All Images copyright Gizmodo Live Blog.
LifeScan’s app is for people with diabetes in order to “simply diabetes management.”
In their example, they’re putting themselves into the shoes of Maddie, a 15-year-old girl with diabetes. She tests herself six times a day and injects insulin multiple times a day. First she needs to prick her finger and get her glucose reading. Now the insulin meter can transmit her reading to her iPhone over Bluetooth or over the 30-pin dock connector.
She can then track her readings and mark them appropriately as before a meal or after a meal. Then she can track what kind of food she’s eating and how much of it, plugging it into the iPhone, which will tell her exactly how much insulin she needs after her meal.
Maddie can then re-calculate on the phone if she then needs less insulin because she’s going to exercise later.
With the iPhone app, she can then let her parents know that she’s OK by sending them a message directly through the app that has her glucose level and how she feels.
Apps like LifeScan and Charmr show that there is a real need to understand people and their devices. But that we’re about to see an explosion of personal medical devices targeted at behaviour change and routine monitoring of health. I love this space. What I love more is the emerging platforms like Google Health and HealthVault are trying to solve a BIG difficult problem of electronic health records. There is a huge opportunity to start software and “experiences” companies around this space.
Time to research Ontario government funding in this space. It looks like they have invested the $30M from the Innovation Demonstration Fund. Need to review companies and technologies in the Health Technology Exchange at htx.ca. And learn more about Investment Accelerator Fund. You can get access to software and support from BizSpark. What a great time to start a company! Great people, great ideas and great platforms are all abundant.
I’m inspired about personal healthcare startups.
BCTIA has published their criteria for the 2009 Technology Impact Awards. The submissions are due on March 13, 2009. As a start-up there are tradeoffs about participating in these award programs. Depending on the program there might be a cash prize, introductions to funding sources, press opportunities, etc. Or it could be a giant waste of time. You have to evaluate each program individually. I think the BCTIA program is a good balance of Recognition and Exposure. It is really about growing and supporting the local technology ecosystem.
My favourite part about the TIA awards is the submission criteria. I think every start-up should be able to answer these questions [PDF 48.9kb].
Summarize why this submission should be considered for Most Promising Start Up Award category and explain the relevancy of the business concept based on the following four equally weighted criteria and using the listed questions as a general guideline:
- Value proposition
What problem are you solving?
How will you make money?
- Competitive differentiator
What differentiates your product, service or technology from alternative solutions?
What is your sustainable competitive advantage?
- Market opportunity
Please be specific as to the addressable segment of the market you are targeting.
How large is your market?
What is the nature of the competitive landscape?
- Management team
Who are the key team members and board/advisors?
Why does your team have the ability to execute on the business plan?
The questions are perfect for early-stage companies to identify the problem, how you’ll make money, the market opportunity and the differentiators. (The application puts a further limitation of 2000 words).
Why not give it a try?
If you’re a Canadian start-up write a blog post that is less than 2000 words that answers the above questions. Send me an email or a tweet, just @reply me, with a link containing your answers to the question. I’ll retweet the submissions and see if I can share some recognition and exposure.
GigaOM has a great story about "The Growing Ex-Amazon Club and Why It’s a Good Thing”. This is essentially an extension of the Fairchildren model for seeding companies and talent. Jevon has placed MaRS in the deadpool. Austin, Joey and I have wondered about the role of early employees from successful companies at leaving to start, build and grow new startups.
It leaves me to question where are the RIM alumni? Where are the startups being started by ex-RIM employees?
You can find startups with founders from PixStream or Workbrain. You can see startups with DNA from Zero Knowledge Systems. The only RIM alumni founded startup I can find is Metranome.
I hadn’t realized how strong the motto at Reactivity was in our recruiting. We were looking for founders. John wrote about Reactivity’s beginnings back in 2004. I was lucky enough to join Reactivity as an early employee. I think I was employee number 12 and the third employee of Reactivity Austin (after Bryan Rollins and Andrew Willis). Reactivity was trying to build
A metastartup (this is a temporary name only–trying to think of a better one) is a company who’s mission is to foster a community of talented engineers and business people, with the goal of spinning off startup companies from that community, as well as to build a loosely coupled network of those companies.
It was a kieritsu, but not of businesses but of the individuals that build businesses. In recruiting new talent, whether on the design, business, marketing or engineering sides of the house, was to find founders. People that you wanted to leave Reactivity to start a new company. It meant that the goal was to develop every hire into a potential founder. You can see the alumni network of Reactivity designers, engineers and entrepreneurs around the valley. John Lilly is the CEO of the Mozilla Corporation. Mike Schroepfer is the director of engineering at Facebook. Graham Miller is the CEO of Marketcetera. Lynn Pausic runs Expero Inc. Ellen Beldner is the UX Designer for YouTube. Lynn Gabbay is the founder at Novod. Andrew Nash is a Senior Director at PayPal. Bryan Rollins was VP of Product Management at MessageOne before the Dell acquisition. The Reactivity alumni can be seen around Silicon Valley, Boston and New York.
A Magical Legacy – How these guys engineered our world
Fourteen years ago, a company called General Magic promised a handheld device that would make calls, send email, play music, and do almost everything else that makes today’s iPhone so drool-worthy. “Bill and Andy’s Excellent Adventure II” (April 1994) was about the two Macintosh vets – Atkinson and Herzfeld – leading the project. Unfortunately, they were far too early. General Magic sank in 2002. But its legacy lives on, in part because the effort was a formative experience for a team of brillant young engineers. Pierre Omidyar went on to start eBay. Tony Fadell heads Apple’s iPod hardware group. Kevin Lynch cooked up Flash. And Andy Rubin created the Sidekick and Google’s Android mobile platform. Not too shabby. As for Bill and Andy, they are still adventuring excellently: Atkinson works with the artificial intelligence startup Numenta, and Hertzfeld codes for Google. – Steven Levy, Wired 16.12 December 2008
Where are all the startups founded by RIM alumni?
A business model is a method of doing business. All business models specify what a company does to create value, how it is situated among upstream and downstream partners in the value chain and the type of arrangement it has with its customers to generate revenue. – Michael Rappa
Software+Services and SaaS models have been discussed for while, mostly called utility computing. We’ve started to see the rise of utility computing services like EC2, App Engine and Reddog, along with storage including S3, CloudFS, and SSDS. Less traditionally thought of utility computing options include mapping, contacts, mail, among other services pushed in to the cloud. Michael Rappa described [PDF – 141kb] the characteristics of a successful utility as:
- users consider the service a necessity
- high reliability of service is critical
- ease of use is a significant factor
- the ability to fully utilize capacity is limited
- services are scalable and benefit from economies of scale
- exclusive rights are granted for providing service in a given area
Rappa also provided a detailed breakdown of the different business models of traditional utilities. The models are really great building blocks for startups to think about the problem they are solving, where they fit in value chains and the relationship they have with their customers to generate revenue. Rappa presents 9 unique business models:
- Brokerage model
Brokers charge a fee or commission for each transaction it enables. Think eBay, PayPal, EventBrite, esellerate. The formula for calculating the fee varies based on the vertical. Models include exchanges, demand collection systems and auction houses.
- Advertising model
The advertising model is an extension of a traditional broadcast model where the broadcaster is the content hub or web site. Sites provide content and essential services like search, email, groups, etc. Think Live, Google, News.com, Yahoo, etc. This mode works best with either high traffic volume or with highly specialized/focused user groups.
- Information-intermediary model
Data about customers and their consumption habits are very valuable. This is the premise of behavioural analytics aimed at analyzing users to improve advertising targeting. Firms like comScore, Google, Quantcast, Compete, Coremetrics, and tonnes of others.
- Merchant model
Rappa describes merchants as “wholesalers and retailers of goods and services”. Very familiar ecommerce examples include virtual retailers like Amazon, traditional retailers with online storefronts like Chapters or Banana Republic, catalogue vendors like LL Bean, or electronic bit vendors like Gartner or NielsenNorman selling digital products.
- Manufacturer Direct model
The maker of a product or service sells directly to the consumer. This is the most difficult option for me to understand in the context of cloud computing. But traditionally, it is where software developers or hardware manufacturers sell their products to consumers. This can be seen with smaller software providers like ecto, TextMate, TopStyle, etc.
- Affiliate model
The affiliate model provides purchase and transaction opportunities to people on the web. It is a pay-for-performance model used in banner exchanges, pay-per-click, pay-per-transaction, and revenue sharing often seen with carriers and mobile applications. This is often seen with Adsense, Amazon Associates, and can be seen with Mint who earns fees from customer referrals.
- Community model
Rappa describes the community model as based on user loyalty, where loyal users invest their time and emotions in a business, and revenue is generated on the sales of their ancillary products and voluntary contributions. This is the basis of the “open source” computing model with companies like Canonical and Redhat have leveraged the efforts of the community to build desktop and operating systems.
- Subscription model
Users are charged a periodic fee for access to a service. Subscription fees are incurred regardless of usage rates. Most SaaS solutions fit this model, customers pay the developer of a software solution directly. Basecamp, Salesforce, NetSuite and others. This is a very common model that often uses a freemium pricing as a marketing decision to attract customers.
- Utility and hybrid model
The utility model is based on metering usage, it is a “pay as you go” approach. Unlike subscription services the billing is based on actual usage rates. For example, traditional and VOIP long distance minutes that are billed for usage. Storage in the cloud using services like S3 or CloudFS. Often utility models are combined with a subscription model, think cell phones where there are fixed subscription fees for voicemail, caller id, and utility billed services for data and long distance.
These models are different than enterprise software company models presented by Michael Cusumano in The Business of Software: What Every Manager, Programmer and Entrpreneur Must Know to Thrive and Survive in Good Times and Bad where companies exist on a spectrum between a pure products company to a pure services company.
- A pure product play
- A mix of products and services
- A pure service play
Looking at the business models derived from traditional public utilities, provides a richer classification for both the product end of his description. Cusumano’s services refer to people powered services, not a utility or subscription model. Though you could argue that the services and maintenance mix described is much closer to a subscription model.
The question for all startups is what do you to to create value, where does that value fit in the value chain of your industry, and what type of arrangement with customers do you have to generate revenue? It’s simple really: What problem do you solve? Where does this fit with your industry? Who derives value from your solution? And how do you get paid? Answer these questions and you can get on to the hard stuff.
All business models specify what a company does to create value, how it is situated among upstream and downstream partners in the value chain and the type of arrangement it has with its customers to generate revenue.
I’m not alone is wondering about where are all the .NET startups, Sasha Sydoruk wrote ASP.NET startups. I asked about startups building on .NET (though, from a survey design perspective the link was lost in a long, deep post). My friend Aaron is building on .NET and Mono, check out Mindtouch‘s DekiWiki. Geoff is building Moonlight with Miquel and the team at Novell. Don Dodge, Lynda Ting, Dan’l Lewin and the Emerging Business Team write an excellent blog for early-stage companies in the Microsoft technology sphere at Microsoft Startup Zone. There is a growing list of Canadian companies, now that former Toronto VC Lynda Ting has joined the EBT in Silicon Valley.
Lots of these companies aren’t sexy but they solve real problems for real customers and generate real revenue. And that is sometimes a much harder problem.
Are you building something on .NET? Drop me a note.