Tag: planning

Sydney’s digital humiliation

Google’s decision to pull out of Sydney’s White Bay startup hub project throws the NSW government’s tech industry plans into disarray.

It’s hard not to see Google’s decision not to move the mooted digital hub at Sydney’s White Bay as nothing short of a humiliation for the New South Wales state government.

The White Bay project is the centrepiece of the NSW government’s startup tech startup strategy and Google were hoped to be the anchor tenant for  the refurbished power station that’s been abandoned for over thirty years.

With Google’s Sydney office currently overflowing and its staff numbers expected to increase from around 1500 today to 10,000 over the next few years, the White Bay precinct with its cathedral like power station made some sense.

For the startup community, having something similar to the London Google Campus would have been a valuable part of the city’s ecosystem.

However the location is in a traffic blackspot served by a woefully inadequate and unreliable bus service with a series of major road projects planned to start in the neighbourhood over the next five years which forced Google to rethink their plans.

Now it looks like the White Bay project getting underway this year is doomed and meanwhile the Victorian state government is spending big to attract tech companies to Melbourne.

This is far from the first time the NSW government has had ambitions for a digital hub and again a project stumbles in the face of poor planning by the NSW government.

We don’t know if the Victorian government has made an offer to Google yet, but it wouldn’t be surprising if they have. It could be New South Wales is about to pay the price for its lack of vision and forethought.

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You’re going to need a bigger app

Focusing on digital disruption while ignoring bigger social, economic and climatic changes is a folly for business and government leaders

“It has to be disruptive technology,” bleated the consulting firm facilitator at the Future Transport Summit in Sydney earlier this week.

The hapless, but well paid, consultant — a depressingly frequent feature of Australia’s current ‘ideas boom’ — was protesting when one of the participants at his ‘ideation session’ had raised topics such as integrated timetables and changing commuting habits.

Mr Consultant’s running orders for his ‘ideation session’ were to focus on ‘digital disruption’ and his employer;s cluelessness illustrates a danger for business leaders and policy makers.

Selling the snake oil

Digital disruption is real however it’s not just the only factor facing governments and industries. Demographics, economics, politics and climate change will have greater influences on business and society.

Uber, the favourite lovechild of those spruiking digital disruption snake oil, is a very good case in point. While the service certainly has disrupted the taxi and motor vehicle industries, these sectors were facing major challenges as governments enacted policies to reduce carbon emissions, voters became tired of cartel like taxi companies and the Western world’s young and wealthy moved back to the cities and away from owning motor vehicles.

If anything, Uber was the result of GenY entrepreneurs like Travis Kalanick finding existing services didn’t meet their needs rather than the result of technology desperately looking for a problem to solve finding a niche.

Complex changes

While the smartphone was critical in Uber’s success in disrupting the global taxi industry, technology was only one facet of a much more complex set of changes.

The motor industry is a good example of the complexity of change. A hundred years ago it was clear the transport industry was about to be disrupted by the automobile, it was by no means obvious access to affordable personal transport would allow urban sprawl and the suburbanisation of western society.

Coupled with the motor car and truck, the availabilty of mains electricity meant refrigeration also became accessible which lead to the rise of supermarkets after World War II. This disrupted the local corner store in ways shopkeepers could never have foreseen in the interwar years.

Shifting demographics

Now, the opposite is happening as the young and affluent reject long commuting times from distant suburbs and city densities start increasing.

The social and economic factors that drove Uber are affecting public transport usage patterns and it’s no coincidence that the cities where ride sharing services have most successful, such as Sydney, also have underfunded public transport systems that are struggling to meet their population’s demands.

Which brings us back to the foolishness of discussing the future of transport only in relation to technology. Smartphones, apps, big data and the internet of things will all be critical parts of future transportation but the social and economic factors will shape how people use the networks.

Focusing on technology while ignoring the other big influences is a folly that will cost businesses and government dearly. Although one suspects the management consultancies will do well regardless of how well change is managed.

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The year of the cloud

2011 was the year cloud computing took off.

This post originally appeared in Smart Company on December 23, 2011.

I was asked last week to join Stilgherrian and Jeff Waugh on ZDNet’s Patch Monday reviewing the year that was in technology. One of the things that came out of the session was much of what happened in the tech world over the last year was really a continuation of 2010’s trends.

That’s certainly true and the biggest buzzword in business tech for the last two years has been “the cloud”.

Over the last year we’ve seen a lot more providers getting on the cloud bandwagon with Microsoft responding to the Google Docs threat with their Office 365 product, MYOB launching Live Accounts, to respond to threats like Xero Accounting Software and Saasu and a whole range of vendors proclaiming they are ditching the desktop and moving onto the web.

Despite the hype businesses are slow to respond as they evaluate the various risks with moving to web-based services. Partly this is due to suspicion of the more outrageous claims such as “saving 80% of your costs by going onto the cloud” that have been peddled by some vendors.

A lot of that suspicion is fair enough, too. Many business owners – along with CEOs and government ministers – have been burned over the years by IT salespeople claiming big savings available if the gadget or software of the day is purchased.

Unlike corporate leaders and government minsters, the managers and owners of smaller businesses tend to learn from their mistakes and so they are waiting to see if the cloud services really deliver.

Eventually businesses will move a lot of their computing applications to the cloud as the cost-benefit equation is better for most services than running it in your own office as it eliminates the overheads of buying computer hardware and hiring some geeks to look after the things.

Given the real advantages of cloud services – not just in terms of cost savings but also in business flexibility, productivity, security and reliability – it’s worthwhile using the quiet January period to have a look at where your organisation can benefit from moving online.

Some of the other buzzwords like social media, collaboration and site optimisation are worth having a look at too. The holidays are an opportunity to see where these can be used better in your business.

One thing is for sure – next year you’ll be hearing more about cloud computing as vendors are gearing up for some big marketing campaigns next year. So knowing what you want for your business may well pay dividends.

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Fading markets, falling margins

Are we fast enough to recognise when our business is changing?

“They don’t pay for us to go to trade shows anymore,” lamented a journalist at a recent industry PR event. The era of international trips and freebies is over for most technology journalists and its passing is mourned by many of them.

Media junkets, industry conferences in exotic locations and management retreats to exclusive resorts are what businesses with fat profits can afford. Most of the tech industry is past that point as most of the sector becomes commoditised.

Slowly, vendors come to understand what a commoditised market means as Acer have with their announcement they will stop selling cheap systems while others, like Apple, have managed to avoid that trap entirely.

As technology changes, cheaper manufacturing locations appear and consumer preferences change many businesses will find their markets change. Some will identify those changes early and change course while others will wonder what has happened to their fat margins and why they can’t afford management, client or media trips to the Pacific or the South of France anymore.

That’s good for consumers, but a terrible thing for those managers who are little better than corporate bureaucrats and their friends in the media.

Interestingly, it’s the jobsworths and the overfed incumbents who are the slowest to recognise when their businesses are changing which is why there’s so much opportunity for smaller, smarter enterprises.

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The five year business plan

How does a business idea grow?

Recently I was talking to an old business partner about why our venture failed, we agreed we’d spent too long on trying to keep an idea alive way past the date it was clear it didn’t work.

This formed the idea of the Five Year Business Plan. It’s not a detailed plan, just the broad cycle that the typical start business follows.

Years one and two: The formative years
The first two years are the most exciting, exhilarating, toughest and frustrating periods of running a business. This is when you test your assumptions, discover what works and ditch what doesn’t. You make mistakes, learn and build upon the lessons

Not only is this the time your business develops, it’s also the time you learn about yourself and your business partners. Some of the lessons you’ll learn about debtors, staff, suppliers and customers will break your heart and make you tougher. You’ll also probably require cash reserves to see your way through much of the first two years as well.

In many cases the assumptions are too wrong and cash demands too great. If the cashflow isn’t standing up, sales are too short of projections or the development is too slow, it’s often best to draw a line in the sand and move on before you invest too much of your life on an idea that doesn’t work.

Consolidation: Years three and four
Once through the formative stage, the third and fourth years are about consolidation. Having got your business running well, now is the time to be proving the model and making money.

This period is where you start booking real profits, build goodwill and start laying the groundwork for your exit strategy.

Year Five: The next steps
In the fifth year, you’re looking at where the business will go next. Some entrepreneurs will look at cashing out to a buyer while others want to franchise out their systems or build the business into a world beater.

With a four year track record and solid profits you’re in the position to seek buyers, investors, franchisees or lenders to execute the next stage of your business, and personal, growth.

This five year plan is nominal as not every business will follow it. For instance a franchisee will probably short circuit the first two years as they are buying many of the systems and products a start up entrepreneur has to develop and that’s why a good franchise costs money.

Also, the phases may vary depending on the industry, the state of the economy and just plain dumb luck but by understanding where the business is in the cycle, you can time the right moves for your business from when to grow and when to close it down.

In many ways, starting a business is like being an early explorer like Christopher Columbus, Marco Polo or James Cook. You have a rough map with some ideas and assumptions on it but no real idea of what you’ll discover. That’s part of the challenge of being entrepreneur.

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