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Spotify, the popular music streaming service, has never turned a profit. In 2017, it posted an operating loss of $461 million. Now it wants investors to value the company above $20 billion, going public with an unconventional approach: direct listing.

The 12-year old company eschewed the standard Initial Public Offering (IPO) playbook. Rather than ring bells, blitz media, and sell to institutional investors in advance of the first day of trading, Spotify let its existing shareholders offer holdings directly to the market.

Spotify is not raising capital. Its shareholders and employees have been free to buy and sell the company’s stock for years now. Founder and CEO Daniel Ek sees a direct listing as a natural next step to a larger stage. He has taken a zen approach to the listing. It’s business as usual—nothing to get too hyped about, and it’s “just another day in our journey to fulfill our mission.”

This approach is both novel and controversial. It’s not how a tech company goes public. Which is why the approach has generated significant earned media. I’m now questioning  the age-old advice that communicators should never talk strategy, they should do strategy.  Sometimes the process is the story, and it’s one worth telling. And in this case, the story might be bigger than Spotify.

Spurned bankers are hoping Spotify fails for failing to see the risk of listing directly. Convention has it that you need bankers to help the company secure an appetite for its shares. Failing to do so could result in wild trading activity in the first few days and weeks— or worse, a cratered stock price within months. It’s a risky move that will prove to be an act of genius or arrogance.

That, or we’re reading too much into this — it could be just a practical decision. If the company doesn’t need to raise capital, why waste time and money on fees and distractions? As a popular consumer brand, Spotify feels it has a good pulse of its value. It also has years of private trades under its belt, so it’s not going into this completely in the dark.

The move could shift the dynamic between Silicon Valley and Wall Street. The power balance has long favoured Wall Street. As Spotify writes a new playbook on how to go public without Wall Street, tomorrow’s tech startups may follow Spotify’s lead. If this hasn’t sent shivers down the spine of the Wall Street establishment, it should. Not because this is a middle finger to Wall Street—but because it’s more of a shrug. And that’s much more offensive. Why? Because the New York Stock Exchange changed its own rules to allow the listing. That’s huge. Spotify didn’t have to play by Wall Streets rules, it played by its own. You can’t get more Silicon Valley than that.

It will take time—lots of time—to know whether Spotify made the right call. We should remember that past attempts at IPO alternatives by tech companies appeared disastrous in their early days. In 2004, Google sold shares in a Dutch auction. The move was interpreted as a disaster at the time. It priced its shares at $85, which was considered the low-end of its price expectation of $85-$95. Behind the scenes, the company was hoping the shares would sell closer to $108-$135.  It closed that first day at $100.34—respectable, but not the boom the company wanted. It was considered a disastrous start. But it would turn out to be the stock that woke the market up as more consumers understood and used the Google product. By the end of the year, the stock doubled. Today, the stock trades 10 times more than where Google’s shared closed on that first day.  

In hindsight, Google didn’t need to a wildly successful IPO. Perhaps Spotify doesn’t need one either. Spotify is part of a growing trend of private companies that can comfortably avoid selling shares to the public because they’re more than capable of raising money on their own.

Like Google, Spotify offers a product that consumers access multiple times a day, across devices, in and outside of the home. The user experience is filled with hits of dopamine. For many, it’s an essential app, as essential as toothpaste, heating, and transportation. As we continue to migrate our lives to the cloud, we build affinity with the apps and services we use every day. That has long been the sweet spot for traditional companies, and if Spotify is breaking new ground for tech companies, it will be the sweet spot for tomorrow’s tech stars. They can focus on building their user base, grow as a private company, and go public on their own terms. A good product, an addictive user experience, and a good story. That could be tomorrow’s ticket to Wall Street.

“Alexa,” Alex Jones, the conspiracy radio host, growled while holding Amazon’s smart speaker at eye level. “Do you work for the CIA?”

“No. I’m not employed by them. I’m made by Amazon.”

My brother sent me the YouTube video a few days after I got my own smart speaker — a Google Home. “Say hi to the NSA for me,” he added.

As with many new users, the clip hit uncomfortably close to home. I was struggling to answer two key questions about the product: first, how exactly did it work, and, second, how much of my information was being monitored and analysed? And by whom?

The idea that a digital personal assistant like Amazon’s Alexa or Google Home collects and analyzes user data shouldn’t come as a surprise. Every aspect of our digital lives—from Facebook, to YouTube, to Spotify and our banking apps—generates a wealth of personal information, some of which is used to target us with relevant advertisements.

Despite recent fears about data security as a result of the Cambridge Analytica scandal, you can make a strong argument that our present online environment isn’t that scary. We voluntarily give up personal information so that a genuine and accurate profile of ourselves can be created online. This lets us make better use of these tools and provides us with (usually) contextually-relevant advertising.

While it may be unnerving for some users to Google “veterinarians” and then have Google later serve ads for Kibbles ‘n’ Bits, it’s less frustrating than seeing ads completely unassociated with our interests or needs.

While many people are willing to give up some privacy for an easier digital life, Alexa and Google Home raise worries that they collect far more data than users would otherwise wish to give up.

This fear seems unfounded, though. Yes, smart speakers are always “listening” in the sense that they are awaiting their commands (“Hey Google…” “Alexa…”). While they are “listening” in the most basic sense, they’re not analysing or storing every conversation you have within earshot. From a practical perspective, it would be a massive and pointless monetary drain on Amazon or Google to collect and store every word said by users.  

In fact, as we can see from ads that have made use of smart speakers, when issues arise, they’re not caused by Google or Amazon making too much use of personal data. Instead the problem is that they are not making enough use of it. So far, we are not seeing evidence that these new digital assistants are having a noticeable impact on ad targeting.

Last year, when users asked their Google Home Minis about their day (a feature that recaps weather, traffic, top news, and your personal calendar), Google included a short teaser for Disney’s Beauty and the Beast. Google claimed this wasn’t so much an ad, as it was a way to keep users up-to-date on recent events. However, the idea that the release of Disney’s Beauty and the Beast was one of the top news stories of the day didn’t wash.

Instead of targeting these ads to users who might actually be interested in seeing Beauty and the Beast, Google served the ad broadly to its users, upsetting many people who found the teaser’s presence jarring. Google’s first misstep with its smart speakers wasn’t the result of “listening” or “monitoring” users, collecting their data, and using that data to target ads towards them — it was because they didn’t.

Had Google used its vast user-specific data to target the ads, it’s conceivable that users may have considered the ad more appropriate and not an intrusive attempt to earn marketing dollars.

The Beauty and the Beast spot didn’t follow the approach that has been so successful for Google’s search advertising approach. Nor did a recent foray by Burger King.

Burger King ran a television ad in which an actor claimed there wasn’t enough time to list all the ingredients in a Whopper, so instead called out “Hey Google, what’s in a Whopper?” Viewers who had Google Home close enough to the TV were inundated with the digital assistant’s robotic voice reading off the Wikipedia article for Whoppers. This, understandably, frustrated some users. Google quickly patched the Google Home software to stop the readout.

Again, the furor was caused not from too much use of personal information, but by using no personal information. Users who had no interest in learning about the Whopper—no matter how clever they found the ad—were frustrated at having their homes and smart speakers hijacked by advertisers.

There are a lot of ways to effectively and inoffensively target advertisements towards potential customers. Key among those is ensuring that ads are useful to those seeing them. While it is a common refrain that people are “sick of advertising”, no one appears to be sick of consuming. As a result, no one minds ads for things they actually want to buy. Google already knows this and has shown how successful targeting ads in this way can be.

Companies risk further frustrating customers if they don’t integrate personal information into smart speaker advertisements. Simply put, less information means less accurate ad targeting. If, instead, companies make full use of the information they already have, they can make advertising less intrusive, getting the products users want in front of the customers who want to buy them.

 

Views expressed are those of the author and may not represent those of Navigator or its affiliates.

Over the past several weeks, American teenagers have seized the forefront of their national gun debate – speaking to media, challenging politicians and sharing their personal experiences with gun violence. It doesn’t stop at gun policy – but all over the world, age increasingly predicts how people vote.

Indeed, on many issues, generational divides exist on national questions. Most young Americans have a favourable view of gay marriage relative to older generations.[1] Young Britons voted overwhelmingly against Brexit in 2016[2]. Right here at home, young voters turned out in record numbers for Justin Trudeau’s Liberals in 2015.

It is conventional wisdom in politics that young people do not vote. Therefore, parties put forward platforms that appeal to other parts of the population that reliably show up to the polls. But as witnessed in Canada’s 2015 election and the United Kingdom’s 2017 election, the younger demographic can influence elections when motivated to turn out.

In Ontario, the Ontario Progressive Conservatives are the odds-on favourite to win the June election. The party has led every opinion poll since the Sudbury by-election, and won five out of seven by-elections (even in reliably Liberal areas) since the start of this parliamentary session.

According to a recent poll, the 18-24 demographic still backs the Ontario Liberals, where 42 per cent of voters say they will back the government, compared to 24 per cent for the PCs and 18 per cent for the NDP.[3]

In Doug Ford, the PCs have new leader who is a potent political force.

Comparisons with Donald Trump aside, Mr. Ford is anything but. The Fords have, for years, relied on the support of working-class communities in Toronto. In fact, they often had more voters in common with the Liberals and New Democrats than the Progressive Conservatives.

And while Donald Trump channels the voices of those who feel left behind by the economy, Mr. Ford channels the voices of people who feel left behind by this government. People who feel the government has overtaxed, overspent and intervened more than its welcome.

In other words, Mr. Ford is a conventional conservative who appeals to bedrock pocketbook issues. He rails against the elites and taps into concerns about the role of government in everyday lives.

Never to be undone, the Liberals have tried to seize the populist mantle with more Bernie Sanders-flavour. This week, the Liberals’ commissioned a throne speech that zeroed in on the anxieties of people just getting by, as work becomes more precarious, where stable and lifelong jobs with high wages and health and retirement benefits shrink in number.

Young people bear more of this burden. Today, almost one third of young workers are in temporary contract work – a generation ago, that number was one-quarter. The unemployment rate of those 24 and under is also disproportionately higher than the average – at 11.2 per cent in January relative to the average of 5.5 per cent. With skyrocketing housing prices in the Greater Toronto and Hamilton Area, youth everywhere increasingly feel they will never be able to buy their own homes.

At the same time, young people are particularly supportive of the sexual education curriculum – a fact that the Liberals are sure to exploit.[4]

Mr. Ford’s position on the sexual education curriculum may affect the PC campaign if the Liberals manage to convince and energize young voters to turn out and vote against conservative candidates. Mr. Ford is already walking back his earlier statements on several social issues and has committed to also being the leader for the more progressive elements within the PC Party.

Despite this, in March, half of voters 18-24 disapprove of Premier Kathleen Wynne’s performance, with only 32 per cent approving and the rest expressing no opinion. In contrast, Mr. Ford has a net positive rating of 5 per cent, with almost one third expressing no opinion over his leadership style.

Mr. Ford speaks with a personal authenticity and credibility that other politicians can only aspire towards. In him, the PC Party can suddenly reach new constituencies that they could not hope to reach under more conventional leaders or normal elections. Mr. Ford certainly can make inroads among younger voters too.

 

Sources

[1] http://www.pewforum.org/fact-sheet/changing-attitudes-on-gay-marriage/

[2] https://www.statista.com/statistics/567922/distribution-of-eu-referendum-votes-by-age-and-gender-uk/

[3] https://www.campaignresearch.ca/single-post/2018/03/15/Doug-Fords-PC-Party-Set-to-Win-Big-in-June

[4]http://poll.forumresearch.com/data/ON%20Sex%20Ed%20News%20Release%20(2015%2002%2028)%20Forum%20Research.pdf

Canada is heading into uncharted territory. Just over a year ago, the federal government set July 1, 2018 as the deadline for cannabis legalization. Since then, we’ve had front-row seats to the green rush. With a dedicated Cannabis practice, Navigator has been following developments in the cannabis industry, with an eye to how government, entrepreneurs, activists, medical professionals, law enforcement, and Canadians are planning for the end of prohibition.

Since November 2016, we have been tracking Canadians’ feelings about legalization in Canada’s only tracking poll dedicated to Cannabis. In January 2017, we launched the first season of Legalized. In our first season, we followed the announcement of legalization through its study by the Task Force on Cannabis Legalization and Regulation and the announcement of its recommendations. But we were just getting started.

By request, and popular demand, we’re pleased to announce the return of Legalized for its second season on March 26, 2018.

Which means you have less than two weeks to binge on the first season, as we’ll be picking things up where we left off last year.

Over the past 17 months, we have heard the excitement and concerns of Canadians. We watched as provincial government introduced legislation about cannabis retail and as the cannabis industry expanded across the country.

In season 2 of Legalized we’ll speak with Aaron Salz, head of Stoic Advisory to discover how Canada is quietly becoming the top exporter of medical cannabis. What does that look like? What are other countries borrowing from Canada’s model? What does this mean for Canadian exports?

We’ll explore the economic impacts inside our own borders. Is the end of prohibition proving to be a boon for small towns that have been hit hard by the decline in manufacturing?

And what can we expect of entrepreneurs seeking to build cannabis lifestyle brands? How can these pioneers build modern cannabis businesses that eschew the traditional “stoner” aesthetic? How do they plan to shed stereotypes about cannabis consumption?

As businesses and entrepreneurs professionalize the industry, how will they manage public opinion, which hasn’t yet fully embraced legalization? In our Cannabis in Canada report, we have watched support for legalization slowly decrease from a high of 46% to a low of 42% over the last 18 months. Similarly, we have seen opposition to legalization rise from a low of 33% to a high of 38% in that same period.

What will it take for Canadians to feel comfortable that law enforcement have the tools they need to tackle impaired driving and youth access? We’ll dig into these concerns in our new season of Legalized.

Last season, we spoke with the Hon. Anne McLellan, head of the federal government’s Task Force on Marijuana Legalization and Regulation, about the findings and recommendations of the Task Force. In season 2, we’ll check-in with her again about Bill C-45, the Cannabis Act, to see if the legislation lines up with the findings of the Task Force, and the degree to which it will produce a safe environment for Canadians and cannabis consumers.

While the bill has passed votes in the House and is now being debated in the Senate, issues remain among activists and opposition parties. We’ll speak with one Member of Parliament—Tracey Ramsey—who has voiced her concerns with the government’s legalization plan. We’ll explore how —in her view—the legislation has created confusion about what’s legal vs. what’s not,  and it will fail to equip law-enforcement with the tools needed to accurately test for cannabis-impaired driving.

Similarly, we’ll hear from activists and advocates, such as Jonathan Zaid from Canadians for Fair Access to Medical Marijuana, that the federal government’s approach to legalization will place undue burden on medical patients. A refusal by the federal government to exempt medical cannabis from its $1-per-gram excise tax and HST/GST will create a situation in which medical cannabis is the only prescribed drug that is not exempt from taxation. What impact will this have?

There are a host of issues that still need to be addressed by all levels of government about legalization. Despite these, we have already seen the incredible economic impact the cannabis industry can have on Canada. The expansion of medical and recreational cannabis businesses has been unprecedented and full legalization could bring even more growth.

As we explore these questions, we hope you’ll subscribe to our second season of Legalized, wherever you get your podcasts (Apple Podcast, Google Play, SoundCloud). We’ve been lucky enough to speak with industry professionals, medical experts, MPs, activists, and advocates about what legalization means for Canada and Canadians. And we can’t wait to share their perspective with you.

New episodes are released every week, starting on March 26, 2018.

To subscribe to one of our podcast feeds, click here: 

• iTunes
• SoundCloud 
• Google Play

 

Sexual Harassment in the Workplace: The Public’s Perspective

Download the report here: Report on Public’s Perspective of Sexual Harassment in the Workplace

We are in the midst of a transformative moment for the workplace; the beginning of a cultural zeitgeist that approaches harassment and misconduct in a professional environment in a profoundly different way than it ever has before. It is difficult to watch television, open a magazine, or read a newspaper without being inundated with stories of inappropriate behaviour in the workplace. The shocking fall of Harvey Weinstein was only the beginning, as the #metoo and #timesup phenomena have swept the globe with ever-increasing momentum.

It is a moment that has set into motion significant change and will, hopefully, have lasting effects on the way that people interact with each other in the workplace. It also brings with it major implications for organizations, and the public’s expectations of their processes and procedures in the face of these types of high-profile challenges.

While many organizations have taken steps to shape the culture of their workplaces to be positive, inclusive and free from harassment, it is naive to think that employers can, in all cases, control the behaviour of employees as there will always be those who engage in behaviour that contravenes the values of the organization.

What can be controlled, however, is the preparation for and the management of these challenges when they arise.

Public and media expectations of an organization’s response have evolved and grown, and are under more acute scrutiny now than ever before. There is little public sympathy for a slow or indecisive response when allegations surface regarding inappropriate behaviour within an organization. Organizations that are perceived to be delaying or protecting wayward employees are at an increasing risk of receiving significant negative attention on social and traditional media, harming their long-term reputation. They also risk lasting harm to their workplace culture and employee morale, and put themselves at substantial risk in both the court of public opinion and a court of law.

However, there has been speculation that the expectations of media are out-of-line with that of the public. Leaders of organizations have wrestled with questions of morality, and the importance of protecting their organization. The absence of data meant that organizations were acting blindly, taking or delaying action based on instinct rather than taking an evidence based approach.

At Navigator, we believe in always taking a research-guided approach to solve challenges. When managing issues that capture the public attention, it is critical that organizations understand the expectations of the public.

With this in mind, to better understand how Canadians perceive these issues and how they prefer to see them addressed, Navigator undertook a major national survey that investigates the attitudes and beliefs of the public. The survey examines a number of issues, and uses a specialized approach to understand whether some of the received wisdom that exists on the issue is correct.

The results provide a comprehensive and fascinating understanding of the landscape, and should be used as a tool for organizations to understand how to create a safe environment internally, to manage its approach to challenges, and to protect itself from reputational damage should an issue emerge.

It is vital that leaders of organizations understand and manage this issue, for the good of their employees and for the protection of the organization. This survey is a vital and valuable tool in that understanding.

Methodology

The survey was conducted among a national proportionate sample of 2000 Canadians.

The study was conducted using an online methodology and was undertaken from February 12 to 20, 2018. Respondents were able to complete the survey in the language of their choice: English or French.

Quotas were instituted for region, age and gender to ensure that the sample reflects the characteristics of the Canadian population based on recent Statistics Canada data. Further, weights were applied to ensure that the educational level of respondents reflects Statistics Canada data.

Responses may not add up to 100% due to rounding.

Understanding of Sexual Harassment in the Workplace

The legal definition of sexual harassment is defined in legislation differently across jurisdictions, but those definitions rarely align with public perceptions of sexual harassment. For instance, in Ontario, which is the province in Canada with the most wide-ranging definition of sexual harassment, the legislation describes sexual harassment as “engaging in a course of vexatious comment or conduct against a worker in a workplace that is known or ought reasonably to be known to be unwelcome.”

This wide-ranging definition leads to significant confusion when used in real-world situations. Situations involving harassment, for example, often involve the harasser being unaware of how their actions are perceived. The past year has provided many examples of this; rarely, it seemed, did a statement from an accused not include an explanation that they did not understand their behaviour to be harassment at the time. Such confusion can be deeply challenging for organizations attempting to appropriately and fairly adjudicate such situations.

This confusion is perhaps best illustrated by the fact that the public’s understanding of sexual harassment varies greatly. When asked to self-assess their understanding of sexual harassment in the workplace, 66% of Canadians describe themselves as having a good understanding; only 7% describe themselves as having a poor understanding.

However, when asked to describe whether an action is sexual harassment or not, views are far from aligned on a number of issues.

Perceived Seriousness and Prevalence of the Issue in Canada

During the media frenzy of the #metoo moment, prominent commentators have questioned whether the intensity of public concern is aligned with that of journalists.

When asked, 82% of Canadians describe the issue as a serious or very serious issue, with only 18% believing it is not serious.

Notably, more women (88%) than men (74%) feel it was a serious or very serious issue.

To understand the intensity of Canadians’ belief that sexual harassment is a serious issue, Navigator asked those participants to rate a variety of well-known but unrelated issues. Sexual harassment in the workplace ranks along other hot-topic issues, including the signing of NAFTA, the legalization of cannabis, and volatility in the stock market.

Further, two-thirds of Canadians express the belief that all or most Canadian companies struggled with issues of sexual harassment.

Often, when managing public affairs issues, companies must overcome narrative challenges. If a pattern of behaviour that is unacceptable in the eyes of the public becomes evident, a company’s credibility is tarnished and their ability to counter public criticism is limited. It is with this in mind that Navigator sought the opinions of Canadians on their assessment of industry. Navigator tested more than 18 different sectors for their credibility on this issue.

Participants believe that organizations in the entertainment industry, hospitality industry, and in the media are most likely to be hotbeds for sexual harassment.

 

Prevalence of the Issue in the Workplaces of Respondents and Evaluations of Current Employers

It is vital that leaders of organizations create a safe space for employees. Not only does creating such an environment help the organization thrive, but it allows leaders to deal with issues openly and rapidly, preventing them from sustaining public criticism. A surprisingly high proportion of employed Canadians – 2 in 5 – feel that sexual harassment is a serious problem in their own workplace.

40% of Canadians say there is some or a lot of sexual harassment in their workplace.

When tested on a variety of issues, Canadians expressed ambivalence about the internal policies of their own organizations. Many feel that their organization has simply not done an adequate job, while fewer than a quarter answered that their organization was doing a “very good job” on a variety of metrics. Those metrics included whether the company has in place appropriate policies, whether they provide a safe culture, and whether they
do an appropriate job of informing employees.

Incidence of Personally Experiencing Sexual Harassment in the Workplace

The prevalence of sexual harassment in the workplace is another metric that was tested in the survey. Approximately 24% of Canadians reported that they had experienced sexual harassment in the workplace. Women are considerably more likely than men to report that they have been victims of harassment.

Problematically, of those who report that they have been sexually harassed in the workplace, nearly 2 in 5 report that the sexual harassment stemmed from a person who had direct influence over their career.

Perceptions of Management

When it comes to how Canadians perceive the management of the issue, the opinion of Canadians is more nuanced. For instance, while 71% of Canadians feel that it has taken far too long for the problem of sexual harassment in the workplace to be taken seriously, when asked if they believe the pendulum had swung too far, 54% agree with only 18% disagreeing.

This question once again demonstrates a gender disparity:

Takeaways for Organizations 

It is evident that Canadians believe that sexual harassment is an issue, and one that must be dealt with appropriately by organizations. Their expectations and beliefs regarding how organizations must behave will define whether those organizations will survive public criticism.

Organizations must not wait for the challenges to come to them: they must be prepared to manage and deal with issues as they come, and they must act to prevent issues from emerging by creating a safe work environment in the first place.

It is vital that leaders of organizations take steps to create this safe work environment, both to maintain a healthy organization and to prevent themselves from sustaining reputational damage.

Download the report here: Report on Public’s Perspective of Sexual Harassment in the Workplace