Mobile crowdsourcing

While microfinance continues to get a hammering in the press due to charges of abusive practices, techno startups may be paving the way for a fresh new approach to help the abject poor devoid (maybe) of endemic institutional corrupting influences.

Nathan Eagle here presents an innovative way to harness leading-edge mobile innovation on the phone to empower the poor in developing countries, starting with Africa. This will be a binary outcome - either hugely successful, a gamer changer and startlingly disruptive or be killed by self-serving market forces that perceive it to help the poor.

He launched his company txteagle last year and initial news is positive - a space to watch.

Satire

Don't always like Bill Mahr, but he may have got it at least half right on calling out Jon Stewart on this one.

With all due respect to my friends Jon and Stephen, it seems to me that if you truly wanted to come down on side of restoring sanity and reason, you’d side with the sane and the reasonable--and not try to pretend that the insanity is equally distributed in both parties. Keith Olbermann is right when he says he’s not the equivalent of Glenn Beck. One reports facts, the other is very close to playing with his poop. And the big mistake of modern media has been this notion of balance for balance’s sake, that the left is just as violent and cruel as the right, that unions are just as powerful as corporations, that reverse racism is just as damaging as racism. There’s a difference between a mad man and a madman.

Stewart explains his intentions and defines the role of satire versus status quo polarized news reporting.

Hacktivists

Whether you think they are activists, hackers, wide eyed dreamers or just pure kids with a mental picture of the world that revolves around make belief digital games, there have been interesting pockets of innovation in bringing technology to the reach of the masses.

New generation hacktivists like Heap (open-source interactive mapping) and Haystack (internet security) claim they are not seeking silver-bullet solutions but scalable technologies that will unlock the one advantage the people always had—the sheer power of their numbers. “The technology variable doesn’t matter the most,” says Patrick Meier, director of crisis mapping for Ushahidi, “It is the organizational structure that will matter the most. Rigid structures are unable to adapt as quickly to a rapidly changing environment as a decentralized system. Ultimately, it is a battle of organizational theory.”

However, as Haystack's rise and fall showed us, there is complexity in these technologies that is often non-obvious.

The TED factor

TED began as a California-based conference in the 1980s named after its three initial subjects: technology, entertainment and design. It has expanded its subject matter and its geographical scope, holding conferences and making freely available videos of its speakers. Volunteers translate talks into more than 70 languages. Whatever you think about the original TED business model and the amazing speakers they manage to invite to their events, you have to be even more inspired by how it has spawned an after-life.

A tweet story

So I was probably one of the first 200 users of Twitter when it first came out. After two months, I tweeted, "I'm not sure where this thing is going and how useful it will be . . . ." and put my tweeting on hiatus for 4 years. OK, I was dead wrong! Now, Twitter appears to have taken front stage in the battle for your social networking attention. But usage levels are still debatable as twitter knock-offs try to advance the paradigm and the use of 140 characters to express a POV gets some people into serious trouble as noted by CNN's firing of a journalist over a seemingly benign tweet. It may not be relevant what position we take on the these side-effects of Twitter, but important to acknowledge there is a rising tide of potentially disruptive use cases for Twitter that will surely shift the game in certain situations. Much like FB, at some point the wisdom of crowds proves the value of a tool and we should expect to see some newsworthy applications of this technology in the near future.

Twitter's also a great example of VC startup's and why there's a need for different kinds of CEO's depending on the stage of the startup, interim CEO as they are frequently nicknamed. First Jack Dorsey, and now Evan Williams stepping aside after a two-year stint, we see the company preparing for the next big company creation phase shift. Dick Costolo hired a year ago as COO is taking the leadership position. Costolo was also an early investor in the company. Williams, who oversaw the web site's recent re-design, will remain at Twitter. But he will be focusing instead on product development. As CEO, Williams was able to grow the number of registered users from three million to 160 million. Now, the site is trying to make money off those users. Hence, the re-design, which allows Twitter to sell ads in a way that would not disrupt the flow of messages.

Here's a peek into the future of Twitter.

Here's a use of twitter in social activisim.

Here's how the law lags social media conventions

Freemium economy

The Most Important Things In Life are Free

Chris Anderson "the long tail" guy asserts that with more and more industry leaders turning their traditional markets on their heads by giving away their core product (from semiconductor manufacturers giving away GPS chips, to 1-800-GOOG-411, yahoo infinite email) in the hope of creating new "user generated markets", Chris points to a path that is now well trodden and being followed - whether it is the only successful path is less important. Here's his Wired article as well.

Music business model

How will a dollar of music revenue be distributed in the future? The chart above shows the progression of how a single dollar in music revenue has been distributed in the past as technologies have evolved.

Pre-1990, major labels were responsible for the entire lifecycle of music production and consumption.

During the 1990s, computers dramatically reduced the cost of producing music recordings and CD duplications, increasing the number of independent labels (Indies). The increased competition drove the costs A&R (Artist Development and Recording) and production down. However, to get music played on the radio and get CDs distributed to stores let alone acquiring shelf-space required the Indies to close a distribution deal with the major labels. The result: major music labels enjoyed oligopoly profits from their stranglehold on distribution.

Post 1999, the Internet downloads of MP3s became the number one method of consuming music worldwide. The vast majority of this music consumption and sharing is illegal and conducted over Peer-to-peer networks: under the radar.

2005 onwards, the opportunity in the new music economy is in marketing and distribution.

Michael Masnick (of Floor64) presents some astute observations on a potentially new business model for the music industry used by Nine Inch Nail's Trent Rezner. The core of the presentation is the "formula" that is the basis for making money in the music business in the digital era:

Music $$ = Connect with Fans (CwF) + Reason to Buy (RtB)

There are many artists -- famous and not so famous -- who've been making use of this formula to create successful strategies for building up a stronger fan base, creating wonderful new works of art, distributing them out to the community and getting paid for it at the same time.

What made Reznor so interesting as a case study was the fact that he's done it so many times in so many different ways that he, by himself, represents a great example of how you can approach this simple formula in an infinite variety of creative ways.

CES - the next big thing

CES is the worlds biggest consumer technology conference. This year, they were host to parading some new cute gadgets ranging from Internet delivered TV (over the top, OTT) such as Boxee, In-Car Connectivity, Electronic Book Readers, 3D TV, Tablet computers, Mobile TV, and Google Nexus one. The biggest discussion at the conference appeared to off the limelight where vendors were discussing how the business models would need to be changed to accommodate the many ways that the media is being served to the end consumer.

USA Financial Statement

Morgan Stanley's Mary Meeker presented a stark picture of the US entitlement crisis at the Web 2.0 Summit in San Francisco.

Innovation

IV's approach to inventing is to propose things that appear crazy in the beginning. If you look at the really BIG problems they're trying to solve from taming hurricanes to counter the effects of global warming, you just have to, maybe, pay attention - at least they are in the company of the world's greatest optimists.

"It is always delightful when a great and beautiful idea proves to be consonant with reality."
Albert Einstein

And the Oscar goes to . . .

The Oscars got it right. . . for best original song: "Once"

3 weeks, 2 handycams to make this indie movie from Ireland for less than $100,000. Now, that's movie making at its best and what an uplifting song for once.

Bravo!

Next generation search

I wrote about the next thing in search a while ago citing the inherent weaknesses in Google's search methodology. I was caught today by a blog citing the launch of SkyGrid which appears to be trying to bet the farm on predictive searches for very specialized and high paying consumers - hedge fund managers. Monitor110 versus SkyGrid versus Old School (Bloomberg, Google) -- this could get very interesting very quickly.

Ping pong

First blog of the New Year. Have a great 2008! Here's a bit of doodling on current events and business startup.

With the Iowa caucus taking place this evening, I was compelled (don't ask why!) to compare and contrast selecting a startup employer (ping) and selecting a country leader (pong). While the two are very different decisions, I wonder why, in the latter, the bar is so low and consistently skewed towards a media shaped icon. It would be interesting to see the media apply the same benchmark checklist to pong.

Less than a year ago, I transitioned out of a ping and wanted to codify some of my experience and remind myself to get more comfortable with these issues before taking on a ping role again. While I have no regrets working for a ping, others may choose to be more selective based on the responses to these points:

(ping) What is the track record of the management team successfully launching a company? While academic qualifications, prior work record and general banter given to you by the executive management team may sound impressive, remember to gauge whether this is a on-the-job training for the CEO or based on previous successful outcomes. It is best for new employees to have a good feeling about the CEO/CFO positions and their combined ability to take this startup to the next level. What are their funding requirements? Have they raised money before? Who is in their capital formation network?
(pong) What is the track record of the executive team and their advisors campaigning a new term? I was blown away listening to Allan Nairn who cited the track record of the advisors to the leading presidential candidates. Perhaps the pool of "belt-way talent" is only so deep. Certainly makes one wary of listening to the media framed talking heads. Why don't we get (demand) a CEO/CFO view of at least a first 12-month plan?

(ping) If you are receiving employee options, what is the number of fully-diluted outstanding shares? Options should be granted or committed to on joining the startup. Typically, option grants are a key component of compensation in a start-up and are often promoted as such. But the details surrounding stock options are often complex and confusing for non financially-oriented individuals. It is best for employees to understand as much as possible about their option grants, but the first place to start is to ask how many outstanding shares there are. From that point, one can calculate the percentage of the company an employee will own and a better gauge of the magnitude of this compensation component. It surprises me how many startup employees I know who are excited to have received a grant of x number of options, but never bothered to ask what relative percentage of the company that translates into.
(pong) If the candidate promises "read my lips ... no new taxes," what is the plan for balancing the budget or fiscally staying afloat? It may be wise to ask someone who understands numbers to help you understand numbers based on opportunistic promises. None of us are CPAs or economists but we do understand there is a cost to everything and that there's no free lunch. Make sure the impact of any financial promises are properly articulated. Strange how when we buy a house we demand an inspection, when we vote for a country leader, no comparable test appears to be conducted - perhaps an area where the "fourth estate" needs to unshackle their chains and better serve as the public's surrogate watchdog.

(ping) Has there ever been a down round, a flat round, or a CEO change? Any of these three events are an indicator that the startup has faced some difficulties in the past and may not be on track moving forward. If one of them has occurred, prospective employees should seek out as much information as they can the context of the situation. After all, there are exceptions to blind the assumption that these are a black mark (e.g. a founding CEO stepping aside to make room for professional management could be an indicator of successful growth). However, if any of these issues have arisen, it is a signal to dig deeper into the health of the business.
(pong) Is there any track record of trial through adversity with the President/VP and who will take the place of the President as a contingency? Can the running candidates (and their mate) cite examples in their career that are good tests of character that may set a pattern of good or bad behavior once they are in power. Isn't past performance at least one indicator of possible future performance or should we just roll the dice.

(ping) What is the burn rate and how much cash is in the bank now? Even if a start-up is successfully executing, it could still face a cash crunch if it is not yet profitable. Employees should ask to find out how much longer the company will ride without the infusion of another round capital. While the actual answer to this question won’t necessarily provide a definitive answer about the ability for the company to access both cash and capital, it will open up a discussion about it.
(pong) What is the fiscal plan as it may impact specific programs, and are there consequences for not performing? Are there specific plans in place with specific budgets that have checks and balances in place to make the governing elite accountable with consequences for not performing?

(ping) What is the plan for exit strategy and its timeframe? The answer to this question is a soft one with many factors, and can always change depending on circumstances. However, it is best to find out management’s view of a possible exit strategy. Is the company pieced together for a quick flip, building for multi-year significant value creation, or plan on holding for the long term as an eventual cash cow (for founder/investors)? These expectations will affect not only how long employees may be working for the company as it exists today, but more importantly, the resulting surrounding corporate culture.
(pong) Is the 4-year term limit sufficient or should there be an earlier cutoff? While we can't change the world overnight, it is worth recognizing that once we elect a new governing elite, we are held hostage for a time frame that was established over a hundred years ago. Perhaps as the velocity of change increase, we should be less forgiving to an incumbent to prove themselves. Wall Street will argue for more of the same of course.

(ping) Could you meet the CEO, the founder(s), and those on the management team? Start-ups are all about the people involved. And there are a small number of people who are largely going to affect the organization. Even if an entry-level employee is going to work in engineering, I think it makes sense for him/her to meet the VP Sales; likewise, a marketing manager should meet the CTO. Yet it might not happen unless the prospective employee requests it. The handful at the top are going to have a profound affect on the future of the company as a whole and the position (regardless of function), and therefore it is best to meet as many people possible in the company possible before joining.
(pong) Should there be more intimate exposure of the candidate and his team of advisors and executive team?



Youtube was used in an innovative, but arguably limited, way, by CNN to pose questions to the Democratic and Republican candidates. Surely, we need to find better channels to communicate the warts and blemishes of the executive team in front of a broader audience without having talkshow hosts tell us what to think of them in their "expert summaries"

(ping) Are there plans in the next six months to hire anyone along the chain-in-command between your position and the CEO? Start-ups often have key vacant positions open as the companies expand and grow quickly. I recommend explicitly asking if there is an anticipated change in the reporting structure in the foreseeable future, as any modifications or additions (even those a few rungs up in the ladder) could significantly affect employees’ roles and responsibilities.

(ping) How many employees did/does/will the company have six month ago, now, six months from now, a year from now? Employee count is a strong (but not a perfect) proxy for management’s and investors’ outlook on the business. Start-ups hire ahead of growth (or at least predicted growth), which translate into a viable company, a healthy work environment, and future internal opportunities. Financial figures and projections are helpful indicators, certainly, but are often a distortion of the full picture (especially early on in a company’s cycle). The growth in employee count (or lack of) directly signals how much work needs to be done and how rosy the expectations are.

Stay hungry, stay foolish

Change may come in the form of a database, applications or integration solutions. Is this the time for the next wave of Enterprise Application Integration solutions aka EAI 2.0? Some people in the business reporting world claim we are ripe for a breakthrough as big as Visicalc. while other people predict a somewhat daunting future depending on your POV, see googlezon

The humble spreadsheet harnessed the power of the microprocessor to millions of PC users. It was and remains the only significant programming tool used by millions of people who know nothing of simple programming such as compiling, scripting, or even simple looping. It provides a simple method of assembling data sources to create a custom "application". The application is really part of a business process, most often a financial process. A "smart spreadsheet" loaded by tagged data for business processes would be a powerful way to unlock collaboration and process knowledge and mitigate the ever growing costs of regulatory reporting and compliance. Sarbox costs -- be gone!

Here's the raw data . . 2007 will see the number of personal blogs exceed 80 million. The number of new blogs created daily will rise to over 100,000 a day or more than one per second. However, many analysts are saying that the relevance, average quality and value of each blog will decline pointing to the stat. that over half of all blogs cease to be active within three months of their creation, and only 13 percent of all blogs are updated more than once a week. However, although some say it will be increasingly difficult to find quality blogs, they miss the point. This is the best spot for CEO blogs that I've been able to find.

"...Growth in the numbers of blogs tracked by Technorati continues to grow briskly. While the doubling of the blogosphere has slowed a bit (every 236 days or so), interest in blogging remains considerable. About 55% of all blogs are active, which means that they have been updated at least once in the last 3 months."

"The integration of blogs and traditional media sites on the web continues. Technorati has put together the top 100 sites that make up "The short head" (as opposed to "the long tail"), which is still predominantly made up of traditional media sites, like The New York Times, Yahoo! News, CNN, and MSNBC."

"By the time you reach the top 5000, blogs have essentially taken over, with very few well-funded mainstream media sites listed." For the full monty of graphics and analysis, check out the full report.

Information dissemination is becoming more fluid and a new form of intermediary will likely emerge: the blog (or ideally somethings that includes the larger world of semantic data) aggregator will emerge, most likely funded by advertising, and specialized in identifying the best quality content . . segue to a coffee meeting I had with the leaders of Monitor110 (I think that's read Monitor One One Zero, binary for 6 .. degrees of freedom--ouch!) and their $11 million financing . . where the FT reported on a seemingly innovative search/news aggregation idea aimed at the financial trading community aka ‘hedge funds.’ Basically it is touted as a revolution in information gathering, digging out the nuggets that exist below the radar screen of the conventional or mainstream press.

They do sound like they have some smart people and decent technology so it may be a useful toy - - however, I suspect the really smart money traders who have known how to search blogs and use RSS readers and tagging and social-bookmarking services etc. will be a bit miffed that any old trader will be (in theory) able to find the same gems of information by paying up for Monitor110’s services. The ground Monitor110 is breaking has been tried before by Clearforest and Relegence and other less known startups for some time now and digital generation traders can mash-up their own intelligent news filters either from scratch or using tools like Netvibes. And beware this space was hyped up by Majestic Research who quickly faltered and fell on their sword.

Edward Hadas over at breakingviews.com (another paywall, but really good analysis site founded by Hugo Dixon) compares it to using the ‘wisdom of crowds’ to trade. ‘Wisdom of crowd’ - mining would be things like Marketocracy and SocialPicks.

Monitor110 is all about finding the needle in the haystack; finding the individual voice or nugget that escapes crowd amplification. Finding the kernel before it becomes a snowball. Beware the paradox of diminishing returns, however: the more people find the needle the more difficult it will be to monetize. Or paraphrasing Dash - ‘if everybody is special, it really just means that nobody is…’ I'm bullish on their assumptions and wish the founders well.

2008: After raising over $20m, Monitor110 skids off the rails - lessons in hubris.

Is it so far fetched to envisage (a future) Google Money and (a future) iPod converging and delivering the killer app, iMoney - - making investing as cool as turning on a music file. Don't rest on your iPod laurels Steve Jobs - we need your brilliance ("stay hungry, stay foolish")! We are indeed in strange times where innovation is being stimulated by government regulators and accountants. Perhaps their time has come - when was the last major shake up in accounting - double-entry bookkeeping? . . a 1,000 years ago.

Building a high tech winner

I received this seasons greeting today and thought it worth while to post it as a blog since it is an excellent rendition of why some companies have the secret sauce and make a difference.

Dear <>,

Happy holidays! Yes, it's December, the holidays are here and it's been a while!

I recently had the privilege of being the inaugural speaker in Google's new MarketingTalks@Google program. This is a variant of the successful Authors@Google program which has featured folks like Michael Lewis, Hillary Clinton, Michael Bloomberg, J.Craig Venter, and more. Those of you who haven't seen me in a while may want to check out my presentation on YouTube. Here's the 51-minute talk for your enjoyment... Let me know what you think!

I wish you and your family a happy holiday season and a new year full of love, health, and (low-carbon) abundance. Thanks again for being part of this journey. Also, please forward this email by clicking on the forward button below.

Stay in touch!

Sincerely,

Tony Seba

9 Fundamental Rules of High Tech Strategy

Head first or headlong

Falling in love is an emotional thing as anyone will attest. However, one would have thought placing a bet on a company was based on a little more than emotion. These companies prove how easy it is to jump in headlong with the herd. And in these cases, neck first!

Also, this was a refreshing view on the recent credit crunch, definitely worth blog-marking.

Technology divide

Several notable technology milestones came to my attention this month. . . all of which are likely to disturb existing markets to some (lesser or greater) extent.

The first was the talk of Google wireless and the news about Google's Android and Open Handset Alliance... and the next was Verizon's response to open up their closed network to new applications and devices. This is a fundamental disruption and should make way for a wave of innovation for consumers. No sign of a similar quake from the FCC or the cable operators.

Second, it looks like the next iteration of the web is on the way with Hummer Winblad's investment in BSG and the acquisition of New Paradigms and Don Tapscott - will be interesting to see how this pans out. BSG has bold plans to take the new web (WIKIs, IM etc) into corporate enterprises. The question still remains whether there is any economic value although it all sounds very cool. . . but I think they need a younger person to represent this new wave. Tapscott is too much of a sage.

Lastly, is the advent of the "small world" of nano-technology, typified by the spate of startups in this space. Nano is a space that's been excellently written up by Batelle Memorial Institute in their recently completed report.

IT doesn't matter

I was reminded of Nicholas Carr's now-famous Harvard Business Review article today reading a blog from a VC who remains a die-hard believer in enterprise software. Carr's most daunting claim was that IT has become a commodity input, irrelevant as a source of strategic advantage. While many in the IT and software industry have commented on the maturation of the software industry citing consolidation and eventual death of the software enterprise business, many others are insightful enough to mark this period as perhaps a line in the sand for the industry. A line marked by a period of black art, hard-manual labor, heroic feats of intervention to keep systems up and running, all at a price that has exponentially grown and kept slightly in check (artificially, at least) by offshoring. . . to a wave of new innovation driven by the power of the internet, long tail marketing, and perhaps a move to transition software into a more industrial discipline than could never have been conceived before by the likes of mainstream vendors like Oracle, IBM, Microsoft, SAP or Symantec. More later. . .

Comments from the blogosphere

I guestimate 95% of the blogs I’ve seen (this is conservative, it may be 99%) veer ‘off topic’ and the host simply pops out a random blog on something completely different. Sometimes the host will preface the off topic with an apology about feeling the need to express something. There was this gut feeling. And this blog is just sitting here ready to take it, and they throw all reason aside and go for it. Your disclaimer, right under the FutureShock Chronicles Title, is an honest description of what blogs were designed to be. On topic is for Web 1.0 static sites. Blogs sound like what they are, thought graffiti.

Good work. Holy cow I really like what I just wrote to you. Hmm, I am going to post this on my blog.

Barney Moran

Blogging, splogging and more

"...Growth in the numbers of personal blogs tracked by Technorati continues to grow briskly as well as corporate blogs. While the doubling of the blogosphere has slowed a bit (every 236 days or so), interest in blogging remains considerable. About 55% of all blogs are active, which means that they have been updated at least once in the last 3 months."

The integration of blogs and traditional media sites on the web continues. Technorati has put together the top 100 sites that make up "The short head" (as opposed to "the long tail"), which is still predominantly made up of traditional media sites, like The New York Times, Yahoo! News, CNN, and MSNBC.

By the time you reach the top 5000, blogs have essentially taken over, with very few well-funded mainstream media sites listed." For the full monty of graphics and analysis, check out the full report.

So far, there is no tracking of splogs that portent the death of blogs as a reliable source of information.

However the real "raw data" comes from the Sun MicroSystems CEO Jonathan Schwartz blog. . . here's an edited version:

One Small Step for the Blogosphere...

I've been an officer of a public company for a while, and I've had access to confidential information for a good while longer. And I'm used to holding my tongue on issues that'd be deemed material to Sun's financial performance. Like a pending acquisition or big sale, or data related to how our quarter's going. In a public company, there are very strict laws surrounding how information's disclosed.

So a couple years ago, when I first started blogging, I and our illustrious general counsel were far less worried about what I was saying, than where I was saying it. For example, I couldn't use my blog to announce our quarterly performance, or disclose a material transaction. I had to use a press release, or a conference call (with a telephone operator, no less!).

Why?

A regulation known as "Reg FD," or Regulation Fair Disclosure - which attempts to ensure no one audience gets preferential access to material non-public information. It's a great concept, designed to prevent selective disclosure, or actions that might advantage one investor over another.

Unfortunately, Reg FD doesn't recognize the internet, or a blog, as the exclusive vehicle through which the public can be fairly informed. In order to be deemed compliant, if we have material news to disclose, we have to hold an anachronistic telephonic conference call, or issue an equivalently anachronistic press release, so that the (not so anachronistic) Wall Street Journal can disseminate the news. I would argue that none of those routes are as accessible to the general public as a this blog, or Sun's web site. Our blogs don't require a subscription, or even registration, and are available to anyone, across the globe, with an internet connection. Simultaneously.

Now we happen to have a like-minded Chairman at the United States Securities and Exchange Commission (the 'SEC'), Christopher Cox. So Mike and I sent along a rather formal note last week, requesting a clarification to Reg FD, one that would permit our (and everyone else) using the internet (eg, a company blog or web site) to release material information. Without a press release or operator assisted conference call. We are, after all, the primary source of such material information - there's no point in going through an intermediary if what we're after is fair disclosure and full transparency. Let the light shine in, don't buy a flashlight.

We've had enough interaction with the Chairman (and read enough of his writings) to know he understands the utility of the internet to inform investors - but until we see a formal revision or clarification to FD, we'll still be limiting what we disclose via blogs and the internet. And consuming trees with press releases. Which can't, in the long run, be all that desirable.

But we'll take it one step at a time...