Nov 16
lindsayrgwattTechnology, Travel san francisco, venture
I just got back from my second trip to San Francisco and Silicon Valley in two weeks. It’s been a whirlwind; some thoughts and photos.
0.
Above all: I have the best wife in the world. We had our first child three days before I had to leave for the first trip and she still encouraged me to go (note that I say “encourage”, not “did not discourage me” from going. Big difference).
1.
If you go to work for a tech company that’s run by the original founder, be prepared to be micromanaged. Steve Jobs was legendary for his focus on individual pixels, but he’s not the only one. Larry Page personally approves every acquisition by Google – even if it’s for a million bucks (they’ve got $40 billion in cash reserves). The other Larry – Ellison – of Oracle has to approve any purchase order over $100,000. And on the Kindle, Jeff Bezos is getting into the single pixel approval scene.
And as a founder, I can’t fault any of them. There are some things you’re never going to give up control of.
2.
As you get closer to Silicon Valley, you’re encouraged to think bigger. This is a refreshing break from Vancouver where you’re encouraged to think small.
When I moved to Vancouver in January and was starting to get going, I met an “entrepreneurship mentor” who told me that the best things in the world are “niche businesses: find a nice little space with no competition and print money.” Nice idea, but if you’re building a web-based business almost certainly not going to happen.
Moreover, I’ve met lots of folks in Vancouver who are aiming to build a small business that could achieve a $10 million exit. More power to them: that would be a life-changing event for the entrepreneurs and could happen – as long as you’re building niche software; no way you can do that with software that’s going to be on every person’s device/used by millions/etc.
We met a VC in the valley who told us that he’s frustrated with going up to Vancouver because people think so small.
And frankly, the odds of failing are pretty much similar depending upon what size company you’re trying to build, so in my world, think big.
When you get to San Francisco, you meet folks who are thinking bigger. To them, success is defined by a company that will be worth $50-100 million in the next five years.
And then you get down to Sand Hill Road in Menlo park where, to paraphrase Linda Evangelista, no one gets out of bed for less than $100 million.
3.
For the uninitiated, Sand Hill Road is where almost all the VCs in Silicon Valley have offices. It’s a tiny little strip of land and it controls billions of dollars of money to be invested; likely more than the rest of the world combined.
When you get there, it’s a remarkably uninspiring place. Think taupe, two-storey office parks that all looked like they were designed by the same insipid architect. Most of the offices themselves are just empty space: meeting rooms and almost ostentatiously large offices. Most of the buildings are shared by many different firms and, curiously, the bathrooms tend to be outside the offices themselves. (I can’t help but wonder if the perk of partnership is the key to a secret indoor bathroom).
It’s only the cars in the parking lot that give you a clue as to the value of what takes place here. Don’t be surprised to see a Ferrari or a Tesla roadster – although, on average, there are fewer luxury cars than I see crossing the Burrard Bridge on a daily basis (why are there so many luxury cars in Vancouver? And why are they driven so badly?).
Also, 3000 Sand Hill road is probably the place in America where you’re most likely to see a billionaire. One of the highlights of my trip was watching one tell off a friend of mine. Upon asking a guy who he thought was a nobody (but unbeknownst to him was one of the most successful investors ever) how much a Tesla roadster costs, he was zinged “If you have to ask the price, you can’t afford one.” It was funny (although maybe you had to be there).
4.
Silicon Valley in general is remarkably banal; it actually feels like a giant strip mall mixed into the suburbs. Only occasionally does a crazy high tech campus pop out at you and remind you that, oh yeah, everything piece of technology you use both today and in the future is created here.
5.
Biggest piece of advice I got: move to San Francisco. People outside the area think you’re crazy to start a company anywhere but the Valley. Time will tell if this is right or not.
6.
On my flight out we flew over the Bay and the Golden Gate Bridge was sticking out of the fog which spilled out to Alcatraz and then evaporated, leaving the city centre to glow in the sun. Incredible view; wished I’d had a window seat to take a photo.
7.
And now, some photos. Traveling with an iPhone and some running shoes means that you can actually see a lot of things – although just from the outside.
Nov 09
lindsayrgwattBusiness, Technology Amazon, business models, scaling
I’m an Amazon fanboy.
Whenever I find something I might want to buy, I park in on one of my many Amazon wish lists. I use their Web services both personally and professionally. And I’ve owned a Kindle for years; it’s the only eReader I’ll use.
But I’m frustrated with Amazon as they’re missing a golden opportunity with the Kindle.
Part of the reason is that Amazon is hard to pin down as a company. Most people think they’re for shopping; more sophisticated pundits think of them as the “platform for buying anything.” But then how does that explain their web services? The tablet?
I like to think of them as a scaling company. They started by scaling retail. Before Amazon, if you wanted to buy most things, you went to a store and bought what was available; some folks skipped the store visit and bought from the limited set of items available in a catalogue.
Post-Amazon, we expect to be able to buy anything across any category and have it fulfilled by Amazon. With the legendary Long Tail, Amazon scaled retail.
Enter their Web services. Having built an incredible set of online services for internal use – and enabling themselves to scale quickly – Amazon realized that they could sell these same services externally and help others scale. Now there’s not a single startup that doesn’t use Amazon’s web services for elastic storage and computing; why would you waste time building your own cloud when you can use Amazon’s? You would be wasting time that could otherwise be focused on growing your business; Amazon helps your company scale.
Which brings is to the Kindle. How does the Kindle reader and the Fire tablet fit in?
A cursory analysis would suggest that they don’t: they’re just trying to fight the iPad and maybe scale the number of books you can read. But that doesn’t sound like a compelling narrative.
What I hope that Amazon will do is use the Kindle to scale me.
Huh?
One of the biggest problems of this age is information overload. Imagine if the Kindle became the platform to manage this and therefore to help you basically scale your brain.
Here’s how it might work.
Every time you read an ebook you highlight the passages you like and see those others like. You can do this today.
Now imagine that this all lives in a website matched to your profile.
From this website (or an associated app) you can upload a PDF and its converted into an ebook-style form that you can highlight; popular passages by others are automatically highlighted as well.
Now Amazon builds a web browser that lets you bookmark web pages and clip/highlight sections and store them in this new “Kindle Brain” (they’ve already built a browser…).
Throw in the ability to add notes and make everything searchable (notes, clippings and files) and you’ve got something interesting. You’re starting to scale my brain.
But to really scale my brain, Amazon would use their awesome recommendation technology on top of all this. Every item in my Kindle Brain would contain related items that I’d saved, that others had saved and related products from Amazon’s database. I can now start to see the web that connects everything I ever learned; patterns I would otherwise miss become obvious.
Now take it even further. Amazon has built an incredible database of my interests. Every day it goes out and summarizes everything I should read, all the time suggesting related products. And then they write their own search engine so that every time I search for something, it searches both the web and my Kindle Brain.
Far-fetched? A bit. Completely unreasonable? No.
Come on Amazon, blow my mind.
Nov 02
lindsayrgwattBusiness car sharing
A few days ago I noticed a tweet by Tim O’Reilly about car sharing. Turns out that GM’s going to use OnStar to let car owners rent out their cars when they’re not being used and Ford is going to contribute cars to ZipCar.
Interesting to see two of the Big 3 getting into car sharing, but both of these pale in comparison with what Daimler is doing with its Car2Go service. The word “disruption” gets thrown around these days like it’s the new “hero”, but Car2Go is genuinely disruptive.
Before explaining why it’s disruptive, a quick primer on how it works. If you live in a Car2Go city (San Diego, Austin and Vancouver in North America), you pull out your iPhone and find a nearby car. You go to the car and start your rental by tapping a car against the window. You then pay by the minute, hour or daily maximum – whichever is cheapest for you.
The system is disruptive for three reasons:
1) You get incredible peace of mind: you don’t pay for gas or insurance so you never have to think about the car itself.
2) You can park the car anywhere (technically anywhere with permit parking or select reserved spots). This is incredible: point-to-point driving; no more returning the car somewhere (GM & Ford – pay attention to this).
3) The price is about a third of a taxi and comparable to the bus.
The price of the car starts at $0.33 per minute, which sounds high until you actually look at your bill.
I frequently get a car to drive to/from work. It takes as little as six minutes and is never more than about eleven. The bus costs $2.50 and a taxi is $12.00 plus tip. If I meet my wife downtown for dinner it’s cheaper to drive home than to take the bus. Even though a ride may cost a bit more than the bus, after I price in my time, the scale tips to Car2Go (even if I have to walk a few blocks to pick up a car).
Here are my rides from last month (your riding history is available online):
I used a car 16 times last month and it cost me $129.32. That’s an average ride price of just over $8.00.
To put that in perspective, to lease a Smart Car (the same ones used by Car2Go) would cost at least $159/month. My car-owning friends tell me that insurance in BC is about $60/month. And don’t get me started on gas or parking.
I’m saving over 50% versus what I’d otherwise pay, easily a couple of grand a year.
The system isn’t perfect. My driving is being tracked and who knows what that could lead to. Also, as more people discover the service I’m realizing that if I work past 7 pm I’m in a Car2Go dead zone:
But these are small prices to pay.
As a business, it sounds like the service is taking off. Within 100 days of launching in Vancouver, they’d signed up 5,000 people doing more than 4,000 rentals a week at an average rental period of 30-50 minutes. That’s not a great business yet – maybe $3M a year in revenue – but the growth is meteoric: usage is up 4X since launch. This could be a serious business soon.
Car2Go doesn’t release any profit info for Vancouver, but given that every car is identical (and that parent Daimler is also the manufacturer), they’ve easily got the lowest fleet costs of any ride sharing service.
If you’re lucky it’ll be coming to your city soon; it’s definitely changed how I live in mine.
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