Israeli startup Pronto.ly is working on a universal alternative to NFC that relies on high pitched soundwaves to perform a contactless handshake.
Now NFC has its fans (and fanboys) — but it also has major detractors. Apple for one has so far continued to eschew adding the contactless transfer tech into its mobile devices.
But the fact you need a dedicated chip at all to fire this contactless medium up is arguably the problem. NFC’s requirement of needing a large enough user-base to make the tech useful has generally hampered adoption of both chips and NFC-enabled services, such as contactless payments, since there’s no critical mass of users to generate significant momentum.
Which is where Pronto.ly’s alternative aims to step in. The startup is building a technology based on using ultrasound as the contactless layer. It thus only requires devices to have a microphone and speakers to make use of the tech. In other words: no NFC chip required.
The system does not send the actual data a user wants to transfer via this sonic medium, but uses ultrasound to identify and authenticate a transfer device (or devices) so that a verified exchange can then take place in the cloud.
“The Prontoly solution leverages preexisting device hardware, namely standard microphone and speaker. With that we employ a timebase onetime password (TOTP) handshake between devices on the client level which is then correlated via our authentication server,” explains co-founder and CEO Nick Pappo.
“These TOTPs are the only thing exchanged over the ultrasonic sound wavelength (encrypted of course), no identifying or transaction data is ever transmitted via this medium. Once we have authenticated a transaction request between devices we push to clearance via the application selected processor.”
Pronto.ly has filed patents around filtering its ultrasound signal pattern out of background noise so it can function in noisy environments. Having a unique ultrasound pattern as its signal also means it can avoid potential clashes with — or interference from — other radio technologies, says Pappo. And even other ultrasound techs (which are, in any case, not yet in common use in the consumer electronics tech space).
That said, Pronto.ly is not the only company looking at this technology. At Google I/O earlier this summer Mountain View revealed it’s working on an ultrasound ID tech for its Chromecast device — which will allow multiple mobile users to sling stuff to the same TV screen via Chromecast without having to log onto a Wi-Fi network.
That’s a neat looking use-case for sure, but Google is — currently at least — focused on one device and one use-case (logins). Whereas Pronto.ly’s system aims to be cross platform and device agnostic — so will be able to work with Android, iOS, Windows… whatever, assuming the device in question has a microphone and speaker.
It’s also targeting multiple applications for the tech — aiming to support whatever implementations and use-cases its b2b customers want to use its contactless identification/authentication layer for. Pronto.ly offers access to its tech via an SDK.
“Comparing what we have and (what we know about) Google latest announcements regarding Ultrasonic, they are concentrating on Login. For us Login is just another use case of many: Payment, Point of Sale, Smart TV, Access points. In each one of those and others, we have on going activities,” says Pappo.
Another advantage (vs NFC) is that ultrasound also doesn’t require proximity to function. The Pronto.ly tech can be tuned to work only in close proximity, but can also function over longer ranges. “One example of a technical challenge we overcame was the issue of proximity tuning,” adds Pappo. “We have some customers who require 20cm range and some with 5m range.”
Plus, unlike NFC, it can be used to broadcast a signal to multiple devices — as in a Chromecast-esque smart TV scenario.
Pappo says he has been working on developing the technology since 2012, founding the company itself back in April 2013 — helped by the proceeds from a prior startup exit.
Pronto.ly itself has raised some $600,000 so far, in pre-seed and seed funding, with investment coming from angels including Jeff Pulver, and seed funding from the hiCenter incubator and the Chief Scientist of Israel.
The startup in the process of raising a Series A, with the aim of closing the round by the end of the year, according to Pappo.
At present, Pronto.ly has multiple customers trialling the technology for different use-cases. While it’s not naming these customers yet, it says they include an Israeli bank wanting to use it for a contactless ATM for cash withdrawals; an Israeli card issuer aiming to use it for SME P2P payments (similar to a mobile payment dongle but without any dongle being required); a European bank wanting to offer a contactless ecommerce checkout process; and a wireless charging company wanting to do subscriber authentication using ultrasound.
Pappo adds that he expects the first in the wild deployment of the tech “within weeks”, via a device maker. Other deployments should surface in the wild in Q3 and Q4 this year, he adds.
In terms of business model, Pronto.ly is targeting payment scenarios for b2b monetization — working with large banks and the like — and aiming to take a flat fee per payment transaction processed via its tech.
“We will work with financial institutes and credit card issuers, working on really customized use-cases with them,” says Pappo. “We want to have at least ten big financial customers like that in one year.”
It also intends to monetize its SDK via a freemium model, so that developers can integrate it for free but have to start paying per user, after a certain usage threshold is reached.[Image by Tess Watson via Flickr]
There’s a battle brewing again in the land of the geeks.
Ever since 1994, when Robert Stephens launched his Geek Squad service in Minneapolis with $200 and a bicycle, his on demand IT department for consumers bestrode the consumer tech services landscape like a colossus with a pocket protector and Scotch-Taped glasses.
But like all wonders of the ancient world, the Geek Squad faces a modern threat. Geekatoo, the company that launched in 2011 to vanquish the Geek Squad is once again looking to emulate the work of tide and time and topple the colossal cohort Stephens assembled. This time it has raised $1.7 million in venture funding from investors including 500 Startups .
Founded by Kevin Davis, Geekatoo’s story actually begins nine years earlier with a visit to the local Best Buy Geek Squad, when a repair that was supposed to take one or two weeks resulted in a nearly lost laptop and a six-week separation.
Thinking there must be a more customer-friendly way to deal with computer issues, Davis and his co-founder Christian Shelton set about creating a service that would mimic TaskRabbit, Zaarly, or RedBeacon for computer problems exclusively (and considering Geek Squad pulled in upwards of $3.5 billion last year, it wasn’t a terrible idea).
Initially, Geekatoo had a sort of bounty model, where panicked customers with broken computers would post their problem to the Geekatoo site, and a local geek(atoo?) would bid their services and the poor frantic soul with the busted gadget would select whichever bid looked the best. Unfortunately… the model proved untenable. Davis says the company had only 50 customers in its first three years.
After 500 Startups put the company through its paces last summer, Davis switched the model to a fixed price for the service and the business began to take off, he says. Growth was impressive enough to catch the eye of not just 500 Startups, but a host of other institutions and individuals including 500 Startups, Eric Ries, DeNA, China Rock, Microventures, and Wefunder.
“If you buy a service contract, that’s what we’re selling,” says Davis. From roughly 50 customers at the beginning of last summer, Geekatoo is now looking at a $2 million run rate and some bigger business partnerships.
While they cradle their dying device in their arms, would-be customers can contact Geekatoo via a toll-free number or the company’s website. Once they relate the nature of their emergency, Geekatoo finds a geek and sends them out. Typically response rates for jobs mean that 60% of jobs are claimed within an hour, and over 90% are claimed within 24 hours, according to Davis.
Geekatoo has grown quickly as an independent business, but now it’s time to start looking for partners, according to Davis. The synergy that Geek Squad has with Best Buy is exactly the kind of relationship that Geekatoo is looking to mirror with its own business — just online. “Tiger Direct, Amazon, Buy.com… We want to go to them and say ‘We’ll be your Geek Squad,’” says Davis.
The company has a few partners already. Geekatoo is in a pilot program with a nationwide network of senior communities and is in talks with an undisclosed computer manufacturer to include its Windows 8 app directly into new devices.
For each transaction Geekatoo has it typically gets about $140 with roughly 1.2 services ordered. The company spends about $20 to get a user and makes roughly $35 to $40 per transaction, with the rest going to the service provider, Davis says.
Services range from PC and Mac repair to home theater setup to mounting televisions and setting up networks. “We do everything that Geek Squad does,” says Davis. “Just better, cheaper, and faster.”
The company even has Geek Squad’s founder recommending it.
(IMAGE HAS BEEN MODIFIED)
See the original post here: Geek Wars Loom As Geekatoo Raises $1.7 Million To Once Again Battle The Geek Squad
Driverless cars may be six months or so from being trialled on the UK’s streets but the European Union has today outlined plans for self-parking and retrieving cars, designed to save you time at the lot.
The V-Charge system is receiving €5.6m (around $7.5m) in funding and has already been developed by researchers from Germany, Italy, the UK and Switzerland and early tests took part at Stuttgart airport earlier this year.
“There are only a few minutes before your flight check-in closes, or before your train departs, but you now have to spend precious time hunting for a free space at the airport or station car park. Imagine leaving your vehicle at the main entrance and letting the car do the rest on its own,” the EU said.
In order to trigger this process, the driver can use the connected smartphone app to connect their car with the car park’s central server and drive itself to an appropriate space. It’s the same deal for returning the car too; simply stand out the front, hit a button and out comes your fully charged electric car ready to go. As GPS isn’t always reliable inside garages, the team has also had to develop a camera-based system for avoiding unexpected obstacles.
That’s the theory for controlled indoors spaces anyway, taking it to the streets could prove a trickier challenge. “That will be more of a challenge”, Dr Paul Furgale said. “But once you have the maps in place, the rest of the technology will come together.”
The study is due to conclude next year, after which we will see “its results available to be progressively commercialised in the coming years,” the EU said.
Featured Image Credit – Shutterstock
See the original post here: Europe wants your car to park and retrieve itself at the lot
Holiday attractions booking startup, GetYourGuide, has taken in another chunk of outside investment — announcing today that it’s closed a $25 million Series B round, led by prior investors Spark Capital and Highland Capital Partners.
GetYourGuide said its new funding will be used for accelerating growth into new markets, and to support its mobile development focus.
The Berlin-based holiday tour booking startup raised a $14 million Series A round in January last year, and subsequently took in a further $4.5 million in a Series A expansion funding this January — following on from a $2 million seed in 2012, and $500,000 in pre-seed funding raised back in 2009. All of which take’s GetYourGuide’s total funding to around $46 million over five years.
Its focus generally over the past year+ has been on internationalizing its content and growing on mobile. GetYourGuide launched its first mobile apps last October, and CEO Johannes Reck tells TechCrunch the proportion of bookings on mobile vs web is now round 60:40 — and “changing fast”.
Back in January 2013 it was only taking in around 10% of bookings on mobile.
This business is not technological rocket science, but offers obvious convenience for users — with an easy way to search for and book holiday tours and attractions to save on queuing on the day. It has also evidently benefitted from good timing — riding the shift from traditional holiday bookings being made in person at the destination, to more pre-planning and booking being done online and now more spontaneous booking enabled by mobile devices again. GetYourGuide pegs the global market for travel activities at $100 billion annually, with Europe accounting for half the market.
According to Reck, GetYourGuide now has some 25,000 active users on its platform. On the content side, GetYourGuide has partnered with more than 25,000 activities in more than 2,400 destinations worldwide to flesh out what people can find to do on its platform.
Asked about its strongest markets so far, Reck said: “All European markets are growing like a weed. US still continues to be our second biggest market and growing strongly, particularly on mobile.”
He declined to name the markets where GetYourGuide will be expanding into, fueled by its new funding injection, but described its expansion plan as “a landgrab”.
Commenting on the funding in a statement, Spark Capital General Partner Alex Finkelstein, added: “We’ve been extremely impressed with their growth curve over the last year, and we have decided to double down our investment with another $25 million.”
RockYou, once known as a leading social games developer before hitting rough times and making multiple rounds of layoffs, has recently become focused on buying up existing web, social, and mobile games.
Today, the company is announcing that it has raised $10 million in debt from FastPay (a firm that makes loans to digital media companies) to continue funding those efforts.
RockYou’s current model involves finding games that are, as CEO Lisa Marino explained via email, “past their prime” but still have an audience. It then buys those games, keeps them running, and monetizes them through a mix of advertising (particularly video ads) and virtual goods. (In some cases, it works as an ad partner for publishers without buying the games outright.)
“No one is taking the bet we are right now,” Marino said. “The mentality today is that gaming is a hit-driven business, which I talked about in a blog post here. But what we’re doing is taking games past their prime and managing and monetizing them through their lifecycle for years to come.”
She added that RockYou doesn’t have “a single game in development.”
The company says it has made 12 acquisitions, including Words of Wonder, Gardens of Time and City Girl, from publishers such as Disney Interactive and 50 Cubes. As a result, it says it has a user base of 75 million players and has grown revenue 250 percent year-over-year.
Those acquisitions have mostly been funded by RockYou’s cashflow and debt from FastPay, Marino said. Apparently the company also raised “a very small round in March” (a regulatory filing says it was about $3.3 million), and Marino added that the company could raise another equity round later this year or in 2015: “It really depends on how we view the deal landscape.”
Here is the original post: RockYou Raises $10M In Debt As It Shifts To Buying And Monetizing Existing Games
Editor’s note: Peter Yared is the Founder & CTO of Sapho and was formerly the CTO/CIO of CBS Interactive.
Jill Lepore genereated quite a fracas in Silicon Valley with her New Yorker article that questions disruptive innovation and posits that large incumbent companies often survive and subsume disruptive technology with small incremental gains. Fortunately, we have a live Petri dish: BMW’s new electric i3 is an ongoing case study of a legacy manufacturer facing an innovator’s dilemma in the face of Tesla, a very aggressive new competitor with next-generation technology.
Elon Musk has defined the standard for a future mass-produced electric car – it must cost around $40,000, have a range of 200 miles, and be comparable to a BMW 3 series. In order to achieve that audacious goal, Tesla is embarking on a plan to build a “Gigafactory” capable of producing batteries at an efficient and lower cost that would make such a dream car feasible. Investors are betting that Tesla will be able to dominate the electric car market when it achieves scale, continuing a growth rate that values Tesla at $28 billion even though it only produces 35,000 vehicles a year. It is interesting that Musk directly compared the Tesla’s upcoming mass market Model 3 directly to the BMW 3 series, given that BMW is now delivering its new i3 to the US market in accessible volumes.
There are lots of great lessons for entrepreneurs to learn from watching the BMW versus Tesla battle since cars are so tangible and manufacturer sales tactics are so transparent.
Even though it has a “3” in its name, the i3 is decidedly not a 3 series BMW. It is two feet shorter, and should instead be in the BMW 1 series product family. The i3’s electric range of 80-100 miles makes it more similar to electric cars like the Nissan Leaf and the Chevrolet Volt and nowhere close to a technological wonder like the Tesla Model S.
Despite its limitations, the i3 is clearly resonating, with rave reviews and a price that is spiking over the last month on TrueCar, indicating high initial demand in the United States. BMW has (mis)used the power of the 3 series brand to its benefit, and can now add features like longer length and range incrementally as battery technology improves.
Lesson: Legacy companies can mislabel their products to leverage their brand, especially if an upstart compares itself directly to a particular model.
|Tesla Model 3 (Estimated)||BMW i3||BMW 320|
|Range||~200 miles on electric||80-100 miles on electric, 185 miles with gas range extender(Total hack!)||380-576 miles on gas|
|0-60||N/A||7.2 seconds||7.1 seconds|
|Dimensions||~182” long x ~71” wide (Matching BMW 3 series)||157” long x 70” wide (Not even close to a 3 series!)||182” long x 71” wide|
BMW invested tremendous resources in its electric car platform to develop an all-electric vehicle platform, and it is willing to integrate legacy technology in order to deliver immediate value to its customers. Conversely, Mercedes chose a partnership route and is buying the drivetrain and battery technology for its upcoming electric car from Tesla. Both BMW and Mercedes are well ahead of Tesla in advanced vehicle technology like self-parking and cruise control that can automatically follow highway lanes and maintain distance from other vehicles.
Rather than waiting for battery technology to evolve to make an all-electric car with a 200-mile range at a mid-range price point, BMW is selling an optional “range extender” consisting of a two cylinder motorcycle engine that maintains the batteries at a 5 percent power level and extends the car’s range an additional 80 miles. Since the range extender powers the batteries rather than a gas engine, the i3 is not a hybrid, but the range extender can be continually refilled so that the car is never stuck without power. It’s a total hack, but is well thought out and competitive. BMW’s engineers must have been giggling when they came up with this one.
With the i3, BMW has delivered a “good enough” luxury electric car for the urban driver and average commuter, who can also optionally use the car for longer trips without having to plan for supercharger stations.
Lesson: Legacy companies are often willing to hodgepodge new technology with their older technology to stave off new competitors.
Tesla shipped its first car in 2006 and is expecting sell 35,000 Model S sedans in 2014, or roughly 17,500 units in the second half of 2014. BMW started selling i3’s in 2014 and sold 6,000 i3’s in the first half of the year, primarily in the European market, which now has 3 to 6 months waits for the car. Now that demand is spiking, BMW increased production to 20,000 units annually and is now producing 100 units a day, a run rate of over 30,000 units annually. The fact that a legacy manufacturer is on the verge of outselling Tesla in its own luxury electric segment in the first year of shipping is fascinating given Tesla’s superior product and years of market lead.
Lesson: Once legacy companies have hodgepodged technology, they can produce it at scale.
While Tesla is right in attempting to disrupt the antiquated dealership business model, BMW will be able to leverage its extensive dealer network to deliver to consumers worldwide, and consumers can use web services like TrueCar and Beepi to bypass the hassle of negotiating with dealers on the price of a new car and trade-in amount. BMW also has access to a deep well of financial incentives to drive consumers to buy cars. Auto manufacturers and their dealers are fighting Tesla with regulatory measures to slow the company down and limit market penetration.
Lesson: Innovators should not underestimate the power of a legacy company’s large, lumbering sales channel.
Tesla had to enter the market at the high-end in order to deliver batteries capable of long ranges at a margin that would deliver profits to fickle investors, years before it could deliver a mass market mid-range vehicle. BMW’s breadth enables it to enter at the mid-market and then move up into the ultra high-end next year in the U.S. with its i8 supercar. To BMW, the distinctive, urban-friendly i3 is essentially a rolling advertisement for BMW’s innovative and green future, so the company could even sell them at a loss and come out ahead.
Tesla’s high-end first approach could turn into a liability as the Tesla S is quite large and therefore not well suited for urban environments – it is wider than and almost as long as a 7 series BMW. Large, luxury four door sedans are typically purchased by upper middle class men over the age of 35 which, as a member of the demographic, I unfortunately have to admit we’re not exactly the most hip crowd. BMW examined the market thoroughly and is targeting hip, young, urban professionals with the i3’s forward design, a smaller urban-friendly size, and the brand’s proven appeal with a younger demographic.
Lesson: Legacy companies are often in numerous segments of a market and leverage their scale to beat an upstart’s roadmap.
The big question is what industry exactly are electric cars are disrupting? At first it seemed like the legacy auto manufacturers would not be able to step up to an electric car challenge. They have widely adopted hybrid electric cars, are now delivering somewhat competitive electric cars, and are continually experimenting with hydrogen fuel cells. From a broader view, it is possible that ExxonMobil and Chevron will be more disrupted by electric vehicles rather than BMW and Chevrolet.
Elon Musk is an entrepreneurial hero who is concurrently disrupting the passenger vehicle, space transportation and electric utility industries. Some of the legacy companies in those industries were bound to wake up at some point and respond aggressively. Fortunately, Musk can rest assured that the United Launch Alliance will not be as agile against SpaceX as BMW has been against Tesla!
Disclosure: The author is number 6,250 on the Tesla Model X waitlist.
Go here to read the rest: BMW Vs. Tesla: A Real Live Innovator’s Dilemma
Whether your business is focused on mobile gaming or travel, it’s essential that your organization continue to scale your advertising on mobile devices year over year.
This growth is critical to your business in order to outpace competitors, reach a larger audience, engage your customer base where they are most active and to increase your relevant messaging at different points in the purchase funnel.
This year alone, mobile ad spending is estimated to reach $31.45 billion, according to eMarketer. The time is now to start scaling your mobile advertising before your business is left in the past, far behind your competitors.
Here are four considerations for mobile ad buyers when trying to grow their advertising campaigns:
It’s a no-brainer that your budget is a huge part of scaling your mobile advertising, which is why it’s so important to begin positioning yourself (or your team) toward managing a larger budget on behalf of your company.
To begin to scale your mobile advertising to a much larger audience, you’ll need to enlist the services of a social advertising partner, as well as an increased budget to fuel this partnership effectively.
According to Erica Ruzicka, a marketing manager at Adknowledge, a decent mobile advertising budget is approximately $50,000 to $100,000 a month in order to see results from a campaign centered around increasing mobile app installs, for example.
Working with an advertising partner is the only way to increase the reach of your campaigns on a much larger scale since you aren’t able to manage these campaigns yourself to the same capacity. Constraints on technology, staff and ongoing optimization required to make them cost effective are all better handled by the people who deal with those issues day in and day out.
Start understanding where you’d like to target your mobile advertising campaigns on a larger scale than what you’re doing today.
What buyer personas make up your audience? Answering this question will help better guide your marketing for the future by giving your team insight on who your audience is, how your messaging is interesting to them and what messaging will compel the audience to take action.
Once you’ve got these buyer personas in mind, it’s time to decide how you’d like to target a larger segment of your audience by location, demographics, interests, behaviors, relationship status, education level, employment, financial circumstances, ethnicity, generation, political opinions and more.
When targeting these personas on Facebook and elsewhere on mobile, this requires much more extensive budget and campaign management to properly optimize these ads across markets to get the best ROI for your efforts.
The type of mobile app you’re promoting greatly affects the nuances of your campaigns, especially when you’re focused on creating volume with your advertising.
Be extremely clear about the types of mobile apps you’re planning to promote on Facebook, Twitter and elsewhere to help increase mobile app installs at the right price for your budget.
For example, a mobile gaming app has different user base then an e-commerce app and therefore, the approach to driving an increase in app downloads to one versus the other is completely different.
As a mobile advertiser, it’s likely you’ve got a firm grasp on the goals you’re looking to achieve with each campaign. Not all installs are created equal, which is why it is so essential to understand the goals of your campaign and match your tactics for reaching them, especially as you scale.
The advanced targeting capabilities of a social advertising partner can help ensure your company is practicing intelligent user acquisition practices that drive quality results.
To better understand if these results are affecting the goals you’ve set, consult the reporting functions you have in place to monitor the success of your campaigns.
Work with a social advertising partner to better manage the measurement of your campaigns as your business continues to increase the volume of your mobile advertising.
What’s influencing your organization’s decision to grow your mobile advertising to the next level? As you continue to scale, what are you biggest concerns? Share your insights in the comments below.
Read the original here: The toolkit for mobile ad buyers: Steps to scaling your advertising on mobile
In the 2013 film, World War Z, Gerry Lane (Brad Pitt) is riding through the streets of Jerusalem as Jurgen Warmbrunn (Ludi Boeken) explains how the city was able to avoid the zombie apocalypse:
The tenth man. If nine of us look at the same information and arrive at the exact same conclusion, it’s the duty of the tenth man to disagree. No matter how improbable it may seem, the tenth man has to start thinking with the assumption that the other nine are wrong.
While Hollywood may have simplified the idea a bit for the screen, this is apparently a very real tactic which Israel has used in the past. Their military has a unit often referred to as the “devil’s advocate office” [PDF]. And yes, the goal is simply to avoid falling prey to group think.
I’ve thought about this concept quite a bit over the years. While the stakes may not be as high as war, or even zombies, I’m constantly surprised when companies launch a product that seems doomed to failure right out of the gate.
We’ve seen a lot of these launches in recent years. Microsoft’s Surface RT. Samsung’s Smart Watches. Google’s Nexus Q. Apple’s Maps. All great examples. Each was quite clearly a disaster waiting to happen to many on the outside. So why was it so hard for those on the inside, those closest to the projects, to see the obvious?
The answer, it seems, is that most of those people were likely too close to the projects to see what was right in front of them. They fell victim to group think, or worse, they started to rationalize their own bad projects.
The latest case in point: the Amazon Fire Phone.
The reviews have been brutal. The hardware is mediocre. The software is worse. The apps are non-existent. And the core points of differentiation seem more like gimmicks. The list of grievances goes on. But most of this was predicted before anyone had even seen the device! And yet, Amazon still launched it.
Maybe Amazon will be able to turn this piece of coal into a… slightly polished piece of coal, if they promote the hell out of it on a little site called Amazon.com. But the early returns at AT&T stores promoting the Fire Phone don’t look good. At all.
It sure seems like Amazon, and really, every company could benefit from some sort of Vice President of Devil’s Advocacy. That is, someone who looks at a product just about to launch and points out all the reasons it will fail.
It was said the Steve Jobs served a similar role throughout his years at Apple. He’d be presented with a product and more often than not, he’d rip it apart. He was even known to cancel launches at the last minute if he didn’t feel like something was up to snuff.
But Jobs was also undoubtedly deeply involved in the creation of these products. He was the rare visionary who could step back and see the forest through the trees. (And even he had missteps — plenty of them.)
A better way to do this may be to have someone outside the company, a trusted advisor, who is kept in the dark about a new product until that product is ready to launch. Then you bring them in to give honest, unvarnished feedback. Is it a good product or is it a bad one? You need someone who won’t hold back.
Yes, this is what user research is for to some extent. But that clearly breaks down in many situations, like the ones listed above. Or sometimes a product is too top secret to test with outsiders. This needs to be a single person whose opinion is fully trusted. Someone with the power to kill or postpone a launch. A VP of Devil’s Advocacy. A 10th man.
If a product can withstand the honest feedback and all the potential worst-case scenarios this VP of Devil’s Advocacy points out, only then does a product launch. That may mean millions of dollars of work lost in some cases. But it sure seems like it beats the alternative — $900 million write-downs.
About a year ago, as Microsoft blundered their way towards a series of doomed launches, folks wrote to me pointing out both the World War Z reference (and, in turn, the Israeli Defense Force reference), as well as a column noted sports commentator Bill Simmons wrote many years ago for ESPN, suggesting something similar for professional sports:
I’m becoming more and more convinced that every professional sports team needs to hire a Vice President of Common Sense, someone who cracks the inner circle of the decision-making process along with the GM, assistant GM, head scout, head coach, owner and whomever else. One catch: the VP of CS doesn’t attend meetings, scout prospects, watch any film or listen to any inside information or opinions; he lives the life of a common fan. They just bring him in when they’re ready to make a big decision, lay everything out and wait for his unbiased reaction.
If so many parties can arrive at the same conclusion independently of one another (and in wildly different fields), there’s clearly something to this idea. How many bad products have to ship before we see such a position in tech? After all, it worked against zombies.
The rest is here: The VP of Devil’s Advocacy
After years of backing headline-grabbing consumer internet deals, it seems that venture capitalists are paying more attention (and more money) to the seemingly staid and stodgy enterprise technology companies (the businesses that sell technology to make businesses work better).
Their mission: to explore new ways of organizing data, to seek out new models for efficiency and security for business customers of all shapes and sizes, and to develop new technologies for marketing and selling on devices that no one has done before.
Investments into enterprise software companies of all stripes are soaring. The amount of capital invested in these startups has already surged to over $5.4 billion in the first half of 2014. That’s roughly the same amount that enterprise-facing companies raised in the entire year for 2013, according to data from CrunchBase.
Much of that capital was invested in the monster financing for new database technology, Cloudera, but it points to a belief among investors that there’s a huge change coming in the way that technology effects business. And these venture capitalists are hoping to cash in.
The surge in investment dollars is actually accompanied by a slowdown in commitments to new technology companies, indicating that investors’ confidence in the sector’s strength is matched by a belief that this current crop of business technology companies is maturing. In the second quarter of 2013, investors backed 328 startups in the enterprise software category, by the second quarter of 2014 that number had declined to 205.
While the numbers indicate a slowdown in the commitments going to business-focused technologies, some investors insist this is only the beginning. The idea of selling software as a hosted online service has been around for nearly a decade, beginning with the Salesforce.com customer relationship management revolution, but the technologies that are moving to the cloud were never part of core business operations, they argue. Now, these hosted software businesses are everywhere, and taking over core functions that used to be the purview of internal information technology departments.
Data storage is now a service, and even enterprise resource planning software can be bought as a service (and if there’s anything more important to a business than where it keeps its information and how it manages and organizes the use of its resources I’m not sure what it would be). Furthermore, new companies are taking advantage of the extremely powerful new infrastructure technologies that are available to rethink how customer service and other business processes can be automated to a degree that wasn’t possible before.
That’s why Salesforce.com is snapping up young cloud computing companies as if it were Oracle a decade ago, Microsoft has its head in the cloud, and why IBM and Apple have partnered to deliver software to mobile business users.
One need only look at the fact that Salesforce and Red Hat now trade above Oracle to see how momentum has shifted away from the traditional software vendors (although at 179.67 billion Oracle’s market capitalization is still over five times that of Salesforce.com’s $33.7 billion market cap). Not to mention the big bets that venture capitalists, corporate investors, and hedge funds and money managers are placing on technology like Hadoop and NoSQL.
“This is that next future data platform that in 30 years from now the vast majority that structured and semi-structured data would be stored in,” said Joseph Ansanelli, a partner at Cloudera backer Greylock Partners, in an April interview. “Oracle? Their core database is basically under attack from Hadoop.”
If Hadoop and NoSQL are eating at the core of the infrastructure businesses use to operate, then a slew of software as a service offerings, and technology solutions are attacking big enterprise companies on their periphery with services that better apply the new architecture of hardware, software, and cloud-sourced services with open interfaces for application integration.
“One of the themes we’ve invested heavily behind is this intersection between big data and traditional enterprise application software,” says Ajay Agarwal of Bain Capital Ventures. Indeed, Bain’s newest partner, Enrique Salem, the former chief executive of Symantec, sees business technologies on the cusp of a still-greater transformation.
“Historically some of these cycles have been a five-to-ten year change, but we are just at the beginning of this transformation,” says Salem. “Historically, $120 billion was spent on hardware implemented inside data centers. Now consumers will start running and picking their own applications and that $120 billion spend that was inside the four walls of the data center? A majority of the spend will not be in the data center, but in companies that are delivering services.”
Photo via Flickr user Scott Maxwell
(IMAGE HAS BEEN MODIFIED)
Excerpt from: Enterprise Investments Surge To Over $5.4 Billion
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