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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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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Last February, I was in Silicon Valley for a week thanks to a course I was taking. Here’s a summary of what happened there.

UC Berkeley: Center for new Music and Audio Technologies.

Prof. David Wessel showed us a new instrument that was basically 32 touchpads. Each was connected to a sample loop and the x- and y-axis and pressure modified that loop. It was an interesting idea, because it didn’t look like just pushing buttons to make sound.

Fail whale at LHS

UCB: Raymond Yee, “Mixing and Re-mixing Information”

A lecture from a course on web mashups. Yee has written the book, Pro Web 2.0 Mashups. The students need to plan and work on a mashup project. There were lots of interesting ideas, but I was worried that most of them were remixing for remixing’s sake and didn’t add value along the way.

Lawrence Hall of Science

Our contact at UC Berkeley had warned this place was mostly for children, and sure enough, this is a place to avoid unless you’re 7 years or less. Almost as complete waste of time as our Google visit.

We had also pizza available for but no-one from UC Berkeley came (we were too scary). Except one guy, whose name I forget. But he took some of us for drinks downtown, so that was great.

Digital Chocolate / Trip Hawkins

Hawkins really loved "Bowling alone"

Trip Hawkins talked a lot about how leverage is the key to successful business and what are the differences between the supply chain in when he was at EA and in operator-controlled world of mobile gaming. He told how he built EA so that it was NFL who wanted them to use their brand, not the other way around. This is why he sees that his competitors who just put out license games based on movies will ultimately be driven off the market, because they do not control the IP.

He thinks that the iPhone is the coolest thing in all time and how the rest don’t get it: “If you’ve played around with Storm or Android you know, wow, these suck”. In his view, the others had focused in Features (“What it is”) and not on Advantages (“What it does”) and not at all at Benefits (“Who cares?”).

Digital Chocolate’s game development doesn’t depend on the device, because they change all the time and they can publish all their games in every device. This is the only way to make the business work in the mobile space. Hawkins doesn’t see that there will be any standardization, because that would move the leverage away from mobile operators to handset manufacturers.

He also believes that the social starving that began around 1950’s because of TV is the reason people are so keen on the social gaming and internet services and is the driver for “omnimedia”. His suggested reading are The Innvator’s Solution and Bowling Alone. Even in the old days, he didn’t see gaming as waste of time. When playing, he said that “I was thinking, learning and motivated”.

He recommended that we try Tower Bloxx, their Facebook game. I was a bit disappointed, the game itself isn’t that bad if you want to kill time, but it is really spammy. Not only is more screen real estate spent on questionable ads than on the game, not only does it notify your timeline every time you play the game, not only the “social aspect” is just a high score table of your friends, but it also spams your friends every time you play to add the game. Not exactly what I’d expect from the guy who’s partly responsible for the great games EA pushed out in the early days. I asked why is it that as a former hardcore gamer, the only interesting game I played last year was World of Goo. In his opinion this down to how big corporations work and can’t innovate. If Tower Bloxx is Digital Chocolate’s answer to this, I don’t think it’s just big corporations.

Sun Microsystems / Mårten Mickos

FAQ: "If heating is a problem, why is it black?"

We were given the tour at Sun’s Executive Briefing Center. They showed the SunRays and other stuff and it was pretty nice to see up close the Black Box.

Afterwards, Mickos gave us a presentation about open source development and MySQL. He said that MySQL is like “New Orleans” of web apps in that if you want to control an important river, you need to control the important cities and this was the reason Sun acquired them. He also anticipated the question about superiority of Postgres, which is probably asked from him all the time. “When I joined MySQL, Postgres was better. Some say it still is. But who cares?”

He also started a discussion about “Why are web companies so closed?” – a poke directed among others Google, who benefit a lot from GPL software, but due to a loophole in the agreement can get away without publishing their improvements because the software isn’t redistributed. This is what he calls the hypocrisy of open source: “People just want to get stuff for free”.

Like Hawkins, he said that the most important thing for startup business is category-leadership. One advice he gave for Finnish start-ups was “not to be Finnish”: MySQL didn’t have sales offices in Nordics, only in the US. Other thing was that if something sounds good in Finland, it takes 10-15 years for until it’s widely accepted as a good thing, so don’t go to market too early. “There’s still time to make a Google-killer”, he said.

This was one of the best sessions we had, not only because Mickos isn’t there anymore and looks like Sun won’t be either but also because we got vodka and swag. You could see there was an economic crisis, because elsewhere we didn’t get anything.

Nexit Ventures / Michel Wendell

Wendell, from Nexit Ventures, a VC firm interested in Nordic IT startups, told how the VC market works and what kind of mistakes Finnish companies usually make. He told how he ended up in the business of helping Nordic companies make it in the US. Being a VC has lot to do with knowing people.

Lots of interesting discussion, but it was late in the evening and it’s pretty hard to upstage either Hawkins or Mickos.

IDEO

We got a standard theme park tour at IDEO. If you have seen the documentaries on TV or at YouTube, there’s not much to see. I was surprised that they actually avoid any systematic or analytical approach to design and focus more on a holistic, iterative and therefore probably pretty expensive (to the client) approach. As a case study they presented Nokia N-Gage platform they did concept work for. A surprising choice, because not only being old was also a spectacular flop. I guess they thought that being from Finland and the course given by ex-CTO of Nokia, we’d be interested in Nokia or something. If we were, we probably didn’t need to come all the way to Palo Alto for that.

Stanford University / VHIL

At Stanford, we got a nice presentation from Jeremy Bailenson from Virtual Human Interaction Lab. He was talking about the Proteus Effect, or how avatars change humans and their behaviour. For example, even though Blizzard has nothing in World of Warcraft code that gives advantage to taller avatars, they nevertheless level up faster than shorter ones. Also, taller avatars get better results in the Ultimatum Game, the real world height of the human is irrelevant. As I’m interested in behavioral decision making, it was nice to see that it might be possible to do empirical studies in virtual worlds, where we can control many variables that social sciences haven’t been in the real world.

Nokia Research Center at Palo Alto

First NDA of the tour. They showed us some research projects they were working on and had the worst slides of the tour. Most of us came out there frightened how out of touch Nokia can be.

Stanford University / Entrepreneurship Week / “Next Big Thing” Panel

Tim Draper, Tony Perkins and Michael Moe talked mostly about Twitter and iPhone and how making revenue is irrelevant. Draper really loves the free trade. Apparently ad-supported business model is the next big thing.

These guys were either drunk or lived in a bubble of their own. Probably both.

IBM Almaden Research Center / Ray Strong

There's pr0n in it, I'm sure.

Strong talked about how IBM tries to predict the future. First of all, the Almaden Research Center looks like a super-villain’s secret lair from Bond movies (it didn’t help that the guy we met had a Bond-esque name). Forget Google, this is the place to visit. There was the world’s first hard drive in the lobby, which was a nice monument to how long IBM has been in the game.

The main thing Strong told was that it isn’t possible to predict technology in to deep future, only in to the business horizon of up to 5 years. This is what they told to an unnamed government agency that wanted them to do so. As government usually gets what it wants, IBM decided to find a way to do it. They brought in people from academy, futurologists and social scientists. Their approach is half scenarios and half technology landscapes, but their ideation emphasizes backcasting from deep future (>50 years) using trends that can be with high probability assumed to continue.

One problem with scenarios has been that it’s really hard to transform them into strategic actions a company should take. IBM tries to close this gap between scenario planning and strategy by using what they call signposts. These signposts are future events that are both recognizable (when they happen) and actionable.

Strong also talked about how predicting future, it’s important to stay in the qualitative side of things, not only because quantitative side of things usually doesn’t work and might be harmful because of the tendency to use numbers to calculate expected values or other figures, even though they are full of uncertainty and can be harmful.

This was by far the best visit during the tour.

Google

NDA. It was a standard theme park tour. It was pretty clear that Google is exactly as “open” as SEC demands it to be, not an inch more. I guess many for many of us the myth of Google was totally burst.

To be fair, this was the only place where our contact wasn’t executive level so we might have gotten a better experience with a more suitable contact. Even though our host was great and all that, he probably wasn’t the right one for our group.

HP Labs

Runner-up in best architecture for a research lab.

NDA, but they mostly showed published academic research about nanophotovoltaics or something to that end. Our guess is that they didn’t want to tell us anything but out of courtesy showed something. When they talked about things I could understand, they talked about MagCloud and how HP is transforming from a printer and computer company into printing and computing company.

Next day, couple of us went to see the garage (more like a shack) Hewlett and Packard started from and what is considered as the “Birthplace of Silicon Valley”. Not much to see, but at least it had some historical value.

All pictures by me. All rights reserved. Originally published in my private blog, but I decided to get rid of it so I republished this thing here for people interested.

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I’ve long been an anti-fanboy of online video, for some reasons that I already mentioned. As such, I did not expect a strong response on my recent request for collaborative video recording ideas. Similarly, other efforts at discussing online video production, a topic that I personally find interesting, on Friendfeed and with friends, have been met with little enthusiasm.

So, I have come to the personal conclusion that online video is something that people simply don’t care about (very much). Here are a few reasons why:

1. No success-story on the web: Youtube was acquired by Google, which does not prove its business-model; Loic LeMeur (yes, that LeWeb ‘08 guy) abandoned his video-idea, pretty much; The promising Stage6 by the DivX people was abandoned due to, I believe, excessive illegal content being posted on it, etc. etc. OK, the French Dailymotion is no. 1 on Techcrunch’s new Ranking of European hot startups, but even that service isn’t what I would call the perfect implementation of a video service. As a matter of fact, the only thing that seems to work out is television, Hulu (basically television and US only), and Piracy.
2. Bandwidth: even though bandwidth is clearly increasing, it is still, for any business that wants to set up its own video service, a dramatic weight to carry, at least compared to other content on the web. And what if you want to upload your own video? Prepare to have to wait for a while.
3. Does not speak our language: as I mentioned in my previous “hate-post”, the web is largely text-based and the often non-indexability of video means that it does not interoperate with the most-used web-application: Search.
4. Unforgivingly immersive: I listen to audio-podcasts and music all the time, because it’s compatible with the rest of my lifestyle, e.g. travelling/communiting or doing exercise. You have to give all your attention to video, which I consider a barrier to entry for our A.D.D.-infested society.
5. Expensive to produce video (?): a question-mark there because obviously hardware-costs are falling. But still expensive, as it’s complicated and requires both expensive (in terms of time and money) training, patience (a time-cost) while editing, and the ability to work with specialised (and often expensive) video-editing software.
6. Unforgivingly intrusive: It took me a long time to adopt a webcam, until it was basically built into my laptop. I still don’t like to have to dress (up) and make up my hair just to have a conversation, and all that, even though now I will rarely Skype without it. But I am a, tongue in cheek, modern man, which I can’t say for many of my peers.

These and more reasons is why I suspect that Online Video is not a hot topic and might perhaps never be. If you’re in the midst of an online video startup, I don’t know what to tell you, except I hope it radically improves on what has come before.

Vincent
(Picture courtesy of The Guardian)

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I don’t know if anyone of you caught the CNN+Facebook stunt two days ago, where the, I guess burial (?) of Micheal Jackson was shown live on CNN.com, next to a stream of Facebook status updates on the same screen. If I say “Micheal, we LOVE you,” I think you get the general idea of how that went. The CNN-part was beautiful, don’t get me wrong, Stevie Wonder was singing and he rocked. But somehow those two, Social Media with Old Media, didn’t seem to mix at all.

In the Netherlands, when I grew up, we had a TV-station, called The Box (later bought up by MTV, which now has a Music-TV-monopoly in the Netherlands), which allowed people to sms in and request songs. That later evolved to a system, that still exists, I think, of sending messages via sms to the channel, which would play while a song was playing. If I say “Dutch boy or girl, I LOVE you,” I think you get the general idea of how that went.

I can see the attraction. It must be incredibly addictive to try and get your message on the air, to get your 140 characters of fame. And it felt exactly the same with the Facebook+CNN thing, where it seemed more like Facebookers were competing for air-time with themselves and with the unforgiving flow of the live-video station.

As a TV-sceptic—I’ve stopped owning a TV as an adult, and switched to the more geeky (I know…) XBMCs and the internet—I would be more than happy to see this medium go, but I also understand that this 79 year old tradition of sitting absolutely still with a TV-dinner will not go without a fight. The Micheal Jackson + TMZ scoop aside, Big Media still has a higher budget to be quicker and (maybe!) more relevant than small & new Media alternatives are.

Is the Internet the direction to take, however? I think I just made a case that the, still addictive quality of a few seconds of fame (Twitter is the perfect example that we haven’t evolved passed that yet), makes for a somewhat effective marketing strategy for Big Media.

I think that TV is also relentless and monotonous. It does not allow you to switch contexts, it’s a non-stop flow of information, and it doesn’t care about making you waste 15 min. of each hour with senseless advertising. In that sense, it is the complete anti-thesis of the Internet, which has already delivered on the promise of complete user-control (compared to the Old status quo, at least). TV doesn’t care about you, except for your continued presence in front of the tube, and while Internet companies really want the same, we at least have found ways to get around that.

In that sense, I think that anyone with some sense of wanting to keep control over their own life, will continue to turn away from TV. I like watching it, don’t get me wrong, but on my own time and without commercials. The future of Television will either to stay unchanged, reserved for the traditional folk too tired to want to think / interact, or it will be a mash-up of video (e.g. I have 3 min. to waste, I want Stevie Wonder only, without the MJ burial thanks, and on my watch television.)

End musing.
Vincent (can’t stop signing my name, sorry, (my) blogging feels more like writing a letter than anything else.)

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

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

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

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

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

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

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

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

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

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If you think about how the iPhone was launched so many months ago, or rather at what stage the iPods were at, you know that apps were always on the horizon. The iPod G5 introduced a wider range of games that you could buy through the iTunes store, which already introduced us to the idea of buying apps, well games really, through that venue.

When the iPhone arrived, there were NO apps; App-support was basically web-coded widgets with limited functionality. The reason for this was, I believe, that there was no competition to speak of + perhaps the complexity of setting up such a venture. Apps for other phones existed, ok, but it was either in a decentralised fashion (Java for instance), or very centralised and very limited in its offering (e.g. Blackberry & Palm), at least compared to the current iTunes store.

It took pressure from the market [jail-breaking & media] and perhaps already the idea in the back of Apple’s heads to release the app-store a little over a year after the initial device was launched. When it did launch, there was lot’s of hype, lot’s of love, and good news for Apple iPhone numbers both on the device-sales side and that of app-sales.

How the other device makers reacted was two-fold and really quite half-heartedly. Most hardware makers focussed on what they did best: hardware. Touch-screen after touch-screen device entered the market. The most interesting software-based strategy came from Google, which, I guess, realised the potential of mobiles as computing platforms and, more importantly, as search/internet/”revenue for Google” enabled devices in everyone’s pocket.

The current app-store offerings are still lacking with many big parties attempting to launch one for their platforms. The key-factors in terms of adoption seem to be having a critical mass of both users and developers, both of which represent a chicken & egg problem for many, something that the initial iPhone circumvented quite elegantly.

The most promising devices today are Google-/Android-powered phones and the, still somewhat vapoury Palm Pre. The latter seems to be the most competitive, hardware-wise, with much ex-Apple talent having contributed to the Pre’s development. On the App-store front, it’s still very early days, but reports are disappointing.

So, the question is, what can phone-makers and software-makers do to compete with the new “Microsoft” (=Apple) of the mobile space? The choice, to me, appears two-fold:

1. Emulate Apple in whatever way possible: create a great device and create an app-store with a sufficient supply of apps.
2. Or, create a great device and find a way to elegantly get apps onto it, without all this centralising nonsense.

By the wording, it’s obvious that I prefer the second option. As good as the iTunes store is, it isn’t amazing for developers and it isn’t as profitable for Apple as one would think either. The biggest problem for competitors is similar to the music-situation, that Apple has critical mass, which attracts the greatest amounts of customers and is a nearly insurmountable challenge for new entrants.

Where Apple clearly leads is in its developer-support, which isn’t quite as apparent from other software/hardware makers, except perhaps Microsoft (but mainly on the PC-side) and perhaps Google. Palm, as yet, does not offer a comparable service to developers, or to put it in another way, Palm developer conferences are not yet sold out in the way Apple’s WWDC is each year.

Final thoughts:

• I think that developer support is key in any smart phone strategy these days, as mobile devices continue to become computers in your pocket.
• I don’t think that centralised app stores are necessarily the way to go, except (and I suspect this) if the mobile carriers are demanding it.
• The simplest thing would be to create a web-based categorised list of a apps that developers can add to;
• implement mechanisms that vote and demote apps according to their usefulness and other attributes;
• and create / implement mechanisms that prevent abuse (e.g. P2P apps or VOIP apps, though I think the latter can no longer be considered this)
• And continue to innovate on the hardware, because I think there is plenty of innovation left. What makes the iPhone so desirable is the app-support, but the hardware is really nothing to write home about.

Note: I purposefully left the links towards the end, because it allows for a more time-efficient, easier to write (and, maybe, read) article. Links with additional info are included in below list:

• Mossberg on Palm Pre
• Apple App store numbers
• The incredible app store hype (one of many developer complaints)
• Palm developer network

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My cofounder at Verteego Rupert and I met Michelle Greer in the line to the TechCrunch Party during last December’s crappy LeWeb Conference in Paris. Michelle was the sunshine of at-that-time very cloudy Paris for us: we could discuss blogs (see Michelle’s blog), Twitter (follow Michelle here), hot startups, online business models, web marketing, as well as music, France, the US, blablabla

Since then, Michelle being based in Austin, Texas, we’ve been keeping in touch and I couldn’t resist introduce you guys to Michelle Greer, a great professional as well as an amazing person. Plus, I’ve become lazy writing blogs just myself with me and I, so here Michelle goes:

- Hey Michelle, could you please introduce yourself?

My name is Michelle Greer and I am a web marketing strategist here in Austin, Texas.  I love good movies, traveling, funny people, skiing, tennis, yoga, and using the web to connect people.

Michelle Greer was interviewed by Jeremy, who didn’t get paid for it! Look, Tech IT Easy isn’t even mentioned in Michelle’s favorites…

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This week a Dutch commission on the banking recession to came to an end. Their conclusion: banks should be more customer-focussed (translated article). Wow… If there’s anything this crisis has shown us is that during times of crises, creativity takes a dive out the window. Because I’m pretty sure that people were talking about more customer-focus back when the Lehman brothers went out of business.

Just briefly, before I go on to a more pleasurable topic. Wired Magazine last month had an article on what they identified as the cause this whole crisis: the gaussian copula function (depicted above), invented by a man named David X. Li, which made it possible to model risk down to a simple number, allowing for any idiot out there to label an investment as an affordable risk. As the article states, Mr. Li won’t be getting a Nobel anytime soon, but it only serves to illustrate a simple point: money makes the world go round, and more specifically, money makes the world of finance go round. Banks, until recently, had a nice little formula that allowed them to make money. Now they don’t. Will that formula be found in increased customer-focus, I don’t know. But I do think that we need a better understanding of the complex variables that play a part in our globalised economy, and customer focus alone won’t do the trick.

OK, rant over. My stance for this recession remains: work harder and smarter… and don’t watch the news.

In Hitchcock / Truffaut, Hitchcock tells the story of One-Round Jack, a character in an early film of his, The Ring (1927). Here’s an excerpt from the interview:

A.H. In those days we were very keen on the little visual touches, sometimes so subtle that they weren’t even noticed by the public. You remember that picture started on the fairgrounds. There was a fighter, played by Carl Brisson, and he was called One-Round Jack.

F.T. Because he knocked out his opponents in the first round?

A.H. That’s right. And in the crowd, watching the barker, there was an Australian, played by Ian Hunter. As the barker in front of the tent urged the crowd to go in, he had a little flap and could look back over his shoulders to see how the match was progressing. He used a sign to indicate the round number to the people standing outside. We showed volunteer fighters going into the tent and then coming out holding their jaw. Until Ian Hunter goes in. The seconds were sort of laughing at him and they didn’t even bother to hang up his coat. They just held it, thinking that he would never last more than one round. The match started and I showed the expressions of the seconds changing. Then we showed the barker looking in at the match. And at the end of the first round the barker took out the card indicating the round number, which was old and shabby, and they put up number two. It was brand-new! One-Round Jack was so good that they’d never got around to using it before! I think this touch was lost on the audience.

We all know that Alfred Hitchcock went on to become a great filmmaker, but even he started small, experimenting with different effects, like the glass ceiling I wrote of last, until he understood the effectiveness of his medium. It’s an attitude that I greatly respect, and try to implement both in blogging and my work. You can’t achieve great things without breaking a few eggs.

There’s a pretty entertaining TED video here with the stereotypical mad scientist, Cliffort Stoll, in which he says:

“The first time you do something, it’s science. The second time, it’s engineering. The third time, you’re a technician. I’m a scientist, once I’ve done something, I do something else.”

That’s a philosophy I can also respect.

Back to banking. I think that what is customer focus has changed much over the generations. According to my father, customer focus is having a bank outlet + friendly smile in every neighbourhood. More deeply, back in his day, a bank would contribute more significantly to buying a house, funding well over 50% of the purchase price. I’m not sure how the latter has changed now, but I do now that what is called “customer service” has simply moved online. I haven’t seen the inside of a bank in months and I don’t miss it. To me, customer service is having more payment options, much more innovation, as well as for all transactions, no matter how small or large, to be free, instantaneous, and unencumbered by national borders or currency. I want to see the day where all transactions go via a single device in our pocket. I’d also like to see more funding for things like housing and startups, of course, but I know that a certain measure of reality needs to be in place for that, i.e. how credit worthy is your customer.

I think that won’t be able to count on banks much until they replace the faulty mechanism that was either the gaussian copula function or another one, allowing for banks to regain their profitability. I think that this will entail making mistakes and that room needs to be allowed for that. That banks are supposed to be customer friendly, goes without saying, but that banks are businesses that need a solid balance sheet, goes without saying too.

Went a little overboard there on the text. Sorry about that. Hope it’s readable / entertaining.

Vincent

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

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

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

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

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

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

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

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

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Just one post this week, it is again the busy period in Vince’s house. This last week, I’ve read two predictions, both, by coincidence, based on the role-model of Apple. The first was David Carr’s, who asked for an iTunes for news in the New York Times. The second was Ian Betteridge’s, who predicted an iPhone-style app-store, controlled by Apple, for all of the Mac. Let me address them both here.

News… what has that looked like over the years? We had print, which lead to books and perhaps pamphlets. Let’s just jump to the 20th century. We’ve had the onslaught of the marketing age, which also made newspapers big. People have never paid for news really, they pay a minimal fee for the price of the paper, the rest of which is covered by advertisers. Then came the internet and it all went down the toilet. You, me, everyone imagined they could be a journalist, even if it meant just copying the text word-by-word of what someone else had written.

Compare that with music. It started with the production of sound, live performances, then the reproduction of sound across various media. The business-model was 90% of the time a straight sale. Music speaks to our brain, differently from the way news does (it’s all drama anyway, right?), and we are hooked on it, like a drug. So we pay and we pay and we pay. Then comes the internet and the magic of painless reproduction and distribution. The power-houses that are media-companies were slow to catch on and it’s pirate-city all round. CD sales go down! In comes smart Apple with their silly little white box with one button and saves the whole damn industry! We think, oh my god, Apple saved retail! What Apple in fact did was close the loop again. Instead of artist -> CD -> shop -> CD -> consumer, we now have artist -> mp3/4/5 -> iTunes -> iPod -> consumer. Everyone wins, though most of all, Apple.

What is the key here?

• For one, music isn’t news. As I pointed out, music is a drug, while news is a duty. Music is fun, while news is … interesting? We can live without the news, believe me, we can’t live without music.
• Two, news was never a powerful business model to begin with. Since the days of Soap-operas, all media has been owned by advertisers, who somehow have made this industry survive, even though no one was really willing to pay for it. Yes, we can also live without television, but we can’t live without music.
• Music is also a tightly controlled product, it’s expensive to make music and to get it into your ears. News, on the other hand, the media has long learned how easy it is to copy-paste.

The internet has shaken both industries and much more so news. Because its sugar-daddies, the advertisers, suddenly realised that they could get away with no longer paying for the expensive process of print and distribution, as well as having many more options to advertise online. The power-position, which was already unbalanced in the first place, has shifted even more in the direction of the advertisers.

For music, the power of supply continued to be in the hands of the media-companies. In case you haven’t noticed, those are some powerful companies and the world of music and other entertainment media is locked down with some big nails—Pandora, Hulu, Joost, iTunes, take your pick, chances are that most of these are not in your country. The internet has had an effect, to be sure, but they control the supply and they have lot’s of money to change things. They finally got iTunes to succumb as well, with their now variable pricing.

There is no analogy here and no matter the superficial similarities and the coming of the “iReader,” there never will be. News will never be something that we want to pay for. Who wants to pay to hear that Hurricane XX has killed millions, or Region YY is filled with starving children, or that Region ZZ has weapons of mass destruction? Because, that, unlike the stories we may read on the internet, is what news really is: making us aware that our planet isn’t all that. Give me a good song any day over having to hear that!

Just briefly, the iPhone store translated to Macs. Why it’s different: it’s i…Phone, the most locked-down technology on this planet. Vs. the PC, which is the most unlocked technology on the planet. Need I spell it out?

The greater point I’m making is that frequently “visionaries” and “entrepreneurs” write their business plan or manifesto stating that because X is so, my business will work that way too. Analogies, taken too loosely, will kill your business and rather than taking the words of visionaries at their face value, we should work it out: Was X like that really, and is your business like that really too? Chances are… it’s not.

Vincent

(man, I love it when I can pump out all this text in 15 min. or less)

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

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

The organizers: Loïc & Géraldine Le Meur

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

The theme

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

The speakers

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

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

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

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

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

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

The sponsors

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

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

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

The budget, the price

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

Sponsoring & demo room for at least EUR 200,000

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

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

The place, and the temperature…

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

The startup competition

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

The food

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

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

The Internet

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

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

The attendants

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

The TechCrunch party

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

Conclusion

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

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

PR: wait… I: wait… L: wait… LD: wait… I: wait… wait… C: wait… SD: wait…

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Thinking a lot about blue and red oceans these days, which was a topic of a New Venture seminar last week (summary post about that coming up). Still not having completed Blue Ocean Strategy, the book (someone told me, reading the summary would suffice. See slides below), I’m still not entirely sure how to get to a blue ocean. More after the slides.

[slideshare id=61974&doc=blue-ocean-strategy-summary4461&w=425]

I know, from the first few chapters, that you analyse features of a competing business. You list them in some kind of chart and map out how far they go and how to beat them with your own features. Taking the case of gaming consoles, which is as good as any, for the two powerful ones, Playstation 3 and Xbox 360, we would list:

• Online platform (more Xbox360)
• Huge graphical capabilities (more Playstation, but negligible difference)
• Looks better on HDTV
• DVD-drive (huge, unpredictable format-war at launch)
• Games, Games, Games
• Same (more or less) controllers as usual
• Expensive components overall
• Price point in the $500+ (at that time)
• Aggressive marketing strategy, based on above features, targeted mostly at young men.
• Huge multinational corporations with huge budgets
• Lot’s of industry consolidation, virtual and actual
• Added, due to comment: both players may have other motives, apart from pushing their gaming-plaform (e.g. Blu-ray for Sony & Live-platform for Microsoft)

And I could probably go on.

Fighting Microsoft and Sony would require some serious leaps in logic, you would think. You can see that the leap that Sony and Microsoft made was not too far off. It was based on the assumption that any next generation of console would have to be significantly more powerful than the last. And you could see that, them being huge multinational corporations, the thinking was probably that if any drastic industry change could happen (take that format war), they could make it come true. There’s another industry-change that had to happen for both of these to take off like gangbusters, which was that everyone would buy an HDTV. That didn’t exactly happen.

So, essentially, we had several weaknesses, namely that:

• The format war was undecided, confusing customers.
• HDTVs were expensive.
• The consoles themselves were expensive.
• They were eating up each others already small markets (made small by the three preceding factors).

You could also add that they focussed on the same consumer segments as a weakness, but how could they know, right?

Now, if you read into Blue Ocean Strategy, then you would expect for Nintendo to have anticipated these issues. How would that be possible?

For one, they are industry-insiders, just like Sony and Microsoft, so they would have had access to data about production costs of both competing consoles, as well as of the state of HDTVs and HD DVDs, now and in the near future. Two, being a successful console and game producer, they would also have a good grasp on their audience. Three, they would have their own vision and be able to iterate quickly on it.

When you think about it, the leap of logic wasn’t actually happening from those entering the blue ocean, it was from those operating in the red one: Sony and Microsoft.

I wrote this, because sometimes, as a new player on the market, you aim small. You don’t want to upset the big players in the red ocean and instead want to *grow* a blue one. I don’t think blue oceans are grown, they are instead hidden. Growing an ocean is the worst leap of all, because it means changing people’s behaviour. Core-users of Xbox & Playstation haven’t changed one bit, rather you found new customers that weren’t being addressed by those two marketing strategies.

If you do have to make a leap in logic to launch a product, make sure that the price you pay isn’t to expensive.

End of thought.

Vincent

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Where does most radical innovation come from? Where, as an individual, can you expect to get plenty of access to that type of information? If your answer isn’t universities, please let me know!

As promised, I’ll be focussing more on innovation on Tech IT Easy these coming months, and you can be sure that my search for content will focus on universities and other institutes, rather than the internet.

It’ll be interesting challenge for sure, particularly as I’ll be reading a whole bunch of dry scholarly articles and dissertations, as well as tracking down interesting organisations for interviews, to hopefully produce something of value for you and me.

As I’ve asked before, if you have interesting ideas for content of this nature, or even want an interview, article, or thesis (summary) of your own to be published here, please drop a comment or mail!

Bookmark this site for more info!
Vincent

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

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

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

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

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

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

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

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

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

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

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

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

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

Vincent

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