Former Netflix Head of Engineering Joins Swae’s Seed Round as Lead Investor 

Former Netflix Head of Engineering Joins Swae’s Seed Round as Lead Investor 

Former Netflix Head of Engineering joins Swae’s Seed Round as Lead Investor

12 Min Read 27 Jan 2021

William and Eugene Eisenman Angel Investors In Swae

Swae Celebrates New Partnership with William and Eugene Eisenman: Experienced Technology Executives & Investors With Winning Track Record of Turning Early-Stage Risk Into Scalable Success

Asano Capital leads the Seed round in Swae

William‌ ‌Eisenman‌‌ is a former Captain in the US ‌Navy‌. He graduated in three years with a Bachelor’s and Master’s degree in Chemistry concurrently. During his first year of college, the Navy was actively recruiting him to join the CBRN division. After joining, he quickly rose through the ranks to become one of the youngest Captains in the Navy at the time. After his time in the military, he transitioned into the technology sector. He has held various executive and leadership roles throughout his career in tech. He is most well-known for his accomplishments at Netflix, where he helped scale the DVD business and was later the creator of the Video Streaming Platform, and at Palm, where he helped create the webOS platform. He is currently is a Co-Founder and GP at Asano Capital.

Eugene Eisenman graduated with a degree in Finance. He briefly worked at Goldman Sachs, and then a small firm doing private secondary transactions and is a Co-Founder and GP at Asano Capital.

William and Eugene, along with their other investment partner, run Asano Capital together. Some of their team’s past successful angel investments include early positions in Netflix, Callaway Golf, MD Pharmaceuticals, and others, reminding us of the Greek myth of Midas, whose touch turned everything to gold (taking all of the positives of that myth into context here).

We’re extremely excited to announce that they have become Swae’s Lead Investors in Swae’s seed round, and we’re ecstatic as to what this partnership will bring to Swae as a whole. Those that invest in Swae become part of our startup family. We develop a strategic and close working relationship with each of our investors so that we can together advance Swae’s platform and offer to develop more powerful ways to bring value to the world.

Already, William and Eugene have spent countless hours conducting due diligence on Swae, reviewing the code base of the platform, UX/UI, and AI systems. They’ve shared important feedback and will continue doing so since William and Eugene will also be joining Swae’s Advisory Board, bringing his years of experience to bear on important strategic decisions.

We believe William and Eugene will be a vital source of intelligence for improving Swae’s platform, offering, user experience, and developing innovations outside of our existing roadmap. Soushiant Zanganehpour, CEO of Swae, sat down with William and Eugene Eisenman to learn more about their decision to invest in Swae, and the interview is below. In the interview, we learn about who the duo are and what potential and hidden value they saw in Swae that compelled them to lead our Seed Round. Their unique outlook and support to help Swae exceed its goals in 2021 is a thrilling start to the new year!

“Swae is like a sophisticated watercooler so a bunch of people can formally come to talk about what’s really going on in the company and then figure out how to fix it.”

william eisenman
William‌ ‌Eisenman‌‌ Lead Investor in Swae

An Interview with William and Eugene Eisenman, Lead Investors at Asano Capital

With Founder & CEO of Swae, Soushiant Zanganehpour @Soushiant

Soushiant

William, your background is extremely diverse and impressive. You went from being a biochemist and ex-Navy Captain, to moving into the corporate and technology world in senior positions. From what I’ve seen, all of the companies you’ve worked for or lead at have introduced major innovations and products to shape not only their sector but the world of technology. Let’s first talk about your role bringing video-streaming to Netflix, I think anyone in tech would want to know more about that!

William

I’ll give some background about my career before Netflix to provide some context moving forward. I was the former Head of Technology Innovation at Read-Rite. I helped take the fifteenth-ranked semiconductor, building it into a top-two company and leaving that role to be a Partner joining Capgemini’s consulting practice. During my time at Capgemini, I worked with various clients across different sectors like aviation, healthcare, pharmaceuticals, semiconductors, financial, technology, etc. My teams and I were advising these companies on potential acquisitions, scoping out new business opportunities, creating new divisions to go after those markets, scaling their entire business operations quickly and efficiently, among other things. As I was boarding a plane to meet a few clients, I received a random call from someone at a startup called Netflix. I let them know that we could schedule a time to meet after I got back from my trip to discuss some of the issues they were facing at the time. After my business trip, we met up for lunch, and I was asked to look over their entire process. There were No NDAs at the time, so it was relatively easy to gain visibility into their operations and contribute feedback quickly. At that time, they had about a thousand users (1000) and were renting out the DVDs at 25 cents each and shipping them to customers. They were losing a lot of money at the time because the cost of sending a DVD was more than the price they charged each customer per DVD rental. My military background and my management consulting experience allowed me to look at their operations and see clearly “this isn’t going to work.” So while we were finishing up lunch, on the back of a paper napkin, I wrote out what I thought it should have been versus what it actually was.

Within a couple of weeks of implementing the changes I had suggested, they reported that they stopped the bleeding and credited me for saving them millions! I was invited back for another lunch, and before I left the lunch meeting, to get into my car and drive away, their VP of Operations, Former CEO Marc Randolph, and now current CEO Reed Hastings chased me down and hired me on the spot!

After I joined, in about 1998/1999, I helped successfully scale their DVD business. One of the first changes I made was switching their business model from renting per DVD and switching the revenue model to a consumer subscription business charging $19.99 per month. By the end of my first year, I was able to completely eliminate their losses and we made a profit because Netflix’s DVD business started to really take off quickly. The consumer subscription shift gave us a better quality of revenue, allowed us to track our net retention, and a more consistent way to track our growth.

During this time, I was successfully scaling the DVD operations but also knew that the DVD business although it was great and getting really great traction wasn’t that scaleable in the long run. So I began thinking about how to innovate our business and was also pushing to explore video streaming (though that isn’t what we called it then) because I also felt that DVDs were going to be a stop-gap between VHS and Streaming. I knew that bringing curated content directly to people’s televisions and computers would be the wave of the future, which would reduce the marginal cost of delivery significantly, allowing them to focus on having the best content. Our long-term vision was to be the place where everyone went to for streaming any kind of content from TV, Movies, Music, and Games because the underlying technology is similar.

The biggest hurdle at the time was technology with Dial Up and storage costs for the streaming business, so it was kind of a hard sell to go from DVDs to becoming a tech company. We obviously made that decision and never looked back. At Netflix, we believed that with the video streaming technology and a consumer subscription business model we had a very viable company that would hit economies of scale with good unit economics. Internally at Netflix, our team just knew it was going to work and be a bigger business than the DVD business that did so well.

Soushiant

Eugene, what’s your background?

Eugene

My story is actually closely intertwined with my father William’s experiences throughout his career. You could say I literally grew up with him through his career in the tech and consulting world. From a very early age, I went with my father to work every day after, I was closely watching, witnessing, and experiencing all of these moments in his career that he mentioned.

As you know kids pick up a lot of things quickly and through osmosis. I was no different, I unconsciously picked up a bunch of things along the way from his experiences that have helped me thus far. When my father was a partner at Cap Gemini, I watched how his teams identified key problems, their approach to solving those problems and presenting their clients’ solutions. When he was a Netflix, I was there sitting in many meetings with the leadership team, and they asked me questions about what I thought, to actively beta testing and giving my feedback on the UX/UI of the video streaming platform. That’s why for example little kids can be given the remote and figure out how to navigate Netflix’s platform without any help. At Palm, I was a beta tester for the WebOS platform to find potential bugs or issues and provide feedback on the phone design. So, I like to think I had a small role I played and got to watch his career successes thus far.

With everything that I mentioned before, you would think I had a degree in something related to tech like Computer Science or Engineering but my background is actually in Finance. When I graduated from school, I started working at Goldman Sachs. I quickly realized I would rather work in the venture capital and private equity space, so I made the shift to doing private secondary market transactions for VCs and founders, getting liquidity for their shares.In that role, I was talking to a lot of investors and founders that actually encouraged me to quit that role and begin investing based on my unique upbringing because of my time with my father. It also helped that I made an early investment before I went to college in bitcoin and it’s obviously done very well for me. That early investment in Bitcoin really started to take off around the time I was doing the Secondary Transactions. My bitcoin investment taking off plus the founders and investors I worked with gave me the encouragement to make the leap to be an investor. Now, I’m currently one of the Co-Founders and GPs at Asano Capital investing in startups. These weird early experiences have shaped me into who I am and definitely help shape me as an investor in startups.

Swae_Harvard_Business_review_How to Be Seen as a Brilliant and Bold Leader [Become a Great Communicator].png
Soushiant

William, looking back at the many changes in your career, is there an arc of interest that guided your decisions or were they spontaneous? For example, what made you jump to a high risk company like Netflix from a safe bet like CapGemini or go to a high risk company like Alom from the safe haven of Palm? Do these decisions provide some insight into your tolerance or understanding of risk?

William

As I shared before, I was a former Captain in the US Navy working in the CBRN (Chemical, Biological, Radiological, Nuclear) Division. My experience in the military and, in particular, the pressure of being entirely responsible for the lives of many other people really tuned my senses to pick out situations where risks were too high or vice versa where risk could be managed. At the time, if I made the wrong decisions, I could kill one of my subordinates or other members of the US military worldwide.

My choices could either cause harm to members of our military, or I could find solutions that would get the job done and keep us all safe. If you were overseeing departments in the military, you would be tasked with dealing with the department budgets. I was fortunate enough to be blessed with the burden of always getting less money than I asked for and told to accomplish the same goal anyway. This time in my life taught me many great skills and lessons that have been a foundation for my military and tech career. I learned leadership, how to carefully assess and manage risk, accomplishing goals with limited resources, and learned that change is the only constant you either change to win or try to cope with the change.

When I transitioned to the technology world, I worked for Read-Rite, a semiconductor company built on chemical engineering. I was Head of Technology Innovations, where I essentially created and built out the Innovation group.

Because of my strong chemistry background, I had the technical foundation and requisite skills to jump in and be useful immediately.

But when we began manufacturing, I realized that I was a natural systems thinker and had a knack for looking at multifaceted systems with multiple moving parts and could see ways to make them better. After realizing I am a systems thinker that was attuned to risk, I could present solutions to optimize processes. When I left Read-Rite, they were one of the top 2 semiconductor companies in the world. Read-rite certainly wasn’t a safe bet when I first joined and was maybe in the top fifteen at the time. After I left, within five to seven years, they were out of business because they thought far enough ahead of everybody and stopped innovating.

When I joined Palm, they were one of three industry-leading telecommunications companies at the time. The other two industry-leading companies were Nokia and Blackberry. Now the industry leaders are Samsung and Apple. Those three companies, Nokia, Blackberry, and Palm, all got beat out by companies that weren’t even making cell phones.

During my time at Palm, I joined to create the next innovative phone. I developed the WebOS platform with the intent to build an all-touchscreen phone similar to Apple’s iPhone. Everyone in that space knows that building an OS system is the most important thing and making a good OS system is really difficult. The phone design is a lot easier, and changes can be done pretty quickly. Unfortunately, Palm wasn’t willing to change. They wanted to stick with the Palm Pilot and PalmOS platform that made them famous. They were content to keep making the same Palm Pilot, making a few changes here and there. All of these companies stopped innovating, Palm specifically went out of business five years later and got bought only for my WebOS platform. The same fate could be in store for Samsung and Apple if they stop innovating.

The only company that still exists today that I worked for is Netflix, and they are now a household name that changed the way society consumes content and entertainment. We went from sending DVDs in the mail directly to customers to successfully curating and creating the best content possible for consumers to watch via streaming. Netflix is the only company that was willing to continually innovate and kill their existing business to that point in order to continue to succeed.

There isn’t any company or investment with a zero risk factor, which is fine with us. There is a risk in everything, but the way I look at it is that you can either be a part of the company, that causes or leads all the disruption or innovation or be a part of the company that is getting disrupted by innovation. When in doubt, we always choose disruption and innovation over the status quo. We like to choose the company causing all the disruption, whether that be in public markets or investing in startups looking to disrupt larger companies across sectors. In the greatest win or take-all economy, change is the only constant; you either change to win or cope with the change when you lose. Every single company has the possibility to go out of business in a short period of time if they stop innovating and stop playing to win. There is no safe bet except to continually bet on change, which is the driving force behind disruption and innovation.

I assess opportunities by stepping backward, looking at the entire picture, and finding out where all the octopus tentacles go, mapping all potential opportunities. That is why we’re investing in Swae. We feel like Swae has the potential to be the platform that allows organizations to consistently push the envelope with changing with times. We believe Swae can be the tool that keeps organizations at the forefront of innovation instead of being that organization that gets left behind. There are a lot of great places and opportunities for Swae to go!

Soushiant

Eugene, both you and your father seem to be able to assess risk very well and make great decisions. As you look back at your father’s decisions and your decisions, what allows you to consistently make these decisions? What allows you to see things that others don’t see?

Eugene

This may sound cliché, but my father and I have always seen, experienced, and done things differently in life than most of the people I know, we always seem to be going against the grain.

We obviously have very different lived experiences. But one thing I’ve noticed is that throughout our lives, each of us has our own unique ability to kind of predict different outcomes that play out whether it be Video Streaming with Netflix or believing in crypto investing in Bitcoin. I think that we really embrace our lived experiences, and trust our instincts.

I think that a lot of people have the same abilities, but don’t necessarily trust themselves 100% in the moment. I noticed that many people feel like they need all the information to make important decisions and that’s simply not the case usually. You can actually make very good decisions with about 30% – 50% of data. The key is to just make the decision that feels right and be willing to completely change and go the other direction. I think that for many people doing something like this is completely doable in different aspects of their life. Just be prepared for those moments, trust your work, and believe in yourself to know what feels right. Just remember you only have to be right once to make it in anything, especially in tech and investing.

Soushiant

William and Eugene, we’re extremely excited for the depth of experience and unique genius you’ll bring to Swae! This is a good segway to talk about your decision-making into investments and your understanding or appreciation of risks. If you have a rubric or a set of criteria, what patterns did you see in Swae that led you to make the investment?

William

Of course, we were impressed with your pitch to the Walton Family and their Scale Challenge, organized by the Centre for Advancing Innovation.

We both believe there is a fundamental shift that has occurred in society and that collective decision-making is going to really take a foothold and become more commonplace either in the corporate world or in the everyday lives of people across the world.

We think that Swae has a chance to really stick with people and organizations right now given all that is happening with a Global Pandemic or all the unrest or changes taking place in society at large. Swae can become the platform that allows groups to make collective decisions together.

Eugene

When we’re considering investments, When we’re considering investments, we’re all about investing in potentially disruptive/innovative companies, and is the Founder/Co-Founders, and their teams are the biggest determining factor. When you deal with a lot of people, you start to see different tendencies and we believe that we’ve gotten pretty good at seeing what makes them successful. In terms of judging criteria, we actually have a very long criterion, but I’ll try to keep it to three or four main topics with key points from our criteria that must be met for us to invest. Swae hit all of our criteria! 

Our criteria is:

1. Founder or Co-Founders with different or unique backgrounds:

a. Diversity:

  • We like to invest in diverse founders and founding teams because we feel like they are the biggest reason for driving alpha in startups. Diverse Founders and teams always seem to outperform everybody else because they work harder, optimize with fewer resources, and are great at adapting because of their lived experiences. It is a huge bonus to us and we look at it as a benefit

b. Previous Experience: 

  • Is this the first company you are starting? Do you have previous experience with a startup or running a business?
  • Are you an expert in that specific field that you are starting a company in? Are you the correct founder(s) to bring this to market or is somebody else better suited to execute the same idea?
  • We like founders that are either older or younger but it depends on what they are doing. Sometimes the experience really matters and sometimes the inexperience is more helpful.
  • Do you have previous experience together or do you have good chemistry? Do you even like working together?
  • Do you have complementary skill sets

c. Personality Traits and Characteristics:

  • People from the groups I mentioned above usually are more successful because they have a giant chip on their shoulders. They tend to have grit, a strong work ethic, are more resourceful, are better at capitalizing on more opportunities, and are motivated by something bigger than just themselves.
  • An extreme sense of ownership. We want you to take pride in what you are doing and be passionate about it. You’re always thinking about your startup consciously or unconsciously. 
  • You pay attention to the little details. Those little details add up and can be a big driver of success.

d. Coachability

  • I think Coachability is very underrated. Founders need to be stubborn but also coachable because there are things that they just don’t know because they haven’t seen it yet. 
  • I think that there needs to be a mutual trust that allows you to help founders make hard decisions about their business.
  1. Product, Market and Market Timing:
  • Is this idea or product even viable? 
  • Do you have product-market fit?
  • Is there a customer who would pay you to use your product?
  • Is there room for this in the marketplace? 
  • Is this the right time for this idea to come to market for customers and consumers?
  • Are you building something too ahead of its time? Can you stay alive until everything catches up?
  1. Networks Effects, Frequent and Repeated usage, Marketplaces and Platforms
  • We like startups that have the ability to build a big moat around their business. 
  • Network effects are a double edge sword, it can either scale your business quickly or can kill it just as fast.
  • If you combine both aspects, you can create something special. On the one hand, you can create monopolistic companies and, on the other hand, create a company to challenge those monopolistic companies at the same time.
    • For example: Amazon vs. Shopify and Instagram vs. Snapchat vs Tik Tok
  1. Cash Management, Bankroll Management, and making Asymmetric bets: 

As a founder, you need to account for every dollar you have in the bank and understand how to allocate it effectively. Founders also need to be great with bankroll management and making asymmetric bets. You can never make a bet that is too big that it depletes your entire bankroll. These bets you take with your company can have high risk, and you need to manage the risk accordingly. If the bet works out in your favor, the company can make significant gains, and if it doesn’t work out, your company would still be alive to reassess and move forward. 

These things have become less of a concern to many founders because of how large startup valuations and funding rounds have become. It’s essential for founders to really understand this because although these valuations and funding rounds have gotten larger, you may not be able to raise any money at all or receive any additional investments. Covid-19 has only highlighted the importance of accounting for all the money you have, bankroll management, and making asymmetrical bets. Just remember that most startups don’t get funding and don’t get bailed like airlines or banks.

Soushiant

Have you seen similar solutions to what Swae offers in the market? Why do you think Swae differs?

William

Not really. Now since companies are all looking at remote work the in-person meetings and “watercooler” talk is missing. Swae is like a sophisticated “watercooler” so a bunch of people can formally come to talk about what’s really going on in the company and then figure out how to fix it.

Swae replaces the need for all of the extra tools across different platforms. It allows you to get a quick take on what’s going on inside of the organization and what to do. Having Swae’s product would really help organizations hear what they’re not hearing because they can get all that interaction in one platform.

Eugene

A lot of Enterprise companies and SMBs will have to realize that remote work is here to stay and that technologies must be put into place for your company to thrive in the future. The Covid-19 pandemic has created the perfect opportunity for Swae. You can’t bring people together anymore, as we used to, since everyone is remote. Society has been gradually shifting towards this for a while, more and more people are becoming digital nomads realizing they don’t need to be tied down to a physical office location to be successful. People have been running successful businesses and making meaningful contributions to their teams with just their computers in the comfort of their homes, at their favorite coffee shop, or on vacation getaways.

I understand why people want to go back into the office and go back to the way things were. In reality, you really just want to work from home and have your kids go back to school. I guarantee that if you go into the office and your kids are in school, you’re going to want to be remote because it’s nice to spend more time with your kids.

The Covid-19 Pandemic has caused everyone to reflect and figure out what they value in their personal lives and cut things out that weren’t necessary. For businesses, Covid-19 has clearly shown what you were good at, as well as highlighted every single flaw and weakness in your business. Many companies were able to capitalize, thriving during the pandemic, and experiencing some of the best growth to date. But, sadly for many companies, they didn’t experience the same success and this has been one of the most trying times. There is no way to revisit the past and undo the ky no you made back then. The ripple effect caused by the Covid-19 pandemic has and continues to persist. The only thing you can do now is to reevaluate your business and address those problems to come out of this pandemic stronger than ever.

Swae is poised for the current “new normal” that won’t go away, as well as what the future holds. It’s how the business will need to be done for companies that want to avoid disruption.

Soushiant

Do you believe that organizations need to maximize the value and unleash the creativity of their teams?

Eugene

Yes. Most companies in traditional sectors are realizing that technology is actually here to stay, it has been disrupting their businesses for a while, and now more than ever, if you don’t change with the times you go out of business. The executives of these companies know that they are behind, all they have to do is look at their peers they came up with and see how many of them are still in business. Many of those companies aren’t here today, and if your company still is, you need to really change to continue to win in business, or else your company will struggle to keep its doors open.

In order to not be disrupted, your business needs to be the company everyone is chasing. If you’re the company everyone is chasing, then you need to do everything in your power to keep your edge on the competition. Either way, if you look at it, everybody needs to fully leverage and maximize every resource they have.

The power of a company or organization — is its people. Your people are the boots on the ground doing the hard work and are the backbone of your organization’s success. We believe Swae can be the platform that allows organizations to leverage their most important competitive advantage which is their human capital. Companies can unlock their true power of staying competitive by implementing Swae to unlock and leverage their own internal network.

Covid 19 is a black swan event that has really forced a much quicker education curve and adoption for those organizations that were resisting this reality or using these kinds of tools to stay competitive.
But every company will need tools to help them collaborate and be successful.
Swae is positioned on the cusp, to ride the wave of the new normal.

What’s next for Swae

We send a big thank you to William and Eugene for sitting down with Soushiant to share openly about who they are and why they’re investing in Swae. All of us here at Swae are extremely excited to start working on our bigger goals to make our platform all the more powerful and of value to our customers.

A big goal for our technology team, is how Swae can integrate with other team collaboration and project management tools in 2021. We’re looking at integrations with Microsoft Teams, Slack, Asana, etc. This is one of the many goals we hope to accomplish this year.

Our mission is to empower unheard voices within organizations to ensure that leaders can identify problems and hear investable solutions quickly, and hear the truth of what’s going on in an organization so they can reduce the amount of bias present in important strategic decisions.

We know Swae can have a major impact on large companies on many levels, and truly transform the way leaders include others in sourcing challenges, finding solutions, and making better decisions faster. We know that some problems within large organizations can’t be discovered unless you have everyone’s input.

And, the truth is, the impact that COVID-19 has had on businesses globally is going to be the “new normal” as we move forward, there’s no going back. So companies need to be positioned to get stronger during this time, not weaker, and Swae is a technology that can’t be ignored.

Swae is helping organizations across the world to solve today’s problems, create tomorrow’s strategy and make decentralized decisions more easily.

From Startups to Enterprises to DAOs, our clients find that their greatest resource is their people, and Swae is proven to help get the best from this untapped potential.

Find your next winning ideas using Swae

More to explore…
Swae accellerates Web3 & DAO push with CDL

Swae accellerates Web3 & DAO push with CDL

Swae accelerates into web3 with CDL One of the most respected accelerator programs in the world of technology entrepreneurship29 Nov 2022 1 min ReadWe are excited to announce that earlier this month, Swae was accepted into the Creative Destruction Lab (CDL) in its...

LifeLabs Partners with Swae to Crowdsource COVID-19 Business and Operation Adaptations While Keeping Employees Feeling Engaged and Valued

LifeLabs Partners with Swae to Crowdsource COVID-19 Business and Operation Adaptations While Keeping Employees Feeling Engaged and Valued

Swae’s AI-empowered technology drives employee engagement and encourages collaboration building inclusive decision-making processes and healthy, high-performing organizations.

 

lifelabs-canada-partners-with-swae

The Business Case for Swae

The Covid-19 crisis has magnified the importance for most business leaders that investing in technologies to keep their employees engaged day-to-day, as well as included in important decision-making processes, isn’t a feel-good measure but critical for driving success.

Employees that feel valued and feel like they’re still a part of decision-making processes will be more engaged, will feel comfortable being “in the know” and will be happier in their roles. When people in an organization believe their voice matters, and believe in the opportunity to influence the agenda, they trust the process and engage more deeply. An engaged employee who has trust invests more discretionary effort and emotional equity than the bare minimum expected.

swae-when-employees-lose-trust

The opposite is also true. When employees feel excluded from decision-making or feel that there is a lack of transparency about core decisions (especially during a moment of existential crisis like COVID-19), they become disengaged. Disengagement prevents people from feeling like they want to be a part of anything so they’ll stop coming forward with potentially great ideas and useful insights. What follows in this vicious cycle is a lack of trust and lower morale which ultimately negatively impacts productivity, culture, and organizational performance.

That’s why LifeLabs decided to do a pilot program with Swae. Our team is excited to help them create an inclusive culture welcoming bottom-up ideas so that they can start to activate the full potential of their workforce!

 

 

ABOUT LIFELABS AND THE PILOT PROGRAM WITH SWAE:

LIFELABS-AND-SWAE-PARTNER

LifeLabs performs over 112 million laboratory tests to help diagnose, treat, monitor, and prevent diseases for millions of Canadians. They are the largest private-public laboratories and COVID-19 testing facilities across Canada. 

In this 60-day pilot program, the LifeLabs leadership team is planning to use Swae to engage employees to gather insights and source idea innovations for adaptations to their operational and business models for their now distributed workforce (due to COVID-19). This pilot program with Swae will also help LifeLabs think about the Future of Work and understand how they can adapt processes at the patient services centers in a post-COVID world (a time or circumstance that most of us struggle to see and predict).

With all of this uncertainty, new values are reshaping the workplace every single day, and by using Swae, LifeLabs can turn the participation of their people into a powerful source of innovation potential for their organization. And this isn’t only about employee engagement, but also about providing high quality, defensible ideation, and innovative solutions for the future of the organization.

“Swae is a tool I have been hoping to see developed for many years. It dispels many of the implicit and explicit biases often seen in brainstorming exercises.”

 — Jamie Lepard, LifeLabs Business Continuity Program Manager

Building a culture where employees feel comfortable to “speak up” (also called a “speak up culture”) can, as our customers have seen, 10x employee engagement!

The goal of this relationship is that by implementing Swae’s AI-empowered technology platform, LifeLabs will get more ideas from their stakeholders, include more voices, and raise the quality, intelligence, and legitimacy of decisions. By removing the barriers to inclusion, the process they will reveal. Doing so will boost engagement and all of these things have a long-lasting impact on morale, culture, and performance.

swae-idea-management-and-idea-workflow-technology

ABOUT OUR PLATFORM: 

 

At the most basic level, we are a high-tech suggestion box that can’t be ignored. Unlike the old school suggestion boxes that collected more dust than ideas, helps organizations create a competitive idea marketplace to source from, evaluate, and improve upon the ideas in a collaborative manner.

swae-superhero-image
How To Solve Organizational Challenges and Manage Ideas

How To Solve Organizational Challenges and Manage Ideas

We’re helping solve the challenges that organizations face today by simplifying how ideas are managed.

Introducing Swae’s most recent product update that addresses the complexity of how organizations manage the many challenges and campaigns necessary to make progress (even if the world continues to get more complicated).

swae-idea-management-and-idea-workflow-technology

Would having an abundance of brilliant ideas organized by challenges or campaigns help stop the feelings of overwhelm around all the things that you have to find solutions for today?

We’re sure you’re curious and maybe a little skeptical. Let us break down this latest feature as to how Swae helps create solutions to challenges, manages ideas, and drives innovation.

84% of executives say that innovation is important to their growth strategy, yet do not have the processes and systems in place to execute.  [Source: McKinsey Global Innovation Survey]

Swae’s AI-based technology platform is designed to create a more inclusive and collaborative environment allowing leaders to get an abundance of highly organized ideas coming their way to make more informed decisions.

Bottom line, we help leaders discern the brilliant ideas from the bad in a more efficient and streamlined manner, which makes innovation happen all the faster.

Since organizations are complex, the decisions that must be made daily are too. In today’s economic environment, we don’t know what will come our way, so leaders across the globe, regardless of the size of an organization, must be prepared to make the best decisions, under every new circumstance, fast. And, more importantly, you’ve got to translate vision into operations through the management of ideas to get there.

Some decisions require broad input, many iterations, and longer lead times to make those decisions, while others require a more targeted audience with shorter lead time and very few iterations. Some challenges need to be solved in a few days or a week (like a rapid response plan to the latest COVID-19 phenomenon). Others can remain open for longer durations, depending on the decision-type, and urgency (for example, an annual strategic planning exercise or an open innovation competition).

Our team realized that Swae needed to allow for much more nuance, complexity, and reconfigurability with the platform in order to match the subtlety, complexity, and urgency of how fast organizations (and even local or state governments) operate and make decisions.

So we redesigned Swae to mirror these needs and used the feedback from our more than 20,000+ users and years of research that we’ve conducted.

Welcome to Swae’s new Challenges feature.

Swae Before

Previously, users could only have one challenge (or idea campaign) running at any given time to extract ideas from the larger group.  A site administrator or manager could configure that challenge or campaign workflow to suit their needs, setting the number of days ideas sat in the collaboration, voting, and management review stages, and including as many idea escalation KPIs and metrics as necessary.

This would help determine under what circumstances ideas would move to the next stage to either  become decision-ready or end up it the archives.

While this helped one department lead an innovation or ideation process with the help of Swae, it limited the extent to which other departments could create their own mini-Swae workflows, campaigns, or spaces to source department-specific ideas from specific stakeholders.

Some decisions require wider input, many iterations, and longer lead times to make the final decisions. Other ideas can require a more targeted audience, with shorter lead time and few iterations.

Both need to exist side-by-side to reflect the complexity of any organization. Under our old design, this wasn’t possible; an organization could have many ideas coming from their employees tagged under various themes, but could not have numerous workflows to exist side-by-side on the platform, until now.

Swae Today

Now, Swae can keep up with the many difficult decisions or campaigns that an organization needs to make across multiple teams day-in and day-out.

To be more effective, leaders can run many campaigns simultaneously in search of brilliant ideas for the various kinds of challenges that an organization faces.

Campaigns can include a large group of stakeholders (internal, external, or both), or an invite-only group with the workflows entirely configurable. 

Helping you make more informed decisions 


Good decision-making is the most important management activity in an organization, driving 95% of performance and 50% of employee engagement.

Under current circumstances, most leaders are making decisions with levels of uncertainty around topics that they’ve never faced previously.

While it is tempting to centralize decision-making to a group of leaders and experts right at the top who operate behind closed doors and coordinate the best possible responses, suspending consultative procedures and processes, or opportunities for inclusion is deeply shortsighted.

Given our technological, social, and cultural evolutions we’re experiencing, gone are the days where leaders make isolated decisions alone in an office, or with a select few who sit “at the top” and continuously push a top-down agenda.

All of the latest research in organizational theory and decision-science illuminates that small, closed, non-diverse teams have more groupthink and make more biased decisions than gender, age, and geographically diverse teams. Unchecked biases limit the quality of choices available, derail good decisions, and cost companies time, money, reputation, and morale.

It’s time that we change how things are done. This is the lesson that comes from 2020 and it isn’t going to change, it’s time to create new and improved systems that are based on the latest science in order to evolve. 

We’re just learning that organizations thrive when decisions are made more inclusively. Creative, innovative, and high-quality arguments can lead to more informed decisions, leading to better choices that impact the bottom-line. Swae can accelerate this as it increases the diversity of input, helping remove bias while improving the bottom line.

Here’s what else we know:

  • Business Insider reported a study that stated, on average, teams make better business decisions than individuals 66% of the time [Source: Business Insider]  
  • A survey with team leaders by Grover Critical Thinking found that:
    • 70% agreed or strongly agreed that “Bad decisions cost my organization time and money
    • 82% agreed or strongly agreed that “Bad decisions harm my organization’s reputation in the marketplace” [Source: Grover Critical Thinking]  
  • On the flip side, a study conducted by Towers Perrin found that the top three workplace attributes and interventions that result in employee engagement are 1) Senior management’s interest in employees’ well-being, 2) Challenging work, and, 3) Decision-making authority. The research concludes that having the opportunity to voice ideas freely, feeding views and opinions upwards, and involvement in decision-making are the most successful drivers of employee engagement. [Source: Towers Perrin Talent Report]

Decision-making in the 21st Century is about building a more collaborative environment because employees need to feel engaged, that they’re of value, and that they’re truly involved.

Swae’s new Challenges feature can now empower your organization to garner brilliant ideas across many teams to help you manage all of the major decisions that you need to make every single day. Swae will help you unlock the brilliance and potential of your people so you can pull through the best of the best ideas and make progress all the faster.

In uncertain economic times, you need to know that you’re making the best decisions possible as fast as possible.

 

To get started, click here to send us an email and we’ll set up your free demo to show you Swae in action. 

 

 

 

 

 

 

 

3 Ways to Improve COVID-19 Relief Programs for the Startup Sector

3 Ways to Improve COVID-19 Relief Programs for the Startup Sector

Part 2 of 2: We Must Protect the Years of Investment Made to Creating a Strong ICT Sector in Canada

swae-tech-startup-ai-platform-better-decision-making

Suggested proposals for Improving CEWS and other relief programs

Based on part one in this series, we reviewed the fundamental issues with COVID-19 crisis relief programs, primarily looking at the Canadian relief programs CEBA and CEWS.

Recently, Soushiant Zanganehpour, CEO of Swae, was invited to provide his perspective alongside other startup Founders/CEOs on this topic to Canada’s Ministry of Innovation Science and Economic Development.

His commentary and recommendations, among the other startup founders present, were focused on the CEBA and CEWS relief programs specifically, and their ability to fit into the startup legal structures and operating circumstances.

3 Potential Solutions to Improve the Relief Programs

The following solutions were the recommended adjustments to the CEWS program to provide the right level of support to those that have been highly affected by the pandemic while supporting economic recovery:

Proposal 1: Redesign the CEWS eligibility criteria to include investment or debt alongside revenue

To help make the CEWS program compatible with how startups within the ICT sector are structured, it has been recommended that the revenue test for eligibility for the CEWS be reframed or expanded to include investments or debt accrued during that time. So, startups that were in the pre-revenue stage and are now in the post-revenue stage, they would be able to demonstrate how they lost financial opportunities resulting from COVID-19, and how they can take advantage of the CEWS specifically to not fall through the cracks.

If the test can reframe revenue to also recognize investment or debt as part of the revenue measure, then many would then be eligible and could benefit from this relief program to be able to survive.

At this time, other than taking on debt (with personal guarantees), without access to the CEWS wage subsidy program or other grants/investments, many like startups like us have a very limited runway to be able to get through this crisis. The fact of the matter is that B2B customers are not in a position to make buying decisions for at least 6–12 months and investors are not in a position to make high-risk investments when they’ve lost 40–60% of their own investment portfolios.

Proposal 2: Expand the range of relief programs beyond CEWS

Alongside Soushiant, there were five other startup Founders/CEOs that were invited to offer potential solutions to Canada’s Ministry of Innovation Science and Economic Development group. Together, they came up with the following list to help expand the programs available:

  1. Businesses can be eligible to get government-backed credit at 0% to 2% interest over a fixed term. The maximum credit amount would be a percentage of the business’ expenses on the tax return for their most recent fiscal year-end and should be capped up to a maximum per company.
  2. Businesses can choose to get money directly from their bank (similar to CEBA or BCAP), or as a credit or grant from the government directly (in this case, the Canadian government).
  3. Business owners should not be required to provide a personal guarantee as is currently being required.
  4. There shouldn’t be a strict revenue reduction qualifier. This introduces complex accounting overhead which has already caused confusion for all involved.
  5. There shouldn’t be a strict requirement for it to be used for payroll or even credited against payroll accounts.
  6. Special non-repayment incentives should be put in place when businesses use this credit to hire back or retain existing employees, hire new employees, or invest in R&D efforts.
  7. Punishment should be extreme for abuse and fraud. Administering banks and grant administrators should be required to inform on the misuse of funds.

Proposal 3: Offer a matching investment facility for startups

(A proposed solution from Soushiant Zanganehpour)

This proposal relates to expanding the eligibility requirements of the BDC Capital Bridge Financing Program, to allow non-VC backed ventures to also access the investment facility.

Currently, the BDC Capital Bridge Financing Program only entertains funding requests if a deal is referred and already backed by a pre-qualified Canadian VC firm. If you are referred to this program by a VC firm General Partner (GP), you as the entrepreneur are out of luck (even if you have syndicated a group of accredited investors yourself and have already raised over the $500K threshold).

This financing program suffers from a fundamental flaw. Historically, over 90% of accredited Canadian VCs do not invest in very early-stage ventures (pre-seed, pre-revenue, or post-revenue) and typically concentrate their investments to ventures who are looking for Series A sized investment round and have Series A metrics and achievements to show ($150K+ MRR).

As a consequence, most startups who are backed by accredited angel investors will not be able to benefit from this bridge program, and the government will also not benefit from the potential upside of being involved in such deals at such an early stage.

This leaves a large gap to fill and a lot of high potential companies without access to resources to continue growing and derisking their ventures.

Soushiant recommended that access to the investment facility should be limited only to technology ventures backed by accredited Canadian VCs and ventures that can syndicate their own accredited investors. He recommended that the Government of Canada should offer a Matching Fund Facility through a Convertible Note, and if an entrepreneur or venture is able to syndicate a set of accredited Canadian investors to commit a minimum of $250K or above, they could benefit from this matching funding facility.

Expanding the scope of this facility or building something complementary has multiple benefits:

  • It allows other accredited professionals to lead a round, allowing the government to take advantage of the diligence already done on the venture by professionals;
  • It allows thousands of other startups to benefit from funding in a risk-adjusted manner
  • It may provide additional assurance to accredited investors to invest more in the ICT sector during this particularly challenging time
  • It helps the government benefit from any financial upside experienced by promising early-stage companies, as they are involved through a convertible note, not a wage subsidy or through a grant.

 

 

Are you a startup or small business facing this same challenge and are concerned about your ability to survive like we are? If so, what are your thoughts on this? We want to hear from you [click here]!
Why There’s a Fundamental Issue with the COVID-19 Crisis Relief Programs

Why There’s a Fundamental Issue with the COVID-19 Crisis Relief Programs

Part 1 of 2: Simply, Past Revenue Is Not the Right Measuring Tool

swae-challenges-covid-relief-programs

Background and Types of Relief Programs Offered

financial relief programs around the globe kick in with the main goal to stimulate businesses, in Canada, many in the Information and Communication Technology (ICT) sector are feeling left out and misrepresented.

After assessing the various programs offered to companies affected by COVID-19, our research has found that most companies are unable to benefit from a variety of relief programs offered by the government. The issue lies in the way that the programs are structured, and how the companies that make up the ICT sector have financed their growth to-date which is being overlooked. Or, these same companies are being penalized by the government programs that were supposed to help them in a time of crisis.

There’s a serious problem here because there’s a lack of answers around important concerns relating to the fundamental design of the programs, and the bottom line is that many feel the policy makers are ignorant of how technology startups and companies grow. This is leaving founders in the ICT sector feeling unfairly penalized for their legal structures and for the strategic growth decisions they’ve made.

Currently, the most significant relief programs offered to businesses (under 500 people) affected by COVID-19 by the Canadian Federal Government are the Canada Emergency Business Account (CEBA) — a $40,000 interest-free, government-backed loan that includes a $10,000 grant if you spend and pay back the full loan amount. And, there’s the Canadian Emergency Wage Subsidy (CEWS) — a 75% wage subsidy up to a maximum of $847 per week.

To be considered eligible to receive the CEWS, an employer must demonstrate a drop in revenue of 15% or more for March 2020, and 30% or more for April 2020 and May 2020, when compared to their revenue for the same period in 2019. This means that if your revenue did not drop by at least 15–30% more than you made last year, sorry, you’re not eligible.

Where the Canadian Federal Relief Programs Have Design Flaws

And herein lies the fundamental flaw: the design of this program using the revenue test used to establish eligibility overlooks the way startups finance their growth and development.

Let us further explain…

The majority of technology startups do not start their business with revenues to report early on, and growth is based on investments in order to develop a product and find a market for that product to sell to.

Most startups grow through bootstrapping or raising grants, equity investments, and/or debt. In the rare case that a startup begins generating revenue on day number one, under normal growth circumstances they would have less revenue generated last year than they would have this year. In a technology venture, revenues are expected to increase exponentially year-on-year, not remain stable and stagnant for years on end (like a traditional brick and mortar small business or storefront).

If a technology venture generated $100K in revenue last year in 2019, and this year they projected to generate $500K, even a 30% loss would not qualify them for the CEWS program because they have earned well over their 2019 baseline for the same period. This venture must have lost much more than 30% to benefit from this relief.

What the Canadian ICT Sector thinks of the Relief Programs Offered

Following the announcement of the CEBA and CEWS relief programs, the Council of Canadian Innovators (CCI) — a national advocacy organization and business council led by the CEOs of Canada’s fastest-growing companies — conducted a sector-wide survey, to see how the various programs would impact startups and the ICT sector.

We weren’t at all surprised that they found that:

  • Around 39,000 Canadian ICT companies are ineligible for the CEWS because of how they evaluate a reduction in business activity.
  • 94% (609 CEOs) said they would be ineligible for CEWS based on the previous 30% reduction in wages year-over-year.

Like the other technology startups surveyed, Swae is in the same boat, and like other startups, we did not start our business venture with revenues to report early on. We have grown based on investments in order to develop a product and then find a market for our product. Though we incurred significant losses due to COVID-19, we had no revenue to report during this 3 month eligibility period in 2019 so we do not qualify for the program.

What’s at Stake if Relief Programs are Not Improved and Do Not Increase Accessibility to Liquidity

Given the impact of COVID-19 on most economies globally, stimulation through financial relief is required if there’s going to be any “economy” left when COVID-19 subsides. This isn’t just about Canada, but the entire globe.

Governments could help stimulate technology companies and startups if they were creating programs using suitable measuring tools, and really understood the recipient’s circumstances and the kind of relief needed.

Across Canada, more than 60,000 workers a year are joining the tech sector and the innovations of these startups fuel a network of advanced industries that collectively drive 17% of the national GDP and 11% of national employment. That’s a giant network of customers, clients, and suppliers that stand to lose big time if the startup ecosystem fails.

Many tech startups can only keep going and raise funds based on assumptions around sales that are now becoming null and void during this COVID-19 crisis. This concern has been voiced by many technology entrepreneurs.

For example, Gordon Casey, Founder of Brave Technology Coop in Vancouver, BC said, “We have a team of 7 FTE. Our runway is based on assumptions around sales that are all irrelevant now. So we can either let everyone go to put a pause on the business in every sense and attempt to “time travel” to the other side of COVID. Or, we can keep paying those employees while we pause revenue and sales-generating activities.”

Either way, it’s not a winning scenario for Brave Technology Coop.

They’re not the only ones stuck in that position. Many companies, including Swae, are stuck between pre-revenue and post-revenue generation stages and have no reliable predictions on when a stable and receptive market will happen. It’s a difficult situation no matter how you dice it.

These concerns must be addressed and alleviated to ensure no one is unfairly penalized for their existing legal structure and the growth decisions they’ve made to-date.

Canadian tech entrepreneurs have made tremendous gains over the past 15 years, thanks to the support of all levels of government. From incubators, grant programs, investment funds, to trade missions — all of this nurturing has helped to build a vibrant ecosystem that’s driven huge growth in jobs, investment, and economic activity.

If relief stops due to technicalities and flaws in how programs are designed to help the startup sector at this moment of crisis, our future economy will start from zero afterward.

More importantly, nuanced support is required to help protect the many years and millions of dollars of investment made by the Canadian government in creating a strong ICT sector all across Canada.

In part 2 we’ll be discussing 3 solutions that we’ve found to combat this major problem. Stay tuned!

What do you think, do you agree? We’d love to hear from you, go here to let us know your thoughts!

>

Pin It on Pinterest