Monthly Archives: July 2006

What an irony. I’m sitting

What an irony. I’m sitting here at the AlwaysOn Innovation Summit, in a room full of techies, bloggers, VCs, and other experts, and what’s the big buzz at the conference? “Are you able to get on the network?” “No, are you?” “No…” The use of wireless by bloggersm, participants and press has overwhelmed Stanford’s network, underlining a sub-theme of the conference — “The Computer is Personal Again.” Everyone’s on. AlwaysOn.

Last night I watched the live webcast from home in Half Moon Bay, and I heard the president of Stanford talk about the partnership he has with the community outside the university. He made a point that needs to be heard in universities outside Silicon Valley: YOU CAN’T MAKE MONEY ON TECH TRANSFER IF YOU ARE GOING TO CHARGE YOUR ENTREPRENEURS BIG LICENSING FEES UP FRONT. THEY DON’T HAVE THE MONEY TO PAY THOSE FEES. Stanford has figured out that the secret of the partnership is to incubate the companies, as they did Google and Yahoo, and wait for it to pay off in the end. It’s also instructive to note that the president of Stanford comes from the engineering school, but his whole effort is to be interdisciplinary. Down with silos, and up with collaboration.

This morning it’s all about consumer-generated media, with representatives from Yahoo, UTube, MP3tunes, and Sony. Kara Swisher from the Wall Street Journal, who is moderating, seems skeptical. UTube guy seems quite cas, in jeans. He knows he’s got the market sewn up. The real-time poll being taken during the panel discussion seems to point out that user-generated content with always cease to exist, but won’t drive out mainstream media. Good thing, as the clips I watch on UTube are always funny, but don’t satisfy my need for, say, analysis of the situation in the middle East.

I love this conference. This is my third year of blogging at it, and I never fail to wonder at how Tony Perkins pulls something this big together. There are 100 companies that make up the list of the AlwaysOn 100, chosen by a panel of judges and overseen by KPMG. There are panels, CEO pitches, blogs, polls, chat and networking. Is it a perfection selection of the top 100 private tech companies? Of course not. For one thing, most companies outside Silicon Valley don’t even know it exists or how to apply. For another, I suspect it’s heavily influenced by the companies getting funded by the local VCs, and getting the “mindshare” that comes with the funding.

But never mind. It is what it’s supposed to be: hip, cool, and trendy. It reminds me that communities must create critical mass around their entrepreneurs. Stanford is totally focused on entrepreneurship, and on making that climate possible. The press is a collaborator, rather than a provocateur, in the process. The funders aren’t afraid to write checks for something that isn’t real estate.

That being said, I’ve already seen my share of crummy ideas up here, some of them at the SVASE breakfast I attended. I remember that my father, who managed many celebrities, had a certain cynicism about the talent (Pearl Bailey, Billy Daniels, Harry Belafonte, Tony Bennett) that peopled my childhood: “everybody puts their pants on one leg at a time,” he used to say.

I bet that’s true of the guys from Youtube and Yahoo as well 🙂

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I�m at KPMG in Mountain

I�m at KPMG in Mountain View, and it�s 8 AM. I�ve been on the road from Half Moon Bay since 6:30 AM, making a commute to the Valley that I always try to avoid. But I thought I might find it worth it to find out what�s new, cool, and trendy. This is the Always On Breakfast.

Always On and KPMG sponsor the Always On 100 every year to find the best emerging companies and the cutting edge technologies. It�s the pre-eminent list that looks across the landscape to find the cool companies. Always On and its partners look for innovation, market potential, commercialization (are the dogs eating the dog food), buzz and coverage (mindshare), and value creation for stakeholders. This year, there were 700 entries. Four of them are here to present to us.

Netli made the list this year. Netli is a managed service for application acceleration and content delivery. It makes web sites deliver local-like performance worldwide with no infrastructure build-out. For example, they handle the Dell store in the Asia-Pacific region.

Companies are being asked to manage global infrastructure, and customers have no tolerance for slow web sites and down time. The AlwaysOn website, for example, downloads about four times faster in San Francisco than in Hong Kong, because its servers are located in Oregon. With Netli, its download times around the world can be equalized. Performance also needs to be consistent under heavy load, like Christmas time for Amazon, and Netlli does this, too.

Because this is a necessary service as the Internet becomes the main way to deliver information, goods and services, Netli is growing quickly with large customers and no churn.

Comergent is a company I�ve heard about before. It was started in 1998, as one of a hundred companies doing sell-side e-commerce. But Comergent developed a solution for for the enterprise ,while everyone else was focused on the consumer. Its first client was Cisco.

However, the tech market collapsed in 2000, and for a couple of years the company didn�t even have a rep in the Bay Area, concentrating instead on manufacturing and aerospace.

For these behemoths, e-business is very complex, because most of them have multiple lines of business, many sales channels, and a diverse customer and prospect base, for which Comergent brings order. The enterprise also has backend systems that may be thirty years old and poorly integrated.

Customers buy Comergent because they need to make it easier for customers to do business with them. People who order highly expensive and complex equipment on their jobs during the day go home at night and buy books on Amazon, and develop the expectation that they ought to be able to buy during the day with the same ease.

To be a successful business, innovation must collaborate with customer needs, says the VP of Software Engineering at AZUL, a company that started during the dot com bust.
Over the past nine years, most software had become web enabled, but data centers were still built on an old paradigm of cost and complexity, using expensive power and real estate. The more you drop those �lights on� costs (the costs of infrastructure), the more you can concentrate on innovation.

AZUL built an interconnected system in which any application running on any server has the same massive compute power that is highly reliable and always available, like electricity is to the homeowner.

Blue Lithium sits at the center of two big trends: the movement of traditional advertising from print to the web; and the ability to target users by their actual behavior. Traditional advertising is becoming far less effective, and customers want relevance.

Sitting between advertiser and publisher, Blue Lithium was founded two years ago. It was profitable within three months and is already one of the largest online ad networks. Its founder had originally founded ClickAgents, which grew to become the largest performance-based ad network, and was sold to ValueClick in 2000 for $70m. It�s the only private company in the online ad network space (Ad.com, 24/7, ValueClick are all public).

With behavioral targeting, it no longer matters where an ad is service; the technology targets what users read and lick on, and serves the most relevant ads no matter what site they are on.

After 24 months in business, Blue Lithium is already working with all the major portals, CNN, Knight Ridder, USA Today, and MySpace. They�re going to launch a new social network site, MingleNow, in the fall, which will be a new source of in-depth user profile data.

You will notice that some of these companies are new, while others have been in business for eight years. Overnight success has many meanings.

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I have a new pet.

I have a new pet. He’s a Roomba, and he’s already the most welcome member of the family since the golden retriever. I am sitting at my desk writing this while he is busily scurrying around the house picking up dog hair and dust.

Actually, if you’re not familiar with the Roomba, it’s a robotic vacuum cleaner made by iRobot. It has been around for a while, and I have Version2, with the automatic scheduler. My Roomba can be operated with a remote control, can go on his own without direction from me, and can even be scheduled to clean different rooms on different days or at different times. I can set him and forget him, which is more than I can do with the dogs!

The Roomba really is incredible when you see him at work for the first time. You plug in his docking station, charge his batteries overnight, and then undock him and press Power. His dirt detectors send him wildly trekking through the whole house, avoiding walls with his wall detector, jumping over threshholds, and climbing on and off throw rugs. He will gradually get to the whole house, although he doesn’t do it in order. He goes where the dirt seems to be, and then on to the next dirt, sometimes not in a straight line. When he smells dirt, it’s the Blue Light Special: a blue light goes on in his dirt detector. He works extra carefully around the dog door, as if he knows this is a special haven for allergens.

At first you worry about him, because he seems to be missing things. But he will come from two rooms away to pick up what he missed. Gradually, he covers the whole house. When he feels himself running out of energy, he finds his way back to his docking station and goes to sleep.

Roomba makes a humming noise, but not anything near the volume of the Dyson (or any other vacuum cleaner for that matter). My dogs run away from the Dyson, but Chauncey (golden) just stands and stares. Emmett (chow-chow) slowly backs away, trying to avoid Roomba and finally realizing he has to go outside or risk being detected as dirt or a wall.

He just crisscrossed my kitchen, wandered out again, came up to the chair in the dining room that I use for a computer desk between meals, and cleaned the Oriental rug at my feet.

My Roomba is blue and silver, and looks like nothing more than a gigantic ladybug making his way among chairs. He can extricate himself from tight places, too, like between the chair legs.

I just saw him circle the piece of metal sculpture in my living room. It’s a more-than lifesize rendition of a dog, made of scrap steel, and I wish I had taken the time to photograph the first date of artificial dog and artificial housekeeper. Roomba acted as though he was sniffing the dog, and then appeared to reject it and move on. Their encounter triggered my imagination in ways few other things do. What if Roomba, the ladybug, fell in love with steely Dan, the metal dog?

I never thought robotics had much consumer use. I imagine robotics as something for spacecraft, warefare, and auto manufacturing. So I laughed when Sony made the AIBO, although I was a little baffled when they stopped making it and people came out of the woodwork in mourning. Apparently, if you did buy one, you fell in love with it.

Well, now I’m in love with the Roomba.

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Summer finds me south of

Summer finds me south of San Francisco in Half Moon Bay, with almost immediate access to the entire Bay Area (I say almost because I have to get over the hill from the ocean on Route 92, whose traffic usually moves at 20 mph), and I already feel the difference.

Silicon Valley is always searching for innovation in a way that Arizona is not (yet). Tonight could go to a dinner about Internet advertising models– what works and what does not. This morning at breakfast I could have taken my business plan before a VC, because the Silicon Valley Association of Startup Entrepreneurs holds a breakfast every Thursday at which a VC listens to pitches from hopeful startups. And at the end of July, I will attend the AlwaysOn Innovation Summit,one of my favorite conferences. There is an air of seeking, looking, contemplating the future. And I mean a larger future than how many homes will be built next year.

This is not a judgment; it’s just an observation. Silicon Valley, too, has its issues. While Arizona is focused almost entirely on lifestyle (golf, gaming, mcMansions), Silicon Valley is focused almost entirely on technology. My life in Arizona is built of warm weather, a big yard, and the ability to park almost anywhere. In Palo Alto, unless I were a zillionaire, I’d be living in a tiny apartment. Somehow we need both lifestyles.

Last night I was watching the Bay Area local TV news, and there was a story about two entrepreneurs who want to change the future of writing with a new digital pen. Yes, there were the usual stories about fires, thefts, and people who let their kids drown, but there was actually an innovation story. To me, that says it all.

Yet both communities are facing similar difficulties — trying to figure out where innovation comes from, how to make it happen, how to create an environment in which it will happen. This is a huge issue.

I think it’s an overall American issue. Innovation comes from necessity, and from problems. It also happens serendipitously, while people are fooling around.

In America, we no longer have enough problems. I know that sounds silly, but it’s true. Compared to people in developing nations, we don’t have a need to innovate. Even if innovation means finding a way to pirate and sell software, as in China, or to sell opium, as in Afghanistan, hungry people innovate. Europe, largely socialist, has a very low rate of innovation. The population is taken care of, and innovation is rare � at least in Western Europe. I am told that in East Germany, an enterprising entrepreneur actually turned a former strip mine into an adventure park and it has become a big tourist attraction. People rock climb on the bare landscape.

We also don�t fool around enough. Every moment of our days is spoken for and scheduled, including the portions set aside for �brainstorming,� or trying to foster innovation.

It’s almost impossible to be innovative on demand. A group of corporate types sitting in a conference room, or even on retreat at the Ritz Carlton in Half Moon Bay, will not automatically be innovative. Innovation is problem-solving. How do I get this music without paying for it? (Napster) How do I get a cheap computer (Dell)? Young people innovate because they are hungry. They can’t afford a new car, so they put the old one together with spit and baling wire. They can’t afford a motel, so they sleep in the car, putting the seat back, when they’re on a road trip. And then a manufacturer notices this, and gives them a car with 60/40 split back seats.

At present, the biggest perceived problem in America is aging, with the age-related diseases. George Bush, who is in the top 1% of men his age aerobically, admitted on his 60th birthday that he is no longer running. His knees, he says, are like bald tires.

Real innovation is happening around this problem. How do we kill this cancer cell without killing the patient? How do we ream out this man’s arteries? These are real problems, and they give rise to blockbuster innovations.

However, social networking (for example) doesn’t solve a real problem. In my daily rounds of meetings, I see many business ideas that are solutions to non-existent problems. Today I read a review of three Bluetooth headsets that act as iPod headphones until your cell phone rings, when they switch to phone speakers. One of them is a pair of sunglasses. Yes, I will have one soon; but don�t think I have been fooled into thinking it solves any of my problems.

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