Wrapping up SXSWi 2010

March 20, 2010

SXSW 2010My tweets and blog has been full in the last 7 days of reports from SXSWi, and this post explains what all the fuss was about.

South By South West, held in Austin, Texas, started in 1987, and is best known as a world famous music festival but in 1994 the organisers added film and “interactive” streams.

I attended the 5 day long interactive portion (SXSWi) which is a packed schedule of events including keynote presentations, panel sessions and book readings focused on cutting edge technology that provide practial training as well as big-picture analysis. If that all sounds a little bit serious then there’s dozens of parties on every night of SXSWi, and many say this is the real focus of SXSWi. One thing’s for sure, it’s really hard to pack it all in, the parties are usually sponsored so there’s a lot of free alcohol and hangovers are to be expected. The organisers are well used to this and fortunately few of the big events take place before lunchtime.

The parties, alcohol and hangovers have earned the festival the unofficial title of “spring break for geeks”. It’s a lot of fun!

My blogs on SXSWi:

Attendees:

There is a great mix of people, a majority of whom are from North America, but there was a good number of British, and other Europeans too. I even met one person from Australia and another from Taiwan. It’s not just  the usual contingent from silicon valley -although they are there – but people involved in technology from all over the US, including a surprising number from Texas itself. (Austin is a significant centre of technology and start-ups). The event is not corporate at all, the majority of attendees are freelancers or are working in start-ups. There’s a definite presence from venture capitalists and angel investors too. Personally I think there were a few too many “social media experts” and “digital agencies” in attendance, and I did hear some complaining that the increasing numbers of non-techies is making it less worthwhile over time. Despite this I still thought it was a great bunch of people to spend the best part of a week with.

Speakers:

This year keynotes were delivered by Daniel Ek of Spotify, Ev Williams of Twitter and in previous years have included Mark Zuckerberg of Facebook and Tony Hsieh of Zappos. Other well known participants in 2010 included Guy Kawasaki,  Paul Graham, Dave McClure, Robert Scoble, Pete Cashmore, Clay Shirky, Joi Ito, Danah Boyd, Gary Vaynerchuk and Doug Richard. There’s literally hundreds of events each year, so there should be something for everyone.

Cost:

It’s definitely the best value conference I have ever been to, the most fun, and also one of the most useful and interesting. The 5 day pass for this year was just $395 if booked in advance. Although hotels are busy, I was able to book  a decent Crowne Plaza hotel only a few months before, for just $100 per night through Priceline. Expect to pay quite a bit more staying in downtown, which is certainly more convenient, but it’s not the end of the world to be a few miles away, especially considering the significant savings.

Experience SXSWi for yourself:

Attend! Failing that, you can catch up on the best of previous years: Select Videos and Podcasts from SXSWi are posted on the official website and YouTube channel.

Tips for newbies attending SXSW:

  • Although not crucial, it’s definitely more convenient to stay downtown. If staying elsewhere make sure your hotel operates a free shuttle bus, or you could try staying somewhere close to the new Metro light rail system (which opened just after this years SXSW closed!) The official SXSW shuttle buses don’t seem to operate until the music festival, so don’t rely on those.
  • Go through the whole schedule a few days in advance of your trip and add all the events you think you might like to attend to my SXSW on the official website, then bookmark the page on your mobile phone or download the mobile app.
  • Wifi is plentiful and free within the official venues, and for the most part seemed to work well. The exceptions were the largest rooms where there were simply too many people trying to log on for the infrastructure to cope.
  • Usual advice for a big conference applies, wear comfy shoes!
  • Get connected. Twitter, Foursquare, Gowalla and Plancast all play an important part in
    • fitting in with the rest of the geeks
    • discovering the best parties to go to

Get in touch:

I will definitely be going back to SXSWi, so get in touch and we can meet up.


Joi Ito at SXSWi 2010

March 19, 2010

Photo credit: jurvetson

Joi Ito is a remarkable individual, he is an activist, entrepreneur, venture capitalist, journalist and photographer. Like Clay Shirky’s appearance at SXSWi he was there to flag up some important issues, and analyse how the Internet has changed society. He was there to make us think.

Ito was born in Japan, and grew up in Canada and the US but now lives in Dubai, “I wanted to better understand the middle east and get out of my comfort zone”. He recommend we try as much as possible to connect with people from different cultures as much as possible. Smaller countries are usually humble and willing to learn, unlike China, US and Japan which are all arrogant.

Ito’s presentation got an early round of applause when he said, “My religion is the Internet”. He continued and told us that, “The Internet can solve some of the most challenging problems, but creates new non-linear complexity.” It can solve such problems thanks to the decentralisation it offers that allows us to find small changes and amplify these globally. Fundamentally we can all participate in a movement but don’t any longer need permission. He’s not interested in pursuing a career in politics, telling us that big Governments are so corrupt it’s basically impossible to change anything, it’s just impossible to get leverage.

In the last ten years the cost of using the Internet has been dramatically lowered, thanks in part to open source it is no longer engineering that is the major cost of the internet. The risk of failure has been significantly reduced and this has increased innovation. (It does not mean that in every organisation the cost of failure has been lowered, in large Japanese corporations there is still a significant cost of even contemplating a new project.) The Internet depends on interoperability and that today, there is still just one Internet. However, the openness and interoperability is not guaranteed and it’s usually incumbent telcos who are the biggest barrier to change – in many countries using IP telephony is illegal or impossible – the reason these companies have such influence over the Government is that they are usually the biggest taxpayers in a country.

The barrier to further development online is now a legal one, and that’s why Creative Commons was established. Ito is the CEO of this San Francisco based organisation which has for the last 8 years been promoting an alternative to the traditional “all rights reserved” copyright notice. Creative Commons helps people share their and collaborate on others work in a new legal framework. (This blog adopts one of the most permissive CC licences meaning people are free to to copy, distribute and display what I have written and to make derivative works from it, as long as they give me credit as the author.)  Already there are over 100 million works licensed using CC and it’s not just bloggers like me using it, Al Jazeera was the first broadcaster to adopt the permissive CC licence.

This was an ideal presentation to have on the first full day of SXSWi, and was followed on the next day by Clay Shirky who shared with us some key lessons and themes for development. On the day after that Gary Vaynerchuk put it in layman’s terms, “the web is still just a teenager, it’s not even had sex yet.” The web is now part of our daily lives and it’s going to be fascinating as we all participate in this life changing technology.

During the course of his presentation Ito recommended a couple of books:

  • “Small pieces loosely joined” by David Weinberger
  • “The age of the unthinkable” by Joshua Ramo

The slides used during his presentation are available here.


Clay Shirky at SXSWi on sharing, human nature and the Internet

March 19, 2010


Photo credit: Joi Ito

Ahead of the disappointments of the big keynote interviews with Evan Williams and Daniel Ek SXSWi got off to a good start with an unusual presentation by Clay Shirky.

Shirky is an American writer, consultant and teacher on the social and economic effects of Internet technologies. With a large conference of this size there is often a lot of repetition of ideas and in some sessions a feeling of preaching to the converted, with few dissenting viewpoints. A lot of sessions end up as a “how to” or a step-by-step guide to solving a problem.

In contrast, Shirky is a big thinker, so it was welcome to have some real substance to think on, but the hard work has been left for us, to take his ideas and translate them into something meaningful. (A caveat from me that a presentation like this is infinitely better when watched live rather than read about.)

He started by giving us the example of PickupPal in Canada, a web site which allows people to organise ride-sharing as an alternative to public transport. However, the entrenched competitors did not like the threat to their position and a number of court cases clarified that in many situations PickupPal was illegal.  This did not go down well with the public and sparked a popular revolution which ended up changing the operating environment and the law was changed to support ride sharing.

Lesson: Companies that provide a service which solve a problem have an interest in that problem staying in existence and will do what they can to defend it. (e.g. traditional bus companies)

Next he explained about the invention of the printing press by Johannes Gutenberg. Before he printed the famous bible he printed papal indulgences for one four hundredth of the cost of paying scribes. The church considered this sacrilegious, up until this point they had a monopoly on the written word. “Before the printing press the church was all powerful. 200 years later it was just a religion.”

Lesson: When things become really abundant… the price goes away.

Next up, Shirky took a look at how humans share things. Using the example of Napster he argued the fact that people were sharing music illegal did not mean there was a huge rise in desire for criminality. Normally there is a cost to sharing with people which makes us less likely to do so. For example, when you had CDs you would reluctantly lend them out. Now though with digital music there’s no cost or harm to you. So this changed the motivation of sharing and brought back an old trait.

Second example of this, Wikipedia came along and while it is imperfect it is so much more accessible than its historic rival Encyclopedia Britannica. Accordingly Wikipedia changed the nature of the game.

Lesson: Abundance breaks more things than scarcity.

Finally, Shriky presented examples of web services which contribute to the public good such as Patients Like Me and Ushahidi, both using the power of crowd sourcing to provide vital information and insights to governments, policy makers and NGOs.

Lesson: What the Internet has brought is that we now have the tools to easily share information. In the past this could only be done on a small scale, now it’s as easy as setting up a Facebook group, the expense has now disappeared.

He challenged us to think, “How much value can we get out of civic sharing?”

In summing up, Shirky told us that the greatest points of leverage are when no one is paying attention. All progress stops when everyone realises how important something is, so work where no one knows how important it is.

A great example, when Linus Torvalds initially posted a message online in 1991 seeking help developing a new OS just 6 people volunteered. Linux is now a significant player in the OS market and the most prominent examples of free and open source software collaboration.


Seed accelerators: a launch pad for start-up success

March 18, 2010

Here are my notes from the ‘Seed Combinators': Startup Incubators 2.0 panel at SXSWi. The panelists were Paul Graham, Naval Ravikant, Marc Nathan, David Cohen and Joshua Baer.

Definition: Accelerator programmes seek to nurture a seed of an idea and act as a launchpad for a start-up in its earliest stages.

What do they typically consist of?

  • a small amount of money
  • advice from real experts
  • help pitching at a demo day for further funding
  • access to an amazing network of advisors, angels, and VCs

Perhaps the most famous of all is Y Combinator, founded by Paul Graham and they have helped over 100 start-ups. Their method insists that you move to the bay area for the duration of their 3 month program, a very worthwhile commitment as you will end up building fantastic relationships with the other 19 startups going through the same experience.

How do you choose which one to apply to?

Either pick the one geographically closest to you or pick the one best if you can.

“It’s like picking a surgeon, you want the best you can get,” Paul Graham.

Myths about accelerators:

It’s only for young founders. Not the case. YC’s average age is 27 years old, but they have funded some in their 30s and 40s. (These are less frequent though probably because of the stage of life, family commitments, etc).

It’s all about the idea. Mainly it’s about the character of the founders, the quality of the people, specifically integrity and intelligence. “We pick people we like to be around”, Paul Graham.

In terms of ideas though what are they looking for?

An idea that solves a valuable problem. i.e. something people will pay for.

Stay local or go to the US?

If you are going global, come to the US. Many business ideas are “winner takes all”, and the US has the largest market and Silicon Valley is the best place to take advantage of it. But if your focus is on another region, stay in that area and apply to a local programme.

Don’t give up

Drew Houston was initially rejected first time round, later re-applied and is now going great guns with Dropbox.

Some accelerator programs:

Y Combinator (Silicon Valley)

Capital Factory (Austin)

Techstars (Boston, Boulder & Seattle)

Seedcamp (Europe)

HTC (Houston)

The Founder Institute (San Diego, Denver, Singapore, Paris, LA, SiliconValley, Washington DC, Seattle, New York)

Other reading:

My notes from the panel on getting your company funded is relevant to start-ups at a later stage of development.


Lean Startups – a live discussion with Eric Ries and Dave McClure

March 18, 2010

This week at SXSWi I attended a side event, the “Lean startup smackdown” with Eric Ries and Dave McClure, organised by Ash Maurya of the Austin Lean Startup group. Here is a summary of my notes.

The idea of a lean startup is something which enhances the chance of success and comes from the idea of lean manufacturing, made famous of course by Toyota. Ironically one of the main tenents of the lean startup philosophy is listening to the customer, something that Toyota should probably be embracing now.

Lean startups are trying to create something new while acknowledge they operate in conditions of extreme uncertainty. The key is getting to a product which your customer values, as quickly as possible, maximising value creation while minimising irrelevant time-wasting and resourceconsuming activities. Fundamentally lean is about the speed of iterations. Let’s say you start your business with some funding, how much runway do you have left before you run out of money, and in that time how many iterations of your product do you have left?

It’s a cyclical processs which follows and then repeats:

Build Measure Learn

You can develop faster without waiting for feedback, but overall it is not more effective. You start with the minimum viable product and go through the iteration loop until you have a clear understanding of the core product. Question all your assumptions. You do not optimise at this stage. Micro-optimising and seeking incremental improvements is something which you concentrate on when you have solved the macro problem and have a core product that people want, as defined by product/market fit. You also don’t add features as adding features at this stage can actually inhibit conversion as it can lead to lower conversion.

Measurement:

Take 3 to 5 conversion metrics and measure that data to provide a feedback loop. As a result of the data, change the product, or the marketing and see if that makes things better or worse. You are seeking Validated learning about your customers, rather than guessing.

How often do you make the changes? The aim is to reduce the batch size, which makes for a faster feedback loop and means you are continuously developing.

Lean startups are not cheap startups; when you get to the point where you understand your business model – product/market fit is one definition of this – you want to accelerate as quickly as possible and if that necessitates spending money, do it. Lean does not imply how much funding you raise as this varies for each type of product that a startup tries to build. VCs have rules of thumb which serve them well at a portfolio level, but poorly at a company-level. VCs demand plans, and milestones, but being on time and on budget is irrelevant if you are not managing to buidl something that the customer wants. So rather than focusing on getting to the next round of funding, remember the VC is not your customer, and focus on real success with customers, in the leanest way possible. (Two VCs were specifically mentioned though for their support of the Lean Startup philosophy: Polaris Ventures and Mike Maples.

Examples of recent successful startups which have followed the lean methodology include Dropbox and Xobni, both advised by Sean Ellis, who I recently wrote about after a talk on the subject of product/market fit and what that means for funding at Edinburgh University. Xobni started out building email analytics to enterprise customers but discovered there was just not enough value in this. In their search for developing something with recurring value to users they reinvented the product as an Outlook plugin for individuals to help analyse and search their email.

Finally, McClure and Ries pointed out there is a lack of empirical evidence or research on this area, so don’t assume that this philosophy is necessarily “correct”, and use what aspects of it most make sense to you. I am sure both would welcome any examples of your success or otherwise following the lean startup philosophy.

[Update: within hours of writing this blog I found the following article, “The Case for Fat Startups” by Ben Horowitz. Despite the name I am not convinced the two philosophies necessarily disagree with one another, it seems more like Horowitx is arguing against cheap start-ups.]

Hungry for more? There’s a Lean Startup Conference coming in San Francisco in April.

Further Resources:


SXSWi keynote 2010, an interview with Daniel Ek, CEO of Spotify

March 18, 2010

Daniel Ek, SpotifyThe big name keynotes were a mixed bag. The conference organisers understandably like to get headliners on the roster, but once given the platform there is a tendency for them to be treated like gods and given a soft interview, and often without the chance for any questions from the audience. While I found the interview of Evan Williams, CEO of Twitter interesting, it did fall into this category.

The day after it was the turn of Daniel Ek, the Swedish CEO of London-based Spotify, a free music streaming service funded by advertising. At least in this appearance the big-name was brave enough to field some questions from the audience. It was a good thing he did as that is the only thing that separated this from being nothing more than an advert.

To convey what they are trying to do Ek stated simply that Spotify’s goal is “to make music [pervasive] like water”. It’s massively popular in Europe, with 1 in 5 Swedish people using it. Ek was given a tremendous platform to educate the American audience on this service, as yet officially not available in the US due to the minefield of negotiating with over 5000 publishing houses. Even though it’s not officially available a large amount of the Americans attending were using it. Although Spotify is free the premium service, at £9.99 a month dispenses with ads and also gives you the ability to install Spotify on your mobile phone. (One of the audience commented that £10/month was expensive, but for unlimited music access it seems pretty cheap to me.)

The service is popular because it gives people what they really want: free music (legally). Although you never own the music it’s their goal to “let you take your collection anywhere”, a mobile service is available and tracks can be downloaded to your computer for playback even when a network connection is not present. Ek stated more than once that he would still buy his favourite music to keep forever, but I can’t help feeling that’s more about him saying the right things in public and does not reflect user behaviour.

Despite Ek’s youth (he’s just 27), he’s had a number of successful internet companies before and the inspiration for Spotify came from his early use of Napster, which he combined with his past experience founding an internet advertising business and also building the most popular BitTorrent client. As a keen user of Napster, he liked two things: free music and the serendipity of discovering music from other users. Both aspects are replicated in Spotify, but unlike Napster this is legal. He described music as “the most social object there is”, but they are not trying to create a social network around this, just provide the content, and would rather work with other social networks collaboratively.

The potential bandwidth demands of a service like Spotify could be huge, in fact they are already using more bandwidth than the whole of Sweden. They are mitigating this bandwidth challenge due to the peer-to-peer architecture which means that you can be listening to music from another user on the same local area network, or the same ISP, as well as from further afield. In the first two scenarios it’s a big win for ISPs who are feeling the pressure from ever-expanding bandwidth costs outside of their networks.

Spotify has drawn criticism from the music industry, perhaps why Ek’s appearance was only open to holders of the Interactive ticket at SXSW and not those people with the music-only ticket. The uniqueness of their revenue model seems to be that rather than paying a fixed price to the record company each time a track is played Spotify have an agreement to split whatever revenue they get. Spotify has great ad conversion rates of between 3% and 5%, but other than this stat Ek refused to be drawn further on their revenue or payments to artists.


SXSWi keynote 2010, an interview with Evan Williams, CEO of Twitter

March 17, 2010

Photo credit: Randy Stewart

The big name keynotes at SXSWi were a mixed bag. The conference organisers understandably like to get headliners on the roster, but once given the platform there is a tendency for them to be treated like gods and given a soft interview, and often without the chance for any questions from the audience. Two years ago Mark Zuckerberg, Founder and CEO of Facebook left the audience angry as the interviewer avoided all the big issues. Back channels like Twitter gave people a place to complain, but as it was not being monitored it did nothing to rescue the on-stage embarrassment.

Twitter’s CEO Evan Williams was sadly given the kid-gloves treatment and took no questions from the audience but the discussion was nevertheless still quite interesting for me as I had never seen Williams speaking before. I certainly learned more about Twitter and their approach, but would no doubt have learnt a lot more if the audience has been able to ask one or two challenging questions.

Williams defines Twitter as an information network which gives you a place to discover and share stuff you care about. “We want Twitter to reach the weakest signals, we want it to be inclusive, and [by using] sms we can reach anyone.”

Depending on who you follow you will have a vastly different Twitter experience, and one of the key things they are trying to improve is the signal-to-noise ratio, but no information was given on how. Surprisingly he said “we want to help people spend less time on twitter”

In the last year Twitter has experienced immense growth, both in terms of users, usage and in media attention. (The number of daily tweets has increased by 1400% in the last year to 35 million per day). It’s no wonder Williams identifies their ability to scale as a key challenge. Despite that Williams says that he’s splitting his time between dealing with cultural and operational issues at Twitter. They have therefore now developed a set of operating principles.

Some of Twitter’s 9 operating principles:

  1. Be a force for good
  2. Believe that the open exchange of info has a positive impact on the world.
  3. Experimentation is what leads to innovation
  4. Assume there are more smart people outside of the company than inside. don’t close off the outside world.
  5. Only do win-win deals with partners

Williams and his team, now around 200 people has clearly spent a lot of time thinking… “How do we define then adopt those characteristics, of openness and transparency as it is a key value for the product and company”. By the way, openness is their preferred term, instead of transparency: a window is “transparent” but a door is “open”.

“Openness is a survival technique” through which people can approach you, and throughout the development of Twitter users and third-party developers have been able to interact flexibly and as a result they’ve generated loyal users as well as spawned a whole ecosystem of businesses. The recent deals with search engines to provide the “fire-hose”, as well as providing revenue to the company reinforces the open aspect of the service. “We don’t know the best use of the fire-hose, but we put it out and see it as letting 1-000 flowers bloom.”

No doubt one of Twitter’s future revenue streams will come from monetising business users by providing extra tools and insights. Already Williams believes they are helping to build better companies by opening up the black box, destroying lack of responsibility and transparency and letting users providing feedback and insight to the business.

In response to the question, “What makes you tick?”, Williams said there are two types of entrepreneur. “I am driven by creating something that didn’t exist before. Your product or service your should be the end of a sentence that starts “…wouldn’t it be awesome if”. We knew if [Twitter] was awesome people would want to use it.”

Turns out, he was right.

[Update: afterwards @ev answered some questions on twitter in response to the lukewarm reception of the above keynote interview. There was also an extensive BBC World Service interview around the same time.]


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