Monday, November 8, 2010

I'll be at Incubate 2.0; there's a crowdfunding panel!

I'm excited that Incubate 2.0, held during Global Entrepreneurship Week, has a special panel focusing on crowdfunding, moderated by Robert Scoble.  I'll be attending the event and networking; if you want to chat, drop me a note or catch me at the event.  The crowdfunding panel is on Day 1 (Nov 17th) at 2:30 pm.  I may have a few copies of my new paperback book on crowdfunding, to hand out.


Below are the event details, verbatim from Incubate 2.0.


-Kevin
Disclosure: no positions
------------------------------

Whether you are running a local incubator, building an angel network or in charge of an economic development agency, your main problem is: How do I help my entrepreneurs succeed?

Incubate 2.0 brings you answers.

Over the last decade, entrepreneurs have not only created successful businesses but applied their understanding of technology, their vision of the future, and their passion for growth to help fellow entrepreneurs. The innovations that entrepreneurs have created for each other include global mentoring programs, angel funds, massive networking events and virtual incubators, among others.

Incubate 2.0 will showcase the most cutting-edge programs that help business founders start and grow startups. Join us on November 17-18, 2010 at the HP Executive Briefing Center in Cupertino for the first event of its kind, in order to gain insight into what works and what does not, meet the founders of these programs, and meet business leaders that have turned them into a global successes.

When: November 17-18, 2010 - during Global Entrepreneurship Week
Where: HP Executive Briefing Center in Cupertino, CA
Who should participate:
  • active organizers that have lead activities to help entrepreneurs and want to engage with other organizers, extend their network and gain useful insights
  • entrepreneurs and local leaders that have interest in replicating initiatives in their countries
  • angels and VC with interest in new ways of working with entrepreneurs around the world
  • government representatives and NGOs with interest in promoting entrepreneurship in their countries
  • university representatives with interest learning how Universities can play a important and sustainable role in the entrepreneurial ecosystem
  • executives from companies with interest in gaining access to early stage innovation and a global market of early adaptors
  • journalists interested in witnessing the rise of a culture of global entrepreneurship
More info at www.incubate2.com

Thursday, October 28, 2010

The Crowdfunding Revolution book now available!

All,

I've been busy for the last while, writing a book The Crowdfunding Revolution, which is now available in ebook format on Amazon, Scribd, and very soon B&N NOOK.  I welcome you to have a read; it's been quite a journey writing it.  Any press, putting it on suggested reading lists, etc, are all very helpful.  I'd really like to get the word out.

Disclosure: no positions

Tuesday, August 10, 2010

Bumping apps between smartphones: note to Apple/Google et al

Bump for iPhone or Android shows how powerful and convenient it can be, exchanging info between mobile devices of willing parties.  So why not "bump" apps too?

At a recent Mobile Monday networking event in San Francisco, the panel talked quite a bit about various themes to get traction for an app, all which focused on online techniques (virality, getting featured, targeting, etc).

So where're the killer traction techniques which involve physical presence?  It was ironic to be at a physical networking event, with an audience of people all having smartphones talking shop about apps, and no great way to conveniently share apps.  There's a real parallel here to an inefficiency that Bump solves for exchanging info -- it takes time and imposes a real disruption when you want to download an app which someone else exposes you to.  So a lot of people say they'll try out an app "later" and never do.  What would be really cool to see, is the concept of Bump applied to apps.  The sender selects one or more apps to "send", and the recipient ok's the downloads.  Rather than the app being transferred from device to device, it's actually downloaded from the relevant app store.  The devices wouldn't even have to be of the same platform or app store, as long as the app had releases for both.

This then opens up some interesting incentive models, like getting commissions on sales of apps (for instigating downloads of paid apps), or a percentage of use driven sales (like advertising).  This might be especially attractive, if the pay-outs where higher to the earlier bumpers.

So a note to Apple, Google, RIM, other mobile platform vendors (or perhaps a mobile app startup), how about app bumping to unlock the power of physical networking for app traction?  And to all, could it be possible to make a living spotting high potential apps early, and becoming a "power bumper"?

Disclosure: no positions

Sunday, August 1, 2010

The Moller Skycar should be a sky-van

The Moller Skycar is one of the all-time top stories at the intersections of dreams, vision & uber-cool technology.  And if there were an award for the longest-running in this category, it would be a top contender.  Barring the historically momentary reality-distortion-field that was the Segway scooter (a.k.a. "IT"), which purportedly would have cities built around it, it's hard to think of another story which would more radically advance the way we transit and live.

But the Moller Skycar efforts look to me to be surfing the wrong initial wave.  It feels like a classic case of over-focus on delivering a version 5.0 as the 1st release.  Why develop an initial market for Skycars based on passenger transportation?  Executing a huge dream is already up against the exponential laws of complexity.  Why not push the passenger Skycar to a later-term goal, and 1st develop a completely computer operated sky-van for transporting packages and goods?  This would skirt a lot of complexity and issues related to passenger air travel?  E.g.:
  • No windows.
  • Less design dedicated to crash protection and passenger safety.
  • Less extra fuel margins of safety.
  • Opportunity for ground/rooftop-based launch acceleration.  A lot of power & fuel (and design) is needed for take-off.  This overhead can be off-loaded to terrestrial launch mechanisms.  Examples might include catapults or rapid-descents from high rooftops to achieve more wing-efficient velocities.
  • Launch and landing could be sub-optimal locations for passengers, but in lower risk hubs where package/goods delivery could connect with other inter-modal forms.
  • Goods delivery is subject to more optimal packing & routing algorithms and opens up some interesting auction mechanics.
  • Cheaper, more abrupt emergency/crash mechanisms.
  • An easier sell vis-a-vis public perceptions of risk.
  • The technology can be proven and scaled in lower-risk areas first.
This is not to say that Moller's current plans won't succeed in serving some markets.  Segway is doing fine shuttling employees and parcels across warehouses, is fun for tourists and a great way to for the police force to get around parks efficiently.  But it seems to me that the company that transforms modern day transit to a Jetsons-like age will 1st offer something more pragmatically disruptive, and then surf that wave to the future of passenger travel.

And in the Big Hairy Audacious Goals (BHAG) dimension, how about "the next Tesla" startup being a sky-van?  Maybe license components from Moller, Tesla, and the myriad more established industry players like Cessna/Bell Helicopter, Gulfstream, Boeing, et al.  Might it make sense to design in modularity, analogous to the "tractor trailer" concept, where the aircraft is separate from the cargo containers?

Disclosure: no positions

Thursday, July 1, 2010

The Big Bang of Crowdfunding: Startups as a Public Asset Class

This is Part 3 of "The New Face of Venture Capital" series.  It talks about the imminent "big bang" of crowd-funding in startups and content creation due to startups becoming a public asset class.  When Wall Street gets involved, things move.  This could easily be a 1000x force-multiplier for crowd-funding.  Part 1 is here and Part 2 is here.


I have many deeper thoughts. Feel free to contact me about them.

Disclosure: related IP, no positions

Friday, June 18, 2010

Podcast on Venture Capital and Crowd Funding

I was recently featured on a GrowVC podcast regarding the state of affairs with Venture Capital, and talked a lot about the trend towards crowd-facilitated startup creation & crowd-funding in general.

The talk turned out really well, I encourage you to give it a listen.

Disclosure: no positions

Monday, June 7, 2010

App drag-and-drop between devices: cross-device continuity is the future of the UI

The next "killer app" across all forms of end-user devices (smart-phones, tablets, HDTVs, PCs, etc) is the ability to "drag-and-drop" any application between any device, giving a seamless and continuous UI experience.  In effect, this mobilizes mobile and web apps, and makes all devices which a given user interfaces with, part of an overall continuous UI tapestry.

A quick look at the the direction in HDTVs, sets the stage for this next wave of UI innovation.  An important trend in newer model HDTVs is to offer apps/widgets, which can be downloaded/upgraded from an online "app store" as needed.  You name it: video Skype, Hulu, Netflix, Twitter, whatever.  Whether these be native apps or "web apps", they ought to evoke parallels to every other modern type of mobile or desktop platform.  What's occurring is none other than a convergence of end-user platforms, each with their own strengths.  But the key is that many of the same apps are offered across all possible platforms.

What is now needed, before we get too deep in, is an API for seamless "live" migration of applications across platforms.  You can think of this as real-time sync of applications with the application closing on one device and starting at the same context (and similar settings) on the next device.  And there's really nothing preventing this from occurring across various types of platforms.  It could of course be platform dependent, but following is a high level way to look at "UI continuity" which has the widest reach -- and thus the most value to the user.

First, the user would initialize (once) a sync API for any given device.  Thereafter, a mechanism (e.g. a desktop icon per-device, in-app menu item, etc.) would allow the user to request to mobilize a given app between devices.  Following this user request, the device OS would request context information be exchanged between similar apps (helps if the app is already installed on each device, but this could also evoke an auto-install).  One could think of this exchange as an XML file describing things such as, in the case of a video, a URL to the video content, a place-mark relating to where in the content the user left off, app settings, etc.  Once the exchange completed, the app on the destination device could take over, giving the feel of continuity to the user.  This kind of "migration" does not require a full environment sync.  Nor does it mandate app/OS version compatibility.  In fact, it allows the app on the destination device to adapt the app context to the new environment, and perhaps even be a different (version of an) app.

To the user, it means that at one moment they're surfing the web on their tablet, and at the next they migrate some apps to their HDTV.  Then bump them to the graphical console in their automobile.  Then to their work PC.  Or even to a projector for a demo.  For apps which are desired to run continuously, why not bump them to the "cloud" while a mobile device goes offline, for example?

I believe this level of continuity would revolutionize the user experience and give whoever implements it, a strong advantage.  Google, with its motivations to put Android and ChromeOS on every type of popular user device, and strong back-end infrastructure, would be a likely 1st adopter.  Intel & ARM would also have a vested interest in selling their processor designs into next-generation devices which support this.  Only time will tell whether Apple, which generally exerts more control over its ecosystem would be quick to adopt.  It would be cool to be able to do this, even if only across iPhone/iPad/Apple TV.  In any case, it's important that this API gets baked in early, because app developers need to hook into it now.

And fwiw, perhaps there's room for a 3rd party app which creates a near-term nexus (API framework with authentication etc) to intermediate this level of inter-device app mobility.  Would make a good M&A target...

Disclosure: no positions

Tuesday, June 1, 2010

Pixel Qi game-changer: transforms tablets & portables into a Kindle!

If you ever wished that screens on tablets (iPad, Android, etc) could switch to a Kindle-like e-paper mode (for power savings, ease of reading), yet still have all the benefits of standard LCD for power browsing & apps, early seasons greetings!  The startup Pixel Qi, in some ways a spin-off from the OLPC project, is demoing it's trans-reflective (transmissive-reflective hybrid) screens at Computex 2010 and is nearing production, outsourced at major production facilities.

When there's enough ambient light, the screens can act in a passive reflective mode, much like e-paper devices such as the Kindle from Amazon (AMZN).  This is great for a high-resolution black & white mode that can operate even in strong outdoor sunlight, enhanced with a form of "color hinting".  But they can also operate in a more familiar active back-lit chromatic mode of LCDs.

This is a real game-changer for nearly every type of mobile device, but especially for transforming the future of tablets (think iPad, Android), netbooks and convertibles (think net/note-books whose screens swivel to form a tablet) into e-readers with all the functionality of a portable PC!

One of the issues with Amazon's Kindle (and similar devices) is that the electrophoretic displays have a very slow refresh rate.  The result is that it's fine for e-reading, but it wouldn't work well for other functionalities such as video (think Harry-Potter-esque e-books) or even general application touch interfaces (which need quick UI feedback).  So one has to wonder; either Amazon et al have to upgrade the Kindle to be essentially a fully functional Android-like tablet, or the future of e-readers is about to be subsumed by an ebook app on fully functional portable devices with state-of-the-art displays.  This bodes very well for Apple (AAPL), Google (GOOG), and potential netbook partners such as Acer.  But for Amazon, one has to wonder given the recent pining of publishers for a standard ebook format, if they'll hold their prowess in the ebook space...

As an aside, this trend also opens the door for some exciting re-branding opportunities for devices such as the FaceBook, the TwitterPad, etc.  ;-)

Disclosure: no positions

Sunday, May 30, 2010

Goby: the best search engine for what's going on

Imagine if Google was good at allowing you to search for what's going on.  Then, it'd look like Goby.

This area of search is notoriously difficult to serve well using a standard search engine, like from Google (GOOG) or Yahoo (YHOO).  Most users, myself included, hop around to a multitude of bookmarked sites which list interesting events, as well as track related email lists in the hopes that we are presented with a reasonable representation of what's going on.  It's actually a lot of work, and who knows how many cool events slip through the cracks using this form of "manual search".  Worse yet, if you travel somewhere (even a short drive), most of your information is no longer relevant to your new locale.

In a way, almost all problems with search of "what's going on?" and "what to do?" can be summarized as contextual problems.  One such problem with generic search engines is that they don't understand the context of the user (what they're trying to find).  As a consequence, the user is deluged with irrelevant content.  Another huge problem is that crawled content has a lot of arbitrarily formatted yet helpful planning information which needs to be contextualized, before being presented to a search user.  For examples, location, phone numbers, and event dates and times are key pieces of info which need to be presented and factored into the search, but are likely listed in very arbitrary ways which need intelligent "contextualization" by the search engine.  Goby aims to solve these kinds of problems.  And it does it with an uber-simplistic user interface.

Besides this search vertical being incredibly under-served, it should also be very monitizable for Goby, as the net result of "what to do" searches is that people go places and spend money.  I would think their search advertising premiums would be quite good.  Google, take note...

Disclosure: no positions

Friday, May 28, 2010

"Ask Twitter": incentive driven responses for social networks

Now here's a startup idea that I'd love to see materialize: allow people to embed small financial incentives to questions asked on twitter.  Would be great to plug into PayPal (EBAY), Kachingle or other micro-payment play.  Google (GOOG), you were looking for a way to out-do twitter, no?

There's all this latent power of social networks, formed by people with at least a little disposable income and who have followers in their networks.  In the same way that someone would jump on Yelp to find out where to eat or go, why not send a query to your Twitter or Facebook networks?  They would potentially have more context information about you and your preferences than would say be known by Yelp in it's efforts to direct you to a particular set of venues.  But what makes it more interesting is that a person may want to trade off money for time -- for example if they don't have the time or wireless bandwidth to play around with surfing the web or using mobile apps, they may be interested in offering a small monetary incentive for a prompt and appropriate response (which they can check at their convenience).

So let's say someone is on travel and embeds a $0.50 offer in a tweet or Facebook message to the first-best response to a query such as "where can I get a healthy dinner around here?"  Followers (direct or ultimately indirectly dialed in through automatic mechanisms looking for such queries) could then message back possible solutions.  At their convenience, the requester could look for interesting responses.  It would be up to them to decide who to pay, and that payment could then potentially be recorded with a message to give transparency and show fairness.  There's also no reason they couldn't pay multiple parties (or none at all).

This would of course open up the possibility of a network of people who work full or part time, tapped into real-time for-pay-only query feeds from social networking sites -- indirect followers, if you will.  And potentially even AI based engines, which could scale beyond the human factor.  The key is that a person's past messages and profile give a lot of extra context information that can be factored into giving much higher quality responses.  And by way of people getting payed out (or not) for responding, a rating system could be formulated.

Besides a low barrier-to-use micro-payment system to facilitate this, one thing that I think would be really helpful is to allow voice queries, for people on the go.  So for example, how about a Twitter app (FB and other social network enabled would be nice) that allows one to send voice tweets?  Pumping these messages through something like Google's voice-to-text, would then allow the followers to see text (thus scaling the query better).  There really aren't many Twitter apps that do voice tweets though -- one of the best Twitter apps I found, for instance, that supports voice tweets is Tweet for iPhone/iPad.  With some extra plumbing on both the app and back-end infrastructure side, a truly interesting incentive driven service for social networks could be created, which is highly monetizable.  And btw, if you're thinking "wouldn't this also be really interesting for various marketing campaigns and other crowd-sourced information gathering?", then we're thinking the same things...


Disclosure: no positions

Saturday, May 22, 2010

Best of Finovate Spring 2010 in San Francisco

I spent most of the day at this year's FinovateSpring 2010 interviewing and chatting with many of the players.  Rather than summarize my thoughts on all the companies I talked with, I've culled the list to what I believe represents eight of the more promising companies.  Not all companies demonstrated or exhibited; some only attended.

  1. Blippy: Essentially, "twitter for purchases".  Blippy is sure to elicit reactions of disbelief in much the same way that Twitter did, but it's revenue generating potential (IMO) far outweighs anything like Twitter.  In a lot of ways, Twitter popularized the meme of publicizing one's private life minutia in real-time. Blippy piggy-backs on this now "market-proven" meme, and allows people to publicize their purchases in real-time.  It's hard to stop thinking about powerful ways which having this kind of information can be used by real business: brand placement (what kind of cigar does Brad Pitt buy?), real-time viral marketing campaigns to drive purchase analytics instead of vice versa, a whole new form of search (for purchases) with time machine, location, and other rich demographic data (the next search startup ?), product distribution chain optimizations, etc.  It almost goes without saying that rather than tweets, which may or may not have commercial value, blippy represents real purchase transactions.  And btw, you can channel your blippy feed to Twitter.  What should we call these blippy-tweets?  I proposed "bleets", which the Blippy rep seemed to really like.  So I'm hereby claiming bragging rights if it catches.  :)  Btw VCs, if you missed Twitter, than quit crying about it and get into Blippy for heaven's sake.  Feels like a much bigger score to me.  Amazon (AMZN), eBay (EBAY), Google (GOOG) et al ought to be paying attention.
  2. HiddenLevers: If recent financial history has taught us anything, it's that macro events can have monumentally large effects on one's portfolio.  Currently, macro trumps nearly everything else, and without understanding & modeling macro changes, you don't have a clue of true risk in your portfolio.  Well, FINALLY, after talking with a lot of plays surrounding optimizing portfolio management, I found HiddenLevers.  They get this and let you scenario-ize macro events to truly analyze your portfolio.  I ran into a HiddenLevers founder, though they were only attending for this Spring's conference.  Why I think they're really powerful is because I see them as much more than a site.  This is a service which could plug into nearly every other type of portfolio management system/app/site, whether used by big money or retail investors.  Think about that for a moment.  If you want one to watch for at FinovateFall 2010, look for HiddenLevers.  And for the VCs, don't wait until Fall.  For starters, TD Ameritrade (AMTD), E-Trade (ETFC), Charles Schwab (SCHW), TheStreet (TSCM) and every other financial brokerage & news site ought to pay attention.
  3. Kabbage: Financing exclusively for high volume online sellers.  They can tap directly into marketplace data to determine credit worthiness of sellers.  And lending decisions can be made nearly real-time. Vis-a-vis standard bank lending, it's hard to see how Kabbage has any competition.  This one deserves a huge "Duh!  Why wasn't someone already doing this?"  With the sheer number of online sellers which could join the "Kabbage Patch", it's hard to overstate the opportunity here.
  4. RiskKey: What if compliance management was more continuous than just periodic audits, more collaborative, and yet centralized to a web based system?  Then it'd look a lot like RiskKey.  The result is that management would be hit with a lot less costly surprises, and compliance quality would increase due to a broader set of inputs.  Initially, RiskKey is targeting the banking world, but I don't see why this wouldn't be a big hit in the ever-expanding health care industry.  They may not have had the sexiest offering at Finovate, but they're addressing some big-ticket pain reduction.
  5. PerkStreet: Now here's a novel idea, get perks while spending responsibly on your DEBIT card.  They save enough by not having branch bank locations, that they can afford to make money and give you back some of the savings (which was your money to start with) via perks.  Shouldn't every college brand one of these PerkStreet cards and encourage students to start off on the right financial foot?  Currently, perks are tax-free.  I'm not sure how long that's going to last, but get while the getting's good.  Anyways, a hint for colleges; some of those perks should be for buying next semester's books.  And what a boon for charities if perks could be donated to the card holder's selected favorites.  Maybe even brand cards with charity monikers, for those who are outwardly charitable.
  6. FTRANS: Rather than each B2B business manually managing credit and accounts receivable (which can be daunting given how many customers they may have), these functions are offloaded to FTRANS.  The result is less costs to the B2B business and the acceleration of the time it takes to receive cash for sales from 50 days to 5 days.  This is a true economy of scale play, and one that is sorely needed.  Anything that can remove inefficiencies in business credit, is likely to help lubricate the economy.
  7. Wikinvest: What Wikipedia did to encyclopedias, Wikinvest aims to do to all information that is investment related.  This is another application of crowdsourcing (see for example, my prezo on the future of Venture Capital being crowdsourced).  Thanks to Wikipedia popularizing/proving the value of crowdsourcing, I don't have to here.  Another thing Wikinvest takes aim at is the UI for your portfolio.  Their UI is pretty slick, and it'd be nice to think in terms of living within one UI which fronts for whatever your actual brokerage account may be.  But, until they can plug into brokerage accounts in an active way (e.g. when you can execute trades from within Wikinvest), you'll end up having two UIs.  If & when that happens, I'd say they'll really strengthen their proposition and gain yet more traction and participation.
  8. WorkLight: In a nutshell, they wrap up the web app logic for online banking / financial services / e-commerce, and make it portable across mobile devices and your web browser, so that each application vendor does not have to re-invent it.  This is the part of an app that you really want well tested, secure and of course portable.  So it makes sense to turn to a company who does this for a living. WorkLight is also an economy of scale play, and lets companies focus on creating the parts of applications which relate to their value.  The net result: cheaper development, more trust-worthy apps, and portability across myriad portable and desktop devices.
Finovate is really picking up steam, and I look forward to the even larger FinovateFall 2010 in NYC.

Disclosure: no positions

Wednesday, March 31, 2010

The New Face of Venture Capital, Part 2: Rise of Crowdfunding

This is Part 2 of a presentation I've created to help Limited Partners and entrepreneurs understand the future of successful Venture Capital. Part 1 is here. Part 2 explains why conventional VC networks & outlier identification produce poor returns, and how crowdsourcing/crowdfunding will be used to augment or replace them and to create high-return VC of the future.


I have many deeper throughts. Feel free to contact me about them. If you find this useful, feel free to pass the word.

Disclosure: related IP, no positions

Monday, March 8, 2010

The coming "Finder's Economy": intermediation of life online

While a vast majority of the media seems preoccupied with what the Next Big Thing will be online, there is scarcely any coverage of a monster future trend which will sweep across nearly all interesting online sites. And it represents a multi-billion dollar market, which will transform and touch not only the way that people utilize online services, but also online search.

Before diving in, a quick look at the macro economics picture will set the stage for what I call the upcoming "Finder's Economy". If you at all believe that our planet's exponentially growing human population (~7 billion) is running into carrying capacity and resource constraint issues, then it follows that we will consume incrementally less per-person, over time. And stuff will become more expensive. So how do we transform a world of billions from a consumption to a services economy? This is the environment which will yield the "Finder's Economy".

The Finder's Economy is to online, what "gophers" (go for this, go for that), secretaries, agents, personal assistants and the like are to your life offline. Except that many of an online finder's activities can be done remotely, and in a very competitive environment. This is best explained by a set of examples because it crosses so many boundaries.

Example#1: Dating. Basic: finders within a dating site do searches for you and locate suitable dating prospects. If you like their finds, you tip them. If you have successful dates, you tip them even more. Let finders compete on speed & quality. Or stick with a given finder. Advanced: you given certain finders access to a calender, they find you dates and book them for you, and tell you where/when to meet. You just show up. Even better, they post your profile to as many sites as you want, and do searches on all the sites. Maybe they even ask (unpleasant) questions for you, do diligence, etc. You exchange your money for their time. Which will be the 1st online site to implement this to differentiate, and to skim some commissions on the tips/fees? [e.g. match.com, Yahoo! Personals?(YHOO)]

Example#2: Music. You describe your tastes and give examples of music on your play list. Finders scour the tune-o-sphere, and find awesome new music. They do all the work listening to samples, sorting through new releases, etc. They produce, you tip. [e.g. iTunes (AAPL)?]

Example#3: Gifts. It can be challenging coming up with exciting gift ideas. One possibility is to have a profile of the people who you'd like to buy gifts for along with a history of stuff already purchased for them. Combine that with a calendar of birthdays, anniversaries, etc, and it'd be really helpful to have some creative types with time on their hands make some suggestions. Extra credit if they buy the items, gift wrap them, and send a nice card too. :) This kind of Finder's business scales for the good ones, because you can have a lot of clients and select from a set portfolio of items. [e.g. Amazon(AMZN), eBay(EBAY), Google(GOOG)]

Example#4: Fun events/restaurants. I spend quite a bit of time myself dialing into what cool and interesting events are going on. I'd pay to have someone scanning all of my "what's going on" sites periodically, and notifying me of events which fit my profile. [e.g. Yelp, meetup.com, ...]

Example#5: Competitive diligence. These days, new competition springs up by the minute, and in any part of the Globe. Finders could be a valuable resource, adding a near real-time addition to a company's competitive strategy. [e.g. VCs, startups]

Example#6: Job hunting. Finders could transform the world of recruiting from a more limited scope retainer-based placement, to a giant scope many-to-many tip-based proposition. [e.g. LinkedIn, monster.com(MWW), ...]

Etc, etc, etc.

You get the idea. How the Finder's Economy will play out in implementation, I believe will be many fold. First, you'll see central finder marketplaces spring up, where you can seek the services of finders for many kinds of things. Secondly, key sites will implement their own finder ecosystems where they can exert their own enforcement and control. And of course, in transition, I imagine people will find hacks to tag legacy systems so that finders know when a person seeks their services. Tip-jar systems will be extremely important to enable a global finder's economy, as this is a low friction/commitment mechanism to transact finder activities. And the basis for healthy competition.

Why I believe this will drastically effect online search, is because A) the source of the searching will shift from person to finder, B) many of these kinds of searches are very vertical rather than your standard Google search, and C) the scalability of a given search can be massive if a finder is leveraging it to scale to many people at the same time. Thus some heavy-weight finders could have large impacts, skewing search advertising in a way we haven't seen before. Even what we know as a Google search today, could be finder-ized. Type in a description of what you are looking for, let someone else wade through the Internet to zero in on it, for a tip. The results are emailed back to you. Would you tip $0.25 not to spend half an hour yourself?

To be sure, there are obviously many issues to sort out w.r.t. to using finders: privacy, data security, cross-border business, potential skewing via kick-backs, etc. I have a number of creative solutions in mind myself. But, I'll leave that for another time...

What this means to existing major online players such as Yahoo! (YHOO), Google (GOOG), Amazon(AMZN), eBay(EBAY), Apple (AAPL) et al, is that whichever implements effective intermediation ecosystems could monumentally tip the balance of power & market share in their favors. All in a current market place where the players go head-to-head with ever decreasing differentiation. But it also lays the road work for a major disruption from the startup world, to use a much more effective Finder's Economy based play to displace the incumbents. The big company bone-yard is littered with those that don't recognize and embrace new trends quickly.

Disclosure: no positions

Thursday, March 4, 2010

The New Face of Venture Capital : a roadmap for LPs and entrepreneurs

This is a presentation I've created to help Limited Partners and entrepreneurs alike, wrought from a life in startups and studying the business of innovation. It's an overview of forces at work, driving sub-par returns in the Venture Capital asset class, and identifies the attributes of VC which will yield viable startups and stronger returns to LPs.

Currently, the IRR across the VC industry is dismal, and will continue to be so, except for those innovative firms who adapt and pioneer the necessary new model. If you ask entrepreneurs, they will tell you VC is broken, because it doesn't serve their needs. And LPs know it by way of poor returns. The global financial system collapse has masked many of the secular trends in VC and technology innovation, which were destined to collide with an archaic VC industry in any case. The biggest such trend, rate of change, is unrelenting and driving radical change in the industry. Sadly, a number of VCs I've talked with don't even see this.

If you find this useful, feel free to pass the word, especially to the LP community. And contact me with further thoughts.

Disclosure: no positions

Sunday, January 3, 2010

50 Trends for 2010 and Beyond. Predictions from TrendCaller.com

  1. Global warming shifts focus from CO2 to soot. While it's fairly well agreed that CO2 has a warming effect, the frequency absorption effect diminishes for each marginal quantity. Soot has been recognized as a potentially more pressing problem in many recent articles, including those from NASA, Scientific American, BusinessWeek and U.S. News. Soot has a nasty effect of accelerating thawing of ice & snow, as well as inducing precipitation, thus exposing the underlying darker layers to absorb more heat. I even did my own study from GISTEMP data here, showing a potential for soot as a warming accelerator. Perhaps COP16 should be about soot & particulate reduction? Nice health care kicker.
  2. Major GMO crop blights. Some GMO crops will experience catastrophic disease, pest and weed infestations due to lack of genetic diversity. In case you're wondering, in the U.S., GMO accounts for upwards of 90% of soy, 60% of cotton, and 50% of corn. This will send shock-waves through the food-chain, and an enormous backlash against GMO products and companies who produce them.
  3. Continued crop yield downside due to global warming. Not only does warming displace and change weather & precipitation patterns, but it also begins the mountain snow melt earlier in the year than it should, delivering less melt-water in the Spring than expected.
  4. Rare-Earth Elements (REEs) crisis. REEs are used in many interesting products from iPhones to electric motors & generators to catalytic converters. A Toyota Prius has 16kg of REEs. Unfortunately, REE mines are concentrated in China, and they're clamping down on exports. REEs are also the "dirty secret" of clean and other technologies as mining them has some potentially awful externalities such as pollution and radiation. Anywhere they exist and are mined, expect export controls, politics, and hedge funds to play. Small dislocations in politically undiversified REE markets mean huge side effects, and soon at that.
  5. Designer babies will become mainstream. The range of genetic screening tests will increase while the costs of screening will decrease, to the point that designer IVF and prenatal screening will become mainstream. Based on desires of parents to have competitive and healthy children, designer baby screening will be compelling if not feel necessary to parents who can afford it. It may well be incentivized by the health care industry.
  6. Postnatal genetic screening: first incentivized, then mandatory. Genetic screening will similarly be applied after birth, ostensibly to catch potential problems early. At first it will be optional and incentivized. Ultimately, it will be mandatory as a way to holistically "drive down health care costs".
  7. Dating sites will pick up on the genetic screening craze. Have your DNA associated with your dating profile. Potential mates will have far more search criteria to work with.
  8. Online medical records will enable huge wave of discoveries and innovations. A vast reserve of (potentially anonymized) data is a fertile ground of new and more accurate studies. The more normalized and complete the data is, the greater the innovation. Expect a big push for various interests to get wedged in between the data and its consumers. Such "brokering" will likely restrict innovation and tend to favor bigger money and political interests. Without such impediments, new innovations would potentially reduce health care costs by a significant amount and stoke a life sciences boom.
  9. A fat reduction pill will be discovered. Health effects will likely be devastating as people will then continue to do more of what's bad for them without the aesthetic ramifications.
  10. Out with fission, in fusion. I've had a number of researchers tell me that the viability of fusion is a matter of financing more than time. A fusion startup, General Fusion, was already funded a couple years ago with a 5-year horizon. 12-year radiation half life, what's not to like. The edge goes to the country that attracts the most talent and puts in the most financing.
  11. The mutual and hedge fund industry will lose ground to online money managers. A new model of online site (like kaChing) lets money managers with good picks and research float to the top, and you can actively mirror their portfolio in your account. Money managers who are really good can go virtual and use the scalability and network effect to their advantage. The added transparency, real-time reporting and research, and potential interaction between clients and their money managers is very attractive. Additionally, the online model will be supplemented with a trend towards 3rd parties who provide services between clients and money managers, such as rotating between managers as macro climates change, fund-of-fund style management, performance tracking, etc. Add in that an API will allow for algorithmic trading, and things get really interesting.
  12. The room-mate lifestyle will become the norm in countries with over-leveraged housing markets, across all ages. In the U.S. for example, all the inefficiencies have been exploited: the 10-year treasury went from yielding 16% in 1981 to less than 4% today, down-payments went from 20% to negative (cash-out), ARMs, liars loans, you name it. Real estate is tapped. In the age of austerity, the only thing left to do is to have multiple parties per home & apartment. The room-mate lifestyle is in, and will be socially acceptable. The upside is that this will lessen depression and isolation which has swept modern societies. Look to strategic room-mating as a way to reduce the need for other services such as day-care, and to reduce ownership of automobiles and other expenses. Some web2.0 usage will go down as attention spans swing back to dealing with real relationships.
  13. Flight from the suburbs, into the cities. Public transportation will be increasingly important. Austerity will also drive a trend to go car-less and seek densities within walking distances.
  14. 3D computer desktops and multi-media will be dominate trends for the next 10 years. If you've seen the recent movie Avatar in 3D, you'll have a good idea just how amazing 3D is. That experience will be popularized for consumer video in the home and will drive a refresh of consumer equipment which is not 3D capable. However, there is also an incredible amount of innovation yet to come in the computer desktop, which already has some 3D effects mapped to the 2D monitor. New ways of visualizing windows and content, and manipulating them will dominate desktop innovation for the next decade.
  15. Prostitution will go on-line. The age of the e-hooker is near. 3D consumer equipment supplemented by tactile feedback input-output devices will enable more than just the adult film industry; it will enable sexual services. Once again, the adult industry will drive technology trends. E-prostitutes may be real "service providers" or computer programs, confusing the matter of regulation and morality even further.
  16. Social prizes (Nobel, Emmy, Academy, etc) will be increasingly given to political & popular figures in attempts to influence their future actions and make populist statements. Look for the next Nobel prize to be targeted somewhere in what used to be called the "axis of evil". Similarly, awards will be given for films, songs and actors who portray and expose populist themes.
  17. Growth and innovation will trend in countries with favorable Intellectual Property environments. An IP environment in which there is unlimited financial exposure to IP litigation does not favor small companies, because there is unlimited risk. It is nearly impossible to do proper diligence (say at $50+k per patent) of each idea that a complex technology product uses. The cost of such diligence could far outweigh a given startup's total financing. Lack of transparency of U.S. patents (the 18-month window before a patent app is published, 12-month window from provisional to regular patent filing, and the first-to-invent opaqueness) translate to an incredible risk for small and innovative companies. Small companies are the engine of job growth and innovation. Thus, this growth and innovation will be stymied in IP unfriendly regions and flourish in IP friendly regions. A balanced and sensible patent system might look something like as follows, which let's a small company have known infringement downside costs and still stay competitive if it is innovative. Note that the IP owner is incentivized to strike licensing deals instead of file law suits as follows:
    1. First to file gets patent rights.
    2. Applications are published immediately.
    3. Infringement pay outs never total more than 20% of related revenue.
    4. Multiple infringement claims vie for a weighted piece of the 20% pie (each new claim reduces the pay outs of the others).
    5. Infringement claims only go back to the initial date of the litigation.
  18. "Organic Gate". Crowd-sourced testing of organic products will reveal a substantial amount of fraud and heighten awareness of how lax the organic standards are. Commoditized testing will enable crowd-sourcing and extensive databases.
  19. A Cloud Computing marketplace will be the next exchange boom. The enabler will be standardized inter-modal data transport ("FedEx net") which will allow tapes/disks to rapidly transfer huge data sets between sites without tapping network bandwidth. Expect an ecosystems of arbitrageurs, futures, derivatives and market makers to materialize. There will be many specialty cloud providers offering unique angles such as "carbon neutral datacenters", scientific computing centric, render farms (for movie animations and gaming), analytic databases, and more.
  20. The next Pixar-class animation studio startup will use the cloud marketplace instead of owning it's own render farm.
  21. The cure for a number of types of cancer and other maladies will come from the cloud marketplace. Genetic, drug discovery and other life science startups will use the cloud marketplace, followed by established players.
  22. Deep video & audio search based on captioning and voice recognition. You will search for keywords, possibly refine by media source, and link directly to a scene in a video or time-frame in audio where the text appears. This will make searching media far more powerful, and will open up new advertising and search revenue opportunities.
  23. A global tip-jar based news and media payment system will emerge. Too many one-off accounts and payment sytems are untenable for consumers. A micro-payment based tip-jar system will allow consumers to sponsor various content, potentially anonymize the consumer's identity, and fast forward through video pre-roll and interstitial adverts on-demand. Once popularized, blogging will become a very viable profession for a broader group of bloggers, as tipping will be viable & simplified for free articles as well.
  24. What will push big companies to use cloud computing is overcapacity mitigation. Over-planning is necessary for private data centers, generally by a 2x normal load factor, to handle load spikes and future growth. Allowing marginal loads to spill over to public clouds during high demand periods means avoidance/delay of building new datacenter capacity (which is very expensive). Once this trend becomes more commonplace, it will be exploited for energy cost optimizations (using cheaper electricity rates in different areas or time-zones). Ultimately, companies who do not do this will not be as cost competitive.
  25. Fault tolerance of data center software will become mainstream. Fault tolerance for virtualization will become commoditized and will drive a trend for increasingly cheaper hardware. Error detection will remain important, but error correction and redundancies (like dual power supplies) will be irrelevant & unnecessary.
  26. Pay to enable hardware features will become popular. Processors, hard drives, smart phones and other techie equipment have become more powerful than is generally required. To cut costs of producing many SKUs and to motivate up-sells, pay-to-enable hardware will prevail. Want to enable another 2 processor cores, or another terabyte of disk, or enable 3D video on your smart phone -- pay up.
  27. The dirty side of Green will receive more press. The sustainability movement talks about reducing externalities. But nitrogen trifluoride (NF3) is created in the manufacturing of thin-film photovoltaic cells and its 17,000 times more potent at global warming than carbon. As mentioned previously, rare-earth mining has some nasty toxic and radioactive externalities as well as large political risks. We'll here many more aspects of the dirty side of green. These inconvenient truths will be used along with Climate Gate as fodder against clean technology. The clean technology side will botch this debate.
  28. Thin computing will rule. Devices which act as a remote display and input/output but harbor no data or real computing capability will be very popular. They can be extremely cheap (slim bill of materials), are great for security because the data does not exist on the device, can't be searched at the airport, and are much more data compliance friendly. Thin computing devices will enable the modernization of education in developing nations due to their low unit and IT costs (centralized management) and are interesting for home users who want a tablet like device but don't want to deal with data syncing issues between their laptops and PC.
  29. Cloud computing security will be the new anti-virus.
  30. E-book readers will converge with tablet computers. And will be used heavily for news and netbook like uses. They should also act as a bigger screen for your smart phone.
  31. Pushback against RFID on personal items. Apparently Las Vegas casinos have very advanced RFID sensing technologies to identify customers and prevent fraud. And to know what drink to comp you with. For the rest of the world, people will push back hard on RFID embedded in things they commonly carry on their person. If there was one last bit of privacy left in the World, it goes out the door with RFID.
  32. Air filtration will become popular in the home & office. With rising awareness of soot's health issues, and sizable growth in emerging economies, air filtration will enjoy significant growth. Offices and homes should be fitted with high-tech filtration systems which filter ultra-small particles, first as a differentiator and then as a necessity to stay competitive.
  33. Data centers will go subterranean. Under ground is always cool and as computing moves to the cloud, more compute will be concentrated into large data centers. These "nerve centers" will be subject to more physical attack risk. Desert locations will ironically be interesting, as free sun energy on top and cooling below make a good combination. Similarly, locations near oceans (wave energy) will be interesting.
  34. Every form of governmental fee will increase in the US. None of these increases will be included in the cost of living benchmarks. Parking tickets and moving violations will sky rocket.
  35. Populist sites will arise to punish stocks of corporations, banks, and politicians who are not aligned with the people. Think, the Huffington Post's "Move Your Money" on steroids.
  36. Defined benefit pension plans will die. They have to, as many pension plans are broken in future terms. That's what happens to Ponzi Schemes, they don't last forever.
  37. The retirement age for Social Security will become floating and be keyed to demographics & average life expectancy. This won't totally fix things, until retirement is keyed to when you have enough money stored to stop working.
  38. The Federal Reserve will pay an increasing interest rate on deposits. It has to entice depositors (banks) from withdrawing their deposits and dumping the dollars into the economy (inflation). The interest rate will need to be continually bumped up to stave off an inflationary death spiral, because if inflation exceeds the interest rate, banks will yank their money out and do something else with it.
  39. Commodity speculation will meet controls to prevent "melt-ups" as nearly all commodities reach peak production. As soon as its known that a given commodity has reached a peak status, speculation and contango are nearly guaranteed to make money outside of short-term gyrations. Yet they add no real value and boost prices. Controls will be applied. One such example is to disallow buying and selling of commodity and futures except to real producers and consumers of the commodity. This will be circumvented one way or the other. Already, hedge funds own a lot of farm land.
  40. ARM loans will dominate now that Freddie Mac / Fannie Mae have a blank check. Given an increasing interest rate environment, this will be another attempt at bailing out the housing market, ostensibly predicated on rates which will increase later "when the housing market returns to normal". This will prove to be a bail out for housing sellers, a sucker punch for housing buyers (a purchase price lift followed by a slump), and a form of bail-out meets indirect quantitative easing as the government sponsored entities crowd out the mortgage market and effectively set mortgage rates.
  41. Upon another economic leg down, gold will surge first, then commodities. Commodities will outlast. Gold is a call option on credit and fiat currency instabilities with a strike price somewhat above $0 (it's intrinsic value) and an expiration of the time that commodity stockpiles stop being plentiful and people need to start trading/bartering. With peak everything in site, the last part is worrisome about gold. Gold is under-owned by many countries who produce valuable things that other countries need. When the crap hits the fan, countries who have something with tangible value will want something else of tangible value in return. At that point, you'd be better off owning copper, steel, wheat, cotton etc. Before that point, the premium in gold will likely sky rocket while the commodities take a dive following economic activity.
  42. Reserve nations, not reserve currencies. A cascade of nations will eliminate derivatives, use of leverage and deficit spending. Money will flow into those nations as safe havens as fiscal sustainability will be the new reserve currency. Elimination of the fractional reserve system will also boost a nation's status. If these nations are smart, they'll buy up and stockpile commodities.
  43. Some American influential states (also the ones in the most debt/trouble) will negotiate back-room bailouts and special deals. This will create tension which will evolve into inter-state protectionism in terms of commerce, taxes, power and water distribution, etc. This will not end pretty.
  44. Incomes will continue to decline in over-extended economies. As the real estate markets correct and the room-mate society progresses, some areas will begin to be cost effective again by way of lower salaries necessary for employees to support the cost of living. This will not be good news for the auto industry or big appliances which can be shared when people double up in apartments/homes.
  45. Many derivatives will be voided out. Once a few parties walk away from derivatives contracts, a cascade of parties will do the same. A quadrillion of notional derivatives will vanish.
  46. Web-services-wide transactional engine will be the new Oracle. Whereas the focus was on transactional processing within a database engine, the new frontier is orchestrating transactionality across a disparate set of web services.
  47. A new VC or startup funding model using many small non-accredited sums will emerge. It will use the collective (crowd-sourced) power of participants to do diligence, finance, and valuate startups. Many participants will also find interesting work this way.
  48. ARM Holdings will rise to become interesting in the server market. Thus far it has focused highly on power efficient chips for small devices. However, it has pulled out the stops to create a high performance server design. Server software design is moving to higher level languages where underlying architecture (traditionally x86) is less relevant. Even on consumer devices, ARM based netbook designs are coming with an Android OS. Ultimately, compute per watt and per dollar will reign. And that's where ARM lives.
  49. Death of the monolithic consumer OS, rise of the "swarm OS". Software components/applications of the new order of OS will pop out of your notebook and onto your car's in-dash GPS system. Or snap to a server somewhere on the cloud to keep running while you power the device down. Or snap to your TV. Etc. Ultimately, you can re-convene all the software on your desktop. Think application Legos meets a swarm of bees. Flexibility and mobility are the future. Monolithic is last decade.
  50. The value of vision will rule. MBA skills will be thought of as commodity. The Stone Age lasted about 2 million years, the Bronze Age about 2000 years. Twitter is 2.5 years old. The accelerating rate-of-change of technology will continue. The margin of time for jumping on markets after they have materialized is gone. The ability to be fast followers has mostly vanished. When a technology generation lasted 10 years, you could spare 2 years to wait. Now markets have to co-materialize with the enabling technology. In a number of cases, multiple technology and startup plays have to co-materialize together. This is not your father's startup/innovation environment. Going forward, visionary skills reign supreme. Most VC firms will perish without them. Ditto for companies of all sizes. There will be a CVO (Chief Visionary Officer) role, and they'll be more revered and better paid than any other position.
Disclosure: related IP, no positions