Pitbull is the Hero of Miami

1399744494pitbull_2The Miami born rapper, Pitbull is an ultimate rags to riches tale. He never forgot where he started and he loves Miami through and through. That is why is the cities hero and is working to help the U.S. Latin American hub become a place for technological innovation. As the key note speaker at eMerge, the five day TechWeek conference he said, “I’ve applied everything I’ve learned to this city. Our city was never respected when it came to music, even though we were big parts of history. When you have people like 2 Live Crew…maybe their music wasn’t accepted…but you have someone like Luther Campbell who fought for the First Amendment. That gave us a chance to rap about what we wanna rap about. I feel like he got stripped of his history. I said if I ever wanted to be something in Miami I needed to go through the King of Miami; so I started dealing with Luther Campbell.

One thing that Lu’ taught me was an independent state of mind. He was putting out his own music with no label. And that’s why we’re here today.” Pitbull believes that Miami can take this independent spirit to dominate the tech industry. He said in his speech that as California holds Silicon Valley, Miami is “going to be Silicon Paradise!” Pitbull’s experience is in the music industry, but he seemed confident that what he was able to do in the music scene in Miami is possible for the technology scene. Miami holds the potential to be a place where start-ups can flourish, future oriented businesses can grow, and a general attitude of innovation is celebrated. Look out Miami Pitbull is inspiring others with big plans for your future. Thankfully, his dreams for the city are not that far fetched and hopefully more and more companies will be working towards a tech savvy future for the three-oh-five.

Microsoft: The Tech Market’s Comeback Story

shutterstock_140495338-msftMicrosoft, up until the past few years, was always considered the pinnacle of technological innovation in the realm of consumer products. The name itself would strike fear in the hearts of technology executives of all backgrounds; a wolf amongst sheep. However, Microsoft’s name has become a punchline amongst today’s technorati, a joke about the diminishing marginal returns on putting all your eggs in one basket as far as innovation goes, a formerly dominant company becoming a plodding kludge. Recent history of Microsoft has been rife with missed release deadlines, delayed products, and cancelled features, to the point of disheartening consumer and enterprise users the world over.

The rest of the tech market has moved vastly quicker than Microsoft has. Between 2006-2008 Apple introduced the iPhone, Amazon introduced AWS, Google brought about Andriod, and Facebook debuted its News Feed. Those innovations alone encompass a great deal of innovation in their wake, making those four companies the “quadrumvirate of tech” making some comment that Microsoft simply no longer belongs on the list of top tech companies.

However, Microsoft has always had the critical ingredients for success. Consumers want always-portable, always-available, always-usable data across all our devices and applications, allowing us to constantly be in touch, productive, or entertained depending on our mood. From Office to XBox, Microsoft has all of the individual tools and products it needs to fulfill all of our wildest tech fantasies. Yet, by the same token, Microsoft has seemed plagued with constant inefficiency and political strife which inhibited the company from permanently establishing itself as the key brand in the tech market; a position that has been usurped completely by a dominant split between Google and Apple.

However, as Bob Dylan once said, the times they are a changin’. Sampling from some recent news out of Microsoft’s camp in the past few weeks, it seems Microsoft is making a push to become relevant again. Recently Microsoft announced that it launched Office across all devices, including on iPad and Android to some decent acclaim. Additionally, Microsoft is building a very disruptive startup lab headed by a well known executive from DARPA to take on the likes of GoogleX. Bing is now responsible for nearly 19% of all search queries in the United States, slowly pushing against Google’s dominant search engine market share. It’s even making Skype group calls free as of just days ago.

Most importantly however, Microsoft seems ready to embrace the cloud. Microsoft’s new CEO, Satya Nadella, published a letter a month ago outlining a renewed focus on positioning Microsoft at the center of this new cloud based world by creating a “cloud for everyone, on every device.” Almost over night it seemed that Microsoft was finally ready to make the next big push by harnessing its full energy, it’s $20 billion in revenue and $5.66 billion in Q1 net earnings that it had announced only days ago. A Microsoft with a strategy, a vision, is a deadly force in the race for tech supremacy, a race that’s comparable to the US/USSR cold war arms race at this point. All four of the quadrumvirate are highly vulnerable at the moment due to the market convergence created by similar products that depend on devices and the cloud. Continuous engagement is at the heart of these companies’ strategies, and consumers are salivating over a new entrant into the market. 

Flayvr Working on Fundraising

flayvr-logoFlayvr came before Apple started organizing your photos into “moments.” The start-up, based in Tel Aviv was formed to organize our every growing collection of pictures. It works by automatically organizing photos and videos from your smart phone into albums that you can then share easily with family and friends and those on your social networks. The company has plans to grow and therefore has conducted a large fundraising campaign that has earned them $2 million to keep expanding. Right now about 2 million smartphone users use the app and that number is expected to grow with the new funding. The money came from a variety of sources including regional investors like Kaedan Capital, Moshe Lichtman, Aviv Venture Capital, iAngels, and angel investors Rafi Gidron, Zohar Gilon, Yariv Gilat, and Partam Hightech. Before this big campaign, Flayvr raised $450,000 from Israeli angel investors.

The app is available for iOS and Android and has lived longer than some of the similar competition in the photo organizing app business. The competition includes organizational tools like Everpix, Snapjoy, Batch, and Flock. Once Flayvr is installed on your phone it effectively takes over as your photo gallery to view and browse the pictures you have taken. To organize the photos it analyzes the context of each picture from data from social, behavioral, user-generated, geolocation, computer vision, and time-based clues. Once Flayvr has organized the pictures its easy to upload to Facebook, Twitter, WhatsApp, Google+, email, or iMessage. Other features of the app include a slow fade in/out of pictures to see many photos in an album quickly, without having to scroll through.

With the newly fundraised money, the company would like to double its team from 5 to 10 and expand more in the United States. Eventually, they would like to have most of their business operating on cloud technology to extend the platform. Even though the new Apple OS does something similar to Flayvr, the company is confident that it will only boost their sales because it stresses that this type of service has become necessary.

Turkey Twitter Ban Angers Tech Savvy

Demonstrators, members of Turkish Youth Union, shout anti-government slogans during a protest against Twitter ban, in AnkaraThe Prime Minister of Turkey, Tayyip Erdogan has banned Twitter from his citizens to stop them from accusing him of being corrupt via the social networking site. However, the Turkish people are thriftier and tech savvy than Erdogan originally anticipated. In fact many Turks are so angry that Erdogan is limiting what they can access on the internet that those who knew nothing about things such as VPN or DNS are trying to learn more to get back at the government.

The reason that Erdogan is so threatened by the microblogging site that citizens have been exposing his corrupt dealings through audio tapes of his family and businessmen. These have been released on Twitter right before important elections for the country on Sunday. The Prime Minister has accused opponents of manipulating the audio to frame him and smear his campaign… and then he attempted to ban Twitter. As the government tries to shut down avenues of communication to those who oppose, tech savvy citizens continue to find new ways to communicate to large groups of people. The result of this cat and mouse game is a kind of censorship arms race, each trying to outsmart the other for their own means.

Frist citizens tried to change domain names to route their internet use to different servers and thus avoid the ban. When the government caught on citizens then tried VPN software hotspots and TOR software. It is important for Turkish citizens to continue to adapt and fight the ban by continuing to tweet and use YouTube. It is almost impossible to censor an entire nation and as long as they keep moving and adapting, Erdogan will never be able to stop his critics.

NSA Limits the Bright Future of the Internet

Edward-SnowdenEdward Snowden made a digital appearance at the SXSW (South by Southwest) conference this week. He spoke on his familiar topic of the NSA mass surveillance system and how it is bringing the country to its knees. In this case he focused on how the NSA’s actions are affecting the future of the Internet and how they are “setting fire to the internet.” That may seem drastic, but Snowden believes that if people don’t feel secure with communicating through the Internet than they will limit how and what they say via the Internet. This is especially concerning when put in the context of financial and business dealings. If you don’t think that your communication is secure, you won’t do it and therefore will not conduct deals and that will eventually hurt the economy. When the Internet is compromised it hurts the future of how the technology may bloom.

This problem is beyond just the NSA. Since the ability is there, the Internet is not only fully available to the United States government, but also other countries around the world. The tools, methods, and activities are out there for other governments to copy. Additionally, the United States has set a precedent that this is okay to do to your citizens in the name of national security.

So how can the NSA undo its actions and renew trust in the safety of our Internet communication? Is there a future for the Internet or is this the beginning of a slow demise? The only answer the extremely pervasive surveillance that the NSA has thrown at us seems to be pervasive encryption. Corporations are making it harder for the NSA to view their content by boosting their security with encryption. The harder and more expensive it is for the NSA to mass surveil, the less likely they are to do it. Whatever you feel about Snowden’s decision to leak the NSA’s information, it has certainly changed the way we interact and how we feel about Internet communication. The public has been informed about their privacy and the true actions of their government. If the future of the Internet is going to bright again, it will come in a highly encrypted package.

The Changing Face of Charity

impact-give_directlyTechnology has made it easier to donate towards philanthropic causes. However, this has changed the game for the ways charities usually function and how they interact with donors.

The biggest change is in the demographic of those who are giving and how they are able to give. Millenials can’t donate in traditional ways. Charity used to thrive on banquets and large gifts, but the younger generation doesn’t have the capital to give that way. So, targeting smaller gifts, online is the best way to rope them in. As millenials age and have more economic leeway, they will remember the charities that they made relationships with early and possibly give larger gifts.

Charities that are ahead of the game are using technology to their advantage when targeting those who may donate. For example a service called Centscere donates a few cents every time you “like” something on facebook or send a tweet. Other companies are doing similar things, like Google’s One Today that donates a dollar a day to a charity of your choice, or Check in for Good. Check in for Good utilizes the check-in habits of millenials in restaurants, coffee shops, theatre, etc. and donates money when they post that they are there.

The biggest change for traditional philanthropists is that donors and activists are organizing on their own. They have the tools with the Internet and the various app interfaces to collect money and put it towards the causes they see fit. The need for institutions still exists, but the way these institutions interact with people and how the donors interact with them is changing. Gone are the days of word of mouth. Charities need to have an online presence that clearly outlines who they are and what they do via a website and social media. There is still a place for charities, but they need to be aware of the changing market, especially as sites are linking donors directly to people with need. For the future of established charities, they need to make it transparent exactly how what they do impacts the final step, those in need.

Facebook/WhatsApp Buyout Considerations

facebook_whatsapp_coverFacebook CEO Mark Zuckerberg and WhatsApp CEO Jan Koum have joined with an impressive $19 billion deal. The two met in February about the deal and Zuckerberg added the incentive of adding Koum to Facebook’s board. The advantage for Facebook is that WhatsApp is used internationally in areas where Facebook isn’t. This will give Facebook a more varied user population with a varied demographic. The deal will give Facebook access to WhatsApp’s 450 million global users. It is not quite clear how this will continue Zuckerberg’s quest to connect the whole planet, but he clearly has a plan.

This acquisition makes Facebook Silicon Valley’s top Dealmaker. They have made large deals before, but the large sum they forked over for WhatsApp makes Facebook the largest dealmaker over the search engine giant, Google.

It will take many steps for Facebook to connect the whole world. WhatsApp is one important step. They have many users in emerging countries like India, Mexico, and Brazil. Next, Zuckerberg may look to chat apps like WeChat, Kakao Talk, and Viper, which are primarily used in China, South Korea, and the Middle East respectively.

Facebook has just spent billions of dollars acquiring Instagram and now WhatsApp. It is unlikely the company will now continue to pursue the ephemeral photo app, Snapchat. Although Zuckerberg has made acquisition offers and campaigned hard for the company before, he is unlikely to continue his pursuit. Beyond Zuckerberg, the co-founder of WhatsApp, Brian Acton has issued some pretty harsh remarks against Snapchat and what the company offers so it is very unlikely a deal will occur.

Investors initially seemed wary of the Facebook/WhatsApp buyout, but after Zuckerberg and Koum spoke the shares went back up. Now only time will tell how the market will respond to this new acquisition.

Disney to Start Own Startup Incubator, With Help from Techstars

681047-786x305The Walt Disney Company is getting into the startup incubator/accelerator business with its launch of its new program Disney Accelerator. The media giant is looking for ten “early-stage companies with innovative consumer media and entertainment product ideas.” Those companies will receive $120,000 each as well as mentorship from various tech and entertainment companies, amongst them the many companies under the Disney umbrella, including ESPN, Pixar, Lucasfilm, Marvel, and Walt Disney Imagineering, not to mention Disney CEO Bob Iger. In return for their financial commitment, Disney and Techstars will receive a total of 6% equity of each company (3% each).

The company describes the program as “powered by Techstars.” Others who have partnered with Techstars for developing their own startup incubators include Barclays, Microsoft, and Sprint. The team dynamic works in such a way so that Disney provides the mentorship and financial and networking resources, while Techstars brings its technology and startup accelerator experience, creating somewhat of a powerhouse incubator specializing in media and content distribution technology. This will be a joint partnership in that it will be equal investment from both Techstars and from Disney. Techstars will additionally appoint someone to help run the day-to-day operations full-time under the supervision of Michael Abrams, Disney’s senior vice-president of innovation.

Kevin Mayer, Disney’s executive vice president for corporate strategy and business development, says the Disney Accelerator “offers a unique collaboration between some of the best creative minds in the entertainment industry and the modern-day visionaries who are starting 20130213-Warner-Bros-and-_headerbusinesses on the strength of exciting new ideas.”

Mayer says he expects to receive quite a few applications from companies involved in either ad tech, application ideas and technology, like HTML5, mobile, new business models, or even monetization techniques. Participants will be selected based on the concept and whether the idea matches up with something Disney can readily identify with.

Disney will kick off the accelerator program at the end of June in Los Angeles. However, it’s not the only one of its kind, and will have to compete with other programs, including Warner Bros. Media Camp, which will be in its second year this summer. Mayer is, however, undeterred, stating that he doesn’t expect Warner Bros. Media Camp as being a distraction from Disney’s Accelerator garnering attention.

When Do the Storms Arrive in the Saturated Cloud Hosting Space?

The cloud hosting space is saturated with Fortune 100 companies looking to up their investment in what is already an overly-invested industry.  With the likes of Amazon (Web Services), Microsoft (Azure), HP and IBM (Softlayer) already providing cloud services, it means two things now that Google (Compute Engine) has jumped into the deep end of the pool: lower prices and a willingness to move downstream for customers.

Given the capital-intensive aspect of this business, what is the ROI of this business?  I would have stipulated that it is close to breakeven.  ProfitBricks, a German based provider of cloud hosting, produced the graph below highlighting the profit margin in cloud hosting. They report that the price erosion since 2006 has happened more slowly than technology efficiencies (as measured by Moore’s Law), resulting in profit margins staying the same or increasing depending on where you are in the hosting lifecycle.

Amazon Web Services (AWS) is the market leader in cloud hosting.  They approached the cloud hosting space with significant resources, a service that matched off with the consumer’s requirements, and extremely competitive pricing.  Netflix is their biggest customer (experiencing double-digit growth) and they rely on AWS because they can scale as Netflix grows; Amazon is constantly innovating; and the price is very competitive. And if it isn’t competitive today, it will be in two weeks time.  Ultimately, it was the pricing pressure vis-a-vis their competitors which allowed AWS to capture a significant portion of the cloud hosting market in a very short period of time.

After reviewing some of the technicals above, why would you fund a startup focused on cloud hosting?  Digital Ocean has the answer to that question.  They believe the small business and developer customers are underserved because a majority of the cloud hosting resources are focused on the enterprise customers.  They might be right, to a certain extent — today.  In the future,  the crowded cloud hosting enterprise market will ultimately force the big market makers to smaller markets so that they can generate revenues and maintain top-line earnings for their  shareholders.  It will be interesting to watch if the Digital Ocean bet has legs to stand on or will be washed away in the cloud hosting storm.

Are You Ready to Take Flight with Prime Air?

One of the segments on ‘60 Minutes’ last Sunday night was an interview with Jeff Bezos, CEO of Amazon.  The interview was pretty standard fare, until Bezos made an announcement to Charlie Rose that he had a new initiative to reveal.  The new initiative is to

amazon-prime-airdeliver certain packages to Amazon customers with drones — possibly reducing product shipping time to as little as 30 minutes.

For example, go ahead and click the BUY button for the new Kindle, then make a cup of tea for yourself and when you are done drinking your tea, go out your front door and pick up your new Kindle that was delivered to you by a drone sometime over the last thirty minutes. This scenario is an extremely disruptive concept to standard-fare delivery.

What type of product?  The product(s) would have to be 5 lbs or less which currently represents 80%+ of Amazon’s deliveries.  The customer’s delivery address would need to be within a 10 mile radius of an Amazon distribution center.

A drone?  The delivery system Bezos described in his interview was an octocopter which uses a lithium polymer battery.  One of the big benefits, in addition to expediency, is the green solution provided by the drones, therefore reducing the need for fossil-fuel burning delivery trucks.

The props on the octocopter are fixed-pitch and the motors are attached rigidly to the structure so control is provided by software which throttles the engines to move the aircraft. The feedback loop has to be very sophisticated to insure that the flight plan is achieved.

Projected implementation?  Not before 2015 or a date after the FAA delivers their requirements for unmanned aerial vehicles.

Considerations?  Safety is the primary driver.  How do you build enough redundancy to insure the drone gets to the proper coordinates and returns to the distribution center.  How about exogenous variables such as weather, software glitches, hardware malfunctions, customer delivery receptacles and crowded airspace?  I am sure that most of these issues are addressable.

Jeff Bezos and Amazon don’t get into a business without having a thoughtful plan to move Amazon into a position of market leader.  Bezos realizes that the next great company is always “just around the corner” and without consumer trust and product innovation, Amazon can be replaced.  Clearly, the concept of Prime Air meets the innovation requirement but there will be much competition in this space as the primary delivery companies (ie, UPS, FedEx) are not going stand by idly and let Amazon gut their business.