A Creepy Thought

Recently I looked into taking a mid-winter trip to Iceland to be present there for the Winter Solstice. And it turns out that the only airline that flies to this small country of 320,000 people is Iceland Air.  It turns out that this year we won’t go but perhaps sometime soon.

Now if you looked at the title of this essay you may be asking – “just want is so creepy about Iceland” and the answer is nothing.

But for weeks now I have been getting ads inside pages that show up with ads for Icelandic Air.  And that is where the creepy parts starts.  A brief whimsy about a trip and now I am constantly reminded that I have not yet booked my trip to Iceland.  How did this happen?  It happened because I wrote to a friend using gmail about this idea for the trip and even shared some Iceland Air flight times and dates.  That was enough, Google had me.  And the ads started to show up each time I did a web search.

Now lately I have been using Google Hangouts  quite a bit for voice and video calls and SWG team conferences.  And what we discuss is private or at least we would like to think so.   Right?

But if you have heard about Siri which is Apple’s voice recognition and command system – which I have to say is very good for my uses – the buzz from others is that Google’s is much better and handle’s a wider range of voices and languages.

Whoa!

So how soon will Google be using the voice traffic flowing through the system to do targeted ads and reference selling based on voice input?  And how much more communication do we do daily using our voices than we do with email?  And how much more private do we think our voice conversations are than email?

Suppose there was a phone app that used little power but listened to you ALL THE TIME using your mobile phone’s microphone and capabilities.  Would we start getting ads for deeply personal stuff?

I see you may be running out of condoms Tom, so I have taken the liberty of ordering some for you from Amazon …

And what if a few years behind this comes development of visual input and understanding again for helping target our needs?

You see gMail is free just because Google reads it and uses the information in a “non-personally-intrusive” ways to target ads for their users.  But voice and visual cues are even more powerful, I suspect.  So could it be that Google is offering free voice and video chatting, meetings and phone service so that they can expand their knowledge of how to be a more effective advertising platform?

Hmmm.  More than 90% of Google’s revenue comes from ads.  Right?

There is no other motive for offering free services than to gain advantage to your main business purpose and to increase that revenue.

Welcome to the future.  Are you a deep user of Google Hangouts?  Do you like them more than Skype?

How far behind do you think Microsoft is in this game?  (They do own Skype …)

Posted in Essays, Personal Stories, Spiritual Threads, StartUp Ideas

Thoughts on Water and Startups

This past week I gave a talk on  water to a group attending TechVenture 2013 in Singapore.

This is a conference centered on startups in Singapore and SE Asia.  Perhaps about 1000 people were in general attendance, but my talk drew about 50 people.

Here is the presentation I gave.

Generally, the problem with innovation in the area of water technology is that the basic inventions can be made and that is where papers get published, ideas can create buzz.  But water is so basic, so important and so prone to being difficult over time and under different circumstances that  companies mistake innovation for the nitty-gritty nuts and bolts of making a solid long lived product.

Finisar makes fiber optic transceivers and these sell today for well below $20 even at 10 Gb/s.  But what makes these parts so remarkable is that when the end customer gets them they are plugged in, and run 7/24 for up to 20+ years and it is quite likely that every single bit they transmit is received error free for the life time of the product.  They are inexpensive, reliable, accurate and all beyond any normal standards we see in ordinary life.

And it has to be the same for water.  1B, yes one billion, people are without clean drinking water on a daily basis.  And no shiny idea from a small company installed in a village will likely stand the test of time working under mishandling, bad weather, changes in water input quality, etc. that is required to deliver trusted water for drinking to the village year after year.

If you think you know how to do this at the same level Finisar delivers transceivers, then give us a shout here at Small World Group.

Yeah.

 

Posted in Essays, Green Perspectives, Singapore Incubator, StartUp Ideas

Welcome to the NEW Small World Group Website

OK, now you see us differently we hope.

We are the same people generally we were for the last 5 years but we have more experience.

Over the last 5 years we have helped start more than 15 companies.  They are all generally in the areas of clean tech, optical systems and novel materials.  Nearly all of these companies have been able to complete their MVP or minimum viable product and they have sold the product to a few early customers.  Some have gone on to make 2nd or 3rd generation products that are better and where improvements are based on customer feedback.  Some have engaged in licensing deals or raised more money from new investors.

What is key?  What is different?

We feel that our model of strong engagement with our companies, where we help them with technical, financial, sales, market decisions and not just listen and give advice at periodic board meetings is working.

We have closed some companies but in nearly every case the companies reached the MVP and revenue milestones but the revenue did not scale or grow as their plans thought it should.  In these cases we could not justify additional funding to chase what was a failed plan.

This is what venture capital is about … testing technically based, scalable ideas.  And accepting the decision of the market and customers.

We hope you will find this new site more open, empowering for you to share your ideas for businesses with us.

Maybe we can make magic together.

Posted in Essays, Investing, Singapore Incubator, StartUp Ideas

Best Practices Even MBAs Might Overlook When Founding a Startup

In this essay, business education writer Juliana Davies explores many of the common mistakes entrepreneurs make when getting their startups off the ground–and how these pitfalls can be avoided. Small World Group has written about various aspects of a successful business model before, and Davies’ insights contribute to this conversation. More of her work can be found on http://www.mbaonline.com, a website dedicated to business scholars, prospective students, and recent graduates.

Small World Group’s Blog welcomes other authors to contribute to our discussion.

 

The current economic climate has spelled doom and gloom for nearly all industry sectors, with one notable exception—small businesses and start-up ventures. Barriers to entry are lower today than they have been in decades, which is likely part of it. The flexibility entrepreneurs have to nimbly work around problems, roll with the market’s punches, and innovate new strategies is also key. Many economic scholars have recommended that, if the country is serious about economic recovery, more federal dollars should be allocated to small business training and stimulation. Financial incentives and tax breaks can go a long way when it comes to helping a business get off the ground. In order for a venture to remain successful, though, its leaders must be strategic—they must avoid common pitfalls and be efficient and adaptable enough to pull through rough times.

One of the first mistakes many entrepreneurs make is failing to follow a coherent plan. Having an idea or basic concept is usually enough to get a company off the ground—but going further usually requires concrete direction. This most often comes in the form of a written business plan, but any hard and fast goals or vision statements can serve a similar purpose.

At the same time, though, entrepreneurs cannot be so married to their initial vision that they end up unable to adjust to a changing market or clientele shifts. “Just as lack of planning can be a problem, adhering blindly to your plan is a surefire way to steer your company off a cliff,” British business magnate Richard Branson said in an Entrepreneur magazine article exploring common startup mistakes.  “A successful entrepreneur will constantly adjust course without losing sight of the final destination.”

Fixating on competition is another early misstep. “Much better than fighting for scraps in existing markets is to create and own new ones. Sometimes you have to fight. When you do, you should win. But conflict tends to be romanticized, and people tend to get sucked in,” Forbes said in a 2012 article outlining tips for new start-ups. “It is worthwhile to think about how to run away from the fighting and build a monopoly business instead,” the article said.

Setting the right foundations is essential for success. Once off the ground, though, entrepreneurs often struggle with keeping processes efficient, and staying the course without distraction. Following best practices for start-up efficiency are often just as important as avoiding early mistakes. Expert recommendations typically include the following:

  • Appropriate leveraging of technology. Many young entrepreneurs treat e-mail, tweets, and instant messages as something of a given, but creating a plan or policy for how messages will be answered and when can save a lot of stress later on down the line.

  • Participate in social networks and online communities. This is obvious for most web-based businesses, but is something that other companies can have a tendency to undervalue. Web interactions drive traffic both on or offline, and many consumers expect at least an informative website.

  • Commit to an in-person networking plan. Just as eschewing the online space can spell trouble, so can relying on it exclusively. Many small businesses grow through word of mouth and personal connections. Reaching out to industry leaders, attending conferences, or speaking on panels can all come within this category if pursued for purposes of making new connections and forging professional relationships.

Many scholars believe that a resurgence of small business strength is a country’s best path towards any economic turnaround. Over the last few years, start-ups have created more jobs than big industry in nearly every sector. Investing in entrepreneurships will doubtless help spur innovation, but cannot alone fix the situation—long-term stabilization is in the hands of owners and executive officers who must manage what they have and turn it into something with long-term sustainability. 

 

—  Juliana Davies

Posted in Essays, Investing, StartUp Ideas

Singapore Update

A new Blog was launched this week by an early partner in Small World Group’s efforts in Singapore.  It’s author is Chris Vargas and he has moved his entire family to Helsinki, Finland to engage with the start up scene there for a year.  You can read his first post here.

In the post, he argues that Silicon Valley is less a “place” and more a state of mind.  I resonate with that.  See what  you think.  Welcome Chris!

After reading Chris’ first post, I was motivated to generate one of my own.  So today’s post is a summary of where we have come in the 3 years since I returned to Singapore and began working to start an Incubator here.

First a simple summary –

  • we have started 12 companies in Singapore plus 1 in the USA
  • we closed 2 of the companies (or are in the process of closing, more on that in a bit)
  • we raised more money for 3 of the companies in follow on fundings; all were increased valuations
  • 8 of the companies have strong clean tech focus
  • 1 company has a unique sports gadget
  • 3 companies have internet/web roots
  • 1 company brings a unique value proposition to emerging markets for computing and connectivity

Of the remaining 11 companies, 2 are currently seeking funding and have reasonable prospects.

One of the surprising results has been how long some of the companies have been able to stretch the money we invested.  Each of the companies knows that they must finish their initial product, sell it to some early customers and have those initial sales transact at reasonable gross margins for their industries.  We see that now happening for most of the remaining companies.

Our key investment thesis was that we wanted our “saplings” to be frugal with the money, learn how to be a full company with sales and customers and not think like a development group.  We funded our first company 24 months ago in October 2010 and now we see this transformation happening in each of the groups.  Hurray!

In Singapore, so many plans we saw initial had voluminous discussions about “markets” and how the new company would meet market needs.  We have worked consistently to tell them not to focus on markets … little companies have to focus on customers.  And now this is working.  HP and Apple can address markets, little startups must focus on initial customers.

We also have worked to create a “culture” in the Incubator.  Our culture is customer centric technology and business development.  My partner in Finisar, Jerry Rawls, was fond of saying that culture eats strategy for breakfast (lunch) (Peter Drucker is the root origin for this, I think).  And by this he meant, that Finisar’s culture – again one of fanatical customer satisfaction – would always trump us being clever, smarter, first to market.  And it is this same approach which we now work daily to maintain at the incubator.

And it is working!

This week on Wednesday, Sept 26, we will hold our 3rd open house where each of our companies present and tell their evolving stories to potential investors.  Most don’t need money so this session is about investors getting to know them BEFORE they engage.  They can hear plans, talk about customers and sales and then watch the companies for another 4-8 months before any money transacts.  It is a different model that has its origin in our culture.  We sell results not futures, teams and their accomplishments, not so much patents and promise.

 

Posted in Essays, Green Perspectives, Investing, Singapore Incubator, StartUp Ideas

10 Year Perspectives … And A Future Prediction

When Finisar went public in November 1999 our IPO was one of the hottest of all time.  We opened at $19/share but traded upwards above $100/share very quickly in the first few days.  It was a heady ride up for a while and a frightening ride down when the bubble burst in 2001.

During the .com bubble people spoke of the 4 horsemen of the Internet.  Here is the list as I recall it –

  • Cisco – the routing and networking leader who stock had doubled nearly every year for the previous 10 years and who had beat the street estimate for their quarterly earnings by $0.01 for 40 straight quarters
  • Sun MicroSystrems – the server and unix leader whose engines served up the web pages we were so eager to consume
  • EMC – the storage champion whose Symmetrix(TM) storage units held the evolving content
  • Yahoo  – the leading portal and search engine of that time
Each of these were undisputed leaders of that time and in people’s thinking there were so strong that being replaced did not seem possible.
If you ask that same question today – Who are the high tech/web leaders, the surprise is that all of these have been replaced.  In some cases because they have failed to live up to their legacy and in some cases because their importance has simply diminished or their products have become commoditized.
Here is today’s list –
  • Apple – the leader in mobile platforms, content distribution and the “gold standard” for computing
  • Google – the leader in search, web ad based revenue, and so much more including their own mobile platforms
  • Amazon – the leader in eCommerce and in cloud services via AWS
  • Facebook – the leader in social networking
Each of these companies is larger than the previous 4 in so many dimensions.  Facebook has nearly 1 billion users!  Google has deep knowledge of so much of the web and its total user base.  Amazon delivers nearly every product from diapers to eBooks to lawn equipment.  Their product base is larger and the number of customers may make them the largest retailer in the world by some metrics.  And then there is Apple, the largest market cap company in the world AND it was proclaimed dead and not attractive as even a dirt cheap acquisition just a bit before 2000.  Such changes.
Let me add one more data point.  What did this list look like in 1988-1990?  Then the list was –
  • DEC (Digital Equipment Corp) for the compute/server leader
  • AOL/CompuServe for the portal
  • Seagate or IBM for storage
  • ATT/Lucent for networking gear
Here is a table that summarizes this.
Best Tech Companies Over Time - Click to Enlarge

Best Tech Companies Over Time – Click to Enlarge

There are several things that are remarkable about this table.
First all of these companies are from the USA.  I have been asked whether I  expect any Chinese companies to be on the list for 2024.  The straightforward answer is I am not sure.  The demographics and “Asian Century” tsunamis would seem to make the answer yes.  But the corruption and Asian ways work against it because creative destruction is not practiced there.  It is just that creative destruction that we permit our very best companies to not exist in 10 years in the USA that makes the new comers to this list possible.  Even ones that go from failure to largest market cap company in the world in that time frame!  For example, in Singapore, Singtel is still the largest networking company and it was so in 2000 and in 1988 as well and the largest engineering company in Singapore is Singapore Technologies.  Creative destruction is not practiced very well in Asian cultures.  Evolution is more common.
Next, every 12 years or so the list entirely changes.  But the words “creative destruction” are not broad enough to describe what really happens.  Entire fields are redefined.  Storage at the hard disk level was important in 1988 and so Seagate was dominate, storage as a platform was important in 2000 so EMC led, but by 2012 cloud computing and virtualization has rendered storage a commodity and something that you pick up and drop as needed as a part of the cloud so Amazon dominates.  Base technology and the system architecture both change and that is best done in a very free and open platform like the USA provides.
Finally we come to the question that should have an obvious answer by now.
Who is on the list in 2024?
Simple.  None of those on the list today!!!
I can already see some of you rubbing your eyes in disbelief.
But you must think it so … the real question is who should we be betting on today that is small or down and out but who sees the future more clearly than these giants today?

Posted in Essays, Investing, Singapore Incubator, StartUp Ideas

A Small Prediction

I am reading the Steve Jobs biography.

In it, when he returns to Apple and takes over for Gil Amelio, he wants to kill the Newton basically because it is inelegant.  The author quotes – He disdained the idea of having a stylus or pen for writing on the screen.  “God gave us ten styluses”, he would say, waving around his fingers.  “Let’s not invent another.”

He reused this same argument at the introduction of the original iPhone … see it here … “Nobody wants a stylus” … he proclaimed some 10 years later … same sentiment.

So what will be one feature of the upcoming Apple TV that is a full screen real device (not the small box)?

Clearly I can hear the question – “Nobody wants a remote … all they do is get lost, broken, discharged” … “lets use our God given remote … our voice”

The metaphor is just as accurate.  Our voice is our version of remote communications and it is infinitely more exact and able to communicate than a pad full of buttons.

Clearly it will be one key feature.

Posted in Essays, Spiritual Threads, StartUp Ideas

More Less Abundance

OK, every once in a while you get a TIRADE from this website.  But hopefully it is one that teaches you not to believe everything you read on the web or in books.

Today, we take to task the book “Abundance” which was discussed in the previous column.

Here are the claims –

“… imaging toilets that require no infrastructure.  No pipes under the floor, no leach field under the lawn, no sewage system … these high tech toilets powder and burn the feces and flash evaporate the urine … Rather than wasting anything, these toilets give back: packets of urea (for fertilizer), table salt, volumes of fresh water, and enough power that you can charge your cell phone while taking a c**p …

Toilets account for 31% of all water use in America …”

And here are the facts from a US Geological Services report –

USA Water Use - Click to Enlarge

USA Water Use – Click to Enlarge

Different, right?

The fact is that the major uses of water are for power generation cooling and irrigation.  These comprise 80%.  So it is unlikely that “toilets account for “31% of all water use in America”.  Moreover, domestic water use accounts for 1% of the water use and it is quite likely that toilets account for 31% of that use so in actuality toilets account for 0.31% of all water use in America.  Wow!  A 100x mistake!

Moreover if you were really going to make a difference, where would you put your efforts in have more fresh water in circulation?  Clearly into better forms of irrigation and thermoelectric power generation.

And there are efforts well underway for both.  Israel has been developing drip irrigation and its improvements for many years.  Power plants with out using fresh water for cooling is now part of most generating plant proposals in California; there policy change is diving technology innovation.

It has a biblical ring to it … but by knowing the truth, you can set your self free to work on solutions for the real problems in the world.

Got a fact that seems wrong?  Send us your questions and we will fact check!

Posted in Essays, Green Perspectives, Investing, Singapore Incubator, StartUp Ideas

Year End Prognostications – Apple

It has become fan-boy heaven to predict and have “insider” information to know better where Apple is going.  The easy part is to predict newer processors A4 – A5 – (what do you think comes next) or since we know Intel’s roadmap for the next 2+ years that also helps.

But what about the real innovation you will see in the product line.  Well I am going to lay down some suggestions and you can come back to me in 1-2 years and see how it went –

  • first the laptops will become more like MacBook Airs as they drop the CD/DVD drives forever.  And there will certainly be some sort of MacBook Air/iPad hybrid that runs OSX in one config and iOS in another config but uses a single file system.
  • In the hardware front, what would make these systems so much nicer is to always have some large SSD or solid state disk drive.  But why only that, why not a mix of Flash and rotating storage.  One that is blazing fast and one that is both huge and lasts for very long time.  And make the file system so that the users don’t see it as 2 drives.
  • For that matter, why not make all 3 drives in such systems or the 2 drives that most systems have today?  2 drives you say?  yes, the cloud is drive #2 and it will grow … yes it is slow but so what, it is only used for small content storage from computer to cloud.  Users just don’t create that much content.
  • Next, it would be so nice for there to be an iPad that was really structured for older people.  Simple, never any issue about peripherals, back ups, syncing, updating and other things.  Optionless computing for those of the pre-computer generation and others who really only want web browsing and such.  Problem now is iPad is still a techy toy.
  • iPad may be marginalized compared to the other 2 platforms.  iPhone is clearly for talk +++, but not for content creation.  Mac is for content creation and when needed lugging around.  iPad is for ??? or reading.
  • iPhone moves to become your wallet and not a moment too soon.  The wallet is the last thing that I still have in my pocket (except for chapstick).  But in doing this I think it has to include more than NFC and what this will be is biometric level security.  What we lack today is a device that consistently authenticates that I am me … period.  Imagine if the iPhone had finger print recognition and maybe even layered on top of that is retina scanning by the internal camera.  Unless coercion was involved this would be a very much safer version of the wallet.  Passports next anyone?  iPhone could even unlock your computer, car, house, etc.

As an aside, the book “Daemon” is a must read for people who think computer security is just about virus, spam and phishing.  It is so much more and there are unreported attacks now that are deeply disturbing but are being kept from the news carefully by corporations who have been deeply hacked.

  • The other threads out there are about Apple moving into other forms of consumer electronics – TVs, gaming?, etc.  But in a sense they are already there.  Gaming?  I bet it is the major use for iPads today in terms of use time.  TV?  Sure if you want to pay too much for something that is already pretty well done.
  • Finally, iCloud will be so deeply embedded into the Apple community in 2-3 years but so transparent that you will wonder what you did before.  Like today how 3.5″ floppy drives feel compared to Flash thumb drives.

Glad there is not a time machine so that my mistakes cannot be written about tomorrow.  Ha!

So there are my predictions.

Posted in Essays, Singapore Incubator, StartUp Ideas

World Wide Acceleration

When the world wide web (www.abc.xyz) was birthed in the early 1990s, over the next few years it was clear just how pervasive its influence could be.

I went to the keynote talk at the Optical Fiber Conference (OFC) in 1995 where Bran Ferren talked and gave an early perspective on the emerging internet.  Here is a talk by Bran.  In the talk in 1995 he asked a very interesting question: “This Internet thing, its really important right?  But is it as important as the fax machine or as fire”.   The invention of the fax machine nearly killed FedEx because the need for delivery of overnight letters died over night.  So it was very important.  But compared to “[man’s control of] fire” which was clearly one of the big inventions of all time!

When Bran asked that audience most of the engineers there voted for fire but a few of us said fire.

Bran said its FIRE – and his reasoning was crystal clear.  The internet would fundamentally change the way humans tell each other our stories and the ability to tell stories was one of the fundamental defining elements of being human.  Wow.  Clear.

Well there is emerging another really dynamic means of changing the world and it is the global use of venture capital, risk capital, private equity (all names for the same basic idea) to transform countries, societies, cultures.

As readers of this Blog know, I live in Singapore and lead an incubator here working to improve the standing of start up companies, entrepreneurs and such here.  Small World Group Incubator, PTE LTD, does this in partnership with the Singapore National Research Foundation and so far we have started approximately 10 companies over the last year.  All are still thriving, thank goodness; all have pretty much open futures for success still.

Over the last year we have talked directly to small groups in the Czech Republic, Thailand, Indonesia, India and we have relationships through YouNoodle and other groups that work around the world, mainly in what in the past were thought of as “third world countries” but today literally there are perhaps 50 countries that have strong, unique entrepreneurial government sponsored pushes to transform their economies and create businesses that will engage the country and their citizens with the wider world.

Here are some examples – CzechInvest, StartUp Chile, StartUp Korea, NASSCOM, CBS (no not the network)

You get the idea.

So what is happening is that governments are spending what appears to be large sums of money (at least to individual people and startups) but in actuality they are spending small amounts compared to their overall federal budget and with this money they are trying to transform their economies.

And they are getting Venture Capitalists involved.  All of this is causing a dramatic acceleration of ideas, new companies, new business and such all around the world.

So here is the simple message of this column … if Singapore, Chile, Czech Republic can start such programs, what does that mean to similarly sized groups of economically linked people who don’t have such programs or a willingness to engage this way?

Watch out!

Posted in Essays, Investing, Singapore Incubator, StartUp Ideas