Paul Wallbank – Brilliant Communications

Author: Paul Wallbank

  • What if Bill Gates had been born in Australia?

    What if Bill Gates had been born in Australia?

    Microsoft founder Bill Gates is today one of the world’s biggest philanthropists having built his business from an obscure traffic management software company to what was at one stage the world’s biggest technology corporation.

    But what if he’d been born in Sutherland, New South Wales rather than Seattle, Washington? How different would things have been for an Australian Bill Gates?

    The first thing is he would have been encouraged to study law; just like his dad. In the 1970s lawyers had far more status and career prospects than software developers in Australia.

    Causing more concern for his parents and career counselor would have been his determination to run his own business. It’s far safer to get a safe job, buy a house then start buying investment properties to fund your retirement.

    The Funding Drought

    If Bill still persisted with his ideas, he’d have hit a funding problem. No bank wouldn’t be interested in lending and his other alternatives would restricted.

    In the Australia of the 1970s and 80s they’d be few alternatives for a business like Micro Soft. Even today, getting funding from angel groups and venture capital funds depend upon luck and connections rather than viable business ideas.

    Bill Gates’ big break came when IBM knocked on his door to solve their problem of finding a personal computer operating system; the likelihood of any Australian company seeking help from a small operator – let alone one run by a a couple of twenty somethings – is so unlikely even today it’s difficult to comprehend that happening.

    Eventually an antipodean Bill Gates would have probably admitted defeat, wound up his business and gone to work for dad’s law firm.

    Invest in property, young man

    Over time a smart, hard working young lawyer like Bill would have done well and today he’d be the partner of a big law firm with a dozen investment properties – although some of the coastal holiday properties wouldn’t be going well.

    While some things have changed in the last thirty years – funding is a little easier to find in the current angel and venture capital mania – most Australians couldn’t think about following in Bill Gates’ path.

    Part of the reason is conservatism but a much more important reason are our taxation and social security systems.

    Favoring property speculators over entrepreneurs

    Under our government policies an inventor, innovator or entrepreneur is penalised for taking risks. The ATO starts with the assumption all small or new businesses are tax dodges while ASIC is a thinly disguised small business tax agency and assets tests punish anyone with the temerity to consider building an business rather than buying investment properties.

    At the same time a wage earner is allowed to offset losses made in property or shares against their income taxes, something that those building the businesses or inventing the tools of the future are expressly forbidden from doing.

    Coupled with exemptions on taxing the capital gains on homes, Australian households – and society – is vastly over invested in property.

    Making matters worse, the ramping up of property prices over the last thirty years has allowed generations of Australians to believe that property is risk free and doubles in value every decade.

    That perception is reinforced by banks reluctant to lend to anyone who doesn’t have real estate equity to secure their loans.

    So we have a society that favours property speculation over invention and innovation.

    Every year in the run up to Federal budget time tax reform becomes an issue, the real effects of negative gearing and other subsidies for housing speculation – the distortion of our economy and societies investment attitudes – are never discussed.

    In Australia there are thousands of smart young kids today who could be the Bill Gates’ of the 21st Century.

    The question is do we want to encourage them to lead their generation or steer them towards a safe job and an investment property just like grandpa?

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  • Ending the era of Mac complacency

    Ending the era of Mac complacency

    The news that the Flashback Trojan has infected an estimated 600,000 Apple Mac computers has been greeted with joy by the dozens of industry experts that have predicted a virus holocaust for smug Mac users for nearly a decade.

    While the Flashback malware – the earlier versions could be described as a computer Trojan Horse while the later editions are more like a computer worm – is a real risk to Mac users and it’s important to take this risk seriously.

    The Netsmarts business site looks at how Mac and Windows users can protect themselves from Flashback and its variants.

    One of the key things in the advice is to make sure anybody using the computer has limited rights; as a Managed User on the Mac and as a Limited User in Windows. This dramatically reduces the opportunity for bad things to happen while online.

    I’ve discussed previously while user privileges are one of the reasons why the Mac has historically been less prone to infection to virus infections than their Windows cousins.

    Microsoft made the decision in the 1990s not to tighten Windows’ security settings and their customers paid the price for the next decade. This was compounded by some poor implementations of various technologies in Microsoft Windows.

    This isn’t to say the Mac, or any other computer system, doesn’t have security bugs. Every operating system does and it’s a conceit of everybody immersed in new technologies, be it cloud computing back to horse drawn chariots, to believe their products are magically infallible.

    Part of the crowing from the security experts and charlatans who’ve been desperately predicting a “Macapocalypse” for nearly a decade overlook this.

    Even with the proven problem of the Flashback virus, its unlikely we’re see the deluge of malware like that of the early 2000s simply because the Mac OSX, Windows 7 and all the other mobile and computer operating systems don’t have the structural flaws that Windows 98, ME and early versions of XP had.

    Much of the Mac versus PC argument in security is irrelevant anyway; the main game for scammers and malware writers has moved to social media services like Facebook and this is where computer users need to be very careful.

    However the stereotype of the “Smug Mac” user was true, one caller to my radio show claimed he didn’t have a problem with spam because he had a Mac. Nothing could convince him that email spam wasn’t related to the type of computer you used.

    To be fair to Apple they never made the claim their computers were invulnerable to malware, apart from the odd dig at Microsoft. Their users did it for them.

    That type of smug Mac user are those who do need a wake up call. For the industry though, it’s business as usual although some will be feeling a little smug their hysterical predictions of the last decade came true in a small way last week.

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  • Should Australia pass a jobs act?

    Should Australia pass a jobs act?

    Last week the US President signed the Jumpstart Our Business Startups (JOBS) Act into law.

    The US law seeks to make funding easier for new businesses by lifting the burden of regulations like the Sarbannes Oxley Act (SOX) and various other financial rules.

    One of the main planks of the reforms is it changes shareholder thresholds, for instance allowing 2,000 investors rather than 500 maximum before it has to go public, and allows companies to advertise their shares subject to certain restrictions.

    Whether it achieves the stated aim of allowing new innovative businesses to raise funds or triggers a new generation of “boiler rooms” and investor fraud remains to be seen but it begs the question of should Australia pass a jobs act.

    The funding crisis

    There is no doubt Australia has a business funding crisis. Before the global financial crisis of 2008, it was difficult for smaller business to access finance.

    In the aftermath of the GFC, it became even harder for businesses to raise funds as banks withdrew from the small business sector, increased their lending rates and tightened criteria.

    While this situation has eased somewhat, partly due to the entrance of new angel and VC investment funds, financing of startup and small business is patchy and still tough.

    An Australian Jobs Act would make it easier for business to raise funds and well crafted one might encourage both self managed and public superannuation funds to allocate some of their investments into the startup and innovation sectors.

    A Scammer’s dream?

    One of the big criticisms is that it reduces investor protections; while it restricts investors with less than $100,000 in annual income from punting more than 5% of their income, it’s quite clear in a full blown mania the Jobs Act will enable plenty of shoeshine boys and self funded retirees will do their life savings.

    The question of course is how well the existing regulations protect investors or the community given the financial disastersof 2008.

    Despite tough rules like SOX and the Basel Agreements, massive institutionalised fraud occurred and it’s surprising there have been no reforms in these rules given the huge and unprecedented costs of rectifying the problems.

    In an Australian context, it’s clear local regulations aren’t working when thousands of investors are defrauded by their financial advisors in financial planner led scams like Westpoint. So reform is due.

    While it’s clear the legislation isn’t working, it’s also clear the Australian financial planning industry doesn’t have the skills or ethics to advise clients should a local Jobs Act be passed.

    Perhaps we should be accepting there is risk in investing and an Australian Jobs Act could help by simplifying business rules and improving transparency in accounts rather than bogging business and investors down in masses of unread paperwork.

    Is the US experience valid?

    Looking at the US Jobs Act it appears the Silicon Valley insiders are finding ways to extend their business models, whether this is successful creating new American jobs or just enriching the good folk of Sand Hill Road will pan out in the next few years.

    For Australia it’s important we reform our laws to make business and innovation easier though we need to be careful we don’t ape the worst aspects of the Silicon Valley business model.

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  • 702 Sydney Weekend computers: April 2012

    702 Sydney Weekend computers: April 2012

    On ABC 702 Sydney Weekend computers this Sunday, April 8 from 10.15am Paul Wallbank and Simon Marnie will be looking at the end of innocence for Apple Mac users, the DNS Changer Virus and how political campaigning is coming to a Facebook site near you.

    Some of the topics we’ll discuss include;

    If you’d like to learn how to protect your Mac or Windows computers from malware, visit our Netsmarts article on the Flashback virus that explains the security settings and suggests some free anti-viruses.

    Listeners’ Questions

    While we had a great range of calls from listeners, there was only one we promised to get back to. Kay clearly has a virus infection on her Windows computers and we recommend the free MalwareBytes program to clean it up.

    Our IT Queries site has more instructions on cleaning up a virus infection if you’re worried about a sick computer.

    We love to hear from listeners so feel free call in with your questions or comments on 1300 222 702 or text on 19922702.

    If you’re on Twitter you can tweet 702 Sydney on @702sydney and Paul at @paulwallbank.

    Should you not be in the Sydney area, you can stream the broadcast through the 702 Sydney website and call in anyway.

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  • Risks and opportunities in crowdsourcing

    Risks and opportunities in crowdsourcing

    Crowdsourcing and offshoring are changing bringing to small business the same changes we’ve seen in manufacturing and low level office jobs over the last forty years.

    Those trends are going to affect local businesses – particularly the home based service providers – in a serious way as the local web designer and bookkeeper find themselves undercut by freelancers in countries where an Australian day rate is a month’s pay.

    With those thoughts in mind I went along to a round table discussion with crowdsourcing advocate Ross Dawson, Freelancer CEO Matt Barrie and Design Crowd founder Alec Lynch to hear them discuss some of the issues around the concept ahead of their half day workshops in Sydney later this months.

    Having read Ross’ recent book, Getting Results From Crowds, many of the concepts and arguments are familiar but its worthwhile considering how the trend of a globalised workforce is changing.

    The benefits of crowdsourcing services

    Crowdsourcing services like Design Crowd and Freelancer have benefits traditional outsourcing services don’t have.

    Alec Lynch describes these as reduced expense, speed and risk. A broad range of cheap, accessible suppliers mean businesses aren’t locked into costly contracts with the attendant risks while they can bring projects to fruition in days.

    Until recently, globalisation only bought benefits for major corporations with manufacturers contracting work out to China, back office functions to India and software development to Eastern Europe.

    The rise of web based services where smaller, one off projects could be paid for by credit card has bought global outsourcing into the small and medium sized business markets.

    Now local businesses are affected by business practices that, until recently, were the concern of those working for large organisations.

    This is bad news for local service businesses; the suburban web designer or bookkeeper is now finding themselves competing with individuals who, as Matt Barrie points out, have a very good weeks’ income for the equivalent of a day’s pay in Australia.

    Basically the same forces that drove most low value manufacturing offshore are now driving services and white collar jobs the same way.

    Responding to the threat

    There are major downsides for clients using these project based outsourcing services; for instance designing a logo is only part of a much bigger branding exercise which in turn has to be considered against the orgainisation’s longer term objectives.

    Often, most of us don’t know what we don’t know and that’s the real reason why we hire an expert to explain why a logo should look a certain way, an expense should be allocated to one specific cost centre and not another or why we should one software package over another.

    When we outsource our services, particularly to a low cost provider, we lose that expert insight and end up with someone just carrying out a task; it is up to us to supervise something we probably don’t understand ourselves.

    Part of that supervisory role is project management, in the design field managing creatives can be like herding cats. This is why experienced project managers are worth their weight in gold.

    Like many essential skills, project management is one of those which most of us don’t have and is chronically undervalued but when a business is outsourcing to a freelancer in Estonia or Eritrea then this service is essential.

    Providing those skilled supervisor and management roles is where the opportunities lie in a crowdsourced market place.

    In many ways, we’re seeing the end result of the post-industrial society. Just as we offshored the manufacturing industries through the 1970s and 80s then the low skilled office work in the 1990s and 2000s, we’re now outsourcing local services to low cost countries.

    Whether ultimately this is a good thing or not is a big question but for local businesses, the trend is clear and much of the basic work is going offshore. Those who choose to whinge rather than adapt will be left behind.

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