The following scene plays out millions of times a day all over the world: A commuter is headed to work in her car. Keeping safe on the road is taking the majority of her attention. In fact, she’s blissfully unaware of the symphony of mechanical engineering that is happening all around her.
To keep the car moving, gas is being combusted in pressurized chambers to produce thrust to move the pistons up and down and drive the crankshaft. She doesn’t see any of that. Instead, she sees a visualization of that activity through the RPM gauge on her dashboard. The gas that is fueling the engine is being syphoned out of her gas tank and injected into the engine. She doesn’t have to worry about the level of fuel, because she can see how much gas she has right there on her dashboard via the fuel gauge.
And finally, she’s able to avoid trouble with the law and still arrive to work on time by maintaining an optimal speed, which is conveyed to her by the speedometer on her… you guessed it, dashboard.
Now, let’s remember this commuter as we examine another occurrence that likewise happens millions of times a day:
A CEO is sitting in his office.
He has 300 employees and his company produces small aluminum parts for model aircraft and cars. He is in the proverbial driver’s seat of his company, sitting in the office chair in the CEO’s office. Ensuring his company runs smoothly takes up the majority of his attention. Perhaps not as unbeknownst as the engine functions to the commuter, the CEO is aware that there is an abundance of activity going on all around him in his company. However, the data to measure that activity is not at his fingertips.
If he needs to know how production is going today, he’ll probably have to put a call into his factory foreman to ask for the figures. At that point, the foreman will have to email the data up to the CEO.
If the CEO wants to know how collections on the company’s accounts are going, he’ll have to walk over to accounting and ask for a report on the latest figures. Likewise, his queries to HR and customer service will be handled in a similar manner.
The way he is collecting data is rudimentary. If he was the commuter, he would be getting out of the car with a dipstick to check the fuel level. He’d also have his head out the window to hear the roar of the engine to estimate the RPMs and to know when to shift.
This analog method of data collection is why data dashboards are becoming one of the fastest growing segments of the software market. They take all of the data from a myriad of sources and visualize it in an easily digestible fashion. What used to take up the majority of senior management’s day is now automated and delivered in moments.
The improvements in efficiencies that this technology offers are plentiful. For instance, if a shipment of parts is delayed at the loading docks, this data can be seen immediately. Management could then make adjustments to the production queue in order to avoid a slowdown due to missing parts.
A sales manager could see the performance of his entire team up to the minute. That data could then be passed along to the C-Suite where marketing budgets could be adjusted in order to accommodate more leads for the sales team.
The possibilities are truly endless. Therefore, entrepreneurs and established businesses alike can benefit from this technology. With so many possibilities for reporting products, entrepreneurs can target a vertical, produce an innovative solution, and attack a wide open market. Meanwhile, the established business can identify a shortcoming in their data aggregation, identify a product that addresses that shortcoming and increase their productivity immediately.
Data Dashboards are not a new technology, but with more data becoming available and technology becoming ubiquitous through the use of mobile devices, the need for dashboards has become critical in companies large and small.
Newark Mayor CoryBooker cruised to victory in New Jersey’s special election tonight. As a long-term presidential hopeful, he’ll instantly become one of the Democratic Party’s most powerful voices. Booker represents a permanent shift in how Silicon Valley is trying to give an ideological overhaul to the Democratic Party.
Booker is a world-class tweeter, co-founder to an ailing video startup, and beneficiary of Mark Zuckerberg’s $ 100 million education donation to Newark schools. But to see how Booker might act as a legislator, it’s helpful to look at the policies of other tech industry favorites in the Democratic Party.
Mayor Bloomberg outright admitted that “we’re going to have more visibility and less privacy” in a candid radio Interview on his push for drone-powered surveillance. He also threatened to “fucking destroy” the taxi industry over its existential fight with ridesharing apps, Uber and Lyft.
As mayor, instead of outlawing stop-and-frisk, the racially charged practice of searching suspects on the street without a warrant, his approach was radical transparency. Every stop must now meticulously record the race, location, and reason; that data is then opened to the public for scrutiny.
His novel approach won accolades from Newark’s American Civil Liberties Union for balancing public safety and individual rights. But, a traditional liberal would likely have just outright banned the practice.
That is, one of Booker’s signature law-enforcement measures was imbued with some Silicon Valley idealism: Open the data and solutions will follow.
As a senator he’ll have a chance to bring an innovation-first approach to legislation. Here are a few predictions and an indication of the kinds of liberal policymaking that could become dominant within the Democratic Party.
Reforming the criminal justice system is a priority for Booker, especially focusing on teaching prisoners skills to re-enter the workforce. Social-impact-bonds pilots have leveraged for-profit entrepreneurs to find jobs for the previously incarcerated. With enough money thrown at the problem, startups could leverage data technologies to help with the process.
Education: Mandatory Transparency, More Charters, and Universal Computer Science – President Obama proposed an overhaul of higher education, including a new way to rate schools based on post-graduate employment. It’ll also financially support schools that want to experiment with MOOCs and a cheaper path-to-degree through online education.
There’s also legislation afoot to provide more resources to Science, Technology, Engineering and Math (STEM) courses. Booker will likely support it, and may even be the first champion of it in the Senate.
Immigration Reform – High-skilled supporter. Full stop. Last spring we did an interview during a Twitter town hall that Booker conducted in support of high-skilled immigration reform. He’ll likely oppose union-sponsored limitations to high-skilled visas, like a mandatory 90-day waiting period for foreign workers.
Surveillance Reform – Booker is unlikely to buck his presidential mentor on National Security Agency spying. He’ll likely move lockstep with the upcoming recommendations from the White House task force on surveillance reform. He might support more transparency in the surveillance process, just like Facebook and Google have proposed, but mass surveillance will continue close to current levels.
Surveillance isn’t entirely a traditional liberal issue, as many Democrats for voted for–and against–Representative Amash’s failed amendment to halt mass spying. That said, privacy will unlikely be a priority of Booker or the new Democrats.
Open Government – At SXSW, Booker promised that he’d use technology to open up the legislative process. The House of Representatives has been far more forward-thinking, experimenting with crowdsourced legislation, an online petition process for pending laws, and making data on legislation open to the public. Senate leadership has lagged — maybe Booker will pick up the slack. Or, ideally, invent a novel way of participation.
The new Democratic party still sees government as a force for positive change, but the indirect path of innovation and transparency as the best possible path to help society’s most vulnerable. It’s a bold new world for Democrats, and Silicon Valley is playing a big part.
I’m sick and tired of hearing about “lean startups.”
No offense to Eric Reis, who’s coined some very corporate Bingo-worthy phrases now enmeshed in Silicon Valley culture (such as pivot, minimally viable product, and continuous innovation), but there are a whole lot of things I think are wrong — dead wrong — with the entire concept. Here are a few of the problems:
The Lean Startup model encourages features vs. whole products
Silicon Valley is obsessed with companies that are built around a single feature, which appeals to a small number of acquiring companies. Think Mertado’s social shopping app acquired by Groupon or Summify’s social network summaries acquired by Twitter. It’s an epidemic. But customers, as opposed to acquiring companies, need wholeproducts to solve their problems.
And at the same time, it seems that many entrepreneurs have interpreted the Lean Startupmodel as an excuse to rush incomplete or fractional products to market. The result? Lots and lots of companies built around a handful of features that matter to almost no one, least of all customers.
It prematurely burns out our team
The pace of continuous innovation required by an MVP model is daunting to say the least. Look at Intuit’s SnapTax, which is testing 500 innovations during the two-and-a-half-month tax period. If you didn’t do the math already, that works out to 11 tests per day! This pace is frenetic and sure to burn out your team.
Plus, it strikes me as a waste of a rockstar developer’s time. After all, A/B testing, or its near cousin multi-variant testing, is a known animal these days. In practice here at Bislr, we find that about 70 percent of the things we want to test are ultimately not going to make a big difference to the business. True entrepreneurship is about figuring out what the big levers are and developing a smaller number of meaningful tests around those levers.
These are hard products to love
Customers should be up in arms when their favorite app gets discontinued, yet there is a lot less grumbling than you might think. Leanproducts are by their very definition not deep. These are products that are not easy to love, which is why we find companies acquiring them only to almost immediately discontinue the product or service.
Perhaps tech guru Guy Kawasaki summed it best, when asked recently about his golden touch with products:
“A great product is deep. It doesn’t run out of features and functionality after a few weeks of use. As your demands get more sophisticated, you discover that you don’t need a different product.”
It devalues architecture
Companies that focus on MVP tend to skimp on architecture, which just makes sense. If you don’t have time to build a whole product you also won’t make the time to invest in architecture. Sadly, no decision about architecture is a decision, one that will determine your success or failure as a company.
Lots and lots of companies competed with Evernote in its early days. Some like Catch even came complete with a colorful user interface. But Catch is gone now. Why? In a word: architecture. Evernote built a whole product around enabling people to capture, store, and retrieve their Internet memories. Architecturally, the product was built to scale into multiple products and into a vibrant ecosystem that targets independent software vendors to build on top of its platform through a program Evernote calls “Trunk.”
It leads to the wrong discussion with your investors
I’m all for building companies that have multiple exit strategies. The IPO route is not right for every company. But building a company around a handful of features specifically so it can get acquired strikes me as just plain wrong.
If you are a founder, then selling out early can be a path to extraordinary returns, sure. But it’s incredibly unfair to the executives, managers, and individual contributors you brought in for the specific purpose of building the company to greatness.
It distorts the Valley’s hiring model in weird ways
I’m thinking here of course of Nick D’Aloisio, the 17-year-old founder of Summly that was recently acquired by Yahoo. Personally I don’t know anything about Nick, but I do know that $ 30 million is a sh*tload of money to pay for a 17-year-old as an acqui-hire.
Nick may well be the most talented developer on the planet (even if his frontal lobe isn’t fully developed yet), but how are we going to get the next Dropbox or Evernote if we take talent like Nick’s out of circulation prematurely? I think both Nick and his company would have benefited from more time as an independent company to grow into greatness.
So what is the Alternative?
Take the MVP model with a grain of salt. Most of the time, it fits in the earliest phase of the company’s lifecycle when money is tight and time to marketing is everything. Keep iterating, but not in a way that subjects your team to the risk of burnout. Build your business to last, not to flip to the first company that comes calling.
And when approached by a larger company interested in “acqui-hiring” you and your team, ask yourself if it’s really worth it. These are deals that won’t build value and have the potential to destroy it.
Michael Sharkey is cofounder and CEO of Bislr. He started his first business to impress girls. Instead, he unknowingly ignited a career in business that has spawned numerous successful companies. While still in his teens in Australia, he developed two businesses: a tradesman directory and an ordering system for the mining industry. During this time, Michael helped his brother, Chris, market his holiday accommodation startup, Stayz. Similar to HomeAway in the United States, Stayz later sold to Fairfax Digital for $ 12.7 million. Together Michael and Chris cofounded Sharkey Media, a marketing technology agency designed to help other businesses develop successful sales and marketing automation technologies. In 2011, Michael cofounded Bislr, which offers an intelligent marketing OS. Michael has been featured on TechCrunch, Wall Street Journal, CRM Magazine, Reuters, Sydney Morning Herald, and ABC News.
A lot of virtual ink has been spilled over the years discussing the differences between SiliconValley and Silicon Beach.
Reporters who cover the topic mostly agree that the two are very different, but many haven’t enunciated how. They do concur on one thought: SiliconValleyinvestors are relatively more concept-focused than revenue- and profit-focused, while the opposite is true in Silicon Beach.
Why is there this regional investor difference?
How the two areas will change over the coming decade has not yet been determined. But, if entrepreneurs understand why the two regions’ investors are different today, they may be able to draw financial backers from both areas and put their companies on fiscally strong paths for the future.
In our roles as financial advisors and consultants, we’ve worked with a number of clients in both regions. We think the difference between investors has to do with three factors: time, space, and history.
Silicon Valley has existed for longer than Silicon Beach
The term “Silicon Valley” was coined in 1971.
Modern SiliconValley took shape during the tech boom of the 1990s. Investors in the Bay Area region have more experience investing in technology start-ups than their counterparts down south (to this day, they see many more deals in the seed and series A stages). They know that any idea, no matter how “out there” it may seem, could turn into the next Google or Facebook.
Silicon Beach investors haven’t experienced many breakout hits, so they’re more interested in seeing that start-up companies have proven concepts, workable products and real customers in order to feel assured that there is promise.
Silicon Beach is scattered geographically over a larger space
While arguably centered in Santa Monica-Venice-Playa Vista, its companies are spread over the entire 500 square mile area of Los Angeles. SiliconValley is mainly centered on the Palo Alto/Mountain View and San Francisco hubs. Talent in SiliconValley flows heavily from Stanford University and UC Berkeley, while in Silicon Beach it comes from UCLA, USC, Caltech, and others.
While buzz about hot start-ups can reach SiliconValleyinvestors quickly, good news may take longer to travel in Silicon Beach due to the somewhat fragmented lines of communication among the investor base there.
Silicon Valley investors have a history with the technology industry
Silicon Beach investors have a history with the media, entertainment and fashion industries.
There are many different types of technology start-ups in SiliconValley. There are social media start-ups, electric car start-ups, big data, and cloud-based start-ups. Though Silicon Beach also has a selection of technology companies, they have mainly focused their businesses on media, entertainment, e-commerce, fashion and lead-gen. Southern California investors are especially familiar with media, entertainment, and fashion, as they have been a dominant part of their culture for nearly a century.
They know that companies related to these industries can work, just that they need be done in a certain way. To boot, there is no shortage of local celebrities available to endorse their products.
As time goes on, Silicon Beach and SiliconValley investor attitudes may begin to synchronize, or grow further apart. Right now, time, space, and history are getting in the way of their harmony.
Entrepreneurs who understand why the two areas’ investors are dissimilar may be able to take advantage of those differences today. They may be able to draw in more investors, allowing their companies to draw in more revenue, and putting their companies in a fiscally sound position to survive however Silicon Beach and SiliconValley change in the future.
David Johnson heads TempCFO, a consultancy that outsources the accounting and finance functions for venture-backed companies. Through TempCFO, David has advised and mentored over 1,000 startups.
Garry Whitfield is a Morgan Stanley Financial Advisor in the Menlo Park Area. Formerly a practicing CPA, Garry has a master’s degree in Taxation. He served as the business manager and CFO for the multi-platinum and Grammy award winning recording artist Creed (and it’s affiliated companies), and cofounded the startup consulting firm, TempCFO Solutions.
Eric W. Johnson is a managing director in the Los Angeles (Century City) office of Morgan Stanley Private Wealth Management, where he advises an ultra-high-net-worth clientele primarily consisting of entrepreneurs in the technology industry.
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