No Internet? No Problem for New Peer-to-Peer Social App Outpost…

Unless you’ve been completely off the grid for the past 12 months (actually that’s the perfect environment for Manet & Mesh’s Outpost app but we’ll get to that in a bit), you’d have noticed that there’s a cultural revolution afoot at both ends of the political spectrum. The U.S. electorate has made it known that they have lost patience with the establishment and its relationship with business. It’s not just here in the U.S. either. A similar sentiment exists in the United Kingdom and other European countries. Folks have had enough with the status quo, big business, big brother, big bills and, well, just big everything!

While much of the current discourse concerns the relationship between the political establishment and big business, the anti-establishment feeling runs much deeper in the broader population. Large consumer software companies like Apple, Google, Facebook etc. have not been spared. To protect their futures, and in order to remain relevant, they have made headline acquisitions of fast growing young companies that have apps popular with younger users. Millennials and Generation Zs have already left, will soon leave, or will never use the likes of iTunes, Facebook and Skype, in favor of new apps and services, many of which are yet to be created.

Five years ago Tech Crunch’s Sarah Perez penned a harbinger article “The New Social Network: Who’s Nearby, Not Who You Know,” concerning the emergence of a new kind of social network based on geographical proximity. Sadly, some of the pioneers in this area mentioned in the article, like Mingle and Igobubble, are no longer with us. However the point Sarah made that ‘It seems like each service could be a part of a bigger whole – a new proximity-based social network that puts location first, people and content second’, was an insightful prediction.

The experience of pioneers in this area, combined with the use of new technologies such as off-grid mobile mesh networking, more robust peer-to-peer connectivity protocols, including Bluetooth 5, and end user’s appetite for new tech experiences, provides a perfect platform for a new breed of social apps. Combine this emerging platform with growing end user aversion to the status quo and you have the perfect set of conditions in which a new type of social communications app will take off.

Bluetooth 5, which is due for release late 2016 will quadruple range, double speed and increase data broadcasting capacity by 800%. This will allow far greater peer-to-peer range and content sharing over Android and Apple peer-to-peer frameworks. Early peer-to-peer messaging apps “FireChat and  Jott” have certainly found niche markets but a peer-to-peer social app has yet to emerge.

Enter Manet & Mesh’s Outpost app.

In much the same way as Pokémon Go changed the rules of the game by using geo-based augmented reality content for its phenomenally successful game play, Manet & Mesh’s Outpost app represents a seismic shift in social apps: It doesn’t depend on an internet connection to connect users or to exchange data and information.

You can download the app in remote locations where no internet connection is available. It uses ad hoc mobile mesh networks made up of users’ devices and WiFi networking devices. The company is pioneering the development of what it calls ‘Data Beacons’ which add storage and connectivity to local mobile mesh network infrastructure. Outpost allows users to connect with others in their local  proximity to message, share data, based on common interests, and engage in social interactions.

While the company is at an early stage its founders are no strangers to start-up challenges. Oscar Jenkins is a native Australian who moved to the United Kingdom in in the early 1990s. He started and ran a series of pioneering award-winning internet and mobile companies. He moved to the U.S. in 2015 and has been waiting for the right opportunity and to meet a technical business partner for his next business.

“Manet & Mesh Tech is perfectly placed to take advantage of a seismic shift in how younger users and early adopters will interact and share data securely and directly rather than via Internet. This is by far the biggest opportunity I have seen in my 25 years at the forefront of tech and internet development”. Oscar Jenkins

Joe Chavez, Manet & Mesh Tech’s co-founder, recently met Jenkins in Reno for beer and a chat about an idea Jenkins had been mulling over since Burning Man 2015. At this first meeting they clicked and immediately realized they were completely aligned on a vision for off-grid apps and services. Aside from his day job as a principal software engineer, Chavez has designed and developed mobile mesh systems for communications, gaming and IoT verticals. He is deeply involved in Space Apps Reno, a hackathon organized by NASA, and through his work on beacon technology holds a patent concerning beacons that contain relative directional vectors that point to location or objects of interest.

Jenkins and Chavez have bootstrapped their company to date and are now searching for investors on AngelList and Gust, from whom they are looking to raise $1m in seed funding to take business to the next stage and beyond. The pair’s unique blend of experience and creativity is a solid foundation for a tech start-up and their passion to realize their imagined future is extremely contagious. Manet & Mesh Technologies certainly is a  young tech company to watch.

AngelList: Manet & Mesh Technologies Inc.

Gust: Manet & Mesh Technologies Inc.

Website: www.manetmesh.com

Oscar Jenkins LinkedIn

Joe Chavez LinkedIn

 

The Google AdWords Trap

indian-call-centre

Back in 2004 when Google had just moved to the Googleplex, had less than 1000 employees and did its unusual IPO for $85 a share, I was in the United Kingdom pulling my hair out because Google AdWords was ripping me off. I couldn’t believe I was the only small business with click rates on my ads that exceeded the number of ad representations I was getting. I spoke to some colleagues in my industry. They confirmed they were having the same issue, so I contacted the press.

I’m pretty sure my experience revealed the world wide issue of Google AdWords ‘click fraud’ when on December 6, 2004, the article Advertisers’ budgets hit by growing cost of ‘click fraud’ was published in the Financial Times, authored by IT Correspondent Maija Pesola.

I’ve had a love hate relationship with Google AdWords ever since. I’ve recently dusted off my rusty AdWords skills, in my capacity as a marketing consultant for a client. Yes, AdWords has certainly grown up a great deal since I last used it but I’m afraid to say I’ve confronted a whole new set of challenges and one of my quotes back in 2004 still rings true,

“When it works, it works really well, but the whole system is based on underlying honesty. Once that is undermined, the whole thing falls apart like a house of cards.”

However this time the ‘honesty’ issues, or perhaps competency issues, are due to Google’s unimaginable success.

I set up a new AdWords account earlier this week. Slick. I got a short list of keywords and phrases together and knocked up two ads. That’s when my difficulties began. Not slick. Both of my ads were rejected for various capitalization issues. I addressed these but then both ads were disapproved because the destination site, to which the ads were connected, threw up the following issues ‘site violates policy’, ‘site not working’ and ‘malware’. I reviewed the policy and our site. I could not for the life of me see where, or how, we had fallen foul of the rules, so I called AdWords support.

A pretty standard automated routine took my details, including my AdWords Customer ID. I was then routed to a call center in Manila, where I spoke to Lizzy in her hard to understand English, I had to go through the whole process of providing the details I had just proffered during the automated process and gave her details of my issue. Lizzy then told me her job was to get me to the right person to help. Arrrgggghhh…

After being placed on hold for a few more minutes, I was connected to Balla in India. Guess what? I had to provide all my details again and explain my issues. By this time I had been on the call for over 20 minutes. Balla told me that our site contained the word ‘Guarantee’ and because Google was trying to ‘cut down of gimmick site promises’ this word was not allowed. Rather than argue the point with a contractor in a call center in India, I resolved to edit our site.

Frustrated with the service I received I decided to leave feedback in the ‘short automated survey’ I was offered at the end of my call. As a native Aussie I have no problem with the Aussie accent, but the female Aussie voice that greeted me, and walked me through, the survey was so thick and shrill I had difficulty understanding her instructions and really did just want to hang up and end my Google call torture. I was brave and held out. ‘Please enter 1 for satisfied, 2 for dissatisfied’ I hit 2….. ‘Please enter 1 for satisfied, 2 for dissatisfied’…. I hit 2 again……‘Please enter 1 for satisfied, 2 for dissatisfied’. I gave up.

Upon checking our website, there was no instance of ‘Guarantee’ in our copy, images or code. A previous version of our site, which had been replaced over a month ago, did contain ‘Guarantee’ so I realized Google was probably reviewing a cached version of our site. I then went through the online process of getting a site review. The site review resolved that we still violated Google’s policies and we were no further forward.

I took a break for a day getting my energy back and courage up to deal with Google AdWords support again. That time I had Bella in India to begin with….You can see where that went and I still had two suspended ads and no way of navigating this insane situation.

You’d hope that companies that allow this sort of customer service nightmare would be subject to market forces and go the way of the dinosaur, but what are the chances that will happen to Google? I’m glad I have the weekend to gather the strength to have another go at sorting this out on Monday.

Google set out to disrupt the search market and in so doing has changed the world. As a company it has historically advocated interest of the little guy, but tellingly at the end of last year, the company dropped its “Don’t Be Evil” mantra from its code of conduct. Should we be worried about a soon to be 21 year old Google reaching the legal drinking age?

Of course any help or advice would be greatly appreciated.

OLD TECH – NEW TECH – HISTORY REPEATING? INTERNET WORLD 1996

Here’s something to consider. While the pioneers of the Internet were gathered in New York City in 1996, for Internet World conference, Mark Zuckerberg was 12 years old. He, along with many of his now peers I expect, was a wide-eyed enthusiastic prepubescent school kid.

In 1996 I was lucky enough to have been involved in the Internet for over three years. I had done a couple of start-ups and had a small exit under my belt. So armed with my shiny new JVC mini-camcorder, a Palm Pilot 2 and bucket-loads of new ideas for my next Internet business, I left the UK on a world tour, to see what was going on outside Europe.

I’ve been digging through loads of mini DVs from that trip, and can see many similarities from that time to present day. The difference is, the then new Internet companies are now “Old Tech” companies, having been outpaced by today’s “New Tech” players, who are pioneering a whole new wave of Internet. I found John Gage’s keynote fascinating to watch. I’ve shared the first four minutes with you here.

Enjoy!

 

 

 

The Importance of Independent Board Directors

I have been reading a good deal lately about board dynamics and structure. I’m advising several early stage companies, and I have been trying to work out if I would make a decent, independent, outside director for these and other early stage technology start-ups. From my homework, which included council from far more experienced entrepreneurs and ex-CEOs than me, I have resolved, as objectively as I can, that I have what it takes.

 

Funding a start-up

 

From my own experience I know that when entrepreneurs come up with a new idea or inspiration, more often than not, they endlessly bounce their new concept off friends, family and colleagues. The feedback provides great initial insights, and the brainstorming either helps to crystallize an idea or proves to be its undoing. This is the first stage of using outside advisors to help a business from a non-operational point of view.

Some business founders feel that at an early stage, a board is an unnecessary administrative chore. In my opinion this is a critical mistake. A good board, or group of advisors, can add a huge amount to an early stage company, and help founders in many ways. It’s also a good deal easier to implement policies and procedures at an early stage. These can then be refined as the company evolves.

If a company raises capital from sources other than the founder’s own bank accounts, a board is essential. Founders are critical to an early stage company’s board, and upon receipt of the first round of funds they will be joined by a representative appointed by the provider of capital, who may well have a different agenda to the founders.  The introduction of an independent outside director, at the earliest possible stage, is important as they should have only the best interests of the company in mind, whereas the founders and investors have agendas based on when they wish to exit etc. With each round of funding, other VC board directors will most likely join the board, adding to the differing interests. The longer the appointment of an independent director/s is left, the harder it is to make such appointments.

Inexperienced board members, who pay attention to the minutiae of a business, add unnecessary complications to the job of the CEO. A CEO should be empowered by the board to manage the day to day operations of the company, and to execute agreed strategy. I was joined on a board many years ago by two inexperienced, but I have to say well meaning, angel investors. They damaged the company by shifting the focus of the board to non-strategic operational matters. The situation was resolved by a very experienced CEO, outside non-executive member of the board. Prior to a critical meeting, he had a quiet word with the two directors in question. This resulted in both of them resigning, seemingly out of the blue, which was the best thing for the company. There was no animosity and they exited the business profitably many years later. This is one of many situation that helped me understand the importance of having experienced independent directors on a board.

Boards mature and grow with a business, and members at the outset may or may not be the right fit for the company when it reaches the growth stage, for example. Outside independent directors are key to ensuring a board is well prepared for the internal and external challenges a company faces through its evolution.

I thoroughly recommend the following for further reading regarding early stage boards:

Here’s how to find & keep a great outside board member

And

Startup Boards: Getting the Most Out of Your Board of Directors by the same author as the article above, Brad Feld .

NB.  I advise on business start-ups, relocations etc. as a consulting entrepreneur so please don’t hesitate to contact me to find out how I might be able to help.

Silicon Valley or Bust? 8 Things to Consider for your US Start-up

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A few weeks ago I read an amusing account by a German entrepreneur, Steli Efti, who moved to Silicon Valley to get his start-up off the ground, http://venturevillage.eu/moving-to-silicon-valley. His take is endearing but naive in the extreme. How nice to be an entrepreneur with a dream; sell everything you own in whatever European country, get a work visa, jump on a plane to SFO, start a tech company in sunny Northern California, get acquired by Facebook and become a gazillionaire. Easy right?

Steli’s advice from his five year experience:

1. Do market research;

2. Build a web site;

3. Market web site;

4. Visit Silicon Valley and network – a lot;

5. Hire a local;

6. Make sure you prepare correctly.

Hmmm…… Needless to say Steli’s start-up failed.  From his advice above I’m not sure how much he learnt along the way either.

Now I’m not saying I have the panacea for all entrepreneurs considering a start-up in Silicon Valley but I hope my list might provide a more pithy starting point for those contemplating such a move. So here are a few key pieces of advice from my own move to Silicon Valley, which by the way is what people who don’t live there call the San Francisco Bay Area.

First of all think long and hard before moving your business to Silicon Valley or to California for that matter. At first glance it looks too good to be true; loads of like minded techies and entrepreneurs; angel and venture capital to boot; the weather’s great; good schools; great lifestyle. Look a little closer however and the decision is not so easy.

1. The Idea. If you’re seeking funding for your new business, in order to attract investment the concept underpinning your start-up needs to be extremely compelling, easily understood and at the forefront of tech trends. It should utilize advanced modern technology, as well as being in an area that VCs are betting on for the future. It will need to be a business capable of global rollout and be in a market large enough to support multiple businesses all valued at over a few hundred million dollars each. That said, the spate of funding rounds, recent tech IPOs and headlining acquisitions, suggests the goalposts have moved from the hundreds of millions into the billions of dollars realm.

2. Visa. Can you get one? This is probably the most crucial step. If you can’t get a visa you can’t move to the USA – End of the dream. It’s not an easy process but there are numerous routes to take. You can do it yourself but my advice is to engage a specialist immigration attorney. The cost is well worth it. You can most likely identify the type of visa you can most easily secure at the outset and usually agree a fixed price with your attorney. This is the first step of many, which should result is securing Green Card permanent residence status. From there, the next step is becoming an American Citizen to take the process to its conclusion.

3. Location, location, location. Do you really want to be in Silicon Valley?

My take is Silicon Valley is from around San Francisco Airport south to San Jose. Its home to loads of the famous Silicon Valley names like Apple, HP, Google, Adobe, Facebook, AMD, Netflix, Yahoo, Intel, Symantec, Oracle and the list goes on and on and on. Its worth noting that San Francisco is becoming more and more the home to new tech start-ups too. My rule of thumb would be – no kids then San Francisco; Kids then the Bay Area. But be warned San Francisco and the Bay Area are expensive and the traffic is a nightmare, wherever you end up. If you decide to rent a home in a nice area be prepared for bill shock and be ready to move quickly. Family homes rent in days.

A less appreciated issues, when dealing with other parts of the world from the US West Coast, is Pacific Time (PST). PST puts you at the end of the World’s day, so no matter how early you rise and how much coffee you drink, if you’re dealing with Europe, you’ll always be playing catch-up.

4. Tax. This is a huge issue. Moving to the USA comes at a price. On the corporate front, regardless of where you incorporate your new C corp Inc. if your office is in California, you are liable for California state taxes, as well as federal taxes. Yes, there are exotic tax arrangements, with equally exotic names like the Double Irish and the Dutch Sandwich, that can be implemented to mitigate taxes but these are costly to set up and only really useful when large revenues are generated outside the USA. It also seems these are under threat http://arstechnica.com/business/2014/01/silicon-valley-attempts-to-slow-new-global-tax-avoidance-reform-proposals/.  Be aware there are 9 states that do not have state taxes; Alaska; Florida; Nevada; New Hampshire; South Dakota; Texas; Tennessee; Washington and Wyoming. Some of these like Texas, Nevada and Florida have thriving tech scenes.

On the personal front, if you are a resident of the USA you must pay income tax on your worldwide income and if you live in California guess what? Yep, you pay personal California tax as well as federal tax. And let’s not forget if you’re a high earner and  you’ve lived in the USA for a few years and then leave, you are liable for Expatriation tax on the increase in your net worth during the time you resided in the US.

And that’s not all. Let’s say you you sell your business while resident in California. Currently, you are liable for federal Capital Gains Taxes (CGT) of c.24%  as well as State taxes of c. 14%. Ouch!

5. Getting Funded & Silicon Valley Cartels. Attorneys, Accountants – CPAs, Angel Investors & networks, Venture Capital Firms, advisors etc. Travel down Sand Hill Road, Menlo Park and around a few city blocks in San Francisco’s financial district and you’ll find the highest concentrations of Venture Capital firms’ office on the planet. You’d be forgiven for thinking that because you know where they are they’re more easily accessible. Sadly nothing could be further from the truth.

I’ve found that there are numerous cartels, small and large, made up of angel investors who work with certain VCs, who in turn work with certain advisors and professionals. Breaking into these groups is difficult but its really how Silicon Valley ticks. During my search for funding for a WhatsApp like service back in 2011, which at the time had many key advantages over WhatsApp, and other OTT messaging apps, I  was told by many VCs that regardless of my technical advantages, because Sequoia Capital had just invested in WhatsApp few Valley VCs would bet against Sequoia Capital.

The volume of business opportunities presented to Silicon Valley-based VCs and angel investors is huge and ever increasing. They’re flooded with thousands upon thousands of shiny new tech start-ups seeking funding every month. Even the largest VC or most prolific angels are unlikely to back more than a fraction of 1% of the opportunities they review. Unless you are lucky enough to have a personal introduction your chances of securing a meeting are practically zero.

If you do get funded at an early stage, Seed or Series A, you can expect the terms of the investment to be massively weighted in favor of the investor. Be prepared for founder share vesting, which is far less prevalent in Europe. This means you could well get funded but then get fired by your VC or Angel partner and end up with zip. Early stage funding has been greatly benefited by changes to US law to allow crowd-funding. Great sites like Kickstarter, Crowdfunder and Angel List provide more equitable routes to early stage funding but its never easy.

6. Networking tactics. Its a scrum in the Valley! There are loads of mixers and events up and down the valley every single night. If you jump in you’ll get to know those who’ve been on the scene for some time and the newbies. Everyone’s got a pitch and everyone’s trying to connect with the money guys and talent. If you’ve got kids and decide to live in the Bay Area schools are a great place to connect. The more expensive the area, in which you live, the more senior the employees (parents of classmates).  The key difference between the US, particularly Silicon Valley, and Europe is that networking US style is encouraged and aggressive so go for it. This is the way in and you’ll find groups of types, and races that tend to stick together and that’s okay.

7. Talent. This is a simple supply and demand issue. There are too many tech companies in the Bay Area competing for too few engineers and other talent. If you’re an engineer and are looking for a job you’re in the right place for the big bucks. Sadly, if you’re looking to hire engineers it’s a chore and its expensive.

8. Credit Rating. When you move to the US, regardless of the credit rating you leave behind, you are a ghost and you’ll find it extremely difficult to get any credit whatsoever. Opening accounts of all sorts is extremely important. Don’t go nuts making credit card applications until you know you’ll not be refused. Too many hard credit enquiries damages your rating but you need at least 10 credit accounts operating for over two years to get a decent credit score. Expect credit card limits to be pretty small $500 – $5,000 tops for the first few years. Never miss a payment and use credit wisely because you’ll need a good rating for all sorts of unexpected things like private schools, home rentals, office rentals, visa renewals to name a few.  A great free site to track you rating is CreditKarma.com.

If you’re considering a move to the US from Europe, and particularly to the San Francisco Bay Area I hope the above helps in some small way. I have really just touched the surface and I’m sure I’ve missed something that will no doubt come up to keep life interesting for you.

In future posts I’ll try to delve into each of these issues in more depth so watch this space.

OJ

 

Ps. I advise on business start-ups, relocations etc. as a consulting entrepreneur so please don’t hesitate to contact me to find out how I might be able to help.