Tag Archive for 'Innovation'

Do entrepreneurs have an expiry date?

Published
by
Elias Bizannes
on January 7, 2010
in Innovation
. 0 Comments

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.

The information age is still filling up its rocket with fuel

Published
by
Elias Bizannes
on July 20, 2009
in Innovation
. 0 Comments

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

Published
by
Elias Bizannes
on May 29, 2009
in Innovation, Internet and Trends
. 0 Comments

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.

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