The CTO CoFo and other quasi-mythical beasts

Jase Bell is mostly, pardon the pun, on the money: Put bluntly it’s a big stand off. The startup founder (“Hey, I’m the ideas guy/gal!”) goes tail wagging desperately looking for a tech co founder, someone who can look at the holistic view of the startup, the long term, code the iOS app, the Android … Continue reading “The CTO CoFo and other quasi-mythical beasts”

Jase Bell is mostly, pardon the pun, on the money:

Put bluntly it’s a big stand off. The startup founder (“Hey, I’m the ideas guy/gal!”) goes tail wagging desperately looking for a tech co founder, someone who can look at the holistic view of the startup, the long term, code the iOS app, the Android app and the back end, the reporting…. those unicorns don’t come cheap, circa £75,000 p/a if you want a quality tech co-founder, someone who will be “all in”. Your short runaway will become a lot shorter, that £300k seed you need to get going is basically mandatory.

Of course there is another side to this. A finder needs to identify a good CTO.. It’s not like there is a large supply.

I’ve been on the fringes of the local software industry for the last 20 years I can count on my fingers the people I’d approach for such a vital role.

Part of this is their ability: they have to command respect, have a good reputation, be pro-active and have a can-do attitude and probably have done more than just worked for a wage in a local company.

The other part is my ability. Will I have to manage them? Am I a good judge of ability or character? Can I raise the cash to get them paid? And if I can, have I judged correctly; is this just another job or are they part of the team?

Over the years I have, with friends, built a heap of stuff you’ve never heard of. The 23rd Letter, SpaceNinjaCyberCrisis, ZOMBI, Syncbridge, Rickshaw, Infurious Comics, Eagle Lake; stuff that was always ahead of the market and if I had been smarter, better connected, more business-savvy, more predatory then I might be talking to you from a private island.

My opinion is this.

CTOs are incredibly rare in Northern Ireland. And when you find them, chances are they will be working for a high five-figure salary with benefits within a secure FDI company doing work well beneath their ability. Their lifestyle will have grown to demand that salary and only inspiring friendship or a mid-life crisis will urge them to move. That will be a lot of risk for the aspiring CEO – because you’re banking someone’s life on the strength of your idea and using your relationship as collateral. And the money had better follow.

As you get older it will be more about the money and less about the relationship: so start young.

Why 3D #3ddojo

Yesterday we had record numbers at #3D Dojo at the University of Ulster. There were kids designing game objects, real-world objects and expressing their imagination. The future for this is preparing children for a world where they will be interacting equally with virtual objects as real-world objects. The 3D Printing revolution is literally on the … Continue reading “Why 3D #3ddojo”

Yesterday we had record numbers at #3D Dojo at the University of Ulster. There were kids designing game objects, real-world objects and expressing their imagination. The future for this is preparing children for a world where they will be interacting equally with virtual objects as real-world objects.

The 3D Printing revolution is literally on the cusp. I predict that 3D printers will be on the Christmas lists of many kids in 2014 and I would be surprised and shocked if Microsoft doesn’t produce a 3D Print Kit for the XBox One, complete with a Kinect-based scanner, a controller-based modelling tool, an asset library and a 3D printer that only works with the XBox, Windows, Surface and Windows Phone. In fact, they should do this because Apple won’t.

Some people wonder what the attraction of 3D printing is – I’ve often joked that it’s because we can never get enough of small pieces of brightly coloured plastic crap but it’s much more than that. It’s beyond the production of tiny toys that would previously have come out of breakfast cereal boxes. It’s further along that, perhaps revolutionising the Kinder Surprise (currently illegal in the US due to a choking hazard – but heck, print your own Surprise!). It’s even further than allowing a few specialist applications such as printing your own camera-mount gromit for your telephoto lens.

But it’s really the transformation of bits, the transfer of information, into atoms, into physical objects. We call it 3D Printing but we could also call it Cyber Manufacture – this is a revolution as big as the printing press. This is infinitely bigger than the desktop publishing revolution.

3D printing isn’t about printing someone else’s plastic crap, it’s about printing plastic crap that is specialised to you. That has your unique signature.

  • You receive a hearing aid that you print the housing for, fitted perfectly for your ear without the cost being borne by the health service.
  • Your dentist is able to 3D print dentures or implants while you’re still under the numbness of an injection reducing the number of visits and shipping of parts.
  • Fitting of prostheses becomes incredibly personalised and you might be able to bring your own designs home for printing and colour-matching. Your false hand can match your evening wear.
  • But remember that we’re not limited to plastic in the future. Why can’t a 3D printer layer in porcelain or bone to match your bone injury.
  • Why not print in cartilage or a bio-inert structure and then layer in epithelial cells. That’s an ear or nose replacement. Or even a non-human prosthesis. Cat ears? A tail?
  • Through research in Stem cells, the limits for personal body parts – organs, blood vessels, skin – becomes unlimited.
  • Why can’t a 3D printer lace circuitry through a piece of plastic crap? Laying the pathways for electronic components. That would result in a lot of really cool Iron Man costumes with blinking lights.
  • We’re not limited to one type of plastic, or one material in the same printer. The limitations are really in size. How big is the printer and will the structure self-support?

Teaching competency and comfort in 3D is one further way that our country can differentiate itself. Folk like Greg Maguire and Greg O’Hanlon (both at the University of Ulster) are doing stuff right now. 3D printing might end up bigger than the Internet, it will certainly be bigger than ship-building.

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 … Continue reading “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”

SBRI Briefing in the Assembly today

That this Assembly calls upon the Executive to actively promote and raise awareness and understanding of the Small Business Research Initiative (SBRI) across the public sector; and further calls upon the Executive to put in place appropriate measures to increase uptake of the SBRI by Departments and the wider public sector to help stimulate and … Continue reading “SBRI Briefing in the Assembly today”

That this Assembly calls upon the Executive to actively promote and raise awareness and understanding of the Small Business Research Initiative (SBRI) across the public sector; and further calls upon the Executive to put in place appropriate measures to increase uptake of the SBRI by Departments and the wider public sector to help stimulate and drive innovation, especially in local micro-businesses and small and medium-sized enterprises.

SBRI is, in my opinion, possibly the most important tool for government to support small businesses in Northern Ireland. Northern Ireland is 98% small to medium enterprises, and 95% micro-businesses. Yet, the very people who provide the bulk of the private sector get the least assistance.

You see, it’s not funding, it’s procurement. It’s not a grant, it’s a purchase order. And it also neatly solves the problem of government not getting what they want out of the current procurement jungle (though they get what they ask for, to all our detriment).

The Biggest Lies Start With: Startups need…

I’ve been ruminating this blog post over the weekend and then an article on Techcrunch just spurred me to put the thoughts into electrons. I’ve been guilty of using the words “startups need” many times. There’s always something they need whether it is access to better talent, better markets, better funding alternatives. A startup is … Continue reading “The Biggest Lies Start With: Startups need…”

I’ve been ruminating this blog post over the weekend and then an article on Techcrunch just spurred me to put the thoughts into electrons.

I’ve been guilty of using the words “startups need” many times. There’s always something they need whether it is access to better talent, better markets, better funding alternatives. A startup is like a newborn baby; it needs access to certain resources, it wants access to other resources and, despite our feelings on the matter, it can get by perfectly well missing out on others.

90% Failure Rate And Why This Is Still Great

The article states that 90% of incubators and accelerators will fail to provide the massive high-growth companies they aim to. And that is okay. Because the important thing with this market is not the guarantee of success, but the taking of chances. And the important thing to realise is not what startups need, but what “we” need.

In a Northern Ireland context, startups who intend to grow fast will either have a rapid expansion programme based on sales or they’ll leave. Because the sort of cash that enables pre-revenue growth simply isn’t available here. We, speaking as the Northern Ireland private sector collective, need these companies to start here, to develop here, to be funded here and, most importantly, to stay here.

By turning this conversation around, it helps our leaders understand the stakes. This is not about small companies trying to get as much out of the government as possible in a market where local private investment is risk-averse, property-focused and afraid of technology. This is about the government putting in steps to avert their own doom. Governments thrive on taxes and without the taxes gained from “adding value”, from those productivity benefits from expert workers, governments can find themselves unstuck.

There’s a limited window now for the government to do what it needs to do for its own sake. Not for the sake of the startups, not for the sake of a few entrepreneurs or their investors, but for the sake of every civilian in the province.

We need to make smarter finance more accessible, we need to make markets more accessible, we need to ensure that the best people to hire for the knowledge economy are found here. By doing this, and only by doing this, can we ensure that startups will be created here in the volume necessary for our continued affluence.

There’s Digital Hubs and digital hubs.

There is an inevitability of a concentration on the digital knowledge economy for Northern Ireland. We have a thriving group of developers and designers in Belfast, a huge amount of ambition in the North West and a heap of activity building in the Southern and Western counties of the province. Last week I went to … Continue reading “There’s Digital Hubs and digital hubs.”

There is an inevitability of a concentration on the digital knowledge economy for Northern Ireland. We have a thriving group of developers and designers in Belfast, a huge amount of ambition in the North West and a heap of activity building in the Southern and Western counties of the province.

Last week I went to the Digital Hub along with Momentum, Belfast City Council, InvestNI and representatives from DCAL and OFMDFM.

We heard the spiel about how it brought some regeneration to the area, that they still have a considerable subvention from the government after 10 years (less than €2m a year, but overall investment has been around €30m since inception and may not include transferred assets).

I also spoke to some of the guys in some of the businesses. They said they wish the Hub was one mile closer to the city centre, that the reason they use bikes and public transport is because they don’t want to bring their cars to that area of town and even the big lads feel a little concerned leaving the Hub with a laptop.

It re-iterates my belief that a city centre location for a Belfast Hub is essential. Not least because Davy Sims put together a map of Digital Media companies in Northern Ireland back in February of 2010 and discovered most were within a square mile in the city centre.


View Belfast Media Square Mile in a larger map

I don’t think we want a straight property play like the Hub in Dublin. We’re a small region with a big ambition so we have to think much more strategically about what goes where. We also need to be 100% joined up. I think I have the support of the Digital Circle steering group in my opinions and in my vision for a digital hub-type infrastructure in Northern Ireland. It’s a big plan, an ambitious plan, even an audacious plan and if it delivers, it will bring the concept to the province as a whole rather than just to a small region.

ideaspace

This morning I had coffee with Marty Neill (from AirPOS and Brian McKimm (from eSynergy). I could have done with another couple of hours (and a whiteboard) but in all I was very pleased with the conversation even though we may not have agreed on the finer points. In essence, I was pitching to try … Continue reading “ideaspace”

This morning I had coffee with Marty Neill (from AirPOS and Brian McKimm (from eSynergy). I could have done with another couple of hours (and a whiteboard) but in all I was very pleased with the conversation even though we may not have agreed on the finer points.

In essence, I was pitching to try to increase the “ideaspace” in Northern Ireland.

I’m of the opinion that there are small ideas and big ideas. The theory is that all of these ideas tend to have equal chance of happening in any given time. The difficulty then is not only finding the time to just have ideas but also having the space, time, resource and, probably most importantly, the network, to realise the idea.

Sometimes what seems to be a small idea can turn into a big idea and it’s not always apparent immediately. Facebook began as a blog, turned into a college network and is now permeating every aspect of our lives. Twitter began as a way to send text messages to groups (and have them be able to easily reply to the group). Google began as a search engine and now does pretty much everything.

I can’t speak for others in this but I’m pretty sure that AirPOS started because Marty realised that Point of Sales systems were hopelessly outdated and none of them used the Internet. I’m sure that Onotate started because Rumble Labs needed a controlled way to share graphical assets with clients and generate appropriate feedback. I’m certain that Planzai started out as a way for Richard to organise some of the activities in his dual life as a rockstar software developer and a rockstar. But these were big ideas masquerading as small ideas.

We’re working on methods now to increase the ‘idea space’ in Northern Ireland. We’ve been doing it through the InvestNI Collaborative Network Programme and we’re continuing it with the development of an “innovation hub” in Belfast. Part hub, part incubator, part soft landing zone; the intent is to provide the default industry location for the development of ideas and collaborations. It’s what I’ve been doing for the last three years – with the ideaspace being virtualised – and it’s what we’re going to be executing on for the next three years.

If you’re interested in being a part of it, drop me a line.

Pivot? No, Tack and Gybe!

This weekend I was entertained by the news that Color, a social media startup, was moving from “mobile” to “FaceBook” as their primary platform. Whether you think that’s a good idea or not or whether the only thing Color has going for them was the $40million they received in venture capital, it represent a pivot … Continue reading “Pivot? No, Tack and Gybe!”

This weekend I was entertained by the news that Color, a social media startup, was moving from “mobile” to “FaceBook” as their primary platform. Whether you think that’s a good idea or not or whether the only thing Color has going for them was the $40million they received in venture capital, it represent a pivot in their strategy.

My second company pivoted. I didn’t like it much. We started out doing products, bootstrapping due to the complete lack of seed funding in the region (something that has been fixed) and ended up selling our souls to contract development. Yes, we were bootstrapping but only due to lack of choice. And I hated it.

I spent last weekend sailing with Ballyholme Yacht Club and earned my RYA Level 2 “Start Sailing” certificate. The core concept of sailing is summed up by five essentials:

  • Trim
  • Balance
  • Sail setting
  • Centreboard
  • Course Made Good

Trim and Balance are all about keeping yourself in the boat while the wind and waves are trying to throw you out. In dinghy sailing, keeping the boat at flat as possible means you can eke out the best performance. Plow the bow in too far and you lose speed, similarly too much weight on the stern causes excessive drag.

Sail Setting is about keeping the wind in your sails. When sailing, your primary method of locomotion is through the wind. While you can make some progress on the currents, surfing the odd wave and negotiating the tides, it is with the wind that you make progress.

Centreboard, also known as a daggerboard or keel, provides resistance to the wind driving you sideways and off course. It also helps in keeping you in a boat. You have to know when to set the centreboard hard or when to pull it in a little to reduce drag.

Course Made Good is figuring out which way you have to point your little boat in order to arrive at the destination, taking into account the current and tides, waves, obstacles, other vessels and, of course, the direction of the wind. Sometimes the most direct route is impossible (sailing upwind) and you may have to tack or gybe your way through the wind to reach your desired goal.

So what are tacking and gybing?

Tacking is moving your boat against the wind to change direction. As you face the wind, the power is lost from the sails. You lose some speed but the manoeuvre is controllable, predictable and if things go wrong, the worst thing that can happen is that you slow to a stop.

Gybing is moving your boat through the wind to change direction. The wind is always fully in the sails, the process is much quicker and much more violent but there is much more risk of losing control and ending up in the water.

Knowing when a tack is needed and when only a gybe will do is something that is gained through experience. It depends on what direction you are going, where you want to go and what direction the wind is heading. it depends on what risks you are taking. Our instructor, Alice, related a tale of how she was forced to tack multiple times during a race when one gybe would have completed the turn because the high winds and risk of capsize would have lost her the race.

I can’t help but relate the concepts of tacking and gybing to startups who feel the need to pivot. In fact, all of the five essentials of sailing can be related in some way and would, in my opinion, go well in a business plan.

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: … Continue reading “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 … Continue reading “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.