Tag Archive for 'startupcampoz'

Information age companies losing out due to industrial age thinking

Last weekend, I participated at the Sydney Startup camp Sydney II, which had been a straight 24 hour hackathon to build and launch a product (in my case Activity Horizon). Ross Dawson has written a good post about the camp you are interested in that.

activity horizon
It’s been a great experience (still going – send us your feedback!) and I’ve learned a lot. But something really strikes me which I think should be shared. It’s how little has changed since the last start-up camp and how stupid companies are – but first, some background.

The above mentioned product we launched, is a service that allows people to discover events and activities that they would be interested in. We have a lot of thoughts on how to grow this – and I know for a fact, finding new things to do in a complex city environment as time-poor adults, is a genuine issue people complain often about. As Mick Liubinskas said “Matching events with motivation is one of the Holy Grails of online businesses” and we’re building tools to allow people to filter events with minimal effort.

ActivityHorizon Team

So as “entrepreneurs” looking to create value under an artificial petri dish, we recognised that existing events services didn’t do enough to filter events with user experience in mind. By pulling data from other websites, we have created a derivative product that creates value without necessarily hurting anyone. Our value proposition comes from the user experience in simplicity (more in the works once the core technology is set-up) and we are more than happy to access data from other providers in the information value chain on the terms they want.

The problem is that they have no terms! The concept of an API is one of the core aspects of the mashup world we live in, firmly entrenched within the web’s culture and ecosystem. It’s something that I believe is a dramatic way forward for the evolution of the news media and it’s a complementary trend that is building the vision of the semantic web. However nearly all the data we have hasn’t been done through an API which can regulate the way we use the data; instead, we’ve had to scrape it.

Scraping is a method of telling a computer how data is structured on a web page, which you then ‘scape’ data from that template presentation on a website. A bit like highlighting words in a word document with a certain characteristic and pulling all the words you highlighted into your own database. Scraping has a negative connotation as people are perceived to be stealing content and re-using it as their own. The truth of the matter is, additional value gets generated when people ‘steal’ information products: data is an object, and by connecting it with other objects – those relationships – are what create information. The potential to created unique relationships with different data sets, means no two derivative information products are the same.

So why are companies stupid
Let’s take for example a site that sells tickets and lists information about them. If you are not versed in the economics of data portability (which we are trying to do with the DataPortability Project), you’d think that if Activity Horizon is scraping ‘their’ data, that’s a bad thing as we are stealing their value.

WRONG!

Their revenue model is based on people buying tickets through their site. So by us reusing their data and creating new information products, we are actually creating more traffic, more demand, more potential sales. By opening up their data silo, they’ve actually opened up more revenue for themselves. And by opening up their data silo, they not only control the derivatives better but they can reduce the overall cost of business for everyone.

Let’s use another example: a site that aggregates tickets and doesn’t actually sell them (ie, their revenue model isn’t through transactions but attention). Activity Horizon could appear to be a competitor right? Not really – because we are pulling information from them (like they are pulling information from the ticket providers). We’ve extracted and created a derivative product, that brings a potential audience to their own website. It’s repurposing information in another way, to a different audience.

The business case for open data is something I could spend hours talking about. But it all boils down to this: data are not like physical objects. Scarcity does not determine the value of data like it does with physical goods. Value out of data and information comes through reuse. The easier you make it for others to resuse your data, the more success you will have.

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!