If the World Were 100 People

The population of the world as I write this, at CET 8 PM on Tuesday March 29th, 2016,  is estimated to be 7,411,904,385 people. At the dawn of agriculture, about 8000 B.C., the population of the world was approximately 5 million. Over the 8,000-year period up to 1 A.D. it grew to 200 million, with a growth rate of under 0.05% per year. At that time 45 million of those people, or in other words more than 20% of the world population, lived in the Roman Empire.

A tremendous change occurred with the industrial revolution. Higher standards of living and better healthcare increased people´s life span and allowed for larger families with more children surviving to fertile age. Whereas it had taken all of human history until around 1800 for world population to reach one billion, the second billion was achieved in only 130 years (1930), the third billion in less than 30 years (1959), the fourth billion in 15 years (1974), and the fifth billion in only 13 years (1987).

In the history of our species, the birth and death rate have always been able to balance each and maintain a population growth rate that is sustainable. Then during the 20th century alone, the population in the world grow from 1.65 billion to 6 billion, and at present we are 7,4 billion people. This overpopulation is an undesirable condition where the number of existing human population exceeds the carrying capacity of Earth.

Growing advances in technology with each coming year has affected humanity in many ways. One of these has been the ability to save lives and create better medical treatment for all. A direct result of this has been increased lifespan and the growth of the population. All humans are born equal, yet we still remain very far from equal opportunity and equal treatment of all people.

7,4 billion people. This number is so big that it is impossible to comprehend. However if we look at percentages, if the population of the world was only 100 people, what would society look like?

This is shown in the smart video here below, which is written and produced by Gabriel Reilich and released on the internet a couple of weeks ago.

If the World Were 100 People

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What a consultant learns from building a house

I am moving. My wife and I lived in the current house for 11 years, and we are moving closer to her work. The new house will be 30% larger, and a whole lot nicer. The big difference is that we are building it from the ground up. So we choose the floorplan, exterior brick color, hardwood flooring, lighting, fixtures, tiles, everything. It’s fun and exhausting.  A 4-5 month process which honestly, reminds me a lot of consulting.

As a customer with a big purchase (same as a good size consulting project), how did I feel throughout the process?  Introspective questions about consulting in red.

1. It starts with logic. We spent months visiting different locations and builders. We had a list of criteria ranging from house location, size, layout, lot, price, and finishes.

• Used zillow.com to look at comparable prices
• Looked at the county’s zoning plans to see where the new roads would be built
• Talked to realtors and read reviews online on the quality of the builders.
• Talked to friends who built houses. Did the research

Do we make a super logical case for the client’s to buy from us?  Is there a clear return-on-investment? If the client wanted to explain to his/her boss WHY they should hire us, is that message easy to tell? 

2. Of course, emotions matter. We first thought of moving about a year ago – but instead used that money to buy another rental property. Priorities changed, then I got an email saying that the last lot in one of our “target” neighborhoods was on the market. L.A.S.T. C.H.A.N.C.E. and I remarked to my wife, “I don’t want to wait another 5 years to live in a house that I love.” That’s not really logic, right?  What a crying baby.

Do we understand the client’s pain points? Do we know the source of the client’s heart-ache, or fear. Have we addressed the head,heart, and hand of the problem?

3. First impressions matter. Of course the model homes where the sales office is located, looks amazing. This model home was 60% more expensive than the one bought – but of course, customer anchor on what they see on the showroom floor.

Are the proposals, marketing materials, and qualifications impressive?  What is the first impression the client gets from our website, conferences, and interactions? Are they as impressive as this model house?

4. Team of professionals. During the process, the salesperson, the designer, and the builder were all professional. They listened well, demonstrated their experience and gave me good counsel. More importantly, they acted as a cohesive team complimenting each other’s work and implicitly giving me the confidence that I made the right choice.

Are we supportive and complimentary of each of our team members? Do we know what other people do and direct the client to the right place? Does the client feel like we are providing a total solution – or just continually “passing the buck” to someone else?

5. A concierge experience. This house is a middle-of-the-road customized house. We chose a lot of the design feature, but we did not create the architectural plans. In other words, 80% of the plans are set, and we get to alter the 20% which is most obvious to your eyes. . . color, design, electrical outlets, cabinets, countertops, fixtures, lights, etc.

Still, the sales, designer, and builder made us feel special.  They have the difficult job of making a routine task – remember there are 50+ of these homes in the neighborhood – feel like a customized concierge process.

Are we making this a unique experience for our clients? Do they feel “special” and catered to?  Do we rely too much on templates, and copy/paste materials? How to help them feel like they are cared for?

6. Keeping the timeline. The builder was a bit maniacal about the timelines. They made sure to remind me that the design selections had to be done by January with materials ordered. The walk-through for the electrical, plumbing, and mechanical had to be done by March. It was a drum beat of deadlines. They kept the process moving. This all required sacrifice – multiple days off of work for just the design center visits – but kept us engaged and working with the builder.

Do our statements of work (SoW) accurately convey the timeline expectations? Are we asking for enough accountability from the clients? Are we just letting the timeline slip because we don’t want to offend the client – at the expense of project and profitability?

7. It always costs more. We got an enormous 75% discount on $ – -, – – – of upgrades, and yet, we blew right past that amount and spent even more. It happens. There is always more that you want done with the house.

Are we pricing the work so that the client can “add on” more work and features, if they want to? Does the quality of the work, and the ability to get more results, create incentives for them to buy more? Is our work worth buying more of? 

8. Surprises suck. Even though we communicated continuously, there were still surprises. . . things not included in the price, features that we could not have, and even a  miscalculation in the price.

Are we unknowingly or unnecessarily surprising our clients?  What are we doing to set expectations and exceeding them?

9. Beware of self-doubt.  The house is being built and we are excited about it.  And yet, we still went to an open-house for a comparable house in a neighborhood that we have been watching. Call it buyer’s remorse or just self-doubt. We want to know that we made a good decision. We are gauging our opportunity cost.

Are we making sure the client is saving face?  Are we making the client successful? What can we do to continually remind the client that they made the right choice?

10. Being a part of the process. Watching the house being built is one of the most satisfying and cathartic parts of the process. It’s deeply satisfying to see the quality of the workmanship behind the walls. The builder spent 90 minutes walking us through the house and showing us how they reinforce the beams, caulk the seams, and lay out the electrical. It makes you proud of the house, and more importantly, your decision.

Are we sufficiently showing the client the quality of the work throughout the process? Are we just disappearing for a few months, and surprising them at the end with a deliverable? Are we getting the client’s engagement throughout the process?

What is the last big decision or purchase you made and were there consulting lessons to learn from it?

Related posts:

• Can you delight your customer like this street artist?
• Consulting advice: Be, do, say
• Links

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The REAL Number That Most Consultants Aren’t Talking About

If you’re like me, you’ve probably been seeing a lot of people throwing out a lot of different numbers online. They like talk about how much revenue they’re making, how many clients they’re working with, and boast about big numbers. But here’s what most people aren’t telling you: Just because someone generates a lot of […]

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Rolling Stones in Cuba: Glasnost

Cuba Glasnost. This is HUGE news for the US, Cuba, and the world. The United States severed diplomatic ties with Cuba and had a trade embargo for 50+ years. While only symbolic, President Obama’s visit and the concert by the once-banned, iconoclastic Rolling Stones is monumental, exciting, revolutionary, and promising. Embassies have opened up again, and Cuba is no longer on the list of countries the US believes supports terrorism. Small wins.

The Economist (yes the fastest way to get smart on any topic) makes a few savvy points on what is driving this rapproachment with Cuba here:

• The US trade embargo never really worked; it just hurt everyday Cubans
• Latin America see the US stance on Cuba as imperialist – a shadow of the cold-war, and pretty foolish
• China has been in favor with Latin America for the last 10 years, as China became a huge trading partner (raw materials); anti-American sentiment has grown
• Venezuela aid to Cuba ($1.5 billion) is risk as Venezuela’s economy sinks (again)

Mr Obama’s diplomacy leaves a choice for the next president: turn your back on Latin America and feed its resentments and failings, or help it become America’s front yard, a region of increasingly prosperous democracies linked by economic and political ties. The visit to Havana is a welcome step down this path.  – Economist

Cuba is a huge business opportunity. There are 11 million+ Cubans with 75% of them under the age of 55 years old. The GDP per headcount is absymally low, less than $5K and yet Cuba has so many reasons to be optimistic on a more liberalized future:

• #2 globally in education
• #2 in physicians per 1,000 population
• 90 miles from the US, the largest economy in the world

Biotechnology. A Brookings Institute report (somewhat dated 2013),says that the Cuban biotechnology industry is impressive and is comparable to one of the largest US biotechnology firms or a mid-sized international pharma company.  Not bad. . .

The industry employs about 10,000 people, of whom more than 3,000 have university degrees, more than 500 have masters degrees, and more than 250 have received PhDs in science. Their work is done in about fifteen separate facilities that operate in concert, but apparently semi-autonomously. More than 40 products and technologies created by the industry are currently in use. The industry now produces 33 different vaccines, 33 anti-cancer drugs, 18 products to treat cardiovascular disease, and 7 drugs to treat additional diseases.

Travel to Cuba. No surprise that Americans will want to visit Cuba – a large country only 20 minutes by plane from Miami that has been “off-limits” for half a century. The Economist shows that in 2015, there were 150K+ American visitors to Cuba.
Can’t fly there from the US.  I went to Delta.com to try and book roundtrip tickets to Cuba, and I guess we still have to wait. Open embassies, but no direct flights yet.

Oddly, you can cruise there.  Apparently, it is okay to cruise there from Miami. This cruise line has 7 and 10 days trips. Not sure I want to site-see in Cuba for that long.

So far, direct foreign investment = nothing.  Looking at this graphic from the Financial Times, it’s clear Cuba has not done a good job of attracting capital.  Less than the Dominican Republic and Jamaica. . . . really?

Hard to hire Cuban workers.  The Marriott CEO notes that Cuban desperately needs foreign investment, technology and know-how, yet, the laws make it hard to do business there. Apparently, the government dictates which people can work for the company, and all wages go to the government first. . then the government pays the employee. It is like a government-sized staffing agency. . . which probably keeps WAY more than 30%.

It’s very promising, but a long-haul. Clearly, this is the start of the start. Most Cubans make less than $2K a year, and the US government has to repeal its embargo, and the Cuban government is still a one-man show.  As one trade consultant mentioned, companies need to think with a 10-year time horizon.

Related posts:

• How big is the Chinese economy?
• How big is US foreign aid?
• Links

 

 

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Telling Stories by the Sea

The Hague knows the value of telling a good story

So much so in fact, that the city’s marketing team has created the ‘Bloggershuis’, a dedicated space where visiting bloggers can stay while they discover all that the Hague has to offer. As an added bonus, the Bloggershuis is situated right on the beach!

Placesbrands talked to Mieke Smid, public relations manager at Den Haag Marketing, to learn more about the Bloggershuis project, due to launch this summer.

Pb: What gave the city the idea for the Bloggershuis?
Mieke: Having our own Bloggershuis was on my professional wish list for several years now. This was after we heard about the first successful initiative of Blogville Emilia Romagna in Italy. But we, The Hague Marketing, the city itself and the municipality, weren’t ready for this kind of initiative yet, and we were still searching for the ultimate home to profile The Hague as a city by the sea. Now, with this beach house, our relevant experiences with bloggers & vloggers over the past few years and the ability to monitor social media properly, have made 2016 the year to open our Bloggershuis, the first in the Netherlands!

What are the unique selling points of The Hague?
The Hague has a few unique selling points: we are the only Dutch city by the sea, we are the international city of Peace & Justice (with the Peace Palace as an icon) and we are a Royal city, The Hague is where the Royal family live their lives and work. That has been the case for centuries now and you can sense the Royal allure in the city.

How does the Bloggershuis tie in with all this?
The Hague’s Bloggershuis is a beach house on the beach. This is the perfect tool to profile  and position the city as a city by the sea! It shows that you, as a tourist, can combine two type of destinations within one trip: a beach holiday and an interesting city trip.

“The power of this bloggers house is that other people will tell the story for you. How great is it that this can be done from a building on the beach in the only Dutch city by the sea?”, said Marco Esser, director of Den Haag Marketing.

What sort of stories do you hope the bloggers will write about?
We’re looking for different kinds of stories, destination reports from the real destination geeks, and stories by niche bloggers on food, arts & culture, festivals, sports (sailing/surfing) , lifestyle and beauty or shopping. With must sees like the Girl with the Pearl Earring from the famous painter Vermeer, The Peace Palace, our Royal palaces, 11 kilometres of beach, the Victory Boogie Woogie or the museum of Escher, the range of stories can be very wide!

What do The Hague residents think of the Bloggershuis idea?
The Hague residents are enthusiastic and proud! We’re the first to have a Bloggershuis, we can show the city that we love to influencers all over the world. We would also love to hook up certain bloggers (niche) with a local expert on the same topic. Several locals have already shown interest in this idea.

Does The Hague have any additional goals for the Bloggershuis initiative?
Our main goal is, of course, to draw attention to our city by the sea in a special way and a way that’s unique for Holland. We love to see and hear from other people talking about their experience in The Hague. We strongly believe in others telling the story of The Hague and we’re curious to see all the stories, pictures and videos from our visitors.  But an initiative like this one can only be a success when your own residents believe in it, and support it. So we’re also happy that it makes residents of The Hague feel proud.

The Bloggershuis will start up at the end of March on Kijkduin Beach in The Hague. It will be open during the 2016 beach season, exclusively for Dutch and international travel bloggers and vloggers.

This article was first published on PlacesBrands

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How to Face Your Fears and Overcome Them to Succeed

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“That’s What Google is For”

Over the last two weeks, this scenario has repeated itself a few times.  A junior consultant I am working with hits a simple roadblock and instead of reflecting on the problem and hunting out an answer, they pull the brakes and reply, “I don’t know how to do that.”  Hmm, I held my tongue for 3 seconds, then said, “That’s what Google is for”

It might sound like a flippant reply, but it is not. It is the truth. There is INFINITE access to information. You don’t need to buy a book, you don’t need to make a phone call. You don’t need to go to the library. All you need to do is get the Star Trek piece of glass from your pocket and look it up. Don’t forget the leverage model – use people’s time wisely.

It’s not a good sign. It’s shows a lack of rigor, thought-process, and discernment.  If you need help DEFINITELY ASK for it, but don’t give up at the first turn in the road.

• When you are digging a hole for a fence post, do you just stop when the dirt gets more dense? No, you keep digging.
• When you are studying a math problem, do you stop when you don’t immediately understand the logic? No, you keep pushing til you get it.
• When you can’t get the hotel wifi, do you give up? No, you find the answer.

Are you driving $10,000 day of value to the client? As a management consultant, you are highly paid, and it’s not okay to ask dumb questions. Gotta be crafty enough to answer simple questions. Look it up on Google. Think about the problem. Reach out to your network if you need to. Are you using your logic, network, research craftiness, and business acumen to take you further? Or are you giving up too early?

It’s okay to not know the answer. After all, our clients hire us to tackle the ugly, complex, political, persistent, and cross-functional problems. If the problems were easy, they would be solved already. It’s okay to not know all the answers.

• When you are asking open-ended questions in a client interview to solicit feedback and open the interviewee up.  Build rapport.
• When you are scoping out a project, defining the boundaries of the puzzle, clarifying what is in/out of scope.
• When you are seeking the guidance of an expert, or relying on someone’s advice, wisdom, and judgment that comes from experience.
• When you are directly asked by a client – and honestly – you don’t know

It’s not okay to be mentally lazy.  I know that in the politically correct work of uber-inclusion, it’s not cool to say people’s questions are dumb, but frankly – consultants are held to a higher bar. We pride ourselves on our ability to get smart quickly. If you don’t know how to do something (excel formula, approach to a problem, meaning of an acronym, ways to manipulate powerpoint), AT LEAST TRY to solve it by yourself first.

When I interviewed for my 2nd job, my soon-to-be boss made it clear that there would be lots of executive presentations. This is the book I bought the next day. No shame.

Ten years later, I was on a different project working for the Legal department of a large multi-billion $ company, and this was the book I read at night in my hotel room.

There is no shame in not knowing.  There is shame in not trying.

Related posts:

• Review: The 2016 Deloitte Millennial Survey
• Consulting is an apprenticeship
• Links

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Consulting Business Model vs. Online Marketing Hype

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The Chalk and Cheese of Reputation

Sometimes, the best way to improve your reputation is to contrast yourself with someone nearby who has a really bad one…

That’s what’s happening at the moment for Justin Trudeau’s Canada. While his southern neighbour shudders under the force of hatefulness that is Donald Trump, Trudeau was personally welcoming newly arrived Syrian refugees at the airport. What other head of state would do something like this?

But let’s first go back to the bad side of things. In case you weren’t sure, that’s Trump. For months now, the billionaire presidential candidate has been declaring ever-increasing negative rhetoric about refugees and immigrants. First it was Mexicans, now it’s Muslims. Supposedly in response to the San Bernadino shootings, Trump has stated that all Muslims should be banned from entering the US.

This statement did not come as much of a surprise. Just days earlier, Trump had suggested that all Muslims living in America should be forced to add their personal details to a central database. This move, reminiscent of Hitler’s early policies towards Jews in Germany, horrified much of the world. However, there remained those who were not horrified, who actually support Trump’s policies.

His latest comments on Muslims have attracted widespread condemnation, in the UK notably the ire of unlikely candidates such as David Cameron and Boris Johnson. The latter said he ‘won’t visit New York because Trump might be there,’ But, despite global condemnation, Trump remains popular among a certain segment of American society who fear the ‘Other’ and admire Trump for ‘speaking his mind’.

Journalist Barbara Walters recently interviewed Trump. Here’s a short sample:

Walters: “Are you a bigot?”
Trump: “Not at all. Probably the least of anyone you’ve ever met.”
Walters: “Because…?”
Trump: “Because I’m not. I’ve got common sense. I’m a smart person.”

Trump’s comments have even alienated some of his Muslim business associates in the Gulf, notably the boss of Landmark shopping malls, who announced that his company would remove all Trump branded products from its stores across the Middle East. The residents of Istanbul’s posh development Trump Towers aren’t too happy either.

One Istanbul resident, Melek Toprak, told the New York Times recently: “I now feel ashamed to live in a building associated with such a vile man.”

In stark contrast, Canada has emerged as a real do-gooder, not just compared to the US but by anyone’s standards. Since Trudeau was elected, he has made a swathe of policy changes and announcements, such as the decision to withdraw from airstrikes on Syria, and to allow 25,000 Syrian refugees into Canada. These moves are starting to solidify Canada’s old image as a benevolent, inclusive nation. Arguably, Trudeau’s actions are pulling Canada’s reputation back from the brink, undoing much of the damage caused by his predecessor Stephen Harper.

In terms of nation brand, Canada currently ranks 12th overall on the Good Country Index, a ranking of countries that do the most good for the world as a whole. The US, in contrast, stands at 21st place. This is based on data from last year, so it will be interesting to see how the results change in next year’s edition of the ranking.

Simon Anholt, creator of the Good Country Index, commented via Twitter: “I’m greatly relieved that [Canada] is reengaging with the world.”

But while Canada continues to spread goodwill and re-establish itself in the global order, America’s political climate is bubbling over with vitriol. Islamophobia and discrimination have risen significantly. This does not bode well for America’s reputation, set as it is against a backdrop of wider racism and growing perceptions of a violent ‘frontier’ society. After all, this is the country where school shootings are a regular occurrence.

Many Americans (and indeed, the world) hope and pray that Hillary Clinton will secure the premiership next year. If that doesn’t happen, there’s an actual possibility that Donald Trump could end up leader of the United States. The consequences of that are indeed worrying. America’s worsening reputation could be the least of anyone’s concerns. The risk of the world’s most powerful nation becoming an intolerant, far-right state, led by a man whose comments have drawn comparisons to Hitler, is far more frightening.

This article was first published on PlacesBrands

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Pandora – great music, pretty terrible business

I listen to Pandora every day. On my computer, on my Roku, on my Amazon Echo, in my car, basically everywhere. It’s also a fun short-hand way to ask people what they listen to. My buddy turned me on to Carla Bruni, and it’s my “go-to” station.

Yes, the ads are annoying, but not bad enough to pay $55 a year for the subscription. Then the question enters my brain – how much money does Pandora make?

“Cutting to the chase”, Pandora loses money.

Lots of places online to look at financial statements (yes, I am sure banker-types would go to Bloomberg), but I like Google Finance. It’s clean, simple, and easy to use. Tip: don’t forget to click quarterly vs. annual numbers.

Pandora Income Statement here.  It looks like this.

• Revenues up considerably from 2012, from $427M to $1.1B (not bad, right?)
• Expenses up just as fast, exceeding revenues every year (uh, bad news)
• Net loss every year (completely unsustainable)

Pandora Cash flow here.  Where is Pandora getting their money from? How can you lose money each year and still survive? Some seriously disturbing things here. In 2013, Pandora got $377 from issue more stock. Then in 2015, they issued $301M in debt. Bad news on all fronts. Diluting equity holders by issuing more stock, and adding on more debt for a company that does not show profits.  Arrgh.

Pandora stock performance? We know that financial performance and stock performance are not always correlated in the short-term. So maybe Pandora stock has done well in spite of poor profitability and dilution of equity?

Nope? Since June 24, 2011 (IPO date), Pandora stock is down 19%. . vs. the S&P which is up 57%. Ouch, not good at all.

Check out investor relations here. Since we have already gotten an x-ray view of the company’s terrible financial situation, let’s see what the Pandora Csuite say about their business prospects and why you should invest your money in this stock.

Here is the Pandora management team’s logic:

1) Lots of people listen to radio.  91% of Americans (245M) listen to radio for 18 hours a week.  Of that, 80% is AM/FM “terrestrial” radio.  Lots of room for internet radio to eat into more traditional radio.

2) Pandora has 58% of internet radio. Market share has grown since the IPO and is more than double the closest competitor, Spotify.

3) Increasing the amount of usage. Pandora has done an admirable job of getting MORE PEOPLE to use the service  MORE OFTEN.

4) Opportunity for more Pandora in the car.  Pandora’s argument is that most people listen to radio in their car – and therefore – need to integrate into the hardware and grab more of this drive time. To me this is a bit of an odd argument as most cars have bluetooth and can stream from your phone AND lots of people listen to real time radio because they want to listen to talk radio or sports. . . not music.

5) Making money through advertisements. Looks like 80%+ of their money comes advertising on mobile and computer devices.

6) Big player in advertisement game. For mobile ads, looks like Pandora is one of the biggest DJ of ads – right behind Facebook, Google and Twitter.

7) Good customer base for advertising.  See the sample list of customers.

8) Increase RPM (revenue per thousand impressions). Heard of this metric before and found this definition online for RPM from Google Ad Sense:

"Revenue per 1000 impressions (RPM) represents the estimated earnings you'd accrue for every 1000 impressions you receive. RPM doesn't represent how much you have actually earned; rather, it's calculated by dividing your estimated earnings by the number of page views, impressions, or queries you received, then multiplying by 1000. For example: If you earned an estimated $0.15 from 25 page views, then your page RPM would equal ($0.15 / 25) * 1000, or $6.00."

From this slide from their investor relations presentation, I assume that Pandora believes they can offer advertisers a higher RPM than other means.

9) A list of strategic drivers? Pandora ends the presentation with a concept page – as consultants we have seen these pages too often – which is a mix of “drivers” which will help this business to grow – everything from new products to new distribution.

Consultant’s mind conclusion: Pandora had a huge first-mover advantage, but really did not do much with it. They are limited to 4 countries currently and being outmaneuvered by Apple and Spotify. They consistently loose money and seem to be staying afloat largely from paid-in-capital (stock issuance), and issuing more debt.

Apparently, Pandora is shopping itself around to see if there are any buyers. The stock is down 60% recently, and the market capitalization is around $2.5 billion – not cheap.

Thoughts on Pandora and who would make a good acquirer? Do you think Pandora has a future solo, or as a part of a larger media company?

Related posts:

• Quora: What is it like to work at McKinsey?
• 270 blog posts later, how it turns out
• Links

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The ACTION Approach to Growing Your Consulting Business

Hi. It’s Michael Zipursky from Consultingsuccess.com. Welcome back to the Consulting Corner, where consultants learn how to consistently attract their ideal clients and significantly increase their fees. Today, let’s talk about information overload. However, just learning more doesn’t ensure that you will actually be successful Information overload affects far too many consultants. People often believe […]

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An Uber Innovation Experience in Egypt

Taxi in Egypt

This week I have been working in Egypt. Taxi drivers here are notoriously know for ripping off customers, which I thoroughly have experienced. On the first day of my stay, I took three taxi rides in Cairo.

On the first ride, the taxi driver said he knew the destination. Then he set off across the Nile for 30 minutes in 180 degree the wrong direction. While we were arguing and he suddenly did not speak English any more, he stopped in the middle of the street and we were hit by another car from behind, driving into us at 50 km per hour.

My colleague Marco Kamiya and I walked away from the crash scene and found another taxi. Same experience. The second taxi driver also took us for a ride, or (which I doubt) did not know the location of the well-known  Government building in Garden City which we were going to.

The third drive, from my hotel to Ramses train station yesterday morning, was an equally absurd experience. Leaving the hotel with a good time margin for my train, I ended up running to enter the train just before it left for Alexandria. Why? Because my friendly taxi driver had taken me for a rip-off ride.

The Uber Experience

This morning I thought I had enough of Egyptian taxi drivers and decided to try Uber for the first time. I have had the app installed for a couple of years but not got around to use Uber before.

The app is very efficient and it quickly found my location and destination, and summoned a driver. He arrived in two minutes in a brand new black Chevrolet Cruise. The driver spoke excellent English and efficiently took me to my destination for about three euro. I was going to the faculty of architecture at Alexandria University and he even knew which campus entrance was the closest to this building.

In markets like Egypt, the south of France and other locations where taxi drivers have a habit of ripping customers off, Ubers centralised fee quotes and payment system will beat the official taxi drivers anytime, in both reliability and price. If the driver does not behave and the customer complains, then Uber takes him out.

The Battle for the Customer Interface

In the battle for the customer interface, Cairo taxi drivers will not stand a chance against Uber and the competitor Careem. The taxis pick up customers in the street, Uber is available anywhere for anyone who is online. Not surprisingly, A lawsuit is expected to be filed soon by an Egypt lawyer who will be representing taxi drivers against the increasingly popular companies. As Uber gains popularity rapidly in Cairo and Alexandria, I doubt the courts will support an outdated monopoly.

The poster children of the local digital disruption, Uber and Careem, shows how transport and services can be provided just as efficiently by new entrants tapping into privately held idle capacity as by existing providers and at a lower price.

In the time of the smart phone, firms which provides a digital user interface can enter markets with only minor investment in capital equipment. Uber does not need to buy cars, Airbnb does not need to build hotels or apartments, Facebook creates no content. Alibaba, the most valuable retailer, has no inventory, and so on.

Since the Industrial Revolution, the world has developed complex supply chains, from designers to manufacturers, from distributors to importers, wholesalers and retailers. It is what allowed billions of products to be made, shipped, bought and enjoyed in all corners of the world.

Then in recent times the power of the Internet, especially the mobile phone, has unleashed a movement which is rapidly destroying these layers and moving power to new actors.

The balance of power between the different service layers in the digitally disrupted value chain is a battle for control. Price-comparison sites first seemed to provide welcome traffic to airlines before airlines tried and failed to starve them of their business and promoted their own apps and websites as the preferred route.

In this new age of digital disruption, the customer interface is everything.

The new breed of companies is the fastest-growing in history. Uber, Careem, Amazon, Alibaba, Airbnb, Twitter, WhatsApp, Facebook, Google and so on. These companies are independent, thin user interface layers that sit on top of vast and costly third party supply systems, and they interface with a huge number of people, channelling customers’ orders to suppliers for a margin or kick-back at close to zero cost per transaction, and they create large volumes of online payments, ensuring transparent pricing.

In today’s hyper-interconnected world of global competition, if one domino falls, it will topple any number of others. The points of connectivity are so numerous and tangled that literally no-one is able to predict with certainty where digital disruption will take us. As people increasingly look online for low cost options, we continue the internet E-commerce revolution not only by convenience, but also by increasing price concerns.

And this is the nub of digital disruptions connection to slower economic growth, especially in the advanced economies of Europe.

Before Uber, clearly there was spare capacity in privately owned cars, which sat unused for many hours each day. So too with apartments that were empty and unable to be let out by the owners when they were not there.

Uber and Airbnb, and others disrupting asset markets, have tapped this idle capacity without adding to investment, and as they take business away from taxi companies and hoteliers, the rate of economic growth will remain held back. Do you see, dear reader, this unexpected Damocles sword of the e-commerce revolution?

The Economist Joseph Schumpeter taught us about innovation and coined the term “creative destruction” to describe the process of the old being constantly replaced by the new. In fact, he viewed the economy as somewhat like a living organism, constantly growing and changing to maintain its health. Schumpeter’s analysis has proved of lasting impact, and has garnered the respect and attention of those involved in economic policy. As humankind advances in maturity, overcoming the selfishness that threatens the life of successful economies and democracy, much of Schumpeter’s work continues to inform and support the development of a healthier, prosperous society that satisfies all people. Or, at least, that is the theory.

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Economic Assessment of Al Alamein New City in Egypt

Earlier today, on the grounds of employing the principles, strategies, tools developed in UN-Habitat’s Strategic Plan 2014 -2019, the Achieving Sustainable Urban Development project (ASUD) – one of UN-HABITAT Egypt’s projects- run a joint meeting between UN-Habitat staff supported by UN-Habitat Urban Economy and Finance Branch, the Egyptian national counterpart General Organization for Physical Planning (GOPP), the New Urban Communities Authority and Bearing Consulting to launch an economic assessment of Al Alamein New City at the north west coast of Egypt.

The economic assessment aims to analyse financially the future revenues of planning Al Alamein New City. An analysis that requires an understanding of the value chains and supply chains, supply/demand effect and the local/regional economic development at Al Alamein New City (ANC). Furthermore, the assessment aims at providing a continuous productive Urban Economy that will be proposed as a coherent strategy for Al Alamein New City development.

The meeting tackled the vision of the assessment, methodology, deliverables, context and approach. In addition, the participants discussed the data sources and stakeholders of this assessment.

The Alamein New City project component has witnessed distinctive achievements throughout utilising an advanced town planning methodology that secures broad social inclusion for local communities as well as it critically examines the Egyptian approach to new urban communities and its development aspects. In general, the Achieving Sustainable Urban Development (ASUD) project addresses capacity building in the field of urban planning, design, land legislation/Management, local economic development, youth employment and crosscutting issues such as mobility/energy.

The Achieving Sustainable Urban Development project (ASUD) implements pilot interventions in an integrated manner, through which key stakeholders and development partners work and learn as one community of practice. These pilot interventions focus both on city extensions in secondary towns as well as new city developments as city extensions.

Press release written by Engy Azzam, Publications Officer at UN Habitat in Cairo

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