On a roll

No post for two years and then two in a day.

The text and video here of Hillary Clinton's presentation in the Netherlands this week describing US policy and ambition for an open internet. She is very impressive and the speech to my ear is compelling both because of the quality of the arguments made and because I agree with them.

What makes this horribly confusing then is that she speaks as if for the US and yet the same US (through Congress) is pushing for SOPA which will destroy the ambition for the internet that she describes.

Though she is Secretary of State, the actions of Congress do make it seem as though her speaking for the US is too much of a reach on this particular issue.

Talking of cleft sticks.......

I have been fascinated by the events over the past week concerning Britain's participation, or lack of, in Europe. I have worked pretty hard to understand what is going on and read extensively across the media to try and form a view as to what Cameron's veto actually means. I do not think I am there yet, but here is a list of things which I believe to be true based on that reading.

(i) Cameron outmatched

It seems obvious that when it comes to politicking Cameron is still in short trousers compared to the mastery displayed by Sarkozy. Sarkozy did not want a rewriting of the treaty that Merkel proposed but was able to sidestep it thanks to Cameron, upon whom he could easily pour all the blame. That Cameron insisted that his demands were trivial matters not at all; it was easy for Sarkozy to turn them into requests which did not meet the prevailing mood in the room to put national interests aside for the sake of the EU. Chapeau!

How did that come to pass? Largely through lack of preparation, though one has to wonder whether the Conservatives also fancied themselves a little too much in terms of negotiation and political maneuvering. The last time they were in such a position was in negotiating a coalition with the LibDems. In that case, it was the Lib Dems who turned up with knives to a gunfight. In that case though the LibDems were outmatched but did not have any time to prepare. Cameron has no such excuse: both he and his Euro-connected Deputy should have recognised that weakness and worked doubly hard to compensate for it. Cameron came too late and was easily beaten. It was his own fault.

(ii) This is not the right end point

This cannot be the final outcome. It is not sustainable for Britain to remain at the fringes for its own sake. It is naive to suppose that 26 members will not evolve positions on key topics and then spend time waiting for Britain to catch up when it joins for main plenary. See above and see the multiple references to Lyndon B Johnson's earthy refrain: better [to have him] in the tent pissing out than outside pissing in. Cameron's demands and subsequent veto give further credence to the observation that Britain is too dependent on the Services sector (and particularly banking), and therefore it cannot now be out of discussion by its own volition which will look to shape how that business is conducted in Europe. So, if this is not an outcome which Britain can sustain how do we change it?

I can see three outs:

First, the Euro may collapse. If it does, I dare say we'll hear about the prescience of Cameron from his own PR team. There will be a moment then to rejoin the conversation and look to how a single market is rebuilt. There may be some initial reluctance from Germany and others to warm to Britain but in the chaos bygones will have to be bygones and even the most ardent anglophobe would be hardpressed to suggest that it was Britain's fault.

Second, the Government fails. I do not think that the math supports this. I am sure Clegg has been tempted to consider throwing his lot in with Labour but the thought can only be fleeting. The LibDems and Labour do not have enough to carry Parliament and the Conservatives one suspects would actually welcome an attempt to govern alone. Instead, the LibDems are put to the sword and ask whether they wish to be in or outside of the tent. Then, there is also the issue of how electable Ed Milliband is. At this precise moment in time I imagine every Labour supporter is bemoaning that his brother David did not win the Leadership contest: he has the proven chops on the diplomatic stage. Something which is sorely needed now.

Third, Cameron finds a path to renegotiate. The door is left ajar here: everyone appreciates that a Euro solution would be stronger with everyone in the boat; Germany-France would probably welcome a sharing of the load; the long tail would welcome not being quite so overwhelmed by France and Germany. To every player there is a story with which the UK can re-enter. If the lack of preparation was the principle cause for the need to veto, then use this window now while the markets are clearly still jittery to find the face saving solution that allows Cameron to claim victory while not taking it away from others (notably Merkel and Sarkozy). Naive? Possibly, but isn't that what negotiation and politics is about - finding a path to keep all stakeholders happy. Nobody is that happy at the moment, not even Sarkozy one suspects when the adrenalin of having got one over on Cameron begins to fade. I'd note also that this has to be the only path open to Clegg as a constructive way forward: I think the LibDems as a political force is an issue in the balance at the moment.

(iii) This was not intended

The lack of Government spin, the lack of communication, the lack of a coherent plan of what next, gives you all the indication you need that this was not intended despite Cameron's statements that he would take this path if he had to. Bluster in advance to satisfy the skeptics then provided a trapdoor of his own making at the negotiating table. I imagine that there has been a lot of handwringing going on as the core team tries to work out what next. I actually take as a good sign Nick Clegg not being present for the session yesterday; it lets me imagine that this was a deliberate and agreed act in order to provide room to leverage the open doors I speak about above. Or perhaps that is wishful thinking.

(iv) How hard you have to work to understand the topic

This is a complicated event to understand both politically and economically but the newspapers try too hard sometimes, and too early, to put their spin on things before it is clear what is or has actually happened. The stock of the Financial Times and The Economist has risen for me through this process as both papers appear to have had real insight into the discussions; I have found the New York Times independent view to be useful as well as its use of guest editorials; The Guardian has had very good coverage, though you need to decode everything for its pre-determined view against Cameron; The Telegraph falls marginally behind in terms of completeness compared to The Guardian and has had less bias perhaps due to the uncertainty. The majority of my reading has been online, so I cannot comment on The Times coverage (due to the paywall) and the only print copy I saw was The Daily Mail which was as unsubtle as ever in telling me what I ought to be thinking.

The BBC has been a confusion of coverage, covering the event like it does its football with a healthy smattering of what people around the country think via twitter, email and text. It really should focus on promoting the thoughts and opinions of its own well connected correspondents. Tweets from Joe Public as entertaining byplay during football commentary has its place; in the midst of the largest political moment in recent history it strikes an odd tone.

The Bagehot Diaries in The Economist from where you can also visit more extensive coverage.
Any number of articles from the FT such as this one which exposed the lack of preparation or this guest editorial offering a view from France.
The New York Times is following events here and its guest editorials/commentaries are insightful, but beware they all come with a strong view e.g. here.
The Guardian's coverage is also complete and can be found here.

Cultivating entrepreneurs

I often dip into Ted.com for insight or inspiration into any number of topics. I enjoyed this speech below on Entrepreneurship - a topic dear to my heart.

I once met Steve Ballmer in a small forum when I was CEO of my own start-up (the Accel funded Mippin) and the thing that impressed me most about him - aside from the fact that he was completely different from the persona I expected - was his passion to encourage his children to innovate and experiment with technology.

As I have written before, we miss this spirit in the UK. We are too straight-laced and fearful of failure. I hope to inspire my children to innovate (fighting my cultural inheritances that they might fail in the process).

Customer service shenanigans

An astute piece on Apple's recent iPhone customer service forays from John Naughton, one of my favourite tech writers. There are not many companies that could have carried this off and even in this case there is no guarantee that it will in the long term - it may yet bite back.

Crazy British Entrepreneurs = An Oxymoron

You'll always find an exception to the rule, but I think you'll be hard pressed to prove that the UK has the right cultural backdrop to create and sustain a vibrant hi-tech start-up community.

When I first announced to my family and group of friends that I was going to quit my "high-flying" job to try and create a company with no guaranteed funding, my parents took a long deep breath and my friends all looked at me quizzically as if I had lost my mind. In their minds, and in the minds of most, to embrace something which has such a strong chance of failure is seen as potentially suicidal from a career perspective.

I think that we British lack a little of the 'devil may care' attitude that our early heroes showed: the Mallory's, the Gordon's, the Scott's - coincidentally all famous for their catastrophic failures and yet wildly lauded for their heroic acts. Whether we are led by the media or the media is a mirror image of our values and social code is another matter, but what is undeniable is that we are surrounded by often vitriolic headlines for people's failing at something, often after we have put them on a pedestal. This is a reflection of life at large. We are too constrained by fear of failure as a result.

The truth is that failure in a start-up is a wonderful thing. It is a true MBA - one founded on experience rather than text book learning, providing opportunities for dabbling in many things which would not occur in a large company environment. From my time in a start-up I can look on real experience gained in: Product Management, Engineering, Leadership, Marketing, CRM, Customer Care, Recruitment etc etc etc. Where else would you gain such an insight?

I'd do it again - with the right idea. But even then I would be constrained by providing security for the family and a change in work:life balance which means that I like spending time with my family which would be less hours ploughed into an early stage business. In other words, I am too old now. I would be uncompetitive with other start-ups fuelled by young entrepreneurs fresh from college, used to living on a few $ per week.

Not all of the US is different from the UK but Silicon Valley is a place where a CV is not a CV without a failed start-up on it. The value of the experience is understood and counts as a positive rather than a stigma. I remember once having the pleasure of seeing Steve Ballmer speak in a small intimate setting (I recall being taken aback by how different he was from his brash public persona), he spoke eloquently about how he'd love his daughters to play around with technology and try a few different things out. He'd encourage them to fail as a valid part of finding the right path.

In the UK, I think we are too uptight for that and too afraid to fail. (Do you not see this in the England team at the current World Cup?)

Trigger points for this post:

This article with Eric Schmidt saying Europe has to find a way to embrace entrepreneurs; and, this extraordinary letter to employees from the CEO of Woot! It is inconceivable to me that I could find someone in the UK that would write such a letter and even more unbelievable to me that I would say that we need some of this DNA in the UK. But we do.

Kids of Today

I have been to a few conferences in recent years which have included a panel of teenagers sharing their experiences of the web and impression of different brands. I always find these sessions insightful and amusing.

I received this email from a colleague and loved the comment on Twitter in particular.

A VC-buddy of mine went to this event this week in Menlo Park. He was amused by the ever-popular teen-panel, where about 10 kids between 12 and 14 were asked about their consumption of media and use of technoloigy, with the following summary:

• Two services they could not live without are: GMail and Facebook
• When asked whether they would continue using their essential services if they had to pay $5 a month, they said no and that they would just switch to free service and friends will follow
• "Twitter is for Journalists and old people"
• Linear broadcast TV is not used; several mentioned that TVs have been disconnected in their houses
• In trade off between watching TV on e.g. a 42" plasma or a low-resolution laptop, the latter wins because of non-linear programme choice and lack of parental supervision
• Which would you rather have - iPhone or Droid? One third each plus one third don't know what Android is or whichever is cheapest?
• Might consider paying for music for a band they really like, but unlikely

AdMob: building step by step

I noticed on GigaOm that AdMob announced its purchase of AdWhirl. It is an intelligent move from a growing company from whom we have come to expect little else. AdMob proliferated initially from a low value but hugely scaleable ecosystem which basically created an efficient clearing house for advertisers and publishers eager to explore the mobile space.

In reality these advertisers were those already active in the mobile space, arbitraging buying traffic from AdMob and monetising their inventory through various means including AdMob ads. Several businesses were built in similar vein on the desktop through Google. Quality was not high and eCPMs seldom cleared $1 but the poster children of AdMob's early evolution were social networks like Peperonity who had never seen higher than that anyway.

With the advent of the iPhone, AdMob saw (before anyone else) the opportunity for a new type of mobile ad which most people more commonly know as display - though I do not remember AdMob ever referring to them as such. The problem with display, even on a single platform, is that it is not as scaleable a business. Creative types get in the mix, agencies start to muddy the waters and all of a sudden there is a lot of grit in the wheels. AdMob needed to work a lot harder for its money and, as the market grew and people saw the opportunity, the market also fragments.

Now, AdMob has done three smart things all in one. One, it has bought in a dedicated Ad Aggregator and being 'in' means that there is no bridge between the user and AdMob, it will have the data it needs to target its ads more effectively. Two, it has bought a company specialised in creating an exchange of different ad networks (very similar to Google's model in the desktop space) and now can focus on providing the right kind of targeting information to those networks to maximise benefit for Advertiser and Publisher; it can focus on the day job again of being an efficient clearing house rather than a sales house. Three, by making it open source it is basically saying - he is an efficient ad exchange for mobile - it's free, feel free to use it - the more the merrier.

Each time I think AdMob has run out of steam, it makes another intelligent step and may yet make the mobile space its own.

HMV: a lament

I happened to walk into an HMV for the first time this year on Sunday and thought to myself 'Woolworths'. Isn't HMV another dinosaur one step away from the retail dustbin?

In diversifying away from the ever-declining sales of CDs, HMV has struck upon the idea of selling DVDs and Games in exactly the same way, eventhough both of these areas are subject to the same digital competetion as CDs have been.

This store format needs a revolution.

The world has gone digital, except HMV and others of its ilk. At the moment it is engaged in lazy retailing where it can continue to churn the handle for a number of years with a pretty much predictable result until such time as some catalytic event wakes people up to the fact that it is simply no longer relevant.

It should of course be investing in ensuring that it is the dominant internet destination for music, games, films purchases rather than iTunes and Amazon but here it is anonymous.

But, more than that, a little imagination in-store can be used to make sure that HMV realises the benefit of its physical presence in a way that Amazon and iTunes cannot. Let's steal ideas from Apple:

- in house 'geniuses': DJs/mixers who can interpret your tastes to recommend new artists, create a mixed bag for you, author a new tune with a suggested sample track specifically for you
- listening stations where I can interact and talk/IM about what I am listening to with other listeners not just in store but across the HMV network
- take a leaf out of the MTV era (it's been around for ever FFS) and make some visual displays, make them interactive, full of soundbites with clear offers

Your mission: make purchasing online seem like a souless and friendless experience. Music (in particular) is a social meme. Nobody likes to go to a concert on their own.

Shake it up a bit. Fire some people. Take some acid. Whatever. Just take up the fight before you become another Woolworth's flogging what's left for pennies.

Not all doom and gloom

I picked up this quality post from Fred Destin (from Atlas) this morning. There is a difference in the VC industry at the moment between those believing that the current environment heralds a significant shake-up in the number of VCs and those that think that this is a temporarily fallow period. I agree with Fred on the former but also with his assertion that entrepreneurs should not feel daunted about getting started in the current environment: it is a great time in terms of talent on the market, (relative) lack of competition and providing focus.

So whose problem is it?

The wonderful thing about Apple and Google moving into the mobile space (how sad that I do not mention Microsoft* in the same breath) is that they approach it without the usual constraints and filters of the existing players.

Example 1: App Stores. Nokia has had Download! for years but needed Apple's fresh take on how it should be done to wake up and realise that its own realisation was poor and out of touch.

Example 2: Apple's iPhone completely transformed the way that phones look and the touch screen with the "pinch" is the most significant innovation in hardware design for many years. Again, no established mobile player could think so out of the box.

Example 3: Nokia makes Symbian open source in response to Android's shake up of the mobile OS layer. Why didn't it do so before? Because it was embroiled in the space and could not think without these limits.

There is an interesting storm brewing at the moment about the roaming costs of the iPhone and Android devices. One thing is that people are using them to browse more than is usually the case but added to that the apps on them are regularly connecting to their servers to report back on usage and to facilitate email download. You are only partially notified that this will happen when you download them and it is easily forgotten. So, you go abroad, barely use your phone and not for data at all because you know it costs you dearly, and still receive bill shock when the next one arrives.

So, whose problem is this?

Well, at the moment it is the consumers but it is interesting to see who will blink first:

The operator view is this is a phone issue and the manufacturer should fix it by allowing complete data disablement.
The web view is that this exposes poor customer value created by the operators and they should fix it.


The web giants are clearly in the right in this case as regards customer value. I suspect that they saw this one coming and clearly strategised that the only way to solve these inefficiencies would be to dump the problem in the operator's lap.

Well, it is being dumped as we speak. Let's see what happens next.


(* The thing with Microsoft is a little ironic. When Microsoft began its move into the mobile space it was still 'the' company to fear from a carrier perspective and so it was dealt with very gingerly and with the utmost caution = slow progress. It also sought to sell to the operators which means that its OS was far more geared to operator requirements than either iPhone or Android. And yet, despite this it has not become a meaningful player. I think that had it started its sales run a few years later (when Google was becoming a perceived threat to the operators) or if it had the vision (requiring a complete philosophical transformation) to create its own Android equivalent it would have made for a different story).

UPDATE: A far more detailed and profound post on this data issue can be found at Disruptive Wireless - here)

Nokia World - am I the only one disappointed

Just a short note.

A couple of years ago Nokia made a big play that it wanted to be an internet play and not a device manufacturer. It undertook a phenomenal effort to transform its business, people and processes to this end. I thought it visionary and absolutely the right call.

This year from Nokia World the headline announcement was the launch of a device - the N97, a potential iPhone killer.

I cannot contain my disappointment. It has nothing to do with the device - it might be brilliant.

But rather to the outsider looking in, the conclusion has to be that rather than Nokia transforming to challenge the established internet giants in a play for the web services layer on mobile, it is sent scurrying back to its home turf because the web giants have beaten it to the punch (with the iPhone and Android).

Nokia is in reactive rather than proactive mode at the moment. It is the best positioned of all the traditional mobile players but even so struggling to prevail.

Everything you wanted to know about Google......

Caught over at Techcrunch - a really interesting presentation about Google written by a French consulting firm, Fabernovel.

All about Google

View SlideShare presentation or Upload your own. (tags: google business)

Recommended Reading

I caught this article by David Wood on his personal blog. It is a transcript of his keynote to Mobile 2.0 this year concerning the role of the mobile operating system, open source and symbian's evolution. It is worth reading. (The wonder of the internet that something like this is so easily shared - you did not have to be in San Francisco to benefit from it).

Mary Meeker Presentation

Here is the latest offering from Mary Meeker of Morgan Stanley. Thought provoking as always.

Mary Meeker Web 2.0 Presentation

View SlideShare presentation or Upload your own. (tags: meeker tech)

My main takeaways:

- mobile web really set for mass market adoption (crossing the chasm) from 2010
- this should coincide with recovering advertising spend and technology spend
- Amazon and Google are well placed
- Microsoft and Yahoo! are not
- online ad inventory in over supply; she does not mention mobile but this is the case in mobile too.

Lots to ponder.

Twitter again - at a crossroads

So another post on Twitter. It is a fascinating case study and I am not the only one that thinks so - see Weaverluke's paper.

I think Twitter is at an interesting juncture and its actions in the next three to six months will define whether it becomes a platform, becomes a mass market brand or disappears. All three scenarios are possible.

Plagued by operational difficulties caused by having a intern design the architecture, Twitter has spent the last few months in physiotherapy being coached how to walk again. By and large this has been achieved - with the occasional wobbles we have seen this week.

The interesting element is that Twitter has open APIs to its architecture as all good web2.0 companies should. Or should they?

Gradually, as Twitter's product managers have been sitting on the bench waiting for the engineers to make sure that the court is playable, other companies have made use of that API to create their own Twitter experience. The truth is now obvious. The experience created by the likes of Twhirl and Slandr (the two I use most out of a long long list, even recommended by Twitter) means that you never need go near the Twitter domain again.

So, what now for Twitter? Eventually it will need to make some money. How is it going to do that? You'd have to argue that they need someone commercial on the team at some point - its initial use of SMS was created with the US in mind and would have bankrupted smaller African nations let alone a tech based start-up. Now it is in a situation where it arguably cannot monetise the customer directly. Indeed, others are - only this morning I read of a new initiative for people to place ads in their own tweets to be able to monetise them. (I shall not link to it - it's not my idea of Twitter).

Either:

Twitter needs to be the bitpipe and engage in an interesting play for web2.0 - charge for its APIs (would this be a first? I cannot think of another example from this new world). I actually think at this point it is the smarter play.

Else,

It needs to put the platform issues behind it and build or buy its way to leading the user experience again. Its acquisition track history is not good. It acquired the excellent Summize earlier this year and yet the functionality to the market is less than it was when it was acquired (I miss Labs!!). So, it is now up to Twitter to compete again hundreds of smaller players - already monetising the traffic that Twitter is not.

If it were not for the economic downturn and the fact that these players all rely on the API for their business, I'd say this strategy was doomed to fail.

With a bit of manoevering, judicious use of both strategies could see Twitter emerge as the master of its own genius again. Can they do it? Do they have the team to do so? Time will tell.

You can follow me here.

New World: Old World

A short post to make note of an interesting paradox.

Here we are in the nascent and emerging world of web 2.0 where - we are told - that the community rules; that the days of broadcasting are over; and, that brands must engage in interaction and communication with their audience to make their way.

A brave new world? Perhaps. But take a look at these leading examples from Twitter (which has me hooked) which, by general early adopter consent, is at the vanguard of all that web2.0 represents.

These are four examples of people using Twitter with large followings. When they speak their words create waves in the twitter community (ok, so I exaggerate a little in the case of Jemima but I wanted a UK example and she is great). But the key point is not the number of followers but the proportion of followers to those that they choose to follow in return. Without the 'follow' back there is no return leg and no chance of conversation.

I'd argue that in these cases, either the 'publisher' or the audience at large has re-created the existing publishing world paradigm where "I talk and you listen" or perhaps "I want to hear you talk". In this instance, Twitter is nothing more than any other distribution channel or a place where the audience can gather to listen. Not very web2.0.

If this is worrying for you then you should know that the profile in the bottom left is the Founder and CEO of Twitter!

This is the paradox that I mentioned above. Of course, I could leave the post there and leave you with the impression that all tweeters are like this but here are some examples of people who are either champions of the community movement or are applying its principles.

Let's hope this bodes well for Barack Obama's Presidency (fingers crossed) that in the twitter world he proactively seeks out conversation with others (he has fewer followers than those he is following).

British Customer Service

British Customer Service? An oxymoron? Possibly.

Even in cases where politeness appears it is only on a qualified basis.

I caught this snap in a traffic jam on Monday. I was amused by the word 'frequently' on the back of this truck.

"Frequently any inconvenience is regretted"

Only in England would the word frequently be used. It allows for all scenarios from 'sorry' to 'piss off'!

I am hot on this topic after a recent two week trip to the States, where eye contact and just general interest in well being (for as long as you're being served) are standard. I have only come across two instances of good service since I returned (in Starbucks in Fulham and Fat Face in Richmond). More often as not one is met with aggression, complete disinterest or lack of attention. Excuse me now while I get into my Victor Meldrew outfit.....

Financial Armageddon: Fasten the seatbelts

With the economic crisis sending shockwaves around the world and no-one yet knowing where the bottom is, it is difficult to know what the final impact will be on the mobile industry and start-ups like ourselves.

Below we explore some of the themes that we are likely to experience and what this means (Note: if you leave this post before the end it will seem unbelievably depressing but there is a significant ray of hope at the end):

Industry Impacts
- Operators focus in on churn management. Margins get squeezed. Enabling mobile data takes a back seat.

In such a tough economic environment, the end consumers are going to look to make savings wherever they can and one of the most regular bills are those from the operators. Accordingly, there is going to be a huge effort from the operators to retain customers. This will take the strategic focus off development of the right conditions for the mobile web (e.g. all you can eat data plans) and introduce a slow down ramp to its development.

Financing Impacts
- VCs have trouble exiting. Have more difficulty raising funds than usually the case. Keep cash in house rather than invest in uncertain times.

That the number of VC exits this year is already significantly down on last year is no surprise given that 2007 was a record year for some firms, but even so it is abundantly clear now that selling into a freefalling NASDAQ is not on. Without that measurable return on funds, VCs become a little more cautious. Given that the industry works in a kind of "if you're interested, I'm interested" fashion, the nervousness will be infectious. The implication for start-ups is to tighten the belts and make money last longer.

Revenue Impacts
- The advertising industry begins to slow. Mobile advertising money reigned back. Less cash coming in for those relying on advertising.

You need only look at the front of Premier Football League shirts to see that the advertising industry will be taking a hit - high profile spenders such as Northern Rock, AIG, XL are in financial trouble. In addition, consumer spending is down so there is less value to be marketing into. A higher proportion of spending will be in sustaining/creating brand value and a lower overall sum will be invested in trying to grow the overall market (why spend money now trying to persuade someone to buy a new car when you know it is the last thing on their mind?).

Though 2008 could arguably be the year we look back on as the year that mobile came of age and become part of integrated campaigns within advertisers - or at least a firm part of the agenda in planning - its hold on that spending budget is just too new. As spending overall is reigned back, mobile will be viewed as a discretionary piece that can be easily sacraficed. There will still be some spending and experimentation but it will be less than before.

- Consumers look again at their discretionary spending. Ringtone subscriptions the first to fall.

So, if those with a mobile advertising models are going to find it tough, then those with subscription models are really going to struggle. Consumers are going to look to cut meaningful discretionary spending and subscriptions or payments which are large enough to register on the radar are likely to be cut. Mobile subscription providers beware.

Behavioural Impacts
- Start-ups renowned innovation is tested. New models and cash preservation key. Those with positive cashflow breathe sigh of relief.

It is in such an environment that the ability of a start up to innovate is put to the test, not so much in being able to drive new technologies but in how brilliantly they can shape themselves to the environment and survive. Expect to see new models, subtle changes of direction, more conservative growth plans and some innovative guerrilla marketing. Very few new faces will emerge and some will join the deadpool.

- Start-up resolve is tested. Has what is important changed?
It is important to stay true to the things that you believe give you an edge in the first place. In the last cycle similar to this (2001-2002) I saw a number of companies fly to the apparent safety of mobile subscriptions or sacrafice staff to save costs and in doing so compromising their quality. Staying true to your beliefs in the long term. If you begin to compromise that by focusing on other areas you'll lose part of yourselves, our focus and from there, a large number of your customers along the way.

Through all of this, there is great opportunity.

For those that survive:
there will be less competition around;
your brand will have been in the market with less competition for a significant period;
you'll have reduced dependence on VCs;
you'll have more learnings about the user and the market to act upon;
you'll be well placed for any larger players that wish to play catch-up;
you'll be even more convicted on what it is that you bring to the market
and so on

The key through this difficult times is to stay involved. Good luck!

UPDATE: Good post from TheEquityKicker.

Tighten the belts

Techcrunch published a story yesterday which Techcrunch UK followed up on today about the financial fallout and which start-ups might be best placed to weather the storm. The current situation is arguably more serious than the bursting of the bubble during 2000 and 2001. At that time we were in a period of resetting of valuation expectations. This time we are faced with a situation where venture capitalists will find an exit far more challenging (particularly tough after a record 2007). In addition, those at a point in the cycle where raising money for new funds is required will also find themselves working harder than normal.

I am taken back to the 3GSM World Congress (as it was called then) in 2002 seeing fewer of the same companies again rather than any new start-ups.

The key for any start-up at this stage becomes survival. If you can capture viral growth and/or have the ability to generate cashflow in excess of your burn (even in the economic downturn) then you are very well placed. If you are in a position where cash breakeven is not immediate then you need to show nimbleness and determination.

I was Chairman of a company called UCP in 2002. It is to the immense credit of the management team (Christian Lutz and Marwan Saba) that they survived this period through a mixture of tight cost control, tough strategic calls and dogged sales conversion. When the gloom lifted a couple of things happened: UCP looked around and saw that it had fewer competitors than before the storm (some had gone bust and had not been replaced with new money) and that larger players were suddenly eager to break into the market.

Their tenacity enabled them to stay in the game and without that the subsequent purchase by QPass and then Amdocs would never have happened.

The message for start-ups is clear: get your planning right and do it right now for how you will balance the books over the next 18 months. It will pay dividends in the long run.

Good luck!


Here is another article from Techcrunch including a memo from a VC called Benchmark highlighting what I said above about survival being everything.

Life Changing Innovations

I have been pondering technology innovations and the legacy you can leave on the world if you can create something which encourages the mass market to change the way that they live their lives. It sounds fantastic but actually if you think about it, it has been done many times.

Take a look at the list below as my personal reflection. I’d be interested in which you would identify as having changed your life and others that I have clearly missed which are relevant to you. I have tried to steer clear of platform discussion e.g. the internet, the mobile phone but instead focus in on a functionality, design or service which has catalysed the transformation in unexpected ways.

Undoubted Hall of Famers

iPod

One could argue that the iPod only achieved the mobility that the Sony Walkman pioneered in the 1980’s but the integration with iTunes, the sleek design and the cool factor basically made music an integrated part of people’s everyday lives again and certainly in a more pervasive and long lasting way than the Walkman. You never have to not be listening: on a commute, jogging, at home, swimming! For the music labels it has been a lifeline in difficult times (and, if they were smart, a phenomenal distribution channel for alternative business models). It has also been the birth of Podcasts (one of which I am listening to on the plane while I write this), another alternative media channel which enables people to be better informed on any topic, anywhere, at their convenience.

Ultimately, I would be more of an evangelist of the iPod if it were more of an open model. But these two impacts: music in the pocket and the birth of podcasting will mean that even if iPod should die as a brand or a form factor its legacy shall live on. Simply put: podcasts have enhanced my life.

Blackberry

This certainly polarises opinion – called in some circles the Crackberry because of the inability to put it down (although with out the personal hygiene side effects) – but there is no doubt that the advent of the Blackberry changed business behaviour and the use of email within the business environment. It has spawned a lot of copy cats in the form factor which is flattering. But, it is the fact that if someone sends you an email now, they expect that you will have read it if they were to call you on it later in the day. This expectation exists whether you have a Blackberry or not, whether you have ever owned one or not. People expect you to be able to access emails on the road.

It also created a means for team members to correspond within meeting environments in a way not possible previously, and allowed them to do so at least semi-discreetly.

Not as far reaching as the iPod which transcends all levels of society but a definite change agent in business communications.

Skype

Skype was originally marketed to university students. The theory was that downloading a client to be able to use a sub-optimal communication software for free is a bit tedious and, let’s face it, something that the cash constrained will do but nobody else.

However, Skype first exploded in the consumer market amongst the elder generation (Silver Surfers) who all of a sudden found a free and easy-ish way to stay in touch with relatives abroad. The fact that calls were free if you could persuade the receiving party to download the software too created a viral effect which is every marketer’s wet dream.

From there, your definition of cash constrained needs to broaden from the consumer market and we begin to look at the business space. I can ‘hand on heart’ state that Skype will have saved my business thousands of pounds every year based on saved international call charges, particularly on conference calls and particularly when I am roaming.

The benefit of Skype is such that it survives – and flourishes – despite the fact that most calls start with ‘Can you hear me? Can you hear me? Oh good. Yes, I can hear you too’. Though in fairness call quality has become much better and Skype has always excelled in making the download process as easy as possible.

It has transformed the way that cross-border families communicate and the way that small business does business. It is a no-brainer for the life changing hall of fame.

[On a sour note, it has probably done more to raise awareness of Voice over IP traffic than anyone else. This has put the mobile data market back at least four years as operators seek to find ways of protecting their profits from voice calls.]

The Business Class Flat Bed

An odd one, but since working for a start-up, I have come to appreciate the innovation which allows you to lie flat on an overnight journey on a plane (if you are 5’6’’ or less or near flat if not). The point being of course that I always now fly economy which is okay but it would be a big stretch to describe it as a comfortable sleeping experience.

I admire this innovation so much because it was delivered to the market not by an eager start-up but by an industry giant. I have a personal grudge against British Airways (long story, do not ask) but on this topic you can only admire the execution of this particular strategy – wouldn’t it have been easier to ridicule the person that presented it in the first instance, consigning it to the ideas dustbin, than embark on a campaign of refitting aircraft, re-pricing, maintenance training etc etc?

This represented a real step change in long distance plane travel and while it is difficult to justify spending thousands of pounds for a decent night’s sleep, if someone else is paying or you do not have as much equity in the business, why not?

Google

A bit cliché perhaps but if a service works its way into your native tongue’s vocabulary as a verb of its own then you have a very strong indication that the mass market has noticed your presence.

Google does what it set out to do which is make the world’s information easier to find and use in a meaningful way. It transformed the way that we discover new things sinking Yahoo!’s portal model along the way and transforming the way that business would be conducted online (whether through the desktop or through mobile).

Quite apart from behavioural differences in how you find things and quaint games such as Googlewhacking, Google created a model which allowed the user to neatly sidestep paying subscription fees. This is one hell of a contribution to the end user.

Google’s ambition is that the ads that are placed in the content will become as useful and contextual to your needs as the content itself, in which case any small residual resentment about having to stomach advertisements in order to get something for free will disappear completely.

The test of this list is that if the company or the brand were to disappear tomorrow would there be a lasting legacy? Google’s Search, Adwords and Adsense pass the test.

Up and Comers

iPlayer

Cynics bill the iPlayer as ‘Making the Missable Unmissable’ but the use of the iPlayer is more than a video recorder/sky + box. First, a whole catalogue of programmes are available at any time – which as a father of two young children can be a godsend as Bob the Builder, 64 Zoo Lane etc are always available for a swift rescue without planning. Video and Sky + cannot match this.

More than that, BBC has integrated the technology into their online proposition in a way which is breathtaking – it brings a lot more coverage to life, allowing you to create your own TV news programme, especially for you, without fuss.

And then more. It can give access to live events such as in the Olympics – where one could be at work using email in one pane and having the Olympics Live in another at the same time (and why not, it only comes once every four years!).

As a consumer, it has made the online offering of the BBC much more useful, created immense value for me around one live event and made my weekend mornings less stressful. Beyond that, it is potentially a complete IP TV offering which would transform physical architecture within the home if more widely adopted across the industry.

It might be some time before we understand the full benefits but my intuition tells me that this technology will be seen as the forerunner of some pretty fundamental changes in publishing, broadcasting and the way we live.

Nintendo Wii

Tentatively, I’d mention the Nintendo Wii, though my hypothesis requires further development and evolution around a particular theme which would take this device into the mainstream.

Not only did Nintendo create a user interface which made people prance around like demented monkeys with no self-regard whatsoever, its reach has gone beyond simple gaming into people’s broader lifestyle. The advent of Wii Fit might single handedly save Britain from obesity. What do you think?

OK, so this might be over-egging things but one cannot doubt the revolutionary design and the way that the Wii has transformed how games are played on the PC, in some ways potentially a forerunner to more sophisticated role play within an alternative reality. There are many examples of revolutionary design though which would not make this list (e.g. iPhone – see below). What makes this list special are innovations which have changed behaviour or gathered universal appeal – often in areas which were unexpected. I’d argue that Wii fit is potentially one such element.

[Interestingly, brain train puzzles on the gameboy (also Nintendo) might be another example of a technology being used more extensively in a different way to how it was originally conceived.]

Not on the list but close

iPhone

I am nervous about including the iPhone on the list. The design is a step change and has since created many copy cats. Yes, that is certainly true. But what will be its impact on the world at large? It was heralded as defining a new way of dealing with mobile operators, shifting the power balance etc etc. But in essence all it did was cement the importance of device exclusives for operators which is not good for the consumer. You might argue that it has brought internet from your mobile to the masses. Well, it has certainly raised awareness across the industry. But then, so did Vizzavi back in the day but you would not expect them to make the list. I think the jury is out on the iPhone for the time being though it could be a future contender.

Spinvox

You may not have heard of Spinvox. It is a small/mid-sized UK technology company that specialises in converting voice to text. Its most famous implementation is a service which converts voicemail into text. If you were to use it, you would become an advocate of accessing voicemail through text allowing you to read and respond immediately without having to dial into a voicemail number and navigate an IVR menu.

It does change people’s behaviour. Using spinvox, voicemail changed from something I disliked to something I use on a regular basis. I can see a message even if in a meeting and act on it immediately (through text). I also get less of it as people are nervous of leaving a message when a machine is going to convert it and that suits me too. If it is important they’ll call me back.

There are a couple of things stopping Spinvox hitting the mainstream. Its technology still makes too many errors – usually they are amusing and certainly not enough to turn me off the service - but they are frequent. I’d estimate two a message. Names in particular are a bugbear and if the sender does not leave a number this is a pretty important bit of information.

It is also too expensive for the mass market. This frustrates me. This company is sitting on a mass market revolution but has the wrong pricing model to make it happen. It is a potential tragedy in the making.

Toyota Prius

In California the perspective on the Prius might be different. The Prius will always be remembered as the model which introduced hybrid engines to a wider audience and heralded the advent of ‘green’ motoring but I actually believe it will be another model, probably from a different manufacturer, that will steal the show and claim the credit for a green revolution.

Why? Because the Prius is ugly. It is that simple. If Toyota had put the hybrid engine in a VW Golf, in the UK alone, you’d have to imagine the largest single market share for any car. But, the Prius is a terrible design on the outside which makes ownership unpalatable. It works in the US because in California it has become a badge of responsibility (which itself would be odd in the UK). It also works in the US because it possesses the ugliest cars in the world by which standard the Prius is a bit of a looker. ;-)

There will be a clean engine revolution which will grip the mass market – but it’s not here yet. The Prius will be the Walkman to a later iPod.

So, there we go. I hope a decent conversation opener. I must have missed something blindingly obvious. What is it? What would you add?