With the increased usage of the web and web related tools for business applications the issue of security becomes ever more important.
There are several dangers for users. One is that their strategic assets be stolen or used by accidental thieves those that do not seek them specifically, but are looking for something to steal.
The other, harder to protect against danger, is the thieves that are looking specifically for the user or his information.
There are many software options, and more are being developed to help code, or protect the strategic knowledge. There is of course an evolutionary process here, in which the protectors and the thieves are competing and becoming more sophisticated over time.
These solutions, especially the more sophisticated ones are not free, and the cost could be an important parameter in decision making.
One of ancient strategies to protect assets was to hide them. If you can hide the asset it is harder to steel it. In any case, it will be a useful protection against the accidental thieves, they will not see it, so they will move to another potential victim, without knowing that there may be something to steal.
But how can you hide things effectively in to-days world? And how can you retrieve it back again?
Consider this (at your own risk):
It was Allen Edgar Poe who suggested, and later Sherlock Holmes used it to, to hide things in the open – the important letter left open on the table in full view of anyone, while the seekers ransacked the room but could not find it.
What is the equivalent of that in the electronic world?
At least for short or very short periods, you can hide it in the net. In full view of anyone, trusting the huge amount of data to hide you.
In order to do that, one must avoid the search engines. In fact if you want to do it well all you have to do, is look at one of the guides for doing business on the net, and avoid the marketing tips – do not use tags, do not try and get links into hubs or popular sites, avoid site names that are easy to remember etc. (in fact, after trying to promote my website – it would seem that hiding can be done without effort).
So, sharing confidential info for a while (a meeting, short project etc.) can be done on such dark site, that the search engines would not find, and would not catalogue, leaving you covered, unless someone knows the exact address.
Well Hidden in the Open
Thursday, December 23, 2010
Saturday, November 27, 2010
Italian Israeli Conference – regarding Technology Transfer
The workshop taking place last week 23-24 of November 2010 was a most interesting event.
The conference opened (following the usual political speeches) with a discussion regarding the transfer from the lab to the industry of research results. The panel composition was most interesting. While the Israeli part was represented by Technology Transfer Companies managers and CEOs (Bar-Ilan R&D, BGN Technologies, Ramot at Tel Aviv University, Yeda etc.), the Italian part was represented by managers and Presidents of National Research Institutes (CNR, ISS, ISA ENEA etc.).
There were other very significant differences between the two country models. It seemed that the Israeli companies represented smaller organizations in comparison to the Italian organizations represented in the panels, the numbers of invention disclosed; patent applied for and approved, were larger for the Israeli firms. It would also seem that in most cases the Israeli Technology Transfer firms have been active for a longer period than the Italian counter parts.
Another interesting difference was regarding the performance data of the organizations. The Israeli Technology Transfer Companies, are private organizations, and their financial and therefore performance reports are confidential. The workshop served as an opportunity to discover some of the performance data. The Italian National Institutes are public organizations and their information is therefore public.
The Italian organization cited proudly the number of spin-offs they accumulated over the years, and lamented the scarcity of venture capital, which was, according to them, a barrier to further increasing the number of spin-offs. The Israeli technology Transfer companies while citing similar data mentioned (Yeda) preference to licensing over spin-offs.
That point was not discussed (I had asked the question, but Dr. Naiberg from Yeda was not given the chance to answer), but what is the difference between the two venues?
The biggest difference is in the overall employment impact. A spin-off creates measurable new employment positions. Licensing to a large organization, while it may add employment opportunities is harder to measure as a result of the TT effort. Thus governments and government organizations prefer this option. For commercial organizations, licensing has less risk embedded and can generate a cash flow more rapidly than spin-offs.
The conference opened (following the usual political speeches) with a discussion regarding the transfer from the lab to the industry of research results. The panel composition was most interesting. While the Israeli part was represented by Technology Transfer Companies managers and CEOs (Bar-Ilan R&D, BGN Technologies, Ramot at Tel Aviv University, Yeda etc.), the Italian part was represented by managers and Presidents of National Research Institutes (CNR, ISS, ISA ENEA etc.).
There were other very significant differences between the two country models. It seemed that the Israeli companies represented smaller organizations in comparison to the Italian organizations represented in the panels, the numbers of invention disclosed; patent applied for and approved, were larger for the Israeli firms. It would also seem that in most cases the Israeli Technology Transfer firms have been active for a longer period than the Italian counter parts.
Another interesting difference was regarding the performance data of the organizations. The Israeli Technology Transfer Companies, are private organizations, and their financial and therefore performance reports are confidential. The workshop served as an opportunity to discover some of the performance data. The Italian National Institutes are public organizations and their information is therefore public.
The Italian organization cited proudly the number of spin-offs they accumulated over the years, and lamented the scarcity of venture capital, which was, according to them, a barrier to further increasing the number of spin-offs. The Israeli technology Transfer companies while citing similar data mentioned (Yeda) preference to licensing over spin-offs.
That point was not discussed (I had asked the question, but Dr. Naiberg from Yeda was not given the chance to answer), but what is the difference between the two venues?
The biggest difference is in the overall employment impact. A spin-off creates measurable new employment positions. Licensing to a large organization, while it may add employment opportunities is harder to measure as a result of the TT effort. Thus governments and government organizations prefer this option. For commercial organizations, licensing has less risk embedded and can generate a cash flow more rapidly than spin-offs.
Saturday, November 6, 2010
The Israeli VC market – a change?
Calcalist published on November 1st the results of a survey performed by DeLoitte in Israel. The survey checked the attitudes of Israeli VCs towards the finance ministry intention to guaranty institutional investors investments in VCs. The finance ministry intends to assure insurance companies, and pensions funds against losses up to 200 million NIS of their investments in the Israeli VCs.
The article emphasizes the fact that while 70% of the VCs asked were for the move, 15% were against it. And that when the VC sector's plight is well known.
While this step may seem radical and even innovative, this was in fact one of the steps taken in the early 1990's in order to allow the sector, just newly formed to grow. The government than guaranteed the investments of private investors and allowed the new VCs to raise funds from the general public (so called Inbal funds). After two decades of impressive growth into a diversified and mature market the move back to such measures is an indication of the sectors difficult position.
Would that be enough to put it right?
The reasons for the sector's weakened position stem from different sources – the first is exogenous, relating to the general world financial situation, the reduction in available funds, and reduced tendency for risk. The Israeli VC market has been from inception involved in the world market and is affected in two ways. Difficulties in raising funds, and reduced return on selling the firms it invested in. Another reason is endogenous and relates to the performance of the sector compared to other investment possibilities. The VCs have not performed spectacularly. There are some successes but the sector failed to produce the vast riches it promised.
What may happen?
The sector may downsize in two main ways, it may reduce the number of VCs, while keeping their size more or less the same. This will create a mature and stable sector. However, another possibility is that the reduction in number will be small, but the size of the VCs will be smaller. Small VCs enter the trap of not being able to count on the large numbers averages. That is to say that they will need to focus on investing more funds, but in a smaller number of firms, trying to reduce risk. This will of course reduce their profitability, and may lead to further reduction in size and the creation of a downsizing spiral.
Will the measures the ministry offers suffice?
If by chance they measures coincide with an improvement in world economics, increased return of sales of firms, more funds available for VCs – it may work. But if the measures stand alone, without solving the investment issues of the VCs, we may find ourselves at the same spot in two to three years, only without the institutional investors in the wings.
Bibliography:
1) Calcalist article - Delloitte survey (November 1st 2010)
2) Calcalist article - VCs fund raising (October 13th 2010)
The article emphasizes the fact that while 70% of the VCs asked were for the move, 15% were against it. And that when the VC sector's plight is well known.
While this step may seem radical and even innovative, this was in fact one of the steps taken in the early 1990's in order to allow the sector, just newly formed to grow. The government than guaranteed the investments of private investors and allowed the new VCs to raise funds from the general public (so called Inbal funds). After two decades of impressive growth into a diversified and mature market the move back to such measures is an indication of the sectors difficult position.
Would that be enough to put it right?
The reasons for the sector's weakened position stem from different sources – the first is exogenous, relating to the general world financial situation, the reduction in available funds, and reduced tendency for risk. The Israeli VC market has been from inception involved in the world market and is affected in two ways. Difficulties in raising funds, and reduced return on selling the firms it invested in. Another reason is endogenous and relates to the performance of the sector compared to other investment possibilities. The VCs have not performed spectacularly. There are some successes but the sector failed to produce the vast riches it promised.
What may happen?
The sector may downsize in two main ways, it may reduce the number of VCs, while keeping their size more or less the same. This will create a mature and stable sector. However, another possibility is that the reduction in number will be small, but the size of the VCs will be smaller. Small VCs enter the trap of not being able to count on the large numbers averages. That is to say that they will need to focus on investing more funds, but in a smaller number of firms, trying to reduce risk. This will of course reduce their profitability, and may lead to further reduction in size and the creation of a downsizing spiral.
Will the measures the ministry offers suffice?
If by chance they measures coincide with an improvement in world economics, increased return of sales of firms, more funds available for VCs – it may work. But if the measures stand alone, without solving the investment issues of the VCs, we may find ourselves at the same spot in two to three years, only without the institutional investors in the wings.
Bibliography:
1) Calcalist article - Delloitte survey (November 1st 2010)
2) Calcalist article - VCs fund raising (October 13th 2010)
Sunday, October 17, 2010
Employees receive company control
Calcalist published that Advasense venture capital owners have transferred their holdings for free to the 30 employees of the company. As the newspaper quotes, this is a rare case in the High-Tech sector. Since than the employees managed to raise funds to continue the R&D of their chip, from a major potential customer (with no equity transfer).
While the rare occurrence may seem logical closer scrutiny raises some questions as to the rate of occurrence of such an action.
The high-tech industry prides itself on being based on human capital. It no longer refers to the workers as such, but as human resources. The source of pride and the basis for economic growth. It promotes the managers from the ranks of employees, as they understand the technology, the market, and the needs of the customers. But it rarely gives them ownership. The human resources are not trusted to be able to guide the companies on behalf of the capital owners. It is the capital owners, normally by definition with less understanding of the market and the technologies then their Human resources who retain control of the companies, and ownership.
The importance of the loyalty and devotion to the company have been analyzed without end in managerial literature. Every educated manager knows that employee loyalty is important. High-tech managers know that, as they know that they need to demand from their workers 24/7 availability, long hours and constant performance. The pay is high, but is based more and more on issues of offer and demand than on companionship of the road.
The option plans for stock sharing with employees are part of a financial incentive, they are not meant to give them control. Even if that control could bring more economic gains than other possibilities.
So, while in other sectors managers and stockholders have understood that involving the workers (not all are human resources) in the control of the company increases commitment to the firms actions, enthusiasm and loyalty, and therefore increase the chances of success, venture capital funds have not absorbed that lesson, in spite of slowdowns and losses.
Will the realize that a change is needed? That they stand to gain more, by relinquishing control? Time will tell.
While the rare occurrence may seem logical closer scrutiny raises some questions as to the rate of occurrence of such an action.
The high-tech industry prides itself on being based on human capital. It no longer refers to the workers as such, but as human resources. The source of pride and the basis for economic growth. It promotes the managers from the ranks of employees, as they understand the technology, the market, and the needs of the customers. But it rarely gives them ownership. The human resources are not trusted to be able to guide the companies on behalf of the capital owners. It is the capital owners, normally by definition with less understanding of the market and the technologies then their Human resources who retain control of the companies, and ownership.
The importance of the loyalty and devotion to the company have been analyzed without end in managerial literature. Every educated manager knows that employee loyalty is important. High-tech managers know that, as they know that they need to demand from their workers 24/7 availability, long hours and constant performance. The pay is high, but is based more and more on issues of offer and demand than on companionship of the road.
The option plans for stock sharing with employees are part of a financial incentive, they are not meant to give them control. Even if that control could bring more economic gains than other possibilities.
So, while in other sectors managers and stockholders have understood that involving the workers (not all are human resources) in the control of the company increases commitment to the firms actions, enthusiasm and loyalty, and therefore increase the chances of success, venture capital funds have not absorbed that lesson, in spite of slowdowns and losses.
Will the realize that a change is needed? That they stand to gain more, by relinquishing control? Time will tell.
Monday, September 27, 2010
My New Book - Coolaborative Research in Management - inside out
This post is going to be different than the other posts in the past. This month after a long process my first book came out in print. The book deals with collaborative research (CR) focusing on Academy-Industry collaboration on two levels.
The first is the academic-research-education oriented level, setting the definitions, the models and the theory behind the activity. It relates also to the role of the third main player the Government. In that aspect the book or that part of the book, is a good starting point (I am very modest as you can see) for beginners, or for practitioners seeking to organize their concepts.
The second level is a practical level, dealing with the practicalities of lunching a CR program, participating in it, and what to do when being left out. This part of the book is practical and is meant for practitioners from Industry, Academy government and consultants active in the field.
Writing the book has not been easy, and has been lengthy. The process speeded much when Prof. Shlomo Maital introduced me to Sage publications and the people working there. It was their expertize and competent management that brought us to the end of the process in a relatively short time.
This is a good opportunity to thank those that helped me, Prof. Maital and the wonderful people in Sage publication.
The publication leads to the next stage - getting people to actually read it. The book was not intended as a check point - another thing done, but rather in order to have some impact. This is where you, the readers come in.
Any Ideas?
The first is the academic-research-education oriented level, setting the definitions, the models and the theory behind the activity. It relates also to the role of the third main player the Government. In that aspect the book or that part of the book, is a good starting point (I am very modest as you can see) for beginners, or for practitioners seeking to organize their concepts.
The second level is a practical level, dealing with the practicalities of lunching a CR program, participating in it, and what to do when being left out. This part of the book is practical and is meant for practitioners from Industry, Academy government and consultants active in the field.
Writing the book has not been easy, and has been lengthy. The process speeded much when Prof. Shlomo Maital introduced me to Sage publications and the people working there. It was their expertize and competent management that brought us to the end of the process in a relatively short time.
This is a good opportunity to thank those that helped me, Prof. Maital and the wonderful people in Sage publication.
The publication leads to the next stage - getting people to actually read it. The book was not intended as a check point - another thing done, but rather in order to have some impact. This is where you, the readers come in.
Any Ideas?
Monday, September 13, 2010
Regional Development - inter region cooperation
Yesterday I had the honor to participate in the signatory ceremony of twin regions between the region of Emeq-Hefer (where I am a council member) and the Heilongjiang province in China. The agreement is the first step towards increased cooperation between the two regions.
All that is very nice, and creates a lot of good will - especially if there are mission exchanged between the regions and people get to travel. But in the practical world we live in what does it really mean?
In the regional level there is little significance, there are donations, links between institutes and some missions, political, educational and others. But what more can you expect when the regional level of government is limited in scope of action, budget and legal powers to act?
Can there really be a significant advantage created by cooperation between regions?
The EU seems to think so, but seems to think that such cooperation needs encouragement - and it does so financially. The EU concept is based on the fact that beyond trading between regions, there are practical lessons regions can learn from each other and that the cooperation can lead to improvement, economically in both participating regions.
The basis is to find the means for cooperation that will allow the relatively small and entrepreneurial region on one side to learn and teach from the larger bigger region, which operates on a different scale. The key would seem to be intensive and continuous communication between the two regions - a committee to identify the areas for cooperation, allocate the means and plan ahead. Topics for cooperation change with time therefore only lasting communication can provide for real cooperation with time.Although distance may seem as a problem - once personal acquaintance has been established the daily communication can be done electronically.
All that is very nice, and creates a lot of good will - especially if there are mission exchanged between the regions and people get to travel. But in the practical world we live in what does it really mean?
In the regional level there is little significance, there are donations, links between institutes and some missions, political, educational and others. But what more can you expect when the regional level of government is limited in scope of action, budget and legal powers to act?
Can there really be a significant advantage created by cooperation between regions?
The EU seems to think so, but seems to think that such cooperation needs encouragement - and it does so financially. The EU concept is based on the fact that beyond trading between regions, there are practical lessons regions can learn from each other and that the cooperation can lead to improvement, economically in both participating regions.
The basis is to find the means for cooperation that will allow the relatively small and entrepreneurial region on one side to learn and teach from the larger bigger region, which operates on a different scale. The key would seem to be intensive and continuous communication between the two regions - a committee to identify the areas for cooperation, allocate the means and plan ahead. Topics for cooperation change with time therefore only lasting communication can provide for real cooperation with time.Although distance may seem as a problem - once personal acquaintance has been established the daily communication can be done electronically.
Saturday, August 28, 2010
After the age of VC
Recent developments in the VC sector in general and in Israel in particular are not encouraging. The sector in Israel that once boasted its ability to raise funds and to have enough start-up companies in Israel to invest the funds in is suffering from difficulties in both areas.
The slow-down and other factors have contributed to reducing IPOs and mergers, or otherwise capitalizing on the investments for VCs, and in most cases required longer to reach the capitalizing moment. That in time reduce the rate of return on investment for the VC investors.
The lack of success in showing high enough returns on investments combined with reduced numbers of start-ups, and at the same time, global slowdown in economy, reducing available funds, have hurt the VC sector in the US some and in Israel much more. And Israel is the focus here in this blog.
The open questions is: What will happen to start-ups next?
Some funds will probably survive and continue to invest and raise funds. These will probably be the more successful funds with an impressive track record. For the most start-ups the options will probably be one of the following two:
1- Start-ups requiring small investments to reach the market would continue to find such investments locally, and would probably find the government aid tools very supportive.
2 - Start-ups requiring large investments would face greater problems. Angels would find it difficult to invest in such firms knowing they would be ousted and could probably show very little for their investment. It is probable that ideas requiring large investments would emigrate to places where they could find such investment, resulting in lost employment opportunities for the Israeli market, as well as brain drain to such places.
Another potential solution would be the re-occurrence or raise in fame of the Bootstrap. That option, of a new firm living of its revenues and growing slower than start-ups, but better fitted for the market, would probably become more popular. These firms could probably raise funds for growth based on debt and market performance and show good return on investment. They would be able to substantiate their presence in the local market and increase employment possibilities locally.
When will all that happen? As we say here, after the holidays.. but which holidays?
The slow-down and other factors have contributed to reducing IPOs and mergers, or otherwise capitalizing on the investments for VCs, and in most cases required longer to reach the capitalizing moment. That in time reduce the rate of return on investment for the VC investors.
The lack of success in showing high enough returns on investments combined with reduced numbers of start-ups, and at the same time, global slowdown in economy, reducing available funds, have hurt the VC sector in the US some and in Israel much more. And Israel is the focus here in this blog.
The open questions is: What will happen to start-ups next?
Some funds will probably survive and continue to invest and raise funds. These will probably be the more successful funds with an impressive track record. For the most start-ups the options will probably be one of the following two:
1- Start-ups requiring small investments to reach the market would continue to find such investments locally, and would probably find the government aid tools very supportive.
2 - Start-ups requiring large investments would face greater problems. Angels would find it difficult to invest in such firms knowing they would be ousted and could probably show very little for their investment. It is probable that ideas requiring large investments would emigrate to places where they could find such investment, resulting in lost employment opportunities for the Israeli market, as well as brain drain to such places.
Another potential solution would be the re-occurrence or raise in fame of the Bootstrap. That option, of a new firm living of its revenues and growing slower than start-ups, but better fitted for the market, would probably become more popular. These firms could probably raise funds for growth based on debt and market performance and show good return on investment. They would be able to substantiate their presence in the local market and increase employment possibilities locally.
When will all that happen? As we say here, after the holidays.. but which holidays?
Sunday, August 15, 2010
Disney Sued for Cookies
Yesterday CNET published that a group of parents were suing Disney, Warner Bros and several others for tracking the movements of surfers among them children. While this may seem like the simple battle between the citizens for their rights, against the large corporations trying to exploit them, there is a need to think more about the steps taken.
The steps that were taken by the companies were not for infringement of rights, that was incidental, the motive was gain. They wanted to track their customers and identify their interests, create surfer profiles etc., so as to improve ads, and offers on their sites.
Similarly, there is an on-going web debate about the right for privacy versus commercialization.
We must not forget that we are consumers of a service when we deal with the internet, and that the web is saturated with competition. When firms produced products that were not environment friendly, or that the firms themselves were not environment friendly, consumers knew how to hurt these firms by not buying their products.
Such an act on the web could work, should work, would work - only probably much faster. At an earlier post from June 25th I referred to the way the followers of Nestle on the web were punishing it. This could be done to the firms that use the Flash cookies as mentioned above. If we remove the economic benefits that the firms derive, it will be more effective than legal action, there are no loopholes here or talented lawyers that can let the firms get away with it.
The steps that were taken by the companies were not for infringement of rights, that was incidental, the motive was gain. They wanted to track their customers and identify their interests, create surfer profiles etc., so as to improve ads, and offers on their sites.
Similarly, there is an on-going web debate about the right for privacy versus commercialization.
We must not forget that we are consumers of a service when we deal with the internet, and that the web is saturated with competition. When firms produced products that were not environment friendly, or that the firms themselves were not environment friendly, consumers knew how to hurt these firms by not buying their products.
Such an act on the web could work, should work, would work - only probably much faster. At an earlier post from June 25th I referred to the way the followers of Nestle on the web were punishing it. This could be done to the firms that use the Flash cookies as mentioned above. If we remove the economic benefits that the firms derive, it will be more effective than legal action, there are no loopholes here or talented lawyers that can let the firms get away with it.
Friday, July 30, 2010
Which came first Technology or market demand?
Before you rush forward with the answer, or get annoyed, this is more than just a philosophical question. When you start learning marketing or economics you learn about demand and supply, you learn to draw the curves and to fix a price. Of course for marketing, once there is a demand in the market, the rest is a long solved problem on how to respond. So if your answer if that the demand came before the supply, than at least in the classical world of marketing, you know how to proceed.
But, I can hear some of you asking, about those few cases in which the technology preceded the demand, the internet and its environment are such cases, there were many services / products that did not exist before and demand did not exist.
So it would seem that the right answer to the question above would be "YES". While you think about that I would like to mention a small joke that anyone learning marketing in Israel must have heard at one point at least (could be just an Urban legend): in the 1950's a shoe factory in a kibbutz sent two salesmen to Africa one to east Africa and one to the western parts, to assess the marketing potential of the factory. The first evening the first salesman calls the factory and says:"There is nothing here for us, everybody is walking barefoot, I return tomorrow". Before they can get their balance back, the other one calls and says:" start working in three shifts, the market is enormous, everyone here is barefoot". The story as I know it stops here.
The first salesman is the case of missing demand, even if the technology / product exists. It requires educating the market into creating the demand. This can often be lengthy and expensive, and as a result of that - risky.
While the risk may be acceptable to a large firm, for an SME, or a start-up it could be dangerous. The firm may spend its limited resources and die before the market is created, or may create the market just to have a larger firm exploit it.
In Israel where many of the start-ups are technology based, this is a very risky point. There are many firms starting with a wonderful technology, but with little market demand, and what is "obviously a great idea" to the technology people is often not so clear to the customers in the market. These are the great technologies that fail, not due to lack of ideas, or capabilities, but due to better understanding the technology than the market.
If one recalls the High-Tech crisis that occurred when the 3rd generation of communication failed to be accepted by customers, not because it was not good, or not impressive, it was just that the market was not used to such rapid technology changes. It was necessary to make people understand that they wanted / needed the new capabilities before they were ready to make the change.
Great technology is not all - a great market can be.
But, I can hear some of you asking, about those few cases in which the technology preceded the demand, the internet and its environment are such cases, there were many services / products that did not exist before and demand did not exist.
So it would seem that the right answer to the question above would be "YES". While you think about that I would like to mention a small joke that anyone learning marketing in Israel must have heard at one point at least (could be just an Urban legend): in the 1950's a shoe factory in a kibbutz sent two salesmen to Africa one to east Africa and one to the western parts, to assess the marketing potential of the factory. The first evening the first salesman calls the factory and says:"There is nothing here for us, everybody is walking barefoot, I return tomorrow". Before they can get their balance back, the other one calls and says:" start working in three shifts, the market is enormous, everyone here is barefoot". The story as I know it stops here.
The first salesman is the case of missing demand, even if the technology / product exists. It requires educating the market into creating the demand. This can often be lengthy and expensive, and as a result of that - risky.
While the risk may be acceptable to a large firm, for an SME, or a start-up it could be dangerous. The firm may spend its limited resources and die before the market is created, or may create the market just to have a larger firm exploit it.
In Israel where many of the start-ups are technology based, this is a very risky point. There are many firms starting with a wonderful technology, but with little market demand, and what is "obviously a great idea" to the technology people is often not so clear to the customers in the market. These are the great technologies that fail, not due to lack of ideas, or capabilities, but due to better understanding the technology than the market.
If one recalls the High-Tech crisis that occurred when the 3rd generation of communication failed to be accepted by customers, not because it was not good, or not impressive, it was just that the market was not used to such rapid technology changes. It was necessary to make people understand that they wanted / needed the new capabilities before they were ready to make the change.
Great technology is not all - a great market can be.
Thursday, July 15, 2010
Taking your kids to work - The great Summer Opportunity
The Summer is here - a point very difficult to ignore in Israel, and many parents are facing the problem of what to do with their kids during the Summer. There are Summer schools and other possibilities such as vacation with the family, but they rarely cover the entire vacation period.
So at some point the bright idea - "why not take them to work ?" pops up.
Some places do not allow children, they claim that it is due to the fact that having the children come to work reduces productivity and may be disruptive. Unless it is a question of safety, I think the real reason is the wish to avoid being embarrassed by having them see something like that::
By the way, do not be surprised if in today's world when you come home and tell at dinner that you had a real big fight at work that they think it went something like this:
Getting back to our discussion, the big question is:"can you get something out of their visit?" that is in addition to spending time with the younger members of the family - that is to say that this post is just as rlevant for grandparents as to parents.
In a recent post Prof. Shlomo Maital mentioned that the point of view, innocent outlook and lack of filters regarding asking questions that children have can help innovators with promoting their innovations. I claim here that not only entrepreneurs, or grand innovators can benefit from that but rather every business with open enough attitude.
In many veteran organizations, routines have developed, and due to embedded inertia have not been reviewed and updated according to needs and new technology. Many of the currently employed routines are no longer efficient, but we are used to them and do not review them daily. It is at that specific point, that when you explain to a child what you do, that their questions may help you see that some things need and can be changed / improved. If they see that A sends a request to B for something that C has to do, they will ask why not just ask C? In the past that routine had a reason, but that reason is long gone - the cycle can be made more efficient. The maximum risk is that you just practice explaining what you do (always good), and might get some funny insights regarding your work, the best scenario is to you learn something that can be improved.
While this is general, and might have always been true, there is a more current benefit to consider. Most of us are not computer native (e.g. me), that is to say, have been borne into a computerized environment, but rather have learnt to work in a computerized environment as these evolved in the 1990's and 2000's. I would dare say that none of the workers at your place are web natives (these are too young to be workers - if you do have any of those please check your employment policy). Our kids are web native, for them processes that can be done by computer, or better by web and are not being done seem strange and they will ask you why? This could be your opportunity to see how your work is seen by a web native - you many never see it the same again.
Many organizations spend a lot of money on organization consultants, where some preliminary checks can actually be done by having the kids over to work and explaining to them what it is we do. At minimum they will understand us better (a great value just by itself), but at maximum we could get a free consultant (not really free I know - have kids of my own) over view our workplace.
Going back to the point above regarding safety at work, if you think we cannot learn from them there please see the small movie below:
One interesting point that I noticed bringing my kids to work a few years ago, is that they analyze the "chain of command" very astutely, ignoring completely titles on the door. They see who tells what to do, who needs to ask permission and for what, they look at the real "chain of command" and not the official one.
Wishing you a happy warm Summer
So at some point the bright idea - "why not take them to work ?" pops up.
Some places do not allow children, they claim that it is due to the fact that having the children come to work reduces productivity and may be disruptive. Unless it is a question of safety, I think the real reason is the wish to avoid being embarrassed by having them see something like that::
By the way, do not be surprised if in today's world when you come home and tell at dinner that you had a real big fight at work that they think it went something like this:
Getting back to our discussion, the big question is:"can you get something out of their visit?" that is in addition to spending time with the younger members of the family - that is to say that this post is just as rlevant for grandparents as to parents.
In a recent post Prof. Shlomo Maital mentioned that the point of view, innocent outlook and lack of filters regarding asking questions that children have can help innovators with promoting their innovations. I claim here that not only entrepreneurs, or grand innovators can benefit from that but rather every business with open enough attitude.
In many veteran organizations, routines have developed, and due to embedded inertia have not been reviewed and updated according to needs and new technology. Many of the currently employed routines are no longer efficient, but we are used to them and do not review them daily. It is at that specific point, that when you explain to a child what you do, that their questions may help you see that some things need and can be changed / improved. If they see that A sends a request to B for something that C has to do, they will ask why not just ask C? In the past that routine had a reason, but that reason is long gone - the cycle can be made more efficient. The maximum risk is that you just practice explaining what you do (always good), and might get some funny insights regarding your work, the best scenario is to you learn something that can be improved.
While this is general, and might have always been true, there is a more current benefit to consider. Most of us are not computer native (e.g. me), that is to say, have been borne into a computerized environment, but rather have learnt to work in a computerized environment as these evolved in the 1990's and 2000's. I would dare say that none of the workers at your place are web natives (these are too young to be workers - if you do have any of those please check your employment policy). Our kids are web native, for them processes that can be done by computer, or better by web and are not being done seem strange and they will ask you why? This could be your opportunity to see how your work is seen by a web native - you many never see it the same again.
Many organizations spend a lot of money on organization consultants, where some preliminary checks can actually be done by having the kids over to work and explaining to them what it is we do. At minimum they will understand us better (a great value just by itself), but at maximum we could get a free consultant (not really free I know - have kids of my own) over view our workplace.
Going back to the point above regarding safety at work, if you think we cannot learn from them there please see the small movie below:
One interesting point that I noticed bringing my kids to work a few years ago, is that they analyze the "chain of command" very astutely, ignoring completely titles on the door. They see who tells what to do, who needs to ask permission and for what, they look at the real "chain of command" and not the official one.
Wishing you a happy warm Summer
Sunday, July 4, 2010
Technology Incubators - a Sad Story
The Israeli Technology Incubator program which started in the early 1990 (first one was owned by the Technion - started in 1989) as a program initially intended to assist in absorbing the new immigrants from the former USSR, is considered a raw model, worthy of study and copying attempts by different countries. As mentioned in an earlier post there was a Finnish delegation here last month which was interested in checking and adapting the model for their needs. Together with the development of the VC market here the two formed two of the founding stones of the myth of Israel the entrepreneurial state, the homeland of innovation.
Recent set-backs to the VC market in Israel have exposed that founding stone of the myth, as a myth by itself. The fact that the VC in Israel could find investment was true enough, that they could make these investments pay-back enough to sustain the industry was not. More than that, it would seem that the damage the VC's and their strategy have done to the Israel economy could be fully understood only at a much later date. Their policy of sale to large multi-nationals that moved the core out side the country and negated the formation of an employment center has had a negative impact on the employment rate and growth, that only with time could be accurately estimated. The damage from VC and their capitalization or return on investment strategy can be seen in Prof. Maital's Lecture.
Recent publication regarding the Technology Incubators and their loan from the Ministry of Finance in 2003, seem to start peeling the myth from that founding stone as well.
In 2003, as it was decided that the incubators should be set to be financially independent. New agreements were made, the incubators' ownership changed hands in many cases and a new era began. Based on the change and a part of the agreement, was that Ministry of Finance fronted as a loan to the incubators over 80 million NIS. They were supposed to return the loan from the proceeds on the sales of their shares in the firms. These shares were the collateral for the loans. Now as according to publication less than 15 Million NIS have been returned so far, MoF which according to the agreement owns the shares, is considering its next move.
The original concept was, that in the post high-tech crisis the incubators would be set on a footing similar to that of VC's and that they could sustain their own operations based on the sale of their holdings. The market was estimated to be ready for such action. If the program worked, the government would be free from supporting the incubators, and could focus on supporting just the firms, and later on release more funds due to their income for investment in firms and projects.
While some may say that the market is at fault as it could not allow the sale of the firms held by the incubators generate enough income to sustain the incubators and more than that make them profitable enough to return the loans and become independent. My personal view is that the model is at fault. If the government is no longer looking at Technology Incubators as a means for absorbing technologically enhance immigration, but as a growth engine than the out look should change completely.
When I was CEO of a company in a Technology Incubator in the 1990's we managed to complete the development of a first generation of products and do some sample sales. While the sales were commencing only, we received from the Incubator's authority in the Chief Scientist a caution that if we start sales they would reduce our loan by the amount we raise by sales. So we labeled the sales we did as experimental sales and stopped, moving instead to the development of the second generation of products.
In the current state of affairs I think that firms in incubators should be encouraged to become economically independent asap, this should differentiate them from firms outside the incubator. It would allow them to generate income for the incubator, and perhaps also if sales are expected allow them to get better prices. It would also increase the chances of sustaining here the employment center.
While is seems that other countries envy us for our "achievements" in innovation, which seem to vanish with time, we could learn from our experience and try and make the legend come true.
Recent set-backs to the VC market in Israel have exposed that founding stone of the myth, as a myth by itself. The fact that the VC in Israel could find investment was true enough, that they could make these investments pay-back enough to sustain the industry was not. More than that, it would seem that the damage the VC's and their strategy have done to the Israel economy could be fully understood only at a much later date. Their policy of sale to large multi-nationals that moved the core out side the country and negated the formation of an employment center has had a negative impact on the employment rate and growth, that only with time could be accurately estimated. The damage from VC and their capitalization or return on investment strategy can be seen in Prof. Maital's Lecture.
Recent publication regarding the Technology Incubators and their loan from the Ministry of Finance in 2003, seem to start peeling the myth from that founding stone as well.
In 2003, as it was decided that the incubators should be set to be financially independent. New agreements were made, the incubators' ownership changed hands in many cases and a new era began. Based on the change and a part of the agreement, was that Ministry of Finance fronted as a loan to the incubators over 80 million NIS. They were supposed to return the loan from the proceeds on the sales of their shares in the firms. These shares were the collateral for the loans. Now as according to publication less than 15 Million NIS have been returned so far, MoF which according to the agreement owns the shares, is considering its next move.
The original concept was, that in the post high-tech crisis the incubators would be set on a footing similar to that of VC's and that they could sustain their own operations based on the sale of their holdings. The market was estimated to be ready for such action. If the program worked, the government would be free from supporting the incubators, and could focus on supporting just the firms, and later on release more funds due to their income for investment in firms and projects.
While some may say that the market is at fault as it could not allow the sale of the firms held by the incubators generate enough income to sustain the incubators and more than that make them profitable enough to return the loans and become independent. My personal view is that the model is at fault. If the government is no longer looking at Technology Incubators as a means for absorbing technologically enhance immigration, but as a growth engine than the out look should change completely.
When I was CEO of a company in a Technology Incubator in the 1990's we managed to complete the development of a first generation of products and do some sample sales. While the sales were commencing only, we received from the Incubator's authority in the Chief Scientist a caution that if we start sales they would reduce our loan by the amount we raise by sales. So we labeled the sales we did as experimental sales and stopped, moving instead to the development of the second generation of products.
In the current state of affairs I think that firms in incubators should be encouraged to become economically independent asap, this should differentiate them from firms outside the incubator. It would allow them to generate income for the incubator, and perhaps also if sales are expected allow them to get better prices. It would also increase the chances of sustaining here the employment center.
While is seems that other countries envy us for our "achievements" in innovation, which seem to vanish with time, we could learn from our experience and try and make the legend come true.
Friday, June 25, 2010
The Internet as a Marketing Tool - do we realy understand it?
The internet and especially the social networks in it, such as Facebook an others interest the commercial community. The use of social networks interests as a marketing tool for specified target market segments, with identified opinion leaders - the pipe dream of a marketing manager.
Consider a Facebook page of teenagers from a specific school living in a specific area demonstrating a cohesive market segment with similar socio-economic status, similar tastes and preferences and opinion leaders. By using the Facebook community and the opinion leaders, marketing of specially selected products can be done with amazing accuracy and higher efficiency than classical advertizing ever could before - a case of accelerated "word to mouth" combined with an expert opinion.
The situation mentioned above would make it seem as if this was a world of marketing managers. Acting wisely has its rewards. The social networks respond quickly, accurately and efficiently, and reaching the entire target population is fast and relatively easy. Spreading the news may be compared to a flash bulb going off - short and very bright.
But the success stories and big sales are mingled with ethical problems and even commercial problems and heavy damages. The social networks are as dangerous as they are promising success.
Nestle and Social Networks
If you want the story behind Nestle recent trouble in public relations you can find one version in the Guardian. The story is (according to CNET for example) that Nestle was attacked by Greenpeace for using oil from environmentally mismanaged plantations which resulted in the killing of orangutans. Greenpeace published a video to that effect. In an attempt to block it Nestle used its Facebook fans support page to assmbl enough support for u-tube to remove the video, under the claim that it violated copyrights. The fans were responding and some of them used modified logos of Nestle as their pictures in Facebook which the firms asked them to removed as it violated the firm's trademark rights.
That move started a negative response avalanche which the firm's responses, treating the issue as a legal problem while the fans regarded it a freedom of speech issue. According to the Guardian over 90,000 responders have signed in, most of them arguing with the firm.
The company Nestle made several mistakes, at first it supplied a stage among its supporters for Greenpeace to present its own case. Thus Nestle made sure that more people saw the video that Greenpeace could hope for. The company increased the damage the attack could do. The bigger mistake it made was of course to get into a direct, public fight in which Nestle seemed to be in the wrong with its own followers. Nestle came out from both claims as an anti free speech organization, inflexible and unfriendly.
It is easy to analyze the mistake in hindsight, but where did the firm actually go wrong?
It would seem that if 15 years ago a video was being aired (TV, Video, cinema etc.) and it approached the authorities with the claim that it infringed copyrights, it would probably have succeeded, and be held a serious firm standing for its rights. If at the time it found out that people were using the modified fir logo on stationary it would probably also find support for requesting that this be stopped. But we are in a new and different place today. In the world of social networks the rules are different, everything you say is seen by the whole world (potentially) and therefore must be reasonable or at least explained. Moreover, the world of social networks on the internet, does not like censorship of any kind, and is different than the business world. Nestle could have announced a contest regarding its logo to present the firms new commitment to the environment and harnessed the social networks public's creativity to its benefit, generate positive feeling towards the firm and move the focus away from the film. After all if no one is fighting the internet audiences move their attention to other topics. At least it would have forced Greenpeace to produce something new and work to earn the attention they wanted - not do their work for them.
What can be done?
One option of course is to ignore the social networks, but that option would leave the field to the competition which would be a big mistake. Could result in the firm ignoring the social networks, loosing huge market shares. Another option, which many firms seem to select as their course of action, is to enter the world of social networks, while assuming that it is similar to the world they know, only with a faster technology and better results. As the Nestle case shows this would be just as huge a mistake. Another option, requiring a lot of work, would be to enter the world of social networks on the internet, while learning the rules of the new world, employing people who understand it to operate the activity for the firm. One must bear in mind that this is not just a new technology this is a world with new rules.
Consider a Facebook page of teenagers from a specific school living in a specific area demonstrating a cohesive market segment with similar socio-economic status, similar tastes and preferences and opinion leaders. By using the Facebook community and the opinion leaders, marketing of specially selected products can be done with amazing accuracy and higher efficiency than classical advertizing ever could before - a case of accelerated "word to mouth" combined with an expert opinion.
The situation mentioned above would make it seem as if this was a world of marketing managers. Acting wisely has its rewards. The social networks respond quickly, accurately and efficiently, and reaching the entire target population is fast and relatively easy. Spreading the news may be compared to a flash bulb going off - short and very bright.
But the success stories and big sales are mingled with ethical problems and even commercial problems and heavy damages. The social networks are as dangerous as they are promising success.
Nestle and Social Networks
If you want the story behind Nestle recent trouble in public relations you can find one version in the Guardian. The story is (according to CNET for example) that Nestle was attacked by Greenpeace for using oil from environmentally mismanaged plantations which resulted in the killing of orangutans. Greenpeace published a video to that effect. In an attempt to block it Nestle used its Facebook fans support page to assmbl enough support for u-tube to remove the video, under the claim that it violated copyrights. The fans were responding and some of them used modified logos of Nestle as their pictures in Facebook which the firms asked them to removed as it violated the firm's trademark rights.
That move started a negative response avalanche which the firm's responses, treating the issue as a legal problem while the fans regarded it a freedom of speech issue. According to the Guardian over 90,000 responders have signed in, most of them arguing with the firm.
The company Nestle made several mistakes, at first it supplied a stage among its supporters for Greenpeace to present its own case. Thus Nestle made sure that more people saw the video that Greenpeace could hope for. The company increased the damage the attack could do. The bigger mistake it made was of course to get into a direct, public fight in which Nestle seemed to be in the wrong with its own followers. Nestle came out from both claims as an anti free speech organization, inflexible and unfriendly.
It is easy to analyze the mistake in hindsight, but where did the firm actually go wrong?
It would seem that if 15 years ago a video was being aired (TV, Video, cinema etc.) and it approached the authorities with the claim that it infringed copyrights, it would probably have succeeded, and be held a serious firm standing for its rights. If at the time it found out that people were using the modified fir logo on stationary it would probably also find support for requesting that this be stopped. But we are in a new and different place today. In the world of social networks the rules are different, everything you say is seen by the whole world (potentially) and therefore must be reasonable or at least explained. Moreover, the world of social networks on the internet, does not like censorship of any kind, and is different than the business world. Nestle could have announced a contest regarding its logo to present the firms new commitment to the environment and harnessed the social networks public's creativity to its benefit, generate positive feeling towards the firm and move the focus away from the film. After all if no one is fighting the internet audiences move their attention to other topics. At least it would have forced Greenpeace to produce something new and work to earn the attention they wanted - not do their work for them.
What can be done?
One option of course is to ignore the social networks, but that option would leave the field to the competition which would be a big mistake. Could result in the firm ignoring the social networks, loosing huge market shares. Another option, which many firms seem to select as their course of action, is to enter the world of social networks, while assuming that it is similar to the world they know, only with a faster technology and better results. As the Nestle case shows this would be just as huge a mistake. Another option, requiring a lot of work, would be to enter the world of social networks on the internet, while learning the rules of the new world, employing people who understand it to operate the activity for the firm. One must bear in mind that this is not just a new technology this is a world with new rules.
Saturday, June 19, 2010
Business Development and Clean Tech
Business Development and Clean-Tech would at first look seem to be just as relevant As Business Development and Communications for example. But it seems that those dealing with Business Development, the Clean Tech sector holds a special interest.
The drive towards more and more awareness regarding environmental issues has increased the interest of firms in Clean-Technologies. Whether these are technologies for better energy management and decreased usage of energy sources, recycling, usage of less waste producing manufacturing, the production of renewable energies and more, firms in different sectors have been looking at these technologies.
In many cases firms, after being pushed into a first look due to market pressure, that is, in order to better sell their products, or maintain their market share, get acknowledged as "Green" etc., realize that the Clean-Tech they were looking into, could directy influence their cost structure and help theri profitability.
While we will not discuss here how exactly each firm may benefit from absrbing environmentaly friendly technologies, the search and increased interest has led to widespread activity in the field. From the point of view of the technology or knowledge providers, the issue of technology transfer and Business Development in that sector are important parameters.
While there is an article of mine soon to be published ( a link will be provided from my site at: www. amiramporath.co.il) on the topic, here I would like to present some points for your onsideration:
The drive towards more and more awareness regarding environmental issues has increased the interest of firms in Clean-Technologies. Whether these are technologies for better energy management and decreased usage of energy sources, recycling, usage of less waste producing manufacturing, the production of renewable energies and more, firms in different sectors have been looking at these technologies.
In many cases firms, after being pushed into a first look due to market pressure, that is, in order to better sell their products, or maintain their market share, get acknowledged as "Green" etc., realize that the Clean-Tech they were looking into, could directy influence their cost structure and help theri profitability.
While we will not discuss here how exactly each firm may benefit from absrbing environmentaly friendly technologies, the search and increased interest has led to widespread activity in the field. From the point of view of the technology or knowledge providers, the issue of technology transfer and Business Development in that sector are important parameters.
While there is an article of mine soon to be published ( a link will be provided from my site at: www. amiramporath.co.il) on the topic, here I would like to present some points for your onsideration:
- Is the Clean-Tech really one sector? Are the developers of water treatment infrastructure size plants in the same market, as the developers of home water filtration systems?
- If we are dealing with different secors, how would that influence the parameters of Business development and Technology Tranfer?
- Regarding the role of the IP managers in firms, and Technology Transfer officers in research organizations, how would these roles change as a result of the activity in the Clean-Tech sector?
- Which would be the best way for governments to encourage activities in Clean-Tech based on the above?
In order to demonstrate the level of importance that discussion has receeved and to give preliminary answers to the questions above please see the films in the links below, recently published on the web by the European Patent Office (EPO). some of the recent films were fillmed during an internal conference on the topic held recently.
Enjoy,
Amiram Porath
Links for this post:
- http://www.epo.org/topics/issues/clean-energy/films/renewable.html
- http://www.epo.org/topics/issues/clean-energy/films/films.html
- http://www.epo.org/topics/issues/clean-energy/films.html?update
Saturday, June 12, 2010
By writing this blog I intend to express my opinions, research results and general ideas regarding business development, business opportunities and innovation. the blog is not intended to serve as a scientific publication, but rather as a practitioners' basic discussion platform.
My main occupation is innovation and especially Open Innovation. The term Open Innovation relates to innovation that comes to the firm from outside; from other firms, research organizations, consultants and others. That is in contrast to internal innovation which stems from within the firm.
While Israel may appear as a good source for best practices in innovation, as it is important to remember that Israel is very different in its industrial sectors structure than EU member states. When referring to and SME in Israel one would normally refer to a high-tech company, a start-up company. In which case the size and performance would relate to its life length and success. In the EU as there are far more traditional sector SMEs than high-tech SMEs, the same assumption as in Israel cannot be made.
Based on the assumption that SMEs are start-up companies, the Israeli system of innovation was based on assuming that the SMEs perform research and need only be supported. It assumes that the SMEs know an want to manage R&D and need the parters or financial support.
Therefore the tools developed in Israel cannot be coppied as such to other countries such as the EU member states that see SMEs as mostly traditional sector firms, which have no idea how to manage R&D and how to introduce its results to their internal routines.
Last week a mission from Finland of high-tech firms visited Israel. They came to see the Israeli model meet firms here and make contacts and search for partnerships.
How can the model be coppied?
We may deal with that next post. In the meantime have a look at the links......
My main occupation is innovation and especially Open Innovation. The term Open Innovation relates to innovation that comes to the firm from outside; from other firms, research organizations, consultants and others. That is in contrast to internal innovation which stems from within the firm.
While Israel may appear as a good source for best practices in innovation, as it is important to remember that Israel is very different in its industrial sectors structure than EU member states. When referring to and SME in Israel one would normally refer to a high-tech company, a start-up company. In which case the size and performance would relate to its life length and success. In the EU as there are far more traditional sector SMEs than high-tech SMEs, the same assumption as in Israel cannot be made.
Based on the assumption that SMEs are start-up companies, the Israeli system of innovation was based on assuming that the SMEs perform research and need only be supported. It assumes that the SMEs know an want to manage R&D and need the parters or financial support.
Therefore the tools developed in Israel cannot be coppied as such to other countries such as the EU member states that see SMEs as mostly traditional sector firms, which have no idea how to manage R&D and how to introduce its results to their internal routines.
Last week a mission from Finland of high-tech firms visited Israel. They came to see the Israeli model meet firms here and make contacts and search for partnerships.
How can the model be coppied?
We may deal with that next post. In the meantime have a look at the links......
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