The rise of chat bots and the fall of apps

It once was cool to build a mobile app and many startups in the past had built successful businesses with them and a minimalist web site. Now the chances of a new mobile app, creating mindshare and enabling a spot on a person’s home screen is next to impossible. We’ve reached peak app and new style of apps called chat bots are taking mindshare.

App stores are flooded, the majority of apps are rarely downloaded or found for that matter, as they do not rank.

It’s now harder than ever for a developer to build an app, that will replace the staple set of apps, a user does have on their devices. The frontier has changed to chat apps that have a conversational style interface either using text or voice (think siri). If you are building a new mobile app, stop! and reconsider how you are going to reach your target audience.

These new chat apps are leveraging existing instant messaging apps and agents on websites. Increasingly also APIs are being created and exposed to allow developers to interact with well known personal assistants like Siri. Some may argue that the interaction between human and computer is frustrating. I’d agree, having occasional back and forth sessions with Siri, to dial on my iPhone, a person I call regularly. However the situation is slowing improving as machine learning/AI technology improves behind the scenes.

Many will argue that we are not seeing anything new, that it is just the same technology and approaches that have been around for ages. The quest, as such to pass the Turing test where a judge can not determine if he or she, is talking to a machine or a person.

I think we’ve reached an inflection point, where a new class of conversation chat bot is being enabled by the gradual and constant exponential evolution of computing technology, sharing of open source component technology (such as natural language processing) in conjunction with the ongoing to quest to provide individually tailored answers to people’s own question through understanding the explosion of data available online.

This is also backed up by a dramatic increase in tech news coverage regarding startups in the US and with training/conferences covering this area.

So forget building a mobile app and start building a chat bot!

 

 

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Switching off from Aussie innovation for the time being …

The slow dawn of reality has crept into my thinking, that what I’m presently witnessing, is the rise of politically correct innovation within Australia. That is, that there is a rush on, to be positioned, to secure funding and “innovation wash” existing service offerings, ready for when government programs come into affect.

My high hopes for an ideas boom have been dashed somewhat of late. Not so much from the intent, but from the reality, that the intent does not match reality. There is significant education (dare I say re-education) required.

Let me show you what I mean.

If we look at the innovation website Business.gov.au. (their definition here ), it basically suggests, that innovation is about change. It follows:

What is innovation?

Innovation generally refers to changing or creating more effective processes, products and ideas, and can increase the likelihood of a business succeeding. Businesses that innovate create more efficient work processes and have better productivity and performance.

Now if we look at the wikipedia innovation article  it suggests, The term “innovation” can be defined as something original and more effective and, as a consequence, new, that “breaks into” the market or society.

Innovation is a new idea, or more-effective device or process.[1] Innovation can be viewed as the application of better solutions that meet new requirements, unarticulated needs, or existing market needs.[2] This is accomplished through more-effective products, processes, services, technologies, or business models that are readily available to markets, governments and society.

So from my perspective the first one, is inwards looking, about the term innovation (as in thats an innovative idea) to do business change or continuous improvement.

I’ve often argued that changing a business process to make it more effective is not innovation. However if that idea, is bought to market, as a new product or services offering, then it is innovation ie there has to be diffusion into a market or society.

Now if we look at the slick new marketing or education material (your viewpoints may differ on this) being produced by National Innovation & Science Agenda Australian Government it refers to how Australians have been good at Ideas, but now we need to get better at commercialising –  turning those ideas, into new products or services.

As you can see, there is a long road ahead, with a lot of jargon presently such as “Ideas Boom”. It will take some time for people, to agree on what things mean (even though they have great definitions available now) and to reach consensus. Then decisions will need to be made about how much capital is to be made available and under what investment thesis it will be allocated.

There are a lot of people shouting about a number of things surrounding these topics and if your not shouting the politically correct message too then no matter how novel and disruptive your idea or invention is, it may not benefit from the “Ideas Boom”. If this is effecting you, jump on a plane and go to Silicon Valley or elsewhere that may be appropriate.

I keep hearing about the lack of opportunity here in Australia, in many fields on podcasts I listen to occasionally. On those podcasts, when people ask eminent panel members about their thoughts on the subject, invariably, their answer will be that we do hope you stay and help drive the next generation. It always surprises me, assuming that these persons are in tenured positioned, how devoid their responses seem to be, from the reality of needing money (or some may say capital) and support to do so. Its this later bit, that’ll take so long to grow here in Australia. It may also require a generational change. The notion of not taking risks in some is the antithesis of what is required in an “ideas boom” era.

So I’m thinking of slowly fading away from observing and commenting on all of this, until I need something concrete from it. Presently it all seems to be a nice discussion, but discussion is after all discussion and not tangible outcomes.

 

Deflect, defer elsewhere and finally block – councillors answer to innovation

No one likes to be blocked on twitter. My first reaction to being blocked by William Owen-Jones, a local Councillor on the Gold Coast, was that he’s a sore looser and I had won. He’d just thrown in the towel. I was sort of rejoicing. However, there was more to this, I must have really hit a few bad nerves. This happens when cultures and what one values as important are worlds apart. Tweets_with_replies_by_William_Owen-Jones___WOJgoldcoast____Twitter

As can be seen in the photo, attached to this article, William Owen-Jones threw this blocking straight in my face. I never swore or called him bad names and tried very hard not to be rude. I asked questions and responded to tweets directed at me. I’m not really sure that this is acceptable behaviour for a public profile – which can be seen here.

One may also argue, that this blog post, is doing the same thing – throwing it back in his face. However, I’ve been thinking for a while, should I write it or not. Clearly, I’ve decided to do so, because the little online incident shows just how much work is required in the city I live presently, being the Gold Coast Australia, to change attitudes. There is no real tech/entrepreneurial culture here, outside of a small few pockets; whereby those presently classified as leaders have had little, to no real exposure to an innovative tech culture based around startups; nor to large groups of techies & programmer types.

Twitter is the place where you can communicate with persons that you normally wouldn’t. In the case of an elected officials, twitter acts as a conduit through which those persons can engage more readily to find out what constituents needs and wants are. But this works both ways in that constituents can find out the machinations behind the public office. When a public official blocks – it just says, don’t talk to me unless you agree with what I’m going to tell you. For intelligent and inquiring people, thats just so wrong.

I, like so many other techies, in Australia, have been amazed over the last decade or so at the very conservatism in our leaders, at all levels in public and private sectors, regarding technology and innovation. It was the later, that I was really pushing the councillor on. I wanted to know what the local council was doing and how they intended to respond to the recent statements by Australia’s new Prime minister, Malcolm Turnbull that innovation is at the forefront of Australia’s economic agenda – opinion piece can be found here. An excerpt from Malcolm’s speech

“We have to work more agilely, more innovatively, we have to be more nimble in the way we seize the enormous opportunities that are presented to us. We’re not seeking to proof ourselves against the future. We are seeking to embrace it,” Malcolm Turnbull said during ministry announcement speech.

What I found was that I was deflected to things such as a press release to run for office (yea right) Tweets_with_replies_by_William_Owen-Jones___WOJgoldcoast____Twitter

Or I was deferred to other levels of government.

But I wanted to know  “what the local Council policies were?” and “What were they doing?”. Unlike other councils around Australia e.g. Sunshine Coast , there appeared to be no policies. There also seemed to be no understanding of what or how local council, in particular the GCCC, will play a potential role (or like to see it).

It also became clear, that what innovation meant was not well understood by Will – he deferred to some BRW (Business Review Weekly), an Australian publication, definition as “change that adds value”. Thats just continuous improvement. I referred him to Clayton Christensen and disruptive innovation. However that was lost on him ….. no response.

There was no distinction between old school internal enterprise IT and innovation (R&D, entrepreneurship and commercialisation of novel IP) that I could perceive. They seemed to be the same thing??? This really surprised me.

I tried to suggest its time to stop following and to start leading. Clearly by pushing for answers and calling BS on him, I just highlighted his ignorance.

I feel quite strongly, after seeing so many colleagues and associates leave the Gold Coast, for greener pastures, that the GCCC needs to address this question of innovation in a more professional, thought out way. The existing approach is just ticking a few boxes. Old players are protecting turfs (and budgets and reputations).

Its time for some renewal. They can’t just keep blocking it out!!

Thoughts, learnings, observations and next steps from my August Bay Area trip

I’ve finally done my first US trip. There was a lot that fascinated me, it was so familiar, I was not an outsider, and I was a little surprised how easily I just fitted in. I seemed to run into intelligent and smart people everywhere, that spoke my language/dialect and liked talking about the same things as me.

My first superficial observations of the bay area, was that it appeared old and not well maintained. Like it had peaked in the past. In parts it was very dry and eucalyptus trees were everywhere – I nearly thought at times, I was in a very dry Adelaide summer. In San Francisco itself, on Market St, where my first hotel was, the homeless and other type of street people were a concern. You soon learnt, that as long as you were street aware, they were not going to cause you trouble. There seemed a disconnect though, with my perceived notion, that techies liked newer more modern things.

I was looking to break out of my techie rut (and comfort zone) and seek stimulus to motivate myself. To that end I had the following questions in my mind:
1/ Would I want to live here for an extended period of time?
2/ Is this a good place to pivot my cycling app or create a new startup?
3/ Perceived effort to find co-founders and/or build out an initial team? and
4/ If not in the Bay Area, where else across the globe should I possibly look at?
5/ whats next?

After I’ve summarised my relevant activities for the two weeks, I’ll answer the above the questions in more detail.

Summary of Activities

As it was US summer time, there weren’t as many meet ups on, as I had originally hoped. I did come a little unstuck in the first week with the distances needed to be travelled and accommodation costs put a hole in my budget somewhat.

Summary of first week activities:
1/ familiarisation, getting a US sim and being a tourist – doing a bay tour
2/ attended a Quantified Self meetup http://www.meetup.com/quantifiedself/events/187124622/ – met people from Intel research, Pebble, MisFit
3/ had lunch at Twitter HQ – met an online friend from the UK for the first time
4/ was chauffeured around Palo Alto, Stanford, Sand Hill Rd by a Californian based friend
5/ Attended the Open Forum: The Intel Trinity: Noyce, More & Grove – a lot there were Intel Alumni
6/ visited Runway http://runway.is/ and caught up with an associate from the Gold Coast – who added me onto the secret Aussie Mafia Facebook group
7/ Caught up with another associate now working for IBM after the startup he was working for was acquired by them

Accommodation was really expensive in SF, I flew to Las Vegas Thursday night (was cheaper then staying in SF) and returned to Mountain View Sunday afternoon (was supposed to be morning but flights delayed 2 or so hours due to fog in SF – seems an ongoing interruption).

Summary of second week activities:
1/ Caught the BART/Caltrain from SFO to Mountain View – met and enjoyed a great conversation with two Canadians that had just gained employment at Facebook as Data Scientists
2/ drove for the first time in a LHD vehicle on US roads for a day around Mountain View
– unfortunately the Computer History Museum was closed on Mondays & Tuesdays
3/ Went and saw HQs for
– Facebook (big campus but nothing to see),
– Google (a few things to see, was larger then I imagined)
– Apple (quite large and bought souvenirs from the company store)
– E-bay (smallish)
– Intel (Stood out as people were wearing suit and tie) – spent time in their museum
4/ Stopped by Red Rock Coffee Co, Mountain View http://bit.ly/1t1HWCp
5/ Travelled via Caltrain from Mountain View back to San Francisco – a lot jump off at Palo Alto in the morning
6/ Visited http://startuphouse.com/ (they have two floors of dorm/bunk bed accommodation http://www.startupbed.com/) went across the street and spoke to http://www.techshop.ws/tssf.html
7/ Caught up with an online friend (from Adelaide, that I had not met before) who was interviewing with Google
8/ Took a Tesla for a test drive with a friend near Sausalito
9/ Attended a 500 startup conference – weapons of mass distribution http://wmd.co/ presentation slides http://www.slideshare.net/500startups and YoutUbe videos http://www.slideshare.net/500startups tagged #500Distro. (These guys just sell online – never once talked about old fashioned shoe leather salesmen sales.)

I didn’t quite end up with a full diary on some days. Many persons, I thought I might catch up with based in San Francisco seemed to be travelling and as I stated earlier there weren’t as many meetups as I thought and some were just too far away from where I was staying. You really do need a car and I now have a better sense, of the time required to travel and to get from Point A to Point B around the bay area.

Returned home via a few days in Hawaii. I luckily dodged two hurricanes.

Would I want to live here for an extended period of time? 
The price of accommodation in San Francisco is very expensive. Unless sharing with another (who had a US credit history) or others, I’m not certain I’d be able to afford it initially. I was informed you need to be earning >$200K USD per annum to really live in SF. It is of course a colder climate there to.

Culturally wise I enjoyed meeting and talking with techies and entrepreneurs. All roads appear to lead to the Bay Area presently. I’d fit in well but I would miss Australia. I’d also have to question whether over time, if the San Francisco Hipster culture would wane on me.

Am not certain at my age to, if I could really bunk with 20 year olds, in dorm style accommodation in the SoMA area. I’d much prefer Mountain View or Palo Alto – the cafes (and warmer weather) along University Drive had appeal. I did not however get a sense of the costs, besides that it to, was expensive.

One friend (working for IBM) doesn’t rent, as he is flying around the US and sometimes back to Aus but instead uses friends rooms (if they are available) and/or AirBnB (has some regulars) whilst in SF. He flies out to Reno or elsewhere where he can get a hotel for $30 per night. I was a little surprised to hear this, but he seems comfortable now living out of a suitcase for a year or so.

Another associate, is planting himself in San Diego and will fly in as required to SF. The fog though may impact his timely arrival if just for a day trip.

So really to answer this question, if I was not funded in USD, it would appear just to be too expensive to live there. As to, if it should be in San Francisco or closer to Silicon Valley, that would somewhat depend on the startup itself. (In Whats Next? i’ll state what I observed from Michael S. Malone)

I have heard of a proposal put forward to the Queensland Government for funding of a Startup House for Queenslanders in SF that was initially received positively by the minister here. Something for me to follow up on.

Is this a good place to pivot my cycling app or create a new startup?
The simple and quick answer of course is yes, if accommodation was not a concern.

However I’m not certain I could fund the cost to find product/market fit if I was to do it all in the Bay Area. Plus I wouldn’t be in a position to fund others initially. I’d need to find other local co-founders who are finically independent or work with another complementary startup e.g. working on a tracking device.

A standard Aussie US visa can be used for up to three months at a time, if you do not earn income in USD whilst there. A business visa for Aussies is six months with similar restrictions re earnings. Apparently, others upon setting up a US company then arrange for a H1B (I think??) visa to sponsor themselves. Suspect the Aussie Mafia on FB can assist here. US health insurance is something I don’t understand properly yet.

I did observe, that any discussion around my cycling app (or variations) were generally well received in that people thought there was something there. On reflection, I did not temper this, though with other ideas, to A/B test to see if it was just common to talk about ideas or not. However I did seem to set off a spark within a few.

There was still great momentum around ideas related to health and wellness with the Quantified Self movement. They now will be focusing on access to the data (not just the files but from an everyday users perspective). The Apple Health Kit and Google alternate were not really mentioned. I suspect these will generate new startups.

People were willing to bounce ideas around to – chew the fat if you like. Of course some are looking for angles for you to leverage their startup. This is something that I don’t get enough off around here in the Gold Coast or in Brisbane.

Something that was niggling away in the back of my mind, was getting a job in the Bay Area. Using that to learn more so and work after hours on networking on the startup. However, it somewhat goes against my grain of working for a company that I haven’t equity in and its been a while since I’ve been an employee. Whether I could gain work experience with a VC is a thought but I’ve not explored this properly.

I do not perceive it would be an issue to perform structured interviews in the bay area of 30+ persons/organisations related to hypothesis around a business model pivot of the cycling app. I suspect it would be a very positive and a beneficial way to also learn & network and/or would assist in the next question.

Perceived effort to find co-founders and/or build out an initial team?
There was an enough anecdotal evidence for me to be confident that I could form a team if I had funding. Bicycles, hipsters/techies, entrepreneurs seemed to be attracted to the notions I was putting forward. Have even managed to get the cycling data from the guy who runs Startup House|Beds in SoMA.

Finding a co-founder in the US would take more effort. However, if I was to network more so there and perform the structured interviews, my best guess is I’d have a good shot at finding one or more.

There is a strong cycling culture around San Francisco (at least for commute to work) and I noticed also the Google Bicycles at Google HQ. Some I spoke to said around Berkley it was more what I’m used to with MAMILs on good carbon road bikes.

I bought a Palo Alto Bicycles jersey from the bike shop on University Drive. I suspect Palo Alto would be a good area to.

If not in the Bay Area, where else across the globe should I possibly look at?
I asked this question of a few. With my friend from the UK, I was expecting to hear Shoreditch mentioned. Instead he said Berlin. When I mentioned it to some others they to, had heard positive things about Berlin. No one really talked about Singapore.

One person from Coca-Cola Ventures, that I met at the 500 startups event, asked about Sydney & Melbourne. I said that all roads seem to lead back to the Bay Area. She mentioned that her team was trying to understand why the Atlanta startup scene was not as entrepreneurial as they’d expected. She was at the 500 startups event to gain an understanding of the type of organisations attending i.e. she was exploring and learning like myself.

Alas, as Michael S Malone stated at the Churchill Club event – “The next Silicon Valley is Silicon Valley”.

whats next?

The notion of disconnect that I had started to sense via the internet between the hipster style startup entrepreneurs and the more seasoned software developers (where scalable software is their craft) was not really observed in the events I attended. If I had spent more time or been there, when some more relevant meet ups were on, I might have been able to investigate this further. My anecdotal evidence suggests that outside of hardware, the hipster style app startups are currently, a class restricted at least initially, to what those seasoned developers have made available. I need to still spend more time on this in the future.

The one notion that I did observe from the Michael S Malone’s talk is that the Silicon Valley veterans are questioning really whats going in San Francisco. Accommodation costs and other costs of living seemed exorbitant. Whilst in previous waves there had been a slow and steady movement towards San Francisco. It had jumped a number of areas directly to San Francisco with the likes of Zygna and Twitter. They also seem to not think there is much more to find around notions related to social interactions. Because of this his thoughts were that a new cluster will form to the west of the current Silicon Valley area where real-estate costs are still moderate (as my iPhone died – battery drains quicker there, I didn’t write it down). I also left with the impression that hardware will again play a stronger role in the next wave – Internet of Things??. He spent a bit of time talking about the number of transistors produced yearly in the world – was it Gordon Moore who said more transistors produced each year, then rain drops in California? (the number now exceeds rain drop in the world – how they can qualify this I’m not sure).

So for me I think the next steps are:
– create a pivot business model for the cycling app
– revise a questionnaire to address the hypothesis in the business model
– book another trip to the Bay Area – try to arrange interviews before I go
– spend more time outside San Francisco (gain greater understanding of cost of living)
– gain greater understanding of visas

Going visiting in real world – off to the Bay Area

For years, I’ve sat behind my screen to read, view and consume content about the tech world and startups. However its dawned on me of late, that you need to get over to the US and see & do things in the real world. Why? Because regardless of the power of the internet, most entrepreneurs and techies around Silicon Valley do things in person. You need to be there.

I want to experience this culture, not just observe things through the internet. Which of course, is open somewhat, to interpretation and to my own uncorrected biases. Through getting on a plane, and doing the long flight over the pacific, I’m hoping to learn and gain experiences that can help me accelerate my current stealthy endeavours. Its a quest, many Australian techies and entrepreneurs are taking of late.

There are many reasons for this. The main reason seems to be, frustration with the current environment and ecosystems in Australia, to support early stage tech endeavours. Many, like myself, get all excited and enthused via their online activities, only to find that, when they get out from behind their desks and talk to people in the real world (in Australia) that the reality is so different. I’ve often thought, it was just a lag in time between the US and Australia. Now, I’m not so sure! I’m leaning more towards a more conservative business and finance culture, that has limited understanding of the culture of tech entrepreneurs, creative & programmers.

So I’ve booked my trip. Two weeks in San Francisco and the Bay Area, arriving 28th July 2014. I’ve yet to fill in my calendar, which I’m looking to start doing next week. Am going to use my network to find relevant people to meet, am going to go to meetups – interested in Streaming Analytics, Big Data, Quantified Self, Wearables, Startups – idea to IPO and of course I’ll do a few touristy things besides visiting Apple, Twitter etc.

It’ll be an adventure. Will I want to return home or stay there? Lets see. I think I could be swayed!

Reviewing The Customer Development Manifesto

Image

I’m always drawn back, when reviewing material, to Steve Blank’s The Customer Development Manifesto. This happens most often when hearing about other people’s startups but always when I contemplate mine. So I wanted to tell you about my drivers for this material.

In the past, I’ve worked on my ideas and when I’ve explained it to some, they of course, have said that will never work. I suppose what happens, is that after a while, you stop listening to them. As no matter, what you present to them, they’ll say the same thing. You stop making progress and to some degree, you get tired of hearing about the negative. Thus you just block them out.

Now this can become a tad dangerous, if working in isolation, with no form of feedback to help alter the path you are taking towards building out your idea. Hopefully into a business that is meeting your vision and objectives; whilst not burning through all your cash.

So how did I start to break this working in isolation, ignoring all those that couldn’t glimpse my vision?

I started by participating in programs and groups, where there were more people like myself (that had similar frustrations) and that wanted to learn about the wider entrepreneur world. Thats the key, I believe, is to start to work out how to educate yourself, based on the startup lessons learned by others.

Then I engaged, more advisors. The funny thing was, as I started to engage with them, a pattern started to form. That was they didn’t know what to do to help me, if I didn’t already have customers and a detailed business plan. I can remember vividly in one meeting, being told, the solution for the next step, was to get a customer. I walked out thinking to myself, that’s easier said then done. As significant more work was required, before I could actively fund the build and production environment for a single customer.

None could also show me a successful business plan, that had been used to grow a tech startup either. Made me very worried, when I heard statements like its confidential or go google ‘business plan’.

Eventually I found a new advisor and mentor, that guided me through the earlier stages and helped me to create, a structured approach to interview and discover what my potential customers were really like. As part of that structured approach, we included questions, to determine also, if our hypothesis about a revenue model were true or false.

Its how to break out of the ‘working in isolation’ scenario. Start getting in front of your potential customers talking to them in a structured manner. You need to show professionalism and that you are focused.

In my case, what we discovered is that unfortunately at that time, we didn’t have a viable business model within the target geography and market that we were looking at. I had at that stage, nearly burnt through all my cash, and decided to park the startup idea. The startup idea, was to build a Cloud hosted SaaS marketplace, leveraging Australian uISVs looking to sell across the internet. Around that time or shortly there after in 2008, Apple’s App Store started its meteoric rise.

I was disillusioned after parking my idea. I’d invested a lot of time and energy after all. So I went cycling a lot, thinking about what to do next. I continued being involved in the local tech startup community and over a coffee chat one day (somewhere in 2009), some one pointed to Steve Blank’s Customer Development process.

After I looked at some of the material, I thought geez, there’s a lot of elements and stories about lessons learnt here that I really associated with. I’ve been through a lot of this Customer Discovery stuff before. What I learnt, which Steve keeps reiterating is:

“There Are No Facts Inside Your Building, So Get Outside”