Paul Wallbank – Brilliant Communications

Author: Paul Wallbank

  • Smart homes come of age

    Smart homes come of age

    For years we’ve been predicting the arrival of the smart home, this week the Chicago Tribune reports that the connected household may be becoming a reality.

    The Chicago Tribune describes Raffi Kajberounihi’s Santa Clarita home where his doors and his home automation systems are all controlled by his smartphone.

    Most of the technology in Raffi’s house isn’t new, it was just unaffordable for most people until recently.

    “It had always been an upscale-type business: Unless you were in the top 5% of income levels, you didn’t have access to this type of connectivity,” said Randy Light, merchant of home automation for Home Depot.

    Wireless Internet and the widespread proliferation of smartphones are making smart home technologies more sophisticated — and affordable.

    “This used to be something out of ‘The Jetsons’ or limited to the super-rich,” said Jonathan Dorsheimer, an analyst at Canaccord Genuity. But as smart home technology has improved and costs have come down, “it’s becoming more mainstream.”

    While much of the focus on the smart home has been around the consumer applications, much of the real potential lies in the machine to machine possibilities.

    The Nest smoke detector is a good example of how smart devices are evolving, it doubles as a nightlight and is intelligent enough to spot the difference between burning toast at 7am and a smoldering electric blanket at 11pm.

    The next wave of air conditioners could be checking the weather forecast and adjusting settings before a cold change hits, similarly a smart alarm clock may well check transit and traffic information to adjust wake up times when the trip into work is unusually congested.

    For all the benefits though there are risks; as we saw with the Foscam baby monitor, security remains a real concern that isn’t as built into devices as it should be.

    Over time, we’ll find these smart technologies are changing our households. With that will come advantages and risks that we’ll have to manage.

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  • Demand Media’s closed window of opportunity

    Demand Media’s closed window of opportunity

    A few years ago content farm Demand Media was being hailed in some quarters as the future of the media industry.

    Today its stock is languishing, revenues are falling and any thought that the cheap, low quality writing that Demand Media delivered will be the future of media is laughable.

    Variety magazine recently published a feature describing the of the fall of Demand Media  with a focus on how Google’s changes to its search engine algorithm undermined the content farm’s busines model. Variety’s story is an interesting case study on not relying on another company for your business plan and extends the hope that low quality writing is not the future of online media.

    Dodgy business

    Demand media evolved from the eHow and eNom businesses, both of which relied on dubious – if not downright dishonest – online practices.

    eNom was particularly irritating, basically just registering domain names around popular search terms that led to   pages full of advertising that delivered nothing of value to someone searching the web for information on a topic.

    It was very profitable for a while though, as Variety reports;

    Early on, Demand used eNom’s 1 million generic domain names (such as “3dblurayplayers.com”) to serve up relevant ads to people searching for specific topics. These “domain parking” pages were immensely profitable, generating north of $100,000 per day, according to a former Demand exec who requested anonymity. “That’s $35 million-$40 million per year without doing any work,” the exec said.

    The eHow business wasn’t any better, relying on low quality, cheap articles that only worked because they were stuffed full of the keywords that Google would base their search results on.

    On January 26 2011 Demand Media went public and the criticism of both the newly listed company and Google became intense.

    This story from Business Insider – which ha featured some gushing and dreadful analysis of Demand Media previously – illustrated the problem the company had of being overwhelming dependent on Google, although the writer believed Google were making too much money from content farms to really act against them.

    Google’s problem with the content farms was real, the quality of search results was falling and users were finding their pages were full of low value rubbish rather than authoritative sources which opened the search giant’s core business  to disruption from Microsoft’s Bing and other search engines. Something had to be done.

    Jason Calacanis, whose Mahalo was a competitor to Demand Media, flagged the risks to content farms in a presentation early in February 2011, “the one rule of working with Google is don’t make them look stupid. If you make ‘The Google’ look stupid, they’ll f- you up.” He said. “eHow makes Google look stupid.”

    Eventually Google decided they were sick of looking stupid and changed their algorithms and the rules for getting a page one search result suddenly changed.

    Demand Media’s business was doomed from the moment Google made that change, as Variety reports;

    By April 2011, third-party measurement services were reporting that the Google changes had reduced traffic to Demand sites by as much as 40%. Demand issued a statement that the reports “significantly overstated the negative impact” of the change, but the stock took a dive — plummeting 38% over two weeks — from which it has not recovered.

    As Demand Media was affected, so too was the entire Search Engine Optimisation (SEO) industry where thousands of consultants found their strategies of placing low quality pages and link rich website comments now damaged their clients’ businesses.

    For web surfers, Google’s change was good news as suddenly search results were relevant again.

    Demand Media was, in essence, a transition business that prospered during a brief windows of opportunity that quickly closed along with the company’s prospects.

    That window of opportunity was also dependent on someone else’s business strategy, which is always a dangerous position to be in.

    Demand Media’s lesson is that while there are opportunities to be had in markets that are being disrupted by new technologies, there’s no guarantees those opportunities will last. What works in SEO, digital media or social marketing today may not work tomorrow.

    It’s also a hopeful lesson that websites regurgitating low quality content is only a transition phase in the development of online media and that providing good, original writing and video is the best long term strategy for survival on the net.

    Should that lesson be true, then it’s good news for both writers and readers.

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  • When entrepreneurship gets old

    When entrepreneurship gets old

    As part of their series on America’s aging population, Bloomberg looks at the story of 61 year old Lee Manchester who lives in a friend’s basement.

    While the Bloomberg story focuses on the contrast between Lee and her father who benefitted from the post World War II economic boom, the real story is Lee’s work history.

    Key to her work history is her setting up a business in 1986, that business failed in the late 1980s recession and Lee ponders what might have been had she not made that investment.

    Lee sometimes can’t help dreaming about the trips she’d be planning if she’d invested the $150,000 she spent to start a construction company.

    This is the downside setting up your own business that those currently peddling the cult of the entrepreneur don’t mention. If the business fails, and many do, then the costs can be high in lost savings and damaged career opportunities. Being an entrepreneur is high risk, hard work.

    We may well find though that more people find themselves launching businesses in their older years as the economic realities of the post baby boom era start to be felt by communities.

    In many respects though Lee is ahead of the curve, the generation behind her have no expectations of a long and affluent retirement, “the government will abolish the pension about two years before I retire” is the common theme among Gen Xer and Ys.

    For GenYs and Xers this attitude is realistic, the demographic sums that worked for Lee’s father are now working against them while the post war economic system that guaranteed Lew Manchester a safe job and company pension ceased to exist in the 1980s.

    Had boomers like Lee been thriftier, they would have still been hurt by a shift to 401(k) accounts from pensions in the 1980s. Thirty-seven percent of the elderly in the U.S. collect pensions, which provide some guaranteed income until they die. Fewer than 10 percent of boomers collect pensions, and that number is quickly shrinking.

    Lew’s generation were the lucky ones, while the boomers – particularly the early boomers born between 1945 and 55 – believe they are entitled to similar benefits as their parents, their reality is going to be a much harder and precarious existence into old age.

    While Lee is paying the price for interrupting her career with a stab at running her own business, in many ways she’s better prepared for a future that is going to require people of all ages to be more entrepreneurial.

    In fact, many of those baby boomers forced to become entrepreneurs may well enjoy it, “launching the business was the most fun I ever had and my way to fight a frightening medical diagnosis” says Lee.

    As the reality of their financial situation dawns upon them, many of Lee’s contemporaries are going to find themselves launching businesses long after the age they thought they were going to settle into a sedate retirement – lets hope they have fun too.

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  • Finding the mythical pot of gold at the end of the crowdfunding rainbow

    Finding the mythical pot of gold at the end of the crowdfunding rainbow

    Raising capital is tough, while the Silicon Valley legend of a smart group of geeks finding wealth through fairy godfathers – aka VCs – throwing money at them may be true for a small number of outliers it isn’t the reality for most businesses.

    For most businesses, even if they are lucky to find a VC or angel investor, raising that money is usually the start of the next phase of building a venture which can be even tougher.

    With the recent rise of crowdfunding sites like Kickstarter, Indiegogo and Pozible which are a lot easier to raise capital through than finding VC or angel investors, there’s been a lot more commentary on how these services are a pot of gold for artists and entrepreneurs.

    Mark Pesce discussed some the challenges of Kickstarter campaigns in an interview on the Decoding the New Economy YouTube channel about funding Moore’s Cloud.

    Backing Mark’s views is a post on Fast Company’s design blog discussing what happens after  a successful campaign.

    In Life after Kickstarter, Jon Fawcett describes what happened after raising over $200,000 for his project Une Bobine.

    Having more than met his targets, Fawcett found raising the money was only the start of the business challenges with logistics, taxes and fulfilment being hurdles his team had to overcome.

    Fawcett actually had an advantage in had tied manufacturers up before launching the funding campaign; for those who haven’t, the process would be even more fraught.

    As the Fast Company story concludes, the successful fund raising was only a small, albeit critical, part of getting the products to market.

    Fawcett’s story is a reminder that a product’s journey doesn’t end with funding. While Kickstarter has democratized and decentralized the process of raising capital, concerns of manufacturing, shipping, and storage still retain the unglamorous grit of the real world. There’s no flashy website for setting up your supply chain. Perhaps that’s the next part of this grand process prime for disruption.

    While raising capital is tough, it’s only part of the story of a successful business. Jon Fawcett story is a reminder of that.

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  • Britain’s smart cities agenda

    Britain’s smart cities agenda

    Yesterday the UK government held its first Smart Cities Forum on what it sees are the economic opportunities for the British economy and its cities.

    The Smart Cities Forum is part of the British government’s innovation policy that’s seen £50 million allocated to smart city projects including £24 million for Glasgow’s Future City showcase.

    While the British government sees this as being an investment in grabbing the nation a share of what they believe to be a £400 billion global market, it’s also an opportunity to rejuvenate the county’s cities, as this video clip explaining what being a smart city has to offer Birmingham.

    Like Barcelona and San Francisco tech and smart city policies, the UK initiative was born out of the 2008 Global Financial Crisis which forced the British political and business establishment to rethink the nation’s economic position and policies.

    A key part of that rethink is how infrastructure spending can be co-ordinated with new technologies and this is something Barcelona is doing with its own smart city project in rolling out fiber networks as part of scheduled maintenance around the town.

    The Glasgow pilot project is probably one of the more ambitious smart city projects, as the UK’s Technology Strategy Board says in its media release;

    The Glasgow Future Cities Demonstrator aims to address some of the city’s most pressing energy and health needs. For example, developing systems to help tackle fuel poverty and to look at long-standing health issues such as low life expectancy.

    Glasgow’s objectives go beyond the usual open data and parking spot strategies and attacking low life expectancy and poverty are strong social challenges.

    With buy-in from the national government, the UK is making a strong big to lead the smart city industries. The challenge now is for British businesses to step up and find the commercial opportunities.

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