While the travel industry is a great topic to explore on its own, I want to examine the recent phenomenon of Corporate Venture Capital amongst airlines. JetBlue and, to a certain extent, American Airlines and Delta have already entered the corporate venture game. JetBlue Technology Ventures is based in Silicon Valley and has made 19 investments (a la 2020) according to CrunchBase. There’s a symbiotic relationship to be had and it’s fun to explore.

Why should startups see airlines as a venture partner?

The obvious: either free or discounted travel. T&E is the bane of any organization no matter their size. However, statistically face-to-face meetings yield higher success rates. Therefore, enabling startups to affordably create more such encounters is a tall value proposition to enable Sales teams. Cheaper travel not only extends the reach of sales but talent pools. Distributed teams are better stitched together when travel costs are a lower barrier. This in tunr allows teams to incorporate higher quality talent from afar. All said, this is a tall value proposition for cash conscious ventures.

The most important offering airline’s have is their customer channel. There are nearly 24K commercial flights comprising 2.2M passengers daily in the United States alone. Passengers are strapped in, generally without WiFi, for hours on end just twirling thumbs. This is a great opportunity to market potential users through mobile or in-seat entertainment systems. Furthermore, flights are rarely ever homogenous; offering a good split of consumers from all walks of life. Certain routes could be targeted pending their destination, for example: gaming products could target flights involving Las Vegas or flights to Europe/Asia for travel offerings. First class passengers could be targeted as well for higher end consumer offerings.

The in-seat entertainment systems themselves are basically Point of Sale (POS) systems presenting another opportunity. Boutique retailers such as Foxtrot or Huckberry come to mind who could disrupt the still paper-based Sky Mall concept. Throw in a mile for every dollar spent while wheels-up to further incentivize purchases and you’ll see oodles more pairs of Gucci loafers sold!

Why airlines should be involved in the venture game?

Again it all comes down to experience, brand, and incentives.

Providing access to the latest and greatest games, content, and applications makes for a greater experience and incentive to choose a different carrier for the same destination. Employing said tactics is key to unlocking the ever-so-elusive millennial market, whom are experience driven. Incorporating the latest gaming apps, VR offerings, or any other tech novelty in turn increases the brand of said airlines associating them as more “tech”. One example of airlines already moving in this direction is Delta Air Lines whom has publicly stated they are working towards becoming a tech company with an airline platform.

What kind of technologies might airlines invest in?

Regarding the in-flight experience: gaming, virtual reality, and interior design (feng shui, anyone?) are at the top of the list. Anything improving the process of flying, from check-in to baggage claim are of significant interest as they improve the customer’s experience. These techs range the gambit from facial recognition software, blockchain, and AI-messaging systems to back office IT systems. Better equipping and enabling front-line workers (i.e. flight attendants, baggage handlers) with AR/VR, and exoskeletons could improve efficiencies. Finally, in the age of self-driving cars airlines would be interested in 100% autopilot technology which retrofits their existing fleet.

While north Georgia may not be the Capitol of FinTech; it certainly takes the cake in regards to payments and transactions given the aforementioned cluster, pro-business policies, and access to top-tier talent from Georgia Tech and Emory.

Now why is this at all relevant? Well for one, many are bullish on the global payments industry and for concrete reasons. As more humans “go online”, developing economies reach maturity, and society becomes increasingly cashless perhaps no geography stands to profit more than Atlanta so long as its FinTech companies correctly catch the wave. With an estimated $2.3 trillion on the table there’s big money to be made.

Remittances and PaymentsPanel: Gabriel Abedd (Bitt), Justin Newton (Netki), Katherine McClure (UL), Moderator - Thiago Olson (ATDC)

• Remittances make up 20% of global payments and 50% of payments revenue. The cost of these traditional cross border transactions will only continue to increase [so long as blockchain does not enter].

• Brand loyalty with Western Union still has people utilizing their services despite ~15% fees. This hurts the parents sending their child $200 a month for rent much more than the 1x annual user. It’s the cost of trust in an outdated industry.

• Many still rely on the idea their money is physically held in the Chase they pass on the way to work or the corner Farmer’s National Bank. It provides them a sense of security.

• Open, permission-less networks utilizing bitcoin promote inclusion and value creation while allowing people without money or power to have a seat at the table.

• When designing the UI it is important (at least initially) to hide the complexity of bitcoin/blockchain. Since the tech new and lacking public awareness the learning curve is higher therefore yielding low adoption rates.

• BTC is the best solution to liquidity flow issues (money getting snagged). It’s fast, secure, and cheap.

IoT and BlockchainPanel: Shawn Wilkenson (Storj Labs), Lamar Wilson (Hijro), Jim King (Core Rights), Moderator - Patrick Deegan (DAC Technologies)

• Internet of Things will rest above the blockchain. Thousands of transactions can occur and then settle on the blockchain. This was likened to a bar tab where you put your card down and then at the end of the night true up.

• There’s an issue of scalability and how to balance completely trust-less transactions w/speed. IoT can eliminate back office intermediary functions such accounts payable/receivable, invoicing, procurement, and scheduling. However, auditing applications will need to be developed to ensure blocks transactions were entered correctly.

Smart ContractsPanel: Andrew Keys (Consensys), Howard Herndon (BlackLine Advisory Group), Moderator - Carol Van Cleef (BakerHostetler)

• Smart contracts are basically IF THEN ELSE statements. They are software code which may be able to replace certain templated work done in MS Word. In the future we will see library templates of smart contracts used by, for example, law firms. This will cause the current cost of trust to plummet.

• Could potentially secure self sovereign identity where users may secure all their information (

• We also received a sneak preview of yesterday’s much anticipated publication regarding the Enterprise Ethereum Alliance.

In summation, everyone agreed continued increased interoperability and cooperation amongst one-another is crucial for further development. Capitalizing on the strengths of blockchain/bitcoin: faster, cheaper, and more trustworthy, is key in scaling the technology. Proof of Concepts (PoC) are needed; however, to ensure blockchain ever escapes the beta stage.

Overall it was a phenomenal event and an incredible opportunity to hear from big figures in blockchain, namely Jeff Garzik, Brian Behlendorf, and Patrick Byrne. I had the opportunity to meet some incredible people while learning about blockchain’s current status as well much anticipated implications.

The Pitch

Google Flights, Kayak, SkyScanner, and the like are all destination based airfare search engines. You set your criterium (where & when) and hit go. These sites are great for searching a majority of airfare. However, for those who are traveling just in order to be with someone(s) and are open to meeting in a potentially one off location - finding this airfare is painful. For example, if a group of 8 friends dispersed all throughout the USA wants to meet, how do they efficiently go about finding the best intersection point? There is a clear need for an origin based search engine. Enter goHalfway.

The Honeymoon Phase Ends

Coming out of the weekend we were all high off our recent success. However, upon beginning our team alignment meeting a few days later it was quickly apparent attrition would be our biggest problem. Life obligations left us with 3 people (including myself). While reloading was a priority we never successfully on-boarded new talent through GHW’s entirety.

The 3 of us set off trying to deploy the $15K in developer, graphic design, and incubation benefits. This was incredibly difficult because simply put, not being a paying customer means you’re not a priority. To our own fault we let this hamper our progress. I even initially relied on 3rd parties to create our landing page. Lesson 1: You’ve got to make it happen yourself. Don’t rely on outside consultants.

We never got our first dollar but I do believe our approach was correct. Having the ability to provide intersection points for an unlimited number of fliers it seemed our early adopters would be event planning professionals tasked with setting up conferences involving dozens of people (i.e. annual sales conference, gaming tournaments, Tableau user conferences). After all, in many cases intersecting airfare provides cost savings which is an obvious sell for these event co’s. Lesson 2: come up with a clever way to demonstrate your product or idea. I wish I would have put together a 1-pager/white paper or video showcasing the functionality and potential cost-savings we could provide.

With only 1 greenhorn developer the product stagnated. We encountered the Chicken or the Egg dilemma where we had no idea what to build and when. Do we wait for our “early adopters” to tell us the functionality or should we start heading in some sort of direction? I’ve already touched up on it but in the absence of talent you need to make it happen yourself (Lesson 1) - I should have taught myself to code so I could add another hand in development.

One thing I believe we did well was utilizing the community - whether it was free press (StartupSac), pitch events, or simply getting feedback, we gained a lot from those more experienced around us. I was even able to successfully reach out to a local UI Dev and get some free mockup work: check it out for yourself here.

The End

The final dagger in the heart was moving to Atlanta for my next with Siemens rotation in January. Without being in person it was difficult to lead and sustain motivation from the the east coast. Along the way Donte’s side project, HoopMaps (check it out!!!) began to take off! They even made it on Shark Tank! goHalfway continued without any progress until March when it finally dissolved.

Startups are complex. A lot of independent variables have to click in order for success to have a chance. goHalfway never became a business, it was rather a club. However, through that club I learned a ton about myself, leadership, and more of what it takes to be even marginally successful in the startup world.

Like most participants I came in with an idea to pitch. This is highly encouraged and is at the very least a great way to get some public speaking exposure. Fortunately out of the ~40 pitches my pitch/idea was 1 of 6 ultimately chosen to become a project in which all the participants would divide and conquer over. From here everything happened fairly organically - participants gravitated towards ideas they felt most inclined to thus forming teams.

Just like with any business the most important factor is the team. I was able to recruit 6 awesome individuals (pictured alongside me below) to what is now known as Go HalfWay. The first major takeaway: having a good team and distribution of talent is everything. We had 4 business development type people (including myself) and 3 developers (1 full stack, 1 front end, 1 back end) which I felt was a great split. A number of the other teams loaded up on either allll developers or business developers which clearly showed in their final product.

As the de facto leader I made a clear point that while it was my initial idea the team now owned it. Getting their buy in was imperative to the weekend’s success and they’d be dedicating the next 54 hours of their life to it. We spent Friday night outlining a SWOT analysis and piecing together our mission statement. Getting everything down on physical paper early was perhaps the 2nd best thing we could do as everyone was able to visually see our value proposition on the wall.

Heading into Saturday morning we had an assumption of who our early adopters would be but needed to validate this asap. This is where the team began to divide and conquer as the biz dev side created and distributed our Google survey during which the developers decided how to approach building our MVP. While the surveys raked in we debated our revenue model and our go to market strategy. Here’s another takeaway - you don’t need to have it all figured out right off the bat. We got a little bogged down pursuing the hypothetically best route when there were other items to tackle. 14 hard worked hours later things couldn’t help but feel like they were shaping up.

Sunday was a race to the finish as we were scheduled to pitch that evening. Both the MVP and go to market strategy were nearly complete and therefore the most time spent was fine tuning the final pitch and making iterations based on feedback from the weekend’s mentors. This leads me to my next piece of advice: be weary of feedback. Always be open to feedback or constructive criticism but at the end of the day go with your gut. Had we followed every mentor’s advice we would have changed our approach 6 times. With that being said we had 2-3 mentors who really helped us zero in.

Before we knew; it was time to pitch. The Go HalfWay team had the oh so highly coveted last pitch of the night slot providing for an either hero or zero moment. After another member and I told our story we ended up taking 2nd at the competition (but later was upgraded to 1st as the then 1st place idea was found to have plagiarized). It wasn’t quite the walk off grand slam I’d imagined, however; I was incredibly proud of what my team and I accomplished. The judges were very optimistic regarding the idea as well MVP demo, which I’m told was quite unique for the weekend.

For those interested in testing the entrepreneurial waters I highly suggest attending a Startup Weekend (and pitching!). It was an incredible experience and I met a number of amazing individuals from all over Northern California. The team and I are still busy at it working on our project soon to be business which I think is a testament to the weekend. In fact, I just got back tonight from pitching again! I’ll dedicate another post to the actual startup at a later date.

Other thoughts I wasn’t able to work into this post:

Don’t try to Alpha anyone. First, trying to be an Alpha really just means you’re a Beta. But one-upping teammates or failing to consider other options makes one look amateur and denies any advantage of having multiple minds problem solving.

Pick something realistic and research it beforehand. While solving world hunger is an excellent pursuit it’s too high in the clouds for the weekend’s sake. Pick something to build that’s achievable and relatable.

This post will highlight a couple of the unique historical aspects of Brazil’s economy as well provide a brief analysis of their current and future prospects. While it would be prudent to write a post analyzing each subject (which I may do in the future) I plan to just stick to the meat and potatoes for now.

Import Substitution Industrialization (ISI) 1950s-1978

ISI can be traced to the early 20th century; however, its heyday came thanks to a prominent Latin American economist by the name of Raul Prebisch in the 1950s. Prebisch called for high import taxes to promote domestic consumption and protect/grow infant industries as a means of fostering economic growth. The idea was domestic industries and infrastructure would develop holistically and in turn keep both money and resources domestically. This was an easy sell for Latam governments, especially Brazil, weary of international intervention (think Cold War era) and safety from the exploitation faced during the colonial times. Most importantly, regimes were desperate for jobs to appease their voter base.

While the extent to how successful ISI was in achieving its goals of economic growth and infrastructure development has been well examined, one thing is for sure: Brazil received little external investment. Both Foreign Direct Investment (FDI) and modern goods were largely absent due to the isolationist economic policies and as a result, most of the industries were under grown. Perhaps the most important downside of the policy was without either competition or incentives, inefficiencies developed. Domestic goods were (and still are) expensive and inadequate to the point their export value was nearly negligible. Lacking an adequate education system the country had very little human capital, further adding to the lag in innovation which resulted in subpar domestic goods. ISI did help serve some of its tertiary goals of employment, keeping money within the economy, and maintaining a Brazilian stamp. But, such accomplishments weren’t available without heavy state involvement.

State Owned Enterprises (SOEs) 19XX-present

In conjunction with ISI Brazil employed a joint government-enterprise model for many of its major industries. Utilities (Electrobras, Furnas, Electronuclear), petroleum (Petrobras), aviation (Embraer), banking (Banco do Brasil), and telecoms (Telesp) are of notable mention. While Telesp and Embraer have been spun off into private entities many State Owned Enterprises still exist to this day and account for a large chunk of the countries jobs. Historically. SOEs have more or less been a part of Brazil’s inception depending on how you look at it. First in the form of colonial trading companies and later the entities which we witness today. While the same can be said for many colonial countries (including the U.S.) the difference is cultural.

SOEs are looked at from either a bane or boon standpoint. Because the government has skin (plus often an arm and a leg) in the game investors are provided security. Furthermore, added benefits in regards to subsidies, government legislative support, and monopolism make SOEs in some cases unfairly competitive on the world market. However, with government comes bureaucracy, regime interests, corruption, and patronage. Thus, their effectiveness is variable and dependent per regime. More times than not this relationship is problematic due to the variability of the ruling party and of course pathway for corruption. Furthermore, executive and managerial hiring are much more politicized and less based on merits or qualifications.

Conclusion

While Import Substitution Industrialization is over some of its policies have endured. High import taxes make electronics, among other things, incredibly expensive. For example, the most expensive Apple iPhones in the world are found in Brazil coming in at $1,234 (USD). For a comparison the average wage is about R$2200 a month or $725 USD. This poses a problem because Brazilians, like Americans, are very much consumers and end up financing expensive imported tech such as iPhones and laptops. Domestic competitors are often nonexistent or still fail in comparison to their North American competitors. Thus many spend an unnecessary amount of their disposable income on said goods because the high taxes sometimes create as much as a 60% markup!

State Owned Enterprises also haven’t faired well the past few years. In 2007-2008 high commodity prices allowed Petrobras to become the poster child of the powerful potential the fusion of both public and private sectors could bring. Since, oil prices have reached 6 year lows and analysts predict the price could continue to drop. Even more alarming is the recent scandal engulfing many of Petrobras’ exec and potentially even President Rouseff herself, a one time Chairman of the oil giant. Dubbed Petrolão due to its size and scope, as much as $20bn is estimated to have been grafted over the past decade. The names of multiple politicians and contractors have since come to the surface as the investigation continues. Petrobras stocks are down from $22 a share to $8 and the Brazilian Real dropped to R$3.30 to the dollar both due in large part to the scandal.

Both ISI and SOEs are classic examples of outdated economic policies which continue to survive due to precedent rather than progress. While each certainly served their place, such policies prove Brazil is still lagging as it’s becoming more obvious that the time has long passed where SOEs should have been spun off and import taxes lowered. In fact, both are now hindering economic progress because they don’t allow either Brazilian consumers or businesses to behave naturally without paying for it. Getting the government off the back of companies would be a large first step allowing companies to operate more focused on profits and be less effected by political means (i.e. artificially low oil prices). The country doesn’t suffer from the human capital constraints it once faced in the past and the policies shouldn’t reflect this either. Without a doubt corruption would still exist but it would be much harder as the avenue is less obvious and the incentive riskier. Further trade liberalization is also necessary to increase trade and job growth as multinationals are attracted by the large Brazilian consumer base, immense infrastructure, and relatively cheap labor (made possible by exchange rate differences). The reason why they aren’t there already? The famous Custo Brasil (Cost of Brasil) only made possible by these outdated economic policies (ISI, SOEs) where the government has its hand in everything but mostly the pockets of the consumers and businesses. Until either policies are done away with Brazil will never truly reach its full potential.

Being amongst the world’s 10 largest metropolitans, Sampa suffers from the typical constraints other cities of its magnitude face. Much like Mexico City, Shanghai, and Tokyo - São Paulo simply grew too fast for its own good while infra structure did not keep pace. Between 1950 and 2014 the metro’s population went from 2 to over 20 million people and currently houses 10% of Brazil’s population. Amongst the near parking lot traffic where residents battle up to 3 hour driving commutes a new market for helicopter transport was born. Boasting the worlds 2nd largest fleet of private helicopters (behind NYC), São Paulo’s business magnets take to the skies as a way of getting around (or above) the gridlock traffic. Yet, this solution is not feasible for nearly all the city’s residents.

Recently a rapidly depleting water supply caused by inefficiencies, pollution, overuse, and mismanagement has further exposed São Paulo’s infrastructure woes. The city Prefeitura has been debating a water rationing system where residents would have only 2 days of water. While this may soon be the city’s reality as of right now only few, select neighborhoods have experienced any sort of rationing. The rationing itself isn’t the end of the world as many buildings have water tanks (caixa’d agua) which can last weeks to months. Yet, this still presents a problem for Brazil and its crown jewel as the lack of basic public services is almost contradictory of the city’s top tier status.

Where inefficiencies exist also lies opportunities. Sustainable solutions in mass transit, public utilities, housing, and food are all noteworthy. While this could be said for nearly all of the world’s metropolises, what makes São Paulo unique is such shortcomings are holding back not only the city’s economic progress but Brazil’s. Thus, solving these problems is among the upmost importance, especially with a weak 0.8% growth and further inflation expected. Such economic conditions are a far cry from the 7.5% Brazil enjoyed in 2010 and could force residents further into the suburbs as property prices are already comparable to NYC. Making decisions on how to effectively allocate not only the current limited resources but those of the future is therefor invaluable. Enter “Big Data” analytics whereby educated decisions can be made to accomplish just that. By utilizing traffic patters to construct new roads or even re-route existing ones the city can become more agile. São Paulo recently implemented a bus corridor connecting both financial districts to the city center – drastically cutting commute times. Another role data analytics can play is mapping urban sprawl and quantifying population figures more accurately in aide of city planners. Many point to Curitiba as an example of how this smart model can be adapted to other Brazilian cities such as SP.

In short the short term São Paulo will continue to suffer from bleak economic growth and inadequate infrastructure. However, its inhabitants are both adapting and adopting solutions continually. It still remains one of the most underrated cities in the world and one full of opportunity should one put enough foot to the pavement.