Inside BMG – tech talk with Sebastian Hentzschel

Sebastian is Group CTO and EVP of Royalty Processing Shared Services for BMG. The Bertelsmann’s music publishing and recorded music division is headquartered in Berlin and operates in all major music markets in the world. In 2018 it turned around 545 Million Euro according to Wikipedia.

I met Sebastian not so long ago and we immediately had a click – same old, same old – technology, startups, company culture. I thought would be cool to get a sneak peak at BMG’s tech stack and here is the result – my first interview of this kind.

Sebastian, what is your technology stack?

Our primary stack is AngularJS, Java Spring, Elastic, SQL Server. The other two stacks we have is .NET for one of our key data pipelines on top of MSBI, and Hadoop/Spark for our royalty engine and data analytics platform.

What products do you work on?

We’re currently actively working on roughly 15 products. The most prominent is MyBMG, a web and mobile app our clients can use to see their realtime income earned globally from their music and can run data analytics on it. Other products include BMG’s global repertoire licensing platform our teams worldwide use for finding, pitching, quoting and licensing our 2m+ music rights to business clients in the film, TV, advertising and gaming industry. Lastly, we’re currently expanding our rights and royalties platform across all business segments, moving from traditional to big data technology for better scalability.

Which one are you most proud of? Why?

I’m proud of us as a company. We’ve built a business from the ground up, starting in 2008 with minimal revenue and three people in Berlin and growing to more than half a billion in revenues and 800+ people worldwide.

From a tech perspective, the business of music and music rights management is a very data intensive business. We started out with basic off the shelf software and quickly had to build a new technology platform from the ground up while not risking business continuity. We’ve hit new, growth driven inflection points almost every year, and we’ve been able to get through them and come out better on the other end. Also, we’ve integrated acquired companies globally very tightly on to our platform, which is something that wasn’t easy but we’re clearly benefiting from today.

Just curious – are you a Mac or Windows person?

At home I use a Mac and a ChromeBook. At work I need my Windows, mainly for its keyboard shortcuts.

Which apps you use daily?

Let me check … FT, Koyfin.com, Whatsapp, Evernote, Headspace, Teams, Jira, Confluence, Trello…  well, and Outlook & Excel, of course.

Let’s go back to tech. What is your development process like?

Our application management and product management teams are internal, software engineers are outsourced with a handful of very close development partners of ours. Most of our products are developed in agile mode. As a result of outsourcing, we have a proxy product owner on the vendor side who takes on the agile process ownership and closely collaborates with our internal product owner. Agile doesn’t fit for all projects, however. We run our royalty platform development project in waterfall with monthly releases. For us, this works better for the type of projects with zero acceptable margin of error.

Tell me about your team. What does your team structure look like?

Teams are organized under our VP of applications & infrastructure, VP of technology product, head of data analytics, as well as three regional heads of workplace services for the US/Latam, UK and Europe & Australia. Software engineers, data center infrastructure management, and data engineers are all outsourced to selected vendors, who we work together very closely. We intend to keep the relationships with those vendors consistent so as to leverage learning curves, knowledge and efficiencies. But we do retain a healthy dose of competition between them.

What is your preferred development mix (e.g. in-house, nearshore or offshore)?

Again it really depends. We operate a mix of onsite and offshore. We chose to outsource development primarily for reasons of scalability. We’ve been needing to spin up, or ramp down, new teams rather swiftly. For example, when we started to replatform our royalty engine, we needed a big data team quickly. Our partner was able to put together that team within a month. What works best though is when developers or business analysts are co-located. On the flip side, the higher the time zone difference between your product/business and development teams, the more difficult collaboration gets. Given that offshoring usually involves outsourcing to companies that have their cultural roots outside of European or Anglo-American culture, projects success requires people who understand both cultures very well and can translate between them.

What I found important to look for in a vendor is that they bring their own set of processes, best practices and innovation to the table. That’s a huge value added.

How do your scale your ops when you have to?

With the growth we’ve had as a company, capacity planning has been a challenge with data volumes growing so quickly. Initially we’ve scaled our data processing infrastructure. We’ve now moved to Hadoop/Spark based data processing. The next evolution of this is moving that to cloud platforms. Technological progress has been on our side 😉

How do you hire? Do you do brainteasers or coding challenges?

I’m trying to maintain a comfortable atmosphere so the candidate has enough space to present him or herself. I may turn up the heat a little should I notice the candidate is vague or evasive. Yes, we do case studies and brainteasers. I want to understand how a candidate thinks, the cognitive avenues they’re taking and how they manage challenges in a high-stake situation. I’ve had candidates really stepping up in these situations, or falter, not because they couldn’t find the answer right away but they wouldn’t engage fully.

What makes a candidate stand out?

For the roles we hire for, I am looking for technical experience and intuition, as well as empathy and the ability to make human connections. In product management, the ability to both be empathetic and structured is important for me. In the application dev and ops space I look for a sense of relentlessness when it comes to driving constant improvement. In any case, I look for authenticity and the candidates who stand out are those who are strong in what they know and do, but are humble at the same time.

Let’s talk architecture. How do you see your architecture in 2-3 years?

We’ve just started moving our data processing & analytics platform to PaaS (platform as a service) of one of the large cloud providers. I am very thrilled about the ability to scale up and down quickly as required by business. We are moving nearly all remaining applications to cloud services, utilizing PaaS where possible. For all commodity software we are, or will be, using SaaS offerings. Essentially we’re trying to move up the stack as much as possible to keep infrastructure management lean.

Do you measure speed and quality of delivery, and how?

What’s most important to me is that the entire team – business, business owner, product owner, proxy PO and developers – find their own groove and iterate on that. That’s the most sustainable and ultimately fastest model.

If a feature can be implemented either quick and dirty, or slow and perfect, what would you pick?

It depends. For client royalty obligation calculation it’s clearly “slow and perfect”. In other instances, we’re trying to go live quickly with a minimal viable product wherever possible. It does however depend on the readiness and willingness of the respective business function to engage with that concept.

Do you have dashboard and what metrics do you track?

Yes. My weekly capex investment and operational spend. There’s no week that goes by without me looking at it. The non-financial figures I look at are our global incident burndown as an indicator for technology health and a supply and demand balance. I’ll be introducing a weekly team barometer shortly to ensure team health for both projects and operations – previously our team was much smaller and I was able to speak with almost everyone regularly. This has changed.

What mega trends already influence your products? What is coming next?

A few things. A focus on holistic customer experience is something that influences more and more of our products, even internal ones. Big data technology is no longer a strategic vision but operational necessity. My approach is to utilize all data available and automate reporting and data analysis. We’ve also started integrating machine learning in the first product of ours. Not all problems are machine-learning problems but we have identified a few areas in front and back office that would benefit from this technology. Blockchain is something we’re looking into and experimenting with but given what we know it’s a technology that may not have the impact it has long been proclaimed it would have.

Any question I should ask you?

When is our next lunch?

Sure thing, it was a pleasure meeting you and hearing your thoughts. Looking forward to see you soon.

When is the last time you reflected on motivation and how to build lasting perfomance in your team?

Over the last years I have repeatedly encountered 3 words defining the current notion for motivation: 1. Autonomy, 2. Mastery, 3. Purpose. This notion has often appeared in presentations about tech culture, notably at Zalando (thanks Eric Bowman) but also often emerges in company cultures such as the one at Solvemate (thanks Christian Blomberg).

So I carried the notion with me till I felt urgency to go beyound the simple words. Ultimately I landed at presumably the source of it: the book “Drive” by Daniel Pink.

Without telling you too much and spoiling the read here are some of my takeaways for motivation:

  • Motivation 2.0 in the form of carrot and stick (rewards based) is inefficient and unpredicatable.
  • Motivation 3.0 defined by the 3 aforementioned words offers the ruleset for maintaining performance and job satisfaction of a present day person.
    • Meaning of Autonomy – to hold your life/job with your hands and direct it the way you deem necessary.
    • Meaning of Mastery – to constantly learn and improve on a subject that matters.
    • Meaning of Purpose – to dedicate to something bigger than our own self.
  • Motivation 3.0 seems to almost always outeprform Motivation 2.0. Even in the short term.
  • FedEx days at Atlassian. Nowadays called ShipIt this is a day long retreat for evey engineer in the company to create a new solution or fix something that annoys them. Execution matters but best idea wins.
  • The concept of ROWE – results only work environment, or else said no time keeping (check in/out).
  • Super clear and stripped down to the basics insights from Jim Collins (by the way also a great author) about self-motivation – 4 simple rules how to instigate such culture.

On the matter of ROWE quite curious how many companies run this model, it seems to be getting good traction in creative industries. Yet, wondering whether teams do not alienated by not spending time together.

Anyway, I highly recommend this book and plan to revert to it from time to time. Have you read it and what do you think?

IdeaFox – an innovation management platform for teams to co-create and implement solutions

In the process of building new digital business models I often revert to the business canvas template and generate a ton of MS Word/Excel docs and series of email threads in that process.

IdeaFox seems to deal with all that. I knew about the platform quite some years ago but got to lay my hands on it just recently (should have done earlier though). It has managed to put away most of the aforementioned overboard and gave quite an orderly look to my creative chaos.

IdeaFox is cloud based and covers all steps from collective ideation, co-creation and evaluation, to idea realization. It is simple and easy to use platform. I started a new project within minutes and is quite intuitive (whoever knows me, would sigh how rarely I actually say this).

But just in case you need a tutorial, here is one.

It can actually do more than I do with it. IdeaFox allows idea challenges, idea realization in a stage gate processes, or collection of best practices.

Typical users seems to be innovation and digitization teams (like I am), but also teams collecting ideas for operational improvements.

In sum, IdeaFox solves three needs of organizations that want to get better:

  • Get better solutions by efficiently connecting a broad group of participants
  • Improve realization of ideas and get up to 20% quicker (claim by IdeaFox)
  • Increase employee engagement and foster transparent communication

I also tend to know the two lovely people behind the platform so this is yet another argument for me to give IdeaFox a try if you need such a platform.

Meet Dörte and Aron

Looking forward to your feedback and please share your impressions.

If you want to learn more about IdeaFox, check out ideafox.io or follow them on LinkedIn or FB.

You can find the rest of my articles either on LinkedIn or on my website: https://starkfounders.com. Enjoy!

The perfect storm in transportation is near and … not just there

 

Not a big fan of breaking headlines but certain technology highlights in the last years are starting to connect better then ever before. And it seems that visionaries and industry finally start to agree. We are witnessing major trends that will re-shape whole industries in a shorter period that we have ever experienced before.

I am pointing at trends in transportation such as::

  • Carsharing
  • Electric vehicles
  • Autonomous driving
  • Machine learning

Carsharing has taken the market by surprise and is becoming more popular by the day. European providers like DriveNow and Car2Go address the daily transportation needs in the city while Drivy, Croove and SnappCar are taking a share from traditional car rental by using privately owned cars. These companies effectively reduce the number of cars on the streets, remove the burden of car maintenance and undermine the desire to invest 30K+ in buying a car. The idea is so good that carsharing is being eyed by established players such as EasyGroup, the company tasked to expand the EasyJet empire, or Europcar, the 2nd biggest European car rental company (via its investment arm).

Takeaway: expect less cars on the streets in the long term, less car sales and revenue from spare parts for car manufacturers.

Electric cars are around us and whoever has tried the i series BMW or Tesla, knows the driving experience if not better is at least at par with current cars. And the acceleration is unbeatable so I am definitely in :). But more importantly electric cars are simple, they have 18x less moving parts than a combustion engine car and thus need close to zero maintenance. And even if needed, I am in no doubt repairs will be done by a robot in the very near term. A major concern before, recharging, is becoming significantly less of a concern with battery life getting longer and charging stations growing in numbers.

The advantages of electric cars and wide acceptance of the public are being unmistakably recognised by car makers such as Daimler which recently announced its own Gigafactory. It came as a result of the acceleration of its electric car plans and backed by $11 bn. KUDOs should go also to Tesla which has pushed the whole car maker industry to move faster and bolder.

Takeaway: expect less demand for oil and gas, increasing uncertainty for energy companies, less revenue from spare parts for car manufacturers, job losses in car maintenance.

Autonomous driving and machine learning are no longer an innovation. Self driving cars are around us, make total sense and are here to stay. Machine learning as one of the ingredients of autonomous driving is being adopted so fast that it will soon be considered a commodity.  Autonomous driving makes our roads safer, eases traffic and saves us tons of time. It is good not only for private use but also in public transport and moving goods. There are already autonomous driving luxury cars and truck trains on our highways but have you thought about autonomous driving buses? Because it won’t be long before you find yourself on one of those.

Takeaway: expect job losses in transportation e.g. professional drivers, even greater increase in efficiency in transportation and car sharing, further reduction of vehicles on the streets.

So what would our life look like in less than 10 years? I think something like this.

The rosy part: Commute in cities either by car, bus or rail will be driverless. Most vehicles will be electric. Very few people will own a car. The fee from A to B will vary based on provider, vehicle brand, transportation experience e.g. the latest interior and entertainment Audi concept. It might even happen that cities abandon public transport and outsource it to private providers that offer autonomous fleets on demand. These fleets might well optimise the routes so that they do not follow a predefined route but drive commuters to their door.

Car manufactures will become vertically integrated fleet manufacturers and managers. New type of vehicles will emerge, many models will become obsolete and will be abandoned.

Technology providers like Google, Uber and other technology-first giants will enter the transportation sector, and will have an edge on autonomous driving technology over car manufacturers.

The not so rosy part: Professional drivers, mechanics, petrol station workers will become obsolete. Smaller car manufacturers will fight for survival, some brands might disappear. Garages will disappear. Energy companies will be seriously hit from lower than expected demand for oil and gas as well as investments in oil and gas exploration.

And to ease a bit my apocalyptic predictions, stay tuned for the next blog post about my exciting experience at the Founders Hack event in the city of Bielefeld.

Easter blogging – Blockchain in examples

After the intro into the world of bitcoin and blockchain and then showing the link to financial services, now is (finally) time for my last post in the series and this time about real world applications of blockchain. Luckily the long wait till I finally write it down, came with new findings so it was worth the extra time.

 

If you remember some of the prominent use cases for blockchain were:

  • Identity – blockchain allows to safely store, confirm and distribute personal data which is applicable for KYC.
  • Registry – blockchain could keep track of records of ownership, enable exchange of ownership of physical assets for digital ones, or just store information for public or permissioned access.
  • Smart contracts – blockchain can create and execute autonomously financial contracts e.g. payouts.

And here are some interesting services that I found with time:

  • Notary services are offered by Bitproof, Blocksign, Stampd and others. In the core of the services, a digital version of a signed document is uploaded and the parties share their acknowledgement in the form of a video (or other means). This comes at a 99% less cost than a traditional service and goes at a price of around 10 cents (or less) in Stampd. Ironically, I have stored the links for this article for some months and the first 2 did not open today. Not sure if they are still live, and in addition a recent article cast doubt on the readiness of such solutions as they do not seem to ensure that it was you who signed the document and that all parties did so voluntarily.
  • KYC via ShoCard. ShoCard offers a digital identity solution that records your personal information and stores it on your mobile phone while keeping a hash of it on their servers. This allows to use your info in numerous places without having to repeatedly provide proof that this is you and you provide the correct information as it was already verified once. This is quite useful for speeding up the KYC procedure for financial institutions but can also go towards replacing your driving license with a digital proof and logging into websites with a fingerprint from your phone.
  • Peer to peer everything – Arcade City is the “Black Market” Uber. It came to light after Uber and Lyft had to shut down operations in Austin, Texas. The response from the community was to set up a FB group where rides are requested and drivers pick them up. Arcade City aims to build on this momentum and remove the middleman in ride-sharing by connecting riders and drivers directly by using blockchain. It wants to take a small cut of payments once the company finished building its app. The company has been very controversial as it seems to have missed on promises and features but the idea is mindblowing.
  • Decentralized asset exchanges and marketplaces with notable examples such as BitStampBitShares, RMG Royal Mint and BitBond. BitShares claims (full source):

a high-performance decentralized exchange, with all the features you would expect in a trading platform. It can handle the trading volume of the NASDAQ, while settling orders the second you submit them.

Decentralization gives BitShares robustness against failure. When a centralized exchange is compromised, millions of dollars and thousands of users are impacted all at once. In a decentralized system, any attack or failure impacts only a single user and their funds. Users are in control of their own security, which can be much better than any centralized entity.

With BitShares your trades execute in seconds, just like any centralized website interface. Unlike centralized exchanges, there can be no high-frequency trading, front running, or hidden orders. This puts all traders on a level playing field.

  • Distributed ledger as a platform – projects like Corda, Hyperledger Project and Ethereum have built the foundation for execution of smart contracts. Such platforms standardise the way to store, manage and automate legal agreements between businesses. For example, Corda is being developed by R3, a consortium of over 70 of the world’s largest financial institutions. Their mission is “the establishment of an open, enterprise-grade, shared platform to record financial events and execute smart contract logic” (source: Corda website).

Some of the listed apps and platforms are growing pretty fast and experiencing wide industry acceptance (e.g. Corda, Ethereum), others seem to be still defining their value proposition and in development. But all in all the blockchain market evolves with more services, platforms and currencies starting every year, and blockchain is here to stay.

And for those celebrating Easter. It’s a time for eating all the chocolate you can find with complete impunity!

Have a delicious Easter with your beloved ones!!!