Archive for the 'Innovation' Category

How any country can leap frog in technology

What if I told you we could time travel to 1989 — and be given a forecast of what a new implementation of the Hypertext technology (called the World Wide Web) could do. Would you jump at doing whatever you could to be on top of this trend? Smart phones (Apple’s came out 10 years ago), a technology like Hypertext, also made us rethink how we can use the Internet and recreated the world. Well, it’s 1989 and there is a technology that is poised to do this again.

I’m passionate about the future of health, and I can’t ignore what’s going on with cryptography, artificial intelligence, Internet of Things, and Virtual/augmented reality. But if I had to pick one thing right now, which is ripe for government leadership to leapfrog even silicon valley, it’s this: Focus on blockchain.

It’s a specific technology that’s matured unlike most of these other trends. Its got a hacker community innovating like how I can only imagine when the web started. Its got significant investor interest. It has consumer awareness. It has all the things ready for this to blow up.

This is how you do that:

  1. Make cryptocurrency the same status as any currency. For example, in the US  Bitcoin’s are considered a capital asset which makes it impractical to use unlike regular currency which is treated on the income account. We need to remove this impediment as it makes it not practical.
  2. Offer incentives to businesses working on blockchain. Create a tax free corridor: anyone that that operations in an area is exempt for any taxation. This isn’t to just get the world’s best employing people locally and building technology which will together create an economy of agglomeration, but it will have a flow on affect on other cryptographic matters, such as cyber security which has now become the scariest frontier of warfare right now. Silicon Valley prospered because of technologies building off technologies. 
  3. Force the adoption of cryptocurrency. Require banks to offer it as a service and make all EFT terminals compliant. The moment the economy offers blockchain integrated into the economy — first with currency — we will see an acceleration of blockchain’s potential on the things that are truly exciting (such as Smart Contracts and Distributed Autonomous Organisations)

Implement these three simple policy concepts and it will make that economy the ground zero for blockchain innovation.

As I have already alluded, I don’t think Bitcoin is long term the goal of doing this: it’s the infrastructure that Bitcoin provides that is the exciting thing (ie, the block chain technology which is one of the four technologies that make Bitcoin outside of peer-to-peer, PGP and proof-of-work). The use cases go far and wide: not just for currency, but for things we take for granted like how websites are resolved (like DNS), contracts likes wills, voting, and anything else involving trust (such as simple but critical title deeds).  Blockchain is basically a decentralised database which is in line with the original design goal of the Internet. Efforts like Ethereum are effectively building a computer on top of the Blockchain concept. It’s a whole new paradigm in computing that goes far beyond currency.

But leave that to the entrepreneurs, who are already working on that — I could write many more posts on those ideas alone. But with leadership, anyone one of the three suggestions I’ve made could be legislated into law this year and overnight make that territory a global leader. 

This is what any  country could do to create the world’s best environment to foster this disruptive technology, which I am convinced will create a transformation like what the web did less than 30 years ago. 

 

Bitcoin: the world’s receipt

Bitcoin has conflicted me. I see brilliance and world-changing potential. But its pricing instability leads me to believe it will never stabilise until it has some sort of secondary value to prevent confidence crisis and create predictability on the value as a currency. But maybe that’s the wrong question to be pondering?

In January 2014 (when I actually wrote this post but didn’t publish it) I realised that two of the innovations created by BitCoin is the blockchain and the proof of work, are useful beyond currency. For the uninitiated, every single transaction that used BitCoin is documented in a public ledger that everyone in the world can see. The proof of chain is a process that motivates ‘miners’ to validate the transaction in the blockchain. Together, you have a decentralised trust system that no central entity every needs to mediate in.

But the realisation I had was that Bitcoin is not a currency: it’s an asset. And that asset, is that it is the world’s first global decentralised system that can validate transactions.

Now imagine I sent a bitcoin transaction between two accounts that I owned, say that were valued as 25, 122,013 satoshi’s (about 1/4 the value of a Bitcoin) — numbers that can also be interpreted as Christmas day 2013.

Now go back to my assertion: Bitcoin is the world’s first global decentralised system that can validate transactions. And how many transactions occur, including non-financial records of receipt such as dates or domain name looks ups which are actually IP addresses.

Bitcoin might not be the world currency because it’s protocol isn’t fast enough for real time money spending (it takes 10 minutes to validate a transaction) and its unstable as a store of value. But when you think about it a global receipt book, I hope you now get how this is game changing.

If the entire computing revolution is based on binary code — 1’s and 0’s — so long as something can be boiled down into a number and there is value in validating it, then Bitcoin will have place in the world.

Ripples

I get a lot of  random email, and sometimes, it’s the stuff that makes me sit upright. Question things. But of the kind I’m talking about, usually I just smile. Here’s one from today.

I got back to Australia at the end of January. I was pleasantly surprised to find that the start-up community in Adelaide had a bunch of activity going on. One of my friends had heard about the silicon beach meetups in Sydney so got some sponsorship from Microsoft and started a regular meetup.

This lead to Adelaide having its first start-up weekend, which resulted in a burst of activity and resulted in Adelaide’s first tech co-working space being born. They got more interested than anticipated and quickly needed a bigger space, so the guys knocked on a ton of doors and moved into a huge rundown space in the middle of the city.

After talking to a few people who stayed at start-up house they are now looking at opening up a similar type of hacker accommodation in one of the empty floors above the co-working space.

Just thought you might like to know some of the ripple effects hitting the Adelaide eco-system from your awesome work in the valley. Looking forward to staying at the new start-up house when I move back mid year.

The fact so many people around the world have already copied or flagged that they are doing something similar as StartupBus and StartupHouse (not to mention Silicon Beach, though in the way it’s described above that was by design) is flattering. But that’s not the first reaction I had in each case until I realised a very important fact in life.

I’ve seen everything from outright copying of the brand and concept that’s gotten legal, to working intensely with the “copycats” and seeing first hand what they built — and even seeing friends try to replicate their own versions of the concept. Naturally, it can  be disappointing to see your work being copied without being able to expand on your own business where you benefit, or more to the frustration, the sense of losing control on value you created.  But that’s the nature of the market and competition, and actually, I’m more thrilled than disappointed because I’ve come to learn first hand with each of the above that there  really is secret sauce in your own work. You cannot copy the creativity that led to the original concepts themselves which become more valuable for their future evolution. When you copy an idea, you are simply redrawing a photograph of a moving crowd that has since moved on.

So when you can get over that point to realise it’s not a threat, you realise something cooler. You’re creating a ripple effect. But the thing about ripples is that they can be more than that: add some wind and it leads to a wave. That wave might capsize the boats or at the very least ruffle them — but let’s also remember, it’s that movement from a wave that leads to change in our society. And that, is way cooler than anything you will ever do in your life that’s being copied.

Why I like angel list

Feedback is now coming out about Angel list, a new service from the blog Venturehacks. It’s a simple concept: get a group of angel investors and promise you will send quality deal flow to them that’s been vetted; likewise say to entrepreneurs that all they need to do is fill out a form and they will get access to some of the smartest investors in Silicon Valley. It’s so simple that is hurts, and yet only people like Naval Ravikant and Babak “Nivi” Nivi would be able to pull it off as it takes serious credibility to get both groups involved. Venturehacks in my opinion is the number two blog on venture and investment in technology, after Fred Wilson’s blog.

Angel list is a special thing that I believe will transform Silicon Valley. Much like how Michael Arrington exploited the market dynamic to make TechCrunch the success it was, Ravikant and Nivi is doing the same thing by connecting entrepreneurs with investors. And not just any investors: the early stage investors that startups really need. Simply put, it’s reducing the costs of innovation in Silicon Valley – the ‘thing’ that has changed the world.

I really hope the industry rallies around this and collaboration opportunities with other high profile angels continue. Jason Calacanis for example is doing something equally impressive with the Open Angel forum, and I sense they both have equal motivations due to their annoyance at how other investor groups have abused their position in the industry. Even though I see them adding different value to the startup scene (they’re similar but different – and should stay different for maximum value creation), all I can say is “awesome – I want more”.

Do entrepreneurs have an expiry date?

Startup’s that are built-to-flip (ie, sold early on) may be the best and dominant way to sustain innovation. How so? Because through observation of the brilliant people I’ve met in technology startup world, I’ve come to realise an important lesson: entrepreneur’s have an expiry date.

I just don’t care any more
I started writing this post sitting in my parents living room last week in Sydney, where I visited for the Christmas break to spend time with family. Chatting away with my parents, my father said something very startling but also very relevant. He was talking about his 73 years of life and the 47 years he’s had as a lawyer. Once a fiery dragon in the courts and of life, he’s now an aged playboy winding himself down. He said he’s thinking of giving it up and going into retirement, as he has been working these last few years purely for the passion. Why quit now, I asked: “I just don’t care anymore”.

I’ve got countless anecdotal examples (but none I can share specifically here, sorry). People I thought that were pushing to create global businesses, are now giving way to other priorities and looking to sell their very valuable company. People who have been involved with a startup for over four years, that’s only now exploding in growth, but feeling fatigued and ready to move on.

It’s not just entrepreneurs
A good friend of mine who has worked for five years at a big bank, is now looking for a change in employer. Several other friends, who have been in long-term romantic relationships for around 3-5 years, are now feeling the pressure of making a decision: get married or stop wasting her time. And sometimes it’s not them making the decision – but it’s what she’s probably thinking.

Passion, fire and ambition is needed to start something – whether it be a new job at a big brand company, a new company that disrupts the industry, or a partner that reinvigorates your life. But like life itself, there is a predictable pattern that follows. What gets born will also mature – and will die, one day. It’s just how life is; what goes up, will go down as well.

Build to flip: it’s a good thing
Bringing this back to the point of this post, I want to highlight that the obsession to build a sustainable business is actually not a normal thing. And I said obsession, because a few years ago I made a naive plea that that was the only way. Now that I’ve seen more, I’ve realised it’s a way but not the common way.

People that create businesses are creative. The same reason that makes them creative, is also the same reason that has them get bored when a process gets repeatable. The types of personality that start a company and battle during its pre-revenue days, are vastly different from the ones that help grow and manage a profitable business.

So the next time people criticise a company that doesn’t stay the course towards an IPO, and let’s itself get bought out – just remember, that sometimes, it’s because the people behind them just don’t care anymore. And that’s perfectly alright. Don’t fight it – it’s how it is.

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.

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.)

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!