Summary of “Behind the Spectacular Collapse of a Private Equity Titan”

After analyzing the documents they could get their hands on-since some went missing-investigators at PricewaterhouseCoopers said Abraaj’s use of loans to cover operating expenses left it “Sensitive to volatility and potential liquidity crises.” They are now selling Abraaj assets to pay creditors and investigating allegations of “Mismanagement, comingling of funds and misappropriation of assets.”
Up for Grabs Abraaj assets for sale include stakes in 12 funds and holdings in a Pakistani utility and a discount voucher business.
Abraaj’s spectacular demise has dealt a severe blow to Dubai’s reputation as a global financial center.
Abraaj’s Biggest Creditors Dubai private equity firm is defaulting on at least $1.1 billion of debt.
The chronology of the collapse, drawn from conversations with about a dozen people with direct knowledge of the company, lays out how rapidly things fell apart for Naqvi, the suave Pakistani entrepreneur who built Abraaj from the ground up in the past 16 years only to see it crumble in under 10 months.
A fixture at the annual World Economic Forum in Davos, Naqvi had crafted Abraaj’s image as the face of Middle East private equity.
Starting about a year earlier, Abraaj did in fact begin pulling tens of millions of dollars from at least one flagship fund-the Abraaj Private Equity Fund IV-to prop up its finances, three people said.
The liquidators’ report valued Abraaj’s known assets at $1.1 billion, including stakes in 12 funds and investments like the K-Electric holding.

The orginal article.

Summary of “Research: The Average Age of a Successful Startup Founder Is 45”

When we analyzed founders who have won TechCrunch awards over the last decade, the average age at the time of founding was just 31.
For the people selected by Inc. magazine as the founders of the fastest-growing startups in 2015, the average age at founding was only 29.
In general, these finer-grained analyses do not modify the main conclusion: The average age of high-tech founders falls in the early forties.
In software startups, the average age is 40, and younger founders aren’t uncommon.
What about the most successful startups? Is it possible that companies started by younger entrepreneurs are particularly successful? Among the top 0.1% of startups based on growth in their first five years, we find that the founders started their companies, on average, when they were 45 years old.
The age finding is similar using firms with the fastest sales growth instead, and founder age is similarly high for those startups that successfully exit through an IPO or acquisition.
In other words, when you look at most successful firms, the average founder age goes up, not down.
Relative to founders with no relevant experience, those with at least three years of prior work experience in the same narrow industry as their startup were 85% more likely to launch a highly successful startup.

The orginal article.

Summary of “A digital capitalism Marx might enjoy”

Not for nothing did Karl Marx title his indictment of industrial economies, simply, Capital.
The world may soon face a new era of conflict between labor and capital, based on a relationship between the two far different from that which animated Marx.
In their recent book, Capitalism Without Capital, Jonathan Haskel and Stian Westlake describe a 2006 analysis of Microsoft.
On the one hand, as machines grow increasingly autonomous, capital will need fewer workers.
Capital is learning from labor in order to mimic labor and eventually replace it.
Within the elite firms developing and deploying the technologies that are changing the economy, the most valuable corporate capital is the culture-the procedures and norms that shape interactions between highly skilled workers, turning their individual expertise into profitable new ways of doing things.
The case for such a radical approach grows as information accounts for more of the indispensable capital in the economy.
With new capital comes a new capitalism-perhaps one, finally, that Marx could warm to.

The orginal article.

Summary of “Nobel-winning economist Jean Tirole on how to regulate tech monopolies”

The Frenchman is the foremost thinker on market power and regulation, and won the Nobel prize in 2014 for his work in this area.
Are tech firms like Google, Amazon, and Facebook monopolies?
Large economies of scale as well as substantial network externalities imply that we often have monopolies or tight oligopolies in the new economy.
The key issue is that of “Contestability.” Monopolies are not ideal, but they deliver value to the consumers as long as potential competition keeps them on their toes.
Is it possible that today’s tech monopolies will also face stiff competition one day?
Do you think tech monopolies cause more harm than good? Who pays the price for any harm they cause? It seems like, unlike monopolies in the past, tech consumers face low or zero prices.
Does market power justify regulation? If so, can a traditional approach to regulation offer a solution?
Such regulation tries to regulate profit in industries characterized by natural monopoly conditions.

The orginal article.

Summary of “Tomorrow’s cities: Google’s Toronto city built ‘from the internet up'”

On Toronto’s Eastern waterfront, a new digital city is being built by Sidewalk Labs – a firm owned by Google’s parent Alphabet.
Sidewalk Labs promises to transform the disused waterfront area into a bustling mini metropolis, one built “From the internet up”, although there is no timetable for when the city will actually be built.
“Writing on news website The Conversation, Mariana Valverde, urban law researcher at the University of Toronto, said:”The Google folks have not approached the city in the usual, highly-regulated manner, but have been negotiating, in secret, with the arms-length Waterfront Toronto.
For its part, Sidewalk insists that this year will be all about consultation – with city leaders, local policymakers and the wider community, to ensure what is achieved in Toronto is something that “Meaningfully improves lives”.
As part of the planning process of bidding to develop the waterside location, the firm looked at 150 examples of smart cities, including those built from the ground up such as Masdar, in Abu Dhabi and Songdo in South Korea.
“One of the mistakes that previous cities have made is the idea that you can plan something from the top. That is not how cities work – they evolve organically.”
Mr Doctoroff is a big fan of Jane Jacobs, an urbanist who fled New York to live in Toronto and spent her life encouraging cities to improve their shared spaces.
Whether the Google firm’s city experiment will fulfil this promise is one many will be watching with interest.

The orginal article.

Summary of “Ideo redesigns the dreaded annual review”

No one likes annual reviews: They’re structured, overly formal, and they make it difficult to get real feedback that you can act upon.
According to people who work at the firm, associates would get feedback from partners infrequently-if at all-that was completely out of date.
Lawyers would get a ranking that was supposed to tell them something about their place within the firm, but often didn’t have any bearing on their performance-something that happens at other law firms too.
So Hogan Lovells called in global design firm Ideo to help turn the dreaded annual review process into something that’s actually useful.
After a few weeks of talking to partners and associates, Ideo created “Pathways,” a new way of thinking about feedback that-shockingly-doesn’t require an app.
“When we did our research, we thought we could go the tech route, but it’d probably reinforce the behaviors they were trying to change,” says Rochael Soper Adranly, an Ideo partner and the firm’s general counsel who guided the design of the project.
“Associates now are a lot more empowered to request feedback to get the feedback they need,” says Ann Koppuzha, an associate at Hogan Lovells.
“Koppuzha recounted one instance where she asked a partner to give her the 10 minutes of feedback via email. Because it was supposed to be a short conversation, he ended up calling her right away. One piece of feedback was that she should feel more comfortable”managing upwards”-in essence, keeping the partners she works with on task by reminding them about deadlines.

The orginal article.

Summary of “Tomorrow’s cities: Google’s Toronto city built ‘from the internet up'”

On Toronto’s Eastern waterfront, a new digital city is being built by Sidewalk Labs – a firm owned by Google’s parent Alphabet.
Sidewalk Labs promises to transform the disused waterfront area into a bustling mini metropolis, one built “From the internet up”, although there is no timetable for when the city will actually be built.
“Writing on news website The Conversation, Mariana Valverde, urban law researcher at the University of Toronto, said:”The Google folks have not approached the city in the usual, highly-regulated manner, but have been negotiating, in secret, with the arms-length Waterfront Toronto.
For its part, Sidewalk insists that this year will be all about consultation – with city leaders, local policymakers and the wider community, to ensure what is achieved in Toronto is something that “Meaningfully improves lives”.
As part of the planning process of bidding to develop the waterside location, the firm looked at 150 examples of smart cities, including those built from the ground up such as Masdar, in Abu Dhabi and Songdo in South Korea.
“One of the mistakes that previous cities have made is the idea that you can plan something from the top. That is not how cities work – they evolve organically.”
Mr Doctoroff is a big fan of Jane Jacobs, an urbanist who fled New York to live in Toronto and spent her life encouraging cities to improve their shared spaces.
Whether the Google firm’s city experiment will fulfil this promise is one many will be watching with interest.

The orginal article.

Summary of “The financial scandal no one is talking about”

Nestled among the hedge-fund managers on Grosvenor Street in Mayfair, Number Twenty had recently been opened by accountancy firm KPMG. It was, said the firm’s then UK chairman Simon Collins in the fluent corporate-speak favoured by today’s top accountants, “a West End space” for clients “To meet, mingle and touch down”.
The following year the number edged up – as it did for the other three big four firms despite the stiff competition – to $36bn.
Where a degree of independent oversight does exist, such as from the regulator established in the US following the Enron scandal and the other major scandal of the time, WorldCom – in which the now-defunct firm Arthur Andersen was accused of conspiring with the companies to game accountancy rules and presenting inflated profits to the market – powers are circumscribed.
In what one former big-four partner described to the FT as a “Faustian relationship” between government and the profession, the firms escape official scrutiny even at low points such as the aftermath of the financial crisis.
Covering every area of business and public service, the big four firms have become the reporter’s friends.
With serious financial incentives to get to the top, the major firms end up run by the more materially rather than ethically motivated bean counters.
In the UK in 2017, none of the senior partners of the big firms had built their careers in what should be the firms’ core business of auditing.
“Whether serving as a steward of the proper functioning of global financial markets in the role of auditor, or solving client or societal challenges, we ask our professionals to think big about the impact they make through their work at Deloitte,” say the firm’s leaders in their “Global Impact Report”.

The orginal article.

Summary of “There Is Another”

Every time you use Spotify, grouping songs into playlists, and your music pops into your friends’ feeds, giving them ideas, Spotify gets better, making it a Benjamin Button firm.
Unlike Apple Music, being a pure-play gives Spotify more cred among purists, young people, and influencers.
Spotify accounted for 36% of premium music subscribers globally.
Anyway, despite a substandard offering, Apple Music is growing faster in the US than Spotify, as the Apple Music icon is on the home screen dock of 1B iOS devices.
Apple charges Spotify a 30% tax to be in the App Store and denied an update to the iOS Spotify app, essentially blocking iPhone users’ access to the latest version of the Swedish service.
Netflix needs to become Spotify before Spotify becomes Netflix.
Nobody has cracked social and TV, and as half of young people no longer watch cable TV, if Spotify were to launch video and captured any reasonable share and engagement via unique playlists, then cable and Netflix would begin ceding market cap to Spotify.
Spotify now means streaming music – it could mean social entertainment.

The orginal article.

Summary of “Killing Strategy: The Disruption Of Management Consulting”

The strategy industry is worth $250B, and the value of strategy is obvious to every company, from the smallest startup to the biggest Fortune 500.
Ironically, with this new business model, the company found that management consulting firms – often hungry for very specific, niche expertise – were some of its best customers.
Clients judge whether or not the solution will be good based on indirect signals: the consulting firm’s brand and prestige, the specific domain of knowledge required to solve the problem, and the company’s prior experience with that firm and consultants in general.
Over the years, we’ve seen companies move from hiring consultants to building out entire strategy functions inside their company – teams, staffed by ex-consultants and others, who can perform the role of a management consultant internally.
“We know that many companies have hired small armies of former consultants for internal strategy groups and management functions, which contributes to the companies’ increasing sophistication about consulting services Typically these people are, not surprisingly, demanding taskmasters who reduce the scope of work they outsource to consultancies and adopt a more activist role in selecting and managing the resources assigned to their projects.”
If companies are hiring ex-consultants to do strategy, and working less with the big consulting firms, it would certainly spell a recipe for disruption.
Today, the wide availability of tools that help companies collect and analyze huge amounts of data, on-demand domain experts, and previously “Black-boxed” consulting resources and ex-consultants have taken a chunk out of the strategic value proposition of the big management consultancies.
That’s not a problem that necessitates a McKinsey-level of involvement – and the company can probably get just as good results by working with a pricing expert sourced through somewhere like BTG. Smaller generalist consulting firms might have trouble competing with the possible disruption factors outlined above.

The orginal article.