It’s the end of the world, as we know it

With everyone providing their deadpool lists for Web 2.0 startups and imminent demise of startups it is more critical than ever that start-ups prepare to actually build businesses.You might think the end of the world is upon the startups.

The Sequoia Capital presentation to their portfolio about the effect of the downturn on startups, available capital, product development, shows a variety of potential impacts on startups and offers some strategies to mitigate the risks presented by the down turn. The goal is to relearn how to build successful early-stage high potential growth businesses. This includes learning how to:

  • Perform situation analysis
  • Adapt quickly
  • Make cuts
  • Become cash flow positive as soon as possible
  • Spend every dollar as if it were your last

This isn’t rocket science. I love the focus on the financial side of the equation. Good business is about delivering return on investment to it’s shareholders. This has often been ignored by many entrepreneurs in the pursuit of attention. It’s about figuring out how to go from napkin to asking for the money. It’s starts with understanding the challenges that exist in a market place and offering a solution. Mark Evan’s has a great post, Buckle Down but Keep Innovating, on startups need to focus on business fundamentals and keep on innovating. He even provides example startups that have found an emerging business space. Outside of a few attention focused startups, I love that the list includes startups that are focused on solving problems that many marketing departments and digital agencies are experience in tracking conversations (Federated Media has unveiled social media measurement tools).

Business models might seem like a very difficult proposition. Peter Frisella has 2 great posts on the TechCapital blog about selecting a business model (Part 1 & Part 2). Much of the challenge with business models in the Web 2.0 economy is that it is not clear how they generate revenue. 

  • Models that intrinsically generate revenue

    • For these models it is clear how you generate revenue. For example, it is obvious that a manufacturer can make money by creating and selling an asset and as such this is the suggested model for a manufacturer.
  • Models that do not intrinsically generate revenue
    • For these models, revenue generation is not as straightforward. Instead a variety of “monetization” techniques must be employed in order to generate revenue from the traffic or value they create.

It’s about getting back to basics. At StartupEmpire, Rick Segal will be joining us to help run StartupSchool where attendees will see an idea go from napkin all the way through to funding ready startup.  The goal is to have entrepreneurs in each session “who have real world, hard knocks experience that are signed up to share their stories, lessons and tools”.

Start building empires

Tim O’Reilly gets it.

Computer-book publishing magnate Tim O’Reilly is urging young geeks to stop making software that lets you throw sheep at your friends on Facebook or drink beer on your iPhone and to instead start making a difference in the world. He is daring them, in the words of James Collins and Jerry Porras, authors of the business classic "Built to Last: Successful Habits of Visionary Companies," to take on "big, hairy, audacious goals." – Jessica Guynn, LA Times Blogs

startupempire It is time for developers and entrepreneurs to stop building frivolous, irrelevant applications. It is time to build enduring business value. The initial conversations about StartupEmpire focused on x things:

  1. Inspirational Entrepreneurs – We have the privilege of attending conferences in the US and around the world. We are lucky enough to have seen entrepreneurs and founders that left us feeling inspired. Not everyone is able to attend conferences across the continent, we wanted to bring these world-class founders and entrepreneurs to Toronto.
  2. Focused on Canadian Details – Often the content is focused on a local environment and ecosystem, and doesn’t take into consideration the unique environment in Canada. We wanted a conference that focused on the legal, funding, and government opportunities that are available to startups in Canada.
  3. Hands-on with Real-World Takeaways – Every time we’ve worked on a startup, there have been practical tools and advice that we’ve each needed to help get to the next step of development. We’re hoping to provide everyone with practical takeaways including: sample term sheets, marketing plans, cashflow statements, shareholder agreements, product roadmaps, accounting ledgers, etc.

Things are getting ugly. But it is a great time to be building a company.

More time than money

Nat Torkington has a great post, Effect of Depression on Technology, on the Radar Blog. The last recession or downturn or whatever friendly euphemism you’d like to use, gave us 37signals, Flickr, del.icio.us and others. The tightening financial belts will leave many developers out of a job. But this is really about managing costs, building solutions that deliver value to real customers. Downturns are great at getting rid of the fluff. Valuations tend to freefall during these times, but sustainable companies tend to continue or thrive. The hope is that you’ve raised enough money to survive the credit crunch and customer liquidity issues.

Nat’s observations include the effects as developers and entrepreneurs that we’re likely to see, including:

  1. Good for innovation
  2. Great for free and open source
  3. Open source and cloud computing services will benefit from the tight financial situation
  4. Most consumer apps will be a harder sell
  5. People will have more time than money

It is interesting that Nat doesn’t discuss the impact that this will have on the advertising marketplace. Looking at the latest set of IAB numbers, Google’s “grip on search advertising is tightening”. But it doesn’t talk about the viability of targeted advertising and lead generation as a potential revenue model for startups. I think that Don Dodge discussed how internet advertising works and how a startup built on target advertising might make money. Unlike the last downturn, the online channel has become tightly integrated into businesses. Coupled with a strong tie to performance metrics, it’s likely that online advertising will “consolidate gains over other media during the economic decline”. Advertisers are looking to online and mobile experiences as a way to “boost brand and market share when money is tight”. Startups need to understand the economics and models of the targeted advertising business, this may include deep partnering with advertising networks like Federated Media.

Nat has nailed the role that cloud computing and software+services will play going forward. Why bother with captial expenditure on new servers, when Amazon, Google, Microsoft and others either have or are about to have their servers in cloud that you can rent. Need proof that organizations, both big and small, can benefit from using services in the cloud. Check out the NY Times conversion of their archive and the creation of TimesMachine.

By leveraging the power of AWS and Hadoop, we were able to utilize hundreds of machines concurrently and process all the data in less than 36 hours.

Thirty six hours. No new capital expenditure. Just operational expenditure. For the Times, it seems like a no-brainer to get more content and hopefully more impressions to build their brand. You can see the NY Times use digital channels: iPhone application; the TimesReader application, they are just ways to leverage the existing content to build richer, deeper brand experiences and impressions for readers.

Thinking about starting a company? Build a StartupEmpire, November 13-14, 2008 at the Diesel Playhouse in Toronto.

Making an end run around PayPal

rbcmobex

To: 66239 (MOBEX) 
Message:SEND $5 4165551234

What do you get when you cross PayPal with Twitter?

You get something that looks remarkably like RBC’s Mobex Mobile Payment Service. The service lets Canadians send money from their mobile phones. Feels kind of European. It’s like the future but it’s here right now. Basically, you sign up over the web for an intermediary account. The account is connected to your bank accounts and your credit cards. The service is currently limited to a maximum $100/day transfer. But it is not hard to see beyond these initial limitations. (The program is in pilot for “Friends and Family”).

Participants in the trial are able to use the RBC Mobex payment service on their existing mobile phone, providing it has SMS – text messaging capability. Users simply send a text message to RBC Mobex with the dollar amount and the recipient’s cell phone number. Funds are then taken from the sender’s Mobex account and moved to the recipient’s Mobex account. The recipient also receives an instant text message on their cell phone to let them know when the money has been sent to them.

Amounts of up to $100 per day can be sent to anyone with a mobile phone serviced by any Canadian wireless carrier, even if they do not have an RBC Mobex account. Recipients just need to register for the payment service to access their funds. The RBC Mobex account is a stored value account and enrollment is through the RBC Mobex web-site, where money can be loaded from any bank account with any financial institution in Canada, or by using a credit card. – RBC’s mobile phone payment system lets Canadians send and receive money right from their cell phones

rbcmobex-webportal

You can add money to your account from your bank account or your credit card as a transaction. That means it’s not a cash advance and you’re not charged the loan shark interest rates. It is interesting to connect accounts to a mobile phone number. Now that Canadians have Mobile Number Portability it is possible to start using these as unique identifiers. (There are still open questions about the longer term use of mobile phones a unique identifier).

It is interesting to see a Canadian financial institution build prototypes and begin to investigate the marketplace for alternative payment tools. It is not that the financial institutions are stagnant, they continue to build services like Email Money Transfer with Interac. I wonder how many Canadians have PayPal accounts?

“In the U.S. and Canada, PayPal is used for 70% of the gross merchandise value on the eBay platform” – Dana Stalder, VP of Marketing & Business Operations, PayPal

But this is a great attempt to build the next generation of personal banking solution by an existing trusted institution. It will be interesting to see what the next generation of Canadian consumers think of using their mobile phone as a banking tool. With 58% of 12-17 year olds owning a mobile phone (Forrester’s Consumer Technographics Q1 2005 North American Youth Devices & Access and Finance Online Study) and over 76% of US households increasing to over 90% for GenY homes, it makes perfect sense to bet on the mobile device as a the starting point for cashless transactions (Forrester Benchmark 2008: Mobile is Everywhere by Charles S. Golvin).

With cash losing its relevance, the WDA [Wearable Digital Assistants] will become the primary payment device within the next 10 to 15 years.9 The WDA will replace the physical wallet for anonymous micropayments and enable point-of-sale payments with direct debits. – Intelligent Devices will Drive Ubiquitous Banking 

This is RBC making a really strong bet on building a Canadian mobile monetary platform without having to rely on the carriers. The carriers are just that, carriers of the SMS and HTTP packets that reach mobile phones, mobile web browsers and web browsers of the banks customers. I wonder if there is a way that they can or will build this beyond the Canadian borders. Good on RBC, they seem to be putting a stake in the ground based on solid research.

The program is open for any Canadian bank account holder to try out. Sign up and give it a poke, i.e., send me money 😉

TechDays

Mark Relph has some Q&A from John Oxley and Rick Claus about the upcoming TechDays events.

Each year our team strives to deliver the best experience to Canada’s Technical Professionals that we possibly can.  This includes thinking about how to change and innovate our programs to ensure that are meeting your expectations.  You told us that you wanted an event that focuses on helping to build your skills.  You expect a world-class event experience and you expect it in more places than just Toronto.  The team has been working hard for months to respond to your feedback and TechDays in the culmination of that effort.

TechDays 2008 is our largest technical education conference series for IT Professionals and Developers in Canada EVER. With more than thirty 200+ level sessions in each city there truly is something for everyone.  This is not a “marketing event”.  You can choose from tracks and sessions including: Windows Development, Web Development, SQL Server 2008, Infrastructure or our first large scale deep dive into Microsoft’s Virtualization solution.  The broad technical education at TechDays is delivered by Microsoft staff, our Partners, and a variety of industry experts.  The technical sessions and onsite experiences combined with the TechDays learning kit are designed to help you grow your skills, give you the tools to learn, to share best practices and build connections in the industry.

TechDays is an interesting change in focus. Sure it’s a Microsoft event focused on Microsoft technologies. But it is an event focused on bringing content focused on helping provide career development and skills development for IT and software development professionals. The goal is to provide real world education and experience by Microsoft staff, Microsoft Partners, and industry experts.

Dates

  • Toronto: Oct 29th and 30th
  • Montreal: Nov 6th and 7th
  • Vancouver: Jan 21st and 22nd
  • Calgary Dec 10th and 11th
  • Ottawa: Nov 27th
  • Winnipeg: Dec 4th
  • Halifax: Dec 17th

Cost

  • 2 Day Conference
    Toronto, Montreal, Calgary, Vancouver
    Early Bird Price: $ 249.99 (By Oct 15th)
    Regular Price: $ 499.99 (After Oct 15th)
  • 1 Day Conference
    Winnipeg, Halifax, Ottawa
    Early Bird Price: $ 124.99 (By Oct 15th)
    Regular Price: $ 249.99 (After Oct 15th)
    Space is limited to: 5,000 IT Pros. & Developers

Attendee Benefits

  • 6-month TechNet Plus Subscription
  • Visual Studio 2008 Professional – Full Package Product
  • Expression Web – Full Package Product
  • Visual Studio 2008 Team Suite – Evaluation Software
  • Expression Studio – Evaluation Software
  • Virtualization Resource Kit
  • 30% off certification voucher – Applicable to All MS Certification Exams
  • TechEd 2008 DVD Set
  • $100 Discount Coupon for DevTeach/SQLTeach

TechDays in the wild

Backtype launches

backtype Christopher Golda and Mike Montano have launched BackType. Jevon writes about the BackType launch on StartupNorth. And includes coverage of their previous startup, iPartee and their interview by Austin Hill on StartupNorth. I had the priviledge of meeting Christopher at Mesh 2008 in Toronto, and we’ve shared a number of email conversations about iPartee.

BackType is funded by Y Combinator. It is a search engine for comments on blog posts and other media. The BackType engine forages the web for comments, allowing them to be searchable, trackable and attributable to authors across the web. Comments can be displayed and searched on the meta-data including by author, by topic, by time, etc. It can allow social media businesses like Radian6 and others to gather conversational data and begin associating reputation and impact of authors and their conversations.

I’m hoping the BackType guys are returning to Toronto. Their blog post indicates that “BackType, Inc is a privately-held consumer Internet start-up based in Mountain View, CA”. There are lots of reasons for a startup focused on social media to be based in Silicon Valley (Paul Graham has a few thoughts on moving to a startup hub).

Building the next Xobni

  xobniXobni is pretty gosh darn cool, it makes Outlook better.

Most new programs you use, ask you to enter more information for tracking purposes.  Applications like Xobni are the way of the future my friends!  I can’t believe more people are not jumping all over ideas like this.  Instead of asking users to track more information, do more work, and try and convince them to enter more data up front in order to provide them with new features and reports, why not let them install an application, that analyzes the data, and then gives you a ton of cool features! – Miquel Carrasco

Adam Smith’s blog that summarizes a lot of the experience over the past 2+ years building and shipping Xobni. His post, “User Bases, Pricing, Revenue and the Value of Users”, is a really solid way to think about how to build a $100 millon company. The post demonstrates the need to deliver value to a group of users (at the posting: “Outlook has 500M users, Skype has 200M users, Thunderbird has 8M users”). Adam walks through some hypothetical numbers to build a $300M company, it is dependent on a freemium model with 1% conversion and a $10/month reoccuring subscription revenue. It’s an interesting model for entrepreneurs and clearly dependent on getting access to a significantly large user base.

Xobni, TinEye, Photosynth all extra extra information from existing data.

The real genius behind Xobni is that they realized that they can give users more information, and allow users to interact in whole new ways with their email, without asking them to track any more information at all! – Miquel Carrasco

Xobni extracts relationships about contacts, your email patterns and other data sources on the web to improve your mail expereience. TinEye uses pixel and region matching to improve image search. Photosynth analyzes collections of photographs and extracts a three-dimensional model and the relationships between light points in each image. The trick is in figuring out “Why do people want what you’re building?”.

How do you build an application like Xobni?

Xobni is an Office for Business Application (OBA). OBA is a way to build applications that use Office apps context for your application. Why use Office for context? There are over 400 million Office users worldwide. There are a large number of enterprise and corporate clients that access Exchange using Outlook. If you’re interested in building an application that improves email and has a significantly large user base to build the necessary revenue model, Outlook and other Office applications are a good starting point. It is a defined market with problems and opportunities for improvement. 

Xobni is an add-in for Microsoft Outlook. It uses a set of custom file system, email analytics, SQLite and custom windows elements. (It’s possible to get SQLite up and running on .NET in 3 minutes). Xobni UI is rendered in a custom task pane in the Outlook client. The application indexes your mail and links to web services (LinkedIn and Facebook). Adding a Custom Task Pane to Outlook is probably the easiest part of building an add-in like Xobni. But it is the starting point for the display and user interaction through Xobni. The starting point is to create a Custom Task Pane and then to access the Object Model to begin indexing and analysis.

But why rebuild Xobni?

Don’t! It’s a better plan to start investigating how to use a customized Office UX for a web application. Email Prioritizer is a Outlook 2007 add-in to help manage email overload. There are a lot of example applications on OBA Central that look like they use Office apps as a browser replacement, which is the wrong way to build a great application. The goal is to enrich the users access to information by integrating web services and additional interpreted data in the user experience, not replace a web form. Document management and  financial data apps that integrate with Word and Excel are probably easier to visualize. But I’d love to see an MS Project integration with Basecamp, Devshop, or Midori (not the other Midori). It’s a  great way to start building enterprise RIAs.

The Tools

 Visual Studio Tools for Office

Additional Reading

 

Crowd powered maps

mapchat Elizabeth Churchill wrote one of my favourite pieces recently, Maps and Moralities, Blanks and Beasties, about using maps designed for online daters “showing areas of San Francisco in terms of nighttime inhabitation and illumination, aimed at people concerned with being alone at night in deserted places. The map shows which areas of San Francisco are dark and isolated in the evenings”. This is a great abstraction of personal safety through mapping activity. Just as companies like Dash are using a P2P network of other Dash users to build traffic and AirSage uses cellular signals to build traffic predictions and estimations. It’s possible to start building mapping applications for next generation mobile devices. In my favourite part of the article Churchill describes a solution where she "designed a map and route/navigation tool for perambulating San Francisco irrespective of footwear practicality. The map charts routes based on the height and style of your shoes with rules like: Five-inch platform boots should not be worn on steep slopes, and stylish stilettos are a no-no on potholed, grated Mission Street”. You can see her prototypes including MapChat based on current work at Yahoo Research. It’s possible to start building applications that enable individuals to share and use metadata relevant to them to construct safer routes.

Millennium Development Goals

The Mozilla Labs Concept Series seems to have really struck a chord with me. I like the idea of projects that help designers “get involved and share your ideas and expertise” to “collectively explore and design future directions for the web”. It is a different approach to the Imagine Cup which is a student technology competition. I appreciate the difference in focus of both projects, one is to “provoke thought, facilitate discussion and inspire future design directions”, the other “challenges students to explore their own creativity to solve what they consider to be challenging problems facing our global society”. Lofty goals for both projects, and I applaud both efforts.

The 2009 Imagine Cup is based using the UN’s Millennium Development Goals as inspiration for new technology design and creation. The eight goals are:

  1. End Poverty and Hunger
  2. Universal Education
  3. Gender Equality
  4. Child Health
  5. Maternal Health
  6. Combat HIV/AIDS
  7. Environmental Sustainability
  8. Global Partnership

The challenge for me is that I don’t immediately see technology solutions to many of these problems. Many of the problems are a result of the economic and geopolitical systems imposed by government agencies and corporations. Change seems routed in politics and not technology design.

Ushahidi.com is an interesting technology solution to the monitoring of acts of violence in Kenya. David Talbot describes Ushahidi is a “Web application that [can] receive citizen incidents reports via text message from any mobile phone in Kenya and display them as a Google Maps application”. The goal is to make it possible for anyone with a cell phone to become a node in the distributed network capable of gathering, distributing and visualizing citizen news feeds. Coupled with audio, video and text the application could quickly become a digital panopticon application enabling citizens and communities to police human rights and other violations. 

At GSMA Mobile World Congress (aka 3GSM) in Barcelona in 2007, a group of leading mobile phone companies and the US government announced the Phones for Health partnership to help fight HIV/AIDS in Africa. The program will allow health care workers in Africa to use a standard Motorola handset to enter health data. The Phones-for-Health system will then use either GPRS or SMS to upload the data into a centralized database which can be analyzed and made available to health officials for distribution of medicine and education programs. The SMS system can also be used to alert health workers, order medicine, download treatment guides, etc.

The UN Millennium Development Goals used in the Imagine Cup are idealistic and can present challenges as abstract design goals. But it’s possible to build interesting prototypes to solve real world problems.

Provoke thought and provide inspiration

mozilla-labs-concept-series

The Aurora project has always intrigued me, a successor to the famed SR-71 Blackbird (though I thought it was designated SR-75 and not SR-91). In a vain of building a next generation experience, the team at Adaptive Path and  Mozilla Labs have partnered to build the Aurora Concept, “a video presenting one possible future user experience for the web”. It’s the second time in recent history where I have been thoroughly impressed with the design process used by the Adaptive Path folks, check out my commentary on the book, Subject to Change, and the Charmr project. The work on the Aurora Concept is a fantastic way to design, prototype and explore future design directions for Firefox and Mozilla and how the web should be built for the next generation of uses.

Part 1 – Exploring shared experiences


Aurora (Part 1) from Adaptive Path on Vimeo.

Part 2 – Exploring mobility


Aurora (Part 2) from Adaptive Path on Vimeo.

Part 3 – Interacting with the physical world


Aurora (Part 3) from Adaptive Path on Vimeo.

Video as a prototyping is not new. Video has been explored by the HCI and design researchers for a long time. In 1992 at Sun, Bruce Tognazzni created the Starfire design prototype. The team at Apple created the Knowledge Navigator in 1987 and Future Shock in 1988. Video is a compelling storytelling medium allowing designers to explore concepts and ideas without having to create functional environments. They are engaging spots that are designed to present a dream to a community in a digestible format.

My favourite part of the Concept Series is the call for participation. It is an open call to designers, developers and others from industry and higher education to get involved and design a vision for the future. The goal is to “bring even more people to the table and provoke thought, facilitate discussion, and inspire future design directions for Firefox, the Mozilla project, and the Web as a whole”.

Concepts may take the form of Ideas, Mockups or Prototypes.

  • Ideas
    It all begins with an idea. A sentence, paragraph, or even bullet-points kick-start the process. Ideas can be simple and non-technical. It should be easy for anyone and everyone to help shape the future of the Web. So throw your notions, inspirations, dreams and visions out to the community.
  • Mockups
    Turn your idea (or someone else’s) into an image, sketch or video. Words are great, but you know what they say about pictures. Mockups offer up a visual and communicate ideas in terms that are just a bit more polished and real. They draw the next person in, tempting them to pick up the concept and run with it.
  • Prototypes
    A prototype is interactive. Feel, touch and play with developing concepts. Prototypes get ideas across by showing off the moving parts. They aren’t always fully functional or pretty, but they’re more than a static image or two. They’re a dress rehearsal of sorts, with minimal programming. Make a prototype in HTML, Flash, or whatever puts things into action.

If I was a student designer looking for a design project to consider for my final year project I would think seriously about participating in the Concept Series or the Imagine Cup.