Posts Tagged ‘Entreprenuership’

Startup Catalyst: Open Source Software

June 18th, 2009 1 comment

I’ll start out this post with a confession. I’ve been a big fan of open source since I administered my first FreeBSD server in 1993, and I’m a charter member of the FOSSLC community. Phew, I’ve finally gotten that off my chest. Now let me explain why I think that open source is the best thing that could have ever happened for the 2009 startup.

Firstly, some background. When you enter the market with your own shingle dangling in the breeze, you realise two things almost immediately; (1) there are a ton of opportunities out there and you really need to prioritise wisely. The ‘build vs. buy’ tradeoff becomes very real when every hour of yours can be allocated to paid consultancy, invested in strengthening (or laying the groundwork of) your business, donated to help others (mentorship and charity work), or spent with the family. Even if you can avoid the temptation of purchasing a million labour and time saving devices (which I am fortunately good at), you will need to automate aspects of your business to allow you to get things done. You need to spend ‘something’ in order to make money, whether it is time/effort, calling in favours or plunking down the cash.

Then you also have to grapple with the fact that when you’re going toe-to-toe in the marketplace with the likes of IBM, PriceWaterhouseCoopers or Google, you’re faced with both formidable brands and formidable technology. Fortunately, there are strategies available to deal with both.

Fighting the formidable brand problem involves finding an underserved (or neglected) market. It’s been done before. Sony beat out RCA by selling sucky walkmen to teenager (who finally could listen to their music without shocking their parents). Google beat out Yahoo by automating the search index creation, and making irrelevant (and a veritable white elephant) the incumbent hand-built directory. This strategy has been very comprehensively covered in The Innovator’s Solution: Creating and Sustaining Successful Growth

A solution also exists for the formidable technology barrier; ideally, you are in working in a space where mature components are available that can get you part of the way there. This strategy has been described in Winning at New Products: Accelerating the Process from Idea to Launch, Third Edition. The crux of the matter is that the existence of building blocks, whether for your business, or the development of your product, can make your effort much more likely to succeed. These building blocks reduces risk of failures, whether it be that of your contact database being wiped out, or a key customer suing you for breach of contract, when your product fails on them.

Traditionally, these components have been sold by vendors for affordable rates, as price competition exists in a component based market. However, you have another choice nowadays, and that is access to open-source software (and even hardware if you like building phones, mobile devices and robots).

The open source solutions are usually as good as the commercial alternatives, and you can easily access either free support on forums, or have paid consultants available to help you out. There is no three months licensing/contracts dance, and once you have the software in place, it keeps improving as the community improves the software.

I use WordPress for my Blog, have 6 TikiWiki CMS set up to collaborate on different project and leverage the Wiki, forums, votings and file management capabilities. I am using Apache Nutch, Lucene, Hadoop, MySQL, Java and Eclipse for the search engine development, which easily saves me two years of development (and that is a conservative estimate). My primary platform is Ubuntu, which I’ve configured to suit my requirements. I author my documents in LaTeX and OpenOffice.

MY team creates our own logos and graphics via GIMP and Inkscape.

My conservative estimate is that this software is providing me over 100,000 dollars worth of value.

Now, its up to me and my colleagues to start with this seed which was essentially there for the taking, and realise our vision. There is no scope for excuses. The existence of big brands backed by big technology no longer has any relevance for us. By choosing open source, and selecting an underserved market, we’re just strategically out-maneuvered both competitive obstacles. It is time to reach for the brass rings.

Carpe Diem.

Angels in the Canadian Government

June 16th, 2009 2 comments

There just isn’t that much free money out there. In most instances, if you can find someone who wants to invest in your venture, you’re going to have to give up a healthy chunk of ownership in exchange; not a pretty deal if you truly believe that your venture will succeed.

The Canadian Government (bless them) has an excellent program for individuals like me who want to throw their sweat equity into the venture, and do not want to be drained emotionally by thoughts of missing rent/mortgage payments, and not being able to provide milk to your kids!

This gem of a programme is the HRDSC ‘self employment’ program. You can read more about it HRSDC site and the Canadian Small Business site.

There are a couple of very compelling aspects to this programme

  • You receive feedback from expert evaluators. This is the same process you would need to go through with a VC or with the more careful angels, without the disadvantage of dealing with their neurosis and negotiation+posturing games.
  • The money is given in the form of a grant. This means that you do not need to give it back. Compared to the 22% interest rate from a BDC loan, this is incredibly better.
  • You are provided mentorship and are given access to resources that can help you fill in the gaps in your knowledge.
  • Any money you make can be reinvested in the business without having taxes taken out.

What makes this program so outstanding is the level of support provided. Participants not only get help in creating a business plan for a viable business, but receive income support while they do it – for up to a year (or up to 78 weeks for a person with a disability). You have to be Employment Insurance eligible to apply, so getting a layoff notice is probably one of the best things that could happen to you, eh?

If you consider this program, the existence of CRA SR&ED, the OCE First Job Programme, and the MITAC ACCELERATE programme, I’d say that Canada has provided more than sufficient support for individuals who want to create a high-technology startup.


Startup Challenges: Founder Feels Like a Slacker!

June 11th, 2009 No comments

A product based startup is quite different from either consultancy or full-time employment, especially at the very beginning. I’m fortunate that I’m not starting this venture (more on this later) alone, and have an excellent partner. He bring years of experience in technology sales and really has an admirable attention to details, and is really good at the aspects of the business that I find uninteresting (like how to make money!).

Anyways, the key difference lies in where the buck stops and who sets the strategy. As an entrepreneur, both of these functions are the domain of the person you see in the mirror. The second day of this venture, I got that queasy feeling in my stomach that I have not experienced since my PhD days.. and yes, doctoral research exercises many of the same muscles as entrepreneurship, you never feel like you’ve done enough, you have lofty targets and absolutely no resources, and if you take a months vacation, the world ends.

The two tactics that got me through my PhD will hopefully serve me well in this new venture, which is to identify and reduce risk as early as possible, and to differentiates between setting yourself a ton of tasks, and the actual objectives that you have to attain. Get to those objectives by the easiest and most reliable path possible, and ruthlessly eliminate ‘busy’ tasks that are nice-to-have, but do not have an attractive return on effort.

In doctoral research, the ultimate risk is lack of clarity, and I am quite proud of how I dealt with that. I managed to identify the topic that I wanted to address within three months of joining the programme, and had completed the core research for my degree within 19 months of the start of my PhD. In terms of objectives, I very quickly evaluated and discarded technique after technique and data set after data set before I arrived at the ones that I was happy with. I always kept a ‘live’ plan with me on what I was getting to, and on days when I was not motivated, and felt lost, I cracked open the doc, and very quickly found something to work on that tickled my fancy.

However, not for a single day did I actually feel that I was performing at full capacity. Despite my phenomenal speed, and rapid progress, every day I felt like a slacker. I’ve started experiencing the same feelings again. If I look objectively at my accomplishments over the past few days they are quite good; I have identified 6 technical targets, each of which will either evolve into a service, improve the performance considerably of these services, or is an essential requirement for the business. Of these, three are potentially very patentable, and two can form a very valuable proprietary data/rule-set.

I have validated my ideas through key people in my network, and instead of pooh-poohing them, I’ve had offers of support and more than one half-joking question about stocks that I may have for sale. I have also accepted an offer from someone I respect technically to work for the first three months for this project essentially for free.  Separately someone else has volunteered to carry out their final thesis research on the marketing/product development aspects of our venture. Of course, their contributions will not be forgotten, and both these individuals will become important members of the team going forward, if they so wish. Everything looks great, but I still feel like a slacker… perhaps it has to do with being at home surrounded by family and familiar comforts. No one can actually be having this much fun and be working, can they? .. or maybe, it is because there is no structure imposed on me, and I can work whenever I feel like it, and there do happen to be 24 hours a day, and 7 days a week, all ‘excess’ capacity waiting to be utilized!