government officials devalue their local currency, which only makes matters worse with higher inflation rates. Eventually, both public and private sectors become trapped by the weight of their own unwillingness to progress. Adding to the malaise are party leaders who fail to recognize the immense value their Informal Sector could otherwise render with existing resources. Instead they would rather keep a tight lid on their potentially vibrant young workforce who due to their discouragement will enter a life of crime making matters even worse for their government and the rest of society.

With these facts on hand, I asked the discussion group what they thought was the root cause for their dysfunctional dual economy. Some cited a lack of women’s rights as they affect the welfare of the family unit. Others pointed to the criminal justice system for sending hardened criminals back on the streets without offering them a job or alternative form of income.  After a lively exchange, the unanimous vote for the root cause focused on the country’s weak judicial system.

According to the participants, on paper the justice system appears formidable, while in practice, it is virtually spineless. Laws are readily legislated, approved, and published to please voters; however, in the courtroom, these same laws are rarely enforced as written or at all. For the right price, a political leader or powerful investor can influence a judge’s decision to their advantage.

Despite their impoverished status, these 38 student/workers recognized the importance an independent legal system. Participants noted that whenever politicians or influencers are allowed to operate above the law, trust between the government and its people erodes. This same feeling of distrust infiltrates society and its family units creating a precariously, wider gap in their dual economy. This revelation raised an important question.

In a dual economy governed by a biased legal system, what can the government and international financial institutions such as the IMF do differently to create a brighter future for the Dominican Republic?

To counter the gap-widening effects caused by a weak judicial system, the group suggested the formation of a student entrepreneur association based out of the University del Caribe.  Members would join the Association then be matched through an interviewing process according to skills, experience, and interest to a cluster of no more than ten students each. Each cluster would be be guided and arbitrated by a university appointed mentor. At least one member of a cluster would have a specific entrepreneurial venture in mind or a launched startup in its initial stages. Members of a cluster would become the new startup’s board of advisors and help in their varying capacities to further the entrepreneur’s venture. As the venture grows, members of the board of advisors can opt to work for the new entity or start their own venture within their same cluster. The University would act as an independent arbitrator to ensure members adhere to a clear set of rules and contracts.

On an interesting side note, one individual admitted that if a cluster were to help him launch his dream construction business, he would most likely leave the cluster and not return the favor. His revealing comment confirmed the inherent distrust among his peers, which our facilitated discussion found to be primarily caused by the lack of an independent judicial system in the country. His comment re-enforces the University’s role as the cluster’s so called ‘mini judicial system’, one that is independently operated. Initially the process will most likely be an uphill battle but after a few success stories should convince others of the many benefits that can be gained from trusting each other.

Although our time ran out, other questions remained unanswered that could serve for future facilitated discussions. For example, how should the contract among members be drafted and how should the spoils and liabilities of a successful launch be structured to ensure a sustainable business? Of course, securing funding for mentors, garnering support from government officials, attracting outside investors, and designing an eco-system for future entrepreneurs are important topics too. After the discussion ended, the enthusiasm from both the students and faculty was evident by the clusters that began to form immediately among them.

As I listened to their animated voices, I could not help but think how a this two-hour discussion with a sample of prospective local entrepreneurs could potentially change the course of a nation. Hopefully, members of the IMF and other international financial institutions can learn from this case study and consider including a similar cluster program as a funding requirement for young democracies.

© 2014 Tom Kadala

Greece: Land of Economic Tragedy or Entrepreneurial Opportunity?

Would an ancient Greek playwright like Euripides have ever considered Greece’s current economic malaise a source of inspiration for a modern day Greek tragedy? Probably not. …and yet, an audience for this unwritten, modern-day Greek tragedy has surged as members of the Troika continue to relentlessly pressure Greek politicians to address their overdue financial public obligations now teetering above 170% of GDP.

One can just imagine the utter frustration that Greece’s Government VP and Foreign Minister, Evangelos Venizelos, must feel every time he updates ECB officials of Greece’s economic progress or lack thereof. At a recent ECB review meeting, Venizelos, a burly looking character, bellowed a strong opinion in the nearly empty chambers of onlookers. He told anyone who would listen that to view Greece as the “central problem” of the European and global economy was “false, dangerous, and unfair”. When I read his quote in a local paper, it sounded like the perfect opening line for a riveting and engaging modern-day Greek tragedy, whose first scene might begin as follows:

A Modern-Day Greek Tragedy
As the sun sets over the Athenian skyline, scene one begins. A spotlight, as though originating from the night sky, shines brightly upon the Acropolis. The stage is the city of Athens, while the audience is a virtual network of headline news readers who watch with great anticipation for clues on how this extraordinary Greek tragedy will unravel. 

The first scene begins with a narrator’s soliloquy on Greece’s current financial woes. In a monotone voice, he tells the audience that Greece is in debt up to its eyeballs. The country of 10 million inhabitants owes over 317.31 billion euros plus interest to European bankers and other investors, …which translates to a shared debt of over 31,731 euros per Greek citizen. With unemployment at 27.8% and almost twice as high among its youth (58%), the Greek population has a slim chance of ever paying back its creditors. Increased austerity measures have helped reduce the need for more debt but have done little to address the amount the country owes overall. The severe cut backs have made Greek everyday life exceedingly difficult by spreading public misery, triggering social unrest, encouraging talent drain, and fostering capital flight. 

In a baffled voice, the narrator turns to the audience and asks the following questions:

If austerity has truly brought the Greek people to a dead end, what can Greece’s leadership do today to help secure a better future? How can their government policymakers attract foreign direct investments, create local employment opportunities for its citizens, and eventually reignite a new and sustainable Greek economy? Are we doomed or is there hope among us?

Suddenly, the silence is broken. From the audience, a group representing the future of Greece, speaks out loud. Their message is direct. Their recommendations spot on and their intentions, genuine. They are none other than representatives of Greece’s young professionals.

A Dynamic Facilitated Discussion
Unwittingly scripted into this next scene, I arrived in Athens for a last-minute business trip earlier this year. Prior to my departure, I had asked various groups of Greek young professionals through LinkedIn and other sources to meet with me for an informal discussion. For nearly two hours, we chatted candidly about the future of their Greece.

They were an eclectic bunch, fifteen in all. They covered a wide range of backgrounds including post graduates, young entrepreneurs, teachers, and professionals working in the private sector. Many had spent time outside of Greece either studying or working internationally. For them, Athens was their home, and they had a vested interest in her future. I agreed to write an op-ed expressing their views so their collective recommendations could be read globally.

I began our facilitated discussion with a hypothetical question that went as follows:

If this Group was offered access to a 100 million euro fund to spend in any way they chose for the betterment of Greece, what would they do first and why?

The Group offered three suggestions, which together revealed some fundamental issues that go far deeper than the well-documented mistrust between Greeks and their government. First, funds should go toward changing Greece’s educational system and specifically toward the placement of more non-Greek teachers. Group members felt that the practice of recruiting teachers from the same student body had potentially fostered a myopic view among Greek academics. Bad teachers who have little fear of losing their jobs are rarely challenged by outside peers nor formally evaluated by their students for their comments and suggestions. With a strong bias towards ‘teaching to the test’, teachers have become unchallenged, while students have lost their genuine desire to learn for the sake of gaining new knowledge. To make matters worse, students are never certain if and when they will graduate as teacher and student strikes are common.

Exposed early on to disinterested teachers and unpredictable graduation dates, Greek students have developed an inherent dislike to academia. Their disdain for their educational system has resulted in a long-standing rift between industry and academia, one which has severely lessened the government’s support and industry interest in the development of Greek-based R&D initiatives.

From an early age, children are taught to aspire to public sector jobs. These jobs form part of a government promise that offers lifetime, financial security for its citizens. Aiming for a different career path is considered out of the main stream. Under these preconceived notions, entrepreneurship ranks low as a worthy career among Greek family members. They view young would-be entrepreneurs as fools rather than business pioneers. In fact the literal translation in Greek for entrepreneurship is ‘business man trying to do something’. …they just don’t know what that might be!

Not surprising, the second suggestion for the allocation of the hypothetical 100 million euros was to boost the poor image of entrepreneurs within Greek society. At first I thought the Group’s suggestion would also include financing for an entrepreneurial eco-system which might include a startup incubator and an innovation center. Instead it focused entirely on addressing the severely marred image of entrepreneurs within Greek society. Intrigued, I verified this stigma with other young Greeks I met during my trip and found that indeed it was true. They also felt like ‘social outcasts’ who preferred not to share their dreams with their respective friends and families.

Where American entrepreneurs relish the rebellious freedom associated with entrepreneurship, Greeks do not. Greeks rank social acceptance of their entrepreneurial dreams as a top priority. Not addressing this social concern first could significantly lessen the long-term effects of any experimental entrepreneurial program. Certainly much more can be read into this social angst, and I encourage readers to delve further into this discussion among their friends and colleagues to explore innovative approaches that will turn the tide of traditional thinking.

The third suggestion for the fund was expressed as an off-handed comment but nevertheless unveiled some valuable truths. To the Group funds should be spent to create a new and independent political party, one that would be open to delivering new government promises for financial security that were not associated with a position in the public sector.

A New Normal
Undoubtedly the Troika’s demands have forced layoffs and salary cutbacks within the Greek government that have jolted the fundamental foundations upon which Greek life has been based for decades. Today, a new normal is evolving between traditional Greek  family expectations for job security and government promises. Neither has experience navigating through these troubled waters and as a result blame the other for Greece’s severely weakened economy. Workers strike frequently, making matters worse, while lawmakers struggle to acquiesce to the demands of their key industry groups. Last year alone, the government published over 240 legislative reforms, which created havoc among business owners and investors who remain on the sidelines awaiting greater economic and political visibility from their government.

The Group’s Recommendations
Hanging Merkel in effigy may help release some anger among the Greek population but as the Group pointed out, there are better ways to deal with the current crisis; however, first things first. Steps to favorably reassess the role of the entrepreneur in Greek society will very likely spark a cottage service industry of business coaches, entrepreneurial therapists, web designers, mentors, and more. Their growing presence will encourage other young adults to consider entrepreneurial pursuits, while simultaneously, reverse the current ‘social outcast’ stigma associated with entrepreneurship. If supported by favorable policies and legislation, Greeks living abroad may see this initiative as their calling card to return to Greece. Their expertise, networks, and enthusiasm should further unleash the many innovative capabilities currently bottled up within the Greek population.

The Group felt Greece could one day become a low-cost solution for big data and data analytics services globally. Just as India captured the call center and IT sectors, Greece’s mathematical prowess, recognized throughout history and the world, could drive both the low end side of the business where big databases require meticulous ‘cleaning’ as well as the high-end side of the business where sophisticated algorithms for machine- to-machine communications among devices or robots are required.

Institutes for Excellence
The Group suggested the development of an independently operated Institution for Excellence or IE whose purpose would be to teach and mentor students on the educational tools and skills needed to launch a big data and data analytics eco-system, specifically a human capital engagement research center. The Institute would reside within an existing university but operate independently. Their campus presence should reignite a new sense of purpose at academic institutions, one that industry could value and be willing to support financially. The Institute would have to be fully insulated from political influence and be governed through an independent board whose members represent its constituents equitably. The IE’s footprint should be designated a tax-free zone to help students finance their startups. Startups that reach a specific threshold in sales would be spun off into the Greek economy under a gradual legislative assimilation process.

Funding for an Institute for Excellence could come from three sources. First, from Greek diaspora who may be willing to return to Greece and actively participate in a teaching/mentorship program. Second, from a modified tax amnesty program similar to one implemented in the UK where tax avoiders can come clean with their overdue tax bill by investing in qualified startups. To help Greeks make the transition to entrepreneurship, however, this tax amnesty program could be further simplified by issuing shares from a fund whose charter includes the establishment of multiple Institutes of Excellence throughout Greece and, potentially, other countries.

A third funding source would come from international private equity funds whose involvement could lead to future investments in the IEs startup companies and relevant initial public offerings or IPOs at both local and global stock exchanges.

Existing organizations such as MIT’s Venture Mentor Service ( http://vms.mit.edu/) can be tapped for guidance, know-how, and strategy. As is often the case with entrepreneurship, the initial phases for proof of concept are the most difficult, however, there is little doubt in my mind that the 15 Greek young professionals who worked through these ideas with me in less than two hours can lead this charge. If given the chance, they and their peers could offer Venizelos with another set of talking points that will change the Troika’s next discussion from one of exasperation to one of opportunity fueled by sustainable economic growth.

© 2014 Tom Kadala

Improving the Odds of Entrepreneurial Success by taking a closer look at MIT’s Eco-System

If you were sitting at a Las Vegas gambling table with a 3% chance of winning big, would you continue to play or fold? Guessing your likely response, then let’s compare this example with launching a startup company. Statistics show that 97% of startups fail after their fifth year of operations with nearly two-thirds in their first year. If your response was to fold at the Las Vegas gambling table, then why are so many institutions encouraging students to launch a new company when the data shows that the odds are severely stacked up against them?

As though these numbers were not discouraging enough, then there are the private equity firms who search through the rubble of startups with the hopes of selecting a winner. Their expectations are even more somber. Of the thousands of business plans reviewed per year, startup investment firms will fund on average 4 deals per year, knowing all along that 3 out of the 4 companies will either fail or break-even after their first year of operations.

So, one might ask, can anything be done to improve the odds of success for a typical startup?

Lab to Market
At universities the term ‘lab to market’ is used to describe the worn path that many young companies must endure to become successful. Their humble beginnings tell a familiar story where an unexpected mishap in a lab inadvertently inspired their startup. For some, the inspiration came from a personal experience, such as in the case of DropBox’s founder, Drew Houston, who got tired of using USB drives to move files from one computer to another. Had Drew not been inconvenienced enough times, DropBox may have evolved differently or not at all. The key to his success was not just his personal revelation and commitment, but also MIT’s established eco-system that was there when needed to grow his nascent idea into a global company. MIT’s contribution was so crucial that one might ask, if every entrepreneur had access to a similar eco-system as MIT offers, would the odds of success improve? Surprisingly, the answer is ‘not necessarily’.

Ideation
Just as moving ideas from lab to market are challenging, coming up with the ideas in the first place or ‘ideation’ requires an entirely new approach and discipline, one that MIT addresses today with the first-of-its-kind ‘proof-of-concept’ center known as the Deshpande Center for Technological Innovation – http://deshpande.mit.edu/.

Recently, I attended an awards reception to honor the 2013 winning teams who were approved for nearly $1m in grants. That evening the lobby of the Media Lab (where the event was held at MIT) was buzzing with sponsors, investors, students, faculty and other interested parties. Hoping to be discovered, the teams were on hand to display their progress and answer questions. Unlike a traditional startup competition that select the best business plans, this event focused on the teams with the best business ideas. Appreciating the difference between both ideas and plans is key. Ideation occurs primarily at the very beginning of the entrepreneurial process, while business plans that build upon proven ideas come later.

When Drew Houston stumbled upon his vision, DropBox was just an idea, an idea that could have easily slipped out of his mind had it not been for a timely injection of funds to nudge him along to help him prove his concept further. That nudge, that tap, that light push made all the difference. The timely urgency to nurture ideation at this very initial point in the entrepreneurial process was what inspired Gururaj “Desh” Deshpande and his wife, Jaishree, to donate $17.5 million to launch the Deshpande Center at MIT.

An Innovative Approach
At the reception I caught up with the founder, Desh, and asked him if he was pleased with the Center’s 10-year record of 110 funded projects with 28 successfully spun out companies. A successful entrepreneur himself, Desh seemed less interested in speaking about his Center’s extraordinary achievements than he was of the impact his Center had among the faculty and graduate students at MIT. To him the true value proposition of the Deshpande Center was less about granting awards to a select few and more on the number of applicants who applied. He felt that the Center’s application process forced researchers to view their work from an ‘idea to impact’ perspective, an approach, he felt, was uncommon among researchers. With his contagious smile, Desh boasted that it was not unusual for non-winning applicants to apply a second or third time.  Last year two such teams that despite not winning a grant from the Center, succeeded in launching their startups anyway. With a deep sense of pride, Desh relished the fact that his Center’s influence had achieved an equally positive impact with every applicant, regardless of who won a grant or not. Through his Center, Desh had created an ‘ideation culture’, one that is often ignored and yet intimately critical to the success of any startup/eco-system.

Surely the odds of entrepreneurial success should improve if more startups had access to established eco-systems, especially those that support ideation early on. But perhaps the lesson to be learned from MIT’s Deshpande Center’s story is less about funding ideation grants and more about giving entrepreneurs a second or even a third chance to prove their concept. Just think how many fantastic ideas are tossed aside and lost forever simply because a business or grant contest is designed to select only three winners?  …or the thousands of business plans tossed in the garbage of an overwhelmed angel investor? …or the business plans that are rejected because of an entrepreneur’s poor presentation skills? Imagine what would happen if one-quarter of the startups presented to a private equity investor were randomly awarded a Deshpande Center-like financial nudge for further proof of concept. Maybe then the odds of succeeding as an entrepreneur would truly improve.

© 2013 Tom Kadala