Tuesday, August 26, 2014

The Digital Divide

Zero rating means subsidized access from mobile providers to selected areas on the Internet as a means of gaining increased subscription rates. A Virgin Mobile deal offers unlimited access to Twitter, Facebook, Instagram or Pinterest for $5 a month. Music lovers love T-Mobile for their zero data unlimited music streaming service. It offers tunes 24/7 through all the top services like iTunes, Spotify, Pandora and iHeartRadio.

Is there space left on World Wide Web for start-ups?
Is there space left on World Wide Web for start-ups?
Revenue the mobile phone providers lose out on by handing out free or below cost data is more than made up by increased subscription rates and the returns that come with other services used. Mobile phone users get what they need for free or at a small cost, providers get more business - a winning situation for both parties. It all sounds great, but as with most things advertised with the four letter f-word (free); there is no such thing as something for free. Here the losing party is Internet-based businesses and in particular start-ups.

How zero rating affects start-ups

Subsidized access makes the already popular apps more popular and leaves less room for start-ups to get their share of the market. To get in on the action, tech start-ups have to include the widely held social media streams as part of their marketing plan or simply lose out on a chunk of the market. Social media areas like Facebook are closed off versions of the Internet, not just social tools. You can shop, play games, gather information and do marketing - all in one area. In a MerchantCircle survey it was discovered that 65.7% of businesses use Facebook as a marketing tool. Think of a bag of popcorn in the microwave, the kernels slowly start popping up one by one and then it all goes crazy. Just like that Facebook users started popping up all over, and fast. The difference is that Facebook is an apparently never-ending bag of popcorn and its explosive personal user-base is closely followed by its business user-base.

What is a start-up to do?

The solution is clearly for businesses to get their Facebook profiles up there; start groups, join groups, Tweet, stream, Pin etc.

Unfortunately there is one problem with this, choice. Most start-ups would like to reserve the right to freedom of choice, and rightly so. It has become such an issue that the Subsecretaria de Telecomunicaciones of Chile made a ruling that zero rating was in violation with net neutrality laws and banned it as of June 2014. Not many countries take the stance that Chile has and social media subscription rates continue to skyrocket. Whether mobile providers will take a step back and stop the trend of subsidized access, only time will tell. Until then, hopefully there still is a space on the World Wide Web for start-ups.

Tuesday, July 15, 2014

Old World vs. New World

Two places are popping up in start-up news lately - the city Berlin and the country Brazil. While these places are geographically and culturally miles apart, there is common ground when it comes to business.

Old world Berlin making waves

Golden Brazil
Super low rent is only one reason for entrepreneurs to launch start-ups from the über-cool Berlin. Start-ups in the German city like the hugely successful Zalando and its backer Rocket appear to be motivating other investors to look at Berlin more favourably. ResearchGate moved from Boston in the US to Berlin and has Bill Gates as an investor. Although nothing is concrete as yet, these companies are considering IPOs, as are other tech firms situated in Berlin like Mister Spex and Wooga. Also to be found in Berlin, the food ordering company HelloFood aced the award for the 'Best E-Commerce Start-up 2014' from some 800 European contenders. With an unemployment rate of over 10%, Berlin could certainly do with the boost a tech start-up wave brings.

Is it sunnier down south in the new world?

Brazil is rumoured to have spent at least $13 billion on the World Cup. This is in comparison to the puny $1 billion South Africa spent on the previous World Cup. Surely there is no shortage of money for funding start-ups? Maybe. As always Brazil is a country of contradictions. While mobile technology is booming and digital intelligence is on the rise, people are also taking to the streets in protest of the large sums of money spent on the World Cup. According to Sergio Borger from IBM Research in Brazil, the innovative new technologically fuelled eco-system in Brazil is a breeding ground for entrepreneurial opportunities. The country appears to be one of the best business environments. According to the UN, it has the seventh largest economy in the world and the indisputably largest in South America, despite its reputation for corruption and violence. 

Sunday, June 29, 2014

What is Growth Hacking?

The term 'growth hacking' was coined by a blogger called Sean Ellis in 2010. It is a marketing method that combines social networking with critical thinking and throws creativity into the mix. It is becoming an integral ingredient to lean marketing and therefore particularly useful to start-ups.

Growth Hacking can Grow Your Business

One of the biggest problems start-ups are faced with is a lack of capital. Not having unlimited funds to hire marketing wizards and not having enough experience with traditional marketing to do it in-house has caused many a start-up's demise. Marketers and advertising agencies are aware of the value of their expertise and charge accordingly. The ideal situation for any new entrepreneur is to find a way of making existing technology, like their online presence, work as marketing tools or to have built-in marketing tools in the actual product. In other words, let the business grow itself through itself.

Does this sound complicated?

It is not complicated, really. A simple and simply great example of a marketing tool built into a product is Twitter. When Twitter started out, they had a problem with retention. Although new users signed up by the dozen, not many became active. Instead of spending a fortune on jacking up their conventional marketing, Twitter took a different approach. First of all they figured out the problem, which was that users were not likely to be active if they didn't have people they knew on Twitter to interact with; to get users to start interacting, Twitter had to get their friends and family to join. This was achieved with a technical, creative and practical solution; they built in the functionality of 'Suggested User Lists'. Just like this simple and extremely effective growth hack, you can leverage growth hacking to build your business, even with limited funds.

A Pinch of Creativity and a Dash of Tech Savvy

Many of the most renowned websites use growth hacks to create brand awareness and improve profits. Social networking sites Facebook and Pinterest both used exclusivity as a launching pad to getting the numbers in. Dropbox used a referral program that gave out free storage space for every signup and Hotmail added a tagline in every signature, on every email sent by their 20 something thousand subscribers inviting recipients to sign up. Whatever product you are punting, start by looking at the systems in place. The first question to ask is: 'How can this be automated to my benefit?' Instead of spending money on Adwords or ad agencies, try to figure out how to reach your target audience through creatively using technology. Research Organic SEO methods; research keywords, look at what competitors are doing in their social media streams and blog, blog blog. If this doesn't get the desired results, look at hiring a growth hacker at a fraction of the cost of an ad agency.

Sunday, June 8, 2014

Self-Drive Cars and the Future of Transportation

Self-Drive Cars
Google recently announced a prototype of a totally self-drive car. After running modified cars with Google self-drive technology and clocking up more than 700,000 miles, it has decided to move to the next stage. The prototype (which is still a long way from production) has no driver controls and is powered by battery.
Many people are probably asking themselves, "Would I ever buy one of these?" and are probably giving themselves a negative response. They are suspicious about a device that takes away their control. But in order to understand this innovation's potential, we need to dig a little deeper.

We need to consider the increasing challenges to modern transportation, and the innovations of recent years. In the same week that Google announced its self-drive car prototype there were two other significant transportation stories:
1. Faced with the increasing health-threatening air pollution, the Chinese government announced that it is taking six million older cars that do not comply with emissions standards off the road. Some 31% of Beijing's air pollution is caused by cars, so the new law is expected to make a serious impact.
2. Uber, the transportation network startup whose value has rocketed up to $12b. announced that it is seeking $500m in additional venture capital. ReadWrite web has an article "Why Uber, not HP is the Future of Technology". Uber has been expanding its operations to more than a hundred cities around the world, despite many legal challenges from many traditional taxi companies.

There have been other important innovations in transportation news in the recent period.
- Beginning from the 1970's more than 500 cities, in every continent, have established bicycle rental schemes. Within the 2 year period between 2011 to 2013, the number of bicycles in such schemes doubled to more than 500,000. Millions of commuters now rely on these programs.
- Electric or hybrid vehicles are beginning to take off. The Chinese have made electric vehicles mandatory for public transportation, including taxis. Cities from New Delhi to San Francisco have been establishing charging stations and government incentives. Constant advances in battery technology are bringing down the costs.

So going back to the thought, "Would you buy a Google self-drive car?", well that may be entirely the wrong question. You need to take into consideration all of the other transportation stories, and let your imagination run a little.
Imagine a city where Google teams up with a company like Uber to create a fleet of self-drive taxis. In your mobile phone app you key in a route, and moments later, an electric Uber Google self-drive taxi stops on the curb. Better and safer than a rental bike, cheaper than a normal taxi, cleaner than the smog producing vehicles that threaten our health. And no need to own a car.

Monday, May 19, 2014

A Key Year for UK Crowdfunding

New FCA rules

CrowdsourcingCrowdfunding continues to grow by leaps and bounds, both around the world and in the UK. So much so that in April the Financial Conduct Authority (FCA) found it necessary to issue new policies. While companies and investors have scrambled to capitalize on crowdfunding's exponential growth, governments have striven to ensure that financial regulations meet the challenges. Of particular concern is equity crowdfunding. In the US, where broad public solicitation for investment was basically illegal, the JOBS Act of 2012 eased the rules. In the UK, where conditions were more lenient, the FCA decided on new controls. Some commentators think these will spell doom for startup investment; others are more optimistic. Since we are clearly in a time of transition, this is a good time for an overview.

Disrupting old patterns

The LA firm Massolution outlines crowdfunding's continuing impressive growth. From $1.5 Billion worldwide in 2011, investment grew to $5.1 Billion in 2013. Much has been said about crowdfunding's knack for making seemingly unattainable objectives realizable and placing power in the hands of the people. A recent article in Startups, "How Crowdfunding is Getting Women into Boardrooms", describes the influence of crowdfunding in shaking up Britain's gender disparities. Whereas women find it hard to win venture capital and only one in five directors of FTSE 100 companies are female, crowdfunding is helping to close the gap.

Still, not everyone thinks that crowdfunding is fulfilling its true potential to bring change. In the future we may see more niche ideologically based crowdfunding platforms that address issues like gender disparity. One such initiative (in the US) is "Plum Alley".

Keeping abreas

Due to crowdfunding's explosive growth, keeping up with available platforms and opportunities can be a challenge. Last year's news is already outdated. The UK charity "Nesta" carries comprehensive information, particularly on crowdfunding platforms for social ventures. 

In light of the new FCA regulations, 2014 is going to be a key year in the evolution of UK crowdfunding. Some crowdfunders are deeply pessimistic. See "Crowdfunding New Regulations Anger Start-Up Industry". Others think it will bring necessary checks and balances to the chaos. "This is Money" has a very informative guide to the new regulations.

Monday, May 12, 2014

Tips to Smart Technology Investments

Investing in startups can be rewarding in more ways than one. You not only get the satisfaction of helping build a worthy project, but if the startup is successful the profits can be humongous. While not every startup will end up with a billion dollar exit, there are a few points that can help you make profitable investments to meet your financial goals.

Check Out the Team

Since an investment in a high-tech startup can be a commitment of five to seven years, it is important that you get along well with the team you’ll be working with. Chemistry between you and the individuals as well as between the employees themselves can make or break any startup. The team should consist of high-potential players who share a deep understanding of the project they are developing. They should be experienced enough with the product to be aware of the hidden pitfalls and know how to build around them. 

Stick to Your Own Business

When possible, stick to investments in industries that run parallel with your own interests and experience. You will be better staged to make informed decisions and throw out tidbits of wisdom as the project moves along. For instance, if you are passionate about solar technology and you have experience in this area, then you can not only invest money but valuable insight into the project that might give it a better chance for success. In the end, you will feel a sense of pride in supporting a startup that shadows your own personal interests.

Due Diligence Pays Off

Spend time getting to know the people involved as well as the business opportunity so that the decision you make will be informed by reality. The more time you spend doing this before you make a financial commitment, the less likely you will be to miss some critical piece of information. If you are not familiar with a particular industry, take advantage of professional advice or co-invest with experts in the field.

Thursday, March 13, 2014

Power for Solar Energy Grids

Metal batteries
Renewable energy is big business. No one wants to wait to see what will happen if we deplete all the earth’s available resources, so making use of energy sources that can renew themselves is a no-brainer. However, there are drawbacks. Take solar energy, for example. It depends on a certain number of hours per day of sunlight. Or wind energy, which takes advantage of powerful winds. Since those sources are intermittent, the race is on to develop energy storage systems, so that whether the weather conditions are calm and cool or sunny with high winds, we will still have power that has been created by renewable sources.

Liquid Metal Batteries

Researchers at MIT founded a startup to create a method of using liquid metal batteries for storing power. If the cost is right, it is a promising solution to storing power at an attractive price. Its developers are hopeful they will get the price down to $500 per kilowatt-hour, which comes out as less than one third of the price of other battery technologies. The company, Ambri, is working on the first sample battery, and plans are underway to install two prototypes early next year. If all goes well, liquid metal storage technology will reshape the present day battery industry. Its founders believe that since the materials used to make the batteries are naturally abundant, they will be cost-effective.

Lithium-Ion Batteries

More expensive but more common are lithium-ion batteries, which are used for powering laptops and electric cars. However, they are beginning to break into the grid storage market as well. One company, AES Corp, is marketing them to renewable energy developers and utility companies for around $1,000 per kilowatt-hour. Plans are underway to develop a $5 billion “gigafactory” that will produce lithium-ion batteries for electric cars and additional solar projects. 

Renewable Energy Storage

Today, it takes about $1,500 for each kilowatt-hour to collect and store the energy from the grid. By the year 2020, it is hoped that improved designs and technology will reduce the price to $575. As the price goes down, alternative energy options will become more attractive.