Alfidi Capital at DevTech Strategy Summit 2017

I attended the DevTech Strategy Summit in San Francisco. I don't recall ever seeing this event before so I couldn't miss it, especially because it's from the same organizers behind DeveloperWeek. The developers have their own show for practical tools, and this one was for executives bringing a bunch of enterprise functions together. Check out my badge selfie below and let's get to work.

Alfidi Capital at DevTech Strategy Summit 2017.

The dialogue between developers and executives got some needed attention. Developing mobile apps in a vacuum makes no sense if it ignores a market segment's pain points. Imagine how Customer Development works for a dev-focused product, then imagine engaging prospects at different levels of the marketing funnel. Use lots of imagination, or borrow someone else's imagination if you're left-brain dominant and can't compensate.

Developers still get hung up on designing the perfect product if they think budgets are unlimited, which happens when overly generous investors support weak managerial discipline. Project leads must show the Cloudonomics metrics demonstrating the lower cost and higher ROI of their preferred solution. My regular readers know that I have harped on Cloudonomics many times as a proof-of-concept guide, yet many developers dreaming of startup riches still don't take it seriously.

The CIO is still the ultimate purchase decision maker for tech not available in-house. They are especially important in minimizing buys of incompatible shadow IT. The key to their success is evangelizing developers who have the authority to recommend software buys. CIOs need Cloudonomics more than anyone but I suspect most don't even look for the metrics. Computer science programs need to start teaching a business-related elective covering the ROI of project development.

The DevTech panelists came with some best practices for executives. Using searches with Bayesian logic in Stack Overflow can measure developers' engagement with a topic by showing how quickly questions get answered. Tracking GitHub updates and following Hacker News are other ways to assess developers' engagement. Executives could also track my blog, for crying out loud, because I discuss the hottest tech sector developments ever.

The debate on open source versus closed source development got me thinking. I believe a freemium pricing and distribution model precludes a choice of closed-source architecture, but a 100% open-source solution is hard to monetize. Yeah, I know, open-source monetization must really be ad-based rather than fee-based.

The town hall toward the end reminded us that the big software companies carry the lobbying burden. Aspiring tech executives in the room should start building their lobbying expertise now by joining tech trade groups and tracking public testimony offered to regulators. Venture capitalists still don't understand devtech business models, which doesn't surprise me since I witnessed the cloud / mobile / Big Data convergence force multiple startups to pivot. The VCs are reluctant to invest in startups that often see little revenue traction from a large customer base. They do want to see KPIs like customer acquisition cost (CAC) and retention, which enables them to see how a prospective startup investment compares to known successes in their portfolios.

Guy Kawasaki always said sales fixes everything, so I can understand such VC reluctance to go for startups with nonexistent traction. The metrics in devtech also apply to other cloud/mobile app startups, so there's nothing surprising about a corporate VC asking devtech people to justify their CAC.

The DevTech Strategy Summit was a winner for any startup executive running a mature business. Anyone pursuing an acqui-hire as a specific strategy can probably find a niche in devtech. I am now such a regular fixture at Silicon Valley's biggest developer events that acqui-hire entrepreneurs are going to see me. Let me know what's working for you, tech community, and whether you benefit from my interpretations.

Mobile Monday's Cybersecurity for RSAC 2017

I have been poring over my notes from several recent business events I have attended, and I would be remiss if I did not share some key lessons from a Mobile Monday event that coincided with last month's RSA Conference 2017. I take my time to get this stuff right. The MoMo Silicon Valley team convened a cybersecurity panel on February 13, and I had to be there after being too busy too attend their sessions in 2016.

Alfidi Capital always notices Mobile Monday's cybersecurity events.

Cybersecurity startups are going to be a hot new investing trend for Silicon Valley venture capital. I now come away from these cybersecurity events convinced that startups with the strongest tech often have people with US military or intelligence community backgrounds. Those career fields are inundated with cyber practices that have life-or-death outcomes, so the challenge of running a cyber startup should be a piece of cake for those veterans.

It's great that the federal government sees the leverage it can apply in Silicon Valley's growing cybersecurity. Your tax dollars are hard at work in the DHS Silicon Valley Innovation Program, a companion of the Homeland Security Innovation Programs (HSIP). The assessed TAM for cybersecurity is over half a trillion dollars according to DHS, so expect a flood of VC investment into the types of portfolio companies that get some US government seed capital. Some VCs are of course stage agnostic investors, but they recognize that different stage companies have different needs. I despair to think that heavy late-stage funding still convinces some startups that they "need" gourmet catered lunches and expansive campuses.

The VCs on the MoMo panel liked retail and financial service verticals as target markets for cybersecurity startups, but I wonder which end of the enterprise is the best focus. I have long believed that apps are much more vulnerable to security breaches than enterprise infrastructure. Millions of people can download an app and ignore its security protocols, but an enterprise's internal geometry may have only a few thousand entry points to monitor (depending on employee headcount, server connections, etc.).

Rest assured that the US government is hard at work creating cybersecurity standards. The NSA's Simon (for hardware) and Speck (for software) ciphers level the playing field for new cyber entrants. I expect to see them mentioned in GitHub documentation for new IoT security apps. I also expect the smartest startups to identify leading managed security service providers (MSSPs) as targets to become their CustDev cases and early channel partners. A few Google searches reveal widely available lists of MSSPs.

There must be a market opportunity for a knowledge management (KM) cybersecurity dashboard that integrates different security tools and prioritizes a CISO's monitoring efforts. The difference between this type of enterprise solution and your PC's anti-virus solution is its integration of the cyber dashboards in use at all levels of the enterprise. The CISO should be able to monitor every business unit's IT tools and use gamification to encourage compliance. I look forward to finding a startup that can solve a CISO's monitoring pain points.

If anyone can figure out how to make cyber ideas work, it's the US government veterans I mentioned above who depart public service for the wilds of tech startup life. They should know what right looks like even if they got frustrated from working with things that obviously went wrong in the government. I hinted in my article on RSAC 2017 that I did not want to tip my hand about leveraging openly available public resources to launch tech startups. I know what I'm doing here, and I know how to get the right people involved. Keep watching the genius of Alfidi Capital for next-generation cybersecurity amazement.

The Haiku of Finance for 02/20/16

Apple theater
Pretend to protect data
Convince amateurs

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 02/13/16

Most people go out for fun on Saturday nights. Staying home to publish sarcasm is my idea of fun.

Apple is about to throw new versions of its hottest products at consumers. I believe Apple's most fervent customers are the same kinds of too-rich, too-dumb people I meet at San Francisco VIP events. Only a moron pays a premium every 18 months for an updated product with only incremental capability upgrades. Young urban trendies have to show off shiny gadgets because they live for today. They will have no retirement portfolio for tomorrow.

More banks will face Libor manipulation action. The ones that were too dumb or too greedy to settle early with regulators are going to bite the bullet. Only dummies and crooks try to rig markets anyway. The lack of Libor transparency cries out for an international regulatory solution. The World Bank and IMF are welcome to call me anytime if they want my help.

Greece's weak pension plan jeopardizes its chance for more bailouts. The story never ends. Greece ran out of game theory options last year and is now prostrate. Angry farmers who don't like contributing more to their pension funds will be even angrier when their future pensions won't even buy a gyro. I don't mind making jokes about gyros because the rest of the world makes fun of American hot dogs and hamburgers.

Sunday may shape up to be even more sarcastic than Saturday.

CIOarena IT Security Inspiration 2015

I secured a last-minute invitation to CIOarena's San Francisco conference last week.  I had to skip the last day of Apps World North America but that turned out to be the right call.  The CIO types held forth on security policies that enterprises must address.  I did not see any signs worth photographing nest to my handwritten name badge, so forget that Alfidi Capital tradition this time.  Just imagine the InterContinental Mark Hopkins San Francisco in all its glory.  My thoughts below reflect what I learned from the speakers.

I get my normal fill of updates on advanced persistent threats (APTs) through military-related news.  The private sector tracks the same open sources.  IT gatekeepers should think hard about what they reveal on LinkedIn to avoid becoming social engineering targets.  The APT attack process is sufficiently well-defined that proactive IT people can monitor data exfiltration and shut down exposed portals that display abnormal usage spikes.  Machine learning means automated IT security audits should develop predictive abilities after some critical mass of iterations.

I love the term "managed services."  It ranks right up there with "paradigm shift" and "game changer" for scoring points in after-work drinking games.  Outsourcing routine IT ops means inexperienced contract managers can hand managed services over to high-cost outsiders.  Watch out when senior managers start using the term in strategic planning when they need to cut headcount.  Enterprises seem to have challenges maintaining a robust configuration management database (CMDB).  I don't see how any outsourcing makes that challenge easier to handle.

I noticed that no one at the Apps World talks I attended mentioned any preference for HTML 5 or Javascript.  They may be keeping some tactics close to the vest.  I did not discern a clear preference at CIOarena either.  The choice of one over the other is probably clearer after a Cloudonomics analysis.  Listen up, IT people.  Cloudonomics is to IT/cloud/mobile what modern portfolio theory is to finance.  It is the defining framework for making asset allocation decisions.  Cloud and mobile pros must prove they can do the math before settling on a favorite tech.  CIOs can earn credibility with CFOs by being more agnostic toward programming choices.

I have no elegant solution to identity management problems.  Managing identities with MS SharePoint was simple enough when I was a knowledge management officer several years ago.  I can only suggest a way forward.  Building a 2x2 matrix to optimize identity management for each business unit would be a start, with number of identities on one axis and number of devices on the other axis.  The SBUs in the quadrant with the most of each get the closest scrutiny.  I also have no elegant solution for data lifecycle management.  Industry standards for data lifecycles and analytics frameworks are widely available.  Lifecycles will compress as speed becomes the critical factor in processing huge Big Data volumes.  High performance computing (HPC) will be a growth industry, given the need for speed in more organizations handling Big Data.

CIOarena met its stated goal of furthering my educational needs.  I can't speak for the other attendees, who did not appear to be taking notes.  I'm usually the only person who takes notes at these things.  I have no idea why other humans have so little interest in documenting what they know for further reference.  Maybe some top corporate people think they can blow through their careers without ever applying what they are supposed to learn.  That is not my style.

Mobile Monday's Geospatial Big Data In Silicon Valley

I trekked down to Silicon Valley last week for my regular taste of Mobile Monday.  The Silicon Valley campus playing host to this particular event had one of these post-modern water sculptures out front.  I see these things so frequently now on such "campuses" that I'm pretty sure the big tech firms are trying to subtly outdo each other with understated water installations.  The drought is still on in California but these displays all claim to use recycled water.  Okay, whatever.  I did not take any photos of the water display or its sponsor.  You'll just have to believe me when I say I was there.

Anyway, geospatial is shaping up to be another next big thing now that all the other next big things - Web 2.0. cleantech, social/mobile/local - have run their course.  The leading geospatial player on my radar is DigitalGlobe.  You may have seen their work cited in open sources when US military officials with NATO used DigitalGlobe photos to bolster their argument that Russia was using military force in Ukraine.  The DigitalGlobe rep who spoke at Mobile Monday made a clear case for mining geo-linked data sets.  Making those data sets available to retail users in real time will take a lot of bandwidth.  Fortunately for DigitalGlobe, plenty of users love playing with high-resolution maps.

The experts on hand discussed geotagging as a user engagement strategy.  The good news for them is that incentivizing users to tag images is easy with some gamification experience.  Users who score can unlock "expert geoanalyst" badges and build their reputations in open-source imagery analysis.  Geodata startups should pay attention to exploiting all the free labor they can get in finding a mass audience for their analytical solutions.  The best freelance analysts will eventually demand to be paid premiums, much like programmers who become repeat hackathon winners.  You heard it here first at Alfidi Capital.

I am not aware of any accelerators specifically focused on geospatial startups.  I expect that to change as companies like DigitalGlobe succeed in monetizing crowdsourced geodata.  One of the expert panelists mentioned how years of map data add context to whatever users do with a download.  I would add that years of embedded links from news articles and social media feeds can add more searchable context if the download sets were amenable to enterprise knowledge management solutions.  The difference between layering and filtering data matters little to retail users but becomes more salient for knowledge managers farther up in a large enterprise.

It's time for some personal stories that add color to the geospatial sector.  My own experience with geotagged image data dates to 1996, when I was on active duty in the US Army.  In the '90s I worked with systems that used scanned 2D maps overlaid with crude geotags.  The geotags did not connect to embedded data and the maps were poor simulations of 3D terrain features like elevation changes.  The military systems I worked with since 2008 showed vast improvements in both 3D rendering and embedded links.  I know from experience how enterprise search offers a compelling way for geodata to add value.  In other words, I know what right looks like.

Here come my predictions for the geospatial sector.  I expect crowdsourced geotags will be worth more if they are segmented by user competence.  Data providers should ask taggers to initially self-identify their expertise in recognizing image anomalies or data elements.  It's worth investigating to see if gamifying mass involvement will truly identify skilled analysts.  I expect data purveyors to pursue bifurcated pricing models, with one payment track for enterprises and a much cheaper track for individuals.  It will look like software pricing strategies that chase seat counts, but the winning startups will know how to cover the variable costs of processing and storage.  Geodata startup founders must read Cloudonomics if they want to win.

I would not be surprised to see the emerging relationships between geospatial sector firms and Big Data firms to lead to mergers.  The VCs chasing geospatial startups are going to be disappointed once they discover the very high costs of putting satellites into orbit.  The only possible entrepreneurial disruption available there would be from some space launch technology that does not use a traditional multistage booster to escape earth orbit.  Rocket sled launch technology would be great if it relied upon a railgun for its initial propulsion.  I respect SpaceX for getting the conversation started but I don't understand why they still seem stuck on rocket boosters as their tech mainstay.

Geospatial enterprises will be fun to watch in the next few years.  Lots of startups will jump into it thinking they have some app that DigitialGlobe or Google would love to acquire.  If said app reduces the cost and speed of processing embedded map data, they just might have a chance.  A bunch of VCs will throw money at any startup with "geo-something" in the first line of their business plan because chasing fads is in Silicon Valley's DNA.  I'll be around to laugh at the VCs who fund the worst ideas first, and to congratulate the best ones that win.

Full disclosure:  No position in DigitalGlobe (ticker DGI) at this time.

Alfidi Capital Attends Mobile Monday's 2014 Year in Review

Mobile Monday's year-in-review for 2014 and predictions for 2015 was one of those can't-miss San Francisco events.  I trekked over to Adobe HQ on Townsend Street to absorb the night's wisdom.  I've been over there often enough to know that any startups seeking street credibility need to attend those events.  Bear in mind that the observations below are all my own.

First, allow me to orient my readers to the Adobe gathering place past the front entrance.  Anyone who's ever visited Adobe has seen the employees' creative expressions around their public meeting space.  Sketches adorn the walls and they're much better than your kids' etchings hanging on the fridge.  I guess the Adobe folks are taking classes after hours to add right-brain creativity to their left-brain work.  You might even see something like this unique branding interpretation below.

That's a whole bunch of gumballs arranged in a Plexiglas cube resembling the Adobe logo.  It's really cute but the gumballs are not available for consumption.  I thought about adapting the Alfidi Capital logo in this style but I don't have a physically impressive space where I can display it.

Adobe's meeting space has all of the fun tech gadgets you'd expect, like cameras and projection systems to capture the audience.  That's me taking a selfie of my image on the big, fancy projection screen before it rolled up.  I have no idea what these other people were doing.  I did not come to Mobile Monday for them.

Mario Tapia kicked off the event with his special rendition of a Christmas rhyme, "Twas The Night Before Funding."  I hope he puts it on the Mobile Monday website.  Every startup dreams that their primary investor will be some kind, grandfatherly type pushover like Santa Claus.  That's why it's a fun fairy tale, kids.  Reality is a VC who wants to cram down the founders' stake and push for a premature exit.

Let's get to the panel already.  I did not write down much of what they said because I was too busy generating my own thoughts, which I shall now share with you out of generosity.  The bubble charts from a tech sector investment bank still projected huge mobile revenue growth even though it means cannibalized growth in other online services.  Mobile subscriptions and advertising are very sensitive to economic downturns, and consumers will do without either in the next recession.  I'm not sure why the panelists think Millennials' preference for smartphones as data carriers means they're less likely to use it as a phone.  Other generations use the devices to make voice calls.  The world does not revolve around Gen-Y people even though the ones in Silicon Valley think it does.  Mobile sector analysts all seem to be Millennials anyway, so their research is becoming self-referential.

Games dominated every bubble chart and quad chart the Mobile Monday panel discussed.  Analysts expecting non-game app categories to overtake games are foolish.  Mobile users' preference for amusement on demand is now so thoroughly ingrained that only other gamified apps can satisfy the craving.  App makers targeting business functions still have not figured out how to incentivize users with playable levels and token rewards, and that's why they won't see growth that displaces games.  The obvious way to jump start growth in any other app category is with gamification.

There may be some growth left in sectors that provide on-demand services specific to locations.  Yes, Uber and Lyft, I mean you.  The mobile sector forgets those companies aren't just mobile apps, but analysts who don't leave their desks much won't understand logistics in the physical world.  Virtual services are a different story.  Lots of sectors don't have enough workers who are mobile enough to justify a device and app for everyone, so traditional seat count metrics for ERP systems still matter.  I can only see mobile "virtual back offices" for SMBs viable only for those businesses with localized services (gardeners, junk haulers, whatever).  The mobile sector is too much in love with itself if it thinks every cubicle dweller is destined to go mobile.

I may be one of the few analysts on Earth who understands what drives M&A in mobile.  It's not corporate development targets or cultural fit.  It's really cheap capital from the Federal Reserve's ZIRP that makes mobile deals look better than than they would without steroid dollars.  The next most important deal driver is the collection of billionaire tech egos who use cheap capital to buy threatening startups.  Really, that's it.  None of the things I learned in my MBA coursework about strategic fit are driving mobile deals.  It will take a severe stock market correction and the removal of the Fed's monetary stimulus to bring old-school methods back to dealmaking.

No way are mobile startups going to keep rocketing from zero to exit in two years.  Stratospheric acquisition prices, especially those measured by price paid per employee in startups with low headcounts, are an unsustainable phenomenon unique to bubble economics.   I'll believe that WhatsApp and others are viable when their acquiring parents' public financial statements show their line item revenue.

The panel's best insight was the difference between acquisition strategies of tech companies run by different generations.  Gen-Y billionaires (Mark Zuckerberg at Facebook) buy messaging startups because that's what Gen-Y uses to communicate.  Gen-X firms like Microsoft and Yahoo buy email startups, but I wonder how entrenched Gen-X culture is at those companies.  Generational difference in corporate management cries out for a Harvard Business Review case study.

I just LOL at VCs endorsing strong encryption.  No way will the NSA allow it.  I expect any US-based startups pushing encryption to be bought out by the big firms that have already agreed to cooperate with the NSA, just to see their tech absorbed.  Non-US startups offering encryption will have a hard time entering the US market, if you know what I mean.

I heard one of the attendees at this event who mentioned Ashley Madison in the same breath as other dating site success stories.  That site caters to adulterers but apparently some people in mobile don't mind.  I will not link it here.  My readers who approve of that site should never read me again.  I take personal integrity very seriously and keeping a marriage vow is a reflection of one's character.  Mobile enthusiasts who equate breaking marriage vows with business success might as well invite business partners to betray them.

The panel closed out with their predictions for 2015.  They were all over the map expecting disruption in real estate, wearables, wealth management, and other sectors suffering from friction.  I agree with the trend of emoticons and short-form messages dominating communication in post-literate society.  Maybe the next hot mobile startup will have a hieroglyphics UI.

Mobile Monday's 2014 close-out left me satisfied that I know more about mobile use than most VCs and analysts.  I expect more of the same from the sector, particularly from the continued growth of games.  The mobile sector can expect to see more of me in 2015.  

AlwaysOn Hosts OnMobile 2014 in Palo Alto

I am getting addicted to AlwaysOn events, and OnMobile 2014 this month was worth my time.  Tony Perkins' new Cuckoos Nest Club in Silicon Valley attracts big shots and naturally my presence completed the scene.  KPMG was a prominent sponsor and I was looking for their representatives on site.

Mr. Perkins' description of Millennial buying patterns got me thinking past their preference for sharing over privacy.  The Valley's fixation with Big Data isn't over because enterprises are still figuring out how to package it for resale.  I await the first startup that captures some network effect of Big Data aggregation.  We also have not seen the full maturation of AIs and machine learning that can magically generate video on demand, although a couple of startups in the AlwaysOn pipeline have some promising early solutions.  Fit all this stuff into mobile interfaces and watch the gross margins multiply into a bonanza.  

It's now a truism that apps count for more in the mobile UX than a mobile-optimized Web interface.  I heard that at countless conferences in 2013 and OnMobile drove the point home.  Big venture investors still chase early stage mobile companies but the biggest dumb money has barely arrived in the game.  I have sovereign wealth funds in mind when I think of dumb money.  They have no clue which technologies will win.  Startups with poor prospects may think that is good news if they get cash to burn.  A lot of corporate and strategic investors who are late to this game stand to lose a lot if they don't track sources like AlwaysOn.  

The fireside chat with Magisto was a classic showcase for how a first-mover advantage creates a network effect.  Magisto's video-editing AI already has peer credibility, a user base, and prominent investors.  A user base is still not the best traction metric in social media, especially with a freemium model like Magisto.  Sharing frequency should matter more because each sharing instance generates an ad impression.  Geographic segmentation of a user base matters in content creation for many reasons.  Not all alphabets read left-to-right like the Roman alphabet, for example.  The back-to-front visual narrative structure of Japanese manga is one geo-specific example that will pose a challenge to Western content creators.  

I won't repeat specifics from the startup pitches because some of what they shared is undoubtedly proprietary.  I will share my totally subjective general impressions.  Validation as "best app of the year" in the Google or Apple stores is certainly a worthy milestone.  A killer app would integrate AI auto-generated content with embedded data in its video and images, but I have not seen a good example ready for a market.  I can see using mobile apps for on-premise payments after service calls, but retail payments are integrating their POS proximity interfaces with links to apps for bank accounts and credit cards.  I expect service call support systems to simply adopt credit and debit card apps rather than reinvent the wheel.  

I'm seeing more startups in an emerging Silicon Valley archetype.  This archetype addresses only upper income market segments in developed countries who face lifestyle inconveniences.  They chase a lucrative but crowded segment whose disposable income enables price inelastic consumption for the time being.  The end of central bank intervention in asset markets will destroy that inelasticity.  More startups should at least try to address lower income segments and developing markets.  The world needs more than another lifestyle management app.  

The investor roundtable for B2B mobile predicted apps that could handle internal workflows, so the next hype cycle for enterprise workflows hasn't started until Gartner publishes something on workflow migration to mobile.  Real-time data flows will add value in fraud detection and micro-ad targeting but I doubt Gartner will get that specific.  Mobile ad attribution is complex and B2B trends are not making it any easier.  The roundtable people noted surges in mobile backend services and data rationalization for middleware.  Those two trends are IT-specific and I haven't yet seen how either one will help marketers understand ad attribution.  A rise in demand for APIs in those stacks should tell us whether marketers are using them to parse ad data.  

Another fireside chat with Auction.com showed how mobile is finally disrupting a real sector in the economy rather than layering another form of interaction on top of existing commerce portals.  Real estate sites are rapidly disintermediating traditional gatekeepers like banks and real estate agents.  Widely available online content de-risks deals by making due diligence easier.  I still think the potential for mobile to democratize access to real estate ownership is overestimated simply because REITs already exist and the economic barriers to owning them are very low.  

Enabling tech for B2B platforms warranted a separate panel.  Transaction sites obviously monetize from fees, but they can also display ads and sell their Big Data.  The startups that haven't figured that out are not getting the most out of their enabling tech.  I repressed a LOL when the panel said cryptocurrency enables a distributed trust environment for e-commerce.  The logic that a blockchain somehow enables a roving identity for shipping addresses is simplistic.  Clueless people underestimate the ability of determined cybercriminals to spoof or hijack a blockchain.  I'd rather go with layered standards as an industry-wide architecture for competing B2B tech solutions.  Personal identity is one layer and shipping address is a separate layer.  Different payment mechanisms (debit, credit, Apple Pay) get separate layers.  That's my end-run around blockchain weaknesses.  

I'll wrap up my analysis by suggesting a way ahead for mobile startups seeking attention at AlwaysOn and other Silicon Valley forums.  Startups appearing at pitchfests like OnMobile can build credibility by earning cloud computing awards.  There are too many to name here.  Ambitious startups should hit the Google search button and find ones they can earn.  They can do the same search for cloud sector metrics that bolster their business cases.  Cloud providers touching health care must be HIPAA compliant and mobile startups pitching workflows to the health care sector must also meet that standard.  If a blockchain approach is to have any place in a business model, it may be useful as a basis for identity management only if it is built once for reference and not expanded every time the identity holder makes a transaction.  Minimal coding means more rapid deployment, especially as iterative models replace SDLC waterfall models.  Entrepreneurs who talk more about their product than their business model will not connect with investors.  The path to monetization via a pricing model must be clear, and it must have an exit strategy.  Expected revenue growth models are becoming standardized thanks to Y Combinator and other accelerators, so startups can present more realistic estimates.  Anyone launching location-based services should first check with Gigaom Research to see who has done it before.  

I need to close with one big observation, and it segues from the 2D photo of the Olga Show host above.  Map APIs should enable 3D views.  The coming drone revolution means plotting air routes over short flights must account for altitude, terrain elevation, artificial obstructions, and other hazards to aviation.  Rotary-wing drones at higher altitudes won't generate as much lift in thinner air, so real-time information on air currents and other weather factors will be essential in next-gen 3D mapping.  The mobile startup that masters 3D mapping will own a big chunk of next-gen commerce.   You heard it hear first at Alfidi Capital.  I get my inspiration from AlwaysOn.  

Momentum VC Offers Chats with Kairos Society and Ruckus Wireless Notables

The Momentum VC folks pulled off another good fireside chat last week at DG717.  I'm getting attached to these events for the peeks into how mobile startups make it happen from scratch.  I will try not to merely repeat the thought leaders' wisdom.

The entrepreneur dude who founded the Kairos Society explained his fascination with solving the world's problems.  He nailed Silicon Valley's insular tendency to build products for its own elites while ignoring the developing world's mobile market.  I'm pretty sure the average African will choose M-Pesa over Uber any day.  I am not as convinced that mobile devices have minimized their data security risks.  The celebrity photo hacking scandal of recent weeks shows that user-level security needs major work before mobile can truly be the front end of cloud storage.

If I were marketing some mobile solution in emerging markets, I would ensure it had a non-affluent, non-literate appeal.  It would have a non-text UI, allow for payments in small increments, and support an app ecosystem that targets verticals in the natural resource sector.  I also think M-Pesa would work in the US if the normal banking system were unable to transfer money in a crisis.  Apple Pay and Google Wallet are preparing the way for just such an approach.  Americans will have payment options in hyperinflation if those services can add digits up to a hundred trillion.

Mobile developers should also remember the Kairos guy's revelation that mobile use cases are not identical to desktop usage.  Smartphones bootup faster and are thus more responsive with functions like email that can't wait for bootup.  I await whatever developments the Kairos people can produce in synthetic biology, orbital space APIs, and platinum mining on the moon.  I guess tech people really do sit around thinking about going into space, based on what I heard at Momentum VC.

The Ruckus Wireless guy was up next.  I agree with his philosophy that money matters if it allows one to do great things.  His insight that the defense sector operates on a process orientation for Peter Principle managers is correct in my experience.  I will definitely follow his advice to always seek an unfair advantage in business.  I don't have as many academic contacts as I need but that is solvable with networking.  I may have aspects of the attention deficit disorder and laser focus that he endorsed.

I will repeat a couple of his best points verbatim.  He said to get a team of divergent minds who think differently from the founder.  Once they're assembled, get the smartest person in the room to ask the smartest question, then think of the simplest possible solution.  Well, I'm usually the smartest person in the room, so I will have to convene a panel of Nobel laureates for that level of input.  Extreme geniuses such as yours truly don't like organization charts or enterprise politics.  Thinkers live in the realm of pure ideas.  I much prefer that antiseptic approach.

I cannot name very many examples of a startup copying a market leader, aside from Google taking on Yahoo last decade.  It works if the leader chooses not to pull out all the stops on resources to fight back.  A market leader that does not fight back commits suicide.  Silicon Valley corporate development departments scan for emergent rivals they can buy or suppress.

Ruckus' guy also shared insights on how culture steers execution after management has stated its vision.  The US military is supposed to operate like that in theory but my experience revealed how culture often hindered execution.  Meetings that end in action items for specific staff members are IMHO the least evil type of meeting to hold.  I would like to see PayPal's anti-meeting culture in operation.  The good news I've been absorbing at many tech conferences is that automated workflows can direct tasks to the right action center with little in-person coordination.

I left DG717 thinking about how some Kairos reality hacker would write an API on the moon while a Ruckus Wireless techie was chasing some random, predatory disruption back on earth.  That's what they said they like doing.  I'll have to check in with Momentum VC again in a few months to see their progress.  

Funders and Builders Chat at Momentum VC

Momemtum VC has got momentum (pun intended) in San Francisco's mobile startup community.  I attended their fireside chat last week at Digital Garage's DG717 to hear how mobile startup founders get stuff done.  The two founders on hand shared insights on how they built their success stories.  I'll assemble their observations into some stream-of-consciousness mashups with my own thoughts in the mix, followed by some very insightful thinking straight from a venture capitalist.

If proximity terminals are to be compatible with analytics solutions, they also need to accept real-time data from other sources.  Such tech is useful in more than just badge and barcode reading; it can adapt to retail with commerce going mobile.  Retailers are very interested in using data from in-store video feeds.  Motion capture and facial recognition software are already in the pipeline for retail POS enterprise data.  Techies, make sure your mobile hardware has enough room for software that will push data through all of these streams.

I agree with these sharp mobile founders that entrepreneurs sometimes lack the emotional skills to succeed in large corporations.  I had too many bad experiences with bureaucratic types myself to ever go back to their way of thinking.  I like watching entrepreneurs launch into the creative tension of making something brand new.

The people in the Bay Area mobile startup community obviously know each other and frequently work together.  This builds a bench strength of capable serial entrepreneurs.  One founder said his job is to assemble a team that acquirers want to retain.  I would add that not every acquirer will go for the whole team in a buyout if they only want key people in an acqui-hire.

The sales team needs to be motivated by money, because that's a startup's only real metric.  There are multiple ways to monetize data and IMHO the founding CEO should compare each potential stream's NPV to set the sales team's initial priorities.  One founder said he liked an energetic sales team but their energy can grate on the nerves of the startup's technical people.  A strategic marketing plan generates a sales script that keeps the sales team faithful to product characteristics.

I was not aware that Traction and other portals are now connecting freelance content marketers to brands that need specific campaigns.  I was aware that marketing narratives must be compelling but it's hard to reach the "suspension of disbelief" phase without an iconic brand that carries an emotional connection.  Apple is probably the standard for such disbelief; people keep paying premiums for their incrementally improving product releases.

I learned a new acronym:  FOMO means "fear of missing out."  This fear of being disconnected from digital culture probably drives demand for those overpriced incremental improvements I mentioned above.  Startups whose marketing embodies FOMO have an edge, and I suspect investors who match patterns will seek that edge.  One founder recommended a Paul Graham essay on pattern matching; I couldn't find it right away but it's probably buried among Paul's tons of wisdom.

One additional participant was venture capitalist David Blumberg of Blumberg Capital.  The dude was super-sharp and relentlessly positive.  IMHO some entrepreneurs who become VCs share very  unique traits . . . transformative vision, lots of imagination, and divergent intellects conducive to pattern recognition.  They also have really charmed lives.  Doors just magically open.  David related numerous instances where his career took an unexpectedly successful turn when he was in the right place at the right time.  His upbeat attitude probably had a lot to do with other people's willingness to open their minds to his ideas.

David noted how software startup cost barriers are now lower than ever, and freemium mobile startups who keep their back-end service costs low can make that business model work.  His take on the 2001 dot-com crash was that bubbles happen when greedy investment bankers throw easy money and their own DNA into tech startups.  I often wish I had experience with investment bankers to see just how badly they pollute things they touch.

I don't know whether David read Paul Graham's thinking on pattern recognition, but he said something about it that opened my eyes.  If business models are more important than tech, then VCs use their pattern recognition abilities to compare those models.  Recognizing product cycle length, required support, and other factors are patterns that reveal the future.  They also leverage the business domain expertise of the startups already in their portfolios to perform due diligence on other startups.  He closed with the "six T's" categories VCs use when evaluating a startup:  Theme, Team, Terrain (market and competitors), Timing (go-to-market strategy), Tech, and Terms.  Wow!  That is some major insight into VC pattern recognition ability.  Thanks, David!

The tension between tech-focused engineers and revenue-focused marketers is as old as the tech sector.  It came up several times in these conversations and I've heard it expressed in different formats before.  David summarized it with a joke:  "How do you tell the difference between an engineer and a marketer?  Engineers don't know how to lie, and marketers don't know when they're lying."  The serious role of the CEO is to ensure the engineers produce something marketable and that marketers stay on the script that keeps them honest.

I'll make one more general comment about the San Francisco startup scene.  I've noticed that a lot of incubation co-working spaces have some pricey amenities.  Designing things like art, terraces, and other ornate extras into work spaces raises the incubator's cost.  Anything non-functional that raises a cost also raises the startup's hurdle rate.  The discount rate VCs apply to tech startups is always extremely high, and it makes little sense for incubation sponsors to raise it even higher by adding costs to commercial real estate.  I like startups that operate on a shoestring because I take a dirt-cheap approach to everything in life.  I can't imagine succeeding any other way but some broke San Franciscans are determined to live premium lifestyles.  Momentum matters more when it comes at a bargain price.

Full disclosure:  I have a tiny sweat equity stake in a mobile startup.  That entity is not involved with Momentum VC at the present time.  

Mobile Monday Knows Your Startup's Top Legal Mistakes

I attend Mobile Monday Silicon Valley events even though I don't work in the mobile sector's ecosystem.  I keep my finger on the pulse of mobile action and meet the folks who put those fancy apps on your smartphone.  The event this week was a chance for aspiring entrepreneurs to hear from attorneys on how not to make common legal errors.  I did not make any errors when I wrote my nametag.  It is truly a state of perfection.

The panel attorneys from Arent Fox and elsewhere handed out free wisdom like candy.  There was also free candy available from the Tea Room where they infuse their chocolates with green tea, oolong tea, chai tea, and other stuff.  I had my fill of chocolate and took the legal stuff seriously.

Following one's own privacy policy and assigning founder ownership stakes early are pretty basic things.  The preponderance of lawyers with diverse specialties makes me think there's a disruptive opportunity for an online lawyer rating and referral service.  Call it the attorney version of Yelp.  It's too bad Yelp has such a poor reputation that even lawyers should be reluctant to use it.

I hate to admit that likability is a factor determining whether VCs invest in a startup.  Investors believe in founders more than tech and will push them to pivot if Plan A doesn't work out.  I learned long ago that physical attractiveness and pedigree are key to likability.  The guest lecturer in my 2002 MBA venture capital class told us about how her high heels, fishnet stockings, and revealing cleavage helped her close several rounds of funding as a serial entrepreneur.  I have told several female entrepreneurs that leveraging sexuality is a successful tactic.  That's one reason many attractive women flock to me for wisdom, and other means of stimulation.

I liked hearing the tidbit about structuring owner and advisor equity stakes to align with those parties' fair time commitments.  Linking the vesting of an advisor's shares to their fulfillment of agreed objectives is an acceptable practice.  Setting term limits on an advisor's board participation is a helpful way around the discomfort of firing them for non-performance.  I remember last year when a startup I was mentoring through an accelerator demanded that I violate the accelerator's rules on time commitments and complete all of their worksheets for them.  I refused to violate the rules and the startup fired me as a mentor.  They retained a former poet with no entrepreneurial experience as a mentor.  That startup never made it through round one of the accelerator and the founder failed to commercialize any of his inventions.  I don't think it's difficult at all for an advisor to perform well for an ethical entrepreneur.

I learned a little bit about the culture of Silicon Valley.  The Valley ethos of "pay it forward" favors gratis introductions to build relationships.  Any startup advisor who demands compensation in exchange for introductions to investors raises a red flag in the Valley.  That alert must propagate through the Valley's networks like wildfire when it happens.  I marvel at the persistence of some "pay-to-play" entities that knowingly flout this ethos.  Their excuse is that many hopeless startups benefit from paid exposure to well-heeled groups even if no investment is forthcoming.  The reality is that naive startups get fleeced by paying entry fees to pitch fests where no serious investors will be present in the audience.

Some top-drawer law firms do demand a cut in exchange for investor introductions, but they can get away with that because they have access to so many real venture investors who look to them for deal flow.  I've also noticed that the top law firms will accept equity compensation from cash-poor startups.  I say that's a fair way to comply with the Valley's culture of mutual helpfulness.

I'm not going to castigate the legal climate of California.  I trust my state's business laws and I don't need a legal domicile in any other state that would subject me to an unfamiliar jurisdiction.  I unwound my LLC structure and Alfidi Capital is now a sole proprietorship because incorporating just didn't benefit me.  I don't know how California law treats employee non-agreements but plenty of Valley firms poach from each other constantly, so I suspect those agreements aren't worth much outside of something extraordinary.  The attorneys present at this Mobile Monday panel viewed non-competes as a form of golden handcuffs enforceable during corporate acquisitions.

Startups can protect their IP with a "file patent, sign NDA" approach.  Tech developers under contractual employment agreements may be tempted to leave early and take that tech to a competitor.  Filing a patent on that tech keeps it with the startup that agreed to pay for its development.  Requiring the contract engineer to sign an NDA clarifies their role as an employee hired to perform a specific service.  The disclaimer language assigning IP ownership to the startup, and not to the employee, should be airtight.  Don't ask me how to write it; I'm not an attorney.

I'll close with a video parody one of the attorneys liked.  Check out an imaginary Nikola Tesla pitching Silicon Valley VCs.  This never happened in history but some future super-genius will relate to the process.  All of the Silicon Valley biases are there.  Teams, lead investors, and pitch decks matter for any startup that isn't run by Nikola Tesla.  Those self-absorbed VCs like teams.  I don't like teams unless they leave me alone to do my thing.  I think Nikola Tesla would have loved to speak at Mobile Monday.  

Macworld 2014 Rounds Up Apple Fans And Tech Stars

My first computer was an Apple Macintosh I bought in 1995.  I kept it for as long as I could until I had to switch to a Windows laptop in 2000.  I rarely revisit Macintosh tech unless some high-profile event entices me.  Enter Alfidi Capital into Macworld / iWorld 2014 at Moscone North last week in San Francisco.  I had to go to see if I could score free food at the afterparties.  Seriously, I went to see cutting-edge tech.

My free expo pass didn't get me into any of the supercharged intellectual conference sessions.  Sooner or later the people running high-profile conferences are bound to recognize my extreme genius and put me on their speaking calendars.  I shall prowl their expo floors and free sessions until those salad days arrive.  The coolest thing I saw on this year's expo floor was the FLIR ONE infrared attachment for the iPhone.  I asked the booth dude to take my picture with it, and the result is below.

I must admit that I look quite handsome even when I'm only visible on the infrared part of the spectrum.  Women can't resist an infrared version of Yours Truly.  I look like the enlightened Buddha or something similarly transformational.  I first noticed FLIR ONE in some news report from the last CES in Las Vegas.  I'm impressed that FLIR is branching out from the defense market.  Now everyone can take infrared pics of their household pets and post them to Instagram.  They'll all look the same and no one will care because yokels love novelties.  The product may actually have some commercial uses besides physical security.

The "makers" on one of the free stages discovered some things that got me thinking about how quickly a manufacturing renaissance can happen.  Form factors matter so much that third party accessory makers must have good OEM specs so their components properly fit those major items.  The best synergies for smartphones, AI, and robots right now will come from routine tasks managed remotely (think Roomba).  Ordering but not shipping keeps customers in limbo, but some makers think they can get away with such poor service.  If it happens deliberately, consumers have a case for the Federal Trade Commission to investigate.  Good companies constantly model demand versus their capacity, and plan expansion to meet demand.

The live Vector podcast from iMore was very much for hard core tech fans who think Wall Street tries to push Apple into doing bad things.  I'm no fan of Wall Street either.  Developers are passionate about Apple keeping its acquisition strategy focused on buying small companies that add to its tech base.  They would be aghast if Apple ever pulled a headline-grabbing stunt like Facebook and Google's typical billion-dollar acquisitions.  One panelist was skeptical about the total addressable market (TAM) for virtual reality (VR).  He may have a point some humans naturally resisting immersive environments due to phobias and the limits of physiology.  I think the TAM for VR will prove to be small but lucrative for niche players.  A whole nerd subculture has grown up around gaming and they spend serious coin on tech.

The Macworld interview with Dr. Jeffrey Smith, CEO and founder of Smule, turned out to be a huge eye-opener.  He figured out how to make apps that mimic piano chords and wind instrument effects.  His most important discovery is the value of music as a shared activity.  People are very happy to collaborate on musical performances over long distances.  Smule apps make money when people share their music online.  I first noticed the power of online musical collaboration when I saw a YouTube clip of Eric Whitacre's Virtual Choir singing "Sleep" a couple of years ago  The choir shares Smule's philosophy of democratizing musical performance.  Latency constraints degrade long-distance live performances but they are no problem in recorded performances.  Dr. Smith's description of digital archives that collect millions of recorded music performances gave me a brainstorm.  I am convinced that Big Data sets of amateur musicians now present a disruptive opportunity in the music industry.  Data mining these performances for talent establishes a "Moneyball for music" set of baselines that can estimate a performer's marketability.  This disintermediation of music from recording studios and performers' unions is the ultimate free-market end run around the music industry's traditional gatekeepers.  You're going to hear more about this concept as I develop it in future blog posts.  Thank you, Dr. Jeff Smith.

Live podcasts proliferated at Macworld.  TechHive's Clockwise podcast discussed what home appliance Apple would make if it could.  I vote for a clock radio, since Apple already knows how to put timekeeping on the iPhone and music in an iPod.  Macworld's Pundit Showdown Live podcast featured the very attractive Susie Ochs of TechHive, who did cute dances in her chair whenever the host played some theme music.  The pundits need me on their next podcast because I offer more than nerd references to Ars Technica.  Tech I hate?  Bitcoin.  Myth I'd dispel?  The need for all of us to learn coding.  I got the vibe that the DECE consortium's UltraViolet digital library has a bad rap among Apple's fan base.

One panel of longtime Apple watchers debated the company's past, present and future.  I think early adopters would love Apple wearables based on these guys' chatter.  I grokked a consensus from several panels like this one that Apple doesn't pursue niche markets like gaming.  I can't understand why they would cede the huge gaming market to Microsoft and Sony.  Apple may be happy to grow its share of the desktop PC market by default as people turn away from Windows PCs and adopt tablets.  Mobile isn't going to completely destroy desktops no matter what tech gurus like to say.  Knowledge workers must still perform word processing and data analysis using the keyboard/mouse interface, so desktops and laptops have a future.

One of the last free sessions I could attend at Macworld 2014 was a Bitcoin Meetup.  Yeah, right, I know what you're thinking, I went there just to stir things up, right?  Well, I behaved myself except for the few loud snickers I uttered in the back of the room.  These Bitcoiners repeatedly contradicted themselves.  They claimed Bitcoin couldn't be destroyed by any government, but then said a few coders could change the algorithm to make it do something completely different.  I spoke with a few of them afterwards to test their intellectual abilities.  I told them that the IRS's recent ruling on Bitcoin meant that everyone who mined it since 2009 would have to file amended returns to report that mining as income.  The scofflaws among them claimed that wasn't necessary.  I then reminded them that the blockchain is publicly visible and FINCEN won't have much difficulty tracing Bitcoin owners through that chain so the IRS can gather a list of its tax evaders.  My logic opened the eyes of a few curious people in the room who had not drunk the crypto-hogwash.  These people were mostly schmucks disguised as coders.  One guy was pitching some open-source contraption that was supposed to be a Bitcoin ATM running Raspberry Pi.  It looked ridiculous.  Someone would have to be really stupid to stick their ATM card in something that looks like a toolbox.  These people are tools.  Stupid tools love Bitcoin.

I'll end on a high note.  I went back to the expo floor where one of the audio techs working the second stage's soundboard recognized me from other conferences.  I didn't recognize him but I take this as a sign my reputation in Silicon Valley is growing if even the show floor operators know me by sight.  He mentioned his desire to get involved in this whole startup scene himself.  I related the story of David Choe, an artist who painted murals on Facebook's corporate walls in exchange for shares.  His Facebook shares later proved to be worth a fortune.  You don't need to be a software engineer or financier to strike it rich in Silicon Valley.  The very first corporate treasurer, HR director, and night shift security supervisor at Yahoo, Google, and Facebook probably made out like bandits if they had stock options.  Anybody who shows up at enough Meetups, seminars, pitchfests, and conferences with their specialty in hand stands a chance of landing a gig at a VC-backed startup.  Bring your thing anywhere, even to Macworld 2014.  

Revelations Of Apps World North America 2014

I attended Apps World North America 2014 last week in my continual quest for technology market insights.  If there's something in the mobile app world that deserves an investment, I'm destined to find it.  I actually didn't find anything I'd want to invest in at the conference but I did come away a bit smarter about how the sector is maturing.

The legendary Steve Wozniak was the lead keynote speaker right at the beginning.  The more I hear technology leaders talk live, the more I see the common elements of their personalities.  The guru known as Woz was highly improvisational, weaving stories from Apple's early days into the tech news of today.  The most brilliant tech minds express themselves like jazz musicians by riffing through multiple topics that have common connections.  That kind of thinking is probably hard-wired at birth but the rest of us can adopt some of their techniques.

Woz says an intrinsic motivation for innovation comes from an emotional source, and is much more powerful than extrinsic motivations from rewards like stock options.  His favored roadmap for innovators leverages affordability and using existing building blocks.  I take that as a smack to VC-funded tech companies that spend millions on development when open source coding tools are readily available.  I also took something away from his description of Steve Jobs' understanding of product design aesthetics and his talent for reading people.  Startup team members should complement each others' strengths.  Woz's engineering knowledge and Jobs' design aptitude made Apple successful.  It probably wouldn't have succeeded if all of their early employees were clones of each other.

I like his cute equation:  H = S - F, or Happiness = Smiles - Frowns.  That's his shorthand for not looking back or second-guessing decisions.  I promise to smile more when I write insulting things about stupid people, because that will make them frown.  My smiles minus their frowns equals total happiness for humanity.  Woz is a genius.

He seems resigned to the end of privacy in the age of mass surveillance, and to the end of the Moore's Law increases in computing power.  Woz would like to see the dawn of intuitive AIs that replicate the human brain, but truly understanding brain science is hard and the end pf progressively more powerful computers means we may never reach the intuitive AI singularity.  I dunno, Woz, quantum computing may surprise us to the upside.  I was dumbfounded when he praised Bitcoin.  I think a computer genius would be more cautious about the computational limits of crypto-nonsense, although he did mention the risk of Bitcoin mining duplication.

He flicked his wrist to show off a cool high-tech watch hand-built from old parts but I didn't get his explanation of how it allowed his brain to do less work when he checks the time.  Maybe he knows more about brain science than me.  I'll give him the benefit of the doubt, but if he really likes Bitcoin then he's subject to the same cognitive limits as the rest of us.  BTW Woz, if you want a language where people can write their own scripts to interrogate IoT devices, check out HTML5.

Woz took tons of questions from the audience.  He thought Blackberry could have saved itself by making Droid phones and that TV subscriptions should be portable via mobile anywhere.  He looks forward to specialized mini-robots and realistic holographic projections.  He likes Siri enough to want it to manage other apps, but IMHO he'll need to get his wish for AI fulfilled.  I liked Woz enough to photograph him for my blog but I'm not enough of a fan to talk to him personally.  The hangers-on in the audience mobbed him for personal glory while I turned my attention to other talks at the conference.  There he is below, less than two meters away from the greatness that is Alfidi Capital.

Some of the speakers tried to differentiate between an app's user experience (UX) and customer experience (CX).  That's a distinction without a difference.  I do not believe app developers can draw such a clear line for any app other than premium ones that charge a download fee up front.  Other revenue models - freemium, in-app ads, in-app purchases - blur the line.  App developers who apply Forrester's Customer Experience Index metrics to their UX/CX concepts stand a better chance of adoption because they bothered to learn something about how people use tech.

I will hereby announce my disagreement with people who say "tech drives innovation."  Tech is actually the result of innovation, and like Woz said above that comes from a human motivation to make something better / faster / cheaper.  Techies who love tech for its own sake join startups all the time, and they never succeed because they don't solve problems that meet market demand.  I saw lots of that among the gamers' pavilion.

Here's new tech buzzword that makes me LOL:  mind share.  It's so nebulous that it could mean anything in brand acceptance without any underlying data from Forrester or elsewhere.  This makes it fodder for tech charlatans and pseudo-visionaries who can throw it around and impress clueless tech executives.  I'd like to ask the next app developer who claims traction in "mind share" exactly how they measured that in their CustDev process.  Market share counts for more than mind share.  Sales fixes everything.

I saw one really cool slide on an "ROI pyramid."  It linked CRM data to customer LTV in a way that enabled managers to compare the NPVs of capex spent on tech projects.  A Google search for "ROI pyramid" shows a bunch of these models, all of them starting from radically different premises than what seems to be the original version circa 2010.  That original model looks cool but this is evolving in weird ways.  We may have another "mind share" type of concept on our hands here with this pyramid.  I think enough of these ideas strung together will make a convenient checklist for any tech charlatans who want to bamboozle old-school executives.  Mind share?  Check.  ROI pyramid?  Check.  Don't forget your web design wire frame for those startups with no internal HTML developers.  See folks, this tech stuff is easy.

I take experts seriously when they provide how-to roadmaps with verifiable data underlying their claims.  One of the best panels at Apps World 2014 was on boosting app downloads, presumably with such verifiable techniques.  They advocated A/B testing of ad tag lines with a target market in mind.  I've heard tech advocates endorse video walk-throughs of an app in use to aid users but these folks advocated a slideshow.  Okay, but that requires more click-through work than a video.  Truly successful tech appeals to post-modern human laziness.  Good luck getting repeat use after a single activation with a slideshow visual aid; maybe it works best for more complex apps.  I sure would like to see some data on the claims of customer LTV for different app revenue models.  I'd also like to see some data comparing the drop off ratio (i.e., app users who never return after the first activation) of different revenue models.

The dude who spoke on the evolution of mobility in the enterprise was cool.  Big enterprises went through brochureware, limited apps, the mobilization of full business processes, to the fully mobile enterprise of today.  I think that full transformation is still out of reach for enterprises tied to large physical plants; the energy and petrochemical sectors spring to mind.  The mentality that any and all companies can become fully mobile reflects just how limited in scope the prototypical Silicon Valley vision has become.  These app innovators all operate in a universe where games, messaging, and media feeds are the entire economy.  Show me a railroad or construction company that is going full mobile, please.  I did pick up on the need for an enterprise-level "mobile center of excellence" that can push mobile adoption across functional silos.  That one very important C-level insight will get lost among the jungle of developers' tech jargon.

Addressing MDM is getting more difficult as BYOD policies allow device brands to proliferate in the enterprise.  IT departments are belatedly learning the value of app security that ignores device specifics.  They're also learning that VPN is not a panacea because it fails on speed and battery life, crucial things in a mobile UX.  The panelists making these claims all referred to policy limitations rather than tech limitations.  I can read between the lines.  It means enterprise users who bring their own tech to the enterprise risk violating MDM and BYOD policies even if their tech is effective.  Policy exists to protect the enterprise from employees, not the other way around.  The insider threat is too big to ignore.  Employees who think outside the box are welcome to request policy modifications, or start their own enterprises.

There's still tension between developers of Web APIs and developers who prefer a mobile enterprise application platform (MEAP).  IMHO the MEAP isn't yet obsolete because it is still good at applying security protocols.  Gartner's Top Ten Strategic Technology Trends for 2014 still favors MEAP in the rise of HTML5.

The case study from 8tracks was as action-packed as a case study can get.  I learned another new phrase:  cohort retention.  A Google search tells me that a cohort is a group of app users who clustered their adoptions within a certain time.  If I were running an app startup, I'd synchronize my SDLC waterfall chart to these cohorts and measure what each iterative CustDev effort tells me about how I should update the app.  The point is to find some sweet spot that makes the graph of customer adoption rates go asymptotic.  The 8tracks guy was big on assigning success metrics to each group of responsible actors within the enterprise.  I would know what those metrics are if I worked in a large enterprise, but I don't do that anymore because I do not like working with other human beings.  My only success metric is the daily Web traffic I drive, which in turn flows from the number of people I can arouse to anger with my insults.

Some panelists discussed founding an app business because they had done that before.  Their passion for ideation came from the desire to improve something that touched their personal interests.  Hey, me too.  My creativity comes from observing the stupidest aspects of finance - hedge funds, bailouts, preppies - and imagining the opposite conditions.  The opposite of stupidity is the genius of Alfidi Capital.  These founders say leveraging popular keywords in app store searches will reveal ways to raise an app's ranking.  Got it.  The "TechCrunch spike" from a prominent tech media story no longer drives as many app downloads as it used to drive, so PR needs a re-think.  I had to re-think the wisdom of what these people presented when they dropped buzzwords like "concentric marketing," "building communities," and other techno-babble.  Hey folks, there are only a few ways to make an idea go viral and they all pretty much depend on emotional connections.  We all heard this stuff about connecting communities back in the first dot-com boom and none of it was cost-effective.  Virality works because it bypasses community gateways, and there's no way I'm dealing with dot-bomb startups or tech charlatans who pitch community solutions.  Nonetheless, they did close out with a good reference.  Bill Baker's tips on startup fundraising are worth a look.

One other presenter emphasized the aesthetics of design, because the human brain processes info quickly.  Got it.  Steve Jobs got it too.  No wonder adult images are such popular web search topics.  I'll think I'll check out a few images of hot women once I'm done writing this article.  Oh BTW, this presenter also mentioned using excellent economics, which I interpret as capex that achieves intended milestones and variable costs that don't get out of control.  Lining up all the right steps first in product development and CustDev means a crowdfunding campaign will make sense.

One panel on monetization showed me how to take the hard work out of segmenting your target market by demographics and location.  Ad networks gather much of this info, so reading their results is probably a decent shortcut that points the way to CustDev.  The experts say ad placement for in-app ads should be a consideration during the design phase, not an afterthought, because different ad concepts lead to different UXs.  Interstitial ads, for example, have fewer impressions but better overall results in conversion rates.  Banner ads have more accidental clicks so they may not give accurate CTRs even though they run continuously throughout an app's activation.

Another monetization guru mentioned the importance of using collaborative filtering to track and predict the adopting audience's preferred UX.  This requires app marketers to graph the longitudinal expressions of an audience's preferences to see changes.  Like I said above, ad networks and other social media tools have plenty of data on the audience.

One of the final presenters displayed another awesome chart . . . the Gartner Hype Cycle.  There's a hype cycle for just about every sector Gartner tracks.  It sure would be nice if someone could track a meta-hype cycle for the volumes of research that Gartner and Forrester have published on tech since the mid-90s.  I'll bet the peaks in the hype cycles of their publications have driven the peaks in VC funding for baloney startups.  Here's another new tech idea that deserves hype cycle tracking:  mobile backend as a service (MBaaS).  How much you wanna bet that it drives the next round of VC funding once VCs see the huge gaps in enterprise IT?  Yeah, you know it's coming.  I also see the resurgence of "middleware," another popular term at Apps World 2014.  You heard it here first.

The Hackfest sponsored a hackathon and awarded some prizes at the end of the conference.  Hackathons should ideally produce marketable ideas but I got the feeling that some of the participating coders do this to burnish their reputations.  Maybe these prizes are resume builders for techies.  There's nothing wrong with that at all.  I would trust a coder who had a competitive spirit.

I have not yet reached the point of diminishing returns from attending these tech conferences.  The cute new terms amuse me to no end, and once in a while a speaker impresses me with data-driven analysis that can be used to develop strategic business options.  I now have much more robust baloney detection filters that can detect a tech charlatan from across the Interwebs.  My desire to make simple, free apps to show off the Alfidi Capital flair for genius is stronger than ever.  I don't even have to worry about privacy or security as long as my apps don't collect personal data.  Stand by for more genius, at a time of my choosing.  

The Haiku of Finance for 12/29/13

Safer cell phone use
Study effects on humans
Read the label first

Health Risks of Cell Phones and Wearable Devices

The mobile tech revolution has moved so fast that health and safety risks are playing catch-up.  I attended a public forum earlier this month at the Commonwealth Club that opened my eyes to unassessed risks in mobile devices.  The bottom line is that cellular devices operate on low-power microwave frequencies.  Extended exposure to low-power microwaves may have human health consequences, which suggests the precautionary principle for technology use while research develops more definitive conclusions.

The scientists and medical experts on that panel presented evidence that a cell phone's intermittent pulse and wavelength variation are the source potential hazards.  These hazards may persist even when the device is at low power.  I took special note of one statistic presented on "digital dementia" diagnosed in South Korean children.  South Korea is the most saturated mobile market on the planet, according to every tech conference I've attended in 2013.  Putting a mobile device into the hands of everyone in emerging markets may magnify health risks.

The panelists weren't the only ones doing their homework.  WHO's IARC published a monograph this year (Volume 102) on the possibility of carcinogenic risk from cell phones' radiofrequency (RF) electromagnetic fields.  The UC Berkeley Center for Family and Community Health published a meta-analysis in 2009 on the risk of tumors from cell phone use.

Early regulation of cell phone risks has mostly fallen on deaf ears (pun intended).  San Francisco's "Cell Phone Right to Know" ordinance lost a court challenge in 2012.  The FCC does mandate specific absorption rate (SAR) guidelines for cell phones, but it still mentions the further precautions of holding the phone away from the human body and using accessories.  The federal government does not at this time speak with a unified voice on RF radiation, although FCC guidelines on wireless exposure purport to include guidance from the EPA, FDA, and OSHA.  Those other agencies have slightly different approaches.  The FDA has wireless standards for medical devices that IMHO can be adapted for cell phones and other devices used outside the human body.  OSHA defers to the FCC by restating the absence of a federal RF exposure standard but nonetheless provides a good summary of scientific literature on RF exposure.  The trouble with implementing more stringent guidelines at this stage is the lack of independent research on dose-response relationships.  Industry-funded research tends to minimize the hazards while independent research has begun to confirm hazards.  More funding for research means better knowledge of how to manage risk.

The implications of these risks for IoT devices and wearables are huge.  Google Glass, FitBit, and wireless chargers are designed to be next to the human body all day long!  Where's the Consumer Product Safety Commission in this controversy?  If the telecom industry and phone makers don't voluntarily dial down the radiation from their products, they won't like it when the CPSC hammers them later.  It's better for industry to get out in front of this now before they face multi-billion dollar class action lawsuits from cancer victims.  Who holds the patents for low-radiation phones and antennas?  Those innovations may prove to be very valuable if carriers and makers bring them to market.  The evolution of mobile phone standards offers industry a way to reduce RF exposure.  GSM is the most widely adopted standard for 1G and 2G networks but it may generate higher RF exposures than CDMA for 3G and later networks.  I think GSMA and CDG should have a chat about public-interest solutions before lawyers start trolling through cancer cases.

Civilization needs mobile tech, so to keep it we need to manage its risks.  The Environmental Health Trust has developed a knowledge base on the safe use of cell phones.  The International Institute for Building Biology and Ecology wants us to read the instructions and labels on our wireless devices.  The National Cancer Institute has a fact sheet on the cancer risk from cell phones.  The National Consumer Advocacy Commission maintains a cell phone safety website that mostly covers accident prevention, although it does admit the need for further research on RF health hazards.

The experts at the CW Club also advocated some simple rules for minimizing exposure that I'll repeat here.  Use earpieces and speakerphones whenever possible.  Don't use a cell phone in areas with weak signals because it must work harder to generate more power.  Use the phone's "airplane mode" to turn off microwave signaling.  Don't keep a cell phone directly on your body.  That last one matters very much for women, because there is evidence showing that women who keep cell phones in their bras experience increased risk of breast cancer.  I keep my own powered off when it's in my jacket pocket.

Technology marches on and so must human health.  I believe there is a role for institutional investors to play in this debate by pushing publicly traded tech companies to raise the bar on safety.  Cell phone RF risk is a perfect test case for applying corporate social responsibility policies.  Risk demands regulation, but regulation needs data.  If government agencies can't or won't fund research on RF health hazards, there's an entrepreneurial opportunity for tech companies that market safer devices.  This has been your public health message for the day from Alfidi Capital.