There’s no doubting that, in terms of social impact, Twitter has been a shining beacon of light in a world of largely vacuous and self-absorbed social media content. Therein lies its strength. But considering that the company has received over $1 billion in venture funding since 2007, you would think they might have settled upon a viable business model by now.
Legions of internet commentators have already weighed in on whether or not Twitter can ever salvage a real business from its existing offering. I hope they can. Twitter is my preferred outlet for social media content, for a number of good reasons. It allows me to receive, share and comment on high value content whilst retaining a degree of privacy that is not offered by other services.
Twitter may be smaller than other social media services, but it packs a lot more more punch. Twitter users tend to be better educated, more affluent and (importantly for advertisers) three times more likely to follow their favourite brands online. Pundits complain that the current round of Twitter tweaks will not be enough. But I tend to disagree. You don’t turn around over 300 million users in a single day. Transformative change for the Twitter’s business model is necessary, but will take time. Experimentation and testing are part of that process.
Paul Spence is a commentator, technology entrepreneur, a co-founder of iwantmyname (a New Zealand based global Internet venture) and a mentor with Startup Weekends. You can follow Paul on Twitter @GeniusNet or sign up for a free weekly digest of startup, tech and innovation related events curated by him through New Zealand Startup Digest.
Recently a friend asked me how new companies from a remote location like New Zealand can get noticed in crowded markets on the world stage, without breaking the budget. The answer is simple. Build a fantastic product and love your customers madly.
There are other techniques of course, including referral strategies and affiliate programmes, partnering with other businesses where there is the right fit and optimising content for online search. Also work out which social media or social apps your customers like best and hang out there. You notice I didn’t mention actually paying for advertising. Finding the best mix of tools is largely an experiment, don’t let anyone tell you otherwise. Personally I favour generating high value content that draws in viewers in a subtle way. Search engines get smarter every day and will trash low value content, pushing you down the ladder. Fortunately I love writing about technology and business; but if you don’t – find someone who does ( or invite me to write a guest blog article! )
Internet companies have an unfair competitive advantage over companies flogging consumable goods of course. You don’t have to have a physical presence in market to make sales, scalability is only limited by your ability to manage the technology and capital requirements are minimal. The downside is that the barriers to entry are relatively low. That’s both an opportunity and a threat. It means there’s lot’s of other competitors in your space, but it also means many of them are crap. Don’t become one of those. Pay attention to customer feedback and take away what’s important. You won’t win by responding to every single feature request.
I’m currently burning 3-4 hours of my day working on the customer support side of the business at iwantmyname. We’ve adopted a policy that all employees must spend part of their day engaged in customer support. It’s the quickest way to find out where the points of pain are for your customers and a great way to learn more about the technology itself. It can also be humbling both when you solve a problem for a grateful customer and when you fail to do so – and boy do they let you know! It’s fun riding the long tail, but you need balls of steel and the hide of an elephant sometimes.
Have a safe and happy Christmas holiday and a fantastic 2013.
Paul Spence is a commentator, technology entrepreneur and is a co-founder of iwantmyname, a New Zealand based global Internet venture. You can follow him on Twitter @GeniusNet
I’ve always enjoyed those Red Bull ads showing how that fizzy mineral drink gives you a lift. It’s also interesting how Red Bull have successfully leveraged the aeronautical theme in their sponsorships of various high energy sports around the globe such as air racing and Formula One.
Red Bull started from very humble beginnings, but is now a globally recognised brand. It helps a lot that Red Bull tastes good; but building clear brand values is a really important task in any business, including start-ups. You don’t need to own a Formula One team to build a great brand, but you do need a consistent message and a fantastic team that believes in the product and provides superior customer support. I hope that’s what we are achieving with iwantmyname.
This weekend entrepreneurial developers and designers from all over New Zealand will converge on the sunny Bay of Plenty for Tauranga Startup Weekend. I’ve been an organiser, a mentor and a sponsor at these events at various times, but I’ve never actually played on a team. This weekend will be my first Startup Weekend where I will actually be pitching an idea.
We’d love to see a huge turn-out of developers and designers at this event from all over New Zealand. ideegeo Research Limited is the new venture development entity associated with the founders of iwantmyname. We work with young entrepreneurs and help them bootstrap interesting web-based projects that have the potential for global scalability. So here’s the deal…
If you are a developer or designer from outside of the Bay and you sign up for Tauranga Startup Weekend this week – you will go in the draw to have your travel costs to the event co-funded by us. The draw is open to any developer or designer who signs upthis week for Tauranga Startup Weekend. Offer closes 5pm, Wednesday 12th September.
All you need to do is contact us after you’ve signed up for Tauranga Startup Weekend, tell us a little bit about your skill set and we’ll talk about how we can help in a practical way. Let us add wings to your Startup Weekend experience!
The Coatesville police raid and subsequent removal of the MegaUpload site should serve as a reminder to us all about how powerful governments and corporations now intend to exercise increasing control of the wild west known as the Internet, through both new legislation and legal prosecutions. It would also be foolish to continue assuming that tiny, remote New Zealand is immune from the growing American political appetite for punishing the alleged purveyors (and consumers) of pirated material.
Irrespective of what you think about Mr Dotcom and the legitimacy of his business, it’s important that the matter be given due process through the Courts and that we do not prejudge the outcome or bow unthinkingly to the will of foreign governments. There are powerful forces at work as witnessed recently with the U.S. senate coming under heavy lobbying pressure from the entertainment industry.
It’s clear that our government want to be cooperative, especially with increasingly frequent connections being made between favourable trade outcomes and the protection of intellectual property rights for American companies. What better place to exercise a show of force than in a small, compliant island state in the south-west Pacific. Why else would such an over-the-top para-military style operation be permitted in the Prime Minister’s own electorate on an individual who had recently received approval for New Zealand residency? It’s astounding.
The SOPA debate and the moral panic around piracy in the United States has largely arisen because of the ongoing failure of the media and entertainment industry to innovate its distribution channels rapidly enough. The rise of file sharing and related sites is simply a symptom of that failure in the marketplace. Without question, creative individuals deserve to be fairly remunerated for their efforts and creative industries should be allowed to make a profit, but not at the expense of Internet freedom.
Police raids and draconian legislation are ultimately more likely to inflame than to discourage. An intolerant approach towards content sharing enterprises in general may also have unintended consequences for “law abiding” users caught up in crackdowns. Perhaps the hackers and hosters should be invited to provide a technological solution to the digital creative sector that everyone can live with?
Innovation, incubation and competitiveness are firmly back on the political agenda. 2011 has been a busy year, with the government setting about reforming publicly funded scientific research and reconfiguring IRL in an effort to drive more commercialisation activity in the technology sector. The government funded trade agency has also been talking up successes from its incubator programme. In the meantime, the recently formed Productivity Commission has quietly begun developing an academic framework to address infrastructural inefficiencies in the New Zealand economy.
In this context, it was unsurprising to see some recent commentary that was highly critical of the manner in which government gets involved in innovation and business. More specifically, Rowan’s comments alluded to some deficiencies in the methodologies being employed by business incubators when advising software start-ups. Notwithstanding the fact that incubators are generalists and lack the huge depth of experience and background of success that Rowan brings to his own web and software ventures, there were some fair criticisms which pleasingly generated a lot of intelligent follow-up discussion.
Where I parted company with this debate however was when the tone shifted towards questioning the necessity for providing events to engage the start-up community. Most readers will be aware that I’m deeply involved in organising such activities in addition to my role as a co-founder of a couple of tech companies. One of these companies is pre-revenue start-up, the other is growth phase and profitable. Being involved in the community is a deliberate strategy which is partly altruistic (because it’s fun), but also good for business. We are only as strong as the people around us.
The government’s moves to redefine how we approach identifying and commercialising high value science and technology based ventures are oxygen for our economic flame; so too are the various contributions made by formal incubators, informal “innovation hubs”, university commercialisation offices and the various business related events and competitions. The Ministry of Science & Innovation’s report on Powering Innovation even talks about “…the creative connection of talented minds across discipline boundaries“. We do not need to emulate Silicon Valley, but we should learn from that ecosystem model.
Around the world, entrepreneurship is increasingly seen as both a legitimate career option for young people and a growth spark in an otherwise dull economy. At a time when youth unemployment stands at around 30% in New Zealand, we cannot afford to ignore the opportunity of infusing young people with an entrepreneurial spirit. I recently attended the 30th anniversary celebration of the Young Enterprise Trust. This organisation provides entrepreneurship programmes for high schools and counts such luminaries as Rod Drury and Seeby Woodhouse amongst its alumni, demonstrating the importance of a community approach to entrepreneurship education.
Building an entrepreneurial and export focused culture has never been so important as now, with traditional models breaking down faster than ever. Knowledge sharing and relationship building within and amongst our specialist communities is foundational to strengthening our innovation ecosystem. We can no longer afford to operate in silos or to make the assumption that there is only a single approach to building cool businesses that solve real problems and generate economic returns.
A lot of people have been asking me recently how iWantMyName is going. The short answer is that it’s going great! We’ve been profitable this year and have had our heads down working hard laying both the technological and business organisational foundations that we need to grow. The challenge has been in making the transition from a small start-up business to a fully fledged, high growth technology story.
I certainly won’t say that it’s been easy. Everyone on the team has made sacrifices and we even had one or two nervous moments during the early days when we wondered if we would make budget and be able to pay salaries or rent. It comes with the territory. Being a start-up entrepreneur is like being on a mad roller coaster ride. It can be both thrilling and terrifying, especially if you are bootstrapping.
I meet a lot of budding web entrepreneurs and one of the first questions I ask them is, “are you ready for 2-3 years without a proper income?” It can easily take that long to carve out a niche for yourself and get meaningful revenues going. That’s without factoring in the vagaries of foreign exchange rates.
Notwithstanding the challenges ahead, we’ve got big plans for lots more features and fresh content on our New Zealand domain registrar site plus a major makeover of our search functionality across all four of our sites globally. There are also new and popular hosted services being posted almost weekly, so users can have smart one-click DNS set-up on their domains. We’re positioning iWantMyName as a next generation domain and DNS management service with an eye on future opportunities emerging with the new top level domains and internationalised domain names.
In addition, we’ve also started a new venture to advise young web entrepreneurs and share some of the experience we have gained on the journey so far. In fact we continue to be actively involved in supporting tech community events such as through Unlimited Potential, Startup Weekend, PXLJam and Perl Mongers to name but a few. We think it’s an exciting place to be as technology entrepreneurship continues to gain a greater profile as a career and lifestyle choice.
We live in interesting times. Last month I attended a seminar looking at productivity in the New Zealand economy and how we can improve. The most overwhelming aspect of the event however was that most of the attendees were white, male and aged 50 or older. Furthermore, much of the focus was on making changes to macroeconomic settings, rather than making an attitudinal shift. If we are to address this issue in a meaningful way we need to engage with a far broader church, including politicians, scientists, entrepreneurs and investors from across the spectrum who are committed to change – not just economists.
With our over-dependence on high volume, low value food commodities to generate income and an over-investment in non productive assets such as property, we have seen per capita income dropping rapidly over the last decade. The flow-on effect has been a return to net outwards migration at levels unseen in the last thirty years. New Zealand is close to entering a death spiral, in terms of an inability to pay for social services in the future, if we don’t fix this right now! Within the next thirty years we will reach a tipping point at which a minority of the population is working to support the dependent majority.
Each speaker at the seminar was tasked with presenting a simple, yet radical idea that could move the goalposts on productivity, in an effort to stem the flow of emigrants and ensure we can fund our future. Some of the ideas were downright batty, but at least people were thinking and talking – which is more than successive governments have achieved so far. In fact, perhaps the single biggest issue is leadership inaction in the face of political expediency. It will take more than speeches and a cup of tea to solve these problems. So here’s my ten cents worth.
It seems we can easily find $10 million to build a temporary booze hall for rugby patrons on Auckland’s waterfront, yet we continue to struggle to provide a coordinated approach to identifying and commercialising world class science in New Zealand. If the government lacks the gumption to look beyond a three year electoral cycle, then the private sector must take a stronger leadership position on the matter.
There’s plenty of cash sloshing around in superannuation funds, but if it means accessing foreign capital and connections to get on with the job, so be it. Endeavour capital see the opportunity, why not others? We should aim for 100+ Lanzatech or Endace type companies. That requires making project opportunities transparent and going big, whilst retaining a NZ Inc. stake in the intellectual property. It means identifying top talent to lead commercialisation. It will also require a complete change of mindset in some of the more conservative knowledge silos around the country.
Unlimited Realities is living up to its name. Last year the company inked a deal to provide its gestural interface software for integration into Dell manufactured computers. Now the door has been opened by computer chip maker AMD. Fingertapps was showcased this week at the AMD Fusion Developer Summit in Seattle ahead of its rollout with AMD’s next generation of chips for Windows based PC and tablet devices.
The company, which has development offices in Wellington and Palmerston North recently appointed former Kiwibank CEO Sam Knowles as chairperson. It now seems to be on a rapid growth trajectory, having been one of the earliest providers of computer touch screen technology. We saw the “unlimited potential” of the product back in 2008 when we invited Unlimited Realities business development manager Ben Wilde to show off Fingertapps at Wellington to the World.
New Zealand companies are becoming increasingly adept at forging relationships offshore and the U.S. computing market is generally the most obvious first port of call. Fingertapps is yet another great example of high flying Kiwi technology going global from New Zealand.
Plastic Logic, a company founded to commercialise research from Cambridge University recently secured one of the largest venture capital funding rounds of any company globally. But it has not always been plain sailing for the business which aims to devise and manufacture consumer applications for plastic semi-conductors based on organic polymers.
The US $700 million investment was led by Russian interests who plan to establish a production facility on the outskirts of Moscow. The funding was a lifesaver for Plastic Logic which almost tanked in 2010 due to production delays and intense competition from Apple’s highly successful iPad. Like many technology companies, there will continue to be challenges; but the upside is enormous considering the possible applications of its polymer research such as ultra-thin screens.
Ironically, although research and development was performed in Cambridge, the company initially moved quickly to establish a facility in Germany, in order to capitalise on Euro zone incentives that were unavailable to it in Britain. It makes for an excellent case study into why blue skies science research should receive substantial public funding and why regionally targeted economic development aid should not.
The foundational research behind the company has a New Zealand connection. The research team is directed by Sir Richard Friend a British physicist who currently occupies the Cavendish Professorship in Physics at Cambridge. New Zealander and Nobel laureate Ernest Rutherford occupied the same position from 1919 to 1937. Professor Friend visited on a speaking tour recently at the invitation of the Royal Society of New Zealand and the MacDiarmid Institute for Advanced Materials and Nanotechnology.
Over the last year or two I’ve learnt a lot about banks and especially the ways in which they don’t serve their customers. When are we going to build a technology that solves this pain?
Managing an online e-commerce platform means you simply cannot avoid the bureaucracy that is the global banking system. You have to fill out endless forms, pay extortionate fees and generally play their silly game or get cut off. After two years of trading we took the step of opening a foreign currency account for iWantMyName. Six weeks down the track we are finally in a position to accept our first U.S. dollar transfer from our payment gateway. That’s not all. It turns out that I have to actually go into a branch each week to physically transfer money. There is no online banking facility (at least not for small businesses or individuals). It shouldn’t be that hard!
Economists and business commentators have been urging us to participate in the “weightless economy” and go global. Banks on the other hand have no interest in uploading risk by dealing with more small companies. Banks and financial institutions have a vested interest in the status quo and are reluctant to allow a frictionless flow of capital across international borders. Of course if you are a large enterprise, the banks will bend over backwards for you. I’m sure the financial controller at Fonterra doesn’t have to pop down to his local branch to sign a form to transfer a few million Euros in proceeds from the latest global milk auction.
Amazon, PayPal and even TradeMe gave us a taste of what a universal payment system might look like; but these services remain heavily dependent upon the existing banking system because your credit card or bank account is involved at some point. But it’s a starting point at least. Notably, there are increasingly vocal calls for a completely new value system involving the Internet that enables easier payments and that excludes banks altogether. For example, with some services you can perform virtual tasks to earn bartering credits. But that won’t pay my rent or buy me dinner – at least not yet.
Money is a deeply ingrained social institution around which economic commerce has conveniently been constructed. It has no inherent value in itself yet leads to huge inequity in society. Creating a safe, universal online payment system that not only circumvents the banks, but also engenders trust is possibly the greatest challenge facing developers and entrepreneurs today. Let’s do it!