Thursday, October 27, 2016

Will Snapchat's IPO Reinflate the Startup Bubble?

2016 has been a slow year for startup IPOs, but Snapchat has been in the news recently for their projected upcoming debut and the valuation it is expected to receive. At $25 billion, it would be more than Google's back in 2004.
I've previously written about the Startup Bubble and its deflation, but investors took it easy in 2016 and are itching to get back into the game.
Tech Insider: Chart of the Day
Obviously, inflation probably contributes a little (Google's IPO valuation in 2016 dollars would be about $29.4 billion) and Snapchat has become more than a simple messaging service made famous for the potentially scandalous, time-sensitive, disappearing messages it enables.
However, this still seems excessive for what has been a very conservative year in terms of startup valuations and a deflating of a perceived Startup Bubble. Yes, it is one of the few companies able to reach the younger (18-34) demographics; but, as Facebook knows, interest fades quickly, especially when their parents start to join.
Venture Capital firms and other investors have money in their pockets and are anxious to invest, so reinflation of the bubble seems like it only needs a small push to get going again. Fortunately, I think most tech investors are more disciplined and would not let it get out of hand, but I'm not so sure about the rest of the market/public.
One interesting aspect of Snapchat is its ability to monetize. Facebook took years to do so and, even at its IPO, told investors not to judge it on standard financial and earnings metrics. Google and other Silicon Valley giants are still struggling to find the secret formula to mobile ads and the dust still hasn't settled on what will consistently work.
So on one hand, it's a innovative, fast-moving company that has found a unique way to advertise. On the other, it's a messaging app that (for now) appeals to the ever-finicky preferences of the younger demographic.
A $25 billion IPO is significant and it's first-day open and closing prices will be interesting to watch and see how the rest of the industry and world view the company. Even more interesting will be how quickly Snapchat will continue to evolve and if it can have staying power over the next few years.
What are your thoughts on whether it will kickstart a new age of successful tech IPOs or initiate the new startup bubble?

Tuesday, October 18, 2016

Self-Driving Cars

Now in Pittsburgh, Uber's "self-driving" car!
I'm a huge fan of self-driving cars.
For those who know me well, this may seem counter-intuitive to my general belief in free will and independence, but I would give up the independence of driving myself to the promise of a safer, traffic-free future with consistently predictably travel times and the ability to utilize time currently spent driving.
I believe the automobile industry and the infrastructure supporting it are in for a massive change in the coming years.
Here are a few quick of my thoughts on the topic and I would love to hear yours in the comments section below.
1. Every year, thousands of people are injured or killed in automobile-related accidents. The majority of these are the result of operator-error and could be avoided if cars were more intelligent.
For example, Google's fleet of self-driving cars have been in relatively few accidents. However, almost all of the crashes were not the fault of the Google car, rather operator-error on behalf of the other cars (and people) involved.
Also, as CPG Grey explained, human nature works against us when driving and actually causes more traffic and build ups at the slightest stimulus.
The point I'm trying to make is that people are terrible drivers and automating that aspect of life would make things safer and less stressful for everyone.
2. Every car must stand alone with limited interconnectivity to other cars.
Early concepts for a self-driving utopia focused on a central computer that would monitor and control all the cars within its system. Obvious now, this is not viable option as the computing power necessary to do this would be immense and the hand-off between systems (whether it is towns, states, or countries) would be complicated.
The advances in machine intelligence have made it possible for each vehicle to independently have it's own "mind" and ability to think for itself, reacting much like each person does, but at a much higher rate with more logical decision-making.
There are several companies working on their own vehicles to solve this problem, the most notable being GoogleUberTesla, (potentially) Apple, and the numerous established car manufacturers who have either partnered together or with other tech companies.
It is still very early, but it will be interesting to see how these different strategies play out and if there will be a consolidation of platforms/software. If so, who will win?
3. While creating the next generation of cars with self-driving capabilities is important, there are a whole lot of cars on the road that we need to consider. This is why I believe the ability to update existing vehicles will be a major need as the industry moves forward.
This is why there is a growing interesting in the company Started by George Hotz, one of the first to jailbreak the iPhone, he has already hacked his own car and is creating a software package that will enable existing cars to be retrofitted with self-driving capabilities for $999.
Another player in this area is Mobileye, which was working with Tesla to power their Autopilot functionality. However, the two companies have since severed their partnership.
4. Despite the efficiency and safety that would be gained from a fully automated transportation system, I still believe in the ability for someone to disable the self-driving features.
This is not just as a precaution to the robot/AI revolution, but to guarantee the right of free will and not allow any one person, corporation, or government to be able to dictate where you are able to travel to and from. Not that I expect it to happen but, for a simplified example: imagine your Apple-controlled car blocking you from traveling to a Microsoft store, or a Google-car requiring you to log all your travel for better targeted ads.

There is a considerable way to go before we have a system that is 100% automated, if we get there at all, but with every advancement in technology, it is good to keep in mind the unintended consequences that may result.
Any other thoughts on the future of self-driving vehicles or consequences of it?

Friday, October 7, 2016

Doing Business in Europe: Google vs. Microsoft

A couple of interesting stories came out on Monday that I thought highlighted two different strategies companies may take when doing business in Europe. They show a wizened Microsoft deftly navigating the European market, meanwhile Google is the juvenile pup still pushing to find its limits.
First was a Reuters article that reiterated the EU's antitrust ruling against Google for pre-installing software (Google Search and Chrome browser) on its Android operating system.
Alphabet's Google has been given until the end of October, the fourth extension, to rebut EU antitrust charges that it uses its dominant Android mobile operating system to block competitors, the European Commission said on Monday.
The Commission in April said the U.S. technology giant's demand that mobile phone makers pre-install Google Search and the Google Chrome browser on their smartphones to access other Google apps harms consumers and competition.
Oddly enough, the same justification was used against Microsoft and their practice of installing the Explorer browser on all Windows machines in both the EU and the United States.
Which brings me to the other article which detailed Microsoft's $3 billion investment in Europe to promote its cloud services.
Microsoft Corp. has spent more than $3 billion building up its cloud infrastructure in Europe, including $1 billion in the past year, part of Chief Executive Officer Satya Nadella’s push to win customers over rivals such as Inc. and Google.
Next year the software maker will open data centers in France as the company continues its investment, Nadella said in an interview Sunday. Microsoft already has more than doubled its computing capacity to deliver Internet-based services in the region, including a network of centers in various European countries to address laws and preferences for keeping data stored locally.
I wanted to highlight these two cases because I think it is amusing that Google is running into the same fundamental problems Microsoft did, but is not learning from their mistakes. As was the case when Microsoft was at its height and 90% of the PC market was Windows, Google expects to leverage the popularity of its Android operating system and muscle its way through. Conversely, having learned its lesson, Microsoft is now localizing its business to appease the EU and play by its rules.
I generally do not agree with the EU's overzealous antitrust crusading but, as I believe companies should be allowed to install programs of their choice on their products, the EU is free to govern as they wish. Regardless of your opinion, the fact is that companies doing business in the Eurozone must comply with their laws.
However, as Microsoft is proving, this can be mutually beneficial for both parties. The EU gets compliance with its laws and grows its local economies. Microsoft gets to develop its business and, I'm sure, receives some preferential treatment or tax credits.

Thursday, October 6, 2016

IoT Toys (Part 2)

Continuing from my first IoT Toys post, here are a few more products I've been playing around with:

amazonechoAmazon Echo

I have an Amazon Echo and Echo Dot and enjoy them both. I use the Echo more often because it's placed in my bedroom and I use it to check the weather and news in the morning. The Dot is connected to my living room A/V receiver, so I primarily use it to play music or adjust the thermostat when I'm too lazy to walk to my Nest or open the app. (Ah, the joys and sloth of modern convenience!)
As I indicated, in addition to being a voice-activated question-and-answer (like Siri or Google), the most interesting part about Echo is the fact that Amazon has built an IoT platform around it. I can control my Nest thermostat by talking to my Echo and you can also connect it to a host of other devices (partial list here).
Industry/Company Thoughts:
Part 1 introduced Google's upcoming competitor to Echo, so Amazon will have to keep innovating quickly and form more partnerships (or buy the companies) to further integrate users into their ecosystem and create more value for theirs instead of Google's, or even Apple's.
This will be difficult because both Google and Apple customers have significant brand loyalty and switching costs due to their smartphone dominance. However, Amazon has established itself with its Prime membership, integrating Amazon Music, Videos, and several other services to its platform. Also, because Amazon is more of a third party to the smartphone wars, it isn't as mutually exclusive to be a user as it is for Google vs. Apple.
What could really set Amazon ahead of Google and Apple in the IoT space would be for easy integration and tools for their Amazon Web Services (AWS) customers. The proliferation of connect devices will continue to increase exponentially over the next decade (Cisco estimates there will be 50 billion devices by 2020, approximately 6.6 devices per person), so it will be critical for any company providing enterprise infrastructure to easily integrate their products.
I loved Amazon's strategy introducing Echo. They simply introduced the product and responded to consumers on quantity and features; then they quickly followed up on Echo's success by introducing the Tap and Dot. (Interestingly, the Tap is no longer listed in the "Echo Family" and is now on sale. It was not a very compelling product, as it is not hands free, so I assume this is due to low demand and the first steps to phasing it out).
Being the first significant platform in the IoT/Connected Home space gives Amazon a significant head start, but Google and Apple have plans to enter in the near future. It will need to continuing leveraging its strong foothold to fend off competition, but it is in a very good position. Amazon is already a mainstay in people's homes (for both Echo and, of course, ecommerce) and I've yet to meet anyone who doesn't use Amazon to buy something. Google has a history of hardware flops, but its advantages in software and machine learning should make things interesting. Apple is on the decline in the home; I hear fewer and fewer instances of Siri being used and I'm not sure how many new customers it attracts for Apple TV. More than the sales of each new iPhone, I believe its voice-activated concierge will play a significant role in the future success (or decline) of the company.


I recently bought an Automatic and have been playing around with it for the past few months. You plug the device into the diagnostic port in your car and it tracks and summarizes a number of different driving metrics and gives you a score to encourage more fuel efficient driving habits.
For example, it will beep at you when you brake or accelerate too aggressively or drive over 70 miles per hour (a preset limit determined by the company) and provides a "dashboard" that summarizes and visualizes this data for you.
Automatic Dashboard. Sample from
I actually haven't adjusted my driving that much based on Automatic's input, nor am I overly concerned with my score, but I can see the value of those features. New drivers, in particular, could benefit from using it.
As it is tied in to the car's diagnostic port, another benefit of Automatic is that it can decipher error codes from your car. So rather than having to bring it to the shop every time a warning light flashes, you can more easily determine what's wrong and decide on what corrective action you want to take before they try to gouge you. Also, if it senses that you have been in a crash, it will automatically message whoever you set as your emergency contact(s).
In general, the product itself isn't too useful for everyday driving, but the data it gathers is interesting to look at and analyze. It's probably too much information for the average driver but, for stat geeks and the curious, tracking things like: battery charge/discharge history, driving habits compared to others, and seeing your entire driving history mapped out are really cool.
Industry/Company Thoughts:
I'm not sure what is next for Automatic, but if management is smart they're already planning long-term strategy. The company just released a 3G-connected version (the older model required a smartphone to sync data), but I hope that's not the end of development and they are coming out with additional products soon.
I agree with John Zimmer (Lyft) and Elon Musk (Tesla) that single-owner car ownership is fading quickly, so I don't think the current product line will sustain Automatic in the long-term. However, tracking metrics for shared vehicles could be useful and, in general, the more data that is collected the better to make good decisions. Perhaps Automatic could transform into a sensors and metrics analysis company targeting the automotive industry.

bluesmartBluesmart One

Bluesmart is one of the big success stories to come out of crowdfunding. The founders raised over $2.2 million on indiegogo back in 2014 and have actually delivered products to all their backers.
I was one of the many (over 10,000) backers and received my suitcase last year. I've taken it on a few trips and, in general, like the product. However, there are many things to improve upon and hopefully those changes will make it into the next version.
The Good: The feature I probably use the most is the internal battery which has two USB ports to charge your electronics and powers the suitcase itself. Not having to scrounge or fight for outlets when you're running low on power is a huge plus, especially on multi-leg trips with long layovers. product_slider_6_2x
Another part about the suitcase that I love is the outside pocket that can hold your phone, tablet, and laptop, and has enough room for several other quick access items. When the suitcase is unlocked, you access the pocket by lifting the top flap and peel it away. The flap is magnetic and will automatically close and seal itself back up so all your things will not be out in the open.
The Average: The company touts several other features that seem cool, but aren't all that useful in practice all of which are controlled by a smartphone app (which is mediocre in itself, but has improved since launch). These features are: GPS/location tracking, built-in scale, and remote locking.
As this is meant to be a carry-on, the location tracking and remote locking features aren't that useful unless someone steals your luggage or you simply forget it somewhere. On the plus side, if you enable the feature, you can have the bag automatically lock when it goes out of range of your bluetooth signal; but again, this is mostly useful if it is stolen.
Even if you were thinking about checking it, I would be hesitant to do so as I'm not sure how well it would fare being tossed around; and if you're buying one at full price, $449 (or $599 for the "Black Edition") is an expensive gamble.
The scale is a nice feature and is preferable to the weigh-yourself-then-weigh-yourself-carrying-you-bag method, but the bag is pretty small and with the electronics, it has even less volume for you things, which brings us to...
The Bad: As I was leading to above, the space inside the suitcase is pretty small. There should be enough room for most weekend trips, but would not be sufficient for anything longer. I will say, if you're not opposed to checking a bag, this is fine because you can pack enough in the Bluesmart for a couple days if you lose your checked luggage.
Industry/Company Thoughts:
Overall, Bluesmart made a great first pass at making "smart" luggage and showed there is a demand for it. However, the company will need to capitalize on what it has learned from the One and create its next product. The "Black Edition" improved the durability of the body and wheels, but that does little to further the electronic technologies.
With its existing technologies in mind, I think Bluesmart could produce a fantastic larger bag that is meant to be checked when flying. The scale, lock, and location tracker are all features I want in my larger bags. There may be a small concern if they use lithium-ion batteries ("hoverboards" and the Samsung Note 7 have show the dangers of poorly made ones), but I doubt it would give them much trouble.
It is still a time of trial-and-error (or "fail fast" is the favorite buzzword now) for the industry, so companies and customers are trying to find which products and what features they value most. I really enjoy having more data on all of my possessions, so the development of the IoT industry and the prospect of connecting more devices together is exciting to me.
Hopefully devices don't get too smart.

Monday, October 3, 2016

IoT Toys (Part 1)

I figured my first "real" post would be a bit lighter and more fun, before diving more deeply, so I wanted to start with one of my favorite fast-growing industries and one that I believe will have profound, lasting effect on the way we live.
The Internet of Things (IoT) is a broad category for the network of devices that are "connected" to the internet. IoT is closely associated with and populated by "smart" devices. I put both in quotations, because some devices are not directly connected to the web, nor are they smart on their own. Many rely on a connection to a smartphone (Bluetooth or other) to upload and process incoming data.
As someone who prefers to be an early-adopter, I try to obtain and have hands-on experience with IoT devices when I can.
Here are a few of the devices I own and my thoughts on the companies that produce them:
(Split into two posts, so they would not be too long).

6cb797ae-c570-4718-83f5-fdd6575613ec_1-459ca8fb52cfa59b609324aaadc20602Fitbit Charge HR

Fitbit is probably the most prolific smart device company with over 29 million units sold (as of January 2016 and millions more sold since then).
Because the industry is still developing, wearables are generally little more than worn sensors with little analysis or extrapolation of that data. Fitbit does calculate distance and calories burned off of the number of steps taken and your physical measurements, but its more of an estimation than personalized algorithm.
That said, I continue to wear mine simply because I enjoy tracking my personal metrics and the heart rate monitor is a good first indicator of overall health. I doubt that Fitbit has created the perfect formula for activity trackers, many people agree as can be seen by their recently falling stock price, but I think they are improving and helping to advance the industry.
Industry/Company Thoughts:
The arrival of mainstream wearable technology has been predicted for years (how long ago did we see Alan Alda play with the "wearable computer" on Scientific American?), but it's yet to truly mature and hit the mainstream. I doubt that the future is just activity trackers and the first company to find the best utility for users will make it big.
Fitbit needs to continue to evolve their products and experiment with features to see what consumers really value and want in their products. If it fails to do so and relies on their existing products, business will stagnate and I doubt the company will exist on its own in two years.


Nest Thermostat

I've had my Nest for several years and I love it.
Remote access and not having to remember to turn down my thermostat when I leave are probably the biggest benefits, but it also "learns" your preferences and adjusts accordingly.
For example, in the summer I like to cool the bedroom down before going to bed. Nest has learned this behavior and turns the temperature down around my bedtime each weeknight (weekends my schedule is more varied so there is less of a discernible pattern).
In addition to the Thermostat, Nest sells a Smoke + CO Alarm, Indoor camera, and, recently released, Outdoor camera. While I really enjoy having my Nest Thermostat, my thoughts on the rest of the company and its products are less optimistic.
The Smoke + CO Alarm ($99) is overpriced for its utility, as are the two cameras ($199), particularly because you have to pay a yearly fee if you want recorded video service (minimum $100/year for 10 days of video).
Industry/Company Thoughts:
Nest purchased Dropcam to obtain its camera product-line in 2014. It sold them branded as Dropcam until recently and just released the outdoor camera this year. The fact that it took so long to rebrand is confusing and should have been a quick and easy change.
There have been rumblings that Nest is being mismanaged by its executives and Google (purchased for $3.2 billion in early 2014) and the company is not doing well financially. This is disappointing to me because I have followed Nest closely from the start and thought it showed much promise.
I wrote a paper back in 2014 about the state of Nest and what I thought it needed to do to succeed. The focal point of my suggestion was to establish Nest as the platform for an IoT household. I believe it tried to do this through the "Works With Nest" program, in which it partnered with various other IoT companies to expand Nest functionality, and its purchase of Revolv, but integration and execution was underwhelming and recently shutdown Revolv.
Nest missed out on a huge opportunity that is being realized by Amazon and its line of Echo products. (Which I will cover in my next post!) Maybe it's just Google's hardware curse but, as I pointed out, management seems to be a part of the problem and that generally indicates poor strategy/roll-out.
Parent company Google has plans for an Echo competitor, Google Home. Hopefully this will establish a strong foothold in the IoT space for Google and, indirectly, refocus attention to Nest and its products. Currently, Amazon has a significant lead as the first mover and it looks like Home will be more limited in its integration than Echo, but I expect that list will grow. Also, Google's excellent machine-learning, software expertise, and omnipresence in all things tech (imagine full integration with your Google account and devices) should be enough to make Home a solid product and competitor to Echo.
As I mentioned, the Thermostat is a great product that I love, but Nest's other products are not as appealing. Unfortunately, it appears Nest's future lies in the hands of Google and its line of complementary products as Nest is not yet self-sustaining and its current trajectory looks shaky.

Thoughts on any of the products/companies I mentioned or IoT in general?
Stay tuned for Part 2!