What is the “Speaking of AI” series and why?
Most of the people who are close to me probably know that I really value being notorious about my views and thoughts when it comes to both business and the tech world, I’m simply realistic in my views whether people like it or not, I don’t plan on changing this soon. Read more to know about the “Speaking of AI” series.
Let me put it in another way, I’ve never believed in sugarcoating, especially when it comes to business, startups, ephemeral tech hypes and the like, and so I always put my sincere and realistic thoughts out there for the greater good – most of the time, receiving honest input on these matters that impact the business and economy is probably the best feedback a good citizen could ever share with people who really care.
This series is called: “Speaking of AI” because artificial intelligence (AI) – among notable other technologies like blockchain – has always been a scapegoat for most businesses and startups, this is why I intend to write under this series multiple “brutal” thoughts and opinions that debunk the fluff and abuse toward the noble goals and values of these amazing technologies, I too, provide resolutions along the way to make this better, as I believe in fixing things rather than just complaining about them all the time.
As a professional who spent almost ten years managing different set of businesses, to name few: software development, mobile apps, game development, security and artificial intelligence, I can safely say I have a good exposure on the tech business here in the region – especially in Bahrain – and the hot startup scene, our portfolio at INFINITEWARE and mine personally is a testament on how small enterprises can get a chunk of the market share when focused on a niche discipline.
You, my dear reader, could either be an investor, entrepreneur, government official or someone who just shares my love and concern for the economy, whatever it may be, I appreciate you reading this with an open heart and mind as my ultimate goal is to make things better for all of us by having a richer economy, where all of us: hard and smart workers can prosper in a healthy environment that values good work and values, enjoy this read and please let me know of your sincere thoughts.
The road ahead
The topic “Investment Hygiene in Technology” is my take on multiple things surrounding investments:
- Why it is difficult for true entrepreneurs to get healthy funding schemes, funding and subsidization.
- Bad practices in both private and government investments
- What good investments are ought to be.
Let’s first talk about why technology is very appealing to investors, let’s dive in:
The complex relationship of investors and tech
Technology is amazing, you almost always hear a new technology making significant changes to our lives on a daily basis, businesses have noticed this long time ago and the Internet boom has allowed more investors to have faith in technology and the financial incentives whenever we’re talking about ROIs.
The Internet era allowed an army of startups to spawn, thus creating interesting businesses with true essence and value, and not only that, it’s almost always cheap to come up with convincing MVPs that can easily allow entrepreneurs to secure seed funding, this is super important when compared to other industries like manufacturing where its expensive to start up a business most of the time, as you’ll have to acquire equipment, huge factory spaces and the akin, it’s impressive that software allowed us to start businesses right in our apartments – or garages if you’re coming from the west.
Companies like Microsoft, Google, Amazon and Apple all started by creating effective technological products, mostly software though, it’s impressive that all you need to build a good product in the software world is a matter of acquiring a computer and a set of development/business skills. I know I’m making it sound super easy here, but my goal is to exhibit to you how accessible this industry is for booting a business or a good product.
As much as this is dandy and cool, it brings a new set of problems, notably funding. Investors don’t all share the same values in the end of the day, some people are in for the money, others are in for technology itself and some others are even for weird reasons that are too funny to mention. This, is the main reason we hear so many crazy stories about investment, whether they’re good or super bad.
Remember the dot com period, remember the bubble? Rings a bell now, right? Yes, that’s exactly what happens when investment goes wrong, check this Wikipedia page in case you needed to know a bit of history about what happened back at the dot com period where investors went crazy investing in all sort of Internet companies, this is years before the word “startup” got coined and probably abused big time, companies’ valuations are just out-of-this-world figures, it’s just absurd, but some really deliver though.
It’s not only private investors that are all over technology when it comes to funding, government is also a big spender, especially for nations where there is limited channels of income, diversifying income is always a good idea, the intention doesn’t matter much when the execution is bad and this is why the next sections sheds light on the biggest quirks that are making funding an obstacle to flourishing.
When people abuse the technology parachute to serve their short goals, the damage stays there for decades, don’t believe me? Read about the AI winter, actually, read about both of them. Artificial intelligence got it good, all because speculations were not that realistic, forcing investors and the community to lose interest in supporting AI initiatives, AI has been there since the 1950s, but thanks to the excessive over-promising speculative takes, investment dried, AI has been in the dark for decades, we don’t want to do this again for the tech industry, do we now?
When investment hygiene smells really bad
I’m not going to be able to cover all the bad practices that happen under the umbrella of investment, but I’ll list the top shortcomings I’ve personally witnessed across the years, be it performed by private investors or governments, here are the top items:
1. Investors and beneficiaries have different agendas
There is one important aspect that you should comprehend as soon as you can, especially if you’re an entrepreneur, investors have all the right to do invest in whatever they want, it’s their money in the end of the day, no bashing here, nonetheless, this simple truth has many ramifications that we better understand before commencing any important endeavor, although, I beg to differ when investments and coming from the government, if that’s so, it’s a different story, I’ll shed some light on this too in a bit.
As an investor, you most likely want to do good investments leading you to land good money, this is why you hear investors investing in tech most of the time, the news ought to give you the sensation that the tech world is full of money waiting to be unleashed, and that’s really true, how you get the money and from whom define how healthy your journey is.
Let’s not throw all the blame on investors alone, beneficiaries have their own agenda too, sometimes even abusing the whole tech move for damaging personal gains, here are few that you can never miss if you’ve been exposed to the artificial and blockchain news lately:
- Entrepreneur wannabes: these people want the hype and money that startups normally receive but they don’t want to bear the difficult journey it holds for them, I’ve seen people collecting money from every other subsidy they can get to just for the sake making money, these people most likely sell their “wreck” to another company, they love to label this as an “exit”, where the honest term is more of “getting the hell out” of a bad startup, works every time, especially when sold to non-educated investors that get off on hearing IoT, AI, VR and blockchain in the same sentence, not knowing that implementation is more of a dream, make-believe, people.
- Cheap event organizing entities and misleading speakers: these people use new technologies and the available jargon just to create superficial events with no real gist, where sessions are all label using sexy terms under the “tech” title with no tangible value in the end of the day, can we just stop the blockchain conventions that has the same vague sessions, how can you label your conference an event for professional blockchain experts if most of your non-paid speakers have not even touched Bitcoin or Ethereum in their lives? See the irony, right? Good. You won’t believe how many times I’ve had event organizers wanting me to do a workshop or a talk free of charge, it’s always a no to these people without a sweat.
- Fake consultants and experts: these are the people claiming to be available to do feasibility studies and consultation in aid to redirect businesses in the right direction, matters that surround the technology spectrum should always be judged or tendered using a convincing portfolio, you won’t believe how most of them only excel in their American or British accent, no substrate, nothing else.
2. When KPIs abuse turn into a catalyst of failure
The concept of KPIs – no matter where you apply it – has all good intentions embedded in it, measuring performance is important for any endeavor, be it social or business but a true problem really spawns when an environment or an individual exclusively values KPIs for their job safety and end-year bonuses.
You won’t believe how many times I’ve heard the question: “but can we mark this as done if we do this?”, as innocent as this might sound, it kills real value and performance most of time, undoing exactly everything KPIs were made for in the first place.
I’ve seen this in many key organizations that are responsible of drastic national goals, no matter how ugly this is, it’s the bare truth, this is very relevant to “bad hiring” and you’ll see in a bit, KPIs should thoroughly and periodically get questioned, revised and justified, otherwise, they’re just figures and bullet points on a word document setting on a wooden meeting table.
You find misused KPIs all over the place, government and private companies, I’ve seen and interacted with it with my own eyes, you lose the shock after few encounters, KPIs are mostly used for hierarchies to look important to nations, it’s funny how ass-kissing takes a new form every significant period of time.
3. Taking subsidization for granted
We’re very fortunate to have great subsidization schemes here in Bahrain, no matter what your views are when it comes to the “how” and “where” of spending it, in fact, very few nations give subsidization with almost no plot twist, such as low-interests on loans or similar, my point is, it’s a privilege to have a capital that feeds national initiatives, let’s not waste it.
The problem with this setup is that companies begin to grow on top of a “phantom economy”, what I mean by that is when you hear about companies landing great business deals with great ROI, but when you dig deep you figure out that these companies are not production-material, as either their products or services are not mature, in most cases, their prices are even beyond reasonable, call it fraud in an elegant form.
In the eyes of whoever is providing the subsidization – the government for the most part, they’re doing an amazing job for the society and the economy as they’re spawning off new businesses and more people are getting on the startup wagon, but in reality, this has little to no true effect on the long run because of these subtle fraud attempts, when you’re talking about creating new income channels people, too, mistake it with non-innovating businesses. A new traditional breakfast restaurant or a burger joint opening somewhere, isn’t it like déjà vu, we’re apparently biting more than we can chew on the entrepreneurship meal.
This false sensation doesn’t normally last, especially that government subsidization is mostly part of a project, meaning that subsidization itself is a project that itself has a deadline and KPIs of its own, the million dollar question is that: “how long will free subsidization last?”, making that guess is your homework.
4. Who cares about due diligence anyway
Due diligence is – personally for me – the number one problem, it’s funny and sad how good money lands in the wrong hands most of the time, every time I hear horror investment stories I keep asking myself: “how the hell did they receive money in the first place!?”, never gets old, I swear.
I’ve noticed a pattern when it comes to several funding schemes – or subsidization:
- Funder finds an interesting investment opportunity.
- Funder to initiate a contact and promise the beneficiary funding.
- Beneficiary signs the paperwork
- Funder markets the deal like hell (especially on social media)
- The “funder” forgets all about the venture and considers the project a success and moves on.
- Beneficiary screws up big time, wasting money, time and resources.
- Beneficiary moves into promising more “questioned” endeavors, more money comes in in hope of retribution or a resolution.
- Funder tries to meet their KPIs in any way possible, finding other beneficiaries and the cycle repeats, until funding dries up.
It shocks me to know that most major subsidization opportunities have no “serious” follow up and progress monitoring, the idea of receiving “free money” is never a bad idea but when the nation’s capital is spent on super far-fetched endeavors, I begin to question the efficiency and the mechanism of due diligence.
I remember I heard about an Industry 4.0 initiative that resembled this in its worst shapes, the beneficiary received a real generous subsidy with the goal of creating a total transform to how manufacturing is done, if you have ever been exposed to the vision of Industry 4.0 in the news, you’ll probably know that the Industry 4.0 movement promises a lot of efficiency in terms of production using major interesting technologies like artificial intelligence, internet of things (IoT), virtual reality, augmented reality, 3D printing and such, very interesting technologies if you ask me, but realizing the vision requires a true expertise to deliver on the promise.
The beneficiary couldn’t deliver a thing, in fact, I heard that since the inception of the project – which is like a year and a half – no mile stone has been met yet and there’s even no project plan to run the project! It’s just a goose chase with huge turnover rate in employment, it’s beyond shocking how due diligence isn’t even part of the whole formula, I mean seriously what do these guys do to land a huge contract like that? It’s a waste of money, waste of time and most importantly, unethical, such companies tend to dry up soon as this is their last resort, fantastic story ha?
Another aspect is the trend of startup incubators and accelerators, it’s no news that these sort of businesses can have an effect on nurturing the economy by spawning new interesting businesses that solve real problems and have leverage in business, this only works when accelerators do their job right by implementing proper due diligence policies and when its run by true professionals who ought to resemble mentors and people guiding the way, that’s not possible when you have amateurs running the show.
Again, people will always chase “free money”, it’s in their DNA, and so whene accelerators provide “seed” money against equity for an idea that still exists in thin air, it just sounds good for every entrepreneur out there, whether they’re true about delivering or just interested in getting out with a big pile of cash, accelerators will always receive demand, which might not be healthy for the most part, don’t get me wrong, the idea is fine, execution matters, look at YCombinator and Dropbox, the perfect example.
This gets even more insane when it’s part of a national KPI to build accelerators to give birth to new business opportunities, this is a big investment and it deserves a thorough research, feasibility study and due diligence, this should never be treated as another business deliverable as the ramifications are beyond financial for society and the economy, the fabric of society begins to value short and unethical wins since the system is flawed.
Accelerators are not charity houses, they’re doing this as business in the end of the day, in fact, these guys land great tender opportunities if you check online government records. Making sure that they’re doing this as perfect as possible is the bare-minimum to succeed, shortlisting startups for the sake of filling the slots is the tradition now, it’s even known as the new norm to have people who have never built businesses in their life to decide which startups should cut it to the finals, agony in different forms, again, no matter how we try to stay away from the KPI and hiring subjects, we keep getting back to them one way or another.
I’m not saying accelerators are bad, I’m just saying that when the subsidizers and accelerators do little to no due diligence then you have a great recipe for a failure, financially and socially.
Remediation for a healthy investment
Offering solutions is half of the formula, otherwise I’ll be just be another guy ranting all over the Internet with no resolutions on the horizon.
1. There is no alternative to hiring true professionals
It’s just funny how almost all problems go back to bad hiring, this applies to everything from workers, consultants to decision makers, hiring people who know what they’re doing is the only option, there is no other way around it, otherwise you’ll end of with a missed deadline or a crime scene of messy work and deliverables.
Whenever I give talks at conferences, I always say that hiring should be so rigorously done that you’d think that “hiring” is the job itself, people seem to misunderstand the meaning of hiring all together, the stereotype idea is that you hire individuals to get things done and that’s all about it, for starters, that’s part of the truth but not all of it, getting somebody to join the fabric of your team is very delicate as it has very implications in terms ethics, attitude, delivery, expertise and many more intolerable aspects.
Unfortunately, most of these metrics never get considered if hiring is not treated as a priority to have good work, I’ve seen people getting hired because they’re family, thus skipping the interview queue, I’ve also seen people getting hired to compensate for a sectarian low-count, it almost always results in low quality products or services, this is very common in societies that has strong relationships and low ethical standards for both work and patriotism.
Born and raised in Bahrain, I’ve had the privilege to see some of the best Bahraini professionals with my own eyes – and I’ve been working with global professionals, but since many of them are not coming from well-known families it becomes super hard for them to land jobs that could really utilize their potential to the fullest. Decent and healthy hiring really solves this problem for both the employee and the employers, on a side note, blockchain and artificial intelligence are really good tools that can facilitate this view.
Thinking short-term and solely in favor of quick wins is not a good strategy for the long run, if you’re an employer or somebody who’s responsible of hiring, I urge you to hire thoroughly as this determines how your projects get delivered, whether your project is personal or nation-wide that could shape the direction of our economy, look beyond religion, politics and family, it’s all about ethics, values and deliverables, for the greater good of course.
2. Active monitoring and due diligence
Signing a deal and flooding Linkedin with news and photos of handshakes about it is not a measure of success, let it sink in for a moment. Marketing is important but what is the use of that if deliverables are horrible, active monitoring should be a top priority whether we’re talking commercial endeavors, government subsidization or even in an accelerator effort.
Remember that your personal KPIs bonus could get you a nice vacation somewhere off, but if the gist and real value is almost zero, than that’s just mere selfishness.
3. Efficient and solid regulation
Regulation and policies is how a government insures that the economy grows in a healthy fashion, stopping all the “jokes” that mask themselves as businesses promising to create jobs and employ locals for the sake of making the economy better.
Regulation is the first and last line of defense, if this is flawed, then expect the economy to be a zoo filled with villains draining every single resource while wearing their “I love this country” hat, I’ve seen several leeches in my career, it’s not even funny anymore.