Yet another tipping point for technology

Decentralisation at the heart of post-pandemic world reveals a new tipping point for technology

Working with portfolio companies across different sectors and geographies, RMB Ventures experiences first-hand how technology can be the differentiator between stagnation and exponential growth. As borderless business models become the norm, disruption is inevitable.

Decentralisation is at the heart of this new technology tipping point and as global businesses unwind the logjam created by COVID-19 pandemic snarl ups and losses, there are numerous lessons to be learned.

The game changer seems to be about building on existing ecosystems, while leveraging additional opportunities resulting from inter-connectedness.

We are on the cusp of a brave new world

Central to this new wave is the iPhone. It is now 15 years since the device was released, and it has become synonymous with integration, multimedia innovations and smart devices. It has also spawned numerous imitations, making smartphones ubiquitous and an essential part of everyone’s lives.

The proliferation of smartphones fundamentally altered how we consume a range of services – from entertainment and news, to food delivery and ‘taxi’ services. Reading, learning and transacting online has been made smoother and more accessible, with the pandemic accelerating this process.

Age and access are key drivers in this significant change in approach. Whereas a decade ago adults were still marvelling at the innovations offered by the iPhone, today the average 13-year-old is likely to be totally familiar with the workings of a smartphone. Moreover, consumers are no longer beholden to a mere handful of name brands such as Apple, Samsung, Huawei or Nokia as numerous “no name” brands have proliferated.

The future is now

Children who grew up with smartphones are now entering the workforce. For this generation, being always-on, always-connected and always-interacting is embedded into their lifestyles. Needless to say, for this generation, the world of work is bigger than their offices; their world is larger than their cities.

Across the continent, South Africa, together with East and West Africa, are hotspots for innovation.  With fibre penetration in South Africa now standing at 50% to 60%, a range of possibilities is opening up for everyone – in particular consumers and small and medium-sized businesses.

The pandemic accelerated the technological tipping point, in somewhat uncomfortable, yet useful ways.  Virtual meetings became the norm and are likely to persist in an era of hybrid work. With teams able to converse in real time and human capital leaders able to monitor the well-being of staff through devices and applications, workplace interaction has been altered fundamentally. Furthermore, with automation taking care of the mundane tasks, employees are freed up to spend more time on developing new skills and launching new products.

A new social construct

Whereas geography once defined a nation, it’s now social context that holds communities together. No matter their location, connected communities and interest groups, professionals and peers are no longer bound by their physical location. As the world works remotely, and the demand to do so grows, business changes too. The decentralised lifestyle is on the fast track towards becoming the most common way to live.

Across South Africa, semigration is no longer simply a lifestyle choice - it’s a possibility for every professional in this era of remote working. The office cubicle you needed to live close to, no longer needs you in it. As an example, Portugal has launched a new one-year digital nomad visa. Under the new scheme, remote workers will be able to live and work in the country for up to 12 months. To qualify, applicants must earn at least €2,800 per month - four times Portugal's minimum wage.

Looking ahead, the “work anywhere, live everywhere” lifestyle is a catalyst making businesses adopt agile technologies, and further embeds the need for secure, seamless systems. Where the boardroom once formed the central meeting point, the webcam now lives. Decentralised systems are no longer the walled gardens of mysterious goings-on. Decentralised systems are now in demand. 

Business model disruption: Threat or opportunity?

Due to the nature of the new digital world of work being about exponential growth, proliferated by technology, the only constant seems to be change. This change was previously characterized as VUCA – volatile, uncertain, chaotic and ambiguous and now has morphed into the BANI world post the pandemic. A world that is Brittle, Anxious, Non-linear and Incomprehensible.

We have worked with Kryptonite by IQbusiness to help some of our portfolio companies embrace this change and identify the opportunities. Kryptonite believes that in order for businesses and leaders to navigate through these crazy winds of change they too need to grow at a similar rate of change, congruent to that exponential change which technology has spearheaded. The only way to ensure this exponential growth is through system-wide, radical business innovation and disruption at all levels.

Understanding the opportunity presented by the digital revolution is the first step. Secondly, leveraging the possibilities presented by mobile technology, the internet of things, digital ecosystems, the connected world where boundaries are blurred, demonetization where money is increasingly removed from the equation and data and technology costs decrease, the resultant effect is digital inclusivity. In this promising future, all people and businesses alike have access to technology, connectivity, the ability to compete and the opportunity for growth. This is probably the biggest opportunity for businesses as we migrate into the bright new digital world of work.

RMB Ventures through its investment in SkyNet, and using FirstRand’s products, is looking to use technology to empower entrepreneurs as owner drivers in the logistics industry. The rise of e-commerce means a growing need for drivers and SkyNet is actively looking for ways to facilitate these drivers to grow their own businesses. Using a smart phone, drivers can manage their deliveries, generate invoices, pay for fuel using a FirstRand provided card, calculate their daily and weekly cash flow needs, pay their taxes and raise finance for a new vehicle (through Wesbank). All this can be achieved using their own smart phone and the right software apps and interfaces.

The Internet of Things

The nature of engagement in a social context has also seen tremendous evolution. The Internet of Things (IoT) empowers people to spend more time on achieving a “healthy, wealthy and wise” lifestyle and is emblematic in the most recent iteration of the iPhone.

IoT technologies have revealed opportunities to optimise personal and professional lives, eliminate many of the hassles attached to managing everyday tasks, and ultimately, unlock life’s most precious resource: time.

In this era, Cryptocurrencies are the “first child” of social context and finance. Beyond Cryptocurrencies, however, the inherent opportunities within blockchain technologies beckon businesses towards enabling even further integration with the new world of “work anywhere, live everywhere.” Popping into your bank to verify your address is now a story of the past. Decentralised systems are growing at a rapid pace, as professional, personal, and community-wide demand expands.

It’s a world away from governments and central banks, spawning a way of interacting that demonstrates how easily the “middle people” such as banks and lawyers can be cut out because people transact based on a degree of transparency and trust not previously seen. What are the implications for banks when people are now able to raise finance through other means, such as their social networks? Why open a bank account when you can transact using Cryptocurrency?

AirBnB demonstrated that you don’t need a balance sheet to offer a service. As an online marketplace that connects people who want to rent out their homes with people who are looking for accommodation, it holds no assets but makes most of its revenue by charging a service fee for each booking. It successfully leverages an ecosystem of property owners and holiday makers, bonded by a sense of trust established by means of a rating system. All stakeholders’ needs are taken into account, and everyone benefits.

Similarly, Uber has disrupted the transportation sector and became the world’s most valuable startup, with no assets but a smart platform that matches drivers in the area to people needing a ride. Once again, a rating system builds trust in the drivers and the clients, ensuring that the community can be leveraged for benefit to all.

In South Africa, We Buy Cars has disrupted the traditional model of car dealerships. Both car buyers and sellers can get their needs met with a single visit to one of their branches, quickly and efficiently, with a range of options and services to ensure a smooth transaction that meets the needs of everyone involved.

There are opportunities for blazing new business paths. Traditional businesses need to adjust to become industries of the future. Every business has to ask itself: Is my business ready for the next way to make money?

Within the Ventures’ portfolio, our companies are continuously looking for ways to use technology as an enabler for growth.

As an example, using artificial intelligence-based software, Tracker is affording fleet owners an opportunity to optimise deliveries by knowing exactly where every driver is every minute of the day, being kept informed on which vehicles are going to need services and when, and even being able to monitor driver attentiveness using on-board AI Dashcams.

At First Care Solutions (FCS), they continue to evolve their virtual healthcare offering by using tech-enabled products. Demand for virtual, online and telephonic medical consultations (telemedicine) rose as a result of lockdown restrictions. Dr Steve Holt, CEO of FCS believes that this trend will continue. Telemedicine is particularly suited to South Africa, Holt says, because at least 80% of the population do not have direct access to professional healthcare advice because they either cannot afford it or are in rural areas without medical facilities.

As a report^[1] done by Bain & Company outlines, being able to “see around the corner” is crucial for businesses. Bain isolates four forecasting tools that can help to predict whether a new technology will take off, when the tipping point will be reached, and how quickly market adoption will take place. Those four forecasting tools are:

• Experience curves that show how unit costs decline as production volume increases;
• Elements of value analysis to identify attributes customers value most in a product;
• Adoption curves that forecast the likely pace of adoption and saturation point and,
• An analysis of barriers and accelerators, such as government policy, technology or consumer attitudes.

Today’s tipping point for technology doesn’t look like any other we’ve seen before. Embedding customer autonomy, enabling freedom of movement no matter your professional responsibilities, and connecting to unknown environments that empower everyone to participate in the global economy, begins now. The time for decentralisation is not yet to come.

The time for decentralisation is here already.

^[1] https://www.bain.com/insights/tipping-points-when-to-bet-on-new-technologies/