LØRN Masterclass M0007
Exponential Growth
In this masterclass by #LORN we learn about exponential growth. Silvija talks to the leader of Executive Growth Alliance, Jennifer Vessels

Jennifer Vessels


Next Step Growth

"When it suddenly clicks"

Dette er LØRN Masterclass

Digitale samtale-baserte kurs – 4 x 30minutter
Vi samler de beste hodene bak de nye teoretiske konseptene innen ledelse av digital innovasjon og transformasjon. Vi dekker 15 tematiske områder innen ny kunnskap og erfaringer om innovasjon  og ledelse, og 10 perspektiver som gründer, forsker etc.  Innen hver av disse tema og 10 perspektiver setter vi opp digitale samtale-baserte kurs i fire deler, som alltid følger samme struktur: introduksjon, eksempler, verktøykasse og verksted. På cirka 30 minutter i hver leksjon vil du på en lett måte lære nye konsepter og forstå nye muligheter.
Digitale samtale-baserte kurs – 4 x 30minutter
Vi samler de beste hodene bak de nye teoretiske konseptene innen ledelse av digital innovasjon og transformasjon. Vi dekker 15 tematiske områder innen ny kunnskap og erfaringer om innovasjon  og ledelse, og 10 perspektiver som gründer, forsker etc.  Innen hver av disse tema og 10 perspektiver setter vi opp digitale samtale-baserte kurs i fire deler, som alltid følger samme struktur: introduksjon, eksempler, verktøykasse og verksted. På cirka 30 minutter i hver leksjon vil du på en lett måte lære nye konsepter og forstå nye muligheter.

Leksjon 1 - Introduksjon (34min)

Silicon Valley, Moore's Law, Linear and Exponential growth

Leksjon 2 - Eksempler (25min)

Airbnb, Uber, Amazon, Adobe

Leksjon 3 - Verktøy (22min)

PEACE, Proactivity, Dangers of complacency, Seize the opportunity

Leksjon 4 - Verksted (27min)

Exploration, Uniqueness, Pricing model

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Tema: Digital strategi og nye forretningsmodeller
Organisasjon: Next Step Growth
Perspektiv: Gründerskap
Dato: 26, august 2021
Språk: EN
Vert: Silvija Seres

2000+ lyttinger


Sir Walter Isaccson

Del denne Masterclass

Dette lærer du om i denne Masterclass

• Silicon Valley, Moore's Law, Linear and Exponential growth
• Airbnb, Uber, Amazon, Adobe
• PEACE, Proactivity, Dangers of complacency, Seize the opportunity
• Exploration, Uniqueness, Pricing model

Din neste LØRNing

Din neste LØRNing

Din neste LØRNing

Leksjon 1 - ID:M0007a

Leksjon 1 - ID:M0007a

Leksjon 1 - ID:M0007a

Velkommen til Lørn.Tech – en læringsdugnad om teknologi og samfunn. Med Silvija Seres og venner.


Silvija Seres: Hello, and welcome to Lørn masters. My name is Silvija Seres, and our masters’ lecture series today is going to be about exponential growth with Jennifer Vessels. Welcome, Jennifer. 


Jennifer Vessels: Thank you. It’s an honor to be here. 


Silvija: It’s a great pleasure to have you here. We’ve talked together before, and decided that we want to make this mini-series together, I am going to say a few words about the series, and then we’ll get started with the conversation. So this is normally Lørn produces cases of innovation, stories of people doing innovation locally and excitingly. We have found that people need some theoretical background to better understand these innovation stories. So we’ve created our masters series, which is every master’s mini-series of 430-minute lectures in a conversational format. So it’s not a “lecture-lecture,” where a professor has a monologue towards a physical or digital audience. But it’s a conversation between two curious and enthusiastic people on a given topic. And the topic of our series today is exponential growth, which is the growth experienced in every industry, driven by data computing power and networks. You have a background from Silicon Valley, you have seen this front row 20-25 years ago. So have I, and we have since been trying to recreate a similar growth pattern in Norway in different industries that we work with. And that’s the sort of conversation I’m looking forward to exploring. We’ll have four lectures. The first one is about the basic concepts, the second one is about your favorite examples, the third one is about some tools and tricks to get started. And the fourth one will be a play workshop on the topic of exponential growth in a particular company, in this case, Lørn. Sounds good?


Jennifer: Looking very forward to it. 


Silvija: Excellent. So then we’ll get started. And my first question is, very briefly, please tell us who is Jennifer? And why does she care about exponential growth?


Jennifer: Great. So I am a growth expert in many ways, having grown a couple of companies myself in Silicon Valley. Also having grown a number of technology companies, including Tandberg, based in Norway that I grew the international business for them. And it’s been a fascinating journey over the last 25 years to really see the development of the platforms, the tools, the foundations that are allowing fabulous commercial business, societal growth, and change coming from Silicon Valley.


Silvija: Very cool. So you live in Norway, or between Norway and Silicon Valley. At least pre-Corona. And you have also observed quite a lot of Norwegian companies since Tandberg and helped them grow. I’m looking forward to talking about the Norwegian perspective on exponential growth as well. So let’s get started on our first lecture. And it’s all about the basic concepts. I find it very useful to also talk a little bit about the history on this subject. So what is exponential growth? And where does it come from?


Jennifer: Great, great question. Exponential growth to me and from a Silicon Valley perspective is the concept of taking a foundation and a good, let’s consider it’s fertile soil, a good place to plant something, and being strategic at what you put there, having a lot of patience, a lot of persistence and a lot of determination to do what it takes to turn that that fertile soil into something that flourishes and grows. And just like when we plant our garden, you put the seeds in and your weight and your water, and then suddenly it’s overtaken with flowers and plants and fruits. That’s exponential growth when it suddenly clicks and everything just fits together. And when I look at for example the history of Silicon Valley, I would equate it to that example of building a flourishing garden. Going back in 1995/1996, that period, we shifted to Silicon Valley, a huge shift from being an agricultural environment. Silicon Valley in 1955 was orchards. That was the fertile soil. Until William Shockley, a researcher from Bell Labs on the east coast of America recognized there’s a need to drive change in the world based on the work he was doing with communications in radio technology and some of the Federal technologies. And he set off to go west and was really the first entrepreneur in Silicon Valley with Shockley Labs that was the core of defining semiconductors. And so Silicon Valley shifted from a valley of fruits and orchards to a valley of semiconductors with that first open, committed, brave person saying, I want to create something new in the world. That ultimately spun into Fairchild and a lot of other organizations that build the platforms that today are the computing platforms.


Silvija: I just want to shoot in, I read the book called “Innovators” by, what’s his name, one of my favorite biographers that also wrote about Steve Jobs, and Einstein and Leonardo da Vinci. And it’s really interesting to see how it’s, well, we have Shockley. And before him, there were others. And after him, there were others. Some of them are very eccentric, some of them hippies, some of them military people. But it was this belief that this data-driven computing technology really can and should change the world. And I’d like you to talk a little bit about Gordon Moore as well, and Moore’s law. And why is that relevant to this whole story of exponential growth?


Jennifer: Absolutely. So from those first innovators that set off and define what’s a semiconductor, the lots of growth happened quickly through the 60s and 70s. And, at some point, Gordon Moore developed and formed Intel. Intel, as we know, is one of the leaders in semiconductors and the whole innovation cycle. And Gordon Moore recognized that with the growth of capabilities in the fertile valley of new ideas, new ways, and making it better, there was a pattern that started to happen. And that pattern was that every two years, the capacity and the power of the semiconductor in the chip, the integrated circuit, would double. So for 25 years, we’ve seen this regular pattern of the speed of the platform, getting faster and faster. That Moore’s law has been the foundation of a lot of the development of software and other capabilities based on this linear, if you will, doubling every two years type growth. Now, recently, and I’ll go into a little bit more of the reasons why, but recently, the growth has gone from that linear doubling every two years to exponential, because we’re at a point where the speed and the power is growing much more quickly than doubling every two years. And part of that is driven with capabilities that we now have today, building on what we’ve learned in the past. Part of that is based on the data that is available to exercise and teach and grow the capabilities. So it’s been a fundamental part of Silicon Valley. 


Silvija: Yeah, so two things, Jennifer, from a mathematician standpoint, when something doubles every year, or every one and a half years or two years, it’s exponential growth. That’s the definition of the exponential function. So we’ve had exponential growth in chips and computers since the start, and that’s the whole essence of Moore’s law. The interesting thing is that people didn’t believe it when he said it’s the first time and then we still don’t quite understand why it’s valid. But it’s based probably on this transition from the physical world to the mathematical world of logic and then back again. And, the interesting thing is that we have had 50 years since 1970 to today of this kind of growth, and if you have a doubling of the computing capacity per square centimeter or per dollar used to make that chip, we have now ended with a growth in power of chips that is so huge that it defies the human imagination, but also the human capacity to exploit it fully. And the only people who are exploiting it fully are the ones creating these very advanced AI solutions and gathering data from the real world through IoT at full speed. So I think it’s really interesting how it creates this opportunity for growth, where we are now constrained by our own ability to understand it and apply it rather than, the tools as was historically the problem.


Jennifer: I completely agree. And if I look at over the last 20 years, with that Moore’s Law, doubling of the capability of the platform. In the 90s, we had the vast growth in software, with the recognition of the applications for the World Wide Web, going back to the beginnings of Mosaic and Netscape that then evolved to Google and the founders of Google recognizing there is a ton of opportunity to be able to reach society in completely different ways and with huge investments in the software, which then led to greater capabilities that led to more utilization, the whole dot-boom of getting more eyeballs, getting more people using. That created a very fertile ground of data that could be used to exercise the computing technology that can then be used to begin to look at software and algorithms for machine learning so that the machines not only can be the platform – they can be the intelligence. And that started this whole new wave of where we are with truly fast-moving exponential growth way beyond what we can take in and the capacity to utilize.


Silvija: So if I summarize, in a way, the first really big breakthrough, and I think, by the way, the biography I mentioned, which I recommend everybody to read is by Sir Walter Isaacson. And, you know, it all starts with Shannon and Turing and John Von Neumann and these mathematicians who are then trying to make this computing machine, and then the radio and communication people that managed to implement the semiconductors in with the right chemistry and so on. So there is this semiconductor and the chip, and the essence of computing, that was the kind of first really big breakthrough. And then if we’re thinking of this as an onion, the second layer that makes this very fast and very potent, is the network capacity. So you’re talking about the internet, and the 1G, 2G, 3G, 4G, and 5G by now, and our capacity to connect and cross-connect, and the cloud and so on. And then the next layer of this onion, I think, is also a thing that you just mentioned, the capacity to gather data from the real world, through the internet of things, and sensors, that have become exceptionally cheap and available. And so we can translate the physical world, the financial world, the biological world, into data. And then now we can start manipulating this digital onion, as if it was the real thing, and affect the real thing, and we have more understanding of the digital thing than of the physical thing, and this is where it all gets very interesting. And perhaps the fourth layer then –  we have the core of the onion is the computing and exponential growth of chips. The second layer was the network and the exponential growth of the value of networks. The third layer was the data gathering through the internet of things and sensors and so on. And now perhaps the fourth layer is the algorithms and artificial intelligence and the extreme ability to understand and manipulate and analyze all this data through networks and computing power.


Jennifer: Exactly. And that’s really what is extremely exciting. As all of those elements are coming together, and AI is the fertilizer that’s going to help it to grow and flourish even more, as all of those elements can work together to make decisions. Not only to observe, not only to serve but to make decisions and take action.


Silvija: So this is also changing societies, so we’ll get to our ways of working with the exponential potential in the next lecture. But this is changing our business and it’s changing our society. Why?


Silvija: Great observation. And it’s both sides. Society is changing the exponential growth and adding into it, as well as the growth is changing society from my viewpoint. So if you look at, for example, some of the interactions that we have today with areas of social media, YouTube, ways people learn, ways people have managed through the pandemic. That’s a complete societal change compared to where we would have been five to six years ago in a similar environment. And that’s because the fertile valley is there, the computing power of the network, the algorithms to allow us to do that. So the capability is there. We as a society are leveraging that. And we as a society have learned and we have indeed adapted to using technology in new ways that we would never have thought of even 10 years ago. Steve Jobs’s idea of “I’m going to completely change the way society works and the way people live, learn, play”. That has happened because of the capabilities of technology. But by using sensors, by using IoT, by using deep analytics of understanding how people are interfacing. That data that’s coming from the way we interact, goes back into building new tools and new algorithms. So it’s truly a self-efficient circle of – we adapt to use what’s available to us. Our adaptation is monitored and tracked and analyzed and that allows for new and better tools, which is in many ways, the way we can truly lookout to the next 10 years, being a huge opportunity for massive change in society. Now that we have all proven that we can adapt, we can do things differently, we can live in a very highly digital world, we’re well poised for that true next paradigm shift, in my opinion.


Silvija: I think it’s really interesting to talk about paradigm shifts as well, and I think we have a paradigm shift going on in Norway. One of the things that I’m excited about is how, for example, when we talk with people who do fish farming, they are going from, you know, thinking of themselves as a very rural, traditional sort of industry to this super-advanced 5G enabled sensor, an AI-enabled group of people that are producing fish protein in a very sustainable way. Same thing I see happening in the energy business in Norway, the same thing I see in actually, the recent developments in the oil business in Norway. And even more importantly, this is spreading into our health services and our public services in the country. So how can we drive this as a society? How do we take a proactive approach to exploit this power of exponentiality in different industries?


Jennifer: There are a few ways to do that. I mean, the first, which is exactly what we are seeing, as you point out is utilization and embracing it. Recognizing that the power of technology and the power of utilization is much higher than avoiding and staying away based on risk. The second question, which I think Norway has a lot of opportunities to learn from Silicon Valley, is how do you build the business models and the commercialization and the way to scale it in a way that it truly becomes exponential growth outside of your little silo? I mean, if you look at, just going back to a little bit of the history of Silicon Valley, a lot of that growth from 1960 to 2009, a lot of that growth was focused around – let’s build technology, let’s apply technology, let’s research, let’s make it better so that we can truly change society. In 2009, in the financial crisis, there was a bit of a shift of mindset in Silicon Valley coming out of that period, which was: let’s not just build the best technology and get it to the world, let’s figure out how we can build the best businesses that are truly sustainable through all kinds of economic and other environments. And so that’s where the business modeling concept of how can we provide services, that would be a reoccurring revenue offering to others on a pay-as-you-go basis, or access to data, or access to capabilities, or access to what you need at the moment? How can we build those kinds of business models? How can we look at the value of data and analytics and structure that in a way, that it’s not so much the value in the product, but the value is in how you utilize it, how you understand it, how you build on it. So it’s a shift that I’ve seen over the last 12 years, for tech’s sake, to tech to drive business. And I would suggest to Norway, we’re at that point where we need to start asking those questions. How can we not only perfect fish farming, but how can we leverage that in a broader way, either through commercialization, new business models, new ways of reaching out to others building on the platform, shall we say?


Silvija: Yeah, I mean, I think that’s what they are doing, Jennifer. And I think this is a very normal cycle in the sense that we need to understand the new technology, and then we need to find the right way to apply it. And it’s when we start challenging the existing business model, that things get interesting. And I think the change in the business model here is not like I mean, let’s say fish farming or energy, let’s say floating wind farms. They’re not going to start producing a new product. That’s what they do. But it’s how do they package and sell that product. And I think the main change that we’re seeing is driven by platforms here. Where, rather than selling hours, or selling items, we are now selling access to services at a certain level of predictability. And it’s when you go from having a product sales focus to a managed service sales focus, that you’re exploiting the power of digital platforms, which is then combined on data networks and computing powers – exponential growth. And platforms need to be big enough and have enough data to be relevant. So there are platforms like Airbnb, and Uber and Amazon, and so on, and we’ll talk about these. But Norway has one platform that I think is, it has several actually, but one of my favorite platforms that are completely under-communicated in its importance to this society is Altinn. So it’s our public financial core platform, which allows us together with our tax solution, for example, to have the world’s most user-friendly tax process. It also allows us to fight corruption in completely new ways. And it is a platform for innovation in our finance sector, as well. So I don’t know if you want to say something more about platforms and why do you think they are interesting?


Jennifer: Yeah, I think platforms are the foundation. It’s building on, as you’ve said, the technology, the power, the network, and the interesting thing is what you can do on top of it. And so when you have this vast quantity of data without going into things that break GDPR, you can look at: what are the patterns? What are the capabilities? And then begin to see, what are people needing and how are people in society interfacing with that platform to determine where is the value. Where are they getting the greatest value in accessing the platform, and what would be a value that could be offered as a service. So there could be a variety of different services, that could sit on top of the data that’s available within that that Altinn platform. One example that I’ll go into a little bit more in our next section, but if you look at Adobe. Software company, very different environment, but in 2009, they recognize they had a platform of data of how their customers utilized their tools. And based on looking at that they recognize people don’t need to buy software, they need to buy point services at different times. So let’s break this apart. Instead of selling software, let’s sell access to services when you need it. So potentially the same with Altinn.


Silvija: Cool, so we’ll get back to Adobe in a sec. I think if people can manage to kind of try to challenge themselves on, you know, what would be my platform? And you know, what’s my data? How do I turn whatever I’m selling today into a service? And make sure that people also get somehow a binding to my platform, so that they eventually find that living without it becomes too unpleasant. And so you have an annual recurring reason to keep coming back and buying the same platform access. I think that’s when you’ve got it made in this new world of data. 


Jennifer: Yeah, absolutely.


Silvija: But I’d like to go back to your point about passion for solving real-world problems because there could be nonsense platforms, and when is it that a platform solves a relevant problem on this basis of data computing and networks?


Jennifer: Yeah, so there’s a platform behind just about every aspect of our life and society when we think about it based upon the amount of data and the interfaces that we each have. The way to determine where in the business model and the value is to look at customer consumer patterns. Where are the problems? Where are the inefficiencies? What is not being solved for people today? And based on recognizing where those inefficiencies are, saying: Okay, how can I use what I’m good at? How can I use the data that’s available to me on this platform? How can I use that to solve a real problem, which can be an inefficiency, that was the Uber example? Inefficiencies of getting from point A to point B, in the middle of the night, when individuals are driving with openings in their car was a real-world problem. There could be a lot of different aspects of that, but understand the market and understand what people are struggling with. Based on that, understand what you have capabilities for, and then use your passion to solve that issue. I sometimes call it: “look for your rant.” What is the thing that you just rant about that makes you crazy? And why hasn’t somebody done something about this? Chances are, there is power in the platform of data that people can address. To look for that. Be passionate and don’t give up and using the capabilities that you have to leverage that data, build that service and take it forward? 


Silvija: Yeah. I think that’s one of the areas that Silicon Valley, I think, is good at. They’re very disciplined in not just creating, you know, a better cheese knife, and not just about creating a more efficient version of a tool that already solves the problem. But they find the market failure. And when they find the market failure, they solve it through a platform and with data and computing, and algorithms. And I think you call it a rant, I call it a market failure. But basically, you need to find a real problem. You need to understand the size of that real problem, which is also your business model. And then you need to understand, you know who is suffering most from this business problem, and then go about getting the data and other components of your platform. Jennifer, we have two to three minutes more in this first lecture. And what I’d like to ask you is two things. One is, the culture of Silicon Valley that makes this possible, I’d like you to say a few words about the paid forward and collaboration culture. And then I would like you to say a few words about what can Norway do to exploit exponential growth?


Jennifer: Right. So the culture is really around passionate people that are risk-takers, that each has areas that they bring unique skills into. And by working together, and it’s very much a culture of cooperation, knowing that at any point in time, you may be competing for wallet share, i.e. for somebody to pay money for your services, you may be competing, but you each have a different view of a different problem or similar problem, and by working together, one plus one equals three. That’s the pay it forward. If you’re doing something, I’m doing something, let’s collaborate, because that way, we can validate that the problems we each think are there, are there – getting outside perspective. And by working together, we can build something even bigger. So it’s cooperation, recognizing you may compete. But by working together, we make something greater. And that’s one of the things that I find is often missing in Norway, there is a tendency to say: “I have this great idea, I’m going to put my head down, I’m not going to tell anybody about it, I’m going to build a beautiful product. And then I’m going to go out and try to find the product-market fit.” From a Silicon Valley point of view – that’s backward. In Silicon Valley, we would say: “I have this rant or problem where I see this inefficiency. I’m going to go talk to everybody I can find to see if they agree. And if they do, then I’m going to get a few people to work together with me that share their passion for this. And we’ll see if it works in the market.” So we start with the market, that’s market to the product. Versus, I’m going to build a great product and go see if somebody in the market wants it. So my advice would be to flip it. Think about where are the inefficiencies. What are the things you see as real problems? Who else do you know that shares that view? Start building something and go talk to more people. And that’s a very good way of leveraging the platform that is there today, to get to that exponential success. Start doing something with others.


Silvija: And I think also kind of building our, not just ambition, but in a way self-image. Our idea is that we could have a leading position in the world in some of these areas in digital. And it’s really exciting Jennifer to see how this is beginning to happen. So Lørn is at the same time as we are talking, creating a series on digitalization and innovation in the transport sector. And exactly because we can collaborate between public and private sectors. We are doing some data gathering but also some data-enabled services that are unique in the world. Something very similar is happening in public financial crossing energy. Some other natural resources including fish-shipping, we have some of the most interesting projects in shipping innovation. So I think it’s about also creating this national image of being a digital leader. That’s very, very important. And I think we do that through celebrating good examples. So you and I will stop now for a couple of minutes and then we will go into lecture number two, where we will talk about your favorite three international examples. And then I can toss in some ideas that relate this to what we are doing at the same time in Norway. Sounds good. 


Jennifer: Sounds good. I look forward to it.


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Leksjon 2 - ID:M0007b

Leksjon 2 - ID:M0007b

Leksjon 2 - ID:M0007b

Velkommen til Lørn.Tech – en læringsdugnad om teknologi og samfunn. Med Silvija Seres og venner.


Silvija Seres: Hi, and welcome back. This is lecture two in our master series on exponential growth. I’m Silvija Seres, and our master today is Jennifer Vessels. Welcome back, Jennifer. 


Jennifer Vessels: Thank you. Good to be here again. 


Silvija: So we’re going to spend another 25 minutes or so talking about our second topic, which is three favorite examples of exponential growth. We talked a little bit about concepts in the previous lecture, the idea of this doubling style growth over the same periods, in computing power, in access to data, and with network capacity. And now, even with algorithms and AI, so that’s the fourth component in a way. And we talked about how it’s really important to think about a real-world problem, a market failure, that you can then solve in a completely new way through a combination of these four, through something that we often refer to as a digital platform, which is a connection of data with the users and all of this computation in between. And now, you will tell us how these concepts relate to these examples that you believe are some of the best examples of exponential growth and platform services in the world. And if I understand correctly, you will talk about Airbnb and Uber, you will talk about Amazon, and you will talk about Adobe. Correct?


Jennifer: Correct. Three very different perspectives, but all succeeding dramatically based on indeed the platform with all those combinations. A good one, maybe to start with, would be Airbnb and what I like about the Airbnb story is that it comes at things from two perspectives. The founders of Airbnb are Silicon Valley residents that just like everyone there have big risk-takers, big “try everything”, started in various companies and learning to be entrepreneurs and found themselves in the financial crisis, in their crisis of each being out of a job having a very expensive apartment in San Francisco. And instead of going and asking people for loans and asking for handouts, they said, let’s look at ourselves, and what do we have available that we could maybe make money on? How can we commercialize what we have? And they looked around and said, the main thing we have right now is a pretty nice and very expensive apartment, that we’re gonna not be able to pay our rent. And so they got creative and said, you know, some people are still even in this bad time paying lots of money to rent hotel rooms, just on the other side of the city. If somebody is paying $150 a night for a crappy hotel room, maybe they’d be willing to pay $50 a night to sleep here in our apartment. So they thought this sounds like a good idea. Let’s talk to a few people. Within a week, they had five people that were signed up and ready to spend a week sleeping on their floor. And those five people were extremely happy. The Airbnb founders made sure that they had everything they needed. They talked to them every day. How could we make things better? By the time those five people left, they each talk to five to 100 people and within a month the Airbnb founders were running a very different type of business. They were leveraging a platform, which at that time was people talking to each other and talking to their friends and using the basic tools like Craigslist and beginning to use tools like Facebook to get the message out. Building on that computing platform that was there so that within a matter of a month, they were already up and running with a very viable new business model of renting space and not only their apartment but also other apartments to fill that inefficiency of quick cheap, simple, personalized place to stay. So a good example I believe of: start with the market-need, look at what you have, talk to people, get started, just do it, and then leverage the platform and the technology to grow it.


Silvija: I still think that it’s a great idea. It’s the disruption of the value chain, really, for hotels, because you can allow people to find accommodation. I have been using two of these platforms quite intensely myself. This summer, we had to go on a vacation in Northern Norway. And both finding accommodation, but also finding transportation, I use Airbnb for accommodation and Nabobil, the Norwegian car-sharing app for cars. And I think that the difficult thing here is then finding out the right user experience. I’m a very big fan now of Airbnb, it gives you a good user experience when you’re looking for a place to stay, it makes you feel safe because you can check the host and the host can check you. It allows you to meet new people, it is a very, very smooth user experience. It was probably a huge task to make this platform scale, as it did because I don’t know how many hosts they have today. But we’re talking about hundreds of millions of users of the platform. So there is the idea, but then there is also the ability to build a system that will accommodate exponential growth. I don’t know if you want to say something about that.


Jennifer: I do because there are two sides to that, and the platform, as we talked about previously, that is continuing to get faster and better, and the algorithms and the software and the tools that can give you the data and the analytics and the knowledge to be able to constantly monitor the behavior and to gain access to users. So that’s there. But I think what Airbnb has done a great job at, as well as Uber and several other of these platforms, is being close to the customer. It’s understanding the intricacies of what people want and defining what kind of person it is that you want to attract. Initially, in the Airbnb world, it was very well defined, it was people between the age of 25 and 40, that was traveling that wanted an experience wanting to meet people, open mindset, typically individuals, but could be professionals. So they very closely narrowed down, what kind of person and then monitor what does that person want and need, and appeal to them through all of the marketing, through the type of posts that they would bring in, and also building that constant feedback system. So that the host gets feedback as well as the user gets feedback. And people want to be part of that kind of community of a real trusted environment. They’ve been very effective at using the software and the algorithms and the tools to support that user-centric experience. And it starts with thinking about the customer in the market first and how can we leverage the platform instead of the other way around.


Silvija: Excellent. Uber is a very similar story. I don’t know if you would like to say something more about that.


Jennifer: Yeah, I think there’s a lot that can be learned from the Uber story, which just starts as I mentioned previously, from recognition of inefficiency, and to built very quickly on top of the capabilities. Very much focused on disrupting, if you will, the traditional taxi industry. I think where Uber has had some challenges is A: not being as close to their users as they could have been. Not recognizing some of the challenges that they ran into with some of the societal issues, shall we say, and not recognizing the opportunity there was for others to build competitive solutions. So they started a revolution, they completely have disrupted and changed the way people operate compared to the prior ways of transport. But I think compared to Airbnb, they’ve not been as good at really monitoring the market and owning that user experience and getting that true loyalty, which has been what hurt them against Lyft and some of the other options on a global basis.


Silvija: I think it’s really interesting also that Uber has had the harder kind of social acceptance journey than Airbnb. It’s hard not to like Airbnb unless you are, you know, Four Seasons or Hilton. And when it comes to Uber, I mean, there are lots of taxi drivers that don’t like them. Some people talk about work politics and have a problem with them. So I think what’s important here is that if you’re disrupting a very established value chain, you also have to be aware that this is going to be a social change. And you have to have a proactive attitude to the society and make sure that you don’t create new problems by solving some old ones. And so I think we’ve seen a difference there between Uber and Airbnb and I don’t think we’ll spend much more time on that but we’ll get back to that when we talk about Lørn. So I’d like you to tell us a little bit about Amazon. I think that’s probably the most interesting company in the world or the way that Jeff Bezos has set up his whole leadership philosophy and his nine leadership principles around long-term exponential growth. I think he’s the most disciplined exercise in transformation I’ve ever seen. What’s your take on Amazon?


Jennifer: Yeah, I agree. They’re a phenomenal case study. And in many ways, they’re honestly the opposite of an Airbnb and an Uber. In Airbnb and Uber they were recognizing a problem, let’s see what can happen, and let’s try something. On the Amazon side, and Jeff Bezos going back to when he was a financial analyst on Wall Street – he had a vision, he had a very long term strategic vision of changing the world around what he saw as a massive inefficiency, which is how we get access to what we need when we need it. And very strategically looked at, if that’s what I’m going to achieve in life; change the way society accesses things, how do I get started with the easiest, most inefficient way to move forward and recognized books was one of the best things that people all around the room need access to and has to get passionate about. They’re heavy, they’re wonky, they’re difficult. So let’s start with logistics for books. So it was a very pointed approach from the very beginning and built a phenomenal customer base. And very effectively used all aspects of platform software algorithms and very early utilization of machine learning and AI, to understand how customers interface on that first product and then begin asking questions and adding in additional solutions to the point where he had that first level of the garden starting to take off. The flowers were starting to bloom, people were coming back and recognized, we have to keep these folks, we’ve got to build in loyalty, and hence move forward with Amazon Prime. That was a phenomenal decision to, in essence, lock people in based upon the one thing that was a concern to people in using Amazon, which was shipping costs. So let’s get people to pay $100 a year, and they don’t have to pay the shipping on anything, brilliant idea. So that gave the customer loyalty that also gave a lot more access to understanding how people operate. And that gave that foundation. At some point, recognizing for us to be effective, we need greater algorithms, greater AI, and for a machine to learn, it needs data. And so for us to get the massive quantities of data and computing power within Amazon, we need a way to access significantly exponentially higher amounts of data. And we need a way to store the information ourselves in our peak periods of growth, such as around Christmas. Hence, launching Amazon Web Services. Let’s build and run our own data centers to support our own company. But let’s rent that out to other people because others need access in small quantities to this huge exponential power, follow the platform. So let’s rent that, giving us anonymized, but access to data capabilities, greater machine learning to support our core business, which is giving access to the right things at the right time. And that’s been a phenomenal success. I mean today, the vision that he had many years ago of “the place to go for anything you need whenever you need it even before, you know you need it” is is very much the truth today. Great story.


Silvija: Again, the problem seems, you know, clear, and what should I say simple enough. But when you think about how he solves this for millions of salespeople, or millions of small shops, and his warehouses, and hundreds of millions of customers. On this scale, things get incredibly complex, and it should feel like a personalized experience for absolutely everyone. And what fascinates me is, I’ve been just reading this book called “Working Backwards”, that I was very fascinated by. So it’s two people who were in his very close leadership team that talked about the intention behind these leadership principles. And you know, Jeff has this very long-term focus, obsession with the long term. But at the same time, he’s very unafraid to get involved in practicalities in details of a single delivery. So they have this requirement that they would have to be on a call center, every quarter month, for a given number of hours. And he would be taking calls from customers that were complaining about something. And then one of the calls, a customer said the package came very damaged. And even before Jeff had the time to find out about the package ID and the product, the call center person who was mentoring him, whispered, I know this is very likely this particular product, and it turned out to be correct. So then Jeff implements this stop button, the idea is from a Japanese car production technology technique, where when you discover a place in the production line where there is a consistent or frequent error, you can stop the production, you can get the engineers right there and get it fixed. At the source, right. And I’m fascinated by this, you know, dual leadership or this dual perspective, where on one hand, you have to think about the long-term scale, millions of users, millions of suppliers, a flexible platform, etc. And then, on the other hand, you still have to have your fingers on the pulse of the everyday business. And I think they are probably world-leading in this ability to do both.


Jennifer: I would agree with that. And I think Jeff has an amazing vision, but he also has that ability to narrow in on what is most important and some of that comes from leveraging technology and data to recognize where our problems are going to be arising. Using the analytics for productivity, as well as being a very, very good empowerer. When you look at the way that Amazon is run today, it is very much run like many small businesses. Each division, each area, each department are 100% empowered to make the right decisions. And so he doesn’t have to worry about what every aspect is doing. He can keep that helicopter view, zeroing in when there’s a problem, but allowing every organization to run as its own individual business though. The two-pizza rule you know that you can’t have more than the people that can eat two pizzas in a team because they’ve all got to be able to work together without all these overlapping with getting permissions.


Silvija: And they sometimes have a ten people group, sometimes it’s a five people group. But the point is that sometimes they have ten pizza-teams solving a problem, but they have very defined non-overlapping tasks. And I think for this delegation structure to work, you have to be very, very clear about the goals and the driving rules of your company. And that’s what they have been exceptionally good at capturing in these new principles of leadership that they have. And I recommend the book and recommend all the books about Amazon that I’ve read and the biography of Jeff Bezos. Because, in many ways, now that I’m building Lørn and trying to make it scale, I don’t need to find out those principles from scratch. If I understand why they made them, and how they work, I can apply them in my own company for the scaling purpose. And so I’d recommend people to read “Working Backwards”, and try to understand this scaling for exponential growth in the long-term philosophy of Amazon. 


Jennifer: One thing I would add there that is very much part of Amazon and all of the companies in Silicon Valley viewpoint, and that is the OKR-concept. You start with a clear objective, everyone must know what the ultimate goal is. But then you measure not what people have done, not the number of hours, not the product, but you measure what are the key result. How far is this moving us on the needle towards that objective? Absolutely critical.


Silvija: Cool. And we have five minutes left in this lecture, Jennifer. So let’s talk about Adobe. Why do you like them?


Jennifer: Yeah, Adobe is a very different example, because they were started about 32 years ago, and started as a very traditional company, building software, and kind of like Moore’s Law every 18 months there was a new software release. And that was partly because that’s how long it took to develop software, how long it took to get the product out into the market, upgrades. But they recognized in the 2000s, that a few things were changing in the market, very good at understanding their customers’ perspective. People needed new features and new capabilities more quickly than every 18 months. And their customers valued certain point features. Not everybody used everything in a bit of software, but only what they wanted when they wanted it. And so they started in the early 2000s to explore how could we offer software as a service. Instead of selling the product, let’s sell access to the product when you need it where you need it. And so in 2009, during that financial crisis that caused people to rethink all purchasing power, they were in a very good position to say: “Great news, you no longer have to pay $3,000 for upgraded software, you can pay $25 and get access to this feature for this month. And continue if you want or not.” So they shifted their model very quickly based upon customer understanding, based upon researching and exploring before they needed to make a change. And they leveraged very closely the analytics, customer behavior, what are people willing to pay for even in a recession, and built on that to get a strong foundation, from 2009 to 2013 of customers shifting from buying a product to service and building a very predictable revenue stream. They have the challenge, like a lot of companies today of how do you go from a company that sold $3,000 of software to millions of people to suddenly selling $25 of software to hundreds of millions of people. There’s this business model transition, and a lot of really good leadership techniques around how they made that transition, keeping their stakeholders from Wall Street to others content with the vision, the vision of really changing the model, predictive revenue, and growing a much stronger long term customer base. A lot to learn from that story of transition, but truly a market changer in shifting the model from product to service based on value and customer experience.


Silvija: Agreed. Supercool example. Jennifer, we are going to stop now. This is the end of lecture number two. And after a couple of minutes, we are meeting again for lecture number three, which will be about what tools and tactics can people start applying to create exponential growth in their own business. Thank you.


Du har nå lyttet til en podkast fra Lørn.Tech. En læringsdugnad om teknologi og samfunn. Nå kan du også få et læringssertifikat for å lytte til denne podkasten på vårt onlineuniversitet Lørn.University. 


Leksjon 3 - ID:M0007c

Leksjon 3 - ID:M0007c

Leksjon 3 - ID:M0007c

Velkommen til Lørn.Tech – en læringsdugnad om teknologi og samfunn. Med Silvija Seres og venner.


Silvija Seres: Hello, and welcome back to Lørn Masters on exponential growth. I’m Silvija Seres. My guest is Jennifer Vessels. And this is our third lecture on the topic, which is a chat about the tools and tactics of this particular trade. So, Jennifer, welcome back. And maybe I’ll ask you if there is some set of you know, basically, how do people get started? What should they do if they want to start creating exponential growth in their own business?


Jennifer Vessels: Right, so the easiest way to get started is, first of all, think about where you can have the greatest value? Where do you see opportunities? Where do you see challenges? Back to the ranch, you know, what bugs you today? That’s a good starting place of thinking about if I wanted to create something new. If I wanted to change my business – where might I take things? So, look for the inefficiencies. Once you have an idea of here’s something that could be changed or a way I could make a difference. Take a step back and gain what I call PEACE. Because to get from where you are today to that future goal, you need peace of mind, yes. You need peace within your soul because it’s going to take a long way to get there. And it does take hard work. And the way I define PEACE is first, you start with Purpose. What is your purpose? Either to solve this problem, kind of like the Airbnb example we had, or your purpose may be more strategic, like Jeff Bezos’ purpose to change the way people access and interact with items that they need. So, define your purpose, be very clear on that. Secondly, is to Explore. If you believe that the inefficiency that is in front of you is how to most effectively navigate the various transportation system across Oslo? If you believe that is the problem, explore that. Are you the only person having that challenge? Talk to others. Explore options. How would somebody else solve that problem? Spend some time learning from the market point of view what’s needed and what’s possible. Then, when you have a sense that this is a problem – I have some ideas on how I could solve it. Take Action, just do it. It doesn’t have to be perfect. But you need something to go back to people and say: “You know that problem we talked about and your ideas? Here’s something I’ve kind of cobbled together. How would a minimum viable product be, here’s a thought on how this could be solved, would you use this? What would you find interesting about it?” And begin to build on that action. Because by taking action and doing something, you’re proving your passion for solving this problem, and you’re beginning to get an opportunity to interface with others and show that you have some ideas. That leads to the C in PEACE, which is Collaboration. Innovation and growth is a team sport, you have to get others involved. And by acting on your ideas, going and sharing with others, they become psychologically connected and want to help you. And through that, you reach the final E which is Experience, you get experience in growing, you had experience in trying things new, you get experience in talking about and bringing forth your passion. And you also begin to gain the other side of the experience, which is user experience. How do people interface with this? What is most important, what do they value? And through that experience, you can then define – Well, how would I charge somebody for it? What is the thing they value the most? That becomes the business model. Get people to pay for what they value. Based on that experience, you then bring others in that have their own experiences and then it begins to build, one plus one equals three, that leads to that exponential growth. This can all be done through the software on the platform that starts with powerful computer technology, from semiconductors through the network, through the software through the AI. That fertile valley of the platform is there today, to support you, as you define your Purpose, you Explore, you take Action, you Collaborate, and you gain Experience. 


Silvija: Very good. So, there is this PEACE acronym. If I have made my notes, correct. It’s about P for Purpose, E for Experiment, A for Actions, C for Collaboration, and E for Experience. 


Jennifer: Correct.


Silvija: And, to me, this is a very proactive, very practical way of approaching a problem. It’s not about overthinking. And I think that’s one of the problems we often have. You want to do something, and then because it’s so important to you because it’s so strategic, you end up over-analyzing looking for the perfect, you know, proof of traction with all the numbers and the perfect plan and the perfect everything. And while you wait to look for the perfect, the world changes once again. So, I want to hear you a little bit about this sense of urgency that has to belie, the peace acronym


Jennifer: It truly, truly is, and I think, to be honest in Norway, there is much more of a tendency to perfect it. And to make it better and to make it fabulous before going anywhere with things. That is completely the opposite of the Silicon Valley mentality. The Silicon Valley mentality is: “I’ve got an idea, let’s just go do it. Let’s take action, let’s try it. If it fails, in a week, fine, I’ll come up with a different idea.” It’s a completely different shift. And I think today more than ever, it’s critical to act quickly. Because we have this exponentially faster platform if you will. The technology and the software and the AI – things move quickly. And so, if you have a view and a passion for fixing and inefficiency, if it is truly an inefficiency, somebody else will have the same. So act now, because others can jump on to that, but form and spin it much more quickly. Everything goes at least 500 times faster today than it was in the past. So, by the time you get around to perfecting the market could be taken by others. And so, that’s critical. Especially if you’re trying to define something that is fixing and you know need to get fixed quickly. So why not jump in and do it. Part of it comes to risk-take, being willing to take that risk and get it out there. And that takes time to work your head around. But if you’ve got a strong passion, what’s the worst that can happen? Does it fail? Then you try again.


Silvija: I think there are cultural sides to that. And I think there might be a higher obstacle in let’s say Norwegian culture than maybe in Silicon Valley culture, with, you know, failure, losing face, and admitting that, you know, the first attempt wasn’t successful. But I think it’s really important for people to realize that it’s a necessary part of doing something new. You know, if you haven’t failed, then probably you’re not innovating enough. You know, if everything went according to the plan, and you know, numbers and customers and everything just got lined up the way you planned it, then it’s not an innovation.


Jennifer: Exactly, and in many ways, failure is the number one thing people look for in hiring people in Silicon Valley. Where have you failed, because that’s what you learn from? You learn from what doesn’t work, you gain experience and it shows you’re willing to do what it takes. I mean, look at Steve Jobs, a perfect example. I mean, he was an utter absolute failure at one point in his life. One of the few people that’s been exited at the board level from his own company. But he kept the purpose and he kept the passion, and ultimately was able to come back and build a very different business based upon that. Would Apple be where it is today if it weren’t for Steve having been thrown out when he was? Hard to say, but I seriously doubt it, I think that made a big difference in the organization.


Silvija: The other thing that I think is important, so what is the kind of competence that is required for you to be able to take a risk, accept that, you know, innovation is a failure. I think Churchill had this wonderful quote, saying that success in life is nothing but something like stubbornness or persistence in going from failure to failure without loss of enthusiasm. And, you know, I think you have to accept, but the other thing is that it’s through failure that we learn. That our understanding of the world changes. And that’s what you need if you’re going to innovate. The other big stop showstopper for innovation and exponential growth Jennifer that I see in people is complacency. You know; “this is good enough for me, why mess with it, if it works, you know, I have more than enough work to do.” And if it’s a problem that really can be placed in several, if it’s a monkey that could be on several people’s shoulders, they will try to push the monkey around. And so how do we create this ownership of the problem, you know, so I believe it’s a big problem. But I also want you Mr. Customer to understand that you need to get going on this today.


Jennifer: Yeah, complacency is probably one of the biggest challenges I see in Norwegian society and culture. And, in all due respect to me, things are pretty darn good here so I can understand that if you grow up in Norway, and this is the way things operate, there is a tendency to fall back into that. It’s all good. I’m, the best way to break out of that, though, I believe, is to recognize where could things be better. I mean, there’s always something that can be improved, and to have the confidence in oneself that I can make a change, I can bring about a different way of doing things. So build your confidence that you can make a difference. And if you’re truly passionate about solving a problem, bringing something new to the world, if you believe that you have that, that mission in life, to build something that is a legacy that will potentially change the world forever. Focus on that. Because if your passion and that desire to drive change are greater than that other side of “let’s just sleep on it and think about it tomorrow,” that will break through, just keep the focus. That’s the purpose, keep the focus, and bring others. Identify others that recognize that inefficiency, that share your passion. We all need people around us to support us to move forward. So identify others to collaborate with and work together as a team to drive forward. And I mean, if I look at Silicon Valley, that’s one of the things that I would say defines the Silicon Valley culture is most people that are there came from other places. Something like 94% of people in Silicon Valley was born in another area, either in America or many times in a different country, and actively took a risk and chose to come to Silicon Valley, to be with other innovators. It’s a community of people working together. So if you are the change agent with a passion in Norway, find others, build your own community of people that support each other in taking those risks, failing, comparing notes, and driving change. You can’t do it alone. It’s a team sport.


Silvija: We are talking now politics, but really, you’re reminding me of, just because of the title, of a film, a New Zealand film I love called “Once We Were Warriors”. And sometimes I think that you know, we should tell that to Norwegians. “Once You Were Vikings, guys.” You know, go with, be explorers that you were born to be. And even though your country is our country and is one of the most successful and most wealthy and most equal and democratic countries in the world today, we can still have it taken from us by this extreme global polarization, and the extreme global forces going on now, both in technology and therefore in society. So, I think that there is no space for complacency and that we should use some of the national DNA, that might help us regain this explorative streak. And, you know, from what we talked about, now, if I summarize, we talked about this technique to structure a project. To get started in practice with a project. And then we talked about some personality traits almost that are required, and one of them was risk-taking. And I think that comes about as a result of a combination of confidence in your ability to solve it in the end, and humility – not to worry about having failed a few times along the way. And it’s a difficult combination, but I think it is there with absolutely every successful entrepreneur. And you could say, well, you know, how is Steve Jobs humble or Elon Musk? But you know, they are willing to try. And they don’t care that the first rocket or the first iPod or, they’re twisting and turning and perfectly happy being laughed at by naysayers until they come to the goal, and they know they’ll come to the goal in the end. So, this risk-taking, having fun, not taking everything too seriously – that’s the first part. The second part we talked about is this hunger, this fight against complacency. You know, understanding that, even though life is good enough as it is, there are some things I just have to fix, and nobody other than me can fix them. And that necessity of change, I think is a very, very important part of that. 


Jennifer: Yes, I completely, agree, and I do think that Norway is at a critical time. Because this platform, as we’ve talked about is faster and faster, change is happening more and more quickly. And by remaining complacent by not taking the risk, by not pushing forward with urgency. Norway will fall behind. And from some of the statistics I’ve read recently – is starting to fall behind in areas of technology, leadership, and market leadership. It’s all about understanding where are the problems, customer experience, how do we commercialize it, how do we find the value, and how do we grow? And I think it’s a huge opportunity for the people in Norway with great technical skills and huge scientific DNA to reengage that Viking mentality. Become the explorers again. How can we build on our platform of knowledge skills, academic, science, technology? How can we leverage that with taking a risk and commercializing, brawling, challenging, innovating, trying something different, and having the confidence to move forward quickly, with Purpose, and with Exploration, but moving into Action, and that ultimately builds that community of Collaborators to build the Experience?


Silvija: I think it is a great summary, Jennifer. And the final point I want to make is that this understanding of the necessity to change, the necessity to keep exploring, to find new solutions. You know, we had a run of about, let’s say 50 years of growth and immense wealth in this country. But if you look at our past, we have very difficult geography, we have a very difficult climate. And I think that there are advantages to having a difficult start point as well. So, I think it would be also useful to think back to why did we become as good at things that we were very good at? And I think it was because it was necessary to figure it out in a way that nobody else could figure it out and that sort of line of thought will help us again, in this new digital exponential climate change and the set of storms, if you wish.


Jennifer: I completely agree. A phrase we use in Silicon Valley is “Necessity is the mother of all inventions.” Look at Airbnb, three people that couldn’t pay the rent on their apartment, there was a necessity, how are we going to get money in? Well, let’s rent the floor of the apartment. Right? When the pain of staying the same is greater than the pain of trying something different, well, yeah. And so, I think for individuals that have an idea, look at it, where is their pain? Where are people finding challenges, that’s become the ramp, then use the confidence of your skills, the capabilities, and the technology to do something about it now before someone else does.


Silvija: Excellent, I think that’s where we’re going to stop with lecture number three, and in a couple of minutes, we are meeting for our last lecture or conversation. And that was going to be more of, let’s say a play date on the topic of how would we create exponential growth in a particular company. I’m going to put forward Lørn as an example. But I want our audience to think about their own company having kind of this conversation with you. So, see you in a short while 


Jennifer: Perfect, thank you.


Du har nå lyttet til en podkast fra Lørn.Tech. En læringsdugnad om teknologi og samfunn. Nå kan du også få et læringssertifikat for å lytte til denne podkasten på vårt onlineuniversitet Lørn.University. 


Leksjon 4 - ID:M0007d

Leksjon 4 - ID:M0007d

Leksjon 4 - ID:M0007d

Velkommen til Lørn.Tech – en læringsdugnad om teknologi og samfunn. Med Silvija Seres og venner.


Silvija Seres: Hello, and welcome back to our Lørn Masters on the topic of exponential growth. I’m Silvija Seres and my guest today is Jennifer Vessels, and we are just starting lecture number four. Welcome back, Jennifer.


Jennifer Vessels: Thank you, good to be here!


Silvija: Very good to have you here, still, and again. So, this is our final chat on the topic of exponential growth, and the way we usually structure this is that this is a workshop. So, it’s a live date in front of people trying to figure out with your help, how to apply the topic that you talked about on a particular case. And in our case, it’s Lørn, always Lørn. So I have a company. It does corporate education in digital format, and through digital channels, and I have a problem Jennifer when I look for investors. So, companies are beginning to buy from us, companies have recognized the problem of bringing all of their employees to the same place when it comes to the understanding of their strategy and the necessary technology to implement the strategy. So, onboarding, reboarding, cross-boarding of employees is beginning to be a recognized problem. And there is also an increasing willingness to spend some money on doing this. Budgets are being repositioned from sending people to big conferences or sending people to individual very expensive courses, to programs that include all employees and that are tailor-made, and very fresh. So far, so good, right?


Jennifer: Yeah!


Silvija: But when I talk to my investors, they tell me: “This is not exponential growth. You’re just a media company. You’re a consulting company, and you’re selling project by project. All good and well. But this is not an exponentially growing company.” But I tell my investors or potential investors: “no, no, no, no, wait, wait.” Because when a company buys from us, they are going to buy me buying two things. One is a certain sum for the production of several cases, of several workshops or conferences, but also, they pay per employee, access to our digital platform for distribution of all of this content. So, there is a certain level of subscription-based revenue here. Isn’t that good enough? And then they tell me: “Well, you still have to convince me that the company will come back with these licenses year after year after year.” And what’s the compelling and necessary reason you’re providing them to come back with this? That’s the one requirement they have for exponential growth, they want to see this annual recurring revenue. The other requirement they have is, they want to see a platform that can serve not just five corporate customers with you know, 1000 employees each. They want to see a platform that can serve as many as Airbnb can serve – go international, etc. So, I don’t know, I’m coming to you, help me think this through, and how do I re-position my little company from selling consulting services into selling managed services with annual recurring revenue and the platform distribution. Where do I start?


Jennifer: Yeah, and it’s a great dilemma because as I listened to you describe it, I would honestly have to agree with the investors because currently, today if you’re selling the product, i.e., we will come into your company and we will understand the needs and we will build this program and we will roll it out. That is perpetual if you will, or product sales, and it is selling based upon what it takes to create it, i.e., the number of hours and number of technology bits. You’re selling a product that is not aligned for the market of exponential growth because it means you’ve got to sell that product to multiple, people multiple times, and there is no guarantee that they will come back. 

Silvija: So, I want to add to that, because, the basic problem here, and they can come back, and we can try to convince them. So, you know, you don’t do, you don’t do knowledge program or competency program once and then you’re done. The way that the world changes in an exponential manner. What you need to do is keep doing this year after year after year. But even so, it takes, you know, it’s a function of hours you have to spend creating that competency-building program. So, the big question, I guess, is, how do we make sure that the competency program we built for one customer first of all scales very, very much related to the number of people taking it internally, but maybe also has some external effects. Are the people listening? Or what do you think? How can we move from this point of, you know, being paid by the hour?


Jennifer: Yeah. So, the real answer is to understand what is the unsolved problem that you’re solving better than any other solution out there that multiple companies need for? What is that number one thing that makes Lørn the right choice for a hundred companies in Norway, or a thousand companies around the Nordic that no one else can do? I’m just making this up. But let’s say if you talk to your customers, and you talk to people you want to have as customers, and you identify through that exploration, that the thing they are not getting from any other education, LinkedIn learning, conferences, everything – the thing they’re not getting is the real human practical conversations with thought leaders. They get a lot of theory, they get a lot of speakers, but they don’t get conversations that apply to their business. If that’s the thing they’re missing, then you ask them: “For you to have a regular ongoing every year X amount of access to conversations with the latest thought leaders, what would you be willing to pay for that?” That’s part of that exploration. So, if they want to hear from three of the latest thought leaders in conversation with Silvija, every year they’re willing to pay money, that’s what you begin selling. You begin selling real conversations as a service.


Silvija: I think we’re getting close to the core of the missing items. So, you know, storytelling on your own cases is the missing part of corporate education as I see it. I think that there are really good courses on the theory of many, many topics. 


Jennifer: Yes.


Silvija: Actually, what we’re doing now is more similar to what LinkedIn learning does, or Videocation, or Coursera, or you know, Glassdoor, or Udemy, or Udacity. And they create a video first or sound first, or text first with a quiz and you can go and learn a topic. But very often, it is not a conversation and so you have to watch the video and be fully concentrated. So, the first innovation that I think is “ours”, is that we are using podcasts as an educational format because we believe that it reaches people in these in-between moments, which is the only time left available for learning. You know, you’re busy in your job, you’re busy in your private life or you know, you should focus on your private life when you’re having your private life, but while you’re driving to work, while you’re exercising, while you’re painting your house, while you’re sitting in the airplane – you can listen and learn. So, it’s a format innovation, but it’s also innovation in the sense that I believe that it’s easier to remember if you hear a good story than if you have to listen to a very formal lecture. So, it’s you know, it’s a podcast for the time in-between, it’s a conversation, and the story so that it would be an easy pill to swallow. It is very, very comfortable, it’s very convenient. And it’s in this combination of new formats, the third innovation is your own stories. I believe that people learn more from their own stories, told with the right understanding of all this new technology and trends than they would learn from a story about GE, or Microsoft or Tesla or Airbnb or Amazon. So, it’s creating this space for learning within your tailored content, put in a new format, and then getting everybody on board. That’s a really important part of it as well because what you see in most companies is that there would be people like you and me, that are, you know, almost pathologically optimistic, and curious and keen to learn. And then the 70-90% that says: “You know, I’m more than 35 years old. I have more than enough to do in my job and can you just let me get on with my job. I can’t be bothered, honestly.” And so how do you get all of them on board? Because this has to be a joint journey, you can’t go it alone. So, something about that is the idea.


Jennifer: Yeah, and I love the idea of the uniqueness being the storytelling and making it real for people. So, the question that I would suggest, you know, you go out possibly, and talk to your customers about is: what are the kinds of stories that that would make a difference in their organization? What are the areas in which they have experts internally, that could contribute to those stories? Because if you, I’m just making this up, let’s say you talk to people in Storebrand, and they say, I have Jan over here, who is great at telling stories about when he worked at Google and how analytics worked, and how that applies to the insurance business. Great! Let’s sign Jan up to do one of these. Let’s get him motivated. Let’s get him psychologically committed. He’s going to find more Jans in the company and you build momentum. So, start small, and build that process around something that you believe is a unique problem, i.e.: how to get people involved in their learning, how to learn from stories, and how to build within a company their own bucket of stories and learning.


Silvija: And that’s part of what we do, and that part goes well. The difficult bit is getting all employees on a platform. So, the reason why we are talking now, with a special focus on exponential growth is how do we go from delivering a great service, which is very popular, into making it into this new digital platform? And what are your thoughts there?


Jennifer: Yeah, so I guess the thing I would question is, is it a challenge of how to roll it out, i.e., platform, or is the challenge of how to build a business model that gets you to that exponential growth in reoccurring revenue? If the problem is more on, how do we get the exponential revenue growth? I would suggest you look basically at what is going to drive people, i.e., your decision-makers in companies, what is going to drive them to commit to annual revenue rates at a higher level. It may be having more people use the platform, that may be one way of getting a higher revenue amount. Or it may not be. The company may say: “We have 25 people that are high potential upcoming leaders, we want them using the platform 50% of the time, we don’t care about the other 75%”.


Silvija: This is where I have the biggest kind of challenging sales moment with the companies because if we all continue doing that. And this is what companies do today, they have their high potentials sent to good programs, national or international. and it’s the same high potentials who already go to Coursera and LinkedIn in addition to this. The problem is that you know, you can’t build your company’s future on the top 10% of your employees alone. You can’t have an HR strategy that is going to try to get rid of the remaining 90% and keep replacing them every third year, with these new high potentials that will also become outdated after three years. So, you know, we have to move from having ambitions on behalf of our top new heads, as we like to call them to ambitions on behalf of all. And I think that the trick here, strategically, Jennifer, will be to convince companies that the cost per head for all is so affordable, that it’s almost immoral not to do it. So, how much is each employee worth to you? Okay, so you’re willing to send that guy to INSEAD for a cost of 800,000 Norwegian kroner or maybe they’ll go to Solstrand for half of that sum. But, you know, are you willing to spend 500 kroner per employee. Every employee, to make sure that they are a motivated one and capable one more year? I think that is an HR discussion that is overdue by at least 10 years.


Jennifer: I agree, and sometimes it’s simply a question of, how do you go about it, because if you’re finding you have to convince the customer to do that 50 a year per person if you’re having to convince them, that may not be the path to take. Whereas if you shifted, go where the puck is going, go where the customers’ mind is. If you shifted to say, instead of spending 800,000, or 400,000, for these 50 people, why don’t you spend X amount to cover these 50 people? And by the way, anybody else that happens to want to do this can follow along, but let’s not worry about them. Your hand is only 50. Let’s set the price based on the 50. You can spend 100,000 for each of those 50, everybody else is great, no problem. And you still get to your result.


Silvija: I think that there are two important things here, and if it’s 50, and the rest is free, that’s fine as well, but I think it has to be every year because people also think: “Well, you know, we did it two years ago and we’re happy”. And then you have to ask them: “Well, haven’t you innovated in the last two years? Hasn’t the world changed?”. Or we can come up with a new focus area every year. So, I think it’s this understanding that it’s urgent, and it’s continual. And then the other thing that I think is important is that people already say: “You know, we already do this, we have our competency program in place, and we are spending tons of money.” But then the problem with that is that they’re not measuring the effect you know. So how many of your employees have taken those courses? And what do you do with the 50% that hasn’t touched them? And, you know, have you put your own content in there, or are you just buying content that has been created by a business school three years ago?


Jennifer: Two things. One is on the first challenge that you mentioned: how to get past selling it for this year, you know, we’ll try it this year, and then we’ll let you know if we want it next year. A way of approaching that is in your pricing model. That you’ve got these 50 people or 10 people, you want it for a year, it’s 100,000 per person for a year. Or if you sign up for a three-year program, we’re actually going to give it to you for less. It will be 75,000 this year, and then we will charge you 10,000 for the same thing repeated next year 10,000 for the same thing repeated the next year, and then we’ll offer you other things that can sit on top of that. That’s the Amazon Prime model. You’ll find what they are willing to pay money for. They want to pay money for these general 50 people, make that easy. And then tie in something that keeps them connected to you. And I’m sure you have the data and the analytics to recognize what are the programs people are interfacing with, which ones are being used the most, those are the programs you offer at a higher rate, new versions in year two, even higher rate new versions in year three. So, you leverage the platform that you built by locking people in through basically a pricing model based on what’s going to be most important to them. That would be the first part that I would start with.


Silvija: I think you’re into something extremely important because I think it very much starts with the pricing model. We are educating the market, and they need to understand the continual nature of this type of product through a pricing model. And the other thing that you mentioned that’s important is being able to use analytics, you know. Have data that proves the value of your product, I think that’s one thing that’s missing in many of these other programs. So, I think LinkedIn learning is now coming with the capacity to define a learning path by a boss for his employee. That’s the sort of thing we can do with our platform as well. So, you know, make it so that it will be the learning data, that will be the relevant report to the company that’s using this because they will then see that: “Okay, so 75% of all my employees did this part of the program. While this part seems to be quite unpopular, let’s understand what and why.”

Jennifer: Exactly, and you can also leverage that data to reward the learner. So, you send stars out: “yeah, you’ve just completed your third program, now give some feedback to your manager, give some feedback to the next three people that are coming in the program”. You begin to build the community, that’s the Airbnb model. Get the host and the renter involved, get them bringing other people that, that builds that momentum, and gives you a much stronger ability to go back to your decision-maker to say: “Look, Jan has already gotten this amount of stars, and he’s brought in five more people, and he’s recommending your customer start using this.” So, you build the momentum from there. That’s the exponential element, it’s not Lørn doing it, you get the customer to do it.


Silvija: Very cool. So, we haven’t talked a lot about the platform, or the platform side of this is having access to all the content in a structured way. Having maybe third-party content, having access to student data, and being able to start creating new services. On top of that data.


Jennifer: I think that’s absolutely a key element here. The important thing there is to first recognize what is going to be most important to your customer? What’s going to drive that user adoption, i.e., the people to take the programs, what would they be willing and able to come back into and do? Get them to make comments, get them to provide the testimonials, and then go back to the end customer and build from that viewpoint. But they make it available for what’s most important. And then you can restructure your business model such that at level one, you get to see these things. At level two, you pay more, and you get to see these things. Based on the data of what is most important to people and what are they engaging with the most and having the greatest success with. Reward-success, that goes very, very far away. We all like to get gold stars, and we all like to get likes and building momentum.


Silvija: Very cool. Jennifer, I think we’ll stop there. So, from my perspective, what I would like listeners to do is try to think about their own company, maybe their division in the bigger company, in the similar way that we discussed Lørn now. So, start with what’s the market failure that you’re trying to fix? What’s the problem that you want to rant about, that you think is worth solving? And then try to think about the unique data, the unique technologies, the unique people, the unique market access, the unique partnerships that you might have to be solving this and then try. Try to create different experiments as Jennifer was talking about, you will learn from each of them, remember, this takes time. This also takes quite a bit of confidence and humility. But, it’s the only way forward, and, Jennifer, do you want to give people some sort of final advice on how to grapple with exponential growth?


Jennifer: Yeah, the best place to start is with your purpose. What are you trying to solve? What do you believe you can leave as a legacy in this world? Be willing to do that exploration and experiment and try things. And take action with colleagues. The collaboration part is so critical. How can you bring others that have similar passion around you, to help support you out of complacency to push you up when you have that failure, and to look at things differently? And through that, you will gain experience. And as you gain more experience, you can go back and look at and say: “Based on the data that we have, what people are doing, what the user rates are, where we’re succeeding? How can we bring more in? And then how do we set our business model or pricing in our long-term strategy around customer value.” Because ultimately, the technology and the platform that we have, that is that fertile soil, what is going to create the flowers and the blossoms, and the garden is based on the value that you’re going to bring forward into the market. It takes time, it takes persistence, and it takes a lot of passion to stick with it, do what it takes, but good things will come and flowers will grow. As will Lørn.


Silvija: As will Lørn, exactly. Jennifer, thank you so much for joining us here in this master series of four mini-lectures about exponential growth. 


Jennifer: Thank you for having me.


Du har nå lyttet til en podkast fra Lørn.Tech. En læringsdugnad om teknologi og samfunn. Nå kan du også få et læringssertifikat for å lytte til denne podkasten på vårt onlineuniversitet Lørn.University. 


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