Financial markets have been the focus of many films, such as The Wolf of Wall Street and The Big Short. But with characters often getting rich by using risky techniques, or even illegal methods, they may not seem the most useful way to learn about investing.
What we see on screen can seem far-removed from reality, but that doesn’t mean we can’t learn anything from certain scenes or storylines. Their main aim may be to entertain us, but if you look past the drama and the artistic license there are some useful financial lessons we can learn from film and TV.
With characters making basic investment errors and other characters taking risky strategies, popular films and television shows can highlight some points that anyone looking to invest should consider. Rhiannon Philps, financial writer at NerdWallet, looks at some prominent examples below.
Don’t put all your eggs in one basket
Or, in investment terms, don’t invest all your money in one stock as this increases the risk of losing it all.
In Series 3 of Downton Abbey, Lord Grantham discovered this for himself. He was so convinced that a Canadian railroad company would flourish and return a huge profit, that he invested the lion’s share of the estate’s money into it. However, rather than making him money as Lord Grantham hoped, the company went bankrupt and his investment was lost. This put his whole estate at risk, and all because he staked his fortune on the success of one company.
Even investments that seem reliable and guaranteed to rise in value can underperform, so investing in one company or industry will always carry significant risk. However, if you diversify and invest in a range of asset classes such as bonds, shares and property, and spread your investments between different companies, industries and countries, you can reduce the risk of your overall investment portfolio falling in value.
Even investments that seem reliable and guaranteed to rise in value can underperform, so investing in one company or industry will always carry significant risk.
Even if one of your investments loses value, the performance of your other investments may help to balance out any losses and could minimise the impact of any major financial shocks on your finances. If you are uncertain about your investment choices and options, it may be worth seeking expert help from a financial adviser.
Investing in collectibles isn’t all about the money
Many people collect items like art, cars, coins, stamps, toys and other memorabilia, partly for enjoyment and partly as an investment.
The rarest collectibles can sell for eye-watering amounts at auction, such as the bottle of The Macallan 1926 Scotch whisky which sold for a record £1.5 million in 2019, so it can be tempting to see collectibles as an attractive investment option.
However, collectibles aren’t just about the money, as a scene in sci-fi comedy series Rick and Morty explained.
Jerry has a collection of special, limited edition R2-D2 coins, which he thinks may be valuable. He questions how much they might be worth, but he is reminded that their sentimental value and the enjoyment they bring him is more important than their financial value.
This can be a useful way to think of collectibles. While the rarest and most sought-after items can make a significant profit at auction, the majority will only fetch a modest sum and may not even increase in value at all.
Collectibles are a precarious investment, so trying to estimate what items will grow in value and be a good investment is difficult, even for experts in the respective fields. It’s not as simple as assessing their intrinsic worth, as the value of collectibles is very subjective and can depend on age, condition, rarity, and the demand at that time for that particular item.
While the rarest and most sought-after items can make a significant profit at auction, the majority will only fetch a modest sum and may not even increase in value at all.
People with knowledge of a specific sector, such as coins, would be better placed to assess how much a collectible item is worth, but it would still be risky to rely on making money from your investment as a profit is never guaranteed. Investing in collectibles purely for financial gain could end up in disappointment, which is why many collectors enjoy it as a hobby and not just as a way to make money.
Timing the market can be rewarding but risky
If everything plays out as you predict and you buy and sell at the optimum moment, then timing the market can be a very rewarding investment strategy. However, the unpredictability of the stock market makes this approach difficult and risky, especially for amateur investors who may not have the time or expertise required to get a good return.
The American comedy series Silicon Valley showed a character successfully managing to make money by investing in the right stock at the right time. Peter Gregory invested in Indonesian sesame seed futures after predicting that they would rise in value when cicadas infested the harvests of the other suppliers. This investment was a risk, but it paid off as things turned out as expected.
However, this high-risk approach could easily have gone wrong. While timing the market can seem an exciting way to make money, in reality, it is very difficult to predict the performance of stocks and time your investments successfully. If you buy or sell at the wrong time, you could miss out on growth and lose money compared to people who don’t try to time the market and instead stay invested for the long-term.
Particularly for those who aren’t investment experts, keeping your money in long-term investments and pensions while stocks fluctuate in value can be less risky than trying to beat the market.
Fully research your investment
Whatever you’re looking to invest in, whether it’s a stock or bond, a collectible item, or property, it’s always worth taking time to research your options. Impulsively investing in something without adequate research can backfire, and actually end up costing you money instead of making a profit.
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A prime example of not checking what you’re spending your money on is the 1986 film The Money Pit. Tom Hanks and Shelley Long play a couple that buys an old mansion with a view to renovating it, only to find out after money has changed hands that it is in a much worse state than they realised.
The couple spent increasing amounts on restoring the house without fully knowing how they would pay for it, and they continued even when it may have made more financial sense to cut their losses. As the title of the film indicates, the house became a “money pit” rather than a good investment.
Had the couple waited to get the house properly surveyed and worked out a budget for the necessary repairs and renovations, they could have saved themselves a lot of time and money in the long run.
If you’re buying a property, looking to invest in stocks and shares, or making any other major financial decision, research is key. Although all investments come with some risk, researching the advantages and disadvantages and balancing the potential gains against the possible risks allows you to make a more informed decision as to whether something is the right option for you.
WARNING: NerdWallet cannot tell you if any form of investing is right for you. Depending on your choice of investment, your capital can be at risk and you may get back less than you originally paid in.
The automation of work, including the use of robotics and artificial intelligence (AI), is expected to rapidly increase. In fact, recent research by think tank ‘Centre for Cities’ found that one in five jobs in Britain will fall victim to automation by 2030. These findings are further echoed by auditing firm ‘PricewaterhouseCoopers (PWC)’, who estimate more than 10 million UK workers will be at high risk of being displaced by robots within the next 15 years.
As the prevalence of automation becomes more common in our day-to-day routines (supermarket self-service tills, air travel self-check in etc.), it’s threat towards human jobs only becomes more apparent.
Interested in this phenomenon, Reboot Digital Marketing analysed findings from Mindshare, who surveyed more than 6,000 individuals from across the UK to see whether they would prefer robots or humans in eight different occupations/scenarios.
Reboot Digital Marketing found that when making car comparisons with the intention to eventually purchase, a significant percentage of Brits would want robots (60%) aiding them instead of humans (40%). Thereafter, Brits would be most inclined to accept music/film recommendations from robots at 49% - though 51% would still opt to do so from other people (family, friends etc.).
Fascinatingly, even though most Brits (75%) would still prefer humans to be MP’s, 25% would elect robots to be in this position of power.
Moreover, despite the negative perceptions associated with bankers as a direct result from the fallout of the 2008 financial crisis, Brits would still select humans (71%) over robots (29%) to be in their respective role.
On the other end of the scale, 11% of Brits would be least willing to take medical advice from robots. Similarly, only 14% of Brits would not feel apprehensive about receiving legal advice from robots. Information for immediate release RebootOnline.com
Shai Aharony, Managing Director of Reboot Digital Marketing commented: “Automation is undoubtedly on the rise. As the technologies which underpin its development become more sophisticated and efficient, certain industries will certainly face the real prospect of robotics and artificial intelligence disrupting their traditional flow of human labour. Whilst the assumption tends to be that it will either be people or robots, I believe they will complement each other in different tasks and facilitate new types of jobs. What this research certainly demonstrates is that Brits currently favour humans as opposed to robots in a handful of occupations/situations. Although, as automation becomes more prominent and Brits understanding of it drastically improves, this may potentially change.”
(Source: Reboot Digital Marketing)
Finance Monthly speaks with former tech entrepreneur Gary Moon, who turned tech investment banker 16 years ago. He is currently the Managing Partner of the boutique investment bank Nfluence Partners, which focuses on M&A and capital formation advisory across various technology, media & telecom sectors, as well as having a new growth capital fund for mission-aligned businesses.
What challenges arise in advising clients on their M&A strategy given the fluctuating nature of the sector?
If you are not active in the market across a significant number of assignments, it can be difficult to understand the nuances of what drives buyer behavior in various technology sectors where valuations can range from < 1x revenues to > 16x revenues. You need strong historical understanding and pattern recognition on how technology adoption cycles impact M&A. With the lack of an IPO market, consolidation of middle market companies by the tech elites and significant increases in private equity activity in the tech sector, the dynamics of what attracts various buyers and the valuations that they will pay shift regularly as well.
What have been the trends in the corporate M&A sector in the US in the past twelve months?
Over the past year, we’ve noticed that strategic acquirers are more selective and require a higher degree of strategic value to transact. The long-term trend of pursuing companies of more meaningful scale has continued, while a mix of deal consideration to ensure management continue for several years post-acquisition is also increasing.
What issues can bring a deal to a standstill? How would you overcome these?
The biggest and most common issue is missing revenue forecasts. While one can be optimistic, it is more important to have a realistic set of projections that can be delivered within a few percentage points of accuracy. The other common mistake for companies that are not well advised is not getting in front of bad news. Diligence teams are thorough and you can count on them to find any outstanding issues. Better to deal with them up front than to have a surprise as you are trying to close a transaction. Otherwise, not only will you have to deal with the issue, but you’ll also have to deal with the breakdown of trust given the lack of disclosure.
What advice would you give to a company considering a potential merger or an acquisition?
Make sure that the most likely companies to acquire you know who you are in advance through partnership or other market-based activity. The majority of transactions happen between companies that know each other in advance. It also provides you potential competitors in the sale process, as you do not want to be in a position where you are only negotiating with a single party for your acquisition.
What are the companies that Nfluence works with?
We work with expansion and growth stage companies across a number of sectors within TMT including both venture ecosystem and entrepreneurially financed. We are also excited about working with growth stage companies in the purpose economy - mission-aligned and/or impact-driven. These companies tend to have unique requirements from capital formation to acquisition and liquidity and we are spending a lot of time working in and developing this ecosystem.
About Gary Moon & Nfluence:
Spun out in 2018, Nfluence was originally founded in 2011 as the Technology, Media & Telecom (TMT) group at Headwaters MB. Gary Moon and his partners built Headwaters into a top 10 technology-focused boutique investment bank ranked by closed transactions in 2017. Over the past 12 years, Gary and the senior team at Nfluence have managed the completion of nearly 200 transactions, repeatedly demonstrating tenacity, creativity and effectiveness on behalf of their clients. Gary has been a strategic and financial adviser to numerous technology and growth firms and has extensive experience with both institutionally financed and founder financed ventures. Gary has advised on client exits to such prominent companies as AT&T, Cisco, Equifax, Microsoft, Nuance, Tyco International and WeWork, and has helped firms raise growth capital and complete private equity recapitalizations from name brand institutional investors.
Prior to joining Headwaters, Gary was the Managing Director of Europe for Ridgecrest Capital Partners, a boutique investment bank focused on technology mergers & acquisitions. In this capacity, Gary led the efforts of the firm in growing the European practice which ultimately comprised a significant percentage firm’s revenues. Prior to joining Ridgecrest, Gary led the Mobile, Wireless and Communications Technology practices for Viant Capital, a boutique investment bank in San Francisco. Prior to embarking on his advisory career, Gary was the founder and CEO of Luna Communications, a North American focused wireless systems integration firm. Luna Communications was sold to a publicly traded competitor, where Gary became the CTO and Managing Director of Client Services.
Wesbite: http://nfluencepartners.com/
Spread across social media sites and uttered consistently by the leader of the United States, Donald Trump, on several occasions, the term ‘fake news’ has seriously caught on. It has affected the way media platforms operate, the way the public perceives information and even how governments confront the spread of extremism. Below, Finance Monthly hears from Lyric Jain, CEO and founder of Logically, on the widespread economic impact of fake news.
Named word of the year in 2017, fake news has dominated both media and politics, shaping campaigns and influencing votes. However, while the conversation has been focusing on the implications it has on politics, many have failed to take into account the impact fake news has had on the wider economy. Not only do these misleading and misinformed pieces affect business and consumer confidence in products and companies, they can also lead to uncertainty and fallout from ill-informed political decisions.
Event driven trading algorithms act on information extracted from newswires and social media. The presence of fake news in these pipelines means the algorithms act on bad information. The larger operators in this market are aware of this vulnerability and have addressed them by making changes to their algorithms. Adversarial algorithms have sought to take advantage of these systems by publishing falsified information on social media and across the internet.
Fake news is not a new phenomenon, with evidence of it impacting the stock market dating back to the 1800s. In 1803, Britain was looking to declare war on France, but the Lord Mayor of London received a letter supposedly written by Lord Hawksbury claiming that the dispute had been settled amicable. This letter was taken to the stock exchange and subsequently led to the stocks rising by 5%. However, the validity of the letter remained under suspicion and was later found to be a forgery, forcing the Treasury to issue a statement to the press. By the time the hoax was noticed, stocks had changed hands, and it became impossible to track who had gained from the fraudulent letter.
Fast forward a few hundred years and you are looking at very similar events taking place surrounding the value of bitcoin. January 2018 witnessed the crash of bitcoin, the world’s most popular cryptocurrency, with the value falling by 50% in a single month. While the media is only one element in the rise and fall of market values, the development of cryptocurrencies has led to an explosion of online content criticising the most popular currencies. In the unregulated world of cryptocurrencies, many fraudsters have seen their opportunity to deliberately spread false information to affect the price of their holdings using social media, fake news sites and private chat apps, such as Slack and Telegram.
A prime example of this is the pump and dump scheme organised by a chat room called ‘Big Pump Signal’, who conspired to promote GVT through a bogus John McAfee twitter account. After sending out a tweet from the account declaring that GVT was the coin of the day, the value of coin increased by $15 in four minutes, with trading volume doubling. The chat group were able to monitor and communicate when the best times were to buy and sell the coin, before the value returned to it’s original cost 19 minutes later. The ability of these groups to communicate on private chats leave the uneducated and overeager traders at risk of falling into their trap.
We have also witnessed a rise of traditional fake news pushes targeting the financial market, creating mainstream media websites that promote false information. Most recently this approach saw a website that appeared as CNN run the story ‘Richard Branson and Elon Musk Invested $17million in a Bitcoin Tech Startup’. This simple approach led to more than 425,000 website visits between September and December.
While these examples of using fake news to exploit the market are not currently widely used, advances in NLG and further development of these schemes may lead to an information arms race between competing firms, with media consumers and targeted instruments being the likely collateral damage.
There are a few single metric tools available that attempt to rate the credibility of stories and track the implications of the story. However, we are working with partners in the financial services to build tools to specifically tackle the impact the rise of fake news has on their business. As with any fake news epidemic, it is important that people trace the origin of their articles they read before making any large investment and utilise these platforms to determine whether or not to trust the information.
Overwhelmed by demanding new regulations, leading financial institutions are relying on video to manage the flow of critical information to employees. Below Paul Herdman, Vice President of Qumu EMEA, explains how finance teams and compliance officers can make the most of enterprise videos.
With worldwide financial institutions finally beginning to recover from Brexit, and derivatives markets still adjusting to the rollout of MiFID I, the next communication crisis for this turbulent industry is already looming. As political and regulatory regimes continue to extend their influence, firms doing business across the EU must now preparing for implementation of the revised Markets in Financial Instruments Directive (MiFID II)—which reaches beyond banking to impact trading as well—while US-based financial institutions are busy figuring out how to comply with GDPR (the EU’s General Data Protection Regulation).
With both regulations including organisations and their global subsidiaries, greater market transparency in the financial industry is becoming a worldwide mandate. These new directives will have a huge impact on regulated firms in 2018 and beyond and will require financial institutions to upgrade their processes, their compliance operations and most importantly their communication technologies.
A 2017 Thomson Reuters survey revealed the average annual cost of compliance for global financial organisations is $119M per organisation. Additionally, 73% of communication professionals reported that communicating company news to employees is a serious challenge and 37% reported internal silos as the number one challenge for internal communications.
As these companies respond to increasing demands of regulators to meet new directives, many are proactively focusing on developing robust communication programmes. And the centrepiece of these new programmes is, in many cases, an enterprise video platform. Live or on demand, IT executives know that video communication can be fully automated, easily searchable and consumed on any device—making it the perfect communication solution in highly regulated environments. In fact, if managed well, video communication can translate into shorter time-to-compliance, and save financial services firms hundreds, or even thousands, of dollars per year per employee.
But how?
Enterprise video to the rescue
There are many ways using an enterprise video platform can help financial institutions meet compliance directives:
Timely communication: when workforces are dispersed, video messages can be easily created and instantly distributed to employees as regulations change.
Opportunities for feedback: key stakeholders can submit feedback and questions to the executive team, which can be captured and tracked for future resolution, or to identify gaps in the current process.
Timely collaboration: financial institutions can create private communication channels where key team members can share knowledge, insights and outcomes related to their discipline or functional responsibility.
Strategy alignment: video is a great way to present a consistent story across the organisation—before the message is taken externally and any room for misalignment is eliminated.
Increased readiness: video polls can be used to gauge readiness on a specific topic or portion of a new regulation, reinforcing mission-critical compliance procedures.
Documented audit trail: with marketing teams playing a key role in the new directives, automated workflows for approvals and audit trails are key for financial promotions and marketing collateral compliance.
Configurable security: executives can share knowledge quickly across the organisation, privately to specific groups of key stakeholders or to larger audiences with no content restrictions.
Reporting and analytics: a video content management system can provide advanced analytics on content review, meeting attendance and overall engagement with the company message.
In conclusion – broaden your reach
Technology investments in enterprise video are key to mitigating regulatory risk. Not only do they provide a platform to communicate how regulatory changes will impact activity, but they allow financial institutions to quickly adapt to evolving rollouts, and ensure that all financial activities, including trades, remain in compliance. With the right enterprise video platform in place, many global financial institutions have been prepared well in advance for MiFID II and GDPR to happen. Is your company ready?
If you are interested in any small scale company video production in the UK, businesses can reach out to Tell Your Story UK here.
There’s nothing so gratifying about the way democracies are run as when national politics influences public policy because of an outburst of public anger. Here Julian Dixon, CEO of Fortytwo Data, expresses his thoughts on the challenges of confronting issues of clarity in the reporting of events such as the Paradise Papers leak.
So it is a little unnerving to find such a muted response to the Paradise Papers data dump.
When the scandal’s predecessor - the story of the Panama Papers - broke with disgusted headlines around the globe, people actually took to the streets.
There has been no such outpouring of rage this time around. And that’s because people just don’t get it. But, it’s got less to do with the current revelations and more to do with what happened after Panama.
People take their cue from other public mishaps. They remember similar headlines during the MPs’ expenses scandal. And then they remember the (ex) MPs going to jail.
It was a public hanging of Westminster’s dirty washing, the likes of which we had never seen. Then, in the wake of the Panama Papers, the public also expected justice and change.
They didn’t get it, although the similarities are obvious. The amount of information disclosed in the cases of the Panama and Paradise Papers was similarly grand. It touched on many public figures. And in the reporting, the significance of the leaks was billed as equally earth-shattering.
So where are the prosecutions?
Yes, some politicians lost their jobs within days of the Panama Papers story breaking but that was politics. They weren’t departures that resulted from the considered response of prosecutors.
“The difference between illegal tax evasion and legal tax avoidance is as clear as mud”
Having been promised blood and justice for all, it all appeared to fizzle out.
This is how tax avoidance is a story without an ending. People are destined to relive the public-spirited angst that makes each data dump newsworthy, without the satisfaction of seeing real change. And there is one reason for this - bad laws.
To the average person on the street, the difference between illegal tax evasion and legal tax avoidance is as clear as mud. The public feel unable to ask for change because they cannot clearly see what is broken. And this confusion bleeds into the authorities’ response.
Google media reports of ‘Britons being charged with criminal offences in light of the Panama Papers’ and you find nothing.
Misleadingly, many of the reports carrying headlines cite appalling tax avoidance.
Even relatively sophisticated journalists don’t know where ‘avoidance’ ends and ‘evasion’ begins.
If people are to have faith in the system, then they need to see the authorities acting on tip offs and bringing prosecutions that live up to the hype.
My suspicion is that much mean-spirited behaviour is not criminal - but it should be. However, as the law stands now, the difference needs to be explained clearly to those not wealthy enough to need offshore accounts.
It is no small irony that just like fast cars and expensive watches, if you need to ask how much tax avoidance costs, you can’t afford it. It shouldn’t be this way.
While this confusion reigns, the country is doomed to a vicious cycle that results only in growing public disquiet. People know they should be angry about something, they just can’t quite put their finger on it.
Hysterical reporting of offshore banking becomes a distraction. Politicians relax when it turns out what people are doing is legal. Instead, they should be asking the question ‘shouldn’t it be illegal?’
Accusing people of wrongdoing just because they bank offshore is unhelpful. There are many legitimate reasons why people do it and it’s not all about avoiding tax.
But there are just too many ways offshore tax rules can be legally exploited by people who just want to avoid paying their fair share.
You must be wondering by now why a guy like me who helps banks and others hunt down money launderers is that bothered about the tax affairs of a financial elite.
In our business, you can have the smartest computer in the world capable of identifying money laundering in vastly complex webs of transactions. But if you have millions of dollars being moved by thousands of transactions into dozens of offshore locations, that hide behind complex legal frameworks, it’s worthless.
As these transactions happen offshore - and, we as a species, are naturally hostile to the opaque nature of overseas financial centres and tax havens - it would be better if they were reduced and made more transparent.
If most forms of tax avoidance (not evasion) are wrong - as everyone seems to agree they are - I see the criminalisation of much tax avoidance as our best hope of being able to properly enforce the law in sheltered jurisdictions.
Clarity and a proper public, political debate that doesn’t just act as a smokescreen seems to be all that stands in our way.
Ethos Group is one of the largest independent, privately owned and fastest growing Unified Communications businesses in the UK. Headquartered in the City of London, the specialist provider of managed print, telecommunications and IT operates in 26 countries, partnering with the leading document and telecommunications solutions providers.
Paul Norris, the owner and Chairman of the Ethos Group of Companies, spoke to Katina Hristova about the Group’s recent achievements and the adventure that running Ethos has been thus far.
What has been happening with Ethos since we last spoke in October 2016? Are there any exciting projects or achievements that you’d like to share with us?
We'd just acquired LGS when we last spoke. Since then, we've successfully integrated that business and its services into Ethos and have substantially increased our digital content management and ITS capabilities, enhancing our knowledge and share of business within advertising, creative arts and media. LGS are the best business in that space bar none - we came second to them enough times to know that. We successfully combined LGS' skills in the creative and studio space with our own EMEA MPS capabilities - traditionally our core market - which was the main reason for the acquisition and a direct consequence of this was winning a global advertising brands' MPS business and bringing another several hundred devices under management within months of the acquisition. Our combined approach actually informed and changed the clients' terms of reference and neither Ethos, nor LGS, would have won this piece of business in its own right before the acquisition. So LGS has been a real success.
In June this year, we acquired RDT Office Solutions Group Limited (“RDT”), another successful and well-established MPS business with a substantial client base, predominantly in London and Europe, which further expanded our UK and EMEA Managed Print business and brought additional services and skills into portfolio.
This was Ethos’ third major managed print acquisition within 12 months, taking our annualised print business revenues and EBITDA to around £38m and £8m respectively. This year's annualised EBITDA should be c. £10m and we will take our annual contracted annuity and EBITDA to c. £25m and £14m by the end of next year.
We made a number of structural changes to the Board and Senior Management Team, appointing a new Group CFO, and ensuring we were completely fit for purpose as a larger organisation. We're a dynamic business but it has run traditionally along clear functional lines. My own role has changed from Group Managing Director to Group Chairman, predominantly so that I can focus on strategic development and growth and Barry Matthews, who has been with me since the beginning, has moved very successfully into the role of Ethos' Managing Director.
We've been very busy and the structural changes and improvements in particular have been a real success. It's an incredibly strong SMT.
Ethos was established in 1992 and is now one of the largest independent communication solutions companies in the UK – can you tell us a bit about the company’s journey? What are some of the key challenges that you’ve been faced with? What is the motivation that has kept you going?
Ethos’ core business was originally providing Managed Print Services, but over 25 years, it has evolved and expanded considerably and we now provide our clients with a full range of managed services across their entire communications infrastructure, including: Print Solution Services & Support; Production Print; Creative Arts; Telecommunications, ITS and UC solutions; Content Management; Audio, Video & Collaboration and Security & Compliance.
The challenge has been the fun part, the technological advancements have been enormous and have been driven by - and have in turn driven - clients' requirements and expectations, keeping ahead of those, so that we can always provide our clients with the best independent contemporary advice, has meant that we've had to continually recruit and retain the best people, skills and talent - everybody says this of course, but it's a very strong team at Ethos.
Quite simply we've always challenged ourselves to constantly change and develop in order to retain our status as a market leader. Being independent and brand agnostic has helped us to genuinely fulfil clients bespoke requirements, that's one of the reasons why our client retention rate is so high; our clients trust us to give them 'best' unbiased advice and, as we've grown and diversified and added products and services to the portfolio, they've trusted us to provide additional services to them.
Doing things as well as one can and being recognised for that and working with an incredible team of talented people who take pride in doing everything to the best of their abilities is the ongoing motivation. I always tried to recruit people who were better and brighter than me. Looking around, I think I managed that!
What does a typical day look like for you as Ethos’ Group Chairman? What daily challenges do you encounter and how do you overcome them?
If there was a typical day, I'd give up. I get to think a lot more now; I'm not saying that's necessarily a good thing, but the Board runs the business day-to-day - and does so very well - so I get to concentrate on bigger and potentially more rewarding stuff; enhancements in portfolio, scoping additional services, collaboration and evaluating potential opportunities - some of these come off and get adopted, some don't. I'm also progressively spending less time in the document business and more time in the telecoms business, so that's a 'newer' challenge which I'm enjoying. But the challenges are the same for any businessman; growing the business in every way and making money in a competitive and changing environment, whilst delivering quality and value to your clients and retaining your own quality people - and your principles. As a technology business, it's amplified because technology has changed more rapidly in the last five years than it has in the last fifty - and that will be the case in the next five - so we need to continually innovate and ensure we are absolutely on the pulse. I'm very fortunate to have some incredible technical people on board to do that.
There aren't really daily challenges now, but when there is a challenge I think: 'who can I delegate that to?' Seriously, there should be someone capable of dealing with the vast majority of things that come up.
What's your best and worst business decision and why?
My worst and best business decision was setting up the telecoms business.
I knew absolutely nothing about it - had I known anything remotely close to what I know now, I'd have never done it. Consequently, I kissed a lot of expensive frogs and wasted a lot of time and money, but, because I'm pretty strong-willed, I carried on and eventually met a great guy - Matt Hill, who is now the Managing Director of that business. With his industry and specialist knowledge, ability and contacts, and our business skills and resources, the company has become a great success, it's won lots of large scale and very valuable business, more than its fair share of awards, it operates in as many countries as the document business and employs some incredibly bright people. The business is starting to do very well indeed and I've no hesitation in saying that within four years, it will be the same size as the document business. It will yet prove to be the most profitable thing I've ever done.
How do you ensure you are directing the Group in the right direction?
You can't ensure it, you just do your best and, to be honest, you make a lot of it up as you go along. I read a lot of what other people say they do, but frankly, anyone who’s telling the truth and runs a business at any level for long enough will tell you that a great deal of it is intuitive - and it should be, that's the bit you're there for. I do take it seriously, I consider the consequences of what I do, I consult the Board and SMT whenever it's appropriate and I always ask 'is it the best we can do?', 'can we do it better?', 'can we do it better than anyone else?', 'can you think of a way to do it better?'. It's my job to say 'we're going over that hill' but it's a team of people who make it happen. The skill (hope) is that there's something worth going over the hill for.
What was the best advice anyone ever gave you, and did you follow it?
Winston Churchill's: "Never, never, never give up" can't be beaten. I also remember my first boss telling me: 'Always leave something for the other guy'. If you squeeze everything from the other person, he/she is hardly likely to have your interests at heart. It was good advice.
Where does Ethos stand internationally and what are the company’s goals moving forward?
Whilst the majority of Ethos’ combined customers are headquartered in the UK, we now operate, at scale and in both the document and telecoms business, in 26 countries. This is EMEA-centric admittedly, but our coverage is expanding rapidly. We manage all of our overseas clients ourselves, so there's a direct relationship with them, if it goes wrong, we fix it.
Being a communications business means we have no excuse for being unable to seamlessly provide services cross-border, so we provide the same SLA to a client in Frankfurt say, as we do in EC2.
The engagement is different for the document business, compared to the telecoms business - far more can be done remotely with the latter - and, of course, much of the portfolio is specifically geared to remote communications, work process and improvements anyway.
Culture aside, I see no difference whatsoever in relation to a client’s physical location, our job is to provide a managed service to an agreed performance level regardless of the end point.
What motivates you most about working within the Unified Communications industry?
Change, diversity and connectivity. I'd hate to be in a static environment and the UC industry is anything but static. I'm not a technical person, so I view it all as a user - Does it work? ; What’s the benefit and improvement? ; Together with 'Can we make money from selling it?’ These are the same questions I ask when we review new products or services.
The landscape is so diverse, there's so much there that corralling it into a manageable, deliverable and interconnected suite of products and services, which are capable of - and make cohesive sense in - deploying under a single managed agreement, is an exciting challenge and you do very often see businesses get it wrong. We want to enlighten and enable our clients, not baffle them.
It also always feels 'young', like there's something new and exciting just about to happen. Whilst no business is recession proof and there have been tough challenges for over the last several years, the industry is very resilient - being largely annuity-based clearly helps - but it's innovative and precipitates change in perceptions and needs, which drive desires and behaviours – something that you really need when you're trying to sell things.
If I hadn't fallen into it by chance, I'd claim it was an inspired choice.
Given the speed and complexity at which the communication needs of your clients are changing, is there anything that's particularly on your agenda at the moment?
A lot. Compliance and security are increasingly becoming a first point of engagement with clients within both the document and telecoms business. We're headquartered in the City of London, so we're well used to working with clients in relation to their regulatory considerations. We also advise clients in relation to document security and telecoms aspects of MiFID II and GDPR process requirements, we work with clients in relation to high-speed low-cost encrypted data and content storage requirements in innovative ways. Distributed working practices and international trade continue to drive technology requirements and, as businesses are no longer constrained by geographical or physical barriers, we have to reflect that in our services, capabilities and knowledge base. An example of this is our Multi-net offering, enabling clients to access all UK networks from a single SIM/ phone.
We were one of the first businesses to go to market with a hosted telephony offering and we're now layering that with additional hosted applications and services. Where it's an applicable and appropriate solution, cloud based technologies, in particular contact centre, work force optimisation tools, compliant call recording, audio/ video and collaboration tools, as well as cloud based data storage, are continuing to build momentum. The move towards digitalisation continues and drives requirements around process efficiency, compliance and security. Our clients’ key challenges in the next 12-18 months will include the planned introduction of GDPR. You can't open your eyes without seeing that or being offered advice on it, but at Ethos we understand that technology alone can’t meet all of the proposed requirements and we’re working with clients to address their processes, procedures and the technology required to meet the challenge. We also provide government grade encrypted storage and software solutions that enable our clients to respond to and manage potentially non-compliant activity efficiently and effectively. Data growth, security and collaboration are key drivers in many businesses and this continues to influence our direction and focus. We've added complimentary technology to address these challenges. Our focus on our clients’ data, documents and content being in securing it, securing access to it, managing it and distributing it. It can appear a crowded space so we adopt and develop innovative technologies that solve multiple challenges. We don’t want to offer the same things as our competitors - we want to offer something better, different, while remaining agile in our approach and backing that up with the highest quality service and support.
How do you see the future for your competitors?
Mixed. Unfortunately, some will cease to be relevant and some will do very well. I gambled several years ago, when I set up the telecoms business, that the future of communications businesses would be the provision of all communications resources; documents, voice and data, by one service provider, eventually on a single managed service agreement, that sounds great, except if you make that your pitch then every part of it needs to be excellent. You can't excel at one part and then try and engage with the client with another that's substandard, far from making the relationship more valuable and stickier - you'll ruin it and lose the lot. But being able to consult, independently advise, and deliver different technologies at the highest level, with one single point of contact and, ideally, on a single managed agreement is our objective. We're not there yet, but we're materially there with some clients, some of whom are very large Pan-European businesses, so it's possible and I genuinely think - caveated heavily as to ability - it's what clients will want.
Looking to 2018 and beyond, what is your vision for the future of Ethos? What do you hope to accomplish?
By the end of next year, Ethos' document business will be the most profitable independent business in the UK industry, easily the most proportionately profitable, so that's a 'mark' I suppose. It must, at very least, mean that we run the business well. But that's almost by default as we're growing well organically and by acquisition. What I'd like is to continue to intelligently expand our portfolio and to offer more to our existing and new clients.
However, we're very careful about what we bring into our portfolio - it has to be the best of its type and it has to add real value to us and to our clients. The problem with technology businesses is that everyone is passionate about their own offering, especially when there's an element of IP involved. Unfortunately, you can be as passionate as you want about something but, if it's rubbish, then no one is going to buy it or, if they do, they won't thank you for it and they won't deal with you again. This is why we're guarded about what gets in.
Additionally, I'd also like to further expand our client base outside the UK. That's something we're working on now and there will be further collaborations with like-minded businesses, where we can integrate services and technologies. Our ITS capability is growing at a terrific rate, which is bringing enormous new opportunities. We also have a couple of acquisitions on the horizon.
I've a particular interest in telecoms now - there's an incredible opportunity for growth and value, especially by acquisition. In fact, the opportunities for acquisition are enhanced because of the more diverse nature of that industry, and that really excites me, as does the technology that's coming along. Enhancing everything that we do and reducing cost, you'd have to be very bad indeed not to be able to capitalise on that.
Website: http://www.ethos.co.uk/
Deloitte predicts that over 300 million smartphones, or more than one-fifth of units sold in 2017, will have machine learning capabilities within the device in the next 12 months. The 16th edition of the "Technology, Media & Telecommunications (TMT) Predictions" showcases how mobile devices will be able to perform machine learning tasks even without connectivity, which will significantly alter how humans interact with technology across every industry, market and society.
However, over time machine learning on-the-go will not just be limited to smartphones. These capabilities are likely to be found in tens of millions (or more) of drones, tablets, cars, virtual or augmented reality devices, medical tools, Internet of Things (IoT) devices and unforeseen new technologies.
"Machine learning is fascinating as it will revolutionize how we conduct simple tasks like translating content, but it also has major security and health consequences that can improve societies around the world," said Paul Sallomi, vice chairman and global TMT industry leader, Deloitte LLP and US technology sector leader. "For example, mobile machine learning is a strong entry point to improve responses to disaster relief, help save lives with autonomous vehicles, and even turn the tide against the growing wave of cyberattacks."
"Our predictions for 2017 showcase the enormous influence that machine learning and the Internet of Things are having on the current technology marketplace," said Sandy Shirai, principal, Deloitte Consulting LLP and US technology, media and telecommunications leader. "With many technologies coming into their own as their power and speed increases and the cost of delivering them goes down, we'll continue to see these platforms grow exponentially and expand their role across industries, creating a whole new value proposition and opportunities."
Another innovation with the power to transform the world is autonomous braking. Deloitte predicts that in 2022, in the US alone, fatalities from motor vehicle accidents will have fallen by 6,000, a 16% decline in 2017. The greatest factor in this decline will likely be automatic emergency braking (AEB) technologies. Deloitte expects that AEB will be so widely adopted, affordable, and successful at helping to save lives that it may even slow down the movement toward full self-driving cars.
It's not just about developing new technology, but how this technology is procured that is set to transform how we live and work. Deloitte predicts that by the end of 2018, spending on IT-as-a-Service for data centers, software, and services will reach nearly $550 billion worldwide, up from $361 billion in 2016. Although flexible consumption-based business models will not be ubiquitous by 2018, at over a third of all IT spending (35%), they're expected to exceed half a trillion dollars and grow rapidly. This shift will begin to transform how the IT industry markets, sells and buys technology across businesses worldwide.
(Source: Deloitte)
