you want to start something?

I caught a comment on Twitter recently that “a company built on free would be a pretty shitty company”. The author has since deleted that tweet, presumably because some of the best companies are built on free.

Brands like Gillette ($43B), Google ($185B), Apple ($205B) all leveraged ‘free’ in some form. King Gillette gave away his razors and sold the blades a hundred years ago. Google gives away ‘freemium’ access to their apps and services. The foundation of Apple’s amazing operating system is open source and given away for free and they’ve created and given away a world-class web browser engine, WebKit, which is being used free of charge by Nokia, RIM and Google in mobile products that are competing directly with Apple.

Ryanair’s Michael O’Leary celebrates the notion of free (paying for flights using anciliary revenue – in-flight meals, bag checks, hotel and car bookings, internet and games):
“The other airlines are asking how they can put up fares. We are asking how we could get rid of them.”

Amazing companies are built on free. 20th Century companies were built on the notion of scarcity. They focussed on the shipping of real goods, the transportation of atoms. The scarcity was real. With the exception of High Fructose Corn Syrup, we have a scarcity of many items because duplicating items means duplicating costs. But there’s no scarcity of bits. Bits are the lingua franca of the Internet and we have an abundance of them. Bits enable ‘virtual goods’ to be duplicated endlessly. The cost of duplication is zero so you’re left with the initial cost of creation which, when amortised over the potential millions of recipients, drives the individual cost towards zero.

Now the economics of scarcity keep some people in power – this is the essence of the haves and have-nots. But in a future where the real currency, the currency of bits, is something that is abundant, even more abundant than the air, how can these people retain their power? They can’t obviously and what’s worse, they don’t understand it and it scares the shit out of them.

The scarcity/abundance economics are the reason we’re setting up StartVI. In Belfast there is an artificial scarcity of office space (with over 1.26 million square feet of empty office space in Belfast). The scarcity is created by pricing the office space beyond the means of the businesses which could make use of them. It seems utterly insane that we’re talking about a scarcity of empty space. So, we’re removing the essence of that scarcity. And we;re providing more than empty space. Desk space in StartVI is free. Internet access is free. Light and heat are free. And we’re filling the empty space with people: hopeful entrepreneurs, wise business advisors, savvy investors. And they’re giving their time for free.

Tags: CoWorking, Startup by mj
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Marty writes about VI:

VI is an empty room. It needs painted, stud walls, electric points, heating and people to help do all of those things. It needs energy and creativity, ideas and heart. It will need money but for now it has enough to get by. It needs a good internet connection to give it tentacles to the world. It needs five businesses willing to take a risk at being all they can be. Why five? Because AirPOS, my spin out, is VI (1) and I’ll be on this journey with everyone else. And I’m very very excited about that.
…
VI has no business plan nor a strategy. It has no board of directors. It has no logo. We’re incubating the incubator too, if that’s not too surreal, and its success will be tied into those within its walls.

I disagree with Marty.

We do need paint, stud walls, electric points, internet access, desks, chairs, cork-boards, whiteboards and people to help make all of this work. And some of those people need to have energy, creativity and ideas and we want to help the people find their feet and make something of their ideas and creativity. But VI is much more than an empty room.

I snapped these pictures a couple of days ago:

 

Can you see it?

This room is filled with heart.

It’s leaking out the non-double-glazed windows. It’s seeping through the bare floorboards. It’s flowing out the main door and flowing down the sinks and toilets. This room is filled with so much heart that it’s alive.

In the coming weeks we’re going to have a paint party there. We’ll be there from early, hoovering up the dust and detritus, starting to paint over wood and bare plasterboard. We’re going to have power points and lights installed. A phone line will bring annoying ringing noises as well as sluggish ADSL broadband (until we raise enough money to install a leased line).

We don’t have the funds to maintain a large building out in the middle of a wasteland. We don’t have the budget to refurbish this building into a modern office suite with glass walls and an entire videoconferencing suite. We don’t necessarily have the connections to be able to call a President by his first name or have his Special Envoy over for tea. But these things don’t matter and they shouldn’t matter. We have heart to spare.

If you think of us as a competitor then I pity you. If this rag tag bunch of hobos with nothing but a little cash and a worn-out old clothing factory is a competitor then you’ve got a serious problem and you should seriously look at what you have there.

I’m thankful for a few people who have, perhaps unknowingly, pushed me to this. David, Marty, Aidan, Jason, Alex, Rob, Simon, Ian, Bill and others. Some of you will know why, some of you won’t – but all of you have contributed to me putting something on the line and making something happen. You’ve all helped and I hope you can understand that you deserve some of the credit here.

This is just the beginning.

Tags: Commentary, Startup by mj
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Fraser is absolutely right. What’s stopping you?

When I was being consulted on a funding programme recently, it was made clear that funding would not be available for capital (hardware and software) purchases. My response –

So, to start your company, what do you need? Sound off in the comments!

Tags: Commentary, Startup by mj
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The State of Funding in 2009 was a blog post I put together a few days ago.

It’s not meant to be definitive and there are other ways to get funding.

I think we should recognise the efforts of one local entrepreneur who managed to energise a local MLA into seeking funding for his startup from two local property developers. This sort of ad-hoc business angel network should be taken as an examplar. Never before have I known a local politician to take the plight of startup entrepreneurs so seriously. Would it be that other politicians would follow suit and assist us in the building of an incubator and seed fund for startups.

So. I mentioned yesterday that a small group of interested do-gooders are opening an incubator and starting a fund.

We reckon that businesses will stay in the Incubator for 6 months – 1 year and then will be able to graduate to other premises (for example CoreBelfast or many of the Serviced Offices around the province).

The fund is going to be made up by interested do-gooders. It’s small amounts individually but it only takes small amounts to get a startup off the ground. We’re going to talk to some ‘professionals’ about the legals of this obviously (recommendations welcome)

Tags: Do Something Now, Startup by mj
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The Economist: Nokia tries to reinvent itself:

ASK Finns about their national character and chances are the word sisu will come up. It is an amalgam of steadfastness and diligence, but also courage, recklessness and fierce tenacity. “It takes sisu to stand at the door when the bear is on the other side,” a folk saying goes.

We have this feeling. We have it. We likely don’t have a word for it. And that’s a damn shame.

We need something to change. Northern Ireland will always have difficulties because we lack the environment we need to excel. Part of this is historical, part of it is just the way our culture is built. We have the talent, we have the brains, we just lack part of the execution. We will never have the same number of angels and funds as Silicon Valley. So we have to make better use of what we have. We will never get the massive DoD contracts that Israel secured so we’re going to need to find other ways to make our mark. We need to have the foresight to prepare for the future, the charisma to make friendships that will last and the heart to build it. Not for our own gain but for the gain of tomorrow. Well, starting from today, the first week of January 2010, we’re going to change that.

We’re going to start an incubator.
We’re going to start building a fund.
And we’re going to do it in Belfast.

So I’m looking for a word in Irish to express something. To express the passion about how I choose to spend my free time. There’s some candidates here – and the front-runner so far in bold.

Tags: Commentary, Do Something Now, Social, Startup by mj
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