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There is no doubt there are tight times for tech entrepreneurs in the US & UK right now, but there are substantive differences between the current climate and the big bust. Richard Waters of the Financial Times explores this in his piece Back to Bust? I'm quoted briefly on how things have changed.
"We're talking about products that are one tenth the cost of things that were hawked in the last recession," says Ross Mayfield, whose company SocialText, is trying to sell tools to corporate customers that emphasise the "Web 2.0" concepts of networking and collaboration.
I'd also add that new opportunities are created in tight times.
Entrepreneurs are a curious breed of optimist and contrarian pragmatist. We find opportunities in big problems and experiment at the margin of what we know works to solve them. A startup is the art of making do with less resources, and in turbulent times such resources are more difficult to acquire at speed. But the upside of a recession is there is less competition and time to explore whitespaces.
Keep in mind the best startups started in the midst of recession. From Apple to Microsoft (to Socialtext ;-).
For those entrepreneurs who worked through the crash, perhaps the most devastating time in the in Silicon Valley's history, we learned some solid lessons. About making do with less, finding real markets, work/life balance if not treasuring what we are working for and places where it is better to cooperate than compete in open source and on the web.
For Socialtext, the challenge with these macro conditions is ensuring you are creating and selling penicillin, not vitamins. This has meant a shift from Wikipedia-inside knowledge sharing communities to process-specific implementations for marketing, sales, support, partners and customers. We are helping our customers not only be productive, but enabling the edge of their organization to move faster in adapting to turbulent markets and seizing opportunity.
One of my co-founders at Socialtext is moving on. Pete Kaminski has decided to get back to the kitchen table stage. He is joining very early stage Sustainability startup Dreamfish. They are very lucky to have him, as he is at his very best when breaking new ground.
Such transitions are a big part of foundership, but working with Pete on a day-in day-out basis, in the garage or office, has been an absolute joy. His post is here.
Operational Web 2.0 would enter another dimension if Ted worked at PricewaterhouseCoopers.
Before
After
New research from Andrew Odlyzko, perhaps the best source on these matters, reveals that the net isn't getting overloaded with torrents and non-neutral applications, but instead is growing sustainably. If not below its potential. Andrew suggests that carriers move to stimulate demand:
"...there is not a single sign of an unmanageable flood of traffic. If anything, a slowdown is visible more than a speedup. This suggests that the industry might benefit from shifting its emphasis towards methods of stimulating traffic growth."
In fact, the 2007-2008 growth numbers are some of the weakest in recent memory. While growth remains healthy at around 50 percent a year, growth rates are dropping in many places. Overall, the most recent growth rate is the lost since 2003...
"Now, annual traffic growth rates of 50 percent, when combined with cost declines on the order of 33 percent, result in no net increase in costs to provide the increased transmission capacity," he wrote for Internet Evolution. "In a competitive environment, that means no increase in revenues, which is hardly a cheering prospect for the industry. If traffic growth could be pushed back towards 100 percent, where it used to be for many years, we would have pressure for increased revenues, and also for new technologies."
I find this fascinating because it is the opposite of what I've been hearing lately. At least from carriers.
Nate Anderson of ArsElectronica righly points out that the choke point is the local loop for most carriers. Is the reason carriers want to break Net Neutrality is to seek a subsidy to build their local infrastructure? Or just a subsidy in general...
Tomorrow the Marketing & Sales 2.0 Webinar series continues with presentations by Dave Keller, NewsGator, Enterprise GM and myself on Improving Sales and Marketing Effectiveness with Social Software.
Learn how business social software is being used by sales and marketing to:
Please join us at either 3pm GMT or 11am PDT on August 6th.
Establishing ties and communication across silos is a goal of many of my customers. Unfortunately, most companies have information flowing up and command flowing down with only executives coordinating across departments. Communication (and Coordination?) in a Modern, Complex Organization, a new HBS working paper by Adam M. Kleinbaum, Toby E. Stuart, and Michael L. Tushman combs through millions of emails, calendar entries and teleconferences in a large enterprise to reveal some patterns of working across organizational, spatial and geographic boundaries:
At the Enterprise 2.0 Open sessions a frequent question was if there were any gender differences to be considered for implementation and adoption. This research indicates that women are more apt to bridge.
Some of our better champions are women that work across these boundaries. And even better, its our job to help them succeed and get promoted.
The New York Times has an article about the U.S. State Department's Diplopedia. Eric M. Johnson of the State Department’s Office of eDiplomacy shared his learnings during the Wikimania conference in Egypt (video accessible if you use Internet Explorer, sigh).
The art of diplomacy excels with shared context that wikis can support. And while fundamentally State may gain productivity, particularly if they allow it to work across agencies, evolving from manufacturing era cable systems could evolve culture itself:
There was a larger point to bringing his message to Wikimania 2008, as the annual conference is called: if wikis can work at the State Department, with its fabled bureaucracy and attention to protocol and word choice, they can work anywhere.
There certainly is a culture of collaborative writing at the State Department, Mr. Johnson acknowledged: memos are drafted, massaged, passed up the chain for comments and then approved. But this form of collaboration is based on the notion that the more people who read something, the less chance it will be candid. Wikis, by contrast, are collaborative only in retrospect ― someone has to be prepared to be the first to write something, and deal with having those words changed by a complete stranger.
Mr. Johnson said his office occasionally gets calls from new contributors: “People will say, ‘I have something I want to post; I want to check before I do it.’ And we say, no, no, put it up.”
The decision to embrace wikis is part of a changing ethic at the department, from a “need to know culture” to a “need to share culture,” said Daniel Sheerin, deputy director of eDiplomacy, which was created in 2003. “This is a technological manifestation of a policy difference,” he said, a change he dated to when Colin L. Powell was secretary of state.
Emphasis mine. I'm not sure I would say that wikis are not collaborative in retrospect. They are in prospect, when words first written find collaborators and it turns into collaboration when their is a shared bounded goal.
Back when I worked in this sphere in Estonia, they didn't have legacy infrastructure and culture. I set up a Lexis Nexis account, ran persistent searches on diplomatic topics and sent out a newsletter daily by email. In retrospect, it was a form of blogging. If only I had the tools I have today.
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