Poster and Facebook cover image created for the Food Assembly‘s January event.
Monthly Archives: January 2015
Crowdfunding has hit the big time, but is it really about sharing?
Written for Tech City News and published here.
I headed home for Christmas a semi-willing participant in the ‘sharing economy’, having booked a car ride with a (thankfully non-murderous) stranger I found online. That’s what Christmas is about after all. Sharing, that is, not worrying about getting killed by people from the internet.
The trip cost me just £15, a steal compared to the £80 ticket for the train, plus it means I’m offering a small contribution to the environment by sharing the emissions, and making a new friend!
Sounds great, right?
But is sharing really caring?
Of course, it seems a bit strange that my earnings don’t make it that easy to take public transport, something we’re all paying for via taxation, which is perhaps the biggest unsung hero of our great global sharing experiment. But then, much public transport isn’t really public anymore.
It’s handy that a tech solution is here to step in and connect me with someone who has spare capacity, allowing them to make a little extra cash from their stuff. But, wait, isn’t sharing a not-for-profit activity?
Ridesharing is just one aspect of what we now dubiously call the ‘sharing economy’, along with everything from peer-to-peer lending and crowdfunding, online staffing, peer-to-peer accommodation, and music and video streaming.
Peer-to-peer lending and crowdfunding look set to see the largest growth between 2013 and 2025,according to the world’s accountants PwC, growing by an average 65% over this period. Based on search volume too, Google has already declared 2014 a “big year” for crowdfunding, with 21-times more searches performed this year than in 2013.
People power or private profits?
On the surface, crowdfunding, much like the other areas of this tech-enabled evolution, has all the hallmarks of “people power… [that] has the possibility of transforming the world for the better”, as Douglas Atkin from AirBnB explained on the launch of Peers, a ‘grassroots organisation that supports the sharing economy movement’. That’s an organisation incidentally backed to the hilt byevery US company that has an interest in ensuring that sharing pays.
Just this year, and in the UK alone, the wisdom and wallets of the crowd have brought FC United of Manchester to life, in a £51,000 bid to rival the might of corporatised football. They have also saved one of London’s vital inner-city farms, funded the build of a new public toilet in Worthing, and are now even being used by the UK’s only Green MP to raise election funds outside of trade unions and the private sector.
“2014 was the year that crowdfunding went mainstream in the UK,” agrees Phil Geraghty, MD of Nesta-backed crowdfunding platform Crowdfunder:
“Thousands of grassroots British ideas are becoming reality thanks to the people of the UK.”
However, beyond these projects for public good, many of which should arguably be funded by our increasingly shallow, but nonetheless shared public purse, doesn’t Kickstarter-style ‘sharing’ stink a bit of socialising the costs and privatising the profits?
Guise of generosity?
Kickstarter’s formation comes with a pleasant enough story, but it’s founders have now made a handsome $42m (from 2009 to mid-2014) off the back of others’ generosity. And one of the platform’s greatest success stories, Oculus Rift, got off the ground using $2.4m of public excitement and goodwill, only to be sold to Facebook this year for a ‘wouldn’t that be great if we all shared it?’ $2bn.
If not entirely a marketing tool for a product that could have been self-funded or found funding elsewhere, some of these platforms now appear merely to act as a pre-sales outlet.
The question for backers is not ‘can I make this happen?’, or about enabling others to access something truly life-changing, but is just about snapping up early access to more goods you almost certainly don’t need. And getting your hands on those tasty ‘rewards’ not typically associated with random acts of kindness.
While crowdfunding looks like an exercise in democratising access to cash, most entrepreneurs still come from affluent backgrounds, which inevitably mean networks brimming with readily-available money should you run into trouble, ensuring greater chance of business survival. And it’s the verytax-avoiding tactics adopted by high-tech companies invested in the sharing economy – Google Ventures in Uber, Amazon’s Jeff Bezos in Airbnb – that deprive the national budget of much-needed funds.
This then perversely creates at least some need for crowdfunding campaigns – to save public services and community organisations – representing an optional extra tax on the public.
Let’s get political
Some progressive thinkers, many of whom are sceptical about the benefits that Big Sharing from the likes of Uber and Airbnb is bringing anyone but shareholders, believe that the sharing economy movement has to get political.
By this, Rajesh Makwana, executive director of Share The World’s Resources, means “guarding against the co-optation of sharing by the corporate sector, while joining forces with a much larger body of activists that have long been calling – either explicitly or implicitly – for more transformative and fundamental forms of economic sharing across the world.”
While california-based sharing economy lawyer Janelle Orsi firmly advocates that companies in this area must be setup as cooperatives, writer Marjorie Kelly believes that there are a range of ‘for good’ models appropriate for this new economy.
Yes, I may just be becoming a little weary with ‘amazing tech crowdfund campaigns’ hitting my inbox trying to take people’s cash for things that the world definitely doesn’t need. But in the tech sector particularly, we have the skills, money, influence and, arguably, underlying intention, to make the world a better place.
Shouldn’t what we have learned to date, the platforms and underlying principles, be shared for the international common good, to address some of the biggest challenges facing our shared planet?
Or perhaps you just want to launch another taxi app?
Was 2014 finally, finally the year of mobile?
Written for Tech City News and published here.
If you’ve worked in mobile, you’ll remember that 2011, 2012 and 2013 were all ‘the year of mobile’, and with no jargon regulators to police what that meant, the declaration was met with nods, scowls or disbelief.
As well as being crowned the year of the selfie by Twitter, and the year of gluttony by CNBC, 2014 has yet again seen impressive highs among mobile’s key metrics. But is it finally, finally the year of mobile..?
Adoption and traffic
UK smartphone ownership is set to reach 80% post-Christmas, with a ‘saturation point’ of around 90% expected in 2016. The Internet Advertising Bureau reckons tablet penetration will tip 50% by the end of 2014, true validation for the device you never knew you needed.
Google’s Android platform continues to power more than 80% of the world’s smartphones and although Samsung remains the top manufacturer, its share of the market dropped from 32.1% in Q3 last year to 24.4% in 2014.
Apple’s share grew from 12.1% to 12.7%, with the remaining top five smartphone makers now all based in China: Huawei, Xiaomi and Lenovo. Record sales in emerging markets are now offsetting decline in Europe.
Mobile traffic has been threatening to overtake desktop since mid-2013, and, in Q2 and Q3, smartphone and tablet surfing on UK retail sites represented more than 50% of total traffic in two consecutive quarters for the first time.
Gartner forecast last year that the value of mobile payments worldwide would reach $235.4bn (£150.7bn) in 2013, representing a 44% increase on 2012’s $163.1bn. 37% of online sales in Q3 this year in the UK were made on mobile, 80% of which were done on tablets, with that figure reaching 43% in fashion retail. That’s growth of 4000% from the 1% made in 2010.
Gartner downgraded its prediction for contactless mobile payments “due to disappointing adoption… in all markets in 2012 and the fact that some high-profile services, such as Google Wallet and Isis, are struggling to gain traction”.
But the launch of Apple Pay in September looks set to take the service mainstream, with main rival Samsung now rumoured to be kick-starting its own version.
Given the lucrative position that owning both online and offline payments data offers, rivals are soldiering on in the US, including the big retailers with CurrentC, and the mobile operators’ effort, Softcard. However, news that the Weve payments solution, part of the JV between UK mobile operators, was being shelved back in September can’t inspire much confidence.
In its report on the opportunity of the so-called ‘sharing’ economy, PwC predicts that its value will grow from $15bn in 2013 to $335bn by 2025, equalling the revenue of traditional services like hotels and car rental.
Car sharing has been the biggest battleground in London, with the likes of Kabee, Hailo and new kid on the block, Maaxi, launched in October by Nat of the Rothschild banking dynasty, all fighting it out. This is all only slightly baffling given the range of other transport options in the capital!
Two major hurdles the report identifies, regulatory and scaling up, have both been poorly-cleared by 2014’s poster kids of sharing – Airbnb and Uber. Airbnb, which has ramped up its mobile efforts this year, has seen its users pinpointed, with up to 75% of listings in the city declared illegal.
In spite of it picking up terrible headlines in the past few months, Uber is now making its transition from being a noun to a verb, a sure sign it’s ubering its way to success, and the word is being usedleft, right and centre to describe Uber-like services in other sectors. As of December, it was available in 53 countries and, demonstrating there’s big money in, er, sharing, its latest round of funding, of $1.2bn, valued the company at more than $40bn.
Instagram just reached 300m users, overtaking Twitter’s 280m, proving that people do want to know exactly what other people had for breakfast, but now mainly in visual form. Instagram’s $1bn price, paid by Facebook for the image sharing platform and just 13 staff back in 2012, looks to have been a shrewd buy. Commentators are anticipating that it will make $100m per quarter, particularly after signing a $40m deal with Omnicom in March.
Facebook’s $18bn acquisition of WhatsApp in February has so far proved fruitless, with the company posting $15.9m in revenue, along with a loss of $232.5m, most of which went on paying share-based compensation. But Mark Zuckerberg and WhatsApp CEO Jan Koum are said to still be focused on building on its existing 600m userbase before they monetise.
Can ad-funded and freemium services last?
According to Ofcom back in April, two-thirds of apps downloaded in the UK are never actually used, with only 10% seeing regular usage. This is reflected across developed markets and may be part of the reason that Angry Birds maker Rovio has cut 14% of its workforce and Mind Candy saw revenue drop by a third during 2013. Both combine in-app purchases and ads, a business model that may well be unsustainable.
In contrast, music and video streaming services are booming, with YouTube the latest to announce it will be offering an ad-free, £9.99-per-month subscription service.
The slow death of the banner
Display ads are on the up, largely driven by video, native and rich media. Without a banner in sight, in Q3, Facebook’s mobile ad sales represented 66% of its $2.96bn ad sales, or around $1.95bn. At the same time a year earlier, mobile ads were 49% of its ad business, demonstrating the social giant’s successful transition to being mobile-first. Overall in mobile ads, search, aka Google, remains the dominant segment, representing 48.9% of total global mobile ad revenue in 2013, at $9.5bn.
Death of Nokia
To many, the death of the Nokia brand back in April symbolised the end of engineering excellence in Europe. And soon after making the acquisition, Microsoft announced 18,000 job cuts, 14% of its workforce, the majority of which were in its new hardware division.
Having cut almost 40% of its staff late last year and losing nearly $1bn, BlackBerry is seeing if a touch of nostalgia will alter its fortunes after it has sold out on pre-orders of its new, Classic handset. IBM, Dell, Sony and Philips have all likewise made huge hardware redundancies.
So 2014 was certainly a year of highs and lows for mobile; margins in hardware are clearly getting slimmer, but it’s not clear whether software businesses can generate equivalent value. The battle for 2015’s mobile tech profits will surely be fought in the cloud, particularly in enterprise, with the IoT, ‘sharing’ companies and those focused on emerging markets all tipped to win big.
Five New Radicals of the New Food Economy?
Written for the Food Assembly.
Innovation charity Nesta’s 2014 New Radicals list showcases 50 of the most innovative charitable or commercial ideas the world has to offer. The food and agriculture category has doubled since the list was first compiled, from three in 2013 to six in 2014, giving a growing sense that the new food economy is well and truly here. But the kinds of new thinking seen below also give some inkling of just where and how the gaps left by public sector cuts might be filled.
Bio-bean is the newest company to make Nesta’s list, founded just one year ago in London, and is looking to make something of the 200,000 tonnes of waste coffee grounds produced annually in the capital. Graduate co-founders Benjamin Harriman and Arthur Kay have already turned more than 30,000 tonnes of it into fuel, “helping to prevent emissions of methane, carbon dioxide and carbon monoxide” and are hoping to export the idea to coffee-guzzlers in the US and Europe.
Mazí Mas puts a socially responsible twist on the trend for pop-up dining in London by employing migrant and refugee women to come and cook food from their communities. Founder Nikandre Kopcke was inspired by her godmother back in 2012 to set up the social enterprise after seeing her efforts to help migrant women skill up. There are currently six female chefs who have made it from as far away as Brazil, Ethiopia and the Philippines to serve specialist dishes to sell-out crowds.
The Super Kitchen
Unemployed single mum Marsha Smith wanted to provide a communal space for families in her home city, Nottingham, to have a cheap and healthy meal: and with just £1,000, the Super Kitchen got cooking. Marsha’s social eating model, which has so far used six tonnes of food headed for landfill, has taken her on to present a TED Talk.
Fast-food shops are the love of many children’s lives but the bane of many parents’, and with little power to prevent them from opening near schools, community venture Box Chicken has stepped in to provide a healthier option. Giving it her seal of approval, Fiona Godlee, editor in chief of the British Medical Journal, says: “Rather than restricting takeaway food we should seek to transform it, by making healthy food as visible, tasty, and cheap as unhealthy food.”
Given that ‘meals on wheels’ provision has dropped by 63% in England, there will be ever-greater demand for social enterprises like the Casserole Club. The organisation aims to connect great cooks with lonely or vulnerable people who need a meal; 80 per cent of its diners to date have been over the age of 80. It costs around £4.90 for councils to provide a meal, so if 100 diners get on average two meals a week from a neighbour, Casserole Club will have saved councils at least £50,960 a year. The service is now coming to Tower Hamlets, Barnet and Staffordshire.