Tech Entrepreneurs - Problem of the CTO

Focus on the development process

The biggest problem is not money or resources, it is lack of knowledge in undertaking the development process. Effort should be focused on creating an "open-source" development process for web-start-ups with a complete series of artifacts for them.

Process Model

Most web-start-ups that get past the concept phase, fail not due to lack of resources, rather they are unable to use the resources they have effectively. Most software projects are problematic, and for start-ups the problem of getting software developed in a efficient, painless way is a major problem. Little time or effort is spent in the specification phase and hence what is developed is often not what is required. We should develop an open-source framework which guides the development process.

How will your concept support web entrepreneurship?

Entrepreneurs will have a proven process to follow, which will allow them to reliably take thier concept through to creation. This will allow them to focus more on the business and remove uncertainty and risk from the "creation" phase.

What kinds of resources will be needed to get this concept off the ground and scale it?

WIll need expereinced consultants and entrepreneurs who have worked with the software and business development processes. Large technology consultancies compaines like IBM, Accenture etc might want to collaborate as they have already a large library of artifacts that would be very useful to the entrepreneur. These large organizations might also fund such an innitiative as it gives them credibility in the market and brings them very close to the "innovation" happening in the UK and elsewhere.

Interested, register at http://opencto.com

How could we get started?

A simple concept website (launched currently at http://opencto.com) and the structure of an open-source project would be needed and a comitte of credible industry leaders who could apprach other thought leaders and eperienced entrepreneurs. This committe with thier advisors would need to establish a roadmap and in a co-ordinated fashion start the collation of information, which will lead to the establishment of a number of artifacts and processes that entrepreneurs can later leverage. The goal is to create a standardized set of development processes and documents for all to share.

Software design vs Hardware design

Recently, I designed a circuit for a home project. It got me thinking about the differences between circuit design and hardware design. In hardware design, we operate with a set of discrete components, furthermore our design is constrained by: time, money, space, availability and power. Based on these constraints we would find well defined functional building block (components) and function by function construct a device that produces the desired output, given a particular set of inputs. This process is iterative, the design of the system follows the same process and any of the sub-systems. In some ways the constraints and the fact that inputs and outputs are well defined (making system design the same as that for sub-systems) makes the design process uniform and relatively easy. I was amazed at how deterministic my circuit design was as compared to software design.

In software design, we have become overwhelmed by the number of components, the complexity of the inputs and outputs, computing power is not and issue and time and money are not that easily measured a-priori (as they are in circuit design). The effect is that software projects are often not well constrained, can explode in complexity and the system design process may differ from the sub-system design process. Initially computer scientists tried to solve this project by creating objects, that were meant to be functional units that had inputs, outputs and state (thus mimicking electronic components). In reality they are more complex than discrete components, as anyone can design them, they take any number of inputs, they have an infinite possibility of states and have very complex outputs. It requires a great deal of discipline to constrain a software project in the way that a circuit hardware design project is constrained. 

Does Entrepreneuship Stimulate Economic Growth ?

Most people I speak to, seem to think that it is obvious that entrepreneurship is one key to economic growth. This is a very modern view-point in that the entrepreneur was never really considered in neo-classical economic theory.  I don't however believe that the answer to this question is as obvious as most people may think.

Economic growth is measured by a nations Gross domestic Product (GDP) which as the name suggests measures the economic output of the nation. So there must be some production or output for this domestic product to grow, this implies that the workers of the nation are adding value to some resource which previously had a lesser value (if any). This might be digging a huge whole and extracting diamonds, which are then polished and sold, or it might be using intellect and some intellectual property which is then sold around the world. Either way, no matter how you look at it, something has to be created or some value added.

If a nation has a large percentage of entrepreneurs who are not especially productive or successful, there will not be much economic growth. In fact they may be using important human and other resources in a very unproductive manner and ultimately do more harm than good. For one thing, unsuccessful entrepreneurs place a burden on the administration system (processing bankruptcy for example) they also eat up valuable opportunity cost (they could have been doing something productive in the meantime). Furthermore in nations where entrepreneurs are not especially innovative, i.e they simply replicate what already exists, they simply saturate the market with more of the same - which is not sustainable in the long run.

For entrepreneurs to contribute to sustained economic growth, they need to be more successful than not and produce a some kind of "net productivity". The role of good government is thus not only to stimulate entrepreneurs, but also to help them be successful. So some co-ordination and collaboration is essential for this to happen.

Mobile, past, present and future

There is always a debate whether one can predict the future looking at the past or whether the past simply constrains our future thinking. I think both future looking and analyzing the past are useful activities in prediction.

Thinking about my career working as an engineer with mobile technology, starting in 1997 with the Motorola M301

A number of key technological elements have improved significantly over the last 15 years:


Battery

The m301 had a stand-by time of a few hours and talk time of about 20 min, the battery was large and heavy and had memory - charging a not-fully-discharged battery would lead to loss of performance. The official specs quoted the battery as "Included NiCad battery gives 12 hours standby or 70 minutes talktime". 

NiCad batteries soon gave way to NiMh which had twice the capacity of the Nicad. Then came the Lithium-ion which produced the same capacity with about 30% less weight. These technologies all served to increase the battery performance and reduce the size and weight of the battery.

Screen

The m301 is quoted as having "LCD Screen including a 2 line backlit Information Display", these limited character black and white displays have given way to high resolution color touch screens. The 1997 Motorola StarTac had a 4 x 15 monochrome display. 

Processing power

Phones around 1997, used the Intel 386 chip with a processor clocked at about 20 MHz  (see some specs here ) of course importantly, vast improvements have been made in power management and consumption which means that modern processors are not only smaller and faster, but also use less power than those of 1997. The apple iphone 4 uses a 1Ghz A4 processor which can run HD video for 10 hours (as a comparison - see this report from Jan 2011).

Component size 

Companies like MediaTek  are developing mobile chipsets which integrate many modern mobile functionality (wifi, bluetooth, duel/tri band, edge etc)  into one chipset and furthermore are designed to easily run modern OS's like Android. This is not only bringing down the component size of mobile devices, but also reducing power consumption and cost.

Data

Data is the key to offering a wide variety of applications to the consumer. A number of aspects are important, the storage capacity of the device (to store files) and the bandwidth available for download. Since the m301 networks began by adding GPRS which provided download data rates of 56-114 kbit/second, later Edge (max 473.6 kbit/s) and Evolved Edge (1 Mbit/s) where replaced by the roll-out for 3G technology which had data at the core of the protocol design. Modern HSPDA provides data rates of up to 42 Mbit/s. Thus mobile data rates start to rival previous generation ADSL. Moving forward 4G technology offers 100Mbit/s up to 4 Gbit/s for low mobility users.

The future


The big question is where do we go from here ? It is quite evident that R&D organizations will continue to improve battery capacity vs size and weight. Components will continue the trend to offer more processing power for less circuit board real-estate. Screen technology will continue to improve offering enhanced user experience. Mobile networks will continue to offer higher data rates (subject to capacity and investment) . All this means that increasingly we will access the Internet from our mobile devices.

Some things that we can expect:

• Mobile devices become ever more integrated in our daily lives (join the debate AndroidGizmo )
• Mobiles are used for payments (parking, supermarket, theater, cinema etc)
• Gaming on the move become more mainstream
• Continued advances in Location based services
• Virtual reality browsing (things like Layer )

As the mobile devices becomes more powerful, it is conceivable that it becomes our primary electronic device, slowing replacing the PC, TV , Sat Nav and Gaming console. Plug in a keyboard and monitor (you have a PC), connect a screen and satellite decoder (your TV) or you charger in your car (satnav).

Beyond that, as form factors become smaller and more powerful there is no reason why mobile devices will not become integrated into standard items of clothing and fashion. Sunglasses for example or some device that clips onto a part of the body. GPS in combination with motion detection would make the user interface easily controlled by the body as opposed to the keypad for many applications. We could expect to see the mobile being split into units. One purchases a controller unit, a separate screen (which may be in you glasses), Separate GPS or multimedia modules. In some ways this what happened with the original home computer prior to IBM compatible PC's. Initially everything was integrated, later the marker demanded configurable peripherals - a centralized unit with many add-on's.

If we think of the next generation mobile device as a Controller unit with a number of interconnected modules, delivering differing services (e.g screen, gps, gaming options etc), we can start prediction developments in software applications to take advantage of these more specialized connected modules.

Other interesting links

The History of the mobile
Wiki 4G

Beware of the pivot

A new term that is bouncing around the start-up world, is the term "pivot" which basically means to change direction or concept. Most entrepreneurs will change their initial ideas in some way at some time - this is in general part of the process of realising an opportunity. As one starts in the quest to develop a business, all the answers cannot be known prior to starting, for if they were known it would be easy - like following a recipe. Alas for most of us this is not the case, we have some notion of what things will look like and then embark, perhaps with a degree of ignorance on a journey.

Lately, I have had a number of clients or colleagues ring me up and exclaim with great exuberance, " we have pivoted !". I must say that this alarms and surprises me, changing direction should be part of the entrepreneurial process, but not an end in itself. The goal is not to pivot, the goal is to make your business a reality and if you should have to change direction along the way, so be it. But to exclaim and rejoice about the act of changing direction is not something in itself to rejoice about ! 

Monetising a website

The question of how to monetise a website often comes up. In most cases my clients have interesting content and have gained reasonable traffic in the order of 30 - 100 k unique visits a month. The issue then arises, how to take the next steps to monetize the website (generate revenue).

I categorize monitization into a series of categories, each building on the previous in terms of time and complexity to achieve and manage:

Lazy day, dream away

Here one the website generates revenue simply by placing adverts from one affiliate network or something like Google AdSense. Once the correct code has been added to the website and the account set-up there is little or no work (aside from maintaining the content - and making sure one gets the traffic). The returns here are typically low. However, one can expect to generate 100`s of pounds a month, if not more.

Lazy day, optimize

With some work on making sure your adverts are as relevant as possible to your target audience, some additional revenue might be generated. This involves correctly setting up keyword triggers and possibly using multiple affiliate networks, constantly scouring for the best deals. I.e those clicks that would generate the most revenue for your website. This requires slightly more work and attention and some more in-depth research and experimentation. 

Not so Lazy, Becoming a salesperson

Next in the level of complexity and possible returns is to sell premium space on your website. Naturally there is a cost associated and one must be sure that the investment yields the corresponding required return.  Naturally depending on the complexity, niche, reach etc of your site - you can structure your sales in a number of ways. In the simple case automated online advert placement - in the extreme a dedicated sales and after sales team. In this category you may mix affiliated networks with dedicated sales.

Even Less Lazy, Becoming Sales Focused

Next up is becoming wholly sales focused, so all revenue from dedicated advertising sales.

Starting to Work, Adding value

A further step would be to start officering value added services, the sky is the limit as to what these may be. But usually some kind of subscription in exchange for information or relevance. Most often you would still maintain sales of advertising space.

Working, Offering a product

Here there is some value add to your advertisers and clients and furthermore you are offering a product. A physical product related to your website or a webservice of some kind. This requires that you develop or source the product, have a CRM system - possibly a way to ship and bill etc.

Back from the Virtual, going physical

Lastly you not only are selling advertising space, some value added services and some products - but you also have a physical presence. I.e your business is not entirely on the Internet. Many traditional business start this way and later develop websites - few websites develop a physical presence. However, if done may add a competitive advantage and grow the brand.

The start up eldorado

Many blog posts I read and forums on entrepreneurship are filled with hype and half-truths. In many ways it reminds me of stories of gold digging over 100 years ago. Lured by the promise of fortunes, thousands of young men (and I assume woman) trekked in search of riches. Myths became reality, and the very few success stories soon fueled an entire industry around prospecting. Suppliers, transport, gold-exchange etc.

In many ways, I see the same thing happening around me - there are pitching events, workshops on how to attain funding, buzz-words and book-lists. The hype also elevates otherwise ordinary people to god-like status - a twenty something VC worker, a pitch event organizer etc. I recently saw a post asking for the best book on start-ups. Thats like asking what is the best TV program in the world. For one thing, the conception of what a start-up is and in fact what an entrepreneur is differs from person to person, from economy to economy. If you trawl the academic literature you won't find anything very coherent in terms of definition. These are in fact people who have dedicated their professional lives to studying the topic. Whats more, there is hardly even a mention of the entrepreneur in a vast majority of economic theory !

Secondly, while would all love to understand and know the traits of the "perfect entrepreneur" - despite thousand of research projects, many flawed articles and dissertations, the results are totally inconclusive. In truth we all to quick to forget about the context. Different times require, different skills and traits and so do different types of businesses etc etc. Would Alan Sugar make it in todays world or what about Donald Trump or Richard Branson ? The answer is "who knows, maybe, maybe not".

Instead of searching for that horde of gold, the percentage game (borrowed from golf or tennis) would be to do your research, speak to people, network and plan, plan, plan. Most businesses take a long time to build (in fact most never really grow), understand this and keep moving forward. There are no magic tricks, no courses, workshops or golden rules. When you have accepted that, you have made the first big step in becoming and entrepreneur (whatever that is for you)