Thursday, July 6, 2017

Uber's Real Threat:

The NY Times did an interesting depth piece on the battle between Londons Black Cabs and Uber. Unlike other face-offs where the legal Taxis are a mostly entry level job for immigrants, London Cabbies are a true craft profession. In order to qualify, they have to study every route combination in a very complicated city for about 3 years. After passing a long series of grueling tests, they are said to have The Knowledge.  There is even evidence that acquiring this mapping information expands the brain.

Uber vs London's Black Cabs
Then, along come GPS and Uber and all that Knowledge plus the street hailing monopoly was upended. Moreover, the people who have the Knowledge tend to be white and local (growing up in the terroire gave them the obvious advantage) while Uber drivers tend to be foreign-born and brown.

The Times piece is mostly concerned with the xenophobia and racism of many of the Cabbies vs the struggle of the Uber immigrants and its relation to Brexit. While this is certainly an issue, I would like focus on the business story because it was mostly overlooked and there is clearly a worldwide lesson in this.

This is much more than a taxi tale……

(Note: in my student days I drove a London radio taxi known as a minicab - a fascinating experience that arguably gives me a unique perspective since I am now a Startup maven.)

Like most disruptor stories, there is a precedent but one that is only really understood in retrospect.

Ubers precedent is Londons Minicabs. Beginning in the 50s, renegade cabbies used postwar Motorola radios to skirt hailing laws with a dial-a-cab service.  This was controversial and initially, hounded by the law. Cabbies obviously hated them but, over time, coexisted. After all, Cabbies often refuse fares, favoring inner London and short rides over suburban trips since meter flips make the most money and they fear returning empty. They were even known to throw passengers out of their cabs for whatever reason they chose.

On the other hand, once established, minicabs, didnt evolve much either. Radios got better but they couldnt get the impulse or hailing passengers away from black cabs. Instead, individual drivers became notorious for blagging - illegally hustling for fares outside clubs, bars, bus stops etc. So, other than running ads with easy-to-remember phone no.s minicabs never figured out how to leverage cellphones as a hailing device.

Enter Travis Kallaneck – a techie and not a cabbie – who stumbled upon a giant opportunity in the marketplace. Result: worldwide disruption!

But there is clearly more to this than just a clever app. Eventually, the full story of his rise from organizer of struggling black cabs to the king of the gig economy will emerge. However, from the simple outlines of its story and my own experience of the tough world he conquered I can best compare him with a primitive military genius who developed a new weapon and then adapted in a ruthless way to confront a world of brutal competition: Shaka Zulu.

Taxis are all about owning territory and they are generally a monopoly backed by local authorities. There are many places where taxis engage in open turf warfare and that was before Uber. It is entirely possible that Kallanecks magic app had already existed in some other form, but whoever had it lacked his militant instincts.

Shaka Zulu was a renegade warrior who invented a new spear who went on to change the face of African warfare, creating one of the largest empires on the continent. The key is not just that he had a better weapon but that he understood how to change tactics, training, strategy, use a total war concept called uMfekane and even introduced a fundamentally sexist motivational system based on the accumulation of brides according to conquest. Despite this, he even had women war brigades.

What both Kallaneck and Shaka confronted was an established way of life and a protected class with entrenched rights. In London, the Cabbies happen to be the tribal royalty. In a very class-conscious country these Cockney Kings, unlike the landed gentry, actually earned their status and they let you know it. For this reason, minicabbers may have resented them but they also admired them – probably more so than the toffs.

However, like most entrenched thinking which includes landed gentry and professionals of all kinds, they rested on their privileges and felt free to ignore progress. They refused credit cards for the obvious advantages of earning pure cash and avoided radio or app-hailing devices. They also continued to pick and choose their fares.

Technology, on the other hand, is inherently attracted to the upending of these privileges. Just as Shaka figured out how to disarm his opponents, Kallaneck developed programs to disarm the authorities and the taxi industrys sense of protection. Shaka added a hook to his new shield, which enabled him whisk away his opponents protection, leaving a wide open target for his shorter stabbing spear.  

With Uber, it was the public that really sank in the spear because they got a much better deal from Kallaneck.

What the public realized - as they will with most protected groups – that they exist in opposition to the publics actual needs and the law was probably rigged by them for their own self-interest.


For this reason, protected groups of all kinds should study this for what it is. It is not just a story about a bunch of Luddite cabbies, but one of a well-qualified business group hiding behind a legally protected shield – only to find that, once lifted, however momentarily – it is really not supported by the public.

The true message here is, this is as likely to happen with doctors, lawyers, unions – even police – as it is with toll clerks, paper shufflers, middle managers, truck drivers and entrenched classes of any kind.

Their only protection is to rethink what jobs, knowledge and professions really are and innovate in line with the public interest.

The sad truth is, when stripped of their shields, most protected groups are revealed for what they are: a drag on competition and a barrier to progress. Or as Adam Smith once noted in The Wealth of Nations: People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.  

That was fine before globalization but increasingly, an absurd relic. By blocking progress, like taking credit cards or developing their own apps and refusing fares, Cabbies ensured the popular support for Uber – which now faces its own disruptors like Lyft and Via. Likewise, unions, doctors, lawyers and other professionals are increasingly competing on a world market where claiming a divine right merely forces the publics search for viable alternatives – now made easier by the Internet.

There will always be people willing to pay a premium for better service but forcing the acceptance of non-progress is just a racket doomed by technology and globalization. Trade groups need to get the message and swap their protectionism for innovation or they will find themselves marching along with the taxi drivers.

https://www.nytimes.com/2017/07/04/world/europe/london-uk-brexit-uber-taxi.html?hp=&_r=0

Saturday, June 10, 2017

Who Won in DC: Konnex

Thanks to all of you who came out to the last Startupalooza.

We appreciate meeting Entrepreneurs like you and exploring these amazing opportunities.

The Book: Are You Fundable?
To find out more about the way Investors think you can get our book Are You Fundable? on Amazon Amazon, Kindle or directly from our site areyoufundable.com.­


Next Events:

• Stamford - June 22  Register • Boston - June 26 Register• NYC - June 28 Register 


Results

Winner:

Konnex 


This app is makes it possible to remember people, your conversations and location and then add value to to your contact list.

Comment: While this is a unique addition to the LinkedIn economy, that has revenue, it could be knocked off by the big players. SO it all comes down to marketng and execution, which this team seems to have the passion for.


Patient is in 

Zaid Al-Timimi  zaid@TheMashupApp.com­ 202-503-9243 

Founded to reduce patient times for every person in the world, the Patient is in is a real time, HIPAA-compliant messaging app for Apple Watch and Siri  Endorsed by DC doctors  https://ThePatientIsI...­ zaid@PatientIsIn.com­

Comment: Promising real time patient managing system with some support from Apple. Valuation a little too rich, though.


Pet Connect 

Hector Ocasio 

We are a digital community that connects pet owners to pet-friendly people, products, and services.

Comment: A good mobile aggregation of services for pet lovers. Big market potential but competitive space and relies on sellingsmall pet dealers who can be hard to reach n numbers. Execution and momentum key.


TurtleShell


A peer-to-peer household item lending site.

Comment: While the timing may be right for a household effects “shared economy” solution, this may want a more descriptive name and a few good items that everyone wants to share and not really own,in order to really take off.

Friday, May 12, 2017

Q1: Stamford Winners

Fjord Weather     
Drew   Lambert  drewlambert02@gmail.com            203-249-6310
Waze for Marine Weather. 
Comment: A rare new company that has discovered a vast new market – accurate local boating weather. But execution before big players get interested is the key question given the new device requirements.

Pelletric     
Shem Lachhman         shem.lachhman@pelletric.com           516-728-2911 
Comment: A patented solution for continuous measuring of blood pressure in hospitals. Needs buy-in from institutions.

SEO SAAS
Comment: A scrappy start with a low cost SEO product “for the rest of us.” Still early in development..

Aquinas Training 
Hugh Seaton   hugh@aquinas.io        203-524-9539
Aquinas Training Makes Mobile & VR Software for Management Training. We solve the key failing of all training programs - retention. By sending mobile notifications, and tying these to compelling experiences, including our AquinasVR mobile virtual reality experience, companies can ensure employees retain and apply their training. 
Comment: While “Ed-Tech” has a narrow band of potential investors this improved pitch won some fans.

NewsFundr 
Michelle Carter           hello@newsfundr.com            9143159557
NewsFundr is platform for independent journalists which removes the influence of advertisers, editors and power brokers on the news. 
Comment: By dropping some big media names this pitch got some attention but needs to address the really big question – can it help big media companies make the news business profitable again?
  
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Boston Winners - April 2017

Grand Winner

VKTRY Gear        
Matt Arciuolo  matt@VKTRYgear.com           203-868-9280
VKTRY Gear manufactures and markets innovative Sports Tech that helps athletes run faster, jump higher and stay healthier. VK Performance Insoles are made from aerospace-grade carbon fiber from heel to toe. New independent test results show that VK Insoles increase athletic explosiveness by +9.6%
Comment: In a class of its own due to current funding a list of impressive sports team clients, this orthotic sole promises to add a new level of performance to athletes who use their feet. With great profit margins, income and an professional presentation they show great prospects. The only question is can its sell to everyone and what other products can it expand into?
Seed Startup Winner
Dan Greenberg       dgreenberg@mmres.com       7812400460
Solving healthcare challenges with machine learning on text in medical records.
Comment: As a seasoned player in machine learning, with the promise of extracting value out of mounds of boring data, Dan looked like a winner to our Investor judges.
 
MobileStrain          
Jasmine Mclamb        jmclamb@mobilestrain.com
MobileStrain is a mobile marketplace for medical marijuana patients. It's a web and mobile app that allows patients to view menus, place orders, make purchases and request delivery from local dispensaries.
Comment: Jasmine scored big in the QA when he responded to tough questions with steady aplomb. Her home delivery service for accredited medical users in a burgeoning new industry was eyecatching, but scale and competition are still two lurking questions.
Nomsly         
Christopher Buck    
Nomsly provides nutritious and delicious packed lunches for kids, ordered online and shipped directly to their homes.  By helping parents provide healthy and fun meals easily, we enable kids to build healthy eating habits for life.
Comment: Delivering healthy food to schoolbound kids looks like a great idea. The margins are good but scale and competition come to mind as did questions of whether there ought to a “Mom” in the business. Nevertheless, they presented well and showed adaptability. 
Ink'd Stores          
Jay Sapovits          jay@inkdstores.com   7742662391    
Ink'd is an apparel decorator leveraging new print technology in a high-end retail store to deepen client engagement and grow sales.
Comment: The no.1 asset in an easily copied business was the presenter, Jay. If he can bottle himself or find a “secret sauce” to set themselves apart, he has Investor fans.
Van Cor Threads LLC  
Dale Van Cor          dale@wavethread.com           603/239-4433
Creating Computer Aided 3D Parts for high resolution precision printing and ultra data compression for internet sales.
Comment: What could be more boring than bolt threads? Dale is the precision thread maestro in 3D printing and there is probably real money in a business that is all about need. He just needs a savvy business partner to help him unthread it…..
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B

Wednesday, March 15, 2017

Robots Eat Your Lunch? Not if You Dine WIth Them....as Your Slave!

Why The Robot Conversation is all Wrong!
The problem with discussions about AI and robots is they talk about replacing your current job. While that may be true, the real issue is what jobs they enable?

The future is not so much about improving the past - important as that is - as about discovering new possibilities since that's where the growth is. 

While robots sound scary and exotic, we actually do have a past era where we had robots - of a sort.

We can learn plenty about human behavior from that.

Robots Eat Your Lunch?

A lot of the talk is about robots eating our lunch and how we will need to offer a Guaranteed Minimum Wage to all these sorry people who will be displaced. The past however, tells us a different story.

While I agree that we need a safety net for the victims of disruption, I think the idea of giving people money for nothing is corrosive and self-destroying.

I think there is a better way. A much better way.

Enslave Them!
Oddly enough the idea comes from a book I read about the slave trade in Barbados where sugar, slavery and the first wave of "new money" came to England. In fact, you could say that sugar and slavery was the dotcom billionaire bonanza of 1644. There are schools, libraries and mansions in London and Oxford that come from this slave/sugar money.

The book I am referring to is Sugar in the Blood by Andrea Stuart, a stunning read! 

Roll Your Own Robot
The slavery model is more relevant than the industrialization specter because a coming generation of low-cost robots will be more affordable than industrial machinery in the same way slaves were in their time. Displaced workers should have the option to use that money to buy a robot or invest in robot workers, just as the early colonizers of Barbados were able to do with slaves.

(I also think we owe the desecendents of slaves, reparations - not a check necessarily, but something like a Marshall Plan for Africa and the Inner City. That is another story of course, and I am only stating this for the record so the PC mob doesn’t crucify me for using the abominable slave phenomenon as my guide.)

What makes the slave trade so interesting is that once upon a time, there were all kinds of slaves and mostly white. They generally came in the form of indentured workers and even then, the term itself derives from word, Slav. These workiers weren’t well treated but the demands of general work weren't that critical and so it was a faintly humane labor system. Barbados used these people, sometimes Irish or often the poor and criminal from Britain, as general laborers and tobacco workers.

Robots Are Nothing Until They Mean Money
It was only when the islands discovered sugar that slavery really took off and Africa became the biggest player in the system. Sugar was incredibly hard work and pale Europeans were completely unsuited for it. Sugar is also addictive in its way and the demand for it exploded woldwide.

Suddenly, there was a need for cane labor and within a few decades, hundreds of thousands of sorry Africans were abducted and brought to the tiny island of Barbados where they were generally worked to death within about 3 - 5 years.

Just as important, semi-civilized Brits quickly and seamlessly devolved into monsters who managed their slaves with terror and barbarous ruthlessness. The Nazis might actually have been kinder to the Jews than these landowners were to their slaves. This was tolerated for about 200 years because there was just no better way to make sugar. Even freed slaves who could afford it, were likely to own slaves!

Slave Geeks
There was even a kind of slaveowner geekiness - planters made it a point to have slaves do ever possible form of menial work for them - including dressing, washing and holding their chamber pots for them.

What matters with our robots however, is that, until you have a real need, predictions are just fluff that will disappear the moment a real need - and a market - appears.

So Last War
People who talk about robots eating our lunch and so on are really discussing the last war. It is like saying in 1899, that the automobile will make it easy for famers to get to church on Sunday and go shopping, when the real advance was mechanized farming with gas-driven engines.

Likewise, robots that displace drivers or mid-level clerks aren’t the real story. The real story is transportation experts using robots to do stuff they never dreamed of in the past. Instead of driving a taxi why not manage a fleet of 10 robot transporters. These will ferry people all day long to work and shopping. They will carry partygoers to their soirees and drunks back to their homes at night.

Similarly, clerks can let robots do their clerical work while their people skills are suddenly in higher demand.

Most of all, we are going to find higher level things to do once we populate our workplace with enslaved robots. We will burn them out. They will need programming, fixing and replacement - all human work.

The Displaced Know The True Value 
Most of all, they will be best managed and most usefully employed by people who actually know the business they were displaced from - only now, they can do more thanks to their high tech slaves.

So much of the "give people something for nothing" school underestimates the value and creativity of working people. They are not idiots, they will know what to do with robots - given the chance. Taking the socialist view of just giving away money just doesn’t tap this kind of human motivation.

Where, Oh Where Did The Digital Divide Go?
Think about it this way. Do you remember the so-called digital divide? That was when poor people just couldn't afford computers and that only rich people could enjoy its benefits. So what happened to it?

The Internet.

Once the Internet came along, supposedly poor people found computers. They made money online. The did stuff or got stuff for free. With increased demand, the price of computing dropped drastically and even wound being cheaper than TVs.

Now, imagine if society had given poor people money for NOT having computers. That would have been ridiculous and indeed most would have used the momey - if they didn’t squander it - on buying a computer anyway, justso they could take advantage of the internet.

The New Slavery
So the real question is not what to give displaced workers but what would they do if they owned a slave/robot?

I believe they would consume these robots just like their ancestors did with slaves and then invent new businesses that can harvest great uses from them.

Putting It To Work Now
If we were smart, we would begin the contest of ideas now - what would future workers do if they were their own slave?

That folks, is the real future of robots.


© Alan Brody, 2017














           


Monday, January 30, 2017

Winners from Boston January 2017

Our January event introduced us to some exciting new companies – and a conflict.

We had two top contenders but because one of them was connected with some of the judges we had to hold back and declare Ooomf the winner. So Special runner-up title for GreenSight Agronomics.

Winner:

Oomf Inc.

Gavin  Gray 617-797-0049    gavin@theoomf.com  
Enabling the sharing economy – one thing at a time.                                                                        
Comment: While the sharing economy is raging - from the likes of bikesharing and ridesharing, this software integrations system enables the safe sharing of anything starting with battery packs at campuses. Company shows positive revenue.

GreenSight Agronomics
James Peverill CEO  james@greensightag.com 339-237-1291
GreenSight is developing the second generation of commercial drone platform to help optimize water usage, pesticide, antifungal, and fertilizer treatments while maximize the performance of golf turf or crop.. We combine autonomy, advanced sensors, and data analytics to deliver land managers actionable alerts enabling them to make large reductions in water, pesticide, and fertilizer usage.   We are already the leader in turf remote sensing, saving golf courses over $1B annually by reducing their water consumption. Our system is also being adopted by top agricultural chemical companies to improve their data gathering during the $3B in field trials they perform to develop and certify new treatments.  
Comment: This revenue-producing company introduces a powerful new business angles for drones and agricultural management. Patent protection on the sensors.

The Dinner Daily, Inc  
Laurin  Mills    laurin@thedinnerdaily.com     978-501-3567
The Dinner Daily is changing the way busy families get dinner done by offering a simple solution that actually lowers grocery bills.  Our unique "menus based on your local grocery store specials" is now offered in 48 states across 36 major grocery chains.
Comment: A very useful app that allows shoppers to automatically build menus and buy the groceries according to the weekly deals.
                                                                                                                       
Perfectosoft
Maxim Reutov
We help merchants to optimize payment processing by providing a universal payment platform. We are Airbnb in payment processing – we connect payment providers worldwide to increase payment reliability, flexibility and to save on payment processing fees. We also connect tokenization providers, provide global wallet and offer simple 1 day integration.
Comment: This is a business plan that has grown significantly under the feedback from the Startupalooza investors.

Schwozny, Inc  
Joel Schwartz  joel@schwozny.com    617-719-5717
Schwozny provides services for data analytics and management for pharmaceutical companies outsourcing experimentation to multiple contract research organizations. Schwozny provides clients low cost access to powerful tools that will increase the information content to provide decision making data and ensure visibility with potential industrial partners. Schwozny will store, organize and analyze all your data.
Comment: While the name may not quite say it this is a potentially much-needed service for the rising biotech and healthcare development industry with a long, sticky customer revenue source.