Where business dreams come true...
The FHNW organizers welcome you to the grand diary of the Silicon Valley Study Tour 2018!
The Diary structure is such that for each company/university visit there is an article, followed by its authors (i.e. students to whom the visit was assigned), and some photos taken during the visit. For each extra activities only photos are shown. Visits are shown in chronological order from the first event to the most recent one.
Enjoy, and let yourself inspire...
Let's get started with...
Assigning Company/University Visit to Students - 27.08.2018
Each student was assigned to two company/university visits, for which she/he was in charge of (a) introducing the company/university reality to the rest of the students and (b) writing a short article.
The agency works with clients of all sizes; some big names such as Apple, Google, Disney, The North Face or The Home Depot certainly give them more exposure and attention in their activity in development and research for digital solutions for enhanced user-experience.
For example: The situation of their client Home Depot was that customers spent more time looking for items in the store than actually building something with the needed items. In the end they came up with a combination of pre-sale information and buy list on the company’s own app which automatically switched into store mode the moment the client walked into the store. This allowed tailored guidance to the selected items and drove up sales as well as customer centricity.
YML’s work also includes artificial intelligence (AI) and machine learning (ML) solutions, which they believe are fundamentally going to affect all business aspects and locations. Their own innovation lab with around 10 people has a crucial impact on the drive of the company: by constantly learning new technologies and adapt them into client projects.
The firm was entirely funded with private assets and family contributions and therefore was never dependent on external financing. The team is young and with an average age of 30 years hungry for new talents. Having an impact is what they believe the most crucial factor in keeping talents on board. How to get hired? The best way is to know someone at YML who can vouch for you and confirm your empathetic and prestigious character (maybe join the next Silicon Valley Tour).
Debriefing Session - Y Media Labs
On Tuesday 28 Aug, we got the opportunity to meet Alex Fries, who is the founder of Polytech Ecosystem Ventures, a venture capital firm that invests in mostly Europe based startups. We visited him at the very impressive Draper University, which creates heroes out of entrepreneurs! Draper University is a host to numerous startups, incubators and entrepreneurship programs.
Alex gave an interesting insight into the nitty-gritties of venture capitalism. He introduced the investment phases that start-ups can go through (FFF, Seed, BA, Series A, B) and explained, how he selects and allocates investment opportunities. For example, he prefers to invest in start-ups with multiple founders, with at least one founder being 30 or older. Furthermore, soft factors like the appearance of the founders and most significantly his „gut-feeling“ are important for a financial commitment.
His advice to the budding entrepreneurs is to not waste time in thinking too much and just start working on their very own startup pronto! The three important factors in launching a startup are risk, speed and flexibility. During the pitching sessions for new startups, Alex likes to see the passion, belief and the fighting spirit of the team members.
According to Alex, Europe counts with amazing engineers with great inventions, suffers though from a lack of appropriate salesmanship able to market such ideas. Furthermore, the highly conservative financial environment lead Europeans to invest less, slower and at later development stages with lower risks.
Alex tries to aggregate the American risk appetite with European innovative minds allowing start-ups to thrive through earlier capital injections, access to both American and European markets and access to Silicon Valley's network - a powerful mixture.
Debriefing Session - Polytech Ecosystem Ventures
Design Thinking Workshop - 28.08.2018
“We are an innovation Lab” – Gokul Rajaram, 2018
Early in the morning, it is Wednesday, the 29th of August. We met at the hotel lobby and took the bus to Square. Square is not very known in Europe, but still exciting for the students. It is a company in the fintech sector and their most successful product is the “magstripe”.
This magical tool allows small companies to quickly and easily accept credit cards anywhere. These companies can sign up for their free magstripe, which allows the owner to process credit cards without setting up the whole financial supply chain.
Furthermore, Square offers more services and products for financial services. Point of sale devices can be rented by businesses of any size to ease the payment process.
As soon as we arrived at Square we have been welcomed by the head of Caviar at Square, Gokul Rajaram. After signing the Non-Disclosure-Agreement – of course – we had to take a few selfies. A young woman accompanied us to the meeting room, where Gokul was already waiting for us. He gave us a quick introduction to the Square business, which was very interesting… But then we were interrupted by a classical San Francisco fire alarm drill, which was actually the first time it ever occurred. Lucky us...
While walking to the evacuation point few members of the group got to know some employees from Square as well as from Uber. One surprising statement was that it is very difficult to establish friendships, due to the frequent change of employees.
After this unpleasant interruption we hardly had any time to discuss the business model any further. One of the most interesting statements was that Square decided not to have a dedicated innovation lab but the whole company is innovation-driven.
The CEO, Jack Dorsey, who also founded Twitter in March 2006, cultivated a direct and personal relationship with the first customers of Square. His motto during that time was to acquire one customer at a time. After the first success stories of Square, Jack developed a strong, strategic view of the future market, visioning the iPhone jack to be eliminated with the iPhone 7 and the iPhone 7 Plus almost two years before the release. When the iPhone was released, Square was already prepared and developed a contactless reader using Bluetooth technology. This proves Jacks power to read future developments in the market.
On 29th August we met Can and Dorena who hail from Switzerland and moved to the Silicon Valley to achieve their dream of revolutionalizing the current education system. When you have an entrepreneurial dream to achieve, what better place than Silicon Valley!
Can and Dorena realised that the schools in the US are very expensive and many families cannot afford to pay for the education. They are building a unique futuristic school for children based on Virtual Reality, complete with a rocket ship and an adventure to the planets. They plan to conduct virtual courses for children between 8 and 13 years on various subjects in their VR school. The cost of education would be considerably lower than the current schools. In addition, the kids get to wear cool VR headsets!
Can and Dorena share a vision where the traditional schools would be completely replaced by virtual schools. We wish them good luck for their fantastic venture!
Rafael Angel Ochoa Galindez
On our fourth day in San Francisco, we were finally on Swiss soil again. This was possible through our host Swissnex which is located next to the consulate of Switzerland. Benjamin Bollmann presented us how Swissnex connects startups, universities and artists here in San Francisco - true to their motto "Connecting the Dots".
For start-ups, Swissnex offers a 3-week start-up program in which founders can benefit from their knowledge and network.
Furthermore, the last art exhibition, in which the participants could operate machines with their brain waves, sounded exciting. The collected brain data provided very valuable information for science, creating unexpected synergies with Swissnex's unique combination of science, art and technology.
During a short tour at the site, we came across their Wall of Success, where all successful startups that were in contact with Swissnex were displayed. Some of them are now well-known Swiss companies, such as the planning tool Doodle and the fertility tracker Ava.
Debriefing Session - Swissnex
Did you ever wonder where the ideas from huge corporations like Microsoft come from?
After several changes in the top-level management, Microsoft was facing serious struggles in their corporate strategy: Microsoft had issues to properly address consumer’s needs and to adapt to upcoming technologies and trends. Therefore, new approaches were needed to encourage employees to get new concepts and to trigger the necessary changes in corporate culture.
At Microsoft’s Garage we have been hosted by Kenny Spade. A sympathetic and geeky guy in his 40s. Kenny has been working for Microsoft for the last 10 years at different positions. Currently, Kenny claims to have the world's best Job: He is the garage’s program manager. The garage’s main goal is to provide a lab-like environment where employees can bring in their own ideas and learn how to use the technologies in a playful manner. The platform fosters new ideas which are later implemented in projects – If they are good enough. Employees are free to pick any product, market or platform (Android, iOS, Windows) they want to. Kenny stated that anything you learn makes you open for new ideas – and new ideas are good for business!
The value provided by the garage is not only limited to the ideas: It is also an effective measure to keep a motivating environment, where employees like to spend time on projects of their own interest and therefore increasing Microsoft’s attractiveness as an employer. As long as employees can fulfill with their main duties, they can spend time at the garage.
The garage has several hundred fruitful projects, which expresses the programs success.
So far, the garage has managed to change the company’s culture towards cooperation and is highly appreciated by both employees and managers.
Rafael Angel Ochoa Galindez
Presentation of Dr. Burton Lee, Stanford University - 31.08.2018
“The challenge for Europe is to create new business models which focuses more on data and not on hardware” stated Dr. Burton Lee, when starting his speech in front of the study tour group at Hotel Zoe in San Francisco. Dr. Lee lectures European Entrepreneurship and Innovation at Stanford University and holds a PhD in Mechanical and Electrical Engineering (Stanford, 2002) and a MBA in Finance and Entrepreneurship (Cornell, 2004). He is Managing Partner of a strategic, financial and technical advisory service company called Innovarium Ventures. He is considered one of the Silicon Valley’s leading experts on the European innovation ecosystem, startup and venture finance, corporate and university innovation, and government innovation policy scenes.
The presentation was all about the differences between innovation in Europe and the US, especially in Silicon Valley. One astonishing fact is that the ten most valuable companies in the world are located in either the US or China, but none of them is European. Dr. Lee believes that the culture and identity of a country can be a significant barrier to innovation, therefore leading to lower growth rates. Europe in general has more a manufacturing culture and is focusing on continuing the way they have ever done without the need of changing anything.
Professor Lee emphasized on one of the main key differences between the US and European economies, which is the structure of business ownership. The European firm culture tend to have more family businesses (SMEs), relying more on a classic and bureaucratic model. Thus limited the space for innovation, agility and in excelling in decisions, resulting in less venture capital coming into Europe. Nevertheless graduates in Europe tend to work for SMEs as they offer attractive work packages and stability. The way of doing business in Europe is much more long-term oriented and sustainable in comparison with the US.
As another differentiator between the two business cultures, Dr. Lee stated that “acquisitions are a tool for innovation” and Merger and Acquisitions drove Silicon Valley’s growth to a large extent. For example, Google acquired eleven startups only in the space of Artificial Ontelligence in the past five years.
Last but not least, he mentioned the importance of universities in the innovation process. Universities enable an environment of entrepreneurial and innovative thinking which is crucial for economic growth. In contrast to the US, where many of the global top universities are located, the European companies source their capital for innovation from the government.
06:15 AM on 4th of September 2018, 55 degree Fahrenheit and 4 Miles. We start the day with an early run, getting our bodies and brains ready for our visit to Swisscom's innovative outpost in Silicon Valley. After a short bus ride we arrived to the very heart and origin of Silicon Valley, the founding place of Hewlett-Packard back in the 1930s in the garage of a small, and for this area, typical single family house.
Jeffrey Gantner, the head of Swisscom's startup programmes USA, welcomed us to the Swisscom innovation outpost in Palo Alto, California. Swisscom runs the outpost in Silicon Valley since 1998 to scout fast improvement, new tech trends and new business ideas that could have an application in their areas of business. Therefore, the outpost is structured in the three business streams "Fast Improvements", "Venture Capital" and "New Business Model Ideas" which take dedicated care to reach the goals.
Furthermore, Swisscom partners with Swiss start-ups and corporations, providing them access to their Silicon Valley network and potentially new disruptive technologies and business models that could have an impact back home, in Switzerland. Swisscom also acts as an investor with venture capital and hosts the winners of the Swisscom StartUp Challenge in their business acceleration program at the Silicon Valley Outpost.
If you consider to go for your business idea and are even keen to create your own startup and you're seeking for the perfect environment and a platform to enable and to grow. Don't hesitate to take advantage out of the Kickbox program offered by Swisscom - and become an innovation pirate!
Jose Vaides (first one on the right),
Daniel Werner (second one from the left),
Gabriel Frey (first one on the left).
Debriefing Session - Swisscom
Extra Activity - Apple Park Visitor Center - 03.09.2018
According to many rankings Stanford University is considered one of the top 5 universities worldwide. Located right in the middle of the Silicon Valley in Palo Alto, the campus holds many different faculties in which informal work and collaborations is key for the success of this private university. All major work takes place on campus including Stanford hospital, which makes it easy for staff of the Department of Biomedical Informatics to get to data for research. This counts as most important factor for collaborations in multiple teams across the university. Physicians do not have to be convinced to make data science research. Research across disciplines is very well supported by bumping into each other which allows good ideas in different areas.
The openness plays a major role for innovation at Stanford. Another key aspect is the willingness of students and staff to bring a startup into life e.g. with a bachelor project. Commercializing ideas is socially embedded within the culture which somehow resembles the gold rush mentality. The first gold nuggets were found in Sacramento on the farm of John Sutter in 1848 (settler originally from Basel, Switzerland).
Common big data problems are also present at Stanford. Questions arise, however, when a lot of data is accumulated for fully automatic assessment processes. One limitation might be the possibility to pick the best drug for better classification of diseases and patient responses to drugs. The push towards precision medicine is clearly a driver for data driven analytics. Risk factors can be determined from these kinds of data analytics for better informed players in the health sector e.g. how long is the patient going to survive, is palliative care better, are physicians too optimistic?
Extraction of information from free text is another field to identify risk factors and give predictions upon doctor visits. The team around Dr. Daniel Rubin and Imon Banerjee continues their research and collaboration with industry partners such as Genentech, which became a subsidiary of Roche in 2009.
Another company visit led us to PayPal, a leading payment system provider, particularly online. After a short introduction of the company, various products were demonstrated and explained to us in the PayPal showroom during a good hour. The explanation of how the fraud detection system works was extremely exciting. With every payment with PayPal the buyer and seller are checked. In addition to countless other things, the height and angle of the telephone, the location of the user and the purchase history are taken into account. This data is used by neural networks and other technologies to determine whether the purchase is valid or not. Thanks in part to this very advanced system, PayPal only loses a quarter of the fraud losses that are common in this industry. Afterwards we had the opportunity to ask all our questions in a panel discussion with several PayPal employees from different areas.
The visit at PayPal was very exciting and impressive and we would like to thank again for the interactive demo and the openness towards all our questions.
Today, we headed to the Google Mountain View Complex. A small team from Google Developers presented the three subsidiaries of Google Developers Group, Google Cloud and Actions on Google. For Google Developers the main goals to interact with developers is to connect, engage, adapt, advocate. Interesting for us was Google Developers Launchpad which helps startups to scale and build great products by matching them with the people, network and advanced technologies.
We have learnt, that 10 % of every web search is done by voice command and it will rise in the future. Google Voice User Interface (VUI) can help users to interact with Google’s Assistant over phone, speakers, watches, laptops, TVs, and car. Developers cannot think in the exact same manner as they used to – they have to think outside the box. The structure and code of a usual thinking step is replaced by a dialog and a structure. This step can be done by the Google Dialogflow or by third party interfaces. User queries can be enhanced by using machine learning to understand the context of the users’ needs.
Lately, Google started to compete in the cloud market with their own services. They have special hardware, with which they want to have a competitive advantage in machine learning providing up to 520 teraflops. Another benefit on Google Cloud is the new Kubernetes platform which provides container-based deployment, which are easy to set up and manage. A lot of application like Couch DB or Cassandra are available ready to use on the marketplace.
Md Morshed Jaman Adnan
Nowadays learning activities for private parties are equally important as for companies, which support and engage their employees to acquire new skills and capabilities. The problem with this intention is that the necessary professional learning platform for a company’s staff is either not available or the necessary content-delivering sources are not implemented or are not being updated on a regular base. Although much content is already available on different sources, the relevant information has to be searched through various search engines all over the web.
Edcast provides a value-delivering ecosystem for learning activities to B2B-customers. Thanks to the constant searching activities of Edcasts machine learning algorithm and the defined learning topics of each user, Edcast is able to derive different services to reach the goals of the knowledge worker:
· Aggregation: Gathering relevant content from the intranet, external sources or additional providers.
· Personalisation: According to the individual need, Edcasts platform can provide recommendations for learning content
· Creation: Edcast customers have the possibilities to catch and distriputed their internal tactical knowledge into libraries on the platform and distribute them to further employees of the organisation.
Edcast allows the staff of a company to share their knowledge on a standardized platform. Therefore, only relevant information is available for other working colleagues, which helps to increase the performance and reduces mistakes and delays in business processes. Furthermore, the enterprises board management understands, on an integral base, current difficulties of the staff and can impose relevant improvements on company-wide level.
VoiceBase was founded in 2010 by Walter Bachtiger and is active in the area of speech-to-text, speech analytics, and predictive analytics. He hosted a hands-on start up session at the Santa Clara University to the FHNW Study Tour group and showed two sides of the startup story - the glittery marketing pitch & the brutally honest insights pitch. The company employs around 60 people and the company is now fully funded .
The glittery showcase for VoiceBase...
Walter emphasized that not the water of a water grid is precious, the pipes make the water grid precious. Text analytics has been done by all the major competitors in the Tech industry already in the past. But one niche in speech analytics has been identified by Walter. The Artificial Intelligence in their products extracts more than 150 data points from any call going through their engine, helping i.e. to predict the likelihood of a successful closing of the buying process during a call. Illustrated with the help of a Gaussian curve, Walter showed that 25% of all calls never succeed to closure, for another 35% you compete with the competition and the best will lead to a successful sale. This model has been used for one particular product (windows for homes) at Home Depot and has now been extended to other product categories and companies. The most interesting part of this feature is that now real-time text analytics can be performed during a call and the engine can predict with a high accuracy if a customer is willing to buy or to sign a contract. These calls can be directed to an end and the time of the sales person can be allocated to other customers. Clouds of Amazon or Google wiped out complete industries and organisations have to establish capabilities to withstand this pressure from those companies. By using their infrastructure, VoiceBase identified serious disadvantage of being rigged by these cloud infrastructures as well. To withstand, VoiceBase bought old servers to have them plugged in again into a server center without redundancy. VoiceBase cut costs per core by 80%.
...and the brutally honest near-death experience as a start up
To bring the biggest idea to the Silicon Valley it takes a lot of gut to do it. Leading a startup in his eyes is always a tightrope walk between hell and ecstasy at the same time. Usually, a startup starts with only the idea - no product, just a great pitch. So founders go to venture capitalists and start collecting investments and in his case suddenly win an award. You are on full spotlight, you feel awesome but you have to deliver. This also means you look out for resources like workforce. In the hiring process of VoiceBase, Walter let 10 candidates compete against each other during a 10-month trial period - for a single position. One guy from Russia was so reliable that he could beat a team of 10 people and is actually the man behind the whole programming team. In addition, also advisors had to compete.
A very important takeaway is that you have to lock in your employees. It is likely that big tech companies try to get them on their ship and if you do not have full trust or have them locked with stock options and dedication to the company, you will loose them. Walter brought up a metaphor that you always have in mind that you will land on the moon - faster than any other company - and communicate this message to your investors. Seed, A, B and C rounds can only be won by taking huge risks at any given point in the start up’s evolution. But he also underpinned that if you have an entire ecosystem where everybody takes risk then it mitigates risk. And competition can support business because they educate the market in favor of your own idea. Walter concluded with two prominent statements: go to silicon valley to shape the idea - and eat shit, fast!
Md Morshed Jaman Adnan
On our last day in the Silicon Valley we visited the startup accelerator Plug and Play. During a tour through the big vibrant site we noticed that most walls are covered with signs of the names of successful startups. The better known of them are for example PayPal and DropBox.
On the in-house wall of fame different famous people are captured with their congratulations, signatures and photos. Among them is the signature of the Pac-Man inventor Tōru Iwatani.
Multiple startups have the possibility to use workplaces at the site. In addition, many large international corporations are also represented at Plug and Play. To honor the best startups, Plug and Play offers the “hottest” startups a parking spot directly in front of the building. This is a big advantage since the next parking lot is a bit further away.
The highlight of the visit was the pitching session which we could attend. It was exciting to see the different maturity levels of the pitchers and their startups. Each pitch lasted precisely four minutes and was followed by a five minutes question session. We heard a total of ten startups mainly focused on Fintech.
The ending of the study tour couldn't have been better. We are inspired and look forward to returning to Switzerland.