Fortune Brainstorm Tech brings together some of the world’s leading business minds, creative technology disruptors and the investors who finance them. We were on the ground at the 2018 conference to capture the latest CEO insights and here are the most thought-provoking lessons from Tech’s agile leaders.
The Trends of Change
1. Tech Beyond Tech
Highlighting the impact of tech beyond the tech sector, Pat Gelsinger, CEO of VMWare, eulogized: “I expect we’re in for at least a decade where tech continues to be really strong, well outgrowing the economy overall. It permeates every business.”
A great example is WeWork. Shiva Rajaraman, Chief Product Officer said: “We’re deploying buildings at scale. We’re using Machine Learning for building automation as we roll-out 50 new builds a month.”
2. The Platform Play
Highlighting the continued rise of the platform model, Uber’s CEO Dara Khosrowshahi, outlined his vision: “Cars are to us what books were to Amazon. They built the platform first on books and then expanded. You’ll see the same from us. This is just the beginning. With battery innovation and contract manufacturing on a global basis you’re going to see amazing innovation.”
Outlining a similar platform play by Slack, its Chief Product Officer April Underwood shared: “Companies are licensing hundreds of software products but there is nowhere that it comes together. I believe customers will discover software for the office through Slack.”
3. Data Everywhere
“Data is the new oil,” says Matt Hedberg, Managing Director, Software at RBC Capital Markets. “There are only so many data pools out there so they command a premium. We’re also seeing companies, even if not the scale of Oracle, building interesting data pools. We think there’s a lot more consolidation to come.”
Yet Lisa Su, CEO of AMD, sounds a note of caution: “The thing that’s different today is the incredible amount of data. The truth is we don’t know what to do with it.”
4. AI Meets Cloud
“AI is an overnight success 30 years in the making. Cloud now brings so much more data,” highlights Gelsinger of VMWare. “We talk about the 4 Superpowers of Tech: Cloud, Mobility, IoT and AI. They’re accelerating with each other, which is why it’s such a stunning time.”
5. Data Unlocks Growth
Demonstrating what data unlocks for companies, Slack’s Underwood said, “The future of data is not just how to use Slack better but how to understand organizations better. We’ve barely scratched the surface of helping companies access their archive of communications and decisions.”
Dennis Woodside, COO of Dropbox, has a similar vision: “We’ve spent the last 11 years building 1 exabyte of content and there’s a lot of signal in there. Extracting that will allow us to add value to that content.”
6. Look Beyond Trade Wars
Politics raised its head, but delegates were sanguine. Jeffrey Housenbold, Managing Partner, SoftBank Investment Advisers: “It depends how long your investment horizon is. [Trade disputes] will impact some of the deals we do, but so long as it’s a level playing field and we understand the rules [investment should continue].”
For RBC’s Matt Hedberg, it masks a bigger issue: “I recently met the CEO of Zoom, a Chinese immigrant. Perhaps in a few years we’ll find this kind of company in Vancouver or London instead?”
The New Corporate Finance Playbook
7. The Value Equation
“You don’t need to make profits before an IPO, but you need a clear route to profit,” shared Uber’s Khosrowshahi. “The most important factor for us is cash. We don’t want public markets to have to fund our expansion.”
Housenbold from SoftBank concurs: “We have a phrase ‘nail it then scale it’. We look very hard at the unit economics first.”
But does excess build bloat? From Rajaraman at WeWork: “In product development, you want the minimum investment across the maximum number of bets. If you get too bloated, you cut off half those opportunities.”
8. Public Market Horizons
Mark Mahaney, Managing Director, Internet at RBC is optimistic: “Public markets have been much more welcoming of IPOs. Investors have been willing to look out multiple years and discount back. They’re less short-term oriented.”
Yet he sounds a note of regret: “When you look at new companies coming out it’s a little unfortunate that many are waiting longer. When Uber comes out, a lot of people would have liked to have a shot at that much earlier.”
9. SoftBank’s Shadow
Responding to concerns about the new funding leviathan, Housenbold outlined the SoftBank approach: “The fun part is to sit down with management teams and say ‘if we remove capital as a constraint, what would you do over the next 12 quarters?’. We bring entrepreneurs Capital, Counsel and Connections. We introduce them to sisters in our wider ecosystem. Then we help them go through rapid expansion on a global basis.”
Culture and Leadership
10. Culture Matters
Buffeted by news headlines, Uber’s Khosrowshahi took the stage to admit: “Sometimes it takes a punch in the face for you to see things clearly. But it’s incredibly motivating.” Yet his vision remains bullish: “I’m not here to fix. I’m here to build. I want a company that is viewed as one of the best companies in the world. We’re never going to be satisfied with where we are.”
With 18,000 employees across 200 offices, Booking.com’s CEO Gillian Tans was frank about the challenge: “We don’t have many assets – just people and servers. We’ve brought in talent from Europe to Asia, but we have the very strong ‘Booking Blue’ culture everywhere. It’s hard work but very important.”
11. Customer Fanaticism
In the face of mounting competition from ‘big tech’, Slack’s Underwood highlights why talent matters: “We’ve got to be tireless in building the best customer experience. Employees ask to use Slack. When IT brings competitors in, they say ‘no!’ You’ve got to work hard to earn that fanaticism.”
And with a final global context, Richard Liu, CEO of JD.com: “In China, we say ‘iron sharpens iron’. In our market, only delivering in two days would be a disaster!”