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broadstuff"broadstuff" - 5 new articles

  1. Smart socks for dumb smartphone users
  2. Asshole Density as a measure of Bubbles
  3. Gartner's Predictions of New Trends
  4. Paul Graham - 8 Things to do Before the Startup
  5. Social Business – Europe vs UK
  6. More Recent Articles
  7. Search broadstuff
  8. Prior Mailing Archive

Smart socks for dumb smartphone users

Two things on the Broadstuff Towers spike, both to so with putting a sock over your smartphone:

Firstly, Yondr, for the text-addicted:

Two weeks ago, I heard about a new company called Yondr that was making lightweight smartphone socks-with-locks that prevent the smartphone's user from accessing the device during a concert, movie, or party.


Preventing fans from accessing their phones during a show might seem like an extraordinary step, especially in tech-centric San Francisco. But even the most compulsive texters among us can say that they've seen That Person: the guy in front of you at the concert who holds up his iPhone to record eight minutes of video, forcing you to watch your favourite band through his tiny screen, or the girl whose phone lights up with texts while you're in the theatre trying to watch an important scene.

When self control is no longer good enough, the answer is Yondr- a time-lock sock.

More serious I think is the story of a kickstarter for clothing to enhance privacy "inspired by Orwell and Snowden". Behind the hipster fashion is the "UnPocket", essentially a Faraday cage that means your smartphone is shielded from sending and receiving messages:

UnPocket™ is a secure pouch made from layers of stealth fabric that allows you to drop off the surveillance grid at will. UnPocket™ puts you back in control and makes you both untrackable and unhackable.

Oddly enough I couldn't see a garment there with a hoodie....

Interesting twist - when "wearable computing" kicked off, it was all about communication, but now its about going incommunicado.....this Dystopia is the intersection of 3 Bruces - Privacy expert Schneier, Cyber-Futurist Stirling, and coutourier Oldfield.


Asshole Density as a measure of Bubbles

Fascinating article on Pando Daily about how the VC community has moved from funding high potential people to funding Assholes:

Here’s the problem. Every venture capitalist, in every interview they’ve ever done will tell you the same casual lie: That they invest in people first and ideas second. They’ll tell you they invest only in people they’d want to work with. They’ll tell you that they have the luxury to say no to companies that don’t do things in line with the way they like to work, the way they like to treat people.

You don’t have to look too far into this year’s frenzied pace of dealmaking, and at the price tags of those deals to know that’s complete bullshit. In all too many cases, what venture capitalists are investing in is assholes.

It’s weighing on those who’ve been in the business for decades, and I’ve been having conversations about it all summer. A senior partner at a top firm recounted a partner meeting at breakfast recently.

“Why are we backing this guy?” he said to a younger rainmaker at the firm. “He’s an asshole.”

His partner replied: “Hey, you gotta get over it. It’s no longer about whether someone is an asshole it’s about can he make money.”

That conversation happened a year ago. Said this multi-decade veteran of the business: “It didn’t use to be that way.”

Possibly, but looking back at the dotcom era one can argue that it gets that way as the cycle moves up to Maximum Froth, in my experience the Asshole count and valuations both went up exponentially as the froth rose in the dotcom era. At its height anything and everything was funded, and some of those people were very definitely many cards short of a deck. To me it's more a sign we are starting to see the Froth appear in the current "Tech" bubble (though, to be pedantic, most of these companies are not in fact "Tech" per se, in that its not their technology that is critical, they are mainly digital versions of long established services with some form of networking function overlayed on them to simplify the transaction between buyer and seller. It's the attraction of eyeballs - sorry, their traction - that is critical, as there is only space for a few winners)

The other very telling comment made in the article is this one:

At some point this business became about funding a founder, not a company. This has coincided with three other theories of venture capital portfolio management that have become prevalent of late. The first is an obsession with a VC’s “social game”—to steal the parlance of reality TV. Since 75% of venturebacked startups are destined to fail, VCs today assume they’ll do less damage overall by writing off a bad performer than doing the hard work to fix it. Even if they oust an ineffective founder, a company may be too damaged to salvage, meantime, the VC has ruined his rep of being “entrepreneur friendly” for nothing.

The second theory is the new valuation math: Given basic liquidation preferences and soft landings at bigger Valley companies, the risk to losing all your money is somewhat protected. Likewise, companies like Facebook and Google have thrown traditional valuation math out the window too, caring only if someone might disrupt them in another ten years.

So the only thing anyone cares about is the upside. VCs—in this point in the cycle—are smart to worry less about erring on the side of paying up too much for a deal than erring on balking at a seemingly high valuation. Especially when the next day Mark Zuckerberg could rewrite every rule by paying $2 billion for a hardware company that doesn’t even have a product on the market. As Bill Gurley of Benchmark says, “You can only lose your money once” if you invest. If you don’t, you can effectively lose that would-be appreciation many times over.

Is it the mantra of a bubble? Maybe.

I love how even the Valley pundits who insist they are "telling it like it is" shy away from the "Bubble" word ;-) - these above two point perfectly express the "game theory" of a Bubble dynamic. Anyway, on with the point:

The third change that rules venture decision making is an acceptance that no one has any clue of what works.


The determiners of success in the Valley are no longer CIOs deciding on huge iron boxes that cost millions a pop. It’s not even whether geeky early adopters will like Twitter or FriendFeed more. It’s what teens around the world want to do on their phones. A hot mobile app has more in common with a movie premiere than a classic Silicon Valley tech company. And increasingly, VCs know they have no clue what’s a good idea and what’s a bad idea. Better to back all the apps showing “hockey stick growth” on college campuses.

This also is a descriptor of the beginning of the Frothy phase of the dotcom era - no VC knew what would work then either, so they invested in a huge range of patently daft ideas, praying for a few nuggest, because to not do so was job-risking. If one VC made a big play in a sector then the others piled into every other player in that sector (and by the end, even manufactured their own plays like pop svengalis manufacture boy-bands). Now to be fair, the sort of person who can set up and build a billion dollar company is seldom going to win the "person most admired for being nice and honourable" awards, and as Pando points out, the process of getting a company off the ground can make someone into an asshole - but Pando thinks This Time it is DIfferent:

The other sad reality is the continual erosion of what Silicon Valley—as a place—stands for, if anything. This used to be a place of misfits and changing the world. Even the legendary assholes had a cause beyond themselves and checks and balances on their board. It just may take another economic collapse to get back to that.

Pando also argues that the reduced cost of setting up a company has changed the power dynamic, but while that's true in the down-cycle and early up-cycle, by the time the Froth appears money is not the issue anymore. To me, this looks very cyclical. At the top of the dotcom bubble it wasn't about changing the world either, it was about get rich quick. Bubbles attract assholes, and they disappear again when times get hard. If you want to find a low asshole industry sector, look for ones in trouble - the mid 'noughties Valley was just that, and was arguably more asshole free than average.

And we are enetring the Frothy time, so expect the asshole count to increase. Then there will be a crash, a collapse, and things will go back to being more asshole free again - until the next bubble starts to froth.

(Update - a friend of mine pointed out that what I reallyw as saying is that asshole density is a measure of bubbletime, so I have changed the title to that ffrom my original)


Gartner's Predictions of New Trends

It's always fun to look at all the various predictions of the Next New Things (given they vary quite widely by predictor, by year - us being no exception). Anyway, here are Gartners for the next few years (abridged by Broadstuff)

1) By 2018, digital business will require 50 percent less business process workers and 500 percent more key digital business jobs, compared with traditional models.

Near-Term Flag: By year-end 2016, 50 percent of digital transformation initiatives will be unmanageable due to lack of portfolio management skills, leading to a measurable negative lost market share.

2) By 2017, a significant disruptive digital business will be launched that was conceived by a computer algorithm.

Near-Term Flag: Through 2015, the most highly valued initial public offerings (IPOs) will involve companies that combine digital markets with physical logistics to challenge pure physical legacy business ecosystems.

3) By 2018, the total cost of ownership for business operations will be reduced by 30 percent through smart machines and industrialized services.

Near-Term Flag: By 2015, there will be more than 40 vendors with commercially available managed services offerings leveraging smart machines and industrialized services.

4) By 2020, developed world life expectancy will increase by 0.5 years due to widespread adoption of wireless health monitoring technology.

Near-Term Flag: By 2017, costs for diabetic care are reduced by 10 percent through the use of smartphones.

5) By year-end 2016, more than $2 billion in online shopping will be performed exclusively by mobile digital assistants.

Near-Term Flag: By year-end 2015, mobile digital assistants will have taken on tactical mundane processes such as filling out names, addresses and credit card information.

6) By 2017, U.S. customers' mobile engagement behavior will drive mobile commerce revenue in the U.S. to 50 percent of U.S. digital commerce revenue.

Near-Term Flag: A renewed interest in mobile payment will arise in 2015, together with a significant increase in mobile commerce (due in part to the introduction of Apple Pay and similar efforts by competitors, such as Google increasing efforts to drive adoption of its NFC-enabled Google Wallet).

7) By 2017, 70 percent of successful digital business models will rely on deliberately unstable processes designed to shift as customer needs shift.

Near-Term Flag: By the end of 2015, five percent of global organizations will design "supermaneuverable" processes that provide competitive advantage.

8 ) By 2017, 50 percent of consumer product investments will be redirected to customer experience innovations.

Near-Term Flag: By 2015, more than half of traditional consumer products will have native digital extensions.

9) By 2017, nearly 20 percent of durable goods e-tailers will use 3D printing (3DP) to create personalized product offerings.

Near-Term Flag: By 2015, more than 90 percent of durable goods e-tailers will actively seek external partnerships to support the new "personalized" product business models.

10) By 2020, retail businesses that utilize targeted messaging in combination with internal positioning systems (IPS) will see a five percent increase in sales.

Near-Term Flag: By 2016, there will be an increase in the number of offers from retailers focused on customer location and the length of time in store.

For what its worth, based on Broadstuff's advanced TTID algorithm and patented BGA prediction methodology (see end of post for definition), we can safely predict that:

1. Most of these will take far longer to play out than pedicted, and many that do play out will have far less impact than supposed
2. The further out these predictions go, the wronger they are
3. At least 30% of these definite trends will be completely different by next year, and the year after, so by 2018 the Top 10 will be unrecognisable.

Which of course is what Gartner's other great prediction system invention, the Hype Curve, tells us - only when something passes out of any hype trend, does it finally become useful.

The other thing I am left scratiching my head about, is that given the Great Hollowing Out*, if all these come to pass (most of these trends imply yet more waged employees being dumped or offshored), where will the money come from to buy all those marvellous new things these new lean businesses make? Even Henry Ford saw that one coming when he upped wages so employees could buy his cars....

* I am always amused by The Economist calling the Hollowing Out trend all a Myth in 2004, when it was patently obvious it was already happening. But of course, for that we use the MRD approach

For reference:

TTID = This Time It's Different. The algorithm states that whenever this claim is made, it isn't, and put your hand tightly on your wallet

BGA = Bill Gates Algorithm - This (X) will have far less impact in 2 years than we think, and far more in 10. We apply the Chasm upgrade though, which states that most New New things will never jump over the chasm and will be dashed on therocks in trying. About 3 of the above will be survive, on average - which 3 would you bet on?

MRD = Mandy Rice Davies corollary - "Well, They Would, Wouldn't They" - Always look carefully at where someone is coming from before following where they lead....

Paul Graham - 8 Things to do Before the Startup

Rather good article on starting Startups by Paul Graham, founder of Y Combinator, its a List of Things a Founder Needs to Know. In essence his argument is that much about running a startup is counterintuitive to what peopel have learned to that point in more formal structures - here is the Broadstuff Expergated Version for you lazy lot out there:

1. Don't saddle yourself from the get-go

Trust your instincts about of the most common mistakes young founders make is not to do that enough. They get involved with people who seem impressive, but about whom they feel some misgivings personally. If you're thinking about getting involved with someone—as a cofounder, an employee, an investor, or an acquirer—and you have misgivings about them, trust your gut. If someone seems slippery, or bogus, or a jerk, don't ignore it.

2. Its all about the Customer

The way to succeed in a startup is not to be an expert on startups, but to be an expert on your users and the problem you're solving for them. [T]he characteristic mistakes of young founders is to go through the motions of starting a startup. They make up some plausible-sounding idea, raise money at a good valuation, rent a cool office, hire a bunch of people. From the outside that seems like what startups do. But the next step after rent a cool office and hire a bunch of people is: gradually realize how completely fucked they are, because while imitating all the outward forms of a startup they have neglected the one thing that's actually essential: making something people want.

3. You can't game the startup system

The third counterintuitive thing to remember about startups: starting a startup is where gaming the system stops working. Gaming the system may continue to work if you go to work for a big company. Depending on how broken the company is, you can succeed by sucking up to the right people, giving the impression of productivity, and so on. But that doesn't work with startups. There is no boss to trick, only users, and all users care about is whether your product does what they want. Startups are as impersonal as physics. You have to make something people want, and you prosper only to the extent you do.

Though he makes the caveat:

The dangerous thing is, faking does work to some degree on investors. If you're super good at sounding like you know what you're talking about, you can fool investors for at least one and perhaps even two rounds of funding. But it's not in your interest to. The company is ultimately doomed. All you're doing is wasting your own time riding it down.

4. A startup is for life, not for Christmas

Startups are all-consuming. If you start a startup, it will take over your life to a degree you cannot imagine. And if your startup succeeds, it will take over your life for a long time: for several years at the very least, maybe for a decade, maybe for the rest of your working life. So there is a real opportunity cost here.

And as for starting up while at Uni, its one thing or the other. It may have worked for Zuckerberg & Gates, but they are a smal minority:

Yet when it comes to startups, a lot of people seem to think they're supposed to start them while they're still in college. Are you crazy?

Graham's view on what to dio at Uni is this:

...if you want to be a successful startup founder is not some sort of new, vocational version of college focused on "entrepreneurship." It's the classic version of college as education for its own sake. If you want to start a startup after college, what you should do in college is learn powerful things.

5. How can you tell if you're up to this challenge?

You can't tell. Your life so far may have given you some idea what your prospects might be if you tried to become a mathematician, or a professional football player. But unless you've had a very strange life you haven't done much that was like being a startup founder. Starting a startup will change you a lot. So what you're trying to estimate is not just what you are, but what you could grow into, and who can do that?

6. The way to get startup ideas is not to try to think of startup ideas.

I've written a whole essay on this, so I won't repeat it all here. But the short version is that if you make a conscious effort to think of startup ideas, the ideas you come up with will not merely be bad, but bad and plausible-sounding, meaning you'll waste a lot of time on them before realizing they're bad.

The way to come up with good startup ideas is to take a step back. Instead of making a conscious effort to think of startup ideas, turn your mind into the type that startup ideas form in without any conscious effort. In fact, so unconsciously that you don't even realize at first that they're startup ideas.

7. How do you know if you are working on Real Stuff ?

I can't explain in the general case what counts as an interesting problem, I can tell you about a large subset of them. If you think of technology as something that's spreading like a sort of fractal stain, every moving point on the edge represents an interesting problem. So one guaranteed way to turn your mind into the type that has good startup ideas is to get yourself to the leading edge of some technology—to cause yourself, as Paul Buchheit put it, to "live in the future." When you reach that point, ideas that will seem to other people uncannily prescient will seem obvious to you. You may not realize they're startup ideas, but you'll know they're something that ought to exist.

8. And the Ultimate Advice?

So here is the ultimate advice for young would-be startup founders, boiled down to two words: just learn.

Link at the top takes you to the full article, and I've linked to a further eassy he wrote as well


Social Business – Europe vs UK

I wrote a post on the Agile Elephant blog about some observations on UK/US vs European use og Social technologies, this is the first few paragraphs:

We attended the IoM conference in Cologne last week, at the same time London Social Media Week was happening. (David gave a keynote talk, the slides are over here). It was interesting to juxtapose the core themes of these 2 events (incidentally, it was our Patchwork Elephant Conference held during last year's Social Media Week London that persuaded us to set up Agile Elephant).

In a nutshell, I noted the following large differences in themes on my twtstreams:

  • In Europe, a large amount of the case studies are based around improving operations, all over the business.

  • In the UK, most of the focus is on customer attraction - marketing, lead generation and sales.

  • Where the UK is looking at operation improvement, it tends to be around customer facing operations, typically serving existing customers.

Now to be fair, IoM is about "social business" whereas "Social Media Week" has a wider remit, but it's interesting to note that even "Social Business" conferences in the UK are often focussed much more heavily on the sales/marketing arena. (Which is why we are running a more operations & customer related conference in November - see last paragraph of this post)

When we were kicking around the "why" this might be so, we came to the following hypotheses:

  • The UK has a more mercantile industry structure, but Europe has retained a lot more of its manufacturing industry - so by definition there are more European companies interested in operations improvement.

  • It is very likely that the CXO power base area is different - UK companies tend more often to be run by ex salesmen or accountants, European by ex operations people - the path to the CEO office usually tells you where the major power in the organisation lies, so its more likely that new projects in these areas are seen as priorities.

  • It may be cultural as well - in the UK my observation over many years' consulting is the culture is more "sell it first, we'll work out how to deliver it then" than European comapnies. As one delegate at IoM told us, to not have its operational side ticking along like a well made clock is painful for for a Germanic or Nordic company.

Whetever the reasoning, it leads to an interesting conclusion - best practice on customer attraction areas is in our observation coming from the UK and US, best practice in operational areas from Europe. Customer service examples seem to be coming from everywhere (it was after all a Swede who invented the concept of Moments of Truth in the customer value chain).

I'm not quite sure of the "form" for a blog in 2 places - reporoduce in entirety, or "skip after the break" - anyway, I've gone for the latter so here is the link to the rest of the article

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