VR - Way Forward or White Elephant

One of the buzz technologies at the moment is the Virtual Reality headset ("VR"). The surge of interest started with the Google Glass experiment but close off the back of that came the full on Oculus Rift ("OR") headset. The OR was originally a Kickstarter project that quickly gained momentum and raised $2.5 Million which led to Facebook acquiring the company. Other corporates quickly moved to enter this space (Samsung, HTC, Sony etc.) and there are now 20+ VR technologies hitting the market, primarily aimed at the gaming consumers.

We've been here before ...

VR is not new as a technology. Nintendo has already tried to bring VR to gaming, amazingly, back in in 1995! The Virtua Boy was a desktop gaming device that was revolutionary in its day and promised gamers a whole new paradigm for playing games.

It didn't work commercially. The tech itself left a lot of players with headaches - a problem that has not been resolved by the modern VR headsets. The games were interesting but the real limitation was that you couldn't play-on-the-go, something that Nintendo had pioneered with the Gameboy.

Why is it different now ...?

Actually it isn't. The tech within the new VR headsets is better in terms of construction and definition, the resolution of the OR is 2160x1200 which is very detailed by comparison to Nintendo's Virtua Boy. Outside of the fact that the resolution has increased, all the problems with the Virtua Boy persist:

• A lot of players still suffer headaches, this is due to in-balances with the players vision that the brain struggles with.
  
• Many people feel very self-concious whilst wearing the headset, its an uncomfortable feeling in a psychological sense.
  
• Despite the fact that the headsets are not desk based as per the Virtua Boy its still not possible to play on the go.

Way Forward or White Elephant?

There will always be a hardcore gaming market that will early-adopt this stuff and power the commercial development of both the hardware and the software. New technologies need to breakout into the mass market quickly if they're going to succeed, some can exist under the radar and ferment for a while, but most have 18 months to go mainstream or die.

The mass market is really about what players want under tight constraints in terms of time and money. My general thoughts are around the trip to work. If someone can pick-up and play on the bus for the 10-15 minute travel to work then this is where the real big number of potential players kicks in. I frequently see 50% of my fellow commuters involved in some form of mobile entertainment on the way to work - the liquidity in this part of the market is enormous. The VR headsets don't meet the limitations in this part of the market and therefore they need to appeal to the hardcore and console gamers.

My personal opinion right now is that this first generation of VR headsets are a white elephant. There will be a couple of years of hype and as with 3D movies at the cinema, the interest and the investment will dry up. Having said that, I don't see a 20yr gap between iterations like we saw from Virtua Boy to Oculus Rift. I can envisage maybe a 3-5 year hiatus and then the next generation of devices will probably be a more realistic proposition. I see it following the same trajectory as gaming on demand. The early entrants into the market OnLive and Gaikai are the good examples - OnLive launched and went bust, Gaikai never launched even after Sony acquired it. VR Headset technology is still somewhat in the future for most people.

Game of Drones

The media is awash with all sorts of drone related stories and hypothesis. As a new technology (and as with many previous new techs) it has a mixture of fans, supporters, detractors and conspiracy theorists. The long term benefits are clear to me. Safety applications, search and rescue, hazardous environment work etc. The current anarchy over drone use and some of the unacceptable uses we see in the media are a necessary pre-cursor to forming legislation that then allows the drone sector to orientate itself into an acceptable mode of operation for the masses. What does this mean for small businesses and those who stand to benefit the most?

New perspectives

There were clearly some small businesses that were going to latch on to drone use very quickly. Wedding photographers latched on to the idea of using drones and offered prospective clients the unique angles for their big day that only a drone can offer. Other sectors such as the building trade could view and assess buildings without the need for scaffolding and farmers could use drones to get a view of parts of their estate without leaving the farm house. Drones were capable of servicing these needs with little or no modification and piloting them was not beyond the man in the street.

Drones as part of critical infrastructure?

This is where the reality of drone use started to depart into the realms of wishful thinking. The media made a lot of the concept of drones in urban locations supporting critical infrastructure such as the emergency services. Drones flying defibrillators to heart attack victims appeared in the press. As a drone pilot and someone who has delivered a safety app into the emergency service environment already (REALRIDER) I cant safely say this wont work. Drone navigation in urban areas is fraught with problems, the smaller drones can't carry the payload required and there are existing laws that prohibit the drones operating in public areas. On top of all that the conspiracy theorists will have a field day with claims of surveillance by the back door. Don't expect to see this any time soon.

What can a drone deliver?

According to Amazon, a large parcel! When the Amazon news story first appeared it created a huge stir in the media but the reality is that this concept has some large flaws in it. The technical ones of battery life/range, payload, navigation etc. are all still there, Amazon did not conquer any of those. Other issues include what the drone does if it can't find you, what it does if you're not home etc. also detract from the business case. Lastly, drone interference is going to come into play. Bringing an Amazon drone down to take the payload is going to become a criminal enterprise in itself.  I suspect that Amazon has enough money and smart people to be able to think around some of these issues but I also suspect that we are still a good five years away from any kind of commercial service based around drone delivery.

So what is the reality?

In truth the reality is fairly underwhelming. Drones are still developing as a piece of technology, are not that cheap (but getting cheaper) and require some skills to operate. The real devil is the legislation (or lack of it). There are some obvious security, privacy and safety issues that the current legislation doesn't deal with - most specifically relating to operating drones within spaces used by the public. The government will need to legislate to ensure that drones are not a public nuisance, not a hazard to the public and do not facilitate criminality. 

Accepting that the above will take care of itself, the other challenge with drones is a human one. These devices are semi-autonomous and capable of making a decision based around the circumstances they find themselves in.  Humans are naturally suspicious and the potential for a disconnect between humans and the machines is likely. There needs to be a phased approach to using drones in situations where the public are involved and not just to force drones into society against public opinion. My gut feeling is that drones need some early positive impact, a quick win or two to calm the public perception before the drone arms-race creates a wholly negative feeling.

Should business owners learn to code?

It should be apparent to most of us that coding is becoming a desirable skill in the work place. So many things in our everyday lives have programmable or configurable aspects to them - phones, WiFi routers, web sites etc. The need for even simple coding skills is increasing and its a challenge for most businesses to get the right expertise and skills in-house and then to hang on to them.

The question is: If you own the business is it necessary that you learn to code?

What would be the advantages if you did?

(a) You would have an insight into the time and complexity that tasks requiring coding take, making planning and business decisions better informed.

(b) You would be able to brief staff better by using your personal knowledge and experience when describing work you require.

(c) You would be better able to capture requirements from your customers by being able to ask the right questions at the right level of detail.

(d) You would have the respect of more technical team members as you at least dipped your toe into this in an effort to gain understanding and be a better business leader.

(e) You are better equipped as a business person to understand and hire the best people for the technical work you require.

What are the dangers of doing this?

(a) This becomes a distraction from your core business responsibilities and other aspects of the business don't get the right level of your attention.

(b) You become presumptuous about your knowledge and abilities and start to think you are better than your technical team

(c) You try to apply code or a technical solution to problems that can't be or don't need to be solved with technology

(d) If you're not that great at it, it becomes more of a hindrance than a help.


What you get in benefits by learning to code is the ability to understand and interact with the technical part of your business in a much more influential way. Its true that within many tech start-ups its difficult for the tech guys to take the CEO or founder seriously if they don't code. Even if the coding only gets a bit beyond basic it allows the CEO or MD to express things differently to an audience that without the coding speaks a different language.

What detracts from learning to code is when the CEO doesn't have enough personal discipline to understand when they've reached their limit and then their involvement becomes a problem. A good coding CEO will feel the moment that they need to step back and say "You seem to understand where we're going, let me know what you need from me to make this a success.". 

Sindhu Joseph
CEO
Cognicor

Can you write code?
Yes

If you do write code, is it the most important skill you have to be an entrepreneur?
No, I value being able to code, but by no means it is my most important skill. I value being able to take risk, face challenges, understand my client needs and being able to convince them much higher than my ability to code.

As Sindhu Joseph highlights, coding is not a super-power. It does not avoid or replace many of the other aspects of running a business, its just another weapon in the arsenal of a 21st century entrepreneur.  Many CEO's of major tech companies can't code, they just had the vision and the drive to get things moving and the understanding of who they needed to take care of the tech.

Charles Delingpole
Co-founder
MarketInvoice

Can you write code?
I taught myself how to code when I was 16. I can build and deploy a reasonably sophisticated website in a few hours, and this has proved to be extremely useful over the years. It means that rather than having to find someone, describe in detail what to do, spent a money on something and then wait for it to come back and not have it work, you can have something up and running within days. So knowing how to code saves time and money and gets you better results.

When coding ability is added to other strengths of a small business owner it can be a powerful game changer over its competitors. It's a competitive advantage in many ways and can often make a business more attractive to new prospective customers. As Charles highlights in the comments above - because he can code he can own and maintain the vision of what he wants for his own business.

As you can probably tell my bias is towards coding and in recent years the number of ways of learning your first few lines of code has ballooned. There are now a lot of options in terms of on-line coding academies but in the first instance just check out youtube. There are a lot of coding tutorials for beginners and its free! It might just be the start of something that transforms your business.

Check out:

Codecademy

Lynda

Code School

Greece, the Grexit and Jam Tomorrow

Recent events in Greece have brought me back to the blogging state of mind with a whole range of new thoughts on how a nation ends up in this scenario, how it developed and what it means going forward. Some of my thoughts are in line with the great and the good of economics but I do think that there are a couple of nuggets of my own in here.

Once upon a time ...

Historically Greeks have had what can only be described as an avant garde relationship with personal taxation. During the 70's and 80's avoiding tax was the national sport and there were more Porsche owners than tax payers. This is really the bedrock of the problem - culturally it was ok to avoid tax and do it openly with no fear of any real danger. This gave rise to a nation where it was possible to retire at 50 and live comfortably from your ill-gotten gains.

The 80/20 Rule

When examining catastrophic failures of this type I often use the 80/20 rule of thumb. This generally means that 20% of Greek establishment is responsible for the problems of the remaining 80% of the Greek population. That same 20% is both the cause of the issues and not taking the necessary steps to redress the pain they have caused. It brings the question of who are the 20%, an important factor in the current Greek situation.

What if...?

What if a company ran on the same basis. What if the management of the company spent more than it generated in revenue. We wouldn't expect a company to survive in those circumstances so why do we expect Greece to? We would blame the management wouldn't we? Of course the current Greek government is not the one responsible for the stupidity and irresponsible actions of the previous governments over the past 30 years but it is now taken responsibility for getting Greece out of its debt black hole so needs to act quickly and with only Greece in the here and now in mind.

What on Earth!

At a point in time when Greece can ill-afford it, the current government has lost the plot. It might not like what the European Union is saying but it doesn't have a choice. It needs its 3rd bailout in 5 years or the abyss beckons - but it seems that the government will not accept the terms for the money it needs and will therefore bring Greece out of the Euro and into the financial wilderness.

It is absolutely the case that the Greek people have suffered, suffered terribly over the 2010-2015 period but the phrase that comes to mind is "self inflicted - no sympathy". This is clearly the point of view of many of the Euro nations and has been drilled into the Greek psyche buy many a German politician. 

What now?

Greeks in general need to see the situation they are in as last chance saloon and act accordingly. This is not a moment for any kind of defiance or heroic last stand. The country will take 3 generations to recover outside the Euro, it might do it in 2 if it remains in the EU. The political establishment in Greece has called the situation wrong and needs to see that the EU will protect itself from Greece's problems no matter what.

What next?

Portugal, Spain and Italy should all be worried. They are all in various stages of the decline that Greece suffered which probably explains why they are campaigning hard for Greece to stay in the Euro. Portugal has a very similar cultural problem to the one that saw Greece plummet. A small number of tax payers, an elderly retired group of a disproportionate size and a struggling economy in terms of jobs and growth. I suspect that there are a couple of Portuguese politicians shitting themselves.  A little further back are Spain and Italy, they still have time to act to stop themselves "doing a Greece" but Italy has a lot of problems in the post-Burlusconi era.

What would I do?

A hard question to answer in some respects but I think it would be largely what I needed to to keep the IMF on side. What I wouldn't do is promise deliverance and jam tomorrow by holding out, being proud and going down with the ship. Without the support of those organisations that can sling a couple of billion Euro's in my direction when I need it its impossible to see how the whole economy wont collapse. Banking is key and the Greek banks are out of cash and out of time. The Greek nation would continue to suffer under the austerity of the times but a nation finding it touch is better than a nation finding tough on its own. 

Surviving Consumer Electronics Show

Consumer Electronics Show or CES as its more commonly known is the worlds largest and most intense technology show. The event is held annually in Las Vegas in Nevada and has been in existence since 1967. This posting is really aimed at anyone attending for the first time and some words of wisdom having done the show several times.

The basics

The first thing to try and grasp is how vast the show is. There are 3000+ stands/exhibitors on around 2.6 million square feet of floor space. There will be 5000+ journalists covering the event and the show regularly attracts 150,000 attendees. Its just huge and often overwhelming for the first time visitor. Because of the size its hard to get the most out of it without research and planning. Its not the kind of show you can just roll up and wing it.

Microsoft and Apple do not attend the event (they have done in the past), these days they have their own bespoke events to evangelise their tech - but every other tech company on the planet seems to be there so its a very good barometer of the whole tech space and what is hot/not.

Survival Advice

You need to be comfortable with crowds. The sheer number of people means that you wont be able to find or protect much in the way of personal space.

Learn to love queues. You're going to be queuing for everything! Cabs, coffee, food - nothing is going to come quick.

Organise rendevouz points with colleagues so you can coordinate meeting up in the crowds.

Choose your shoes carefully. You're going to be standing and walking a lot. Avoid new shoes. Go for worn in shoes ideally with thick rubber soles. Typically you can end up walking 5-6 miles a day.

Think about what you really need and try and travel light. My normally heavy backpack gets stripped right back so I'm carrying bare minimum.

If you're hoping to attend some of the parties, they're mainly invite only but if you're interested check out this list.

Any internet connection available will be running completely at max so don't be surprised if you can't connect to what's provided. If you have a MiFi then take it. SMS is going to be the best way of getting hold of anyone at short notice or in the event of an emergency.

There is a lot of "free stuff" so leave some space in your case so you can lug it home. Alternatively shipping it in the post can make sense (you don't have to carry it) but check the costs as it could be expensive.

Las Vegas is in the middle of the desert and therefore dry, take lip balm if your prone to dry skin. Likewise make sure you have bottled water in your bag.

My CES Week

Sunday: Arrive and try and manage the jet-lag

Monday: Collect badge and do a test run of walking between various locations to see how long it takes and to make sure I can get between appointments in plenty of time.

Tuesday: Show floor opens - walk the show floor to make notes on things to come back to, where they are and how to get to them - ready for Friday.

Wednesday: Back to back meetings

Thursday: Back to back meetings

Friday: Take the notes from Tuesday and go and look in more detail at the things I'm specifically interested in. The crowd is significantly less on the Friday which makes it easier.

That Pesky Penguin!

Introduction

Google has one again shook up the SEO market with another update to the way that the search engine finds and references content. The previous update (called the Panda Update) broke the connection between search engine rankings and the over use of keyword strategies to fool the algorithm. The Penguin update is now maturing - on release #5 - and was designed to yet again overcome some SEO techniques that were proliferating and making the search results skew in a particular direction.

What is Penguin?

Google is in a constant battle against spam. That has led to the creation of yet another animal-named update, known to the world as the Google Penguin. This update is specifically to reduce cyber traffic and give low ranks to link-schemed websites, the update has been a success in raising the bar for the standard of SEO in websites; though many sites have fallen foul of the update accidentally and as a consequence not everyone is singing Google's praises.

What's the #5 update for?

For businesses with websites, or public content, the things to look out for are elements such as:

• link relevance
• low quality back-links
• automated queries being sent to Google
• content duplication
• hidden links or texts

Any other kind of black-hat techniques which are the algorithm’s target will also have alarm bells ringing at Google's end and should be avoided. If your web presence includes any of these things then you might have noticed a sudden drop in the traffic on your site. This will be a case of needing to make some small adjustments.

What are the best tips following on from the #5 update?

What you're striving for now is the most natural looking website you can. While there’s a lot to be taken into account while refining your web presence, here’s a general list of the things you should do, to minimise the “Penguin Effect”:

• Optimise the content sent to search engines, and help make your pages relevant to the keywords you submit.
• Look out for malicious content being promoted on your site.
• Avoid any kind of black-hat technique such as keyword stuffing and cloaking.
• Avoid automatic-query sending products.
• Work on loading time with the help of Page Speed or YSlow.
• Keep check of broken links, and maintain the quality of content.
• Under no conditions should one go for plagiarism or duplicated work!
• Divert your links and keep different anchor texts.
• Though guest posting is nice, it’s important for bloggers to know that Google takes these as back-links, and are a negative point to your site.
• Integrate your site with as many social sites possible, especially Google Plus!

Tips and Tricks

• Make unique and genuine content – User experience is important
• Its better to take a new domain and shift the content to it. 
• Never use blogroll links in your website/blog
• Go social – promote your site via Facebook, Twitter, Digg, and Google Plus
• Check your site internal linking and the anchor text associated with that.
• Get more quality back links.
• Identify the poor links and try to remove them by requesting the site owners and then go for the Google Reconsideration Request

The name is Bond ... Completion Bond

Introduction

There are a number of ways a small company can fund a new project. Some of the well tried and tested routes can be slow or come with caveats that make them less than attractive in terms of time and effort it might take to secure a deal. This post is aimed at highlighting one of the less well known ones - completion bonds.

What is a Completion Bond?

A Completion Bond is a financial contract that insures a specified project will be completed even if the production company runs out of money or any other incident occurs during the production of the project. Completion bonds are used in many industries but have been particularly popular with major films and construction projects.

A common use of a completion bond is as part of a mortgage financing deal, and serves to protect both the mortgagor and mortgagee. A third party financier, a completion guarantor company, is typically brought in to provide the financial backstop in the event that original financing is insufficient to complete the project. This is also known as a completion guarantee.

Completion bonds are standard pre-project approach for any large project or complex projects involving large sums of money or multiple investors. They are a long-standing tradition in the entertainment business, where many variables can affect the completion of a large movie/game/TV project.

A third party guarantor will assess the risk to the projects completion and collect a premium for insuring the particular risks to a given project being completed on time, and on budget. Investors become much more likely to get involved, knowing that the project will be completed enough to be sold so they can recover their investment(s).

Completion Bond funding for Games [by Dan Marchant]

This is a funding model that is used in the film industry, which a number of publishers investigated as a possible method of funding entertainment software development. To date it hasn't really taken off in the main because the game development process is very different from the film production process.

Completion Bonds allows the publisher to defer their financial risk, the developer to secure funding for a project and the CB company to make a profit via a return on investment plus an agreed amount when the game is completed.

A publisher interested in an entertainment software title will sign a deal stating that they will publish or distribute the product on completion. With this guarantee that the product will get to market the developer secures a completion bond which will allow them to fund the development to completion. In some cases the deal give the CB finance company the rights (or obligation) to take over the project if it does not meet required deadlines in order to ensure it is completed. On completion the publisher pays the CB company back their investment, plus an agreed profit.

The pros are that the publisher has no financial exposure until the project is completed, the developer has a secure source of funding and the CB company gets a guaranteed return on their investment. Of course all of this is subject to the projects being successfully completed. The cons are that it is very difficult and time consuming to secure CB funding. The funding model is also rather inflexible, which can have a serious (negative) impact on development if design or technology changes become necessary during development. Unlike the film industry the entertainment software industry is still in a state of rapid technology development. This makes even the best planned project subject to alteration, which in turn requires a very flexible and quick reacting funding model.

Completion Bond Funding for Films [By BMS]

A film completion bond is a written contract that guarantees a motion picture will be finished and delivered on schedule, within budget and according to an agreed script, it does not, however, guarantee the quality or success of the film.

Most independently financed films, including many that are released and distributed by the major studios, require a completion bond to satisfy the lending bank. They are needed because a completion bond company’s balance sheet is usually quite small, so they need to go out to the market for the capital and then the insurance required to collaterise the guarantee is issued by the completion bond company. 

The technical structure of a film completion bond is an X/L treaty structure, with facilitative cover for big budget films this is achieved through markets in Bermuda and Europe, as well as London. Film Finances retain the first $500,000 but this is fronted to satisfy the banks and the X/L treaty structure is made up of six layers.

One of the largest limits completed to date, $120m is in respect of each of the final two Twilight films. Other examples of interesting films bonded by Film Finances include; Four Weddings & a Funeral (1994), Pulp Fiction (1994), Phantom of the Opera (2004), Borat (2006) and Oscar winning The King’s Speech (2010).

Opinion

Finding funding is hard. Creative projects often start with a negative against them as many investors see them as nearly pure risk. With that in mind those companies seeking funding need to work every option until it doesn't work. Completion Bonding is not a simple or straight forward solution to funding a creative project but clearly some projects do get off the ground on the basis of a completion bond so in the right circumstances it is the right solution.

The other thing to note that even if a completion bond is an option for your project, it doesn't come in as cheap money. If the terms of the bond are not negotiated carefully and expert opinion sort then it might be impossible for the bonded project to make money regardless of the delivery.

Lastly, the bonding community is closer to banking than it is to the creative sector so be prepared for a good lack of understanding if your project is cutting edge or a little wacky!