Tag: business

Adventures in Startupland – the brutal truth of starting a business

Zendesk CEO Mikkel Svane’s book Startupland describes the challenges faced by most business founders and business owners.

Startupland is a magical, mythical place where the unicorns roam free and much of the advice dished out to nascent entrepreneurs has more in common with a romantic fantasy novel than the hard work of building a business.

Mikkel Svane’s Startupland is not one of those books. Svane, the co-founder and CEO of cloud based customer business Zendesk, is instead a tough description of the challenges and personal costs of venturing into business for yourself and the harsh, demanding realities of the Silicon Valley statup model.

“No-one tells you how little you get paid,” warns Svane as he charts his own journey from developing and selling through Stockholm’s computer shops of the mid 1990s a basic program that created 3D optical illusions through to floating Zendesk on the NASDAQ in 2014.

During Zendesk’s journey Svane and his business partners experienced the entire range of challenges that a business founder could face ranging from managing high growth, laying off staff in the face of a downturn, the inevitable pivots and, sadly, the passing of a valued employee.

“Startups are fragile” warns Svane and observes how he nearly fell for the trap all business owners have been tempted by in doing consulting work to provide cash for the business. Invariably the side job comes to dominate and the new venture withers due to lack of attention.

Working from home

For those starting out in business, whether it’s a tech startup or something a big more mundane, the observations and tips on working for home are worthwhile in themselves, if you find you’re one of the type that “sits at home and eats toasts and masturbates” then it’s probably best to find an office or coworking space.

Having had the opportunity to interview Svane a number of times, his own passion and character comes clearly out of the book including his view that seemingly boring things like customer support is sexy, citing how Marilyn Monroe fell for Arthur Miller (although that didn’t end well).

The ‘boring is sexy’ mantra is one Svane repeats throughout the book, and his contention is seemingly mudane areas like customer support are where the real business opportunities lie.

Business is about relationships

Ultimate Svane sees business as being about relationships; between customers, staff and investors. His view on accepting investor’s money is an important lesson from the book.

“Great investors have unique relationships with their founders, and they are dedicated to growing the company,” writes Svane. “Mediocre and bad investors work around founders, and the company ends in disaster.”

The brutal truth

In telling the brutal truth about starting a business Svane gives anyone considering the idea of ditching the cubicle a realistic view of the challenges ahead. That advice alone will save many families from the stresses and costs of self employment and startup land.

Those considering entering the world of startups, small business or self-employment should read Startupland. If you’ve already started that journey, then Svane’s story is worth reading to show you aren’t alone in your daily challenges.

 

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Is your job really safe?

Even in industries that are safe individual jobs aren’t secure as technology changes most roles

Yesterday we looked at the PwC report on the value of science and engineering education to the economy.

The survey wasn’t good news for the workforce with the survey predicting over two in five workers’ jobs were at risk as digital technologies changed industry.

Notable in the list were the industries PwC believed to be safe over the next twenty years; largely being the medical, health and ‘people’ businesses like public relations.

jobs-least-at-risk-from-tech-change

While the industries themselves might be safe, specific jobs in those sectors may not be so with roles ranging from hospital porters being replaced by robots to surgeons carrying out remote operations.

Looking at the list of relatively unaffected industries, it’s hard not to see how digital technologies aren’t going to disrupt those occupations.

Redefining public relations

PR for instance is undergoing a radical change as the media industry is being totally disrupted requiring today’s public relations professionals to have a very different set of skills to those of twenty years ago.

Those skills include a much more adept use of technology itself and having to deal with a faster, more fragmented industry.

Public relations professionals brought up in the days of boozy lunches and far off deadlines struggle in a time of bloggers, social media and data journalism.

Evolving medicine

Similarly medical practitioners, the top position on the list, have seen their jobs dramatically transformed over the past twenty years by computers and those changes are far from over as medical equipment gets smarter, personal fitness devices become pervasive and the amount of data being collected on patients grows.

Across the medical industry the roles of almost every occupation is being redefined as technology changes the tools they have, along with the nature of ailments their patients present with.

Big Data and analytics

Some professions will grow but automation in those fields will grow exponentially faster, a good example being the fifth role on the list – database administrators and ICT security professionals.

Ensuring the reliability and security of servers and networks is going to become even more essential as the economy increasingly depends upon these systems however security and IT professionals are going to rely on algorithms and Big Data to manage the massive task they have – these are the opportunities for companies like Splunk and Microsoft Dynamics.

In all of these comparatively safe industries the jobs of tomorrow are going to need different skill sets to what they require today.

For workers in these ‘safe industries’ this means further education, training and reskilling to stay employed. Just being employed in a sector that’s expected to stay static or grow isn’t enough to keep your job.

Employers in these ‘safe industries’ also face a challenge in making sure their staff have the right skill sets to use the new technologies.

The airline analogy

If you were running an airline in 1965 it would be cold comfort to look at the explosive growth ahead for the industry in the jet airline era when all your staff are trained to keep propellor aircraft in the air.

So when we talk about digital disruption, it’s not just about industries being shut down and jobs being lost but about radically changing occupations.

It would be a brave person to assume that just because their industry is safe, their own job or business is secure.

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Stemming the Innovation drought 

Science, Technology, Engineering and Mathematics studies are essential to the future economy a PwC study shows.

When discussing how industries are changing, the constant question is ‘what will happen to today’s jobs?’

Even in the Future Proofing Your Business webinar earlier this week this question was asked by a number of the small business owning listeners.

That concern forms the basis of the “A smart move: Future-proofing Australia’s workforce by growing skills in science, technology, engineering and maths” report released by accounting firm PwC yesterday in Sydney.

PwC’s report warns 44 per cent of current Australian jobs are at high risk of being affected by computerisation and technology over the next 20 years.

The report highlights that Science, Technology, Engineering and Maths (STEM) subjects are critical in the jobs that are going to benefit, or be created, by that technological change.

Finding the right courses

Sadly for Australia, and most of the western world, STEM courses are deeply out of fashion with students preferring to study in business related courses such as accounting, commerce and law.

As PwC flag, those industries are at risk with accounting at the top of the list for job losses.

Australian-industries-expected-to-be-disrupted-pwc

On the other hand, PwC forecasts professions in health, education, personal care and – worryingly – public relations will be in increased demand. Something that may underestimate the effects of technology on those industries.

Competing with STEM

PwC’s main contention is that economies which want to compete in the new economy are going to need more STEM graduates.

The shift to STEM education is something the OECD highlighted in its recent report, OECD report How is the Global Talent Pool Changing?

In their report the organisation forecast that the number of students studying around the world would increase from 130 million today to 300 million by  2030 with all of that growth being in Chinese and Indian STEM courses.

Already that science and engineering emphasis is clear in today’s numbers.

OECD-graduates-by-field-of-education

To counter the drift away from STEM courses among students, PwC suggests a campaign to engage young people while they are still at junior school.

The Australian conundrum

Sadly, that’s unlikely to work in Australia given the nation’s economy is built upon property speculation driven by the wealth effect of rising real estate prices.

Two nights before the PwC report one of the highest rating shows on Australian television came to its 2015 finale. The Block, which features couples renovating and flipping properties, finished its season the apartments being sold at auction at record prices and the contestants pocketing between 600 and 800,000 dollars for a few month’s work.

For young Australians the message from their parents and society is clear; don’t innovate, don’t create, just buy as much property as you can afford.

In the US on the other hand, the business heroes are the builders of new enterprises; people like Steve Jobs, Elon Musk, Bill Gates, Mark Zuckerberg and the founders of Google.

Other countries like Israel, India and China, are aspiring to be the next generation of tech leaders. That’s what’s necessary to build a dynamic economy.

Creating enduring jobs

As the PwC report claims, “the jobs most likely to endure over the next couple of decades are ones that require high levels of social intelligence, technical ability and creative intelligence”

Harnessing that combination of social, creative and technical intelligence is going to be one of the challenges for all economies in a decade of change.

Getting the supply of STEM skills right will be essential for success for all countries at a time when digital technologies will drive most industries.

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Opening Telstra in a life and death market

A new CTO seeks to make his mark on a dominant telco

“Communications are a life and death issue”, says Vish Nandlall the chief technology officer of Telstra. “You realise that when that pipe gets shut off people can die in the field.”

Nandlall’s experience in weapons technology led him to a life in the telecoms industry which bought him to Australia as he believes Telstra is one of the most innovative companies in the industry. How much this is due to Telstra dominating its domestic market is a discussion for another post.

Nandlall was speaking last week at a lunch for journalists and bloggers hosted by Telstra in Sydney. It was an opportunity for the company to introduce their CTO to the media following his joining the company last August and to publicise their push into health care services.

One of the areas Nandlall was particularly keen to push was how Telstra was looking at opening their platforms to third party developers as he sees the nine to ten million strong community as offering opportunities that even the best resourced telecoms company can’t access.

“How can I get telecom services into places where developers can access the information?” Nandlall asks.

His answer is to open the services through the Telstra Developer Site which at present is fairly Spartan although one expects it will become more impressive ahead of the I love APIs conference the company is sponsoring in Sydney this June.

Down the track Nandall sees the open systems assisting the company moving into the key growth areas for all telcos such as the Internet of Things, smart cities and the productivity growth applications in industry verticals.

The big opportunity the company sees is in health care where a fragmented industry struggles to corral disparate sources of information that touch almost every person. It though just one of the growth telcos are looking at in a dramatically changing marketplace.

For Nandlall the challenge is to grow Telstra beyond the domestic Australian telco market that it increasingly dominates as its competitors lose interest in the market and the nation’s ambitious but failed national broadband network slowly fades into irrelevance.

While Telstra is by no means facing any life or death issues, many of its customers could be. Nandlall and his fellow executives are hoping they can help them.

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Wandering around Wellington

How New Zealand’s capital is becoming a centre of the new economy

It bills itself as ‘the coolest little capital in the world’ however something is going on in Wellington, New Zealand’s capital city, as its technology sector takes off.

Last week I was in Wellington, partly to attend the Open Source, Open Society conference and also to have a look at how the city is doing so well as one of the leading startup cities.

While I’ll have a number of posts about the city, startup scene and conference over the next couple of weeks, it’s worthwhile noting some basic impressions that came from the visit.

The size of the city, Wellington is a small town with a population of 200,000, brings both advantages and negatives for the business and startup communities.

Small is sweet

One of the advantages of being so small is the business community is relatively accessible, a number of entrepreneurs told me how easy it is for them to find the specialists they need given there’s usually two degrees or less separation between everyone.

Normally having a small business community means it gets insular, particularly in a capital city where the business of government can create a bubble effect. What’s notable about Wellington is most of the businesses are looking outward towards the US, Australia and East Asia.

The city’s intimate business environment also improves trust within the community as one Aussie expat told me, “if you rip off anyone in this town pretty well everyone knows about it by the end of the weekend. It keeps everyone honest.”

Being small, the city makes it easy to walk around which compounds the business networking opportunities. A businesswoman, who is also a lifelong Wellingtonian, observed how she allows an extra 15 minutes to walk anywhere as she finds herself stopping for conversations.

Three dominant businesses

Having three successful businesses in the city – TradeMe, Xero and Weta – has both its upsides and disadvantages with the bigger players tending to dominate the employment market and funding opportunities.

Of the three businesses, TradeMe is the most domestically focused while Xero is growing in the tech sector and Weta is the most diverse with its range of special effects and movie production services.

With Weta, the business is exposed to the vagaries of the global film industry as Statistic New Zealand survey of movie production shows.

The film industry is one of Wellington’s important employers with the sector supporting around two thousand businesses in the city, although I didn’t get time to explore how much of an overlap there is between the tech and film industries.

TradeMe is largely a domestic focused business that provides a steady work and skills base for the local workforce. While it’s the least internationally exposed business of the three, it’s probably also the most consistent.

Xero, like Weta, is a globally expanding business and its success is attracting investors and expats from North America and Australia. While its the smallest of the three it’s probably the business that has done the most raise Wellington’s profile in the tech industry.

Community spaces

What’s particularly notable are the number of coworking spaces in Wellington ranging from the straightforward Bizdojo startup space and Creative HQ through to the quirky Enspiral coworking space.

The availability of shared spaces makes the city attractive to startups and adds to the vibrancy of the local tech community which links into hipster pursuits such as craft beer.

Communities like Enspiral also add another dimension to the local startup and creative industries environment by connecting entrepreneurs with their peers and service providers.

Partnerships with government

One aspect I didn’t get to explore while in Wellington was the relationship between the city’s business community and educational institutions, particularly Victoria University.

Similarly I didn’t get the opportunity to discover how much of a role local and national governments have had in the development of Wellington’s tech scene. It seems to be relatively hands off although some government agencies have supported Weta with co-investment funds.

What I did meet though were plenty of immigrants; from Croatia, Denmark, Holland, the US and, most of all, Australia.

Talking to some of the US and Australian expats it was clear that lifestyle combined with opportunity with lifestyle, as one Aussie emigre told me “I couldn’t get the water views, access to the city and be able to walk to work back home like I can here.”

While these are superficial thoughts that I’ll expand on over the next week as I decipher notes and listen to interviews, there’s no doubt that Wellington is carving a position as one of the global centres of the new economy. How big it becomes will depend on how many other businesses grow to the size of Xero or Weta.

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How the cloud killed the CIO

Has the shift to cloud computing made the IT manager redundant?

In Technology Spectator today I have a piece on cloud services and how the promise of high reliability threatens the IT manager and Chief Information Officer.

This shift is the same change that’s affected the IT support industry, as technology becomes more standardised and a commodity the need for specialist support and management becomes unnecessary.

In many respects this is similar to a hundred years ago where most factories had their own power plants providing electricity, steam or bel power to drive the machinery.

As mains power became common and reliable, businesses no longer needed specialist staff to ensure the power flowed.

While much of today’s commentary focuses on the CIO role evolving, it may well be the position is redundant.

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Local gets left behind by social and mobile in SoLoMo

Local reminds the poor cousin of social and mobile in the SoLoMo world

One of the tech buzzwords, or acronyms, a few years back was SoLoMo – Social Local Mobile. In reviewing the slides for the Future Proofing Your Business presentation next week, the term came up in one of the notes.

It’s interesting look at the fates of the three different concepts over the past few years; mobile has boomed and redefined computing and social has become big business with Facebook growing into a hundred billion dollar company.

Local though has struggled with Google, Facebook and a host of smaller and newer startups struggling while the Yellow Pages franchise dies. Despite the power of maps and geolocation, local just isn’t doing as well as the other two.

This could be down to the difficulty in harvesting the massive amounts of disparate data available to any service trying to draw an accurate picture of what’s in the neighbourhood.

Google Places tried to standardise that information for local businesses but the complexity of the service and its opaque, arbitrary rules meant adoption has been slow and merchants are reluctant to update details in case they fall foul of the rules.

Local services’ failure to take off has also had a consequence for the media as its in hyperlocal services that publishers have possibly their best opportunity to rebuild their fortunes.

That failure to properly harness mobile has also hurt merchants as many local operations are struggling to find useful places to advertise given Google Adwords and Facebook can be extremely expensive places to advertise.

So the mobile space is still ripe for a smart entrepreneur – a new Google or Facebook – to dominate.

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