Tech IT Easy » Europe

Overpopulation in Facebook

Kari Silvennoinen — Wed, 29 Dec 2010 09:44:02 +0000

To fill my quota of social media posts for the year, here’s a post about Facebook’s user base and real-world statistics.

I was inspired by a post in a Finnish blog on social media about how the Facebook’s penetration rate in certain Finnish age groups is way over 100%. From its comments, I found that similar analysis was already done for UK and US with same results and with some explanation for the reasons. However, with the amazing Eurostat and Socialbakers‘ Facebook data, we can do this stuff for many other countries with interesting results! (To save time, I used Socialbakers data which is grouped by age and so doesn’t give as accurate results as going manually through Facebook’s advertisement tool would.)

The interesting bit is that there are big differences between the European countries. The Nordics are similar to UK and US, but that’s about it.

Facebook penetration rates by age group in Europe (click to enlarge)

(You can download the Excel sheet from here)

To solve the problem of above 100% coverage in age groups, there are two explanations that first come to mind and were explored in the both previous blog posts. The first one is Facebook’s age limit, which does not allow people below 13 to join Facebook. The obvious workaround is to round your age up to get in. The other explanation are the people hitting mid-life crisis and rounding their age down. I’m quite the combination of these two explains most of the bulge in the 18-24 age group.

At a glance, it would seem that the 18-24 bulge depends on the overall penetration rate. It seems that once the penetration goes high enough (say, 30%), it basically means that your older siblings’ got their Facebook profiles as well as pretty much everyone else in your real-life social network who’s above 13, and naturally you want it too. Doesn’t take long before someone figures out that the age check is easy to bypass, and like everything that’s age-restricted at that age (like 18+ movies and games) it becomes cool and once it gathers some critical mass, the social norm becomes to fake your age so that you can be on Facebook with your classmates and so on. However, why isn’t this phenomenon more global but just restricted to countries with high penetration rate? There are advertisements in pretty much all media telling how this and that is on Facebook and almost every new electronic device can access Facebook … and yet you, at 12, are forbidden from where everyone else apparently is.

As for other reasons for these age groups going over 100%, there are many. One cause is plain and simple fake profiles (for fun or spam), but I would have assumed young people are equally dorks all around Europe. One of the bigger reasons is business accounts. Then there are the duplicate profiles some people have for the multiple identities they have and want to keep separate. Also, as a pet owner I know some people made profiles for their pets but this can’t really explain the discrepancy at all. The need for sepearate accounts is now alleviated by the (not so) new Pages, which are much more suitable for some of the use cases which previously “required” a duplicate account (against Facebook’s terms of service). However, none of these can explain the tens of thousands of mis-aged accounts, but explain why Facebook has been pushing for people to use Pages instead (and why your interactions with a Page are almost at par with an another Account).

However, it would much interesting to know what explains the differences between the countries. My hypothesis is that the bulge at 18-24 correlates with high overall penetration rate (ie. <13 year olds feel the social pressure to join, faking their age) and high mobile usage in teen age groups. This overcoverage seems to happen when the overall penetration rate is over 30%. One explanation might be that in countries where broadband / mobile phones / social networks are more of a norm, people have started to have fun with Facebook whereas in places where internet usage is scarce, people take it more seriously.

I would have expected the Dutch to be similar to the Nordics, because they do share many other demographical features. Like many other countries, there’s a national Facebook equivalent in the Netherlands, Hyves. I’ve beent old it was very popular in the past, but a lot of Dutch people are migrating to Facebook, the one true social network. This happened in Finland as well, where IRC-galleria has been declining in the recent past due to the “old” generation of teen users “upgrading” to Facebook and the “new” potential teen population jumping directly to Facebook. Another question mark to me is Estonia, where I would have imagined to see similar results as in the Nordics.

On the other hand, both the German- and Russian-speaking world seem to have quite strong “local” social networks. The idea that the language is the biggest barrier between social networks is quite interesting, but I don’t have any evidence for it. The guys at Xiha probably know better. I wouldn’t be surprised if in the near future Facebook borrows ideas from Xiha in their quest to world domination; today Facebook is still very much a product of American culture.

Of course, comparing Facebook’s data against population demographics does not give you any indication what the actual penetration rate is. A much better approach, which was used in the Finnish study was to compare the Facebook penetration rates toh a national survey on social media use by age groups (in Finnish, but here’s a summary in English). The results of this number-crunching was that there can be as many as 200 to 300 thousand accounts with a “wrong” age. Or put another way, that’s more than 10% of Finnish Facebook users.

For further study, Eurostat does offer figures on many internet-related demographics, including “Individuals using the Internet for uploading self-created content to any website to be shared” and “Individuals regularly using the Internet” but these seemed not to be grouped by age, but could be used to better assess the situation. But so what? As baekdal put it in his analysis, age is just a number and “if a person who is really 34 is indicating that she is only 24, you must threat her as a 24 your old person. That’s how old she feels, and that is the only thing you need to know.”

Naturally, the empricial evidence of his users’ behavior goes a bit against Zuckerberg’s idea of your Facebook identity being your only one. As the old saying goes, on the internet, no-one knows you’re a dog.

Thoughts on Intellectual Property and dealing with everything else that is out there

Vincent van Wylick — Fri, 30 Jul 2010 10:05:59 +0000

We’ve talked to a number of investor these last months and I can classify their questions into three categories:

Intellectual Property Protection (IPP)
Revenues
and Operations

Revenues is a straightforward concept and reflects market potential, market share, and business-model. Operations can also mean business-model as that clearly affects your operations, it also concerns the team, and it very much concerns *the last mile*—a very detailed understanding of how your product comes of the “factory line” and goes into a customers hands (every step and every screw has to be planned out). And IPP, well IPP is something special.

Intellectual Property Protection refers to legal and other ways that you protect the innovation and knowledge that is built within your company and its people. It is not as straightforward as simply taking out a patent, copyright, or trademark, though those are usually the first avenues that investors will pursue when talking to you about IP. IPP can just as much come from keeping information tacit—inside the heads of your team—, developing systems that spread an innovation across many parts—e.g. the way technology companies prevent copying from factories they outsource production to, by only giving them parts to produce, but not the whole—, another systematic answer could be deep vertical integration, which ensures a higher quality of products and services than can be replicated by vertically smaller competitors (a strategy pursued by Apple and Starbucks), and last but not least: speed—in some industries it pays to just scale very quickly, rather than build a protective base around IP (a contrast between e.g. web and medicine).

But let’s get real for a second. You’re an inventor, you developed something new. The most obvious path to pursue is a patent. The first issue is cost, because taking out a patent is not cheap. Basically, by filing a patent in your country, you can protect yourself for a while because there is a period, 1-2 years, I believe, where you are filing it and it can serve as a type of legal instrument to prevent other companies from filing a similar patent. But in the end, you have to shell out maybe €5000 per country to protect your invention internationally—and those costs do not cover the legal cost or protecting a patent once it’s being breached. Let’s get real x 2: you’re a startup and while your technology may be innovative, it may not be what the market needs (which can relate to actual taste, but also to cost, to regulatory issues, etc.) and that means that your patent, if you decide to take it out, may not be worth squat. Let’s get real x 3: your invention may not be unique, at least not in its current form, and pursuing a patent in that case is not even feasible.

So practically speaking, what do you do? Just to be clear, I don’t have the final answer to this, though it is something I am constantly thinking about as a potential risk in our, a technology startup. So my interpretation and approach are entirely my own, but I am writing this to start a discussion more than to give the final answer.

The answer to me is all about strategy. IP protection has to make sense in the context of a longer term business strategy, long term meaning to me longer than 2 years and preferably longer than 5 (if you have an actual patent and it has market value as well, you have over a decade of protection). And IP, just like a business, is something that can be split up to cover different areas related to supply, to the manufacturing, to the end-product, to the service, etc. So the more broad and comprehensive your way of protecting your intellectual value is, the less it can actually be replicated by your competitors.

All IP concerns aside, it is sometimes of benefit to not protect the whole value chain. This is true in our business, which I will write about some other time, where we can split up our technology into core-components that are integrated into new solutions which act as a platform for more solutions. Locking off that whole chain is perhaps of some benefit, but in some ways we would like to have people innovate in their respective areas and for us to focus on developing better products out of that. My point is that IP protection should be seen as something that can be shifted to those areas most critical to your business and that new development in your industry is not necessarily something to be scared of. In the end, we are in the product business and if we can produce superior solutions for customers that outweighs comprehensive IP solutions.

So the conclusion is, even if you are developing a product that is not entirely novel, there are places in the value chain where you can still develop an IP solution. And if you are developing novel solution, it has advantages on both the supply and the market side, to not make your IP too restrictive and thus diminish your product potential.

On making Global Package Delivery a little better [Weekend Ramblings]

Vincent van Wylick — Sat, 08 May 2010 13:12:39 +0000

I’m currently on a tirade against two things. Global package delivery, which, every single time, seem to have me waste my time waiting for a doorbell to ring. And software-updates, which for some reason are a pretty fragmented affair.

OK, there’s nothing to do about software updates and I already give up.

Global package delivery, on the other hand… UPS was founded in 1907. That’s right, gentlemen & ladies, it is over ONE ZERO ZERO (purposefully emphasised) years old! That means that people have been carrying UPS parcels around on horses, then on Fords, on ships, on aeroplanes, and will most likely carry them to space also. Unlike regular mail, the Package Industry is here to stay as well, ladies and gentlemen, all thanks to you for ordering from places like Amazon every single day.

Now, I don’t mean to pick on UPS. I actually have a problem with FEDEX (founded 1973) this week and with DHL (a German company, founded 1969), both of which like telling me things on their website that aren’t true, or are true, but so incredibly late to publish that truth that it’s just a false truth.

Dear companies that I just mentioned: we are in the age of real-time. When my best friends go to the bathroom, I know about it 5 min. before they even think about it, that’s how quick Twitter is. Sadly, that doesn’t bring a hot new gadget into my life, like your great service does. I appreciate your service, it allows me to be lazy and order to Visa’s delight. But it’s meant to be a service of convenience, and I don’t consider having to drool over my doorbell-phone by any kind of definition, “a convenience.”

Here’s what happened with DHL: Package shipped on the 6th out of Germany. On the 7th, at 4:30 a.m., package left Germany heading for the Netherlands. I sent them a mail asking whether if it doesn’t arrive today, they ship on the weekends. No reply! At 20:00, I found out, that package has arrived for sorting at a sorting centre at 17:42. I decide to call the next day to ask whether they ship on the weekends. The kind person at DHL the Netherlands informs me that a. he has no idea where my package is and b. they do not ship on the weekends. 2 hours later, the doorbell rings. It’s the mailman, who works for TNT (the Dutch equivalent to DHL) with the package from DHL. Status on the website on the 8th: “7th of May, package has arrived for sorting at a sorting centre at 17:42.”

Here’s what happened with FEDEX: Package shipped on the 5th from the US. Paris then somewhere in the Netherlands on the 6th. Estimated delivery: on the 7th at 6 p,m. I’m home at 3:30 p.m. At 20:00 I get a message that FEDEX passed by my house at 14:55 p.m. and no one was home. Status: sadly FEDEX does not receive phone-calls on the weekend.

We need a change, we need that thing you do with the tracing, not to be restricted to when it arrives in parcel sorting centre 42. We need it to have an RFID chip in the parcel, which is connected to a GPS device in the truck, which at all times tells a satellite to send me a tweet of where exactly you are at what given time. And when I’m not home, I can tweet back to said truck to give notice, to save fuel, to save the planet, and/or to change the address to my work-address. Saves your time and mine and the planet’s.

This is not rocket-science. GPS exists (globally since 2000), RFID exists (required by Wal-Mart since 2005), real-time web exists (Twitter since 2006). Yet for some reason, in 2010, I still have to wait 10 hours for an update about something REAL & RELEVANT that happened 10 hours ago. Sigh.

OK, all ranted out now. Now go fix.

Bit Bang – Rays to the Future now online

Kari Silvennoinen — Tue, 23 Mar 2010 07:45:27 +0000

A quick note letting you know that the book I was involved with is now available online for free as a downloadable PDF.

If you’re interested in what’s in the pipeline technology-wise in the coming decades be sure to read this report. As previously mentioned, this report is a compilation of articles written by the PhD students of Aalto University (previously Helsinki School of Economics, Helsinki University of Technology and University of Art and Design Helsinki).

The topics include

Future of IT and hardware
Future of Telecommunication and Networks
Printed electronics and nanotechnology
Future of Media
Future of Living
Future of Globalization
Robotics and artificial intelligence

Also, in the appendix is a small diary of our meetings in Silicon Valley.

Normally these kind of reports would cost thousand of euros, but thanks to the Finnish educational system you can get the report right here for free (PDF; 2MB).

E’ship diary part 3: Why I don’t like the term ‘entrepreneurship’

Vincent van Wylick — Fri, 19 Feb 2010 12:00:56 +0000

Both ‘startup’ and ‘entrepreneur’ are terms that immediately evoke an often false reaction from an audience and I would personally prefer not to describe my work using those words. In the following post, I write about three associations in regards to entrepreneurship, one positive, one negative, both somewhat false, and one what I see entrepreneurship as really: just a job. As usual, these diary posts, which I try to write in a short amount of time, are produced with minimal editing. I hope it makes sense. All my entrepreneurial diary posts can be followed under the tag ‘Vincent’s eDiary.’ I don’t write about what we do as a company on purpose, but you can always ask in the comments or via the email address on the right.

The popular associations
The word entrepreneur has two popular and a third upcoming association. One association is negative, that of a risk-taker and in some ways a loser—this would be more in a European context where job-security is highly valued. The other is positive, that of a potential Bill Gates or Steve Jobs, i.e. the smart entrepreneur who sees a big opportunity and has the drive, intelligence, and access to other resources to make it very big.

Of these two, the latter is what we are all aiming for, but realistically that applies to less than 1% of entrepreneurs today (using the very broad definition of someone that starts anything from 1-man webdesign company to an ambitious cure for cancer). The first association is also a misunderstanding of entrepreneurship, as entrepreneurs are not blind risk-takers, or at least they shouldn’t be. I would say and hope that it applies to a minority of entrepreneurs also.

The third association: a career-choice
The third association is that of an upcoming trend: entrepreneurship as simply a job. You’ll find plenty of job-adverts with “entrepreneurial attitude a plus” or similar in the job-description, a term I hate just as much as the often mis-used “business development,” standing for just B2B sales.

Added to the job-description part comes that there are plenty of entrepreneurial courses and full academic programmes available to the public, one of which I enjoyed, though I know from personal experience that that doesn’t make a person an entrepreneur.

A third factor contributing to the ‘entrepreneurship is a job’ association is easier access to the marketplace. I’ve had some online discussions with Cecil Dijoux on this blog about today’s technology culture in the context of enterprise software development, and there is as much a democratisation of software-/web-ware development, as there is of other increasingly “low-tech” industries. (As a side note: My definition of low-tech is a technology something has very low barriers to developing it.).

I think that the abundance of resources (not just) in regards to programming, to very well developed (internet) distribution methods for getting products, tangible or intangible, out to customers, as well as more-and-more programmes for funding/assisting startups, means that entrepreneurs have access to a better developed funnel where it comes to their profession of gathering resources and marketing their products.

That doesn’t make it easy, and actually brings other challenges like being one tree in a very large forest, but it does mean that it can be seen as a type of job.

Now, what is there not to like about the word ‘entrepreneurship’?
Maybe it’s a personal thing, but I feel very uncomfortable telling people I meet that I’m an entrepreneur. One, I do see it like a job, a job that I have to do well, and nothing special really. The term ‘entrepreneurship’ makes it sound fancy, which it is not. Two, I’m a European and I do feel the same association that many Europeans have to the word, which is that it’s “less than a real job.” Rationally, I don’t think that’s true, but emotionally I have found myself feeling the following initial reaction more than once when someone comes up to me and describes himself as an entrepreneur:

“Get a job, you hippie!”

Add to this that a startup is not a company until it makes money, and an entrepreneur is not an entrepreneur until he makes money doing what he does.

So I think the term ‘entrepreneurship’ is glorified, perhaps invented to make entrepreneurs feel like they’re doing something special, same as the term ‘Artist’ or ‘Inventor.’ Art isn’t art unless the audience considers it so, and people have invented plenty of mousetraps that are now collecting dust in a garage somewhere.

Suggest something new please
I’d like a new term for what I do and maybe you can suggest one. It should perhaps be related to a startup, which immediately summarises what is happening: A company that is starting up and isn’t there where it wants and needs to be yet.

The problem is that an entrepreneur is not always in the same class as a startup. He can be 50 years old and have a long and successful career behind him. Would you call him a “starter,” a term often used for people fresh out of college applying for a job at Consultant X or Multinational Y? Generally, entrepreneurs are responsible for the activities that happen in a startup in order to make it a success. Their chances of success increase if they have prior experience, resources, and networks to build upon, that make it easier to access the three pillars of “starting up,” as I’ve summarised in the picture above.

In regards to the above, I personally like to describe my work as “I’m running a small company and we’re developing a new product X,” but that is also a bit of a mouthful.

The other side of the coin is that entrepreneurs are in (desperate) need of marketing, where glorification does play a part. I read somewhere that entrepreneurship can be described as the process of developing something irregardless of resources currently in possession. That suggests a pitch is necessary, and perhaps already being termed an entrepreneur helps getting a foot in the door. I doubt it and it would personally bother me if that’s all it took, but I’m smart enough to realise that we “entrepreneurs” need to do whatever it takes to acquire resources, as long as it fits our code of ethics of course.

So, entrepreneurship, yes or no? I don’t like the term, but I may be stuck with it. If I come up with something more apt, I’ll let you know. And same for you please!

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Must Use Twitter Tools for Corporate Users

Anand — Mon, 11 Jan 2010 17:32:24 +0000

If you are new to Twitter then it’s easy to get confused with so many twitter applications out there. Further, if you are a business user than you may have no time to do research on the applications. We really can’t deny the fact that businesses are testing out Twitter as part of their steps into the social media landscape. You can say it’s a stupid application, that no business gets done there, but there are too many of us (including me) that can disagree and point out business value. I used many of the tools available in internet to manage my old twitter account.

With this idea behind I am trying to categorize the tools which may be helpful for our readers to use according to their needs. Here are some twitter tools along with the snapshots which impressed me and according to me will be easy to use even for a newbie to promote his/her business .

Buzzom Premium http://premium.buzzom.com/

Buzzom Premium is very newly launched application which allows you to focus in your twitter growth. It has many functions to choose from but more essentially its spam filter, scheduler and monitor. These are the three basic functions over which the application is build.

Direct Message is full of SPAM and it is almost unusable now. Thanks to various gaming applications and welcome or thank you messages. I like Buzzom SPAM filtering for DM. It actually makes this feature usable.

Buzzom also provides a great way to visualize your Twitter growth and network’s activity such as tweets, Retweets etc. The service also has the auto grow and follow system to increase your network’s size. Scheduler allows you to schedule tweets at certain time and control it by specifying its repeat cycle for future tweets.

2. Twonvert http://www.twonvert.com/

Twitter is all about 140 characters of words. People are already got use to expressing themselves in 140 characters with shorthand notation and some ingenuity. But that takes time and when you are in hurry, its more frustrating. With Twonvert you can easily convert your tweets into SMS shorthand language and allows you to say more with less characters!

3. Wefollow http://wefollow.com/

WeFollow is the directory of all the people in the Twitter, who have added themselves to the list. It provides an easy way for you to find relevant people in twitter and connect with them. You can find all short of people from celebrity to technologist in the list. WeFollow.com helps you use your time efficiently by making your people search easy and fast.

4. Twitscoop http://www.twitscoop.com/

Twitscoop is the service which lets you search the real-time trend in the twitter. Twitscoop uses the dynamic tag cloud to show the most talked topic in an interactive way. You can also search for related keyword and finds its popularity in the Twitter network.

Overall, it allows users to “Mine the thought stream” provided by Twitter. Twitscoop’s algorithm cuts every English non-spam tweets into pieces (“tags”), and ranks them by how frequently they are used versus normal usage. Twitscoop can essentially be described as your real-time web’s monitor.

5. Twittercal http://twittercal.com/

Managing your calendar is very tedious. You may have to enter new task on the go and may not have access to web version of Google calendar. Now you can do that easily via Twitter, you just have to send a small tweet and it gets added to your Google Calendar.

It’s a free service that connects your Twitter account to your Google Calendar. Add events in a snap from your favorite Twitter client. Follow the 5 steps procedure to get started.

6. Socialtoo http://www.socialtoo.com/

Socialtoo is a paid service that lets you manage your twitter account by autofollow and unfollow tool. It also provides you basic statistics about your followers count and tweet count. It helps you manage your account and reduce the spam in your network.

It has interesting features like social survey that allows you to create survey that will allow you to understand your network much better.

7. StrawPoll http://strawpollnow.com/

Can you measure the sentiment of your network? Ets say you have 1000 people in your network, getting everyone’s opinion one to one is difficult. If you just want to measure if your network is Pro Apple or Pro Google, what do you do? Well Strawpoll is the tool you are looking for.

StrawPoll is the coolest way to follow the opinions of people onTwitter. It allows you to create poll and communicate with your network and understand their opinion.

8. TweetDeck http://www.tweetdeck.com/

Tweetdeck is the most popular desktop application for Twitter developer in Adobeair. It is very popular for its interface. It provides you a very easy way to maintain your daily twitter activities. Tweetdeck provides easy way to group your friends into different tabs and clean up the twitter stream. You can also search in the Tweetdeck and open a dedicated tab for the keyword; this allows you to track them easily. Recently, TweetDeck also has added TweetDeck Directory which is similar to WeFollow.

9. Stocktwits http://stocktwits.com/

StockTwits is an open, community-powered idea and information service for investments. Users can eavesdrop on traders and investors, or contribute to the conversation and build their reputation as savvy market wizards. The service takes financial related data and structures it by stock, user, reputation, etc.

User can add a set of specific stocks, save them to their own portfolio and limit the conversation around it or focus only on their favorite and trusted sources. Watch the whole stream or create your own filters. User can follow the best on the site, the best only in your areas of interest and in turn share your best actionable ideas. This is the best Twitter related financial site on the web does this in real-time.

10. TwitterSearch http://search.twitter.com/

TwitterSearch is the basic framework of the entire search engine that is present. It provides an easiest way to find out tweets related to keywords. It also has an advanced feature that lets you customize your query to find relevant tweets. It is small but powerful tool. Once you get hang of it, it can be your most powerful tool of all. Beside search, it was shows the trending topic which can be useful to get hold of the perspective of twitter.

To Actually understand how to use twitter to promote your business here is a link to an awesome article by Chris Brogan.

P.S : All the rankings and stats are based on my personal opinions and experiences while using them.

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Wasting Energy While We Sleep: Did you switched off your PC today?

Anand — Thu, 07 Jan 2010 18:17:47 +0000

This post is partially motivated by my colleague(I hope he is not reading this) who spent all his Christmas and New year Vacations at home with his PC still running next to my desk. I am amazed to calculate how much electricity he just wasted. Well, you wouldn’t leave your television ON for all day while you are at the office, and yet, across the world, millions of work PCs are left on all night—wasting energy, costing owners millions in utility costs, and contributing to global climate change.

Generating the electricity needed to power those computers requires hundreds of power plants that produce billions of tons of CO2 emissions. Many of those machines sit idle for 12 to 16 hours per day, burning electricity, but not doing any work, because businesses habitually leave their computers running overnight.So how much does this one click matters? Here is an awesome report published by Harris Interactive some time back.

Some Numbers Worth Understanding

A mid-sized company with nearly 10000 PCs, wastes more than $165,000 a year in electricity costs for computers that have been left on overnight. By turning these computers off, an employer can keep more than 1,381 tons of carbon dioxide (C02) out of the atmosphere. Across the nation(read USA), this adds up to more than $1.72 billion dollars and almost 15 million tons of CO2 . When calculated using EPA’s Green House Calculator the emitted Carbon is equivalent to Annual CO2 emissions of 4 coal fired power plants.

As of April 2007, 145,800,000 Americans have full-time jobs. 72 percent of all employed adults regularly use a PC for work purposes at their jobs. Combining these findings suggests that more than 104 million workers reach the end of the work day with a PC to shut off—or not to. Next most important things is to analyse the reason for this type of behavior from the office goers.

Workers Attitudes behind this Wastage:

A centrally controlled system for PC shut-down wouldn’t be necessary if workers shut down every computer, every night. According to the survey, Among employed adults who regularly use a PC at work:

49 percent “never” “rarely”, or “sometimes” shut down their PCs at the end of the day.
11 percent “often” do
40 percent “always” do.

In an enterprise like situation, when asked whose responsibility it should be to save energy in the workplace, 28 percent of PC users said it should be down to management or the IT department. More than half (53 percent) said they were not at all concerned about their companies’ carbon footprints, indicating that effecting change in “shut down” practices at the behavioral level might yield disappointing results.

Making Business Out of IT:

Almost all the industries (be it mid or large sized) are facing similar challenges of harnessing maximum output with minimum power and infrastructural expenditures. And with global recession the idea of Cost cuttings also include supervised use of Power and Infrastructures in the enterprises and commercial centers. No company likes to waste money. On the surface, the financial impact of 24-hour computer power consumption may seem insignificant compared to traditional concerns such as payroll, supply, and rent—but the waste is actually substantial. A few important findings from enterprise point of view :

Energy costs—typically 10 percent of the corporate technology budget—could rise to as much as 50 percent in the next few years.
If not exaggerating, a good Power management software can reduce a PC’s power consumption by 80 percent, allowing companies to save between $25 – $75 per desktop PC.
Turning off PCs, with their heat-intensive power supplies, will also reduce the load on air conditioning equipment, leading to even more energy savings.

If you are working in/for an enterprise, its your responsibility to turn off/hibernate your PC when you are not working. On the funnier side, Gary Hird, IT strategy manager at UK retailer, John Lewis, says “I joined the company in 1989 and one of the first things I noticed was that every light switch had a sticker next to it, reading ‘switch off, you’re burning my bonus” .

But on a Serious Note “It takes between 60 and 300 trees to absorb the yearly CO2 emissions generated by a single PC left on 24 hours a day. That means it would take between 1.24 and 6.24 billion trees to absorb the emissions caused by the nation’s office computers that are never shut down.”

Take one step towards being Green, try to hibernate the PC whenever possible.

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Rise of the Machine Rights

Kari Silvennoinen — Sat, 19 Dec 2009 07:45:37 +0000

I’m in a book. The course I took last year finally materialized into physical from couple of months ago. I’ve no idea if this book is actually available anywhere, even in a digital form. Well, at least I got mine.

In the book a group of doctorate students from three universities in Helsinki wrote cross-disciplinary visions of what certain IT innovations will break through by 2030.

The future is notoriously difficult to predict and the future of technology even more so. So, I’m pretty sure that any predictions we have made for 2030 are going to be wrong. There are some things we can be pretty sure about and try build on them, though. For example, technology will get better. The western population will grow older. Fusion energy will always be here in 30 years.

My second group wrote about intelligent or smart machines on how we see that there are some non-technical barriers that have to be broken before we can see robots and machines everywhere. Some of our ideas are also presented at the 26C3 conference under the title “Here be Electric Dragons: Preparing for the Emancipation of Machines“. So, if you’re in Berlin around Christmas, go and listen to our fantastic ideas. Unfortunately I can’t make it there, but my co-author Lorenz Lechner will be there to entertain the audience.

One of our core ideas is that for autonomous (or, as we put it, ultimate) machines need rights. One reason for this is that normal product liability is not enough if these machines have AI dictating their decisions. If giving rights to machines sounds strange, it shouldn’t. In a sense this is comparable to human rights and the idea of corporation as a legal entity, where the corporation and not the shareholders are legally liable for its actions.

The follow-up question is of course how to manage the risks that autonomous robots pose? We are pretty good at managing all kinds of risks. One approach is to design fail-safe systems. The other is using insurance.

One of the challenges is that the machines of tomorrow and even today are more and more dependable on the software. We can’t end up in a similar situation with robots as we have done with commercial software – no guarantees whatsoever (see for example the capitalized(!) section 17 of a Microsoft EULA or similar section 16 of GPL). We believe that through an insurance of sorts, these sections could be shortened two capitalized words, DON’T PANIC, instead. Preferably in large, friendly letters.

Also, we believe these issues are urgent. The actuality of the technological development was really nicely illustrated by a recent xkcd comic (note the mouseover text). We have also discussed about this subject previously on this blog, Vincent already wrote about the relationship between man and machine early this year.

If you can’t make it to 26C3, here’s a copy of our paper “Augmenting Man”. We are currently in process of refining it and trying to pimp it for other publications.

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The Poor Man’s Business Model—How Out-of-the-Box thinking can generate tremendous value for customers

Vincent van Wylick — Tue, 01 Dec 2009 13:17:21 +0000

I’m always fascinated by business models, i.e. at how entrepreneurs and companies put together services in order to make money from them. I’d call it the source code of business if I hadn’t seen the other source code in Luxembourg —legal and accounting—but arguably that’s more like binary code, i.e. 99% unintelligible.

Sarah Lacy writes about SMSONE, a ultra-local news provider in India similar to Outside.IN, a Union Square Ventures funded US-only company that provides news updates via the web. SMSONE does it, as the name suggests, via SMS. And it spreads through a franchising model, working with local entrepreneurs that pay a franchise fee and also collect a share of the advertising revenue from locally focussed businesses. It is able to do this because of something that apparently doesn’t exist in the US (but does in Europe): receiving an SMS in India doesn’t cost the recipient anything.

When reading about this, I was immediately reminded of a similar business model employed by a Dutch entrepreneur in Russia, Ms. Annemarie van Gaal, founder of Independent Media, a company that distributed Russian versions of magazines like Cosmopolitan, Marie Claire en Good Housekeeping (source). When she spoke at the Star entrepreneurial seminar in Rotterdam a year ago, she told us about how she differentiated herself from the competition (paraphrased as I haven’t got my notes with me):

The trouble with getting your magazines distributed in Russia was that you had to pay quite a lot of money (some would call it bribes) to companies that would then take care of it… badly. Instead van Gaal decided to do it differently. She would hire street kids to distribute her magazines, similar to the gold days of newspapers: the newspaper boy.

If you read Sarah Lacy’s account on Techcrunch, you’ll see that SMSONE does it similarly, hiring local kids, often without much education, to take care of distribution. Doing it via official channels is likely a nightmare over there, and centralising distribution kind of defeats the purpose of micro-news.

It’s a different way of thinking, which many of us westerners don’t have. I mean, would you entrust your products to a beggar on the street or to a street musician? Not only is it probably against the law (except if the government does it), we pride ourselves on our super-organised infrastructure, where anything from temp-workers to interns are there to provide companies with a flexible workforce, and anything from printing presses to mobile internet exists to produce and distribute your stuff.

Of course, I wouldn’t just leave you with these two examples. In the beginning of 2008, Boston Consulting Group published a study of “local dynamos”— domestically focussed companies, which use creative business models to capture value from emerging markets that are filled with challenges, like lacking infrastructure and low-income consumers. The map below shows how widespread these companies are.

Some very interesting examples are mentioned, like:

Shanda, a Chinese gaming-company, that, in order to combat software-piracy, focusses on providing interactive services through gaming, services that are impossible to pirate. And to overcome a lack of a financial infrastructure to pay for online services, they work with pre-paid cards.
Indian CavinKare, which sells cheap sachets of shampoo through small local retailers, while using educational marketing to teach customers how to use their products.
Goodbaby, which targets the many 1-child families in China, who are both willing to spend more on their child than multi-child families would, but are also in need of education.
Amul, an Indian food-and-beverage-marketing-organisation, which collects and pays for milk locally, while tracking all operations via satellite and uses ERP solutions to make analysis based on the data and gauge whether future supply needs to be increased or decreased.
Wimm-Bill-Dann Foods (Russia), which works extensively with local partners, and has devised leasing schemes for expensive machinery to boost their production and is able to serve 280 million consumers nation-wide.

The BCG, of course, takes the stance of its customers, Western companies, and the study is mainly aimed at how multinational companies (MNCs) can replicate 6 of these dynamo’s advantages, in order to compete with them. They are:

Customising to local needs – which involves first understanding these needs, and then meeting them.
Devising innovative business models that overcome local challenges – a logical follow-up to the last point, how to make money from the info you gained.
Leveraging the latest technologies – meaning that these emerging economies are less burdened with traditional infrastructure and quicker on the uptake of more affordable, newer, and easier-to-spread technology, e.g. mobiles.
Beneﬁting from low-cost labor and overcoming shortages of skilled labor – there’s two ways to look at this; a local workforce will be better equipped to interact on a local level, a highly-trained workforce will be better equipped to run a business. Tough call.
Scaling up fast – Russia, India, China, Brazil, etc. are all giants with the promise of huge rewards when you capture them. Many of these dynamos grow quickly through both through acquisitions and building up their network of suppliers and distributors.
Sustaining long-term hypergrowth without imploding – this kind of follows on to the last point

Some of the Western companies mentioned, which have managed to compete on a local level, include:

General Motors, which has adapted its luxury-liners to meet the demands of its Chinese customers, who are usually sitting in the back;
LG, in China, which has learned that the audio-quality of its televisions is more valued by its customers, who often reside in noisy environments;
Carrefour, which has started to work with local municipal governments in China, as these don’t meddle in their operations like local dept. stores would, and are able to provide access to prime locations;
Perfetti Van Melle, in India, a candle/chewing-gum manufacturer, which has found local means to advertise, interacts frequently with local partners, and has adapted its products to local tastes;
and Yum! Brands, which owns Pizza Hut and KFC, and has adapted its menus to meet local Chinese tastes, started a new food-chain aimed specifically at the market, and uses its international expertise to integrate IT, lean supply chains, and a higher level of food standards into their offering.

It shows the value of out of the box thinking in terms of reaching people, and I believe that traditional “Western” thinking should long ago have been thrown out the door anyway, particularly in light of the troubles that media-, automotive, and financial industries are going through. We are in the flux of disruptive innovation and only those quickest to grasp new technologies and ways of thinking are able to survive another day.

No shortage of lessons on that from entrepreneurs in emerging economies…

Vincent out

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Think different – Nokia was the Apple of mobile phones

Kari Silvennoinen — Sat, 08 Aug 2009 11:00:13 +0000

What many of you might not know is that the reason Nokia became the biggest mobile phone manufacturer is because of Apple. When all their competitors were standing still, Nokia decided to think a bit differently. This story was one of the hidden gems in “Fast Strategy“, a book co-authored by Mikko Kosonen, a former executive at Nokia, and it tells the story how Nokia was able to challenge Motorola, Ericsson and other big players of yesteryear.

“When everyone saw mobile telephony as a professional service, Nokia’s leadership saw mobile phones as consumer – almost fashion – products. Rather than predict five or ten percent maximum penetration rate, Nokia quickly imagined everyone in the world having one – or why not several? – mobile phones for personal as well as professional use.” (page 3)

“[On the importance of strategic insight] Some insight may result from intense personal awareness and conviction, such as Pekka Ala-Pieitilä at Nokia being an avid Mac user and seeing the potential for Nokia to turn mobile phones into mass market consumer goods the way Apple was doing for personal computers.” (page 21)

One has to wonder why this Mac-love was only visible in the strategic thinking while Nokia’s Mac-support (PC Suite and other things) has been abysmal throughout the years.

So, what has changed so dramatically that blogs and business newspapers are declaring doom on Nokia? First of all, Nokia’s DNA changed the moment the became #1 mobile phone manufacturer in the world. Before that they were a challenger, trying out

The Nokia 1100, the best selling consumer electronics device in the world

different things and taking risks. But now they are playing defensive, trying to maintain their market share. According to Kosonen, Nokia is trying to counter this by being “strategically agile”.

But it isn’t just that. The backwaters of mobile innovation, USA, suddenly became relevant. I would argue that this is mostly due to Blackberry and iPhone and the huge domestic market. Also, one has to remember that the US is overpresented on the internet, so once the web broke through to mobile devices and Apple started to market the idea of software apps on mobile devices, things seemed to change a bit. Nokia has never been strong in the US, or for that matter in any market where consumers do not choose their own phones and where Nokia has never been able to work with operators. That’s probably the only thing that has been constant.

Couple of weeks ago yet another analyst group forecasted how Apple could pass Nokia in as soon as 2011. Now, this fantasy was based on how iPod users would convert to iPhone users and how Apple should launch low-cost iPhones (especially to developing countries) and sell customized ringtones and overall act in a non-Apple way (and eerily like Nokia). And yet, we’re still talking about smart phones which so far represent a tiny minority of total mobile market.

Sure, Nokia needs to get its act together, especially on the services front, but it’s too early to say that they’re doomed. Especially when you consider that Nokia is pretty strong in the developing countries. My prediction is that it’s not Nokia that will be irrelevant in the mobile phone market in the future, but the US market ‘s importance will fade and it is the mobile players that win elsewhere that continue to matter. The sheer size of mobile phone markets in Africa just boggles the mind.

In the new world of the mobile web, Nokia’s biggest problem is their own legacy, something that slowed Ericsson and Motorola down when Nokia was decided to bring mobile phones to the masses. Apple, on the other hand has shown that it can take advantage of market discontinuities in many different markets where traditional barriers to entry are crumbling down.

“For decades, the dominant players were EMI and RCA, and more recently Sony Music, which had built up the assets and capabilities … In today’s digital world, however, companies like Apple, which have none of the traditional music industry capabilities, are becoming leading players.”

In summary, it’s all about bringing technology to the masses. Apple did that for smartphones, but Nokia, inspired by Apple’s success bringing personal computing to masses, did and continues to do that for mobile phones. It’s just Nokia struggles with the US and smartphones for the rest of us. In Fast Strategy, Cisco’s Corporate Vice President Strategic Allainces, Steve Steinhilber is quoted to have said “…five years ago could Nokia really have expected Apple to be the main threat to their high end phone business?”

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Thoughts about Tech IT Easy, inspired by my time in Paris

Vincent van Wylick — Mon, 22 Jun 2009 17:34:09 +0000

First of all, Paris was great! For three days, Jeremy (Fain, founder of Tech IT Easy & Verteego.com) drove me crazy in a good way, by mapping out every single minute of my life. Similarly to how we met up in Barcelona, it was a great way to get to know the city and at the same time realise that truly knowing Paris will require some further trips back.

Since Tech IT Easy was founded by a Parisian, I felt it was good to go to the source and have a “vision-refresher” as it were. At its peak, this group-blog featured 15 writers, the majority of which was from France or situated there at some point. Many are now spread across this planet and it’s sites like Tech IT Easy that represent a small node where we can occasionally brush against each other (in an intellectual way) and exchange the wisdom we have learned.

Meeting several Tech IT Easy authors, Steve Danino and Emmanuel Perez-Duarte, it reconfirmed to me the intellectual spirit in which this weblog was founded, as well as the search for something, anything, but probably tech- (and/or business!-) related. Many of our authors enjoy a solid educational background, which is both good and bad. Good, in the sense of the value it brings. Bad, because there are many opportunity costs in life and even more so for well-educated men and women. It is clear then that we all write when we can, but more often than not, we cannot.

It is all the more important then to get more (and more and more) fresh blood onto Tech IT Easy to replace those that have moved on, and to connect those who are “old” to those who are “new.” The vision, my vision for Tech IT Easy has always been that of building a community of talented people who directly and indirectly assist each other to make our world a (technological) marvel.

Does that work in practice? In my opinion, only if people work hard at making it happen and the effects are far from direct or instantaneous. Rather, if I need to speak to an interesting person in France (or anywhere really) or bounce a complicated idea of someone, I’ll often look up one of our Tech IT Easy members and vice versa.

A few blog posts that I thought were great and directly showed off the value of some of our members, were Remy Miralles‘s posts about being a software developer, and Cecil Dijoux‘s (who is incidentally also a musician by night) posts about High Availability Architecture. I have met neither of them yet, but I know the day will come. These posts are more the exception to the rule, which is that, on this weblog, we often do not market ourselves, but instead think out loud and whatever opportunities happen because or outside of it, are the individual’s own. The risk is that sometimes you of course do the opposite of marketing, but hey…

It is the nature of the beast that is blogging that its value is hard to determine. We host this weblog for a negligible amount and the 45 min. a day that I spend blogging on it is also negligible in terms of expense. We could value this blog by asking for money, but apart from some unobtrusive monetisation exercises on the horizon, we will not make a serious effort at that… because it would create a different kind of pressure and hence different kind of focus. But, who knows…

The value that Tech IT Easy has to me, remains to be that node, out of which occasionally there is some new strings that are formed, either intellectually or through building up a new relationship or venture. Everything else is… soft tissue.

In the words of the once great Arnold, I’ll be back!
Vincent

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Sell Paris to me in 2 days

Vincent van Wylick — Tue, 16 Jun 2009 12:27:07 +0000

This coming weekend, I’m visiting my dear friend Jeremy Fain, founder of this weblog and Verteego.com. Apart from being happy to see him again and meeting his wife for the first time, and that, knowing Jeremy, he will have planned some interesting things, what would you sell to me regarding a short visit in Paris?

Bear in mind that, so far, I have spent time on the big wheel with my then-girlfriend, visited what was my dad’s favourite pancake-house during his study-time in Paris, and remember spending way too much time in the Eiffel Tower restaurant, so I have seen the touristic part of the city!

I’m also not a fan of queuing, which, with some exceptions, pretty much rules out the museums, but still love art and live music! So, I guess, I’m looking for cool activities that only a real Paris resident would know!

And of course, if some of you Tech IT Easy readers happen to live in Paris and want to suggest a nice cafe or bar to meet up, that is also most welcome! I can’t promise to recite long opinionated speeches like on this weblog (phew!), but I’m very open-minded about venturing into new places and meeting new people!

Look forward to hearing from you!

Vincent

P.S. I chose this picture because, as far as the Internet is concerned, Paris Hilton ranks more highly than Paris, France.

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Some questions to finance geeks out there – on learning about investing

Vincent van Wylick — Mon, 15 Jun 2009 11:03:26 +0000

Hey guys,

I wanted to pose this question on Twitter, but couldn’t describe it in 140 characters. Basically, if I want to learn about investing, what would be the best way to go about it?

I noticed, reading Business Accounting for Dummies, that accounting is a topic that is very nationally driven. Sure, there are general standards, but there will be subtle legal differences for each country and in the end you have to learn something twice or thrice (depending on how often you move).

Is it the same for investing? Am I better off talking to my local bank and seeing what my options are there? I have to say, I prefer being already informed before letting myself be sold service X or Y, so what is a good way to find out about investing via books or otherwise?

I’m not a Dummies-freak or anything, but I did like Consulting for Dummies a lot (review here) and some chapters in the (British) Business Accounting for Dummies book. Would you endorse reading the Investing for Dummies book or another one (bear in mind, that I am a “dummy” as far as investing is concerned!)?

In any case, those were my questions, which wouldn’t have fit the 140 character format. Any advice you can give is welcome!

Vincent

P.S. we are now on a new server, which shouldn’t affect your experience one bit. We may post more polls though :p

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What I'd like: an end to ALL bureaucracy, dammit!

Vincent van Wylick — Fri, 05 Jun 2009 09:05:55 +0000

This is an angry post, so ignore if you can’t handle it. Nothing is as frustrating to as staring at a blank wall. And to continue to use that analogy, nothing is as frustrating as staring into the face of someone who radiates “there’s nothing I can do” or “there’s nothing I will do” to solve your problem. And the same for talking to people on the phone, etc.

Apart from the personal defects these people have (developed), two main reasons, that I can identify, cause this problem:

The organisation itself
The legal environment

How the problem manifests itself is in several ways:

things only work in one country / for one company at a time and have to replicated with every move
many people have to be consulted to make a decision
long stuffy contracts have to be prepared and read
papers have to be signed and delivered with the actual ink of the pen (the worst thing about this is that some people never write, except to sign papers, and what point is the signature then?)
papers have to be sent by 19th century snail-mail instead of the 20th century fax or 21st century email (I expect that by the 22nd century it will all happen by Twitter)

As a consequence, you have to be a master of patience as you face “wall” after “wall” after “wall,” trying not to tell these people how much they really frustrate you (of course, they already know).

I remember reading recently that electronic voting will never happen because anything that can be hacked, will be hacked. So I guess, we will always have to go to a physical office and vote by pressing a button (at least some innovation there). And I guess that signatures can always be faked, when sent via email or fax, so perhaps snail-mail will continue to exist (apart from the very profitable packet-sending business, which, thanks to e-commerce, is here to stay). And I also guess that because each of you speaks their own language and each entrepreneur decides at the start to reinvent the wheel, aka do things their own organisational way, that cross-cultural and -organisational inefficiencies will continue to exist.

When you think about it, the real problem is that humans aren’t telepathic, because if the “wall-person” in front of me could read my mind, they’d be a lot more helpful.

Yes, this was a “what I’d like,” that no one will be able to solve ever.

Vincent

A Study Trip to California, full of Finns this time

Kari Silvennoinen — Wed, 04 Feb 2009 18:09:31 +0000

Since last September, I’ve been taking a Ph.D. level course on the future of internet, IT and related fields called Bit Bang at Helsinki University of Technology’s Multidisciplinary Institute of Digitalisation and Energy. The students are all Ph.D. students from either TKK (HUT), University of Art and Design Helsinki or my own Helsinki School of Economics. The course is given by a former CTO of Nokia, Yrjö Neuvo. So, the course is a kind of a dream team of Finnish education system…

During the fall, we were divided into groups and my group’s task was to write about the implications of carbon nanotechnology until 2025. The other groups wrote similar papers on other technologies such as Processors & Memory, Telecommunications and Printed Electronics. Now, during the spring, we’ll do similar papers but on much broader topics: intelligent machines, globalisation, future of media and future of living. These papers will be combined into a book at the end of spring term (thanks to the Sitra, the Finnish Innovation Fund). To get a feeling of what we are writing, here’s an excerpt of our nanotechnology report’s introduction (PDF).

But, now to the more important part. As a part of this course, we’re going to a week-long study trip to California at the end of February, between 23th–28th. We’ll be visiting Berkeley, Silicon Valley, Palo Alto, and some other places and most of us will spend the week-end at San Francisco. If this sounds familiar, long time readers of this blog might remember Jeremy’s original Tech IT Easy SV trip in 2007.

The program for the trip is starting to form and these are some of the places and people we’re probably going to visit. The official program isn’t out yet, but this is what I quickly jotted down.

University of California, Berkeley; David Messerschmitt
Stanford University, and coincidentally, Stanford Entrepreneurship Week (We’ll also be attending the Fair on 24.2.).
Trip Hawkins at Digital Chocolate (he’s probably more better known as the founder of Electronic Arts)
Mårten Mickos at Sun Microsystems (was CEO at MySQL)
The Google
Ideo
IBM (most likely one of their research centers somewhere in Palo Alto)
HP Labs
Nokia lablet & Nokia Research Center at Palo Alto
Michel Wendell at Nexit Ventures
And probably some others that I already forgot about

It’s starting to look like a busy week (perhaps not as busy as Jeremy’s, though.) and the guys we’re meeting with aren’t exactly small players. So, here’s my question to you: What should we/I ask from these guys? We have the amazing opportunity to talk with these guys and it would be nice to know what the Tech IT Easy crowd would be interested to know.

This is my second trip to USA and first to San Francisco, so another question from me is: What should I do and see at SF? Basically we have four days of official program and two “vacation” days.

The above program is just the official program, and there’s a group of us eager Ph.D. students from Finland’s top universities who would probably want to see more of what’s going on in SF. All ideas are welcome, but keep in mind our strict time constraints.

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LeWeb '08 Conference sucked big time

Jeremy Fain — Sun, 21 Dec 2008 23:19:56 +0000

I attended LeWeb, a conference dedicated to…the Web industry, almost 2 weeks ago in Paris. I apologize not to have blogged before, but December was a frantic month, business-wise, and I wish I could blog during the conference but as you may have read on the blogosphere, there was no Internet. On top of that, I wanted to leave some time before I blogged to check whether my words would soften.

I arrived at Le Web, investing a lot of time (2 full days) and money (more than EUR 800, that is to say around USD 1100 – which is a lot of money for what I got), with very high expectations, and I have to say that this conference was a huge disappointment to me. Actually, it was more of a disappointment: I actually found Le Web ’08 conference to be a huge piece of crap. Here’s why.

The organizers: Loïc & Géraldine Le Meur

Prior to the conference, I was a big fan of Loïc Le Meur. The guy looked like Midas to me: everything he touched became gold. The guy gets people lining up to invest in his startups (look at his list of investors in his last startup Seesmic here, impressive). Loïc understood that blogging was going to be big before everyone, and positioned himself accordingly (a huge blogger and founder of Six Apart, the editor of TypePad). Loïc is also an early investor in LinkedIn, my favorite web app, and recently founded and funded Seesmic that I find to be a very cool video conversation platform. Well, the guy seemed to be the perfect investee for VCs, and the perfect investor for entrepreneurs. However, when it comes to organizing conferences, I would tend to say it’s not there yet. Loïc and his wife Géraldine have been organizing the Le Web event for something like four years. Last year already, criticism had emerged, but overall comments were positive. Well, after attending one Le Web conference, I can only blame myself for not having due diligenced better: I wasted my time and my startup’s money.

The theme

Love. This year’s Le Web conference was about love. At first sight, I found this theme brilliant – too bad the idea wasn’t well executed. Love is a universal value that is only discussed in novels and Vogue. Plus, Love is the perfect theme if you want to think an outside-the-box conference program. Unfortunately, this wasn’t the case at all. Although there were a number of supposedly quality speakers, most didn’t actually mention the theme, and I guess some didn’t even know that the theme was Love (Marissa Meyer of Google, Didier Lombard of France Telecom, Maurice Levy of Publicis, to name some of them…). I think it’s a big waste, because having a truly deeply-thought consistent program around Love, with at least some continuity between speakers, could’ve made of Le Web a truly mainstream event rather than just a reunion self-proclamed visionaries.

The speakers

Speaking of self-proclamed visionaries, I had a hard time looking for new ‘stars’ on Le Web panels. Or even just interesting content.

Paulo Coelho is a brilliant man, but he had nothing to do at Le Web: his speech didn’t bring anything new, it was self-promotion, and an uninteresting one as a matter of fact. Same with Susan Wu from Ohai, preaching her church (virtual goods): boring slides, boring intervention.

Didier Lombard was absolutely out of scope too. He basically paid to get on stage. And you could feel it.

I was very disappointed by Maurice Levy from Publicis (and by the questions asked by Loïc Le Meur: boring) – the guy could’ve given us interesting insights on web advertising. Instead, we had a boring “fireside chat”, as they say. I liked one thing about Maurice Levy though, he publicly gave his email address saying he was looking for startups to invest in.

Startup competition updates were extremely repetitive; the only thing you could here was “despite the crisis, there are still a lot of innovation around; I’m thrilled by what I saw in the startup competition room”. Except that when you looked at the jury in the room, they were all on their Blackberry or iPhone aswering emails.

I liked Yossi Vardi, Chris Anderson, John Buckman (good tips for entrepreneurs), Marissa Meyer (a few insights on the Google roadmap, like wanting to take Chrome out of Beta) & Joi Ito though.

The sponsors

Le Web’s official sponsor was no company else than Microsoft, the tech giant that probably least understands the Web provided the very poor quality of its online applications, like Hotmail, or its total absence of the collaborative web apps landscape outside its expensive minority stake in Facebook. The good news is, Microsoft folks are smart asses and let some selected startups (some of them embedding no single Microsoft technology) demo their applications rather than demo Microsoft products. Microsoft alone paid Le Web USD 110,000 or EUR 80,000 to get its brand on top of others, rent a lounge space, and get speaking time.

Google also was a sponsor of Le Web – they had Microsoft move first when it came to getting the “official sponsor” title. Google had a special room dedicated to presenting its own stuff during day 1. Nothing new there, except that Google brought in speakers on a number of topics like Adwords, APIs, etc. I guess the fee also included the 2 keynotes Google got. If I were Google, I would, to ensure a maximum buzz around my brand, not attend or sponsor Le Web. That would make the entire conference speak about the absence of Google whilst the whole web revolves around the Google search engine. Google being a sponsor amongst others makes of it a regular company. Too bad.

There were other partners, like SwissCom that sucks big time (they had a booth, and did not manage to make the Internet work during the entire conference + Loïc Le Meur says they got paid more than USD 100,000! to make nothing work), Facebook (?), SixApart & Seesmic who got it for free obviously,…and a number of others that are not worth talking about in this not-so-long post.

The budget, the price

1,400 participants x an average of EUR 1,000 per entrance

Sponsoring & demo room for at least EUR 200,000

The overall budget for this 2-day conference amounted to EUR 1,500,000. Yet, there was no wifi running, definitely not enough food for all participants (I had to go grab a sandwich each 2 days), no consistent editorial line, a crowd of people investing time and a lot of money to listen to the same self-called visionaries on stage.

I haven’t paid myself in one year (I live on my fiancée’s salary), every since I started Verteego. I bought myself a ticket to Le Web almost as a Christmas gift, hoping to enjoy a lot. It was a sort of sacrifice (EUR 850 + 2 days of turnover for Verteego – I’m the sales guy there – is hell of a lot of money! the price of a superb laptop or a great long weekend, say, in Venice) but I was plenty of hopes. The least I could say even 2 weeks after the conference is that I have a very angry feeling at myself: I feel I’ve been financially abused. And I lost two days of hard work during an important period.

The place, and the temperature…

Well, it was free-zing. Which is okay for me, except that with so many people inside, there must have been a sort of natural warmth, which wasn’t the case. I felt this place had the worst energetic efficiency in Paris. This absence of environmental awareness stroke me: the second day, it was warmer. I couldn’t believe how much energy was used to heat the place. I am very disappointed by the overall lack of consciousness of web entrepreneurs for environmental issues: if you are really about changing the world, then you should think about measuring their environmental footprint and take action to reduce it from one year to another & compensate the remainings. But they sure didn’t. And I’m not writing this just to sell Verteego Carbon here: I just don’t understand entrepreneurs to pretend they want to change the World and who don’t care about behaving socially & environmentally responsibly. I think that Le Web, an event that took place in Europe at the same time as the Poznan conference (pre next Kyoto talks in Poland) AND which theme was Love, was just perfect place to ensure Social Responsibility and Sustainability became buzz words in the blogging, startups & VC microcosm. Géraldine & Loïc completely missed the train here.

The startup competition

I didn’t apply to the startup competition. I felt it wasn’t right to make startups pay EUR 1,500 for just a pitch. I was wrong in doing so. The startup competition was probably the only interesting thing during this conference. I paid, as I said, EUR 800+ to go to Le Web Paris ’08 and basically meet with friends. It would’ve been worth paying the double to try and get 7 minutes to pitch Verteego in front of around 300 people. That makes it 5 euros per viewer’s attention, + the backlinks, visibility, and blog coverage you could get later on. Not applying to the startup competition was perhaps my only regret. And that would probably be the only reason I would attend next year.

The food

It was a shame. There’s no other word for it. I could get no food at all, not during the first day, not during the second day. The first day because there was none left. The second because there was no vegetarian food! Both days I went outside for a sandwich. I could then make friends because people were coming to me to ask where I had gotten this.

Worse: during Day 2, I needed to drink water during the day because I caught a cough during Day 1, because of the cold. And I was basically given a negative answer, because the bar was opened neither at 11am, nor at 3pm (which actually made me leave the place). You get 1500 people pay EUR 1000 on average, and there’s no food, and no water???

The Internet

There was very little Internet during the whole conference. Here’s a recap of this lousy situation: not only were you locked in with boring old speakers & because of the price you paid, you couldn’t answer client requests, or blog because of this.

Loïc Le Meur wrote an apologetic post, but I found this post actually ridiculous for him: Le Web gave EUR 100,000+ to SwissCom not to get a service. The excuse is: no provider is used to so many attendants. This is untrue: the very week before Le Web, I attended a huge (20,000 visitors per day!) Trade Show, Pollutec, in Lyon. And there was perfect Wifi.

The attendants

Obviously, I met with many of my existing friends, and I was glad to. I also met with new people from everywhere around the world. Lots of great people there, from everywhere around the World. But come on, at what price…Furthermore, the mindset was rather negative: people weren’t ambitious or optimistic. They should be: the crisis is a great opportunity to move fast whilst remaining lean.

The TechCrunch party

It was so-so, I was disappointed and angry: 1) I had bought my business partner (who hadn’t attended Le Web) a EUR 30 ticket, to be told at the entrance that a pass to Le Web was worth 2 entrances. I think it should’ve been explained somewhere because I basically wasted EUR 30 with no possibility to get a refund. 2) I waited for 30 minutes outside, in line, to get in. And during this time I saw 2 groups of people showing up in front and squeezing the line: I found this very abnormal, because the Web is about democracy, having all the same access to information. 3) the place was very small, but this is less of an issue.

Conclusion

For the price I paid, I got very little value back (basically, the only benefit of Le Web was that I got to see many of my friends in very little time). Rather than apologizing, and provided the HUGE profits this conference made, I believe not reimbursing participants for providing no wifi, no heating, and no food services is irresponsible at that cost. I repeat: rather than blame their food supplier, Swisscom or the Cent Quatre (for the heating), I think Loïc & Géraldine Le Meur should’ve refunded participants for providing such a low standard service rather than making this huge profit (I also think they should display publicly the P&L of the conference). This is the least they could’ve done since giving me back 2 days of work isn’t physically possible. Loïc and Géraldine Le Meur didn’t show any social responsibility here, no respect for their customers.

Last, but not least, those who are not going to complain about Le Web ’08, both in terms of organization and content, are either those who didn’t pay anything to attend, or those who paid so much that blaming the event would make them look stupid.

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Thoughts about the New Venture business-plan competition, part 2

Vincent van Wylick — Fri, 28 Nov 2008 08:15:47 +0000

A lot more multi-part blog posts on Tech IT Easy; finally some continuity again, which is nice for both you and me! So, today was the ceremony for stage 1 of the New Venture business-plan competition, the submission of the idea, of which a prize of €500 was to be won by 10 contestants. As I expected, for several reasons, I wasn’t among those 10, though the race isn’t over yet! The next submission is February 26th 2009, the feasibility-study, for which I may compete with my own idea or change it (to another, if needed). The feasibility of an idea entails technological and business aspects, and there’s still a lot to be worked out on both ends. I’m letting you know for completely selfish ends—it would be nice to see a familiar face, if only on the other side of the court. Of course, one team-member must be residing in the Netherlands!

So how was today? I wasn’t really top-fit as it feels like I’m doing a 101 things and am a little overwhelmed, i.e. stressed out. So I didn’t come with high expectations, mostly to check out the competition and perhaps meet some people. The event was presented by Roland Koopman, a Dutch TV-presentor, and the awards were handed out by Pim Batist, founder of SellaBand.

Two “insider”-stories were presented, one was SellaBand and other was Taniq, a rubber-company, for lack of a better word—the company makes it so that rubber hoses and similar are more stable, while using less materials and no metal. You should check out the film their site, it’s very well-made. Most important insight from Taniq: the importance of coaches/mentors, which appear to be abundant if you take part in the competition, for bouncing off ideas & solving problems. But also on the hiring process—when the three young founders decided to look for some “grey haired” commercial talent, they found out, the hard way, that big-company sales-talent is not the same as small-company talent. In the end, if you can’t sell your own products as an entrepreneur, you’re probably in trouble!

The best example of this was perhaps Pim Betist; what a magnetic personality! SellaBand is a crowdfunding mechanism for bands, who, instead of walking to a record-company (for whatever reason), can place themselves on the site, after which fans can vote—with their wallets!—for the band they like. And with that a music-cd, etc. can be produced… He came up with the idea in 2001, residing in New York. Then, for reasons unexplained, he decided to take on a 3-year job at Shell, until he finally quit that job, sold his car, moved into some (illegally) free housing and focussed all his energy on working out the idea. He recruited a guy from Sony BMG as co-founder, by posing as a student wanting to write a thesis and holding several meetings with the company under that subterfuge—a side-note: recruiting people from Sony should never be hard, these guys, from my experience, are all chronically made unhappy by the politics in that company. I’m a little more into music over rubber, as you can tell, but that’s maybe also because the presentation was excellent. Not that Taniq didn’t have a nice movie either, definitely to be watched on their site!

So what about the winners? If there was a definite theme to the evening, apart from innovation, it was that pretty much all of the prize-winnars had a sustainable idea. It wasn’t necessary green, but more efficient, more ethical, more social, etc. What I remembered was:

a one-handed fire-extinguisher for handicapped people
a crowd-funded electrical cart for people in third world countries
a way to make fuel consumption more efficient in cars
a sensor that measures how people sleep

On the off-chance that you are planning to take part in round 2 (send me a mail, if interested), that should give you a hint of where to direct some energy at! Looking at the credit crisis now, it should perhaps not be a surprise that attention is being drawn towards both efficiency, but also more sustainable ways of doing things—that is, incidentally, one the conditions that will probably be imposed on the car-companies, if they receive financial aid: to become more green.

That’s it from me on this subject! It’s not too far a leap for me to write a feasibility study, but I’ll only know for certain if I’ll take part a few months from now. So, let’s hope for a part 3, 4, and beyond!

Have a nice weekend!
Vincent

The truth about headquarter locations

Vincent van Wylick — Tue, 18 Nov 2008 12:55:50 +0000

One of the first thesis topics that was proposed to me, as part of my strategic management master, was to research why companies are located where they are. Turned out that this is some super-secret thing and there hardly is any data on it. Our assumption was that this must hence be strategically significant.

I abandoned the project, after making this super-complex mindmap about it. I decided, I just wasn’t interested enough in the topic and that the reason was probably a very boring thing, like taxes.

(click on pic to see full pdf in Scribd)

Yesterday, I had a pretty cool meeting with a software-company that has been running successfully for about 10 years. Only it was in the middle of nowhere, close to some Dutch village that you will never have heard of. After the meeting, I asked why on earth they had located there (no thesis-related motive at all)!? Turns out that when you start a company and start hiring locally, your loyal employees won’t be so loyal anymore if you decide to move to e.g. Amsterdam (about 2 hours away).

Sometimes the simplest answer can be hidden under a lot of complexity…

Vincent

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ULIKE.net: on Community & Culture

Jeremy Fain — Sun, 26 Oct 2008 12:00:26 +0000

We’ve already covered ULIKE in the past. You may recall: it used to be called ULIK. Well, Ulik, cofounded by Mathieu Léronde & Raphaël Labbé, has become ULIKE.net. I like a lot the vision behind ULIKE: ULIKE is not a web app, nor is it software or a “cultural Facebook”. ULIKE is before all a vibrant community whose members are taking pleasure on sharing their tastes. You can tell their community is extremely powerful by the density of their contributions: once you’ve subscribed and spent some time on the service, it becomes addictive naturally when you meet new people & discover new things you may like. Here’s a screenshot of their new, beautiful, interface:

I suggest you take a look at their excellent advertising: [youtube=http://www.youtube.com/watch?v=cXKICOo5qdM]

…or the movie their team (now funded by AXA Private Equity, one of the best VCs in Europe) made for their launch party. The movie highlights the 100 top contributors: [youtube=http://www.youtube.com/watch?v=4dZcV_iyhv4] (I love the music, by BNN)

Now that the introduction is made, what’s ULIKE for?

- meeting new people, alike or very different, both virtually and in real life (ULIKERS tend to meet quite a lot offline)

- discovering new stuff: books, paintings, cities, people, etc.

- sharing your tastes with your friends, family & fools so that they can buy you gifts

- and having your own non-geek online gallery accessible to all online (so called ULIKE lounge).

At least, this is the way I use it. How about you?

Check out my ULIKE.net lounge! http://www.ulike.net/jeremy

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Why the Rhine Capitalist model of regulation is the right one… for now

Vincent van Wylick — Sat, 04 Oct 2008 22:31:07 +0000

The matter of Rhine Capitalism vs. Anglo Saxon Capitalism, referring to the battle between the capitalist system that has long reigned in the US vs. the more socialist system that came forth from European countries, is one that is on the table right now. The question is this: should we let the market be free, assuming that all information is perfect and hence that all decisions are rational? Or should there be a big brother figure, keeping an eye on market movements and stepping in when necessary?

More banally, should we be paying 50% of our income to regulators in the form of taxes, as it is common in my country, the Netherlands, and several more, or should we minimise that spending to a much lower figure, again betting that everything will sort itself out without expensive regulation? I think that anyone who’s ever had to fork out 30% or more of their hard-earned cash, wished that there was no government at one time or other.

The fallacy of “freedom”
Getting back to free markets and the perfect distribution of information required to make rational decisions. I think it is clear that the latter is not the case. For information to be available to all, there should be no barriers to entry, everyone should be sufficiently sound of mind to process information and everyone should have access to it, either because it is “free” (paid for by taxes), or because they are wealthy enough to afford commercially collected information.

In other words, we are talking about at least middle-class income levels on a massive scale here, which correlates with education and job-prospects. We are also talking about basic education for everyone, the ability to make decisions based on accumulated intelligence. This is not the case in the US, nor any other country that endorses the “free market w/o government intervention” philosophy.

The Credit Crunch and aftermath
More complex is the matter of the credit crunch, which hasn’t been happening on a level that you and me typically frequent; it has been going on between businesses, banks, and ultimately those taking out mortgages and those being shareholders of one of the companies involved. What happened here is 100% a free market problem on a global scale; the belief that investing in housing is a safe bet and the laissez-faire attitude of regulators towards the businesses involved. And the aftermath, which is that banks are being quasi-nationalised on a massive scale.

We are seeing the return of Rhine Capitalism, which has been waging a losing war since the Second World War.

Rhine Capitalism automatically comes with higher taxes. It comes with a re-empowerment of the government and the popular belief that, once again, the government is our parent with all the answers. Both the increase in taxes and the added income from the acquired banks also has another effect, that governments will be richer, will be able to, once again, afford to better provide for the general population, something that we have left to commercial parties in the last years, some of which has been good and some of which bad. This will hopefully lead to better education and perhaps even an alternative solution towards the masses of greying populations that we’ve all be told to fear.

Will it be good for business, the strongest voice opposed to Rhine Capitalism? No, certainly not.

Rhine Capitalism isn’t the solution either
Yes, as my words show, I’m a firm believer in education for everyone, in lowering the barriers to entry for those of low income. I believe in empowerment of people and hope that it will lead to better decision-making on all sides. But I think that going back to the government being daddy is devolution, not evolution.

These last decades, we have seen plenty of progress, particularly on a technological scale, but also accompanied by plenty of others, facilitated by technology. We’ve seen massive developments in science, in logistics, in productivity. We’ve seen a greater awareness in people of global issues and the exchange of information, which has exploded. We’re half-way towards a world, where regulation is an automatic consequence of the fact that everything is becoming transparent.

Eventually, we will also see that issues like the credit crunch will no longer arise, because barriers to national data, to local data, to individual data will fall, allowing individuals and businesses managing their money, to make truly rational decisions.

What happened these last 15 months or so (perhaps even longer) is a warning shot, telling us that we’re not there yet. What happened this last week and the coming weeks is a consequence of exponential decisions based on negative emotions (mainly greed, fear, and ignorance). What should happen today and tomorrow is for people to use this as a lesson to shape our future world and build technology and systems that are designed to overcome these problems and replace the need for the current devolution towards an inefficient, but necessary system of regulation.

There is still a place for the government, as long as large portions of the global population are being suppressed. But, hopefully, it will actually do what it’s meant to meant to do, which is taking care of the people, instead of markets and businesses. But that is certainly something that will have to wait for several more years, until this current mess sorts itself out.

Vincent

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Why do startups fail?

Vincent van Wylick — Tue, 30 Sep 2008 18:52:30 +0000

Hi, my name is Vincent, a now-familiar face in Tech IT Easy’s blogging family, and today I’d like to write about my thoughts about startups’ reasons to fail (and as a consequence: reasons to succeed). This is my 3rd non-tech topic in a row, and if you hadn’t guessed it, I have little inspiration to write about tech these days.

So, “why do startups fail?” seems to be a relevant question these days and I guess to everyone running or thinking about running or working in a startup. Depending on who you talk to, no actually pretty much everyone, over 90% of startups fail within 2 years of their launch. The stats vary according to whom the startup works with, it is much lower with venture-funded companies, as well as within certain incubators.

The Credit Crunch

One of the most popular reasons I heard while writing my thesis (which involved me interviewing over 200 tech-startups), is of course lack of money. That seems really relevant today, and is certainly a factor.

To give a personal example of how the credit crunch is affecting our lives negatively, back when I started a bachelor in Manchester, UK, about 10 years ago, I was able to get a student-loan quite easily at a British bank. You walk in with your details, get a 1000 pounds overdraft and a credit-card to boot. This was still the case until a few months ago. My brother, who just left for Lancaster, UK, was counting on a similar deal. But banks had withdrawn that service to non-UK citizen, rather abruptly, forcing my brother to find alternative solutions. Banks don’t care about who needs or deserves a loan, when they cut it off, we’re all screwed.

Fred Wilson pointed out that seed-funding will likely suffer most, and true, banks are, both directly and indirectly, an incredibly important source in that arena, as well as at later stages. The graph below showed my own results, for two measures carried out during 2005 and 2006 on the investment climate for high-tech startups in the Netherlands (a Dutch version of that report can be downloaded here).

What this graph also shows is that even pre-credit crunch, most startups didn’t use or weren’t able to use much beyond their own savings (the turquoise part) at the seed and sometimes the later stage (of course that still includes credit cards and similar bank-related funding sources). No way that this is something that should be generalised across all countries of course, I imagine that the distribution of investors will vary quite substantially from country to country.

Forget funding

I happen to think that funding is not the factor to focus on when talking about startup failure. In a perfect financial market, which, many financial people try to convince me, exists, you get funding if other conditions are in place. Receiving an investment is a validation of your idea, and if you can’t get investors to talk to you it’s either because:

Your idea is bad.
Your presentation is bad.
There are too many similar startups applying for funding.

The key here is then for 1. to improve your idea, for 2. to improve your presentation, and for 3. to stop being a sheep and reinventing the mousetrap. While this makes me sound like an asshole, the point is that none of these reasons have to do with funding, they have to do with the quality of your venture.

Non-financial reasons for failing

A startup is a machine that needs to be built, needs to operated and maintained, and needs to produce sufficient output/income to cover the costs that building, operating, and maintaining require.

Therefore, startup-failure is related to:

Too expensive a building-process (both in money, people, and time), which comes out of bad planning and insufficient skillsets to get results.
Improper operation and maintenance, which is really to do with bad HR-practices.
Insufficient output/income, which can be related to the quantity produced (bad planning, skills), bad pricing, and of course a bad market.

The “bad market” factor is an interesting one, because it seems very related to the credit crunch problem. My brother, who is forced to look elsewhere for funding, will be less likely to buy a laptop from the start now. Everything ties back into funding somehow.

Bad market or bad business-model?

The top business models, in my mind, are built to withstand recession. Some could argue that they are built during a recession. An example of this is discounters like Aldi, which was built in a poor Germany, many years ago, and has caused a revolution in European retailing. Im not 100% sure, but I think that the strength of European discounters here has even prevented monsters like Wal Mart from taking over the place.

Other streams of thought about this take you into “blue ocean” or “long tail” territory, both somewhat hip ways of saying that you should think outside the box.

A bad market can be a lack of desire on consumers part to pay for your product. And it can be that the market is simply to small, suggesting that it may be a good idea to think globally from the start. Certainly, investors like the idea of entrepreneurs thinking (realistically) big. Also when you see some of the industry-growth-stats in emerging economies, it makes sense to target those markets, instead of the many 0-2% growth economies in the Western world.

I guess what I’m saying is that a bad market is just an excuse for failure. If your business is advertising dependent, you should be aware that most advertisers cut their spending during recessions, a recession that has been predicted for years now. The same applies to certain luxury goods, etc. So, perhaps the market isn’t bad, perhaps the business-model is bad too.

In summary…

Yes, the credit crunch is scary, as are all recessions. Yes, we would all like our ideas to simply be output – input = profit. But the core of entrepreneurship is to think in opportunities, to not get stuck in ideas, and be market-focussed. It is about breaking rules and making new ones. And, while it is a harsh world where failure is accompanied by a high price, at the core of entrepreneurship is also optimism—the belief that everything can be solved with the right perspective.

So why do startups fail? By setting themselves up to fail.

Vincent out

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The (pre-) entrepreneurial process

Vincent van Wylick — Tue, 15 Jul 2008 15:25:36 +0000

As I’m currently applying for jobs, I naturally often get asked what my dream job is. I hate that question, as there’s no simple answer. My dream “job” is to set up companies, which is really a great number of jobs. Following series of steps is the way I visualise this process, seen from a business, investor’s, and somewhat European perspective, and not so much a technologist’s one. As always, my articles are meant to be the start of a discussion and your feedback is appreciated!

My framework is somewhat inspired by the “Strategic Framework” on the right, which I got from an excellent, but fat book, called “Valuation – Maximizing Corporate Value.” Along with explaining valuation very well, including what all the financial inputs mean and where (!) they can be found, it’s really meant to be a tool for building sound business-strategies. A good book for consultants, if you’re interested in a simple book on finance, and a concrete book on strategy (hard to find in that combo)!

Let’s do it!

Step 1 – the idea

This can really be sub-devided into three separate parts: the vision, the mission, and the plan. The vision is like the cloud in the sky which you spot while taking a walk. You don’t know if and how it will work yet. The mission is a long-lasting platform for you to run your company on; it’s a set of parameters, which come from both your values, your strengths, and your objectives, e.g. “I want my business to be fast, honest, and affordable.,” or Google’s: “…to organize the world’s information and make it universally accessible and useful.”

The plan is not the business-plan per se, but the action plan that is something like this post here. It’s meant to be a set of steps that brings you from the idea to the business, and includes developing your business-idea, writing the business-plan, selecting the team, approaching investors & partners, where to locate, what technologies to use, etc.

Good knowledge to have at this stage: technical about your product, development, the industry; creative techniques; planning techniques.

Step 2 – a short market-research

Just to get an overview of the market and to what extent the problem you’re trying to solve is already being solved. I think step 1 needs to be quite far-developed before proceeding to step 2, because being confronted with a market filled with giants isn’t exactly a great motivator to develop your yet vapourous idea. The same applies to talking to other people (step 4), as those can be quite reality-distorting also.

So a short market-research, using mediums relevant to your industry. Google is always a good start, but sometimes you need to do a patent-search or a scholar-search for high-tech; at other times you need to look at Crunchbase for Web X.0; and sometimes a phone-book or the chamber of commerce databases for local stuff. And sometimes there’s no material out there (a very tricky situation!), in which case you need to look at substitutes for your product/service as well as new entrants from related industries. While that’s already substantial in terms of work, it helps with step 3: the pitch.

Good knowledge to have at this stage: marketing, both in terms of what to focus on, where to search for stuff, and how to write it up so that it makes sense.

Step 3: Pitch v. 1 – convincing your peers

The most important quality an entrepreneur must have is the ability to sell. And there’s a phrase in selling, which goes something like: you can’t sell what you don’t believe in… and vice versa. The more your idea is worked out, the more you know about the market, the more confident you can defend your ideas from the many, many sceptics that are out there.

A pitch v.1 needs to be a mini-business-plan of one to a few pages and include as much information as possible about the product, about how (you think) you will produce it, who you will (need to) hire, where you will be located, what need you are meeting, how you will market your product, how you will make money, how you will defend yourself from the competition. The more specific, the better!

And then that needs to be summarised into a pitch of ca. 2 mins, summarising all the vital data + a touch of personality & charisma!

Good knowledge to have at this stage: apart from the data from steps 1 & 2 (technical, marketing, your industry, your customers), you need some business-planning skills, which includes some (not much) financial techniques; as well as presentation skills & passion.

Step 4: find your team

There’s different philosophies about idea-generation (step 1), with many, I’m sure, arguing that you should be brainstorming with your friends on the idea from the start, that more heads have more/better ideas than one, etc. etc. I completely agree with this. But my philosophy is that without a clear direction, a team can quickly lose focus and follow political objectives, rather than pragmatic ones. While, I’ve been blessed with a few groups of people, where the chemistry was excellent and everyone was intelligent enough to be willing to listen & learn from others, many other groups have been a complete failure, because politics & brains definitely don’t always come hand in hand. So, I’m of the opinion, that an idea needs to be very well-developed & thought out before presenting it, after which it can be refined and adapted, and even rejected, according to the more specialised knowledge of group-members.

About finding team-members; for myself I have to say, after spending a long-long time on my thesis—a solitary activity—it’s not that easy. Again, networking, LinkedIN/Facebook, blogging, university (very important!), family, highschool-friends, former employers/co-workers, etc. , all good choices. Luckily for me, my thesis also brought me into contact with a large number of incubators, which are also good places to run into smart people; I worked for a venture-capital-tracking firm, ditto on the smart people; and there’s Tech IT Easy, Ditto 3x! So, really, never a shortage of smart people, when you look for them!

Good knowledge to have at this stage: material from steps 1-3; people-skills, in terms of choosing the right group of people; leadership & sales-skills; and the ability to form rational arguments & present your ideas well.

Step 5: write a business-plan

Read Jeremy’s post here.

Step 6: pitch v.2 – approaching early-stage investors

Somewhat different from later-stage investors, these are people you talk to, usually before launching your company (except maybe in web-world), and for which you don’t have that much tangible evidence to convince them with yet. So your pitch needs to be somewhat like pitch v.1 (step 3), but will include more data that you collected for your business-plan, but presented concisely and clearly showing how you will meet a need, how you plan to make your investors their money back + some more, how you will reduce the risk for them (very important!), and what you see their role to be in your business, apart from cash-cow—this only applies to active investors, such as business angels, not banks or subsidies, though not all business angels are able to be active (though they should always be able to help with contacts), and some bankers may surprise you.

Good knowledge to have at this stage: all the material from the previous steps, and similar skills as for pitch v.1. You need to speak a language that early-stage (!) investors understand!

Step 7: approaching early-stage investors

Banks & subsidies are easy to find, though sometimes you still need a little help and/or an intro; generally, banks want a lot of securities, sometimes already having a subsidy agreement and working with other, more experienced investors helps a great deal. Subsidies are a b*tch, as they make you do a lot of paper-work and impose some rules, and they generally work best for innovative, sustainable, or export-related ideas.

Business angels are a little harder. Usually, it helps going through trustworthy (& older) people that have built a network themselves. I can’t say more about that, except that entrepreneurs should avoid acting predatory and avoid predatory investors (both happen way too frequently), and you can mostly control the first (yourself), not so much the latter (though it helps going through someone you know).

Good knowledge to have at this stage: know your business-plan inside out; know how to present it and the financial data concisely; people-skills, in terms of evaluating the people you meet and selling yourself; having a network helps; having a good team in place helps a lot; having collateral helps with banks; having a tolerance for bureaucracy helps with subsidies, as does an association with a public research-institute (e.g. an incubator or your university).

Step 8: preparing an action-plan

Technically, this should’ve been part of your business-plan (step 5), but the point is that you now have money, you’ve made certain agreements based on it, and your objective is to use that money wisely to get your business off the ground. So now you need to decide what spending needs to be done, preferably as little as possible, and how to quickly get to the next stage. If you’re in web/software, you should already have a prototype, and focus on developing it, and build an early customer-base. In which case, you need someone to do the developing and someone to do the marketing/selling; usually technical staff outweighs the marketing staff at this stage, the latter often being the role of the entrepreneur himself. If you’re into high-tech, a prototype still needs to be built, which means technical work. This stage is really too specific to generalise; it depends on the type of product, business, and industry. Something in bio- or meditech, for instance, can take a decade to complete.

You also need to decide on whether your basement/garage will be enough, and on what type of legal protection your product needs, as well as the legal structure of your business. Which includes talking to lawyers, like this one.

Good knowledge to have at this stage: an understanding of what the new stakeholders in your business require; the ability to focus on what matters most for your business; a holistic understanding of a wide variety of business-matters, including hiring-practices, location-choice, development, legal & accounting tasks.

Step 9: spend (wisely)

Hire the people that you need, try to find smart ways to get smart people for cheap, either through internships, summer-programmes, or stock-options. And some smart people obviously need to be paid more or less what they are worth.

Locate cheaply while developing. For software, I’d suggest Eastern Europe, close to software-universities, but a basement in Paris/Berlin/London/Amsterdam also works of course, though both the location and the people will come at a premium. Important is to consider that many investors prefer you to be geographically accessible, as do customers.

Find viral ways to market, if you’re at that stage already. Thank you, internet, for existing, but free press also helps. Find smart ways to acquire customers, e.g. involve them in product-development, use them for word of mouth and case studies, partner up with good companies, etc. This is again very product-, company-, and industry-specific.

Build synergies between partnerships & investors; again really a step 7 problem, but it helps when your lawyer or your US/Asia-based marketeers are also investors. I’m also a fan of synergies in the HR-department; giving employees stock-options is not only cheaper, but also serves as a motivator. Of course always be careful who you choose to give part of your company to!

Good knowledge to have at this stage: everything from the steps until now; people-, negotiation- & management-skills, guts to market & sell; the dedication to work as many hours as it takes; etc.

Step 10: pitch v.3 – approaching round 2 (series A round) investors

While building your business, you should also build your business-plan and have a much better idea of the inputs for your valuation and the (projected) revenue-potential. And you should have surrounded yourself with a nice set of advisors and “network-nodes” that get your business-plan to be placed on top of a pile somewhere. You’ll still need a pitch of course, but that shouldn’t be a problem anymore at this stage.

Good knowledge to have at this stage: everything from before, especially how to pitch and what to pitch; and a network helps tremendously.

Step 11: round 2 (series A) investors

Bearing in mind that over 80% of businesses don’t make it this far, in theory, a business goes through a number of stages, before ultimately going public or being acquired. Web-businesses have distorted that process somewhat, as has the Enron-aftermath. But many early-stage investors may wish to be bought out at this point, an exit for them, and you may even want to do the same. VCs like replacing entrepreneurs with experienced CEOs, especially if the entrepreneur is a technical person, who will then likely be “promoted” to something like CTO or CIO. Investors do this because they have to account for the money they invest in you, and hence have to show their “bosses” that they do everything possible to mimimise people-risk.

While there are cultural & VC-specific differences, the risks that you need to have already covered here are usually both technology- and market-risk, translating into a workable product and one that preferably already has customers (lined up).

Good knowledge to have at this stage: either the ability to grow with the business; i.e. become more of a manager, less of an entrepreneur; or the ability to step back.

Step 12: launching the rocket-ship

A good VC will take your business far, and that’s where I’ll end it.

Some further reading

If you haven’t read enough already…

“Valuation – Maximizing Corporate Value.”
“Crossing the chasm” – on tech-marketing, -sales, and -strategy.
Venture Hacks’ Term Sheet Hacks – on investors, mostly
Ask the Wizard – on lot’s of interesting entrepreneurship problems
TechITEasy.org – on lots of interesting tech & business-subjects, if you dig deep, i.e. use the search.

This may qualify as the longest post on Tech IT Easy, I don’t know. I think I covered the main topics on a global level and obviously there are plenty of feedback loops and some short-cuts, but please let me know if there’s things I missed!

Vincent

P.S. I’m always interested in building great companies, as well as discussing this topic. So if you’re a smart (tech-)person, looking for a biz dev. guy, or you just want to discuss you idea in confidence, feel free to give me a shout.

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iPhone 3G, enterprise and the importance of mobile operator

Kari Silvennoinen — Wed, 11 Jun 2008 10:02:13 +0000

Okay, I was wrong at least on one count. iPhone 3G will hit Finland and pretty much everywhere on 11th of July and I wasn’t expecting it before September. Other than that, I still agree with my previous posts about iPhone (before European launch and after it) and smartphones in general.

One thing to keep in mind is that iPhone 3G is still mostly hype. It’s not available yet so we are seeing just Apple’s marketing material and also I’ve no idea for example what my operator’s (TeliaSonera) plans will looke like. As I’ve written in my previous posts, I still expect carriers to earn premiums from internet access fees. In the US, we already saw that the 200 USD price reduction was more than balanced out by a 10 USD increase in AT&T’s data plans.

The fact that iPhone 3G will be priced at maximum 199 USD is meaningless. I can get a Nokia N95 for (the law-mandated minimum of) 1 euro and the USD/EUR exchange rate isn’t that bad yet. Comparing iPhone’s max 199 USD subsidised price to other, unlocked, smartphones is worse than comparing apples to oranges (or, as someone might say, lemons). I can only assume that for some reason, in the backwaters of mobile world (aka the US), iPhone is the only subsidised smartphone available. Otherwise, for example, this post announcing the death of smartphone market doesn’t make any sense. As I’ve pointed out time and time again, the mobile markets are totally different around the world. The main reason for this is the mobile operators who have quite total control of the whole value chain. I think Apple would really love to learn couple of their tricks.

I’ve found it strange that many U.S. websites somehow say that iPhone “killers” and its competitors are some never-heard-before handsets – and the only apparent similarity is that they happen to have “touchscreen”. I’m pretty sure Apple isn’t worried about these also-rans because I’m guessing they’re not in the same markets Apple is aiming the iPhone 3G at. The first market is the normal enthusiasts market Apple sold the 1st generation iPhone to. This is the market where “cool”, features and such are important. Compare to how Apple markets iPod. This is why iPhone 3G has 3G, GPS and 3rd party apps.

The second market is “enterprise”. Steve Jobs spent a long time talking about how iPhone 3G and Fortune 500 companies are best friends forever and for a reason, the first major critical backslash to 1st generation iPhone was that it wasn’t “business-friendly”. This market is now dominated in some countries by BlackBerries and in some other by Nokia’s E-series. This is why iPhone 3G got Exchange and Office document support.

Unfortunately, the latest (and in my opinion, misguided) trend in corporate IT is “mobile device management”. See, for example, Nokia’s Intellisync. Fortunately, most companies’ IT systems are so vendor-locked-in that it’ll be years before they can even dream to get anything beyond Exchange to mobiles, so this doesn’t really matter. But, the control-freak nature of corporate IT means that iPhones aren’t still “enterprise-ready” unless they can (if they wanted to) lock the user out of using iTunes-functionality of an iPhone.

Anyway, let me reiterate the numbers: “Smartphones” make about 10% of the global mobile handset market. About 50% of this belongs to Nokia and Apple is third with appx. 7%. 18,5 million Symbian phones were shipped to consumers in Q1 2008 alone. Also, Nokia makes most of its profits from its low-margin phones.

Don’t get me wrong, I have nothing against the product itself. My main point is that it is easy to fall for all the hype and marketing fluff going around. It is way too early to call Nokia, RIM, Motorola or Samsung irrelevant and my guess is that Nokia will still lead the market – their current volume is just so huge. Apple is no doubt one of the big boys, but one of the reasons is that the market isn’t that big to begin with. But there’s nothing wrong with that, as this is exactly how Apple operates with its laptops. Its niche there is the high-end, high-margin, over $1000 USD laptops – a niche it has a nice 66% market-share in.

So, iPhone is one of the phones I’m considering now that my current plan runs out. The problem isn’t iPhone as a product. The main barrier is my mobile operator, which in addition to sucking also charges pretty nicely for data – and without internet access, why would I want an iPhone? I already got a mobile phone and an iPod and in their normal use, I couldn’t care less about things like UI or touchscreen (which would mostly touch my pant pocket). It’s the other functions that make iPhone great. For me, it’s the mobile operator who makes or breaks iPhone and also the reason why I don’t see Apple ending its exclusive deals anytime soon.

All the smartphones, and especially iPhone 3G, are designed for a world where the cost of internet access is not relevant. The only people living currently in that world are business users. Do not forget that the true clients of phone manufacturers are the operators themselves and it could be argued that the true function of their phones’ features is to make “value-added” profit to the operators. Want to guess why iPhone’s Bluetooth is still crippled?

PS. And seriously, many of the “innovative” applications of iPhone have already been done for the Symbian like ages ago. For an example, see how many people have suddenly reinvented Jaiku Mobile et al. True, it doesn’t really matter who does it first, but who does it best.

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Paul Graham – from social shyness to patronizing

ceciiil — Tue, 03 Jun 2008 11:21:01 +0000

Hi ! it’s Cecil here. (A copy of this post is also available on heavy mental)

I’ve been quite upset lately by a few essays from every blogger’s darling : Paul Graham. Don’t get me wrong, I don’t have any problem with Paul Graham writings about start-up (there or there or there) or Lisp : his background speaks for itself, and one will hardly find any blogger offering more insight regarding these topics.

How art can be good (ouch !)

The problem appears when he leaves his area of expertise. At that point his peremptory voice, fed by his success in IT business, starts to sound a bit annoying. I already have been quite surprised when I read the one about art. Our relationship to art in all its forms has been one of the main subjects of my thoughts for the last 20 years. The bottom line is rather hard to swallow “listen boys and girls, I’ve studied art in Florence and I found out, so I’m gonna tell you How Art Can Be Good and when it just cant“. I really felt uncomfortable about it : the essay was rather childish and narrow-minded, at time to some embarassing extent. Same with philosophy : just by reading the title you dont feel like reading any further.

I was just as uncomfortable reading lies and kids : it reads as if he doesn’t have any, or they just are abstract incarnations of the child concept. Then there is this essay on school and teenage popularity concerns, where basically junior high school is presented as the worst place on earth, and it is compared to prison and, worse, Manhattan society wives .

Paul just jumped the shark with the last one on Cities.

As of this writing, Cambridge seems to be the intellectual capital of the world. I realize that seems a preposterous claim. What makes it true is that it’s more preposterous to claim about anywhere else

Thinking about a intellectual capital of the world is useless. Especially if the conclusion is the place where the author lives. The bits on London or Paris are terribly naïve and missing the point. Whoever is using the word hip for London or art for Paris can only have a vague understanding of what he is talking about. In addition, big blocks of human culture are completely overlooked here : how about Tokyo ? Shanghaï ?

Hackers are not Painters (thanks God!)

So far I didn’t really feel like blogging anything about that since Paul still is referenced on a regular basis on some of my favorite blogs. But the above is just preposterous indeed. So I have been looking around and via Coding Horror I found this brilliant and sooooooooooo funny post on Idle Words about the famous Hackers and Painters essay. Best parts :

To which I’d add, what hackers and painters don’t have in common is everything else. The fatuousness of the parallel becomes obvious if you think for five seconds about what computer programmers and painters actually do. Computer programmers cause a machine to perform a sequence of transformations on electronically stored data. Painters apply colored goo to cloth using animal hairs tied to a stick.

The reason Graham’s essay isn’t entitled “Hackers and Pastry Chefs” is not because there is something that unites painters and programmers into a secret brotherhood, but because Paul Graham likes to cultivate the arty aura that comes from working in the visual arts

Also remark that in painting, many of the women whose pants you are trying to get into aren’t even wearing pants to begin with. Your job as a painter consists of staring at naked women, for as long as you wish, and this day in and day out through the course of a many-decades-long career. Not even rock musicians have been as successful in reducing the process to its fundamental, exhilirating essence.

But after a while, you begin to notice that all the essays are an elaborate set of mirrors set up to reflect different facets of the author, in a big distributed act of participatory narcissism.

Looking into Paul’s ferocious defiance towards school and corporate culture, it is easy to imagine Paul being a rather shy person, who would rather jump in the ocean than being part of anything looking like a team. I believe that his study of Art and Philosophy probably have been for him an attempt to gain back some of the popularity he has not been enjoying as a nerd in junior high school. Whatever the reason behind these choice, it still proves an amazing strive to learn such strict disciplines.

Writing a blog post ranting about something is one thing. Writing essays and coming up with theories engraved in marble is another one.

Great mind drowning

Computer science (including the related business) is a rather young discipline ; as such, a discipline you can embrace within a lifetime. Which is not the case of art and philosophy. I believe this is why his pattern of thoughts fall flat when he tries to tackle these disciplines.

Reason is surely not the main engine behind artistic creation, who, besides, has no functional purpose whatsoever. There is no way you can cover in a comprehensive manner a Philosophy topic, like you would a programming language or an operating system. This is quite embarassing to see Paul’s great mind whenever it comes to produce valuable sense and unwavering reasoning in IT business, drowning like it does in other areas.

Hackers definitely are neither artist nor philosopher. And reading these essays on the topic, I have the feeling this is not such bad news.

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Another look at Nintendo's blue ocean strategy

Kari Silvennoinen — Fri, 30 May 2008 10:19:44 +0000

Nintendo released the new channel, Nintendo Channel, for Wii recently in Europe. It was released about a week after WiiWare, the channel that enables online shopping and downloading of games. WiiWare is interesting in the sense that we can easily expect some really amazing stuff coming out through that channel, while Nintendo Channel is something that exemplifies why Wii is different from other consoles.

It is an interesting channel in regards to Nintendo’s blue ocean strategy (discuess earlier here by Jeremy), but like many other aspects of Wii, it leaves me wanting more. The channel is basically an advertising/marketing channel for Nintendo. You can download demos, see information and trailers about upcoming games, and some other stuff. One of these additional functionalities is the feedback section, where you can submit feedback back to Nintendo on the games you’ve played on your Wii. You can also enable a tracking feature so that your Wii will send information what you do (the same info it shows in your Message view) to Nintendo and in exchange the channel will recommend you titles and allows you to download demos for DS. All in all, really simple stuff, but the execution is really nice – and dead simple.

I know that one main aspect of Wii is its simplicity and many of the things I think I’d want it to do would just make it too complex. I’m well aware the limitations of the console – most of which seem likeconscious design decisions by Nintendo. The hardware has been optimized for cost and really makes the developers focus on the gameplay (instead of graphics, like on the other next-gen consoles). The software and mutliplayer are made as child-safe as possible, to the point that mutliplayer racing in Mario Kart Wii feels like anonymous one-night-stand-orgy. It’s a bit like with most Apple products, you know the limitations in (mostly) advance and accept them as they are the reason “things just work”.

Remote would be one solution to aforementioned problem, but that of course is totally infeasible solution. Wireless broadband adoption of today doesn’t also warrant spending too much time on making I find it sad that some innovative features are underutilized with the Wii. I’d love that my Mii character would actually be “in the cloud” and propagate through my friends, carrying over my settings and accomplishments. Now, my Mii can only propagate a read-only copy of its appearance across other Wiis. No doubt the authentication scheme for such feature would be a nightmare. I like to fantasize something like this was in the initial vision of Wii, because otherwise I can’t understand why the Wii Remote has storage capabilities. Tying your character to a WiiMiis the global representation of my Wii gaming they could be. The ubiquoitus rules of unlockable content on console games mean that, as it is today, my gaming experience depends on how far the I or owner of the Wii I’m playing has progressed in a game and not how far I have progressed in some Wii. I guess this tradition will remain for all nomad Miis who wander from a firend’s Wii to another.

The current “next-gen” consoles have me split. While Wii is truly exciting and something new, it is a bit too centred still on the age-old Italian plumber. The Playstation 3, on the other hand, has only GTA IV going for it (okay, and Super Rub-a-Dub) and it’s twice the price. Xbox 360 just doesn’t feel right, and that it has like twenty different editions á la Vista doesn’t help. The Wii of course has lots of hidden fees in form of accessorizing (Component cable, Wii Wheel, Wii Fit…), but the other consoles are guilty of this to some extent too.

What interests me in today’s console gaming is multiplayer, both on my sofa and online. Both of these aspects are taken more into account on the Wii, where most gaming has been designed as a group activity. PS3 and Xbox360 have taken the more traditional PC way of mutliplayer and have focused on online only, which is stupid as the expectation that my friends would be online at the same time at their own homes playing the same game is really, really far-fetched. On the other hand, some games insanely enough do not supportmultiplayer on the same console even if they have online-multiplayer. This anti-social tendency I can understand in story-driven games as GTA IV, but not otherwise.

I did answer on Nintendo Channel’s feedback section that, in my opinion, Mario Kart Wii is, in fact, a Hardcore game (as opposed to casual). Once you’ve passed the easiest cups you start to see the classic Nintendoesque features. The game cheats as much as it can in the hard mode, just like in Mario Strikers Charged Football. It’s amazing just how in the last 10 meters or so, I’m hit with all the suffering theWii can inflict on me (red and blue shells, lightning…) just like it’s able to make a goal in the last second despite me trying to tackle the seemingly invincible player with all my players.

It is really exciting to see how Nintendo tries to do new innovative things with Wii. This has been no doubt a risky decision, but it seems to have paid off as Wii is still outselling other consoles, even though its pricing is exactly the same as on the launch date. The other consoles have seen aggressive price cuts, no doubt in part response to the success of Wii.

I’m quite sure that Wii can and will probably surprise us in the future, but I’m afraid the initial design decisions of PS3 and Xbox360 means that they can only replicate or improve, but not innovate. One reason, I guess, is because of people like me, who want to expect certain things from them. There’s no room for innovation when you got expectations on top of long traditions. In those circumstances you can only perform.

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The Poor Man’s Business Model—How Out-of-the-Box thinking can generate tremendous value for customers

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Thoughts about Tech IT Easy, inspired by my time in Paris

Sell Paris to me in 2 days

Some questions to finance geeks out there – on learning about investing

What I'd like: an end to ALL bureaucracy, dammit!

A Study Trip to California, full of Finns this time

LeWeb '08 Conference sucked big time

Thoughts about the New Venture business-plan competition, part 2

The truth about headquarter locations

ULIKE.net: on Community & Culture

Why the Rhine Capitalist model of regulation is the right one… for now

Why do startups fail?

The (pre-) entrepreneurial process

iPhone 3G, enterprise and the importance of mobile operator

Paul Graham – from social shyness to patronizing

Another look at Nintendo's blue ocean strategy

Thoughts on Intellectual Property and dealing with everything else that is out there