Like last time, I use Tech IT Easy as a note-taking tool for things I want to remember and which you might find interesting. I can’t say that I learned much that was profound yesterday, a the “Startersdag Rotterdam,” held by the Dutch Chamber of Commerce (kvk.nl), but more of the nitty-gritty stuff: how to organise your administration, etc.

Off the bat, nicest stands were the ones by MVO Nederland (socially responsible entrepreneurship) and, for novelty’s sake, the IKEA business stand. I first thought/hoped that IKEA (which I’m a big fan of), was going to start branching out like Amazon (again a fan) did, but it was just to attract new entrepreneurs to fill up their offices with IKEA-stuff. They did give me some nice chocolates though, and MVO gave me a box full of environmentally-friendly goodies (incl. coffee: the way to my heart).

Talks I listened too, were:

• Starting an import/export business (KVK)
• A business-plan according to the bank (Rabobank)
• Setting up your administration (NOvAA)
• Upgrading your accounting (Exact Online)
• Going freelance (FNV)
• Selling via the internet (Preij Software)

Talks I should’ve listened to, but missed, were:

• How to start (well duh!) (KVK)
• A good start with the taxation-office (Belastingdienst (taxation office))

If someone here happens to have been there, and published some notes about them, I would appreciate a link.

Some brief notes for each talk.

Starting an import/export business
The essential thing I took away from it is that the risk is unevenly distributed. The importer pays for products beforehand and is also responsible to his customers if something were to go wrong. The only thing you can do is:

• Visit: more can be seen and negotiated face-to-face
• Make a deal to only pay a certain percentage upon proper delivery.

Other things to bear in mind is that there are added costs, beyond the buying price: e.g. taxes and added charges for things like alcohol. And to check beforehand if there is anything like a copyright-limitation for your products. E.g. you apparently cannot just import Apple stuff from the US into the Netherlands, because importers already have an exclusivity arrangement.

A business plan according to the bank
First off, I’ve been hearing great stuff about Rabobank, while writing my thesis and talking to startups. It is the most progressive Dutch consumer-bank in that area. It should also be mentioned that the bank is still standing during the credit crisis, a good thing. I chose not to attend the same meetings, hosted by the ABN Amro and by ING bank.

Now, the meeting started with some BS (I thought), the bank would first look at “Who you are as an entrepreneur.” Not that this isn’t logical, but when I went outside and talked to a different banker about starting with multiple jobs, the guy’s eyes lit up green and he wanted to talk shop straightaway. No mention of whether I would actually have time to run a business and hold down multiple jobs. I also heard a new thing for me: creating a personal SWOT for your CV.

Financially, the bank looks at:

• Own input: expects the entrepreneur to provide at least 20-25% of the total needed sum
• A liquidity prognosis: how you will pay for stuff down the line
• A profit & loss statement
• And, if your starting a limited company (a BV in the Netherlands), €18,000: that is a legal requirement to start under such a legal form

.
What is left over is: profit + deductions – withdrawals – investments.

I would love to hear how this differs in your country!

Setting up your administration
Key-lessons I took away from it: set it up from day 1, set it up professionally (if needed, by a consultant), a good administration is the key to solid decision-making. And it’s also a legal requirement to keep some kind of administration as a business! Essentially, I got the idea that it’s just a matter of getting good accounting-software. On to my next point.

Upgrading your accounting
Exact Online (and Software, I believe), is a Dutch company that has been creating accounting software for about a decade. It’s in the top-3 in the Netherlands for online bookkeeping software, next to Twinfield and Reeleezee (pronounced Real Easy).

I don’t actually have that much to say about it. Many of the questions from the audience were interesting though. People wondered about virusses, back-ups, total cost of ownership (it’s subscription-fee based), etc. The idea of online bookkeeping is that you can do it from everywhere, which is relevant mostly to the entrepreneur with the four-hour workweek. Also subscriptions are meant to reduced the financial burden up front. What I care most about is whether there is an integration with the taxation-form, which is, I hear, a very unpleasant activity here in the Netherlands, which was the case with Exact.

Going freelance
The presentation was a total snore-fest. Key-lesson was that if you quit your job, but keep doing that same job for your previous employer as a freelancer, it doesn’t actually count as being an entrepreneur. You have to hand in some kind of description of your activities when you register at the chamber of commerce, and based on that you get assigned a status. It all seems very bureaucratic.

Some things about contracts:

• verbal agreements are legal, except that there isn’t any proof
• parties involved must see and agree to the general conditions of the transaction.
• signature is the deciding factor
• watch out for changes that are made between the verbal agreement and the signing.

Selling via the internet
Even though I use the internet plenty, I know fairly little about the commercial aspects of it. The talk was mostly about designing websites, though, which wasn’t that interesting. Some key-points there: if you’re going to hire a third-party for a website, have him do it in a framework that can easily be adapted later on. The guy mentioned Google sites for very basic stuff and Joomla for ecommerce/dynamic sites. The costs of creating a website, hosting it, and setting up shop are crazy-cheap!

That’s all folks!
Vincent

Probably not a mainstream user

Now, my list is not scientific at all, and is, as usual, meant to be the start of a conversation. What I would do to make it scientific however, is as follows:

1. Talk to experts (hello there, experts )
2. Based on expert-input, design a survey that measures preferences per demographic (gender, age, spending-behaviour, etc.).
3. Advertise that survey on an industry-specific website (Alternatively: use survey to interview people face-to-face during an industry-specific event. Works well as a combo, the first being quantitative, the second qualitative.)
4. Process data into user-achetypes (and expected ratios).

In web-apps, by which I mean a web-utitlity like Facebook of Netvibes, I’m curious as to both the archetypes and, later on, how to deal with them. Generally, you of course have the early adopter and the mainstream one, which, I know, should be catered too differently.

Following is a list of the ones that I would expect to play a role.

• The money-maker: This is typically the most pragmatic of the group, cares about results, speed, and task-specific information, but not so much about elegance and useless information.
• The (early) geek: This, at the risk of generalising, is very much the Digg-, Techcrunch-, and Engadget-audience, by which I mean the typical commentator on those sites. They ask for feature, after feature, after feature, and often ask for too many of them. I call them “early” geeks, because I expect them to be rather young.
• The newbie: This is not the loudest of users, and tend to accept that which they get (as long as the quality is ok). I’m thinking people that use PCs with Vista-home pre-installed. I think that these are also pretty hard to reach with niche-apps.
• The specialist geek: I’m thinking photographers or writers, who have very specific demands of what an app should do and also a certain aesthetic demand. This would be more the Macbook Pro / Photoshop audience. Whether these are a large segment in the web-apps category, I’m not sure. I would expect that these apps don’t really meet with their approval, most of all because they are often free.

What do you think? Were there any archetypes that I missed or is the reality much simpler? (How) do you find out what the user-archetypes for your apps are?

“Ouch, it hurts, it hurts!” … “Oh yeah, that feels good, so good!” Guess which one is all other browsers moaning collectively (Microsoft & Firefox no. 1), and which one is the geeks…

Let me start by saying that Google Chrome rocks! OK, it crashed about 2 mins after I started it, and I think it has a process running in the background, which speeds up the launch, but which I hate, and it is Windows-only, which I hate 100x, but… it rocks! It’s simple, love that, it completely takes in all the bookmarks you had in Firefox, love that, and Gmail, man, Gmail loads like lightning! The browser loads like lightning too, because of the background process, can’t be any other reason.

Gmail’s loading speed confirms it: Google Chrome is Not a browser. Repeat: it is not a browser. It is a Google app-launcher. It is meant to bring the Google ecosystem to Joe Schmoe on Windows, who may know Google, but hasn’t thought about using its calendar, office-suite, or email, for that matter.

It is, to use a buzz-term, an in-the-cloud facilitator, bringing us one step closer to no longer needing computer-processing and storage, but just doing everything (essential) through an internet-connection. I don’t think, I’ve been this excited about a browser since Phoenix (what Firefox used to be called), which was in 2002, 6 years ago.

What’s different? Or what did Phoenix and now Chrome have in common? Phoenix had tabs, it introduced extensions, it blocked the pop-ups that IE never would. It was an evolution over the status quo. Google Chrome is just a browser, built on Safari’s Webkit-engine, with no extensions, but it helps us do what we were already doing, better. Because the world has evolved from the extension-model, it has gone way beyond what a company like Microsoft has even imagined. We live in a world where web-services matter!

I don’t use an rss-reader, I use Netvibes. I don’t use a mail-app, I use Gmail or Facebook. I don’t use a blogging-app (well actually I do, but the majority doesn’t), I use Wordpress.com. I don’t use MSN, I use Twitter or FriendFeed. When I’m on my PC, I’m in fact on the web, and the desktop only exists for work-documents and multimedia.

Google bites right into that trend, it executed well (ok, unstable browser, but localised in my language), it is a window in a world that 100s of thousands, if not millions, have accepted as their modus operandi.

Strategic angles

The love for strategy is really just the love for competition, disguised by fancy words.

Microsoft’s unbreakable chain?
Microsoft’s strength in the 90s was its software-platform. It was strong on multiple levels: market leader in OS, market leader in Office. And consequently, and still, market leader in browsers. It was able to build all these pieces of software on top of each other, tie them together, so that it would be an automatic choice to use them all. This is still the case today, as it is, by default, installed on 80% of computers out there (don’t quote me on this). Backwards integration, which also made it the number one choice for businesses, who like having the same software installed on 1000s of machines at once. And forward integration, through Office and IE, which add functionality in the value chain towards the consumer. From IE, Microsoft could build towards ActiveX and .Net, Silverlight, and other web-services that it was selling/giving to consumers.

Displacement by Firefox?
Yes and no… For displacement to occur there needs to be some kind of commercial angle. Firefox was built on top of open source principles, which is definitely disruptive, but it wasn’t until Google came into play, that Firefox became a commercial success. Google, these last few years, became the cash-cow for Firefox and other browsers, through affiliate fees it was paying for the use of the search-box.

While that’s cool, it also placed Google into a power-position. It knew that there was money to be made with browsers, it knew how much money there was to be made, so it just had to make the right move at the right time.

Google power
I already raved on why I think Chrome rocks, but for Google, the situation is actually pretty similar to Microsoft, except from the web towards the desktop, instead of the other way around. It is the market-leader in search, which some say is the operation system on the web. Nothing happens, without it going by Google, which can make or break a business. As is the case for browsers depending on Google cash as well.

Where Google leads is the web, and it has a pretty good read on where user-models are evolving too: web-services, with some anchoring on the desktop. So building a browser makes sense, it’s a step in bridging the value chain from web to desktop. Where it gets scary for Microsoft (which also collects Google cash through IE, I think), is when Chrome-users start getting the hint that Gmail works great, that Google Docs will hopefully work great (offline), etc. etc.

And I’m completely leaving Android out of this, whose future I still find hard to read… but I’m hopeful. Chrome definitely proves that Google can build software.

Doesn’t vertical integration rock? Doesn’t Chrome rock? I think they both do.

Vincent, the fanboy. Out.

P.S. I’m also not commenting on Firefox’s Ubiquity, it’ll be interesting to see where that goes… also largely built on Google-tech.

Context: I’m currently in discussion with a number of companies that are involved with SOA-vending & -consulting. As a result, I’ve been studying up a little on this market and hope to learn more by writing about it. Note: Since I know, judging by the response to other articles on enterprise-software, this isn’t exactly the most sexy of topics, I expect the number of comments to be minimal.

Jeremy has already written about this topic (primarily in terms of Software-as-a-Service (Saas) and Software + Service (S+S)) before (here, here, and especially here), so I won’t go very deeply into it, but SOA is roughly defined as:

“guidelines that allow software developers to design systems in stand-alone chunks of computer code, each specifying the critical outcomes, performance metrics, and interfaces between a discrete activity and other services.” (Src: HBR, June 2008)

If that’s a little abstract, I see it as a selling you a ticket to Lego-land, where you can play with legos all you like, those lego-blocks representing individual applications that can be used by businesses through a web (SaaS) or hybrid (Software+Service) interface, and Lego-land being the SOA-system that integrates all of them for you. This is opposed to the historical approach of buying a lego-box, which you eventually replace by another and another (side-prediction: we will eventually see Lego-world online).

SOA’s value-proposition

While traditionally it has been so that in order to compete in a technological world, you have to be technological, the idea of SOA is to remove that element, instead allowing individuals and businesses to focus on what they do best. I, personally, like that very much.

Other, more measurable advantages are that it is dramatically more cost-efficient. If you imagine that 5+ years ago, every company had to either invest into a powerful wide-area network (WAN) to be able to centralise IT-services, or replicate islands of IT-systems for each business-location, SOA removes that idea entirely, using a freely available infrastructure, the internet, and removing the need to build IT anywhere, instead paying-as-you-go for singular services that an external provider hosts and distributes. Added to this is the idea that performance now becomes accountable, in the sense that it is covered by contracts (e.g. QoS or SLA), something that was much harder to do with a permanently employed IT-staff.

With all these advantages and several more, it is no surprise that, in 2007, over 50% of mission-critical IT-projects were estimated to be SOA-based, a figure which is believed to increase to 80% in 2010 (these figures are from Gartner and may be US-only).

SOA’s hurdles

While this sounds pretty great, anytime you’re talking about system-wide change, you have to consider that this will meet resistance and involve a great many stakeholders, i.e. take a lot of time. And the question is here, who will you talk to as an SOA-vendor? Will it be the business-side of your client, as you are selling easy-to-understand lego-blocks, or will it be the technology-side, as you are selling technology? This is a serious question, so please answer it in the comments!

Added to this, a SOA-deployment is a strategic issue for your customer, meaning that your selling-proposition will also need to include the option of strategic support, aka consulting-services. This means that technology-only SOA-providers (vendors) will likely have to work with third-party consultants that pick-and-choose the best SOA-package for their client.

Related to this, the lego-like quality of SOA, which promises values like agility, flexibility, price, and reuse, and several more, all very important in this recession-prone time, also mean that someone can quite easily replace your service with someone else’s legos. Arguably this is much less the case if you provide an architectural framework and focus on building ecosystems (create lock-ins). But that is easier said than done, and as such this is a field dominated by few big players that buy up smaller ones.

Some more things, which I haven’t researched, are the degree that open source is a factor/issue here, and different revenue-models.

Grasping the paradigm-change

On the customer-side, there’s two ways of seeing this trend. On the one hand, extreme efficiencies, which also follows Nick Carr’s view that IT is no longer a competitive advantage. On the other hand, you’re giving away a lot of responsibility, which can be bad in two ways.

One, you’re giving away a lot of power to an industry, which will continue to consolidate. It’s something that may not be a problem now, but may become one.

Two, delegating a problem does not necessarily solve it. Taking the retail-industry, the biggest problem here is logistical inefficiencies, caused by delays, unnecessary replication of processes, or otherwise. Here, SOA, as long as it spans across the value-chain of manufacturers-transport-retailers-customer, is clearly a good thing. But it still requires a solid understanding of how IT does and can help your supply chain reap better results, something an independent SOA-vendor may not do as well. My opinion here is purely hypothetical, but it may be worth investigating how the masters of retail (Wal-Mart, Tesco, Carrefour, etc.) solve it. And if this is a problem, I imagine it is elsewhere too.

The SOA playing field

This post is getting a little long, so I’ll briefly go into this. Following Forrester-graphs show the players in the integrating corner of things (consultants) and, on the right, the vendors (also note the time-difference (the second one is Q4 2007) and region). You can find the originals here and here.

Clearly this industry is very layered, with some offering the complete package, including strategic assistance, and others providing either the SOA or a part of it (SaaS or similar). There is a lot of movement in this field with players buying each other out or moving into related industries, either on the hardware or software-side.

Final thoughts

Because I’m not a soft-/web-ware guy, I’m still very much undecided whether to head in the software-only direction myself, though I see much merit for an integrated business-consulting + software-deployment approach, and I also prefer selling Lego-blocks to rubber-trees. Feel free to convince me of your points of view.

All of this was initial thinking of course, and as such I’m happy to hear if you have anything to add or if I made some obvious mistakes. Again, considering the relative unsexiness of this area, I don’t expect too much

Vincent