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.

private vs. comany live and more, interview with flimmit, part 2

this is part 2 of the interview with the austrian film search and download portal flimmit. if you missed part 1, it´s worth checking out. read on how setting up a company affects the private life of founders and what the flimmit founders karin, walter and ulrich would recommend to founders of new startups.

how to handle private life vs. work? 

work is private life and private life is work for a start. there is no real private life when realising your dream. the business is with you at all times, after the office, in the evening, at night, during sport, when seeing the family – always. our secret is not to see it as a burden but as a thing one loves to do.

see an animation from the beginning of flimmit:



what does pitching mean for your company?

pitching is a chance to move on. it is the thing to get the message across. karin haager: “i hated it in the beginning, but i really love doing it now. it demands constant practice, practice, practice - the more the better. the most difficult for me was to do a pitch for training reasons in front of my own company colleagues, but it’s one of the best ways to get settled for the real thing.”

you have already left some tracks in your personal careers, e.g. karin and ulrich, you have been film producers for six years, working on 20 projects. walter is a helicopter pilot. now you are start.up founders. what`s next?


we have a bucket list of things we still want to realise in our lives. however, now it’s all about movies! and we are aiming to keep it that way for a while.

how do you handle working with those „big“ film industry guys which try to stay in business by suing their customers?


no fear from the “big guys”. if you got something good, take a chance. and flimmit’s offer is a good alternative and a chance even for the “big guys”. plus we don’t criminalise our customers.



what are the three most important things to gain visitors on your site?

billy wilder once said: “a good movie needs three things: a good book, a good book and a good book.” the thing flimmit needs is permanent seo, seo and seo (editors note: search engine optimization). on top of that strategic cooperations with websites and word of mouth and our site gets rolling.



anything else you would like to talk recommend new start.ups for the beginning?

gang on in there and believe in your dreams. find good friends that you can work with. and always keep your eyes and ears open and take other people’s advice. finally react quickly (editors note to market and costomer feedback) and just do it! 


interview with flimmit - the austrian film search and download startup

legal film downloads in europe are a mess. therefore film search is broken too. the austrian startup flimmit is out to fix that. not having one legal framework like in the u.s., the european "rights" marked for film is hyperfragmented. first steps for a common legal framework are only in their beginnings. therefore just to google a film one wants to watch is nearly pointless. because finding the film of choice on a u.k. video download portal will lead to nowhere, as they will not have the distribution rights for austria.

find another search example in the demo video from flimmit:




flimmit searches and finds, lets mention "legal" again, content. so does it work? searching for "lord of the rings" there is a full-size feedback. download and buying possibilities, best prices, reviews, trailers and more. same goes for more recent productions, like avatar. just the recommendations leave room for improvement.

what drives the three founders of flimmit, karin haager (cfo), walter huber (cto) and ulrich müller-uri (ceo) to fix the broken film search and download business? (founders photos © flimmit 2009, photographs by lisi navajas)

i tried to find that out in a recent interview with them. as with the interviews with andraz tori from zemanta or christoper clay from soup, it is split up in two parts. read on the find out more on the startup in this part 1, on how to gain traffic and more in the upcoming part 2. so lets jump right into the interview:

tell me about the (three) most exiting things about starting up your company?

starting a new business is all about making your own ideas come to life. an innovation that first pops up in your head and then materialises into ones own company is a great for oneself and the self esteem. to inspire people with your idea and see the results when finally the thing gets going is important as well. 
 


what about the (three) most unfortunate things about starting up?
 

constant worries about financing and a possible lack of money are tough on the way to success. that leads to sleepless nights. what really got us up in sheer shock was the up and then arising fear that the innovation we have brought to the market is not unique anymore – that someone else has just done the same thing.


what are your lessons learned until now about tech/people/market/sales (choose what you prefer)?


people: it takes ages to find the right people to work with and it is a tough task to have them stay with you, above all due to lack of funds in the start up phase.
market: we have learned that customers / users never do anything because of good will. they want a benefit when using your product or service.
sales: the most important lesson learned for us: never trust sales forecasts!


when you hear the words "exit" and "shut down", what comes to your mind?


the term “exit” mostly appears in a conversation with possible financers. we do not yet think about an “exit” so far but we can talk about that in a few years time.
shut down means disaster, a sheer horror scenario. on the other hand when founding your own business you always have to calculate with a possible shut down. but isn’t that the essence of a start up: to always have the motivation to go that one step further?

to find out how the founders handle private vs. company life and more, read on in the upcoming part 2 of the interview.

inside tupalo, a photographic snapshot

all one regularly "sees" of a web start.up is , well, their web site. recently i got the opportunity to find out how it actually looks behind the scenes at the vienna based austrian-american startup tupalo, a social yellow pages community.

working together with the tupalo-team for an afternoon, we produced a photo line up for "deutsche-startups.de". to read more, head over to the tupalo blog.

tupalo won a first round investment from the austrian incubator i5invest. they subsequently reached an investment and a strategic partnership from herold business data.

estc2009 & leweb: do startup competitions bring visibility?

what do have collibra, flimmit & gnowsis and stribe, tigerlily & cloudsplit have in common? they are all young startups. they all hard won prices at two recent international startups competitions. and they need to be seen by potential customers & investors.

startups face many challenges, one of them is visibility. a way to address challenge, is to compete at startup competitions, like at estc and le web.

the third european semantic technology conference (estc) startup competition had 16 invited startups from 12 countries competing. at seven minutes per pitch only the well prepared teams

could bring their message across. many forgot to talks about how to make money though - or did at least not have the courage to present a „freemium“ model. see here for the video coverage.

at le web, being more internet-minded, the 16 startups as a majority looked to earn money with premium services, based on users gained by free basic services.

as business angels and venture capital money is currently scare in europe and probaply will be for 2010, sticking out of the crowd and gaining attention is a key. so how did the winners perform?

stribe already competed before. making it into the techcrunch50 in 2009 was the first attempt. leweb was the next, this time finishing in 1st place.

but does it really bring attention? does winning competitions bring the wanted visibility? gaeol delalleu, cto of stribes, thinks so. at leweb, he was approached by five venture capitalists.

looking at a streamgraph of the corresponding twitter activity, visibility seemed to get a strong push around leweb as well.

the profile of stribes is in the twitterworld strongly associated related with leweb is obviously strongly correlated with the startup competition.

illustrations thanks to http://www.neoformix.com.

collibra took a different approach to get visible on the fist hand. they made it into a price waterhouse coopers report and won the scientipole initiative award before gaining the first place at estc. if they got approached by vc is not know until they will start to leverage the prize when they start pitching for money in the next year. to know more on collibra listen to this interview.

based on the shere size differential (1:10) between estc and leweb as well as the fact that the semantic world is just about (!) to discover the use of tools like twitter, the results are less meaningful and the streamgraph did not reveal the option to change the timeframe according to the event.

a smaller, more focused event like the estc can significantly boost visibility, as investors attending the estc are already focused on semantic technologies.

what both, stribe and collbra, have in common is, that they have no immediate need for investment. however both are powering up for next rounds in 2010. the visibility is already gained.

five things for startups to expect from mentors & the other way round

the estc2009 innovation seed camp will introduce mentoring sessions for the pitching startups. the diverse spectrum of mentors present at estc covers founders, investors & the industry - laying the ground for interesting feedback sessions. so what can startups expect from those mentors? and the other way round, what do the mentors expect from startups?

let´s break it down into two sets of five :

5 things startups can expect from mentors
1) critical questions - no answers, no solutions.
2) instant feedback on how each and every startup gets its story across. if the pitch is bad, it will be made obvious instantly. that´s a good thing.
3) the impression a startup has on a mentor will be based 95% on pitch, 5% on executive summary et. al.
4) mentors have contacts (businesses, investors, lawyers,...) and some will help you with them - if they value the startup. if not, not more then polite friendliness can be expected.
5) not every mentor will be interesting for every project (and the other way round). that´s ok.

and now, let´s flip sides:

5 things mentors expect form startups
1) passionate, enthusiastic open entrepreneurs are welcome. self centered show-offs looking for adulation will not feel served well.
2) feedback can be direct & rather blunt - better from mentors then your customers, investors or potential employees. so startups must not be offended but take the feedback as is its & do with it what they think is best for them.
3) mentors will want to get ideas on what´s happening in the markets. some will search for investment.
4) mentors invest their energy for prepared teams. startups using the "next best" slide set available, preferring the check their tweets et al. rather then to get the most out of the sessions will receive what they seed.
5) and finally, mentors look forward to critical, even controversial discussions not yea-sayers. so let´s give them a good time!

for more on mentors see also the intersting interview of dave mcclure by mike butcher of techcrunch europe. for an overview of pitching opportunities head over to the finance mindmap. finally, to refresh the memories, find enclosed the start.upICT blog intro on start.up competitions.

startup competitions

View more documents from hannes.a.schwetz.

good relations, twitter & co. dexa 2/2

good relations, a semantic e-commerce ontology was another highlight of dexa. for part one of the coverage, see here. martin hepp, bundeswehr university germany pinpointed to the lack of semantic description of products offered online. this makes search, not only in the long tail, inefficient for sellers and buyers. with good relations he offers a open source basis to tackle this. best.buy and yahoo already use good relations to make their product easier to find. enthusiastically martin hepp was evangelizing for good relations.

Product Variety, Consumer Preferences, and Web Technology: Can the Web of Data Reduce Price Competition and Increase Customer Satisfaction?

View more documents from mhepp.

in contrast to most of the presenting scientists he focuses on an industry ready product approach. uptake of usage will be interesting to follow.

there have been many other interesting talks, like perspectives of web services intermediaries of urlich scholten et. al or fraud detection by human agents of daniel schwabe.

surprising was the lack of twitter and slideshare. only two other twitterers seemed to be posting. only one presentation can be found online. there is still a way to catch up with non-academic life by those which explore the future.

frogs, elections and e-commerce recommender systems. dexa part 1/2

the 10th edition of the international conference on database expert systems & applications, DEXA 2009, brought four packed days with scientific tracks. though seemingly a tough topic to handle, not everyone can jump on the bandwagon of hardcore tech tracks like „evolution of query optimizations methods...“ for data grid systems of abdelkader hameurlain and the like. so let´s focus more on generic topics and start with the „frogs“.

if one would put a frog in hot water, he´d probably try to jump out. if put in a pot of cold water heated steadily he wouldn´t. although not advised to try that, alessandro acquisti from carnegie mellon university (usa) used this baseline to show recent research on privacy behaviour in the internet.
working in the field of behavioural economics, he tried to find out how the arrangement of questions in surveys would influence the willingness of participants to reveal quite private information. like if people did betray an insurance or tax authorities. following the frog analogy (and thus one common design principle of survey design) people should be more willing to reveal sensitive information about themselves if the questions would steadily get more „private“. acquisti rejected this idea. so here we go, if you want sensitive information from your customers, get to the core right from the beginning.

e-commerce recommender systems have also been proven to be a hugely popular research topic. edith elking from the nanyang technology university in singapore brought up a worthy connection between elections and recommendation system.
recommendation systems have the aim to provide (internet) users with proposals, best fitting to their individual preferences. by an „magic“ accumulation of crowd, social, personal,... data every user should be served with her personal best recommendation. this is a difficult task on many dimensions, like context interpretation or manipulation hardness.

for the latter, most technical scientists try to invent new „bulletproof“ recommendation systems from the scratch. on the other hand have scientists since the french revolution thought about voting systems which should find the best candidate for millions of voters, making manipulations hard, easy to use and to compute.
as arrow´s theorem though states, there is no perfect voting system. based on this aspect of the talk the hypothesis can be stated, that the same will hold for recommendation systems.
it seem´s though that in recommendations systems the technology seems to struggle already with simple majority voting systems.

read more on "good relations", twitter & co in the second part of the dexa coverage.

legal gibberish of investors in plain language

investors inject money in start.ups and they want it back. x-times in the best case, although most of the time the just loose it. so in those selected cases where a start.up works out well ,they make sure to get their money out. how they want their investment back is nailed down in the legal contracts which come along the money. every start.up should know this terms ahead of an investment. why? because otherwise they are in a game in which they do not know the rules. and that makes succeeding impossible.

this is no legal advice - as that´s the job of attorneys. rather putting legal gibberish in plain language. links are there to offer alternative explanations and resources. this post goes in line with the series "six steps to venture capital" , in particular part 5 on negotiating: in order to negotiate well, one has to know the typical terms in vc contracts. so here we go:

tag along rights/co sale rights
protection for minority shareholders. in case the majority shareholder sells his shares, the minority share holder can demand his shares to be sold on the same terms to the buyer.
this avoids that e.g. a big stake of the company get´s sold off to a strategic buyer making the remaining shares de facto un-sellable=worthless.
link investopedia

drag along rights
protection for majority shareholder. obliges the minority shareholder to sell his shares to a buyer on the same terms as the majority shareholder.
the idea is, that e.g. a one percent shareholder must not be able to block sale respectively the exit of an investor.
links: investopedia, slashstar

pre- post money valuation
definitions of company value. if a company is worth one million before an investment, this is the pre money value (before vc money gets invested).
after a two million investment, the value increases to three millions (one million company value plus two million cash), called post money value.
link investopedia, socaltech

anti dilution provision/clause
protection for investor. forces the transfer of shares from the initial shareholder to the investor in case the value of a firm decreases in the period after the investment.
if an investor a puts 1 million in a company which was worth 10 millions (before his investment = pre money) he will get 10% of the shares and the company value increases to 11 millions (post money). now assume there is another investment round with investor b only willing to invest 1 million at a company valuation of 6 million. this will trigger the anti dilution clause, as the company value decreased from 11 million to 6 (=down round). in this case investor a will demand shares form the initial shareholder in order to be compensated for the devaluation. e.g. increase his shareholding such that (after the investment of investor b) he will finally hold 15,71% of the shares (0,1571*7=1,1).
links vcexperts, investopedia

(full) ratchet
protection of investors. typically a performance depended anti dilution provision which (completely) compensates an investor for the devaluation of his shares (see above) as agreed goals are not met.
e.g. an investor injects money in company according to milestones, like sales revenues. if milestones are not met – thus leading to a lower company valuation - the initial shareholders loose shares to the investors.
link vcexperts

earnout
protects buyers, brings upside for sellers. the final price of a company depends on the performance within a time period after the transaction.
buyers of a company pay a base price for the takeover of a company. if e.g. in a period of one year after the buying the company outperforms its profits, the sellers gain a premium.
link investopedia

exit preference / participating preferred stock
protects investor. in case of a company sale, money gets first distributed to the investor and the remains to the initial shareholder. the method of distribution can vary widely.
one way would be as follows. A company gets sold 5 years after the investment of 1 million for 50% of the shares. of the exit proceeds of 5 millions the investor gets the initially invested 1 million. then he takes the interest rate of 15% per year for his invested money (around 1 million), leaving 3 millions. having 50% of the shares he takes another 1,5 millions, leading to a total of 3,5 million (3,5x or 28% per year). the remaining 1,5 millions go to the initial shareholder.
link wikipedia

pay to play
protects new investors. In case of a new investment round, the former investors/shareholders only keep special rights, if they participate in the financing.
special rights can be e.g. nomination rights for the advisory boards, anti dilution protections, or exit preferences. this clause intends to motivate old investors to support the company if further financing is required. also the governance is simplified, as old special rights get successively removed in new financings round.
links altassets, wikipedia

so much about legal stuff. no reason to let it come in-between the core business and the product. just one thing to look after and to get done right.