Frequent thinker, occasional writer, constant smart-arse

Category: Business (Page 3 of 5)

An invention that could transform online privacy and media

The University of Washington announced today of an invention that allows digital information to expire and “self-destruct”. After a set time period, electronic communications such as e-mail, Facebook posts, word documents, and chat messages would automatically be deleted and becoming irretrievable. Not even the sender will be able the retrieve them, and any copy of the message (like backup tapes) will also have the information unavilable.

GmailEncapsulated

Vanish is designed to give people control over the lifetime of personal data stored on the web or in the cloud. All copies of Vanish encrypted data — even archived or cached copies — will become permanently unreadable at a specific time, without any action on the part of a person, third party or centralised service.

As the New York Times notes, the technology of being able to destruct digital data is nothing new. However this particular implementation uses a novel way that combines a time limit and more uniquely, peer-to-peer file sharing that degrades a “key” over time. Its been made available as open source on the Mozilla Firefox browser. Details of the technical implementation can be found on the team’s press release, which includes a demo video.

FacebookEncapsulated

Implications
Advances like this could have a huge impact on the world, from controlling unauthorised assess to information to reinforcing content-creators copyright. Scenario’s where this technology could benefit

  • Content. As I’ve argued in the past, news derives its value from how quickly it can be accessed. However, legacy news items can also have value as an archive. By controlling the distribution of unique content like news, publishers have a way of controlling usage of their product – so that they can subsequently monetise the news if used for a different purpose (ie, companies researching the past for information as opposed to being informed by the latest news for day to day decision making)
  • Identity. Over at the DataPortability Project, we are in the finishing touches of creating our conceptial overview for a standard set of EULA and ToS that companies can adopt. This means, having companies respect your rights to your personal information in a standardised way – think how the Creative Commons has done for your content creations. An important conceptual decision we made, is that a person should have the right to delete their personal information and content – as true portability of your data is more than just reusing it in a different content. Technologies like this allow consumers to control their personal information, despite the fact they may not have possession, as their data resides in the cloud.
  • Security. Communications between people is so that we can inform each other in the ‘now’. This new world with the Internet capturing all of our conversations (such as chat logs and emails threads) is having us lose control of our privacy. The ability to have chat transcripts and email discussions automatically expire is a big step forward. Better still, if a company’s internal documents are leaked (as was the case with Twitter recently), it can rely on more avenues to limit damage beyond using the court system that would issue injunctions.

GoogleDocsEncapsulated

There’s a lot more work to be performed on technologies like this. Implementation issues aside, the inline encryption of the information doesn’t make this look sexy. But with a few user interface tweaks, it gives us a strong insight into real solutions for present day problems with the digital age. Even if we simply get companies like Facebook, Google, Microsoft ad Yahoo to agree on a common standard, it will transform the online world dramatically.

The information age is still filling up its rocket with fuel

Today, the Wall Street Journal published an article by a fund manager who suggested the Internet is now dead in terms of high growth. While I can respect the argument from the financial point of view (although he’s still wrong), it also shows how widespread and unsuspecting even the educated are for the transformation the Internet is preparing us. Yes, ladies and gentlemen – we ain’t seen nothing yet.

But I won’t get into the trends right now that are banging around my head, making me willing to change careers, country and life to position myself for the future opportunities. Let’s instead start with his core thesis:

The days of infinite margins, 1,000% productivity gains, and growth of market throughout the universe are long over. Internet companies now should be treated, at best, like utility companies that get bought at about 10 times earnings and sold at 13 times earnings. Even then, I’m not sure I would give the Internet sector the same respect as the monopoly-protected utility sector.

I am glad that was said, because this is more of a world-wide problem we have, that has lead us into the Global Financial Crisis (GFC). The ridiculous false economy generated over decades of speculative growth – where fundamental asset values were supported by unreal cash – is something we need to stop. The best thing the GFC has taught us, is that valuations need to be supported by independent cash flows with markets not manipulated to inflate their true value. And I can’t wait to see the technology sector (who along with their partners in crime in banking and property) use some basic accounting skills, and come to the rude awakening that, in the real world, that’s how things roll.

Where he is wrong however, is in the innovation that is creating new ways of generating revenue. More importantly, what we are seeing is a stabilisation in technologies invented half a century ago. The Internet and hypertext (the web is an implementation of a hyptertext system) have all been in development for 50 years – and it’s only *now* that we are coming to grips with the change. So to say this is a fad that’s now over, is really ignoring the longer term trends occurring.

As identified in the article, the biotech market will be massive, but I was told by the head of the PwC Technology park Bo Parker in March 2009 that it’s only just resembling Information Technology in the 1970s. However, when in comes to information, things are ramping up for a lot more as the industry has had a lot more time to evolve.

Where do I see things going? Oh man, let’s get a beer and talk about it. Data portability, Semantic Web, VRM, Project Natal, the sixth sense, augmented reality – try that to get your imagination started. I call it the age of ubiquity: ubiqitous connectivity, ubiqitous computing, ubiqitous information – where we have those separate things accessible anywhere and everywhere and when combined will change our lives. Information and communications, after all, are a fundamental aspect of being human that underlie everything we do – and so its impact will be more broadly applicable, obvious, and transformative.

Where’s the money in that? Are you kidding me?! The question is not how many dollars these changes can generate, but how many new industries will they spawn. We seriously don’t know what’s about to hit us in the next two decades for information technology, and clearly, neither do the Fund Managers.

Google Wave’s dirty little secret

google wave logoGoogle has announced a new technology that is arguably the boldest invention and most innovative idea to come out in recent years for the Internet (full announcement here).

It has the potential to replace email, instant messenging, and create a new technical category for collaboration and interactivity in the broadest sense. However hidden in the details, is a dirty little secret about the practicality of this project.

Google Wave is transformative, but it also is a technical challenge. If adopted, it will entrench cloud computing and ultimately Google’s fate as the most dominant company in the world.

The challenge in its development
For the last two years, the Google Sydney office has been working on a “secret project”. It got to the stage where the office – which runs the Google Maps product (another Sydney invention) – was competing for resources and had half the office dedicated to developing it. So secret was the project, that only the highest level of Google’s management team in Mountain View knew about it. Googler’s in other parts of the world either didn’t know about it, or people like me in the local tech scene, knew it was something big but didn’t know what exactly.

However although I didn’t know what exactly it was, I was aware of the challenge. And basically, it boils down to this: it’s a difficult engineering feat to pull off. The real time collaboration, which is at the core of what this technology provides, requires computationally a huge amount of resources for it to work.

It needs everyone to use it
Although we are all digging into the details, one thing I know for a fact, is that Google wants to make this as open as possible. It wants competitors like Microsoft, Yahoo and the entire development community to not just use it – but be a big driver in its adoption. For collaboration to work, you need people – and it makes little sense to restrict it to only a segment of the Internet population (much the same like email). Google’s openness isn’t being driven out of charity, but pure economic sense: it needs broad-based market adoption for this to work.

federation_diagram_fixed2

Only few can do it
However, with lots of people using it comes another fact: only those with massive cloud computing capabilities will be able to do this. Google practically invented and popularised the most important trend in computing right now. A trend where the industrial age’s economies of scale has come to play – reminding us that there are aspects of the Information Economy that are not entirely different from the past. What Google’s Wave technology does, is give a practical application that relies on cloud computing for its execution. And if the Wave protocol becomes as ubiquitous as email and Instant Messaging – and goes further to become core to global communications – then we will see the final innings to who now runs this world.

Wave is an amazing technology, and I am excited to see it evolve. But mark my words: this open technology requires a very expensive setup behind the scenes. And those that will meet this setup, will be our masters of tomorrow. Google has come to own us due to its innovation in information management – now watch Act II as it does the same for communications.

Why Twitter will make advertising an endagered species

twitter-logo-small Twitter has transformed the way we communicate in the world. That’s a big deal, because as human beings, the ability to communicate is how we broke free from the rest of the animal kingdom. Our entire society is based on this fact, and so it should come as no surprise that so are some of our biggest industries. Advertising, the billion-dollar industry that funds the web and media, is literally about communicating to the public.

More fundamentally, that’s how the market economy operates. There are three elements to a market: conversations, relationships, and transactions. In the industrial age, we forgot about this and came to associate markets as purely transactional: we see a price attached to a mass produced item, and that is meant to convey everything we need to know. But as Doc Searls shares the story with his African friend, the conversation at the market is how selling used to be done, underpinned by a relationship.

My firm PricewaterhouseCoopers is one of the biggest firms in the world. In Australia, we are almost twice the size of our nearest competitor and manage to charge more than our competitors as well without consequence. I’ve often wondered how this could be, but it was only until I broke down the fundamental components of the market that I realised. Price matters – but only when you don’t know anything else. When someone gets to know someone at the firm, they have conversations – and build a relationship. Those relationships are what makes PwC the behemoth it is. It’s not that price is irrelevant, but now with additional information to inform an economic buyer, it’s no longer the sole determinant.

Demand and Supply, sitting in a tree
Twitter co-founder Isaac “Biz” Stone recently defended the company’s stance on advertising as a revenue model. He rightly says the banner ad model is dead – no kidding. But his brilliance comes through when he says that they are exploring ways in “facilitating connections between businesses and individuals in meaningful and relevant ways”. Those words so simply explain more than just Twitter’s opportunity, but the entire future of advertising.

My half-cousin Alex Lambousis has created his own fashion label. Primarily a Jeans business, he controls the entire design process as he owns an industrial laundry, and so can compete on the global scale with high-end jean product. Like any startup, he’s trying to crack new markets.

Think about Alex’s issue. He’s a wholesaler, who relies on retail outlets to sell his product – not exactly the best of customers. He’s reliant on celebrities wearing his clothes, and negotiating special rack space in high end fashion outlets, to get exposure of his world-class product. But it’s a hard market to crack – he’s had success, but is not where he wants to be. What’s a man to do?

Have a look at this search query I just did on Twitter’s community. Twitter allows you – in real time – to search for what people are talking about right now. My first attempt, without trying to be creative with the search string, yielded the following results:
new jeans - Twitter Search

A new customer just appeared on the market half a minute ago. A few of the others can be identified as market opportunities. Imagine if Alex simply responded to them, giving them a discount on his range or just pointing them to a blog post where he can show case his in-depth knowledge. Before the Internet, for a wholesaler like Alex to make money, he relied on advertising in fashion magazines. Now he can interact directly with his customers, and even if he can’t make a sale – he can at least invest in a relationship for future sales.

He’s having a conversation and building relationships. Price is no longer the only source of information for the customer. Those curves on the demand and supply curve have now been personified. That’s better than some poster stuck on a billboard – that’s a return to how our world used to work before factory’s pumped our standard-issue Model T’s.

I might not have solved Twitter’s revenue challenge in this post, but I sure as hell am excited about the future opportunities afforded by tools like Twitter for the economy.

Commercialising innovation

Today I attended Vibewire‘s e-festival of ideas, which was done in conjunction with the Australian Innovation Festival. Gavin Heaton had asked me to speak about one of the Cs of innovation, which was commercialisation (the others being creativity, collaboration, connections, and conversation).

I had some great discussions with people there and it’s great to see so many passionate people share ideas about building a better future. The video was streamed online – hit play on the video embedded below and enjoy. (I come in at the 17 minute mark.)

15 great people I met in America

On March 2nd, I departed Australia for a six week tour in the United States of America. I spent three days in LA, two weeks in San Francisco, a week in Austin, three days in Boston, a week in New York, a week in Miami, and a weekend in Vegas. Sadly, I’m writing this at the airport for my flight back to Sydney.

It was part vacation and part career development. The two weeks with my three best friends from Australia partying with me in New York, Miami and Vegas was an experience in itself. But that wasn’t the catalyst for this trip: I knew all these people in the industry but had never actually met them. I ended up getting a lot more than I bargained for.

Rather than self-indulgently recount my trip here and views of this amazing country, I thought I would do something more useful. Below I highlight some cool people I met, who you should aim to meet one day. Meeting quality people is not an easy thing – I’ve now got 15 you can hunt down and stalk.

There are certainly a lot more people I want to mention, but for the sake of your attention span and my limited battery at the airport, here are a few. They are in my eyes, all people to watch – some are just starting out, other’s are well established. But either way, there was something that made me click when I spoke to these people.

Best workaholic: Brady Brim DeForest
Brady Brim DeForest
The workaholic tag is not something I drop on someone lightly because I am one of the biggest workaholics I know. But Brady redefines the word, and the fact he limits his sleep to only a few hours to get it all done, is proof. I’ve been working with Brady for a year on various things, but only met him for the first time now.

The Streamys on Times Square Looking at all the projects he is involved with gives you an understanding why he’s so impressive. Things as diverse as owning an art gallery, being a judge for the Oscars, lobbying for sustainable food practices, and have founded multiple efforts in technology that have made him wealthy in all senses of the word. For example, Kodak has an ad boasting that they were a sponsor of the Streamy’s on Times Square – a thing Brady started this year. He is 25, and he has more experience than people twice his age.

Biggest change agent: David Recordon
David Recordon
I’ve come across Dave a lot because things I work on in the DataPortabiliy Project overlaps with what he does. We had never actually interacted, but we knew each other existed from afar. But what blew me away was actually meeting him and getting an insight into his personality.

Dave is influencing the future of the web more than anyone else on this list…and yet he is only 23. I feel inspired to know that people are creating a better future that you don’t even know about; are passionate – and for the right reasons. I know enough about Dave because of his open source reputation in the industry: but I only recently found out about his attitude. Which is why he is on this list.

Biggest wise guy: Steve Greenberg
Steve Greenberg
Steve has become one of my mentors in life, where we have spent hours arguing about things, and him telling me how I need to evolve with my future. He’s the main reason I did this trip, but the ironic thing is that we had never met up until now. I don’t need to talk up Steve – the fact I regard him a mentor to influence me, should communicate more than you need to know.

Most successful person I knew but didn’t know that I got to know: Naval Ravikant
Naval Ravikant
Quite randomly, I ended up meeting and getting drunk with Naval, having some of the best food in San Francisco (thanks mate!). The funny thing is, I had no idea who he was (I thought he was just a friend of Steve’s), but after I checked him up, I realised I had spent an evening with one of the bigger people in the industry.

For example, in Australian tech circles, Venturehacks is considered one of the top blogs for entrepreneurs to track. I knew Venturehacks. But I didn’t know Naval was the person behind it!

He has started 15 companies before (and is he still only in his thirties). And I’m not talking about some little venture that put’s up a pretty website and that’s it – but the kind that make the headlines in technology. Like Epinions – one of the hottest company acquisitions in recent years. He has phenomenal investments in companies like Twitter and Vast – the former considered the hottest company in the industry and the latter what I think is the hottest company in the industry (but that nobody realises yet…sorry, can’t say why I think that).

Best thinker: Jonathan Vanasco
Jonathan Vanasco
Jonathan is an entrepreneur from New York that I’ve talked with before and finally met recently for the first time. The guy is whip-smart, done a lot, and level headed. I learned more from an evening with Jonathan than I did in a semester at university. He’s probably spending a bit too much time on lawsuits with Google, but seriously, is a brilliant mind. Nothing more needs to be said.

Best ‘holy-crap-dude-I didn’t-realise-you-had-achieved-that-much-in-your-life’: Steve Repetti
Steve Repetti
Steve’s another guy I’ve worked with a lot in the last year, but had never met or actually knew that well. We caught up in between my hangovers in Miami, and I honestly was floored by what he has done and is doing. He’s successfully started and run companies – validated by the wealth he now has. He’s worked in a variety of roles, including being CTO of listed companies to running virtual corporations.

Understanding his history, how he recreated his life, and how he thinks about the future with his company is why I’ve added him here. The guy is brilliant. And I can’t believe after knowing him for so long, I only realised that once we had a beer. Hold on – no that sounds right – beer is the solution to everything.

Best drunk conversation: Gabe Rivera
Gabe Rivera
Speaking of beer, I challenged Gabe to drinking with Aussies at SXSW, but we never ended up meeting. And then we ended up getting both invited to an Aussie party in San Francisco, which he dropped by to follow up on my challenge. We had a great chat, and I got some really good insight into things by Gabe. And it might have been just one drunk conversation over a few hours, but it was enough to make me realise how he thinks and what he’s passionate about.

Ok, so what? Well Gabe was recognised by Time magazine as one of the 25 most influential people on the WebBest sober conversation: Devin Holloway
Devin Holloway
Devin is someone I would regularly talk to on the phone about…the future. I know, it sounds a bit random, but we did and holy crap we came up with some cool ideas. We came across each other a year ago, found we had similar thoughts about things, and we’ve since kept in touch because we challenge each other and think about things.

And yes, we finally met! With a background in sales, Devin is another guy in his 20s that’s getting broad experience and will be the type of guy that people wonder how do successful executives like that get made.

Best lunch conversation: Bill Washburn
Bill Washburn
I randomly sat next to Bill at a lunch, and had an amazing chat about the industry. He’s had a very distinguished background in technology both in education and private practice, and he oozed with wisdom about things. He gave me perspective on things that I’ve spent months trying to work out!


Yes, there is a trend here: I’ve listed people who I consider highly intelligent, motivated, and experienced. There is actually another dozen people I want to include, but it’s time we end the procession of males and now highlight women who are under-recognised.

The women
A disappointing thing is that a lot of the celebrated women in the industry are the equivalent of celebrity bimbos – they are celebrated more for their social media status and MySpace pose avatars than any contributions that drive the industry. I want to see less talk about "where are the women" and more talk about "look what these women did".

So I am going to do better. The below women are attractive enough to beat any social media bimbo celebrated in the industry. But they also have brains. And I got to know them well enough, that I think other people should know them as well. There needs to be more role models, mentoring, and promoting of women in tech – start with the women below if you’re looking for some.

My new big sister: Daniela Barbosa
Daniela Barbosa: child star
This is a picture of Daniela when she was a child star in Portugal. Hidden in a box in her house. Whoops…

I first met Daniela through the APML workgroup, and have worked very closely with her on the DataPortability Project. So it’s not fair to say I only just met her, but I stayed with her and her dude of a husband for a while, enough to make me realise a more complete side to her.

Daniela is a genuine leader in the industry, with a prominent role in a large enterprise (not so much in title, but internal influence which is very evident) and an advocate for some of the main trends coming to light (like the attention economy and the data web). As a trained librarian, this whole information sector thing is fitting with her like a glove. She knows her stuff, knows a lot of people – and better yet, is making a massive contribution to the industry in a way that is yet to be recognised.

Most likely to beat someone up: Mary Trigiani
Mary Trigiani
Mary is a marketing strategist I worked with a year ago and finally met recently for the first time. I am sure I will get in trouble for giving her a title like the above, but that’s what I love about Mary for real – she doesn’t put up with crap.

Mary get’s marketing, has raw experience from the trenches, and pushes ahead without the bullshit. Manage to stay out of her way when mad, and you’ll definitely learn a few things from her.

Best thank-god-we-did-coffee person: Kaliya Hamlin
hamlin_kaliya_2009
I’ve known Kaliya for over a year, and we haven’t exactly had the most positive relationship. All our interactions seemed to be arguments, and we never really got off onto the best foot.

So we met for the first time and the whiteboard got a fresh wipe. Kaliya is quite simply brilliant and we had some great chats. The best way I can categorise her is as a community organiser – she’s prevalent with things in the identity world as well as women in tech. She knows a lot of things, people and is doing awesome stuff that will be transforming the industry.

Having described three prominent women that already have a reputation (the above), I am now going to highlight three without one (or still developing). I am willing to put money on them that they will a Big Deal in the next decade, and the only thing stopping them is them not realising their potential.

Most likely to shake things up: Alisa Leonard-Hansen
Alisa Leonard-Hansen
Alisa is an analyst and strategist that has somehow found herself working in marketing. And now, she’s determined to shake thing up – give her some time, and you’ll see how.

Another New Yorker, she understands upcoming trends better than most people. But I think what really slammed the door in making me realise she was the real deal, was the fact she knew about the origins of Hypertext. She has even read the Memex – the 1940s book that influenced people to create the technologies behind the Web. Now that I’ve revealed that to the world, I’m going to have to drop that as one my tests to sus out people – but no one has ever passed that test before. Look out for her – this chick is smart.

Best uncut diamond: Wicky Mendoza
SXSW friends
Wicky on the far left (me on the far right) + other quality friends we made at the conference whilst drunk as skunks
I was at a party at SXSW alone because the people I was meeting there didn’t end up making it. Wicky approached me out of the blue, and started talking to me. And as we talked and talked, she blew me away with what she’s done and the way she thinks. When people talk about uncut diamonds waiting to be discovered, Wicky should be the dictionary definition of that.

I don’t feel like I can share why I think Wicky has brilliant potential, as it’s not something easily communicated, especially when it’s someone still breaking their teeth in the industry. I suppose when I judge people (yep, all of you), there are certain personality traits I look out for, and she met those.

Someone needs to pull her out of Dallas and put her in the front and centre of a business, so she can grow as your business grows. You’ll thank me for it, trust me.

Best user of the English language: Sarah Townsend
SXSW
Sarah on the left, yours truly on the right
So if talking to people for over a year without having met them is weird, then how I know Sarah is even better. I met her at SXSW, in a conversation with two friends of hers about their blogs. Nice chat but I didn’t say much – I walked away in my drunken slumber, and that was that.

Not quite. A photo was taken of us during our chat which I stumbled on a week later. I said hi nice to meet you and before I knew it something like over 100 emails over the next week, some longer than this post, were exchanged between us.

So unlike the others, I didn’t sit down and have a real-world one-on-one conversation which gave me an insight into her, but I’ve learned enough to realise she’s got a lot potential. But again, it’s not up to me to determine whether she will reach that – just like Alisa and Wicky, as much as I can identify ability, it’s going to be up to her to realise it.

Ok, so my battery is about to die. I’ve made a commitment to myself to always talk-up good people I come across in life, purely for selfish reasons: it means other people can also become better people making my life more enjoyable! I haven’t exactly got much to gain from writing this as I already have relationships with the above and in selecting some people and not others probably does me more harm than good (blame the battery). But for those of you loyal enough to read my ramblings – hopefully you will try to connect with them because they are people worth connecting with.

Social melebrities and the externality of arrogance

The biggest impact the web and the Internet has had on society can be described using one word: "social". Social computing, social networking, social software, social media – the list goes on. The ability for humans to connect sounds simple, but it’s literally shaking up entire industries. With the rise of mass collaboration however, there has been the creation of a new class of denizen.

Social melebrities
Social media is a broad-based buzz word now becoming mainstream, to describe technologies that enables many-to-many communication between humans. A defining characteristic of social media is that it’s a public discussion. It’s like having a conversation with someone around a water cooler and the people sitting nearby join in on the conversation. Although the message is directed to one specific entity, that same message can be seen by people not originally intended to get the message.

Enter the social melebrity: a social media celebrity. They are people aware of how others can see their message, and consequently, modify their behaviour accordingly.

Celebrity

The problem with social melebrities. As someone becomes more engaged in "social media", a natural fact that emerges is that you become better known. People will subscribe to your content and communications, which in turn creates this sense of self-importance. It implies if people are watching you then therefore you are influential.

An externality of this process however is arrogance. It feeds into the day-to-day language of people, and creates unhealthy behaviours. Like the obsession of people getting more followers on a site like Twitter, is really a symptom of someone chasing for influence to feed their insecurity that they somehow matter.

Extending Twitter as the casestudy,
– most people that follow you are spam and inactive accounts. That growing number of followers doesn’t mean anything. That’s not influence.
– Most people that use Twitter have a job. That means, they cannot physically track every Tweet and at the same time be productive. In other words, if they are people that are doing amazing things in this world, they haven’t got time to track everything you say all the time. That’s not influence.

Arrogance

Remind yourself that you’re unique – just like everyone else. Once you delve into this world, just assume you are going to get a lot more exposure of your personal brand. Good on you if you do – but remember, it doesn’t matter. Real influence comes from the types of people that follow you, not from the amount of people that follow you (and following can vary in itself depending how how engaged they are in you). There’s no easy metric to determine "real" influence or reach, but there’s a lesson in that nevertheless: drop the arrogance. You might be famous now – but so is everyone else.

Semanticising Twitter for a revenue model

Twitter It was interesting to read the 11 business models for Twitter. Here’s one that I rarely see ever get mentioned: semantic conversations.

The assumptions.
Before I jump into it, some context as to why I think this is a solid approach.

advertising sucks in the traditional sense. Showing ad’s blindly, is like throwing pamphlets over the Amazon hoping that your target market catches some of them. Or another example: if you’re looking for some relief, do you walk down the main street of your city with your pants down yelling out "I want sexy time"? Sure, some people will approach you – but it certainly is not the most efficient way.

search advertising is the window into the future of advertising. The reason why Google does so well is because when a user searches they are flagging their intent. No more blind guessing – now it’s just a matter of accurately matching that intent to something. To extend the analogy using sex, this is like going to a single swingers party – you know everyone there is hungry, so to speak.

Word of mouth marketing beats any other form. Imagine you’re at a nightclub with your best friend. A model stops in front of the two of you – looks at your friend – and asks what cologne he’s wearing. He replies, she smiles – and then walks off giving him a wink.
You tell your little brother the next day about the incident who’s just run out of cologne. Next thing you know, he’s at the department store calling you and asking what’s that cologne’s name. Unlikely story? Have a think about the last time you bought something – we tend to rely on people we trust to guide our decisions.

Affiliate marketing is one of the most successful ways of making money on the web. My friends at Tjoos.com, help people find coupons – and they make a stupid amount of money because of affiliate deals. Affiliate marketing is rooted in a traditional concept for selling – there are suppliers like a manufacturer, and there are the retailers who onsell the supply like we see with clothing shops. With affiliate marketing, you act as a store pushing a product – and you get a cut of the final transaction if successful.

On Twitter people talk and share The use cases of Twitter are a different topic in itself, but let’s think of one of the most common: people share links with other people. As a case in point, monitor this search query I just constructed. Within minutes, you will see hundreds of new results returned. That’s a lot of links been shared.

Semantic conversations explained
Let’s say I just suggested that people read the book "Growth Fetish". People that follow me know me well enough to look into it as a legit thing. Perhaps some even trust my judgement to blindly buy the book (like I do with some people I know).

Now imagine, if instead of just saying the name of the book or pointing to the authors website – I had an easy way to embed Amazon affiliates. When people read I liked a book or a product, and they see a link – two things happen: they likely will follow the link to see what the fuss is about, and after reading up they will potentially make a purchase depending on how impressed or how much they trust me. Because the link tracks that I was the person recommending it, it connects the sale of that product by that person to me. And they don’t need to make the purchase right there – it can happen up to 45 days later and I still get recognised for it (as is the case with most affiliate programs).

Twitter affiliated

Implementation
It’s going to take a bit of thinking on how to implement this easily. For example, it needs to be drop dead easy for people to find the correct link and embed it. Twitter should tweak its system so that it recognises true hyperlinks that have words aliased, rather than just raw addresses. A way of guessing what the person is promoting and matching it to a Amazon code would be ideal (ie, “findbook:growth fetish” will have Twitter make a suggestion to link it to).

It would have to be a revenue share program, meaning Twitter and the user get a cut. That’s a good thing, because everyone’s interests are aligned. But it also means it needs to be thought out as it’s an art to get the right progressive scale between motivating and killing.

Good luck Twitter: I’m counting on you and Facebook to work out a monetisation model, as you will drive the next wave of growth which builds the industry (like Google did post the dotcom years).

Understanding entrepreneurs

Lachlan Hardy the other week was saying to Mick Liubinskas, myself, and others at the Sydney weekly Official Friday Drinks, that he doesn’t like “entrepreneurs” or at least people that call themselves that because he thinks it’s a silly term. We ended up having a lively debate and explored if there truly is value in an “entrepreneurs” degree. I thought I’d dig into what exactly an entrepreneur is because it’s an interesting term as Lachlan and the boys got me thinking.

Kid entrepreneur

I’ve had the label ‘entrepreneur’ slapped on me twice before without me even realising I was. The first time, I was 15 and lining up in the bank after school. The fat uniform shop lady from my school told me that she needed to get ahead of me, as she obviously had a lot more money to deposit over what she probably thought was me emptying out my piggy bank of $50 in coins. When it finally got to my turn, the bank teller remarked where did I manage to collect all that money (I think it was $5000). I told her I was organising my schools semi-formal, and I was collecting the ticket money. Just after I said that, the fat uniform shop lady waddled past me and quipped: “no – it’s because he’s an entrepreneur” and gave me a look and smile as if to say ‘you smart little bugger‘.

The second time I was called that was at work. In 2006 I pitched a proposal to have social media technologies implemented into the core operation of my rather large firm, which two years on, has successfully occurred. Early on, maybe six months into the roll-out, my home business unit (who would eventually use the technology but had no idea what I was doing behind the scenes in other parts of the firm) gave me an award in front of a few hundred people. As my skinny business unit leader described the story he said the “networking” award which I was being awarded is not appropriate, and instead should be regarded as an “entrepreneurs” award because that’s really what I am.

Weird eh? In the spirit of community, I organised a party for my school mates. Due to frustrations with my workflow, I attempted to make my workplace more efficient. Both those instances, were recognised as entrepreneurial. Fat lady called me an entrepreneur because I had a stack of cash in my hand; my stick-man boss’s boss called me an entrepreneur because I managed to convince senior management though contacts I developed to implement my idea.

What’s the common link?

What is this “Entrepreneur” that you speak of, sire?
According to WordNet, an entrepreneur is: “someone who organizes a business venture and assumes the risk for it“. Or the Oxford dictionary which states: “a person who sets up a business or businesses”.

This is very much in line with how people view the word – but there’s a problem with this definition. Let’s have a high-level look at the types of entrepreneurs.

Immrant entrepreneur

There’s the glorified king of them all – ‘The Entrepreneur’ – who starts a business and then lists on the stock exchange or gets bought out for one-hundred million dollars and makes it as Times person of the year. WordNet and Oxford definition’s through and through.

A second type, the intrapreneur, is an entrepreneur stuck in a big company but displays the same traits as a ‘real’ entrepreneur. The defining difference being they don’t take the same risk of capital loss as their ‘real’ buddies. And correspondingly, don’t get the same rewards.

A third type, is the social entrepreneur like my friend Donnie Maclurcan who started up Project Australia. This is an emerging type, but when people hear about them there’s a bit of confusion. I mean, how does a non-profit venture yield, um, profit – isn’t that what entrepreneurialism is about?

All the above are entrepreneurial, but they don’t match the definition because of a misguided understanding: we are using money to measure it.

Entrepreneurialism is more like a combination of a risk-taker (different from gambler) and passionate expert, who generates value in our society. It’s almost like a function in our society – some people are conductors, others are saxophonists, and others play the violin. Different people pick their specialty: the violinists are playing music according to their function and develop accordingly; the conductors similarly according to their function. Extend the definition with people that love to be employees, and others that love to be managers. There is a different skill class required, and quite often, people in one class don’t want to be in the other (like how some computer developers who love their trade, get pulled away from their passion into management which they call admin). An entrepreneur, like an bridge engineer, is someones who’s flagged ‘I’m on the lookout to build structures of value’ except the former is building structures for markets as opposed to the latter who is building structures for transportation.

The traditional definitions we use are inconsistent. How can you describe something using such a one-dimensional view as finance when really what we are describing are components to a job function or perhaps even a type of labour class. They are almost like an artist, trying to perfect the synthesis of the four factors of production: land, labour, capital, enterprise. With the rise of the corporation as the dominant institution in our society, we’ve forgotten that our society was built by individuals who would otherwise be called an entrepreneur: sole traders selling to a market. We now group ourselves in a collective (a company) for the apparent ‘economies of scale’, as we can minimise our transaction costs.

Here’s an illustration with how the definition is at conflict with how we use it from the “risk” point of view. Most family businesses, like the local fruit-shop when they started, raised capital in the form of a bank loan. They very much are taking a risk there (the risk of bankruptcy) – but we probably don’t spare a moment in thinking the risk they took makes them “entrepreneurs”.

Contrast that to people innovating in technology. Typically a college kid comes up with a great new idea, and he then goes and raises funding from angel investors and then venture capital. What’s the risk there? If the venture fails, the money does not get enforced on the entrepreneur to be paid. People simply pack up shop with low heads and that’s it. In the upside, sure the entrepreneur needs to share profits. But if the only loss they face is the feeling of disappointment and perhaps, the $2 in capital they contributed to start the company, does this mean they are not entrepreneurs?

A better definition
This definition is from my favourite Frenchman, or at least, the guy that made me stop hating the French – and that’s saying something! (Greek waiters and French chefs do not work well under the same roof!)
Twitter _ Loic Le Meur_ _entrepreneur_
Loic says it’s simply someone who moves resources from lower yield areas to higher yielding ones. The man that coined this was an admirer of Adam Smith’s “Wealth of Nations” but felt Smith underplayed the role of an entrepreneur in capitalism. So if you have a fan in your house cooling a room where no one is sitting, it’s moving that fan to the room where there are 20 people that are boiling hot due to the hot weather. It’s a person who has the initiative to reallocate a resource to where the demand and appreciation of that resource is. Bringing it back to economics, entrepreneurs are one of the major reasons our market economy works – and the market economy, despite it’s weaknesses in some areas, is a brilliant system at organising our society.

The WordNet definition is the typical interpretation of an entrepreneur in society, whilst the Loic interpretation is truer to the source of the word. Reconsidered in this light, I’ve now come to appreciate that as annoying entrepreneurs can be (it takes a certain kind- very much a me, me, me view on things; mavericks who upset the order – which sounds heroic but the reality is that they are a real pain in the arse; and the “shut-the-hell-up-Ive-already-heard-you-talk-about-that-idea-a-hundred-times” trait), we certainly shouldn’t diminish their role in society. And if someone identifies themselves as one, I would say they are simply flagging their place in the personality tree: don’t mock it, be aware of it.

Three startups in 24 hours – lessons in the costs of innovation

I’m sitting here at Start-up weekend, a concept instigated by Bart Jellema and partner Kim Chen, as an experiment of bringing the Australian tech community together, part of the broader effort several of us are pursuing to build Silicon Beach in Australia.

I’ve dropped in on the tail-end, and it’s amazing to see what happened. Literally, in the space of 24 hours, three teams of five people have created three separate products. They are all well-thought out, with top-notch development, and clearly designed to actually pass off as a genuine start-up that’s been working on the idea for weeks if not months.

TrafficHawk.com.au is a website delivering up to the minute traffic alerts for over six million drivers in the state of New South Wales, the biggest state in Australia
LinkViz.com is a service that enables you to visually determine what’s hot on Twitter, a social media service.
uT.ag is a service that monetises links people share with other people.

All three of these products have blown me away, not just in the quality, but the innovation. For example, ut.ag is a url shortening application that competes against the many others out on the market (popular with the social media services) but adds an advertisement to the page people click to view. Such a stupidly simple idea that I can’t believe it hasn’t been created before…and it’s already profitable in the few hours of operation! LinkViz provides a stunningly visual representation of links, that it’s hard to believe this was created – from concept to product – in such a short time. Traffic Hawk is a basic but useful mashup that genuinely adds value to consumers.

The challenges
This is a clear demonstration that when you get a bunch of people together, anything can happen: pure innovation, in a timewarp of a few hours. Products, with real revenue potential. It’s scary to witness how the costs of business in the digital economy can be boiled down to simply a lack of sleep! But talking to the teams, I realised that the costs were not as low as they could have been. It also is an interesting insight into the costs to business on the internet, seen through this artificial prism of reality.

For example, Geoff McQueen (a successful developer/businessman, that was also one of the founders of Omnidrive) of the Traffic Hawk site was telling me about the difficulty they experienced. Whilst the actual service looks like a basic mashup on Google maps, the actual scraping of data from a government website (real time traffic incidents), was considerably painful. Without attention from the team in future, their site will break as the scraping script is dependent on the current configuration with the HTML pages displaying the data. The fact that this is a ‘cost’ for them to develop the idea, is a wasteful cost of business. The lost resources in developing the custom scraping script, and the future maintenance required, is an inefficient allocation of resources in the economy. And for what good reason? Traffic hawk is making the same data, more useful – it’s not hurting, only helping the government service.

This is a clear example of the benefits of open data, where in a DataPortability enabled world, the entrepreneurial segments of the economy that create this innovation, can focus their efforts in areas that add value. In fact, it is a clear demonstration of the value chain for information.

LinkViz on the other end have a different disadvantage. Whilst they have access to the Twitter API that enables them to pull data and create their own mashup with it (unlike the hawkers), the actual API is slow. So the price for a better service from them, is money to get faster access.

Talking with the ut.ag boys, the issue was more a matter of infrastructure. They could have had the same product launched with more features, 12 hours earlier (ie, 12 hours AFTER conception) if it wasn’t for the niggly infrastructure issues. This is more a function of the purposely disorganised nature of the camp, and so the guys lost a lot of time with setting up networks and repositories. I believe however, this should be a lesson about the impact of the broader ecosystem and governments influence on innovation.

For example, we need faster broadband…but also an omnipresent connection. A person should be able to flip open their laptop, and access the internet in an affordable matter that connects them to their tools, anywhere.

Concluding thoughts
The whole purpose of this camp, was not the destination but the process. People getting to know each other, learn new skills – or as Linda Gehard says: “It’s like exercise for entrepreneurs”. However what started as a quick and dirty post to give the guys some exposure, has had me realise the costs to innovation in the economy. When you take out the usual whines about investors and skills shortages, and put together some highly capable people, there are some specific things that still need to be done.

Update 8/9/08:Apologies for the typos and misspellings – my blog locked me out due to a corruption in the software and didn’t save my revised version that I thought I saved. And a huge thank you to Joan Lee, who has now become my official proof reader. Liako.Biz, it appears, is no longer a one man band!

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