Archive for March 2011

Tech Startups Session 4:

March 23, 2011

Today the talk was from Iñaki Arrola, Founder and CEO of  A few years ago, Arrola and his team had the opportunity to obtain a top domain name – – and went for it.

Iñaki Arrola

Today they are the biggest car site in Spain, and I am going to use this blog to discuss some of the lessons he gave us.  It was interesting in this case because many of Iñaki’s suggestions were not things that he really appeared to follow rather than just telling us all the things he did really well.

  1. Don’t start businesses with friends/relatives.  Apparently this didn’t turn out well for Iñaki.
  2. If you give employees equity it can be a problem for them because it has value only once you sell, so they may become trapped in their position.
  3. People overestimate the amount of sales, so dividing by ten will probably give you an accurate view.
  4. You need an in-house technical capability, at least so you know how much things should cost to develop.  Their businesses didn’t have these skills for the first three years.
  5. User experience skills are good to have, even though his team didn’t have them at first.
  6. Be honest with your investors (a common suggestion!).  They really want to see honest people to deal with and an investor is investing in the person more than the product.
  7. Focus on the things that you users want to do – don’t just put a bunch of things on your web site.
  8. Being an entrepreneur doesn’t have to ruin your life.  Your wife is your biggest stakeholder – if she’s not behind you then you won’t have a wife or a business.

Some keys to success specifically for

  • High quality cars
  • communicate with the users – be close to them
  • a focus on the core needs of the users
  • no ads, but know what the user is doing on your web site
  • speak well of competitors – wide range of views not just about their own site in their social feeds
  • The name – in fact, often benefits when a similarly named competitor runs offline ads.

Some questions that I have are the following:

  • (I asked during class) A mobile app?  Yes, they have one coming, but they have some issues to work out and have to decide how to do it.

Note – exists and isn’t apparently being used for anything useful.  Perhaps someone wants to buy a domain name for car sales? 🙂


Session 3: Managing the Tech Startups (Updated with Questions)

March 21, 2011

Today’s Talk, Jorge Mata.  After starting in consulting and large companies, Jorge became an entrepreneur in his mid 30s.  He has extensive experience in raising capital to fund start-ups.

Some points from today’s talk (generally translated into my words):

  1. Scalability is key to investors.
  2. You don’t have to invest your own money, because your focus will then just be on making your money back and you won’t be focused.
  3. Consider joining another start-up, its not just about making your own.
  4. Jorge likes to see running companies, not just ideas.
  5. Treat your investors well.  This means you communicate with them, good news and especially bad.
  6. The climate for raising money is getting better and better.
  7. A local CEO is very useful for navigating cultural differences.
  8. Jorge likes to see start-ups that are solving process problems, not just new platforms.  How can technology make actions easier for end users?
  9. You don’t want to pay for advice, because they will have a conflict of interest.
  10. Timing is very important when selling your company.
  11. Be willing to make rapid business model adjustments to match a dynamic market.
  12. Understand what your investors are looking for in terms of return (including time-frame).
  13. Don’t forget to focus on the problem you are solving when you design your business.  Value proposition!
  14. FoodieSquare! (no Tech Startup class is complete without a Foodiesquare advertisement)
  15. Social is a great, low cost tool for promoting a start-up.  Google is expensive.
  16. Valuation targets.  3 million for Angels, 7 million for VCs.

Great talk today – lots of interest and motivation.  Will follow up with questions later.

Some questions that came to mind today were:

  1. What are some ways to prove a scalable business model without an entrepreneurial history?
  2. How do you prove your company is worth millions with no track record?  What specific things can you do to reassure/prove it to investors?

New York Times paywall

March 20, 2011

I’ve now learned to never use the quick post option unless its really a quick post 🙂

One of my favorite web sites, The New York Times, has decided on restricting access and bringing its paywall back (I never knew there was one before – I guess I never read it then).

The Announcement

Basically, if you go over 20 views a month the Times wants you to pay a few hundred dollars a year.  I wish them luck, but to me this is a very bad sign for them.  Nobody wants to pay that much money when so much of the rest of the web is free – and so many other businesses are very profitable following modern web based models.  The Times seems to want to revert to an era where they were only distributing newspapers and getting paid for it, unfortunately they just haven’t found a way to do that.  When the marginal cost of distributing information is dropping toward zero, it’s very difficult to get people to pay you for it.  This reminds me of the music industry a few years ago.  Like the RIAA, they deserve to get paid for their content, but also like the RIAA they are going about it the wrong way.

So what should the Times have done?  Well, this is a bit harder to figure out.  They’ve done some experimenting with blogs (free/low cost production), but apparently it wasn’t enough.  Perhaps better targeted ads, or improved social capabilities, or providing some other thing you can’t get everywhere else is the way to go but they’ve decided that the old way of doing things is the best.  We will see how it goes, but I don’t think it will last a year.

Weblogs SSL

March 16, 2011

Today in tech startups we are going to talk about Weblogs SL (, with Julio Alonso.  They are a Spanish based company focused on blogging.

Here are some questions I have for the company:

  • I read about a controversy in wikipedia related to GPL software usage.  As Spanish is not my strongest language, I wasn’t 100 percent sure what the problem is but it appears as if they may not be sharing GPL based source?  Is this a GPL violation, or is the software modified in such a way that the new code doesn’t need to be shared?
  • Also, I read that they were using an Open Source ERP software called Open Bravo ( and I am interested in knowing more.

OK, class is about to start – I may update with more questions as they come to mind.

  • New question:  What are some ways you’ve kept your company small and lean?  How do things work from an operational perspective?

The future of mobile phones?

March 15, 2011

So I’m sitting in a panel discussion at the IE Digital Forum and we have representatives from Google and RIM, among others, discussing the future of mobile computing, so I thought I’d chime in.

So I discussed some of the history yesterday, in the context of Microsoft’s struggles with Windows Phone 7 … or is it Windows 7 Phone?  I always get that mixed up.

So let me go in order from worst to best.

Symbian (and Meego). Since Nokia already announced they were migrating away from this platform, you can put a fork in it – its over for Symbian (and Nokia too, in my opinion – they may survive as a Motorola sized company but their glory days are gone).  The previous future platform for Nokia was Meego, which is based on Linux (like Android and Pre).  Without Nokia, I don’t see Meego happening at all in mobile phones.  Perhaps you will see it running your fridge in a few years.  Unfortunately, they couldn’t seem to get the thing out the door and have made an alliance with Microsoft to be a favored partner for the latest version of Windows Phone.  Unfortunately for Nokia this creates a number of questions.  For one, the first phone won’t even be released for a year while you’ve completely demoralized your internal and external developer community.  As a result, they are basically starting from scratch, and with an unproven platform in Windows Phone.  For example, if you can’t control your own software how can you truly differentiate yourself?  Even worse, if somehow their phones take off their apparent lack of development focus on value added software and services means that they can be easily copied by the Samsungs and HTCs of the world.

Windows Phone 7. I discussed some of the issues here so far.  Yes, if Microsoft can execute on this it will provide some level of strategic differentiation for their clients (the operators and manufacturers) then it can at least reduce the level of platform fragmentation faced by Android.  With that said, they can’t get updates out, they can’t sell handsets in large volume, and they really don’t have very many apps considering how mature the market is (10,000 for them, 100k+ for Google, 300k+ for Apple).  Even worse, they’ve just spent a ton of money (which I think is not a bad decision if it pays off) focusing on Nokia, which is likely to alienate their other partners into supporting Android even more, when Nokia can’t even get a phone out the door in a year.

RIM Blackberry. Unfortunately I think RIM, despite their past leadership in the market, probably is going to be relegated to being a low end platform for the next couple of years and if they don’t make a shift soon they will have to move to Android and then build their management services on top of it.  With that said, I’m intrigued by the potential of the QNX OS (soon to be) shipping on the Playbook tablet.  I don’t believe that RIM has announced that as being their future phone platform, but technology wise it’s ahead of the ancient blackberry OS.  I think that relying on another company for your operating system is a dangerous game, and if you play it you want to be HP and not say Dell.  I would be a lot more bullish on RIM considering their still considerable market share and brand name, but considering its been 4 years since the iPhone was announced and they still can’t compete with version 1 very well (or perhaps 2 is a better comparison, once Apple allowed apps).

HP / Palm Pre. I would have considered this company surely gone not very long ago, but considering that they appear to have a very good team behind the Pre (many Apple iPod / iPhone team alums), deep pockets in HP, and a leadership newly dedicated to cloud computing and software they could very well turn out to be the dark horse candidate.  The Pre operating system has always received good reviews.  Downsides?  They aren’t shipping a whole lot (if any) phones, and HP was never a phone manufacturer.  Even in the case of Palm, they did a lot better with the software than the hardware.  This would have been a great acquisition for Nokia a year ago in terms of product fit (not sure about the culture in Finland versus Silicon Valley), but it’s too late now.  Let’s see how HP can handle the Pre.  An interesting aside is that the culture of Apple, where many of the Pre team came from, originated at / was inspired by the old culture of HP, so they’ve come full circle.

Google Android + Apple iOS. I am cheating a bit by not picking a winner, but let me explain.  I think that Apple will continue to lead in terms of user experience, profit, and driving operating system innovation.  I think that Google will drive search, cloud computing, and form factor variety.  Google won’t make anywhere near the amount of money that Apple will, but I don’t think that’s their point.  They needed Android to prevent Apple from completely dominating the next generation of computing like Microsoft did in the 90s / 00s.  I think emerging markets will heavily break toward Android based devices because Apple simply will not make devices *that* cheap, or devices focused on specific niches.  Apple will gain market share in richer countries as a result of their increasing carrier presence, and especially once they add a lower price form factor like they did with the iPod.  One caveat in the rich countries is that I can’t predict how the vastly increasing presence of various computing devices in the near term will affect Android distribution – I don’t see iOS in your fridge, or your microwave, or your streetlamp – but maybe Google will go in that direction.

Why does Microsoft keep messing up?

March 14, 2011

So after reading about Microsoft’s latest failings with Windows 7 Phone, where they had massive problems with a minor update and have had to push back some pretty basic functionality I found myself prepared to write a blog post about their continuing struggles “getting it right”.  IE’s market share is barely more than half what it was ten years ago, they completely missed the boat on tablets, Ballmer is known more for missteps and wild antics than great business strategy.  Their share price really does reflect some of the struggles they’ve had, and it seems like a lot of folks think the company is performing worse than in the past.

However, the more I think about it the more I realize that this probably isn’t the right opinion.  Yes, they are falling behind in mobile.  But let’s look at that for a moment.  They had ten years or so (including the Windows CE PDA days) of developing for mobile devices where their main competition was Palm – a company that just couldn’t figure out what to do with itself, RIM (Blackberry) – a glorified two way pager company, and Nokia (Symbian) – who never figured out that phones need good software.  After years of fumbling around and listening to analysts bad advice and letting its lead in smartphones go to RIM and Microsoft, Jon Rubenstein managed to get an excellent product out in barely a year and a half after joining – unfortunately it was about a year too late for Palm but it showed just how badly the company had let itself go after leading the PDA revolution (post Apple Newton – a brilliant product in its own right – yes I owned one).  The fact that RIM was doing great in the market showed that a special purpose device that works well has a place.  However, they were still struggling to improve their phones with fairly basic functionality such as *color* and actual web browsing.  Sure, the batteries lasted forever, they were very reliable, and very secure, but clearly there was a spot in the market that they weren’t filling.  Symbian, well … I don’t know much about Symbian.  I’ve heard rumors of this mythical platform that is now being abandoned by Nokia for Windows 7 Phone (perhaps I’ll post on how bad of an idea this is another day), but I’m not sure I’ve ever used one.  All I know is that developers complained about it a lot, so considering they had years to fix the problem I’m going to lump them in with Palm under “bad management”.

So then what happened?  Microsoft was happily filling a niche between the two way pager company and the dysfunctional smartphone brothers when Apple came around and dropped a completely disruptive product in the market.  Google, to their credit, recognized that all they needed to do was switch courses (they had a sharp team working for them as a result of an acquisition and were already focused on mobile) and by using available open source technology (not too far away from what Apple had done to bootstrap the development of their OS a few years earlier) as a basis to essentially make a passable copy of the iPhone and focus on some of the things Google is good at (maps, for example, or translation, etc).  As a result, a few years later, we end up where we are today.  RIM and Symbian are fading, Palm was acquired by HP (Oh Nokia you really messed up by not grabbing WebOS), and Windows Phone 7 isn’t really going anywhere while the iPhone and Android phones take over the market.  So what is my point?  Microsoft isn’t doing worse, in fact I’d argue they are doing better than before – they’ve just never had to complete against companies like Google and Apple.  Even in the 80s and 90s, they were mostly faced with clueless start-ups like Netscape, tech oriented companies like Digital, and slow moving and almost dead IBM.  In short, the competition got better while they, like other large companies in the past, were slow to react.

So what now?  Is Microsoft doomed to die a slow death?  Pretty unlikely.  The latest versions of Office and Windows, their biggest products and the source of most of their revenue, have received rave reviews and solid sales.  Although the XBox has been a money loser over its lifetime, its making money now and Kinect is a huge hit.  Their enterprise products such as Windows Server, Exchange, etc. are fighting against weaker competitors (anyone who has used Lotus Notes knows what I’m talking about).  On the other hand, and their lack of movement in stock price over the past ten years agrees – Microsoft is probably done growing very quickly unless they can find another major revenue stream (apparently big tables don’t quite sell as well as iPads).  If Apple wasn’t doing it with such ease there probably wouldn’t be such pressure, but Ballmer probably doesn’t even have as long as Elop at Nokia if things don’t pick up for Microsoft and I think he knows it.

So, I’d continue but its getting late .. hopefully this post made sense.

I’m back

March 14, 2011

I’ve been thinking of refocusing on this blog for a while, and now my latest course “Managing the Tech Startup” from Enrique Dans at IE Business School is asking us to write one so I think it’s the perfect opportunity to get moving on it again.

So now the question is … My own domain?