A Swedish/European Entrepreneur in Silicon Valley
Entrepreneurship
There are banks and there are banks
Feb 12th
Today I received an e-mail from the CEO of my US bank.
Sometimes it seems like I collect banks, and you might need to when you are a parallel entrepreneur with companies in different parts of the world. So to say the least I have some experience with banks and how they work with your personal finances as an entrepreneur and as a entrepreneur or CEO of a early stage company.
I will not quote the complete e-mail (because it was probably not intended for wider distribution), but a short excerpt shows SVB’s focus:
We remain focused on our mission to help entrepreneurial companies succeed and have taken the necessary steps to ensure we are able to continue to do so. ….. We see it both as our responsibility, and our opportunity.
In these challenging economic times, know that we are here for you and will do our best to help you succeed. I believe open and frequent communication is hugely important, particularly in times like these, so please don’t hesitate to let us know how we can help your company and we will keep you updated on our perspective as well. We thank you for your business and continued support.
If any of you early-stage entrepreneurs reading this have dealt with UK or Swedish banks for your company, you know that this is not the message they will send you. Especially in these times.
The bank is Silicon Valley Bank, which is committed to working with entrepreneurial companies, and have built a successful business around this for the past 25 years.
This is just one part of the entrepreneurial eco-system that is Silicon Valley, and I am glad to soon be part of it full-time (move is planned for beginning of March!), with my new bootstrapLabs venture, where I will continue my serial and parallel entrepreneurship to create new companies, and bring new products and innovations to the market.
Fiat currencies and the credit crunch
Feb 10th
The US government lending Spree that started in the beginning of the 1990 were the US government created Fanny/Freddie (among others), is deemed by many as economists as a root cause of our current economic crisis.
I would say that Alan Greenspans actions in the 2000′s is aftermath that kept it racing in the wrong direction, but this crisis was not created during the past 10 years, but rather in the past 20 years.
Fiat currencies, they have been around since the first wave of globalisation (the colonial powers created them), and the real big change was when Bretton Woods was abandoned (-71), and was part in creating the very volatile gold markets in the 70-ies.
What would be the alternative? All currencies that are freely convertible/traded are by definition fiat currencies, and an effect of global trade.
They are traded against each other, so if you increase circulation, you will loose comparative purchasing power against the other global currencies, thus keeping a balance in the global markets (there is one exception though, see below). They makes the fiat currency a commodity with scarisy as any other (as increasing circulation/printing more money will be costly).
If you would describe a closed economic system (with a restricted/non-convertible currency) such as the Soviet Union was or some countries in the world today, scarcity would not be as balanced.
There is hardly any alternative, but fiat currencies is harder to value than currencies that are convertible to gold (as for example the US dollar was until 1971, when Bretton Woods were abandoned) as with a majority of the things traded on markets today, you never know if it’s lemon….
Which is the problem with fiat currencies, a fiat currency can be very sound, with-out a large reserve, but it’s hard to assess if it’s sound or a lemon.
The US Dollar have had a development were it was kept very low for a long period of the 2000′s, the odd thing is that the international purchasing power in the US have been very competitive (the same new Japaneese car would cost more than twice as much in Sweden compared to the US), so the US enjoyed the benefit of the low dollar, but not the loss in purchasing power (for some things yes, but for many not at all). I think this is due to the fact that the US economy constitutes 30% of the wold GDP, and many currencies are pegged to it and a majority of trade agreements have been dominated in US Dollars.
This fact have tilted the market dynamics in the favor of the US, but now we are seeing a backlash, were the US Dollar has been pressed up in value, and other lost in comparative value. This is probably a sound reaction. I would not bet my money on the US dollar being as strong as today, but it will not go back to mid 2008 levels either I think.
“Micro-conversations”, micro-blogging continued
Feb 5th
Continued from my previous post yesterday. Some more thought, and predictions of the future to come 
The diversification of micro-blogging will not only be on business models, the nature of micro-blogging will change and will be the carrier of a great number of types of conversations and snippets of input and output.
The big change in search introduced by Google was relevance. Not perfect, but relevant enough to be useful, the same thing will happen with micro-blogging and the growing interchange of these small messages, will need to be relevant for micro-blogging to be useful and survive in the long-run.
The “spammy” companies that use it to promote their products and services have a place in all this, but that will work just as well as non-targeted advertising on the Internet did in the 1990-ies (which is just as bad as off-line…), so promotion and PR online will have to find new models, were they engage in relevant conversations with target groups or can pin-point there messages/information where it’s relevant at that time.
Some things I think we will see:
Micro-conversations. What we call micro-blogging today, will probably more accurately be “micro-conversations” in the future.
Event feeds. Pushed event feeds from media houses such as CNN that can push their news stories in real-time, this is valuable for a lot of people even though the tweets are one-way.
Presence. Presence will evolve, something we (me and my co-founders) have explored a bit in GlocalReach, it will control how people and technology interact with you in a much more subtle and encompassing way.
“Micro-knowledge”. Or distributed knowledge. The heavy touted and advanced technologies for Knowledge Management, will find a new home, that is much simplier and will travel through the micro-blogging networks (IBM is exploring this internally already).
The mix and multitude of variation of different sources and with different models adds value in the mix here.
Micro-blogging is the “next search”
Feb 5th
Micro-blogging is really catching on in 2008-2009, and it’s starting to be a global event feed system, and working much like the neural network of the brain, impulses are created in one end, reacted upon, growing, changing, escalating over the globe.
Companies are starting to use it as an event feed of just about everything from CNN that publish news story links in real-time, to small companies building awareness of what they are doing right now.
Some people on my social network online, like Jeff Pulver uses Twitter and micro-blogging to get help and find resources for small or big projects. Others I know say it takes them just minutes to find somebody that can do, or help them with just about anything, just be sharing their need using Twitter.
Micro-blogging is like search, but you don’t need to know what to search for. It’s like a constant flow of new input.
My Entrepreneur friend and business partner Erik and me discussed this over lunch today, and I think that micro-blogging might very well be the “next search”, by which I mean it will not replace search, but we might see an evolution just as we did with the search engines.
Maybe Twitter will not even survive, but there will be somebody else to figure out how to create a business model around this. Or a number of them, and then we will see a number of niche applications around the same event and sharing concept. One example is a new knowledge management and “keep your team up-to-date and managed” service that soon will be launched by my new venture, bootstrapLabs.
Devil’s in the “details” – 300 MUSD button
Jan 16th
Just by changing a simple message on a button from “Register” to “Continue”, a e-commerce website added 300 MUSD to their revenues.
This great article tells the storry, of how important it is to think carefully about your user interaction design.
The devil’s in the details!
Thanks Erik for the link.
Just out from MacWorld Expo: Macbook Wheel
Jan 6th
There have been lot’s of rumours about Apple introducing a new device that is something in-between a iPhone and a MacBook; a tablet style device, with not keyboard, now the news is out;
Apple is announcing the MacBook wheel!
Apple Introduces Revolutionary New Laptop With No Keyboard
Thanks Loic for this Tweet!
Links: MacWorld Live (SE), More MacWorld (SE)
Book review: Daemon by Daniel Suarez
Jan 5th
I was given a copy of Daemon written by Daniel Suarez from my blogger friend Henrik Ahlen, which I read almost immediately, very captivating, and something to do while my new-born daughter was up all night with stomach pains trying to get to sleep on my shoulder 
The book is very well-written, and with-out the techno nonsense that some SF (or “Cyberpunk”) authors tend to. It’s a tech novel, and there are a lot of technology but they are not obsessive or inaccurate as some authors in this space. But most importantly it’s a good and exciting story, and as an old fan of William Gibson and Niel Stephenson, this book stands out and is a recommended read (and much better than some of the 90th’s cyberpunk authors). I think and hope there will be a sequel to this book, and that we will see this as a movie soon.
The underline of the story tells a story of our society being extremely vulnerable and dependent of technology, and how the nation-wide borders have been replaced by a global economy for good and bad.
Now the good of the globalization outweighs the bad in the real world, IMHO, but the books shows how vulnerable our global world is to non-nation threats and how badly we can deal with-them. The 911 and terror attacks since then also shows this, malicious nations are fairly easy to target and defeat, the small enemy with-in is much harder.
This is Daniel’s first book, and if he keep’s up this level, I think Michael Crichton should watch out!
SIME and change, either your part of it or your out!
Dec 16th
I firmly believe that in the year 2050 when people look back at this year of 2008, we had yet not seen even 10% of the change that the Internet was about to bring to our world.
It’s a very well known fact that in the .COM-bubble days in 1999, business plan predictions of what e-Commerce would become in 2006 were way off from the outcome. The thing that most people don’t know is that the wild .COM business plan budgets widely underestimated the global e-commerce turn-over by a factor of 5. It’s only those business plans where targeting consumer e-commerce, but the real revolution that happened in the years after the .COM bubble burst, were in the the Business-2-Business segment (how many larger corporations can you name that do not do electronic procurement and e-commerce for their supplies, computers etc).
Why did not the consumer e-commerce happen?
Infrastructure was not ready, payments processing did not work well enough, global logistics were underestimated and number of factors that have come into place for the past couple of years.
So the big shift in online e-commerce for consumers is going on now. In spite of financial crisis; not much of what I am working with (and most people on the globe) is directly related to the financial sector. But almost everything is indirectly, which is way it affects all of us more or less and making the financial sector problems are very contagious; as we (the non-financial people) need the financial companies to help us manage funding, cash-flow, credit etc.
But still; I have mentioned it on this blog before, the opportunities are plentiful and a recession, means that we need to keep our focus on finding the opportunities and there are riches to be made. Historical facts shows, that in a financial crisis like we are seeing now, and lot of new wealth is created. Europeans seem more pessimistic than the Americans though.
But what about all the others that are not in the middle of this whirlwind?
I am an Entrepreneur, and I regularly meet some of the top 500 Swedish entrepreneurs, and this are the things we talk about. But more than 60% of these Swedish entrepreneurs do business do not have Internet businesses, but almost everyone is doing something on the Internet no matter their core business today.
And I think I am preaching to the choir; but they need to be on-board, because there is a shift that is going on, and it’s happening with or with-out a financial crisis and credit melt-down.
Now is the time to focus on performance based sales and effective and measurable marketing (such as online marketing and sales), now is the time to change, and tap into the additional reach and distribution power of the Internet, if not alone for the reason that there are many not taking advantage of the benefits of the situation.
SIME 08
This year’s SIME was guided very well by Ola Ahlvarsson, with an impressive visual presentation on stage (in-spite some technical problems).
And the theme of SIME this year was the “DNA of change”, which I at first though was a bit late in the game, but given it some more thought I realise as mentioned above, that there are so many that have not changed yet, and many that are afraid to change during these pessimistic times.
But for those of you not in in the middle of the Internet business innovation whirl-wind, the time to change is now, because…
Either you are part of the shift or you will be shifted out!
Links, and videos from SIME
- Are you a changemaker?
- Ace of base interview before the SIME concert – Talks about the Web.
- SIME Blog, maintained by Andie Nordgren.
- David Sifry interview, and also here.
Internet’s conflict with ever-controlling states
Dec 15th
There is an conflict between the openness of the Internet and government imposed control and regulation. This is nothing new, the Internet is being used everywhere as a tool to break monopolies, and introduce new, more cost-effective ways to do a great number of things.
It shifts telecommunication industry for phone operators that can not overcharge for calls when VoIP companies can connect the calls for much less and still make good profits. The matter of fact is that the Internet drives the cost per byte transfered down significantly, and thus making phone calls not cheaper by the new competition of new players alone but also drives the underlying costs down (the amount of data transfered for 1 dollar is increasing faster than the capacity of CPU’s as per Moore’s law).
It shifts retail industry, where the biggest margin costs are in the outlets.
It shifts any industry dominated by distribution power and costs such as Music and Movies (the long tail).
It creates new opportunities not previously even imaginable. 10 years ago something like FaceBook was not conceivable for most people in this world, today it’s part of everyday lives.
The openness of the Internet opens for innovation, transparency and disruption.
But the conflict lies where states that are used to having a heavy control and influence in their countries, when all of a sudden companies and people are setting up websites and offering services across borders.
We have seen what happens in a totalitarian government such as China, that have absolute control. Some websites are blocked by the “great firewall of China”.
What happens when or democratic countries in Europe want to impose new laws to regulate and control what happens over the Internet?
What happens when the monopoly is owned by the government?
We have seen this in the online gaming industry in France and Italy, where french police have seized official from companies (BWin) in other countries (Austria), while the company had no presence in france, and there were no real legal basis for the arrest. Italy have handled the competition to the government controlled companies by filtering all traffic in and out of Italy (which the EU did not approve of so the filtering was removed).
Now this is coming to the telecommunications industry, where many countries in europe is starting to require telecommunication and Internet operators to store information about all traffic in the persuit if terrorists and other criminal elements.
This is of course necessary, and law enforcement need to be able to go after the criminal, but what happens when these laws will start to apply on the “application” level of Internet traffic?
– Voice over IP is an application over the Internet.
– E-mail is an application over the Internet.
– Facebook is a application on the Internet that allows users to send messages.
– Instant messaging, such as GoogleTalk, MSN and others is a messaging service.
What happens when the local government impose restriction and requirements on these services. One example is the new laws in European countries such as Sweden, that require all teleco and Internet operators to store all information about communication (e-mail, SMS and phone calls).
A US company offering voice services over the Internet, can offer services to people anywhere in the world. If a user happens to sign up from Sweden, will the US company be required to actively store information about that users activities and forward them to Swedish authorities?
Or will the US company be deemed illegal in Sweden?
How will the local government control or impose this? Swedish law will never apply for US companies, but Sweden can of course instate laws about filtering unlawful traffic.
There is an inherent problem in this development, that will either lead to ineffective laws and legal systems or a locked up Internet with toll-gates between each country.
I guess that this is hardly the direction really intended by the European governments in the process implementing these laws, and this post is not personal reflection of political values, but my view of the effect of the current development with my 19 years of Internet experience (I started using the Internet, in 1989, before there was a web browser…). I know that law enforcement needs new tools to pursue criminals elements that exploit the Internet for their purpose, but the current development and law making is not looking to good for the Internet’s ability to foster new innovation or the law enforcement.
I suspect that a combination of lack of understanding of the Internet technology among lawmakers and perhaps a too strong belief in a government ability to impose control in this environment. The Internet is global and thus very hard to impose control, with-out the chinese model.
Why I am moving to Silicon Valley
Dec 14th
Just saw this video, from the LeWeb this week:
that I found here where Michael Arrington writes:
But Europe’s persistent background pessimism was out in full force, even at an event full of entrepreneurs. Americans dominated the stage and spoke mostly about the tremendous opportunities that arise in down markets. Engineers are much easier to hire. The press have fewer startups and stories to divide their attention. The pond certainly gets smaller, but there are far fewer people fishing, too. For most startups, this is a time to blossom.
He got a point, for the past almost 10 years that I have been going to the US for business trips once, twice or three times a year and visited Silicon Valley frequently, I always felt that Silicon Valley is very meritocratic, and that if I would surround myself with the like minded people that I meet there, I will be able to achieve more.
Now not to say that I don’t enjoy long lunches and good wine, I do, but I rather see it as work-hard and play-hard, I don’t do when my schedule is tight, on the contrary, when I know there is a lot of things I can do to move things forward I focus on getting a lot of things done. But you do need to wind-down and enjoy life once in a while. But my work is my passion, which helps a lot to keep discipline and motivation going.
But people in the Silicon Valley enjoy life and I think the quality of life is better than northern Europe (European are not Europeans, and definitively not French, France is 13% of the European population, and cultures are very different across Europe), if not for other things the weather definitively helps (do you know that today in Stockholm there were 5 hours of daylight, and during that time it’s not much of it either, and it’s cold).
Move is happening February-March 2009, so excited to spend more time in the Bay area, and to get some traction for my new Internet bootstrapping business lab, bootstrapLabs that I just setup in Silicon Valley.
So Loic, and Michael I hope we run into each other next year in the Valley!
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