California Dreaming

Silicon Valley (Photo credit: Wikipedia)

There have been innumerable attempts to understand and replicate how Silicon Valley has become the centre of the tech industry – with Tech City being the latest one in the UK. What is the secret sauce that makes California in particular and the US in general such a fertile breeding ground for innovation? 

It’s something I’ve often wondered about, so it was great to hear a first hand account of a learning journey to Silicon Valley. Speaking last week at CamCreative, Liz Weston of Weston Marketing talked about what she’d learnt on an organised trip that saw her visit the likes of Google, LinkedIn, Salesforce.com and Stanford University. She shared four big lessons from the tour:

1              The difference between an opportunity and an idea
Everyone has a different take on what makes an idea viable, from an addressable market to a strong founding team, but the big difference between the UK and US is the willingness to have a go, fail and come back stronger. If we can change attitudes in the UK to say it is better to try and then fail rather than fail to try at all, it will radically shift how companies operate for the better. 

2              Four key opportunities for business development
Execs in Silicon Valley outlined the environment, security, human health and digital/infrastructure as key markets for growth. Anything that reduces complexity in these areas and makes people’s lives easier has potential. Probably not a surprise to most people but worth bearing in mind when pitching any business ideas to investors. 

3              Look at the relationship between the customer and your product/services
It isn’t about the technology per se, but finding an emotional trigger with your customers. Serve a purpose and do it in a way that delights your customers and turns them into your advocates. So, in the same way that when Orange launched in the UK it positioned itself as the cool brand you wanted to be part of, LinkedIn offers the chance to be part of a cloud of intelligence, rather than simply positioning itself as a jobs site. 

4              The importance of innovation
Next year’s revenue won’t come from this year’s cash cow. So everyone in the business needs to be innovating – which can involve changing people’s mindsets. Encourage ideas and capture them – while they may not be immediately useful, they could be in the future. 

I’m sure most people have either heard or tried to put into action some of the lessons above. For me, the main takeaway (and potentially the big difference between the US and UK) is always be open, always be learning and don’t be afraid to take risks. This may not be Silicon Valley’s secret sauce but it is a better way to run a business.

 

Growing some bulls

There’s a continual complaint that the UK simply doesn’t produce the numbers of heavyweight tech companies that the US spawns. And looking around, the pattern seems to be true – for every ARM, Sage or CSR in the UK, you could name a dozen similar size companies in the US.

While some of this is gap is obviously down to relative population sizes are there any other factors holding back UK entrepreneurs? This was one of the issues discussed at last week’s Enterprise Tuesday event in Cambridge by an entertaining group of speakers, including company founders and Cambridge Angels, Sherry Coutu, Andy Richards, Robert Sansom and David Gill, managing director of the St John’s Innovation Centre.

The key factor is the ability to scale – the UK creates exactly the same number of startups, per capita, as the US – but only half of them successfully scale up compared to their US rivals. There are plenty of reasons for this – from an inbuilt British fear of change to an inability to cross the chasm

Image via Wikipedia

and appeal to the mass market. It seems that for too many UK companies the choice between scaling themselves or selling out is weighted towards the exit option. While this releases investment capital back into the system and gives entrepreneurs the chance to begin again, it has created (in the words of a US VC quoted by Andy Richards) an industrial veal farm in Cambridge, with prized startups nurtured and pampered ready for the inevitable early death/exit.

The UK in general, and Cambridge in particular, has shown that it can grow dominant tech companies, so now is the time for the government and tech ecosystem to encourage entrepreneurs to take a step back, aim higher than an early exit and build businesses that can scale. Given the UK has the ideas we need to move from farming veal calves to growing some bulls……….

Don’t believe the e-reader hype

Cover via Amazon

There’s currently a press frenzy about the death of the printed book, driven by the rise of the tablet/iPad and Amazon’s recent announcement that it is selling more e-books than paperbacks. Commentators are beginning to prophesise rampant e-book piracy and publishers going the way of the record industry in the brave new digital world.

But if you take a closer look you’ll see we’re nowhere near a digital tipping point, particularly in the UK. While Amazon is selling more e-books on the Kindle in the US than paperbacks, the margin is not that great (105 e-books vs 100 print books). However as pointed out in PaidContent, in the UK we’re nowhere near that yet. Amazon is selling more e-books than hardbacks (by a factor of 2 to 1), but not paperbacks.

Add in that the revenue for each e-book is much lower, and you’ll see that while e-books are having an impact, digital isn’t yet reaching market dominance. The PR behind this reminds me of Amazon’s claim that more people bought e-books last Christmas Day than hard copy books – eye catching as a headline, but hardly surprising as new Kindle owners added content to their toys. How many book lovers spend Christmas buying physical items that won’t be delivered for a week at least?

I’ll admit I’m biased but I think there’s a way to go before e-books take over. Screen technology needs to improve further and usability has to take into account the mass market, rather than early adopters that are happy to fiddle with technology. So don’t believe the hype – the physical book will be alive and well for years to come.

Related articles

• Sales of Kindle books outstrip print books (i-programmer.info)
• Amazon UK selling twice as many e-books as hardbacks (telegraph.co.uk)
• Amazon and Waterstones report downloads eclipsing printed book sales (guardian.co.uk)

Winning the (news) War on Terror

Image by thisisbossi via Flickr

Last week’s US raid and subsequent death of Osama Bin Laden demonstrates both the power and the pitfalls of creating and reporting news in the internet world. If the advent of 24 hour rolling news channels sped up reporting, social media makes it even faster, simpler and consequently more difficult to control. We’ve all seen rumours that have gone from raw unsubstantiated tweets to reporting as actual news due to the lack of editorial filters in an open network world.

Given one of the first reports of Bin Laden’s death was via Twitter you’d think the US Government had seen and understood the double edged sword that is social media. But not really – in their anxiety to get the news out they claimed various details (Bin Laden’s wife was killed, he was armed) that later proved to be untrue. And that’s not getting into the whole issue of whether they should release the photo of his body or not.

It seems to me that there is a key lesson to be learnt – have a communications plan. Obviously a military operation like this has been meticulously planned, but the same doesn’t seem to be true of how the information was released. In a world where words are deeds, PR is a key part of the mix and one of the ways that success is judged. Release what you can, don’t make assumptions until you know the facts and consequently control the story rather than be forced into restating it multiple times. Only then will the US and its allies start to win the PR battle in the War on Terror.

Related articles

• Even With bin Laden Dead, War on Terrorism Isn’t Over (usnews.com)
• Did Osama Bin Laden Win the “War on Terror”? (alternet.org)

Afghan Wikileaks – why it needs old media

Image via Wikipedia

On a first look, the publication of 90,000 US military records on Wikileaks shows the power of citizen journalism and social media. It is extremely unlikely that any mainstream news organisation would have been able to get legal clearance to publish the leaked Afghan War records – you can see the lawyers going apoplectic at the very thought of it.

But how did Wikileaks get the crucial second source and endorsement for the documents? Not through its own resources or credibility but by sharing them with the New York Times, The Guardian and Der Spiegel. Only when they had cross-checked the information (and the media organisations had their exclusives) were they released.

It shows the essentially symbiotic relationship between ‘old’ media and new channels. Both sides need each other if they are to break big stories – and I can’t see this changing in the near future.

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• Wikileaks to Release Nearly 100,000 Internal Military Documents From Afghanistan [Wikileaks] (gawker.com)
• You: Wikileaks takes new approach in latest release of documents (washingtonpost.com)