Sharing ideas with the world

Friday, March 30, 2012

Online Identity

3:09 PM Posted by Deepak Nayal No comments
It seems that people who design security policies for online banking, trading, or similar services do not really know much about human psyche. They want you to have a login password and a separate transaction password; these two should not be the same; and you need to be changing at least one of these every once in a while. And this is not just one account that you are managing. On an average a person might be managing more than fifteen online accounts, ranging from high security banking ones to the regular email ones (which by the way are no less important nowadays). Because of all this, usually people end up having common passwords for most of their accounts or end up writing them in some document - actually beating the purpose of increased account security. 
Image from siteboat.com

At the core of all these security mechanisms for various online services is a single common issue - Identity. All this security is put in place to ensure that you are who you say you are. In the real world we establish identity using some government documents such as passport, driving license, id card, etc. In most countries there is a well established system to identify its residents, however some people (read, criminals) still find ways of going around the system and forging identities. This problem of establishing identity exacerbates in the online world, as "stealing documents" or forging identities is much easier when it is all about 0s and 1s. 

Identity is, has been and for a long time will remain one the biggest problems to solve in the online world. Lately social networks have taken it upon them to solve this problem. Facebook, Twitter, LinkedIn and Google provide other web sites with mechanisms to authenticate and identify a user using security frameworks such as OAuth. However, these networks have their own motives to establish themselves as identity service of the net. While I am happy that I do not have to create a login id for every website that I visit, I also do not want to share information about every article that I read with my friends and family. This is the primary reason that even if a website provides an option to login using Facebook, I (and I am sure many others) choose to create a separate account. 

Having said that, Facebook has taken the lead in the online identity race; however, this race has only just begun. While these social networks work just fine for establishing identity for basic websites, these won't hold good for areas where we need more robust solutions, such as banking, finance and medical records. For example, it is not uncommon for general users to create multiple or fake accounts in such networking sites. This discourages the use of such services for robust online identity management. I believe this is where governments can step in and help solve the online identity dilemma. Just like in the real world the government [documents] establishes your identity, in the online world as well, government can have identity [web] service that proves your identity to the third party website without actually sharing your credentials with it. Such a central service can prove to be useful not just for commercial but for other social purposes as well. This could enable you to open a bank account without actually visiting its branch (thanks to financial liberalization, may be it is already happening!) or vote for your next prime minister from your comfort of your living room. This is one of those areas where public-private partnership can really prove to be better than a 100% pure solution of either kind. 

But even such [government-backed] identity solution cannot be used for all online applications, and that is because one of the basic advantages of online world is anonymity. Forcing people to identify themselves will discourage many from exploring different things, or raising their voices for a cause or against oppression. The web will always remain divided into anonymous and identified users. While the latter are required for getting serious stuff done, the former are required for exploring the possibilities of the virtual world.

Friday, March 23, 2012

Why I Think Interest Graph (Twitter, Pinterest And Quora) Is More Powerful And Useful Than Social Graph (Facebook and Google+)

6:35 PM Posted by Deepak Nayal , 1 comment
Social networking applications are the ones that connect one human to the other, either directly or via another entity (company, interest, cause, belief, etc.). By "social network" people generally refer to Facebook or Facebook-type applications; however, social networks include all social networking applications (fitting the above definition). There is a general consensus that all social networking applications can be divided into two major camps: social graph (Facebook, LinkedIn and Path) and interest graph (Twitter, Pinterest, Quora and StackOveflow). I have been a big believer in the power of interest graphs for quite some time now, and this belief has recently been strengthened further. 

  • Sometime back I put a requirement of a designer for my project on all my social networks (Facebook, Twitter, LinkedIn and Google+). Guess which one had the maximum responses? In the decreasing order of virality and responses, Twitter led the way with a huge margin. Then came LinkedIn with a slight lead over Google+. And last was Facebook with zero virality and responses. 
  • I recently joined Pinterest and pinned a few things to find out what the hype is all about, and I must say I am super impressed by it. It is not the application actually that has impressed me, but the Pinterest community. I have never seen any non-tech community as viral as that of Pinterest. Facebook and Twitter should really be concerned! 
  • I have been exploring StackOverflow and Quora for sometime now, and the speed and quality of answers (for the questions that do get answered) is really impressive. I found StackOverflow particularly interesting with the brilliant platform that they have built to promote user engagement and content curation. 

Though the sample size is very small, these are some of the many instances that have happened which have shown me the ever increasing utility of the interest graph. I guess the social graph giant (Facebook) also realizes this, which is why it has been working on adding interest graph related features in its social network for quite some time now. 

Virality and Utility
The virality of interest graph is obvious. While one might have only 200 "friends", with different interests, on one's social graph, there might be 20,000 people listening on to the same trend/channel, with shared interest. And when you are interested in a particular topic, it is much likely that you will be more actively engaged in sharing and discovering information related to it. 

Another reason for the increased virality of the interest graph is that people want to develop their reputation in their field of interest and want to be recognized. This human need is tapped when a gamification layer is added on top of the interest graph, something that Q&A sites Quora and StackOverflow do really well. On the other hand, this integration is harder to do on social graphs as the base intrinsic motivation (shared interest) might not be there in the first place. 

Social networks have become key content creation and discovery platform. Though I do not have the data to prove it, I believe most of the information shared online nowadays is done via social networks. This is especially helpful in sharing and discovery of information, news and entertainment related items - an area where the virality and utility of interest graphs (particularly Twitter) has been proven time and again. 

Crowdsourcing is another field that can benefit a lot from the interest graph, especially where the incentives are non-monetary. Combining people's intrinsic motivations and interests with the reach and scale of internet, online applications can and have opened various channels to leverage crowdsourcing. This is particularly true for creative domains, where quantity begets quality. However, this is one area where there is scope for much better applications to come and change the game, as the existing crowdsourcing applications do not leverage the interest graph that well. 

Web One. Two. Three. 
While web 1.0 was about getting information and data to the users (uni-directional), web 2.0 is about getting the information and data both to and from the users (bi-directional). Social networking applications have propelled the speed at which we share information online and have been the highlight of web 2.0. Though both social and interest graphs have their own benefits and contribute to social networking applications in their own way, I believe it is the interest graph that is the high note of the web 2.0 revolution. It is also probably the transitionary note of the web 2.0 era taking us into web 3.0, whatever that will be.

Tuesday, March 13, 2012

The Secret Is In The [Organizational] Framework

10:47 AM Posted by Deepak Nayal , No comments
When Apple crossed $500 billion market cap few weeks back, the world went abuzz with its achievements and the reasons behind success of its products (like that ever stopped). In the special memorial Apple event, held in Oct 2011, to pay tribute to the life and work of Steve Jobs, Tim Cook made a brilliant statement that sounds simple and yet holds the essence of the secret behind Apple's success. He said about Steve, "Other than his family, Apple would be his finest creation". That is so true. The reason Apple is able to make such amazing products is that Apple itself is a great product with the right framework. 

The book "Inside Apple" does a brilliant job of explaining how Apple is structured and is able to work with great secrecy, speed and tight integration between different divisions. The speed at which decisions are made and things get done is highly unusual in corporate world. It is this organizational framework, along with the cult status amongst its fans, that Apple is able to come up with such hit revolutionary products one after the other, while its competitors are struggling to follow its lead. While its competitors are trying to take a product-based view of this problem and trying to beat Apple by coming up with a better product, I believe the problem they are facing is more fundamental. They first need to optimize their own organizational framework to enable more agility and integration within the organization, and only then will they be able to come up with great i-killers. 
Financial Impact of Apple's Organizational Framework

The organizational framework provides you with the structure and processes to play with. When you put the right people in the right framework (yeah yeah, I know; way easier said then done), magic starts to happen. This magic can be seen in other tech leaders such as Google and Facebook as well. As the COO of Facebook, one of the most important tasks that Sheryl Sandberg is performing is ensuring that Facebook's organizational framework does not get overwhelmed by the speed of growth. For example, while in many companies, software release and update processes are bureaucratic and require many approvals and weeks, if not months, before any code change is made live, Facebook pushes major code changes every week. While Facebook's codebase is way more complex than average software, the company is able to constantly change and update it, because of the way the organization is structured, release processes are laid and employees are empowered. It has the right organizational framework - for its needs - that has evolved over time, and it is important that Facebook does not lose it while growing at breakneck speed. 

I have worked with many enterprises to see how companies become victims of their own growth. Initiating and delivering even a small project can take months, require many approvals and tens of meetings. The problem is not that these companies do not have the right framework; very few do anyway. The problem is that they do not try to optimize their existing framework. Senior management focuses on strategy, vision, markets, etc. and not much attention is paid to getting the basics right first. The result of this skewed attention is that a lot of strategies and plans either fail or do not take off - payback for the lack of effort that has been put in getting that organizational framework right. However, even with these inefficiencies these organization continue to survive and even grow. I believe one of the core reasons for this to happen is that once a company crosses a stage of growth, physics takes over. The huge size of such organizations allows them to keep going, on their own, without putting in too much effort. But then every once in a while a competitor comes from behind, whizzes past these slackers and forces them to think and act faster or risk oblivion. 

So what makes the right organizational framework? Well, the answer to this question is the same as any similar generic open ended question. It depends. The right organizational framework will be different for each company. There is no single universal right framework that works for everyone. There are however two principles that I believe should be built into all organizational frameworks: 1) be agile and 2) keep iterating. The reason I believe that these two principles should be part of every organizational framework is that the business environment is never stable and so no matter how smart you and your team are, you will never be able to pin the right organizational framework in one shot. By being agile and iterating, you will be building a learning process in your organizational DNA. There are problems in every company. The fact that there is a problem is not really an issue. The thing to consider is how your company is geared to handle those problems. Most of the enterprises are heavy, slow, inefficient and bureaucratic. Putting in place an organizational framework that allows company to be agile and learning will allow it to evolve with time and turn into a smart entity capable of producing successful products and services.

Wednesday, March 07, 2012

Startup Accelerators On Both Sides Of The Pond

4:29 AM Posted by Deepak Nayal No comments
I have been doing some research on technology startup accelerators / incubators for past couple of days now. While I wanted to research UK based accelerators particularly (because I live in London), I needed some benchmark and so evaluated the top two from US and one from Germany as well. 

While there are a number of resources on the internet that provide a somewhat similar database of information (startupfactories.eu is one such interesting initiative), you still need to research each one of these individually yourself. So I did, and then thought of sharing it with others so that they could save their time by directly exploring the relevant aspects. Almost all of the information below is from or points to the relevant sections from the websites of the respective accelerators. The accelerators I have covered in this blog are - 

Common Factors 

Anyone who has been following (or is aware of) startup accelerators knows that Y Combinator is the pioneer of this field. A couple of hours into my research you will also realize that most of the accelerators have adopted the framework laid down by YC, and so there are a lot of common factors amongst these institutions with [usually, only] minor differences. All of these startup accelerators - 
  • Are, unsurprisingly, software (particularly, web and mobile) focused 
  • Allow startups to focus on product development in the initial stages, while these help you out with support functions (such as admin and legal). Some also provide help (through their network or in-house skills) with marketing and designing. 
  • Encourage teams to apply. Individual founders have lesser chances of getting in and making through. 
  • Ask for small percent (less than 10) of equity. Hackfwd (Germany) is the only exception here. 
  • Ask for the same kinds of shares as the founders, with no special privileges.
  • Startups will need to move to the location of the accelerator to take full advantage of the program. 
  • Allow the startups to be run by the founders, and do not intervene in the day to day tasks. They do provide their suggestions to the founders, but again it is up to those founders to accept or follow them. 

Profiles

Before we explore each program, a disclaimer. This database of accelerators, or any other for that matter, is for reference only. For the most accurate information on any program, you will need to go through its website.

Y Combinator
The undisputed pioneer and leader of startup accelerators. Its network of people and successful startups sets is apart from all the others. Most of the other startup accelerators follow a modified version of YC's processes.
Location
Mountain View (USA)
Funding Cycle One from January through March and one from June through August.
Funding Amount Up to USD 20,000
Equity 2 to 10 percent
Type Of Investments / Previous Investments Typically, technology companies (web and software) in different areas (YC Ideas)
Application Process Sample Application - Dropbox
People Partners
  • Trevor Blackwell
  • Paul Buchheit
  • Paul Graham
  • Jessica Livingston
  • Robert Morris
  • Geoff Ralston
  • Harj Taggar
Techstars
The second most successful and respected startup accelerator. Techstars is increasingly considered in the same league as YC, thanks to its impressive and consistent performance over the years.
Location Boston, Boulder, New York, Seattle (USA)
Funding Cycle Separate batches throughout the year
  • Cloud (Winter)
  • Boston (Winter)
  • New York (Spring) 
  • Boulder (Summer)
  • Seattle (Fall)
Funding Amount Up to USD 18,000 in seed funding. Also offered a convertible debt of USD 100,000 from a group of prominent venture capital firms. Other perks are also included.
Equity approx. 6 percent
Type Of Investments / Previous Investments Typically, technology companies (web and software) in different areas. Pretty much same as YC.
Application ProcessFAQ provides a good overview of the process.
People Mentors
Seedcamp
One of the most respected accelerator programs in UK and Europe. Seedcamp has a very different approach of getting applicants via events held in multiple locations (usually in Europe).
Location Primary - London. Events held in multiple locations.
Funding Cycle Investment done in companies through Seedcamp events spread throughout the year. Here is the calendar for 2012.
Funding Amount EUR 50,000
Equity 8 – 10 percent
Type Of Investments / Previous Investments Same as YC and Techstars; typically, technology companies (web and software) in different areas. 
Here is the list of some of the companies Seedcamp has invested in.
Application Process
Application process explained on their website. 
Investments done using SeedSummit Termsheets.
People Seedcamp team consists of -
  • Reshma Sohoni 
  • Carlos Eduardo 
  • Espinal Philipp Moehring 
  • Kirsten Campbell
Startup Bootcamp
A multi-location startup accelerator.
Location Copenhagen, Dublin, Madrid and Amsterdam. To be started in London and Berlin as well.
Funding Cycle
Different dates for different locations.
Funding Amount EUR 17,000
Equity 8 percent
Type Of Investments / Previous Investments Same as YC and Techstars; typically, technology companies (web and software) in different areas. 
Here is the list of some of the companies Startup Bootcamp has invested in.
Application Process
Application process explained on their website. 
Here is a sample contract they have used for Amsterdam.
People
Springboard
A UK based startup accelerator with 13 weeks intensive program.
Location Cambridge and London (UK)
Funding Cycle
For Springboard London 2012, program commencing in early April
Funding Amount GBP 5,000 per founder (maximum of three)
Equity 6 percent
Type Of Investments / Previous Investments Same as others.
Application Process
You can get more information about Springboard and program from their website.
People Mentors 
Oxygen Accelerator
A UK based startup accelerator with 13 weeks full-time program.
Location Birmingham (UK)
Funding Cycle
Funding Amount Up to £20,000 (soft loan – no personal guarantee, no loan interest). £5,000 per founder (capped at £15k) plus up to £5,000 as a relocation allowance.
Equity 6 percent
Type Of Investments / Previous Investments Web startups.
Application Process
You can get more information about the program and FAQs from their website.
People Mentors 
HackFwd
A Germany based startup accelerator program.
Location Germany
Funding Cycle
Startups need to convince HackFwd referrers about your idea. Direct applications are not taken.
Funding Amount
  • Single founder – up to EUR 91,000 
  • Two founders – up to EUR 141,000
  • Three founders – up to EUR 191,000
Equity 27 percent for HackFwd
3 percent reserved to be given back to trusted advisors
Type Of Investments / Previous Investments B2C technology companies
Application Process
Overall process overview.
Cannot be applied into directly; need to go through a referrer and submit a Phase 2 Generator.
People Many people involved. Board consists of -
  • Jean Paul Schmetz 
  • Lars Hinrichs 
  • Marco Börries 
  • Michael Jackson 
  • Roman Stanek 
  • Stefan Richter

While there are a lot of other accelerators in US and UK (and Europe), the ones covered here are the ones that I have heard about the most. In case you know of any other good accelerators that should be added to this list, please do share their details in the comments section.