Disrupting the VC Industry: a VC investment Market

The discussion about disrupting the VC business hit the blogsphere late last week. Primarily driven the posts by Rick Segal and Doc Searls. A pause of a few days and Dave Winer has proposed User Internet Capital Corp to disrupt the VC business. Doc Searls has thrown support behind the idea as well. When the conversation was first begun, I thought about how the industry could be distrupted. I must admit that I am disappointed by what has been proposed. In a sense the User Internet Capital Corp is simply a VC fund open to all and sundry.

A more disruptive idea is to create a VC market. A market where people (users included) can invest in high risk/high growth businesses from an early stage. A market for Venture Capital would be far more disruptive than simply creating another form of the VC.

So how would the market work? A company would register with the market. The registration process would include the necessary due dilligence process that provides the basis for trust within the market. The company would then place a certain number of shares up for auction.

The auction process would work like this. Bidders bid not only a price but also an amount of shares they wish to buy at that price. At the close of the auction, the highest bidder pays the amount they bid and receives the corresponding number of shares that they bid for. If the highest bidder did not buy all the shares then the remain shares are offered at the final bid price to the other bidders.

An option is available where the total amount of a final bid (bid price for shares x the number of shares wanted) of losing bidders will be divided by wining bid price and they receive that number of shares. The shares that people purchase can then be traded within the market. The last traded price for a company's shares becomes the starting price if a company decides to do another round of funding.

Anyone can register to bid. The registration process for bidders is again a due dillegence process that provides the bid side trust for the market. There is no minium amount or number of shares that a registered bidder can bid for. If all they want is one share , then that is all the need to bid for.

A VC investment market opens up investment in high risk/high growth to anyone (Doc Searls and Dave Winer's users) businesses. A far greater number of businesses will be able to seek and receive VC funding than through the current method. The risk of any individual investor can be spread even further. It also brings competitive bidding to the process which will bring their own improvements to VC investment. Finally, it opens VC investment to the wisdom of the crowds which brings with it the possibility of better selection of great ideas.

I really think that a VC market will produce far greater disruption of the VC investment industry than the creation of a publicly traded VC fund as Dave Winer has proposed.

Links to Conversation:
Michael Parekh, Paul Kedrosky, Mathew Ingram, Michael Arrington, Mark Evans, Robert Scoble



Technorati Tags: VC, Venture Capital, Markets, Disruption, Doc Searls, Dave Winer

Healthcare and Education Spending

[Ed note: I wrote the post a while ago
but I never got round to posting it. After reading two articles
in the Economist, I was motivated to post it. Although it is
about Australian education and healthcare it is applicable to other
countries.]

Spending on healthcare and education is tied in
with poverty traps, reforming the tax system and welfare.
Currently, Australia has a complicated system that creates poverty
traps as benefits are means tested, disrupts the effective delivery
of services and complicates the tax system even further.


Reforming the way education and healthcare are paid for will
make significant in-roads to improving these community services.
This isn't about who should paid which has largely been settled in
favour a joint payment by both the individual and the state.
Rather it is about how the state money is provided to fund the
services.

Education and healthcare are currently funded in a
top down approach. The money slowly trickles down until
eventually some very small amount reaches the front-line where the
service is actually delivered. The money gets eaten up by
salary increases, administration expenses and pet projects.
This all leads to waste and increased costs in delivering the
service.

The funding needs to injected into the bottom, at the
point of service delivery. The funding is then delivered to
where it is needed by those who need the service. It also
brings in the possibility of competition as service providers now
half to provide a service that the consumer wants to use.

The
best way to inject the funding at the point of delivery is to create
non-means tested education and health accounts. The federal
government recurring spending would go into each person's education
and health accounts to be spent as the individual determines.

The
accounts would come with a left and right of arc. An education
account can only be spent on providing education and health accounts
only on health. The health accounts would have further
restrictions on the type of health services it can be spent on i.e.
most cosmetic surgery would be out. If you want that save up
and pay for it yourself. If the individual chooses services
that cost more than what is placed into the accounts yearly then the
individual has to pay the difference. For example, you send
your child to the most expensive private school then you will need to
pay the difference between what the account provides and what the
school charges.

The accounts would replace most if not all the
federal funding of health and education. The introduction of
the accounts would see any restrictions on price and price caps
removed. This will introduce price signals into the delivery of
the services and increasing the scope of competition in the delivery
of services. In this time of population movement, travelling
and globalisation the money in the accounts can be spend with
overseas providers of healthcare and education.

To
ensure the functioning of the accounts a minimum capitalisation of
the accounts will be mandatory. Just as financial institutions
are required to do. Continuing the theme of choice, the
individual will have the choice of who manages the accounts: their
bank or building society, insurance organisation or the RBA for the
government.

The health and education accounts strike a balance
between effective delivery and competition in service delivery while
ensuring a fair level of access to these services for all
Australians. The accounts also empowers Australians to take
responsibility and control of their lives. These accounts take
what is best of the Canadian, UK public funded systems with the best
of the US funding at point of delivery.

Technorati Tags: Australia, Policy, Education, Healthcare

Digital Media Marketplaces

A marketplace for digital media has intrigue me for a while. A place where digital media price is set by the value placed on the media by the market. Google Video Store with its variable pricing is a pale immitation of the a marketplace and will remain that way until the price of the digtial media is set by the marketplace and not by the seller. Variable pricing a market does not make. It is however, a step in the right direction.

One question that has bugged me is how would a marketplace determine the value of digital media. The pricing mechanism lies at the heart of any marketplace. For the marketplace to function properly the market needs to method to effectively set the value (and consequently price) of digital media. If the pricing mechanism is faulty then the market wont operate smoothly.

Stockmarkets prices are set by the interaction of the amount of a company's shares available for sale and the demand for the shares. The price is primarily determined by the scarcity of supply. Digital media doesn't have a finite supply. It has an inifinite supply of perfect copies. Scarcity of supply is not going to work in a digital media market as a pricing mechanism.

The Logistics Equation could be used to provide "pricing" variability that is determined by the market. Not really a very good system. Artifical constraints are placed on the market and prices only go up and never down. Not really a dynamic market with variable pricing.

A better pricing mechanism is to use demand per unit time. The price is then determined by the scarcity of demand. As the demand per unit time goes up the price rises, as the demand per unit time goes down the price falls. The beauty of this system is that the price is set by the operation of the market. It also produces a dynamic market with variable pricing with little or not artifical constraints.

Technorati Tags: digitalmedia, markets

Technorati Tags: digitalmedia, markets

Net Neutrality and IPTV

In much of the discussion (Michael Parekh, Om Malik, Jeff Pulver and Lawerence Lessig to name but a few) about net neutrality few seemed to have spotted the primary underlying reason for the determination of the US telcos/cable companies to implement tired Internet access. Besides greed that is.

As I see the primary driving force between the Telcos/Cable Companies (shall they become the new Evil Empire?) is to make their wonderful, investor friendly IPTV plans economical. As I have discussed in a previous post IPTV has significant disadvantages to Broadband TV to the point of IPTV being uneconomical when competing against Broadband TV. Unless the Evil Empire (aka telco/cable companies) can implement two tiered Internet.

The telcos/cable companies are frantically seeking to raise revenue and ARPU (the CEO's bonuses depend on it remember?) in the face of the on-slaught of the IP world. They see IPTV as their salvation and are consequently desperate to make their IPTV plans work. Unfortunetly, Broadband TV makes destroys the economics of their plans. The only way to make IPTV economical is to make it impossible for Broadband TV to be delivered at reasonable resolution and speed (downgrading Broadband TV packets or tiered Internet) without paying. The price the Broadband TV provider has to pay would at the very least make the IPTV competitive but more likely be set to price Broadband TV out of the market (wouldn't want to compete, now would we?)

Technorati Tags: NetNeutrality, IPTV, BroadbandTV

Technorati Tags: NetNeutrality, IPTV, BroadbandTV

Strategy of Microsft and Apple

Both Steve Jobs' and Bill Gates' keynote addresses showed that both companies are pursuing a stategy of empowering the edge of the network. A strategy that places users front and centre of the companies' focus.

How they pursuing this empowerment differs. Microsoft's strategy is to create seemless connectivity between all the devices at the edge of the network in order for users to be more productive. While Microsoft sees a growing importance for other devices, they still see the PC remaining an important part of the edge of the network. Why centeralise the PC's functions when you are trying to push power to the edge? No thin clients for them.

Apple's strategy differs as they are pursuing a strategy of seemless creation, publishing and distribution of content at the edge of the network. Their focus is less on productivity and more on creativity. Again the idea is to push as much power and functionality to the edge of the network, not to centeralise it.

Both Apple and Microsoft see the edge of the network as becoming the dominate paradigm for the future. Centeralise services and products will still exist but only as the support or compliment edge services and products. A good example is Steve Jobs' demonstration of Photocasting. All the creativity was done on the iMac and distribution was accomplished by a RSS feed mediated across .Mac. The centeralised service, .Mac, support the creativity by providing the user the means to distribute their creativity. Expect to see the same for music and video through iTunes and .Mac in the future.

Noteworthy, is that both strategies of the companies are not mutually exculsive. Both strategies while competing are still complementary. How Microsoft and Apple manage the competitive/coperative relationship between the two companies will be interesting.

THe keynote addresses signaled a shift to the edge of the network. They also signalled that both the telco industry and content industries are now facing two companies that thrive on rapid innovation. Few companies in these industries are up to the pace of change. Perhaps even more worringly for the telcos and content companies is the shift in power balance to Microsoft and Apple.

Links: Steve Jobs' Keynote Address
Bill Gates' Keynote Address


Technorati Tags: Apple, Microsoft, Strategy, Edge, Keynote

Technorati Tags: Apple, Microsoft, Strategy, Edge, Keynote

Variable Pricing on iTMS

The Labels are demanding that Apple loosen the reins and allow variable music pricing. And there are sound economic reasons for this to happen. Others in the blogsphere have explained the reasoning behind variable pricing in more detailed than I will go here. The labels though, want variable pricing which would put new releases at a price well above what is currently charged.

I personally find this hard to justify. To me it smacks of monopolistic pricing brought on by a lack of competition and waste in the labels operations. But back to the case of variable pricing.

EMI's boss has publicly stated that he expects Apple to institute variable pricing. Many bloggers expect Apple will expect implement variable pricing. Elliot Spitzer's investigation of the US music industry could easily force greater price competition.

So will Apple implement variable pricing? Quite likely. It was bound to happen and Apple will need to maintain "freshness" in the service or risk losing large numbers of users to other download stores. Already this is happening.

But Apple isn't likely to give the Label's exactly what they want. They will implement variable pricing but the upper price is going to be 99 cents. That will be the maximum price and prices for songs will descend from there.

Tags: Apple, iTunes, iTMS, Bubblegeneration, music

Paying for Fibre Networks

Capital. The requirement for any major infrastructure project and one of the hardest things to get. Capital remains the major stumbling block to the roll out of fibre optic to provide the last mile. Verizon is reported to be winding back the company's rollout of FTTP. Telstra, Australia's incumbent telcommuincations company, has stated that it will not rollout FTTN without regulatory gurantee to be able to lock out competitors. Clearly fibre last mile systems are expensive, particularly for companies whom stock prices are going down and not up.

Governments can fund the roll out of fibre last mile systems. This is what Amsterdam City council has decide to do. But government funding is not the only means for funding fibre last mile network rollout outside of a large telecommunications company paying for fibre rollout.

The fibre last mile network is an asset with a relatively predicatable income stream. Funding a rollout can be done by creating an income or royalty trust that will own the last mile network. Investors would buy units in the trust and this money would be used to fund the rollout of the fibre. The trust would not lay the fibre themselves but pay a third party company (or companies) to do the construction work. Once the network is rolled out then the trust simply charges telecommunications providers for access to their last mile connection. All telecommunications operators then have equal opportunity for network access.

Using Income/Royalty Trusts to fund fibre rollout has several advantages. Governments don't need to get involved in funding the rollout nor providing regulation to provide equal access to an incumbents network (always a messy business). A single company is not burdened with a very large capital expenditure over a long period of time. The trusts would soak up a lot of the cash that is sloshing endless around the planet causing various problems. The trusts would also create a "steady" income stream for long term investment. I expect that the trusts would sit between bonds and equity in the risk/reward metric. This would provide the pension/super funds with third security for parking cash.

But the main advantage is that the trusts would see last mile fibre networks rolled out now rather than possibly maybe sometime in the future.

Tags: FFTH, FTTN, Telstra, Funding, Telecoms, Last mile, Broadband, Internet, Fiber Optics, Trusts

Predictions for 2006

As the new year starts, I thought I would jump on the bandwagon of "Predictions for 2006". In no particular order:

Wireless Internet will move mainstream. The Wild Wild Web will move onto the screens of mobile phones as it has already done with PCs. As the Wild Web takes over the screens of the mobile users the precious walled gardens of operators will die. The manicured lawns and delicate pansies of the flower beds succumb to the voracious growth of the Wild Web. This will open up hundreds of new opportunities and services to mobile users. It will further erode the boundaries between wired and wireless spheres.

The Attention Wars will begin in earnest. All though the first shots where fired in 2005, full scale battles will begin in 2006.

Web service operations will suffer. Web Service companies will face outages and problematic quality of service through out 2006 as these companies learn the hard way about operations. While individual companies will improve overall there isn't going to be drastic improvement in the quality of service of web services. It is likely that web service operations will see a increase in the use of Big Iron to do the heavy lifting and mission critical tasks leaving the server farms to serve pages.

Usability will become a competitive differentiator for services and applications. Apple has demonstrated (again) the power of usability. Other companies are going to seek to harness that power in differentiating their service or application in the crowded marketplace of the Internet. Getting the mix between features and usability right is going to give a company a strong competitive advantage. An obvious example is the metaphoric revolution that Office 12 is going to usher in.

Digital home entertainment will enter new phase. The roll out of Media Centres will pit companies molded and shaped by relentless competition against oligarchs shaped by monopoly agreements and captive audiences. Competition for the attention of audiences will become far more intense as Internet video moves from being an indirect threat to a direct threat to broadcasters.

Identity 2.0 will become the catch cry of 2006. The possibilities opened by what has been termed Identity 2.0 from attributing comments and posts across the blogsphere to banking to fighting fraud and e-crime will bring this squarely into the centre of attention of the Wild Web. But like its counterpart in the offline world, identity 2.0 is only going to be as strong as its weakest link. Which is usually the process and documentation for obtaining an id card. This is the problem of a "real id" obtained using fraudulent means. For example using someone else's birth certificate to get a driving license. This will need to be addressed as Identity 2.0 is rolled out across the web.

Broadband TV will continue to gain momentum at the expense of the telco's TV offerings. Broadband TV will continue to grow as experimental broadcasters, non-traditional broadcasters and content owners push more and more video to the consumer through the Internet. The lower cost broadband TV solutions will erode the economic viability of the telco's TV offerings. Something that many telcos seem aware of given their recent rantings on two tier Internet. Two tier Internet will have a much greater effect on Broadband TV than VoIP or Web Services.

Uplink speeds will become a competitive point as ISPs struggle for differentiation in the Speed Wars. As the download speeds escalate rapidly it will become harder and harder for ISPs to differentiate themselves on speed and for the smaller ISPs to remain in the game. At the same time the speed claims will face greater scrutinity from consumers and regulators. This will force ISPs to find alternative ways to differentiate themselves which they will do with uplink speeds. We won't see a sales pitch based on synchronous speeds but something like a 8-12 Mbps downlink with a 1-4 Mbps uplink.


Tags: Predictions, Web Services, Broadband TV, Wireless, Media Center, broadband, Identity 2.0, usability

Threading conversations

Recent posts have talked about the mining the information contained in comments on blogs. The bigger issue to me is threading the whole conversation that is scattered across the blogsphere. Of which comments are a part. Trying to follow a conversation let alone the comments is, shall we say, difficult? More accurately it is tiresome and bordering on impossible in many cases.

Of course the aggregators and search engines can do a manual method. This will lead to missed posts and more importantly likely to miss the part of conversation held in the comments. Instead we need a system of automatically threading conversations ala Thunderbird or Outlook.

Until now RSS has been limited by being one way. Add in SSE and now conversations can be synchronised across sites. Instead of having a trackback or backlink each post would have a thread feed. When another blogger adds a post to the conversation they use the thread feed instead of the trackback. The post shows up on both sites with comments. Now the conversation is threaded. From any one blog the reader can find the whole conversation and not have to ferret it out across the general blogsphere.

Together RSS and SSE provide the active feedback channel that Zoli Erdos wants. It provides the automatic threading of conversations (including the comments) across blogs. Perhaps not the most elegant method but it is simple and can be done now and I'll take simple and avaliable over perfect and unavailable anyday.

Tags: blogs, conversations, RSS, SSE, tracking, feed, weblog, RSS+SSE

Merry Christmas and a Happy New Year

May all have a Merry Christmas and a Happy New Year.

Reliability and Liability

37signals posted on why relability wasn't critical for web service companies on the 6 Dec 2005 . Two weeks later several web service companies, SixApart, Del.icio.us and even the granddaddy, SFdc, had outages. Bloglines service has been spotty. The frustration that these failures have caused is evident from the moaning across the blogsphere. The SFdc failure has caused businesses to loose money.

Reliability matters in operations. Even for web service companies.

But debates on reliability are clouded by misconception and misunderstanding. We need to understand why reliability numbers can be misleading and how reliability is achieved.

Reliability as a Number
Reliability is often specified by a wonderful percentage: 98...99...99.9...99.98 and so on but what does the number say and what doesn't it say. Reliability in its simplest form is how many hours within 100 that the service is not available. Therefore 99% means 1 hour in every 100 the system is unavailable. The number does not tell you is how that hour is spread out across the 100.

What reliability numbers do not tell is how that 1 hour in 100 came about. The quality of the reliability. Two scenarios. Every 50 hours the system is take down for 30 minutes for preventitive maintence. The time is scheduled and announced well in advanced. Or that 1 hour is randomly spread across the 100 hours from failures and random firefighting. Users receive no warning of the outtages and they can come at any time.

The first scenario is a lot less fustrating to users than the second and yet they have the same reliability number. Reliability specified as a number is next to useless and can be grossly misleading. Before you can use a reliability number you have to understand how it occured. You need to understand the quality of the operations overall.

Achieving Reliability
There are two methods to achieving reliability: the brute force method and the smart method.

Using the brute force method to acheiving reliability is expensive. Each extra step in reliability is more expensive than the next. Each step increases the complexity of the overall system. Which of course increases the risk of something going wrong. To make matters worse not only does the risk of failure go up, the risk of a spiral into catastrophe also increases. Not a nice combination.

The brute force method is often used as it is easy to understand. But for many web service companies is overkill and too expensive.

The smart method is routed in engineering risk analysis: identifying the types of failure, the probability of failure and the consequence of failure. The various failures are ranked by risk: a combination of the probability of failure and consequence of failure. These failures can then be dealt with from the riskiest to the least risky.

Risk analysis reduces the cost of reliability by giving the users an objective method for identifying where they will get the biggest bang for their buck. But it is a continual process. It is not something that you do once, place into a drawer and forget about. The risk analysis must be done continuously as the risks and likelihood change as the environment, technology and business evolve.

There is going to be a lot of resistance to using risk analysis techniques in web services companies. If nothing else simply because it challenges the current way of doing business. But for the web service companies to survive they are going to have to embrance and internalise engineering risk management.

Risk management techniques were developed to address liability issues that engineering firms faced. They were hard lessons but liability force the engineering companies to develop better operations. Perhaps it is time for the web service companies to be liable for the quality of their service.

Tags: 37signals, reliability, webservices, risk management, quality, engineering operations, sixapart, salesforce.com, del.icio.us

Here we go again

Leaving aside the question of whether Jeff jinxed Salesforce.com, the recent failure of yet another web service company is another indication of a relative lack of operations maturity within web services companies.

Zoli Erdos makes the point,

"The Typepad outage prompted Brad and Jeff write their piece was storm in a teacup; this is the real thing, the Storm."

I agree. SFdc is the standard bearer for the web services industry. What happens to them reverberates through the industry. I expect 2006 will be the year that web service companies gain operational maturity. Or slide off the radar.

As more and more people and businesses conduct their lives and make their living using web services, reliability of even simple services will increasingly be a competitive point. Those who achieve a perceived reliability of service will thrive and prosper. Passing the buck on reliability because it is companies feel it is to difficult (and/or expensive) to achieve is not going to be a successful survival strategy.

Update: Companies are losing/have lost money from the SFdc outage. Will they be compensated? SFdc does face the prospect for being sued for liability.

Links: Salesforce.com Outage article in Infoworld

Tags: web services, on-demand, salesforce.com, engineering operations, reliability

Bringing More People into the Forest

Seth Levine of Venture Chronicles has a very good post about IBM's streamlining of patent licensing for startups.

IBM has one of the largest (if not the largest) patent portfolio in the world. It has remained the leading patenter for the twelve years. This move will bring some certainty for the startup community it also has the benefit of bring many patents that would otherwise not be developed into the hands of people who can use them.

While IBM does have a program to create internal startups, the simple fact is that IBM has too many patents to use them all. By creating this patent portfolio deal suddenly patents that would otherwise not be used can be used to build new products and services. Given the current IP system, IBM's deal is a good thing.

Tags: IBM, Seth Levine, IP, patents

Wherefore art thou Operations?

Blogsphere has been alive (and dead) with the recent failure of service of SixApart's Typepad blog service. Many users are very fustrated. Some to the point of moving to another service such as Jeff Nolan. Om Malik is riffing his refrain about the scalability of web 2.0 companies. David at 37Signals has a different take on the issue. They have even debated the subject on a podcast.

But their debate is a red herring. Or put another way, they are wrong.

Web 2.0 companies are service providers that rely on engineering operations to provide their service. Instead of their service being say, satellite broadcasting, it is publishing blogs (in the case of Six Apart). Consequently, web 2.0 and web service companies face the same issues as any other company that relies on engineering operations. They are not special or unique or some how able to defy the laws of physics.

The problems that web 2.0 companies (this applies to any web service company i.e eBay, Google, Yahoo! etc.) have suffered recently are not an indication an inherent problem in the company concept or business plan. What the problems do indicate is a startling lack of engineering operations expertise. Where is the maintence scheduling, the backout plans, the risk analyses? Where are the very basics of engineering operations?

Engineering operations has developed methodologies, tools and knowledge base over the last 50 years that ensures smooth provision of service and dramatically reduce the risk due to unforeseen events. You know, those things that lead to fustrated clients and lost revenue. And bankruptcy. The methods and tools are used because they work.

Nothing that the web 2.0 companies are doing indicate that they are using the methods and tools of engineering operations and I have to ask why? It is not hard to use the simple methods and tools. They don't need to use the more complex methods or tools so again I ask why? Lack of knowledge about these methods and tools, delusion that some how web 2.0 companies are special or disbain for tools and methods from outside the web world? I expect it is a combination of these and others.

The solution is not hard to implement. Hire someone with experience in engineering operations. Someone who can use the methods and tools to address the risks and processes of the company's operations. This person will have to do a lot. The operations will require a lot of house keeping as the current processes are brough up to scratch. Failing that, go down to the local bookstore and purchase three reference books. One for engineering operations, one for engineering risk analysis and one for engineering quality assurance and use them. While not as good as hiring someone with experience in engineering operations at least it will be better than the status quo.

The issue isn't scalability or lack thereof or even reliability or lack thereof. It is a lack engineering operations expertise. The web service companies are finding that even they cannot escape Murphies Law,

"What can go wrong, will go wrong in the worst possible way at the worst possible time."

Not using engineering operations methods and tools means that a small failure quickly spirals into a catastrophe for web service companies. They have nothing to manage nor mitigate the risks. Until web 2.0 companies, in fact any web service company, effectively addresses the engineering operations side of their businesses they are not ready for being mission critical systems.

Tags: Web 2.0, Om Malik, Typepad, Six Apart, 37signals

"and a star to steer her by"

"And all I ask is a tall ship
and a star to steer her by"

-John Masefield

Hugh Macleod made an important point in his Les Blogs round up:

One tiresome theme that keeps popping up: "What is the future of blogs?" Dumb question. Nobody knows. And anyway, if we knew where it was going, we'd already be there by now. (his emphasis)

While we may not know what the future holds for blogs. We do still need a direction. We have to have somewhere to point the ship. So the question is not "what is the future of blogs?" but "which star are we going to steer her by?"

So...which star to steer her by?

The blogsphere is about conversation and it needs to support all types of conversation whether between a company and clients, between family and friends or the wider community in general. Currently, the conversations are haphazard and often difficult to follow. For the blogsphere to grow, to evolve, conversations need to flourish in all their forms.

Enabling better conversations is our guiding star. That is the star to steer her by.

Commoditisation of Opinion

The Internet disrupts everything it touches. Now it is the time for the consulting firms to feel the disruption.

Blogging and the blogsphere are commoditising opinion. No longer do you need to pay huge fees to a consulting firm to write a 100 page report (which your not going to read anyway) to tell you about an industry. The same insights are available for free in the blogsphere. This commoditisation of opinion will challenge the value of the major consulting firms.

The commoditisation is only in its early days yet. The lies a problem with trust.

The consulting firms have an implicit trust rating. You trust that they have done their background research and their opinion is based on facts. The blogsphere lacks this implicit trust. Each reader has to form an opinion on the level of trust to assign to each blogger.

The blogsphere needs a explicit trust mechanism.

The trust mechanism is a solveable problem. One which is likely to be solved sooner rather than later.

I wonder if the consulting firms will see this coming?

Tags: disruption, opinion, commoditisation

Come all yea faithful

The Geek Dinner Dec 2005 was held last night in London. With roughly 100 plus people turning up it was a good evening. For me it was great to meet the people behind many of the blogs. The special guest was Robert Scoble with many who had attended the Les Blogs conference as well as those attending the Global Voices summit.

The dinner was held at the Texas Embassy Cantina near Trafalgar Square. The night began, as these things usually do, slowly with people trickling in by ones and twos. By 8 the room was a seething hive a geekiness and empty wine bottles. Nor did the night escape without controversy. Following Les Blogs Jo Twist created buttons with Ben Metcalfe's now famous (or infamous) IRC comment printed on them. But what is an evening without a little controversy?

The evening included a meal which filled up the cracks between the wine and beer. Dinner was time very well and very tastey. Somewhere during the night several speeches where made but I can't remember what they were about. I found the speakers impossible to hear.

After being kicked out of the Texas Embassy those still standing went to a champagne bar to continue the night. I personally didn't get home till about 5.

Thank you to the organisers, to Hugh McLeod who supplied the wine from Stormhoek and Microsoft for picking up half the tab for the evening.

Links:
Geek Dinner UK Information

Tags: londongeekdinner, geekdinner

To USB or not to USB

I have come to the conclusion that there are to many power cords in my life. Each item has their own power cord that is un-useable with any other device. Even mobile phones from the same manufacturer often can't use the same power adapter from a different model. All this adds up to is the consumer tangled in cords, tripping over cords and ever on the quest for the specific power cord for a particular device.

Can anything be done? You can be universal adapters but this requires you to shell out more of your hard earned cash to solve a manufacturers problem. At any rate the manufacturers regular change the plug size making the universal adapters not so universal. No, the problem must be solved at the design stage.

Many (if not most) devices have a USB port. And this is the solution. These USB ports need to become the means of charging our mobile devices. Now all one needs is a single USB hub with a power adapter (one cord), and multiple devices can be powered of this one hub. You might argue that power cords are being replaced by USB cords. But USB cords are also used to transfer data (multiple use so we still gain on eliminating one cord) and the hub can be design so that the USB cords retract into the hub eliminating lost and tangled cords.

A neat solution that can be easily implemented across a wide range of devices without requiring extensive re-design.

Anything to get rid of those damm power cords.

Tags: USB, mobility, mobile devices, power cords

The Attention Wars

"Cry 'Havoc', and let slip the dogs of war"

-William Shakespeare (Julius Caesar)

Cry of 'Havoc' has been made. The dogs of war are loose. The Attention Wars have begun.

The Attention Wars have come about because of the shifting power relationships in the digital world as people seek to grab the last scarcity: attention. It is too early to predict the winners or loosers. The blogsphere will pontificate on the strategies and the likelihood of success. But no plan survives first contact with the enemy.

Many will predict that the GYMAAE (or GAAMEY) group will dominate and that one or more of the group will ultimately win. But fate is a fickle creature. The open source community has the potential to throw a massive spanner in the works. There is no reason that that the open source community could not develop an attention stack mcuh as they did with the LAMP stack that underpins much of the GYMAAE business. The ground work already exists through the Attention Trust and Seth Goldstein's Root.Net market.

IBM, Technorati and News Corp are other players that will be involved. All three companies have both the drive and vision to become major players in the attention sphere. IBM could easily become the corporate champion of an open attention platform. Technorati is already an attention service, but how will the evolve to build on what they have? What will be Rupert Murdoch's aim be? Be a buyer or a mediator or both?

As ever with Fickle Fate, a new player could easily sweep the field.

Like any war the strategies of the protagonists will differ but the ultimate goal remains the same: to mediate between those who want the attention and those who provide the attention.

Tags: Attention, Attention Wars, Technorati, GYMAAE, GAAMEY

Whose pockets are the deepest?

In discussions I've had over whether the teleco's are going to weather the current cat 5 hurricane that is pummeling the incumbent telephone industry, an oft quoted reason why the telcos will survive is the depth of their pockets.

But how deep are they really? How do they compare the mortal enemies of the telcos?

A close of business today Vodafone' market cap was ~US$139 billion, Deutsch Telecom's market cap was ~US$72 billion, Bellsouth's market cap was ~US$51 billion, AT&T (SBC)'s market cap was ~US$99 and Telefonica's market cap was at ~US$73 billion. A grand total of ~US$434 billion

A close of business today Google's market cap was ~US$120 billion, Microsoft's market cap was ~US$295 billion, Yahoo!'s market cap was ~US$50 billion, eBay stood at ~US$62 billion and IBM at ~US$139 billion. A grand total of ~$US666 billion.

While market cap is not a scientifically rigorous measure of measure of pocket size nor cash flow it serves to illustrate the point. The telco's playing a team that masses half again their size. A team with a better cash flow than the telcos going on their last reports.

Unfortunetly for the telcos the other team isn't playing a game of my hardware is better than yours. Instead they are playing my services are more useful than yours. A game the telcos' aren't that good at playing. The rules have changed and the old ways and old business models aren't working. Sadly, few of the telcos seem to realise this and insist on playing by the old rules.


Link: James Enck's Eurotelco Blog covers the gory details for the European telecommunications industry very well. James Enck gives some results on the hemorrhaging that all the European telcos are facing.

Tags: Telecommunications, GYM, Disruption