The Importance of Clustering and How To Do It

Earlier this year I got an invite to a reception at Buckingham Palace as part of the UK Tech Clusters. The discussions around clustering tend to range from the aspirational (let’s working together to teach everyone in the country how to code) to very practical (if we have shared workspaces as part of our remit, why not provide passes to each other). But there needs to be more than this.

I am never a fan of intervention where it is unneeded but I am a fan of creating contrivances which lead to repeated behaviours. Digital Circle has never had the resource to create these contrivances but I think that economic development responsibilities (which lie primarily with DETI, InvestNI and the new SuperCouncils but also, in line with the programme for government, with every government department, agency and ALB), are something that needs intervention in order to be habit-forming.

Interventions do not need to be large but they need to be repeated.

But why are these things important?

The first thing that I would say is that it starts to create economies of scale. The more people sign up to your focused programmes, the more benefits they will bring. No-one likes to present to an almost empty room. Your indigenous SMEs will need people to talk to.

You also start to create networks of scale. This means the companies in the area start to lean on each other for work, for shared projects, for new bids for work. You have to build your indigenous companies until they are something to talk about.

Lastly you start to build reputation of scale. It’s easy to say that the Game of Thrones television series has brought attention to Northern Ireland but equally The Shore, Good Vibrations and The Fall have, perhaps to a lesser extent, created buzz. And this is why foreign direct investment companies are then attracted – they come for the work but through hiring and acqui-hiring, they gain a foothold and an investment in the region.

I was at DETI today and the topic of NORTEL came up. When NORTEL failed, it was at the height (or, depending on your perspective, the lows) of the Internet bubble bursting. But it had been a shrewd investment in retrospect as it ushered in a new software industry in Northern Ireland which led to new start-ups in cyber security, in mobile apps, in fin-tech and in health technology. It was a genuinely excellent investment as these start-ups are all indigenous and sometimes (like Wombat and NYSE Euronext) they lead to something bigger. (Thanks to Eoin McFadden in the Innovation Policy unit for the intelligence and foresight as well as the coffee!)

We’re busy using the power of our clusters to educate kids in coding and design, in 3D modelling and creating interactive experiences because we see that as being the future for a small-population knowledge economy. The difficulty in standing and competing on a global stage can be defeated with smart working, with market trend analysis and with working together to create something bigger.

That’s what clusters are for.

We’re not going to get out of this mess with the thinking that got us in here.

From Pandodaily:

The 60-person startup is pulling in close to $750,000 every day, according to our reporting. That’s 50 percent up from the $500,000 the Times reported in early October. Not bad for a two-year-old company, whose two big-earner games launched in June and August respectively.

This is an important point for local investors and “business appraisal” executives. This company is two years old and they just launched their big earners in July and August of this year. It took them 18 months to produce a hit. Rovio, the other big game dev in Finland took 4 years to have an overnight success with Angry Birds.

Lesson for locals: it’s not going to be overnight but compared to biotech or ship building, it’s not going to be costly.

We’ve also heard that the startup has very low costs, spending as little as $60,000 a day. Again, Paananen wouldn’t confirm that figure, but he did say that user acquisition costs are very low, because the vast majority of its traffic is organic. The games spread by word of mouth because they are inherently social, he said.

They’re bringing in $750,000 a day and their costs are less than a tenth of that. Think about that for a minute when you consider the “high margins” that companies like Apple commands. 90% margins for this game. 28% margins for Apple.

Supercell has venture backing, but not a lot given this torrid growth. It has raised $15 million, including $12 million from Accel Partners alone.

This is the rub.

Northern Ireland has several venture funds but all of them are little. None of them would be able to meaningfully contribute to a $12M funding round. Also, Supercell is based in Finland but has operations in San Francisco. With backers like Accel Partners and London Venture Partners, it’s plain that Northern Ireland is attempting to play in the big leagues with their local venture capitalists. But having the plaque on the door isn’t the same as walking the walk.

Northern Ireland needs to accept that it has seed capital and treat it as such. The terms in the average term sheet from [local venture capital firm] are so punitive that I can honestly say they’re aimed at idiots and anyone with an ounce of savvy would just leave. There are bigger and better funds who actually are motivated to succeed (compared to tiny local funds who don’t give a shit whether you succeed because they get their fees anyway).

For a country of just over 5 million to produce a Rovio and a Supercell in just the last few years…well, that can’t just be coincidence can it?

No, it’s not a coincidence. Of course it’s not. They have a different environment. It’s a wealthier nation, but they also apply that wealth appropriately. In June this year, they launched a new €70M programme to support the games industry. In comparison, Northern Ireland has contributed almost nothing to sectoral development of this industry. They contributed £235K over three years from 2008 to 2011 but only if industry contributed £265K in effort (and the industry effort had to be given first).

This is separate from grant schemes for “creativity” or funding for R&D. I’m talking about direct sectoral development.

€70M versus £235K is considerable. Is it any wonder that the NI Digital Sector is lagging? I’ve come up with half a dozen ways that government could help develop the sector, at incredibly low risk to the public purse. I’m getting tired of thinking of new ways to push things forward when local companies cannot afford to take risks.

Now, if a local MLA comes up with this:

And everyone agrees that something must be done and nobody does anything, is it any wonder that we never seem to get the results we are looking for?

“We’re not going to get out of this mess with the thinking that got us in here”

Where does he get those wonderful toys….

Further to my earlier post about CIIF, I think it’s important to point out what an amazing opportunity this is for web and mobile companies in Northern Ireland. I remember the first time I saw a CSS-based parallax scrolling background (Example) and I marvelled. And then I saw the Safari tech demo pages (Example) and I marvelled again. I just loved the falling leaves demo and I absolutely love what Paul Hayes did here.

It cannot be underestimated what the creation of toys can bring in terms of eyeballs. For a talented web developer team, they might get 100,000 hits from Hacker News but it only takes one new client (resulting from the coverage) to pay for the investment in the tech demo. The Creative Industries Innovation Fund can help a smart development team make great amazing toys.

For instance: look at this Kickstarter for A Canvas and WebGL Programmer’s Text Editor by Robey Holderith. He’s seeking $4,096 in order to “pay” him to build this. CIIF is offering up to four times that amount of money to get people to build amazing stuff.

I also look at the recent release of Kindle Cloud Reader which, although not perfect, really shows how good a web app can be (especially on iOS if you pin it to your home screen and therefore lose most of the Safari borders).

CIIF is looking for 50 great projects. Some of them will be tour guides, some of them web apps, some of them promotional videos but I’d love to see some really REALLY inspiring HTML/CSS stuff. I want developers and designers to thin hard about breaking the laws of (web) physics with this stuff. Do something that makes your peers go “wow”. Make it kick ass with WebKit and use your network to test and refine it.

And if you’ve already made some wonderful toys then please send me the link for it. We need to showcase talent when we see it. I want to rave about my colleagues and countrymen and tell everyone about their talent because while there may be appsterdam, we were doing it first with XCake.

Now, I know this isn’t always going to be possible but I am reminded of when the XCake folk have been able to stand up in front of their peers and tell them all about their latest view controllers. It’s gobbledygook for the rest of us but it shows the talent of the teams involved.

What I’m saying is: Make something awesome. Make a wonderful toy. And tell everyone.

Anyone fancy going to the Southampton Boat Show in September?

The show is on from the 16-25 September in Southampton, no less. Advance tickets are very reasonable. See here.

Just interested in seeing if other travellers would like to attend as I’d love to make the trip down maybe for one of the weekend days.

Bringing this back into the realm of the day job: I went to the London Boat Show earlier this year and I was struck by one thing: how few of the traders and chandleries in the exhibition stands were prepared for taking payments other than cash. I’d see this sort of market ripe for companies like AirPOS to provide mobile points of sale turning netbooks, tablets and even phones into a point of sale for small businesses.

The first business show that I exhibited at really drilled home the concept:

Don’t give me your business card, give me your credit card.

For smaller items, you just want to buy, for larger items you want it to be shipping to your house just after you get home (or waiting in your office). Having a connected Point of Sale with an online store can make all of the difference. It pains me that so few companies take this on board.

Startup Capital: Sean Blanchfield nails it.

Sean Blanchfield writes about Startup Capital in Ireland:

I believe that online technology companies are the way forward for Ireland. It is now clear that online technology companies can be as financially successful as more traditional businesses. However, unlike other sectors, it takes very little money to start an online tech company. Neither does your geography limit your market. All you technically need are brains, and enough money to pay other brainy people to work for you. No need for factories, or 20 years of lab research, or anything like that.

Unfortunately, there are problems providing capital in the relatively small amounts these companies need to initially launch themselves (say €20K to €200,000). There aren’t enough sufficiently cashed-out former technology entrepreneurs to fund at this level as angels. Instead, we rely on small investment firms doling out government money, and a couple of loose angel networks that can make small aggregate investments. At this scale, it’s not viable for investors to have excellent in-house domain expertise to help understand and vet opportunities. Because of this, the dynamics are not what you might expect. You may encounter:

  • Folks on the investment side getting confused and thinking they are on Dragon’s Den
  • Rife suspicion that entrepreneurs exist to con money out of investors so they can run away with it to paradise island

He goes into a lot more detail so it’s a recommended read.

Airpos Opens Office In Silicon Valley

From NewTechPost:

Airpos has announced that it is moving on from releasing beta versions of its product to making it fully available to the public and it now has a brand new portal to its site. Airpos was one of the companies showcased at the 4th Annual Irish Technology Leadership Group (ITLG) Awards Ceremony which took place at Stanford University in April.

Marty and the guys have sweated blood over this product, ignored all of the advice from the “volauvent boys” and went with their guts. They’ve shouted at friends, infuriated officials, shot from the hip and followed their hearts. They were the “pilot” for the StartVI programme run by David Kirk and hosted by a group of passionate individuals here in Belfast.

Opening an office in Silicon Valley is a great step – getting close to the biggest market in the world.

Location: it’s a feature, not a bug

Apple came under fire this week as it was revealed (by a research paper dating back to 2010) that a file is created and maintained on the iOS system which contains location data for every time you have queried location services. For me, as you can see from previous posts), it presented a way to map my movements. No big deal as you can also see, I publish my movements live on Latitude.

At no point is it true (at the moment) that this location data is sent anywhere. It is stored on your phone so if you lose your phone to a wily thief who cares where you drink coffee more than he or she cares about your contacts database, browser history, cookies and access to your email, then you may be in trouble. But it’s not stopped quite a few journalists from making the accusation that Apple knows where you’ve been and is obviously using this to beef up iAds or something even more sinister!

It turns out that Android does the same – the difference being that they only store the last 50 entries. This is entirely sensible and highlights an error in the way Apple was handling this data. It’s not clear whether this data is transmitted to Google (and with their recent history, it would not surprise me) but we should probably wait until it’s confirmed. A sceptic might suggest that Google only stores the last 50 entries on device because it uploads them to their secret Texan datacentre constantly anyway but I’ll not accuse here.

The bottom line is that Google is handling the caching of the data correctly and Apple is not. But it makes me really want desktop and mobile apps for visualising my location data over time and having this as an opt-in service or better still ‘an app’ is obviously what I want. Latitude does a half-assed job of recording and a worse job of reporting and it’s the reports that I’m interested in. I want to see where I go. At what speeds.

So where are the apps that really do Location well?

Where are the apps we’ve been waiting for?

It has been nearly a year since I first came in close contact with the original iPad. It blew my mind, and since then, it has become a daily accompaniment. I create content on my MacBook Air, but I spend a lot of time consuming content and media on the device. In fact, if I had to guess, I use my iPad as much as I use my notebook computer.

However, if iPad, the device, is more magical, the applications (apps) for the device are anything but. For nearly a year, I’ve been waiting (and waiting) for experiences befitting the device and its hardware capabilities. – OM Malik, GigaOm

I concur. I’m still waiting for the amazing experiences that we think we deserve when we tote around such amazing hardware. And if that goes for iPad, then it goes double (or maybe tenfold) for Android, WebOS and anything else out there.

We do have time, however. The mouse went from humble beginnings in academic and commercial research in the 60s to initial release with the Macintosh in 1984 and it’s still probably the major input metaphor for computers in existence. We have been poking at our computer screens with a single fingertip, the mouse cursor, for over two decades. While we all like the look of the future with multi-touch (and from the Kinect, zero-touch) interfaces, we still await the apps which will fulfil this promise to us. New touch-based methods to consume old style media ain’t a big deal.

We want mobile-optimised hyper-local-aware software, designed for touch and equipped with contextual understanding and social-network awareness so we can get the most personalised experience.

And this is the low bar.

If we can think of apps that can fill this criteria in minutes, imagine what we could do if we were in that business, if our job was to not only talk about the next big thing but be part of the team creating it.

Language Learning for Kids?

I’m looking for resources for teaching young kids Spanish and French. In my ideal world these would be iPhone or iPad apps, with goal-based outcomes built-in. Seems like a missed opportunity.

Of course, this is one of the things I’d like my new startup to build. Assisted Learning Experiences. Teaching by Asking. Learning through Play. Assessing by Doing.

That’s one of the reasons I’m pumped to be going to Learning Without Frontiers next week. I’d love to put together a group of folk interested in technology based learning and teaching. I even registered a domain for the grouping!

Musing about Learning and Teaching Technology

There’s a group of companies here in Northern Ireland who are focused on the growing educational technology market.

Educational technology is, for most part, just the application of general technology to the education market without necessarily the grounding of technology with pedagogy or learning. Technology manifests as tools, as a medium and as a network. We might use Photoshop to teach a certain skill, we might populate a wiki, blog or other content management system in order to store and record or we might use email or instant messenger to communicate – but none of these have any specific pedagogical or learning purpose.

I suppose the difference is whether you are using the technology to teach as opposed to teaching about the technology.

Some of the ideas I have regarding ‘educational’ technology are certainly in the tools, media and networks areas. Tools to inform parents of progress, new methods to deliver established content and the development of peer groups beyond the school all fit into these neat categories.

Applying game reward principles to learning and teaching is an enhancement that I can’t accurately describe in the context above. While the tools may be the browser or the iPad, the medium may be the web or dedicated apps (with graphics, sound, video) and the network may be the reporting of achievements (either to the peer group, the teacher or the parents), the process of matching the query to the answer, the process of imparting the techniques for research and the striving for success will be part of the pedagogical delivery.

During my schooling, knowledge was analog. It was written in books, passed on through a formalised oral tradition and collected in condensed form for schools. This meant that if you wanted to know something, you had to visit a library, open a book, ask a teacher. The answer would be both “best effort” and also subject to the local bias of a region. To find out any depth of information, you had to be truly curious. Today, the search for knowledge has become trivial. A tool (the browser) used to access a medium (like Wikipedia) across a network (the Internet) brings the knowledge of the largest encyclopedias into reach of the most casual researcher. For depth, for interest, however, we have to rely on the innately curious; the quality of wanting to know more than your peers, to become excellent at something.

We have to develop the learning and teaching curriculum to create curiosity for the curious will inherit the earth.