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Cars, TVs, Watches, Toasters…the Power is in Your Pocket

The-Internet-of-Things-InfographicIf you work in any company or venture connected to technology than by know you’ve realized that the next frontier is the internet of things (IoT); namely that so many things we use everyday will be connected. What started with computers, morphed to phones and tablets, and found its way to TVs, and more recently wearables (wristbands, watches, etc.) will now pollinate to cars, appliances, and more. It’s the natural order of things. What may be implicit but hasn’t been discussed is that all of these things will rely on one thing you use and can’t live without, the phone that lives in your pocket. The worst kept secret that Apple and Google are in a land grab for the automobile world largely broke this week with Apple’s announcement of CarPlay and Volvo showing a video demo to the world (below). Add Google’s announcement of the Open Automotive Alliance and the battle is on.

Auto makers are hedging their bets, many planning to offer both Apple and Android inside their cars and for good reason. iOS and Android have proliferated to the point where its a neck-and-neck two-horse mobile race (sorry Microsoft, Blackberry, others) and therein lies the advantage. No matter what thing is connected, they will all be an extension of what is running on your phone.

CarPlay and undoubtedly Google’s offering (possibly called projected mode) will be a second screen manifestation of what you have on your phone. Think of it as AirPlay and Chromecast; you can enjoy the things you do on your phone in a more auto-friendly way on a beautiful nice screen. If you’re working in a company or thinking about starting an auto-focused infotainment system or app you should think twice. The internet of things will all be tied back to control from the smart phone, not device specific implementations across the spectrum of devices. For consumers it means that all of your devices could (in theory) work seamlessly, extending your experience (whether powered by iOS or Android) to all the connected things you care about. For developers it provides more consumer touch points. For Apple and Google its a battle to the death to become an increasingly integrated part of our lives. Something we couldn’t walk away from if we tried, all monetized through the services on these devices that bring us search, ads, and apps.

At the D Mobile conference last year I asked Eric Schmidt how Google views the connected home. His response was “Google thinks of Android as the OS for all connected devices, everything from a tablet to a toaster.” Its happening and in the future, when you ask your toaster who has a special on bread it will point you to a store in your neighborhood. Your car will tell you the closest place near by. Your phone might send you to the website. And Google will get paid. Pure genius.

The Death of Bitcoin & The Future of Digital Currency

bitcoin-crackThe value of Bitcoin has been all over the map. It’s the new currency one minute and a failed experiment the next, but isn’t that how may great inventions began? Much like technology inventions that have changed our world, Bitcoin is the manifestation of computer science genius, as Marc Andreessen deftly describes. Wasn’t it once said that no one would want a personal computer at home? That no one could make money from the internet? That TV would fizzle and die? Yes to all. But Bitcoin is different from these life changing tech marvels. Bitcoin may prove to be the start of something but may not be the thing itself.

“I think there is a world market for maybe five computers.” – Thomas Watson, President of IBM, 1943

“There is no reason anyone would want a computer in their home.” – Ken Olsen, founder of Digital Equipment Corporation, 1977

Mobile transactions and payments have been common place around the world, especially in the developing world. Safaricom’s M-Pesa, DonRiver, and other providers and integrators have been making sure laborers, civil servants, and others have been getting paid reliably using mobile digital credits in societies where fraud and corruption would have otherwise sucked money out of their pockets. Bitcoin is different from these systems in that although 1 BTC = $502 (as of this writing according to Coindesk), much like cash is (kind of) backed by gold but you carry cash not gold bars, the aim is to position Bitcoin as the currency itself and not simply something to be traded for cash; a significant disruption to the financial system with the promise of a currency by the people for the people. Problem is that Bitcoin wasn’t made by those in charge and hit the established system so fast that it scared the powers that be and also didn’t come with the fraud protection, security, and controls to ensure that your money is safe. Just today there are reports that Mt. Gox, one of the largest BTC exchange is insolvent with as much as 700,000 Bitcoins unaccounted for. That’s $351.4M as of this writing. That’s serious money. Worse, without protection measures, if your Bitcoin wallet is hacked tonight there really isn’t any real recourse to take tomorrow. But as the growing pains continue for Bitcoin, the promise of a viable digital currency is alive and well.

Bitcoin has been banned in China and Russia. On the opposite end of the spectrum, The Royal Canadian Mint, Canada’s manufacturer of coins has just passed another milestone in bringing to market MintChip, the first government-backed digital currency. Interesting to note that The Canadian Mint also manufactures coins for smaller countries such as New Zealand and Luxembourg and there is talk that once in market, the digital platform can power digital currencies for these nations as well. Where Bitcoin is today an unregulated digital currency for the masses, MintChip is more akin to the work done by the likes of M-Pesa; a digital credit system backed by hard currency, but differs in that MintChip won’t be something you take to a bank to get “real money”, the hope is that it lives on as the transactional currency itself fulfilling the promise started by Bitcoin.

So where does this leave Bitcoin and all the start-ups and exchanges clamoring to own a piece of the Bitcoin ecosystem? Well, every new currency type needs exchanges and trading desks, fraud protection and security, banks and wallets and digital currency is no different. Coinbase, for example, an international digital wallet that allows you to securely buy, use, and accept bitcoins has likely built a platform that can power other digital currency not only Bitcoin should a new leader, or multiple international digital currencies emerge (I’m not connected to Coinbase in any way but I trust they’re smart guys that think big and I know their investor are and do). The early champions of Bitcoin-supporting technologies will be the front-runners to power the digital currencies of the future. As for Bitcoin itself, two things can happen; (a) the people truly have the power and with entrepreneurs building for Bitcoin, merchants accepting it, and people using it the currency actually goes mainstream forcing the financial system to respect it and all its new-found security. Or (b) Bitcoin will be remembered as the forefather and catalyst to the financial-system approved, government backed digital currency that my kids and grandkids will carry in their phones (or wristbands or watches or eyes) when they buy a Coke, coffee, or whatever new cool things haven’t been invented yet.

Digital currency may not take over as quick as some may like. It’s no question that moving away from the gold standard resulted in a financial system that has less “real value” and is open to market manipulation than if we were still based on a tight dollar-to-gold ratio. Likewise, fear of manipulation, intrusion, and coersion by governments abound with a non-physical currency where all of your purchases can be traced and governments can punish and bankrupt each other or otherwise gain political advantage by hacking finances. The hope is that these concerns will be checked my systems to ensure they don’t happen and digital currency will bring greater equality to the masses and not accelerate the divide between rich and poor. Whatever side of the fence you’re on, Bitcoin has started a train in motion and there will be many more pitfalls along the track but it seems inevitable that software will again eat the world.  and the day of your leather wallets and money clips are numbered.

It’s Time Your Smart Phone Earned Its Name

Photo borrowed from The Verge

2014 will be the year your phone actually earns its title of being smart. Up until now smart phones have that label simply because they allow us to do more than the older flip/feature phones we had in the 90s-early 2000s (Blackberries, or really Blueberries notwithstanding). The iPhone exploded on the scene in 2007 and shortly thereafter our love affair with apps gave life to our phone and we considered it smart. Problem is, phones don’t do anything without being told. Phones are dumb. 2014 is the year that changes on a large-scale.

Today at CES, Yahoo announced the acquisition of Aviate, a start-up that focuses on making your phone smarter through context – understanding time, usage, behavior, and need, and then serving up the most relevant information at the time. Aviate is one of a crop of companies that are focused on actually making your smartphone smart including Chameleon, Cover, and others I’ve written about in the past (Disclosure: I work for Synacor, who acquired Teknision the company behind Chameleon). What is interesting is that Marissa Mayer used her keynote address at arguably the year’s largest technology events to announce Yahoo’s move into context-aware technology and making your phone smart. Google Now, Apple’s Notification Center, and Windows Phone dynamic widgets are all already playing in this space but these efforts have been part of the OS, almost spoken about as a feature. Mayer’s announcement is the first time that a major tech company has shone the light squarely on this arena.

Google Now is clearly the king of context at this point. It’s all about data and Google Now is freaky good due to the insane amount of data and reach Google has to draw from both on your phone and your habits across the web. Search drives data and with their reach on the web, Yahoo and Microsoft are in great position here as well, possibly even better than Apple, but not as deep as Google. Mayer said on stage that the future of search is contextual search and as TechCrunch mentioned in their post on the subject;

Yahoo SVP of Mobile and Emerging Products Adam Cahan says that the company isn’t interested in turning Aviate into some sort of ‘all Yahoo apps’ portal. For now, it will expand the beta program and get more users checking it out. “Think of this as an extension of [Yahoo] Search,” Cahan says. 

The extension of search metaphor is an apt one, as contextually aware home screens will be all about using anticipatory ‘searching’ through our apps, habits and use cases to provide us with better experiences. Aviate will now be able to tap deeply into Yahoo data like search, weather, maps and more to inform contextual experiences.

Aviate and other launcher apps have always suffered from the chicken and egg problem – to the average person the default OS is good enough and going out of your way to change it means you need to first be convinced of the value of doing so – why is the new thing better? In order to demonstrate that a more personal, context-aware phone experience is better, launcher apps need to gather data from a person’s usage, which only happens if people first install the launcher…which they don’t because they don’t see the value. Search data provides the baseline for context and the Aviate team will now have an immense amount of data to leverage as they make Yahoo mobile properties react and respond without being told. They’ll also have a massive marketing channel to push an alternative Android experience if Yahoo chooses to go that route.

Launchers, which I’ve called Apperating Systems, are popular in Asia but less so in other parts of the world most due to the somewhat unregulated and wild west Android ecosystem in China. Apple’s re-design with iOS7 was more about making the experience smarter and more reactive but don’t look for Apple to open up the iPhone to third-party experiences, it will stay locked down. This is all about Android which keeps getting better and better with each version and the baked in context-engine Google Now keeps getting smarter. It will be difficult at best to out-do Google, Apple, and Microsoft on the OS itself but Yahoo, Facebook, Synacor, and other companies battling in the context-aware world will bring us apps and experiences that react without being told just based on what we’ve done and what we’re doing. Gone are the days of the dumb icon, privacy issues aside, in 2014 our smart phones will start to earn their name.

How to Pick the Right Co-Founder

Microsoft-Founders-Bill-G-007Gates + Allen. Jobs + Wozniak. Page + Brin. Clark + Andreessen. Filo + Yang. Co-founders of legendary tech companies that have shaped our world. So, what makes a good co-founding team? When does it come together? Should you even have a co-founder?

I’ve been a founder, co-founder, founding partner, and held other positions while succeeding and failing at a few ideas, watching friends do the same, and having the good fortune of meeting and mentoring a lot of aspiring entrepreneurs. So, is some humble advice with the battle scars attached.

Go it Alone or Team Up?

The “two guys in a garage” mentality prevails in the start-up world; the idea that there’s usually two co-founders that give life to a company. I happen to agree that at some point early in a company’s life this happens but not necessarily always at the beginning. In some cases, although I would argue rarely, being the only founder might work. The glaring example is Jeff Bezos being the sole founder of Amazon. There are a few factors that determine what makes sense:

  • Where did the idea come from? If you truly came up with the business idea on your own (and be honest) then you could run with it. If, as in many cases, it was something you thought of together with someone else and both decide to take the entrepreneurial plunge together then  you’ve got a partner in crime.
  • Are you both jumping in? Just because you batted around an idea doesn’t mean you’re stuck with the other person. You both have to decide to start the company. If only one person decides to run with it then the other person isn’t a co-founder, they helped with the idea but its going for it and executing that matters. There is no maybe, either you’re in or out from the start. No fence-sitting then claiming to have a stake later.
  • What are your weaknesses? What are you good at and where do you need help? Is your weakness so glaring that you need someone who can compliment you asap or the idea isn’t going anywhere? If you’re 100% business and think JavaScript is what they call it when you write with ink and a feather tipped pen then you need a co-founder.

Co-Founders Are Not Always Equal

It’s not the case that the term “co-founder” needs to apply to people who conceived the idea or started the company together. Sometimes, someone can earn the co-founder tag. I’ve done this at my previous company where someone worked so hard and was so integral to success that they de-facto were included in almost all decisions and contributed as much as I did. They deserved to be a co-founder and so I made it happen. Earlier in life I started a company where I had a co-founder and were equal partners right from the start. It taught me what can happen when the hype fades and the struggle continues but not everyone is in for the fight. So, I see two options:

  • Be the Founder: start your company and add people who add value where you can’t. As you move forward be fair and award equity and maybe even the “co-founder” or “partner” tag to the person that is just as integral as you are.
  • Co-Founder from the start: find your compliment and start the company together but make sure to spell out how equity is earned over time.

The Power is Not in the Crowd

Personally I feel that three co-founders is a maximum and two is ideal. More than three and you usually get group-think, less leadership, and have to deal with multiple egos and personalities at the top. Not good.

Being a co-founder is different from being an early, valuable, decision maker. Sean Parker was Facebook’s founding president but he’s not a co-founder of Facebook. Add people to your company as needed and give them the value and respect needed…and ALWAYS make sure their equity is on a vesting schedule!

Make Sure Everyone is Vesting

I’m often meeting first time entrepreneurs that haven’t been given the advice or read about the importance of vesting. Engineer founders are more interested in coding something great and later end up getting advice on structuring the actual company and running the business. In the simplest terms vesting can be explained as follows:

  • Vesting of shares means that a person earns shares or the option to buy shares by providing services to the company.
  • You get shares, or the right to exercise the options and purchase shares, based on a set “vesting schedule” provided that you are working for the company.
  • Your shares and/or options) “vest” over time as you stay with the company. This means you are either allocated shares outright or you exercise your options and can buy the vested shares.
  • When you stop working for the company you lose the shares that haven’t vested and the company can buy back unvested options (usually at the price they were offered which means no money or very little money to you).

Example of a standard vesting schedule:

  • Co-Founder gets 100 shares that vest over a 4 year period with a 1 year cliff
  • At the one year date if the co-founder is still with the company than 25% of the shares vest, so the co-founder gets 25 shares
  • The remaining 75 shares vest equally every month for the next 3 years provided the Co-Founder is still with the company. This means the Co-Founder gets 2.08 shares per month
  • At 4 years the Co-Founder has fully vested their shares.

This is WAY better and makes A LOT more sense than saying “let’s start a company we each get 100 shares right now,” only to have your co-founder leave when you’re six months in taking half the value of your company on paper. It’s thankfully something aspiring entrepreneurs increasingly understand but still happens more often than I’d like to know of. Vesting means that if you’re with the team then you get rewarded and if you’re not you don’t.

Above everything else, even if you skipped everything else in this post remember it is 100% true that starting a company with someone is like getting married. Make sure they are a perfect fit for the success of the business, bring complimentary skills to the table and that you get along. If not, it’ll end in a messy, ugly divorce. Whether you go it alone or get in bed with someone else. Choose wisely my friends!