Paul Wallbank – Brilliant Communications

Author: Paul Wallbank

  • Silicon Valley’s unicorn monoculture

    Silicon Valley’s unicorn monoculture

    What happens in Silicon Valley when your startup doesn’t fit into the current hot ‘unicorn’ categories?

    I recently spoke to one female founder about her business and why she chose to setup on the US East Coast rather than follow the popular path of establishing a San Francisco base. Her answer shows the obsessions Silicon Valley investors have and why the Bay Area model may not be right for all companies.

    Originally we planned to set up in the Bay area. That’s what you do right? So our company’s registered office was in Palo Alto and then I started plans to have three of my staff and myself relocate to San Francisco. I took onboard some Silicon Valley Advisors and this was a pretty horrific experience that taught me a lot. Here is my experience of trying to set up in the Bay Area then not. This is my cautionary tale to other Aussie Start Ups.

    The Valley comes with a certain formula that gets beaten into you. Here’s how it goes:

    A Start Up must:

    • Be in the Bay Area
    • Have had an MVP in market
    • Be an incorporated US company, preferably a Delaware company if you want US VC investment
    • Have a Run Rate (annual revenue) of $3-5million dollars in order to attract investment
    • Not be enterprise software
    • Be a SaaS company like Atlassian with a similar business model
    • Have a product that is inexpensive where clients can self-install and there is no professional services or servicing required

    I found the Silicon Valley Advisors I dealt with to be arrogant, formulaic and could not see potential outside of the standard Unicorn-creating formula. So I realized the Bay Area was not going to be a good fit for My business. Additionally I figured that none of our clients were actually based in the Bay Area and I needed to be near them. As a FinTech company the logical thing was for us to go to where our clients were so that we could constantly listen to them. Listen to their problems, understand their business, build relationships, have them help us figure out what our product should be and pay us

    So we moved to NYC and set up on office in Chelsea. From NYC it takes only a couple of hours to get to Boston, Baltimore, Philadelphia, Columbus, Chicago, even Texas to be with clients.

    Also the investment discussions are much more ‘normal’ and investors are respectful of me as the CEO and Founder and my background and potential to build a significant, revenue led and profitable large software company. They are backing me and value that I am experienced. Not once has age or gender come up. In fact to be fair, probably the opposite. Being a woman over 40 seems to be appealing to East Coast clients and investors.

    The founder’s experience also betrays a herd mentality among the Silicon Valley investors, something that may be a weakness for the industry and the region. It certainly indicates the dominant business model may be very fragile as markets turn against tech unicorns.

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  • Reaping the security dividend

    Reaping the security dividend

    Boards and executives have finally got the message about security John Stewart, Chief Security and Trust Officer at Cisco.

    For most of the computer era security has been seen as an inhibiter to innovation and speed to market, but now with most businesses finding they face a three year time frame to transform in face of digital disruption Stewart says corporate managments now see security of their products as being a valued feature.

    Stewart bases his view on an online survey, Cybersecurity as a Growth Advantage, where Cisco polled 1,014 senior executives with extensive cybersecurity responsibilities in 10 countries and 11 in-depth interviews with senior executives and cybersecurity experts.

    From this, Cisco found a third of businesses now sees security as being a competitive advantage.

    Digital disruption drives the shift

    Stewart puts this down to boards and senior executives realising how widespread digital disruption is, “it’s highly unlikely Weight Watchers saw the disruption coming from Fitbit,” he muses. “In fact it’s hard to see how anyone could have seen that coming.”

    As a consequence of these widespread and often unexpected disruptions, corporate leaders are trying to shore up their existing positions against unforeseen competitors by shifting to digital platforms as quickly as they can.

    “We have to do digital and if we are going to do digital we have to have strong cybersecurity controls,” says Stewart in explaining why cybersecurity is an important part of this strategy.

    Security as a cornerstone

    “By making cybersecurity a cornerstone of their businesses, security-led digital organizations are able to innovate faster and more effectively, because they have significantly greater confidence in the security of their digital capabilities,” Stewart says.

    Certainly managers are worried about the risks of going digital with Cisco reporting many businesses have put projects on hold due to concerns about security risks, “a lack of cybersecurity strategy can cripple innovation and slow business, because it can hinder development of digital offerings and business models.”

    According to Cisco’s findings, seventy-one percent of executives said that concerns over cybersecurity are impeding innovation in their organizations. Thirty-nine percent of executives stated that they had halted mission-critical initiatives due to cybersecurity issues.

    Encouraging moves

    While the possibility that corporate leaders are taking cyber security seriously is encouraging, that change is yet to be seen in the marketplace, particularly in the consumer Internet of Things market where being first trumps security, design considerations or even basic safety.

    The real test for how important cybersecurity really is remains in the marketplace — will customers pay more for secure products?

    One sense that in Cisco’s marketplace of enterprise customers where security failures could have expensive, embarrassing and possibly catastrophic consequences, customers will pay more for trustworthy devices. In the consumer field it may well be different.

    Probably the most important finding from Cisco’s survey is that businesses are now understanding security has to be designed into products and processes rather than being bolted on as an after thought. If that is true, then we have come a long way.

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  • Japan looks to startups

    Japan looks to startups

    Can Japan reinvigorate its startup community? A story in the Wall Street Journal describes some of the attempts to encourage entrepreneurs in an economy that has been stagnant for a quarter century.

    In many ways Japan is a prototype for the modern global economy, just as the Japanese tried to stimulate their economy following their 1989 bust by pumping money into their deeply corrupt construction industry , so too has the rest of the world tried a similar strategy with the banking system after the 2008 crisis.

    The results in both cases been the same stagnation as the money is wasted on non productive schemes and speculation rather than investment in job and wealth creating businesses and innovations.

    Now the Japanese are looking to a bottom up stimulus to their economy which challenges the country’s social norms where getting a ‘safe job’ with a large corporation is seen as the best prospect for young people.

    While this is a change from the accepted wisdom, the entrepreneurial model really isn’t that strange for the Japanese with a range of successful technology companies started by post World War II entrepreneurs ranging from Sony to Softbank.

    The Japanese model though may not be suited to the Silicon Valley venture capital model and this is where it’s dangerous to make comparisons with what works in San Jose, Tel Aviv or Shoreditch.

    Japan’s strengths in industrial engineering may well make its businesses well suited for the Internet of Things the Wall Street Journal article quotes serial entrepreneur Taizo Son as suggesting. Interestingly, the 43 year old serial entrepreneur is the youngest brother of SoftBank founder Masayoshi Son.

    Another area where Japan is a glimpse of the future is in the aging population and it may well be that harnessing the abilities of older entrepreneurs is another area where the country can either show the way to success or what not to do with an older, stagnant economy.

    In many ways Japan is a pointer to where the world is heading. How they manage the early twenty-first century will be a lesson for the rest of us.

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  • ABC Nightlife – is the smarthome worth the trouble?

    ABC Nightlife – is the smarthome worth the trouble?

    Is the smart home worth the trouble? We live in an age of connected smoke alarms, kettles and even egg trays. For this month’s ABC Nightlife we’ll ask if these devices add to our lives or just make things more complex.

    Earlier this month Google announced it would down their Evolv home automation platform leaving hundreds of users stuck with useless devices. So what happens to smart gadgets when they are disconnected from the Internet? We’ll also look at the new folding phone and just what a dire state the Australian telecoms industry is in.

    Some of the questions we’ll cover include;

    • What was Google’s Evolv system?
    • Disabling the devices is a bit dramatic, why have they done that?
    • Do customers have any recourse?
    • Is this a risk with all connected devices?
    • What about connected cars, could they be turned off?
    • My computer needs updating, what about these devices?
    • What happens when the internet is disconnected, will my internet fridge work?
    • Samsung showed off a new folding phone last week. What exactly is it?
    • When will we see it on the market?
    • The Annual CommsDay conference was held last week in Sydney. Is there any good news for Aussie consumers?
    • Is the National Broadband Network looking any better?
    • How is the global telecommunications industry looking, can we expect anything exciting?

    Join us

    Tune in on your local ABC radio station from 10pm Australian Eastern Summer time or listen online at www.abc.net.au/nightlife.

    We’d love to hear your views so join the conversation with your on-air questions, ideas or comments; phone in on 1300 800 222 within Australia or +61 2 8333 1000 from outside Australia.

    You can SMS Nightlife’s talkback on 19922702, or through twitter to @paulwallbank using the #abcnightlife hashtag or visit the Nightlife Facebook page.

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  • When a CEO meets the Internet of Things

    When a CEO meets the Internet of Things

    Life changes when you become the chief executive says Bill Wagner, the CEO and President at remote access company LogMeIn. “I now spend thirty percent of my time with investors,” he says

    Wagner, previously the company’s Chief Operating Officer, took over the leadership at LogMeIn last September after founder Michael Simon  stepped down.

    The company is in the midst of a major change as Simon steered the company toward the Internet of Things in response to the shift away from desktop personal computing that had been the business’ core market.

    LogMeIn’s IoT strategy is around being a trusted platform for controlling the myriad household, CEcommercial and industrial devices that want to connect to the internet, with Wagner only seeing AWS as being their main competitors that has seen a range of companies entering in the last few years.

    “I don’t think IoT will be a wave, it’s more like a rising tide,” Wagner says.

    Wagner is one of the IoT’s enthusiasts citing applications ranging from the insurance sector through to connected clothing as being potential markets, although industrial application may be the earliest adopters of LogMeIn’s services. “The more industrial the industry, the more mature is M2M to IoT adoption,” he observes.

    That adoption though is tempered by the presence of industry groups where Wagner maintains LogMeIn’s hostility towards slower moving associations such as the Industrial Internet Alliance and proprietary platforms like Google Nest.

    An advantage Wagner sees in his taking over as LogMeIn’s Chief Executive Officer is his experience with the company, “I don’t know how externally recruited CEOs manage it,” he observes.

    With LogMeIn facing a continued transition into uncertain markets, the company needs a steady vision. It may be that internal recruitment is an important strategic move.

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