How to deal with AI when it comes for your job

If you have ever worried about your job/livelihood with the rise of AI - such headlines don't help.
E.g. The Guardian - A robot wrote this entire article. Are you scared yet, human?
Forbes - Robots Aren't Taking Over The World (Yet) 

Quick background:
The current wave of AI is improving prediction which is a critical part of intelligence. Be it predicting whether the stocks will go up/down, traffic, or predicting whether to wear a jacket because it will be cold - prediction precedes and is a necessary part of intelligence. And the prediction is getting cheaper by the year.

What does this mean to current/future jobs?

If the prediction can be codified with a good/great return on investment, that job/task is likely to be automated by AI. 
E.g. Reading X-rays or biopsies, credit card fraud detection, pre-authorizing healthcare bills etc. 

The potentially scary side is, some parts of many jobs and all parts of some jobs would be open to this automation. Although it is potentially exciting if you are the one automating or implementing the AI. 

Some studies suggest that by 2030, intelligent agents and robots could replace as much as 30 percent of the world’s current human labor. I think the phrase "current human labor" is critical there. The nature of jobs will change so we might not have such a (or any) drastic change in the labor market. When the printing press was invented, when computers were newly introduced - many jobs were lost...and many were created. So it's not all bad news... however, there is some potentially bad news.

The (potentially) bad news:
Previous technologies largely didn't infringe on the sacred judgment capability of humans as machines weren't as good as humans at it... until recently. From the self-driving cars of Tesla to the AlphaGO AI - machines are now better at the judgment in many tasks when compared to us...and they are rapidly improving. And they don't ask for fair wages either.

So what's next?
Some of the smartest people disagree on what's next. Doom? Unprecedented progress? More inequality?
In this context - I have a macro view that there will be changes even though I don't know how profound they will be. Then comes the more practical micro view - What should I do?

My way to deal with this is to arm myself with how I can be a part of this wave of change to make my tasks/career/life better. One small way to start is to read and write more about this subject to make it a part of the future of my work. 

And If...rather When AI becomes more commonplace and comes after my job... I'd like to be with it than against it.

Source/Suggested reading: Prediction Machines by Ajay, Joshua and Avi

My ROI on Pandemic Networking via LunchClub, LinkedIn and Shapr

Like many WFH workers, I was looking for ways to network/meet people/have conversations with other humans that weren't my co-workers.

I experimented with a few platforms with the intention to meet interesting people. Disclaimer: I wasn't selling anything to anyone. And I didn't ask anyone for a job/internship when I spoke with them. I just wanted to build my network.

1. LunchClub - 

As of Dec 11, I've had video conversations with 60-65 people in the past six months. This platform has really taken off during the pandemic and it's easy to see why. I've met people from around the globe and about 75% of the people I met, they were pretty fun to talk to and I enjoyed the conversations. I've had follow up chats with some of them as we got along pretty well.
The platform does all the grunt work of setting up the meeting with other professionals (based on your availability and preferences) and all you have to do is show up for 30-45 mins. I also got an opportunity to conduct a workshop for 3 days on Business Finance for 30 entrepreneurs in Toronto thanks to someone I met on the platform. I had no intention of teaching, it just randomly came up and I said yes. 'Cause, why not!
My rating - 9 out of 10

2. LinkedIn - 

I reached out to about 18 people over the last 6 months. The short messages were sent through a connection request mentioning that I was interested in what they were doing and I was looking for a chat. I never mentioned that I wanted a job/contract from them (although, it's possible it could have been interpreted that way). I had an incredible hit rate of 3 out of the 18 people accepting the request but only one of them replied to my message. Apparently, it's common to receive a bad response rate on LinkedIn although there are exceptions. However, for the average user - it isn't easy to make new connections and get a chance to chat especially when you don't share mutual connections with the other person. Although, it is a fabulous resource to learn about people's career journeys and if you share any mutual connections with them to get yourself some facetime.

My rating - 5 out of 10

3. Shapr - 

This app felt like a mix between a dating app and LinkedIn. I had a success rate of about 30-40% but the connections I made didn't go beyond a few messages. It felt like an interesting way to meet people but I uninstalled it within 4 months as most conversations weren't going anywhere.

My rating - 3 out of 10

5 Ways COVID is Changing Business and People

How roles have changed during COVID. As humans, we like to predict and control. However, reality has different plans for us and currently, a lot of roles are evolving to more near term focus. This is an overview of what we're seeing -

1. Extreme focus on cash:
Finance always focused on cash but right now, the scrutiny is extreme. And rightly so.

2. Almost no long-term strategic planning:
You can't plan for the next 3-5 years when you don't know what's going to happen next month/quarter. Short-term planning is the new focus.

3. Reimaging how we work:
Not just Facebook, Shopify, Google etc. but also almost all companies are reconsidering the benefits of remote work. They may not make employees permanently remote but even moving from no WFH to WFH 2 days a week would be a big win. That's likely to have a big change in how people commute, where they live and hopefully reduce congestion in cities.

4. Focus on Retention:
A lot of high-value, cash-burning startups had an excessive focus on new sales and relegated their retention metrics. That's not smart during any period but especially now, retention is critical for survival.

5. Double duties -
Due to paused hiring, some...many people are doing the work of more than one person and it's unlikely to be for extra pay. This is not healthy in the long term, both for the people and the business. But this is where we are.

The Five Most Googled Personal Finance Questions

Here are five of the most Googled questions and my take on them.

1. How to invest money?

This is a common question and this is a good question to ask - this is the first step to attain financial freedom. Thinking and planning about investing is a good start and the common avenues for investment are stocks, bonds, commodities, savings account, property etc. As you might guess, which one to choose depends a lot on your objectives, the amount you want to invest, risk appetite etc. It's best to learn about it by educating yourself and/or consulting a Financial Planner. It's well worth the time and money.

2. How to save money for a house?
Before we get to saving money - which is a quick google search away - the better question might be why do you need a house? Where do you want it? Or how much do you want to spend on it? It's a massive investment and rather than jumping into the "how", it's well worth spending some time on thinking about the "why" and "where" which can save you a lot of time and money.

3. How do income taxes work?

First, let me get this out of the way - Doesn't matter if you're a software engineer, an accountant or a designer - you must be taught (or teach yourself) the basic of how taxes work as it affects your life. The complete answer to this would take more time than a lifetime and it'll still not be complete. However, you can and should know the basics quite quickly. Knowing your after-tax salary, marginal tax rate and tax-shield investments can help you save and spend in a smarter way which your tax accountant or a few google searches can quickly educate you about.


4. How to invest in stocks?
When I see this question, I find it a little concerning. It's great that people want to invest but most people want to get into the stock market to make a quick gain. Trying to pick stocks is extremely risky but the potential of massive and quick rewards plus the relative ease of trading stocks make them a very VERY risky adventure. Attempting to time the market and hoping to beat brokers that invest a ton of resources into building an empire is best avoided. However, you can still profit in the long-term through robo-advisors such as Welathsimple, Questwealth etc. They are much safer and more profitable and do all the work for you for a reasonable management fee which is generally no more than 0.5% in most cases.

5. How much do I need to retire?

The easy answer is - It depends on how much you want, when will you retire, where do you intend to live out your retirement, how much will you spend in retirement, your medical expenses etc. As you can see - it's pretty complicated and hinges on too many variables to get your head around. However, it's a very important question that lets you plan your path to retirement. A common rule of thumb is that you'll need about 70-75% of your pre-retirement annual income during your retirement.
Good luck!

SaaS Health During COVID

Let's examine the health and well-being of SaaS businesses during COVID.

The Good

1. Attracting more users
By providing cheaper or even free services for a few months, many SaaS companies are attracting more users than usual on their platforms.

2. Business continuity
Most SaaS companies are able to maintain a large portion of their business activities running despite COVID as Work From Home isn't a roadblock to their workforce or core business activities.

3. Growth of Slack and Zoom

Let's take two companies that have REALLY done well during this crisis.
Zoom's monthly user base has skyrocketed by 20X. Even though a lot of these are non-paying users, the revenue growth is phenomenal. The privacy issues are a concern which - if fixed - can lead to further growth and adoption.
Slack's net paying customers have shown over 80% growth in Q1 of 2020 and they continue to grow.
Moreover, these two businesses (along with Microsoft Teams and Gooogle Hangouts) are now the foundation for other businesses to function.

The Bad

1. CHURN

With budget cuts the norm in numerous companies across the globe, that will translate to software cuts in most cases. Therefore, many SaaS companies are and will experience churn and contraction in their ARR which will put immense pressure on liquidity and survival of the business.

2. Lagging effect on revenue
As most SaaS companies bill and collect money upfront, the effect of an economic downturn will be lagging and will become evident only a few months into the future.


The Ugly

Inability to claim wage subsidy

Canada Emergency Wage Subsidy (CEWS) Program provides a 75% wage subsidy to
employers that see a drop in revenue of at least 15% in March 2020 and 30% in the
following months. That is a great move from the Government to protect layoffs and
businesses. 

However, many SaaS companies would struggle to qualify as they are more likely to be hurt
by a reduction in future business than immediate revenue loss. While many firms may have
significantly more revenue than the previous year, they’ve often invested even more in people,
engineering and R&D to prepare for even more sales which are unlikely to materialize.

The Final Word - 

When the dust finally settles, the companies that have managed their cash prudently and have strong business fundamentals will be the most likely to survive. That seems pretty obvious and applies to all businesses. But sometimes the obvious is forgotten, especially in the crazy world of SaaS.

References:
1. https://seekingalpha.com/article/4336336-saas-valuations-covidminus-19-edition-zoom-is-literally-off-charts
2. https://thelogic.co/news/covid-19-roundup-counting-to-30-per-cent/?utm_source=The+Logic+Master+List&utm_campaign=d44658022a-Daily_Briefing_2020_Apr8_1&utm_medium=email&utm_term=0_325d5d3b52-d44658022a-275641105

SaaS in Five Minutes

What is a SaaS company?
A SaaS (Software as a Service) company refers to any company whose software is licensed on a subscription basis. The payment model is generally on a monthly and/or annual basis. Think Netflix, Salesforce, Square. 

Why should you care about SaaS companies?
SaaS is BIG and it's getting much BIGGER. The revenues of large SaaS companies are in the billions. Companies such as SAP, Oracle, Salesforce are some of the big names while many others are popping up each week and growing rapidly.

How do we analyze SaaS companies?
Most SaaS companies aren't analyzed like traditional businesses where the focus is on the bottom line. When it comes to startup and mid-size SaaS companies, the profits take a backseat to a few other SaaS specific Metrics.
Here are some of the most important ones - 

1. MRR (Monthly Recurring Revenue)
MRR is the monthly payments the company can expect to receive from its customers. This metric normalizes the big one-off sales and provides a baseline to measure business performance. MRR is helpful to predict cash flow, support strategic planning and enable a quick comparison with competitors.

2. CAC (Customer Acquisition Cost)

Customer Acquisition Cost is the money spent on Marketing and Sales to acquire a new customer. This metric directly influences the profit made from each customer which is critical for the growth and sustainability of a SaaS company. A low CAC allows for freeing up cash flow that can be reinvested into the business which can fuel rapid growth.

3. Churn

Knowing the rate of Churn both on a customer and on a revenue basis is critical. A higher churn means losing the upfront Marketing and Sales effort to acquire that customer. This metric is critical to help understand whether the business is sustainable

4. GDR & NDR (Gross & Net Dollar Retention)
Gross Dollar Retention refers to the extent of the MRR of the customers from a year ago that is retained and excludes any expansion of revenue for those customers. Net Dollar Retention includes Expansions. 
GDR cannot exceed 100%, unlike NDR which can.

To learn more, here are a couple of great resources:
1. https://www.forentrepreneurs.com/saas-metrics-2/
2. https://blog.hubspot.com/service/saas-metrics

4 Tips On Financial Sustainability

I'm always fascinated by how much finance affects all our lives (for better and for worse) through the decisions we make and the ones we don't. To achieve balance, something that's Sustainable is a high priority for me. And learning from my mistakes (and from others'), these are four things that differentiate the ones who achieve financial sustainability and those who wish they could.

1. Finance is less accounting, more psychology

A sweater or those cool sneakers that are 70% off are generally a trap. A lot of people know that but continue to consistently fall for it. When the wise see 70% off, they know that it is still 30% on. There's no point giving that 30% when you can give 0% and move on.
And if you think you really need it, ask yourself whether you would be willing to pay the full price for it? If yes, then you should go ahead and buy it. Else, it's something you can live without and should. Your wallet and the environment will thank you for it.

2. Your money shouldn't take a day off

You should take a vacation from time to time. But your money shouldn't. When you're chilling with Netflix, your money should be working for you. Your savings should ideally not get a single day off and those with wealth know that. Auto-deposits are one way of ensuring that your money is always making more money.

3. Buying eco-friendly-stuff doesn't prove you're pro-sustainability

Buying pins and badges and even eco-friendly products aren't the best way to show your support for the cause. Not buying is the best way. Most eco-friendly products have to be manufactured, shipped and finally sold. Don't buy them, that's much better.
However, when you need to buy something that you truly need - and I hope your definition is quite strict for this - then look for an eco-friendly option. Else, just enjoy a walk in nature rather than in a store.

4. Financial sustainability isn't tough, perseverance is 

This is more of a philosophy than a specific trick but it's the most important. Youtube, online articles, your family and friends can all teach you enough skills to lead a pretty financially savvy and sustainable life.
That's the easy bit.
The real challenge and where a lot of people struggle is the unwillingness to consistently build, track and follow their goals. Don't expect improvements in a few months because even the most skilled need time to build wealth and financial sustainability.
Keep at it and you will get there.