Paul Wallbank – Brilliant Communications

Tag: startups

  • Uber’s ride into the future

    Uber’s ride into the future

    Having just raised $1.2 billion in funding, Uber’s CEO Travis Kalanick has written of the company’s next steps.

    Kalanick flags the Asia Pacific as being the focus for the company with the latest fund raising which values the business as currently being worth over forty billion dollars.

    That valuation is a massive achievement for a five year old business, with the growth pains involved being one highlighted in Kalanick’s post.

    This kind of growth has also come with significant growing pains. The events of the recent weeks have shown us that we also need to invest in internal growth and change. Acknowledging mistakes and learning from them are the first steps. We are collaborating across the company and seeking counsel from those who have gone through similar challenges to allow us to refine and change where needed.

    One of the big challenges for a high growth business is managing that growth; systems that work well for a ten person organisation with a few hundred clients fall over when you have a hundred staff, thousands of contractors and millions of customers.

    Probably the biggest challenge for businesses like Uber is privacy; what’s clear is the ‘God View’ that allowed the company’s staff to monitor customers and drivers has been abused and is too easily accessed by employees. Tightening data security is going to be one of the major tasks for business.

    Fortunately, taking swift action is where Uber shines, and we will be making changes in the months ahead. Done right, it will lead to a smarter and more humble company that sets new standards in data privacy, gives back more to the cities we serve and defines and refines our company culture effectively.

    ‘Giving more back to cities’ flags what could be a new strategy for growth in places where regulators and governments have been hostile to Uber. One of the reasons for Uber’s success in Sydney for example has been the utter disgust the general population and business community has for the local taxi companies, showing Uber as a good corporate citizen could help in more hostile European markets.

    While Kalanick identifies the Asia Pacific as being the big growth market he doesn’t identify in what fields; it’s hard not to think Uber’s software has more potential in logistics than hire car dispatch and this is an area where the company could find more  opportunities to expand the company’s services.

    Regardless of the direction Kalanick decides to take Uber, the company is cashed up and ready to expand. As long as management keeps the confidence of investors, the business’ fate is in it’s own hands.

    Uber is probably the most fascinating and complex of this generation of tech startups, Kalanick’s post shows it’s story has a long way to play out.

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  • Building a startup community

    Building a startup community

    Some interesting thoughts from startup guru Mark Suster on what it takes to build a tech startup community.

    In Suster’s view, just being cheerleaders is not enough; a viable industry hub needs a combination of capital, resources and skills. It’s not an easy environment to create and one that governments alone cannot do.

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  • A non toxic form of midlife crisis — Audible CEO and founder Don Katz

    A non toxic form of midlife crisis — Audible CEO and founder Don Katz

    “I had what my wife describes as non toxic form of midlife crisis,” says Don Katz of Audible, the company he founded in 1994 and remains CEO of today. In an interview with Decoding The New Economy, Katz describes a startup journey that covers all the bases.

    As Rolling Stone’s European correspondent Katz was engaged to write a book in the early 1990s about how digital technologies were changing music and what he realised was the industry was about to go through a fundamental change.

    “I had a wonderful career as a writer, I was a long form magazine writer in the glory days of ten thousand word articles,” Katz says of his life in journalism. A book commission lead him to research the future of digital distribution of written works.

    Survival in the digital economy

    One of the driving ideas was how creators can sustain themselves in the digital economy, “my content was already being ripped off on the Unix internet and I thought ‘how will the profession creative class sustain themselves if there’s no ability to control the distribution?’”

    Having founded Audible in 1995 at a time when few people were downloading or even using the net, Katz was in the box seat of the first tech boom and subsequent tech wreck in 2001.

    At the peak of the dot com boom  Audible was floated on the NASDAQ stock market, “In 1999 good companies that were leading categories went public and got massive amounts of free capital.” Katz recalls, “It was one of those weird moments, there were 1500 publicly listed internet companies at the beginning of 2000 and there were 140 by 2003.”

    Surviving the dot com bust

    Katz puts the company’s survival during that period to a conservative attitude towards capital and the alliances he had created with the industry’s major players — at one stage Microsoft held a 37% share in the company and Katz was one of Steve Jobs’ confidants during the early development of the iPod.

    Eventually one of those alliances became critical when Katz became bored with running a listed company, “it was an amazing adventure being a public company CEO for nine and a half years. It was very exciting and an honour to serve shareholders.”

    Katz’s patience ran out with being a public company CEO when automated trading came to dominate the daily operations of management, “suddenly you had this metaphysical sense of ‘who are you working for if someone wants volatility?’ That suddenly got old.”

    Audible already had a relationship with Amazon who had taken five percent of the business in 2000  in return for bundling audio book links on the ecommerce giant’s book pages. Katz also found Amazon founder Jeff Bezo’s long term view towards investment and returns a much more satisfying business model than the day to day grind of meeting short term shareholder demands.

    In early 2008 Amazon bought Audible for $300 million and retained Katz as the company’s CEO.

    Building new startups

    For new startups, Katz advises “make an absolutely fearless inventory of what you know is true about this idea and what you’re good at and what you’re not good at.”

    “You need to have people you can trust and believe in. Beyond that, be very sober about business models that are sustainable. There’s a lot mistakes that people make where you’re solving a problem in a piece of a value chain that isn’t sustainable. It’s easy to get confused about who the customer is.”

    “Figure out who the real customer is. Sometime people overplay the fact that the customer is the capital, the capital will come if people have the innovation and the passion.”

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  • Staring down the coal train – the end of the Australian arbitrage model

    Staring down the coal train – the end of the Australian arbitrage model

    One of the irritations of being in Australia is the often insular and myopic view many of the nation’s business and community leaders have.

    A consequence of that insularity is that business operates at a slower pace than in more competitive markets; there could be up to a five year lag between technologies being introduced in North America, Europe or East Asia and them being rolled out Down Under.

    That lag creates an arbitrage opportunity for canny local investors, this post on the Investment Biker Analyst blog illustrates the thinking .

    I’m not sure about the barriers to entry for potential competitors to Digivizer because part of my view as an investor since I got back to Australia is the way the markets geography has always insulated it from quick counter-punches. Think about the way the UK always seems to be the second place North American business rolls out it’s plans for sector domination. We’ve seen it over and over again. Australia on the other hand is well down the list as the market, while affluent is at 25million quite small. Also it’s a long way to come if you have to get on a plane . . . Oh, and besides that the “Aussies” can find us themselves without investing extra start-up capital.

    Mike’s model is the standard for the Aussie start community; local entrepreneur looks at the hottest businesses in Silicon Valley, sets up a minimum viable copycat, pitches to investors who put money in on the hope of making a profitable exit to a dumb local player or to selling out to the market leader when they finally decide to set up an Australian operation.

    Increasingly the second option isn’t working as the big player are either moving into the market quicker, which also screws the first exit option, or the locals are asking too much for their cheap knock offs.

    As a consequence the local copycats are increasingly finding themselves stranded in the marketplace.

    Quickflix is a good example of the local knock offs being stranded, having copied Netflix’s business model, the company has toddled along for a decade with its movie and entertainment delivery business and now faces Netflix starting an Aussie operation.

    With a formidable competitor entering the marketplace, Quickflix is frantically trying to shore up its defenses, having made a $5.7 million capital raising and committing to cut costs.

    One suspects though this will be nowhere near enough to build up defenses against Netflix, incumbent cable operator Foxtel, fellow steaming service Fetch TV or the bizarrely named and probably doomed Stan service setup by an uneasy coalition of fading old media companies.

    In an increasingly connected world relying on the tyranny of distance to protect your business is a losing game, something that many Australian companies and investors are yet to learn.

    Then again, as long as the coal trains keep running, maybe Australians don’t have to worry.

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  • Riding the startup roller coaster with Uber CEO Travis Kalanick

    Riding the startup roller coaster with Uber CEO Travis Kalanick

    A great interview with Uber CEO Travis Kalanick by Kara Switzer in Vanity Fair touches on the mental difficulties facing startup founders.

     

    He was depressed after his first start-up failed badly and his second went largely sideways. He was, as he recalls, deeply afraid of failure. “I had gone through eight years of real hard entrepreneuring. I was burned. So, I just wasn’t ready yet,” says Kalanick. In fact, he had been living at home with his parents in his childhood bedroom not long before his trip to Paris, after those two start-ups had failed to flourish.

    xys

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