lunes, 26 de junio de 2017

The Scale Fallacy

The Scale Fallacy (And How I Learned the Value of Success That Was Steady, Not Spectacular)

Services businesses don’t scale because they are based on manpower: to double your revenue, you need to double the hours worked. Unless there is unused capacity, that means doubling the size of your team. And that’s just to achieve 2x growth. But in the tech world, scaling often means aiming for 10x or even 100x growth because the marginal cost for making extra copies of a digital product is insignificant.
VCs are looking for many multiples of growth to make a return on the multiple businesses they’ll invest in that fail. They’re not interested in slow but steady growth; they want boom, and they’ll risk bust (for the individual startup) to get it. (That’s just another reason why investor interest is not a good guide of the potential of your startup.)
So VCs won’t be interested if your startup doesn’t scale, and neither will the media and neither will the public. This is because the American dream isn’t a fantasy of steady, incremental growth—it’s a dream of celebrity, stardom, and riches.
If you’re prepared to put the dream on hold and take a cold look at your prospects, you’ll realize that there are significant advantages to creating a services business—one that doesn’t scale.
You’ll see money on day one, instead of working towards a future payday – which may never come.
You’ll learn about the cutting edge of what customers are demanding (and developing).
And this combination of revenue to play with and a sense of what is in demand can provide the perfect ingredients with which to subsequently create a successful scalable product business.

Jonathan Siegel is the founder of RightCart, RightSignature, and RightScale, the chairman and founder of Xenon Ventures, and the author of The San Francisco Fallacy.

Los agujeros negros del progreso: clusters globales de innovación

@sintetia Los agujeros negros del progreso: clusters globales de innovación

–> …las universidades y centros públicos de investigación tienen un rol significativo: en Barcelona dichos agentes registran el 17’3% de las patentes mientras que en Madrid aportan un 25’7% del total.
–> Valores muy elevados comparados con los clústeres líderes: en Tokyo-Yokohama, las universidades y centros de investigación sólo registran el 2’9% del total de las patentes. El resto, son registradas por empresas.

Pese a la buena noticia de un incremento reciente del 20% de exportaciones de alta tecnología en Catalunya, el sistema tecnológico de Tokyo-Yokohama genera patentes a una tasa 46’9 veces superior al sistema tecnológico catalán. Silicon Valley lo hace 17 veces más rápido. Beijing, 7’58 veces. París, 6’72; y Stuttgart, 4’75 veces.

que las empresas presenten un nivel comparativamente bajo en innovación es indicativo de que hay que mejorar también la calidad del entorno donde compiten.

Hay que seguir desarrollando un sistema de innovación que actúe como tal:
–> incrementar los incentivos empresariales a la I+D mediante fiscalidad favorable, créditos blandos, ayudas directas y programas de compra pública de alta tecnología, sin trabas burocráticas.
–> Hay que mantener las inversiones estratégicas en infraestructuras científicas y tecnológicas (especialmente en los campos que sustentan la competitividad empresarial), y priorizar los grupos de investigación que trabajen en proyectos tecnológicos empresariales (de largo plazo y profundidad científica, no en meros proyectos de ingeniería).

domingo, 25 de junio de 2017

To Grow Faster, Hit Pause

To Grow Faster, Hit Pause — and Ask These Questions from Stripe’s COO | First Round Review

“A lot of companies don’t decide how they want to grow until they’re well into their growth phase,” she says. “For a long time, your actions pull your company along, and then all of a sudden it switches — your existing business starts pushing your behavior. External forces like feature requests, the need for more customer support, the need to create a team to do X when you never even needed to do X before — those forces start to dictate your decisions.”
The key, she says, is pausing just long enough to be very intentional about how you approach each phase of growth. 
It’s easy to become too reactive, and when that happens, you’ll inevitably start to make human resources mistakes, execution mistakes, prioritization mistakes.

1. Have we documented our operating principles?

Stripe calls them “Operating Principles.” (Many companies have “values,” but Stripe wanted to distinguish philosophical beliefs from the concrete principles that should be applied to the day-to-day work of running the business.) Three of Stripe’s operating principles, as Johnson describes them, are:
  • Users first: “We always start with what our users need or would like, and then consider things like like infrastructure, internal constraints, partnerships, product roadmap, and so on."
  • Think rigorously: “We care about getting things right and it often takes reasoning from first principles to get there. We work hard to detect the errors in received wisdom. Rigor doesn’t mean not-invented-here syndrome; we’re interested in the world around us and think that other companies, industries, and academic fields have a lot to teach us. But in many cases progress comes from taking paths less traveled.” 
  • Trust and amplify: “We want to work in a company of deeply good people who treat their colleagues exceptionally well. People should be committed to amplifying one another: to going out of their way to help each other in both the short- and long-term.”

2. What structure is going to help us achieve our goals?

3. Who has been successful at our company so far?

4. Do we have a 5-year plan?

5. Do we have a way to measure the employee experience?

6. Are we decentralizing decisionmaking?

jueves, 8 de junio de 2017

7 Habits of Tech-Savvy Teams – The Mission

 via @ChadGrills from _ The Seven Habits of Tech-Savvy Teams

A quick recap of the seven habits of tech-savvy teams:

  • Write well.
  • Time management is vital.
  • Use the best tech. Discard the rest.
  • Compete with who you were yesterday, not with each other.
  • Cut off negativity.
  • Create an environment that rewards prophets.
  • Master your health.

sábado, 3 de junio de 2017

Step aside Silicon Valley, there is a new tech hub in town

Step aside Silicon Valley, there is a new tech hub in town | World Economic Forum

Deep tech accounted for $1.3 billion of European venture investments in 2015, delivered in 82 rounds, up from $289 million, delivered in 55 rounds, in 2011.

Europe’s traditional industries are now awakening to tech. Two-thirds of Europe’s largest corporates by market capitalization have made a direct investment in a tech company. One-third of those companies have acquired a tech company since the beginning of 2015.
image by stack overflow

…many small export-oriented European Union member countries – namely, the Benelux, Baltic, and Nordic countries – rank well above the US in so-called “e-intensity,” which covers IT infrastructure, Internet access, as well as businesses, consumer, and government engagement in Internet-related activities.
These “digital frontrunners” generate about 8% of their GDP from the Internet, compared to 5% in Europe’s Big Five (Germany, France, Italy, Spain, and the United Kingdom).

•while European tech entrepreneurs find it as easy as their American counterparts to raise startup funds, US firms enjoy 14 times more later-stage capital. That funding gap would disappear, if European pension funds allocated just 0.6% more of their capital under management to venture investments.
•lack of a true European single digital market. In the US or China, tech entrepreneurs gain immediate access to a massive market. In Europe, they still must navigate 28 different consumer markets and regulatory regimes. …Europe’s “single digital market,” they argue, currently amounts “to a jumble of outdated, corporatist, counterproductive industrial policies that favor producers over consumers, big companies over small, traditional incumbents over digital startups, and EU firms over foreign ones.”
•instead of liberalizing, the EU wants to regulate.

A new appetite for risk seems to be sweeping the continent; Atomico reports that more than 85% of founders say it is “culturally acceptable” to start one’s own company. Add to that deep research talent – five of the top ten global computer science faculties are within the EU – and Europe’s start-up boom looks sustainable.

Europe’s digital frontrunners are beginning to organize into a potent force, with 16 small EU countries, from Denmark to Ireland and Estonia, having formed a pro-Internet group. Together, these countries have urged the EU to ban data-localization requirements.

The Friendship of David & Goliath

 @daphnipolis uses to send a weekly newsletter, always interesting but with an editorial I think they do not publish in the internet… so I will, as it is a very good article, interesting as it backs the (not so) new trend accelerators are promoting, some of then even changing their current business model… by Paul Bazin.

Bold emphasis is mostly mine.
Our curse in Europe is that despite all our efforts we are not as sexy as the US with their big champions. That’s understandable: They have built worldwide tech giants since the 80s. Of course, we have our own champions, the “Criteos“ and “Spotifys“, but they don’t have the same visibility across the world to date. 
If you like to look at the bright side of things, you can mention that foreigners are very often surprised by the quality and the energy of the ecosystem. That is exactly what happens to Paul Graham. We might have an undervalued asset to showcase our know-how: France's multinational corporations represent 8% of the biggest companies in the world. And guess what: As they are well-known throughout the world, they could be really good ambassadors. 
But to do so they should be real actors of the tech ecosystem, you say? That’s right! They should be and they need to be.  
We often consider that startups and big corporation are the David and Goliath of an economic battle. Big corporations are seen as the old generation. The expert one, where you needed to be the biggest know-how in a specific field to work your way up. Startups are at the opposite. In order to have a new look you need to think different, thus you need to have a global and broad knowledge. Brian Chesky never worked in the hospitality domain before disrupting it with Airbnb. Startups bring this fresh and new look that big corporations desperately need. Meanwhile, to share this vision, startups need money, visibility, worldwide networks, facilities, the list goes on… 
There are two types of startups that interests MNCs:
• The competitive: The ones that are attacking big corporations head on by capturing market share. Those provide the new vision.  
•The mutualistic: The ones that are offering tools and technology to reinvent themselves. Startups can benefit from big companies by using them as a distribution channel (think what Apple did to the mobile industry) or clients (think of many B2B SaaS companies), big enterprises are using startups to reinvent themselves by making better use of their data, being more efficient, more customer centric, the list goes on... Those escort MNCs in their digital transformation.  
Startups and big corporates should be viewed in a co-evolution process. The morphology and behaviour of the one is impacting the other. 
Bottom line: Goliath needs David and David needs Goliath.
Big corporations should provide visibility, know-how, money in exchange of a fresh vision, and tools for their digital transformation.  
This way of seeing the relationship implies a big mentality shift: MNCs must be seen as a leverage opportunity to scale, and not as the enemy anymore. Having international players close to us is a chance for the ecosystem to grow.

viernes, 19 de mayo de 2017

Spanish entrepreneur ecosystem is Great Again

and that's even without coming to Valencia… imagine if they did!!

daphni newsletter: what daphni has learnt about Spanish Ecosystem and must-reads of the week

After not having been there in 7 years, I almost didn’t recognize Madrid: Streets were busier, the food tastier, the sky bluer than ever between the ochre walls of la Plaza Mayor. Even the posh Salamanca looked funky. And I don’t want to mention the startups there.

Trying to rationalize my romantic surge, I took a look at the figures. Spain is recovering fast. In 2015, investors injected $664 million in Spanish startups, versus $363 in 2014. Between 2015 and 2016, the average ticket jumped from $250k to $650k. Even if Spain is still lagging behind the UK, Germany or France, it is growing much faster than them.

The 3 key takeaways from our May trip

 - Everybody is “capital efficient”. We heard it more than once, both from the entrepreneurs and VCs. Understand that Spain has known a long decade of cash scarcity, with smaller funds, pale corporates and a bloodless consumer market. In that context, each euro counts, and both founders and investors are particularly picky when spending their money. This great quality could yet dampen their enthusiasm to tackle big I&D projects or mass consumer markets. Get lean or die tryin’.

- Spain first. All the Spanish VCs and CEOs we met welcomed us warmly, with no exception. They were glad to learn more about us and seemed very open to host French co-investment to feed their champions. Regarding the reciprocal flow, we felt that France was not their top priority, coming well after Latin America, UK and Germany. For now :)

- The difference between Madrid and Barcelona. Using the most refined and secret due diligence and interview processes, we finally hacked THE question. Long story short: Barcelona is more internationally talented and focused with a strong sweet spot on BtoC ventures and tourism, while Madrid is open to Spain and Latin America and cherishes the relationships with corporates.

 We give a special thanks to all the VCs, angels and entrepreneurs who brilliantly welcomed us during the trip :)

martes, 16 de mayo de 2017

Co-workers and makers: New public policies and corporate strategies for the city

LSE Business Review – Co-workers and makers: New public policies and corporate strategies for the city

Our seven propositions to make communities more open, sustainable and inclusive:
  1. More emphasis should be put on ‘infra-organisations’i.e. transparent platforms designed for independent entities to share identity and governance.‘Infra-organisations’ provide infrastructural services without searching for the increasing returns likely to lead to a monopoly (Google). They benefit both citizens and entrepreneurs. The growth of each sub-unit is limited to the governance can remain highly collaborative. Framasoft in France best illustrates this new trend;
  2. An ‘inclusive label’ could be organised by collaborative communities and collaborative movements themselves: the label would work like a brand to signal a product’s social and ethical quality (respect for the rights of workers and the environment) and be operated by a combination of public and private structures;
  3. Mega-spaces could be opened in all cities to let expressions of creativity flourish: collaborative spaces can coordinate broader movements. The whole city could periodically be turned into an urban-planning ‘hackathon’ to mobilise a diverse set of individuals from a given area. Such involvement can strengthen the social fabric of a territory.
  4. Academic presence in the city should be reinvented towards more urban and rural mobility. Academics could be made to serve and spread knowledge geographically and socially. Collaborative spaces can serve their mobility;
  5. Ephemeral labs could be multiplied and supported by public authorities and private companies. Mobile labs or maker spaces can help revive rural areas and connect isolated communities together;
  6. Open innovation should be made more open. Innovation involves numerous external and internal stakeholders. Why not push open innovation initiatives in the space of the city itself (e.g. with fablab trucks)?;
  7. Finally, better global digital infrastructures should be developed for coworkers, remote workers, and nomads, which requires the support of public policies, at the national and EU levels.

sábado, 13 de mayo de 2017

Innovation, Change, and the Rest of Your Life (Steve Blank)

 As we’ll see, information does not mean experience, maturity or wisdom.
Reading about, hearing about, and learning about how to build a successful company is not the same as having done it. 

Innovation, Change, and the Rest of Your Life –

Silicon Valley emerged by the serendipitous intersection of:
  • Cold War research in microwaves and electronics at Stanford University,
  • a Stanford Dean of Engineering who encouraged startup culture over pure academic research,
  • Cold War military and intelligence funding driving microwave and military products for the defense industry in the 1950’s,
  • a single Bell Labs researcher deciding to start his semiconductor company next to Stanford in the 1950’s which led to
  • the wave of semiconductor startups in the 1960’s/70’s,
  • the emergence of Venture Capital as a professional industry,
  • the personal computer revolution in 1980’s,
  • the rise of the Internet in the 1990’s and finally
  • the wave of internet commerce applications in the first decade of the 21st century.
  • The flood of risk capital into startups at a size and scale that was not only unimaginable at its start, but in the middle of the 20th century would have seemed laughable.

What we’re now seeing is The Democratization of Entrepreneurship. What’s happening today is something more profound than a change in technology. What’s happening is that these seven limits to startups and innovation have been removed:
  1. Consumer Internet and Genomics are Driving Innovation at scale.
  2. We’re now Compressing the Product Development Cycle.
  3. Founders Need to Run the Company Longer.
  4. You can start a company on your laptop For Thousands Rather than Millions of Dollars.
  5. The New Structure of how startups get funded.
  6. Starting a Company means you no longer Act Like A Big Company.
  7. The last one and perhaps the most profound and one students graduating today don’t even recognize is this — Information is everywhere. 

The Entrepreneurial Singularity
Revolutions are not obvious when they happen. When James Watt started the industrial revolution with the steam engine in 1775 no one said, “This is the day everything changes.” When Karl Benz drove around Mannheim in 1885, no one said, “There will be 500 million of these driving around in a century.” And certainly in 1958 when Noyce and Kilby invented the integrated circuit, the idea of a quintillion (10 to the 18th) transistors being produced each year seemed ludicrous. 
We may remember this as the time when scientific discoveries and technological breakthroughs were integrated into the fabric of society faster than they had ever been before. When the speed of how businesses operated changed forever. 
We may remember it as the time when we reinvented the economy and GDP began to take off and the world reached a level of wealth never seen before. It may be the dawn of a new era for a new economy built on entrepreneurship and innovation.

martes, 9 de mayo de 2017

Ooooh...that founder narrative

 by @asanwal in CB insights newsletter.

The idea that tech startup founders take a bunch of financial risk when starting up is on average pretty BS. It's generally manufactured cuz it's great for PR.

Let's understand the risk.  

  1. Most are highly employable if their startup doesn't work out
  2. The reality is that many are middle-class or better
  3. If they raise money, they're taking a salary (even if modest) as well
  4. Many have families/spouses who bring insurance, paychecks, financial support, etc
This is not roughing it despite the stories they tell when trying to get press for their startup.

I'm not saying it's easy, but this whole "we burned the ships. There was no turning back" narrative is kinda horse-isht.

If you dig into the background of founders who say this, more often than not, they've got a safety net.

Heck, a lot of them raise from friends & family so it's clear their families have some discretionary dinero lying around. (BTW, I'm not talking about the 0.1% of people whose parents take a 2nd mortgage out to pay for their kid's startup. That's just dumb.)

Again, I'm not saying the startup life is easy or some folks don't struggle significantly financially. I'm talking on average.

The problem with this "woe is me, I took all this risk" narrative besides it being false for the purposes of PR is it makes people think their success is due to them and doesn't give credit to luck or other advantages. It's tiresome and dangerous.

If you're truly living hand-to-mouth, a tech startup is prob the last thing you build. You'd want a cash flow generating business. Not on-demand laundry.

BTW, tech startups are socioeconomically, a middle, upper-middle, and upper-class game. This should not come as a surprise to anyone.