Monthly Archive for May, 2006

And the PC becomes more irrelevant…

May 30, 2006

… with every passing day! Today we aren’t just storing data online, but are now using applications that run straight off the web to work with that data. At this stage in the evolution of web applications, we’ve done a very good data to store and manipulate textual data online. There’s very little of that kind of stuff on my hard disk any more. Consider this:

I’m typing this post in my Gmail “compose” window, since I can post to Blogspot using a secret email address (Blogger drives this weblog). To take quick notes, jot down ideas, I use Google Notebook. To write longer documents, more elaborate posts, papers, articles and the like, I turn to Writely. My email (my rahul@rahulgaitonde.org account is now hosted by Google at www.google.com/hosted) is now online. It used to be a POP3 account, and I used to download mail to my Thinkpad and use Thunderbird, but no longer. My address book is, of course, stored online too. My bookmarks are no longer a long list in Firefox. Instead, I use del.icio.us.

I am now at a point where for most of my day-to-day work, the computer I use does not matter. At home, I can use the Thinkcenter, my Thinkpad, I can walk across the street to the Internet Cafe, or for that matter the access terminals at most International Airports, and continue from where I left off. The same applications, the same data. We can now see the ultimate goal in the distance – making Data independent of Device!

What’s next? There are two imperatives: 1.) Better tools for storing and working with other multimedia – pictures, videos, music, and such. 2.) Providing mobile interfaces to each of these appliations.

I’m now migrating all the pictures in the “My Pictures” folder to Flickr. However, Flickr, although very good, doesn’t quite match up to the simple, humble Windows Explorer for managing pictures, so forget about competing with applications like Picasa. There are elementary things we’ve learnt to do, such as pre-fetching pictures in a slideshow, and smooth Flash interface (Flickr), but we still need improvement. Managing bandwidth effectively, for instance. The same goes for managing videos with YouTube. We’re still one or two evolutionary stages away on that front.

As far as music goes, we have most of the infrastructure in place. But we’ve got to think beyond simply translating the local HDD paradigm into an online thing. Most efforts today are about providing online space (in addition to eliminating duplicates), and then streaming to a player. Bob Cringely had examined a few applications late last year, but all of them are based on the old paradigm. Why buy a CD, rip, upload, and then stream back?

These are some problems we’ve got to solve for any medium richer than text. But we’re getting there, we’re getting there!

Telcos are looking to play ISP – NYT

May 19, 2006

I wrote an opinion piece a while back about the battle between 3G and WiFi (that is, 802.11b/g/n v/s WCDMA/EDGE). To put it briefly, ISPs are increasingly getting households, businesses and cities connected via WiFi. At the same time, telcos are offering Internet access via mobile using 3G. Once they get ordinary devices (desktops, laptops) with 3G cards to access the Internet through their 3G networks, we’ve set the stage for a fierce turf battle between ISPs and Telecom Companies.

A report in the New York Times seems to confirm my predictions. (“Going Wireless Most Places You Go”, NYT).

“Wi-Fi, the wireless networking technology that can create an invisible field of Internet access over a limited area, has revolutionized the world of mobile computing. But while Wi-Fi is serving up Internet access in a growing patchwork of places like coffeehouses and, in some cases, across entire cities, it can fall short of the demands of laptop users who want a gateway to the Internet essentially everywhere they go.

“Another wireless option on the rise, this one from cellular carriers, provides high-speed Internet access over many of the nation’s most populated and heavily traveled regions. These services, made possible by the new networks that carriers are referring to as 3G (for “third generation”), may be useful to business travelers, professionals who need a connection constantly within reach, businesses with roving employees or small groups of users looking to share a single connection.”

The report then goes on to outline vendors, plans, hardware needed and such. But the essence is clear – telcos are looking to play ISP!

In fact, I think this battle will be played out more in India and (maybe) China, given the relatively low Internet penetration, and the scorching pace of growth of mobile connectivity. The US, on the other hand, is pretty saturated. Ironically, so is South Korea. There will be tremendous growth in all these markets in terms of getting more and more devices online (and that will also trigger an identical battle), but revenue from that will pale in comparison to getting PCs and notebooks online, through wiring up cities, communities – that kind of market is growing only in India and China.

(Of course, the reverse is also true – think VoIP, which is giving telcos nightmares, but has ISPs smacking their lips in sweet anticipation!)

Gmail and managing clutter

May 6, 2006

It’s official – Gmail’s conversation view is the best way to manage lots of email. Evidence? Well, the internal mailing list that IIM Kozhikode students set up has seen well over a thousand messages in the past three weeks. Almost all those who chose to receive this deluge of email in their Yahoo! webmail inboxes have been unable to deal with the traffic, and have either simply lost track of content and have given up reading it, or have been unable to locate the information they need. On the other hand, those of us with Gmail accounts have had little or no trouble. Although my Gmail inbox has gone up from roughly 2200 email conversations to 3100 conversations in these 3 weeks, I never felt as if I couldn’t manage to read content as it came in, or re-visit the content that I wanted to.

I also carry an offline version of Gmail (via POP3) on Mozilla Thunderbird. I have to create folders and filters all the time to manage the same email that I can easily view without a single folder using Gmail’s browser-based client. Somehow the “view thread” view in both Mozilla Thunderbird and IBM Lotus Notes doesn’t match upto the slickness of Gmail’s implementation. Perhaps that’s because the thread view is an additional feature, an afterthought, whereas Gmail was designed from the ground-up with the conversation view in mind. But it’s pretty certain that the conversation paradigm is the base for future evolution of email management. Conversations are currently the best way to preserve the context of information in an email thread, which is crucial. Lotus Notes does it very well by showing quoted text in a very easy-on-the-eye manner, but most other email clients just don’t compare.

Venture Caps versus Acquisitions

May 1, 2006

Spending some more time on Ed Sim’s blog (hmm – I’m reading a lot of VC blogs lately – I’m in that kind of mood :-) , I came across a most insightful, must-read post . Ed describes changes in the Internet Venture Capital business that need to happen, since the “VC model is broken”. So what is wrong and what needs to be fixed?

Market-side:
The Googles and Yahoos (and increasingly the Microsofts) of the technology industry are making faster, quicker acquistions. This is no market consolidation – the industry’s growing differently from the bubble-days. This time round, there are larger, established players in this fast-growing market who’re competing aggressively against each other to expand into newer areas, with newer business models targetting a different niche of users.

I mentioned that the market is growing very fast – that means that valuations of startups are changing just as quickly. That’s another reason why an acquirer will want to swoop in faster than it would have in more stable circumstances. There is less risk involved in such fast aquistions since the market has matured (in comparison to the pre-bubble days), the user base is there, the business models are there, the technology infrastructure (storage, connectivity and bandwidth) is in place, so software as a service is a tried-and-trusted model in many ways.

What does this mean for the VC?
It means that the 10x and above returns that he/she was used to, are drying up. To be able to bootstrap itself and generate a cashflow that will see it through break-even, the amount of capital that a startup needs today is far lower than the bubble days. We’re talking of in the $10-15 million range as opposed to $50 million. At the same time, as I pointed out in the preceeding paragraph, the acquisition-based exits have valuations which are smaller (since the acquisitions themselves happen faster).

VCs want larger exit-time valuations (for their traditionally very high returns). Now these are increasingly getting squeezed by the GYM variety of companies (Google, Yahoo, MS). In fact, we’re reaching a stage where the public listing-style exit route is almost exctinct.

So both input and exit figures have botten smaller, and to be able to get 10x returns and maintain volumes, VCs will need to get more deals done. That calls for multiple small funds , each tightly focussed on a technology area. For instance, one for VoIP solutions. This will call for VCs to get smarter, identify ideas and firms quicker and smarter than before. Technical insight is more valuable than ever before .

As an aside, Ed points out the difference in the acquisition strategies of Google and Yahoo:

Google’s expertise seems to be buying engineers, many times before a product is even launched.  Yahoo, on the other hand, prefers to buy companies that have some nice user base, maybe no revenue model yet, but also before a VC round.