As part of some brainstorming I was doing with a friend raising a new fund, the concept of future trend themes came up. It’s not new, Brad Feld has a whole blog post about this. However, it got me thinking about the way I look at the future and what themes I see.
So, without further ado, here are my themes:
1. Open is the New Black
There are several historical, societal, technological and political memes that have converged recently to really push the idea of open. Open as in transparent, responsive and truthful. These ideas have a long history dating back to the Renaissance, the American and French revolutions, through to modern mass communication, literacy and egalitarianism to open systems, personal PCs, the Internet and open source, to finally end up with revolutions in Tunisia and Egypt – and the demand of consumers for more transparency in environmental impacts. Through this is a critical thread:
Open wins in the end
Business, governments and organizations that don’t embrace the ideas of transparency, openness and truth will, in the end, loose. Those that do will emerge winners. I would note that this is a long term trend. It’s taken Western societies 400+ years to get to this point and most companies/organizations are not even close to this yet.
2. The Future is Distributed
Right now, we are seeing a great concentration of information, computing power and control in a very small number of companies that are building ever larger data farms. We’ve been here before, several times. The most obvious parallel is the mainframe computer (and the estimates that only a few would meet all future computing requirements) and broadcast television. Both have been disrupted by the introduction of systems that pushed capabilities into the hands of endusers, the PC and YouTube. The whole ‘cloud’ trend that permeates current tech circles is not really ‘cloud’ at all since most of the underlying systems are concentrated in datacenters. The key trends I see disrupting this are ubiquitous bandwidth, portable renewable power, high-performance mobile computing. In then end, the traditional datacenter will probably fade away and:
Distributed computing will be the new cloud
Companies that are focused on delivering ‘cloud’ anything without actually detaching themselves from the datacenter will experience problems in the next 5-10 years. The winners will be those that discover and exploit technologies which enable this distribution.
3. Art as innovation
Steve Blank recently said that entrepreneurs are artists, something which I largely agree with but would take one step further. If innovation is about challenging and disrupting existing technology and business paradigms, then the equivalent in the social, cultural and political sphere is artists. In fact, Renaissance rulers understood this very well and were huge patrons of artists, even ones challenging their historical legacy. There is an important lesson here, one which is largely lost in the sterile tech world (and even more so in large businesses). Innovation does not usually come from people with a string of degrees in white coats, it usually comes from the rebels, the people who refuse to follow the status quo, the artists – or, as my wife referrers to them: “the people with the blue hair”. A fundamental precept here is that:
Innovation comes from those that are swimming against the status quo
There are probably quite a lot of missed opportunities, both at the venture and enterprise level, because people propose things that don’t fit into the generally accepted worldview. Seeking out those radical thoughts is more likely to yield results, particularly when society’s speed is accelerating. Surprisingly, Silicon Valley is particularly bad at cultivating truly radical thinking, quite a few people believe that all the diversity they need can be found in their “Stanford network”. However, Harvard discovered this was a fallacy when they published their top 50 CEO list and only 14 had MBAs…
4. Market of One
This is something I’ve believed in for quite some time. It’s the idea that we are moving to a world where mass customization is not just possible, it’s also the default. This already happens when you order certain items online (iPhone, custom Nikes, etc), but I think it’s an accelerating trend. Not only that, but the technology that makes this possible is getting ever cheaper, leading to a multiplicity of producers. The side effect of this is a vastly more distributed manufacturing base and a lot more emphasis niches. It’s the long tail played out in physical goods. This trend is already in full swing and has really come to the fore in the 6 years since I first started talking about it. Websites like Etsy and ShapeWays, not to mention the whole MakerBot phenomen are expressions of this. But it’s also impacting much larger systems – I know one guy who machines F15 parts in his garage, something he can do as sophisticated machinery is now the price of a car instead of the price of two houses. In some ways it harkens back to my second theme – The Future is Distributed -but it has one major point:
Mass customization will move production closer to the customer
Sure, we’ll still have a lot of heavily mass produced, generic stuff, but people also want personal things that reflect them, things that have stories and histories they can relate to. And there are a whole new generation of technologies which are enabling this.
Of course, these are all my random musings, but they’ve been guiding some early-stage investments I’ve made in the recent past and some of the work I’m doing with non-profits.
In the past year, I’ve worked with a lot of startups and the one recurring thing I notice is the amount of time people spend worrying about basic infrastructure. So, here’s my roundup of the stuff I’ve used, recommended and would use again for my next project:
Mail, calendaring, document sharing
Hands down, Google Apps for Domains wins. Yes, it’s the evil empire, but your other choices are unfortunately crappy or lots of work. I use it in conjunction with Thunderbird and Lighting (right mouse click, Convert to: Event – that rules!), so I rarely ever login other than to work on docs or upload stuff. Also, easy to sync to mobile devices – which is key.
On very, VERY important side-effect of Google Apps for Domain is the incredible variety of marketplace apps. And that ecosystem has one feature that rules them all – single signon. Yeah, I know, there are three of you and you don’t need it – but when you grow, you WILL need it.
For this to work properly, it’s best to signup for apps through the Google marketplace – thus making you even MORE beholden to them.
Sales tracking, CRM and invoicing
I have this blog and my company website hosted at ServInt, both are running on WordPress, which I highly recommend for relatively static sites with few editors. If you need more capabilities, I would look at Cloud Access’s hosted Joomla service. Both WordPress and Joomla are great as they have tons of plugins and large communities, making it relatively easy to build complex sites quickly. However, be aware that future upgrades may not be smooth if you find some of the plugins you use have been abandoned by their authors….
Of course, neither of these necessarily have everything you need to develop a web-based offering, but they do really well in semi-static sites that are usually put up while developing something else. I use CloudFlare to protect my sites (along with mod_security and some other things). They also provide an interesting checkpoint to Google Analytics or other metrics packages.
If you have extended hosting needs, I’ve used the same hosting company, Voxel.net, for my last 3 companies and would use them again in a heartbeat. They’ve recently developed a hybrid managed hosting + on-demand cloud scaling which would work well for a lot of startups. I’ve also used Softlayer successfully, but watch out for their extremely aggressive policies if you miss a payment. I had a card expire while traveling and a site was down for 2 days as a result. Not good.
Yes, I know, you could use EC2 or some other cloud service – but, realistically, most sites will not have enough traffic on the corporate brochure-ware site to justify the overhead of using such services. And, yes, it shold probably be separate from your main app if you are web based.
In the past I’ve used Outright, but I switched to Xero as they have a more complete solution. I generally dislike Quickbooks, but that seems to be everyone’s default. For expenses, I have a PayPal card and I write expense details on every receipt.
Some people swear by Expensify, but I seem to keep track of expenses just fine without resorting to it.
Besides Google Analytics, I’ve used ClickTale, which is very useful in understanding what people are looking for on a particular page. This led us to reduce the Concept32 site to just one page instead of having a lot of content no one was actually interested in.
A tough nut to crack. I’ve tried a number of tools, but none seem to actually pull people in. I really like TeamBox, but others like Basecamp better. This is really dependent on how people work and how much structure/process is needed. I would point out that I’ve recently had to manage some much larger projects, and OpenProj has been really helpful. I’m also exploring using Smartsheet to make these planning docs more widely available.
Misc other stuff
As everyone else, I have a pile of tools I rely on all the time. Like Prezi (quick, good looking presos), TweetDeck (social media tracking), Toktumi (virtual PBX), eFax (duh). Backups are also critical. I use Crashplan, which is multi-platform (Win, Mac, Linux, Solaris) unlike a lot of solutions. They are also in Minnesota and cashflow positive with no venture funding, both of which are great stability indicators. Some others use BackBlaze with success, but they are in the same geo as me, something I’d rather avoid.
All the other things…
Of course, this does nothing to address wider issues around building a startup, particularly scaling systems, process, delivery methods, etc. But the point is to first implement a usable and relatively scalable base infrastructure – something you will not need to worry about for some time.
and here are the resources I’ve been looking at:
(yes, I was looking for a minimalist theme)
The upshot of this is that my website will be variable and possibly broken in the next few hours…
[update] stopped my trials with the Titan theme (link in footer) – going outside as it’s gorgeous out and there’s a concert in the park…
Finally bothered to fix the Twitter integration on my blog. When Twitter changed auth, a lot of things broke and I had to upgrade all of WordPress just to fix it…. Well, I finally found some time to do it, thus all the new ‘Continuing Education’ posts….
Olliance – http://www.olliancegroup.com
BlackDuck – http://www.blackducksoftware.com
Chikpea – http://www.chikpea.com
Equalis – http://www.equalis.com
Earthster – http://www.earthster.org
And finally, my own company:
Concept32 – http://www.concept32.com
I was in Los Angeles last week attending the Digital Hollywood conference. The crowd was mostly executives from the entertainment business and it was held at a luxury hotel in Santa Monica.
Aside from the fact that every other session was either about mobile (re. content on iPhones) or about how to monetize content on iPads, there wasn’t all that much new being discussed. However, most of the executives I met were very sanguine about web content and the problems they have with existing and back catalog content.
One clear problem emerged around publishing web content – negotiating reasonable terms with rights holders. I heard several VP-level and above execs express huge amounts of frustration with rights holders and their demands. One had even recently quit because of his inability to get reasonable terms and several others were looking for a way to get out of the business.
At this point, I’d like to explain how TV shows and movies actually work. Basically, you can think of a movie or TV show (a ‘property’ in Hollywood-speak) as a collection of performances by a bunch of ‘artists’, choreographed by a ‘producer’. Each ‘artist’ (it could be a company as well) retains the right to their performance and are referred to as ‘rights holders’. And it’s the ownership of these ‘rights’ in particular ‘properties’ that allow ‘artists’ to be paid every time something is shown (this is know as ‘residuals’ in the industry). In most cases, ‘rights’ for a ‘property’ are negotiated when it is initially made, usually around ‘platform’ rights (e.g. a platform being movie, cable, tv, tape, dvd, airplanes, pay-per-vue, commercial use, etc) and geographic rights. However, when a new ‘platform’ emerges (web, internet streaming, downloads, blueray etc), rights must be negotiated for that new platform for each property.
So, back to our story. The (very) senior executives I was talking to were all facing the same rights problem. They would like to publish existing and back catalog content on the web, but the complicated matrix of people and organizations that owned rights in these properties made it impossible to get everyone to sign-off on web publication.
Apparently, some rights holders are demanding large upfront payments in exchange for signing off on web publishing the content. And, because the revenue models are uncertain, no body is willing to risk large amounts of money upfront….
The irony of this, of course, is that consumers will download the content anyway, further and further reducing it’s value. Even worse, the unwillingness of current rights holders to license content for web publication is undermining the future of the residuals system since it is pushing content producers towards ‘work for hire’ royalty free content.
In the end, the reason why your favorite show is not available online legally is probably because, someone, somewhere is being selfish and greedy. And that is adding up to a problem no one is seemingly able to solve.
A couple of months ago, I sat down to help a company that was struggling to grow beyond subsistence for a few people. Before actually sitting down with them, I spent time talking to the CEO about the state of his business. It was clear that there was a lack of process and discipline, and this was not doing the business any favors.
In business, it’s critical to have ways of cataloging progress and give a historical perspective of what is going on. Sure, revenue is a useful reference point, but it says nothing about how the money was made – or how it could be made more effectively. Ideally, this would be rolled up into a financial model which used historical numbers to project forward. But even without this level of detail, it is still possible to derive useful information from even the simplest numbers.
After my phone discussions with the CEO, I clearly understood that the business was not doing whatever it took to generate business, and that my emphasis was going to be on more face-to-face networking and pitching to local companies.
So, there I was, standing at the whiteboard, ready to point out that their lack of revenue was due to not enough in person sales. But, as the CEO and VP of Sales went over what metrics they had about conversion rates, I suddenly realized that I was wrong. The numbers told the story – and the story was that there was no way that they could get the revenue numbers they needed without a radical change in the business. It was a relatively simple, but radical solution – to stop going after individual customers and instead focus on channel partner recruitment.
For this company, it was a revelation that their sales strategy was doomed to failure, and, for me, it was yet another lesson in listening to the numbers, even the few you might have.
I was just looking at a discussion about LinkedIn where someone called it useless. I’ve been a LinkedIn user for years, basically since it was launched, so I’m more than a little biased about it’s utility. However, I also recognize that quite a few people think it should be a magic bullet to a variety of problems, from lead generation to landing a new job. Truth is, like most social networking/media sites, it’s hard work to get what you want out of it.
Nothing is a substitute for doing the hard work of face to face networking, but LinkedIn is hugely helpful in keeping up those relationships, particularly as people transition from one job to another. It’s also extremely helpful in surfacing people in other industries and helping to setup face to face meetings in other regions you may be traveling to.
Ultimately, however, it’s like everything else, you get out of it what you put into it. Social media (e.g. Twitter, Facebook and LinkedIn) is particularly weird in the sense that it might take quite some effort (and time) to get out of what it promises.
It’s also important to remember that in some geographies like Silicon Valley, it’s pretty much a requirement to be on LinkedIn – in other places or verticals other than tech, it’s not as common or it may be another social media network. In Europe, Bebo and Xing are much more used that LinkedIn – and Facebook is increasingly what people use to connect for business purposes.
As far as generating business from LinkedIn, it’s pretty clear that no single medium ‘generates business’, you have to work a broad front and each little bit increases your ability to ‘generate business’.
In the end, there is no magic bullet, it just comes down to hard, consistent work over a period of time, much like every other aspect of business. In that sense, social media is no different.
It’s always good to see a past client become successful. In this case, it’s WaveMaker, a company for which I did business model, licensing and community strategy several years ago. Looks like that work has finally paid off, thanks to good execution on the part of Chris Keene and the rest of the exec team. They just announced profitability and that their community had grown to 15,000 participants.
Congratulations all around.