Why UBER Matters, A LOT

by Ivan Nikkhoo on January 7, 2014

“Underlying most arguments against the free market is a lack of belief in freedom itself.”

Milton Friedman

Freedom

I was recently at the Le Web conference in Paris where Travis Kalanick, the Cofounder and CEO of Uber was one of the speakers. It is ironic that the idea for Uber was conceived in Paris, France, where free markets and capitalism are under tremendous pressure.

What makes Uber is an extraordinarily important company? In one word, freedom.

Disintermediation is Internet’s biggest gift. Uber is one of the best examples of how disintermediation can transform industries in which unions, lobbyists, regulation, and bureaucracy have created obstacles to progress, openness, and competitiveness.

Which is why wherever Uber operates, unions, lobbyist, regulators, and bureaucrat make every effort possible to block them, make them illegal, or otherwise stop them from operating. The same applies to other companies that are disintermediation other inefficient industries.

As I travel a lot, I have the opportunity to speak to Uber drivers in different countries. They believe Uber has changes their lives, even the ones that used to own taxis before. What is more is that they are now genuinely concerned about their ratings and quality of service. When was the last time a cab driver in New York, whose medallion costs one million dollars, showed any concern about his cost, quality of service, or your satisfaction?

Free markets are not about job security, regulations, collective bargaining, or keeping others out. They are about expanding demand and the universe of services and products, and growing the ecosystem. It is about creating a bigger pie. It is about execution, and providing equal opportunity.

Disintermediation is the key to free markets and equal opportunity. Equal opportunity, however, does not mean equal outcome.

Which is why it is interesting to think about what will happen when “Uberization” is applied to other industries, as it inevitably will!! [click to continue…]

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10 Secrets of an Effective Presentation

by Ivan Nikkhoo on October 14, 2013

“Brevity is a great charm of eloquence.”
Marcus Tullius Cicero

Presentation - Sleeping

After having suffered through many a bad presentation, I have come to really appreciate an effective one. But what makes an effective presentation? As F.L. Lucas said, “And how is clarity to be achieved? Mainly by taking trouble and by writing to serve people rather than to impress them. “ Here are a few key points:

1.     Brevity is Bliss

A friend asked me to sit through a presentation for an on-line dog food company. The Founder/CEO had spent nearly $2.5mm of his own money and was convinced this was the most important discovery since the theory of relativity. Two and a half hours into the presentation, after I had asked him multiple times to get to the point, I finally sttod up, politely told him I could not help him, and left the room. Needless to say, he never raised any capital, and clearly that’s because of I am a heartless, blood sucking VC and banker! As William Shakespeare said, “Brevity is the soul of wit.”  If you can’t articulate a business idea in 15-30 minutes, it is not worth pursuing.

2.     Know Your Audience

I once wrote a piece for CNN, which the producer completely altered before publishing. When I asked him why, he simply said, “You are not speaking to our audience.” It is very important to know your audience before presenting anything, to make sure you know their background, experience, interest in the sector, existing investments, level of technical knowledge, and expertise.

Especially when you are pitching VCs, it is important to do the diligence to make sure they are interested in your sector, are currently investing, have dry powder, invest in your geography, do not have any competitive portfolio companies, focus on your stage, and write the check size you are in interested in. As Annie Proulx said, “I find it satisfying and intellectually stimulating to work with the intensity, brevity, balance and word play of the short story. “

3.     Focus on no More than Three Points

Remember the scene in the movie Amadeus, where his royal highness complained about “Too may notes”. Well, that’s a common issue! There is such a thing as too much of a good thing.  As Thomas Leonard said, “Clarity affords focus. “ Make sure people leave the meeting remembering the two or three most important points that are your strengths and differentiation.

4.     Nobody Likes History Lessons

H. L. Mencken famously said, “A historian is an unsuccessful novelist.” Most people don’t like history lessons in presentations. If I do not know what you are talking about or need context, I will ask. During a presentation, I want to understand the ability of the presenter to communicate an opportunity, articulate an idea, and demonstrate powers of persuasion.

5.     Focus on the Team – Do Not Rely Too Much on the Idea

People invest in people, not ideas. One of the key elements in a presentation is your ability to demonstrate your team’s credibility, relevant experience, commitment, integrity, ability to execute, and passion. There are many reasons why:

  • The idea and company you start with will morph with time.
  • There will always be mistakes and challenges along the way.
  • Markets shift quickly and unexpectedly.
  • If the idea and the market are indeed good, there will always be competitors with more money, resources, and access.

A smart, experienced team is one that thinks in an objective and thorough manner, and has the ability to figure things out along the way, without falling in love with the idea itself. Flexibility, agility, decisiveness, and maturity are the qualities investors are attracted to in a presenting team. [click to continue…]

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Technology Transfer & IP Commercialization

by Ivan Nikkhoo on September 29, 2013

“Intellectual property has the shelf life of a banana.”
Bill Gates

IP

Over the years, universities, government agencies, hospitals and alike have developed massive amounts of IP aimed research, defense, medicine, among other areas, without specifically targeting commercial purposes. Over time, some of this IP has made it to market helping create new products and industries. Many of the technologies and innovations we take granted today came from such research. And many more should.

There has been a trend over the past several years to proactively commercialize, monetize, and otherwise create companies using this IP. Results have been mixed. The policy of most such institutions ensures that the ideas, discoveries, and technologies arising from such research are used in the best interest of that institution. And that is short-term thinking.

As it has been demonstrated in Israel and parts of US, such technology transfer can indeed work, and the benefits can be broad and long-term. However, company creation is not the same and can’t be treated as research, as IP has to be monetized while delivering a specific value with competitive, market, and macro conditions in mind. I have had a number of discussions with technology transfer offices in the US and UK over the years, and have encountered a series of common challenges:

1.     Investment & Commercialization Selection Criteria. Investment selections are often made by academics, university staff, and boards, and not by professional investors with experience, domain expertise, and industry networks.

 2.     Pivoting the Business Model. Academics and researchers seem inflexible in pivoting, repurposing, or redefining the idea to meet potential market demand. Being in love with the technology sometimes supersedes reality.

3.     Bureaucracy, Conflicts, and Politics. Bureaucracy makes it too difficult to make decisions in a timely manner, or at all. And there are always conflicts and politics to be dealt with, which take time and resources away from creating a company.

4.     Reliance on the Idea. Focus, emphasis, and reliance are more on the idea and not on the team. The best ideas without the right team have no chance.

5.     Fear of the Stolen Idea. Some insist on keeping their ideas to themselves, sometimes for years, in the fear that someone else may steal or copy the idea. This level of insecurity and lack of realism always results in failure, as there is no validation of the idea, its market demand, or commercialization prospects.

6.     Revenue. Revenue is not always deemed important and monetization mechanisms are not thought through due to a long history of reliance on seemingly never ending grants, without any need for demonstrable results.

7.     Market Intelligence. Ideas are often deemed “the best” in absence of any evidence, market validation, or competitive intelligence. Furthermore, little time is given to understanding the landscape and examining if others may have tried and failed, investor appetite, or customer demand.

8.     Focus. Plans are too broad and do not address a definable target market or product set, or vertical, demonstrating a lack of focus and inexperience in go to market strategies.

9.     The Network. There is a material lack of external partnerships with the appropriate individuals and institutions. Such relationships are needed to help validate the business model and adjust the go to market strategy.

10.  Monetization Mechanism. There is sometimes a lack of understanding of market preferred monetization mechanisms, suitability for the target market, and valuation ramifications.

11.  Ownership & Independence. Questions including equity ownership and participation, voting rights, board selection, raising capital, among other can be quite difficult to address.

12.  Access to Talent. The selection of the team is often based on the availability of existing staff versus hiring the best people for the position. Many private sector professionals also shy away from such jobs due to slow decision making, politics, and lack of exit or liquidation opportunities.

Having discussed the challenges, it is important to point out that if implemented properly, there are significant advantages to this strategy. As Larry Ellison said, “When you innovate, you’ve got to be prepared for everyone telling you you’re nuts.” [click to continue…]

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Creating a Sustainable Digital Ecosystem

by Ivan Nikkhoo on August 15, 2013

“Do you know what my favorite renewable fuel is? An ecosystem for innovation.”

Thomas Friedman

ecosystem-technology

A digital ecosystem is defined as a distributed, adaptive, open socio-technical system with properties of self-organization, scalability and sustainability inspired from natural ecosystems.

Most high growth tech startups have emerged from a select few ecosystems. Clearly, Silicon Valley is and will remain the most significant digital ecosystem. It has taken decades for that happen. That is because creating such an ecosystem is difficult, full of risk, takes a very long time. There will always be unmet expectations as well as bumps along the way in large part because digital ecosystem models are informed by knowledge of natural ecosystems , especially for aspects related to competition and collaboration among diverse entities.

But many major cities and some countries have decided that creating digital ecosystems will be imperative for their futures. As such, they are willing to make the appropriate changes and investments in every shape and form necessary to ensure the success of their strategy. That is why we now see the rise of incredible communities in Israel, Berlin, London, Singapore, among other places.

lifecycle 3

However, a healthy digital ecosystem must take Into account the needs and challenges of tech startups during each stage of their lifecycle, and not just during incubation. That’s because, the requirements for the team, type of capital, advisors, business relationships, and services change during each stage.

So what are the key fundamental building blocks in creating such an ecosystem? What are the challenges? Let’s examine the basic questions: [click to continue…]

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Effective Communication

by Ivan Nikkhoo on July 27, 2013

“You can change your world by changing your words… Remember, death and life are in the power of the tongue.”

Joel Osteen

 moses001

Have you ever wondered why the statue of Moses created by Michelangelo depicts Moses with horns on his head? More importantly, the damage this has caused throughout the centuries? Was this a satanic joke? No, it was a Bible mistranslation!

The ancient Greek translation of Exodus 34:29 reads, “when Moses went down from the mountain, Moses knew not that the appearance of the skin of his face was glorified” This Greek translation is not faithful to the original Hebrew, but does give the sense of the passage – Moses’ face shone brightly.

The issue is verb קָרַ֛ן (qāran). The noun form of this verb, קֶ֤רֶן (qeren) has as its primary meaning, ‘horn,’ like the horns of an animal. However, this word can also refer to things that radiate from a common source. This noun refers to the rays of light in Habakkuk 3:4: “His radiance is like the sunlight; and in this instance, it referred to rays of light.

And due to a simple mistranslation, “rays of light” became “horns”. And even though during the Reformation, translators removed the horns from the text of Exodus, Moses with horns became a common western, medieval depiction of Moses. The damage was done, and has lasted for centuries.

What does this have with to building, running, and growing a company? As Epictetus famously said, “First learn the meaning of what you say, and then speak.” We all need to learn to communicate effectively, as we continue to make mistakes daily at work and at home. [click to continue…]

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The Wisdom of Differentiation

July 11, 2013

“America has believed that in differentiation, not in uniformity, lies the path of progress. It acted on this belief; it has advanced human happiness, and it has prospered.” Louis D. Brandeis Differentiation is defined as “The act of distinguishing or describing a thing, by giving its different, or specific difference; exact definition or determination.” We […]

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The Emergence of Los Angeles as a Booming Tech Hub

July 7, 2013

“To fly as fast as thought, you must begin by knowing that you have already arrived.” Richard Bach    A couple of weeks ago I had the pleasure of spending time at the various Silicon Beach Fest activities in Santa Monica. My conclusion: Los Angeles is a serious tech hub. Make no mistake; we still have […]

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Raising Growth Capital

December 30, 2012

 Conformity is the jailer of freedom and the enemy of growth. John F. Kennedy Many entrepreneurs are skilled at starting companies, and building successful small ones. Not a simple thing to do, but they seem to have a knack for it. Growing a company into a big, growing, successful one is very different, and in […]

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The Value of Interpersonal & Communication Skills

November 6, 2011

Communication – the human connection – is the key to personal and career success. Paul J. Meyer I am very involved with the tech community in California, and as such host, organize, and attend numerous industry events, dinners, and functions. Such events provide an opportunity to meet new people, spot trends, and gain insights into […]

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Substance Versus Showmanship

September 11, 2011

Beware that you do not lose the substance by grasping at the shadow. Aesop   I was recently at a very nice networking event where over two hundred people were gathered to listen to a panel of highly accomplished, intelligent, and successful entrepreneurs. There was enormous energy in the room. There were more new start […]

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