Paul Wallbank – Brilliant Communications

Tag: investment

  • Copying the Silicon Valley Bubble

    Copying the Silicon Valley Bubble

    Staying private sucks if you’re a tech company writes Felix Salmon in Fusion magazine.

    If you’re giving away stock in lieu of wages to employees or taking early stage funding for equity, then listing, or selling to a larger business, makes sense as staff and investors need to see a return. It’s the unspoken truth of the Silicon Valley funding model.

    The Silicon Valley model though doesn’t come without risks, investor Mark Cuban warns a valuation bubble greater than that of the Dot Com Boom has developed as angel investors and early stage venture capital firms have thrown money at startups after Facebook’s massive buyouts of Instagram and WhatsApp.

    While Silicon Valley and the US tech market might have plenty of opportunities for buyouts and IPOs, most other places around the world don’t have the deep financial markets and the cashed up software companies to make similar exits possible for local startup businesses.

    Again that difficulty in successfully funding exits shows that simply trying to copy the US tech industry model is probably not going to work for most places tying to building their own Silicon Valleys, although it seems China is about to try.

    The other message is that the IPO or buyout route is not necessarily the right path for every business, as Salmon says: “Maybe the best solution is not to take any outside funding at all, and not to try to grow too fast.”

    “Some family companies have been around for hundreds of years: if you own your own business, and you don’t get greedy, you can build a very pleasant life for yourself. You just won’t end up on any list of young billionaires.”

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  • Formulas for successful crowdfunding

    Formulas for successful crowdfunding

    Pebble have achieved the biggest Kickstarter fund raising in the service’s history with a $14 million fundraising for its latest smartwatch.

    Over at competing crowdfunding service Indiegogo Flow Hives, a Tasmanian beekeeping invention, has raised nearly five million dollars for its innovative beehives that put honey on tap.

    Crowdfunding is fast becoming the way for smaller manufacturers to secure preorders from the market and secure scarce capital for the business.

    Pebble and Flow follow the success of Ninja Blocks who have had two successful crowdfunding ventures and their CEO Daniel Friedman spoke to Decoding The New Economy last year about raising money for hardware projects.


    Not every hardware crowdfunding project works out well though as Mark Pesce described in relating his experience with the failed Moore’s Cloud fundraising. Mark said he’d “rather eat a bullet” than engage in another crowdsourcing campaign given the pressures upon manufacturers to deliver.


    As Moore’s Cloud shows there are risks and complexities in looking to the crowd to raise project capital. Even a successful campaign faces potential problems in completing the project and delivering a product that meets the expectations of those who’ve contributed.

    Crowdfunding has opened a new way for artists and entrepreneurs to raise funds for their projects, like all tools though it does have it’s risks and isn’t for everyone.

     

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  • Why being a unicorn could be a bad thing

    Why being a unicorn could be a bad thing

    Andrew Wilkinson doesn’t want to be a unicorn. In Why I want to be In-N-Out Burger, not McDonalds, Wilkinson describes how he’d rather his business is a sleek racehorse rather than a beautiful, mythical creature.

    One of the misunderstandings in the current startup mania is the motivation of founders and proprietors; many haven’t gone into business with the aim of flipping the company to a rich sugar daddy for a billion dollars.

    In his great presentation “Fuck You, Pay Me” – essential viewing for anyone starting a business – San Francisco designer Mike Montiero describes “We wanted to pick and choose the clients we were gonna work with and we wanted to be responsible for what we’re putting out in the world.”

    For businesses like Montiero’s and Wilkinson, having a venture capital investor looking over their shoulder would be as bad as working for a corporation; ceding control of your work is exactly the reason they started their businesses in the first place.

    While the Silicon Valley venture capital model is valid for high growth businesses that need capital to scale quickly, most ventures don’t need those sort of large cash injections early in their development – for many, a million dollar cheque from a VC could prove to be a disaster.

    There’s myriad reasons why someone starts a venture and all of them pre-date the current startup mania, it’s why every business is different in its own way.

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  • Building the next Internet of Things network

    Building the next Internet of Things network

    Earlier this week we looked at Cisco’s claim that Low Power Wide Area (LPWA) networks will handle much of the world’s mobile data traffic by the end of the decade.

    French company SIGFOX showed how investors are looking at the opportunity in these systems with a $115 million funding round two days ago.

    What’s particularly notable about SIGFOX’s investors is how many of them are telcos themselves with Spain’s Telefonica, Japan’s NTT DoCoMo and South Korean SK Telecom being key shareholders.

    Along with the telcos, who SIGFOX hopes will help them expand their footprint outside Spain, France, the UK and the Netherlands, there’s also a collection of industrial companies including Air Liquide and infrastructure giant SDF Suez.

    That a diverse range of companies are moving into the LPWA market shows how important the stakes are for providers in securing a position in the the technologies that will define the Internet of Things as industries brace themselves for the massive rollout of connected devices.

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  • Ending the era of the IT manager

    Ending the era of the IT manager

    Once every workplace had a tea lady; usually a happy friendly woman who cheefully dispensed tea, buscuits and office gossip around an organisation.

    During the 1980s the company tea lady vanished as companies cut costs and changing workplaces made the role redundant, is it now the turn of the CIO to go the way of the tea lady?

    Yesterday research company company Frost and Sullivan hosted in a lunch in Sydney outlining their views on the growth of cloud computing based upon their 2014 State Of The Cloud report.

    The report itself had few surprises with a forecast of the cloud market growing 30% each year over the next five years, a statistic that won’t surprise many watching how users are moving away from desktop applications.

    Shifting procurement

    One of the key trends though is how cloud services change the procurement process and lock IT managers and Chief Information Officers out of decision making. As the report says;

    Half of all organisations feel that the decision making process is shifting from that of the CIO and IT department to the individual business unit for implementation or updates of cloud applications such as HR, payroll, collaboration and conferencing.

    While the report puts a positive spin on what it describes as the “evolving role of IT within organisations”, Mark Dougan – Frost & Sullivan’s Managing Director for Australia and New Zealand – mentioned that often the decision to adopt a cloud service were made by executive management and then the CIO was told to implement the technology.

    This illustrates how CIOs’ already tenuous grip on being a senior management role has slipped. With the rise of cloud services, it’s become easier for executives to make choices without considering the technological consequences.

    Probably the business that best illustrates this shift has been Salesforce where many corporations find they have dozens of subscriptions being charged to sales managers’ credit cards, much to the chagrin of company accountants and IT managers.  Salesforce and similar businesses have driven the trend so far that many consulting firms predict marketing departments will control more technology spending than IT managers in the near future.

    That shift predates the coining of the word ‘cloud’, the term “port 80 and a credit card” was used to describe the Salesforce model of sales people signing up to what was then described as Software As A Service (SaaS) earlier in the century.

    Does IT matter?

    In 2003, writer Nicholas Carr predicted IT as a discipline would cease to matter within most organisations as technology became ubiquitous and taken for granted, just as electric power and railways did in the nineteenth and twentieth centuries.

    The electricity and railway industries remain huge employers and are essential to modern business but most for most companies the products are taken for granted – few companies have a Chief Electricity Officer sitting on their executive team despite power being an essential service.

    For those IT managers hoping for a senior c-level position or even a seat on the board, the move to the cloud is terrible news. Rather than getting the corner office, the CIO could be heading the way of the tea lady.

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