NTEGRA’S INNOVATION TEAM visit Silicon Valley early in the New Year every year as part of the preparation for the Ntegra US Research Tour in May. As well as being the perfect time to form the agenda for the May event, it also provides us with some quality time with VC’s, founders and other movers and shakers in Silicon Valley to get the “behind the scenes” view. Late January is perfect. Everyone is focused on the year ahead and last year is still close enough to be able to reflect.

Looking ahead

No single technology or trend dominated the agenda

A pre-tour visit always proves to be a hectic time. Up early in the morning because of jet lag then a constant flow of travel and meetings both in the city and in Palo Alto and the surrounding area. Meetings blur with lunch which blurs with more meetings, blurring into dinner, then ready to repeat the next day.

This immersion gives us the perfect opportunity to exchange views and have candid conversations with some extraordinarily smart, well informed, well connected and influential people. This year was no exception. A bonus on this trip was that we were able to base ourselves out of San Francisco’s new downtown address, Salesforce Tower, a building that has changed the skyline of San Francisco. Bird & Bird, our partners for our 23rd US Research Tour, have recently opened a San Francisco office and secured some prime real estate on the 37th floor with great views across the city and some (nearly as) great coffee!

No single technology or trend dominated the agenda. We continued to hear about Artificial Intelligence; however, this is the ongoing verticalisation of existing technology against new datasets rather than breakthroughs in the core technology. The marketing teams love using AI and machine learning where they can to increase the hype.

With data scientists in short supply, Augmented Analytics promises to take up the slack. This is an excellent fit with some of the data-analytics tooling we saw in Israel in November. If you are fortunate enough to have a data-scientist the tooling is available to let them focus on their magic rather than be inundated with the mundane. If you’re struggling for skills in this area, Augmented Analytics promises to help bridge the skills gap.

Blockchain is breaking into AdTech by providing trust platforms for highly targeted programatic campaigns, and CISO’s are re-discovering the concept of zero-trust architectures as a response to modern cyber threats.

Investments and China

Not only is the amount of money coming from China reducing due to a slowing domestic economy, but the money that is available is subject to new legislation

A recurring conversation was the changing profile of investment. Investors are looking for later series deals, thereby reducing risk by balancing the increased probability of large returns on exits. A number of the larger VCs also commented that it’s currently a buyers market.

During our conversations with VCs and founders, the topic of foreign investment came up frequently, particularly investment from China. Not only is the amount of money coming from China reducing due to a slowing domestic economy, but the money that is available is subject to new legislation. Effective since November 2018, the powers of the Committee on Foreign Investment in the United States (CFIUS) were strengthened by temporary legislation written into the National Defense Authorisation Act. This legislation tightens rules on foreign investment in sensitive industries including technology and telecommunications with the aim of curbing Chinese investment. Any foreign investment in these areas must be reported to CFIUS if the investor’s role would allow access to non-public information or allow them to make substantial decisions. The committee will then either approve the deal within 30 days or open an investigation. This temporary legislation is expected to be in place for over a year while permanent legislation is drafted.

One founder we met with had a late-stage investment offer from a Chinese investor which they will likely turn down without even getting as far as reporting it to CFIUS such is the nervousness around these types of investments.

Innovation

Those organisations wholly embracing Digital Transformation and Innovation are rare.

A shift in focus this year was the overall discussion around innovation. The Digital Transformation Gap was referred to on multiple occasions. We can think of this in a couple of ways. Firstly, how successful is an organisation’s Digital Transformation Strategy and secondly, how innovative is it? Those organisations wholly embracing Digital Transformation and Innovation are rare. Innovation as a word is often used where the word ‘improvement’ would offer a better description. Each organisation’s Digital Transformation journey is different, however ultimately the mantra ‘disrupt or be disrupted’ cannot be ignored.

There were some signals around emerging technology. Computer Vision is a technology which we are only just beginning to exploit. Vital to enabling fully autonomous vehicles, computer vision has many other applications. Simpler datasets than those required to navigate a road by will drive many visual applications. We also saw this in Israel last year with some highly verticalised solutions. This trend combined with augmented reality will create a new generation of vertical vision/AR applications.

Training is one obvious use case for this technology.

Building on this, Human Resources as a whole is undergoing an innovation transformation. With plenty of backoffice processes to be automated, efficiency gains are to be had. When combined with Artificial Intelligence, talent sourcing can be streamlined and hiring bias can be removed. We expect to hear about more early-stage companies in this vertical.

Workforce dynamics

Finding, hiring and keeping the best talent is a challenge

We also expect the Facilities Managers to be busy. There is a noticeable increase in companies based out San Francisco rather than Silicon Valley and some looking to make a move to the city. While this could be a short term shift as the current generation of millennials, prefer the urban lifestyle before they start families, the overall affordability of both the city and the valley cannot be ignored. Finding, hiring and keeping the best talent is a challenge in this environment. We were keen to understand how some of these challenges are being addressed, specifically by promoting diversity in the workplace. These challenges are not unique to San Francisco and Silicon Valley, but they are more acute. We are looking to develop this as one of our themes for this year’s tour along with taking a practical view on how to close the Digital Transformation Gap.

This year’s agenda will be packed full of insight, technology and practical advice on how to become an organisation that embraces innovation. I hope you can join us in May! For more details on the 23rd US Research Tour and to register your interest go to: https://ntegra.com/ event/23rd-annual-us-research-tour/