We went over to Stanford to see the Cool Product Expo 2010 earlier this week.

Mainly, but not exclusively, student projects, with varying degrees of sophistication in the presentation.

The people with whom we spent the most time were Sifteo - they make little blocks with a display, motion sensor, and wireless communication. The blocks are aware of each other and interact. This is a spin out from the MIT Media Lab.
They are sorting out their initial production run, and expect to have product during 2010. We discussed some of the methods for protecting intellectual property while using contract manufacturing.

Driptech have a simple gravity driven above ground irrigation system - they have targeted it at developing countries, but it seems it'd be attractive to a lot of back yard vegetable growers in this country too.

Eliptigo looked like eccentric fun - imagine a cross between an elliptical exercise machine and a bicycle, or cross country skiing with inline wheels.

Carbon fiber was a common theme - Blackbird guitars make their instruments from it; the Stanford Solar Car body is made from it.

A useful couple of hours to get perspective on new developments.

Exhibitor list

Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at info@cunningsystems.com Follow me on twitter at @annejohn and @vcwatch

On reading Clay Shirky's complex business models collapse essay

Clay Shirky describes the process where 'old complexity' is super ceded by 'new simplicity', and how the businesses embedded in the old model have such difficulty adapting to the new cultural imperative. We all know of examples of this - however, the interesting question is the next stage. There are indications that some businesses are prepared to pay something for a differentiating amount of availability and reliability. Looking at Amazon's Web services would indicate that Amazon think so - people are wiling to pay extra, in both money and complexity, for load balancing across EC2 instances.

The customer here isn't the end user, it's the people providing the content to the end user.

Shirky essay
AWS load balancing

The Internet Operating System
Tim O'Reilly's article on the State of the Internet Operating System gathered a lot of attention. The 'operating system' metaphor is inaccurate - long ago, Cisco Marketing decided to call the software that runs on their routers IOS; that was overegged too, since there were a lot of other components which had to exist to make a functioning Internet - the article is a list of useful information gathering functions which can be run on the Internet, with some high level hints at how they might be correlated.

"Increasingly, application developers don't do low-level image recognition, speech recognition, location lookup, social network management and friend connect. They place high level function calls to data-rich platforms that provide these services. "

"There is a great opportunity for developers with vision to build forward-looking platforms that aim squarely at our connected future, that provide applications running on any device with access to rich new sources of intelligence and capability."

Identity, payment systems, and activity streams over time are functions which are getting more attention; search, advertising and, more recently, location have been well exploited.

State of IOS

Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at info@cunningsystems.com Follow me on twitter at @annejohn and @vcwatch

Having been interested in management and measurement of the Internet since I worked on an early prototype of HP Openview, KC Claffy is a good subject for my Ada Lovelace day posting.

KC makes the Internet visible - taking what is at base a vast signaling system composed of on-off states in optics, silicon and copper, and representing it in pictures which allow people to reason about the consequences of changes.

Whois map

Doing this requires access to data measuring Internet traffic - and discovering that much of the data which is required to understand the traffic trends is either not collected, or not available. The Internet is critical infrastructure, yet the people making decisions which affect it, particularly in the public policy space, don't have the necessary information with which to make reasonable decisions. KC presented on this topic to the Department of Congress and the Federal Communications Commission - and, perhaps as a consequence, there are data collection requirements for the recipients of broadband stimulus funds.

"She is the principal investigator for the Cooperative Association for Internet Data Analysis (CAIDA) which is based at the San Diego Supercomputer Center and provides tools and analyses to promote a robust, scalable global Internet infrastructure. As a research scientist at SDSC her research interests include the collection, analysis, and visualization of workload, routing, topology, performance, and economic data on the Internet. She has been at SDSC since 1991 and holds a Ph.D. in Computer Science from UC San Diego."

Updated (9 Dec 2010) link to KC's profile.

References
Profile
Traffic Management needs presentation(pdf)
CAIDA images
About Ada Lovelace

Measuring your business

Money isn't the only way to measure business progress, but lack of it makes developing new stuff harder ...

Fred Wilson (Union Square Ventures) has been doing a series called 'MBA Mondays' - this week about how a profit and loss statement (the P&L) works. It introduces revenue recognition, accrual accounting, gross marging, net income .. all terms you need to know to have a sensible conversation with an accountant, and to have a grasp on the money side of your business. He also strongly suggests that everyone employed by the business should get a monthly snap shot of the P&L, and should understand it - that way everyone can have a conversation from the same starting point about whether a particular project (and its associated expense) should happen.

Accrual accounting is explained in more detail in the comments; another investor explains the progression from part time book keeper through internal accountant to Controller, but says that for his best investments he ignores the acquisitions' books - instead he asks for the check book and has someone put all the numbers into QuikBooks to get a fresh start.

Understanding the P&L

Expect straight talk if you are looking for funding

Stuart Ellman from RRE Ventures has an interesting post on the differences between giving straight answers and giving 'politically correct' answers. The US has had at least a couple of generations of education where competition, at least in sports, and in some schools for academic subjects, is discouraged - instead we get the Dodo saying "everyone has won, and all must have prizes" (Alice through the Looking Glass). VCs make tradeoffs between telling entrepreneurs the right answer and being regarded as arrogant ogres.

This is rarely useful; if neither the entrepreneur or the investor can communicate directly there are going to be misunderstandings and disappointed expectations. Look out for political correctness - if the conversation is about something critical, and you suspect that you are being given the 'nice' response, have the confidence to ask if that's what's going on - in the end it will save time, money and reputation for everybody.

All shall have prizes

Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at info@cunningsystems.com Follow me on twitter at @annejohn and @vcwatch

Cisco has an excellent marketing machine, and successfully attracted the attention of the financial as well as technical press on 9 March 2010 - buying on the rumor produced a gain in the CSCO stock price from $24 to $26.

What was announced was the upgrade path for its CRS-1, the big core router which carries much of the backbone Internet traffic. After the announcement there was a good deal of griping along the lines of 'is that all ? It's just more of the same ..'

The important thing to notice is that although the sales numbers for these core routers are small, that they enable the sales, not only of the hardware which connects to them but of the businesses which sell applications and services which run data traffic over them. Having a Cisco road map for multiple 100GE connections is important to companies like Google, Amazon, and Microsoft who run many 10GE links in parallel between data centers.

ZTE is the most recent entrant to the this market, with a router supporting up to 1024 100G interfaces.
Juniper, Huawei, Alcatel-Lucent, Force-10 and Brocade are the other established competitors.

Actual new things :

Line cards
Both line cards have up to 8GB route table memory and 1 GB of packet buffer memory per side (2 GB total per line card [ingress and egress])
Forwarding processor 'supports up to 8 queues per port'
Modular services card 'supports up to 64,000 queues and 12,000 interfaces in hardware'

Interface modules
1 port 100GE
14 port 10GE LAN/WAN PHY
20 port 10GE LAN/WAN PHY

Power system

Background
Putting big routers together requires assembling a kit of parts. For the CRS-3, the kit is composed of interface modules (to which the external network copper or fiber cables connect); the forwarding and or modular service routing line cards which decide which packet goes where, fabric switching cards which connect the other cards, and one or more chassis into which to put all the hardware, along with power supplies and fans. To get beyond the 4.48 Tbps switching capacity listed as the performance figure for a single 16 slot chassis, a separate fabric card chassis is required as a second stage switch, connecting multiple chassis.

References
CSCO press release
List of CRS-3 and CRS-1 data sheets
Analyst position paper
ZTE, Shenzen - ZXR10 T8000 anouncement
Light Reading comments

Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at info@cunningsystems.com Follow me on twitter at @annejohn and @vcwatch

Selected from this week's passing stream as worth reading. There's more room here to make notes than on Twitter.

Steve Blank on early adopters
There are several serial entrepreneurs and investors who regularly post useful comment for people starting businesses. Steve Blank's Silicon Valley startup advice has a broad perspective and a specific viewpoint on how to create 'lean startups'. Finding a few early adopter customers who are able to be internal evangelists for your ideas in their organization is a critical step in getting a business going. Ideally they will also be prepared to be quoted in public as a paying customer.

"Earlyvangelists are a special breed of customers willing to take a risk on your startup’s product or service. They can actually envision its potential to solve a critical and immediate problem—and they have the budget to purchase it. Unfortunately, most customers don’t fit this profile." Post

Mark Suster's investment thesis
Mark Suster is an entrepreneur turned early stage investor who also posts useful advice.
Here he describes his investment thesis - it's unusual in having a longer than usual perspective on the investment methdology and returns he expects, and on being more willing to pay attention to the entrepreneur's need to make an early return on their first company exit.

"I have a philosophy. A thesis. An entrepreneur thesis. I’m not talk about the age old debate amongst investors whether you back entrepreneurs, markets or products (or as many people like to hedge – product / market fit). I’m unequivocal on that topic. It’s entrepreneurs I back. I’m on the record as saying I’m 70% management, 30% market." Post

Investment and startups outside the Valley
There's an ongoing discussion among the VCs in New York about what it needs to do to create more successful investments. While sitting in Silicon Valley, I have an interest in promoting the same discussion for the UK.
Stowe Boyd (who moved from the Valley to New York) observes that New York now has a critical mass of smart early stage investors, partly as a side effect of the financial meltdown - talented people no longer so eager to work at hedge funds or big banks.If this is true, it should map to London and Edinburgh. Post

Chris Dixon, also in New York, visited the Valley and observes a contrasting style - he suggests making it an ally, partner and role model. Post
Robert Scoble, who tends to be 18 months ahead of actual trends, lists characteristics which make it much easier than it used to be to have a sucessful startup somewhere other than the Valley. Post

Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at info@cunningsystems.com Follow me on twitter at @annejohn and @vcwatch

Selected from this week's passing stream as worth reading. There's more room here to make notes than on Twitter.

SGI is offering a supercomputer cloud
Rent time on dedicated servers and storage for 95 cents per core hour + 20cent /GB/month.
The Nehalem-EP Xeon 5500 quad-core cluster uses Infiniband interconnect.
The Altix 4700 Itanium-based cores use global shared memory with NUMAlink 4 interconnects.
Nvidia's Tesla GPUs or AMD FireStream GPUs are available as co-processors.
Pre-loaded application list - OpenFOAM, NUMECA, Acusolve, LS-Dyna, Gaussian, Gamess, NAMD, Gromacs, LAMMPS, DL-POLY, BLAST, FASTA, HMMER, ClustalW, OntoStudio, and SemanticMiner.

More from the Register. SGI press release.

JDSU announced an enterprise service testing module using cPacket technology
This project had started before I left cPacket in 2008, and it's encouraging to see the prototype development get to the product announcement stage. I'm an investor in cPacket Networks.

JDSU T-berd 4000 handheld device with 7" screen - product description. ESAM module press release

Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at info@cunningsystems.com Follow me on twitter at @annejohn and @vcwatch

Extracts from three days of presentations :

Asia Pacific subsea systems - adding IP routing
The presentation which I really wanted to see but missed was the Pacnet material about the changes they are making to their Asia-Pac subsea cable systems. They are going to install routers at the cable landing stations in Hong Kong, Korea and Japan so that traffic that comes in from the US doesn't have to backhaul to the city point of presence (as it does now). In a separate press release PACnet say they are going to add hosting centers next to the landing stations, using the existing power and space capacity.
NewAsia_IP
Pacnet press release

RBridges
This effort seems to have made a lot of progress since I was somewhat involved with it before leaving Cisco in 2006. There's nothing about product roadmaps in the presentation, so it's not clear how much adoption it will get. It is worth reading if you have an interest in improved bi-sectional bandwidth in data centers.
Rbridge

BCP docs collection
Aaron Hughes gave a lighting talk about a useful looking project to collect and maintain Best Current Practices documents - this is the sort of thing that one would think already existed, but it doesn't seem to fit in any of the current charters for Nanog, ARIN, or the IETF.
BCP docs project

BGP updates
There were a set of presentations on Tuesday afternoon about modifications and improvements to BGP. Of these, Dave Ward's introduction to Add Paths is the place to start.
It's good to see some impetus towards reducing BGP convergence times, having tried to get some work moved forward on this in 2001 - yes, Dave came to those meetings, when we were both at Cisco. BGP is so fundamental to Internet connectivity that changing anything about it, for even minor improvements, takes huge amounts of patience and persistence as well as technical background.

"ADD-PATH IN A NUTSHELL
Add a path identifier as part of the NLRI (Network Layer Reachability Information)
- Very similar to Route Distinguisher in RFC 2547/4364 VPNs, but
applicable to all address families"
Add-Path introduction

IX cost analysis model
If you are deciding whether it's worth connecting to an Internet Exchange point, Marty Hannigan's lightning talk provides a model for the cost analysis.
IX model

DNSSEC
The signed root is due to go live on July 1 2010.
Keith Mitchell described the deployment plan for F-root, Duanne Wessels presented analysis of the changes in traffic patterns for the completed deployments at L-root and A-root. Current deployments are using DURZ, a deliberately undeployable root zone, for testing during the transition. OARC, (the DNS Operations, Analysis and Research Centre) has developed a test to run to see whether DNSSEC packets are likely to cause issues for your network.
F-root DNSSEC deployment
Traffic analysis for DNSSEC transition

Routing history tool
The Wednesday lightning talks were about tools - the most useful of the RIPE labs tools looks to be a new 'resource explainer' - for looking at current and past history of routing for a particular IP address.
Other RIPE lab tools

ARIN are building a new WhoIs tool,as a RESTful web service - it's not quite in production yet, but the demo is at http://whoisrws-demo.arin.net/ui

The quality of the remotely accessible audio and video for this meeting was not nearly so good as that for Nanog47, in Dearborn. That means one loses the sense of being 'almost in the audience' - and interferes significantly with the ability to appreciate the content. The next meeting is in San Francisco, June 13 - 16 2010, which should make it easier to go in person.

References
Agenda - links to all the pdfs, and will get links to video
http://www.nanog.org/meetings/nanog48/agenda.php

Companies don't fit comfortably inside countries anymore. It used to be that multinationals were unusual - GE, HP, and IBM each have more revenue that the GDP of some smaller countries; their employees have more in common with each other than they do with many of the people in the country where they are located.

As travel costs and communications costs have dropped, it is easier for companies to address a global market. This affects almost every business, even the kind of small company service business which used to be secure from global competition. Plumbing is a location specific business, but plumbers, (the 'Polish plumber' so feared by the French last year) and plumbing supplies, are international. Emergency medical treatment must be local, but Brazil, India, Mexico and the UK compete in the elective surgery market.

This also means that whether you like it or not, your company is in competition with the rest of the world, not just with the companies in your local geography. The digital media market is a excellent example. Realtime Worlds (Grand Theft Auto franchise) has customers everywhere; headquarters in Dundee, Scotland; and investors in Dublin, Dallas, and Menlo Park.

This has immediate consequence for your business - your operation is affected by several tax regimes, by different legal systems, by foreign exchange rates, and international politics.

It has consequences for individuals, too - people self-identify with their peers in the communities where they participate, independent of location and of nation-state.

Think of it as the modern multivariant practice of comparative advantage, with many more countries, more granular products and much faster trading velocity than in the original. If you can not use it to your advantage, it will be used against you.

References:
Polish Plumber
Theory of Comparative Advantage

Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at info@cunningsystems.com

Bill Burnham made an interesting observation at the end of last year ..he was discussing the change in the investment climate for Consumer Internet companies (typically, companies who would like to be the next Facebook or Twitter, and who serve the same set of consumers). Startup costs for such companies are low, and it is possible for them to quickly get to a point where they have rapid traction (defined as millions of users) - if they don't get traction the VCs aren't interested, if they do there's a rush to invest as much money as the company will take, since the VCs typically have big funds.

Money to get to the point of achieving traction is coming from early stage seed funds, and from angels. " VCs increasingly perceive the market success of Consumer Startups to be almost a Random Walk."

Cunning Systems is interested in helping investors who would like to reduce their investment risk by taking technical advice about the feasibility of the proposals which they are considering. When developing any business idea there are trade offs to be made between costs, of either capital or labor, and availability. Ideas which use Internet infrastructure have great capacity to be developed in small steps, with the possibility of more or less public testing and validation at each step. The systems architecture and the choice of platform affect the relationship between gaining traction and burning through money.

For example, we keep a close eye on the capabilities of the various hosting and cloud services providers - given requirements, we can advise on likely performance and costs when using the growing list of Amazon Web Services, the Rackspace Cloud, or Linode. Not all businesses can afford a success disaster (so many people want to see what is on offer that the site falls over) - the Twitter Fail Whale syndrome.

Paying for advice on this topic could save several days of investigation.

References:

http://billburnham.blogs.com/burnhamsbeat/2009/12/the-great-abdication-c...

Cunning Systems evaluates product and service ideas in computing and communications. If you would like to discuss an idea, contact us at info@cunningsystems.com