August 2004
Next week in Bucharest, program here or in pdf format.
The commons-based peer production - a pool of software assets that is held in common by a community which is enhanced and expanded over time. The community is comprised of peer experts of all kinds, each with a status reflecting only their abilities - age, previous achievements elsewhere, employer or external factors such as race or politics should be irrelevant. The community is focused on production of software - "code talks, talk doesn't code".
Also have a look at an analysis of open source on the software industry from Porter's 5 forces perspective.
Andrei Postelnicu on a Dark Years Romanian symbol: "most Romanians cannot afford new cars and will care for their Dacias to the bitter end. To you and me it might look like they're tending to a tottering grandma, but they will tell you the Dacia will always be their first and only love."
Nice introductory pdf on what it is, how it functions, its impact on the business as well as challenges ahead.
People started acknowledging that it is becoming increasingly advantageous to give up the land line in the favor of mobile or voip services (i.e. Skype). Heh, I got 5 cold calls from voip providers in the last 2 weeks and it happened in Romania, where it's likely to hear stories like this once in a while.
If you are interested in what is behind a Venture Capital model and some of the basic stuff from the industry here's a new lesson: participating preference (or double dip). If I add term sheet negotiation, the pitch, sweat equity or the perfect VC - operator or investor? I think a little manual on VC 101 can emerge.
Interesting speculations - a browser based on Mozilla, an instant messenger and a new Office suite on Google's way towards an OS.
UPDATE: check out Google store.
Never sleep on laurels and always analyze your missed opps. or failures. For example in the case of not getting a contract - talk to the prospect and try to understand whether it was the process, the sales person, the product, pricing or competition. After a few of these data points, you will have a better view of why you lost and what you can do to fix it. You can learn just as much from your loses as you can from your wins.
He has a blog. Sooper cool!
Have you heard of this guy? I think he is one of the best musicians Romania has, I strongly recommend his live performances, I saw them ever since I was a teenager. That's only if you like blues music of course. AG has a weekly column in B-24-FUN (a weekly Romanian magazine) - really interesting read. This week's article was something that I enjoyed very much as I was thinking along the same lines for a long time. I couldn't find any online source to link to and I took the liberty of translating it and posting it here.
Love and time - those are the only things in the world that cannot just be bought. I know it is extremely difficult to be a decent person whenever you run into ignorants or idiots (even if they're around you) - people thinking they're above everything and having the impression they diserve everything.
Have you ever met these types of assholes before? If you haven't I can guarantee you that sooner or later you will cross lines with such social pricks. The times and the environment we live in make them show up just like mushrooms after the rain. It is becoming more and more a "virtue" to be imbecile, servile and malefic. Don't get stunned and don't get tricked...If you truly love and respect yourself then you will realize that it is not worth letting you being fooled by those intrigant traps.
Don't forget that the most precious thing in this world is your own existence. Everything starts from yourself and goes back to yourself. The truth is only yours, don't get trapped by the ploy of the lines of interests - like the ones from your parents for example...everyone protects their own kids and that makes them mega subjective, driven by instincts and without a historical perspective. Respect and love come from a different source...not from social conventions encouraged by mass-market and propagandistic morality.
Look for doing good deeds, be source and resource and never fear the one that doesn't speak the truth. How do you realize that? Well, my friend...as the old folks say: each of it's own.
Marian Saniuta on the FDI and reasons to invest in Romania (pdf) at the Banking on Romania 2004 organized by FT this May. Saniuta was then the head of ARIS (Romanian Agency for Foreign Investments) and now he leads the Minister of Internal Affairs. Though I have to admit I haven't seen it live, this presentation seems to be well prepared in contrast to what had happened at the OPIC conference this spring. Well, the slides were a bit too full of info but that's my taste and the presenter's performance is more important actually.
Also, if you have a look at the other presentations you can pretty much assume the banks' strategies in the Romanian business environment, in line with the focus on the retail side.
...seem to be the hot area in the VC circles in USA for the moment. Technorati - the blog search engine is in the process of getting fresh VC funds. OM is covering the story - also for getting a better context read one of his older posts predicting that this will become a crowded industry for all sorts of early financiers. Also, worth noting is Olivier's prediction that ultimately all those applications involving RSS feeds, weblogs (or collaborative software type of things) will converge to a common umbrella and Ebay is the likely integrator. And even though both Ebay and those tools have sharing information and trust in common (besides identity) I am a bit skeptical on the whole tool convergence stuff as there are too many basis to cover. Consolidation - yes, as critical mass is an important variable in the social software combination. The industry is too young though.
Mark Pilgrim points out that in any case writing specifications is very important as in most of the context programmers just have their own approach when they need to deal with them. As such he categorizes the developers into morons and assholes. Tim Bray adds a third category: the flamers.
The company brought in a former Coke executive who is now in charge with the overall brand management. His first move: market segmentation - premium, fashion, classic, active, expression and entry.
And since I was mentioning the Olympics find below the revelation Marc Canter had while watching the Olympics coverage from Europe.
"When you get out there (in Europe) a whole new refreshing outlook is exposed. It's not that it's any better (much of it is worse) - but at least it's different. [...]
So mainstream media in Europe is roughly equivalent to independent, Sundance channel, on the fringes kind of content - because it's NOT American. One of the most fascinating stories I'm following - is the Iraqi football (soceer) team. The fact that I even have to clarify the word football - in this context - represents the state of the world - to me. We've got an English centric, U.S. leading dominated culture, where McDonalds and Coke are just as important as local customs and traditions. [...]
I used to not really like French people, but now that they've stood up to the U.S. and were proven right - it's Vive la Defrance - for me!"
We got three more golds and a bronze - in rowing (feminine team - 1, 2, 3) and backstroke swimming (Razvan Florea). We now have a total of 7 medals. And btw, last night Lithuania beat USA in a fantastic basketball game after humiliating the Greeks a couple of days ago. I hope the Lithuanians will get the title, they play great.
UPDATE: In the meantime the Romanians achieved 9 more medals:
- feminine gymnastics: 2 golds for Catalina Ponor, one gold for Monica Rosu, one silver for Dana Sofronie, one bronze for Alexandra Eremia ,
- masculine gymnastics: 2 medals - a silver and a bronz - for Marian Dragulescu and another silver for Marius Urzica
- athletics: Marian Oprea in the triple-jump competition.
We now have 16 medals.
While the entire marketing budget for this year was set up at a ridiculous $12m, the Romanian Ministry of European Integration initiated a program of investments for SMEs activating in tourism industry. The total value of it - 400 bn lei (10m euro). The target: infrastructure and services. While the sum sounds symbolic and the lack of a clear global strategy in the industry is evident, I think any money is more than welcome in an area that screams out loud for funds. Though I suspect this initiative was a direct result of the minister's meeting with the Advisory Council for negotiating Romania's EU integration.
Constantin created
a wiki with a list of CEOs who keep a blog. (CEOBlogList) Also,
in case you're interested in PR materials he also set up a repository
(TheNewPR/Wiki) with
plenty of interesting stuff in the field.
(1) basketball, baseball and football already occupy most of the mindspace in the US, erecting a formidable barrier to entry,
(2) basketball and football have similar characteristics and provide similar satisfactions to the viewer, so that they end up being substitutes,
(3) soccer rules have not been revised to satisfy Americans' need for conclusive results - draws are not perceived as a satisfactory outcome.
(via Narasimha Chari)
Mediabistro.com - a marketplace for freelancers in content/creative industries. The revenues comes from organizing events, offering training and courses and diverse ways of advertising. The idea is not new, on the contrary, it is rather the niche that made me dig into it.
Developing countries invest abroad - could it be because of the wealth from the bottom?
Another model of social software - only in Canadian and US version unfortunately. But quite useful when combined with community-based work for example.
A BBC story about what is going on in the industry - the most read daily Romanian newspaper is accused by the government that it is writing too much about the corruption and its actors (incidentally the cabinet members and people from around).
While the government acknowledges it is a big problem and most of the ordinary people label the government in a similar way, the officials put the blame on the media - you know, we have a bad image abroad 'cause journalists write about murky incidents. Sounds childish, of course the problem is corruption itself and not that it is written about. And even though I don't have the best opinion about the quality of local journalists or their work thereof I think their job is exactly signaling and writing about things. Good or bad. My only concern with journalists is that, apart from their evident daily frustrations and stories driven by various interests, they just forget that from a community point of view they have a duty to educate the audience. While maximizing the profits, and not the other way around.
Don't get me wrong, you can also find good pieces of journalism, and EVZ is among the leaders. They just happen to criticize the government these days. But community is a word not too often used in Romania nowadays unfortunately and more often I see people complaining about the ignorance or lack of involvement on the community level. It is just up to every each of us to make things better, though I realize it is very easy to get discouraged. And the first channel to focus the efforts towards this direction is exactly the media ones. In addition, don't write or think that the place you live in is bad if you don't do anything about it.
Michael over at The Glory of Carniola linking to an online collection of historical maps of the Balkans.
A very interesting
report claiming that in the 2001/2002 season the market value of the
football industry was about 10bn euros, with 80% coming from five countries
(England, France, Spain, Italy and Germany). No wonder the suspicions
of local mafia involved in the Romanian football even though these
people claim "they don't make money". That is of course BS, they make tons
of money out of it - problem is that they could make even much more
money should they have the right managerial skills and approach the industry
on a long term investment basis. But if you look at the "so-called"
investors, their profiles or listen to what they have to say you
understand immediately that they are close to the way
the Romanian business environment looks like: unprofessional,
unprepared, imature, or looking for the hit-and-run. The main
difference I reckon is that most of the money in football belongs to the
grey economy. And despite my positive thinking on our potential as a nation
- we learn fast and we're open minded - I think there's a long way we
have to go to get to normal.
Interesting insights from a guy working for a software company.
Seth Godin and his team released ChangeThis last week - an initiative with a clear purpose of changing the media. They released some manifestos - read the about starting your own business by the one and only Guy Kawasaki. (pdf) Btw, don't forget to check Guy's monthly column from Forbes magazine, I already mentioned it before.
Umair set up some internet space for sponsored discussions in a blog format. The deal is that companies can sponsor topics and bloggers discuss them in return for a small compensation. It also has a little manifesto behind it: ads should not be evil (sound like google, eh?), engagemnet builds respect and the www is talking about you so say something.
The idea is quite similar with the concept of innomediation, places like TechEx or Innocentive are well established and very profitable nowadays.
Interesting article on the Wi-Fi future, sooner rather than later it will change the way we use gadgets connecting to the internet. Would be glad to see some rapid development in Romania as well, as far as I know there are only few wi-fi spots in a couple of hotels in Bucharest.
Apparently this spring's 1.1bn euro deal seems to have some problems that may affect the end of 2006 deadline.
So far we have got three medals: 2 gold and a bronze. Gold for Camelia Potec - freestyle swimming, gold for the feminine gymnastics team (no surprise here, we always kicked arses :)) and a very nice bronze for the masculine gymnastics team. Well done!
A list with location-based mobile games -- you gather with your friends in a square or a neighborhood and play games like pacman, pirates or can you see me know. You can do that by using the GPS signal from your mobile phone - a soopercool idea.
And while we're at the games category check out Robo-One ( story and pics) - fights with robots, only in Japan of course. (via Ronald and Umair)
There's plenty to learn from Amazon's CEO even though at times it just sounds like a PR story.
Remember that a while ago during this spring there were some serious problems raised by EU representatives regarding the reforms (a term broader than and including corruption) needed to be done in the Romanian justice system? Here is a very interesting report made by the Ministry of Justice, the National Institute of Criminology and the Pro-Democratia Association - just look at the graphs and observe that judges explain their own negative influence perception through external factors such as media reflection (51%) and subjectivity of the litigants. (49%) However, half of them admitted the existence of inappropriate influence in their work with one in 5 cases (19%) coming from the political side. They also claim (94%) that the protection for such influence is inadequate and 83% say that there were pressures exercised over them.
Also, worth noting is that 16% think that the justice system is sometimes, very rarely or never correct (that's right -- 16%!!!) and 54% never use the IT systems at their disposal because of lack of training (17%), technical reasons (36%) or they find it useless (1%).
I must admit I was pleasantly surprised that the report is available online.
If you need a Romanian email version with 80 Mb storage and 20 for photos here's a link. I personally stick with 2 email accounts, it's more than enough - gmail and krogos. How about you - see the poll from the right.
RDS is close to acquire PCNET and CVR seems to become the star of the next beauty contest. Potential hunters: RDS, Astral or UPC. Or an external player perhaps. Read the context first and then the story.
Two interesting presentations with surveys, figures and trends on the compensation levels in Romania as opposed to the ones from EU and Central Eastern Europe
Yeah, as always Romanians have to be one of a kind in this breed - instead of focusing on the demand side and also work out the technical problems with industry suppliers banks are just preoccupied to charge big fees as they see it as a low volume high margin business. It is a somewhat incipient niche that will never take off under this scenario.
Hint: e-commerce IS a cheaper and easier way for both the consumer and seller, so it's nonsense to treat it otherwise.
link (pdf) via just another blog.
ps. btw, Martha signaled me this month's 10-year anniversary since the first e-commerce transaction (apparently a Sting CD for $12.48 plus taxes). Would be interesting to know details about Romania, any insights are appreciated.
What it's like and things to consider if you do your own thing and work on sweat equity. (meaning you don't pay yourself a salary and cover expenses from your own pocket). It is tough like hell but may be rewarding. As always Brad has great insights and tips.
A never ending story - 2000 companies left, more than in all the other countries from the region put together.
A comprehensive analysis of what's going on in the blogosphere. Google's Blogger (30%), LiveJournal (23%) and Typepad (15%) are leading the pack in terms of usage but it is interesting to note that in spite of a rapid usage increase so far there is not a solid business model that promises a sustainable wealth creation process. If we also keep in mind that the switching costs are very low, well, sounds more like hype than business to me.
If you have to do cold calling it keep in mind these pointers, predictably enough being nice, polite and listening to what the other has to say are starting points.
A brilliant social software application: Couch Surfing. It is a website that helps people network with others from all over the world. The deal is that when you travel somewhere you can use CouchSurfing for learning about people from that area not only willing to show you around but also who may have a place to crash at (couch). For free. Of course they have some verification levels in place and perhaps backpackers are the most inclined people to use it.
Everything's for free as it is a non-profit organization but one can make donations for covering expenses like maintaing the website and such. It is a 2500 people community with 16 people from Romania out of which 8 are from Bucharest.
http://www.admblog.com/blog/2004/08/cingular_wirele.html http://www.boingboing.net/2004/08/04/escapeadate_ringtone.html
Am not sure this stuff is all done in places like Romania as I think the business environment is still in early stages on the learning curve when it comes to looking for VC funding. Still it is pretty much standard and it doesn't hurt to have a look and learn how the guys from the other side of the ocean are approaching it.
I got this email via Grundtvig - it is an invitation for women entrepreneurs to a training program in Malta next spring. If you're interested just use the mentioned link.
Dear partners and friends,
We would like to invite you to participate in our training courses that will be held in Malta between February and June 2005. Now that you are in your summer holidays you maybe have a bit more time to plan for the next year and the good news is that you can apply for an EU grant (under Grundtvig or Comenius) programmes to participate in our courses.
To see our full schedule and information on how to apply please go to www.trainingmalta.com
We look forward to hosting you here in Malta in the spring!
Best Regards,
Angele GIULIANO
President
PS. Pass this invitation on to your friends as well!
Lately I have been reading about so many interesting companies with cool technologies or disruptive business models and I decided to periodically post a brief review of their underlying value proposition. Hence the blog's new category. Also, if you think you found something worth looking at, be it an interesting technology or a cool business idea, please send them in and I will post them.
Today's model belongs to Trendum - an Israelian company which owns a media mining technology. Basically their technology monitors, analyzes and concludes on media patterns as they result from a thorough scanning on public internet sources such as weblogs, online communities, newpapers or press releases. They gather the data, put in different clusters and categories and deliver a report on a specific topic. Trendum's revenue model involves either subscriptions or on-demand reports. A story about it here.
Jeff Nolan points to an excel file with Google's valuation. It is a simple yet useful to play with valuation model for people who are into the excel modelling stuff. Also, if interested, Bill is offering an analysis model (last xls update here) on an universe of internet-focused public companies he is following - read his last analysis.
You can find an online valuation tool as well as some more related resources on how to value your company here. A good way for brushing up or learning fundamental stuff in the corporate finance, valuation or investments area is Damodaran - he's got all his lectures, case studies and models online.
Interesting article about sharing stories within an organization in
order to empower leadership. The article is full of stories as well and
classifies them in "who am I", "who are we" and "future" stories. Worth a
5-minute introspection I guess.
I never expected that my observations about Apple would generate so much heat and debate. I think it is a simple point I started from and was trying to make ("giving your customer more choices and alternatives for using their device is a smarter strategy than doing otherwise") yet I don't expect "the unconvertibles" aka the Mac users that were kind enough to share their views to agree with me. I do thank you for your comments though.
So my point is not that I have a problem with Apple choosing to play this way but rather having a huge opportunity that IMO it misses. Why is that - the opportunity costs are simply too high - or the cost of not opening up. Of course it will have expensive implications (aftersale support is one of them) but the benefits of position consolidation in terms of market adoption and complementor development are way too high to be neglected. And that means the business success would be rather judged not by the number of iPod sales but on the platform adoption and usage in more than one context. Of course it is not an applicable strategy in the case of a player that targets just a niche - say 2-5% of the market. ("iPod is a luxury item at a premium price")
It is also true that now you can call iPod a standard since it is first mover in a very young marketplace and it is reaping all the subsequent advantages. But this may prove to be just a short term illusion as long as it doesn't have a serious competitor (which NOW it is the case) but what will it happen after lots of companies with a me-too strategy show up at the party? In this position Apple is dominating the market but if doesn't create an infrastructure for exploiting the network externalities it would simply not be a sustainable position.
Bottom line: while I do believe that Apple is a great company mainly for the products it's shipping I have my doubts when it comes to how they reacted on Real's case. It may be just a temporary thing or a well-defined corporate strategy, time will tell. And of course those are my observations with no pun inteneded - it's just me trying to be more of an objective "analyst" and less of a subjective user. Or, perhaps I just belong to the I don't have a head for business club. :)
I had a few comments on my Apple's strategic take and my thoughts are that they somehow miss exactly what IMO Apple needs to do in this context and what historically it had failed to do with its Macs. It is creating and exploiting the network externalities. What does it mean?
If you have a product let's say the iPod that is used by somebody - the value derived by that guy by using it increases as the number of people using iPod increases. As such, as the iPod's popularity grows the gadget will become increasingly valuable since you have a greater use of it. This value is coming from two parts: one from using the product itself as if nobody else in the world had used it and the other piece of value is additionally derived from being able to interact with other users of the product, and it is this latter value that is the essence of network effects.
Now, the case in point is exactly illustrating the above strategy (or lack thereof). Sooner or later, because of the inevitable competition Apple's network (base of users) will be shrinking or be preserved in the best case (the protection Kev was mentioning) below a minimum acceptable level that will not permit Apple exploit economies of scale from producing the gadget. It simply means that the second piece of value I was mentioning above would be too small due to the limitations such as the ones from the Real case.
Having this mind I argue that if iPod is opening up its platform it may be able to become an industry standard. (and this is what Real did - a piece of software to adapt to iPod. Did they hack? - hard to prove, also since TM was mentioning the .doc parallel read a very good argument against this supposition) How? By leveraging its existent platform capabilities and disrupting its competitive advantages. Now, my commentators were saying that in fact Apple keeps doing innovative things, which I respectfully will have to disagree since upgrades are simply incremental changes and not innovations (aka as things that change the rules of the game and disrupt an industry business model). Besides I read that the last iPod upgrade was not so fortunate.
Also, Jon mentioned that Apple supports other formats too - true but the Real case is simply showing that Apple tries to lock on their iPod customers into the iTunes music store and this won't work as it limits consumers' choice. Kev was saying that Real's music store offers very little that Apple's doesn't - that is unfortunately not so. Closing the platform is just failing to make the pie bigger as you close additional sale extensions. And that means failing to exploit the network externalities.
