Disruptive innovation: what we learned at Fortune Brainstorm Tech 2019

By Mark Mahaney
Published August 12, 2019 | 4 min read

Every year, Fortune Brainstorm Tech brings together industry leaders from the world of technology for three days of thought-provoking keynotes, debates and roundtables. RBC Capital Markets’ tech experts were on the ground at the 2019 conference to capture mission-critical insights.

  Customer experience is the new competitive advantage

One of the biggest buzzes of the conference was around Walmart CEO Doug McMillon’s talk on the new omni-channel reality of retail. He admitted that Walmart, the largest US grocer, had fallen behind the e-commerce trend and was playing catch-up with the likes of Amazon. But he also underlined the importance of Walmart’s stores in how it competes with online retailers.

“Today we’re very focused on creating a seamless experience for the Walmart brand, bringing the stores and e-commerce together,” McMillon said. “Stores have some advantages and we’re trying to make the most of those. And then catch up in e-commerce and get better with the customer experience and put them together in a way that’s unique and will save not only money and time, but create the optimal experience.”

Walmart is currently offering pickup at 3,100 of its US stores and expects to roll out same-day delivery to 1,600 stores by the end of this year. "One of the realities of fresh and perishable food is if you don’t sell it, you throw it away or give it away. When you have a store environment and you have fresh or perishable food so close to people, those stores then become dual store and pickup centers," he said, adding that 60% of Walmart’s stores now work that way.

Through food pickup and delivery, the retail giant is also learning about non-food retail and overall, working on honing an omni-channel journey for customers. According to McMillon, “We’re pressing forward with home grocery deliveries to enable people to let us deliver all the way into their refrigerator.”

 

  Crossing the next AI frontier

AI remains a paramount talking point, with wide-ranging debates on a number of issues, from how the agriculture industry is using AI to crunch big data, to the government’s plans for the future of AI-driven transportation, to the role of ethics in this brave new world.

Walmart isn’t the only company thinking about how to utilize analytics to drive decision support, automation, and process optimization. And organizations who aren’t already investing in some form of machine learning, automation or other AI functionality are busy developing their use cases.

 

   Regulating or breaking up big tech

Jonathan Greenblatt, CEO and National Director of the Anti-Defamation League, confronted giants like Facebook, Google and Twitter for not taking responsibility for hate speech on their platforms.

“They haven’t done more because they don’t see it as their responsibility,” Greenblatt said.

At the same time, speakers like economist Luigi Zingales argued for more regulatory fixes for the power imbalance in the tech sector’s relationship to civil society. “I think what these companies have done, by and large, is fantastic,” said Zingales. “I’m just concerned with their excessive power.”

RBC’s Mark Mahaney, Managing Director, Internet Analyst, says that every year, the topic of regulation gets bigger and bigger and the central question is whether big tech needs to be broken up.  “I think that is extremely unlikely to happen based on the work we’ve done with academics and regulators,” Mahaney said.  “What is a probability is that in the next year or two, these companies are going to face more fines from the U.S. government, not just from the EU.  There will be a cessation of some business practices and maybe the biggest thing we’ll see is the lack of large scale acquisitions.”

 

  Tackling diversity in tech talent

Whether at the bottom, in terms of recruitment, or at the top, in terms of diversity in the tech sector’s C-suites, skills and talent were at the top of many executive’s minds.

A top trend at Fortune Brainstorm Tech was that of the future worker. It was clear throughout the conference that companies are thinking through the tools, the policies, and the processes they need to evolve and change, in order to attract, train, and retrain today's workforce in the context of today’s low unemployment figures and high level of structural changes in the economy.

Similarly, a panel of board directors talked about the difficulty in getting women and ethnic minorities into top jobs – and how much of a boost diversity could bring. David Trujillo, partner at TPG Capital, and Jeff Richards, managing partner of venture capital firm GGV Capital, talked about how executive searches always return the same pool of candidates and how that pool is usually composed of people who’ve already served on another board.

“We had to totally break that,” said Trujillo. “It’s [about] breaking into that network of the next generation that tend to be a bit younger and just finding an incredible wealth of talent.”

 

  Horizon scanning

A number of interesting new-to-market firms presented at the conference, according to RBC’s Mahaney, including video-streaming company Quibi, which is being led by Meg Whitman, former CEO of eBay and Hewlett-Packard, and Jeffrey Katzenberg, former chairman of Walt Disney Studios  and co-founder of Dreamworks Animation.

“It's going to launch next April, short form video on mobile devices,” he said. “This is Meg Whitman and Jeffrey Katzenberg getting together. That's a lot of power in one company, so I'm very intrigued by that.”

Mahaney highlighted several additional emerging companies including e-scooter company Lime, which has a high presence in EMEA, and doorbell firm Ring, which was bought last year by Amazon for over $1 billion.

“Twitter’s CFO and Stitch Fix’s CEO and founder were here and I thought they did a really good job reminding people what their businesses are, teasing out some new areas they could go into and new product announcements, “ Mahaney said. “ Twitter announced a new user interface, trying to make the site more intuitive, which will certainly help their business model long term.”

Required Disclosures


Mark Mahaney
Managing Director, Internet Research Analyst


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