Interesting article by Alicia Asin at Libelium in GigaOm about funding for the Internet of Things. Alicia suggests there are three main sources of funding for IoT companies: Public, Public/Private Partnerships, Crowdfunding. It is a fair overview in many respects but I believe the article (and some of the comments) dismisses, unfairly, the impact of venture capital from dedicated venture funds AND indeed corporate ventures on the long term strength of the sector.
Each of the three funding sources that Alicia identifies has a place.
Public Funding: from e.g. EU, has put money into a lot of academic and industrial collaboration projects though many of these are a very long way off getting to a point where they will have any meaningful impact on commercial activities.
Public/Private Partnerships: i.e. Large companies working in partnership with e.g. where a city invests in a ‘Smart City’ or ‘Smart Transportation’ project that is usually delivered a a trial project with a view to rolling something bigger out should the trial be a success. In my view, the funding for these projects however is still coming from the public sector so should really count at ‘Public Funding’. there aren’t too many companies that can afford to invest in this type of project, not should they, unless they can see a clear ROI. Most private companies will be reluctant to do this given the noise around these projects at the moment.
Crowdfunding: Funding the development of a product or project using crowdfunding. A rapidly emerging source of funding and the news this week that Kickstarter has funded over $1 billion of projects in its life is validation that the model can work. HOWEVER, typically, this type of funding is most appropriate for smaller projects rather than raising significant funding to support the growth of a business. The vast majority of crowdfunded projects are for significantly less than<£50k.
So where is ‘venture capital’ in all its forms in this discussion?
Well, it is probably not going to have much of an impact on the types of projects that are either publicly funded or crowdsourced? Why, very simple, neither option is likely to be seen as being evidence that the type of project that takes those types of money will be a commercial success that offers an investor a return on their capital. Investors, both independent and corporate, will want to fund projects that offer a return on the money they invest (though there are some corporate funds that have another purpose i.e. helping their organisation learn about the IoT).
So where is the venture investment and how can we as an industry unlock the money? Actually, there is already a lot of money invested by venture funds into the sector. Intel Capital, as investors in e.g. SigFox, IQ Capital, as investors in e.g. Neul, DFJ Esprit, as investors in e.g. Greenpeak, Index, as investors in e.g. AlertMe), Amadeus Seed, are just some of the examples of active funds investing in the space.
All of these funds have something in common I think. They are investing in BUSINESSES, not projects, with an expectation of getting a financial return. They would probably regard public funds as, ‘soft’ – though they would never suggest to a company that they invested in that they should turn that money down. They would probably regard crowdfunded projects favourably if the crowdfunding received enough interest to actually be able to do something that moves the business behind it forward (i.e. they are using the crowdfunding as evidence of market demand). The flipside of a small amount of crowdfunding money raised by a company though could be taken by some investors as evidence that the entrepreneur is not being ambitious enough. Investors have a lot of deals to choose from. All their investment involve risk and they have to invest in projects that can show significant returns.
One of the most important things that we have to do as an industry at the moment, is understand very clearly what different investors – angels, venture firms, corporate investors want from a deal and understand the dynamics of the investor businesses if they are to attract equity funding of this type.
Some people, not unreasonably, want to know just one thing. This is a good 1 minute overview of ho you should frame a conversation with a professional investor.
The good news that we see is that serial entrepreneurs, who have attracted venture funding in the past for one or more companies, and who have achieved one or more exits for their investors are getting more involved in the sector. Niall Murphy, founder of The Cloud and Evrythng and Stan Boland, Founder of Element 14 and Icera before becoming CEO of Neul are but two examples and we know of a lot more that are working in the space under the radar at the moment. These entrepreneurs have made money for investors in the past and understand the language they speak as well as what investors need to see in a company they invest in.
This is one of the big topics that we will be considering at the next IoT Forum, April 15th 2014 where we have two discussion sessions: one focused on serial entrepreneurs and what they believe companies need to do to become successful in the market and; one on investors and what they are actually looking for. You would of course be mad not to be there.
If you are making/selling ‘stuff’ that would be interesting to IoT hackers get in touch with Red Gate Software, quick!
They run a quarterly ‘Down Tools Week’ where people are encouraged to look at new things and consider their implications for the business and indeed the business opportunities that new things might create. They have an interesting track record of delivering fledgling businesses out of the process though the primary intent is to make educate their people about new technologies.
Their IoT focused ‘Down Tools Week’ is next week and Mark Cheverton who is running the programme has bought a tonne of cool kit to play but he is open to having more. (In fact, here he is salivating over the kit he has purchased already though you will notice the Red Gate IoT Credit Card is in his hand).
More important, if there is anything that you would suggest, (or indeed make yourself), get in touch with Mark quick as he wants to hear from you, purchase some stuff and offer some feedback on what they did with it. Mark is Ennui2342 on Twitter.
Hopefully, they will bring some of their projects along to the IoT Forum on 15th Apriland show us what they learned.
This is a fascinating read if you are interested in how you can communicate better – a free book from Nancy Duarte, a well known and regarded presentation expert.
Conference presentations these days offer offer the option of two alternate and equally unpalatable outcomes – boredom as slides with 200 words are read out word by word, or seasickness – as aspirational graphics swirl and zoom in front of an enthusiastically compiled Prezi show.
Bad workers always blame their tools of course and PowerPoint has become one of those unfairly maligned pieces of software that is just used badly by most people. In fact, like most tools, use it for the right stuff and it can be very useful – in this particular instance, the end use isn’t a conference presentation at all, but documents that communicate ideas effectively.
In this book, Nancy argues the case for effective communication using the concept of a ‘Slidedoc’ a powerpoint type show somewhere between a meaningless mulch of aspirational pictures and text so dense it can’t be read which seems to encapsulate the range of most of the presentations I have seen today.
This isn’t an infomercial for a piece of software at all, it is a very well thought out process for producing documents that can communicate effectively. It doesn’t matter what tool you use, it is always more important to know what you want to achieve and in this respect, the book does its job very well. Almost 150 pages long, the ‘Slidedoc’ format actually means she gets the points across rapidly and quickly.
I absolutely love this video from Mivune (clients of Zuhlke, a supporter of our CEO Tales). It makes me chuckle.
In the future no jet setting, glamorous entrepreneur/spy lifestyle will be complete without at-fingertips control for all of his facilities. It will even help keep socks dry after a jetski commute to work. And, er, lock colleagues in the revolving door.
This is a vision handed down from the building automation industry – legacy of different platforms, a professional user who is paid to spend time optimising the performance of the building for its occupiers. If you read the case study on the engineering work that is creating this vision, it’s obvious that a major driver for this project is to reduce costs and complexity for facilities managers, by integrating a complex bunch of legacy systems.
Dozens, if not hundreds, of businesses have been trying to move this vision into the home. This excellent infographic from GreenTech Media shows the situation for the US alone:
The reality in the home scenario, though, is that we, as consumers (domestic facilities managers, if you will), already have complex lives and will adopt solutions that are reliable and simplify our lives, rather than add choice. We’re not paid to manage our homes in the way a facilities manager is paid to manage an office building.
Consequently, some of the most exciting work in smart homes is being done either by single issue, extremely simple ideas (eg Good Night Lamp) or more ambitious projects to devise single click user scenarios, such as Philips Hue. These are ideas worth watching
Sadly, none of these solutions will help us keep our socks dry when waterskiing.
For more discussion of the influence of the Internet of Things inside the home and out, join us for our CEO Tales on April 2nd on the IoT and Big Data hype or reality.
Another day, another mini storm as global tech leader moves HQ from marginal ecosystem to one where they get better access to the things they need. Nice to be reminded that this happens all over the world, not just in Shoreditch.
“Woe is me as large growing technology company moves HQ to more tech savvy city with better access to capital” Alert.
Atlassian is a decent sized company on any measure: 900 employees, >$100 million revenue, bootstrapped before raising $60 million in venture funding from Accel. Born and raised in Sydney, Australia. And now they are moving their HQ to London in order to improve their access to capital (and likely customers). The Australian Financial Review
“But the plans to relocate its headquarters caused concern among the technology start-up community, with suggestions it was indicative of an exodus of companies to economies more conducive to tech start-ups such as the UK and Israel.”
Scott Farquhar, CEO and co-Founder of Atlassian said,
“As we head towards being a public company, which at some stage is most likely in our future – most technology companies go public at some stage – we thought it would be best prepared for a global investor base.” Mr Farquhar said there were no plans to change the tax structure, which has seen the company recognise $US641 million ($709 million) in export revenue since he and co-chief Mike Cannon-Brookes founded Atlassian in 2002. But he said it had become difficult and expensive to find enough experienced graduates to take up developer positions, leading to the company hiring more developers in the United States, and opening a new development centre in Vietnam, where high school students are required to take computer science courses.
So one of Australia’s finest technology exports is shifting the focus of its operations in response to increased demand and price of talent in its home location, to get better access to money and customers. It seems that wherever you are in the world, you run the risk that as you grow, the ecosystem that spawned you will one day be horrified that your business has grown beyond the level that it can support effectively.
And nice to see a high profile, global technology company choose London as its global base.
These are the 50 most common passwords of 2,240 odd used to target Tesco customers to steal their Loyalty Vouchers. The emails and passwords of the hacked accounts have been posted on the internet.
The emails and passwords were harvested from other ecommerce sites then hackers used them to log in to Tesco.com by taking a wild guess that most people will use the same email and password for every site they shop on. I think Tesco have behaved very reasonably on this and have replaced any vouchers lost by those effected and the only way to protect consumers more from their own stupidity from an attack of this type would be two-factor authentication though this is probably going to put a lot of their customer base off.
‘Charlie’ was by far the most popular password on the list though no one using ‘Charlie’ as a password had the name Charles or Charlie in their email address.
Just a reminder that it is a REALLY bad idea to use the same log in details for everything you do.
Guest blog post from Andrew Yeoman, CEO of Concirrus who shared his definition of the Internet of Things when we spoke recently, the first time I have heard someone define IoT in terms of BUSINESS, not TECHNOLOGY.
“The Internet of Things allows you to know information that you previously couldn’t economically know. With that knowledge, you can operate a different business process.”
He also got us thinking about the unintended consequences and was kind enough to write this. Food for thought.
As the Internet of Things boom starts on its way we are bombarded with the ‘sense of possibility’. We’ve all seen the estimates on how many connected devices are going to be out there (100s of billions) and the massive profits that this will generate ($trillions) and there is no doubt that the IoT will have a profound impact on the way we live our lives and the way that business is done today.
From cars to fridges, from smart meters to oil tanks, our businesses, assets and lives will be monitored, managed and optimised. We can be certain that our lives and businesses will be impacted in ways we could never have imagined. Being successful in the use of these technologies does require us to consider both the returns and the risks. Each of these requires a change in our thinking.
We believe that in the future there will be two types of businesses – those that embraced the Internet of Things (or whatever it is called at that time) and those that used to exist. However in the enthusiasm to embrace this technology its important to consider the ‘unintended consequence’ of this technology.
Take for example, car insurance – we see a rush to adopt telematics (an early part of IoT) in the underwriting process. The use of this technology is fascinating, by observing the driving behaviour of the policy holders, the insurer can ‘see’ who is a good risk and who is not. Using this information they can actively manage their ‘book of risk’ by pricing out or forcibly ejecting those that are ‘high risk’. This marketing is surging… and why not as the improvement in underwriting returns is frankly staggering.
However, the law of unintended consequence is equally busy at work…
Prior to telematics, an insurer operated with hindsight and knew only of incidents and accidents some time after they occurred. However now they are ‘connected’ they receive information in near real-time. So when a car crashes and ends up on its roof, the insurance company ‘knows’ about this even in the middle of the night. What obligation now exists on the insurer to act? When the occupants of that vehicle sue for injury and suffering because they lay in ‘that field’ for several hours what liability exists? For sure, we can be certain that this will be tested in court?
When a driver has an accident and it can be shown that this driver had been driving recklessly for weeks prior to the accident and yet the insurer failed to act then who has what liability?
So where else do we see this?
How about in houses and homes? This year has seen the acquisition of Nest by Google but what could possibly go wrong? When your meter readings are hacked and it can be seen that your reduced consumption shows that you are on holiday who could be liable for the consequential loss? When the thermostat incorrectly assesses your presence and switches on heating unnecessarily using gas/oil/ electricity then can you claim that from them?
What the Internet of Things is, is another new set of technologies and much like the last revolution we say, with the Internet, it is not utopian. Like the very best business plans both the opportunities and the risks need to be considered and addressed.
Bring on the information revolution… it’s been 10-years since we saw the last one.
If you are interested in the Internet of Things and what it can do for you – as a business, an investor or an entrepreneur – two dates you should be aware of:
It might seem crazy – with all the column inches devoted to the Internet of Things – but we are constantly coming across new – or even established – businesses who we think should have more exposure. No doubt they feel the same.
So, to promote some diversity and highlight some unsung heroes of the IoT, entries are now open for IoT14 showcase. Five minutes in the spotlight in front of an influential audience of IoT entrepreneurs, funders, corporate interests and opinion formers, to turbocharge your networking and start the conversations you want to have.
You can get some insight into the breadth of applications from last year’s presentations. It doesn’t matter if you are hardware, software, platform or application, if you are building an exciting business in the IoT and you think the world should know more about you, we want to see you apply.
It’s a simple process – register for the showcase here, answer the questions about what your market is and how you are meeting its needs, and we will let you know by early April if you have made it onto the list. Just remember that an application does not guarantee a delegate place: you only get one of those if you win.
Good luck, we look forward to meeting you on the 15th April.
Successful software professionals know this: the quick way to progress your career is to show your excellence by becoming essential to a ‘rocket ship’ company. The Business Leaders Network is on the launchpad, ready for rapid growth in the next 12 months, but we need a chief engineer. If you have the skills to develop critical web based business processes for us, then join us and share in our success.
The Business Leaders Network (BLN) runs high quality events for technology entrepreneurs and innovators including the Internet of Things Forum and the Business of Software Conference. If you want to meet and learn from high quality people growing high quality businesses, software entrepreneurs, technology innovators and funders, come to a BLN event (better yet, help run one!). Our reputation and market is growing and we want to take advantage of that.
There’s a long list of interesting attributes below, but in a nutshell we need a bright self starter with strong technical skills in web based business tools (especially WordPress, PHP and mySQL) who has a knack for breaking complex problems down to manageable chunks. You could be in a fairly junior position, but if you are creative and have an urge to see tangible bottom line results from your work, then you will probably get a kick out of this job.
You will be responsible for automating business processes, including email marketing, social media, analytics, SEO and CRM. In addition to development, the role will encompass the day to day administration of the events website – including SQL and system maintenance, user configuration, task server administration and report design and execution.
As the technical ‘go-to’ person in the BLN, your work will be critically important to the company’s growth, in an environment where you will be mixing with software entrepreneurs and finding out about leading edge developments from some of the best connected people in the market.
What you’ll be doing:
• Set up and adapt WordPress to meet business requirements
• Discover new online channels for customer acquisition and improve existing ones
• Ask questions about what drives growth, build analytics tools to capture relevant data and offer actionable answers and insights as a result
• Monitor application performance and identify any technical problems
• Turn project briefs into actionable plan and provide accurate price quotes
• Create wireframes and design mock-ups
• Discuss technical requirements with team and provide innovative solutions
• Work on internal projects to optimise current processes
• Maintain a high awareness of industry’s issues and trends
• Work both independently and in conjunction with other project team members
• Thorough quality assurance testing of all web projects
• Managing email marketing and SEM. Potentially also, display advertising, and retargeting
What you will bring:
• 2+ years commercial experience of WordPress development
• 3+ years experience with the core elements of the WordPress stack: PHP & MySQL
• Excellent written and oral communication skills
• Excellent analytical and problem solving skills
• Experience with Responsive Design
• Experience with WordPress Theme & Plugin Development
Interesting piece on who owns the data in the Internet of Things. Lots of companies seem to think that the value of their ‘thing’ will come from the Big Data exhaust produced by e.g. home thermostats, car driving habits etc so this is timely.
The data are hugely valuable. But who owns them? The answer is: no one – there is no property right in a piece of data itself. The owner of a smart thermostat does not, for example, own the data about how he uses it. The only thing that is ‘ownable’ is an aggregation or collection of such data, provided there has been a relevant investment in carrying out that aggregation or collection (the individual user is very unlikely to have made that investment). It is that investment and who carries it out that are the focus of this article.
For someone to ‘own’ the data, you need to establish a ‘Database Right’ (this is an EU specific thing designed to incentivize investment in storage and protection of data.
For a database right to exist:
There has to be a “database”, as defined – this is a collection of independent data which are arranged in a systematic or methodical way and which are individually accessible. The key point here is that the data must be collected in an orderly way to allow for retrieval of those data. This will ordinarily be the case where there is capture, transfer and analysis of data. However, if this is all happening in real time without the data ever being “collected” into a fixed base, there is unlikely to be a database;
There has been substantial investment in the obtaining, verification or presentation of those data. Obtaining and presenting will be most relevant here – there must be investment in the seeking out and collection of the data and/or in their arrangement and organisation. With so much data being captured by connected devices (that being the whole point of the IoT), the opportunity for substantial investment in collecting and/or arranging them is obvious; and
The maker of the database (or one or more of them if it was made jointly) has to have a substantial economic and business connection with an EEA state. This may catch out many overseas entities. For example, the maker would have to be: (i) incorporated in an EEA state and have its central administration or principal place of business within the EEA; or (ii) have its registered office in the EEA with its operations being linked on an ongoing basis with the economy of an EEA state.
Well worth looking at the full article at TW Tech Briefs. It seems pretty clear though, that the issues are not well understood at the moment, companies need to take the time to understand the issues and incorporate them into the business models they are building and they will be keeping lawyers around the world busy for a long time to come.