Having reached a personal milestone, part 5 of my entrepreneurship diaries, I should mention that it’s very pleasurable and useful for me to write on these topics, and I hope it’s the same for you. In this post, I want to briefly address the issue of uncertainty in early stage technology companies and how that affects management.

As I mentioned before, I was asked to join this company as CEO after consulting them on the commercial applications of this exciting new technology. Joining a year later, we had a good understanding of the strengths and weaknesses of the current organisation. During the consulting stage, I wrote a business plan with a fairly clear time line (to me and our sponsor), but it wasn’t being executed upon as required. One of my the deliverables I set myself was therefore to get development back on track, which not only respects the resource boundaries (financial, human, technological) we face, as well as sends out the signal that we are a serious business.

One thing I keep hearing over and over from entrepreneurs is that you have to be comfortable with ambiguity. And that is absolutely true. We continue to iterate on ideas based on changes in technology, customer and partner feedback, and our own ideas, something that would drive any sane man crazy, but we have to keep it under control. The best way that I find to do that is continuing to develop the vision of where we are going (the strongest motivator I can imagine) and maintain a loose type of project management that gets us to that goal.

I call this project management, as it deals with schedules, milestones, and resource allocation over a period of time. Uncertainty is an important factor to consider in this. In a large company, chances are you’re dealing with a predictable environment, in an early stage startup this is not the case. Getting a tighter schedule in place continues to be a challenge we are working on, however I find that being alert, flexible, and adaptive all the time contrasts with the more stable art of project management. Please correct me if I’m wrong, in which case present a solution also! Of course, there have to be thresholds in place, which to me is very much defined by risk assessment.

Regarding risks, let me start by saying that not all risks can be addressed, which is why being comfortable with ambiguity is so important. And second, there are many different types of risk, technology, financial, market, etc., but one usually outlines the thresholds that you have to respect. In my case, I see this clearly as market risk, as nothing matters if your customers aren’t buying… however, this really is not something to take for granted.

In medicine for instance, which is traditionally patent-based and largely dependant on a complex regulatory process, you have a 15 year window, of which you can spend up to 12 years developing your super-innovative cure. Clearly the technology risks outweigh the market ones (note: this ignores the rise of generic, cheap, knock-off drugs). In the web-industry, on the other hand, it’s perfect for rapid prototyping, it’s hard to protect innovations and easy for competitors to clone them, and it makes much more sense to push out your products asap. That means that there can be plenty of competition and the risk lies in grabbing sufficient market share to make a (sustainable) profit.

In our case, we are not as “high-tech” as medicine and not as “high-market” as web-development, in the sense that we face both market and technology risks. However, I see market risks as more important and try to align both market & technology approaches together. As an example, one of the things we did several months ago, was demo our technology to the general public and to selected partners. After the experience, we interviewed them thoroughly on their experience, as well as their initial expectations. We want to make sure that people don’t expect something different than what we deliver and that our product meets and exceeds their expectations. That gives us a clear view of where we want the product to go.

On a technology level, that presents us with certain thresholds in terms of “the experience” and price-points. And whenever we face a technology change, whatever solution is being developed, it has to fit within that end-picture the customer expects. That also overcomes the problem of black-box development, which is not uncommon in technology development.

So, that’s more or less how we continue to develop the vision for our company and the project management that supports it. We started with a lucid dream of producing great technology. We demoed initial versions and tried to align our vision to the needs of our users. And we end up (hopefully) building what our customers want and pay for. I would love to do this in a web-environment, as that really makes prototyping so much cheaper and quicker, but we do the best we can with our not so intangible technology.

All my entrepreneurship 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.

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I live in a funny world. My company, which is composed of several disciplines in the manufacturing, industrial design, and, yes, programming space, is one factor. I sometimes see people screw together contraptions in our workshop, and I see coders banging away at their PCs and Macs, and I wonder what the hell I am thinking calling programming low or high tech. There are different degrees to everything and just like metal and a few screws can lead to an amazing creation, so lines of code produces the amazing virtual reality I interact with most of my days.

This will be a short post. I think that the Internet has proven to be a two sided coin. It brought us freedom of information, but bits are also information, which makes it hard to gain value from them. Looking at it through a business lens (a flaw of mine) I can’t help but wonder if programming is a worthwhile direction to take, if you want to make money at least.

The other side is what I wrote about in paragraph one. Code produces wonderful things and I am grateful everyday for the fruits of that labour. So I sincerely hope that my world, the business world, will continue to allow for “the code” to reign free, and for those that produce code and its products, to reap the rewards and continue to do what they love.

So I apologise for whatever I wrote previously, namely that software is not high-tech, i.e. innovative, because it simply does not apply to all code (just to the 100s of 1000s of me-too apps and websites out there, which ruin it for the good ones).

This post was inspired by Fred Wilson’s post “Code As Craft” and by one of our interns producing “beautiful code.”

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This post is part of a series, a diary of starting a business if you will. It follows part 1, the decision of becoming an entrepreneur.

One thing I found out is that it’s hard to put your responsibilities down on paper… there are so many!!! There is of course a basic job-description, which more or less sounds like that of a project manager/pull-the-rabbit-out-of-the-hat magician: “make it happen that we go from this thing on paper to the product in the hands of customers.” “Make it happen” is a super-loaded phrase, which can mean countless things.

There is a continuous struggle between micro-management and keeping the overview. Micro, because it is your responsibility that every (little) thing is carried out by your employees (if you have them). Overview, because You the entrepreneur are The Organisation. There is a third struggle that shouldn’t exist really, that between your professional life and your personal life. I’ve come to the conclusion that the only way to do this thing well is to focus on it exclusively. Friends, family, love, …blogging… it’s a nice luxury to have, but it comes second place.

The responsibility of an entrepreneur are thus: have a goal and make sure that everything is executed to get to that goal.

In a technology company, there are matters of technology and business (really, in what business except for strategy consulting isn’t there a mix of “technology,” which can mean anything from cooking to software development, and the commercial side of things, which is meant to pay for everything?). What I found was that as someone with a business background, who sort-of-kind-of has an idea about product development, and has a better grasp of business development, I still can’t let go of the reigns of product development entirely.

Product development ties in directly with business development. People are unwilling to pay for something that doesn’t exist and similarly our budget is supposed to last us until we have something worth paying for or investing in. Therefore, as an entrepreneur I have to make sure that product development stays on track. The absolute best way to do this is to have a capable product development manager in charge. The truth of it is that startups by their nature are resource-poor, which includes tripple-A product development managers (probably employed at multinational X or Y somewhere), and there is a lot of learning/training on the job. Learning/training means that the (hopefully) existing product development manager (in our case yes) still has to be managed, through schedules and regular meetings. In any case, product development is in its conceptual stage a very brainstorm-friendly activity, which means the more the merrier. But ultimately, a startup must get beyond this stage, respecting the entire resource-poor situation that a startup usually faces.

So, responsibilities of an entrepreneur as far as the technological product development is concerned: If you have a product development manager, you have to make sure that he works under the realities of the business. If you don’t, which I imagine many 1-person software startups operate under (as well as those lucky strategy consultants), well then you have to do the job of product development as well, keeping a close eye on the business realities.

OK, the business part of things. My role is fairly well-defined here as I come from a business background and approach startups from a business perspective. Assume that role 101 is having a firm grasp on everything that goes on, which can be phrased as “where are resources (people, time, money) being expended at and is it wise to do so.” This entails having a good budget plan and sticking to that.

Role 102 is to build the business, which I call business development, but that often gets confused with sales as that that is what it says in job adverts. Business development is the building of the business, which includes sales, but also includes building the company and all that entails.

So, we are trying to get from point A to point P, how do we go about it? If product development is about turning an idea into a product, business development is building a business plan into a business. Business plans are total BS unless they contain validated information. Some key-chapters in business plans are the market overview, the market approach, the time-line, and the financial need to meet all these objectives. Business plans can serve as a. cannon fodder, b. a plan of approach, c. one of several signals to attract investment. For c. no investor will take a look at your business unless you have a plan of approach (b.). On that plan, there should be a time-line, which you are following (predictability!) and there should be a goal: the market you are targeting and your approach.

The market section of the business plan presents a big problem for technology entrepreneurs. Because (non!) customers often don’t know what they want. I can ask a target group “what kind of air do you like to breathe?” and it wouldn’t surprise me if a significant number of responses would say: “I like to breathe air that smells like perfume.” OK, that’s a terrible question, but what I mean is that people sometimes make up answers that have nothing to do with reality (that said, both the perfume business and the fast-food industry have made lots of money from essentially selling air that smells good. Scent is also plays a very important part in memory, but I digress…)

What I’m a big fan of is validated market data, which is data gathered from actual customer experience with your product or part of it. That brings forth another problem of a bias towards early (and over-excited) adopters, something which the book “crossing the chasm” deals with, but is really not something that I think is realistic to address at an early stage, except that validated market data can also come from experts in the markets you are targeting.

The implication is also that product development is again completely tied in with business development which leads us down the path of rapid prototyping, another practice that works great in software / on the web, not as easily (though not impossible) with hardware. In any case, the experts in this area most well-known today are:

• - Steve Blank, who wrote “The Four Steps to Epiphany” and is currently hosting the excellent Stanford’s Entrepreneurial Thought Leaders seminars (btw. Steve Blank also writes a great blog on customer-focussed development, which I’ve only just started reading.
• - Eric Ries, who authors the blog Startup Lessons Learned and has some great articles on responsible (=lean) development.
• - And Donald Reinertsen, who wrote an incredibly dense book called “Principles of Product Development Flow,” a book which is clearly an authority in the field, but which I cannot recommend to any sensible entrepreneur with a 60hr/week schedule. Those principles, by the by, number in the 100+.

As well as of course Toyota and plenty of other experts out there, I’m sure, many of which are referenced by the people mentioned.

I think that it can safely be said that task 3 or a sub-task of business development is working towards the customer, the lifeblood of a business.

There are other tasks of course, which have to do with human resources, legal work, accounting, etc. Some of which can be outsourced, some of which can be done half-heartedly (oh no, I didn’t say that), some of which are really-really important, etc.

All these tasks, however, require a certain authority. The entrepreneur’s responsibility is to either be an authority on a task level or to be sure to work with authorities, either in the company or in an (informal) consulting fashion, so that they are carried out responsibly.

Task 4 can thus be entitled: be an authority on the tasks that need to be carried out or have access to one.

So, a whole can of worms starting a company can be and it is vital that it does not interfere with the single most important thing that you must do as a human being: be healthy! Health is part sleep, part exercise, part food, part love. There is no yin without yang and vice versa. Thus forget everything I said about personal life being no. 2. The best is if it reinforces what you do in your work. Health leads to happiness and happiness leads to optimism: a key-quality in entrepreneurship if there ever was one.

So the responsibilities of an entrepreneur summarised:

• 100: keep your eye on both sides of the court: the goal & the resources needed to get to that goal
• 101: align Product development with Business development
• 102: always validate your market data by staying close to your customers
• 103: be an authority on the tasks that need carrying out or have access to one
• 104: stay healthy and happy.

This was written in a single session with minimal editing. I hope it kind of makes sense. Part 3 of my e’diary will be on the topic of: can you prepare for entrepreneurship? As I have a master in entrepreneurship, I thought it might make for an interesting perspective. All my entrepreneurial diary posts can be followed under the tag ‘Vincent’s eDiary.’ By choice, I’m being mysterious about my company. If you have questions, feel free to comment or write to me via the email address on the right.

Picture courtesy of Be The Dream.

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We have been  reading postings and briefings on all sorts of touch pads and e-Reader recently, be it the Amazon Kindle or much disputed Apple’s iPad. But apart from usability and innovation involved in developing the product one feature that inspired me to write this post is  its long term affect on existing Carbon Di Oxide emissions when adopted and accepted globally.

I still wonder if in a hypothetical scenario when every book and publication is digitized into an e-book and every reader only uses his gadgets to read the digital content instead of having a printed version on a paper. Will this be a much Greener situation to one we have right now? There are  views and opinions prevalent in media which are more of equivocal nature. E-readers aren’t typically marketed as environmentally sound, but their environmental impact is now becoming a topic of discussion and research.

Point of Views : Expert’s View on e-Readers

At least Don Carli doesn’t thinks so, according to him e-Readers aren’t Greener than print (which is a common view held by consumers who don’t know the backstory of evolution of an e-Reader ). Actually few days back I had an opportunity to read an interview with Don Carli on News Media Innovation, Convergence and Sustainability.

As far as print media is concerned it could do a better job of managing the sustainability of its supply chains and waste streams, but it’s a misguided notion to assume that digital media is categorically greener. Computers, eReaders and cell phones all have a cost of operation, cost of manufacturing and cost of disposal. When Compared directly to the book, a Kindle produces 168 kilograms of carbon dioxide compared to 7.46 kilograms for a book.

Making a computer typically requires the mining and refining of dozens of minerals and metals including gold, silver and palladium as well as extensive use of plastics and hydrocarbon solvents. To function, digital devices require a constant flow of electrons that predominately come from the combustion of coal, and at the end of their all-too-short useful lives electronics have become the single largest stream of toxic waste created by man. Until recently there was little if any voluntary disclosure of the lifecycle “backstory” of digital media.

Point of Views : CleanTech Research based on Scientific Evidences.

Another interesting survey report from CleanTech Group which published the report based on life cycle analysis of a Kindle e-Reader. The research and media company drew on existing studies to do a lifecycle analysis and found that the carbon emissions from electronic books are far lower than traditional book publishing.

As reported  in the analysis, “The roughly 168 kg of CO2 produced throughout the Kindle’s lifecycle is a clear winner against the potential savings: 1,074 kg of CO2 if replacing three books a month for four years; and up to 26,098 kg of CO2 when used to the fullest capacity of the Kindle DX. Less-frequent readers attracted by decreasing prices still can break even at 22.5 books over the life of the device,”.

Finding a conclusion to this article seems difficult:

eReaders are capturing media attention and there appears to be significant latent demand for gadgets that can replace printed media, but mainstream adoption still remains years away. E-reader device sales and eReader content revenues are still rounding error in relation to print media revenues. In a survey of attendees at this year’s Frankfurt Book Fair 40% predicted digital book content sales would overtake traditional printed book sales by 2018, but over 30% said digital content would never surpass traditional books sales, and 66% said they expect traditional books to dominate the market for the next decade.

With universities like Princeton and six others already testing the technology in a pilot, I hope e-Readers will make their way to schools and workplaces  replacing traditional paper books. Ultimately, it comes down to how an e-reader is used. If a person continues to buy books and print periodicals and doesn’t recycle the product, the environmental impact could potentially be negative.

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Be it Automobile , Aviation or Heavy Metal Industries, everyone felt the heat of recession but regardless IT fared better than most. In spite of worst economic meltdowns in history, acquisitions among big vendors continued to reshape the market, operating-system wars extended to mobile battlefields, microblogging became a powerful source of real-time information, and the take-up of small, Net-connected devices was stronger than ever.

But how good is this wave of mergers and acquisitions for the future? ( By future I mean upcoming innovation and future of Startups which target innovation not business)

Whenever your biggest competitor takes you over, it blunts the competitive spirit that can drive innovations. Thats what concerns me most, the spirit of innovation is somehow compromised because of takeovers.

Not always always a potential Merger or Takeover can be taken as a positive sign of ever increasing competition and globalization. And particularly not right now when it comes to web and social media startups, many of which are still more focused on innovation and building up audiences than on making profits. Rushing them into deals to fulfill long-delayed plans for an exit strategy could derail the evolution of a strong business plan.

From an investment standpoint, founders and venture capitalists have good reasons to cash out now. Market caps of public tech giants are rising — the Nasdaq gaining big time – and so are their cash stockpiles. For Instance Microsoft has a stock pile of about $49 billion in cash; similar is the story of Google with $24 billion. High-profile Multi Billion dollar deals like the ones we had in recent times have a way of spurring on other acquisitions.

TimeWarner buying AOL and eBay buying Skype come to mind. Even snapping up a hot startup for its technology or talent — Google buying Dodgeball or Yahoo buying Flickr – can lead to culture clashes, customer anger and other disappointing results.

I  tried to re-compile the list of some major takeovers which are substantial enough to change the future of computing.   We are talking about some multibillion dollar mergers and acquisitions, where the Big gets even Bigger.

Oracle eclipses the SUN @ $7.4 Billion

This Merger can be coined as “father of all the Tech Mergers” announced last year. If the announced the deal went through, Oracle,  the industry’s largest database software vendor would get an entry into the server and storage markets worldwide.

The acquisition, still pending, was announced in April, and may even be blocked because European regulators are contending that combining Oracle’s technology with Sun’s open source MySQL database would violate competition laws. Lets see if this deal goes through.

Xerox snaps up ACS in $6.4 billion

Another major takeover, Xerox pays about $6.4 billion in cash and stock for Affiliated Computer Services (ACS), a large IT and outsourcing firm. With this merger Xerox hopes it will give it a bigger foothold in the business services space. While the deal will surely boost Xerox, investors wondered whether it overpriced the deal.

Calling the ACS deal “a game-changer” for Xerox, Burns, CEO of the company, said it would help Xerox “expand our business and benefit from stronger revenue and earnings growth.” The deal will triple the service component of Xerox’s revenue to roughly $10 billion annually from $3.5 billion, according to the company.

Dell – Perot Catch-Up Deal worth $ 3.9 Billion

Buying Perot was a part of Dell’s plan to expand its footprint in the IT services market, which was  a necessity in a time when hardware sales were falling. Dell offered a staggering $3.9 billion for Perot Systems, a 68% premium over Perot’s actual stock value. Dell’s purchase can also be seen as a response to rival HP’s $13.9 billion acquisition the previous year of EDS — another services company founded by Perot.

Cisco-Tandberg worth  $3.4 billion

Cisco, already a major player in collaboration products with WebEx and TelePresence, signed an agreement in October to purchase videoconferencing vendor Tandberg, which makes both video devices and network infrastructure products. The acquisition, if completed, could have both a direct and indirect impact on Cisco’s bottom line, because expanded use of videoconferencing may increase network traffic, letting Cisco sell more switches and routers.

HP Acquires 3Com For $2.7 Billion

HP launched a straightforward assault on Cisco in their own Game of Networks. HP’s increasing influence in data center networking and convergence markets will have a big boost with its purchase of 3Com, a maker of switches, routers and security products. HP says the acquisition will further its data center strategy “built on the convergence of servers, storage, networking, management, facilities and services.” The acquisition of 3Com also help to expand HP’s Ethernet switching offerings, add routing solutions and significantly strengthen the company’s position in China thanks to 3Com’s strong presence in China. The transaction is expected to close in the first half of 2010.

I have collected the figures and numbers from various sources including PCWorld, Gigaom and Wikipedia. Let me know if you have a suggestion or correction to make. Please forgive me for the grammar, I was always bad in Grammar since school

Article Previosuly mirror-posted by me at Global Thoughtz.

Anand

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I’m reposting this comment I wrote in response to Eric Ries’s stimulating blog post on Harvard Business Review online, with the title “Is Entrepreneurship a Management Science?” Feel free to share your thoughts on it there as I think it’s worth thinking about whether Entrepreneurship can eventually learned or whether it is an art-form. My thoughts on that are below.

Having both studied a Master of Science in Entrepreneurship and working in my 3rd startup (trying to apply the lean techniques that Lessons Learned made me aware of), I can say that my ideal is that entrepreneurship is a science. In reality, it’s a collection of Sciences as well as the act of Imagination AND Guts AND Agility, none of which are particularly scientific.

It’s a collection of sciences because no entrepreneur or team of entrepreneurs is undertaking just one activity, he, she, or they are doing many in parallel, some of which are business related and some of which are technological. Both have scientific foundations behind them.

Why the Business of Entrepreneurship is scientific is simple to explain. Businesses, starting or existing, can’t operate in a vacuum (for long). We have to obey financial restrictions, sell the idea to our investors, who themselves employ scientific means to measure whether the return on their investment justified, communicate to the market in effective ways, study the market, and project manage all the activities and people in the company. For most of these “wheels” already exist, so there isn’t always a need to reinvent them.

BUT, there is no replacement or science for guts, imagination, and agility in starting a business. You have to ignore many rules, you have to play dirty, and you have to be quick & flexible if you want to succeed. Maybe a management scientist can eventually plug those dirty variables in a formula somewhere. But I doubt it can be applied to any two startups successfully.

Vincent

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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:

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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“For those new to Tech IT Easy who could obviously not remember the initial announcement, Anand Kishore Raju is a new blogger on Tech IT Easy, who will focus on providing you with analyses of greening the internet, carbon footprints, energy and power figures of the internet and web2.0. Anand, the floor is now yours…”

The debate on climate change has moved beyond an argument about whether it is happening or not, to a discussion about what can be done to tackle its root causes. Pollution and energy savings are keywords that are becoming more and more of interest to people and to governments across the globe, and the research community is also becoming more sensible towards these topics.

McKinsey & Co. recently reported that the world’s 44 Million servers* consume about 0.5 percent of total electricity productions across the globe and emits about 80 megatons of Carbon Dioxide a year, which is nearly the emissions of entire countries like Argentina or the Netherlands (Data needs an Update ).

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Dear everyone,

I am extremely happy to start off this new year by introducing a fresh face on Tech IT Easy, Anand Kishore Raju, who will be blogging with us in 2010. His main areas of focus as a blogger will be greening the internet, carbon footprints, energy and power figures of the internet and web2.0.

Anand is currently working as a Research Engineer at Telecom ParisTech (ENST). His area of research focuses on the Energy aspects of the Internet, what the scientific community calls “Green Networking”. His efforts are directed towards making Computer Network Science aware that processing, moving and storing bits has a cost in terms of energy and in terms of the Carbon Emission Footprint.

In the past, Anand had also worked at Collaborative Systems Group (ColSys) at Bilkent University, Turkey, where he developed a taxonomy for user properties, influence factors for feedback quality in web 2.0, existing and novel models for deviation types and their detection. He also holds a degree in Computer Science and Engineering and aspires to join HEC in near future.

Anand joins a smart team of collaborators, some of which also work in green computing and many of which share an interest in this important topic for sure. As such, please join us in welcoming Anand to the team and I hope you enjoy reading his words on Tech IT Easy!

Happy New Year,

The Tech IT Easy team

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As formal as Address sounds, it’s not meant to be. Just a small reminder that we are still here, more exemplified perhaps by the inverted correlation between blogging and doing great things (P.S. Many of us can be followed on Twitter, which doesn’t appear to have that problem).

Yes, we have all been busy doing things like moving to different countries and continents, starting companies, starting and changing jobs. I think Cecil is even well on his way to becoming a e2.0 authority, and judging by Fidji Simo’s tweets, I think she’s developing herself into an expert in retail—on-, off-, and hybrid forms. And that is amazing news and exactly what I always wanted from Tech IT Easy—a “workforce” that is productive outside of Tech IT Easy and contributes to its members’ lives on- and offline as well.

Which is why I still encourage anyone interested in technology and its commercialisation to join us, to develop and contribute their thoughts and expertise!

All that aside, what more can I wish for our readers and bloggers on this Christmas day? For one, I wish for a better 2010 and I am 100% certain that it will be. We all got a little roughed up in 2009, but what doesn’t kill us only makes us stronger! The Internet Boom & Bust… pah, I laugh at its impact: it lead to Le infamous nouveau Web, aka Web 2.0, aka the one where 37Signals had to remind us of the revolutionary idea of charging $$$ for products. I also laugh at Enron, as all its promised consequences of accountability haven’t affected the upper-tier of management one bit (and maybe never will).

But I don’t laugh at what is happening today, I’m happy about it. Between the magnificent state’ification of banks, the “new/old” lean approach to doing all business, and the threat of global warming, it’s another warning shot at us, the complacent human race who thought they had it all under control again. The world isn’t perfect and I hope that every one of those bumps bring us closer to making it better.

All cynicism aside, we live in a time where information is at our fingertips, where collaborative filtering and neuroscience help us better filter the relevant stuff to the top, where we can still publish news at a click, which is still an amazing concept, and where we all have GPS in our hands today, and augmented reality in our hands tomorrow. Yay, the innovative mind and yay, it’s practical outcomes!

Merry Christmas everyone and if you don’t hear from us before the 31st of December, have a great transition into the new year!

Love,

Your Tech IT Easy team:
Alex, Jeremy, Steve, Fidji, Georgia, Cecil, Vincent, Kari, Manu, Lucien, Matthias, Raj, Raphael, and Remy

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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:

1. Customising to local needs – which involves first understanding these needs, and then meeting them.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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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There is a really disturbing trend about environmental issues, outright self-deception that it might not actually exist. People do have this strange tendency, once things go complex, to make up stories that explain why things are how they are. This, in a way, explains why, in this age of reason and science, people choose to believe in things like make-believe medications, which they, in an effort to legitimize them, call “alternative” medicine.

An utterly insignificant little blue-green planet in the unfashionable part of the galaxy

This morning at the gym, I overheard people talking about the recent e-mail leak from UK’s Climatic Research Unit. Paraphrasing, the discussion went something like this. “…I read from the news that they have exaggerated the numbers.” “Yeah, I never could believe that the sea levels could rise by so many meters.” And off they went talking about heatwaves in the Middle Ages and other stuff, probably trying to assure each other that everything is just fine.

Ars Technica does a good job, as always, explaining how the e-mail leak means probably nothing. And anyway, the scientific community has ways routing around fraud  – which, you have to keep in mind, is not the case here.

At another occasion, before the e-mail leak, in a bus an older woman wondered “how can they measure that the sea-levels have risen by a fraction of a millimeter. It’s so tiny.” I almost wanted to tell her about the DNA, carbon nanotubes, integrated circuits and other wonders of science in an effort to explain that, yes, “they” can measure things even if they are really small.

I’m seriously worried that these people secretly wish that the whole climate change is just a bad dream, and that they have a confirmation bias to believe all evidence that disproves that our planet is in peril – that status quo will prevail.

Yes, I’d also like if the whole climate issue was just a bad dream. But no e-mail leak or even a group of fraudulent scientist (which, once again, isn’t the case here) does not disprove the massive amount of evidence that we have for an accelerating climate change. What’s going on is a good example of our cognitive dissonance at work. Maybe it’s easier to justify why you’re not doing anything to counter the problem, if the problem doesn’t exist in the first place.

Unfortunately, the newspapers and TV news aren’t really helping, going for flashy headlines instead. True, the scientific community has a bad track record trying to explain things to laypeople, but sometimes things are a bit difficult – especially when they are as complex as the climate of a planet.

In fact, it seems that television can make things worse, as this video from a Sarah Palin’s book-signing shows (see 7:00 for the kicker). People, instead of trying to even rationalize their arguments themselves, just throw catchphrases to explain their position. My favourite? How polar bears must be removed from endangered species list so it would be easier to drill for oil in Alaska.

I’m really, really worried.

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As is usual when I take a long break from writing, my blog posts end up becoming insanely long. Take it as you will, but I’ve tried to make it as coherent a post as possible. P.S. this is a post written under de cover of my “leave of absence,” which means I still write, but less frequently. – - Vincent.

A good friend of mine, Zihni Ozdil from the Netherlands / Turkey, Historian Extraordinaire, is now publishing his wisdom online. If history, politics, and culture (“beyond the superficial”) is something you find interesting, I encourage you to check it out. On his site, I found an article entitled ‘the real Evil Empire,’ which, ignoring the provocative title, deals with the interesting topic of the cold war and the ‘demonification’ of Russia and communism at that time.

Yesterday, I had an interesting discussion with some Canadian Swedes that moved to Florida with their kids and had trouble finding a school. The only way, it seemed, to guarantee that their kid ended up in a good one is to have an A-class school in your district (which you can find via a website that profiles attendees according to race and economic background… wow…) and to have paid your electricity bills. It worked out well for them, but clearly suggests the underlying problem of a long-term selection bias.

Last night, meeting the Canadian Swedes, where I was also in the company of a Russian and a Japanese, I noted that it was strange that while both Russia and Japan, being superpowers in their own right, have infamously challenging education systems, which result in some pretty smart people graduating from either country, the US does not seem to follow that pattern, at least not at the high school level, and certainly not across all demographics. Yet, by all accounts, the US is a superpower, if not the superpower of this and the last century.

My post today is not about comparing countries’ education systems, it’s more about the strategic purpose of education. Many people don’t know this about me, but I don’t vote and I don’t generally care about (regional) politics. To me, our planet should be one country, where anyone can move and work anywhere, and services don’t have to be moved just because you physically moved  XX km/miles to another country. But I do recognise the power of competition and how that can lead to excellence. Versus a ‘group think’-like mediocrity where everyone just tries to be like everyone else and no one exceeds. So, in a way, I endorse a system of divided regions, because I think it leads to competition and thus excellence.

Education plays a strong role on the competitive advantage of nations, as it does in certain companies. Last year, applying to a lot of consultancy companies and working as one myself, I was struck at the importance that the accumulation of knowledge plays in this industry. If I were to start my own consultancy, continuous education of the staff would most certainly be a cornerstone of the business strategy, because knowledge is your product as a consultant.

I know that this thinking plays a strong part in government circles as well: how to make your/our country as strong as possible, not (just) in military terms, but in the sense of knowledge, mostly measured by the no. of graduates and the no. of patents that are published every year (as well the commercialisation thereof, which doesn’t go quite as smoothly).

I know that the no. of graduates coming out of Chinese universities is tremendous, and the no. of patents coming out of US ones is among the highest in the world also. So clearly, the US, superpower extraordinaire, is doing something right. I don’t however entirely understand why the primary/secondary school system is so abysmal then in the US. My only explanation is that, in academic circles, there are no national boundaries, and a Russian researcher can just as well (if not better) produce patents in the US as anywhere else.

There are other dimensions to the US superpower status as well, of course. It’s a military superpower, it is a cultural superpower (in terms of films, music, and literature), it has a large consumer-base. These three dimensions—safety through military strength, an easily adopted culture, a consumer’s paradise—also have the effect that they serve as an attraction point for outside academic or other talent. And while other countries may have strong educational bases, the other aspects are perhaps ignored just a little too much, still making the US a prime export location for knowlegde.

In the strategic literature, there is the concept of the resource-based view, which stipulates that company strategies are nothing more than a collection of resources, some of which are internalised and some that are not. I think that in the context of the US and education, the resources that must be internalised are those that lead to the commercial exploitation of technological advantage, which sounds abstract, but basically means making sure that the best technology/knowledge is produced in-house and generates economic benefits in-house as well.

But there other resources that must most certainly not be held onto in-house. These include standards, which facilitate the assimilation of knowledge. In education, the standards that we use are the bachelor-master-phd system, which can easily be studied in different combinations and locations. And text-books, which as many students know, are often from US-origins.

In many ways, the cultural exports from the US—movies, music, literature—are nothing more than the spreading of a standard, that of a language and a way of thinking, which makes assimilation of outside talent easier. And as long as that outside talent is used for the benefit of the US, in the form of patent exploitation, the US benefits, even if their own primary/secondary education system is quite uneven.

As mentioned, I don’t care about politics, country-differences, or governments. But if my logic is correct, I wonder if a metaphor exists for commercial superpowers, i.e. companies that are market leaders and remain so by attracting the greatest talent and finding ways to turn that into economic benefits.

Organisations are not complete economies like governments are and also have the benefit of being mobile—by law they are considered single persons, which have residence, pay taxes, etc. just like everyone else. So, as long as they obey the law, they can choose where they stay and choose to ignore local conditions, much like, I theorise, some governments do, instead focussing on the bottom-line: attracting excellence and turning that into profit, while keeping ‘unnecessary’ expenses as low as possible. Well, at least that is the stereotype of an organisation, while pressures have certainly lead some to adopt a more socially-responsible attitude.

Clearly, the question of talent, whether attracting or training it, remains a vital one for both countries and organisations. But I don’t think there is necessarily a correlation between talent and local conditions.. at all.. though local conditions do play a part in the quality of life, or lack thereof, which affects the talent’s in question desire for a certain location.

Vincent out.

(Picture courtesy of thehindubusinessline.com)

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I hate breaks in anything I do, blogging, work, sports, love, etc., because it’s always harder to return back into the zone. Similarly, I already knew subconsciously that it would be hard to return back to blogging after the proposed hiatus. Routines are good and when they are moved aside, they get replaced by something else.

The human body is a machine and everything, from hours in the day, to food and exercise, to making money, to relationships, are all pieces in the machine of life. There’s only so many hours in the day is a well-familiar phrase to most of us and reflects the difficulty in balancing different activities and responsibilities, with some just falling off the map.

I am not saying that I plan to stop blogging, but I do think that we all need to make choices in our lives which will affect other, previous ones, like domino blocks.

Dynamics…

I just bookmarked a blog post on delicious on forming sales teams in a startup. It’s a good one and you should all read it. As I tagged and bookmarked however, I immediately thought, hey, I’m pretty sure no one on my company will read it. Why? Maybe because we already figured it out… Maybe because we figure stuff out as we are doing it… Your choice.

Blogging or any kind of writing for public purposes brings several complications to business people:

• it is public knowledge, meaning that the competitive advantages are slim: I don’t think this is a major factor, as most innovations are combinations of different ingredients that may or may not be public knowledge. Great artists steal, as they say.
• Writing is processed explicit knowledge from something that was previously implicit and needs to be made implicit again by the reader for it to be useful in a practical context: I’ve written about the knowledge-generating company and the knowledge spiral twice before. Another phrase, “You can’t help yourself, because your *self* sucks!” also comes to mind.

It’s the latter that represents the greatest challenge to authors and consumers of their work. I’ve also previously written about the benefit of formal education, which, I think, tries to recreate the knowledge spiral, turning explicit knowledge into the implicit kind, to be used by students in their work later on.

The dynamics of business is that there are expenses—YOU, the team, the office, etc.—which need to be recuperated by your work—the work you do for customers, after which they pay you. It leaves very little time for reflection, e.g. through blogging, etc., and for making things explicit, e.g. through blogging, etc.

I’m still a big fan of Michael Gerber’s E-myth revisited, which is really about writing that franchise manual for your business, so you can both understand the processes happening in your company, and expand on those, by more easily passing on knowledge. It’s Taylorism, of course, or Scientific Management, or any of the other management methodologies that followed in the past century.

But these activities require time, time which people inside organisations usually do not have, and hence prefer to outsource to outside consultants, who then need to make their knowledge explicit and again implicit in the minds and methods of their clients’ organisation.

It’s a real nightmare for people (like me) who think to much and always aim for something higher. And who want to blog. And who want to do good business…

Thoughts?
Vincent

(Picture courtesy of Fisica & Psychica)

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From the European FT this weekend:

“Blackberry owners will soon be able to download music wireless tracks to an application that will help the smartphone compete with those made by Apple and Nokia. … Most tracks will not have copy protection software, which restricts how many devices the music can be moved to.”

It’s the word “most,” which has triggered today’s rant on PR, technology, media, and more. First of, what kind of statement is that most tracks will not have copy protection? Why not all, why not none?

Looking at the past, we all know that copy protection, aka DRM, has plenty of negative associations attached to it. And, as with most negatively perceived technologies, it has been hacked so often that the word “protected” has just become a PR term. Copy protection is not a feature, it’s a handicap, but clearly most songs on the Blackberry platform will not be handicapped, which is… a feature??

We all know that optimally, no producer (or organisation associated with music production) would allow music to be released DRM-free. But the very fact that protection means Zilch, means that actually there is no point to implementing any kind of DRM-system, except on the request of the owner(s) of particular songs (which probably happened here). So, instead of all or none, we get “most,” which is just BS. I already predict that this new initiative is going to fail, by the sheer indecisiveness of the PR message alone, which is a reflection of how little thought-out the business strategy must be.

My point in all of this, infused by a single expression of vagueness, is that somehow technology has spun out of control. There is a system of checks and balances in place, there is a self-correcting mechanism at play, but no one has the complete overview of how it works and when it will work. In the case of the recession, for example, things will balance themselves out again. And hopefully we will get a system in place, the more open the better, that will regulate what is happening. But there will very likely be many casualties of war.

In the case of media and profiting from it, it looks bad, very bad. The word “most” perfectly reflects the uncertainty of where it is all heading, but anyone can see that with production and distribution becoming cheaper and more decentralised, there is hardly any need for centralised music companies, except to build systems that track what is out there and rate it (e.g. CBS/Last.fm, Hypemachine) or to fund the more expensive part of the formula: getting on TV/radio (which will also disappear at some point) or setting up a concert (which will hopefully never disappear, but is hopefully self-sufficient).

Sadly, the only solution I see to saving “the industry” is to silo everything off, which is arguable already happening when you look at the behaviour of businesses like Pandora, CBS/Last.fm, and Hulu) and sue the crap out of anyone infringing. That would make everything nice and predictable again, but only if you could make it impossible to go from one side to the other. Star wars.

Some systems where this is the case, more or less, would be gaming consoles, and you would need the same for audio and video content. But because the light and the dark side (traditional media vs. new media vs. piracy) are not separated, you will continue to see a shift towards freeing everything until the only thing predictable will be that there is no money to be made from media, just from the products (e.g. merchandising) and services (e.g. concerts) around it.

Yes, I continue to be very down on traditional media. Feel free to lift my spirits in this area.

Vincent

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