How Do I Know If An Investor Has Money To Invest?

So I’ll be honest– I was reading my fellow entrepenuer Doug Richard’s blog and posted a reply (which in my typical verbose fashion turned out almost being an entire post in itself). Being a frugal chap, I thought I’d update my neglected blog AND point you back in the direction of Dougs blog and his School for Startups (not to be confused with Startup School in the U.S, run by Paul & his wife who also founded Y-Combinator)

This is an important question for entreprenuers raising their first round of Angel or VC funding:

Does the white-winged messenger from the gods you’re courting for investment with your fabulous new Google-killing start-up, actually have any money to invest?

“Fallen Angel” (Photo Credit: Raquel Giffard)

After reading Dougs post, I felt one thing had been overlooked: Ask the Angel.

I’d recommend the entrepreneur look the angel in the eye, preferably during the first 10 minutes of a meeting and simply as the question “Do you have the money available to invest at the moment?” Any entrepreneur who is going to last the distance in business is going to need to be able to follow their gut as to when someone is telling the truth or telling porky pies.

I’ve found it is surprising how few people ask direct questions, out right, in person, to their face. It often reveals either a more candid answer that you might expect, or atleast you garner the answer indirectly from their reaction.

Few angels like to be seen as “not investing”. They want to keep their finger on the pulse- and there is often that sense of not ‘wanting to miss the next big thing’. Many I know will justify this by arguing that they could always make another asset liquid if they really had to, to take advantage of an opportunity (i.e. for those newbie’s reading- by selling a house, land, stock from another company to have cash available to invest) but I’d argue that this rarely happens in order to invest in a start-up.

So called “Angel Networks” are notorious for being full of timewasters, who use them as much as a club and enjoy the notion of being an investor, while rarely investing or indeed not having the capital to do so. That is not to say ALL Angel Networks are bad; some are OK but approach with serious caution. Personally, I’d also avoid any which charge upfront fees.

In summary, IMHO it is best to ask direct question up front, at the start. It is not rude. It’s demonstrating practical business sense – and an ability to be candid and pull no punches.

Lastly, all this applies in spades and more to VCs. For the uninitiated, make sure you ask them a boat load of questions. What is their fund size? When did it close? How much do they have left? What was the last investment they did? What size was it? When was the last time they did an investment the size of yours and in a comparable sector? So, Angels are not the only investors who like to appear to have money to invest, when they dont…

Quickfire overview:

• Whether VC or Angel, ask out right if they are investing
• Ask about specific last investment – inc. size and type of deal
• Have conversations face to face and follow your gut instinct as to whether they are wasting your time
• Ask to speak to the last entreprenuer they invested in
• Don’t be afraid to ask other VCs or investors – the Angel or VC may found out, but it just means you’re doing your due diligence
• Check www.thefunded.com for feedback about VCs. Some of it is just bitter talk from rejected applications- but mostly its good stuff.
• Don’t take any money at any cost – the devil is usually in the detail

Lastly, re-read Dougs post as everything he says is bang on: there is nothing better than to get free advice from a seasoned Angel investor, but be clear about your own goals and beliefs- no one wants to invest their money in a CEO who is a push over. Equally, not a CEO who won’t listen or cant change position given good reason. Make sure you’ve got that balance right.

Qik Mobile App Install: A Example of Best Practise

I rarely feel compelled to write a blog post because an install process for a web or mobile app is so good, but Qik has triggered just that compulsion. Qik allows you to easily record or live stream video from your mobile phone. The list of supported phones is growing fast; and you can expect the rate of engagement to explode once the iPhone 3GS is cleared for takeoff with Qik (currently you have to jail break your phone to get it working).

The point of this post though was to highlight the process they use to install onto your phone. In brief, you have the choice of being sent an SMS (supporting multiple countries), downloading it and then installing it via your PC (or “side loading” as the industry calls it), or visiting a WAP site (a mobile website) to download from a link.

However, the important bit comes once the install process starts on the phone. I click to receive the SMS, received it immediately; I think clicked the link in the SMS, it started downloading to my phone, but crucially, updated the page automatically to tick the box that install had begun, it then confirmed when install/download had completed and then when I had fired up the app.

Qik have an excellent mobile app install process from their website, closing the loop between PC and mobile & ensuring users complete the install there and then

This might seem simple but it is VERY rare this process is used; normally the site just sends you an SMS and you go on your merry way.  Closing this loop, provided you can guarantee speedy delivery of the SMS, encourages if not subtly forces the user to install the app there and then and to log in – making them feel comfortable and hand-held in the process to confirm that things are happening as they should.

A clever and slick way to help users get your mobile app onto a users handset.  When we have resource to make improvements to the Rummble website, my start-up which takes the vast majority of my attentions these days, we’ll be following this user experience as its one of the best I’ve seen yet. Well done Qik!

Peer Recommendation Is In Fashion, But There’s A Problem

With another article in last weekends Telegraph, with the Head of Bebo saying that peer recommendation is the way forward and the future no less of Social Networks, I can afford to feel very slightly smug that I’ve been barking up the right tree for the last 3 years, or more. Ms Burns says “I know and understand the power of search. However, social recommendations are the future…”

Kate Burns, Bebo Chief says peer recommendations are the future of social networking

My smugness should be short-lived however, as there are still two problems:

Firstly, institutional investors in Europe as yet seem unconvinced that now is the right time to invest in trust network technology or indeed associated consumer facing recommendation service optmised for mobile (Rummble has had lots of interest from VCs but thus far they’re yet to invest).  Business Angels have been very receptive, but the European VCs, in summary feel it is too early. We may yet move across the pond, to the sunny climbs of Silicon Valley, as a consequence.

Secondly and far more importantly, people (even the mainstream media, as the Telegraph article attests) are all talking about “peer recommendation” but forgetting a very important, indeed vital, factor: Trust.

There are a few problems with recommendations from your friends (i.e. your peers). Firstly, I have some fantastic friends whom I love dearly but with whom I do not share the same taste or opinions. That’s not a problem if I want to know from their newsfeed that they’ve gone on holiday, but it’s not so useful if I am recommended the Reiters Supreme Hotel they chose, in Austria, when I don’t golf and hate package holidays.  Secondly, even if ALL my 417 friends on Facebook, the 1400 contacts in my address book and the 500+ contacts on LinkedIn, ALL rated/recommended every place they went, there would still be 100’s of places in the world with no recommendations from them (and that is before you consider that they’d need to all use the same service or services between which recommendations were shared or collated).

While this does unquestionably serve to promote Rummbles trust platform technology as the answer to these problems, it is also the genuine flaw of peer recommendation services such as Geodilic and Whrrl, and of those services that blindly aggregate all data from your streams (e.g. FreindFeed).

Rummble Trust Network technology is not simply a social network, because it connects & infers trust (or lack of) between you and friends but also you and strangers

I am not saying the mentioned services are bad, I am saying simply that the focus needs to shift toward filtering information in a more intelligent way – reducing the noise.

Two of the Rummble team took 10 days out to build an experiment as a tentative step to help make sense of the burgeoning stream of data produced from Twitter; in reality the stream could have been from any social software. Tremors attempts to match Tweets with the venues they are from or referring to, to create a realtime feed of activity in venues across four major cities: London, New York and Austin Texas, with San Francisco to follow shortly.

Tremors is an experiment powered by Rummble

In this very basic first version, you can see what is going on at different venues in the city and it attempts to recognise some basic sentiment about the text. The next step, if we were to invest time in improving the accuracy, is that we could interpret the content as a recommendation (or otherwise) and ally this with content within the Rummble recommendation service.

Ultimately, we’ll be able to construct a trust network between users on Twitter whom may not even know each other, but share similar tastes or opinons, based upon an existing user behaviour. For now, it remains a fun experiment until we can resource improvements. You can read more about Tremors in the Tremors launch blog post.

Kate Burns of Bebo is probably right. Unsurprisingly, technology will evolve to build on and exaggerate existing human behaviour. We cherish personal recommendations because we usually have a basis on which to embrace or reject that recommendation. With social networks, I don’t always know how or whether to trust an acquaintance or a friend who may be outside of my core circle of trust, or whom I may respect but whom I may not know well enough to know if we share the same taste in restaurants or music.

In 2006 I presented a slide deck about “trust networking” and nobody seemed to understand what I was waffling on about; in 2009 I’ve presented a very similar a decks including trust networking and I often get nods of agreement and sometimes even yelps of excitement (see what I did there?

Our lives are built on trust and understanding (or lack thereof). Lets hope the Internet of the future is built on the trust and understanding part, not blind recommendations and lack of understanding.

Remember, “its about the data, stupid!”

Separated at Birth: Bob Bailey & Robocop

More Friday fun. In the second of my intermittent series of dopplegangers, both famous and not…

Bob Bailey (the U.S. national soccer teams manager) is actually Alex J Murphy (aka Robocop)

Robocop and Bob Bailey

Separated at Birth: Richard Hammond & Jimmy Saville

I seem to spend my life spotting people who look like other people. So I’ve given in and will now publish sporadic Separated at Birth posts, in homage to Private Eye, the section which shares the same name I always enjoyed during childhood.

Number 1 – Richard Hammond is turning into Jimmy Saville

Jimmy Saville / Richard Hammond (TopGear)

Latitude: Googles Trojan Horse (or Why “Who’s Nearby?” Is Not A Business)

This post was published on Friday 6th February 2009 as a guest post on Mobile Industry Review

For the last 3 years now I’ve been crowing at conferences that “Who’s nearby” is not a business. I drew this conclusion from running playtxt, Europes first location-based mobile social network.

It started in 2002 and we had an Alpha launch in 2003. It was ridiculously early to market. Back in 2002 most normal people (i.e. those for whom a “tweet” today is still something only birds do) did not know what a social network was, let alone a mobile location-based social network. Thanks to MySpace, Facebook and the inevitable march of technology, even my own mother is now aware of social networking, SMS and GPS.

By 2005 Google had bought our main competitor Dodgeball and although the mobile operators were still charging for Cell ID lookups (ludicrously, they are STILL trying to!) I already believed it was only a matter of time before location became a commodity. It would too easy to do for start-ups to do and even easier for others such as Facebook, which was on its ascent.

I decided that “who’s nearby?” was never going to create a multi-million pound business and I made three predictions, some which are still relevant today:

• GPS will be in every phone as cameras were then becoming. (GPS chipsets are extremely cheap, power consumption is becoming lower, processing power higher and Galileo is on the horizon -literally, haha).
• One of the gorillas (Google, Yahoo et al) will release a free Cell ID/Location API. (Google have and its excellent).
• “Who’s nearby” will also become a commodity

For the last 2 years I’ve been telling any start-up which is building its own Cell ID database, that it must be mad. I see no business model. Google about as likely to charge for Cell ID lookup as it is for its maps API; and that likelihood is slim.

There was (and is) money to be made with tracking and Cell ID technology, but both industries begin with “S” and neither spell the world “Social”. Instead, it is Security (child tracking, staff tracking) and of course Sex (proximity dating, adult services); infact any vertical where a premium can be demanded – we know that fear and shagging both command strong emotions which can result in a buying decision. Wondering “Where are my friends?” does not; unless of course you’re intensely paranoid or have VERY accommodating friends.

There is no mobile internet: there is only the internet.

This has been my other crusade for the last 2 years; and this is probably what Google believes too. What I mean is, that fix-line world-wide-web access is the black & white TV of the internet. Amazing in itself, but without the full functionality of what we recognise as “television” today.

Location, portability and the need for personalisation (a mobile being such a small, personal device) are the three missing dwarfs which give us our Seven Dwarfs of the modern internet. (The first four were IMHO: the web browser as user interface, freedom to publish without government or minority corporate control, always-on fixed cost access, and broadband bandwidth; Snow White being the internet itself).

So in the near future (3-5years?) no one will talk of the “mobile” internet but simply, the internet. You will have an iphonesque device (in size & looks if not in O/S which you take home and plug into your 24 inch screen and keyboard …we’ve still a decade to go before we type goodbye to Mr Qwerty and say hello to HAL.

Be under no delusion, Latitude is Googles Trojan horse into the social networking space.

After Googles purchase of Dodgeball it was clear they had every intention to roll out a service such as Latitude and they are perfectly positioned to do so.

Almost by-passing online social networking entirely (aside from Orkut which only took hold in Brazil) I believe Google will pursue a wide-reaching mobile social play. Google will build up a critical mass of users on Latitude; and they will join because:

• It is Google (so its trustworthy; yes still)
• Its easy to use – simple UI and simple privacy model: Automatic, Manual or Hide your location (or as I prefer: Honest, Lie or Paranoia)
• It has reach (27 countries at launch, lots of handsets, no GPS required)
• Its free

They will then likely launch an API (in the process solving some of the standardisation and interconnectivity problems – possibly using the new OAuth hybrid or equivalent) but also roll out other functionality enhancements. Although the latter may take longer than you think.

Latitude has lots wrong with it too e.g. Gmail import only (where is XFN Social Graph import or device address book comparison?) status update is crying out for Twitter integration and a hook into FireEagle (with which Latitude does not compete, yet) would all be very welcome (the last two are unlikely for political reasons but would be a fantastic nod to the open ecosystem) and dont forget part of Latitudes beauty is its simplicity; and Google have time on their side.

Many of us have been waiting for location-based services to come of age for YEARS! but in reality we’re still in the early adopter curve. Infact, I’d go even further than that. At BeingDigital in 2008 I stated on stage to a deluge of ridicule, that Social Networking wasn’t yet main stream. The laughing continued until I asked how many parents AND siblings of delegates had email? The answer was predictable: virtually everyone. Then I asked how many parents and siblings were also on a social network; over 75% of the hands dropped.

150 million people on Facebook is a lot, but 3.2 billion people have mobile phones: that’s a lot more. Email is mainstream, social networking is still maturing. Eventually it will of course become part of everything we do “online” rather than be a destination, with your social graph becoming portable and also actually owned by you, not FaceSpace.

So what does this all mean?

1) Location is already commodity AND your friends location will become a commodity.

Any service will be able to plug in and use this data (with the right permissions). Its already happening – checkout Yahoo’s FireEagle which is an aggregator of location between services.

2) If you’re a start-up building LBS, Cell ID, friends nearby services, or anything else which is being commoditised as we speak, see above.

Loopt; west coast startup run by a bright 24 year old entrepreneur – nice guy, flawed business plan. $13million+ in funding, nudging just 1 million users after 3 years with low engagement metrics. Differentiator? There isn’t one. Case closed, game over.

3) If you’re running anything with the words “mobile social network” in the title, lock yourself in a room with your team and work out how you’re going to save your business.

That means innovate. Mobile is not a differentiator, its an inevitability.

At Le Web 07 I met with Christian Wiklund, Founder of Skout. He had built a cool location based mobile social network (LoMoSoSo anyone?). By Q1 2008 when I met him in San Francisco, he’d already realised that competition was fierce and the concept was flawed — and that was before the gorillas had waded in. I implored him to change strategy (something which infact he’d already started doing). He chose dating. It’s a smart move. Dating generates money—and lots of it. Proximity dating, or infact “mobile dating” in general has never been done really well (even Mr Arrington agrees).

As a LBS start-up, you need to think about adding distinctive value for users; differentiating on location is an oxymoron. I know some of you are making money, some of the pure play mobile social networks are even profitable – great. But there’s an iceberg ahead and it may be bigger than it looks: just ask Captain Edward John Smith.

The future is relevance; the context of not only where I am but what I’m doing, who I am, where I will be. In summary: It’s about the data, stupid.

..and that will be what I write about in my next post; if they’ll have me back!

Nowegian Air mobile phone check-in. All airlines should be made this way.

Was pleasantly surprised to check my Norwegian air tickets and login only to find this (see below). Lufthansa also has an efficient mobile login option. BA, Virgin, Easyjet, are you listening?

There is no excuse for not doing this these days, its ridiculously easy.

More Insane Government Internet Security Proposals

I’m not getting enough time to write my blog at the moment (read: I’m choosing to prioritise running Rummble!) but this is too important not to reblog.

Grab a coffee (or green tea, whichever works for you) and read Mike Butchers important post about digital privacy and the march of yet another stupid government agenda on trying to control / mine the internet under the guise of national security, child protection and a raft of other flawed arguments.

I’m not an alarmist nor a conspiracy theorist; I dont beleive the “powers that be” do actually want to control everything or that MI5 or 6 really has an agenda to turn our state into an imiation of 1984. Infact I beleive the sentiment is good – people trying to do the right thing; but they dont understand.

Not only are many of these plans unfeasibly costly and unworkable in practise, but the fact is the technology and the “internet” itself as ever evolving global animal, will always out run the most ardent beleivers who think that you can put a big ear to the pipes of the internet, listen for everything, store everything and then simply do a search to check out every communication this country spews (Viagra spam and all) to find out where the next 9/11 equivilent will be sprung.

Anyone sending information that important, could if they wanted subvert the system in a vast number of ways, not to mention the plethora of services and social platforms which dont even involve an email, telephone call, or SMS. Its not only niave but ill-conceived and a vast waste of tax-payers money, IMHO – and that is before we open the case for the defense of Civil Liberties.

FireEagle releases beta access to their “Friends on Fire” for Facebook app

Not a new way to inflict pain on your best mates, but yet another entrant into the already fraught and busy “who’s nearby” space. I’ve pontificated often about how this is no basis for a business, but with Tom and his gang at FireEagle it makes perfect sense as aggregation of location is their business.

I’m unconvinced of the UI they’ve built for this iteration – but who are we to talk when our Web UI still needs it new upgrade rolled out   and essentially this is a technology beta, so I’ve on doubt they will do some polishing.

The biggest complaint I have is that after choosing who to share my location with from my FB fiends list, I then had to go through the process again, to invite them to use it and of course hit the stupid Facebook 20 invites limit. I simply don’t have time to go back and do it all again with the invites (requiring me to do it 10 times to invite the 200 I wanted to of my circa 300 friends). The biggest annoyance is that this limit doesn’t seem to have affected the number of crappy notifications I get for rubbish apps … my personal profile currently sits at 262 requests since my last purge a few months ago; but I digress.

This can only be good to accelerate take up of location based services and therefore we’re all fully behind it at Rummble;  just those startups focusing on “whos nearby” as a core service, unless they have an existing big userbase (such as people like WAYN for whom its an obvious value add), should think carefully about where they are excerpting their efforts – but again, I’ve been preaching this for 3 years already and so I have little sympathy … a quick look at Loopts -lack- of progress, should give you any answer you need; and they have blown $15m+ up the wall trying to do so, with precious little traction to show for it.

Still, I wish Loopt and their young -but clearly very bright- founder (I met him at Mobile Browser Wars last August) all the best and maybe they will yet rise from the ashes like a Phoenix … but then again, some other bods have a rather more appropriate name to achieve that particular feat…

You can signup to the Friends on Fire beta here at: http://apps.new.facebook.com/on-fire/

Warning: Don’t order from E-buyer (review of ebuyer.com)

Busy executive? Run a small business? In a hurry?  Dont order from ebuyer.

Tempted by their cheaper than anywhere else prices for a Samsung 22″ monitor for my new graphics guru recently employed, I ordered from them last week.

1. I was going to pay on my personal card. They requested a copy of my PASSPORT and a bank statement. Annoyed, but wanting to simply get the goods, I complied and sent the scanned copies to their email address. Days later, still no delivery. We phoned;  they had no record and had canceled the order. We’d had no email or communication. FAIL No.1

2. we tried ordering again. This time I paid on my company mastercard; they didnt require the passport or bank statement this time, but they wouldn’t accept the order to be delivered to our London office, when the card was registered to our Cambridge office.

3. Reluctantly accepted to have delivery to the Cambridge office, so telephoned this time to ensure the order went smoothly. So we ordered BY PHONE and the guy said they would be delivered the next day, as they were in stock. I even paid extra for fast delivery.

Having arranged carraige from Cambridge to London, I called today to check things had arrived. NOTHING HAD ARRIVED. Tried to call, they had a cue of 9 people infront of me. Dug through my email, it turns out they sent a CANCELLATION OF ORDER EMAIL a couple of days ago; it had gone in my junk (good to know they use a good emailing service). The email gives NO useful information about why it is cancelled; the items were IN STOCK, so they cant be discontinued. We certainly did NOT cancel the order.

Summary of why not to order from ebuyer

3 attempts at ordering, over an hour wasted (atleast), many calls, emails and arranging of transport from Cambridge to London, and NOTHING to show for it.

In short:

• Poor communication
• fussy policies about delivery when other services all manage to provide sensible delivery criteria
• long waiting on the phone
• and the potential to be left furious at having wasted a vast amount of time and f***ing around.

And why am I writing this and using up more time? To save you making the same mistake. Its my only course of retort. Back to Amazon for me; I’ll pay the little extra, as atleast they deliver on-time and without the dance of the postal address ebuyer demand.

The email is all its useless glory, below: