Alfidi Capital at REUSE 2017 Semiconductor IP

I could not close out my 2017 adventures without attending the REUSE 2017 Semiconductor IP conference in Santa Clara. I am a regular down at this convention center and nothing big in tech escapes my notice. I also rarely escape the tech sector's notice, which is why techies invite me to events. Gaze upon my badge selfie below so we can get to work.

Alfidi Capital at REUSE 2017.

The first keynote on IP theft should have opened the eyes of anyone in Silicon Valley who still thinks that authoritarian countries can still be friends of the United States. Just look at the People's Republic of China, for crying out loud, and see how their Communist government causes us problems. The US Commission on the Theft of American Intellectual Property (aka the IP Commission) reported that China has stolen up to $600B worth of IP from the US economy, including information critical to our defense industrial base. I started to see the potential for this kind of disaster years ago when I first started following the rare earth element sector. China's stated strategic desire to attract high value manufacturing to its territory is a long-term threat to democracy.

Our REUSE keynote speaker had solid recommendations for defenses against foreign IP theft, with the caveat that litigation after the fact is far more expensive than erecting cyberdefenses (like encryption) before it happens. I would add that any US company considering a high-tech joint venture with a Chinese company needs to abandon such a project immediately, before the inevitable ripoff happens.

Automobile IP will be a hot topic as automakers deploy autonomous vehicles. Get to know the Single Edge Nibble Transmission (SENT) protocol for sensors. The CAN in Automation folks hold their plugfests to see what kind of automotive tech will work as we move into self-driving cars. The proliferation of sensor tech in IoT and cars means there will be more pure-play IT possibilities for startup business models.

The Arm folks made their presence known once again. Their Arm Compute Library for developers now includes ML and AI enablement. The next step in architecture evolution is integrated encryption capability. Expect to see ambient energy harvesting for IoT devices via radio frequency (RF) or solar attachments. Arm's DesignStart program offers no-cost licensing up front for development based on Arm's core systems. I look forward to watching startups build hardware-infused encryption and energy processors onto Arm platforms. The bottom line for developers is that partner IP built on platform IP like Arm enables faster hardware product time-to-market.

I will offer a warning to US developers based on what we already know about Chinese IP theft. Many partners in some foundry support ecosystems have Chinese-sounding names, so they deserve a thorough review for any US partner concerned about IP protection or economic dependence. In case of a trade war, US companies would be cut off from Chinese supply chains, and I doubt they will have access to the WTO or other avenues for recourse in the event of IP theft.

I learned a few things from a keynote on how IP ecosystems evolve. Springer's "Security Assurance Guidance for Third-Party IP" is a start for developers who must verify their vendors' trustworthiness. Vendors must use a formalized ticketing system to track IP knowledge sharing. I get that there will be new opportunities for developers in subsystems, chiplets, and services. I also foresee new threats as inexperienced tech developers launch those startups without IP tracking or vendor vetting on day one.

I never pass up a chance to hear about anything from open sources, so of course I went to the panel on open innovation. I was very impressed with one business model empowering fabless product generation, and it may be very useful for one concept I have in development. Any FPGA circuit, programmed input/output (PIO) device, or electronic design automation (EDA) tool can now be developed from open sources. Microsoft's Project Catapult created a white paper "A Cloud-Scale Acceleration Architecture" that provides a decent road map for FPGA development. Google search results for "open source prototyping" show that open sourcing is harder and costlier for hardware than for software.

The closing keynote on semiconductor industry trends gave me some new food for thought on AI impacts. If you have not heard of those things yet, they are coming to a startup pitchfest near you after the wheels fall off this crypto ICO craze. Cheap open source development will become more prevalent now that only the largest semiconductor companies can afford to survive the long lead times between major nodes in tech shifts. Smaller design rules are part of the push against Moore's Law, and they increase the cost of conventional semicon development. Extreme ultraviolet lithography (EUV) is the next step in small measurement process development. The sector's drive for Design-Technology Co-Optimization (DTCO) pushes the simultaneous development of every step in the semicon value chain, including the foundry.

REUSE is an informal showcase for smaller companies. I got my trade show passport stamped at every expo vendor booth because I'm just that thorough. I will now offer some wrap-up wisdom for any techies considering a hardware startup. Secure your foundation IP, encrypt your data, investigate your vendors, and track your workflows if they connect outside your enterprise. Deny any potential Chinese partners access to any and all American tech, including napkin sketches, and erect impenetrable digital barriers to Chinese cyber intrusions. I would be happy to share these observations and more if REUSE offers me a speaking slot net year.

Alfidi Capital Visits IoT - AI - Blockchain Expo North America 2017

I ventured down to Silicon Valley towards the end of 2017 for something I have never experienced before. I sought the combined excitement of IoT Expo, AI Expo, and Blockchain Expo North America 2017 because everyone is talking about all the money they can make from this stuff. I have always been willing to buy the arguments for IoT and AI, but I have been skeptical about the blockchain's utility. I am more skeptical than ever after this combined conference.

It's the Alfidi Capital badge on a program booklet for AI, blockchain, and IoT in 2017.

The first speaker I encountered compared ICO tokens to 19th Century railroad investment certificates, when America was developing its frontier and banks issued multiple competing currencies. Yeah, it's the Wild West all over again in ICO land. There were plenty of stagecoach robberies back then as adventurers moved out west to seek their fortunes, and there are new stagecoach robberies happening today with each ICO. A rundown of all the buzzwords needed to understand this space, like "smart contracts" and "off-chain computing," deserves a separate blog article.

Blockchain probably cannot be valued as an asset using traditional financial metrics like DCF valuation, unless we draw an analogy with monetized API calls. It also probably cannot be valued as a currency; it has no comparable factors like GDP or current accounts in national trade. The best valuation method will have to adapt data valuation (remember, it's the new sun, not the new oil) by measuring a blockchain network's ability to process such data. I am certain that such processing ability reaches an inflection point when the energy cost of adding new hashes to the chain exceeds the marginal revenue collected from each additional data input. You heard it here first at Alfidi Capital.

I have a hard time accepting the blockchain concept of "gas," the amount of resources needed to execute a smart contract. If it has a dollar value attached, it can form a basis for valuation. I believe a network that calculates its remaining gas amount will eventually see it turn negative once they compute the energy cost needed to build smart contracts past some critical point.

I initially thought the Technology Services Industry Association (TSIA) is emerging as the governing body for the more integrated parts of the IoT / AI / blockchain sector. Their "about" page describes a research and advisory firm, so now I have no idea whether they represent a sector or themselves. They also track the cloud sector (of course). The confusion is typical of a growth sector pushing brand new networked business models, so in fairness I don't think the microcomputer revolution of the 1960s-70s was any more organized.

The venture capitalists' perspective at this conference offered further confusion. They claimed to invest in quality tech, but never specified any criteria. How would they know if a blockchain has quality if they have never compared its processing logs to those of a conventional cloud PaaS provider? The VCs' claim that ICOs will push more venture investment into early-stage blockchain startups must be a symptom of FOMO (fear of missing out), because experienced VCs should know that the SEC is taking a hard look at ICOs. Risking legal trouble just to jump into an ICO shows desperation. I still cannot understand how ICO tokens can be distributed to both investors and early tech adopters without the startup's cap table turning into a mess. A messed-up cap table is a recipe for securities fraud litigation.

I had to LOL at VC investors who thought tokens enabled network effects that give a startup some competitive advantage. One investor finally made sense by admitting that tokens are not as advantageous for investors as equity (LOL, no kidding). I do not understand how an ICO evolves into a publicly traded stock so early investors have a liquidity exit. None of the investors appearing at this conference ever made that clear. All of these people are trying to change the definition of success to "funding the network" where tech adopters participate, whatever that means. It is totally unclear how token buyers will ever see an ROI. Maybe that's the whole point; maybe ICO promoters just want to abscond with money from excited people. It's time for scam alerts!

One presenter from a data company made a very interesting point about equity in data itself rather than the distributed network. If we owned the data we generate, and companies had to pay us fees or licenses to use it, it would create universal basic income (UBI). He did not mention the fact that not all data is equally valuable. Data for an ultra-high net worth (UHNW) investor would presumably be worth more than data for a low-income person, if data value is influenced by a target's projected consumer spending.

I perused the expo floor for some ray of hope that startups can make a honest business case for a blockchain. A brochure for some online VC portal claimed to tokenize startup investing, whatever that means. There's a scam alert right there. I picked up other brochures touting tokens as loyalty rewards that doubled as investments. That concept makes no sense, but scams are never intended to make sense.

The panel on AI investing made a lot more sense. Venture investors now use AI to assess startup teams based on their public domain background info, along with the tech's strength. The traditional metrics of team, tech, and traction (that means sales!) still matter, and some investor wanted to see two of those out of the three at the seed stage. One VC admitted to subjectively evaluating teams, which I have long suspected is the norm. Hey folks, just so we're clear, these VC firms that hire analysts to do busy work while they default to favoritism in their investment choices are fooling their institutional investors. They are not fooling me. Bringing AI into the process removes the subjectivity and leaves an audit trail for fund investors to inspect. My caveat is that AI used to identify winning startups may be susceptible to survivorship bias.

The "VC in AI" panel dragged on and I was disappointed to discover zero discipline or consistency to anything those so-called VCs said. The best VCs (like Vinod Khosla) have well-developed pattern recognition abilities. Their brains are biochemically different from those of most VCs. The final observation that bad product/market fit and running out of cash were still the leading causes of startup failure shows how little things have changed in startup land after all these years.

It was good to see ARM showing its Mbed cloud for IoT device connectivity, a.k.a. the open source Mbed OS. I think I've seen the LoRA Alliance before at these types of shows, bringing the wisdom of low-power wireless to one and all. I want the vendors pushing low-power devices to be more well-versed in their use cases. One presentation did not thrill me and I cannot imagine the vendor's PaaS partners would be thrilled that a sales rep doing a new product demo cannot demonstrate the economic value of a use case.

I sat on the notes I took and handouts I collected at this conference for some time, wondering what to make of the bizarre business models I encountered. The IoT and AI potential is there and people are certainly using that tech to transform enterprise computing. That's the good news, and now here's the bad news. I am now resigned to the likelihood that much of the blockchain ecosystem is a waste of computing power and investment capital. Many of the brochures I picked up touting blockchain businesses had weak use cases but were nonetheless raising money through ICOs. I stay far away from ICOs and their nonsensical tokens. The coming blowups in blockchain will be painful. Watch the headlines in 2018 for fraudsters getting sued and prosecuted for ICOs. I will keep attending these conferences, with a watchful eye out for bad ideas to expose.

Alfidi Capital at Cloud and IoT Expo 2017

There is an endless parade of cloud computing action in Silicon Valley. I attended Sys-Con's Cloud Expo and IoT Expo 2017 down in Santa Clara to check out the latest action. They also had some Big Data and DevOps stuff going on at this show. It's easy to get all of these cloud conferences mixed up if we don't identify the primary organizers. It's even easier to understand cloud action once you read my Alfidi Capital blog articles. I do in fact have a badge selfie, as you can see below.

Alfidi Capital at Cloud and IoT Expo 2017.

The major cloud providers all publish global maps of their service availability zones. Their data center locations may be proprietary information, so I will let interested readers peruse those maps on their own. Cloud users should know how a cloud provider will support their data classification and workload types. AI processing of enormous data volumes will drive cloud growth, and so will blockchain adoption. "Serverless" is a new cloud buzzword often appearing with "containerization" in a buzzword combo.

One speaker took the stage in an inflatable dinosaur costume to tell us about microservices. It was a cute stunt. Microservices decompose a tech's scope into single-function modules, reducing a system's complexity by minimizing communications between people. Expect to see this "microservices" buzzword to join "containers" because it sounds so cool. Kubernetes fans can use the Istio open source framework along with whatever toolchain they need; someone will likely be impressed.

All of this talk about microservices made me ponder how I would use them in a real project. API governance is a new challenge for microservices frameworks. A bigger challenge is to model workflows that cross different microservice architectures. I searched the Web for examples of these models; there are quite a few. Code Project may have something useful. The Gartner Hype Cycle for Emerging Technologies 2017 identifies machine learning (ML) very close to the peak of the current cycle. I need an open source ML process or AI engine I can use to improve an app or bot, provided I could control the input of proprietary data. The process needs to handle classification, clustering, and regression without problems. Alternatively, I could use open source training data sets, similar to the business data I need to process. Perhaps Uncle Sam's Data.gov has both training and real data that would suit my analytical goals.

Ask yourselves what "serverless" truly means, given the chronic underutilization of on-premise data centers. Serverless is not just another cloud function. It should remove developers from routine things and given them true DevOps freedom. Seek the cloud's wisdom if you speak the correct language. I will not take a serverless expert seriously if they think ICO "digital credit" as a virtual asset is something the cloud can leverage.

Cloud operators are talking more about the EU's GDPR and the need to do a gap analysis to become compliant. It's a healthy development for anyone who respects data privacy. Outsourcing GDPR compliance services is now a growing cottage industry in the cloud sector. Operators also need cool metrics like "idea to cash" and mean time to repair (MTTR) to impress their financial auditors.

The cloud cannot exist separately from the real-world IoT systems it will manage. Manufacturing plants are info-synched to adjust operations in real time, so the physical plant must be designed to incorporate software and sensors for data capture. I foresee massive security vulnerabilities if manufacturers allow their supply chain vendors to have real time visibility into their live factory operations. Such easy access allows hackers and viruses easy penetration to an entire vertical. The cloud can make ordinary ICS/SCADA vulnerabilities even worse.

Cloud success increasingly means using AI. Imagine AI governing BRMS with the ability to adjust principal rules. A human designer must be in the loop to ensure the AI does not get out of control. If the Singularity happens, the most likely origin will be some AI governing a major cloud provider that has access to the AIs of enterprise clients running their own BRMS through public clouds. The self-aware computer apocalypse is the worst-case scenario of AIs leveraging other AIs. The Standard Performance Evaluation Corporation (SPEC) should codify standards that will prevent this AI nightmare.

Choosing a cloud provider has strategic implications for a business. All configurations (data center, container, serverless) lead to "vendor lock" where a customer is permanently tied to one cloud provider. This is the exact definition of a switching cost in a sector where the biggest players have a durable competitive advantage. It's why data centers are becoming just like railroads and pipelines. Cloud vendor lock is a switching cost for the customer and a competitive advantage for the provider. Spell my name correctly when you quote me on that point.

DevOps people belong in the cloud. Read the Puppet and DORA State of DevOps Report 2017 for assessments of where DevOps is going. There are also plenty of DevOps handbooks and white papers on the Web for additional guidance. I know how to solve the tech culture problem of which developer cult is best for the cloud sector. Design a "Project X" and have different teams (DevOps, agile/lean, waterfall) work to solve it on a fixed budget. Ready, set, go. May the best team win. There will always be some expert who thinks forcing teams to compete is bad, and who can cite research on development teams to support that conclusion. My point is that they don't need to compete internally, so the competition should be confined to conferences and hackathons where teams can demonstrate their skills.

Containerization is the future of the cloud. Composable infrastructures should theoretically lead to the elimination of data junkyards. We will see how fast this elimination occurs if the cloud continues to trend away from virtualization and towards containerization. Latency is the single most important business criteria determining resources directed to containerization. Power management is the single most important limiting factor in data center optimization.

The app development ecosystem has massively diversified and has become dependent upon object assembly from multiple open source code bases. Optimizing apps with AIs will be a big thing. Open source APIs must be flexible enough to accommodate microservices designed for either containers or virtual machines. Each microservice must perform one function only, and must only communicate with other functions via well-developed APIs; otherwise the microservice will not work well with containers.

Plan out cloud use thoroughly. Assess the opportunity cost of not using cloud for some project. The cost avoidance is justification for cloud adoption. Any business decision in a large enterprise that's not justified with data will come down to politics. Design thinking is useful in enterprise architecture, with every potential choice having its own cost estimate.

Scrum is one variation of the Agile Manifesto. Making agile work in verticals with declining economics means firing a lot of senior people who stand in the way of a pivot that will keep the organization alive. The dinosaurs won't take risks. The old 80/20 rule applies, so the worst 20% of employees just won't grok agile. Once they find less demanding jobs at less pay, they may have an epiphany that they need to acquire new skills and attitudes. The cloud will disintermediate servers from their users.

I am very impressed with emerging attempts to determine the economic value of data (EVD). The accounting approach to EVD is wrong because accounting uses historical cost only. Economics uses a future value for EVD because data value persists into the future as its multiplier effect cascades throughout a network. I like a quote I heard at the conference from a data science practitioner working on EVD: "Data is the new sun, not the new oil." Petroleum is a deleting asset. The sun never wears out, just like data persists. That one metaphor made my entire conference attendance worthwhile. Upon reflection, I will add that EVD models must account for incorrect or obsolete data that must eliminated and no longer adds value. Data's persistence does not make it immune from depreciation.

Edge computing makes IoT smarter. The MQTT protocol is multi-cloud connective tissue where more than one cloud overlaps with remote devices. Edge analytics turns BI into behavioral understanding; expect it to use data lake dumping (heads up, Hadoop fans). Common cloud architecture uses MQTT to push data from analytics engines (assigned to collect from IoT device categories) into the cloud. The whole point of edge computing is to reduce the volume of data going to the cloud. It economizes on traffic by sending only analytics (a compression of data) or patterns (even further compression).

I covered a lot of intellectual ground at this Cloud / IoT Expo. The tech expertise routinely concentrated into the Santa Clara Convention Center is one of the wonders of Silicon Valley. The conference gave me even more inspiration for some tech ideas that I really need to execute. I may even showcase my concepts at next year's Cloud / IoT Expo. The sky is truly the limit in the cloud.

Alfidi Capital at LicensingLive! 2017

I attended Gemalto's LicensingLive! 2017 conference in Silicon Valley. I have never explored the software licensing ecosystem before, so this conference opened my eyes to a different monetization approach. Please note that Alfidi Capital does not have any software available for licensing. Here's another badge selfie for all of you to admire.

Alfidi Capital at LicensingLive! 2017.

A guru dude gave the first morning's introductory talk on software monetization. One key takeaway is that software licenses are now issued by dongle, enabling a cloud connection. Take heed of the cloud, folks, because Cloudonomics now applies to software licensing. The whole point of standardizing software licensing is to simplify pricing, speed go-to-market actions, decrease customer service touch points that cause errors, and increase revenue recognition. That's a lengthy menu of advantages for smart licensing. Check out Simon-Kucher and Partners' Global Pricing and Sales Survey for more details on how licensing impacts revenue; I can't link it here but you can seek it on the Web if you think it's important.

The conference got me wondering about who in a software vendor's organization should own the licensing decisions. It should probably not be the CFO. There's a case to make for either the CMO (it's part of the sales and customer service process) or COO (some service functions are a back-office process) to own licensing. I would argue that the predominance of customer contact should place it in the CMO's office, with input from whoever in the COO or CIO touches product R+D. Whoever owns product development must have a voice in its delivery decision. If business lines influence a preponderance of IT spending, it is difficult to argue against licensing being a sales and marketing function. Alternatively, the recent trend towards creating "Chief Revenue Officer (CRO)" positions acknowledges that revenue enhancement takes place in functions outside the marketing funnel. Let's see how organizations where CROs own licensing stack up against those where CMOs or COOs own the process. Yeah, I know, it's complicated. That's business.

The subscription sign-up process has friction points that a CRM app can streamline to ease prospect conversion. Subscriptions and licensing are an obvious source of business intelligence (BI), and I suspect that many enterprises do not fully utilize this source. Managing licenses in the cloud means moving the process into CRM but keeping contact with the rest of ERP, another point in the argument for the CMO to own the process. Generic license manager descriptions sure make it sound like a CRM function. One tip I picked up from a LicensingLive! participant is for the license management team (LMT) to "ship through ERP, renew through CRM." I think that says it all. People who live that quote's wisdom moved their licensing function from the COO's ERP into the CMO's CRM. Remember that the customer's CIO is the primary IT buyer in any organization, and they own the software asset management (SAM) practice to keep cost and risk under control. The buyer's CIO should be perfectly okay with vendors who treat licensing as a marketing-owned function, because it's part of a customer service experience they can understand.

I collected some other random LicensingLive! tidbits right here, in no particular order. Subscriptions and licensing can monetize SDKs and APIs. IDC's FutureScapes reports cover software business model monetization, so licensing practitioners may find that relevant. License management systems allow metered usage, time-based licensing, expiration alerts, and upgrade/upsell opportunities. Anyone who uses an antivirus subscription service is certainly familiar with the automated account alerts that such a system generates for each of those functions. I bet blockchain will be the next evolution of license verification. Licensing BI should pull from renewal rates and usage (by device, seat count, software module function, etc.) to discover unmet opportunities.

I had never even heard of Gemalto before attending this conference. Imagine my surprise to learn that they are a big player in cybersecurity solutions and SIM cards. The company's global market leadership position is reason enough for me to keep attending LicensingLive! I am now much smarter about how licensing adds value. Pay attention to what I've said here about BI in bold text if you really care about making money from licensing. I make it so easy for everyone, thanks to LicensingLive!

Alfidi Capital at Project HeHa Super Happiness Challenge 2017

The world needs to get happy. Project HeHa has a plan to make that happen. The project held a Super Happiness Challenge in late 2017, so I had to trek down to Silicon Valley and see what it was all about. Tech types are certainly competitive, and the whole point of the challenge was to compete to get happy. There may have been some really happy people in the room by the time this was all over.

I see huge liability issues with so-called "increase your happiness" sites and apps that are not part of wellness programs vetted by board-certified psychologists. These apps are prescribing behavioral changes in the absence of clinical diagnoses. Tech should only go so far in adjusting someone's psyche without expert human intervention.

Project HeHa brought its happy sign.

The Director of the MIT Media Lab gave the keynote. I had a lot of respect for that lab during the 1990s when its then-director had a regular column in Wired magazine. Alas, the lab and Wired bear their fair share of blame for hyping the dot-com craze. Anyway, I grokked the speaker's point about how true happiness thrives in a healthy ecosystem that one person's material success will not destroy. It's easy to say that in Silicon Valley, where thousands of multimillionaires have built an ecosystem completely devoted to solving their unique problems. These are serious problems, like how to get around town without touching poor people on mass transit (Uber), how to get high-quality meals delivered to the office so managers don't have to wait in line with workers (meal kit services), and how to meet like-minded high-powered singles for fun times (dating apps). Yes indeed, the ecosystem must enable everyone's happiness, especially if it prices out unhappy lower-class people.

We must have hard metrics that tell us how happy we are becoming. The World Happiness Report asks people how happy they are for the UN's International Happiness Day. It may or may not have something to do with the UN's sustainable development framework. The Happy Planet Index is a UK-based effort to redirect the global economy from making money to getting happy. Its sponsors want a "new economy" driven by a hodgepodge of philosophies other than capitalism. Gross National Happiness (GNH) is a nascent thought trend originating in Bhutan, with support from the Happiness Alliance. It sounds to me like a slogan for Bhutan's tourism sector, or perhaps a distraction from Bhutan's ethnic cleansing of its minorities. The idealistic, sensitive, progressive people behind all of these concepts should ask Bhutan's displaced Lhotshampa if they are happy to be refugees.

Project HeHa brought lots of happy books.

The startups in the Super Happiness Challenge pitched their tech ideas to the assembled expert panel. They all looked happy to be there. This event was the first time I have ever witnessed a panel of judges emphasize a startup's culture as a key to success. Uber's well-publicized problems must be waking up every VC in the Valley about culture. Someone remarked, "Culture is what's left when the CEO leaves the room," and left unsaid is that the CEO's personal example sets that culture. The praise on hand for diversity was another effect of wake-up calls, or it may have just been more lip service and slogans. Folks, I have been under bad supervisors of both genders and several ethnic origins. No one demographic has ever cornered the market on behavior that destroys happiness.

I am not sure what to make of this HeHa thing and its sponsors. I am quite familiar with the format of US-based startups pitching to renowned investors. I am not so familiar with this particular project's creators and backers. I think the people behind Project HeHa have their hearts in the right place, but I have no further curiosity about their mission. Tech gurus all think they can change the world. The hubris of Silicon Valley is that tech has a cure for everything, even what ails human emotions. I am part of Silicon Valley's culture to find fellow Americans who want to grow the US economy. That makes me happy.

Alfidi Capital at TiEcon 2017

I scored access to several sessions at TiEcon 2017. The TiE people are some seriously accomplished entrepreneurs and are among the most well-connected people in Silicon Valley. I had to go check out the scene, absorb startup wisdom, and maybe score some free coffee. My readers know I'm all about free stuff. I just can't turn down free access, freebies, and free knowledge.

I check out the action at TiEcon 2017.

The govtech track was a good fit for my background. More techies now know about how the US Digital Service is changing the federal government's cultural approach to deploying tech, but not everyone knows that FITARA is changing how the government's CIOs do business. The entire software sector has tried to move from waterfall development to agile development and Uncle Sam is finally following through. I sometimes wonder whether the entire US government lives in a "cone of uncertainty," but that's what the private sector calls a trial stage for govtech projects developed with lean startup methods. I betcha there's an app for Scrum contractors. Federal government contractors are accustomed to long sales cycles with more predictable revenues. I think the US can look to other countries for examples of successful govtech adoption. Governments most likely to adopt agile govtech, automated documents, knowledge management, mobile stuff, and whatnot will have similar factors. Francis Fukuyama's high-trust cultural traits (like in Scandinavia), a high degree of 4G coverage, and widespread mobile adoption are my picks for those success factors. The Digital 5 effects with e-Estonia are the kind of template the US needs.

The social impact track showcased concepts that are all the rage among business people who want to harmonize themselves with the universe, or something like that. Large banks and wealth management firms are developing their own philanthropic programs and encouraging employees to volunteer in the community. I have no idea whether their salespeople are smart enough to leverage those functions into referrals from donor-advised funds and family foundations. Impact investors are following the herd of VCs into agtech and are using the UN's Sustainable Development Goals. Here's the UN Sustainable Development Knowledge Platform if you need to get started. Rich people and corporate big shots can use the SDG Philanthropy Platform to select the SDGs that will most enhance their brand images or social standing. A non-profit executive at TiEcon mentioned that using a "network effect" of social peer pressure validates an impact investment pitch with well-heeled people. Yeah, it's all about elite peer acceptance of the latest cool idea they can brag about at social events.

One social impact expert thinks that four key cycles are out of balance: carbon, nitrogen, hydrogen, and Gini. Whacked-out cycles imply investors will favor environmental projects that will help the poor. I have no reason to think any of that is made up, because it sounds like it's all super-advanced science and smarty-pants stuff. I have every reason to think that microloans for 3D printers, Arduino boards, and other small assets can enable a tidal wave of artisanal tech for disadvantaged people, just like microloans for aquaponics in urban food deserts. Crowdfunding platforms could support microloans for lots of small-scale impact projects. It will be tough to pull these things off without US support for the UN SDGs and Paris Agreement on climate change. It will be even tougher without USAID programs for development abroad and US HUD programs for people at home. Deconstructing the US government in a nationalist fit of rage has an opportunity cost of foregone future development.

The TiEcon youth track had tons of stuff that even a middle-aged guy like yours truly could use. I thought I heard one guy at TiEcon say that some Indian regional government entity sponsored a hackathon with 900 participants. That is way more people than I've ever seen the biggest US tech conferences attract. India and China have huge populations and lots of students studying STEM. Quantity has a quality all its own. The US urgently needs crash STEM programs so lots of people can handle distributed processing in machine learning and analytics, just to catch up with our major strategic competitors. IMHO scalable models like Rethinking Engineering Design and Execution (REDX) would get mid-career non-STEM experts pushing youth into STEM projects that quickly solve real problems.

One VC addressing the youth track said successful entrepreneurs have five superpowers: passion, charisma, speed, focus, and "flight" (i.e., mental agility and constant pursuit of increased competence). He's Joseph Floyd, and you can check out his amazing comic book at Silicon Heroes. I read the book myself and it rings every bell for tech entrepreneurs striving to make their mark.

Athletes speak the entrepreneur's lingo. Former NFL player Anthony Trucks spoke about how he put tremendous work into the game he loved before he even knew he would be successful, a great lesson in hustling for entrepreneurs. Olympic table tennis player Lily Ann Zhang shared her humility and passion, and wanted us to enjoy our journey to success. Wow, I'm so glad I stuck around for the inspiration. It pays to be young at heart.

Anyone into biotech should check out Open Source Pharma Foundation and Nutrition International (formerly the Micronutrient Initiative). The impact investors pushing these concepts help enable simple innovations like universal iodized salt that become UN-led policies. One cool idea I heard from these advocates was for a "social DARPA" enabling giga-scale open innovation for billions of people.

TiEcon 2017 was well worth my time. I scored all the free stuff I could find so I came out ahead once again. The TiE people still haven't invited me to speak at their conference. They are really missing out because I have plenty to say about innovation. I also like Indian food even though I'm not Indian, so I will eat anything they put in front of me when I'm the star attraction at a future TiEcon.

Alfidi Capital Attends Bluetooth World 2017

I have always been curious about this Bluetooth stuff, so I had to check out Bluetooth World 2017 down in Silicon Valley. I did not actually see anyone with blue-colored teeth at the conference but maybe I just didn't look closely enough into people's mouths. There's more to Bluetooth tech than just drinking blueberry juice.

Alfidi Capital got a free pass to Bluetooth World 2017.

Some Cisco guy supposedly predicted that the IoT market would be worth over $14.4T by 2023. It's one of those phantom quotes that gets thrown around at these types of conferences. The Bluetooth Low Energy (LE) aficionados here were all about grabbing that big IoT market. There's no free lunch with this tech, meaning there's a tradeoff between longer range and higher bandwidth forcing developers to choose between optimizing for either speed or power.

The "mesh networking" protocol enthusiasts here think it's some revolutionary leap for power optimization over many IoT devices without recourse to gateways or routers. We hear about revolutionary leaps all the time in this valley. IMHO developers for Bluetooth and others techs are way too enamored with smartphone I.D. authentication. Techies never want to admit that bad people can steal or hack phones. Once again, everyone's pitching convenience over security! The immaturity in this valley is mind-boggling.

Bluetooth dominates the wireless audio market and it will probably rule the beacon market in retail store promotion. Online shopping is decimating retail, so beacons have a closing window of opportunity. The next recession will see this window slam shut, and I predict only a few surviving upscale retailers will truly leverage store beacons.

The big push for Bluetooth Mesh as an IoT architecture is doomed to fail if it relies on end users to implement security. It is also unclear how Bluetooth IoT devices and apps will generate revenue. Bluetooth SIG whitepapers should spell out the Cloudonomics metrics that will guide investment. Beacon data generating contextual information about customers will have commercial value once it is aggregated in clouds.

Let me continue on this money metrics theme. Energy use and data processing throughput are measurable costs for IoT devices. Any value Bluetooth adds must exceed the energy and data costs per device. It's also worth asking whether Bluetooth promoters intend the tech to be a completely open source system like ARM, Arduino, and Raspberry Pi. The choice to keep it moving in that direction will affect how developers build apps.

Bluetooth IoT devices will generate enormous volumes of data and metadata, requiring a greater role for machine learning in analytics. Developers should define where machine learning belongs in the data flow from device to cloud. I suspect only a minuscule amount of AI can reside at gateways due to power and processing limits, especially as Bluetooth Mesh pushes these support functions beyond gateways. Developers should focus their AI efforts on the cloud, where power and processing are theoretically unlimited.

It is unbelievable that some people at Bluetooth world think that blockchain will add value to Bluetooth in IoT. The vast amounts of data flows I mentioned above will quickly overwhelm a blockchain ledger. Imagine the constant forking and multiple layers of ledgers to track the new forks. Just say yes to machine learning and no to blockchain.

I foresee a market opportunity for startups based on scraping, collating, and cleansing data from Bluetooth Mesh networks. Venture investors should ask how these startups translate data from Bluetooth and other tech systems into a single format, as long as Bluetooth has competition. Startup IoT devices are amenable to crowdfunding if they have some consumer hook, like a cute beacon base station that invites in-store selfies. I am certain we will hear a lot more about AI and IoT convergence as startups figure out the combo is a hook to get VC funding.

I keep seeing startups jump on the wearable tech bandwagon and Bluetooth World 2017 had its share of starry-eyed wearable devotees. There is very little chance the wearable train will ever leave the station, folks. Wearables will always be way too expensive for most consumers. Battery life is a major limiting factor. Embedded sensors and processors make the products so fragile that they will need delicate care and frequent replacement. The connectivity path loss by distance from embedded devices to sensors is a challenge for devices hanging on a human body. These things will never be a mass-market product, and any personal data aggregated from wearables would likely pose HIPAA violations if released without a user's permission. Security matters "over the air" for wearables.

I asked one tech expert here about how we can design physical plant for maximum flexibility with future digital architectures. The guy said bandwidth is the bottom line, with physical structures built for the maximum possible access points and transmission capacity. There you go, Bluetooth fans, just develop your devices to fit in every building's joints, corners, and shafts.

Anyone who wants a head start on the next big thing should start adding Bluetooth knowledge to their skill set. The IoT frontier is like a gold rush and vacant land rush combined. Proliferating Bluetooth tech that identifies devices should make QR codes obsolete. Startups building solutions that can flex between Bluetooth and other techs will own the IoT future. You heard it here first from Alfidi Capital, thanks to Bluetooth World 2017.

Alfidi Capital Attends SMX West 2017

I am a known regular at every major digital marketing event in the San Francisco Bay Area, including Search Marketing Expo 2017 down in San Jose. I attended this year's SMX West Conference to hear what Microsoft Bing and Google had to say about their search capabilities, but there were other goodies on hand.

Alfidi Capital displays Expo badge at SMX West 2017.

My free Expo badge got me into the main events from the major sponsors, plus all the free candy I could grab during booth pitches. The badge selfie notes the Landy Awards from Search Engine Land  which I was not invited to attend. Someday, these folks will have me hosting their award ceremonies. Mark my words, because my badge selfies are prophetic. The only other photo I took was of some wild equation someone displayed on a pitch slide illustrating online ad spending; it did not come out nearly as well as my badge selfie.

The keynote address pitching Google Assistant was the latest roadshow chapter in Google's plan to take over the world, one household at a time. Google Assistant integrates with Google Home and probably enables other parts of the IoT ecosystem, like Nest. Before you know it, your thermostat will be searching Google for neighborhood microclimate forecasts. I suppose Google's in-home devices and apps will interface with Google's APIs by passing basic data on identity, payments, and geolocations back and forth. Doing this with users' permission requires users to become a lot more cognizant of security. The UI is always the weakest point in security chains. Good luck, Google; you're better off pitching automated security and letting the smartest users post helpful bug fixes online. Actions on Google gives developers hints on how to build for Google Assistant.

The Bing people talked up their ad programs' quality score metrics. I prefer that they raise the quality of their search algorithm if they ever hope to have a shot at taking market share from Google Search. I did like their tip on landing page optimization, where the "root word" of a word with many synonyms avoids a search engine penalty for keyword stuffing.

One big benefit for yours truly was to hear SEO legend Bruce Clay speak at SMX West. The guy has been doing search marketing since the earliest days of the discipline. The FTC has plenty of guidelines impacting search marketing, and everyone advertising in the search sector must comply. I did a Google Search of some combos of "FTC PPC SEO" to see the latest developments. Mr. Clay mentioned WebPagetest as one way to identify fixes that will raise a page's search rank, in addition to Google's long-standing webmaster guidelines. I asked Mr. Clay about how emerging industry guidelines on making Web pages accessible to people with disabilities will affect SEO. He generously answered that ADA Rule 508 (supported by treaty in many countries) enables audible readers for alt-tags of images, and a company can incur huge fines if a US federal government employee uses a website that's not ADA compliant. Lawyers are lining up behind the 21st Century Communications and Video Accessibility Act (CVAA) to pursue liabilities for websites whose images do not have matching alt-tags. The FCC is tracking CVAA regulation updates. Thanks again for the heads-up, Mr. Clay, because Web entrepreneurs like me need to stay out of trouble. Mr. Clay's tips were endless, telling us to mitigate referer spam and UTM injection, and cautioning against malware installation into plug-ins that cause negative SEO results.

The Google free talks were the day after the Bing talks. I scored multiple handfuls of free snacks from both sponsors, in addition to some cool marketing insights. There's tons of online commentary for Return on Ad Spend (ROAS) as an ad performance metric, including calculation methods. Marketers should use ROAS together with CVR, CPA, and CPC in a dashboard format, with conversions traced as "attributions" to each spending metric. I used to hear a lot about remarketing to prospects who fell out of a marketing funnel, and now it's accepted as a given with "dynamic remarketing" as a variant. The ultimate purpose of using data-driven ad buys is to raise CVR while lowering CPA, and the Google people made it clear that this is their ad platform's approach. I don't use Google Merchant Center, because I don't sell any products or run ads, but it's the future for online retailers of any size.

I picked up quite a few other specialized tips from the Expo that probably aren't applicable to my general readership, but they are definitely of interest to me. I have realized lately that sharing too much about my business strategy can be counterproductive. I took a bit longer writing this article about the Expo because I wanted to ensure I had time to update my own SEO techniques. SMX West 2017 was a winner for Alfidi Capital.

Financial Sarcasm Roundup for 02/20/16

It's always a great day at Alfidi Capital. It's even greater when I'm throwing sarcasm at the financial world.




China replaced its stock market regulator with a bank economist. Trading one type of loser for another will not repair foreign investors' lost confidence. The symbolism of a former central bank official watching stock movements is that capital markets must do the state's bidding. They could try putting a panda bear in charge. It would be more fun to watch than a human regulator and just as effective given the system's pervasive corruption.




US law enforcement and Apple are testing each other's legal patience. It looks like so much theater to me. Apple has cooperated with data subpoenas before. It's fairly easy to unlock iPhone data anyway. It's so easy, a caveman could do it. The latest case should not be such a big deal but Apple has to at least go through a few hysterical motions to please Silicon Valley's hard-core libertarians and data geeks. The data privacy crowd simply does not grok the "layer cake" messaging methods that federal regulators often employ with the finance sector, and now with the tech sector. I do not expect the data crowd of Star Wars fans and Bitcoin nut jobs to uncover such subtle public performances.




The heart of Yahoo's operation is going to the highest bidder. The board should fire the CEO for dragging this decision out so long. I would have kept the core business and sold off everything else, but the Yahoo board never asked me to become CEO. It's their loss. I will LOL if Microsoft emerges as the ultimate buyer, getting a bargain for what they should have acquired in 2008. Silicon Valley's smartest people sometimes do some really dumb things. It took a series of geniuses over a decade to destroy Yahoo when it could have been saved under Microsoft.


I still use Yahoo Finance because I like the details. It enhances my net worth. Dumb people in the Valley continue to dump capital into doomed tech startups. Laughing at them all will enhance my well-being.

Financial Sarcasm Roundup for 02/09/16

New Hampshire voters have made up their minds tonight, mostly in favor of outsiders. I have made up my mind in favor of myself, because I can fix all of America's problems with sarcasm.

Silicon Valley startups aren't happy anymore. Unicorn employees are taking off their party hats, realizing that the unicorn they were riding to riches was a donkey in its own party hat all along. Employees who were counting on their stock options to pay for a McMansion are watching those dreams evaporate. Liquidation preferences are the well-connected VCs' way of walking away laughing at everyone who worked hard from the start. BTW, I have never seen the point of the Crunchies awards. A corporation's performance is not like a movie or pop song. The only performance that matters is the bottom line. Net income is the only award that pays bills.

Germany is lining up praise for Deutsche Bank. I recall hearing the same things from Bear Stearns and Lehman Brothers before they fell apart. It's too bad the ECB's bank stress tests weren't really stressful. Examiners could have looked under the hood at Deutsche Bank and figured out what needs fixing. Now investors need to take a look at the entire European banking sector's exposure and figure out who's sitting on powder kegs. Greek sovereign debt is the obvious first place to look, then Chinese sovereign debt, then other emerging market debt, then any rotten bananas stored in these banks' break room refrigerators.

San Francisco property owners are sitting on big bubble values. No one saw this coming, of course, after the dot-com bubble and housing bubble of the last decade. I love the mention of all-cash buyers looking for investment properties. The clueless private equity funds and assorted rich people who bought homes in The City sealed their own fates. I will buy what they abandon at bargain prices.

Voting is awesome. Medieval peasants would rebel against their lords when they didn't like working conditions. Today we have the bloodless option called elections to voice displeasure with Establishment elites. I would seriously consider voting for a candidate who formally adopts sarcasm as a campaign platform.

Clueless Tech Scene Partying Away Super Bowl 50

You may have heard that Super Bowl 50 is playing in the San Francisco Bay Area this year. I still think the football team that used to call San Francisco its home should change its name to the Silicon Valley 49ers, but that can wait.  The weekend build-up to our nation's prime secular festival transformed part of downtown San Francisco into something resembling a clean, normal city. I had very little to do with the festivities other than accept an invitation to a pre-party. The tech startup sponsoring the party had a chance to display competence and blew it.

The startup's app is completely dependent on data feeds and user interactions from another well-known tech company. The relationship resembles Zynga's early dependence on Facebook but even more tenuous and economically unjustifiable. I asked this particular startup's marketing person if they could survive without being parasitically attached to their host body. The person had no idea. I asked about their monetization strategy. They had none. I offered my observation that startups devoid of monetization paths typically disappear rather quickly. The twenty-something marketing person had no concern at all, as if the capital entrusted to their startup by early-stage investors was a lifestyle gift.

Ladies and gentlemen, the entire second wave of dot-coms that are about to crash and burn is populated by the kinds of people I meet at these tech mixers. Many of them have no business expertise, no planning ability, no marketing sense, and nothing besides some mediocre tech skill they extrapolate into a flashy single-purpose app. I did not see any point to this particular pre-party other than to have a good time on someone else's dime. I can even assess the startup team's immaturity by how ready they are to start their sponsored party. Chips and booze are not hard to come by but their late arrival reveals a startup founding team that has never performed basic logistics tasks. Hey kids, throwing a party for partners, analysts, and investors is not as easy as pulling a beer out of your parents' fridge.

Super Bowl money really cleaned up this town. The City finally found someplace to put the homeless this weekend besides in the way of tourists. Many of the tech people "working" their way through Silicon Valley startups stand a good chance of becoming homeless themselves in the next couple of years. Their lack of business acumen gives me short-sale opportunities, plus open social events where I consume free food and booze. I can eat and drink any of them under the table.

Financial Sarcasm Roundup for 01/31/16

Sarcasm on Sunday is way better than attending church. You could listen to some preacher lie about the nature of the universe, or you can listen to me tell the truth about finance.

Alphabet and Apple battle it out for the valuation world heavyweight championship. Both companies are symptoms of the Silicon Valley tech bubble. Investors have chased these stocks because ZIRP made savings accounts look stupid. Apple's (AAPL) P/E is deceptively low at 10 and Alphabet's (GOOG) is really high at 31. Both companies depend very much on smartphone users replacing costly phones more often than necessary in the developed world's saturated markets. Financial advisers who toggle their portfolio optimization searches with "high risk" aren't doing their risk-averse clients any favors by selecting overpriced tech stocks.

The IMF and its lending cartel will review Greece's bailout progress. It's really sick how the world's most important financiers play "extend and pretend" with a country that has no interest in paying its debts. Forcing losses on creditors would clear up credit quality questions a lot faster than extending maturities. I would have hung the foreclosure sign on the Acropolis by now but the IMF never called me to ask for advice. Athens should hire me to fix their problems if they can pay me in something other than gyros (which I really like to eat BTW).

Big SIFIs are cutting the biggest deals with the SEC to settle dark pool allegations. I have always wondered why investors deliberately walk into something they know is dark. The banks telling investors they will get the best execution in dark pools are also the same source of prime brokerage credit for HFT hedge funds trading in those pools. Willfully blind investors, duplicitous banks, and greedy HFTs all jumped into those dark pools to rip each other off. The traditional investors are always the dumbest money in the room, so of course they got taken to the cleaners.

I told you this was better than a church sermon. I'm more entertaining and honest than any religious leader. I should start my own religion so people can properly worship me.

Silicon Valley Pivots From Collusive Wage Fixing to Immigration Wage Arbitrage

It was not that long ago that news stories broke about how the late great Steve Jobs brokered a collusive wage-fixing agreement among Silicon Valley's most powerful companies.  Almost all of the top players signed on because they wanted a ceiling on the compensation for their most talented workers. Silicon Valley has since found a better way to suppress tech workers' wages.

Tech big shots aren't satisfied with keeping their most productive rock stars in line.  They want to push everyone's compensation down by encouraging the immigration of skilled tech workers who are accustomed to far less compensation than American-born STEM professionals.  Temp workers on H-1B visas can come here for training and then return to the tech employer's branches outside the US. The foreign workers will earn much lower compensation there. Global wage arbitrage will drive American tech workers to compete with those lower wages. The Silicon Valley-funded Fwd.us pushes for a version of immigration reform that will open the door wide to permanently high immigration in STEM labor categories.

The legal settlement in the wage collusion lawsuit cost big companies $325M.  The total funding for Fwd.us so far is much less than that sum.  OpenSecrets.org's listing for Fwd.us notes that they spent $720K on lobbying in 2014 and $420K so far in 2015. That's a tiny fraction of the $50M they supposedly raised according to re/code, begging the question of whether they spent the rest on TV ads or other things that have nothing to do with adding grassroots pressure to a lobbying effort. Experienced Washington hands would have told them to engage the US Chamber of Commerce and other inside groups to identify which members of Congress are most amenable to a pro-business argument. Better luck next time.

Billionaires don't like paying a premium for highly intelligent people.  Those people would then have the financial resources to start competing firms on their own.  The Valley's mandarins would prefer that their most skilled professionals remain wage slaves motivated by non-cash perks, like gourmet food courts and on-site yoga classes.  The road to neofeudalism will be paved with uncontrolled immigration. I am all in favor of sensible immigration reform that fills true labor shortages and offers illegals some kind of safe status. I just don't think Fwd.us has a clue how to make that case in Washington, if they're so inclined.

Financial Sarcasm Roundup for 12/21/15

Here comes the special Christmas holiday 2015 edition of my sarcasm. Tonight I spent a brief interlude at CoInvent's holiday party at General Assembly's San Francisco office. The party was fine and I got my fill of free booze. I can't complain about parts of the startup ecosystem that competently execute their business models. I can only blast some sarcasm at other parts of Silicon Valley culture that are not living up to their reputations.

I spoke with one longtime contact at tonight's party who sells office furniture. He remembers the 2001 dot-com crash all too well, and how easy it was to pay bargain prices for like-new high-end office furnishings. I mentioned the recent deflation of a few unicorn startups, you know, the ones with undeservedly high valuations. I'm pretty sure he can expect loads of office bargains coming his way soon as other unicorns fail to deliver on their early investors' expectations.

Everyone I met had something to pitch. Anyone who arrives at these types of things without a pitch should think of one really fast. My pitch was "I want free wine," and lo and behold the free wine materialized right in front of me. That was fast. I didn't even have to ask. I did ask for free food but none was forthcoming. Only one of my two pitches was effective.

The CoInvent holiday party intended to raise money for Charity: Water. I am all in favor of building clean water projects in developing countries. Before you know it, those underprivileged folks will be watering lawns and washing mud off SUVs just like we do here in the U.S. We can then teach them something about water conservation after they've wasted all of the water they never knew they could pump.

San Francisco tech events just aren't the same if I'm not gracing their presence. Techies flock to hear my wisdom when I attend anything. I celebrate the winter solstice with my own personal Saturnalia that lasts as long as I feel festive. Ancient people worshiped the gods of nature. Modern people worship the god of tech and finance . . . that would be me, yours truly, Anthony J. Alfidi.

Mastering The Cleantech Open Global Forum 2015

I have attended the Cleantech Open's events for three years now and I always come back for more. I had to jump into the CTO's Global Forum 2015 last week to see what this year's class of startups had done. Badge selfies are my bona fides because they prove I am not some AI bot randomly generating blog content.

Driving down to the CTO's home at GSVlabs is always worth my time. The co-working trend is now a serious thing. Startups eschew privacy and security by taking open-space collaboration to an extreme. I think the next trend could be co-working outdoors, where startups can plot their huge markets on picnic tables. Nah, just kidding. I wouldn't want to do office work outside because wild animals like bears and coyotes run around out there looking for people to eat. Smart VCs won't fund a startup where the founders risk getting devoured by packs of wild beasts.

The Investor Connect speed-dating round had a table reserved for yours truly, the CEO of Alfidi Capital. Someday I'll be #1 but this time I was at the #2 table. I am usually the #1 genius on hand wherever I go in life. Most normal people recognize this as soon as they meet me. Serious VCs and angel investors were at the other tables and I had the chance to interact with a few of them during breaks between meeting startups. Sharing insights helps me understand how much startups learn during their early phases.

I will share what I learned from the startups I met at my table. These are general impressions that cover many verticals. Addressing a scalable market means going after a big demographic whose price points and buying power are easily understood. Going after boutique markets with fragmented demographics (like organic farmers, for example) means a startup's marketing channels will be less efficient. Lowered efficiency in anything, especially finding a marketing channel, means a startup needs a longer runway to profitability. Proprietary technology must be difficult to duplicate. A simple device with common components is easy for a competitor to reverse engineer.

I also attended the CTO's Celebration Day in San Francisco's Herbst Theatre. It was my first visit to the Herbst since the Veterans Building's renovation. The drinking fountains on multiple floors actually work now after several years of inactivity. The downstairs bar looks pretty snazzy. Dag-nabbit, I should have taken photos.

The winners and finalists ran the gamut of tech. I heard pitches from startups doing biomass gasification, carbon nanotubes, pollution tracking, and SaaS analytics. I can't connect with businesses outside the United States because my personal prerogative is to only work with companies located in the US that American citizens own. I'm sure there are plenty of those to find.

Famed VC Ira Ehrenpreis gave his keynote that doubled as a highlight reel of his favorite investments. I'm pretty sure I heard him give this talk before at a conference down in Silicon Valley at least a year ago because I recognized many of the slides and themes. He told us that the best time for tech investing is right after a sector bursts its bubble, because the final survivors are in the best position to be long-term winners. I think the solar sector is still in the middle of its shakeout, so anyone making panels or modules after the last low-quality Chinese producer goes bankrupt will be in a sweet spot. I also think solar suppliers that adhere to all of the DOE EERE SunShot Initiative's standards will have an easier time convincing developers to include them in supply chains. Ira also mentioned the "second bottom line" importance of ESG criteria, another set of guidelines our aspiring startups must adopt if they want to attract impact investors.

I noted one concluding quote with interest: "There's no such thing as a bad contact, but there is such a thing as a bad way to follow up on a contact." Well, I had plenty of bad contacts when I worked in sales, and plenty more when I was between jobs trying to make a career for myself. There really are tons of bad people in the world and they succeed in spite of themselves. I avoid those types because I'd rather meet the ambitious folks populating the cleantech sector. If I get rich after investing in one of these startups, then I could finally afford to be a big-shot sponsor of the Cleantech Open.

Glimpsing IBM Watson's High Tech Analytics In Silicon Valley

Silicon Valley types want me hanging out at their business events. One such event last week brought me down to one of the Valley's private venues for an IBM Watson presentation. I'm not the target clientele for this Big Data analytics solution but I had to check things out. There was no suitable on-location backdrop for my badge selfie, so I had to take the photo below at an undisclosed location.

I signed up to hear their two tracks on procurement intelligence and trade-off analytics after the main pitch. IBM people get the API economy. I heard them pitch their API developer ecosystem at Oracle OpenWorld 2015, and now it's good to see the Watson engine in action. The Alchemy Language API looks like an incredible business intelligence (BI) tool. The "news explorer" live link diagram showing connected news stories would be excellent for PR or marketing people, or for open-source intelligence (OSINT) practitioners.

The main pitch dude's recommended reading list included a book on machine learning, but I couldn't write down the author's name from where I sat. Amazon lists plenty of machine learning best-sellers, so my local library must have one. I did capture Pedro Domingos' The Master Algorithm and Provost/Fawcett's Data Science for Business from his list, unless I copied the titles incorrectly. I have so many books to read already that adding these will push the completion of my business reading list well into 2016. That's what it takes to demonstrate thought leadership, and that's why I get invited to these events.

One IBM guy introduced his "Cognitive Computing Index" describing multiple ways for human operators to educate maturing AI systems. IBM suggests Watson's clients iterate revisions every 90 days for whatever they have the system compute. Iterative approaches to refining BI output are supposed to maximize the BI's monetary value, and seat count users should see this value in their commission revenue.

The trade-off analytics session demonstrated Watson's Pareto optimization, graphical outputs, and social media stream matching. The recommended pathway records are a useful audit trail for some data miner to explore. I bet that data mining the faulty pathways will reveal how the top 20% of data scientists in an enterprise are making 80% of the correct decisions. That would be some useful Pareto optimization when performance bonus allocation time comes around.

The procurement intelligence session was all about making purchasing people into knowledge workers. I remember how I did purchasing as a junior supply officer in the US Army back in the late 1990s. I searched the Web for three different vendors and picked the one with the lowest price. It was too easy and probably sub-optimal. The difference today is that Watson is supposed to make research on prices, vendor choices, and spending history a Big Data effort. If AI truly integrates internal and external data feeds as advertised, then it's a bona fide ERP revolution. If users comprehend Watson's word clouds, heat maps, and visualizations, then it's also a knowledge management (KM) solution.

I keep hearing Silicon Valley people talk about how they increasingly prefer workflow ERP solutions over managing legacy files. I told several IBM reps at this event that they will have to integrate workflow data signatures into the internal feeds Watson ingests if they want to stay relevant. It will still be a challenge for developers to build APIs that handle unstructured data, especially if the enterprise has no data warehouse or data lake aggregating external data feeds. The best developers will figure it out. I would figure it out but I'd rather fiddle with financial applications. Watson and other AIs are supposed to be the "easy button" for data transformation once operators are comfortable educating the systems. The AI revolution means everyone becomes an amateur data scientist.

The Haiku of Finance for 11/09/15

Impressive venture
Investors fully fund it
Pay for startup hype

Never Shortchange Yourself In Tech-Land

I really got into a tussle yesterday on my friend's Facebook wall. Her immature "friends" were endorsing the non-cash benefits of employment at a very large, well-known tech company in Silicon Valley. I argued for ignoring the non-cash amenities and for prioritizing compensation. I was the lone voice crying out in the wilderness. I am right and everyone else is wrong.

Silicon Valley techies love to think of an employer as a substitute parent. Tech firms encourage this juvenile mentality with free food, on-site gyms and masseuses, video game break rooms, and other nonsense. The global firms with billions in revenue can afford to spend on this baloney. Startups that can't afford it with organic revenue convince their venture investors to subsidize them, like adult children whose parents cover their rent. Replicating a fun college campus is supposed to incentivize creativity. I think it's a misguided but unfortunately effective way of keeping highly productive workers psychologically attached to a big employer.

The workers who fall for this Silicon Valley wage slavery are usually highly logical in their daily work. It makes the seduction all the more befuddling until we consider behavioral economics. Humans are not as rational in making decisions in their personal lives as they believe themselves to be. We give more weight to recently acquired information, for example, than we should give to more thoroughly proven information learned at various points. The behavioral habits inculcated from daily trips to the free "campus" cafeteria and free yoga rooms are hard to break even when a competitor offers a five-figure cash raise.

I'll work the math for my super-smart Silicon Valley friends. Let's say I'm weighing two job offers, one with $20K more than I make now and the other with no raise but free food. Eating the equivalent of a $10 meal three times a day is a cost savings of $30 a day, which BTW is also a couple week's worth of groceries for the few Silicon Valley people proactive enough to plan their own meals like grown-ups. Anyway, I have digressed. The $30 savings over about 260 or so actual work days per year (not counting the weekends or a few holidays) comes to about $7800 in annual savings. Any proposed offer from a competitor that exceeds that $7800 after taxes and commuting costs is a step up in lifestyle. I would rather take the extra $20K if it meant I'm back to buying my own meals, because my penchant for cheap groceries means my bills will be much less than that $7800 meal cost avoidance. Too many very smart Silicon Valley engineers fail to run those numbers when weighing job offers. They stick with the free stuff and their employers know it. The HR people hidden on these big tech campuses know the math and that's why spending on free food matters more than cash bonuses.

Non-cash benefits are always ephemeral. Companies that hit a rough patch for a quarter or two cut back on frivolous expenses first, before they cut more important things like ad spending or the IT budget. They cut those other things too in recessions, right when they're about to cut people. The non-cash benefit of a corporate reputation also means just about nothing. The prestige of having a high-flying company's brand name on a resume means nothing without the personal pedigree to back it up. Plenty of people went to work at Webvan, Enron, Bear Stearns, and Lehman Brothers with high expectations before those firms collapsed. Top programmers are in demand because of their reputations earned at big firms, startups, hackathons, and academia. They are their own brand. I have a couple of top financial brands on my resume that mean nothing because elitists look down their nose at me. Prospective employees who prioritize a company's prestige and empty promises over cash have their priorities backwards.

I can't tell my fellow Bay Area professionals how to live their lives or spend their incomes. I am sometimes sad when I realize that so few of them think like me. Many STEM graduates work hard solving complex problems and not all of them are highly compensated. The enormous cognitive load of coding, designing, and diagramming all day must leave little energy left on the charter bus ride back home to think about gaining financial advantages. Maybe these top-notch Silicon Valley producers are just as immature as the spoiled brat trust fund kids and permanent adolescents I've met in San Francisco. They all need to get spanked. Adults work for money because that's what pays rent, taxes, insurance, college debts, and every other bill that would otherwise bring bankruptcy if left unpaid. Cash compensation enables wealth creation that accelerates retirement and makes our final years of life comfortable. San Francisco and Silicon Valley need to grow up. Part of growing up is learning not to sell yourself short. I will never shortchange my financial future in exchange for the phantom freedom of high-tech campus paternalism.

Blasting One Tech Conference That Yanked Me Around Today

I made the mistake today of trusting some small-time tech conference promoters to be squared away. We all make mistakes and this one was mine. One tech conference promotion team shall remain publicly nameless but they shall live in infamy in my memory.

The organizers contacted me last week to confirm my attendance. They even registered me as a "speaker" but had no slot for me to fill. I asked them what they wanted me to do, and with less than 24 hours left before the event kicked off they wanted me to moderate a panel on a topic that was completely unrelated to my background. I politely declined. When I drove all the way down to Palo Alto this morning, they had no proof that I was even registered for the conference. The final red flag about their competence came when they asked me to pay full price for entry. No way, folks. I politely declined and then departed.

The lessons for conference promoters ought to be simple. When you invite speakers, schedule them to address subjects that reflect their professional competence. Keep records of your invited guests. Above all else, the people you "invite" to appear by virtue of their expertise should attend free of charge. I know that words like "invitation" mean different things to different people, but to analysts and subject matter experts like me they mean a host seeks the benefit of my presence. Social media "invitations" and other forms of marketing outreach are legitimate ways to attract paid guests and clients seeking publicity. I get that. I don't get being labeled a speaker, panelist, or moderator who is expected to pay up merely to share my own expertise. I will not pay one penny to hear myself think out loud.

I have accepted free admission to plenty of conferences that saw value in my coverage as an analyst or participation as an expert, even if I said something controversial during or after the event. Tech conferences like speakers, and I like speaking. The two forces should be naturally congruent. Conference organizers who schedule me in advance and let me shine are invariably pleased with the result. The ones who wait until the last minute, offer me nothing, and then require me to pay them are not the ones I need in my life. Please don't play games with my schedule, people. It invites the wrath of Alfidi Capital.

API Monetization And Distribution At Integrate 2015

I scored a seat as a panelist at Integrate 2015, so I had to check out other parts of the conference to see what's new in API World. There's more to app ecosystems than hackathons and gamification. Apps need information fed from the remainder of the data supply chain: data warehouses, SDKs, and APIs.

Deep linking into the app ecosystem is the brand new way of getting content to searchers. I think "discovery service" will be an emerging buzzword for content marketers. App distribution has been one-to-many so far, unlike Web searches matching many-to-many. New app store indexing with knowledge graphs and search will bring apps into many-to-many distribution. The deep linking experts on hand at Integrate 2015 claimed that cheap and free discovery drives app downloads, but they had no examples of success. Paid social media promotion still seems to be a key to driving app downloads. Aspiring startups building APIs and apps must still budget for marketing and raise capital with promotional milestones in mind.

One speaker shared some pretty good insights on the API value chain. Adding details after basic data implies adding value. The API and app have different price points, so the "spread" between them is the added value. The speaker identified different business models based on who pays for distribution. Each model had several different permutations of pricing structures. The cool thing about the broader distribution models is that they allowed for multiple price points. Developers can get paid with affiliate revenue sharing, like the way Uber's API gets revenue when partners in travel and tourism use it to make their own apps. Subscription-based fees for units or tokens tracking API calls resemble the pricing plans we recognize in our smartphone data plans. The acceptance of subscription plans for API calls comes when API providers have large numbers of APIs addressing many segments. The biggest revelation for me was the high cost of hosting APIs in the cloud if they generate high data transaction rates. Hybrid cloud solutions may be best for Big Data providers, with high-volume transactions hosted on premise and other less intense data hosted in the cloud.

The developer experience (DX) is another term that belongs with UX and UI. Cool incentive promotions can generate developer buzz. Displaying an API with pleasing aesthetics means app developers will find it attractive and give it social proof. One piece of conventional wisdom floating around Integrate 2015 is that it's okay to raise prices until some portion of your customers complain, provided you understand your API's sales cycle. I think raising prices until 20% of your customers complain validates the Pareto principle. The other 80% won't notice the price increase because the API relationship isn't significant enough to them.

Proprietary API certification means little if it does not reference some independent computer sector standard. Do a Google search of "API certification" and see the links related to petroleum engineering, not coding. The data sector covering SDKs, APIs, and apps is still so young that it does not have a standards body. The elegant solution would be OASIS standards for API call testing, installation, configuration, documentation, escalation processes, and versioning triggers for re-certification.

API developers must find distribution channels. One successful developer insisted on using a universally accepted protocol. I suppose JSON fits the bill because a lot of developers at Integrate 2015 were enthusiastic about it. Partner networks matter, and so does saying "no" to the wrong partners who want distribution for the wrong business reasons.

I'll conclude with a brief overview of my own participation on one of the panels. I shared the stage with Nicole Bryan from Tasktop and Salil Deshpande from Bain Capital Ventures to discuss venture capitalists' perspectives on investing in API-centric startups. We explored the relationship between monetization and distribution, some changes in the economic landscape that make APIs viable as a core business model, the stories an API startup can tell to make outsiders care, and some standout aspects of an API business model that we would notice in a format like Integrate's startup challenge. The audience of developers and tech aficionados needed to hear the back-and-forth of both genders on a panel representing tech practitioners, venture investors, and the analyst community. I thought our panel was more well-attended than a couple of the main stage headliner talks. Our audience asked sharp questions relevant to launching an API startup. This is the kind of high-level attention developers can get when they attend conferences like Integrate 2015.