November 03, 2004
Tech Watch: Bush win won't ease tough overseas tech markets
The re-election of President Bush was not a welcome outcome for some Silicon Valley companies. I know several tech company executives who have been complaining that US foreign policy has not been good for business in Europe. With about 50 per cent of revenues for many tech companies coming from overseas markets, US foreign policy can have a large effect on business--especially for many small companies.
Tech markets are tough enough for Silicon Valley companies without having to also deal with the negative connotations of being a US company in today’s world. There was hope among some local companies that a John Kerry win would set a course of improving US foreign relations and that this would help business.
However, Kerry’s support in Silicon Valley was tempered with uncertainty over his stance on offshoring. Although most local startup companies offshore very small amounts of their engineering work, there had been concern that the government might limit their future ability to use offshore development facilities.
Interestingly, it is the venture capital firms that have been pushing their startup companies to use offshore development facilities. One entrepreneur told me, “Most of the venture capitalists are insisting that business plans include an offshore component, otherwise they will not look at it.”
The venture capital firms will reduce the size of their investment to make up for the savings that offshore development work can save a venture—but the milestones remain the same. Very crafty: the VC’s take the savings upfront!
Interest in politics, however, is rare. I would characterize most Silicon Valley executives as “libertarian” in that they want as little government involvement in their ventures as possible (except, of course, for government research grants!).
Gary Reback, an attorney at Palo Alto's Wilson Sonsini Goodrich & Rosati, is concerned however that Washington, D.C. does not understand the tech industry and that this ignorance could harm the US tech sector. When I met with him recently, he was considering writing a book to highlight some of the potential problems he sees in the future in regard to possible US government actions and their effect on the technology industry. For those who have short memories, Mr. Reback helped lead the fight against Microsoft’s anticompetitive practices.
Posted by Tom Foremski at 01:11 PM | Comments (1)
November 02, 2004
Tech Watch: A Slimy Graphics Algorithm
by Doug Millison for SiliconValleyWatcher.com
A University of California, Berkeley researcher has developed a new way to animate viscous, bubbling, and oozing fluids that promises to make "movies, videogames, and even surgical simulations much closer to reality," writes David Pescovitz in the latest issue of Lab Notes, a publication of the university's engineering department.
"For quite some time, we've had mathematical models for simulating idealized solids," Pescowitz quotes James O'Brien, a professor in UCB's Department of Electrical Engineering and Computer Sciences. "And we have other models for simulating idealized liquids. But there are many materials that are in between. They may look like solids, but they also can flow like liquids."
Reports Pescovitz, "The algorithm O'Brien developed with graduate students Tolga Goktekin and Adam Bargteil takes existing fluid simulations and adds the ingredient that gives materials like toothpaste, motor oil, and dish soap characteristics of both liquids and solids."
Links:
A Slimy Graphics Algorithm by David Pescovitz, Lab Notes, Volume 4, Issue 8, October/November 2004
Affiliate link:
OnlineJournalist.org, edited by Doug Millison: "on a need to know basis"
Posted by Doug Millison at 10:54 AM | Comments (0)
October 25, 2004
Tech Watch: Intel invests in Clearwire
by Doug Millison, SiliconValleyWatcher.com
At least one high-powered Wall Street investment banker - an old buddy of mine who emailed me this morning - has his eye on Clearwire, a new company from cell phone empire-builder Craig McCaw... and so does Intel.
Intel Capital has made an unspecified investment in Clearwire, the company announced today, as part of a broader $150 million strategy in wireless technology.
Clearwire will use Intel chips in the nationwide network it is assembling to provide wireless broadband Internet and telephone service, using the emerging WiMAX technology, based on the IEEE 802.16e standard. WiMax is expected to compete with cable modems and DSL within a few years, and can link existing wireless Wi-Fi to fixed network infrastructure.
"McCaw is a smart guy," says my Wall Street friend, who knows where the skeletons are buried in some of the bond deals that financed the first wave of cellular phone networks in the 1990s, and the more recent wave of investment in wireless spectrum.
Clearwire has acquired dedicated spectrum for the new service from companies that managed to raise capital to bid on frequencies at US government auction, then went bankrupt before being able to roll out service. Another McCaw company, NextNet, is supplying technology to the project. In August, Clearwire launched its first broadband wireless network in Jacksonville, Florida. The network, using NextNet technology, is a precursor to upcoming WiMAX networks.
McCaw built the first nationwide cellular empire, McCaw Cellular, and sold it to AT&T for $11.5 billion in 1994.
Links:
Intel, Clearwire to Accelerate Deployment of WiMAX Networks Worldwide, Intel's press release
Intel Capital, information about Intel's investment unit
Clearwire, corporate site
NexNet, corporate site
Craig McCaw's Secret Plan: His deals in wireless broadband have the telecom world buzzing, in Business Week Online, 24 May 2004
Posted by Doug Millison at 01:08 PM | Comments (0)
October 24, 2004
Silicon Valley Watcher Scoop! Intel beats out DHL for $20m deal to sponsor U2 tour
Silicon Valley’s love affair with the band U2 is about to expand into a ménage a trios, with Intel jumping into bed with the Irish rock band as sponsor of its world tour--reports our very own Silicon Valley Watcher, Jochen Siegle, also a contributing writer to the top German weekly news magazine, Der Spiegel, and Spiegel Online.
According to sources close to the deal, the value of the sponsorship deal is about $20m and Intel outbid DHL, the international package delivery company for the top sponsorship slot. It is part of Intel’s efforts to extend its “Intel Inside” brand into consumer electronics markets.
The deal expands on Silicon Valley's involvement with U2, and it signifies the growing importance of consumer electronics to the region’s technology companies and venture capital investments. Apple Computer is expected later this week to introduce a black iPod, pre-loaded with U2’s forthcoming CD release “ How to Dismantle an Atomic Bomb.” The songs will be available on Apple’s iTunes service about 1 month before they are released on CD.
U2’s lead singer, Bono, is working with Elevation Partners, a venture capital firm that includes Roger McNamee from Silver Lake Partners, Fred Anderson, the former Apple Chief Financial Officer, and John Riccitiello, former president of Electronic Arts.
The “Intel Inside” campaign has been extremely successful within the PC market. But now Intel’s focus is shifting to consumer electronics, where the Intel brand has less heft.
Intel has been trying to raise its profile in consumer electronics, where its XScale based-chips--based on designs by ARM, the UK chip company--and flash memory chips are used in some cell phones and other digital devices. It has also been heavily promoting the concept of the “digital home” where video, music and internet services can be freely shared within the home.
However, Intel’s cancellation of its large-screen TV chip last week, and prior short-lived forays into consumer electronics markets with its own branded digital music players and other products--are some of the challenges it will face expanding its brand into consumer electronics markets.
U2 could be a valuable ally in Intel’s brand building. U2’s audience includes plenty of people who grew up with U2 more than 20 years ago and now constitute a valuable demographic with plenty of money to buy expensive digital entertainment systems.
The sponsorship deal also indirectly associates Intel with Apple’s iPod music player--an association that sources close to the deal say was a key factor for Intel.
Hewlett-Packard is another large Silicon Valley company that has been keen to exploit the Apple iPod brand. Earlier this year it struck a deal with Apple to offer a HP branded iPod.
Posted by Tom Foremski at 02:17 PM | Comments (0) | TrackBack
October 21, 2004
Tech Watch: Further evidence of Microsoft's tunnel vision....(Bill, that is not a light--it's a train!)
Steve Ballmer has been talking about the need for an entry level $100 PC in developing countries. This is not because Mr. Ballmer wants to bridge the digital divide. He thinks a $100 PC would help stem software piracy because people would then have money to spend on Microsoft software.
Mike Ricciuti, from News.com, wrote an excellent story on this topic:
"ORLANDO, Fla.--What's one of Steve Ballmer's biggest headaches? It's not Linux or security breaches. It's piracy, the Microsoft CEO said Wednesday.
"The biggest problem we have right now is that people who should be paying for software aren't," Ballmer told an audience of technology executives at an industry conference here sponsored by market researcher Gartner."
Is Mr. Ballmer saying that the hardware producers should cut their margins so that Microsoft can reap the benefits of its dominant position in software markets? It seems that way. Yes, Microsoft has cut some of its software prices in developing countries--but the piracy of Microsoft and other software in those countries is not a threat to its future revenues. Microsoft should be looking closer to home.
I know lots of people using inexpensive word processors, free web browsers such as the excellent Firefox, using Linux on their PCs, etc. Whenever a viable alternative to using a Microsoft product comes around--it gets a lot of support. For example, I've been playing around with TextPad, which is an excellent shareware word processor, that does everything I will ever need to do.
And the server-side applications are getting better and better. For example, I wrote this entire piece not on Microsoft Word, or TextPad, but within Movable Type blogging software, which sits on a server located somewhere in the "cloud." All I need is a browser window and I can use any computer, even my Treo (another plug for the Geek Beacon!) to input text. The server that runs my Movable Type application uses Linux as the operating system--a choice made not by me, but by my hosting service.
These trends are not favorable to Microsoft. It seems dead in the water these days. Its pipeline of products has been reduced to a trickle. And it is battling huge security issues around its software--deploying many thousands of its programmers to patch security holes instead of developing new products. And it is bereft of any good investment ideas, which is signified by its announcement earlier this year that it would give away a large chunk of its cash mountain to investors.
Is it Microsoft's fault that it needs to deal with these security issues? It often portrays itself as an innocent victim, that its security issues are because of its success, that its dominant position in software markets has made it the number one target for malicious hackers.
But, if it hadn't used illegal means to develop that market dominance in the first place, it would not have been such a large target. There would have been many targets for hackers if other software companies had survived. It would have been too much work for hackers to port their viruses to other platforms and we would have a smaller problem.
Instead, Microsoft used illegal means to drive competitors out of business and now PC users are paying the price in lost productivity due to a plague of viruses, worms, and security exploits.
Mr. Gates and Mr. Ballmer should have taken a lesson from agriculture. If you have a monoculture--you are far more vulnerable to pests and diseases and you need to protect your crops with herbicides and pesticides. Microsoft wanted dominance but it wanted it without impregnating its software with the defenses needed for a monoculture of software products.
Isn't Mr. Gates the Chief Software Architect of Microsoft? Shouldn't he have foreseen many of these security problems? After all, viruses and worms have been around for a long time. The first computer virus spotted in the wild was in 1981--on an Apple II computer. This was when Apple dominated the PC market and its operating system was the largest target around. Shouldn't Mr. Gates have made sure that there were strong defenses against viruses and other security exploits in Microsoft software products from the very beginning?
But, Microsoft is cloistered in the soggy North-West and I strongly believe that this insulates it from critical thinking and the mish mash of ideas and challenges that being in Silicon Valley provides. Microsoft's partner in the PC business, Intel, for example has benefited tremendously from its presence in Silicon Valley. This makes it easier to make tough decisions, such as Intel's big change in its roadmap for future microprocessor designs. Intel, BTW, has done far more to force down the price of PCs than Microsoft. And its strong support for Linux is another indication that it understands the trends and undertows of computer markets far more than Microsoft.
Life in Silicon Valley is hard and often brutal. Companies have to compete in so many ways, for skilled engineers, for markets, for capital, and most do not make it--but this is where the innovative juice is, Bill. Move your HQ down to here; compete on level terms in global markets.
If you can't handle competition, that's fine--give away your ill gotten gains to your investors--but if you can compete you are golden. It is competition that drives you on. Intel knows it, everybody here knows it. Microsoft doesn't IMHO.
News.com story--Ballmer: We Need a $100 PC.
News.com story--Microsoft plans to return up to $75 billion to shareholders over the next four years.
The first computer virus in the wild.
Posted by Tom Foremski at 02:47 PM | Comments (3) | TrackBack
October 18, 2004
Tech Watch: VCs searching for search engines in all the wrong places
VCs are pouring money into any search engine company they can find but they are missing the point about Google’s success. Google is not a search engine company.
It seems that almost every venture capital firm I meet with has a search engine investment or two in their portfolio--or is searching for one or two.
I met with Raul Valdes-Perez, president of Vivisimo recently. This Pittsburgh-based company has a search engine product that uses a very interesting technology that can generate a taxonomy-on-the-fly. This means it can quickly group search results into folders representing different subjects. It recently introduced the search site Clusty.com as one demonstration of its technology.
“We’ve got about forty VC’s chasing after us,” Mr Valdes-Perez complained. “We don’t even need the money.” Vivisimo is far more interested in partnering with Silicon Valley companies that could use its technology. But VCs are desperate for any search related company. (And you thought the mistakes of the bubble years, with the herd-like behavior of the VC community, were a thing of the past...)
The VCs are missing the point when it comes to understanding Google. It is not a search engine company but an extremely efficient advertising delivery network. It already derives a significant share of its revenues from non-search web pages through its Adsense service.
Search is merely an application for its advertising delivery technology.
In fact, I wouldn’t be surprised if Google might one day decide to outsource search. If say CompanyX built a better search engine—so what? Google would offer to sign it up as an advertising partner and CompanyX would accept.
Why? Because Google would be far better at monetizing that search engine because it has this enormous advertising delivery network.
I could tell VCs what kinds of companies they should be chasing (BTW it’s not advertising network technology companies ) but I'll wait a bit...
Here is a link to Vivisimo and Clusty.com.
Posted by Tom Foremski at 01:13 PM | Comments (0) | TrackBack
October 15, 2004
Tech Watch: Intel doubles the fun in roadmap change
Joe Fay, US Editor at Computerwire has penned an interesting analysis of the changes in Intel’s microprocessor roadmap. He asks how Intel will produce chips twice as large and sell them for about the same price as current products?
These forthcoming dual core microprocessors are large chips yet Intel says it will sell them at similar price points to its single core microprocessors.
It’s going to be an interesting challenge for Intel. I’ve covered this company for more than twenty years, and they have become a chip manufacturing powerhouse—accelerating down the Moore’s Law highway ahead of almost everyone(IBM is up there with them).
The way Intel will deal with such a challenge is the way it always does--with its core competency: manufacturing. It will open up the faucet on its 300mm production lines and push toward smaller geometries. The use of larger wafers and smaller geometries should allow Intel to reduce production costs faster than the growth in the size of their chips.
There is a lot of drama here.
Can Intel make the jump to the next shrink of chip geometries?
Will it be tripped up with a design issue as these chips become so huge and complex?
Can it maintain yield levels, since larger chips are more prone to contamination and the dustbin?
On that last one Intel should be fine. The new 300mm factories are a lot cleaner than the older generation of fabs, because they got rid of the main contaminant—people.
The bunny suits and gloves and goggles that semiconductor workers wear are not to protect the person. The bunny suits are there to protect the chips.
Even in bunny suits and goggles, people shed huge numbers of microscopic particles, and just one can spoil a chip—it will block out part of the wiring. The new 300mm wafer fabs, dinner-plate sized silicon disks, are processed in canisters that are too heavy to be carried by people from one process step to another.
The latest generation of chip fabs are more highly automated than ever, to limit exposure to humans. With fewer people working the fabs, I wonder why some communities try to lure large chip makers to build fabs in their region, with large tax incentives and other material benefits.
A local job boom from such ventures would seem to be short-lived and shrinking over the long term--along with the die shrinks.
Posted by Tom Foremski at 05:01 AM | Comments (0)
October 12, 2004
Tech Watch: Yelp!—PayPal co-founder pops first venture out of incubator
As reported here nearly a week ago, Max Levchin, the hugely successful co-founder of PayPal, has launched the first startup out of his MRLV incubator.
I would describe Yelp as a type of “ Friendster Yellow Pages” in which you can ask friends, and friends of friends, for a good recommendation on a restaurant, plumber and other such stuff.
Personally, I like to keep a lot of that info to myself, or as Yogi Berra once said, "Nobody goes there anymore--it's too crowded."
Max believes his team has spotted a huge business opportunity. Although Max is chairman of Yelp, he says he doesn’t want the Max brand to obscure the achievements of the Yelp team. “The vast majority of the people involved are close and long-time friends of mine,” Max said. They are also mostly former colleagues of his at PayPal. Jeremy Stoppelman, who heads up Yelp, used to run the engineering group at PayPal.
Here is the Yelp pitch:
“Yelp! is a simple online tool for people to ask their friends for quick help in finding restaurants, dry-cleaners, and any other local service. This is already exactly what happens when you ask friends for help via email, all we've done is taken it to an entirely new level.
The process is made much more effective by adding friends of friends into the mix, and much more convenient with features that enable faster, more complete responses, caching previous answers, and making the whole process very 'single-click.'
What we are doing to the 'hey, does anyone know a good...' type email is the same thing Evite did to email party invites."
The revenue model? Grabbing a chunk of that fat Yellow Pages market, and the billions local businesses spend on local advertising. The competition? I would say damn near everybody. Google, Yahoo, and a lot of other online companies, such as Ingenio, are trying to get a piece of the "local business" pie. CitySearch, for example, has had a very similar service in place for a long time.
[My venture also seeks to target local people and local businesses through media based products and services--such as this web site and others.]
Those trying to profit from this “local business” market are approaching it from different directions. Yelp has taken the social network approach of Friendster, Tribe or Linked-In.
But what is to stop those already established social networks from adding such referrals as a feature of their service? Nothing at all. In fact, Tribe yesterday offered a $25 gift certificate to its San Francisco based members if they would take on a role of referring their friends to products and services.
I wouldn't write off Yelp too soon. Success is all about execution--not being first to market. Coming late into the market enables a company to learn from the mistakes of others, and figure out how to do it cheaper and better.
And Yelp has a very simple user interface--hugely important to the success of any consumer online service.
Check it out at Yelp.com.
Posted by Tom Foremski at 11:51 PM | Comments (2)
October 08, 2004
Tech Watch:Dave Galbraith’s penthouse party off Alamo Square was the place to be the other night
Mr GigaOm himself was there (although I missed his Om-ness, he had left by the time I’d arrived, fashionably late of course.) And spotted in the corner, on the patio was Evan Williams, the founder of Blogger, who had just left Google the day before, (acquired by Google in early 2003) “I’m just going to take some time off for now, take it easy,” Evan said.
Dave Galbraith, co-founder of MoreOver, just finished up a project with Max Levchin, former CTO and co-founder of PayPal. Dave’s not talking about his next venture just yet, but I’m working on him.
As for Max, he’s has been busy with his MRL Ventures incubator, and I’m hearing rumblings, and it’s not Mount St. Helens.
The first rocket is on the launch pad, and it’s going to be an interesting project.
At PayPal, Max really understood how to leverage the power of viral marketing, and the first launch out of the incubator, I’m hearing, is that it will use viral marketing techniques in a similar way. More will be revealed soon…
I met Max earlier this year, I interviewed him for a Financial Times article on what happens to a company that is taken public, he gave me some great quotes:
What did you do to celebrate PayPal’s IPO? “A few of us went off to a Palo Alto diner and had a bubbly burger, it’s a $100 cheese burger,” Max said.
Damn, a hundred dollar burger? “Yes, it’s a regular cheese burger that comes with a bottle of Dom Perignon.”
Various leading VCs have been seen dropping in on Max in his South of Market incubator, from time to time, just to say hi, ask about his dog (a beautiful dog by the way.) And also try and sneek a peek at his whiteboard, offer to wax and clean his car, take his dog for a walk.
Hey, Max is just 28, and he isn’t finished yet, I'm not surprised the VC's want to hang around. He landed his PayPal bounty when he was just 26. And as co-founder, the $1.5bn sale of PayPal to Ebay, has set him up nicely.
Stay tuned, more on Max, more on MRL, more on Galbraith penthouse party…and how much is an original blogger T-shirt worth? (I’m feeling like a society gossip columnist for the geek elite!)
Posted by Tom Foremski at 01:26 AM | Comments (0)
October 07, 2004
Tech Watch: Applications you never knew you would never need…
My good buddy Mark Osborne, Editor of the very fine Semiconductor Fabtech magazine, spotted the following recent press release :
"Imagine seamless continuity of your favorite video between your home theater DVR and your car’s backseat entertainment system. Imagine pausing a song as your car arrives at home and, as you walk into the house, your home stereo picks up the song at the same spot. Freescale Semiconductor, Inc. (NYSE:FSL) and IMEC are currently in the process of helping you realize this vision of seamless mobility.”
Now I understand why Ed Zander wanted to go ahead and spin-off Freescale from out of Motorola...
Posted by Tom Foremski at 01:14 PM | Comments (0)
October 01, 2004
Tech Watch: The Geek Beacon spawns third party apps market!
The Geek Beacon, the use of a Treo or cell phone with a bright screen to hail taxis, is really taking off. And I’m already hearing about plans for third party applications around the Geek Beacon concept (I’m not kidding...)
I spoke with a software developer on Thursday who wants to produce what could be a killer application, one that would take the Geek Beacon concept a whole stage further! I’m under NDA but, I promise that you, my loyal readers, will be the first to hear all the details when it is ready.
Posted by Tom Foremski at 01:06 AM | Comments (2)
September 28, 2004
Tech Watch: Come listen to Google stories from influential angel investor Ram Shriram
This should be a very interesting evening at TIE, featuring Ram Shriram, an angel investor who played a big part in the Google story.
And TIE is promising quite a lot from Ram:
The TIE web site says:
“Google will become part of the legend of Silicon Valley. Its story will be told and retold, and like all stories, additions, admissions and omissions will occur depending on the storyteller and the listener. But the story is clearly for the telling.
And who better to share that story with us other than one of our own charter members-Ram Shriram-who was one of the original angel investors and who can share with us that personal journey he and the founders of Google took from those early years to the spectacular debut on the stock market.
Come and listen to the strategy devised in those early days and months and many ups and downs and twists and turns of building a great business.”
Mark your calendars for October 28 and book your seats here—only 250 available.
Posted by Tom Foremski at 10:10 PM | Comments (0)
September 25, 2004
Tech Watch: Silicon Valley's greatest success is failure...
....and copious amounts of failure.
What can be learned from failure in improving the process of commercializing innovation?
This was one of the questions posed to panel members at an SRI International event I was moderating, by Elizabeth Safran, from Trainer Communications. The event was organised by Alison Murdock, president of the IDB Network.
Elizabeth’s question about the role of failure deserves more attention, because I'm convinced that it goes to the root of Silicon Valley’s success. And it points to a fundamental quality that Silicon Valley possesses, and one that is rarely mentioned:
Silicon Valley is extremely good at failure.
In fact, it is extremely good at producing massive amounts of failure.
Curt Carlson, director of SRI, one of the largest research organisations in the US, pointed out that as few as one in 20 Silicon Valley startups succeed. And even then, they are unlikely to make it to their 13th birthday—the average lifespan of an S&P 500 corporation is 12.5 years.
With the pace of change accelerating in many industries and markets, Mr Carlson argues that we have to accelerate the process of successful innovation in order to keep up. But how?
SRI believes it has figured out part of the answer...
From years of studying successful innovation, SRI has developed a week long training course for its researchers and clients. And it seems to be working, judging by the increase in successful research projects coming out of SRI over the past two years. The course is so effective in raising productivity that Mr. Carlson has asked that every employee of SRI, not just researchers, take the course.
I wrote a column on this subject recently for the Financial Times.
The SRI training is no guarantee of success in commercializing innovation. But it will help to kill an unviable project.
Or as Dave Blakely from the research organization IDEO, puts it, “We have to get better at failing early and make our mistakes earlier.”
Another question asked was if there was a way to document what goes wrong in early venture companies and create some sort of central database of what not to do.
Lee Burrows, vice president at VC firm VantagePoint Venture Partners said, “We perform our own post-mortems but it is impossible to collect all the information and document it, because people would not publicly reveal a lot of key mistakes that were made. Or name names.”
Nand Mulchandani, CEO of Determina, said, “What does happen is that new ventures are formed that have teams of people that have worked together in the past. That way, you can try to aggregate the experience of failure in the hope that people have learned from past mistakes.”
It reminded me of a recent conversation with Mike Sheridan, a partner at Mohr Davidow Ventures, “You get back into the trenches with the people that were in the foxhole with you the last time.”
The panel couldn’t provide easy answers to how best commercialize innovation. All of them said recruitment of good people is key. And finding people who can work as a team is essential. Easier said than done.
Other interesting points from the panel:
Norman Winarsky, vice president at SRI International.
--Make sure you are talking with potential customers as much as possible, as often as possible. There are too many examples of ventures emerging after 18 months and finding that their target market has moved on and has no use for their product.
--Don’t invent a technology and then go looking for a market.
--We have seen a lot more success when researchers are involved with customers as early as possible in the development process.
David Blakey, IDEO.
--I’ve seen so many companies not bother using simple prototyping tools to create a mock-up of their product, or not use graphics tools to see what the user interface might be like. These simple procedures would have shown up problems early in the development process.
--You cannot innovate by sitting in a conference room. You have to get out of the room and onto the road.
--The most successful companies we’ve found have a strong, heartfelt connection with the customer.
Nand Mulchandani, CEO, Determina.
--It’s all about team building. Cultural integration is a big part of my job, integrating new people into the team.
--When you start up a company, you round up the usual suspects, people you know because trust is very important. Then as you grow, you create extended networks of trusted people.
Laurie Yoler, chief development officer, Intellectual Ventures:
--I don’t think it is possible to have a cookie-cutter approach to innovation. Although there is a cookie cutter approach in terms of getting funding, in terms of presenting that information.
--Researchers can have a difficult time transitioning into a startup venture because they were interested in solving a problem rather than being involved in marketing and business development.
Lee Burrows, VantagePoint Venture Partners:--You need people with different sets of skills at different points in the life of a venture. We’ve often seen that a startup CEO might not be the best person to lead the company after a couple of years. There has to be a willingness to step aside and learn, so that in a future venture, that person has those skills.
--Revenues are the only measure of success that we look at.
Interesting comments from conversations after the panel:
Clay Bullwinkel, of Bullwinkel Consulting--Poland is becoming an interesting place for outsourcing these days. Costs of outsourcing work to India are rising as wages are increasing, and there is a lot of staff turnover. Poland is being increasingly being recognized as a viable alternative.
Gregory Ruff, G.L. Ruff & Company:-Silicon Valley is too incestuous, we spend way too much time listening to ourselves and sucking up our own exhaust. There is a lot of innovation happening in other parts of the world.
Juan-Antonio Carballo, IBM Venture Group:
--We are keeping a very close eye on Silicon Valley because we need to know who to work with, who to partner with. We are in the solutions business, so we need to know what is out there that we can use.
Posted by Tom Foremski at 11:06 PM | Comments (0)
September 20, 2004
Tech Watch: Amazon’s A9 sets a value on private consumer data
The recent launch of Amazons’s search service A9 is interesting in that it has tried to establish a value on consumer data privacy--and it’s not much.
In return for allowing A9 to collect data on users of the service, and target them with commercial products and services, Amazon is offering a 1.57 per cent discount to A9 users...
...Yes, 1.57 per cent discount is better than a jab in the eye, but, is that all? Surely that personal data is worth much more than that?
It reminded me of some of the conversations I’ve had on the topic of consumer data privacy with senior executives in the tech industry. Yes, ensuring consumer data privacy is extremely important, the tech executives would say (because we don’t want the government setting new laws.) They would also note that while consumers will say they are very concerned about maintaining the privacy of personal data, they will sell that privacy very cheaply. This can be seen in things like supermarket loyalty cards, filling out “win a free vacation” cards in coffee shops, etc.
Clearly, the value of private consumer data is known, there are huge numbers of companies that collect, sell and monetize that information. But, it is not a public figure. If it were made public, I bet consumers would think twice about giving out their private data too cheaply.
I've long maintained that there is a good business opportunity in establishing a venture that would allow consumers to be gatekeepers of their own private data. A system that allows the consumer to be the gatekeeper to their private data, maintain the quality of that data, and allow access to all or part of that data to different entities. And for substantially more than a measly 1.57 per cent discount.
Posted by Tom Foremski at 01:29 AM | Comments (0)
September 19, 2004
Tech Watch: The secret barometer of Intel's health reveals...
...a slight downgrade.
I popped into the Intel Developer Forum (IDF) the other week at the Moscone center. The twice-yearly IDF is a good place to catch up with my Intel contacts and also rub shoulders with analysts and other hacks (Brit. slang for journalists in case you were wondering!).
IDF is also a good place to taste the mood of the PC industry and the mood within Intel. And on both counts, the mood was rather muted. That wasn't surprising given Intel's recent trimming of its 3rd quarter revenue forecast, and large changes in its microprocessor roadmap--not to mention Craig Barrett’s reaming of his staff in a very public memo (BTW not a good idea Craig, it is always best to keep domestic quarrels private.)
But, I did get a chance to check on my favorite barometer of Intel's health...
...Over the years of attending IDF, I've noticed a reasonably close correlation between Intel's business performance and the quality of the backpacks that conference visitors receive. In lean times, the backpacks are flimsy and made from lower grade materials. About a year ago, the quality of the backpacks at IDF jumped dramatically. And for good reason, revenues were strong and growing faster than expectations. Intel was raising revenue forecasts, not cutting them.
The Spring 2004 IDF again produced a top quality backpack, black and electric blue, with good quality ballistic nylon, and stylish use of yellow trim. It was clear that Intel was expecting a good year.
At the Fall 2004 IDF, the conference backpack looked to be of comparable quality. Closer examination, however, showed that there was some downgrade in quality, but that it was minor. Conclusion? Slight downgrade to Intel's fortunes, but still betting on a solid business outlook for the next six months.
Joe Fay, US editor of Computerwire, agreed with my careful analysis but pointed out that the contents of the backpack indicated a rebounding small technology company sector. Indeed, the backpack contained a larger number of chotkis than before. In fact, mine to contain a double amount of pens, tiny measuring tapes, and other promotional items from companies exhibiting at the conference. Conclusion? Smaller PC tech companies are raking it in--a very bullish sign.
Even without the help of my backpack barometer, it's clear that Intel remains in a very strong competitive position. The trimming of revenue forecasts for the current quarter is modest. As for the changes in its microprocessor roadmap, I would expect Intel to make changes as the market changes.
There is no way that it can predict two years ahead, what the likely best combination of microprocessor technologies are likely to be. That's why it runs many microprocessor design teams. And it staggers those projects so that it can drop a design project, or accelerate a more promising design, as market demand changes.
This is cheap insurance for a $32.7bn revenue company. Until there is a clear hit on Intel's revenues, criticizing it for making necessary changes in its business strategy, as many recent articles have done, is a useless exercise.
UPDATE-Thursday September 23
Joe Fay is now reporting that there is a strange smell eminating from his IDF backpack. He has confirmed it with colleagues. I will check mine, but if true, I may have to revisit my slight downgrade of Intel.
Posted by Tom Foremski at 08:55 PM
