Am in Edinburgh for a week. Have been enjoying the dry spring weather - the locals tell me this is the best weather they've seen for months. Traffic wardens are going about with their sleeves rolled up.
I'm giving a techtalk on Wednesday evening, at the Appleton Tower. Start time 18.30, 8th floor, as part of the Tech Meetup talk series.
Title 'Behind the Cloud - pointers to the future' - reviewing the current state of Cloud Services as infrastructure, the opportunities made possible by those services, and some of the interesting companies with which I'm involved which are building technology to use and improve the Cloud.
Will be at the EIE13 investor conference on Thursday, at the Assembly Rooms - send email to email@example.com if you want to meet up.
Last week there was a dinner meeting for the Saltire Foundation. SF is a long term project to improve the capability of people in Scotland; Scots generate lots of good ideas, but haven't been able to turn them into profitable businesses at a comparable rate to the rest of the UK, Europe, and the US.
This is being done by two programs, one for Scholars, one for Fellows. Applicants for both are competitive and awarded on merit. Scholars are undergraduates who get intern positions in companies outside Scotland before returning to complete their degrees. Fellows are graduates who go through a entrepreneurial leadership course at Babson College, Boston, then deliver projects both outside and inside Scotland. Both of these programs build self confidence and capability, giving the participants a global perspective in a short period of time.
The Foundation is a registered charity, in the US and the UK. It operates with a small number of staff and lots of volunteer support. I've donated some money to it for operating expenses, and would encourage you to do likewise.
An even better way to support the cause would be to employ an intern. Greg Sim, a 2012 Fellow, is working for my brother's company, Ecosse Subsea, which is pioneering new methods for subsea pipe and cable laying.
I'm currently mentoring for TechStars Cloud, and will mentor for the upcoming TechStars London program. Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at firstname.lastname@example.org
NANOG 57 was held 4-6 Feb 2013, in Orlando FL. I missed it, and have been behind hand in catching up.
For future reference, some notes on the most interesting sessions.
Review of physical effects of Hurricane Sandy - the fuel shortage, for generators and vehicles, was extreme - hospitals get to pre-empt fuel trucks from their previously comitted contracts to supply communications facilities. Datapipes bought their own truck, had it driven from Texas to NY.
Tim Stronge, TeleGeography on international submarine cable developments - Africa could use a lot more cable, but has no funded projects. There are 4 projects funded for Latin America. No more than 25 - 30 % of existing cable capacity is lit.
Nicolas Guilbaud and Ross Cartlidge, Google on topology aware network testing - current network uses current best path only, need to identify back up paths and potential problems on those. Source route test packets.
With source routing, we can target what gets monitored and ensure full layer3 coverage.
Framing the problem as an optimisation .."Find the best list of links that explains each faulty path"
Having watched John Borthwick's Betaworks develop over several years, seeing other groups using the same operating model is interesting. It seems to address the biggest difficulty I see with accelerators, which is the short duration. Because they are typically only 13 weeks long, they have to catch the startups at just the right point in their lifecycle; and there are a lot of worthwhile ideas which have a much longer development and sales cycle, especially if they are a new idea, rather than an incremental improvement on something which people already understand.
Quotes from the TechCrunch article 'The rise of the company builders'
"Studios .. using entrepreneurial expertise and in-house resources to help generate ideas and build companies at scale"
" In Lightbank’s case, the firm has built and scaled sales teams across a number of industries and companies and can help startups quickly manage this area.
Borthwick echoes Lee’s thoughts on the value of a shared platform of data, analytics and monetization tools. Betaworks has a layer of tools that its companies, which include Chartbeat, Bitly and others, all use. He compares this to the movie studio model, where companies like Disney and Universal create individual movies but have a layer of services in-house that promote films, and provide other functions across these various content plays."
Andreesen Horowitz is being a company builder, too, using as its models the Creative Artists Agency a boutique investment bank, and the original JP Morgan.
They have "45 operating professionals in the firm who aren't general partners...across five disciplines: executive recruiting; engineering recruiting, so two different what we call talent functions; a function we call market development, which helps companies meet the big companies that matter in their industry. We'll do on the order of 1200 briefings in our executive briefing center downstairs with Fortune 500 management teams, connecting them to the best and brightest new startups. And then fourth, marketing and PR, which is fundamental: How do you get your message out, how do you break through all the noise. And then fifth is corporate development: How do you raise money, how do you go public, how do you -- you know, if it comes to it, how do you sell yourself, and how do you deal with all the issues around corporate finance."
Does Scotland have businesses which support developing companies this way ? It seems there ought to be room for several different studios, addressing different vertical markets, since the selling and company building process is different for things which aren't dominated by software.
The other question for non US markets is whether the venture model is intrinsic; if so, this won't be easy to apply elsewhere. If not, and raising money from the local and US market is one of the disciplines, then this model could have broad implications.
Notice the absence in these articles of any government or academic involvement.
I'm currently mentoring for TechStars Cloud. Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at email@example.com
Last week was Demo Day for 500 Startups' fifth batch. A professionally produced event; it's challenging to give 31 companies a few minutes each to say something meaningful about who they are, what they are doing, and what money they'd like to raise. The Mountain View Microsoft campus space works well for presentations - was too crowded to actually meet and talk to people afterwards.
TechCrunch, VentureBeat and GigaOm all covered the material. The emphasis on non-US companies increases - to me, the most interesting was one of those, WhoAPI. They are making DNS information available to non-specialists, and offering availability monitoring.
List of companies
BabyList – A baby registry that works like Pinterest, allowing you to add anything on the web
Chewse – A marketplace for groups to easily order great food
Club W – A curated, personalized wine subscription service
CompStak – Creates transparency in commercial real estate by gathering information that is hard to find, difficult to compile, or currently unavailable
Cubie – A free messenger app for creating drawings and sharing them with friends
Cuponomia – A marketplace to search, discover, and share deals and online coupon codes in Brazil
Curious Hat – Builds mobile exploration tools for curious children
Dealflicks – Offers movie tickets and concessions for up to 60 percent off, like Priceline or Hotwire for movie theaters
Everbill – Provides an easy way to issue invoices and estimates
Femeninas – A fashion and beauty portal for women
GazeMetrix – Looks at videos and pictures and help brands measure their visibility
Hunie – A community that helps designers get constructive and honest critiques from fellow designers
Iconfinder – the world’s leading site for icons
iDreamBooks – A Rotten Tomatoes-like ratings site for books
Instamojo – A marketplace for selling your digital creations with just one click
Kickfolio – Helps brands promote their iPhone apps by embedding interactive iPhone app demos on any web page
LaunchGram – Aggregates news about products and launches coming soon in verticals such as movies, electronics, video games, and cars
Markerly – Increases publisher page views and engagement by providing next generation social sharing and discovery tools
Pick1 – Provides retargeting via automated market research
Privy – An automated digital ad agency that lets customers set a budget and promo, and automatically delivers customers
Qual Canal – Tracks conversations about TV shows in social media to deliver audience information to broadcasters, brands, and agencies
SupplyHog – Creating a better way to purchase building materials
Tealet – A marketplace that connects tea drinkers with tea growers
TouristEye – A travel planner application for the web and mobile devices
TradeBriefs – Empowers Indian professionals through industry expertise and jobs
Traity – Measures people’s reputation in worldwide 360 feedback to improve transactions between strangers
Translate Abroad – Building a suite of simple translation apps that use your smart phone camera to instantly translate text
UniPay – A mobile payment platform for Brazil
WalletKit – A SaaS platform to create, manage, and deliver digital passes to mobile wallets
Wideo – An online platform that will allow you to easily create, quickly edit, and share your own animated videos
WhoAPI – Delivers extensive information about domain data
Yesterday was demo day for the first class graduating from the Alchemist Accelerator.
Alchemist's focus is on startups monetizing by selling to enterprises.
Particularly worth attention
- SendTask demonstrated a nice task manager integrated into Gmail.
- Selligy have built a streamlined mobile toolset for sales people.
- Cambrian Genomics have a process for creating DNA at high volume and low cost.
- Xockets are building I/O accelerating hardware and software for commodity X86 servers.
Ravi Bellani and his team pulled together a well run event. As one of the mentors, it's been interesting to get to know the startups and help at a new accelerator. I've been working most closely with Xockets.
SendTask Next Gen Enterprise Task Management
SocialPandas Social Selling Platform - Find & Close Sales Deals Faster via Social Networks
Xockets Software-defined infrastructure platform for heterogenous computing
JyMob Platform to choose the best people for your jobs
Selligy A mobile service helping salespeople with their primary activity - sales meetings
Active Scaler Network-driven storage platform
ConnectBright Advocacy Marketing Platform
Cambrian Genomics DNA Laser Printer for Genome (Life) Synthesis
It's Twelfth Night, the last day of Christmas - all the decorations are packed, cards taken down, tree outside and chopped in pieces. Time for observations on the new year.
Cunning Systems and its portfolio companies are working on some of the big themes in Rackspace CTO John Engates' list :
Keen offers an analytics backend as a service to apps builders, to make it easier for them to analyse the data generated by the apps users.
Internet of Things
We've been working on a large scale systems architecture for embedded ARM based communications systems, using the cloud for back end data collection, processing, storage and presentation.
Hybrid Logic has a cloud platform for hosting service providers which is self-healing, auto scaling, and supports point-in-time restoration for disaster recovery across clouds.
SSD comes to the cloud
Expect to see new components in the storage hierarchy, in addition to SSD, in 2013.
Software as a service
Musemantik's Musicflow is improving online music creation tools.
Continuing on the theme of how to obtain funding and expertise from Silicon Valley investors (see earlier post on comparative advantage) from outside the Valley ...
My thesis, for which I get violent agreement from, for example, US Venture Partners, is that it ought to be much easier for UK companies to raise money from Silicon Valley angels and VCs. In particular, the whole process of building up an entrepreneurial mindset both in UK startups and investors would be accelerated if more UK companies followed in the well trodden path of Israeli startups, by re-incorporating in Delaware with an HQ in California once they have passed the initial proofs of traction. If they do this, they have the opportunity to be competitive in the world market, of growing at a rate which makes them an investable business, and growing their UK development teams faster.
One of the British companies with which I'm working asked "If we re-incorporate in the US, so that our headquarters are there, and we have a UK subsidiary, what does that do to EIS tax relief for our investors?" which turns out to be one of those questions which is much easier to ask than answer.
HMRC's Enterprise Investment Scheme tax relief (on both income and capital gains) rules are complex (much too complex, according to the UK Treasury Office of Tax Simplification (OTS)- calling Sir Humphrey Appleby). They are designed to help small companies raise equity finance by making it attractive for individuals to to buy their shares.
Finding an answer to the question took some digging and several exchanges with helpful lawyers. There isn't a set of standard terms, although the OTS has suggested that an electronic online clearance procedure would be useful.
It is possible to retain EIS status, and at least one company has done so. There are likely several more, but there's a general reluctance to talk about it, for fear of an ignorant backlash. (See, for example, Huddle Inc, featured in the 31 October 2012 Financial Times, which is a California corporation with a London office)
The basic requirement is that the UK company must be organized, or re-organized, so that the UK share holdings translate to their equivalent in the new US corporation, according to EIS "disposal relief:share exchanges" guidelines. The UK company (now a subsidiary of the US parent) should continue operations in the UK, from a "UK permanent establishment" as, again, defined by HMRC. HMRC will review in each case, in advance, if a company and a share issue qualifies.
Huddle’s national identity is an issue they must navigate carefully: they want to benefit from their status among London’s tech start-ups; but they also need to reassure security officials in Washington and to stay in touch with experienced investors in San Francisco. For a moment, the two fall silent. Then the squawkbox crackles: “If you cut us open, we’re British all through the middle,” Mr McLoughlin says. “But, given the type of businesses who may eventually acquire us or, given the type of customers we want to be working with, and given the money that we aim to raise that has always meant we have to have a strong US-based operation out here on the west coast.”
At the same time, Mr Mitchell says software developers are now easier to find and cheaper to hire in London than in San Francisco. “We get some of the best guys out of the banks.”
"One of the big opportunities in early stage investing is to be the API to venture capital and functional expertise for companies that aren’t already in the US. In other words, let’s use our experience with things like data, design and distribution to help foreign companies climb the learning curve faster than their peers — regardless of whether they’re targeting the US or foreign markets."
Edinburgh is, arguably, a better place to live than Boulder, Colorado. More moderate climate, much better art galleries, better transit times to more interesting cities, just as good outdoor exercise and sports activities .. etc. Yes, I'm biased. The mountains aren't so spectacular, but the castle and the fringe festivals compensate.
Edinburgh skyline - the Castle on the distant left
To make it still better, Edinburgh needs an accelerator.
There was a short burst of activity on the Global Scot LinkedIn group a couple of weeks ago, sparked by a talk from the Turing Festival in Edinburgh. Per my comment on the GlobalScot group, Edinburgh has a lot of the ingredients required to upgrade its capabilities to support startups, so as to be competitive with Boulder.
There are two things most conspicuously missing - a leader with international standing and local knowledge like David Cohen, who can apply the TechStars principles (which TechStars make available) to Edinburgh companies; and a VC firm with a public image, long term perspective, and portfolio approach like Foundry Group. The most important ingredient is the leader, and the team which builds around that person - if need be the funds can (and will) come from outside the city.
Having an entrepreneurial team running an annual startup accelerator program, and pulling together the experienced mentors who support it, with help from world class support companies, would improve the potential outcomes for Scottish technology startups.
Brad Feld recently published 'Startup Communities: Building an Entrepreneurial Ecosystem in Your City' which is well worth reading. Chapter 4, describing the different roles necessary to establish and maintain a startup community, is particularly relevant - Edinburgh has several different groups who want to think of themselves as leaders, but are really feeders. "Leaders of a startup community must be the entrepreneurs". They must be inclusive, actively involved, put the long term health of the community ahead of their own short term interests .. with "give before you get" as a guiding principal.
I'd be happy to help establish such an accelerator - part of my motivation for mentoring for the last TechStars Cloud program and for the Alchemist accelerator was to learn from experience what does and does not work.
"There is a role for grants from both government and private agencies but there is a real risk is that the startup team loses focus on revenue from paying customers and instead invests in getting better at competing for grants." Having seen this happening in Scotland, Sean Murphy is right. Not the effect intended by the government agency - they aren't even feeding, at this point, they are inhibiting failure (or pivots) which should happen.