Brian Roy’s Blog

You just don’t get me…

Tuesday, October 21st, 2008 | Innovation | Comments

The thing about innovation - is that it really isn’t innovation if everyone you pitch it to immediately “gets it”.

Which creates a nice piece of circular logic - I’m innovating, so no one will understand. Since no one understands I must be innovating. Which is - as my grandmother used to say - happy horse-shit.

Innovation is built on commonly held premises. If you want to know if your problem is people not “getting it” because it is innovative - and thus beyond the range of their current world view- talk to them about the premises that led you to the innovation.

I spent lunch today talking to two very smart people about the future of communications - and that applications are the future, networks will be commodities. And that conversation was ok… where I think I lost them is when I moved to a user centered application development approach for communications.

All of a sudden we weren’t talking about how to let users use features of the network (as an application) and instead we were talking about leveraging the network as a tool to solve important problems for the customer via applications.

The innovation is an application first (as opposed to network first) communications model. A model that assumes the network is commoditized and ubiquitous. This breaks hundreds of years (in telecommunications) of business model and world view. Generally speaking that world view gap is what allows - or prevents - a person from “getting it” when it comes to your innovation.

The important part is that the premises you based the innovation on still garner nods of agreement. If they do - you are innovating. If they don’t it might just be an idea that legitimately makes no sense.

Tags: communications, innovator, innovator dillema

What did you do last weekend?

Monday, October 20th, 2008 | AZ Small Business, AZ Tech, Business Model Innovation, Emerging Technology Practice | Comments

I hope you had fun. I was at Phoenix Startup Weekend working with a team of smart, energized people to create a new company in a single weekend.

The result - Reserve Chute - is sheer genius.

This one time, at Phoenix Startup Weekend (http://phoenix.startupweekend.com) actually held in Chandler, AZ, a band of brothers, and one sister, came together to create a new company called Reserve Chute. With it’s main offering a personalized data backup service that permits users to grab their data from online sources like GMail and others and save them to a storage device of their choice. This is one cool and innovative service that should be on your “Must Have” list. Your data on your terms for when Web 2.0 becomes Web 2 point Oh no! What more could you ask for. For more information, visit www.reservechute.com and sign-up for this unique and powerful service offering.

If you use online applications to run your business you need to check Reserve Chute out. It might be the best thing you ever do for your business.

The following photos are courtesy of Adam Nollmeyer - Thanks Adam. You can find Adam’s work here.

UPDATE - The photos below are actually courtesy of ccl1111 - you can find his photos here. Adam’s photos are still great… be sure to check them out as well.

Tags: AZ Tech, innovator, phoenix startup weekend, Reserve Chute, useful technology

Can we please stop talking about monetization?

Wednesday, October 15th, 2008 | AZ Small Business, Business Model Innovation, Experimentation, Innovation, The Future | Comments

I can’t take it anymore - I just can’t.

NOTE - this post was triggered by a fine post (and subsequent FriendFeed discussion) by Mark Evans - which you can find here.

The idea that you can create a “cool” service, attract massive numbers of subscribers, and then monetize the subscriber base is insane. Always was, always will be. But it is the Google model. They created a web search service (cool) and then once they became a powerful player in web search they became an ad platform (monetization) - right?

That however, is a myth. The reality is Google was solving a real, important problem. The web was growing really fast. Creating a way for people to find the content they were looking for was a known problem with existing solutions (remember Yahoo and Excite were already out there). The existing solutions were already generating revenue - by placing adds in their content (remember the whole aggregating eyeballs thing?). What Google did was create a better search solution (product innovation) and refine the exiting business model from ad placement (putting ads on your blog) to becoming an ad platform (business model innovation).

So the reality of Google is that they solved an important problem via product innovation and solved an important problem via business model innovation - by creating an advertising platform which could be leveraged by any advertiser.

But the myth is so much more fun - couple of guys create a really cool way to index the web for relevance and everyone wants to use it. Now they can figure out how to make money. We all took the bait. The Bubble 2.0 story became “create a cool service, generate buzzz, aggregate tons of users, and then generate revenue”.

Here is the bad news - that is the same myth that created Bubble 1.0 - remember? Bubble 1.0 said - “Don’t worry about revenues - just grow really, really fast - once you have lots of growth revenue and profits will come.”

As Britney Spears would say “oooops, I did it again“.

What is real is that the winners solve important problems that have enough value that people will pay for them. Finding a business online (Google) - huge problem, great solution = $$$. Selling stuff I don’t want/need to someone, anywhere who does want/need it for as much as possible (eBay) - huge problem, great solution = $$$.

So let’s make a deal. Let’s stop talking about “cool” services, how fast they are generating page views or subscriber growth or any other measure until they tell us how they are going to make money. Let’s get back to creating services that generate value for the prospective customer - value that they are willing to pay for (again - ad placement is just a way of getting your user to pay for the service).

It isn’t important that the first business model is the “right” business model. What is important is that we are re-focusing all of our frenetic energy on what really matters.

VALUE = REVENUE

Tags: ebay, financial crisis, friendfeed, google, innovator, innovator dillema, technology, useful technology, value, value and price

More articles predicting doom for startups

Thursday, October 9th, 2008 | AZ Tech, Analysis, The Future | Comments

I feel like the grim reaper here… really I’m not throwing myself out a window.

So why am I posting these? it is important for entrepreneurs to NOT bury their heads in the sand.

I would also take a moment to point out that the majority of this news is coming from Silicon Valley - by far the easiest place to raise capital. If you are not based in Silicon Valley the news is probably worse.

The important thing is not to panic and plot a course of action TODAY - What should you do - you can start by reading Ron Conway’s letter to the companies he has invested in. I’m following this advice - and you should too.

Sorry, Startups: Party’s Over - Silicon Alley Insider

Sequoia Capital, best known during this bubble as the guys who backed YouTube, gathered some of their startups Tuesday for an emergency meeting. “The attendees were greeted by a cute image of a Grave Stone, with a message: R.I.P.: Good Times,” Om Malik reports.

Super Angel Ron Conway To Would-Be Startups: Don’t Quit Your Day Jobs - Silicon Alley Insider

Different story, says Ron Conway, who is perhaps the most famous angel investor in tech these days. Ron is best known for making very early and very lucrative bets on Google and PayPal, but he’s also known as one of the most adventurous angels of Bubble 2.0, and has invested in 130 companies since 2005. We asked him for his advice to would-be-startups last night, and he wasn’t nearly as encouraging:

“I would tell (entrepreneurs) to keep their day job until they got one year of funding, and if they couldn’t get that, then they’re not meant to start that company right now…. My advice to (start ups that don’t have a year’s worth of money in the bank) would be to raise money by reducing your own spending. If you can’t raise more money, you have to cut costs. And that’s what I’m harping on to my companies.”

Fred Wilson: My Thoughts On ‘Startup Depression’- Silicon Alley Insider

All startups are going to have to batten down the hatches, get leaner, and work to get profitable, but the venture backed startups are going to get more time to get through this process than those that are not venture backed. Here’s why.

Venture capital firms are largely flush with capital from sources that are mostly rock solid. If you look back at the last market downturn, most venture capital firms did not lose their funding sources (we did at Flatiron but that’s a different story). If you are an entrepreneur that is backed by a well established venture capital firm, or ideally a syndicate of well established venture capital firms, then you have investors who have the capacity to support your business for at least 3-5 years (for most companies).

Tags: Angel Investors, AZ Tech, funding, innovator

Innovation and Entrepreneurship require Optimism

Monday, September 22nd, 2008 | AZ Tech, Innovation, Regulation, The Future | Comments

It has been an interesting few weeks… no? As a Entrepreneur and Innovator who left a comfortable job at a Fortune 500 Silicon Valley software company to follow the dream of starting my own company - I can tell you the last few weeks have been rough.

• Will capital completely dry up?
• Will any micro businesses form - and if they do will they still find enough value in the services cosinity provides?
• How can I best conserve my resources for the next year (or God forbid 2 years) to catch the rebound?
• Is there any way to protect my assets from my house and startup?

And most disturbingly - I’ve had to consider shelving cosinity all together to protect my personal assets and my family. You see there is a reason I’m approaching 40 and just now starting my first business.

When I was young - probably 3 or 4, it was about 1974 - I remember my parents both lost their jobs at the same time. Nothing shocking here - 1973/1974 were some tough economic times. It didn’t go well for us; we lost our house and just about everything else. My father had a paper route - I remember that because I used to go with him early in the morning to pick up the papers for his route. But my most distinct memory of that time was being in the car having a conversation with my parents about my jacket. It was winter in Minnesota and the zipper had broken on my jacket, but we couldn’t afford to buy a new one.

When I was 12 my father passed away - leaving us a $10,000 life insurance policy and a stack of debt. My mom - who made maybe 20k at the time - was left to raise 3 kids. There wasn’t a day that went by when money wasn’t a huge problem.

I’ve always wanted my own business. During college in Minnesota (or as I like to call it my misguided musician phase) I was the general manager of a family owned pizza joint. It was a great gig. It was owned by a father/son team who were both very italian and very eccentric - we simply called them Sr. and Jr.

Jr. became like a father to me. At one point helping me investigate the possibility of buying my own pizza joint in an adjacent suburb. You know that book - the one that says you learned everything you really need to know in kindergarten? Well I learned - nearly - everything I would ever need to know about running a business at that pizza joint. It is where I fell in love with doing all the things required to own and run small business.

It taught me the simple things that we - so often - in the Silicon Valley echo chamber seem to forget.

• You have to make money - or you are going out of business.
• The only asset you have that matters is your customers and their goodwill.
• The only path to success is hard work.
• Employees will work their butt off - provided they know what they are working for.

If you want to know or understand my motivations - put those two influences in a martini shaker and mix thoroughly.

more after the jump…

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Tags: AZ Tech, innovator