..and Atlas Shrugged.

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I’m a amateur photographer. I enjoy snapping wildlife, travel scenes and catwalk shows and I hope that, one day, National Geographic will use one of my photographs on the cover of their magazine. In the meantime, I occasionally release photos under the Creative Commons Sharealike licence  so that they can be used for things like illustrating Wikipedia articles. If you go to Wikipedia, wanting to learn about the Saatchi Gallery or fashion designer John Rocca, there’s a good chance you’ll end up looking at a photograph that I took.

One of those photographs (of tomatoes on a market stall at London’s Borough Market), has proved surprisingly popular. It’s been used by dozens of people around the world to illustrate everything from blog posts and online magazines to a Texan market gardeners’ newsletter. It’s even appeared on dozens local newspaper websites across the US after it was used to illustrate a syndicated recipe column titled 20 Ways to use fresh tomatoes.

Now, I’m very pleased that this photo has been used so widely. It’s for exactly that reason that I released it under the Sharealike licence and most of the people who use my photo adhere to the conditions under which I licensed it, most notably attributing the photo to me. In releasing these photographs under the Sharealike licence, I have deliberately and consciously given up certain rights that I, as a copyright owner, am entitled to. For example, anyone can now use those photographs for commercial purposes without paying me. I have effectively waived my economic rights as a copyright holder, as well as my right to control who makes use of the image and how they do so. However, I have retained my moral right to be identified as the creator of the photographs in question (and it’s worth noting that the CC Sharealike licence deliberately and explicitly reserves that right on the author’s/creator’s behalf).

However, my willingness to share only goes so far. The images I’ve released under the CC Sharealike licence are fine for use online but they’re not of a high enough resolution to be used for print. So, if National Geographic did want to put my photograph of tomatoes on the cover of their magazine, they would need to come direct to me in order to licence the hi-res version.

There are other photographs that I have chosen not to release under a Creative Commons licence which I have, nevertheless, published on the Internet (e.g. this photo of a model at Graduate Fashion Week). If someone were to use one of those photographs without my permission, I’d be legally entitled to compensation and to injunct the offender to cease breaching my copyright. Copyright owners’ rights are recognised by most countries, and the World Intellectual Property Organisation (WIPO, an agency of the United Nations) exists to help enforce those rights internationally.

In November 2010, the government commissioned an independent review of how the UK’s Intellectual Property framework supports growth and innovation. The review was chaired by Professor Ian Hargreaves, who published his report last month (on the same day, funnily enough, that I asked Jeremy Hunt, the Culture Secretary, at Google’s Big Tent event, when the Parliamentary Enquiry into Protection of Online IP Rights would resume, a question Mr Hunt deftly avoided answering by talking, instead, about the release of the Hargreaves Report).

Fast-forward to last Thursday evening, when I attended a Coadec debate on Copyright in the Digital Age: Will the Government Implement the Hargreaves Recommendations?

I was expecting to watch an actual debate, with representatives from both sides of the table, but it was a disappointingly one-sided affair. The panel included Prof Hargreaves himself, Lord Lucas (a Conservative peer), Stefan Glaenzer (Passion Capital), Nico Perez (co-founder of Mixcloud) and Eric Joyce (Labour MP and Chairman of the All-Party Parliamentary Group on the Digital Economy). There was nobody from a music or film company, or from an appropriate industry body (such as the IFPI, BPI or MPA). There was someone from Pearson (I failed to catch his name, unfortunately) in the audience who, when called upon, stood up and spoke in support of a Digital Copyright Exchange (one of Prof Hargreaves’ recommendations), although it wasn’t clear whether he wanted to use said exchange to licence Pearson’s content to others, or licence others’ IP for use in Pearson’s publications.

Indeed, there seemed to be little attempt to address the actual question that was supposed to be debated (Will the Government Implement the Hargreaves Recommendations?). Instead, there was much talk as to why the government should implement the Hargreaves recommendations, with a hefty dose of music industry-bashing from both the audience and, to varying degrees, the panel. Nico Perez moaned about the difficulties Mixcloud had faced getting licensed to use music, Stefan Glaenzer revealed that he has a bee in his bonnet about how much it costs to buy copies of academic research or journal articles (and, incidentally, seemed to admit that the founder of Flattr, a Passion Capital investment, had a criminal background, violating copyright as part of the team behind The Pirate Bay) and much was made of the fact that copyright, as a concept, has only been in existence for the last 300 years, (as if its comparative youth in the grand scheme of human evolution should somehow render it irrelevant). I considered pointing out that many things that were not only legal, but were regarded as perfectly acceptable, 300 years ago, now carry hefty prison sentences. However, with such a one-sided audience, I decided that discretion was the better part of principle.

I was on the verge of dozing off, when Lord Lucas suddenly popped up, right at the end, and opined that the use of the proposed Digital Copyrights Exchange (DCE) should be compulsory for copyright holders and that, furthermore, any copyright holders who refused to licence their material through the DCE should lose their copyright.

Now, in my opinion, this is an incredibly stupid idea. The whole point of copyright is that you own the intellectual property you create, and you have various economic and moral rights to control the use of your IP, benefit economically from it and be identified as its author/creator. Copyright legislation is designed to protect those rights and punish those who attempt to flout them, particularly those who attempt to profit from breaches of copyright. In short, it was intended to encourage creative-types to create and ensure that they could benefit from the fruits of their creativity.

Clearly, the advent of the digital age, in which a single person can share a piece of IP (e.g. a hit song) with thousands of others, (without necessarily gaining any benefit from said sharing and, on occasion, without even realising that they are, in fact, sharing it), has resulted in some situations where the enforcement of copyright legislation has led to punishment or penalties that are disproportional to the intent, profit gained and harm caused by the infraction in question. However, to my mind, this merely reveals shortcomings in the legislation; flaws which should be examined in a considered manner and corrected where appropriate.

What Lord Lucas was proposing was a fundamental shift in copyright legislation. Right now, as a copyright holder, I have the right to decide to whom and under what terms I licence my copyrights. If Vogue were to email me and say “We’d like to use your photograph of a tearful catwalk model in a story about how designers often fail to ensure that catwalk models have the right size shoes when they strut down the runway”, I would quote a sizeable fee. On the other hand, if a group of fashion models who were seeking to raise awareness of the exploitation of young models in the fashion industry approached me and asked if they could use my photo as part of their campaign, I would have no hesitation in allowing them to use it for free. I also retain the right to refuse to allow, say, an organisation espousing political policies that I find offensive (e.g. the Labour party) to make use of my photographs. The current legislative regime provides a framework within which I, or any other copyright-holder, can enforce those rights.

Lord Lucas wants to take that right away from me. He wants to compel me, on pain of losing my rights as an owner of intellectual property, to take part in his Digital Copyright Exchange.

I have a major problem with this and I suspect that plenty of other copyright holders would also have a major problem with it. I also suspect that it would be unworkable from a legal perspective, given our international obligations under the WIPO Copyright Treaty. Even if we could somehow wriggle out of or treaty obligations, how would we deal with copyright-holders from outside the UK? Can we, from a practical perspective, force every single copyright-holder in the world to use the UK DCE? I don’t think so.

So, I decided to take advantage of the opportunity Coadec had advertised (that the evening would be an opportunity for members of the tech community to express their views) and I stood up and expressed my opposition to Lord Lucas’ proposal, forcefully and at length. In the process, I discovered that the number of people in the audience who earn money from the intellectual property they create, was approximately the same as the number of people who exploit the intellectual property created by others (as Mixcloud does) and that both numbers were surprisingly small (in fact, I was flabbergasted at how few attendees were revenue-generating IP-creators – they could be counted on the fingers of one hand). I also sought to give Lord Lucas some food for thought by equating his desire to confiscate my intellectual property if I chose not to play by his rules, to my breaking into his house and stealing his property. With any luck, he’ll think long and hard before suggesting that idea to anyone else.

I want to make it clear that I am actually in favour of the creation of a Digital Copyright Exchange (DCE), as espoused in Prof Hargreaves report (although I think that there should be a number of competing exchanges, instead of a single state-sponsored monopoly). It’s worth noting that the music industry created something along the same lines a long time ago – the PPL and PRS organisations make licensing copyrighted music easy and straightforward.

However, I don’t believe that participation in the DCE should be compulsory, in the way Lord Lucas proposes. I believe that it should be voluntary, with no penalties for non-participation – i.e. those who decide not to join the DCE should suffer no degradation or loss of their IP rights. Prof Hargreaves himself made it clear (after I’d spoken) that he was not suggesting, in his report, that copyright-holders should be compelled to take part in the proposed DCE, nor that those who opted not to take part in it should lose their moral rights.

I’m not sure where Lord Lucas got his idea from but, whether it was his own or one he adopted, he really needs to think long and hard about the potential implications of putting it into practise because it would likely turn the United Kingdom into an intellectual property wasteland. A significant (if not vast) majority of those who currently generate intellectual property would almost certainly decamp to a legal jurisdiction which offers the rights Lord Lucas would seek to take away. Such an exodus would deny the UK thousands of jobs and tens of billions of pounds of revenue.

In other words, it’s an utterly insane idea.

Earlier in the evening, Stefan Glaenzer had indicated that the “main reason for having a rights exchange is that the trade should be superfast and easy, we dont have this today” and he drew a comparison with financial exchanges. Coincidentally, I happen to have a lot of experience working with trading systems in the City and I’m prepared to bring that experience to bear on the problem of designing, implementing and operating a DCE. What’s more, I’m prepared to contribute £10,000 to get an independent, non-profit DCE off the ground. In an ideal world, those with the necessary technical skills who support Coadec, the Open Rights Group and similar organisations, would step up and contribute their expertise and effort to create an open-source platform that would enable copyright-holders to make their IP available for licensing by anyone at standardised terms. My £10k would be used to pay for the initial hosting of said platform and administrative costs such as the drafting of licences to be used by the DCE’s participants.

Do I expect this will happen? No, I don’t. Why? Well, in my experience, when you step up and challenge people to actually be the change they want to see in the world, they usually fall short of that ideal.

Personally, I love putting my money where my mouth is. It’s something I learnt while working on the trading floor: “Oh, you think X? Well, I think Y. I’ll bet you £100 I’m right.”

It’s amazing how quickly people lose faith in their convictions when they’re asked to commit more than just their voice. “You want a Digital Copyright Exchange? So do I. Tell you what, if you code it up, I’ll pay £10,000 towards the AWS hosting and legal advice. Are you in?”

I tweeted this proposal on the #coadec hashtag but, so far, nobody has expressed an interest in getting involved. Quelle surprise.

The day after the Coadec debate, it emerged that Ed Vaizey (Minister for Culture, Communications and the Creative Industries) had held meetings with representatives from ISPs and large copyright holders’ organisations at which proposals to block websites that engage in systematic breach of copyright were discussed. The Open Rights Group were unhappy that they had not been invited to these meetings.

So, in the same week, we have groups of people from opposite ends of this particular debate’s spectrum, meeting separately. At the Coadec debate, we had the anti-copyright lobby, who want to overturn our existing IP regime and severely restrict the powers copyright-holders currently have. Meanwhile, Ed Vaizey was meeting with people who represent companies that employ thousands of people and generate billions of pounds of revenue for the UK economy.

Those who represent the major copyright-holders have no interest in (or incentive to) meeting with and engaging with someone like Lord Lucas. For them, it’s a complete and utter waste of time. They would simply sit there, watching him spout his insane ideas and wait until he ran out of breath. They would then turn to Mr Vaizey and say “If you do what this man proposes, we will (a) defeat you in the courts and (b) move our business elsewhere.”

It doesn’t take a genius to realise what line Mr Vaizey would take in that circumstance. As a government minister, his constituency is far larger than just those on the far left of the debate.

In any debate, there needs to be trust and common ground. If the community that gathered at the Coadec event the other night are not able to put forward a delegation who are capable of debating this topic in a reasoned manner, they will simply find themselves excluded from the debate (and deservedly so). The copyright-holders are under no obligation to waste their time talking with people who are pushing a radical and destructive agenda, without any regard for the rights of others. All too often, it is the extremists who shout loudest and drown out the moderates who are capable of seeing and understanding both sides of the argument. If Lord Lucas is representative of the loudest voices on the opposite side of the debate from the copyright-holders, then legislators like Ed Vaizey are perfectly justified in ignoring them.

Having said that, it’s important to recognise that current copyright legislation may not protect copyright-holders adequately (given recent advances in technology) and that the proposed plans for enacting web-blocking may lack an appropriate level of judicial oversight. We are at a crucial crossroads in the evolution of IP legislation and the United Kingdom has the opportunity to take a global leadership role in this area. If the consumer rights/anti-copright movement fails to grasp the nettle today, we may rue that failure for years to come.

The paradigm in which we find ourselves today is very different from that in which our extant copyright legislation was drafted and enacted into law. There should be a debate on this topic but, in order for it to be productive, it needs to engage those who can see the bigger picture and balance the interests of consumers with those of copyright-holders, within the technological context we now find ourselves.

To paraphrase F.Scott Fitzgerald, we need people who are capable of holding two opposing ideas in their mind at the same time, while still retaining the ability to function.

Written by jackgavigan

June 26, 2011 at 8:44 pm

Lies, Damned Lies & Statistics

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(or The Importance of Knowing What The Hell You’re Talking About).

Earlier today, Vicky Brock posted a graph to Flickr labelled “ICO website traffic impact of cookie opt in“. She had compiled the graph from the results of a Freedom of Information request to the Information Commissioner’s Office, which had yielded their Google Analytics data.

Before long, tech blogs were writing stories based on the data. Chinwag reckons it’s “cookiepocalypse“, while TechCrunch asks whether you “Want a 90% drop in your site visitors?“. To the casual reader, it would appear that implementing an explicit cookie opt-in, as the ICO have done, will result in 90% fewer people visiting your website. However, this is not the case at all.

The graph shows the number of visitors as measured by Google Analytics. Anyone who, like me, was willing to spend all of about 60 seconds researching how Google Analytics works, would have discovered that Google Analytics uses cookies to track website visitors. If a visitor’s web browser doesn’t accept a cookie from Google, their visit and page views won’t be recorded by Google Analytics.

Before the ICO implemented the cookie opt-in on their website, you had to explicitly configure your browser to reject cookies (whether in general or from Google specifically). The vast majority of web users probably don’t even know what a cookie is or realise that their web browser downloads cookies from almost every website they visit, let alone know how to restrict their browser’s appetite for cookies. Hence, most people accept cookies unwittingly and, as a result, Google Analytics can track most people on the Internet.

By introducing a cookie opt-in, the ICO turned those numbers on their head. Instead of automatically trying to stuff a cookie down the throat of every person who visits their website, the ICO will now only give a cookie to people who tick a box and click a button to indicate that they’re happy to receive a cookie. The opt-in box is at the top of the page, isn’t unnecessarily large and isn’t obnoxiously sticky (i.e. it disappears off the top of the screen as soon as you scroll down the page). Most visitors to the ICO website don’t need to accept a cookie in order to find whatever information they were looking for.

So guess what? Instead of circa 99% people receiving cookies without realising it, only about 10% of people went to the trouble of ticking the box and clicking the “Accept” button.

That is what is reflected in the data that Vicky Brock obtained from the ICO and the graph she posted.

In other words, a whole lot of people (some of whom are clearly not qualified to comment on a topic like this), are making a mountain out of a very small molehill, jumping to conclusions and prophesising doom and gloom. There are a slew of appropriate quotes here: “Those who know, speak. Those who speak, don’t know.” and “Empty vessels make the most noise” spring immediately to mind.

This is a common problem in the Internet/tech industry. Like any fast-growing sector, it attracts self-professed “experts” who basically know more about courting publicity and exposure than they do about the actual subject matter.

The moral of the story? Caveat audiens.

Written by jackgavigan

June 22, 2011 at 7:54 pm

Posted in Bubble 2.0

Apple’s Platform Strategy

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Back in January, I mused that Apple’s insistence that publishers must use the in-app subscription functionality when they sell content to users might provide a boost for Android. Then, a patent troll reared its ugly head, demanding that developers cough up 0.575% of their US revenue from in-app purchases, and this week, just hours after the Financial Times released a web app that effectively bypasses Apple’s terms and conditions altogether, news emerged that Apple is backtracking on it’s in-app subscriptions policy.

Apple’s clearly on the back foot. It appears that they failed to anticipate that publishers would sell subscriptions out-of-band and now they look a little bit greedy (for trying to grab 30% of subscription revenue), incompetent (because the platform they sought to force developers to use turned out to be booby-trapped by the Lodsys patent – even if the patent turns out to be invalid or if it’s proven that Apple’s licence also cover app developers, a lot of damage has already been done) and foolish (because it turns out that, despite all Apple’s efforts, you can simply sidestep the App Store – and their 30% commission – by building your app in HTML5 instead of natively on iOS).

Platforms need to be stable (both in terms of the technology and the commercial terms and conditions the platform owner imposes) to attract and retain 3rd party developers and content providers. How can a publisher formulate a strategy for a platform if you don’t know what the rules of engagement are going to be in six months time? On top of that, those who scrambled to update their apps to incorporate Apple’s in-app purchase functionality by the June 30th deadline are likely seething about the wasted effort.

Because platforms rely on network effects, it’s important to get your strategy and your business model right. If you don’t, problems are magnified by the very same network effects you rely on to make your platform successful in the first place.

The more restrictive a platform, the less attractive it becomes. Had Microsoft imposed T&Cs as restrictive as Apple’s on Windows software developers, Windows would not have achieved the dominance it did during the 1990s. (Incidentally, there’s a certain irony in the fact that FT’s use of HTML5 to escape Apple’s restrictions is reminiscent of the threat that Microsoft perceived the Web as posing to Windows’ position as the dominant OS.)

Similarly, if the platform owner tries to impose too high a price on access to their platform, it makes it less attractive. If everyone who sold content in PDF format had to pay commission to Adobe, I doubt we’d all have Acrobat Reader installed on our desktops.

Network effects mean that a significant portion of a platform’s value is derived from its users. If the platform owner seeks to extract significantly more value than they contribute – through, for example, innovative design and functionality, or the creation of a user-base through marketing – it becomes economic rent.

Apple make money on each iPhone and iPad they sell. They make money each time someone signs up to become an app developer. They make a commission on every native iOS app sold. Was it wise to also demand 30% of the revenue from paid-for content accessed through those apps?

Written by jackgavigan

June 11, 2011 at 8:09 pm

Posted in Openness

Angel investing on the cheap

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Earlier this year, I invested in a startup. A side-effect of this is that I get a lot of people asking me what term sheet I used or what law firm I got to draw up the deal.

The fact of the matter is that I didn’t use a term sheet template nor did I take any legal advice. I did ask a lawyer friend of mine how much his firm would charge to handle an angel investment. He said it would be at least £1,000. I decided that, given the investment was relatively small, I didn’t want to incur a comparatively large (as a proportion of the investment) legal bill.

So, the startup and I thrashed out an investment agreement over the course of a couple of days, going back and forth on email and by phone, borrowing bits and pieces of terminology from various documents we found online. Eventually, when we were both happy, we met up (in a pub, natch) to formally sign the agreement.

Now, I’m sure that any half-competent lawyer could poke it full of embarrassing holes but that’s something we accepted at the outset. From my perspective, I’m about to give thousands of pounds to these guys. That implies a certain level of trust up front. It also implies a certain acceptance of risk (let’s face it, if I was risk-averse, I wouldn’t be investing in a startup in the first place).

So, in the interest of demonstrating to other prospective angels that investing in a startup needn’t involve spending hundreds of pounds on legal fees (and at the risk of some smart-ass lawyer – qualified, amateur or wannabe – making me look like a fool), I present a redacted version of the investment agreement between the startup and I.

I deliberately did not opt for a convertible loan, anti-dilution provisions, extra options, preference shares, the right to participate in future rounds or anything fancy like that because (a) I wanted to ensure that the investment would qualify under the Enterprise Investment Scheme and (b) I didn’t want to complicate or put any obstacles in the path of future investment rounds. The whole rationale behind making an angel investment is that you’re providing funding to allow the founders to develop the idea to the stage where they can attract the next round of funding. You don’t want to do anything that might complicate or jeopardise that process, which is why I kept things simple.

Written by jackgavigan

May 31, 2011 at 11:17 pm

Posted in Investing

The importance of defining innovation correctly

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I spent the day at London Business School’s Global Leadership Summit which, this year, focused on the topic of Innovation, which is one of those things that is universally desired but which most people (including many so-called “experts”) struggle to define or, ineed explain. Today, the audience was asked to vote on the best definition of innovation from a list of four. The Economist’s “Fresh thinking that creates value” was the winner, with 58% of the vote. Later in the day, Vince Cable offered his own definition: “Knowledge [and] ideas being turned into commercial application”.

I like to think of myself as knowing a thing or two about innovation. My stock in trade is enacting innovation through the application of technology and I’m occasionally asked to speak on the topic for organisations or companies who are struggling to innovate. When I do so, I like to define the term up front, using the dictionary definition: make changes in something established, esp. by introducing new methods, ideas or products.

People often focus on the creative side of innovation but, to me, that’s the easy part. Ideas are two-a-penny. Implementing them is the difficult part. For me, change is a very important aspect of the definition of innovation, because it points us towards what I consider to be the most common reason behind a failure to innovate: resistance to change.

Change is difficult. As organisations grow and mature, as systems and processes evolve over time, as people settle into a routine and become comfortable with what they’re doing, they become resistant to change. When I talk about how companies can become more innovative, I probably spend over half the time talking about how to overcome resistance to, and fear of, change.

In order to innovate, you must embrace change. Yet today, I barely heard the word “change” mentioned at all. One notable exception was Masahiko Yamada, the President of Fujitsu’s Technical Computing Solutions Unit, who asked the audience “When you wake up in the morning, are you changing the world or just getting through the day? Or just making money?” before going on to point out that “the best innovators’ primary motivation isn’t money. They just want to change the world.”

Some of the other key points I took away from the day were:

  • Innovation is “discontinuous and stochastic, not linear and probabilistic.” – George W Buckley (Chairman & CEO, 3M. It’s worth noting that 3M is a business school case study in innovation – it’s part of their DNA. They’ve also been allowing their engineers to spend up to 15% of their time on personal projects since 1948, long before Google’s founders were even born!)
  • Nick Hughes, who developed the M-Pesa mobile payments system while working for Vodafone, said that telcos were reluctant to step over the boundary into mobile financial services.
  • Nick also stated that companies fear cannibalisation of their existing markets and revenue streams. My personal opinion is that it’s better to self-cannibalise than stand still while a competitor eats your lunch!
  • 3M’s Buckley isn’t a fan of bringing in outside consultants to help drive innovation. He’s also reluctant to outsource because “things always go wrong at boundaries”.
  • “The public sector accounts for 60% of all venture capital investment in the UK” – Vince Cable
  • “Most entrepreneurs will say the best thing the govt can do is get out of the way. I’m not sure they’re right.” Michael Hayman (StartUp Britain)
  • Philip Rutnam (Director General for Business and Skills at the Department for Business, Innovation & Skills) pointed out that, if designed properly, regulation can support innovation and cited Ofcom’s statutory duty to support competition as an example.
  • Innovation is about new ideas but most new ideas are bad ideas. Challenge is how to cope with high failure rates. Instead of running 100 experiments and picking the winner Cisco let the market do the experiments and bought the winners. – Professor Phanish Puranam (LBS)
  • “Some companies forget that their reason to exist is their customers.” – Antonio Horta-Osorio (the new CEO of Lloyds Banking Group)
  • “Big companies, small companies must innovate … otherwise you become complacent and you die.” – Antonio Horta-Osorio
  • Innovation is not about technology for its own sake. – Masahiko Yamada
  • There are more transistors on the planet than grains of rice. – Stephen Leonard (Chief Executive, IBM UK and Ireland)
  • We’re at an inflection point in the adoption of mobile devices and the explosion of Internet access from 2bn to 5bn people – Matt Brittin (Managing Director, UK and Ireland Operations, Google UK)
  • Companies need to get comfortable with the fact that not every innovation will succeed. Google Wave is an example of unsuccessful innovation. Companies are more likely to die from too little innovation than too much. – Matt Brittin
  • “I will bet that, within five years, a major multi-national corporation will base itself in Singapore.” – Sir Martin Sorrell (Chief Executive, WPP)
  • Forget about ppl interacting via the ‘Net. Think about the millions of devices that can interact via the ‘Net. – Stephen Leonard
  • WPP buys $1bn worth of advertising from Google annually. – Sir Martin Sorrell
  • Different brands within the same company may compete with one another but it’s about the overall market share. – Sir Martin Sorrell, talking about competition within WPP.
  • Two thirds of the companies on Fast Company’s 2009 list of the Most Innovative Companies weren’t on the 2010 list. – Professor Nader Tavassaloni quoting Gary Hamel.
  • In a vote on the role of the CEO, 80% of the audience voted that the CEO is key to driving innovation but by providing top level support rather than being a source of innovation.
  • Social innovation is fresh thinking that creates social value. Social enterprise creates social value by applying commercial principles.
  • The first digitisation in history was the replacement of gas lighting with electric lightbulbs. – Shai Agassi (Founder & CEO, Better Place)
  • Three years after the launch of Kindle, sales of digitised books exceeded sales of physical books on Amazon. – Shai Agassi
  • Shai Agassi believes that the advent of cars powered by electricity alone represents the “digitisation” of cars and that we could end up treating cars in a manner similar to how we currently treat mobile phones (i.e. a low up-front cost for the device itself, then we pay for usage).

Written by jackgavigan

May 23, 2011 at 10:47 pm

Posted in Innovation

Google’s Big Tent

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I went to Google’s Big Tent event today. It’s essentially a conference following on from the far more headline-grabbing Google Zeitgeist, that focuses on “the big issues facing the Internet today”. This year, it was organised in partnership with Privacy International and the Index on Censorship. There was a variety of speakers, including Eric “We view everything as a ranking problem” Schmidt, Jeremy “I’ll ignore the question you actually asked and, instead, answer the question I wish you’d asked” Hunt MP and Wael Ghonim, who unwittingly became one of the faces of the Egyptian uprising after being arrested in Tahrir Square, and held for 11 days.

It was an interesting change of pace from the commercial world I normally inhabit and gave me a lot of food for thought. Some of my takeaways were:

  • Despite claims that legislating for online privacy would stifle innovation, nobody could actually cite an example of this happening. Ever.
  • Privacy International’s Simon Davies pointed out that existing laws to protect people’s privacy (e.g. the Data Protection Act) are not being implemented anywhere near rigorously enough.
  • “I did not want to assume a leadership role… [I believe that] We should always trust the wisdom of the crowds.” – Wael Ghonim speaking about his role in the Egyptian uprising.
  • “We voted with our feet, we moved to Hong Kong. We were unwilling to be subjected to the laws of mainland China.” – Eric Schmidt, speaking about the perils of operating in countries with less-than-sparkling human rights records.
  • Mr Schmidt also described a French law requiring that passwords be stored in cleartext as “foolish”.
  • Google is building a dashboard to let people see all the information Google holds about them.
  • Jeremy hunt’s two big predictions for the Internet in the UK: The Need for Speed and Must be Mobile. He spoke about the potential need for the government to get involved in ensuring the roll-out of high-speed broadband, so that the UK could reap the same benefits that countries like South Korea have.
  • Google’s David Drummond pointed out that the more the West restricts free speech, the more repressive regimes will use that fact to justify their actions.
  • UNOSAT’s Satellite Sentinel Project uses satellite imagery from commercial satellites to monitor places like the Sudan for signs of conflict, then leverages the high profile of celebrities like George Clooney to publicise the fact that atrocities are happening.
  • Google’s Jared Cohen (formerly of the US State Department) averred that the rapid, viral spread of the YouTube video depicting the murder of Iranian protester Neda Soltan directly influenced Barack Obama.

Written by jackgavigan

May 19, 2011 at 12:31 am

Is the AlphaGov prototype worth £261,000?

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Responsibility is a unique concept: it can only reside and inhere in a single individual. You may share it with others, but your portion is not diminished. You may delegate it, but it is still with you. You may disclaim it, but you cannot divest yourself of it. Even if you do not recognize it or admit its presence, you cannot escape it. If responsibility is rightfully yours, no evasion, or ignorance, or passing the blame can shift the burden to someone else. Unless you can point your finger at the person who is responsible when something goes wrong, then you have never had anyone really responsible.

–Admiral Hyman G Rickover, USN


 

I’ve had a been in my bonnet for a long time about public sector IT. For the past eight years, I’ve advised a central government department on matters relating to information security and, during that time, I’ve seen plenty of evidence that the government struggles to do IT projects (of any size) effectively, due to a lack of commercial expertise, and I’ve witnessed at first hand some absolutely shocking behaviour on the part of IT suppliers which, quite frankly, borders on the fraudulent and would simply not be accepted by a private sector client.

I also have strong opinions on the government’s use of high-profile experts in areas like entrepreneurship, the Internet, cyber security, etc.

So, as you can imagine, my ears pricked up when I read this tweet, so I dug a little deeper and discovered that the AlphaGov project is essentially a £261,000 (+VAT) project to build a prototype of a single government website where you can access all government services. It looks very pretty. However, the first thing I clicked on (“Pay your Council Tax”) resulted in me being asked where I lived and then redirected to my local council’s website, which leaves me thinking “What’s the point?”

Now, fair enough, it’s only a prototype, but if the prototype cost over a quarter of a million pounds, how much will the full thing end up costing and what benefits will it reap?

According to one of the AlphaGov team, the government’s £128m annual bill for websites “could be reduced by more than 50%” and, what’s more, if people did just one monthly government transaction via AlphaGov, that “could save the government £1bn each year“, and a PwC report on “The Economic Case for Digital Inclusion” for “Champion for Digital Inclusion”, Martha Lane Fox (who has been far more successful in promoting herself as a public sector figurehead than she was at creating value for investors who bought shares in Lastminute.com’s floatation) was cited as the “economic case” for AlphaGov.

Now, I very strongly believe that building a strong, logical, detailed benefits case for an IT project is massively important. Project approval decisions are normally based on an assessment of the project cost versus its project benefits. For me, the prospect of getting a benefits case wrong is not an attractive one, given the potential for wasting money and the knock-on impact for my reputation. So, I spend a lot of time researching, number-crunching, chasing down details, checking dependencies, eliminating as much uncertainty as I can and ensuring that the logic and calculations behind the benefits (particularly the financial ones) are correct, logical, easily understood and, perhaps most importantly, independently verifiable.

I don’t like words like “could” and “should” because they imply both uncertainty and a unwillingness on the part of the author to take responsibility for the prediction. I prefer to use the words “will” or “shall”, or, if uncertainty is unavoidable, I’ll aim to make a prediction that I’m happy to put my name against, and if I’m just guesstimating, I make that crystal clear.

So, the AlphaGov team’s use of the word “could” lit up a warning light. It’s very easy to claim that reducing the number of government websites could reduce the expenditure on those websites but it turns out that the AlphaGov team don’t seem to be able to explain, for example, how many jobs would be eliminated by the move, which makes me wonder whether this “more than 50%” estimate is anything more than a finger-in-the-air guesstimate. I had a look through the report they cited but there didn’t seem to be anything in there about the potential savings from reducing the number of government websites.

I did, however, find some mention of the potential benefits of getting people to switch to using online channels for transactions with the government: “If all digitally excluded adults got online and made just one digital contact each month instead of using another channel, this would save an estimated £900 million per annum.”

So, I have two problems here. The first is that AlphaGov seem to be rounding £900m up to £1bn, which is not how I like to do things. The second is that they’re claiming that this benefit would derive from the AlphaGov website whereas it’s pretty clear (to me, at least) from the report that it would derive from the transaction being executed via any online channel, not necessarily AlphaGov. In other words, the AlphaGov team are misappropriating a benefits case that was put together to make the case for getting digitally excluded adults online, and claiming that the same benefit “could” result from the AlphaGov website.

Bottom line? I’m not convinced. £261,000 seems to be an awful lot of money to spend on a prototype. The benefits being put forward for the full website don’t seem to have been well thought through. I also question why the people who are working on the prototype (and who, therefore, presumably stand to benefit if the full project is given the go-ahead) are the ones trying to justify it.

Is it too much to ask, in this age of government openness, transparency and accountability, that the benefits cases for projects like this be published, so that we can all review them? Perhaps more importantly, can it be made clear who is to be held responsible when these massively expensive IT projects go wrong?

Written by jackgavigan

May 12, 2011 at 5:48 pm

Exactly what impact will the Tech City Launchpad competition have?

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Update: In the Budget 2013 speech, George Osbourne announced a new tax break for employers called the Employment Allowance which “will work by taking the first £2,000 off the employer National Insurance bill of every company”. It’s great to see blanket measures like this that benefit all companies, no matter where they’re located and I’d rather the powers that be focus on measures like this that will have a real impact and clear benefit, than PR/fluff initiatives of questionable benefit like the Tech City Launchpad and the recently-announced new “High Growth Segment” that will supposedly unleash a wave of tech companies floating on the London Stock Exchange (as if they couldn’t already float on AIM, like ASOS did).

So, top marks for the Chancellor. However, I think he can do more. Specifically, I think the next step should be to introduce an exemption on employers’ NICs for early-stage startups who pay salaries out of angel or seed capital. Implementing such a measure would be straightforward (HMRC could leverage the mechanisms already in place to support SEIS and EIS) and would provide a very powerful incentive for startups to employ people, and further encourage potential angel investors.

I hold very strong views on what the government’s role in encouraging enterprise should be. I’m also not a fan of targeting specific geographic areas. So, as you can imagine, the new Tech City Launchpad competition is getting right up my nose.

This is a competition for funding in digital projects. From the literature: “We are focusing on the existing technology and media cluster in East London, and we encourage companies within it to apply. However, the competition is open to companies across the UK, if they wish to carry out a project in the Tech City area.”

The first startup I was involved in (more than 15 years ago now) was based out of a spare, windowless room in the offices of one of our angel investor’s established companies. The second (during the dot-com boom) was based in Ladbroke Grove because that’s were we found cheap office space. The startup I angel-invested in recently doesn’t even have an office yet – it’s currently run out of the founder’s home, outside of London entirely.

Cheap office space is the primary reason a series of startups have sprung up around Shoreditch (and I hear that rents are rising rapidly). I believe that the purported benefits to a startup of setting up shop in Shoreditch are overstated (I’m not saying that they don’t exist, merely that they are exaggerated or would also apply were a startup to locate themselves in another part of London), which means that the rationale behind encouraging startups to locate themselves in that specific area is tenuous at best. Unfortunately, the government seems to have bought into the “Silicon Roundabout” hype – a media-friendly story that’s being pushed by various parties, including some who stand to benefit from an influx of startups to the area (and who are, of course, absolutely delighted with the Tech City Launchpad initiative).

The government would  be far better off supporting entrepreneurship across the whole of the UK, rather than just in one tiny area and I question how effective a competition like this will actually be, particularly given the fact that political considerations are likely to affect the judging (which pretty much rules out any startups operating in the financial sector).

I’d far rather see the government taking steps that will support all startups, no matter where they’re located.

EIS is a great scheme but it’s somewhat limited in scope. Is there something more the government could be doing to encourage investment by VCs and funds into UK startups? (And, by the way, startups don’t typically generate a profit for at least a couple of years, so giving tax credits against corporation tax is of limited utility).

How about tax breaks on, for example, employers’ national insurance contributions, to make it easier and cheaper for startups to employ people?

How about expanding and improving the talent pool from which tech startups can recruit by  encouraging and facilitating engagement between startups and universities? Is there any real reason why students couldn’t do work experience, industrial placements or projects for tech startups?

Such initiatives would have a far greater long-term impact than throwing £1m at a small number of startups in one tiny area of the country. Of course, they wouldn’t generate the same media coverage but the government should really be asking themselves whether they want to give the appearance of encouraging entrepreneurship or whether they actually want to do it.

Written by jackgavigan

May 9, 2011 at 4:26 pm

Posted in Entrepreneurship

Tagged with

Crashing the social media giants’ party

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I’m a great believer in the potential of open, decentralised platforms to disrupt and disintermediate incumbents, particularly in the social media space.

I’ve been keeping my fingers crossed that the students behind Diaspora will make good on their idea of building an open competitor to Facebook (although, with nearly a year now passed since they raised over $200,000 on Kickstarter, my optimism is waning).

The Tahrir Project is the brainchild of Ian Clarke, who intends to build a “distributed, decentralized, anonymous Twitter”. It’s an idea with huge potential and, given that Ian has a very strong track record in this space, having previously developed Freenet, I’m going to be monitoring its progress with a lot of interest.

Written by jackgavigan

May 3, 2011 at 9:23 pm

Posted in Bubble 2.0, Openness

Enterprise Investment Scheme

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I was at an event for entrepreneurs this afternoon, which included a panel with some VC/angel-types. During the panel, it became apparent that a lot of the audience (ostensibly there to get tips on raising capital) had never heard of the Enterprise Investment Scheme (EIS) which is, quite frankly, pretty shocking.

I’m not going to go into the benefits of EIS but I will say this: No would-be entrepreneur should expect to be taken in any way seriously if they’re not familiar with EIS.

Hopefully that’s clear enough!

Written by jackgavigan

May 3, 2011 at 9:22 pm

Posted in Entrepreneurship