TechShup

Economy of Abundance Vs. Economy of Scarcity

Matt Asay visited the SAP campus today and had a good number of SAP employees attend his presentation. For the folks who don't know Matt, he is the General Manager of the Americas for Alfresco, one of the leading open source Enterprise Content Management solution. Prior to Alfresco, Matt was a founding member of Novell's Linux Business Office, founded the Open Source Business Conference, and ran embedded Linux vendor Lineo's Network & Communications division. Matt earned a JD from Stanford Law School, where he studied open-source software licensing under Larry Lessig, his thesis advisor. He serves on the board of the Open Source Initiative (OSI) and is an advisor to SugarCRM, MuleSource, Loopfuse, Openbravo, JasperSoft, Volantis, and other open-source companies. Matt writes CNET¹s open source blog. Matt was recently named one of the top open source business leaders for 2008 (LinuxWorld).

The basic message in Matt's presentation was that the last century saw the rise of scarcity-based business models for software, as the software industry sought to replicate the tangible world of "real property" in an intangible, online world of digital property. The new model on the other hand is based on Abundance and a Non-Zero Sum game.

So, in short, the equation is Old Economy vs New Economy which equals two models against each other, Scarcity vs Abundance. In the Old Economy, Money was made by creating a product and assuming its scarcity by controlling its access. The New Model is where the value is going to be driven from Abundance as opposed to Scarcity.

Google, Red Hat, and others have shown, that the new models going forward aren't based on scarcity, but rather around abundance. The future belongs to those companies who can figure out ways to make money from the abundance that free software provides. Google is changing the game where they are making all their softwares and services are available for free.

Matt cited Red hat as another Google like example where they succeed while giving away their software where Redhat charges for certified version of their software, patches and service packs.

On the other hand Matt pointed to Facebook as an example of how not to take advantage of the Economy of Abundance. Facebook fails to get the trust factor where you don't know if your friends are really your friends. Facebook as a community has the same problem as E-bay where trust is an issue. Matt pointed out that a model such as that of a Craigslist is more useful where trust is key and allows the community to develop. Facebook created abundance but trust is where it fails.

While talking about Opensource, Matt pointed out the usual model that is used by Opensource which is the model of software for free and cash for support is useful and will have to be adopted in its current form or some changed shape by big size companies.

A very important point he made was about Charging for proprietry extensions that are delivered to TARGETED Customers and not at random. This was a very important point and is worth considering further. Matt pointed out in response to a question from the audience, that Adoption led market or Adoption led Economy is the way to go instead of expensive sales and marketing focus on early adoption through traditional sales model.

The Abundant adoption however has certain demands where for instance,

1. Building exceptional software is much more of a priority.

2. Modularity is important.

3. Great initial code base and an open and transparent Governance structure for the code is going to be paramount.

4. The more open the code is the more successful it can be.

5. Documentation for code has to be rock solid

A very interesting discussion on Open Source with very vibrant questions about the base and customers of Opensource.

Presentation on Second Life: A Consumer Virtual World

Date:                Wednesday, March 5, 2008

Time:               1:00 PM – 2:00 PM

Location:            3410 Hillview Dr. Palo Alto, CA

Speakers:         Glenn Fisher, Director of Business Programs, Linden Lab

Second Life has received a lot of visibility as a consumer virtual world.  Many businesses are starting to explore how they can use virtual worlds to complement internal business processes or to interact with customers.  Second Life provides a unique mixture of virtual presence, easy access to content creation tools, a vibrant economy and a flexible platform for creating interactive experiences.  We'll look at some of the ways businesses are using Second Life for internal purposes, including meetings, training, simulations, and prototyping.  We'll also see how Second Life facilitates interaction with customers through focus groups and recruiting.

Glenn Fisher is the Director of Business Programs at Linden Lab.  He joined Linden Lab in July 2006 to build a Solution Provider program, which has grown to over 200 companies with over US$70M in revenue developing Second Life content and experiences.  He is currently working on programs to support businesses and International communities entering Second Life.

Prior to Linden Lab, Glenn managed the developer program at Tellme Networks and Openwave.  At Apple Computer, Glenn made performance part of Apple's product development and marketing, launched and marketed Apple's internet suite, was responsible for subscriber acquisition for Apple's online service (eWorld) and developed an education training program.

This should be an interesting talk to attend. If you are not an SAP employee but are employed at one of the SAP Partners in Co-Innovation Labs, you can attend this event for free. For more questions, please email anne.marie.youhana@sap.com

A Professor from MIT defends Pakistan in a Pakistani gathering at OPEN

It was a surreal sight. Not something you see everyday.

But there it was. A sitting that included about 50 Pakistani Entreprenuers at SAP listening to a Professor from MIT defend Pakistan as a viable entity worthy of consideration when it came to business investment. The questions about Pakistan's viability came from the Pakistanis who in all probability lived in Pakistan for a major part of their lives.

The setting was the all too familiar SAP Cafeteria where this past Friday, Prof. Kenneth Morse, Managing Director at The Entreprenuers' Center at MIT was the guest of honor. He started out talking about Pakistan and business opportunities in Pakistan in a more personal setting with myself, Abdul Rehman (Colleague from OPEN) and Mahira Kalim (A Colleague at SAP). He was very vigorous in the conversations and seemed to have fairly ready answers to our questions which made clear to me that he is all too familiar with them, probably from having heard them before. He was very forthright about his ideas with respect to Pakistanis and Americans skeptical about Pakistan and its prospects. He described them as "CNN Babies" and advised against going after that demographic. In his opinion, it was more beneficial for concerned Pakistanis in the US and elsewhere to converse and exchange ideas with people who are serious about Business Opportunities and who have the real business needs, aspirations and visions to see past a few burning tires in a back alley of Karachi a few days in a year. He indicated that he had been to Pakistan about 7 times in the past 16 months and the last trip was during the time emergancy was declared by the Musharraf government. He repeated that during his presentation and honestly speaking that fact alone got everyone listening intently to his ideas and not color them with the idealism of a business anamoly: An Optimist.

An important fact that was mentioned early on in the presentation was the fact that Pakistani professionals while technically adept, understandably lack the skills needed to sell. This is due to several reasons such as societel norms where selling is not considered a high value skill and where Universities do not focus on honing the competitive skills needed for selling successfully.

Ken focused on primarily High Tech and Higly Rational (Non-Impulse Purchase Selling) selling process. He emphasized the importance of relationship with the customer where the customer's believe that their needs, their situation, their vision, corporate and career goals are understood and shared by the involved sales person (Direct Quote from Ken's presentation). The sales person should be more than a Sales professional; He should be a trusted advisor. Ken also covered topics such as developing a Sales Force and keeping them involved and motivated.

He also talked about Pakistan and the Business Opportunities. Unfortunately, he had few if any kind words for any of the Pakistani Politicians. He reserved his most severe words for Late Benazir Bhutto and her husband who is currently heading the Pakistan Peoples' Party. He was very clear that an image of a corrupt nation is more dangerous for Pakistan than that of a country torn by terrorism and political unrest. He pointed out the two facets of lawmaking that Pakistan can only ignore at her own peril. One was with regards to Intellectual property protection and the other is with respect to rooting out corruption.

Ken was very interactive and involved everyone in the crowd with his witty responses and to the point and at times rhetorical questions. He was extremely animated when answering most specific questions about several different aspects of selling. Ken was thankful to OPEN and SAP for their help in putting this together. To read more about OPEN and MIT partnership please go to: OPEN and MIT Entreprenuer Center

To find out more about the Entreprenuer Center at MIT goto: Entreprenuer Center at MIT

Making of a Social Entrepenuer - Azim Premji

SAP hosted Azim Premji, eminent Businessman and Philanthropist at the Palo Alto Campus this past Friday (Feb 01 2008). He was very kind and generous in keeping his speech short, recognising that the overcrowded cafeteria in the main Bldg was dying to interact with him. He enunciated some simple truths about leadership and was very modest in explaining his success.

Some of the revealing truths about his leadership style that he mentioned were. :

1. The day one's curiosity dies, the person dies with it. Keep asking questions. You cannot do yourself harm by asking questions.

I am not sure about this one since I have actually seen people getting harmed when they asked more questions than they perhaps should have.

2. Listen to your customers. There are hints in their behaviour, body language, the words they choose and their tone. That is the best form of feedback that can be expected. They will never tell you everything you need to know but they give themselves away when you pay attention to details such as the few mentioned above.

3. Continuously challenge yourself. Do not stagnate.

4. Organizations should value their stock performers. Companies perform on the strength of the 80% of the employees who meet their objectives and not necessarily only on the strength of the 10% who exceed their goals.

This was an interesting thought. He added that in his opinion, the Top 10% is too volatile and an ideal employee consistently performs, even if he consistently only meets his objectives without ever or rarely exceeding it.

Azim Premji described his journey from being a Business Entrepenuer to an Entrepenuer with a social agenda. His foundation is making huge contributions for Education at all levels. He attributed his success to keeping a very low profile and assigning credit for the good work to the politicians and administration in the area of operation.

The Q&A session lasted for a good 45 minutes. There were all sorts of questions on his business experience, the charity work that he has involved himself in etc. He was very polite and made a genuine effort at ensuring a response to all. In fact, towards the end, when Zia Yousuf, the SAP Executive hosting Premji, indicated that he wanted final questions for the hour, Premji indicated that he would be happy to continue if there were more questions.

Some of the questions that stuck with me were about Microfinance schemes in India, Premji's secret recipe for success in Business and Philanthropy, Current trends with the Economy and his thoughts on consolidation in the market.

He offered a nugget with regards to Microfinance schemes in India where he pointed out that there is a social change that is taking place in India. Due to the nature of Microfinancing schemes where women are prefered over men for loans, women are being empowered. They are getting a new voice in the household and their communities, as they share breadwinning capabilities and become Entrepenuers in their own right.

He was very modest in pointing out that his success is due to the fact that he was at the right place at the right time. This reminded me of a passage from Bernard Shaw's speech, about the reverance we hold for the apparent instigator whenever there is a firestorm of any kind that changes our environment. I did not agree with Shaw then and I don't quite see eye to eye with Premji now.

He also indicated that he expects more consolidation in the market and expressed his surprise on why it has taken companies in India as long as it has apparently to start consolidating.

Something that probably took people by surprise was the short and simple answer provided by Premji when asked about what he regretted in life the most. He simply replied by saying that he did not spend enough time with his family.

In the end, a very candid conversation with a very humble person made the evening very memorable for the entire group.

Future of RFID: According to John Williams

SAP campus receives plenty of dignitaries, distinguished scholars and scientists, around the year, who get their brains picked by SAP employees as well as SAP partners, thanks to the Co-Innovation Labs located at the SAP campus. This past Tuesday (22nd of Jan), there was a special presentation by John Williams, Director of the Auto-ID Lab at Massachusetts Institute if Technology (MIT). He was recently named, alongside Bill Gates and Larry Ellison, as one of the 50 most powerful people in Computer Networks. He is involved in a number of other projects for industry, including developing a supply chain simulator for SAP and researching RFID in the home for Microsoft.

The presentation was about the future, when the Internet of Things becomes reality, serialized data (typically RFID and/or barcode, based on EPCglobal, DOD/UID and other standards) can potentially be stored in millions of data repositories world-wide. In fact, large data volumes of serialized information may be coming soon, as the global healthcare industry moves towards deploying anti-counterfeiting standards as soon as 2009. Those data will be sent to enterprise applications through the EPC Network Infrastructure. The data volume, message volume, communication and applications with EPC Network Infrastructure will raise challenges to the scalability, security, extensibility and communication of current IT Infrastructure.

The potential there is enormous. Apparently, for instance, If 1/3rd of all cells phones incorporate RFID it would create  800 million users since there are just about 2.5 Billion Cell Phones in use around the world today. Here is what it would look like. Any item, no matter how small or insignificant would be trackable and at no additional cost. So basically this is tracking at a flat rate. Both Tracking and positioning of assetts and products is a huge deal. RFID in this changed form could work wonders to help that.

As opposed to the HF (High Frequency) that NFC works with today, there is now an UHF (Ultra High Frequency) that amenitizes the inconvenient.

Currently there is also a CVS Authentication (Code Verification System) which is being used by
Phillip Morris to track their cigarette packs in order to ensure that they don't end up in the wrong place and remain in the market that was intended for them. I did not know this but apparently there is a huge market for this because of the counterfeiting that goes on. According to John's data Counterfeiters are the third largest producers of cigarettes in the world.

Here is the very interesting bit among all the interesting ones:

MIT Research did some simulation for how much data is being managed by a registry on an hourly
or daily basis.

Here is what they found out:
The data transfer was about 772 GB to the registry every day.
That is about 9 MB/sec as far as bandwidth is concerned.

That blew me away! Maybe I don't have the perspective for huge amounts of data but that was way too much for me. And this is limited simulation. Can you possibly imagine what it would be like to track each and every piece of product that gets manufactured today.

John then switched over to talk about Concurrency and Coordination Runtime technique (CCR) that came from Microsoft and was created to counter the problems of debugging Distributed Computing. This is being used in a simulator which has been used to analyze the movement of around 20 million items per day through the healthcare supply chain. This simulator is a result of joint research b/w MIT and SAP.

The Idea with CCR (port based) is that the port is an abstraction, its not real.

As the Port is activated by data it runs on its own thread. More than 7 million ports can be handled on a simple dell 620 notebook. That is because this port is very lightweight. It does not consume CPU unless there is data and total weight is no more than 175 bytes.

John also talked about the Pedigree document as well which is the information containing document that has Data about the product as it goes through the supply chain with an RFID. It is this document that is set to have a facelift done with various strategies for e-Pedigree and the simulator discussed above. 

All in all, a very enlightening session with bundles of good information. I spoke with John after the presentation and he seemed like an eager soul ready to connect. It is very gratifying to meet someone who gets so passionate about exciting stuff: IDEAS.

Interesting Breakfast

I had a chance to meet Mahmood Panjwani, founder of iManage that later on merged with Interwoven. He is currently the Chairman and CEO of Infinisim which is a start up, apparently in stealth mode. Mahmood is a truly Global CEO, living both in Dubai and Silicon Valley (He is in the Bay Area once a month).

The session was a small and an intimate gathering at SUN campus here in Menlo Park. Mahmood started out talking about his early life and education, his days in Chicago and early jobs in the Tech industry. He artfully conveyed some very important lessons about life in general as well as elaborating on the part of it spent on professional pursuits.

One thing he insisted on when talking about Start ups and people aspiring to start their own companies, was picking a vertical. He argued that one increases the chances for success with a strategy based on or heavily involving a selected and focused vertical. He cited examples of his own start up venture and other ventures that he has come across as examples. He also shared some good stories of the Bay Area in the late 90s and just before and after the "Big Crash".

He made some interesting recommendations when it came to business books he found useful, including "Crossing the Chasm" and for people interested in business in Dubai, "From Sand to Silicon"

During Q&A he related the stories of old Dubai and regaled the small audience with interesting everyday stories from the streets of Dubai.

He openly admitted that Dubai lacks the innovating drive and spirit that is part and parcel of the Bay Area, however there are advances being made to bridge that and other gaps in existance today.

All in all a very good learning experience for the small audience that made it there. Dubai will always be an interesting prospect for people here in the Bay Area. There is plenty of attraction for the Desi (Indian/Pakistani) crowd since it is geographically as close to home as can be without being home.

Mahmood is a frequent visitor to the Bay Area and his contact information is as below:

US Cell: 1-650-440-9055
Dubai Cell: 971-50-376-8529
mmpanjwani@gmail.com

A very successful person and yet a humble soul.

Vertical Search Engines Anyone?

One of the marketing tools available to startups and new companies is to have themselves listed on Google and other broad based search engines with effective searchable strategies developed in concert with these search engines, such as buying keywords from Google etc. While Google is holding its own with continuous improvement in their search mechanism to ensure that increasing broad base of available information does not result in a deluge of unrelated information, there is still a need for Vertical Search Engines for business needs that may require information gathering on very specific space oriented concerns and topics. There is now an increasing number of these engines. Below are some that I have visited recently:

IT.com: This was interesting. Not only do they have search capabilities that slice through most riff raff, they also present the flexibility of News about the industry/product/service as well as webcast, reviews and white papers that one might spend hours trying to find through Google or any other search engine. They also have an optimized search engine concentrating on products and services for SMB (Small and Medium Business) market. It provides popular searches as well such as hunt for storage software etc. Very useful and worth bookmarking.

Verticalsearch.com: The site took a bit to load but the information was relevant in most search instances that I worked with and the extra kicker here is that this is progressive search. If you don't exactly know what you are looking for but have a general idea yet you don't want to be lost in the results from the broad based search engines, you can start with a generic label search in the specific industry and get some useful results. I felt that the results were far too numerous though on occasions when I tried it. Also the site seems to be slower than some of the other websites. Useful and worth a visit if you wish to get started and get a better idea of what you want to look for in terms of information with the added bonus of the possibility of hitting the nail in the head.

FindLaw.com: This is another one. I was more familiar with Lawyers.com but FindLaw.com has a SMB section as well. They have forms for incorporation and other SMB related material that I thought was useful. Good site to have access to in times of legal needs.

Please include any other useful search engines that may serve SMB, startups and Tech professionals in your comments.

Usage of Customer Data

Here is something alarming:

Gartner group noted that while 95 percent of companies collect customer feedback, only 50 perent of these companies shared the information with their staff. I will let you digest that!!

Get ready for more:

Only 30 percent made use of the information and 1/10th of those made changes as a result of the information. Only half of the 1/10 actually turned around and credited the customer out loud where the customer may have been made aware that the change was due to their feedback.  (Information Source: SDForum News Vol 10. Issue 4). Pepto... anyone ?!

Heck! No wonder people are so weary of taking surveys and answering feedback questions. They know nothing changes because of what they say. If I am reading this correctly, only 3 percent of the companies, all of whom are so "keen" to hear from me and you, actually put into their best practices what they appear to be hungry for and feed on: Customer Feedback. On top of that only half of them actually could be credited by the person who took the trouble to fill out the survey to have made the change suggested by him/her. Isn't that a little out of shape??

Among startups, it actually gets worse. Startups are by nature, always on the look out for "New" customers. Building the portfolio of customers is much more important as it effects the bottom line and so it makes sense to look beyond what may be considered a "Closed" customer. Here is food for thought though: What are the sources of "New" customers? More often than not, New customers come by because of referrals from "Closed" customers. The question to ask is whether Penetration to Closing is equally as important as Closing to Retention. Hint: The answer begins with the letter "Y"

The marketing budgets for some of the startups tend to be very lopsided in favor of the Marketing effort.

Would it be a good idea to identify and invest in Account or Customer Retention?

It would appear so.

These days survey or feedback mechanism is set up by default within the product or Customer Relationship Management System. However, if a company feels that they are not going to be able to utilize the feedback effectively there remains very little to argue for putting such a system in place. The argument that any such utility or feedback point provides the customer with at least a soap box to vent their frustrations does not have merit considering the primary objective: "To serve the Customer".

Palo Alto + Coffee at Uni + Cigars = Big Idea

When a meaningful company and a favorable milieu come together, the outocme is usually inspirational. I would like to credit everything that is to follow on the very appropriate and occasional yet unusual bout of wanting to do something about an idea shared between comrades. My fellow soldier will be Kashif Aziz and he will be contributing from Karachi, Pakistan offering Tech-related News and Analysis. He will be writing his own introduction here shortly.

The idea: To write about experiences in the Tech Industry, past and present, and share the environment with everyone interested in the pulse of Hi-Tech.

Location: Silicon Valley. Enough Said.

Watch out for News & Analysis from the Center of the Tech Universe, mixed with some Pakistani Spices here.