the internet of things middleware battle

after having mastered the social graph (aka facebook) and the knowledge graph (aka google knowledge graph), it is now the time to tackle the "physical graph", also known as the "internet of things" (IoT). this was the mantra of the 2012 paris edition of leweb. and while more and more consumer products appear, behind the curtains, the "battle of the middleware" just started.

while the concept of IoT is around since 1999, only now smart consumer products appear. be it clever thermostats (nest), emotional email writing interfaces (muse), seemingly intelligent connected toys (ubooly) or the omnipresent activity monitors (fitbit, fuel). and they are just the beginning of a wave, which should reach it´s full extend in 10 years according to tony fadell, founder of nest. 

there is something, which lies under the surface of those equally interesting tools and toys though. how do all those physicals devices get connected and how are the data managed in a meaningful way for the user? when exploring this, one discovers a "battle of the middlewares". 

whatever new trend the it-sector is running after there is one common phenomena to be observed - and IoT is no exception to this. everyone like´s to be "the one" in the middle - the one to rule them all. thus not only enabling a multitude of services with reduced implementation time but also harvesting through system lock-in in the long run.

at leweb alone three middleware solutions for IoT were introduced. smarthings, an ambitious kickstarter project trying to cover the whole stack, from development platform to dedicated hardware. sense, from the founder of the wonderful but not so profitable nabaztag, more focusing on the data integration side. and finally ninja blocks, a startup looking more at the hardware side with a open source approach.

but that´s not all yet. there are more folks on the battleground than those three:

on the european level, the internet of things initiative and the open source solution for the internet of things in the cloud try to set the general framework for the connected world of things. then there is the early IoT middleware project hydra and if that would not be enough, there are another nine contex-aware middleware systems at hand. 

and if the middleware multiverse would not be enough, big corporates like ibm enter the battle and throw the messaging queuing telemetry transport protocol "MQTT", the equivalent of the http protocol for objects, into the game.

so what todo with all that?

well, when setting of to tackle a physical graph project, one might consider the following three things. first, lookout if there is a softwarestack already existing that allows a faster implementation time of one´s own project.

second, all those projects are a actually a "map" where to find the right talent to implement one´s own project. 

third and finally given the time frame until mass adoption for IoT products, financial investments to create real physical goods, the additional costs & time for pivoting requires even more focusing on the minimal viable product in combination with alternative investment approaches like crowdfunding. but that´s another topic to be covered.

seven reflections on starting lean

in the recent “lean startup vie #3” meetup at the sektor5 coworking space in vienna, andreas klinger from lookk summarized his startup experiences so far. let´s go along his seven reflections on starting lean.

1) go a small as possible with your product

2) launch several ideas at once

3) code as late as possible

4) care less about fund-raising

5) get two mentors

6) don´t take public money

7) choose team on gut feeling & check regularly

@1

in hindsight, their original startup idea, the austrian startup formerly known as gamrz, could have been broken down to six startups by itself. there is a simple check, if a startup concept is too complex: if there is an “and” in the explanation what a startup does, it´s too complex.

@2

while rigorous a/b testing for internet startups websites is an imperative, testing different ideas or products in the same metric driven way isn´t. there is no need to actually have the different products ready to ship. it´s just about offering mock-ups through the web and analyse the customer’s reaction.

@3

nothing to be explained about that. although the most tempting thing for technical founders, as that´s where their comfort zone lays.

@4

venture capitalists do not care about startups. they want to invest as cheap as possible, as late as possible. good venture capitalists look only for market traction in their investment selection.

@5

if entering into a new space with a startup, get two mentors from exactly this sectors. pay with convertible notes.

@6

“they are the worst”, stated andreas strong-minded. state funds are designed for classical small & medium sized enterprises. that is a too tight constraint for lean startups, which will change directions very fast in the early phase.

@7

trust in the “gut” feeling in selecting team members. writing down the thoughts about the newbie and checking those notes every two weeks to see how she progresses helps to structure.

startupweek2011: the four winners

the startupweek 2011 - a new startup conference including a startup competition held in vienna - had four winners: the conference hosts, the startup region vienna, mysugr & mysugr. and this is why.

for the first time ever a significant startup-conference was organized this very week (3. - 7. oct. 2011) in vienna. besides the startup competitions at leweb and europas the startupweek left a serious mark in the european internet startup scene.

empowered by the success of their startuplive events, the conference organizer STARTeurope , supported by initial factor, mixed four ingredients for their success. their very own entrepreneurial spirit, the professional network of inital factor with the announcement of their new fund speedinvest & the involvement of techcrunchUK, aka mike butcher (find his coverage here).

being overbooked with max. 1.300 paritcipants allowed, including 100 speakers, 500 startup applications with 50 invited startups from all over europe, STARTeurope delivered a professional managed conference.  the cross over of the monarchy style location with the future of european internet startups just added to the success.

while vienna is recognized for the quality of living, it does not have  the label as being a startup city -  like london, paris or berlin. quite to the contrary, there are some austrian startups which stated in private discussions, that they should have started their business directly in london and not in vienna/austria. one main reason being the lack of venture capital funding.

luckily for the growing vienna startup scene, speedinvest offeres now a initial funding source. one must not overlook though, that follow up investments will still require the startups to look abroad. with only one local private early-stage investor, startups in vienna do face a local monopoly. thanks to the mobility of new startups like egoarchive, which recently moved to copenhagen, this can be only considered as a problem for those not willing to follow the money. 

therefore combining quality of living, a growing ecosystems of startups with new funding possibilites, vienna just upgraded itself in the european startup landscape.

and then there is mysugr. their startup idea born out of their own personal experience with diabetes, the founders frank westermann and fredrik debong (also co-founder of STARTeurope) won the hearts and the wits of the jury and the audience. 

mysugr makes logging the daily diet easy and provides help for the diabetic on how to manage his daily nutrition with the help of their mobile app. unlike competitors like "on track diabetes" the app and the services around are a "medical device" grade. mysugr is in alpha mode, but take applications here. see also a video where fredrik explains what mysugr does here.

so why is mysugr a two time winner? 

not because they won both prices (€30.000, 3 weeks in silicon valley) of the startup competition. not because the rocked the audience to standing ovations including a champaign shower for mike butcher - the outstanding host of the startup competition finale. 

but (one) because the showed that it is worth to bring one´s very own startup idea to live and fight it through. and (secondly) for the exposure they generated by inspiring the audience & the jury at the pitching competition. this will turbo-boost them in their next steps towards customers, investors and industry cooperations. 

while the future of mysugr looks promising many challenges lay ahead of them. the same holds for the startupweek2012, as the organizers set their own bars high. being a startup by themselves, that will however only encourage them to make it even better in 2012.   

how to finance your (startup) dream

ideas on how to finance your startup dreams, proposed at the barcamp vienna 2010.

how to finance your (startup) dream

View more presentations from hannes.a.schwetz.

"rutschgefahr!" founders terms in german venture capital contracts

multiple liquidation preferences, full ratchets and founders warranties are on the rise on the german startup market. the positions for founders and new investors in new financing rounds get worse in 2010, as a bearish venture capital (vc) market dictates tougher conditions.

in order to avoid "rutschgefahr", german for slip hazard, when negotiating an investment round, read on to get the facts right.

a recent study of the german "mlawgroup" on "vc deal terms report 2010" (german only) gives quantitative insights into an often less transparent market. take the waring, plenty of numbers coming up - plenty of facts to get the own expectations right.

the study is based on feedback on 30 seed fundings, 36 series a and 16 series b rounds. the german "high tech gründerfonds" was taking the lead with 27 investments of 66 early rounds, thus making it the first address for young german startups.

so what to expect as a founder team, when sitting down with investors?

founder vesting is dominant, in 73% of the seed investments. vesting periods are between two to four years. allowances on the vesting are the minority with just 40% of the deals for only 25% of the founders shares.

good leaver/bad leaver clauses gain 18%, up from 32 to 50% of the investments. most good leavers can expect to gain a fair valuation of their shares (73%, up from 49%) though.
venture capitals seek for preferential rights in 78% of their investments. simple (1x) liquidation preferences are seemingly unavoidable in the seed stage (73%), while multiple preferences (2x) are a minority with only 7%. 20 percent of the feedback forms contained no answer on that question though.

exit preferences are common (53%) with an average of 5% interest p.a. on capital invested (8% last year) , although a maximum of 20% was reported.

while founders warranties remain an imperative (95%), pay to play seems to become a scare species. no seed round saw such rulings, series a rounds just in 23% of the cases.
non compete clauses for founders are enforced in 100% of the seed and in 75% of the a rounds with average durations of 2 years. on average founders get a half year salary in return.

anti dilution provisions are either weighted averages (51%) or full ratchets (35%), with a clear rise in the latter.

mlawgroups commented the tightening of conditions for founders as questionable. they could not understand how the worsening positions of the founders could help to prepare the founders (and existing investors) well for exits. for a law firm, this is a rather strong statement.

so much on the numbers. good thing with the study is, that it provides a useful basis to get one own´s negotiation aims right.

read more on general terms & conditions of vc contracts in "legal gibberish of investors in plain english" and in the series "six steps to venture capital".

"get a free portrait!" & more practical guerilla marketing examples

marketing budgets are a scare resource for every startup. finding innovative ways to reach more customers with less money therefore is key. "guerilla marketing", a concept introduced by conrad levinson in 1985 can be one answer.

wikipedia describles guerilla marketing as "...an unconventional system of promotions that relies on time, energy and imagination rather than a big marketing budget." so much about the theory, but how to put that in practice? let´s have a look at three recent examples.

the first one is from the last barcamp vienna 2010 (thanks to the organizers rolf & max and the sponsors by the way!). when everyone was invited to post their proposed sessions, young photographer christian lendl put up the following "portrait photo for a link for a link" to his homepage.

by spending one hour of his time, he reached around 60 barcampers, almost a third of the attendants. now for marketers, that is a extremely good conversion rate! 60 people remember his name and will put links on their blogs, so his own website will rise in the search rankings, without one euro spend on adwords.

what about riding on the hype wave of someone else, to gain customer attention?
in this case it was the company ifixyouri using the apple ipone 4 hype to demonstrate their dedication towards their business: repairing iphones. the upcoming ihpone is supposed to use a 30 times more flexible front cover then used in the iphone 3gs and should therefore be less prone to breaking. at their company blog they published a post "iphone 4 glass - will it break?" to check that out. so they took a new iphone 4 an threw it on the floor. the glass broke at the third try.
disproving the impression the one could get from apple´s presentation, that the new glass would be much more durable, brought them plenty of attention. cost? approximately 30-40 us$ (they sell the iphoen 4 glass repair for 69 us$, so their actual costs will be much lower).


considering the ranking on techmeme and the respective discussion following, that was much more attention time then they would get for 40 us$ worth of printing standard marketing folders. p.s. that they maybe got inspired by "will it blend" does not make this guerilla marketing any less effective.

let´s move on to a third example, graffiti style guerilla marketing. regardless if one considers graffiti as art or daub, they are everywhere and the are a provocative in every way. using graffiti in the public space form marketing purposes remains illegal though(at least here in austria).
although sometimes graffiti are used without raising too much attention of the city authorities, this example of using graffiti style advertisement of telering, a local austrian mobile phone network operator, did not go unnoticed.
as telering was not allowed to spray the advertising message all over vienna the just thought different. why spraying colour on those walls which is forbidden when you can clean the walls - which is perfectly legal? so they did some selective cleaning, whileprotecting a dirty brick wall by a stencil. and that was the result:

again, the cost of the idea and "cleaning" their message on the walls showed true guerilla spirit and was in perfect relation to the attention gained.
that were three examples of great creative approaches to marketing. so what´s the guerilla marketing campaign for your start.up?
p.s. if the guerilla style sounds interesting, why not checking out another idea of conrad levinson´s book "guerilla marketing": "5 words to describe your business".

interview with thomas r. koll about his photostre.am project

photostre.am is a portfolio service for photographers using flickr. recently i had the opportunity to interview the creator of photostre.am, thomas r. koll.

every photographer wanting to present her photo work without using technical skills while remaining on flickr at the same time is in the target audience. no double uploading necessary.

photostre.am is jumping right into a crowded market. competing with hosting one´s own website, using widely available templates, specialised services for photographers or with services form fluidr, viewbook, pullfolio, deviantart or alternative approaches like flickroom, using adobe air.

at the barcamp 2010 in vienna, i had the opportunity to sit together with thomas for a founders interview about his motivations behind the project. (photo by thomas r. koll, view his photostre.am here)

start.up: thomas, what´s motivating you to work on photostre.am?
thomas: to learn, that´s my top motivation. and the pleasure to interact with users of photostre.am.

start.up: what are the most difficult things working on photostre.am?
thomas: photostre.am is taking a lot of time and therefore competing with the "bread" jobs i have to do in order to make a living. being a one-man show, it is furthermore tricky to cover areas like interface design, which is an art by itself. finally to prioritize features is always a challenge.

start.up: how will you make money with your service?
thomas: through pro accounts and a white label b2b service. pro accounts will cost between 10 to 300 euros, depending on the features. compared with creating one´s own portfolio websites, that is rather valuable.

start.up: what would you recommend new startups, considering that you are already work on this project for around one and a half year?
thomas: first, make your to-do lists and prioritize in order to focus. secondly, choose your "bread" jobs - which finance your startup project - based on how much money you can earn on them.

start.up: finally, what´s the technical background, behind photostre.am?
thomas: i am using rails3, mongo db - which has nice horizontal scaling, two virtual servers - one for the app, one for the database and rackspace cloud.

start.up: thomas, thank you for the interview.