“Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation), there is one elementary truth the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, the providence moves too. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents, meetings and material assistance, which no man could have dreamt would have come his way. I learned a deep respect for one of Goethe‘s couplets:

Whatever you can do or dream you can, begin it.

Boldness has genius, power and magic in it!‘

- W. H. Murray in The Scottish Himalaya Expedition, 1951

It hasn’t gone away. People are still talking about it. There have been about 10 pilots of NFC (Near Field Contactless) technology and the results have been astonishing. The tests have shown 80-90% acceptance levels. So, now we’re in a position where the consumers want it, the technology exists and we’re still waiting. Why? How hard can it be?

To understand that, you need to understand a little but about the technology. Very simply, there is an NFC chip implanted in a phone. That communicates to a payment application on the SIM card (examples include Visa payWave and MasterCard PayPass). And the communication is done via a single wire protocol (the only free wire that connects to the SIM left in a phone at the moment). This means you need four players to make it happen: The device manufacturers (to put the chips in), the Mobile Network Operators (to enable the SIM), the financial institutions (to run the banking end) and an intermediary to pull it all together (known as a Trusted Service Manager).

The reasons we’re still waiting is because it’s proved mighty difficult to bring all these giants together.

Nav Bains, Senior Director of the GSM Association, put it down to three reasons as to why this hasn’t happened yet.

1. Lack of availability of single wire protocol devices

There aren’t enough devices with the NFC chip in yet. This is starting to change with the Nokia 6212 recently coming out but will take time.

2. Deployment of contactless infrastructure

It simply costs money (and I mean mega bucks) to roll out the infrastructure. There’s potentially a tipping point when 30% of merchants/retailers offer it, but getting to that 30% is expensive. None of the operators on their own have the appetite to invest in it so that their competitors can then enjoy the spoils. There was hope that Barclaycard would break this ground with their contactless card (which uses the same infrastructure) but there hasn’t been the take-up. This is the biggest sticking point.

3. Lack of clarity of the role of the Trusted Services Manager (the intermediary between the banks and the Mobile Network
Operators).

No one could agree what this role was which made it impossible for TSMs to set up. The GSMA is now taking a lead in documenting what it is. Hopefully that’ll help.

In short there are major hurdles still to overcome and whilst everyone wants it in place, the tensions between giants are standing in the way. It’s actually a great demonstration of game theory at work: in the long term everyone would like it (heck, it might be a major saving grace for the MNOs in an increasingly commoditised market), but in the short term because they can’t co-ordinate themselves. Therefore the default position (or nash equilibreum in game theory speak) is to do nothing.

What’s a real shame is that there should be a real opportunity for an innovative start-up to kick off this market, but with such big beasts waiting to pounce, there seems like very few opportunities for a start-up to seize and hold onto value in this market. I’d love to be proved wrong on this!

My guess is that it’ll be another 4 or 5 years before we see NFC hit a tipping point … which is a real shame.

Photo courtesy of the brilliant Barclaycard Advert for their Contactless Card

When I first heard about it, I have to admit it didn’t set my world on fire. But as I’ve got to know the company better (and I admit, as they’ve enjoyed awesome growth), I’ve come to like it more and more.

What I like most about it is that it makes 100% sense from a customer perspective. It is easier (no printing and stuffing and stamping), it is cheaper (because they’re mailing in bulk) and it is greener (because letters get printed out near their final destination). And it’s super simple to implement. You just add a printer driver to your machines. From a customer’s point of view, it’s a no brainer! And no brainers are good business!

Moreover, as a business it’s all about B2B sales which means it’s easier to grow scale quickly. They’re operating in a huge market and there are several obvious potential buyers once they get to scale.

My only potential concerns I’d have about the business model would be the low gross margins and the risk of the market commoditising, but once you get into international post the margins get fatter. And the options for product expansion into higher gross margin products are significant once you have the relationships with the large customers (a risk of course is losing focus and trying to do that too soon). On the risk of the market commoditising, well hopefully Viapost will be bought before that happens!

All in all, a very good, unsexy business! May they do well!

1. The value of learning is far greater than the risk of someone stealing the idea. You simply won’t move forward if you don’t socialise the idea and improve your pitch and learn from other experience.

2. In reality, the risk of somone copying you directly is incredibly remote. If they’re an individual then the chance of them having the gumption to do what you’re doing is low. If they’re a company, then they’ll be inherently slow and the chances are they’d rather partner with you than not. In my last start-up, every time we met someone who we feared might want to be able to copy us (and who also had the ability to copy us)) we ended up with a positive outcome, being it funding or a major partnership.

3. The people who are most likely to rip you off won’t sign. VCs (and in particular US VCs by reputation) are the people who can most likely connect your idea to people who would want to do it, and you’ll never get them to sign an NDA. They have the power in the relationship and you’ll never get them to sign. The people who will sign it aren’t the people who you should worry about.

4. It makes you look inexperienced. The successful serial entreprenurs I’ve met with to talk about new companies haven’t worried about it and have just shared their ideas. The new entrepreneurs who are just starting out are the people who worry about it. So, save yourself from looking gree, and tell anyone who will listen what you’re thinking about doing.

Flickr photo courtesy of gotplaid?

Whilst you’re in that phase of really wanting to set up a company but not knowing what, it’s quite dangerous. You are, what investors might call, an entrepreneur on heat. You get increasingly desparate to set something up. You’re so keen to jump at something that there’s a risk that you jump for the sake of jumping rather than because you’ve got the right idea. The main risk here is that you jump too early.

There are three things that I would recommend for people in this position.

First, focus on people rather than the idea. A start-up is a combination of what you’re trying to achieve and who you’re working with. Any investment will be as much based on who you’re doing it with as the idea itself. And finding someone to do a start-up with is tough. But as soon as you do, you have someone to help work on your ideas with. You can absolutely find a team before you find an idea. It’s not easy but the key thing is to make sure you have a shared outlook but a complimentary skill-set. There is no point in two management consultants forming a team. But if you get a strategy consultant, a developer and an online marketeer, then you’re talking! To find these people, the best place to start is to throw yourself into the start-up scene. Go to Open Coffeeand any other meet up that sounds interesting. 

Second, seek external sources of validation and listen to them. Run the idea past as many people as you can. Don’t worry about people stealing it. Just share and learn. If you don’t share it, the idea won’t go anywhere. And then once you have shared it, listen hard to the feedback and adapt it. Everyone will have a different viewpoint but the more people you speak to, the more of a consensus you’ll get. One of the reasons that having to raise money is useful is because it forces you through this process.

Third, jump … but remain very flexible. In reality, you probably won’t have the killer idea before you set out on your first start-up (as much as you might think you do) but that’s not to say that you can’t adapt your idea as you go along to become a killer idea. There’s a heck of a learning process in running a start-up and so long as you remain flexible you can adapt as you learn. It’s an old cliche, but most successful businesses that are sold or IPO look nothing like the original business plan. And most early investors would much prefer you to be flexible than to stick to an early plan.

In reality I think it’s very difficult not to be an “entrepreneur on heat” before your first venture. The main thing is to jump and start learning. The number of people that say to me “Oh, I’d love to set up a company but I just don’t have an idea” is ridiculous.  These people will struggle to ever become entrepreneurs. The key thing is to start preparing to jump before you’ve got the idea. Get the people you’d like to work with lined up, start getting involved with the start-up scene, look into spaces and companies and just talk to as many people about it as you can. Some people might call you an entrepreneur on heat, but it’s that passion that will see you through to success.

Photo courtesy of Flickr: trekkandy 

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They effectively help you to recapture lost users/customers. They cookie the user and then harass tempt them with relevant ads about your site shortly after they’ve left. Needless to say anything that helps conversion on a site is valuable and something like this that gives you a second go at the customer is incredibly valuable. You pay on a CPC basis and they can help you be clever about what ads to put in front of the customers. An excellent idea and a tool I wish I’d known about earlier!

Disqus
I added this because Fred Wilson invested in them and I figured the guys at Union Square Ventures aren’t stupid so they must be onto something. It effectively replaced my previous comments section and it is a bit like a comments section on speed. There are as many ways to sign in as you could want, and it shares the comments in it’s own forum so more people are likely to pick up the comment and/or post. Great.

Blogrollr

Again this is Fred Wilson’s fault. He has it on his site and I think it was built by a guy after he requested the functionality on his site. It’s a great idea: to be able to show people what you’re reading so they can see where your views are being formed and they can find things they might like to read. Unfortunately, as a Firefox pluggin it’s not perfect for me as I read a lot of blogs through Google Reader on the iPhone via RSSso Blogrollr doesn’t pick up what I’m reading. Also, it hasn’t yet been updated to work with Firefox 3.5 and so even when I do read online, it’s not picking up what I’m reading … although I’m sure it’s only a matter of time until that’s resolved.

Mippin
Yes, you see that flashing little box on the right hand side (up a bit … the orange flashing thing). That’s Mippin. And yes, it’s quite irritating on the blog when you’re reading it on the PC. But, when you’re reading it on a mobile (and I have to admit I’ve only tried it on an iPhone) it’s great. The only issue with it is that rather than checking the device for you and switching between mobile and PC mode, the reader has to find the small annoying flashing box and click on it to change the format. And on a phone it’s quite easy to miss it (even though it flashes!). It’s a great idea but still has a bit of a way to go.

Zemanta

Zemanta on the one hand is awesome and on the other quite infuriating. I came across it on Nic Brisbourne‘s blog and so thought I’d give it a whirl. It effectively reads what you’re writing and suggests photos, links, articles and tags that you might want to add. As a concept, this is awesome. It lets you focus on the content and gives you all the good stuff that really enriches your blog. Unfortunately, it’s not as smooth as it sounds. I’ve found the photos are a bit clunky when they’re added (although no where near as clunky as going to Flickryourself and getting them). I also have an issue that the photo from Zemanta won’t show up on my home page and so I still have to go and upload it for it to appear there (if you have a fix for this I’d be very grateful!). Also, the word links are often missing key phrases you’d like to link.  On the other hand, the articles links and suggested tag links are great. Like several of the other tools above, I think this is a brilliant idea and already a huge improvement on the status quo but it still has some way to go.

Photo courtesy of Flickr: minifig

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Further down the line they should also be able to develop the IP that can help throw any given reader articles on random topics that they wouldn’t otherwise search for but that they find interesting, effectively allowing the reader to browse in the same way they do a newspaper today.
The issue that will decide whether my6sense ends up a poorly monetised but valuable web utility or a large, highly profitable company is whether online news manages to monetise effectively. I believe that it will over the next couple of years and that makes my6sense very interesting indeed.

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There are three key trends that will drive change, and fast. These are:

1. The industry needs to find a way to make money, and it will. Papers are losing money and going bust. If the industry is to continue it needs to find a way to first cover its costs and then turn a profit. The industry needs to get people to pay for the value that it creates. In simple terms, it needs a viable and sustainable revenue stream. I’ve had some fascinating conversations with newspapers recently. One of them was thinking of pulling its website because it saw it as a cost centre with some small marketing benefits and a source of cannibalisation. This is obviously very short-sighted. Rather than pulling the site, they need to find a way to make meaningful and sustainable revenue from it.

2. The industry also needs to become far more efficient. Currently papers/magazines are inefficient in two ways. First, you only ever read a % of any paper or magazine you buy.  The current aggregation of content is simply inefficient as it is not tailored to the individual. Secondly, the replication of content across all of the different newspapers is unnecessary. You can have several thousand journalists writing about any given news article across the world. Whilst we need diversity of opinion and style (and language), the level of replication is too great for a global economy.

3. Online is going portable. The Amazon Kindle will be the start of a trend that sees consumers willing to consume news and editorial on the move and online more and more. Amazon will start this, smartphones will augment it, but my money is on Apple coming up with the killer device that sees this mode of consumption gain game-changing penetration. (They’ve seen the prize available with iTunes and the iPhone app platform and I can’t see them letting this one go. I also can’t see any other tech company who could create a device that could beat them). This will be the start of the end for printing on paper. And whilst it’ll probably take 50 years or more to kill paper, the initial swing will shock the industry significantly.

So, what does this mean. Are the newspaper and magazine brands going to die? No, but their source of value will change considerably. In five years, I think you could see up to 20-50% of people in developed countries consuming their written news and editorial content via a portable device. This will also mean that they will be more likely to use a site/platform that aggregates the news than go to the existing online channels. The value of the brands will be in acting as a quality filter and as a way for journalists to build their own brands. I might read the headlines on the BBC, the in depth articles on global politics in the Economist, the tech news on TechCrunch, the rugby reports from the Times, the football from the Mirror and then search for Matthew Paris on British Politics and Jeremy Clarkson for outlandish social commentary. All of this will come into my aggregator because I have selected it by brand and/or by journalist. I’ll read the headlines and sports scores for free and I’ll pay 2p for Mirror articles and 20p for Economist articles (and I won’t even think about it because the payment mechanism will be close to frictionless, as it is with iTunes and the app store). Newspaper/Magazine brands will be rewarded not because they have built a channel through which they can push content but for putting quality content into an aggregated channel. And they will be more profitable because of it. The aggregators that will win will be able to give me the content that I want and also to put content that I find interesting in front of me that I wouldn’t have otherwise found. They need to help me enjoy browsing as I do in a paper today.

What about for journalists? The top journalists will do better as they command more power. Since I’ll be able to read Simon Barnes’ column without buying the Telegraph they have far greater influence over the articles I select. They’ll still need the newspaper and magazine brands in order to build their own brands. Chris Andersen paints a different picture in which you get a proliferation of journalists, many of whom work for free as amateurs. I don’t see this happening. Blogs show that you can have a long tail of amateur journalists but the vast majority aren’t read. Those that are become quasi-journalists. I suspect the pool of journalists that can make money will be smaller but the quality of content will be higher. Those that make it (either climbing through the papers or their own blogs) will do better than they do today.

So, the future of news, generally looks positive. There will be consolidation along the way. Some big brands may be lost forever but in the long term, we should end up with a more efficient, more profitable, more personalised and more convenient source of news and editorial.

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Other relevant articles:

Here’s another interesting take on the future of news from Umair Haque in Harvard Business Review called the Nichepaper Manifesto.